TIDMQUIZ
RNS Number : 2995N
Quiz PLC
29 September 2021
QUIZ plc
("QUIZ" or the "Group")
Preliminary Results for the year ended 31 March 2021
QUIZ , the omni-channel fashion brand, announces its unaudited
results for the year ended 31 March 2021 ("FY 2021").
Copies of the Audited Annual Report and Accounts for FY 2021
("Annual Report") will shortly be available on the Company's
website at: www.quizgroup.co.uk or by request on the below details.
The Company will notify of the posting of the Annual Report and
Notice of Annual General Meeting by mid-October 2021.
Financial highlights:
The income statement set out below is included to show the
underlying performance of the Group:
Year ended 31 March 2021 Year ended 31 March 2020
Adjusting Adjusting
GBPm Underlying items Reported Underlying items Reported
Revenue 39.7 - 39.7 118.0 - 118.0
Gross profit 21.2 - 21.2 71.1 - 71.1
Non-recurring
costs - - - - (26.3) (26.3)
Government
grants 8.2 - 8.2 - - -
Other operating
expenses (net) (38.8) - (38.8) (73.4) - (73.4)
----------- ---------- --------- -------------- ----------- ---------
Operating
(loss)/profit (9.4) - (9.4) (2.3) (26.3) (28.6)
Gain arising
on disposal
of subsidiary - 10.4 10.4 - - -
Gain on bargain
purchase arising
on acquisition - 5.2 5.2 - - -
----------- ---------- --------- -------------- ----------- ---------
(Loss)/profit
before financing
and taxation (9.4) 15.6 6.2 (2.3) (26.3) (28.6)
Finance costs
(net) (0.2) - (0.2) (0.8) - (0.8)
(Loss)/profit
before tax (9.6) 15.6 6.0 (3.1) (26.3) (29.4)
=========== ========== ========= ============== =========== =========
EBITDA (4.9) 15.6 10.7 8.2 (2.6) (5.6)
=========== ========== ========= ============== =========== =========
Adjusting items in FY21 includes the non-recurring GBP10.4m gain
arising on the disposal of a subsidiary undertaking when it was
placed into Administration and GBP5.2 million gain on bargain
purchase arising on an acquisition and in FY20 includes the impact
of impairments of Right to Use assets, store assets and goodwill
and the write-off of bad debts arising from customers entering
administration.
-- Group revenue decreased 66% period on period in large part due to the significant impact of the COVID-19 pandemic
on trading conditions, including the enforced closure of stores and concessions.
-- Gross margin decreased to 53.4% from 60.3% reflecting an increased level of discounting in part as a result of
the enforced stores and concessions closures
-- Underlying operating costs reduced by 47% reflecting management's decisive actions in response to the impact of
the pandemic
-- Underlying operating costs, net of the receipt of GBP8.2 million of Government support. reduced by 58%
-- Non-recurring non-cash gain of GBP10.4 million arising on the disposal of a subsidiary undertaken in the year,
further to it entering into administration.
-- Non-recurring non-cash gain of GBP5.2 million further to the gain on bargain purchase arising on the acquisition
of the trade and certain assets of subsidiary which entered into administration.
-- Operating cash outflows of GBP2.5 million (FY 2020: inflow GBP10.2 million)
-- Total liquidity headroom at the period end of GBP2.4 million, being cash net of bank borrowings of GBP1.5 million
and GBP0.9 million of undrawn bank facilities (31 March 2020: GBP6.9 million of cash and GBP3.5 million of
undrawn bank facilities)
Operational highlights:
-- Decisive action to secure substantial cost reductions in response to significant impact of COVID-19 pandemic on
sales
-- Store portfolio restructuring now complete, resulting in a smaller store footprint focused on more attractive
locations, a significantly lower rental cost base, linked to revenues generated, and more flexible leases
-- Group's store estate comprised 61 stores in the United Kingdom and four in the Republic of Ireland at the end of
the year (31 March 2020: 75 in the UK and 7 in the ROI), with one further opening in the Republic of Ireland
subsequently
Post year end and Outlook:
-- Gradual improvement in sales since the removal of restrictions on large scale social events with performance
approaching pre pandemic levels on a like for like basis
-- As a result, t he Board is pleased that the Group has achieved sales of GBP30.6 million since the Period end (the
five months to 31 August 2021), representing a GBP17.4 million increase on the revenues generated in the period
from 1 April to 31 August 2021.
-- The Group has agreed an extension of its existing GBP3.5m banking facilities until 30 September 2022.
-- Total liquidity headroom at 28 September 2021 of GBP6.2 million, being cash net of bank borrowings of GBP3.8
million and undrawn banking facilities of GBP2.4 million.
-- With the recovery in revenues experienced to date the Group anticipates generating a positive cash flow from
operating activities in the year ended 31 March 2022.
-- Going forward, a higher proportion of revenues will be generated from the Group's own stores and websites which
have traditionally generated higher returns than other revenue streams.
Tarak Ramzan, Founder and Chief Executive Officer,
commented:
"Against a backdrop of highly challenging trading conditions
during the year, including the enforced closures of stores and
concessions for substantial periods and the cancellation of social
events that are a key driver for demand of QUIZ's trademark
occasion wear, we have taken decisive actions to position the
business to return to long-term profitable growth, including
reducing the size of our store estate, decreasing costs, and
maintaining very tight cash management.
"We have continued to invest in our own e-commerce channels as
we optimise our omni-channel model. We remain confident in the
strength and appeal of QUIZ as an occasion wear led brand, as has
been evidenced by the increase in demand and positive trends across
our operational KPIs as social events returned during the summer.
This continues to underpin the Board's confidence in our ability to
continue to improve performance and achieve profitable growth as
more normal trading patterns return."
Enquiries :
QUIZ plc Via Hudson Sandler
Tarak Ramzan, Chief Executive
Officer
Gerry Sweeney, Chief Financial
Officer
Sheraz Ramzan, Chief Commercial
Officer
Panmure Gordon
(Nominated Adviser and Sole Broker)
Alina Vaskina (Corporate Finance)
Erik Anderson (Corporate Broking) +44 (0) 207 886 2500
Hudson Sandler LLP (Public Relations) +44 (0) 207 796 4133
Alex Brennan / Lucy Wollam quiz@hudsonsandler.com
Notes:
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 as it forms part of UK
domestic law by virtue of the European Union (Withdrawal) Act 2018
("MAR").
About QUIZ :
QUIZ is an omni-channel fashion brand, specialising in occasion
wear and dressy casual wear. QUIZ delivers a distinct proposition
that empowers its fashion forward customers to stand out from the
crowd.
QUIZ's buying and design teams constantly develop its own
product lines, ensuring the latest glamorous looks at value prices.
This fast, flexible supply chain, together with the winning formula
of style, quality, value and speed-to-market has enabled QUIZ to
grow rapidly into an international brand with stores, concessions,
franchise stores, wholesale partners and international online
partners in 20 countries.
QUIZ operates through an omni-channel business model, which
encompasses online sales, standalone stores, concessions,
international franchises and wholesale arrangements.
To download images please visit:
http://www.quizgroup.co.uk/media-download-centre/
For further information:
https://www.quizclothing.co.uk/
http://www.quizgroup.co.uk/
CHAIRMAN'S STATEMENT
Introduction
The 2021 financial year has been almost entirely impacted by the
COVID-19 pandemic. From March 2020, communities and businesses
across the UK have felt its significant impact whether that be
through the closure of non-essential retail, national lockdowns and
the cancellation of social events, or its effect on consumer
confidence.
During this very challenging period, the Group's priority has
been on ensuring the safety and welfare of its people and
customers. I would like to take this opportunity to thank the
Group's management team and all colleagues across the UK for their
commitment and hard work during what has been an incredibly
challenging time.
In addition to navigating the effects of COVID-19, I am pleased
to note that the Group successfully addressed the challenges of the
last 18 months and took proactive actions to improve its future
prospects. The steps taken during the year to restructure our
business and to preserve the cash available to the business have
been beneficial as demand for our ranges increase and sales
progressively return towards their previous levels.
FY2021 performance overview
The disruption caused by COVID-19 was a significant factor in
the 66% decline in Group's revenues during the year to 31 March
2021 to GBP39.7 million (FY 2020: GBP118.0 million). The two key
COVID-19 related factors impacting the Group's revenue performance
were as follows:
-- Firstly, in the United Kingdom, our stores and concessions
were closed for sustained periods including from 22 March 2020
until their gradual reopening in June 2020 and from late December
2020 to mid-April 2021. In addition, various Government implemented
social restrictions in place during the period alongside overall
consumer uncertainty impacted footfall when stores and concessions
were open.
-- Secondly, occasion wear and dressy wear for social events and
activities are at the centre of the QUIZ brand. The curtailment of
social occasions resulted in a materially detrimental impact on
demand across all revenue streams, including in the Group's
International business segment. In response, the Group rebalanced
its product offering to increase more casual ranges and reduce
exposure to occasion wear. These steps helped to mitigate the
impact of COVID-19 but did not fully compensate for the decline in
demand experienced since March.
In response to these challenges, in June 2020, the Group
undertook a restructuring of its store portfolio. The purpose of
this restructuring was to secure an economically viable store
portfolio that, going forward, is aligned to the business's
strategy. As a result of this restructuring, Kast Retail Limited
("Kast"), a subsidiary of the Group which previously operated the
Group's standalone stores in the United Kingdom and Ireland, was
placed into administration and the business and certain assets of
Kast were acquired by the Group for a cash consideration of GBP1.3
million.
Following the restructuring, 66 of the Group's previously
operated 82 stores have reopened. The new lease arrangements have
an average lease term of 24 months and charges predominantly linked
to revenues generated, providing the Group with increased
flexibility going forward.
In addition to the store restructuring the business has reduced
its dependence on third parties, with a significant fall in the
number of concessions, further to the closure of Debenhams and
Outfit stores, and the number of third-party websites operated.
