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Author: Alan LittleDate: 2021-06-18

Dr. Martens (DOCS) -12% as IPO costs hit pre-tax profits

Dr. Martens (DOCS) shares slumped 12% in London on Thursday after the bootmaker underwhelmed investors with its first post-IPO report as pre-tax profits nosedived to £70.9bn.

Dr. Martens went public back in January in a floatation that valued the company at £3.7bn, but an £80.5m charge related to its market debut hit the bottom line as profits slumped 30% year over year.

There was better news in the form of a 15% jump in revenue to £773m as the company’s focus on digital sales paid off amid store closures forced by the pandemic.

Chief executive Kenny Wilson said that retail had been “severely impacted” during the last 12 months but that its e-commerce drive helped that channel to grow 73%.

In a statement, he added: “Whilst the global trading environment remains uncertain, the strength of our iconic global brand means we look to the future with confidence.”

Dr. Martens performed well in overseas markets as sales grew 46% in China and 17% in Europe and the Americas.

Despite retail challenges, 18 new stores were opened, including a first flagship location in Rome, and there are plans for 25 more before the end of the current financial year.

In the UK, three stores were closed, bringing its physical footprint to 34 stores.

Dr. Martens said that the guidance included in the prospectus for its IPO had not changed, which AJ Bell financial analyst Danni Hewson noted might be a “disappointment” for investors.

Meanwhile, Peel Hunt analysts revealed expectations for a 17% spike in sales in 2022 and EBITDA to rise 15% to £257m.

There wasn’t much enthusiasm for DOCS on Thursday as shares tumbled 11.47% to 438.20p.


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