18 July 2024
FRASERS GROUP PLC ("Frasers
Group", "the Group", or "the Company")
Full year results for the 52
weeks ended 28 April 2024 ("FY24")
Sustained profitable
growth
Headlines
· Continued strategic progress against key
priorities:
1. Profitable
growth
· APBT
(1) of £544.8m (+13.1%), at the top end of our guidance
range (£500-£550m).
· Adjusted EPS (1) of 95.8p (+33.6%).
· Continued strong profitable growth - FY25 APBT expected to be
£575m-£625m.
2. Elevation Strategy and
brands
· Continued successful execution of Elevation Strategy and
strengthened brand partnerships, including onboarding new brands
such as The North Face, On and Columbia. This contributed to a
strong trading performance especially from Sports Direct, which
delivered continuing year-on-year revenue and gross profit
growth.
· The
continued strength of third-party brand relationships and Sports
Direct's positioning, are unlocking further international expansion
opportunities. Growing our presence in the Nordics, a joint venture
in Southeast Asia, and currently acquiring a leading sports
retailer in the Netherlands.
3. Integrations and
synergies
· Virtual completion of warehouse automation project increased
the efficiency of our warehouse and inventory handling processes
resulting in a £138.2m (8.2%) reduction in gross stock holding
year-on-year. This represents a £266.7m (14.7%) reduction compared
to October 2023 and marks significant progress in reducing the
like-for-like gross inventory balance by 5-15% by the end of the
calendar year.
· Successful integration of acquisitions which will improve
efficiency and profitability in coming years.
· Rolling out a new group-wide digital platform, streamlining
and enhancing retail operations and improving consumer experiences
across all digital brand channels.
4. Frasers Plus
· Very
encouraging early performance of Frasers Plus. We see a great deal of potential for Frasers Plus as a new
revenue stream and a key pillar of our brand ecosystem. We have a
long-term ambition of £1bn+ in sales, £600m in balances delivering
a greater than 15% yield with over 2 million active Frasers Plus
customers - this is excluding any third-party
partnerships.
· Agreed strategic partnership with THG plc ("THG"), post
year-end. The partnership includes the integration of Frasers Plus
into THG's Ingenuity platform, benefiting customers across THG's
retail sites. This marks the first Frasers Plus partnership with an
external partner.
5. Strong balance sheet and cash
flow
· The
Group's strategy is underpinned by a strong balance sheet with net
assets increasing to £1,873.0m even after a £126.4m share buyback
programme in the year.
· Cash
inflow from operating activities before working capital movements
of £834.6m, largely driven by strong trading performance
particularly at Sports Direct, down 4.7% year-on-year reflecting
the non-repeat of the £95.0m reversal of legal and regulatory
provisions in the prior year.
Michael Murray, Chief Executive of Frasers
Group:
"This has
been a break-out year for building Frasers' future growth. As well
as delivering a strong trading performance, particularly from
Sports Direct, we made significant progress with our Elevation
Strategy. We expanded our retail ecosystem, establishing valuable
partnerships with new brands. Our brand relationships have never
been stronger, giving us invaluable support as we continue the
international expansion of our business. We invested in group-wide
operational efficiencies in warehouse automation and digital
infrastructure, which we expect to yield a tangible impact as early
as FY25. And we generated new growth opportunities with the
rollout of Frasers Plus, including recently signing our first third
party partner in THG.
I'm really proud of what we have
achieved at Frasers this year and would like to thank all
colleagues for their continued hard work and our brand partners for
their support. Together, we are building a resilient, profitable
growth retail ecosystem that delivers exceptional value for our
partners, consumers and shareholders. We have built a lot of
momentum this year and are entering the new financial year with
many exciting growth opportunities ahead of us, which we will
continue to invest in for the long-term benefit of the
Group."
Outlook
Our successful Elevation Strategy
is powering our strong financial performance, with strategic brand
relationships giving us better access to product across the Frasers
Group. As we move into FY25 and the Summer of Sport, we remain
confident that our strategy will drive continued strong
performance, and we expect significant synergies from both our
automation programme and the integration of acquisitions. We
continue to build a diverse business within retail, both in the UK
and internationally, and also within financial services and
property, that can deliver sustainable multi-year profitable
growth. For FY25, we expect to achieve another strong increase in
APBT in the range £575m-£625m.
|
FY24
52 weeks
|
FY23
(2)
53 weeks
|
Change
|
Income statement summary
|
|
|
|
UK Sports Retail
|
£2,860.8m
|
£2,959.1m
|
(3.3%)
|
Premium Lifestyle
|
£1,204.0m
|
£1,218.1m
|
(1.2%)
|
International
Retail
|
£1,289.2m
|
£1,247.7m
|
3.3%
|
Retail revenue
|
£5,354.0m
|
£5,424.9m
|
(1.3%)
|
Property
|
£72.7m
|
£36.1m
|
101.4%
|
Financial Services
|
£111.0m
|
£125.0m
|
(11.2%)
|
Group revenue
|
£5,537.7m
|
£5,586.0m
|
(0.9%)
|
|
|
|
|
Retail gross margin
|
41.8%
|
41.5%
|
+30
bps
|
Group gross margin
|
43.3%
|
42.9%
|
+40
bps
|
|
|
|
|
Retail operating costs
|
(£1,501.0m)
|
(£1,506.7m)
|
0.4%
|
Retail profit from trading
|
£738.9m
|
£745.3m
|
(0.9%)
|
Other operating costs
|
(£73.6m)
|
(£68.8m)
|
(7.0%)
|
Fair value adjustments to investment
properties
|
£11.5m
|
(£6.5m)
|
276.9%
|
Gain on disposal of
properties
|
£3.5m
|
£95.4m
|
(96.3%)
|
Group profit from trading
|
£835.6m
|
£908.4m
|
(8.0%)
|
|
|
|
|
Depreciation &
amortisation
|
(£284.6m)
|
(£242.4m)
|
(17.4%)
|
Impairments net of impairment
reversals/impairments
|
(£21.4m)
|
(£239.7m)
|
91.1%
|
Share-based payments
|
(£23.4m)
|
(£19.3m)
|
(21.2%)
|
Foreign exchange realised
|
£14.4m
|
£31.2m
|
(53.8%)
|
Exceptional items
|
-
|
£97.1m
|
(100.0%)
|
Operating profit
|
£520.6m
|
£535.3m
|
(2.7%)
|
|
|
|
|
Reported profit before tax ("PBT") from continuing
operations
|
£507.0m
|
£638.0m
|
(20.5%)
|
|
|
|
|
Exceptional items
|
-
|
(£97.1m)
|
|
Result from discontinued
operations
|
(£12.5m)
|
£26.4m
|
|
Fair value adjustment to derivative
financial instruments
|
(£27.6m)
|
(£32.5m)
|
|
Fair value losses/(gains) and
loss/(profit) on disposal of equity derivatives
|
£68.9m
|
(£41.1m)
|
|
Foreign exchange realised
|
(£14.4m)
|
(£31.2m)
|
|
Share-based payments
|
£23.4m
|
£19.3m
|
|
Adjusted profit before tax ("APBT")
(1)
|
£544.8m
|
£481.8m
|
13.1%
|
|
|
|
|
Reported basic earnings per share
("EPS")
|
86.8p
|
106.9p
|
(18.8%)
|
Adjusted basic EPS (1)
|
95.8p
|
71.7p
|
33.6%
|
Balance Sheet summary
|
|
|
|
Property, plant &
equipment
|
£962.6m
|
£1,132.0m
|
(15.0%)
|
Investment property
|
£350.5m
|
£160.0m
|
119.1%
|
Inventories (net of
provision)
|
£1,355.3m
|
£1,464.9m
|
(7.5%)
|
Net assets
|
£1,873.0m
|
£1,668.2m
|
12.3%
|
Cashflow & capital allocation
|
|
|
|
Cash inflow from operating
activities before working capital
|
£834.6m
|
£875.6m
|
(4.7%)
|
Net capital expenditure (including
sale & leasebacks)
|
(£211.3m)
|
(£214.5m)
|
1.5%
|
Purchase of own shares
|
(£126.4m)
|
(£155.3m)
|
18.6%
|
Summary of financial performance
· APBT
(1) increased by 13.1% to £544.8m despite lower profits
from the disposal of properties and subsidiaries (£28.5m in the
current period vs. £113.0m in prior year) and a £12.5m loss in
respect of the Group's acquisition of Matches Fashion (vs. a £26.3m
gain on disposal of Bob's in prior year). Property and acquisition
related impairments returned to more normalised levels in the
current year as a result of the strong trading performance combined
with the rationalisation of loss-making stores, and future
forecasts outweighing our downside impairment assumptions (a net
impairment charge of £21.4m in the current period vs. £239.7m
charge in the prior year).
· Retail profit from trading of £738.9m, down 0.9%. A
strong trading performance from Sports Direct
reflecting the continuing success of the Elevation Strategy and
strengthening brand relationships, was broadly offset by expected
declines in Game UK and Studio Retail, planned House of Fraser
store closures, and a softer luxury market. The previous year's
result also included the benefit of a 53rd week of
trading.
· Reported PBT of £507.0m, a decrease of 20.5%. The Group's
trading performance has been offset by a decrease in foreign
exchange gains, non-cash fair value movements on equity derivatives
and the non-repeat of exceptional gains (primarily related to the
gain made on businesses acquired from JD Sports Fashion
plc).
· Group:
· Retail revenue decreased by 1.3%. A strong trading
performance from the core Sports Direct business offset the
majority of the planned sales declines in Game UK and Studio
Retail, as well as the impact of House of Fraser store closures and
a softer luxury market in Premium Lifestyle. Excluding the impact
of the 53rd week from prior year, revenue increased by
0.6%. (3)
· Group gross margin % increased to 43.3% from 42.9%, driven by
an increase in retail gross margin reflecting improvements in
Sports Direct's product mix as a result of strengthening brand
relationships mitigated by the softer luxury market.
· UK
Sports (51.7% of total group revenue):
· Revenue decreased by 3.3% with Sports Direct largely
mitigating planned declines in Game UK and Studio Retail. Excluding
the impact of the 53rd week from prior year, revenue
decreased by 1.5%. (3)
· Gross profit increased by £28.9m and gross margin increased
by +250 bps to 45.5% reflecting an improved product mix at Sports
Direct due to strengthening brand relationships, as well as reduced
lower margin sales from Game UK and Studio Retail. This contributed
to a £13.7m (3.0%) increase in the segment's profit from
trading.
· Premium Lifestyle (21.7% of total group revenue):
· We
have invested in a unique proposition in our luxury business and
are well positioned for the future. Our long-term ambitions for
this business remain unchanged, although it is likely that progress
will remain subdued for the short to medium term in the face of a
softer market. However, we view this as an opportunity for
continued consolidation in order to further strengthen our
position.
· Revenue decreased by 1.2%, as the impact of planned House of
Fraser store closures and a softer luxury market were partially
offset by sales from the businesses acquired from JD Sports Fashion
plc in H2 of FY23. Excluding the impact of the 53rd week
from prior year, revenue increased by 0.7%.
(3)
· Segment profit from trading was broadly flat at £137.2m with
the planned clearance of surplus inventory from businesses acquired
from JD Sports Fashion plc and the impact of continuing closures of
legacy House of Fraser stores leading to a 340bps reduction in
gross margin to 35.8%. This was offset by overheads savings arising
from the closure of House of Fraser stores and acquired businesses
being integrated into the Group.
· International Retail (23.3% of total group
revenue):
· Revenue increased by 3.3% due to growth from the Sports
Direct International business, as well as the acquisition of the
MySale business in Australia in mid FY23. Excluding the impact of
the 53rd week from prior year, revenue increased by
5.3%. (3)
· Segment profit from trading decreased by £23.3m (14.9%) year
on year as gross profit growth (achieved at a lower margin % due to
Game Spain (console sales) and MySale) was more than offset by the
one-off costs associated with integrating acquired businesses (such
as Sportmaster in Denmark),
and inflation linked operating cost
increases.
· We
continue to explore opportunities for growth having invested in our
Indonesian joint venture and expect to complete on the purchase of
Netherlands retailer, Twinsport post year-end.
· Property (1.3% of total group revenue):
· Property investment remains a key focus for the Group,
unlocking occupational demand for our retail business whilst
delivering strong property returns that can be recycled at the
appropriate time.
· Revenue increased by 101.4%, largely due to the annualisation
of the prior year acquisitions of Luton, Dundee and Coventry Arena,
as well as the impact of current year acquisitions such as the
Castleford shopping centre.
· Segment profit from trading declined by £58.2m, with the
equivalent result in FY23 including a £95.4m gain on disposal of
properties.
· Financial Services (2.0% of total group revenue):
· We
see a great deal of potential for Frasers Plus as a new revenue
stream and a key pillar of our compelling brand ecosystem. We are
excited to grow our new Financial Services division with a
long-term ambition of £1bn+ in sales, £600m in balances delivering
a greater than 15% yield with over 2 million active Frasers Plus
customers - this is excluding any third-party
partnerships.
· Our
focus is to prioritise the growth of our new Frasers Plus credit
offering and reduce the Studio Retail book. As a result of this,
and the planned reduction in sales as Studio Retail was integrated
into the Group's warehouse and ecommerce infrastructure, revenue
decreased 11.2%.
· Segment profit from trading decreased £8.2m (12.5%)
year-on-year with the impairment charge returning to normalised
levels (following a release of impairment provision in the prior
year as a result of the cost-of-living crisis being less severe
than anticipated) and an increase in overhead costs arising from
the implementation of Frasers Plus.
· Post
year-end, we agreed a strategic partnership with THG. The
partnership includes the integration of Frasers Plus into THG's
Ingenuity platform, benefiting customers across THG's retail sites.
This marks the first Frasers Plus partnership with an external
partner.
· Basic EPS of 86.8p, a decrease of 20.1p year-on-year.
Adjusted EPS (1)
of 95.8p, an increase of 24.1p (33.6%) due to
increased underlying profitability, the impact of share buy-backs
and a lower effective tax rate.
· Net
assets have increased to £1,873.0m from £1,668.2m at 30 April 2023,
due to the profitability of the Group offset by share
buybacks.
· Cash
inflow from operating activities before working capital movements
of £834.6m,
largely driven by strong trading performance particularly in Sports
Direct, down 4.7% year-on-year reflecting the non-repeat of the
£95.0m reversal of legal and regulatory provisions in the prior
year.
Acquisitions and investments
· We
expect to complete on the purchase of Netherlands retailer,
Twinsport post year-end further supporting our growth ambitions in
Europe.
· Launched new joint venture in Indonesia to support our
expansion plans in Southeast
Asia.
· Made
further strategic investments as the Group continues to explore
opportunities to expand commercial relationships and further
develop the Group's ecosystem.
· Strategic disposal of several non-core properties and
lesser-performing brands, optimising the Group's portfolio and
allowing us to focus on high-growth areas.
Revised segments
Following a review of the Group's
operating segments at the start of the 2023/24 financial year, a
decision was taken to change the Group's segmental reporting to
more accurately reflect the impact of recent acquisitions and
strategy changes on how management views the business and makes
decisions, and to allow a more granular analysis of the Group's
operating base. Further details are given in note 3 to the
financial information below.
Other notes
(1)
This is an Alternative Performance Measure. APBT
is reconciled to the equivalent GAAP measure in note 3 to the
financial information. Adjusted EPS is discussed in note 10 to the
financial information.
(2)
Restated to reflect the Group's revised segmental
reporting, the reclassification of rental income and the change in
accounting policy regarding the valuation of investment property.
Please refer to note 1 of the financial information for
details.
(3)
A reconciliation to results excluding the
53rd week in prior year can be found in performance
review by segment section below.
Enquiries
Andrew Kasoulis
Investor Relations Director
E.
andrew.kasoulis@frasers.group
T. 07826 532191
Ronnie Laffar
Group Head of Communications
E. fgpr@frasers.group
T. 07931 841082
Rosie Oddy
Brunswick Group, PR
Advisors
E.
frasersgroup@brunswickgroup.com
T. 07557 804 512
CHIEF EXECUTIVE'S REPORT AND BUSINESS
REVIEW
Introduction
Reflecting on this past year, I am
proud of the strides we have made at Frasers Group and the
disciplined execution of our Elevation Strategy, which is bringing
the business closer to where we want to be for our consumers,
people, brand partners, and shareholders. Despite macro-economic
challenges, we continue to remain focused on delivering our
Elevation Strategy and further building our brand ecosystem across
attractive segments. Given the scale of growth the Frasers Group
has experienced in recent years, it is more important than ever to
ensure we keep our business simple. With this in mind, from FY24,
we have clearly defined our segments as UK Sports Retail, Premium
Lifestyle, International Retail, Property and Financial Services to
best illustrate our focus areas. FY24 has been an exceptional
year. We have delivered a strong financial performance thanks in
part to the breadth of our business across these segments, and
affirming the Frasers equity story: best brands, diverse
growth, and cash compounder.
Best Brands
· Our
brand relationships are stronger than they have ever been,
unlocking selectively distributed products from the world's best
brands.
· Continued commitment to the Elevation Strategy reaffirms our
new positioning, creating more opportunities and securing the Group
in markets with high barriers to entry.
· The
strength of our ecosystem positions us as a key strategic wholesale
partner for the world's best brands, giving them access to new
consumers, an elevated omni-channel experience, and an aligned
wholesale strategy.
Diverse Growth
· While Sport has always and continues to be a core tenet of
the business, we have exciting profitable growth opportunities
across a diverse range of segments including differentiated retail
and international opportunities and, most recently, property and
financial services.
· A
focus on leveraging these new revenue streams for the Group whilst
fixating on profitable growth.
Cash Compounder
· Frasers Group is highly cash generative and a cash
compounder, consistently generating new and diverse profit growth
opportunities.
· The
business has delivered £3.7bn in operating cash over the last 9
years which has been reinvested, funding the Elevation Strategy
which started in 2016, and delivered great value for all
stakeholders whilst maintaining consistently low
leverage.
· This
impressive cash compounder model is supported by conservative,
consistent and simple accounting principles.
Financials
We have seen strong trading
momentum across much of our diversified portfolio, especially in
Sports Direct, underscoring the resilience of our operations and
the strength of our business. We continue our practice of adopting
conservative, consistent, and simple accounting principles. This
disciplined approach to our balance sheet ensures that stakeholders
have a transparent view of the value creation within the
business.
Our financial performance has been
robust, with our cash compounder model driving significant returns.
We maintained strong financials across our diverse growth sectors,
including Retail across multiple sectors, international markets,
Property, and Financial Services. Our commitment to a strong
balance sheet provides a solid foundation for future growth and
stability, positioning us well to capitalise on emerging
opportunities.
Key financial metrics
include:
· UK
Sports segment gross margin increased 250bps to 45.5% demonstrating
the strength of our proposition and brand relationships, and
improving product access.
· Adjusted PBT (1) increased to £544.8m (13.1%)
driven particularly by Sports Direct, and more normalised
impairment levels as results and forecasts outperform downside
assumption scenarios.
· Reported PBT of £507.0m, a decrease of 20.5%. The Group's
trading performance has been offset by a decrease in foreign
exchange gains, non-cash fair value movements on equity derivatives
and the non-repeat of exceptional gains (primarily related to the
gain made on businesses acquired from JD Sports Fashion
plc).
· Adjusted EPS (1) up 33.6% to 95.8p due to improved
profitability supported by the significant share buy-back programme
in the year and lower effective tax rate.
· Net
assets have increased 12.3% to £1.9bn.
· £126.4m of capital returned to shareholders by way of share
buy-backs in the year.
· Very
strong cash inflow from operating
activities before working capital movements of £834.6m versus the prior year of £875.6m, which included
£95.0m of legal and regulatory provision reversals not repeated in
the current year.
· Continued self-funded growth of the Group and investment in
the Elevation Strategy with leverage remaining consistently
low.
Retail
Our mission at Frasers Group is to
build the planet's most admired and compelling brand ecosystem. We
obsess over our relationships with the best brands across Sport,
Premium and Luxury. Part of the strength of our ecosystem is its
diversity: no single brand supplier represents more than
15% of our total Group sales. Our brand portfolio is
strengthened by an ever-evolving roster of new brands, such as The
North Face, ON, Salomon, Columbia and Alo Yoga, which we have
onboarded this year. Importantly, this is underpinned by Frasers'
owned brands, which generate higher gross margin for the Group.
This brand mix not only provides consumers with a wide selection of
products across sectors but also provides varied price points to
serve different consumer groups. As brands continue to evaluate
their direct-to-consumer model, wholesale partners are becoming
increasingly imperative. Our Elevation Strategy has enabled clear
alignment with the world's best brands making us a key strategic
partner and presenting us with greater opportunities.
The mutual value of our brand
relationships came to life at the Frasers Festival held in May,
where over 40 of our strategic brand partners joined us for two
days to celebrate and foster collaboration. We had founders and
CEOs join us from the world's biggest brands, such as Kevin Plank,
Founder and CEO of Under Armour, Bjørn Gulden, CEO of adidas,
Daniel Grieder, CEO of Hugo Boss, Marc Maurer, Co-CEO of ON, and
more. It was fantastic to celebrate our achievements together and
their endorsement of Frasers Festival 2024 truly demonstrated their
trust in the repositioning of our business and their alignment to--
our vision.
Sports Direct continues to
reinforce its position as an undisputed leader in Sport. The Sport
industry is not slowing down; high consumer demand, coupled with
our unique proposition continues to drive profitable growth for the
division. In FY24, we have built on our strong foundations with the
successful roll-out of new elevated stores, experiential-led
flagship store openings and best-in-class category concepts. We
will continue to invest significantly in our store estate over the
coming years, always ensuring our robust payback model for store
investment is adhered to. In line with our international expansion
ambition, we have made meaningful progress with acquiring the
intellectual property of sporting goods retailers Perry Sport, and
Atkiesport, and contracted to acquire Twinsport post year-end -
which now makes us the #1 top Sport retailer in Benelux. We have
increased our equity investment in Norwegian sports retailer, XXL
and remain close to agreeing a strategic partnership to further
develop our presence across the Nordics. We are also excited about
our joint venture with international retail giant, PT MAP Active,
having already opened 3 stores in Indonesia. We will be further
growing our presence across Southeast Asia and are very excited
about the opportunities that arise from this
partnership.
While Sport moves from
strength-to-strength, our Premium and Luxury division experienced
the softening of the global luxury market felt by most high-end
retailers and brands. We made the
difficult but necessary decision to put MATCHES into administration
once it became clear that too much further investment would be
required to sustain the business. Following an extensive process by
the Joint Administrators, we reached an agreement to acquire
certain intellectual property assets. We remain committed to the
luxury market and, whilst the environment is likely to remain
challenging for the medium-term, we are confident in our
well-invested and differentiated proposition with FLANNELS; we have strong
relationships with key brand partners and remain
well-placed to capitalise on longer-term
opportunities. In
our Premium division, we have made good
progress on consolidating the House of Fraser store estate and
introduced other Frasers Group fascias to make the retail space
more productive whilst increasing the product offering for the
consumer. This new retail model with more of our concepts under one
roof is proving hugely attractive and is a commercial way to
incorporate multiple fascias together.
Over the last 12 months, we have
made excellent progress on our warehouse automation programme
across our supply chain, which is set to transform our Group-wide
retail operations. The project is now 99% complete and already
enabling further Group efficiencies and synergies, and we have
already made significant headway rationalising our stock holding by
£138.2m year-on-year.
This improvement in our operations
enables us to accelerate the integrations of acquisitions,
unlocking potential for the years ahead by reducing warehouse
locations, systems and infrastructure costs and, ultimately,
increasing profitability. Finally, we are
nearing completion of the integration of several acquisitions,
including Studio Retail, Sportmaster and GAME which we expect to
produce further efficiency and profitability improvements once
completed.
Our strong infrastructure has been
a key enabler for the elevation of our digital platform. Earlier
this year, we started the overhaul of
our digital offering with the creation of
a cutting-edge platform that is transforming the consumer
e-commerce experience through personalisation and better product
discoverability, building on our operational efficiencies and
improvements. To complement our international expansion, we
launched 10 new localised Sports Direct websites this year, which
allows us to unlock the strong demand across Europe, and we are
looking forward to scaling this further.
Strategic investments
Building a compelling brand
ecosystem requires a dynamic M&A strategy which is central to
the Group's DNA. Starting with one store in 1982, the Group has
grown to over £5 billion in sales across a number of diverse
sectors and countries, nearly all of which have been acquired as
part of our ongoing M&A strategy. We regularly review our
investment portfolio to ensure it is diverse and resilient, but
also conducive to synergies and future growth as demonstrated by
our recently increased investment in Hugo Boss. We are and always
have been incredibly supportive of Hugo Boss' strategy and work
closely with the management team to bring synergies for both
businesses. It is our intention to remain a long-term and
supportive shareholder.
