REG - Sports Direct Intl. - Final Results <Origin Href="QuoteRef">SPD.L</Origin> - Part 2
16/07/2015 15:35
- Part 2: For the preceding part double click ID:nRSP1855Ta
331.1
Realised(loss)/profit on forward foreign exchange contracts (3.7) 1.8
Taxes paid (77.7) (55.7)
Underlying free cash flow 301.8 277.2
Invested in:-
Working capital and other (64.8) (110.1)
Purchase of own shares - -
Acquisitions (including debt) (3.8) (144.2)
Net proceeds from/(purchase of) investments 4.1 (4.6)
Net capital expenditure (79.1) (69.1)
Finance costs and other financing activities (5.9) (7.2)
Decrease / (increase) in net debt 152.3 (58.0)
The increase in working capital is partly to support the growth of Sports
Retail and the online business and partly due to the timing of payments around
year end.
Pensions
The Group operates a number of closed defined benefit schemes in the Dunlop
Slazenger companies. The net deficit in these schemes decreased from £15.4m at
27 April 2014 to £14.9m at 26 April 2015.
Matt Pearson
Acting Chief Financial Officer
16 July 2015
CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 26 APRIL 2015
Year ended Year ended
26 April 27 April
2015 2014
Notes £'000 £'000
Revenue 2 2,832,560 2,705,958
Cost of sales (1,591,748) (1,551,036)
Gross profit 1,240,812 1,154,922
Selling, distribution and administrative expenses (950,526) (908,843)
Other operating income 8,345 8,583
Exceptional items 3 (3,050) (5,531)
Operating profit 2 295,581 249,131
Other investment income 14,104 7,017
Finance income 8,289 891
Finance costs (7,487) (19,853)
Share of profit of associated undertakings and joint ventures 2,959 2,266
Profit before taxation 313,446 239,452
Taxation 4 (72,093) (59,839)
Profit for the period 2 241,353 179,613
Attributable to:
Equity holders of the Group 240,397 180,245
Non-controlling interest 956 (632)
Profit for the period 2 241,353 179,613
Earnings per share attributable to the equity shareholders
Basic earnings per share 5 40.6 30.8
Diluted earnings per share 5 39.0 29.2
Underlying basic earnings per share 5 38.9 32.1
Underlying basic earnings per share
5
38.9
32.1
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 26 APRIL
2015
Year ended Year ended
26 April 27 April
2015 2014
Notes £'000 £'000
Profit for the period 2 241,353 179,613
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Actuarial (losses) / gains on defined benefit pension schemes (2,493) 3,860
Taxation on items recognised in other comprehensive income 524 (698)
Items that will be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations 9,156 (33,118)
Exchange differences on hedged contracts- recognised in the period 77,181 (3,737)
Exchange differences on hedged contracts - reclassified and reported in net profit 7,240 (17,909)
Fair value adjustment in respect of available-for-sale financial assets 21,893 57,373
Taxation on items recognised in other comprehensive income (17,728) (4,170)
Other comprehensive income for the period, net of tax 95,773 1,601
Total comprehensive income for the period 337,126 181,214
Attributable to:
Equity holders of the Group 336,170 181,846
Non-controlling interest 956 (632)
337,126 181,214
CONSOLIDATED BALANCE SHEET AS AT 26 APRIL 2015
ASSETS
Non-current assets
Property, plant and equipment 422,742 412,361
Intangible assets 255,364 255,109
Investments in associated undertakings and joint ventures 38,133 41,763
Available-for-sale financial assets 140,795 116,504
Deferred tax assets 38,352 31,130
895,386 856,867
Current assets
Inventories 517,054 565,479
Trade and other receivables 190,726 123,014
Derivative financial assets 92,199 4,355
Cash and cash equivalents 78,318 151,024
878,297 843,872
TOTAL ASSETS 1,773,683 1,700,739
EQUITY AND LIABILITIES
Share capital 64,060 64,060
Share premium 874,300 874,300
Treasury shares reserve (56,234) (56,234)
Permanent contribution to capital 50 50
Capital redemption reserve 8,005 8,005
Foreign currency translation reserve 14,436 5,280
Reverse combination reserve (987,312) (987,312)
Own share reserve (13,251) (13,251)
Hedging reserve 78,796 (5,625)
Retained earnings 1,181,511 931,819
1,164,361 821,092
Non-controlling interests (2,810) (3,538)
Total equity 1,161,551 817,554
Non-current liabilities
Borrowings 6 136,849 6,764
Retirement benefit obligations 14,869 15,350
Deferred tax liabilities 40,088 24,046
Provisions 37,705 37,780
229,511 83,940
Current liabilities
Derivative financial liabilities 5,629 18,665
Trade and other payables 340,936 392,019
Borrowings 6 1,204 356,226
Current tax liabilities 34,852 32,335
382,621 799,245
Total liabilities 612,132 883,185
TOTAL EQUITY AND LIABILITIES 1,773,683 1,700,739
TOTAL EQUITY AND LIABILITIES
1,773,683
1,700,739
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 26 APRIL 2015
