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Analysts have high expectations for Ted Baker: double-digit pre-tax profit in H1

By Angela Gonzalez-Rodriguez

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Business |ANALYSIS

The market has raised the bar for the British fashion label, expected to unveil double-digit pre-tax profit growth in its interim results on Tuesday, boosted by a steady internalisation and a healthy online offering.

Analysts at Liberum advanced their projections for Ted Baker in a note to market earlier this weekend, setting the pre-tax profit bar at circa 24 million pounds for the six months to the end of July. Their peers at broker Stifel concur, having set the expected level at 24.3 million pounds. If achieved, this figure will indicate a 12 percent increase in the company's bottom line.

"Ted's brand strength underpins its global appeal and positions it well both in the UK and internationally for long-term market share gains," said on Friday Adam Tomlinson, an analyst at Liberum.

Ted Baker defies a traditional weaker H1 and wins over the market

The first half of the year is typically weaker at Ted Baker, with roughly a 30/70 split, meaning analysts are expecting full-year profits to top 73 million pounds, published ‘City A.M.’ The British brand now draws in approximately 40 percent of its business overseas, an area which analysts say is primed for further growth.

Stifel analysts said that annual sales growth of as much as 15 percent could be even faster if the group leverages overseas market growth onto fixed central costs.

Meanwhile, analysts at Exane BNP Paribas summed up their positive outlook: "Ted Baker ticks all the boxes" as "a brand which has offered stable, consistent growth for nearly 30 years, through careful distribution without overreliance on overt branding.” "Evidence suggests Ted Baker is becoming more desirable. Proven internationally and competing in the attractive and less crowded ‘accessible luxury’ space, we believe Ted looks well set to capture the global opportunity and deliver superior returns," added the private bank.

Further internationalisation and halting heavy discounts, Ted Baker’s future-proof plan

Analysts also said that the slide in Ted Baker's share price over recent years was an over-reaction to general gloom in the retail sector.

It has opened stores in dozens of countries from Australia to Azerbaijan and now makes a third of its revenue outside Europe. Commenting the brand’s latest milestones, the fashion group’s CEO said: “Ted Baker has already proved its international growth credentials and is a unique premium brand that is less vulnerable to mainstream online competition.”

Group sales rose 14 percent to 296 million pounds. According to the company’s own projections, circa 100 million pounds of which came from its own shops and concessions in other stores outside the UK and Europe.

Today, the company is worth £1.2billion after the shares fell by about a quarter in the past two years, reports ‘This is Money’.

Image:Ted Baker Autumn 2017, Ted Baker Web

Ted Baker