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KMD BRANDS LIMITED
23 March 2022
Half Year Report
For the period ending 31 January 2022
Contents
Results Announcement
Media Announcement
Financial Statements
Auditors' Report
KMD BRANDS LIMITED | P +64 3968 6110 W kmdbrands.com |
Results announcement
For personal use only
Results for announcement to the market
Name of issuer | KMD Brands Limited (formerly Kathmandu Holdings Limited) | ||||
Reporting Period | 6 months to 31 January 2022 | ||||
Previous Reporting Period | 6 months to 31 January 2021 | ||||
Currency | NZD | ||||
Amount (000s) | Percentage change | ||||
Revenue from continuing | $407,304 | -0.8% | |||
operations | |||||
Total Revenue | $407,304 | -0.8% | |||
Net profit/(loss) from continuing | ($5,883) | -126.8% | |||
operations | |||||
Total net profit/(loss) | ($5,505) | -124.7% | |||
Interim Dividend | |||||
Amount per Quoted Equity | $0.03000000 | ||||
Security | |||||
Imputed amount per Quoted | NIL | ||||
Equity Security | |||||
Record Date | 15 June 2022 | ||||
Dividend Payment Date | 30 June 2022 | ||||
Current period | Prior comparable period | ||||
Net tangible assets per Quoted | $0.16 | $0.14 | |||
Equity Security | |||||
A brief explanation of any of the | The interim results are based on accounts which have been subject to | ||||
figures above necessary to | review. Refer to accompanying unaudited financial statements. | ||||
enable the figures to be | |||||
understood | |||||
Authority for this announcement | |||||
Name of person authorised to | Frances Blundell | ||||
make this announcement | |||||
Contact person for this | Frances Blundell | ||||
announcement | |||||
Contact phone number | +64 3 968 6110 | ||||
Contact email address | companysecretary@kmdbrands.com | ||||
Date of release through MAP | Wednesday, 23 March 2022 | ||||
Unaudited financial statements accompany this announcement.
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KMD Brands Limited
ASX / NZX / Media Announcement
23 March 2022
(All amounts in NZ$ unless otherwise stated)
Strategic initiatives position KMD Brands for return
to global growth
Leading global outdoor, lifestyle and sports company, KMD Brands Limited (ASX / NZX: KMD, 'KMD' or the 'Company'), is pleased to announce its results for the six months ended 31 January 2022 (1H FY22).
1H FY22 key highlights (vs 1H FY21):
- Sales of $407.3 million (1H FY21: $410.7 million)
- positive Q2 rebound following Q1 COVID lockdown impacts on Kathmandu and Rip Curl in Australasia
- Oboz impacted by COVID closure of Vietnam factories (now reopened)
- Gross margin of 57.7% (1H FY21: 59.0%), due to elevated international freight costs, and increased clearance mix for the Kathmandu brand
- Underlying EBITDA of $10.2 million (1H FY21: $48.2 million) (excluding the impact of IFRS 16)
- Statutory NPAT loss of $(5.5) million
- Strong balance sheet with $48.6 million net debt and comfortably within all covenants; significant funding headroom of c.$250 million
- Interim dividend increased by 50% to 3.0 cents per share (fully franked for Australian shareholders)
Commenting on the 1H FY22 results, Group CEO & Managing Director Michael Daly said:
"We continued to deliver on our strategic objectives, positioning KMD Brands for growth as travel rebounds globally and COVID-related impacts on supply abate. We maintained a strong focus on building our global brands, sponsoring the first ever World Surf League finals, with the men's event won by a Rip Curl surfer. We opened twelve new owned / licensed retail stores globally, and online sales increased to 17.4% of direct-to-consumer sales, rewarding initiatives to elevate digital capabilities. Substantial progress was also achieved on our ESG strategy."
"Rip Curl delivered sales growth of 2.7% over the half, with strong sales growth in online and wholesale channels, underpinned by strong performance in Europe and Hawaii in particular, while North America was impacted by short-term wetsuit shortages and port congestion. Rip Curl returned to same store sales growth in Q2, as lockdown restrictions lifted and the business rebounded."
"The Kathmandu Australasian store network was more impacted by COVID closures in Q1 than the Rip Curl global store network, before recovering strongly in Q2. While Kathmandu continued to feel the impacts of COVID related travel restrictions, we were pleased to see a 46.4% increase in online sales, and the business is well positioned to grow internationally, with the Europe Fall / Winter 22 sell- in complete, and forward orders in line with expectations."
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"Oboz was impacted by the closure of Vietnam supplier factories due to COVID lockdowns, with approximately half of 1H FY22 orders unable to be fulfilled. However, the demand for the Oboz brand and products has never been stronger, with forward orders into FY23 very strong and supporting our medium-term growth targets."
