TIDMUBG
RNS Number : 4629D
Unbound Group PLC
03 March 2022
Unbound Group plc
Unaudited results for the 16 months ended 31 January 2022
Unbound Group plc ("Unbound Group" or the "Company") is an
online multi-brand retail platform building on its foundational
business, Hotter Shoes, to provide a broader range of own-brand and
third-party products and services that enhance the active
lifestyles of its targeted 55 plus demographic.
Unbound Group plc was named Electra Private Equity PLC until
January 2022 and was an investment trust until 1 February 2022 when
it was admitted to trading on AIM. These financial statements
reflect the final position of the Company as an investment trust as
at 31 January 2022. Further to the Company's trading update of 17
February 2022, it expects to announce the full year audited
financials for its Hotter Shoes trading subsidiary in May 2022.
Preliminary Results
-- Results to 31 January 2022 reflect final position as an
investment trust prior to admission to trading on AIM on 1 February
2022
-- Reported net asset value of GBP23.1 million reflects closing
market capitalisation on 31 January 2022
Strategic Highlights
-- The Company's shares were admitted to trading on AIM on 1
February 2022, completing the transition to Unbound Group
-- Unbound Group is an online multi-brand retail platform
focused on enhancing the active lifestyle of the 55 plus consumer
through the provision of products and services that allow them to
do more of what they love
-- Unbound Group, through Hotter Shoes, already sells to over
29% of the female 55 plus population through its direct-to-consumer
channels
-- Addition of carefully selected products and services, in
addition to Hotter Shoes, targeted to increase customer transaction
frequency and share of wallet
-- Progress towards launch of Unbound Group partner brands on
the Unbound Group digital platform in summer 2022 is on track
-- Planned realisation of remaining non-core assets carried at
GBP3.7 million to focus resource on accelerated development of the
Unbound partnership and product strategy
-- Capital Markets Day planned for May 2022 to give a detailed
update on Unbound Group partnerships progress
Hotter Shoes Update
-- As announced on 17 February 2022, Unbound Group's
foundational trading business, Hotter Shoes, reported unaudited
results for the year to January 2022 (FY22) in line with
expectation - with revenue of approximately GBP51.9 million (FY21:
GBP44.5 million) and profit before tax and exceptional items (on an
IFRS basis) improved by over GBP6.0 million from FY21 to return to
a small positive
-- Hotter's trading in FY23 to date in line with expectations
-- Partnership with M&S also announced on 17 February 2022
builds on recently established e-commerce partnerships with John
Lewis, Next and The Very Group
1
Unbound Group Balance Sheet on Admission
-- Group banking net debt after all admission related costs of GBP8.7 million
-- Non-core assets held for disposal valued at additional GBP3.7 million as at 31 January 2022
-- Banking facilities (Hotter) extended to December 2024 pre admission
Neil Johnson, Chairman of Unbound Group, commented:
"I am pleased to present our Report and Accounts with the
financial statements presented as an Investment Trust for the final
time.
I am delighted with the progress made by the Unbound Group team
both at Hotter and in developing the new multi-brand Unbound Group
platform and partnerships. The Board looks forward with confidence
and excitement to the future development of the Group."
ENQUIRIES
Unbound Group plc
Dan Lampard
020 3874 8300
Stifel Nicolaus Europe Limited (Nomad and corporate broker)
Ash Burman, Nick Adams, Stewart Wallace, Francis North
020 7710 7600
Vico Partners
Sofia Newitt
020 3957 5045
The financial information set out in the announcement does not
constitute the company's statutory accounts for the period ended 31
January 2022 or the year ended 30 September 2020. The financial
information for the year ended 30 September 2020 is derived from
the statutory accounts for that year which have been delivered to
the Registrar of Companies. The auditors reported on those
accounts: their report was unqualified and did not contain a
statement under s498(2) or (3) of the Companies Act 2006. Their
report did contain an emphasis of matter in respect of the fact
that the financial statements for the year ended 30 September 2020
were prepared on a basis other than that of a going concern. The
circumstances of the Group and the Company have since changed and
the financial information set out in this announcement has been
prepared on the going concern basis. The audit of the statutory
accounts for the year ended 31 January 2022 is not yet complete.
These accounts will be finalised on the basis of the financial
information presented by the directors in this preliminary
announcement and will be delivered to the Registrar of Companies
following the company's annual general meeting.
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1. Chairman's Statement
"After navigating not only the impact of the Covid-19 pandemic
but also the challenges of transitioning to Unbound Group and its
AIM listing, I am pleased to present our Report and Accounts with
the financial statements presented as an Investment Trust for the
final time.
I am delighted with the progress made by the Unbound Group team
both at Hotter and in developing the new multi-brand Unbound Group
platform and partnerships. The Board looks forward with confidence
and excitement to the future development of the Group."
I am delighted to present my first statement as the Chairman of
Unbound Group plc ("Unbound", the "Company" or the "Group"), having
previously reported as Chairman of the Company under its former
name, Electra Private Equity PLC ("Electra"), until late January
2022.
Throughout the 16-month period ended 31 January 2022, the period
reviewed and reflected in this Annual Report and Financial
Statements, the Company traded as a private equity investment
trust. As such the financial statements have been prepared under
IFRS 10 Consolidated Financial Statements on a basis appropriate
for an investment company and consistent with the basis of
preparation of accounts for prior reporting periods. The Company's
financial statements for future reporting period will be prepared
under IFRS 10 without the exception from consolidation requirements
for investment entities.
On 1 February 2022, the Company relinquished its listing on the
FTSE Main Market and was admitted to the Alternative Investment
Market ("AIM") of the London Stock Exchange as Unbound Group plc.
The admission to AIM marked the Company ceasing to be an investment
trust and investment company, and the start of it being the parent
company of the Unbound Group, a consolidated trading group. As
such, in future periods the financial statements of the Group will
be prepared on the basis of consolidated accounts for a trading
group. In addition, the Company expects to announce the full year
audited financials for its Hotter Shoes trading subsidiary which
will be comparable to the historic financial information contained
in the Company's AIM admission document in May 2022.
Given the situation of the Company as at 31 January 2022, the
Directors have valued the assets of the Company on the basis of its
market capitalisation as at that date. The value attributed to
Hotter Shoes ("Hotter") therefore represents the market
capitalisation of the Company on 31 January 2022 less the other net
assets of the Company at that date. As such it does not represent
the Directors' opinion of the future value of Hotter.
The table below presents movement of the Company's Net Asset
Value ("NAV") per share during the 16 months to 31 January
2022.
NAV per share p
------------------------------ --------
As at 1 October 2020 353.4
Capital gains and income 131.1
Expenses and other (29.2)*
Dividend in specie (demerger
of Hostmore) (400.7)
As at 31 January 2022 54.6**
------------------------------ --------
*Expenses and other costs represent all operating and
transactional costs met by the Company during the 16-month period
to 31 January 2022.
**Closing market price on 31 January 2022.
3
Section 5 of this Annual Report (Transformation from Electra
Private Equity PLC to Unbound Group plc) deals in more detail with
the period to 31 January 2022. It also deals with the impact of
transitioning from investment company reporting to consolidated
group reporting, and the re-presentation of the "opening" balance
sheet of Unbound Group plc as at 31 January 2022 on a consolidated
group basis. It should be noted that these financial statements
relate to Unbound Group plc in its investment company format as at
the period end prior to its transformation on 1 February 2022. The
performance of Hotter in the period to the end of January 2022
referenced in this document is unaudited.
The transition to Unbound marked the successful conclusion of
the value realisation strategy implemented by the Company as
Electra between 2016 and January 2022. This strategy was first
implemented when the market capitalisation stood at approximately
GBP1.1 billion and has resulted in the realisation of over GBP2.3
billion of value to shareholders between 2016 and late 2021 ahead
of the demerger of Hostmore plc ("Hostmore"). With the demerger of
Hostmore in November 2021 and ultimately the transformation to
Unbound in February 2022, the final stage of Electra's strategy has
resulted in shareholders owning two independent and well
capitalised businesses with strong management and deliverable
strategies for growth. Electra shareholders have had the
opportunity to realise final value in the short term or to continue
to hold Hostmore and Unbound separately as they implement their
strategies.
In concluding that the final transition into Unbound represented
a significant value creation opportunity for shareholders, the
Board took account of the successful turnaround of Hotter into a
growing digitally focused business that serves almost 30% of the
female population of the UK over the age of 55. This consumer
demographic is not only growing faster than any other, but has the
most rapidly increasing digital literacy, an increasingly positive
and active outlook and high disposable wealth and is inherently
loyal once trust is established. The Hotter brand already enjoys
extremely high loyalty and trust ratings with an average
transaction frequency of 1.6x per annum per customer, which is
already strong for a footwear business. By adding other trusted
brands that provide products and services to the same demographic
and support our consumers' active lifestyles and wellbeing, we
believe that we can build a strong consumer proposition with
significantly increased transaction frequency.
The strategy outlined above and considered in more detail in the
Chief Executive's Business and Strategy Review on pages 6 to 19 is
one focused on growth. As such, the Board does not anticipate
implementing a policy of paying dividends in the short to medium
term.
In implementing the Unbound strategy, it was appropriate that
our Board should evolve from one established to develop and
implement the Electra strategy to one focused on the demands and
opportunities of Unbound. As such, as indicated in my statement for
the Second Interim Report, David Lis and Stephen Welker both
stepped down from the Board in November 2021, replaced by Baroness
Kate Rock and Suki Thompson. I would again thank David and Stephen
for their considerable contribution to the success of the Electra
strategy over recent years and look forward to working with Kate
and Suki in the years ahead.
On admission to AIM, Ian Watson and Dan Lampard, respectively
Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO")
of Hotter Shoes, assumed the same roles in the wider Unbound Group.
At the same time, Gavin Manson, Chief Financial and Operating
Officer ("CFOO") of Electra, and I both stepped back from our
Executive roles, with Gavin becoming a Non-Executive Director and
me becoming Non-Executive Chairman. Finally, having seen the
Company through its transition to Unbound, Linda Wilding will step
down from the Board with effect from the AGM on 12 May 2022. The
Board is delighted that Gavin Manson will succeed her as Audit
Committee Chair. Gavin's long experience as a Chartered Accountant
and Chief Financial Officer combined with his knowledge of the
Unbound business leave him ideally suited to the role.
4
After what has been a challenging period, navigating not only
the impact of the Covid-19 pandemic but also the challenges of
transition to Unbound, the continuing impact of the pandemic and
its AIM listing, the Board looks forward with confidence and
excitement to the future development of the Group.
Neil Johnson
Chairman
2 March 2022
5
2. Chief Executive's Business and Strategy Review
2.1. Hotter Shoes as the Foundation of Unbound Group
Currently Hotter is the sole trading business within the Unbound
Group and it will form the foundation on which we develop other
trading activities of the Group this year and beyond.
Hotter provides footwear with an uncompromising focus on comfort
and fit, delivered through the use of differentiated technology, to
consumers in the UK and US predominantly in the 55 plus
demographic. Founded in 1959, originally as a slipper manufacturer,
Hotter today offers a wide range of men's and predominantly women's
footwear with a focus on comfort provided through utilising
technology in design and manufacture.
Having undergone a significant transformation which started in
2019, the Hotter brand has pivoted towards digital channels whilst
maintaining a right-sized and profitable store portfolio. The
result is a digitally led business which is agile, flexible and
scalable, yielding strong returns from its leading online
business.
Hotter's mission is to provide footwear that enhances its
consumers' lives by allowing them to do more of what they enjoy.
Hotter is now a digital first brand that serves over 29% of the
UK's 55 plus female population direct to their home. In the year to
January 2022, Hotter's UK direct to consumer sales grew by 16% on
the corresponding period in 2020.
Following the implementation of a technology infrastructure to
support its developing e-commerce ambitions, over recent months
Hotter has established digital partnerships with a number of online
retailers such as Next, John Lewis, The Very Group and, as recently
announced, Marks and Spencer, that serve a wide demographic
including Hotter's targeted consumers.
Hotter continues to demonstrate delivery as an e-commerce
focused business and, with further product improvements being
introduced on an ongoing basis, the Directors have confidence that
a standalone Hotter business has the opportunity to deliver value
well in excess of that attributed to it in recent valuations. The
demonstration of sustained growth and profitability in its new
model and the resilience and performance to date give the Directors
grounds for confidence in its development as an increasingly
profitable digital business serving its target 55 plus demographic
in the UK, the US and beyond.
2.2. Unbound's Vision, Mission and Core Strategic Principles
In order to encapsulate what Unbound means to the Board and what
we will seek to ensure that our customers and stakeholders
recognise, we have defined Unbound's vision, mission and five core
strategic principles that will define how and why we do things as
being:
Vision
"To help people move better, feel better and do more of what
they love."
Mission
"Develop technologies, products, experiences and partnerships
rooted in digital excellence and unrivalled insight - to give
people in their 50s and beyond the comfort and confidence to go
further."
6
Unbound's five core strategic principles
-- Guided by insight - Insight excellence drives all that Unbound does.
