REG - Frasers Group PLC - Final Results
27/07/2023 07:15
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230727:nRSa3509Ha&default-theme=true
RNS Number : 3509H Frasers Group PLC 27 July 2023
27 July 2023
FRASERS GROUP PLC ("Frasers Group" or "the Company")
Full year results for the 53 weeks ended 30 April 2023 ("FY23")
Strong performance across the Group, boosted by profitable growth in Sports
Retail
FY23 FY22 Change
UK Sports Retail £3,080.6m £2,640.1m 16.7%
Premium Lifestyle £1,212.9m £1,056.6m 14.8%
International Retail £1,083.4m £940.5m 15.2%
Wholesale & licensing £188.3m £168.1m 12.0%
Group revenue £5,565.2m £4,805.3m 15.8%
Gross profit £2,369.8m £2,088.7m 13.5%
Group gross margin 42.6% 43.5% -90bps
Operating costs (£1,930.9m) (£1,540.8m)
Property and other related impairments (£99.6m) (£227.0m)
Profit on sale of properties £95.4m £10.8m
Exceptional items £97.1m (£1.3m)
Operating profit £531.8m £330.4m 61.0%
Reported profit before tax ("PBT") £660.7m £335.6m 96.9%
Exceptional items (£97.1m) £1.3m
Fair value adjustment to derivative financial instruments (£32.5m) (£7.6m)
Fair value gains and profit on disposal of equity derivatives (£41.1m) (£9.9m)
Realised FX (gain)/loss (£31.2m) £5.8m
Share scheme £19.3m £14.6m
Adjusted profit before tax ("APBT")((1)) £478.1m £339.8m 40.7%
Reported profit after tax £501.3m £256.9m 95.1%
Reported basic earnings per share ("EPS") 106.1p 52.9p 53.2p
Adjusted basic EPS ((1)) 70.9p 53.9p 17.0p
Operating cash inflow before changes in working capital £875.6m £786.8m £88.8m
Net assets £1,658.2m £1,308.6m £349.6m
Michael Murray, Chief Executive of Frasers Group: "In my first full year as
Chief Executive, we have delivered a strong performance across the Group. We
were bold in setting our full year guidance twelve months ago, before the full
impact of the cost-of-living crisis was clear, but our business has remained
resilient, and we have met these expectations.
The Elevation Strategy is continuing to drive results across every segment,
and I want to thank the entire company for all their hard work in delivering
our vision for Frasers Group. It has been a particularly significant year for
Sports Retail, demonstrating that elevating Sports Direct was the right
strategy. Our investment in the store estate, our focus on strengthening key
brand partnerships, and the synergies created by strategic acquisitions is now
delivering very clear results. We've also made huge progress in the
year building our sector-leading ecosystem, with Frasers Plus now
successfully launched across our brands and businesses.
We enter the new financial year in a strong position and are determined to
unlock further growth, underpinned by our laser focus and acceleration of
our Elevation Strategy."
Headlines
· Record performance, with Group revenue of £5,565.2m, an increase
of 15.8%, APBT ((1)) of £478.1m, an increase of 40.7%, and cash inflow from
operating activities before working capital of £875.6m, an increase of
£88.8m.
· Reported PBT of £660.7m, an increase of 96.9% and reported
profit after tax of £501.3m, an increase of 95.1%.
· APBT ((1)) of £478.1m, ahead of consensus ((2)) and within our
guidance range of £450m-£500m. This guidance was set back in July 2022
before the full impact of the severe and sustained cost of living and
inflation pressures that have weighed on consumers were felt.
· The key driver of APBT growth was a strong trading performance
from the core Sports Direct business driven by the continuing success of the
elevation strategy. In addition, there were property impairments of £99.6m
and intangible impairments of £140.1m which were largely mitigated by gains
on disposal of properties and subsidiaries of £139.3m and reversals of legal
and regulatory provisions of £95.0m.
Summary of financial performance
· Group:
· Revenue increased by 15.8%, largely due to acquisitions and the
impact of a 53(rd) week in FY23 ((3).) Excluding acquisitions, disposals and
the 53(rd) week, on a currency neutral basis, revenue increased by 1.3%. ((4))
· Group gross margin decreased to 42.6% from 43.5%, which reflects
the improvements in Sports Direct's product mix as a result of strengthening
brand relationships, mitigated by the impact of House of Fraser store
closures, brand consolidation, and a very strong post Covid-19 comparative of
full price trading.
· UK Sports Retail:
· Revenue increased by 16.7%, largely due to the full year impact
of the acquisition of Frasers Group Financial Services (formerly Studio Retail
Limited 'FGFS'), which was acquired on 24 February 2022. Excluding
acquisitions, and the 53(rd) week, revenue increased by 0.8%. ((4))
· Gross profit increased by £244.9m and gross margin increased by
+180 bps to 44.9% reflecting an improved product mix in the core Sports Direct
business due to strengthening brand relationships. This, combined with profits
on disposal of properties, contributed to a substantial £250.1m (127%)
increase in segment APBT ((1)) to £447.0m.
· Premium Lifestyle:
· Revenue increased by 14.8%, with the impact of planned House of
Fraser store closures more than offset by new FLANNELS store openings and
continued growth in online. Excluding acquisitions and the 53(rd) week,
revenue increased by 5.7%. ((4))
· Our long-term ambitious growth plans for Flannels remain on
track. Flannels largely maintained its profitability, against a very strong
performance in FY22 and reflecting the tougher macro-economic conditions this
year.
· International Retail:
· Revenue increased by 15.2%, largely due to the acquisition of
Sportmaster on 16 May 2022 and an increase in the Malaysian business, offset
by the reduction in revenue following the disposal of the US retail businesses
on 25 May 2022. Excluding acquisitions, disposals and the 53(rd) week, on a
currency neutral basis, revenue decreased by 2.4%. ((4))
· Basic EPS of 106.1p, an increase of 53.2p year-on-year.
· Cash inflow from operating activities before working capital
movements of £875.6m, an increase of £88.8m largely driven by strong trading
performance particularly in UK Sports.
· Net assets have increased to £1,658.2m from £1,308.6m at 24
April 2022, due to the increased profitability of the Group offset by
significant share buybacks.
Strategic and operational highlights
Strategic progress: Elevation Strategy
· Further strengthened brand partnerships, unlocking better
products and new partnerships, with Nike listing us as one of its "Top Three
Global Strategic Partners" in its FY23 fourth quarter results.
· Rolled out Frasers Plus, an FCA approved and regulated credit
facility and loyalty programme, across our brands and businesses.
· Continued investment in our estate, opening a new Sports Direct
flagship in Manchester, and a new Flannels flagship in Liverpool, with
continued store openings and refurbishments across all divisions.
· Invested significantly in improvements across our e-commerce
offering supported by the increased capabilities in our warehouse automation.
Strategic progress: acquisitions and investments
· Acquired Sportmaster in Denmark to help grow our European
footprint.
· Within the Premium Lifestyle division we acquired Gieves and
Hawkes, Amara Living and the Premium Brands portfolio from JD Sports Fashion
plc during the year, strengthening our ecosystem and delivery of our strategy.
· Acquired The Mall Shopping Centre in Luton and The Overgate
Centre in Dundee to further demonstrate our belief in the future of "bricks
and mortar" retail, also underpinning our operational requirements.
· Post year end, launched new joint venture in Indonesia to support
our international expansion.
· Post year end, made new strategic investments in AO World, ASOS,
Curry's and Boohoo, as the Group looks to explore opportunities to expand
commercial relationships, and further develop the ecosystem.
Outlook
We expect further strong profit progress during FY24 as our FY23 momentum
continues. The new financial year has started well, especially at Sports
Direct, which continues to benefit from the strengthening relationships with
key brand partners. We also expect further good progress on acquisition
integration synergies and cost mitigation exercises. Additionally, we
anticipate significantly lower levels of property profit than those delivered
in FY23 (£95.4m). Based on these factors, we expect FY24 APBT will be in the
range of £500m-£550m which would represent strong underlying trading profit
progression.
Other notes
(1) This is an Alternative Performance Measure, for which the
reconciliation to the equivalent GAAP measure is set out in the Glossary
section below. Adjusted EPS is discussed in note 9.
(2) £461.5m as at 26/07/2023, source: Bloomberg
(3) FY23 is an irregular 53-week reporting period. FY23
figures have been adjusted on a pro-forma basis to give the like-for-like
figures detailed the Glossary section below.
(4) A reconciliation to results excluding acquisitions, the
53(rd) week and currency neutral performance measures can be found in the
Glossary section below.
Enquiries
Andrew Kasoulis
Investor Relations Director
E. andrew.kasoulis@frasers.group
T. 07826 532191
Ronnie Laffar
Head of PR Communications
E. fgpr@frasers.group
T. 07585 886189
Emily Gainsford
Brunswick Group, PR
Advisors
E. frasersgroup@brunswick.com
T. 07469 083481
CHAIR'S STATEMENT
Introduction
We are pleased to report a record set of results for FY23, in line with the
guidance we set at the start of the year. Customer demand continues to be
strong across our Sport, Premium and Luxury divisions and, although the
macro-economic environment remains challenging, our business continues to
prove its resilience.
Michael Murray has completed his first year as Chief Executive Officer and has
built a strong leadership team around him. With this fantastic team in place,
the business has more energy and drive than ever before and is clearly
benefitting from the clarity and strategic direction that Michael brings to
the role.
During the year we were proud to return to the FTSE 100, demonstrating the
strength of our Elevation Strategy and the strong progress we are making in
delivering it.
Elevation and investment
It's clear from our results that the Elevation Strategy is working. We
continue to invest in opening new, elevated stores, as well as refurbishing
existing stores to improve the quality of our retail portfolio. We are
particularly proud of the new FLANNELS flagship store in Liverpool UK and the
new Sports Direct flagship store in Manchester UK, where customers are
responding brilliantly to our innovations and product offerings driven by our
strong brand partnerships. We have plans to open several more flagship stores
in the near future.
The rollout of our new strategy for Frasers continues to progress, through new
store openings and continued brand development. We now have multiple sites
across the UK and Ireland, as we aspire for Frasers to be a dynamic retail
destination, providing an elevated lifestyle platform for contemporary and
premium fashion.
We continue to strengthen relationships with our strategic brand partners.
Recently, I was proud to witness the strength of the Group's relationship with
NIKE, which led them to naming us as one of its "Top Three Global Strategic
Partners" in their quarterly results. Prior to joining the Group, I spent
almost 30 years at NIKE and it is great to see how this relationship has
evolved and strengthened to deliver mutual benefits for both businesses.
The Group has a clear and disciplined M&A strategy and the strategic
investments the Group makes in the ordinary course of business are important
to growing our ecosystem. Our strategic investment in Hugo Boss AG has been
hugely beneficial, enabling us to develop a strong relationship across the
business and in turn increasing the scale of our partnership, with it now
being one of our biggest brand partners across the Group.
We have brought a number of new names into the Group which helped develop our
ecosystem, such as Sportmaster in Denmark which will support our European
expansion plans and Missguided which has helped build our expertise in
e-commerce and an understanding of the Gen-Z customer.
Finally, Frasers Group in conjunction with a third-party lender has launched
the 'Frasers Plus' product across Frasers Group, with a number of key brand
channels offering this running account credit facility as a payment option and
with the rollout continuing to other Frasers Group brands. Through 'Frasers
Plus', customers can access two main products: the ability to collect rewards
that could be spent across all key businesses; and a buy-now-pay-later credit
facility that will allow customers to spread out purchases in instalments.
Additionally, the Studio Retail acquisition has given us the capability to
bring additional payment products to our customers in the near future. We also
have plans to roll out a Group-wide loyalty scheme, which will allow us to
consolidate our customer data to provide a more personalised shopping
experience.
Our people
Our aim is to create a diverse and inclusive working environment at Frasers
Group where everyone can be the best they can be, every day. To support this,
we have evolved our company values which are: Own It, Think Without Limits and
Be Relevant.
Michael Murray has strengthened and redefined our leadership team, with the
introduction of new and talented individuals who bring new energy and
expertise to the business.
Our Fearless 1000 bonus scheme, worth £100m for high-performing Frasers Group
colleagues, continues to motivate and inspire our workforce. The scheme is
determined by our share price, with the target being £10 by 2025. Despite the
challenging economic backdrop, we remain laser-focused on working collectively
towards our Fearless 1000 share scheme. At the 2022 Annual General Meeting, we
added an additional hurdle for the executive team of achieving an adjusted
profit before tax((1)) of at least £500m, in addition to meeting a £15 share
price target.
In October 2022, Frasers Group employees participated in our first Employee
Engagement Survey. Equipped with the insights from this survey, we have
introduced several employee engagement improvements. Sport is at the core of
our business, and we are dedicated to supporting the physical and mental
wellbeing of our teams. We have introduced several new wellbeing initiatives,
such as Frasers Fit, which encourages a fit and healthy workforce.
We continue to prioritise attracting the best talent to the business. Our
management development programme, the Frasers Elevation Programme, is now into
its fourth year and we will look to recruit a new intake in September 2023.
This focuses on developing talent in key areas for the Group, such as
management and leadership, retail capability, and commercial expertise.
Environmental, social and governance
Led by our Chief Financial Officer, Chris Wootton, and our Sustainability
team, our ESG strategy has continued to evolve in the last year, as we embed
this into our wider Group strategy. Our ESG journey is a key supporting
element to achieving our Group purpose and vision. We have created a simple
framework across the business that focuses on three key pillars - People,
Products, and Channels - which allows us to effectively implement our
responsibilities into the Group.
With a focus on People, Products and Channels, we're working to continue with
identifying and managing the environmental and social risks we face, and
future-proofing the business against them.
At the 2022 Annual General Meeting in September, we also announced our
commitment to a future without fur.
Outlook
Michael Murray set a clearly defined strategy for the business. We have many
growth opportunities, our strategic brand partners are the strongest they have
ever been, and we are looking forward to continuing our success in the years
ahead. We are grateful for the support we receive from our employees, banks,
our investment partners and all our stakeholders.
We expect further strong profit progress during FY24 as our FY23 momentum
continues. The new financial year has started well, especially at Sports
Direct, which continues to benefit from the strengthening relationships with
key brand partners. We also expect further good progress on acquisition
integration synergies and cost mitigation exercises. Additionally, we
anticipate significantly lower levels of property profit than those delivered
in FY23 (£95.4m). Based on these factors, we expect FY24 APBT will be in the
range of £500m-£550m which would represent strong underlying trading profit
progression.
Dividend and share buybacks
The Board has again decided not to pay a final dividend in relation to FY23.
We believe this is in the best interests of the Group, preserving financial
flexibility and enabling reinvestment back into the growth opportunities for
the business.
Our share buyback programme has continued during the year which is a
demonstration of our commitment to shareholder returns, our confidence in our
strategy and our potential for future growth.
David Daly
Non-Executive Chair of the Board
26 July 2023
KEY PERFORMANCE INDICATORS
The Board manages the Group's performance by reviewing a number of key
performance indicators (KPIs). The KPIs are discussed in this Chief
Executive's Report and Business Review, the Financial Review, the Environment
section and the 'Our People' section. The table below summarises the Group's
KPIs.
53 weeks ended 52 weeks ended 52 weeks ended
30 April 2023 24 April 2022 25 April 2021
Group revenue £5,565.2m £4,805.3m £3,625.3m
Reported PBT £660.7m £335.6m £8.5m
Adjusted PBT ((1)) £478.1m £339.8m (£39.9m)
Cash flow from operating activities before working capital £875.6m £786.8m £578.3m
Net assets £1,658.2m £1,308.6m £1,211.0m
NON-FINANCIAL KPIs
Number of retail stores ((2)) 1,630 1,552 1,547
Workforce turnover 44.5% 38.3% 28.9%
Electricity consumption on like for like stores improvement vs FY20 15.9% 5.0% -
Employee engagement score 66 - -
(1) The method for calculating adjusted PBT is set out in the Glossary.
(2) Excluding associates and stores in the Baltics states that trade under
fascias other than SPORTLAND or SPORTSDIRECT.com. and other niche fascias.
Includes GAME and Sofa.com concessions.
The Directors have adopted Alternative Performance Measures (APM's). APMs
should be considered in addition to UK-Adopted International Accounting
Standards ("UK IAS") measures. The Directors believe that Adjusted profit
before tax (PBT) provides further useful information for shareholders on the
underlying performance of the Group in addition to the reported numbers, and
is consistent with how business performance is measured internally. They are
not recognised profit measures under UK IAS and may not be directly comparable
with 'adjusted' or 'alternative' profit measures used by other companies.
Adjusted PBT is profit before tax less the effects of exceptional items,
realised foreign exchange, fair value adjustments to derivative financial
instruments included within Finance income/costs, fair value gains/losses and
profit on disposal of equity derivatives and share schemes and the tax impact
of these items. This measure has been reviewed by the Audit Committee which
has appropriately challenged management on the presentation and the adjusting
items included in this APM.
Group Revenue
The Board considers that this measurement is a key indicator of the Group's
growth.
Reported Profit Before Tax
Reported PBT shows both the Group's trading and operational efficiency, as
well as the effects on the Group of external factors as shown in the fair
value movements in Strategic investments and FX.
Adjusted Profit Before Tax
Adjusted PBT shows how well the Group is managing its ongoing trading
performance and controllable costs and therefore the overall performance of
the Group.
Cash Inflow from Operating Activities Before Working Capital
Cash inflow from operating activities before working capital is considered an
important indicator for the Group of the cash generated and available for
investment in the Elevation strategy.
Net Assets
The Board considers that this measurement is a key indicator of the Group's
financial position and health.
Number of Retail Stores
The Board considers that this measure is an indicator of the Group's growth.
The Group's Elevation strategy is replacing older stores and often this can
result in the closure of two or three stores, to be replaced by one larger new
generation store.
Workforce Turnover
The Board considers that this measure is a key indicator of the contentment of
our people. For more details refer to the retention section of the 'Our
People' section of this report.
Like for Like electricity consumption
This measure links to our targets in the TCFD report around the installation
of LED lighting, building management services, and voltage optimisation. This
measure allows the board to determine the effectiveness of these projects in
reducing the Group's energy consumption. Like for like stores includes stores
in Great Britain, above a de minimis consumption, and that were open from 2019
onwards. Given the effects of Covid-19 in FY21, no reliable figure was
available and, as a result, no KPI has been included for FY21.
Employee Engagement score
In FY23 the Group conducted its first ever employee engagement survey. This
allows the board to monitor and assess the Group's culture and cement our
strategic ambition to build the best team on the planet.
CHIEF EXECUTIVE'S REPORT AND BUSINESS REVIEW
STRATEGIC AND OPERATIONAL HIGHLIGHTS
Introduction
Since taking over as Chief Executive in May 2022, we have continued to invest
and make significant progress for the medium and long-term benefit of the
Group. This year has been the most transformational year for the Elevation
Strategy to date, as we build a winning proposition for the benefit of both
our brand partners and our customers. We're confident our strategy is
propelling us forward, and we are excited about the future and continued
growth opportunities.
