UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
20-F/A
Amendment
No. 1
(Mark
One)
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REGISTRATION
STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
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[X]
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ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For
the fiscal year ended January 31, 2019
OR
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For
the transition period from _____________ to _____________
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SHELL
COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Date
of event requiring this shell company report ____________
Commission
File Number 001-38544
NAKED
BRAND GROUP LIMITED
(Exact
name of registrant as specified in its charter)
N/A
(Translation
of Registrant’s name into English)
Australia
(Jurisdiction
of incorporation or organization)
c/o
Bendon Limited
Building
7C, Huntley Street
Alexandria
NSW
2015, Australia
+61
2 9384 2400
(Address
of principal executive offices)
Justin
Davis-Rice, Executive Chairman
c/o
Bendon Limited
Building
7B, Huntley Street
Alexandria
NSW
2015, Australia
+61
2 9384 2400
(Name,
telephone, e-mail and/or facsimile number and address of Company contact person)
Securities
registered pursuant to Section 12(b) of the Act:
Title
of each class
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Name
of each exchange on which registered
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Ordinary
Shares
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The
Nasdaq Capital Market
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Securities
registered pursuant to Section 12(g) of the Act:
None
(Title
of class)
Securities
for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
(Title
of class)
Indicate
the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period
covered by the annual report: At June 12, 2019, 59,487,636 ordinary shares were issued and outstanding.
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes
[ ] No [X]
If
this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934.
Yes
[ ] No [X]
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes
[X] No [ ]
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes
[X] No [ ]
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging
growth company. See definition of “large accelerated filer,” “accelerated filer”, “smaller reporting
company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
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Large
accelerated filer [ ]
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Accelerated
filer [ ]
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Non-accelerated
filer [X]
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Emerging
growth company [X]
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If
an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the
registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act. [ ]
†
The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards
Board to its Accounting Standards Codification after April 5, 2012.
Indicate
by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
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U.S.
GAAP [ ]
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International
Financial Reporting Standards as issued
by the International Accounting Standards Board
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[X]
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Other
[ ]
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If
“Other” has been checked in response to the previous question, indicate by check mark which financial statement item
the registrant has elected to follow.
Item
17 [ ] Item 18 [ ]
If
this report is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act).
Yes
[ ] No [X]
NAKED
BRAND GROUP LIMITED
TABLE
OF CONTENTS
EXPLANATORY
NOTE
On
October 10, 2019, following the approval of our audit committee, we engaged BDO Audit Pty Ltd (“BDO”) as the
principal accountant to audit the Company’s financial statements, which engagement was approved by our shareholders at our
annual general meeting held on December 16, 2019. BDO has re-audited our financial statements for the fiscal years ended January
31, 2019 and 2018 and for the seven months ended January 31, 2017.
This
Form 20-F/A is being filed by us as Amendment No. 1 to our annual report on Form 20-F for the fiscal year ended January 31, 2019,
as filed with the Securities and Exchange Commission on June 14, 2019 (the “Original Form 20-F”), solely for
the purpose of:
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amending
and restating Items 17 and 18 to include our consolidated financial statements as re-audited by BDO. The only changes to our
consolidated financial statements were to update Note 2(a) thereto (“Going Concern”) and Note 36 (“Events
occurring after the reporting date”) to reflect events that occurred after June 20, 2019, the date the consolidated
financial statements were initially issued; and
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amending
and restating Item 5 to reflect the changes to Note 2(a) and Note 36 to our consolidated financial statements.
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Other
than as stated above, this Form 20-F/A does not amend, update or restate the information in any other item of the Form 20-F as
originally filed on June 14, 2019 or reflect any events that have occurred after the original filing of the Form 20-F on June
14, 2019. Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended, this Form 20-F/A also contains new certifications
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
On
December 20, 2019, we completed a reverse stock split of our ordinary shares, pursuant to which every 100 ordinary shares outstanding
as of the effective time of the reverse stock split were combined into one ordinary share. All share and per share information
in this MD&A is presented on a pre-reverse split basis.
INTRODUCTION
Unless
otherwise indicated, all references in this Form 20-F/A to “we,” “our,” “us,”
the “Company,” “Naked” or similar terms refer to Naked Brand Group Limited and its consolidated
subsidiaries. We publish our consolidated financial statements in New Zealand dollars. In this Form 20-F/A, unless otherwise specified,
all monetary amounts are in New Zealand dollars, and all references to “$,” “NZD$,” and “dollars”
mean New Zealand dollars, unless otherwise indicated.
This
Form 20-F/A contains our audited consolidated financial statements and related notes for the years ended January 31, 2019 and
2018, the seven month period ended January 31, 2017 and the year ended June 30, 2016 (“Audited Consolidated Financial
Statements”). Our Audited Annual Consolidated Financial Statements have been prepared in accordance with International
Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”).
On
June 19, 2018, we consummated the transactions contemplated by that certain Agreement and Plan of Reorganization, dated as of
May 25, 2017 and amended on July 26, 2017, February 21, 2018, March 19, 2018 and April 23, 2018 (the “Merger Agreement”),
by and among our company, Naked Brand Group Inc., a Nevada corporation (“Naked (NV)”), Bendon Limited, a New
Zealand limited company (“Bendon Limited”), Naked Merger Sub Inc., a Nevada corporation and a wholly owned
subsidiary of ours (“Merger Sub”) and Bendon Investments Ltd., a New Zealand company and at the time the owner
of a majority of the outstanding shares of Bendon Limited (the “Principal Shareholder”).
Pursuant
to the Merger Agreement, (i) we undertook a reorganization (the “Reorganization”) pursuant to which all of
the shareholders of Bendon Limited exchanged all of the outstanding ordinary shares of Bendon Limited (the “Bendon Ordinary
Shares”) for our ordinary shares (“Naked Ordinary Shares”), and (ii) immediately thereafter, the
parties effectuated a merger of Merger Sub and Naked (NV), with Naked (NV) surviving as a wholly owned subsidiary of ours and
the Naked (NV) stockholders receiving Naked Ordinary Shares in exchange for all of the outstanding shares of common stock of Naked
(NV) (the “Merger” and together with the Reorganization, the “Transactions”).
As
a result of the Transactions, Bendon Limited and Naked (NV) became our wholly owned subsidiaries and the shareholders of Bendon
Limited and the stockholders of Naked (NV) became shareholders of ours.
TRADEMARKS
AND SERVICE MARKS
This
Form 20-F/A contains references to a number of trademarks which are our registered trademarks or trademarks for which we have
pending applications or common law rights. Our major trademarks include, among others, the “Naked” trademark, the
Heidi Klum trademarks, Frederick’s of Hollywood trademarks and other related trademarks.
Solely
for convenience, the trademarks, service marks and trade names referred to in this Form 20-F/A are listed without the ®,
(sm) and I symbols, but we will assert, to the fullest extent under applicable law, our rights or the rights of the applicable
licensors to these trademarks, service marks and trade names.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
Form 20-F/A contains forward-looking statements. Forward-looking statements include all statements that are not historical facts.
Forward-looking statements can be identified by words such as “anticipate,” “believe,” “envision,”
“estimate,” “expect,” “intend,” “may,” “plan,” “predict,”
“project,” “target,” “potential,” “will,” “would,” “could,”
“should,” “continue,” “contemplate” and other similar expressions, although not all forward-looking
statements contain these identifying words. They appear in a number of places throughout this Form 20-F/A and include statements
regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial
condition, liquidity, prospects, growth, strategies and the industry in which we operate. Forward-looking statements contained
in this Form 20-F/A include, among other things, statements relating to:
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expectations
regarding industry trends and the size and growth rates of addressable markets;
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our
business plan and our growth strategies, including plans for expansion to new markets and new products; and
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expectations
for seasonal trends.
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These
statements are not assurances of future performance. Instead, they are based on our current beliefs, expectations and assumptions
regarding the future of our business, future plans and strategies, and other future conditions. Although we base the forward-looking
statements contained in this Form 20-F/A on assumptions that we believe are reasonable, we caution you that actual results and
developments (including our results of operations, financial condition and liquidity, and the development of the industry in which
we operate) may differ materially from those made in or suggested by the forward-looking statements contained in this Form 20-F/A.
In addition, even if results and developments are consistent with the forward-looking statements contained in this Form 20-F/A,
those results and developments may not be indicative of results or developments in subsequent periods. Certain assumptions made
in preparing the forward-looking statements contained in this Form 20-F/A include:
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our
ability to implement our growth strategies;
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our
ability to maintain good business relationships with our suppliers, wholesalers and distributors;
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our
ability to keep pace with changing consumer preferences;
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our
ability to protect our intellectual property; and
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the
absence of material adverse changes in our industry or the global economy.
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By
their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances
that may or may not occur in the future. We believe that these risks and uncertainties include, but are not limited to, those
described in Item 3.D of the Original Form 20-F, “Risk Factors,” which include, but are not limited to, the following
risks:
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we
may be unable to raise any necessary capital;
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we
may be unable to maintain the strength of our brand or to expand our brand to new products and geographies;
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we
may be unable to protect or preserve our brand image and proprietary rights;
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we
may not be able to satisfy changing consumer preferences;
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an
economic downturn may affect discretionary consumer spending;
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we
may not be able to compete in our markets effectively;
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we
may not be able to manage our growth effectively;
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poor
performance during our peak season may affect our operating results for the full year;
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our
indebtedness may adversely affect our financial condition;
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our
ability to maintain relationships with our select number of suppliers;
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our
ability to manage our product distribution through our retail partners and international distributors;
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the
success of our marketing programs;
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the
risk our business is interrupted because of a disruption at our headquarters; and
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fluctuations
in raw materials costs or currency exchange rates.
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Actual
results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements
we make. As a result, any, or all of our forward-looking statements in this Annual Report may turn out to be inaccurate. We have
included important factors in the cautionary statements included in this Annual Report, particularly in Item 3.D of this the Original
Form 20-F, “Risk Factors,” that we believe could cause actual results or events to differ materially from the forward-looking
statements that we make. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements,
and you should not rely on our forward-looking statements. Moreover, we operate in a highly competitive and rapidly changing environment
in which new risks often emerge. It is not possible for our management to predict all risks, nor can we assess the impact of all
factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially
from those contained in any forward-looking statements we may make.
You
should read this Form 20-F/A, together with the Original Form 20-F, and the documents that we reference herein and therein and
have filed as exhibits hereto and thereto, completely and with the understanding that our actual future results may be materially
different from what we expect. The forward-looking statements contained herein are made as of the date of this Form 20-F/A, and
we do not assume any obligation to update any forward-looking statements except as required by applicable law.
NON-IFRS
FINANCIAL MEASURES
This
document includes “non-IFRS financial measures,” that is, financial measures that either exclude or include amounts
that are not excluded or included in the most directly comparable measure calculated and presented in accordance with IFRS. Specifically,
we make use of the non-IFRS measures “EBITDA.”
EBITDA
is defined as earnings before interest, taxes, depreciation, depletion, amortization and impairment. Our management uses EBITDA
as a measure of our operating results and considers it to be a meaningful supplement to net income as a performance measurement,
primarily because we incur significant depreciation and depletion and the exclusion of impairment losses in EBITDA eliminates
the non-cash impact.
EBITDA
is used by investors and analysts for the purpose of valuing an issuer. The intent of EBITDA is to provide additional useful information
to investors and the measure does not have any standardized meaning under IFRS. Accordingly, this measure should not be considered
in isolation or used in substitute for measures of performance prepared in accordance with IFRS. Other companies may calculate
EBITDA differently. For a reconciliation of net income from continuing operations to EBITDA, please see Item 5 of this Annual
Report, “Operating and Financial Review and Prospects – Results of Operations.”
PART
I
ITEM
5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The
following discussion and analysis (this “MD&A”) for Bendon Limited provides information concerning our
financial condition and results of operations for the year ended January 31, 2019, 2018 and 2017 and should be read in conjunction
with our audited consolidation financial statements and the related notes included in Part III, Item 17, “Financial Statements.”
Our selected financial information are reported for the fiscal years ended January 31, 2019 and 2018, for the seven month period
ended January 31, 2017, and for the fiscal year ended June 30, 2016. In order to provide additional meaningful
information to investors, we have included unaudited consolidated information for the 12 month period ended January 31, 2017,
and for the seven month period ended January 31, 2016. This unaudited information is presented for comparative purposes to the
corresponding fiscal year ended January 31, 2018 and for the seven month period ended January 31, 2017, and is derived from accounting
records.
The
following discussion contains forward-looking statements that reflect our future plans, estimates, belief, and expected performance.
The forward-looking statements are dependent upon events, risks and uncertainties that may be outside our control. Our actual
results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute
to these differences include those discussed elsewhere in this Form 20-F, particularly in Part I, Item 3.D, “Risk Factors”
and in “Cautionary Note Regarding Forward-Looking Statements.” In light of these risks, uncertainties and assumptions,
the forward-looking events discussed may not occur.
Basis
of Presentation
The
Audited Annual Consolidated Financial Statements of the Company have been prepared in accordance with IFRS as issued by the IASB,
and are presented in thousands of New Zealand dollars, except where otherwise indicated. However, certain financial measures contained
in this MD&A are non-IFRS measures and are discussed further under “Non-IFRS Measures” below. All references to
“$” and “dollars” refer to New Zealand dollars, unless otherwise indicated. Certain totals, subtotals
and percentages throughout this MD&A may not reconcile due to rounding.
Introduction
We
are a designer, distributor, wholesaler and retailer of women’s and men’s intimates apparel and swimwear. Our merchandise
is sold through retail and outlet stores located in New Zealand and Australia, wholesale operations in New Zealand, Australia,
the United States of America and Europe, and through online channels. We operate licensed brands including Heidi Klum and Frederick’s
of Hollywood, and owned brands including Pleasure State, Davenport, Lovable, Bendon, Fayreform, VaVoom, Evollove, and Hickory.
We also operated the Stella McCartney brand until June 30, 2018, at which time Bendon Limited’s license to use the brand
terminated. Key customers include Farmers, Myer, David Jones and Woolworths.
All
dollar values discussed below are presented in New Zealand dollars.
In
keeping with customary practice in New Zealand, our fiscal years end on June 30. Subsequent to registration, Bendon Limited changed
its fiscal year end to January 31 and align with Naked’s fiscal year end.
Overview
Year
ended January 31, 2019 and year ended January 31, 2018
During
the 12- month period ended January 31, 2019 and 12-month period ended January 31, 2018 we incurred a net comprehensive loss of
($49.2m) and ($37.4m) respectively.
Net
sales in the 12-month period ended January 31, 2019 decreased by $19.5m, or 14.8%, to $111.9m when compared with $131.4m in the
12-month period ended January 31, 2018. The sales in the 12-month period ending January 31, 2019 were negatively impacted by a
stock supply issue because of liquidity issues. In addition, we also ended our wholesale relationship with key major accounts
in the U.S. market. Our strategic decision to exit the E.U./U.K. market as well as the loss of the Stella McCartney license also
contributed to the reduction in sales for the Company.
Brand
management expenses decreased by $4.4m, or 8.2% from $53.7m to $49.3m in the 12-month period ended January 31, 2019 as compared
with the 12-month period ended January 31, 2018. This was largely due to cost savings in our store overheads and reduced marketing
spend.
Corporate
expenses increased by $1.3m, or 10.1%, from $12.8m to $14.1m in the 12-month period ended January 31, 2019 as compared with the
12-month period ended January 31, 2018, primarily driven by increased salary allocation and rental costs.
Finance
expenses decreased by $4.8m, or 54.5% from $8.8m to $4.0m in the 12-month period ended January 31, 2019 as compared with the 12-month
period ended January 31, 2018, due to a reduction in interest on both external borrowings and shareholder loans.
Brand
transition, restructure and transaction expenses increased by $6.8m, or 212.5%, from $3.2m to $10.0m in the 12-month period ended
January 31, 2019 as compared with the 12-month period ended January 31, 2018, which was driven by costs incurred in respect of
the U.S. listing process.
Impairment
expense increased by $6.3m, or 331.6%, from $1.9m to $8.2m in the 12-month period ended January 31, 2019 as compared with the
12-month period ended January 31, 2018, which was driven by stock supply issue because of liquidity issues.
Other
foreign currency gains increased by $1.2m or 159.2% from $0.7m to $1.9m in the 12-month period ended January 31, 2019 as compared
with the 12-month period ended January 31, 2018, due to positive movements in exchange rates on foreign exchange contracts.
Year
ended January 31, 2018 and 12-month period ended January 31, 2017 (unaudited)
During
the 12- month period ended January 31, 2018 and 12-month period ended January 31, 2017, we incurred a net comprehensive loss of
($37.4m) and ($39.9m) respectively.
Net
sales in the 12-month period ended January 31, 2018 decreased by $20.75m, or 13.6%, to $131.4m when compared with $152.1m in the
12-month period ended January 31, 2017. The sales in the 12-month period ending January 31, 2018 were negatively impacted by a
stock supply issue because of liquidity issues.
During
the 12-month period ended January 31, 2018 and the 12-month period ended January 31, 2017, the gross margin was 33.4% and 44.6%
respectively. The reduction in gross margin was caused by increased discounts provided to customers and sub-optimal stock mix
because of the stock supply issue.
Finance
expenses decreased by $2.4m, or 21.6% from $11.2m to $8.8m in the 12-month period ended January 31, 2018 as compared with the
12-month period ended January 31, 2017, due to a reduction in interest on the shareholder loan due to the principal amount of
such loans being reduced, the majority of which was converted to equity in September 2016.
Brand
transition, restructure and transaction expenses increased by $0.8m, or 34.7%, from $2.4m to $3.2m in the 12-month period ended
January 31, 2018 as compared with the 12-month period ended January 31, 2017, which was driven by costs incurred in respect of
the U.S. listing process.
Other
foreign currency gains/(losses) reduced from a loss of $14.3m in 12-month period ended January 31, 2017 to a gain of $0.7m in
the 12-month period ended Jan 31, 2018, due to positive movements in exchange rates on foreign exchange contracts.
7-month
period ended January 31, 2017, 7-month period ended January 31, 2016 (unaudited), the 12 month period ended June 30, 2016 and
the 12 month period ended June 30, 2015
During
the 7-months ended January 31, 2017 and 12-month period ended June 30, 2016 and 12-month period ended June 30, 2015, we incurred
a net comprehensive loss of ($16.0m), ($20.7m) and ($13.2m) respectively.
Net
sales in the 12 month period ended June 30, 2016 increased by $12.2m, or 8.8%, to $151.0m when compared with $138.8m in the 12
month period ended June 30, 2015. This was driven by extension of the business into providing advisory and management services
to other intimates apparel businesses, favorable foreign exchange rate fluctuations between the New Zealand dollar and United
States Dollar, growth in U.S. wholesale distribution through a new contract with Macy’s, growth in the online business and
introduction of 8 new stores across Australia.
Net
sales in the 7-month period ended January 31, 2017 increased by $1.6m, or 1.7%, to $96.2m when compared with $94.7m in the 7-month
period ended January 31, 2016. Sales were negatively impacted by a stock supply issue, and less favorable foreign exchange rate
fluctuations between the New Zealand dollar and U.S. Dollar, which was offset by the beneficial impact of a new licensing agreement
with Frederick’s of Hollywood.
