Body Shop International PLC
05 May 2006
THE BODY SHOP INTERNATIONAL PLC
Preliminary Results for the 52 weeks to 25 February 2006
Continued growth in retail sales; profit in line with expectations
• Continued growth in global retail sales: total +7%, comparable +4%
• Operating profit up 6%, in line with forecast
• Further roll-out of new store format
• Continuing growth in The Body Shop At Home and e-commerce channels
• Net debt reduced to £12.7m
• New market openings in Russia and Jordan
• EPS marginally lower at 13.6 pence, after higher effective tax rate
• Total dividend of 6.6 pence, up 16%
'Our overall retail sales performance demonstrates the global strength of The
Body Shop brand. We achieved a 6% increase in operating profit, in line with the
forecast we made in January. The roll out of our new store format has progressed
during the year and we have continued to grow The Body Shop At Home and
e-commerce channels in line with our multi-channel strategy. We have also
expanded into new markets, with store openings taking place in both Russia and
Jordan during the year.
The Body Shop is celebrating 30 years of trading this year, having grown over
that period into a substantial global branded retailer operating in 54
countries. Over the last four years, operating profit and earnings per share
have improved substantially and we continue to manage the business for
sustainable long-term performance.'
Adrian Bellamy Peter Saunders
Executive Chairman Chief Executive Officer
For media enquiries, please contact:
The Body Shop International PLC
Shelley Simmons, Tel: 01903 844040
Brunswick Group
William Cullum, Tel: 020 7404 5959
For investor enquiries, please contact:
Angela Bawtree, Tel: 01903 846333
Financial Highlights
52 weeks to 25 February 2006
Change on 2005
Operating profit £41.5m +6%
Profit before tax £37.6m +5%
Earnings per share 13.6p -1%
Total dividend 6.6p +16%
Net debt £12.7m -£7.1m
Letter from the Executive Chairman and Chief Executive Officer
Overview
Our overall retail sales performance demonstrates the global strength of The
Body Shop brand. We continued to achieve a robust sales performance in Asia
Pacific and Europe, Middle East and Africa. As we reported in our Christmas
Trading Update, the US and UK regions did not achieve the targeted rate of
growth during the important Christmas period and this impacted the group's
profit outcome for the year. We achieved a 6% increase in operating profit, in
line with the forecast we made in January.
The roll out of our new store format has progressed during the year and we have
continued to grow The Body Shop At Home and e-commerce channels in line with our
multi-channel strategy. Our investment programme in SAP is now largely complete.
We have also expanded into new markets, with store openings taking place in both
Russia and Jordan during the year.
Since the year end, a recommended cash offer has been made by L'Oreal to acquire
the entire issued share capital of The Body Shop for 300 pence per share. We
believe that L'Oreal's significant strengths in the management and development
of global brands, combined with our skills as a global retailer with strong
values and commitments, will be a powerful combination in the cosmetics and
personal care market place.
The Body Shop is celebrating 30 years of trading this year, having grown over
that period into a substantial global branded retailer operating in 54
countries. Over the last four years, operating profit and earnings per share
have improved substantially and we continue to manage the business for
sustainable long-term performance.
Results Summary
We achieved positive growth in both total retail sales and comparable store
sales in three of our four regions and in most of our markets. Overall, total
retail sales were up 7% to £772.0 million and comparable store sales grew by 4%.
Worldwide, a net 88 new stores were opened in the year, bringing the total to
2,133. Sales through The Body Shop At Home were up 14%, whilst our e-commerce
channel in the USA more than doubled sales.
In the Americas region, total retail sales growth of 4% was enhanced by positive
growth in The Body Shop At Home and e-commerce. Comparable store sales of -1%
reflect a decline of 2% in the USA, together with an improvement to +1% in
Canada from -3% in the previous year. As we reported in January, retail sales in
the Americas region underperformed expectations during the Christmas period.
This was driven in part by lower traffic levels in the shopping malls,
compounded by execution issues in our inventory supply chain that led to some
out-of-stock positions. A special task force was put in place last autumn to
resolve these execution issues. Good progress has now been made and we expect
the situation to be fully resolved over the next three months.
