REG - Frasers Group PLC - Unaudited Full Year Trading Update ex. Studio
21/07/2022 07:00
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RNS Number : 2165T Frasers Group PLC 21 July 2022
21 July 2022
Unaudited Full Year Trading Update for the 52 weeks to 24 April 2022
("FY22") (excluding Studio Retail Limited((3)))
Robust trading and strong strategic progress on the Elevation Strategy
Michael Murray, Chief Executive of Frasers Group: "I am really proud of the
record performance we've announced today. It's clear that our elevation
strategy is working and we are building incredible momentum with new store
openings, digital capabilities and deeper brand partnerships across all of our
divisions. We've got the right strategy, team and determination to keep
driving our business from strength to strength."
Outlook
We are delighted to report a record-breaking year for Frasers Group with
adjusted profit before tax of £344.8m, despite the significant economic
headwinds and well-chronicled challenges across the sector.
Our elevation strategy has remained laser focused, and we have re-structured
our team to execute it with conviction. It is underpinned by our core
strengths and rock-solid foundations. Although the backdrop remains
challenging, this momentum gives us the confidence of achieving adjusted
profit before tax of between £450m and £500m for the next financial year.
Financial highlights
This Full Year Trading Update has been prepared in line with the Group's
existing accounting policies and excludes the SRL trade and assets acquired
during the year and does not include the presentation of Bob's Stores and
Eastern Mountain Sports as a discontinued operation. This Full Year Trading
Update is unaudited and does not constitute preliminary, final or audited
results for the Group. While the Board does not expect to report audited
results for the Group (including SRL) that are materially different to the
figures set out in this Full Year Trading Update, there can be no assurance or
certainty as to the extent or materiality of any such changes to these figures
pending the completion of the audit process and adoption by the Board.
The year on year commentary below excludes the effect on the Income Statement
and Balance Sheet of SRL((3))
• Strong financial performance as we recover from Covid-19, with Group
revenue (excluding SRL) up by 30.9%
• Excluding acquisitions and on a currency neutral basis, revenue
increased by 31.2%((1))
• UK Sports Retail revenue increased by 31.2%, largely due to the
strong reopening of stores after the last lockdown in March 2021 and the
comparative period being impacted by lockdowns as a result of Covid-19
• Excluding acquisitions, revenue increased by 30.1%(1)
• Premium Lifestyle revenue increased by 43.6%, largely due to new
FLANNELS stores, continued growth in online, and the strong reopening of
stores after the last lockdown in March 2021
• Excluding acquisitions, revenue increased by 43.3% (1)
• European Retail revenue increased by 28.4%, largely due to strong
growth in Ireland and the lockdowns experienced in the prior year
• Excluding acquisitions and on a currency neutral basis, revenue
increased by 33.4%(1)
• Profit Before Tax was £366.1m, up from £8.5m driven by the strong
reopening of stores after lockdown, new FLANNELS stores, continued growth in
online in the premium lifestyle segment, continued operating efficiencies, and
the FY21 comparative including Covid-19 related lockdowns, mitigated to some
extent by property related impairments of £227.0m
• Adjusted PBT was £344.8m compared to a loss of £39.9m in FY21((2))
• Excluding acquisitions and on a currency neutral basis, Adjusted PBT
increased by £394.0m((1))
• Net assets increased to £1,369.1m from £1,211.0m at 25 April 2021
Strategic and operational highlights
· Further growth of our key brand partner relationships, alongside
establishing new and innovative brand partners
· Supported our strategic brand partner Hugo Boss AG, with an
increased investment reflecting our growing relationship and confidence in the
brand's future
· Our Elevation Strategy has come to life through the new store
development including the creation of flagship stores, leading to recent
openings including Sports Direct Birmingham and FLANNELS Liverpool
· Strategic acquisitions, including Missguided (post year end) and
SRL, enable the Group to unlock new e-commerce capabilities and access a wider
customer base
· Significantly improved the digital consumer experience across all
touchpoints within the Group
· Returned £193.2m to shareholders through a significant share buy
back program
· Successfully refinanced our Group facility which now stands at
£980m
Financial Summary Unaudited Group Audited Change (%)
(excl. SRL((3))) Group
FY22 FY21
£m £m
Group revenue 4,746.9 3,625.3 30.9
UK Sports Retail 2,581.7 1,968.5 31.2
Premium Lifestyle 1,056.6 735.6 43.6
European Retail 790.2 615.2 28.4
Rest of World Retail 150.3 152.7 (1.6)
Wholesale & licensing 168.1 153.3 9.7
Profit Before Tax 366.1 8.5
Adjusted PBT (PBT)((2)) 344.8 (39.9)
Net assets 1,369.1 1,211.0
The current year numbers exclude the effects on the income statement of SRL
since its acquisition on 25 February 2022 to the year end 24 April 2022. The
current anticipated Loss Before Tax for the two months post acquisition period
is expected to be between £5m and £10m.
(1) A reconciliation excluding acquisitions and currency
neutral performance measures can be found in the Glossary.
(2) Adjusted PBT (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. Further detail on this calculation can be found in the Glossary.
(3) On 25 February 2022 the Group acquired the digital
retailer, Studio Retail Limited and certain other assets of Studio Retail
Group plc (in administration) (SRL).
Enquiries
Ronnie Laffar
Head of PR Communications
E. fgpr@frasers.group
T. 07585 886189
Rosie Oddy
Brunswick Group, PR
Advisors
E. frasersgroup@brunswick.com
T. 07734 861279
CEO STATEMENT
Clear vision
We are accelerating our strategy to provide consumers with access to the
world's best sports, premium and luxury brands by providing a world-leading
retail ecosystem. Aligned with this vision, we have defined the Group's
purpose: To elevate the lives of the many by giving them access to the world's
best brands and experiences.
To deliver on this mission and purpose, and to maintain the momentum created
by the elevation strategy, we will continue to work closely with our key brand
partners such as Nike, BOSS and Stone Island, to align plans. Our brand
partnerships are deeper and stronger than they have ever been in the Group's
history. These relationships will allow us to continue improving our product
offering and customer experience by creating the best platforms to enable our
brands to succeed. We are also redeveloping our sustainability strategy to
ensure we set ambitious targets and meet them in the coming years.
Strategic delivery
Our focus has been on executing our elevation strategy with investments across
our store portfolio, brand partnerships and further innovations across our
operations. The strategic investments we made during the year offer exciting
new opportunities for Frasers Group, whilst also supporting the long-term
future of the existing retail businesses, saving the jobs and livelihoods of
many.
Our recent acquisition of Studio Retail Limited provides expertise and
synergies which will enable us to deliver flexible payment models in the
future. Our post year end acquisition of the digital-first fashion brand
Missguided allows us to unlock the latest trends in women's fashion and
e-commerce. To strengthen our European expansion strategy, subsequent to the
year end we acquired the leading Danish sport retailer SportMaster.
We will also continue to divest non-core assets that fall outside our vison
and key focus segments, such as our post year end disposal of Bob's Stores and
Eastern Mountain Sports in America.
Increased PBT guidance
We are alive to the challenging economic conditions at present, with
inflationary pressures and supply chain disruption causing challenges for many
businesses operating in the retail sector. As well as the significant
increase in general running costs, we are fighting against a fundamentally
flawed business rates system which is yet to be addressed. Linked to these are
the cost-of-living pressures facing many of our consumers.
As a result, we have been conservative in our forecasting for the next
financial year. However, with our proven strategy and strong operational
backbone, we are confident of achieving a healthy growth to £450m and £500m
adjusted PBT.
Store openings
Our elevation strategy keeps exceeding our expectations. Its strength is
demonstrated by our recent store openings of FLANNELS Liverpool and Sports
Direct Birmingham.
FLANNELS Liverpool is one of the largest luxury retail investments in the UK
to date. This revolutionary seven floor, 120,000 sq. ft store in a historic
building brings a ground-breaking fashion, beauty, wellness and restaurant
experience to the North of England. It boasts a leading collection of
experiences including boutique fitness phenomenon Barry's Bootcamp, the first
ever of its kind in a retail environment. Our regional flagships don't only
benefit the physical environment, but also allow us to bring in new categories
and brands that our consumers can access online through our omnichannel
platforms.
