REG-Superdry plc Superdry plc: IR-Half-yearly Results
27/01/2023 07:15
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Superdry plc (SDRY)
Superdry plc: IR-Half-yearly Results
27-Jan-2023 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement that contains inside information in
accordance with the Market Abuse Regulation (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
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SuperdryPlc
(“Superdry” or “the Company”)
27 January 2023
Interim Results for the 26-week period ending 29 October 2022
Strong Christmas trading; cautious on remainder of FY23
Superdry announces its Interim Results covering the 26-week period from 1 May 2022 to
29 October 2022 ("H1 23") and a trading update covering the 9-week period from 30
October 2022 to 31 December 2022.
• Brand recovery on track, with strong momentum for AW221 collection and new leading
categories.
• Stores revenue +14.3% to £117.7m as customers returned to high streets, with
strong demand for womenswear, denim, and jackets.
• Wholesale declined 5.2%, due to a lagged recovery after Covid and shipment timing.
• The return to a normalised cost base coupled with the slow start to Q1 in Europe,
and the delayed recovery of Wholesale have all impacted first half profits,
despite underlying recovery.
• Adjusted Loss Before Tax2 of £(13.6)m, includes foreign exchange gains of £17.2m
(H1 22 FX loss of £1.1m).
• Awarded a Climate Disclosure Project (“CDP”) A rating, one of only two British
fashion brands in the ‘A List’.
• Over the Christmas period, demand continued to strengthen, with stores back to
2019 levels in December and Retail3 revenue up 24.9% in 9 weeks to 31 December
2022.
• Due to underperformance of Wholesale and increasing uncertainty on Q4, we have
revised our outlook for FY23 adjusted profit before tax to be broadly breakeven
(previously £10 – 20m).
£m H1 23 H1 22 Vs H1 22
Group Revenue £287.2m £277.2m 3.6%
Gross Margin Rate 52.1% 55.2% (3.2)%pts
Adjusted loss before tax2 £(13.6)m £(2.8)m 385.7%
Adjusting items2 £(4.1)m £6.8m n/a
Statutory profit/(loss) before tax £(17.7)m £4.0m n/a
Adjusted basic loss per share2 (11.2)p (3.8)p 194.7%
Basic profit/(loss) per share (15.0)p 3.0p n/a
Net working capital2 £119.3m £120.6m (1.1)%
Net (debt)/cash position2 £(38.0)m £(3.9)m n/a
Julian Dunkerton, Founder and Chief Executive Officer, said: “The Superdry brand has
real momentum and I’m delighted by how our retail trading continues to strengthen.
We’ve done this against a difficult macroeconomic backdrop by delivering
well-designed, affordable, and responsibly sourced products which have resonated well
with customers. Our coats performed really well in the run up to Christmas, and
womenswear continues to be a highlight for us. Stores continued to recover strongly
and online had its biggest ever week over Black Friday, helped by our new ecommerce
platform which is delivering real benefits.
We continued to receive positive recognition for our efforts to make Superdry the ‘#1
Sustainable Style Destination’, and this year CDP awarded us an A rating, one of only
two British fashion brands on this year’s ‘A List’.
Despite the underlying brand recovery, our profits in the first half fell short of
expectations mainly due to the underperformance of Wholesale. We reorganised our team
and our approach to support our Wholesale partners and expect to see their confidence
return following the retail success of AW22. Whilst we did trade well through November
and December, the outlook for the remainder of the year is uncertain and as a result,
we are moderating our profit outlook to broadly breakeven. We don’t expect market
conditions to become easier any time soon, but with a new financing package in place
and the brand in great health, we approach the year ahead with optimism.”
H1 23 Financial overview
• Revenue increased 3.6% year-on-year with retail channels growing 9.5% due to a
strong return to physical retail whilst ecommerce growth of 1.6% was more modest
as customer returned to shopping in stores. This was offset by both the slower
rate of buy in Wholesale, given some stock overhang, which continued to be
adversely affected by stock overhangs from Covid, and a later dispatch profile for
AW221 product.
• Gross margin contracted by 3.1%pts with the strong delivery of our full-price
stance during a period of rising costs being offset by the delayed Wholesale price
increases and additional stock clearance through the Wholesale channel.
• Adjusted loss before tax fell to £(13.6)m (H1 22 £(2.8)m), impacted both by the
performance of Wholesale and a return to normal business rents and rates following
a period of Covid-relief, offset by gains from cash margin hedges against exchange
rate movements of £10.3m (H1 22 £(1.2) m) and a revaluation of foreign currency
assets of £6.9m (H1 22 £0.1m).
• Statutory loss before tax was £(17.7)m, a £21.7m decrease from a profit of £4.0m
in H1 22.
• Working capital showed a reduction of £1.3m year-on-year driven by a combination
of increased inventory of £13.2m and receivables of £15.9m, offset by a rise in
payables by £30.4m, all significantly affected by the timing of stock intake and
wholesale dispatches.
• We ended the half with £38.0m net debt2 as we entered our seasonal working capital
high, exacerbated by a period of slower sales in October due to the warmer
weather. As noted in our 22 December trading update, our cash position has
continued to improve during the peak trading period, with net debt of £9.8m as of
31 December 2022.
Christmas Trading (9 weeks from 30 October 2022 to 31 December 2022)
The table below shows the revenue change on a one-year basis for the 9-week period
ending 31 December 2022:
£m Christmas Trading Year-to-date
(9 weeks) (35 weeks)
Group Revenue 4.5% 3.9%
Stores 18.8% 16.1%
Ecommerce 33.4% 15.3%
Retail (Stores and Ecommerce) 24.9% 15.7%
Wholesale* (57.4)% (18.0)%
* Over short trading periods, wholesale is always subject to material timing
differences year-on-year and the longer-term trends are more indicative of overall
performance.
Over the 9-week period, group revenue was up 4.5% versus FY22 as physical store
trading continued to recover, offsetting a material reduction in Wholesale dispatches.
Retail revenue grew by 24.9%, reflecting both a strong recovery in stores, with more
seasonal weather re-igniting strong demand for our outerwear. This was supported by a
more strategic and well-executed Black Friday and end-of-season sale. Importantly, we
saw a recovery in our Store sales beyond pre-Covid levels during a robust holiday
trading period.
The Black Friday event, our first major promotion in nine months, pulled a high volume
of traffic into our stores and onto our Ecommerce site and kickstarted the successful
Christmas trading period after the unseasonal weather in October. Our post-Christmas
Sale then cleared stock at attractive rates for our customers – on better margins than
our alternative clearance channels – helping to reduce our excess inventory, whilst
having a small impact on gross margin.
Wholesale has proved more challenging with revenue down 18.0% year-to-date, in part
driven by the impact of shipment timings, some of which will reverse in the second
half. However, there is still a Covid-related confidence lag in Wholesale, which we
expect to close as our partners see how successful our AW221 range has performed
through our own channels, giving them confidence to buy for future seasons.
We continued to deliver on our unit inventory reduction programme, with a further
reduction from 12.4m at period end to 11.8m. As of 31 December 2022, the Company had
£9.8m net debt2, supported by solid holiday trading.
Gross margin for the 9 weeks is down 60 basis points on the prior year, largely driven
by the continuing weakness in Wholesale along with the Black Friday and end-of-season
clearance events.
Outlook
While the global macroeconomic outlook remains challenging, we have gained confidence
from our recent robust retail performance and the strong demand for our brand across
all geographies and platforms. We believe that our honest approach to high quality
products for a great price has resonated well with consumers under pressure and we can
see that reflected in our sales numbers. The more recent trading performance through
the holiday period supports our view that the brand is resonating with consumers and
continues to strengthen.
That said, we are mindful of the challenges facing the consumer as we head into 2023
and remain very cautious about the potential for a soft spring. s a management team we
are taking action to seek costs savings initiatives to support our performance. When
combined with current margin run-rates and the underperformance of our Wholesale
division, we believe it appropriate to amend our adjusted profit before tax guidance
to broadly breakeven (previously £10 – 20m).
Notes
1. Autumn/Winter22 defined as week 19, commencing 4 September 2022 through to week
44, commencing 26 February 2023.
2. ‘Adjusted’, ‘Adjusting’, Net working capital and ‘Net (Debt)/Cash’ are used as
alternative performance measures (‘APMs’). Definition of APMs and how they are
calculated are disclosed in the financial statements in Note 18 and 22 ‘Net
working capital’ has been reconciled within the Finance Review.
3. Retail is a combination of both the Stores and Ecommerce segments.
4. Where commented upon, Full Price Mix is Net full price sales from full price
channels, excluding mark-down product but including basket-building mechanics
(e.g., 3 for 2 offers) as a proportion of total channel sales.
Market briefing
A webcast for analysts and investors will be held today starting at 9:00, followed by
a Q&A with management. The webcast will be available to join live, but questions will
be limited to analysts. If you would like to register, please go to
1 https://secure.emincote.com/client/superdry/superdry012. A recording of the event
will also be available on our corporate website shortly afterwards.
A separate meeting with an opportunity for retail investors to ask questions will be
held at 13:00 through the ‘Investor Meets Company’ platform, register 2 here
(https://www.investormeetcompany.com/superdry-plc/register-investor).
For further information:
Superdry:
Shaun Wills shaun.wills@superdry.com +44 (0) 1242 586747
Chris MacDonald investor.relations@superdry.com +44 (0) 1242 586747
Peel Hunt: +44 (0) 2074 188900
George Sellar
Michael Burke
+44 (0) 2031 002000
Liberum:
John Fishley
Media enquiries
Tim Danaher superdry@brunswickgroup.com +44 (0) 207 4045959
Notes to Editors
Our mission is “To be the #1 sustainable style destination” through our distinct
collections, defined by consumer style choices. We design affordable, premium quality
clothing, accessories and footwear which are sold around the world. We have a clear
strategy for delivering continued growth via a multi-channel approach combining
Stores, Ecommerce, and Wholesale.
