TIDMCC.
RNS Number : 3123A
Clinton Cards PLC
29 March 2012
29 March 2012
CLINTON CARDS PLC
Interim Results for the 26 weeks ended 29 January 2012
Clinton Cards PLC, the UK's largest specialist retailer of
cards, today announces its Interim Results for the 26 week period
ended 29 January 2012.
Financial Highlights
-- Like for like sales for the first half were -1.1% (Clintons:-1.0%, Birthdays:-2.0%).
-- Significantly weaker margins as a result of clearing old
stock in the January Sale and an increase in lower margin gift
sales throughout the half.
-- First half operating profit before exceptional items of
GBP743k (Clintons: GBP3,588k and Birthdays: loss of GBP2,845k).
-- Basic loss per share of 1.70p (2011: basic earnings per share of 4.08p)
-- Cash generated from operations GBP46.9m (2011: GBP34.0m).
-- Net cash of GBP5.6m (Net debt of GBP34.3m at 31 July 2011 and
GBP5.1m at 30 January 2011).
Operational Highlights
Group
-- The strategic review, begun by Darcy Willson-Rymer when he
joined as CEO in October 2011, is on track for completion at the
end of April and the Company will engage with its stakeholders
(including lenders) post-completion. All elements of the business
are being reviewed to ensure it is fit for purpose, with a
single-minded focus on the customer.
-- Store Support Centre has been restructured, reducing net
headcount by 15% and bringing new skills and capabilities into the
business.
-- Management team strengthened with appointments of Sarah
Morris as Group Trading Director, (previously ran Merchandising for
John Lewis) and John Wrighthouse as Group HR Director (previously
Group HR Director at the Nationwide Building Society).
Clintons
-- First steps towards the restructuring and strengthening of
the store portfolio are underway, bringing total stores to 628. The
Group has focused on stores that demonstrate value to the business
and closed 17, which were in difficult locations and not meeting
business targets. The long-term store portfolio strategy is being
determined as part of the strategic review.
-- Continuing to work in partnership with our landlords, moving
from quarterly to monthly rents - over 60% of stores now on monthly
rents.
Birthdays
-- Examination of Birthdays within the strategic review.
-- Store portfolio restructured to total of 139 from 156, as loss-making stores were exited.
Borrowing Facilities
-- The Company secured new borrowing facilities in October 2011
for GBP55million, putting Clintons in a position to continue to
restructure.
The Board
-- As a result of the amount of change to the Board and
Leadership team, Don Lewin, OBE has been invited to continue in his
role as Non-Executive Chairman until 31 July 2012, given his
detailed knowledge of both the company and the greetings card
industry.
-- Hazel Cameron is being appointed as Non-Executive Director,
Hazel is a chartered accountant with corporate finance, private
equity and non-executive directorship experience including LDC,
Cross Atlantic Capital Partners, Bowman Capital and 3i.
-- Dave Hughes is being appointed as Non-Executive Director,
Dave brings multichannel and retail knowledge, including experience
with Sainsburys, Game and Marks & Spencer.
Darcy Willson-Rymer, Chief Executive Officer of Clinton Cards
PLC, said:
"This has been a challenging period in a difficult retail
environment, dominated by weak consumer confidence. Margins have
also been weaker as a result of the clearance of historic overbuys,
obsolete stock and the sale of lower margin gifts.
"Since joining Clintons last year I have embarked on a journey
of change, with a single-minded focus on the customer. With the
store portfolio undergoing significant restructuring and the
management team and the Board strengthened, the business now has
the ability to be stronger. However, the legacy of the business
cycle means that significant impact will only begin to come through
from the end of the second half of the financial year.
"The strategic review - which examines the customer experience,
the store portfolio, business efficiency, and the digital offering
- is on target for completion at the end of April. This is the main
platform for change and I am confident that the conclusions from
the review will put the business in the best possible position for
a turnaround.
"The outlook for the second half of the current year is below
our previous expectations but the changes we are undertaking to the
business will deliver significant benefits in future years."
Enquiries:
Clinton Cards
Darcy Willson-Rymer, Chief Executive Officer Tel No: 020 8502 3711
Speed Communications
Scott McLean Tel No: 020 7842 3260
CLINTON CARDS PLC
("the Company" or "the Group")
Interim Report for the 26 weeks ended 29 January 2012
Clinton Cards PLC, the UK's largest specialist retailer of
cards, today announces its Interim Results for the 26 week period
ended 29 January 2012.
