Ted Baker hails strong first half

Fashion chain Ted Baker said reaction to its autumn/winter collections has been positive as it unveiled a solid first half trading performance.

Group revenue in the 28 weeks to August 11th rose 15.4% to £118.6m from £102.8m at the halfway point last year. UK and European retail sales rose 7.9% year-on-year to £74.7m while US retail sales shot up 53.3% to $25.6m. In the rest of the world, retail sales were up 58.1% to £2.8m. E-commerce sales were up 82.4% to £6.2m.

The retail gross margin was 64.6% (2011: 64.0%) reflecting a lower level of promotional activity this time round.

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Wholesale sales were up 15.4% to £24.9m from £21.6m the year before, reflecting continued growth in the UK and USA. Underlying wholesale margins were largely unchanged. Group wholesale sales for the full year are expected to be up by some 8% year-on-year.

Licence income increased by 19.2% to £3.7m as a result of a strong performance from both product and territorial licences.

Profit before tax and exceptional costs climbed 10.4% to £9.4m from £8.5m the year before, but once those exceptional costs had been applied, profit before tax was down 8.4% at £7.8m. The exceptional costs of £1.6m relate to rent on the group's prestigious store on Fifth Avenue in New York and its stores in Tokyo, as well as set-up costs for its expansion into China. There were also a few bad and doubtful debts from Greek customers.

Adjusted earnings per share (EPS) advanced to 16.8p from 14.8p last year, but basic EPS retreated to 13.9p.

The interim dividend has been hiked 10.5% to 7.9p from 7.15p the year before.

"Whilst we have made a strong start to the financial year, our results for the full year will, as always, be dependent on trading in the second half of the financial year and we remain cautious given the challenging trading environment. Our costs and financial commitments remain under control and, with our strong balance sheet, we will continue to invest in the long term development of the Ted Baker brand," the company said.

JH