Oasis Stores PLC - Interim Results
October 05 1999 - 3:01AM
UK Regulatory
RNS No 5291h
OASIS STORES PLC
5 October 1999
Enquiries:
Oasis Stores Plc 0171 452 1000
Michael Bennett, Chairman
Dominic Lavelle, Finance Director
Financial Dynamics 0171 831 3113
Tom Baldock
OASIS STORES PLC
Interim Results Announcement
For the 26 weeks ended 31 July 1999
Oasis Stores Plc, the women's fashion retailer, today announces interim
results for the 26 weeks ended 31July 1999.
Highlights:
- Turnover increased by 24% to #59.2m (1998: #47.6m)
- Oasis like-for-like sales up 9%
- Pre-tax profit up 4% to #5.0m (1998: #4.8m)
- Underlying pre-tax profit up 9% to #5.2m, before one-off items.
- Underlying Oasis operating profit up 20% to #5.1m (1998: #4.2m)
- New store look introduced across most outlets
- Senior management team strengthened
- Earnings per share up 6% to 6.48 pence (1998: 6.13 pence)
- Dividend up 9% to 2.90 pence (1998: 2.65 pence)
Commenting on the results, Chairman Michael Bennett said:
"Both our product and our new store look were well received in the first half
and I am comfortable that the continuing strength of the Oasis brand will
enable the company to achieve a satisfactory out-turn for the full year."
CHAIRMAN'S STATEMENT
Introduction
Our first half has shown steady progress both in sales and the strengthening
of our management team, to provide the services to support our future growth.
Pre-tax profits for the first half increased to #5.0m from #4.8m, which was in
line with our expectations. The core Oasis chain produced a sales increase of
23% including a 9% like-for-like increase, resulting in an improvement in
underlying Oasis operating profit of 20% from #4.2m to #5.1m. Company gross
margins were maintained at 52.0% (1998: 52.0%).
This was offset by a one-off item - the #0.2m cost of closing our loss-making
store in Oberhausen, and a #0.3m (1998: #0.1m) operating loss at Coast.
Interest income has declined from #0.7m to #0.4m. The half-year cash position
was #1.1m (1998: #0.9m). Capex was #5.8m (1998 : #3.8m).
The Board proposes to raise the interim dividend by 9% to 2.90p (1998 : 2.65p)
UK and Ireland
In the first half total sales in the Oasis chain rose by 24% and like-for-like
sales by 9%. Seven new stores were opened, 6 stores received major
refurbishment to our Year 2000 shopfit and all but a handful of stores were
re-badged and partly refurbished to reflect the new look.
In the second half we plan to open 8 new stores and carry out major refits to
3 concessions.
Overseas
The first half in Germany was disappointing with like-for-like sales 7% down.
This resulted from local management and not product issues. The changes we
have made are beginning to bear fruit and the first half ended on a more
positive note. The closure of Oberhausen will improve the profitability of our
German operation. We are opening two more concessions in Germany in the second
half and have a firm commitment which will give us concessions in three highly
successful stores next year.
In the period, income from licensees grew by 21% to #0.3m. Japan has now been
added to the list of countries where Oasis has franchise stores, bringing the
total number to 11. Early signs from the store, which is located in the
Ginza, Tokyo, are encouraging.
Although none of the overseas markets are easy and the strength of sterling is
unhelpful to profitability, we are seeing healthy gains in Europe.
Coast
The Coast division performed well and, although we will not eliminate the
first half operating loss of #0.3m (1998: #0.1m for a part period), we expect
trading to improve in the second half.
We have continued to invest in the infrastructure of the division and its
product development. Although in the short-term this increases costs the value
of this investment will start to show through in the coming years. The Coast
product is being well received by its customers but the full benefit of our
investment in new ranges will not be seen until the spring of next year.
This year we have opened 1 new branch and have closed 3 concessions. In the
second half we plan to open 2 new branches and close 5 concessions. At the
end of the period Coast had 6 branches and 19 concessions.
Management
A number of key appointments to senior management have been made, including a
retail director and a brand director.
The strengthening of the team reflects the changes required to cater for
future growth. Our new brand director has already succeeded in focusing our
promotional effort, including the re-branding of all our point of sale
material. We will in future be promoting a higher brand profile.
Hong Kong Sourcing Office
The Hong Kong office, which is now just over one-year-old has met all our
expectations and together with the investment we are making in the supply
chain-side of the business will bring increased benefits over the coming
years.
Year 2000
We place high importance on ensuring, as far as reasonably possible, that the
business and its trading relationships are not impacted as a result of Year
2000 problems.
The Company's Year 2000 compliance programme is substantially complete.
We implemented a detailed examination across the company to identify areas
where we were not compliant, and to determine and prioritise the necessary
action. We are now in the final stages of implementing that action.
The operation of our business depends also on the computer systems of our
suppliers. We have sought assurances from third parties and we are planning
contingency actions in key risk areas.
