Ted Baker posts rise in H1 profit, lifts dividend

Fashion retailer Ted Baker reported a jump in interim profit as revenue grew and the company lifted its dividend following a good performance across all channels, despite challenging trading conditions.

In the 28 weeks ended 13 August, pre-tax profit rose to £21.5m from £17.8m on revenue of £259.5m, up 14.4% from the same period a year ago.

Profit was just a touch higher than consensus expectations of between £19m and £21m and the company said the increase was helped in part by foreign exchange gains of £1.2m, compared to a loss of £700,000 in 2015.

The group lifted its interim dividend to 14.8p per share from 13.2p.

Retail sales including e-commerce were up 13.6%, with sales in the UK and Europe up 8.5% to £131.2m and in North America up 28.7% to £51.1m. In Asia, retail sales were 15.8% higher at £8.8m.

Founder and chief executive Ray Kelvin said: “Ted Baker continues to perform well across all distribution channels despite challenging trading conditions across our markets. Our continued growth and development reflects the strength of the Ted Baker brand, our business model and the skill, innovation and passion of our global teams.

“We remain firmly focused on the long-term development of the Ted Baker brand and are continuing to invest in our infrastructure and people to support the future growth of our business in both new and existing markets.”

In terms of current trading, Ted Baker said it was pleased with the reaction to its Autumn/Winter collections. However, ongoing external factors impacting trading across its established markets have meant that conditions remain challenging.

In the UK and Europe, it has continued its expansion with concession openings in the UK and Germany. In addition, it plans to open an outlet in Spain, and further concessions in the UK, France, Germany and Spain later this year.

In North America, it expansion has continued with the relocation of its New York Soho store and the opening of a new store in Calgary and the group said it remains focused on developing its presence, with plans to open a new store in Atlanta and on in Miami.

George Salmon, equity analyst at Hargreaves Lansdown, said: “This is the company’s first update since Brexit, and is a strong showing in tougher trading conditions. The second half of the year is more important to Ted Baker than the first, nonetheless the news that sales growth remains robust provides reassurance that the group can continue to thrive, even in challenging times.”

At 0950 BST, the shares were up 5.1% to 2,537.52p.