Unbound builds its business out of unrivalled insight into the
needs, attitudes and behaviours of its 55 plus audience. Unbound
goes the extra mile to engage with, listen to and respond to its
audience's changing needs and continuously track, measure and
improve based on its learnings - embedding insight into everything
it does.
-- Superiority through specialism - Expertise and focus are how Unbound wins.
Unbound is focused and undistracted. Focused on the 55 plus
consumers. Experts in comfort that helps its consumers to do more
of what they love. Unbound leverages its audience and comfort
specialism to both strengthen its roots in footwear and to expand
into relevant adjacent categories. Growing and leveraging its
unique database of engaged consumers is central to Unbound's
business strategy and how it plans to achieve its goals.
-- Growth through connection - Unbound grows its business by curating, connecting and engaging.
Unbound has unique access to, and understanding of, the 55 plus
consumers. Leveraging its combination of access and understanding,
Unbound brings together a highly curated group of brands with deep
relevance for its consumers. Unbound's connected commerce
excellence enables our customers to shop when, where and how they
want.
-- Working smarter - Unbound fuels success by driving productivity.
Unbound continuously assesses and improves the ways in which it
works - seeking to maximise its efficiency and enhance its outputs.
Unbound utilises "Lean Six Sigma" management principles to minimise
wastage and maximise customer experience. Lean Six Sigma represents
a methodology for overall organisational culture change. At its
core, it is a process improvement approach for eliminating
inefficiencies and improving work processes by identifying the
defects' root causes. Unbound does this every day in all it does -
believing in the power of marginal gains to drive its business
forward.
-- Stepping up - Unbound steps up, for our business, our planet and our community.
Unbound believes in taking responsibility, at an individual and
collective level, for the way in which it operates as a business,
for reducing its impact on the planet and for contributing to the
communities of which it is a part.
2.3. Unbound, Building on the Foundation of Hotter
Cultural and demographic shifts provide an opportunity for the
Unbound Group to address a customer audience represented by
Hotter's consumers and database with the characteristics of:
-- rapidly increasing digital literacy - the 55 plus age
demographic is now generating over 30% of overall internet
participation;
7
-- long-term structural growth in older demographics,
significantly in excess of growth in younger demographics;
-- focus on health, wellbeing, leisure and recreation with a
more acute need for comfort over performance; and
-- high concentration of UK wealth in the targeted demographic
results in focus for product selection being on value rather than
price.
With the Hotter business already selling to over 29% of the UK
55 plus female population, the Directors believe that this offers
an opportunity for significant sustainable growth beyond that
already being delivered by Hotter. Building on the strong brand,
customer trust and loyalty enjoyed by Hotter, Unbound is building a
curated portfolio of partner brands to offer a selected range of
products and services on an Unbound e-commerce platform. These
products, services that will ultimately lead to a community, will
be selected with a focus on enhancing the lifestyle and wellbeing
of customers in the 55 plus demographic.
The revenue model being implemented is to generate commission
income on sales of these selected partner products, which will
utilise the Unbound platform. Unbound's initial partner selection
is based on consumer demographic insights from Hotter's customers.
This insight will be developed as the range of products and
services offered expands and will increasingly become a
differentiator allowing Unbound to achieve its goal of allowing our
customers to "do more of what they love" enhancing their lifestyle
and wellbeing.
The first Unbound revenues from sales of products other than
Hotter footwear are expected in Q2 2022, with the medium-term
ambition being to generate more than half of Unbound's profit from
non-Hotter products.
2.4. Our Focus on Consumer Demographic
Ageing population: growth in the 55 plus demographic that is
twice as fast as the under 55 age group
An ageing population combined with increasing life expectancy
will continue to increase Unbound's addressable market and the
proportion of the population with acute comfort needs. The 55 plus
demographic is the fastest growing demographic of the UK
population. Hotter already has almost 30% of 55 plus female
consumers on its database representing a significant opportunity
for Unbound to cross-sell additional products and services. Unbound
intends to further increase its penetration amongst the 55 plus age
category across both men and women.
Large and attractive demographic, growing faster than the UK
total
16-55 years UK population 56+ years UK population
------------------ -------------------------- ------------------------
2019 34.5 million (63.8%) 19.0 million (36.2%)
2029 34.5 million (60.1%) 22.9 million (39.9%)
2039 35.1 million (58.8%) 24.6 million (41.2%)
------------------ -------------------------- ------------------------
Growth 2019-2039 14.0% 26.0%
------------------ -------------------------- ------------------------
Source: Office for National Statistics, UK only
8
Significant market share for key target group of 55 plus
female
Not on Hotter database On Hotter database
------- ----------------------- --------------------
Male 8.8 million (95.6%) 0.4 million (4.4%)
Female 7.4 million (71.3%) 3.0 million (28.7%)
------- ----------------------- --------------------
Total 16.2 million (82.6%) 3.4 million (17.4%)
------- ----------------------- --------------------
Increasing digital literacy and online penetration: rising
participation rates for online shopping in the 55 plus age group,
with further room to grow
Older generations have rapidly become more digitally active with
the Covid-19 pandemic likely to have accelerated this trend. Over
30% of internet users in the UK are over 55 years old, broadly in
line with their proportion of the UK demographic. A further growth
opportunity continues to exist with 35% of over 65-year-olds and
21% of 55 to 64-year-olds yet to shop online. In addition to higher
participation rates, purchase frequency should increase as they
become more comfortable with e-commerce.
Over 30% of online users are over 55
Age Range Population age composition Online age composition
---------- --------------------------- -----------------------
55+ 38% 32%
45-54 18% 19%
35-44 16% 18%
25-34 17% 19%
18-24 11% 12%
---------- --------------------------- -----------------------
Source: Ofcom Online Nation Report, 2020, Office for National
Statistics
% of consumers shopping online by age group
Age Range 2017 2018 2019 2020
---------- ----- ----- ----- -----
45-54 84% 81% 89% 95%
55-64 75% 71% 77% 79%
65+ 45% 48% 54% 65%
---------- ----- ----- ----- -----
Source: Ofcom Online Nation Report, 2020, Office for National
Statistics
Demographic trends - household wealth is overwhelmingly
concentrated within older demographics, and this is starting to
produce faster increases in discretionary spending
An ageing population combined with increasing life expectancy
will continue to increase Unbound's addressable market and the
proportion of the population with acute comfort needs. The older
demographic is the fastest growing demographic of the UK
population. The UK's wealth is concentrated in the 55 plus
demographic with approximately 57% of household wealth within this
group against a population composition of just 38%. Household
disposable income for the 55 plus age demographic has increased
threefold* when compared to the under 55 age demographic which has
increased twofold*. The 50 plus demographic accounts for over half
of the consumer spending in the UK, having spent GBP367 billion* on
discretionary items in 2020.
9
Household wealth distribution in the UK, by age of lead
household member*
Age range Private pension wealth Non pension wealth Total
GBP GBP GBP
---------- ----------------------- ------------------- --------
16-24 8,000 57,000 65,000
25-34 33,000 93,000 126,000
35-44 112,000 220,000 332,000
45-54 269,000 379,000 647,000
55-64 449,000 410,000 859,000
65+ 261,000 432,000 692,000
---------- ----------------------- ------------------- --------
* Source: 2020 Craft Media - Hotter Channel Planning 2020
Increasing focus on health and wellbeing in the older
demographic: health and wellness is increasingly in focus for the
target demographic alongside a wider trend towards casualisation
and comfort
Older generations are becoming more active, with the largest
percentage increase in exercise participation coming from the 55
plus age segment. This is expected to be further boosted by more
active older generations who are increasingly likely to seek more
comfort-oriented products.
Staying active for longer, UK population participating in
regular physical activity
Age range November May May
2015/2016 2017/2018 2018/2019
---------- ----------- ----------- -----------
16-34 72% 71% 70%
34-54 66% 66% 66%
55-74 57% 59% 61% (+4%)
75+ 33% 35% 40% (+7%)
---------- ----------- ----------- -----------
Source: Active England Study 2019, OC&C Commercial Review
2021 and Craft Media - Hotter Channel Planning 2020
The 55 plus age demographic is materially underserved online
The majority of e-commerce businesses are focused on younger
demographics with a product suite and marketing campaigns that are
inappropriate for over 55-year-olds. When combined with the
retrenchment of department stores, this leads to a materially
underserved demographic resulting in an opportunity for Unbound to
build a targeted business.
2.5. Hotter Business Overview and Strategy
Hotter is a digitally led, omni-channel footwear brand with an
uncompromising focus on comfort and fit delivered through the use
of differentiated technology to consumers in the UK, the US and
Europe predominantly in the 55 plus demographic.
Hotter has transformed its business over the past three years
since the introduction of the new management team and strategy,
with Hotter now serving over 29% of the UK's 55 plus female
population direct to their homes. This has had a significant effect
on the distribution of sales by channel and the profitability of
the business with the Group undertaking a strategic repositioning
in March 2019.
Historically, Hotter's business model was focused on a retail
store-led approach. It experienced a decline across all its
channels as a result of a product portfolio that had lost focus
with its core consumers. Prior to the strategic repositioning in
the first half of 2019, the Hotter business had a high fixed cost
base and, whilst profitable at an EBITDA level, was loss making
overall with negative operating cash flow.
10
Following the strategic repositioning before and during the
Covid-19 lockdowns, Hotter has evolved into a direct to
consumer-focused business with growth coming from its rapidly
developing e-commerce channel. All channels are now profitable at
the EBITDA level, the US business is no longer significantly loss
making and investment is focused on the UK business. Fixed costs
have been materially reduced resulting in positive operating cash
flow and strong EBITDA cash conversion in the first half of 2022.
Overall EBITDA margin in the six months to July 2021 was just under
13% with a gross margin of almost 62%.
(a) Footwear Market and Purchase Drivers
The UK women's footwear segment is forecast to grow to GBP3.9
billion by 2024 from a value of GBP3.1 billion in 2020,
representing an annual growth rate of 5.9%. This compares to a
pre-pandemic peak of GBP4.1 billion. The total addressable market
of Hotter is far greater when considering growth plans into the US
and other international markets.
Hotter has continued to have a keen focus on two aspects, as per
the business' value proposition. Shoe fit and comfort are
emphasised to distinguish itself from other brands and peers. 59%
of UK consumers identified shoe fit as a significant purchase
driver, while 81% considered comfort a key purchase driver.
(b) Brand Proposition
The Hotter brand proposition is of key importance and underpins
its cultural values, namely:
"We're here to deliver the ultimate comfort, so people can do
more of what they love."
Hotter targets the 55 plus age demographic and currently has
strong traction within the female footwear segment within this
consumer group, providing a wide range of casual footwear. An
important facet of the brand proposition is to change the negative
connotations associated with "comfort", reframing comfort as
active, empowering and freeing. This reinforces the goal to provide
high-quality products and as a result, Hotter has emphasised its
brand DNA - "Customised comfort. Limitless possibilities."
To deliver on the brand proposition, Hotter operates in a
customer-first approach:
-- Every foot matters : "Great shoes cannot be made without
obsessing about feet. Hotter understands every size, shape and type
of foot, so that it can create the perfect shoe for each of
them."
-- Begin and end with comfort: "Every design brief starts with
the kind of comfort Hotter aims to deliver. Every piece of consumer
research focuses on how Hotter's shoes feel in action. All that
Hotter does starts and ends with comfort."
-- Expert Tech & Expert People: "From tech to its people,
Hotter does all it can to constantly expand its skills and deepen
its knowledge. If there is anything that enhances the comfort of a
shoe, then Hotter makes sure it knows about it."
(c) Product Overview
Hotter sells on-trend, affordable footwear for its customer
base, covering a wide range of styles and categories with all of
the product offerings designed and developed by the in-house design
team. The Company aims to increase the number of product drops to
10 per annum, an evolution from the previous strategy of two drops
per season (autumn/winter, spring/summer).
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Hotter's primary product categories are:
* Boots
* Active
* Deck * Formal shoes
* Sandals
* Gore-Tex
* Slippers
* Shoes
All of Hotter's products are aligned to Hotter's core product
pillars:
-- precision fit - 3D fit technology, and UK whole and half
sizes with four width options (slim to extra wide);
-- tailored comfort - Cushion+, Stability+ and Freesole; and
-- timeless style - clear Hotter designs, iconic and timeless
silhouettes, and visible and meaningful comfort features.
Hotter has developed innovative technology within its products
that offers differentiation from competitors and enables it to
charge a premium price:
-- Cushion+ - Freesole, Cushion+ designs are crafted from a PU
compound to return some of the energy put in by every stride and
invest it into the next. This offers improved energy returns and an
ultra-flexible, super lightweight shoe; and
-- Stability+ - Hotter's Stability+ designs benefit from a
balance bar and are fitted with an OrthoLite(R) insole, making the
shoe both more secure and more breathable. Hotter also includes
adjustability points on every shoe, which means they are tailored
to fit the shape of each individual customer's foot.