Going forward, this will allow the business to generate more of its
revenues from its own stores and websites which have traditionally
generated higher returns than other revenue streams.
The disposal of Kast when it entered into administration and the
subsequent repurchase of its business and certain assets gave rise
to a total of GBP15.6 million of gains in the Income Statement ,
resulting in profits before financing and taxation of GBP6.2
million (FY 2020: loss of GBP28.7 million) and EBITDA of GBP10.7
million (FY 2020: GBP5.6 million). Reported profit before tax
amounted to GBP6.0 million (FY 2020: loss of GBP29.4 million),
while underlying loss before tax decreased to GBP9.6 million (FY
2020: GBP3.1 million). The Financial Review section provides more
detail on the Group's financial performance during the year.
Cash position
The Group's primary focus during the year was the preservation
of cash to ensure that the business could capitalise on increased
demand once restrictions were lifted. In addition to reducing
capital spend and operating costs and restricting the amounts of
inventory acquired the Group also utilised the Government support
available to it. As at 31 March 2021, the Group had GBP2.4 million
of total liquidity headroom, being a cash balance net of bank
borrowings of GBP1.5 million and GBP0.9 million of undrawn bank
facilities.
The cash position since the year end has improved with total
liquidity headroom on 28 September 2021 of GBP6.2 million, being
GBP3.8 million of cash net of bank borrowings and GBP2.4 million of
undrawn bank facilities. Cash flows since 31 March 2021 have
benefited from the more favourable trading conditions and the
disposal of inventory carried over from periods where stores and
concessions were unable to trade.
The GBP3.5 million bank facilities available to the Group were
recently renewed and will expire on 30 September 2022. There are no
financial covenants applicable to these facilities.
This will support the business's initiatives to further
diversify the product range and ensure the Group is well positioned
to respond to the continued increase in demand for its core
occasion wear offering in due course.
Operating an ethical supply chain
The Board will continue to prioritise ensuring that the Group
has an ethical and responsible supply chain that all QUIZ's
stakeholders can be proud of. The Group is committed to continuing
to invest in this critical area of the business to ensure that the
Group's systems remain robust and that the Group's strict Ethical
Code of Practice is always adhered to by all QUIZ's suppliers.
There is an ongoing programme to ensure that all our products
are supplied in line with our Ethical Code of Practice. Regular
supplier visits continue to be conducted and processes are in place
to allow for clear visibility across the Group's supply chain. The
Board remains resolutely committed to ensuring the Group's systems,
processes and culture are fit for purpose to assure compliance in
this area.
Dividends
Given the operating losses incurred in the current year, the
Board does not recommend the payment of a final dividend (FY 2020:
GBPNil).
Outlook and current trading
The Group has seen increasing demand for its core product
offering as restrictions on events and social gatherings were
removed. This is driving a return towards the revenues generated
prior to the pandemic on a like-for-like basis. As a result, t he
Board is pleased that the Group has achieved sales of GBP30.6
million since the period end (the five months to 31 August 2021).
This was driven by the performance of our own website and our more
flexible and economically viable store portfolio. These sales are
consistent with the Board's expectations and represent a GBP17.4
million increase on the revenues generated in the period from 1
April to 31 August 2020.
Revenues from each of the Group's channels were as follows:
I April I April
to 31 August to 31 August Year-on-year
2021 2020 change
Online GBP10.6m GBP8.2m +29%
UK stores and concessions GBP13.7m GBP3.0m +357%
International GBP6.3m GBP2.0m +215%
Total GBP30.6m GBP13.2m +132%
Whilst uncertainty around COVID-19 persists, we continue to
believe that the QUIZ brand has strong customer appeal and that the
Group's omni-channel business model remains relevant and key to our
long-term success.
We are encouraged by the increasing demand for the Group's
product proposition and the revenue growth generated since the year
end and this combined with the Group's proactive actions taken
during the past 18 months, mean we remain confident in the Group's
future success.
Peter Cowgill
Non-Executive Chairman
CHIEF EXECUTIVE'S REPORT
Introduction
QUIZ's FY 2021 financial year was characterised by challenging
trading conditions, the extent of which were unlike anything we
have experienced during our decades operating within the retail
sector.
Throughout this time, we remained steadfastly focused on
navigating the continuing uncertainty, leveraging QUIZ's
omni-channel model to mitigate the impact of the pandemic as far as
possible, and strengthening the Group's foundations to ensure its
long-term health following its emergence from the impact of the
COVID-19 pandemic.
The revenue generated from each channel during the period was as
follows:
Year to Year to Share Share
31 March 31 March Year-on-year of revenue of revenue
2021 2020 change 2021 2020
Online GBP21.6m GBP37.5m - 42% 54.5% 31.8%
International GBP7.6m GBP21.8m - 65% 19.1% 18.5%
UK stores and concessions GBP10.5m GBP58.7m - 82% 26.4% 49.7%
Total GBP39.7m GBP118.0m - 66%
As we emerge from the COVID-19 crisis, the Group's long-term
strategy remains to develop the QUIZ brand through its omni-channel
distribution model and to adapt and improve to ensure the brand
continues to succeed . The Group has a particular focus on
capturing the significant online opportunities available to QUIZ,
supported by a profitable store and concession portfolio.
Central to this strategy is the QUIZ brand, which is a
distinctive fashion brand that empowers fashion-forward females to
stand out from the crowd. We continue to firmly believe that the
QUIZ brand has a clear, differentiated position in the market as an
occasion wear led brand and continues to resonate with a broad age
range of customers. This belief is supported by the increased
demand for our products since the easing of restrictions on social
events post year end.
Optimising the omni-channel model in the UK
QUIZ continues to believe in the benefits of operating an
omni-channel model that broadens the awareness and appeal of the
brand, and provides customers the opportunity to engage with the
brand across different channels and capturing QUIZ's sales growth
potential online remains a key priority for the Group.
Supported by the acceleration of structural trends towards
increased online shopping, we continue to believe that QUIZ's
online channel offers significant long-term growth potential for
the Group. In FY 2021, online sales represented 55% of QUIZ's Group
revenue (FY 2020: 32%).
Going forward the focus will be to ensure the business benefits
from the return to social activities and the increased number of
weddings and other social events over the next year whilst
enhancing the profitability of online sales.
Sales volumes through the QUIZ website have improved since the
year end and going forward it is this that will be the key factor
in delivering profitable growth.
The Group has continued to reduce its exposure to UK department
stores. In the year ended 31 March 2021 the number of concessions
operated reduced from 156 to 119 and reduced further to 45 post
year end. The decline reflects the closure of concessions that were
generating little return or were operating at a loss and the impact
of the closure of Debenhams and Outfit stores. The majority of the
remaining concessions are operated in New Look stores and allow for
flexible arrangements for increasing the number of concessions
operated given these are not staffed by QUIZ personnel and there is
limited capital outlay required. Further to these changes the
proportion of revenues generated from UK concessions will reduce
from circa 20% prior to the pandemic to less than 10% going
forward.
The Group believes that stores and concessions with appropriate
cost bases can make a positive contribution going forward and are
encouraged by the returns generated from our stores since the year
end. We will continue to undertake initiatives to promote footfall
into stores including trialling the introduction of new product
categories in store, utilising our store network for online
collections and returns, and improving stock availability across
the estate.
Selective international growth potential through capital light
model
We continue to receive positive customer reactions to the QUIZ
brand internationally. Our mix of casual and occasion wear can be
tailored for each market and our flexible route to market has been
beneficial.
Whilst each of these markets has its own challenges,
international sales represented 19% of QUIZ's Group revenue (FY
2020: 19%). We continue to identify opportunities to extend our
sales through low-risk, low-cost international expansion driven by
our capital-light online, consignment and concession routes to
market.
Managing gross margin
Whilst progress was made in the previous year to improve gross
margins, the decline in revenues during the year and increased
levels of excess stock led to an increased level of discounting.
This resulted in the gross margin generated declining to 53.4% (FY
2020: 60.3%), however this has increased following the year end as
customers have shown a preference for newer full price product.
In recent months we have been experiencing increased
inflationary pressures in relation to product and its shipment. To
date these additional costs have been absorbed by the business.
In addition, the lead times for product being delivered have
been extended. We are confident that our well-established
relationships with suppliers will allow us to minimise any
disruption to our business.
Right sizing our cost base
We have sought to manage and reduce costs wherever possible. In
the current year substantial cost savings have arisen from the
renegotiation of rental arrangements for stores, the reduction of
staff numbers at head office and across the business and the
curtailment of marketing spend when demand for occasion wear had
significantly reduced.
As well as various cost saving initiatives the utilisation of
the various arrangements to support businesses provided by the UK
Government has been important, with the suspension of business
rates for the year and the provision of GBP8.2 million of cash
support received under the furlough scheme and other payments.
We will continue to review our cost base to ensure it is
appropriate for the revenues that will be generated going
forward.
A strong brand
QUIZ is a distinctive fashion brand which, over many years, has
developed a specialisation in occasion wear and dressy casual wear
for women. QUIZ's core business continues to deliver a distinct
proposition that empowers fashion-forward females to stand out from
the crowd.
We firmly believe that the QUIZ brand has a clear,
differentiated position in the market and continues to resonate
with a broad age range of customers. This belief is supported by
the increased demand for our products since restrictions on social
events lifted post year end.
The strength of the QUIZ brand and flexibility of its model
enabled the Group to expand into new product categories in light of
the cancellation of, and restrictions on, large scale social events
that the brand's products have typically been associated with.
Following the implementation of these restrictions, the Group
strategically expanded its product proposition to maintain
relevance through the changes to customers' lifestyles, reducing
occasion wear product where possible and expanding into selected
casual wear categories that will provide the Group further
diversification going forward. These actions helped to mitigate but
did not fully compensate for the reduced demand for occasion
wear.
