Brait Plc · JSE:BAT
Brait — New Look Retail Group — Q1 FY19 Earnings Presentation
21 slides from Brait's earnings presentation, August 2018
Slide 1: Investor Presentation Q1 FY19
INVESTOR PRESENTATION Q1 FY19 13 Weeks to 23 June 2018
Slide 2: Disclaimer
2 This presentation has been prepared by New Look Retail Group Limited and its subsidiaries (“New Look”) solely for informational purposes and does not constitute, and should not be construed as, an offer to sell or issue securities or otherwise constitute an invitation or inducement to any person t
Slide 3: Agenda
3 AGENDA KEY HEADLINES Alistair McGeorge, Executive Chairman TURNAROUND PLAN Alistair McGeorge FINANCIAL REVIEW Richard Collyer, CFO SUMMARY & OUTLOOK Alistair McGeorge Q&A Alistair McGeorge Richard Collyer
Slide 4: Key Headlines
4 KEY HEADLINES ALISTAIR McGEORGE Executive Chairman
Slide 5: Key Headlines
5 Key Headlines • Management team continues to deliver on turnaround plan: • Broad appeal product performance continues to improve as demonstrated by: • UK store conversion rate increased to 25.1% (Q1 FY18 23.0%) • Outperformed the market by 7.4%pts. according to the British Retail Consortium during
Slide 6: Turnaround Plan
6 TURNAROUND PLAN ALISTAIR McGEORGE Executive Chairman
Slide 7: Return to proven broad appeal product and better value
7 Return to proven broad appeal product and better value • Identifying and buying key trends with confidence • Positive gross profit results throughout Q1 compared to last year on the key clothing areas where we have focussed our initial attention: • Dresses +79% • Going out +22% • ‘Tops and bottoms
Slide 8: Fundamentally realigned supply chain
8 Fundamentally realigned supply chain • Speed to market on key product categories quickened in Q1 and we continue to improve our internal processes • Clean stock position at the end of Q1 with inventory 21% lower than last year, outperforming the target reduction of 15% • Tighter stock management p
Slide 9: Cohesive multichannel model
9 Cohesive multichannel model • E-commerce channel driving footfall into stores; • Click and Collect sales mix increased to 40% (Q1 FY18 27%) • Online returns to stores mix has increased to 77% (Q1 FY18 66 %) • Continued investment to drive a better customer experience; • ‘Model Wears’ functionality
Slide 10: Efficiency and cost savings
10 Efficiency and cost savings • Already identified and actioned £70m of cost savings (including the CVA) as part of the turnaround plan • Cost savings over-achieved in the quarter including: • £9m in relation to the CVA • £5m marketing spend across all channels • £2m cost related to distribution •
Slide 11: Financial Review
11 FINANCIAL REVIEW RICHARD COLLYER CFO
Slide 12: Summary Consolidated Income Statement
12 Summary Consolidated Income Statement Q1 FY19 Q1 FY18 (13 weeks) (13 weeks) • Revenue declined by 2.7% (£9.3m) predominantly driven by the £m £m continued focus on more profitable sales within the E-commerce Revenue 329.4 338.7 channel Cost of sales (163.7) (160.0) • Gross margin declined by 250
Slide 13: Segmental Performance
13 Segmental Performance • UK Retail sales increased by 0.6% (£1.4m) as a result of improved sales across a number of areas and an increase in promotional activity on other lines. UOP increased by £1.2m with the lower gross margin being offset by cost savings and efficiencies • E-commerce (2) sales
Slide 14: Summary Consolidated Balance Sheet
As at 14 Summary Consolidated Balance Sheet As at 23 Jun 18 24 Jun 17 £m £m • Inventory reduced by £37.7m compared to last year. Underlying stock units are 21% lower than last year as a result of the improved sales Derivatives - 37.0 performance across a number of areas and the tighter stock Other n
Slide 15: Summary Consolidated Cash Flow Statement
15 Summary Consolidated Cash Flow Statement Q1 FY19 Q1 FY18 (13 weeks) (13 weeks) • Operating profit increased by £4.1m as a result of the £m £m reduction in administrative expenses Operating profit 9.2 5.1 • Working capital continues to improve; Non cash items 11.2 16.3 • Cash inflows from trade an
Slide 16: Capital Expenditure
16 Capital Expenditure • We continue to focus on capital expenditure for FY19. Capital additions are in line with the budget, with cash paid including accruals from FY18 Q1 FY19 Q1 FY18 (13 weeks) (13 weeks) £m £m • Capital expenditure is focussed primarily on the UK and E-commerce for FY19 Total UK
Slide 17: Liquidity and Operating Facilities
17 Liquidity and Operating Facilities Q1 FY19 Q1 FY18 • Total Liquidity and Operating facilities £200.0m (13 weeks) (13 weeks) • £100.0m RCF (fully drawn) £m £m Cash, cash equivalents and bank overdrafts1 70.1 63.6 • £100.0m Operating Trade and Import Facilities and Overdraft (£24.9m undrawn) Availa
Slide 18: Summary & Outlook
18 SUMMARY & OUTLOOK ALISTAIR McGEORGE Executive Chairman
Slide 19: Summary & Outlook
19 Summary & Outlook • Management is delivering promised changes - our financial and operational stability continues to improve • Encouraging ‘green shoots’ in Womenswear clothing performance in Q1 with more planned in Q2, together with Footwear & Accessories improvements • Clean stock position at t
Slide 20: Q&A
Q&A ALISTAIR McGEORGE Executive Chairman RICHARD COLLYER CFO
Slide 21: Appendix – Cost of Sales & Administration Expenses Breakdown
21 Appendix 1 – Cost of Sales & Administration Expenses Breakdown Q1 FY19 Q1 FY18 (13 weeks) (13 weeks) • Staff costs increased £0.3m. This comprised a £0.4m £m £m increase in exceptional staff costs, £3.2m decrease in the Cost of inventories 139.9 133.8 share based payments charge and a £3.1m incre
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