Mosaic Fashions retail sales up in H1 FY 2009

13 Oct '08

5 min read

In recognition of the challenging climate in the UK throughout 2008, Mosaic has instigated a number of cost-saving programmes across the brands and shared services, limiting the impact of increases in non controllable expenses on store and head office costs. At the same time Mosaic has reduced long term borrowings (including current portion) by £40.4m in the first half and by £95m over the last 12 months.

Derek Lovelock, CEO Mosaic Fashions, commented: 'Despite an increasingly difficult retail climate in the UK, I am delighted with the improvement in Group performance. EBITDA is up 8%, excluding Whistles, which we sold just before last year-end, and we are reaping the benefits of our long-term strategy to build international brands. The work we have undertaken to reduce our long term borrowings continues to deliver results and we have seen an excellent outcome from our cost management programmes this year.

The start of the second half has shown no relief in terms of adverse market conditions and the impact of the recent news from the financial markets on consumer confidence cannot be underestimated. We remain very cautious of the overall UK market for the remainder of FY 2009 and the whole of FY 2010, and this, together with the impact of adverse exchange rate movements on margins, means we anticipate a very tough time ahead for UK fashion retail. Nonetheless, with the strength of our brands and our exposure to international markets, we remain in a strong position to deliver improved performance through the second half and into next year.'

Key Financial Information for H1 FY 2009
Income Statement
Sales were level, but up 5% excluding Whistles. Gross margin was 0.7% higher at 62.2%. Distribution costs for the group have risen slightly faster than sales; this reflects the impact of fixed store costs, which rose faster than sales in our solus portfolio. This has been largely offset by the results of our cost-saving programmes on controllable store costs. Administration expenses were level with last year, as cost-saving programmes across all our brands and shared service functions largely offset inflationary pressures.

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