Based on the above, the Directors believe that, although no absolute assurance
can be given, appropriate steps have been taken to ensure that the Company's
activities will not be materially impacted by Year 2000 issue.
Outlook
For the first 9 weeks of the second half Oasis total retail sales were ahead
by 12% and like-for-like sales were flat. As we anticipated, during the four
weeks of August there was significantly less stock for us to clear than in the
previous year and, as a result, even though sales showed a like-for-like
decrease of 4%, margins were significantly better.
In common with the experience of other retailers, the first 2 weeks of
September were very disappointing, producing a like-for-like decline of 5%.
However, the last 3 weeks have produced a like-for-like improvement of 8%.
The new season's ranges are being well received and we feel comfortable with
the market expectation of our performance for the full year. As always I would
just like to remind you that December is a key trading month and no one as yet
knows how strong an impact the millennium holiday period will have on sales.
Any growing business has to manage considerable change and I would like to
express my thanks to all my colleagues for the enthusiasm with which they have
embraced change and for the energy and dedication they have shown in keeping
the company as one of the market leaders in its chosen niche.
Profit and Loss Account
26 weeks 26 weeks 52 weeks
ended ended ended
31st July, 1st 30th January,
1999 August,1998 1999
Unaudited Unaudited Audited
#m #m #m
Turnover 59.2 47.6 111.8
Cost of sales (28.4) (22.9) (55.3)
Gross profit 30.8 24.7 56.5
Net operating expenses (26.2) (20.6) (44.8)
Operating profit 4.6 4.1 11.7
Net interest 0.4 0.7 1.3
receivable
Profit on ordinary
activities before 5.0 4.8 13.0
taxation
Taxation on profit on
ordinary activities (1.6) (1.6) (4.2)
Profit on ordinary
activities after 3.4 3.2 8.8
taxation
Dividends (1.5) (1.4) (4.4)
Retained profit 1.9 1.8 4.4
Pence Pence Pence
Earnings per share - 6.48 6.13 16.71
basic
Earnings per share - 6.46 6.13 16.71
diluted
Balance Sheet
As at As at As at
31st July, 1st 30th January,
1999 August,1998 1999
Unaudited Unaudited Audited
#m #m #m
Tangible fixed assets 23.8 18.0 21.4
Goodwill 0.2 0.2 0.2
24.0 18.2 21.6
Stock 16.2 14.6 14.9
Debtors 5.8 4.9 5.3
Investments 0.9 - 0.9
Cash at bank 1.1 0.9 3.8
24.0 20.4 24.9
Creditors due within (14.5) (9.9) (16.5)
one year
Net current assets 9.5 10.5 8.4
Long term creditors
and provisions (2.3) (2.0) (0.7)
Net assets 31.2 26.7 29.3
Capital and reserves
Share capital 5.2 5.2 5.2
Profit and loss 26.0 21.5 24.1
account
Equity shareholders' 31.2 26.7 29.3
funds
Cash Flow Statement
26 weeks 26 week 52 weeks
ended ended ended
30th July, 1st August, 30th
1999 1998 January,
Unaudited Unaudited 1999
#m #m Audited
#m
Operating profit 4.6 4.1 11.7
Depreciation 3.4 2.3 4.7
Working capital movement (2.1) (5.7) (2.7)
Net cash inflow from
operating activities 5.9 0.7 13.7
Return on investments
and servicing of finance 0.4 0.7 1.3
Tax paid (0.2) (1.2) (3.5)
Capital expenditure and
financial investment
Purchase less sale of
tangible fixed assets (5.8) (3.8) (10.7)
Equity dividends paid (3.0) (2.7) (4.1)
(Decrease) in cash (2.7) (6.3) (3.3)
Notes
Comparative Figures
The comparative figures for the fifty two week period ended 30th January, 1999
and the summary balance sheet as at 30th January, 1999 have been extracted
from the Company's 1998/9 statutory accounts which have been filed with the
Registrar of Companies. The auditors' opinion on those accounts was
unqualified and did not include a statement under Section 237(2) or (3) of the
Companies' Act 1985.
Accounting Policies
The Interim statements have been prepared on the basis of the accounting
policies set out in the Company's 1998/9 Annual Report and Accounts.
Earnings per Share
The calculation of basic earnings per share is based on the profit on ordinary
activities after taxation and a weighted average number of shares being
52,457,175 ordinary shares of 10p in issue (July 1998 - 52,457,175).
In accordance with FRS14, diluted earnings per share is disclosed on the face
of the profit and loss account. The basic earnings are identical for the
calculation of diluted. The weighted average number of shares in issue is
52,590,680 (1998 : 52,457,175). The difference in the weighted average number
of shares in 1999 is due to the existence of dilutive share options during the
period.
Interim Dividend
An interim dividend of 2.90p per ordinary share (July 1998 - 2.65p) will be
paid on 3rd December, 1999 to shareholders on the register as at 12th
November, 1999.
END
IR ASSWKKAKRRAA
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