Sports Direct Birmingham follows our Oxford Street, London opening last
summer. Both stores demonstrate the pinnacle of our journey and showcase the
strength of our elevation strategy. The consumer experience has been enhanced
at every stage including digital touchpoints, activations and integrations of
other group brands such as Evans, USC & Game, giving access to a wider
variety of products and experiences.
Big believers in physical retail
We have consistently criticised the archaic business rates regime and the need
for reform. Unfortunately, these issues remain unaddressed and are now coupled
with soaring construction and store fit out costs, making for an extremely
challenging environment to open and operate physical stores. While others have
shied away from committing to physical retail in these difficult times, we are
convinced that consumers will still flock to stores for great brands and
experiences. This belief has allowed us to build remarkable momentum, bucking
market trends. We will continue to invest in new store openings,
refurbishments and flagship opportunities to bring the world's best brands and
experiences to untapped markets.
Digital and operational transformation
As part of our growth strategy, we are continually innovating across our
supply chain and logistics to drive further efficiencies. At our Shirebrook
site, home to our distribution centre, we have invested over £200m in
automation. This makes us the biggest auto-store in Europe and vastly improves
our digital capabilities.
This has provided us with significant operational efficiencies and supported
the smooth integration of acquisitions into the Frasers Group platform,
enabling both our owned brands and brand partners to benefit from our
world-leading operations and logistics capabilities. At Shirebrook, we now
have approximately 2 million sq. ft of warehousing which enables us to process
up to 4 million units per week. This still leaves capacity for further growth.
We have continued to iterate and improve across the entirety of our Frasers
Group Platform. Most notably we have trialled a new headless e-commerce
platform on our Malaysian site, with a view to roll-out across the group. This
will be a transformative step for the Group allowing us to be more agile when
entering new territories or deploying changes to our technology stack.
Global growth
We also have extensive ambitions to grow the business outside of the UK and
will be exploring the potential for further international expansion through
acquisitions, joint ventures and organic openings. We have already begun to
expand our operational capabilities in Europe, with a new development site in
Bitburg, Germany set to open in the coming years. This space will have up to
2.4million sq. ft of warehouse and distribution space, handling approximately
300 million units annually. This will support growth across continental
Europe.
Talent and partners
To support the Group in executing our ambitious strategy, I am proud to have
built an excellent senior team made up of outstanding talent. They are the
driving force behind the Group's ambitious culture, bringing together dynamic,
talented and motivated teams to drive growth across the business. I have made
it a priority to strengthen Frasers Group's management team by creating
several new roles. Alongside the management team, we will look to support the
business by adding relevant talent and expertise to the Board when
appropriate.
Finally, thank you to our people and partners for your continued support, I am
proud of the steps we have taken this year in transforming the trajectory of
Frasers Group and look forward to another exciting year of innovation, impact
and growth.
Michael Murray
Chief Executive Officer
CHAIR'S STATEMENT
CEO Appointment
Earlier this year, Michael Murray transitioned into the role of Chief
Executive of Frasers Group. With Michael's leadership, we remain laser-focused
on the growth of the business, through keeping up the momentum of our
Elevation strategy, investing in our people and building out the proposition
for brands.
Michael has set out a clear vision for the business; to provide consumers with
access to the world's best sports, premium and luxury brands by providing a
world-leading retail ecosystem - and through that, he has significantly
improved our relationships with our key brand partners and grown our presence
across the UK and Europe through the development of our store portfolio.
With the Group's new leadership, and a clear direction, Michael continues to
redefine the culture, employee value proposition and strategy of Frasers Group
- which all contribute to the efficiency of the business and our strong
performance.
Business Performance and Financial Highlights
We are pleased that our business has performed above expectations since stores
re-opened in March 2021, following the final period of closure due to the
Covid-19 pandemic. We are a cash generative business which enables us to
continue to invest in our strategies and withstand some of the pressures and
impact of the pandemic, Brexit, global supply chain challenges and political
and economic uncertainty at home and abroad. Notwithstanding our business
resilience, these macro-economic factors however have contributed to our
conservative judgements and estimates leading to some significant non-cash
accounting impairments to our asset base.
• Revenue increased to £4,746.9m (FY21: £3,625.3m)
• Profit Before Tax increased to £366.1m (FY21:
£8.5m)
• Adjusted PBT increased to a profit of £344.8m
(FY21: loss £39.9m)
• Net assets at FY22 £1,369.1m (FY21: £1,211.0m)
Looking forward, we will continue to invest in the high street alongside our
online and digital capabilities. Following the success of the businesses'
first Sports Direct flagship on London's Oxford Street, which opened to great
acclaim last June, we recently opened our second Sports Direct flagship store
in Birmingham - further demonstrating the strength of our elevated consumer
experience, and the direction of the Sports Direct brand.
The FLANNELS business continues to perform exceptionally well, and we are
excited about the recent opening of our 120,000 sq. ft. FLANNELS flagship
store in Liverpool. The store is our largest store opening to date and saw an
impressive investment of approx. £30m from the business. Our expansion plans
for FLANNELS are crucial to the on-going success of the luxury side of the
business, and through our new brand vision; to become the leading destination
for new luxury, we're delighted to be expanding into new markets, and new
locations throughout the UK and Europe, including the expansion into Ireland
with openings planned for Dublin, Blanchardstown and Cork.
Acquisitions
We continue to see opportunities that strengthen Frasers Group's brand
proposition and our recent acquisitions of Studio Retail Limited (with its
significant knowledge and experience in consumer credit) and Missguided (with
its focus on Womenswear and its digital platforms) are examples of our drive
to expand and acquire businesses and brands that can strengthen the Group, and
connection to our consumers.
Operations
We are continually developing our automation capabilities in our Shirebrook
distribution facility, including the launch of a Dematic Shuttle machine which
covers a floor plate of 200,000 sq. ft and increasing the size of our Auto
store facility which was already the biggest in Europe. In the second half of
the financial year, we completed the purchase of land in Bitburg, Germany
where we have plans for a significant distribution centre which will service
mainland Europe from both a store and digital perspective.
Our People
Our people are the key asset to the business.
Under Michael Murray's leadership, the management team has been strengthened.
The business has created several new roles including the additions of a
Managing Director of Sports, Ger Wright (formerly a Nike Executive) and a
Managing Director of Luxury and Premium, David Epstein. Alongside the
management team, we will look to support the business by adding relevant
talent and expertise to the Board when appropriate.
This year the Group will receive its third annual intake of highly talented
individuals into the Elevation Programme. The programme is aimed at high
potential graduates seeking a career in commercial management, and we have
twenty-seven young, ambitious new joiners will start in September. Over the
past three years, we have been monitoring the success and benefits of the
Elevation Programme and are pleased to confirm that we will be rolling out the
scheme across our finance department, also starting this September.
Refinancing
In our Half Year reporting we noted the successful refinance of our Group
facility whereby we have access to a combined term loan and revolving credit
facility (RCF) of £930.0m for a period of 3 years, with the possibility to
extend this by a further 2 years. This facility has increased in size to
£980.0m since then. We believe this is a great endorsement for the business
and our Elevation strategy and I want to say thank you to our banking partners
for their support.
Outlook
Under Michael Murray's direction and leadership, we are confident the Group is
well positioned for a successful year ahead.
Relationships with our key brand partners are better than they have ever been,
and we will continue to invest into supporting and growing these
relationships.
The business cannot overlook the many significant economic factors which are
headwinds on the business, including challenges with supply chain and the
increased cost of living - these factors could have an impact on business
potential.
However, we look forward to growing the business both organically and through
acquisitions to ensure we remain a market leader globally. We believe the
growth factors will mitigate these headwinds and we will be looking to grow
our Adjusted PBT to between £450m and £500m in FY23.
Dividend and Share Buybacks
No final dividend will be payable in relation to FY22.
Our share buyback programme has continued which is a demonstration of our
commitment to shareholder returns, our confidence in the Company and the
strategy for future growth.
