Supergroup PLC Down Despite A Strong Full-Year Performance

The share price of SuperGroup (LSE: SGP) is currently down 2%, following publication of the company’s full-year results, for the period to 26 April 2014. 

SuperGroup reported a 19% increase in underlying pre-tax profit, at £62m, on group revenues that rose almost 20%, to £431m. Underlying earnings per share (EPS) grew by 21%, to 58p, and, on an underlying basis, basic EPS was up 21%.

SupergroupBut because of an increase in the basic weighted average number of shares — due to a share issue in February 2014, resulting from the acquisition of European distribution partner CNC Collections BVBA (now SuperGroup Europe BVBA) in 2011 — reported basic EPS fell by 24%, to 34p.

There was an increase of 68% in the net cash generated from operations (up to £64.3,m) and the group had £86.2m of cash-on-hand as of its year end. However, the company said that it has decided not to return any cash to shareholders — eg,  by way of a dividend — as the board believes that “the business is best served by retaining current cash reserves to support growth“.

Commenting on the results, CEO Julian Dunkerton said:

We have delivered a solid performance over the past year, with profits up 19%, whilst managing the transition to our new distribution centre and the implementation of the merchandising management system. With a strong pipeline of new stores, particularly in mainland Europe, we are well positioned for further profitable growth in the year ahead. The strength of the Superdry brand and the investment we have made in our business leaves me confident in our ability to implement and deliver the growth strategy.

At 1,025p, SuperGroup’s share price is down 28% so far in 2014, compared with a dip of 1.3% in the FTSE 100. But longer-term shareholders will be happy that since it was listed at the end of March 2010, SuperGroup’s share price has risen by 82%, versus a rise in the FTSE 100 of just 17% in the same period.

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Jon Wallis has no position in any shares mentioned. The Motley Fool has no position in any of the shares mentioned.