Whilst the number of online active customers declined during the
year, we have seen a sharp increase in activity in the five months
to August 2021 with an annualised equivalent of 578,000 active
customers, an uplift of 79% on the numbers recorded in the year
ended 31 March 2021, reflecting the appeal of the brand when
relevant social events are undertaken.
During the period of lower demand for its core proposition, the
brand has maintained its social media engagement relative to the
prior year, with 2% and 4% increases in our Instagram and Facebook
audiences respectively.
Our flexible supply chain remains a key competitive
advantage
The business has a well invested infrastructure and a proven
successful supply chain. This allows for the business to respond to
customer demands and seek to quickly replicate the latest looks
seen on social media, the catwalk or television. Our supply chain
and ability to constantly refresh products for sale in store and
online are strong competitive advantages. QUIZ continues to
introduce new products each week in order to meet customer demand
as trends emerge throughout the season. The Board believes this
remains an important component for success as customers
increasingly access the options available of where, when and how to
shop.
QUIZ's online channel offers significant potential
With structural and market-wide consumer trends towards
increased online shopping accelerating as a result of the COVID-19
pandemic, we continue to believe that QUIZ's online channel offers
significant long-term growth potential for the Group.
In FY 2021, online sales represented 55% of QUIZ's Group revenue
(FY 2020: 32%). The focus over the past year was to expand the
product offering available to customers and to manage excess
inventories.
The Group is focused on growing its own website sales rather
than through third-party website partners which provide the brand
with important exposure but generate a lower return.
Targeted marketing investment
Underpinning the growth and expansion of the QUIZ brand is the
Group's approach to targeted and returns-driven marketing
investment. Whilst investment was restricted during the year given
the Group's focus on cost management as a result of the impact of
the pandemic on sales, the drop in revenues resulted in marketing
investment as a proportion of Group sales for FY2021 increasing to
3.6% (FY 2020: 2.3%).
Further to the reduction in spend a digital approach was
primarily adopted to marketing with a focus on our casual ranges.
This allowed us to continue with a measurable return on advertising
spend whilst effectively managing the cost base.
Once our stores re-opened at the end of summer 2020 we increased
marketing activity and planned influencer and celebrity campaigns
for the autumn / winter 2020 period to promote our party wear
ranges. The reintroduction of restrictions on social events
impacted the demand for evening wear and which hindered the impact
of the visually strong campaigns undertaken in October and November
2020.
Now that entertainment, events and social gatherings are no
longer restricted, we have increased our budgets and have a
pipeline of celebrity and influencer activity planned for the
autumn / winter 2021 party season. We are excited to see our
activity and voice through social media increase significantly
again as a result of the new campaigns. This will be supplemented
with digital marketing and offline activity to push the QUIZ brand
to the forefront of our customer's minds as they celebrate
throughout the party season.
Strategic KPIs
2021 2020 Change
Active customers 323,000 638,000 - 49%
Online sales as a % of turnover 54.5% 31.8% + 23%
International outlets serviced 76 80 * 4
UK retail space - square
footage 174,000 218,000 - 20%
Our team
The last 18 months have been truly unprecedented and presented
challenges to the business which would have not appeared previously
credible. I continue to be grateful for the talent, professionalism
and dedication of our colleagues across stores and concessions, our
distribution centre and head office and would like to thank all my
colleagues for their hard work and contribution in the last
year.
I would also like to thank our suppliers, business partners and
customers for their continued support which allows the business and
brand to approach the future with confidence.
Tarak Ramzan
Chief Executive Officer
FINANCIAL AND BUSINESS REVIEW
Basis of preparation
To provide comparability across reporting years, the results
within this Financial Review are presented on an "underlying" basis
and excludes certain non-recurring transactions. In the current
year, an adjustment is made to exclude the non-recurring GBP15.6
million of gains which arose from the disposal of a subsidiary
undertaking which entered administration and the subsequent
repurchase of its business and certain assets. In the previous year
the adjustments made for non-recurring costs amounted to GBP26.3
million in the year in respect of the impairment of Right of Use
assets, store assets and goodwill and a bad debt expense. A
reconciliation between underlying and reported results is provided
at the end of this Financial Review.
Group overview
COVID-19 impacted each area of our business during the year and
the focus was on actions that could be taken to reduce costs,
preserve cash and strengthen the Group's financial position.
Group revenue decreased 66% to GBP39.7 million (FY 2020:
GBP118.0 million).
Further to this decline in revenues, the underlying operating
loss incurred was GBP9.4 million (FY 2020: GBP2.3 million).
Including the non-recurring transactions, a profit before financing
and taxation of GBP6.2 million was generated (FY 2020: loss of
GBP28.6 million).
Financial KPIs
2021 2020 Change
Revenue GBP39.7m GBP118.0m - 66.4%
Gross margin 53.4% 60.3% - 6.9%
Adjusted EBITDA % (1) (13.4%) 6.9% - 20.3%
Cash from operating activities
(1) (GBP2.5m) GBP10.2m - GBP12.7m
1. In the current year the impact of the non-recurring gains
which arose from the disposal of a subsidiary undertaking which
entered administration and the subsequent repurchase of its
business and certain assets is excluded. In the previous year the
impact of the impairment of Right of Use assets, store assets and
goodwill and a bad debt expense is excluded.
Underlying EBITDA generated declined to a loss of GBP4.9 million
(FY 2020: profit of GBP8.2 million) which represented a negative
EBITDA margin of 12.3% (FY 2020: positive margin of 6.9%).
Including the non-recurring transactions, EBITDA was GBP10.7
million (FY 2020: GBP5.6 million).
Underlying Group loss before tax was GBP9.6 million (FY 2020:
GBP3.1 million). Profit before tax reflecting non-recurring
transactions was GBP6.0 million (FY 2020: loss of GBP29.4
million).
Further to this, the underlying loss per share, which is
calculated using the underlying profit/(loss) before tax less tax
at the effective statutory rate, was 7.54 pence (FY 2020: 2.17
pence). After reflecting the non-recurring transactions, the profit
per share was 5.00 pence (FY 2020: loss of 23.37 pence).
Cash net of bank borrowings at the year-end amounted to GBP1.5
million (31 March 2020: GBP6.9 million).
Revenue
Group revenue decreased by 66% to GBP39.7 million from GBP118.0
million in 2020, with our three revenue channels shown below:
Year to Year to Share Share
31 March 31 March Year-on-year of revenue of revenue
2021 2020 growth 2021 2020
Online GBP21.6m GBP37.5m - 42% 54.5% 31.8%
International GBP7.6m GBP21.8m - 65% 19.1% 18.5%
UK stores and concessions GBP10.5m GBP58.7m - 82% 26.4% 49.7%
Total GBP39.7m GBP118.0m - 66%
Online
The reduction in Online revenues reflects the impact of the
prolonged lockdowns and curtailment of social occasions through the
period.
There were similar declines in revenue in sales through the QUIZ
website and sales through third-party websites. Sales through the
QUIZ website, which was closed for a number of weeks in April 2020,
declined 42% and sales through third-party websites declined 44% in
the year.
The impact of the reduced demand during the year was reflected
in the number of active customers at 31 March 2021 which had
declined 49% in the year to 323,000 (FY 2020: 638,000).
International
International sales include revenue from QUIZ standalone stores
and concessions in the Republic of Ireland and franchises in 20
countries. In the previous year, revenues also included our three
standalone stores in Spain. These stores did not trade in the
period, due to lockdown restrictions, and closed in June 2020
further to the administration of Kast.
As with the UK sales, International revenues were impacted by
pandemic related lockdowns and reduced demand leading to a 65%
decline to GBP7.6 million (FY 2020: GBP21.8 million).
Revenues in Ireland declined 85% in the year to GBP1.2 million
as a result of the prolonged lockdowns restricting trading, the
closure of Debenhams Irish concessions in March 2020 and the
reduction in stores operated from seven to four. Currently the
business operates 5 stores and 15 concessions in Ireland (31 March
2020 - 7 stores and 23 concessions).
Franchise sales were particularly impacted by a decline in sales
in the first quarter and whilst sales momentum improved through the
year revenues declined 48% to GBP6.4 million (FY 2020: GBP12.2
million).
UK stores and concessions
The performance of our stores and concessions reflects their
enforced closure for more than half their potential trading hours
during the year. When open, trade was below the same period two
years ago with reduced footfall being partially offset by higher
conversion rates.
In addition to these factors, a number of stores were
permanently closed post the administration of Kast, others were
closed for a period whilst new lease arrangements were negotiated
and a significant number of concessions were closed during the
year.
Sales in the Group's UK standalone stores and concessions
decreased 82% to GBP10.5 million (FY 2020: GBP58.7 million).
As at 31 March 2021, the Group operated from 61 stores and 119
concessions (31 March 2020: 75 stores and 156 concessions). Since
the year end and the closure of the Debenhams stores the number of
concessions operated has fallen to 45. Further to these changes,
total selling space across the stores and concessions at 31 March
2021 decreased by 20% to 174,000 sq. ft. (31 March 2020: 218,000
sq. ft.) and further to the closure of the Debenhams concessions
post year end is currently 131,000 sq. ft.
Gross margin
Discounting increased across the year given reduced demand
experienced and the requirement to clear excess stocks. Due to this
and the lower proportion of sales generated through the usually
higher margin stores and concessions, the gross margin in the year
declined to 53.4% (FY 2020: 60.3%).
Since 31 March 2021, customers have expressed a preference for
new product and whilst promotional activity is still undertaken it
is not as aggressive as in the previous year. This has resulted in
a better full price mix across all retail channels and the gross
margin generated, being circa +400bps than that generated in the
previous year.
Although the Group sought to work with suppliers through the
year to actively manage inventory purchase commitments and to phase
deliveries appropriately, given the decline in revenues there was
an increase in slow-moving stock to be managed. The business has
been successful selling much of this stock in the period since the
year end by consolidating and representing stock unsold in the
previous year.