Superdry has 219 physical stores and around 450 franchisees and licensees. We operate
in over 50 countries and have over 4,100 colleagues globally.
Cautionary Statement
This announcement contains certain forward-looking statements with respect to the
financial condition and operational results of Superdry Plc. These statements and
forecasts involve risk, uncertainty, and assumptions because they relate to events and
depend upon circumstances that will occur in the future. There are a number of factors
that could cause actual results or developments to differ materially from those
expressed or implied by these forward-looking statements. These forward-looking
statements are made only as at the date of this announcement. Nothing in this
announcement should be construed as a profit forecast. Except as required by law,
Superdry Plc has no obligation to update the forward-looking statements or to correct
any inaccuracies therein.
This announcement contains inside information for the purposes of Article 7 of the
Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of
the European Union (Withdrawal) Act 2018 ("MAR").
CEO Review
Against a challenging national and global macroeconomic backdrop, the brand turnaround
continues to gain momentum and I am pleased with the progress we have made in the
first half of this year as we continue with our mission to make Superdry the ‘#1
Sustainable Style Destination’. Presenting our Autumn ranges early and with authority
resulted in a successful lead on AW221 outerwear, and delivered strong results,
notably in stores where we have seen footfall rising through the period and revenue up
14.3% in the first half, and on third party websites, where we are attracting new
customers to the brand. Significantly, this trend has continued and in December we saw
retail revenue above pre-Covid levels.
Our store revenue growth was greatest in the UK and the US, where the post-pandemic
recovery has been fastest: up 19%. In some of our larger European markets, notably
Belgium and Germany, the recovery hasn’t been as quick, with revenue in Europe up only
6.7%. The growth in Ecommerce revenue slowed to 1.6% as consumers reverted to physical
retail, but this trend was more than offset by the strong performance of our partner
program, which has seen Zalando’s total migration away from Wholesale and this partner
platform also completed during the period.
Whilst we have seen a recovery in retail, our Wholesale business has declined by 5.2%
during the period. This has been partly driven by the impact of shipment timings, some
of which will reverse in the second half. However, there is still a Covid related
confidence lag in Wholesale, which we expect to close as our partners see how
successful our AW221 range has been through our own channels, giving them confidence
to buy for future seasons.
The half-year adjusted loss before tax increased to £(13.6)m in the period, with a
return to normal levels of rent and business rates, which was ahead of the sales
recovery from OMICRON, particularly in the European markets.
Style and sustainability continue to be the overarching focus in everything we do.
Reflecting this, we have simplified our mission further: "To be the #1 Sustainable
Style Destination". To achieve this, we are continuing to focus on our four strategic
objectives:
• Inspire through product & style
• Engage through social
• Lead through sustainability
• Strong operational foundations to 'Make it happen'.
Inspire Through Product & Style
We continue to deliver a high-quality branded product at great value, and this led to
our AW221 collection being very well received, with outerwear delivering strong growth
on last year’s performance. This was by bringing in our comprehensive range of jackets
earlier than last year left us well prepared for the early cold snap in September,
which saw strong demand for our jackets.
The new product has also been successful on third party sites across Europe, where we
know we reach new customers. This success is supporting additional conversations with
potential third parties, as we seek to expand our brand awareness and our partner
program further.
Our womenswear range, in particular our dress collection and teenage product, has
excelled. This is due to a refreshed collection promoted through a well-targeted
influencer marketing program. We are excited by the results, with both new and
returning customers finding joy in our range, notably our new party dresses, which
were a viral hit online in the months leading into the holidays. In addition, whilst
traditionally not one of our strongest areas, this season’s denim range has impressed
with the category up 34%, driven by women’s denim up 108% year-on-year.
Engage Through Social
We continue to expand our social media position to recruit new customers into the
brand. Launched in September 2021, our Tiktok channel now has over 550k followers with
over 4.1m likes across our videos. All our Tiktok content is exclusively influencer
generated, letting them do the talking for us. We direct over 60% of our social budget
to generating content from our 2,670 influencers, resulting in organic content that is
connecting with our customers where the conversation is happening; over 60 videos now
have more than 1m views.
Our party dresses also worked well in viral videos, which helped drive sales up 31%
for the category, a disruptive area for us and a key anchor as we recruit new and
win-back lapsed customers.
Our AW221 jackets campaign did extremely well towards the end of the first half and
beyond. We launched a comprehensive range early and lead with a strong push across
both social and traditional marketing channels, helping deliver two of our biggest
ever September sales weeks on Ecommerce.
Lead Through Sustainability
Our ambition to be the leading sustainable style destination starts with our product
but continues through everything we do. We aim to move all our pure-cotton garments to
organic cotton by 2025, and, on that journey, we are helping others with support for
over 7,500 farmers - supplying a third of our organic cotton – during the first half.
Our push to renewable energy also continues, with 91% of our retail stores, offices,
and distribution centres powered by renewables, on track for our 100% target by 2025.
During the period we continued to sell more sustainable garments than ever before,
with 52% of sales in the half being sustainably sourced product, up from 32% in the
prior period.
We continue to see improvement in our Carbon Disclosure Project rating, up from A- to
A. Among our peers, we are the only brand to have improved our grade consistently each
year for the last three years, and one of two British fashion brands on this year’s ‘A
List’. When I joined, we were a C and through hard work and the determination of our
talented teams, we’ve worked towards our Net Zero goal, which is now starting to be
recognised by our customers.
We published our second Sustainability report in September 2022 which can be found on
our Corporate Website
( 3 https://corporate.superdry.com/sustainability/sustainability-report/), this
provides additional detail on everything we have committed to, achieved so far and
ultimately challenged ourselves on.
Make it Happen
A key operational improvement during the period was the signing of our new financing
facility, which we announced on 22 December. Our new facility is larger and covenant
light, making it less complex to operate and more flexible, supporting our growth in
the years ahead. In parallel, our finance team is working hard to make our business
more efficient, making our cash cycle less volatile.
We continue to make changes in our organisation, welcoming Denise Posner as Marketing
Director in July, and Tom Hutt as Head of Marketing Creative shortly afterwards. . The
changes to our marketing strategy have been immediate and impactful, and I look
forward to working with Denise and Tom to further drive improvements in our marketing
impact and effectiveness. Given our renewed focus on wholesale, we have also expanded
Craig McGregor’s role from leading our Retail Stores to Global Commercial Director,
additionally taking on leadership of our Wholesale business. Craig and I will work
together to revisit our Wholesale model and explore new strategic partnerships and
improve an area of our business which is currently underperforming. I aim to share
more on this in the future as we develop and execute our strategy.
Our investment in migrating our Ecommerce platform over to microservices technology is
now largely complete. Alongside this, we continue to invest in additional improvements
in payment platforms and usability, improving the customer experience, whilst also
investing in our back-end systems to deliver better, more accurate insights to support
the running of the business.
Looking forward
While the global macroeconomic outlook remains challenging, we have gained confidence
from our recent robust retail performance and the strong demand for our brand across
geographies and platforms. I believe that our honest approach to great quality
products for a great price has resonated well with consumers under pressure and we can
see that reflected in our sales numbers.
Despite a more moderate profit delivery in the first half on account of the
unseasonably warm weather experienced in October, the more recent trading performance
through the balance of calendar 2022 supports our view that the brand is clearly
resonating with consumers and continues to strengthen. This is further evidenced by
our improved gross margin performance in retail where we have predominantly returned
to a full-price stance whilst still seeing strong demand for our jackets and winter
wear.
Financial Review
Group revenue increased 3.6% year-on-year to £287.2m, largely driven by the strong
performance in our owned stores. Store sales increased 14.3% year-on-year to £117.7m
as our collections resonated with consumers and we saw traffic shift back to physical
retail and a normalisation in online revenue. Ecommerce increased 1.6% year-on-year to
£63.3m, with the reversion in consumer behaviour somewhat offset by a step-up in
performance on third party sites. Retail revenue (combined Stores and Ecommerce) ended
the half up 9.5% year-on-year, which helped offset the decrease in Wholesale revenue
of 5.2% year-on-year.
During H1 23, the gross margin decreased 3.1%pts year-on-year to 52.1% due to a higher
mix of third-party sales within our Ecommerce channel, deferred wholesale price
increases, and Wholesale clearance activity designed to continue our inventory
reduction programme, all of which offset the improvements from returning to a
full-price trading stance.
Our Adjusted Loss Before Tax of £(13.6)m was impacted by a return to normal rent
business rates and other costs whilst the store business remained heavily impacted by
Omicron, particularly in Europe and exacerbated by underperformance in Wholesale.
We enter into forward foreign exchange contracts to hedge the currency exposure on
stock purchases. As these contracts mature, they offset FX gains or losses incurred in
the gross margin in the current and future periods. During the first half we had
realised gains of this nature of £10.3m (H1 22: £(1.3)m).
There is a further £6.9m (H1 22: £0.1m) of unrealised currency gains which results
from the translation of our overseas foreign currency denominated assets and
liabilities, and £4.1m of unrealised fair value loss due to the uncrystallised loss on
foreign exchange forward contracts. This element will remain subject to currency
fluctuations and could, therefore, reverse in the second half.
