REG - Dr. Martens PLC - Half-year Report
28/11/2024 07:00
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RNS Number : 9249N Dr. Martens PLC 28 November 2024
28 November 2024
Dr. Martens plc
First half results for the 26 weeks ended 29 September 2024
RESULTS IN LINE WITH EXPECTATIONS AND DELIVERING ON OUR STRATEGIC OBJECTIVES
"Our first half performance was in line with expectations and we remain
confident in our ability to deliver on our plans and the targets we set for
FY25. As we shared in May, this is a year of transition and we have made good
progress with our four main objectives: pivot our marketing to a relentless
focus on our product, turn around our USA DTC performance, reduce our
operating cost base and strengthen the balance sheet. Our new marketing
campaigns are showing encouraging early signs, with strong sales of new
product, giving us confidence that we will return USA DTC to positive growth
in the second half. We took swift action to implement cost savings and now
anticipate the benefit of this in FY26 to be at the top of the previous
guidance range of £20-£25m, alongside an ongoing focus on tight cost control
throughout the business. We have delivered a significant reduction in both
inventory and net debt, together with successfully refinancing our debt
facilities. The early success of our new product ranges provides a strong
foundation as we enter the important peak trading period and as I prepare to
hand over the reins to Ije in the new year."
Kenny Wilson, Chief Executive Officer
£m H1 FY25 H1 FY25 H1 FY24 % change % change
Reported CC(2) Reported Actual CC(2)
Revenue 324.6 332.1 395.8 -18% -16%
DTC revenue mix 56.4% 56.4% 49.6% +6.8pts +6.8pts
Adjusted EBIT(1,3) (4.3) (2.4) 39.7
Adjusted PBT(1,3) (17.9) (16.1) 25.2
PBT (28.7) (27.0) 25.8
Adjusted EPS(1,3) (1.3) (1.1) 1.9
EPS (p) (2.2) (2.0) 1.9
Net Debt(1) (including leases) 348.7 N/A 478.9 -27%
Dividend per share (p) 0.85 N/A 1.56
1. Alternative Performance Measure (APM) as defined in the Glossary on pages
29 to 31.
2. Constant currency applies the prior period exchange rates to current period
results to remove the impact of FX. Previously, we presented this by applying
current period budgeted rates to both the current and prior period.
3. In previous periods EBITDA was presented. However, this has been replaced
with EBIT as it is considered a more relevant performance measure for the
business. The Group has also introduced the use of adjusted performance
measures which are exclusive of the impact of exceptional costs and currency
gains/losses. Refer to the Glossary on pages 29 to 31 for further explanation
of these changes. Prior period amounts have been updated to reflect this
change and were therefore unaudited in the prior periods.
* Revenue down 18% (16% constant currency (CC)), in line with guidance for 20%
decline. DTC revenue down 7% (5% CC) and Wholesale revenue down 29% (27%CC),
as expected. Within DTC, Retail revenue was down 9% (7% CC) and ecommerce was
down 4% (2% CC)
* All regions performed in line with our expectations, with EMEA revenue down
16% (actual and CC), Americas revenue declining 22% (20% CC) and APAC down 12%
(7% CC)
* Swift action taken to implement our cost savings plan, which will now deliver
£25m in FY26, at the top end of previous guidance. Tight cost control
throughout the business, with non-demand generating operating costs down
year-on-year
* PBT impacted by reduced revenue, as guided, together with exceptional charges
of £9.2m, largely related to our cost savings plan
* Strengthened balance sheet, with significant reduction in both inventory and
net debt, in line with our plan. Inventory down £69.1m year-on-year driven by
reduced purchases
* Refinance completed successfully, securing a £250.0m loan together with a
£126.5m RCF
* Interim dividend of 0.85p, in line with prior guidance
Current trading and guidance
Trading since the start of the AW24 season has been encouraging, with all
three regions positive, albeit the peak weeks of trading remain ahead of us.
Encouragingly, trading has been driven by good DTC sales of new products
supported by our new product-led marketing approach.
Our guidance for FY25 remains unchanged, with results underpinned by the swift
cost action taken. In addition, to aid investors' understanding of the impact
of foreign exchange rates on our business, we are providing guidance on this
for the first time and will continue to do so going forward. Based on currency
spot rates as at 14 November 2024, we expect a currency headwind to results of
c.£18m to revenue and c.£6m to PBT for FY25.
Detailed financial guidance is on page 13.
Enquiries
Investors and analysts
Bethany Barnes, Director of Investor Relations
Bethany.Barnes@drmartens.com
+44 7825 187465
Beth Fionda, Investor Relations Manager
Beth.Fionda@drmartens.com
Press
H/Advisors Maitland
+44 20 7379 5151
Katharine Spence
+44 7384 535739
Gill Hammond, Director of Communications
+44 7384 214248
Presentation of half year results
Kenny Wilson, CEO and Giles Wilson, CFO will be presenting the H1 FY25 results
virtually at 09:00 (UK time) on 28 November 2024 with a live Q&A session
for analysts and investors. This can be viewed live on the Dr. Martens plc
website https://www.drmartensplc.com (https://www.drmartensplc.com) . A
playback of the presentation will be available on our corporate website after
the event, at https://www.drmartensplc.com/investors/results-centre
(https://www.drmartensplc.com/investors/results-centre) .
About Dr. Martens
Dr. Martens is an iconic British brand founded in 1960 in Northamptonshire.
Produced originally for workers looking for tough, durable boots, the brand
was quickly adopted by diverse youth subcultures and associated musical
movements. Dr. Martens has since transcended its working-class roots while
still celebrating its proud heritage and, six decades later, "Docs" or "DM's"
are worn by people around the world who use them as a symbol of empowerment
and their own individual attitude. The Company listed on the main market of
the London Stock Exchange on 29 January 2021 (DOCS.L) and is a constituent of
the FTSE 250 index.
Cautionary statement relating to forward-looking statements
Announcements, presentations to investors, or other documents or reports filed
with or furnished to the London Stock Exchange (LSE) and any other written
information released, or oral statements made, to the public in the future by
or on behalf of Dr. Martens plc and its group companies ("the Group"), may
contain forward-looking statements.
Forward-looking statements give the Group's current expectations or forecasts
of future events. An investor can identify these statements by the fact that
they do not relate strictly to historical or current facts. They use words
such as 'aim', 'ambition', 'anticipate', 'estimate', 'expect', 'intend',
'will', 'project', 'plan', 'believe', 'target' and other words and terms of
similar meaning in connection with any discussion of future operating or
financial performance. In particular, these include statements relating to
future actions, future performance or results of current and anticipated
products, expenses, the outcome of contingencies such as legal proceedings,
dividend payments and financial results. Other than in accordance with its
legal or regulatory obligations (including under the Market Abuse Regulation,
the UK Listing Rules and the Disclosure and Transparency Rules of the
Financial Conduct Authority), the Group undertakes no obligation to update any
forward-looking statements, whether as a result of new information, future
events or otherwise. The reader should, however, consult any additional
disclosures that the Group may make in any documents which it publishes and/or
files with the LSE. All readers, wherever located, should take note of these
disclosures. Accordingly, no assurance can be given that any particular
expectation will be met and investors are cautioned not to place undue
reliance on the forward-looking statements.
Forward-looking statements are subject to assumptions, inherent risks and
uncertainties, many of which relate to factors that are beyond the Group's
control or precise estimate. The Group cautions investors that a number of
important factors, including those referred to in this document, could cause
actual results to differ materially from those expressed or implied in any
forward-looking statement. Any forward-looking statements made by or on behalf
of the Group speak only as of the date they are made and are based upon the
knowledge and information available to the Directors on the date of this
report.
BUSINESS REVIEW
Performance summary
FY25 is a year of transition for our business as we take action to pivot our
marketing approach, improve our USA business so that it can return to positive
DTC revenue growth in the second half, reduce our cost base and bring down our
inventory balance through reduced purchases, thereby improving our net debt
position. On all four objectives we have made good progress in the first half.
All of these actions will put the business in a much stronger position,
enabling us to return to growth in FY26.
The first half performance was in line with our expectations. Group revenue
declined by 16% CC, compared to guidance for a c.20% decline. By channel, DTC
revenue growth declined by 5% CC and wholesale revenue declined 27% CC.
Our performance by region was also in line with expectations. EMEA revenue
declined by 16% CC, with DTC revenue declining by 8% CC and wholesale down 23%
CC. EMEA Q1 was weaker, particularly retail, however trading improved as we
progressed through Q2 and entered the Autumn/Winter (AW) season; this resulted
in Q2 DTC pairs being back into positive growth. Q1 EMEA DTC was impacted by
the early timing of Easter and sale, as previously disclosed. We also saw a
weaker sandals performance and a promotional competitive backdrop in the half,
particularly in the UK. Our newer conversion markets of Italy, Spain and the
Nordics all showed good growth, whilst Germany revenues were broadly flat. The
decline in EMEA wholesale revenue was again in line with expectations, being
impacted by some shipment timing differences.
Revenue from our Americas region declined 20% CC, with DTC revenue down 4% CC
and wholesale down 34% CC. This performance was in line with expectations and
we continue to expect positive DTC growth in the second half.
APAC, our smallest region, declined 7% CC, with DTC revenue up 4% CC and
wholesale down 24% CC, due to shipment timing differences. We saw a continued
good performance in our Japanese business, which remains a significant growth
driver.
We tightly managed both COGS and operating costs through the half. Despite
inflationary pressures, gross margin declined only slightly, by 0.4%pts, to
64.0%, or by 0.2%pts CC. Operating costs were very well controlled. We
invested an additional £1.8m (CC basis) in demand-generating marketing ahead
of the AW24 season. Non-demand-generating operating costs declined
year-on-year, by £2.3m (CC basis). We will continue to tightly manage costs
and seek efficiencies through the second half, in addition to the cost action
plan discussed below.
Adjusted EBIT was a £2.4m loss on a CC basis, compared to £39.7m profit in
H1 FY24. Adjusted PBT of £16.1m loss on a CC basis was in line with our
expectations. Including exceptional costs (which mainly relate to redundancy
costs as part of the cost action plan incurred at the end of the half) and
currency gains and losses, reported PBT was £27.0m loss on a CC basis.
We have made good progress strengthening our balance sheet in the first half.
Reducing inventory, predominantly through reduced purchases, is a key focus of
the business throughout FY25, and we are confident in our ability to deliver
our target of £40m reduction year-on-year. At the end of the first half,
inventory was flat versus the start of the period and down £69.1m compared to
the same point last year. Net debt also improved, standing at £348.7m at the
end of the half, equating to 2.3 times net debt to EBITDA (covenant
calculation basis). This compares to £478.9m net debt and 2.0 times net debt
to EBITDA at the end of H1 FY24. The first half of our financial year
typically represents our high point for net debt ahead of the peak trading
period in the second half.
We also completed a successful refinance of our debt facilities in November,
ahead of our previous facilities expiring in early 2026. Our previous
facilities comprised a €337.5m term loan and a £200.0m RCF. Our new
facilities comprise a £250.0m term loan and a £126.5m RCF, with an initial
term of three years, with the option to extend both facilities by two
additional one-year terms through to November 2029, subject to lender
approval.
Strategy update
Our focus through the first half has been to pivot our marketing to focus
relentlessly on product, improve our USA DTC business to set it up for growth
in the second half, implement a cost action plan and reduce inventory and net
debt levels. On all four objectives we have made good progress.
Product focused marketing: We have pivoted our marketing away from brand
storytelling focused on culture to instead focus relentlessly on product. This
approach was implemented from July onwards, and as such had limited benefit to
the first half, however we are encouraged by the response to date. The first
three marketing campaigns since August were showcasing new product, driving
strong sales-through performance. In October we launched our 'Boots like no
other' campaign, emphasising the strength of our core iconic boots. This
campaign will be a regular drumbeat throughout the AW season and beyond to
drive sales of our icon products.
We have also restructured our marketing organisation globally to align our
teams with the product organisation, created a Brand Studio to enable global
creative leadership and ensure oversight and changed a number of roles and
responsibilities to leverage the best of our talent globally.
USA action plan: As we detailed in our FY24 results, the USA is our number one
priority across the business and we are implementing a detailed action plan to
return this business to growth, with a target of positive DTC growth in H2
FY25. To support this aim we have also increased the marketing investment as a
percentage of revenue in the USA. Our USA action plan is centred on three
areas:
- Marketing. Our pivot to product-focused marketing has improved
clarity of message. We have increased spend on elevating retail windows,
particularly in key locations, and have also worked in partnership with
wholesale customers to elevate in-store displays. We have also increased paid
social to drive consideration.
- Digital. Focus during the half has been on improving and enhancing
product detail pages (PDPs), including additional video content, virtual try
on and dynamic product recommendations. We have achieved a significant,
double-digit improvement in site conversion rate, as a result of both the
improvements to PDPs together with work optimising the customer journey
through the site. We have also implemented order in store across the USA
retail store estate.
- Wholesale. Given the nature of wholesale order books we will have a lag
between when our USA DTC performance improves and when we see this benefit our
wholesale revenues. Our expectation remains that we won't see an in-market
restock driving a recovery in our USA wholesale revenues until Autumn/Winter25
at the earliest, equating to the second half of FY26. We continue to
anticipate USA wholesale revenues declining double-digit percentage in FY25.
We continue to focus on working in partnership with wholesale customers.
Jennifer Somer, our Americas President, resigned from and left the business in
October 2024. A search for her replacement is underway and in the interim
Kenny Wilson, together with the Global leadership team, are giving additional
support and guidance to the experienced Americas Leadership team.