There was no requirement to significantly increase the provision
against slow-moving stock in the year given the provisions in the
prior year adequately provided for the impact of lockdowns and the
reduced demand for occasion wear.
During the period we encountered increased cost pressures in
relation to product costs and the costs associated with their
shipment. In addition, the widely reported issues with regard to
deliveries from China and other regions impacting delivery times
also affected and continue to affect the Group. Any potential
negative impact is mitigated by the availability of stock from the
previous year given the prolonged lockdown post December 2020.
Going forward we will look to minimise the impact of increased
costs on customers and will adjust delivery schedules to ensure
that product is available when required.
Underlying operating costs
Consistent with the fall in revenues there have been significant
reductions in operating costs, namely administrative and
distribution costs, in the year. Underlying costs decreased by 47%
in from GBP73.4 million to GBP38.8 million. The reductions in costs
reflect the impact of lower revenues on variable costs, including
turnover rents, merchant fees, certain distribution costs,
utilities, travel and expenses and the benefit of cost reduction
initiatives undertaken during the year.
In addition to these reductions, operating costs have been
supplemented by GBP8.2 million of financial support from the UK
Government which is included in other operating income. If this
income, which was largely received to supplement employee costs,
was offset against operating costs, the reduction in underlying
operating costs amounted to 58% which reflects the actions taken by
management to reduce costs.
Underlying administrative costs decreased by GBP12.5 million or
44% to GBP30.5 million (FY 2020: GBP54.7 million). The most
significant reductions included:
-- GBP10.2 million or a 77% reduction in property costs
(including depreciation charges in relation to leases for
standalone stores) further to the restructuring of our standalone
stores, revised rental agreements and the temporary waiver of
business rates for retail businesses in the financial year to March
2021;
-- GBP7.5 million or a 30% reduction in employment costs, before
the benefit of grant income received in relation to furloughed
employees, reflecting reductions in employee numbers, the impact of
employees being placed on furlough and the reduction in director
salaries applied in the period;
-- GBP1.4 million or a 31% reduction in depreciation and
amortisation costs (excluding depreciation charges in relation to
leases for standalone stores). These reduced costs reflect the
impairment of assets recorded in the previous year which reduced
the amount of assets to depreciated and amortised; and
-- GBP1.3 million or a 48% reduction in marketing costs. Spend
undertaken in the year focused on digital marketing which proved to
be beneficial. Given the increased demand and anticipation of
further interest in occasion and dressy wear post year end the
business has various marketing plans to implement to benefit from
this increased interest.
Distribution costs decreased 56% to GBP8.3 million (FY 2020:
GBP18.8 million) and is reflective of the lower revenues generated
in the period.
Included in distribution costs are commission payments to third
parties which sell product on behalf of QUIZ. These fell as a
result of the enforced closure on concessions and lower online
sales through third parties.
Also reflected in the drop in distribution costs are lower
carriage costs to stores, concessions and franchises as well as to
online customers in line with the reduced revenues generated.
Other operating income
The business has benefited from the financial support provided
by the UK Government in response to the COVID-19 pandemic. The
support provided has included the waiver of business rates for
retail businesses across the whole year as well as direct payments
made to businesses.
The Group placed employees on furlough through the Government's
Coronavirus Job Retention Scheme and received GBP7.0 million of
payments in relation to its utilisation of these arrangements.
In addition, there were GBP1.2 million of payments received in
relation to coronavirus grants made available to retail businesses
which were closed due to national or local restrictions.
Non-recurring items
As noted above, GBP 15.6 million of gains arose from the
disposal of a subsidiary undertaking which entered administration
and the subsequent repurchase of its business and certain assets
.
Non-recurring charges arose in the previous year in respect of
the impairment of Right of Use assets, store assets and goodwill
and a bad debt expense and amounted to GBP26.3 million.
Finance costs
The finance cost of GBP0.2 million (FY 2020: GBP0.8 million)
primarily relates to interest costs arising on the lease payments
for stores in accordance with IFRS 16. The reduction in interest
charges reflects that the leases for stores now primarily have
charges dependent on revenues generated rather than fixed costs
over a period of time and therefore none of these charges are
treated as an interest cost.
Taxation
The current year reported tax rate is a credit of 3.1% (FY 2020:
tax credit rate of 1.4%). The reported tax rate reflects that the
GBP15.6 million non-recurring gain arising from the administration
of a subsidiary undertaking is not subject to tax.
Given the uncertainty with the timing and quantum of future
profits no deferred tax assets have been recognised in relation to
tax losses incurred. The unrecognised deferred tax asset at 31
March 2021 amounts to GBP1.9 million (31 March 2020: GBP3.9
million). The tax losses in the previous year were predominantly
incurred by a subsidiary which entered into Administration during
the year and are no longer included as part of the unprovided
deferred tax asset.
Given the potential for the unrecognised deferred tax asset to
mitigate future tax charges the Group's effective tax rate in
future years is expected to be below the statutory rate.
Earnings per share
Basic earnings per share for 2021 was 5.00 pence per share (FY
2020: loss per share of 23.37 pence).
The underlying basic loss per share for 2020, which is
calculated using the underlying loss after tax, was 7.54 pence (FY
2020: 2.17 pence).
Dividends
No dividend was paid during the year (FY 2020: GBPNil). Given
the operating loss incurred in the current year the Board does not
recommend the payment of a final dividend.
Cash flow and cash position
Cash net of bank borrowings at the year-end amounted to GBP1.5
million (31 March 2020: GBP6.9 million).
Net cash flow from operating activities resulted in an outflow
of GBP2.5 million (FY 2020: inflow of GBP10.2 million). Reflected
in this outflow of cash is a GBP2.3 million working capital inflow
(FY 2020: GBP5.4 million). The reduction in working capital in the
year, which is net of the impact of the administration of the
subsidiary undertaking, arose further to:
-- lower revenues being derived from third parties leading to a
GBP2.5 million reduction in receivables;
-- cash management procedures which resulted in a GBP1.3 million increase in payables; and
-- the retention of stock acquired for stores and concessions
which were closed in the final quarter of the financial year
resulting in a GBP1.1 million increase in inventories.
Given the focus on preserving cash in the last year investment
in the business was restricted to GBP0.3 million with GBP0.2
million spent on intangible assets and GBP0.1 million on property,
plant and equipment.
Subsequent to the administration of Kast Retail Limited, the
business and certain assets were acquired by the Group for GBP1.3
million.
New loans of GBP1.4 million were obtained during the year from
utilising the working capital facility entered into during the
year.
The payment of lease liabilities amounted to GBP1.1 million (FY
2020: GBP6.7 million) reflecting lease charges now primarily being
dependent on revenues generated which results in charges payable
being treated as an operating rather than financing activity.
Foreign currency hedging
The Group currently undertakes foreign exchange
transactions.
The primary inflow of foreign exchange relates to Euro
denominated revenues generated in Ireland. The primary outflow of
foreign exchange relates to the purchase of stock, primarily in
Chinese Renminbi.
The Group manages the risk associated with foreign currency
fluctuations through the use of forward contracts for the sale or
the purchase of the respective currency for a period between six
and twelve months in advance. We have currently hedged our expected
currency inflows and outflows for the remainder of the financial
year to 31 March 2021.
Reconciliation of underlying and reported IFRS results
In establishing the underlying operating profit in the current
year an adjustment is made to remove the impact of the
non-recurring GBP15.6 million of gains which arose from the
disposal of a subsidiary undertaking which entered administration
and the subsequent repurchase of its business and certain assets ,
as described in Note 8 and 9.
The adjustments in the previous year related to non-recurring
charges in respect of the impairment of right-of-use assets,
property, plant and equipment and goodwill, the write-down of
inventory and a bad debt expense as described in Note 4.
A reconciliation between underlying and reported results is
provided below:
2021 2020
Non-recurring Non-recurring
GBPm Underlying costs Reported Underlying costs Reported
Revenue 39.7 - 39.7 118.0 - 118.0
Gross profit 21.2 - 21.2 71.1 - 71.1
Government grants 8.2 - 8.2 - - -
Other operating costs
(net) (38.8) - (38.8) (73.4) (26.3) (99.7)
----------- -------------- --------- ----------- -------------- ---------
Operating loss (9.4) - (9.4) (2.3) (26.3) (28.6)
Gain on disposal
of subsidiary - 10.4 10.4 - - -
Gain on bargain purchase
arising on acquisition - 5.2 5.2 - - -
----------- -------------- --------- ----------- -------------- ---------
(Loss)/(profit)
before finance costs (9.4) 15.6 6.2 (2.3) (26.3) (28.6)
Finance costs (net) (0.2) - (0.2) (0.8) - (0.8)
----------- -------------- --------- ----------- -------------- ---------
(Loss)/profit before
tax (9.6) 15.6 6.0 (3.1) (26.3) (29.4)
=========== ============== ========= =========== ============== =========
Operating loss (9.4) - (9.4) (2.3) (26.3) (28.6)
Gain on disposal
of subsidiary - 10.4 10.4 - - -
Gain on bargain purchase
arising on acquisition - 5.2 5.2 - - -
Depreciation and
amortisation 4.5 - 4.5 10.5 23.7 34.2
----------- -------------- --------- ----------- -------------- ---------
EBITDA (4.9) 15.6 10.7 8.2 (2.6) 5.6
=========== ============== ========= =========== ============== =========
QUIZ plc
Consolidated statement of comprehensive income
Year ended 31 March 2021
2021 2020
Notes GBP000 GBP000
----------------------------------------- ----- -------- --------
Continuing operations
Revenue 3 39,703 118,020
Cost of sales (18,516) (46,892)
----------------------------------------- ----- -------- --------
Gross profit 21,187 71,128
----------------------------------------- ----- -------- --------
Recurring administrative costs (30,476) (54,681)
Non-recurring administrative costs 4 - (26,337)
----------------------------------------- ----- -------- --------
Total administrative costs (30,476) (81,198)
Distribution costs (8,304) (18,810)
Government grants 5 8,163 -
Other operating income 69 38
----------------------------------------- ----- -------- --------
Total operating costs (30,548) (99,790)
----------------------------------------- ----- -------- --------
Operating loss (9,361) (28,662)
Gain arising on disposal of subsidiary
undertaking 8 10,364 -
Gain on bargain purchase arising
on acquisition 9 5,216 -
----------------------------------------- ----- -------- --------
Profit/(loss) before financing and
taxation 6,220 (28,662)
Finance income 10 45 28
Finance costs 10 (239) (811)
Profit/(loss) before income tax 6,027 (29,445)
Income tax credit 11 186 418
----------------------------------------- ----- -------- --------
Profit/(loss) for the year 6,212 (29,027)
----------------------------------------- ----- -------- --------
Other comprehensive income:
Foreign currency translation differences
- foreign operations (20) 62
----------------------------------------- ----- -------- --------
Profit/(loss) and total comprehensive
income for the year attributable
to owners of the parent 6,192 (28,965)
----------------------------------------- ----- -------- --------
Profit/(loss) per share:
Basic and diluted earnings per share 12 5.00p (23.37)p
----------------------------------------- ----- -------- --------
All of the above income is attributable to the shareholders of
the Company.
