TIDMBOO
RNS Number : 4874Z
boohoo group plc
16 May 2023
16 May 2023
The information contained within this announcement is deemed by
the company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014 as it forms part of the
domestic law of the United Kingdom by virtue of the European Union
(Withdrawal) Act 2018 (as amended) ("UK MAR"). Upon the publication
of this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public domain
.
boohoo group plc - results for the 12 months ended 28 February
2023
("boohoo" or "the Group")
Getting back to growth
-- Significant market share gains over the last 3 years, with sales +43%, and the UK +61%
-- Successful delivery of automation in Sheffield, driving
best-in-class operational performance and significant savings
-- Substantial progress made ahead of phased launch of US
distribution centre later this year, driving a step change in
customer proposition
-- Leaner, lighter, faster inventory position, with stock down 36% year on year
-- Strong cash generation with net GBP30.2 million Free Cash
Flow after GBP91.2 million of capital expenditure supporting growth
ambitions, and GBP330.9 million of liquidity headroom
-- Reinvesting margin improvements from supply chain deflation
into speed and price to reinforce test and repeat proposition
-- Medium term adjusted EBITDA margin expectation of 6% to 8%,
and getting back to double digit revenue growth through scale,
unlocking cost deflation, and overhead efficiencies
2023 2022 Change 2020 Change
GBP GBP million on 2022 GBP million on 2020(1)
million
Revenue 1,768.7 1,982.8 (11%) 1,234.9 43%
Gross profit 895.2 1,041.1 (14%) 666.3 34%
Gross margin 50.6% 52.5% (190bps) 54.0% (340bps)
Adjusted measures(3) :
Adjusted EBITDA(4) 63.3 125.1 (49%) 126.6 (50%)
% of revenue 3.6% 6.3% (270bps) 10.2% (660bps)
Adjusted EBIT(5) 6.9 84.1 (92%) 107.0 (94%)
% of revenue 0.4% 4.2% (380bps) 8.7% (830bps)
Adjusted profit before
tax(6) (1.6) 82.5 (102%) 108.3 (101%)
Adjusted diluted earnings
per share(7) (0.02)p 4.39p (100%) 5.88p (100%)
------------------------------ --------- ------------- --------- ------------- ------------
Statutory measures:
Profit/(loss) before tax (90.7) 7.8 (1263%) 92.2 (198%)
Diluted (loss)/earnings
per share (6.13)p (0.32)p (1816%) 5.35p (215%)
Net cash(2) at year-end 5.9 1.3 +4.6m 240.6 (234.7m)
------------------------------ --------- ------------- --------- ------------- ------------
John Lyttle, Group CEO, commented:
"Over the last three years, the Group has achieved significant
market share gains. Looking ahead, we are investing for the future
growth of this business with automation, local fulfilment capacity
in the US and building global brand awareness. We will deliver
sustainable returns on these investments. We will continue to give
our customers the latest trends, outstanding value and a great
experience. Our confidence in the medium-term prospects for the
group remain unchanged, and as we execute on our key priorities we
see a clear path to improved profitability and getting back to
double digit revenue growth. Our boohoo family has continued to
deliver for our customers and the business and I want to thank them
for all of their hard work and dedication."
Summary of FY23 performance
Twelve months ago, the Group set out a number of priorities to
focus on factors within its control, that would enable it to
rebound strongly as external conditions improved. We have seen
significant progress in areas that underpin our confidence in
getting back to growth:
-- Targeted reinvestment of supply chain savings into faster
methods of freight, driving improved lead times
-- Inventory has been tightly managed and reduced significantly,
down 36% year on year as at the end of February, with increased
emphasis on near(er)-shore sourcing which has helped manage supply
chain lead times and free cash flow
-- The Group went live with a major automation installation in
Sheffield in Q3, driving significant efficiencies and capacity
-- New wholesale partnerships launched with partners across
established markets such as the UK, Europe, the Middle East and
India
-- Substantial progress has been made with our US distribution
centre, which is set to open with a phased approach later this
year. This will transform delivery times to our US customers and
presents a material growth opportunity in the group's largest
international market
Financial highlights
-- Revenue GBP1.769 billion, down 11% vs last year, and up 43% on 2020
o UK revenues down 9% vs last year, and up 61% on 2020,
demonstrating significant market share gains over 3 years
o International revenues down 13% vs last year, and up 22% on
2020
-- Gross margin 50.6%, down 190bps vs last year, reflecting
Covid related cost pressures on raw materials and freight, and
stock clearance
-- Inventory has been reduced significantly, down 36% year on
year or GBP101m in absolute terms as at the end of February
-- Adjusted EBITDA of GBP63.3 million, down 49%, with Adjusted EBITDA margin of 3.6%
-- GBP91 million capital expenditure investment, building
infrastructure for future growth, including Sheffield automation
and US distribution centre
-- Strong cash generation with free cash flow of GBP30.2 million
as a result of significant inventory and working capital
improvements (2022: -GBP251.2 million), and balance sheet strength
maintained with GBP136.1 million of unencumbered freehold assets,
GBP5.9 million net cash and a GBP325 million Revolving Credit
Facility, giving GBP331 million of liquidity headroom
Operational & Sustainability highlights
-- 18 million active customers, up from 13 million since 2020
through organic growth and an increased brand portfolio, with a
target addressable market of up to 500 million potential customers
in our key markets
-- Developing a global infrastructure capable of supporting in
excess of GBP4 billion of net sales, with automation driving
significant efficiencies at our Sheffield warehouse, with an
international distribution centre in the US enhancing our customer
proposition
-- Significant progress made with the Debenhams digital
department store, with c.1,600 brands available on-site and a
successful relaunch for Debenhams beauty
-- Cost efficiency programme implemented, driving simplification
of organisational structure and warehouse network, delivering
material cost savings
-- Further progress on our sustainability strategy with
PrettyLittleThing marketplace, a clothing resale platform, launched
in August 2022, and implementation of industry leading Fast Forward
audit programme across all UK suppliers, setting industry leading
standards within our supply chain
Back to growth
Over the last three years, the Group has achieved significant
market share gains across its brand portfolio, particularly in the
UK where our price, product and proposition resonate strongly with
customers. We now have 18 million active customers with the
potential to reach 500 million globally across our key target
markets.
Our confidence in the medium-term outlook is unchanged, as we
continue to offer customers unrivalled choice in genuine fashion,
inclusive ranges and great value pricing, giving them even more
reasons to shop with us. For the year ahead, the priority and focus
for the Group is to get back to growth, and we have revisited our
key areas of strategic focus.
Customer First
Fashion and the customer are the lifeblood of our business. We
offer our customers unrivalled choice, with up to 4,000 new lines
added every week across our brand portfolio. As supply chain
inflation headwinds ease, we will reinvest some of these savings to
reinforce our value credentials. We deliver a great experience for
our customer and will continue to invest to improve customer
lifetime value through delivery of the latest trends, outstanding
value and a great experience.
Investing for Growth
The opportunity for growth is significant. Our test & repeat
model gives customers the latest fashion and great value, and our
supply chain helps us deliver short lead times. Best-in-class
logistics are being upgraded through extensive automation in our
Sheffield distribution centre, with the opening of a local
distribution centre in the US later in the year driving a step
change in our customer proposition in our second largest market.
Wholesale and marketplace offer a key opportunity in new markets,
and investments to expand our brands' reach to a global social
audience will build international awareness as we unlock the global
opportunity for the group.
Delivering sustainable ROI
Significant progress has been made on reducing overheads, with a
cost base that is now reflective of the current operating
environment and will be leveraged as growth returns. Inventory has
been managed tightly, declining by 36% year on year or over GBP100
million in absolute terms. In the year ahead, the group will be
investing in reducing inventory lead times as air capacity
increases, supporting a leaner, lighter, faster inventory model
that can very quickly put relevant fashion in front of our
customers and unlock additional working capital.
Over the medium term we are planning to rebuild profitability
back to a 6% to 8% adjusted EBITDA margin target and getting back
to double digit growth through: investing in our product, price and
proposition, unlocking input cost deflation, reducing returns,
delivering volume growth, leveraging our operating model and
delivering growth internationally through our wholesale and
marketplace proposition as well as retail.
Outlook and Guidance
The Group's focus for the year ahead is on rebuilding
profitability and getting back to growth. For the year ending 28
February 2024 ("FY24"), revenues are expected to be between flat
and a decline of 5% vs. the prior year, with increased emphasis on
driving profitable sales. In the first half, revenues are expected
to decline by 10% to 15% as a result of this action being taken. In
the second half of the year, the Group expects to return to revenue
growth as it benefits from the investments being made across price,
product and proposition under the Back to growth strategy.
Adjusted EBITDA for FY24 is expected to improve year on year as
a result of operational gains, cost efficiencies and cost deflation
in our supply chain, with adjusted EBITDA margins of 4% to 4.5%,
and adjusted EBITDA of between GBP69 million to GBP78 million, in
line with market expectations. For FY24, capital expenditure is
anticipated to be between GBP80 million to GBP90 million, and as a
result of the actions we have taken on capex, working capital and
costs, year-end net debt / adjusted EBITDA is expected to be
approximately 1x, reducing thereafter, with the Group maintaining
significant headroom on its long-dated GBP325 million Revolving
Credit Facility.
Over the medium term the group is targeting continued
improvements in profitability building towards a 6% to 8% adjusted
EBITDA margin and getting back to double digit revenue growth
through:
-- Unlocking cost deflation : deflation is being seen across
areas such as sea freight and raw materials like cotton, which is
being reinvested into product, pricing and lead time, with further
opportunities ahead
-- Reducing returns: we are taking steps to reduce returns
whilst not impacting our customer experience
-- Volume growth & cost control: volume benefits from our
Back to growth strategy are expected to drive operational leverage,
supporting margins, alongside tightly controlled costs
-- International growth: the Group will continue to selectively invest in order to unlock growth opportunities, such as its US distribution centre that will transform its proposition in a key growth market, and through 3(rd) party partnerships across key global markets.
Investor and analyst meeting
A meeting and video webcast for analysts & investors will be
held at 9am (UK time) today at the offices of boohoo, 10 Great
Pulteney Street, London, W1F 9NB. The webcast is available via the
following link:
https://stream.buchanan.uk.com/broadcast/640f1313376228f5a654cf77
A replay will subsequently be available the same day via the
same link. boohoo group plc's results are available at
www.boohooplc.com .
Notice of trading update
The Group's next update will be its half year results for the
six months ended 31 August 2023 in September / October 2023
Enquiries
boohoo group plc
Shaun McCabe, Chief Financial Officer Tel: +44 (0)161 233
2050
Alistair Davies, Investor Relations Tel: +44 (0)161 233
2050
Mark Mochalski, Investor Relations Tel: +44 (0)20 3239
6289
Clara Melia, Investor Relations Tel: +44 (0)20 3289
5520
Zeus Capital - Nominated adviser and joint
broker
Andrew Jones / Dan Bate / James Edis Tel: +44 (0)161 831
1512
Benjamin Robertson Tel: +44 (0)20 3829
5000
Jefferies - Joint broker
Ed Matthews / Harry Le May Tel: +44 (0)20 7029
8000
Buchanan - Financial PR adviser boohoo@buchanan.uk.com
Richard Oldworth / Toto Berger / Verity Parker Tel: +44 (0)20 7466
5000
Notes:
(1) Change on 2020, three years ago, compares current trading to
the pre-pandemic period to give a better understanding of
performance when compared to the unusual growth and characteristics
of trade in 2021.
