Ted Baker’s pre-tax profit increased from £7.8m to £11.6m in its first half as retail sales rose 30.2%. Retail Week takes a look at the response from the City.
Pre-tax profits came in at the low end of the range due to higher than expected build up in costs to develop the business overseas. The better than expected retail contribution, helped by a good performance in the US and Canada, was offset by strong growth in central costs, which rose by 24% to £22.4m. The current trading statement is positive although the company does refer to costs rising in second half from restructuring its store portfolio. An unerring focus on the integrity of the brand since inception and a ‘coming of age’ of the ranges, particularly womenswear have made the company well placed for an international roll-out and a significant step up in development of the internet. Cantor Fitzgerald analyst Freddie George
These figures are slightly behind expectations on a headline basis but a smidge better after factoring in the bonus provision. Ted has built further on its track record of consistent delivery and high quality of earnings over the past couple of years at the same time as successfully launching into new international markets with greater ambition. Brand momentum is clearly increasing as a result and this is feeding through to improved growth rates. N+1 analyst Matthew McEachran
Another glittering set of results from Ted Baker confirm that the group is making excellent progress on its aspiration to become a global lifestyle brand. Strong sales uplifts across both mature territories like Europe and newly penetrated regions like Asia clearly indicate that the company is successfully maintaining its resonance with consumers even as it forges ahead with its expansion plans. Products are always on trend with many having a unique twist that is distinctly Ted Baker; this helps to differentiate from competitors, insulating against discounting and giving Ted Baker something of a destination status. Looking forward, we are confident that the group has a firm grip on future product development. This gives it a solid foundation for continued expansion both on the international front and through e-commence, which remains a relatively small part of the business. As such, future growth prospects look rosy. Conlumino managing director Neil Saunders
Ted has reported another set of impressive results with interim PBT of £11.6m in line with our forecast. The unexpected deterioration in wholesale gross margin is more than offset by some impressive operating cost control, which notwithstanding a £0.9m staff bonus, has driven a 5% underlying beat to our estimates. Best-in-class management is beginning to extract leverage from Ted and we have confidence that the company can continue to grow sales by 10% p.a., which could see earnings growth still yet ahead of estimates. We reiterate our BUY recommendation. Ted Baker house broker Espitiro Santo analyst Robert Evans
Today’s interim results are even stronger than expected. Underlying PBT is up 33% to £12.5m, which is impressive progress, even though store opening costs depressed last year’s outcome a little. And the outlook remains good. Independent analyst Nick Bubb