Halandri, August 30, 2012

 

 

DECREASE OF SALES FOR SPRIDER STORES IN THE FIRST HALF OF 2012

CONTINUOUS DECREASE OF OPERATING EXPENSES

 

SPRIDER STORES Group of companies released its H1 2012 consolidated financial results according to the International Financial Reporting Standards.

 

The ongoing decline of consumption due to the continuing recession of the Greek economy, the debt crisis and the uncertainty that prevails in Greece, were the main characteristics of the current year's first half. It is mentioned indicatively that during the first five months of the year, according to the latest data published by the Hellenic Statistical Authority, apparel retail sales in Greece dropped by 22.3%.

 

Moreover, in charge of the situation described above, early in the morning on Monday, February 13, 2012 an unfavorable event took place, when the Company's headquarters in Anthousa, Attica, admitted arson attack by unidentified individuals, resulting to the complete destruction of both the headquarters and the warehouse, something that significantly affected the company's activities during the following months. The inventories and the equipment that were in the warehouse and offices of the Company were insured pursuant to SPRIDER STORES standard insurance coverage, while during this period there is cooperation with the involved insurance companies to certify the amount of losses and proceed to the payment of the relevant compensations as soon as possible.

The amount of losses due to the fire, as derived by the company's books shaped at € 12.180 thou, with possible total compensation amounting € 9.969 thou, as it is depicted in the relevant insurance contracts. However, it must be stressed, as it is provided by the Law, since up to the publication date of 6M 2012 financial statements, the Fire Department in authority has not issued an official opinion, therefore the company and the group, as provided by the law, have not formed provisions for collecting compensation from insurance companies.

 

Please note that following the decision of the BoD as at 30/06/2012 and the as at 30/06/2012 deed of sale it was decided to sell the Romanian subsidiary SPRIDER STORES SRL to the company NAQUA INVESTMENTS LTD., which is based in Cyprus and specializes in retail sale of clothing - shoes in Eastern Europe. The price was at the level of € 640,000.00.

The deep recession of the Greek economy, the liquidity crisis and the ongoing rationalization of the sales network of SPRIDER STORES in conjunction with the ongoing losses of the Romanian subsidiary, led the Board to conclude that it is in the interest of the Group to disengage from the activity at the neighboring country in order to focus on Greece, which is the main place of activity and interest.

The major benefits expected to arise from the sale of SPRIDER STORES SRL summarized below:

 

• Improve consolidated gross profit margin by 1.50 percentage points.
• Improve EBIDTA by euro 1,500 thou.
• Improve earnings after tax and consequently improve equity by approximately euro 3,200 thou.
• Improve liquidity of the parent company by euro 3,000 thou. (i.e. the amount that have reached the purchases of the parent for the subsidiary, the repayment of which are undertaken by the buyer)

 

In addition to the above and within the framework of rationalization of the sales network, the Group during the first half 2012 proceeded to the cease of operation of two more stores, one in Sofia, Bulgaria and one in Lefkada.

 

As a consequence of the above, consolidated sales for the first half of 2012 reduced by 30.0% and amounted € 41.261 thou over € 58,968 thou in the respective period last year. The most important factors in determining the drop in sales can be summed up in the adverse conditions of the Greek market, as they were described earlier, as well as in the temporary lack of merchandise in the company's sales network due to the arson.

Respectively, group gross profit in 6M 2012 amounted € 20,297 thou versus € 32,368 thou in the first half of 2011, reduced by 37.3%. Gross margin dropped by 5.8 percentage points to 49.1% versus 54.9% in the respective period last year. The reduced gross margin was due, apart from the above mentioned drop in sales, to the ongoing special offers and competitive prices via higher discounts during the winter sales discount period in order to enhance competitiveness and market shares.

 

Group EBITDA formed at losses of € 13.533 thou versus losses of € 773 thou in the first half of 2011. It must be noted that Group EBITDA are burdened with the amount of € 8.198 thou, concerning losses from destroyed inventory due to the fire of February 13^th, which were depicted in the account “Other Expenses” and as it was mentioned above the company did not form the same amount of provisions for collecting the relevant insurance compensation.

Please note that Group total expenses before depreciation in the first half of 2012, reached € 24,866 thou over € 34,082 thou in 6M 2011, reduced by 27.0%, reflecting on the Group's continuous efforts to streamline operating costs in this year as well.

 

Consolidated EBIT for the first half of 2011 amounted to losses of € 18,155 thou over losses of € 6,765 thou in the respective period of 2011. Depreciation expense during 6M 2012 shaped at € 4,622 thou over € 5,992 thou in 6M 2011, reduced by 22.9%, which is attributed to the constraint of the investments.

 

Group results before taxes (EBT) formed at losses € 25,061 thou versus losses of € 8,412 thou in 6M 2011. It must be noted that Group EBT are burdened with the amount of € 3.982 thou, regarding losses from destroyed fixed assets due to the fire of February 13^th, which were depicted in the homonymous account and as it was mentioned above the company did not form the same amount of provisions for collecting the relevant insurance compensation.

 

Finally, group results after tax and minorities (EATAM) for the first half of 2012 amounted to losses of € 25,159 thou over losses of € 8,473 thou in the respective period in 2011.  

 

The Group's management follows developments closely and continues the execution of its strategic plan in 2012 as well, while at the same time monitors the volatile conditions of both the Greek market and the regional markets where the Group operates in the SE Europe, in order to promptly adjust its strategy whenever deemed necessary. The strategic priorities for 2012 continue to comprise of the rationalization of the sales network, the increase of market share, the constrain of operational expenses, the fortification of the operational cash flow, the preservation of the competitive pricing policy and the further utilization of the supply chain infrastructure. In concluding the collection of the compensation for destroyed inventories and fixed assets due to the fire of February 13^th, 2012, it is considered of vital importance, in order for the company to continue smoothly its operations

 

 

CONSOLIDATED INCOME STATEMENT 6M 2012

(amounts   in € thou)	30/6/2012	30/6/2011	Δ   %
Sales	41.261	58.968	-30,0%
Gross   Profit	20.297	32.368	-37,3%
(% sales)	49,2%	54,9%
EBITDA	-13.533	-773	NA
(% sales)	NA	NA
EBIT	-18.155	-6.765	NA
(% sales)	NA	NA
EBT	-25.061	-8.412	NA
(% sales)	NA	NA
EATΑΜ	-25.159	-8.473	NA
(% sales)	NA	NA

NA = not applicable

 

FINANCIAL CALENDAR 2012
1st   Half Results	Thursday,   August 30, 2012
Q3   Results	Thursday,   November 22, 2012
FY   2012 Results	Thursday,   March 21, 2013

 

Note:

The 6M 2012 “Financial Data and Information” of SPRIDER STORES S.A. will be published on Thursday, August 30, 2012.          

 

SPRIDER STORES is the largest Greek multinational value fashion and house ware retail chain, offering complete apparel solutions for the entire family, always under the optimum price – fashion – quality ratio, through an extensive sales network, of ninety (90) stores, of which eighty-four (84) stores are strategically located in key cities across Greece and six (6) stores in major cities of southern and eastern Europe and especially in Bulgaria and Cyprus.