H1 23 Restated1 H1 22 Change
£m £m %
Revenue: Stores 117.7 103.0 14.3%
Ecommerce 63.3 62.2 1.6%
Wholesale 106.2 112.0 (5.2)%
Group revenue 287.2 277.2 3.6%
Gross profit: Stores 80.3 71.7 12.0%
Ecommerce 36.7 39.1 (6.1)%
Wholesale 32.5 42.3 (23.2)%
Group profit 149.5 153.1 (2.4)%
Gross profit margin % 52.1% 55.2% (3.1)%pts
Selling and distribution costs (150.6) (126.4) 19.1%
Central costs (33.4) (32.9) 1.5%
Impairment credit on trade receivables 0.1 2.0 100.0%
Adjusted other gains and (losses) 23.4 4.9 377.6%
Adjusted operating profit/(loss)* (11.0) 0.7 n/a
Adjusted operating margin* -3.8% 0.3% (4.1)%pts
Net finance expense (2.6) (3.5) (25.7)%
Adjusted loss before tax* (13.6) (2.8) 385.7%
Adjusting items:
Fair value movement on forward contracts (4.1) 6.2 n/a
IFRS2 charge – Founder Share Plan - 0.6 n/a
Total adjusting items (4.1) 6.8 n/a
Profit/(Loss) before tax (17.7) 4.0 n/a
Tax (expense)/credit 5.5 (1.5) n/a
Profit/(Loss) for the period (12.2) 2.5 n/a
* Adjusted operating loss, adjusted operating margin and adjusted loss before tax are
defined as reported results before adjusting items as further explained in Note 22
Retail revenue (‘Stores’ and ‘Ecommerce’)
H1 23 H1 22 Vs H1 22
Retail revenue £m
£m %
Stores 117.7 103.0 14.3%
Ecommerce 63.3 62.2 1.6%
Total Retail revenue 181.0 165.2 9.5%
Ecommerce revenue as a proportion of Retail revenue 34.9% 37.7% (2.7)%pts
Ecommerce revenue as a proportion of Group revenue 22.0% 22.4% (0.4)%pts
Stores
Store revenue has increased 14.3% year-on-year to £117.7m, as consumers returned to
physical retail, and we had a full half of open stores with no Covid-related closures.
The UK, Republic of Ireland and Rest of World, which relates to US stores, recovered
strongly in the half, particularly in the US. Mainland Europe lagged the rest of our
markets largely due to the delayed recovery to high street footfall post Covid,
particularly in Belgium and Germany.
H1 23 H1 22 Vs H1 22
Store revenue by territory £m £m
%
UK and Republic of Ireland 63.0 53.0 18.9%
Mainland Europe 41.3 38.7 6.7%
Rest of World 13.4 11.3 19.5%
Total Store revenue 117.7 103.0 14.3%
We closed 5 stores in the half-year to H1 23 and opened 5 new stores in the UK, the
Netherlands and Germany, ending the half with 219 stores in 11 countries. New openings
in the period included a new flagship store at Battersea Power Station.
Ecommerce
Ecommerce has experienced a slower half because of the consumer shift back to physical
retail, particularly in the UK. However, we have seen strong performance across third
party channels, driving the year-on-year increase of 1.6% to £63.3m. We are encouraged
by the performance and the continued progress made on product and our focus on digital
improvements across our owned sites.
Third party channels include partner programme revenue, where Superdry fulfils the
order placed on a partner website. In H1 23 the shift to 100% partner program with
Zalando was completed and has been a significant driver in the success online,
particularly across Europe which has increased 13.6% year-on-year.
H1 23 H1 22 Vs H1 22
Ecommerce revenue by territory £m £m
%
UK and Republic of Ireland 26.6 29.8 (10.7)%
Mainland Europe 33.5 29.5 13.6%
Rest of World 3.1 2.8 10.7%
Total Ecommerce revenue 63.3 62.2 1.6%
Wholesale
Our Wholesale partners, across mainland Europe particularly, have continued to suffer
from build-up of inventory over the pandemic period, which has led to much lower
levels of in-season sales than anticipated. Low levels of dispatches in the first
half, particularly higher valued AW221 inventory, resulted in a decrease of revenue by
5.2% year-on-year.
H1 23 H1 22 Vs H1 22
Wholesale revenue by territory £m £m
%
UK and Republic of Ireland 16.2 10.7 51.4%
Mainland Europe 62.3 73.4 (15.1)%
Rest of World 27.8 27.9 (0.4)%
Total Wholesale revenue 106.2 112.0 (5.2)%
We had good growth in the UK and Republic of Ireland which worked to partially offset
the decline in Mainland Europe. Growth in the UK was largely driven by additional
clearance deals negotiated to continue the reduction in historical stock.
Gross Margin
As a result of the increased mix of third-party online sales, intake margin pressures,
and lower gross margin in Wholesale as a result of the timing of price increases,
total gross margin has decreased by 3.1%pts year-on-year to 52.1%.
We remain committed to our return to full price trading and in the first half saw full
price mix4 in our owned retail channels increase 4%pts year-on-year from 74% to 78%.
Gross margin by channel H1 23 H1 22 Vs H1 22
Stores 68.2% 69.6% (1.4)%pts
Ecommerce 58.1% 62.9% (4.8)%pts
Retail 64.7% 67.1% (2.8)%pts
Wholesale 30.6% 37.8% (7.2)%pts
Total gross margin 52.1% 55.2% (3.1)%pts
Total Operating Costs
H1 23 Restated1 H1 22 Vs H1 22
£m £m
%
Selling and distribution costs (150.6) (126.4) 19.1%
Central costs (33.4) (32.9) 1.5%
Impairment credit on trade receivables 0.1 2.0 (95.0)%
Adjusted other gains and losses 23.4 4.9 377.6%
Total adjusted operating costs (160.5) (152.4) 5.3%
Net finance expense (2.6) (3.5) (25.7)%
Adjusted loss before tax (13.6) (2.8) -
Total adjusted operating costs increased 5.3% to £160.5m (H1 22: £152.4m) and includes
store, distribution, marketing, head office, central and depreciation costs,
impairment credit on trade receivables and adjusted other gains and losses. The
balance is roughly in line with H1 22, despite our store estate being open for the
full year as we returned to a more normalised way of working.
Selling and distribution costs increased £24.2m to £150.6m, largely due to increase in
store overhead costs. The period marked a return to normalised cost levels following
Covid related relief, with an unwind of the rent relief as well as a return to
standard business rates. During the period, we also saw increases in our energy costs
as well as wage inflation, with a pay rise to our store employees of 9%. Central costs
have marginally decreased to £33.4m.
Adjusted other gains and losses, which include realised and unrealised FX gains,
royalty income and other income, largely related to lease renegotiations under IFRS
16, were higher than in H1 22 £23.4m (H1 22: £4.9m), largely due to a £17.2m gain on
foreign exchange.
Net finance costs were roughly in line with the prior year at £2.6m (H1 22: £3.5m).
£2.0m (H1 22: £2.3m) relates to interest expense on leases under IFRS 16.
The adjusted loss before tax declined to £(13.6)m during the period, a £(10.8)m
decline versus H1 22. Excluding the gain due to foreign exchange, adjusted loss before
tax would have been £(30.8)m during the period.
Adjusting items
£m H1 23 H1 22 Change
Adjusted loss before tax (13.6) (2.8) 385.7%
Fair value movement on forward contracts (4.1) 6.2 (166.1)%
IFRS2 charge – Founder Share Plan - 0.6 (100.0)%
Total adjusting items (4.1) 6.8 (160.3)%
Statutory (loss)/profit before tax (17.7) 4.0 (542.5)%
Adjusting items primarily relate to a £(4.1)m charge in respect of the fair value
movement in financial derivatives (H1 22: £6.2m credit) which has been driven by the
movement between the hedged rates and spot rates during the period and a number of
outstanding contracts.
Adjusted Profit/Loss before tax
The adjusted loss before tax for the first half is £(13.6)m, a decrease of £10.8m from
a loss of £(2.8)m in H1 22 and after the benefit of £17.2m from foreign exchange
gains.
The statutory loss before tax is £(17.7)m, down from a profit of £4.0m in H1 22.
Taxation
The tax credit on losses is £5.5m (H1 21: £1.5m tax charge). As a result, the group
recorded an effective tax rate of 25%.
Taken with the adjusted tax credit of £1.0m, the Group’s total income tax credit of
£5.5m represents a total effective tax rate of 31.2% which is greater than the UK
statutory tax rate of 19%. The difference is driven by the effect of the increase in
the UK corporation tax rate to 25% from 01 April 2023, the tax accounting impact of
certain overseas tax losses for which no tax benefit has been recognised, and tax rate
differentials in overseas subsidiaries.
Profit/Loss after tax
Group statutory loss after tax for the first half was £(12.2)m, compared to a £2.5m
profit in H1 22.
Profit/Loss per share
Adjusted basic EPS is (11.2)p (H1 22: EPS (3.8)p).
Reported basic EPS is (15.0)p (H1 22: 3.0p) based on a basic weighted average of
81,380,288 shares (H1 22: 82,054,759 shares).
Adjusted diluted EPS is (11.2)p (H1 22: (3.8)p) and diluted EPS is (15.0)p (H1 22:
3.0p). These are based on a diluted weighted average of 85,754,749 shares (H1 22:
82,054,759 shares).
Dividends
The Board decided during the Covid pandemic that, given the uncertain macro-economic
outlook, they would not recommend either final or interim dividends for the near-term.
In addition, under the terms of our recent loan facility, the Company is restricted
from declaring, making or paying dividends to shareholders without prior permission
from Bantry Bay, which cannot be unreasonably withheld.
Cash Flow
We ended the half with £38.0m net debt as we entered our seasonal high point in cash
use, coupled with a period of slower sales in October due to warmer weather. As noted
in our 22 December update, our cash position has continued to improve on account of
seasonal sales cycle and strong holiday trading, with net debt of £9.8m as of 31
December 2022.
Working Capital
H1 23 H1 22 Change Change
£m £m £m £m
%
Inventories 172.6 159.4 13.2 8.3%
Trade and other receivables 125.3 109.4 15.9 14.5%
Trade and other payables (178.6) (148.2) (30.4) 20.5%
Net working capital 119.3 120.6 (1.3) (1.1%)
Inventory units have decreased by another 2m to 12.4m units at the end of H1 23 as we
continue with our targeted clearance activity of older stock. We are committed to
reducing this further by the year-end through our focused reduction of the option
count for each seasonal buy. By contrast, our inventory value increased during the
period to £172.6m, up £13.2m year-on-year. This was mostly down to the high proportion
of high-value jackets in the range which were drawn off later by wholesale partners
and saw slower sales in October’s warm weather before the sales rate increased into
November and December.
