LONDON (Alliance News) - Luxury shoes and accessories firm Jimmy Choo PLC on Thursday reported a fall in pretax profit due to higher financing costs, but operating profit and revenue both increased.
Jimmy Choo said it made a pretax profit of GBP6.6 million in the half to the end of June, down from GBP20.1 million a year earlier as it booking much higher finance costs and a loss on financial instruments it holds. This related to a refinancing of the company's debt pile in March and a revaluation of its financial instruments following sterling's fall after the Brexit vote.
Stripping out those effects, however, operating profit for the company increased 43% to GBP25.3 million from GBP17.7 million a year earlier, boosted by 9.2% growth in revenue to GBP173.1 million from GBP158.5 million and improvements in gross margins for the company.
Retail revenue grew 7.6% in the half, while wholesale revenue increased 11%. The company said it saw impressive growth in China, currently a tough market for luxury goods players, and managed its repositioning within a difficult US market.
"These results represent an excellent performance in the period, with growth and margin expansion leading to improved earnings, further enhancing the brand's track record of delivery in all market conditions. This is combined with strong underlying cash flow conversion leading to further positive steps on deleveraging," said Chief Executive Pierre Denis.
We have made a good start to the second half and we remain optimistic about our prospects both for this year and for our performance in the future," he added.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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