David Daly
Non-Executive Chair of the Board
REVIEW BY BUSINESS SEGMENT (excluding Studio Retail Limited)
UK SPORTS RETAIL
UK Sports Retail includes all of the Group's sports retail and USC store
operations in the UK (including Northern Ireland), all of the Group's sports
online businesses (excluding Bob's Stores, Eastern Mountain Sports, Baltics
and Malaysia), the Group's gyms, Evans Cycles, GAME UK stores and online
operations and the Group's Shirebrook campus operations. UK Sports Retail is
the main driver of the Group and accounts for 54.4% of Group revenue.
52 weeks ended 52 weeks ended
24 April 2022 25 April 2021
(unaudited) (audited)
Revenue 2,581.7 1,968.5
Cost of Sales (1,459.2) (1,139.2)
Gross Profit 1,122.5 829.3
Gross Margin % 43.5 42.1
Adjusted PBT 201.8 (12.8)
Revenue increased 31.2% to £2,581.7m. Excluding acquisitions revenue grew
30.1%. This was largely due to the strong reopening of stores after the last
lockdown in March 2021, and the prior period comparative including Covid-19
related lockdowns.
Gross margin increased to 43.5%, largely due to the year on year growth within
Sports Direct which has a higher gross margin compared to other fascias (Game
UK) within the segment.
Adjusted PBT for UK Sports Retail increased from a loss of £12.8m in FY21 to
a profit of £201.8m for the period, largely due the strong reopening of
stores after lockdown, the comparative period being impacted by lockdowns as a
result of Covid-19 and more significant property related impairments in the
comparative period (FY22: £103.4m compared to FY21: £201.9m).
UK SPORTS RETAIL STORE PORTFOLIO ((3))
24 April 2022 25 April 2021
England 387 394
Scotland 37 39
Wales 30 31
Northern Ireland 19 21
Isle of Man 1 1
GAME UK ((1)) 259 247
Evans Cycles ((2)) 57 48
USC 18 25
Total 808 806
Opened 90 93
Closed (88) (98)
Acquired - 42
Area (sq.ft.) approx. 6.7m approx. 6.8m
(1) The GAME UK store numbers include 125 concessions operating
within Sports Direct fascia stores (FY21: 71) and does not include BELONG
arenas.
(2) The Evans Cycles store numbers include 2 concessions operating
within House of Fraser fascia stores (FY21: 1).
(3) Table excludes the Group's standalone gyms.
( )
PREMIUM LIFESTYLE
Premium Lifestyle consists of FLANNELS, Cruise, van mildert, House of Fraser,
Jack Wills and Sofa.com fascia stores and corresponding web sales.
52 weeks ended 52 weeks ended
24 April 2022 25 April 2021
(unaudited) (audited)
Gross Transaction Value (GTV) ((1)) 1,133.8 788.1
Revenue 1,056.6 735.6
Cost of Sales (581.8) (405.3)
Gross Profit 474.8 330.3
Gross Margin % 44.9 44.9
Adjusted PBT 10.5 (7.8)
(1) GTV being gross sales net of VAT, discounts and returns, and
gross sales where the Group acts as agent.
Revenue grew 43.6% to £1,056.6m. This was largely due to new FLANNELS stores,
continued growth in online, growth in House of Fraser, and the impact of
Covid-19 related lockdowns on the prior period comparative.
Gross margin was 44.9% consistent with the prior year as product margins were
maintained over the period.
It should be noted that despite year on year trading improvements in the House
of Fraser business, business rates in their current form continue to be a
significant and disproportionate cost to House of Fraser.
Adjusted PBT for Premium Lifestyle increased from a loss of £7.8m in FY21 to
a profit of £10.5m for the period, largely due to new FLANNELS stores,
continued growth in online, the strong reopening of stores after the last
lockdown in March 2021, mitigated by more significant property related
impairments in the current period (FY22: £103.5m compared to FY21: £40.9m).
PREMIUM LIFESTYLE STORE PORTFOLIO
24 April 2022 25 April 2021
FLANNELS 53 41
Jack Wills 52 60
House of Fraser / Frasers 39 43
Sofa.com ((1)) 23 24
Cruise 5 5
18 Montrose 4 3
Van Mildert 1 1
Garment Quarter 1 1
Psyche 1 1
Total 179 179
Opened 21 12
Closed (21) (17)
Acquired - 5
Area (sq.ft.) approx. 4.0m approx. 4.2m
(1) Sofa.com store numbers include 17 concessions operating within
House Of Fraser fascia stores (FY21: 17).
(2) Jack Wills and Frasers stores in Republic of Ireland are shown
in the European store numbers opposed to the Premium Lifestyle store numbers.
EUROPEAN RETAIL
The European Retail division includes the Group's sports retail store
management and operations in Europe, including the Group's European
distribution centres in Belgium and Austria, stores and corresponding web
business in the Baltic regions and GAME Spain stores and corresponding web
business.
52 weeks ended 52 weeks ended
24 April 2022 25 April 2021
(unaudited) (audited)
Revenue 790.2 615.2
Cost of Sales (452.9) (375.5)
Gross Profit 337.3 239.7
Gross Margin % 42.7 39.0
Adjusted PBT 88.6 (51.3)
Revenue increased 28.4% to £790.2m. On a currency neutral basis and excluding
acquisitions, European Retail revenue increased by 33.4% largely due to
temporary store closures as a result of Covid-19 in the prior period
comparative.
Gross margin increased to 42.7% largely due to continually improving product
mix in the core business.
Adjusted PBT for European Retail improved from a loss of £51.3m in FY21 to a
profit of £88.6m for the period, largely due the strong reopening of stores
after lockdown and the comparative period being impacted by lockdowns as a
result of Covid-19, especially in Ireland.
All of the following stores are operated by companies wholly owned by the
Group, except Estonia, Latvia and Lithuania where the Group owns 60.0%.
EUROPEAN RETAIL STORE PORTFOLIO ((1))
24 April 2022 25 April 2021
GAME Spain 235 236
Republic of Ireland(2) 43 39
Belgium 34 34
Portugal 21 20
Estonia(1) 20 21
Austria 19 20
Lithuania(1) 19 18
Latvia(1) 18 17
Poland 13 14
Slovenia 13 13
Czech Republic 12 12
Spain 10 9
Hungary 8 8
Cyprus 6 6
Holland 5 5
Slovakia 5 5
France 4 4
Luxembourg 2 2
Germany 1 2
Iceland 1 1
Total 489 486
Opened 12 13
Closed (9) (38)
Acquired - -
Area (sq.ft.) approx. 3.7m approx. 3.6m
(1) Includes only stores with SPORTSDIRECT.com and SPORTLAND
fascias.
(2) Excluding Heatons fascia stores.
REST OF WORLD RETAIL
Rest of World Retail includes sports stores in Malaysia trading under the
Sports Direct fascia, retail stores in the US trading under Bob's Stores and
Eastern Mountain Sports and their online businesses. In Malaysia the stores
are 51.0% owned by the Group.
52 weeks ended 52 weeks ended
24 April 2022 25 April 2021
(unaudited) (audited)
Revenue 150.3 152.7
Cost of Sales (73.6) (88.7)
Gross Profit 76.7 64.0
Gross Margin % 51.0 41.9
Adjusted PBT 32.7 12.2
Revenue decreased 1.6% to £150.3m mostly due to the US businesses offset by
an increase in Malaysia. Gross margin increased to 51.0% from 41.9%, largely
due to decreased inventory provisions within the US businesses as inventory
management was significantly improved. Adjusted PBT was £32.7m, compared to
£12.2m in FY21, largely due to overall operating efficiencies in the US
businesses.
REST OF WORLD RETAIL STORE PORTFOLIO
24 April 2022 25 April 2021
Malaysia 34 33
Bob's Stores 21 22
Eastern Mountain Sports 21 21
Total 76 76
Area (sq.ft.) approx. 1.3m approx. 1.3m
WHOLESALE & LICENSING
The portfolio of Group brands includes a wide variety of world-famous sport
and lifestyle brands. 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. The Wholesale &
Licensing division continues to sponsor a variety of prestigious events and
retains a variety of globally recognised celebrities and sporting
professionals as brand ambassadors.
