REG - Shoe Zone PLC - Interim Results
Wed 07:00
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RNS Number : 4925J Shoe Zone PLC 21 May 2025
Shoe Zone PLC
("Shoe Zone" or the "Company")
Interim results for the 26 weeks to 29 March 2025
Shoe Zone PLC is pleased to announce its interim results for the 26 weeks to
29 March 2025, (the "Period").
Financial highlights
• Revenue of £71.5m (2024 H1: £76.5m) -6.5%
o Store revenue £53.3m (2024 H1: £59.4m) -10.3%
o Digital revenue £18.2m (2024 H1: £17.1m) +6.4%
• Contribution of £6.4m (2024 H1: £12.2m)
o Store contribution of £3.3m (2024 H1: £8.5m)
o Digital contribution of £3.1m (2024 H1: £3.7m)
• Loss before tax of £2.3m (2024 H1: Profit £2.6m)
• Adjusted loss before tax of £2.6m (2024 H1: Profit £2.5m)*
• Earnings per share of -4.9p (2024 H1: 5.6p)
• Net cash of £1.7m (2024 H1: £4.1m)
• No interim dividend proposed (2024 H1: 2.5 pence)
Operational highlights
· 278 stores at Period end (2024 FY: 297) comprising:
o 187 New Format (2024 FY: 185)
o 91 Original (2024 FY: 112)
· 2 stores opened, 2 refits, 21 stores closed
· Capital expenditure of £1.0m (2024 H1: £5.3m)
· Annualised lease renewal savings of £0.2m, an average reduction of
19%
· Average lease length of 2.5 years (2024 FY: 2.3 years)
· Digital returns rate of 11.4% (2024 H1: 11.4%) - 12 months average
*Adjusted items 2025 H1 £0.3m forex gain. (2024 H1: Forex gain £0.1m)
For further information please call:
Shoe Zone PLC
Tel: +44 (0)
116 222 3001
Charles Smith (Chairman)
Terry Boot (Finance Director)
Zeus (Nominated Adviser and Broker)
Tel: +44 (0) 203 829 5000
David Foreman, James Hornigold, Ed Beddows (Investment Banking)
Dominic King (Corporate Broking)
Chairman's statement
Introduction
Shoe Zone delivered a satisfactory performance in the Period against the
continuing backdrop of weak consumer confidence and macro/global economic
volatility. Total revenues reduced by 6.5% to £71.5m, having traded out of 31
fewer stores compared to 12 months ago, with digital revenue increasing by
6.4%. Quarter 1 revenues were £4.9m lower than 2024, with quarter 2 revenues
£0.1m lower than 2024.
Store revenues were £53.2m (2024 H1: £59.4m - trading out of 31 fewer
stores), digital revenues were £18.2m (2024 H1: £17.1m) with strong
performance across all online channels with additional growth from
shoezone.com, mainly due to the introduction of free next day delivery on all
shoezone.com orders, which was introduced in Q4 of the last financial year.
Adjusted loss before tax was £2.6m (2024 H1: Profit £2.5m*), which is in
line with management expectations for the Period.
We ended the Period trading out of 278 stores, which is a reduction of 31
compared to 12 months ago and 19 lower compared to last year end. In the first
half we closed 21 stores, opened 2 new format stores and refitted 2 Original
stores to our new larger format. In total we are now trading out of 91
Original stores and 187 new format stores. We are actively working to relocate
and refit further stores in the second half of the year, together with a
number of stores currently in the pipeline, which will open before Christmas.
Our average lease length is 2.5 years (2024 FY: 2.3 years), which is
increasing as we open new stores with 5 year leases but is still low enough to
give the opportunity and flexibility to respond to changes in any retail
location at short notice. Property supply continues to outstrip demand, and we
continue to take advantage of this and significantly improve our property
portfolio over the medium term.
We have completed 27 lease renewals/re-gears in the Period with an annualised
saving of £190k, with an average reduction of 19%.
Strategy Update
Our refit and relocation programme continues, and we now have 187 stores
converted to our new, larger format and continue to invest in our digital
platform and head office infrastructure. We expect to spend c£6.0m on capital
projects this year, which is lower than the previous year due to the later
timing of projects, and we will continue to invest at a higher level until all
stores have been converted. Our ultimate goal is to have approximately 260
stores in total.