Asia Pacific continued to achieve strong sales growth during the year, with
total retail sales up 11% and comparable store sales up 6%. The benefits of
strong brand positioning and in-store execution were helped by generally
improving economies in the region. Countries achieving particularly strong
comparable store sales growth included Malaysia (+17%), Indonesia (+17%), Taiwan
(+11%), Singapore (+9%), Japan (+7%) and Hong Kong (+6%). Korea showed an
improvement to +2% from -8% in the previous year. In Australia, comparable store
sales were flat but strong growth continued to be achieved in The Body Shop At
Home.
Europe, Middle East & Africa performed well with both total retail sales and
comparable store sales growing by 7%. Highlights included continuing strong
comparable store sales growth in the Middle East (+11%) and the Nordic region
(+12%). In Western and Southern Europe, good positive growth was achieved in
France (+11%), Spain (+6%), Holland (+6%) and Germany (+3%), whilst the trend
continued to improve in Italy (-2%). Our store base in Eastern Europe, although
small, is performing well. Stores were opened in two new franchised markets in
the region during the year: Jordan and Russia. We now have six stores in major
Russian cities, with another 11 openings planned for the current year. This
market offers The Body Shop an exciting development opportunity as one of the
world's fastest growing cosmetics markets.
In the UK and Republic of Ireland, total retail sales grew by 3%, with
comparable store sales up 2%. The comparable store sales performance reflects
growth of 3% in the UK, with a decline of 1% in the Republic of Ireland. The
growth in the UK was achieved despite a challenging trading environment during
the Christmas period. The Body Shop At Home performed well, with growth of 15%
year on year.
Gross margins improved on the same period last year, although operating margins
were somewhat lower, principally due to non-recurring costs of over £4 million.
These non-recurring items comprised reorganisation and other costs that have
been incurred to improve performance and reduce future operating costs.
Operating profit rose 6% to £41.5 million, in line with the forecast we made in
January.
We achieved operating cash flow of £71.2 million, after a reduction of £8.5
million in working capital. This includes a 12% reduction in inventory year on
year, reflecting efficiencies gained from our investment in information systems.
We are continuing our ongoing capital investment programme in new stores, store
refurbishments and information systems, with £32.0 million having been invested
during the year. This represented the second year of our 3-year £100 million
investment programme announced two years ago. We ended the year with net debt of
£12.7 million.
After a higher effective tax rate, earnings per share were marginally lower than
in the previous year at 13.6 pence, in line with our forecast.
Following the recent recommended cash offer by L'Oreal to acquire the entire
issued share capital of The Body Shop, the Board has resolved to pay a second
interim dividend of 4.4 pence per share in lieu of a final dividend. Together
with the first interim dividend of 2.2 pence, this makes a total of 6.6 pence,
16% higher than in the previous year.
Brand Position and Image
Over the last year, we have made further progress with our strategy to
differentiate The Body Shop by developing a 'masstige' positioning for the
brand. We seek to provide customers with a shopping experience that combines
excellent service with a comprehensive range of naturally-inspired personal care
products offering high performance benefits and competitive pricing.
In order to deliver this 'masstige' experience for our customers, we have
continued to focus on product innovation, the roll out of our new store design
and the development of improved customer service programmes for our sales
associates and The Body Shop At Home consultants.
Our strategy in product development is to innovate across our various product
ranges and categories to encourage multiple purchases and higher transaction
values. New product activity during the year included a range of introductions
including:
- Spa Wisdom, a range of luxurious home-spa products containing six natural
ingredients sourced through our Community Trade programme;
- a Passion Fruit Bath and Body range;
- strong seasonal trend make-up collections;
- three additional new lines in our heritage Vitamin E skin care range;
- four additions to the core home fragrance range with Mango, Coconut,
Papaya and Almond, together with four new seasonal oils;
- an improved holiday gift programme for Christmas, incorporating a selection
of seasonal bath and body products from our limited edition Vanilla Spice,
Cranberry and Candied Citrus ranges;
- a Strawberry Bath and Body range;
- six additions to our Almond Bath and Body range;
- a new Cassis Rose fragrance range.
For the current year, we are excited about the strong pipeline of new products
coming through, including a major new-look make-up collection and a skin care
range using Aloe Vera sourced through our Community Trade programme.
Our Love Your Body loyalty programme continues to grow, with more than 2.1
million cards sold in 16 countries by the year end. The programme is proving
highly successful in raising average transaction values in store and we are now
starting to promote the use of the card through our e- commerce channel in the
USA. The programme will be extended to a further 13 markets in the current year.