(2) Net cash is cash less borrowings, excluding lease
liabilities.
(3) Adjusted items, which are not statutory measures, show the
underlying performance of the group excluding large, non-cash and
exceptional items.
(4) Adjusted EBITDA is calculated as profit before tax,
interest, depreciation, amortisation, share-based payment charges
and exceptional items.
(5) Adjusted EBIT is calculated as profit before tax, interest,
amortisation of acquired intangible assets, share-based payment
charges and exceptional items.
(6) Adjusted profit before tax is calculated as profit before
tax, excluding amortisation of acquired intangible assets,
share-based payment charges and exceptional items.
(7) Adjusted diluted earnings per share is calculated as diluted
earnings per share, adding back amortisation of acquired intangible
assets, share-based payment charges and exceptional items.
(8) CER designates Constant Exchange Rate translation of foreign
currency revenue, which gives a truer indication of the performance
in international markets by removing year-to-year exchange rate
movements when local currency sales are converted to sterling.
About boohoo group plc
"Leading the fashion eCommerce market"
Founded in Manchester in 2006, boohoo is an inclusive and
innovative global brand targeting young, value-orientated
customers, pushing boundaries to bring its customers up-to-date and
inspirational fashion, 24/7.
In 2017, the group extended its customer offering through the
acquisitions of the vibrant fashion brand PrettyLittleThing and
free-thinking brand Nasty Gal. In March 2019, the group acquired
the MissPap brand, in August 2019 the Karen Millen and Coast brands
and in June 2020 the Warehouse and Oasis brands, all complementary
to the group's scalable, multi-brand platform. In January 2021, the
group acquired the intellectual property assets of Debenhams, with
the goal of transforming a leading UK fashion and beauty retailer
into a digital department store and marketplace through a new
capital-light and low-risk operating model. In February 2021, the
group acquired the intellectual property assets of UK brands
Dorothy Perkins, Wallis and Burton. As at 28 February 2023, the
boohoo group had 18 million active customers across all its brands
around the world.
Cautionary Statement
Certain statements included or incorporated by reference within
this announcement may constitute "forward-looking statements" in
respect of the Group's operations, performance, prospects and/or
financial condition. Forward-looking statements are sometimes, but
not always, identified by their use of a date in the future or such
words and words of similar meaning as "aims", "anticipates",
"believes", "continues", "could", "due", "estimates", "expects",
"goal", "intends", "may", "objectives", "outlook", "plans",
"potential", "probably", "project", "seeks", "should", "targets",
or "will" or, in each case, their negative or other variations or
comparable terminology.
By their nature, forward-looking statements involve a number of
risks, uncertainties and assumptions and actual results or events
may differ materially from those expressed or implied by those
statements. Accordingly, no assurance can be given that any
particular expectation will be met and reliance should not be
placed on any forward-looking statement. Additionally,
forward-looking statements regarding past trends or activities
should not be taken as a representation that such trends or
activities will continue in the future. Except as required by
applicable law or regulation, no responsibility or obligation is
accepted to update or revise any forward-looking statement
resulting from new information, future events or otherwise. Nothing
in this announcement should be construed as a profit forecast.
This announcement does not constitute or form part of any offer
or invitation to sell, or any solicitation of any offer to purchase
any shares or other securities in the Company, nor shall it or any
part of it or the fact of its distribution form the basis of, or be
relied on in connection with, any contract or commitment or
investment decisions relating thereto, nor does it constitute a
recommendation regarding the shares or other securities of the
Company. Past performance cannot be relied upon as a guide to
future performance and persons needing advice should consult an
independent financial adviser authorised under the Financial
Services and Markets Act 2000 (as amended). Statements in this
announcement reflect the knowledge and information available at the
time of its preparation. Liability arising from anything in this
announcement shall be governed by English law. Nothing in this
announcement shall exclude any liability under applicable laws that
cannot be excluded in accordance with such laws.
Review of the business
Performance during the year
Overview
2023 2022 2023 change 2020 2023 change
on 2022 on 2020(1)
GBP GBP GBP million
million million
------------------------------ --------- --------- ------------ ------------ ------------
Revenue 1,768.7 1,982.8 (11%) 1,234.9 43%
Gross profit 895.2 1,041.1 (14%) 666.3 34%
Gross margin 50.6% 52.5% (190bps) 54.0% (340bps)
(Loss)/profit before tax (90.7) 7.8 (1263%) 92.2 (198%)
Diluted (loss)/earnings
per share (6.13)p (0.32)p (1816%) 5.35p (215%)
Net cash(2) at year-end 5.9 1.3 +4.6m 240.6 (234.7m)
------------------------------ --------- --------- ------------ ------------ ------------
Adjusted measures(3) :
Adjusted EBITDA(4) 63.3 125.1 (49%) 126.6 (50%)
% of revenue 3.6% 6.3% (270bps) 10.2% (660bps)
Adjusted EBIT(5) 6.9 84.1 (92%) 107.0 (94%)
% of revenue 0.4% 4.2% (380bps) 8.7% (830bps)
Adjusted profit/(loss)
before tax(6) (1.6) 82.5 (102%) 108.3 (101%)
Adjusted diluted earnings
per share(7) (0.02)p 4.39p (100%) 5.88p (100%)
------------------------------ --------- --------- ------------ ------------ ------------
Notes:
(1) Change on 2020, three years ago, compares current trading to
the pre-pandemic period to give a better understanding of
performance when compared to the unusual growth and characteristics
of trade in 2020.
(2) Net cash is cash less borrowings, excluding lease
liabilities.
(3) Adjusted items, which are not statutory measures, show the
underlying performance of the group excluding large, non-cash and
exceptional items (note 1).
(4) Adjusted EBITDA is calculated as profit before tax,
interest, depreciation, amortisation, share-based payment charges
and exceptional items.
(5) Adjusted EBIT is calculated as profit before tax, interest,
amortisation of acquired intangible assets, share-based payment
charges and exceptional items.
(6) Adjusted profit before tax is calculated as profit before
tax, excluding amortisation of acquired intangible assets,
share-based payment charges and exceptional items.
(7) Adjusted diluted earnings per share is calculated as diluted
earnings per share, adding back amortisation of acquired intangible
assets, share-based payment charges and exceptional items.
Group overview
Group revenue for the year declined by 11% (13% Constant
Exchange Rate = "CER") to GBP1.769 billion from GBP1.983 billion in
2022 reflecting the impact of the macro-economic and consumer
backdrop. UK revenues declined 9%, softening through the second
half of the year as inflation increased and consumer demand was
impacted by cost-of-living pressures. International revenues
declined 13%, with extended delivery times continuing to impact our
customer proposition. Gross sales before returns were flat;
however, return rates climbed above pre-pandemic levels following
the exceptionally low levels seen during the pandemic and in the
early half of the previous year, which impacted net sales
growth.
Adjusted EBITDA was GBP63.3 million (2022: GBP125.1 million;
2020: GBP126.6 million), a decrease of 49% on the previous year and
a decrease of 50% on 2020. Gross profit margin was 50.6%, down
190bps on the prior year (2022: 52.5%) and down 340bps compared to
2020 (54.0%). Adjusted EBITDA margin was 3.6% (2022: 6.3%; 2020:
10.2%).
Profitability has been impacted by the fall in sales, freight
and logistics inflation related to the pandemic, and labour and
energy cost inflation. In addition, ongoing strategic investments
have continued across the platform from which the group will
benefit over the medium term, most notably the US Distribution
Centre. Loss before tax was GBP90.7 million (2022: GBP7.8 million
profit; 2020: GBP92.2 million profit). Loss per share was 6.13p
(2022: 0.32p loss; 2020: 5.35p diluted earnings). Adjusted diluted
loss per share was 0.02p (2022: 4.39p earnings; 2020: 5.88p
earnings).
Inefficiencies in acquired brands were addressed as part of the
cost-reduction programme, but operated for much of the year with
higher overheads as a percentage of revenue. Central overheads
increased as a percentage of net sales due to the decline in net
sales year on year, but the group did see an improvement in cost
ratios in the second half of the year with the initial impacts of
the cost-reduction programme. Distribution costs declined year on
year because of lower volumes, but also cost efficiencies following
the closure of a UK warehousing facility and the successful go-live
of our automation project at our Sheffield distribution centre,
which drove significant efficiencies in the second half of the
financial year.
During the year, the group incurred significant, non-recurring
costs, which are shown as exceptional items in the financial
statements and have not been included in the adjusted performance
measures. These items relate to:
-- costs associated with the installation of the automation in the Sheffield facility;
-- restructuring costs and impairment of assets associated with
the closure of a UK warehousing facility and at loss-making
operations;
-- set-up costs associated with the opening of a warehousing facility in the USA;
-- discontinuation of cash flow hedge contracts made ineffective
due to cost profile of the warehousing facility in the USA; and
-- redundancy costs.
These exceptional items amounted to GBP44.9 million and are
detailed in note 1 of the financial statements. Additional
exceptional costs associated with the opening of the warehousing
facility in the USA will be incurred in the next financial
year.
While the last twelve months have been challenging, over the
last three years, the group has made tremendous progress towards
achieving its long-term growth ambitions. Since FY2020, the group
has:
-- grown significantly with total revenue +43%, (UK: +61%,
International: +22%), during a period in which clothing sales in
key markets remain broadly flat;
-- increased in its largest market, the UK, its share of spend
online from 6.2% to 6.9%, with price, product and proposition
resonating strongly with consumers;
-- increased its active customer base to 18 million active
customers, up from 13 million, through organic growth and an
increased brand portfolio;
-- extended target addressable market through acquisitions, with
up to 500 million potential customers in key global markets;
-- built infrastructure capable of supporting more than GBP4
billion of net sales, with automation driving efficiencies and an
international distribution centre enhancing our proposition
-- developed numerous growth opportunities through its
direct-to-consumer proposition, Debenhams and other routes to
market, including strategic partnerships with select partners
globally; and
-- made progress on its sustainability strategy, including
launching PrettyLittleThing marketplace, a clothing resale
platform.
Key Performance Indicators
Active customer numbers in the last 12 months decreased by 10%
to 18.0 million, reflecting the switch back to offline following
the pandemic. Despite this, they have increased 29% over the last
three years, with organic growth from our brands and the extension
of our target addressable market through brand acquisitions.
Average order frequency decreased marginally from 3.14 to 3.08
times p.a. Average order value increased by 11% to GBP53.32, while
the number of items per basket decreased from 3.04 to 2.82, driven
partly by the addition of the newer brands with lower basket sizes
as well as changes in customer behaviour.