During
the 7-month period ended January 31, 2017, the 7-month period ended January 31, 2016, the 12 month period ended June 30, 2016
and the 12 month period ended June 30, 2015, the gross margin was 40.7%, 45.1%, 44.7%, and 43.1%, respectively. The movement in
gross margin has remained fairly consistent, but has improved due to changes in the sales mix including additional online revenue,
as well as positive foreign exchange rate fluctuations.
Brand
management expenses increased by $6.2m, or 14.6%, from $42.2m to $48.4m between the 12 month period ended June 30, 2015 and the
12 month period ended June 30, 2016. This was largely driven by growth in business and associated employee costs, as well as additional
marketing expenditures to support the introduction of new swimwear ranges. The increase of $4.4m, or 15.9%, from $27.6m to $32.0m
in the 7-month period to January 31, 2017 as compared with the 7-month period to January 31, 2016, was also driven by additional
marketing expenditures.
Finance
expenses increased by $4.5m, or 77.3%, between the 12 month period ended June 30, 2015 and the 12 month period ended June 30,
2016 from $5.9m to $10.4m, due to additional interest expense associated with an increase in debt. The finance expense in the
7-month period to January 31, 2016 and January 31, 2017 increased slightly due to additional interest on convertible loan notes
being partially offset by a reduction in interest on the shareholder loan due to the principal amount of such loans being reduced,
the majority of which was converted to equity in September 2016.
Brand
transition, restructure and transaction expenses of $1.3m, $2.2m and $12.2m were incurred in the 7-month period ended January
31, 2017, the 12 month period ended June 30, 2016 and the 12 month period ended June 30, 2015, respectively. The biggest driver
for this decrease was a reduction in brand transition expenses incurred in relation to the transition from the Elle MacPherson
to Heidi Klum brand which decreased over time given the Elle MacPherson license was terminated in the fiscal year 2015.
An
impairment expense of $2.2m was recognized in the 12 month period ended June 30, 2016 and 7-month period to January 31, 2016 in
relation to a goodwill write-off. An impairment expense of $0.3m was recognised in 7-month period to January 31, 2017.
Other
foreign currency gains/(losses) reduced from a gain of $4.7m the 12 month period ended June 30, 2015 to a loss of $2.4m in the
12 month period ended June 30, 2016 due to weakening of the New Zealand dollar and the impact of unfavorable hedge contracts entered
into. Other foreign currency gains/(losses) reduced from a gain of $5.7m in the 7-month period to January 31, 2016 to a loss of
$3.3m in the 7-month period to January 31, 2017 as a result of the same foreign exchange drivers.
Application
of Critical Accounting Policies, Estimates, and Judgements
Our
accounting policies form the basis for preparation of our financial statements and our financial statements in tum are an essential
factor in understanding our operations. Our accounting policies are in accordance with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB) and are fully described in the notes to our audited financial
statements as of and for the year ended January 31, 2019, year ended January 31, 2018, 7-month period ended January 31, 2017 and
the two years ended June 30, 2016 and June 30, 2015. The preparation of our financial statements required management to make judgments,
estimates, assumptions and judgments that affect the reported amounts of revenue, assets, liabilities and expenses. Our management
re-evaluates estimates on an on-going basis and such estimates are based on historical experience and on various other assumptions
that management believes to be reasonable under the circumstances. Actual results may differ from these estimates under different
assumptions or conditions. Unless otherwise stated, all dollar amounts stated in our financial statements are expressed in the
currency of the Commonwealth of Australia.
Critical
accounting policies
Critical
accounting policies that reflect our industry and activity specific accounting treatments used in preparing our financial statements
as of the 12 month period ended January 31, 2019, 12 month period ended January 31, 2018, the 7- month period ended January 31,
2017, the 12 month period ended June 30, 2016 and the 12 month period ended June 30, 2015 or that have significant potential to
result in a material adjustment to the carrying amounts of assets and liabilities during each of the years.
(a)
Going concern
The
financial statements have been prepared on the basis of going concern which contemplates continuity of normal business activities
and the realisation of assets and settlement of liabilities in the ordinary course of business.
For
the financial year ended 31 January 2019 the Group experienced a loss after income tax from continuing operations of NZ$49.227million
(2018: NZ$37.445million) and operating cash outflows of NZ$9.434 million (2018: NZ$4.116million). It also is in a net current
liability position of $NZ29.426 million (2018: NZ$20.752million) and a positive net asset position of NZ$10.519 million (2018:
net liability position of NZ$5.710million).
The
losses in the year ended 31 January 2019 were a result of reduced revenue from wholesale customers, increased rebates and discounts,
and the plateauing of sales in retail outlets believed to be due to the stores and stockists not having new high margin inventory.
The business is experiencing challenging trading conditions which have been impacted by the cancellation of the Stella McCartney
licence held by the Group which expired on 30 June 2018, the lack of working capital to purchase sufficient levels of inventory
required for trading, reduced customer foot traffic in retail stores and outlets, and a reduction of revenue from wholesale customers.
The business also incurred NZ$10.075 million of non-trading costs in relation to brand transition, restructure, and transaction
costs associated with listing the Group on the Nasdaq stock exchange. The Group also has trade creditors that are trading beyond
their original credit terms.
The
Group has also breached its Bank debt loan covenants during financial year, and is the process of extending their facilities which
are currently due on 31 January 2020 to provide the Group and the Bank time to consider a refinance of the facility to a longer
term to assist the group continue as a going concern.
In
consequent to the challenging trading conditions and the negative working capital the business raised NZ$24 million of funds in
the form of issued capital and convertible notes over the course of the financial year and generated further working capital by
reducing inventory by NZ$9.993million. The Group used the funds to reduce the bank debt from NZ$38.489 million to NZ$20 million,
reduce long overdue trade creditors, fund operating losses, reduce costs, rebuild higher margin inventory, recruit new staff,
and pay the costs of listing on the Nasdaq stock exchange.
It
is expected the group will need to continue to fund losses through to the start of the year ending 31 January 2022. This capital
raising/recapitalisation is continuing, and management had raised US$32.4 million between March 2019 and the date of this report.
At the date of this report management is intending on raising up to a further US$15 million. The Group must complete the fundraising
to finalise the recapitalization plan and continue as a going concern
As
part of the discussions to renegotiate the Bank facilities the Bank appointed Korda Mentha to review the cash flow and working
capital history and forecasts. Korda Mentha produced a report which is consistent with the information in this note and the Bank
has advised they will continue to monitor the Group’s performance during the Bank debt renegotiation process. The Directors
expect the Bank to offer a new two year facility. The offer of a new Bank facility is dependent on the Group achieving inventory
covenants set by the Bank, and the Bank being satisfied with the raising of the remaining capital planned of US$15 million.
Despite
the ongoing losses, reduced cash flow and cash facilities, and the other negative financial conditions, the Directors are confident
that the Group will continue as a going concern. However, while the Directors are confident of continuing as a going concern and
meeting its debt obligation to its Bank and creditor commitments as they fall due, the going concern is dependent upon the Directors
and Group being successful in:
●
|
Raising
further funding before 28 February 2020 in order to meet all debts due in the 12 months after signing of these financial statements;
|
|
|
●
|
Generating
sufficient sales and increasing gross margins and reducing overheads in line with forecasts;
|
|
|
●
|
Having
sufficient funds to maintain a positive cashflow position, and to reduce bank debt in line with agreed bank amortisation;
|
|
|
●
|
Continuing
to receive support from creditors to delay payment of overdue amounts until the Group has adequate cash flow to commence a
repayment arrangement or repay the debts in full; and
|
|
|
●
|
Renegotiating
the current bank facilities of NZ$20 million to a facility that is at least a 12 month facility.
|
As
a result, the viability of the Group is dependent on the above matters. The dependence on these matters indicate a material uncertainty
exists, that may cast significant doubt as to whether the Group will continue as going concern and therefore whether they will
realise their assets and extinguish their liabilities in the normal course of business and at the amounts stated in the financial
report.
However,
the Directors’ believe that the Group will be successful in the above matters and, accordingly, have prepared the report
on a going concern basis
(b)
Revenue recognition
Revenue
is recognised when the amount of the revenue can be measured reliably, it is probable that economic benefits associated with the
transaction will flow to the Company and specific criteria relating to the type of revenue as noted below, has been satisfied.
Revenue
is measured at the fair value of the consideration received or receivable and is presented net of returns, discounts and rebates.
The Company assess the expected customer returns and rebates according to the specific information in its possession and its past
experience in similar cases.
Sale
of goods
Sales
of goods through retail stores, e commerce and wholesale channels are recognised when control of the products have been transferred
to the customer which is a point in time. For wholesale and e commerce sales, risks and rewards are transferred when goods are
delivered to customers, and therefore reflects an estimate of shipments that have not been received at year end based on shipping
terms and historical delivery times. The Company also provides a reserve for projected merchandise returns based on prior experience.
The
Company sells gift cards to customers. The Company recognises revenue from gift cards when they are redeemed by the customers.
In addition, the Company recognises revenue on all of its unredeemed gift cards when the gift cards have expired.
Significant
Accounting Judgments, Estimates, and Assumptions
Significant
accounting judgments, estimates, and assumptions that have been used in the preparation of our financial statements are set out
below. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations
of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.
We
make estimates and assumptions concerning the future in determining accounting treatments and quantifying amounts for transactions
and balances in certain circumstances. The resulting accounting estimates will, by definition, seldom equal the related actual
results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are discussed below.
Key
estimates — inventory
Each
item on inventory is reviewed on an annual basis to determine whether it is being carried at higher than its net realizable value.
During the period, management have written down inventory based on best estimate of the net realizable value, although until the
time that inventory is sold this is an estimate.
Key
estimates — impairment of goodwill
In
accordance with IAS 36 Impairment of Assets, the Company is required to estimate the recoverable amount of goodwill at each reporting
period.
Impairment
testing is an area involving management judgement, requiring assessment as to whether the carrying value of assets can be supported
by the net present value of future cash flows derived from such assets using cash flow projections which have been discounted
at an appropriate rate and using a terminal value to incorporate expectations of growth thereafter.
In
calculating the net present value of the future cash flows, certain assumptions are required to be made in respect of highly uncertain
matters including management’s expectations of:
|
—
|
growth
in EBITDA future cash flows;
|
|
|
|
|
—
|
timing
and quantum of future capital expenditure;
|
|
|
|
|
—
|
long-term
growth rates; and
|
|
|
|
|
—
|
the
selection of discount rates to reflect the risks involved.
|
Changing
the assumptions selected by management, in particular the discount rate and growth rate assumptions used in the cash flow projections,
could significantly affect the Company’s impairment evaluation and hence results.
The
Company’s review includes the key assumptions related to sensitivity in the cash flow projections. Further details are provided
in note15(c) to the consolidated financial statements.
Key
estimates — fair value of financial instruments
The
Company has certain financial assets and liabilities which are measured at fair value. Where fair value has not been able to be
determined based on quoted price, a valuation model has been used. The inputs to these models are observable, where possible,
however these techniques involve significant estimates and therefore fair value of the instruments could be affected by changes
in these assumptions and inputs.
Key
estimates — impairment of brands
In
accordance with IFRS 36 Impairment of Assets, the Company is required to estimate the recoverable amount of indefinite-lived brand
assets at each reporting period.
Impairment
testing is an area involving management judgement, requiring assessment as to whether the carrying value of assets can be supported
by their value in use or fair value less cost to sell.
In
calculating the fair value less costs to sell, certain assumptions are required to be made in respect of highly uncertain matters
including management’s expectations of:
|
—
|
growth
in brand revenues
|
|
|
|
|
—
|
market
royalty rate
|
|
|
|
|
—
|
the
selection of discount rates to reflect the risks involved, and
|
|
|
|
|
—
|
long-term
growth rates
|
Changing
the assumptions selected by management, in particular the growth rate, discount rate and market royalty rate assumption used,
could significantly affect the Company’s impairment evaluation and hence results.
The
Company’s review includes the key assumptions related to sensitivity in the model. Further details are provided in note
15 to the consolidated financial statements.
Key
estimates — taxes
Determining
income tax provisions and the recognition of deferred tax assets including carried forward income tax involves judgment on the
tax treatment of certain transactions. Deferred tax is recognised on tax losses not yet used and on temporary differences where
it is probable that there will be taxable revenue against which these can be offset. Management has made judgments as to the probability
of future taxable income being generated against which tax losses will be available for offset based on budgets, current and future
expected economic conditions.
Recent
Accounting Pronouncements
New
Accounting Standards and Interpretations
Certain
new accounting standards and interpretations have been published that are not mandatory for January 31, 2019 reporting periods
and have not been early adopted by the Company. The Company’s assessment of the impact of these new standards and interpretations
is set out below.
Title
of Standard
|
|
Nature
of change
|
|
Impact
|
|
Mandatory
application date/Date of adoption by Company
|
IFRS
16 Leases
|
|
In
February 2016 the IASB issued a new standard for leases. This AASB 16 replaces IAS 17. The main impact on lessees is that
almost all leases go on balance sheet. This is because the balance sheet distinction between operating and finance leases
is removed for lessees. Instead, under the new standard an asset (the right to use the leased item) and a financial liability
to pay rentals are recognised. The only exemptions are short-term and low-value leases.
|
|
Management
is currently assessing the impact of the new rules and believes the adoption of the provisions of this update will have
a material impact on the Company’s consolidated financial statements.
The
new standard will require that we record a liability and a related asset on the balance sheet for our leased facilities.
|
|
Management
is currently assessing the impact of the new rules and believes the adoption of the provisions of this update will have
a material impact on the Company’s consolidated financial statements.
Mandatory
for financial years commencing on or after January 1, 2019.
Expected
date of adoption by the Company: February 1, 2019.
|
|
|
|
|
|
|
|
IFRC
23 Uncertainty over Income Tax Treatments (IFRIC 23)
|
|
On
June 7, 2017, the IASB issued IFRIC 23, Uncertainty over Income Tax Treatments (“IFRIC 23”). IFRIC 23 clarifies
the application of recognition and measurement requirements in IAS 12, Income Taxes, when there is uncertainty over income
tax treatments. The IFRIC 23 interpretation specifically addresses whether an entity considers uncertain tax treatments separately;
the assumptions an entity makes about the examination of tax treatments by taxation authorities; how an entity determines
taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates; and how an entity considers changes
in facts and circumstances.
|
|
The
Company is currently evaluating the impact of adopting this standard on the consolidated financial statements.
|
|
IFRIC
23 is effective for annual periods beginning on or after January 1, 2019, with earlier application permitted.
|
There
are no other standards that are not yet effective and that would be expected to have a material impact on the entity in the current
or future reporting periods and on foreseeable future transactions.
Recent
Developments
On
February 14, 2019, Carole Hochman resigned from the board of directors and as Executive Chairman.
In
March 2019, the following share transactions occurred :
|
(1)
|
1.4m
ordinary shares and 1.4m warrants were issued in exchange for services to the value of NZ $0.1m / US$ 87k. The warrants have
an exercise price of US$0.50 and expire 2 years from the date of issue.
|
|
|
|
|
(2)
|
The
issue of 11,248,415 ordinary shares to trade creditors in satisfaction of NZ$6.6m / US$4.5m trade payables, at a share price
of US$0.40.
|
|
|
|
|
(3)
|
The
issue of 2,119,178 ordinary shares in settlement of a promissory notes in the amount of NZ$1.25m / US$847,671, at a share
price of US$0.40 per share.
|
|
|
|
|
(4)
|
The
issue of 4,510,588 ordinary shares to investors in a private placement at a share price of US$0.255 for a total cash consideration
of NZ$1.69m / US$1.15m. The investors also received warrants to purchase 4.510,588 ordinary shares, at an exercise price of
US$0.306 and expiry 2 years from the date of issue.
|
|
|
|
|
(5)
|
The
issue of 10,784,313 ordinary shares to certain investors at a share price of US$0.255 for a total cash consideration of NZ$4.05m
/ US$2.75m, as well as “pre-funded” warrants to purchase ordinary shares in lieu of such shares if an investor
would own more than 9.9% of the total outstanding ordinary shares. Each investor also received “investment” warrants
to purchase 100% of the number of ordinary shares, and as a result 3,914,846 ordinary shares, pre-funded warrants to purchase
6,869,467 ordinary shares and investment warrants to purchase 10,784,313 ordinary shares were issued to investors. The investment
warrants have an exercise price of US$0.306 per share and expire 5 years from the date of issue. The pre-funded warrants have
an exercise price of US$0.01 per share and expire 5 years from the date of issue. If the exercise price of the warrants was
higher than the last closing bid price of the ordinary shares, the warrants could be exercised on a cashless basis using a
Black-Scholes valuation (but not less than US$0.10). In July and August 2019, the holders of the pre-funded warrants exercised
such warrants in full, resulting in the issue of 6,869,467 shares, and the holders of the investment warrants exercised them
as to 9,078,877 on a cashless basis, resulting in the issuance of 19,586,048 ordinary shares at that time.
|
On
April 2, 2019, the board of directors appointed Anna Johnson as Chief Executive Officer. Previously Ms. Johnson was Chief Executive
Officer of Bendon Limited, the main operating entity within the Company. At the same time, Justin Davis-Rice was appointed as
Executive Chairman and resigned as our Chief Executive Officer.
In
May 2019, the following share of funding transactions occurred:
|
(1)
|
NZ$4.3m
/ US$3m cash was raised via a secured convertible promissory note to St. George Investments, with a US$3.32m note principal
value. The note accrues daily interest at 10% p.a, and matures on November 13, 2020. The Company has the right to prepay the
note, subject to a 15% premium. The note is secured by a second priority security interest over all the Company’s assets
and is subordinated to the Company’s existing senior secured credit facility with the Bank of New Zealand. The noteholder
has the right to convert the note into Naked ordinary shares at a conversion price of US$0.90 per share, and also has the
right, from December 13, 2019, to request redemption of any portion of the note, up to a maximum of US$0.4m per month.
|
|
|
|
|
(2)
|
NZ$2.17m
/ US$1.5m cash was raised via the issue of 6m Naked ordinary shares to an investor in a private placement at a share price
of US$0.25. The investor also received warrants to purchase 1m Naked ordinary shares. The warrants have an exercise price
of US$0.25, and expire 2 years from the date of issue.
|
|
|
|
|
(3)
|
653,595
ordinary shares were issued in exchange for the cancellation of NZ$0.3m / US$0.2m in debt held by a shareholder, at a price
of US$0.306 per share.
|
In
July 2019, the following share transactions occurred:
|
(1)
|
The
issue of 25,068,250 ordinary shares to certain suppliers at a price of US$0.10 per share, in cancellation of NZ$3.7m / US$2,506,825
trade payables.
|
|
|
|
|
(2)
|
The
issue of 15.75m ordinary shares to certain investors at a price of US$0.10 per share, and warrants to purchase up to 15.75m
ordinary shares, at an exercise price of US$0.10 per share, for a total cash consideration of NZ$2.35m / US$ 1.575m. Warrants
to purchase 1.26m ordinary shares were also issued to various designees of the placement agent at an exercise price of US
$0.125 per share. The placement agent warrants are immediately exercisable and expire 5.5 years from date of the cash offering.
|
|
|
|
|
(3)
|
The
exercise prices of certain outstanding warrants to purchase 2.8m ordinary shares held by one of the investors were reduced
to US$0.10 per share, with the exercise prices previously ranging from US$1.55 to US$3.75.
|
On
July 31, 2019, Kelvin Fitzalan was appointed as a member of the board of directors.