Store Development
Our new store design, developed to provide customers with an improved shopping
experience, continues to be rolled out across our four regions. At the year end,
there were 154 stores reflecting the new design, of which approximately half
were new and half were refurbished stores.
A key element of the new store design is a new make-up merchandising fixture,
which is now installed in almost all stores around the world. This new fixture
will support the launch of our new make-up collection, which is being
accompanied by an intensive staff development programme.
We are continuing with our expansion of The Body Shop brand into new markets,
with stores having opened in Russia and Jordan last year. We have also
progressed with our plans to open in India, with the first store due to open
there this summer. Store openings in Pakistan and Poland are also planned for
the current year.
Developing a Multi-Channel Organisation
Central to our strategy is the development of a multi-channel organisation that
allows us to service our customers in dedicated stores, in our customers' homes
through The Body Shop At Home and via the internet.
The Body Shop At Home continues to show positive growth in the three markets in
which it currently operates: the USA, the UK and Australia. We believe this
direct sales channel offers significant growth opportunities for The Body Shop
in both existing and new markets. Plans are progressing for the launch of The
Body Shop At Home in Germany during the current financial year.
Our e-commerce site in the USA (www.thebodyshop.com) has outperformed
expectations since its launch in September 2004, more than doubling sales and
making a contribution to profit in its first full year of operation. We are on
target to launch an e-commerce site in the UK during the autumn, in time for the
key Christmas trading period.
Systems Development
Our investment programme in information systems is designed to gain maximum
efficiencies by leveraging one back office system across our three sales
channels.
The most significant element of this investment programme is the global
implementation of SAP. The implementation is now largely complete, having been
successfully rolled out on budget and on time to a number of our company-owned
markets. It is now in the process of being extended to the remaining
company-owned markets, including the USA where an earlier version of SAP has
been in place for the last six years and will be upgraded to the current version
in mid 2007. We have already started to realise productivity gains from our
investment programme in SAP and are confident of achieving the targeted return
on investment.
Franchising and Acquisitions
Franchising continues to play an important role in the growth and development of
The Body Shop, with sales through franchised stores representing 54% of total
retail sales. We value the contribution that our franchisees bring to our global
organisation through their significant market experience, energy and expertise.
Over the past two years, as a small number of our franchisees have wanted to
pursue other interests or to retire, we have had the opportunity to make
strategic acquisitions in some key markets. Following the purchase of the head
franchise businesses in Hong Kong and Canada in the 2005 financial year, we
acquired the companies operating The Body Shop in the Netherlands, Belgium and
Luxembourg in March 2005.
All three of these acquisitions have performed ahead of our expectations and
have enhanced earnings per share in the first year of ownership. We expect to
gain further benefits from these acquisitions as we continue to develop the
brand in these markets and achieve the additional synergies to be gained through
integration with our existing regional structure.
Our Values - Making a Difference
The Group donated £1.0 million to charitable organisations last year, of which
£0.7 million was donated to The Body Shop Foundation and the remaining £0.3
million to other organisations.
We have continued to actively promote our values and to improve our social and
environmental performance over the past year. This includes strengthening our
in-store customer communications, telling customers the stories behind our
values with a particular focus on our Community Trade programme.
Global campaigns continue to raise awareness and funds to support social issues
that are important to customers. The 'Stop Violence in the Home' campaign has
now been launched in 40 countries and has raised over £500,000 for domestic
violence charities in the past year. In the Americas, US customers donated over
100,000 old mobile phones to raise funds for the National Coalition Against
Domestic Violence (NCADV). In Canada, the campaign raised funds to support the
long-standing partnership with the Canadian Women's Foundation. In Asia Pacific,
The Body Shop in Singapore launched the campaign with six high profile public
buses carrying the 'Stop Violence in the Home' branding. Throughout Europe, a
special edition lip care stick became a best seller and customers donated
thousands of products and gifts which The Body Shop staff distributed to local
women's shelters. In the UK, customers donated over 60,000 mobile phones, which
have been transformed into personal safety alarms for vulnerable women or
recycled to raise funds for the pioneering 'FonesForSafety' initiative.
Our UK stores have also supported the Make Poverty History campaign through the
sale of over 200,000 white wristbands, raising in excess of £100,000 for the
campaign.
We have significantly strengthened our stakeholder engagement during the past
year in areas such as violence against children, chemicals in products, fair
trade, ethical trade, sustainable ingredients and Against Animal Testing. We
have also published an independently verified Values Report, which contains
clear targets for improvement in the areas identified as strategic priorities.
