Turnover of Nilorn Group goes up for second quarter
Nilorn Group reports the results for the second quarter of 2008. The operating profit, excluding items of none recurring nature, improved both for the second quarter and for the first half year 2008 in comparison with the same period for 2007.
We have continued our focus on sales and marketing activities and worked intensively with design and product development, showcasing new concepts to both new and existing customers. This work has produced good results and has attracted strong interest among our customers.
Great effort has been done to improve our purchasing routines, which has resulted in a substantially improved gross margin.
The work to strengthen the Nilorn Group regarding branding and design has led to change structure of Nilorn Turkey to a client- and concept oriented organisation. With this change we have improved our service to global clients with production in Turkey.
During the second quarter a joint-venture agreement was signed with Hembly International Holdings Limited, a garment producer, for an establishment in China. This co-operation gives local presence in China, shorter lead times and opportunities to be introduced via Hembly, to new clients and new markets.
We are also pleased to announce Steve Ablett as new MD for Nilorn UK. Steve, who is market- and client oriented, has experience from our business and will add a lot of competence and experience to Nilörns business in United Kingdom and to the Group. With these activities, modifications and increased focus on clients, I look forward to the rest of 2008.
Order income during the second quarter decreased by 4 % in comparison with the same quarter of the previous year and totalled SEK 81m (84). Order income during the half year increased to SEK 160m (158).
NET TURNOVER AND PROFIT:
Net turnover for the second quarter increased by 7 % to SEK 85m (80). Net turnover for the half year increased by 4 % to SEK 151m (145). The currency exchange rates have had a negative effect on the sales with SEK 9m. Adjusted for the currency effect the growth was 10 % for the half year.
The gross profit margin, excluding items of none recurring nature, improved to 45 (40) % for the quarter and to 46 (41) % for the half year. The gross profit margin increased due to moved production from Europe to Asia and to increased design value in the products.
The selling expenses totalled 27.3 (24.6) % of turnover and administrative expenses to 12.8 (11.9) %. The increased selling expenses depend on marketing activities and improved client service.
Operating profit for the second quarter was SEK 3.2m (4.3) and profit before tax SEK 4.1m (3.5). Items of none recurring nature affected the result by SEK 2.8m (1.4). Operating profit for the half year was SEK 2.7m (3.8) and profit before tax SEK 2.9m (3.0).
Items of none recurring nature affected the result by SEK -2.5m (2.7). The items of none recurring nature during 2008 comes from the decision to close down the production in Turkey and dismissal of employees. Net financial items for the second quarter totaled SEK 1.0m (-0.9), of which exchange-rate differences were SEK 0.3m (0.0).
The tax-rate was 24 (26) % for the quarter and 36 (4) for the half year. The tax affected positively 2007 of adjustment in deferred tax liabilities and negatively in 2008 of close-down of production in Turkey as no deferred tax receivable is booked.
Profit before tax for the second quarter improved with SEK 0.6m to SEK 3.2m (2.6) and earnings per share totalled SEK 1.22 (0.98). Profit before tax for the half year decreased with SEK 1.0m to SEK 1.9m (2.9).
CAPITAL TIED UP:
During the period, capital tied up in goods has increased by SEK 1.1m to SEK 43.0m (41.9). Account receivable decreased by SEK 4.5m to SEK 43.6m (48.1).