REG - Burberry Group PLC - Burberry Preliminary Results
15/05/2024 07:00
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RNS Number : 4466O Burberry Group PLC 15 May 2024
15 May 2024
BURBERRY GROUP PLC
PRELIMINARY RESULTS FOR 52 WEEKS ENDED 30 MARCH 2024
"Executing our plan against a backdrop of slowing luxury demand has been
challenging. While our FY24 financial results underperformed our original
expectations, we have made good progress refocusing our brand image, evolving
our product and strengthening distribution while delivering operational
improvements. We are using what we have learned over the past year to finetune
our approach, while adapting to the external environment. We remain confident
in our strategy to realise Burberry's potential as the Modern British Luxury
brand and in our ability to successfully navigate this period."
- Jonathan Akeroyd, Chief Executive Officer
Period ended 52 weeks ended 52 weeks ended YoY % change YoY % change
£ million 30 March 2024 1 April 2023 Reported FX CER
Revenue 2,968 3,094 (4) flat
Retail comparable store sales* -1% 7%
Adjusted operating profit* 418 634 (34) (25)
Adjusted operating profit margin* 14.1% 20.5% (640bps) (500bps)
Adjusted diluted EPS (pence)* 73.9 122.5 (40) (30)
Reported operating profit 418 657 (36)
Reported operating profit margin 14.1% 21.2% (710bps)
Reported diluted EPS (pence) 73.9 126.3 (41)
Free cash flow* 63 393 (84)
Proposed dividend (pence) 61.0 61.0 flat
*See page 13 for definitions of alternative performance measures
Comparable store sales by region*
vs LY Group Asia Pacific* EMEIA Americas
Q4 -12% -17% -3% -12%
FY24 -1% +3% +4% -12%
*See page 5 for further detail including split of Asia Pacific
Financial performance in FY24
· Revenue flat at CER and -4% at reported
· Comparable store sales -1% with robust H1 up +10% offset by a
challenging H2 -8%
· Adjusted operating profit fell -25% CER and reported -34% with
margins 15.5% and 14.1% respectively
· Free cash flow £63m with £208m capex mainly on new or
refurbished stores
· £400m share buyback completed in the year
· Full year dividend of 61.0p proposed
Strategic progress in FY24
· Refocused storytelling around Modern British Luxury; improved
brand perception; and double-digit growth in elite customer numbers and spend
· Elevated aesthetic and quality of seasonal offer; begun to
reinvigorate larger, core collections
· Strengthened distribution network; more than 50% of stores now
new or refurbished
· Reconfigured supply chain to new creative vision; improved
product availability on core replenishment lines and strengthened
manufacturing capabilities; continued delivery against sustainability roadmap
Priorities for FY25
· Refine brand expression and increase product focus in
storytelling; and strengthen how and where we engage new and existing clients
to deepen connection with them
· Build out full product offer, ensuring balance between seasonal
and core collections
· Enhance retail store experience and focus on conversion; elevate
customer experience online; and rationalise wholesale channel in EMEIA to
further increase control of distribution
· Improve operational delivery; drive cost efficiencies; and
advance sustainability agenda
OUTLOOK
In the context of a still uncertain external environment, we expect H1 to
remain challenging. We expect to see the benefit of the actions we are taking
from H2. Wholesale revenue is estimated to fall by around -25% in the first
half as we increase control of distribution. We will continue to balance
investment in consumer facing areas with disciplined cost control to support
our growth ambition. We have identified cost savings to enable us to offset
the impact of inflation in the second half. Based on foreign exchange rates
effective as of 25 April 2024, we now expect a currency headwind of c.£30m to
revenue and c.£20m to adjusted operating profit in FY25.
All metrics and commentary in the Financial Review exclude adjusting items
unless stated otherwise. The following alternative performance measures are
presented in this announcement: CER, adjusted profit measures, comparable
sales, free cash flow, cash conversion, adjusted EBITDA and net debt. The
definitions of these alternative performance measures are in the Appendix on
page 13.
Certain financial data within this announcement have been rounded. Growth
rates and ratios are calculated on unrounded numbers.
The financial information for the 52 weeks ended 30 March 2024 and 1 April
2023 contained in this document does not constitute statutory accounts as
defined in section 435 of the Companies Act 2006. The financial information
for the 52 weeks ended 30 March 2024 and 1 April 2023 has been extracted from
the consolidated financial statements of Burberry Group plc for the 52 weeks
ending 30 March 2024 which have been approved by the directors on 14 May 2024
and will be delivered to the Registrar of Companies in due course. The
auditor's report on those financial statements was unqualified and did not
contain a statement under section 498 of the Companies Act 2006.
Enquiries
Investors and analysts 020 3367 4458
Julian Easthope VP, Investor Relations julian.easthope@burberry.com (mailto:julian.easthope@burberry.com)
Media 020 3367 3764
Andrew Roberts SVP, Corporate Relations and Engagement andrew.roberts@burberry.com
· There will be a virtual presentation for investors and
analysts today at 9.30am (UK time) that can be viewed live on the Burberry
Group plc website www.burberryplc.com (http://www.burberryplc.com) , you can
also click here (https://streamstudio.world-television.com/1349-2475-39681/en)
to register.
· The supporting slides and an indexed replay will be available
on the website later in the day
· Burberry will issue its First Quarter Trading Update on 19
July 2024
· The AGM will be held on 16 July 2024
Certain statements made in this announcement are forward-looking statements.
Such statements are based on current expectations and are subject to a number
of risks and uncertainties that could cause actual results to differ
materially from any expected future results in forward-looking statements.
Burberry Group plc undertakes no obligation to update these forward-looking
statements and will not publicly release any revisions it may make to these
forward-looking statements that may result from events or circumstances
arising after the date of this document. Nothing in this announcement should
be construed as a profit forecast. All persons, wherever located, should
consult any additional disclosures that Burberry Group plc may make in any
regulatory announcements or documents which it publishes. All persons,
wherever located, should take note of these disclosures. This announcement
does not constitute an invitation to underwrite, subscribe for or otherwise
acquire or dispose of any Burberry Group plc shares, in the UK, or in the US,
or under the US Securities Act 1933 or in any other jurisdiction.
Burberry is listed on the London Stock Exchange (BRBY.L) and is a constituent
of the FTSE 100 index. ADR symbol OTC:BURBY.
BURBERRY, the Equestrian Knight Device, the Burberry Check, and the Thomas
Burberry Monogram and Print are trademarks belonging to Burberry.
www.burberryplc.com
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LinkedIn: Burberry
SUMMARY INCOME STATEMENT
Period ended 52 weeks ended 52 weeks ended YoY % change YoY % change
£ million 30 March 1 April Reported FX CER
2024 2023
Revenue 2,968 3,094 (4) flat
Cost of sales* (959) (912) 5 6
Gross profit* 2,009 2,182 (8) (3)
Gross margin* 67.7% 70.5% (280bps) (170bps)
Net operating expenses* (1,591) (1,548) 3 7
Net opex as a % of sales* 53.6% 50.0% 360bps 330bps
Adjusted operating profit* 418 634 (34) (25)
Adjusted operating profit margin* 14.1% 20.5% (640bps) (500bps)
Adjusting operating items - 23
Operating profit 418 657 (36)
Operating profit margin 14.1% 21.2% (710bps)
Net finance charge(**) (35) (23) 52
Profit before taxation 383 634 (40)
Taxation (112) (142) (21)
Non-controlling interest (1) (2)
Attributable profit 270 490 (45)
Adjusted profit before taxation* 383 613 (37) (28)
Adjusted diluted EPS (pence)* 73.9 122.5 (40) (30)
Diluted EPS (pence) 73.9 126.3 (41)
Weighted average number of diluted ordinary shares (millions) 366.2 388.0 (6)
*Excludes adjusting items. All items below adjusting operating items on a
reported basis unless otherwise stated
For detail, see Appendix.
** Includes adjusting finance charge of £nil (FY23: £2m)
FINANCIAL PERFORMANCE
Revenue by channel
Period ended 52 weeks ended 52 weeks ended YoY % change YoY % change
£ million 30 March 1 April Reported FX CER
2024 2023
Retail 2,400 2,501 (4) 1
Comparable store sales growth (1%) 7%
Wholesale 506 543 (7) (5)
Licensing 62 50 23 23
Revenue 2,968 3,094 (4) flat
· FY24 retail sales grew +1% at CER; down -4% reported
· Impact of space +2% with comparable store sales -1%
Comparable store sales growth by region
FY24 vs LY
Q1 Q2 H1 Q3 Q4 H2 FY
Group 18% 1% 10% (4%) (12%) (8%) (1%)
Asia Pacific 36% 2% 18% 3% (17%) (7%) 3%
EMEIA 17% 10% 14% (5%) (3%) (4%) 4%
Americas (8%) (10%) (9%) (15%) (12%) (14%) (12%)
Asia Pacific comparable store sales grew +3% in FY24. Q4 fell -17% on tough
comparatives with locals challenged across the region.
· Mainland China increased +2% in the year and fell -19% Q4. The
Mainland Chinese customer group fell -12% in the quarter vs last year, with
tourism accounting for almost a quarter of the customer group sales globally
· South Korea declined -8% in the year. Q4 fell -17% with the customer
group down -12%. South Koreans purchasing abroad was up double-digits, with
tourist spend mainly in EMEIA and Japan
· Japan saw strong growth up +25% in the year. Q4 was up +18%,
supported by tourist spend which more than doubled, accounting for half of
region's sales in the quarter
· South Asia Pacific rose +4% in the year. Q4 fell -24% driven by a
declining local customer not fully offset by tourist spend up a low
single-digit percentage compared with strong performance in FY23.
EMEIA comparable store sales rose +4% in FY24 but -3% Q4. The region benefited
from strong tourist growth but with some pressure from local consumer spending
that fell low double digits in the fourth quarter.
Americas comparable store sales fell -12% in both the year and in Q4 where we
are continuing to see a relatively broad-based decline in the region across
our local customers.
By product
· We saw a strong performance from outerwear that grew by a high single
digit percentage in the year, led by Heritage rainwear
· Scarves grew by a double digit percentage
· Leather goods performed broadly in line with the group average
· Ready-to-wear for both men's and women's landed below the group
average, declining by a mid-single digit percentage in the year.
Store footprint
The transformation of our distribution network continued during the year with
an additional 79 new or refurbished stores, taking over 50% of the network now
upgraded to the refurbished concept.
Wholesale
· Wholesale revenue declined -5% at CER (-7% at reported rates) due to
pressure in the Americas.
Licensing
· Licensing revenue grew +23% at both CER and reported exchange rates.
OPERATING PROFIT ANALYSIS
Adjusted operating profit
Period ended 52 weeks ended 52 weeks ended YoY % change YoY % change
£ million 30 March 2024 1 April 2023 Reported FX CER
Revenue 2,968 3,094 (4) flat
Cost of sales* (959) (912) 5 6
Gross profit* 2,009 2,182 (8) (3)
Gross margin %* 67.7% 70.5% (280bps) (170bps)
Net operating expenses* (1,591) (1,548) 3 7
Net operating expenses as a % of sales* 53.6% 50.0% 360bps 330bps
Adjusted operating profit* 418 634 (34) (25)
Adjusted operating profit margin %* 14.1% 20.5% (640bps) (500bps)
*Excludes adjusting items
Adjusted operating profit declined -25% at CER and -34% at reported rates with
the margin down -500bps and -640bps respectively:
· Gross margin declined by -170bps at CER and -280bps at reported rates
following increased stock provisions and investment in product that was not
fully offset by pricing. The remaining movements related to regional and
channel mix effects as well as a benefit from transportation costs that
broadly netted off
· Adjusted net operating expenses rose by +7% at CER primarily due to
property costs from depreciation on the refurbishment programme, impairments,
rent increases and utility cost increases
· Adjusted operating profit came in at £418m including a £60m FX
headwind in FY24.