Cash and Working Capital Management
Cash generation improved because of tighter working capital
management, particularly in relation to inventory. Operating cash
flow was GBP130.9 million (2022: GBP10.3 million; 2020: GBP127.3
million). Inventory has been reduced significantly, down GBP101
million/36% year on year, as at the end of February.
Capital expenditure of GBP91.2 million included a substantial
investment in property and distribution centres of GBP46.8 million,
mainly around Sheffield automation . In addition, the group
acquired 26.47% of the issued share capital of Revolution Beauty
Group plc ("REVB") for GBP15.0m. Net cash flow increased by
GBP229.6 million (2022: GBP174.7 million decrease; 2020: GBP47.6
million increase). The net cash balance at the year end increased
to GBP5.9 million (2022: GBP1.3 million; 2020: GBP240.6 million),
with total liquidity of GBP330.9 million.
During the year, the group secured a new GBP325 million rolling
capital facility, increasing from the previous GBP100 million
facility to facilitate our next growth phase .
The Group will continue to make selective investments to support
its platform and brands, in line with its internal investment
criteria and in a manner that reflects the current macro-economic
environment.
Performance by market
UK
The UK market continues to be the largest for the group,
accounting for 62% of revenue (2022: 61%). Revenue was GBP1,091.5
million declining by 9% on 2022, although the pre-pandemic
three-year growth remains robust at 61%. Return rates have
increased above pre-pandemic levels. This is attributable to the
change in the product mix post-pandemic (casual items to occasion
wear) and to the introduction of the newer, higher-price point
brands, which all have higher return rates - as well as macro
consumer trends. In response to those consumer trends, during the
year, chargeable returns for non-Premier/Royalty customers were
introduced, which more closely align the UK market with other
territories.
Gross margin reduced from 49.4% to 47.9% due to substantial
increases in inbound shipping rates and product cost inflation.
Prices were raised across some product lines to help offset
increased costs; we were unable to change sourcing to alternative
geographic regions to reduce the impact of these cost increases,
but looked to ensure our offer remained competitive to consumers
facing high inflation and other cost-of-living challenges.
We are encouraged by the sales performance of our more recently
acquired brands and continued progression made by our Debenhams
digital department store, as well as the significant gains in
market share achieved across our brand portfolio over the last
three years.
USA
Performance in the USA has been below expectations, with revenue
declining 19% on the prior year, although revenue growth over the
three-year period is strong at 38%. Delivery times to the USA are
still elevated compared to pre-pandemic levels, and this is,
undoubtedly, impacting demand, although the situation is improving
slowly with growth returning in the final two months of the year.
Return rates have increased above pre-pandemic levels. Gross margin
is high, although lower than the prior year, reducing from 61.5% to
58.0%.
Distribution costs have remained high due to the ongoing
elevated airfreight costs and remain materially above pre-pandemic
levels. The opening of our US warehouse in 2023/2024 will help to
alleviate these going forward.
Rest of Europe
Our revenue in the rest of Europe decreased by 6% over 2022,
although it increased by 10% compared to 2020, compared to a
broader market, which continues to be broadly flat versus
pre-pandemic levels. Return rates have increased above pre-pandemic
levels. Encouragingly, our more recently acquired brands are making
strong progress, albeit from a low base. Gross margin declined from
54.5% to 52.0% with profitability continuing to be impacted by
elevated freight costs and high distribution costs.
Rest of world
Revenue in the rest of the world has decreased by 2% on the
prior year to GBP107.0 million (increased by 3% on 2020). We have
seen successful growth of marketplace and wholesale sales to our
partners in the Middle East. In addition, markets such as Australia
are starting to see improvements from reduced delivery times. Gross
margin declined from 52.5% to 50.7% with profitability continuing
to be impacted by elevated freight costs and high distribution
costs.
Financial review
Revenue by geographical market
2023 2022 2023 change on 2023 change on 2020 2023 change on
2022 2022 2020
GBP million GBP million CER GBP million
---------------- ------------ ------------ ------------------ ------------------ ------------ ------------------
UK 1,091.5 1,202.8 (9%) (9%) 679.4 61%
Rest of Europe 206.5 219.2 (6%) (8%) 188.4 10%
USA 363.7 451.6 (19%) (24%) 263.6 38%
Rest of World 107.0 109.2 (2%) (8%) 103.5 3%
---------------- ------------ ------------ ------------------ ------------------ ------------ ------------------
1,768.7 1,982.8 (11%) (13%) 1,234.9 43%
================ ============ ============ ================== ================== ============ ==================
KPIs
2023 2022 2023 2020 2023
change on change on 2020
2022
Active customers(1) 18.0 million 19.9 million (10%) 13.9 million 29%
Number of orders 55.5 million 62.4 million (11%) 42.2 million 32%
Order frequency(2) 3.08 3.14 (2)% 3.04 1%
Conversion rate to sale (3) 3.74% 3.56% (5) 5% 4.26% (12%)
Average order value(4) GBP53.32 GBP48.16 11% GBP43.50 23%
Number of items per basket 2.82 3.04 (7%) 3.06 (8%)
----------------------------- ------------- ------------- ----------- ------------- ----------------
(1) Defined as having shopped in the last 12 months on the
website and app, including marketplace.
(2) Defined as number of website and app orders in last 12
months divided by number of active customers.
(3) Defined as the percentage of website and app orders taken to
internet sessions.
(4) Calculated as gross sales including sales tax divided by the
number of orders.
(5) FY22 conversion rate to sale restated due to improved data
gathering
Consolidated income statement
2023 2022 2023 change on 2022 2020 2023 change on 2020
GBP million GBP million GBP million
---------------------- ---------------------- ------------ -------------------- ------------ --------------------
Revenue 1,768.7 1,982.8 (11%) 1,234.9 43%
Cost of sales (873.5) (941.7) (7%) (568.6) 54%
---------------------- ---------------------- ------------ -------------------- ------------ --------------------
Gross profit 895.2 1,041.1 (14%) 666.3 34%
Gross margin 50.6% 52.5% (190bps) 54.0% (340bps)
Operating costs (832.1) (916.1) (539.9)
Other income 0.2 0.1 0.2
Adjusted EBITDA 63.3 125.1 (49%) 126.6 (50%)
Adjusted EBITDA
margin % 3.6% 6.3% (270bps) 10.2% (660bps)
Depreciation (39.5) (32.0) (16.6)
Amortisation of other
intangible assets (16.9) (9.0) (3.0)
Adjusted EBIT 6.9 84.1 (92%) 107.0 (94%)
Adjusted EBIT margin
% 0.4% 4.2% (380bps) 8.7% (830bps)
Adjusting items:
Amortisation of
acquired intangible
assets (12.2) (12.8) (5.1)
Equity-settled
share-based payment
charges (32.0) (26.1) (11.0)
Exceptional items and
impairment (44.9) (35.8) -
Operating
(loss)/profit (82.2) 9.4 (974%) 90.9 (190%)
Finance income 3.5 - 1.7
Finance expense (12.0) (1.6) (0.4)
---------------------- ---------------------- ------------ -------------------- ------------ --------------------
(Loss)/profit before
tax (90.7) 7.8 (1263%) 92.2 (198%)
Tax 15.1 (11.8) (19.3)
---------------------- ---------------------- ------------ -------------------- ------------ --------------------
(Loss)/profit after
tax for the year (75.6) (4.0) (1790%) 72.9 (204%)
====================== ====================== ============ ==================== ============ ====================
(Loss)/diluted
earnings per share (6.13)p (0.32)p (1816%) 5.35p (215%)
Adjusted
profit/(loss) after
tax for the year (0.2) 56.3 (100%) 86.0 (100%)
Amortisation of
acquired intangible
assets (12.2) (12.8) (5.1)
Share-based payment
charges (32.0) (26.1) (11.0)
Exceptional items and
impairment (44.9) (35.8) -
Adjustment for tax 13.7 14.4 3.0
---------------------- ---------------------- ------------ -------------------- ------------ --------------------
(Loss)/profit after
tax for the year (75.6) (4.0) 72.9
---------------------- ---------------------- ------------ -------------------- ------------ --------------------
Adjusted diluted
(loss)/earnings per
share (0.02)p 4.39p (100%) 5.88p (100%)
---------------------- ---------------------- ------------ -------------------- ------------ --------------------
Group revenue for the year declined by 11% (13% CER) when
compared to the previous year at GBP1,768.7 million (2022:
GBP1,982.8 million, 2020: GBP1,234.9 million) and has increased by
43% on three years ago, pre-pandemic. The comparison with three
years ago demonstrates the growth of the business, excluding the
exceptional growth and low returns during the pandemic periods.
Gross sales before returns were flat year on year; however, with
returns higher than in the pandemic period, net revenues
declined.
Operating costs, comprising distribution costs and
administrative expenses, excluding depreciation and amortisation,
have increased by 80bps to 47.0% of revenue, due to the operational
deleverage from a decline in net sales year on year, coupled with
inflationary cost pressures as a result of the macro-economic
backdrop. Marketing and distribution costs have declined as a % of
revenue year on year with tighter brand spend and the successful
go-live of automation in our Sheffield distribution centre in the
second half of the financial year.
Adjusted EBITDA, which is not a statutory measure, represents
earnings before interest, tax, depreciation, amortisation, non-cash
share-based payments charges and exceptional items. It provides a
useful measure of the underlying profitability of the business.
Adjusted EBITDA decreased by 49% from GBP125.1 million to GBP63.3
million and, as a percentage of revenue, decreased from 6.3.0% to
3.6%.
Adjusted profit after tax, as with Adjusted EBITDA, provides
another more consistent measure of the underlying profitability of
the business by removing non-cash amortisation of intangible assets
relating to the acquisition of new brands (being their trademarks
and customer lists), share-based payment charges and exceptional
items.
The group recognised a total expense of GBP32.0 million during
the year (2022: GBP26.1 million) relating to equity-settled
share-based payment transactions. During the year, the 2019 Growth
Share Plan (introduced for the CEO in 2019) and the 2020 Management
Incentive Plan (introduced in 2020) were cancelled. The charge for
the year and the remaining expense on these schemes totalling
GBP15.8m has, therefore, been recognised in these financial
statements in accordance with IFRS 2.
Exceptional items amounted to GBP44.9 million and are shown in
more detail in note 1 of the financial statements.
A tax credit of GBP15.1m has been recognised, which represents
an effective rate of tax for the year of 16.6% (2022: 151.3%). This
is lower than the tax credit calculated when multiplying the loss
before tax at the blended UK statutory rate of tax for the year of
19.0% (2022: 19.0%), due to the revaluation of deferred tax
liabilities in line with the increase in corporation tax rates to
25%, expenditure not deductible for tax purposes, being principally
depreciation on buildings and fit-out, disallowable legal claims
and share-based payment charges on growth shares.
