BasicNet registered aggregate revenues from its direct sales and its licensees around the world of €209 million in the first half ended June 30 for all its brands - Kappa, Robe di Kappa, Superga, K-Way, Lanzera, AnziBesson, Jesus Jeans and Sabelt. At constant exchange rates, aggregate sales stood at €214 million, marginally up from €212 million in the six months ended June 30, 2012. Net profit was €2.3 million, up from €1.4 million in the first half of 2012.
Activities concentrated in the first half of 2013 on international development, especially in emerging markets, with several new and renewed licensing agreements in various countries. In this framework, the group benefited from an exceptional $12 million signing fee related to the renewal of the licensing deal with its South Korean licensee for the Kappa and Robe di Kappa brands.
The best performances in the first half came from the company's American licensees, with revenues up by 37.3 percent, primarily as a result of intense commercial efforts in the American market last year. Licensees in the Middle East and Africa also posted a positive performance in the first half of 2013, with revenues up by 8.7 percent against the same period last year. Revenues from European licensees declined to €146 million, as compared to €149 million in the first half of 2012, due to the challenging macroeconomic environment in the continent and the ending of certain sponsorship contracts, which resulted in lower sales of related merchandise, and the shutdown of the JJB Sports retail chain in England, resulting in lower sales in that territory. Revenues from domestic licensees grew by 1 percent, despite the negative consumption trend in Italy.
Consolidated sales, comprising direct sales primarily realized in Italy and revenues from licenses, grew to €57.3 million from €56.9 million in the first half of 2012, despite the ongoing crisis in the country and adverse weather conditions in April and May, which postponed the start of spring sales. The number of stores was down to 312 at June 30, 2013, compared with a total of 319 stores at the end of the first quarter.
Gross margin as a percentage of sales in the first half was 37.5 percent, as compared to 37.7 percent in the first half of 2012. The gross margin widened in the second quarter to 45.7 percent, up from 32.4 percent in the previous quarter, primarily due to seasonality and the first effects of new steps undertaken by the group to enhance product profitability. The company's operating income increased to €13.7 million before amortization (Ebitda) in the first half of 2013, marking a robust increase from the €6.9 million level reached in the year-ago period. Operating income before interest (Ebit) was €6.3 million, a 60 percent increase as compared to the first half of last year.
Income from royalties and commissions declined to €18.4 million, compared with €20.6 million in the first half of 2012, mainly reflecting the weak performance of European licensees.
During the first half of 2013, BasicNet signed new licensing agreements for Argentina and Uruguay, Tunisia, Belgium, and for Sweden, Norway and Denmark. The group also extended for three more years its distribution agreement in Vietnam, while new distribution agreements were signed for the K-Way brand in France and Belgium.
The company did not give any forecasts for the rest of the year, due to the persistence of challenging and uncertain market conditions in some European markets, especially in Italy, although it said that results delivered in the first half might set a positive tone for the remainder of the year.