ADJUSTING ITEMS(*)
There were no adjusting items in FY24 (FY23: £21m net credit).
Period ended 52 weeks ended 52 weeks ended
£ million 30 March 1 April
2024
2023
The impact of COVID-19
Inventory provisions - 1
Rent concessions - 13
Store impairments - 6
Government grants - 2
COVID-19 adjusting items** - 22
Restructuring costs - (16)
Profit on sale of property - 19
Revaluation of deferred consideration liability - (2)
Adjusting operating items - 23
Adjusting financing items - (2)
Adjusting items - 21
*For more details see note 6 of the Financial Statements
**Includes £nil (FY23: £1m credit) that has been recognised through COGS
ADJUSTED PROFIT BEFORE TAX*
After an adjusted net finance charge of £35m (FY23: £21m), adjusted profit
before tax was £383m (FY23: £613m).
*For detail on adjusting items see note 6 of the Financial Statements
TAXATION*
The effective tax rate on adjusted profit increased to 29.2% (FY23: 22.2%)
primarily due to the increase in the UK corporation tax rate. The reported tax
rate on FY24 profit before taxation was also 29.2% (FY23: 22.4%).
*For detail see note 9 of the Financial Statements
CASH FLOW
Represented statement of cash flows
The following table is a representation of the cash flows.
Period ended 52 weeks ended 52 weeks ended
£ million 30 March 1 April
2024
2023
Adjusted operating profit 418 634
Depreciation and amortisation 379 344
Working capital (166) (76)
Other including adjusting items 34 10
Cash generated from operating activities 665 912
Payment of lease principal and related cash flows (235) (210)
Capital expenditure (208) (179)
Proceeds from disposal of non-current assets - 32
Interest (20) (22)
Tax (139) (140)
Free cash flow* 63 393
Free cash inflow was £63m in the year (FY23: £393m). The major components
were:
· Cash generated from operating activities decreased by £247m to
£665m from £912m due primarily to:
o A £216m reduction in adjusted operating profit and
o A working capital outflow of £166m. This was a £90m greater outflow than
last year (FY23: £76m outflow), mainly due to higher inventory following
weaker than expected sell through
· Capital expenditure of £208m (FY23: £179m)
· Proceeds from disposal of non-current assets were £nil (FY23:
£32m)
· Tax cash of £139m, a decrease of £1m compared to the prior year
with lower profitability offset by the higher UK corporation tax rate.
Cash net of overdrafts on 30 March 2024 was £362m compared to £961m on 1
April 2023. On 30 March 2024 borrowings were £299m from the bond issue
leaving cash net of overdrafts and borrowings of £63m (1 April 2023: £663m).
With lease liabilities of £1,188m, net debt in the period was £1,125m (1
April 2023: £460m).
Net Debt/Adjusted EBITDA was 1.4x, above our target range of 0.5x to 1.0x. The
increase in leverage from 0.5x at 1 April 2023 has been driven by lower
profitability, working capital outflow and the share buyback programme.
Period ended 52 weeks ended 52 weeks ended
£ million 30 March 1 April
2024
2023
Adjusted EBITDA - rolling 12 months 797 975
Cash net of overdrafts (362) (961)
Bond 299 298
Lease debt 1,188 1,123
Net Debt* 1,125 460
Net Debt/Adjusted EBITDA 1.4x 0.5x
*For a definition of free cash flow and net debt see page 14.
APPENDIX
Detailed guidance for FY25
Item Financial impact
Impact of retail space on revenues Space is expected to be broadly stable in FY25.
Wholesale revenue Wholesale is expected to decline by around 25% in H1 FY25.
Tax The adjusted effective tax rate is expected to be around 27%-28%.
Capex Capex is expected to be around £150m.
Currency At 25 April 2024 spot rates, the impact of year-on-year exchange rate
movements is expected to be a c.£30m headwind on revenue and c.£20m headwind
on adjusted operating profit.
Dividend Final dividend per share proposed at 42.7p and with the interim of 18.3p gives
a combined full year dividend per share of 61.0p - in line with FY23.
Note: Guidance based on FY24 CER
Retail/wholesale revenue by destination*
Period ended 52 weeks ended 30 March 52 weeks ended 1 April YoY % change
£ million 2024 2023 Reported FX CER
Asia Pacific (93% retail)* 1,286 1,297 (1) 7
EMEIA (68% retail)* 1,017 1,004 1 2
Americas (85% retail)* 603 743 (19) (16)
Total 2,906 3,044 (5) flat
*Mix based on FY24
Retail/wholesale revenue by product division
Period ended 52 weeks ended 30 March 52 weeks % change
ended 1 April
£ million 2024 2023 Reported FX CER
Accessories 1,055 1,125 (6) (2)
Women's 860 867 (1) 4
Men's 842 868 (3) 1
Children's & other 149 184 (19) (15)
Total 2,906 3,044 (5) flat
Store portfolio
Directly operated stores
Stores Concessions Outlets Total Franchise stores
At 1 April 2023 219 138 56 413 35
Additions 22 8 2 32 1
Closures (14) (7) (2) (23) (3)
At 30 March 2024 227 139 56 422 33
Store portfolio by region*
Directly operated stores
Stores Concessions Outlets Total Franchise stores
At 30 March 2024
Asia Pacific 122 94 23 239 9
EMEIA 46 36 18 100 24
Americas 59 9 15 83 -
Total 227 139 56 422 33
*Excludes the impact of pop up stores
Adjusted operating profit* 52 weeks 52 weeks % change % change
Period ended ended 30 March ended 1 April Reported FX CER
£ millions 2024 2023
Retail/wholesale 359 587 (39) (29)
Licensing 59 47 25 25
Adjusted operating profit 418 634 (34) (25)
Adjusted operating profit margin 14.1% 20.5% (640bps) (500bps)
*For additional detail on adjusting items see note 6 of the Financial
Statements
Exchange rates
Spot rates Average effective exchange rates
25 April FY24 FY23
£1= 2024
Euro 1.17 1.16 1.16
US Dollar 1.25 1.26 1.20
Chinese Yuan Renminbi 9.06 9.01 8.27
Hong Kong Dollar 9.80 9.84 9.43
Korean Won 1,720 1,657 1,577
Japanese Yen 195 182 163
Profit before tax reconciliation
Period ended 52 weeks ended 52 weeks ended % change % change
£ million 30 March 1 April Reported FX CER
2024 2023
Adjusted profit before tax 383 613 (37) (28)
Adjusting items*
COVID-19 related items - 22
Restructuring costs - (16)
Profit on sale of property - 19
Revaluation of deferred consideration liability - (2)
Adjusting financing items - (2)
Profit before tax 383 634 (40)
*For additional detail on adjusting items see note 6 of the Financial
Statements
Alternative performance measures
Alternative performance measures (APMs) are non-GAAP measures. The Board uses
the following APMs to describe the Group's financial performance and for
internal budgeting, performance monitoring, management remuneration target
setting and external reporting purposes.
APM Description and purpose GAAP measure reconciled to
Constant Exchange Rates (CER) This measure removes the effect of changes in exchange rates compared to the Results at reported rates
prior period. The constant exchange rate incorporates both the impact of the
movement in exchange rates on the translation of overseas subsidiaries'
results and also on foreign currency procurement and sales through the Group's
UK supply chain.
Comparable sales The year-on-year change in sales from stores trading over equivalent time Retail Revenue:
periods and measured at constant foreign exchange rates. It also includes
online sales. This measure is used to strip out the impact of permanent store
openings and closings, or those closures relating to refurbishments, allowing
Period ended 52 weeks ended 30 March 52 weeks ended 1 April
a comparison of equivalent store performance against the prior period.
YoY% 2024 2023
Comparable sales (1%) 7%
Change in space 2% (1%)
CER retail 1% 6%
53(rd) week - (2%)
FX (5%) 6%
Retail revenue (4%) 10%
Adjusted Profit Adjusted profit measures are presented to provide additional consideration of Reported Profit:
the underlying performance of the Group's ongoing business. These measures
remove the impact of those items which should be excluded to provide a A reconciliation of reported profit before tax to adjusted profit before tax
consistent and comparable view of performance. and the Group's accounting policy for adjusted profit before tax are set out
in the financial statements.
Adjusted Profit
Adjusted profit measures are presented to provide additional consideration of
the underlying performance of the Group's ongoing business. These measures
remove the impact of those items which should be excluded to provide a
consistent and comparable view of performance.
Reported Profit:
A reconciliation of reported profit before tax to adjusted profit before tax
and the Group's accounting policy for adjusted profit before tax are set out
in the financial statements.
Free Cash Flow Free cash flow is defined as net cash generated from operating activities less Net cash generated from operating activities:
capital expenditure plus cash inflows from disposal of fixed assets and
including cash outflows for lease principal payments and other lease related
items.
Period ended 52 weeks ended 52 weeks ended
£m 30 March 2024 1 April 2023
Net cash generated from operating activities 506 750
Capex (208) (179)
Lease principal and related cash flows (235) (210)
Proceeds from disposal of non-current assets - 32
Free cash flow 63 393
Cash Conversion Cash conversion is defined as free cash flow pre-tax/adjusted profit before Net cash generated from operating activities:
tax. It provides a measure of the Group's effectiveness in converting its Period ended 52 weeks 52 weeks ended
profit into cash.
£m ended 1 April 2023
30 March
2024
Free cash flow 63 393
Tax paid 139 140
Free cash flow before tax 202 533
Adjusted profit before tax 383 613
Cash conversion 53% 87%
Net Debt Net debt is defined as the lease liability recognised on the balance sheet Cash net of overdrafts:
plus borrowings less cash net of overdrafts.
Period ended As at As at
£m 30 March 1 April
2024 2023
Cash net of overdrafts 362 961
Lease liability (1,188) (1,123)
Borrowings (299) (298)
Net debt (1,125) (460)
Adjusted EBITDA Adjusted EBITDA is defined as operating profit, excluding adjusting operating Reconciliation from operating profit to adjusted EBITDA:
items, depreciation of property, plant and equipment, depreciation of right of
Period ended 52 weeks ended 52 weeks ended
use assets and amortisation of intangible assets. Any depreciation or
amortisation included in adjusting operating items are not double counted.
Adjusted EBITDA is shown for the calculation of Net Debt/Adjusted EBITDA for
our leverage ratios. £m 30 March 1 April
2024 2023
Operating profit 418 657
Adjusting operating items - (23)
Amortisation of intangible assets 42 37
Depreciation of property, plant and equipment 103 95
Depreciation of right-of-use assets* 234 209
Adjusted EBITDA 797 975
*Excludes £nil depreciation on right-of-use assets in adjusting items (FY23
£3m).
Cash Conversion
Cash conversion is defined as free cash flow pre-tax/adjusted profit before
tax. It provides a measure of the Group's effectiveness in converting its
profit into cash.
