TIDMSHOE
RNS Number : 9967X
Shoe Zone PLC
11 January 2022
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the company's obligations under Article 17 of MAR. Upon the
publication of this announcement via regulatory news service this
inside information is now considered to be in the public
domain.
Shoe Zone plc
("Shoe Zone" or the "Company")
Final Results for the 52 week period to 2 October 2021
Shoe Zone PLC is pleased to announce its audited results for the
52 weeks to 2 October 2021, (the "Period").
Financial highlights
-- Revenue of GBP119.1m (2020 : GBP122.6m)
o Store revenue GBP88.6m (2020: GBP103.3m)
o Digital revenue GBP30.5m (2020: GBP19.3m)
o Digital contribution of GBP8.5m (2020: GBP4.6m)
-- Profit before tax GBP9.5m (2020: GBP(14.6)m loss)
-- Earnings per share 14.0p (2020: (23.8)p loss per share)
-- Net cash balance of GBP14.6m (2020: GBP6.3m) at period end
-- Dividend of GBPNil (2020: GBPNil)
Operational highlights
-- Stores traded for 36 weeks (2020: 41 weeks)
-- 410 stores at Period end comprising:
o 343 Original (2020: 403)
o 51 Big Box (2020: 51)
o 16 Hybrid (2020: 6)
-- Net closure of 50 unprofitable locations
-- 10 existing store conversions
-- Annualised lease renewal savings of GBP1.8m, an average reduction of 53%
-- Average lease length of 1.9 years (2020: 2 years)
-- Digital returns rate of 8.4%
Post Period end, as at 10 January 2022:
-- GBP4.4m outstanding CLBILS loan now fully paid off
-- Company is debt free
-- Eligible to reinstate modest dividend payments, with an
intention to return to the dividend list during the current
period
For further information please call:
Shoe Zone PLC Tel: +44 (0) 116 222 3000
Anthony Smith (Chief Executive)
Terry Boot (Finance Director)
Zeus Capital (Nominated Advisor and Broker) Tel: +44(0) 203 829
5000
Daniel Harris, James Hornigold (Corporate Finance)
Dominic King (Corporate Broking)
Chief Executive's statement
Introduction
Shoe Zone had a very successful year due to the incredible hard
work of our teams, by reducing costs, reducing non-essential
capital expenditure, continuing to accelerate investment in our
digital business alongside improving and streamlining
operations.
Profit before tax was at GBP9.5m for the Period (2020: GBP14.6m
loss) with an earnings per share of 14.0p (2020: (23.8)p loss per
share)
Stores traded for 36 weeks delivering revenues of GBP88.6mm
(2020: GBP103.0m / 41 weeks trading). Digital continuing to be a
key growth area generating revenues of GBP30.5m (2020: GBP19.3m) in
the period, an increase of 58%. Our decision to invest in
infrastructure and people pre-pandemic enabled us to take advantage
of the change in buying habits and to cope with the increase in
volumes through our digital shoehub(R) platform.
We ended the Period trading out of 410 stores, having closed a
net 50 unprofitable locations, and converted a further 10 existing
stores to our new formats. We have 343 'Original', 51 'Big Box' and
16 'Hybrid' stores and we are actively working to relocate and/or
refit further stores.
Big Box stores offer 650 styles per season (350 branded), Hybrid
stores offer 475 styles per season (175 branded), and Original
stores offer 300 core styles per season. As we refit existing
stores to our new formats, the branded mix will continue to form a
higher proportion of our overall sales.
Our average lease length is now less than two years, giving us
the opportunity and flexibility to respond to changes in any retail
location at short notice. Property supply continues to outstrip
demand and we therefore expect to take advantage of this
environment and significantly improve our property portfolio over
the medium term.
Strategy Update
The decision to invest in our digital infrastructure and
operations has led to significant growth in online sales over the
last 12 months, giving us the going to continue investing in our
people and our shoehub(R) platform. We aim to increase drop ship
partners, market places, exclusive products, brands and plan to
introduce additional payment and delivery options to enhance
customer experience.
Part of the success of our digital operation is our very
efficient returns process which is complimented by our extensive
network of stores. We have a returns rate of c. 9% and the vast
majority of these are returned to store and our physical store
network is critical to our future success even. We have seen over
the last 18 months a reduction in store numbers as we have exited
unprofitable locations. We will continue to rollout our successful
'Big Box' and 'Hybrid' formats by targeting key towns for
conversion or relocation. Our ultimate goal is a doubling of Big
Box locations to approximately 100 and an increase in Hybrid stores
from 16 to approximately 150. Overall, we anticipate trading from a
similar sales square footage, albeit from a reduced number of
locations.
