• Profit up 16.8% to SEK38.9m from SEK33.3m
  • Sales fell 7% to SEK995m from SEK1.08bn
  • Gross margin improved slightly to 46.8%

Swedish brand developer New Wave Group has today (22 August) reported a 16.8% increase in second quarter profit, despite a tough retail environment and weaker demand in the Nordic regions. 

Profit after tax stood at SEK38.9m (US$6m), up from SEK33.3m in the same period of the prior year. 

Sales fell 7% to SEK995m from SEK1.08bn last year, due to weaker demand in Sweden and the other Nordic countries, as well as the negative impact from currency changes. Sales were also lost due to stocks of certain items, such as T-shirts and polo shirts being too low.

Gross margin improved slightly to 46.8% from 46% in the previous year.

CEO Torsten Jansson said the market "remained tough" during the quarter, adding that the company saw no change in Europe, Sweden or Norway. "The only geographical area that feels stable and which may be on the way up is the USA," he explained. 

Jansson noted that he is "still far from satisfied with" the results and added: "I consider several of our companies and brands are underachieving even if the market is tough. During the autumn we will continue to focus on improvements in these companies and structural changes and reorganising may be required among subsidiaries."

Show the press release

Interim report for New Wave Group AB (publ) - JANUARY–JUNE 2013

KUNGÄLV, Sweden--(BUSINESS WIRE)--Regulatory News:

PERIOD 1 APRIL – 30 JUNE 2013

  • Sales amounted to SEK 995 million, which was SEK 80 million lower than last year (SEK 1,075 million).
  • Operating profit amounted to SEK 70.2 million (SEK 58.7 million).
  • Profit after tax amounted to SEK 38.9 million (SEK 33.3 million).
  • Earnings per share amounted to SEK 0.60 (SEK 0.50).
  • Cash flow from operating activities amounted to SEK 41.8 million (SEK 132.8 million).

PERIOD 1 JANUARY – 30 JUNE 2013

  • Sales amounted to SEK 1,873 million, which was SEK 177 million lower than last year (SEK 2,050 million).
  • Operating profit amounted to SEK 86.3 million (SEK 61.3 million).
  • Profit after tax amounted to SEK 39.0 million (SEK 25.1 million).
  • Earnings per share amounted to SEK 0.60 (SEK 0.38).
  • Cash flow from operating activities amounted to SEK 147.9 million (SEK 177.8 million).
  • Equity ratio amounted to 46.0% (43.4%).
  • Net debt to equity ratio amounted to 73.3% (83.4%).

CEO comments

MARKETING & SALES

The market remained tough in the second quarter and we see no change in Europe – nor in our largest markets such as Sweden and Norway. The only geographical area that feels stable and which may be on the way up is the USA. Meanwhile, we lost sales in the quarter due to stocks being too low for certain items e.g. t-shirt and polo.

RESULT

We have good cost control. This, together with the fact that Orrefors Kosta Boda continues to improve means that we managed a decent result. However, a result which I still am far from satisfied with. I consider several of our companies and brands are underachieving even if the market is tough. During the autumn we will continue to focus on improvements in these companies and structural changes and reorganising may be required among subsidiaries.

CASH FLOW AND WORKING CAPITAL

We still have good control over cash flow but unfortunately we have too low stocks in regards to corporate promo. We will therefore increase stocks in corporate promo during the coming quarters.

FUTURE

We expect a continued tough and difficult market in the third quarter and maybe for the rest of the year. We have not seen any signs of a turnaround in the first half year, but instead a certain deterioration. During the first half year, we have worked to prioritize results and further strengthening of our balance sheet. We will, however, during the remainder of the year increase sales and marketing efforts. While this may give slightly worse results in the coming quarters, we are convinced that it is right for the future.

Torsten Jansson     

Original source: http://www.businesswire.com/news/home/20130821006219/en/Interim-report-Wave-Group-AB-publ--