Last year, we shared our new vision - 'to build the planet's most admired and
compelling brand ecosystem', and we have made huge strides towards achieving
this. In working towards this, we have strengthened key brand partner
relationships, attracted the best talent, grown our footprint across the UK
and internationally, and returned to the FTSE 100.
As we look to the year ahead, there is a lot to be excited about. We are
looking forward to completing the Group-wide rollout of Frasers Plus, a market
leading running account credit payment option and connected loyalty programme,
which will unlock reward schemes and payment facilities for Frasers Group
customers. Under our new Managing Director of Sport, Ger Wright, we will be
focusing on the international expansion of our sports business in
collaboration with our strategic brand partners, progressing towards our
ambition to become the number one sports retailer in EMEA. We are also driving
forward our store expansion and investment programme in the UK and
internationally, with further store openings and refits already in motion. We
are focused on FLANNELS and Frasers, following the recent success of the
flagship store openings.
Whilst the global macroeconomic environment is challenging, we continue to
deliver record results by staying focused on our strategy, we continue to
deliver monumental results. Our long-term investment, vision, and performance,
allows us to provide confidence to our customers, brand partners and,
shareholders, and customers as we establish define ourselves as a sector-
leading retail platform.
Business performance and financial highlights
The strength of the Frasers Group balance sheet is a critical foundation of
our business, enabling us to invest and grow with confidence. This year, we
continued our practice of adopting conservative, consistent and simple
accounting principles. This approach to our balance sheet ensures that
stakeholders have a clear view of the value creation in the business.
The group currently intends to revise its segmental reporting in FY24 based on
how we will be managing the business going forward and to give further
clarification to stakeholders, both internally and externally, regarding key
Group functions that complement the core retail business. These new segments
are currently intended to be UK Retail, International Retail, Property, and
Financial Services.
Our strong financial performance in the year is shown in the below financial
highlights:
· Revenue increased to £5,565.2m (FY22: £4,805.3m)
· Profit Before Tax increased to £660.7m (FY22: £335.6m)
· Adjusted PBT increased to £478.1m (FY22: £339.8m)
· Net Assets at FY23 £1,658.2m (FY22: £1,308.6m)
Brand partnerships
During 2022, we have strengthened and grown our strategic brand partnerships,
enabling us to unlock new and relevant brand opportunities for our customers.
These brand partnerships are fundamental to our strategy and remain a top
priority for the business. Our Elevation Strategy is also receiving global
recognition, with Nike listing us as one of its "Top Three Global Strategic
Partners" at its FY23 fourth quarter results. The momentum we have created
with the continued support of our brand partners gives us the confidence in
our ability to expand internationally. We are also really excited about
onboarding new leading sport brands into our business during FY24.
Acquisitions
Acquisitions and strategic investments the Group makes in the ordinary course
of business are a key growth component within the development of our
ecosystem. We have a clear and structured acquisition platform to unlock new
capabilities and drive growth opportunities across areas of our ecosystem.
Through this approach, we have strengthened our luxury business, with
acquisitions of the iconic tailoring brand, Gieves and Hawkes, the luxury
homeware brand, Amara Living, and, through a fashion acquisition from JD
Sports creating further expansion opportunities for FLANNELS.
Within our Premium business, the acquisitions of Missguided and I Saw it First
have expanded and improved our digital offering and grown our own brand
strategy. We continued to invest in our strategic brand partner, Hugo Boss
AG, which has enabled us to develop an exceptional relationship, resulting in
the brand now being one of our top five partners having more than doubled in
size from a revenue perspective in the last few years. Together, we have
developed a strategic relationship that has transpired over the years through
mutual collaboration to deliver benefits for both Frasers Group as well as
Hugo Boss AG. We have also been able to accelerate our international expansion
in sports through the acquisition of the leading Danish sporting goods
retailer, Sportmaster.
Frasers Group in conjunction with a third-party lender has launched the
'Frasers Plus' product across Frasers Group, with a number of key brand
channels offering this running account credit facility as a payment option and
with the rollout continuing to other Frasers Group brands. Through 'Frasers
Plus', customers can access two main products: the ability to collect rewards
that could be spent across all key businesses; and a buy-now-pay-later credit
facility that will allow customers to spread out purchases in instalments.
Additionally, the Studio Retail acquisition has given us the capability to
bring additional payment products to our customers in the near future. We also
have plans to roll out a Group-wide loyalty scheme, which will allow us to
consolidate our customer data to provide a more personalised shopping
experience. Finally, the Mysale acquisition will be a developed outlet
business for the Group, allowing us to expand our portfolio further.
Acquiring and disposing of property assets is core to our business model and
strategy. This year we have significantly invested into the UK high street,
through the acquisitions of Luton and Dundee shopping developments, totalling
£95.5 million. This significant and required investment into the retail
industry allows us to unlock demands and deliver retail experiences to our
customers. We have also disposed of significant property assets to increase
financial agility.
Store development
It was a busy year for the retail innovation team, as we continue to expand
and develop our store portfolio, which remains core to our Group and brand
partner strategy. We remain focused on the expansion of our Sports Direct
estate, with further openings in key markets across the UK, as well as
investing in our existing portfolio. We have also announced plans for Sports
Direct to open several stores in Indonesia, which will act as a platform for
business growth.
Europe remains a huge opportunity for Sports Direct and we continue to look
for opportunities to grow in key markets in the region, both organically and
by pursuing strategic acquisition opportunities. Whilst there are challenges
in some European markets, our collaborative relationships with our brand
partners means we can work closely together to ensure we are investing
smartly, delivering customer value, and pursuing the right areas for growth.
In our wider business, we have invested in flagship store locations, including
opening a 120,000 sq. ft FLANNELS flagship in Liverpool, UK. Further to this,
we have also opened and refitted a significant number of stores in the UK and
internationally, totalling approximately 1 million sq. ft. This includes
several GAME store-within-a-store formats. We have also elevated several
Everlast Gyms, as we continue the rollout of exceptional fitness clubs to
customers and athletes across the UK.
Operations
Our strong operational backbone and commercial business model enables us to
deliver our strategy and develop our sector leading ecosystem efficiently. To
date, we have invested over £200m into our warehouse automation, which has
given us one of the largest Autostores in Europe. Our recent investments in
key distribution hubs in Bitburg, Germany and Coventry, UK will also create a
strong pipeline for the Group's growth ambitions and help future proof the
business. Through strategic acquisitions and integrations, we have expanded
our capabilities, whilst making significant cost savings and creating an agile
structure for our platform.
Our people
In line with our rewards-based culture, we continue to look for new ways to
empower and motivate our workforce. We are incredibly proud of our team who
continue to show their loyalty and dedication to the business.
We believe regular and transparent communication with our teams is essential.
This year we have launched several new initiatives, including quarterly 'CEO
Sessions' where staff from across the business have the opportunity to come
together and discuss the vision, whilst we hear and learn from our teams on
the frontline.
Our Fearless 1000 bonus scheme, worth £100m for high-performing Frasers Group
colleagues, continues to motivate and inspire our workforce. The scheme is
determined by our share price, with the target being £10 by 2025. Despite the
challenging economic backdrop, we remain laser-focused on working collectively
towards our Fearless 1000 share scheme.
Sport remains at the core of our business. This year we have introduced
several wellbeing initiatives, such as Frasers Fit, which encourages a fit and
healthy workforce, and in September we hosted our first 'Frasers Festival'.
This brought together 1,500 of our top performing colleagues and brand
partners for a day of assault courses, interactive brand activations and live
entertainment to celebrate the business' 40-year anniversary.
Environmental, social, and governance
Sustainability continues to be a focus for the Group and the Board. Our
strategic priorities for sustainability are key supporting elements when it
comes to achieving our Group purpose and vision. We are committed to our ESG
journey, which we continue to develop as we strive to make long-term
commitments with lasting impact. This year, we have established a clear
direction for our ESG journey, by developing and defining our framework.
Within our framework, we have built clear pillars of focus - Products, People
and Channels - and through this we have a number of strategic priorities.
We have established new partnerships, improved our understanding of the
materials that make up our products, and explored new business models, such as
renting and take back. We also announced our commitment to a future without
fur at our Annual General Meeting in September 2022.
Our operational efficiency continues to go from strength to strength. We have
increased the storage capacity of our forward pickface by more than 350% and
therefore increased our SKU count. As a result, we now process more than 215
million units annually, and we need 50% less warehouse locations. Not only
have we effectively minimised our physical footprint, but we can now ensure
all new acquisitions work to the same standards that our core business has
built.
As we look to the future, we can be confident that we have an incredibly
exciting journey ahead of us. Our strategy is exceeding expectations, our
brand relationships are the best they have ever been, and we have a talented
and determined workforce, who continue to go above and beyond to deliver our
vision. As I develop in my role, I am incredibly enthusiastic for the year
ahead, and I am confident we have a strong proposition and an experienced
operational model, underpinned with a resilient balance sheet. We are set up
to win.
Michael Murray
Chief Executive Officer
26 July 2023
REVIEW BY BUSINESS SEGMENT
UK SPORTS RETAIL
UK Sports Retail includes core sports retail store operations in the UK, plus
all the Group's sports retail online business (excluding Sportland in the
Baltics, Game Spain, SportMaster, Sports Direct Malaysia, Bobs and EMS, the
gyms, Studio Retail, the Group's Shirebrook campus operations, retail store
operations in Northern Ireland, Evans Cycles, GAME UK and Coventry Arena. UK
Sports Retail is the main driver of the Group and accounts for 55.4% (FY22:
54.9%) of Group revenue.
53 weeks ended Pro forma 52 weeks 52 weeks ended
30 April 2023 April 2023((1)) 24 April 2022
(£'m) (£'m) (£'m)
Revenue 3,080.6 3,022.5 2,640.1
Cost of Sales (1,698.9) (1,666.8) (1,503.3)
Gross Profit 1,381.7 1,355.7 1,136.8
Gross Margin % 44.9 44.9 43.1
Adjusted PBT 447.0 438.6 196.9
(1) Pro forma 52 weeks results have been given in order to provide a
comparative to FY22, due to FY23 being a 53 week period.
Revenue increased 16.7% to £3,080.6m, largely due to FY23 including a full
year of Studio Retail. On a currency neutral basis and excluding acquisitions
and the 53(rd) week, revenue increased 0.8%.
UK Sports Retail gross margin increased to 44.9% (FY22: 43.1%), largely due to
the continually improving product mix.
Adjusted PBT for UK Sports Retail was £447.0m (FY22: £196.9m), largely due
to improved Sports Direct performance, a decrease in legal provisions, profit
on disposal of properties of £84.0m compared to £10.7m in FY22 and a
reduction in property related impairments in the current period (FY23: £26.6m
compared to FY22: £103.4m).
UK SPORTS RETAIL STORE PORTFOLIO ((3))
30 April 2023 24 April 2022
England 382 385
Scotland 38 37
Wales 29 30
Northern Ireland 20 19
Guernsey 1 1
Isle of Man 1 1
Jersey 1 1
GAME UK ((1)) 267 259
Evans Cycles ((2)) 57 57
USC 16 18
Total 812 808
Opened 93 90
Closed (89) (88)
Acquired - -
Area (sq.ft.) Approx. 6.9m Approx. 6.7m
(1) The GAME UK store numbers include 176 concessions operating within
Sports Direct fascia stores (FY22: 125) and does not include BELONG arenas.
(2) The Evans Cycles store numbers include 2 concessions operating within
House of Fraser fascia stores (FY22: 2).
(3) Table excludes the Group's standalone gyms.
PREMIUM LIFESTYLE
The Group's Premium Lifestyle division offers a broad range of clothing,
footwear and accessories from leading global contemporary and luxury retail
brands through our fascias in the UK: FLANNELS, Frasers, House of Fraser, Jack
Wills and Sofa.com, Cruise, Van Mildert and the fashion brands acquired from
JD Sports, along with their related websites.
53 weeks ended Pro forma 52 weeks 52 weeks ended
30 April 2023 April 2023 24 April 2022
(£'m) (£'m) (£'m)
Revenue 1,212.9 1,190.0 1,056.6
Cost of Sales (741.1) (727.1) (581.8)
Gross Profit 471.8 462.9 474.8
Gross Margin % 38.9 38.9 44.9
Adjusted PBT (0.1) (0.1) 10.5
(1) Pro forma 52 weeks results have been given in order to provide a
comparative to FY22, due to FY23 being a 53 week period.
Revenue grew 14.8% to £1,212.9m. This was largely due to new FLANNELS stores,
continued growth in online and acquisitions, offset by a reduction in House of
Fraser stores. On a currency neutral basis and excluding acquisitions and the
53(rd) week, revenue increased 5.7%.
Premium Lifestyle gross margin decreased to 38.9% (FY22: 44.9%), largely due
to House of Fraser store closures and brand consolidation, against a very
strong performance in FY22 and reflecting the tougher macro-economic
conditions this year.
Adjusted PBT for Premium Lifestyle decreased to a loss of £0.1m in FY23
compared to a profit of £10.5m in the prior period, largely due to the prior
period including rates relief, current year intangible impairments of £19.8m
and House of Fraser store closures, partially offset by new FLANNELS stores,
continued growth in online and less property related impairments in the
current period (FY23: £47.9m compared to FY22: £103.5m).
PREMIUM LIFESTYLE STORE PORTFOLIO
30 April 2023 24 April 2022
Fashion Brands 67 -
FLANNELS 58 53
Jack Wills((2)) 33 52
House of Fraser / Frasers((2)) 31 39
Sofa.com ((1)) 20 23
Gieves & Hawkes 5 -
Cruise 4 5
18 Montrose 2 4
Garment Quarter 1 1
Van Mildert - 1
Psyche - 1
Total 221 179
Opened 9 21
Closed (49) (21)
Acquired 82 -
Area (sq.ft.) Approx. 3.6m Approx. 4.0m
(1) Sofa.com store numbers include 13 concessions operating within House of
Fraser fascia stores (FY22: 17).
(2) Jack Wills and Frasers stores in Republic of Ireland are shown in the
European store numbers as opposed to the Premium Lifestyle store numbers.
INTERNATIONAL RETAIL
International Retail includes all the Group's sports retail stores, management
and operations internationally (including the Group's international
distribution centres in Belgium, Austria, Denmark, Malaysia as well as GAME
Spain). It also includes the online businesses relating to SD Malaysia, Game
Spain, SportMaster and Mysale. During the period the Bob's Stores and
Eastern Mountain Sports fascias and their corresponding e-commerce offerings
were disposed of.
53 weeks ended Pro forma 52 weeks 52 weeks ended
30 April 2023 April 2023 24 April 2022
(£'m) (£'m) (£'m)
Revenue 1,083.4 1,063.0 940.5
Cost of Sales (644.6) (632.4) (526.5)
Gross Profit 438.8 430.6 414.0
Gross Margin % 40.5 40.5 44.0
Adjusted PBT 79.4 77.9 121.3
(1) Pro forma 52 weeks results have been given in order to provide a
comparative to FY22, due to FY23 being a 53 week period.
Revenue increased 15.2% to £1,083.4m, largely due to acquisitions during the
period and the prior period being impacted by Covid-19. On a currency neutral
basis and excluding acquisitions and the 53(rd) week, revenue decreased by
2.4%.
Gross margin decreased to 40.5%, largely due to acquisition revaluation
impacts in relation to Sportmaster and the prior period including inventory
holding efficiencies in relation to the US retail businesses not recurring in
the current period.
Adjusted PBT for International Retail decreased to £79.4m from £121.3m in
FY22, largely due to the Sportmaster acquisition and the disposal of Bob's
Stores and Eastern Mountain Sports in the period.
INTERNATIONAL RETAIL STORE PORTFOLIO ((1))
All of the following stores are operated by companies wholly owned by the
Group, except for Estonia and Latvia where the Group owns 60%, Lithuania where
the Group owns 51% and Malaysia where the Group owns 75%.
30 April 2023 24 April 2022
GAME Spain 233 235
Denmark 68 -
Republic of Ireland((1)) 45 43
Belgium 34 34
Malaysia 33 34
Estonia((2)) 22 20
Portugal 21 21
Lithuania((2)) 19 19
Austria 19 19
Latvia((2)) 18 18
Poland 15 13
Czech Republic 12 12
Spain 12 10
Slovenia 11 13
France 7 4
Hungary 7 8
Cyprus 6 6
Holland 5 5
Slovakia 5 5
Iceland 2 1
Luxembourg 2 2
Germany 1 1
Bob's Stores - 21
Eastern Mountain Sports - 21
Total 597 565
Opened 16 13
Closed (17) (10)
Acquired 75 -
Disposed (42) -
Area (sq.ft.) Approx. 4.3m Approx. 5.0m
(1) Excluding Heatons fascia stores
(2) Includes only stores with SPORTSDIRECT.com and SPORTLAND fascias.
WHOLESALE & LICENSING
The Wholesale & Licensing segment operates our globally renowned heritage
Group brands (such as Everlast, Lonsdale, Karrimor and Slazenger), the Group's
Sports Retail division sells products under these brands in its stores and the
Wholesale & Licensing division sells the brands through its wholesale and
licensing activities.
53 weeks ended Pro forma 52 weeks 52 weeks ended
30 April 2022 April 2023 24 April 2022
(£'m) (£'m) (£'m)
Wholesale 165.0 161.8 145.3
Licensing 23.3 22.9 22.8
Total Revenue 188.3 184.7 168.1
Cost of Sales (110.8) (108.7) (105.0)
Gross Profit 77.5 76.0 63.1
Gross Margin % 41.2 41.2 37.5
Adjusted PBT (48.2) (47.3) 11.1
Revenue increased by 12.0% to £188.3m. Wholesale revenues were up 13.6% to
£165.0m and Licensing revenues increased 2.2% to £23.3m, largely due to an
increase in revenue from our US business Antigua. On a currency neutral basis
and excluding acquisitions and the 53(rd) week, total revenue increased by
0.9%.
Total gross margin increased to 41.2% (FY22: 37.5%), largely due to product
mix within the US wholesale division and Antigua.
Adjusted PBT decreased to a loss of £48.2m (FY22: profit of £11.1m), largely
due to the Everlast impairment of intangibles and goodwill in the period.
PROPERTY REVIEW
The elevation of the Group's estate remains a key focus area. Over the
financial period two Flagship Sports Direct stores were delivered in
Birmingham City Centre (60k sq ft) and Manchester City Centre (50k sq ft).
Both openings have pushed the Flagship concept to new heights rivalling the
best Sports Stores globally and introducing specialist sporting zones,
interactive experiences and curated activation spaces. A further Flagship site
in Dublin City centre has been secured with other opportunities across the UK
and Europe being considered.