QUIZ plc
Consolidated statement of financial position
As at 31 March 2021
31 March 31 March
2021 2020
Notes GBP000 GBP000
--------------------------------- ----- -------- --------
Assets
Non-current assets
Property, plant and equipment 14 5,218 7,270
Right to use asset 15 2,981 2,992
Intangible assets 16 3,413 4,061
Deferred tax assets 74 -
Total non-current assets 11,686 14,323
--------------------------------- ----- -------- --------
Current assets
Inventories 17 11,087 9,693
Trade and other receivables 18 3,590 7,110
Cash and cash equivalents 4,183 6,897
--------------------------------- ----- -------- --------
Total current assets 18,860 23,700
--------------------------------- ----- -------- --------
Total assets 30,146 38,023
--------------------------------- ----- -------- --------
Liabilities
Current liabilities
Trade and other payables 19 (8,202) (11,367)
Loans and borrowings 20 (2,662) -
Lease liabilities 15 (1,866) (6,388)
Derivative financial liabilities 21 (21) (36)
Corporation tax payable - (149)
--------------------------------- ----- -------- --------
Total current liabilities (12,751) (17,940)
--------------------------------- ----- -------- --------
Non-current liabilities
Lease liabilities 15 (1,099) (9,950)
Deferred tax liabilities 22 (74) (7)
--------------------------------- ----- -------- --------
Total non-current liabilities (1,173) (9,957)
--------------------------------- ----- -------- --------
Total liabilities (13,924) (27,897)
--------------------------------- ----- -------- --------
Net assets 16,622 10,126
--------------------------------- ----- -------- --------
Equity
Called-up share capital 24 373 373
Share premium 24 10,315 10,315
Merger reserve 24 1,130 915
Retained earnings 24 4,804 (1,477)
--------------------------------- ----- -------- --------
Total equity 16,622 10,126
--------------------------------- ----- -------- --------
QUIZ plc
Consolidated statement of changes in equity
Year ended 31 March 2021
Share Share Merger Retained
capital premium reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2019 373 10,315 915 29,196 40,799
Profit and total comprehensive
income for the year - - - (28,965) (28,965)
(1,739 (1,739
Share-based payments charge - - - ) )
Dividends paid - - - 31 31
------------------------------------- -------- -------- -------- --------- --------
At 31 March 2020 373 10,315 915 (1,477) 10,126
Profit and total comprehensive
income for the year - - - 6,192 6,192
Share-based payments charge - - - 89 89
Movement arising from administration
of subsidiary - - 215 - 215
At 31 March 2021 373 10,315 1,130 4,804 16,622
------------------------------------- -------- -------- -------- --------- --------
QUIZ plc
Consolidated cash flow statement
Year ended 31 March 2021
Year ended Year ended
31 March 31 March
2021 2020
Notes GBP000 GBP000
----------------------------------------------- ----- ---------- ----------
Cash flows from operating activities
Cash generated by operations
Profit/(loss) for the year 6,212 (29,027)
Adjusted for:
Depreciation of property, plant and
equipment 2,153 3,911
Impairment of property, plant and
equipment - 7,350
Depreciation of right-of-use assets 1,447 6,117
Impairment of right-of-use assets - 11,208
Amortisation of intangible assets 868 467
Impairment of intangible assets - 5,230
Gain from disposal of subsidiary undertaking (10,364) -
Gain on bargain purchase arising from
acquisition (5,216) -
Share-based payment charges 89 31
Exchange movement (2) 87
Finance cost expense 194 783
Income tax credit (186) (418)
(Increase)/decrease in inventories (1,486) 4,760
Decrease in receivables 2,517 4,920
Increase/(decrease) in payables 1,266 (4,275)
Net cash from operating activities (2,509) 11,146
Interest paid (55) (696)
Income taxes refunded/(paid) 97 (255)
----------------------------------------------- ----- ---------- ----------
Net cash (outflow)/inflow by operating
activities (2,467) 10,195
----------------------------------------------- ----- ---------- ----------
Cash flows from investing activities
Payments to acquire intangible assets (220) (1,528)
Payments to acquire property, plant
and equipment (101) (2,548)
Payment to acquire trade and assets (1,302) -
Interest received 45 28
----------------------------------------------- ----- ---------- ----------
Net cash outflow from investing activities (1,578) (4,048)
----------------------------------------------- ----- ---------- ----------
Cash flows inflow/(outflow) from financing
activities
Loans received 1,406 -
Repayment of borrowings - (40)
Payment of lease liabilities (1,316) (6,739)
Net cash used in by financing activities 26 90 (6,779)
----------------------------------------------- ----- ---------- ----------
Net decrease in cash and cash equivalents (3,955) (632)
Cash and cash equivalents at beginning
of year 6,897 7,555
Effect of foreign exchange rates (15) (26)
----------------------------------------------- ----- ---------- ----------
Cash and cash equivalents at end of
year 27 2,927 6,897
----------------------------------------------- ----- ---------- ----------
The Group considers overdrafts to be an integral part of its
cash management activities and these are included in cash and cash
equivalence for the purposes of the cash flow statement.
Selected notes to the Group financial statements
Year ended 31 March 2021
1 Significant accounting policies
General information
Quiz Plc (the 'parent company') is a public limited company,
incorporated and domiciled in Jersey. It is listed on AIM. The
registered office of the Company is 22 Grenville Street, St Helier,
Jersey, Channel Islands E4 8PX. The principal activity of the group
is that of retailing clothes.
Basis of preparation
The Board of Directors approved this preliminary announcement on
28 September 2021. Whilst the financial information included in the
preliminary announcement has been prepared in accordance with the
recognition and measurement criteria of International Accounting
Standards in conformity with the requirements of the Companies Act
2006 ("IAS") and the Companies (Jersey) Law 1991, this announcement
does not itself contain sufficient information to comply with all
the disclosure requirements of IAS and does not constitute
statutory accounts within the meaning of Companies (Jersey) Law
1991 but is derived from the accounts of the Company for the years
ended 31 March 2021 and 2020. The preliminary financial information
is prepared applying the same accounting policies as those to be
adopted t in the statutory accounts for the year ended 31 March
2021. The figures for the year ended 31 March 2021 are
unaudited.
The financial statements are presented in Pounds Sterling
because that is the currency of the primary economic environment in
which the Group operates. Monetary amounts in these financial
statements are rounded to the nearest thousand. Foreign operations
are included in accordance with the policies set out below.
The annual financial statements have been prepared on the
historical cost basis, except for certain financial assets and
liabilities which are carried at fair value.
The preparation of financial statements in conformity with
International Accounting Standards in conformity with the
requirements of the Companies Act 2006 requires the use of
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reported year.
Although these estimates are based on management's best knowledge
of current events and actions, actual results ultimately may differ
from those estimates.
The audit of the statutory accounts for the year ended 31 March
2021 is not yet complete. These accounts will be finalised on the
basis of the financial information presented by the directors in
the preliminary announcement. The statutory accounts for the year
ended 31 March 2021 will be filed with the Jersey Companies
Registry in due course. The statutory accounts for the year ended
31 March 2020 have been filed with the Jersey Companies Registry.
The auditor's report on those 2020 accounts was unqualified and did
not contain a statement under 113B (3) or 113B (4) of the Companies
(Jersey) Law 1991 but did include a matter to which the auditors
drew attention by way of emphasis without qualifying their report
relating to a material uncertainty over going concern. The
accounting policies are consistent with those disclosed in the
Groups audited financial statements for the year ended 31 March
2021.
Adoption of new and revised standards
There have been no new IASs adopted in the current year which
have materially impacted the Group's financial statements.
Going concern
As with many businesses in the retail sector, the Group has been
significantly impacted by COVID-19. The impact and management's
response to it is set out in detail within the Chief Executive
report and Financial and Business Review.
The key judgements in relation to the going concern assessment
are in respect of the potential impact of COVID-19 on the Group and
the likelihood and impact of further social restrictions or
lockdowns, including their duration and the impact on consumer
demand in the markets in which the Group operates.
When making these judgements, the Directors considered the
current trading levels, which have been consistent with
management's expectation, and the outlook for the Group against
their detailed base case scenario and further downside
scenarios.
At 31 March 2021, the Group had cash net of bank borrowings of
GBP1.5 million, being a GBP4.2 million cash balance offset by a
bank loan and overdraft totalling GBP2.7 million, and GBP0.9
million of unutilised banking facilities (31 March 2020: GBP6.9
million of cash and GBP3.5 million of unutilised banking
facilities).