As part of the changes we have implemented during the pandemic,
planned capital expenditure was reduced to conserve cash. However,
we have already restarted store relocations, refits, infrastructure
changes at our head office and further investment in digital. All
of these areas are key to our strategy going forward and we will
commit to spend c.3% of turnover annually on capital projects as we
did pre-pandemic.
Dividend
At the Period end we had an outstanding CLBILS loan balance of
GBP4.4m, and under the terms of the agreement the business was
restricted from making any dividend payments whilst there was a
balance outstanding. Post Period end, we have fully paid off the
outstanding balance of the CLBILS loan and the Company is therefore
now eligible to recommence dividend payments in the new financial
period.
Financial Review
In the 52 weeks to 2 October 2021 total revenues were at
GBP119.1m (2020: GBP122.6m) with a profit before tax of GBP9.5m
(2020: GBP14.6m loss). The stores traded for 36 weeks compared to
41 in the previous year and we ended the year trading out of a net
50 fewer stores as we continued to close non-profit making
locations.
Digital continues to be a key growth area and traded strongly
throughout the year generating revenues of GBP30.5m (2020:
GBP19.3m) an increase of 58% due to increased revenues from our
online exclusive range, Amazon and drop ship partners. Digital
gross margins increased to 57.8% (2020: 51.7%) due to a greater
proportion of full priced sales and less markdowns. Digital
contribution was GBP8.5m (2020: GBP4.5m) an increase of 89%.
The statutory gross profit for the year increased by GBP27.2m to
GBP32.5m (2020: GBP5.2m) due to reductions in inventory purchases
of GBP2.0m, branch wages of GBP4.8m, branch rates GBP3.8m, fixed
asset depreciation of GBP4.2m, asset impairments of GBP4.9m,
rent/right-of-use-asset depreciation of GBP4.0m and received retail
grants of GBP6.1m, offset by an increase in digital related postage
of GBP2.0m.
Product gross margins increased to 61.5% (2020: 61.4%) due to
less digital promotional activity during lockdown and therefore a
higher proportion of full price sales.
Admin expenses increased by GBP3.0m to GBP16.9m (2020: GBP13.9m)
due to an increase in digital sales related expenses and further
store closure provisioning of GBP1.2m.
Distribution expenses increased by GBP0.5m to GBP4.5m (2020:
GBP4.0m).
The Company ended the Period with a cash and equivalent balance
of GBP19.0m (2020: GBP13.3m) and a net cash balance of GBP14.6m
(2020 GBP6.3m). The increase in cash has been achieved through the
measures taken by the business over the last 12 months, which
restricted capital expenditure and significantly reduced all areas
of cost. As at the Period end we were up to date on all creditor
and rental payments.
Our CLBILS loan outstanding amount was GBP4.4m at the end of the
Period but, post Period end, as at 10 January 2022, we are
delighted to announce all that outstanding amounts due have been
paid off and we are once again debt free.
Capital expenditure for the year was GBP1.4m (2020: GBP2.8m)
which is again considerably lower than our target of 3% of turnover
each year, as a result of the cash preservation measures we
introduced at the start of the pandemic. This level will increase
back to our normal operational level of 3% of turnover in the next
financial year and will cover infrastructure changes at our
distribution centre, IT projects and continued spend on refitting
and relocating stores as we upgrade our store portfolio.
We operate 2 defined benefit pension schemes. The deficit for
the Shoefayre Limited Pension and Life Assurance Scheme reduced by
GBP4.7m to GBP5.9m (2020: GBP10.6m) and for the Shoe Zone Pension
Scheme (closed Sept 2001) the surplus increased by GBP2.2m to
GBP5.9m (2020: GBP3.7m) The reduction in deficit and increase in
surplus is due to an increase in bond yields which reduces the
value placed on the scheme's liabilities, improved investment
performance.
Working capital increased by GBP2.1m to GBP14.2m (2020:
GBP12.1m) due to lower trade creditors and a forex related margin
call of GBP1.2m which has now been settled post Period end.
Earnings per share are 14.0p (2020: (23.8)p loss per share).
