Retailer Laura Ashley released steady results after a challenging year that has seen its stock lose a third of its value.
The current period was 74 weeks to 30 June 2016 compared to a 52 week prior period to 31 January 2015.
Revenue stood at £172m, meaning that the run-rate was broadly in line with the £129m in the previous period.
Profit before tax was almost identical at £23.9m compared to £23.5m. The current year was particularly impeded by exceptional costs of £1.9m, financing costs of £1.3m and the share of losses from associates of £1.9m.
Operating cash flow was down from £23.8m to £16.3m and there was a considerable outlay of property £39.5m, partially funded by bank loans of £24.1m. Cash balances dropped from £27.8m to £19.8m with £21.7m of new bank loans remaining outstanding.
Why its interesting
Known by many as a quintessentially middle-class high street retailer, Laura Ashley has actually been a public company since 1985. Furthermore, its owners – Malayan United Industries Berhad – have been in charge since 1998.
Despite still having a presence in the UK with 192 stores, e-commerce sales were a key growth driver during the period. Sales of £73.5m represented a 15.7 per cent increase on a like-for-like basis.
Restructuring costs undoubtedly hampered performance as it was forced to shell out £1.3m in costs after a licence partner was placed into administration.
Laura Ashley also runs two hotels (in Windermere and Elstree) that generated £3.5m of revenues last year.
Cantor Fitzgerald reaffirmed its "Buy" recommendation but revised its target price from 35p to 30p as a result of concerns over weakness in sterling and the company's associated purchasing power.
Shares rose nearly five per cent to 22.25p in response to the results.
What Laura Ashley said:
Chairman Tan Sri Dr Khoo Kay Peng said:
I am pleased with the overall performance of the business. Continued like-for-like growth in the UK market, boosted by the good performance of our digital channel, is encouraging.
I am happy that the company has signed a new licence partner for Australia and am confident that the business opportunity there will be optimised. Such partnership opportunities, in new territories, will continue to be explored and developed.
The company will continue to focus on enhancing the design and quality of its product ranges upon whose provenance the brand has been built.
In a time of uncertainty for retail and the global economy at large, I am optimistic and confident that Laura Ashley will remain a business with solid foundations to withstand challenges as they arise.