REG - Mulberry Group PLC - Preliminary Results and Capital Raising
27/09/2024 16:45
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RNS Number : 0918G Mulberry Group PLC 27 September 2024
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For immediate release
27 September 2024
Mulberry Group plc
Audited results for 52 week period ended 30 March 2024
and
Subscription of new Ordinary Shares to raise £10 million
and
Retail Offer to raise up to £0.75 million
Introduction
Mulberry Group plc (AIM: MUL) (the "Company", "Mulberry" or, together with its
subsidiary undertakings, the "Group"), the British sustainable luxury brand,
today announces its audited results for the 52-week period ended 30 March 2024
(the "period").
The Company also announces a subscription for 10,000,000 new ordinary shares
of five pence each (the "Ordinary Shares") in the capital of the Company (the
"Subscription Shares") by Challice (the "Subscriber"), the majority
shareholder of Mulberry, at a price of £1.00 per Subscription Share (the
"Issue Price") to raise gross proceeds of £10 million (the "Subscription").
This includes a right of clawback under the Subscription by other major
shareholders on a pro rata basis.
In addition, the Company announces a separate offer to existing shareholders
of the Company (the "Shareholders") (the "Retail Offer") of up to 750,000 new
Ordinary Shares (the "Retail Offer Shares", and together with the Subscription
Shares, the "New Ordinary Shares") at the Issue Price via RetailBook
("RetailBook").
The Subscription and the Retail Offer (together the "Capital Raising") will
result in the Company raising total gross proceeds of up to approximately
£10.75 million. The net proceeds of the Capital Raising will be used to
strengthen the Group's balance sheet and provide financial flexibility to
support plans being developed by Andrea Baldo, the new Chief Executive Officer
("CEO") and the management team to return the business to profitability and
drive future growth.
Further details of the Capital Raising are set out below (including a right of
clawback under the Subscription by other major shareholders on a pro rata
basis).
FY24 Results Highlights
The Group's audited results for the 52 weeks ended 30 March 2024 show the
following highlights:
· Group revenue for the year down 4% to £152.8m (2023: £159.1m).
Positive revenue growth in the first six months of the period was offset by a
challenging second half, with ongoing macro-economic uncertainty impacting
consumer spending in the luxury retail sector
o UK retail sales of £84.7m (2023: £87.7m)
o Asia Pacific retail sales of £27.7m (2023: £28.9m)
o Total international retail sales increased 8% to £50.0m (2023: £46.5m),
driven by developments in Sweden, the US, Australia and New Zealand
o Digital sales increased by 4% to £50.6m, representing 33% of Group
revenue (2023: 30%)
· Gross margin of 70.1% (2023: 71.2%) reflecting actions taken
during the year to manage inventory levels
· Underlying loss before tax of £22.6m (2023: profit before tax
£2.5m) as a result of reduced revenue and margin in the period, along with
increased operational costs
· Reported loss before tax of £34.1m (2023: profit before tax
£13.2m)
Current Trading and Outlook
· Group revenue down 18% for the 25 weeks since the period end
compared to the same period last year
· Retail revenue down 14%, with all regions continuing to be
challenged by ongoing macro-economic uncertainty
· The Group's debt facilities have been increased to £27.5m with
renegotiated covenants to reflect the current trading environment
· On 1(st) September 2024, Andrea Baldo joined the Board as Chief
Executive Officer
· On 18 September 2024, the Group was awarded B Corp Certification,
a major milestone in the brand's sustainability journey and a reflection of
its purpose-led approach to progressive British luxury
CHRIS ROBERTS, CHAIRMAN, COMMENTED: "Over the course of the year, the
macro-economic environment presented significant challenges for the luxury
sector, with markets across the globe facing a tightening of consumer
spending. Whilst the financial performance for the year was disappointing,
we believe that the combination of the appointment of a new CEO, our new debt
facility and the capital raising announced today will put the Group on a firm
footing to ensure we are well set up for future growth."
"I, along with the wider Board have been highly impressed with Andrea's drive
and tenacity in his first few weeks in post. We are confident in our long-term
prospects as we move forward into this next chapter."
ANDREA BALDO, CHIEF EXECUTIVE OFFICER, COMMENTED: "Mulberry is a beloved brand
with a proud heritage, globally renowned for crafting beautiful, high-quality
products from our Somerset factories. Since joining, I have been working
closely with our teams in the UK and internationally to drive swift, decisive
actions. In the short term, we are focused on enhancing operational efficiency
and implementing targeted product, pricing and distribution strategies to
regain market share in our core market of the UK. While these immediate
measures are critical, I am now fully committed to conducting a comprehensive
review to develop a refreshed strategy that will position the Group for both
short-term recovery and long-term, sustainable growth."
Enquiries:
Mulberry Group plc +44 (0) 20 7605 6793
Charles Anderson (Group Finance Director)
Houlihan Lokey Advisory Limited - Nominated Adviser +44 (0) 20 7839 3355
Tim Richardson
Peel Hunt LLP - Broker +44 (0) 20 7418 8900
James Thomlinson / George Sellar
Headland - Public Relations Adviser +44 (0) 20 3805 4822
Lucy Legh / Joanna Clark
mulberry@headlandconsultancy.com (mailto:mulberry@headlandconsultancy.com)
The Capital Raising
Background to and rationale for the Capital Raising
The challenging trading conditions and decline in global luxury spend
experienced by the Group in the second half of the period, as highlighted in
the trading update announced by the Group on 1 May 2024, have continued into
the current financial year.
In response, the Group has increased its debt facilities as well as
renegotiated the covenants relating to this facility to provide greater
financial headroom and flexibility to manage the challenging trading
environment. However, the board of directors of the Company (the "Directors")
have concluded that the ongoing cash headroom provided by the Group's banking
facilities would remain very tight in the short term and that this, whilst
manageable in a trading context, would severely restrict plans being developed
by the new CEO, Andrea Baldo and the management team. The Directors have,
therefore, concluded that additional funding is required to strengthen further
the Group's balance sheet and provide financial flexibility to support these
plans.
Having considered the limited alternatives available to the Group in this
regard, the Directors have concluded that the Capital Raising offers the most
effective way to raise the Group's immediate funding requirements whilst
minimising cost, time to completion and maximising certainty. The Directors
note that the number of Subscription Shares exceeds the existing authority of
the Company to issue new Ordinary Shares on a non-pre-emptive basis, granted
at the Company's annual general meeting held on 7 September 2023. Accordingly,
in order to ensure that the net proceeds of the Subscription can be received
by the Company as soon as possible, it has been structured using a cashbox
structure. Whilst the Subscription is not, therefore, conditional upon the
approval of the Shareholders, the Directors believe that the clawback
arrangements built into the Subscription alongside the Retail Offer, which
together provide all Shareholders with the opportunity to participate in the
Capital Raising on the same terms as the Subscriber, provide protection to
Shareholders from the dilutive impact of the Subscription.
The Directors have concluded that the Capital Raising is in the best interests
of Shareholders and wider stakeholders and will promote the success of the
Company.
Details of the Capital Raising
The Subscription
The Company has raised £10 million (before commissions, fees and expenses) by
means of the Subscription at the Issue Price. The Issue Price represents a
discount of approximately 14.9 per cent. to the closing middle market price of
117.5 pence per Ordinary Share on 26 September 2024, the last practicable date
prior to this Announcement, and approximately 6.1 per cent. to the volume
weighted average closing price of 106.5 pence per Ordinary Share over the
previous 3 months to 26 September 2024. The Subscription Shares, in
aggregate, will represent approximately 16.6 per cent. of the issued Ordinary
Shares (the "Existing Ordinary Shares").
The Subscription is being effected by way of a cashbox subscription of new
Ordinary Shares for non-cash consideration. The cashbox structure is expected
to have the effect of providing the Company with the ability to realise
distributable reserves approximately equal to the net proceeds of the
Subscription less the nominal value of the Subscription Shares issued by the
Company.
The Subscriber, the Company's majority Shareholder, will, pursuant to a
subscription and transfer agreement (the "Subscription and Transfer
Agreement"), subscribe for redeemable preference shares in Project HCJ
Limited, a new Jersey-incorporated subsidiary of the Company ("JerseyCo"), in
an amount equal to the gross proceeds of the Subscription.
The Company will allot and issue the Subscription Shares on a non-pre-emptive
basis to the Subscriber in consideration for the transfer, pursuant to the
terms of the Subscription and Transfer Agreements, of the redeemable
preference shares in JerseyCo ("JerseyCo Preference Shares") that will be
issued to the Subscriber.
Instead of receiving cash as consideration for the issue of the Subscription
Shares, following completion of the Subscription, the Company will own the
entire issued share capital of JerseyCo, whose only asset will be its cash
reserves which will represent an amount equal to the net proceeds of the
Subscription. The Company will then be able to access those funds by redeeming
the JerseyCo Preference Shares.
The Subscriber's subscription is subject to a right of recall to satisfy valid
applications to subscribe by other major Shareholders. The number of
JerseyCo Preference Shares to be clawed back from the Subscriber's total
allocation will be determined by the Company in its absolute discretion and
may or may not be on a pro-rata basis amongst any other subscribers.
The Subscriber has a 56.1 per cent. interest in the Existing Ordinary Shares
and representation on the Board and, therefore, is considered to be a related
party to the Company for the purposes of the AIM Rules for Companies published
by London Stock Exchange plc (the "London Stock Exchange") (the "AIM
Rules"). Accordingly, pursuant to Rule 13 of the AIM Rules, the Subscription
is a related party transaction.
Taking into account the background to and rationale for the Capital Raising as
set out above, Andrea Baldo, Charles Anderson, Christophe Cornu, Julia Gilhart
and Leslie Serrero, the Directors who are independent of the Subscriber,
consider, having consulted with the Company's nominated adviser, that the
terms of the Subscription are fair and reasonable in so far as Shareholders
are concerned.
The Retail Offer (to be conducted via RetailBook)
In order to provide all Shareholders in the United Kingdom, other than those
participating in the Subscription, with an opportunity to participate in the
Company's fundraising plans, the Company intends to carry out the Retail Offer
to raise up to a further £750,000 by the issue of up to 750,000 Retail Offer
Shares at the Issue Price on the terms to be set out in a separate
announcement to be made by the Company in due course. The Retail Offer may
not be fully subscribed and is not underwritten. The Retail Offer is
conditional upon, amongst other things, Admission (as defined below) becoming
effective on or before 8.00 a.m. on 4 October 2024 (or such later time and/or
date as the Company may decide but not being later than 8.00 a.m. on 31
October 2024). For the avoidance of doubt, the Retail Offer is not part of
the Subscription.
Admission, settlement and CREST
Application will be made to the London Stock Exchange for the admission of the
New Ordinary Shares to trading on the AIM market ("AIM") of the London Stock
Exchange ("Admission"). It is expected that Admission will take place on or
before 8.00 a.m. on 4 October 2024 and that dealings in the New Ordinary
Shares on AIM will commence at the same time.
The Capital Raising is conditional upon Admission becoming effective and upon
the Subscription and Transfer Agreement not being terminated in accordance
with its terms. Following Admission, assuming the full take up of the New
Ordinary Shares pursuant to the Capital Raising, the Company will have
70,827,458 Ordinary Shares in issue.
The New Ordinary Shares, when issued, will be fully paid and will rank pari
passu in all respects with the Existing Ordinary Shares, including the right
to receive all dividends and other distributions declared, made or paid after
the date of issue. If all of the New Ordinary Shares are issued, it would
represent an increase of approximately 17.9 per cent. of the existing issued
ordinary share capital of the Company.
This Announcement should be read in its entirety. In particular, you should
read and understand the information provided in the "Important Notices"
section of this Announcement.
The person responsible for arranging the release of this Announcement on
behalf of the Company is Charles Anderson, a director of the Company.
Chairman's Letter
Dear Shareholder,
Mulberry continues to be a well-loved British luxury brand, famous for its
high-quality craftsmanship and innovative designs. However, against rising
inflation and macro-economic headwinds, customers became even more selective
in their discretionary purchasing and businesses in the luxury space have had
to navigate through this. This was true for Mulberry, particularly during the
second half. Historically, softness in one region would normally be offset by
growth in another, however the slowdown during the period has been across all
regions and has materially impacted our full year performance.
The Board do not believe it is prudent to pay a dividend for the period under
review.
During the period, the management team has been supported by the board,
strengthened further this year by the arrival in September 2023 of Ms Leslie
Serrero as an independent non-executive director. Her experience in the luxury
sector of facilitating growth strategies is already being brought to bear on
our digital transformation plans, omni-channel strategy and customer
engagement efforts.