Borrowing facilities
The Group has GBP3.5 million of banking facilities, which were
recently extended until 30 September 2022. These facilities
comprise a GBP2.0 million overdraft and GBP1.5 million working
capital facility. There are no financial covenants associated with
these facilities, which are reviewed annually. Whilst the
facilities are repayable on demand the Directors believe that these
facilities will be available to the Group through to 30 September
2022 and will be renewed in due course.
The Group had net cash of GBP3.8 million at 28 September 2021,
being a GBP4.9 million cash balance offset by a bank loan and
overdraft totalling GBP1.1 million, and GBP2.4 million of
unutilised banking facilities.
Forecast scenarios
The Directors' have reviewed management's business plan forecast
for the period to 31 March 2023. The forecasts have been produced
on the following basis:
-- Base case scenario assumes stores and concessions are open
throughout the period under review. A sales recovery is assumed to
levels 5-10% below those generated prior to COVID-19 on a
like-for-like throughout the period under review for stores and
concessions. Web sales are assumed to recover to previous levels by
November 2020 and to achieve modest growth from April 2022. This
reflects management's estimates for the speed and extent of the
recovery across its different sales channels and markets.
-- Downside scenario assumes reduced sales in the period from
September 2020 to April 2021 to reflect reduced demand including
assumed reductions in store and concessions sales of 25% on a
like-for-like basis in November and December and 80% in January and
February. Online sales are assumed to be 30% below their base case
scenario.
Within each forecast, management have reflected outstanding
financial commitments and the impact of previously realised cost
savings. There are no further anticipated savings incorporated in
response to any downside scenario for reduced revenues nor is there
any Government support or subsidies assumed, other than those
previously announced at the date of this report. Further actions
could be undertaken to mitigate against any shortfalls arising from
these scenarios. These include reducing operating costs and capital
expenditure, ceasing or suspending loss-making activities and
optimising working capital.
The Base Case and Downside scenario forecasts indicate the Group
will remain within its available borrowing facilities through the
forthcoming 12-month period. Under the downside scenario the Group
has more than GBP2.6 million available liquidity headroom
through-out the period under consideration.
Going concern basis
Based on the assessment outlined above, the Directors have a
reasonable expectation that the Group has access to adequate
resources to enable it to continue to operate as a going concern
for the foreseeable future, being a period of at least twelve
months from the date when these financial statements are authorised
to be issued. For these reasons, the Directors consider it
appropriate for the Group to continue to adopt the going concern
basis of accounting in preparing the Annual Report and financial
statements
2 New accounting pronouncements
There are several standards and interpretations issued by the
IASB that are effective for financial statements after this
reporting period. Of these new standards, amendments and
interpretations, there are none which are expected to have a
material impact on the Group's consolidated financial
statements.
3 Revenue
A n analysis of revenue by geographical destination is as
follows:
2021 2020
GBP000 GBP000
-------------------------- ------ -------
Online 21,621 37,485
International 7,592 21,789
UK stores and concessions 10,491 58,746
-------------------------- ------ -------
39,703 118,020
-------------------------- ------ -------
2021 2020
GBP000 GBP000
------------------ ------ -------
United Kingdom 31,565 95,288
Rest of the world 8,138 22,732
------------------ ------ -------
39,703 118,020
------------------ ------ -------
As at 31 March 2021 non-current assets in the United Kingdom
were GBP11,528,000 (FY 2020: GBP14,097,000) with GBP158,000 (FY
2020: GBP226,000) located in the rest of the world.
4 Administrative costs
Administrative costs comprise:
2021 2020
GBP000 GBP000
-------------------------------------------- ------ ------
Impairment of right-of-use-assets - 11,208
Impairment of property, plant and equipment - 7,350
Write-down of inventory - 2,165
Impairment of goodwill - 5,230
Write-off of debt - 384
-------------------------------------------- ------ ------
- 26,337
-------------------------------------------- ------ ------
Impairment of Right to Use assets
The GBP11,208,000 charge in relation to the impairment of Right
to use assets in the year ended 31 March 2020 relates to the value
previously attributed to the right-of-use assets associated with
standalone stores.
The impairment charges arose further to a decline in footfall in
stores leading to a number of them becoming unprofitable during the
year. In addition, Kast Retail Limited which operated the
standalone stores was placed into administration on 10 June 2020.
Further to this all the leases associated with standalone stores
were terminated resulting in a reduction in value previously
attributed to these leases.
Impairment of store assets
Retail store assets (as with other financial and non-financial
assets) are subject to impairment based on whether current or
future events and circumstances suggest that their recoverable
amount may be less than their carrying value. Given the
circumstances outlined above there was a requirement for an
impairment charge in the prior year.
The net present value of future cash flows is calculated and
discounted at the appropriate risk adjusted rate. Further to this a
GBP7,350,000 charge was recognised in relation to the impairment of
store assets in the year ended 31 March 2020.
Write-down of inventory
The GBP2,165,000 charge in the year ended 31 March 2020 was to
provide against the value of excess stock retained by the business
given the decline in demand during the year and the impact of
stores and concessions being closed for a prolonged period of time.
Given the circumstances this slow-moving stock was written down to
its estimated realisable value.
Impairment of goodwill
At 31 March 2019, the Group recorded goodwill of GBP6,175,000
relating to the difference between the fair value of the
consideration transferred and the fair value of assets and
liabilities purchased which arose when Shoar (Holdings) Limited
acquired the entire share capital of Tarak Retail Limited in
2012.
The goodwill was assessed for impairment by comparing the
carrying value to value-in-use calculations. Further to this
assessment given the losses projected for the year ended 31 March
2021 and the uncertainty as to future performance the Directors
considered that the goodwill was impaired by GBP5,230,000.
Write-off of debt
The non-recurring costs of GBP384,000 related to the write-off
of debt arising from a customer entering into an administration
process.
5 Government grants
2021 2020
GBP000 GBP000
--------------------------------------- ------ ------
Government support - furlough payments 6,943 -
Government support - grant income 1,220 -
--------------------------------------- ------ ------
8,163 -
--------------------------------------- ------ ------
6 Employee benefit expenses
Employment costs and average monthly number of employees
(including Directors) during the year were as follows:
2021 2020
GBP000 GBP000
---------------------------- ------ ------
Wages and salaries 15,382 20,148
Social security costs 969 1,478
Other pension costs 299 338
Agency costs 939 3,211
Share-based payment charges 89 31
---------------------------- ------ ------
17,678 25,206
---------------------------- ------ ------
No. No.
--------------- ----- -----
Retail 998 1,456
Distribution 46 66
Administration 206 214
--------------- ----- -----
1,249 1,736
--------------- ----- -----
Included above is GBP624,000 in respect of Directors'
remuneration (FY 2020: GBP675,000).
7 Operating loss
Operating loss is stated after charging/crediting:
2021 2020
GBP000 GBP000
------------------------------------------------ ------- -------
Cost of inventories recognised as an expense 18,516 46,892
Distribution costs 8,304 18,810
Employment costs 17,678 25,206
Depreciation 3,600 10,028
Amortisation 868 467
Short-term and variable lease costs 430 542
Non-recurring impairment of property, plant
and equipment - 7,350
Non-recurring impairment of right-of-use assets - 11,208
Non-recurring write-down of inventory 2,165
Non-recurring impairment of goodwill - 5,230
Non-recurring write-off of debt - 384
Government grants (8,163) -
Other operating income (69) (38)
Other expenses 7,900 18,400
------------------------------------------------ ------- -------
49,064 146,682
------------------------------------------------ ------- -------
Included in the above are the costs associated with the
following services provided by the Company's auditors:
2021 2020
GBP000 GBP000
---------------------------------------------------- ------ ------
Audit services
Audit of the Company and the consolidated financial
statements 12 11
Audit of the Company's subsidiaries 80 62
---------------------------------------------------- ------ ------
Total audit fees 92 73
All other services 1 5
---------------------------------------------------- ------ ------
Total fees payable to the Company's auditors 93 78
---------------------------------------------------- ------ ------
8 Gain arising from disposal of subsidiary undertaking
The Group's 82 standalone stores in the United Kingdom and the
Republic of Ireland were operated by Kast Retail Limited ("Kast").
The Group's three standalone stores in Spain were operated by Kast
International Spain SL, a wholly owned subsidiary of Kast. On 10
June 2020, the Company announced proposals to restructure its
standalone retail store portfolio which resulted in Kast being
placed into administration and triggered the disposal of Kast by
QUIZ plc which resulted in the gain below:
GBP000
--------------------------------------------------- --------
Disposal proceeds -
Net liabilities of subsidiary undertaking disposed
of (10,364)
--------------------------------------------------- --------
Gain arising on disposal of subsidiary undertaking (10,364)
--------------------------------------------------- --------
The net liabilities of the disposed subsidiary undertaking
primarily related to lease liabilities in relation to leases
associated with standalone stores
9 Gain on bargain purchase arising on acquisition
Further to the appointment of joint administrators to Kast,
Zandra Retail Limited ("Zandra"), a wholly owned subsidiary of the
Company, acquired the business and certain assets of Kast,
including inventories, fixtures and fittings, contracts and
vehicles on 10 June 2020 for a cash consideration of
GBP1,302,000.
Whilst none of the leases associated with the standalone stores
operated by Kast transferred to Zandra, new lease arrangements were
secured for the majority of the previous standalone stores.
The acquired business contributed revenues of GBP5,975,000 and
profit after tax of GBP1,117,000 to the Group for the period from
10 June 2020 to 31 March 2021. The activities of the acquired
business in the period from 1 April to 10 June 2020 are reflected
in the consolidated financial statements contributing no revenues
and a loss after tax of GBP2,983,000. The results of the combined
entity for the full financial year are therefore revenues of
GBP5,975,000 and loss after tax of GBP1,866,000 and these are fully
reflected in the consolidated financial statements.