Trade and other receivables have increased 14.5% to £125.3m in the current year due to
timing of shipments, and later commitments from our Wholesale partners.
Trade and other payables have increased 20.5% to £(178.6)m largely due to timing of
inventory shipments as we brought in orders early to ensure we could start our season
with a full range.
As at the end of H1 23 £2.7m of deferred rent is included in trade and other payables
(H1 22: £0.9m), with £7.5m of deferred rent in relation to IFRS 16 leases included
within lease liabilities (H1 22: £8.2m).
Capital Expenditure
Additions in property, plant and equipment and intangible assets totalled £7.6m (H1
22: £9.0m), as the business focussed on existing IT infrastructure projects, including
the re-platforming of our Ecommerce website to microservices.
Notes:
1. During the current financial year, the Group reclassified Net Gains/(Loss) on FX
realised gains/(losses) on FX contract and unrealised gains from selling, general
and administrative expense to Other gains and losses. This reclassification more
appropriately reflects selling, general and administrative expenses. Prior
financial year comparatives have been restated to align to the current financial
year approach.
Principal risks and uncertainties
The principal risks and uncertainties were outlined in the 2022 Annual Report (pages
56-67). These have been reviewed and amended to ensure they are reflective of our
existing risk profile and are assessed on an on-going basis.
Also, within the Annual Report, the CFO Review included an analysis of the actions
taken to preserve the long-term financial position of Superdry and an Assessment of
Group Prospects (page 73-75).
Specific principal risks and uncertainties include:
Damage may occur to the Superdry Brand, or the Brand may lose its resonance.
Superdry’s ability to achieve success depends on setting a consumer centric and
relevant commercial product strategy that is aligned to brand position, market
dynamics and consumer perception
Compromise to our key technological / physical assets would significantly impede our
ability to trade, particularly during the peak trading period from November to
January. Key assets include Ecommerce platform, Distribution Centres, Critical IT
Systems, Head Office and large stores.
Elevated stock levels represent a risk in terms of shortfall in cash flow and
additional storage costs.
Performance across our global, omni-channel proposition represents a risk.
Specifically:
• Retail store performance represents a risk and in line with market trends, the
ongoing consumer preference shift towards digital shopping channels has seen
declining consumer visits to stores and declining profitability in the physical
retail environment. Covid-19 has accelerated the move towards digital, but the
risk associated with retail remains at an elevated level with the threat of
further lockdowns and additional Covid-19 measures, such as numbers of customers
permitted in stores also impacting performance.
• Wholesale performance is at risk from a number of factors, including grey market
distribution, an inability to meet the critical path and failing to deliver on
time and in full to customers. Covid-19 continues to represent a risk in terms of
our partners being able to trade and surplus stock levels where partners have
return and cancel orders.
• Ecommerce performance represents a significant growth opportunity, however,
represents a risk in terms of reliance on the channel to offset lost store sales
in the short term and delivery of medium- and long-term business objectives. For
example, we will be unable to achieve these objectives if the consumer is moving
faster than we can adapt and that our Ecommerce platforms trail in the wake of
competition.
• Failure to deliver on our growth aspirations in the Group’s key future development
markets, in particular, the USA could lead to investment without sufficient return
in a reasonable timeframe and/or losses and the deployment of significant
management resource at a time when we have multiple priorities.
Our financial results could be impacted by changes in exchange rates. In addition,
given the size of our wholesale partners and associated order book, overdue debt will
always represent a risk for the business.
Financial results are also at risk if the controls that operate within key financial
systems are not operating effectively.
Significant cash inflows, for example, peak trading, do not align with the timing of
peak outflows of cash. As such, there is a requirement to manage working capital
within the business to ensure we have sufficient cash at all times. In addition,
Covid-19 related store closures has put pressure on the cash balance, resulting in the
need for close cash management.
We need to recruit, develop, and retain the calibre of leadership that will enable us
to achieve our strategic goals.
There is a risk our information security is breached causing data and/or systems
compromise. Covid-19 has exacerbated this risk and could impact our ability to trade,
lead to regulatory scrutiny and fines and cause damage to the brand, e.g., loss of
customer trust.
Failure by suppliers to adhere to our Ethical Trading Code of Practice could erode our
reputation as a responsible brand. Customer enquiries on ethical trading continue to
increase, awareness is also growing in line with the modern slavery and the fast
fashion debate, and failure to demonstrate our credentials in this area could also
lead to reputational damage.
Increased risk of human rights issues through the supply chain, as a result of
changing local conditions, for example, Covid-19.
Awareness of environmental sustainability is increasing, and stakeholder expectations
and regulatory attention are also developing at pace. Failure to meet expectations or
adhere to regulatory standards would adversely impact our brand. A consequence of
enhanced reporting is additional resource requirements.
These factors also represent a risk in that they could influence the rate the business
may need to cut its carbon emissions and add additional cost to achieve environmental
compliance (for example, raw materials and lower emission technologies).
In addition, the Group is heavily reliant on key raw materials which will be impacted
by the effects of climate change in the long-term making them harder and more
expensive to source.
A longer-term risk is shifting customer preferences as result of climate change,
requiring the brand to adapt further.
Responsibility statement of the Directors in respect of the condensed consolidated
interim financial information
On 26 January 2023 the Board of Directors of Superdry Plc approved this statement.
The Directors confirm that, to the best of their knowledge:
• The condensed consolidated interim financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by the UK;
• The interim management report includes a fair review of the information required
by:
◦ DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of
important events that have occurred during the first six months of the financial
year and their impact on the condensed consolidated interim financial statements;
and a description of the principal risks and uncertainties for the remaining six
months of the year; and
◦ DTR 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or
performance of the entity during that period; and any changes in the related party
transactions described in the last Annual Report that could do so.
The Directors of Superdry Plc are listed on the Board section of the Group website:
www.corporate.superdry.com
On behalf of the Board of Directors:
Julian Dunkerton
Chief Executive Officer
26 January 2023
Preliminary Results for the 26 weeks ended 29 October 2022
Condensed Group Statement of Comprehensive Income for the 26 weeks ended 29 October
2022 (unaudited)
H1 2023 H1 2022 (Restated)
Adjusted* Adjusting Total Adjusted* Adjusting Total
Note items items
£m (note 6) £m £m (note 6) £m
£m £m
Revenue 5 287.2 - 287.2 277.2 - 277.2
Cost of sales (137.7) - (137.7) (124.1) - (124.1)
Gross profit 149.5 - 149.5 153.1 - 153.1
Selling, general and (184.0) - (184.0) (159.3) 0.6 (158.7)
administrative expenses**
Other gains and losses 6 23.4 (4.1) 19.3 4.9 6.2 11.1
(net)
Impairment credit on 0.1 - 0.1 2.0 - 2.0
trade receivables
Operating (loss)/profit (11.0) (4.1) (15.1) 0.7 6.8 7.5
Finance expense (2.6) - (2.6) (3.5) - (3.5)
(Loss)/Profit before tax 5 (13.6) (4.1) (17.7) (2.8) 6.8 4.0
Tax credit/(expense) 8 4.5 1.0 5.5 (0.3) (1.2) (1.5)
(Loss)/Profit for the (9.1) (3.1) (12.2) (3.1) 5.6 2.5
period
Attributable to:
Owners of the Company (9.1) (3.1) (12.2) (3.1) 5.6 2.5
Other comprehensive
expense/(income) net of
tax:
Items that may be
subsequently reclassified
to profit or loss:
Currency translation
differences on (7.1) - (1.1) - (1.1)
translation of foreign (7.1)
operations
Total comprehensive
(expense)/income for (16.2) (3.1) (19.3) (4.2) 5.6 1.4
the period
Attributable to:
Owners of the Company (16.2) (3.1) (19.3) (4.2) 5.6 1.4
pence pence
per per
share share
Earnings per share:
Basic 16 (15.0) 3.0
Diluted 6 (15.0) 3.0
* Adjusted and adjusting items are defined in note 7.
** During the current financial year, the Group reclassified realised gains/(losses)
on FX contract and unrealised gains from selling, general and administrative expense
to Other gains and losses. This reclassification more appropriately reflects selling,
general and administrative expenses. Prior financial year comparatives have been
restated to align to the current financial year approach.
H1 2023 is the 26 weeks ended 29 October 2022 and H1 2022 is for 26 weeks ended 23
October 2021.
