SuperGroup on track despite super-wet summer

Fast-growing fashion firm SuperGroup delivered full-year numbers in line with guidance given at the time of its April profit warning, while current trading is in line with expectations, despite the wet weather.

The company had indicated that underlying profit before tax for the 52 weeks to April 29th would be around £43m, and so it proved, with the company unveiling a 14.7% decline in profits to £42.8m from £50.2m the year before. Reported profit before tax rose 8.7% to £51.4m from £47.3m the year before.

Group revenue shot up 31.9% to £313.8m from £237.9m the previous year, as indicated at the time of the group's fourth quarter interim management statement.

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UK like-for-like sales, including Internet sales, were up 2% on the year. The group said Internet sales now comprise 10% of its sales.

Worryingly, the underlying profit margin was down by 7.5 percentage points from the previous year, which the group attributed largely to the dog's breakfast it made of the implementation of a new warehouse management system (WMS), though rising cotton prices and higher head office costs also played their part. The group estimates that the WMS problems shaved around £9m off the bottom line.

The motto of SuperGroup should perhaps be Too much, too soon, a point alluded to by Julian Dunkerton, the Superdry brand owner's Chief Executive Officer.

"Whilst sales have continued to grow substantially, this has been a disappointing year for the group. We have faced challenges brought about by the rapid growth of our business which have been compounded by the volatile and adverse market conditions being experienced by all fashion retailers. Profits have, therefore, fallen short of expectations," Dunkerton admitted.

With a reputation to restore in the eyes of the City Dunkerton expressed pleasure in the improvements in the group's operational capacity seen since the management team was strengthened.

"Despite the backdrop, the Superdry brand remains strong and I am encouraged by the potential for our 2013 ranges. We are now committed to growing the group in a controlled and measured way," Dunkerton said.

Group Chairman Peter Bamford admitted that while the tough and volatile economic trading environment had not made things easier for the group, "our problems have been largely self-inflicted."

The Retail division's external revenues rose 29.6% to £191.0m from £147.7m the year before, with underlying operating profit down 16.1% to £31.7m from £37.8m, while the underlying operating profit margin slumped nine percentage points to 16.6% from 25.6%.

The picture was brighter in Wholesale, where external revenues rose 35.7% to £122.8m from £90.5m the previous year, and the underlying operating profit jumped 18.2% to £25.3m from £21.4m. The underlying operating profit margin eased to 20.6% from 23.6% the previous year.

"The first 10 weeks of trading have been affected by the unseasonal weather conditions, with June being announced recently as officially the wettest on record. Despite that, results have been broadly in line with management expectations," the group revealed.

JH