The gain on bargain purchase amounting to GBP5,216,000 on the
acquisition, which arose as the deemed fair value of the asset
acquired was greater than the consideration paid, has been
recognised in the Statement for Comprehensive Income for the
year.
Details of the acquisition are as follows:
Fair
Value
GBP000
-------------------------------------------------- -------
Receivables 266
Property, plant and equipment 5,429
Intangibles 1,199
Inventories 2,420
Trade payables (2,036)
Employee benefits (365)
Other liabilities (395)
-------------------------------------------------- -------
Net assets acquired 6,518
Gain on bargain purchase (5,216)
Fair value of the total consideration transferred 1,302
-------------------------------------------------- -------
Represented by:
Cash paid to the vendor 1,302
-------------------------------------------------- -------
The fair value of the property, plant and equipment and
intangible assets represents the net book value of these assets as
previously recognised by Kast retail Limited (in Administration).
The directors consider this to be an appropriate valuation on the
basis that the business is being carried on as a going concern and
is expected to generate a positive financial contribution going
forward. The costs of the acquisition recognised as an expense as
part of administration costs amounted to GBP194,000.
10 Finance income and expense
2021 2020
GBP000 GBP000
-------------------------- ------ ------
Interest on cash deposits 45 28
Finance income 45 28
-------------------------- ------ ------
2021 2020
GBP000 GBP000
--------------------------------- ------ ------
Interest on lease liabilities 199 758
Interest on loans and overdrafts 38 13
Other interest 2 40
--------------------------------- ------ ------
Finance expense 239 811
--------------------------------- ------ ------
11 Income tax
2021 2020
GBP000 GBP000
------------------------------------------------ ------- --------
UK corporation tax - current year - 70
UK corporation tax - prior year (170) (95)
Foreign tax (9) (23)
Deferred tax - current year (200) (374)
Deferred tax - effect of adjustment in tax rate - (53)
Deferred tax - prior year 193 57
------------------------------------------------ ------- --------
Tax on profit/(loss) (186) (418)
------------------------------------------------ ------- --------
Reconciliation of effective tax rate
Profit/(loss) on ordinary activities before
taxation 6,027 (29,445)
------------------------------------------------ ------- --------
Profit/(loss) on ordinary activities multiplied
by standard rate of UK corporation tax of 19% 1,145 (5,595)
Expenses not deductible for tax purposes (2,862) 1,135
Non recognition of potential of deferred tax
asset 1,494 3,940
Excess of depreciation over capital allowances - 53
Adjustments to previous years 23 (38)
Foreign tax adjustments 14 88
------------------------------------------------ ------- --------
(186) (418)
------------------------------------------------ ------- --------
12 Earnings per share
2021 2020
Number of shares: No. No.
----------------------------------- ------------- -------------
Weighted number of ordinary shares
outstanding - basic and diluted 124,230,905 124,230,905
----------------------------------- ------------- -------------
Earnings: GBP000 GBP000
-------------- ------- --------
Profit/(loss) 6,212 (29,027)
Loss adjusted (9,368) (2,690)
-------------- ------- --------
Earnings per share: Pence Pence
---------------------------- ------ -------
Basic earnings per share 5.00 (23.37)
Adjusted earnings per share (7.54) (2.17)
---------------------------- ------ -------
The diluted basic and adjusted earnings per share is the same as
the basic and adjusted earnings per share each year.
The adjusted profit after tax in the current year is shown
before the impact of the GBP15,580,000 of gains which arose from
the disposal of a subsidiary undertaking which entered
administration and the subsequent repurchase of its business and
certain assets
The adjusted profit after tax in the previous year is shown
before the impact of the non-recurring administrative costs of
GBP26,337,000 (net of tax).
The Directors believe that the adjusted profit/(loss) after tax
and the adjusted earnings/(loss) per share measures provide
additional useful information for shareholders on the underlying
performance of the business. These measures are consistent with how
underlying business performance is measured internally. The
adjusted profit/(loss) after tax measure is not a recognised profit
measure under IFRS and may not be directly comparable with adjusted
profit measures used by other companies.
13 Dividends
No dividends in respect of 2021 are proposed (FY 2020:
GBPNil).
14 Property, plant and equipment
Fixtures,
fittings
Leasehold Motor Computer and
property vehicles equipment equipment Total
GBP000 GBP000 GBP000 GBP000 GBP000
----------------- --------- --------- ---------- ---------- --------
Cost
At 1 April 2020 1,627 146 2,031 24,081 27,885
Additions 22 13 37 29 101
Disposals (1,165) (55) (503) (9,059) (10,782)
----------------- --------- --------- ---------- ---------- --------
At 31 March 2021 484 104 1,565 15,051 17,204
----------------- --------- --------- ---------- ---------- --------
Depreciation
At 1 April 2020 1,357 101 1,061 18,096 20,615
Charge 93 21 231 1,808 2,153
Disposals (1,165) (55) (503) (9,059) (10,782)
----------------- --------- --------- ---------- ---------- --------
At 31 March 2021 285 67 789 10,845 11,986
----------------- --------- --------- ---------- ---------- --------
Net book value
At 31 March 2021 199 37 776 4,206 5,218
----------------- --------- --------- ---------- ---------- --------
At 31 March 2020 270 45 970 5,985 7,270
----------------- --------- --------- ---------- ---------- --------
15 Right to use assets and lease liabilities
Property
GBP000
----------------- --------
Cost
At 1 April 2020 32,218
Additions 4,153
Disposals (32,218)
At 31 March 2021 4,153
-------------------- --------
Amortisation
At 1 April 2020 29,226
Charge 1,447
Disposals (29,501)
At 31 March 2021 1,172
-------------------- --------
Net book value
At 31 March 2021 2,981
-------------------- --------
At 31 March 2020 2,992
-------------------- --------
The Group presents lease liabilities separately within the
statement of financial position. The movement in the year
comprised:
2021 2020
GBP000 GBP000
-------------------------------------------------------- -------- -------
At 1 April 2020 16,338 -
Recognised on adoption of IFRS16 - 20,860
Additions 4,153 2,217
Interest expense related to lease liabilities 199 758
Repayment of lease liabilities (including interest) (1,316) (7,497)
Leases terminated further to administration of
subsidiary undertaking (16,338) -
Interest liability terminated further to administration
of subsidiary undertaking (71) -
-------------------------------------------------------- -------- -------
At 31 March 2021 2,965 16,338
-------------------------------------------------------- -------- -------
Current lease liabilities 1,866 6,388
Non-current lease liabilities 1,099 9,950
-------------------------------------------------------- -------- -------
The termination of leases arose further to Kast Retail Limited
entering into administration during the year. Cash outflows in
respect of leases during the year amounted to GBP1, 746,000 (FY
2020: GBP7,281,000).
Short-term operating leases
At the balance sheet date, the Group had outstanding commitments
for future minimum lease payments under non-cancellable leases
which fall due as follows:
2021 2020
GBP000 GBP000
---------------- ------ ------
Within one year 48 23
---------------- ------ ------
16 Intangibles
Computer
Goodwill software Trademarks Total
GBP000 GBP000 GBP000 GBP000
----------------- -------- --------- ---------- ------
Cost
At 1 April 2020 6,175 4,085 165 10,425
Additions - 220 - 220
Disposals - (679) - (679)
At 31 March 2021 6,175 3,626 165 9,966
----------------- -------- --------- ---------- ------
Amortisation
At 1 April 2020 5,230 1,090 44 6,364
Charge 18 834 16 868
Disposals - (679) - (679)
At 31 March 2021 5,248 1,245 60 6,553
----------------- -------- --------- ---------- ------
Net book value
At 31 March 2021 927 2,381 105 3,413
----------------- -------- --------- ---------- ------
At 31 March 2020 945 2,995 121 4,061
----------------- -------- --------- ---------- ------
The goodwill primarily arose when Shoar (Holdings) Limited
acquired the entire share capital of Tarak Retail Limited in 2012
and reflects the difference between the fair value of the
consideration transferred and the fair value of assets and
liabilities purchased. Goodwill is assessed for impairment by
comparing the carrying value to value-in-use calculations. Value in
use has been estimated using cash flow projections based on
detailed budgets and forecasts over the period of three years, with
a decline rate of 5% (FY 2020: 4%) and a pre-tax discount rate of
10% (FY 2020: 10%) applied, being the Directors' estimate of the
Group's cost of capital, with no terminal value. The budgets and
forecasts are based on historical data and the past experience of
the Directors as well as the future plans of the business. No
reasonable change in any of the assumptions would result in an
impairment charge and therefore no sensitivity analysis is
disclosed. The Directors do not consider goodwill to be impaired in
the current year (FY 2020: GBP5,230,000).
17 Inventories
2021 2020
GBP000 GBP000
------------------------------------ ------ ------
Finished goods and goods for resale 11,087 9,693
------------------------------------ ------ ------
The cost of inventories recognised as an expense during the year
in respect of continuing operations amounted to GBP18,516,000 (FY
2020: GBP46,892,000). The cost of inventories recognised as an
expense includes a net credit GBP617,000 (FY 2020: expense of
GBP1,939,000) in respect of write-downs of inventory to net
realisable value. In addition, GBP2,165,000 of the non-recurring
costs incurred in the prior year related to the write-down of
inventories to net realisable value. Inventories are stated after
provisions for impairment of GBP3,688,000 (FY 2020:
GBP4,305,000).
18 Trade and other receivables
2021 2020
GBP000 GBP000
-------------------------------- ------ ------
Trade receivables - gross 2,265 3,079
Allowance for doubtful debts (301) (320)
-------------------------------- ------ ------
Trade receivables - net 1,964 2,759
Other receivables 769 1,539
Prepayments and accrued income 857 2,810
Amounts owed by related parties - 2
-------------------------------- ------ ------
3,590 7,110
-------------------------------- ------ ------
The Directors consider that the fair value of trade and other
receivables is not materially different from the carrying
value.