In
August 2019, the following equity transactions occurred:
|
(1)
|
28,571,431
ordinary shares, at a price of $0.07 per share in a cash offering and 28,571,431 warrants to purchase ordinary shares were
issued to certain investors, for a total cash consideration of NZ $3.1m / US$2.0m. The warrants are immediately exercisable,
expiring 5.5 years from the date of issue, at an exercise price per share of US$0.07, and may be exercised on a ‘cashless’
basis based on as Black Scholes valuation from 6 months after the issue. The Company also issued warrants to certain designees
of the placement agent to purchase 2,285,714 ordinary shares at an exercise price of US$0.0875 per share. The placement agent
warrants are immediately exercisable and expire 5.5 years from date of the cash offering.
|
|
|
|
|
(2)
|
The
Company agreed to reduce the exercise price of outstanding warrants held by certain investors, consisting of warrants to purchase
up to 18,550,000 ordinary shares at an exercise price of US$0.10 per share that expire in October 2021, June 2023 and July
2025. The Company agreed to amend each of the outstanding warrants to reduce the exercise price to US$0.07.
|
|
|
|
|
(3)
|
The
Company issued 57,142,857 ordinary shares to suppliers at a price of US$0.07 per share in exchange for the cancellation of
NZ$6.2m / US$4.0m trade payables and the establishment of prepayment credits.
|
In
October 2019, the following funding transaction occurred:
|
(1)
|
The
Company completed a private placement of a convertible promissory note and a warrant to purchase ordinary shares, for a purchase
price of NZ$3.2m / US$2.0m, with a principal balance before discount and expenses of US$2.12m. The holder had the right to
exchange the warrant for a 5% increase in the balance of the note. On October 9, 2019, the holder exercised this right, and
as result the warrant was cancelled and the balance of the note was increased by US$106,100. The note balance was further
increased to US$2.51m on November 21, 2019 due to additional funding requirement deadline not being met. The note accrues
daily interest at 20% per annum, and matures on October 4, 2021. The Company has the right to prepay the Note, subject to
a 25% premium. The note is subordinated to the Company’s existing senior secured credit facility with the Bank of New
Zealand, From April 7, 2020 the holder has the right to convert the outstanding balance of the note into the Company’s
ordinary shares at a conversion price of US$0.05 per share.
|
In
November 2019, the following funding transaction occurred:
|
(1)
|
The Company issued a NZ$4.8m
/ US$3.0m convertible note in a private placement, maturing November 12, 2021. The face
value of the note is NZ$5.0m / US$3.17m after discount and costs, with a cash consideration
of US$3.0m. The holder had the right to exchange the warrant for a 5% increase in
the balance of the note. On November 15, 2019, the holder exercised this right, and as
result the warrant was cancelled and the balance of the note was increased by US$158,600.
The note balance was further increased by $340,900 on December 27, 2019 due to additional
funding requirement deadline not being met. The interest rate is 20% per annum. The
Company has the right to prepay the note at a 25% premium. The note is subordinated to
the Company’s existing BNZ facility. The note outstanding balance is convertible
into ordinary shares from May 13, 2020, at a conversion price of US$0.04 per share. From
May 13, 2020, the holder can request the company redeem any portion of the note, up to
a maximum of US$0.6m per month. At same time warrants to purchase the number of ordinary
shares issued under the notes (estimated to be approximately 63,400,000 shares), at a
US$0.05 exercise price, were issued to the note holder, exercisable at any time, with
a November 30, 2021 expiry date.
|
|
|
|
|
(2)
|
The holder of the convertible
notes issued by us in May 2019 exchanged a portion of the notes at negotiated
prices, for a US$0.028 average price, reducing the principal value of the convertible
note by US$340k.
|
In
December 2019, the following funding transactions occurred :
|
(1)
|
The holder of the convertible
notes issued by us in May 2019 exchanged an additional portion of the notes
at negotiated prices, for a US$0.021 average price, reducing the principal value of the
convertible note by an additional US$2.265m.
|
|
|
|
|
(2)
|
The Company issued a NZ$4.8m
/ US$3.0m convertible note in a private placement, maturing December 19 2021. The face
value of the note is NZ$5.0m / US$3.17m after discount and costs, with a cash consideration
of US$3.0m. The holder had the right to exchange the warrant for a 5% increase in
the balance of the note. On January 2, 2020, the holder exercised this right, and as
result the warrant was cancelled and the balance of the note was increased by US$159,600.
The interest rate is 20% per annum. The Company has the right to prepay the note
at a 25% premium. The note is subordinated to the Company’s existing BNZ facility.
The note outstanding balance is convertible into ordinary shares from May 13, 2020, at
a conversion price of US$0.04 per share. From June 19, 2020, the holder can request the
company redeem any portion of the note, up to a maximum of US$0.6m per month. At same
time warrants to purchase the number of ordinary shares issued under the December notes
(estimated to be approximately 79,300,000 shares), at a US$0.05 exercise price, were
issued to the note holder, exercisable at any time, with a December 31, 2021 expiry date.
|
In
January 2020, the holder of the convertible notes issued by us in May 2019 exchanged an additional portion of the notes at a negotiated
prices, for a US$0.012 average price, reducing the principal value of the convertible note by an additional US$0.2m.
On
February 5, 2019, we received a notice from the Listing Qualifications Department of Nasdaq stating that, for the last 30 consecutive
business days, the closing bid price for our Ordinary Shares had been below the minimum of US$1.00 per share required for continued
inclusion on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2). We will be afforded until February 3, 2020 to regain
compliance with the minimum bid price requirement. In order to regain compliance, the bid price for shares of our ordinary shares
must close at US$1.00 per share or more for a minimum of ten consecutive business days.
At
the annual general meeting of the Company’s shareholders held on December 16, 2019, it was resolved to complete a reverse
stock split of our ordinary shares, pursuant to which every 100 ordinary shares outstanding as of the effective time of the reverse
stock split were combined into one ordinary share. Pursuant to a resolution of our Board of Directors, the reverse stock split
became effective on December 20, 2019. All share and per share information in this MD&A is presented on a pre-reverse split
basis.
The
senior secured credit facility with the Bank of New Zealand has been extended from August 31, 2019 to January 31, 2020, with discussions
underway to extend for a further period beyond 12 months. The bank covenants were breached throughout the 6 months ended July
31, 2019, and were reset, with a minimum inventory to bank debt ratio required to be maintained from May 1, 2019. This new ratio
has been breached every month to the date of signing of the accounts, creating an event of review, but the bank has taken no further
action in relation to these breaches.
A
restructure or operations was commenced in October 2019 with initiatives to close the US wholesale business as well as the Australian
office and to reduce the number of employees by 67 globally by the end of the year, subject to consultation with employees.
Year
ended January 31, 2019 compared to year ended January 31, 2018
The
following table sets forth certain selected operating results and other financial information for each of the years ended January
31, 2019, 2018 and 2017:
|
|
Jan. 31,
2019
NZ$000
12 months
|
|
|
Jan. 31,
2018
NZ$000
12 months
|
|
|
%
movement
FY19 v
FY18
|
|
|
Unaudited
Jan. 31,
2017
NZ$000
12 months
|
|
|
%
movement
FY18 v
FY17
|
|
Revenue
|
|
|
111,920
|
|
|
|
131,388
|
|
|
|
-14.8
|
%
|
|
|
152,144
|
|
|
|
-13.6
|
%
|
Cost of goods sold
|
|
|
(74,480
|
)
|
|
|
(87,459
|
)
|
|
|
-14.8
|
%
|
|
|
(84,358
|
)
|
|
|
3.7
|
%
|
Gross profit
|
|
|
37,440
|
|
|
|
43,929
|
|
|
|
-14.8
|
%
|
|
|
67,786
|
|
|
|
-35.2
|
%
|
Brand management
|
|
|
(49,256
|
)
|
|
|
(53,653
|
)
|
|
|
-8.2
|
%
|
|
|
(53,957
|
)
|
|
|
-0.6
|
%
|
Administrative expenses
|
|
|
(3,432
|
)
|
|
|
(4,131
|
)
|
|
|
-16.9
|
%
|
|
|
(3,712
|
)
|
|
|
11.3
|
%
|
Corporate expenses
|
|
|
(14,145
|
)
|
|
|
(12,851
|
)
|
|
|
10.1
|
%
|
|
|
(12,920
|
)
|
|
|
-0.5
|
%
|
Finance expense
|
|
|
(4,041
|
)
|
|
|
(8,791
|
)
|
|
|
-54.0
|
%
|
|
|
(11,214
|
)
|
|
|
-21.6
|
%
|
Brand transition, restructure and transaction expenses
|
|
|
(10,075
|
)
|
|
|
(3,272
|
)
|
|
|
207.9
|
%
|
|
|
(2,430
|
)
|
|
|
34.7
|
%
|
Impairment expense
|
|
|
(8,173
|
)
|
|
|
(1,914
|
)
|
|
|
326.9
|
%
|
|
|
(2,865
|
)
|
|
|
-33.2
|
%
|
Other foreign currency gains/(losses)
|
|
|
1,963
|
|
|
|
757
|
|
|
|
159.3
|
%
|
|
|
(14,327
|
)
|
|
|
-105.3
|
%
|
Fair value gain/(loss) on convertible notes derivative
|
|
|
(775
|
)
|
|
|
2,393
|
|
|
|
-132.4
|
%
|
|
|
(592
|
)
|
|
|
-504.5
|
%
|
Loss before income tax
|
|
|
(50,494
|
)
|
|
|
(37,533
|
)
|
|
|
34.5
|
%
|
|
|
(34,230
|
)
|
|
|
9.7
|
%
|
Income tax benefit/(expense)
|
|
|
1,274
|
|
|
|
(60
|
)
|
|
|
-2223.3
|
%
|
|
|
(6,123
|
)
|
|
|
-99.0
|
%
|
Loss for the period
|
|
|
(49,220
|
)
|
|
|
(37,593
|
)
|
|
|
30.9
|
%
|
|
|
(40,352
|
)
|
|
|
-6.8
|
%
|
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences on translation of foreign operations
|
|
|
(7
|
)
|
|
|
148
|
|
|
|
-104.7
|
%
|
|
|
384
|
|
|
|
-61.5
|
%
|
Total comprehensive loss for the period
|
|
|
(49,227
|
)
|
|
|
(37,445
|
)
|
|
|
31.5
|
%
|
|
|
(39,968
|
)
|
|
|
-6.3
|
%
|
Year
ended January 31, 2018 compared to 12-month period ended January 31, 2017 (unaudited)
The
following table sets forth certain selected operating results and other financial information for each of the years ended January
31, 2018 and 2017:
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
Jan. 31,
|
|
|
Jan. 31,
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
NZ$000
|
|
|
NZ$000
|
|
|
%
|
|
|
|
12 months
|
|
|
12 months
|
|
|
movement
|
|
Revenue
|
|
|
131,388
|
|
|
|
152,144
|
|
|
|
-13.6
|
%
|
Cost of goods sold
|
|
|
(87,459
|
)
|
|
|
(84,358
|
)
|
|
|
3.7
|
%
|
Gross profit
|
|
|
43,929
|
|
|
|
67,786
|
|
|
|
-35.2
|
%
|
Brand management
|
|
|
(53,653
|
)
|
|
|
(53,957
|
)
|
|
|
-0.6
|
%
|
Administrative expenses
|
|
|
(4,131
|
)
|
|
|
(3,712
|
)
|
|
|
11.3
|
%
|
Corporate expenses
|
|
|
(12,851
|
)
|
|
|
(12,920
|
)
|
|
|
-0.5
|
%
|
Finance expense
|
|
|
(8,791
|
)
|
|
|
(11,214
|
)
|
|
|
-21.6
|
%
|
Brand transition, restructure and transaction expenses
|
|
|
(3,272
|
)
|
|
|
(2,430
|
)
|
|
|
34.7
|
%
|
Impairment expense
|
|
|
(1,914
|
)
|
|
|
(2,865
|
)
|
|
|
-33.2
|
%
|
Other foreign currency gains/(losses)
|
|
|
757
|
|
|
|
(14,327
|
)
|
|
|
-105.3
|
%
|
Fair value gain/(loss) on convertible notes derivative
|
|
|
2,393
|
|
|
|
(592
|
)
|
|
|
-504.5
|
%
|
Loss before income tax
|
|
|
(37,533
|
)
|
|
|
(34,230
|
)
|
|
|
9.7
|
%
|
Income tax benefit/(expense)
|
|
|
(60
|
)
|
|
|
(6,123
|
)
|
|
|
-99.0
|
%
|
Loss for the period
|
|
|
(37,593
|
)
|
|
|
(40,352
|
)
|
|
|
-6.8
|
%
|
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences on translation of foreign operations
|
|
|
148
|
|
|
|
384
|
|
|
|
-61.5
|
%
|
Total comprehensive loss for the period
|
|
|
(37,445
|
)
|
|
|
(39,968
|
)
|
|
|
-6.3
|
%
|
*
Note that January 31, 2017 is not an annual period, rather it has been derived from accounting records, to provide a 12 month
comparative to the January 31, 2018 annual period.
7-month
period ended January 31, 2017 compared to 7-month period ended January 31, 2016 and 12-month period ended June 30, 2016 compared
to 12-month period ended June 30, 2015
The
following table sets forth certain selected operating results and other financial information for each of the 7-month periods
ended January 31, 2017 and 2016, and each of the years ended June 30, 2016 and 2015:
|
|
Jan. 31,
2017
NZ$000
seven months
|
|
|
Unaudited
Jan. 31,
2016
NZ$000
seven months
|
|
|
%
movement
|
|
|
Jun. 30,
2016
NZ$000
12 months
|
|
|
Jun. 30,
2015
NZ000$
12 months
|
|
|
%
movement
|
|
Revenue
|
|
|
96,284
|
|
|
|
94,667
|
|
|
|
1.7
|
%
|
|
|
151,000
|
|
|
|
138,838
|
|
|
|
8.8
|
%
|
Cost of goods Sold
|
|
|
(57,144
|
)
|
|
|
(51,998
|
)
|
|
|
9.9
|
%
|
|
|
(83,525
|
)
|
|
|
(79,031
|
)
|
|
|
5.7
|
%
|
Gross Profit
|
|
|
39,140
|
|
|
|
42,669
|
|
|
|
-8.3
|
%
|
|
|
67,475
|
|
|
|
59,807
|
|
|
|
12.8
|
%
|
Brand Management
|
|
|
(32,040
|
)
|
|
|
(27,647
|
)
|
|
|
15.9
|
%
|
|
|
(48,362
|
)
|
|
|
(42,203
|
)
|
|
|
14.6
|
%
|
Administrative expenses
|
|
|
(2,383
|
)
|
|
|
(2,109
|
)
|
|
|
13.0
|
%
|
|
|
(4,090
|
)
|
|
|
(4,691
|
)
|
|
|
-12.8
|
%
|
Corporate expenses
|
|
|
(8,082
|
)
|
|
|
(8,236
|
)
|
|
|
-1.9
|
%
|
|
|
(13,002
|
)
|
|
|
(13,940
|
)
|
|
|
-6.7
|
%
|
Finance expense
|
|
|
(6,238
|
)
|
|
|
(5,436
|
)
|
|
|
14.8
|
%
|
|
|
(10,409
|
)
|
|
|
(5,870
|
)
|
|
|
77.3
|
%
|
Brand transition, restructure and transaction expense
|
|
|
(1,321
|
)
|
|
|
(1,122
|
)
|
|
|
17.7
|
%
|
|
|
(2,232
|
)
|
|
|
(12,182
|
)
|
|
|
-81.7
|
%
|
Impairment expense
|
|
|
(292
|
)
|
|
|
(2,157
|
)
|
|
|
-86.5
|
%
|
|
|
(2,157
|
)
|
|
|
-
|
|
|
|
100.0
|
%
|
Other foreign currency gains/(losses)
|
|
|
(3,306
|
)
|
|
|
5,685
|
|
|
|
-158.2
|
%
|
|
|
(2,423
|
)
|
|
|
4,700
|
|
|
|
-151.6
|
%
|
Fair value gain/(loss) on convertible notes derivative
|
|
|
(592
|
)
|
|
|
-
|
|
|
|
100.0
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
0
|
%
|
Profit/(Loss) before income tax
|
|
|
(15,114
|
)
|
|
|
1,647
|
|
|
|
-1017.7
|
%
|
|
|
(15,200
|
)
|
|
|
(14,379
|
)
|
|
|
5.7
|
%
|
Income tax benefit/(expense)
|
|
|
(865
|
)
|
|
|
(289
|
)
|
|
|
199.3
|
%
|
|
|
(5,546
|
)
|
|
|
1,274
|
|
|
|
-535.3
|
%
|
Profit/(Loss) for the period
|
|
|
(15,979
|
)
|
|
|
1,358
|
|
|
|
-1276.7
|
%
|
|
|
(20,746
|
)
|
|
|
(13,105
|
)
|
|
|
58.3
|
%
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange differences on translation of foreign operations
|
|
|
(29
|
)
|
|
|
(379
|
)
|
|
|
-92.3
|
%
|
|
|
31
|
|
|
|
(93
|
)
|
|
|
-133.3
|
%
|
Total comprehensive income/(loss) for the period
|
|
|
(16,008
|
)
|
|
|
979
|
|
|
|
-1735.2
|
%
|
|
|
(20,715
|
)
|
|
|
(13,198
|
)
|
|
|
57.0
|
%
|
Revenue
Year
ended January 31, 2019 compared to 12-month period ended January 31, 2018
During
the 12-month period ended January 31, 2019 the net sales decreased by $19.5m or 14.8% when compared with $131.4m in the 12-month
period ended January 31, 2018. The sales in the 12-month period ended January 31, 2019 continued to be negatively impacted by
a stock supply issue because of liquidity issues. In addition, we also ended our wholesale relationship with key major accounts
in the US market. Our strategic decision to exit the EU/UK market as well as the loss of the Stella McCartney license also contributed
to the reduction in sales for the Company.
One
new store was opened in Australia, as well as three new stores in New Zealand to continue to expand our brand presence across
the Australasian market during the year ended January 31, 2019. During the current financial year, we also successfully acquired
both the Naked and Fredricks of Hollywood entities.