52 weeks ended 52 weeks ended
24 April 2022 25 April 2021
(unaudited) (audited)
Wholesale 145.3 131.5
Licensing 22.8 21.8
Total Revenue 168.1 153.3
Cost of Sales (105.0) (85.8)
Gross Profit 63.1 67.5
Gross Margin % 37.5 44.0
Adjusted PBT 11.2 19.8
Revenue increased by 9.7% to £168.1m. Wholesale revenues are up 10.5% to
£145.3m and Licensing revenues increased 4.6% to £22.8m, largely due to the
prior period comparative being impacted by Covid-19.
Total gross margin decreased to 37.5% (FY21: 44.0%) largely due to product mix
within the US wholesale division.
Adjusted PBT decreased 43.4% to £11.2m (FY21: £19.8m) largely due to
impairment of Goodwill in the period.
PROPERTY REVIEW
The beginning of the financial year welcomed the opening of the refurbished
Sports Direct on Oxford Street, London showcasing the elevated store model in
one of Europe's most iconic retailing destinations. Further Sports Direct
flagship locations in the pipeline include Birmingham which opened shortly
after the financial year end and Manchester due to open late FY23.
Opportunities to deliver this flagship concept are also being considered in
various European capital cities. In addition, a refurbishment model has been
trialled and is under development to elevate appropriate stores which are
currently trading.
FLANNELS experienced significant new store activity over the period with 15
new openings. The most notable opening was delivering the first FLANNELS
flagship store in Sheffield incorporating beauty and food & beverage
elements across 55k sqft; the outcome has delivered a world-class luxury
offering receiving industry recognition. A second FLANNELS Flagship store was
also opened in Leicester, Fosse Park over the period. Further flagship sites
have been secured in Liverpool which is now trading along with Cardiff and
Leeds which are both due to open during FY24. Flannels will also be expanding
its store network into Ireland over the coming financial period. These will be
the first store openings outside of the U.K. for the brand having secured
sites in Dublin, Blanchardstown and Cork.
The Group continues to identify large sites, which working with collaborative
Landlords can be configured to provide a multi fascia offering. Over the
period sites have been secured at Derby, Cork and Newbridge in Ireland to
develop into Frasers and Sports Direct stores.
The main objective for the Group's estate remains to be the move to turnover
based rents. There has been significant investment into new store concepts
across all the Group's brands, including more recently the new Everlast Gym
concept as well as enhancements to existing brand concepts such as the Sports
Direct and Flannels Flagship concepts. Where Landlords are prepared to
co-invest in new stores the Group is prepared to enter into long leases.
The Group remains acquisitive across fascias and territories with an exciting
pipeline of new stores due to open in the coming financial year; the number of
new store openings are expected to be comparable to FY22. However, caution is
being applied over shop fit costs which are being monitored closely and could
influence the store opening pipeline. In the usual manner freehold investment
activity will continue to be used as an option to secure space for the Group.
The business rates regime continues to be a challenging landscape to navigate,
particularly on large stores and former department stores. With further
clarity required on the new regime effective April 23 and the uncertainty
around transitional relief arrangements, the Group is taking a cautious view
on future rates liabilities.
INCOME STATEMENT
For the 52 weeks ended 24 April 2022
( )
Unaudited Group Audited Group
(excl. SRL) 52 weeks ended
52 weeks ended
Note 24 April 2022 25 April 2021
(£'m) (£'m)
Revenue 4,746.9 3,625.3
Cost of sales (2,672.5) (2,094.5)
Gross profit 2,074.4 1,530.8
Selling, distribution and administrative expenses (1,569.8) (1,319.0)
Other operating income 47.6 36.8
Property related impairments 1,7 (227.0) (317.0)
Exceptional items (1.3) (1.6)
Profit on sale of properties 10.8 9.7
Operating profit/(loss) 334.7 (60.3)
Investment income 3 69.2 103.7
Investment costs 4 (19.7) (7.7)
Finance income 5 30.3 9.0
Finance cost 6 (48.4) (36.2)
Profit before taxation 366.1 8.5
Taxation (68.8) (86.5)
Profit/(loss) for the period 297.3 (78.0)
ATTRIBUTABLE TO:
Equity holders of the Group 290.2 (83.0)
Non-controlling interests 7.1 5.0
Profit/(loss) for the period 297.3 (78.0)
The Current Period Income Statement is unaudited and has been prepared in line
with our unchanged historic accounting policies and excludes the operations of
SRL which was acquired during the period and does not present the Bob's Stores
and Eastern Mountains Sports disposal as a discontinued operation.
BALANCE SHEET
At 24 April 2022
Note Unaudited Group Audited Group
(excl. SRL) 25 April 2021
24 April 2022
(£'m) (£'m)
ASSETS - NON-CURRENT
Property, plant and equipment 7 991.9 1,164.9
Investment properties 89.2 14.1
Intangible assets 115.8 120.5
Long-term financial assets 206.6 263.3
Deferred tax assets 76.3 66.8
1,479.8 1,629.6
ASSETS - CURRENT
Inventories 1,254.1 1,096.6
Trade and other receivables 773.1 546.5
Derivative financial assets 116.5 55.4
Cash and cash equivalents 292.7 457.0
2,436.4 2,155.5
TOTAL ASSETS 3,916.2 3,785.1
EQUITY
Share capital 64.1 64.1
Share premium 874.3 874.3
Treasury shares reserve (488.9) (295.7)
Permanent contribution to capital 0.1 0.1
Capital redemption reserve 8.0 8.0
Foreign currency translation reserve 35.6 28.8
Reverse combination reserve (987.3) (987.3)
Own share reserve (66.8) (66.7)
Hedging reserve 55.3 11.5
Share based payment reserve 14.1 1.3
Retained earnings 1,838.6 1,554.5
Issued capital and reserves attributable to owners of the parent 1,347.1 1,192.9
Non-controlling interests 22.0 18.1
TOTAL EQUITY 1,369.1 1,211.0
LIABILITIES - NON-CURRENT
Lease liabilities 8 492.3 534.2
Borrowings 8 684.3 705.9
Retirement benefit obligations 1.6 1.9
Deferred tax liabilities 37.2 27.0
Provisions 385.1 361.2
1,600.5 1,630.2
LIABILITIES - CURRENT
Derivative financial liabilities 81.8 19.2
Trade and other payables 693.0 646.3
Lease liabilities 8 119.3 188.5
Current tax liabilities 52.5 89.9
946.6 943.9
TOTAL LIABILITIES 2,547.1 2,574.1
TOTAL EQUITY AND LIABILITIES 3,916.2 3,785.1
The Current Period Balance Sheet is unaudited and has been prepared in line
with our unchanged historic accounting policies and excludes the operations of
SRL which was acquired during the period and does not present the Bob's Stores
and Eastern Mountain Sports disposal as a discontinued operation.
CASH FLOW STATEMENT
For the 52 weeks ended 24 April 2022
Unaudited Group Audited Group
(excl. SRL) 52 weeks ended
52 weeks ended
Note 24 April 2022 25 April 2021
(£'m) (£'m)
Cash inflows from operating activities 9 497.7 528.0
Income taxes paid (120.9) (59.3)
Net cash inflows from operating activities 376.8 468.7
Proceeds on disposal of property, plant and equipment and investment property 43.0 20.6
Proceeds on disposal of intangibles assets - 7.5
Proceeds on disposal of listed investments 238.4 55.1
Proceeds in relation to equity derivatives ((3)) 117.4 50.3
Disposal of subsidiary undertaking 1.0 -
Purchase of subsidiaries, net of cash acquired ((1)) (2.5) (39.4)
Purchase of property, plant and equipment ((2)) (323.1) (219.4)
Purchase of intangible assets - (1.0)
Purchase of listed investments (198.4) (113.3)
Investment income received 1.0 0.5
Finance income received 6.3 9.0
Net cash outflows from investing activities (116.9) (230.1)
Lease payments (176.0) (78.0)
Finance costs paid (32.1) (31.6)
Borrowings drawn down 8 1,374.4 1,128.1
Borrowings repaid 8 (1,396.1) (1,323.6)
Dividends paid to non-controlling interests (1.3) (0.9)
Purchase of own shares (193.2) (4.3)
Net cash outflows from financing activities (424.3) (310.3)
Net (decrease) in cash and cash equivalents including overdrafts (164.4) (71.7)
Exchange movement on cash balances 0.1 (5.3)
Cash and cash equivalents including overdrafts at beginning of period 457.0 534.0
Cash and cash equivalents including overdrafts at the period end 292.7 457.0
( )
(1) Excluding SRL.