Equally for the Luxury pillar of the Group, FLANNELS the store estate
continues to grow along with the introduction of Flagship stores with
Liverpool opening early in the financial year. The largest FLANNELS store to
date at 120k sq ft incorporating Beauty, Food & Beverage, a Beauty Clinic
and the boutique fitness brand Barry's Bootcamp. The scale and format of the
store has gained significant industry attention including a Drapers award for
best store design (Nov 22). Another significant opening for FLANNELS was
Blanchardstown, Dublin being the first FLANNELS store to open outside of the
UK. Additional FLANNELS stores are due to open in the Republic of Ireland over
the next financial year.
The pipeline of new store openings for the upcoming financial year is
anticipated to be comparable to prior years with a focus on delivering large
multi format stores with co-investment from landlords.
Along with new store openings, the Group's estate grew via company
acquisitions both in the UK and internationally. The most significant being 77
stores relating to brands acquired from JD Sports Fashion Plc that now form
part of the Group's Premium Lifestyle division. In addition, now forming part
of the International Retail division 'Sportmaster' in Denmark was acquired
resulting in 68 stores within a new territory for the Group. Whilst the Group
has been active with corporate acquisitions, over the period the 'Bob's
Stores' and 'Eastern Mountain Sports' businesses based in the United States
were sold reducing the international footprint by 42 stores.
Further to new store openings, the Group continues to elevate via refitting
existing trading stores. A refit model has been developed across the Group's
brands and executed in appropriate locations. This includes a new Everlast Gym
refit model as a progression from the new concept first delivered in
Manchester, Denton.
Finally, investment in Freehold property continues to be an option for the
Group as has been the case in prior years. Disposals of Freehold properties
outweighed acquisitions due to a significant portfolio sale of 9 Retail Parks
completing in August 22. Notable acquisitions include Luton Shopping Centre
and the former Debenhams on Henry St, Dublin.
Store Portfolio - UK Retail
Sports Stores in the UK (including Northern Ireland):
Sports Direct is currently operating 382 stores in England, 38 in Scotland, 29
in Wales and 20 in Northern Ireland. Across the UK there were 22 openings and
24 closures over the period. In almost all instances the closures were linked
to new elevated larger store openings. The increase in store sizes is
reflected by the increase in sales area for Sports Direct at a combined c.6.3m
sqft in the UK.
Openings to highlight include two flagship stores In Birmingham City centre
(60k sq ft) followed by Manchester City centre (50k sq ft), being the most
advanced Sports Direct store delivered to date. Both flagship stores include
specialist sporting zones as well as curated activation spaces. Further
flagship locations are due to open in Cardiff and in the Metrocentre in
Gateshead over the next financial period. The number of new Sports Direct
stores for FY24 is anticipated to be broadly in line with the this financial
period.
The Sports Direct refit model was further refined over the period and is due
to be implemented across selected locations in order to aid the elevation of
the store estate.
Store Portfolio - Evans Cycles
There are currently 57 Evans Cycle stores trading, this remains the same as
the prior financial year following six openings and six closures over the
period. The Evans Cycles store-in-store concept continues to be implemented in
selected locations, primarily within large format Sports Direct stores.
Store Portfolio - GAME UK:
As was the case in the previous financial year, the number of GAME stores in
the UK increased to 267, a net increase of 8 stores over the period. This has
been driven by the smaller store in store format which forms part of new
selected Sports Direct stores. The relocation programme transitioning
standalone sites into existing Sports Direct stores continued at pace and is
anticipated to be broadly complete by the end of the next financial year and
into 2024.
Store Portfolio - Premium Lifestyle
Within the Group's Premium division there was significant change over the
period following the acquisition of various Brands from JD Sports Fashion Plc
resulting in an additional 77 stores. The majority of the new stores fall
under the Tessuti and Scotts Brand. In addition the acquisition of Gieves
& Hawkes resulted in 5 new stores in the division.
FLANNELS
For FLANNELS, over the period there were 6 new stores opened with one closure
being the result of a relocation. This brings the total estate to 58 stores.
The most notable opening over the period was FLANNELS Liverpool, the largest
flagship store to date (120k sq ft). The store incorporates a new mix of
Beauty, Food & Beverage, a Beauty Clinic and the boutique fitness brand
Barry's Bootcamp. With such a combination and scale the store gained
significant industry attention including a Drapers award for best store design
(Nov 22).
The first store outside of the UK was opened in Blanchardstown, Dublin.
Further openings within Ireland are due over the upcoming financial period,
the next location will be in Cork City centre. Note the store numbers for
FLANNELS Ireland are reflected within the 'International' portfolio section of
the report.
Looking ahead the new store activity for FLANNELS will continue in a
comparable manner to prior financial years. A key opening will be another
flagship planned at the Metrocentre in Gateshead. In addition to usual store
openings there will be further activity relating to a conversion programme of
selected Tessuti stores as well as others stores acquired from JD Sports Plc
in FY23 to the FLANNELS brand.
House of Fraser (HoF):
At the end of FY23 there were 31 House of Frasers stores trading, a net
decrease of eight stores after ten closures and two openings.
A notable new store was opened in Derby taking a former Debenhams unit. The
Frasers store comprises a reduced format combined with separate floors housing
Sports Direct.
Two new Frasers sites were opened in Ireland located in Cork and Newbridge.
Both the new stores also incorporate a linked floor to Sports Direct. Note
these stores in Ireland are included within the 'International' store numbers.
New Frasers stores due to open over FY24 include a new format at Norwich and a
new location in Blackpool. Both sites will include other Group Brands
consistent with recent new format Frasers openings.
Store Portfolio - International:
Republic of Ireland (ROI):
At the end of the financial period there were 45 stores within the Republic of
Ireland (ROI), a net
increase of two stores. A key opening was the first FLANNELS store outside of
the UK located in Blanchardstown, Dublin. Further to this, the Frasers element
of the former Debenhams units taken in Newbridge and Cork Mahon Point Shopping
Centre were opened (note the Sports Direct section opened during FY22).
A refit programme elevating selected Sports Direct stores commenced over the
period and will continue into the next financial year. New sites have also
been secured for Sports Direct, the most significant being the former
Debenhams on Henry Street, Dublin anticipated to open over FY25. An additional
FLANNELS site is also due to open in Cork over FY24 with further sites being
assessed.
Continental Europe:
The Group operates 286 Sports retail stores in Europe across 19 countries
(excluding ROI, plus 26 non-core, speciality and outlet stores) totalling over
3.2m square feet of net sales space across our European sports fascias
(including Sportland, Lillywhites, Sports World etc).
During the period, the Group opened thirteen stores across seven countries
including 3 stores in France as we look to grow our presence in this strategic
market. Eight of these were elevated Sports Direct stores incorporating a USC
totalling over 100k sq ft of retail space.
There were also fifteen store closures in six different countries due to
either relocations, poor performance or landlords requiring the units back.
The Group is firmly committed to physical store expansion and continues to
build a pipeline of store openings across the markets we operate in.
During the financial year, we further expanded our geographical coverage with
the purchase of Denmark's number one Sporting Goods chain, Sportmaster. We are
now integrating this business into our wider platform and will optimise the
estate in the coming years focussing on bigger, better, fewer stores,
showcasing our best-in-class Sporting Goods assortments to the Danish market.
Rest of World:
33 stores trading across Malaysia following 1 opening and 2 closures over
FY23.
There are now 24 elevated stores with 11 USC stores incorporated, where
existing space has allowed. The balance stores & factory outlets will
eventually be replaced with the elevated concept as part of 3-year expansion.
Additional geographical locations across Malaysia have been identified to grow
the store estate. These new locations will also include a number of Flagship
sites.
The Group's business located in the United States, Bob's Stores and Eastern
Mountain Sports were sold over the period ending all retail operations in the
territory.
Freehold / Long Leasehold Property:
Investment in property assets remains an important aspect of the Group's
estate strategy.
• Over FY23 a total of 9 properties were acquired across the UK, totalling
approx. £143.0m. The most
significant purchase was The Mall, Luton for a consideration of 58.0m.
• Two sites were acquired within the EU totalling approx. €60.3m, the most
significant being the former Debenhams in Dublin City Centre.
• Disposal of property assets continues to be standard practice for the
Group. Over the period 13 disposals completed within the UK for a total
consideration of c.207.6m. The most significant transaction was a portfolio
sale of 9 retail parks for a combined price of approx. £205.0m.
• There were 5 property disposals across the EU totalling c.€39.7m, this
was entirely due to another portfolio sale consisting of 5 sites acquired from
Toys R Us over FY20.
Michael Murray
Chief Executive
26 July 2023
FINANCIAL REVIEW
The Financial Statements for the Group for the 53 weeks ended 30 April 2023
are presented in accordance with UK-adopted International Accounting Standards
(UK IAS).
SUMMARY OF RESULTS
53 weeks ended 52 weeks ended
30 April 2023 24 April 2022
(£'m) (£'m)
Revenue 5,565.2 4,805.3
Reported profit before tax 660.7 335.6
Adjusted PBT((1)) 478.1 339.8
Earnings per share (EPS) Pence per share Pence per share
Reported basic EPS 106.1 52.9
Adjusted basic EPS((2)) 70.9 53.9
(1) Adjusted PBT is profit before tax less the effects of exceptional items,
realised foreign exchange, fair value adjustments to derivative financial
instruments included within Finance income / costs, fair value gains/losses
and profit on disposal of equity derivatives, share schemes and the tax impact
of these items. Further detail on this calculation can be found in the
Glossary.
(2) Adjusted basic EPS is reported basic EPS less the effects of exceptional
items, realised foreign exchange, fair value adjustments to derivative
financial instruments included within Finance income/costs, fair value
gains/losses and profit on disposal of equity derivatives, share schemes and
the tax impact of these items. Further detail on this calculation can be
found in note 9.
FOREIGN EXCHANGE AND TREASURY
The Group reports its results in GBP but trades internationally and is
therefore exposed to currency fluctuations on currency cash flows in various
ways. These include purchasing inventory from overseas suppliers, making sales
in currencies other than GBP and holding overseas assets in other currencies.
The Board mitigates the cash flow risks associated with these fluctuations
with the careful use of currency hedging using forward contracts and other
derivative financial instruments.
The Group uses forward contracts that qualify for hedge accounting in two main
ways - to hedge highly probable EUR sales income and USD inventory purchases.
This introduces a level of certainty into the Group's planning and forecasting
process. Management has reviewed detailed forecasts and the growth assumptions
within them and is satisfied that the forecasts meet the criteria for being
highly probable forecast transactions.
As at 30 April 2023 and as detailed in note 30c, the Group had the following
forward contracts and bought options that qualified for hedge accounting under
IFRS 9 Financial Instruments, meaning that fluctuations in the value of the
contracts before maturity are recognised in the Hedging Reserve through Other
Comprehensive Income. After maturity, the sales and purchases are then valued
at the hedge rate.
Currency Hedging against Currency value Timing Rates
USD / GBP USD inventory purchases USD 380m FY24 1.21 - 1.26
USD / EUR USD inventory purchases USD 60m FY24 1.31
EUR / GBP Euro sales EUR 816m FY24 - FY26 0.99 - 1.09
The Group also uses currency options, swaps and spots for more flexibility
against cash flows that are less than highly probable and therefore do not
qualify for hedge accounting under IFRS 9 Financial Instruments. The fair
value movements before maturity are recognised in the Income Statement.
The Group has the following sold currency options and unhedged forwards:
Currency Expected use Currency value Timing Rates
USD / GBP USD inventory purchases USD 190m FY24 1.21 - 1.25
USD / EUR USD inventory purchases USD 60m FY25 1.31
EUR / GBP Euro sales EUR 1,056m FY24 - FY27 0.98 - 1.13
The Group is proactive in managing its currency requirements. The Treasury
team works closely with senior management to understand the Group's plans and
forecasts, and discusses and understands appropriate financial products with
various financial institutions, including those within the Group Financing
Facility. This information is then used to implement suitable currency
products to align with the Group's strategy.
Regular reviews of the hedging performance are performed by the Treasury team
alongside senior management to ensure the continued appropriateness of the
currency hedging in place and, where suitable, to implement additional
strategies and / or restructure existing approaches, in conjunction with our
financial institution partners.
Given the potential impact of commodity prices on raw material costs, the
Group may hedge certain input costs, including cotton, crude oil and
electricity.
EARNINGS
Basic earnings per share (EPS) is calculated by dividing the earnings
attributable to ordinary shareholders by the weighted average number of
ordinary shares outstanding during the financial period. Shares held in
Treasury and the Employee Benefit Trust are excluded from this figure.
53 weeks ended 52 weeks ended
30 April 2023 24 April 2022
(pence per share) (pence per share)
Reported EPS (Basic) 106.1 52.9
Adjusted EPS (Basic) ((1)) 70.9 53.9
Weighted average number of shares (actual) 459,911,330 471,975,282
(1) Adjusted earnings per share measures provide additional useful
information for shareholders on the underlying performance of the business and
are consistent with how business performance is measured internally. Adjusted
earnings is not a recognised profit measure under IFRS and may not be directly
comparable with adjusted profit measures used by other companies. Further
details can be found in the Glossary and in note 9.
DIVIDENDS
The Board has decided not to pay a final dividend in relation to FY23 (FY22
£nil). The Board remains of the opinion that it is in the best interests of
the Group and its shareholders to preserve financial flexibility and
facilitate future investments and other growth opportunities. The payment of
dividends remains under review.
CAPITAL EXPENDITURE
During the period, gross capital expenditure (excluding IFRS 16) amounted to
£468.4m (FY22: £323.2m), which included £185.8m on freehold and investment
properties (FY22: £121.3m) and £70.6m on warehouse automation (FY22:
£36.8m).
STRATEGIC INVESTMENTS
The Group continues to hold various strategic investments as detailed in note
13. In addition, the Group also holds indirect strategic investments within
contracts for difference and options.
The fair values of the contracts for difference and options are recognised in
Derivative Financial Assets or Liabilities on the Group Balance Sheet, with
the movement in fair value recorded in the Income Statement.
The Frasers Group's strategic investment strategy is a key enabler in the
growth and success of the Group and is in the ordinary course of business.
ACQUISITIONS
The Group acquired a number of businesses during the period.
RELATED PARTIES
On 1 May 2022 Michael Murray was appointed as CEO. Prior to his appointment MM
Prop Consultancy Limited and the Group finalised the terms on which any
relevant prior consultancy services agreements terminated. The Board has now
completed its assessment of the unsettled value created by MM Prop Consultancy
Limited to the Group, with the assistance of independent third party experts.
Mike Ashley stepped down from the board at the AGM on 19 October 2022.
Subsequent to the AGM a consultancy agreement (the "Agreement") was signed
between Frasers Group plc and Mash Holdings Limited ("Mash"), a company wholly
owned by Mike Ashley.
The services that can be provided under the Agreement by Mash to the Group
(generally through the services of Mike Ashley as an individual), include
advisory and consultancy services, including in relation to (i) strategy,
strategic investments, operations, systems, activities, assets, management,
and/or business of the Company and all or any Group Company, including in
relation to any merger, acquisition, disposal, restructuring or any other
operational or organisational need or requirement of the Company/Group
Company; and (ii) such other advisory and consultancy services as the Board or
the CEO or the Chair of the Company shall from time to time reasonably request
of Mash.
No remuneration is payable by Frasers Group plc to Mash for these consultancy
services. The Agreement can be terminated by either party giving at least four
weeks prior written notice.
TAXATION
Total tax contribution
The effective tax rate on profit before tax in FY23 was 24.1% (FY22: 23.5%).
The Group has contributed £469m in taxes paid and collected during the
year. Taxes paid by the Group of £204m are primarily business rates,
corporation tax and employer's national insurance contributions. Taxes
collected by the Group of £265m are primarily net VAT, PAYE and Employee's
national insurance contributions.
Based on the FY22 contribution of £442m (benchmarking data is not available
for FY23), the Group ranks 42 of 95 companies reporting in the 100 Group (a
report prepared by PwC covering the top 100 UK companies which is published
at: https://www.pwc.co.uk/services/tax/total-tax-contribution-100-group.html
(https://www.pwc.co.uk/services/tax/total-tax-contribution-100-group.html) ).
The Group's Tax Strategy is published at:
https://frasers-cms.netlify.app//assets//files/financials/fy23-tax-strategy_.pdf
(https://frasers-cms.netlify.app/assets/files/financials/fy23-tax-strategy_.pdf)
.
Taxes paid by country
The Group generates 88.7% of its profits in companies resident in the UK and
pays 82.6% of its corporation tax liabilities to HMRC in the UK.
Plastic Packaging Taxes
During FY23 the Group has paid approx. £100k in respect of the new UK
Plastics Packaging Tax.
CASH FLOW AND NET DEBT
Net debt decreased by £74.3m, from £491.1m at 24 April 2022 to £416.8m at
30 April 2023 (including the securitisation facility within Studio Retail).
Net interest payable (excluding IFRS16 and fair value movements) increased to
£37.3m, (FY22: £14.3m) largely due to the increase in the Bank of England
base rate increasing the interest on the Group financing and the full year
impact of the securitisation facility within Studio Retail.
Analysis of net debt:
30 April 2023 24 April 2022
(£'m) (£'m)
Cash and cash equivalents 332.9 336.8
Borrowings (749.7) (827.9)
Net debt (416.8) (491.1)
The Group enacted the one year extension to our Group facility and as at the
date of reporting has a combined term loan and revolving credit facility (RCF)
of £1,052.5m until November 2024 and £1,002.5m until November 2025, with the
possibility to extend this by a further year.
The Group continues to operate comfortably within its banking facilities and
covenants and the Board remains comfortable with the Group's available
headroom.
Cash flow:
52 weeks ended 52 weeks ended
30 April 2023 24 April 2022
(£'m) (restated) (£'m)
Cash inflows from operating activities 634.9 741.8
Income taxes paid (93.2) (121.0)
Net cash inflows from operating activities 541.7 620.8
Lease payments (140.7) (176.2)
Net finance costs paid (30.4) (26.5)
Net capital expenditure (including sale & leasebacks) (214.5) (280.2)
Net proceeds from acquisition and disposal of subsidiary undertakings 18.5 0.8
Borrowings acquired through business combinations - (232.0)
Purchase of listed investments, net of disposal proceeds (70.9) 40.0
Proceeds in relation to equity derivatives 66.2 117.4
Decrease/(increase) in deposits relating to equity derivatives* 53.8 (112.9)
Investment income 3.0 1.0
Exchange movement on cash balances 3.6 0.1
Purchase of own shares (155.3) (193.2)
Dividends paid to non-controlling interests (0.7) (1.3)
Decrease/(increase) in net debt 74.3 (242.2)
*Movements in deposits relating to equity derivatives have been presented as a
separate line item within net cash outflows from investing activities in the
current year. Following a reassessment, management have concluded that this is
a more appropriate presentation of movements in these collateral deposits in
line with IAS 7 Statement of Cash Flows. Prior year information has been
restated on an equivalent basis, resulting in a £112.9m increase to net cash
inflows from operating activities and an equal and opposite increase to net
cash outflows from investing activities. The presentational adjustment does
not have any impact on net decrease in cash and cash equivalents, the balance
sheet, the Group's profit, or earnings per share in any of the periods
presented.