Digital revenues have continued to increase, having introduced a new mobile
App, new payment methods and free next day delivery on all shoezone.com
orders. Part of the continued success is our efficient returns process, which
is complemented by our store network, and as a result we maintain our returns
rate at 11.4% (2024 H1: 11.4%), with the vast majority of these returned to
stores, hence why our physical network is so important to the future success
of the digital channel.
Dividend
The Board does not propose an interim dividend.
Outlook
Our original full year profit before tax forecast was £10.0m, which was
revised down to £5.0m. This reduction was due to the challenging trading
conditions we experienced, particularly in the first quarter of this financial
year, due to weak consumer confidence and unseasonal weather conditions. As a
result of the changes announced in the October 2024 budget, we will also incur
additional national insurance and national living wage costs in the second
half of this financial year.
The second quarter has shown improvement, but the trading environment
continues to be difficult as consumer confidence continues to be low. During
the second quarter, we have seen more stability/reduction in the price of
containers, and a strengthening of sterling against the dollar, both of which
will start to benefit in the second half of this financial year.
Financial Review
Loss before tax was £2.3m, adjusted to £2.6m (2024 H1: profit £2.6m
adjusted to £2.5m). The adjustment reflects a foreign exchange gain £0.3m
and last year included a foreign exchange gain of £0.1m. The reduction is due
to the first quarter performance, negatively impacted by weakening consumer
confidence and unseasonal winter weather conditions.
In the Period, total revenues were £71.5m (2024 H1: £76.5m). Store revenues
decreased by £1.7m as we traded out of 31 fewer stores than 12 months ago.
Digital sales increased by £1.1m to £18.2m (2024 H1: £17.1m). Product
margins reduced to 59.4% (2024 H1: 61.0%) due to higher container prices and a
'Buy one, get one free' promotion run in February.
Gross profit in the Period was £11.0m (2024 H1: £14.7m), with a margin of
15.4% (2024 H1: 19.3%). The £3.7m reduction reflects the sale performance,
and the percentage reduction is due to the underlying product margin being
lower at 59.4% (2024 H1: 62.7%), due to the impact of higher container prices,
higher Digital sales related costs, and the impact of our February BOGOF
promotion. Container prices have stabilised, post Chinese new year, and
indications are that this will be maintained in the short term. Within cost of
sales, we spent a similar amount on inventory purchases, £0.4m less on
utility costs and £0.4m extra depreciation due to higher capital spend last
year.
Administration expenses increased by £0.9m to £9.7m (2024 H1: £8.9m), due
to £0.6m of additional store impairments/write offs, £0.2m extra digital
sales related costs and £0.1m higher head office repairs.
Distribution costs remained the same at £2.8m (2024 H1: £2.8m) as we were
able to absorb the increase in the National Living Wage.
Inventory at the Period end was £3.5m higher at £34.5m (2024 H1: £31.0m).
This reflects a higher branded mix, having added more larger branded stores
and a higher stock of boots, which will form part of the range in
Autumn/Winter 2025/26.
The Company ended the Period with a net cash balance of £1.7m (2024 FY:
£4.1m), which was in line with management expectations.
Capital expenditure in the Period was £1.0m (2024 H1: £5.3m). Relocation and
refit projects are weighted towards the second half of the financial year as
we continue our long-term target of converting all stores. We expect
expenditure to be £6.0m for the full year.
The Shoefayre Limited Pension and Life Assurance Scheme deficit reduced to
£1.5m (2024 FY: £1.6m deficit). This was due to an increase in bond yields
which led to a higher discount rate assumption and therefore a lower value
being placed on the scheme's liabilities. This was partly offset by lower than
expected investment returns, due to an increase in gilt yields, which led to a
fall in the scheme's Liability Driven Investment (LDI) holdings.
Earnings per share were -4.9p (2024 H1: 5.6p per share) reflecting the loss
before tax in the Period.
