Interim Results
05 Octubre 2000 - 2:00AM
UK Regulatory
RNS Number:0541S
Oasis Stores PLC
5 October 2000
Oasis Stores Plc
Interim Results Announcement
For the 26 weeks ended 29 July 2000
Oasis Stores Plc, the women's fashion retailer operating outlets under the
Oasis and Coast brands, today announces interim results for the 26 weeks
ended 29 July 2000.
Summary:
* Turnover up 7% to #63.2m (1999: #59.2m)
* Oasis Retail like-for-like sales flat (down 2% currency adjusted)
* Profit before tax of #2.9m (1999: #5.0m)
* Dividend maintained at 2.90 pence
* Oasis Retail sales in the first 9 weeks of the second half up 2%; like-
for-like sales down 4%
* Coast sales in the first 9 weeks of the second half up 40%; like-for-like
sales up 16%
Commenting on the results, Derek Lovelock, Chief Executive said:
"The market for women's fashion retailers remains tough, even for those with
the most resilient brands. We continue to focus our energies on increasing the
efficiency of the business while at the same time investing in the future of
our brands. Coast is now starting to deliver sales that reflect the hard work
invested by its management team."
Enquiries:
Oasis Stores Plc 020 7452 1025
Derek Lovelock, Chief Executive
Financial Dynamics 020 7831 3113
Tom Baldock
INTERIM STATEMENT
Financial Summary
In a challenging environment and compared with a good first half last year, we
have produced pre-tax profits of #2.9m (1999: #5.0m). We have continued to
increase our market share with the opening of new stores and the company's
turnover increased by 7% to #63.2m (1999: #59.2m).
Oasis Retail sales improved by 7% with like-for-likes flat (+6% and -2%
respectively when adjusted for the effects of foreign exchange movements).
This resulted in an operating profit of #3.4m. Retail gross margins were 50.4%
(1999: 52.8%).
We have made progress during the period in better managing Oasis Retail
margins. At the end of the half the prior season stock levels were minimal. In
the second half to date achieved margins have been ahead of last year and
stock turn is one week better than last year. In a period where sales growth
has not met expectations we have managed our costs broadly in line with sales
levels.
While investment in the brand during the first half resulted in an operating
loss of #0.9m, we are encouraged by the development of Coast.
Capital expenditure was #3.1m (1999: #5.8m) and cash outflow improved to #1.5m
(1999: #2.7m). The board has proposed maintaining the interim dividend at 2.90
pence.
Operating Review
Oasis Retail
In the first half sales in Oasis UK rose by 6% with like-for-like sales down
2% and branches outperforming concessions. We opened five branches including
two relocations and one concession and closed two concessions. In the second
half we plan to open six new branches including four relocations and two new
concessions. We look forward to our biggest opening to date in Argyll Street,
London W1 with a trading area in excess of 6,500 sq. ft. We have continued our
programme of upgrading our portfolio in order to enhance the store
environment.
In Ireland sales rose by 22% including a like for like increase of 16%. We
opened one new branch in Galway, bringing our total number of outlets to 8.
Our German concessions increased sales by 8% including a like-for-like gain of
3%. Two new concessions were opened and one closed giving us a total of 17
concessions at the end of the period. No new openings are planned for the
second half.
In this period income from our overseas licensees grew by 17% to #0.4m (1999:
#0.3m). One new outlet was opened in Japan and further outlets are planned. We
are now represented in 10 countries.
The strength of sterling has been unhelpful but in spite of this we are seeing
healthy gains in local markets in Europe.
Coast
Our confidence in and commitment to the Coast brand is beginning to bear
fruit. The product range now offers our customers a distinctive, well
designed, fashionable and well priced selection of exciting clothing and
accessories and market research shows we are hitting our target customers. We
have an excellent management team in place that is well able to deliver the
full potential of this brand.
In the half, we opened three new outlets and closed one. In the second half we
plan to open a further four concessions.
Management
Dominic Lavelle resigned recently as Finance Director and I would like to take
this opportunity to thank him for his contribution to the company's
development. We expect to announce the appointment of his successor in the
near future.
We have further strengthened our merchandising function with the appointment
of an experienced head of department.
Brand
The continuing strength of the Oasis brand is
a key asset and extending it to
the internet was a major marketing initiative this year. This was successfully
achieved with the launch of oasis-stores.com in February 2000, which brings
alive the personality and spirit of the brand. oasis-stores.com is currently
receiving in excess of 30,000 page views per week.
We continue to build the e-database, our customer relationships and further
understanding of consumer needs through our site. The Oasis Card has achieved
significant growth this year and we continue to actively drive recruitment,
sales and loyalty through the card. Over the last year like-for-like sales
penetration levels have doubled from 6% to 12% and the total card base has
risen from 24,000 to over 55,000.