Condensed Group Balance Sheet as at 29 October 2022
Unaudited Unaudited Audited
Note H1 23 H1 22 FY22
£m £m
£m
ASSETS
Non-current assets
Property, plant and equipment 11 19.9 28.1 22.4
Right-of-use assets 13 68.1 95.1 80.2
Intangible assets 12 44.8 41.8 42.3
Deferred tax assets 73.2 54.8 66.3
Derivative financial instruments 19 0.9 0.2 0.9
Total non-current assets 206.9 220.0 212.1
Current assets
Inventories 172.6 159.4 132.7
Trade and other receivables 125.3 109.4 117.5
Derivative financial instruments 19 8.9 4.1 8.9
Current tax receivables - 3.8 -
Cash and bank balances 18 27.8 44.1 20.5
Total current assets 334.6 320.8 279.6
LIABILITIES
Current liabilities
Borrowings 18 65.8 48.0 21.5
Trade and other payables 178.6 148.2 129.2
Current income tax liabilities 3.9 - 4.0
Provisions for other liabilities and charges 2.4 4.7 4.7
Derivative financial instruments 19 4.6 2.5 0.5
Lease liabilities 58.1 66.1 66.1
Total current liabilities 313.4 269.5 226.0
Net current assets 21.9 51.3 53.6
Non-current liabilities
Trade and other payables 6.4 1.3 2.6
Provisions for other liabilities and charges 5.5 8.4 7.2
Deferred income tax liabilities 0.4 - -
Derivative financial instruments 19 - 0.1 -
Deferred liabilities 0.7 1.0 0.8
Lease liabilities 128.9 168.5 151.2
Total non-current liabilities 141.9 179.3 161.8
Net assets 86.2 92.0 103.9
EQUITY
Share capital 15 4.1 4.1 4.1
Share premium 149.2 149.2 149.2
ESOP Reserve (2.0) - (2.0)
Translation reserve (8.7) 5.5 (1.6)
Merger reserve (302.5) (302.5) (302.5)
Retained earnings 246.1 235.7 256.7
Total equity 86.2 92.0 103.9
Condensed Group Cash Flow Statement for the 26 weeks ended 29 October 2022 (unaudited)
Note H1 23 H1 22
£m £m
Cash (used in)/generated from operating activities 9 (7.5) 12.5
Tax payment (0.8) (2.3)
Net cash (used in)/generated from operating activities (8.3) 10.2
Cash flow from investing activities
Purchase of property, plant and equipment (2.0) (5.0)
Purchase of intangible assets (5.6) (4.0)
Net cash (used in) investing activities (7.6) (9.0)
Cash flow from financing activities
Repayment of ABL facility (121.5) -
Draw down on borrowings 155.0 20.6
interest paid (2.6) (3.5)
Repayment of leases – principal amount (30.7) (40.0)
Net cash generated from/(used in) financing activities 0.2 (22.9)
Net (decrease) in cash and cash equivalents 18 (15.7) (21.7)
Cash and cash equivalents at beginning of period 18 17.4 38.9
Exchange gains/(losses) on cash and cash equivalents 18 12.2 (0.5)
Cash and cash equivalents at end of period 18 13.9 16.7
Which made up of:
Cash and bank balances 27.8 44.1
Overdraft (13.9) (27.4)
* Net Cash and Cash Equivalents includes overdraft
Condensed Group Statement of Changes in Equity for the 26 weeks ended 29 October 2022
(unaudited)
Share Share ESOP Translation Merger Retained Total
Group Note capital premium share reserve reserve earnings equity
£m £m reserve £m £m £m £m
£m
Balance at 30 April 4.1 149.2 (2.0) (1.6) (302.5) 256.7 103.9
2022
Comprehensive - - - - - - -
expense
Loss for the period - - - - - (12.2) (12.2)
Other comprehensive - - - - - - -
income
Currency
translation - - - (7.1) - - (7.1)
differences
Total other
comprehensive - - - (7.1) - - (7.1)
income/(expense)
Total comprehensive
income /(expense) - - - (7.1) - (12.2) (19.3)
for the period
Transactions with
owners
Shares issued 15 - - - - - - -
Employee share - - - - - 1.6 1.6
award schemes
Dividend payments 10 - - - - - - -
Total transactions - - - - - 1.6 1.6
with owners
Balance at 29 4.1 149.2 (2.0) (8.7) (302.5) 246.1 86.2
October 2022
Condensed Group Statement of Changes in Equity for the 26 weeks ended 23 October 2021
(unaudited)
to the members of Superdry plc
Share Share ESOP Translation Merger Retained Total
Group Note capital premium share reserve reserve earnings equity
£m £m reserve £m £m £m £m
£m
Balance at 24 April 4.1 149.2 - 6.6 (302.5) 233.0 90.4
2021
Comprehensive
expense
Profit for the - - - - - 2.5 2.5
period
Other comprehensive
income
Currency translation - - - (1.1) - - (1.1)
differences
Total other
comprehensive - - - (1.1) - - (1.1)
income/(expense)
Total comprehensive
income/(expense)for - - - (1.1) - 2.5 1.4
the period
Transactions with
owners
Shares issued 15 - - - - - - -
Employee share award - - - - - 0.2 0.2
schemes
Dividend payments 10 - - - - - - -
Total transactions - - - - - 0.2 0.2
with owners
Balance at 23 4.1 149.2 - 5.5 (302.5) 235.7 92.0
October 2021
Condensed Group Statement of Changes in Equity for the 53 weeks ended 30 April 2022
(audited)
to the members of Superdry plc
Share Share ESOP Translation Merger Retained Total
Group Note capital premium share reserve reserve earnings equity
£m £m reserve £m £m £m £m
£m
Balance at 24 April 4.1 149.2 - 6.6 (302.5) 233.0 90.4
2021
Comprehensive
expense
Profit for the - - - - - 22.7 22.7
period
Other comprehensive
income
Currency
translation - - - (8.2) - - (8.2)
differences
Total other
comprehensive - - - (8.2) - - (8.2)
income/(expense)
Total comprehensive
income/(expense) - - - (8.2) - 22.7 14.5
for the period
Transactions with
owners
Shares issued - - - - - - -
ESOP shares - - (2.0) - - - (2.0)
acquired
Employee share - - - - - 1.0 1.0
award schemes
Dividend payments - - - - - - -
Total transactions - - (2.0) - - 1.0 (1.0)
with owners
Balance at 30 April 4.1 149.2 (2.0) (1.6) (302.5) 256.7 103.9
2022
Notes to the Group Financial Statements
1. Basis of preparation
General information
The Company is a public company limited by shares incorporated in the United Kingdom
under the Companies Act and is registered in England and Wales. The condensed interim
financial information ("interim financial information") of Superdry Plc for the 26
weeks ended 29 October 2022 ("October 2022") comprise the company and its subsidiaries
(together referred to as "the Group"). The prior comparative period is for the 26
weeks ended 23 October 2021 ("October 2021").
a) Basis of preparation
This interim financial information does not comprise statutory accounts within the
meaning of section 434 of the Companies Act 2006. The Group statutory financial
statements for the 53 weeks ended 30 April 2022 ("April 2022") are available upon
request from the company's registered office at Superdry Plc, Unit 60, The Runnings,
Cheltenham, Gloucestershire, GL51 9NW or 4 www.corporate.superdry.com.
This interim financial information has been prepared in accordance with IAS 34
"Interim Financial Reporting" as UK adopted international accounting standards and the
requirements of the Disclosures and Transparency Rules. They do not include all of the
information required for full annual financial statements and should be read in
conjunction with the Group financial statements as at and for the 53 weeks ended 30
April 2022 ("Group Annual Report FY22), which have been prepared in accordance with
International Financial Reporting Standards ('IFRSs') as adopted by the United Kingdom
and companies act 2006. This interim financial information was approved by the Board
of Directors on 26 January 2022.
The comparative figures for April 2022 are extracted from the Group's statutory
accounts for that financial year. Those accounts have been reported on by the
company's auditor and delivered to the registrar of companies. The report of the
auditor (i) was unqualified; (ii) did not drawn attention to any matters by way of
emphasis; and (iii) did not contain statements under section 498(2) or (3) of the
Companies Act 2006 but did include a section highlighting a material uncertainty that
may cast significant doubt on the Group and Company’s ability to continue as a going
concern. Further detail is provided within the Assessment of the Group’s Prospects
section of this announcement.
The financial information in this interim financial information document is neither
audited nor reviewed by the auditor.
This interim financial information has been prepared under the going concern basis.
The Group directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future and operate
within its borrowing facilities and covenants for a period of at least 12 months from
the date of signing the financial statements. Accordingly, the financial statements
continue to be prepared on the going concern basis.
2. Significant accounting policies
The accounting policies adopted are consistent with those of the previous financial
period (see Annual Report for the year ended 30 April 2022). Whilst the financial
statements were prepared on a going conern basis, the going concern refers to a
material uncertainty at the date the financial statements were approved, arising from
the expiry of the ABL facility in January 2023. On the basis that a replacement
facility has now been negotiated as described below, the directors consider there is
no longer a material uncertainty in relation to going concern, although the business
will continue to monitor liquidity closely, particularly during the working capital
peak ahead of the Christmas trading period where headroom is likely to remain tight
for a short period.
A loan facility of up to £80m, including a £30m term loan, for three years with an
option to extend for one further year was agreed, with specialist lender Bantry Bay
Capital Limited1. This replaces the previous up to £70m Asset Based Lending Facility
which was due to expire on 31 January 2023. The interest rate SONIA2 + 7.5% on the
drawn element. The revised facility is covenant light, providing flexibility to
navigate the current challenging macro-economic environment and continue to focus on
driving our brand strategy forward.
Notes
1. Bantry Bay Capital Limited is a specialist lender which provides supportive debt
capital solutions to corporates in periods of growth and other change. Bantry Bay
focuses on asset-based financings for private and publicly listed companies across
a wide array of industries, working with clients to provide the foundations for
stability and growth.
2. The Sterling Overnight Interbank Average Rate (SONIA) is the effective overnight
interest rate paid by banks for unsecured transactions in the British sterling
market.
The Group has not adopted any new accounting standards in the period. Other changes
to accounting standards in the period had no material impact.
3. Key sources of estimation uncertainty and critical judgements in applying the
Group’s accounting policies
The preparation of interim financial information requires judgements, estimates and
assumptions to be made that affect the reported value of assets, liabilities,
revenues, and expenses. The nature of estimation and judgement means that actual
outcomes could differ from expectation.
In preparing this interim financial information, unless stated otherwise, the
significant judgements made by management in applying the Group's accounting policies
and the key sources of estimation were the same as those that applied to the
consolidated financial statements for the 53 weeks ended 30 April 2022 (as set out on
pages 162 to 165 of the Group Annual Report FY22). These were as follows:
• Store impairment estimates;
• Onerous property related contracts provisions;
• Recoverability of trade debtors;
• Attributing Ecommerce sales and costs to stores;
• Store impairment judgements;
• Determination of Adjusting items.
4. Seasonality of operations
Due to the seasonal nature of the Retail segment, higher revenues and operating
profits are usually expected in the second half of the year under normal trading
conditions. This weighting of higher revenues in the second half of the year is a
consequence of the brand's strength in cooler weather categories, such as outerwear,
which also carry higher average selling prices. Operating profits therefore benefit
from operating cost leverage, particularly in the Group's stores. Wholesale
seasonality is more evenly spread across the year.