(2) Includes purchase of investment property.
(3) £50.3m has been recategorised from the 25 April 2021 increase
in payables (which is shown in the cash flow from operating activities note 9)
to proceeds in relation to equity derivatives. This has no impact on net cash.
The Cash Flow is unaudited and has been prepared in line with our unchanged
historic accounting policies, it excludes the operations of Studio Retail
Limited which was acquired during the period and does not present the Bob's
Stores and Eastern Mountain Sports disposal as a discontinued operation.
1. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The critical accounting estimates and judgements made by the Group in
preparing this unaudited trading statement 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:
Key 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. During the period the Group has held greater than 20% of the
voting rights of Studio Retail Group Plc (Studio Retail Limited and certain
assets of Studio Retail Group Plc were acquired out of administration during
the period) and Mulberry Group Plc, whereby management consider that the Group
does not have significant influence over these entities for combinations of
the following reasons:
• The Group does not have any representation on the board of
directors of the investee other than a Frasers Group representative having an
observer role on the board of Studio Retail Group Plc before it was acquired.
Management have reviewed the terms of the observer arrangement and have
concluded that this does not give them the right to participate in or
influence the financial or operating decisions of Studio Retail Group Plc.
Studio Retail Group Plc could terminate this arrangement at any time, and
could determine which parts of the Board meetings the representative could be
present at and what information they were given access to. It should be noted
the Frasers Group representative did not attend any board meetings in full or
part during the reporting period;
• 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
these investee companies;
• There has been no interchange of managerial personnel;
• No non-public essential technical management information is
provided to the investee
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.
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 £60.0m (£21.6m 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.
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 and 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 growth assumptions within them, and are satisfied
that forecasts in 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 taken to the 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, the Hedging reserve of £55.4m (FY21:
£11.5m) would be shown in Finance Income.
Key Estimates
Provision For Obsolete, Slow Moving Or Defective Inventories
The Directors have applied their knowledge and experience of the retail
industry in determining the level and rates of provisioning required in
calculating the appropriate inventory carrying values. Specific estimates and
judgements applied in relation to assessing the level of inventory provisions
required are considered in relation to the following areas:
a. Continuity inventory
b. Seasonal inventory lines - specifically seasons that have now
finished
c. Third party versus own brand inventory
d. Ageing of inventory
e. Sports Retail or Premium Lifestyle
f. Local economic conditions
g. Divisional specific factors
h. Increased cost of inventory and lower margins with the devaluation of
the Pound
i. Over-stock and out of season inventory as a result of
macro-economic factors
Provision estimates are forward looking and are formed using a combination of
factors including historical experience, management's knowledge of the
industry, group discounting, sales pricing protocols and the overall
assessment made by management of the risks in relation to inventory.
Management use a number of internally generated reports to monitor and
continually re-assess the adequacy and accuracy of the inventory provision.
The additional cost of repricing inventory and handling charges in relation to
relocating inventory (tunnelling) are considered in arriving at the
appropriate percentage provision. The assessment involves significant
estimation uncertainty, therefore in order to check that the assumptions
applied remain valid, management produces a range of outcomes and the
provision is set within this range.
Key assumptions used to create the estimates are:
• Discounting - Based on historical experience and managements
anticipated future discounting including the continuing impact of the
pandemic, Brexit, global supply chain challenges and macro-economic factors
• Tunnelling - Cost of handling stock for reworking and repacking
• Repricing - Labour cost associated with repricing units of stock
• Shrinkage - Stock lost through damage and theft
Total Group inventory provision at 24 April 2022 is 15.1% (FY21: 16.6%). A 1%
change in the total provision would impact Adjusted PBT by approx. £14.8m
(FY21: £13.2m). Management do not consider it appropriate to disclose
sensitivities for key assumptions in isolation as in practice changes in one
assumption would lead to an offset in another.
Property Related Provisions
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
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 (FY21: £100,000) for large leasehold stores,
£50,000 (FY21: £50,000) for smaller leasehold stores (£25,000 per store for
Game UK and Game Spain stores) and $/€50,000 (FY21: $/€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.
A 10% increase in dilapidation cost per store would result in an approx.
£8.5m (FY21: £8.0m) reduction in Adjusted PBT.
Other Provisions
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 relate to management's best estimates of
provisions required for legal and regulatory claims and ongoing non-UK tax
enquiries. Other provisions relate to management's best estimates of
provisions required for restructuring, employment and commercial. Where
applicable these are inclusive of any estimated penalties, interest and legal
costs.
In relation to the non-UK tax enquiries management have made a judgement to
consider all claims collectively, applying the following key estimates to the
gross amounts (excluding re-imbursement assets):
• 10% penalty (FY21: 10%). A 5% increase to 15% would result in
approx. £6.5m increase in the provision (FY21: approx. £6.5m).
• 3% interest on the liability (FY21: 3%). A 1% increase to 4%
would result in approx. £14m increase in the provision (FY21: approx.
£11.5m).
Management are satisfied that the judgement to consider all claims
collectively is the only reasonable approach because they are all dependant on
the outcome of a court ruling on the interpretation of the non-UK tax
enquiries. Management are satisfied that with regard to timing a reasonable
range of outcomes are all greater than one year and so are satisfied with
including the provisions as non-current.
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.
IFRS 16
The key areas of judgement in relation to property leases recognised under
IFRS 16 are below:
• 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 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 £115.9m (FY21: £174.9m), being
£76.8m (FY21: £168.2m) against the right-of-use asset (£50.7m UK Sports
Retail segment, £9.5m Premium Lifestyle segment, £15.6m European Retail
segment, and £1.0m Rest of the World Retail segment) and £39.1m (FY21:
£6.7m) against plant and equipment (£28.7m UK Sports Retail segment, £10.4m
Premium Lifestyle segment). The impairments were due to the ongoing challenges
in the retail sector on the forecast cash flows of the CGU, including supply
chain issues and the anticipated cost of living squeeze on customers.
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.
A sensitivity analysis has been performed in respect of sales, margin and the
new store exemption 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 0% (21.8)
Sales decline year 1 10% reduction to 20% 17.9
Existing Gross Margin year 1 >40% 100bps - improvement (4.2)
Existing Gross Margin year 1 >40% 100bps - reduction 2.7
New store exemption ((1)) Change from 1 to 2 years (27.2)
(1) Stores which have been open for less than one year are not
reviewed for impairment.
Freehold Land and Buildings and Long-term leasehold
Freehold land and buildings and long-term leasehold assets are assessed at
each reporting period for 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 £111.1m (FY21: £117.9m) due to
the ongoing challenges in the retail sector on the forecast cash flows of the
CGU. This is split £106.5m against freehold land and buildings (£19.8m UK
Sports Retail segment, £83.4m Premium Lifestyle segment, £2.1m European
Retail segment, and £1.2m Rest of World Retail segment), £2.0m against
long-term leasehold (£2.0m UK Sports Retail segment), £1.6m plant &
equipment (£1.2m UK Sports Retail segment, £0.2m Premium Lifestyle segment,
£0.2m European Retail segment), and £1.0m investment property (all UK Sports
Retail segment).
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 of each individual
CGU, taking into account historic performance of the CGU, and then adjusting
for the Group's current 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.