Net cash generated from operating activities:
Period ended 52 weeks 52 weeks ended
£m ended 1 April 2023
30 March
2024
Free cash flow 63 393
Tax paid 139 140
Free cash flow before tax 202 533
Adjusted profit before tax 383 613
Cash conversion 53% 87%
Net Debt
Net debt is defined as the lease liability recognised on the balance sheet
plus borrowings less cash net of overdrafts.
Cash net of overdrafts:
Period ended As at As at
£m 30 March 1 April
2024 2023
Cash net of overdrafts 362 961
Lease liability (1,188) (1,123)
Borrowings (299) (298)
Net debt (1,125) (460)
Adjusted EBITDA
Adjusted EBITDA is defined as operating profit, excluding adjusting operating
items, depreciation of property, plant and equipment, depreciation of right of
use assets and amortisation of intangible assets. Any depreciation or
amortisation included in adjusting operating items are not double counted.
Adjusted EBITDA is shown for the calculation of Net Debt/Adjusted EBITDA for
our leverage ratios.
Reconciliation from operating profit to adjusted EBITDA:
Period ended 52 weeks ended 52 weeks ended
£m 30 March 1 April
2024 2023
Operating profit 418 657
Adjusting operating items - (23)
Amortisation of intangible assets 42 37
Depreciation of property, plant and equipment 103 95
Depreciation of right-of-use assets* 234 209
Adjusted EBITDA 797 975
*Excludes £nil depreciation on right-of-use assets in adjusting items (FY23
£3m).
Group Income Statement
Note 52 weeks to 52 weeks to
30 March
1 April
2024
2023
£m
£m
Revenue 4 2,968 3,094
Cost of sales (959) (911)
Gross profit 2,009 2,183
Operating expenses (1,604) (1,572)
Other operating income 13 46
Net operating expenses (1,591) (1,526)
Operating profit 418 657
Financing
Finance income 31 21
Finance expense (66) (42)
Other financing charge - (2)
Net finance expense 7 (35) (23)
Profit before taxation 5 383 634
Taxation 8 (112) (142)
Profit for the year 271 492
Attributable to:
Owners of the Company 270 490
Non-controlling interest 1 2
Profit for the year 271 492
Earnings per share
Basic 9 74.1p 126.9p
Diluted 9 73.9p 126.3p
£m £m
Reconciliation of adjusted profit before taxation:
Profit before taxation 383 634
Adjusting operating items:
Cost of sales (income) 6 - (1)
Net operating expenses (income) 6 - (22)
Adjusting financing items 6 - 2
Adjusted profit before taxation - non-GAAP measure 383 613
Adjusted earnings per share - non-GAAP measure
Basic 9 74.1p 123.1p
Diluted 9 73.9p 122.5p
Dividends per share
Interim 10 18.3p 16.5p
Proposed final (not recognised as a liability at 30 March/1 April) 10 42.7p 44.5p
Group Statement of Comprehensive Income
Note 52 weeks to 52 weeks to
30 March
1 April
2024
2023
£m
£m
Profit for the year 271 492
Other comprehensive income(1):
Cash flow hedges 21 (3) 1
Foreign currency translation differences 21 (34) 14
Tax on other comprehensive income 1 (1)
Other comprehensive (loss)/income for the year, net of tax (36) 14
Total comprehensive income for the year 235 506
Total comprehensive income attributable to:
Owners of the Company 234 504
Non-controlling interest 1 2
235 506
1. All items included in other comprehensive income may subsequently be
reclassified to profit and loss in a future period.
Group Balance Sheet
Note As at As at
30 March
1 April
2024
2023
£m
£m
ASSETS
Non-current assets
Intangible assets 11 267 248
Property, plant and equipment 12 406 376
Right-of-use assets 13 1,013 950
Deferred tax assets 208 197
Trade and other receivables 14 52 52
1,946 1,823
Current assets
Inventories 15 507 447
Trade and other receivables 14 340 307
Derivative financial assets 2 7
Income tax receivables 122 76
Cash and cash equivalents 16 441 1,026
Assets held for sale 12 12 -
1,424 1,863
Total assets 3,370 3,686
LIABILITIES
Non-current liabilities
Trade and other payables 17 (63) (77)
Lease liabilities 18 (959) (902)
Borrowings 20 (299) (298)
Deferred tax liabilities (1) (1)
Provisions for other liabilities and charges (37) (40)
(1,359) (1,318)
Current liabilities
Trade and other payables 17 (439) (477)
Bank overdrafts 19 (79) (65)
Lease liabilities 18 (229) (221)
Derivative financial liabilities (4) (1)
Income tax liabilities (86) (43)
Provisions for other liabilities and charges (20) (22)
(857) (829)
Total liabilities (2,216) (2,147)
Net assets 1,154 1,539
EQUITY
Capital and reserves attributable to owners of the Company
Ordinary share capital 21 - -
Share premium account 231 230
Capital reserve 21 41 41
Hedging reserve 21 2 4
Foreign currency translation reserve 21 198 232
Retained earnings 675 1,026
Equity attributable to owners of the Company 1,147 1,533
Non-controlling interest in equity 7 6
Total equity 1,154 1,539
Group Statement of Changes in Equity
Attributable to owners
of the Company
Note Ordinary share capital Share premium account Other reserves Retained earnings Total Non-controlling interest Total equity
£m
£m
£m
£m
£m
£m
£m
Balance as at 2 April 2022 - 227 263 1,123 1,613 4 1,617
Profit for the year - - - 490 490 2 492
Other comprehensive income:
Cash flow hedges 21 - - 1 - 1 - 1
Foreign currency translation differences 21 - - 14 - 14 - 14
Tax on other comprehensive income - - (1) - (1) - (1)
Total comprehensive income for the year - - 14 490 504 2 506
Transactions with owners:
Employee share incentive schemes
Equity share awards - - - 19 19 - 19
Tax on share awards - - - 2 2 - 2
Exercise of share options - 3 - - 3 - 3
Purchase of own shares
Share buyback - - - (404) (404) - (404)
Held by ESOP trusts - - - (1) (1) - (1)
Dividends paid in the year - - - (203) (203) - (203)
Balance as at 1 April 2023 - 230 277 1,026 1,533 6 1,539
Profit for the year - - - 270 270 1 271
Other comprehensive income:
Cash flow hedges 21 - - (3) - (3) - (3)
Foreign currency translation differences 21 - - (34) - (34) - (34)
Tax on other comprehensive income - - 1 - 1 - 1
Total comprehensive income for the year - - (36) 270 234 1 235
Transactions with owners:
Employee share incentive schemes
Equity share awards - - - 16 16 - 16
Tax on share awards - - - (2) (2) - (2)
Exercise of share options - 1 - - 1 - 1
Purchase of own shares
Share buyback - - - (402) (402) - (402)
Dividends paid in the year - - - (233) (233) - (233)
Balance as at 30 March 2024 - 231 241 675 1,147 7 1,154
Group Statement of Cash Flows
Note 52 weeks to 52 weeks to
30 March
1 April
2024
2023
£m
£m
Cash flows from operating activities
Profit before taxation 383 634
Adjustments to reconcile profit before taxation to net cash flows:
Amortisation of intangible assets 11 42 37
Depreciation of property, plant and equipment 12 103 95
Depreciation of right-of-use assets 13 234 212
COVID-19-related rent concessions - (13)
Net impairment charge of property, plant and equipment 12 5 2
Net impairment charge of right-of-use assets 13 9 2
Loss/(gain) on disposal of intangible assets and property, plant and equipment 3 (19)
Gain on modification of right-of-use assets (4) (2)
Loss/(gain) on derivative instruments 5 (2)
Charge in respect of employee share incentive schemes 16 19
Net finance expense 35 23
Working capital changes:
Increase in inventories (57) (10)
Increase in receivables (32) (17)
Decrease in payables and provisions (77) (49)
Cash generated from operating activities 665 912
Interest received 32 18
Interest paid (52) (40)
Taxation paid (139) (140)
Net cash generated from operating activities 506 750
Cash flows from investing activities
Purchase of property, plant and equipment (158) (136)
Purchase of intangible assets (50) (43)
Proceeds from sale of property, plant and equipment - 32
Initial direct costs of right-of-use assets (4) -
Payment in respect of acquisition of subsidiary (19) -
Net cash outflow from investing activities (231) (147)
Cash flows from financing activities
Dividends paid in the year 10 (233) (203)
Payment of deferred consideration for acquisition of non-controlling interest 17 - (6)
Payment of lease principal 18 (231) (210)
Issue of ordinary share capital 1 3
Purchase of own shares through share buyback 21 (400) (400)
Purchase of own shares through share buyback - stamp duty and fees 21 (2) (4)
Purchase of own shares by ESOP trusts - (1)
Net cash outflow from financing activities (865) (821)
Net decrease in cash net of overdrafts (590) (218)
Effect of exchange rate changes (9) 2
Cash net of overdrafts at beginning of year 961 1,177
Cash net of overdrafts 362 961
Note As at As at
30 March
1 April
2024
2023
£m
£m
Cash and cash equivalents 16 441 1,026
Bank overdrafts 19 (79) (65)
Cash net of overdrafts 362 961
1. Basis of preparation
The financial information contained within this report has been prepared in
accordance with international accounting standards in conformity with the
requirements of the Companies Act 2006 and International Financial Reporting
Standards adopted pursuant to Regulation (EC) No. 1606/2002 as it applies in
the European Union, IFRS Interpretations Committee (IFRS IC) interpretations
and parts of the Companies Act 2006 applicable to companies reporting under
IFRS. This financial information does not constitute the Burberry Group's (the
Group) Annual Report and Accounts within the meaning of Section 435 of the
Companies Act 2006.
Statutory accounts for the 52 weeks to 1 April 2023 have been filed with the
Registrar of Companies, and those for 2024 will be delivered in due course.
The reports of the auditors on those statutory accounts for the 52 weeks to 1
April 2023 and 52 weeks to 30 March 2024 were unqualified, did not contain an
emphasis of matter paragraph and did not contain a statement under either
section 400(2) or section 498(3) of the Companies Act 2006.
The consolidated financial statements are presented in £m. Financial ratios
are calculated using unrounded numbers.
Going concern
In considering the appropriateness of adopting the going concern basis in
preparing the financial statements, the Directors have assessed the potential
cash generation of the Group. This assessment for any indicators that the
going concern basis of preparation is not appropriate covers the period from
the date of signing the financial statements up to 27 September 2025.
The scenarios considered by the Directors include a severe but plausible
downside scenario reflecting the Group's base plan adjusted for severe but
plausible impacts from the Group's principal risks. This central planning
scenario is informed by a comprehensive review of the macroeconomic scenarios
using third-party projections of macroeconomic data for the luxury fashion
industry . The Group's central planning scenario reflects a balanced
projection aligned to the Group's strategy, a balanced assumption for economic
uncertainty and capital expenditure and dividends in line with the Group's
capital allocation framework.
As a sensitivity, this central planning scenario has been flexed to reflect
the aggregation of severe impacts arising linked to our principal risks which
in total represents a 13% downgrade to revenues in the 18 month period to
September 2025, in comparison to the base case, as well as the associated
consequences for EBITDA and cash. Management consider this represents a severe
but plausible downside scenario appropriate for assessing going concern.