Consolidated income statement for the 52 weeks ended 2 October
2021
52 weeks 52 weeks
ended 2 ended 3
October October
2021 2020
GBP'000 GBP'000
Revenue 119,142 122,568
Cost of sales (86,667) (117,332)
---------- -----------
Gross profit 32,475 5,236
Administration expenses (16,962) (13,928)
Distribution costs (4,499) (4,018)
---------- -----------
(Loss)/Profit from
operations 11,014 (12,710)
Finance income - 10
Finance expense (1,558) (1,901)
---------- -----------
(Loss)/Profit before
taxation 9,456 (14,601)
Taxation (2,442) 2,698
---------- -----------
(Loss)/Profit attributable
to equity holders
of the parent 7,014 (11,903)
========== ===========
(Loss)/Profit Earnings
per Share - basic
and diluted 14.03p (23.81p)
========== ===========
Consolidated statement of total comprehensive income for the 52
weeks ended 2 October 2021
52 weeks 52 weeks
ended ended
2 3
October October
2021 2020
GBP'000 GBP'000
(Loss)/profit for the period 7,014 (11,903)
Items that will not be reclassified subsequently
to the income statement
Re-measurement losses on defined benefit
pension scheme 3,379 (2,114)
Movement in deferred tax on pension schemes 761 899
Items that will be reclassified subsequently
to the income statement
Fair value movements on cash flow hedges (190) (2,124)
Tax on cash flow hedges 56 363
Other comprehensive income / (expense)
for the period 4,006 (2,976)
--------------- ----------
Total comprehensive income for the period
attributable
to equity holders of the parent 11,020 (14,879)
=============== ==========
Consolidated statement of financial position as at 2 October
2021
52 weeks 52 weeks
ended ended
2 October 3 October
2021 2020
GBP'000 GBP'000
Assets
Non-Current assets
Property, plant and equipment 14,227 16,967
Right of use assets 30,884 42,387
Deferred tax asset 3,220 5,617
Total non-current assets 48,331 64,971
------------ ------------
Current assets
Inventories 25,131 26,698
Trade and other receivables 5,457 2,735
Derivative financial assets - -
Cash and cash equivalents 19,015 13,266
Total current assets 49,603 42,699
------------ ------------
Total assets 97,934 107,670
------------ ------------
Current liabilities
Trade and other payables (16,440) (17,316)
Lease liabilities (17,035) (19,914)
Derivative financial liability (591) (105)
Bank Loan (4,400) (1,944)
Provisions (1,698) (1,471)
Corporation tax liability (773) (137)
Total current liabilities (40,937) (40,887)
------------ ------------
Non-current liabilities
Trade and other payables - -
Lease liabilities (25,942) (37,475)
Bank Loan - (5,056)
Provisions (1,728) (1,260)
Employee benefit liability (5,909) (10,594)
Total non-current liabilities (33,579) (54,385)
Total liabilities (74,516) (95,272)
------------ ------------
Net assets 23,418 12,398
============ ============
Equity attributable to equity holders
of the company
Called up share capital 500 500
Merger reserve 2,662 2,662
Cash flow hedge reserve (250) (116)
Retained earnings 20,506 9,352
------------ ------------
Total equity and reserves 23,418 12,398
============ ============
Consolidated statement of changes in equity for the 52 weeks
ended 2 October 2021
Share capital Merger Cash flow hedge Retained earnings Total
reserve reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 6 October 2019 500 2,662 1,645 22,470 27,277
Loss for the period - - - (11,903) (11,903)
Defined benefit
pension movements - - - (2,114) (2,114)
Cash flow hedge
movements - - (2,124) - (2,124)
Deferred tax on other
comprehensive income - - 363 899 1,262
Total comprehensive
income for the
period - - (1,761) (13,118) (14,879)
--------------- ---------- ----------------------- ------------------- ----------
Dividends paid during - - - - -
the year (note 11)
--------------- ---------- ----------------------- ------------------- ----------
Total contributions - - - - -
by and distributions
to owners
--------------- ---------- ----------------------- ------------------- ----------
At 3 October 2020 500 2,662 (116) 9,352 12,398
Impact on transition - - - - -
to IFRS 16 (note 13)
At 4 October 2020 500 2,662 (116) 9,352 12,398
Profit for the period - - - 7,014 7,014
Defined benefit
pension movements - - - 3,379 3,379
Cash flow hedge
movements - - (190) - (190)
Deferred tax on other
comprehensive income - - 56 761 817
--------------- ---------- ----------------------- ------------------- ----------
Total comprehensive
income for the
period - - (134) 11,154 11,020
--------------- ---------- ----------------------- ------------------- ----------
Dividends paid during - - - - -
the year (note 11)
--------------- ---------- ----------------------- ------------------- ----------
Total contributions - - - - -
by and distributions
to owners
--------------- ---------- ----------------------- ------------------- ----------
