SuperGroup plc (LON:SGP) hiked its full year dividend by 20.7% to 28.0p per share as the owner of the Superdry clothing brand defied market challenges to deliver growth in profit and revenue.
Shares rose 5.02% to 1,570p in early afternoon trading.
Underlying profit before tax came to £87.0mln in the year to 29 April, an 18.4% increase on the previous year.
Revenue jumped 27.4% to £752.0mln, boosted by online sales, the opening of new retail stores and a weaker pound.
Retail sales grew 20.8% in total and 12.7% on a like-for-like basis as the company expanded its Superdry branded stores by 154,000 square feet, mainly in Continental Europe, and opened 59 new franchise stores.
Wholesale revenue gained 43.2% with 89% out this generated outside the UK.
E-commerce sales rose 35% as more customers made online purchases, increasing the participation rate within retail sales by 280 basis points to 25.9%.
The company said since the UK voted to leave the European Union last June, revenues have been buoyed by the slump in the pound against the euro and the US dollar due to its presence in North America and Europe. The currency translation benefit of the group's international operations was 8.7%.
SuperGroup invests in core infrastructure, global operations
Chief executive, Euan Sutherland, said: “Investment in infrastructure is underpinning our global growth plans and creating future leverage opportunities while ongoing product innovation and new social and digital marketing campaigns are introducing new customers to the Superdry brand."
Superdry said its strong cash position will allow it to invest in its core infrastructure and develop its operations in North America and in China. Underlying operating cash generated before working capital movements was £118.7mlm, compared to £101.7mln a year ago.
However, net cash fell to £65.4mln at the year-end from £100.7mln the same time a year ago.
Liberum notes decline in SuperGroup's cash flows and gross margins
Liberum reiterated a ‘hold’ rating and target price of 1,750p, noting the drop in net cash and gross margins.
Underlying gross margins fell 140 basis points to 60.2%, reflecting stronger wholesale revenue growth at a lower margin. The underlying operating margins fell 70 basis points to 11.9%, primarily due to the dilutive impact of foreign exchange rates across its global operations and the performance of its North American market.
“We understand that the overall growth rates are benefited by roughly 1/3 in foreign exchange terms and is a marginal benefit at the EBIT and pre-tax profit line," said Liberum analyst, Wayne Brown.
“However higher incentive costs of circa £3mln in the year, and what we expect to higher levels of clearance stock has dragged EBIT margin as the recovery of higher costs was not fully offset.”
Central costs rose 27.1% and sales and distribution costs increased 27.4%.
Brown also highlighted the uncertainty over the structure of the board, which is searching for a successor to chairman Peter Bamford.
Non-executive directors Steve Sunnucks and Beatrice Lafon, also won't be standing for re-election at the annual general meeting on 12 September.