Property
Frasers Group occupies over 20
million square feet of stores, warehouses, and office space.
Actively managing this vast estate is essential, and our presence
in large towns and cities often exceeds 150,000 square feet. Our
unique advantage lies in our deep understanding of trading data,
enabling us to effectively underwrite our occupational demand,
giving us an edge over other investors. This insight has unlocked
numerous opportunities to acquire property assets at attractive
prices.
By leveraging these acquisitions,
we not only fulfil our retail representation requirements but also
drive additional footfall, enhance the tenant mix, and ultimately
increase the value of our assets. When market conditions are
favourable, we maintain the flexibility to sell these assets,
capturing the value created and redeploying the proceeds across the
Group. In FY24, we successfully executed property acquisitions
totalling £91.0m and completed £12.1m of disposals. As we move
forward, we remain vigilant in monitoring further opportunities to
expand and optimise our portfolio.
Financial Services
We are incredibly optimistic about
our Financial Services proposition, further expanding our diverse
ecosystem. The platform evolves our capability, allowing us to
better understand our consumers cross-fascia, streamline the
consumer experience with a one-click checkout, and reward our most
loyal consumers.
Our improved capabilities support
the continued success of Frasers Plus - our FCA-regulated credit
payment account and rewards product - which is changing how
consumers shop across the Group's brands and third-party platforms.
The early performance of Frasers Plus has been very encouraging, as
it is an attractive product for consumers, and has driven a rise in
spending across categories and segments, and Average Order Value
above where we initially forecasted.
After a promising early uptake
from our consumers within Frasers Group, which generated invaluable
consumer insights and data that will help us better serve our
consumers, we entered our first external Frasers Plus partnership
with THG. Frasers Plus will be integrated into THG's Ingenuity
platform, benefiting consumers across THG retail sites and
unlocking new growth opportunities for the business by recruiting
new consumers and offering existing Frasers Plus members exciting
new products.
We see a great deal of potential
for Frasers Plus as a new revenue stream and a key pillar of our
compelling brand ecosystem. We are excited to grow our new
Financial Services division with a long-term ambition of £1bn+ in
sales, £600m in balances delivering a greater than 15% yield with
over 2 million active Frasers Plus customers - this is excluding
any third-party partnerships.
Our teams
Our people are our best and most
important asset - whether on the shop floor, in our warehouse, or
at head office - and we're always looking for new ways to inspire
and drive them. That's why we hosted our second Frasers Festival in
May, which brought together over 1,500 of our top-performing
colleagues from across the world. The day aimed to inspire, connect
and motivate our teams through fitness challenges, brand
activations and panel talks from global brand leaders. Feedback
from employees has been overwhelmingly positive as we head into a
busy summer period. We strongly believe that rewarding colleagues
for their contribution is crucial, which is why our Fearless 1000
bonus scheme recognises and rewards the Group's top 1,000
performers. We also introduced 'Retail Reconnect' for Head Office
staff whereby they spend two days a year in either a Retail or
Warehouse environment. The experience drives collaboration and a
better understanding of the demands facing our Retail and Warehouse
teams, as well as an understanding of our consumers. We're already
reaping the benefits of this initiative and seeing greater cohesion
among our people.
Continued focus on environmental, social, and
governance
This year, we introduced Frasers
Group's global Sustainability framework against which we benchmark
and measure our ESG progress and impact. We have made significant
strides against our ESG framework, underpinning our dedication to
environmental stewardship and social responsibility. While we have
made progress we can be proud of, we recognise that meaningful
change will take time and that we are at the beginning of a long
journey.
We're in the process of completing
our global carbon footprint audit for FY24, which demonstrates our
commitment to transparency and continuous improvement. Our
collaborative efforts with brand partners have optimised shipping,
significantly increased efficiency and reduced our carbon
footprint. We have also focused on reducing our reliance on
single-use plastics, as well as saving over 2-million hangers from
disposal to keep them in circulation for longer.
We have implemented
energy-saving initiatives, including voltage optimisation projects
and LED installations, which led to a noteworthy reduction in
energy consumption.
Outlook
As I mark two years as Chief
Executive at Frasers Group, I want to extend my gratitude and
thanks to every member of the Frasers Group team, our Board of
Directors, investors, and partners. Your ongoing commitment and
support drive us forward every day, and here's to continuing our
shared success in the years to come.
Looking ahead to FY25, we are
confident that our strategy will continue to drive strong trading,
bolstered by a Summer of Sport, the integration of recent
acquisitions and synergies from our automation programme.
We also expect to reduce
the like-for-like gross inventory balance by 5% to 15% by the end
of the calendar year, and have already
made significant progress.
We're continuing to build a diversified and
global retail business for sustained multi-year growth and expect
to achieve another significant increase in FY25 APBT in the range
£575m-£625m.
Michael Murray
Chief Executive Officer
17 July 2024
PERFORMANCE OVERVIEW
|
52 weeks
ended
28 April
2024
|
53 weeks
ended
30 April
2023
(1)
|
Retail revenue
|
£5,354.0m
|
£5,424.9m
|
Total revenue
|
£5,537.7m
|
£5,586.0m
|
|
|
|
Retail gross profit
|
£2,239.9m
|
£2,252.0m
|
Group gross profit
|
£2,395.2m
|
£2,395.0m
|
Retail gross margin
|
41.8%
|
41.5%
|
Group gross margin
|
43.3%
|
42.9%
|
|
|
|
Retail profit from trading
|
£738.9m
|
£745.3m
|
Group profit from trading
|
£835.6m
|
£908.4m
|
|
|
|
Reported profit before tax ("PBT") from continuing
operations
|
£507.0m
|
£638.0m
|
Adjusted profit before tax ("APBT")
(2)
|
£544.8m
|
£481.8m
|
|
|
|
Reported basic earnings per share
("EPS")
|
86.8p
|
106.9p
|
Adjusted basic EPS (2)
|
95.8p
|
71.7p
|
Net assets
|
£1,873.0m
|
£1,668.2m
|
Cash inflow from operating
activities before working capital
|
£834.6m
|
£875.6m
|
(1) Restated to reflect the
Group's revised segmental reporting, the reclassification of rental
income and the change in accounting policy regarding the valuation
of investment property. Please refer to note 1 of the financial
information for details.
(2) This is an Alternative
Performance Measure. APBT is reconciled to the equivalent GAAP
measure in note 3 to the financial information. Adjusted EPS is
discussed in note 10 to the financial information.
The Directors have adopted
Alternative Performance Measures (APM's). APM's should be
considered in addition to UK-Adopted International Accounting
Standards ("UK IAS") measures. The
Directors believe that Adjusted profit before tax ("APBT") and
Adjusted basic EPS provide further useful information for
shareholders on the underlying performance of the Group in addition
to the reported numbers and are consistent with how business
performance is measured internally. They are not recognised profit
measures under UK IAS and may not be directly comparable with
"adjusted" or "alternative" profit measures used by other
companies.
Retail revenue decreased by 1.3%. A
strong trading performance from the core Sports Direct business has
offset the majority of the planned sales declines in Game UK and
Studio Retail, as well as the impact of House of Fraser store
closures and a softer luxury market in Premium Lifestyle.
Excluding the impact of the 53rd week from prior
year, retail revenue increased by 0.6%. Total group revenue
decreased by 0.9% with growth in the property segment partially
mitigating declines in Retail and Financial Services. Excluding the
impact of the 53rd week from prior year, total revenue increased by
1.0%.
Group gross margin % increased to
43.3% from 42.9%, driven by an increase in retail gross margin
reflecting improvements in Sports Direct's product mix as a result
of strengthening brand relationships mitigated by the softer luxury
market.
Retail profit from trading of
£738.9m, down 0.9%. A strong trading
performance from Sports Direct reflecting the continuing success of
the Elevation Strategy and strengthening brand relationships, was
broadly offset by expected declines in Game UK and Studio Retail,
planned House of Fraser store closures, and a softer luxury market.
The previous year's result also included the benefit of a
53rd week of trading.
APBT (2) increased by
13.1% to £544.8m despite lower profits from the disposal of
properties and subsidiaries (£28.5m in the current period vs.
£113.0m in prior year) and a £12.5m loss in respect of the Group's
acquisition of Matches Fashion (vs. a £26.3m gain on disposal of
Bob's in prior year). Property and acquisition related impairments
returned to more normalised levels in the current year as a result
of the strong trading performance combined with the rationalisation
of loss-making stores, and future forecasts outweighing our
downside impairment assumptions (a net impairment charge of £21.4m
in the current period vs. £239.7m charge in the prior
year).
Reported PBT of £507.0m, a decrease
of 20.5%. The Group's trading performance has been offset by a
decrease in foreign exchange gains, non-cash fair value movements
on equity derivatives (which have moved from a £41.1m gain in FY23
to a loss of £68.9m in FY24 and account for a significant portion
of the year-on-year decline in statutory PBT) and the non-repeat of
exceptional gains (primarily related to the gain made on
businesses acquired from JD Sports Fashion
plc).
Basic EPS of 86.8p, a decrease of
20.1p year-on-year. Adjusted EPS (2)
of 95.8p, an increase of 24.1p (33.6%) due to
increased underlying profitability, the impact of share buy-backs
and a lower effective tax rate.
Net assets have increased to
£1,873.0m from £1,668.2m at 30 April 2023, due to the profitability
of the Group offset by share buybacks.
Cash inflow from operating
activities before working capital movements of £834.6m, largely
driven by strong trading performance particularly in Sports Direct,
down 4.7% year-on-year reflecting the non-repeat of the £95.0m
reversal of legal and regulatory provisions in the prior
year.
REVIEW BY BUSINESS SEGMENT
UK SPORTS
This segment now includes the
results of the Group's core sports retail store operations in the
UK, plus all the Group's sports retail online business, other
UK-based sports retail and wholesale operations, GAME UK stores and
online operations, retail store operations in Northern Ireland,
Frasers Fitness, and the Group's central operating functions
(including the Shirebrook campus).
UK Sports accounts for 51.7%
(FY23: 53.0%) of the Group's revenue.
|
52 weeks ended
28 April 2024
|
53 weeks ended
30 April 2023(1)
|
Pro-forma 52 weeks ended
April 2023
|
Revenue
|
£2,860.8m
|
£2,959.1m
|
£2,903.3m
|
Cost of sales
|
(£1,558.5m)
|
(£1,685.7m)
|
(£1,653.9m)
|
Gross profit
|
£1,302.3m
|
£1,273.4m
|
£1,249.4m
|
Gross margin %
|
45.5%
|
43.0%
|
43.0%
|
Trading result
|
£468.4m
|
£454.7m
|
£446.1m
|
Operating profit
|
£353.1m
|
£328.3m
|
£322.1m
|
|
|
|
|
Store numbers
|
797
|
812
|
|
(1) Restated to reflect the
Group's revised segmental reporting, the reclassification of rental
income and the change in accounting policy regarding the valuation
of investment property. Please refer to note 1 of the financial
information for details.
Revenue decreased by 3.3% with
Sports Direct largely mitigating planned declines in Game UK and
Studio Retail. Excluding the impact of the 53rd week from prior
year, revenue decreased by 1.5%.
Gross profit increased by £28.9m and
gross margin increased by +250 bps to 45.5% reflecting an improved
product mix at Sports Direct due to strengthening brand
relationships, as well as reduced lower margin sales from Game UK
and Studio Retail. This contributed to a £13.7m
(3.0%) increase in the segment's profit from
trading.
UK Sports' operating profit result
of £353.1m (FY23: £328.3m) includes impairment reversals of £8.4m
(FY23: impairments of £25.1m), a result of the strong trading
performance, and future forecasts outweighing our downside
impairment assumptions, and foreign exchange gains of £9.2m (FY23:
£35.8m).
Store numbers decreased from 812
to 797 mainly driven by the replacement of standalone Game stores
with Game concessions situated inside larger Sports Direct
stores.
PREMIUM LIFESTYLE
This segment includes the results
of the Group's premium and luxury retail businesses FLANNELS,
Cruise, Van Mildert, Jack Wills, House of Fraser, Gieves and
Hawkes, and Sofa.com along with the related websites, the
businesses acquired from JD Sports in FY23, as well as the results
from the I Saw it First website and the Missguided website until
the disposal of the Missguided intellectual property in October
2023.
Premium Lifestyle accounts for
21.7% (FY23: 21.8%) of the Group's revenue
|
52 weeks ended
28 April 2024
|
53 weeks ended
30 April 2023(1)
|
Pro-forma 52 weeks ended
April 2023
|
Revenue
|
£1,204.0m
|
£1,218.1m
|
£1,195.1m
|
Cost of sales
|
(£773.2m)
|
(£741.0m)
|
(£727.0m)
|
Gross profit
|
£430.8m
|
£477.1m
|
£468.1m
|
Gross margin %
|
35.8%
|
39.2%
|
39.2%
|
Trading result
|
£137.2m
|
£134.0m
|
£131.5m
|
Operating profit
|
£98.6m
|
£91.0m
|
£89.3m
|
|
|
|
|
Store numbers
|
181
|
221
|
|
(1) Restated to reflect the
Group's revised segmental reporting, the reclassification of rental
income and the change in accounting policy regarding the valuation
of investment property. Please refer to note 1 of the financial
information for details.
Revenue decreased by 1.2%, as the
impact of planned House of Fraser store closures and a softer
luxury market were partially offset by sales from the businesses
acquired from JD Sports Fashion plc in H2 of FY23.
Excluding the impact of the 53rd week
from prior year, revenue increased by 0.7%.
Segment profit from trading was
broadly flat at £137.2m with the planned clearance of surplus
inventory from businesses acquired from JD Sports Fashion plc and
the impact of continuing closures of legacy House of Fraser stores
leading to a 340bps reduction in gross margin to 35.8%. This was
offset by overheads savings arising from the closure of House of
Fraser stores and acquired businesses being integrated into the
Group.
Premium Lifestyle's operating
profit result of £98.6m (FY23: £91.0m) includes impairments of
£2.5m (FY23: impairments of £56.9m including £20.5m in respect of
writing down intangibles recognised on the acquisition of
Missguided and I Saw it First).
We have invested in a unique
proposition in our luxury business and are well positioned for the
future. Our long-term ambitions for this business remain unchanged,
although it is likely that progress will remain subdued for the
short to medium term in the face of a softer market. However, we
view this as an opportunity for continued consolidation in order to
further strengthen our position.
Store numbers decreased from 221
to 181 as we continued to rationalise the House of Frasers store
estate and close unprofitable stores in the businesses acquired
from JD Sports Fashion plc in H2 of FY23.
INTERNATIONAL RETAIL
This segment includes the results
all of the Group's sports retail stores, management and operating
functions in Europe, Asia and the rest of the world, including the
Group's European Distribution Centres in Belgium and Austria, GAME
Spain stores and e-commerce offering, the Baltics & Asia
e-commerce offerings, the MySale business in Australia, the Group's
US retail operations until they were disposed of in 2022, and all
non-UK based wholesale and licensing activities (relating to brands
such as Everlast, Karrimor and
Slazenger).
International accounts for 23.3%
(FY23: 22.3%) of the Group's revenue.
|
52 weeks ended
28 April 2024
|
53 weeks ended
30 April 2023(1)
|
Pro-forma 52 weeks ended
April 2023
|
Revenue
|
£1,289.2m
|
£1,247.7m
|
£1,224.2m
|
Cost of sales
|
(£782.4m)
|
(£746.2m)
|
(£732.1m)
|
Gross profit
|
£506.8m
|
£501.5m
|
£492.1m
|
Gross margin %
|
39.3%
|
40.2%
|
40.2%
|
Trading result
|
£133.3m
|
£156.6m
|
£153.6m
|
Operating profit/(loss)
|
£44.1m
|
(£11.3m)
|
(£11.1m)
|
|
|
|
|
Store numbers
|
575
|
597
|
|
(1) Restated to reflect the
Group's revised segmental reporting, the reclassification of rental
income and the change in accounting policy regarding the valuation
of investment property. Please refer to note 1 of the financial
information for details.
Revenue increased by 3.3% due to
growth from the Sports Direct International business, as well as
the acquisition of the MySale business in Australia in mid FY23.
Excluding the impact of the 53rd week from prior year,
revenue increased by 5.3%.
Segment profit from trading
decreased by £23.3m (14.9%) year on year as gross profit growth
(achieved at a lower margin % due to Game Spain (console sales) and
MySale) was more than offset by the one-off costs associated with
integrating acquired businesses (such as Sportmaster in Denmark),
and inflation linked operating cost increases.
International's operating profit
result of £44.1m (FY23: loss of £11.3m)
includes impairments of £12.5m (FY23: impairments of £133.8m,
including £87.9m in respect of intangible assets allocated to the
Everlast CGU) and foreign exchange gains of £0.3m (FY23: losses of
£4.7m).
We continue to explore opportunities
for growth having invested in our Indonesian joint venture and
expect to complete on the purchase of Netherlands retailer,
Twinsport post year-end.
Store numbers decreased from 597
to 575 as we continued to evaluate our stores at lease expiries and
breaks, to rationalise the store international store
portfolio.
PROPERTY
This segment includes the results
from the Group's freehold property owning and
long leasehold holding property companies that generate third party
rental and other property related income (e.g., car parking,
conference and events income). The results of the Coventry Arena
are reported in this segment.
Property accounts for 1.3% (FY23:
0.6%) of the Group's revenue.
|
52 weeks ended
28 April 2024
|
53 weeks ended
30 April 2023(1)
|
Pro-forma 52 weeks ended
April 2023
|
Revenue
|
£72.7m
|
£36.1m
|
£35.4m
|
Cost of sales
|
(£7.8m)
|
(£2.6m)
|
(£2.6m)
|
Gross profit
|
£64.9m
|
£33.5m
|
£32.8m
|
Gross margin %
|
89.3%
|
92.8%
|
92.7%
|
Trading result
|
£39.1m
|
£97.3m
|
£95.5m
|
Operating (loss)/profit
|
(£31.3m)
|
£37.4m
|
£36.7m
|
|
|
|
|
(1) Restated to reflect the
Group's revised segmental reporting, the reclassification of rental
income and the change in accounting policy regarding the valuation
of investment property. Please refer to note 1 of the financial
information for details.
Revenue increased by 101.4%, largely
due to the annualisation of the prior year acquisitions of Luton,
Dundee and Coventry Arena, as well as the impact of current year
acquisitions such as the Castleford retail park retail
park.
Segment profit from trading declined
by £58.2m, with the equivalent result in FY23 including a £95.4m
gain on disposal of properties.
Property's operating loss of
£31.3m (FY23: profit of £37.4m) includes a
net impairment charge of £14.8m (FY23: impairments of £23.9m), fair
value gains on investment property £11.5m (FY23: fair value loss of
£6.5m) and depreciation of £60.2m (FY23: £36.0m).
Property investment remains a key
focus for the Group, unlocking occupational demand for our retail
business whilst delivering strong property returns that can be
recycled at the appropriate time.
FINANCIAL SERVICES
This segment includes the results
of Frasers Group Financial Services. This includes interest charged
on amounts advanced to consumer credit customers, along with the
associated impairment and operating costs.
Financial Services accounts for
2.0% (FY23: 2.2%) of the Group's revenue.
|
52 weeks ended
28 April 2024
|
53 weeks ended
30 April 2023(1)
|
Pro-forma 52 weeks ended
April 2023
|
Revenue
|
£111.0m
|
£125.0m
|
£122.6m
|
Impairment losses on credit
receivables
|
(£20.6m)
|
(£15.5m)
|
(£15.2m)
|
Gross profit
|
£90.4m
|
£109.5m
|
£107.4m
|
Gross margin %
|
81.4%
|
87.6%
|
87.6%
|
Trading result
|
£57.6m
|
£65.8m
|
£64.6m
|
Operating profit
|
£56.1m
|
£89.9m
|
£88.2m
|
|
|
|
|
(1) Restated to reflect the
Group's revised segmental reporting, the reclassification of rental
income and the change in accounting policy regarding the valuation
of investment property. Please refer to note 1 of the financial
information for details.
Our focus is to prioritise the
growth of our new Frasers Plus credit offering and reduce the
Studio Retail book. As a result of this, and the planned reduction
in sales as Studio Retail was integrated into the Group's warehouse
and ecommerce infrastructure, revenue decreased 11.2%.
Segment profit from trading
decreased £8.2m (12.5%) year-on-year with the impairment charge
returning to normalised levels (following a release of impairment
provision in the prior year as a result of the cost-of-living
crisis being less severe than anticipated) and an increase in
overhead costs arising from the implementation of Frasers
Plus.
We see a great deal of potential for
Frasers Plus as a new revenue stream and a key pillar of our
compelling brand ecosystem. We are excited to grow our new
Financial Services division with a long-term ambition of £1bn+ in
sales, £600m in balances delivering a greater than 15% yield with
over 2 million active Frasers Plus customers - this is excluding
any third-party partnerships.
Post year-end, we agreed a strategic
partnership with THG plc ("THG"), post
year-end. The partnership includes the integration of Frasers Plus
into THG's Ingenuity platform, benefiting customers across THG's
retail sites. This marks the first Frasers Plus partnership with an
external partner.
DISCONTINUED OPERATION
|
52 weeks ended
28 April 2024
|
53 weeks ended
30 April 2023(1)
|
Result from discontinued operation
(net of tax)
|
(£12.5m)
|
£26.3m
|
(1) Restated to reflect the
Group's revised segmental reporting, the reclassification of rental
income and the change in accounting policy regarding the valuation
of investment property. Please refer to note 1 of the financial
information for details.
On 20 December 2023, the Group
acquired the Matches business ("Matches") from MF Intermediate
Limited, by way of the purchase of 100% of the shares of a group of
6 companies (of which MatchesFashion Limited was the main trading
subsidiary) and the acquisition of the senior and junior debt owed
by those companies. The consideration payable was
£51.9m.
Following the acquisition, the
Group provided significant funding to Matches but the business
continued to generate material trading losses. As a result of this,
management concluded that the funding requirements of the business
would be far in excess of amounts that the Group considers to be
viable and on 8 March 2024 administrators were appointed. Since the
Group lost control of Matches upon the administrators' appointment,
its net assets (including the associated goodwill) were
derecognised and the loans due to the Group from Matches were
recognised at this point, net of a
provision for expected credit loss.
The £12.5m loss from discontinued
operation reflects a trading loss of £8.4m for the period during
which Matches was a subsidiary of the Group and £4.1m loss on
disposal, reflecting the difference between the carrying value of
the net assets at the point the Group ceased to control Matches and
the recoveries expected from the administration.
In the period between the
administrators' appointment and 28 April 2024, the Group purchased
the brand names and intellectual property of Matches for £20.0m,
with the consideration payable being treated as a reduction in the
amounts owed to the Group by Matches.
In the prior period, the Group
disposed of its US retail businesses trading as Bobs Stores and
Eastern Mountain Sports for net cash consideration of approximately
£43.6m. The £26.3m profit from discontinued operation reflects a
break even trading performance (after tax) for the period during
which these businesses were subsidiaries of the Group and a £26.3m
gain on disposal.
FINANCIAL REVIEW
The consolidated financial
statements for the 52 weeks ended 28 April 2024 are presented in
accordance with UK-adopted International
Accounting Standards (UK IAS).
SUMMARY OF RESULTS
|
52 weeks
ended
28 April
2024
|
53 weeks
ended
30 April
2023
(1)
|
Revenue
|
£5,537.7m
|
£5,586.0m
|
Reported profit before
tax
|
£507.0m
|
£638.0m
|
Adjusted PBT
(2)
|
£544.8m
|
£481.8m
|
Reported basic EPS
|
86.8p
|
106.9p
|
Adjusted basic EPS
(2)
|
95.8p
|
71.7p
|
(1) Restated to reflect the
Group's revised segmental reporting, the reclassification of rental
income and the change in accounting policy regarding the valuation
of investment property. Please refer to note 1 of the financial
information for details.
(2) This is an Alternative
Performance Measure. APBT is reconciled to the equivalent GAAP
measure in note 3 to the financial information. Adjusted EPS is
discussed in note 10 to the financial information.
FOREIGN EXCHANGE AND TREASURY
The Group reports its results in
GBP but trades internationally and is therefore exposed to currency
fluctuations on currency cash flows in various ways. These include
purchasing inventory from overseas suppliers, making sales in
currencies other than GBP and holding overseas assets in other
currencies. The Board mitigates the cash flow risks associated with
these fluctuations with the careful use of currency hedging using
forward contracts and other derivative financial
instruments.