On 9 July 2024, we announced the appointment of Andrea Baldo as Chief
Executive Officer. Following our search process, it was clear that Andrea's
international fashion brand expertise, creativity and strategic thinking meant
he was absolutely the right person for this role. Andrea took up this role on
1 September 2024 and we look forward to his refreshed strategy for the
Company.
Since the period end, trading conditions have remained challenging. We have
increased our debt facilities to £27.5m, including a new £6.0m supplier
trade finance line and renegotiated covenants to reflect the current trading
environment. In addition, the Directors have concluded that it would be
prudent to further strengthen the Group's balance sheet and provide financial
flexibility to support the plans being developed by Andrea Baldo and the
management team, to return the business to profitability and drive future
growth. To facilitate this, on 27 September 2024, the Group has announced a
subscription of new ordinary shares by Challice, the majority shareholder of
Mulberry, to raise approximately £10m, as well as options to allow other
Mulberry shareholders to participate in this capital raise should they so
wish. Further details of the capital raise are set out in the Company's
announcement on 27 September 2024.
I'd like to thank the whole Mulberry team for their hard work and commitment
throughout the year and to you, our shareholders for your continued support.
Christopher Roberts
Chairman
27 September 2024
Strategic Report
Business Review
Overview
The latest financial year was a challenging one. A promising first half was
followed by two quarters when Mulberry, like other luxury brands worldwide,
faced an accelerated decline in consumer spending due to the adverse
macro-economic environment. Footfall fell in the Chinese and South Korean
markets while the UK continued to see lower discretionary purchasing and
tourism remained approximately 8% lower than before the pandemic in 2019 and
was 2% down on 2022.
Mulberry took appropriate action where required to manage these headwinds,
reviewing all costs, tightening capital expenditure and embarking on a stock
optimisation programme to manage inventory levels. Since period-end the Group
has also increased debt facilities to £27.5m with renegotiated covenants to
reflect the current trading environment.
Progress against strategy
Strategic investments in omni-channel distribution and international
development continued during the period, to bring the business closer to its
customers and reduce the risks associated with being heavily exposed to one or
two markets. Following developments in Sweden, Australia and New Zealand,
along with Mulberry's partnership with Nordstorm in the US led to positive
growth.
Even as digital channels became proportionately more important, Mulberry
continued to optimise its store and concession network with thoughtful
refurbishments and where appropriate, closures. In China, the business
integrated its online and in-store systems, advancing the omni-channel
strategy and allowing it to better serve customers. In the UK, investment in
the Regent Street store resulted in a 35% increase in sales at the site.
However, retail sales fell in the market overall by 3%, reflecting tough
trading conditions and the challenging consumer environment.
Mulberry took a targeted approach to growing brand awareness in markets. The
Chinese market remains a big opportunity, although the business took a
cautious approach given the prevailing macro-economic conditions. Retail sales
were down 23% over the year. In response, Mulberry launched pop-ups to build
brand awareness and sales without adding to the fixed-cost base. A pre-loved
pop-up in Shenzen in collaboration with Stefan Cooke and a collaboration with
Chinese actress Juju, both performed well.
In the same vein, Mulberry launched pop-ups in Europe. In Italy, the initial
six-month lease in Mall Firenze, Leccio, was extended, while in the UK three
pop-ups performed well, helping the brand reach a younger buyer and drive
brand awareness.
The business also launched product collaborations - a cost-effective way to
not only test new ideas and materials, but also expand ranges in lifestyle and
ready to wear as well as reach new customers. Three collaborations - with Paul
Smith, Axel Arigato and Mira Mikati - ranged across bags and ready to wear,
while the Stefan Cooke collaboration played well to sustainability
credentials. Following its success at London's Fashion Week, this
collaboration was extended in January and February to take in Tokyo and
Beijing. Each collaboration not only helped us reach new consumers but also
increased footfall in stores and website traffic, growing brand awareness.
In response to the depressed global luxury sector, the business reviewed
costs, cut the number of product lines and took a thoughtful approach to
launches to achieve a more focused product selection positioned carefully for
the three core customers - heritage, international and younger. The business
also embarked on a stock optimisation programme through carefully selected
outlets that by year-end had reduced inventory levels by £15.1m to strengthen
the balance sheet and bolster working capital.
Mulberry's Made to Last manifesto remains central to the core business
strategy. In September 2023, the business amended its articles of association
and in April 2024 Mulberry's science-based targets emissions reduction were
approved by the Science Based Targets initiative (SBTi), a process we started
in 2021. Tackling climate change requires ambitious action from the luxury
sector. Mulberry's science-based targets prove that even in the challenging
macro-economic backdrop, the business remains committed to sustainability and
the ambitions set out in the Made to Last Manifesto. The business continues to
work on its emissions reduction strategy, including installing new solar
panels at the Somerset factories and by expanding and certifying the use of
non-leather materials and refocusing its supply chain in Europe and the UK.
Circularity forms a critical part of Mulberry's Made to Last strategy.
Pre-loved plays to this, growing to its biggest share during the year and for
the first time featuring in the top 10 stores, while Mulberry's Lifetime
Service Centre restored more than 10,000 bags last year. Under this
initiative, customers have returned bags for repair that are over 30 years
old, demonstrating the quality of the brand's product and its ability to
repair and improve for future use.
Made to Last relates to more than sustainability - shaping Mulberry's
governance and inclusivity too. The addition of Ms Leslie Serrero to the board
strengthens governance. The Diversity, Equity and Inclusion committee,
formed of employee representatives from around the business meets regularly to
discuss external news, share personal experiences and the experiences of
colleagues and feedback on elements of our DE&I Strategy.
Trading performance
Positive revenue growth in the first six months of the period was offset by a
challenging second half, with ongoing macro-economic uncertainty impacting
consumer spending in the luxury retail sector. This resulted in Group revenue
declining 4% on the prior year.
Total international retail sales increased 8% in the period, driven by
international growth in the US and mainland Europe following strategic
developments in both markets. In the US, the Nordstrom partnership grew
despite the tough market conditions. Its strong performance, along with double
digit growth at Mulberry.com, helped to lift sales 17% to make the US the
second biggest country by sales. Sales in Europe were up 41%, benefiting from
the first full period of ownership of the three Swedish stores.
This growth was offset by a decline in the UK and Asia Pacific (excluding
Australia), two markets that were particularly affected by a decline in
consumer sentiment and discretionary purchasing. Businesses based in the UK
also continue to lose out to mainland Europe due to the lack of VAT-free
shopping policy, which continues to put tourists off from shopping in the UK.
Operating performance
Mulberry's design teams continued to read the market well and our core three
customer demographics as demonstrated by the positive performance of new lines
- the Clovelly, Pimlico, Lana and Islington bags - and new colours. New design
tools helped the business to launch faster and test the market quickly at
lower cost, making Mulberry more nimble and more efficient.
Further efficiencies came from reducing stock levels by £15.1m, which
supported our cash position. The business also increased the proportion of
full-price sales in its sales mix and achieved 20% year-on-year growth of
full-price sales in lifestyle categories such as luggage, jewellery, eyewear
and belts. With their lower price points, their success reflects the tough
economic environment facing customers.
Financial performance
The adverse global macro-economic conditions increasingly undermined luxury
buyers' confidence as the year progressed. This was clearly seen in Mulberry's
performance. While the first half saw a 7% rise in group revenues to £69.7m,
which was driven by international and UK growth, the Group ended the year down
4% at £152.8m. Full-year UK retail sales were down 3% to £84.7m, but
international sales rose 8% to £50.0m, driven by the US - up 17% to £11.3m -
and Europe - up 34% to £10.2m. In China, sales were £9.6m (2023: £12.6m).
Group digital sales increased by 4%, reflecting their strength despite the
challenging economic conditions.
Despite inflationary pressures, along with a static fixed-cost and lower
production levels in response to lower demand, gross margin was slightly lower
at 70.1% compared with 71.2% in the prior period. This was as a result of
actions taken during the period to manage inventory levels and reduce working
capital.
Mulberry made a pre-tax loss of £34.1m (2023: profit £13.2m), which includes
a net impairment charge of £8.6m on retail stores as the expected future
cashflows have been reduced based on current year performance and £1.2m of
restructuring costs. The underlying loss was £22.6m (2023: profit £2.5m), as
a result of reduced revenue and margin in the period, along with increased
operational costs. This includes the full year impact of operating our new
stores in Sweden, Australia and New Zealand. Further details can be found in
the Financial Review.
Mulberry ended the year with net debt (comprising cash and cash equivalents,
less overdrafts and borrowings) of £16.3m (2023: net cash of £0.7m), with
available liquidity of £2.0m. Net debt comprises cash balances of £7.1m
(2023: £6.8m) less bank borrowings of £23.4m (2023: £6.1m), excluding loans
from related parties and non-controlling interests of £7.3m (2023: £5.5m).
Current trading and outlook
The macro-economic environment worldwide has not improved since the period-end
25 weeks ago and the business does not envisage a let up in the near term.
Group revenue is down 18% over the first 25 weeks versus the same period last
year, with retail sales down 14%, international sales down 16% and UK sales
down 12%.
The Board and the management team continues to monitor conditions and take
prudent action to protect margins and make progress towards becoming a global,
sustainable luxury brand. In this regard and considering the current trading
environment, we have taken and continue to take appropriate cost actions and
manage our inventory levels accordingly.
These actions also included increased debt facilities, signed in July 2024.
The Revolving Credit Facility (RCF) has been increased from £15.0m to £17.5m
and re-negotiated covenants to reflect the current trading environment. The
Group has also signed a new £6.0m supplier trade finance facility which is
backed by UK Export Finance.
In addition, on 27 September 2024, the Group announced a subscription for new
ordinary shares by Challice, the majority shareholder of Mulberry, to raise
approximately £10m in order to support the Group. In addition, the Group
announces a separate offer to existing shareholders of the Group of up to
750,000 new Ordinary Shares. The Directors believe that the clawback
arrangements built into the subscription, alongside the retail offer, which
together provide all Shareholders with the opportunity to participate in the
Capital Raising on the same terms as the Subscriber. Further details of the
capital raise are set out in the announcement on 27 September 2024.
The Made to Last Manifesto continues to be a core part of Mulberry's strategy.
Since year end, Mulberry's science-based targets were accepted and in
September the Group was awarded B Corp Certification - a significant milestone
in the brand's journey.
Progress against our strategy
With Mulberry's rich heritage in leather craftmanship and reputation for
innovation, we strive to grow the Group through our four strategic pillars
which focus on omni-channel distribution, international development, constant
innovation and a sustainable lifecycle.
Strategic Pillar 1
Omni-channel distribution
Mulberry has worked hard over the past 12 months to ensure its omni-channel
distribution strategy delivers what customers want, where they want it and
when they want it. Progress is illustrated by the four percentage-point
increase year-on-year in direct-to-customer sales to 88%, the highest to date.
The lift is in part thanks to the acquisition in the prior period of stores in
Sweden as well as in Australia and New Zealand and to new omni-hubs in the UK,
which allow store space to be optimised and make order management more
efficient. Since January, customers in the UK have also benefitted from an
improved returns policy and process.
It's important that we also communicate directly with customers and we have
seen customers contacting more through WhatsApp and setting up virtual
appointments. Teams also communicate with customers over their preferred
platform - text, WhatsApp or a phone call - and this has increased the amount
of valuable feedback, giving additional customer insight.
As a result of these and other ongoing initiatives, digital sales played a
bigger role in the mix, rising from 30% to 33% of total sales, with the first
full-year contributions from the new platform in Korea - Naver.com - while
Little Red Book in China helped raise the brand's profile. In the US, digital
sales accounted for 71% of the total, up from 55% the previous year. In the
UK, the introduction of staggered online payments in October 2023 resulted in
the period end sales from these payment types accounting for more than 20% of
the UK digital total, helping to maintain sales in line year-on-year in a
challenging market.
The US website Mulberry.com also saw strong double-digit growth - up 22% -
supported by a well-considered range and pricing, which places the brand among
the best value players within the luxury market.
The Group has also found ways to improve omni-channel offerings for Mulberry
Exchange and the repair service, which are both growing in popularity, through
consolidating stock and ensuring the majority is available online with a 360°
photographic view.
However, bricks and mortar stores remain important and continued to be
carefully invested in. Regent Street was particularly rewarding, with its
refurbishment delivering a 35% lift in sales as it attracted customers who had
previously shopped in nearby Bond Street. However, the challenging UK high
street affected the performance of our John Lewis concessions. Since the
period end, 13 of the John Lewis concessions have closed.
Mulberry finished the year with 111 points of sale worldwide and 25 ecommerce
sites and partnerships.
