Ted Baker (lon:ted)
Ted Baker – Trading Update May To July 2020


ItemCurrent PeriodPrevious Period
YearN/A N/A
Period12 Months12 Months
Adjusted Earnings
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Statutory Profit
Adjusted Profit
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Title: Ted Baker – Trading Update May To July 2020
Company: TED - Ted Baker
Share Price Then: 79.99p
Author: Ian Smith
Date: Wed 22 Jul 2020
Comments: Trying to make sense of a trading update for a fashion retailer for May – July 2020 is pretty much impossible but what I can see.

Firstly high street retailers have not been reporting web sales replacing lost store sales, revenue is down by 50%,

Superdry reported web sales replacing around 33% of lost store sales and Ted’s store revenue was down from about £65m to £16m so the £10m increase to £35m for web sales was only 20% of the lost store revenue.

Whether this is more or less profitable will depend on how much cheaper the store have been with government aid, landlord assistance etc, numbers not yet available.

What is positive for me is that the group has As at 18 July, the Company has £161.7m of available headroom on current bank facilities of £108m, with an additional £25m becoming available from September 2020.

In other word it has nearly £57m of cash left from the fund raise and head office sale.
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Previous Commentaries On Ted Baker
Date Share Price Author Commentary
Fri 19 Jun 2020104pIan Smith

Ted Baker – New Shares No Effect On Share Price

140 million new Ted Baker shares were admitted to the market this morning and apparently had little effect on the share price by 08:15 dropping to 103p from 107p

The new shares were priced at 75p per share against a recent range of 80p – 150p, although 80p could easily be regarded as a COVID induced low.

The one thing that hasn’t changed is the question of is this a dying brand or a buying opportunity?
Mon 01 Jun 2020128pIan Smith

Ted Baker – Up And Down Over The COVID Period

A while back Ted Baker announced issues with over valued stock, a shortage of cash and then COVID came and shut down clothing retail along with the funder, Ray Kelvin, being ousted for “hugging policy”.

All this bad news has taken the share price down from around 1100p six months ago to 116p today, so are they now a bargain or correctly priced?

Year ending Jan 2020 shows a tiny reduction in revenue, from £640m to £630 but a swing from a £30m pre tax profit to an £80m loss.

£84.6m of non-underlying expenses, mainly comprising total charges of £45.8m related to inventory, £16.2m related to impairment of store assets, £7.6m related to losses on the disposal of the Asian business and £6.5m for legal and professional costs. In addition, the application of IFRS16 for the first time introduced charges of £5.0m

These results have been followed up with a rights issue and open offer for £95m and possibly another £10m, at today’s price of 138p this is 1.5 times the current market cap. The shares are being offered at 75p which is very roughly 125m new shares, there are currently about 44m shares in issue.

The group has a net debt of £127m of which £72m will be repaid by the sale of its headquarters, although there will be a £25m increate in borrowing and the share issue will go into the nebulous categories of £6 million for an upgraded e-Commerce platform, £31 million for trading and working capital, £24 million for refinancing and restructuring the business and £29 million for other capital expenditure projects

Interest payments were around the £15m mark.

Post share issue prices are hard to predict but does this mean a post issue price of 35p discounting the new investment as it is not really buying anything tangible? Maybe 75p the price that those already hold paid for the new shares?

If we look at Aston Martin who plunged for around 1,800p a few years ago to a current price of around 60p after a share issue at around that price then a rights issue at 30p its pretty clear that prediction is hard.

Admittedly Aston are loaded with debt and are relying on a new the DBX to save the business whereas Ted Baker will have manageable debt but are also relying on reviving their business.

The real question for me is whether or not the company is just another clothing brand that got lucky and its time has now passed or was its founder inspired and the brand is capable of recovery.

The company certainly hasn't seen a collapse in sales, but even after successful years it has had to come back to shareholders and ask for more money.

Looking at Superdry another clothing retailer where the share price is a tenth of where it has been for the last few years it is very unclear that recovery is possible once the brand loses its image. Mike Ashley swooped in on Jack Will but in this case it was never clear if there was an intention to revive the brand or just a short term gain from getting cheap stock.

The new shares will b
Thu 03 Oct 2019475pIan Smith

Ted Baker – Going Private Or Needing Money?

Ted Baker the fashion retailer’s half year results are out and the headline numbers are pretty grim.

Turnover is fractionally down on last year, down by less than 1% but a £25m profit have become a £2.7m loss before exceptionals/IFRS 16 and a £23m loss after taking them into account

The exceptional costs were £17.4m made up accounting adjustments related to last year’s acquisition of the footwear business of £3.5m, £2.0m investigation into the allegations of misconduct of the former
Chief Executive Officer HR-related complaints and £11.8m on restructure of our legacy businesses in Asia.

Changing to IFRS 16 reporting on lease liabilities accounted for another £2.9m of the loss.

This has been exacerbated by the well-publicised challenges that continue to face some of the Group's UK trading partners against the backdrop of the continuing shift towards an increasingly digital retail landscape.

Ted Baker is a luxury brand and to my mind luxury brands should not be affected so much by the move to on line shopping and referencing this as a reason for the decline may indicate that the brand is less luxurious then claimed or it is just part of an industry standard excuse.

The share price of 472p at the same level is slightly higher than it was in Dec 2009 when it started an upward rise to about 3,330p, dropping back to around 1,330p and then down to 800p when these trading results were suggested. Does this suggest a significant over reaction, as the current market cap is now at £210m?

It appears that the company is based around its founder Ray Kelvin, but he has a team that works with his style to run the business rather that he is the boss and he makes all the decisions.

Ray Kelvin actually left the company in March 2019 after allegations that he made people hug, part of what seems to have become the over top reaction to the Me Too movement. Since he left the former FD Lindsay Page has been running the business.

Reading various articles gives me the impression that the business wants Ray Kelvin back and it would be better if he came back, even if it means going private.

The brand itself is quite odd, it doesn’t have a lot of glamourous advertising and there are relatively few articles or reviews of its products on the internet. As the results have been bad comparisons have been drawn with Jack Wills and it is suggested that the company has become stale, but are these suggestions valid or just something article writers can suggest to get their article to the necessary word count?
Mon 30 Sep 2019947pIan Smith

Ted Baker – Going Private Or Needing Money?

Ted Baker the fashion retailer’s half year results are due on Thursday and it is reported that 3 senior managers, Lindsay Page (CEO), Charles Anderson (FD) and Phil Clark (CD), are out courting fund managers.

One theory is that the group is out looking for a share issue and another is that they are looking for funds to take the business private.

The share price of around 945p is the lowest since the start of 2013 having traded mostly between 2,000p and 3,000p since then.