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 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 and margin 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 0% (16.8)
Sales year 1 10% reduction to 20% 25.5
Existing Gross Margin year 1 >40% 100bps - improvement (5.2)
Existing Gross Margin year 1 >40% 100bps - reduction 6.7
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 in
to 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 · 1 year void, 2 years rent free; or
payable for the unit and rent-free incentive.
· 2 years void, 3 years rent free.
Yield bands - ranging from 5.5% - 14%
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 · 1 year void, 2 years rent free; or
incentive period assumed, the cost amount then deducted from the capital value · 2 years void, 3 years rent free.
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 Yield bands - ranging from 5.5% - 14%
vacant possession this very conservative assumption is in line with both
technical accounting rules and that of our management experts.
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 £5.0m (FY21:
£7.5m).
The total recoverable amount of the assets that were impaired at the period
end was £105.9m, with £47.3m of this being based on their fair value less
costs of disposal and £58.6m being based on their value in use.
2. SEGMENTAL ANALYSIS
The below segmental information excludes SRL. Management has determined to
present its segmental disclosures consistently with the presentation in the
2021 Annual Report.
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, 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, and
retail store operations in Northern Ireland.
ii) Premium Lifestyle - includes the results of the premium retail
businesses FLANNELS, Cruise, van mildert, Jack Wills, House of Fraser and
Sofa.com along with the related websites, and freehold property owning
companies where trading is purely from Premium Lifestyle fascias.
2) European Retail - includes all the Group's sports retail stores,
management and operations in Europe including the Group's European
Distribution Centres in Belgium and Austria, European freehold property owning
companies, as well as GAME Spain stores and Baltics online.
3) Rest of World Retail - includes the results of US based retail
activities, Asia based retail activities along with their e-commerce
offerings.
4) Wholesale & Licensing - includes the results of the Group's
portfolio of internationally recognised brands such as Everlast, Karrimor, and
Slazenger.
The FY21 numbers have been re-categorised due to changes in the reporting
segments, with freehold property owning companies where trading is purely from
Premium Lifestyle fascias being moved from UK Sports Retail to Premium
Lifestyle.
Segmental information for the 52 weeks ended 24 April 2022 (unaudited):
UK Sports Retail Premium Lifestyle UK Retail Total European Retail Rest of World Retail Total Wholesale & Licensing Eliminations Group
Retail Total
(£m) (£m) (£m) (£m) (£m) (£m) (£m) (£m) (£m)
Sales to external customers 2,581.7 1,056.6 3,638.3 790.2 150.3 4,578.8 168.1 - 4,746.9
Sales to other segments - - - - - - 80.1 (80.1) -
Revenue 2,581.7 1,056.6 3,638.3 790.2 150.3 4,578.8 248.2 (80.1) 4,746.9
Gross profit 1,122.5 474.8 1,597.3 337.3 76.7 2,011.3 63.1 - 2,074.4
Operating profit before foreign exchange, exceptional items and property and 293.5 124.1 417.6 109.8 34.4 561.8 6.9 - 568.7
other related impairments
Exceptional items (1.3) - (1.3) - - (1.3) - - (1.3)
Property related impairments (103.4) (103.5) (206.9) (17.9) (2.2) (227.0) - - (227.0)
Realised foreign exchange loss (1.0) (0.1) (1.1) (2.9) (0.8) (4.8) (0.9) - (5.7)
Operating profit 187.8 20.5 208.3 89.0 31.4 328.7 6.0 - 334.7
Investment income 69.2 - 69.2 - - 69.2 - - 69.2
Investment costs (19.7) - (19.7) - - (19.7) - - (19.7)
Finance income (1) 36.8 (8.5) 28.3 1.0 1.0 30.3 - - 30.3
Finance costs (42.0) (1.5) (43.5) (4.4) (0.5) (48.4) - - (48.4)
Profit before taxation 232.1 10.5 242.6 85.6 31.9 360.1 6.0 - 366.1
Taxation (68.8)
Profit for the period 297.3
Total assets 3,768.6 1,003.5 4,772.1 497.3 86.3 5,355.7 330.9 (1,770.4) 3,916.2
Total liabilities (2,451.6) (1,098.9) (3,550.5) (681.4) 7.6 (4,224.3) (93.4) 1,770.6 (2,547.1)
Tangible asset additions 228.1 63.6 291.7 29.4 1.3 322.4 0.8 - 323.2
Right-of-use asset additions 27.8 25.0 52.8 43.0 4.7 100.5 0.4 - 100.9
Intangible assets acquired 1.3 - 1.3 - - 1.3 - - 1.3
(1) Includes inter-company related finance income in UK Sports
Retail and the equivalent finance cost in Premium Lifestyle that eliminates on
consolidation.
Other segment items included in the income statement for the 52 weeks ended 24
April 2022 (unaudited):
(2)
UK Sports Premium Lifestyle UK Retail Total European Retail Rest of World Retail Total Retail Wholesale & Licensing Group Total
(£'m) (£'m) (£'m) (£'m) (£'m) (£'m) (£'m) (£'m)
Property, plant & equipment depreciation 121.9 22.9 144.8 20.2 2.4 167.4 1.3 168.7
Property, plant & equipment impairment 51.7 94.0 145.7 2.3 1.2 149.2 - 149.2
IFRS 16 ROU depreciation 47.7 6.4 54.1 19.9 3.1 77.1 0.4 77.5
IFRS 16 ROU impairment 50.7 9.5 60.2 15.6 1.0 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) (9.2) (1.0) (28.3) - (28.3)
Intangible amortisation - - - - - - 6.5 6.5
Intangible impairment 1.3 - 1.3 - - 1.3 4.4 5.7
Segmental information for the 52 weeks ended 25 April 2021((1)) (audited):
UK Sports Retail Premium Lifestyle UK Retail Total European Retail Rest of World Retail Total Wholesale & Licensing Eliminations Group
Retail Total
(£m) (£m) (£m) (£m) (£m) (£m) (£m) (£m) (£m)
Sales to external customers 1,968.5 735.6 2,704.1 615.2 152.7 3,472.0 153.3 - 3,625.3
Sales to other segments - - - - - - 95.4 (95.4) -
Revenue 1,968.5 735.6 2,704.1 615.2 152.7 3,472.0 248.7 (95.4) 3,625.3
Gross profit 829.3 330.3 1,159.6 239.7 64.0 1,463.3 67.5 - 1,530.8
Operating profit before foreign exchange, exceptional items and property and 191.0 34.3 225.3 20.5 18.6 264.4 20.2 - 284.6
other related impairments
Exceptional items 3.1 (1.6) 1.5 (3.1) - (1.6) - - (1.6)
Realised foreign exchange (loss) / gain (20.2) (0.2) (20.4) 0.8 (1.4) (21.0) (5.3) - (26.3)
Property related impairments (201.9) (40.9) (242.8) (71.6) (2.6) (317.0) - - (317.0)
Operating (loss) / profit (28.0) (8.4) (36.4) (53.4) 14.6 (75.2) 14.9 - (60.3)
Investment income 103.7 - 103.7 - - 103.7 - - 103.7
Investment costs (7.7) - (7.7) - - (7.7) - - (7.7)
Finance income 6.5 - 6.5 2.5 - 9.0 - - 9.0
Finance costs (28.1) (1.2) (29.3) (2.7) (3.8) (35.8) (0.4) - (36.2)
Profit before taxation 46.4 (9.6) 36.8 (53.6) 10.8 (6.0) 14.5 - 8.5
Taxation (86.5)
Loss for the period (78.0)
Total assets 3,305.9 668.0 3,973.9 670.8 158.6 4,803.3 344.7 (1,362.9) 3,785.1
Total liabilities (2,357.8) (499.6) (2,857.4) (857.0) (95.1) (3,809.5) (127.5) 1,362.9 (2,574.1)
Tangible asset additions 163.4 33.1 196.5 17.4 3.0 216.9 2.5 - 219.4
Right-of-use asset additions 77.5 14.1 91.6 24.3 2.4 118.3 0.5 - 118.8
Intangible assets acquired 3.7 2.3 6.0 - - 6.0 1.0 - 7.0
(3) The FY21 numbers have been re-categorised due to changes in
the reporting segments, with freehold property owning companies where trading
is purely from Premium Lifestyle fascias being moved from UK Sports Retail to
Premium Lifestyle.