In the financial period ended 30 April 2022, 45.5% of total revenues accumulated in
the first half of the year, with 54.5% in the second half. This corresponded to
(12.8)% of adjusted profit before tax in the first half of the year and 112.8% in the
second half.
5. Segment information
Operating segments are reported in a manner consistent with the internal reporting
provided to the Chief Operating Decision-Maker (“CODM”).’ As per Prior year interim
accounts. Revenue is generated from the same products (clothing and accessories) in
all segments; the reporting of segments is based on how these sales are generated. The
accounting policies of the reportable segments are the same as the Group’s accounting
policies described in note 1. Gross profit is the measure reported to the Group’s CODM
for the purpose of resource allocation and assessment of segment performance. The
Group derives its revenue from contracts with customers for the transfer of goods and
services at a point in time.
Segmental information for the business segments of the Group for H1 23 and H1 22 is
set out below. The ‘Retail’ subtotal of the ‘Stores’ and ‘Ecommerce’ segments
presented below is considered useful additional information to the reader.
H1 23 segmental analysis Stores Ecommerce Retail Wholesale Central costs Group
(unaudited) £m £m subtotal £m £m £m
£m
Total segment revenue 117.7 63.3 181.0 194.7 - 375.7
Less: inter-segment revenue - - - (88.5) - (88.5)
Revenue from external 117.7 63.3 181.0 106.2 - 287.2
customers
Gross profit 80.3 36.7 117.0 32.5 - 149.5
Profit/(loss) before tax (12.9) 11.9 (16.7) (17.7)
The segment measure of profit required to be presented under IFRS 8 Segments is gross
profit/(loss). Profit/(loss) before tax has been presented as an additional profit
measure which is considered to provide useful information to the reader. Certain costs
have not been allocated between the Stores and Ecommerce segments in both the current
and prior period.
The following additional information is considered useful to the reader:
Adjusted* Adjusting items Reported
H1 23 segmental analysis (unaudited) items £m
£m £m
Revenue
Retail 181.0 - 181.0
Wholesale 106.2 - 106.2
Total revenue 287.2 - 287.2
Operating (loss)
Retail (7.8) (3.2) (11.0)
Wholesale 12.9 (0.9) 12.0
Central costs (16.1) - (16.1)
Total operating (loss) (11.0) (4.1) (15.1)
Profit/(loss) before tax (13.6) (4.1) (17.7)
Retail (9.7) (3.2) (12.9)
Wholesale 12.8 (0.9) 11.9
Central costs (16.7) - (16.7)
Total (loss) before tax (13.6) (4.1) (17.7)
* Adjusted is defined as reported results before adjusting items and is further
explained in note 22.
The (£4.1m) adjusting items in the Retail and Wholesale segments relate to the fair
value of forward exchange contracts, as disclosed further in note 7.
H1 22 segmental analysis Stores Ecommerce Retail Wholesale Central costs Group
(unaudited) £m £m subtotal £m £m £m
£m
Total segment revenue 103.0 62.2 165.2 187.8 - 353.0
Less: inter-segment revenue - - - (75.8) - (75.8)
Revenue from external 103.0 62.2 165.2 112.0 - 277.2
customers
Gross profit 71.7 39.1 110.8 42.3 - 153.1
Profit/(loss) before tax 12.5 26.2 (34.7) 4.0
The following additional information is considered useful to the reader:
Adjusted* Adjusting items Reported
H1 22 segmental analysis (unaudited) Items £m
£m £m
Revenue
Retail 165.2 - 165.2
Wholesale 112.0 - 112.0
Total revenue 277.2 - 277.2
Operating profit
Retail 10.2 4.5 14.7
Wholesale 24.5 1.7 26.2
Central costs (34.0) 0.6 (33.4)
Total operating profit 0.7 6.8 7.5
Profit/(loss) before tax
Retail 8.0 4.5 12.5
Wholesale 24.5 1.7 26.2
Central costs (35.3) 0.6 (34.7)
Total (loss)/profit before tax (2.8) 6.8 4.0
* Adjusted is defined as reported results before adjusting items and is further
explained in note 22.
The £0.6m adjusting item in the Central segment is in relation to the Founder Share
Plan. The £6.2m adjusting items in the Retail and Wholesale segments relate to the
unrealised fair value of forward exchange contracts, as disclosed further in note 7.
Revenue from external customers in the UK and the total revenue from external
customers from other countries are:
Unaudited H1 23 Unaudited H1 22
£m £m
External revenue – UK 105.8 93.5
External revenue – Europe 137.0 141.6
External revenue – Rest of World 44.4 42.1
Total external revenue 287.2 277.2
Included within non-UK external revenue is £65.2m (H1 22: £59.6m) generated by our
overseas
subsidiaries.
The total of non-current assets, other than deferred tax assets, located in the UK is
£79.9m (H1 22: £75.7m), and the total of non-current assets located in other countries
is £53.8m (H1 22: £89.5m).
6. Other gains and losses (net)
The below adjustments are disclosed separately in the Group statement of comprehensive
income and are applied to the reported (loss) before tax to arrive at the adjusted
(loss) before tax.
Group
Restated
Unaudited H1 23
£m Unaudited H1 22
£m
Realised gains on foreign exchange contracts 10.3 (1.3)
Unrealised gains on foreign exchange 6.9 0.1
Net Gains on foreign exchange excluding unrealised
fair value (loss)/gain on foreign exchange forward 17.2 (1.1)
contracts*
Unrealised fair value (loss)/gain on foreign exchange (4.1) 6.2
forward contracts
Royalty income 3.4 3.0
Lease modifications and terminations 2.0 10.8
Lease termination: Settlement Fee - (8.1)
Other income 0.8 0.4
Total other gains and losses 19.3 11.1
*During the current financial year, the Group reclassified realised gains/(losses) on
FX contracts and unrealised gains on FX from selling, general and administrative
expense to Other gains and losses. This reclassification more appropriately reflects
selling, general and administrative expenses. Prior financial year comparatives have
been restated to align to the current financial year approach.
The unrealised fair value loss on foreign exchange forward contracts of £4.1m (H1 22:
£6.2 gain) has been treated as an adjusting item, see note 7. Hedge accounting is not
applied by the Group to these financial instruments.
Royalty income relates to wholesale royalty agreements. Other income in both financial
years includes rent and profit from the sales of fixtures and fittings to franchisees.
Lease modifications and terminations relate to lease renegotiations under IFRS 16,
which resulted in reducing both the lease liability and the right-of-use asset. As the
adjustment exceeded the carrying value of the right-of-use asset, this excess has been
recognised as a gain in profit or loss.
7. Adjusting items
The adjustments below are disclosed separately in the Group statement of comprehensive
income and are applied to the Reported (Loss) before tax to arrive at the Adjusted
(Loss) before tax. Further information about the determination of adjusting items in
financial year 2023 is included in note 22.
Unaudited H1 23 Unaudited H1 22
£m £m
Adjusting items
Unrealised (loss)/ gain on financial derivatives (4.1) 6.2
IFRS 2 (charge)/credit on Founder Share Plan - 0.6
Total adjusting items (4.1) 6.8
Taxation
Deferred tax on adjusting items 1.0 (1.2)
Total taxation 1.0 (1.2)
Total adjusting items after tax (3.1) 5.6
Adjusting items before tax in the period totalled a net loss of (£4.1m) in the year
(H1 22: £6.8m gain).
Unrealised (loss)/gain on financial derivatives
A £4.1m charge has been recognised in respect of the fair value movement in financial
derivatives (H1 22: £6.2m credit).
IFRS 2 charge on Founder Share Plan
The IFRS 2 charge of £nil (H1 22: £0.6m credit) in respect of the Founder Share Plan
is also included within adjusting items. The scheme ended on 31st January 2022.
8. Tax expense/(credit)
The Group's income tax credit for H1 23 is £5.5m (H1 22: £1.5m income tax charge).
The Group's tax credit of £1.0m on adjusting items of £4.1m represents an effective
tax rate of 25%.
Taken with the adjusted tax credit of £1.0m, the Group's total income tax credit of
£5.5m represents a total effective tax rate of 31.2% for the period (H1 22: 37.5%).
The Group's total effective tax rate of 31.2% is higher than the statutory rate of tax
of 19%. This is primarily due to the effect of the UK corporation tax rate change to
25% from 01 April 2023, the tax accounting impact of certain overseas losses for which
no tax benefit has been recognised and tax rate differentials in overseas
subsidiaries.
Factors affecting the tax expense for the period are as follows:
Unaudited H1 23 Unaudited H1 22
£m £m
(Loss)/Profit before tax (17.7) 4.0
(Loss)/Profit multiplied by the standard rate in the (3.3) 0.8
UK – 19.0% (H1 22: 19.0%)
Expenses not deductible for tax purposes 0.3 1.2
Fixed asset differences 0.4 -
Uncertain tax position - 0.5
Overseas tax differentials 1.3 1.4
Deferred tax not recognised (2.1) (2.5)
UK rate change on CY movement (2.1) -
Adjustment in respect of prior periods - 0.1
Total tax (credit)/expense (5.5) 1.5
9. Note to the cash flow statement
Reconciliation of operating profit to cash generated from operations
Unaudited Unaudited
Note
H1 23 H1 22
£m £m
Operating (loss)/profit (15.1) 7.5
Adjusted for:
• Unrealised Loss/(gain) on derivatives 7 4.1 (6.2)
• Depreciation of property, plant and equipment and 11,13 20.9 19.3
right-of-use assets
• Amortisation of intangible assets 12 3.9 3.8
• Loss on disposal of property, plant and equipment (0.2) -
• Lease modifications (2.0) (10.3)
• IFRS 16 Covid-19 rent concessions 0.1 (1.3)
• Decrease in onerous property related contracts provision (3.4) (2.8)
(net of releases on exited stores)
• Decrease in other provisions (0.2) -
• IFRS 2 Charges – FSP - (0.6)
• Employee share award schemes 1.8 0.4
• Net foreign exchange (gains)/loss (16.8) 1.2
• Write down of inventory 1.4 1.0
• Net impairment (credit) of trade receivables (0.1) (2.0)
Operating cash flow before movements in working capital (5.6) 10.6
Changes in working capital:
• (Increase) in inventories (41.0) (12.3)
• (Increase) in trade and other receivables (5.7) (5.8)
• Increase in trade and other payables and provisions 44.8 20.0
Cash (used in)/generated from used in operating activities (7.5) 12.5
10. Dividends
The Board decided during the Covid pandemic that, given the uncertain macro-economic
outlook, they would not recommend either final or interim dividends for the near-term.
