After publishing the company announcement no. 2/2015 on 5 February 2015 we have been made aware that guidance for the Group’s full-year revenue 2014/15 was incorrect.
The correct full-year guidance on revenue is at a level of DKK 2,600 – 2,650m
The full announcement in it’s corrected form is shown below
Group revenue was DKK 1,426m (DKK 1,380m) in H1 2014/15, an increase of 3.3% (5.5% in local currency) compared to the same period last year. Gross margin was 55.1% for the Group’s continuing operations, which was lower than for the same period last year (57.2%). Operating profit for the Group’s continuing operations which came to DKK 162m was impacted by non-recurring costs of DKK 12m relating to a potential case concerning indirect taxes.
- Peak Performance generated revenue for H1 2014/15 of DKK 586m (DKK 565m), corresponding to growth of 3.6% (5.6% in local currency). Growth in sales to wholesale customers was satisfactory, whereas revenue growth of the retail channel was negative. The brand generated revenue growth in the Nordic region and Central European countries. Operating profit was DKK 103m (DKK 91m).
- Tiger of Sweden increased revenue by 8.4% (12.2% in local currency) to DKK 468m (DKK 432m). The retail channel recorded moderate revenue growth, while sales to wholesale customers in particular made a positive contribution to the overall revenue growth. The Nordic region and Germany were the main contributors to the overall revenue growth. Operating profit was DKK 51m (DKK 45m).
- Revenue reported by By Malene Birger of DKK 161m was unchanged compared to the same period last year (DKK 160m), corresponding to growth of 1.4% in local currency. Revenue from the wholesale channel increased and outweighed reduced revenue of the retail channel. This reduction in revenue was primarily attributable to the e-commerce channel where website traffic was not adequately converted into sales. Operating profit was DKK 8m (DKK 13m).
- Revenue from the non-core business declined by 5.2% in H1 2014/15 (declined by 4.6% in local currency). Saint Tropez increased revenue in Q2 2014/15, thus partly outweighing its negative performance in Q1 2014/15. Designers Remix generated positive revenue growth in H1 2014/15. Operating profit was DKK 13m (DKK 17m).
- In Q2 2014/15, a provision of DKK 25m was made to cover non-recurring costs relating to a potential case concerning indirect taxes. Continuing operations were impacted by DKK 13m, while the remaining DKK 12m related to the discontinued operations. Gross profit for the continuing operations was impacted by DKK 8m, operating profit was impacted by DKK 12m, while DKK 1m related to financials.
- Gross margin for the Group’s continuing operations was 55.1% in H1 2014/15 against 57.2% in the same period last year, a decline which was attributable to the non-recurring costs as indicated above, negative exchange rate effects, higher discounts and mix effects of goods sold.
- Capacity costs which increased by DKK 2m to DKK 625m were negatively impacted by the non-recurring costs referred to above, but positively affected by exchange rate effects. Following the divestment of the Mid-Market division, idle capacity costs impacted the Group’s performance negatively by DKK 8m in H1 2014/15.
- Operating profit declined by DKK 4m to DKK 162m (DKK 166m) primarily due to the negative impact of non-recurring costs of DKK 12m in Q2 2014/15, corresponding to an EBIT margin of 11.3% (12.0%). Adjusted for non-recurring costs and idle capacity costs, EBIT margin was 12.8% in H1 2014/15.
Outlook for the financial year 2014/15 – updated
The Group’s Premium brands are expected to continue their positive trend of growth in 2014/15, and Group revenue is therefore expected to increase (unchanged). Consequently, revenue from continuing operations is expected to be in the region of DKK 2,600-2,650m.
In 2014/15, the Group’s continuing operations will be negatively impacted by DKK 12m due to provisions made to cover non-recurring costs relating to a potential case concerning indirect taxes and due to idle capacity costs estimated at approximately DKK 30m (previous guidance: DKK 45m).
Adjusted for these costs, earnings of the Group’s Premium brands are expected to improve (unchanged) and operating profit is expected to be realised in the region of DKK 200-230m.
As a result of lower revenue, the Group’s non-core business is not expected to maintain the current earnings level (previous guidance: to maintain the current earnings level), and operating profit is expected to be realised in the region of DKK 15-25m before non-recurring cost and idle capacity costs as indicated above.
Operating profit for the Group’s continuing operations is expected to be approximately DKK 170-210m. Adjusted for the above-mentioned costs, operating profit for continuing operations is expected to be in the region of DKK 215-255m.