Good morning,

There is a crazy supply of results today, I won't be able to cover everything. Let's see how far I get by mid-day.

This is as far as I got:

French Connection (LON:FCCN)

  • Share price: 36p (-6%)
  • No. of shares: 97 million
  • Market cap: £35 million

Interim Results to 31 July 2019

One of the important things to bear in mind with this one is that H1 tends to be very weak, compared to H2.

Last year, FCCN achieved breakeven for the full-year despite an underlying operating loss of £5.5 million in H1.

This year, the company has made an H1 underlying operating loss of £5.3 million. A slight improvement. The company says results are in line with expectations.

Key elements of today's result:

  • revenue down 12% due to a reduction in floor space and lower wholesaling revenue.
  • number of operated stores and concessions down from 103 to 90
  • cash at £10 million (versus £12.8 million at the same time last year).

Retail Like-for-Likes

FCCN reports positive "retail and ecommerce LFL sales in UK/Europe" at 1.4%.

This is a tricky thing to unpack, because of the inclusion of ecommerce sales. Typically, when we look at Retail LfLs, we want the figure as it relates to stores only. Ecommerce is presumed to be available on a full national basis anyway, so the idea of making a "life-for-like" adjustment doesn't apply to it.

The company does report that UK/Europe retail space fell by 8.2%. It also reports that total ecommerce revenue "reduced slightly".

These facts being true, I am inclined to think that the store-only LfL figure for UK/Europe is positive, but it's not quite proven. A pity that we have to play with the numbers, instead of being told in simple terms how the stores are doing

The store on Oxford Street is now closed, as expected.

Remember what the bull thesis says (e.g. Paul in October): that when the worst leases expire, FCCN will be free to make good money from ecommerce, licensing and wholesaling, without the retail albatross around its neck.

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