19 Trade and other payables
2021 2020
GBP000 GBP000
-------------------------------------- ------ ------
Trade payables 4,025 6,852
Other taxes and social security costs 1,562 1,354
Accruals 2,149 2,301
Other payables 458 852
Amounts due to related parties 8 8
-------------------------------------- ------ ------
8,202 11,367
-------------------------------------- ------ ------
Trade payables and accruals principally comprise amounts
outstanding for trade purchases and ongoing costs. The Directors
consider that the fair value of trade and other payables is not
materially different from the carrying value.
Included within other payables at the year-end date was a
balance of GBP52,000 (FY 2020: GBP63,000) owed to the Group's
pension scheme.
20 Loans and borrowings
2021 2020
GBP000 GBP000
---------------- ------ ------
Bank loans 1,406 -
Bank overdrafts 1.256 -
2,662 -
---------------- ------ ------
Current 2,662 -
Non-current - -
---------------- ------ ------
2,662 -
---------------- ------ ------
Bank loans, overdrafts and other credit facilities are secured
by an unlimited multilateral and cross-company guarantee given by
Zandra Retail Limited and Tarak International Limited and also by a
limited guarantee given by, and by a floating charge over the
assets of, Zandra Retail Limited and Tarak International Limited.
The bank also holds a right of set-offs between Zandra Retail
Limited and Tarak International Limited. All entities included in
the guarantee are wholly owned subsidiaries in the Group. In
addition, the Company has provided a Parent Company Guarantee with
respect to the facilities.
In addition, bank overdrafts and other credit facilities are
secured by a bond and floating charge from Tarak Retail Limited
over the whole of its property and undertakings.
The bank overdrafts are other credit facilities, subject to
review in September 2022 and are repayable on demand.
Borrowings are denominated and repaid in Pounds Sterling, have
contractual interest rates that are either fixed rates or variable
rates linked to LIBOR that are not leveraged, and do not contain
conditional returns or repayment provisions other than to protect
the lender against credit deterioration or changes in relevant
legislation or taxation.
21 Derivative financial instruments
2021 2020
GBP000 GBP000
------------------------- ------ ------
Foreign currency options 21 36
------------------------- ------ ------
Forward foreign exchange contracts are used to hedge exposure to
fluctuations in foreign exchange rates that arise in the normal
course of the Group's business.
As at 31 March 2021, the Group had commitments to buy the
equivalent of GBP800,000 of Chinese Renminbi (FY 2020:
GBP3,200,000) and sell the equivalent of GBPNil of Euros (FY 2020:
GBP854,000) and GBPNil of US Dollars (FY 2020: GBP324,000).
22 Deferred tax
The following is an analysis of the deferred tax assets:
2021 2020
GBP000 GBP000
---------------------------------------- ------ ------
Accelerated capital allowances
Balance brought forward 7 378
Credit to income statement 67 (370)
Effect of foreign exchange rates - (1)
---------------------------------------- ------ ------
Total deferred tax asset at end of year 74 7
---------------------------------------- ------ ------
At 31 March 2021 there was an unprovided deferred tax asset in
relation to tax losses incurred of GBP1,922,000 (31 March 2020:
GBP3,944,000). The tax losses in the previous year were
predominantly incurred by a subsidiary which entered into
Administration during the year and are no longer included as part
of the unprovided deferred tax asset.
23 Financial instruments
The following table shows the carrying amounts and fair values
of financial assets and liabilities. All financial liabilities are
measured at amortised cost. The derivative liability, which is
measured at fair value, is level 2 in the fair value hierarchy as
disclosed in note 21.
2021 2020
GBP000 GBP000
----------------------------------------- -------- --------
Category of financial instruments
Carrying value of financial assets:
Cash and cash equivalents 2,723 6,897
Trade and other receivables 2,733 4,300
----------------------------------------- -------- --------
Total financial assets 6,906 11,197
----------------------------------------- -------- --------
Carrying value of financial liabilities:
Trade and other payables (6,640) (10,013)
Bank and other borrowings (2,662) -
Derivative financial instruments (21) (36)
Lease liabilities (2,965) (16,338)
----------------------------------------- -------- --------
Total financial liabilities (12,288) (26,387)
----------------------------------------- -------- --------
The fair value and carrying value of financial instruments have
been assessed and there is deemed to be no material differences
between fair value and carrying value.
The cash and cash equivalents are held with bank and financial
institution counterparties, which are rated P-1 and A-1, based on
Moody's ratings.
24 Share capital and reserves
2021 2020
GBP000 GBP000
---------------------------------------------- ------ ------
Share capital - allotted, called up and fully
paid
124,230,905 ordinary shares of 0.3 pence each
(31 March 2020: 124,230,905) 373 373
---------------------------------------------- ------ ------
Share premium 10,315 10,315
---------------------------------------------- ------ ------
Share capital
The issued share capital at 31 March 2021 comprised 124,230,905
ordinary shares of 0.3 pence each with a nominal value of
GBP372,693. The company has one class of ordinary share which have
equal right, preferences and restrictions.
Share premium
The share premium reserve contains the premium arising on the
issue of equity shares, net of issue expenses incurred by the
Company. The 6,583,851 ordinary shares of 0.3 pence each with a
nominal value of GBP19,752 on 28 July 2017 were issued at a price
of 161 pence per share giving rise to a share premium of
GBP10,315,248 (net of expenses).
Merger reserve
The merger reserve arose on the purchase of the subsidiaries,
Kast Retail Limited, Tarak International Limited and Shoar
(Holdings) Limited. The merger reserve represents the difference
between the cost value of the shares acquired less the cost value
of the shares issued for the purchase of each company and the stamp
duty payable in respect of these transactions. The movement in the
merger reserve during the year represents the elimination of the
merger reserve relating to Kast Retail Limited further to entering
into Administration during the year.
Retained earnings
The movement on retained earnings is as set out in the statement
of changes in equity. Retained earnings represent cumulative
profits or losses, net of dividends and other adjustments.
25 Share-based payments
The movement in awards during the year was:
CSOP Warrants Total
----------------------- --------- -------- ---------
Opening balance 1,725,771 186,335 1,912,106
Lapsed during the year (195,674) - (195,674)
Closing balance 1,530,097 186,335 1,716,432
------------------------ --------- -------- ---------
All share options were valued using the Black-Scholes model.
Expected volatility was determined by management, using comparator
volatility as a basis. The expected life of the options was
determined based on management's best estimate. The expected
dividend yield was based on the anticipated dividend policy of the
Company over the expected life of the options. The risk-free rate
of return input into the model was a zero-coupon government bond
with a life in line with the expected life of the options.
The inputs to the model were as follows:
CSOP Warrant
------------------------------------------------- --------- -------
Grant date 31/7/19 28/7/17
Weighted average share price 15.75 80.50
No. of employees 72 1
Shares under option 1,530,097 186,335
Vesting period (years) 3 -
Expected volatility 88.5% 31.4%
Risk-free rate 0.5% 0.5%
Possibility of ceasing employment before vesting 4 2
Expectations of meeting performance criteria 100% 100%
Expected dividend yield 2.0% 2.0%
------------------------------------------------- --------- -------
The Group recognised a total expense of GBP89,000 during the
year (FY 2020: GBP31,000) relating to equity-settled share-based
payments, including employer's National Insurance contributions of
GBP11,000 (FY 2020: GBP4,000).
Company Share Option Plan ("CSOP")
The Group operated a share option scheme during the year for
certain employees under the CSOP, which allows tax advantaged
options to be granted over the Company's shares to selected
employees of the Group. The different options vest after three
years and have an exercise life between three and ten years from
grant date. The exercise of the options is subject to continued
employment over the vesting year.
Warrants
The Company entered into a Warrant Instrument with its Chairman,
Peter Cowgill, dated 18 July 2017, pursuant to which Peter Cowgill
may subscribe for up to 186,335 ordinary shares exercisable in
whole or in part at a subscription price equal to 80.5 pence. The
warrants are exercisable until the earlier of (i) their full
exercise, (ii) Peter Cowgill ceasing to be a Director, or (iii) a
takeover of the Company. At the year end, no warrant instruments
had yet been exercised.
26 Change in liabilities arising from financing activities
Cash Non-cash
2020 Disposal flow changes 2021
GBP000 GBP000 GBP000 GBP000 GBP000
---------------------------------- -------- -------- ------- -------- -------
Cash at bank and in hand 6,897 - (3,955) (15) 2,927
---------------------------------- -------- -------- ------- -------- -------
Net cash per statement of cash
flows 6,897 - (3,955) (15) 2,927
Borrowings - - (1,406) - (1,406)
---------------------------------- -------- -------- ------- -------- -------
Net cash before lease liabilities 6,897 - (5,361) (15) 1,521
Lease liabilities (16,338) 16,409 1,316 (4,352) (2,965)
---------------------------------- -------- -------- ------- -------- -------
Net debt after lease liabilities (9,441) 16,409 (4,045) (4,367) (1,444)
---------------------------------- -------- -------- ------- -------- -------
Non-cash changes relate to the translation of foreign currency
balances at the end of the period and lease acquisitions, disposals
and modifications.
27 Cash and cash equivalents
2021 2020
GBP000 GBP000
----------------------------- ------- ------
Cash at bank and in hand 4,183 6,897
Overdraft (1,256) -
----------------------------- ------- ------
Net cash at bank and in hand 2,927 6,897
----------------------------- ------- ------
28 Financial commitments
Capital commitments
The Group has no capital commitments of at 31 March 2021 (FY
2020: Nil) which were not provided for in the financial
statements.
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END
FR FVLLLFKLZBBF
(END) Dow Jones Newswires
September 29, 2021 02:00 ET (06:00 GMT)
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