SUMMARY OF CONSOLIDATED BALANCE SHEET
30 April 2023 24 April 2022
(£'m) (£'m)
Property, plant & equipment 1,150.7 1,011.0
Investment properties 131.3 89.2
Long-term financial assets 289.6 206.6
Intangible assets 24.1 120.6
Inventories 1,464.9 1,277.6
Net consumer credit receivables 225.9 234.2
Trade & other receivables 494.2 607.2
Trade & other payables (711.9) (729.8)
Provisions (306.5) (433.0)
Net debt (416.8) (491.1)
Lease liabilities (679.9) (620.6)
Disposal group held for sale - 17.3
Other (7.3) 19.4
Net assets 1,658.2 1,308.6
The majority of the increase in property, plant and equipment relates to the
purchase of freehold and investment property along with the store fit outs in
the period as part of the continued Elevation strategy offset by the
impairments of freehold land and buildings and plant and equipment and the
sale of retail parks.
IFRS 16 right of use assets have increased largely due to the acquisitions in
the period offset by impairments. Lease liabilities have increased largely due
to acquisitions offset by lease payments during the period.
Long-term financial assets have increased during the period largely due to the
increase in the fair value of the Hugo Boss strategic investment and the
addition of the N Brown strategic investment in the period.
Inventory has increased largely due to the acquisitions in the period and
opportunities from brand partners.
Receivables have decreased largely due to the reduction in the reimbursement
asset in relation to the Group's ongoing non-UK tax enquiries (FY23 £nil
compared to FY22 £88.3m) and a reduction in the deposits in respect of
derivative financial instruments (FY23 £190.1m compared to FY22: £243.9m),
with the decrease mainly relating to Hugo Boss. Receivables also include
£225.9m in relation to credit customer receivables within the Studio Retail
business (FY22: £234.2m).
Provisions have decreased largely due to non-crystallisation of a proportion
of the ongoing non-UK tax enquiries.
SUMMARY OF COMPANY BALANCE SHEET (EXTRACT)
30 April 2023 24 April 2022
(£'m) (£'m)
Investments 1,440.4 1,443.6
Debtors: amounts falling due within one year 269.9 512.8
Debtors: amounts falling due after more than one year 95.4 -
Creditors: amounts falling due within one year (883.2) (945.7)
Investments relate to investments in subsidiaries and long-term financial
assets. The decrease is due to the impairment to the Everlast investment,
offset by the increase in the fair value of the Hugo Boss strategic investment
and the addition of the N Brown strategic investment in the period.
The majority of the movement in debtors relates to a decrease in collateral to
cover margin requirements for derivative transactions held with
counterparties. The remaining balance relates to amounts owed by Group
undertakings.
Creditors largely relates to amounts owed to Group undertakings.
Chris Wootton
Chief Financial Officer
26 July 2023
FINANCIAL INFORMATION
CONSOLIDATED INCOME STATEMENT
For the 53 weeks ended 30 April 2023
Continuing operations Discontinued operations Total Continuing operations Discontinued operations Total
53 weeks ended 30 April 2023 52 weeks ended 24 April 2022
Note
(£'m) (£'m) (£'m) (£'m) (£'m) (£'m)
Revenue 5,441.3 8.5 5,449.8 4,672.9 114.2 4,787.1
Credit account interest 115.4 - 115.4 18.2 - 18.2
Total revenue (including credit account interest) 2 5,556.7 8.5 5,565.2 4,691.1 114.2 4,805.3
Cost of sales (3,175.5) (4.4) (3,179.9) (2,647.2) (56.1) (2,703.3)
Impairment losses on credit customer receivables (15.5) - (15.5) (13.3) - (13.3)
Gross profit 2 2,365.7 4.1 2,369.8 2,030.6 58.1 2,088.7
Selling, distribution and administrative expenses (1,968.0) (4.0) (1,972.0) (1,557.3) (31.5) (1,588.8)
Other operating income 41.0 0.1 41.1 45.4 2.6 48.0
Property related impairments 11 (99.6) - (99.6) (227.0) - (227.0)
Exceptional items 3 97.1 - 97.1 (1.3) - (1.3)
Profit on sale of properties 95.4 - 95.4 10.8 - 10.8
Operating profit 2 531.6 0.2 531.8 301.2 29.2 330.4
Gain on sale of subsidiaries/discontinued operations 10 17.6 26.3 43.9 - - -
Investment income 4 112.6 - 112.6 43.8 - 43.8
Investment costs 5 (4.6) - (4.6) (19.7) - (19.7)
Finance income 6 46.1 - 46.1 30.3 - 30.3
Finance costs 7 (69.0) (0.1) (69.1) (48.9) (0.3) (49.2)
Profit before taxation 634.3 26.4 660.7 306.7 28.9 335.6
Taxation 8 (159.3) (0.1) (159.4) (75.5) (3.2) (78.7)
Profit for the period 2 475.0 26.3 501.3 231.2 25.7 256.9
ATTRIBUTABLE TO:
Equity holders of the Group 461.7 26.3 488.0 224.1 25.7 249.8
Non-controlling interests 13.3 - 13.3 7.1 - 7.1
Profit for the period 2 475.0 26.3 501.3 231.2 25.7 256.9
Pence per share Pence per share Pence per share Pence per share Pence per share Pence per share
Basic earnings per share 9 100.4 5.7 106.1 47.5 5.4 52.9
Diluted earnings per share 9 100.4 5.7 106.1 47.5 5.4 52.9
Discontinued operations relate to the Group's US retail businesses which were
disposed of during the year. See note 10.
The accompanying accounting policies and notes form part of these financial
statements.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the 53 weeks ended 30 April 2023
53 weeks ended 52 weeks ended
Note 30 April 2023 24 April 2022
(£'m) (£'m)
Profit for the period 2 501.3 256.9
OTHER COMPREHENSIVE (LOSS)/INCOME
ITEMS THAT WILL NOT BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS
Fair value movement on long-term financial assets 9.9 (8.1)
Remeasurements of defined benefit pension scheme (0.5) (26.8)
Deferred tax on remeasurements of defined benefit pension scheme - 6.7
ITEMS THAT WILL BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS
Exchange differences on translation of foreign operations 13.4 6.8
Foreign exchange impact of disposal of discontinued operations (1.6) -
Fair value movement on hedged contracts - recognised in the period 6.5 52.1
Fair value movement on hedged contracts - recognised time value of options 0.7 -
Fair value movement on hedged contracts - reclassified and reported in sales (24.6) -
Fair value movement on hedged contracts - reclassified and reported in (38.5) 7.5
inventory/cost of sales
Fair value movement on hedged contracts - taxation taken to reserves 14.6 (15.8)
OTHER COMPREHENSIVE (LOSS)/INCOME FOR THE PERIOD, NET OF TAX (20.1) 22.4
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 481.2 279.3
ATTRIBUTABLE TO:
Equity holders of the Group 467.9 272.2
Non-controlling interest 13.3 7.1
481.2 279.3
The total comprehensive income relating to discontinued operations is £24.7m
(2022: £25.7m).
The accompanying accounting policies and notes form part of these financial
statements.
CONSOLIDATED BALANCE
SHEET
Company number: 06035106
As at 30 April 2023
Note 30 April 2023 24 April 2022
(£'m) (£'m)
ASSETS - NON CURRENT
Property, plant and equipment 11 1,150.7 1,011.0
Investment properties 131.3 89.2
Intangible assets 12 24.1 120.6
Long-term financial assets 13 289.6 206.6
Investment in associate undertakings 16.9 -
Retirement benefit surplus 0.8 2.2
Deferred tax assets 82.1 100.8
1,695.5 1,530.4
ASSETS - CURRENT
Inventories 1,464.9 1,277.6
Trade and other receivables 720.1 841.4
Derivative financial assets 79.3 116.5
Cash and cash equivalents 332.9 336.8
2,597.2 2,572.3
Assets in disposal groups classified as held for sale - 40.0
TOTAL ASSETS 4,292.7 4,142.7
EQUITY
Share capital 64.1 64.1
Share premium 874.3 874.3
Treasury shares reserve (644.2) (488.9)
Permanent contribution to capital 0.1 0.1
Capital redemption reserve 8.0 8.0
Foreign currency translation reserve 47.4 35.6
Reverse combination reserve (987.3) (987.3)
Own share reserve (66.8) (66.8)
Hedging reserve 14.0 55.3
Share based payment reserve 33.1 14.1
Retained earnings 2,275.5 1,778.1
Issued capital and reserves attributable to owners of the parent 1,618.2 1,286.6
Non-controlling interests 40.0 22.0
TOTAL EQUITY 1,658.2 1,308.6
LIABILITIES - NON CURRENT
Lease liabilities 560.3 503.6
Borrowings 14 749.7 827.9
Retirement benefit obligations 1.7 1.6
Deferred tax liabilities 15.7 40.4
Provisions 15 290.2 433.0
1,617.6 1,806.5
LIABILITIES - CURRENT
Derivative financial liabilities 66.5 107.2
Trade and other payables 711.9 729.8
Lease liabilities 119.6 117.0
Provisions 16.3 -
Current tax liabilities 102.6 50.9
1,016.9 1,004.9
Liabilities in disposal groups classified as held for sale - 22.7
TOTAL LIABILITIES 2,634.5 2,834.1
TOTAL EQUITY AND LIABILITIES 4,292.7 4,142.7
The accompanying accounting policies and notes form part of these Financial
Statements. The Financial Statements were approved by the Board on 26 July
2023 and were signed on its behalf by:
Chris Wootton
Chief Financial Officer
CONSOLIDATED CASH FLOW STATEMENT
For the 53 weeks ended 30 April 2023
53 weeks ended 52 weeks ended
Note 30 April 2023 24 April 2022 (restated)
Profit before taxation 660.7 335.6
Net finance cost 23.0 18.9
Net investment income (108.0) (24.1)
Gain on disposal of subsidiaries/discontinued operations (43.9) -
Operating profit 531.8 330.4
Depreciation of property, plant and equipment 262.3 246.6
Depreciation of investment properties 10.2 5.9
Amortisation of intangible assets 6.9 7.5
Impairment of tangible assets, intangible assets and investment properties 239.7 232.7
Gain on modification/remeasurement of lease liabilities (26.8) (28.3)
Profit on disposal of property, plant and equipment (95.4) (10.8)
Fair value gain on recognition of associated undertaking (16.9) -
Gain on bargain purchase (56.1) (4.8)
Share-based payment charge in equity (excluding deferred tax) 19.0 9.2
Pension contributions less income statement charge 0.9 (1.6)
Operating cash inflow before changes in working capital 875.6 786.8
Decrease in receivables 95.8 79.6
Increase in inventories (71.6) (155.0)
(Decrease)/increase in payables (132.4) 7.5
(Decrease)/increase in provisions (132.5) 22.9
Cash inflows from operating activities 634.9 741.8
Income taxes paid (93.2) (121.0)
Net cash inflows from operating activities 541.7 620.8
Proceeds on disposal of property, plant and equipment and investment property 14.8 32.0
Proceeds from sale and leaseback transactions 185.6 9.5
Proceeds on disposal of listed investments ((1)) 172.4 238.4
Proceeds in relation to equity derivatives ((1)) 66.2 117.4
Disposal of subsidiary undertakings 46.5 1.0
Purchase of subsidiaries, net of cash acquired (28.0) (0.2)
Purchase of property, plant and equipment and investment property (469.4) (323.2)
Purchase of listed investments (243.3) (198.4)
Decrease/(increase) in deposits relating to equity derivatives ((2)) 53.8 (112.9)
Investment income received 3.0 1.0
Finance income received 20.1 6.3
Net cash outflows from investing activities (178.3) (229.1)
Lease payments (140.7) (176.2)
Finance costs paid (50.5) (32.8)
Borrowings drawn down 14 616.8 1,374.4
Borrowings repaid 14 (695.0) (1,484.4)
Proceeds from sale and leaseback transactions 54.5 1.5
Dividends paid to non-controlling interests (0.7) (1.3)
Purchase of own shares (155.3) (193.2)
Net cash outflows from financing activities (370.9) (512.0)
Net decrease in cash and cash equivalents including overdrafts (7.5) (120.3)
Exchange movement on cash balances 3.6 0.1
Cash and cash equivalents including overdrafts at beginning of period 336.8 457.0
Cash and cash equivalents including overdrafts at the period end 332.9 336.8
(1) Proceeds in relation to equity derivatives in both the current
and prior periods have been shown separately from proceeds on disposal of
listed investments. This has no impact on net cash outflows from investing
activities or net cash.
(2) Movements in deposits relating to equity derivatives have been
presented as a separate line item within net cash outflows from investing
activities in the current year. Following a reassessment, management have
concluded that this is a more appropriate presentation of movements in these
collateral deposits in line with IAS 7 Statement of Cash Flows. Prior year
information has been restated on an equivalent basis, resulting in a £112.9m
increase to net cash inflows from operating activities and an equal and
opposite increase to net cash outflows from investing activities. The
presentational adjustment does not have any impact on net decrease in cash and
cash equivalents, the balance sheet, the Group's profit, or earnings per share
in any of the periods presented.
The accompanying accounting policies and notes form part of these Financial
Statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the 53 weeks ended 30 April 2023
Share capital Share premium((1)) Treasury shares Share- based payment reserve Foreign currency translation reserve Own share reserve Retained earnings Other((2)) Total attributable to owners of parent Non-controlling interests Total
(£'m) (£'m) (£'m) (£'m) (£'m) (£'m) (£'m) (£'m) (£'m) (£'m) (£'m)
At 25 April 2021 64.1 874.3 (295.7) 1.3 28.8 (66.7) 1,554.5 (967.7) 1,192.9 18.1 1,211.0
Acquisitions - - - - - - 1.9 - 1.9 (1.9) -
Share-based payments - - - 12.8 - (0.1) 0.1 - 12.8 - 12.8
Purchase of own shares - - (193.2) - - - - - (193.2) - (193.2)
Dividends paid to non-controlling interests - - - - - - - - - (1.3) (1.3)
Transactions with owners in their capacity as owners - - (193.2) 12.8 - (0.1) 2.0 - (178.5) (3.2) (181.7)
Profit for the financial period - - - - - - 249.8 - 249.8 7.1 256.9
Other comprehensive income
Cashflow hedges - recognised in the period - - - - - - - 52.1 52.1 - 52.1
Cashflow hedges - reclassified and reported in inventory/cost of sales - - - - - - - 7.5 7.5 - 7.5
Cashflow hedges - taxation - - - - - - - (15.8) (15.8) - (15.8)
Fair value adjustment in respect of long-term financial assets - - - - - - (8.1) - (8.1) - (8.1)
Remeasurements of defined benefit pension scheme - - - - - - (26.8) - (26.8) - (26.8)
Deferred tax on remeasurements of defined benefit pension scheme - - - - - - 6.7 - 6.7 - 6.7
Exchange differences on translation of foreign operations - - - - 6.8 - - - 6.8 - 6.8
Total comprehensive income for the period - - - - 6.8 - 221.6 43.8 272.2 7.1 279.3
At 24 April 2022 64.1 874.3 (488.9) 14.1 35.6 (66.8) 1,778.1 (923.9) 1,286.6 22.0 1,308.6
Acquisitions - - - - - - - - - 4.0 4.0
Share-based payments - - - 19.0 - - - - 19.0 - 19.0
Purchase of own shares - - (155.3) - - - - - (155.3) - (155.3)
Dividends paid to non-controlling interests - - - - - - - - - 0.7 0.7
Transactions with owners in their capacity as owners - - (155.3) 19.0 - - - - (136.3) 4.7 (131.6)
Profit for the financial period - - - - - - 488.0 - 488.0 13.3 501.3
Other comprehensive income
Cashflow hedges - recognised in the period - - - - - - - 6.5 6.5 - 6.5
Cashflow hedges - recognised time value of options - - - - - - - 0.7 0.7 - 0.7
Cashflow hedges - reclassified and reported in sales - - - - - - - (24.6) (24.6) - (24.6)
Cashflow hedges - reclassified and reported in inventory/cost of sales - - - - - - - (38.5) (38.5) - (38.5)
Cashflow hedges - taxation - - - - - - - 14.6 14.6 - 14.6
Fair value adjustment in respect of long-term financial assets - - - - - - 9.9 - 9.9 - 9.9
Remeasurements of defined benefit pension scheme - - - - - - (0.5) - (0.5) - (0.5)
Foreign exchange impact of disposal of discontinued operations (1.6) (1.6) (1.6)
Exchange differences on translation of foreign operations 13.4 13.4 13.4
Total comprehensive income for the period - - - - 11.8 - 497.4 (41.3) 467.9 13.3 481.2
At 30 April 2023 64.1 874.3 (644.2) 33.1 47.4 (66.8) 2,275.5 (965.2) 1,618.2 40.0 1,658.2
(1) The share premium account is used to record the excess proceeds over
nominal value on the issue of shares.
(2) Other reserves comprise permanent contribution to capital, capital
redemption reserve, reverse combination reserve and the hedging reserve. All
movements in the period related to the hedging reserve.
The accompanying accounting policies and notes form part of these Financial
Statements.
1. ACCOUNTING POLICIES
Frasers Group Plc (Company number: 06035106) is a company incorporated and
domiciled in the United Kingdom, its shares are listed on the London Stock
Exchange. The registered office is Unit A, Brook Park East, Shirebrook, NG20
8RY. The principal activities and structure of the Group can be found in the
Directors' Report and the 'Our Business' section of the Annual Report.
BASIS OF PREPARATION
Whilst the financial information included in this Preliminary Announcement has
been prepared on the basis of UK-adopted International Accounting standards,
this announcement does not itself contain sufficient information to comply
with UK-adopted International Accounting Standards.
The financial information set out in this Preliminary Announcement does not
constitute the Group's Consolidated Financial Statements for the period ended
30 April 2023 but is derived from those Financial Statements which were
approved by the Board of Directors on 26July 2023. The auditor, RSM UK Audit
LLP, has reported on the Group's Consolidated Financial Statements and the
report was unqualified and did not contain a statement under section 498 (2)
or 498 (3) of the Companies Act 2006.
The statutory financial statements for the period ended 30 April 2023 have not
yet been delivered to the Registrar of Companies and will be delivered
following the Company's Annual General Meeting.
The Group financial statements have been prepared and approved by the
Directors in accordance with UK-adopted International Accounting Standards.
The Group's accounting policies are set out in the 2022 Annual Report and
Accounts and have been applied consistently in 2023.