Year
ended January 31, 2018 compared to 12-month period ended January 31, 2017 (unaudited)
During
the 12-month period ended January 31, 2018 the net sales decreased by $20.75m or 13.6% when compared with $152.1m in the 12-month
period ended January 31, 2017. The sales in the 12-month period ended January 31, 2018 were negatively impacted by a stock supply
issue because of liquidity issues. Three new stores were opened in Australia, as well as two new stores in New Zealand to continue
to expand our brand presence across the Australasian market.
7-month
period ended January 31, 2017 compared to the 7-month period ended January 31, 2016 (unaudited) and 12-month period ended June
30, 2016 compared to the 12-month period ended June 30, 2015
Net
sales in the 7-month period ended January 31, 2017 increased by $1.6m, or 1.7%, to $96.2m when compared with $94.7m in the 7-month
period ended January 31, 2016. Sales were negatively impacted by a stock supply issue, and less favorable foreign exchange rate
fluctuations between the New Zealand dollar and U.S. Dollar, which was offset by the beneficial impact of a new licensing agreement
with Frederick’s of Hollywood.
Net
sales in the 12-month period ended June 30 2016 increased by $12.2m, or 8.8%, to $151.0m when compared with $138.8m in the 12-month
period ended June 30 2015. This was driven by the extension of the business into providing advisory and management services to
other intimate apparel businesses, favorable foreign exchange rate fluctuations between the New Zealand dollar and U.S. Dollar,
growth in U.S. wholesale distribution through a new contract with Macy’s, growth in the online business and introduction
of 8 new stores across Australia.
Gross
margins
Year
ended January 31, 2019 compared to 12-month period ended January 31, 2018
During
the 12-month period ended January 31, 2019 and the 12-month period ended January 31, 2018, the gross margin was 33.5% and 33.4%
respectively. The movement year on year is consistent, however the margin continues to be impacted by the sales mix, discounts
provided to customers and a lack of current season stock because of the supply issue.
Year
ended January 31, 2018 compared to 12-month period ended January 31, 2017 (unaudited)
During
the 12-month period ended January 31, 2018 and the 12-month period ended January 31, 2017, the gross margin was 33.4% and 44.6%
respectively. The reduction in gross margin was caused by increased discounts provided to customers and sub-optimal stock mix
because of the stock supply issue.
7-month
period ended January 31, 2017 compared to 7-month period ended January 31, 2016 and 12-month period ended June 30, 2016 compared
to 12-month period ended June 30, 2015
During
the 7-month period ended January 31, 2017, the 7-month period ended January 31, 2016, 12-month period ended June 30 2016 and 12-month
period ended June 2015, the gross margin was 40.7%, 45.1%, 44.7%, and 43.1%, respectively. The movement in gross margin has remained
fairly consistent, but has improved due to changes in the sales mix including additional online revenue, as well as positive foreign
exchange rate fluctuations.
Operating
expenses
Year
ended January 31, 2019 compared to 12-month period ended January 31, 2018
|
|
Jan. 31,
2019
NZ$000
12 months
|
|
|
Jan. 31,
2018
NZ$000
12 months
|
|
|
%
movement
FY19 v
FY18
|
|
|
Unaudited
Jan. 31,
2017
NZ$000
12 months
|
|
|
%
movement
FY18 v
FY17
|
|
Brand management
|
|
|
(49,256
|
)
|
|
|
(53,653
|
)
|
|
|
-8.2
|
%
|
|
|
(53,957
|
)
|
|
|
-0.6
|
%
|
Administrative expenses
|
|
|
(3,432
|
)
|
|
|
(4,131
|
)
|
|
|
-16.9
|
%
|
|
|
(3,712
|
)
|
|
|
11.3
|
%
|
Corporate expenses
|
|
|
(14,145
|
)
|
|
|
(12,851
|
)
|
|
|
10.1
|
%
|
|
|
(12,920
|
)
|
|
|
-0.5
|
%
|
Finance expense
|
|
|
(4,041
|
)
|
|
|
(8,791
|
)
|
|
|
-54.0
|
%
|
|
|
(11,214
|
)
|
|
|
-21.6
|
%
|
Brand transition, restructure and transaction expenses
|
|
|
(10,075
|
)
|
|
|
(3,272
|
)
|
|
|
207.9
|
%
|
|
|
(2,430
|
)
|
|
|
34.7
|
%
|
Impairment expense
|
|
|
(8,173
|
)
|
|
|
(1,914
|
)
|
|
|
326.9
|
%
|
|
|
(2,865
|
)
|
|
|
-33.2
|
%
|
Other foreign currency gains/(losses)
|
|
|
1,963
|
|
|
|
757
|
|
|
|
159.3
|
%
|
|
|
(14,327
|
)
|
|
|
-105.3
|
%
|
Fair value gain/(loss) on convertible notes derivative
|
|
|
(775
|
)
|
|
|
2,393
|
|
|
|
-132.4
|
%
|
|
|
(592
|
)
|
|
|
-504.5
|
%
|
Brand
management decreased by $4.4m, or 8.2% from $53.6m to $49.2m in the 12-month period ended January 31, 2019 as compared with the
12-month period ended January 31, 2018. This was largely due to cost savings in our store overheads and reduced marketing spend.
Administrative
expenses decreased by $0.7m, or 17% from $4.1m to $3.4m in the 12-month period ended January 31, 2019 as compared with the 12-month
period ended January 31, 2018. This was due to cost saving initiatives implemented by our new CEO who joined us during the financial
year ended January 31, 2019.
Corporate
expenses increased by $1.3m, or 10.1%, from $12.8m to $14.1m in the 12-month period ended January 31, 2019 as compared with the
12-month period ended January 31, 2018, which was primarily driven by an increase in salary and rental costs.
Finance
expenses decreased by $4.8m, or 54.5% from $8.8m to $4.0m in the 12-month period ended January 31, 2019 as compared with the 12-month
period ended January 31, 2018, due to a reduction in interest on both external borrowings and shareholder loans.
Brand
transition, restructure and transaction expenses increased by $6.4m, or 195.9%, from $3.2m to $9.6m in the 12-month period ended
January 31, 2019 as compared with the 12-month period ended January 31, 2018, which was driven by costs incurred in respect of
the US listing process.
Impairment
expense increased by $6.3m, or 331.6%, from $1.9m to $8.2m in the 12-month period ended January 31, 2019 as compared with the
12-month period ended January 31, 2018, which was driven by stock supply issue due to liquidity issues.
Other
foreign currency gains increased by $1.2m or 159.2% from $0.7m to $1.9m in the 12-month period ended January 31, 2019 as compared
with the 12-month period ended January 31, 2018 due to gains on foreign exchange contracts.
Year
ended January 31, 2018 compared to 12-month period ended January 31, 2017 (unaudited)
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
Jan. 31,
|
|
|
Jan. 31,
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
NZ$000
|
|
|
NZ$000
|
|
|
%
|
|
|
|
12 months
|
|
|
12 months
|
|
|
movement
|
|
Brand management
|
|
|
(53,653
|
)
|
|
|
(53,957
|
)
|
|
|
-0.6
|
%
|
Administrative expenses
|
|
|
(4,131
|
)
|
|
|
(3,712
|
)
|
|
|
11.3
|
%
|
Corporate expenses
|
|
|
(12,851
|
)
|
|
|
(12,920
|
)
|
|
|
-0.5
|
%
|
Finance expense
|
|
|
(8,791
|
)
|
|
|
(11,214
|
)
|
|
|
-21.6
|
%
|
Brand transition, restructure and transaction expenses
|
|
|
(3,272
|
)
|
|
|
(2,430
|
)
|
|
|
34.7
|
%
|
Impairment expense
|
|
|
(1,914
|
)
|
|
|
(2,865
|
)
|
|
|
-33.2
|
%
|
Other foreign currency gains/(losses)
|
|
|
757
|
|
|
|
(14,327
|
)
|
|
|
-105.3
|
%
|
Fair value gain/(loss) on convertible notes derivative
|
|
|
2,393
|
|
|
|
(592
|
)
|
|
|
-504.5
|
%
|
Brand
management expenses decreased by $0.3m, or 0.6%, from $53.9m to $53.6m in the 12-month period to January 31, 2018 as compared
with the 12-month period to January 31, 2017. This reduction was due to the increased focus on cost control in this area.
Administrative
expenses increased by $0.4m or 11.3% from $3.7m to $4.1m in the 12-month period to January 21, 2018 as compared with the 12-month
period to January 31, 2017. This increase was due to a higher spend on accounting and tax fees associated with the US listing
process.
Corporate
expenses are consistent with the prior 12-month period. The slight decrease of $69k, or 0.5% between the 12-month period ended
to January 31, 2018 and 12- month period to January 31, 2017, from $12.92m to $12.85m is considered immaterial.
Finance
expenses decreased by $2.4m, or 21.6% from $11.2m to $8.8m in the 12-month period ended January 31, 2018 as compared with the
12-month period ended January 31, 2017, due to a reduction in interest on the shareholder loan due to the principal amount of
such loans being reduced, the majority of which was converted to equity in September 2016.
Brand
transition, restructure and transaction expenses increased by $0.8m, or 34.7%, from $2.4m to $3.2m in the 12-month period ended
January 31, 2018 as compared with the 12-month period ended January 31, 2017, which was driven by costs incurred in respect of
the US listing process.
Impairment
expense decreased by $0.95m or 33.2% from $2.8m to $1.9m in the 12-month period ended January 31, 2018 as compared with the 12-month
period ended January 31, 2017. During the current financial year an impairment expense of $1.6m was incurred as management impaired
the costs incurred on the ERP upgrade, as this software will need to be replaced and updated with a more advanced system. In the
12-month period ended January 31, 2017 an impairment expense of $2.2m was recognized in relation to a goodwill write-off.
Other
foreign currency gains/(losses) reduced from a loss of $14.3m in 12-month period ended January 31, 2017 to a gain of $0.7m in
the 12-month period ended Jan 31, 2018, due to gains on foreign exchange contracts.
Fair
value gain/(loss) on convertible notes derivative was a gain of $2.4m in 12-month period ended January 31, 2018 compared to a
loss of $0.6m the period ended January 31, 2017. This is because the derivative ended at conversion date.
7-month
period ended January 31, 2017 compared to 7-month period ended January 31, 2016 and 12-month period ended June 30, 2016 compared
to 12-month period ended June 30, 2015
|
|
Jan. 31,
2017
NZ$000
seven months
|
|
|
Unaudited
Jan. 31,
2016
NZ$000
seven months
|
|
|
%
movement
|
|
|
Jun. 30,
2016
NZ$000
12 months
|
|
|
Jun. 30,
2015
NZ000$
12 months
|
|
|
%
movement
|
|
Brand management
|
|
|
(32,040
|
)
|
|
|
(27,647
|
)
|
|
|
15.9
|
%
|
|
|
(48,362
|
)
|
|
|
(42,203
|
)
|
|
|
14.6
|
%
|
Administrative expenses
|
|
|
(2,383
|
)
|
|
|
(2,109
|
)
|
|
|
13.0
|
%
|
|
|
(4,090
|
)
|
|
|
(4,691
|
)
|
|
|
-12.8
|
%
|
Corporate expenses
|
|
|
(8,082
|
)
|
|
|
(8,236
|
)
|
|
|
-1.9
|
%
|
|
|
(13,002
|
)
|
|
|
(13,940
|
)
|
|
|
-6.7
|
%
|
Finance expense
|
|
|
(6,238
|
)
|
|
|
(5,436
|
)
|
|
|
14.8
|
%
|
|
|
(10,409
|
)
|
|
|
(5,870
|
)
|
|
|
77.3
|
%
|
Brand transition, restructure, and transaction expenses
|
|
|
(1,321
|
)
|
|
|
(1,122
|
)
|
|
|
17.7
|
%
|
|
|
(2,232
|
)
|
|
|
(12,182
|
)
|
|
|
-81.7
|
%
|
Impairment expense
|
|
|
(292
|
)
|
|
|
(2,157
|
)
|
|
|
-86.5
|
%
|
|
|
(2,157
|
)
|
|
|
—
|
|
|
|
100.0
|
%
|
Other foreign currency gains/(losses)
|
|
|
(3,306
|
)
|
|
|
5,685
|
|
|
|
-158.2
|
%
|
|
|
(2,423
|
)
|
|
|
4,700
|
|
|
|
-151.6
|
%
|
Fair value gain/(loss) on convertible notes derivative
|
|
|
(592
|
)
|
|
|
-
|
|
|
|
100.0
|
%
|
|
|
-
|
|
|
|
-
|
|
|
|
0
|
%
|
Brand
management expenses increased by $6.2m, or 14.6%, from $42.2m to $48.4m between the 12-month period ended June 30 2015 and 12-month
period ended June 30 2016. This was largely driven by growth in business and associated employee costs, as well as additional
marketing expenditures to support the introduction of new swimwear ranges. The increase of $4.4m, or 15.9%, from $27.6m to $32.0m
in the 7-month period to January 31, 2017 as compared with the 7- month period to January 31, 2016, was also driven by additional
marketing expenditures.
Finance
expenses increased by $4.5m, or 77.3%, between the 12-month period ended June 30 2015 and 12-month period ended June 30 2016,
from $5.9m to $10.4m, due to additional interest expense associated with an increase in debt. The finance expense in the 7- month
period to January 31, 2016 and January 31, 2017 remained consistent due to additional interest on convertible loan notes being
partially offset by a reduction in interest on the shareholder loan due to the principal amount of such loans being reduced, the
majority of which was converted to equity in September 2016.
Brand
transition, restructure and transaction expenses decreased by $10.0m from $12.2m in fiscal year 2015 to $2.2m in fiscal year 2016.
This was largely driven by a reduction in brand transition expenses incurred in relation the transition from the Elle MacPherson
to Heidi Klum brand of $9.2m, given the licence arrangement terminated in fiscal year 2015 and therefore majority of the associated
costs were recognized in the same period.
Brand
transition, restructure and transaction expenses decreased by $0.9m from $2.2m in the 12-month period ended June 30 2016 to $1.3m
in the 7-month period ended January 31, 2017, largely due to a $0.9m decrease in Heidi Klum brand transition costs due to any
non-recurring costs associated with the transition having been incurred prior to the 7-months ended January 31, 2017.
An
impairment expense of $2.2m was recognized in the 12-month period ended June 30 2016 and 7-month period to January 31, 2016 in
relation to a goodwill write-off. An impairment expense of $0.3m was recognised in the 7- month period to January 31, 2017.
Other
foreign currency gains/(losses) reduced a gain of $4.7m in the 12-month period ended June 30 2015 to a loss of $2.4m in the 12-month
period ended June 30 2016, due to weakening of the New Zealand dollar and the impact of unfavorable hedge contracts.
Other
foreign currency gains/(losses) reduced a gain of $5.7m in the 7-month period to January 31, 2016 to a loss of $3.3m in the 7-month
period to January 31, 2017 as a result of the same foreign exchange drivers.
Taxation
Year
ended January 31, 2019 compared to 12-month period ended January 31, 2018
The
tax benefit of $1,274k in the 12 month period ended January 31, 2019 was an increase of $1,334k when compared to the tax expense
of $60k for the 12 month period ended January 31, 2018. This year on year movement is due to increased tax benefits resulting
from the increased losses and adjustments for current tax for prior periods.
Year
ended January 31, 2018 compared to 12-month period ended January 31, 2017 (unaudited)
The
tax expense of $60k in the 12month period ended January 31, 2018 decreased by $6.06m when compared to the 12-month period ended
January 31, 2017. The variance was due to the write off of the carrying value of prior year tax losses and deferred tax in the
due to the uncertainty over whether the deferred tax asset could be utilized.
7-month
period ended January 31, 2017 compared to the 7-month period ended January 31, 2016 (unaudited) and 12-month period ended June
30, 2016 and the 12-month period ended June 30, 2015
The
tax benefit of $1.3m in the 12-month period ended June 30 2015, increased by $6.8m, which resulted in a tax expense of $5.5m in
the 12-month period ended June 30 2016. A tax expense of $0.9m was recognised in the 7- month period to January 31, 2017. The
variances were caused by a write off of the carrying value of prior year tax losses and deferred tax temporary differences in
the 12-month period ended June 30 2016 due to uncertainty over future profitability to ensure utilization of the deferred tax
assets.
The
effective tax rate for the 7-month period ended January 31, 2017, the 12-month period ended June 30 2016 and the 12-month period
ended June 30 2015 was 5.7%, 36.5% and 8.9%, respectively. These effective tax rates can be explained by deferred tax credits
not brought to accounts due to uncertainty over their availability for utilization.
Net
loss and comprehensive loss
Year
ended January 31, 2019 compared to 12-month period ended January 31, 2018
The
net loss in the 12-month period ended January 31, 2019 increased by $11.2m, or 29.9%, to ($48.9m) when compared with ($37.4m)
in the 12-month period ended January 31, 2018. This was due to both the decrease in gross profit of $6.5m and the increase in
expenses of $6.4m in the 12-month period ended January 31, 2019 when compared with the 12-month period ended January 31, 2018.
Year
ended January 31, 2018 compared to 12-month period ended January 31, 2017 (unaudited)
The
net loss in the 12-month period ended January 31, 2018 decreased by $2.5m, or 6.3%, to ($37.4m) when compared with ($39.9m) in
the 12-month period ended January 31, 2017. The decrease in gross profit of $23.9m in the 12-month period ended January 31, 2018
when compared with the 12-month period ended January 31, 2017 was significantly offset by the reduction in expenses of $20.5m
when comparing the same 12 month periods. Tax expense also decreased by $6.06m when compared to the 12-month period ended January
31, 2017 to $60k in the 12month period ended January 31, 2018. The variance was due to the write off of the carrying value of
prior year tax losses and deferred tax in the due to the uncertainty over whether the deferred tax asset could be utilized.
7-month
period ended January 31, 2017 compared to the 7-month period ended January 31, 2016 (unaudited) and 12-month period ended June
30, 2016 and the 12-month period ended June 30, 2015
For
the seven months ended January 31, 2017 and fiscal years ended June 30, 2016 (fiscal year 2016) and June 30, 2015 (fiscal year
2015), we incurred a net comprehensive loss of ($16.0m), ($20.7m) and ($13.2m) respectively. Gross profit for the seven month
period ended January 31, 2017, the seven month period ended January 31, 2016, fiscal year 2016 and fiscal year 2015 was 40.7%,
45.1%, 44.7%, and 43.1%, respectively. The movement in gross margin has remained fairly consistent, but improved due to changes
in the sales mix including additional online revenue, as well as positive foreign exchange rate fluctuations. The tax benefit
of $1.3m in fiscal year 2015, increased by $6.8m, which resulted in a tax expense of $5.5m in fiscal year 2016. A tax expense
of $0.9m was recognised in the seven month period to January 31, 2017. The variances were caused by a write off of the carrying
value of prior year tax losses and deferred tax temporary differences in fiscal year 2016 due to uncertainty over future profitability
to ensure utilization of the deferred tax assets.
The
net loss in the 6-month period ended July 31, 2017 increased by $4.8m, or 34.8%, to ($18.5m) when compared with ($13.7m) in the
12-month period ended July 31, 2016. This net loss was due to a reduction in gross profit, which decreased $13.6m in the 6-month
period ended July 31, 2017 when compared with the 6-month period ended July 31, 2016, however this was partially offset by a reduction
in expenses of $2.2m and a reduction in income tax expense of $5.9m for the 6-month period ended July 31, 2017 when compared with
the 6-month period ended July 31, 2016.
