FINANCIAL RESULTS FOR THE YEAR ENDED 30th AUGUST 2014

Financial highlights:

  • Arcadia headline cash generation of £316.8m (last year £324.7m).
  • BHS headline cash loss of £(21.0)m (last year £(19.3)m).
  • Total Group operating profit before goodwill of £189.3m (last year £201.2m).
  • Total Group pre tax profit pre exceptional items of £143.1m (last year £148.1m).
  • Total sales of £2,706.5m (last year £2,682.6m).
  • Underlying UK retail LFL sales were up +0.1% v last year
  • E-Commerce sales grew by +13.4%
  • Total LFL sales were up +1.6% (Arcadia LFL sales were up +0.7%, BHS LFL sales were up +3.6%)
  • Retail margin down -0.6% points v last year (Arcadia margin down -0.3%, BHS margin down -1.1%).
  • Continued investment in the business with capital expenditure of £105.0m (last year £87.0m).
  • Year End net cash deposits of £205.1m compared to £74.7m last year.

Please note that last year’s 53 week results are adjusted to a proforma 52 week equivalent for comparison purposes.

Commenting on the announcement Sir Philip Green said:

“We are pleased once again to report strong cash generation of £296m, against the background of on-going challenging global market conditions.

The retail industry continues to be fast changing, as the number of channels through which customers choose to purchase and engage with us continually evolves, thus increasing the complexity of our operations, and our need for efficiency and speed to market.

Over the past year, we have continued to trade successfully in the UK, with strong performances in particular from Dorothy Perkins and Wallis.

We have been successfully working with our investors Leonard Green & Partners to develop the TOPSHOP TOPMAN brands, both in the UK and internationally. In the USA we opened 3 new wholly owned stores, bringing the total now to 7 – this includes our recently opened 40,000 sq foot flagship on the world-renowned 5th Avenue in NYC.

Again within the USA, we have further developed our partnership with Nordstrom, now trading out of 52 TOPSHOP concessions and 55 TOPMAN concessions in addition to Nordstrom.com.

A further net 55 TOPSHOP TOPMAN international franchise outlets have been opened during the year.

Looking ahead for TOPSHOP TOPMAN, we have exciting new openings in Houston and Atlanta for Spring 2015, and our first wholly owned store in Europe opens in Amsterdam on 26th February, building upon our existing presence in 6 European department stores. Additionally, we are developing our trading relationship with Lane Crawford in Hong Kong, having opened a further 2 stores in the summer.

Across the wider Group, there have been a net 43 new franchise outlets launched, whilst many of our brands have also seen substantial growth in wholesale operations - currently trading across 10 different international websites including Zalando and Shangpin.

We invested £105m of capital into the Group, and have committed a further £94.5m this year. We are investing heavily in new systems to support our international and multi channel development, and refurbishing our Head Office to provide our employees with a dynamic and creative working environment.

BHS remains challenging however, with this sector of retail continuing to be very tough, whilst strong growth online helped to underpin their performance last year. We are continuing to trial the 3 new food stores opened this past year, which have traded favourably in the early stages.

We continue to review our property portfolio in the UK, given the number of leases due to expire. Over the last year we have closed a net 64 stores and 213,000 square feet of space. Our current UK store portfolio stands at 2,311.

Tight stock management remains a priority across the Group, alongside an effective and well-audited supply chain. We remain passionate about delivering relevant, exciting and well-priced ranges – giving our customers constant newness of product and digital content.  We have recently announced the creation of a 50/50 joint venture company, Parkwood Topshop Athletic Ltd, to produce a global athletic street-wear brand with Beyonce launching in Autumn 2015, and we are actively researching partners globally for this exciting new business model.

In the first 10 weeks of this year total VAT inclusive LFL sales were down -1.2% versus last year affected by unseasonably mild and wet weather.

I would like to thank all of the teams within Arcadia and BHS for their commitment, energy and enthusiasm, which has enabled us to deliver a robust performance in challenging times. Also, I would like to thank our customers for their continued loyalty in shopping with our brands across multiple channels.”

- Ends -

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