Cost action plan: We announced in our FY24 results that we would be
implementing a cost action plan across the Group, led by CFO Giles Wilson and
the leadership team. This targeted £20m to £25m of cost reduction to benefit
FY26 onwards, with savings from organisational efficiency and design, better
procurement and operational streamlining. We have taken swift action to
identify and implement cost savings during the first half, without impacting
demand-generating spend and now expect savings of c.£25m in FY26, at the top
of the guidance range. Around two-thirds of the savings are from headcount
reductions, primarily in Group support roles, with the majority of these roles
leaving the business at the end of the first half. The benefit from the cost
savings achieved so far underpins our FY25 performance. We have incurred a
one-off exceptional cash cost in relation to these headcount reductions;
further detail is provided in the Finance Review. The remainder of the cost
savings will be from better procurement, where we are making good progress to
date.
Our product strategy is 'icons and innovation', meaning that we aim to grow
revenue over the medium-term of our iconic continuity products through
constant innovation around this core, to drive brand heat and newness. We aim
to grow all three categories of boots, shoes and sandals simultaneously. As
expected in the first half, pairs declined by 20% year-on-year, with
significant decline in wholesale and DTC pairs declining slightly by 3%. By
category, we saw good growth in shoes, with DTC pairs up 7% and a weaker
sandals performance, with DTC pairs flat, driven by a softer Spring/Summer
season, particularly in EMEA. The sandals performance also comes after several
years of strong growth. Boots pairs declined by 12% DTC, which was in line
with expectations given that the changes to our marketing to drive boots
demand are focused on the Autumn Winter season.
Collaborations act as an incubator for future product success and scale,
whilst at the same time driving brand heat and consumer excitement.
Collaborations released in the half include Supreme on a pack of rub-off 1461
shoes, continuing our long-standing partnership with this iconic skate brand
and with the seminal rock band Nine Inch Nails, with a three-product
collection including a 1460 boot. Recently we launched a capsule collection
with hit Netflix series Wednesday, incorporating four footwear silhouettes, a
backpack and knee-high socks. Included in this range are new models of the
Corran Loafer and Ramsey Creeper, with consumer reaction very positive.
We continue to invest in and improve our systems, to enable growth and drive
efficiency, and are reaching the final period of implementing crucial core
systems for the Group. The two key system projects are the Customer Data
Platform (CDP) and the Supply and Demand Planning System. We have made good
progress with CDP, which gives a single customer view across both DTC
channels, enabling targeted marketing and personalised consumer journeys. CDP
is now live across EMEA and Americas, with the benefits from the new system
building in the seasons ahead as we capture and utilise increasing amounts of
data. The Supply and Demand Planning System is a modern and agile planning
system, which will enable us to generate working capital savings and further
improve availability. This project is expected to go live by the end of H1
FY26, with benefits building over time.
We continue to make good progress with our sustainability agenda. Our UK
Repair service, in partnership with the Boot Repair Company, has now been
operational for a year with very positive consumer feedback. We are looking
to expand this service offering to continental Europe in 2025. Our USA resale
offering, Rewair, has now traded for six months, with encouraging performance
to date, albeit this is relatively small in revenue terms. A significant
proportion of consumers buying second hand footwear through our site are new
consumers. Our intention over the medium-term is to expand a resale offering
to other major markets, building on the learnings from the USA site.
Researching and developing more sustainable materials continues to be an area
of focus for our teams, as part of our long-term target of 100% of footwear
made from sustainable materials by 2040. After the successful introduction of
reclaimed leather Genix Nappa last year we have expanded the range, with
further expansion planned for coming seasons. We are also continuing to
research and test a range of lower impact materials, in both early stage and
at a larger scale.
FINANCE REVIEW
Total revenue declined 18.0% (16.1% CC), driven largely by a 29.0% reduction
in wholesale revenues (27.4% CC), together with a decline in DTC revenue of
6.8% (4.6% CC), all in line with our expectations. Adjusted loss before tax
was £17.9m (H1 FY24: £25.2m profit) and £16.1m loss on a CC basis. The
decline was driven by the revenue reduction with COGS and opex tightly
managed. Adjusted earnings per share was a loss of 1.3p (1.1p loss on a CC
basis), compared to earnings of 1.9p in H1 FY24.
To aid investors' understanding of our performance, we have introduced further
disclosure in constant currency (CC). In previous years we referred only to %
changes in revenue in CC terms. We now show absolute and % change in CC terms
across the P&L. We will adopt this approach going forward.
Results - at a glance
£m H1 FY25 H1 FY24 % change % change
Reported H1 FY25 Reported Reported CC(1,2)
CC(1,2)
Revenue Ecommerce 87.7 89.5 91.7 -4.4% -2.4%
Retail 95.3 97.8 104.7 -9.0% -6.6%
DTC 183.0 187.3 196.4 -6.8% -4.6%
Wholesale(3) 141.6 144.8 199.4 -29.0% -27.4%
324.6 332.1 395.8 -18.0% -16.1%
Gross margin 207.7 213.1 254.9 -18.5% -16.4%
Opex (174.1) (176.8) (177.3) -1.8% -0.3%
Adjusted EBIT(1,5) (4.3) (2.4) 39.7
Currency (losses)/gains (1.6) (1.6) 0.6
Exceptional costs(1) (9.2) (9.3) -
EBIT(1,5) (15.1) (13.3) 40.3
Adjusted (loss)/profit before tax(1,5) (17.9) (16.1) 25.2
(Loss)/profit before tax (28.7) (27.0) 25.8
(Loss)/profit after tax (20.8) 19.0
Adjusted basic (loss)/earnings per share (p)(1,5) (1.3) (1.1) 1.9
Basic (loss)/earnings per share (p) (2.2) 1.9
Dividend per share (p) 0.85 1.56 -45.5%
Key metrics Pairs sold (m) 4.6 5.7 -19.7%
No. of stores(4) 238 225 5.8%
DTC mix % 56.4% 56.4% 49.6% +6.8pts +6.8 pts
Gross margin % 64.0% 64.2% 64.4% -0.4pts -0.2 pts
EBIT margin %(1) -4.7% -4.0% 10.2% -14.9pts -14.2 pts
1. Alternative Performance Measure (APM) as defined in the Glossary on pages
29 to 31.
2. Constant currency applies the prior period exchange rates to current
period results to remove the impact of FX. Previously, we presented this by
applying current period budgeted rates to both the current and prior period.
3. Wholesale revenue including distributor customers.
4. Own stores on streets and malls operated under arm's length leasehold
arrangements.
5. In previous periods EBITDA was presented. However, this has been replaced
with EBIT as it is considered a more relevant performance measure for the
business. The Group has also introduced the use of adjusted performance
measures which are exclusive of the impact of exceptional costs and currency
gains/losses. Refer to the Glossary on pages 29 to 31 for further explanation
of these changes. Prior period amounts have been updated to reflect this
change.
PERFORMANCE BY CHANNEL
Revenue decreased by 18.0% or 16.1% on a CC basis. DTC revenue declined by
6.8% or 4.6% on a CC basis, representing 56.4% of revenue mix. Wholesale
revenues declined by 29.0% or 27.4% on a CC basis, in line with expectations
and driven principally by USA wholesale. Volume, represented by pairs sold,
declined 19.7% to 4.6m pairs with the reduction largely occurring in
wholesale, down 29.9%. Given the lag in wholesale performance in our business,
the more meaningful metric is DTC pairs which declined 3.1%.
Ecommerce revenue was down 4.4% or 2.4% on a CC basis to represent 27.0% of
revenue mix (H1 FY24: 23.2%). Double-digit growth in APAC was offset by weaker
trading in EMEA. In EMEA we saw an improved ecommerce performance in Q2,
driving Group ecommerce Q2 revenue growth of 1.6% on a CC basis. In Americas
across the first half, ecommerce revenue was marginally positive on a CC
basis. Ecommerce conversion improved in both EMEA and Americas. Following the
successful implementation last year of an order management system ('OMS'),
enabling a full omnichannel offer across all UK stores, we have now expanded
this capability to the majority of our EMEA stores with the remainder to go
live by the end of FY25.
Retail revenue fell 9.0% or 6.6% on a CC basis. Retail was challenging in all
regions, particularly in Q1, driven by weak footfall, however we saw an
improvement in the latter part of Q2. During the half year we opened 10 new
stores and closed 11 stores to end the period with 238 own stores. Of the 11
stores closed during the half, four were as a result of site relocations. The
remainder were spread across multiple markets and were the result of normal
store portfolio management.
Wholesale revenue was down 29.0% or 27.4% on a CC basis. This was driven by
the USA where, as previously disclosed, there has been widespread caution
amongst wholesale customers, resulting in a significantly weaker order book
year-on-year. We continue to expect that it will be H2 FY26 at the earliest,
corresponding to AW25, before we see a positive performance in USA wholesale.
EMEA wholesale declined by 23.0% CC, predominantly impacted by shipment timing
differences.
PERFORMANCE BY REGION
We have changed our segmental reporting from EBITDA to EBIT. We believe that
EBIT represents a more relevant underlying earnings indicator given it
includes depreciation and amortisation, including IFRS 16 lease depreciation.
Regional EBIT therefore shows the results of core operations excluding only
income or charges related to capital and tax costs. For comparative purposes,
historical regional EBIT is disclosed on page 13.
H1 FY25 H1 FY24 % change % change
£m Actual CC(1)
Revenue: EMEA 162.4 194.2 -16.4% -15.5%
Americas 114.7 147.7 -22.3% -20.2%
APAC 47.5 53.9 -11.9% -6.9%
324.6 395.8 -18.0% -16.1%
EBIT(1,3): EMEA 22.4 40.0 -44.0%
Americas (7.7) 17.3 -144.5%
APAC 2.3 7.7 -70.1%
Support costs(2) (32.1) (24.7) 30.0%
(15.1) 40.3 -137.5%
Adjusted EBIT(1,3): EMEA 23.1 40.0 -42.3%
Americas (6.6) 17.3 -138.2%
APAC 2.7 7.7 -64.9%
Support costs(2) (23.5) (25.3) -7.1%
(4.3) 39.7 -110.8%
EBIT(1,3) margin by region: EMEA 13.8% 20.6% -6.8pts
Americas -6.7% 11.7% -18.4pts
APAC 4.8% 14.3% -9.5pts
Total -4.7% 10.2% -14.9pts
Adjusted EBIT(1,3) margin by region: EMEA 14.2% 20.6% -6.4pts
Americas -5.8% 11.7% -17.5pts
APAC 5.7% 14.3% -8.6pts
Total -1.3% 10.0% -11.3pts
1. Alternative Performance Measure (APM) as defined in the Glossary on pages
29 to 31.
2. Support costs represent group related support costs not directly
attributable to each region's operations and including Group Finance, Legal,
Group HR, Global Brand and Design, Directors, Global Supply Chain and other
group only related costs and expenses.
3. In previous periods EBITDA was presented. However, this has been replaced
with EBIT as it is considered a more relevant performance measure for the
business. The Group has also introduced the use of adjusted performance
measures which are exclusive of the impact of exceptional costs and currency
gains/losses. Refer to the Glossary on pages 29 to 31 for further explanation
of these changes. Prior period amounts have been updated to reflect this
change.
EMEA Revenue declined 16.4% to £162.4m, or 15.5% on a CC basis. DTC declined
by 8.6% (7.8% CC) with retail and ecommerce down 8.1% and 9.3% respectively
(7.1% and 8.6% CC). EMEA DTC was impacted by the early timing of Easter and
sale (which both impacted Q1), together with a weaker sandals performance and
a highly promotional competitive backdrop, particularly in the UK. We saw good
growth in the newer conversion markets of Italy, Spain and the Nordics, whilst
Germany revenue was broadly flat in H1. EMEA wholesale revenue declined by
23.9% as expected, being impacted by some shipment timing differences. EMEA
DTC mix grew by 4.5pts to 53.6%.
During the half year we opened four new stores: one store in each of France,
Austria, Sweden and the Netherlands. We closed five stores, with four of these
being relocations.
EMEA adjusted EBIT was £23.1m (H1 FY24: £40.0m) driven by the revenue
decline, with costs tightly managed.
Americas Revenue declined 22.3% to £114.7m, or 20.2% CC. DTC revenue declined
by 6.3% (4.4% CC), with broadly flat ecommerce revenues (down 1.7% reported or
up 0.6% CC) offset by retail decline of 11.4% (9.9% CC) driven by weaker
footfall. Americas wholesale revenue declined 34.0% on a CC basis in line with
our expectations, as previously disclosed, due to the order book reflecting
caution from wholesale customers.
During the year we opened one new store in LA and closed two underperforming
stores where traffic had permanently changed post covid.
Americas adjusted EBIT was a loss of £6.6m (H1 FY24: £17.3m profit) due to
the decline in revenue combined with increased marketing investment.
APAC Revenue declined by 11.9% to £47.5m or 6.9% CC. This was driven
predominantly by a wholesale reduction of 25.8% (23.5% CC), as expected, with
wholesale revenue declines in Japan (due to shipment timing) and Korea. DTC
revenues fell 2.8% but grew 4.0% CC. DTC mix increased by 6.3pts to 66.7%, as
a result of the decrease in wholesale revenue. Retail declined 7.4% (flat CC),
whilst ecommerce revenue was up 4.8% (10.5% CC). The retail decline was driven
by weak traffic across the region, with the largest impact seen in China and
Hong Kong. Ecommerce growth was driven by a good performance in Japan.