Consolidated statement of financial position
2023 2022 2020
GBP million GBP million GBP million
--------------------------------------- ------------ ------------ ------------
Intangible assets 131.5 128.5 42.3
Property, plant and equipment 371.6 349.2 119.2
Right-of-use assets 136.4 49.7 14.6
Financial assets 15.6 2.8 4.5
Deferred tax asset 23.5 7.5 6.0
---------------------------------------- ------------ ------------ ------------
Non-current assets 678.6 537.7 186.6
Working capital (104.9) (12.7) (63.9)
Lease liabilities (138.6) (51.9) (16.2)
Net financial assets/(liabilities) (16.8) 7.4 (9.0)
Cash and cash equivalents 330.9 101.3 245.4
Interest-bearing loans and borrowings (325.0) (100.0) (4.8)
Deferred tax liability (24.2) (25.3) (3.6)
Net current tax asset/(liability) - 7.8 (6.6)
Net assets 400.0 464.3 327.9
======================================== ============ ============ ============
There has been a substantial investment in property and
distribution centres to facilitate our next phase of growth, funded
out of cash resources and partly from the GBP325m revolving credit
facility (which is fully drawn). Balance sheet strength is
maintained with GBP136.1 million of unencumbered freehold assets.
Working capital has improved primarily due to tighter inventory
levels, with inventory declining 36% year on year at the end of
February 2023.
During the year, 26.47% of the issued share capital of
Revolution Beauty Group plc ("REVB") was obtained for consideration
of GBP15.0m, with the investment building upon the existing
relationship between boohoo and REVB, under which REVB products are
sold through several of the group's D2C brand websites and its
online digital department store, Debenhams. On 1 September 2022,
REVB was temporarily suspended from trading on the Alternative
Investment Market pending publication of the company's annual
audited accounts. As at 28 February 2023, REVB shares remain
suspended from trading, with the investment held at cost on the
Group's balance sheet due to the lack of an active market,
currently, as well as the very short time for which the investment
has been held at the balance sheet date.
Intangible and fixed asset additions
2023 2022 2020
GBP million GBP million GBP million
--------------------------------------------------- ------------ ------------ ------------
Purchased intangible and fixed assets
Intangible assets
Trademarks and customer lists - - 19.4
Software and licenses 32.1 32.0 3.8
---------------------------------------------------- ------------ ------------ ------------
32.1 32.0 23.2
Tangible fixed assets
Distribution centres 46.8 120.3 15.4
Offices, office equipment, fixtures and fit-outs 12.3 109.0 6.6
Motor vehicles - 0.2 0.4
---------------------------------------------------- ------------ ------------ ------------
59.1 229.5 22.4
Total intangible and fixed asset additions 91.2 261.5 45.6
==================================================== ============ ============ ============
Liquidity and financial resources
Operating cash flow was GBP130.9 million compared to GBP10.3
million in the previous year and free cash inflow after tax was
GBP30.2 million compared to an outflow of GBP251.2 million in the
previous financial year. Capital expenditure and intangible asset
purchases were GBP91.2 million, which includes a GBP46.8 million
investment in our distribution centres to support future growth.
The closing cash balance for the group was GBP330.9 million and the
net cash balance GBP5.9 million.
Consolidated cash flow statement
2023 2022 2020
GBP million GBP million GBP million
---------------------------------------------------- ------------ ------------ ------------
(Loss)/profit after tax for the year (75.6) (4.0) 72.9
Share-based payments charge 32.0 26.1 11.0
Depreciation charges and amortisation 68.6 53.8 24.7
Impairment charges 27.7 - -
Finance income (3.5) - (1.7)
Finance expense 12.0 1.6 0.4
Loss on sale of fixed assets - - 0.2
Tax (credit)/expense (15.1) 11.8 19.3
Decrease/(increase) in inventories 101.3 (134.5) (32.3)
Decrease/(increase) in trade and other receivables 19.4 (17.7) (9.4)
Increase/(decrease) in trade and other payables (35.9) 73.2 42.2
---------------------------------------------------- ------------ ------------ ------------
Operating cash inflow 130.9 10.3 127.3
Capital expenditure and intangible asset purchases (91.2) (261.5) (26.2)
Acquisition of new brands - - (19.4)
Investments in equity instruments (15.3) - -
Tax repaid/(paid) 5.8 - (11.6)
Free cash in/(out)flow after tax 30.2 (251.2) 70.1
Net proceeds from the issue of ordinary shares 0.2 6.8 2.7
Purchase of own shares by EBT (7.4) (19.2) (14.9)
Proceeds from the sale of fixed assets 0.5 - -
Finance income received 2.7 - 1.8
Finance expense paid (9.6) (0.9) (0.3)
Dividend paid to non-controlling interests - - (3.4)
Lease payments (12.0) (10.2) (6.0)
Increase in/(repayment) of borrowings 225.0 100.0 (2.4)
Net cash in/(out)flow 229.6 (174.7) 47.6
Cash and cash equivalents at beginning of year 101.3 276.0 197.8
---------------------------------------------------- ------------ ------------ ------------
Cash and cash equivalents at end of year 330.9 101.3 245.4
==================================================== ============ ============ ============
Trends and factors likely to affect future performance
The global market for online fashion is forecast to continue to
grow, which provides a favourable backdrop for the group. Customers
throughout the world are seeking a wide choice of quality,
fashion-forward products at value prices, with the convenience of
home delivery. The group's target market has a high propensity to
spend on fashion and the market has proven to be quite resilient to
external macroeconomic factors.
The pandemic has impacted our business and is most significantly
seen in the unpredictability of customer demand, the rate of
customer returns, the increase in shipping times and the cost of
shipping on both inbound and outbound products. Some of these
factors, such as the rate of customer returns, have already
reverted from the low rates during the pandemic to rates seen
before the pandemic. Previous cost increases in relation to inbound
freight have moved back towards pre-pandemic levels, with supply
chains speeding up, allowing for the group to look to reinforce its
USPs and value credentials for its fashion-conscious customers,
globally.
Consolidated statement of comprehensive income
for the year ended 28 February 2023
Note 2023 2023 2023 total(2) 2022 2022 2022 total(2)
pre-exceptional exceptional pre-exceptional exceptional
items items(1) items items(1)
GBP million GBP million GBP million GBP million GBP million GBP million
--------------- -------- --------------- ------------ ------------- --------------- ------------- -------------
Revenue 2 1,768.7 - 1,768.7 1,982.8 - 1,982.8
Cost of sales (873.5) - (873.5) (941.7) - (941.7)
--------------- -------- --------------- ------------ ------------- --------------- ------------- -------------
Gross profit 895.2 - 895.2 1,041.1 - 1,041.1
Distribution
costs (427.9) (20.0) (447.9) (488.1) (28.4) (516.5)
Administrative
expenses (504.8) (24.9) (529.7) (507.9) (7.4) (515.3)
--------------- -------- --------------- ------------ ------------- --------------- ------------- -------------
Amortisation of acquired
intangibles (12.2) - (12.2) (12.8) - (12.8)
Other administrative
expenses (492.6) (24.9) (517.5) (495.1) (7.4) (502.5)
------------------------- --------------- ------------ ------------- --------------- ------------- -------------
Other income 3 0.2 - 0.2 0.1 - 0.1
--------------- -------- --------------- ------------ ------------- --------------- ------------- -------------
Operating
(loss)/profit (37.3) (44.9) (82.2) 45.2 (35.8) 9.4
Finance income 4 3.5 - 3.5 - - -
Finance expense (12.0) - (12.0) (1.6) - (1.6)
--------------- -------- --------------- ------------ ------------- --------------- ------------- -------------
(Loss)/profit
before tax 6 (45.8) (44.9) (90.7) 43.6 (35.8) 7.8
Taxation 10 6.6 8.5 15.1 (18.6) 6.8 (11.8)
(Loss)/profit
for the year (39.2) (36.4) (75.6) 25.0 (29.0) (4.0)
=============== ======== =============== ============ ============= =============== ============= =============
Total other comprehensive (loss)/income for the year
Items that may be reclassified to profit
or loss:
Loss/(gain) reclassified
to profit and loss
during the year 16.2 - 16.2 (14.8) - (14.8)
Fair value (loss)/gain on
cash flow hedges during
the year(3) (28.7) - (28.7) (0.7) - (0.7)
Income tax relating to
these items 2.4 - 2.4 2.9 - 2.9
------------------------- --------------- ------------ ------------- --------------- ------------- -------------
Total other comprehensive
loss for the year (10.1) - (10.1) (12.6) - (12.6)
------------------------- --------------- ------------ ------------- --------------- ------------- -------------
Total comprehensive
(loss)/income for the
year (49.3) (36.4) (85.7) 12.4 (29.0) (16.6)
========================= =============== ============ ============= =============== ============= =============
Loss per share 7
Basic (6.13)p (0.32)p
Diluted (6.13)p (0.32)p
--------------- -------- --------------- ------------ ------------- --------------- ------------- -------------
1. See Note 1, exceptional items
2. 2023 and 2022 total is the IFRS-compliant measure for the
consolidated statement of comprehensive income
3. Net fair value gains on cash flow hedges will be reclassified
to profit or loss during the three years to 28 February 2026.
