Premier Investments Limited · ASX:PMV
Premier Investments — H1 2014 Earnings Presentation
33 slides from Premier Investments's earnings presentation, Mar 25, 2014
Slide 1: Premier Investments Limited 1H14 results overview
Premier Investments Limited 1H14 results overview 25 March 2014
Slide 2: Agenda
Agenda 1 Premier Investments 1H14 overview 2 Premier Investments 1H14 consolidated financial results 3 Premier Retail performance 4 Gross margin 5 CODB reductions continuing 6 Premier Retail internet strategy delivering 7 Premier Retail investing in growth 8 Smiggle International expands 9 Peter Ale
Slide 3: Premier Investments 1H14 Overview
PREMIER INVESTMENTS 1H14 OVERVIEW 2
Slide 4: Premier Investments 1H14 overview
1 Premier Investments 1H14 overview • Group profit – Profit before tax of $70.1 million, up 8.7% on pcp – Net profit after tax of $52.1 million, up 12.1% on pcp – Earnings per share of 33.6c, up 12.1% on pcp – Increased interim fully franked dividend of 20 cps (1H13: 19 cps) • Premier Retail contrib
Slide 5: Premier Investments 1H14 overview
1 Premier Investments 1H14 overview • Premier balance sheet strengthened – Cash on hand of $317.7 million – Premier Retail debt of $76.7 million – New distribution centre acquisition funded by new Premier Investments debt of $19.0 million2 – Inventories clean and in a strong position – Balance sheet
Slide 6: Premier Investments 1H14 consolidated income statement
2 Premier Investments 1H14 consolidated income statement 26 weeks to 26 weeks to $m’s 25 Jan 2014 26 Jan 2013 Premier revenues (ex Premier Retail) 13.6 14.3 Premier expenses (ex Premier Retail) (2.2) (2.3) Premier Retail EBIT 61.5 56.3 Finance costs (2.8) (3.8) Net profit before income tax 70.1 64.5
Slide 7: Premier Investments summarised consolidated balance sheet
2 Premier Investments summarised consolidated balance sheet $m’s 25 Jan 2014 27 Jul 2013 Assets Cash and cash equivalents 317.7 313.2 Inventories 90.0 84.0 Property, plant and equipment 99.1 83.4 Other assets 50.7 41.4 Investment in associates 190.1 185.5 Intangible assets 854.6 854.5 Total assets 1
Slide 8: Premier Retail
PREMIER RETAIL
Slide 9: Premier Retail performance: highlights
3 Premier Retail performance: highlights • PBT up 11.7% to $58.7 million • EBIT up 9.2% to $61.5 million • EBIT margin up 47bps to 13.1%1 • Group sales up 5.3% to $468.4 million1 • LFL sales up 4.4%1 • Internet sales growing strongly, up 24% • Strong sales performance from Peter Alexander (up 23.3%)
Slide 10: Premier Retail performance: financial results
3 Premier Retail performance: financial results 26 weeks 26 Weeks to 25 Jan 2014 to 26 Jan 2013 Var LY $000’s Sales1 468,355 444,727 +5.3% LFL sales +4.4% -0.9% Gross Profit1 290,651 279,173 +4.1% Gross margin (%)1 62.1% 62.8% -72bps Employee Expenses2 (110,470) (103,547) +6.7% % sales 23.6% 23.3% +
Slide 11: Gross margin
4 Gross margin • Gross margin continues to be strong, despite highly Gross margin—4 year history competitive market • New direct sourcing initiatives improving intake margins and quality • Renewed focus on markdown management in highly competitive market • Group protected against fall in AUD for bal
Slide 12: CODB reductions continuing
5 CODB reductions continuing • Costs of doing business reduced by 89bps as CODB % sales a % of sales as a result of the organisational wide cost efficiency program implemented as part of the strategic review • Store rent expense grew by 2.4% in total with established brands store rent expense decrea
Slide 13: Premier Retail internet strategy delivering
6 Premier Retail internet strategy delivering Internet • Online sales up 24% for 1H14 Online sales growth – Exceptional results from Just Jeans and Portmans up 41% and Dotti up 34% 25% 24% 23% • Well ahead of market growth with annual sales growth of 23% vs 11% annual market growth 20% • Very profit
Slide 14: Premier Retail investing in growth
7 Premier Retail investing in growth 206 stores received capital investment and 15 new stores were opened in 1H14 • 6 new stores opened across Australia and Singapore • 2 stores received refurbishments in Australia • 7 stores received LED lighting upgrades • 5 new stores opened across Australia • 1
Slide 15: Smiggle International expands: United Kingdom
8 Smiggle International expands: United Kingdom • First store opened at Westfield Stratford on 20 February 2014 – Initial response very encouraging – Customer feedback very positive • Potential for up to 20 stores operating by Christmas 2014 • Premier believes the UK market has the capacity for more
Slide 16: Smiggle International expands: United Kingdom
8 Smiggle International expands: United Kingdom • Up to 10 stores to be operating by July 2014 – Westfield Stratford (open) – Reading (open) – Brighton (open) – Kingston (open) – Leicester – Crawley – Bath – Guildford • Up to a further 20 stores currently under negotiation 15
Slide 17: Smiggle International expands: Singapore and Malaysia