Year Year
ended ended
26 April 27 April
2015 2014
Notes £'000 £'000
Cash inflow from operating activities 7 314,362 222,785
Income taxes paid (77,710) (55,730)
Net cash inflow from operating activities 236,952 167,055
Cash flow from investing activities
Proceeds on disposal of property, plant and equipment 21,150 -
Proceeds on disposal of listed investments 51,695 49,394
Purchase of associate, net of cash acquired (50) (8,000)
Purchase of subsidiaries, net of cash acquired (3,847) (15,407)
Purchase of intangible assets (2,937) (1,827)
Purchase of property, plant and equipment (97,342) (67,304)
Purchase of listed investments (50,415) (55,467)
Investment income received 2,883 1,604
Finance income received 987 891
Net cash outflow from investing activities (77,876) (96,116)
Cash flow from financing activities
Finance costs paid (6,845) (8,111)
Borrowings drawn down 126,989 300,910
Borrowings repaid (346,997) (348,452)
Exercise of option over non-controlling interests - (11,678)
Net cash outflow from financing activities (226,853) (67,331)
Net increase in cash and cash equivalents including overdrafts (67,777) 3,608
Cash and cash equivalents including overdrafts at beginning of period 145,282 141,674
Cash and cash equivalents including overdrafts at the period end 77,505 145,282
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 26 APRIL 2015
Treasury shares Foreign currency translation Own share reserve Retained earnings Other reserves Sub-total Non-controlling interests Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 28 April 2013 (56,234) 38,398 (64,375) 752,018 (24,876) 644,931 (254) 644,677
Vesting of share - based payments - - 51,124 (51,124) - - - -
Current tax on share schemes - - - 25,500 - 25,500 - 25,500
Deferred tax on share schemes - - - (11,215) - (11,215) - (11,215)
Non-controlling interests - acquisitions - - - - - - (10,513) (10,513)
Exercise of option over non-controlling interest - - - (19,970) - (19,970) 7,861 (12,109)
Transactions with owners - - 51,124 (56,809) - (5,685) (2,652) (8,337)
Profit for the financial period - - - 180,245 - 180,245 (632) 179,613
Other comprehensive income
Cash flow hedges
- recognised in the period - - - - (3,737) (3,737) - (3,737)
- reclassified and reported in net profit - - - - (17,909) (17,909) - (17,909)
Actuarial losses on defined benefit pension schemes - - - 3,860 - 3,860 - 3,860
Fair value adjustment in respect of available-for-sale financial assets - - - 57,373 - 57,373 - 57,373
Taxation (4,868) (4,868) (4,868)
Translation differences - Group - (32,498) - - - (32,498) - (32,498)
Translation differences - associates - (620) - - - (620) - (620)
Total comprehensive income for the period - (33,118) - 236,610 (21,646) 181,846 (632) 181,214
At 27 April 2014 (56,234) 5,280 (13,251) 931,819 (46,522) 821,092 (3,538) 817,554
Credit to equity for Share-based payment - - - 5,833 - 5,833 - 5,833
Deferred tax on share schemes - - - 1,266 - 1,266 - 1,266
Non-controlling interests - acquisitions - - - - - - 384 384
Transactions with owners - - - 7,099 - 7,099 384 7,483
Profit for the financial period - - - 240,397 - 240,397 956 241,353
Dividends received - - - - - - (612) (612)
Other comprehensive income
Cash flow hedges
- recognised in the period - - - - 77,181 77,181 - 77,181
- reclassified and reported in net profit - - - - 7,240 7,240 - 7,240
Actuarial losses on defined benefit pension schemes - - - (2,493) - (2,493) - (2,493)
Fair value adjustment in respect of available-for-sale financial assets - - - 21,893 - 21,893 - 21,893
Taxation (17,204) (17,204) (17,204)
Translation differences - Group - 13,783 - - - 13,783 - 13,783
Translation differences - associates - (4,627) - - - (4,627) - (4,627)
Total comprehensive income for the period - 9,156 - 242,593 84,421 336,170 344 336,514
At 26 April 2015 (56,234) 14,436 (13,251) 1,181,511 37,899 1,164,361 (2,810) 1,161,551
1. Accounting policies
The financial information, which comprises the consolidated income statement,
consolidated statement of comprehensive income, consolidated balance sheet,
consolidated cash flow statement, consolidated statement of changes in equity
and related notes, does not constitute full accounts within the meaning of
s435 (1) and (2) of the Companies Act 2006. The auditors have reported on the
Group's statutory accounts for the each of the years ended 26 April 2015 and
27 April 2014 which do not contain any statement under s498 of the Companies
Act 2006 and are unqualified. The statutory accounts for the year ended 27
April 2014 have been delivered to the Registrar of Companies and the statutory
accounts for the year ended 26 April 2015 will be filed with the registrar in
due course.
