Thursday 12 December 2019 9:47 am

Superdry swings to £4.2m loss as Dunkerton hits reset button

Superdry’s swung to a £4.2m loss in its first half-year results under co-founder Julian Dunkerton since his return to the helm, the firm revealed today.

Read more: Saga appoints ex-Superdry boss Euan Sutherland as new CEO

The figures

Superdry witnessed underlying profits implode as they sank 98.4 per cent year on year to just £200,000 in the six months to the end of October.

The fashion brand also made a loss before tax of £4.2m, down from a £26.4m profit this time last year.

Revenue shrank 11 per cent to £369.1m compared to a year ago while it also racked up a debt pile of £9.3m, compared to a cash position of £19.2m in 2018.

Investors suffered a loss per share of 7.9p, versus 24.7p per share they pocketed this time last year. 

Meanwhile Superdry scraped together an interim dividend of just 2p per share, a 78.5 per cent cut on last year’s 9.3p.

Read more: Julian Dunkerton will stay as Superdry CEO until at least 2021

Why it’s interesting

Dunkerton, who won an audacious bid to reinstall himself on Superdry’s board in April, today sought to calm miffed investors by stressing the turnaround strategy will take two to three years to pull off.

But shareholders sold out of the founder’s company to send its share price 4.7 per cent down to 476.6p in early trading.

While margins improved over the period, adverse currency movements and stock accounting changes lessened their positive impacts.

Meanwhile Superdry booked charges of £3.1m on accounting estimates for inventory and £6.9m for bad debts.

Broker Peel Hunt warned that interim profits are around £10m below market expectations.

That will knock full-year expectations by around £10m, Peel Hunt analysts John Stevenson and Jonathan Pritchard added.

“As expected, the numbers make for grim reading, reflecting the legacy position and stock file, although the statement is peppered with examples of product and operational improvements that are expected to form the foundations of more meaningful recovery next year,” they said. 

“While there are some signs of a recovery, this year is likely to be a period of consolidation,” added CMC Markets chief market analyst Michael Hewson.

Dunkerton oversaw another profit warning in May, shortly after he joined, and shares have traded sideways since then, slipping to a low of 380.2p in August before climbing back to 500p before today’s fall.

Read more: Superdry shares dive after board exodus

What Superdry said

Julian Dunkerton, founder and CEO, said:

At this halfway point in our financial year, I am pleased with the progress we have made to comprehensively reset Superdry.

We’re doing this through our product and brand, our physical and digital retail operations and a renewed focus on the retailing basics. We are only eight months into a process that will take two to three years, but I have great confidence in the strength of our new executive leadership team. I am also pleased with the trajectory of performance we have seen from Q1 to Q2 and subsequently into our peak trading period, which gave us our biggest online trading day ever.

However, we remain cautious about the challenging market conditions over the peak trading period.

More to follow.