Hong Kong based and luxury fashion goods retailer – Esprit Holdings Ltd announced its return to profitability in fiscal year period ending June 30, 2014.
In fiscal 2014, Esprit reported operating profit or EBIT of HK$361 million compared to negative EBIT or operating loss of HK$4,170 million in fiscal 2013.Hong Kong based and luxury fashion goods retailer – Esprit Holdings Ltd announced its return to profitability in fiscal year period ending June 30,#
In the same period, the luxury goods retailer posted a net profit of HK$210 million against net loss of HK$4,388 million in fiscal 2013.
Group turnover amounted to HK$24,227 million in fiscal 2014 down 6.5% from HK$25,902 million in the previous fiscal year. Fiscal 2014 also witnessed a 10.7% reduction in retail and wholesale space at the retailer.
Gross profit margin improved slightly year-on-year to 50.2% from 49.6%, which Esprit attributed to improved inventory management and continued spending in improving product quality.
Operating expenses (OPEX) in the fiscal year under review fell drastically to HK$11,795 million, down 30.6% from a year earlier bringing OPEX-to-sales ratio down from 65.7% to 48.7% also.
Net cash increased at the end of June 30, 2014 by HK$1,120 million to HK$5,771 million versus HK$4,651 million at end of June 30, 2013, which is the highest level since the end of fiscal 2008.
Esprit said net cash rose primarily from HK$2,006 million cash inflow from operations against HK$417 million cash outflow in fiscal 2013 as well as strict management of working capital and capital expenditure.
Esprit Board of Directors recommended a final dividend for the twelve months ended 30 June 2014 of HK 4 cents per share or 65% of basic earnings per share against nil in previous fiscal year.
CFO Thomas Tang said, “Intensive efforts of our team to reduce operating expenses and improve working capital management were key drivers in returning to both profitability and positive net cash generation.
“As our transformation progresses from a sound balance sheet, we intend to maintain financial discipline as well as leverage the reduced cost base to further improve overall performance”, he added.
In the new fiscal year, Esprit said it will focus on finalizing the implementation of the vertical model and overhauling the Group’s new operations.
“Once the top line recovers, the Group will fuel growth through both its omni-channel model and more intensive marketing efforts”, the retailer informed. (AR)
Fibre2fashion News Desk - India
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