In addition, under the terms of our recent loan facility, the Company is restricted
from declaring, making or paying dividends to shareholders without prior permission
from Bantry Bay, which cannot be unreasonably withheld.
11. Property, plant and equipment
Movements in the carrying amount of property, plant and equipment in the period to H1
23 were as follows:
Land and Leasehold Furniture, Computer
buildings improvements fixtures and equipment Total
£m £m fittings £m £m
£m
NBV at 30 April 2022 (Audited) 4.1 7.7 8.5 2.1 22.4
Additions - 0.5 1.4 0.1 2.0
Disposals - - 0.1 - 0.1
Depreciation Charge - (4.9) (2.1) (0.5) (7.5)
Exchange Differences - 2.5 0.4 - 2.9
Net book value at 29 October 4.1 5.8 8.3 1.7 19.9
2022 (Unaudited)
12. Intangible assets
Movements in the carrying amount of intangible assets in the period to H1 23 were as
follows:
Trademarks Website and Distribution Goodwill Total
£m software agreements £m £m
£m £m
NBV at 30 April 2022 2.1 17.7 1.8 20.7 42.3
(Audited)
Additions 0.1 5.5 - - 5.6
Disposals - - - - -
Amortisation charge (0.2) (3.7) - - (3.9)
Exchange differences - - 0.4 0.4 0.8
Net book value at 29 October 2.0 19.5 2.2 21.1 44.8
2022 (Unaudited)
13. Leases
Right-of-use assets
Right-of-use asset Right-of-use asset
H1 23 H1 22
£m £m
NBV as at 30 April 2022 (Audited) 80.2 91.1
Additions 1.3 33.8
Disposals (0.1) (15.8)
Lease modifications - (1.0)
Depreciation charge (13.4) (13.1)
Exchange rate difference - 0.1
Net balance sheet amount at 29 October 2022 68.1 95.1
(Unaudited)
14. Contingencies and commitments
Contingent liabilities
The Company is party to an unlimited cross guarantee over all liabilities of the
Group.
The Group has contractual agreements with third party wholesale agents which include a
right for the wholesale agent to be indemnified when the contract is terminated. These
future indemnity amounts are held as contingent liabilities until the contract is
terminated, at which point they are held as provisions or accruals. The value of
future obligations for contracts which have not yet been terminated (and have no
defined end date) is £3.3m (H1 22: £3.4m).
15. Equity securities
39,576 ordinary shares of 5p each were authorised, allotted and issued in the period
under the Superdry Plc Share based Long Term Incentive Plans, Save As You Earn and Buy
As You Earn schemes.
16. Earnings per share
Unaudited Unaudited
H1 23 H1 22
£m £m
Earnings
(Loss)/Profit for the period attributable to owners of the (12.2) 2.5
Company
No. No.
Number of shares at period-end 81,399,763 82,109,706
Weighted average number of ordinary shares – basic 81,380,288 82,054,759
Effect of dilutive options and contingent shares 4,374,461 2,386,732
Weighted average number of ordinary shares – diluted 85,754,749 84,441,491
Basic earnings per share (pence) (15.0) 3.0
Diluted earnings per share (pence) (15.0) 3.0
Adjusted earnings per share
Unaudited Unaudited
H1 23 H1 22
£m £m
Earnings
Adjusted profit/(loss) for the period attributable to the owners (9.1) (3.1)
of the Company
No. No.
Weighted average number of ordinary shares – basic 81,380,288 82,054,759
Weighted average number of ordinary shares – diluted 81,380,288 82,054,759
Adjusted basic earnings per share (pence) (11.2) (3.8)
Adjusted diluted earnings per share (pence) (11.2) (3.8)
On 29 October 2022, 4,374,461 (23 October: 2,386,732) share options were outstanding
that could potentially dilute basic EPS. These are antidilutive when the Group is in a
loss-making position, so have not been included in the EPS calculations where this is
the case.
There were no share-related events after the balance sheet date that may affect
earnings per share.
17. Balances and transactions with related parties
Transactions with Directors
Directors of the Group within the period and their immediate relatives control 24.1%
(H1 22: 20.7%) of the voting shares of the Group. There have been no material
transactions in the period with related parties, including Directors.
During the reporting period, the Group has spent £0.1m (H1 22: £0.1m) on travel and
subsistence through companies in which Julian Dunkerton has a personal investment. The
balance outstanding at 29 October 2022 was £nil (2021: £nil). This expenditure
includes the provision of corporate travel, hotel and catering services supplied on an
arm’s-length basis. These interests have been disclosed and authorised by the Board.
In addition, the Group occupies two properties owned by J M Dunkerton SIPP pension
fund whose beneficiary and member trustee is Julian Dunkerton. The properties are
rented to the Group at a rate that is not on an arm’s-length basis. Rental charges for
these properties during the year were £0.1m (H1 22: £0.1m). The balance outstanding at
29 October 2022 was £nil (H1 22: £nil).
18. Net cash/(debt)
Analysis of net cash – 30 April 2022 Cash flow Non-cash changes 29 October 2022
October 2022 (unaudited) £m £m £m £m
Cash and bank balances 20.5 (4.9) 12.2 27.8
Overdraft (3.1) (10.8) - (13.9)
Cash and cash equivalents 17.4 (15.7) 12.2 13.9
ABL Facility (18.4) (33.5) - (51.9)
Net debt (1.0) (49.2) 12.2 (38.0)
Group
Analysis of net cash – 24 April 2021 Cash flow Non-cash changes 23 October 2021
October 2021 (unaudited) £m £m £m £m
Cash and bank balances 38.9 5.7 (0.5) 44.1
Overdraft - (27.4) - (27.4)
Cash and cash equivalents 38.9 (21.7) (0.5) 16.7
ABL Facility - (20.6) - (20.6)
Net cash/(debt) 38.9 (42.3) (0.5) (3.9)
Non-cash changes relate to exchange gains on cash and cash equivalents.
Short-term borrowings
The Group had up to a net £10m uncommitted overdraft facility which has no financial
covenants and is included within the cash pooling arrangements.
The Group had an Asset Backed Lending facility (ABL facility) for up to £70m, which
end in January 2023. The borrowing base varied throughout the year depending on the
level of the Group's eligible inventory and receivables. As at half-year end, £60.4m
was reported to HSBC as being available to borrow based on eligible inventory and
receivables in October 2022. The ABL facility with HSBC and BNPP had a drawn balance
of £51.9m as at 29 October 2022.
A new loan facility of up to £80m, including a £30m term loan, for three years with an
option to extend for one further year was agreed, with specialist lender Bantry Bay
Capital Limited1. This replaces the previous up to £70m Asset Based Lending Facility
which was due to expire on 31 January 2023. The interest rate SONIA2 + 7.5% on the
drawn element. The revised facility is covenant light, providing flexibility to
navigate the current challenging macro-economic environment and continue to focus on
driving our brand strategy forward.
Notes
1. Bantry Bay Capital Limited is a specialist lender which provides supportive debt
capital solutions to corporates in periods of growth and other change. Bantry Bay
focuses on asset-based financings for private and publicly listed companies across
a wide array of industries, working with clients to provide the foundations for
stability and growth.
2. The Sterling Overnight Interbank Average Rate (SONIA) is the effective overnight
interest rate paid by banks for unsecured transactions in the British sterling
market.
The bank overdraft balance represents individual overdrawn balances within the Group's
cash-pooling
arrangements. These had been disclosed gross in line with the requirements of IAS 32.
Financial instruments: Presentation. The Group has a net overdraft facility with HSBC
Bank plc. Gross overdrafts at 29 October 2022 amounted to £13.9m.
Bank overdrafts are shown within borrowings in current liabilities on the balance
sheet.
19. Financial risk management
The Group's activities expose it to a variety of financial risks including: market
risk (including foreign currency risk and cash flow interest rate risk), credit risk
and liquidity risk. The condensed interim financial information does not include all
financial risk management information and disclosures required in the annual financial
statements; they should be read in conjunction with the Group Annual Report FY22.
There have been no changes in the risk management department or in any risk management
policies since the year end.
Liquidity risk
Compared to the year end, there was no material change in the contractual undiscounted
cash out flows for financial liabilities.
Fair value estimation
The table below analyses financial instruments carried at fair value, by valuation
method. The different levels have been defined as follows:
• Quoted prices (unadjusted) in active markets for identical assets or liabilities
(Level 1).
• Inputs other than quoted prices included within Level 1 that are observable for
the asset or liability, either directly (that is, as prices) or indirectly (that
is, derived from prices) (Level 2).
• Inputs for the asset or liability that are not based on observable market data
(that is, unobservable inputs) (Level 3).
The following table presents the Group's assets and liabilities that are measured at
fair value at 29 October 2022 and 23 October 2021.
Unaudited H1 UnauditedH1 22
Level 1 Level 2 23 Level 1 Level 2 Level 3
£m £m Level 3 £m £m £m
£m
Assets
Derivative financial
instruments
• Forward foreign - 9.8 - - 4.3 -
exchange contracts
Liabilities
Derivative financial
instruments
• Forward foreign - (4.6) - - (2.6) -
exchange contracts
The level 2 forward foreign exchange valuations are derived from mark-to-market
valuations based on observable market data as at the close of business on 29 October
2022.
There were no transfers between levels during the period.