Strategic Pillar 2
International Development
The past year saw Mulberry continue to focus on growing across markets. This
demands a bespoke approach to individual markets, with carefully planned store
openings, refurbishments, partnerships, pop-ups and promotional campaigns
tailored to local tastes.
Overall, international retail sales grew 8%, despite difficult trading in
parts of Asia Pacific. Notable performances came from historically smaller
markets including the US, Europe, Australia and New Zealand.
In the US, the expanded partnership with Nordstrom helped Mulberry grow in a
lacklustre US luxury market. Full-year sales rose 17% to make the US the
second biggest country after the UK.
Europe also performed well, delivering 41% growth, with every market up.
Notable contributions came from Sweden, its first full year under ownership
and the Netherlands, which delivered on 2022/23 investment. An initial
six-month pop-up in the luxury outlet The Mall Firenze, Leccio, gave us
valuable insight into the Italian market, with the lease now extended further.
Digital sales across the region rose 16%.
In Asia Pacific, a strong first quarter in China and South Korea was followed
by a significant slow-down as well-documented macro-economic headwinds
dampened demand. Sales at stores in Australia and New Zealand, in contrast,
continued to grow throughout the year.
Strategic Pillar 3
Constant Innovation
Product innovation is a crucial part of how Mulberry continues to excite and
inspire customers. New materials, collaborations and designs help reach new
markets and retain the interest of existing customers. Careful investment over
recent years in the design and production process means today the Group can
introduce and test new elements faster and more efficiently.
New ranges in 2023/24 included the Clovelly, Pimlico, Lana and Islington bags.
These all met or exceeded forecasts, helping to lift sales of new product
lines to 8% in the final quarter.
Mulberry also launched new silhouettes and colours - notably for the
perennially popular Bayswater, which celebrated its 20th anniversary, as well
as the Mini Lily and the North South Tote. The performance of all the new
lines was particularly strong internationally, which accounted for at least
50% of their sales.
Newness also came in the form of collaborations. Three projects - with Paul
Smith, Axel Arigato and Mira Mikati - featured bags and ready to wear, helping
to test expanded ranges. A fourth, with Stefan Cooke drew on Mulberry's
sustainability credentials to reimagine pre-loved bags for the luxury,
high-fashion buyer. Launched in September 2023 during London's Fashion Week,
Vogue declared it "everything a collaboration should be" and subsequently was
expanded in January and February for London, Tokyo and Beijing in partnership
with London's prestigious Dover Street Market.
In all cases, the collaborations raised brand awareness, attracted new
customers and where relevant, helped Mulberry extend its' range beyond bags
and leather goods.
Strategic Pillar 4
Sustainable Lifecycle
Sustainability has always been a fundamental principle at Mulberry. It
inspired the Made to Last Manifesto, launched in 2021 and this year was
formally recognised by the Board in September 2023 through the amendment of
articles of association to ensure all decisions balance business priorities
and profit with their effect on people and the planet.
This formal commitment builds on a series of initiatives aimed at Mulberry
achieving a net zero target by 2035. These include the validation of
science-based targets for carbon emissions, offsetting partnerships with World
Land Trust and Ecologi, sourcing 100% of leather from environmentally
accredited tanneries since summer 2023 and cultivating a new approach to
sourcing leather by building supply chain relationships with farmers committed
to regenerative agriculture.
Closer to home, The Mulberry Exchange, buy-back and Lifetime Service Centre
continued to grow organically, helping to give new life to pre-loved pieces.
Mulberry's collaboration with Stefan Cooke also saw pre-loved pieces
reimagined for a new life. In total, resales grew 87% and became one of the
top 10 stores with little to no new investment.
Throughout the year the Group undertook biodiversity assessments at the two
Somerset factories, The Rookery and The Willows and installed solar panels
that have so far produced 174.77 mWh of renewable energy at the latter.
Meanwhile, packaging continues to be manufactured through the innovative
CupCycling™ recycling process and to date over 4 million take-away coffee
cups have been recycled into luxury Mulberry Green paper. Mulberry also
donated pallets and bags of written-off leather, fabric, ready-to-wear and
offcuts to universities, craft groups and schools.
The Group retained its status as a Living Wage Employer and strengthened
diversity, equity and inclusion efforts by establishing employee resource
groups, which are internal communities of Mulberry employees with shared
identities and interests, brought together to drive activities and progression
across the DE&I topics, formally supported by the business. With the
appointment of Ms Leslie Serrero, the proportion of women on the Board rose to
33%.
Colleagues also found ways to support their local communities, volunteering
more than 1,000 hours of their time to help their own chosen charities and
community groups as well as the Mulberry's charitable partners The Felix
Project and Somerset Community Foundation. To further the internal
sustainability strategy, the Group has formed Made to Last Ambassadors, who
are voluntary representatives and promoters of Made to Last and sustainability
ambitions within Mulberry, aiding in helping to close communication gaps
between business areas and act as a feedback mechanism for the sustainability
team.
Collaboration in the industry remains important and we remain members of the
British Fashion Council's Circular Fashion Innovation Network, the Textile
Exchange, the Sustainable Leather Foundation, Leather Working Group, Better
Cotton, the UN Fashion Charter for Climate Action and sit on the
Sustainability Working Group of Walpole British Luxury.
Mulberry is also a member of the Sustainable Markets Initiative. This
initiative, better known as Terra Carta, was launched by King Charles with a
mission to build a coordinated global effort to accelerate the achievement of
global climate, biodiversity and Sustainable Development Goal targets.
In May 2023, Mulberry was awarded Brand of the Year at the Draper's
Sustainable Fashion Awards in recognition of the progress made towards the
Made to Last manifesto goals, including the ongoing commitment to a Net Zero
future and for the thriving apprenticeship program with Bridgwater and Taunton
College which nurtures the next generation of craftspeople and manufacturing
leaders and continues Mulberry's longstanding commitment to British
manufacturing.
·
Financial review
Loss before tax
£m 52 weeks ended 52 weeks ended
30 March 1 April
2024 2023
Revenue 152.8 159.1
Cost of sales (45.7) (45.9)
Gross Profit 107.1 113.2
Net impairment (charge)/credit (8.6) 11.5
Other operating expenses (128.9) (108.5)
Other operating income 1.3 0.8
Operating (loss)/profit (29.1) 17.0
Share of results of associates - 0.1
Finance expense (5.0) (3.9)
(Loss)/profit before tax (34.1) 13.2
The table above summarises the Group Income Statement, showing the loss before
tax for the period of £34.1m (2023: profit before tax £13.2m). Further
details are discussed within this Financial Review.
52 weeks ended 52 weeks ended
£m 30 March 1 April
2024 2023
Underlying (loss)/profit before tax pre SaaS costs (17.4) 6.5
SaaS costs (5.2) (4.0)
Underlying (loss)/profit before tax (22.6) 2.5
Net Impairment (charge)/credit (8.6) 11.5
Restructuring costs (1.2) -
Store Closure (charge)/credit (1.6) 0.2
Australia and Sweden acquisition costs - (1.0)
Provision for IT costs (0.6) -
Gain on waiver of loan from non-controlling interest 0.5 -
Reported (loss)/profit before tax (34.1) 13.2
The table above shows the reconciliation from the reported loss before tax in
the period of £34.1m (2023: profit before tax £13.2m) to the underlying loss
pre and post-SaaS costs.
The Group's underlying loss for the period of £22.6m (2023: profit £2.5m),
was a result of reduced revenue and margin, along with increased operational
costs. The operating expenses table within this financial review shows the
operational costs increase of £20.4m to £128.9m for the period (2023:
£108.5m). Underlying operating expenses increased by £7.1m to £108.0m
(2023: £100.9m).
Reported loss before tax for the period of £34.1m (2023: profit £13.2m),
includes adjusting items of a net £1.6m charge (2023: credit £0.2m) for the
closure of a retail store, UK head office restructuring costs of £1.2m (2023:
nil) and the net impairment charge of £8.6m (2023: credit £11.5m).
As reported last year, the Bond Street store was closed in February 2023 and
the lease was assigned in April 2023. The £1.6m store closure charge included
a contribution of £5.2m (2023: £nil) towards future rentals for the new
assignee and a charge of £2.1m (2023: £nil) being the valuation of the
financial guarantee for the remaining lease rentals. The financial guarantee
has been recognised as a financial liability in the period as Mulberry Group
plc is the ultimate guarantor to the superior landlord. These charges have
been partially offset by the net positive impact of £5.8m on the release of
the lease liability and the write-off of the right-of-use assets. In the prior
period, the impairment credits were in relation to Bond Street and Regent
Street, net of an impairment charge of £2.4m in respect of Korea goodwill.
Group revenue
£m 52 weeks ended 30 April 2024 52 weeks ended 1 April 2023 % Change
Group Digital 50.6 48.4 4%
Stores 84.1 85.8 (2%)
Retail (omni-channel) 134.7 134.2 0%
Franchise and Wholesale 18.1 24.9 (27%)
Group Revenue 152.8 159.1 (4%)
UK Digital 33.8 33.8 0%
Stores 50.9 53.9 (6%)
Omni-channel - UK 84.7 87.7 (3%)
Asia Pacific Digital 5.7 6.3 (10%)
Stores 22.0 22.6 (3%)
Omni-channel - Asia Pacific 27.7 28.9 (4%)
ROW Digital 11.1 8.3 34%
Stores 11.2 9.3 20%
Omni-channel - Rest of World 22.3 17.6 27%
Retail (omni-channel) 134.7 134.2 0%
Franchise and Wholesale UK 1.4 3.4 (59%)
Asia Pacific 3.7 4.2 (12%)
Rest of world 13.0 17.3 (25%)
Franchise and Wholesale 18.1 24.9 (27%)
Group revenue for the period decreased by 4% over the prior period, with
increased revenues in the first half being more than offset by a challenging
second half which saw revenues reduce by 12% over the same period last year.
£m H1 H2 FY
FY24 FY23 % Change FY24 FY23 % Change FY24 FY23 % Change
Group Digital 20.3 16.3 25% 30.3 32.1 (6%) 50.6 48.4 4%
Stores 39.4 35.3 12% 44.7 50.5 (11%) 84.1 85.8 (2%)
Retail (omni-channel) 59.7 51.6 16% 75.0 82.6 (9%) 134.7 134.2 0%
Franchise and Wholesale 10.0 13.3 (25%) 8.1 11.6 (30%) 18.1 24.9 (27%)
Group Revenue 69.7 64.9 7% 83.1 94.2 (12%) 152.8 159.1 (4%)
UK retail revenue was 3% below the prior period, with demand impacted by
macro-economic uncertainty and inflationary pressures which affected consumer
spending habits, particularly in the second half of the period. The second
half saw a reduction in performance, with UK retail revenue 12% below the same
period last year. UK digital revenue was in line with the prior period and
represented 40% of UK retail revenue (2023: 39%), although in line with the
overall trend, UK digital revenue in the second half declined by 6% against
the prior period. Full price revenue as proportion of total retail
omni-channel revenue remained in line with the prior period at 79%.
Asia Pacific retail revenue decreased by 4% over the prior period. This
includes the first full period of revenue from the five stores in Australia
which were acquired in the second half of the prior period. Excluding
Australia, Asia Pacific retail omni-channel revenue declined by 18%. During
the period all markets were impacted by the challenging macro-economic climate
and reduced footfall.
Rest of world retail revenue, which includes the United States of America
(USA) and Europe, increased by 27% compared to the prior period. The European
region benefited from a full period of revenue from the Swedish business which
was acquired in the previous period, equating to an increase of £1.4m. Retail
revenue in the USA was 17% above the prior period, with digital revenue
accounting for 46% of this increase, assisted by our partnership with
Nordstrom and also revenue from our own Mulberry.com site.
As anticipated, franchise and wholesale revenue decreased by 27%, following
the recategorisation to retail of a number of previously franchised stores as
part of our strategy to sell direct to the consumer.
Gross Margin
£m 52 weeks 52 weeks % Change
ended ended
30 March 1 April
2024 2023
Revenue 152.8 159.1 (4%)
Cost of sales (45.7) (45.9) -
Gross Profit 107.1 113.2 (5%)
Gross profit margin 70.1% 71.2%
Gross margin during the period was 70.1% (2023: 71.2%), resulting in a 5% fall
in gross profit relative to the prior period. This was predominantly as a
result of actions taken during the period to optimise inventory levels and
reduce working capital. As a result of a stock optimisation project undertaken
in the first quarter of the period under review, production levels were
reduced to reduce stock cover. This action saw inventory reduce by £15.1m
over the period.