8 Smiggle International expands: Singapore and Malaysia Smiggle Singapore • 17 stores now trading and very profitable • Opportunity for up to five more stores over next two years • Very strong Christmas trading period • Very profitable market and continuing to improve from strong sales growth and im
Slide 18: Peter Alexander growth continues
9 Peter Alexander growth continues Three year strategic growth plan on track • Accelerated store roll out program – five stores opened during the season and four stores confirmed to open in second half – Flagship store to open at Emporium in April/May 2014 – Expanded stores in Canberra, Indooroopill
Slide 19: Supply Chain transformation underway
10 Supply Chain transformation underway New Australian National DC • Construction completed • Settlement occurred in January 2014 • Internal fit out in progress • Transition to occur by end FY14 • Project on budget and on schedule • One off transition costs of between $3 million and $4 million to be
Slide 20: Supply Chain transformation underway
10 Supply Chain transformation underway Singapore & New Zealand • New Zealand DC downsized and reconfiguration completed in FY13 with full benefits being realised in FY14 • Singapore third party logistics established in FY13 providing material margin benefit to Smiggle Singapore in FY14 UK • Third p
Slide 21: Summary
11 Summary Smiggle International growth opportunity • Unique and very attractive opportunity to build a large and profitable international business • High return on investment with no goodwill to acquire • Potential for more than 200 stores and $200 million in sales in the UK over the next five year
Slide 22: Dividends
DIVIDENDS 21
Slide 23: Interim dividend
12 Interim dividend • The Premier Board has declared an increased interim fully franked dividend of 20 cps (1H13: 19 cps) • The Board’s decision to pay a dividend is always shaped by: – Assessment of the result – Outlook for the market – Confidence in the operational performance of Premier’s people,
Slide 24: Premier Retail brand by brand performance
PREMIER RETAIL BRAND BY BRAND PERFORMANCE
Slide 25: Overview of Results (Smiggle)
13 Overview of Results Sales $62.6m Var LY +15.7% Store movements July 13 Open Close Jan 14 Australia 112 5 0 117 New Zealand 23 0 0 23 Singapore 16 1 0 17 151 6 0 157 Highlights • 1H14 most successful season in history for Smiggle • All markets achieved strong growth • LFL sales growth strongest in
Slide 26: Overview of Results (Peter Alexander)
13 Overview of Results Sales $63.4m Var LY +23.3% Store movements July 13 Open Close Jan 14 Australia 51 5 0 56 New Zealand 8 0 0 8 59 5 0 64 Highlights • Strong LFL sales growth • Five stores opened during the half • Four new stores confirmed for second half, including flagship store to open at Emp
Slide 27: Overview of Results
13 Overview of Results Sales $57.1m Var LY +4.3% Store movements Jul 13 Open Close Jan 14 Australia 90 2 4 88 New Zealand 12 0 0 12 102 2 4 100 Highlights • Total sales up 4.3% • LFL sales stronger • Two new stores opened and four stores closed • Online sales increased 41% for the season, well ahead
Slide 28: Overview of Results
13 Overview of Results Sales $57.1m Var LY +4.3% Store movements Jul 13 Open Close Jan 14 Australia 88 1 2 87 New Zealand 21 0 0 21 109 1 2 108 Highlights • Total sales up 4.3% • LFL sales stronger • One store opened and two stores closed • Flagship Brisbane CBD (Queens Street Mall) store opened and
Slide 29: Overview of Results
13 Overview of Results Sales $36.4m Var LY +2.2% Store movements Jul 13 Open Close Jan 14 Australia 80 1 2 79 New Zealand 21 0 0 21 101 1 2 100 Highlights • Turnaround strategy for Jacqui E is delivering significant improvements in LFL sales, margin and profitability • Total sales up 2.2% • LFL sale
Slide 30: Overview of Results
13 Overview of Results Sales $104.1m Var LY +3.1% Store movements Jul 13 Open Close Jan 14 Australia* 199 0 3 196 New Zealand 45 0 0 45 244 0 3 241 * Includes one group store Highlights • Brand well positioned under the new leadership of Matt McCormack • Total sales up 3.1%, underpinned by strong sa
Slide 31: Overview of Results
13 Overview of Results Sales $87.8m Var LY -5.8% Store movements Jul 13 Open Close Jan 14 Australia 184 0 2 182 New Zealand 36 0 0 36 220 0 2 218 Highlights • Turnaround strategy progressing – New product strategy implemented and working – Updated approach to promotions gaining traction in Q2 • Enco
Slide 32: Appendix
A Appendix • Premier commenced equity accounting for its investment in Breville Group Limited during 2H13 due to a change in Breville’s Board composition • To assist investors, Premier has presented the following pro-forma numbers that assume that the investment in Breville Group Limited was equity
Slide 33: Appendix
A Appendix Overview of Premier’s non–IFRS financial information • IFRS financial information is financial information that is presented in accordance with all relevant accounting standards. • Non-IFRS financial information is financial information that is presented other than in accordance with all