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Published at 9:11 am

Tendam posts profit growth to €39 million for the first half of its 2018/2019 financial year

The company has posted pre-tax profit of €38.9 million, versus losses of €272,200 for the same period last year.

Total sales reached €554.4 million.

Online sales grew by 27% to represent 7% of total sales in the Iberian region.

The gross margin now stands at 62% and has remained steady above the 60% threshold.

Tendam continues to make headway on its efficient stock control policy, reducing inventory by almost €6 million.

Last-twelve-month adjusted EBITDA reached €164 million.

During the six-month period, cash flow generation increased by €57.7 million, pushing down the debt ratio to 2.9x EBITDA.

Tendam opened a net figure of 28 new points of sale and now has a total of 2,016 as of 31 August 2018 (+84 versus August 2017).

Tendam, one of Europe’s leading fashion retailers operating in the specialised chain segment through the Cortefiel, Pedro del Hierro, Springfield, Women’secret and Fifty brands, has today announced its results for the first half of its 2018/19 financial year, which runs from 1 March to 31 August 2018.

Between March and August 2018, Tendam obtained pre-tax profit of €38.9 million, reflecting a significant improvement in the company’s balance sheet versus H1 2017/18, when the company posted losses of €272,200.

Tendam CEO Jaume Miquel said: “The company has performed well in a six-month period marked by adverse factors. The rise in profits, improved margins, efficient cost management and stock reduction, coupled with strong cash flow generation, show the solidness of the group’s strategic plan”.

Total sales reached €554.4 million, reflecting a slight fall of 1.6% on the same period last year. The most relevant factors affecting performance were the streamlining of the physical store portfolio in spring/summer 2017, meteorological aspects and adverse FX effects. However, these factors were offset by efficient operational management in terms of costs and margins.

Online sales posted strong growth of 27%, which was reflected across all the brands. As of 31 August, online sales represented 7% of Tendam’s total sales in the Iberian region. Going forward, Tendam plans to push its omni-channel strategy globally, as well as strengthen its e-commerce business in all the countries where it is present through owned stores, starting with Russia.

Adjusted EBITDA LTM[1] amounts to €164 million, up on the same period last year. EBITDA for H1 2018/19 was €79.4 million, versus €85.4 million in the same period last year.

At 31 August 2018, club and loyalty scheme sales, with over 23 million cardholders across all of the group’s brands – up 8.4% on August last year –, represented 75% of total sales, a rise of 4%.

Jaume Miquel, commented: “In the first six months of this financial year we have considerably ramped up the pace to ensure Tendam’s future, underpinned by online sales growth of 27%, positive net expansion of our global point of sale network, investment in communication to empower our brands and the roll-out of innovative programmes for our loyalty schemes and customer relations”.

Between March and August 2018, the gross margin hit 62% and has remained steady above the 60% threshold.

The ongoing cost control and business efficiency efforts throughout H1 2018/19 are reflected by operating cost savings of close to 1% and structural cost savings of 2%. Active stock management has led to a positive reduction of inventory amounting to almost €6 million, down 3.5% versus August last year. The company continues to make headway on its efficient stock control policy.

The company’s financial situation also continues to improve. At the end of H1 2018/19, free cash flow after interest improved by €57.7 million versus the same period last year. Tendam’s net debt has fallen to €479.6 million, compared to the €514 million registered at the beginning of the financial year, which brings the company’s debt ratio to 2.9x EBITDA.

In parallel to the strong online sales push, the company is forging ahead with its international physical store expansion plan across all brands. The latest markets in which Tendam has opened stores include India, Mauritius, Réunion and Sicily, in Italy. In H1 2018/19, Tendam opened a net figure of 28 new points of sale. At 31 August 2018, Tendam had a store network comprising 2,016 points of sale (versus the 1,932 at the end of H1 2017/18), of which 1,207 are owned stores, 691 franchise operations and 118 department store corners. The company is present in 91 countries.

[1] LTM: Last Twelve Months

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