Other Operating Expenses
£m 52 weeks 52 weeks % Change
ended ended
30 March 1 April
2024 2023
Operating expenses 40.7 40.5 -
Staff Costs 42.8 39.7 8%
Depreciation and Amortisation 15.5 13.9 12%
Systems & Comms 8.8 7.0 26%
Foreign exchange loss/(gain) 0.2 (0.2) 200%
Underlying operating expenses 108.0 100.9 7%
Restructuring costs 1.2 - -
SaaS Costs 5.2 4.0 30%
Store Closure Charge/(Credit) 1.6 (0.2) 900%
New initiatives - Sweden & Australia 7.1 3.8 87%
Provision for IT costs 0.6 - -
Under recovery of overheads into inventory 5.2 - -
20.9 7.6 175%
Reported operating expenses 128.9 108.5 19%
Other operating expenses in the period increased by 19% to £128.9m (2023:
£108.5m), with underlying operating expenses also increasing by 7%. This
includes the full year impact of our stores in Sweden, Australia and New
Zealand which resulted in operating expenses increasing by £3.3m. Staff costs
have increased by £3.1m to £42.8m (2023: £39.7m) predominantly as a result
of the impact of the real living wage rise in the period.
In line with our inventory policy, an element of fixed production overheads is
absorbed into stock and expensed when the stock is sold. As production units
were lower than previously planned, a greater proportion of the fixed
overheads were expensed in the period. The impact of this increased overheads
by £5.2m.
In light of the March 2021 IFRIC agenda decision to clarify the treatment of
Software as a Service (SaaS) costs, during the period we expensed £5.2m
(2023: £4.0m) of SaaS costs, in line with the accounting for configuration
and customisation cost arrangements. We expect SaaS costs to reduce in the new
financial period as a number of projects are due to go-live in the first half
of the year. We also increased technology spend to £8.9m (2023: £7.0m) to
support the investment in projects and systems.
Taxation
The Group reported a tax charge of £0.9m (2023: charge £1.8m). While the
Group has made a loss overall there is a total tax charge for the year largely
driven by overseas taxes and deferred tax charges. It is not possible to
calculate a meaningful effective tax rate for the year (2023: 13%). UK
corporation tax is calculated at 25% (2023: 19%) of the estimated taxable
profit for the period. Taxation for the other jurisdictions is calculated at
the rates prevailing in the respective jurisdictions.
Balance Sheet
Net working capital, which comprises inventories, trade and other receivables
and trade and other payables decreased by £14.7m to £25.3m at the period end
(2023: £40.0m).
This decrease was predominantly driven by a reduction in inventory of £15.1m,
principally due to the stock optimisation programme which aims to reduce and
maintain stock covers across all lines through production planning and selling
strategies.
At the period end, trade and other receivables were £15.5m (2023: £19.9m),
the decrease due to the timing of rent and rates prepayments at the period
end, as well as a reduction in trade receivables due to the timing of period
end shipments. Trade and other payables at the period end decreased by £4.8m
to £23.3m (2023: £28.1m) largely driven by timing and value of payments due.
Dividends
The Board has taken the decision that no dividend will be declared for the
52-week period to 30 March 2024 (2023: 1 pence per ordinary share) and that
the Group's resources will be focussed on growing the business.
Cashflow
£m 52 weeks 52 weeks % Change
ended ended
30 March 1 April
2024 2023
Operating cash (outflow)/inflow (10.5) 18.8 (156%)
Cash movement in working capital 16.0 (11.7) 237%
Cash generated from operations 5.5 7.1 (23%)
Income taxes paid (0.4) (2.4) 83%
Interest paid (5.0) (3.9) (28%)
Net cash inflow from operating activities 0.1 0.8 (88%)
Acquisition of businesses (0.3) (3.2) 91%
Purchases of property, plant and equipment (6.0) (7.1) 15%
Acquisition of intangible assets (3.8) (3.9) 3%
Other - 0.1 -
Net cash used in investing activities (10.0) (14.1) 29%
Proceeds from loans from non-controlling interests 3.9 0.3 1,200%
Investment from non-controlling interest 0.6 - -
Proceeds from net borrowings 17.4 6.1 185%
Repayment of loans from non-controlling interests (1.1) - -
Dividends paid (0.6) (1.8) 67%
Principle elements of lease payments (9.8) (10.3) 5%
Net cash generated by/(used in) financing activities 10.4 (5.7) 282%
Net increase/(decrease) in cash and cash equivalents 0.5 (19.0) 103%
The net increase in cash and cash equivalents of £0.5m (2023: decrease of
£19.0m) included a £11.0m drawdown of the Group's revolving credit facility
(RCF) and £1.7m of overdraft utilisation shown within proceeds from net
borrowings.
As a result of the financial performance in the period there was a cash
outflow of £10.5m (2023: inflow £18.8m). This cash outflow has been offset
by a decrease in net working capital which had a cash benefit of £16.0m
largely driven by the reduction in inventories of £15.2m as a result of the
stock optimisation program.
During the period we continued to invest, including £9.8m (2023: £11.0m) of
capital expenditure and £5.2m (2023: £4.0m) of SaaS costs shown within
operating costs. This spend supports investment in our omni-channel
distribution and international development, including the upgrade of our
warehouse management systems and business planning tool.
Borrowing Facilities
The Group had bank borrowings related to drawdowns under its RCF of £15.0m at
30 March 2024 (1 April 2023: £4.0m). The borrowings shown in the balance
sheet also include loans from minority shareholders in our Chinese
subsidiaries of £7.3m (2023: £3.5m) and an overdraft of £8.4m (2023:
£2.1m). During the period the Group acquired the 50% of the share capital of
Mulberry Japan Co. Limited owned by Onward Holding Co Limited for 1 Yen.
Pursuant to the acquisition agreement, part of the shareholder loan granted to
Mulberry Japan Co. Limited was re-paid to Onward Holding Co Limited and the
remaining loan to Mulberry Japan Co. Limited was waived resulting in a gain to
the income statement of £0.5m.
The Group's net debt balance (comprising cash and cash equivalents, less
overdrafts and borrowings) at 30 March 2024 was £16.3m (1 April 2023: net
cash of £0.7m). Net debt comprises cash balances of £7.1m (2023: £6.8m)
less bank borrowings of £23.4m (2023: £6.1m), excluding loans from related
parties and non-controlling interests of £7.3m (2023: £5.5m). Net debt also
excludes lease liabilities of £50.4m (2023: £55.3m) which are not considered
to be core borrowings.
Since the period end the Group has amended its' RCF increasing the available
funds from £15.0m to £17.5m and re-negotiated covenants to reflect the
current trading environment. The facility continues to run until 30 September
2027 with security granted in favour of its lender. The Group has also signed
a new £6.0m supplier trade finance facility which is backed by UK Export
Finance. The facility is committed for a 2-year period. In December 2023 a new
Australian $0.5m overdraft facility was signed in Australia. In addition, the
Group continues to have a £4.0m overdraft facility in the UK, which is
renewed annually. Further details regarding the bank facilities and their
projected utilisation are found in the Going Concern statement.
Key Performance Indicators
Key performance indicators (KPIs) help management to measure progress against
the Group's strategy. Currently the focus is on financial KPIs, which include
total revenue, gross margin and profit before tax, all of which are discussed
within this financial review.
Significant transactions in the period
Bond Street lease reassignment
On 3 April 2023 the Group assigned the lease on its Bond Street store which
closed in February 2023 and as a result disposed of the right-of-use asset and
released the remaining lease liabilities. Additionally, the Group has incurred
a charge for both the contribution towards lease rentals of the new assignee
and for a financial guarantee covering the remaining period of the lease. The
net charge of £0.5m is included in the Income Statement.
Investment in Mulberry Japan Co. Limited
On 27 June 2023 the Group, via its subsidiary Mulberry Trading Holding Company
Limited, acquired the 50% share capital owned by its Joint Venture partner
Onward Holding Co Limited, in Mulberry Japan Co. Limited for 1 Yen. Following
the acquisition, the Group now owns 100% of Mulberry Japan Co. Limited.
Corporate Social Responsibility - Made To Last
Just over 50 years ago, Mulberry made its first bag. Then, as now, it was made
to last. As part of our 50(th) anniversary celebrations, in 2021, we launched
our Made to Last Manifesto, formalising our commitment to responsible
innovation and to a sustainable philosophy that goes to the very heart of what
we do throughout the business. From sourcing and manufacturing to our
relationships with the communities around us, we continue to strive for the
best sustainable practices. Our ambition is to bring a contemporary take on
British heritage and a focus on responsible craft to create progressive luxury
that is made to last.
Our sustainability strategy
Made to Last is also the name given to our business sustainability strategy.
Since 2021, this strategy has driven our internal focus on the following:
1. Net Zero Future - the very centre of our strategy, aiming for net
zero carbon emissions by 2035.
2. Regenerative Sourcing - we will source all materials responsibly,
trial and introduce material innovations and transform to a regenerative and
circular business model.
3. Net Zero Manufacturing - we will measure our impact so we can
protect and enhance the environment and the livelihoods within our supply
chain.
4. Product Circularity - we will strengthen our offers that aim for a
fully circular product lifecycle, to reduce waste and encourage sustainable
consumption.
5. Inclusive Communities - we will positively impact our communities
and work for a more diverse, equitable and inclusive future.
We publish a standalone Sustainability Report setting out all our
sustainability efforts, which you can read here at Mulberry.com
https://www.mulberry.com/gb/madetolast/responsibility-report
(https://www.mulberry.com/gb/madetolast/responsibility-report) . Below is a
summary of this report.
1. Net Zero Future
Science-based targets
Since 2021, we have been working with the Carbon Trust to develop our
science-based targets, which inform companies how much and how quickly they
need to reduce their greenhouse-gas emissions to prevent the worst effects of
climate change. They are aligned to the most recent climate science, which
currently advises limiting global warming to less than 1.5 °C. We submitted
our targets to the Science Based Targets initiative (SBTi) in February 2023
and in April 2024, our near-term science-based emissions reduction targets
were approved.
Tackling climate change requires ambitious action from the luxury sector. Our
science-based targets prove that even in the challenging macro-economic
backdrop, Mulberry remains committed to sustainability and the ambitions set
out in our Made to Last Manifesto.
We are proud to be one of the first companies to use the Forest, Land and
Agriculture (FLAG) Science-Based Target-Setting Guidance to set science-based
targets that include land-based emissions reductions and removals. Despite
Mulberry's FLAG emissions only accounting for 6% of our total emissions*, we
know our influence as a luxury brand can help reshape the leather industry by
cultivating a new approach to sourcing leather by building direct
relationships through the supply chain to connect us with farmers who are
committed to regenerative agriculture.
Our approved science-based targets are:
· Mulberry commits to reduce absolute scope 1, 2 and 3 GHG
emissions by 37.8% by FY2028 from a FY2019-20 base year.
· FLAG: Mulberry commits to reduce absolute scope 3 FLAG GHG
emissions by 33.3% by FY2030 from a FY2019-20 base year. **
o Mulberry Group plc also commits to no deforestation across its primary
deforestation-linked commodities, with a target date of December 31, 2025.
*From our 2019-20 baseline footprint.
**The target includes FLAG emissions and removals.
Reporting
Global Carbon Footprint: During 2021, we worked with the Carbon Trust to
measure our global carbon footprint across Scopes 1, 2 and 3, using FY2019-20
as a baseline. Scope 1 relates to emissions from operations in our direct
control, while Scope 2 is indirect emissions from energy purchased. Scope 3
relates to indirect emissions from the value chain not in our control and not
included in Scope 2, such as in raw materials and business travel.
We updated our global carbon footprint for FY2022-23, after a period of data
gap analysis and collection. The data model created during this footprinting
exercise will serve a template for the business to use each year as data
visibility and accuracy improves across each of the Scopes and Categories of
the Greenhouse Gas Protocol. As an obligation of setting science-based
targets, Mulberry's annual global carbon footprint will be reported in its
Sustainability Report, which is available on Mulberry's website.
UK Carbon Footprint: in line with SECR requirements we have carried out a UK
carbon footprint calculation. Details of this can be found in the Directors'
Report. We continue to offset the carbon emissions associated with our UK
carbon footprint in partnership with World Land Trust, investing in their
Carbon Balanced programme.
2. Regenerative Sourcing
Sustainable leather
Bovine leather features in more than 90% of the products we make. To address
the environmental issues related to cattle farming, we are cultivating a new
approach to sourcing leather by building supply chain relationships with
farmers committed to regenerative agriculture. Since SS23, we have sourced
100% of our leather from tanneries with environmental accreditation 1
(#_ftn1) , something which we began working on in SS18. We source finished
leather directly from tanneries in the UK, Italy, Germany, Spain and Turkey.