During the half year we opened five new stores, with three in Japan and two in
China. In Japan, in addition to the owned store openings, we opened two new
franchise stores, with a healthy pipeline of both DTC and franchise stores in
this market. We closed four own stores and seven franchise stores in APAC as
part of normal store portfolio management.
APAC adjusted EBIT was £2.7m (H1 FY24: £7.7m) due to deleverage as a result
of the revenue decline.
Adjusted group support costs were tightly managed, declining 7.1% to £23.5m.
RETAIL STORE ESTATE
During the half year, we opened 10 (H1 FY24: 25) new own retail stores (via
arm's length leasehold arrangements) and closed 11 stores (H1 FY24: 4) as
follows below. Four of the closures were the result of relocations.
Opened Closed 29 September 2024
1 April
2024
EMEA: UK 35 - (1) 34
Germany 19 - (1) 18
France 17 1 - 18
Italy 12 - - 12
Spain 6 - - 6
Other 13 3 (3) 13
102 4 (5) 101
Americas: 61 1 (2) 60
APAC: Japan 43 3 (2) 44
China 9 2 (1) 10
South Korea 17 - (1) 16
Hong Kong 7 - - 7
76 5 (4) 77
Total 239 10 (11) 238
The Group also trades from 21 (FY24: 22) concession counters in department
stores in South Korea and a further 76 (FY24: 77) mono-branded franchise
stores around the world with no stores in China (FY24: none) due to the end of
the distributor contract in H2 FY24, 19 in Japan (FY24: 19), 23 across
Australia and New Zealand (FY24: 24), 34 across other South East Asia
countries, the Nordics and Canada (FY24: 34).
ANALYSIS OF PERFORMANCE BY QUARTER
Our DTC performance was in line with expectations. Q1 was impacted by the
earlier timing of Easter and sale, which fell in Q4 FY24 (as opposed to Q1 as
is typically the case). DTC Revenue in Q2 showed an improvement from Q1 driven
by ecommerce performance, which grew 1.6% CC in Q2, compared to a 7.1% CC
decline in Q1. Retail also showed an improving trend, albeit still negative in
both quarters.
Wholesale also performed in line with expectations, with a weak order book in
Americas, as previously guided, together with some shipment timing differences
in EMEA.
Q1 Q2
Actual CC Actual CC
Total Revenue -17.6% -15.8% -18.2% -16.3%
Revenue: Ecommerce -8.8% -7.1% -0.6% 1.6%
Retail -9.7% -7.3% -8.3% -6.2%
DTC -9.3% -7.2% -4.6% -2.4%
Wholesale(1) -35.0% -33.9% -27.3% -25.6%
Region: EMEA -13.8% -13.1% -17.5% -16.7%
Americas -26.2% -25.8% -20.2% -17.2%
APAC -7.7% -0.5% -15.0% -12.0%
PROFITABILITY ANALYSIS
Gross margin declined by 0.4pts to 64.0% or by 0.2pts on a CC basis. Opex
(excluding exceptional items) declined by 1.8%, or £3.2m, to £174.1m on an
actual currency basis. Within this, demand generating opex increased slightly
due to investment into marketing and digital, particularly in the USA, whilst
opex not linked to demand generation was very tightly controlled across the
business and declined year-on-year.
EBITDA 1 decreased by 68.6% to £24.4m (H1 FY24: £77.6m), due to the
operational deleverage from reduced revenues, despite tight cost control.
EBIT(1) decreased by 137.5% to a loss of £15.1m as a result of the decline in
EBITDA together with £1.3m impairment (H1 FY24: £nil) and currency losses of
£1.6m (H1 FY24: £0.6m gain).
(Loss)/profit after tax is analysed in the following table from EBITDA:
£m H1 FY25 H1 FY24
EBITDA(1) 24.4 77.6
Depreciation and amortisation (36.8) (37.9)
Impairment (1.3) -
Other gains 0.2 -
Currency (losses)/gains (1.6) 0.6
EBIT(1) (15.1) 40.3
Add back: exceptional costs(1) and currency losses/gains 10.8 (0.6)
Adjusted EBIT(1) (4.3) 39.7
Net interest cost on bank debt (9.3) (9.1)
Amortisation of loan issue costs/interest on lease liabilities (4.3) (5.4)
(Loss)/profit before tax (28.7) 25.8
Add back: exceptional costs(1) and currency losses/gains 10.8 (0.6)
Adjusted (loss)/profit before tax(1) (17.9) 25.2
Tax 7.9 (6.8)
(Loss)/profit after tax (20.8) 19.0
1. Alternative Performance Measure (APM) as defined in the Glossary on pages
29 to 31.
Depreciation and amortisation charged in the period was £36.8m, (H1 FY24
£37.9m), driven by intangible asset movement and retail software coming to
the end of its useful economic life during the period partially offset by
additions replacing these assets, and is analysed as follows:
£m H1 FY25 H1 FY24
Amortisation of intangibles(1) 3.0 4.6
Depreciation of property, plant and equipment(2) 7.6 7.9
10.6 12.5
Depreciation of right-of-use assets(3) 26.2 25.4
Total 36.8 37.9
1. Mainly represented by IT related spend with the average useful term of 5 to
15 years.
2. Mainly represented by office and store fit out costs with a useful term of
3 to 15 years.
3. Mainly represented by depreciation of IFRS 16 capitalised leases with the
average useful term remaining of 3.4 years and 261 properties (H1 FY24: 4.3
years and 301 properties).
Foreign currency
Dr. Martens is a global brand selling to consumers across the world in many
different currencies, with the Financial Statements reported in GBP. Foreign
currency amounts in the profit or loss account are prepared on an average
actual currency rate basis for the half year. These exchange rates are
calculated monthly and applied to revenue and costs generated in that month,
such that the actual performance translated across the year is dependent on
monthly trading profiles as well as movement in currency exchange rates. To
aid comparability of underlying performance, we have also calculated constant
currency movements across the P&L, which is calculated by applying the
prior period exchange rates to current period results to remove the impact of
FX. Previously, we presented this by applying current period budgeted rates to
both the current and prior period, but believe the new methodology provides a
more relevant view of performance versus actual prior period results.
Exchange rates mainly impacting the Group are GBP/USD, GBP/EUR and GBP/JPY.
The following table summarises average exchange rates used in the half year:
GBP/USD GBP/EUR GBP/JPY
FY25 FY24 % FY25 FY24 % FY25 FY24 %
H1 1.28 1.26 2% 1.18 1.16 2% 195 178 10%
H2 - 1.26 - - 1.16 - - 186 -
FY 1.28 1.26 2% 1.18 1.16 2% 195 182 7%
The Group takes a holistic approach to exchange rate risk, monitoring
exposures on a Group-wide, net cashflow basis, seeking to maximise natural
offsets wherever possible. While COGS purchases for the Group are
predominantly denominated in USD, currency risk is partially offset from USD
revenues earned in Americas and from distributor revenues, which are also
largely USD denominated. Where a net foreign currency exposure is considered
material, the Group seeks to reduce volatility from exchange movements by
using derivative financial instruments. During the period, a £1.2m gain (H1
FY24: £0.3m gain) was recorded in revenues related to derivatives partially
hedging the net EUR inflows.
Retranslation of foreign currency denominated monetary assets and liabilities
in the half year resulted in a currency loss of £1.6m (H1 FY24: gain of
£0.6m). This was predominantly due to the revaluation of receivable balances
following the appreciation of GBP against EUR and USD.
Interest
The Group's exposure to changes in interest rates relates primarily to cash
investments, borrowings, and IFRS 16 lease liabilities. Total Group net
interest costs for the period were £13.6m, lower than the prior period (H1
FY24: £14.5m) primarily due to lower interest on lease liabilities. We saw
increased interest amounts related to a higher floating EURIBOR rate on the
Group's Term Loan, which were offset by an absence of RCF drawing costs
compared to the prior period.
Exceptional costs(1)
In May 2024, the Group announced it would be undertaking a cost action plan
with benefits of savings from FY26. This plan targeted savings of £20-25m on
a full year basis. We have taken swift action to identify and implement
savings in the first half and now expect annualised savings of c.£25m in
FY26.
In H1 FY25, the Group incurred exceptional costs(1) of £9.2m (H1 FY24:
£nil), of which £6.1m related to the cost action plan, primarily headcount
reduction costs. The balance relates to one-off director joining costs
relating to the new CFO and incoming CEO.
£m H1 FY25 H1 FY24
Included in operating expenses
Director joining costs 3.1 -
Cost action plan related costs 6.1 -
9.2 -
Adjustments to EBIT 9.2 -
Adjustments to profit before tax 9.2 -
1. Alternative Performance Measure (APM) as defined in the Glossary on pages
29 to 31.
Tax was a credit of £7.9m (H1 FY24: £6.8m charge) with an effective tax rate
of 27.5% (H1 FY24: 26.4%) which is slightly higher than the UK corporate tax
rate of 25.0%, due mainly to overseas tax rates and deferred tax on temporary
differences.
Loss per share (basic) was 2.2p (H1 FY24: 1.9p earnings), or 1.3p loss on an
adjusted basis. EPS and diluted EPS for the prior period are similar numbers
due to the minimal dilutive impact of share options on the total diluted share
number. There continues to be a minimal dilutive impact of share options for
the current period, however EPS and diluted EPS are the same for the current
period due a loss in the first half. The following table summarises these EPS
figures:
H1 FY25 pence H1 FY25 pence H1 FY24 pence
Reported CC(1)
(Loss)/earnings per Adjusted basic(1) (1.3) (1.1) 1.9
share Basic (2.2) (2.0) 1.9
Diluted (2.2) (2.0) 1.9
1. Alternative Performance Measure (APM) as defined in the Glossary on pages
29 to 31.
CASH FLOWS
£m H1 FY25 H1 FY24
EBITDA(1) 24.4 77.6
Decrease/(increase) in inventories 0.4 (55.5)
Increase in debtors (22.1) (28.5)
Increase/(decrease) in creditors 32.2 (3.6)
Total change in net working capital 10.5 (87.6)
Share-based payments 3.5 1.9
Capex (11.0) (16.3)
Operating cash flow(1) 27.4 (24.4)
Operating cash flow conversion(1,2) 112.3% -31.4%
Net interest paid (9.6) (7.3)
Payment of lease liabilities (28.4) (25.3)
Taxation paid (3.2) (15.4)
Repurchase of shares - (20.4)
Derivatives settlement 0.1 -
Net revolving credit facility drawdown - 25.0
Dividends paid - (42.8)
Net cash outflow (13.7) (110.6)
Opening cash 111.1 157.5
Net cash exchange translation (2.5) (1.2)
Closing cash 94.9 45.7
1. Alternative Performance Measure (APM) as defined in the Glossary on pages
29 to 31.
2. Adjusted operating cash flow conversion(1) is 90.8% (H1 FY24: -31.4%).
Operating cash flow(1) generated an inflow of £27.4m (H1 FY24: outflow of
£24.4m), impacted by positive working capital cash inflows of £10.5m (H1
FY24: outflow of £87.6m). Inventory levels have declined by £0.4m during the
period (H1 FY24: £55.5m increase) due to reduced purchases in line with the
target to reduce inventory in FY25. Compared to the end H1 FY24 balance sheet
position, inventory levels have declined by £69.1m.
Debtors have increased by £22.1m (H1 FY24: £28.5m increase), predominantly
driven by wholesale customer order fulfilment ahead of peak in line with the
Group's ordinary trading cycle. Creditors have increased by £32.2m (H1 FY24:
£3.6m decrease) due to timing of payments over the reporting date, and
accruals recognised relating to the cost action plan.
Trade debtor days reduced to 49 days (H1 FY24: 53 days), largely due to a
decline in the Americas region, where debtor days decreased from 65 to 54.
This marks a return to normalised debtor days, following a period of inflated
debtor days in the previous year.
Capex was £11.0m (H1 FY24: £16.3m) and represented 3.4% of revenue (H1 FY24:
4.1%). The breakdown in capex by category is as follows:
£m H1 FY25 H1 FY24
Retail stores 3.2 8.8
Supply Chain 0.9 0.1
IT/Tech 6.9 7.4
11.0 16.3
Interest paid was £11.2m, (H1 FY24: £9.1m) higher than H1 FY24 by £2.1m due
to higher interest rates. Interest received remained broadly flat,
representing interest on short term deposits.
Payment of lease liabilities was £28.4m (H1 FY24: £25.3m) higher than H1
FY24 by £3.1m primarily due to annualisation of additions in the previous
year.
Funding and Leverage
The Group is funded by cash, bank debt and equity. Further details on the
capital structure and debt are given in note 9 of the Financial Statements. At
29 September 2024, the Group's bank loan was denominated in EUR and valued at
£281.7m (€337.5m) excluding unamortised bank fees (H1 FY24: £292.5m).
Attached to this was a revolving credit facility (RCF) of £200.0m. Included
in this facility was a committed line of £3.4m (H1 FY24: £3.3m) used for
guarantee arrangements, primarily in relation to landlord rent guarantees.
This loan was originally due for repayment in February 2026, but has since
been refinanced; see more information below.
The Group financing arrangements are subject to a total net leverage covenant
test every six months. The total net leverage test is calculated with a full
12 months of EBITDA (covenant calculation basis) and net debt being inclusive
of IFRS 16 lease liabilities at the balance sheet date. As at 29 September
2024, the Group had total net leverage of 2.3 times (FY24 H1: 2.0 times).