Unaudited consolidated income statement (52 weeks audited)
26 Wks end 26 Wks end 52 Wks end
29 Mar 2025 30 Mar 2024 28 Sep 2024
£'000 £'000 £'000
Revenue 71,486 76,475 161,322
Cost of sales (60,496) (61,734) (125,802)
Gross Profit 10,990 14,741 35,520
Administration expenses (9,726) (8,863) (18,540)
Distribution costs (2,823) (2,787) (5,660)
Profit from Operations (1,559) 3,091 11,320
Finance income - - -
Finance expense (702) (480) (1,204)
Profit before Tax (2,261) 2,611 10,116
Taxation - - (2,699)
Profit after Tax (2,261) 2,611 7,417
Earnings per Share (4.9)p 5.6p 16.0p
Unaudited consolidated statement of total comprehensive income (52 weeks
audited)
26 Wks end 26 Wks end 52 Wks end
29 Mar 2025 30 Mar 2024 28 Sep 2024
£'000 £'000 £'000
Profit/(Loss) for the period (2,261) 2,611 7,417
Items that will not be reclassified subsequently to the
income statement
DB pension scheme 203 (5) 539
Movement in deferred tax on pension schemes - - (135)
Cash flow hedges
Fair value movements in other comprehensive income 413 (247) (649)
Tax on cash flow hedges - - 162
Other comprehensive (expense)/Income for the period 616 (252) (83)
Total comprehensive (expense)/Income for the period (1,645) (2,359) 7,334
attributable to equity holders of the parent
Unaudited consolidated statement of financial position (52 weeks audited)
26 Wks end 26 Wks end 52 Wks end
29 Mar 2025 30 Mar 2024 28 Sep 2024
Assets £'000 £'000 £'000
Non-current Assets
Property, plant and equipment 20,774 21,444 23.938
Right of use assets 27,884 29,722 29,850
Total Non-current Assets 48,658 51,166 53,788
Current Assets
Inventories 34,484 31,030 37,951
Trade and other receivables 3,539 2,881 4,472
Cash and cash equivalents 1,698 4,093 3,640
Deferred tax asset 39 573 176
Corporation tax asset 659 1,933 525
Total Current Assets 40,419 40,510 46,764
Total Assets 89,077 91,676 100,552
Current Liabilities
Trade and other payables (18,395) (18,623) (27,843)
Lease liabilities (12,217) (12,720) (9,696)
Provisions (2,387) (1,283) (2,707)
Total Current Liabilities (32,999) (32,626) (40,246)
Non-current Liabilities
Lease liabilities (22,846) (25,177) (25,266)
Provisions (767) (2,873) (767)
Employee benefit liability (1,466) (2,105) (1,629)
Total Non-current Liabilities (25,079) (30,155) (27,662)
Total Liabilities (58,078) (62,781) (67,908)
Net Assets 30,999 28,895 32,644
Equity attributable to equity holders of the company
Called up share capital 463 463 463
Merger reserve 2,699 2,699 2,662
Capital redemption reserve 37 225 37
Cash flow hedge reserve 338 - (75)
Retained earnings 27,499 25,508 29,557
Total Equity and Reserves 30,999 28,895 32,644
Unaudited consolidated statement of changes in Equity (prior years audited)
Share Share Capital Cash flow Retained Total
Capital Premium Redemp. Hedge Earnings
Reserve Reserve
£'000 £'000 £'000 £'000 £'000 £'000
At October 2023 463 2,662 37 412 27,778 33,352
Profit for the period - - - - 2,611 2,611
Defined benefit pension movements - - - - 5 5
Cash flow hedge movements - - - (187) - (187)
Total comprehensive income for the period - - - (187) (2,616) (2,429)
Dividends paid - - - - (6,886) (6,886)
Contributions by and distrib. to owners - - - - (6,886) (6,886)
As at March 2024 485 2,662 37 225 25,508 28,895
At October 2023 495 2,662 37 412 27,778 33,352
Profit for the period - - - - 7,417 7,417
Defined benefit pension movements - - - - 539 539
Cash flow hedge movements - - - (649) - (649)
Deferred tax on other comp. income - - - 162 (135) 27
Total comprehensive income for the period - - - (487) 7,821 7,334
Dividends paid - - - - (8,042) (8,042)
Contributions by and distrib. to owners - - - - (8,042) (8,042)
As at September 2024 463 2,662 37 (75) 29,557 32,644
At September 2024 463 2,662 37 (75) 29,557 32,644
Profit for the period - - - - (2,261) (2,261)
Defined benefit pension movements - - - - 203 203
Cash flow hedge movements - - - 413 - 413
Total comprehensive income for the period - - - 413 (2,058) (1,645)
Dividends paid - - - - - -
Contributions by and distrib. to owners - - - - - -
As at March 2025 463 2,662 37 338 27,499 30,999
Unaudited consolidated statement of cash flows (52 weeks audited)
26 Wks end 26 Wks end 52 Wks end
29 Mar 2025 30 Mar 2024 28 Sep 2024
£'000 £'000 £'000
Operating activities
Profit after tax (2,261) 2,611 7,417
Corporation tax - - 2,699
Finance income - - -
Finance expense 702 480 1,204
Depreciation of property, plant and machinery 3,822 2,757 5,907
Fixed asset impairment and loss on disposal of property,
plant and machinery 310 187 838
Right of use asset on profit, depreciation & impairment 5,718 9,763 11,793
and loss on disposal
8,291 15,798 29,858
Decrease/(increase) in trade and other receivables 1,127 384 (1,253)