The severe but plausible downside modelled the following risks occurring
simultaneously:
· A severe impact arising from a more severe and prolonged
reduction in the GDP growth assumptions across the markets in which we
operate, combined with a reduction to our global consumer demand arising from
a change in consumer preference compared to our central planning scenario
· An increase in geopolitical tension which reduces GDP growth
assumptions compared to the central planning model
· A significant reputational incident such as negative sentiment
propagated through social media
· The impact of a business interruption event, resulting in a two
week interruption arising from the supply chain impact, and interruption to
one of our channels
· The occurrence of a one-time physical risk relating to climate
change in FY 2024/25 and the materialisation of a severe but plausible ongoing
market risk relating to climate change in line with a scenario reflecting a
2°C global temperature increase compared to pre-industrial levels
· The payment of a settlement arising from a regulatory or
compliance-related matter
· A short-term impact of a 10% weakening in a key non-sterling
currency for the Group before it is recovered through price adjustment
· Repayment of Sustainability Bond without raising new finance
Further mitigating actions within management control would be available under
this scenario, including working capital reduction measures and limiting
capital expenditure, but these were not incorporated into the downside
modelling.
The Directors have also considered the Group's current liquidity and available
facilities. As at 30 March 2024, the Group Balance Sheet reflects cash net of
overdrafts of £362 million. In addition, the Group has access to a £300
million revolving credit facility which matures in July 2026, which is
currently undrawn. The £300 million sustainability bond matures within the
going concern period on 21 September 2025 and the revolving credit facility is
considered to be available to be drawn within the severe but plausible
scenario in order to settle this repayment.
The Group is in compliance with the covenants for the revolving credit
facility, and the borrowings raised via the sustainability bond are not
subject to covenants. Details of cash, overdrafts, borrowings and facilities
are set out in notes 16, 19 and 20 respectively of these financial statements.
Whilst outside of the going concern assessment period, the Group have
considered renewal of the revolving credit facility ahead of maturity in July
2026 and are confident that this will be available.
In all the scenarios assessed, taking into account current liquidity and
available resources and before the inclusion of any mitigating actions within
management control, the Group was able to maintain sufficient liquidity to
continue trading through the going concern period up to 27 September 2025. On
the basis of the assessment performed, the Directors consider it
is appropriate to continue to adopt the going concern basis in preparing the
consolidated financial statements for the 52 weeks ended 30 March 2024.
New standards, amendments and interpretations adopted in the period
A number of new amendments to standards are effective for the financial period
commencing 2 April 2023 but they do not have a material impact on the
financial statements of the Group. Refer to note 8 for further details on the
impact of adoption of amendments to IAS 12 Income taxes.
Standards not yet adopted
Certain new accounting standards and amendments to standards have been
published that are not mandatory for the 52 weeks to 30 March 2024 and have
not been early adopted by the Group. These standards are not expected to have
a material impact on the entity in the current or future reporting periods and
on foreseeable future transactions, apart from IFRS 18 Presentation and
Disclosure in Financial Statements. IFRS 18, which is effective for reporting
periods beginning on or after 1 January 2027, replaces IAS 1 Presentation of
Financial Statements and is expected to impact the presentation of the Group's
primary financial statements. The amendment was issued on 9 April 2024 and the
impact will be communicated in future periods following an assessment by the
Group.
Key sources of estimation uncertainty
Preparation of the consolidated financial statements in conformity with IFRS
requires that management make certain estimates and assumptions that affect
the measurement of reported revenues, expenses, assets and liabilities and the
disclosure of contingent liabilities.
If in the future such estimates and assumptions, which are based on
management's best estimates at the date of the financial statements, deviate
from actual circumstances, the original estimates and assumptions will be
updated as appropriate in the period in which the circumstances change.
Estimates are continually evaluated and are based on historical experience and
other factors, including expectations of future events that are believed to be
reasonable under the circumstances. The key areas where the estimates and
assumptions applied have a significant risk of causing a material adjustment
to the carrying value of assets and liabilities within the next financial
year are discussed below.
Impairment, or reversals of impairment, of property, plant and equipment and
right-of-use assets
Property, plant and equipment and right-of-use assets are reviewed for
impairment if events or changes in circumstances indicate that the carrying
amount may not be recoverable. When a review for impairment is conducted, the
recoverable amount of an asset or a cash generating unit is determined based
on value-in-use calculations prepared using management's best estimates and
assumptions at the time. Refer to notes 12 and 13 for further details of
retail property, plant and equipment, right-of-use assets and impairment
reviews carried out in the period and for sensitivities relating to this key
source of estimation uncertainty.
Inventory provisioning
The Group purchases, manufactures and sells luxury goods and is subject to
changing consumer demands and fashion trends. The recoverability of the cost
of inventories is assessed every reporting period, by considering the expected
net realisable value of inventory compared to its carrying value. Where the
net realisable value is lower than the carrying value, a provision is
recorded. When calculating inventory provisions, management considers the
nature and condition of the inventory, as well as applying assumptions in
respect of anticipated saleability of finished goods and future usage of raw
materials. Refer to note 15 for further details of the carrying value
of inventory and inventory provisions and for sensitivities relating to this
key source of estimation uncertainty.
Uncertain tax positions
In common with many multinational companies, the Group faces tax audits in
jurisdictions around the world in relation to intragroup transactions between
associated entities within the Group. These tax audits are often subject to
inter-government negotiations. The matters under discussion are often complex
and can take many years to resolve.
Tax liabilities are recorded based on management's estimate of either the most
likely amount or the expected value amount depending on which method is
expected to better reflect the resolution of the uncertainty. Given the
inherent uncertainty in assessing tax outcomes, the Group could, in future
periods, experience adjustments to these tax liabilities that have a material
positive or negative effect on the Group's results for a particular period.
Refer to note 8 for further details of management estimates surrounding the
outcome of all matters under dispute or negotiation between governments in
relation to current tax liabilities recognised at 30 March 2024, and for
sensitivities relating to this key source of estimation uncertainty.
Key judgements in applying the Group's accounting policies
Judgements are those decisions made when applying accounting policies which
have a significant impact on the amounts recognised in the Group financial
statements. Key judgements that have a significant impact on the amounts
recognised in the Group financial statements for the 52 weeks to 30 March
2024 and the 52 weeks to 1 April 2023 are as follows:
Where the Group is a lessee, judgement is required in determining the lease
term at initial recognition, and throughout the lease term, where extension or
termination options exist. In such instances, all facts and circumstances that
may create an economic incentive to exercise an extension option, or not
exercise a termination option, have been considered to determine the lease
term. Considerations include, but are not limited to, the period assessed by
management when approving initial investment, together with costs associated
with any termination options or extension options. Extension periods (or
periods after termination options) are only included in the lease term if the
lease is reasonably certain to be extended (or not terminated). Where the
lease term has been extended by assuming an extension option will be
recognised, this will result in the initial right-of-use assets and lease
liabilities at inception of the lease being greater than if the option was not
assumed to be exercised. Likewise, assuming a break option will be exercised
will reduce the initial right-of-use assets and lease liabilities.
Refer to note 18 for further details surrounding the judgements regarding the
impact of breaks and options on lease liabilities.
2. Translations of the results of overseas businesses
The results of overseas subsidiaries are translated into the Group's
presentation currency of sterling each month at the average exchange rate for
the month, weighted according to the phasing of the Group's trading results.
The average exchange rate is used, as it is considered to approximate the
actual exchange rates on the date of the transactions. The assets and
liabilities of such undertakings are translated at the closing rates.
Differences arising on the retranslation of the opening net investment in
subsidiary companies, and on the translation of their results, are recognised
in other comprehensive income.
Goodwill and fair value adjustments arising on the acquisition of a foreign
operation are treated as assets and liabilities of the foreign operation and
translated at the closing rate.
The principal exchange rates used were as follows:
Average rate Closing rate
52 weeks to 52 weeks to As at As at
30 March
1 April
30 March
1 April
2024
2023
2024
2023
Euro 1.16 1.16 1.17 1.14
US Dollar 1.26 1.20 1.26 1.24
Chinese Yuan Renminbi 9.01 8.27 9.13 8.51
Hong Kong Dollar 9.84 9.43 9.89 9.73
South Korean Won 1,657 1,577 1,702 1,613
Japanese Yen 182 163 191 165
3. Adjusted profit before taxation
In order to provide additional understanding of the underlying performance of
the Group's ongoing business, the Group's results include a presentation of
Adjusted operating profit and Adjusted profit before taxation (adjusted PBT).
Adjusted PBT is defined as profit before taxation and before adjusting items.
Adjusting items are those items which, in the opinion of the Directors, should
be excluded in order to provide a consistent and comparable view of
the performance of the Group's ongoing business. Generally, this will
include those items that are largely one-off and/or material in nature as
well as income or expenses relating to acquisitions or disposals of businesses
or other transactions of a similar nature, including the impact of changes in
fair value of expected future payments or receipts relating to these
transactions. Adjusting items are identified and presented on a consistent
basis each year and a reconciliation of adjusted PBT to profit before
taxation is included in the financial statements. Adjusting items and their
related tax impacts, as well as adjusting taxation items, are added back
to/deducted from profit attributable to owners of the Company to arrive at
adjusted earnings per share. Refer to note 6 for further details on
adjusting items and note 9 for details on adjusted earnings per share.
4. Segmental analysis
The Chief Operating Decision Maker has been identified as the Board of
Directors. The Board reviews the Group's internal reporting in order to
assess performance and allocate resources. Management has determined the
operating segments based on the reports used by the Board. The Board
considers the Group's business through its two channels to market, being
retail/wholesale and licensing.
Retail/wholesale revenues are generated by the sale of luxury goods through
Burberry mainline stores, concessions, outlets and digital commerce as well as
Burberry franchisees, prestige department stores globally and multi-brand
speciality accounts. The flow of global product between retail and wholesale
channels and across our regions is monitored and optimised at a corporate
level and implemented via the Group's inventory hubs and principal
distribution centres situated in Europe, the USA, Mainland China and
Hong Kong S.A.R., China.
Licensing revenues are generated through the receipt of royalties from global
licensees of beauty products, eyewear and from licences relating to the use of
non-Burberry trademarks in Japan.
The Board assesses channel performance based on a measure of adjusted
operating profit. This measurement basis excludes the effects of adjusting
items. The measure of earnings for each operating segment that is reviewed by
the Board includes an allocation of corporate and central costs. Interest
income and charges are not included in the result for each operating segment
that is reviewed by the Board.
Retail/Wholesale Licensing Total
52 weeks to 52 weeks to 52 weeks to 52 weeks to 52 weeks to 52 weeks to
30 March
1 April
30 March
1 April
30 March
1 April
2024
2023
2024
2023
2024
2023
£m
£m
£m
£m
£m
£m
Retail 2,400 2,501 - - 2,400 2,501
Wholesale 506 543 - - 506 543
Licensing - - 63 51 63 51
Total segment revenue 2,906 3,044 63 51 2,969 3,095
Inter-segment revenue(1) - - (1) (1) (1) (1)
Revenue from external customers 2,906 3,044 62 50 2,968 3,094
Depreciation and amortisation(2) (379) (341) - - (379) (341)
Net impairment charge of property, plant and equipment (5) (2) - - (5) (2)
Net impairment charge of right-of-use assets(3) (9) (5) - - (9) (5)
Other non-cash items:
Share-based payments (16) (19) - - (16) (19)
Adjusted operating profit 359 587 59 47 418 634
Adjusting items(4) - 21
Finance income 31 21
Finance expense (66) (42)
Profit before taxation 383 634
1. Inter-segment transfers or transactions are entered into under the
normal commercial terms and conditions that would be available to unrelated
third parties.
