TIDMFOOT
RNS Number : 4356M
Footasylum PLC
08 January 2019
8 January 2019
This announcement contains inside information
Footasylum plc
("Footasylum" or the "Company")
Trading Update
Further revenue growth across all channels and major product
categories, despite challenging trading conditions
FY19 gross margin now expected to be lower than previously
anticipated, due to higher than expected levels of promotional and
clearance activity
Footasylum, a UK-based fashion retailer focusing on the branded
footwear and apparel markets, announces an update on trading
performance for the 18 weeks ended 29 December 2018 (the "period").
All comparative figures relate to the 18 weeks to 30 December 2017
unless otherwise stated.
Revenue
Footasylum continues to deliver revenue growth across all
channels and all major product categories, with total revenue up
14% to GBP102.3m, and up 16% year-to-date to GBP200.8m. Online
continues to perform strongly, up 28% to GBP36.0m, and on a
year-to-date basis now accounts for 33% of total revenue, up from
30% in the comparative period. Wholesale revenue doubled from
GBP1.3m to GBP2.6m.
Revenue from stores was up 5% at GBP63.7m, despite the
challenging UK high street trading conditions and the previously
announced delays in delivering planned upsizes and new stores. Five
new store openings and three upsizes were completed ahead of
Christmas, and the Board is encouraged by their progress to date.
Following the new openings, Footasylum now operates 70 stores in
the UK, 68 of which are the core Footasylum fascia.
18 weeks to 29 December 2018
2018 2017 Revenue Growth
GBPm GBPm GBPm %
------ ------ ------- --------
Total Revenue 102.3 89.8 12.5 14%
- Store 63.7 60.4 3.3 5%
- Online 36.0 28.1 7.9 28%
- Wholesale 2.6 1.3 1.3 100%
------ ------ ------- --------
44 weeks to 29 December 2018
2018 2017 Revenue Growth
GBPm GBPm GBPm %
------- ------- -------- -------
Total Revenue 200.8 173.0 27.8 16%
- Store 130.0 119.4 10.6 9%
- Online 66.1 51.5 14.6 28%
- Wholesale 4.7 2.1 2.6 124%
------- ------- -------- -------
Outlook
The challenging trading conditions reported in the first half
have continued throughout the Christmas trading period. UK economic
uncertainty and weakening consumer sentiment have led to some of
the most difficult trading conditions seen in recent years.
Against this market backdrop, promotional activity and
discounting across the retail sector were higher than anticipated,
with the result that Footasylum's levels of promotional and
clearance activity were greater than expected during the period.
Consequently, while the Company has sustained its revenue growth
across all channels, gross margin has been lower than previously
expected for the period. Therefore, while Footasylum continues to
expect to report FY19 revenue in line with consensus expectations,
FY19 gross margin is now expected to be lower than current
consensus expectations.
The Board continues to maintain its strong focus on cash and
working capital management. Inventory was carefully managed
throughout the period, with inventory balances ending the period
only fractionally higher year on year. Footasylum remains (and
expects to remain) in compliance with the covenants of its GBP30
million multi-currency revolving credit facility.
Reflecting this focus, and the lower gross margin performance,
the Board is implementing a cost reduction plan across the business
which may result in some exceptional costs in FY19. Footasylum now
expects to report an adjusted EBITDA for FY19 towards the lower end
of the current range of analyst forecasts.
The Board expects to announce the Company's preliminary results
for the year ending 23 February 2019 on 21 May 2019.
Barry Bown, Executive Chairman of Footasylum, commented:
"In the context of the current tough conditions on the high
street, we are encouraged to have delivered revenue growth across
all of our channels and major product categories, with online and
wholesale continuing to perform particularly well. We have also
been pleased by the performance of the five new store openings and
three upsizes that we completed in time for Christmas.
However, the short-term outlook is undeniably challenging, and
we continue to maintain our focus on cash, working capital and
inventory management, as well as reducing costs across our
operations. The current trading conditions have led to significant
discounting and promotional activity across the sector, and this in
turn has impacted our gross margin expectations for FY19."
Enquiries:
Footasylum plc Tel: +44 (0) 1706 714 265
Clare Nesbitt, CEO
Barry Bown, Executive Chairman
Danielle Davies, CFO
GCA Altium Limited (Financial and Nominated Advisor) Tel: + 44
(0) 20 7484 4040
Phil Adams
Sam Fuller
Tim Richardson
Liberum Capital Limited (Broker) Tel: +44 (0) 20 3100 2222
John Fishley
Powerscourt (Financial Public Relations) Tel: + 44 (0) 20 7250
1446
Rob Greening
Lisa Kavanagh
Isabelle Saber
Customer website: https://www.footasylum.com/
Investor website: http://investors.footasylum.com/
Disclaimer
This announcement contains inside information for the purposes
of article 7 of EU Regulation 596/2014. The person responsible for
making this announcement on behalf of Footasylum is Nancy Kelsall,
Company Secretary.
Certain statements in this financial report are forward-looking.
Where the financial report includes forward-looking statements,
these are made by the Directors in good faith based on the
information available to them at the time of their approval of this
report. Such statements are based on current expectations and are
subject to a number of risks and uncertainties, including both
economic and business risk factors that could cause actual events
or results to differ materially from any expected future events or
results referred to in these forward-looking statements. Unless
otherwise required by applicable law, regulation or accounting
standards, the Company undertakes no obligations to update any
forward-looking statements whether as a result of new information,
future events or otherwise.
About Footasylum
Footasylum is a UK-based fashion retailer focusing on the
branded footwear and apparel markets. The Company retails
"on-trend" product ranges which are predominantly aimed at 16 to
24-year-old fashion-conscious consumers and are sourced from an
extensive stable of third-party and own brands. These include
well-known sports and casual footwear and apparel brands, as well
as up-and-coming brands and own label products.
Examples of third-party brands include: adidas; Nike; The North
Face; Gym King; Converse; New Balance; EA7; Vans; Nicce London;
Under Armour; Tommy Hilfiger; and Calvin Klein. Examples of
Footasylum's own brands include: Kings Will Dream and Alessandro
Zavetti.
The Company operates a multi-channel model which combines a
70-strong store estate - in a variety of high street, mall and
retail park locations in cities and towns throughout Great Britain
- with a fast-growing online platform and a recently launched
wholesale arm for distributing its own brand ranges via a network
of partners.
Footasylum was founded in 2005 and the Company's ordinary shares
were admitted to trading on AIM in November 2017.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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