6 Aug 2019 07:00
For immediate release | 6 August 2019 |
WALKER GREENBANK PLC
("Walker Greenbank" or the "Company")
Half Year Trading Update
Walker Greenbank PLC (AIM: WGB), the luxury interior furnishings group, is pleased to announce its pre-close trading update for the six months ended 31 July 2019. Whist trading conditions continue to be challenging, performance in the half year was in line with the Board's expectations.
Total brand sales in the half year were up 0.4 per cent in reportable currency (down 0.7 per cent in constant currency) compared with the first half last year.
Brand sales in the UK, the Company's largest market, accounting for approximately 52 per cent of total brand sales, were down 3.1 per cent whilst international brand sales were up 4.4 per cent in reportable currency (up 2.0 per cent in constant currency). The international performance reflects a temporary change in the US operating model relating to the distribution of the Clarke & Clarke and Studio G brands in that revenue was recorded on an agency basis rather than on a distribution basis. As announced on 1 July 2019, Kravet Inc. has been appointed to represent the Clarke & Clarke and Studio G brands in the US under a distribution agreement that came into effect on 1 August 2019.
On a like-for-like basis*, international brand sales were down slightly by 1.5 per cent in reportable currency (down 2.9 per cent in constant currency) whilst like-for-like brand sales in the US, the Company's second largest market, were down approximately 2.9 per cent in reportable currency (down 5.6 per cent in constant currency).
Licensing income performed strongly during the half year and is expected to be up 25.3 per cent in reportable currency (up 23.5 per cent in constant currency) including revenue recognition under IFRS 15. Excluding accelerated income under IFRS 15 and income from apparel contracts, core licensing income was up approximately 12.2 per cent in reportable currency (up 12.4 per cent in constant currency) compared with the corresponding period last year.
In manufacturing, total third-party sales were down 4.6 per cent in the first half despite strong growth of approximately 17.2 per cent in export sales.
The Company progressed a number of efficiency and cost-saving initiatives during the first half, including the warehouse and back office integration of the Clarke & Clarke business into the Style Library portfolio of brands (Sanderson, Morris & Co., Harlequin, Zoffany, Scion, and Anthology). This integration work is substantially complete and the Board expects that this will result in a saving of approximately £2 million on an annualised basis of which approximately £1 million will be delivered in the current financial year.
The Company continues to focus on working capital management with the net funds position at the end of the last financial year maintained at the half year.
The Board's expectations for the full year remain unchanged although visibility is limited by Brexit and continuing wider macro-economic uncertainties.
Walker Greenbank intends to announce its half year results in mid-October 2019, at which time an update will be provided on the Board's review of the Company's strategy.
* Reported Brand sales in the US were up 13.7 per cent in reportable currency (up 7.4 per cent in constant currency), reflecting a temporary change to the Company's US operating model for Clarke and Clarke sales whereby revenue in the half year was recorded on an agency basis whereas sales in the prior half year were recorded on a distribution basis.
For further information:
Walker Greenbank PLC | +44 (0) 1895 221068 |
Lisa Montague, Chief Executive Officer Mike Gant, Chief Financial Officer Caroline Geary, Company Secretary | |
Investec Bank plc (Nominated Adviser and Broker) | +44 (0) 20 7597 5970 |
David Anderson / Alex Wright - Corporate Finance | |
Henry Reast / Richard Short - Corporate Broking | |
Buchanan | +44 (0) 20 7466 5000 |
Mark Court / Sophie Wills |
Notes for editors:
About Walker Greenbank
Walker Greenbank PLC is a luxury interior furnishings company that designs, manufactures and markets wallpapers, fabrics and paints. In addition, the Company derives significant licensing income from the use of its designs on a wide range of interior products such as bed linen, rugs and tableware.
Walker Greenbank's brands include Sanderson, Morris & Co, Harlequin, Zoffany, Scion, Anthology, Clarke & Clarke and Studio G.
The Company has a strong UK manufacturing base, comprising a wallpaper factory in Loughborough and a fabric printing factory in Lancaster. Both factories manufacture for the Company and for other wallpaper and fabric brands.
Walker Greenbank employs more than 600 people and its products are sold in more than 85 countries worldwide. It has showrooms in London, New York, Chicago, Paris, Amsterdam, Moscow and Dubai along with a partnership showroom in Shenzhen, China.
Walker Greenbank trades on the AIM market of the London Stock Exchange under the ticker symbol WGB.
For further information please visit: www.walkergreenbank.com