Refinancing
Since the half year end the Group has successfully negotiated with existing
and new lenders to refinance its debt facilities, with the new facilities
drawn on 19 November 2024. The new debt facilities are entirely GBP
denominated and consist of a £250.0m term loan and £126.5m RCF for an
initial term of three years, with the option to extend both facilities by two
additional one-year terms through to November 2029, subject to lender
approval. The facilities are subject to a Net Debt/EBITDA leverage covenant of
<3x.
BALANCE SHEET
£m 29 September 2024 30 September 31 March
2023 2024
Freehold property 6.7 7.4 7.0
Right-of-use assets 153.4 195.0 173.5
Other fixed assets 79.3 81.8 81.7
Inventory 245.4 314.5 254.6
Debtors 92.5 119.8 70.4
Creditors(1) (144.5) (132.8) (100.7)
Working capital 193.4 301.5 224.3
Other(2) 7.8 13.2 (1.5)
Operating net assets 440.6 598.9 485.0
Goodwill 240.7 240.7 240.7
Cash 94.9 45.7 111.1
Bank debt (281.7) (317.5)(3) (288.6)
Unamortised bank fees 1.9 2.9 2.3
Lease liabilities (161.9) (207.1) (182.3)
Net assets/equity 334.5 363.6 368.2
1. Includes bank interest of £8.0m (H1 FY24: £8.0m, FY24: £8.4m).
2. Other includes investments, deferred tax assets, income tax assets, income
tax payables, deferred tax liabilities, and provisions.
3. Includes drawdown on RCF facility at 30 September 2023 of £25.0m.
Inventory
As previously disclosed, inventory levels were elevated in FY24 and reducing
inventory by £40m is a key target for FY25. We made good progress on this
objective in H1 FY25, with inventory broadly flat compared to the 31 March
2024 position (if FX rates are adjusted for), and down £69.1m year-on-year.
29 September 2024 30 September 31 March
£m 2023 2024
Inventory (£m) 245.4 314.5 254.6
Turn (x)(1) 1.2x 1.2x 1.2x
Weeks cover(2) 42 45 44
1. Calculated as historic LTM COGS divided by average LTM inventory.
2. Calculated as 52 weeks divided by inventory turn.
Net Debt
Another focus through FY25 is a reduction in our net debt, and we again made
good progress in the first half, particularly given that the net debt position
at the half year point typically marks the high point through our annual cash
cycle, with overall net debt reducing year on year by £130.2m.
£m 29 September 2024 30 September 31 March
2023 2024
Bank loans (excluding unamortised bank fees) (281.7) (317.5)(2) (288.6)(3)
Cash 94.9 45.7 111.1
Net bank loans (186.8) (271.8) (177.5)
Lease liabilities (161.9) (207.1) (182.3)
Net Debt(1) (348.7) (478.9) (359.8)
1. Alternative Performance Measure (APM) as defined in the Glossary on pages
29 to 31.
2. Includes drawdown on RCF facility at 30 September 2023 of £25.0m.
3. Previously reported net of unamortised bank fees of £2.3m.
Lease liabilities
New lease commitments and remeasurements during the period were £9.9m,
largely relating to £5.9m additions. This was offset by £28.4m of lease
repayments. Average lease length is relatively low, at 2.8 years to break,
with the average lease length we expect to utilise being 3.3 years reflected
on the balance sheet.
31 March Average lease length to break (years)
£m 29 September 2024 2024
Stores 115.0 123.3 3.0
Offices, warehouses and other 46.9 59.0 2.0
Lease liabilities 161.9 182.3 2.8
Equity of £334.5m can be analysed as follows:
29 September 2024 31 March
£m 2024
Share capital 9.6 9.6
Hedging reserve 1.8 0.9
Capital redemption reserve 0.4 0.4
Merger reserve (1,400.0) (1,400.0)
Non-UK translation reserve 2.6 9.7
Retained earnings 1,720.1 1,747.6
Equity 334.5 368.2
RETURNS TO SHAREHOLDERS
Our capital allocation philosophy guides our view of returns to shareholders
and usage of excess cash. The first priority is to use excess cash for
business priorities and we will continue to invest in a targeted manner to
support long-term growth and resilience of the Group. Beyond this, our
priority is to return excess cash to shareholders through a regular dividend
and, when possible, further returns.
Dividends
At the FY24 results in May, the Board shared the intention to hold the FY25
dividend flat to FY24 in absolute terms, at 2.55p, before returning to an
earnings payout in line with our dividend policy (of 25% to 35% payout) in
FY26 onwards. We also shared that going forward we would adopt a consistent
approach to setting the interim dividend, with this dividend set at one-third
of the previous year's total dividend. Finally, we announced changes to the
dividend payment dates to better reflect the trading cash profile of the
Group.
In line with this guidance, the Board declares an interim dividend of 0.85p,
being one-third of the FY24 total dividend of 2.55p. This will be paid to
shareholders on the register as at 7 March 2025 with payment on 8 April 2025.
£m H1 FY25 H1 FY24 FY24
Dividends paid during the period/year:
Prior period/year final dividend paid -(1) 42.8 42.8
Interim dividend paid - - 15.0(2)
Total dividends paid during the period/year - 42.8 57.8
(Loss)/profit for the period/year (20.8) 19.0 69.2
Dividend in respect of the period/year:
Interim dividend: 0.85p (Sep 23: 1.56p, Mar 24: 1.56p) 8.2 15.4(2) 15.0(2)
Final dividend: nil (Sep 23: nil, Mar 24: 0.99p) - - 9.5
Total dividend in respect of the period/year 8.2 15.4 24.5
Payout ratio % (39%) 81% 35%
1. The dividend in relation to the year ended 31 March 2024 of £9.5m was paid
on 1 October 2024.
2. The FY24 interim dividend was originally expected to be £15.4m when
disclosed for the six months ended 30 September 2023. During H2 FY24 there was
a reduction in the number of shares outstanding between the date the dividend
was declared and the date for shareholders to be on the register to receive
payment. This resulted in a £15.0m dividend payment.
HISTORICAL EBIT ANALYSIS
As the Group has moved from EBITDA to EBIT disclosure for segmental reporting,
historical data on this basis has been provided below alongside revenue for
comparability across periods.
H1 FY25 FY24 H1 FY24 FY23 H1 FY23 % change % change
Actual CC
£m Revenue EMEA 162.4 431.8 194.2 443.0 179.0 -16.4% -15.5%
(Reported): Americas 114.7 325.8 147.7 428.2 179.7 -22.3% -20.2%
APAC 47.5 119.5 53.9 129.1 59.9 -11.9% -6.9%
£m EBIT: EMEA 22.4 109.7 40.0 120.7 41.3 -44.0%
Americas (7.7) 41.7 17.3 80.7 34.6 -144.5%
APAC 2.3 22.1 7.7 25.5 9.3 -70.1%
% EBIT EMEA 13.8% 25.4% 20.6% 27.2% 23.1% -6.8pts
Margin: Americas -6.7% 12.8% 11.7% 18.8% 19.3% -18.4pts
APAC 4.8% 18.5% 14.3% 19.8% 15.5% -9.5pts
FY25 GUIDANCE
Our key targets for FY25 are unchanged:
- Positive USA DTC growth in the second half
- Inventory declining by c.£40m
- Net debt declining to £310m to £330m (including lease
liabilities)
Alongside this, our guidance for FY25 is:
- USA wholesale revenue declining double-digit percentage in FY25
- New own store openings of around 15 (previous guidance of 25 to 30)
- Depreciation and Amortisation of £75m to £80m
- Net finance costs of £27m to £30m
- Blended tax rate of c.27%
- Capex of around £30m, compared to previous guidance for around
£40m, with the reduction driven by reduced new store openings planned
- Exceptional costs of around £15m
In addition to the introduction of constant currency reporting, we are also
providing guidance on the potential FX impact for FY25, in order to aid
investor understanding of the business. Based on currency spot rates as at 14
November 2024, we expect a currency headwind to results of c.£18m to revenue
and c.£6m to PBT for FY25. FX revenue sensitivities are as follows: for every
1%pt movement in US dollar c.£3.5m; Japanese Yen c.£0.5m and Euro
c.£2.5m.
PRINCIPAL RISKS
The Board considers that the principal risks and uncertainties which could
impact the Group over the remaining half of the financial year are unchanged
from the risks presented in the 2024 Annual Report. The principal risks are
summarised as: brand and product; social and environmental; people, culture
and change; supply chain; information and cyber security; financial; legal and
compliance; and macroeconomic uncertainty. These are detailed on pages 38 to
43 of the 2024 Annual Report, a copy of which is available on the Company's
website at www.drmartensplc.com.
Condensed Consolidated Statement of Profit or Loss
For the 26 weeks ended 29 September 2024
Note Unaudited 26 weeks ended 29 September 2024 Unaudited six months ended 30 September 2023 £m Audited year ended 31 March 2024
£m £m
Revenue 3 324.6 395.8 877.1
Cost of sales (116.9) (140.9) (301.9)
Gross margin 207.7 254.9 575.2
Selling and administrative expenses (222.8) (214.6) (453.0)
Finance income 1.7 1.7 3.0
Finance expense 5 (15.3) (16.2) (32.2)
(Loss)/profit before tax (28.7) 25.8 93.0
EBIT(1,2) 3 (15.1) 40.3 122.2
Net finance expense (13.6) (14.5) (29.2)
(Loss)/profit before tax (28.7) 25.8 93.0
Tax credit/(expense) 6 7.9 (6.8) (23.8)
(Loss)/profit after tax for the period (20.8) 19.0 69.2
1. Alternative Performance Measure (APM) as defined in the Glossary on pages
29 to 31.
2. In previous periods EBITDA was presented. However, this has been replaced
with EBIT as it is considered a more relevant performance measure for the
business. Refer to the Glossary on pages 29 to 31 for further explanation of
the change. Prior period amounts have been updated to reflect this change and
were therefore unaudited in the prior periods.
Reconciliation of adjusted EBIT(1): Note Unaudited 26 weeks ended 29 September 2024 Audited year ended 31 March 2024
£m Unaudited six months ended 30 September 2023 £m
£m
EBIT(1,2) 3 (15.1) 40.3 122.2
Exceptional costs(1) 4 9.2 - -
Currency losses/(gains) 1.6 (0.6) 4.2
Adjusted EBIT(1) - non-GAAP measure (4.3) 39.7 126.4
Reconciliation of adjusted (loss)/profit before tax(1): Note
(Loss)/profit before tax (28.7) 25.8 93.0
Exceptional costs(1) 4 9.2 - -
Currency losses/(gains) 1.6 (0.6) 4.2
Adjusted (loss)/profit before tax(1) - non-GAAP measure (17.9) 25.2 97.2
(Loss)/earnings per share Unaudited 26 weeks ended 29 September 2024 Audited year ended 31 March 2024
Unaudited six months ended 30 September 2023
Basic (loss)/earnings per share (2.2p) 1.9p 7.0p
Diluted (loss)/earnings per share (2.2p) 1.9p 7.0p
Adjusted (loss)/earnings per share(1) - non-GAAP measure
Adjusted basic (loss)/earnings per share(1) (1.3p) 1.9p 7.4p
Adjusted diluted (loss)/earnings per share(1) (1.3p) 1.9p 7.3p
The results for the periods presented above are derived from continuing
operations and are entirely attributable to the owners of the Parent Company.
The notes on pages 19 to 27 form part of these Condensed Consolidated
Financial Statements.
Condensed Consolidated Statement of Comprehensive Income
For the 26 weeks ended 29 September 2024
Unaudited 26 weeks ended 29 September 2024 Unaudited six months ended 30 September 2023 Audited year ended 31 March 2024
£m £m £m
(Loss)/profit after tax for the period (20.8) 19.0 69.2
Other comprehensive (expense)/income
Items that may subsequently be reclassified to profit or loss
Foreign currency translation differences (7.1) 1.2 (2.8)
Cash flow hedges: Fair value movements in equity (1.5) (0.7) (1.8)
Cash flow hedges: Reclassified and reported in profit or loss 2.9 2.3 3.9
Tax in relation to share schemes (0.7) (0.1) 0.5
Tax in relation to cash flow hedges (0.5) (0.3) (0.7)
(6.9) 2.4 (0.9)
Total comprehensive (expense)/income for the period (27.7) 21.4 68.3
The notes on pages 19 to 27 form part of these Condensed Consolidated
Financial Statements.
Condensed Consolidated Balance Sheet
As at 29 September 2024
Note Unaudited Unaudited Audited
29 September 2024 30 September 2023 31 March
£m £m 2024
£m
ASSETS
Non-current assets
Intangible assets 273.8 265.5 270.0
Property, plant and equipment 8 52.9 64.4 59.4
Right-of-use assets 8 153.4 195.0 173.5
Investments 1.0 1.0 1.0
Derivative financial assets 0.2 - 0.1
Deferred tax assets 15.1 11.0 11.2
496.4 536.9 515.2
Current assets
Inventories 245.4 314.5 254.6
Trade and other receivables 89.8 121.6 68.8
Income tax assets 3.4 8.7 1.2
Derivative financial assets 2.5 1.0 1.5
Cash and cash equivalents 94.9 45.7 111.1
436.0 491.5 437.2
Total assets 932.4 1,028.4 952.4
LIABILITIES
Current liabilities
Trade and other payables (132.5) (124.8) (92.2)
Borrowings 9 (8.0) (33.0) (8.4)
Lease liabilities (43.8) (40.0) (47.0)
Derivative financial liabilities (4.0) (2.8) (0.1)
Income tax payable (4.5) (0.8) (5.8)
(192.8) (201.4) (153.5)
Non-current liabilities
Borrowings 9 (279.8) (289.6) (286.3)
Lease liabilities (118.1) (167.1) (135.3)
Provisions (7.2) (4.9) (6.3)
Derivative financial liabilities - - -
Deferred tax liabilities - (1.8) (2.8)
(405.1) (463.4) (430.7)
Total liabilities (597.9) (664.8) (584.2)
Net assets 334.5 363.6 368.2
EQUITY
Equity attributable to the owners of the Parent
Ordinary share capital 12 9.6 9.9 9.6
Treasury shares 13 - (2.0) -
Hedging reserve 1.8 0.8 0.9
Capital redemption reserve 0.4 0.1 0.4
Merger reserve (1,400.0) (1,400.0) (1,400.0)
Foreign currency translation reserve 2.6 13.7 9.7
Retained earnings 1,720.1 1,741.1 1,747.6
Total equity 334.5 363.6 368.2
The notes on pages 19 to 27 form part of these Condensed Consolidated
Financial Statements.