Mulberry is a founding member of the Sustainable Leather Foundation (SLF). SLF
provides a partnership platform for all stakeholders involved in the leather
industry, as well as an audit and certification standard for organisations
involved in the manufacture of leather, to measure their Environmental, Social
and Governance performance against a set of recognised standards and limits.
This industry standard includes a Social Audit Module, gathering data on wages
& benefits, compulsory labour, worker age, working hours, staff
development and representation ethical business practices and
non-discrimination practices. Mulberry has a representative on SLF's Advisory
Board, ensuring the ongoing evolution of the Social Audit Module meets the
needs of brands and consumers.
Material innovation
We source a variety of fabrics, materials and other components to create our
collections and look to ensure their credentials align with our low-impact
materials strategy. Our approach so far has been to make rolling changes to
our conventional materials, such as cotton, as we develop each seasonal range,
to improve its sustainability credentials.
We continue to introduce new, innovative lower impact materials into our
collections to replace conventional materials, such as Eco-Scotchgrain, as
well as increasing the percentage of certified materials within each range,
such as GOTS and Better Cotton.
Sourcing transparency
Our international supply chain is based on sourcing quality raw materials and
finished products which meet our quality and environmental expectations.
Alongside our UK manufacturing facilities, we source from a select Group of
long-standing partners in Italy, Turkey, China and Vietnam. We work with
countries that have established skills and heritage within the leather
industry and that can support our high-quality standards and progressive
new-product-development programmes.
All our suppliers have signed up to our Global Sourcing Principles, which set
out our minimum requirements for conducting business, including those of
international law such as the ILO's four fundamental principles for rights at
work: no child labour, no forced labour, no discrimination and the right to
freedom of association and collective bargaining. Mulberry conducts regular
audits of our finished goods suppliers using third party independent auditors.
The audits are carried out against the Ethical Trade Initiative (ETI) Basecode
and our Global Sourcing Principles. Generally, audits are semi-announced,
meaning the supplier is informed of a 2-week window in which the audit will
take place. Where non-compliances are found against the ETI Basecode or our
Global Sourcing Principles, a corrective action is agreed between the auditor
and the supplier. Satisfactory completion of these corrective actions is
assessed by Mulberry's trained internal auditors and/or the Sustainability
department and verified by a third-party independent auditor where necessary.
Each year, the Sustainability department send a Supplier Questionnaire to all
Tier 1 and Tier 2 suppliers. This year we achieved a 76% response rate with
over 90 responses recorded. To bolster transparency in the fashion industry,
we now publicly share information identifying specific companies in our supply
chain. This list will be updated annually.
3. Net Zero Manufacturing
Made in the UK
Our presence in the south-west of England harks back to our beginnings in
1971. The Rookery opened in Chilcompton in 1989 and is our centre of
excellence for product development and home to our development team, artisan
studio and Lifetime Service Centre. Our second UK factory, The Willows, opened
in Bridgwater in 2013 and is our main production site in the UK, housing seven
production lines. At The Willows and The Rookery, we employ more than 400
people. Craftspeople joining follow a comprehensive training programme that
equips them with the skills needed to craft Mulberry bags, whether that's
cutting leather, edge inking, stitching or quality inspection.
Both The Rookery and The Willows have been carbon-neutral since 2019 and our
newly installed solar panels on the roof of The Willows generate renewable.
Both sites work with waste service providers who ensure no unrecyclable waste
goes to landfill and is recovered as energy instead. The cutting machines we
use minimise our cutting waste and we donate any unusable leather offcuts to
local craft groups, universities, schools and scrap stores. We regularly host
educational tours for colleges and university classes to engage the next
generation of talent in our heritage manufacturing in Somerset.
In response to employee feedback after the COVID-19 pandemic, we now operate a
4-day working week in our factories, giving a greater work/life balance to our
Craftspeople.
4. Product Circularity
The Mulberry Exchange
Mulberry bags are designed to lead many lives, so in 2020 we launched The
Mulberry Exchange, our resale platform through which customers can trade in
their existing Mulberry bags for credit towards a new purchase. Once we have
bought back these pre-loved pieces, we authenticate and rejuvenate each bag
before finding them loving new homes.
Repairs and restoration
Our Lifetime Service Centre has been rejuvenating thousands of well-loved bags
for over 35 years. We know that our customers cherish, keep and care for their
Mulberry bags and we support their commitment by offering accessible artisanal
repair services. The team within our Lifetime Service Centre at The Rookery
factory are masters of restoration, breathing new life into thousands of
pre-loved Mulberry pieces every year.
Waste and recycling
In the UK, we work with providers such as Biffa and First Mile to process any
non-recyclable waste that would traditionally go to landfill, to create
electricity for the National Grid. We send our mixed recycling for sorting so
it can be reprocessed into new products.
We have a zero-tolerance policy on destroying quality goods. We divert unsold
seasonal stock to our global network of outlet stores, hold sample sales for
customers and also hold an annual employee sale of samples and stock, with
proceeds added to our Somerset Community Fund, or other charitable causes.
We create our green carrier bags from CupCycling, an innovative technology
that repurposes coffee cups into paper, while also separating the cups'
plastic lining for recycling. Since we started, we have repurposed over
4million coffee cups that would otherwise have been sent to landfill.
All our customer packaging is recyclable or reusable and we are working with
our partners and suppliers to eliminate all disposable plastic from Mulberry's
business-to-business operations.
5. Inclusive Communities
Culture and wellbeing
All our employees are ambassadors for Mulberry and we encourage them to live
our employee values, which we believe help foster a culture of wellbeing and
acceptance, where everyone is celebrated for their individuality. In our
culture and environment, all employees can thrive, irrespective of their
gender identity, sexual orientation, marital and civil partnership status,
parental status, race or ethnicity, religion or religious belief, political
opinion, physical appearance, age or disability. All our employees can access
our intranet - The Tree - where we post company information, updates and
employee achievements and encourage communication.
Diversity, equity and inclusion
To ensure we are successful in creating this environment for our employees,
our Diversity, Equity and Inclusion (DE&I) Committee meets regularly to
discuss our DE&I Strategy, as well as current news, personal experiences
and those of our colleagues. The committee also works with the marketing
department to create a communications calendar, recognising key moments such
as International Women's Day, Mental Health awareness, Pride and Black History
Month. This helps us reflect on and celebrate the success of our diverse
employees.
This year saw the launch of several Employee Resource Groups (ERGs) to ensure
focussed discussion and awareness building on key topics. These are internal
communities of Mulberry employees with shared identities and interests,
brought to together to drive activities and progression across DE&I
topics, formally supported by the business.
Gender equality
Since the publication of our last Gender Pay Gap Report, we are pleased to
have seen a reduction in the mean hourly pay gap year on year of nearly 5%. We
have continued to see a further increase in favour of women in our median pay
gap from -5.2% last year to -15.9% this year. We have seen growth in the
representation of women at a Senior Leadership level to 76% and we are pleased
that Senior Leader representation is now in line with the percentage of women
in our UK business (also 76%). We are confident that this increase in
representation has aided the improvement in our mean pay gap year on year.
Our workforce demographic means that the majority of employees, across Retail
and Supply Chain, are on structured pay scales. Our corporate employees are
on undefined pay scales, but we have utilised benchmarking to review salaries
and believe this has also contributed to the improvements seen in our gender
pay gap. As with last year, we continue to be ahead in comparison to
industry data. The Office of National Statistics benchmark for full time
employees median pay in April 2023 was 7.7% in favour of men, whereas Mulberry
is -15.9% in favour of women.
Living Wage Employer
We are proud to be an accredited Living Wage Employer since 2020. This means
that all UK employees will earn higher than the Government's minimum or
National Living Wage. Living Wage is an independently calculated hourly pay
rate based on the actual cost of living, calculated each year by the Living
Wage Foundation. We continue to use available global benchmarks and insights
to ensure our global employees earn a living wage comparable with their
location.
Apprenticeships
Since 2006, we have operated a leather goods manufacturing apprenticeship
programme in conjunction with Bridgwater and Taunton College, which we run at
The Willows and The Rookery.
In 2017, we were Lead Employer in a national trailblazer Group, developing the
Level 2 Leather Craftsperson Standard apprenticeship, which has since become
industry-recognised, offering graded results for apprentices in the leather
goods' industries.
Our Leather Goods Manufacturing apprenticeship programme continues to support
the upskilling of workers into the leather goods industry and in the period
saw us employ 4 new apprentices into the scheme. The programme has been
reinvigorated to encourage cross functional learning across several
departments within Mulberry, expanding the apprentices experience and
providing more exposure to the business.
Our progress so far
Leather
· Since the Spring Summer 23 season, 100% of our leather, suede and
nappa is sourced from tanneries with environmental accreditations
· Over 5 years, we worked with our tannery partners whilst they
improved their environmental standards and achieved certification, stimulating
positive change within the leather industry - as well as onboarding new
tanneries with existing certificates
· We are a founding partner of the Sustainable Leather Foundation
and members of Leather Working Group since 2012
· We are partnering with British Pasture Leather to build
relationships with regenerative farmers and establish an end-to-end UK supply
chain
Link to theme 2
Other low-impact materials
· All nylon sourced as 100%-certified recycled nylon or ECONYL
since Spring 2020
· Continue to represent low impact materials throughout our
collections, including bio-acetate and Eco-Scotchgrain
Link to theme 2
Carbon
· All UK operations carbon-neutral since 2019. This is achieved by
supporting World Land Trust's Carbon Balanced programme which empowers local
communities while tackling climate change and biodiversity loss
· In 2023, we invested in a 360kW solar photovoltaic array for the
roof of The Willows, our second UK factory in Somerset. This will generate ten
times more renewable electricity than the current system, which was installed
during the factory build in 2013
· Signatory of UN Fashion Industry Charter for Climate Action
· In April 2024, our near-term science-based emissions reduction
targets were approved by the Science Based Targets initiative (SBTi), a
process which we started in 2021.
· We have conducted a detailed life cycle analysis on two of our
most popular bags, the Lily and the Bayswater, to allow us to make more
informed decisions about our Scope 3 reduction strategy
Link to theme 1, 3
Product circularity
· Launched circular resell and buy-back programme, The Mulberry
Exchange, in February 2020
· Lifetime Service Centre restored more than 10,000 bags in
FY2023-24
· Launched Mulberry x Stefan Cooke, a limited-edition capsule of
pre-loved Mulberry pieces, artfully reimagined by the independent British
design duo. The collection was launched at Stefan Cooke's SS24 show at London
Fashion Week and comprised of a 27-piece collection of vintage Mulberry icons,
recontextualised with Stefan Cooke's signature design codes of bold bow
appliqué and statement slash motifs
Link to theme 4
Packaging
· Cupcycling introduced into customer packaging in January 2020,
repurposing over 4.0 million coffee cups to make Mulberry Green paper
· All our paper and card is FSC certified
· All our customer packaging is recyclable or reusable and we are
working with our partners and suppliers to eliminate all disposable plastic
from Mulberry's business-to-business operations
Link to theme 4
People and community
· We grant all employees two days of paid volunteering each year.
This equated to over 1,000 volunteering hours utilised by Mulberry employees
in 2023
· We have raised £67,990 in the period for The Felix Project and
their Empty Plate Emergency Appeal. This equates to 191,171 meals
· Ongoing partnership with World Land Trust, our environmental
charity partner, funding their Carbon Balanced programme, which supports the
REDD+ Project for Caribbean Guatemala: The Conservation Coast
· In September 2021, we began a long-term partnership and set up a
charitable fund with Somerset Community Foundation to help people in Somerset
through funding local charities, Groups and communities, inspiring giving and
philanthropy. Since launching the partnership, we have donated over £45,000
to support local charities and community groups in and around Somerset
· We continue to manufacture over half of our bags in the UK and
invest in our thriving apprenticeship programme and Next Generation retail
concept
· The DE&I Committee launched Employee Resource Groups (ERGS),
which are internal communities of Mulberry employees with shared identities
and interests, brought together to drive activities and progression across the
DE&I topics, formally supported by the business. Our ERGs are: Women at
Mulberry, Pride, Mental Health and Wellbeing, Accessibility, Disability &
Neurodiversity and Ethnicity and Culture
· Our ongoing partnership with Mentoring Matters uses our teams'
insight and expertise to facilitate greater access to the fashion industry for
underrepresented and marginalised groups, endeavouring to improve diversity
and inclusion within the creative industries
Link to theme 5
GOING CONCERN
In determining whether the Group's accounts can be prepared on a going concern
basis, the Directors considered the Group's business activities and cash
requirements together with factors likely to affect its performance and
financial position. The going concern period reviews the 12-month period from
the date of this announcement to the end of September 2025.