Going Concern
The Group's business activities, together with the factors likely to affect
its future development, performance and position are set out in the Chief
Executive's Report and Business Review above.
The financial position of the Group, its cash flows, liquidity position and
borrowing facilities are described in the Financial Review. In addition, the
financial statements include the Group's objectives, policies and processes
for managing its capital, its financial risk management objectives, details of
its financial instruments and hedging activities, and its exposures to credit
risk and liquidity risk.
The Group is profitable, highly cash generative and has considerable financial
resources. The Group is able to operate within its banking facilities and
covenants, which run until November 2025 with a one year option to extend, and
is well placed to take advantage of strategic opportunities as they arise. As
a consequence, the Directors believe that the Group is well placed to manage
its business risks successfully despite the continued uncertain economic
outlook.
Management have assessed the level of trading and have forecast and projected
a conservative base case and also a number of even more conservative
scenarios, including taking into account the Group's open positions in
relation to strategic investment options. These forecasts and projections show
that the Group will be able to operate within the level of the current
facility and its covenant requirements (being interest cover and net debt to
EBITDA ratios). Management also has a number of mitigating actions which could
be taken if required such as selling strategic investments at a discount to
the market price if a significant share price fall occurred, reducing capital
expenditure, putting on hold discretionary spend, liquidating certain assets
on the Balance Sheet and paying down the Group Financing Facility. See the
Viability Statement for further details.
Having thoroughly reviewed the performance of the Group and Parent Company and
having made suitable enquiries, the Directors are confident that the Group and
Parent Company have adequate resources to remain in operational existence for
the foreseeable future which is at least 12 months from the date of these
financial statements. Trading would need to fall significantly below levels
observed during the COVID-19 pandemic to require mitigating actions or a
relaxation of covenants. On this basis, the Directors continue to adopt the
going concern basis for the preparation of the Annual Report and financial
statements which is a period of at least 12 months from the date of approval
of these financial statements.
New Accounting Standards, Interpretations and Amendments Adopted By The Group
The Group has not early adopted any new accounting standard, interpretation or
amendment that has been issued but is not effective. The Group has applied for
the first time the following new standards:
· Annual Improvements to IFRS Standards 2018-2020 Cycle -
amendments to IAS 1, IFRS 9 and IFRS 16
· Amendments to IFRS 3 - Reference to the Conceptual Framework
· Amendments to IAS 16 - Property, Plant and Equipment: Proceeds
before intended use
· Amendment to IAS 37 - Onerous Contracts: Cost of Fulfilling a
Contract
· Interest Rate Benchmark Reform - Phase 2 - amendments to IFRS 9,
IAS 39, IFRS 7, IFRS 4 and IFRS 16.
By adopting the above, there has been no material impact on the Financial
Statements.
International Financial Reporting Standards ("Standards") In Issue But Not Yet
Effective
At the date of authorisation of these consolidated Financial Statements, there
are no standards in issue from the International Accounting Standards Board
("IASB") or International Financial Reporting Interpretations Committee
("IFRIC") which are effective for annual accounting periods beginning on or
after 30 April 2023 that will have a material impact on these Financial
Statements.
CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES
Climate Change
We have considered the potential impact of climate change in preparing these
financial statements. Tackling climate change is a global imperative.
Measures which support climate change initiatives and our wider ESG agenda
continue to be key components of our strategic direction, supporting
sustainability, the broader social agenda and consumer choice. The risks
associated with climate change have been deemed to be arising in the medium to
long term, however we are working to mitigate these risks as detailed within
the TCFD section of this annual report.
We have considered climate change as part of our cash flow projections within
going concern, impairment assessments and viability, and the impact of climate
change is not deemed to have a significant impact on these assessments
currently and therefore they are not deemed to be a key source of estimation
uncertainty. The Group will continue to monitor the impacts of climate change
over the coming years.
The critical accounting estimates and judgements made by the Group regarding
the future or other key sources of estimation, uncertainty and judgement that
may have a significant risk of giving rise to a material adjustment to the
carrying values of assets and liabilities within the next financial period
are:
Critical Accounting Judgements
Determining Related Party Relationships
Management determines whether a related party relationship exists by assessing
the nature of the relationship by reference to the requirements of IAS 24,
Related Party Disclosures. This is in order to determine whether significant
influence exists as a result of control, shared directors or parent companies,
or close family relationships. The level at which one party may be expected to
influence the other is also considered for transactions involving close family
relationships.
Control and Significant Influence Over Certain Entities
Under IAS 28 Investments in Associates and Joint Ventures if an entity holds
20% or more of the voting power of the investee, it is presumed that the
entity has significant influence, unless it can clearly demonstrate that this
is not the case.
In assessing the level of control that management have over certain entities,
management will consider the various aspects that allow management to
influence decision making. This includes the level of share ownership, board
membership, the level of investment and funding and the ability of the Group
to influence operational and strategic decisions and effect its returns
through the exercise of such influence. If management were to consider that
the Group does have significant influence over these entities then the equity
method of accounting would be used and the percentage shareholding multiplied
by the results of the investee in the period would be recognised in profit or
loss.
Mulberry Group Plc
During the period the Group has held greater than 20% of the voting rights of
Mulberry Group Plc. Management consider that the Group does not have
significant influence over this entity for combinations of the following
reasons:
• The Group does not have any representation on the board of
directors of the investee.
• There is no participation in decision making and strategic
processes, including participation in decisions about dividends or other
distributions.
• There have been no material transactions between the entity
and the investee company.
• There has been no interchange of managerial personnel.
• No non-public essential technical management information is
provided to the investee.
Four (Holdings) Limited
The Group holds 49% of the share capital of Four (Holdings) Limited which is
accounted for as an associate using the equity method. The Group does not have
any representation on the board of directors and no participation in decision
making about relevant activities such as establishing operating and capital
decisions, including budgets, appointing or remunerating key management
personnel or service providers and terminating their services or employment.
However, in prior periods the Group has provided Four (Holdings) Limited with
a significant loan. At the reporting date, the amount owed by Four (Holdings)
Limited for this loan totalled £60m (£26.8m net of amounts recognised in
respect of loss allowance). The Group is satisfied that the existence of these
transactions provides evidence that the entity has significant influence over
the investee but in the absence of any other rights, in isolation it is
insufficient to meet the control criteria of IFRS 10, as the Group does not
have power over Four (Holdings) Limited.
Tymit Limited
The Group holds 25% of the share Capital of Tymit Limited. This holding is
accounted for as an associate under IAS 28, although the carrying value of the
investment is £nil as a result of management's assessment of future trading
prospects of the business. Management has advanced Tymit convertible loans of
£7.2m at 30 April 2023, which have been fully provided for, and is committed
to loaning a further £3.6m post-year end. Management has considered whether
any of the rights attaching to the loan notes could give rise to control and
concluded that this was not the case.
Kangol LLC
During the current period, the Group sold 51% of its shareholding in Kangol
LLC to Bollman Hat Company for £17.6m, retaining a 49% stake. Management
considered the criteria set out in IFRS 10 when assessing whether or not it
retains control of the entity or significant influence as defined by IAS 28.
It was concluded that the Group has significant influence by virtue of its
holding more than 20% of the voting power of the investee, but not control
since Bollman holds 51% of total voting rights. Consequently, the Group's 49%
shareholding has been accounted for as an associate under IAS 28.
Cash Flow Hedging
The Group uses a range of forward and option contracts that are entered into
at the same time, they are in contemplation with one another and have the same
counterparty. A judgement is made in determining whether there is an economic
need or substantive business purpose for structuring the transactions
separately that could not also have been accomplished in a single transaction.
Management are of the view that there is a substantive distinct business
purpose for entering into the options and a strategy for managing the options
independently of the forward contracts. The forward and options contracts are
therefore not viewed as one instrument accordingly hedge accounting for the
forwards is permitted.
Under IFRS 9 in order to achieve cash flow hedge accounting, forecast
transactions (primarily Euro denominated sales and USD denominated purchases)
must be considered to be highly probable. The hedge must be expected to be
highly effective in achieving offsetting changes in cash flows attributable to
the hedged risk. The forecast transaction that is the subject of the hedge
must be highly probable and must present an exposure to variations in cash
flows that could ultimately affect profit or loss. Management have reviewed
the detailed forecasts and the growth assumptions within them and are
satisfied that forecasts on which the cash flow hedge accounting has been
based meet the criteria per IFRS 9 as being highly probable forecast
transactions. Should the forecast levels not pass the highly probable test,
any cumulative fair value gains and losses in relation to either the entire or
the ineffective portion of the hedged instrument would be recognised in the
Consolidated Income Statement.
Management considers various factors when determining whether a forecast
transaction is highly probable. These factors include detailed sales and
purchase forecasts by channel, geographical area and seasonality, conditions
in target markets and the impact of expansion in new areas. Management also
consider any change in alternative customer sales channels that could impact
on the hedged transaction.
If the forecast transactions were determined to be not highly probable and all
hedge accounting was discontinued, amounts in the Hedging reserve of up to
£14.0m (FY22: £55.3m) would be shown in Finance Income.
Adjustment to Regulatory Provisions in Studio
As a regulated business, Frasers Group Financial Services Limited (formerly
Studio Retail Limited) has an obligation to proactively review its business to
ensure that appropriate outcomes were delivered to customers. At 24 April
2022, a provision of £41.6m was recognised in respect of the probable costs
of remediating customers who may have been adversely impacted by legacy
decisions. Since the approval of the prior year's consolidated financial
statements, the receipt of new information, which was not available at the
point the prior year financial statements were approved, has enabled
management to refine the relevant customer cohorts who were potentially
impacted by these legacy decisions and complete detailed analysis of the
financial implications. This has enabled a revision to management's best
estimate of the likely costs of remediation and has resulted in a reduction in
the amount provided of approximately £25m. The remaining provision is
expected to be utilised within 12 months of the balance sheet date.
Management considered whether or not the reduction in provision should result
in an adjustment to the amounts recognised in the acquisition balance sheet in
accordance with the requirements of IFRS 3.45 and IFRS3.47 and concluded that
the release should be treated as a prospective change in accounting estimate
under IAS8.34 since it arose as a result of new information which has come to
light since the acquisition date. It is the Group's policy to present items
that "merit separate presentation" by reference to their "their size, nature
and infrequency of the events giving rise to them" as exceptional items. Given
the unusual size, nature and infrequency of movements in provisions of this
nature, management has disclosed the income statement impact within
exceptional items in the consolidated income statement.
Sale and Leaseback transactions
During the current period, the Group disposed of a number of freehold
properties by means of the sale of shares in the limited companies that owned
the relevant properties but accounted for these as sale and leaseback
transactions under IFRS 16 Leases ("IFRS 16"). Management exercised judgment
in determining whether or not these sales should be treated as a loss of
control of subsidiaries under IFRS 10 Consolidated Financial Statements or
sale and leaseback transactions as defined by IFRS 16, paying due
consideration to the IFRS Interpretations Committee's tentative agenda
decision on this topic from September 2020.
Key Estimates
Inventory provisioning
The Group carries significant amounts of inventory, against which there are
provisions for expected losses to be incurred in the sale of slow moving,
obsolete and delisted products. At 30 April 2023 a provision of £220.6m
(2022: £236.7m) was held against a gross inventory value of £1,685.5m (2022:
£1,514.3m).
In the current year, management has changed the methodology applied in
calculating an appropriate level of inventory provision owing to changes in
the mix of the Group's inventory holding, driven in large part by the growth
of the Premium Lifestyle segment and various acquisitions.
In assessing the level of provision required, management has applied its
experience and industry knowledge to divide the core UK inventory holding into
separate categories based on internal management classifications and
behavioural characteristics, taking account of experience by fascia, as
follows:
· Continuity inventory - inventory that is considered to be
perennial and therefore exhibits limited risk of obsolescence.
· Current season inventory - inventory that has been purchased
specifically for seasons in the current calendar year.
· Out of season inventory (including inventory previously
classified as continuity) - inventory that has moved out of the two categories
above because of its age, range development or because it is being sold at
below cost to clear warehouse/store space.
An adjusted rate of loss is then calculated based on losses incurred on the
sale of out of season inventory over the past three years (being management's
assessment of the time taken to clear through out of season inventory), with
any inventory remaining on hand after three years of being classified as out
of season being assumed to require a 100% provision rate. The historical rate
is sensitised to reflect management's best estimate of future performance by
making assumptions around changes to sales prices achieved on the sale of out
of season inventory vs. those achieved in the past three years and the level
of inventory remaining after three years of being classified as out of season.
In the current period, management have estimated that selling prices will need
to reduce by a further 10% to clear an equivalent volume of out of season
inventory and that approximately twelve times as much Premium Lifestyle out of
season inventory will remain on hand at the end of the three-year period of
assessment than has typically been the case historically, requiring a 100%
provision rate, reflecting the different profile of this inventory to Sports
inventory.
In addition, management has applied a provision rate of 100% against a portion
of the inventory holding that is either currently being sold at a loss or
exhibits an unusually high level of obsolescence risk. The 100% provision rate
reflects the costs associated with clearing and disposing of this inventory.
The adjusted rate of loss is applied to the gross value of inventory in each
of the categories above as follows:
· Continuity inventory - the adjusted loss rate is applied to 30%
of the gross holding (representing the proportion of inventory in this
category that is expected to roll into the out of season category based on
historical experience).
· Current season inventory - the adjusted loss rate is applied to
30% of the gross holding (representing the proportion of inventory in this
category that is expected to roll into the out of season category based on
historical experience).
· Out of season inventory (including inventory previously
classified as continuity) - the adjusted loss rate is applied to this
population, excluding those specific items that carry at 100% provision rate
based on the analysis detailed above.
The provisioning calculations require a high degree of judgement, given the
significant level of estimation uncertainty, in the classification of
inventory lines and the roll rates between classifications, as well as the use
of estimates around future sales prices and the remaining inventory holding
for out of season inventory. Sensitivity analysis relating to these key
assumptions is set out below.
% of inventory rolling into out of season (including inventory previously
classified as continuity) category
Base assumption 30%
Sensitised assumption 35%/25%
Increase/(decrease) to provision £7.2m/(£7.2m)
Decrease in sales prices on out of season inventory
Base assumption -10%
Sensitised assumption -5%/-15%
(Decrease)/Increase to provision (£5.7m)/£7.0m
Increase in out of season Premium Lifestyle inventory on hand after
three-years
Base assumption 12 times historical rate
Sensitised assumption 10 times historical rate/14 times historical rate
(Decrease)/increase to provision (£7.0m)/£6.4m
These sensitivities reflect management's assessment of reasonably possible
changes to key assumptions which could result in adjustments to the level of
provision within the next financial year.
Property Related Provisions - note 15
Property related estimates and judgements are continually evaluated and are
based on historical experience, external advice and other factors, including
expectations of future events that are believed to be reasonable under the
circumstances.
Dilapidations - note 15
The Group provides for its legal responsibility for dilapidation costs
following advice from chartered surveyors and previous experience of exit
costs (including strip out costs and professional fees). Management use a
reference estimate of £100,000 (FY22 £100,000) for large leasehold stores,
£50,000 (FY22: £50,000) for smaller leasehold stores (£25,000 per store for
Game UK and Game Spain stores) and $/€50,000 (FY22: $/€50,000) for non-UK
stores. Management do not consider these costs to be capital in nature and
therefore dilapidations are not capitalised, except for in relation to the
sale and leaseback of Shirebrook for which a material dilapidations provision
was capitalised in FY20. The annual movement in the dilapidations provisions
is considered to be immaterial.
A 10% increase in dilapidation cost per store would result in an approx.
£9.0m (FY22: £8.5m) reduction in profit before tax.
Legal and regulatory provisions - note 15
Provisions are made for items where the Group has identified a present legal
or constructive obligation arising as a result of a past event, it is probable
that an outflow of resources will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation.
Legal and regulatory provisions reflect management's best estimate of the
potential costs arising from the settlement of outstanding disputes of a
commercial and regulatory nature. A substantial portion of the amounts
provided relates to ongoing legal claims and non-UK tax enquiries. Further
details can be found in note 15. Management have made a judgement to consider
all claims collectively given their similar nature. In accordance with
IAS37.92, management have concluded that it would prejudice seriously the
position of the entity to provide further specific disclosures in respect of
amounts provided for non-UK tax enquiries and legal claims.
Other Receivables and Amounts Owed By Related Parties
Other receivables and amounts owed by related parties are stated net of
provision for any impairment. Management have applied estimates in assessing
the recoverability of working capital and loan advances made to investee
companies. Matters considered include the relevant financial strength of the
underlying investee company to repay the loans, the repayment period and
underlying terms of the monies advanced, forecast performance of the
underlying borrower, and where relevant, the Group's intentions for the
companies to which monies have been advanced. Management have applied a
weighted probability to certain potential repayment scenarios, with the
strongest weighting given to expected default after two years.
Impairment of Assets
a) IFRS 16 right-of-use assets and associated plant and equipment
IFRS 16 defines the lease term as the non-cancellable period of a lease
together with the options to extend or terminate a lease, if the lessee were
reasonably certain to exercise that option. The Group will assess the
likelihood of extending lease contracts beyond the break date by taking into
account current economic and market conditions, current trading performance,
forecast profitability and the level of capital investment in the property.
IFRS 16 states that the lease payments shall be discounted using the lessee's
incremental borrowing rate where the rate implicit in the lease cannot be
readily determined. Accordingly, all lease payments have been discounted using
the incremental borrowing rate (IBR). The IBR has been determined by using a
synthetic credit rating for the Group which is used to obtain market data on
debt instruments for companies with the same credit rating, this is split by
currency to represent each of the geographical areas the Group operates within
and adjusted for the lease term.
The weighted average discount rates based on incremental borrowing rates used
throughout the period across the Group's lease portfolio are shown below. The
discount rate for each lease is dependent on lease start date, term and
location.
Lease Term FY23 UK Europe Rest of World
Up to 5 years 1.4% - 5.1% 0.3% - 4% 1.5% - 5.3%
Greater than 5 years and up to 10 years 2.0% - 5.7% 0.5% - 4% 1.5% - 5.3%
Greater than 10 years and up to 20 years 2.2% - 5.7% 0.8% - 4% 1.5% - 5.4%
Greater than 20 years 2.5% - 5.9% 1.1% - 4% 1.5% - 5.6%
Lease Term FY22 UK Europe Rest of World
Up to 5 years 1.4% - 2.6% 0.8% - 1.0% 1.5% - 2.9%
Greater than 5 years and up to 10 years 2.2% - 3.2% 1.2% - 1.9% 2.4% - 4.1%
Greater than 10 years and up to 20 years 2.5% - 3.4% 1.4% - 2.2% 2.9% - 4.3%
Greater than 20 years 2.8% - 3.5% 1.7% - 2.5% 3.5% - 4.6%
The right of use assets are assessed for impairment at each reporting period
in line with IAS 36 to review whether the carrying amount exceeds its
recoverable amount. For impairment testing purposes the Group has determined
that each store is a separate CGU. The recoverable amount is calculated based
on the Group's latest forecast cash flows which are then extrapolated to cover
the period to the break date of the lease taking into account historic
performance and knowledge of the current market, together with the Group's
views on future profitability of each CGU. The key assumptions in the
calculations are the sales growth rates, gross margin rates, changes in the
operating cost base and the pre-tax discount rate derived from the Group's
weighted average cost of capital using the capital asset pricing model, the
inputs of which include a risk-free rate, equity risk premium and a risk
adjustment (Beta). Given the number of assumptions used, the assessment
involves significant estimation uncertainty.
