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Superdry announces special dividend as it bucks the trend with strong sales and profits

"Whilst the consumer environment continues to be challenging, the board remain confident that Superdry is a uniquely advantaged...," said Superdry CEO Euan Sutherland
Superdry
Revenue growth was driven by a robust performance in wholesale and e-commerce

Superdry PLC (LON:SDRY) shares jumped after the fashion retailer announced a special dividend on the back of its third successive year of double digit growth in full year revenues and profits.

UK retailers have been struggling due to weaker consumer confidence and online competition but Superdry bucked the trend by reporting a 22% increase in global brand revenue to £1.6bn for the year ended 28 April 2018.

Revenue growth was driven by a strong performance in wholesale and e-commerce.

Underlying pre-tax profit rose 11.5% to £97mln as the group invested in areas outside the UK, including in China and North America.

"Superdry has a diverse business structure, and it is geographically diverse too," said David Madden, chief market analyst at CMC Markets.

"The firm’s global reach will stand it in good stead as having exposure to over 50 countries will reduce revenue risk."

Special dividend unveiled, 2019 guidance unchanged

The company recommended a special dividend of 25p per share along with a full year dividend of 31.2p, up 11.4% on the previous year.

"Superdry’s FY18 results are in line with largely pre-announced numbers, but the 25p (£20.5m) special dividend is a key positive, giving a total yield for FY18 of 4.8%," said Liberum, which maintained its 'buy' recommendation and raised its target price to 1,400p from 1,350p.

The guidance for the 2019 fiscal year remains unchanged. Superdry expects “high single digit” statutory revenue growth and a “moderate expansion” in operating margin of 20 to 50 basis points.

READ: Superdry shares fall as fashion retailer reports decline in store sales impacted by “snow disruption”

Superdry invests in online services 

It estimates capital expenditure of £50-60mln for the year as part of its plan to shift away from stores and invest in technology and infrastructure.

The group said it would return “excess capital when appropriate” in 2019.

"Our focus remains on executing our growth strategy and realising the potential we have identified across products, geographies and channels,” said chief executive Euan Sutherland.

"Whilst the consumer environment continues to be challenging, the board remain confident that Superdry is a uniquely advantaged, highly cash-generative business that will continue to deliver sustainable growth for our investors. This confidence is demonstrated through our second special dividend in two years."

Shares rose 10% to 1,294p in morning trading. 

 

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