July 12, 2017
- Sales revenues up 4.0 percent in Q2 2016/17
- Accelerated growth trend of 3.0 percent in continued activities (Q1: 1.5 percent) in a strongly declining market environment
- Discontinuation of Gin Tonic and business with the last remaining large private label customer leads to moderate 0.8 percent drop in revenues in H1
- Consolidated net income grows 13 percent due to higher gross profit margin and reduced expenses
- Equity ratio of 57 percent reflects solid financial position
- No change in full-year forecast: stable revenues and slightly higher earnings expected
Sales revenues up 4.0 percent in Q2 thanks to accelerated growth in core business and catch-up on postponed deliveries
Just like the first quarter, the second quarter of 2016/17 also saw sales revenues of Baldessarini, Pierre Cardin and Pioneer grow against the negative market trend. Ahlers' existing brands grew by a strong EUR 4.4 million or 8.9 percent. On the one hand, the first quarter's postponed deliveries (EUR 2.9 million) were caught up on as expected; on the other hand, the accelerated revenue growth of 3.0 percent (EUR 1.5 million) mainly by Pierre Cardin and Pioneer Authentic Jeans contributed to this trend (Q1 revenues growth: 1.5 percent). Group's revenues including the discontinued activities increased by 4.0 percent from EUR 52.1 million to EUR 54.2 million in the second quarter.
Growth trend of 2.2 percent in continued operations in H1
Adjusted for the discontinued business activities, Group revenues increased by EUR 2.5 million or 2.2 percent from EUR 114.5 million to EUR 117.0 million in the first six months of 2016/17. The discontinuation of Gin Tonic and of the business with the last remaining large private label customer led to a shortfall in revenues of EUR 3.5 million. The growth achieved by the continued brands did not entirely offset this reduction, which means that Group revenues in the first six months of the current fiscal year declined by a moderate 0.8 percent from EUR 118.3 million to EUR 117.3 million. In Germany, Ahlers' continued operations recorded a strong 2.6 percent increase in sales revenues, while the fashion market as a whole contracted by 3.3 percent. Dr. Stella A. Ahlers, CEO of Ahlers AG, is pleased with this development: "Our existing brands are well positioned, so we were once more able to gain additional market shares." Sales revenues in Eastern Europe also showed a positive trend and rose by 2.7 percent, supported by growth in Russia, Ukraine, the Baltic states and Poland.
Growth in own Retail stores and E-Commerce
Sales revenues of the company's own Retail stores increased by 1.2 percent in the first six months of 2016/17. They represented 12.7 percent of total revenues (previous year: 12.4 percent). In like-for-like terms, revenues were down by a moderate 0.6 percent on the same period of the previous year. E-commerce revenues rose by 5.1 percent in the first six months of the current fiscal year, with a strong increase recorded towards the end of the reporting period following the change of the service provider.
Increased gross profit margin and reduced expenses result in higher consolidated net income
Due to the discontinuation of low-margin activities as well as reduced write-downs and discounts, the gross profit margin climbed 0.6 percentage points from 48.9 percent to 49.5 percent. This more than offset the revenue effect, and gross profit increased by EUR 0.2 million from EUR 57.8 million to EUR 58.0 million. Lower special expenses and a normalised tax ratio led to a consolidated net income increased by 12.5 percent to EUR 0.9 million (H1 2015/16: EUR 0,8 million).
Accustomed solid financial position with an equity ratio of 57 percent
At 57.0 percent, the equity ratio again stood at the usual high level at the half-year reporting date 2016/17 (previous year: 57.6 percent). The Group's equity capital rose by EUR 0.3 million to EUR 102.1 million due to the higher net income and the foreign currency valuation of the equity capital of foreign subsidiaries. At EUR 179.1 million on the half-year reporting date, the total assets were also up by EUR 2.3 million on the prior year reporting date (May 31, 2016: EUR 176.8 million) due to higher inventories.
Unchanged forecast in fiscal 2016/17: Mostly stable revenues and moderately higher earnings expected for 2016/17
The Management Board expects revenues of its continued activities to grow also in the second half of 2017. "Especially the Baldessarini, Pierre Cardin and Pioneer Authentic Jeans brands are likely to grow at a similar pace as in the first six months of the year", says Dr. Stella A. Ahlers. Together with declined revenues of the discontinued activities total revenues should thus be stable in the fiscal year 2016/17. The Management Board has also confirmed the earnings forecast for fiscal 2016/17, which was published at the beginning of the year. Consolidated net income for the year should increase by a low double-digit percentage on the previous year's EUR 2.5 million. This forecast is supported by the results of the first six months.
Summary of Ahlers Group figures:
Wiebke Meyer zu Bentrup
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