Consolidated statement of financial position
at 28 February 2023
Note 2023 2022
GBP million GBP million
-------------------------------------- ---- ----------- -----------
Assets
Non-current assets
Intangible assets 11 131.5 128.5
Property, plant and equipment 12 371.6 349.2
Right-of-use assets 13 136.4 49.7
Financial assets 25 0.3 2.8
Financial assets - equity investments 25 15.3 -
Deferred tax 14 23.5 7.5
-------------------------------------- ---- ----------- -----------
678.6 537.7
Current assets
Inventories 15 178.1 279.4
Trade and other receivables 16 37.0 58.0
Financial assets 25 1.1 14.2
Current tax asset - 7.8
Cash and cash equivalents 17 330.9 101.3
Total current assets 547.1 460.7
Total assets 1,225.7 998.4
Liabilities
Current liabilities
Trade and other payables 18 (260.3) (296.6)
Provisions 19 (49.7) (53.5)
Interest-bearing loans and borrowings 20 - (100.0)
Lease liabilities 21 (12.1) (7.9)
Financial liabilities 25 (15.7) (3.7)
Total current liabilities (337.8) (461.7)
Non-current liabilities
Provisions 19 (10.0) -
Interest-bearing loans and borrowings 20 (325.0) -
Lease liabilities 21 (126.5) (44.0)
Financial liabilities 25 (2.2) (3.1)
Deferred tax 14 (24.2) (25.3)
Total liabilities (825.7) (534.1)
Net assets 400.0 464.3
====================================== ==== =========== ===========
Equity
Share capital 22 12.7 12.7
Shares to be issued 23 31.9 31.9
Share premium 916.8 922.8
Hedging reserve (2.3) 10.2
EBT reserve (76.8) (75.6)
Other reserves 24 (796.5) (795.5)
Retained earnings 314.2 357.8
-------------------------------------- ---- ----------- -----------
Total equity 400.0 464.3
====================================== ==== =========== ===========
Consolidated statement of changes in equity
Share Shares Share Hedging EBT Other Retained Total
capital to be premium reserve reserve reserves earnings equity
issued
GBP GBP million GBP million GBP GBP million GBP GBP GBP million
million million million million
Balance at 28
February 2021 12.6 31.9 916.2 25.7 (56.5) (795.2) 337.8 472.5
Loss for the year - - - - - - (4.0) (4.0)
Other
comprehensive
income/(expense):
Gain reclassified
to profit or loss
in revenue - - - (14.8) - - - (14.8)
Fair value loss on
cash flow hedges
during the year - - - (0.7) - - - (0.7)
------------------ ---------- ----------- ----------- ---------- ----------- ---------- ---------- -----------
Total
comprehensive
income for the
year - - - (15.5) - - (4.0) (19.5)
Issue of shares 0.1 - 6.6 - (19.1) - - (12.4)
Share-based
payments credit - - - - - - 26.1 26.1
Excess taxation on
share-based
payments - - - - - - (2.1) (2.1)
Translation of
foreign
operations - - - - - (0.3) - (0.3)
Balance at 28
February 2022 12.7 31.9 922.8 10.2 (75.6) (795.5) 357.8 464.3
------------------ ---------- ----------- ----------- ---------- ----------- ---------- ---------- -----------
Loss for the year - - - - - - (75.6) (75.6)
Other - - - - - - - -
comprehensive
income/(expense):
Loss reclassified
to profit or loss
in exceptional
items (note 1) - - - 14.3 - - - 14.3
Loss reclassified
to profit or loss
in revenue - - - 1.9 - - - 1.9
Fair value loss on
cash flow hedges
during the year - - - (28.7) - - - (28.7)
------------------ ---------- ----------- ----------- ---------- ----------- ---------- ---------- -----------
Total
comprehensive
income for the
year - - - (12.5) - - (75.6) (88.1)
Issue of shares - - (6.0) - (1.2) - - (7.2)
Share-based
payments credit - - - - - - 32.0 32.0
Translation of
foreign
operations - - - - - (1.0) - (1.0)
------------------ ---------- ----------- ----------- ---------- ----------- ---------- ---------- -----------
Balance at 28
February 2023 12.7 31.9 916.8 (2.3) (76.8) (796.5) 314.2 400.0
================== ========== =========== =========== ========== =========== ========== ========== ===========
Consolidated cash flow statement
for the year ended 28 February 2023
Note 2023 2022
GBP million GBP million
--------------------------------------------- ---- ----------- -----------
Cash flows from operating activities
Loss for the year (75.6) (4.0)
Adjustments for:
Share-based payments charge 32.0 26.1
Depreciation charges and amortisation 68.6 53.8
Impairment of property, plant and equipment 9.8 -
Impairment of right-of-use assets 3.6 -
Impairment of financial assets 14.3 -
Finance income (3.5) -
Finance expense 12.0 1.6
Tax (credit)/expense (15.1) 11.8
--------------------------------------------- ---- ----------- -----------
46.1 89.3
Decrease/(increase) in inventories 15 101.3 (134.5)
Decrease/(increase) in trade and other
receivables 16 19.4 (17.7)
(Decrease)/increase in trade and other
payables 18 (35.9) 73.2
Cash generated from operations 130.9 10.3
Tax repaid/(paid) 5 .8 -
Net cash generated from operating activities 136.7 10.3
Cash flows from investing activities
Acquisition of intangible assets 11 (32.1) (32.0)
Acquisition of property, plant and equipment 12 (59.1) (229.5)
Proceeds from the sale of property, plant
and equipment 12 0.5 -
Acquisition of financial assets - equity
investments 25 (15.3) -
Finance income received 2.7 -
Net cash used in investing activities (103.3) (261.5)
Cash flows from financing activities
Proceeds from the issue of ordinary shares 0.2 6.8
Purchase of own shares by EBT (7.4) (19.2)
Finance expense paid (9.6) (0.9)
Lease payments (12.0) (10.2)
Increase in borrowings 20 225.0 100.0
Net cash generated from financing activities 196.2 76.5
Increase/(decrease) in cash and cash
equivalents 229.6 (174.7)
Cash and cash equivalents at beginning
of year 101.3 276.0
--------------------------------------------- ---- ----------- -----------
Cash and cash equivalents at end of year 330.9 101.3
============================================= ==== =========== ===========
Notes to the financial statements
(forming part of the financial statements)
1 Accounting policies
General information
The boohoo group plc operates as a multi-brand online retailer,
based in the UK and is a public limited company incorporated and
domiciled in Jersey and listed on the Alternative Investment Market
(AIM) of the London Stock Exchange. Its registered office address
is 12 Castle Street, St Helier, Jersey, JE2 3RT. The company was
incorporated on 19 November 2013.
Basis of preparation
The consolidated financial statements of the group have been
approved by the directors and prepared on a going concern basis in
accordance with UK-adopted international accounting standards and
the Companies (Jersey) Law 1991.
The financial statements have been approved on the assumption
that the group and company remain a going concern. The group has
cash resources and credit facilities sufficient to continue solvent
trading in the face of an unforeseen downturn in demand.
New and amended statements adopted by the group
The following new standards and amendments to standards have
been adopted by the group for the first time during the year
commencing 1 March 2022.
-- Amendments to IFRS 3: Business Combinations
-- Amendments to IAS 16: Property, Plant and Equipment
-- Amendments to IAS 37: Provisions, Contingent Liabilities and Contingent Assets.
Standards, amendments and interpretations to existing standards
that are not yet effective and have not been early adopted by the
group.
The following standards have been published for accounting
periods beginning after 1 March 2023 but have not been adopted by
the UK and have not been early adopted by the group and could have
an impact on the group financial statements.
-- Amendments to IAS1: Presentation of Financial Statements
-- Amendments to IAS 8: Accounting policies, Changes in Accounting Estimates and Errors
-- Amendments to IAS 12: Income Taxes - Deferred Tax related to
Assets and Liabilities arising from a Single Transaction.
Measurement convention
The consolidated financial statements have been prepared under
the historical cost convention, excluding financial assets and
financial liabilities (including derivative instruments) held at
either fair value through profit or loss or fair value through
other comprehensive income and excluding assets and liabilities
acquired through acquisitions and held at fair value. The principal
accounting policies adopted in the preparation of these financial
statements are set out below. These policies have been consistently
applied to all the years presented, unless otherwise stated.
Exceptional items
The group exercise judgement in assessing whether items should
be classified as exceptional. This assessment covers the nature of
the item, cause of occurrence and scale of impact of that item on
the reported performance. The exceptional costs in these financial
statements include: additional disruption costs associated with the
installation of the automation in the Sheffield facility,
restructuring costs and impairment of assets associated with the
closure of a UK warehousing facility and at loss-making operations,
set up costs associated with the opening of a warehousing facility
in the USA, the reclassification to profit or loss of discontinued
cash flow hedge contracts which has arisen due to the acceleration
of the opening of the warehousing facility in the USA, and
redundancy costs. Additional exceptional costs associated with the
opening of the warehousing facility in the USA are expected to be
incurred in the next financial year.
Exceptional costs and impairment of assets 2023 2022
GBP million GBP million
-------------
Selling and distribution costs
Sheffield automation disruption costs 8.3 10.6
Impairment of UK warehouse property, plant and equipment 3.3 -
Impairment of UK warehouse right-of-use asset 3.6 -
UK warehouse restructuring and dual operating costs 2.4 9.4
USA warehouse set up costs 2.4 -
Irrecoverable EU sales tax on returns pre IOSS - 5.1
Redundancy costs - 3.3
------------------------------------------------------------------------ ------------- -------------
20.0 28.4
Administration expenses
Reclassification to profit or loss of discontinued hedge contracts 14.3 -
Impairment of property, plant and equipment at loss-making operations 6.5 -
Redundancy costs 4.1 0.4
Dual administrative costs during transition of new brands from sellers - 3.9
Acquisition and restructuring costs - 3.1
24.9 7.4
-------------
Total before tax 44.9 35.8
Tax (8.5) (6.8)
------------------------------------------------------------------------ ------------- -------------
Total after tax 36.4 29.0
------------------------------------------------------------------------ ------------- -------------
2 Segmental analysis
IFRS 8, 'Operating Segments', requires operating segments to be
determined based on the group's internal reporting to the chief
operating decision maker. The chief operating decision maker is
considered to be the executive board, which has determined that the
primary segmental reporting format of the group is by geographic
region. The group strategy is to increase market share in each
territory using the optimum mix of brands that is appropriate for
each market, taking into account factors such as consumer
preference, established presence and brand appeal.
Year ended 28 February 2023
UK Rest of USA Rest of Total
Europe world
GBP million GBP million GBP million GBP million GBP million
-------------------------- ----------- ----------- ----------- ----------- -----------
Revenue 1,091.5 206.5 363.7 107.0 1,768.7
Cost of sales (569.1) (99.1) (152.6) (52.7) (873.5)
-------------------------- ----------- ----------- ----------- ----------- -----------
Gross profit 522.4 107.4 211.1 54.3 895.2
Distribution costs - - - - (447.9)
Administrative expenses
- other - - - - (517.5)
Amortisation of acquired
intangibles - - - - (12.2)
Other income - - - - 0.2
-------------------------- ----------- ----------- ----------- ----------- -----------
Operating loss - - - - (82.2)
Finance income - - - - 3.5
Finance expense - - - - (12.0)
-------------------------- ----------- ----------- ----------- ----------- -----------
Loss before tax - - - - (90.7)
========================== =========== =========== =========== =========== ===========
Year ended 28 February 2022
UK Rest of USA Rest of Total
Europe world
GBP million GBP million GBP million GBP million GBP million
---------------------------------- ----------- ----------- ----------- -----------
Revenue 1,202.8 219.2 451.6 109.2 1,982.8
Cost of sales (608.6) (99.7) (181.5) (51.9) (941.7)
-------------------------- ------- ----------- ----------- ----------- -----------
Gross profit 594.2 119.5 270.1 57.3 1,041.1
Distribution costs - - - - (516.5)
Administrative expenses
- other - - - - (502.5)
Amortisation of acquired
intangibles - - - - (12.8)
Other income - - - - 0.1
-------------------------- ------- ----------- ----------- ----------- -----------
Operating profit - - - - 9.4
Finance income - - - - -
Finance expense - - - - (1.6)
-------------------------- ------- ----------- ----------- ----------- -----------
Profit before tax - - - - 7.8
========================== ======= =========== =========== =========== ===========
Due to the nature of its activities, the group is not reliant on
any individual customers.
No analysis of the assets and liabilities of each operating
segment is provided to the chief operating decision maker in the
monthly management accounts; therefore, no measure of segmental
assets or liabilities is disclosed in this note. Non-current assets
located outside the UK comprise a right-of-use asset, warehouse
fixtures and fittings and offices in the USA with a net book value
of GBP107.4 million.