Recommended Cash Offer by L'Oreal
On 17 March 2006, the boards of The Body Shop and L'Oreal reached agreement on
the terms of a recommended cash offer by L'Oreal to acquire the entire issued
share capital of The Body Shop for 300 pence per share. The offer values The
Body Shop at approximately £652 million. Further information is set out in the
offer document, which was sent to shareholders on 12 April 2006.
On 4 May 2006 L'Oreal announced that, as at 1.00 pm on 3 May 2006, being the
first closing date of the offer, valid acceptances had been received in respect
of 79.4% of the existing issued ordinary share capital of The Body Shop.
Together with the 22.8 million shares in The Body Shop already held by L'Oreal,
L'Oreal had therefore acquired or received valid acceptances of the offer in
respect of 89.9% of the existing issued share capital at this time. L'Oreal
also announced that the offer would remain open for acceptance until 1.00 pm on
31 May 2006.
We believe that L'Oreal's significant strengths in the management and
development of global brands, combined with our skills as a global retailer with
strong values and commitments, will be a powerful combination in the cosmetics
and personal care market place. It is intended that The Body Shop will retain
its existing identity and values and operate independently within the L'Oreal
group, led by the current management team.
Current Trading and Outlook
In the first eight weeks of the current year, sales trends are slightly ahead of
those reported for the last full year, with total retail sales up 8% and
comparable store sales up 5%.
Over the last four years, our operating profit and earnings per share have
improved substantially and we continue to manage the business for sustainable
long-term performance. We look forward to continuing to work together with our
employees, franchisees and The Body Shop consultants to fulfil The Body Shop's
potential as a global retail brand.
Adrian Bellamy Peter Saunders
Executive Chairman Chief Executive Officer
5 May 2006
Operating Review
In this review, all comparisons between the 2006 and 2005 financial years relate
to the 52 week period to 25 February 2006 and the 52 week period to 26 February
2005.
Retail Sales
In the 52 weeks ended 25 February 2006, total retail sales across all channels
increased by 7% to £772.0 million (2005: £724.0 million), with comparable store
sales up 4%. Retail sales through The Body Shop At Home increased by 14% to
£53.4 million (2005: £46.9 million). Sales performance by region is shown below:
Sales Performance
52 weeks to 25 February 2006
Store Sales The Body Shop Total Retail Comparable
At Home Sales Store Sales
Americas +3% +9% +4% -1%
Asia Pacific +10% +24% +11% +6%
Europe, Middle
East & Africa +7% - +7% +7%
UK & Republic
of Ireland +2% +15% +3% +2%
Total +6% +14% +7% +4%
After 88 net store openings during the year, the number of stores worldwide
totalled 2,133 (2005: 2,045) at the year end, of which 815 (2005: 733) were
company-owned and the remainder franchised.
Operating Performance
Group turnover increased by 16% to £485.8 million (2005: £419.0 million), with
69% (2005: 69%) representing retail sales through company-owned stores, The Body
Shop At Home in company-owned markets and the internet. The balance of group
turnover principally represents wholesale sales to franchisees.
Gross profit increased by 17% to £318.5 million (2005: £272.7 million), with
gross margins increasing to 65.6% (2005: 65.1%). After deducting the direct
costs associated with operating company-owned stores, The Body Shop At Home in
company-owned markets and sales via the internet, the profit contribution rose
12% to £155.9 million (2005: £139.7 million).
Other operating expenses were £114.4 million (2005: £100.5 million). Operating
expenses for the year include in excess of £4.0 million in non-recurring costs,
primarily comprising: reorganisation and redundancies; costs relating to the
recently acquired franchise businesses in Canada and Benelux; and exceptional
inventory write-offs principally relating to the US supply chain issues.
Operating margins were 8.5% compared with 9.4% in the previous year, with
operating profit increasing to £41.5 million (2005: £39.2 million).
Profit before tax increased by 5% to £37.6 million (2005: £35.7 million).
Geographical Analysis
Americas
2006 2005
Stores at year end 444 429
Store openings (net) 15 13
Company-owned stores 373 351
£m £m Change
Store sales 152.4 147.9 +3%
The Body Shop At Home 23.4 21.5 +9%
--------- --------
Total retail sales 175.9 169.4 +4%
Turnover 161.0 142.3 +13%
Operating profit 17.4 21.9 -20%
Total retail sales growth of 4% was enhanced by positive growth in The Body Shop
At Home and e-commerce. Comparable store sales of -1% reflect a decline of 2% in
the USA, together with an improvement to +1% in Canada from -3% in the previous
year. The four stores in Mexico performed strongly.