2. Depreciation and amortisation for the 52 weeks to 1 April 2023 was
presented excluding £3 million arising as a result of the Group's
restructuring programme, which was presented as an adjusting item (refer to
note 6).
3. Net impairment charge of right-of-use assets for the 52 weeks to 1
April 2023 was presented excluding a reversal of £6 million relating to
charges as a result of the impact of COVID-19 and a net charge of £3 million
arising as a result of the Group's restructuring programme, which were
presented as adjusting items (refer to note 6).
4. Adjusting items relate to the Retail and Wholesale segment. Refer to
note 6 for details of adjusting items.
Retail/Wholesale Licensing Total
52 weeks to 52 weeks to 52 weeks to 52 weeks to 52 weeks to 52 weeks to
30 March
1 April
30 March
1 April
30 March
1 April
2024
2023
2024
2023
2024
2023
£m
£m
£m
£m
£m
£m
Additions to non-current assets 399 350 - - 399 350
Total segment assets 2,474 2,273 6 5 2,480 2,278
Goodwill 119 109
Cash and cash equivalents 441 1,026
Taxation 330 273
Total assets per Balance Sheet 3,370 3,686
Additional revenue analysis
All revenue is derived from contracts with customers. The Group derives retail
and wholesale revenue from contracts with customers from the transfer of goods
and related services at a point in time. Licensing revenue is derived over the
period the licence agreement gives the customer access to the Group's
trademarks.
Revenue by product division 52 weeks to 52 weeks to
30 March
1 April
2024
2023
£m
£m
Accessories 1,055 1,125
Women's 860 867
Men's 842 868
Children's/Other 149 184
Retail/Wholesale 2,906 3,044
Licensing 62 50
Total 2,968 3,094
Revenue by destination 52 weeks to 52 weeks to
30 March
1 April
2024
2023
£m
£m
Asia Pacific 1,286 1,297
EMEIA(1) 1,017 1,004
Americas 603 743
Retail/Wholesale 2,906 3,044
Licensing 62 50
Total 2,968 3,094
1. EMEIA comprises Europe, Middle East, India and Africa.
Entity-wide disclosures
Revenue derived from external customers in the UK totalled £295 million for
the 52 weeks to 30 March 2024 (last year: £257 million).
Revenue derived from external customers in foreign countries totalled £2,673
million for the 52 weeks to 30 March 2024 (last year: £2,837 million). This
amount includes £531 million of external revenues derived from customers
in the USA (last year: £661 million) and £648 million of external revenues
derived from customers in Mainland China (last year: £683 million).
The total of non-current assets, other than financial instruments, and
deferred tax assets located in the UK is £523 million (last year: £485
million). The remaining £1,168 million of non-current assets are located in
other countries (last year: £1,094 million), with £352 million located in
the USA (last year: £318 million) and £200 million located in Mainland China
(last year: £235 million).
5. Profit before taxation
Note 52 weeks to 52 weeks to
30 March
1 April
2024
2023
£m
£m
Adjusted profit before taxation is stated after charging/(crediting):
Depreciation of property, plant and equipment
Within cost of sales 2 2
Within selling and distribution costs 84 76
Within administrative expenses 17 17
Depreciation of right-of-use assets
Within cost of sales 1 -
Within selling and distribution costs 214 191
Within administrative expenses(1) 19 18
Amortisation of intangible assets
Within selling and distribution costs 1 1
Within administrative expenses 41 36
Loss on disposal of intangible assets 3 -
Gain on modification of right-of-use assets (4) (2)
Net impairment charge of property, plant and equipment 12 5 2
Net impairment charge of right-of-use assets(2) 13 9 5
Employee costs(3) 572 565
Other lease expense
Property lease variable lease expense 18 111 125
Property lease in holdover expense 18 18 20
Non-property short-term lease expense 18 12 11
Net exchange loss on revaluation of monetary assets and liabilities 20 10
Net gain on derivatives - fair value through profit and loss (7) (9)
Receivables net impairment charge 4 2
1. Depreciation of right-of-use assets within administrative expenses for
the 52 weeks to 1 April 2023 was presented excluding £3 million arising as a
result of the Group's restructuring programme, which was presented as an
adjusting item (refer to note 6).
2. Net impairment charge of right-of-use assets for the 52 weeks to 1
April 2023 was presented excluding a reversal of £6 million relating to
charges as a result of the impact of COVID-19 and a net charge of £3 million
arising as a result of the Group's restructuring programme, which were
presented as adjusting items (refer to note 6).
3. Employee costs for the 52 weeks to 1 April 2023 was presented excluding
a charge of £10 million arising as a result of the Group's restructuring
programme, which was presented as an adjusting item (refer to note 6).
6. Adjusting items
52 weeks to 52 weeks to
30 March
1 April
2024
2023
£m
£m
Adjusting items
Adjusting operating items
Impact of COVID-19:
Impairment reversal relating to retail cash generating units - (6)
Impairment reversal relating to inventory - (1)
COVID-19-related rent concessions - (13)
COVID-19-related government grant income - (2)
Other adjusting items:
Gain on disposal of property - (19)
Restructuring costs - 16
Revaluation of deferred consideration liability - 2
Total adjusting operating items - (23)
Adjusting financing items
Finance charge on adjusting items - 2
Total adjusting financing items - 2
Tax on adjusting items - 6
Total adjusting items (post-tax) - (15)
Note 52 weeks to 52 weeks to
30 March
1 April
2024
2023
£m
£m
Analysis of adjusting operating items:
Included in Cost of sales (Impairment reversal relating to inventory) - (1)
Included in Operating expenses - 12
Included in Other operating income - (34)
Total - (23)
No adjusting items have been recorded for the 52 weeks to 30 March 2024.
Adjusting items related to prior periods were as follows:
Impact of COVID-19
Impairment of retail cash generating units
During the 52 weeks to 1 April 2023, a net impairment reversal of £6 million,
and an associated tax charge of £1 million, were recorded following the
reassessment of the COVID-19 related impairment provision. Any charges or
reversals from the reassessment of the original impairment adjusting item, had
they arisen, would have been included in this adjusting item. Refer to notes
12 and 13 for details of impairment of retail cash generating units.
Impairment of inventory
During the 52 weeks to 1 April 2023, reversals of inventory provisions of £1
million were recorded and presented as adjusting items. This was relating to
inventory which had been provided for as an adjusting item at the previous
year end and had either been sold, or was expected to be sold, at a higher net
realisable value than had been assumed when the provision had been initially
estimated. All other charges and reversals relating to inventory provisions
have been recorded in adjusted operating profit. Refer to note 15 for details
of inventory provisions.
COVID-19-related rent concessions
During the 52 weeks to 1 April 2023, eligible rent forgiveness amounts
relating to COVID-19 were treated as negative variable lease payments, which
resulted in a credit of £13 million recorded within other operating income.
This income was presented as an adjusting item given that the amendment to
IFRS 16 was only applicable for a limited period of time and it explicitly
related to COVID-19. The amendment expired on 30 June 2022 however the Group
continued to apply the same accounting treatment applying the principles of
IFRS 9 for any ongoing COVID-19 related rent forgiveness. A related tax charge
of £3 million was also recognised in the prior year.
COVID-19-related grant income
During the 52 weeks to 1 April 2023, the Group recorded grant income of £2
million within other operating income relating to government support to
alleviate the impact of COVID-19. This income was presented as an adjusting
item as it was explicitly related to COVID-19, and the arrangements were
expected to last for a limited period of time. A related tax charge of £1
million was also recognised in the prior year.
Other adjusting items
Gain on disposal of property
During the 52 weeks to 1 April 2023, the Group completed the sale of an owned
property in the USA for cash proceeds of £22 million resulting in a net gain
on disposal of £19 million, recorded within other operating income. The net
gain on disposal was recognised as an adjusting item, in accordance with the
Group's accounting policy, as it was considered to be material and one-off in
nature. A related tax charge of £5 million was also recognised in the prior
year.
Restructuring costs
During the 52 weeks to 1 April 2023, restructuring costs of £16 million were
incurred primarily as a result of the organisational efficiency programme
announced in July 2020, which completed last year. The costs principally
related to impairment charges on non-retail assets and redundancies and were
recorded in operating expenses. They were presented as an adjusting item,
in accordance with the Group's accounting policy, as the anticipated cost of
the restructuring programme was considered material and discrete in nature. A
related tax credit of £4 million was also recognised in the prior year.
Items relating to the deferred consideration liability
On 22 April 2016, the Group entered into an agreement to transfer the economic
right of the non-controlling interest in Burberry Middle East LLC to the Group
in exchange for consideration of contingent payments to be made to the
minority shareholder over the period ending 30 March 2024. Contingent payments
of £5 million remain outstanding at 30 March 2024, which will be paid once
all required documentation is complete.
During the 52 weeks to 1 April 2023, a charge of £2 million in relation to
the revaluation of this balance was recognised in operating expenses. No tax
was recognised as the future payments were not considered to be deductible for
tax purposes. This was presented as an adjusting item in accordance with the
Group's accounting policy, as it arose from changes in the value of the
liability for expected future payments relating to the purchase of a
non-controlling interest in the Group.
7. Financing
Note 52 weeks to 52 weeks to
30 March
1 April
2024
2023
£m
£m
Finance income - amortised cost 9 3
Bank interest income - fair value through profit and loss 22 18
Finance income 31 21
Interest expense on lease liabilities(1) 18 (43) (31)
Interest expense on overdrafts (7) (2)
Interest expense on borrowings (4) (4)
Bank charges (1) (1)
Other finance expense (11) (4)
Finance expense (66) (42)
Finance charge on adjusting items 6 - (2)
Net finance expense (35) (23)
1. During the 52 weeks to 1 April 2023, interest expense on lease
liabilities of £31 million excluded £2 million arising as a result of the
Group's restructuring programme, which was presented as an adjusting item
(refer to note 6).
8. Taxation
Analysis of charge for the year recognised in the Group Income Statement:
52 weeks to 52 weeks to
30 March
1 April
2024
2023
£m
£m
Current tax
UK corporation tax
Current tax on income for the 52 weeks to 30 March 2024 at 25% (last year: 104 116
19%)
Double taxation relief (3) (5)
Adjustments in respect of prior years(1) 44 12
145 123
Foreign tax
Current tax on income for the year 26 34
Adjustments in respect of prior years(1) (35) 3
(9) 37
Total current tax 136 160
Deferred tax
UK deferred tax
Origination and reversal of temporary differences 5 4
Adjustments in respect of prior years(1) (1) -
4 4
Foreign deferred tax
Origination and reversal of temporary differences (28) (26)
Adjustments in respect of prior years(1) - 4
(28) (22)
Total deferred tax (24) (18)
Total tax charge on profit 112 142
1. Adjustments in respect of prior years relate mainly to adjustments to
estimates of prior period tax liabilities and a net increase in provisions for
uncertain tax positions (where in some instances the provision also includes
offsetting relief in a different jurisdiction) and tax accruals.