Other segment items included in the income statement for the 52 weeks ended 25
April 2021 (audited):
(4)
UK Sports Premium Lifestyle UK Retail Total European Retail Rest of World Retail Total Retail Wholesale & Licensing Group Total
(£'m) (£'m) (£'m) (£'m) (£'m) (£'m) (£'m) (£'m)
Property, plant & equipment depreciation 131.9 42.3 174.2 35.3 5.7 215.2 1.2 216.4
Property, plant & equipment impairment 87.2 20.4 107.6 40.6 - 148.2 - 148.2
IFRS 16 ROU depreciation 51.5 6.4 57.9 21.9 2.3 82.1 - 82.1
IFRS 16 ROU impairment 114.1 20.5 134.6 31.0 2.6 168.2 - 168.2
Investment property depreciation 1.9 - 1.9 - - 1.9 - 1.9
Investment property impairment 0.6 - 0.6 - - 0.6 - 0.6
IFRS 16 disposal and modification/remeasurement of lease liabilities (20.0) (5.6) (25.6) (1.4) (0.7) (27.7) - (27.7)
Intangible amortisation - - - 0.5 - 0.5 6.6 7.1
Intangible impairment 3.7 2.3 6.0 3.1 - 9.1 - 9.1
The following tables reconciles the Profit Before Tax to the Adjusted PBT as
it is one of the main measures used by the Chief Operating Decision Maker when
reviewing performance:
Reconciliation of Profit Before Tax to Adjusted PBT for the 52 week period
ended 24 April 2022 (unaudited):
UK Sports Retail Premium Lifestyle UK Retail Total European Retail Rest Of World Retail Total Retail Wholesale & Licensing Group Total
(£m) (£m) (£m) (£m) (£m) (£m) (£m) (£m)
Profit Before Tax 232.1 10.4 242.5 85.7 31.9 360.1 6.0 366.1
Exceptional items 1.3 - 1.3 - - 1.3 - 1.3
Fair value adjustment to derivative financial instruments (7.7) - (7.7) - - (7.7) - (7.7)
Fair value (gains)/losses and profit on disposal of equity derivatives (35.3) - (35.3) - - (35.3) - (35.3)
Realised FX loss 1.0 0.1 1.1 2.9 0.8 4.8 1.0 5.8
Share scheme 10.4 - 10.4 - - 10.4 4.2 14.6
Adjusted PBT 201.8 10.5 212.3 88.6 32.7 333.6 11.2 344.8
Reconciliation of Reported PBT to Adjusted PBT for the 52 week period ended 25
April 2021((1)) (audited):
UK Sports Retail Premium Lifestyle UK Retail Total European Retail Rest Of World Retail Total Retail Wholesale & Licensing Group Total
(£m) (£m) (£m) (£m) (£m) (£m) (£m) (£m)
Reported PBT 46.4 (9.6) 36.8 (53.6) 10.8 (6.0) 14.5 8.5
Exceptional items (3.1) 1.6 (1.5) 3.1 - 1.6 - 1.6
Fair value adjustment to derivative financial instruments 4.6 - 4.6 - - 4.6 - 4.6
Fair value (gains)/losses and profit on disposal of equity derivatives (82.2) - (82.2) - - (82.2) - (82.2)
Realised FX loss / (gain) 20.2 0.2 20.4 (0.8) 1.4 21.0 5.3 26.3
Share scheme 1.3 - 1.3 - - 1.3 - 1.3
Adjusted PBT (12.8) (7.8) (20.6) (51.3) 12.2 (59.7) 19.8 (39.9)
(1) The FY21 numbers have been re-categorised due to changes in
the reporting segments, with freehold property owning companies where trading
is purely from Premium Lifestyle fascias being moved from UK Sports Retail to
Premium Lifestyle.
3. INVESTMENT INCOME
(Unaudited) (Audited)
52 weeks ended 52 weeks ended
24 April 2022 25 April 2021
(£'m) (£'m)
Profit on disposal of equity derivatives 23.2 27.4
Premium received on equity derivatives 13.2 13.3
Fair value gain on equity derivatives 31.8 62.5
Dividend income 1.0 0.5
69.2 103.7
The profit on disposal of equity derivatives 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 Hugo Boss options.
4. INVESTMENT COSTS
(Unaudited) (Audited)
52 weeks ended 52 weeks ended
24 April 2022 25 April 2021
(£'m) (£'m)
Fair value loss on equity derivatives 19.7 7.7
19.7 7.7
The fair value loss on equity derivatives in the current period mainly relates
to Hugo Boss contracts for difference.
5. FINANCE INCOME
(Unaudited) (Audited)
52 weeks ended 52 weeks ended
24 April 2022 25 April 2021
(£'m) (£'m)
Bank interest receivable 4.5 3.5
Other finance income 1.8 5.5
Fair value adjustment to derivatives 24.0 -
30.3 9.0
The fair value adjustment to derivatives largely relates to movement in the
fair value of interest rate swaps.
6. FINANCE COSTS
(Unaudited) (Audited)
52 weeks ended 52 weeks ended
24 April 2022 25 April 2021
(£'m) (£'m)
Interest on bank loans and overdrafts 12.9 11.1
Other interest 6.9 8.6
Interest on retirement benefit obligations 0.1 0.1
IFRS 16 lease interest 12.2 11.8
Fair value adjustment to derivatives 16.3 4.6
48.4 36.2
The fair value adjustment to derivatives relates to differences between the
fair value of forward foreign currency contracts and written options that were
not designated for hedge accounting from one period end to the next.
7. PROPERTY, PLANT AND EQUIPMENT
The below table excludes SRL.
Right of use asset (£'m) Freehold Land and Buildings (£'m) Long-term Leasehold (£'m) Short-term Leasehold improvements (£'m) Plant and equipment (£'m) Total (£'m)
COST
At 26 April 2020 (Audited) 524.4 918.9 70.6 131.6 772.6 2,418.1
Acquisitions 2.1 0.5 - - 29.0 31.6
Additions 118.8 84.3 4.3 2.0 128.8 338.2
Eliminated on disposals (48.1) (16.5) (0.7) (6.0) (57.4) (128.7)
Reclassifications / Remeasurements((1)) 76.4 (79.4) 79.2 0.1 8.7 85.0
Exchange differences (4.5) (2.4) (0.1) (0.3) (2.9) (10.2)
At 25 April 2021 (Audited) 669.1 905.4 153.3 127.4 878.8 2,734.0
Acquisitions - - - - - -
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 (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 (Unaudited) 681.0 897.0 155.7 125.1 988.9 2,847.7
ACCUMULATED DEPRECIATION AND IMPAIRMENT
At 26 April 2020 (Audited) (218.7) (153.3) (16.7) (113.9) (567.9) (1,070.5)
Charge for the period (82.1) (74.5) (11.6) (11.5) (118.8) (298.5)
Impairment (168.2) (84.4) (3.9) (0.1) (59.8) (316.4)
Eliminated on disposals 47.5 11.2 0.3 6.7 54.4 120.1
Reclassifications / Remeasurements((1)) - 18.1 (17.9) - (8.8) (8.6)
Exchange differences 2.1 0.2 0.1 0.1 2.3 4.8
At 25 April 2021 (Audited) (419.4) (282.7) (49.7) (118.7) (698.6) (1,569.1)
Charge for the period (77.5) (47.9) (12.4) (3.6) (104.8) (246.2)
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 - 0.6 (0.1) (1.1) 4.0 3.4
Exchange differences 6.0 0.4 0.1 0.2 1.8 8.5
At 24 April 2022 (Unaudited) (491.8) (420.4) (63.0) (121.4) (759.2) (1,855.8)
NET BOOK VALUE
At 24 April 2022 (Unaudited) 189.2 476.6 92.7 3.7 229.7 991.9
At 25 April 2021 (Audited) 249.7 622.7 103.6 8.7 180.2 1,164.9
At 26 April 2020 (Audited) 305.7 765.6 53.9 17.7 204.7 1,347.6
( )
((1)) In FY21 a number of properties were identified that were previously
classified within Freehold Land and Buildings but management believe it to be
more appropriate to classify within Long-term Leasehold. These have therefore
been adjusted in the period as reclassifications.