Retail sales in the USA underperformed expectations during the Christmas trading
period. This was driven in part by lower traffic levels in the shopping malls,
compounded by execution issues in the inventory supply chain that lead to some
out-of-stock positions. In order to resolve these issues, a special task force
was put in place last autumn and good progress has now been made in rectifying
the situation.
The e-commerce site in the USA (www.thebodyshop.com) has outperformed
expectations since its launch in September 2004, more than doubling sales and
making a contribution to profit in its first full year of operation.
The movement in operating profit reflects the additional costs incurred as a
result of the supply chain execution issues experienced in the second half of
last year, including provision of resources from the global centre and
additional costs relating to air freight and expediting goods to stores.
Asia Pacific
2006 2005
Stores at year end 605 554
Store openings (net) 51 30
Company-owned stores 68 60
£m £m Change
Store sales 201.3 182.3 +10%
The Body Shop At Home 10.4 8.4 +24%
--------- --------
Total retail sales 211.7 190.7 +11%
Turnover 86.1 64.4 +34%
Operating profit 27.2 20.1 +35%
The Asia Pacific region continued to achieve strong sales growth, with total
retail sales up 11% and comparable store sales up 6%. The benefits of strong
brand positioning and in-store execution were helped by generally improving
economies in the region. Countries achieving particularly strong comparable
store sales growth included Malaysia (+17%), Indonesia (+17%), Taiwan (+11%),
Singapore (+9%), Japan (+7%) and Hong Kong (+6%). Korea showed an improvement to
+2% from -8% in the previous year. In Australia, comparable store sales were
flat but strong growth continued to be achieved in The Body Shop At Home (+24%).
The growth in regional turnover and operating profit reflects the continuing
positive trend in retail sales, together with particularly strong growth in
wholesale sales and favourable product mix.
Europe, Middle East & Africa
2006 2005
Stores at year end 779 758
Store openings (net) 21 4
Company-owned stores 132 94
£m £m Change
Store sales 218.4 203.3 +7%
The Body Shop At Home - -
--------- --------
Total retail sales 218.4 203.3 +7%
Turnover 94.2 74.4 +27%
Operating profit 19.1 16.0 +19%
Both total retail sales and comparable store sales grew by 7%. Highlights
included continuing strong growth in the Middle East (+11%) and the Nordic
region (+12%). In Western and Southern Europe, good positive growth was achieved
in France (+11%), Spain (+6%), Holland (+6%) and Germany (+3%), whilst the trend
continued to improve in Italy (-2%). The store base in Eastern Europe, although
small, is performing well. Stores were opened in two new franchised markets
during the year, Jordan and Russia. In Russia, there were six stores in place by
the year end, with another 11 openings planned for the current year.
The increase in regional turnover and operating profit has been achieved as a
result of positive underlying sales trends, strong growth in wholesale sales and
the acquisition of the Benelux head franchise businesses in March 2005.
UK & Republic of Ireland
2006 2005
Stores at year end * 305 304
Store openings (net) 1 -9
Company-owned stores 242 228
£m £m Change
Store sales 146.4 143.6 +2%
The Body Shop At Home 19.6 17.0 +15%
--------- --------
Total retail sales 166.0 160.6 +3%
Turnover 144.5 137.9 +5%
Operating profit 13.2 13.3 -1%
* These store numbers exclude 138 (2005: 101) concessions in pharmacies.
Total retail sales grew by 3%, with comparable store sales up by 2%. The
comparable store sales performance reflects growth of 3% in the UK, with a
decline of 1% in the Republic of Ireland. The growth in the UK was achieved
despite a challenging trading environment during the Christmas period.
The Body Shop At Home progressed well, with growth of 15% during the year.
Opportunities for cross-channel marketing between the stores and The Body Shop
At Home continue to be developed.
The movement in regional turnover reflects the growth in retail sales, with
operating profit broadly level year on year.
Interest and Exchange Rates
The net interest charge of £3.9 million relates to average net debt of £26.3
million over the year (2005: £42.2 million). The balance sheet showed net debt
of £12.7 million at the period end, compared with net debt of £19.8 million at
the end of the previous year.