Segmented
Reporting
Bendon
Limited has seven reportable segments: Australia retail, New Zealand retail, Australia wholesale, New Zealand wholesale, US wholesale,
Europe wholesale and E-commerce.
|
●
|
Australia
retail. This segment covers retail and outlet stores located in Australia.
|
|
|
|
|
●
|
New
Zealand retail. This segment covers retail and outlet stores located in New Zealand.
|
|
|
|
|
●
|
Australia
wholesale. This segment covers the wholesale of intimates apparel to customers based in Australia.
|
|
|
|
|
●
|
New
Zealand wholesale. This segment covers the wholesale of intimates apparel to customers based in New Zealand.
|
|
|
|
|
●
|
US
wholesale. This segment covers the wholesale of intimates apparel to customers based in the United States of America.
|
|
|
|
|
●
|
Europe
wholesale. This segment covers the wholesale of intimates apparel to customers based in Europe.
|
|
|
|
|
●
|
E-commerce.
This segment covers the Company’s online retail activities.
|
The
following table provides our segment net sales, gross margin and EBITDA for the 12-month period to January 31, 2019, 2018 and
2017.
Year
ending January 31, 2019
|
|
NZ Retail
|
|
|
AU Retail
|
|
|
NZ Wholesale
|
|
|
AU Wholesale
|
|
|
US Wholesale
|
|
|
EU Wholesale
|
|
|
e-commerce
|
|
|
Unallocated
|
|
|
|
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
Total
|
|
Revenue
|
|
|
31,801
|
|
|
|
18,547
|
|
|
|
7,154
|
|
|
|
11,491
|
|
|
|
5,798
|
|
|
|
4,996
|
|
|
|
32,133
|
|
|
|
-
|
|
|
|
111,920
|
|
Gross margin
|
|
|
16,377
|
|
|
|
9,355
|
|
|
|
782
|
|
|
|
2,993
|
|
|
|
576
|
|
|
|
506
|
|
|
|
10,885
|
|
|
|
(4,034
|
)
|
|
|
37,440
|
|
EBITDA
|
|
|
3,373
|
|
|
|
(1,337
|
)
|
|
|
(10
|
)
|
|
|
(1,309
|
)
|
|
|
(2.120
|
)
|
|
|
(1,006
|
)
|
|
|
(210
|
)
|
|
|
(22,983
|
)
|
|
|
(25,602
|
)
|
Year
ending January 31, 2018
|
|
NZ Retail
|
|
|
AU Retail
|
|
|
NZ Wholesale
|
|
|
AU Wholesale
|
|
|
US Wholesale
|
|
|
EU Wholesale
|
|
|
e-commerce
|
|
|
Unallocated
|
|
|
|
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
Total
|
|
Revenue
|
|
|
34,269
|
|
|
|
18,236
|
|
|
|
10,453
|
|
|
|
15,512
|
|
|
|
6,390
|
|
|
|
14,192
|
|
|
|
32,234
|
|
|
|
102
|
|
|
|
131,388
|
|
Gross margin
|
|
|
17,781
|
|
|
|
8,779
|
|
|
|
2,240
|
|
|
|
2,967
|
|
|
|
(48
|
)
|
|
|
3,971
|
|
|
|
11,260
|
|
|
|
(3,021
|
)
|
|
|
43,929
|
|
EBITDA
|
|
|
4,330
|
|
|
|
(2,550
|
)
|
|
|
1,172
|
|
|
|
(814
|
)
|
|
|
(3,349
|
)
|
|
|
1,067
|
|
|
|
(260
|
)
|
|
|
(23,649
|
)
|
|
|
(24,053
|
)
|
Year
ending January 31, 2017 (Unaudited)
|
|
NZ Retail
|
|
|
AU Retail
|
|
|
NZ Wholesale
|
|
|
AU Wholesale
|
|
|
US Wholesale
|
|
|
EU Wholesale
|
|
|
e-commerce
|
|
|
Unallocated
|
|
|
|
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
Total
|
|
Revenue
|
|
|
35,968
|
|
|
|
19,395
|
|
|
|
13,636
|
|
|
|
27,174
|
|
|
|
15,695
|
|
|
|
15,148
|
|
|
|
23,424
|
|
|
|
1,702
|
|
|
|
152,143
|
|
Gross margin
|
|
|
20,761
|
|
|
|
10,958
|
|
|
|
4,072
|
|
|
|
9,764
|
|
|
|
4,979
|
|
|
|
5,013
|
|
|
|
10,879
|
|
|
|
1,358
|
|
|
|
67,785
|
|
EBITDA
|
|
|
7,683
|
|
|
|
310
|
|
|
|
1,157
|
|
|
|
5,623
|
|
|
|
907
|
|
|
|
925
|
|
|
|
4,551
|
|
|
|
(19,060
|
)
|
|
|
2,098
|
|
For
the 7-months ended January 31, 2017
|
|
NZ Retail
NZ$000’s
|
|
|
AU Retail
NZ$000’s
|
|
|
NZ Wholesale
NZ$000’s
|
|
|
AU Wholesale
NZ$000’s
|
|
|
US Wholesale
NZ$000’s
|
|
|
EU Wholesale
NZ$000’s
|
|
|
e-commerce
NZ$000’s
|
|
|
Unallocated
NZ$000’s
|
|
|
Total
|
|
Revenue
|
|
|
21,953
|
|
|
|
12,053
|
|
|
|
7,484
|
|
|
|
18,091
|
|
|
|
9,015
|
|
|
|
9,548
|
|
|
|
18,140
|
|
|
|
-
|
|
|
|
96,284
|
|
Gross margin
|
|
|
12,246
|
|
|
|
6,461
|
|
|
|
2,523
|
|
|
|
6,660
|
|
|
|
2,081
|
|
|
|
3,271
|
|
|
|
6,238
|
|
|
|
(340
|
)
|
|
|
39,140
|
|
EBITDA
|
|
|
4,766
|
|
|
|
265
|
|
|
|
2,048
|
|
|
|
4,571
|
|
|
|
16
|
|
|
|
1,258
|
|
|
|
2,584
|
|
|
|
(17,634
|
)
|
|
|
(2,126
|
)
|
Year
to June 30, 2016
|
|
NZ Retail
NZ$000’s
|
|
|
AU Retail
NZ$000’s
|
|
|
NZ
Wholesale
NZ$ 000’s
|
|
|
AU
Wholesale
NZ$000’s
|
|
|
US
Wholesale
NZ$000’s
|
|
|
EU
Wholesale
NZ$000’s
|
|
|
e-commerce
NZ$ 000’s
|
|
|
Unallocated
NZ$000’s
|
|
|
Total
|
|
Revenue
|
|
|
37,389
|
|
|
|
20,680
|
|
|
|
15,071
|
|
|
|
28,021
|
|
|
|
18,876
|
|
|
|
16,531
|
|
|
|
6,722
|
|
|
|
7,710
|
|
|
|
151,000
|
|
Gross margin
|
|
|
21,336
|
|
|
|
11,750
|
|
|
|
4,350
|
|
|
|
9,965
|
|
|
|
4,336
|
|
|
|
4,873
|
|
|
|
3,140
|
|
|
|
7,725
|
|
|
|
67,475
|
|
EBITDA
|
|
|
9,073
|
|
|
|
1,915
|
|
|
|
3,641
|
|
|
|
6,445
|
|
|
|
1,519
|
|
|
|
1,669
|
|
|
|
1,101
|
|
|
|
(14,893
|
)
|
|
|
10,470
|
|
Year
to June 30, 2015
|
|
NZ Retail
NZ$000’s
|
|
|
AU Retail
NZ$000’s
|
|
|
NZ
Wholesale
NZ$ 000’s
|
|
|
AU
Wholesale
NZ$000’s
|
|
|
US
Wholesale
NZ$000’s
|
|
|
EU
Wholesale
NZ$000’s
|
|
|
e-commerce
NZ$ 000’s
|
|
|
Unallocated
NZ$000’s
|
|
|
Total
|
|
Revenue
|
|
|
37,089
|
|
|
|
18,491
|
|
|
|
16,333
|
|
|
|
29,817
|
|
|
|
13,853
|
|
|
|
17,548
|
|
|
|
5,683
|
|
|
|
24
|
|
|
|
138,838
|
|
Gross margin
|
|
|
20,819
|
|
|
|
10,425
|
|
|
|
5,355
|
|
|
|
11,356
|
|
|
|
2,924
|
|
|
|
6,290
|
|
|
|
2,611
|
|
|
|
27
|
|
|
|
59,807
|
|
EBITDA
|
|
|
8,934
|
|
|
|
2,801
|
|
|
|
3,568
|
|
|
|
8,907
|
|
|
|
388
|
|
|
|
3,024
|
|
|
|
620
|
|
|
|
(24,822
|
)
|
|
|
3,420
|
|
(1)
|
Unallocated
revenue, gross margin and EBITDA relates to revenue, gross margin and EBITDA that cannot be attributed directly to the other
reportable segments above including various brand management and head office costs.
|
New
Zealand and Australia Retail
In
the 12-month period ended January 31, 2019 New Zealand retail EBITDA was $3.4m compared with $4.3m in the 12-month period to January
31, 2018. Australian Retail EBITDA for the 12-month period ended January 31, 2019 was a loss of $1.3m compared with a loss of
$2.5m in the 12-month period to January 31, 2018. The retail environment continued to be challenging for our Bendon stores, and
this along with a lack of current season stock supply were the key reasons for both the reduction in the New Zealand market EBITDA
year on year as well as the continued operating loss in the Australian market.
In
the 12-month period ended January 31, 2018 New Zealand retail EBITDA was $4.3m compared with $7.7m in the 12-month period to January
31, 2017. Australian Retail EBITDA for the 12-month period ended January 31, 2018 was a loss of $2.5m compared with a profit of
$0.3m in the 12-month period to January 31, 2017. A challenging retail environment, seasonal product mix and vendor supply issues
were the key reasons for this reduced EBITDA across both the New Zealand and Australian retail markets.
New
Zealand Retail Gross margin reduced 5.8% between the 12-month period to January 31, 2018 and 12- month period to January 31, 2017
from 57.7% to 51.9%. Australia Retail Gross margin reduced 8.4% between the 12-month period to January 31, 2018 and 12- month
period to January 31, 2017 from 56.5% to 48.1%. The reduction in the gross margin in both markets was caused by increased discounts
provided to customers and sub-optimal stock mix because of the stock supply issue.
In
the 7-month period ended January 31, 2017, the 12-month period ended June 30 2016, the 12-month period ended June 30 2015, New
Zealand retail EBITDA was $4.8m, $9.1m, an d $8.9m respectively, as a result of similar trading conditions and consistent store
numbers.
In
the 12-month period ended June 30 2016, Australia retail recognized increased revenue and reduced EBITDA of $20.7m and $1.9m,
respectively, as compared with $18.5m and $2.8m, respectively, in the 12-month period ended June 30 2015. The increase in revenue
was due to the introduction of 8 new outlet stores, which due to early trading losses experienced reduced EBITDA. The revenue
and EBITDA in the 7-month period to January 31, 2017 showed a consistent trend as compared with the 12-month period ended June
30 2016.
NZ
Wholesale, AU Wholesale, US Wholesale and EU wholesale
In
the 12-month period ended January 31, 2019 the EBITDA loss decreased in the US market and increased in the NZ, AU and EU markets
when compared with the 12-month period ended January 31, 2018. New Zealand wholesale EBITDA was a loss of $0.01m in the 12-months
ended January 31, 2019 compared with an EBITDA profit of $1.1m in the 12-months ended January 31, 2018. AU wholesale EBITDA was
a loss of $1.3m in the 12-months ended January 31, 2019 compared with an EBITDA loss of $0.8m in the 12-months ended January 31,
2018. US wholesale EBITDA was a loss of $2.1m in the 12-months ended January 31, 2019 compared with an EBITDA loss of $3.3m in
the 12-months ended January 31, 2018. EU Wholesale EBITDA was a loss of $1.0m in the 12-months ended January 31, 2019 compared
with a profit of $1.1m in the 12-months ended January 31, 2018.
In
the 12-month period January 31, 2019, and 12-month period ended January 312, 2018 New Zealand wholesale revenue was $7.1m and
$10.4m respectively. In the 12-month period ended January 31, 2019 New Zealand Wholesale EBITDA was a loss of $0.01m compared
with a profit of $1.1m in the 12-month period to January 31, 2018. Both the reduction in sales, and EBITDA loss in the New Zealand
market is attributed to a lack of order fulfillment due to the reduced stock supply, additional costs were also incurred as a
result of unfulfilled orders.
In
the 12-month period ended January 31, 2019 and 12-month period ended January 31, 2018, Australia wholesale revenue was $11.5m
and $15.5m, respectively. In the 12-month period ended January 31, 2019 Australia Wholesale EBITDA was a loss of $1.3m compared
with a loss of $0.8m in the 12-month period to January 31, 2018. The EBITDA loss for the Australian market was also due to a lack
of fulfillment of orders because of the reduced stock supply.
US
wholesale revenue dropped from $6.4m for the 12-month period ended January 31, 2018 to $5.8m for the 12-month period ended January
31, 2019. The EBITDA Loss for the period ended January 31, 2019 was $2.1m compared to the EBITDA loss of $3.3m for the year ended
January 31,2018. The EBITDA loss incurred for the US Wholesale market was primarily due to our relationship ending with key major
wholesale accounts.
In
the 12-month period ended January 31, 2019, and the 12-month period ended January 31, 2018, EU wholesale revenue was $5.0m, and
$14.2m respectively. The EBITDA Loss for the period ended January 31, 2019 was $1.0m compared to the EBITDA profit of $1.1m for
the year ended January 31, 2018. A strategic decision was made by the business to exit the EU market and this is the key driver
for reduction in sales and the loss for the current period.
In
the 12-month period ended January 31, 2018 EBITDA increased in the NZ Wholesale and EU Wholesale markets and decreased in the
AU Wholesale and US Wholesale markets when compared with the 12-month period ended January 31, 2017. New Zealand wholesale EBITDA
was $1.17m in the 12-months ended January 31, 2018, compared with $1.15m in the 12-months ended January 31, 2017. AU wholesale
EBITDA was a loss of $0.8m in the 12-months ended January 31, 2018, compared with an EBITDA profit of $5.6m in the 12-months ended
January 31, 2017. US wholesale EBITDA was a loss of $3.3m in the 12-months ended January 31, 2018 compared with an EBITDA profit
of $0.9m in the 12-months ended January 31, 2017. EU wholesale EBITDA was a profit of $1.1m in the 12-months ended January 31,
2018, compared with a profit of $0.9m in the 12-months ended January 31, 2017.
In
the 12-month period ended January 31, 2018 and 12-month period ended January 31, 2017 New Zealand wholesale revenue was $10.4m
and $13.6m, respectively. Cancellation of orders from our key account holders due to vendor supply issues were the key reasons
for these reduced sales.
In
the 12-month period ended January 31, 2018 and 12-month period ended January 31, 2017, Australia wholesale revenue was $15.5m
and $27.1m, respectively. In the 12-month period ended January 31, 2018 Australia Wholesale EBITDA was a loss of $0.8m compared
with a profit of $5.6m in the 12-month period to January 31, 2017. The EBITDA loss for the Australian market was due to the cancellation
of multiple orders as a result of delayed supply, due to vendor delays and discounts offered to customers for delayed ranges.
US
wholesale revenue dropped from $15.7m for the 12-month period ended January 31, 2017 to $6.4m for the 12-month period ended January
31, 2018. The EBITDA Loss for the period ended January 31, 2018 was $3.3m compared to the EBITDA profit of $0.9m for the year
ended January 31,2017. The EBITDA loss incurred for the US Wholesale market was primarily due to our relationship ending with
Macy’s
In
the 12-month period ended January 31, 2018, and the 12-month period ended January 31, 2017, EU wholesale revenue was $14.2m, and
$15.1m respectively. EU Wholesale Gross margin decreased 5.1% between the 12-month period to January 31, 2018 and 12- month period
to January 31, 2017 from 33.1% to 28%. These fluctuations were driven by changes in customer mix. EBITDA increased year on year,
driven by a reduction in expenses.
In
the 7-month period ended January 31, 2017, the 12-month period ended June 30 2016, and the 12-month period ended June 30 2015,
New Zealand wholesale revenue was $7.5m, $15.1m, and $16.3m, respectively. In the 7-month period ended January 31, 2017, the 12-month
period ended June 30 2016, and the 12-month period ended June 30 2015, Australia wholesale revenue was $18.1m, $28.0m and $29.8m,
respectively. These fluctuations were driven by changes in customer mix and a general trend in the business to focus on its direct
to consumer strategy. EBITDA for these respective segments was in line with sales movements.
US
wholesale revenue grew from $13.9m in the 12-month period ended June 30 2015 to $18.9m in the 12-month period ended June 30 2016
as a result of a new Macy’s contract and favorable foreign exchange rate variances. U.S. wholesale revenue was $9.0m and
EBITDA was $0.0m in the 7-month period to January 31, 2017 which was due to reduced business from Macy’s and less favorable
foreign exchange movements than in the 12-month period ended June 30 2016. EBITDA for this segment was in line with sales movements.
In
the 7-month period ended January 31, 2017, the 12-month period ended June 30 2016, and the 12-month period ended June 30 2015,
EU wholesale revenue was $9.6m, $16.5m, and $17.5m respectively. These fluctuations were driven by changes in customer mix and
general trend in the business to focus on its direct to consumer strategy. EBITDA for segments was in line with sales movements.
E-commerce
For
the 12-months ended January 31, 2019 the e-commerce EBITDA was a loss of $0.2m compared with a loss of $0.3m for the 12-months
ended January 31, 2018. The loss for this period was impacted by the reduction in gross margin between the 12-month period to
January 31, 2019 and 12-month period to January 31, 2018 from 34.9% to 33.9%, sales are comparable year on year.
For
the 12-months ended January 31, 2018 our e-commerce EBITDA was a loss of $0.3m compared with a profit of $4.5m for the 12-months
ended January 31, 2017. The loss for this period is due to decrease in margin as a result of the new license fee under the license
agreement with FOH and discounts offered to customers. E-commerce Gross margin reduced 11.5% between the 12-month period to January
31, 2018 and 12-month period to January 31, 2017 from 46.4% to 34.9%.
In
the 12-month period ended June 30 2016, e-commerce Revenue grew to $6.7m from $5.7m in the 12-month period ended June 30 2015.
This was as a result of changing consumer trends and a conscious shift in the business to focus on this revenue stream. EBIDA
for this segment was in line with sales movements.
The
e-commerce revenue and EBITDA increased significantly in the 7-month period to January 31, 2017, to $18.4m and $2.6m respectively.
This was as a result of entering into a license agreement with Frederick’s of Hollywood. The previous management service
arrangement with Frederick’s of Hollywood that existed in the 12-month period ended June 30 2016 was not allocated to this
segment.
