Today, IC Group has signed an agreement to sell Saint Tropez to DK Company A/S with an expected final closing date as at 31 January 2019.
The Group expects a positive, minor million amount impact on cash flow from the sale while the accounting effect is expected to amount to a loss of DKK 70 million subject to the final adjustment of transaction costs, working capital as well as certain debt items. Out of this amount, DKK 55 million will be recognized in H1 2018/19 while DKK 15 million is expected to be recognized in Q3 2018/19. The majority of the accounting loss relates to impairment of goodwill, other intangible and tangible assets as well as deferred tax assets.
This divestment means that as of the interim report for Q3 2018/19, Saint Tropez will be classified and presented as discontinued operations.
Financial expectations for 2018/19
For the Group's continuing operations, which comprise Tiger of Sweden, By Malene Birger and the reporting segment "Central functions", a minor revenue reduction measured in local currency is expected for the financial year 2018/19 compared to the year before. The EBIT margin is expected to be realized at a level of 1-2% prior to non-recurring costs in respect of the transformation of the Group.
In Tiger of Sweden, a minor revenue reduction (measured in local currency) and a moderate decline in nominal earnings are expected. The previous guidance for Tiger of Sweden stated: "revenue is expected to increase while the nominal earnings are expected at the same level as last financial year". The updated expectations for the brand reflect lower, anticipated performance in direct-to-consumer channels for the rest of the financial year - retail in particular.
In By Malene Birger, a moderate revenue reduction (measured in local currency) and a substantial decline in nominal earnings are expected. The previous guidance for By Malene Birger stated: "revenue is expected to increase while the nominal earnings are expected at the same level as last financial year". Similar to Tiger of Sweden, the updated expectations for the brand reflect lower, anticipated performance in direct-to-consumer channels for the rest of the financial year.
The line item "Central functions" will be negative as it will be affected negatively by changed allocation principles in respect of costs in the corporate functions as well as idle costs in respect of the head office after the divestment of Peak Performance. Combined, these amount to approx. DKK 30 million. The expected result of "Central functions" is unchanged compared to previous guidance announced on 5 December 2018 (Company Announcement no. 36/2018).
Investments for the continuing operations for the financial year 2018/19 are expected to amount to approx. 3% of annual revenue.
Outlook overview of the Group's continuing operations (before non-recurring costs)
| DKK million | Realized outlook 2017/18 | Outlook 2018/19 as at 5 December 2018 | Current outlook 2018/19 | Status |
| Revenue growth (local currency) | (7.3)% | n.a. | Minor reduction | New |
| Tiger of Sweden | (9.0)% | Revenue growth | Minor reduction | Changed |
| By Malene Birger | (4.0)% | Revenue growth | Moderate reduction | Changed |
| EBIT margin before non-recurring costs | 6.0% | n.a | 1-2% | New |
| Tiger of Sweden | 47 | Nominal earnings at same level | Moderate decline | Changed |
| By Malene Birger | 18 | Nominal earnings at same level | Substantial decline | Changed |
| Investments | 2.3% | n.a. | Approx. 3%. | New |
IC Group A/S
Please direct any questions regarding this announcement to:
Karin Hjort Jensen
Executive assistant to the CEO
+45 32 66 75 43
This announcement is a translation from the Danish language. In the event of any discrepancy
between the Danish and English versions, the Danish version shall prevail.
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