Condensed Consolidated Statement of Changes in Equity
For the 26 weeks ended 29 September 2024
Ordinary share capital Treasury shares Hedging reserve Merger reserve Foreign currency translation reserve Retained earnings Total equity
Capital redemption reserve
Note(s) £m £m £m £m £m £m £m £m
At 1 April 2023 10.0 - (0.5) - (1,400.0) 12.5 1,782.2 404.2
Profit after tax for the period - - - - - - 19.0 19.0
Other comprehensive income/(expense) - - 1.3 - - 1.2 (0.1) 2.4
Total comprehensive income for the period - - 1.3 - - 1.2 18.9 21.4
Dividends paid 7 - - - - - - (42.8) (42.8)
Shares issued 12 - - - - - - - -
Share-based payments - - - - - - 1.9 1.9
Repurchase of ordinary share capital 13 - (20.9) - - - - (0.2) (21.1)
Cancellation of repurchased ordinary share capital 12, 13 (0.1) 18.9 - 0.1 - - (18.9) -
At 30 September 2023 9.9 (2.0) 0.8 0.1 (1,400.0) 13.7 1,741.1 363.6
Profit after tax for the period - - - - - - 50.2 50.2
Other comprehensive income/(expense) - - 0.1 - - (4.0) 0.6 (3.3)
Total comprehensive income/(expense) for the period - - 0.1 - - (4.0) 50.8 46.9
Dividends paid 7 - - - - - - (15.0) (15.0)
Shares issued 12 - - - - - - - -
Share-based payments - - - - - - 2.1 2.1
Repurchase of ordinary share capital 13 - (29.1) - - - - (0.3) (29.4)
Cancellation of repurchased ordinary share capital 12, 13 (0.3) 31.1 - 0.3 - - (31.1) -
At 31 March 2024 9.6 - 0.9 0.4 (1,400.0) 9.7 1,747.6 368.2
Loss after tax for the period - - - - - - (20.8) (20.8)
Other comprehensive income/(expense) - - 0.9 - - (7.1) (0.7) (6.9)
Total comprehensive income/(expense) for the period - - 0.9 - - (7.1) (21.5) (27.7)
Dividends payable 7 - - - - - - (9.5) (9.5)
Shares issued 12 - - - - - - - -
Share-based payments - - - - - - 3.5 3.5
At 29 September 2024 9.6 - 1.8 0.4 (1,400.0) 2.6 1,720.1 334.5
The notes on pages 19 to 27 form part of these Condensed Consolidated
Financial Statements.
Condensed Consolidated Statement of Cash flows
For the 26 weeks ended 29 September 2024
Unaudited 26 weeks ended 29 September 2024 Unaudited six months ended 30 September 2023
£m £m
Note
(Loss)/profit after tax for the period (20.8) 19.0
Add back/(deduct):
income tax (credit)/charge 6 (7.9) 6.8
finance income (1.7) (1.7)
finance expense 5 15.3 16.2
depreciation, amortisation and impairment 38.1 37.9
other gains (0.2) -
currency losses/(gains) 1.6 (0.6)
gain realised on matured derivatives(1) (1.2) (0.3)
share-based payments charge 3.5 1.9
Decrease/(increase) in inventories 0.4 (55.5)
Increase in trade and other receivables (22.1) (28.5)
Increase/(decrease) in trade and other payables 32.2 (3.6)
Change in net working capital 10.5 (87.6)
Cash flows from operating activities
Cash generated from/(used in) operations(1) 37.2 (8.4)
Taxation paid (3.2) (15.4)
Settlement of matured derivatives(1) 1.3 0.3
Net cash inflow/(outflow) from operating activities 35.3 (23.5)
Cash flows from investing activities
Additions to intangible assets (6.8) (4.5)
Additions to property, plant and equipment 8 (4.2) (11.8)
Finance income received 1.6 1.8
Net cash outflow from investing activities (9.4) (14.5)
Cash flows from financing activities
Finance expense paid (11.2) (9.1)
Payment of lease interest (3.6) (4.6)
Payment of lease liabilities (24.8) (20.7)
Repurchase of shares - (20.4)
Revolving credit facility drawdown - 30.0
Revolving credit facility repayment - (5.0)
Dividends paid 7 - (42.8)
Net cash outflow from financing activities (39.6) (72.6)
Net decrease in cash and cash equivalents (13.7) (110.6)
Cash and cash equivalents at beginning of the period 111.1 157.5
Effect of foreign exchange on cash held (2.5) (1.2)
Cash and cash equivalents at end of the period 94.9 45.7
1.Comparative information has been represented to disclose the gain realised
on matured derivatives and settlement of matured derivatives separately.
The notes on pages 19 to 27 form part of these Condensed Consolidated
Financial Statements.
Notes to the Condensed Consolidated Financial Statements
For the 26 weeks ended 29 September 2024
1. General information
Dr. Martens plc (the 'Company') is a public company limited by shares
incorporated in the United Kingdom, and registered and domiciled in England
and Wales, whose shares are traded on the London Stock Exchange. The Company's
registered office is: 28 Jamestown Road, Camden, London NW1 7BY. The principal
activity of the Company and its subsidiaries (together referred to as the
'Group') is the design, development, procurement, marketing, selling and
distribution of footwear, under the Dr. Martens brand.
2. Accounting policies
The principal accounting policies adopted in the preparation of the Condensed
Consolidated Interim Financial Statements ('Financial Statements') are the
same as those set out in the Group's Annual Financial Statements for the year
ended 31 March 2024 other than for the areas noted below. The interim
financial information is presented in GBP and to the nearest million pounds
(to one decimal place) unless otherwise noted.
Taxation
As per the requirements of IAS 34 (Interim Financial Reporting) paragraph
30(c), the estimated effective tax rate for the full year has been applied to
half year results.
Alternative Performance Measures (APMs): Exceptional costs
For the 26 weeks ended 29 September 2024, the Group has utilised the term
'exceptional costs' which are used within adjusted performance measures as
defined in the Glossary on pages 29 to 31. Exceptional costs are considered
significant in nature and/or quantum, and/or are considered unusual or
non-recurring, such that they are not considered part of the core operations
of the business. Adjusted results are presented to provide a clearer view of
the Group's ongoing operational performance, reflecting how the business is
managed and measured on a day-to-day basis, and to aid comparability between
periods. The following items were included as exceptional costs for the 26
weeks ended 29 September 2024, refer to note 4 for further detail:
· Director joining costs relating to sign-on packages that are not
considered to be part of the normal operating costs of the business.
· Cost action plan related costs arising from operational changes as
part of a cost action plan that are not considered to be part of the normal
and ongoing operating costs of the business.
Basis of preparation
The Condensed Consolidated Interim Financial Statements have been prepared in
accordance with the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority, and with UK-adopted
International Accounting Standard (IAS) 34 'Interim Financial Reporting'.
The interim results for the 26 weeks ended 29 September 2024 and the
comparatives for the six months ended 30 September 2023 are unaudited but have
been reviewed by the auditors. A copy of their review report has been included
at the end of this report.
The financial information for the year ended 31 March 2024 has been extracted
from the Group Financial Statements for that period and does not constitute
statutory accounts as defined in section 434 of the Companies Act. These
published Financial Statements were reported on by the auditors without
qualification or an emphasis of matter reference and did not include a
statement under section 498(2) or (3) of the Companies Act 2006 and have been
delivered to the Registrar of Companies.
The Condensed Consolidated Interim Financial Statements have been prepared
under the historical cost convention, except for equity investments,
derivative financial instruments, money market funds, share-based payments and
pension scheme assets that have been measured at fair value.
In preparing the Condensed Consolidated Interim Financial Statements
management has considered the impact of climate change, particularly in the
context of the Financial Statements as a whole, in addition to disclosures
included in the Strategic Report of the Group Financial Statements for the
year ended 31 March 2024. Climate change remains as an emerging risk and is
not expected to have a significant impact on the Group's going concern
assessment to 29 December 2025.
Financial calendar
During FY24, the Group amended the basis of preparation of the Consolidated
Financial Statements to align with the operational trading of the business; by
moving from a calendar year to a retail calendar basis. The retail calendar
will report a 52-week year, split into monthly 5-4-4 Monday to Sunday week
formats. A 53-week year will be reported approximately every six years to
avoid the retail calendar deviating by more than seven days from the calendar
year and the accounting reference date of 31 March. The FY25 period began on 1
April 2024 and the Consolidated Interim Financial Statements report the 26
weeks ended 29 September 2024 to conform to the retail calendar. The
comparative period is the six months to 30 September 2023.
Significant judgements and sources of estimation uncertainty
The Group's significant judgements and key sources of estimation uncertainty
are consistent with those disclosed in the Group's latest audited Financial
Statements.
Other areas of judgement and accounting estimates
The other areas of judgement and accounting estimates are consistent with
those disclosed in the Group's latest audited Financial Statements, with the
exception of the following new area of judgement for the Group, as noted above
in relation to exceptional costs.
Exceptional costs
The classification of exceptional costs requires management judgement after
considering the nature and intentions of a transaction. The Group's
definitions of exceptional costs are outlined within both the Group accounting
policies and the Glossary. Note 4 provides further details on current period
exceptional costs and their adherence to Group policy.
Notes to the Condensed Consolidated Financial Statements (continued)
For the 26 weeks ended 29 September 2024
2. Accounting policies (continued)
Basis of preparation (continued)
Going concern
The interim consolidated financial information has been prepared on the going
concern basis. The going concern assessment covers at least the 12-month
period from the date of the signing of the Financial Statements, and the going
concern basis is dependent on the Group maintaining adequate levels of
resources to operate during the period. To support this assessment, detailed
trading and cash flow forecasts, including forecast liquidity and covenant
compliance, were prepared for the 15-month period to 29 December 2025.
The key stages of the assessment process are summarised as follows:
· The Group planning process forms the basis of the Going Concern
review, starting from the DOCS strategy and producing outputs for long, medium
and short-term financial plans, based on key assumptions which are agreed with
the Global Leadership Team (GLT) and the Board.
· The trading outlook over the long, medium and short-term is
evaluated, contextualising our assessments within the broader macroeconomic
environment.
· Micro and macro central planning assumptions are identified and
incorporated into the assessments.
· The Directors of the Group have considered the future position based
on current trading and a number of potential downside scenarios which may
occur, including the impact of relevant principal risks crystallising.
· Further details on the potential downside scenarios relevant to the
going concern assessment period have been included below.
The Directors also considered the Group's funding arrangements at 29 September
2024 with cash of £94.9m, available undrawn facilities of £196.6m and bullet
debt repayment of £281.7m not due until 2 February 2026. The debt facilities
were successfully refinanced following the half year. The new facilities
comprise a £250.0m term loan and a £126.5m RCF, with an initial term of
three years, with the option to extend both facilities by to additional
one-year terms through to November 2029, subject to lender approval.
Management have modelled, and the Directors have reviewed 'top-down'
sensitivity and stress test, including a review of the cash flow projections
and covenant compliance under a severe but plausible scenario in relation to
two main risks occurring simultaneously:
· the impact of a factory closure in one key production geographic area
due to climate change (flooding).
· weaker consumer sentiment and lower demand than currently assumed in
financial plans.
In the unlikely event of the above two scenarios occurring together, the Group
can withstand material revenue decline and maintain headroom above covenant
requirements. The Group continues to have satisfactory liquidity and covenant
headroom throughout the period under review.
In modelling our severe but plausible downside we have incorporated the impact
of a c.10%pt decrease in revenue growth from the base plan for the 12-months
to December 2025. Under this scenario, certain mitigations are available or
are intrinsically linked to the forecast, including some cost and cash savings
that materialise immediately if the Group's performance is below budget and
other planned and standard cost reductions. A more extreme downside scenario
is not considered plausible.
A reverse stress test has also been modelled to determine the reduction in
revenue required for a cash balance (not including drawdown of the RCF
facility) of -£50m to be reached at the end of the going concern period, at
which point special cash monitoring measures would be triggered. It is
concluded that the business could weather extreme growth reductions without
mitigation versus the base plan. The business would have to experience a
reduction in revenue growth of c.70%pts relative to the base plan in the going
concern period to reach -£50m cash in December 2025.
In addition, a reverse stress test has also been modelled to determine what
could break covenant compliance estimates and liquidity before mitigating
actions at the end of H1 FY26 (Sep 25). Under the covenant breach test it is
concluded that the business could weather extreme growth reductions without
mitigation, c.10%pts reduction in revenue growth in the 12 months to September
2025 relative to the growth plan before covenants are breached. Under both
reverse stress tests, there were no mitigating actions modelled. The Directors
have assessed the likelihood of occurrence to be remote.
