REG - Quiz PLC - Trading and Cash Position Update

QuizAnnouncement

06/12/2024 07:00

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RNS Number : 0529P  Quiz PLC  06 December 2024

 

 

 

6 December 2024

QUIZ Plc

("QUIZ", the "Company" or the "Group")

 

Trading and Cash Position Update

 

QUIZ, the omni-channel fashion brand provides an update on trading for the
four-month period from 1 August to 30 November 2024 ("the Period") as well as
an update on its bank facilities and cash position.

Trading Update

For the first three months of the Period from 1 August to 31 October, several
of the Group's KPIs were trending positively. However, during the important
trading month of November, QUIZ experienced a marked decline in traffic both
online and in-store compared to previous months and the comparable period in
the prior year.

Whilst it remains uncertain at this stage what the impact of Black Friday
(being a week later than the previous year) and the recent UK budget
announcement is having on this year's pattern and level of spend, revenues in
the period from 1 August to 30 November 2024 amounted to £24.9 million, a
£1.5 million reduction on the prior year period.

Similar to many retailers, revenues generated across November and December are
key to the performance of the business across the year. Consequently, further
to the notable decline in traffic and footfall in November, sales for the
eight months 30 November 2024 were behind management expectations at £52.2m,
an 8.6% reduction from £57.1m in the previous year.

A breakdown of the revenue in the Period is noted below:

                                I August to 30 November 2024  I August to 30 November 2023  Year-on-year change
 Online                         £7.9m                         £8.6m                         - 8.1%
 UK stores and concessions      £12.1m                        £13.4m                        -9.7%
 International                  £4.9m                         £4.4m                         +11.3%
 Total                          £24.9m                        £26.4m                        -5.7%

Online: sales in the first three months of the Period from 1 August to 31
October were consistent with the previous year.  During these months, sales
through third party websites were on an improving trend reflecting increased
sales with existing partners as well as the benefit of commencing sales
through the Debenhams website earlier in the year. In addition, sales through
the QUIZ website during these three months benefited from improving traffic
trends. However, overall Online sales for the Period were significantly
impacted by the material year-on-year decline in demand during November.

UK stores and concessions: as at 30 November 2024 the Group operated 62 stores
in the UK and 47 concessions (30 November 2023: 65 stores and 60 concessions).
The Board was encouraged by the modest like-for-like uplift in sales across
our store estate in the first three months of the Period (1 August to 31
October).  However, a year-on-year decline in store traffic in November led
to a significant reduction in revenues, which were only modestly offset by
encouraging levels of spend over the Black Friday weekend.  During the Period
the Group opened an outlet store in Sunderland which is concentrated on sale
product allowing our flagship stores to increasingly focus on full priced
product.

International: revenues benefited from a strong performance with the Group's
partners in the Middle East and the USA.  The transfer of QUIZ's largest
International market to a new partner earlier in the year resulted in
increased revenues with the partner planning to open four new stores in the
coming months to complement their existing 15 stores.

The gross margin performance in the Period was consistent year-on-year.

The Company continues to proactively manage its cost base and identify
opportunities to improve performance and profits. However, ongoing
improvements being made in these areas will be offset by the recent proposed
changes to the National Living Wage and Employer's National Insurance
arrangements, resulting in circa £1.7 million per annum of additional costs
from April 2025.

Bank Facilities and Cash Position

The Group has £4.0 million of bank facilities which are scheduled to expire
on 30 June 2025. There are no financial covenants applicable to these
facilities which are repayable on demand.

As at 5 December 2024, the Group had net borrowings of £2.8 million and total
liquidity headroom of £1.2 million.

The Board is focussed on managing the Group's working capital carefully. Given
the disappointing level of revenues in November the cash headroom available to
the business is less than previously anticipated.  As a result, and subject
to the trading performance during the important pre-and-post-Christmas period,
the Group's existing bank facilities could be fully utilised in the first
quarter of 2025.

The Group previously announced, on 29 August 2024, that Tarak Ramzan, the
Company's founder and largest shareholder, has offered to provide a £1.0
million loan facility to provide additional liquidity headroom for working
capital purposes (the "Majority Shareholder Loan"). The agreement in relation
to the Majority Shareholder Loan remains outstanding and is subject to
approval from the provider of the Company's banking facilities.

Review of financing and strategic options

Given the decline in the revenues during the key trading month of November and
the requirement to improve the liquidity of the business the Board is
reviewing the Group's financing and strategic options and has engaged advisors
to consider appropriate options. A further update to shareholders will be
provided as and when appropriate.

In the absence of either a material improvement to trading during the
important pre-and-post-Christmas period, the Majority Shareholder Loan being
agreed and made available to the Group or a combination of these
eventualities, the Board anticipates that additional funding will be required
by the Group in the first quarter of 2025.

Notice of Results for the six months to 30 September 2024

The Company expects to provide a further update alongside its results for the
six months ended 30 September 2024 in mid-January 2025. .

 

Enquiries:

 

 QUIZ plc                                 Via Hudson Sandler
 Sheraz Ramzan, Chief Executive Officer

 Gerry Sweeney, Chief Financial Officer

 Panmure Liberum                          +44 (0) 207 886 2500

 (Nominated Adviser and Sole Broker)

 Emma Earl, Ailsa Macmaster

 Rupert Dearden

 Hudson Sandler LLP (Public Relations)    +44 (0) 207 796 4133
 Alex Brennan                             quiz@hudsonsandler.com (mailto:quiz@hudsonsandler.com)

 Emily Brooker

 

Notes:

This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 as it forms part of UK domestic law by virtue of
the European Union (Withdrawal) Act 2018 ("MAR").

 

About QUIZ:

QUIZ is an omni-channel fashion brand, specialising in occasion wear and
dressy casual wear. QUIZ delivers a distinct proposition that empowers its
fashion forward customers to stand out from the crowd.

 

QUIZ's buying and design teams constantly develop its own product lines,
ensuring the latest glamorous looks at value prices. This flexible supply
chain, together with the winning formula of style, quality, value and
speed-to-market has enabled QUIZ to grow into an international brand with
stores, concessions, franchise stores, wholesale partners and international
online partners.

 

QUIZ operates through an omni-channel business model, which encompasses online
sales, standalone stores, concessions, international franchises and wholesale
arrangements.

 

To download images please visit:
http://www.quizgroup.co.uk/media-download-centre/
(http://www.quizgroup.co.uk/media-download-centre/)

For further information:

https://www.quizclothing.co.uk/ (https://www.quizclothing.co.uk/)

http://www.quizgroup.co.uk/ (http://www.quizgroup.co.uk/)

 

 

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