The Group's business activities, together with the factors likely to affect
its future development, performance and financial position are set out in the
Strategic Report.
The Group had a net asset position of £10.9m at 30 March 2024, however, the
net asset position decreased from £46.8m at 1 April 2023, reflecting losses
in the year.
These losses reflect the Group being impacted by the challenging macroeconomic
environment. These headwinds have continued since the period-end, placing
further pressure on the Group's performance, however, the Group continues to
take appropriate cost actions, manage inventory levels and drive commercial
initiatives to improve profitability and cash generation.
Since the period end, the following actions have also been implemented:
· The appointment of a new Chief Executive Officer, Andrea Baldo,
on 1 September 2024.
· Debt facilities increased to £27.5m, with covenants renegotiated
to reflect the current trading environment. The Group continues to maintain a
good working relationship with its bankers.
· The announcement on 27 September 2024 of a new subscription in
ordinary shares by Challice, the majority shareholder, to raise not less than
£10m to strengthen the balance sheet, including a right of clawback under the
subscription by other shareholders on a pro-rata basis.
Borrowing facilities
The Group's net debt balance at 30 March 2024 was £16.3m (2023: net cash of
£0.7m), with available liquidity of £2.0m. Net debt comprises cash balances
of £7.1m (2023: £6.8m) less bank borrowings of £23.4m (2023: £6.1m). Bank
borrowings related to drawdowns under its RCF of £15.0m (2023: £4.0m) and an
overdraft of £7.1m (2023: £6.8m).
The RCF was drawn down by £17.5m at the date of this report. The Group had
net debt of £16.0m at 27 September 2024, with available liquidity of £11.5m
which includes £3.7m headroom on the overdraft facility and £4.8m on the
supplier trade finance facility.
Since the period end the Group has amended its' RCF increasing the available
funds from £15.0m to £17.5m and re-negotiated covenants (waived at period
end date) to reflect the current trading environment. The facility continues
to run until 30 September 2027 with security granted in favour of its lender.
The Group has also signed a new £6.0m supplier trade finance facility with
its lender, which is backed by UK Export Finance. The facility is committed
for a 2-year period. The Group continues to have access to a £4.0m overdraft
facility which is not a committed facility and therefore not considered by the
Directors as part of the going concern assessment. The Group overdraft is
renewed annually in July.
Base case scenario
The Directors' base case scenario, which includes the proceeds from the
shareholder subscription, assumes a 5% revenue reduction versus 2023/24
primarily driven by the ongoing adverse macro-economic conditions, especially
in the UK and China. It also includes cost increases relating to inflationary
cost pressures, offset by cost savings such as headcount reduction and the
closure of certain stores, in light of the current trading environment, which
were actioned and agreed before the start of the financial year. The Directors
compared the base case scenario against external analysis which supported our
strategic approach and revenue assumptions, including market opportunities.
Under this scenario, covenants will be met, however, it is anticipated the RCF
will continue to be required between April 2024 and November 2024.
Downside scenario
The Directors have considered a downside scenario, which models out the risk
in the UK and Asia Pacific, which are considered the main regions which could
impact full-year revenue. This scenario includes a number of mitigating
actions, with further actions available. The impact of this would result in a
9% reduction in Group revenue against the base case scenario at which point
there is no covenant breach.
Reverse stress test
The Directors have prepared a reverse stress test scenario that models the
decline in sales that the Group would be able to absorb before triggering a
covenant breach. The reverse stress test shows that Group revenue could fall
by 14% versus the base case scenario before a covenant breach in September
2025. It should be noted that the RCF is not forecast to be fully drawn down
under the reverse stress test.
Under these circumstances, it is forecast that the decline in sales could in
part be offset by an increase in mark-down sales and promotional activity.
When this is included, Group revenue could fall by 23% versus the base case
before a covenant breach in September 2025. Once further mitigating actions
are applied, this increases to 43%.
Consideration of the key factors in the going concern assessment:
· Current trading in comparison to budget is outperforming the
reverse stress scenario;
· Revenue in the reverse stress test scenario would be below the
level achieved in 2023/24;
· The reduction in inventories during the period (£15.1m)
demonstrates that inventory levels can be managed;
· If trading was to be challenging over the key trading periods,
there is time to react and take further mitigating actions before a covenant
breach in September 2025, including stock optimisation programmes to manage
inventory levels and cost reduction activities, including store and concession
closures where appropriate. We continue to maintain a good working
relationship with our bankers.
Basis of going concern statement
Under the base case scenario, the Group is expected to have sufficient cash
resources to meet their obligations over the going concern period. This
includes having sufficient headroom against the Group's covenants.
The downside scenario includes sensitivities that reduce forecast cash
generation due to a 9% reduction in Group revenue versus the base case. Under
this scenario the Group continues to have sufficient headroom against the
Group's covenants.
The reverse stress test shows that Group revenue could fall by 14% versus the
base case before a covenant breach in September 2025, however, once additional
mark-down sales and promotional activity and further mitigating actions are
applied, this increases to 43%.
For these reasons and the assessment outlined above, the Directors remain
confident that the Group has access to adequate resources to enable it to
continue to operate as a going concern for the foreseeable future. Should
there be an extreme and prolonged decline in trading performance which is over
and above the current trading levels and the level of mitigating actions
including promotional activity was not achieved, then the Group would breach
its covenants during the going concern period. This gives rise to a material
uncertainty, which may cast significant doubt on the Group and parent
company's ability to continue as a going concern, meaning it may be unable to
realise its assets and discharge its liabilities in the normal course of
business. Notwithstanding this material uncertainty, the Directors consider it
appropriate for the Group to continue to adopt the going concern basis of
accounting in preparing the Annual Report and financial statements. As noted
above, in the event of a decline in revenue, a number of mitigating items are
available to the Group, including stock optimisation programmes to manage
inventory levels and cost reduction activities, including store and concession
closures where appropriate. We maintain a good working relationship with our
bankers and shareholders, as demonstrated by the recent increase in debt
facilities and the announcement on 27 September 2024 of a new subscription in
ordinary shares by Challice, the majority shareholder, to raise not less than
£10m that will strengthen the balance sheet.
Group income statement
52 WEEKS ENDED 30 MARCH 2024
52 weeks ended 52 weeks ended
30 March 1 April
2024 2023
£'000 £'000
Revenue 152,844 159,129
Cost of sales (45,704) (45,879)
Gross profit 107,140 113,250
Impairment charge relating to intangibles - (2,366)
Impairment (charge)/credit relating to property, plant and equipment (1,239) 850
Impairment (charge)/credit relating to right-of-use assets (7,334) 12,949
Other operating expenses (128,938) (108,485)
Other operating income 1,234 776
Operating (loss)/profit (29,137) 16,974
Share of results of associates 31 52
Finance income 1 11
Finance expense (5,019) (3,887)
(Loss)/profit before tax (34,124) 13,150
Tax (860) (1,753)
(Loss)/profit for the period (34,984) 11,397
Attributable to:
Equity holders of the parent (33,505) 13,243
Non-controlling interests (1,479) (1,846)
(Loss)/profit for the period (34,984) 11,397
Basic (loss)/profit per share (58.6p) 19.1p
Diluted (loss)/profit per share (58.6p) 19.1p
All activities arise from continuing operations.
Group statement of comprehensive income
52 WEEKS ENDED 30 MARCH 2024
52 weeks 52 weeks ended
ended 1 April
30 March 2023
2024 £'000
£'000
(Loss)/profit for the period (34,984) 11,397
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations (1,105) (483)
Total comprehensive (expense)/income for the period (36,089) 10,914
Attributable to:
Equity holders of the parent (34,773) 12,888
Non-controlling interests (1,316) (1,974)
Total comprehensive (expense)/income for the period (36,089) 10,914
Group balance sheet
AS AT 30 MARCH 2024
30 March 2024 1 April
£'000 2023
£'000
Non-current assets
Intangible assets 8,700 6,015
Property, plant and equipment 18,754 19,817
Right-of-use assets 34,307 57,520
Interests in associates 206 254
Deferred tax asset - 622
61,967 84,228
Current assets
Inventories 33,159 48,250
Trade and other receivables 15,453 19,901
Cash and cash equivalents 7,138 6,872
55,750 75,023
Total assets 117,717 159,251
Current liabilities
Trade and other (23,354) (28,143)
payables
Current tax liability (123) (182)
Lease liabilities (9,909) (10,932)
Borrowings (23,474) (11,562)
(56,860) (50,819)
Net current (liabilities)/assets (1,110) 24,204
Non-current liabilities
Trade and other (2,155) -
payables
Lease liabilities (40,485) (61,666)
Borrowings (7,338) -
(49,978) (61,666)
Total liabilities (106,838) (112,485)
Net assets 10,879 46,766
Equity
Share capital 3,004 3,004
Share premium account 12,160 12,160
Own share reserve (438) (896)
Capital redemption reserve 154 154
Foreign exchange reserve (430) 675
Retained earnings 2,955 38,110
Equity attributable to holders of the parent 17,405 53,207
Non-controlling interests (6,526) (6,441)
Total equity 10,879 46,766
The financial statements of Mulberry Group plc (company number 01180514) were
approved by the Board of Directors and authorised for issue on 27 September
2024.
They were signed on its behalf by:
Charles Anderson
Director
Group statement of changes in equity
52 WEEKS ENDED 30 MARCH 2024
Share Share premium account Own share reserve Capital redemption reserve Foreign exchange reserve Retained earnings Total Non-controlling interests Total
capital £'000 £'000 £'000 £'000 £'000 £'000 £'000 equity
£'000 £'000
Balance at 2 April 2022 3,004 12,160 (1,269) 154 1,158 27,006 42,213 (4,467) 37,746
Profit/(loss) for the period - - - - - 13,243 13,243 (1,846) 11,397
Other comprehensive expense for the period - - - - (483) - (483) - (483)
Total comprehensive (expense)/income for the period - - - - (483) 13,243 12,760 (1,846) 10,914
Charge for employee share-based payments - - - - - 23 23 - 23
Own shares - - 346 - - - 346 - 346
Exercise of share options - - - - - (346) (346) - (346)
Impairment of shares in trust - - 27 - - (27) - - - -
Non-controlling interest foreign exchange - - - - - - - (128) (128)
Dividends paid - - - - - (1,789) (1,789) - (1,789)
Balance at 1 April 2023 3,004 12,160 (896) 154 675 38,110 53,207 (6,441) 46,766
Loss for the period - - - - - (33,505) (33,505) (1,479) (34,984)
Other comprehensive expense for the period - - -- - (1,105) - (1,105) - (1,105)
Total comprehensive expense for the period - - -- - (1,105) (33,505) (34,610) (1,479) (36,089)
Charge for employee share-based payments - - - - - 25 25 - 25
Impairment of shares in trust - - 458 - - (458) - - -
Adjustment arising from investment by non-controlling interests - - - - - - - 611 611
Adjustment arising from acquisition of non-controlling interests - - - - - (620) (620) 620 -
Non-controlling interest foreign exchange - - - - - - - 163 163
Dividends paid - - - - - (597) (597) - (597)
Balance at 30 March 2024 3,004 12,160 (438) 154 (430) 2,955 17,405 (6,526) 10,879
Group cash flow statement
52 WEEKS ENDED 30 MARCH 2024
52 weeks ended 52 weeks ended
30 March 1 April 2023
2024 £'000
£'000
Operating (loss)/profit for the period (29,137) 16,974
Adjustments for:
Depreciation and impairment of property, plant and equipment 6,191 3,487
Depreciation and impairment of right-of-use assets 16,654 (5,021)
Amortisation and impairment of intangible assets 1,760 4,041
Gain on lease modification and lease disposals (6,100) (441)
Loss on sale of property, plant and equipment 601 96
Business combination gain - (304)
Loss on disposal of intangible assets 29 -
Gain on waiver of loan from non-controlling interest (504) -
Share-based payments expense 25 23
Operating cash (outflow)/inflow (10,481) 18,855
before movements in working capital
Decrease/(increase) in inventories 15,188 (9,722)
Decrease/(increase) in receivables 4,495 (3,974)
(Decrease)/increase in payables (3,707) 2,001
Cash generated from operations 5,495 7,160
Income taxes paid (343) (2,427)
Interest paid (5,019) (3,899)
Net cash inflow from operating activities 133 834
Investing activities:
Interest received 1 15
Acquisition of businesses (238) (3,182)
Purchases of property, plant and equipment (5,948) (7,129)
Proceeds from disposal of property, plant and equipment - 2
Acquisition of intangible assets (3,835) (3,919)
Dividend received from associate - 40
Net cash used in from investing activities (10,020) (14,173)
Financing activities:
Proceeds from loans from non-controlling interests 3,934 246
Investment from non-controlling interest 611 -
Proceeds from new borrowings 17,374 6,100
Repayment of loans from non-controlling interests (1,171) -
Dividends paid (597) (1,789)
Principle elements of lease payments (9,802) (10,261)
Net cash generated by /(used in) financing activities 10,349 (5,704)
Net increase/(decrease) in cash and cash equivalents 462 (19,043)
Cash and cash equivalents at beginning of period 6,872 25,669
Effect of foreign exchange rate changes (196) 246
Cash and cash equivalents at end of period 7,138 6,872
Cash and cash equivalents comprise cash and short-term bank deposits with an
original maturity of three months or less. The carrying amount of these assets
at the end of the reporting period as shown in the consolidated statement of
cash flows can be reconciled to the related items in the Consolidated balance
sheet position as shown above. Cash and cash equivalents does not include bank
overdrafts that are not integral to the cash management of the Group.
