REG - Sports Direct Intl. - Preliminary Results <Origin Href="QuoteRef">SPD.L</Origin> - Part 2
07/07/2016 07:06
- Part 2: For the preceding part double click ID:nRSG4839Da
Non-controlling interest 1,566 956
245,702 337,126
CONSOLIDATED BALANCE SHEET AS AT 24 APRIL 2016
ASSETS
Non-current assets
Property, plant and equipment 585,876 422,742
Intangible assets 208,569 255,364
Investments in associated undertakings and joint ventures 16,635 38,133
Available-for-sale financial assets 193,355 140,795
Deferred tax assets 43,984 38,352
1,048,419 895,386
Current assets
Inventories 702,158 517,054
Trade and other receivables 292,589 190,726
Derivative financial assets 82,527 92,199
Cash and cash equivalents 234,163 78,318
1,311,437 878,297
TOTAL ASSETS 2,359,856 1,773,683
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 26,840 14,436
Reverse combination reserve (987,312) (987,312)
Own share reserve (33,726) (13,251)
Hedging reserve 8,080 78,796
Retained earnings 1,482,331 1,181,511
1,386,394 1,164,361
Non-controlling interests (1,666) (2,810)
Total equity 1,384,728 1,161,551
Non-current liabilities
Borrowings 6 333,063 136,849
Retirement benefit obligations 13,065 14,869
Deferred tax liabilities 21,590 40,088
Provisions 66,802 37,705
434,520 229,511
Current liabilities
Derivative financial liabilities 61,704 5,629
Trade and other payables 426,741 340,936
Borrowings 6 769 1,204
Current tax liabilities 51,394 34,852
540,608 382,621
Total liabilities 975,128 612,132
TOTAL EQUITY AND LIABILITIES 2,359,856 1,773,683
TOTAL EQUITY AND LIABILITIES
2,359,856
1,773,683
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 24 APRIL 2016
Year Year
ended ended
24 April 26 April
2016 2015
Notes £'000 £'000
Cash inflow from operating activities 7 135,589 314,362
Income taxes paid (69,881) (77,710)
Net cash inflow from operating activities 65,708 236,952
Cash flow from investing activities
Proceeds on disposal of property, plant and equipment 44,000 21,150
Proceeds on disposal of listed investments 181,342 51,695
Purchase of associate, net of cash acquired (9,078) (50)
Purchase of subsidiaries, net of cash acquired (24,013) (3,847)
Purchase of intangible assets (124) (2,937)
Purchase of property, plant and equipment (206,977) (97,342)
Purchase of listed investments (89,213) (50,415)
Investment income received 2,778 2,883
Finance income received 3,362 987
Net cash outflow from investing activities (97,923) (77,876)
Cash flow from financing activities
Finance costs paid (7,720) (6,845)
Borrowings drawn down 267,390 126,989
Borrowings repaid (71,258) (346,997)
Exercise of option over non-controlling interests - -
Net cash inflow / (outflow) from financing activities 188,412 (226,853)
Net increase in cash and cash equivalents including overdrafts 156,195 (67,777)
Cash and cash equivalents including overdrafts at beginning of period 77,505 145,282
Cash and cash equivalents including overdrafts at the period end 233,702 77,505
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 24 APRIL 2016
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 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
Credit to equity for Share-based payment - - - 4,246 - 4,246 - 4,246
Vesting of Share-based payments - - 8,963 (8,963) - - - -
Deferred tax on share schemes - - - - - - - -
Current tax on share scheme - - - 3,089 - 3,089 - 3,089
Purchase of own shares - - (29,438) - - (29,438) - (29,438)
Non-controlling interests - acquisitions - - - - - - (422) (422)
Transactions with owners - - (20,475) (1,628) - (22,103) (422) (25,525)
Profit for the financial period - - - 277,415 - 277,415 1,566 278,981
Other comprehensive income
Cash flow hedges
- recognised in the period - - - - (5,685) (5,685) - (5,685)
- reclassified and reported in net profit - - - - (63,679)) (63,679)) - (63,679))
- taxation in reserves - - - 17,728 (1,352) 16,376 - 16,376
Actuarial losses on defined benefit pension schemes - - - (5) - (5) - (5)
Fair value adjustment in respect of available-for-sale financial assets - - - 9,113 - 9,113 - 9,113
Taxation - - - (1,803) - (1,803) - (1,803)
Translation differences - Group - 12,404 - - - 12,404 - 12,404
Translation differences - associates - - - - - - - -
Total comprehensive income for the period - 12,404 - 302,448 (70,716) 244,136 1,566 245,702
At 24 April 2016 (56,234) 26,840 (33,726) 1,482,331 (32,817) 1,386,394 (1,666) 1,384,728
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 24 April 2016 and
26 April 2015 which do not contain any statement under s498 of the Companies