Non-IFRS
Financial Measures
EBITDA
is defined as earnings before interest, taxes, depreciation, depletion, amortization and impairment. Our management uses EBITDA
as a measure of our operating results and considers it to be a meaningful supplement to net income as a performance measurement,
primarily because we incur significant depreciation and depletion and impairment charges, and the exclusion of such amounts in
EBITDA eliminates the non-cash impact.
Reconciliations
Reconciliation
of segment EBITDA to the consolidated statements of profit or loss and other comprehensive income follows:
Year
ended January 31, 2019 compared to 12-month period ended January 31, 2018
|
|
12 months ended
January 2019
NZ$000
|
|
|
12 months ended
January 2018
NZ$000
|
|
Segment EBITDA
|
|
|
(25,602
|
)
|
|
|
(24,053
|
)
|
Income tax (expense)/benefit
|
|
|
1,274
|
|
|
|
(60
|
)
|
Any other reconciling items
|
|
|
(24,892
|
)
|
|
|
(13,480
|
)
|
Total net loss after tax
|
|
|
(49,220
|
)
|
|
|
(37,593
|
)
|
Year
ended January 31, 2018 compared to 12-month period ended January 31, 2017 (unaudited)
|
|
12 months
|
|
|
Unaudited
12 months
|
|
|
|
ended
|
|
|
ended
|
|
|
|
January 2018
|
|
|
January 2017
|
|
|
|
NZ$000
|
|
|
NZ$000
|
|
Segment EBITDA
|
|
|
(24,053
|
)
|
|
|
2,098
|
|
Income tax (expense)/benefit
|
|
|
(60
|
)
|
|
|
(6,123
|
)
|
Any other reconciling items
|
|
|
(13,480
|
)
|
|
|
(36,327
|
)
|
Total net loss after tax
|
|
|
(37,593
|
)
|
|
|
(40,352
|
)
|
7-month
period ended January 31, 2017 compared to the 12-month period ended June 30, 2016 and the 12-month period ended June 30, 2015
|
|
7 months
ended
January 2017
NZ$000’s
|
|
|
12 months
ended
June 2016
NZ$000’s
|
|
|
12 months
ended
June 2015
NZ$000’s
|
|
Segment EBITDA
|
|
|
(2,126
|
)
|
|
|
10,470
|
|
|
|
3,420
|
|
Income tax (expense)/ benefit
|
|
|
(865
|
)
|
|
|
(5,546
|
)
|
|
|
1,274
|
|
Other Revenue
|
|
|
|
|
|
|
7,710
|
|
|
|
24
|
|
Any other reconciling items
|
|
|
(12,988
|
)
|
|
|
(33,380
|
)
|
|
|
(17,823
|
)
|
Total net loss after tax
|
|
|
(15,979
|
)
|
|
|
(20,746
|
)
|
|
|
(13,105
|
)
|
In
each of the tables above, “other reconciling items” consist of brand transition, restructure and transaction expenses,
finance expense, impairment expense, depreciation and amortization, fair value (gain)/loss on foreign exchange contracts, and
unrealized foreign exchange (gain)/loss.
B.
|
Liquidity,
and Capital Resources
|
Liquidity
We
finance our business through cash from operations and equity and debt financing. Our cash requirements have been principally to
fund working capital needs, to support the growth of the business and to partially repay our bank loan.
Management
intends to continue to raise funds from equity financing to fund our operations and objectives. There is no assurance the additional
funding will be achieved. If we are unable to achieve the additional funding, we may not be able to conduct our operations and
pursue our objectives as presently contemplated, which may adversely affect our results of operations and financial condition.
12-month
period ended January 31, 2019 compared to 12-month period ended January 31, 2018
As
at January 31, 2019 and January 31, 2018 the Company had cash totaling $1.9m and $10.7m respectively. During the 12-months ended
January 31, 2019 and the 12-months ended January 31, 2018 insufficient cash availability directly contributed to a lack of stock.
During
the year ended January 31, 2019, the Company has undertaken a number of financing activities and raised $23.6m. Of this amount,
$18.5m was utilized to repay Bank debt and the balance was utilized as working capital in the operating business.
12-month
period ended January 31, 2018 compared to 12-month period ended January 31, 2017
As
of January 31, 2018, and January 31, 2017, the Company had cash totaling $10.7m and $2.6m respectively. During the 12-months ended
January 31, 2018 and the 12-months ended January 31, 2017, insufficient cash liquidity contributed to a stock supply issue as
described above.
During
the year ended January 31, 2018, the Company issued an aggregate amount of USD $2,600,000 (NZ$3,544,649) of convertible notes.
Working
capital
We
have managed and continue to manage our working capital constraints through the deferral of creditor settlement. Our relationships
with our suppliers are managed carefully and we do not have any significant concerns about the deferred payment arrangements.
We are continuing to raise capital and believe that this will assist greatly in reducing the overdue creditor position in the
coming financial year.
As
of January 31, 2019 and January 31, 2018
|
|
January 31,
2019
NZ$000
|
|
|
January 31,
2018
NZ$000
|
|
|
|
|
|
|
|
|
Current Assets
|
|
|
33,369
|
|
|
|
70,343
|
|
Current Liabilities
|
|
|
(62,795
|
)
|
|
|
(91,095
|
)
|
Working Capital
|
|
|
(29,426
|
)
|
|
|
(20,752
|
)
|
As
of January 31, 2019, current assets decreased due to the reduction in related party receivables, the reduction in inventory because
of the reduced stock supply, and the reduced trade and other receivables because of cancelled orders from our wholesale accounts
due to ongoing stock supply issues. Our cash balance also reduced by $8.8m from $10.7m as at the year ended January 31, 2018 to
$1.9m as at the year ended January 31, 2019.
As
of January 31, 2018 and January 31, 2017
|
|
January 31,
|
|
|
January 31,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
NZ$000
|
|
|
NZ$000
|
|
Current Assets
|
|
|
70,343
|
|
|
|
81,588
|
|
Current Liabilities
|
|
|
(91,095
|
)
|
|
|
(101,232
|
)
|
Working Capital
|
|
|
(20,752
|
)
|
|
|
(19,644
|
)
|
The
negative working capital is primarily driven by the classification of bank debt and shareholder loan as current liabilities. As
of January 31, 2018, current assets decreased due to both the reduction in inventory because of vendor supply issues and the reduced
trade and other receivables as a result of cancelled orders from our wholesale accounts due to vendor supply issues
As
of January 31, 2017, June 30, 2016 and June 30, 2015
|
|
January 31,
2017
NZ$000’s
|
|
|
June 30,
2016
NZ$000’s
|
|
|
June 30,
2015
NZ000’s
|
|
Current Assets
|
|
|
81,588
|
|
|
|
74,807
|
|
|
|
70,026
|
|
Current Liabilities
|
|
|
(108,027
|
)
|
|
|
(94,794
|
)
|
|
|
(94,093
|
)
|
Working Capital
|
|
|
(26,439
|
)
|
|
|
(19,987
|
)
|
|
|
(24,067
|
)
|
The
negative working capital is primarily driven by the classification of bank debt and shareholders loan as current liabilities.
Cash
flows
Year
ended January 31, 2019 compared to 12-month period ended January 31, 2018
|
|
12 months ended
|
|
|
12 months ended
|
|
|
|
January 31, 2019
|
|
|
January 31, 2018
|
|
|
|
NZ$000
|
|
|
NZ$000
|
|
Net cash outflow from operating activities
|
|
|
(9,434
|
)
|
|
|
(4,116
|
)
|
Net cash outflow from investing activities
|
|
|
(1,867
|
)
|
|
|
(2,312
|
)
|
Net cash inflow from financing activities
|
|
|
2,168
|
|
|
|
14,496
|
|
Net increase/(decrease) in cash and cash equivalents held
|
|
|
(9,133
|
)
|
|
|
8,068
|
|
Cash and cash equivalents at end of the year
|
|
|
1,962
|
|
|
|
10,739
|
|
Operating
Activities
Net
cash outflow from operating activities for the 12-month period to January 31, 2019 and, 12-month period to January 31, 2018 was
$9.4m, and $4.1m, respectively. This was largely because of the increased net loss for the current period. The company is committed
to a strategic plan lead by our new CEO to create cost savings and manage the overhead structure moving forward, we anticipate
that this plan will have a positive impact on our operating cashflow moving forward.
Investing
Activities
Net
cash outflow from investing activities for the 12-month period to January 31, 2019 and for the 12-month period to January 31,
2018 was $1.9m and $2.3m respectively. This was driven by the proceeds from the businesses acquired during the period.
Financing
Activities
Net
cash inflow from financing activities for the 12-month period to January 31, 2019 and, 12-month period to January 31, 2018 was
$2.2m, and $14.5m, respectively. During the 12-month period to January 31, 2019 the company raised $23.2m through the issue of
shares. These funds were partially used to fund interest charges of $2.3m during the period, and to also repay the bank $18.5m.
Year
ended January 31, 2018 compared to 12-month period ended January 31, 2017 (unaudited)
|
|
12 months ended
|
|
|
12 months ended
|
|
|
|
January 31, 2018
|
|
|
January 31, 2017
|
|
|
|
NZ$000
|
|
|
NZ$000
|
|
Net cash outflow from operating activities
|
|
|
(4,116
|
)
|
|
|
(15,160
|
)
|
Net cash outflow from investing activities
|
|
|
(2,312
|
)
|
|
|
(2,933
|
)
|
Net cash inflow from financing activities
|
|
|
14,496
|
|
|
|
17,039
|
|
Net increase/(decrease) in cash and cash equivalents held
|
|
|
8,068
|
|
|
|
(1,053
|
)
|
Cash and cash equivalents at end of the year
|
|
|
10,739
|
|
|
|
2,645
|
|
Operating
Activities
Net
cash outflow from operating activities for the 12-month period to January 31, 2018 and, 12-month period to January 31, 2017 was
$4.1m, and $15.1m, respectively. This was largely as a result of the net loss for the periods. Bendon Limited will continue to
implement a restructure plan to create cost savings and manage the overhead structure, which will show as favorable impact in
the cash flow going forward.
Investing
Activities
Net
cash outflow from investing activities for the 12-month period to January 31, 2018 and, 12-month period to January 31, 2017 was
$2.3m, and $2.9m, respectively. This was largely driven by capital expenditure on property, plant and equipment in stores including
enhancement of existing stores and introduction of new stores.
Financing
Activities
Net
cash inflow from financing activities for the 12-month period to January 31, 2018 and, 12-month period to January 31, 2017 was
$14.5m, and $17m, respectively. During the 12-month period to January 31, 2018 the company raised $22m through the issue of shares
and an additional $4.5m through convertible note issuance. These funds were used partly to fund interest charges of $3.4m during
the period, and to also repay the bank $9.7m.
7-month
period ended January 31, 2017 compared to 12-month period ended June 30, 2016 and 12-month period ended June 30 2015
|
|
7 months
ended
January 31,
2017
NZ$000’s
|
|
|
12
months
ended
June 30,
2016
NZ$000’s
|
|
|
12
months
ended
June 30,
2015
NZ000’s
|
|
Net cash (outflow) from operating activities
|
|
|
(13,518
|
)
|
|
|
(5,040
|
)
|
|
|
(17,199
|
)
|
Net cash (outflow) from investing activities
|
|
|
(1,074
|
)
|
|
|
(3,178
|
)
|
|
|
(5,794
|
)
|
Net cash inflow from financing activities
|
|
|
13,082
|
|
|
|
11,251
|
|
|
|
20,524
|
|
Net increase/decrease in cash and cash equivalents held
|
|
|
(1,510
|
)
|
|
|
3,033
|
|
|
|
(2,469
|
)
|
Cash and cash equivalents
|
|
|
2,644
|
|
|
|
4,193
|
|
|
|
1,246
|
|
Operating
Activities
Net
cash (outflow) from operating activities for the 7-month period to January 31, 2017, 12 month period ended June 30 2016 and the
12 month period ended June 30, 2015 was $13.5m, $5.0m, and $17.2m, respectively, which was largely as a result of the net loss
for the periods.
Investing
Activities
Net
cash (outflow) from investing activities for the 7-month period to January 31, 2017, the 12 month period ended June 30, 2016 and
the 12 month period ended June 30, 2015 was $1.1m, $3.2m, and $5.8m respectively. This was largely driven by capital expenditure
on property, plant and equipment in stores including enhancement of existing stores and introduction of new stores.
Financing
Activities
Net
cash inflow from financing activities for the 7- month period to January 31, 2017, the 12 month period ended June 30, 2016, and
the 12 month period ended June 30, 2015 was $13.1m, $11.3m, and $20.5m respectively. Bank debt and shareholder loan finance increased
in the 12 month period ended June 30 2015 and the 12 month period ended June 30 2016 to fund operating cash outflows. During the
7- month period ended January 31, 2017, in addition to additional bank and shareholder debt, cash was also raised through issuance
of $16.5m in convertible note debt.
Indebtedness
Bank
loan
On
June 27, 2016, all banking facilities were repaid and a new banking arrangement with BNZ commenced. This debt arrangement with
BNZ was entered into on June 27, 2016 and included a term loan facility and revolving (working capital) loan facility. The facility
limits of the term loan and revolving loan were $54,000,000 in aggregate.
On
June 13, 2018, we entered into a Deed of Amendment with BNZ to reduce the facility limits from $54,000,000 in the aggregate to
a single revolving facility limit of $20,000,000. In addition, the new facility takes over guarantees and financial instruments
totalling $1,345,000. In connection with the Deed of Amendment, we repaid approximately $18 million of the outstanding loans.
The
new facility of $20,000,000 has been extended to January 31, 2020 and discussions are continuing to extend the facility beyond
that point. The current amount outstanding under the facilities (including the instruments referenced above) is $20,000,000 (January
31, 2018: $38,489,428, 2017: $41,710,000). The current interest rate on this loan is 5.57% (January 31, 2019: 5.57%, 2018: 5.55%,
2017: 4.84%) per annum.
BNZ
has the first ranking charge over all assets of the Company and its subsidiaries. Under the terms of the major borrowing facility,
the new facility is subject to four undertakings being: Interest cover ratio of three times that is first tested as at April 30,
2019; gross EBITDA ratio measured to 3 months to September 2018 had to be greater than $0, six months to December 30, 2018 is
greater than $3 million; inventory and receivables ratio must be greater than 2 times being first measured as at September 30,
2018; and the actual sales and gross margin must not vary by more than 10% from the budget submitted to the Bank. The covenants
were reset as at 1 May 2019 and only the inventory covenant remains.
As
at October 31, 2018, there was a breach in minimum gross EBITDA ratio. As at January 31, 2019, there was a breach of the minimum
Gross EBITDA ratio and a breach of the inventory and receivables ratio. The reset inventory ratio has been breached up until November
30, 2019. The Bank has advised that they are currently taking these breaches under review.
Shareholder
loan
On
September 29, 2016, Bendon Limited issued 24,839 Bendon Ordinary Shares to the shareholders as part of an agreement to convert
debt to equity. The amount of debt converted on this date amounted to $24,839,783.
On
June 19, 2018, Bendon Limited issued additional 24,221 Bendon Ordinary Shares to the shareholders as part of an agreement to convert
the remainder of the shareholder debt to equity. The amount of debt converted on this date amounted to a fair value of $12,244,208.
After
this conversion, the shareholder loan is fully converted to equity and the outstanding balance as at January 31, 2019 was zero
(January 31, 2018: $10,951,295, 2017: $8,200,000). The interest rate on the shareholder loans up to the date of conversion was
30%, and was capitalised quarterly. Total interest capitalised during the twelve months to January 31, 2019 was $641,000 (January
31, 2018: $553,000, 2017: $275,000).
Convertible
notes
On
September 29, 2017, the holders of US$11.75m (NZ$16.79m) of convertible notes converted to 23,961 Bendon Ordinary Shares. On June
19, 2018, in connection with the closing of the Reorganization, the holders of US$2.8m (NZ$4.2m) of convertible notes converted
to 16,408 Bendon Ordinary Shares.
The
holder of US$1.0m (NZ$1.42m) of convertible notes elected for their convertible note to be repaid which is due at a future date
to be agreed between us and the holder. The amount owing has been classified as a current borrowing and amounted to NZ$1.247m
as at January 31, 2019.
All
the convertible notes have now converted to equity due to the closing of the Reorganization, or been reclassified as other loans.
Accordingly, the outstanding balance of the convertible notes was zero as at January 31, 2019 (January 31, 2018: US$2,600,000
(NZ$3,624,198), 2017: US$12,000,000 (NZ$16,474,465)). The convertible notes had been issued pursuant to an Investment Agreement
dated on August 9, 2017. The convertible notes accrued interest at 10% interest, were subject to a conversion at a fixed value
on the business day immediately prior to the Reorganization and had a maturity date of August 10, 2019. Conversion was at the
noteholders option. If conversion had not occurred the convertible notes would have been redeemable at maturity. The issuer could
have elected to redeem the convertible notes at any time prior to maturity.
The
carrying value of the convertible notes at initial recognition was determined as the difference between the consideration received
and the fair value of the embedded derivative recognised. The convertible notes are subsequently measured at amortised cost using
the effective interest rate method. The carrying value of the convertible notes at January 31, 2019 was zero (2018: $1,740,000,
2017: $13,744,000).
C.
|
Research
and Development, Patents and Licenses
|
We
do not have any set research and development policies and have not spent a significant amount on research and development in the
last three fiscal years
For
a discussion of trends relating to revenues, please see Item 5.A, “Results of Operations,” contained in this Annual
Report and incorporated herein by reference.
E.
|
Off-balance
Sheet Arrangements
|
Except
for amounts due under operating lease commitments disclosed below under Item E, “Contractual Obligations,” of this
Annual Report, we do not have any material off-balance sheet commitments or arrangements.
F.
|
Contractual
Obligations
|
As
of January 31, 2019, our contractual, obligations, excluding trade creditors, were as set forth below:
|
|
Total
January 31, 2019
|
|
|
Not
later
than
one year
|
|
|
Between
one
year and
five
years
|
|
|
Later
than
five
years
|
|
|
|
NZ$000
|
|
|
NZ$000
|
|
|
NZ$000
|
|
|
NZ$000
|
|
Bank
loan
|
|
|
20,000
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
Shareholder
loans
|
|
|
1,049
|
|
|
|
1,049
|
|
|
|
|
|
|
|
|
|
Other
Loans
|
|
|
967
|
|
|
|
967
|
|
|
|
|
|
|
|
|
|
Working
capital financing bank facility
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Convertible
notes
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
Minimum
lease payments under non-cancellable operating leases
|
|
|
28,057
|
|
|
|
8,974
|
|
|
|
18,532
|
|
|
|
1,485
|
|
Contracted
commitements
|
|
|
12,982
|
|
|
|
4,286
|
|
|
|
8,696
|
|
|
|
|
|
Total
|
|
|
64,066
|
|
|
|
35,354
|
|
|
|
27,228
|
|
|
|
1,485
|
|
The
safe harbor provided in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act applies to
forward-looking information provided under “Off-Balance Sheet Arrangements” and “Contractual Obligations.”