1. GENERAL INFORMATION AND STATEMENT OF COMPLIANCE
Mulberry Group plc is a public company, limited by shares, incorporated in the
United Kingdom under the Companies Act 2006 and is registered in England and
Wales.
These financial statements are presented in pounds Sterling because that is
the currency of the primary economic environment in which the Group operates.
The consolidated financial statements have been prepared in accordance with
UK-adopted International Accounting Standards.
The financial information set out in this document does not constitute the
Group's statutory accounts for the period ended 30 March 2024 or the period
ended 31 March 2023 but is derived from those accounts.
Statutory accounts for the period ended 31 March 2023 have been delivered to
the registrar of companies. The auditors have reported on those accounts;
their report was (a) unqualified, and (ii) did not contain a statement under
section 498 (2) or (3) of the Companies Act 2006.
Statutory accounts for the period ended 30 March 2024 will be delivered to the
registrar of companies in due course. The auditors have reported on those
accounts; their report was (i) unqualified, and (ii) did not contain a
statement under section 498 (2) or (3) of the Companies Act 2006. The
Auditor's report on these accounts did contain an emphasis of matter in
relation to the fact that a material uncertainty existed that may cast doubt
on the Group's ability to continue as a going concern. As set out above the
directors have identified a material uncertainty which may cast significant
doubt on the entity's ability to continue as a going concern, meaning it may
be unable to realise it assets and discharge its liabilities in the normal
course of business. Notwithstanding this material uncertainty, the Directors
consider it remains appropriate to continue to adopt the going concern basis
in the preparation of the financial statements.
The financial statements for the period ended 30 March 2024 (including the
comparatives for the period ended 31 March 2023) were approved and authorised
for issue by the Board of Directors on 27 September 2024.
This results announcement for the period ended 30 March 2024 was also approved
by the Board on 27 September 2024. Whilst the financial information included
in this statement has been compiled in accordance with the recognition and
measurement principles of UK-adopted International Accounting Standards, this
statement does not itself contain sufficient information to comply with
UK-adopted International Accounting Standards. Full Financial Statements that
comply with IFRS are included in the 2024 Annual Report.
2. ADOPTION OF NEW AND REVISED STANDARDS
New and amended standards adopted by the Group
In the current period, the Group has applied a number of amendments to IFRS
Standards issued by the International Accounting Standards Board (IASB) that
are mandatorily effective for an accounting period that begins on or after 1
January 2024. Their adoption has not had any material impact on the
disclosures or on the amounts reported in these financial statements.
At the date of approval of these financial statements, the Group has not
applied any new and revised IFRS Standards that have been issued but are not
yet effective.
The Directors do not expect that the adoption any Standards which have been
issued but not yet effective to have a material impact on the financial
statements of the Group in future periods.
3. SIGNIFICANT ACCOUNTING POLICIES
Basis of accounting
The financial statements have been prepared in accordance with UK-adopted
International Accounting Standards in conformity with the requirements of the
Companies Act 2006.
For the period ended 30 March 2024, the financial period runs for the 52 weeks
to 30 March 2024 (2023: 52 weeks ended 1 April 2023).
The financial statements are prepared under the historical cost basis except
for financial instruments that are measured at fair values at the end of each
reporting period as explained in the accounting policies below. The principal
accounting policies adopted are set out below.
Going concern
The Directors have, at the time of approving the financial statements, a
reasonable expectation that the Company and the Group have adequate resources
to continue in operational existence for the foreseeable future. As a result,
they continue to adopt the going concern basis of accounting in preparing the
financial statements.
4. BUSINESS AND GEOGRAPHICAL SEGMENTS
IFRS 8 requires operating 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 (CODM), defined as the Board of Directors, to
allocate resources to the segments and to assess their performance.
Inter-segment pricing is determined on an arm's length basis. The Group also
presents analysis by geographical destination and product categories.
(a) Business segment
The Group continues to extend its omni-channel network in order to support the
Group's global growth ambitions. Mulberry has thus become increasingly reliant
on individual market-level profitability metrics to enable them to make timely
market-centric decisions that are operational and investment in nature. It is
therefore appropriate for the segmental analysis disclosures to be a regional
view of segments (being UK, Asia Pacific and Other International) to reflect
the current business operations and the way the business internally reports
and the information that the CODM reviews and makes strategic decisions based
on its financial results.
The principal activities are as follows:
The Group designs, manufactures and manages the Mulberry brand for the segment
and therefore the finance income and expense are not attributable to the
reportable segments.
The accounting policies of the reportable segments are the same as described
in the Group's financial statements. Information regarding the results of the
reportable segment is included below. Performance for the segment is assessed
based on operating profit/(loss).
Group income statement
52 weeks ended 30 March 2024
UK Asia Pacific Other International Eliminations Total
£'000 £'000 £'000 £'000 £'000
Revenue
Omni-Channel 137,130 27,711 22,339 (52,437) 134,743
Franchise & wholesale 1,490 3,650 12,961 18,101
Total revenue 138,620 31,361 35,300 (52,437) 152,844
Segment (loss)/profit (21,854) (396) 4,940 (17,310)
Central costs (294)
Store closure expense (1,576)
Restructuring costs (1,241)
Impairment of property, plant and equipment (1,239)
Impairment of right-of-use assets (7,334)
Project costs (647)
Gain on waiver of loan 504
Operating loss (29,137)
Share of results of associates 31
Finance income 1
Finance expense (5,019)
Loss before tax (34,124)
UK Asia Pacific Other International Central Total
£'000 £'000 £'000 £'000 £'000
Segment capital expenditure 7,828 2,182 417 56 10,483
Segment depreciation, amortisation and of impairment 11,604 8,452 2,633 1,916 24,605
Segment assets 84,008 16,266 9,692 7,751 117,717
Segment liabilities 72,158 17,605 9,669 7,406 106,838
Group income statement
52 weeks ended 1 April 2023
UK Asia Pacific Other International Eliminations Total
£'000 £'000 £'000 £'000 £'000
Revenue
Omni-Channel 171,615 27,234 13,073 (77,677) 134,245
Franchise and wholesale 4,918 4,254 15,712 24,884
Total revenue 176,533 31,488 28,785 (77,677) 159,129
Segment profit/(loss) 533 (1,222) 12,398 11,709
Central costs (5,374)
Store closure credit 205
Impairment of property, plant and equipment 850
Impairment of right-of-use assets 12,949
Impairment of intangible (2,366)
Australia acquisition costs (806)
Sweden acquisition costs (193)
Operating profit 16,974
Share of results of associates 52
Finance income 11
Finance expense (3,887)
Profit before tax 13,150
UK Asia Pacific Other International Central Total
£'000 £'000 £'000 £'000 £'000
Segment capital expenditure 7,866 1,101 1,731 138 10,836
Segment depreciation and amortisation net of impairment (6,142) 4,942 1,747 1,960 2,507
Segment assets 108,065 27,812 14,539 8,213 158,629
Segment liabilities 72,006 16,312 13,877 10,290 112,485
For the purposes of monitoring the segment performance and allocating
resources the Chief Operating Decision Maker, which is deemed to be the Board,
monitors the tangible, intangible and financial assets. All assets are
allocated to the reportable segment.
(b) Product categories
Leather accessories account for over 90% of the Group's revenues, of which
bags represent over 80% of revenues. Other important product categories
include small leather goods, shoes, soft accessories and women's
ready-to-wear. Net asset information is not allocated by product category.
5. ALTERNATIVE PERFORMANCE MEASURES
A reconciliation of reported (loss)/profit before tax to underlying
(loss)/profit before tax is set out below;
Reconciliation to underlying (loss)/profit before tax: 52 weeks ended 52 weeks ended
30 March 1 April
2024 2023
£'000 £'000
(Loss)/profit before tax (34,124) 13,150
Store closure charge/(credit) 1,576 (205)
Restructuring costs 1,241 -
Impairment charge/(credit) related to property, plant and equipment 1,239 (850)
Impairment charge/(credit) related to right-of-use assets 7,334 (12,949)
Project costs written off 647 -
Gain on waiver of loan from non-controlling interest (504) -
Impairment charge related to intangibles - 2,366
Australia acquisition costs - 806
Sweden acquisition costs - 193
Underlying (loss)/profit before tax - non-GAAP measure (22,591) 2,511
Adjusted basic (loss)/earnings per share (40.1p) 5.8p
Adjusted diluted (loss)/earnings per share (40.1p) 5.8p
In reporting financial information, the Group presents Alternative Performance
Measures ("APMs"), which are not defined or specified under the requirements
of IFRS. The Group believes that these APMs, which are not considered to be a
substitute for, or superior to, IFRS measures, provide stakeholders with
additional helpful information on the performance of the business. These APMs
are consistent with how the business performance is planned and reported
within the internal management reporting to the Board of Directors. Some of
these measures are also used for the purpose of setting remuneration targets.
The Group makes certain adjustments to the statutory profit or loss measures
in order to derive APMs. Adjusting items are those items which, in the opinion
of the Directors, should be excluded in order to provide a consistent and
comparable view of the performance of the Group's ongoing business. Generally,
this will include those items that are largely one-off and material in nature
as well as income or expenses relating to acquisitions or disposals of
businesses or other transactions of a similar nature. Treatment as an
adjusting item provides stakeholders with additional useful information to
assess the year-on-year trading performance of the Group.
Store closure charge/(credit)
During the period one international store was closed (2023: one UK and one
international store). The lease on the UK store that had been closed in the
prior period was assigned on 3 April 2023. The store closure charge/(credit)
relates to the following items (released)/charged to the Income Statement :-
52 weeks ended 52 weeks ended
30 March 1 April
2024 2023
£'000 £'000
Release of lease and other liabilities (17,711) (635)
Write-off of right-of -use assets 11,777 -
Contribution towards new lessee rentals 5,205 -
Financial guarantee for remaining lease rentals 2,155
Lease exit and redundancy costs 150 430
1,576 (205)
The disposal of the leases resulted in net cash proceeds of £nil (2023:nil).
Impairment charge related to property, plant and equipment and right-of-use
assets;
The fixed assets and right-of-use assets of retail stores are subject to
impairment based on whether current or future events and conditions suggest
that their recoverable amount may be less than their carrying value. The
recoverable amount of each store is based on the higher of the value in use
and fair value less costs to dispose. Value in use is calculated from expected
future cash flows using suitable discount rates, management assumptions and
estimates on future performance. The carrying value for each store is
considered net of the carrying value of any cash contribution received in
relation to that store. For impairment testing purposes, the Group has
determined that each store is a separate cash-generating unit (CGU). Each CGU
is tested for impairment if any indicators of impairment have been identified.
The value in use of each CGU is calculated based on the Group's latest budget
and forecast cash flows. Cash flows are discounted using the weighted average
cost of capital ("WACC") and are modelled for each store through to their
lease expiry or break date. No lease extensions have been assumed when
forecasting. The Group also tests whether there should be any reversal of
previously impaired assets. The results of this assessment are shown in the
table below :-
52 weeks ended 52 weeks ended
30 March 1 April
2024 2023
£'000 £'000
Impairment charge related to property, plant and equipment - 9 stores (2023: 1 1,438 204
store)
Reversal of impairment charge related to property, plant and equipment - 1 (199) (1,054)
store (2023: 1 store)
Net impairment charge/(credit) related to property, plant and equipment 1,239 (850)
Impairment charge related to right-of-use assets - 9 stores (2023: 2 stores) 8,443 773
Reversal of impairment charge related to right-of-use assets - 1 stores (2023: (1,109) (13,722)
2 stores) (1)
Net impairment charge/(credit) related to right-of-use assets 7,334 (12,949)
(1) The balance relates to a reversal of a previous impairment of our
Regent Street store. This store has seen improved performance post the Bond
Street closure, which we anticipate to continue.