The Group uses forward contracts
that qualify for hedge accounting in two main ways - to hedge
highly probable EUR sales income and USD inventory purchases. This
introduces a level of certainty into the Group's planning and
forecasting process. Management has reviewed detailed forecasts and
the growth assumptions within them and is satisfied that the
forecasts meet the criteria for being highly probable forecast
transactions.
As at 28 April 2024, the Group had
the following forward contracts and bought options that qualified
for hedge accounting under IFRS 9 Financial Instruments ("IFRS 9"),
meaning that fluctuations in the value of the contracts before
maturity are recognised in the Hedging Reserve through Other
Comprehensive Income. After maturity, the sales and purchases are
then valued at the hedge rate.
Currency
|
Hedging
against
|
Currency
value
|
Timing
|
Rates
|
USD / GBP
|
USD
Inventory Purchases
|
USD
275m
|
FY25
|
1.31
|
EUR / GBP
|
Euro
sales
|
EUR
456m
|
FY25-FY26
|
0.98-1.08
|
The Group also uses currency
options, swaps and spots for more flexibility against cash flows
that are less than highly probable and therefore do not qualify for
hedge accounting under IFRS 9. The fair value movements before
maturity are recognised in the Income Statement.
The Group has the following sold
currency options and unhedged forwards:
Currency
|
Expected
use
|
Currency
value
|
Timing
|
Rates
|
USD / GBP
|
USD
inventory purchases
|
USD
240m
|
FY25
|
1.26 -
1.31
|
USD / EUR
|
USD
inventory purchases
|
USD
95m
|
FY25
|
1.04 -
1.31
|
EUR / GBP
|
Euro
sales
|
EUR
1,056m
|
FY25 -
FY27
|
0.98 -
1.15
|
The Group is proactive in managing
its currency requirements. The Treasury team works closely with
senior management to understand the Group's plans and forecasts and
discusses and understands appropriate financial products with
various financial institutions, including those within the Group
Financing Facility. This information is then used to implement
suitable currency products to align with the Group's
strategy.
Regular reviews of the hedging
performance are performed by the Treasury team alongside senior
management to ensure the continued appropriateness of the currency
hedging in place and, where suitable, to implement additional
strategies and or restructure existing approaches, in conjunction
with our financial institution partners.
Given the potential impact of
commodity prices on raw material costs, the Group may hedge certain
input costs, including cotton, crude oil and
electricity.
EARNINGS
Basic earnings per share (EPS) is
calculated by dividing the earnings attributable to ordinary
shareholders by the weighted average number of ordinary shares
outstanding during the financial period. Shares held in Treasury
and the Employee Benefit Trust are excluded from this
figure.
|
52 weeks
ended
28 April
2024
|
53 weeks
ended
30 April
2023 (1)
|
Reported EPS (Basic)
|
86.8p
|
106.9p
|
Adjusted EPS (Basic)
(2)
|
95.8p
|
71.7p
|
Weighted average number of shares
(actual)
|
438,504,703
|
459,911,330
|
(1) Restated to reflect the
Group's revised segmental reporting, the reclassification of rental
income and the change in accounting policy regarding the valuation
of investment property. Please refer to note 1 of the financial
information for details.
(2) This is an Alternative
Performance Measure. Adjusted EPS is discussed in note10 to the
financial information.
Basic EPS of 86.8p, a decrease of
20.1p year-on-year. Adjusted EPS (2)
of 95.8p, an increase of 24.1p (33.6%) due to
increased underlying profitability, the impact of share buy-backs
and a lower effective tax rate.
DIVIDENDS & SHARE BUYBACKS
The Board has decided not to pay a
final dividend in relation to FY24 (FY23: £nil). The Board remains
of the opinion that it is in the best interests of the Group and
its shareholders to preserve financial flexibility and facilitate
future investments and other growth opportunities. The payment of
dividends remains under review.
The Group's share buyback
programme has continued during the year which is a demonstration of
our commitment to shareholder returns, our confidence in our
strategy and our potential for future growth. Share buy-backs
totalled £126.4m (FY23: £155.3m).
CAPITAL EXPENDITURE
During the period, gross capital
expenditure (excluding IFRS 16) amounted to £267.2m (FY23: £468.4m
- this figure was inflated as a result of the sale and leaseback
transaction entered into in the prior year).
STRATEGIC INVESTMENTS
The Group continues to hold
various strategic investments as detailed in note 15. In addition,
the Group also holds indirect strategic investments within
contracts for difference and options.
On initial application of IFRS 9
the Group made the irrevocable election to account for long term
financial assets (i.e., strategic investments) at fair value
through other comprehensive income (FVOCI) given these are not held
for trading purposes. The election is made on an
instrument-by-instrument basis, only qualifying dividend income is
recognised in profit and loss, changes in fair value are recognised
within OCI and never reclassified to profit and loss, even if the
asset is impaired, sold or otherwise derecognised.
The fair values of the contracts
for difference and options are recognised in Derivative Financial
Assets or Liabilities on the Group's Balance Sheet, with the
movement in fair value recorded in the Income Statement.
The Frasers Group's strategic
investment strategy is a key enabler in the growth and success of
the Group and is in the ordinary course of business.
ACQUISITIONS
The Group acquired a number of
businesses during the period.
RELATED PARTIES
Relationship Between
Frasers Group plc and Mike Ashley
Mike Ashley opened his first
sports shop in 1982 and built the Frasers Group into a
multi-billion-pound retailer over the next forty years. The Group
was initially floated on the London Stock Exchange in 2007 and
following continued growth Mike stepped down as CEO in 2022. He
also stepped down from the Board of Directors in 2022 and has no
day-to-day involvement or responsibility for the strategic
direction of the Group or any Board matters.
However, given his extensive
involvement in leading the business for over forty years, the Board
has an agreement with Mr Ashley, through his own company MASH
Holdings Limited, which provides for management to seek his
expertise in discrete areas where he has specific knowledge, for
example in warehousing, logistics or strategic relationships with
the supply chain. He does not receive any remuneration for
providing this advice to management and has no decision-making
powers.
TAXATION
Total tax contribution
The effective tax rate on profit
before tax in FY24 was 21.8% (FY23 restated: 24.0%). The Group has
contributed approximately £500m (FY23: £469m) in taxes paid and
collected during the year. Taxes paid by the Group of
approximately £220m (FY23: £204m) are primarily business rates,
corporation tax and employer's national insurance
contributions. Taxes collected by the Group of approximately
£280m (FY23: £265m) are primarily net VAT, PAYE and employee's
national insurance contributions.
The Group's Tax Strategy is
published at:
https://frasers-cms.netlify.app//assets//files/financials/fy24-tax-strategy.pdf
Taxes paid by country
The Group generates 92.6% of its
profits in companies that are resident in the UK and pays 88.3% of
its corporation tax liabilities to HMRC in the UK.
Plastic Packaging Taxes
During FY24 the Group has paid
approx. £0.1m in respect of the new UK Plastics Packaging
Tax.
CASH FLOW AND NET DEBT
Net debt increased by £30.8m from
£416.8m at 30 April 2023 to £447.6m at 28
April 2024. Net debt includes £126.8m of
borrowings relating to the Frasers Group Financial Services Limited
securitisation facility (30 April 2023: £161.6m). Net interest on bank loans
and overdrafts increased to £51.4m in the
year (FY23: £37.2m) largely due to
increased interest rates and increased usage of the Revolving
Credit Facility ("RCF") in the period.
Analysis of net debt:
|
28 April
2024
|
30 April
2023
|
Cash and cash
equivalents
|
£358.6m
|
£332.9m
|
Borrowings
|
(£806.2m)
|
(£749.7m)
|
Net debt
|
(£447.6m)
|
(£416.8m)
|
Securitisation (disclosed within
borrowings)
|
(£126.8m)
|
(£161.6m)
|
Net debt excluding
securitisation
|
(£320.8m)
|
(£255.2m)
|
The Group enacted the second
one-year extension to its Group facility and currently has access
to a combined term loan and RCF with total commitments of £1,432.5m
until November 2025. This reduces to 1,372.5m from December 2025
until maturity in November 2026.
The Group continues to operate
comfortably within its banking facilities and covenants and the
Board remains comfortable with the Group's available
headroom.
SUMMARY OF CASH FLOW
|
28 April
2024
|
30 April
2023 (1)
|
Operating cash inflow before changes in working
capital
|
£834.6m
|
£875.6m
|
(Increase)/decrease in
receivables
|
(£47.4m)
|
£95.8m
|
Decrease/(increase) in
inventories
|
£114.1m
|
(£71.6m)
|
Decrease in payables
|
(£42.6m)
|
(£132.4m)
|
Decrease in provisions
|
(£47.5m)
|
(£132.5m)
|
Cash inflows from operating activities
|
£811.2m
|
£634.9m
|
Income taxes paid
|
(£129.0m)
|
(£93.2m)
|
Net cash inflows from operating activities
|
£682.2m
|
£541.7m
|
Lease payments
|
(£162.8m)
|
(£140.7m)
|
Net finance costs paid
|
(£35.6m)
|
(£30.4m)
|
Net capital expenditure (including
sale & leasebacks)
|
(£211.3m)
|
(£214.5m)
|
Net proceeds from acquisition and
disposal of subsidiary undertakings
|
(£35.9m)
|
£18.5m
|
Purchase of listed investments,
net of disposal proceeds
|
(£249.3m)
|
(£70.9m)
|
Proceeds in relation to equity
derivatives
|
£58.0m
|
£66.2m
|
Decrease in deposits relating to
equity derivatives
|
£51.1m
|
£53.8m
|
Investment income
|
£2.3m
|
£3.0m
|
Exchange movement on cash
balances
|
(£3.1m)
|
£3.6m
|
Purchase of own shares
|
(£126.4m)
|
(£155.3m)
|
Dividends paid to non-controlling
interests
|
-
|
(£0.7m)
|
Movement in net debt
|
(£30.8m)
|
£74.3m
|
1) Restated to reflect the change in accounting policy regarding
the valuation of investment property. Please refer to note 1 of the
financial information for details.
SUMMARY OF CONSOLIDATED BALANCE SHEET
|
28 April
2024
|
30 April
2023 (1)
|
Property, plant &
equipment
|
£962.6m
|
£1,132.0m
|
Investment properties
|
£350.5m
|
£160.0m
|
Long-term financial
assets
|
£495.4m
|
£289.6m
|
Intangible assets
|
£42.2m
|
£24.1m
|
Inventories
|
£1,355.3m
|
£1,464.9m
|
Trade & other
receivables
|
£674.9m
|
£720.1m
|
Trade & other
payables
|
(£683.9m)
|
(£711.9m)
|
Provisions
|
(£259.0m)
|
(£306.5m)
|
Net debt (excluding securitisation
borrowings)
|
(£320.8m)
|
(£255.2m)
|
Securitisation
borrowings
|
(£126.8m)
|
(£161.6m)
|
Lease liabilities
|
(£646.3m)
|
(£679.9m)
|
Other
|
£28.9m
|
(£7.4m)
|
Net assets
|
£1,873.0m
|
£1,668.2m
|
1) Restated to reflect the change in accounting policy regarding
the valuation of investment property. Please refer to note 1 of the
financial information for details.
The decrease within property,
plant and equipment from 30 April 2023 is largely due to net
additions offset by depreciation and the transfer of three
properties with a net book value of approximately £79.4m to
investment property following a change of use in the period. The
increase in investment property reflects this transfer,
acquisitions in the year (including the Junction 32 retail park in
Castleford, Yorkshire) and fair value gains of £11.5m.
The year-on-year increase within
intangible assets primarily reflects the purchase of the Matches
intellectual property and brand names for £20m offset by the
amortisation of brands allocated to the Everlast cash generating
unit ("CGU").
Long-term financial assets have
increased since 30 April 2023 due to the business making
significant strategic investments including in AO World plc, ASOS
plc and Boohoo plc during the period.
Gross inventory has reduced by
£138.2m (8.2%) year-on-year. This reflects the increased the
efficiency of our warehouse and inventory handling processes
following the virtual completion of the automation project, as well
as the rationalisation of inventory from the businesses acquired
from JD sports fashion plc in the second half of FY23.
Trade and other receivables
include £139.0m relating to deposits in respect
of derivative financial instruments (30 April 2023: £190.1m) and
the Frasers Group Financial Services consumer credit receivables
portfolio with a carrying value of £206.2m (30 April 2023:
£225.9m).
Trade and other payables have
reduced by £28.0m from £711.9m to £683.9m reflecting the timing of
supplier payments around the prior year end due to the
53rd week.
Provisions have reduced by £47.5m
from £306.5m to £259.0m reflecting the utilisation and partial
release of property related provisions due to the Group's strong
trading performance, combined with the rationalisation of
loss-making stores and future forecasts outweighing our downside
assumptions.
Included within other, the closing
corporation tax creditor at 28 April 2024 is approximately £94.4m
(FY23: £102.6m) and net deferred tax assets of £82.1m (FY23:
£66.4m) have been recognised.
Chris Wootton
Chief Financial Officer
17 July 2024
KEY PERFORMANCE INDICATORS
The Board manages the Group's performance by reviewing a number of
key performance indicators (KPIs). The table below summarises the
Group's KPIs.
|
52 weeks
ended
28 April
2024
|
53 weeks
ended
30 April
2023
(1)
|
Group revenue
|
£5,537.7m
|
£5,586.0m
|
Reported PBT
|
£507.0m
|
£638.0m
|
Adjusted PBT
(2)
|
£544.8m
|
£481.8m
|
Cash inflow from operating
activities before working capital
|
£834.6m
|
£875.6m
|
Net assets
|
£1,873.0m
|
£1,668.2m
|
NON-FINANCIAL KPIs
|
|
|
Number of retail stores
|
1,551
|
1,630
|
Workforce turnover
|
31.0%
|
32%*
|
Electricity consumption on like
for like stores improvement vs FY20
|
24.8%
|
15.9%
|
(1) Restated to reflect the
Group's revised segmental reporting, the reclassification of rental
income and the change in accounting policy regarding the valuation
of investment property. Please refer to note 1 of the financial
information for details.
(2) This is an Alternative
Performance Measure. APBT is reconciled to the equivalent GAAP
measure in note 3 to the financial information. Adjusted EPS is
discussed in note 10 to the financial information.
The Directors have adopted
Alternative Performance Measures (APM's). APMs should be considered
in addition to UK-Adopted International Accounting Standards ("UK
IAS") measures. The Directors believe that
Adjusted profit before tax ("APBT") provides further useful
information for shareholders on the underlying performance of the
Group in addition to the reported numbers, and is consistent with
how business performance is measured internally. They are not
recognised profit measures under UK IAS and may not be directly
comparable with 'adjusted' or 'alternative' profit measures used by
other companies.
Adjusted PBT is profit before tax
excluding the effects of exceptional items, realised foreign
exchange, fair value adjustments to derivative financial
instruments included within finance income/costs, fair value
gains/losses and profit on disposal of equity derivatives, and
share schemes. This measure has been reviewed by the Audit
Committee which has appropriately challenged management on the
presentation and the adjusting items included in this
APM.
Group Revenue
The Board considers that this
measurement is a key indicator of the Group's growth.
Reported Profit Before Tax
Reported PBT shows both the
Group's trading and operational efficiency, as well as the effects
on the Group of external factors as shown in the fair value
movements in Strategic investments and FX.
Adjusted Profit Before Tax
Adjusted PBT shows how well the
Group is managing its ongoing trading performance and controllable
costs and therefore the overall performance of the
Group.
Cash Inflow from Operating Activities Before Working
Capital
Cash inflow from operating
activities before working capital is considered an important
indicator for the Group of the cash generated and available for
investment in the Elevation strategy.
Net Assets
The Board considers that this
measurement is a key indicator of the Group's financial position
and health.
Number of Retail Stores
The Board considers that this
measure is an indicator of the Group's growth. The Group's
Elevation strategy is replacing older stores and often this can
result in the closure of two or three stores, to be replaced by one
larger new generation store.
Workforce Turnover
The Board considers that this
measure is a key indicator of the contentment of our people We have
adjusted the measure this year to report only non-redundancy
related staff turnover in order to drive a focus on the parts of
our business that have a higher attrition. *The prior period figure
has been restated on an equivalent basis (FY23: reported figure
44.5%).
Like for Like electricity consumption
This measure links to our targets
in the TCFD report around the installation of LED lighting,
building management services, and voltage optimisation. This
measure allows the board to determine the effectiveness of these
projects in reducing the Group's energy consumption. Like for like
stores includes stores in Great Britain, above a de minimis
consumption, and that were open from 2019 onwards.
FINANCIAL INFORMATION
CONSOLIDATED INCOME
STATEMENT
For the 52 weeks ended 28 April 2024
|
|
Total
|
Total
|
|
|
52 weeks ended 28 April
2024
|
53 weeks ended 30 April
2023
(restated)1
|
|
Note
|
|
|
(£'m)
|
(£'m)
|
|
|
|
|
CONTINUING OPERATIONS
|
|
|
|
Revenue
|
|
5,426.7
|
5,461.0
|
Credit account interest
|
|
111.0
|
125.0
|
Total revenue (including credit account
interest)
|
3
|
5,537.7
|
5,586.0
|
Cost of sales
|
|
(3,121.9)
|
(3,175.5)
|
Impairment losses on credit customer
receivables
|
16
|
(20.6)
|
(15.5)
|
Gross profit
|
3
|
2,395.2
|
2,395.0
|
Selling, distribution and
administrative expenses
|
|
(1,886.0)
|
(1,957.8)
|
Other operating income
|
|
10.9
|
11.7
|
Property related
impairments
|
12,13
|
(14.5)
|
(99.6)
|
Exceptional items
|
4
|
-
|
97.1
|
Profit on sale of
properties
|
|
3.5
|
95.4
|
Fair value adjustment to investment
properties
|
13
|
11.5
|
(6.5)
|
Operating profit
|
3
|
520.6
|
535.3
|
Gain on sale of
subsidiaries
|
11
|
25.0
|
17.6
|
Investment income
|
5
|
78.4
|
112.6
|
Investment costs
|
6
|
(68.9)
|
(4.6)
|
Finance income
|
7
|
43.4
|
46.1
|
Finance costs
|
8
|
(91.5)
|
(69.0)
|
Profit before taxation
|
3
|
507.0
|
638.0
|
Taxation
|
9
|
(107.9)
|
(159.3)
|
Profit after taxation from continuing
operations
|
|
399.1
|
478.7
|
|
|
|
|
DISCONTINUED OPERATIONS
|
|
|
|
Result from discontinued operation,
net of tax
|
11
|
(12.5)
|
26.3
|
Profit for the period
|
|
386.6
|
505.0
|
|
|
|
|
ATTRIBUTABLE TO:
|
|
|
|
Equity holders of the
Group
|
|
380.8
|
491.7
|
Non-controlling interests
|
|
5.8
|
13.3
|
Profit for the period
|
|
386.6
|
505.0
|
|
|
|
|
|
|
Pence per
share
|
Pence per
share
|
Basic earnings per share -
Continuing operations
|
10
|
89.7
|
101.2
|
Basic earnings per share -
Discontinued operations
|
10
|
(2.9)
|
5.7
|
Basic earnings per share -
Total
|
10
|
86.8
|
106.9
|
|
|
|
|
Diluted earnings per share -
Continuing operations
|
10
|
89.7
|
101.2
|
Diluted earnings per share -
Discontinued operations
|
10
|
(2.9)
|
5.7
|
Diluted earnings per share -
Total
|
10
|
86.8
|
106.9
|
(1)
Restated to reflect the change in presentation of
discontinued operations into a single line, accounting policy
regarding the valuation of investment property and reclassification
of rental income. Please refer to note 1 for further
details.
Discontinued operations relate to
MATCHES in the current year and the Group's US retail businesses
which were disposed of in the prior year. See note 11.
CONSOLIDATED STATEMENT
OF COMPREHENSIVE
INCOME
For the 52 weeks ended 28 April 2024
|
|
52 weeks
ended
|
53 weeks
ended
|
|
Note
|
28 April
2024
|
30 April
2023
(restated)1
|
|
|
(£'m)
|
(£'m)
|
Profit for the period
|
|
386.6
|
505.0
|
|
|
|
|
OTHER COMPREHENSIVE (LOSS)/INCOME
|
|
|
|
ITEMS THAT WILL NOT BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR
LOSS
|
|
|
|
Fair value movement on long-term
financial assets
|
|
(43.7)
|
9.9
|
Remeasurements of defined benefit
pension scheme
|
|
0.4
|
(0.5)
|
Fair value adjustment in respect of
properties transferred to investment property
|
|
1.2
|
-
|
|
|
|
|
ITEMS THAT MAY BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR
LOSS
|
|
|
|
Exchange differences on translation
of foreign operations
|
|
(21.7)
|
13.4
|
Foreign exchange impact of disposal
of discontinued operations
|
|
-
|
(1.6)
|
Fair value movement on hedged
contracts - recognised in the period
|
|
25.5
|
6.5
|
Fair value movement on hedged
contracts - recognised time value of options
|
|
(0.7)
|
0.7
|
Fair value movement on hedged
contracts - reclassified and reported in sales
|
|
(6.1)
|
(24.6)
|
Fair value movement on hedged
contracts - reclassified and reported in inventory/cost of
sales
|
|
(8.1)
|
(38.5)
|
Fair value movement on hedged
contracts - taxation taken to reserves
|
|
(2.9)
|
14.6
|
|
|
|
|
OTHER COMPREHENSIVE LOSS FOR THE
PERIOD, NET OF TAX
|
|
(56.1)
|
(20.1)
|
|
|
|
|
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD
|
|
330.5
|
484.9
|
|
|
|
|
Continuing operations
|
|
343.0
|
460.2
|
Discontinued operations
|
|
(12.5)
|
24.7
|
|
|
330.5
|
484.9
|
|
|
|
|
ATTRIBUTABLE TO:
|
|
|
|
Equity holders of the
Group
|
|
324.7
|
471.6
|
Non-controlling interest
|
|
5.8
|
13.3
|
|
|
330.5
|
484.9
|
(1)
Restated to reflect the change in accounting
policy regarding the valuation of investment property and
reclassification of rental income. Please refer to note 1 for
further details.
CONSOLIDATED BALANCE SHEET
Company number: 06035106
As at 28 April 2024
|
Note
|
28 April
2024
|
30 April
2023
(restated)1
|
24 April
2022
(restated)1
|
|
|
(£'m)
|
(£'m)
|
(£'m)
|
ASSETS - NON CURRENT
|
|
|
|
|
Property, plant and
equipment
|
12
|
962.6
|
1,132.0
|
1,011.0
|
Investment properties
|
13
|
350.5
|
160.0
|
95.5
|
Intangible assets
|
14
|
42.2
|
24.1
|
120.6
|
Long-term financial
assets
|
|
495.4
|
289.6
|
206.6
|
Investment in associate
undertakings
|
|
18.0
|
16.9
|
-
|
Retirement benefit
surplus
|
|
0.6
|
0.8
|
2.2
|
Deferred tax assets
|
|
109.6
|
82.1
|
100.8
|
|
|
1,978.9
|
1,705.5
|
1,536.7
|
ASSETS - CURRENT
|
|
|
|
|
Inventories
|
|
1,355.3
|
1,464.9
|
1,277.6
|
Trade and other
receivables
|
16
|
674.9
|
720.1
|
841.4
|
Derivative financial
assets
|
|
87.2
|
79.3
|
116.5
|
Cash and cash equivalents
|
|
358.6
|
332.9
|
336.8
|
|
|
2,476.0
|
2,597.2
|
2,572.3
|
Assets in disposal groups classified as held for
sale
|
|
-
|
-
|
40.0
|
TOTAL ASSETS
|
|
4,454.9
|
4,302.7
|
4,149.0
|
|
|
|
|
|
LIABILITIES - NON CURRENT
|
|
|
|
|
Lease liabilities
|
|
(533.8)
|
(560.3)
|
(503.6)
|
Borrowings
|
17
|
(806.2)
|
(749.7)
|
(827.9)
|
Retirement benefit
obligations
|
|
(1.8)
|
(1.7)
|
(1.6)
|
Deferred tax liabilities
|
|
(27.5)
|
(15.7)
|
(40.4)
|
Provisions
|
18
|
(247.8)
|
(290.2)
|
(433.0)
|
|
|
(1,617.1)
|
(1,617.6)
|
(1,806.5)
|
LIABILITIES - CURRENT
|
|
|
|
|
Derivative financial
liabilities
|
|
(62.8)
|
(66.5)
|
(107.2)
|
Trade and other payables
|
|
(683.9)
|
(711.9)
|
(729.8)
|
Lease liabilities
|
|
(112.5)
|
(119.6)
|
(117.0)
|
Provisions
|
18
|
(11.2)
|
(16.3)
|
-
|
Current tax liabilities
|
|
(94.4)
|
(102.6)
|
(50.9)
|
|
|
(964.8)
|
(1,016.9)
|
(1,004.9)
|
Liabilities in disposal groups classified as held for
sale
|
|
-
|
-
|
(22.7)
|
TOTAL LIABILITIES
|
|
(2,581.9)
|
(2,634.5)
|
(2,834.1)
|
|
|
|
|
|
NET
ASSETS
|
|
1,873.0
|
1,668.2
|
1,314.9
|
|
|
|
|
|
EQUITY
|
|
|
|
|
Share capital
|
|
64.1
|
64.1
|
64.1
|
Share premium
|
|
874.3
|
874.3
|
874.3
|
Treasury shares reserve
|
|
(770.6)
|
(644.2)
|
(488.9)
|
Permanent contribution to
capital
|
|
0.1
|
0.1
|
0.1
|
Capital redemption
reserve
|
|
8.0
|
8.0
|
8.0
|
Foreign currency translation
reserve
|
|
25.7
|
47.4
|
35.6
|
Reverse combination
reserve
|
|
(987.3)
|
(987.3)
|
(987.3)
|
Own share reserve
|
|
(66.8)
|
(66.8)
|
(66.8)
|
Hedging reserve
|
|
21.7
|
14.0
|
55.3
|
Share based payment
reserve
|
|
51.4
|
33.1
|
14.1
|
Revaluation reserve
|
|
1.2
|
-
|
-
|
Retained earnings
|
|
2,623.0
|
2,285.5
|
1,784.4
|
Issued capital and reserves attributable to owners of the
parent
|
|
1,844.8
|
1,628.2
|
1,292.9
|
Non-controlling interests
|
|
28.2
|
40.0
|
22.0
|
TOTAL EQUITY
|
|
1,873.0
|
1,668.2
|
1,314.9
|
1)
Restated to reflect the change in accounting policy regarding the
valuation of investment property and reclassification of rental
income. Please refer to note 1 for further details.