PART
III
ITEM
17. FINANCIAL STATEMENTS
See
Item 18, “Financial Statements,” of this Form 20-F/A.
ITEM
18. FINANCIAL STATEMENTS
Our
Audited Annual Consolidated Financial Statements are included at the end of this Form 20-F/A.
ITEM
19. EXHIBITS
SIGNATURES
The
registrant hereby certifies that it meets all of the requirements for filing on annual report on Form 20-F and that it has duly
caused and authorized the undersigned to sign this annual report on its behalf.
|
Naked
Brand Group Limited
|
|
|
|
|
By:
|
/s/
Justin Davis-Rice
|
|
Name:
|
Justin
Davis-Rice
|
|
Title:
|
Executive
Chairman
|
|
|
|
|
By:
|
/s/
David Adams
|
|
Name:
|
David
Adams
|
|
Title:
|
Interim
Chief Financial Officer
|
Date:
January 3, 2020
Naked
Brand Group Limited
ACN
619 054 938
Consolidated
Financial Statements
(Expressed
in New Zealand Dollars)
For
the Periods Ended 31 January 2019, 31 January 2018, and 31 January 2017 and 30 June 2016
Naked
Brand Group Limited
ACN
619 054 938
Contents
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017 and 30 June 2016
Naked
Brand Group Limited
ACN
619 054 938
Report
of the Independent Registered Public Accounting Firm
Naked
Brand Group Limited
ACN
619 054 938
Consolidated
Statement of Profit or Loss and Other Comprehensive Income
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017 and 30 June 2016
|
|
Note
|
|
For
the Year Ended 31 January 2019
NZ$000’s
|
|
|
For
the Year Ended 31 January 2018
NZ$000’s
|
|
|
For
the 7 Months Ended 31 January 2017
NZ$000’s
|
|
|
For
the Year Ended 30 June 2016
NZ$000’s
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
5
|
|
|
111,920
|
|
|
|
131,388
|
|
|
|
96,284
|
|
|
|
151,000
|
|
Cost
of goods sold
|
|
|
|
|
(74,480
|
)
|
|
|
(87,459
|
)
|
|
|
(57,144
|
)
|
|
|
(83,525
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
|
|
37,440
|
|
|
|
43,929
|
|
|
|
39,140
|
|
|
|
67,475
|
|
Brand
management
|
|
|
|
|
(49,256
|
)
|
|
|
(53,653
|
)
|
|
|
(32,040
|
)
|
|
|
(48,362
|
)
|
Administrative
expenses
|
|
|
|
|
(3,432
|
)
|
|
|
(4,131
|
)
|
|
|
(2,383
|
)
|
|
|
(4,090
|
)
|
Corporate
expenses
|
|
|
|
|
(14,145
|
)
|
|
|
(12,851
|
)
|
|
|
(8,082
|
)
|
|
|
(13,002
|
)
|
Finance
expense
|
|
6
|
|
|
(4,041
|
)
|
|
|
(8,791
|
)
|
|
|
(6,238
|
)
|
|
|
(10,409
|
)
|
Brand
transition, restructure and transaction expenses
|
|
6
|
|
|
(10,075
|
)
|
|
|
(3,272
|
)
|
|
|
(1,321
|
)
|
|
|
(2,232
|
)
|
Impairment
expense
|
|
6
|
|
|
(8,173
|
)
|
|
|
(1,914
|
)
|
|
|
(292
|
)
|
|
|
(2,157
|
)
|
Other
foreign currency gains/(losses)
|
|
6
|
|
|
1,963
|
|
|
|
757
|
|
|
|
(3,306
|
)
|
|
|
(2,423
|
)
|
Fair
value gain/(loss) on Convertible Notes derivative
|
|
|
|
|
(775
|
)
|
|
|
2,393
|
|
|
|
(592
|
)
|
|
|
-
|
|
Loss
before income tax
|
|
|
|
|
(50,494
|
)
|
|
|
(37,533
|
)
|
|
|
(15,114
|
)
|
|
|
(15,200
|
)
|
Income
tax (expense)/benefit
|
|
7
|
|
|
1,274
|
|
|
|
(60
|
)
|
|
|
(865
|
)
|
|
|
(5,546
|
)
|
Loss
for the period
|
|
|
|
|
(49,220
|
)
|
|
|
(37,593
|
)
|
|
|
(15,979
|
)
|
|
|
(20,746
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items
that may be reclassified to profit or loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange
differences on translation of foreign operations
|
|
22
|
|
|
(7
|
)
|
|
|
148
|
|
|
|
(29
|
)
|
|
|
31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income/(loss) for the period, net of tax
|
|
|
|
|
(7
|
)
|
|
|
148
|
|
|
|
(29
|
)
|
|
|
31
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
comprehensive income/(loss) for the period
|
|
|
|
|
(49,227
|
)
|
|
|
(37,445
|
)
|
|
|
(16,008
|
)
|
|
|
(20,715
|
)
|
Total
comprehensive income/(loss) attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Owners
of Naked Brand Group Limited
|
|
|
|
|
(49,227
|
)
|
|
|
(37,445
|
)
|
|
|
(16,008
|
)
|
|
|
(20,715
|
)
|
Naked
Brand Group Limited
ACN
619 054 938
Consolidated
Statement of Profit or Loss and Other Comprehensive Income
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017 and 30 June 2019
|
|
Note
|
|
For
the Year Ended 31 January 2019
NZ$000’s
|
|
|
For
the Year Ended 31 January 2018
NZ$000’s
|
|
|
For
the 7 Months Ended 31 January 2017
NZ$000’s
|
|
|
For
the Year Ended 30 June 2016
NZ$000’s
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
per share for profit from continuing operations attributable to the ordinary equity holders of the Group:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
loss per share (NZ$)
|
|
23
|
|
|
(2.01
|
)
|
|
|
(1.79
|
)
|
|
|
(0.82
|
)
|
|
|
(1.13
|
)
|
Diluted
loss per share (NZ$)
|
|
23
|
|
|
(2.01
|
)
|
|
|
(1.79
|
)
|
|
|
(0.82
|
)
|
|
|
(1.13
|
)
|
A
stock reorganisation occurred on the 19th June 2018 upon completion of the merger between Naked Brands Inc. and Bendon Limited.
As a result , the calculation of the basic and diluted earnings per share for 2018, 2017 and 2016 has been adjusted restrospectively.
The number of ordinary shares outstanding has been adjusted to reflect the proportionate change in the number of shares. See note
23 for further information.
The
above condensed consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
Naked
Brand Group Limited
ACN
619 054 938
Consolidated
Balance Sheets
As
at 31 January 2019, 31 January 2018, and 31 January 2017
|
|
Note
|
|
31
January 2019
NZ
$000’s
|
|
|
31
January 2018
NZ
$000’s
|
|
|
31
January 2017
NZ
$000’s
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
11
|
|
|
1,962
|
|
|
|
10,739
|
|
|
|
2,644
|
|
Trade
and other receivables
|
|
12
|
|
|
9,650
|
|
|
|
13,165
|
|
|
|
28,090
|
|
Inventories
|
|
13
|
|
|
21,120
|
|
|
|
31,113
|
|
|
|
37,751
|
|
Current
tax receivable
|
|
|
|
|
355
|
|
|
|
-
|
|
|
|
52
|
|
Related
party receivables
|
|
34
|
|
|
282
|
|
|
|
15,326
|
|
|
|
13,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
CURRENT ASSETS
|
|
|
|
|
33,370
|
|
|
|
70,343
|
|
|
|
81,588
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property,
plant and equipment
|
|
14
|
|
|
3,763
|
|
|
|
4,741
|
|
|
|
4,964
|
|
Deferred
tax assets
|
|
28
|
|
|
692
|
|
|
|
-
|
|
|
|
|
|
Intangible
assets
|
|
15
|
|
|
37,864
|
|
|
|
13,012
|
|
|
|
14,680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
NON-CURRENT ASSETS
|
|
|
|
|
42,319
|
|
|
|
17,753
|
|
|
|
19,644
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
|
|
|
75,688
|
|
|
|
88,096
|
|
|
|
101,232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade
and other payables
|
|
18
|
|
|
35,545
|
|
|
|
32,516
|
|
|
|
28,565
|
|
Borrowings
|
|
19
|
|
|
20,967
|
|
|
|
52,121
|
|
|
|
68,998
|
|
Foreign
currency derivative financial instruments
|
|
16
|
|
|
1,484
|
|
|
|
2,087
|
|
|
|
4,188
|
|
Derivative
on Convertible Notes
|
|
17
|
|
|
-
|
|
|
|
1,110
|
|
|
|
4,112
|
|
Current
tax liabilities
|
|
|
|
|
140
|
|
|
|
786
|
|
|
|
|
|
Related
party payables
|
|
34
|
|
|
3,738
|
|
|
|
1,369
|
|
|
|
635
|
|
Provisions
|
|
20
|
|
|
921
|
|
|
|
1,106
|
|
|
|
1,528
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
CURRENT LIABILITIES
|
|
|
|
|
62,795
|
|
|
|
91,095
|
|
|
|
108,026
|
|
Naked
Brand Group Limited
ACN
619 054 938
Consolidated
Balance Sheets
As
at 31 January 2019, 31 January 2018, and 31 January 2017
|
|
Note
|
|
31
January 2019
NZ
$000’s
|
|
|
31
January 2018
NZ
$000’s
|
|
|
31
January 2017
NZ
$000’s
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provisions
|
|
20
|
|
|
2,372
|
|
|
|
2,711
|
|
|
|
2,249
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
NON-CURRENT LIABILITIES
|
|
|
|
|
2,372
|
|
|
|
2,711
|
|
|
|
2,249
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES
|
|
|
|
|
65,167
|
|
|
|
93,806
|
|
|
|
110,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
ASSETS/(LIABILITIES)
|
|
|
|
|
10,519
|
|
|
|
(5,710
|
)
|
|
|
(9,043
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
21
|
|
|
134,183
|
|
|
|
68,727
|
|
|
|
27,948
|
|
Other
reserves
|
|
22
|
|
|
(2,013
|
)
|
|
|
(2,006
|
)
|
|
|
(2,154
|
)
|
Accumulated
profit/(losses)
|
|
24
|
|
|
(121,651
|
)
|
|
|
(72,431
|
)
|
|
|
(34,838
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
EQUITY
|
|
|
|
|
10,519
|
|
|
|
(5,710
|
)
|
|
|
(9,044
|
)
|
The
above consolidated balance sheet should be read in conjunction with the accompanying notes.
Naked
Brand Group Limited
ACN
619 054 938
Consolidated
Statements of Changes in Equity
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017 and 30 June 2016
|
|
Ordinary
Shares
NZ$000’s
|
|
|
Retained
Earnings/ (Accumulated Losses)
NZ$000’s
|
|
|
Foreign
Currency Translation Reserve
NZ$000’s
|
|
|
Total
NZ$000’s
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at 1 July 2015
|
|
|
3,108
|
|
|
|
1,887
|
|
|
|
(2,156
|
)
|
|
|
2,839
|
|
Loss
for the year
|
|
|
-
|
|
|
|
(20,746
|
)
|
|
|
-
|
|
|
|
(20,746
|
)
|
Other
comprehensive loss for the year
|
|
|
-
|
|
|
|
-
|
|
|
|
31
|
|
|
|
31
|
|
Balance
at 30 June 2016
|
|
|
3,108
|
|
|
|
(18,859
|
)
|
|
|
(2,125
|
)
|
|
|
(17,876
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at 1 July 2016
|
|
|
3,108
|
|
|
|
(18,859
|
)
|
|
|
(2,125
|
)
|
|
|
(17,876
|
)
|
Loss
for the year
|
|
|
-
|
|
|
|
(15,979
|
)
|
|
|
-
|
|
|
|
(15,979
|
)
|
Other
comprehensive loss for the year
|
|
|
-
|
|
|
|
-
|
|
|
|
(29
|
)
|
|
|
(29
|
)
|
Transactions
with owners in their capacity as owners
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Issuance
new shares
|
|
|
24,840
|
|
|
|
-
|
|
|
|
-
|
|
|
|
24,840
|
|
Balance
at 31 January 2017
|
|
|
27,948
|
|
|
|
(34,838
|
)
|
|
|
(2,154
|
)
|
|
|
(9,044
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at 1 February 2017
|
|
|
27,948
|
|
|
|
(34,838
|
)
|
|
|
(2,154
|
)
|
|
|
(9,044
|
)
|
Loss
for the year
|
|
|
-
|
|
|
|
(37,593
|
)
|
|
|
-
|
|
|
|
(37,593
|
)
|
Other
comprehensive income for the year
|
|
|
-
|
|
|
|
-
|
|
|
|
148
|
|
|
|
148
|
|
Transactions
with owners in their capacity as owners
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance new
shares
|
|
|
22,990
|
|
|
|
-
|
|
|
|
-
|
|
|
|
22,990
|
|
Value
of conversion rights - convertible notes
|
|
|
17,789
|
|
|
|
-
|
|
|
|
-
|
|
|
|
17,789
|
|
Balance
at 31 January 2018
|
|
|
68,727
|
|
|
|
(72,431
|
)
|
|
|
(2,006
|
)
|
|
|
(5,710
|
)
|
Naked
Brand Group Limited
ACN
619 054 938
Consolidated
Statements of Changes in Equity
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017 and 30 June 2016
|
|
Ordinary
Shares
NZ$000’s
|
|
|
Retained
Earnings/ (Accumulated Losses)
NZ$000’s
|
|
|
Foreign
Currency Translation Reserve
NZ$000’s
|
|
|
Total
NZ$000’s
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at 1 February 2018
|
|
|
68,727
|
|
|
|
(72,431
|
)
|
|
|
(2,006
|
)
|
|
|
(5,710
|
)
|
Loss
for the year
|
|
|
-
|
|
|
|
(49,220
|
)
|
|
|
-
|
|
|
|
(49,220
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive income for the year
|
|
|
-
|
|
|
|
-
|
|
|
|
(7
|
)
|
|
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transactions
with owners in their capacity as owners
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance new
shares
|
|
|
40,228
|
|
|
|
-
|
|
|
|
|
|
|
|
40,228
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
new shares from business combination Naked
|
|
|
14,196
|
|
|
|
|
|
|
|
|
|
|
|
14,196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
new shares from business combination FOH
|
|
|
6,873
|
|
|
|
|
|
|
|
|
|
|
|
6,873
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value
of conversion rights - convertible notes
|
|
|
4,159
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
at 31 January 2019
|
|
|
134,183
|
|
|
|
(121,651
|
)
|
|
|
(2,013
|
)
|
|
|
10,519
|
|
The
above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Naked
Brand Group Limited
ACN
619 054 938
Consolidated
Statements of Cash Flows
For
the Year Ended 31 January 2019, 31 January 2018, 31 January 2017 and 30 June 2016
|
|
Note
|
|
For
the Year Ended 31 January 2019
NZ$000’s
|
|
|
For
the Year Ended 31 January 2018
NZ$000’s
|
|
|
For
the 7 Months Ended 31 January 2017
NZ$000’s
|
|
|
For
the Year Ended 30 June 2016
NZ$000’s
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receipts
from customers
|
|
|
|
|
140,736
|
|
|
|
159,042
|
|
|
|
92,066
|
|
|
|
160,880
|
|
Payments
to suppliers and employees
|
|
|
|
|
(149,750
|
)
|
|
|
(163,304
|
)
|
|
|
(105,389
|
)
|
|
|
(165,708
|
)
|
Income
taxes paid
|
|
|
|
|
(420
|
)
|
|
|
146
|
|
|
|
(195
|
)
|
|
|
(530
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
cash (outflow) from operating activities
|
|
35
|
|
|
(9,434
|
)
|
|
|
(4,116
|
)
|
|
|
(13,518
|
)
|
|
|
(5,040
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment
for intangible asset
|
|
|
|
|
(151
|
)
|
|
|
(118
|
)
|
|
|
(351
|
)
|
|
|
(475
|
)
|
Payments
for property, plant and equipment
|
|
|
|
|
(2,585
|
)
|
|
|
(2,194
|
)
|
|
|
(723
|
)
|
|
|
(2,703
|
)
|
Proceeds
from business combination, net of cash acquired
|
|
|
|
|
870
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
cash (outflow) from investing activities
|
|
|
|
|
(1,867
|
)
|
|
|
(2,312
|
)
|
|
|
(1,074
|
)
|
|
|
(3,178
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from
issue of shares
|
|
|
|
|
23,248
|
|
|
|
22,721
|
|
|
|
-
|
|
|
|
-
|
|
Proceeds
from borrowings - Bank
|
|
|
|
|
-
|
|
|
|
463
|
|
|
|
1,940
|
|
|
|
62,127
|
|
Proceeds
from borrowings - Convertible notes issue
|
|
|
|
|
-
|
|
|
|
4,521
|
|
|
|
16,474
|
|
|
|
-
|
|
Repayment
of borrowings - Bank
|
|
|
|
|
(18,489
|
)
|
|
|
(9,684
|
)
|
|
|
(2,832
|
)
|
|
|
(46,986
|
)
|
Debt
issuance costs
|
|
|
|
|
(322
|
)
|
|
|
(107
|
)
|
|
|
(367
|
)
|
|
|
(750
|
)
|
Interest
paid
|
|
|
|
|
(2,269
|
)
|
|
|
(3,418
|
)
|
|
|
(2,133
|
)
|
|
|
(3,140
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
cash inflow from financing activities
|
|
|
|
|
2,168
|
|
|
|
14,496
|
|
|
|
13,082
|
|
|
|
11,251
|
|
Naked
Brand Group Limited
ACN
619 054 938
Consolidated
Statements of Cash Flows
For
the Year Ended 31 January 2019, 31 January 2018, 31 January 2017 and 30 June 2016
Net
increase/(decrease) in cash and cash equivalents held
|
|
|
|
|
(9,134
|
)
|
|
|
8,068
|
|
|
|
(1,510
|
)
|
|
|
3,033
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents at beginning of year
|
|
|
|
|
10,739
|
|
|
|
2,644
|
|
|
|
4,193
|
|
|
|
1,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effects
of exchange rate changes on cash and cash equivalents
|
|
|
|
|
355
|
|
|
|
27
|
|
|
|
(39
|
)
|
|
|
(86
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents at end of the half year
|
|
11
|
|
|
1,962
|
|
|
|
10,739
|
|
|
|
2,644
|
|
|
|
4,193
|
|
The
above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
Description
of business
Naked
Brand Group Limited (“the Group”) is a designer, distributor, wholesaler and retailer of women’s and men’s
intimates apparel globally. The Group sells its merchandise through retail and outlet stores in New Zealand and Australia, wholesale
operations in New Zealand, Australia, the United States and Europe, and through online channels. The Group operates both licenced
and owned brands, including the following:
Licenced
brands:
Heidi
Klum, Fredericks of Hollywood
Owned
brands:
Pleasure
State, Davenport, Lovable, Bendon, Fayreform, Naked, VaVoom, Evollove, Hickory
The
financial report covers Naked Brand Group Limited and its controlled entities (‘the Group’). Naked Brand Group Limited
is a for-profit Group, incorporated and domiciled in Australia.