The consolidated financial statements have been prepared in accordance with
IFRS as adopted for use in the European Union (including International
Accounting Standards ("IAS") and International Financial Reporting Standards
Interpretations Committee ("IFRSiC") interpretations) and with those parts of
the Companies Act 2006 applicable to companies reporting under IFRS as adopted
for use in the European Union. The consolidated financial statements have been
prepared under the historical cost convention, as modified to include fair
valuation of certain financial assets and derivative financial instruments.
2. Segmental analysis
IFRS 8 - 'Operating Segments' requires the Group's segments to be identified
on the basis of internal reports about components of the Group that are
regularly reviewed by the Chief Operating Decision Maker to assess performance
and allocate resources across each operating segment.
The Chief Operating Decision Maker has been identified as the Executive
Directors and the operating segments are identified as the store fascia or
brand, in line with the internal reporting to the Executive Directors.
Sales and gross profit for each operating segment, as well as underlying
EBITDA, are the main measures used by the Executive Directors to assess
performance.
In accordance with paragraph 12 of IFRS 8 the Group's operating segments have
been aggregated into the following reportable segments:
• Sports Retail - includes the results of the UK and International retail
network of sports stores along with related websites;
• Premium Lifestyle - includes the results of the premium retail businesses
such as Republic, Cruise and USC; and
• Brands - includes the results of the Group's portfolio of internationally
recognised brands such as Everlast, Lonsdale and Dunlop.
Information regarding the Group's reportable segments for the year ended 26
April 2015, as well as a reconciliation of reported profit for the period to
underlying EBITDA, is presented below:
Segmental information for the year ended 26 April 2015:
Retail Brands Eliminations Total
Sports Retail Premium Lifestyle Retail Total Total
£'000 £'000 £'000 £'000 £'000 £'000
Sales to external customers 2,398,547 207,623 2,606,170 226,390 - 2,832,560
Sales to other segments - - - 25,480 (25,480) -
Revenue 2,398,547 207,623 2,606,170 251,870 (25,480) 2,832,560
Gross profit 1,069,088 80,523 1,149,611 91,201 - 1,240,812
Operating profit before foreign exchange and exceptional items 285,534 (11,170) 274,364 27,984 ` 302,348
Operating profit 283,347 (11,278) 272,069 23,512 - 295,581
Investment income 14,104
Finance income 8,289
Finance costs (7,487)
Share of profits of associated undertakings and joint ventures 2,959
Profit before taxation 313,446
Taxation (72,093)
Profit for the period 241,353
Sales to other segments are priced at cost plus a 10% mark-up.
Other segment items included in the income statement for the year ended 26
April 2015:
Retail Brands Total
Sports Retail Premium Lifestyle Total Brands Total
£'000 £'000 £'000 £'000 £'000
Depreciation 57,855 2,543 60,398 2,026 62,424
Amortisation 548 687 1,235 4,122 5,357
Information regarding segment assets and liabilities as at 26 April 2015 and
capital expenditure for the year then ended:
Investments in associated undertakings and joint venture 38,133 - - - 38,133
Other assets 1,688,779 24,446 190,772 (168,447) 1,735,550
Total assets 1,726,912 24,446 190,772 (168,447) 1,773,683
Total liabilities (646,836) (60,255) (73,488) 168,447 (612,132)
Tangible asset additions 93,429 2,321 1,592 - 97,342
Intangible asset additions 108 - 2,829 - 2,937
Total capital expenditure 93,537 2,321 4,421 - 100,279
1,592
-
97,342
Intangible asset additions
108
-
2,829
-
2,937
Total capital expenditure
93,537
2,321
4,421
-
100,279
Segmental information for the year ended 27 April 2014:
Retail Brands Eliminations Total
Sports Retail Premium Lifestyle Retail Total Total
£'000 £'000 £'000 £'000 £'000 £'000
Sales to external customers 2,274,365 214,066 2,488,431 217,527 - 2,705,958
Sales to other segments 203 - 203 29,938 (30,141) -
Revenue 2,274,568 214,066 2,488,634 247,465 (30,141) 2,705,958
Gross profit 974,952 86,263 1,061,215 93,707 - 1,154,922
Operating profit before foreign exchange and exceptional items 254,736 (25,729) 229,007 23,825 - 252,832
Operating profit 251,762 (25,588) 226,174 22,957 - 249,131
Investment income 7,017
Finance income 891
Finance costs (19,853)
Share of profits of associated undertakings and joint ventures 2,266
Profit before taxation 239,452
Taxation (59,839)
Profit for the period 179,613
Sales to other segments are priced at cost plus a 10% mark-up.
