Rising gross margin and improved operating profit have been recorded for H1 2012/13. Management has decided to change brand portfolio, organisational structure and responsibilities of Group Management.
Consolidated revenue for H1 2012/13 amounted to DKK 2,036 million which, as expected, is 3% lower compared to last financial year. The Group’s gross margin improved by 1.4 percentage points. The operating profit amounted to DKK 160 million corresponding to an increase of 10%. In total, the Group’s performance for H1 2012/13 was as expected. New strategic initiatives have been launched in order to support revenue growth and enhanced earnings.
• Revenue from the Premium segment increased by 1% to DKK 1,136 million (DKK 1,121 million). The brand Tiger of Sweden reported higher revenue and the brand Peak Performance suffered a revenue setback as expected. The Premium operating profit amounted to 143 million (DKK 147 million) and the EBIT margin was thus 12.6% (13.1%).
• Revenue from the Mid Market segment suffered a setback of 15% to DKK 668 million (DKK 783 million) which was driven by a revenue consolidation of the core markets. The Mid Market segment consequently reported an operating loss of DKK 3 million (loss of DKK 3 million). The brands Jackpot and Cotton field are loss-making while the remaining
Mid Market brands are generating profit.
• Revenue from the Fast Fashion segment increased by 15% to DKK 231 million (DKK 201 million) and at the same time the Fast Fashion operating profit rose by DKK 19 million to DKK 22 million. The EBIT margin was thus 9.1% (1.1%).
• Capacity costs for H1 2012/13 were reduced by DKK 26 million. The operating costs were reduced by DKK 42 million.
• Operating profit amounted to DKK 160 million (DKK 146 million). The Group thus generated an EBIT margin of 7.9 %( 6.9%).
• Order intake for the spring collection 2013 in respect of the Fast Fashion segment has been completed satisfactorily and an increase of 1% or DKK 7 million has been recorded. An unchanged level was expected for this segment.
The smaller summer collection is expected to record a total setback of 10%. The total order intake for H1 2012/13 recorded an increase of 2% for the Premium segment, a reduction of 13% for the Mid Market segment and the Fast Fashion segment is expected to record an increase of 11%.
• The brand portfolio has been changed from 11 brands to 3 clearly defined business segments. The restructurering is expected to reduce the Group’s complexity significantly. The responsibilities of the Group Management are changed in order to reflect the new organisation.
• The Company has decided to divest the brands Jackpot and Cotton field. During the past few years the two brands have not been able to generate satisfactory results consequently resulting in substantial losses.
• The Company will enhance reporting transparency to the market. The new reporting will lead to enhanced transparency in respect of the performance of the individual segments.
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