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Fashion retailer Ted Baker posted a deeper first-half loss and scrapped its interim dividend, as the pandemic crunched sales while it was attempting to turn around its performance.
Pre-tax losses for the 28 weeks to 8 August amounted to £39.0 million, compared to losses of £2.7 million year-on-year. Revenue sank 46% to £169.5 million.
On a positive note, Ted Baker said it now expected to achieve its 'one times or less' net debt to operating earnings target by the 2022 financial year, ahead of previous guidance of the 2023 financial year.
'Our financial statements for the first half of the year do not yet reflect the progress we have made on execution against our strategic plan,' chief executive Rachel Osborne said.
Still, Osborne said that due to the nature of lead times, Ted Baker still expected it would take another 12-18 months for its turnaround work to become visible to customers and in improved financial results.
'We are behind where we want to be on revenue,' she said, citing a slow recovery in consumer demand due to Covid, government lock-down measures and heavy discounting online.
'This has also impacted our margins and we have taken additional inventory provisions at the half to reflect the impact of Covid,' she added.
'We have worked hard to offset these shortfalls through cost savings and here we are ahead of our plans.'
'Higher cost savings and the ongoing tight control of cash have resulted in a far stronger balance sheet than we envisaged this early in the plan, with significant cash balances and liquidity to see us through the Covid crisis and beyond.'
'Despite reporting material operating losses as expected this year, underlying free cash flow will be positive for the year. I am extremely pleased to see this level of agility in our cash management.'
At 9:21am: (LON:TED) Ted Baker Plc share price was 0p at 108.9p