Impairments in the period have been recognised for the amount of £66.1m
(FY22: £115.9m) due to the impact of ongoing challenges in the retail sector
on the forecast cash flows of the CGUs, including the ongoing cost of living
squeeze on customers. This is broken down as follows:
• £43.1m (FY22: £76.8m) against right-of-use assets; and
• £23.0m (FY22: £39.1m) against plant and equipment.
The key assumptions, which are equally applicable to each CGU, in the cash
flow projections used to support the carrying amount of the right of use asset
are consistent with the cashflow projections for the freehold land and
buildings impairment assessment.
In line with IAS 36 Impairment of Assets, management have considered whether
any amounts should be recognised for the reversal of prior period impairment
losses with £nil (FY22: £nil) being recognised in the period. Further detail
is given below.
A sensitivity analysis has been performed in respect of sales, margin, the new
store exemption and operating costs as these are considered to be the most
sensitive of the key assumptions:
Forecast: Impact of change in assumption: Impairment increase / (decrease) (£'m)
Sales decline year 1 10% improvement to 5% (19.8)
Sales decline year 1 10% reduction to 15% 24.9
Existing gross margin year 1 > 40% 100bps - improvement (3.7)
Existing gross margin year 1 > 40% 100bps - reduction 3.8
New store exemption ((1)) Change from 1 to 2 years (41.5)
Operating costs increase year 1 Change from 3% to 6% 4.5
(1) Stores which have been open for less than one year are not
reviewed for impairment.
b) Freehold land and buildings, long-term leasehold, investment
property and associated plant and equipment
Freehold land and buildings and long-term leasehold assets are assessed at
each reporting period for as to whether there is any indication of impairment
in line with IAS 36.
An asset is impaired when the carrying amount exceeds its recoverable amount.
IAS 36 defines recoverable amount as the higher of an asset's or
cash-generating unit's fair value less costs of disposal and its value in use,
the Group has determined that each store is a separate CGU.
Impairments in the period have been recognised in the amount of £33.5m (FY22:
£111.1m) due to the ongoing challenges in the retail sector on the forecast
cash flows of the CGU. This is broken down as follows:
• £24.1m against freehold land and buildings, including £0.2m
in relation to long leasehold properties;
• £9.2m plant and equipment; and
• £0.2m investment property.
In line with IAS 36 Impairment of Assets, management have considered whether
any amounts should be recognised for the reversal of prior period impairment
losses with £nil (FY22: £nil) being recognised in the period. Further
explanation is given below.
Value In Use (VIU)
The value in use is calculated based on five year cash flow projections. These
are formulated by using the Group's forecast cash flows for each individual
CGU, taking into account historic performance of the CGU, and then adjusting
for the Group's current views on future profitability for each CGU. The key
assumptions in the calculations are the sales growth rates, gross margin
rates, changes in the operating cost base and the pre-tax discount rate
derived from the Group's weighted average cost of capital using the capital
asset pricing model, the inputs of which include a risk-free rate, equity risk
premium and a risk adjustment (Beta). Given the number of assumptions used,
the assessment involves significant estimation uncertainty.
The key assumptions, which are equally applicable to each CGU, in the cash
flow projections used to support the carrying amount of the freehold land and
buildings were as follows:
Key assumptions FY23 Year 1 Year 2 Year 3 Year 4 Year 5
Sales decline -5% -4% -3% -2% -2%
Existing gross margin > 40% -175bps -150bps -125bps -100bps -75bps
Operating costs increase per annum 3% 3% 3% 3% 3%
Discount rate 8.5% 8.5% 8.5% 8.5% 8.5%
Terminal growth rate of 2%
Key assumptions FY22 Year 1 Year 2 Year 3 Year 4 Year 5
Sales decline -10% -5% -4% -3% -2%
Existing gross margin > 40% -200bps -175bps -150bps -125bps -100bps
Operating costs increase per annum 6% 3% 3% 3% 3%
Discount rate 7.5% 7.5% 7.5% 7.5% 7.5%
Terminal growth rate of 2%
A sensitivity analysis has been performed in respect of sales, margin and
operating costs as these are considered to be the most sensitive of the key
assumptions.
Forecast: Impact of: Impairment increase / (decrease) (£'m)
Sales year 1 10% improvement to 5% (5.0)
Sales year 1 10% reduction to 15% 6.4
Existing gross margin year 1 > 40% 100bps - improvement (0.7)
Existing gross margin year 1 > 40% 100bps - reduction 1.6
Operating costs increase year 1 Change from 3% to 6% 1.8
Fair value less costs of disposal
For those CGUs where the value in use is less than the carrying value of the
asset, the fair value less costs of disposal has been determined using both
external and internal market valuations. This fair value is deemed to fall
into Level 3 of the fair value hierarchy as per IFRS 13. The property
portfolio consists of vacant, Frasers Group occupied and third party tenanted
units, one property can include all three types. The following valuation
methodology has been adopted for each:
Scenario Valuation methodology Key assumptions
Vacant units Estimated Rental Value (ERV) and suitable reversionary yield applied to Void period and rent free band - two bands applied depending on circumstances:
reflect the market to generate a net capital value. A deduction to the capital
value generated is then made based on the void period with applicable rates
payable for the unit and rent-free incentive.
• 1 year void, 2 years rent free; or
• 2 years void, 3 years rent free.
Yield bands - ranging from 5.5% - 14.0%
Frasers Group occupied Will be assumed the unit is vacant given there is no legally binding Void period and rent free band - two bands applied depending on circumstances:
inter-company agreement in place. Therefore, a void and rent free incentive
period assumed, the cost amount then deducted from the capital value generated
by the ERV and reversionary yield. Although we consider the commercial reality
is that fair value less costs to sell will be higher than vacant possession
this very conservative assumption is in line with both technical accounting
rules and that of our management experts.
• 1 year void, 2 years rent free; or
• 2 years void, 3 years rent free.
Yield bands - ranging from 5.5% - 14.0%
Third party tenanted An ERV is applied using a percentage band on the passing rent. An appropriate ERV is applied reflecting the market for the applicable unit. An appropriate
reversionary yield is applied reflecting the risk of tenant and renewal to reversionary yield is applied reflecting the risk of tenant and renewal to
generate a capital value. This will also provide a net initial yield based off generate a capital value. This will also provide a net initial yield based off
the current passing rent. the current passing rent.
A 10% increase in the market valuation amounts used in the impairment
calculations would result in a decrease in impairment of £3.4m (FY22:
£5.0m).
The total recoverable amount of the assets that were impaired at the period
end was £72.2m (FY22: £105.9m), with £60.5m (FY22: £47.3m) of this being
based on their fair value less costs of disposal and £11.7m (FY22: £58.6m)
being based on their value in use.
Impairment reversals
In accordance with IAS 36.110 management has assessed whether there is any
indication that an impairment loss recognised in prior periods for an asset
other than goodwill may no longer exist or may have decreased. Key triggers
considered by management include store (i.e., CGU) EBITDA showing a material
year-on-year improvement, significant changes in property valuations, and
whether any new, wider economic factors may impact the forecast performance.
Based on the criteria set by management, an impairment reversal of
approximately £11.0m was considered. However, management concluded that in
light of the challenging economic outlook and the unprecedented level of
uncertainty in the retail market, it would not be appropriate to record a
reversal at this stage, only to "re-impair" at a later date.
Credit Customer Receivables
The Group's credit customer receivables are recognised on balance sheet at
amortised cost (i.e., net of provision for expected credit loss). At 30 April
2023, trade receivables with a gross value of £326.0m were recorded on the
balance sheet, less a provision for impairment of £100.1m.
Fair value considerations
Management has concluded that the fair value of trade receivables acquired as
part of the Studio Retail Limited acquisition in FY22 broadly equated to their
book value and therefore that the difference on a go-forward basis will not be
material given that the nature of the loan product offered (a revolving credit
account) means that the portfolio has a relatively short life (i.e. loans with
customers are repaid and replaced with fresh loans under the revolving
account). As a result of this, management has concluded that it is appropriate
to recognise the trade receivables portfolio at the gross book value less
associated expected credit losses at acquisition, and to apply the accounting
policies for expected credit loss that were in place at the point of the
acquisition in the Studio business on a go-forward basis.
Expected credit loss
An appropriate allowance for expected credit loss in respect of trade
receivables is derived from estimates and underlying assumptions such as the
Probability of Default and the Loss Given Default, taking into consideration
forward looking macro-economic assumptions. The assessment involves
significant estimation uncertainty. Changes in the assumptions applied such as
the value and frequency of future debt sales in calculating the Loss Given
Default, and the estimation of customer repayments and Probability of Default
rates, as well as the weighting of the macro-economic scenarios applied to the
impairment model could have a significant impact on the carrying value of
trade receivables. These assumptions are continually assessed for relevance
and adjusted appropriately. Revisions to estimates are recognised
prospectively.
Macroeconomic scenarios
The principial macroeconomic driver factored into the impairment model is
unemployment. The latest economic scenarios used in the model along with the
probably weighting applied to each are summarised as follows:
Scenario Qualitative explanation Probability weighting applied
Upside Inflation recedes leading to cuts in interest rates to 3.25% by end-2024. 0%
Unemployment falls to 3.5% whilst wage growth remains strong and supportive of
high growth.
Baseline Unemployment rate peaks at approximately 4.5% and remains at this level for 50%
most of 2024. Inflation begins to fall by mid-2024.
Downside Interest rates continue to rise and unemployment peaks at 6.5% in mid-2024 30%
Stress Inflation continues to rise leading to sharp increases in interest rates. 20%
Unemployment peaks at 8% in 2024.
Post model adjustment
As noted in the prior year, the impairment model was not designed to take into
account changes to customer payment and default performance arising as a
result of the current cost of living crisis where levels of price inflation
greatly exceed income growth, as the existing model uses unemployment rates as
the principal determinant in considering forward looking macro-economic
assumptions.
It is our expectation that Studio's customer base has seen and will continue
to see a significant reduction in real earnings as a result of the current
cost of living crisis and, whilst the adverse impact payment and arrears
performance has been less severe than anticipated to date, it will continue to
be felt in future. Judgement has therefore been exercised in applying a post
model adjustment of £6.6m (April 2022: £40.0m) to the output of the
impairment model in arriving at the provision. This reflects management's best
estimate based on the information available to them at the current time.
Valuation of assets acquired in business combinations
During the current period, the Group has recognised net assets acquired in
business combinations with a fair value of £121.2m including goodwill of
£35.6m and a gain on bargain purchase of £56.1m. Management make use of
estimates when calculating the fair value of assets and liabilities acquired
in business combinations and make use of both internal and external
information in doing so.
In the current year, on the acquisition of JD premium brands, the principal
estimate was around the fair value of inventory acquired. The fair value of
inventory, which primarily includes finished goods was estimated at £73.4m, a
reduction of £6.9m on the carrying value prior to the acquisition. The fair
value adjustment relates only to finished goods and was calculated as the
estimated selling price less costs to complete and sell the inventory,
associated margins on these activities and holding costs. The fair value
adjustment is expected to amortise over approximately the first 12 months post
acquisition, in line with revenues.
Management also notes that a gain on bargain purchase arose on the acquisition
of JD premium brands. In light of this, management has considered the fair
values attributed to the acquired assets and liabilities and concluded that
they are appropriate. If the fair value of assets and liabilities recognised
were to increase/decrease by £5m, there would be a corresponding
increase/decrease to the gain on bargain purchase by an equivalent amount.
2. SEGMENTAL ANALYSIS
Management has determined to present its segmental disclosures consistently
with the presentation in the 2022 Annual Report with the exception of merging
the European Retail and Rest of World Retail segments into a new International
Retail segment. The prior period numbers have been re-categorised for this
change.
Management considers operationally that the UK Retail divisions (UK Sports
Retail and Premium Lifestyle) are currently run as one business unit in terms
of allocating resources, inventory management and assessing performance. Under
IFRS 8 we have not as at 30 April 2023 met the required criteria with enough
certainty to aggregate these operating segments. We will continually keep this
under review at subsequent reporting dates. European and other international
countries have been identified as operating segments and have been aggregated
into a single operating segment as permitted under IFRS 8. The decision to
aggregate these segments was based on the fact that they each have similar
market characteristics, similar long-term financial performance expectations,
and are similar in each of the following respects:
• The nature of the products;
• The type or class of customer for the products; and
• The methods used to distribute the products.
In accordance with paragraph 12 of IFRS 8 the Group's operating segments have
been aggregated into the following reportable segments:
1) UK Retail:
i) UK Sports Retail - includes core sports retail store operations
in the UK, plus all the Group's sports retail online business (excluding Bob's
Stores & Eastern Mountain Sports which were disposed of during the period,
Malaysia and Baltics), the gyms, the Group's Shirebrook campus operations,
freehold property owning companies excluding Premium Lifestyle fascia
properties, GAME UK stores and online operations, Frasers Group Financial
Services Limited, and retail store operations in Northern Ireland.
ii) Premium Lifestyle - includes the results of the premium and luxury
retail businesses FLANNELS, Cruise, Van Mildert, Jack Wills, House of Fraser
and Sofa.com along with the related websites, the Missguided and I Saw it
First websites, and freehold property owning companies where trading is purely
from Premium Lifestyle fascias.
2) International Retail - includes all of the Group's sports retail
stores, management and operating in Europe and Asia, including the Group's
European Distribution Centres in Belgium and Austria, European freehold
property owning companies, GAME Spain stores, and Baltics & Asia
e-commerce offerings. The MySale acquisition will be reported in this segment.
International Retail also includes the results of the US based retail
activities until the disposal in May 2022.
3) Wholesale & Licensing - includes the results of the Group's
portfolio of internationally recognised brands such as Everlast, Karrimor, and
Slazenger.
Planned changes to segmental reporting
The Group currently intends to revise its segmental reporting based on planned
changes in how the Group will report performance and allocate resources going
forwards. Following the acquisition of Frasers Group Financial Services
Limited (formerly known as Studio Retail Limited) and the launch of the
Group's consumer credit offering, Frasers Plus, as well as recent acquisitions
of larger properties, it is expected to lead to the Group's financial services
and property businesses being disclosed as separate reporting segments. The
Group also currently intends to consolidate UK Sports Retail and Premium
Lifestyle into one UK Retail segment. The underlying businesses within the
Wholesale & Licensing segment will be consolidated into the appropriate
retail segments. Since these changes have taken place post year-end, it is
intended that the revised segmental presentation will take effect from FY24
onwards.
Segmental information for the 53 weeks ended 30 April 2023:
UK Sports Premium Lifestyle UK Retail Total International Retail Total Retail Wholesale & Licensing Eliminations Group Total
(£'m) (£'m) (£'m) (£'m) (£'m) (£'m) (£'m) (£'m)
Sales to external customers 3,080.6 1,212.9 4,293.5 1,083.4 5,376.9 188.3 - 5,565.2
Sales to other segments - - - - - 69.9 (69.9) -
Revenue 3,080.6 1,212.9 4,293.5 1,083.4 5,376.9 258.2 (69.9) 5,565.2
Gross profit 1,381.7 471.8 1,853.5 438.8 2,292.3 77.5 - 2,369.8
Operating profit before foreign exchange, exceptional items, property and 341.0 50.1 391.1 69.4 460.5 (52.8) - 407.7
other related impairments, profit on sale of properties and gain on sale of
subsidiaries/discontinued operations
Foreign exchange realised 35.8 0.1 35.9 (6.5) 29.4 1.8 - 31.2
Property and other related impairments (26.6) (47.9) (74.5) (25.1) (99.6) - - (99.6)
Profit/(loss) on sale of properties 84.0 (1.4) 82.6 12.8 95.4 - - 95.4
Exceptional items 25.0 55.2 80.2 - 80.2 16.9 - 97.1
Operating profit 459.2 56.1 515.3 50.6 565.9 (34.1) - 531.8
Gain on sale of subsidiaries/discontinued operations 17.6 - 17.6 26.3 43.9 - - 43.9
Investment income 112.4 - 112.4 0.2 112.6 - - 112.6
Investment costs (4.6) - (4.6) - (4.6) - - (4.6)
Finance income 41.1 0.9 42.0 4.1 46.1 - - 46.1
Finance costs (58.9) (1.8) (60.7) (8.3) (69.0) (0.1) - (69.1)
Profit before taxation 566.8 55.2 622.0 72.9 694.9 (34.2) - 660.7
Taxation (159.4)
Profit for the period 501.3
Sales to external customers in Frasers Group Financial Services Limited
includes credit account interest of £115.4m, and gross profit includes
impairment losses on credit customer receivables of £15.5m, both of which are
recognised in the UK Sports segment.