At 2 October 2021 500 2,662 (250) 20,506 23,418
--------------- ---------- ----------------------- ------------------- ----------
Consolidated statement of cash flows for the 52 weeks ended 2
October 2021
52 weeks 52 weeks
ended 2 ended 3
October October
2021 2020
GBP'000 GBP'000
Operating activities
(Loss)/Profit after tax 7,014 (11,903)
Corporation tax 2,442 (2,698)
Finance income - (10)
Finance expense 1,558 1,901
Depreciation of property, plant and equipment 3,144 3,545
Fixed asset impairment and loss on disposal of property, plant and equipment 1,001 4,642
Right of use asset profit on disposal, depreciation and impairment 15,860 23,998
Pension contributions paid (1,500) (1,466)
29,519 18,009
Decrease / (increase) in trade and other receivables (2,722) (810)
Decrease / (increase) in foreign exchange contract 486 336
Decrease / (increase) in inventories 1,567 2,184
(Decrease) / Increase in trade and other payables (816) (5,498)
Increase in provisions 694 1,646
(791) (2,142)
Cash generated from operations 28,728 15,867
Net corporation tax paid 1,353 (283)
---------- ----------
Net cash flows from operating activities 30,081 15,584
---------- ----------
Investing activities
Purchase of property, plant and equipment (1,405) (2,809)
Interest received - 10
---------- ----------
Net cash used in investing activities (1,405) (2,799)
---------- ----------
New secured loan repayable by instalments - 10,000
Repayments of secured loan (2,600) (3,000)
Capital element of lease repayments (20,037) (17,719)
Interest paid (290) (217)
Dividends paid during the year - -
Net cash used in financing activities (22,927) (10,936)
---------- ----------
Net increase in cash and cash equivalents 5,749 1,849
Cash and cash equivalents at beginning of period 13,266 11,417
---------- ----------
Cash and cash equivalents at end of period 19,015 13,266
========== ==========
1. Accounting policies
General information
Shoe Zone plc (the 'Company') is a public company incorporated
and domiciled in England and Wales. The registered office is at
Haramead Business Centre, Humberstone Road, Leicester, LE1 2LH. The
registered number of the Company is 08961190.
The Company and its subsidiaries' (collectively the Group)
principal activity is footwear retailing.
Basis of preparation
The principal accounting policies adopted in the preparation of
the financial statements are set out below. The policies have been
consistently applied for the 52 weeks ended 2 October 2021.
These consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards and
Interpretations (collectively IFRSs) issued by the International
Accounting Standards Board (IASB) as adopted by the European Union
('adopted IFRSs') and those parts of the Companies Act 2006 that
are applicable to companies that prepare financial statements in
accordance with IFRS.
The consolidated financial statements have been prepared on a
going concern basis and under the historical cost convention, as
modified for the revaluation of certain financial assets and
financial liabilities at fair value.
The preparation of financial statements in compliance with
adopted IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise judgement in
applying the Group's accounting policies. The areas where
significant judgements and estimates have been made in preparing
the financial statements and their effect are disclosed in note
2.
The consolidated financial statements are presented in Sterling,
which is also the Group's functional currency.
Amounts are rounded to the nearest thousand, unless otherwise
stated.
Basis of consolidation
The consolidated financial statements incorporating the
financial statements of Shoe Zone plc and its subsidiary
undertakings are all made up to 2 October 2021. The results for all
subsidiary companies are consolidated using the acquisition method
of accounting.
Where the Company has control over an investee, it is classified
as a subsidiary. The Company controls an investee if all three of
the following elements are present: power over the investee,
exposure to variable returns from the investee, and the ability of
the investor to use its power to affect those variable returns.
Control is reassessed whenever facts and circumstances indicate
that there may be a change in any of these elements of control.
De-facto control exists in situations where the Company has the
practical ability to direct the relevant activities of the investee
without holding the majority of the voting rights. In determining
whether de-facto control exists the company considers all relevant
facts and circumstances, including:
-- The size of the Company's voting rights relative to both the
size and dispersion of other parties who hold voting rights.
