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Ted Baker registers strong growth in licence income

Oct '08
Ted Baker PLC announces interim results for the 28 weeks ended 9 August 2008.

• Good first half performance in a difficult trading environment
• Strength of the Ted Baker brand and successful multi-channel distribution strategy continues to drive growth
• Strong performance from retail division with sales up 17.5% to £53.3m
• Launch of second Womenswear only store in South Molton Street, London
• New retail stores opened in Cheapside in London, Heathrow Terminal 5, Belfast and Cambridge
• Wholesale sales down 12.1% to £18.3m as previously outlined
• Strong growth in licence income, up 26.1% to £2.9m

Commenting, Ray Kelvin, Founder and Chief Executive, said:
"The Group has performed well during the first half of the year and the strength of the Ted Baker brand combined with our successful multi-channel distribution strategy and careful international expansion has enabled us to deliver good growth for the period in an unpredictable market.

The initial response to our Autumn/Winter collections has been positive. Since the period end we have opened new retail stores in Bristol and Liverpool and look forward to the opening of our two new stores in the White City development in Westfield London. The Board is, however, mindful of the uncertain economic environment and we remain understandably cautious about trading in the second half of the year."

I am pleased to report a good first half performance from the Group in a difficult trading environment. This is once again due to the strength of the Ted Baker brand, our dedicated focus on quality, our attention to detail and our multi-channel distribution strategy.

Retail sales rose by 17.5%, as we increased our presence in the UK, and licence income increased by 26.1%. Wholesale sales were 12.1% down reflecting challenging conditions for some of our wholesale customers, the transfer of some wholesale accounts to retail concessions and the actions taken in respect of those customers who are no longer appropriate for our brand.

Group revenue increased by 8.2% to £71.6m (2007: £66.2m) for the 28 weeks ended 9 August 2008 (“the period”) and the composite gross margin was above last year at 58.7% (2007: 56.6%) due to the change in the mix between retail and wholesale sales. Operating expenses rose by 15.5% to £37.8m (2007: £32.7m).

Distribution costs, which mainly comprise the cost of retail stores, outlets and concessions, increased by 17.4% to £27.7m (2007: £23.6m), primarily reflecting the increase in retail space. Administrative expenses increased by 10.8% to £10.2m (2007: £9.2m) principally reflecting the increased activity of our business.

Operating profit was up 2.0% at £7.3m (2007: £7.1m) with profit before tax rising 5.4% to £7.4m (2007: £7.0m). Basic earnings per share increased by 7.8% to 12.4p (2007: 11.5p). Cash flow from operating activities was £3.4m higher than last year, of which £1.5m reflected an improvement in working capital.

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