The Group has implemented a clearly defined and scalable product
development process. A fast-paced, multi-drop strategy is executed
to anticipate consumer needs and changing fashion trends. The
continuous product refreshment results in lower working capital and
higher gross margins and reduces the Group's stock risk at the
outset of a range launch.
Product cycle drops
Month Product drops
---------- --------------
February Spring Drop
1
March Spring Drop
2
April Summer Drop
1
May Summer Drop
2
June Transitional
Drop
July Autumn Drop
1
August Autumn Drop
2
September Winter Drop
1
October Winter Drop
2
November Transitional
Drop
---------- --------------
Hotter's development process follows a structured process:
-- Discovery Gate : the start of a new launch with the review
and challenge of product development and brand objectives. This
includes consumer research and a review of digital and
manufacturing strategy;
-- Definition Gate (approx. four weeks) : product strategy and
supplier strategy are reviewed together with margin expectations
and pricing strategy;
-- Design Gate (approx. five weeks) : consumer validation and
testing, supplier sign off and design review against the creative
brief;
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-- Development Gate (approx. 24 weeks) : creative concepts are
turned into products and financials are approved and backed by
detailed trading plans factoring in feedback, current trading and
market conditions;
-- Deployment Gate (approx. 16 weeks) : the planning of trading
the range gains traction with detailed production and quality
planning commencing together with product commercialisation and
factory production; and
-- Delivery Gate (approx. three weeks) : the range is delivered
ready to be sold in all channels for full launch with a range
available for soft launch.
(d) Customers and Marketing
A key strategy for Hotter is to increase its email database
(currently approx. 1.1 million) through both converting the
existing analogue customer base (current total database is approx.
4.6 million) and through new customer acquisition. Hotter has
established a proven marketing strategy, underpinned by the use of
technology, to enable customer conversion, acquisition and
retention in a cost-effective manner. A number of technology
solutions are employed to capture consumer data, both on the Hotter
website and through its 17 technology centres and 6 garden centre
concessions through the "Footprint" experience.
The Hotter App is increasingly used by customers due to its ease
of use for a more engaging experience. Hotter has developed
innovative new features, such as an augmented reality shoe try-on,
to further drive users towards the app. The Group expects greater
levels of app downloads as the marketing strategy unfolds,
benefiting the Group given a two times conversion rate on the app
when compared with the Hotter website. Overall, digital marketing
provides a cost-effective approach by sending tailored emails,
updates to notify customers about upcoming launches, and
promotional activity to generate engagement and increase customer
retention and repeat purchases.
Hotter undertakes a full marketing strategy, including digital
and direct marketing, "above the line" ("ATL") media and retail
point-of-sale. From an ATL perspective, the media objective has
been to stimulate consideration growth, focused on the over 55
female audience.
(e) Store Proposition
As part of the wider strategic e-commerce focus, accelerated by
the onset of the Covid-19 pandemic, the Group decreased its retail
store portfolio from 68 locations to 23 locations through a Company
Voluntary Arrangement ("CVA") which commenced in July 2020 and
completed in November 2020. 17 of the remaining stores were
repurposed into technology centres, enabling a personalised digital
marketing journey, through targeted product recommendations to the
user while also providing a data acquisition opportunity to fuel
e-commerce growth. 6 of the retail locations are garden centre
concessions.
13
(f) Manufacturing and Operations
The head office, manufacturing facility and distribution centre
are all located in Skelmersdale, UK. The majority of the Hotter
collection is manufactured in the UK site, using shoe uppers
sourced from India. The UK manufacturing plant creates shoe soles
and midsoles using direct injection processes, with Deutschland
Shoe Machinery ("DESMA"). The completed uppers are sent to the UK
factory by sea or air freight following a quality inspection, where
they are lasted onto the sole units. The products are then moulded,
trimmed and packed to be sent to the UK distribution centre. The UK
manufacturing plant has the capacity to produce up to 63,000 pairs
of shoes a week.
Though using foreign suppliers for shoe uppers, approximately
80% of the product range is manufactured in the UK. The UK factory
employs c.100 people tasked with finishing and packing the goods.
This manufacturing facility is a key aspect in ensuring
dependability of supply chain as the Group is not reliant on bought
in finished goods, mitigating some supply chain risks present. A
limited number of ranges are purchased as finished goods and
transported, largely from Vietnam.
The Group management is currently in the process of exploring
additional European suppliers and also has placed a strategic focus
on the manufacturing process to increase efficiency and reduce
wastages and labour time.
(g) In-House Technology
Hotter's operation is supported by its scalable HCL eCommerce
platform (formerly IBM Websphere Commerce), adapted in house by its
technology team to meet the needs of the market. The platform is
already a "headless e-commerce platform", decoupling the back-end
and front-end process, ensuring Hotter is agile and flexible in its
response to business change. The "headless" capability allows
Hotter to test and experiment on the website at pace. This links
inventory, warehouse and orders to support key aspects of Hotter's
operational activity, adapted specifically for Hotter's processes.
The system is managed by Will Rose, Hotter's Technology Director,
and his team of e-commerce and IT professionals. The platform is
cloud based and can scale to fulfil growing order volumes. The team
is responsible for continuous improvements to the platform which
can be done on a modular basis, with discreet changes and upgrades
delivered quickly while minimising delivery risk of these
enhancements. Hotter's data-driven business model provides the
analysis of customer browsing and ordering behaviour to support its
marketing, product and customer service strategies and enables a
greater understanding of the customer. Data regarding
individual
customer browsing behaviour is provided to the marketing team,
informing Hotter's go-to-market strategy and improving the customer
experience through more intelligent matching of products with
specific search terms.
(h) ESG Strategy
The Group is committed to achieving high standards throughout
all its undertakings. The way in which the Group works and operates
in all aspects of its business is a key factor in maintaining its
reputation as a responsible business and maintaining the high
standards the Group represents. As such, the Group has established
an ESG Committee. The main purpose of the Committee is to represent
the Board in defining the Company's strategy relating to ESG
matters and in reviewing the practices and initiatives of the
Company relating to ESG matters, ensuring that they remain
effective and up to date.
14
Key practices that the Group is currently implementing
include:
Environmental
-- The Group has completed a review of all materials used in
packaging with a view to reducing excess waste.
-- Hotter Shoes will be changing its shoe box to a sustainable
option for spring/summer 2022 rollout. The Group is targeting
producers who will recycle returns packaging.
-- The Group is working across its entire material supply chain
to introduce sustainable alternatives, looking to introduce
replacements from spring/summer 2022 onwards.
-- The majority of the Hotter Shoes footbeds use premium
OrthoLite(c) foam which contains 5% recycled rubber and is machine
washable and designed to be long lasting.
-- Hotter Shoes have introduced organic cotton canvas into its summer deck shoe ranges.
Social
-- The Group maintains a focus on its fundamental principle of
allowing its consumers to do more of what they love.
-- The Group has a long-standing relationship with the charity Marie Curie.
-- The Group has a clear privacy policy in place, demonstrating
its commitment to safeguarding and protecting the data of its
customers.
-- All of the Group's suppliers must sign up to the Group
Supplier Manual which includes the Group's Global Sourcing
Principles which are aligned with the nine-point base code of the
Ethical Trade Initiative.
-- The Group's Indian factories which supply the majority of
Hotter products have mapped and reported their supply chains to
tier 3 level (and have therefore reviewed their supply chains up to
their suppliers of required materials, e.g. shoelaces).
-- As part of the Group's commitment to best practice, all key
staff members are provided with regular training in using the
services of SGS, the world leading testing, inspection and
certification company.
Governance
-- Unbound has adopted the provisions of the QCA Corporate
Governance Code from admission to trading on AIM.
-- In addition to the Audit and Risk Committee, Nomination
Committee and Remuneration Committee, the Group has also
established a monthly Executive ESG Committee, chaired by the CEO,
to monitor, control and report on key actions.
-- Hotter Shoes is a member of the Leather Working Group ("LWG")
and all of the Group's Indian suppliers are using tanneries which
are gold rated and approved by the LWG.
-- The Group has locally based staff in India under the
direction of in-country managers who visit all key factories on a
weekly basis, conducting audits as required to ensure compliance
with the Group's Global Sourcing Principles.
2.6. Financial Performance
The performance of Hotter in the year to January 2022 marked
significant progress in terms of both strategic progression and in
demonstrating resilience. The period continued to be impacted
significantly by the implications of the Covid-19 pandemic;
however, despite this Hotter demonstrated the key strategic
objectives of:
15
-- online sales growth : year-on-year growth of 11.6% in online
sales resulting in overall sales growth of 16.5%;
-- average selling price growth : significant increases in
average selling prices in FY22 of over 16% compared to the prior
year;
-- gross margin development : gross margin improvement year on year from 54.0% to 63.5%; and
-- email address capture: rapid growth in the email database to
over one million, growth of over 35%.
These strategic improvements were achieved despite the impact on
consumer confidence of the pandemic extending throughout 2021 and
in addition the specific significant disruptive influences
summarised below:
Disruptive influence Impact
1 Hotter's permanent closure Margins in early FY22 reduced
of 59 retail stores in 2020 as inventory levels managed coming
was too late to reduce product into spring/summer 2021
volumes planned for winter
2020/21
---------------------------------------- ---------------------------------------
2 Lockdown over winter 2020/21 Margins in early FY22 reduced
reduced sales volume through as inventory levels managed coming
retail and overall as consumer into spring/summer 2021
confidence impacted
---------------------------------------- ---------------------------------------
3 Lockdown throughout Q1 FY22 Demand and margins impacted throughout
and continued travel restrictions FY22
reduced demand throughout
2021
---------------------------------------- ---------------------------------------
4 Lockdown in India over summer Freight costs increased significantly
2021 impacted delivery of as components shipped by air
components for launch of autumn/winter freight to reduce delay
products in 2021 Volumes and margins further impacted
over winter 2021/22 as product
"landed" late in season
---------------------------------------- ---------------------------------------
5 Global supply chain disruption Freight and other costs impacted
and inflationary pressures in H2 FY22
in H2 FY22
---------------------------------------- ---------------------------------------
The resilience demonstrated at sales and margin level combined
with the improved cost efficiency of the e-commerce focused
operating model implemented in 2020 allowed Hotter to make a
year-on-year improvement of over GBP6 million in profit before tax
and exceptional costs associated with the admission to AIM.
On an IFRS basis, Hotter is expected to generate adjusted EBITDA
of approximately GBP5.5 million for FY22 (FY21 loss of GBP0.9
million). Profit before tax and exceptional items for the year is
anticipated to not be below GBP0.2 million, an improvement of over
GBP6.0 million compared with the prior year (FY21 loss of GBP6.6
million). This improved performance led to cash conversion at
EBITDA level of 53% which combined with the investment of GBP5.0
million from Electra prior to admission reduced Hotter net banking
debt to GBP8.7 million at the period end.
16
2.7. Looking Forward
As we enter our first period as an independent, listed Group our
focus is clear:
-- continue the profitable growth of Hotter Shoes as a digitally
focused business. This will not only deliver increased shareholder
value but will generate cash to support the development of our
Unbound strategy; and
-- implement the first stages of our Unbound strategy with the
launch of our Unbound digital partnerships in the second quarter of
our financial year.
With Hotter's gross bank debt reduced to GBP12.1 million and
extended to December 2024 prior to AIM admission and overall net
bank debt of approximately GBP6.0 million, which includes GBP2.5
million of net cash within Unbound Group plc, on admission the
Group is well funded and, in a position, to implement its strategy.
The successful implementation of the Group's strategy presents an
opportunity to generate significant value for shareholders and will
be to the benefit of all stakeholders. As such, in order to focus
on these drivers of value creation we intend to realise the
non-core assets retained by the Group on transition from Electra
over the coming months. With the carrying value of these assets
being GBP3.8 million as at 31 January 2022, this will give us
increased financial resilience and the resource to accelerate our
strategy if appropriate.
Hotter's trading in the period since our Capital Markets Day in
September 2021 has shown resilience against the headwinds of supply
chain issues and inflationary pressures. We entered the year to
January 2023 with inventory on plan and at optimum levels and
trading in the early weeks of the period has been in line with our
expectations. As such we maintain the medium-term guidance given at
the September Capital Markets Day:
Unbound's Medium-Term Guidance
Strategy Framework
Unbound
partnership * Unbound will add digital partnerships to build on and * Commission-based partnership model for non-Hotter
model further develop the focused consumer database already sales.
in place through Hotter.
* First revenues from H1 2022 and with a launch planned
* Developing on the digital platform already in place for this summer.
for Hotter, building in a scalable manner.
* Profit generated from non-Hotter revenues targeted at
25% of Group profit in three years and 50% in five
years.
* Unbound partnerships will be EBITDA and cash
generative from the outset but with reinvestment in
growth in the short term.
* No investment required in inventory in the
short/medium term.
----------------------------------------------------------------- -----------------------------------------------------------------
17
Hotter Medium-Term Guidance
Continued growth within online and offline channels, with retail
stores recovering to pre-Covid-19 levels by the end of 2022.
Improved gross margin and continued management of costs driving
improving EBITDA margin over the medium term.