The currencies to which the Group is principally exposed are the US dollar and
the Euro. In addition, there is exposure to the currencies of Singapore, Hong
Kong and Canada.
The results of overseas subsidiaries have been translated at an average sterling
/dollar rate of $1.80 (2005: $1.84) and an average sterling/euro rate of €1.47
(2005: €1.47). The movement in exchange rates year on year has had a minimal
impact on profit before tax.
Taxation, Earnings per Share and Dividends
The tax charge for the year is £8.4 million, giving an effective rate of 22.3%
(2005: 19.3%). The effective tax rate reflects continued benefit from the
utilisation and recognition of brought forward operating losses and temporary
differences in the US business. In line with IAS 12, these losses and temporary
differences are recognised as a deferred tax asset in the period under review,
which has the effect of reducing the effective tax rate.
Earnings per share were 13.6 pence (2005: 13.8 pence) on a weighted average
number of shares of 210.5 million (2005: 206.6 million), which excludes the
shares held by The Body Shop International Employee Share Trust.
As previously announced, the Board has resolved to pay a second interim dividend
of 4.4 pence per share in lieu of a final dividend (2005: final dividend of 3.8
pence per share). This second interim dividend will be paid on 3 July 2006 to
shareholders who were on the register at 24 March 2006. Together with the first
interim dividend of 2.2 pence, the total for the year is 6.6 pence (2005: 5.7
pence) per share.
Cash Flow
The Group generated net cash inflow from operating activities of £71.2 million
(2005: £68.7 million). Movement in working capital was helped by a £7.3 million
reduction in inventory to £54.8 million (2005: £62.1 million), reflecting
efficiencies gained through the investment in supply chain management systems.
Capital expenditure (excluding acquisitions) amounted to £32.0 million (2005:
£20.9 million), with approximately two thirds invested in new stores and store
refurbishments and the majority of the balance in information systems.
Acquisition expenditure of £4.4 million includes the purchase of the Benelux
head franchise businesses in March 2005.
Definitions:
Total retail sales - Sales to consumers through all stores, The Body Shop At
Home and the internet. Retail sales figures are stated at comparable exchange
rates, with prior year figures being restated where appropriate.
Comparable store sales - Sales by all stores which have been trading for more
than one year, excluding sales through pharmacy concessions.
Turnover - Group revenue derived from a combination of retail sales (excluding
sales taxes) through company-owned stores, The Body Shop At Home in
company-owned markets and the internet, together with wholesale revenue and
royalties from franchisees.
Consolidated Income Statement
For the 52 weeks ended 25 February 2006
Total Total
2006 2005
£m £m
----------- -----------
Revenue 485.8 419.0
Cost of sales (167.3) (146.3)
----------- -----------
Gross profit 318.5 272.7
Operating expenses (277.0) (233.5)
----------- -----------
Operating profit 41.5 39.2
Finance income 1.3 1.3
Finance costs (5.2) (4.8)
----------- -----------
Profit on ordinary activities before taxation 37.6 35.7
Taxation (8.4) (6.9)
----------- -----------
Profit for the financial period 29.2 28.8
=========== ===========
Attributable to:
Equity holders of the parent 28.6 28.5
Minority interest 0.6 0.3
----------- -----------
29.2 28.8
=========== ===========
Earnings per share (Note 2)
- Basic earnings per ordinary share 13.6p 13.8p
- Diluted earnings per ordinary share 13.2p 13.3p
Group Balance Sheet
At 25 February 2006
25 Feb 2006 26 Feb 2005
Restated
£m £m
Assets
Non-current assets
Property, plant and equipment 90.3 73.1
Intangible assets 9.4 9.8
Goodwill 53.5 47.8
Deferred tax assets 10.9 8.6
Non-current receivables 4.6 4.7
---------- ----------
Total non-current assets 168.7 144.0
Current assets
Inventories 54.8 62.1
Trade and other receivables 40.3 32.4
Derivatives 0.1 0.2
Cash and cash equivalents 53.8 41.6
---------- ----------
Total current assets 149.0 136.3
---------- ----------
Total assets 317.7 280.3
---------- ----------
Liabilities
Current liabilities
Trade and other payables (57.1) (49.7)
Interest-bearing loans and borrowings (51.1) (45.6)
Obligations under finance leases (2.3) (2.4)
Tax payable (6.9) (8.0)
Provisions (0.8) (0.8)
---------- ----------
Total current liabilities (118.2) (106.5)
---------- ----------
Non-current liabilities
Interest-bearing loans and borrowings (0.2) (0.3)
Obligations under finance leases (12.9) (13.1)
Provisions (0.6) (1.4)
---------- ----------
Total non-current liabilities (13.7) (14.8)
---------- ----------
Total liabilities (131.9) (121.3)
---------- ----------
---------- ----------
Net assets 185.8 159.0
========== ==========
Equity
Called up share capital 10.9 10.7
Share premium account 65.9 62.3
Reserve for own shares (6.1) (6.1)
Translation reserve 2.3 -
Other reserves 5.5 1.2
Retained earnings 105.8 89.8
---------- ----------
Equity attributable to equity holders of the
parent 184.3 157.9
Minority interests 1.5 1.1
---------- ----------
Total equity 185.8 159.0
========== ==========
These financial statements were approved by the Board on 5 May 2006.
