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Fashion retailer KappAhl plans to open 57 new stores

06
Oct '08
KappAhl Holding AB, a leading fashion chain announces Year-end report and interim report for the Fourth Quarter of financial year 2007/2008.

Fourth Quarter (June - August 2008)
• KappAhl's net sales for the period (excluding VAT) amounted to MSEK 1,103 (1,090), an increase of 1.2 percent.

• Operating profit amounted to MSEK 182 (183). Operating profit in the current period has been affected positively by non-recurring items in an amount of MSEK 31. Operating profit in the same period previous year was affected negatively by non-recurring items in an amount of MSEK 6.

• The gross margin amounted to 61.9 (62.2) percent and the operating margin was 16.5 (16.8) percent.

• Profit after taxes amounted to MSEK 113 (119), which is equivalent to SEK 1.51 (1.59) per share.

• Cash flow from operating activities totalled SEK 130 (220).

Full-year (September 2007 - August 2008)
• KappAhl's net sales for the period amounted to MSEK 4,622 (4,473), an increase of 3.3 percent.

• Operating profit amounted to MSEK 651 (618). Operating profit in the current year has been affected positively by non-recurring items in an amount of MSEK 31. Operating profit in the previous year was affected positively by nonrecurringitems in an amount of MSEK 10.

• The gross margin amounted to 62.4 (61.1) percent and the operating margin was 14.1 (13.8) percent.

• Profit after taxes amounted to MSEK 437 (659), which is equivalent to SEK 5.82 (8.78) per share. Profit after taxes in the previous year was positively affected by tax revenue of MSEK 269.

• Cash flow from operating activities amounted to MSEK 730 (669).

• The Board of Directors proposes to pay a dividend of SEK 4.50 per share.

CEO's comments
KappAhl can now put another good year behind itself, and this in a fashion market with slightly weaker demand, particularly during the spring and summer. Our ability to demonstrate a steady development in such a market is highly encouraging.

In order to maintain profitable growth, KappAhl is investing in expansion and now has contracts for 57 new stores, at the same time as we are evaluating the opening of stores in a fifth country. KappAhl has a strong range, which appeals to our customers in all countries.

However, global financial uncertainty may lead to caution in both the short and medium term on the part of our customers. This makes it difficult to assess the near future, at the same time as these conditions could also bring new business opportunities for operations of our type, as KappAhl's chosen customer groups generally have comparatively small loans and their consumer margins are not dependent on the stock exchange. We have one of the industry's best gross margins, with continued improvement during the full year and stability in the last quarter.

In consideration of the above and in accordance with KappAhl's dividend policy, the Board of Directors proposes to pay a dividend of SEK 4.50 per share.

KappAhl is a leading fashion chain with around 4,000 employees and nearly 300 stores in Sweden, Norway, Finland and Poland. KappAhl sells value-for-money fashion to a number of target groups - men, women and children - but focuses particularly on women between 30 and 50. All clothes are designed by in-house designers.

KappAhl Holding AB


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