We have also assessed the qualitative and quantitative impact of
climate-related risks, as noted in our TCFD scenario analysis as disclosed in
the FY24 Annual Report, on asset recoverable amounts and concluded that there
would not be a material impact on the business and cash flows in the going
concern period.
We will continue to monitor the impact of the macroeconomic backdrop and
geopolitical events on the Group in the countries where we operate, and we
plan to maintain flexibility to react as appropriate.
Based on the going concern assessment, the Directors have a reasonable
expectation that the Group has adequate resources to continue in operational
existence for at least 12 months from the date of approval of these Financial
Statements. For this reason, they continue to adopt the going concern basis in
preparing these Financial Statements.
Adoption of new and revised standards
A number of new or amended standards became applicable for the current
reporting period. These standards, amendments or interpretations are not
expected to have a material impact on the Group in the current or future
reporting periods:
· Amendments to IAS 1 - Presentation of Financial Statements:
non-current liabilities with covenants
· Amendments to IAS 7 and IFRS 7 - Supplier finance arrangements
· Amendments to IFRS 16 - Leases on sale and leaseback
New standards and interpretations not yet applied
The following new or amended IFRS accounting standards, amendments and
interpretations are not yet adopted, and it is expected that where applicable,
these standards and amendments will be adopted on each respective effective
date:
· Amendments to IAS 21 - Lack of exchangeability
These standards, amendments or interpretations are not expected to have a
material impact on the Group in the current or future reporting periods.
Notes to the Condensed Consolidated Financial Statements (continued)
For the 26 weeks ended 29 September 2024
3. Segmental analysis
IFRS 8 'Operating Segments' requires operating segments to be determined by
the Group's internal reporting to the Chief Operating Decision Maker (CODM).
The CODM has been determined to be both the CEO and CFO, who receive
information on the basis of the Group's revenue in key geographical regions
based on the Group's management and internal reporting structure. The CODM
assesses the performance of geographical segments based on a measure of
revenue and EBIT(3). To increase transparency the Group also includes
additional voluntary disclosure analysis of global revenue within different
operating channels. Included within EMEA is revenue attributable to Airwair
International Limited and Airwair Wholesale Limited, the principal UK trading
subsidiaries of Dr. Martens plc, with revenue from retail stores in
Continental Europe and wholesale and export customers. Americas revenue is
fully attributable to the USA and Canada, and APAC revenue is mainly
attributable to Japan, Australia, China, Hong Kong and South Korea. The types
of products from which each reportable segment derives its revenue are
consistent across all segments. The Group typically generates approximately
60% of total revenue in the second half reflecting the peak Q3 DTC trading
period and, as a result of the stronger gross margin structure of DTC compared
to wholesale, EBIT margins are higher in the second half of the year.
Unaudited 26 weeks ended 29 September 2024 Unaudited six months ended 30 September 2023 Audited year ended 31 March 2024
£m £m £m
Revenue by geographical market(1)
EMEA(2) 162.4 194.2 431.8
Americas 114.7 147.7 325.8
APAC 47.5 53.9 119.5
Total revenue 324.6 395.8 877.1
1. Revenue by geographical market
represents revenue from external customers; there is no inter-segment revenue.
2. Included in EMEA revenue is £56.3m
(Sep 23: £72.2m, Mar 24: £168.5m) in relation to trading in the UK.
Unaudited 26 weeks ended 29 September 2024 Unaudited six months ended 30 September 2023 Unaudited year ended 31 March
£m £m 2024
£m
EBIT(3,4) by geographical market
EMEA 22.4 40.0 109.7
Americas (7.7) 17.3 41.7
APAC 2.3 7.7 22.1
Support costs(5) (32.1) (24.7) (51.3)
EBIT(3,4) (15.1) 40.3 122.2
Exceptional costs(3) 9.2 - -
Currency losses/(gains) 1.6 (0.6) 4.2
Adjusted EBIT(3) (4.3) 39.7 126.4
Net finance income and expense (13.6) (14.5) (29.2)
(Loss)/profit before tax (28.7) 25.8 93.0
Exceptional costs(3) 9.2 - -
Currency losses/(gains) 1.6 (0.6) 4.2
Adjusted (loss)/profit before tax(3) (17.9) 25.2 97.2
3. Alternative Performance Measure 'APM' as defined in the Glossary on pages
29 to 31.
4. In previous periods EBITDA was presented. However, this has been replaced
with EBIT as it is considered a more relevant performance measure for the
business. Refer to the Glossary on pages 29 to 31 for further explanation of
the change. Prior period amounts have been updated to reflect this change.
5. All currency gains/losses are included in support costs. Currency
gains/losses are generally a product of how trading is managed by legal entity
on a global basis. Inclusion in support costs allows performance for each
region to be evaluated exclusive of the currency impact of global operations.
EMEA trading entities incurred a £6.5m currency loss (Sep 23: £1.4m gain,
Mar 24: £4.6m loss). Americas trading entities incurred a £0.9m currency
gain (Sep 23: £0.2m loss, Mar 24: £0.3m gain). APAC trading entities
incurred a £0.5m currency gain (Sep 23: £2.0m loss, Mar 24: £2.3m loss).
Additional revenue analysis
The Group derives its revenue in geographical markets
from the following sources:
Unaudited 26 Unaudited six months ended 30 September 2023 Audited year ended 31 March
weeks ended 29 September 2024 £m 2024
£m £m
Revenue by channel
Ecommerce 87.7 91.7 276.3
Retail 95.3 104.7 256.8
Total DTC revenue 183.0 196.4 533.1
Wholesale 141.6 199.4 344.0
Total revenue 324.6 395.8 877.1
Notes to the Condensed Consolidated Financial Statements (continued)
For the 26 weeks ended 29 September 2024
3. Segmental analysis (continued)
Unaudited Unaudited Audited
29 September 2024 30 September 31 March 2024
£m 2023
£m £m
Non-current assets
EMEA(6) 147.4 163.2 153.4
Americas 77.8 105.4 92.2
APAC 15.4 16.6 17.7
Goodwill 240.7 240.7 240.7
Deferred tax 15.1 11.0 11.2
Total non-current assets 496.4 536.9 515.2
6. Included in EMEA non-current assets is £82.3m (Sep 23: £83.8m, Mar 24
£83.9m) in relation to UK legal entities.
4. Exceptional costs
The total exceptional costs reported for the 26 weeks ended 29 September 2024
is a net charge of £9.2m (Sep 23: £nil, Mar 24: £nil). Adjusted results are
presented to provide a clearer view of the Group's ongoing operational
performance, reflecting how the business is managed and measured on a
day-to-day basis, and to aid comparability between periods.
The adjustments made to reported EBIT and profit before tax are:
Unaudited 26 weeks ended 29 September 2024 Unaudited six months ended 30 September 2023 Audited year ended 31 March 2024
£m £m
£m
Included in operating expenses
Director joining costs 3.1 - -
Cost action plan related costs 6.1 - -
9.2 - -
Tax impact of exceptional costs:
Director joining costs (0.8) - -
Cost action plan related costs (1.5) - -
(2.3) - -
(Loss)/profit after tax for the period (20.8) 19.0 69.2
Add/(Less)
Exceptional costs 9.2 - -
Tax on exceptional costs(1) (2.3) - -
Currency losses/(gains) 1.6 (0.6) 4.2
Tax impact of currency losses/(gains)(2) (0.4) 0.1 (1.1)
Adjusted (loss)/profit after tax for the period(3) (12.7) 18.5 72.3
1. The tax impact of exceptional costs has been calculated by applying the
statutory tax rate for the entities where these costs have been incurred.
2. The tax impact of currency losses/(gains) has been calculated by applying
the Group's effective tax rate.
3. Alternative Performance Measure 'APM' as defined in the Glossary on pages
29 to 31.
Director joining costs
The Group recognises significant costs associated with the appointment of the
new CFO, and incoming CEO as exceptional costs due to their quantum, and
nature as sign-on packages related to their specific appointment, rather than
being a standard practice for the Group. These costs relate only to
discretionary compensation for the new Directors relating to the share scheme
value they lost because of leaving previous employment, outside of the Group's
LTIP scheme. The change in Directors has resulted in the initiation of broader
changes within the Group, which are outlined below (refer to cost action plan
related costs) and considered exceptional costs.
During the period, the Group recognised costs associated with the appointment
of the Directors of £3.1m (Sep 23: £nil, Mar 24: £nil). £1.6m relates to
cash-settled compensation for a portion of their share scheme values lost and
associated payroll taxes. £0.4m relates to other professional fees related to
the recruitment of the Directors. All £2.0m of this has been paid in cash. An
additional £1.0m of the cost incurred relates to share-based payment expenses
recognised in the period relating to the equity-settled compensation for their
share scheme values lost, which is non-cash. A further £0.1m of expense
relates to payroll taxes on the share-based payment expense which will be paid
in cash when the schemes vest. A further £2.3m of share-based payment expense
is expected to be incurred.
Cost action plan related costs
In May 2024, the Group announced it would be undertaking a cost action plan in
FY25. The programme will create savings from operational efficiency and
design, better procurement and operational streamlining. Costs in relation to
this scheme were incurred with respect to severance payments of £5.4m, and
other related costs of £0.7m. This corresponds to a cash outflow during the
period of £1.1m. These costs are reported as exceptional costs due to their
size, and due to the unusual and non-recurring nature of such a programme.
Notes to the Condensed Consolidated Financial Statements (continued)
For the 26 weeks ended 29 September 2024
5. Finance expense
Unaudited 26 weeks ended 29 September 2024 Unaudited six months ended 30 September 2023 Audited year ended 31 March
£m £m 2024
£m
Bank debt and other charges 11.0 11.0 22.3
Interest on lease liabilities 3.6 4.6 8.6
Discount unwind of dilapidation provision 0.1 - -
Amortisation of bank loan issue costs 0.6 0.6 1.2
Other interest charges - - 0.1
Total financing expense 15.3 16.2 32.2
6. Income tax
The Group calculates the tax credit/(expense) for the period using the tax
rate that would be applicable to the expected total annual earnings. The
estimated average annual tax rate used for the 26 weeks to 29 September 2024
is 27.5%, compared to 26.4% for the six months ended 30 September 2023 and
25.6% for the year ended 31 March 2024.
Factors that may affect future tax charges
On 20 June 2023, Finance (No.2) Act 2023 was substantively enacted in the UK,
introducing a global minimum effective tax rate of 15% for large groups for
financial years beginning on or after 31 December 2023.
Based on an initial analysis, all territories in which the Group operates are
expected to qualify for one of the safe harbour exemptions such that top-up
taxes should not apply. To the extent that this is not the case there is the
potential for Pillar Two taxes to apply, but these are not expected to be
material.
7. Dividends
Unaudited 26 weeks ended 29 September 2024
£m Unaudited Audited year ended 31 March
six months ended 30 September 2023 2024
£m £m
Dividends paid during the period/year:
Prior period/year final dividend paid -(1) 42.8 42.8
Interim dividend paid - - 15.0(2)
Total dividends paid during the period/year - 42.8 57.8
Profit for the period/year (20.8) 19.0 69.2
Dividend in respect of the period/year:
Interim dividend: 0.85p (Sep 23: 1.56p, Mar 24: 1.56p) 8.2 15.4(2) 15.0(2)
Final dividend: nil (Sep 23: nil, Mar 24: 0.99p) - - 9.5
Total dividend in respect of the period/year 8.2 15.4 24.5
Payout ratio % (39%) 81% 35%
1. The dividend in relation to the year ended 31 March 2024 of £9.5m was paid
on 1 October 2024.
2. The FY24 interim dividend was originally expected to be £15.4m when
disclosed for the six months ended 30 September 2023. During H2 FY24 there was
a reduction in the number of shares outstanding between the date the dividend
was declared and the date for shareholders to be on the register to receive
payment. This resulted in a £15.0m dividend payment.
The Board has approved and the Company has declared an interim dividend of
0.85 pence per share (Sep 23: 1.56 pence). The Dr. Martens plc International
Share Incentive Plan Trust has waived all dividends payable by the Company in
respect of the ordinary shares it holds. The interim dividend will be paid to
shareholders on the register as at 6 March 2025 with payment on 8 April 2025.
Notes to the Condensed Consolidated Financial Statements (continued)
For the 26 weeks ended 29 September 2024
8. Property, plant and equipment
Movements in property, plant and equipment since 31 March 2024 predominantly
relate to additions of £3.6m and depreciation charged of £7.6m.
Unaudited 29 September 2024 Unaudited 30 September 2023
£m £m Audited
31 March 2024
£m
Net book value:
Freehold property and improvements 6.7 7.4 7.0
Leasehold improvements and fixtures and fittings 33.5 41.5 38.1
Plant, machinery, fixtures and fittings 10.7 12.0 11.8
Office and computer equipment 2.0 3.5 2.5
52.9 64.4 59.4
Movements in right-of-use assets since 31 March 2024 predominantly relate to
additions of £8.2m, remeasurements of £3.6m, impairment of £0.8m and
depreciation charged of £26.2m. Additions include £0.6m of direct costs and
£1.7m in relation to costs of removal and restoring.
