FINANCIAL RESULTS (FOR CONTINUING OPERATIONS) FOR THE YEAR ENDED 29th AUGUST 2015
- Headline cash generation of £328.1m (last year £316.7m).
- Total Group operating profit before goodwill and exceptional items of £251.6m (last year £238.4m).
- Total sales of £2,069.3m (last year £2,032.9m).
- Underlying UK retail LFL sales were down -0.9% v last year
- Total LFL sales were down -0.7% v last year
- Total worldwide digital sales were up +23.9% v last year
- Continued investment in the business with capital expenditure of £118.1m (last year £101.8m).
- Year End net cash deposits of £229.1m compared to £199.8m last year.
Commenting on the announcement Sir Philip Green said:
“We are pleased once again to report strong cash generation of £328m, against the background of the fast changing retail industry. The number of channels through which customers choose to purchase and engage with us continually evolves, thus increasing the complexity of our operations. Hence our continued investment in the business as our need for efficiency and speed to market is paramount.
Over the past year, we have continued to trade successfully in the UK across all brands, whilst expanding our operations internationally.
In the USA we opened 5 new TOPSHOP/TOPMAN wholly owned stores, bringing the total now to 9 – including the 40,000 sq ft flagship on the world renowned 5th Avenue in NYC. We also opened a 12,620 sq ft flagship in Amsterdam.
We have further developed our successful partnership with Nordstrom, consumer sales increasing strongly by +50% compared to last year, and now trading out of 94 TOPSHOP concessions and 85 TOPMAN concessions in addition to Nordstrom.com. We are in discussions to further develop additional space across both brands, as in the current year sales have continued to achieve double digit increases. This is an exciting partnership with significant further growth potential.
Our Digital Wholesale business has expanded rapidly, and our brands now feature on multiple partner web-sites overseas, with our relationship with Zalando growing strongly across all of our brands.
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We opened 34 new franchise outlets for TOPSHOP/TOPMAN and 45 across our other brands during the year. Notable openings were the first TOPSHOP/TOPMAN flagship store in Auckland (New Zealand), further TOPSHOP/TOPMAN stores in Perth, Sydney and Vancouver, Multi Brand openings in Yas Mall (UAE) and Cairo Festival City (Egypt).
The year ahead will see the product launch of our 50/50 joint venture company Parkwood Topshop Athletic Ltd, created in partnership with Beyonce to produce a global athletic street-wear brand in this rapidly growing area of the market. We are developing our distribution globally for the launch of this exciting new brand in Spring 2016.
In the UK we are testing a new format trading Dorothy Perkins, Burton and Evans brands with Tesco, opening 14 outlets in 5 Tesco stores, with very encouraging results to date.
We invested £118m of capital into the Group, and have committed a further £84m this year. We continue to invest heavily in new systems to support our international and multi-channel development, and to refurbish our Head Office to provide our employees with a dynamic and creative working environment.
We continue to review our property portfolio in the UK, given the number of leases due to expire. Over the last year we have lease expired 86 sites and 236,400 square feet of space. Our current UK store portfolio stands at 2,358.
In March we sold our BHS business to Retail Acquisitions Limited, to enable us to focus on the growth of our multiples Brand operation in the UK and Internationally, across the Retail, Digital and Franchise channels.
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.
In the first 10 weeks of this year total VAT inclusive LFL sales were down -2.3% versus last year.
I would like to thank all of the teams within Arcadia for their commitment, energy and enthusiasm, which has enabled us to deliver a robust performance in challenging times. I would also like to thank Leonard Green and Partners for their continued engagement and support. Finally, I would like to thank our customers for their continued loyalty in shopping with our brands across multiple channels.”
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