The fair value of the following financial assets and liabilities is approximate to
their carrying amount:
• Trade and other receivables
• Cash and cash equivalents
• Trade and other payables
• Borrowing
• Lease liabilities
20. Government assistance
The Group received government support within the UK and EU territories during the
prior year in response to the COVID-19 pandemic. This included: deferring tax
payments; obtaining reductions in business rates from the UK government; seeking
compensation for lost revenue and subsidies to cover fixed costs; and placing staff on
furlough during the periods of store closures.
Furlough support across all territories of £nil was recognised in the half-year (H1
22: £0.2m), through the UK’s Coronavirus Job Retention Scheme (CJRS) and equivalent
schemes in other countries. A provision was recognised in FY22 to cover any existing
furlough related clawbacks. This provision now totals £1.1m (H1 22: £1.7m).
Lost revenue and subsidy support in the UK and other territories of £0.1m has been
recognised in the period (H1 22: £0.7m).
Government grants are not recognised until there is reasonable assurance that the
Group will comply with the conditions attached to them and that the grants will
be received. Government grants are recognised in profit or loss on a systematic basis
over the periods in which the Group recognises as expenses the related costs for which
the grants are intended to compensate. The value is netted off against costs in
selling, general and administrative expenses.
21. Post balance sheet events
On 22 December Superdry announced that it has agreed a loan facility of up to £80m,
including a £30m term loan, for three years to January 2026 with an option to extend
for one further year, with specialist lender Bantry Bay Capital Limited. This will
replace the existing up to £70m Asset Based Lending Facility which was due to expire
at the end of January 2023. Given market conditions, the interest rate will be higher
than our previous agreement at SONIA + 7.5% on the drawn element. The revised facility
is operationally less complex to manage and covenant light, giving the necessary
flexibility to navigate the current challenging macro-economic environment and
continue to focus on driving the brand strategy forward.
22. Alternative performance measures
Introduction
The Directors assess the performance of the Group using a variety of performance
measures, some are IFRS, and some are adjusted and therefore termed ‘‘non-GAAP’’
measures or “alternative performance measures” (APMs). The rationale for using
adjusted measures is explained below. The Directors principally discuss the Group’s
results on an adjusted basis. Results on an adjusted basis are presented before
adjusting items.
The APMs used these consolidated interim statements are adjusted operating profit and
margin, adjusted profit/(loss) before tax, adjusted tax expense and adjusted effective
tax rate, adjusted earnings per share and net cash/debt.
A reconciliation from these non-GAAP measures to the nearest measure prepared in
accordance with IFRS is presented below. The APMs we use may not be directly
comparable with similarly titled measures used by other companies. There have been no
changes in definitions from the prior period.
Adjusting items
The Group's statement of comprehensive income and segmental analysis separately
identify adjusted results before adjusting items. The adjusted results are not
intended to be a replacement for the IFRS results. The Directors believe that
presentation of the Group's results in this way provides stakeholders with additional
helpful analysis of the Group's financial performance. This presentation is consistent
with the way that financial performance is measured by management and reported to the
Board and the Executive Committee. It is also consistent with the way that management
is incentivised. In determining whether events or transactions are treated as
adjusting items, management considers quantitative as well as qualitative factors such
as the frequency or predictability of occurrence. Adjusting items are identified by
virtue of their size, nature or incidence.
Examples of charges or credits meeting the above definition, and which have been
presented as adjusting items in the current and/or prior years include:
• Acquisitions/disposals of significant businesses and investments (including
related to the joint venture);
• Impact on deferred tax assets/liabilities for changes in tax rates;
• Business restructuring programmes;
• Derecognition of deferred tax assets (including related to the joint venture);
• Asset impairment charges and onerous lease provisions;
• The movement in the fair value of unrealised financial derivatives; and
• IFRS 2 charges in respect of Founder Share Plan ('FSP').
In the event that other items meet the criteria, which are applied consistently from
year to year, they are also treated as adjusting items. In previous reporting periods
"Adjusting items" were described as "Exceptional and other items".
Adjusting items in this period
The following items have been included within ‘‘Adjusting items’’ for the period ended
29 October 2022:
Fair value re-measurement of foreign exchange contracts – Financial years H1 23, FY22
and H1 22
The fair value of unrealised financial derivatives is reviewed at the end of each
reporting period and unrealised losses/gains are recognised in the Group statement of
comprehensive income.
The Directors consider unrealised losses/gains to be adjusting items due to both their
size and nature. The size of the movement on the fair value of the contracts is
dependent on the spot foreign exchange rate at the balance sheet date and an
assessment of future foreign exchange volatility applied to the relevant contract
currencies, as such the size of the movements can be substantial. The unrealised
foreign exchange contracts have been entered into in order to achieve an economic
hedge against future payments and receipts and are not a reflection of historical
performance.
Founder Share Plan (‘‘FSP’’) – IFRS 2 charge – in financial years H1 23, FY22 and H1
22
While there are no cost or cash implications for the Group, the Founder Share Plan
(FSP) falls within the scope of IFRS 2. The Group has included the IFRS 2 charge and
related deferred tax movement in relation to the FSP within adjusting items for the
prior periods.
The Directors consider the plan to be one-off in nature and unusual in that the share
awards are being funded exclusively by the Founders. While the charge is spread over a
few financial years, the plan is a one-time scheme. Accordingly, the IFRS 2 charge in
respect of the FSP is an adjusting item due to the size, nature and incidence of the
scheme. There are no known recent examples within quoted companies of incentive
arrangements operating in a similar way to the FSP. While unusual in terms of size,
the plan is also unusual regarding its treatment in what is essentially a personal
arrangement, with no net cost or cash and minimal administrative burden to the
Company. There are no other adjustments anticipated in respect of the scheme other
than the IFRS 2 charge.
Therefore, the Directors consider the charge to be significant in terms of its
potential influence on the readers’ interpretation of the Group’s financial
performance. The scheme ended in January 2022, with none of the vesting criteria met,
there is no expense in the 6 months to October 2022.
Adjusted operating profit/(loss) and margin
In the opinion of the Directors, adjusted operating profit and margin are measures
which seek to reflect the performance of the Group that will contribute to long-term
sustainable profitable growth. The Directors focus on the trends in adjusted operating
profit and margins, and they are key internal management metrics in assessing the
Group's performance. As such, they exclude the impact of adjusting items. Although the
Group is currently making an adjusted operating loss, adjusted operating profit and
margin remain key metrics monitored by management given the Group's intention to
return to profitability.
A reconciliation from operating profit/(loss), the most directly comparable IFRS
measure, to the adjusted operating profit/(loss) and margin is set out below.
H1 23 H1 22 FY 22
£m £m
£m
Reported revenue 287.2 277.2 609.6
Operating (loss)/profit (15.1) 7.5 25.9
Adjusting items 4.1 (6.8) 4.0
Adjusted operating (loss)/profit (11.0) 0.7 29.9
H1 23 H1 22 FY 22
Operating margin (5.3)% 2.7% 4.2%
Adjusted operating margin (3.8)% 0.3% 4.9%
Adjusted profit/(loss) before tax
In the opinion of the Directors, adjusted (loss)/profit before tax is a measure which
seeks to reflect the performance of the Group that will contribute to long-term
sustainable profitable growth. As such, adjusted (loss)/profit before tax excludes the
impact of adjusting items. The Directors consider this to be an important measure of
Group performance and is consistent with how the business performance is reported to
and assessed by the Board and the Executive Committee. In previous reporting periods
"Adjusted (loss)/profit before tax" was described as "Underlying (loss)/profit before
tax".
This is a measure used within the Group's incentive plans. Refer to the Remuneration
Report in the Group Annual Report FY22 for explanation of why this measure is used
within incentive plans.
A reconciliation from profit/(loss) before tax, the most directly comparable IFRS
measures, to the adjusted loss before tax is set out below.
H1 23 H1 22 FY 22
£m £m
£m
Loss/profit before tax (17.7) 4.0 17.9
Adjusting items 4.1 (6.8) 4.0
Adjusted (loss)/profit before tax (13.6) (2.8) 21.9
Adjusted tax expense and adjusted effective tax rate
In the opinion of the Directors, adjusted tax expense is the total tax charge for the
Group excluding the tax impact of adjusting items. Correspondingly, the adjusted
effective tax rate is the adjusted tax expense divided by the adjusted (loss)/profit
before tax. For interim reporting purposes, we categorise the prior year items and
specific other balances as discrete items, in the calculation of our adjusted
effective tax rate.
A reconciliation from tax expense, the most directly comparable IFRS measures, to the
adjusted tax expense is set out below:
H1 23 H1 22 FY 22
£m £m
£m
Adjusted (loss)/profit before tax (13.6) (2.8) 21.9
Tax credit/(expense) 5.5 (1.5) 4.8
Adjusting items – tax impact (1.0) 1.2 3.0
Adjusted tax credit/(expense) 4.5 (0.3) 7.8
Adjusted effective tax rate (33.1)% 10.7% 35.6%
Adjusted EPS
In the opinion of the Directors, adjusted earnings per share is calculated using basic
earnings, adjusted to exclude adjusting items net of current and deferred tax. See
note 16 for the Group's adjusted EPS.
Net cash/(debt)
In the opinion of the Directors, net cash/(debt) is a useful measure to monitor the
overall cash position of the Group. It is the total of all short- and long-term loans
and borrowings, less cash and cash equivalents. Net cash and cash equivalents is used
to define the net cash/(debt) position excluding short and long-term loans. See note
17 for the Group's net cash/(debt) position. This position is exclusive of financial
liabilities in relation to IFRS 16.
══════════════════════════════════════════════════════════════════════════════════════
ISIN: GB00B60BD277
Category Code: IR
TIDM: SDRY
LEI Code: 213800GAQMT2WL7BW361
OAM Categories: 1.2. Half yearly financial reports and audit
reports/limited reviews
Sequence No.: 218759
EQS News ID: 1544957
End of Announcement EQS News Service
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============Recent news on Superdry
See all newsREG - Official List Superdry PLC - Removal - Superdry PLC
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