UK direct to consumer Online: mid-teen percentage annual growth
expected
Offline: mid-single digit percentage annual
growth expected
UK retail Recovers to FY20 levels by end of FY23 and
then stable
---------------------- ---------------------------------------------------
US direct to consumer Undergoing strategic review, short term maintained
at current levels
---------------------- ---------------------------------------------------
Hotter digital Double-digit percentage annual growth
partnerships
---------------------- ---------------------------------------------------
Wholesale Maintained at current levels
---------------------- ---------------------------------------------------
Gross margin Approximately 2% above pre-Covid-19 levels
from FY23 as Covid-19 disruption diminishes
and positive impact of differentiated product
drives margin.
---------------------- ---------------------------------------------------
EBIT margin Levels to reach mid-teen percentage over medium
term
---------------------- ---------------------------------------------------
Cash conversion Operating cash flow (pre-exceptional items)
in line with EBITDA
---------------------- ---------------------------------------------------
Capital expenditure Annual capital expenditure spend of c.GBP2.5
million. No material one-off spends required
in the medium term with plan spend exceeding
current depreciation levels
---------------------- ---------------------------------------------------
Working capital No structural change with stable conversion
of EBITDA to cash
---------------------- ---------------------------------------------------
Net debt/(cash) Targeted to be maintained below 2x maintainable
EBITDA in the short term, and in the medium
term a net cash position without future strategic
spend
---------------------- ---------------------------------------------------
2.8. Key Performance Indicators
The Group has implemented an integrated pyramid of key
performance indicators ("KPIs") that cascade from the longer-term
strategic "shareholder metrics" to individual department and
employee metrics. This structure is intended to ensure alignment
throughout the organisation over focus on achieving objectives that
drive delivery of shareholder objectives and value.
The KPI measures employed for shareholder metrics are:
-- earnings per share; and
-- total shareholder return.
These are used for measurement of success in relation to
Long-Term Incentive Plans ("LTIPs") whilst other metrics are used
to measure achievement of the shorter-term performance necessary to
achieve longer-term objectives. These shorter-term measures are
used for routine performance management and for annual bonus
measures. They reflect specific priorities of the Group in the
short term and are likely to evolve in line with the Group's
development.
18
At Board level these metrics are currently:
-- earnings before tax ("EBT"): is likely to be retained as a
recurring measure of short-term financial performance;
-- net bank debt: is likely to be retained as a long-term
measure, but it is particularly key in the short term during the
coincidence of the Unbound investment phase with rapid online
development of Hotter;
-- Unbound partners: a critical short-term measure as we seek to
add products and services through the Unbound partnership
model;
-- Percentage of earnings from Unbound partners: a measure of
the success of the Unbound partnership model in delivering value
incremental to that of Hotter;
-- active database size: as an e-commerce focused business the
size of the active database (customers who have purchased within
the last 12 months) is key; and
-- ESG targets: the Board is committed to both ESG and CSR. The
Group is engaged in many initiatives in support of ESG measures and
is working to bring these together to form measures and objectives
that are reliable and demanding.
Given the significant changes recently undertaken in the
business and the implementation of the Unbound partnership strategy
in the current period certain operating KPIs are currently being
finalised to ensure consistent integration into the overall
structure.
19
3. Transition from Electra Private Equity PLC to Unbound Group
plc
Throughout the period under review, from 1 October 2020 to 31
January 2022 the Company operated as a private equity investment
trust focused on the final stages of the portfolio realisation
strategy formally adopted in October 2018.
Given the circumstances of the Company as at 31 January 2022,
the Directors consider it appropriate to adopt Net Asset Value
("NAV") as the closing market price on that date. This does not
necessarily reflect the Directors' view of the future value of the
Company and its investments.
During the 16 months to 31 January 2022, the changes to the
investments held were:
Investment Net (realisations)/investments Investment Investment
fair value as at return fair value as at
30 September 2020 31 January
2022
GBPm GBPm GBPm GBPm
------------------------------- ------------------- ------------------------------- ----------- ------------------
TGI Fridays 106.6 (150.7) 44.1 -
Sentinel Performance Solutions 10.9 (22.2) 11.3 -
Hotter Shoes 5.8 10.2 3.6 19.6
------------------------------- ------------------- ------------------------------- ----------- ------------------
Total core investments 123.3 (162.7) 59.0 19.6
------------------------------- ------------------- ------------------------------- ----------- ------------------
Hostmore - 2.7 (0.5) 2.2
Other 3.9 (2.2) (0.1) 1.6
Special Product Company 1.0 (1.0) - -
Secondaries 0.4 (0.4) - -
Total non-core investments 5.3 (0.9) (0.6) 3.8
------------------------------- ------------------- ------------------------------- ----------- ------------------
Total investment portfolio 128.6 (163.6) 58.4 23.4
------------------------------- ------------------- ------------------------------- ----------- ------------------
Final Stages of the Realisation Strategy
As at 1 October 2020, each of the remaining principal controlled
investments of the Company was in a period of significant change.
In each case that change had started prior to the emergence of the
Covid-19 pandemic with planned changes being implemented
concurrently with adapting to the circumstances of the pandemic and
with subsequent realisation activities.
The main investments and realisations were:
Sentinel Performance Solutions Ltd ("Sentinel"):
Electra gained control of Sentinel for a nominal sum in mid-2019
and, following the investment of a further GBP1.7 million, a change
of management and the adoption of a simplification strategy, the
business performed strongly though the non-peak summer months of
the first Covid-19 lockdown. Performance over winter 2020/21 proved
to be key to plans for an exit in 2021.
20
Despite significant Covid-19 restrictions in each of its main
markets of the UK, France and Italy in the year to March 2021
Sentinel recorded EBITDA of over GBP4.2 million, a 350% increase
from the year to March 2019, immediately before Electra assumed
control. This successful turnaround allowed Electra to complete a
successful exit in April 2021 that resulted in net proceeds to
Electra of GBP22.1 million.
The direct impact and continuing uncertainty of the Covid-19
pandemic significantly impacted the consumer markets in which both
of the other remaining significant investments, TGI Fridays and
Hotter Shoes, operated. As well as providing significant challenges
to these businesses it resulted in the M&A market for these
assets being focused on distressed transactions. Whilst continuing
to explore the possibility of cash realisations the sale proceeds
of Sentinel gave the opportunity to consider alternative solutions
that would provide significantly greater return to shareholders in
the longer term than sub-optimal cash sales.
TGI Fridays ("Fridays"):
Following management changes in late 2019, Fridays was not only
going through significant planned change in 2020, with renewed
focus on a mantra of Quality, Simplicity and Relevance, but was
also accelerating the evolution of its previously premises-based
model to adapt to the evolving market and also the implications of
the pandemic. Through the implementation of "click and collect" and
delivery, Fridays outperformed the market throughout the pandemic
whilst implementing a highly efficient and scalable infrastructure
platform and significant customer pacing improvements in quality
and consistency of delivery.
With a highly experienced management team and scalable
infrastructure in place a strategy for growth was developed. This
resulted in the establishment of Hostmore as a holding company for
Fridays and a platform on which to add other complementary and
growing hospitality brands. "63(rd) +1(st) " was developed in house
as a cocktail and food concept with three locations opened in
2021.
In November 2021, following a cash investment of GBP12.5 million
from Electra, Hostmore was demerged to form Hostmore plc, an
independent FTSE listed business that is well led and well
capitalised and has a sound strategy for growth through organic
growth of Fridays and "63(rd) +1(st) " and through the addition of
other disruptor brands.
Hotter Shoes ("Hotter"):
Following management change in early 2019, Hotter Shoes
commenced the implementation of product differentiation through the
application of technology within a business-wide digitisation
strategy prior to the emergence of the pandemic. The retail
lockdown enforced by the pandemic in the first half of 2020 led to
a CVA resulting in the closure of all but 17 of Hotter's retail
stores. This allowed acceleration of the digital focus of the
business, leaving it smaller but much stronger.
Through its focus on direct-to-consumer marketing Hotter had
over 29% of the female population of the UK on its
direct-to-consumer database by early 2021. This penetration within
its target market gave the opportunity to add additional products
and services that would increase frequency of purchase and share of
consumer spending. The Unbound strategy was born, which, following
a GBP5 million reduction in Hotter's bank debt, funded by Electra,
led to the transformation of Electra into Unbound as a holding
company for Hotter and a platform for the addition of products and
services serving Hotter's core 55 plus demographic.
21
The Board is confident that this strategy provides the
opportunity for shareholders to realise significantly more value in
the medium term than would have been available from a disposal of
Hotter followed by winding up Electra.
Other Assets:
During the period, the Company also realised GBP1.6 million from
the disposal of Adjustoform Products Limited and GBP1.0 million
from the distribution from an escrow holding following the disposal
of the assets of Special Product Company Inc. in 2019.
The Impact of Transition of Electra to Unbound
As Electra Private Equity PLC, the Company was an investment
trust listed on the FTSE Main Market as an investment company under
Listing Rule 15, following the UK Corporate Governance Code and
with financial reporting as an investment company. In ceasing to be
both an investment company and an investment trust, the Company had
no automatic right to move from being listed on the FTSE Main
Market under Listing Rule 15 (Investment Companies) to remaining on
the Main Market under Listing Rule 6 (Consolidated Groups). As such
the Directors concluded that in transitioning to Unbound a
relisting on AIM was appropriate given the size and nature of
Unbound. Unbound is now a trading group and admission to trading on
AIM.
Given its scale the Company has now adopted the Quoted Companies
Alliance ("QCA") Corporate Governance Code. However, as the Company
operated as an investment trust during the period under review, the
Board considers that reporting against the principles and
provisions of the Association of Investment Companies ("AIC") Code,
which has been endorsed by the Financial Reporting Council, will
provide better information to shareholders.
As the financial statements reported in this document relate to
the period ended 31 January 2022, the day before admission to AIM,
the statutory balance sheet reflects the position of the Company as
an investment company owning Hotter Shoes as a portfolio company.
Given the position of the Company at that date the valuation of
Hotter reflected in the statutory reported balance sheet is based
on the market capitalisation of the Company as at 31 January 2022
less other net liabilities at book value. As such the value
attributed to Hotter does not necessarily reflect what the
Directors consider to be the underlying value of the business.
Whilst the basis of preparation of the statutory accounts
reflects the situation of the Company as at 31 January 2022 as an
investment company, given the subsequent transition to become a
trading group with effect from 1 February 2022, shareholders will
find an equivalent balance sheet prepared as a consolidated trading
group useful. The table on page 23 illustrates the transition from
the balance sheet presented in these financial statements to one
prepared as a consolidated trading group as at the same date using
the same base data.
22
As at 31 January 2022 Investment Consolidation Unbound Group
Company entries consolidated
(GBP million) Hotter
--------------------------------- --------------------- ------------------ ------------------------ ------------------------
Fixed assets
Investments 19.6 - (19.6) -
Intangible assets - 4.1 25.7 29.8
Tangible assets - 2.7 - 2.7
Right-of-use assets - 6.9 - 6.9
Deferred tax assets - 3.8 - 3.8
--------------------------------- --------------------- ------------------ ------------------------ ------------------------
Current
assets/liabilities
Investments 3.7 - - 3.7
Inventory - 5.0 - 5.0
Cash 1.9 3.6 - 5.5
Lease liabilities (0.1) (1.4) - (1.5)
Borrowings - (2.0) - (2.0)
Other net liabilities (2.0) (10.0) - (12.0)
--------------------------------- --------------------- ------------------ ------------------------ ------------------------
Non-current
liabilities
Lease liabilities - (6.3) - (6.3)
Borrowings - (10.1) - (10.1)
Provisions - (1.0) - (1.0)
Net assets 23.1 (4.7) 6.1 24.5
--------------------------------- --------------------- ------------------ ------------------------ ------------------------
Related Party Transactions
The Electra Private Equity Executive Share of Value Plan
("SoVP") vested in May 2021. As awards made under the plan vested
in cash, in order to maintain alignment between the executives and
shareholders the executives undertook to reinvest the full net
proceeds of their awards in the purchase of new shares issues to
them by the Company. As a result, on 7 May 2021 Neil Johnson and
Gavin Manson respectively acquired 249,057 and 441,509 shares in
the Company at a price of 530p per share, which was the closing
market price on the day of the issuance.
Prior to the demerger of Hostmore plc on 1 November 2021, the
executives of Hostmore undertook to receive awards due to them
under the TGI Fridays Management Incentive Arrangements as shares
in Hostmore plc rather than in cash. This ensured continued
alignment between the objectives of Hostmore management and
shareholders. The Hostmore Executive Directors, Robert Cook and
Alan Clark respectively received 3,360,662 and 2,421,518 shares in
Hostmore.
Prior to Admission to AIM on 1 February 2022, the executives of
Hotter undertook to receive awards due to them under the Hotter
Shoes Management Incentive Arrangements as shares in Unbound Group
plc rather than in cash. This ensured continued alignment between
the objectives of Hostmore management and shareholders. As
announced on 9 December 2021 and 14 January 2022, Ian Watson, the
CEO of Hotter Shoes, and from Admission to AIM the CEO of Unbound
Group plc received 2,086,833 shares in Unbound Group plc.