Other segment items included in the income statement for the year ended 27
April 2014:
Retail Brands Total
Sports Retail Premium Lifestyle Total Brands Total
£'000 £'000 £'000 £'000 £'000
Depreciation 50,549 4,689 55,238 1,725 56,963
Amortisation 1,348 687 2,035 4,797 6,832
Impairment - - - 284 284
Information regarding segment assets and liabilities as at 27 April 2014 and
capital expenditure for the year then ended:
Investments in associated undertakings and joint venture 42,176 - (413) - 41,763
Other assets 1,609,024 96,601 183,103 (229,752) 1,658,976
Total assets 1,651,200 96,601 182,690 (229,752) 1,700,739
Total liabilities (893,269) (123,554) (96,114) 229,752 (883,185)
Tangible asset additions 57,365 6,978 2,961 - 67,304
Intangible asset additions 259 - 1,568 - 1,827
Total capital expenditure 57,624 6,978 4,529 - 69,131
2,961
-
67,304
Intangible asset additions
259
-
1,568
-
1,827
Total capital expenditure
57,624
6,978
4,529
-
69,131
Geographic information
Segmental information for the Year ended 26 April 2015:
UK Non-UK Eliminations Total
£'000 £'000 £'000 £'000
Segmental revenue from external customers 2,252,360 580,200 - 2,832,560
Total capital expenditure 81,793 18,486 - 100,279
Segmental assets 1,564,864 377,266 (168,447) 1,773,683
Segmental information for the Year ended 27 April 2014:
UK Non-UK Eliminations Total
£'000 £'000 £'000 £'000
Segmental revenue from external customers 2,063,724 642,234 - 2,705,958
Total capital expenditure 51,525 17,606 - 69,131
Segmental assets 1,526,405 404,086 (229,752) 1,700,739
The following table reconciles the reported operating profit to the underlying
EBITDA as it is one of the main measures used by the chief operating decision
maker when reviewing performance:
Reconciliation of operating profit to underlying EBITDA for the Year ending 26
April 2015.
Sports Retail Premium Lifestyle Brands Total
£'000 £'000 £'000 £'000
Operating profit 283,347 (11,278) 23,512 295,581
Depreciation 57,855 2,543 2,026 62,424
Amortisation 548 687 4,122 5,357
Share of profit/(loss) of associated undertakings 3,009 - (50) 2,959
Reported 344,759 (8,048) 29,610 366,321
Charges for the Share Schemes 10,110 - - 10,110
Exceptional items (3,395) - 6,445 3,050
Realised FX Loss/(Gain) 5,332 358 (1,973) 3,717
Underlying EBITDA 356,806 (7,690) 34,082 383,198
Reconciliation of operating profit to underlying EBITDA for the Year ending 27
April 2014.
Sports Retail Premium Lifestyle Brands Total
£'000 £'000 £'000 £'000
Operating profit 251,762 (25,588) 22,957 249,131
Depreciation 50,549 4,689 1,725 56,963
Impairment - - 284 284
Amortisation 1,348 687 4,797 6,832
Share of profit/(loss) of associated undertakings 2,679 - (413) 2,266
Reported 306,338 (20,212) 29,350 315,476
Charges for the Share Schemes 11,927 - - 11,927
Exceptional items 5,531 - - 5,531
Realised FX (Gain)/ Loss (2,557) (141) 868 (1,830)
Underlying EBITDA 321,239 (20,353) 30,218 331,104
3. Exceptional items
Profit on sale of freehold property 10,288 -
Impairment and accelerated depreciation and amortisation (13,338) (5,531)
(3,050) (5,531)
- -
(3,050)
(5,531)
-
-
The impairment and accelerated depreciation and amortisation relates to a
change in the estimated useful life of certain tangible and intangible assets
and impairment against goodwill in the year.
