PREMIER INVESTMENTS LIMITED Premier Investments' underlying net profit before tax (NPBT) of $100.6 million, up 9.7% on 1H16 1,2
Premier Retail's underlying earnings before interest and tax (EBIT) of $93.0 million, up 10.6% and underlying EBIT margin up 50bps to 15.8%1,2
Premier Investments' reported net profit after tax (NPAT) of $71.9 million
Premier Retail's sales and margin:
Total sales up 7.1% to $588.6 million despite the negative impact of significant external events during the half (Hobart stores collapsed in August, unseasonably cold October and New Zealand Earthquake in November) 1
Like-for-like (LFL) sales up 2.1% on constant currency basis, following record 1H16 LFL growth1
Smiggle's global sales up 26.4% on 1H16 and continuing to grow strongly in all countries1
26 new stores opened in the UK during the half
7 new stores opened in Asia
Smiggle to enter Eurozone in 2H17 with first two stores to open in the Republic of Ireland
Peter Alexander's sales up 13.8% on 1H16 through very solid LFL growth and the opening of 3 new stores during 1H171
Online channel delivering a world class platform for customers with growing profitability. Total sales up 48.0% on 1H16, well ahead of the market growth1
Increased interim ordinary dividend of 26 cps, up 13.0% (1H16:23 cps)
Premier Investments Limited ("Premier") today reported underlying net profit before tax of
$100.6 million for the 26 weeks ended 28 January 2017 (1H16: $91.7 million). The reported net profit after tax for the half was $71.9 million. 1,2
Premier Retail's record underlying EBIT of $93.0 million was up 10.6% on the comparable 26 week period last year ($84.1 million). The underlying EBIT was at the top of the guidance previously given. Underlying net profit before tax increased 10.8% to $90.9 million.1,2
1Group result in 1H16 excludes non-comparable 27th week which contributed $15.2m in sales and $6.6m in EBIT. 1H17 Sales and LFL growth percentage is reported on comparable 26 weeks of 1H16.
2Underlying EBIT and NPBT excludes non-recurring costs during 1H17 regarding the finalisation of the one-off litigation matter ($3.0m) included within "Other Expenses" in the statutory accounts.
Total sales for Premier Retail were up 7.1%1to $588.6 million. Group LFL sales were up 2.1%1on a constant currency basis, on top of record 1H16 LFL growth.
The strong half year results were achieved notwithstanding the reported difficulties experienced by other discretionary retailers in Australia, as well as, significant external events that impacted the business (Hobart stores collapsed in August, unseasonably cold October and the New Zealand earthquake in November).
Premier's Chairman, Mr Solomon Lew said: "The Premier Retail team, led by Premier Retail CEO Mark McInnes, has again delivered a very strong performance with solid growth in sales and underlying earnings. These results were achieved in a half that saw several Australian discretionary retailers go out of business whilst others have reported significant decline in earnings. Premier Retail's performance in the half shows the robust nature of our business resulting from key investment decisions made over the past five years in line with the business' 2011 strategic review.
"Smiggle global sales were up 26.4%1. At the end of the half, Smiggle had 272 stores across Australia, New Zealand, Singapore, England, Scotland, Wales, Malaysia and Hong Kong. The brand has opened globally more than one store a week for the past 12 months with results ahead of expectations. Today I am delighted to announce that during the second half, Smiggle will enter the Eurozone by opening its first stores in the Republic of Ireland. The brand will continue to review opportunities in additional new geographies.
"Peter Alexander achieved sales growth for the half of 13.8%1whilst our online business significantly outperformed the market with sales growth of 48%1. We will continue to enhance our world class online platform by making significant investments in technology, people and marketing, to achieve annual online sales of over $100 million by 2020."
Premier Retail CEO, Mr Mark McInnes said: "We are relentlessly focussed on implementing our strategies - investing in expanding Smiggle globally, growing Peter Alexander significantly and delivering a world class online experience for our customers while achieving ongoing cost efficiencies and continuing to invest in our core apparel businesses."
During the half, Premier acquired an office building on St Kilda Road, Melbourne. The acquisition price of $58.0 million was over 85% funded via a new debt facility. The building will become the new head office of Premier Retail. The building will allow for the continued growth of Premier Retail with the ongoing interest cost of the investment less than the current significant escalating rent expense at the existing head office (excluding one-off relocation and make-good costs).