Ian Watson
Chief Executive Officer
2 March 2022
23
Consolidated Income Statement
16 months to 31 January 2022 12 months to 30 September 2020
Revenue Capital Total Revenue Capital Total
Note For the GBPm GBPm GBPm GBPm GBPm GBPm
----- --------------------------------------- ----------- ---------- -------- ----------- ---------- ----------
2 Investment income 6.5 - 6.5 0.7 - 0.7
14 Investment gains/(losses) - 48.9 48.9 - (57.8) (57.8)
3 Other expenses (12.4) - (12.4) (2.5) - (2.5)
Loss on revaluation of foreign
currencies - - - - (0.2) (0.2)
Net (loss)/return before tax (5.9) 48.9 43.0 (1.8) (58.0) (59.8)
Tax - - - (0.2) - (0.2)
----- --------------------------------------- ----------- ---------- -------- ----------- ---------- ----------
(Loss)/return after tax (5.9) 49.4 43.0 (2.0) (58.0) (60.0)
9 Basic and diluted (loss)/return per (15.3) 126.7 111.4 (5.0) (151.4) (156.4)
share (p)
----- --------------------------------------- ----------- ---------- -------- ----------- ---------- ----------
The "Total" columns of this statement represent the Group's
Consolidated Income Statement prepared in accordance with
International Financial Reporting Standards ("IFRS") adopted by the
United Kingdom. The supplementary "Revenue" and "Capital" columns
are prepared under guidance published by the Association of
Investment Companies ("AIC"). This is further explained in the
Basis of Accounting and Significant Accounting Policies.
All activities represent continuing operations. The Company has
no recognised gains and losses other than those shown above and
therefore no separate Statement of Total Comprehensive Income has
been presented.
The accompanying notes are an integral part of these financial
statements.
24
Consolidated Statement of Changes in Equity
Note For the 16 months Called Own shares Capital Revenue Total
to up share Share held reserve reserve equity
31 January 2022 capital premium
----- -------------------
GBPm GBPm GBPm GBPm GBPm GBPm
----- ------------------- ---------- ---------- ----------- --------- --------- --------
As at 1 October
2020 9.6 - (2.4) 76.9 51.2 135.3
Distribution in
specie - - - (161.2) - (161.2)
15 Share issuance 1.0 5.0 - - - 6.0
Net return/(loss)
during the period - - - 48.9 (5.9) 43.0
As at 31 January
2022 10.6 5.0 (2.4) (35.4) 45.3 23.1
----- ------------------- ---------- ---------- ----------- --------- --------- --------
Note For the 12 Called Capital Own shares Capital Revenue Total
months to up share Share redemption held reserve reserve equity
30 September capital premium reserve
2020
----- -------------------------
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
----- ------------------------- ---------- ---------- ------------ ----------- --------- --------- --------
As at 1 October
2019 9.6 122.9 34.9 (0.4) (11.6) 54.5 209.9
Net loss during
the period - - - - (58.0) (2.0) (60.0)
15 Reserve reclassification - (122.9) (34.9) - 157.8 - -
15 Share forfeiture - - - - 0.5 - 0.5
Share-based
payments - - - (2.0) - (1.3) (3.3)
8 Dividends - - - - (11.8) - (11.8)
----- ------------------------- ---------- ---------- ------------ ----------- --------- --------- --------
As at 30 September
2020 9.6 - - (2.4) 76.9 51.2 135.3
----- ------------------------- ---------- ---------- ------------ ----------- --------- --------- --------
The accompanying notes are an integral part of these financial
statements.
25
Company Statement of Changes in Equity
Called Share Own shares Capital Revenue Total
up share premium held reserve reserve equity
capital
----- -----------------------
For the 16 months to GBPm GBPm GBPm GBPm GBPm GBPm
Note 31 January 2022
----- ----------------------- ---------- --------- ----------- --------- --------- --------
As at 1 October 2020 9.6 - (2.4) 226.5 (98.4) 135.3
Distribution in specie - - - (161.2) - (161.2)
15 Share issuance 1.0 5.0 - - - 6.0
Net return during the
period - - - 9.0 34.0 43.0
As at 31 January 2022 10.6 5.0 (2.4) 74.3 (64.4) 23.1
----- ----------------------- ---------- --------- ----------- --------- --------- --------
Called Share Capital Own Capital Revenue Total
up share premium redemption shares reserve reserve equity
capital reserve held
----- -------------------------
For the 12 months GBPm GBPm GBPm GBPm GBPm GBPm GBPm
to
Note 30 September 2020
----- ------------------------- ---------- --------- ------------ -------- --------- --------- --------
As at 1 October
2019 9.6 122.9 34.9 (0.4) 138.2 (95.3) 209.9
Net loss during
the year - - - - (58.2) (1.8) (60.0)
15 Reserve reclassification - (122.9) (34.9) - 157.8 - -
15 Share forfeiture - - - - 0.5 - 0.5
15 Share-based payments - - - (2.0) - (1.3) (3.3)
8 Dividends - - - - (11.8) - (11.8)
----- ------------------------- ---------- --------- ------------ -------- --------- --------- --------
As at 30 September
2020 9.6 - - (2.4) 226.5 (98.4) 135.3
----- ------------------------- ---------- --------- ------------ -------- --------- --------- --------
The accompanying notes are an integral part of these financial
statements.
26
Consolidated Balance Sheet
31 January 30 September 2020
2022
Note As at GBPm GBPm
----- ------------------------------------------------ ----------- ------------------
Non-current assets
14 Investments held at fair value - 128.6
----- ------------------------------------------------ ----------- ------------------
- 128.6
----- ------------------------------------------------ ----------- ------------------
Current assets
14 Investments held at fair value 23.4 5.6
11 Trade and other receivables 0.4 0.6
Current tax asset 0.2 0.3
Cash 1.9 1.3
----- ------------------------------------------------ ----------- ------------------
25.9 7.8
----- ------------------------------------------------ ----------- ------------------
Current liabilities
12 Trade and other payables (2.3) (0.9)
13 Provisions (0.5) -
----- ------------------------------------------------ ----------- ------------------
(2.8) (0.9)
----- ------------------------------------------------ ----------- ------------------
Total assets less current liabilities 23.1 135.5
----- ------------------------------------------------ ----------- ------------------
Non-current liabilities
13 Provisions - (0.2)
- (0.2)
----- ------------------------------------------------ ----------- ------------------
Net assets 23.1 135.3
----- ------------------------------------------------ ----------- ------------------
Capital and reserves
15 Called up share capital 10.6 9.6
15 Share premium 5.0 -
15 Own shares held (2.4) (2.4)
15 Capital reserve (35.4) 76.9
15 Revenue reserve 45.3 51.2
----- ------------------------------------------------ ----------- ------------------
Total equity 23.1 135.3
----- ------------------------------------------------ ----------- ------------------
10 Basic and diluted net asset value per share (p) 54.6 353.4
----- ------------------------------------------------ ----------- ------------------
15 Number of ordinary shares in issue 42,258,128 38,282,763
----- ------------------------------------------------ ----------- ------------------
The accompanying notes are an integral part of these financial
statements.
Approved by the Board of Directors and signed on its behalf
by:
Neil Johnson Dan Lampard
Chairman Chief Financial Officer
2 March 2022 2 March 2022
Unbound Group plc
Company number: 00303062
27
Company Balance Sheet
31 January 30 September 2020
2022
----- --------------------------------------
Note As at GBPm GBPm
----- -------------------------------------- ----------- ------------------
Non-current assets
14 Investments held at fair value - 20.9
- 20.9
----- -------------------------------------- ----------- ------------------
Current assets
14 Investments held at fair value 23.4 5.6
11 Trade and other receivables 0.4 108.3
Current tax assets 0.2 0.3
Cash 1.9 1.3
25.9 115.5
----- -------------------------------------- ----------- ------------------
Current liabilities
12 Trade and other payables (2.3) (0.9)
13 Provisions (0.5) -
----- -------------------------------------- ----------- ------------------
(2.8) (0.9)
----- -------------------------------------- ----------- ------------------
Total assets less current liabilities 23.1 135.5
----- -------------------------------------- ----------- ------------------
Non-current liabilities
13 Provisions - (0.2)
----- -------------------------------------- ----------- ------------------
- (0.2)
----- -------------------------------------- ----------- ------------------
Net assets 23.1 135.3
----- -------------------------------------- ----------- ------------------
Capital and reserves
15 Called up share capital 10.6 9.6
15 Share premium 5.0 -
15 Own shares held (2.4) (2.4)
15 Capital reserve 74.3 226.5
15 Revenue reserve (64.4) (98.4)
----- -------------------------------------- ----------- ------------------
Total equity 23.1 135.3
----- -------------------------------------- ----------- ------------------
The Company's return for the 16 months to 31 January 2022 was
GBP43.0 million (12 months to 30 September 2020: loss of GBP60.0
million).
The accompanying notes are an integral part of these financial
statements.
Approved by the Board of Directors and signed on its behalf
by:
Neil Johnson Dan Lampard
Chairman Chief Financial Officer
2 March 2022 2 March 2022
Unbound Group plc
Company number: 00303062
28
Consolidated Cash Flow Statement
For the 16 months to 31 January 2022 12 months to 30 September 2020
-------------------------------------------------
GBPm GBPm
------------------------------------------------- ----------------------------- -------------------------------
Operating activities
Purchase of trading investments (40.2) (14.0)
Sales of trading investments 50.2 31.6
Dividends and distributions received 0.7 1.5
Interest income received 1.5 -
Expenses paid (11.5) (4.6)
------------------------------------------------- ----------------------------- -------------------------------
Cash generated from operations 0.7 14.5
Tax repaid 0.1 0.6
------------------------------------------------- ----------------------------- -------------------------------
Net cash inflow from operating activities 0.8 15.1
------------------------------------------------- ----------------------------- -------------------------------
Financing activities
Dividends paid - (11.8)
Share forfeiture - 0.5
Purchase of shares held under incentive schemes - (2.0)
Repayment of lease liabilities (0.2) (1.0)
------------------------------------------------- ----------------------------- -------------------------------
Net cash used in financing activities (0.2) (14.3)
------------------------------------------------- ----------------------------- -------------------------------
Net increase in cash and cash equivalents 0.6 0.8
Opening cash 1.3 0.5
Closing cash 1.9 1.3
------------------------------------------------- ----------------------------- -------------------------------
The accompanying notes are an integral part of these financial
statements.
29
Notes to the Financial Statements
1. Segmental Analysis
Throughout the period, the Group operated as a single business
segment for reporting purposes. It was managed as a single
investment company and reporting was provided to the Board of
Directors on an aggregated basis. The Company's portfolio of
investments was predominantly based in the United Kingdom.
2. Revenue Income
16 months to 12 months to
31 January 2022 30 September 2020
GBPm GBPm
---------------------- ----------------- -------------------
Interest income 5.8 0.1
Other income 0.7 0.6
Total revenue income 6.5 0.7
---------------------- ----------------- -------------------
3. Other Expenses
16 months to 12 months to
31 January 2022 30 September 2020
GBPm GBPm
------------------------- ----------------- -------------------
Administrative expenses 12.4 2.5
------------------------- ----------------- -------------------
Total other expenses 12.4 2.5
------------------------- ----------------- -------------------
Administrative expenses for the 16 months to 31 January 2022
above include a GBP7.6 million charge (2020: credit of GBP1.3
million) related to vesting of the SoVP.
Auditor's Remuneration
16 months to 12 months to
31 January 2022 30 September 2020
Group Company Group Company
GBP000 GBP000 GBP000 GBP000
-------- --------- --------- ----------
Audit of Group financial statements pursuant to legislation 132.6 132.6 81.9 81.9
Audit of subsidiary financial statements pursuant to legislation - - 43.0 -
------------------------------------------------------------------- -------- --------- --------- ----------
Sub-total 132.6 132.6 124.9 81.9
Other assurance services* 106.8 106.8 33.0 33.0
------------------------------------------------------------------- -------- --------- --------- ----------
Total auditor's remuneration 239.4 239.4 157.9 114.9
------------------------------------------------------------------- -------- --------- --------- ----------
*The other assurance services include GBP56,800 related to the half year and second half year
reviews (2020: half year review only GBP32,400), and GBP50,000 relating to reviews of the
circulars on the demerger of Fridays and AIM listing of Unbound (2020: GBPnil).
Non-Audit Services
It is the Group's practice to employ Deloitte LLP on assignments
additional to its statutory audit duties only when its expertise
and experience with the Group are important or where it has been
awarded assignments on a competitive basis. Details of the Group's
process for safeguarding and supporting the independence and
objectivity of the external auditor are given in the Audit and Risk
Committee Report.
30
4. Employee Costs
During the 16 months to 31 January 2022, the Company did not
have any non-Director employees.