4. Taxation
The effective tax rate on profit before tax for FY15 was 23.0% (FY14: 25.0%).
This rate reflects depreciation on non-qualifying assets and overseas earnings
being taxed at a higher rate.
5. 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,
592,294,371 (2014: 585,513,537), is adjusted to assume conversion of all
dilutive potential ordinary shares under the Group's share schemes, being
24,200,000 (2014: 32,676,278), to give the diluted weighted average number of
shares of 616,494,371 (2014: 618,189,815).
Basic and diluted earnings per share
Basic £'000 Diluted £'000 Basic £'000 Diluted £'000
Profit for the period 240,397 240,397 180,245 180,245
Number in thousands Number in thousands
Weighted average number of shares 592,294 616,494 585,514 618,190
Pence per share Pence per share
Earnings per share 40.6 39.0 30.8 29.2
Earnings per share
40.6
39.0
30.8
29.2
Underlying earnings per share
The underlying earnings per share reflects the underlying performance of the
business compared with the prior year and is calculated by dividing underlying
earnings by the weighted average number of shares for the period. Underlying
earnings is used by management as a measure of profitability within the Group.
Underlying 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.
The directors believe that the underlying earnings before exceptional items
and underlying 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.
Underlying earnings is not a recognised profit measure under IFRS and may not
be directly comparable with "adjusted" profit measures used by other
companies.
Basic £'000 Diluted £'000 Basic £'000 Diluted £'000
Profit for the period 240,397 240,397 180,245 180,245
Post tax adjustments to profit for the period for the following non-trading items:
Realised loss / (gain) on forward exchange contracts 2,862 2,862 (1,373) (1,373)
Fair value adjustment to derivative financial instruments (12,472) (12,472) 8,395 8,395
(Profit on disposal of listed investments (2,832) (2,832) (4,060) (4,060)
Profit on sale of intangible assets - - - -
Profit on disposal of property (7,921) (7,921)
Impairment and accelerated depreciation and amortisation 10,270 10,270 4,432 4,432
Underlying profit for the period 230,304 230,304 187,639 187,639
Number in thousands Number in thousands
Weighted average number of shares 592,294 616,494 585,514 618,190
Pence per share Pence per share
Earnings per share 38.9 37.4 32.1 30.3
32.1
30.3
6. Borrowings
Non-current:
Bank and other loans 136,849 6,764
136,849 6,764
Current:
Bank overdrafts 813 5,742
Bank and other loans 391 350,484
1,204 356,226
Total borrowings:
Bank overdrafts 813 5,742
Bank and other loans 137,240 357,248
138,053 362,990
138,053
362,990
An analysis of the Group's total borrowings other than bank overdrafts is as
follows:
£'000 £'000
Borrowings - Sterling 95,808 240,731
Borrowings - Other 41,432 116,517
137,240 357,248
137,240
357,248
Loans are all at rates of interest ranging between 1.15% and 2.0% over the
interbank rate of the country within which the borrowing entity resides.
On 28 May 2014 the company refinanced the above facilities and entered into a
new committed, unsecured revolving facility agreement with thirteen financial
institutions, with Barclays Bank plc acting as Agent. This revolving facility
can be drawn to an aggregate limit of £738 million and is available until 27
September 2018.
The Group continues to operate comfortably within its banking facilities and
covenants.
The carrying amounts and fair value of the borrowings are not materially
different.
Net debt at 26 April 2015 was £59.7m (27 April 2014: £212.0m).
7. Cash inflow from operating activities
Profit before taxation 313,446 239,452
Net finance (income) / costs (802) 18,962
Other investment income (14,104) (7,017)
Share of profits of associated undertakings and joint ventures (2,959) (2,266)
Operating profit 295,581 249,131
Depreciation 62,924 56,963
Amortisation 12,725 6,832
Impairment 5,314 5,815
Loss on disposal of intangibles 107 -
Defined benefit pension plan current service cost 21 22
Defined benefit pension plan employer contributions (2,718) (2,708)
Share-based payments 10,105 11,927
Operating cash inflow before changes in working capital 384,059 327,982
Increase in receivables (66,368) (18,241)
Decrease / (Increase) in inventories 49,320 (52,521)
Decrease in payables (52,349) (34,435)
Cash inflow from operating activities 314,362 222,785
Cash inflow from operating activities
314,362
222,785
8. Post balance sheet events
There were no material post balance sheet events after 26 April 2015 up to the
date of signing of these accounts.
This information is provided by RNS
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