PERFORMANCE
The last 26 weeks have been challenging given the difficult
retail environment which has been dominated by weak consumer
confidence. These factors have significantly impacted on Group
sales which have declined by 1.1% on a like for like basis. In
addition, the clearance of old stock in the January Sale and an
increase in the sales of lower margin gifts has resulted in a
significant weakening in the margin for the first half.
Total revenue in the period from the Clinton brand was GBP171.7m
compared to GBP178.3m from 21 fewer stores than last year. Like for
like sales in the 26 weeks ended 29 January 2012 were 1.0% lower
but transaction levels remained the same and spend per head
decreased by 1.0%
Total revenue for the Birthdays brand in the UK for the 26 weeks
ended 29 January 2012 was GBP25.5m compared to GBP28.6m in the
corresponding period last year representing a reduction in like for
like sales of 2.1%.
At 29 January 2012 Birthdays Retail Limited was trading from 139
stores in the UK compared to 157 at 30 January 2011.
Adjusted operating profit for the 26 weeks was GBP743k
(Clintons: GBP3,588k, Birthdays: GBP2,845k loss) compared to an
adjusted operating profit of GBP14.4m for the same period last
year.
CASH, BORROWINGS AND INTEREST
Average net debt in the 26 weeks to 29 January 2012 was GBP22.1m
in comparison to GBP23.6m in the 26 weeks to 30 January 2011, an
improvement of GBP1.5m. At the period end net cash, excluding
capitalised financing costs, was GBP5.6m (Net debt 2011: GBP5.1m).
Cash generated from operating activities was GBP46.9m (2011:
GBP34.0m).
Net interest payable in the 26 weeks to 29 January 2012 was
GBP2.1m compared to GBP1.6m in the prior period.
CURRENT TRADING
The start of the second half included both the key seasons of
Valentine's Day and Mother's Day. Last year, Mother's Day was 2
weeks later and therefore outside the 8 week comparable period.
While Group like for like sales are 11.8% up (Clintons: +12.5%,
Birthdays +7.3%) for the first 8 weeks of the current year compared
to last year, after adjusting for the timing of Mother's Day, the
underlying trend is down by 4%.
RESTRUCTURING THE BUSINESS
Since October 2011, we have embarked on a significant journey of
change with a single-minded focus on the customer.
Work to restructure the store portfolio has begun with the
long-term strategy to be detailed within the strategic review. We
are also working in partnership with our landlords, moving from
quarterly to monthly rents with over 60% of our stores now on
monthly rents.
We have strengthened the team at the Store Support Centre,
ensuring the right skills and capabilities are in place to support
the business while reducing net headcount by 15%. We have also
strengthened the Management team, with appointments of Sarah Morris
as Group Trading Director, (previously ran Merchandising for John
Lewis) and John Wrighthouse as Group HR Director (previously Group
HR Director at the Nationwide Building Society).
The strategic review - examining the customer experience, the
store portfolio, business efficiency, and the digital offering - is
on target for completion at the end of April and we will engage
with stakeholders (including lenders) post-completion. This is the
main platform for change and I am confident that the conclusions
from the review will put the business in best possible position for
a turnaround.
BOARD
As a result of the amount of change to the Board and Leadership
team, Don Lewin, OBE has been invited to continue in his role as
Non-Executive Chairman until the 31 July 2012, given his detailed
knowledge of both the company and the greetings card industry.
Hazel Cameron is being appointed as Non-Executive Director,
Hazel is a chartered accountant with corporate finance, private
equity and non-executive directorship experience including LDC,
Cross Atlantic Capital Partners, Bowman Capital and 3i.
Dave Hughes is being appointed as Non-Executive Director, Dave
brings multichannel and retail knowledge, including experience with
Sainsburys, Game and Marks & Spencer.
These new appointments replace Robert Gunlack and John Coleman
who will be retiring from the Board on the 31 March 2012. In
addition, John Robinson will be leaving the Board following his
decision to resign from his position as Buying Director and Stuart
Houlston will also be stepping down from the Board, but continuing
in his role as Group Property Director. I would to take the
opportunity to thank Robert Gunlack, John Coleman and John Robinson
for their contribution to the business, Stuart for his contribution
to the Board and welcome Hazel and Dave to the Board.
OUTLOOK
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