The Group's Financial Statements
were approved by the Board and authorised for issue on 17 July 2024
and were signed on its behalf by:
Chris Wootton
Chief Financial Officer
CONSOLIDATED CASH FLOW STATEMENT
For the 52 weeks ended 28 April 2024
|
|
52 weeks
ended
|
53 weeks
ended
|
|
Note
|
28 April
2024
|
30 April
2023
(restated)1
|
|
|
(£'m)
|
(£'m)
|
Profit before income tax from:
|
|
|
|
Continuing operations
|
|
507.0
|
638.0
|
Discontinued operation
|
|
(12.5)
|
26.4
|
Profit before taxation including discontinued
operations
|
|
494.5
|
664.4
|
Net finance costs
|
|
49.6
|
23.0
|
Net investment income
|
|
(9.5)
|
(108.0)
|
Gain on disposal of
subsidiaries
|
|
(20.9)
|
(43.9)
|
Depreciation of property, plant and
equipment
|
|
282.8
|
262.3
|
Amortisation of intangible
assets
|
|
1.8
|
6.9
|
Net impairment of tangible and
intangible assets and investment properties
|
|
21.4
|
239.7
|
Loss/(gain) on
modification/remeasurement of lease liabilities
|
|
6.6
|
(26.8)
|
Profit on disposal of property,
plant and equipment
|
|
(3.5)
|
(95.4)
|
Fair value adjustments in respect of
investment property
|
|
(11.5)
|
6.5
|
Fair value gain on recognition of
associated undertaking
|
|
-
|
(16.9)
|
Gain on bargain purchase
|
|
(0.7)
|
(56.1)
|
Employee bonus scheme
charge
|
|
23.4
|
19.0
|
Pension contributions less income
statement charge
|
|
0.6
|
0.9
|
Operating cash inflow before changes in working
capital
|
|
834.6
|
875.6
|
(Increase)/decrease in
receivables
|
|
(47.4)
|
95.8
|
Decrease/(increase) in
inventories
|
|
114.1
|
(71.6)
|
Decrease in payables
|
|
(42.6)
|
(132.4)
|
Decrease in provisions
|
|
(47.5)
|
(132.5)
|
Cash inflows from operating activities
|
|
811.2
|
634.9
|
Income taxes paid
|
|
(129.0)
|
(93.2)
|
Net
cash inflows from operating activities
|
|
682.2
|
541.7
|
Proceeds on disposal of property,
plant and equipment and investment property
|
|
55.9
|
14.8
|
Proceeds from sale and leaseback
transactions
|
|
-
|
185.6
|
Proceeds on disposal of listed
investments
|
|
133.3
|
172.4
|
Proceeds in relation to equity
derivatives
|
|
58.0
|
66.2
|
Disposal of subsidiary
undertakings
|
|
25.0
|
46.5
|
Purchase of subsidiaries, net of
cash acquired
|
|
(60.9)
|
(28.0)
|
Purchase of property, plant and
equipment, intangible assets and investment property
|
|
(267.2)
|
(469.4)
|
Purchase of listed
investments
|
|
(382.6)
|
(243.3)
|
Decrease in deposits relating to
equity derivatives
|
|
51.1
|
53.8
|
Investment income
received
|
|
2.3
|
3.0
|
Finance income received
|
|
29.3
|
20.1
|
Net
cash outflows from investing activities
|
|
(355.8)
|
(178.3)
|
Lease payments
|
|
(162.8)
|
(140.7)
|
Finance costs paid
|
|
(64.9)
|
(50.5)
|
Borrowings drawn down
|
|
482.1
|
616.8
|
Borrowings repaid
|
|
(425.6)
|
(695.0)
|
Proceeds from sale and leaseback
transactions
|
|
-
|
54.5
|
Dividends paid to non-controlling
interests
|
|
-
|
(0.7)
|
Purchase of own shares
|
|
(126.4)
|
(155.3)
|
Net
cash outflows from financing activities
|
|
(297.6)
|
(370.9)
|
Net
increase/(decrease) in cash and cash equivalents including
overdrafts
|
|
28.8
|
(7.5)
|
Exchange movement on cash
balances
|
|
(3.1)
|
3.6
|
Cash and cash equivalents including overdrafts at beginning
of period
|
332.9
|
336.8
|
Cash and cash equivalents including overdrafts at the period
end
|
|
358.6
|
332.9
|
(1)
Restated to reflect the change in accounting
policy regarding the valuation of investment property. Please refer
to note 1 for further details.
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
For the 52 weeks ended 28 April 2024
|
Share
capital
|
Share
premium(1)
|
Treasury
shares
|
Share- based payment
reserve
|
Foreign currency translation
reserve
|
Own share
reserve
|
Retained
earnings
|
Other(2)
|
Total attributable to owners
of parent
|
Non-controlling
interests
|
Total
|
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
At
24 April 2022 (previously presented)
|
64.1
|
874.3
|
(488.9)
|
14.1
|
35.6
|
(66.8)
|
1,778.1
|
(923.9)
|
1,286.6
|
22.0
|
1,308.6
|
Restatement (see note 1)
|
-
|
-
|
-
|
-
|
-
|
-
|
6.3
|
-
|
6.3
|
-
|
6.3
|
At
24 April 2022 (restated)
|
64.1
|
874.3
|
(488.9)
|
14.1
|
35.6
|
(66.8)
|
1,784.4
|
(923.9)
|
1,292.9
|
22.0
|
1,314.9
|
Acquisitions
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
4.0
|
4.0
|
Share scheme
|
-
|
-
|
-
|
19.0
|
-
|
-
|
-
|
-
|
19.0
|
-
|
19.0
|
Purchase of own shares
|
-
|
-
|
(155.3)
|
-
|
-
|
-
|
-
|
-
|
(155.3)
|
-
|
(155.3)
|
Dividends paid to non-controlling
interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
0.7
|
0.7
|
Transactions with owners in their capacity as
owners
|
-
|
-
|
(155.3)
|
19.0
|
-
|
-
|
-
|
-
|
(136.3)
|
4.7
|
(131.6)
|
Profit for the financial period
(restated)
|
-
|
-
|
-
|
-
|
-
|
-
|
491.7
|
-
|
491.7
|
13.3
|
505.0
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
Cashflow hedges - recognised in the
period
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
6.5
|
6.5
|
-
|
6.5
|
Cashflow hedges - recognised time
value of options
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
0.7
|
0.7
|
-
|
0.7
|
Cashflow hedges - reclassified and
reported in sales
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(24.6)
|
(24.6)
|
-
|
(24.6)
|
Cashflow hedges - reclassified and
reported in inventory/cost of sales
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(38.5)
|
(38.5)
|
-
|
(38.5)
|
Cashflow hedges -
taxation
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
14.6
|
14.6
|
-
|
14.6
|
Fair value adjustment in respect of
long-term financial assets - recognised
|
-
|
-
|
-
|
-
|
-
|
-
|
9.9
|
-
|
9.9
|
-
|
9.9
|
Remeasurements of defined benefit
pension scheme
|
-
|
-
|
-
|
-
|
-
|
-
|
(0.5)
|
-
|
(0.5)
|
-
|
(0.5)
|
Foreign exchange impact of disposal
of discontinued operations
|
-
|
-
|
-
|
-
|
(1.6)
|
-
|
-
|
-
|
(1.6)
|
-
|
(1.6)
|
Translation differences -
Group
|
-
|
-
|
-
|
-
|
13.4
|
-
|
-
|
-
|
13.4
|
-
|
13.4
|
Total comprehensive income for the period
|
-
|
-
|
-
|
-
|
11.8
|
-
|
501.1
|
(41.3)
|
471.6
|
13.3
|
484.9
|
|
|
|
|
|
|
|
|
|
|
|
|
At
30 April 2023 (restated)
|
64.1
|
874.3
|
(644.2)
|
33.1
|
47.4
|
(66.8)
|
2,285.5
|
(965.2)
|
1,628.2
|
40.0
|
1,668.2
|
Acquisitions(3)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(17.6)
|
(17.6)
|
Share scheme
|
-
|
-
|
-
|
18.3
|
-
|
-
|
-
|
-
|
18.3
|
-
|
18.3
|
Purchase of own shares
|
-
|
-
|
(126.4)
|
-
|
-
|
-
|
-
|
-
|
(126.4)
|
-
|
(126.4)
|
Transactions with owners in their capacity as
owners
|
-
|
-
|
(126.4)
|
18.3
|
-
|
-
|
-
|
-
|
(108.1)
|
(17.6)
|
(125.7)
|
Profit for the financial
period
|
-
|
-
|
-
|
-
|
-
|
-
|
380.8
|
-
|
380.8
|
5.8
|
386.6
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
Cashflow hedges - recognised in the
period
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
25.5
|
25.5
|
-
|
25.5
|
Cashflow hedges - recognised time
value of options
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(0.7)
|
(0.7)
|
-
|
(0.7)
|
Cashflow hedges - reclassified and
reported in sales
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(6.1)
|
(6.1)
|
-
|
(6.1)
|
Cashflow hedges - reclassified and
reported in inventory/cost of sales
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(8.1)
|
(8.1)
|
-
|
(8.1)
|
Cashflow hedges -
taxation
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(2.9)
|
(2.9)
|
-
|
(2.9)
|
Fair value adjustment in respect of
long-term financial assets
|
-
|
-
|
-
|
-
|
-
|
-
|
(43.7)
|
-
|
(43.7)
|
-
|
(43.7)
|
Fair value adjustment in respect of
investment properties
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1.2
|
1.2
|
-
|
1.2
|
Remeasurements of defined benefit
pension scheme
|
-
|
-
|
-
|
-
|
-
|
-
|
0.4
|
-
|
0.4
|
-
|
0.4
|
Translation differences -
Group
|
-
|
-
|
-
|
-
|
(21.7)
|
-
|
-
|
-
|
(21.7)
|
-
|
(21.7)
|
Total comprehensive income for the period
|
-
|
-
|
-
|
-
|
(21.7)
|
-
|
337.5
|
8.9
|
324.7
|
5.8
|
330.5
|
At
28 April 2024
|
64.1
|
874.3
|
(770.6)
|
51.4
|
25.7
|
(66.8)
|
2,623.0
|
(956.3)
|
1,844.8
|
28.2
|
1,873.0
|
(1)
The share premium account is used to record the
excess proceeds over nominal value on the issue of
shares.
(2)
Other reserves comprise permanent contribution to
capital, capital redemption reserve, reverse combination reserve,
the hedging reserve and the revaluation reserve. All movements in
the period related to the hedging reserve . Equity as at 24 April
2022 and the results for the financial period ended 30 April 2023
have been restated to reflect the change in accounting policy
regarding the valuation of investment property and reclassification
of rental income. Please refer to note 1 for further
details.
(3)
In the current period, the Group increased its
ownership in Sports Direct Malaysia.
1. ACCOUNTING POLICIES
Frasers Group Plc (Company number:
06035106) is a company incorporated and domiciled in the United
Kingdom, its shares are listed on the London Stock Exchange. The
registered office is Unit A, Brook Park East, Shirebrook, NG20 8RY.
The principal activities and structure of the Group can be found in
the Directors' Report and the 'Our Business' section of the Annual
Report.
BASIS OF PREPARATION
Whilst the financial information
included in this Preliminary Announcement has been prepared on the
basis of UK-adopted International Accounting standards, this
announcement does not itself contain sufficient information to
comply with UK-adopted International Accounting
Standards.
The financial information set out
in this Preliminary Announcement does not constitute the Group's
Consolidated Financial Statements for the period ended 28 April
2024 but is derived from those Financial Statements which were
approved by the Board of Directors on 17 July 2024. The auditor,
RSM UK Audit LLP, has reported on the Group's Consolidated
Financial Statements and the report was unqualified and did not
contain a statement under section 498 (2) or 498 (3) of the
Companies Act 2006.
The statutory financial statements
for the period ended 28 April 2024 have not yet been delivered to
the Registrar of Companies and will be delivered following the
Company's Annual General Meeting.
The Group financial statements
have been prepared and approved by the Directors in accordance with
UK-adopted International Accounting Standards.
The Group's accounting policies
are set out in the 2023 Annual Report and Accounts and have been
applied consistently in 2024 except as noted below.
Going Concern
The Group's business activities,
together with the factors likely to affect its future development,
performance and position are set out in the Chief Executive's
Report and Business Review section above.
The financial position of the Group,
its cash flows, liquidity position and borrowing facilities are
described in the Financial Review. In addition, the financial
statements include the Group's objectives, policies and processes
for managing its capital, its financial risk management objectives,
details of its financial instruments and hedging activities, and
its exposures to credit risk and liquidity risk.
The Group is profitable, highly cash
generative and has considerable financial resources. The Group is
able to operate within its banking facilities and covenants, which
run until November 2026, and is well placed to take advantage of
strategic opportunities as they arise. As a consequence, the
Directors believe that the Group is well placed to manage its
business risks successfully despite the continued uncertain
economic outlook.
Management have assessed the level
of trading and have forecast and projected a conservative base case
and also a number of even more conservative scenarios, including
taking into account the Group's open positions in relation to
strategic investment options. These forecasts and projections show
that the Group will be able to operate within the level of the
current facility and its covenant requirements (being interest
cover and net debt to EBITDA ratios). Management also has a number
of mitigating actions which could be taken if required such as
selling strategic investments at a discount to the market price if
a significant share price fall occurred, reducing capital
expenditure, putting on hold discretionary spend, liquidating
certain assets on the Balance Sheet and paying down the Group
Financing Facility. See the Viability Statement in the Annual
Report for further details.
Having thoroughly reviewed the
performance of the Group and Parent Company and having made
suitable enquiries, the Directors are confident that the Group and
Parent Company have adequate resources to remain in operational
existence for the foreseeable future which is at least 12 months
from the date of these financial statements. Trading would need to
fall significantly below levels observed during the pandemic to
require mitigating actions or a relaxation of covenants. On this
basis, the Directors continue to adopt the going concern basis for
the preparation of the Annual Report and financial statements which
is a period of at least 12 months from the date of approval of
these financial statements.
New Accounting Standards, Interpretations and Amendments
Adopted By The Group
The Group has not early adopted any
new accounting standard, interpretation or amendment that has been
issued but is not effective. The Group has applied for the first
time the following new standards:
· IFRS
17 - Insurance contracts
· Disclosure on Accounting Policies - Amendments to IAS 1 and
IFRS Practice Statement 2
· Definition of Accounting Estimates - Amendments to IAS
8
· International Tax Reform - Pillar Two Model Rules (Amendments
to IAS 12) - application of the exception and disclosure of that
fact
· International Tax Reform - Pillar Two Model Rules (Amendments
to IAS 12) - other disclosure requirements
· Deferred Tax relating to assets and liabilities arising from
a single transaction - Amendments to IAS 12.
By adopting the above, there has
been no material impact on the Financial Statements.
International Financial Reporting Standards ("Standards") In
Issue But Not Yet Effective
At the date of authorisation of
these consolidated Financial Statements, there are no standards in
issue from the International Accounting Standards Board ("IASB") or
International Financial Reporting Interpretations Committee
("IFRIC") which are effective for annual accounting periods
beginning on or after 28 April 2024 that will have a material
impact on these Financial Statements.
Restated financial information
During the period the Group made
several changes including presentation of discontinued operations,
operating segments, classification of rental income and changing
accounting policy to the fair value model for investment
properties. For comparative purposes, the results for the 53-week
period ended 30 April 2023, and the restated balance sheet as at 24
April 2022 have been presented showing the new basis of
presentation.
1) Change to classification of rental
income
As a result of the changes in
operating segments, see note 3, management has concluded that is
more appropriate to disclose rental income received from third
parties within revenue from the property segment rather than in
other operating income in various retail segments as was previously
disclosed.
The impact of this change is to
increase reported revenue in the 53-week period ended 30 April 2023
by £29.3m and reducing the amounts reported in other operating
income by an equivalent amount.
The changes to our segmental
analysis and the reclassification of rental income have no impact
on the Group's profit before tax as previously reported for
FY23.
2) Change in accounting policy in
respect of investment properties
Following the creation of the
Property operating segment, management conducted a review of the
accounting treatment of investment properties (properties held to
earn rentals or for capital appreciation or both, rather than for
use in operations) and concluded that it would be more appropriate
to adopt the fair value model set out in paragraphs 33-35 of IAS 40
Investment Property for remeasuring the value of these properties,
rather than on the cost model set out in paragraph 56 of the
standard, which was previously used. As a result, these assets will
not be depreciated but held at fair value with changes in fair
value being recorded in the income statement in the period in which
they occur.
Management has considered this
voluntary change in accounting policy in accordance with IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors and
concluded that the fair value model results in the financial
statements providing reliable and more relevant information. The
changes have been applied retrospectively and as such prior period
figures have been restated on an equivalent basis to allow for
meaningful comparison.
The impact of this change in
accounting policy is to increase the carrying value of the Group's
investment properties held on 25 April 2022 by £6.3m, with a
corresponding adjustment being made the Group's opening retained
earnings at this date. The carrying value of these assets as at 24
April 2023 increased by £10.0m vs. the amount previously reported,
resulting in an increase to profit before tax for the 53-week
period ended 2023 of £3.7m and an increase in basic and diluted
earnings per share of 0.8p.
This change in accounting policy
does not have a material impact on the reported tax charge in the
comparative period, nor on the Group's consolidated cash flow
statement.
The impact on APBT for the 53-week
period ended 30 April 2023 is summarised as follows:
|
FY23
|
Reported APBT
|
£478.1m
|
Impact of change in accounting
policy
|
£3.7m
|
Revised APBT
|
£481.8m
|
3) Change in presentation regarding
discontinued operations
Management has voluntarily elected
to change the presentation of discontinued operations to disclose
the impact as a single line in the statement of profit and loss in
line with IFRS 5.33.
