DGAP-News: Powerland AG / Key word(s): Half Year Results
Powerland AG: Powerland continues to show significant improvements in
its Luxury segment
29.08.2014 / 07:34
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Powerland continues to show significant improvements in its Luxury segment
- Group revenue in the second quarter 2014 increased by 29.3% to EUR 55.2
million, recording an all-time quarterly high;
- Luxury segment recorded best quarterly performance since inception:
Luxury revenues increased by 37.1% to EUR 35.4 million;
- Group EBIT and net profit with EUR 7.7 million and EUR 4.7 million more
than tripled;
- Store expansion program: Powerland opened its first store outside
mainland China in Hong Kong International Airport;
- Positive net cash flow from operating activities and free cash flow in
H1 2014;
- Share buyback program extended beyond 2014;
- Outlook for 2014 confirmed
Frankfurt/Main, 29 August 2014 - Based on preliminary and unaudited
figures, Group revenues of Powerland (ISIN DE000PLD5558 / Prime Standard),
the leading Chinese manufacturer of handbags, leather goods and
accessories, increased in the first half 2014 to EUR 94.5 million (H1 2013:
EUR 90.4 million). This was mainly due to a very strong contribution of the
Luxury segment particularly in the second quarter 2014 when the segment
showed its best quarterly performance since inception with revenues up by
37.1% yoy to EUR 35.4 million. On a half year basis, revenue in the Luxury
segment increased from EUR 56.2 million in H1 2013 by 16.9%, to EUR 65.7
million in H1 2014. The increases were mainly driven by an expansion of
Powerland's retail network as well as improvements regarding the
single-store performance. Revenues in the Casual segment increased by
17.4%, to EUR 19.8 million in Q2 2014. On a half year basis, revenue in the
Casual segment decreased from EUR 34.1 million in H1 2013 by 15.7% to EUR
28.8 million in H1 2014. These decreases in H1 2014 were mainly due to the
restructuring practice in the fabric production facilities. The
restructuring is expected to be completed in the third quarter of 2014 and
will lead to a heavier focus on the synthetic leather or genuine leather
within the facilities. According to the communicated strategy, sales
contributions from the Luxury segment continued to increase from 62% in H1
2013 to 70% in H1 2014.
Group earnings before interest and taxes (EBIT) increased significantly
from EUR 1.7 in Q2 2013 to EUR 7.7 million in Q2 2014. This strong increase
was due to the extraordinary EBIT increase of the Luxury segment where EBIT
increased from EUR 0.5 million in Q2 2013 to EUR 6.6 million in Q2 2014,
achieving an EBIT margin of 18.7% (after 2.0% in Q2 2013). This upswing was
achieved mainly due to the larger revenue basis. In addition, selling &
distribution expenses were reduced. This development underlines Powerland's
success in its strategic focus on the Luxury segment for future profitable
growth.
On a half year basis, Group EBIT decreased from EUR 12.1 million in H1 2013
by 5.8%, to EUR 11.4 million in H1 2014. The decrease in H1 2014 mainly
resulted from the decline in sales and gross profit from Casual segment
whose fabric facilities were under restructuring.
Consequently, net profit increased from EUR 1.0 million in Q2 2013 to EUR
4.7 million in Q2 2014. Net profit for the first half year of Powerland
Group decreased from EUR 8.6 million in H1 2013 to EUR 8.1 million in H1
2014.
<pre>
in EUR million Q2 2014 Q2 2013 Change H1 2014 H1 2013 Change
(unaudited)
Revenue 55.2 42.7 29.3% 94.5 90.4 4.6%
Luxury 35.4 25.9 37.1% 65.7 56.2 16.9%
Casual 19.8 16.8 17.4% 28.8 34.1 -15.7%
Luxury % 64.2 60.1 69.5 62.2
Casual % 35.8 39.9 30.5 37.3
Gross profit 18.6 14.2 30.5% 33.0 34.6 -4.5%
Luxury 15.5 11.1 40.4% 28.2 26.8 5.0%
Casual 3.1 3.2 -3.9% 4.8 7.8 -37.7%
EBIT 7.7 1.7 349.4% 11.4 12.1 -5.8%
Luxury 6.6 0.5 1,148% 10.2 8.3 23.7%
Casual 1.1 1.2 -10.4% 1.2 3.9 -68.8%
EBIT margin 13.9% 4.0% 12.1% 13.4%
Luxury 18.7% 2.0% 15.5% 14.7%
Casual 5.3% 7.0% 4.2% 11.3%
Net profit 4.7 1.0 377.4% 8.1 8.6 -5.3%
</pre>
Net cash flow from operating activities has increased from EUR -38.5
million in the first half 2013 to EUR 2.1 million in the first half 2014.
This increase was mainly due to a more effective management over working
capital in H1 2014. Net debt was slightly reduced from EUR 44.3 million to
EUR 44.0 million. Cash and cash equivalents increased from EUR 15.4 million
as at 31 December 2013 to EUR 16.5 million at the end of the reporting
period.
Consequent optimization of store network
To remain competitive in the challenging retail market, Powerland is making
constant efforts to optimize its distribution network. In the second
quarter of 2014, Powerland closed down nine underperforming stores while
six more stores were newly opened. Powerland maintains close monitoring
procedures over the nationwide store performance and will coordinate a
further store consolidation if any store fails to meet the requirements.
Moreover, the product offering at the terminal stores has been enriched to
stimulate the single-store performance. Meanwhile, Powerland continues to
expand in a cautious manner in the face of a fast-changing environment. In
July 2014, Powerland opened its first store outside mainland China in Hong
Kong International Airport. The Hong Kong store is part of the plan to
boost Powerland's international reputation and prepare Powerland further
for a more extensive business expansion.
As at 30 June 2014, the Company's Luxury segment products were sold in a
total of 221 stores, while 177 stores (153 as at 30 June 2013) run by
external distributors and 44 stores (36 as at 30 June 2013) run by the
Company, mainly in tier 1 and tier 2 cities in China.
Outlook for 2014 confirmed
The Management Board confirms its already communicated cautiously
optimistic outlook for 2014. Powerland expects to outperform what has been
achieved in 2013.
In the second half of 2014, Powerland will focus more on the management of
its existing distribution network. With ongoing efforts in adjusting
underperforming stores, Powerland will expand in a more prudent manner in
the rest of the year. Meanwhile, Powerland intends to further improve its
single-store performance by diversifying its product offering and moderate
point-of-sales promotion. Financial wise, Powerland will continue its
efforts in active working capital management as well as strict budget
control.
The full report of the first quarter 2014 is published on the Company's
website (www.powerland.ag).
For more information, please contact:
Powerland AG
c/o GFD - Gesellschaft für Finanzkommunikation mbH
Fellnerstrasse 7-9
60322 Frankfurt am Main
Germany
Phone: +49 (0) 69 66 554 - 459
Fax: +49 (0) 69 66 554 - 276
E-mail: ir@powerland.ag
Home: http://www.powerland.ag
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Language: English
Company: Powerland AG
Lyoner StraÃe 14
60528 Frankfurt am Main
Germany
Phone: +49 69 - 66554-459
Fax: +49 69 - 66554-276
E-mail: ir@powerland.ag
Internet: www.powerland.ag
ISIN: DE000PLD5558
WKN: PLD555
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, Hamburg, München,
Stuttgart
End of News DGAP News-Service
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284573 29.08.2014
DGAP-News: Powerland AG: Powerland continues to show significant improvements in its Luxury segment
| Source: EQS Group AG