Act 2006 and are unqualified. The statutory accounts for the year ended 26
April 2015 have been delivered to the Registrar of Companies and the statutory
accounts for the year ended 24 April 2016 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. The directors have
reviewed the markets for UK sports retail and international sports retail and
are satisfied that these display similar economic characteristics and that
these are therefore correctly reported as one segment;
• 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 24
April 2016, as well as a reconciliation of reported profit for the period to
underlying EBITDA, is presented below:
Segmental information for the year ended 24 April 2016:
Retail Brands Eliminations Total
Sports Retail Premium Lifestyle Retail Total Total
£'000 £'000 £'000 £'000 £'000 £'000
Sales to external customers 2,491,598 181,249 2,672,847 231,478 - 2,904,325
Sales to other segments - - - 40,537 (40,537) -
Revenue 2,491,598 181,249 2,672,847 272,015 (40,537) 2,904,325
Gross profit 1,110,960 76,161 1,187,121 97,523 - 1,284,644
Operating profit before foreign exchange and exceptional items 253,733 (9,749) 243,984 32,305 ` 276,289
Operating profit 222,493 (23,233) 199,260 23,918 - 223,178
Investment income 148,148
Finance income 3,362
Finance costs (15,330)
Share of profits of associated undertakings and joint ventures 2,449
Profit before taxation 361,807
Taxation (82,826)
Profit for the period 278,981
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 24
April 2016:
Retail Brands Total
Sports Retail Premium Lifestyle Total Brands Total
£'000 £'000 £'000 £'000 £'000
Depreciation 82,794 3,965 86,759 2,447 89,206
Amortisation 2,976 702 3,678 2,716 6,394
Information regarding segment assets and liabilities as at 24 April 2016 and
capital expenditure for the year then ended:
Investments in associated undertakings and joint venture 16,635 - - - 16,635
Other assets 2,386,990 24,330 222,844 (275,003) 2,359,161
Total assets 2,403,625 24,330 222,844 (275,003) 2,375,796
Total liabilities (1,126,214) (64,453) (75,404) 275,003 (991,068)
Tangible asset additions 274,678 1,216 440 - 276,334
Intangible asset additions 4,002 - - - 4,002
Total capital expenditure 278,680 1,216 440 - 280,336
440
-
276,334
Intangible asset additions
4,002
-
-
-
4,002
Total capital expenditure
278,680
1,216
440
-
280,336
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
Geographic information
Segmental information for the Year ended 24 April 2016:
UK Non-UK Eliminations Total
£'000 £'000 £'000 £'000
Segmental revenue from external customers 2,281,158 623,167 - 2,904,325
Total capital expenditure 189,661 90,675 - 280,336
Non-current segmental assets 464,665 346,415 - 811,080
Segmental assets 2,151,309 439,077 (230,530) 2,359,856
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
Non-current segmental assets 408,651 307,588 - 716,239
Segmental assets 1,564,864 377,266 (168,447) 1,773,683
Material non-current segmental assets - by non-UK country
£'000s USA Belgium Austria Estonia Ireland
FY16 149,384 9,346 62,551 18,297 74,036
FY15 142,805 35,546 55,550 16,238 31,156
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 24
April 2016.
Sports Retail Premium Lifestyle Brands Total
£'000 £'000 £'000 £'000
Operating profit 222,493 (23,233) 23,918 223,178
Depreciation 82,794 3,965 2,447 89,206
Amortisation 2,976 702 2,716 6,394
Share of profit/(loss) of associated undertakings 2,449 - - 2,449
Reported 310,712 (18,566) 29,081 321,227
Charges for the Share Schemes 7,077 - - 7,077
Exceptional items 27,112 13,647 10,000 50,759
Realised FX Loss/(Gain) 4,128 (163) (1,613) 2,352
Underlying EBITDA 349,029 (5,082) 37,468 381,415
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
3. Exceptional items
Profit on sale of freehold property 13,541 10,288
Impairment and accelerated depreciation and amortisation (58,544) (13,338)
Provision against receivables and other (5,756) -
(50,759) (3,050)
- -
(50,759)
(3,050)
-
-
The profit on disposal of freehold property relates to the sale of a freehold
property for £44m, realising a profit of £13.5m. In the prior year, the profit
on disposal related to the sale of a warehouse.
The impairment mainly relates to goodwill in our Austrian business, reported
within our Sports Retail segment, due to recent trading being below
expectations. Converting the former Eybl megastores is taking longer than
expected and the lost revenue in certain categories is also proving harder to
replace than expected. Other impairments relate to certain brands that had
been acquired a number of years ago.