Impact on the Consolidated Income Statement and Comprehensive
Income
53-week period ended 30 April 2023
|
Amounts previously
reported
|
1) Rental
income
|
2) Investment
property
|
3) Discontinued
operation
|
As
restated
|
|
|
|
|
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
|
|
CONTINUING OPERATIONS
|
|
|
|
|
|
|
|
Revenue
|
5,449.8
|
19.7
|
-
|
(8.5)
|
5,461.0
|
|
|
Credit account interest
|
115.4
|
9.6
|
-
|
-
|
125.0
|
|
|
Total revenue (including credit account
interest)
|
5,565.2
|
29.3
|
-
|
(8.5)
|
5,586.0
|
|
|
Cost of sales
|
(3,179.9)
|
-
|
-
|
4.4
|
(3,175.5)
|
|
|
Impairment losses on credit customer
receivables
|
(15.5)
|
-
|
-
|
-
|
(15.5)
|
|
|
Gross profit
|
2,369.8
|
29.3
|
-
|
(4.1)
|
2,395.0
|
|
|
Selling, distribution and
administrative expenses
|
(1,972.0)
|
-
|
10.2
|
4.0
|
(1,957.8)
|
|
|
Other operating income
|
41.1
|
(29.3)
|
-
|
(0.1)
|
11.7
|
|
|
Property related
impairments
|
(99.6)
|
-
|
-
|
-
|
(99.6)
|
|
|
Exceptional items
|
97.1
|
-
|
-
|
-
|
97.1
|
|
|
Profit on sale of
properties
|
95.4
|
-
|
-
|
-
|
95.4
|
|
|
Fair value adjustment to investment
properties
|
-
|
-
|
(6.5)
|
-
|
(6.5)
|
|
|
Operating profit
|
531.8
|
-
|
3.7
|
(0.2)
|
535.3
|
|
|
Gain on sale of
subsidiaries
|
43.9
|
-
|
-
|
(26.3)
|
17.6
|
|
|
Investment income
|
112.6
|
-
|
-
|
-
|
112.6
|
|
|
Investment costs
|
(4.6)
|
-
|
-
|
-
|
(4.6)
|
|
|
Finance income
|
46.1
|
-
|
-
|
-
|
46.1
|
|
|
Finance costs
|
(69.1)
|
-
|
-
|
0.1
|
(69.0)
|
|
|
Profit before taxation
|
660.7
|
-
|
3.7
|
(26.4)
|
638.0
|
|
|
Taxation
|
(159.4)
|
-
|
-
|
0.1
|
(159.3)
|
|
|
Profit after taxation from continuing
operations
|
501.3
|
-
|
3.7
|
(26.3)
|
478.7
|
|
|
|
|
|
|
|
|
|
|
DISCONTINUED OPERATIONS
|
|
|
|
|
|
|
|
Result from discontinued
operation
|
-
|
-
|
-
|
26.3
|
26.3
|
|
|
Profit for the period
|
501.3
|
-
|
3.7
|
-
|
505.0
|
|
|
|
|
|
|
|
|
|
|
ATTRIBUTABLE TO:
|
|
|
|
|
|
|
|
Equity holders of the
Group
|
488.0
|
-
|
3.7
|
-
|
491.7
|
|
|
Non-controlling interests
|
13.3
|
-
|
-
|
-
|
13.3
|
|
|
Profit for the period
|
501.3
|
-
|
3.7
|
-
|
505.0
|
|
|
|
|
|
|
|
|
|
|
|
Pence
per share
|
|
Pence
per share
|
|
Pence per
share
|
|
|
Basic earnings per share -
Continuing operations
|
100.4
|
-
|
0.8
|
-
|
101.2
|
|
|
Basic earnings per share -
Discontinued operations
|
5.7
|
-
|
-
|
-
|
5.7
|
|
|
Basic earnings per share -
Total
|
106.1
|
-
|
0.8
|
-
|
106.9
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share -
Continuing operations
|
100.4
|
-
|
0.8
|
-
|
101.2
|
|
|
Diluted earnings per share -
Discontinued operations
|
5.7
|
-
|
-
|
-
|
5.7
|
|
|
Diluted earnings per share -
Total
|
106.1
|
-
|
0.8
|
-
|
106.9
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income
|
481.2
|
-
|
3.7
|
-
|
484.9
|
|
|
Impact on the Consolidated Balance Sheet
30 April 2023
|
Amounts previously
reported
|
2) Investment
property
|
As
restated
|
|
|
|
|
|
(£'m)
|
(£'m)
|
(£'m)
|
|
|
ASSETS - NON CURRENT
|
|
|
|
|
|
Property, plant and
equipment
|
1,150.7
|
(18.7)
|
1,132.0
|
|
|
Investment properties
|
131.3
|
28.7
|
160.0
|
|
|
Intangible assets
|
24.1
|
-
|
24.1
|
|
|
Long-term financial
assets
|
289.6
|
-
|
289.6
|
|
|
Investment in associate
undertakings
|
16.9
|
-
|
16.9
|
|
|
Retirement benefit
surplus
|
0.8
|
-
|
0.8
|
|
|
Deferred tax assets
|
82.1
|
-
|
82.1
|
|
|
|
1,695.5
|
10.0
|
1,705.5
|
|
|
ASSETS - CURRENT
|
|
|
|
|
|
Inventories
|
1,464.9
|
-
|
1,464.9
|
|
|
Trade and other
receivables
|
720.1
|
-
|
720.1
|
|
|
Derivative financial
assets
|
79.3
|
-
|
79.3
|
|
|
Cash and cash equivalents
|
332.9
|
-
|
332.9
|
|
|
|
2,597.2
|
-
|
2,597.2
|
|
|
TOTAL ASSETS
|
4,292.7
|
10.0
|
4,302.7
|
|
|
|
|
|
|
|
|
LIABILITIES - NON CURRENT
|
|
|
|
|
|
Lease liabilities
|
(560.3)
|
-
|
(560.3)
|
|
|
Borrowings
|
(749.7)
|
-
|
(749.7)
|
|
|
Retirement benefit
obligations
|
(1.7)
|
-
|
(1.7)
|
|
|
Deferred tax liabilities
|
(15.7)
|
-
|
(15.7)
|
|
|
Provisions
|
(290.2)
|
-
|
(290.2)
|
|
|
|
(1,617.6)
|
-
|
(1,617.6)
|
|
|
LIABILITIES - CURRENT
|
|
|
|
|
|
Derivative financial
liabilities
|
(66.5)
|
-
|
(66.5)
|
|
|
Trade and other payables
|
(711.9)
|
-
|
(711.9)
|
|
|
Lease liabilities
|
(119.6)
|
-
|
(119.6)
|
|
|
Provisions
|
(16.3)
|
-
|
(16.3)
|
|
|
Current tax liabilities
|
(102.6)
|
-
|
(102.6)
|
|
|
|
(1,016.9)
|
-
|
(1,016.9)
|
|
|
TOTAL LIABILITIES
|
(2,634.5)
|
-
|
(2,634.5)
|
|
|
|
|
|
|
|
|
NET
ASSETS
|
1,658.2
|
10.0
|
1,668.2
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
Share capital
|
64.1
|
-
|
64.1
|
|
|
Share premium
|
874.3
|
-
|
874.3
|
|
|
Treasury shares reserve
|
(644.2)
|
-
|
(644.2)
|
|
|
Permanent contribution to
capital
|
0.1
|
-
|
0.1
|
|
|
Capital redemption
reserve
|
8.0
|
-
|
8.0
|
|
|
Foreign currency translation
reserve
|
47.4
|
-
|
47.4
|
|
|
Reverse combination
reserve
|
(987.3)
|
-
|
(987.3)
|
|
|
Own share reserve
|
(66.8)
|
-
|
(66.8)
|
|
|
Hedging reserve
|
14.0
|
-
|
14.0
|
|
|
Share based payment
reserve
|
33.1
|
-
|
33.1
|
|
|
Revaluation reserve
|
-
|
-
|
-
|
|
|
Retained earnings
|
2,275.5
|
10.0
|
2,285.5
|
|
|
Issued capital and reserves attributable to owners of the
parent
|
1,618.2
|
10.0
|
1,628.2
|
|
|
Non-controlling interests
|
40.0
|
-
|
40.0
|
|
|
TOTAL EQUITY
|
1,658.2
|
10.0
|
1,668.2
|
|
|
24 April 2022
|
Amounts previously
reported
|
2) Investment
property
|
As
restated
|
|
|
|
|
|
(£'m)
|
(£'m)
|
(£'m)
|
|
|
ASSETS - NON CURRENT
|
|
|
|
|
|
Property, plant and
equipment
|
1,011.0
|
-
|
1,011.0
|
|
|
Investment properties
|
89.2
|
6.3
|
95.5
|
|
|
Intangible assets
|
120.6
|
-
|
120.6
|
|
|
Long-term financial
assets
|
206.6
|
-
|
206.6
|
|
|
Retirement benefit
surplus
|
2.2
|
-
|
2.2
|
|
|
Deferred tax assets
|
100.8
|
-
|
100.8
|
|
|
|
1,530.4
|
6.3
|
1,536.7
|
|
|
ASSETS - CURRENT
|
|
|
|
|
|
Inventories
|
1,277.6
|
-
|
1,277.6
|
|
|
Trade and other
receivables
|
841.4
|
-
|
841.4
|
|
|
Derivative financial
assets
|
116.5
|
-
|
116.5
|
|
|
Cash and cash equivalents
|
336.8
|
-
|
336.8
|
|
|
|
2,572.3
|
-
|
2,572.3
|
|
|
Assets in disposal groups classified as held for
sale
|
40.0
|
-
|
40.0
|
|
|
TOTAL ASSETS
|
4,142.7
|
6.3
|
4,149.0
|
|
|
|
|
|
|
|
|
LIABILITIES - NON CURRENT
|
|
|
|
|
|
Lease liabilities
|
(503.6)
|
-
|
(503.6)
|
|
|
Borrowings
|
(827.9)
|
-
|
(827.9)
|
|
|
Retirement benefit
obligations
|
(1.6)
|
-
|
(1.6)
|
|
|
Deferred tax liabilities
|
(40.4)
|
-
|
(40.4)
|
|
|
Provisions
|
(433.0)
|
-
|
(433.0)
|
|
|
|
(1,806.5)
|
-
|
(1,806.5)
|
|
|
LIABILITIES - CURRENT
|
|
|
|
|
|
Derivative financial
liabilities
|
(107.2)
|
-
|
(107.2)
|
|
|
Trade and other payables
|
(729.8)
|
-
|
(729.8)
|
|
|
Lease liabilities
|
(117.0)
|
-
|
(117.0)
|
|
|
Current tax liabilities
|
(50.9)
|
-
|
(50.9)
|
|
|
|
(1,004.9)
|
-
|
(1,004.9)
|
|
|
Liabilities in disposal groups classified as held for
sale
|
(22.7)
|
-
|
(22.7)
|
|
|
TOTAL LIABILITIES
|
(2,834.1)
|
-
|
(2,834.1)
|
|
|
|
|
|
|
|
|
NET
ASSETS
|
1,308.6
|
6.3
|
1,314.9
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
Share capital
|
64.1
|
-
|
64.1
|
|
|
Share premium
|
874.3
|
-
|
874.3
|
|
|
Treasury shares reserve
|
(488.9)
|
-
|
(488.9)
|
|
|
Permanent contribution to
capital
|
0.1
|
-
|
0.1
|
|
|
Capital redemption
reserve
|
8.0
|
-
|
8.0
|
|
|
Foreign currency translation
reserve
|
35.6
|
-
|
35.6
|
|
|
Reverse combination
reserve
|
(987.3)
|
-
|
(987.3)
|
|
|
Own share reserve
|
(66.8)
|
-
|
(66.8)
|
|
|
Hedging reserve
|
55.3
|
-
|
55.3
|
|
|
Share based payment
reserve
|
14.1
|
-
|
14.1
|
|
|
Retained earnings
|
1,778.1
|
6.3
|
1,784.4
|
|
|
Issued capital and reserves attributable to owners of the
parent
|
1,286.6
|
6.3
|
1,292.9
|
|
|
Non-controlling interests
|
22.0
|
-
|
22.0
|
|
|
TOTAL EQUITY
|
1,308.6
|
6.3
|
1,314.9
|
|
|
2.
CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES
Climate Change
We have considered the potential
impact of climate change in preparing these financial
statements. Tackling climate change is a global imperative.
Measures which support climate change initiatives and our wider ESG
agenda continue to be key components of our strategic direction,
supporting sustainability, the broader social agenda and consumer
choice. The risks associated with climate change have been
deemed to be arising in the medium to long term, however we are
working to mitigate these risks as detailed within the TCFD section
of the annual report.
We have considered climate change as
part of our cash flow projections within going concern, impairment
assessments and viability, and the impact of climate change is not
deemed to have a significant impact on these assessments currently
and therefore they are not deemed to be a key source of estimation
uncertainty. The Group will continue to monitor the impacts of
climate change over the coming years.
Critical Accounting Judgements
Determining Related Party Relationships
Management determines whether a
related party relationship exists by assessing the nature of the
relationship by reference to the requirements of IAS 24, Related
Party Disclosures. This is in order to determine whether
significant influence exists as a result of control, shared
directors or parent companies, or close family relationships. The
level at which one party may be expected to influence the other is
also considered for transactions involving close family
relationships.
Control and Significant Influence Over Certain
Entities
Under IAS 28 Investments in Associates and Joint
Ventures ("IAS 28"), if an entity holds 20% or more of the
voting power of the investee, it is presumed that the entity has
significant influence, unless it can clearly demonstrate that this
is not the case.
In assessing the level of control
that management have over certain entities, management will
consider the various aspects that allow management to influence
decision making. This includes the level of share ownership, board
membership, the level of investment and funding and the ability of
the Group to influence operational and strategic decisions and
affect its returns through the exercise of such influence. If
management were to consider that the Group does have significant
influence over these entities then the equity method of accounting
would be used and the percentage shareholding multiplied by the
results of the investee in the period would be recognised in profit
or loss.
Shareholdings in investees
greater than 20%
During the period the Group has held
greater than 20% of the voting rights of Mulberry Group plc, XXL
ASA, ASOS plc, AO World plc, Boohoo Group plc and N Brown Group
plc. Management consider that the Group does not have significant
influence over these entities for combinations of the following
reasons:
• The Group does not have any representation on the board of
directors of the investees.
• There is no participation in decision making and strategic
processes, including participation in decisions about dividends or
other distributions.
• There have been no material transactions between the entity
and the investee companies.
• There has been no interchange of managerial
personnel.
• No non-public essential technical management information is
provided to the investees.
Four (Holdings)
Limited
The Group holds 49% of the share
capital of Four (Holdings) Limited which is accounted for as an
associate using the equity method. The Group does not have any
representation on the board of directors and no participation in
decision making about relevant activities such as establishing
operating and capital decisions, including budgets, appointing or
remunerating key management personnel or service providers and
terminating their services or employment. However, in prior periods
the Group has provided Four (Holdings) Limited with a significant
loan. At the reporting date, the amount owed by Four (Holdings)
Limited for this loan totalled £30.0m (FY23:
£37.5m), being £6.4m (FY23: £4.3m) net of amounts recognised
in respect of loss allowance. The Group is satisfied that the
existence of these transactions provides evidence that the entity
has significant influence over the investee but in the absence of
any other rights, in isolation it is insufficient to meet the
control criteria of IFRS 10, as the Group does not have power over
Four (Holdings) Limited.
Tymit
Limited
The Group holds 28.2% of the share
capital of Tymit Limited. This holding is accounted for as an
associate under IAS 28, although the carrying value of the
investment is £nil as a result of management's assessment of future
trading prospects of the business. Management has advanced Tymit
convertible loans of £15.8m at 28 April 2024 (£7.2m as 30 April
2023), which have been fully provided for. Management has
considered whether any of the rights attaching to the loan notes
could give rise to control and concluded that this was not the
case.
Kangol
LLC
During the prior period, the Group
sold 51% of its shareholding in Kangol LLC to Bollman Hat Company
for £17.6m, retaining a 49% stake. Management considered the
criteria set out in IFRS 10 when assessing whether or not it
retains control of the entity or significant influence as defined
by IAS 28. It was concluded that the Group has significant
influence by virtue of its holding more than 20% of the voting
power of the investee, but not control since Bollman holds 51% of
total voting rights. Consequently, the Group's 49% shareholding has
been accounted for as an associate under IAS 28.
Cash Flow Hedging
The Group uses a range of forward
and option contracts that are entered into at the same time; they
are in contemplation with one another and have the same
counterparty. A judgement is made in determining whether there is
an economic need or substantive business purpose for structuring
the transactions separately that could not also have been
accomplished in a single transaction. Management are of the view
that there is a substantive distinct business purpose for entering
into the options and a strategy for managing the options
independently of the forward contracts. The forward and options
contracts are therefore not viewed as one instrument; accordingly
hedge accounting for the forwards is permitted.
Under IFRS 9 in order to achieve
cash flow hedge accounting, forecast transactions (primarily Euro
denominated sales and USD denominated purchases) must be considered
to be highly probable. The hedge must be expected to be highly
effective in achieving offsetting changes in cash flows
attributable to the hedged risk. The forecast transaction that is
the subject of the hedge must be highly probable and must present
an exposure to variations in cash flows that could ultimately
affect profit or loss. Management have reviewed the detailed
forecasts and the growth assumptions within them and are satisfied
that forecasts on which the cash flow hedge accounting has been
based meet the criteria per IFRS 9 as being highly probable
forecast transactions. Should the forecast levels not pass the
highly probable test, any cumulative fair value gains and losses in
relation to either the entire or the ineffective portion of the
hedged instrument would be recognised in the Consolidated Income
Statement.
Management considers various factors
when determining whether a forecast transaction is highly probable.
These factors include detailed sales and purchase forecasts by
channel, geographical area and seasonality, conditions in target
markets and the impact of expansion in new areas. Management also
consider any change in alternative customer sales channels that
could impact on the hedged transaction.
If the forecast transactions were
determined to be not highly probable and all hedge accounting was
discontinued, amounts in the Hedging reserve of up to £21.7m (FY23:
£14.0m) would be shown in Finance Income.
Adjustment to Regulatory Provisions in Frasers Group
Financial Services (formerly Studio Retail
Limited)
In the prior period,
a revision to management's best estimate of the
probable costs of remediating customers who may have been adversely
impacted by legacy decisions resulted in a reduction in the amount
provided of approximately £25.0m. Management considered whether or
not the reduction in provision should result in an adjustment to
the amounts recognised in the acquisition balance sheet in
accordance with the requirements of IFRS3.45 and IFRS3.47 and
concluded that the release should be treated as a prospective
change in accounting estimate under IAS8.34 since it arose as a
result of new information which came to light after the acquisition
date. It is the Group's policy to present
items that "merit separate presentation" by reference to their
"their size, nature and infrequency of the events giving rise to
them" as exceptional items. Given the unusual size, nature and
infrequency of movements in provisions of this nature, management
disclosed the income statement impact within exceptional items in
the prior period consolidated income statement.
Sale and Leaseback transactions
During the prior period, the Group
disposed of a number of freehold properties by means of the sale of
shares in the limited companies that owned the relevant properties
but accounted for these as sale and leaseback transactions under
IFRS 16 Leases ("IFRS
16"). Management exercised judgement in determining whether or not
these sales should be treated as a loss of control of subsidiaries
under IFRS 10 Consolidated
Financial Statements or sale and leaseback transactions as
defined by IFRS 16, paying due consideration to the IFRS
Interpretations Committee's tentative agenda decision on this topic
from September 2020.
Classification of investment properties
Upon the acquisition of a property,
management perform an assessment of the rationale for holding the
property in line with IAS 40. Management applies judgement in the
consideration of whether or not is feasible to sell or let parts of
the property under a finance lease, whether this is commercially
viable in the relevant marketplace, and whether or not any
owner-occupied portion is insignificant.
During the current period, the Group
acquired four properties, all of which met the criteria to be
classified as investment properties and were considered to be
non-separable, with either insignificant or no owner-occupied
portions.
Key
Estimates
Inventory provisioning
The Group carries significant
amounts of inventory, against which there are provisions for
expected losses to be incurred in the sale of slow moving, obsolete
and delisted products. At 28 April 2024 a provision of £192.0m
(FY23: £220.6m) was held against a gross inventory value of
£1,547.3m (FY23: £1,685.5m).
In assessing the level of provision
required, management has applied its experience and industry
knowledge to divide the core UK inventory holding into separate
categories based on internal management classifications and
behavioural characteristics, taking account of experience by fascia
and segment, as follows:
· Continuity inventory - inventory that is considered to be
perennial and therefore exhibits limited risk of
obsolescence.
· Current season inventory - inventory that has been purchased
specifically for seasons in the current calendar year and future
years.
· Out
of season inventory (including inventory previously classified as
continuity) - inventory that has moved out of the two categories
above because of its age, range development or because it is being
sold at below cost to clear warehouse/store space.
An adjusted rate of loss is then
calculated based on losses incurred on the sale of out of season
inventory over the past three years (being management's assessment
of the time taken to clear through out of season inventory), with
any inventory remaining on hand after three years of being
classified as out of season being assumed to require a 100%
provision rate. The historical rate is sensitised to reflect
management's best estimate of future performance by making
assumptions around changes to sales prices achieved on the sale of
out of season inventory vs. those achieved in the past three years
and the level of inventory remaining after three years of being
classified as out of season. In the current period, management have
estimated that selling prices will need to reduce by a further 15%
(FY23: 10%) to clear an equivalent volume of out of season
inventory and that approximately fifteen times (FY23: twelve times)
as much Premium Lifestyle out of season inventory will remain on
hand at the end of the three-year period of assessment than has
typically been the case historically, requiring a 100% provision
rate, reflecting the different profile of this inventory to Sports
inventory.
The changes in assumptions around
selling prices and Premium Lifestyle out of season inventory will
remain on hand reflect management's best estimates based on
performance seen in the past 12 months.
In addition, management has applied
a provision rate of 100% against a portion of the inventory holding
that is either currently being sold at a loss or exhibits an
unusually high level of obsolescence risk. The 100% provision rate
reflects the costs associated with clearing and disposing of this
inventory.
The adjusted rate of loss is applied
to the gross value of inventory in each of the categories above as
follows:
· Continuity inventory - the adjusted loss rate is applied to
30% of the gross holding (representing the proportion of inventory
in this category that is expected to roll into the out of season
category based on historical experience and anticipated future
trends).
· Current season inventory - the adjusted loss rate is applied
to 30% of the gross holding (representing the proportion of
inventory in this category that is expected to roll into the out of
season category based on historical experience and anticipated
future trends).
· Out
of season inventory (including inventory previously classified as
continuity) - the adjusted loss rate is applied to this population,
excluding those specific items that carry a 100% provision rate
based on the analysis detailed above.
The provisioning calculations
require a high degree of judgement, given the significant level of
estimation uncertainty in the roll rates between classifications,
as well as the use of estimates around future sales prices and the
remaining inventory holding for out of season inventory.
Sensitivity analysis relating to these key assumptions and its
impact upon the core UK inventory holding (which makes up the most
significant part of the Group's inventory holding) is set out
below.
% of inventory rolling into
out of season (including inventory
previously classified as continuity) category
|
|
|
|
|
|
Base assumption
|
30%
|
|
|
Sensitised assumption
|
35%/25%
|
|
|
|
|
|
|
Increase/(decrease) to
provision
|
£5.5m/(£5.5m)
|
|
|
|
|
|
|
Decrease in sales prices on
out of season inventory
|
|
|
|
|
|
Base assumption
|
-15%
|
|
|
Sensitised assumption
|
-20%/-10%
|
|
|
|
|
|
|
Increase/(decrease) to
provision
|
£7.0m/(£2.0m)
|
|
|
|
|
|
|
Increase in out of season
Premium Lifestyle inventory on hand after
three-years
|
|
|
|
|
Base assumption
|
15 times historical rate
|
Sensitised assumption
|
16 times historical rate/14 times
historical rate
|
|
|
|
|
Increase/(decrease) to
provision
|
£2.1m/(£2.6m)
|
|
|
|
|
|
|
These sensitivities reflect
management's assessment of reasonably possible changes to key
assumptions which could result in adjustments to the level of
provision within the next financial year.
Dilapidations
The Group provides for its legal
responsibility for dilapidation costs following advice from
chartered surveyors and previous experience of exit costs
(including strip out costs and professional fees). Management do
not consider these costs to be capital in nature and therefore
dilapidations are not capitalised, except for in relation to the
sale and leaseback of Shirebrook for which a material dilapidations
provision was capitalised in FY20.
Management calculates its best
estimate of the provision required by reference to the proportion
of closed stores for which a dilapidation cost is likely to be
incurred, based on past experience, and an estimate for the level
of costs based on advice from chartered surveyors.
Sensitivity analysis to changes in
key assumptions is as follows:
|
Estimated cost per sq.
ft.
|
% of stores where a
dilapidation cost is incurred
|
Base assumption
|
18.10
|
30%
|
Sensitised assumption
|
£19.10/£17.10
|
35%/25%
|
Increase to provision
|
£3.2m
|
£7.8m
|
(Decrease) to provision
|
(£3.2m)
|
(£7.8m)
|
Legal and regulatory provisions
Provisions are made for items where
the Group has identified a present legal or constructive obligation
arising as a result of a past event, it is probable that an outflow
of resources will be required to settle the obligation and a
reliable estimate can be made of the amount of the
obligation.
Legal and regulatory provisions
reflect management's best estimate of the potential costs arising
from the settlement of outstanding disputes of a commercial and
regulatory nature. A substantial portion of the amounts provided
relates to ongoing legal claims and non-UK tax enquiries.
Management have made a judgement to consider all claims
collectively given their similar nature. In accordance with
IAS37.92, management have concluded that it would prejudice
seriously the position of the entity to provide further specific
disclosures in respect of amounts provided for non-UK tax enquiries
and legal claims.
Other receivables and amounts owed by related
parties
Other receivables and amounts owed
by related parties are stated net of provision for any impairment.
Management have applied estimates in assessing the recoverability
of working capital and loan advances made to investee companies.
Matters considered include the relevant financial strength of the
underlying investee company to repay the loans, the repayment
period and underlying terms of the monies advanced, forecast
performance of the underlying borrower, and where relevant, the
Group's intentions for the companies to which monies have been
advanced. Management have applied a weighted probability to certain
potential repayment scenarios, with the strongest weighting given
to expected default after two years.
Impairment of non-financial assets
a) IFRS 16 right-of-use assets
and associated plant and equipment
IFRS 16 defines the lease term as
the non-cancellable period of a lease together with the options to
extend or terminate a lease, if the lessee were reasonably certain
to exercise that option. The Group will assess the likelihood of
extending lease contracts beyond the break date by taking into
account current economic and market conditions, current trading
performance, forecast profitability and the level of capital
investment in the property.
IFRS 16 states that the lease
payments shall be discounted using the lessee's incremental
borrowing rate where the rate implicit in the lease cannot be
readily determined. Accordingly, all lease payments have been
discounted using the incremental borrowing rate (IBR). The IBR has
been determined by using a synthetic credit rating for the Group
which is used to obtain market data on debt instruments for
companies with the same credit rating; this is split by currency to
represent each of the geographical areas the Group operates within
and adjusted for the lease term.
The weighted average discount rates
based on incremental borrowing rates used throughout the period
across the Group's lease portfolio are shown below. The discount
rate for each lease is dependent on lease start date, term and
location.
Lease Term FY24
|
UK
|
Europe
|
Rest of
World
|
Up to 5 years
|
1.4% -
5.7%
|
0.3% -
4.0%
|
1.5% -
6.2%
|
Greater than 5 years and up to 10
years
|
1.4% -
5.7%
|
0.3% -
4.0%
|
1.5% -
6.0%
|
Greater than 10 years and up to 20
years
|
2.0% -
5.7%
|
0.3% -
4.0%
|
1.5% -
6.2%
|
Greater than 20 years
|
2.0% -
5.9%
|
0.5% -
4.0%
|
1.5% -
6.3 %
|
Lease Term FY23
|
UK
|
Europe
|
Rest of
World
|
Up to 5 years
|
1.4% -
5.1%
|
0.3% -
4%
|
1.5% -
5.3%
|
Greater than 5 years and up to 10
years
|
2.0% -
5.7%
|
0.5% -
4%
|
1.5% -
5.3%
|
Greater than 10 years and up to 20
years
|
2.2% -
5.7%
|
0.8% -
4%
|
1.5% -
5.4%
|
Greater than 20 years
|
2.5% -
5.9%
|
1.1% -
4%
|
1.5% -
5.6%
|
An asset is impaired when the
carrying amount exceeds its recoverable amount. Equally previous
impairments are reversed when the recoverable amount exceeds the
carrying amount and there are previous impairments against the
asset. IAS 36 defines recoverable amount as the higher of an
asset's or cash-generating unit's fair value less costs of disposal
and its value in use. The Group has determined that each store is a
separate CGU.
The recoverable amount is calculated
based on the Group's latest forecast cash flows which are then
extrapolated to cover the period to the break date of the lease
taking into account historic performance and knowledge of the
current market, together with the Group's views on future
profitability of each CGU. The key assumptions in the calculations
are the sales growth rates, gross margin rates, changes in the
operating cost base and the pre-tax discount rate derived from the
Group's weighted average cost of capital using the capital asset
pricing model, the inputs of which include a risk-free rate, equity
risk premium and a risk adjustment (Beta). Given the number of
assumptions used, the assessment involves significant estimation
uncertainty.
