BasicNet reported that preliminary sales in 2013 reached €435 million ($598.9 mm), virtually flat with €434 million in fiscal 2012.

The Italian company's trading brands include: Kappa®, Robe di Kappa®, Superga®, K-Way®, Lanzera®, AnziBesson®, Jesus® Jeans and Sabelt®.

Other highlights of the preliminary results:

  • Performance of excellence honed across the American markets (+22 percent) and the Middle East and Africa (+12 percent). The European markets spiked 2 percent growth in 2H2013, fueled by the effective commercial step-action taken by the licensees. Going against the tide and some pretty big odds, sales volumes curved upward across the homeland; royalty income and sourcing commission at €40 million (FY2012: €42 million) mirror the route followed by exchange rates, particularly in certain countries where, notwithstanding the upward pace tracked by local currency-denominated sales, these retreated upon Euro conversion;
  • Sparkling performance by the trading margin on direct sales which, in terms of absolute value, scores +7.8 percent year-over-year to reach €43 million (+23.6 percent with reference to 4Q2013 only) and climbs, when taken as a percentage of turnover, from 36 percent to 38.2 percent;
  • Direct sales revenue captured across the homeland mirrors 1.5 percent growth at €111.7 million (+15.2 percent with reference to 4Q2013 only). Sales revenue taken at Group-branded shops and stores pulled ahead 3 percent from FY2012; other income came to €12.8 million (FY2012: €3.9 million) primarily driven through by the signing fee ensuing from the Kappa® licensing agreement inked in respect of the South Korean market;
  • EBITDA was €22.8 million at FY2013 year-end, pushing strongly ahead (€10.9 million, or +91.2 percent) from the €11.9 million figure reported the year before;
  • EBIT was €16.7 million, before provisioning set aside in the amount €4.5 million to cover the organizational reshaping in progress at the Italian investees, with a keen eye steered toward enhancing the revenue-producing variables. On a net basis, EBIT at FY2013 year-end came to €12.2 million, or up 144 percent from the €5 million figure reported the year before;
  • Pre-tax profit was €8.4 million at FY2013 year-end, or more than fivefold more than the year before (€1.6 million);
  • Scoring further improvement, Group financial indebtedness retreated to €53.1 million at FY2013 year-end (FY2012 year-end: €61.2 million), after financing over the course of the year investing activities in the amount of €8 million or more, long-term loan repayments in the amount of €4.5 million, and treasury share purchases in the amount of €300 thousand;
  • Working capital management also positive for the Italian investees, with downsized inventory and trade receivables, notwithstanding bolt-on sales volumes;
  • The net debt/equity ratio, including therein proprietary property landed mortgages, was 0.79 at FY2013 year-end (FY2012 year-end: 0.97). As always positive the net financial position reported by the parent company (€30.4 million).

FY2013 KEY ACTIVITIES AND EVENTS AT A GLANCE

International commercial milestones passed

Briskly carried forward by the Group over the course of FY2013 was the strategy of investing and development behind its bolder route to market across the international landscape, orchestrated around stretching out the Group’s strategic headroom, particularly in those fast-growth markets where the BasicNet brands can better seize the opportunities for growth as and when they arise. Other than assuring adequate royalty and sourcing commission income streams, accompanying all of this were meaningful marketing arrangements, ringed around enhancing Brand visibility. Inked in lockstep were all-new licensing agreements particularly for the Superga® and K-Way® brands, which continue to stir exciting acclaim both abroad or otherwise. Also inked were all-new and meaningful international technical sponsorships designed toward supporting the Kappa® brand’s commercial thrust.

The Italian market

Fine-tuned over the course of 2H2013 were certain processes of the activities carried out in Italy (purchasing, value proposition, logistics, and store rightsizing) in a design to enhance profitability variables, as already resonating positively particularly in terms of recovering or improving margin returns, in lockstep with bolt-on commercial growth, notwithstanding the challenging market backdrop..

Brands

Settled definitely by way of attendant consequence of the arrangements agreed upon at end July was the litigation arising from the K-Way® trademark deed of acquisition, signed in 2004 with Formula Sport Group S.r.l., in return for an additional €2.2 million recognized in respect of the trademark acquisition purchase price consideration previously paid.