5. Right-of-Use Assets
16 months to 12 months to
31 January 2022 30 September 2020
GBPm GBPm
------------------------------------- ----------------- -------------------
Opening balance 0.3 -
Adjustment on transition to IFRS 16 - 1.5
Additions - 0.4
Disposals - (1.1)
Depreciation (0.2) (0.2)
Onerous contract (0.1) -
Closing balance - 0.3
------------------------------------- ----------------- -------------------
The Company adopted IFRS 16 Leases on 1 October 2019 in respect
of the head office which the Company rents, using the "modified
retrospective" approach on transition. Prior to adoption of IFRS
16, the lease was recognised as an operating lease and the related
rental expenses were recognised in other expenses in the Income
Statement.
The head office property is the only right-of-use asset held by
the Company. As part of its downsizing plan, the Company relocated
to a smaller office in December 2019. Disposals in the above table
relate to the exit of the old lease. The new office lease was
entered into in December 2019 with a three-year lease term and is
measured as a right-of-use asset with an initial value of GBP0.4
million, which is depreciated over its lease term in accordance
with the Company's accounting policy.
Due to its transition to Unbound Group plc, the Company
determined that the leased office is unlikely going to be
materially used for its intended purposes and concluded that the
contract had become onerous as at 31 January 2022. Therefore, the
remaining right-of-use asset value of GBP0.1 million has been fully
impaired.
6. Lease Liabilities
In accordance with IFRS 16 Leases, a liability of GBP0.4 million
was recognised when the office lease was entered into. The cash
commitment amounts to GBP200,000 in total for the remaining lease
period. Interest charge is calculated at an incremental borrowing
rate of 3.5%, totalling GBP20,000 over the three-year lease term,
and charged in the Income Statement. The carrying value of lease
liabilities as at 31 January 2022 is GBP0.1 million.
7. Tax
Analysis of Tax Charge During the Period
16 months to 31 January 2022 12 months to 30 September 2020
-------------------------------------------
Revenue Capital Total Revenue Capital Total
-------------------------------------------
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------------------- ------------ ------------ -------- ------------ ----------- --------
Current tax
UK corporate tax on (loss)/return for the - - - - - -
period
Deferred tax
Adjustments in respect of previous periods - - - 0.2 - 0.2
Total tax charge - - - 0.2 - 0.2
------------------------------------------- ------------ ------------ -------- ------------ ----------- --------
31
7. Tax (continued)
The difference between the income tax expense shown above and
the amount calculated by applying the effective rate of UK
corporation tax, currently 19.0% (2020: 19.0%), to the
(loss)/return before tax is as follows:
16 months to 31 January 2022 12 months to 30 September 2020
----------------------------------------------
Revenue Capital Total Revenue Capital Total
----------------------------------------------
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------------------- ----------- ----------- ------- ----------- ----------- ---------
(Loss)/return on ordinary activities before
tax (5.9) 48.9 43.6 (1.8) (58.0) (59.8)
----------- ----------- -------
(Loss)/return before tax at the rate of UK
corporation tax of 19.0% (2020: 19.0%) (1.1) 9.3 8.2 (0.3) (11.0) (11.3)
Effects of:
Adjustments in respect of prior period - - - 0.2 - 0.2
Capital (return)/loss not taxable - (9.3) (9.3) - 11.0 11.0
Deferred tax not recognised (0.5) - (0.5) (0.2) - (0.2)
Disallowed expense 1.6 - 1.6 0.5 - 0.5
---------------------------------------------- ----------- ----------- ------- ----------- ----------- ---------
Total tax charge - - - 0.2 - 0.2
---------------------------------------------- ----------- ----------- ------- ----------- ----------- ---------
Disallowed expenses in the reconciliation above relate to tax
charge on excess management expenses of GBP8.4 million (2020:
GBP2.5 million). Excess management expenses are expenses incurred
by the Company, exceeding the income the Company generated during
the period.
8. Dividends
16 months to 12 months to
31 January 2022 30 September 2020
GBPm GBPm
-------------------------------------------- ----------------- -------------------
Dividend in specie (net) 161.2 -
Special Dividend of FY20 (31.0p per share) - 11.8
Total dividends 161.2 11.8
-------------------------------------------- ----------------- -------------------
As at 31 January 2022, the Company had distributable reserves of
GBP27.3 million (2020: GBP217.2 million), being the sum of the
realised capital reserve and the revenue reserve. The Board does
not consider the unrealised capital reserve of negative GBP17.3
million (2020: negative GBP89.0 million) to be distributable, and
therefore the Company's net distributable reserves as at 31 January
2022 were GBP10.0 million (2020: GBP128.1 million).
9. (Loss)/Return per Share
The capital, revenue and total return per ordinary share are
based on the net (loss)/return shown in the Consolidated Income
Statement and the weighted average number of ordinary shares during
the 16 months to 31 January 2022 of 38,592,946 (12-month period to
30 September 2020: 38,282,763). There are no dilutive instruments
issued by the Company.
10. NAV per Share
The NAV per share is calculated by dividing the NAV of GBP23.1
million (2020: GBP135.3 million) by the number of ordinary shares
in issue as at 31 January 2022 of 42,258,128 (30 September 2020:
38,282,763). There are no dilutive instruments issued by the
Company.
32
11. Trade and Other Receivables
As at 31 January 2022 30 September 2020
-----------------------------------------
Group Company Group Company
-----------------------------------------
GBPm GBPm GBPm GBPm
----------------------------------------- ------- --------- -------- ----------
Amounts owed by subsidiary undertakings - - - 107.7
Other receivables 0.4 0.4 0.6 0.6
0.4 0.4 0.6 108.3
----------------------------------------- ------- --------- -------- ----------
12. Trade and Other Payables
31 January 2022 30 September 2020
As at Group Company Group Company
----------------
GBPm GBPm GBPm GBPm
---------------- ------- --------- -------- ----------
Other payables 2.3 2.3 0.9 0.9
---------------- ------- --------- -------- ----------
Trade and other payables consist of accrued expenses, including
GBP1.8 million estimated transaction costs on AIM listing of
Unbound Group plc and completion of the Company's final strategic
delivery, and supplier invoices received but not settled.
13. Provisions
16 months to 12 months to
31 January 2022 30 September 2020
--------------------- ------------------- ---------------------
Group Company Group Company
GBPm GBPm GBPm GBPm
--------------------- -------- --------- --------- ----------
Opening balance 0.2 0.2 0.3 0.3
Amounts paid (0.2) (0.2) - -
Change in provision 0.5 0.5 (0.1) (0.1)
Closing balance 0.5 0.5 0.2 0.2
--------------------- -------- --------- --------- ----------
The closing provisions as at 31 January 2022 relate to onerous
contracts as a result of the Company's transition to Unbound Group
plc, including costs on the Company's leased office and other
service providers.
The closing provisions as at 30 September 2020 included
liability and National Insurance contributions provided for on the
SoVP incentive scheme, which vested in May 2021, and therefore the
related provisions have been settled during the 16 months to 31
January 2022.
14. Financial Instruments
Management of Risk
The Group's financial instruments comprise securities in listed
and unlisted companies, trade receivables, trade payables and cash.
The main risks arising from the Group's and Company's financial
instruments are fluctuations in market price, liquidity and
capital. The policies for managing each of these risks are
summarised below. The financial risks of the Company are aligned to
the Group's financial risks.
Market Price Risk
Market price risk arises mainly from uncertainty about future
prices of financial instruments used in the Group's operations. It
represents the potential loss the Group might suffer through
holding market positions in the face of price movements. The Group
is exposed to the risk of the change in value of its investments in
listed and unlisted equity.
33
14. Financial Instruments (continued)
Liquidity Risk
The Group's assets comprise unlisted equity, which is illiquid
by nature. Short-term flexibility is achieved through holding of
cash, which is available on demand, and liquid investments such as
listed equity. The Group's financial liabilities are expected to be
settled in less than a year.
Credit Risk
The Group's exposure to credit risk principally arises from its
cash deposits. Only major banks are used when making cash deposits
and the level of cash is reviewed on a regular basis. In total,
cash balance of GBP1.9 million (30 September 2020: GBP1.3 million)
was principally held with two UK banks, whose credit ratings are
listed in the table below.
Bank credit ratings as at 31 January 2022 Moody's
------------------------------------------ -------------
HSBC A1 (stable)
Royal Bank of Scotland International A3 (stable)
------------------------------------------ -------------
Capital Risk Management
The Group's capital, as at 31 January 2022, comprised share
capital of GBP10.6 million (2020: GBP9.6 million) and total other
reserves of GBP12.5 million (30 September 2020: GBP125.7
million).
The Group's objective in the management of capital risk is to
maintain an optimal capital structure. In doing so the Group may
adjust the amount of dividends paid to shareholders or issue new
shares or debt. During the 16 months to 31 January 2022, TGI
Fridays demerged from the Group by way of dividend in specie to the
Company's shareholders, and no cash dividend was paid (12 months to
2020: GBP11.8 million). The Group has an existing authority to
implement an on-market share buy-back programme to generate
shareholder value. There are no externally imposed requirements on
the
Company's capital.
Financial Assets and Liabilities
Group Company
31 January 2022 30 September 2020 31 January 2022 30 September 2020
As at GBPm GBPm GBPm GBPm
--------------------------- ---------------- ------------------ ---------------- ------------------
Financial assets
Equity shares 23.4 11.0 23.4 11.0
Non-equity shares - 2.1 - 2.1
Fixed interest securities - 115.5 - 7.8
Floating rate securities - 5.6 - 5.6
Cash at bank 1.9 1.3 1.9 1.3
Other assets 0.4 0.6 0.4 108.3
--------------------------- ---------------- ------------------ ---------------- ------------------
Financial liabilities
Other payables 2.3 0.9 2.3 0.9
--------------------------- ---------------- ------------------ ---------------- ------------------
Cash and other receivables and payables are measured at
amortised cost and the rest of the financial assets in the table
above are held at fair value through profit or loss. The carrying
values of the financial assets and liabilities measured at
amortised cost are short-term in nature and repayable/payable on
demand, and therefore are considered to be materially equal to the
fair value.
Fair Value Hierarchy
Fair value is the amount for which an asset could be exchanged
between knowledgeable willing parties in an arm's length
transaction. The Group complies with IFRS 13 in respect of
disclosures about the degree of reliability of fair value
measurements. The levels of fair value measurement bases are
defined as follows:
34
14. Financial Instruments (continued)
Level 1: fair values measured using quoted prices (unadjusted)
in active markets for identical assets or liabilities.
Level 2: fair values measured using valuation techniques for all
inputs significant to the measurement other than quoted prices
included within level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly (i.e.
derived from prices).
Level 3: fair values measured using valuation techniques for
which any significant input to the valuation is not based on
observable market data (unobservable inputs).
The Group considers observable data to be market data that is
readily available, regularly distributed or updated, reliable and
verifiable, not proprietary and provided by independent sources
that are actively involved in the relevant market.
The following tables present the Group's assets by hierarchy
levels. During the 16 months to 31 January 2022, GBP2.2 million of
level 3 assets were transferred to level 1 and GBP20.1 million of
level 3 assets were transferred to level 2 (during the 12 months to
30 September 2020: no transfer).
Financial Assets at Fair Value through Profit or Loss
Level 1 Level 2 Level 3 Total
GBPm GBPm GBPm GBPm
------------------------------------- -------- -------- -------- ------
Investments as at 31 January 2022 2.2 19.6 1.6 23.4
------------------------------------- -------- -------- -------- ------
Investments as at 30 September 2020 5.6 - 128.6 134.2
------------------------------------- -------- -------- -------- ------
Investments classified within level 1 consist only of listed
equity investments, whose values are based on quoted market prices
in active markets. The Group does not adjust the quoted price for
these instruments.
Investments classified within level 2 consist of unlisted equity
investments, whose values are based on quoted market prices in
active markets adjusted for other assets and liabilities held by
the Group and the Company.
Investments classified within level 3 consist of private equity
direct investments, on which observable prices are not available
and the Group uses valuation techniques to derive the fair
value.
The following tables present the movement of assets measured at
fair value, based on fair value measurement levels.