Analysis of charge for the year recognised in other comprehensive income and
directly in equity:
52 weeks to 52 weeks to
30 March
1 April
2024
2023
£m
£m
Current tax
Recognised in other comprehensive income:
Current tax (credit)/charge on exchange differences on loans (foreign currency (1) 1
translation reserve)
Total current tax recognised in other comprehensive income (1) 1
Deferred tax
Recognised in equity:
Deferred tax charge/(credit) on share options (retained earnings) 2 (2)
Total deferred tax recognised directly in equity 2 (2)
The tax rate applicable on profit varied from the standard rate of corporation
tax in the UK due to the following factors:
52 weeks to 52 weeks to
30 March
1 April
2024
2023
£m
£m
Profit before taxation 383 634
Tax at 25% (last year: 19%) on profit before taxation 97 120
Rate adjustments relating to overseas profits - 1
Permanent differences 3 4
Current year tax losses not recognised 3 -
Prior year temporary differences and tax losses recognised 1 (3)
Adjustments in respect of prior years 8 19
Adjustments to deferred tax relating to changes in tax rates - 1
Total taxation charge 112 142
Total taxation recognised in the Group Income Statement arises on the
following items:
52 weeks to 52 weeks to
30 March
1 April
2024
2023
£m
£m
Tax on adjusted profit before taxation 112 136
Tax on adjusting items - 6
Total taxation charge 112 142
Factors affecting future tax charges
Uncertain tax positions
The Group operates in numerous tax jurisdictions around the world and is
subject to factors that may affect future tax charges including transfer
pricing, tax rate changes, tax legislation changes, tax authority
interpretation, expiry of statutes of limitation, tax litigation, and
resolution of tax audits and disputes.
At any given time, the Group has open years outstanding in various countries
and is involved in tax audits and disputes, some of which may take several
years to resolve. Provisions are based on best estimates and management's
judgements concerning the likely ultimate outcome of any audit or dispute.
Management considers the specific circumstances of each tax position and takes
external advice, where appropriate, to assess the range of potential outcomes
and estimate additional tax that may be due.
At 30 March 2024 the Group recognised provisions of £91 million in respect of
uncertain tax positions (increasing from £86 million in 2023), being
provisions of £131 million net of expected reimbursements of £40 million
(last year: £103 million net of expected reimbursements of £17 million). The
majority of these provisions relate to the tax impact of intra-group
transactions between the UK and the various jurisdictions in which the Group
operates, as would be expected for a Group operating internationally.
The Group believes that it has made adequate provision in respect of
additional tax liabilities that may arise from open years, tax audits and
disputes. However, the actual liability for any particular issue may be higher
or lower than the amount provided, resulting in a negative or positive effect
on the tax charge in any given year. A reduction in the tax charge may also
arise for other reasons such as an expiry of the relevant statute of
limitations. Depending on the final outcome of tax audits which are currently
in progress, statute of limitations expiry, and other factors, an impact on
the tax charge could arise. The tax impact of intra-group transactions is a
complex area and resolution of matters can take many years. Given the inherent
uncertainty, it is difficult to predict the timing of when these matters will
be resolved and the quantum of the ultimate resolution. Management estimate
that the outcome across all matters under dispute or in negotiation between
governments could be in the range of a decrease of £32 million, to an
increase of £47 million, in the uncertain tax position over the next 12
months.
Legislative changes
The OECD Pillar Two GloBE Rules introduce a global minimum corporate tax rate
of 15% applicable to multinational enterprise groups with global revenue over
€750 million. All participating OECD members are required to incorporate
these rules into national legislation. The Group will be subject to the Pillar
Two Model Rules from FY 2024/25 but does not meet the threshold for
application of the Pillar One transfer pricing rules. The Group applies the
temporary exception from the accounting requirements for deferred taxes in IAS
12. Accordingly, the Group neither recognises nor discloses information about
deferred tax assets and liabilities related to Pillar Two income taxes.
UK legislation in relation to Pillar Two was substantively enacted on 20 June
2023 and applies to the Group for the reporting period beginning 31 March
2024. The Group has performed an analysis of the potential exposure to Pillar
Two income taxes. The analysis of the potential exposure to Pillar Two income
taxes is based on the most recently submitted Country by Country Reporting
available for the constituent entities in the Group (for the 52 weeks to 1
April 2023). Based on the analysis, the transitional safe harbour relief
should apply in respect of most jurisdictions in which the Group operates.
Although there are a limited number of jurisdictions where the transitional
safe harbour relief may not apply, the Group does not expect a material
exposure to Pillar Two income taxes in those jurisdictions.
9. Earnings per share
The calculation of basic earnings per share is based on profit or loss
attributable to owners of the Company for the year divided by the weighted
average number of ordinary shares in issue during the year. Basic and diluted
earnings per share based on adjusted profit before taxation are also disclosed
to indicate the underlying profitability of the Group.
52 weeks to 52 weeks to
30 March
1 April
2024
2023
£m
£m
Attributable profit for the year before adjusting items(1) 270 475
Effect of adjusting items(1) (after taxation) - 15
Attributable profit for the year 270 490
1. Refer to note 6 for details of adjusting items.
The weighted average number of ordinary shares represents the weighted average
number of Burberry Group plc ordinary shares in issue throughout the year,
excluding ordinary shares held in the Group's ESOP trusts and treasury shares
held by the Company or its subsidiaries. This includes the effect of the
cancellation of 20.5 million shares during the period as a result of the share
buyback programmes (prior year: 21.1 million). Refer to note 21 for additional
information on the share buybacks.
Diluted earnings per share is based on the weighted average number of ordinary
shares in issue during the year. In addition, account is taken of any options
and awards made under the employee share incentive schemes, which will have a
dilutive effect when exercised.
52 weeks to 52 weeks to
30 March
1 April
2024
2023
Millions
Millions
Weighted average number of ordinary shares in issue during the year 365.0 386.1
Dilutive effect of the employee share incentive schemes 1.2 1.9
Diluted weighted average number of ordinary shares in issue during the year 366.2 388.0
52 weeks to 52 weeks to
30 March
1 April
2024
2023
Pence
Pence
Earnings per share
Basic 74.1 126.9
Diluted 73.9 126.3
Adjusted earnings per share
Basic 74.1 123.1
Diluted 73.9 122.5
10. Dividends paid to owners of the Company
52 weeks to 52 weeks to
30 March
1 April
2024
2023
£m
£m
Prior year final dividend paid 44.5p per share (last year: 35.4p) 167 140
Interim dividend paid 18.3p per share (last year: 16.5p) 66 63
Total 233 203
A final dividend in respect of the 52 weeks to 30 March 2024 of 42.7p (last
year: 44.5p) per share, amounting to £151 million, has been proposed for
approval by the shareholders at the Annual General Meeting subsequent to the
balance sheet date. The final dividend has not been recognised as a liability
at the year end and will be paid on 2 August 2024 to the shareholders on the
register at the close of business on 28 June 2024. The ex-dividend date is 27
June 2024 and the final day for dividend reinvestment plan (DRIP) elections is
12 July 2024.
11. Intangible assets
Cost Goodwill Trademarks, licences and other intangible Computer Intangible assets in the course of Total
£m
assets
software
construction
£m
£m
£m
£m
As at 2 April 2022 115 13 258 55 441
Effect of foreign exchange rate changes - - 1 - 1
Additions - 1 13 32 46
Disposals - - (42) - (42)
Reclassifications from assets in the course of construction - - 18 (18) -
As at 1 April 2023 115 14 248 69 446
Effect of foreign exchange rate changes (6) - (2) - (8)
Additions - 1 8 44 53
Business combination 16 1 - - 17
Disposals - - (5) (22) (27)
Reclassifications from assets in the course of construction - - 30 (30) -
As at 30 March 2024 125 16 279 61 481
Accumulated amortisation and impairment
As at 2 April 2022 6 7 169 19 201
Effect of foreign exchange rate changes - - 2 - 2
Charge for the year - 1 36 - 37
Disposals - - (42) - (42)
As at 1 April 2023 6 8 165 19 198
Effect of foreign exchange rate changes - - (2) - (2)
Charge for the year - 1 41 - 42
Disposals - - (5) (19) (24)
As at 30 March 2024 6 9 199 - 214
Net book value
As at 30 March 2024 119 7 80 61 267
As at 1 April 2023 109 6 83 50 248
Impairment testing of goodwill
The carrying value of the goodwill allocated to cash generating units:
As at As at
30 March
1 April
2024
2023
£m
£m
Mainland China 46 50
South Korea 24 26
Retail and Wholesale segment(1) 35 19
Other 14 14
Total 119 109
1. Goodwill which arose on acquisitions of Burberry Manifattura S.R.L. and
Burberry Tecnica S.R.L. has been allocated to the group of cash generating
units which make up the Group's Retail and Wholesale operating segment cash
generating unit. This reflects the lowest level at which the goodwill is being
monitored by management.
The Group tests goodwill for impairment annually or when there is an
indication that goodwill might be impaired. The recoverable amount of all cash
generating units has been determined on a value-in-use basis. Value-in-use
calculations for each cash generating unit are based on projected pre-tax
discounted cash flows together with a discounted terminal value. The cash
flows have been discounted at pre-tax rates reflecting the Group's weighted
average cost of capital adjusted for country-specific tax rates and risks.
Where the cash generating unit has a non-controlling interest which was
recognised at a value equal to its proportionate interest in the net
identifiable assets of the acquired subsidiary at the acquisition date, the
carrying amount of the goodwill has been grossed up, to include the goodwill
attributable to the non-controlling interest, for the purpose of impairment
testing the goodwill attributable to the cash generating unit. The key
assumptions contained in the value-in-use calculations include the future
revenues, the operating profit margins achieved and the discount rates
applied.
The value-in-use calculations have been prepared using management's cost and
revenue projections for the next three years to 27 March 2027 and a
longer-term growth rate of 5% to 30 March 2029. A terminal value has been
included in the value-in-use calculation based on the cash flows for the year
ending 30 March 2029, incorporating the assumption that growth beyond
30 March 2029 is equivalent to nominal inflation rates, assumed to be 2%,
which are not significant to the assessment.
The value-in-use estimates indicated that the recoverable amount of the cash
generating unit exceeded the carrying value for each of the cash generating
units. As a result, no impairment has been recognised in respect of the
carrying value of goodwill in the year.
Impairment testing of goodwill continued
The goodwill arising on the acquisition of Burberry Tecnica S.R.L. has been
allocated to the group of cash generating units which make up the Group's
retail/wholesale operating segment. This reflects the level at which the
goodwill is being monitored by management. For the material goodwill balances
of Mainland China, South Korea and the Retail and Wholesale segment,
management has considered the potential impact of reasonably possible changes
in assumptions on the recoverable amount of goodwill. The sensitivities
include applying a 10% reduction in revenue and gross profit and the
associated impact on operating profit margin from management's base cash flow
projections, considering the macroeconomic and political uncertainty risk on
the Group's retail operations and on the global economy. Under this scenario,
the estimated recoverable amount of goodwill in Mainland China, South
Korea and the Retail and Wholesale segment still exceeded the carrying value.
The pre-tax discount rates for Mainland China, South Korea and the Retail and
Wholesale segment were 12%, 10% and 11% respectively (last year: Mainland
China 12%, South Korea 12%, and the Retail and Wholesale segment 12%). No
reasonably possible change in these pre-tax discount rates would result in the
carrying value to exceed the estimated recoverable amount of goodwill.