Other segmental items included in the income statement for the 53 weeks ended
30 April 2023:
UK Sports Premium Lifestyle UK Retail Total International Retail Total Retail Wholesale & Licensing Group Total
(£'m) (£'m) (£'m) (£'m) (£'m) (£'m) (£'m)
Property, plant & equipment depreciation 132.3 41.4 173.7 11.8 185.5 1.6 187.1
Property, plant & equipment impairment 20.2 28.7 48.9 7.4 56.3 - 56.3
IFRS 16 ROU depreciation 37.3 6.4 43.7 31.5 75.2 - 75.2
IFRS 16 ROU impairment 6.2 19.2 25.4 17.7 43.1 - 43.1
Investment property depreciation 10.2 - 10.2 - 10.2 - 10.2
Investment property impairment 0.2 - 0.2 - 0.2 - 0.2
IFRS 16 disposal and modification/remeasurement of lease liabilities 17.6 0.8 18.4 8.2 26.6 0.2 26.8
Intangible amortisation - - - 0.4 0.4 6.5 6.9
Intangible impairment 4.9 20.5 25.4 26.8 52.2 87.9 140.1
Segmental information for the 52 weeks ended 24 April 2022((1))
UK Sports Premium Lifestyle UK Retail Total International Retail Total Retail Wholesale & Licensing Eliminations Group Total
(£'m) (£'m) (£'m) (£'m) (£'m) (£'m) (£'m) (£'m)
Sales to external customers 2,640.1 1,056.6 3,696.7 940.5 4,637.2 168.1 - 4,805.3
Sales to other segments - - - - - 80.1 (80.1) -
Revenue 2,640.1 1,056.6 3,696.7 940.5 4,637.2 248.2 (80.1) 4,805.3
Gross profit 1,136.8 474.8 1,611.6 414.0 2,025.6 63.1 - 2,088.7
Operating profit before foreign exchange, exceptional items and property and 278.7 124.0 402.7 144.1 546.8 6.9 - 553.7
other related impairments
Foreign exchange realised (1.1) (0.1) (1.2) (3.7) (4.9) (0.9) - (5.8)
Property and other related impairments (103.4) (103.5) (206.9) (20.1) (227.0) - - (227.0)
Profit on sale of properties 10.7 - 10.7 0.1 10.8 - - 10.8
Gain on sale of discontinued operations - - - - - - - -
Exceptional items (1.3) - (1.3) - (1.3) - - (1.3)
Operating profit 183.6 20.4 204.0 120.4 324.4 6.0 - 330.4
Investment income 43.8 - 43.8 - 43.8 - - 43.8
Investment costs (19.7) - (19.7) - (19.7) - - (19.7)
Finance income 36.8 - 36.8 2.0 38.8 - (8.5) 30.3
Finance costs (42.8) (10.0) (52.8) (4.9) (57.7) - 8.5 (49.2)
Profit before taxation 201.7 10.4 212.1 117.5 329.6 6.0 - 335.6
Taxation (78.7)
Profit for the period 256.9
1) The FY22 results have been re-categorised due to changes in the
reporting segments, with European retail stores, management and operations
from European Retail and Rest of the World being merged into International
Retail
Inter-segment sales are priced at cost plus a 10% mark-up.
Other segmental items included in the income statement for the 52 weeks ended
24 April 2022:
UK Sports Premium Lifestyle UK Retail Total International Retail Total Retail Wholesale & Licensing Group Total
(£'m) (£'m) (£'m) (£'m) (£'m) (£'m) (£'m)
Property, plant & equipment depreciation 122.2 22.9 145.1 22.6 167.7 1.3 169.0
Property, plant & equipment impairment 51.7 94.0 145.7 3.5 149.2 - 149.2
IFRS 16 ROU depreciation 47.8 6.4 54.2 23.0 77.2 0.4 77.6
IFRS 16 ROU impairment 50.7 9.5 60.2 16.6 76.8 - 76.8
Investment property depreciation 5.9 - 5.9 - 5.9 - 5.9
Investment property impairment 1.0 - 1.0 - 1.0 - 1.0
IFRS 16 disposal and modification/remeasurement of lease liabilities 14.2 3.9 18.1 10.2 28.3 - 28.3
Intangible amortisation 1.0 - 1.0 - 1.0 6.5 7.5
Intangible impairment 1.3 - 1.3 - 1.3 4.4 5.7
Reconciliation of Reported PBT to Adjusted PBT for the 53-week period ended 30
April 2023
UK Sports Premium Lifestyle UK Retail Total International Retail Total Retail Wholesale & Licensing Group Total
(£'m) (£'m) (£'m) (£'m) (£'m) (£'m) (£'m)
Reported PBT 566.8 55.2 622.0 72.9 694.9 (34.2) 660.7
Exceptional items (25.0) (55.2) (80.2) - (80.2) (16.9) (97.1)
Fair value adjustment to derivative financial instruments (32.5) - (32.5) - (32.5) - (32.5)
Fair value gains and profit on disposal of equity derivatives (41.1) - (41.1) - (41.1) - (41.1)
Realised FX loss / (gain) (35.8) (0.1) (35.9) 6.5 (29.4) (1.8) (31.2)
Share based payments 14.6 - 14.6 - 14.6 4.7 19.3
Adjusted PBT 447.0 (0.1) 446.9 79.4 526.3 (48.2) 478.1
Reconciliation of Reported PBT to Adjusted PBT for the 52-week period ended 24
April 2022((1)):
UK Sports Premium Lifestyle UK Retail Total International Retail Total Retail Wholesale & Licensing Group Total
(£'m) (£'m) (£'m) (£'m) (£'m) (£'m) (£'m)
Reported PBT 201.6 10.4 212.0 117.6 329.6 6.0 335.6
Exceptional items 1.3 - 1.3 - 1.3 - 1.3
Fair value adjustment to derivative financial instruments (7.6) - (7.6) - (7.6) - (7.6)
Fair value (gains)/losses and profit on disposal of equity derivatives (9.9) - (9.9) - (9.9) - (9.9)
Realised FX loss / (gain) 1.1 0.1 1.2 3.7 4.9 0.9 5.8
Share based payments 10.4 - 10.4 - 10.4 4.2 14.6
Adjusted PBT 196.9 10.5 207.4 121.3 328.7 11.1 339.8
(1) The FY22 numbers have been re-categorised due to changes in the
reporting segments, with European retail stores, management and operations
from European Retail and Rest of the World being merged into International
Retail
3. EXCEPTIONAL ITEMS 53 weeks ended 52 weeks ended
30 April 2023 24 April 2022
(£'m) (£'m)
Impairments - (1.3)
Fair value gain on associate 16.9 -
Adjustment to Studio regulatory provision 25.0 -
Gain on bargain purchase 55.2 -
97.1 (1.3)
The gain on bargain purchase in the current period relates to acquisition of
JD brands.
The adjustment to the Studio regulatory provision is detailed in note 15.
The fair value gain on associate arose as a result of the disposal of 51% of
Kangol LLC, following the loss of control.
4. INVESTMENT INCOME
53 weeks ended 52 weeks ended
30 April 2023 24 April 2022
(£'m) (£'m)
Profit on disposal of equity derivatives - 23.2
Premium received on equity derivatives 63.9 13.2
Fair value gain on equity derivatives 45.7 6.4
Dividend income 3.0 1.0
112.6 43.8
The profit on disposal of equity derivatives in the prior year mainly relates
to Hugo Boss contracts for difference. The fair value gain on equity
derivatives mainly relates to Hugo Boss options. The premium received on
equity derivatives mainly relates to written Hugo Boss options.
5. INVESTMENT COSTS
53 weeks ended 52 weeks ended
30 April 2023 24 April 2022
(£'m) (£'m)
Loss on disposal of equity derivatives 4.6 -
Fair value loss on equity derivatives - 19.7
4.6 19.7
The fair value loss on equity derivatives in the prior period mainly relates
to Hugo Boss contracts for difference. The loss on disposal of equity
derivatives relates to ASOS and Next options.
6. FINANCE INCOME
53 weeks ended 52 weeks ended
30 April 2023 24 April 2022
(£'m) (£'m)
Bank interest receivable 9.7 4.5
Interest on retirement benefit obligations - 0.1
Other finance income 3.9 1.7
Fair value adjustment to derivatives* 32.5 24.0
46.1 30.3
*Includes £8.4m from interest rate swaps.
7. FINANCE COSTS
53 weeks ended 52 weeks ended
30 April 2023 24 April 2022
(£'m) (£'m)
Interest on bank loans and overdrafts 41.4 13.6
Other interest 9.5 7.0
Interest on retirement benefit obligations - -
IFRS 16 lease interest 18.2 12.2
Fair value adjustment to derivatives - 16.4
69.1 49.2
8. TAXATION
53 weeks ended 52 weeks ended
30 April 2023 24 April 2022
(£'m) (£'m)
Current tax 145.2 86.2
Adjustment in respect to prior periods (1.0) (5.7)
Total current tax 144.2 80.5
Deferred tax 39.7 (8.5)
Adjustment in respect of prior periods (24.5) 6.7
Total deferred tax 15.2 (1.8)
159.4 78.7
Profit before taxation 660.7 335.6
Taxation at the standard rate of tax in the UK of 19.5% (2022: 19.0%) 128.8 63.8
Non-taxable income (17.9) (14.4)
Expenses not deductible for tax purposes 70.9 62.4
Other tax adjustments 3.1 (15.6)
Adjustments in respect of prior periods - current tax (1.0) (5.7)
Adjustments in respect of prior periods - deferred tax (24.5) 6.7
Changes in deferred tax rate - (18.5)
159.4 78.7
Non-taxable income largely relates to differences between capital allowances
and depreciation which are not timing differences on which deferred tax is
provided. Expenses not deductible for tax purposes largely relates to
non-qualifying depreciation and impairments not qualifying for tax allowances.
9. EARNINGS PER SHARE FROM TOTAL AND CONTINUING OPERATIONS ATTRIBUTABLE TO THE
EQUITY SHAREHOLDERS
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders of the parent by the weighted average number of
ordinary shares outstanding during the year.
For diluted earnings per share, the weighted average number of shares,
459,911,330 (FY22: 471,975,282), is adjusted to assume conversion of all
dilutive potential ordinary shares under the Group's share schemes, being nil
(FY22: nil), to give the diluted weighted average number of shares of
459,911,330 (FY22: 471,975,282). There is therefore no difference between the
Basic and Diluted EPS calculations for both periods. Shares bought back into
treasury are deducted when calculating the weighted average number of shares
below.
Basic and Diluted Earnings Per Share
53 weeks ended 53 weeks ended 53 weeks ended 52 weeks ended 52 weeks ended 52 weeks ended
30 April 2023 30 April 2023 30 April 2023 24 April 2022 24 April 2022 24 April 2022
Basic and diluted, continuing operations Basic and diluted, discontinued operations Basic and diluted, total Basic and diluted, continuing operations Basic and diluted, discontinued operations Basic and diluted, total
(£'m) (£'m) (£'m) (£'m) (£'m) (£'m)
Profit for the period 461.7 26.3 488.0 224.1 25.7 249.8
Number in thousands Number in thousands Number in thousands Number in thousands Number in thousands Number in thousands
Weighted average number of shares 459,911 459,911 459,911 471,975 471,975 471,975
Pence per share Pence per share Pence per share Pence per share Pence per share Pence per share
Earnings per share 100.4 5.7 106.1 47.5 5.4 52.9
Adjusted Earnings Per Share
The adjusted earnings per share reflects the underlying performance of the
business compared with the prior period and is calculated by dividing adjusted
earnings by the weighted average number of shares for the period. Adjusted
earnings is used by management as a measure of profitability within the Group.
Adjusted earnings is defined as profit for the period attributable to equity
holders of the parent for each financial period but excluding the post-tax
effect of certain non-trading items. Tax has been calculated with reference to
the effective rate of tax for the Group.
The Directors believe that the adjusted earnings and adjusted earnings per
share measures provide additional useful information for shareholders on the
underlying performance of the business and are consistent with how business
performance is measured internally. Adjusted earnings is not a recognised
profit measure under IFRS and may not be directly comparable with adjusted
profit measures used by other companies.
53 weeks ended 53 weeks ended 52 weeks ended 52 weeks ended
30 April 2023 30 April 2023 24 April 2022 24 April 2022
Basic Diluted Basic Diluted
(£'m) (£'m) (£'m) (£'m)
Profit for the period 488.0 488.0 249.8 249.8
Pre-tax adjustments to profit / (loss) for the period for the following items:
Exceptional items (97.1) (97.1) 1.3 1.3
Fair value adjustment to derivatives included within finance (income) (32.5) (32.5) (7.6) (7.6)
Fair value gains and profit on disposal of equity derivatives (41.1) (41.1) (9.9) (9.9)
Realised foreign exchange loss/ (gain) (31.2) (31.2) 5.8 5.8
Share based payments 19.3 19.3 14.6 14.6
Tax adjustments on the above items 20.8 20.8 0.3 0.3
Adjusted profit for the period 326.2 326.2 254.3 254.3
Number in thousands Number in thousands Number in thousands Number in thousands
Weighted average number of shares 459,911 459,911 471,975 471,975
Pence per share Pence per share Pence per share Pence per share
Adjusted Earnings per share 70.9 70.9 53.9 53.9
10. DISCONTINUED OPERATIONS AND SALE OF SUBSIDIARIES
On 24 May 2022, the Group disposed of its US retail businesses trading as Bobs
Stores and Eastern Mountain Sports for net cash consideration of approximately
£43.6m. The disposal took place through the sale of 100% of the share capital
of Roberts 50 USA LLC and its subsidiaries to GoDigital Media Group. These
businesses are reported as part of the International operating segment.
As per IFRS 5 Non-current Assets Held for Sale and Discontinued Operations,
this disposal group was classified as held for sale and as a discontinued
operation in FY22. A profit on disposal of £26.3m has been recognised in the
Consolidated Income Statement in the current year.
The following major classes of assets and liabilities relating to the disposal
group were classified as held for sale in the Consolidated Balance Sheet as of
24 April 2022:
24 April 2022
(£'m)
Inventories 37.7
Trade and other receivables 2.3
Assets held for sale 40.0
Trade and other payables 10.6
Provisions 3.2
Lease liabilities 8.9
Liabilities held for sale 22.7
The reconciliation of the transaction is detailed below:
30 April 2023
(£'m)
Net assets disposed of (including FX revaluation)
(18.9)
Cash received, net of transaction costs and cash disposed of 43.6
Gain on sale before income tax and reclassification of foreign currency 24.7
translation reserve
Reclassification of foreign currency translation reserve
1.6
Income tax expense on gain -
Gain on sale after income tax 26.3
The Consolidated Cash Flow Statement includes the following amounts relating
to this discontinued operation:
53 weeks ended 52 weeks ended
30 April 2023 24 April 2022
(£'m) (£'m)
Operating activities (2.2) 4.2
Financing activities (0.5) (6.1)
Net cash outflow from discontinued operations (2.7) (1.9)
During the current period, consideration of £2.9m was received in respect of
the Group's disposal of a 51% shareholding in Kangol LLC to Bollman Hat
Company. Total proceeds received from disposals of discontinued operations and
subsidiaries in the current period was therefore £46.5m.
11. PROPERTY, PLANT AND EQUIPMENT
Right of use assets Freehold land and Buildings Long-term Leaseholds Short-term leasehold improvements Plant and Equipment Total
(£'m) (£'m) (£'m) (£'m) (£'m) (£'m)
COST
At 25 April 2021 669.1 905.4 153.3 127.4 878.8 2,734.0
Acquisitions 5.6 7.0 - - 6.9 19.5
Additions 100.9 79.3 4.1 2.5 195.3 382.1
Eliminated on disposals (75.9) (42.0) (1.2) (4.7) (82.0) (205.8)
Reclassifications / Remeasurements ((1)) (5.4) (43.4) - - (0.2) (49.0)
Exchange differences (7.7) (2.3) (0.5) (0.1) (3.0) (13.6)
At 24 April 2022 686.6 904.0 155.7 125.1 995.8 2,867.2
Acquisitions 43.0 - 15.7 - 7.6 66.3
Additions 116.7 97.5 6.0 1.1 275.5 496.8
Eliminated on disposals (111.2) (60.1) (34.3) - (65.6) (271.2)
Reclassifications / Remeasurements 7.6 (1.5) - - - 6.1
Exchange differences 12.6 (13.3) 0.6 0.3 18.6 18.8
At 30 April 2023 755.3 926.6 143.7 126.5 1,231.9 3,184.0
ACCUMULATED DEPRECIATION AND IMPAIRMENT
At 25 April 2021 (419.4) (282.7) (49.7) (118.7) (698.6) (1,569.1)
Charge for the period (77.6) (47.9) (12.4) (3.6) (105.1) (246.6)
Impairment (76.8) (106.5) (2.0) - (40.7) (226.0)
Eliminated on disposals 75.9 15.7 1.1 1.8 79.1 173.6
Reclassifications / Remeasurements ((1)) - 0.6 (0.1) (1.1) 4.0 3.4
Exchange differences 6.0 0.3 0.1 0.2 1.9 8.5
At 24 April 2022 (491.9) (420.5) (63.0) (121.4) (759.4) (1,856.2)
Charge for the period (75.2) (43.8) (11.4) (1.7) (130.2) (262.3)
Impairment (43.1) (23.9) (0.2) - (32.2) (99.4)
Eliminated on disposals 110.8 16.7 11.6 (0.9) 57.0 195.2
Reclassifications / Remeasurements - 0.2 - - - 0.2
Exchange differences (9.4) 4.3 (0.3) (0.3) (5.1) (10.8)
At 30 April 2023 (508.8) (467.0) (63.3) (124.3) (869.9) (2,033.3)
NET BOOK VALUE
At 30 April 2023 246.5 459.6 80.4 2.2 362.0 1,150.7
At 24 April 2022 194.7 483.5 92.7 3.7 236.4 1,011.0
At 25 April 2021 249.7 622.7 103.6 8.7 180.2 1,164.9
12. INTANGIBLE ASSETS
Goodwill Trademarks and licenses Brands Customer related Total
(£'m) (£'m) (£'m) (£'m) (£'m)
COST
At 25 April 2021 170.7 90.7 80.6 - 342.0
Acquisitions 1.3 - - 5.7 7.0
Exchange adjustments 4.8 0.4 6.4 - 11.6
At 24 April 2022 176.8 91.1 87.0 5.7 360.6
Acquisitions 35.6 11.7 - - 47.3
Additions - 1.0 - - 1.0
Disposals (0.2) (2.3) - - (2.5)
Exchange adjustments 2.5 0.3 1.8 - 4.6
At 30 April 2023 214.7 101.8 88.8 5.7 411.0
AMORTISATION AND IMPAIRMENT
At 25 April 2021 (124.0) (86.7) (10.8) - (221.5)
Amortisation charge - (0.5) (6.0) (1.0) (7.5)
Impairment (5.7) - - - (5.7)
Exchange adjustments (2.7) (0.1) (2.5) - (5.3)
At 24 April 2022 (132.4) (87.3) (19.3) (1.0) (240.0)
Amortisation charge - (0.9) (6.0) - (6.9)
Impairment (71.7) (11.7) (52.0) (4.7) (140.1)
Disposals 0.4 2.3 - - 2.7
Exchange adjustments (1.1) (0.3) (1.2) - (2.6)
At 30 April 2023 (204.8) (97.9) (78.5) (5.7) (386.9)
At 30 April 2023 9.9 3.9 10.3 - 24.1
At 24 April 2022 44.4 3.8 67.7 4.7 120.6
At 25 April 2021 46.7 4.0 69.8 - 120.5
Amortisation is charged to selling, distribution and administrative expenses
in the Consolidated Income Statement.
Goodwill, trademarks and licenses and brands are acquired in a business
combination are allocated, at acquisition, to the CGUs that are
expected to benefit from that business combination. After recognition of
impairment losses, the carrying amount of these assets at the start and end of
the current period are allocated as follows:
30 April 2023
Goodwill Trademarks and licenses Brands Customer related Total
(£'m) (£'m) (£'m) (£'m) (£'m)
Wholesale & Licensing (excl. Everlast) 9.9 - - - 9.9
Everlast - 3.3 10.3 - 13.6
Studio Retail - - - - -
9.9 3.3 10.3 - 23.5
24 April 2022
Goodwill Trademarks and licenses Brands Customer related Total
(£'m) (£'m) (£'m) (£'m) (£'m)
Wholesale & Licensing (excl. Everlast) 9.9 - - - 9.9
Everlast 34.5 3.8 67.7 - 106.0
Studio Retail - - - 4.7 4.7
44.4 3.8 67.7 4.7 120.6
Acquisitions
During the current period, goodwill and trademarks with a fair value of
£47.3m were recognised as part of business combinations. Following a review
of the trading performance of these businesses, the goodwill and intangibles
assets were fully impaired as their recoverable amount on a value in use basis
was estimated to be £nil.