PREMIER RETAIL TRANSFORMATION - FOCUS ON GROWTH & INVESTMENT | |
Growth
| Core
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Smiggle opened 33 new stores during the 26 week half. The brand achieved global sales of
$134.7 million, up 26.4% on the comparable 26 week period last year. Almost 60% of Smiggle sales for the half were from outside of Australia.
At the end of the half Smiggle had 272 stores across Australia, New Zealand, Singapore, England, Scotland, Wales, Hong Kong and Malaysia. Premier Retail expects to have between 320 and 330 Smiggle stores trading before Christmas 2017. The brand performance across all geographies has given management confidence to reconfirm growth targets of:
$200 million in annual sales in the UK by calendar 2019; and
A footprint of 50 stores across Hong Kong and Malaysia within 5 years.
Premier today announced that Smiggle will enter the Eurozone by opening two stores in the Republic of Ireland during 2H17. The annual personal stationery market in the Republic of Ireland is US$360 million and management sees potential for between 15 and 20 stores over the next three years. These stores will leverage the existing Smiggle UK infrastructure.
Mr McInnes said: "The sales and customer acceptance of Smiggle in each of the countries we have entered continues to be exceptional. Our Managing Director of Smiggle, John Cheston, has led Smiggle to become a truly unique global brand. The brand is quickly being recognised as a new and leading retail concept in all of its new markets. Smiggle UK was recently awarded both Retailer of the Year 2016 by the British Council of Shopping Centres and Fastest Growing Shopping Centre Retailer for 2016 by Retail Week. As we enter the Irish market, we are excited about the opportunity to leverage the existing Smiggle UK infrastructure for this expansion in the same way that we've used Singapore as a platform for our broader Asian growth strategy."
Peter Alexander continues to perform stronglyTotal sales at Peter Alexander for the half grew by 13.8%1to $99.4 million with strong total and LFL sales in both Australia and New Zealand.
Peter Alexander opened three new stores during the half with all trading ahead of expectations. The brand also had significant improvements from refurbished and relocated larger stores in Chadstone, Pacific Fair, Spencer Street and Warringah.
During 2H17, Peter Alexander will open three new stores and upgrade and refurbish a further store. Management re-affirms plans to open between five and seven new stores in each of calendar years 2017, 2018 and 2019. Management also plans to upgrade, refurbish or upsize between three to five existing stores per year over the same timeframe.
Online strategy delivering a world class platformPremier Retail's online sales continue to significantly outperform industry growth, with total sales up 48.0%1on 1H16.
Online is a profitable channel for Premier with EBIT margin significantly higher than the group average. Premier will continue to invest in further enhancing its world class online platforms in order to reach $100 million in annual online sales by 2020.
PROGRESS AGAINST CORE TRANSFORMATION INITIATIVESPremier Retail's underlying EBIT increased by 10.6% to a record $93.0 million with the underlying EBIT margin up 50 bps to 15.8%.1,2
Gross margin strategies deliveringPremier Retail's gross margin of 64.0% for the half was delivered through the effective implementation of key gross margin strategies:
long term foreign currency hedging policies (in all markets) allowing for long term merchandising planning;
direct sourcing initiatives continuing to deliver benefits from new and existing suppliers;
sourcing from new geographies;
investing in better merchants delivering better product;
a focus on disciplined execution of markdown management; and
significant growth from higher margin brands Smiggle and Peter Alexander.
Premier Retail is fully hedged for all Australian, New Zealand and United Kingdom offshore purchases for the balance of FY17 and 1H18.
Premier Retail's inventory position was clean at end of the half.
Cost efficiency and supply chainCost of Doing Business for the half decreased by 115 bps as a percentage of sales to 48.4% in 1H17. 1
The group delivered ongoing cost efficiencies, despite structural inflationary pressure
Key investments in strategic growth initiatives, including Smiggle's international growth markets (UK, Republic of Ireland, Hong Kong, Malaysia), online and Peter Alexander will continue.
Premier Retail's record result for the half was achieved notwithstanding significant external events that impacted the business.
The group was forced to temporarily close four Hobart stores from 27 July 2016 in the Cat & Fiddle Shopping Centre due to a partial building collapse. In addition, all group flagship Chadstone stores were temporarily closed and severely disrupted in 1Q17 due to the centre's major upgrade and redevelopment.
Premier Investments Limited published this content on 21 March 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 29 March 2017 07:19:04 UTC.
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