De Rigo: strong upturn in profits (+103%) and sales (+10.4%) for 2006
Consolidated billings grew by 10.4% from 505.7 million euros in 2005 to 558.4 million euros in 2006.
Specifically:
-Billings by the production and wholesale division increased by 20.2% to 164.7 million euros from 137.0 million euros in 2005 due to the general growth of all brands and the launch of the new brands under license, Ermenegildo Zegna and Jean Paul Gaultier.
-Billings by the retail division stood at 406.8 million euros, an upturn of 6.7% compared to the 381.3 millions euros in 2005. This result was mainly due to the comparable strong growth in sales at the 590 stores in the Group's retail chains: Dollond & Aitchison ('D&A') and General Optica ('GO'), which operate on the British and Spanish markets, respectively.
-There was also a good increase in billings from franchises and the Police products under license, which grew by 13.2% to 85.8 million euros from 75.8 million euros in 2005.
-Gross operating margin increased by 32.4% to 63.4 million euros (47.9 million euros in 2005), 11.4% of billings compared to 9.5% the previous year.
-Operating profit grew by 54.2% to 36.4 million euros from 23.6 million euros in 2005, 6.5% of billings compared to 4.7% the previous year.
-Net profits also leaped ahead to 24.4 million euros, an upturn of 103% compared to the 12.0 million euros in 2005.
-Improvement also in the Group's net financial position, which showed a net negative balance of 46.3 million euros compared to indebtedness of 58.8 million euros the previous year, despite heavy investments of 23.7 million euros compared to the previous year's 16.8 million euros, which were mainly allocated to the expansion and renewal of the stores network in Spain and the United Kingdom. The improvement in the Group's net financial position is mainly attributable to the type of management, which contributed to reducing indebtedness by 10.8 million euros.
Ennio De Rigo, President of the De Rigo Group, made this comment on the financial statement results for 2006: 'The excellent result for 2006 shows that we have achieved healthy growth of our already positive sales results, but without forfeiting margins in order to support development. The contribution to profitability made by the license contracts we have signed in the last two years has still to be realized, as is the strong and positive contribution that will come from increased sales of the other brands, including our own brands.
As far as the retail business is concerned, our chains have had a substantial increase in billings on a comparable basis, and these have had a strong positive effect on our profits because of our continued attention to cost control. Business rationalization and increased efficiency will be pursued also by making important investments in the company's information systems for which we have approved an investment plan of over 15 million euros in two years.
At General Optica, we intent to increasingly develop by opening new wholly-owned and franchised outlets and by increased differentiation from competitors who mainly aim at low prices.
D&A improved considerably in 2006 and we will be focusing on projects addressed to the company's strategic positioning, also by repeating last year's important advertising campaign, the reorganization of outlets and attention to the customer.'
