Prada closed the latest financial year with record results ahead of an initial public offering that could be held in June or in the Fall. The chief executive, Patrizio Bertelli, said the company was assessing a good time for an IPO; a decision is expected in the coming weeks.
The company is estimated to be worth €4.0 billion to €5.0 billion. Prada previously attempted a listing on the Milan stock exchange but dropped the project in 2002 because of adverse market conditions following the burst of the internet bubble. At these levels of market capitalization, Prada would be worth more than 12 times its operating profit before amortization and depreciation (EBITDA).
For the fiscal year ended last Jan. 31, the Italian luxury goods group reports a 33.9 percent jump in EBITDA to €316 million, beating the average growth of 29 percent booked in the past three years. Earnings before interest and tax (EBIT) were up by 53.3 percent at €239.7 million and net profits soared by 65.8 percent to €126.8 million. Net debt fell to €507.5 million at the end of 2007 from €549.1 million a year earlier.
The group’s consolidated sales rose by 14.1 percent to €1.661 billion. On a currency-neutral basis and using the same consolidation perimeter, sales rose by 18.8 percent. In May 2007, Prada started consolidating Church’s and in July it sold the brand Azzedine Alaïa.
The Prada brand booked sales of €1.343 billion for the year, up by 10.8 percent at actual currency rates and up by 15.5 percent at constant rates. The Miu Miu brand enjoyed a real boom, raising sales by 43.3 percent to €223 million, up 50.1 percent at constant rates. Revenues also grew strongly at Car Shoe, rising to €25.8 million from €18.2 million, while Church’s contributed €44.2 million in sales in the eight months it was consolidated.
By region, the Prada group achieved 25 percent of its sales in Italy, 26 percent in other European countries, 20 percent in North America, 10 percent in Japan and 16 percent in Asia Pacific. Revenues grew by 41.9 percent in the Asia-Pacific region. At constant currency rates, the increase reached 53.1 percent in 2007. In North America sales rose by 10.8 percent in euros and by 20.8 percent in dollars. In Japan, sales were up by 12.9 percent in yen. In Europe, growth reached 23.9 percent at actual exchange rates.
Leathergoods and other accessories represented 40 percent of total sales, clothing 31 percent and footwear 28 percent. The group’s retail network comprised 211 directly operated stores at the end of January, and they enjoyed a 19.1 percent surge in revenues to €833 million. The turnover from royalties rose by 56.3 percent to €46.4 million, with eyewear contributing €31.7 million, up by 24.2 percent.