-- Substantive potential voting rights held by the company and by other parties.
-- Other contractual arrangements.
-- Historic patterns in voting attendance.
The consolidated financial statements present the results of the
Company and its subsidiaries ('the Group') as if they formed a
single entity. Intercompany transactions and balances between group
companies are therefore eliminated in full.
The consolidated financial statements incorporate the results of
business combinations using the acquisition method. In the
statement of financial position, the acquiree's identifiable
assets, liabilities and contingent liabilities are initially
recognised at their fair values at the acquisition date. The
results of acquired operations are included in the consolidated
income statement from the date on which control is obtained. They
are deconsolidated from the date on which control ceases.
Going Concern
The Directors consider that the business is a going concern and
that it is appropriate to prepare the financial statements on a
going concern basis. In reaching this conclusion, the Directors
have assessed the Group's current performance and position and
factors that may affect the Group's future prospects.
The Group's financial position is strong with healthy positive
cash balances. It also has in place a GBP3.0m overdraft facility.
During the pandemic the Group, in the prior year, took a CLBILS
loan of GBP12.0m, this requires the Group to comply with certain
financial covenants, these have been met during the year and since
year end. The Directors have reviewed forecasts and projections and
consider that the Group has adequate banking facilities and cash
resources to meet its operational and capital commitments.
Assets under construction
Whilst held under assets under construction, no depreciation is
charged on the assets. Once the project is completed, the asset
will be transferred to the correct fixed asset category.
Impairment of non-financial assets
The carrying values of non-financial assets are reviewed in
conjunction with an independent third party for impairment when
there is an indication that assets might be impaired. When the
carrying value of an asset exceeds its recoverable amount, the
asset is written down accordingly.
Where it is not possible to estimate the recoverable amount of
an individual asset, the impairment test is carried out on the
asset's cash generating unit (i.e. the smallest group of assets in
which the asset belongs for which there are separable identifiable
cash flows).
Impairment charges are included in the consolidated income
statement in cost of sales, except to the extent they reverse
previous gains recognised in the consolidated statement of total
comprehensive income.
Inventories
Inventories are initially recognised at cost on a first in first
out basis, and subsequently at the lower of cost and net realisable
value. Cost comprises all costs of purchase, costs of conversion
and other costs incurred in bringing the inventories to their
present location and condition.
Financial assets
The Group classified its financial assets into the categories,
discussed below, due to the purpose for which the asset was
acquired. The Group has not classified any of its financial assets
as held to maturity.
The Group documents at the inception of the transaction the
relationship between hedging instruments and hedged items, as well
as its risk management objectives and strategy for undertaking
various hedging transactions. The Group also documents its
assessment, both at hedge inception and on an ongoing basis, of
whether the derivatives that are used in hedging transactions are
highly effective in offsetting changes in fair values or cash flows
of hedged items.
Cash and cash equivalents include cash in hand and deposits held
at call with banks.
Loans and receivables
Loans and receivable assets are non-derivative financial assets
with fixed or determinable payments that are not quoted in an
active market. They arise principally through the provision of
goods to customers (e.g. trade receivables), but also incorporate
other types of contractual monetary asset. They are initially
recognised at fair value plus transaction costs that are directly
attributable to their acquisition or issue, and are subsequently
carried at amortised cost using the effective interest rate method,
less provision for impairment.
The Group's loans and receivables comprise trade and other
receivables and cash and cash equivalents included within the
consolidated statement of financial position.
Impairment provisions are recognised when there is objective
evidence (such as significant financial difficulties on the part of
the counterparty or default or significant delay in payment) that
the Group will be unable to collect all of the amounts due under
the terms receivable, the amount of such a provision being the
difference between the net carrying amount and the present value of
the future expected cash flows associated with the impaired
receivable. For trade receivables, which are reported net, such
provisions are recorded in a separate allowance account with the
loss being recognised within administrative expenses in the
consolidated income statement. On confirmation that the trade
receivable will not be collectable, the gross carrying value of the
asset is written off against the associated provision.
Financial liabilities
The Group classified its financial liabilities as other
financial liabilities which include the following:
-- Trade payables and other short-term monetary liabilities,
which are initially recognised at fair value and subsequently
carried at amortised cost using the effective interest method.