Unaudited 29 September 2024 Unaudited 30 September 2023
£m £m Audited
31 March 2024
£m
Net book value:
Right-of-use assets 153.4 195.0 173.5
153.4 195.0 173.5
9. Borrowings
Unaudited 29 September 2024 Unaudited 30 September 2023 Audited
£m £m 31 March 2024
£m
Current
Revolving credit facility drawdown - 25.0 -
Bank interest 8.0 8.0 8.4
Borrowings 8.0 33.0 8.4
Lease liabilities 43.8 40.0 47.0
Total current 51.8 73.0 55.4
Non-current
Bank loans (net of unamortised bank fees) 279.8 289.6 286.3
Lease liabilities 118.1 167.1 135.3
Total non-current 397.9 456.7 421.6
Total borrowings(1) 449.7 529.7 477.0
Analysis of bank loan:
Non-current bank loans (net of unamortised bank fees) 279.8 289.6 286.3
Add back unamortised fees 1.9 2.9 2.3
Total gross bank loan 281.7 292.5 288.6
1. From total borrowings, only bank loans (excluding unamortised bank fees)
and lease liabilities are defined as debt for covenant purposes.
On 29 January 2021, the Group entered into a Senior Facilities Agreement,
comprising a Facility B term loan of €337.5m (equivalent to £300.0m at
inception) and a multi-currency revolving credit facility of £200.0m. A
proportion of the RCF commitment is earmarked for ancillary commitments of
which £3.4m (Sep 23: £3.3m, Mar 24: £3.4m) has been utilised for landlord
rent guarantees.
The carrying value of the term loan as at 29 September 2024 (excluding
unamortised bank fees and accrued interest) of £281.7m (Sep 23: £292.5m, Mar
24: £288.6m) is £18.3m lower (Sep 23: £7.5m lower, Mar 24: £11.4m lower)
than the amount borrowed on 29 January 2021 due to an appreciation of the
GBP/EUR foreign exchange rate movement.
These facilities were due to mature on 2 February 2026, however in November
2024 the Group successfully negotiated with existing and new lenders to
refinance its existing debt facilities, comprising the term loan of €337.5m
and RCF of £200.0m. The new debt facilities are entirely denominated in GBP
and comprise a term loan of £250.0m and RCF of £126.5m for an initial term
of three years, with two one-year extension options, subject to lender
approval.
Notes to the Condensed Consolidated Financial Statements (continued)
For the 26 weeks ended 29 September 2024
10. Financial instruments
IFRS 13 requires the classification of financial instruments measured at fair
value to be determined by reference to the source of inputs used to derive
fair value. The fair values of all financial instruments, except for leases,
in all periods are materially equal to their carrying values. All financial
instruments are measured at amortised cost with the exception of derivatives,
cash amounts held within Money Market Funds, and investments in equity
instruments which are measured at fair value. Derivatives and Money Market
Funds are classified as Level 2 under the fair value hierarchy, and
investments in equity instruments as Level 3, which is consistent with that
defined in note 2.16 of the Consolidated Financial Statements for the year
ended 31 March 2024.
Unaudited 29 September 2024
Assets at amortised cost Fair value through other comprehensive income Fair value through profit or loss Total
£m £m £m £m
Assets as per Balance Sheet
Investments - 1.0 - 1.0
Trade and other receivables excluding prepayments and accrued income - - 78.3
78.3
Derivative financial assets - Current - 2.5 - 2.5
Derivative financial assets - Non-current - 0.2 - 0.2
Cash and cash equivalents 41.8 - 53.1(1) 94.9
120.1 3.7 53.1 176.9
1. A proportion of our cash is invested in high-quality overnight money market
funds to mitigate concentration and counterparty risk.
Liabilities at amortised cost Fair value through other comprehensive income Fair value through profit or loss Total
£m £m £m £m
Liabilities as per Balance Sheet
Bank debt (excluding unamortised bank fees) 281.7 - - 281.7
Borrowings - Current 8.0 - - 8.0
Lease liabilities - Current 43.8 - - 43.8
Lease liabilities - Non-current 118.1 - - 118.1
Derivative financial instruments - Current - 4.0 - 4.0
Trade and other payables excluding non-financial liabilities 117.0 - - 117.0
568.6 4.0 - 572.6
Unaudited 30 September 2023
Assets at amortised cost Fair value through other comprehensive income Fair value through profit or loss Total
£m £m £m £m
Assets as per Balance Sheet
Investments - 1.0 - 1.0
Trade and other receivables excluding prepayments and accrued income 110.5 - - 110.5
Derivative financial assets - Current - 1.0 - 1.0
Derivative financial assets - Non-current - - - -
Cash and cash equivalents 32.1 - 13.6(1) 45.7
142.6 2.0 13.6 158.2
1. A proportion of our cash is invested in high-quality overnight money market
funds to mitigate concentration and counterparty risk.
Liabilities at amortised cost Fair value through other comprehensive income Fair value through profit or loss Total
£m £m £m £m
Liabilities as per Balance Sheet
Bank debt (excluding unamortised bank fees) 292.5 - - 292.5
Borrowings - Current 33.0 - - 33.0
Lease liabilities - Current 40.0 - - 40.0
Lease liabilities - Non-current 167.1 - - 167.1
Derivative financial instruments - Current - 2.8 - 2.8
Trade and other payables excluding non-financial liabilities 110.5 - - 110.5
643.1 2.8 - 645.9
Notes to the Condensed Consolidated Financial Statements (continued)
For the 26 weeks ended 29 September 2024
10. Financial instruments (continued)
Audited 31 March 2024
Assets at amortised cost Fair value through other comprehensive income Fair value through profit or loss Total
£m £m £m £m
Assets as per Balance Sheet
Investments - 1.0 - 1.0
Trade and other receivables excluding prepayments and accrued income - - 62.0
62.0
Derivative financial assets - Current - 1.5 - 1.5
Derivative financial assets - Non-current - 0.1 - 0.1
Cash and cash equivalents 52.2 - 58.9(1) 111.1
114.2 2.6 58.9 175.7
1. A proportion of our cash is invested in high-quality overnight money market
funds to mitigate concentration and counterparty risk.
Liabilities at amortised cost Fair value through other comprehensive income Fair value through profit or loss Total
£m £m £m £m
Liabilities as per Balance Sheet
Bank debt (excluding unamortised bank fees) 288.6 - - 288.6
Borrowings - Current 8.4 - - 8.4
Lease liabilities - Current 47.0 - - 47.0
Lease liabilities - Non-current 135.3 - - 135.3
Derivative financial instruments - Current - 0.1 - 0.1
Trade and other payables excluding non-financial liabilities - - 77.5
77.5
556.8 0.1 - 556.9
11. Pensions
The Group does not recognise the defined benefit plan surplus on the grounds
that Airwair International Limited is unlikely to derive any future economic
benefits from the surplus. As such, an asset ceiling has been applied to the
Balance Sheet, and the net surplus of £9.3m (Sep 23: £8.5m, Mar 24: £9.1m)
has not been recognised on the Balance Sheet. The net surplus has been
restricted to £nil (Sep 23: £nil, Mar 24: £nil).
The Group's Annual Report and Accounts for the year ended 31 March 2024
disclosed considerable uncertainty of whether a judgement in the High Court
case of Virgin Media vs NTL Trustees will stand following appeal. The appeal
to this judgement was dismissed on 25 July 2024. The judge ruled that where
benefit changes were made without a valid 'section 37' certificate from the
Scheme Actuary, those changes could be considered void. This judgement could
have material consequences for some defined benefit schemes, which includes
the Group's defined benefit plan ('the Plan'), which previously contracted-out
of the state pension system. In the absence of further information at this
time, disclosures have been calculated assuming this ruling will not affect
the Plan's benefits.
12. Ordinary share capital
Unaudited Unaudited Audited
29 September 30 September 31 March
2024 2023 2024
No. £m No. £m No. £m
Authorised, called up and fully paid
Ordinary shares of £0.01 each 962,197,384 9.6 988,567,950 9.9 961,878,608 9.6
Notes to the Condensed Consolidated Financial Statements (continued)
For the 26 weeks ended 29 September 2024
12. Ordinary share capital (continued)
The movements in ordinary share capital during the relevant periods were as
follows:
Unaudited 29 September 2024
No. £m
As at 1 April 2024 961,878,608 9.6
Shares issued 318,776 -
As at 29 September 2024 962,197,384 9.6
Unaudited 30 September 2023
No. £m
As at 1 April 2023 1,000,793,898 10.0
Shares issued 250,751 -
Repurchase and cancellation of ordinary share capital (12,476,699) (0.1)
As at 30 September 2023 988,567,950 9.9
Audited 31 March 2024
No. £m
As at 1 April 2023 1,000,793,898 10.0
Shares issued 953,845 -
Repurchase and cancellation of ordinary share capital (39,869,135) (0.4)
As at 31 March 2024 961,878,608 9.6
During the year ended 31 March 2024 Dr. Martens plc repurchased 39.9 million
ordinary shares, as part of a share repurchase programme announced on 1 July
2023. The number of shares in issue is reduced where shares are repurchased.
All shares purchased were for cancellation. The repurchased shares represented
4.1% of ordinary share capital. The programme concluded on 19 December 2023.
13. Treasury shares
The movements in treasury shares held by the Company during the relevant
periods were as follows:
Unaudited 29 September 2024
No. £m
As at 1 April 2024 394,923 -
Shares issued for share schemes held in trust 219,494 -
Shares vested from share schemes held in trust (74,284) -
As at 29 September 2024 540,133 -
Unaudited 30 September 2023
No. £m
As at 1 April 2023 110,153 -
Repurchase of shares for cancellation 13,880,002 20.9
Cancellation of shares (12,476,699) (18.9)
As at 30 September 2023 1,513,456 2.0
Audited 31 March 2024
No. £m
As at 1 April 2023 110,153 -
Repurchase of shares for cancellation 39,869,135 50.0
Cancellation (39,869,135) (50.0)
Shares issued for share schemes held in trust 284,770 -
As at 31 March 2024 394,923 -
On 14 July 2023 Dr. Martens plc announced a share buyback programme. Treasury
shares existed during FY24 as a result of the timing delay between the
repurchase of shares under this programme and the subsequent cancellation of
these shares. The programme concluded on 19 December 2023.
14. Related party transactions
The Group's related party transactions are with key management personnel and
other related parties as disclosed in the Group's Annual Report and Accounts
for the year to 31 March 2024. There have been no material changes to the
Group's related party transactions during the 26 weeks to 29 September 2024.
15. Post balance sheet events
In November 2024, the Group completed a successful refinance of our debt
facilities, ahead of the previous facilities expiring on 2 February 2026. The
previous facilities comprised a €337.5m term loan with a £200.0m RCF. Our
new facilities comprise a £250.0m term loan and a £126.5m RCF, with an
initial term of three years, with the option to extend both facilities by two
additional one-year terms through to November 2029, subject to lender
approval.
First half/second half analysis (unaudited)
For the 26 weeks ended 29 September 2024
H1 H2 FY
Unaudited Unaudited Unaudited Audited
FY25 FY24 Variance FY24 FY24
£m £m % £m £m
Revenue by channel:
Ecommerce 87.7 91.7 -4.4% 184.6 276.3
Retail 95.3 104.7 -9.0% 152.1 256.8
DTC 183.0 196.4 -6.8% 336.7 533.1
Wholesale(4) 141.6 199.4 -29.0% 144.6 344.0
324.6 395.8 -18.0% 481.3 877.1
Gross margin 207.7 254.9 -18.5% 320.3 575.2
EBIT(1) (15.1) 40.3 -137.5% 81.9 122.2
Adjusted EBIT(1) (4.3) 39.7 -110.8% 86.7 126.4
(Loss)/profit before tax(2) (28.7) 25.8 -211.2% 67.2 93.0
Adjusted (loss)/profit before tax(1) (17.9) 25.2 -171.0% 72.0 97.2
Tax credit/(expense) 7.9 (6.8) -216.2% (17.0) (23.8)
(Loss)/profit after tax for period (20.8) 19.0 -209.5% 50.2 69.2
(Loss)/earnings per share
Basic (2.2p) 1.9p -215.8% 5.1p 7.0p
Diluted (2.2p) 1.9p -215.8% 5.1p 7.0p
Adjusted (loss)/earnings per share(1)
Basic (1.3p) 1.9p -168.4% 5.5p 7.4p
Diluted (1.3p) 1.9p -168.4% 5.5p 7.3p
Key metrics:
Pairs sold (m) 4.6 5.7 -19.7% 5.8 11.5
No. of stores(3) 238 225 5.8% 239 239
DTC mix % 56.4% 49.6% +6.8pts 70.0% 60.8%
Gross margin %(1) 64.0% 64.4% -0.4pts 66.5% 65.6%
EBIT %(1) -4.7% 10.2% -14.9pts 17.0% 13.9%
Revenue by region:
EMEA 162.4 194.2 -16.4% 237.6 431.8
America 114.7 147.7 -22.3% 178.1 325.8
APAC 47.5 53.9 -11.9% 65.6 119.5
324.6 395.8 -18.0% 481.3 877.1
Revenue mix:
EMEA % 50.0% 49.1% +0.9pts 49.4% 49.2%
America % 35.3% 37.3% -2.0pts 37.0% 37.1%
APAC % 14.7% 13.6% +1.1pts 13.6% 13.7%
EBIT(1) by region:
EMEA 22.4 40.0 -44.0% 69.7 109.7
America (7.7) 17.3 -144.5% 24.4 41.7
APAC 2.3 7.7 -70.1% 14.4 22.1
Support costs (32.1) (24.7) 30.0% (26.6) (51.3)
(15.1) 40.3 -137.5% 81.9 122.2
EBIT %(1):
EMEA 13.8% 20.6% -6.8pts 29.3% 25.4%
America -6.7% 11.7% -18.4pts 13.7% 12.8%
APAC 4.8% 14.3% -9.5pts 22.0% 18.5%
Total -4.7% 10.2% -14.9pts 17.0% 13.9%
1. Alternative Performance Measure 'APM' as defined in the Glossary on pages
29 to 31.