Oasis brand and product strength continues to be widely recognised by the
leading fashion titles. Consumers voted Oasis as "Best place to spend #250" in
Company Magazine/She's Gotta Have It and Cosmopolitan readers voted Oasis
"Favourite High Street Retailer" of the year.
Outlook
Like-for-like sales at Oasis for the first nine weeks of the second half were
down 4% on total sales up 2%. The challenging high street trading conditions
we experienced in the first half remain with us and it is unlikely that the
company's profits in the second half of the year will significantly exceed
those achieved in the same period last year.
We are pleased to see that Coast has made an encouraging start to the second
half. Like-for-like sales in the first nine weeks were up by 16% on total
sales up 40% and both brand and product are now well positioned for growth as
we open further outlets and approach critical mass.
PROFIT AND LOSS ACCOUNT
26 weeks ended 26 weeks ended 52 weeks ended
29th July, 2000 31st July,1999 29th January,2000
Unaudited Unaudited Audited
#'m #'m #'m
Turnover 63.2 59.2 131.8
Cost of sales (32.4) (28.4) (66.4)
Gross profit 30.8 30.8 65.4
Net operating expenses (28.3) (26.2) (55.2)
Operating profit 2.5 4.6 10.2
Net interest receivable
0.4 0.4 0.9
Profit on ordinary
activities
before taxation 2.9 5.0 11.1
Taxation on profit on
ordinary activities (0.9) (1.6) (3.5)
Profit on ordinary
activities after
taxation 2.0 3.4 7.6
Dividends (1.5) (1.5) (4.5)
Retained profit 0.5 1.9 3.1
Pence Pence Pence
Earnings per share -
basic 3.76 6.48 14.49
Earnings per share -
diluted 3.76 6.46 14.46
BALANCE SHEET
As at As at As at
29th July,2000 31st July,1999 29th January,2000
Unaudited Unaudited Audited
#'m #'m #'m
Tangible fixed assets 26.1 23.8 26.9
Goodwill 0.2 0.2 0.2
26.3 24.0 27.1
Stock 19.1 16.2 18.2
Debtors 6.6 5.8 6.5
Investments 0.0 0.9 0.0
Cash at bank 0.9 1.1 3.5
26.6 24.0 28.2
Creditors due within
one year (14.7) (14.5) (16.6)
Bank loans and
overdrafts (4.5) 0.0 (5.6)
Net current assets 7.4 9.5 6.0
Long term creditors
and provisions (0.8) (2.3) (0.7)
Net assets 32.9 31.2 32.4
Capital and reserves
Share capital 5.2 5.2 5.2
Profit and loss
account 27.7 26.0 27.2
Equity shareholders'
funds 32.9 31.2 32.4
CASH FLOW STATEMENT
26 weeks ended 26 weeks ended 52 weeks ended
29th July, 2000 31st July,1999 29th January,2000
Unaudited Unaudited Audited
#'m #'m #'m
Operating profit 2.5 4.6 10.2
Depreciation 3.9 3.4 7.1
Working capital movement (1.4) (2.1) (3.5)
Net cash inflow from
operating activities 5.0 5.9 13.8
Return on investments
and servicing of finance 0.4 0.4 0.9
Tax paid (0.8) (0.2) (4.4)
Capital expenditure and
financial investment
Purchase less sale of
tangible fixed assets (3.1) (5.8) (11.7)
Equity dividends paid (3.0) (3.0) (4.5)
(Decrease) in cash (1.5) (2.7) (5.9)
NOTES:
Comparative Figures
The comparative figures for the fifty two week period ended 29th January, 2000
and the summary balance sheet as at 29th January, 2000 have been extracted
from the Company's 1999/2000 statutory accounts which have been filed with the
Registrar of Companies. The auditor's opinion on those accounts was
unqualified and did not include a statement under Section 237(2) or (3) of the
Companies' Act 1985.
Accounting Policies
The interim statements have been prepared on the basis of the accounting
policies set out in the Company's 1999/2000 Annual Report and Accounts.
Earnings per share
The calculation of basic earnings per share is based on the profit on ordinary
activities after taxation and a weighted average number of shares being
52,457,175 ordinary share of 10p in issue (July 1999 - 52,457,175).
In accordance with FRS14, diluted earnings per share is disclosed on the face
of the profit and loss account. The basic earnings are identical for the
calculation of diluted. The weighted average number of shares in issue is
52,460,441 (1999: 52,590,680). The difference in the weighted average number
of shares in 2000 is due to the existence of dilutive share options during the
period.
Interim Dividend
An interim dividend of 2.90p per ordinary share (July 1999 - 2.90p) will be
paid on 1st December, 2000 to shareholders on the register as at 10th
November, 2000.
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