In the period, a net reversal of
previous impairments has been recognised for the amount of £0.4m
(FY23: impairment charge
£66.1m) due to the improving conditions in the
retail sector on the forecast cash flows of the CGU since the
COVID-19 pandemic where material impairments were incurred. This is
broken down as follows:
• £5.2m reversal (FY23: impairment charge £43.1m) against
right-of-use assets; and
• £4.8m impairment charge (FY23: £23.0m) against plant and
equipment.
The key assumptions, which are
equally applicable to each CGU, in the cash flow projections used
to support the carrying amount of the right of use asset are
consistent with the cashflow projections for the freehold land and
buildings impairment assessment.
A sensitivity analysis has been
performed in respect of sales, margin, the new store exemption and
operating costs as these are considered to be the most sensitive of
the key assumptions:
Forecast:
|
Impact of change in assumption:
|
Reversal increase /
(decrease) (£'m)
|
Sales decline year 1
|
10% improvement to 7%
increase
|
14.4
|
Sales decline year 1
|
10% reduction to 13%
|
(11.8)
|
Existing gross margin year 1 >
40%
|
100bps - improvement
|
3.2
|
Existing gross margin year 1 >
40%
|
100bps - reduction
|
(3.2)
|
New store exemption
(1)
|
Change from 2 to 3 years
|
5.5
|
Operating costs increase year
1
|
Change from 3% to 6%
|
(4.0)
|
(1)
Stores which have been open for less than two
years are not reviewed for impairment. This has changed in the
current period on the basis that management do not consider that a
trading performance in the first two years that is worse than an
appraisal forecast constitutes an indicator of impairment.
Management also notes that new stores can take up to two years to
develop an established trading pattern. Stores trading for less
than two years are still reviewed for impairment if there are other
significant indicators of impairment present such as a
deterioration in local market conditions.
b) Freehold land and
buildings, long-term leasehold and associated plant and
equipment
Freehold land and buildings and
long-term leasehold assets are assessed at each reporting period
for as to whether there is any indication of impairment or reversal
in line with IAS 36.
An asset is impaired when the
carrying amount exceeds its recoverable amount. Equally previous
impairments are reversed when the recoverable amount exceeds the
carrying amount and there are previous impairments against the
asset. IAS 36 defines recoverable amount as the higher of an
asset's or cash-generating unit's fair value less costs of disposal
and its value in use. the Group has determined that each store is a
separate CGU.
Key triggers considered by
management include store (i.e., CGU) EBITDA showing a material
year-on-year movement, significant changes in property valuations,
and whether any new, wider economic factors may impact the forecast
performance. Based on the criteria set by management, a net
impairment charge of approximately £14.9m (FY23: £33.5m) was
recorded for the current period due to certain properties under
performing against forecasted results where material impairments
were incurred. This is broken down as follows:
•
£6.8m reversal (FY23: impairment charge £24.1m)
against freehold land and buildings and a £6.7m impairment charge
(FY23: impairment charge £0.2m) in relation to long leasehold
properties; and
• £15.0m impairment charge (FY23: £9.2m) against plant and
equipment.
Value In Use (VIU)
The value in use is calculated based
on five-year cash flow projections. These are formulated by using
the Group's forecast cash flows for each individual CGU, taking
into account historic performance of the CGU, and then adjusting
for the Group's current views on future profitability for each CGU.
The key assumptions in the calculations are the sales growth rates,
gross margin rates, changes in the operating cost base and the
pre-tax discount rate derived from the Group's weighted average
cost of capital using the capital asset pricing model, the inputs
of which include a risk-free rate, equity risk premium and a risk
adjustment (Beta). Given the number of assumptions used, the
assessment involves significant estimation uncertainty.
The key assumptions, which are
equally applicable to each CGU, in the cash flow projections used
to support the carrying amount of the freehold land and buildings
were as follows:
Key assumptions FY24
|
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Sales decline
|
-3%
|
-2%
|
-2%
|
-2%
|
-2%
|
Existing gross margin >
40%
|
-100bps
|
-75bps
|
-50bps
|
-25bps
|
-
|
Operating costs increase per
annum
|
3%
|
3%
|
3%
|
3%
|
3%
|
Discount rate
|
9.8%
|
9.8%
|
9.8%
|
9.8%
|
9.8%
|
Terminal growth rate of
2%
|
|
|
|
|
|
Properties purchased within one
year, or stores that have not traded for two years, are not
reviewed for impairment.
|
Key assumptions FY23
|
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
|
Sales decline
|
-5%
|
-4%
|
-3%
|
-2%
|
-2%
|
Existing gross margin >
40%
|
-175bps
|
-150bps
|
-125bps
|
-100bps
|
-75bps
|
Operating costs increase per
annum
|
3%
|
3%
|
3%
|
3%
|
3%
|
Discount rate
|
8.5%
|
8.5%
|
8.5%
|
8.5%
|
8.5%
|
Terminal growth rate of
2%
|
|
|
|
|
|
Properties purchased within one
year, or stores that have not traded for one year, are not reviewed
for impairment.
|
A sensitivity analysis has been
performed in respect of sales, margin and operating costs as these
are considered to be the most sensitive of the key
assumptions.
Forecast:
|
Impact of:
|
Impairment increase /
(decrease) (£'m)
|
Sales decline year 1
|
10% improvement to 7%
|
(4.1)
|
Sales decline year 1
|
10% reduction to 13%
|
7.0
|
Existing gross margin year 1 >
40%
|
100bps - improvement
|
(0.8)
|
Existing gross margin year 1 >
40%
|
100bps - reduction
|
0.8
|
Operating costs increase year
1
|
Change from 3% to 6%
|
0.8
|
Fair value less costs of disposal
For those CGUs where the value in
use is less than the carrying value of the asset, the fair value
less costs of disposal has been determined using both external and
internal market valuations. This fair value is deemed to fall into
Level 3 of the fair value hierarchy as per IFRS 13. The property
portfolio consists of vacant, Frasers Group occupied and third
party tenanted units; one property can include all three types. The
following valuation methodology has been adopted for
each:
Scenario
|
Valuation methodology
|
Key assumptions
|
Vacant units
|
Estimated Rental Value (ERV) and
suitable reversionary yield applied to reflect the market to
generate a net capital value. A deduction to the capital value
generated is then made based on the void period with applicable
rates payable for the unit and rent-free incentive.
|
Void period and rent-free band -
three bands applied depending on circumstances:
• 1 year void, 1 year rent
free; or
|
• 1
year void, 2 years rent free; or
|
• 2
years void, 3 years rent free.
|
Yield bands - ranging from 5.5% -
20.0%
|
Frasers Group occupied
|
Will be assumed the unit is vacant
given there is no legally binding inter-company agreement in place.
Therefore, a void and rent-free incentive period assumed, the cost
amount then deducted from the capital value generated by the ERV
and reversionary yield. Although we consider the commercial reality
is that fair value less costs to sell will be higher than vacant
possession, this very conservative assumption is in line with both
technical accounting rules and that of our management
experts.
|
Void period and rent-free band -
three bands applied depending on circumstances:
• 1 year void, 1 year rent
free; or
|
• 1 year void, 2 years rent
free; or
|
• 2 years void, 3 years
rent free.
|
Yield bands - ranging from 5.5% -
20.0%
|
Third party tenanted
|
An ERV is applied using a
percentage band on the passing rent. An appropriate reversionary
yield is applied reflecting the risk of tenant and renewal to
generate a capital value. This will also provide a net initial
yield based off the current passing rent.
|
ERV is applied reflecting the
market for the applicable unit. An appropriate reversionary yield
is applied reflecting the risk of tenant and renewal to generate a
capital value. This will also provide a net initial yield based off
the current passing rent.
|
A 10% increase in the market
valuation amounts used in the impairment/reversal calculations
would result in a decrease in impairment of £0.8m (FY23:
£3.4m).
The total recoverable amount of the
assets that were impaired and reversed at the period end was £61.8m
(FY23: £72.2m), with £7.7m (FY23: £60.5m) of this being based on
their fair value less costs of disposal and £54.1m (FY23: £11.7m)
being based on their value in use.
Onerous lease provisions
IAS 37 defines a contract is
onerous when the unavoidable costs of meeting the obligations under
the contract exceed the economic benefits expected to be received
under it. The unavoidable costs under a contract reflect the least
net cost of exiting from the contract, which is the lower of the
cost of fulfilling it and any compensation or penalties arising
from failure to fulfil it. Accordingly, the Group provides for the
future unavoidable costs that will be incurred under the lease
obligations at the present date when the outflow of future economic
benefits is deemed probable.
The Group has determined that each
store is a separate CGU and assess the profitability of lease
contracts by taking into account current economic and market
conditions, current trading performance and forecast profitability
over the remaining life of the lease.
The key assumptions in the
calculations are the sales growth rates, gross margin rates,
changes in the operating cost base and the pre-tax discount rate
derived from the Group's weighted average cost of capital using the
capital asset pricing model, the inputs of which include a
risk-free rate, equity risk premium and a risk adjustment (Beta).
Given the number of assumptions used, the assessment involves
significant estimation uncertainty. Given the number of assumptions
used, the assessment involves significant estimation uncertainty.
During the period, net reversals of provisions amounted to
£34.5m.
A sensitivity analysis has been
performed in respect of sales, margin, the new store exemption and
operating costs as these are considered to be the most sensitive of
the key assumptions:
Forecast:
|
Impact of change in assumption:
|
Reversal increase /
(decrease) (£'m)
|
Sales decline year 1
|
10% improvement to 7%
increase
|
10.9
|
Sales decline year 1
|
10% reduction to 13%
|
(22.8)
|
Existing gross margin year 1 >
40%
|
100bps - improvement
|
2.1
|
Existing gross margin year 1 >
40%
|
100bps - reduction
|
(2.3)
|
New store exemption
(1)
|
Change from 2 to 3 years
|
2.3
|
Operating costs increase year
1
|
Change from 3% to 6%
|
(4.0)
|
Investment Property valuations
Investment properties valued by the
Group's internal property team are valued on an open market basis
based on active market prices adjusted for any differences in the
nature, location or condition of the specified asset such as plot
size, encumbrances and current use. If this information is not
available, alternative valuation methods are used such as recent
prices on less active markets, or discounted cashflow
projections.
The market value of the investment
properties is also supported by comparison to that produced using
the valuation methodology described in the "Fair value less costs
of disposal" section above. The range of yield applied across the
investment property portfolio is 7.0% to 14.0%.
Credit Customer Receivables
The Group's credit customer
receivables are recognised on the balance sheet at amortised cost
(i.e., net of provision for expected credit loss). At 28 April
2024, trade receivables with a gross value of £286.9m
(FY23: £326.0m) were recorded in the consolidated
balance sheet, less a provision for impairment of £80.7m (FY23:
£100.1m).
Expected credit loss
An appropriate allowance for
expected credit loss in respect of trade receivables is derived
from estimates and underlying assumptions such as the Probability
of Default and the Loss Given Default, taking into consideration
forward looking macro-economic assumptions. The assessment involves
significant estimation uncertainty. Changes in the assumptions
applied such as the value and frequency of future debt sales in
calculating the Loss Given Default, and the estimation of customer
repayments and Probability of Default rates, as well as the
weighting of the macro-economic scenarios applied to the impairment
model could have a significant impact on the carrying value of
trade receivables. These assumptions are continually assessed for
relevance and adjusted appropriately. Revisions to estimates are
recognised prospectively. Sensitivity analysis is given in note
16.
Macroeconomic scenarios
The principial macroeconomic driver
factored into the impairment model is unemployment. The latest
economic scenarios used in the model along with the probably
weighting applied to each are summarised as follows:
Scenario
|
Qualitative explanation
|
Probability weighting
applied
|
Upside
|
Inflation recedes quickly and the
Bank of England cuts interest rates to 4% by end of 2024.
Unemployment falls back to 3.6%. and wage growth remains
strong.
|
10%
|
Baseline
|
Inflation recedes but monetary
policy is still tight and the unemployment rate rises to 4.4% in H2
2024.
|
55%
|
Downside
|
The Bank of England raises
interest rates to 5.5% and unemployment peaks at 6.0% in Q3
2025.
|
25%
|
Stress
|
A combination of shocks sees
inflation rise sharply, hitting a peak of 7.2% early in 2025
leading to an increase in interest rates to 6.25%. Unemployment
peaks at 8%.
|
10%
|
Post model adjustment
In the prior year, a post model
adjustment was applied to the output of the statistical impairment
model as the model was not
designed to take
into account changes to customer payment
and default performance arising as a result of the cost-of-living
crisis. This increased the provision required at 30 April 2023 by
£6.6m. It is management's view that the post model adjustment is no
longer required, as the statistical model, which uses unemployment
rates as the principal determinant in considering forward looking
macro-economic assumptions, is now considered to be sufficiently
effective.
Valuation of assets acquired in business
combinations
Matches
Following the acquisition of
Matches, the principal estimates were around the fair value of
inventory acquired and the intangible asset recognised in respect
of the trademarks and intellectual property acquired.
The fair value of inventory,
which primarily included finished goods, was estimated at £97.5m,
an increase of £7.9m on the carrying value prior to the
acquisition. The fair value adjustment related only to finished
goods and was calculated as the estimated selling price less costs
to complete and sell the inventory.
The Group recognised intangible
assets with a fair value of £20.0m on acquisition in respect of the
trademarks and intellectual property acquired This represents
management's assessment of the price that would be paid for the
acquired assets in an orderly transaction between market
participants at the acquisition date.
Prior year acquisitions
In the prior year, on the
acquisition of JD premium brands, the principal estimate was around
the fair value of inventory acquired. The fair value of inventory,
which primarily included finished goods was estimated at £73.4m, a
reduction of £6.9m on the carrying value prior to the acquisition.
The fair value adjustment related only to finished goods and was
calculated as the estimated selling price less costs to complete
and sell the inventory. The fair value adjustment amortised during
the current financial year in line with revenue, as
expected.
A gain on bargain purchase arose
on the acquisition of JD premium brands. In light of this,
management considered the fair values attributed to the acquired
assets and liabilities and concluded that they were appropriate. If
the fair value of assets and liabilities recognised were to
increase/decrease by £5m, there would be a corresponding
increase/decrease to the gain on bargain purchase by an equivalent
amount.
3.
SEGMENTAL ANALYSIS
IFRS 8 requires operating segments
to be identified on the basis of the internal financial information
reports to the Chief Operating Decision Maker ("CODM") who is
primarily responsible for the allocation of resources to segments
and assessment of performance of the segments.
Historically the Group has
presented four operating segments:
· UK
Sports
This segment included the Group's
core sports retail store operations in the UK, plus all the Group's
sports retail online business, Frasers Fitness, the Group's
Shirebrook campus operations, freehold property owning companies
excluding Premium Lifestyle fascia properties, GAME UK stores and
online operations, Frasers Group Financial Services Limited, and
retail store operations in Northern Ireland.
· Premium Lifestyle
This segment included the results
of the Group's premium and luxury retail businesses FLANNELS,
Cruise, Van Mildert, Jack Wills, House of Fraser, Gieves and
Hawkes, and Sofa.com along with the related websites, the
Missguided and I Saw it First websites, and freehold property
owning companies where trading was purely from Premium Lifestyle
fascias.
· International
This segment included all of the
Group's sports retail stores, management and operating functions in
Europe, Asia and the rest of the world, including the Group's
European Distribution Centres in Belgium and Austria, European
freehold property owning companies, GAME Spain stores and
e-commerce offering, the Baltics & Asia e-commerce offerings
and the MySale business in Australia.
· Wholesale & Licensing
This segment included the results
of the Group's portfolio of internationally recognised brands such
as Everlast, Karrimor, and Slazenger.
Following the acquisition of
Frasers Group Financial Services Limited (formerly known as Studio
Retail Limited) and the launch of the Group's consumer credit
offering, Frasers Plus, as well as recent acquisitions of
investment property, the Group has decided that its financial
services and property divisions should be disclosed as separate
operating segments.
In addition, the Group's wholesale
and licensing activities have become less of an area of focus in
recent periods and therefore management judge the results from
these activities no longer warrant separate presentation as an
operating segment.
As a result, the Group will now
present five operating segments, with the creation of new Property
and Financial Services segments, and the Wholesale and Licensing
Segment being absorbed into the UK Sports and International
segments:
·
UK Sports
This segment now includes the
results of the Group's core sports retail store operations in the
UK, plus all the Group's sports retail online business, other
UK-based sports retail and wholesale operations, GAME UK stores and
online operations, retail store operations in Northern Ireland,
Frasers Fitness, Studio Retail's sales and the Group's central
operating functions (including the Shirebrook campus).
· Premium Lifestyle
This segment includes the results
of the Group's premium and luxury retail businesses FLANNELS,
Cruise, Van Mildert, Jack Wills, House of Fraser, Gieves and
Hawkes, and Sofa.com along with the related websites, the
businesses acquired from JD Sports Fashion Plc in FY23, as well as
the results from the I Saw it First website and the Missguided
website until the disposal of the Missguided intellectual property
in October 2023.
· International
This segment includes the results
all of the Group's sports retail stores, management and operating
functions in Europe, Asia and the rest of the world, including the
Group's European Distribution Centres in Belgium and Austria, GAME
Spain stores and e-commerce offering, the Baltics & Asia
e-commerce offerings, the MySale business in Australia, the Group's
US retail operations until they were disposed of in 2022, and all
non-UK based wholesale and licensing activities (relating to brands
such as Everlast, Karrimor, and
Slazenger).
· Property
This segment includes the results
from the Group's freehold property owning and
long leasehold holding property companies that generate third party
rental and other property related income (e.g., car parking,
conference and events income). The results of the Coventry Arena
are reported in this segment.
· Financial Services
This segment includes the results
of Frasers Group Financial Services. This includes interest charged
on amounts advanced to consumer credit customers, along with the
associated impairment and operating costs.
The operating performance of each
segment is assessed by reference to revenue, gross margin, and
profit from trading activities after operating expenses. For the
avoidance of doubt, operating costs in the Group's three retail
operating segments include rents payable to third party landlords.
Intra-group rent payments are eliminated on
consolidation.
For the property segment, profit
from trading activities includes fair value gains and losses in
respect of investment properties (see further below) and gains or
losses on disposal of properties since the Group's property
businesses seek to generate income from rentals and capital
appreciation of properties held.
In the Financial Services segment,
impairment losses on consumer credit receivables are disclosed
within gross margin, which management deem to be the appropriate
treatment for a financial services business.
Depreciation, amortisation and
impairments (net of any reversals) are disclosed as part of each
segment's operating profit/(loss).
Net investment and finance income
and costs are not split by segment as management consider that
these items relate to the Group as a whole and any split would not
be meaningful. The segmental results for the comparative period
ended 30 April 2023 have been restated to present segmental
information on a consistent basis and to restate for changes to the
reclassification of rental income, see first note 1 for further
details.
Segmental information for the 52
weeks ended 28 April
2024:
|
UK Sports
|
Premium
lifestyle
|
International
|
Retail
|
Property
|
Financial
Services
|
Group
Total
|
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
Revenue
|
2,860.8
|
1,204.0
|
1,289.2
|
5,354.0
|
72.7
|
111.0
|
5,537.7
|
Cost of sales
|
(1,558.5)
|
(773.2)
|
(782.4)
|
(3,114.1)
|
(7.8)
|
(20.6)
|
(3,142.5)
|
Gross profit
|
1,302.3
|
430.8
|
506.8
|
2,239.9
|
64.9
|
90.4
|
2,395.2
|
Gross Margin %
|
45.5%
|
35.8%
|
39.3%
|
41.8%
|
89.3%
|
81.4%
|
43.3%
|
Operating costs
|
(833.9)
|
(293.6)
|
(373.5)
|
(1,501.0)
|
(40.8)
|
(32.8)
|
(1,574.6)
|
Fair value adjustments to
investment properties
|
-
|
-
|
-
|
-
|
11.5
|
-
|
11.5
|
Gain on disposal of
properties
|
-
|
-
|
-
|
-
|
3.5
|
-
|
3.5
|
Profit from trading
|
468.4
|
137.2
|
133.3
|
738.9
|
39.1
|
57.6
|
835.6
|
Depreciation &
amortisation
|
(109.9)
|
(36.4)
|
(76.6)
|
(222.9)
|
(60.2)
|
(1.5)
|
(284.6)
|
Impairments net of impairment
reversals
|
8.4
|
(2.5)
|
(12.5)
|
(6.6)
|
(14.8)
|
-
|
(21.4)
|
Share-based payments
|
(23.0)
|
-
|
(0.4)
|
(23.4)
|
-
|
-
|
(23.4)
|
Foreign exchange
realised
|
9.2
|
0.3
|
0.3
|
9.8
|
4.6
|
-
|
14.4
|
Operating profit/(loss)
|
353.1
|
98.6
|
44.1
|
495.8
|
(31.3)
|
56.1
|
520.6
|
Gain on sale of
subsidiaries/discontinued operations
|
|
25.0
|
Net investment income
|
|
9.5
|
Net finance costs
|
|
(48.1)
|
Profit before tax
|
|
507.0
|
Result from discontinued
operation
|
|
(12.5)
|
Fair value adjustment to
derivative financial instruments
|
|
(27.6)
|
Fair value losses on equity
derivatives
|
|
68.9
|
Realised FX gain
|
|
(14.4)
|
Share-based payments
|
|
23.4
|
Adjusted profit before tax ("APBT")
|
|
544.8
|
Revenue from external customers in
Frasers Group Financial Services Limited includes credit account
interest of £111.0m (FY23: £125.0m), and gross profit includes
impairment losses on credit customer receivables of £20.6m (FY23:
£15.5m), both of which are recognised in the newly created
Financial Services segment.
Other segmental items included in
the income statement for the 52 weeks ended 28 April 2024:
|
UK Sports
|
Premium
lifestyle
|
International
|
Retail
|
Property
|
Financial
Services
|
Group
Total
|
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
Property, plant & equipment
depreciation
|
(68.7)
|
(26.9)
|
(41.7)
|
(137.3)
|
(60.2)
|
(2.1)
|
(199.6)
|
Property, plant & equipment
impairment
|
(3.0)
|
3.0
|
(4.9)
|
(4.9)
|
(14.8)
|
-
|
(19.7)
|
IFRS 16 ROU
depreciation
|
(40.7)
|
(9.5)
|
(33.6)
|
(83.8)
|
-
|
0.6
|
(83.2)
|
IFRS 16 ROU
(impairment)/reversals
|
11.9
|
(0.3)
|
(6.4)
|
5.2
|
|
|
5.2
|
Fair value adjustments to
investment properties
|
|
|
|
-
|
11.5
|
|
11.5
|
IFRS 16 disposal and
modification/remeasurement of lease liabilities
|
(2.1)
|
4.9
|
(9.4)
|
(6.6)
|
-
|
-
|
(6.6)
|
Intangible amortisation
|
(0.5)
|
-
|
(1.3)
|
(1.8)
|
-
|
-
|
(1.8)
|
Intangible impairment
|
(0.5)
|
(5.2)
|
(1.2)
|
(6.9)
|
-
|
-
|
(6.9)
|
Segmental information for the 53
weeks ended 30 April
2023(1)
|
UK Sports
|
Premium
lifestyle
|
International
|
Retail
|
Property
|
Financial
Services
|
Group
Total
|
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
Revenue
|
2,959.1
|
1,218.1
|
1,247.7
|
5,424.9
|
36.1
|
125.0
|
5,586.0
|
Cost of sales
|
(1,685.7)
|
(741.0)
|
(746.2)
|
(3,172.9)
|
(2.6)
|
(15.5)
|
(3,191.0)
|
Gross profit
|
1,273.4
|
477.1
|
501.5
|
2,252.0
|
33.5
|
109.5
|
2,395.0
|
Gross Margin %
|
43.0%
|
39.2%
|
40.2%
|
41.5%
|
92.8%
|
87.6%
|
42.9%
|
Operating costs
|
(818.7)
|
(343.1)
|
(344.9)
|
(1,506.7)
|
(25.1)
|
(43.7)
|
(1,575.5)
|
Fair value adjustments to
investment properties
|
-
|
-
|
-
|
-
|
(6.5)
|
-
|
(6.5)
|
Gain on disposal of
properties
|
-
|
-
|
-
|
-
|
95.4
|
-
|
95.4
|
Profit from trading
|
454.7
|
134.0
|
156.6
|
745.3
|
97.3
|
65.8
|
908.4
|
Depreciation &
amortisation
|
(117.8)
|
(41.4)
|
(46.3)
|
(205.5)
|
(36.0)
|
(0.9)
|
(242.4)
|
Impairments net of impairment
reversals
|
(25.1)
|
(56.9)
|
(133.8)
|
(215.8)
|
(23.9)
|
-
|
(239.7)
|
Share-based payments
|
(19.3)
|
|
|
(19.3)
|
|
|
(19.3)
|
Foreign exchange
realised
|
35.8
|
0.1
|
(4.7)
|
31.2
|
|
|
31.2
|
Exceptional items
|
-
|
55.2
|
16.9
|
72.1
|
-
|
25.0
|
97.1
|
Operating profit
|
328.3
|
91.0
|
(11.3)
|
408.0
|
37.4
|
89.9
|
535.3
|
Gain on sale of
subsidiaries/discontinued operations
|
|
17.6
|
Net investment income
|
|
108.0
|
Net finance costs
|
|
(22.9)
|
Profit before tax
|
|
638.0
|
Exceptional items
|
|
(97.1)
|
Result from discontinued
operation
|
|
26.4
|
Fair value adjustment to
derivative financial instruments
|
|
(32.5)
|
Fair value losses on equity
derivatives
|
|
(41.1)
|
Realised FX gain
|
|
(31.2)
|
Share-based payments
|
|
19.3
|
Adjusted profit before tax ("APBT")
|
|
481.8
|
1)
The FY23 results have been re-categorised due to
changes in the reporting segments, with the creation of new
Property and Financial Services segments, and the Wholesale and
Licensing Segment being absorbed into the UK Sports and
International segments. They have also been restated for the
reclassification as rental income (note 1).