2. Post exceptional costs and currency gains/losses
3. Own stores on streets and malls operated under arm's length leasehold
arrangements
4. Wholesale revenue including distributor customers
Glossary and Alternative Performance Measures (APMs)
The Group tracks a number of key performance indicators (KPIs) including
Alternative Performance Measures (APMs) in managing its business, which are
not defined or specified under the requirements of IFRS because they exclude
amounts that are included in, or include amounts that are excluded from, the
most directly comparable measures calculated and presented in accordance with
IFRS or are calculated using financial measures that are not calculated in
accordance with IFRS.
The Group believes that these APMs, which are not considered to be a
substitute for or superior to IFRS measures, provide stakeholders with
additional helpful information on the performance of the business. These
APMs are consistent with how the business performance is planned and reported
within the internal management reporting to the Board.
The Group is no longer presenting EBITDA-derived metrics for segmental and
total reporting analysis. EBITDA will primarily be disclosed for bank covenant
and LTIP performance condition purposes only. The Group believes that EBIT
represents a more relevant underlying earnings indicator, allowing management
to assess the full operating performance of the business by including the
impact of items such as depreciation. As such the Group has introduced this,
and EBIT-derived metrics, in the current period.
The Group has also introduced new 'adjusted' APMs, denoted by a '*' in the
table below. Adjusted APMs are presented to provide a clearer view of the
Group's ongoing operational performance by excluding specific significant
adjustments, and to aid comparability. These measures are consistent with how
business performance is measured internally by the Board and Executive
Committee.
The Group is no longer presenting profit before tax (before FX charge), this
has been replaced with a variation of this measure, being adjusted profit
before tax. Adjusted profit before tax provides more relevant information to
evaluate operational performance as includes adjustment for both currency
gains/losses and exceptional costs.
These APMs should be viewed as supplemental to, but not as a substitute for,
measures presented in the Consolidated Financial Statements relating to the
Group, which are prepared in accordance with IFRS. The Group believes that
these APMs are useful indicators of its performance. However, they may not be
comparable with similarly titled measures reported by other companies due to
differences in the way they are calculated.
The Audit Committee has reviewed the overall presentation of APMs to ensure
they have not been given undue prominence, and that reconciliations are
sufficiently clear. Further to this they have evaluated all revisions to APMs
and types and classifications of exceptional costs.
Metric Definition Rationale APM KPI
Revenue Revenue per Financial Statements. Helps evaluate growth trends, establish budgets and assess operational No Yes
performance and efficiencies.
Revenue by geographical market Revenue per the Group's geographical segments. Helps evaluate growth trends, establish budgets and assess operational No Yes
performance and efficiencies.
Revenue: EMEA
Revenue: Americas
Revenue: APAC
Revenue by channel Helps evaluate growth trends, establish budgets and assess operational No Yes
performance and efficiencies.
Revenue: ecommerce Revenue from the Group's ecommerce platforms.
Revenue: retail Revenue from the Group's own stores (including concessions).
Revenue: DTC Revenue from the Group's direct-to-consumer (DTC) channel (= ecommerce plus
retail revenue).
Revenue: wholesale Revenue from the Group's business-to-business channel, revenue to wholesale
customers, distributors and franchisees.
Constant currency basis Constant currency applies the prior period exchange rates to current period Presenting results of the Group excluding foreign exchange volatility. No No
results to remove the impact of FX.
Gross margin Revenue less cost of sales (raw materials and consumables). Helps evaluate growth trends, establish budgets and assess operational No No
performance and efficiencies.
Cost of sales is disclosed in the Consolidated Statement of Profit or Loss.
Gross margin % Gross margin divided by revenue. Helps evaluate growth trends, establish budgets and assess operational Yes No
performance and efficiencies.
Exceptional costs Costs or incomes considered significant in nature and/or quantum, and/or Excluding these items from profit metrics provides readers with helpful Yes No
relate to activities which are outside the ordinary course of business, and information on the underlying performance of the business because it aids
are not reflective of consistency across periods and is consistent with how the business performance
is planned by, and reported to, the Board.
operational performance, including items such as:
- Director joining costs
- Organisational restructuring costs
Opex Selling and administrative expenses less depreciation, amortisation, Opex is used to reconcile between gross margin and EBIT. Yes No
impairment, other gains/losses, exceptional costs and currency gains/losses.
Glossary and Alternative Performance Measures (APMs) (continued)
Metric Definition Rationale APM KPI
EBITDA Profit/loss for the year/period before income tax expense, finance expense, EBITDA was used as a key profit measure because it shows the results of Yes No
currency gains/losses, depreciation of right-of-use assets, depreciation and normal, core operations exclusive of income or charges that are not considered
amortisation. to represent the underlying operational performance. EBIT is now considered a
more relevant measure, but EBITDA continues to be reported for bank covenant
purposes.
EBITDA % EBITDA divided by revenue. Was used to evaluate growth trends, establish budgets and assess operational Yes No
performance and efficiencies.
EBIT Profit/loss for the year/period before net finance expense and income tax EBIT is used as a key profit measure because it shows the results of normal, Yes Yes
expense. core operations exclusive of only income or charges that relate to capital and
tax burdens.
EBIT % EBIT divided by revenue. Used to evaluate growth trends, establish budgets and assess operational Yes Yes
performance and efficiencies.
*Adjusted EBIT EBIT before exceptional costs and currency gains/losses. Used as a key profit measure because it shows the results of normal, core Yes Yes
operations exclusive of income or charges that relate to capital and tax
burdens, exceptional costs, and currency gains/losses. This improves
comparability between periods by eliminating the effect of non-recurring costs
and large currency gains/losses.
*Adjusted EBIT margin Adjusted EBIT divided by revenue. Used to evaluate growth trends, establish budgets and assess operational Yes Yes
performance and efficiencies.
Operating cash flow EBITDA less change in net working capital, share-based payment expense and Operating cash flow is used as a trading cash generation measure because it Yes Yes
capital expenditure. shows the results of normal, core operations exclusive of income or charges
that are not considered to represent the underlying operational performance.
Operating cash flow conversion Operating cash flow divided by EBITDA. Used to evaluate the efficiency of a company's operations and its ability to Yes Yes
employ its earnings toward repayment of debt, capital expenditure and working
capital requirements.
*Adjusted operating cash flow conversion Operating cashflow conversion excluding the impact of exceptional costs on Used to evaluate the efficiency of a company's operations and its ability to Yes Yes
EBITDA and working capital. employ its earnings toward repayment of debt, capital expenditure and working
capital requirements, exclusive of the impact of exceptional costs.
Net debt Net debt is calculated by subtracting cash and cash equivalents from bank To aid the understanding of the reader of the Financial Statements in respect Yes No
loans (excluding unamortised bank fees) and lease liabilities. of liabilities owed.
*Adjusted profit before tax Profit/loss before tax and before exceptional costs and currency gains/losses. Helps evaluate growth trends, establish budgets and assess operational Yes No
performance and efficiencies on an underlying basis exclusive of exceptional
costs and currency gains/losses.
*Adjusted profit after tax Profit/loss after tax and before exceptional costs and currency gains/losses. Adjusted profit after tax is the denominator for the calculation of adjusted Yes No
basic and diluted earnings per share.
Earnings per share IFRS measure. This indicates how much money a company makes for each share of its stock No Yes
and is a widely used metric to estimate company value.
No Yes
No No
Basic earnings per share The calculation of earnings per ordinary share is based on earnings/loss after A higher EPS indicates greater value because investors will pay more for a
tax and the weighted average number of ordinary shares in issue during the company's shares if they think the company has higher profits relative to
year/period. its share price.
Diluted earnings per share Calculated by dividing the profit/loss attributable to ordinary equity holders Used to gauge the quality of EPS if all convertible securities were
of the parent by the weighted average number of ordinary shares in issue exercised.
during the year/period plus the weighted average number of ordinary shares
that would have been issued on the conversion of all dilutive potential
ordinary shares into ordinary shares.
*Adjusted basic earnings per share The calculation of adjusted earnings per ordinary share is based on Helps evaluate basic earnings per share exclusive of exceptional costs and Yes No
profit/loss after tax excluding exceptional costs and currency gains/losses currency gains/losses that are not considered to represent the underlying
and the weighted average number of ordinary shares in issue during the operational performance.
year/period.
Calculated by dividing the profit/loss after tax attributable to ordinary
equity holders of the parent excluding exceptional costs and currency
gains/losses by the weighted average number of ordinary shares in issue during
the year/period plus the weighted average number of ordinary shares that would Helps evaluate diluted earnings per share exclusive of exceptional costs and
have been issued on the conversion of all dilutive potential ordinary shares currency gains/losses that are not considered to represent the underlying
*Adjusted diluted earnings per share into ordinary shares. operational performance
Yes No
Glossary and Alternative Performance Measures (APMs) (continued)
Metric Definition Rationale APM KPI
Ecommerce mix % Ecommerce revenue as a percentage of total revenue. Helps evaluate progress towards strategic objectives. No Yes
DTC mix % DTC revenue as a percentage of total revenue. Helps evaluate progress towards strategic objectives. No Yes
No. of stores Number of 'own' stores open in the Group. Helps evaluate progress towards strategic objectives. No Yes
Pairs Pairs of footwear sold during a period. Used to show volumes and growths in the Group. No Yes
Company Information
Shareholders' enquiries
Any shareholder with enquiries relating to their shareholding should, in the
first instance, contact our registrar, Equiniti, using the telephone number or
address on this page.
Electronic shareholder communications
Shareholders can elect to receive communications by email each time the
Company distributes documents, instead of receiving paper copies. This can be
done by registering via Shareview at no extra cost, at www.shareview.co.uk. In
the event that you change your mind or require a paper version of any document
in the future, please contact the registrar.
Access to Shareview allows shareholders to view details about their holdings,
submit a proxy vote for shareholder meetings and notify a change of address.
In addition to this, shareholders have the opportunity to complete dividend
mandates online which facilitates the payment of dividends directly into a
nominated account.
Registered office
28 Jamestown Road
Camden
London
NW1 7BY
Investor relations
investor.relations@drmartens.com
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
Tel: 0371 384 2030 (from the UK)
Tel: +44 121 4157047 (from overseas)
Independent Auditor
PricewaterhouseCoopers LLP
1 Embankment Place
London
WC2N 6RH
Tel: +44 (0) 20 7583 5000
Statement of directors' responsibilities
The directors confirm that these condensed interim Financial Statements have
been prepared in accordance with UK adopted International Accounting Standard
34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency
Rules sourcebook of the United Kingdom's Financial Conduct Authority and that
the interim management report includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8, namely:
· an indication of important events that have occurred during the 26
weeks ended 29 September 2024 and their impact on the condensed set of
financial statements, and a description of the principal risks and
uncertainties for remainder of the financial year; and
· material related-party transactions in the 26 weeks ended 29
September 2024 and any material changes in the related-party transactions
described in the last annual report.
The directors of Dr. Martens plc are listed in the Dr. Martens plc annual
report for 31 March 2024, with the exception of the following changes in the
period: Giles Wilson was appointed on 13 May 2024. A list of current directors
is maintained on the Dr. Martens plc website: www.drmartensplc.com
(http://www.drmartensplc.com) .
By order of the board
Giles Wilson, CFO
27 November 2024
Independent review report to Dr. Martens plc
Report on the condensed consolidated interim financial statements
Our conclusion
We have reviewed Dr. Martens plc's condensed consolidated interim financial
statements (the "interim financial statements") in the First half results of
Dr. Martens plc for the 26 week period ended 29 September 2024 (the "period").
Based on our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in all
material respects, in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
The interim financial statements comprise:
· the Condensed Consolidated Balance Sheet as at 29 September 2024;
· the Condensed Consolidated Statement of Profit or Loss and the
Condensed Consolidated Statement of Comprehensive Income for the period then
ended;
· the Condensed Consolidated Statement of Changes in Equity for the
period then ended;
· the Condensed Consolidated Statement of Cash Flows for the period
then ended; and
· the explanatory notes to the interim financial statements.
The interim financial statements included in the First half results of Dr.
Martens plc have been prepared in accordance with UK adopted International
Accounting Standard 34, 'Interim Financial Reporting' and the Disclosure
Guidance and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, 'Review of Interim Financial Information Performed by
the Independent Auditor of the Entity' issued by the Financial Reporting
Council for use in the United Kingdom ("ISRE (UK) 2410"). A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and, consequently, does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express
an audit opinion.
We have read the other information contained in the First half results and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on the review
procedures performed in accordance with ISRE (UK) 2410. However, future events
or conditions may cause the group to cease to continue as a going concern.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The First half results, including the interim financial statements, is the
responsibility of, and has been approved by the directors. The directors are
responsible for preparing the First half results in accordance with the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority. In preparing the First half results, including
the interim financial statements, the directors are responsible for assessing
the group's ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the group or to
cease operations, or have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim financial
statements in the First half results based on our review. Our conclusion,
including our Conclusions relating to going concern, is based on procedures
that are less extensive than audit procedures, as described in the Basis for
conclusion paragraph of this report. This report, including the conclusion,
has been prepared for and only for the company for the purpose of complying
with the Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority and for no other purpose. We do not, in
giving this conclusion, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
27 November 2024
1. Alternative Performance Measure (APM) as defined in the Glossary on pages
29 to 31.
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