-- Bank loan - external loan which is valued at its amortised cost and incurs interest.
-- Finance costs are charged to the income statement over the
term of the debt using the effective interest method so that the
amount charged is at a constant rate on the carrying amount. Issue
costs are initially recognised as a reduction in the proceeds of
the associated capital instrument.
Derivative financial instruments and hedging activities
Hedge accounting is applied to financial assets and financial
liabilities only where all of the following criteria are met:
At the inception of the hedge there is formal designation and
documentation of the hedging relationship and the Group's risk
management objective and strategy for undertaking the hedge.
-- For cash flow hedges, the hedged item in a forecast
transaction is highly probable and presents an exposure to
variations in cash flows that could ultimately affect profit or
loss.
-- The cumulative change in the fair value of the hedging
instrument is expected to be between 80-125% of the cumulative
change in the fair value or cash flows of the hedged item
attributable to the risk hedged (i.e. it is expected to be highly
effective).
-- The effectiveness of the hedge can be reliably measured.
-- The hedge remains highly effective on each date tested. Effectiveness is tested quarterly.
The Group uses derivative financial instruments such as forward
foreign exchange contracts to hedge its risks associated with
foreign currency fluctuations. Such derivative financial
instruments are initially measured at fair value and subsequently
re-measured at fair value. The fair value of forward foreign
exchange contracts is calculated by reference to current forward
exchange rates for contracts with similar maturity profiles.
The effective portion of changes in the fair value of
derivatives that are designated and qualify as cash flow hedges is
recognised in other comprehensive income. The gain or loss relating
to the ineffective portion is recognised immediately in cost of
sales in the income statement.
Amounts accumulated in equity are reclassified to inventories in
the period when the purchase occurs, matching the hedged
transaction. The cash flows are expected to occur and impact on
profit and loss within 12 months from the year end.
When a hedging instrument expires or is sold, or when a hedge no
longer meets the criteria for hedge accounting, any cumulative gain
or loss previously recognised in equity is retained in equity and
is recognised when the forecast transaction is ultimately
recognised in cost of sales in the income statement. When a
forecast transaction is no longer expected to occur, the cumulative
gain or loss that was reported in equity is immediately transferred
to the income statement.
Deferred taxation
Deferred tax assets and liabilities are recognised where the
carrying amount of an asset or liability in the statement of
financial position differs from its tax base.
Recognition of deferred tax assets is restricted to those
instances where it is probable that taxable profit will be
available against which the difference can be utilised.
The amount of the asset or liability is determined using tax
rates that have been enacted or substantively enacted by the
balance sheet date and are expected to apply when the deferred tax
liabilities or assets are settled or recovered. Deferred tax
balances are not discounted.
Deferred tax assets are offset when the Group has legally
enforceable rights to set off current tax assets against current
tax liabilities and the deferred tax liabilities relate to taxes
levied by the same tax authority on either:
-- the same taxable group company; or
-- different company entities which intend to either settle
current tax assets and liabilities on a net basis, or to realise
the assets and settle the liabilities simultaneously, in each
future period in which significant amounts of deferred tax assets
and liabilities are expected to be settled or recovered.
Provisions
Provision for dilapidations is made at the best estimate of the
expenditure required to settle the obligation at the reporting
date, where material, discounted at the pre-tax rate reflecting
current market assessments of the time value of money and risks
specific to the liability. A dilapidation provision is only
recognised on those properties which are likely to be exited. Where
such property is identified the full costs expected are recognised.
This provision relates to the liability of 'wear and tear' incurred
on the leasehold properties and does not include any removal of
shop refits as experience indicates that liabilities do not arise
for removal of shop refits. Dilapidations are not included in IFRS
16 as they relate to 'wear and tear' and not structural alterations
to the buildings.
Foreign exchange
Transactions entered into the Group entities in a currency other
than the functional currency are recorded at the average monthly
rate prevailing during the year. Foreign currency monetary assets
and liabilities are translated at the rates ruling at the reporting
date.
Foreign exchange differences are recognised in the income
statement.
Retirement benefits - defined contribution and benefit
schemes
The Group operates both defined benefit and defined contribution
funded pension schemes. The schemes are administered by trustees
and are independent of the Group.
Contributions to defined contribution schemes are charged to the
consolidated income statement in the year to which they relate.