"Our rebranding to KMD Brands earlier this month reflects our purpose to inspire people to explore and love the outdoors, with a vision of being the leading family of global outdoor brands - designed for purpose, driven by innovation, best for people and planet. It is with this ethos in mind that we look to develop our portfolio of global brands, underpinned by investments that deliver a world-class unified commerce experience, and our commitment to operational excellence and leadership in ESG."
Group financial performance
Statutory | Underlying1 | |||
NZ$ million2 | 1H FY22 | 1H FY22 | 1H FY21 | Var % |
Sales | 407.3 | 407.3 | 410.7 | (0.8%) |
Gross Profit | 234.9 | 234.9 | 242.5 | (3.1%) |
Operating Expenses | (178.8) | (224.7) | (194.3) | 15.7% |
EBITDA | 56.1 | 10.2 | 48.2 | (78.8%) |
EBIT | 0.9 | (5.5) | 33.4 | |
NPAT | (5.5) | (6.8) | 23.1 | |
The 1H FY22 Group results were underpinned by positive Q2 sales following Q1 COVID lockdown impacts on Kathmandu and Rip Curl in Australasia. While these lockdowns impacted EBITDA by c. $35 million, Q2 underlying EBITDA was above last year reflecting the rebound in sales.
The Group invested in the long-term value of all three brands, with an additional $14 million expenditure in 1H FY22 to support brand marketing.
Rip Curl: result underpinned by online and wholesale channel growth
Underlying1 | |||
NZ$ million | 1H FY22 | 1H FY21 | Var% |
Sales | 257.8 | 251.1 | 2.7% |
Gross Profit | 152.7 | 150.3 | 1.5% |
Operating Expenses | (118.9) | (101.7) | 17.0% |
EBITDA | 33.7 | 48.7 | (30.7%) |
EBIT | 26.4 | 41.4 | (36.4%) |
- Underlying results exclude the impact of IFRS 16 leases and one-off abnormal costs
- 1H FY22 NZD/AUD conversion rate 0.953 (1H FY21: 0.931), 1H FY22 NZD/USD conversion rate 0.694 (1H FY21 0.684)
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Rip Curl's results were supported by strong sales growth in online and wholesale channels, with total sales up 2.7% on 1H FY21. Europe and Hawaii in particular achieved strong sales growth, while North America was impacted by wetsuit shortages and port congestion, and Australia was impacted by COVID-related store closures during Q1.
Direct-to-consumer ('DTC') same store sales growth (comprising owned retail stores and online) was up 2.1%, adjusted for COVID lockdowns3. Q2 same store sales growth was +3.0%, with +20.1% same store sales growth compared to Q2 FY20 (pre-COVID). Online sales grew by 14.5%, with penetration increasing from 11.5% of DTC sales in 1H FY21 to 13.8% of DTC sales in 1H FY22.
Wholesale sales were up 16.1%, with less COVID interruption to the 1H FY22 sell-in period than last year. The slight reduction in gross margin to 59.2% (1H FY21: 59.9%) was due to a higher wholesale mix and elevated international freight costs.
Kathmandu: rebounded in Q2
Underlying1 | |||
NZ$ million | 1H FY22 | 1H FY21 | Var % |
Sales | 128.3 | 129.3 | (0.8%) |
Gross Profit | 74.3 | 82.0 | (9.4%) |
Operating Expenses | (92.6) | (81.4) | 13.7% |
EBITDA | (18.3) | 0.5 | |
EBIT | (26.3) | (6.8) | |
Kathmandu's performance continued to be impacted by COVID-related lockdowns and travel restrictions. Same store sales (including online)3 were up 3.0% overall, as a result of a strong Q2 rebound, where same store sales grew by +15.4%. Online sales grew 46.4%, with penetration increasing from 14.4% of sales in 1H FY21 to 21.2% in 1H FY22.
Gross margin was impacted by an elevated clearance mix and elevated international freight costs.
Oboz: result reflects unprecedented supply challenges
Underlying1 | |||
NZ$ million | 1H FY22 | 1H FY21 | Var % |
Sales | 21.2 | 30.4 | (30.2%) |
Gross Profit | 7.7 | 10.5 | (27.0%) |
Operating Expenses | (8.0) | (6.7) | 20.3% |
3 Same store sales are for the 26 full weeks ended 30 January 2022 and are measured at constant currency. Adjusted same store sales removes stores that were not able to open for a comparable period in either year because of COVID closures.
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Kathmandu Holdings Limited published this content on 22 March 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 March 2022 23:31:05 UTC.