Group Cash Flow
52 weeks to 52 weeks to
25 Feb 2006 26 Feb 2005
Restated
£m £m
Cash flows from operating activities
Operating profit 41.5 39.2
Adjustments:
Depreciation 15.0 14.0
Loss on disposal of property, plant
and equipment 1.5 0.8
Loss on disposal of intangible assets - 0.1
Amortisation 2.4 2.1
Impairment of assets 0.2 -
Share option charge 1.4 1.4
Exchange movement 0.7 1.0
Changes in working capital (excluding the effects
of acquisitions):
(Increase)/decrease in inventories 11.7 (0.3)
(Increase)/decrease in trade and other
receivables (5.7) 5.9
Increase in trade and other payables 3.3 4.7
(Decrease) in provisions (0.8) (0.1)
--------- ---------
Cash generated from operations 71.2 68.8
Interest received 1.3 1.3
Interest paid (5.2) (4.8)
Income tax paid (9.5) (6.5)
--------- ---------
Net cash from operating activities 57.8 58.8
--------- ---------
Cash flows from investing activities
Acquisition of subsidiaries, net of
cash acquired (4.4) (19.3)
Purchase of property, plant and
equipment (32.0) (20.9)
Purchase of intangible assets (2.0) (4.6)
--------- ---------
Net cash used in investing activities (38.4) (44.8)
--------- ---------
Cash flows from financing activities
Proceeds from the issue of ordinary
share capital 3.8 2.4
Proceeds from borrowings 1.9 19.9
Capital element of finance lease
rental payments (0.3) (0.5)
Dividends paid to Company's equity
holders (12.6) (11.7)
--------- ---------
Net cash used in financing activities (7.2) 10.1
--------- ---------
--------- ---------
Net increase in cash and cash
equivalents 12.2 24.1
Cash and cash equivalents at the
beginning of the period 41.6 17.5
--------- ---------
Cash and cash equivalents at the end
of the period 53.8 41.6
--------- ---------
Consolidated Statement of Changes in Equity
Attributable to equity holders of the parent
---------------------------------------------------------------------
Share capital Share premium Other reserves Translation Retained Minority Total equity
reserve earnings interest
£m £m £m £m £m £m £m
Balance at
29 February 2004 10.4 54.7 (3.6) - 73.0 - 134.5
------ ------ ------ ------- ------- ------ ------
Changes in equity
for 2004/2005:
Employee share - - 4.3 - - - 4.3
option scheme
Shares issued:
Cash 0.3 2.1 - - - - 2.4
Other than
cash - 5.5 - - - - 5.5
Business
combination - - - - - 0.8 0.8
Dividends - - - - (11.7) - (11.7)
Puttable
minority
interest - - (5.6) - - - (5.6)
------ ------ ------ ------- ------- ------ ------
Net income
recognised
directly in
equity 0.3 7.6 (1.3) - (11.7) 0.8 (4.3)
Profit for
the period - - - - 28.5 0.3 28.8
------ ------ ------ ------- ------- ------ ------
Total
recognised
income and
expense for
the period 0.3 7.6 (1.3) - 16.8 1.1 24.5
------ ------ ------ ------- ------- ------ ------
------ ------ ------ ------- ------- ------ ------
Balance at
26 February 10.7 62.3 (4.9) - 89.8 1.1 159.0
2005
------ ------ ------ ------- ------- ------ ------
Balance at
27 February 10.7 62.3 (4.9) - 89.8 1.1 159.0
2005
------ ------ ------ ------- ------- ------ ------
Changes in
equity for
2005/2006:
Employee share - - 4.3 - - - 4.3
option scheme
Shares 0.2 3.6 - - - - 3.8
issued
Dividends - - - - (12.6) - (12.6)
Currency
translation
differences - - - 2.3 - (0.2) 2.1
------ ------ ------ ------- ------- ------ ------
Net income
recognised
directly in
equity 0.2 3.6 4.3 2.3 (12.6) (0.2) (2.4)
Profit for
the period - - - - 28.6 0.6 29.2
------ ------ ------ ------- ------- ------ ------
Total
recognised
income and
expense for
the period 0.2 3.6 4.3 2.3 16.0 0.4 26.8
------ ------ ------ ------- ------- ------ ------
------ ------ ------ ------- ------- ------ ------