3 Other income
2023 2022
GBP million GBP million
--------------------------- ----------- -----------
Property rental income 0.1 0.1
R&D expenditure tax credit 0.1 -
---------------------------- ----------- -----------
0.2 0.1
=========================== =========== ===========
4 Finance income and expense
2023 2022
GBP million GBP million
--------------------------------------------------- ----------- -----------
Finance income: Bank interest received 3.5 -
==================================================== =========== ===========
Finance expense: RCF interest paid (9.6) (0.8)
Finance expense: IFRS 16 lease interest (1.7) (0.8)
Finance expense: RCF arrangement and facility fees (0.7) -
---------------------------------------------------- ----------- -----------
(12.0) (1.6)
=================================================== =========== ===========
5 Auditors' remuneration
2023 2022
GBP million GBP million
----------------------------------------------------------------------------- ----------- -----------
Audit of these financial statements 0.6 0.5
Disclosure below based on amounts receivable in respect of services to the group
Amounts receivable by auditors and their associates in respect of:
Audit of financial statements of subsidiaries pursuant to legislation - -
0.6 0.5
============================================================================= =========== ===========
6 Profit before tax
Profit before tax is stated after charging: 2023 2022
GBP million GBP million
----------------------------------------------------- ----------- -----------
Short-term operating lease rentals for buildings 0.1 0.6
Equity-settled share-based payment charges 32.0 26.1
Exceptional costs, excluding impairment (note 1) 31.5 35.8
Depreciation of property, plant and equipment 26.7 22.0
Impairment of property, plant and equipment (note 1) 9.8 -
Depreciation of right-of-use assets 12.8 10.0
Impairment of right-of-use assets (note 1) 3.6 -
Amortisation of intangible assets 16.9 9.0
Amortisation of acquired intangible assets 12.2 12.8
----------------------------------------------------- ----------- -----------
7 Earnings per share
Basic earnings per share is calculated by dividing profit after
tax attributable to members of the holding company by the weighted
average number of shares in issue during the year. Own shares held
by the Employee Benefit Trust are eliminated from the weighted
average number of shares. Diluted earnings per share is calculated
by dividing the result after tax attributable to members of the
holding company by the weighted average number of shares in issue
during the year, adjusted for potentially dilutive share options,
except when there is a loss, in which case the basic measure is
used.
2023 2022
Weighted average shares in issue for basic
earnings per share 1,233.0 1,235.3
Dilutive share options 69.4 48.2
----------------------------------------------- -------- --------
Weighted average shares in issue for diluted
earnings per share 1,302.4 1,283.5
=============================================== ======== ========
Loss (GBP million) (75.6) (4.0)
Loss per share (6.13)p (0.32)p
Loss (GBP million) (75.6) (4.0)
Adjusting items:
Amortisation of intangible assets arising
on acquisitions 12.2 12.8
Share-based payments charges 32.0 26.1
Exceptional items 31.5 35.8
Impairment of assets 13.4 -
Adjustment for tax (13.7) (14.4)
Adjusted (loss)/earnings (0.2) 56.3
----------------------------------------------- -------- --------
Adjusted (loss)/basic earnings per share (0.02)p 4.56p
Adjusted (loss)/diluted earnings per share (0.02)p 4.39p
----------------------------------------------- -------- --------
Adjusted earnings and adjusted earnings per share is a non-IFRS
measure which in management's opinion gives a more consistent
measure of the underlying performance of the business excluding
non-cash accounting charges relating to the amortisation of
intangible assets valued upon acquisitions, non-cash share-based
payment charges and exceptional items.
8 Staff numbers and costs
The average monthly number of persons employed by the group
(including directors) during the year, analysed by category, was as
follows:
Number of employees
2023 2022
--------------- ---------- ---------
Administration 2,475 2,462
Distribution 3,715 2,888
--------------- ---------- ---------
6,190 5,350
=============== ========== =========
The aggregate payroll costs of these persons were as
follows:
2023 2022
GBP million GBP million
------------------------------------------- ----------- -----------
Wages and salaries 176.3 174.8
Social security costs 19.0 14.3
Post-employment benefits 4.4 3.8
Equity-settled share-based payment charges 32.0 26.1
------------------------------------------- ----------- -----------
231.7 219.0
=========================================== =========== ===========
9 Directors' and key management compensation
2023 2022
GBP million GBP million
------------------------------------------- ----------- -----------
Short-term employee benefits 21.8 25.3
Post-employment benefits 0.3 0.3
Equity-settled share-based payment charges 4.5 3.4
26.6 29.0
=========================================== =========== ===========
Directors' and key management compensation comprises the group
directors and executive committee members.
10 Taxation
2023 2022
GBP million GBP million
-------------------------------------------------------------------------------------------- ----------- -----------
Analysis of (credit)/charge in year
Current tax on income for the year - (1.9)
Adjustments in respect of prior year taxes 2.0 (0.1)
Deferred taxation (note 15) (17.1) 13.8
Tax (credit)/charge (15.1) 11.8
============================================================================================ =========== ===========
Income tax expense computations are based on the jurisdictions in which taxable profits were
earned at prevailing rates in those jurisdictions. The company is subject to Jersey income
tax at the standard rate of 0%. The reconciliation below relates to tax incurred in the UK
where the group is tax resident. The total tax charge differs from the amount computed by
applying the UK rate of 19.0% for the year (2022: 19.0%) to profit before tax as a result
of the following:
2023 2022
GBP million GBP million
-------------------------------------------------------------------------------------------- ----------- -----------
(Loss)/profit before tax (90.7) 7.8
-------------------------------------------------------------------------------------------- ----------- -----------
(Loss)/profit before tax multiplied by the standard rate of corporation tax of the UK of
19.0%
(2022: 19.0%) (17.2) 1.5
Effects of:
Expenses not deductible for tax purposes 4.6 3.5
Change in deferred tax rate (5.9) 5.9
Adjustments in respect of prior year taxes 2.0 (0.1)
Overseas tax differentials 0.5 0.5
R&D tax credits - 0.1
Depreciation on ineligible assets 0.9 0.4
Tax (credit)/charge (15.1) 11.8
============================================================================================ =========== ===========
Tax recognised in the statement of changes in equity
Deferred tax debit on movement in tax base of share options (0.1) (3.0)
------------------------------------------------------------ ----- -----
No current tax was recognised in other comprehensive income
(2022: GBPnil). The UK corporation tax rate will change effective
April 2023 from 19% to 25% as enacted by the UK Government.
11 Intangible assets
Patents and licences Trademarks Customer lists Computer software Total
GBP million GBP million GBP million GBP million GBP million
----------------------------- --------------------- ------------ --------------- ------------------ ------------
Cost
Balance at 28 February 2021 0.6 115.6 8.1 23.5 147.8
Additions - - - 32.0 32.0
Disposals - - - (2.3) (2.3)
----------------------------- --------------------- ------------ --------------- ------------------ ------------
Balance at 28 February 2022 0.6 115.6 8.1 53.2 177.5
Additions 0.4 - - 31.7 32.1
Disposals - - - (1.7) (1.7)
----------------------------- --------------------- ------------ --------------- ------------------ ------------
Balance at 28 February 2023 1.0 115.6 8.1 83.2 207.9
============================= ===================== ============ =============== ================== ============
Accumulated amortisation
Balance at 28 February 2021 0.5 13.9 6.1 9.0 29.5
Amortisation for year 0.1 12.1 0.7 8.9 21.8
Disposals - - - (2.3) (2.3)
----------------------------- --------------------- ------------ --------------- ------------------ ------------
Balance at 28 February 2022 0.6 26.0 6.8 15.6 49.0
Amortisation for year - 11.5 0.7 16.9 29.1
Disposals - - - (1.7) (1.7)
----------------------------- --------------------- ------------ --------------- ------------------ ------------
Balance at 28 February 2023 0.6 37.5 7.5 30.8 76.4
============================= ===================== ============ =============== ================== ============
Net book value
At 28 February 2021 0.1 101.7 2.0 14.5 118.3
At 28 February 2022 - 89.6 1.3 37.6 128.5
At 28 February 2023 0.4 78.1 0.6 52.4 131.5
----------------------------- --------------------- ------------ --------------- ------------------ ------------
Within the statement of comprehensive income, amortisation of
acquired intangible assets (trademarks and customer lists) of
GBP12.2 million (2022: GBP12.8 million) is shown separately. The
amount of amortisation of the other intangible assets included in
distribution costs is GBP0.3 million (2022: GBP0.2 million) and in
administrative expenses is 16.6 million (2022: GBP8.8 million).
12 Property, plant and equipment
Short Fixtures and Computer Motor vehicles Land & Total
leasehold fittings equipment buildings
alterations
GBP million GBP million GBP million GBP million GBP million GBP million
---------------- --------------- ---------------- ---------------- --------------- ---------------- ------------
Cost
Balance at 28
February 2021 19.3 102.4 9.1 1.0 47.6 179.4
Additions 7.3 129.0 4.4 0.2 88.6 229.5
Exchange
differences - - - - 0.1 0.1
Disposals (0.1) (0.9) (1.2) (0.2) - (2.4)
---------------- --------------- ---------------- ---------------- --------------- ---------------- ------------
Balance at 28
February 2022 26.5 230.5 12.3 1.0 136.3 406.6
Additions 5.5 50.6 3.0 - - 59.1
Exchange
differences - - - - 0.3 0.3
Disposals (0.2) (1.8) (0.5) - (0.5) (3.0)
---------------- --------------- ---------------- ---------------- --------------- ---------------- ------------
Balance at 28
February 2023 31.8 279.3 14.8 1.0 136.1 463.0
================ =============== ================ ================ =============== ================ ============
Accumulated
depreciation
Balance at 28
February 2021 4.7 24.5 4.8 0.6 3.2 37.8
Depreciation
charge for the
year 2.1 14.4 2.9 0.2 2.4 22.0
Disposals (0.1) (0.9) (1.2) (0.2) - (2.4)
---------------- --------------- ---------------- ---------------- --------------- ---------------- ------------
Balance at 28
February 2022 6.7 38.0 6.5 0.6 5.6 57.4
Depreciation
charge for the
year 2.2 18.2 3.5 0.2 2.6 26.7
Impairment of
assets 1.6 8.2 - - - 9.8
Disposals (0.2) (1.8) (0.5) - - (2.5)
---------------- --------------- ---------------- ---------------- --------------- ---------------- ------------
Balance at 28
February 2023 10.3 62.6 9.5 0.8 8.2 91.4
================ =============== ================ ================ =============== ================ ============
Net book value
At 28 February
2021 14.6 77.9 4.3 0.4 44.4 141.6
At 28 February
2022 19.8 192.5 5.8 0.4 130.7 349.2
At 28 February
2023 21.5 216.7 5.3 0.2 127.9 371.6
---------------- --------------- ---------------- ---------------- --------------- ---------------- ------------
The amounts of depreciation included in the statement of
comprehensive income in distribution costs is GBP16.0 million
(2022: GBP13.1 million) and in administrative expenses is GBP10.7
million (2022: GBP8.9 million). The amounts of impairment included
in the statement of comprehensive income in distribution costs is
GBP3.3 million (2022: GBPnil) and in administrative expenses is
GBP6.5 million (2022: GBPnil).