The other goodwill balance of £14 million (last year: £14 million) consists
of amounts relating to eight cash generating units, none of which have
goodwill balances individually exceeding £6 million as at 30 March 2024 (last
year: £7 million).
12. Property, plant and equipment
Cost Freehold land Leasehold improvements Fixtures, Assets in the course of construction Total
and buildings
£m
fittings and
£m
£m
£m
equipment
£m
As at 2 April 2022 116 550 348 47 1,061
Effect of foreign exchange rate changes 6 6 9 1 22
Additions - 56 25 66 147
Disposals (1) (53) (27) (1) (82)
Reclassifications from assets in the course of construction - 26 11 (37) -
As at 1 April 2023 121 585 366 76 1,148
Effect of foreign exchange rate changes (2) (27) (8) (3) (40)
Additions - 88 32 44 164
Business combination - - 1 - 1
Disposals - (69) (47) - (116)
Reclassifications from assets in the course of construction - 54 14 (68) -
Reclassifications to assets held for sale (28) - - - (28)
As at 30 March 2024 91 631 358 49 1,129
Accumulated depreciation and impairment
As at 2 April 2022 56 388 294 1 739
Effect of foreign exchange rate changes 4 6 8 - 18
Charge for the year 3 64 28 - 95
Disposals (1) (53) (27) (1) (82)
Impairment charge on assets - 2 - - 2
As at 1 April 2023 62 407 303 - 772
Effect of foreign exchange rate changes - (17) (8) - (25)
Charge for the year 2 69 32 - 103
Disposals - (69) (47) - (116)
Impairment charge on assets - 4 1 - 5
Reclassifications to assets held for sale (16) - - - (16)
As at 30 March 2024 48 394 281 - 723
Net book value
As at 30 March 2024 43 237 77 49 406
As at 1 April 2023 59 178 63 76 376
During the 52 weeks to 30 March 2024, management carried out a review of
retail cash generating units comprising right-of-use asset and property, plant
and equipment, for any indication of impairment or reversal of impairments
previously recorded. Where indications of impairment charges or reversals were
identified, the impairment review compared the value-in-use of the cash
generating units to their net book values at 30 March 2024. The pre-tax cash
flow projections used for this review were based on financial plans of
expected revenues and costs of each retail cash generating unit, approved by
management, reflecting their latest plans over the next three years to 27
March 2027. For the remainder of the asset life, the cashflows assume industry
growth rates of 5% and cost inflation rates appropriate to each store's
location, followed by longer-term growth rates of mid-single digits and
inflation rates appropriate to each store's location. The pre-tax discount
rates used in these calculations were between 10.2% and 12.1% (last year:
between 11.1% and 13.7%) based on the Group's weighted average cost of capital
adjusted for country-specific borrowing costs, tax rates and risks for those
countries in which a charge or reversal was incurred. Where indicators of
impairment have been identified and the value-in-use was less than the
carrying value of the cash generating unit, an impairment of property, plant
and equipment and right-of-use asset was recorded. Where the value-in-use was
greater than the net book value, and the cash generating unit had been
previously impaired, the impairment was reversed, to the extent that could be
supported by the value-in use and allowing for any depreciation that would
have been incurred during the period since the impairment was recorded.
During the 52 weeks to 30 March 2024, a charge of £14 million (last year: net
charge of £7 million) was recorded within net operating expenses as a result
of the annual review of impairment for retail store assets. A charge of £5
million (last year: charge of £2 million) was recorded against property,
plant and equipment and a charge of £9 million (last year: net charge of £5
million) was recorded against right-of-use assets. Impairments previously
charged as an adjusting item related to the impact of COVID-19 were
reassessed, resulting in no impairment charge or reversal being presented as
an adjusting item in the current year (last year: net reversal of £6 million
recorded against right-of-use assets). Refer to note 13 for further details
of right-of-use assets. Refer to note 6 for details of adjusting items.
The impairment charge recorded in property, plant and equipment related to six
retail cash generating units (last year: two retail cash generating units)
for which the total recoverable amount at the balance sheet date is £15
million (last year: £1 million).
Management has considered the potential impact of changes in assumptions on
the impairment recorded against the Group's retail assets. Given the
macroeconomic and political uncertainty risk on the Group's retail operations
and on the global economy, management has considered sensitivities to the
impairment charge as a result of changes to the estimate of future revenues
achieved by the retail stores. The sensitivities applied are an increase
or decrease in revenue of 10% from the estimate used to determine the
impairment charge or reversal. We have also considered retail cash generating
units with no indicators of impairment but with a significant asset balance.
It is estimated that a 10% decrease/increase in revenue assumptions for the 52
weeks to 29 March 2025, with no change to subsequent forecast revenue growth
rate assumptions, would result in a less than £19 million increase/less
than £9 million decrease in the impairment charge of retail store assets in
the 52 weeks to 30 March 2024.
As at 30 March 2024, the Group had one freehold property that met the criteria
to be classified as held for sale. This asset is required to be recorded at
the lower of carrying value or fair value less any costs to sell. As the fair
value less any costs to sell exceeded the carrying value, the related asset
was recorded at its carrying value of £12 million. The sale of this property
is expected to complete within the next 12 months.
No assets were classified as held for sale at 1 April 2023. During the 52
weeks to 1 April 2023, the sale of three freehold properties with a carrying
value of £13 million, which were previously classified as assets held for
sale, was completed resulting in a net gain on disposal of £19 million.
13. Right-of-use assets
Net book value Property right-
of-use assets
£m
As at 2 April 2022 880
Effect of foreign exchange rate changes 14
Additions 157
Remeasurements 113
Depreciation for the year (212)
Impairment charge on right-of-use assets (10)
Impairment reversal on right-of-use assets 8
As at 1 April 2023 950
Effect of foreign exchange rate changes (27)
Additions 162
Business combination 2
Remeasurements 169
Depreciation for the year (234)
Impairment charge on right-of-use assets (9)
As at 30 March 2024 1,013
As a result of the assessment of retail cash generating units for impairment,
an impairment charge of £9 million (last year: net impairment reversal of £1
million) was recorded for impairment of right-of-use assets related to trading
impacts. Refer to note 12 for further details of impairment assessment of
retail cash generating units. The net impairment reversal in the prior year
comprised a reversal of £6 million arising from the change in assumption due
to the impact of COVID-19 on the value-in-use of retail cash generating units
and a charge of £5 million relating to other trading impacts. The reversal
relating to COVID-19 was presented as an adjusting item (refer to note 6).
The impairment charge recorded in right-of-use assets relates to seven retail
cash generating units (last year: three retail cash generating units) for
which the total recoverable amount at the balance sheet date is £44 million
(last year: £17 million).
At 1 April 2023, a net impairment charge of £3 million was recognised in
relation to non-retail right-of-use assets arising as a result of the Group's
restructuring programmes and was presented as an adjusting item (refer to note
6).
As a result, the impairment charge for right-of-use assets was £9 million
(last year: net impairment charge of £2 million).
14. Trade and other receivables
As at As at
30 March
1 April
2024
2023
£m
£m
Non-current
Other financial receivables(1) 47 45
Other non-financial receivables(2) - 2
Prepayments 5 5
Total non-current trade and other receivables 52 52
Current
Trade receivables 189 184
Provision for expected credit losses (10) (7)
Net trade receivables 179 177
Other financial receivables(1) 27 25
Other non-financial receivables(2) 86 59
Prepayments 33 32
Accrued income 15 14
Total current trade and other receivables 340 307
Total trade and other receivables 392 359
1. Other financial receivables include rental deposits and other sundry
debtors.
2. Other non-financial receivables relates primarily to indirect taxes and
other taxes and duties.
Included in total trade and other receivables are non-financial assets of
£124 million (last year: £98 million).
15. Inventories
As at As at
30 March
1 April
2024
2023
£m
£m
Raw materials 29 15
Work in progress 3 1
Finished goods 475 431
Total inventories 507 447
As at As at
30 March
1 April
2024
2023
£m
£m
Total inventories, gross 580 504
Provisions (73) (57)
Total inventories, net 507 447
Inventory provisions of £73 million (last year: £57 million) are recorded,
representing 12.6% (last year: 11.4%) of the gross value of inventory. The
provisions reflect management's best estimate of the net realisable value of
inventory, where this is considered to be lower than the cost of the
inventory.
The cost of inventories recognised as an expense and included in cost of sales
amounted to £922 million (last year: £874 million).
Taking into account factors impacting the inventory provisioning including the
proportion of inventory sold through loss making channels being higher or
lower than expected, management considers that a reasonable potential range of
outcomes could result in an increase in inventory provisions of £15 million
or a decrease in inventory provisions of £22 million in the next 12 months.
This would result in a potential range of inventory provisions of 8.8% to
15.3% as a percentage of the gross value of inventory as at 30 March 2024.
The net movement in inventory provisions included in cost of sales for the 52
weeks to 30 March 2024 was a charge of £39 million (last year: release of
£1 million). The total reversal of inventory provisions during the current
year, which is included in the net movement, was £15 million (last year:
reversal of £22 million). In the prior year, a reversal of £1 million was
included within both of these amounts upon reassessment of the provision
related to the impact of COVID-19 and was presented as an adjusting item.
Refer to note 6 for details of adjusting items.
16. Cash and cash equivalents
As at As at
30 March
1 April
2024
2023
£m
£m
Cash and cash equivalents held at amortised cost 180
Cash at bank and in hand 152
Short-term deposits 83 77
263 229
Cash and cash equivalents held at fair value through profit and loss
Short-term deposits 178 797
Total 441 1,026
Cash and cash equivalents classified as fair value through profit and loss
relate to deposits held in low volatility net asset value money market funds.
The cash is available immediately and, since the funds are managed to achieve
low volatility, no significant change in value is anticipated. The funds are
monitored to ensure there are no significant changes in value.
As at 30 March 2024 and 1 April 2023, no impairment losses were identified on
cash and cash equivalents held at amortised cost.
17. Trade and other payables
As at As at
30 March
1 April
2024
2023
£m
£m
Non-current
Other payables(1) 3 -
Deferred income and non-financial accruals 9 20
Contract liabilities 51 57
Total non-current trade and other payables 63 77
Current
Trade payables 180 186
Other taxes and social security costs 45 50
Other payables(1) 21 10
Accruals 165 199
Deferred income and non-financial accruals 11 14
Contract liabilities 12 13
Deferred consideration(2) 5 5
Total current trade and other payables 439 477
Total trade and other payables 502 554
1. Other payables comprise interest and employee-related liabilities.
2. Deferred consideration relates to the acquisition of the economic right
to the non-controlling interest in Burberry Middle East LLC on 22 April 2016.
In the 52 weeks to 30 March 2024 no payments were made in relation to
Burberry Middle East LLC (last year: £6 million). Contingent payments of £5
million remain outstanding at 30 March 2024, which will be paid once all
required documentation is complete.
18. Lease liabilities
Property lease liabilities
£m
Balance as at 2 April 2022 1,058
Effect of foreign exchange rate changes 20
Created during the year 157
Amounts paid(1) (243)
Discount unwind 33
Remeasurements(2) 98
Balance as at 1 April 2023 1,123
Effect of foreign exchange rate changes (30)
Created during the year 159
Business combination 1
Amounts paid(1) (274)
Discount unwind 43
Remeasurements(2) 166
Balance as at 30 March 2024 1,188
As at As at
30 March
1 April
2024
2023
£m
£m
Analysis of total lease liabilities:
Non-current 959 902
Current 229 221
Total 1,188 1,123
1. The amount paid of £274 million (last year: £243 million) includes
£231 million (last year: £210 million) arising as a result of a financing
cash outflow and £43 million (last year: £33 million) arising as a result of
an operating cash outflow.
