Shoppers Stop (SHOPERSTOP) Q4 05/06 earnings summary

Executive summary

• FY2005-06 gross retail turnover reached Rs. 6,775 million, up 34% YoY, and standalone profit after tax rose 42% to Rs. 271 million.

• Consolidated turnover was Rs. 7,243 million and consolidated profit after tax was Rs. 243 million; store count reached 20 across 10 cities.

• Growth priorities included broader geographic reach, premium and luxury merchandise, stronger customer experience, and continued leadership in department stores.

Financial highlights

• Standalone net retail sales were Rs. 6,349.19 million, up 30%; total revenues were Rs. 6,539.89 million, up 32%; PAT was Rs. 271.05 million, up 42%.

• Standalone PBT rose 94% to Rs. 402.47 million; cash profit before tax was Rs. 541.82 million versus Rs. 297.19 million.

• Consolidated net turnover after tax and consignment-cost deductions was Rs. 6,344.85 million; net profit was Rs. 242.71 million versus Rs. 189.35 million.

• Customer entries increased 25% to 18.25 million; four new stores opened, taking the chain to 20 stores and 950,701 sq. ft.

• Proposed dividend increased to Rs. 1.50 per share on expanded capital, totaling Rs. 58.80 million including dividend tax.

Outlook and guidance

• Target: expand from 10 to 22 cities and reach 39 stores covering 2.5 million sq. ft. by March 2008.

• Plans called for over 40 Mothercare stores in India within five years; five shop-in-shops opened in April-May 2006.

• E3 replenishment software was scheduled for store implementation over the next 12 months; forward results remain subject to economic conditions, government policy and other external factors.