The assets impaired relate to leasehold alterations and fixtures
and fittings located in facilities which are either no longer in
use or at loss-making operations where the assets value in use has
been determined to be lower than the carrying value. Assets have
been impaired to their estimated recoverable amount, being fair
value less costs of disposal. The residual value of the impaired
assets is GBPnil.
13 Right-of-use assets
Short Leasehold properties
GBP million
Cost
Balance at 28 February 2021 34.9
Additions 43.0
--------------------------------- ---------------------------
Balance at 28 February 2022 77.9
Additions 103.1
Balance at 28 February 2023 181.0
================================= ===========================
Accumulated depreciation
Balance at 28 February 2021 18.2
Depreciation for year 10.0
--------------------------------- ---------------------------
Balance at 28 February 2022 28.2
Depreciation for year 12.8
Impairment of assets 3.6
Balance at 28 February 2023 44.6
================================= ===========================
Net book value
At 28 February 2021 16.7
At 28 February 2022 49.7
At 28 February 2023 136.4
--------------------------------- ---------------------------
The amounts of depreciation included in the statement of
comprehensive income in distribution costs is GBP4.6 million (2022:
GBP6.9 million) and in administrative expenses is GBP8.2 million
(2022: GBP3.1 million). The amounts of impairment included in the
statement of comprehensive income in distribution costs is GBP3.6
million (2022: GBPnil) and in administrative expenses is GBPnil
(2022: GBPnil).
The assets impaired relate to short leasehold properties at
facilities which are no longer in use. The residual value of the
impaired assets is GBPnil.
Some leases contain break clauses or extension options to
provide operational flexibility. Potential future undiscounted
lease payments not included in the reasonably certain lease term,
and hence not included in right-of-use assets or lease liabilities,
total GBP2.3 million (2022: GBP2.3 million).
14 Deferred tax
Assets
Unused Depreciation Share-based payments Total
tax losses in excess of
capital
allowances
GBP million GBP million GBP million GBP million
------------------------------------------------- ------------ -------------- --------------------- ------------
Asset at 28 February 2021 - 0.6 2.6 3.2
Recognised in statement of comprehensive income 7.5 (0.6) (0.1) 6.8
Debit in equity - - (2.5) (2.5)
------------------------------------------------- ------------ -------------- --------------------- ------------
Asset at 28 February 2022 7.5 - - 7.5
Recognised in statement of comprehensive income 15.0 - 1.0 16.0
Debit in equity - - - -
------------------------------------------------- ------------ -------------- --------------------- ------------
Asset at 28 February 2023 22.5 - 1.0 23.5
================================================= ============ ============== ===================== ============
Liabilities
Business combinations Capital allowances in Share-based payments Total
excess of depreciation
GBP million GBP million GBP million GBP million
---------------------------- ---------------------- --------------------------- --------------------- ------------
Liability at 28 February
2021 (1.0) (3.2) - (4.2)
Recognised in statement of
comprehensive income 0.2 (19.3) (1.5) (20.6)
Debit in equity - - (0.5) (0.5)
---------------------------- ---------------------- --------------------------- --------------------- ------------
Liability at 28 February
2022 (0.8) (22.5) (2.0) (25.3)
Recognised in statement of
comprehensive income 0.1 (1.0) 2.0 1.1
Debit in equity - - - -
---------------------------- ---------------------- --------------------------- --------------------- ------------
Liability at 28 February
2023 (0.7) (23.5) - (24.2)
============================ ====================== =========================== ===================== ============
Recognition of the deferred tax assets is based upon the
expected generation of future taxable profits. The deferred tax
liability will reverse in more than one year's time as the
intangible assets are amortised. Deferred tax is calculated at 25%
as enacted from April 2023 by the UK Government.
15 Inventories
2023 2022
GBP million GBP million
------------------------- ----------- -----------
Finished goods 160.2 262.4
Finished goods - returns 17.9 17.0
------------------------- ----------- -----------
178.1 279.4
========================= =========== ===========
The value of inventories included within cost of sales for the
year was GBP872.0 million (2022: GBP939.1 million). The finished
goods returns is the estimated value of stock at customers but
expected to be returned. An impairment provision of GBP21.6 million
(2022: GBP18.4 million) was charged to the statement of
comprehensive income. There were no write-backs of prior period
provisions during the year. The inventory balance has reduced
during the year as a result of tighter stock management.
16 Trade and other receivables
2023 2022
GBP million GBP million
------------------ ----------- -----------
Trade receivables 17.6 34.6
Prepayments 13.9 21.3
Accrued income 5.5 2.1
37.0 58.0
================== =========== ===========
Trade receivables represent amounts due from wholesale customers
and advance payments to suppliers.
The fair value of trade and other receivables is not materially
different from the carrying value.
Where specific trade receivables are not considered to be at
risk and requiring a provision, the trade receivables impairment
provision is calculated using the simplified approach to the
expected credit loss model, based on the following percentages:
2023 2022
Age of trade receivable % %
------------------------ ---- ----
60 - 90 days past due 1 1
91 - 120 days past due 5 5
Over 121 days past due 90 90
------------------------- ---- ----
The provision for impairment of receivables is charged to
administrative expenses in the statement of comprehensive income.
The maturing profile of unsecured trade receivables and the
provisions for impairment are as follows:
2023 2022
GBP million GBP million
------------------------------- ----------- -----------
Due within 30 days 16.0 25.1
Provision for impairment - (0.1)
Due in 31 to 90 days 4.3 10.7
Provision for impairment (2.8) (2.4)
Past due 0.1 1.3
Provision for impairment - -
Total amounts due and past due 20.4 37.1
Total provision for impairment (2.8) (2.5)
------------------------------- ----------- -----------
17.6 34.6
=============================== =========== ===========
17 Cash and cash equivalents
2023 2022
GBP million GBP million
------------------------- ----------- -----------
At start of year 101.3 276.0
Net movement during year 227.9 (174.5)
Effect of exchange rates 1.7 (0.2)
------------------------- ----------- -----------
At end of year 330.9 101.3
========================= =========== ===========
There is no material credit risk associated with the cash at
bank due to the healthy credit ratings of the banks of BBB+ and
higher.
18 Trade and other payables
2023 2022
GBP million GBP million
---------------------------------- ----------- -----------
Trade payables 82.0 97.5
Other creditors 17.0 6.6
Accruals 125.6 152.4
Deferred income 15.9 16.7
Taxes and social security payable 19.8 23.4
---------------------------------- ----------- -----------
260.3 296.6
================================== =========== ===========
The fair value of trade payables is not materially different
from the carrying value.
19 Provisions
Dilapidations Returns Claims Total
GBP million GBP million GBP million GBP million
------------------------------------------------------------ -------------- ------------ ------------ ------------
Provision at 28 February 2022 3.7 32.0 17.8 53.5
Movements in provision charged/(credited) to income
statement:
Prior year provision utilised - (32.0) (5.7) (37.7)
Increase in provision in current year 6.3 37.6 - 43.9
------------------------------------------------------------ -------------- ------------ ------------ ------------
Provision at 28 February 2023 10.0 37.6 12.1 59.7
============================================================ ============== ============ ============ ============
The dilapidation provision represents the estimated exit cost of
leased premises and is expected to unwind in more than ten years.
The dilapidations provision has increased during the year due to
the acquisition of a leasehold warehousing premises in the USA. The
returns provision represents the revenue reduction of estimated
customer returns which occur over the two to three months after the
date of sale; and the claims represents the estimate of claims
against the group that are expected to settle in the period within
nine to twelve months after the year-end.
20 Interest-bearing loans and borrowings
This note provides information about the contractual terms of
the group's interest-bearing loans and borrowings, which are
measured at amortised cost.
Terms and debt repayment schedule
Nominal
interest Year of 2023 2022
Currency rate maturity GBP million GBP million
---------------------------- --------- ---------- --------- ----------- -----------
Revolving credit facility GBGBP SONIA CIA 2026 325.0 100.0
============================== ========= ========== ======= =========== ===========
During the year the previous RCF facility of GBP100.0 million
was repaid and replaced with a new facility of GBP325 million,
which is fully drawn down. The RCF is unsecured against the
company's assets and includes financial covenants relating to
interest cover and adjusted leverage.
Movement in interest-bearing loans and borrowings
2023 2022
GBP million GBP million
----------------------- ----------- -----------
Opening balance 100.0 -
Increase of borrowings 225.0 100.0
Interest accrued 9.6 0.8
Interest paid (9.6) (0.8)
Capital paid - -
----------------------- ----------- -----------
Closing balance 325.0 100.0
======================= =========== ===========
Reconciliation of movements in cash flows from financing
activities to movements in liabilities:
Balance Cash flow Additions Statement Movement Balance
28 February from financing of comprehensive in retained at 28 February
2022 activities income earnings 2023
and other
reserves
GBP million GBP million GBP million GBP million GBP million GBP million
----------------- ------------- ---------------- ------------ ------------------ ------------- ----------------
Equity 464.3 (7.2) - (88.1) 31.0 400.0
Leases 51.9 (12.0) 97.0 1.7 - 138.6
Bank borrowings 100.0 215.4 - 9.6 - 325.0
----------------- ------------- ---------------- ------------ ------------------ ------------- ----------------
616.2 196.2 97.0 (76.8) 31.0 863.6
================= ============= ================ ============ ================== ============= ================
21 Lease liabilities
Minimum lease payments Within 1-2 years 2-5 years 5-10 years More than Total
due 1 year 10 years
GBP million GBP million GBP million GBP million GBP million GBP million
------------------------ ------------ ------------ ------------ ------------ ------------ ------------
28 February 2023
Lease payments 14.9 12.4 38.6 54.3 37.7 157.9
Finance charges (2.8) (2.5) (6.2) (6.0) (1.8) (19.3)
------------------------ ------------ ------------ ------------ ------------ ------------ ------------
Net present value 12.1 9.9 32.4 48.3 35.9 138.6
======================== ============ ============ ============ ============ ============ ============
2023 2022
GBP million GBP million
---------------------------- ----------- -----------
Current lease liability 12.1 7.9
Non-current lease liability 126.5 44.0
---------------------------- ----------- -----------
Total 138.6 51.9
---------------------------- ----------- -----------
Movement in lease liabilities:
2023 2022
GBP million GBP million
------------------------- ----------- -----------
Opening balance 51.9 18.3
Interest accrued 1.7 0.8
Cash flow lease payments (12.0) (10.2)
Additions 97.0 43.0
Closing balance 138.6 51.9
========================= =========== ===========
The lease liabilities relate to leasehold properties.
22 Share capital
2023 2022
GBP million GBP million
------------------------------------------------------------------- ----------- -----------
1,268,333,439 authorised and fully paid ordinary shares of 1p each
( 2022: 1,267,634,949) 12.7 12.7
------------------------------------------------------------------- ----------- -----------
During the year, a total of 4.2 million shares were issued under
the share incentive plans (2022: 4.4 million). On 24 February 2023,
99,824 (2022: 63,761) new ordinary shares were issued to
non-executive directors as part of their annual remuneration.