Impairment charge related to intangibles
Goodwill represented the opportunity to grow by utilising an established
distribution network in Korea. Acquired goodwill is regarded as having an
indefinite life and under IAS36 is not subject to amortisation but is subject
to annual tests for impairment. As a result of this assessment the Group
incurred an impairment charge during the previous period of £2,366,000.
Australia acquisition costs
During the previous period the Group incurred costs of £806,000 (net of a
business combination gain of £304,000) on the acquisition of 5 stores in
Australia.
Sweden acquisition costs
During the previous period the Group incurred costs of £193,000 on the
acquisition of 3 stores in Sweden.
6. OTHER OPERATING EXPENSES
52 weeks ended 52 weeks ended
30 March 1 April
2024 2023
£'000 £'000
Other operating expenses have been arrived at after charging/(crediting):
Impairment of intangible assets - 2,366
Impairment of property, plant and equipment 1,239 (850)
Impairment of right-of-use assets 7,334 (12,949)
Amortisation of intangible assets 1,760 1,675
Depreciation of property, plant and equipment 4,952 4,337
Depreciation of right-of-use assets 9,320 7,928
Net foreign exchange loss/(gain) 210 (158)
Store closure charge/(credit) 1,576 (205)
Staff costs 50,196 44,991
Other operating expenses 60,924 49,917
128,938 108,485
7. EARNINGS PER SHARE ('EPS')
52 weeks ended 52 weeks ended
30 March 1 April
2024 2023
pence pence
Basic (loss)/earnings per share (58.6) 19.1
Diluted (loss)/earnings per share (58.6) 19.1
Underlying basic (loss)/earnings per share (40.1) 5.8
Underlying diluted (loss) earnings per share (40.1) 5.8
Earnings per share is calculated based on the following data:
52 weeks ended 52 weeks ended
30 March 1 April
2024 2023
£'000 £'000
(Loss)/profit for the period for basic and diluted earnings per share (34,984) 11,397
Adjusting items:
Restructuring costs* 992 -
Store closure (charge)/credits* 2,266 (203)
Charge/(reversal credit) of impairment related to property, plant and 1,266 (650)
equipment*
Charge/(reversal credit) of impairment related to right-of-use assets* 6,532 (10,342)
Project costs* 485 -
Gain on waiver of loan from non-controlling interest (504) -
Impairment charge for intangible assets - 2,366
Australia acquisition costs* - 728
Sweden acquisition costs - 193
(Loss)/profit for the period for underlying basic and diluted earnings per (23,947) 3,489
share
* These items are included net of £496,000 (2023: £2,731,000) of the
corresponding tax expense.
52 weeks ended 52 weeks ended
30 March 1 April
2024 2023
Million Million
Weighted average number of ordinary shares for the purpose of basic EPS 59.7 59.6
Effect of dilutive potential ordinary shares: share options - -
Weighted average number of ordinary shares for the purpose of diluted EPS 59.7 59.6
The weighted average number of ordinary shares in issue during the period
excludes those held by the Mulberry Group plc Employee Share Trust.
IMPORTANT NOTICES
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE CAPITAL RAISING.
THIS ANNOUNCEMENT (THIS "ANNOUNCEMENT") ARE DIRECTED ONLY AT PERSONS WHOSE
ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING
OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND
WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE:
(1) IF IN THE UNITED KINGDOM, QUALIFIED INVESTORS AS DEFINED IN ARTICLE 2(E)
OF REGULATION (EU) 2017/1129 AS IT FORMS PART OF UNITED KINGDOM DOMESTIC LAW
BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (THE "UK PROSPECTUS
REGULATION") WHO (A) FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND
MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER")
(INVESTMENT PROFESSIONALS) OR (B) FALL WITHIN ARTICLE 49(2)(A) TO (D) (HIGH
NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER; AND (2)
OTHERWISE, PERSONS TO WHOM IT IS OTHERWISE LAWFUL TO COMMUNICATE IT TO (ALL
SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").
THIS ANNOUNCEMENT AND THE INFORMATION IN IT MUST NOT BE ACTED ON OR RELIED ON
BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS
ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY
INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS
AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT
PERSONS. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR
SUBSCRIPTION OF ANY SECURITIES IN MULBERRY GROUP PLC.
THE NEW ORDINARY SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR JURISDICTION OF THE
UNITED STATES, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR
INDIRECTLY, IN THE UNITED STATES (INCLUDING ITS TERRITORIES AND POSSESSIONS,
ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA) (THE "UNITED
STATES" OR THE "US") EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF THE UNITED STATES. THE NEW
ORDINARY SHARES ARE BEING OFFERED AND SOLD ONLY OUTSIDE OF THE UNITED STATES
IN "OFFSHORE TRANSACTIONS" WITHIN THE MEANING OF, AND IN ACCORDANCE WITH,
REGULATION S UNDER THE SECURITIES ACT AND OTHERWISE IN ACCORDANCE WITH
APPLICABLE LAWS. NO PUBLIC OFFERING OF THE NEW ORDINARY SHARES IS BEING MADE
IN THE UNITED STATES OR ELSEWHERE.
THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE INFORMATION CONTAINED
HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN
WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED
STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER
JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE
UNLAWFUL.
THIS ANNOUNCEMENT IS NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES. THIS ANNOUNCEMENT IS NOT
AN OFFER OF SECURITIES FOR SALE OR SUBSCRIPTION INTO THE UNITED STATES. THE
SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, EXCEPT
PURSUANT TO AN APPLICABLE EXEMPTION FROM REGISTRATION. NO PUBLIC OFFERING IS
BEING MADE IN THE UNITED STATES.
The distribution of this Announcement and/or the Subscription and/or issue of
the New Ordinary Shares in certain jurisdictions may be restricted by law.
No action has been taken by the Company, Houlihan Lokey, Peel Hunt or any of
their respective affiliates, agents, directors, officers, consultants,
partners or employees ("Representatives") that would permit an offer of the
New Ordinary Shares or possession or distribution of this Announcement or any
other offering or publicity material relating to such New Ordinary Shares in
any jurisdiction where action for that purpose is required. Persons into
whose possession this Announcement comes are required by the Company, Houlihan
Lokey and Peel Hunt to inform themselves about and to observe any such
restrictions.
This Announcement or any part of it is for information purposes only and does
not constitute or form part of any offer to issue or sell, or the solicitation
of an offer to acquire, purchase or subscribe for, any securities in the
United States, Australia, Canada, the Republic of South Africa or Japan or any
other jurisdiction in which the same would be unlawful. No public offering
of the New Ordinary Shares is being made in any such jurisdiction.
All offers of the New Ordinary Shares in the United Kingdom will be made
pursuant to an exemption from the requirement to produce a prospectus under
the UK Prospectus Regulation. In the United Kingdom, this Announcement is
being directed solely at persons in circumstances in which section 21(1) of
the Financial Services and Markets Act 2000 (as amended) does not require the
approval of the relevant communication by an authorised person.
The New Ordinary Shares have not been approved or disapproved by the US
Securities and Exchange Commission, any state securities commission or other
regulatory authority in the United States, nor have any of the foregoing
authorities passed upon or endorsed the merits of the Capital Raising or the
accuracy or adequacy of this Announcement. Any representation to the
contrary is a criminal offence in the United States. The relevant clearances
have not been, nor will they be, obtained from the securities commission of
any province or territory of Canada, no prospectus has been lodged with, or
registered by, the Australian Securities and Investments Commission or the
Japanese Ministry of Finance; the relevant clearances have not been, and will
not be, obtained from the South African Reserve Bank or any other applicable
body in the Republic of South Africa in relation to the New Ordinary Shares;
and the New Ordinary Shares have not been, nor will they be, registered under
or offered in compliance with the securities laws of any state, province or
territory of the United States, Australia, Canada, the Republic of South
Africa or Japan. Accordingly, the New Ordinary Shares may not (unless an
exemption under the relevant securities laws is applicable) be offered, sold,
resold or delivered, directly or indirectly, in or into the United States,
Australia, Canada, the Republic of South Africa or Japan or any other
jurisdiction outside the United Kingdom.
Persons (including, without limitation, nominees and trustees) who have a
contractual right or other legal obligations to forward a copy of this
Announcement should seek appropriate advice before taking any such action.
Members of the public are not eligible to take part in the Subscription and no
public offering of Subscription Shares is being or will be made.
This Announcement may contain, or may be deemed to contain, "forward-looking
statements" with respect to certain of the Company's plans and its current
goals and expectations relating to its future financial condition,
performance, strategic initiatives, objectives and results. Forward-looking
statements sometimes use words such as "aim", "anticipate", "target",
"expect", "estimate", "intend", "plan", "goal", "believe", "seek", "may",
"could", "outlook" or other words of similar meaning. By their nature, all
forward-looking statements involve risk and uncertainty because they relate to
future events and circumstances which are beyond the control of the Company,
including amongst other things, United Kingdom domestic and global economic
business conditions, market-related risks such as fluctuations in interest
rates and exchange rates, the policies and actions of governmental and
regulatory authorities, the effect of competition, inflation, deflation, the
timing effect and other uncertainties of future acquisitions or combinations
within relevant industries, the effect of tax and other legislation and other
regulations in the jurisdictions in which the Company and its affiliates
operate, the effect of volatility in the equity, capital and credit markets on
the Company's profitability and ability to access capital and credit, a
decline in the Company's credit ratings; the effect of operational risks; and
the loss of key personnel. As a result, the actual future financial
condition, performance and results of the Company may differ materially from
the plans, goals and expectations set forth in any forward-looking
statements. Any forward-looking statements made in this Announcement by or
on behalf of the Company speak only as of the date they are made. Except as
required by applicable law or regulation, the Company expressly disclaims any
obligation or undertaking to publish any updates or revisions to any
forward-looking statements contained in this Announcement to reflect any
changes in the Company's expectations with regard thereto or any changes in
events, conditions or circumstances on which any such statement is based.
Houlihan Lokey Advisory Limited ("Houlihan Lokey"), which is authorised and
regulated by the Financial Conduct Authority (the "FCA") in the United
Kingdom, is acting exclusively for the Company and no one else in connection
with the Capital Raising, and Houlihan Lokey will not be responsible to anyone
other than the Company for providing the protections afforded to clients of
Houlihan Lokey or for providing advice in relation to the Capital Raising or
any other matters referred to in this Announcement. Neither Houlihan Lokey nor
any of its affiliates owes or accepts any duty, liability, or responsibility
whatsoever (whether direct or indirect, whether in contract, in tort, under
statute or otherwise) to any person who is not a client of Houlihan Lokey in
connection with the matters referred to in this announcement, any statement
contained herein or otherwise
Houlihan Lokey's responsibilities as the Company's nominated adviser under the
AIM Rules for Nominated Advisers are owed solely to the London Stock Exchange
and are not owed to the Company or to any director of the Company or to any
other person.
Peel Hunt LLP is authorised and regulated by the FCA in the United Kingdom and
is acting exclusively for the Company and no one else in connection with the
Capital Raising, and Peel Hunt will not be responsible to anyone other than
the Company for providing the protections afforded to its clients or for
providing advice in relation to the Capital Raising or any other matters
referred to in this Announcement.
No representation or warranty, express or implied, is or will be made as to,
or in relation to, and no responsibility or liability is or will be accepted
by the Houlihan Lokey, Peel Hunt or by any of their respective Representatives
as to, or in relation to, the accuracy or completeness of this Announcement or
any other written or oral information made available to or publicly available
to any interested party or its advisers, and any liability therefor is
expressly disclaimed.
No statement in this Announcement is intended to be a profit forecast or
estimate, and no statement in this Announcement should be interpreted to mean
that earnings per share of the Company for the current or future financial
years would necessarily match or exceed the historical published earnings per
share of the Company.
The price of shares and any income expected from them may go down as well as
up and investors may not get back the full amount invested upon disposal of
the shares. Past performance is no guide to future performance, and persons
needing advice should consult an independent financial adviser.
The New Ordinary Shares to be issued pursuant to the Capital Raising will not
be admitted to trading on any stock exchange other than the AIM market of the
London Stock Exchange.
Neither the content of the Company's website nor any website accessible by
hyperlinks on the Company's website is incorporated in, or forms part of, this
Announcement.
1 (#_ftnref1) Tanneries with a valid Leather Working Group audit,
Sustainable Leather Foundation audit or ISO:14001 accreditation
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