Defined benefit scheme surpluses and deficits are measured
at:
-- the fair value of plan assets at the reporting date; less
-- plan liabilities calculated using the projected unit credit
method discounted to its present value using yields available on
high quality corporate bonds that have maturity dates approximating
to the terms of the liabilities; plus
-- unrecognised past service costs; less
-- the effect of minimum funding requirements agreed with scheme trustees.
Re-measurements of the net defined obligation are recognised
directly within equity. These include actuarial gains and losses,
return on plan assets (interest exclusive) and any asset ceilings
(interest exclusive).
Service costs are recognised in the income statement, and
include current and past service costs as well as gains and losses
on curtailments.
Net interest expense (income) is recognised in the income
statement, and is calculated by applying the discount rate used to
measure the defined benefit obligation (asset) at the beginning of
the annual period to the balance of the net defined benefit
obligation (asset), considering the effects of contributions and
benefit payments during the year.
Gains or losses arising from changes to scheme benefits or
scheme curtailments are recognised immediately in the income
statement.
Settlements of defined benefit schemes are recognised in the
period in which the settlement occurs.
Dividends
Dividends are recognised when they become legally payable. In
the case of interim dividends to equity shareholders, this is when
declared by the directors. In the case of final and special
dividends, this is when approved by the shareholders at the
AGM.
2. Segmental information
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker has been identified as the
management team including the Chairman, Chief Executive and Finance
Director.
The Board considers that each store is an operating segment but
there is only one reporting segment as the stores qualify for
aggregation, as defined under IFRS 8.The Directors now consider
Digital to be its own operating segment. Management reviews the
performance of the Group by reference to total results against
budget. The total profit measures are operating profit and profit
for the year, both disclosed on the face of the consolidated income
statement. No differences exist between the basis of preparation of
the performance measures used by management and the figures in the
Group financial statements.
52 weeks 52 weeks
ended 2 ended
October 3 October
2021 2020
GBP'000 GBP'000
Revenue
United Kingdom stores 87,420 100,098
Digital 30,499 19,296
Republic of Ireland stores 674 2,678
Other 549 496
---------- ------------
119,142 122,568
========== ============
There are no customers with turnover in excess of 10% of total
turnover.
52 weeks 52 weeks
ended 2 ended
October 3 October
2021 2020
GBP'000 GBP'000
Non-current assets by location:
United Kingdom 45,111 59,349
Republic of Ireland - 5
45,111 59,354
========== ============
Digital fixed and current assets have not been disclosed due to
the immaterial value. The contribution is GBP8.5m (2020:
GBP4.6m)
The Group has only one operating and reporting segment which
reflects the Group's management and reporting structure as viewed
by the board of directors.
The deferred tax asset of GBP3,220,000 (2020: GBP5,617,000) is
unallocated.
3. Dividends
52 weeks 52 weeks
ended ended
2 October 3 October
2021 2020
GBP'000 GBP'000
Dividends paid during the year at Nil (2020: Nil Nil
Nil) per share
============ ============
No final dividend is proposed for shareholders on the register
(2020: nil) per share. .
4. Contingent liabilities
Shoe Zone plc and its subsidiary undertakings have given a duty
deferment guarantee in favour of HM Revenue and Customs amounting
to GBP800,000 (3 October 2020: GBP800,000).
5. Share capital
2 3
October October
2021 2020
GBP'000 GBP'000
Share capital issued and fully paid
50,000,000 ordinary shares of 1p each 500 500
500 500
========== ==========
Ordinary shares carry the right to one vote per share at general
meetings of the company and the rights to share in any distribution
of profits or returns of capital and to share in any residual
assets available for distribution in the event of a winding up.
6. Earnings per share
Earnings per share is calculated by dividing profit for the year
by the weighted average number of shares outstanding during the
year.
52 weeks 52 weeks
ended ended
2 3
October October
2021 2020
GBP'000 GBP'000
Numerator
Profit / (loss) for the year and
(Loss)/earnings used in basic and
diluted EPS 14.03p (23.81)p
=========== ===========
As the Group recorded a loss last year the EPS is nil.
2 October 3 October
2021 2020
Denominator
Weighted average number of shares used in
basic and diluted EPS 50,000,000 50,000,000
============ ============
7. Ultimate controlling party
The company is controlled by the Smith family albeit there is
not a single controlling party.
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END
FR DGGDBCXBDGDG
(END) Dow Jones Newswires
January 11, 2022 02:00 ET (07:00 GMT)
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