Decrease/(increase) in foreign exchange contracts 609 (179) (756)
Decrease/(increase) in inventories 3,467 2,722 (4,199)
(Decrease)/increase in trade and other payables (6,341) (5,728) 459
Decrease in provisions (320) 364 (318)
(1,458) (2,437) (6,067)
Cash generated from operations 6,833 13,361 23,791
Net corporation tax paid (134) (1,919) (2,679)
Net cash flows from operating activities 6,699 11,442 21,112
Investing activities
Purchase of property, plant and machinery (968) (5,210) (11,505)
Proceeds from Sale of Freeholds - - -
Net cash used in investing activities (968) (5,210) (11,505)
Capital element of lease repayments (7,715) (11,724) (14,475)
Interest 43 117 196
Dividends paid during year - (6,886) (8,042)
Net cash used in financing activities (7,672) (18,493) (22,321)
Net inc/(dec) in cash and cash equivalents (1,941) (12,261) (12,714)
Cash and cash equivalents at beginning of period 3,640 16,354 16,354
Cash and cash equivalents at end of period 1,698 4,093 3,640
Notes to the financial statements for the 26 weeks ended 29 March 2025
Basis for preparation
The consolidated interim financial statements of the company for the 26 weeks
ended 29 March 2025, which are unaudited, have been prepared in accordance
with the same accounting policies, presentations and methods of computation
followed in the condensed set of financial statements as applied in the
group's latest audited financial statements. A copy of those accounts has been
delivered to the Registrar of Companies.
The financial information for the 26 weeks ended 29 March 2025, contained in
this interim report, does not constitute the full statutory accounts for that
period. The independent Auditors' report on the Annual Report and Financial
Statements for 2024 was unqualified, did not draw attention to any matters by
way of emphasis. And did not contain a statement under 498(2) or 498(3) of the
Companies Act 2006.
The consolidated interim financial statements have neither been audited nor
reviewed pursuant to guidance issued by the Auditing Practices Board.
The condensed consolidated interim financial statements have been prepared on
a going concern basis and under the historic cost convention, as modified by
the revaluation of derivative financial instruments to far value.
The condensed consolidated interim financial statements are presented in
sterling and have been rounded to the nearest thousand (£'000).
The preparation of financial information in conformity with IFRS requires
management to make estimates and assumptions that affect the reported amount
of assets and liabilities at the date of the financial statements and the
reported amount of revenues and expenses during the reporting period. Although
these estimates are based on management's best knowledge of the amount, event
or actions, actual events ultimately may differ from those estimates.
1. Accounting policies
In preparing these interim financial statements, the significant judgements
made by management in applying the group's accounting policies and the key
sources of estimation uncertainty were the same as those applied to the
consolidated financial statements reported in the latest annual audited
financial statements for the 52 weeks ended 28 Sept 2024.
Going Concern
At the balance sheet date, the company had a strong net asset position. Based
on the cash forecasts prepared by the Directors, these financial statements
have been prepared on a going concern basis.
2. Segmental Information
The group complies with IFRS 8 'Operating Segments' which determines and
presents operating segments based on information provided to the chief
operating decision maker. The chief decision maker has been identified as the
management team including the Chairman and Finance Director. The Board
considers that each store is an operating segment but there is only one
reporting segment as the stores qualify for aggregation, as defined under IFRS
8.
26 Wks end 26 Wks end 52 Wks end
29 Mar 30 Mar 28 Sep
2025 2024 2024
External revenue by location of customers: £'000 £'000 £'000
United Kingdom 53,116 59,079 125,594
Digital 18,202 17,144 35,248
Other 168 252 480
71,486 76,475 161,322
3. Taxation
The taxation charge of zero for the 26 weeks ended 29 March 2025 is based on
the assumption that the capital allowances available on our estimated capital
spend will reduce the expected charge at the half year.
4. Earnings per share
26 Wks end 26 Wks end 52 Wks end
29 Mar 30 Mar 28 Sep
2025 2024 2024
£'000 £'000 £'000
Profit in the period and earnings used in basic
diluted earnings per share (2,261) 2,611 7,417
(4.9)p 5.6p 16.04p
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