Supergroup gets its sums wrong, warns on profits
Trendy clothing group Supergroup has been growing so fast it has not been able to accurately predict the amount of money it expects to make, resulting in the group issuing a severe profits warning.
Trendy clothing group Supergroup has been growing so fast it has not been able to accurately predict the amount of money it expects to make, resulting in the group issuing a severe profits warning.
The group expects profit before tax for the year to end-April to be in the region of £43m, versus the current consensus forecast of £50.74m.
The group, which has developed a reputation in the City for being accident prone, said there have been arithmetic errors in its forecast of the wholesale business's performance amounting to a shortfall of some £2.5m.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
On top of that, the pell-mell growth of the group and its relative short trading history has made it difficult to accurately predict demand, and the group has admitted to a timing issue on the pull-down of stock over the year-end, which will put a £2m dent in profits.
The statement stressed that as this was strictly a timing issue, the "lost" £2m would turn up in the following year's profit and loss account instead.
The bad news does not end there. Retail sales are in line with expectations, but the mix of sales through its various channels has had an impact on margins.
Additionally, the group took the decision to increase its operating costs in order to ensure that it had the correct product at the right time in each of our retail channels, and also, to accelerate investment in its management team. "We anticipate the impact of these factors to be some £2.0m in total," the group said.
JH
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
-
What happens if you can’t pay your tax bill, and what is "Time to Pay"?
Millions are due to file their tax return this Friday as the self-assessment deadline closes. Though the nightmare is not over until you pay the taxman what you owe - or face a penalty. But what happens if you can't afford to pay HMRC your tax bill, and what is "Time to Pay"?
By Kalpana Fitzpatrick Published
-
What does Rachel Reeves’s plan for growth mean for UK investors?
Rachel Reeves says she is going “further and faster” to kickstart the UK economy, but investors are unlikely to be persuaded
By Katie Williams Published