2. Remeasurements relate largely to changes in the lease liabilities that
arise as a result of extending the lease term on an existing lease,
management's reassessment of the lease term based on existing break or
extension options in the contract, as well as those linked to an inflation
index or rate review. In the prior year, remeasurements included
COVID-19-related rent forgiveness of £13 million which was recognised as a
credit in the Income Statement and was included as an adjusting item. Refer to
note 6.
The Group enters into property leases for retail properties, including stores,
concessions, warehouse and storage locations and office property. The
remaining lease terms for these properties range from a few months to 16 years
(last year: few months to 15 years). Many of the leases include break options
and/or extension options to provide operational flexibility. Some of the
leases for concessions have rolling lease terms or rolling break options.
Management assess the lease term at inception based on the facts and
circumstances applicable to each property including the period over which the
investment appraisal was initially considered.
Potential future undiscounted lease payments related to periods following the
exercise date of an extension option not included in the lease term, and
therefore not included in lease liabilities are approximately £434 million
(last year: £399 million) in relation to the next available extension option
and are assessed as not reasonably certain to be exercised. Potential future
undiscounted lease payments related to periods following the exercise date of
a break option not included in the lease term, and therefore not included in
lease liabilities, are approximately £113 million (last year: £130 million)
in relation to break options which are expected to be exercised. During the
52 weeks to 30 March 2024, significant judgements regarding breaks and options
in relation to individually material leases resulted in approximately £100
million (last year: £38 million) in undiscounted future cash flows not being
included in the initial right-of-use assets and lease liabilities.
Management reviews the retail lease portfolio on an ongoing basis, taking into
account retail performance and future trading expectations. Management may
exercise extension options and negotiate lease extensions or modifications.
In other instances, management may exercise break options, negotiate lease
reductions or decide not to negotiate a lease extension at the end of the
lease term. The most significant factor impacting future lease payments is
changes management choose to make to the store portfolio.
Future increases and decreases in rent linked to an inflation index or rate
review are not included in the lease liability until the change in cash flows
is legally agreed. Approximately 19% (last year: 18%) of the Group's lease
liabilities are subject to inflation linked reviews and 32% (last year: 30%)
are subject to rent reviews. Rental changes linked to inflation or rent
reviews typically occur on an annual basis.
Many of the retail property leases also incur payments based on a percentage
of revenue achieved at the location. Changes in future variable lease payments
will typically reflect changes in the Group's retail revenues, including the
impact of regional mix. The Group expects the relative proportions of fixed
and variable lease payments to remain broadly consistent in future years.
The Group also enters into non-property leases for equipment, advertising
fixtures and machinery. Generally, these leases do not include break or
extension options. The most significant impact to future cash flows relating
to leased equipment, which are primarily short-term leases, would be the
Group's usage of leased equipment to a greater or lesser extent.
Details of income statement charges and income from leases are set out in note
5. The right-of-use asset categories on which depreciation is incurred are
presented in note 13. Interest expense incurred on lease liabilities is
presented in note 7.
Total cash outflows in relation to leases in the 52 weeks ended 30 March 2024
are £417 million (last year: £396 million). This relates to payments of
£231 million on lease principal (last year: £210 million), £43 million on
lease interest (last year: £33 million), £113 million on variable lease
payments (last year: £122 million), and £30 million on other lease payments
principally relating to short-term leases and leases in holdover (last year:
£31 million).
19. Bank overdrafts
Included within bank overdrafts is £78 million (last year: £65 million)
representing balances on cash pooling arrangements in the Group.
The Group has a number of committed and uncommitted arrangements agreed with
third parties. At 30 March 2024, the Group held £1 million (last year:
£nil) bank overdrafts excluding balances on cash pooling arrangements.
The fair value of overdrafts approximates the carrying amount because of the
short maturity of these instruments.
20. Borrowings
On 21 September 2020, Burberry Group plc issued medium term notes with a face
value of £300 million and 1.125% coupon maturing on 21 September 2025 (the
sustainability bond). Proceeds from the sustainability bond have been used by
the Group to finance projects which support the Group's sustainability
agenda. There are no financial penalties for not using the proceeds as
anticipated. Interest on the sustainability bond is payable semi-annually. The
carrying value of the bond at 30 March 2024 is £299 million (last year: £298
million); all movements on the bond are non-cash. The fair value of the bond
at 30 March 2024 is £281 million (last year: £273 million).
On 26 July 2021, the Group entered into a £300 million multi-currency
sustainability-linked revolving credit facility (RCF) with a syndicate of
banks, maturing on 26 July 2026. There were no drawdowns or repayments of the
RCF during the current or previous year, and at 30 March 2024 there were no
outstanding drawings.
The Group is in compliance with the financial and other covenants within the
facilities above and has been in compliance throughout the financial period.
21. Share capital and reserves
Allotted, called up and fully paid share capital Number £m
Ordinary shares of 0.05p (last year: 0.05p) each
As at 2 April 2022 405,107,301 0.2
Allotted on exercise of options during the year 236,123 -
Cancellation of shares (21,075,496) -
As at 1 April 2023 384,267,928 0.2
Allotted on exercise of options during the year 51,904 -
Cancellation of shares (20,504,089) -
As at 30 March 2024 363,815,743 0.2
The Company has a general authority from shareholders, renewed at each Annual
General Meeting, to repurchase a maximum of 10% of its issued share capital.
During the 52 weeks to 30 March 2024, the Company entered into agreements to
purchase, at fair value, a total of £400 million of its own shares,
excluding stamp duty and fees, through two share buyback programmes of £200
million each (last year: two share buyback programmes of £200 million each).
Both programmes were completed during the year.
The cost of own shares purchased by the Company, as part of a share buyback
programme, is offset against retained earnings, as the amounts paid reduce the
profits available for distribution by the Company. When shares are cancelled,
a transfer is made from retained earnings to the capital reserve, equivalent
to the nominal value of the shares purchased and subsequently cancelled.
In the 52 weeks to 30 March 2024, 20.5 million shares were cancelled (last
year: 21.1 million).
As at 30 March 2024 the Company held 5.2 million treasury shares (last year:
6.1 million), with a market value of £63 million (last year: £157 million)
based on the share price at the reporting date. The treasury shares held by
the Company are related to the share buyback programme completed during the 53
weeks to 2 April 2022. During the 52 weeks to 30 March 2024, 0.9 million
treasury shares were transferred to ESOP trusts (last year: 2.3 million).
During the 52 weeks to 30 March 2024, no treasury shares were cancelled (last
year: none).
The cost of shares purchased by ESOP trusts are offset against retained
earnings, as the amounts paid reduce the profits available for distribution by
the Company. As at 30 March 2024, the cost of own shares held by ESOP trusts
and offset against retained earnings is £34 million (last year: £42
million). As at 30 March 2024, the ESOP trusts held 1.9 million shares (last
year: 2.3 million) in the Company, with a market value of £23 million (last
year: £60 million). In the 52 weeks to 30 March 2024 the ESOP trusts and the
Company have waived their entitlement to dividends.
Other reserves in the Statement of Changes in Equity consist of the capital
reserve, the foreign currency translation reserve, and the hedging reserves.
The hedging reserves consist of the cash flow hedge reserve and the net
investment hedge reserve.
Capital Hedging reserves Foreign currency translation Total
reserve
reserve
£m
£m
£m
Cash flow Net investment hedge
hedges
£m
£m
Balance as at 2 April 2022 41 (1) 5 218 263
Other comprehensive income:
Cash flow hedges - gains deferred in equity - 1 - - 1
Foreign currency translation differences - - - 14 14
Tax on other comprehensive income - (1) - - (1)
Total comprehensive income for the year - - - 14 14
Balance as at 1 April 2023 41 (1) 5 232 277
Other comprehensive income:
Cash flow hedges - losses deferred in equity - (4) - - (4)
Cash flow hedges - transferred to income - 1 - - 1
Foreign currency translation differences - - - (34) (34)
Tax on other comprehensive income - 1 - - 1
Total comprehensive income for the year - (2) - (34) (36)
Balance as at 30 March 2024 41 (3) 5 198 241
As at 30 March 2024 the amount held in the hedging reserve relating to matured
net investment hedges is £5 million net of tax (last year: £5 million).
22. Commitments
Capital commitments
Contracted capital commitments represent contracts entered into by the year
end for future work in respect of major capital expenditure projects relating
to property, plant and equipment and intangible assets, which are not
recorded on the Group's Balance Sheet and are as follows:
As at As at
30 March
1 April
2024
2023
£m
£m
Capital commitments contracted but not provided for:
Property, plant and equipment 67 38
Intangible assets 4 3
Total 71 41
23. Acquisition of subsidiary
On 2 October 2023, Burberry Italy S.R.L., Burberry's wholly-owned subsidiary,
acquired a 100% shareholding in Burberry Tecnica, S.R.L., from Italian
technical outerwear supplier, Pattern SpA, a company incorporated in Italy,
for total cash consideration of £19 million. Consideration for this
acquisition did not includes any contingent or deferred consideration.
Based in Turin, the activities of the business acquired revolve around the
engineering and production of Burberry products. The acquisition allows the
Group to secure capacity, build technical outerwear capabilities and further
embed sustainability into its value chain.
The assets and liabilities recognised as a result of the acquisition are as
follows:
Provisional
Fair value
£m
Net assets acquired
Acquired intangible assets 1
Property, plant and equipment 1
Inventories 2
Right-of-use assets 2
Lease liabilities (1)
Employee-related liabilities (1)
Deferred tax liability (1)
Net assets acquired 3
Goodwill arising on acquisition 16
Total cost of acquisition 19
No receivables or contingent liabilities were acquired as a result of the
acquisition.
The values used in accounting for the identifiable assets and liabilities of
the acquisition are provisional in nature as they are still being determined.
If necessary, adjustments will be made to these carrying values and the
related goodwill, within 12 months of the acquisition date.
The goodwill arising on the acquisition of £16 million reflects the expected
synergies from the vertical integration of engineering and production of
technical outerwear within the Group's supply chain, together with the value
of the retained workforce. The goodwill has been allocated to the group of
cash generating units which make up the Group's retail/wholesale operating
segment. £13 million of the goodwill is expected to be deductible for tax
purposes, giving rise to an overall tax benefit with an estimated net present
value of approximately £1 million.
The acquired business has made a contribution to Group revenue of £nil and
had a negligible impact on Group profit before taxation since acquisition. If
the acquisition had occurred at the beginning of the financial year, the
impact on the Group's revenue and profit or loss would not have been material.
24. Contingent liabilities
The Group is subject to claims against it and to tax audits in a number of
jurisdictions which arise in the ordinary course of business. These typically
relate to Value Added Taxes, sales taxes, customs duties, corporate taxes,
transfer pricing, payroll taxes, various contractual claims, legal proceedings
and other matters. Where appropriate, the estimated cost of known obligations
has been provided in these financial statements in accordance with the Group's
accounting policies. The Group does not expect the outcome of current similar
contingent liabilities to have a material effect on the Group's financial
position.
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