In the prior period, a customer related intangible asset with a fair value of
£5.7m was allocated the Studio Retail CGU following the acquisition of the
business. This has been fully impaired in the current period following a
review of the trading performance of the business, which indicated that the
carrying value was not supportable.
Amortisation
The brands, trademarks & licenses allocated to the Everlast CGU are being
amortised over a 15-year period. The amortisation charge in the current period
is £6.5m (FY22: £6.5m) and is disclosed within selling, distribution and
administrative expenses in the Consolidated Income Statement. The remaining
useful economic life of these assets is 11 years (FY22: 12 years).
Impairment review
The Group tests the carrying amount of goodwill and intangible assets with an
indefinite life for impairment annually or more frequently if there are
indications that their carrying value might be impaired. The carrying amounts
of other intangible assets are reviewed for impairment if there is an
indicator of impairment.
The recoverable amounts of the Wholesale & Licensing (excl. Everlast) and
Everlast CGUs have been determined by reference to value in use
calculations. The recoverable amounts were then compared to the carrying
value of the assets allocated to each CGU to assess the level impairment
required, if any.
Significant judgements, assumptions and estimates
In determining the value in use of CGUs it is necessary to make a series of
assumptions to estimate the present value of future cash flows. In each case,
these key assumptions have been made by management reflecting past experience,
current trends, and where applicable, are consistent with relevant external
sources of information. The key assumptions are as follows:
30 April 2023 24 April 2022
Wholesale & Licensing (excl. Everlast) Everlast Wholesale & Licensing (excl. Everlast) Everlast
5-year average annual forecast sales (decline)/growth (3.0%) (2.6%)
(4.4%) 0.8%
Discount rate 8.5% 14.2% 7.5% 13.5%
Terminal growth rate 2.0% 2.0% 2.0% 2.0%
Management has prepared cash flow forecasts for a five-year period derived
from the actual results for financial year 2022/23. These forecasts include
assumptions around sales prices and volumes, specific customer relationships
and operating costs and working capital movements.
The material reduction in revenue growth assumptions for the Everlast CGU from
an average growth rate of 0.8% pa in the prior year to a decline of 2.6% pa in
the current year is reflective of the failure of commercial negotiations with
prospective wholesale partners that were factored into the cashflow forecasts
in the prior year. In addition, the business has significantly underperformed
in financial year 2022/23 vs. the forecast performance assumed in the prior
year impairment review partly as result of a challenging US retail market and
a failure to maintain the trading momentum seen during the Covid-19 pandemic.
Management has revisited the FY22 impairment assessment and are satisfied that
the assessment remains appropriate based on the facts and information that
were available at the time.
The pre-tax rates used to discount the forecast cash flows are shown above and
are derived from the Group's weighted average cost of capital as adjusted for
the specific risks related to each CGU.
To forecast beyond the detailed cash flows into perpetuity, a long-term
average growth rate of 2.0% (2022: 2.0%) has been used. This is not greater
than the published International Monetary Fund average growth rate in gross
domestic product for the next five-year period in the territories where the
CGUs operate. The growth rate was assessed separately for each CGU however the
2.0% rate was deemed appropriate in both cases.
Results
The recoverable amount of the Wholesale & Licensing (excluding Everlast)
CGU exceeds its carrying value by approximately £82m and as such no
impairment was required.
The carrying value of the Everlast CGU was determined to be higher than the
recoverable amount, primarily as a result of the revised sales assumptions
noted above, and consequently an impairment loss of £87.9m was recognised.
The impairment loss was allocated first to goodwill (£35.9m) and then to
brands (£52.0m) and has been disclosed within selling, distribution and
administrative expenses in the Consolidated Income Statement.
Sensitivity Analysis
Following the impairment loss recognised in respect of the Everlast CGU, the
recoverable amount is equal to the carrying amount. Therefore, any adverse
movement in a key assumption would lead to a further impairment.
The table below shows changes to the terminal growth rate, risk adjusted
discount rate and forecast operating cash flow assumptions used in the
calculation of value in use for the Everlast CGU and the change to the level
of impairment indicated by reasonably possible changes in these assumptions:
Everlast
Impairment recorded £87.9m
Recoverable amount £43.7m
Additional impairment required as a result of changes to key assumptions
Current Terminal Growth Rate 2.0%
Revised Terminal Growth Rate 1.8%
Additional impairment required £0.5m
Current Discount Rate 14.2%
Revised Discount Rate 15.6%
Additional impairment required £4.1m
Current 5-year average annual forecast sales decline (2.6%)
Revised 5-year average annual forecast sales decline (2.8%)
Additional impairment required £7.9m
Based on the results of the impairment test for the Wholesale & Licensing (excluding Everlast) CGU and the immaterial carrying value of the remaining goodwill, management are satisfied that there is sufficient headroom against the carrying value such that a reasonably possible change in assumption would not lead to an impairment. Consequently, no sensitivity analysis has been disclosed for this CGU.
Climate Change
Management considered the impact of climate change when conducting its
impairment review and concluded that it was unlikely to have a material impact
on the assumptions based on the following:
· The relevant tangible assets have relatively short useful
economic lives and are not considered to be in locations that will be
materially impacted by climate change (i.e., they are in the USA - a developed
country).
· The forecasts include estimates for ongoing capital expenditure,
which management consider to be sufficient to make any essential climate
change related acquisitions (e.g., solar panels or building energy management
systems).
13. LONG-TERM FINANCIAL ASSETS
The Group is not looking to make gains through increases in market prices of
its long-term financial assets, therefore on initial application of IFRS 9 the
Group made the irrevocable election to account for long term financial assets
at fair value through other comprehensive income (FVOCI). The election has
been made on an instrument-by-instrument basis, only qualifying dividend
income is recognised in profit and loss, changes in fair value are recognised
within OCI and never reclassified to profit and loss, even if the asset is
impaired, sold or otherwise derecognised. The majority of long-term financial
assets are recognised in the UK Sports segment.
The fair value of the long-term financial assets is based on bid quoted market
prices at the balance sheet date or where market prices are not available, at
management's estimate of fair value.
The following table shows the aggregate movement in the Group's financial
assets during the period:
30 April 2023 24 April 2022
(£'m) (£'m)
At beginning of period 206.6 263.3
Additions 243.3 198.4
Disposals (172.4) (238.4)
Amounts recognised through other comprehensive income 9.9 (8.1)
Exchange differences 2.2 (8.6)
At end of period 289.6 206.6
Included within long-term financial assets at the period ended 30 April 2023
are the following direct interests held by the Group:
• 36.9% (FY22: 36.9%) interest in Mulberry Group plc
• 17.6% (FY22: Nil%) interest in N Brown Group plc
• 5.5% (FY22: 2.0%) interest in ASOS plc
• Various other interests, none of which represent more than 5.0%
of the voting power of the investee
The following table shows the fair value of each of the Group's long-term
financial assets (all listed):
30 April 2023 24 April 2022
(£'m) (£'m)
Mulberry Group plc 53.2 65.3
N Brown Group plc 23.5 -
ASOS plc 40.5 -
Other* 172.4 141.3
At end of period 289.6 206.6
*Other relates to interests which do not represent more than 5.0% of the
voting power of the investee as at 30 April 2023.
These holdings have been assessed under IFRS 9 Financial Instruments and
categorised as long-term financial assets, as the Group does not consider them
to be associates and therefore, they are not accounted for on an equity basis.
Our strategic investments are intended to allow us to develop relationships
and commercial partnerships with the relevant retailers and assist in building
relationships with key suppliers and brands.
14. BORROWINGS
30 April 2023 24 April 2022
(£'m) (£'m)
Current:
Lease liabilities 119.6 117.0
Non-Current
Bank and other loans 749.7 827.9
Lease liabilities 560.3 503.6
1,429.6 1,448.5
An analysis of the Group's total borrowings other than bank overdrafts is as
follows:
30 April 2023 24 April 2022
(£'m) (£'m)
Borrowings - sterling 749.7 827.9
Group borrowings (excluding Frasers Group Financial Services Limited) are at a
rate of interest of 2.0% (FY22: 2.0%) over the interbank rate of the country
within which the borrowing entity resides. The securitisation loan relating to
Frasers Group Financial Services Limited had a balance at 30 April 2023 of
£161.6m (FY22: £143.6m). The average interest rate paid on the
securitisation loan was 5.41% (FY22: 3.23%).
Reconciliation Of Liabilities Arising From Financing Activities
The changes in the Group's liabilities arising from financing activities can
be classified as follows:
Non-current borrowings Current borrowings Total
(£'m) (£'m) (£'m)
At 25 April 2021 1,240.1 188.5 1,428.6
Cash-flows:
- Borrowings drawn down 1,374.4 - 1,374.4
- Borrowings repaid (1,484.4) - (1,484.4)
- Borrowings acquired through business combinations 232.0 - 232.0
Lease liability:
- IFRS 16 Lease Liabilities - cash-flows - (176.2) (176.2)
- IFRS 16 Lease Liabilities - modifications/remeasurements, transfers from (136.7) 91.1 (45.6)
non-current to current, and foreign exchange adjustments
- IFRS 16 Lease Liabilities - new leases 90.1 11.4 101.5
- IFRS 16 Lease Liabilities - acquired through business combinations 16.0 2.2 18.2
At 24 April 2022 1,331.5 117.0 1,448.5
Cash-flows:
- Borrowings drawn down 616.8 - 616.8
- Borrowings repaid (695.0) - (695.0)
Lease liability:
- IFRS 16 Lease Liabilities - cash-flows - (140.7) (140.7)
- IFRS 16 Lease Liabilities - modifications/remeasurements, transfers from (121.4) 101.8 (19.6)
non-current to current, and foreign exchange adjustments
- IFRS 16 Lease Liabilities - new leases 137.1 35.2 172.3
- IFRS 16 Lease Liabilities - acquired through business combinations 41.0 6.3 47.3
At 30 April 2023 1,310.0 119.6 1,429.6
On 30 November 2021 the Group refinanced its existing borrowings and entered
into a combined term loan and revolving credit facility of £930.0m for a
period of 3 years, with the possibility to extend this by a further 2 years.
This facility was extended by one year and the facility increased to
£1,052.5m as at the reporting date until November 2024 and £1,002.5m until
November 2025. Given the revolving credit facility is available for a minimum
of 2 years and the limited restriction of lending under the facility, the
balance is classified as non-current on the Consolidated Balance Sheet.
The Group continues to operate comfortably within its banking facilities and
covenants and the Board remains comfortable with the Group's available
headroom. The carrying amounts and fair value of the borrowings are not
materially different.
Reconciliation of Net Debt:
30 April 2023 24 April 2022
(£'m) (£'m)
Borrowings (1,429.6) (1,448.5)
Add back:
- Lease liabilities 679.9 620.6
Cash and cash equivalents 332.9 336.8
Net debt (416.8) (491.1)
15. PROVISIONS
Legal and regulatory Property related Financial services related Other Total
(£'m) (£'m) (£'m) (£'m) (£'m)
At 25 April 2021 215.8 144.1 - 1.3 361.2
Amounts provided 17.7 53.7 - - 71.4
Acquired through business combinations 7.1 2.7 42.4 - 52.2
Amounts utilised / reversed (10.4) (39.3) (0.8) (1.3) (51.8)
At 24 April 2022 230.2 161.2 41.6 - 433.0
Acquired through business combinations - 6.0 - - 6.0
Amounts provided 1.3 69.7 - 0.8 71.8
Amounts utilised / reversed (108.0) (70.2) (25.6) (0.5) (204.3)
At 30 April 2023 123.5 166.7 16.0 0.3 306.5
Financial services related and other provisions are categorised as current
liabilities, while legal and regulatory and property related provisions are
non-current.
Legal and regulatory provisions
Legal and regulatory provisions reflect management's best estimate of the potential costs arising
from the settlement of outstanding disputes of a commercial and regulatory
nature.
A substantial portion of the amounts provided relates to ongoing legal claims
and non-UK tax enquiries. On the basis of a review of the facts and
circumstances prevailing at the balance sheet date in relation to these
matters, management has reassessed its best estimate of the amounts provided
at 30 April 2023 which has resulted in a reduction in amounts provided of
approximately £95.0m compared to the prior year. In accordance with IAS37.92,
management have concluded that it would prejudice seriously the position of
the Group to provide further specific disclosures in respect of amounts
provided for legal claims and non-UK tax enquiries.
Also included within legal and regulatory provisions are amounts relating to
appeals by Studio Retail against decisions of HMRC with regard to the setting
of a Partial Exemption Special Method (the means by which the recovery of
input VAT on costs relating to the Company's financial services activities is
restricted). As at 30 April 2023, the Group held a provision of approximately
£2.5m (FY22: £6.9m), which represents management's best estimate of the
likely increase in the level of restriction on the recovery of input VAT over
and above that which has already been restricted in Studio Retail's quarterly
VAT returns or paid to HMRC pending appeal. We note that management's best
estimate is one of a number of different outcomes so the amounts provided may
differ to the final costs incurred by the company in respect of this matter.
The timing of the outcome of legal claims and non-UK tax inquiries is
dependent on factors outside the Group's control and therefore the timing of
settlement is uncertain. After taking appropriate legal advice, the outcomes
of these claims are not expected to give rise to material loss in excess of
the amounts provided.
Property related provisions
Included within property related provisions are provisions for dilapidations
in respect of the Group's retail stores and warehouses. Further details of
management's estimates are included in note 1.
Financial services provisions
As a regulated business, Frasers Group Financial Services Limited has an
obligation to proactively review its business to ensure that appropriate
outcomes were delivered to customers. At 24 April 2022, a provision of £41.6m
was recognised in respect of the probable costs of remediating customers who
may have been adversely impacted by legacy decisions. Since the approval of
the prior year's consolidated financial statements, the receipt of new
information which was not available at the point the prior year financial
statements were approved, has enabled management to refine the relevant
customer cohorts who were potentially impacted by these legacy decisions and
complete detailed analysis of the financial implications. This has enabled a
revision to management's best estimate of the likely costs of remediation and
has resulted in a reduction in the amount provided of approximately £25m.
The remaining provision is expected to be utilised within 12 months of the
balance sheet date.
Management considered whether or not the reduction in provision should result
in an adjustment to the amounts recognised in the acquisition balance sheet in
accordance with the requirements of IFRS 3.45 and IFRS3.47 and concluded that
the release should be treated as a prospective change in accounting estimate
under IAS8.34 since it arose as a result of new information which has come to
light since 24 April 2022. It is the Group's policy to present items that
"merit separate presentation" by reference to their "their size, nature and
infrequency of the events giving rise to them" as exceptional items. Given the
unusual size, nature and infrequency of movements in provisions of this
nature, management has disclosed the income statement impact within
exceptional items in the consolidated income statement.
Other provisions
Other provisions relate to provisions for restructuring and employment
(non-retirement related).
GLOSSARY
ALTERNATIVE PERFORMANCE MEASURES
CONSOLIDATED FIVE YEAR RECORD
53 weeks ended 52 weeks ended 52 weeks ended 52 weeks ended 52 weeks ended
30 April 2023 24 April 2022 25 April 2021 28 April 2020 29 April 2019
(£'m) (£'m) (£'m) (£'m) (£'m)
REPORTED PBT 660.7 335.6 8.5 143.5 179.2
Exceptional items (97.1) 1.3 1.6 13.1 41.0
Fair value gain on step acquisition - - - (20.4) -
Fair value adjustments to derivatives included within finance (income) / costs (32.5) (7.6) 4.6 (21.3) (39.7)
Fair value (gains) / losses and profit on disposal of equity derivatives (41.1) (9.9) (82.2) 35.1 (3.3)
Realised foreign exchange (gain) / loss (31.2) 5.8 26.3 (34.9) (22.1)
Share scheme 19.3 14.6 1.3 - -
ADJUSTED PBT 478.1 339.8 (39.9) 115.1 155.1
Notes to the consolidated income statement five-year record:
1. All information is presented under IFRS.
2. The five-year record has been prepared on the same
basis as the Financial Statements for the 53 weeks ended 30 April 2023, as set
out in note 1.
Reconciliation of excluding acquisitions and currency neutral performance
measures:
UK Retail Premium Lifestyle International Retail Wholesale & Licensing Group Total
Revenue
£'m £'m £'m £'m £'m
FY23 Reported 3,080.6 1,212.9 1,083.4 188.3 5,565.2
Adjustments for acquisitions, disposals and currency neutral (428.7) (74.4) (114.7) - (617.8)
Financial performance from 53(rd) week (50.0) (21.5) (18.3) (3.6) (93.4)
FY23 Excluding acquisitions, disposals and currency neutral 2,601.9 1,117.0 950.4 184.7 4,854.0
FY22 Reported 2,640.1 1,056.6 940.5 168.1 4,805.3
Adjustments for acquisitions, disposals and currency neutral (59.3) - 33.1 14.9 (11.3)
FY22 Excluding acquisitions, disposals and currency neutral 2,580.8 1,056.6 973.6 183.0 4,794.0
% Variance 0.8% 5.7% (2.4%) 0.9% 1.3%
Adjusted PBT
FY23 Reported 447.0 (0.1) 79.4 (48.2) 478.1
Adjustments for acquisitions, disposals and currency neutral 18.4 22.3 10.3 - 51.0
FY23 Excluding acquisitions, disposals and currency neutral 465.4 22.2 89.7 (48.2) 529.1
FY22 Reported 196.9 10.5 121.3 11.1 339.8
Adjustments for acquisitions, disposals and currency neutral 9.5 - (75.8) 3.8 (62.5)
FY22 Excluding acquisitions, disposals and currency neutral 206.4 10.5 45.5 14.9 277.3
% Variance 125.5% 111.4% 97.1% (423.5%) 90.8%
(1) The FY22 numbers have been re-categorised due to changes in the
reporting segments, with European retail stores, management and operations
being moved from European Retail to International Retail.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR RRMMTMTITMRJRecent news on Frasers
See all newsREG - Frasers Group PLC - Total Voting Rights
AnnouncementREG - Frasers Group PLC - Acquisition
AnnouncementREG - Frasers Group PLC - Transaction in Own Shares
AnnouncementREG - Frasers Group PLC - Transaction in Own Shares
AnnouncementREG - Frasers Group PLC - Transaction in Own Shares
Announcement