The directors do not recommend the payment of a dividend so that
cash is retained in the group for capital expenditure projects that
are required for the rapid growth and efficiency improvements of
the business and for suitable business acquisitions (2022:
GBPnil).
23 Shares to be issued
2023 2022
GBP million GBP million
----------- -----------
31.9 31.9
----------- -----------
The shares to be issued represents the fair value of the
contingent shares to be issued to the non-controlling interests of
PrettyLittleThing.com Limited, in accordance with the acquisition
agreement entered into and announced on 28 May 2020. Under this
agreement, 16,112,331 Ordinary Shares in boohoo group plc are to be
issued subject to the group's share price averaging 491 pence per
share over a six-month period, up until a longstop date of 14 March
2024. If this condition is not met, the consideration will
lapse.
24 Reserves
2023 2022
GBP million GBP million
------------------------------------------------------------------------- ----------- -----------
Translation reserve (0.8) 0.2
Capital redemption reserve 0.1 0.1
Reconstruction reserve (515.3) (515.3)
Acquisition of non-controlling interest in PrettyLittleThing.com Limited (281.3) (281.3)
Proceeds from issue of growth shares in boohoo holdings Limited 0.8 0.8
------------------------------------------------------------------------- ----------- -----------
(796.5) (795.5)
========================================================================= =========== ===========
The translation reserve arises from the movement in the
revaluation of subsidiary balance sheets in foreign currencies; the
capital redemption reserve arose from a capital reconstruction in
2014; the reconstruction reserve arose on the impairment of the
carrying value of the subsidiary company in 2014 at that date; and
the acquisition of the non-controlling interest in
PrettyLittleThing is the excess of consideration paid over the
carrying value of the non-controlling interest as at the date of
acquisition in May 2020, written off to reserves.
25 Financial instruments
(a) Fair values of financial instruments
Trade and other receivables
The fair value of trade and other receivables is estimated as
the present value of future cash flows, discounted at the market
rate of interest at the reporting date if the effect is
material.
Trade and other payables
The fair value of trade and other payables is estimated as the
present value of future cash flows, discounted at the market rate
of interest at the reporting date if the effect is material.
Cash and cash equivalents
The fair value of cash and cash equivalents is estimated as its
carrying amount where the cash is repayable on demand. Where it is
not repayable on demand then the fair value is estimated at the
present value of future cash flows, discounted at the market rate
of interest at the reporting date.
Interest-bearing borrowings
Fair value is calculated based on the present value of future
principal and interest cash flows, discounted at the market rate of
interest at the reporting date.
Cash flow hedges
Fair value is calculated using forward interest rate points to
restate the hedge to fair market value. In the year ended 28
February 2023 hedge accounting has been discontinued on ineffective
cash flow hedge contracts and a total of GBP14.3m and has been
reclassified to the statement of comprehensive income. Hedge
ineffectiveness in relation to designated hedges was negligible
during the year ended 28 February 2023 and year ended 28 February
2022.
Investments in equity instruments
During the year 26.47% of the issued share capital of Revolution
Beauty Group plc ("REVB") was obtained for consideration of
GBP15.0m. On 1 September 2022 REVB was temporarily suspended from
trading on the Alternative Investment Market pending publication of
the company's annual audited. As at 28 February 2023 REVB shares
remain suspended from trading. The equity accounting requirements
of IAS 28 (Investments in associates and joint ventures) were
considered and it was determined that significant influence did not
exist. The investment has therefore been accounted for as a
financial asset under IFRS 9.
Fair values
2023 2022
GBP million GBP million
-------------------------------------------------- ----------- -----------
Financial assets
At amortised cost:
Cash and cash equivalents 330.9 101.3
Trade receivables 17.6 34.6
Accrued income 5.5 2.1
At fair value through profit or loss:
Cash flow hedges 0.2 -
At fair value through other comprehensive income:
Cash flow hedges 1.2 17.0
Equity investments 15.3 -
370.7 155.0
================================================== =========== ===========
2023 2022
GBP million GBP million
-------------------------------------------------- ----------- -----------
Financial liabilities
At amortised cost:
Trade payables 82.0 97.5
Other creditors 17.0 6.6
Accruals 125.6 152.4
Provisions 59.7 53.5
Interest-bearing loans and borrowings 325.0 100.0
Lease liabilities 138.6 51.9
At fair value through profit or loss:
Cash flow hedges 14.5 -
At fair value through other comprehensive income:
Cash flow hedges 3.4 6.8
-------------------------------------------------- ----------- -----------
765.8 468.7
================================================== =========== ===========
26 Capital commitments
Capital expenditure contracted for at the end of the reporting
year but not yet incurred is as follows:
2023 2022
GBP million GBP million
-------------------------------------------------------- ----------- -----------
Property, plant and equipment at warehousing facilities 17.0 21.8
27 Contingent liabilities
From time to time, the group can be subject to various legal
proceedings and claims that arise in the ordinary course of
business, which may include cases relating to the group's brand and
trading name. All such cases brought against the group are robustly
defended and a liability is recorded only when it is probable that
the case will result in a future economic outflow and that the
outflow can be reliably measured.
Appendices
Growth rates on prior period revenue by region
Revenue by period for the year to 28 February 2023 (FY23)
GBPm 4m to 31 December 2m to 28 February 12m to 28 February
------------------------------
FY23 FY22 yoy % yoy % CER FY23 FY22 yoy % yoy % FY23 FY22 yoy % yoy %
CER CER
------ ------ ------ ---------- ------ ------ ------ ------ -------- -------- ------ ------
Total 637.7 714.5 -11% -13% 248.6 292.4 -15% -17% 1,768.7 1,982.8 -11% -13%
------ ------ ------ ---------- ------ ------ ------ ------ -------- -------- ------ ------
Revenue by region
UK 400.8 451.0 -11% -11% 146.1 182.4 -20% -20% 1,091.5 1,202.8 -9% -9%
------ ------ ------ ---------- ------ ------ ------ ------ -------- -------- ------ ------
ROE 73.5 79.9 -8% -11% 30.9 34.9 -11% -14% 206.5 219.2 -6% -8%
------ ------ ------ ---------- ------ ------ ------ ------ -------- -------- ------ ------
USA 128.9 145.8 -12% -17% 57.4 55.3 4% -3% 363.7 451.6 -19% -24%
------ ------ ------ ---------- ------ ------ ------ ------ -------- -------- ------ ------
ROW 34.5 37.8 -9% -15% 14.2 19.9 -28% -36% 107.0 109.2 -2% -8%
------ ------ ------ ---------- ------ ------ ------ ------ -------- -------- ------ ------
GBPm 3m to 31 May 3m to 31 August 6m to 31 August
------------------------------
FY23 FY22 yoy % yoy % CER FY23 FY22 yoy % yoy % FY23 FY22 yoy % yoy %
CER CER
------ ------ ------ ---------- ------ ------ ------ ------ ------ ------ ------ ------
Total 445.7 486.0 -8% -10% 436.7 489.8 -11% -13% 882.4 975.8 -10% -11%
------ ------ ------ ---------- ------ ------ ------ ------ ------ ------ ------ ------
Revenue by region
UK 272.1 274.5 -1% -1% 272.5 294.9 -8% -8% 544.6 569.4 -4% -4%
------ ------ ------ ---------- ------ ------ ------ ------ ------ ------ ------ ------
ROE 49.6 54.4 -9% -10% 52.5 50.0 5% 2% 102.1 104.4 -2% -4%
------ ------ ------ ---------- ------ ------ ------ ------ ------ ------ ------ ------
USA 95.0 131.9 -28% -31% 82.4 118.6 -31% -35% 177.4 250.5 -29% -33%
------ ------ ------ ---------- ------ ------ ------ ------ ------ ------ ------ ------
ROW 29.0 25.2 15% 10% 29.3 26.3 11% 5% 58.3 51.5 13% 8%
------ ------ ------ ---------- ------ ------ ------ ------ ------ ------ ------ ------
Revenue by period for the year to 28 February 2022 (FY22)
GBPm 4m to 31 December 2m to 28 February 12m to 28 February
------------------------------
FY22 FY21 yoy % yoy % CER FY22 FY21 yoy % yoy % FY22 FY21 yoy % yoy %
CER CER
------ ------ ------ ---------- ------ ------ ------ ------ -------- -------- ------ ------
Total 714.5 660.8 8% 9% 292.5 268.0 9% 10% 1,982.8 1,745.3 14% 15%
------ ------ ------ ---------- ------ ------ ------ ------ -------- -------- ------ ------
Revenue by region
UK 451.0 356.7 26% 26% 182.3 158.3 15% 15% 1,202.8 945.1 27% 27%
------ ------ ------ ---------- ------ ------ ------ ------ -------- -------- ------ ------
ROE 79.9 90.3 -11% -9% 34.9 30.5 14% 14% 219.2 244.7 -10% -8%
------ ------ ------ ---------- ------ ------ ------ ------ -------- -------- ------ ------
USA 145.8 168.2 -13% -13% 55.4 64.6 -14% -12% 451.6 435.1 4% 6%
------ ------ ------ ---------- ------ ------ ------ ------ -------- -------- ------ ------
ROW 37.8 45.6 -17% -16% 19.8 14.6 36% 36% 109.2 120.4 -10% -8%
------ ------ ------ ---------- ------ ------ ------ ------ -------- -------- ------ ------
GBPm 3m to 31 May 3m to 31 August 6m to 31 August
------------------------------
FY22 FY21 yoy % yoy % CER FY21 FY20 yoy % yoy % FY21 FY20 yoy % yoy %
CER CER
------ ------ ------ ---------- ------ ------ ------ ------ ------ ------ ------ ------
Total 486.0 367.8 32% 34% 489.8 448.7 9% 10% 975.8 816.5 20% 21%
------ ------ ------ ---------- ------ ------ ------ ------ ------ ------ ------ ------
Revenue by region
UK 274.5 183.0 50% 49% 294.9 247.2 19% 19% 569.4 430.2 32% 32%
------ ------ ------ ---------- ------ ------ ------ ------ ------ ------ ------ ------
ROE 54.4 63.4 -14% -10% 50.0 60.3 -17% -14% 104.4 123.7 -16% -12%
------ ------ ------ ---------- ------ ------ ------ ------ ------ ------ ------ ------
USA 131.9 92.0 43% 48% 118.6 110.2 8% 10% 250.5 202.2 24% 28%
------ ------ ------ ---------- ------ ------ ------ ------ ------ ------ ------ ------
ROW 25.2 29.4 -15% -11% 26.3 31.0 -15% -13% 51.5 60.4 -15% -12%
------ ------ ------ ---------- ------ ------ ------ ------ ------ ------ ------ ------
CER in this appendix for the year ended 28 February 2022 is
calculated using exchange rates prevailing during the year ending
28 February 2022. Nomenclature: ROE - rest of Europe; ROW - rest of
world; yoy - year-on-year; CER - constant exchange rate
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END
FR BIGDURUBDGXU
(END) Dow Jones Newswires
May 16, 2023 02:00 ET (06:00 GMT)
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