The Belgian group’s gross margin improved by 120 basis points to 50.3 percent of sales, and earnings before interest, taxes, depreciation and amortization (EBITDA) dropped by 9.6 percent to €28.2 million. The operating result (EBIT) was down by 5.2 percent to €18.8 million.
Brantano reported a net profit of €7.1 million for 2005, as compared to €3.4 million the year before, as the losses of the operations discontinued in Denmark and the Netherlands fell by 44.5 percent to €3.4 million. The pre-tax margin on continuing activities improved from 3.0 to 3.5 percent, and the termination of Brantano’s Danish activities will not impact the 2006 results.
Higher leases in the UK and higher utility charges weighed on the results. The gross margin improved from 49.1 to 50.3 percent, thanks to better purchasing processes and better stock management, but the operating margin before amortization and depreciation (EBITDA) declined from 9.7 to 9.3 percent, while the margin before interest and tax (EBIT) remained stable at 6.2 percent after certain gains on real estate management. These results declined in absolute terms, as the turnover fell by 5.7 percent to €304.1 million because of the previously reported store closures in Denmark and Holland. Excluding these two countries, sales increased by 2.1 percent in euros and by 2.6 percent in local currencies.
In the UK, Brantano opened 10 shops during the 2005 year and closed two. The group opened six new locations in the Middle East, and made no openings or closures in Belgium or Luxembourg. At the end of the year, the group counted 280 doors. In 2006, Brantano anticipates opening five stores in the UK and two more in Belgium, and expects flat operating results on consolidated annual turnover of €314 million.