Inter-segment sales are priced at
cost plus a 10% mark-up.
Other segmental items included in
the income statement for the 53 weeks ended 30 April 2023:
|
UK Sports
|
Premium
lifestyle
|
International
|
Retail
|
Property
|
Financial
Services
|
Group
Total
|
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
Property, plant & equipment
depreciation
|
(95.6)
|
(35.6)
|
(19.0)
|
(150.2)
|
(36.0)
|
(0.9)
|
(187.1)
|
Property, plant & equipment
impairment
|
(14.0)
|
(17.2)
|
(1.4)
|
(32.6)
|
(23.9)
|
-
|
(56.5)
|
IFRS 16 ROU
depreciation
|
(40.0)
|
(6.6)
|
(28.6)
|
(75.2)
|
-
|
-
|
(75.2)
|
IFRS 16 ROU impairment
|
(6.2)
|
(19.2)
|
(17.7)
|
(43.1)
|
-
|
-
|
(43.1)
|
Fair value adjustments to
investment properties
|
-
|
-
|
-
|
-
|
(6.5)
|
-
|
(6.5)
|
IFRS 16 disposal and
modification/remeasurement of lease liabilities
|
17.8
|
0.8
|
8.2
|
26.8
|
-
|
-
|
26.8
|
Intangible amortisation
|
-
|
-
|
(6.9)
|
(6.9)
|
-
|
-
|
(6.9)
|
Intangible impairment
|
(4.9)
|
(20.5)
|
(114.7)
|
(140.1)
|
-
|
-
|
(140.1)
|
1)
The FY23 results have been re-categorised due to
changes in the reporting segments, with the creation of new
Property and Financial Services segments, and the Wholesale and
Licensing Segment being absorbed into the UK Sports and
International segments.
4.
EXCEPTIONAL ITEMS
|
52 weeks
ended
|
53 weeks
ended
|
|
28 April
2024
|
30 April
2023
|
|
(£'m)
|
(£'m)
|
Fair value gain on
associate
|
-
|
16.9
|
Adjustment to Studio regulatory
provision
|
-
|
25.0
|
Gain on bargain purchase
|
-
|
55.2
|
|
-
|
97.1
|
The gain on bargain purchase in the
prior period relates to acquisition of JD brands.
The fair value gain on associate in
the prior year arose as a result of the disposal of 51% of Kangol
LLC, following the loss of control.
5.
INVESTMENT INCOME
|
52 weeks
ended
|
53 weeks
ended
|
|
28 April
2024
|
30 April
2023
|
|
(£'m)
|
(£'m)
|
Premium received on equity
derivatives
|
76.1
|
63.9
|
Fair value gain on equity
derivatives
|
-
|
45.7
|
Dividend income
|
2.3
|
3.0
|
|
78.4
|
112.6
|
The premium received on equity
derivatives mainly relates to written Hugo Boss options. In the
prior year, the fair value gain on equity derivatives mainly
relates to Hugo Boss options.
6.
INVESTMENT COSTS
|
52 weeks
ended
|
53 weeks
ended
|
|
28 April
2024
|
30 April
2023
|
|
(£'m)
|
(£'m)
|
Loss on disposal of equity
derivatives
|
36.5
|
4.6
|
Fair value loss on equity
derivatives
|
32.4
|
-
|
|
68.9
|
4.6
|
The loss on equity derivatives
relates to losses across the strategic investments portfolio
including Hugo Boss.
7.
FINANCE INCOME
|
52 weeks
ended
|
53 weeks
ended
|
|
28 April
2024
|
30 April
2023
|
|
(£'m)
|
(£'m)
|
Bank interest receivable
|
15.8
|
9.7
|
Other finance income
|
-
|
3.9
|
Fair value adjustment to
derivatives*
|
27.6
|
32.5
|
|
43.4
|
46.1
|
*Includes £6.1m (FY23: £8.4m) from
interest rate swaps.
8.
FINANCE COSTS
|
52 weeks
ended
|
53 weeks
ended
|
|
28 April
2024
|
30 April
2023
|
|
(£'m)
|
(£'m)
|
Interest on bank loans and
overdrafts
|
66.8
|
41.4
|
Other interest
|
0.4
|
9.4
|
IFRS 16 lease interest
|
24.3
|
18.2
|
|
91.5
|
69.0
|
9.
TAXATION
|
52 weeks
ended
|
53 weeks
ended
|
|
28 April
2024
|
30 April
2023
|
|
(£'m)
|
(£'m)
|
Current tax
|
127.5
|
145.2
|
Adjustment in respect of prior
periods
|
(8.9)
|
(1.0)
|
Total current tax
|
118.6
|
144.2
|
|
|
|
Deferred tax
|
(0.7)
|
39.7
|
Adjustment in respect of prior
periods
|
(10.0)
|
(24.5)
|
Total deferred tax
|
(10.7)
|
15.2
|
|
|
|
|
107.9
|
159.4
|
|
Profit before taxation - continuing
operations
|
507.0
|
638.0
|
(Loss)/profit before taxation -
discontinued operations
|
(12.5)
|
26.4
|
Total Profit before taxation
|
494.5
|
664.4
|
Taxation at the standard rate of tax
in the UK of 25% (FY23: 19.5%)
|
123.6
|
129.6
|
|
Non-taxable income
|
(23.5)
|
(18.7)
|
Expenses not deductible for tax
purposes
|
34.3
|
70.9
|
Other tax adjustments
|
(7.6)
|
3.1
|
Adjustments in respect of prior
periods - current tax
|
(8.9)
|
(1.0)
|
Adjustments in respect of prior
periods - deferred tax
|
(10.0)
|
(24.5)
|
Changes in deferred tax
rate
|
-
|
-
|
|
107.9
|
159.4
|
|
|
|
Tax charge - continuing
operations
|
107.9
|
159.3
|
Tax charge - discontinued
operations
|
-
|
0.1
|
Total tax charge
|
107.9
|
159.4
|
Expenses not deductible for tax
purposes largely relates to non-qualifying depreciation and
impairments not qualifying for tax allowances.
10.
EARNINGS PER SHARE FROM TOTAL AND CONTINUING OPERATIONS
ATTRIBUTABLE TO THE EQUITY SHAREHOLDERS
Basic earnings per share is
calculated by dividing the earnings attributable to ordinary
shareholders of the parent by the weighted average number of
ordinary shares outstanding during the year.
For diluted earnings per share, the
weighted average number of shares, 438,504,703 (FY23: 459,911,330), is adjusted to
assume conversion of all dilutive potential ordinary shares under
the Group's share schemes, being nil (FY23: nil), to give the diluted weighted average number of
shares of 438,504,703 (FY23: 459,911,330). There is
therefore no difference between the Basic and Diluted EPS
calculations for both periods. Shares bought back into treasury are
deducted when calculating the weighted average number of shares
below.
Basic and Diluted Earnings Per Share
|
52 weeks
ended
|
52 weeks
ended
|
52 weeks
ended
|
53 weeks
ended
|
53 weeks
ended
|
53 weeks
ended
|
|
28 April
2024
|
28 April
2024
|
28 April
2024
|
30 April
2023
(restated)1
|
30 April
2023
(restated)1
|
30 April
2023
(restated)1
|
|
Basic and diluted,
continuing operations
|
Basic and diluted,
discontinued operations
|
Basic and diluted,
total
|
Basic and diluted,
continuing operations
|
Basic and diluted,
discontinued operations
|
Basic and diluted,
total
|
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
Profit for the period
|
393.3
|
(12.5)
|
380.8
|
465.4
|
26.3
|
491.7
|
|
Number in
thousands
|
Number in
thousands
|
Number in
thousands
|
Number in
thousands
|
Number in
thousands
|
Number in
thousands
|
Weighted average number of
shares
|
438,505
|
438,505
|
438,505
|
459,911
|
459,911
|
459,911
|
|
Pence per
share
|
Pence per
share
|
Pence per
share
|
Pence per
share
|
Pence per
share
|
Pence per
share
|
Earnings per share
|
89.7
|
(2.9)
|
86.8
|
101.2
|
5.7
|
106.9
|
(1)
Restated to reflect the change in accounting
policy regarding the valuation of investment property and
reclassification of rental income. Please refer to note 1 for
further details.
Adjusted Earnings Per Share
The adjusted earnings per share
reflects the underlying performance of the business compared with
the prior period and is calculated by dividing adjusted earnings by
the weighted average number of shares for the period. Adjusted
earnings is used by management as a measure of profitability within
the Group. Adjusted earnings is defined as profit for the period
attributable to equity holders of the parent for each financial
period but excluding the post-tax effect of certain non-trading
items. Tax has been calculated with
reference to the effective rate of tax for the Group.
The Directors believe that the
adjusted earnings and adjusted earnings per share measures provide
additional useful information for shareholders on the underlying
performance of the business and are consistent with how business
performance is measured internally. Adjusted earnings is not a
recognised profit measure under IFRS and may not be directly
comparable with adjusted profit measures used by other
companies.
|
52 weeks
ended
|
52 weeks
ended
|
53 weeks
ended
|
53 weeks
ended
|
|
28 April
2024
|
28 April
2024
|
30 April
2023
|
30 April
2023
|
|
Basic
|
Diluted
|
Basic
|
Diluted
|
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
Profit for the period
|
380.8
|
380.8
|
491.7
|
491.7
|
Pre-tax adjustments to profit /
(loss) for the period for the following items:
|
|
|
|
|
Exceptional items
|
-
|
-
|
(97.1)
|
(97.1)
|
Fair value adjustment to derivatives
included within finance (income)
|
(27.6)
|
(27.6)
|
(32.5)
|
(32.5)
|
Fair value losses/(gains) and
loss/(profit) on disposal of equity derivatives
|
68.9
|
68.9
|
(41.1)
|
(41.1)
|
Realised foreign exchange
gains
|
(14.4)
|
(14.4)
|
(31.2)
|
(31.2)
|
Share based payments
|
23.4
|
23.4
|
19.3
|
19.3
|
|
|
|
|
|
Tax adjustments on the above
items
|
(11.0)
|
(11.0)
|
20.8
|
20.8
|
|
|
|
|
|
Adjusted profit for the period
|
420.1
|
420.1
|
329.9
|
329.9
|
|
|
|
|
|
|
Number in
thousands
|
Number in
thousands
|
Number in
thousands
|
Number in
thousands
|
Weighted average number of
shares
|
438,505
|
438,505
|
459,911
|
459,911
|
|
Pence per
share
|
Pence per
share
|
Pence per
share
|
Pence per
share
|
Adjusted Earnings per
share
|
95.8
|
95.8
|
71.7
|
71.7
|
11.
DISCONTINUED OPERATIONS AND SALE OF SUBSIDIARIES
On 20 December 2023, the Group
acquired the Matches business ("Matches") from MF Intermediate
Limited, by way of the purchase of 100% of the shares of a group of
6 companies (of which MatchesFashion Limited was the main trading
subsidiary) and the acquisition of the senior and junior debt owed
by those companies. The consideration payable was
£51.9m.
Following the acquisition, the
Group provided significant funding to Matches but the business
continued to generate material trading losses. As a result of this,
the management concluded that the funding requirements of the
business would be far in excess of amounts that the Group considers
to be viable and on 8 March 2024 administrators were appointed.
From this point, the Group was no longer exposed to and no longer
had rights to variable returns from Matches and lost its ability to
influence these returns through its power over the entity.
Therefore, in accordance with IFRS 10 Consolidated Financial
Statements ("IFRS 10") management concluded that it no longer had
control over Matches.
In accordance with IFRS 5.32,
management considered that Matches constituted a separate major
line of business that had been disposed of and that it therefore
met the criteria to be classified as a discontinued
operation.
Details of the disposal
|
Period
ended
28 April
2024
|
|
(£'m)
|
Total disposal
consideration
|
74.7
|
Carrying amount of net assets
disposed of
|
(78.8)
|
Loss on disposal after income tax
|
(4.1)
|
All amounts are attributable to
the owners of the parent.
Total disposal consideration of
£74.7m reflects loans due to the Group
from Matches at the point of
disposal, net of
a provision for expected credit loss.
In period between the
administrators' appointment and 28 April 2024, the Group purchased
the brand names and intellectual property of Matches for £20.0m,
with the consideration payable being treated as a reduction in the
amounts owed to the Group by Matches.
A first dividend of £30.0m was
received from the administrators prior to year-end leaving and
outstanding balance of £24.7m at year end, which is recorded within
trade and other receivables.
Financial performance and cash flow
information
|
20 December 2023
to
|
|
28 April
2024
|
|
(£'m)
|
Revenue
|
29.9
|
Expenses
|
(38.3)
|
Loss after tax of discontinued operation
|
(8.4)
|
Loss on disposal
|
(4.1)
|
Loss from discontinued operation
|
(12.5)
|
|
|
Net cash outflow from operating
activities
|
(9.1)
|
Net cash outflow from investing
activities
|
(5.3)
|
Net
decrease in cash generated by the discontinued
operation
|
(14.4)
|
The carrying amounts of assets and
liabilities at the date of disposal on 8 March 2024 were as
follows:
|
(£'m)
|
Goodwill
|
1.9
|
Intangible assets
|
20.0
|
Inventories
|
73.9
|
Trade and other
receivables
|
34.9
|
Cash and cash equivalents
|
20.0
|
Total assets
|
150.7
|
Trade and other payables
|
(45.8)
|
Provisions
|
(12.3)
|
Lease liabilities
|
(13.8)
|
Total liabilities
|
(71.9)
|
|
|
Net
assets of the disposal group
|
78.8
|
Disposal of subsidiaries
During the current period, the
Group sold certain intellectual property assets relating to
Missguided for net consideration of approximately
£25.0m.
Summary of FY23 discontinued operation and disposals of
subsidiaries
On 24 May 2022, the Group disposed
of its US retail businesses trading as Bobs Stores and Eastern
Mountain Sports for net cash consideration of approximately £43.6m.
The disposal took place through the sale of 100% of the share
capital of Roberts 50 USA LLC and its subsidiaries to GoDigital
Media Group.
As per IFRS 5, this disposal group
was classified as held for sale and as a discontinued operation in
FY22. A profit on disposal of £26.3m was recognised in the
Consolidated Income Statement in the prior year.
The reconciliation of the
transaction is detailed below:
|
30 April
2023
|
|
(£'m)
|
Net assets disposed of (including FX
revaluation)
|
(18.9)
|
Cash received, net of transaction
costs and cash disposed of
|
43.6
|
Gain on sale before income tax and reclassification of
foreign currency translation reserve
|
24.7
|
Reclassification of foreign currency
translation reserve
|
1.6
|
Gain on sale after income tax
|
26.3
|
The Consolidated Cash Flow
Statement in the prior year included the following amounts relating
to this discontinued operation:
|
53 weeks
ended
|
|
30 April
2023
|
|
(£'m)
|
Operating activities
|
(2.2)
|
Financing activities
|
(0.5)
|
Net
cash outflow from discontinued operations
|
(2.7)
|
Additionally, during the prior
period, consideration of £2.9m was received in respect of the
Group's disposal of a 51% shareholding in Kangol LLC to Bollman Hat
Company. Total proceeds received from disposals of discontinued
operations and subsidiaries in the prior period was therefore
£46.5m.
12. PROPERTY, PLANT AND EQUIPMENT
|
Right of use
assets*
|
Freehold land and
Buildings
|
Long-term
Leaseholds
|
Short-term leasehold
improvements
|
Plant and
Equipment
|
Total
|
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
COST
|
|
|
|
|
|
|
At
24 April 2022
|
686.6
|
904.0
|
155.7
|
125.1
|
995.8
|
2,867.2
|
Acquisitions (see note
32)
|
43.0
|
-
|
15.7
|
-
|
7.6
|
66.3
|
Additions
|
98.0
|
97.5
|
6.0
|
1.1
|
275.5
|
478.1
|
Eliminated on disposals
|
(111.2)
|
(60.1)
|
(34.3)
|
-
|
(65.6)
|
(271.2)
|
Reclassifications /
Remeasurements
|
7.6
|
(1.5)
|
-
|
-
|
-
|
6.1
|
Exchange differences
|
12.6
|
(13.3)
|
0.6
|
0.3
|
18.6
|
18.8
|
At
30 April 2023
|
736.6
|
926.6
|
143.7
|
126.5
|
1,231.9
|
3,165.3
|
Additions
|
81.3
|
15.5
|
6.8
|
-
|
169.4
|
273.0
|
Eliminated on disposals
|
(75.1)
|
(16.5)
|
(2.1)
|
(14.7)
|
(96.0)
|
(204.4)
|
Reclassifications /
Remeasurements
|
15.2
|
(83.9)
|
(3.0)
|
-
|
(10.6)
|
(82.3)
|
Exchange differences
|
(2.6)
|
(3.3)
|
(0.4)
|
(0.5)
|
(5.2)
|
(12.0)
|
At
28 April 2024
|
755.4
|
838.4
|
145.0
|
111.3
|
1,289.5
|
3,139.6
|
|
|
|
|
|
|
|
ACCUMULATED DEPRECIATION AND IMPAIRMENT
|
|
|
|
|
|
|
At
24 April 2022
|
(491.9)
|
(420.5)
|
(63.0)
|
(121.4)
|
(759.4)
|
(1,856.2)
|
Charge for the period
|
(75.2)
|
(43.8)
|
(11.4)
|
(1.7)
|
(130.2)
|
(262.3)
|
Impairment
|
(43.1)
|
(23.9)
|
(0.2)
|
-
|
(32.2)
|
(99.4)
|
Eliminated on disposals
|
110.8
|
16.7
|
11.6
|
(0.9)
|
57.0
|
195.2
|
Reclassifications /
Remeasurements
|
-
|
0.2
|
-
|
-
|
-
|
0.2
|
Exchange differences
|
(9.4)
|
4.3
|
(0.3)
|
(0.3)
|
(5.1)
|
(10.8)
|
At
30 April 2023
|
(508.8)
|
(467.0)
|
(63.3)
|
(124.3)
|
(869.9)
|
(2,033.3)
|
Charge for the period
|
(83.2)
|
(17.4)
|
(17.4)
|
(0.1)
|
(164.7)
|
(282.8)
|
Impairment
|
5.2
|
6.8
|
(6.7)
|
-
|
(19.8)
|
(14.5)
|
Eliminated on disposals
|
75.1
|
4.4
|
3.0
|
14.1
|
32.0
|
128.6
|
Reclassifications /
Remeasurements
|
(3.4)
|
12.7
|
(3.7)
|
0.2
|
8.9
|
14.7
|
Exchange differences
|
5.1
|
0.6
|
0.2
|
0.4
|
4.0
|
10.3
|
At
28 April 2024
|
(510.0)
|
(459.9)
|
(87.9)
|
(109.7)
|
(1,009.5)
|
(2,177.0)
|
|
|
|
|
|
|
|
NET
BOOK VALUE
|
|
|
|
|
|
|
At
28 April 2024
|
245.4
|
378.5
|
57.1
|
1.6
|
280.0
|
962.6
|
At
30 April 2023
|
227.8
|
459.6
|
80.4
|
2.2
|
362.0
|
1,132.0
|
At
24 April 2022
|
194.7
|
483.5
|
92.7
|
3.7
|
236.4
|
1,011.0
|
*ROU assets have been
restated to reflect the change in
accounting policy regarding the valuation of investment property.
Please refer to note 1 for further details. Lease
arrangements for ground rents have also been reclassified to
investment properties as they are now recognised and measured as
part of the fair values of investment property.
13. INVESTMENT PROPERTIES
|
Freehold land and
Buildings
|
|
(£'m)
|
Fair value at 24 April 2022*
|
95.5
|
|
|
Direct acquisitions
|
107.0
|
Less right-of-use asset
additions
|
(18.7)
|
Transfer from property, plant and
equipment - at fair value
|
1.3
|
Disposals
|
(37.3)
|
Net loss from fair value adjustment
on investment properties
|
(6.5)
|
Market value per valuation report
|
141.3
|
|
|
Lease liabilities on ground
leases
|
18.7
|
|
|
Fair value at 30 April 2023*
|
160.0
|
|
|
Lease liabilities on ground leases
brought forward
|
(18.7)
|
Direct acquisitions
|
99.2
|
Less right-of-use asset
additions
|
(23.7)
|
Transfer from property, plant and
equipment - at fair value
|
79.4
|
Net gain from fair value adjustment
on investment properties
|
11.5
|
Market value per valuation report
|
307.7
|
|
|
Lease liabilities on ground
leases
|
42.8
|
|
|
Fair value at 28 April 2024
|
350.5
|
*Restated to reflect the change in
accounting policy regarding the valuation of investment property.
Please refer to note 1 for further details.
The rental income from Investment
Properties recognised in the consolidated income statement for the
year was £38.7m (FY23: £23.7m).
Valuation processes
The Group's investment properties
were valued as at 28 April 2024 by the
Group's internal property team who are appropriately qualified
chartered surveyors, follow the applicable valuation methodology of
the Royal Institute of Chartered Surveyors, and have recent
experience in the locations and segments of the investment
properties valued. For all investment properties, their current use
equates to the highest and best use. The Group's finance department
includes a team that reviews the valuations performed by the
property team for financial reporting purposes. This team reports
directly to the Chief Financial Officer (CFO) and the Audit
Committee (AC). Discussions of valuation processes and results are
held between the finance department and the property team in August
and February each year.
At each financial discussion, the
finance department verifies all major inputs to the valuation
report and assesses property valuation movements when compared to
the previous valuation report.
Measurement of fair value of investment
property
Properties valued by the
Group's internal property team are valued on an
open market basis based on active market prices adjusted for any
differences in the nature, location or condition of the specified
asset such as plot size, encumbrances and current use. If this
information is not available, alternative valuation methods are
used such as recent prices on less active markets, or discounted
cashflow projections. The significant unobservable input is the
adjustment for factors specific to the properties in question. The
extent and direction of this adjustment depends on the number and
characteristics of the observable market transactions in similar
properties that are used as the starting point for the valuation.
Although this input is a subjective judgement, management consider
that the overall valuation would not be materially altered by any
reasonable alternative assumptions. All of the valuations across
the Group's investment property are considered to be level 3 fair
values.
The market value of the investment
properties has been supported by comparison to that produced under
income capitalisation techniques applying yield as a key
unobservable input. The range of yield applied is 7.0% to
20.0%.