16 months to 31 January 2022 12 months to 30 September 2020
Group Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
----------------------------------
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------- ---------- ---------- --------- ----------- ---------- ----------
Opening balance 5.6 - 128.6 17.3 - 192.4
Purchases 21.0 - 23.4 9.1 - 4.1
Realisations (26.6) - (187.0) (20.9) - (12.0)
Transfer from level 3 to level 1 2.7 - (2.7) - - -
Transfer from level 3 to level 2 - 19.6 (19.6) - - -
(Decrease)/increase in valuation (0.5) - 58.9 0.1 - (55.9)
---------------------------------- ---------- ---------- --------- ----------- ---------- ----------
Closing balance 2.2 19.6 1.6 5.6 - 128.6
---------------------------------- ---------- ---------- --------- ----------- ---------- ----------
35
14. Financial Instruments (continued)
16 months to 31 January 2022 12 months to 30 September 2020
Company Level 1 Level 2 Level 3 Level 1 Level 2 Level 3
----------------------------------
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------- ---------- ---------- --------- ----------- ---------- ----------
Opening balance 5.6 - 20.9 17.3 - 44.7
Purchases 21.0 - 19.2 9.1 - 2.9
Transfer from Group entities - - 176.2 - - -
Realisations (26.6) - (187.0) (20.9) - (12.2)
Transfer from level 3 to level 1 2.7 - (2.7) - - -
Transfer from level 3 to level 2 - 19.6 (19.6) - - -
(Decrease)/increase in valuation (0.5) - (5.4) 0.1 - (14.5)
---------------------------------- ---------- ---------- --------- ----------- ---------- ----------
Closing balance 2.2 19.6 1.6 5.6 - 20.9
---------------------------------- ---------- ---------- --------- ----------- ---------- ----------
Realisations in the tables above include interest and
distributions received from investments. During the 16 months ended
30 January 2022, the Company incurred costs of GBP5.2 million in
transaction costs (12 months to 30 September 2020: GBP1.9 million).
Total gains and losses on assets measured at level 3 are recognised
as part of the investment gains and losses balance in the
Consolidated Income Statement and no other comprehensive income has
been recognised on these assets. Total unrealised gains for the 16
months ended 31 January 2022 were GBP2.2 million (12 months to 30
September 2020: loss of GBP58.2 million).
15. Called up Share Capital and Reserves
The Company has 42,258,128 (30 September 2020: 38,282,763)
allotted, called up and fully paid ordinary shares of 25p each,
totalling GBP10.6 million as at 31 January 2022 (30 September 2020:
GBP9.6 million).
Upon vesting of the Electra SoVP in May 2021, the Company issued
a total of 690,566 ordinary shares to the Chairman and CFOO (before
the Company's transition to Unbound). In January 2022, 3,284,799 of
the Company's new shares were issued to the management team at
Hotter in settlement of its entitlement under the Hotter Management
Incentive Plan ("MIP"). All recipients of the new shares have
retained the shareholding in the Company since issuance.
Own Shares Held
Own shares held are shares purchased by the Company's Employee
Benefit Trust (the "Trust") in relation to the SoVP scheme operated
by the Company. The Trust waives its rights to dividends on the
shares held. The number of shares held by the Trust was 690,481 as
at 31 January 2022 (30 September 2020: 690,481). These shares are
held at a historic cost of GBP2.4 million (2020: GBP2.4
million).
Share Premium and Capital Redemption Accounts
The Company cancelled its share premium account and capital
redemption reserve in July 2020, increasing the distributable
reserves by GBP157.8 million, to facilitate the distribution of the
Company's targeted returns to shareholders. Issuance of the 690,566
ordinary shares in settlement of vesting of the Electra SoVP in May
2021 and 3,284,799 ordinary shares in settlement of the Hotter MIP
in January 2022 have created a GBP5.0 million share premium
account.
Capital Reserve
The capital reserve includes both realised capital reserve,
which is the accumulated gains and losses on the realisation of
investments and unrealised capital reserve, which is the
accumulated changes in the value of financial instruments measured
at fair value which have been charged through profit and loss.
36
15. Called up Share Capital and Reserves (continued)
Revenue Reserve
The revenue reserve is the accumulated net revenue profits and
losses of the Group.
Share Forfeiture
Following approval at the AGM in February 2020, the Company
commenced a programme to seek to identify and contact shareholders
with whom contact was lost for in excess of 12 years. The programme
was concluded in August 2020 and in total 72 shareholders have been
identified as untraced and as a result 11,194 shares and related
unclaimed dividends with a total value of GBP0.5 million, after
fees, were forfeited.
16. Particulars of Holdings
Subsidiary Undertakings
The results and balances of the following subsidiaries are
included in the consolidated financial statements of the Group for
the 16 months to 31 January 2022:
Hotter MIPCO Limited
Company number: 13227465
Registered office: 17 Old Park Lane, London, England W1K 1QT
Place of incorporation: United Kingdom
Ownership: 100% in ordinary shares
Electra Private Equity Limited (formerly Electra Investments
Limited)
Company number: 00021895
Registered office: 17 Old Park Lane, London, England W1K 1QT
Place of incorporation: United Kingdom
Ownership: 100% in ordinary shares
Significant Interests in Investee Undertakings
The Group has a significant interest in the following investee
company as at 31 January 2022:
Galaxy Topco Limited (holding company for Hotter Shoes)
Company number: 08812566
Registered office: 2 Peel Road, Skelmersdale, England WN8
9PT
Place of incorporation: United Kingdom
Ownership: 100% in ordinary shares
Loss for the period ended 2 February 2020: GBP25.1 million
Net assets as at 2 February 2020: negative GBP182.3 million
17. Related Party Transactions
Balances and transactions between the Company and its
subsidiaries are eliminated on consolidation. Details of
transactions between the Company and other related parties are
disclosed below.
The Electra Private Equity Executive Share of Value Plan
("SoVP") vested in May 2021. As awards made under the plan vested
in cash, in order to maintain alignment between the executives and
shareholders the executives undertook to reinvest the full net
proceeds of their awards in the purchase of new shares issues to
them by the Company. As a result, on 7 May 2021 Neil Johnson and
Gavin Manson respectively acquired 249,057 and 441,509 shares in
the Company at a price of 530p per share, which was the closing
market price on the day of the issuance.
37
17. Related Party Transactions (continued)
Prior to the demerger of Hostmore plc on 1 November 2021, the
executives of Hostmore undertook to receive awards due to them
under the TGI Fridays Management Incentive Arrangements as shares
in Hostmore plc rather than in cash. This ensured continued
alignment between the objectives of Hostmore management and
shareholders. The Hostmore Executive Directors, Robert Cook and
Alan Clark respectively received 3,360,662 and 2,421,518 shares in
Hostmore.
Prior to Admission to AIM on 1 February 2022, the executives of
Hotter undertook to receive awards due to them under the Hotter
Shoes Management Incentive Arrangements as shares in Unbound Group
plc rather than in cash. This ensured continued alignment between
the objectives of Hostmore management and shareholders. As
announced on 9 December 2021 and 14 January 2022, Ian Watson, the
CEO of Hotter Shoes, and from Admission to AIM the CEO of Unbound
Group plc received 2,086,833 shares in Unbound Group plc.
Sherborne Investors Management LP ("Sherborne") has served as an
adviser to the Group on research and formulation as well as making
proposals to the Board of Directors. Stephen Welker, who is also a
Partner in Sherborne, served as a Non-Executive Director in the
Company until his resignation on 1 November 2021. Under the terms
of its contract with the Company, Directors appointed by Sherborne
have waived their fees but were entitled to be reimbursed for all
reasonable expenses. In the 16 months to 31 January 2022, Sherborne
charged no expenses to the Company (12 months to 30 September 2020:
GBP22,609 as reimbursement for Mr Welker's travel and subsistence
costs), and no outstanding amount was payable by the Company as at
31 January 2022 (30 September 2020: GBPnil). There are now no
Directors of the Company appointed by Sherborne.
18. Capital Commitments and Contingencies
There were no outstanding capital commitments or contingent
liabilities as at 31 January 2022.
19. Post Balance Sheet Events
On 1 February 2022, listing of the Company's shares on the
premium segment of the Official List of the Financial Conduct
Authority of the United Kingdom was cancelled, and trading of the
Company's shares was removed from the Main Market for listed
securities of the London Stock Exchange plc and was admitted on AIM
as Unbound Group plc.
20. Basis of Accounting and Significant Accounting Policies
The Group financial statements for the 16 months ended 31
January 2022 have been prepared in accordance with the Companies
Act 2006 and International Financial Reporting Standards ("IFRSs").
IFRSs comprise standards and interpretations approved by the
International Accounting Standards Board ("IASB") and the IFRS
Interpretations Committee ("IFRS IC") as adopted by the United
Kingdom.
In order to reflect the activities of an investment trust
company, supplementary information which analyses the Consolidated
Income Statement between items of a revenue and capital nature has
been presented alongside the Consolidated Income Statement. In
analysing total income between capital and revenue returns, the
Directors have followed the guidance contained in the Statement of
Recommended Practice ("SORP") for investment companies issued by
the Association of Investment Companies in November 2014 and
updated in October 2019.
The recommendations of the SORP which have been followed
include:
-- realised and unrealised profits or losses arising on the
revaluation or disposal of investments classified as held at fair
value through profit or loss should be shown in the "Capital"
column of the Consolidated Income Statement;
38
20. Basis of Accounting and Significant Accounting Policies
(continued)
-- realised gains are taken to the realised reserves in equity
and unrealised gains are transferred to the unrealised reserves in
equity;
-- returns on any share or debt security (whether in respect of
dividends, interest income or otherwise) should be shown in the
"Revenue" column of the Consolidated Income Statement. The total of
the "Revenue" column of the Consolidated Income Statement is taken
to the revenue reserve in equity; and
-- the Board should determine whether the indirect costs of
generating capital gains should also be shown in the "Capital"
column of the Consolidated Income Statement. If the Board decides
that this should be so, the management expenses should be allocated
between revenue and capital in accordance with the Board's expected
long-term split of returns, and other expenses should be charged to
capital only to the extent that a clear connection with the
maintenance or enhancement of the value of investments can be
demonstrated. The Board has decided that the Company should
continue to charge management expenses as a revenue item for the 16
months to 31 January 2022.
The separate financial statements of the Company have been
prepared in accordance with Financial Reporting Standard 101 ("FRS
101") and the Companies Act 2006. The Company has taken advantage
of the exemption under section 408 of the Companies Act 2006 and
accordingly has not presented a separate Company Income
Statement.
In preparing these financial statements, the Company applies
recognition, measurement and disclosure requirements of FRS 101 and
the following exemptions have been applied:
15. Cash Flow Statement and related notes;
16. related party disclosures in respect of transactions with
wholly owned subsidiaries;
17. the effects of new but not yet effective IFRSs; and
18. IFRS 2 Share-Based Payment in respect of Group settled
share-based payment schemes.
Going Concern
Following the adoption of the wind-down strategy in 2018 it
became appropriate, in light of the likely ultimate wind-up of the
Company, for the Company to report on a basis other than that of a
going concern. Given the Company's transition to Unbound Group plc
as a trading holding company for Hotter, listed on AIM on 1
February 2022, this basis of preparation is no longer appropriate.
As such these accounts are prepared on the basis of a going
concern.
The Directors have conducted a going concern review and
concluded that preparation of the report on a going concern basis
was appropriate because the Group is expected to be able to meet
its liabilities as they fall due for a period of 12 months from the
date of approval of the financial statements. In reaching this
decision the Directors considered the trading position of Hotter
Shoes in relation to the covenants on its banking facilities that
extend to December 2024, forecast profitability and levels of cash,
and also the Board's intention to realise the non-core assets of
the Company.
Given the situation of the Company, the change of basis of
preparation has no numerical impact on the financial performance or
position of the Company as reported.
Basis of Consolidation
The consolidated financial statements include the Company and
its subsidiary undertakings. Subsidiaries are entities controlled
by the Group. Control, as defined by IFRS 10, is achieved when the
Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those
returns through its power over the investee.
39
20. Basis of Accounting and Significant Accounting Policies
(continued)
The amendments to IFRS 10 and IFRS 12 define an investment
entity and include an exception from the consolidation requirements
for investment entities.
The Company has been deemed to meet the definition of an
investment entity per IFRS 10, as the following conditions
exist:
-- the Company has multiple unrelated investors which are not
related parties and holds multiple investments;
-- ownership interests in the Company are exposed to variable
returns from changes in the fair value of the Company's net
assets;
-- the Company has obtained funds for the purpose of providing
investors with investment management services;
-- the Company's business purpose is investing solely for
returns from capital appreciation and investment income; and
-- the performance of investments is measured and evaluated on a fair value basis.
The Company does not consolidate the portfolio companies it
controls. The principal subsidiaries are wholly owned companies,
which provide investment-related services through the provision of
investment management or advice and hold investments in managed
assets. The primary purpose of these entities is to provide
investment-related services that relate to the Company's investment
activities and therefore they are not considered to be investment
entities. These subsidiaries continue to be consolidated.
Investments
Purchases and sales of listed investments are recognised on the
trade date where a contract exists whose terms require delivery
within a timeframe determined by the relevant market. Purchases and
sales of unlisted investments are recognised when the contract for
acquisition or sale becomes unconditional.
Investments are designated at fair value through profit or loss
(as detailed in the financial statements as investments held at
fair value) and are subsequently measured at reporting dates at
fair value. The fair value of direct unquoted investments is
calculated in accordance with the Principles of Valuation of
Investments below.
Principles of Valuation of Investments
The Group estimates the fair value of each investment at the
reporting date in accordance with IFRS 13 and the International
Private Equity and Venture Capital Valuation ("IPEV") Guidelines.
Fair value is the price for which an asset could be exchanged
between knowledgeable and willing parties in an arm's length
transaction. In estimating fair value, the Manager applies a
valuation technique which is appropriate in light of the nature,
facts and circumstances of the investment and uses reasonable
current market data and inputs combined with judgement and
assumptions. Valuation techniques are applied consistently from one
reporting date to another except where a change in technique
results in a better estimate of fair value.