The provision against receivables mainly relates to a funding loan made to an
associate on acquisition of the initial stake.
4. Taxation
The effective tax rate on profit before tax for FY16 was 22.9% (FY15: 23.0%).
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,
592,573,254 (2015: 592,294,371), is adjusted to assume conversion of all
dilutive potential ordinary shares under the Group's Share Schemes, being
17,667,000 (2015: 24,200,000), to give the diluted weighted average number of
shares of 610,240,254 (2015: 616,494,371).
Basic and diluted earnings per share
Basic Diluted £`000 Basic Diluted £`000
£`000 £`000
Profit for the period 277,415 277,415 240,397 240,397
Number in thousands Number in thousands
Weighted average number of shares 592,573 610,240 592,294 616,494
Pence per share Pence per share
Earnings per share 46.8 45.5 40.6 39.0
Pence per share
Earnings per share
46.8
45.5
40.6
39.0
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. Tax has been calculated with
reference to the effective rate of tax for the Group.
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 277,415 277,415 240,397 240,397
Post tax adjustments to profit for the period for the following non-trading items:
Realised loss / (gain) on forward exchange contracts 1,813 1,813 2,862 2,862
Fair value adjustment to forward foreign exchange contracts 5,243 5,243
Fair value adjustment to derivative financial instruments (8,445) (8,445) (12,472) (12,472)
Profit on disposal of listed investments (104,529) (104,529) (2,832) (2,832)
Impairment of fixed assets 4,438 4,438 - -
Profit on disposal of property (10,440) (10,440) (7,921) (7,921)
Impairment and accelerated depreciation and amortisation 45,137 45,137 10,270 10,270
Underlying profit for the period 210,632 210,632 230,304 230,304
Number in thousands Number in thousands
Weighted average number of shares 592,573 610,240 592,294 616,494
Pence per share Pence per share
Underlying earnings per share 35.5 34.5 38.9 37.4
38.9
37.4
6. Borrowings
Non-current:
Bank and other loans 333,063 136,849
Current:
Bank overdrafts 461 813
Bank and other loans 308 391
769 1,204
Total borrowings:
Bank overdrafts 461 813
Bank and other loans 333,371 137,240
333,832 138,053
333,832
138,053
An analysis of the Group's total borrowings other than bank overdrafts is as
follows:
£`000 £`000
Borrowings - Sterling 320,000 95,808
Borrowings - Other 13,371 41,432
333,371 137,240
333,371
137,240
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.
During the year the Group utilised the accordion option under its working
capital facility. As a result, the working capital facility has been increased
to £788m (FY15 £738m). The facility is available until September 2018 and is
not secured against any of the Group's fixed assets.
The Group also had a £250m working capital facility with Mike Ashley/Mash
Holdings Limited, which has expired and not been renewed. This facility was
agreed at market terms at its inception and is not secured against any fixed
assets. At the period end no balance was due and no draw-downs were made
during the year.
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 24 April 2016 was £99.6m (26 April 2015: £59.7m).
7. Cash inflow from operating activities
Profit before taxation 361,807 313,446
Net finance costs / (income) 11,968 (802)
Other investment income (148,148) (14,104)
Share of profits of associated undertakings and joint ventures (2,449) (2,959)
Operating profit 223,178 295,581
Depreciation 89,206 62,924
Amortisation 6,379 12,725
Impairment 58,544 5,314
Profit on disposal of property, plant & equipment (13,541) -
Loss on disposal of intangibles 27 107
Defined benefit pension plan current service cost 13 21
Defined benefit pension plan employer contributions (2,708) (2,718)
Share-based payments 7,077 10,105
Operating cash inflow before changes in working capital 368,175 384,059
Increase in receivables (97,039) (66,368)
Decrease / (Increase) in inventories (155,384) 49,320
Increase in payables 19,837 (52,349)
Cash inflow from operating activities 135,589 314,662
Cash inflow from operating activities
135,589
314,662
8. Post balance sheet events
On 25 April 2016, the Group purchased a property on Oxford Street, London for
a total £108,000,000. A deposit of £10,800,000 was included in Other Debtors
at the year-end date.
Following the outcome of the UK referendum on EU membership, the Group notes
the associated market volatility and in particular material changes to
sterling / dollar exchange rates, and the lack of transparency as to those
rates in the short to medium term. These factors are likely to impact
purchases for which the Group is currently not hedged for the FY17 period and
beyond. The Group does not consider this an adjusting event for the accounting
period ended 24 April 2016.
This information is provided by RNS
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