The fair value of an investment
property reflects, among other things, rental income from current
leases and assumptions about future rental lease income based on
current market conditions and anticipated plans for the
property
14. INTANGIBLE ASSETS
|
Goodwill
|
Trademarks and
licenses
|
Brands
|
Customer
related
|
Total
|
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
COST
|
|
At
24 April 2022
|
176.8
|
91.1
|
87.0
|
5.7
|
360.6
|
Acquisitions (note 32)
|
35.6
|
11.7
|
-
|
-
|
47.3
|
Additions
|
-
|
1.0
|
-
|
-
|
1.0
|
Disposals
|
(0.2)
|
(2.3)
|
-
|
-
|
(2.5)
|
Exchange adjustments
|
2.5
|
0.3
|
1.8
|
-
|
4.6
|
At
30 April 2023
|
214.7
|
101.8
|
88.8
|
5.7
|
411.0
|
Acquisitions (note 32)
|
4.2
|
20.0
|
-
|
-
|
24.2
|
Additions
|
-
|
25.0
|
-
|
-
|
25.0
|
Disposals
|
(1.9)
|
(20.0)
|
-
|
-
|
(21.9)
|
Exchange adjustments
|
-
|
(0.1)
|
0.3
|
-
|
0.2
|
At
28 April 2024
|
217.0
|
126.7
|
89.1
|
5.7
|
438.5
|
|
|
|
|
|
|
AMORTISATION AND IMPAIRMENT
|
|
At
24 April 2022
|
(132.4)
|
(87.3)
|
(19.3)
|
(1.0)
|
(240.0)
|
Amortisation charge
|
-
|
(0.9)
|
(6.0)
|
-
|
(6.9)
|
Impairment
|
(71.7)
|
(11.7)
|
(52.0)
|
(4.7)
|
(140.1)
|
Disposals
|
0.4
|
2.3
|
-
|
-
|
2.7
|
Exchange adjustments
|
(1.1)
|
(0.3)
|
(1.2)
|
-
|
(2.6)
|
At
30 April 2023
|
(204.8)
|
(97.9)
|
(78.5)
|
(5.7)
|
(386.9)
|
Amortisation charge
|
-
|
(0.5)
|
(1.3)
|
-
|
(1.8)
|
Impairment
|
(2.3)
|
(4.6)
|
-
|
-
|
(6.9)
|
Disposals
|
-
|
-
|
-
|
-
|
-
|
Exchange adjustments
|
-
|
(0.4)
|
(0.3)
|
-
|
(0.7)
|
At
28 April 2024
|
(207.1)
|
(103.4)
|
(80.1)
|
(5.7)
|
(396.3)
|
|
|
At
28 April 2024
|
9.9
|
23.3
|
9.0
|
-
|
42.2
|
At 30 April 2023
|
9.9
|
3.9
|
10.3
|
-
|
24.1
|
At 24 April 2022
|
44.4
|
3.8
|
67.7
|
4.7
|
120.6
|
|
|
|
|
|
| |
Amortisation is charged to
selling, distribution and administrative expenses in the
Consolidated Income Statement.
Goodwill, trademarks and licenses
and brands that are acquired in a business combination are
allocated, at acquisition, to the CGUs that are
expected to benefit from that
business combination. After recognition of impairment losses, the
carrying amount of these assets at the start and end of the current
period are allocated as follows:
|
28 April
2024
|
|
Goodwill
|
Trademarks and
licenses
|
Brands
|
Total
|
|
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
|
Wholesale & Licensing (excl.
Everlast)
|
9.9
|
-
|
-
|
9.9
|
|
Everlast
|
-
|
3.0
|
9.0
|
12.0
|
|
Matches
|
-
|
20.0
|
-
|
20.0
|
|
|
9.9
|
23.0
|
9.0
|
41.9
|
|
|
30 April
2023
|
|
Goodwill
|
Trademarks and
licenses
|
Brands
|
Total
|
|
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
|
Wholesale & Licensing (excl.
Everlast)
|
9.9
|
-
|
-
|
9.9
|
|
Everlast
|
-
|
3.3
|
10.3
|
13.6
|
|
|
9.9
|
3.3
|
10.3
|
23.5
|
|
Acquisitions
In the current period, goodwill and
trademarks with a fair value of £24.2m (FY23: £47.3m) were
recognised as part of business combinations with £21.9m relating to
the Matches acquisition. See note 32 for details. The goodwill and
trademarks recognised in respect of Matches were derecognised once
the business went into administration on 8 March 2024. See note 16
for details. Following a review of the trading performance of the
other businesses acquired the goodwill was fully impaired as the
recoverable amount on a value in use basis was estimated to be
£nil.
Additions
In period between the
administrators' appointment and 28 April 2024, the Group purchased
the brand names and intellectual property of Matches for £20.0m
(see note 11 for further details). The assets acquired were assumed
to have a useful economic life of 15 years. Management does not
consider that there was any indicator of impairment at the
reporting date.
During the current period, the
Group also acquired other trademarks and brand names with a cost
value of £5m. These assets were fully
impaired as the recoverable amount on a value in use basis was
estimated to be £nil.
Amortisation
The brands, trademarks &
licenses allocated to the Everlast CGU are being amortised over a
15-year period. The amortisation charge in the current period is
£1.3m (FY23: £6.5m) and is disclosed within selling, distribution
and administrative expenses in the Consolidated Income
Statement. The remaining useful economic life of these assets
is 10 years (FY23: 11 years).
Impairment review
The Group tests the carrying
amount of goodwill and intangible assets with an indefinite life
for impairment annually or more frequently if there are indications
that their carrying value might be impaired. The carrying amounts
of other intangible assets are reviewed for impairment if there is
an indicator of impairment.
The recoverable amounts of the
Wholesale & Licensing (excl. Everlast) and Everlast CGUs have
been determined by reference to value in use calculations. The
recoverable amounts were then compared to the carrying value of the
assets allocated to each CGU to assess the level impairment
required, if any.
No impairment testing was
performed on the intellectual property purchased from Matches due
to the absence of any indicator of impairment and the proximity of
the transaction to the reporting date.
Significant judgements,
assumptions, and estimates
In determining the value in use of
CGUs it is necessary to make a series of assumptions to estimate
the present value of future cash flows. In each case, these key
assumptions have been made by management reflecting past
experience, current trends, and where applicable, are consistent
with relevant external sources of information. The key assumptions
are as follows:
|
28 April
2024
|
30 April
2023
|
|
Wholesale & Licensing
(excl. Everlast)
|
Everlast
|
Wholesale & Licensing
(excl. Everlast)
|
Everlast
|
5-year average annual forecast
sales decline
|
(1.7%)
|
(1.8%)
|
(3.0%)
|
(2.6%)
|
Discount rate
|
9.8%
|
13.5%
|
8.5%
|
14.2%
|
Annual % increase in operating
costs
|
-
|
-
|
-
|
3.0%
|
Terminal growth rate
|
2.0%
|
2.0%
|
2.0%
|
2.0%
|
Management has prepared cash flow
forecasts for a five-year period derived from the actual results
for financial year 2023/24. These forecasts include assumptions
around sales prices and volumes, specific customer relationships
and operating costs and working capital movements.
The average rate of annual sales
decline forecast for the Everlast CGU of 1.7% pa is less
pessimistic than the 2.6% pa in the prior year and is reflective of
management's latest view of the business' prospects in the
medium-term due to current restructuring underway.
The pre-tax rates used to discount
the forecast cash flows are shown above and are derived from the
Group's weighted average cost of capital as adjusted for the
specific risks related to each CGU.
Overhead costs in the Everlast CGU
have been assumed to remain flat (FY23: 3.0% pa increase)
throughout the forecast period on the basis that inflationary cost
increases will be offset by operational efficiencies due to current
restructuring underway.
To forecast beyond the detailed
cash flows into perpetuity, a long-term average growth rate of 2.0%
(FY23: 2.0%) has been used. This is not greater than the published
International Monetary Fund average growth rate in gross domestic
product for the next five-year period in the territories where the
CGUs operate. The growth rate was assessed separately for each CGU
however the 2.0% rate was deemed appropriate in both
cases.
Results
The recoverable amount of the
Wholesale & Licensing (excluding Everlast) CGU exceeds its
carrying value by approximately £72.7m (FY23: £82.0m) and as such
no impairment was required.
The recoverable amount of the
Everlast CGU exceeds its carrying value by approximately £9.0m
(FY23: £87.9m impairment loss) and as such no impairment was
required.
Sensitivity
Analysis
The table below shows changes to
the terminal growth rate, risk adjusted discount rate and forecast
operating cash flow assumptions used in the calculation of value in
use for the Everlast CGU to make
recoverable amount of CGU equal to its carrying value:
|
|
Everlast
|
|
|
|
|
Value in use
|
|
£55.2m
|
|
|
|
|
Current headroom
|
|
£9.0m
|
|
|
|
|
|
|
|
|
|
|
Change in key assumption
required to make recoverable amount of CGU equal to its carrying
value
|
|
|
Current Terminal Growth
Rate
|
|
2.0%
|
|
|
|
Revised Terminal Rate of
Decline
|
|
(0.9%)
|
|
|
|
|
|
|
|
|
|
Current Discount Rate
|
|
13.5%
|
|
|
|
Revised Discount Rate
|
|
13.9%
|
|
|
|
|
|
|
|
|
|
Current 5-year average annual forecast sales decline
|
|
(1.8%)
|
|
|
|
Revised 5-year average annual forecast sales decline
|
|
(2.1%)
|
|
|
|
|
|
|
|
|
Current annual % increase in operating costs
|
-
|
|
|
|
Revised annual % increase in operating costs
|
1.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based on the results of the
impairment test for the Wholesale & Licensing (excluding
Everlast) CGU and the immaterial carrying value of the remaining
goodwill, management are satisfied that there is sufficient
headroom against the carrying value such that a reasonably possible
change in assumption would not lead to an impairment. Consequently,
no sensitivity analysis has been disclosed for this CGU.
Climate
Change
Management considered the impact
of climate change when conducting its impairment review and
concluded that it was unlikely to have a material impact on the
assumptions based on the following:
· The
relevant tangible assets have relatively short useful economic
lives and are not considered to be in locations that will be
materially impacted by climate change (i.e., they are in the USA -
a developed country).
· The
forecasts include estimates for ongoing capital expenditure, which
management consider to be sufficient to make any essential climate
change related acquisitions (e.g., solar panels or building energy
management systems).
15. LONG-TERM FINANCIAL ASSETS
The Group is not looking to make
gains through increases in market prices of its long-term financial
assets, therefore on initial application of IFRS 9 the Group made
the irrevocable election to account for long term financial assets
at fair value through other comprehensive income (FVOCI). The
election has been made on an instrument-by-instrument basis, only
qualifying dividend income is recognised in profit and loss,
changes in fair value are recognised within OCI and never
reclassified to profit and loss, even if the asset is impaired,
sold or otherwise derecognised. All of the Group's long-term
financial assets are recognised in the UK Sports
segment.
The fair value of the long-term
financial assets is based on bid quoted
market prices at the balance sheet date or where market prices are
not available, at management's estimate of fair value.
The following table shows the
aggregate movement in the Group's financial assets during the
period:
|
28 April
2024
|
30 April
2023
|
|
(£'m)
|
(£'m)
|
At beginning of period
|
289.6
|
206.6
|
Additions
|
382.6
|
243.3
|
Disposals
|
(133.3)
|
(172.4)
|
Amounts recognised through other
comprehensive income
|
(43.7)
|
9.9
|
Exchange differences
|
0.2
|
2.2
|
|
495.4
|
289.6
|
Included within long-term
financial assets at the period ended 28 April 2024 are the
following direct interests held by the Group:
• 36.9% (FY23: 36.9%) interest in Mulberry Group Plc
• 31.1% (FY23: Nil%) interest in XXL ASA
• 24.5% (FY23: Nil%) interest in AO World Plc
• 22.7% (FY23: Nil%) interest in Boohoo Group Plc
• 20.4% (FY23: 17.6%) interest in N Brown Group Plc
• 20.2% (FY23: 5.5%) interest in ASOS Plc
• 9.3%
(FY23: Nil%) interest in Hornby Plc
• 6.6%
(FY23: Nil%) interest in Currys Plc
• Various other interests, none of which represent more than
5.0% of the voting power of the investee
The following table shows the fair
value of each of the Group's long-term financial assets (all
listed):
|
28 April
2024
|
30 April
2023
|
|
(£'m)
|
(£'m)
|
AO World plc
|
150.1
|
-
|
Boohoo Group plc
|
98.4
|
-
|
ASOS plc
|
83.1
|
40.5
|
Currys plc
|
46.1
|
-
|
XXL ASA
|
31.9
|
-
|
Mulberry Group plc
|
23.8
|
53.2
|
N Brown Group plc
|
13.4
|
23.5
|
Hornby plc
|
5.2
|
-
|
Other*
|
43.4
|
172.4
|
At
end of period
|
495.4
|
289.6
|
*Other relates to interests which
do not represent more than 5.0% of the voting power of the investee
as at 28 April 2024.
These holdings have been assessed
under IFRS 9 Financial Instruments and categorised as long-term
financial assets, as the Group does not consider them to be
associates and therefore, they are not accounted for on an equity
basis, see note 2.
Our strategic investments are
intended to allow us to develop relationships and commercial
partnerships with the relevant retailers and brands.
16. TRADE AND OTHER RECEIVABLES
|
52 weeks
ended
|
53 weeks
ended
|
|
28 April
2024
|
30 April
2023
|
|
(£'m)
|
(£'m)
|
Gross credit customer
receivables
|
286.9
|
326.0
|
Allowance for expected credit loss
on credit customer receivables
|
(80.7)
|
(100.1)
|
Net
credit customer receivables
|
206.2
|
225.9
|
Trade receivables
|
91.6
|
65.6
|
Deposits in respect of derivative
financial instruments
|
139.0
|
190.1
|
Amounts owed by related parties (see
note 34)
|
6.6
|
4.7
|
Other receivables
|
128.1
|
122.3
|
Prepayments
|
103.4
|
111.5
|
|
674.9
|
720.1
|
Following the acquisition of
Frasers Group Financial Services Limited
(formerly known as Studio Retail Limited) in
FY22, credit customer receivables now make up a significant element
of trade and other receivables. Further disclosure with regards to
the credit customer receivables and the associated allowance for
expected credit loss can be found at the end of this
note.
Trade and other receivables
The Directors consider that the
carrying amount of trade and other receivables approximates to
their fair value. The maximum exposure to credit risk at the
reporting date is the carrying value of each class of asset above,
plus any cash balances. Other receivables also include unremitted
sales receipts.
Deposits in respect of derivative
financial instruments are collateral to cover margin requirements
for derivative transactions held with counterparties. The
collateral requirement changes with the market (which is dependent
on share price and volatility), the financial institutions'
assessment of the Group's creditworthiness and further purchases /
sales of underlying investments held.
Credit Customer Receivables
Certain of the Group's trade
receivables are funded through a securitisation facility that is
secured against those receivables. The finance provider will seek
repayment of the finance, as to both principal and interest, only
to the extent that collections from the trade receivables financed
allows and the benefit of additional collections remains with the
Group. At the period end, receivables of £201.3m (FY23: £256.4m)
were eligible to be funded via the securitisation facility, and the
facilities utilised were £126.8m (FY23: £161.6m).
Other information
The average credit period taken on
sales of goods is 264 days (FY23: 222 days). On average, interest
is charged at 3.4% (FY23: 3.4%) per month on the outstanding
balance.
The Group will undertake a
reasonable assessment of the creditworthiness of a customer before
opening a new credit account or significantly increasing the credit
limit on that credit account. The Group will only offer credit
limit increases for those customers that can reasonably be expected
to be able to afford and sustain the increased repayments in line
with the affordability and creditworthiness assessment. There are
no customers (FY23: None) who represent more than 1% of the total
balance of the Group's trade receivables.
Where appropriate, the Group will
offer forbearance to allow customers reasonable time to repay the
debt. The Group will ensure that the forbearance option deployed is
suitable in light of the customer's circumstances (paying due
regard to current and future personal and financial circumstances).
Where repayment plans are agreed, the Group will ensure that these
are affordable to the customer and that unreasonable or
unsustainable amounts are not requested. At the balance sheet date
there were 25,170 accounts (FY23: 21,395) with total gross balances
of £16.6m (FY23: £14.3m) on repayment plans. Provisions are
assessed as detailed above.
During the current period, overdue
receivables with a gross value of £35.6m (FY23: £56.0m) were sold
to third party debt collection agencies. As a result of the sales,
the contractual rights to receive the cash flows from these assets
were transferred to the purchasers. Any gain or loss between actual
recovery and expected recovery is reflected within the impairment
charge.
Allowance for expected credit loss
The following tables provide
information about the exposure to credit risk and ECLs for trade
receivables from individual customers as at 28 April
2024:
|
28 April
2024
|
30 April
2023
|
|
Trade
receivables
|
Trade receivables on
forbearance arrangements
|
Total
|
Trade
receivables
|
Trade receivables on
forbearance arrangements
|
Total
|
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
Ageing of trade receivables
|
|
|
|
|
|
|
Not past due
|
206.7
|
15.7
|
222.4
|
242.5
|
13.0
|
255.5
|
Past due:
|
|
|
|
|
|
|
0 - 60 days
|
22.0
|
0.9
|
22.9
|
23.4
|
1.3
|
24.7
|
60 - 120 days
|
9.3
|
-
|
9.3
|
9.6
|
-
|
9.6
|
120+ days
|
32.3
|
-
|
32.3
|
36.2
|
-
|
36.2
|
Gross trade receivables
|
270.3
|
16.6
|
286.9
|
311.7
|
14.3
|
326.0
|
Allowance for expected credit
loss
|
(69.0)
|
(11.7)
|
(80.7)
|
(90.2)
|
(9.9)
|
(100.1)
|
Carrying value
|
201.3
|
4.9
|
206.2
|
221.5
|
4.4
|
225.9
|
|
1 May 2023 to 28 April
2024
|
|
Stage 1
|
Stage 2
|
Stage 3
|
Total
|
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
Gross trade receivables
|
185.6
|
47.3
|
54.0
|
286.9
|
Allowance for doubtful
debts:
|
|
|
|
|
Opening balance
|
(17.2)
|
(37.2)
|
(45.7)
|
(100.1)
|
Impairment
(charge)/release
|
(6.9)
|
5.0
|
(19.9)
|
(21.8)
|
Utilisation in period
|
6.4
|
13.3
|
21.5
|
41.2
|
Closing balance
|
(17.7)
|
(18.9)
|
(44.1)
|
(80.7)
|
Carrying value
|
167.9
|
28.4
|
9.9
|
206.2
|
Analysis of impairment
charge:
|
1 May 2023 to 28 April
2024
|
25 April 2022 to 30 April
2023
|
|
(£'m)
|
(£'m)
|
Impairment charge impacting on
provision
|
(21.8)
|
(22.2)
|
Recoveries
|
9.5
|
9.2
|
Other
|
(8.3)
|
(2.5)
|
Impairment charge
|
(20.6)
|
(15.5)
|
Sensitivity analysis
Management judgement is required
in setting assumptions around probabilities of default, cash
recoveries and the weighting of macro-economic scenarios applied to
the impairment model, which have a material impact on the results
indicated by the model.
A 1% increase/decrease in the
probability of default would increase/decrease the provision amount
by approximately £1.4m.
A 1% increase in the assumed
recoveries rate would result in the impairment provision decreasing
by approximately £0.8m.
Changing the weighting of
macro-economic scenarios to a more positive outlook so that the
severe-case scenario's weighting is halved to 5% and base reducing
by 10% to 45% (with upside increasing by 15% to 25% and downside
remaining at 25%) would result in the impairment provision reducing
by approximately £0.7m.
17. BORROWINGS
|
28 April
2024
|
30 April
2023
|
|
(£'m)
|
(£'m)
|
Current:
|
Lease liabilities
|
112.5
|
119.6
|
|
|
|
Non-Current
|
Bank and other loans
|
806.2
|
749.7
|
Lease liabilities
|
533.8
|
560.3
|
|
1,452.5
|
1,429.6
|
An analysis of the Group's total
borrowings other than bank overdrafts is as follows:
|
28 April
2024
|
30 April
2023
|
|
(£'m)
|
(£'m)
|
Borrowings - sterling
|
806.2
|
749.7
|
Group borrowings (excluding
Frasers Group Financial Services
Limited) are at a rate of interest of 3.4% (FY23:
2.0%) over the interbank rate of the country within which the
borrowing entity resides. The securitisation loan relating
to Frasers Group Financial Services Limited had a balance at 28 April 2024 of £126.8m (FY23: £161.6m).
The average interest rate paid on the securitisation loan
was 7.02% (FY23: 5.41%).
Reconciliation Of Liabilities Arising From Financing
Activities
The changes in the Group's
liabilities arising from financing activities can be classified as
follows:
|
Non-current
borrowings
|
Current
borrowings
|
Total
|
|
(£'m)
|
(£'m)
|
(£'m)
|
At
24 April 2022
|
1,331.5
|
117.0
|
1,448.5
|
|
|
|
|
Cash-flows:
|
|
|
|
- Borrowings drawn
down
|
616.8
|
-
|
616.8
|
- Borrowings repaid
|
(695.0)
|
-
|
(695.0)
|
|
|
|
|
Lease liability:
|
|
|
|
- IFRS 16 Lease Liabilities -
cash-flows
|
-
|
(140.7)
|
(140.7)
|
- IFRS 16 Lease Liabilities -
modifications/remeasurements, transfers from non-current to
current, and foreign exchange adjustments
|
(121.4)
|
101.8
|
(19.6)
|
- IFRS 16 Lease Liabilities -
new leases
|
137.1
|
35.2
|
172.3
|
- IFRS 16 Lease Liabilities -
acquired through business combinations (note 32)
|
41.0
|
6.3
|
47.3
|
At
30 April 2023
|
1,310.0
|
119.6
|
1,429.6
|
|
|
|
|
Cash-flows:
|
|
|
|
- Borrowings drawn
down
|
482.1
|
-
|
482.1
|
- Borrowings repaid
|
(425.6)
|
-
|
(425.6)
|
|
|
|
|
Lease liability:
|
|
|
|
- IFRS 16 Lease Liabilities -
cash-flows
|
-
|
(162.8)
|
(162.8)
|
- IFRS 16 Lease Liabilities -
modifications/remeasurements, transfers from non-current to
current, and foreign exchange adjustments
|
(121.3)
|
133.3
|
12.0
|
- IFRS 16 Lease Liabilities -
new leases
|
82.3
|
21.1
|
103.4
|
- IFRS 16 Lease Liabilities -
acquired through business combinations (note 32)
|
12.5
|
1.3
|
13.8
|
At
28 April 2024
|
1,340.0
|
112.5
|
1,452.5
|
On 30 November 2021 the Group
refinanced its existing borrowings and entered into a combined term
loan and revolving credit facility of £930.0m for a period of 3
years, with the possibility to extend this by a further 2 years.
This facility was extended by two years and the facility increased
to £1,322.5m as at the reporting date, increasing to 1,432.5m from
December 2024 then reducing to £1,372.5m from December 2025 until
November 2026. Given the revolving credit facility is available for
a minimum of 2 years and the limited restriction of lending under
the facility, the balance is classified as non-current on the
Consolidated Balance Sheet.
The Group continues to operate
comfortably within its banking facilities and covenants and the
Board remains comfortable with the Group's available headroom. The
carrying amounts and fair value of the borrowings are not
materially different.
Reconciliation of Net Debt:
|
28 April
2024
|
30 April
2023
|
|
(£'m)
|
(£'m)
|
Borrowings
|
(1,452.5)
|
(1,429.6)
|
Add
back:
|
|
|
- Lease liabilities
|
646.3
|
679.9
|
Cash and cash equivalents
|
358.6
|
332.9
|
Net
debt
|
(447.6)
|
(416.8)
|
18. PROVISIONS
|
Legal and
regulatory
|
Property
related
|
Financial services
related
|
Other
|
Total
|
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
(£'m)
|
At
24 April 2022
|
230.2
|
161.2
|
41.6
|
-
|
433.0
|
Acquired through business
combinations
|
-
|
6.0
|
-
|
-
|
6.0
|
Amounts provided
|
1.3
|
69.7
|
-
|
0.8
|
71.8
|
Amounts utilised /
reversed
|
(108.0)
|
(70.2)
|
(25.6)
|
(0.5)
|
(204.3)
|
At
30 April 2023
|
123.5
|
166.7
|
16.0
|
0.3
|
306.5
|
Acquired through business
combinations
|
-
|
12.3
|
-
|
-
|
12.3
|
Amounts provided
|
24.1
|
38.5
|
1.6
|
2.7
|
66.9
|
Amounts utilised /
reversed
|
(23.9)
|
(93.4)
|
(9.4)
|
-
|
(126.7)
|
At
28 April 2024
|
123.7
|
124.1
|
8.2
|
3.0
|
259.0
|
Financial services related and
other provisions are categorised as current liabilities, while
legal and regulatory and property related provisions are
non-current.
Legal and regulatory provisions
Legal and regulatory provisions reflect management's best estimate of the potential costs arising
from the settlement of outstanding disputes of a commercial and
regulatory nature.
A substantial portion of the amounts
provided relates to ongoing legal claims and non-UK tax enquiries.
In accordance with IAS37.92, management have concluded that it
would prejudice seriously the position of the Group to provide
further specific disclosures in respect of amounts provided for
legal claims and non-UK tax enquiries.
The timing of the outcome of legal
claims and non-UK tax inquiries is dependent on factors outside the
Group's control and therefore the timing of settlement is
uncertain. After taking appropriate legal advice, the outcomes of
these claims are not expected to give rise to material loss in
excess of the amounts provided.
Property related provisions
Included within property related
provisions are onerous lease provisions and provisions for dilapidations in respect of the Group's
retail stores and warehouses. Further details of management's
estimates are included in note 2.