In respect of unlisted investments, the Group selects one or
more of the following valuation techniques:
-- a market approach, based on the price of the recent
investment, earnings multiples or industry valuation
benchmarks;
-- an income approach, employing a discounted cash flow technique; and
-- a replacement cost approach valuing the net assets of the portfolio company.
40
20. Basis of Accounting and Significant Accounting Policies
(continued)
In assessing whether a methodology is appropriate the Group
maximises the use of techniques that draw heavily on observable
market-based measures of risk and return. In some circumstances the
Group may apply a multiple to the net assets of a business,
typically where the business' value derives mainly from the
underlying fair value of its assets rather than its earnings, such
as property holding companies.
The fair value of listed investments is based on quoted prices
in active markets at the Balance Sheet date. A market is regarded
as active, if quoted prices are readily and regularly available
from an exchange, dealer, broker, industry group, pricing service,
or regulatory agency, and those prices represent actual and
regularly occurring market transactions on an arm's length basis.
The quoted market price used for financial assets held by the Group
is the current bid price.
Subsidiary Undertakings
Investments in subsidiaries are stated in the Company Balance
Sheet at the fair value.
Cash
Cash comprises cash at bank and is measured at amortised
cost.
Leased Assets - Group as a Lessee
For any new contracts entered into on or after 1 October 2019,
the Group considers whether a contract is or contains a lease. A
lease is defined as a contract, or part of a contract, that conveys
the right to use an asset (the underlying asset) for a period of
time in exchange for a consideration. The Group assesses whether it
has the right to direct how and for what purpose the asset is used
throughout the period of use.
For leases identified, the Group recognises a right-of-use asset
and a lease liability on the Balance Sheet at lease commencement
date. The right-of-use asset is measured at cost, which is made up
of the initial measurement of the lease liability, any initial
direct costs incurred by the Group, an estimate of any costs to
dismantle and remove the asset at the end of the lease, and any
lease payments made in advance of the lease commencement date (net
of any incentives received).
The Group depreciates the right-of-use assets on a straight-line
basis from the lease commencement date to the earlier of the end of
the useful life of the right-of-use asset or the end of the lease
term. The Group also assesses the right-of-use asset for impairment
when such indicators exist.
At the commencement date, the Group measures the lease liability
at the present value of the lease payments unpaid at that date,
discounted using the interest rate implicit in the lease if that
rate is readily available or the Group's incremental borrowing
rate. Lease payments included in the measurement of the lease
liability are made up of fixed payments (including in-substance
fixed), variable payments based on an index or rate, amounts
expected to be payable under a residual value guarantee and
payments arising from options reasonably certain to be
exercised.
Subsequent to initial measurement, the liability will be reduced
for payments made and increased for interest. It is remeasured to
reflect any reassessment or modification, or if there are changes
in in-substance fixed payments. When the lease liability is
remeasured, the corresponding adjustment is reflected in the
right-of-use asset, or profit and loss if the right-of-use asset is
already reduced to zero. The Group has elected to account for
short-term leases and leases of low-value assets using the
practical expedients. Instead of recognising a right-of-use asset
and lease liability, the payments in relation to these are
recognised as an expense in profit or loss on a straight-line basis
over the lease term.
41
20. Basis of Accounting and Significant Accounting Policies
(continued)
Foreign Currencies
The Group's and Company's presentational and functional currency
is Pounds Sterling ("Sterling"), since that is the currency of the
primary economic environment in which the Group operates.
Transactions in currencies other than Sterling are recorded at the
rates of exchange prevailing on the dates of the transactions.
Foreign currency assets and liabilities are translated into the
functional currencies of the Group's respective entities at rates
prevailing at the Balance Sheet date. Foreign currency revenue and
expenses are translated into the functional currencies of the
Group's respective entities at the month-end rate for the period
the transaction occurred. Exchange differences arising are
recognised through the Consolidated Income Statement.
At each Balance Sheet date, assets and liabilities of foreign
operations are translated into Sterling at the rates prevailing on
the Balance Sheet date. Foreign exchange differences arising on
retranslation of the equity and reserves of subsidiaries with
functional currencies other than Sterling are recognised directly
in the translation reserve in equity. Foreign exchange differences
arising on the retranslation of non-monetary items carried at fair
value are included in the Consolidated Income Statement for the
year.
Investment Income
Dividends receivable from equity shares are accounted for on the
ex-dividend date or, where no ex-dividend date is quoted, when the
Group's right to receive payment is established. Fixed returns on
non-equity shares and debt securities are recognised on a time
apportionment basis so as to reflect the effective yield when it is
probable that economic benefit will flow to the Group. Where income
accruals previously recognised, but not received, are no longer
considered to be reasonably expected to be received, either through
investee company restructuring or doubt over its receipt, then
these amounts are reversed through expenses.
Expenses
Expenses are charged through the "Revenue" column of the
Consolidated Income Statement.
Defined Contribution Plan
The Group operates a defined contribution pension plan under
which the Group pays fixed contributions. Pension contributions are
recognised as expenses in the Consolidated Income Statement, as
incurred.
Tax
The tax effect of different items of income/gain and
expense/loss is allocated between capital and revenue on the same
basis as the particular item to which it relates, using the
Company's effective rate of tax for the accounting year. The tax
currently payable is based on taxable profit for the year. Taxable
profit differs from profit before tax as reported in the
Consolidated Income Statement because it excludes items of income
or expense that are taxable or deductible in other years and it
further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the Balance
Sheet date.
Provisions
Provisions are recognised when the Group has a present
obligation of uncertain timing or amount as a result of past events
and it is probable that the Group will be required to settle that
obligation and a reliable estimate of that obligation can be made.
The provisions are measured at the Directors' best estimate of the
amount to settle the obligation at the Balance Sheet date. Changes
in provisions are recognised in the Consolidated Income
Statement.
42
20. Basis of Accounting and Significant Accounting Policies
(continued)
Revenue and Capital Reserves
Net capital return is added to the capital reserve in the
Consolidated Statement of Changes in Equity, while the net revenue
return is added to the revenue reserve.
Receivables and Payables
Receivables and payables are typically settled in a short time
frame and are carried at the amount due to be settled. As a result,
the fair value of these balances is considered to be materially
equal to the carrying value, after taking into account potential
impairment losses.
Share Capital
Ordinary shares issued by the Group are recognised at the
proceeds or fair value received with the excess of the amount
received over nominal value being credited to the share premium
account. Direct issue costs, net of tax, are deducted from
equity.
Critical Accounting Judgements and Key Sources of Estimation
Uncertainty
Critical accounting judgements and key sources of estimation
uncertainty used in preparing the financial information are
continually evaluated and are based on historical experience and
other factors, including expectations of future events that are
believed to be reasonable. The resulting judgements and estimates
will, by definition, seldom equal the related actual results.
In the course of preparing the Annual Report and Financial
Statements for the 16 months ended 31 January 2022, the Directors
concluded that the Company continues to meet the definition of an
investment entity based on the reassessment of the conditions
listed under the basis of consolidation above.
Key Sources of Estimation Uncertainty
The valuation for Hotter as at 31 January 2022 is derived by
adjusting the market capitalisation of Unbound Group plc on that
date by all other assets and liabilities held by the Company, and
the Company's liabilities include accrued transaction costs on its
transition to Unbound and estimated costs provided for contracts,
which have become onerous as a direct result of the transition.
There is a risk that these costs could be different to the
amounts estimated as at the year end, therefore causing adjustments
to the carrying amounts of assets and liabilities within the next
financial year. However, the Company has performed a detailed
review of the cost estimates, many of which are based on either
quotes from service providers or contractual amounts. Therefore,
the Directors believe that any differences between actual and
estimated costs would be immaterial.
43
Information for Shareholders
Financial calendar for 2022/23
Annual results announced 3 March 2022
Annual General Meeting 12 May 2022
Website and Unbound News via Email
For further information on share prices, regulatory news and
other information, please visit www.unboundgroupplc.com.
If you would like to receive email notification of our
announcements, please visit the Unbound website at
www.unboundgroupplc.com/regulatory-news/ and "Subscribe to Unbound
Group's News Alerts". Registering for email alerts will not stop
you receiving Annual Reports or any other shareholder documents you
have selected to receive by post or electronically.
Shareholder Enquiries
In the event of queries regarding your ordinary shareholding,
contact the Company's Registrar, Equiniti Limited, which will be
able to assist you with:
-- registered holdings;
-- balance queries;
-- lost certificates; and
-- change of address notifications.
Equiniti Limited's full details are provided on page 46 or
please visit www.equiniti.com.
If you are an existing shareholder and wish to buy more/sell
your shares in Unbound:
An internet and telephone dealing service has been arranged
through Equiniti, which provides a simple way for UK shareholders
of Unbound to buy or sell Unbound's shares. For full details and
terms and conditions simply log onto www.shareview.co.uk/dealing or
call 0371 384 2351. Please note that lines are open 8.30am to
5.30pm (UK time) Monday to Friday (excluding public holidays in
England and Wales).
The service is only available to shareholders of Unbound who
hold shares in their own name, have a UK registered address and are
aged 18 and over.
Shareview Dealing is provided by Equiniti Financial Services
Limited. Equiniti Financial Services Limited is authorised and
regulated by the Financial Conduct Authority of 25 The North
Colonnade, Canary Wharf, London E14 5HS (FCA reference 468631).
Equiniti Financial Services Limited is registered in England and
Wales with number 6208699.
If you are not an existing shareholder:
If you are not an existing shareholder, we recommend you seek
your own personal financial advice from an appropriately qualified
independent adviser or alternatively contact your own broker.
Unbound Group plc's shares are listed on the London Stock Exchange
with the ticker "UBG".
Please Note: The above information is not a recommendation to
buy or sell shares. The value of shares and any income from them
can fluctuate and you may get back less than the amount invested.
If you have any doubt over what action you should take, please
contact an authorised financial adviser.
44
Trading Information - Ordinary Shares
Listing London Stock Exchange
ISIN GB0003085445
SEDOL 0308544
Ticker/EPIC code UBG
Bloomberg UBGLN
Share Fraud Warning
We are aware that in the past a number of shareholders have
received unsolicited phone calls or correspondence concerning
investment matters. These are typically from overseas-based brokers
who target UK shareholders, offering to sell them what often turn
out to be worthless or high-risk shares. These operations are
commonly known as boiler room scams.
Please be very wary of any such calls or correspondence. Ask for
the name and organisation of the person calling you and check if
they can be found on the Financial Conduct Authority ("FCA")
Register. If they are not listed, please report it directly to the
FCA using its consumer helpline (0800 111 6768). You may also wish
to advise us by telephoning 020 3874 8300 or emailing
Investorrelations@unboundgroup.com.
It is very unlikely that either the Company or the Company's
Registrar, Equiniti, would make unsolicited telephone calls to
shareholders. Such calls would only relate to official
documentation already circulated to shareholders and never be in
respect of investment advice.
Please remember that if you use an unauthorised firm to buy or
sell shares, you will not be eligible to receive payment under the
Financial Services Compensation Scheme if things go wrong.
45
Contact Details
Unbound Group plc
Board of Directors
Neil Johnson (Chairman)
Ian Watson (Chief Executive Officer, appointed as a Director on
1 February 2022)
Dan Lampard (Chief Financial Officer, appointed as a Director on
1 February 2022)
Paul Goodson
Gavin Manson
Baroness Kate Rock (appointed on 1 November 2021)
Suki Thompson (appointed on 1 November 2021)
Linda Wilding
Registered Office
Registered in England: Company no. 00303062
17 Old Park Lane, London, England W1K 1QT
Telephone +44 (0)20 3874 8300
www.unboundgroupplc.com
Company Secretary and Administrator
Frostrow Capital LLP (to 12 May 2022)
25 Southampton Buildings, London, England WC2A 1AL
Telephone +44 (0)20 3008 4910
ONE Advisory Limited (from 12 May 2022)
3 Temple Avenue, Temple, London, England EC4Y 0DT
Telephone +44 (0)20 7583 8304
Registered Independent Auditor
Deloitte LLP
Hill House, 1 Little New Street, London, England EC4A 3TR
Corporate Brokers
Stifel Nicolaus Europe Limited
4(th) Floor, 150 Cheapside, London, England EC2V 6ET
HSBC
8 Canada Square, Canary Wharf, London, England E14 5HQ
Registrar and Transfer Office
Equiniti Limited
Aspect House, Spencer Road, Lancing, West Sussex, England BN99
6DA
Telephone (UK) 0371 384 2351*
Textel/hard of hearing line (UK) 0371 384 2255*
Telephone (overseas) +44 121 415 7047
* Lines open 8.30am to 5.30pm (UK time), Monday to Friday
(excluding public holidays in England and Wales).
46
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END
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(END) Dow Jones Newswires
March 03, 2022 02:07 ET (07:07 GMT)
Unbound (LSE:UBG)
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