Balance at
25 February 10.9 65.9 (0.6) 2.3 105.8 1.5 185.8
2006
------ ------ ------ ------- ------- ------ ------
Segmental Analysis
2006 2005
Shop Numbers
Americas 444 429
Asia Pacific 605 554
Europe, Middle East & Africa 779 758
UK & Republic of Ireland* 305 304
------------- ------------
2,133 2,045
------------- ------------
Comparable Store Sales
Americas -1% 0%
Asia Pacific +6% +5%
Europe, Middle East & Africa +7% +2%
UK & Republic of Ireland +2% 0%
------------- ------------
+4% +2%
------------- ------------
Restated
£m £m
Retail Sales
Americas 175.9 169.4
Asia Pacific 211.7 190.7
Europe, Middle East & Africa 218.4 203.3
UK & Republic of Ireland 166.0 160.6
------------- ------------
772.0 724.0
------------- ------------
Turnover
Americas 161.0 142.3
Asia Pacific 86.1 64.4
Europe, Middle East & Africa 94.2 74.4
UK & Republic of Ireland 144.5 137.9
------------- ------------
485.8 419.0
------------- ------------
Operating Profit
Americas 17.4 21.9
Asia Pacific 27.2 20.1
Europe, Middle East & Africa 19.1 16.0
UK & Republic of Ireland 13.2 13.3
Central services (35.4) (32.1)
------------- ------------
Operating profit 41.5 39.2
------------- ------------
*These numbers exclude 138 (2005:101) concessions in pharmacies.
Notes to the Accounts
1) Basis of preparation
These financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRSs and IFRIC interpretations) issued by the
International Accounting Standards Board (IASB as adopted by the EU) and with
those parts of the Companies Act 1985 applicable to companies preparing their
accounts under IFRS. This is the first time the Company has prepared its
financial statements in accordance with IFRSs, having previously prepared its
financial statements in accordance with UK accounting standards.
The accounting policies followed in this preliminary financial report are the
same as those published by the Group on 1 September 2005 within the 'Adoption of
International Financial Reporting Standards', which is available on the Group's
web site (www.thebodyshopinternational.com). IFRS 1 'First-time Adoption of
International Financial Reporting Standards' has been applied with effect from
29 February 2004 in preparing these financial statements. As a result, the
comparative information has been adjusted to conform to IFRS.
These financial statements do not constitute statutory accounts within the
meaning of Section 240 of the Companies Act 1985. The financial information for
the 52 weeks ended 25 February 2006 and 26 February 2005 is extracted from the
Group's financial statements to those dates. The financial statements for both
periods have received unqualified auditors' reports, those for the 52 weeks
ended 26 February 2005 having been filed with the Registrar of Companies and
those for 25 February 2006 to be filed in due course.
2) Earnings per share
2006 2005
£m EPS £m EPS
Profit attributable to equity holders of the
Company 28.6 13.6p 28.5 13.8p
2006 2005
Weighted average number of shares in issue
(millions) 210.5 206.6
Dilutive effect of share options (millions) 6.6 6.7
------ ------
217.1 213.3
------ ------
Diluted earnings per share 13.2p 13.3p
The weighted average excludes 4,573,645 (2005: 4,573,645) shares held by the
Employee Share Trust.
3) Annual General Meeting and Report and Accounts
The Annual General Meeting will be held at 11.00am on Thursday 27 July 2006 at
The Body Shop International PLC, Watersmead, Littlehampton BN17 6LS. The Annual
Report and Accounts will be sent to shareholders on, or close to, 8 June 2006.
This information is provided by RNS
The company news service from the London Stock Exchange