8. BORROWINGS
(Unaudited) (Audited)
24 April 2022 25 April 2021
(£'m) (£'m)
CURRENT:
Lease liabilities 119.3 188.5
NON-CURRENT:
Bank and other loans 684.3 705.9
Lease liabilities 492.3 534.2
Total 1,295.9 1,428.6
As at period end, Bank and other loans are in sterling and are at a rate of
interest of 2.0% (FY21: 1.3%) over the interbank rate of the country within
which the borrowing entity resides.
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 26 April 2020 (Audited) 1,376.2 147.9 1,524.1
Cash-flows:
- Borrowings drawn down 1,128.1 - 1,128.1
- Borrowings repaid (1,322.2) - (1,322.2)
Lease liability:
- IFRS 16 Lease Liabilities - cash-flows - (78.0) (78.0)
- IFRS 16 Lease Liabilities - modifications/remeasurements, transfers from (40.3) 98.1 57.8
non-current to current, and foreign exchange adjustments
- IFRS 16 Lease Liabilities - new leases 98.3 20.5 118.8
At 25 April 2021 (Audited) 1,240.1 188.5 1,428.6
Cash-flows:
- Borrowings drawn down 1,374.4 - 1,374.4
- Borrowings repaid (1,396.1) - (1,396.1)
Lease liability:
- IFRS 16 Lease Liabilities - cash-flows - (176.0) (176.0)
- IFRS 16 Lease Liabilities - modifications/remeasurements, transfers from (131.3) 95.4 (35.9)
non-current to current, and foreign exchange adjustments
- IFRS 16 Lease Liabilities - new leases 89.5 11.4 100.9
At 24 April 2022 (Unaudited) 1,176.6 119.3 1,295.9
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 increased to £940.0m as at 24 April 2022 and to £980.0m
subsequent to the period end.
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:
(Unaudited) (Audited)
24 April 2022 25 April 2021
(£'m) (£'m)
Borrowings (1,295.9) (1,428.6)
Add back:
- Lease liabilities 611.6 722.7
Cash and cash equivalents 292.7 457.0
Net Debt (391.6) (248.9)
9. CASH FLOW FROM OPERATING ACTIVITIES
(Unaudited) (Audited)
52 weeks ended 52 weeks ended
24 April 2022 25 April 2021
(£m) (£m)
Profit before taxation 366.1 8.5
Net finance costs 18.1 27.2
Net investment income (49.5) (96.0)
Operating profit 334.7 (60.3)
Depreciation of property, plant and equipment 246.2 298.5
Depreciation on investment properties 5.9 1.9
Gain on disposal and modification/remeasurement of lease liabilities (28.3) (27.7)
Amortisation of intangible assets 6.5 7.1
Impairment of tangible and intangible assets and investment properties 232.7 326.1
Profit on disposal of property, plant and equipment (10.8) (9.7)
Profit on disposal of intangibles - (7.5)
Gain on bargain purchase - (3.1)
Share based payment charge in equity (excluding deferred tax) 8.6 -
Operating cash inflow before changes in working capital 795.5 525.3
(Increase) in receivables((1)) (227.2) (136.6)
(Increase) / decrease in inventories (158.2) 99.3
Increase in payables((2)) 63.7 14.6
Increase in provisions 23.9 25.4
Cash inflows from operating activities 497.7 528.0
(1) This includes the
inter-company receivable from SRL.
(2) £50.3m has been
recategorised from the 25 April 2021 increase in payables to proceeds in
relation to equity derivatives, which is shown in the cash flow statement.
This has no impact on net cash.
GLOSSARY
ALTERNATIVE PERFORMANCE MEASURES (excluding SRL)
Excluding acquisitions and currency neutral performance measure
reconciliation:
UK Sports Retail Premium Lifestyle European Retail Rest Of World Retail Wholesale & Licensing Group
Total
Revenue
FY22 Unaudited 2,581.7 1,056.6 790.2 150.3 168.1 4,746.9
Adjustments for acquisitions and currency neutral (31.7) (3.9) - - - (35.6)
FY22 Excluding acquisitions and currency neutral 2,550.0 1,052.7 790.2 150.3 168.1 4,711.3
FY21 Audited 1,968.5 735.6 615.2 152.7 153.3 3,625.3
Adjustments for acquisitions and currency neutral (8.2) (0.8) (23.0) (0.8) (1.7) (34.5)
FY21 Excluding acquisitions and currency neutral 1,960.3 734.8 592.2 151.9 151.6 3,590.8
% Variance 30.1% 43.3% 33.4% (1.1%) 10.9% 31.2%
Adjusted PBT
FY22 Unaudited 201.8 10.5 88.6 32.7 11.2 344.8
Adjustments for acquisitions and currency neutral 27.5 (0.4) - - - 27.1
FY22 Excluding acquisitions and currency neutral 229.3 10.1 88.6 32.7 11.2 371.9
FY21 Audited((1)) (12.8) (7.8) (51.3) 12.2 19.8 (39.9)
Adjustments for acquisitions and currency neutral 15.8 0.2 2.0 (0.1) (0.1) 17.8
FY21 Excluding acquisitions and currency neutral 3.0 (7.6) (49.3) 12.1 19.7 (22.1)
% Variance 7,543.3% 232.9% 279.7% 170.2% (43.1%) 1,782.8%
(1) The FY21 numbers have been re-categorised due to changes in
the reporting segments, with freehold property owning companies where trading
is purely from Premium Lifestyle fascias being moved from UK Sports Retail to
Premium Lifestyle.
Reconciliation of Adjusted PBT performance measure, 5 year record:
52 weeks ended 52 weeks ended 52 weeks ended 26 April 2020 (Audited) 52 weeks ended 28 April 2019 (Audited) 52 weeks ended 29 April 2018 (Audited)
24 April 2022 (Unaudited) 25 April 2021 (Audited)
PBT (£'m) PBT (£'m) PBT (£'m) PBT (£'m) PBT (£'m)
Profit Before Tax 366.1 8.5 143.5 179.2 61.1
Exceptional items 1.3 1.6 13.1 41.0 4.8
Fair value gain on step acquisition - - (20.4) - -
Fair value adjustments to derivatives included within Finance (income) / costs (7.7) 4.6 (21.3) (39.7) 17.7
Fair value (gains) / losses and profit on disposal of equity derivatives (35.3) (82.2) 35.1 (3.3) 103.6
Realised foreign exchange (gain) / loss 5.8 26.3 (34.9) (22.1) (24.1)
Share scheme 14.6 1.3 - - (6.0)
ADJUSTED 344.8 (39.9) 115.1 155.1 157.1
Draft Studio Retail Limited (SRL) Balance Sheet
The significant balances expected to be included within the SRL balance sheet
on 24 April 2022 include Fixed Assets approx. £22m, Inventory approx. £55m,
Trade and other receivables approx. £235m (net of £140m provisions), Cash
and cash equivalents £44m, Bank and other loans £144m and Trade and other
payables approx. £25m.
Note that the balance sheet of SRL is currently going through the period end
audit process and could be subject to material change.
KEY PERFORMANCE INDICATORS
Performance Measure Closest equivalent statutory measure Reconciling items to statutory measure Definition and purpose
Group revenue - - Total revenue for the Group. The Board considers that this measure is a key
indicator of the Group's growth
Adjusted PBT Profit before taxation Adjusting items Adjusted PBT shows how well the Group is managing its trading and operational
efficiency, and its investment in its elevation strategy, and therefore the
(see Glossary reconciliation above) overall performance of the Group
Profit Before Tax - - Profit Before Tax shows how well the Group is managing its trading and
operational efficiency, and its investment in its elevation strategy, and
therefore the overall performance of the Group
Net assets - - Net assets are an indicator of the growth and strength of the Group
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