During
the year the following significant changes occurred, of which there is further disclosure contained within this report:
|
●
|
On
19th June 2018, Bendon Limited (Bendon) and Naked Brand Group Inc. (Naked) completed a business combination pursuant
to the Merger Agreement.
|
|
●
|
On
30th June 2018, the licence agreement with Stella McCartney was terminated
|
|
●
|
On
15th November 2018 the Group entered into a Stock Purchase Agreement with the shareholders of FOH Online Corp Inc
(FOH)
|
The
financial report was authorised for issue by the Directors on 31 December 2019.
Comparatives
are consistent with prior years, unless otherwise stated.
The
amounts in the financial statements have been rounded to the nearest thousand dollars.
1
|
Basis
of Preparation
|
|
|
|
These
general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board and the Corporations Act 2001. Naked Brand Group Limited is a for-profit
entity for the purpose of preparing the financial statements.
|
|
|
|
The
consolidated financial statements of the Group also complies with International Financial Reporting Standards (IFRS) as issued
by the International Accounting Standards Board (IASB).
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
1
|
Basis
of Preparation
|
|
|
|
Naked
Brand Group Limited (The Group) acquired all the share capital of Bendon Limited as part of a corporate reorganization on
19 June 2018. Following the reorganization, Naked Brand Group Limited completed a merger with Naked Brand Group Inc. which
for accounting purposes was treated as an acquisition such that Naked brand group limited is deemed the accounting acquirer
of the Naked Brand Group Inc. The reorganization of the ownership of Bendon Limited results in the financial statements of
the consolidated Naked Brand Group Limited being a continuation of the Bendon Limited financial statements. The consolidated
financial report of Naked Brand Limited represents a full year of Bendon Limited’s financial results plus Naked Brand
Group Inc. from the date of acquisition being 19 June 2018 to 31 January 2019. The comparative period represents Bendon Limited
and its controlled entities only.
|
|
(a)
|
Historical
cost convention
|
|
|
|
|
|
The
financial statements are based on historical costs, except for the measurement at fair value of selected financial assets
and financial liabilities.
|
2
|
Summary
of Significant Accounting Policies
|
|
(a)
|
Going
concern
|
|
|
|
|
|
The
financial statements have been prepared on the basis of going concern which contemplates continuity of normal business activities
and the realisation of assets and settlement of liabilities in the ordinary course of business.
|
|
|
|
|
|
For
the financial year ended 31 January 2019 the Group experienced a loss after income tax from continuing operations of NZ$49.227million
(2018: NZ$37.445million) and operating cash outflows of NZ$9.434 million (2018: NZ$4.116million). It also is in a net current
liability position of $NZ29.426 million (2018: NZ$20.752million) and a positive net asset position of NZ$10.519 million (2018:
net liability position of NZ$5.710million).
|
|
|
|
|
|
The
losses in the year ended 31 January 2019 were a result of reduced revenue from wholesale customers, increased rebates and
discounts, and the plateauing of sales in retail outlets believed to be due to the stores and stockists not having new high
margin inventory. The business is experiencing challenging trading conditions which have been impacted by the cancellation
of the Stella McCartney licence held by the Group which expired on 30 June 2018, the lack of working capital to purchase sufficient
levels of inventory required for trading, reduced customer foot traffic in retail stores and outlets, and a reduction of revenue
from wholesale customers. The business also incurred NZ$10.075 million of non-trading costs in relation to brand transition,
restructure, and transaction costs associated with listing the Group on the Nasdaq stock exchange. The Group also has trade
creditors that are trading beyond their original credit terms.
|
|
|
|
|
|
The
Group has also breached its Bank debt loan covenants during financial year, and is the process of extending their facilities
which are currently due on 31 January 2020 to provide the Group and the Bank time to consider a refinance of the facility
to a longer term to assist the group continue as a going concern.
|
|
|
|
|
|
In
consequent to the challenging trading conditions and the negative working capital the business raised NZ$24 million of funds
in the form of issued capital and convertible notes over the course of the financial year and generated further working capital
by reducing inventory by NZ$9.993million. The Group used the funds to reduce the bank debt from NZ$38.489 million to NZ$20
million, reduce long overdue trade creditors, fund operating losses, reduce costs, rebuild higher margin inventory, recruit
new staff, and pay the costs of listing on the Nasdaq stock exchange.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
2
|
Summary
of Significant Accounting Policies
|
|
(a)
|
Going
concern
|
|
|
|
|
|
It
is expected the group will need to continue to fund losses through to the start of the year ending 31 January 2022. This capital
raising/recapitalisation is continuing, and management had raised US$32.4 million between March 2019 and the date of this
report. At the date of this report management is intending on raising up to a further US$15 million. The Group must complete
the fundraising to finalise the recapitalization plan and continue as a going concern.
|
|
|
|
|
|
As
part of the discussions to renegotiate the Bank facilities the Bank appointed Korda Mentha to review the cash flow and working
capital history and forecasts. Korda Mentha produced a report which is consistent with the information in this note and the
Bank has advised they will continue to monitor the Group’s performance during the Bank debt renegotiation process. The
Directors expect the Bank to offer a new two year facility. The offer of a new Bank facility is dependent on the Group achieving
inventory covenants set by the Bank, and the Bank being satisfied with the raising of the remaining capital planned
of US$15 million.
|
|
|
|
|
|
Despite
the ongoing losses, reduced cash flow and cash facilities, and the other negative financial conditions, the Directors are
confident that the Group will continue as a going concern. However, while the Directors are confident of continuing as a going
concern and meeting its debt obligation to its Bank and creditor commitments as they fall due, the going concern is dependent
upon the Directors and Group being successful in:
|
|
●
|
Raising
further funding before 28 February 2020 in order to meet all debts due in the 12 months after signing of these financial statements;
|
|
●
|
Generating
sufficient sales and increasing gross margins and reducing overheads in line with forecasts;
|
|
●
|
Having
sufficient funds to maintain a positive cashflow position, and to reduce bank debt in line with agreed bank amortisation;
|
|
●
|
Continuing
to receive support from creditors to delay payment of overdue amounts until the Group has adequate cash flow to commence a
repayment arrangement or repay the debts in full; and
|
|
●
|
Renegotiating
the current bank facilities of NZ$20 million to a facility that is at least a 12 month facility.
|
As
a result, the viability of the Group is dependent on the above matters. The dependence on these matters raise substantial doubt
about its ability to continue as a going concern and therefore whether they will realise their assets and extinguish their liabilities
in the normal course of business and at the amounts stated in the financial report.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
2
|
Summary
of Significant Accounting Policies
|
|
(a)
|
Going
concern
|
|
|
|
|
|
However,
the Directors’ believe that the Group will be successful in the above matters and, accordingly, have prepared the report
on a going concern basis.
|
|
|
|
|
(b)
|
Basis
for consolidation
|
|
|
|
|
|
Subsidiaries
|
|
|
|
|
|
Subsidiaries
are all entities (including structured entities) over which the group has control. The group controls an entity when the group
is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which
control is transferred to the group. They are deconsolidated from the date that control ceases.
|
|
|
|
|
|
Intercompany
transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are
also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group.
|
|
|
|
|
|
Non-controlling
interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit or loss,
statement of comprehensive income, statement of changes in equity and balance sheet respectively.
|
|
|
|
|
|
When
the group ceases to consolidate or equity account for an investment because of a loss of control, joint control or significant
influence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised
in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the
retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other
comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets
or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit
or loss.
|
|
|
|
|
|
If
the ownership interest in a joint venture or an associate is reduced but joint control or significant influence is retained,
only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or
loss where appropriate.
|
|
|
|
|
(c)
|
Business
combinations
|
|
|
|
|
|
Business
combinations are accounted for by applying the acquisition method which requires an acquiring entity to be identified in all
cases. The acquisition date under this method is the date that the acquiring entity obtains control over the acquired entity.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
2
|
Summary
of Significant Accounting Policies
|
|
(c)
|
Business
combinations
|
|
|
|
|
|
The
fair value of identifiable assets and liabilities acquired are recognised in the consolidated financial statements at the
acquisition date.
|
|
|
|
|
|
Goodwill
or a gain on bargain purchase may arise on the acquisition date, this is calculated by comparing the consideration transferred
and the amount of non-controlling interest in the acquiree with the fair value of the net identifiable assets acquired. Where
consideration is greater than the net assets acquired, the excess is recorded as goodwill. Where the net assets acquired are
greater than the consideration, the measurement basis of the net assets are reassessed and then a gain from bargain purchase
recognised in profit or loss.
|
|
|
|
|
|
All
acquisition-related costs are recognised as expenses in the periods in which the costs are incurred except for costs to issue
debt or equity securities.
|
|
|
|
|
|
Any
contingent consideration which forms part of the combination is recognised at fair value at the acquisition date. If the contingent
consideration is classified as equity then it is not remeasured and the settlement is accounted for within equity. Otherwise
subsequent changes in the value of the contingent consideration liability are measured through profit or loss.
|
|
|
|
|
(d)
|
Income
Tax
|
|
|
|
|
|
The
tax expense/(benefit) recognised in the consolidated statements of profit or loss and other comprehensive income comprises
of current income tax expense plus deferred tax expense/(benefit).
|
|
|
|
|
|
Current
tax is the amount of income taxes payable/(recoverable) in respect of the taxable profit/(loss) for the period and is measured
at the amount expected to be paid to/(recovered from) the taxation authorities, using the tax rates and laws that have been
enacted or substantively enacted by each jurisdiction by the end of the reporting period. Current tax liabilities/(assets)
are measured at the amounts expected to be paid to/(recovered from) the relevant taxation authority.
|
|
|
|
|
|
Deferred
tax is provided on temporary differences which are determined by comparing the carrying amounts of tax bases of assets and
liabilities to the carrying amounts in the consolidated financial statements.
|
|
|
|
|
|
Deferred
tax is not provided for the following:
|
|
●
|
The
initial recognition of an asset or liability in a transaction that is not a business combination and at the time of the transaction,
affects neither accounting profit nor taxable profit/(tax loss).
|
|
●
|
Taxable
temporary differences arising on the initial recognition of goodwill.
|
|
●
|
Temporary
differences related to investment in subsidiaries, associates and jointly controlled entities to the extent that the Group
is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in
the foreseeable future.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
2
|
Summary
of Significant Accounting Policies
|
|
(d)
|
Income
Tax
|
|
|
|
|
|
Deferred
tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised
or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by each jurisdiction
by the end of the reporting period.
|
|
|
|
|
|
Deferred
tax assets are recognised for all deductible temporary differences and unused tax losses to the extent that it is probable
that taxable profit will be available against which the deductible temporary differences and losses can be utilised.
|
|
|
|
|
|
Current
and deferred tax is recognised as income or an expense and included in profit or loss for the period except where the tax
arises from a transaction which is recognised in other comprehensive income or equity, in which case the tax is recognised
in other comprehensive income or equity respectively.
|
|
|
|
|
|
In
determining the amount of current and deferred income tax, the Group takes into account the impact of uncertain income tax
positions and whether additional taxes and interest may be due. This assessment relies on estimates and assumptions and may
involve a series of judgements about future events. New information may become available that causes the Group to change its
judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact the income tax expense
in the period that such a determination is made.
|
|
|
|
|
(e)
|
Leases
|
|
|
|
|
|
Leases
of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal
ownership that are transferred to entities in the Group, are classified as finance leases.
|
|
|
|
|
|
Finance
leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased
property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are
allocated between the reduction of the lease liability and the lease interest expense for the period.
|
|
|
|
|
|
Lease
payments for operating leases, where substantially all of the risks and benefits remain with the lessor, are charged as expenses
on a straight-line basis over the life of the lease term.
|
|
|
|
|
|
Lease
incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the
lease term.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
2
|
Summary
of Significant Accounting Policies
|
|
(f)
|
Revenue
and other income
|
|
|
|
|
|
Sale
of goods
|
|
|
|
|
|
Sales
of goods through retail stores, e-commerce and wholesale channels are recognised when control of the products have been transferred
to the customer which is a point in time. For wholesale and e-commerce sales, risks and rewards are transferred when goods
are delivered to customers, and therefore reflects an estimate of shipments that have not been received at year end based
on shipping terms and historical delivery times. The Group also provides a reserve for projected merchandise returns based
on prior experience.
|
|
|
|
|
|
The
Group sells gift cards to customers. The Group recognises revenue from gift cards when they are redeemed by the customers.
In addition, the Group recognises revenue on all of it’s unredeemed gift cards when the gift cards have expired.
|
|
|
|
|
|
(i)
Sale of goods - wholesale
|
|
|
|
|
|
The
Group sells a range of lingerie products in the wholesale market. Sales are recognised when control of the products has transferred,
being when the products are delivered to the wholesaler, the wholesaler has full discretion over the channel and price to
sell the products, and there is no unfulfilled obligation that could affect the wholesaler’s acceptance of the products.
Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been
transferred to the wholesaler, and either the wholesaler has accepted the products in accordance with the sales contract,
the acceptance provisions have lapsed, or the group has objective evidence that all criteria for acceptance have been satisfied.
|
|
|
|
|
|
Revenue
from these sales is recognised based on the price specified in the contract, net of the estimated volume discounts. The estimates
of discount is based on the trading terms in the contracts, and revenue is only recognised to the extent that it is highly
probable that a significant reversal will not occur. A refund liability (included in trade and other payables) is recognised
for expected volume payable to customers in relation to sales made until the end of the reporting period. The Group’s
obligation to provide a refund for faulty products under the standard trading terms is recognised as a provision.
|
|
|
|
|
|
(ii)
Sale of goods - retail/e-commerce
|
|
|
|
|
|
The
group operates a chain of retail stores and e-commerce websites selling lingerie products. Revenue from the sale of goods
is recognised when a group entity sells a product to the customer.
|
|
|
|
|
|
Payment
of the transaction price is due immediately when the customer purchases the product. It is the group’s policy to sell
its products to the end customer with a right of return within 30 days.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
2
|
Summary
of Significant Accounting Policies
|
|
(f)
|
Revenue
and other income
|
|
|
|
|
|
Therefore,
a refund liability (included in trade and other payables) and a right to the returned goods (included in inventory if deemed
saleable) are recognised for the products expected to be returned. Accumulated experience is used to estimate such returns
at the time of sale at a portfolio level (expected value method). Because the number of products returned has been steady
for years, it is highly probable that a significant reversal in the cumulative revenue recognised will not occur. The validity
of this assumption and the estimated amount of returns are reassessed at each reporting date.
|
|
|
|
|
|
Interest
revenue
|
|
|
|
|
|
Interest
is recognised using the effective interest method.
|
|
|
|
|
|
Other
income
|
|
|
|
|
|
Other
income is recognised on an accruals basis when the Group is entitled to it.
|
|
|
|
|
(g)
|
Brand
management, administrative and corporate expenses
|
|
|
|
|
|
Corporate
expenses includes head office costs such as human resources, finance team and rental costs. Administrative expenses includes
depreciation and amortisation, as well as professional accounting fees. Brand management expenses includes other costs incurred
in selling products, including advertising, design and retail store occupancy and payroll.
|
|
|
|
|
(h)
|
Borrowing
costs
|
|
|
|
|
|
Borrowing
costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily
take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until
such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary
investment of specific borrowing pending their expenditure on qualifying assets is deducted from the borrowing costs eligible
for capitalisation.
|
|
|
|
|
|
All
other borrowing costs are recognised as an expense in the period in which they are incurred.
|
|
|
|
|
(i)
|
Inventories
|
|
|
|
|
|
Inventories
are measured at the lower of cost and net realisable value. Cost of inventory is determined using the weighted average costs
basis and is net of any rebates and discounts received. Net realisable value represents the estimated selling price for inventories
less costs necessary to make the sale. Net realisable value is estimated using the most reliable evidence available at the
reporting date and inventory is written down through an obsolescence provision if necessary.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
2
|
Summary
of Significant Accounting Policies
|
|
(j)
|
Property,
plant and equipment
|
|
|
|
|
|
Plant
and equipment
|
|
|
|
|
|
Plant
and equipment are measured using the cost model.
|
|
|
|
|
|
Under
the cost model the asset is carried at its cost less any accumulated depreciation and any impairment losses. Costs include
purchase price and other directly attributable costs associated with locating the asset to the installation site, where applicable.
|
|
|
|
|
|
Depreciation
|
|
|
|
|
|
Property,
plant and equipment, is depreciated on a straight-line basis over the assets useful life to the Group, commencing when the
asset is ready for use.
|
|
|
|
|
|
The
estimated useful lives used for each class of depreciable asset are shown below:
|
Fixed
asset class
|
|
Useful
life
|
|
|
|
Leasehold
improvements
|
|
1
- 10 years
|
Plant,
furniture, fittings and motor vehicles
|
|
3
- 7 years
|
At
the end of each annual reporting period, the depreciation method, useful life and residual value of each asset is reviewed. Any
revisions are accounted for prospectively as a change in accounting estimate.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
2
|
Summary
of Significant Accounting Policies
|
|
(k)
|
Financial
instruments
|
|
|
|
|
|
Financial
instruments are recognised initially using trade date accounting, i.e. on the date that the Group becomes party to the contractual
provisions of the instrument.
|
|
|
|
|
|
On
initial recognition, all financial instruments are measured at fair value plus transaction costs (except for instruments measured
at fair value through profit or loss where transaction costs are expensed as incurred).
|
|
|
|
|
|
Financial
Assets
|
|
|
|
|
|
(i)
Classification
|
|
|
|
|
|
From
1 February 2018, the group classifies its financial assets in the following measurement categories:
|
|
●
|
those
to be measured subsequently at fair value (either through OCI or through profit or loss), and
|
|
●
|
those
to be measured at amortised cost.
|
|
|
The
classification depends on the entity’s business model for managing the financial assets and the contractual terms of
the cash flows.
|
|
|
|
|
|
For
assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity
instruments that are not held for trading, this will depend on whether the group has made an irrevocable election at the time
of initial recognition to account for the equity investment at fair value through other comprehensive income (FVOCI).
|
|
|
|
|
|
The
group reclassifies debt investments when and only when its business model for managing those assets changes.
|
|
|
|
|
|
(ii)
Recognition and derecognition
|
|
|
|
|
|
Regular
way purchases and sales of financial assets are recognised on trade-date, the date on which the group commits to purchase
or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have
expired or have been transferred and the group has transferred substantially all the risks and rewards of ownership.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
2
|
Summary
of Significant Accounting Policies
|
|
(k)
|
Financial
instruments
|
|
|
|
|
|
(iii)
Measurement
|
|
|
|
|
|
At
initial recognition, the group measures a financial asset at its fair value plus, in the case of a financial asset not at
fair value through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial
asset. Transaction costs of financial assets carried at FVPL are expensed in profit or loss.
|
|
|
|
|
|
Financial
assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment
of principal and interest.
|
|
|
|
|
|
Debt
instruments
|
|
|
|
|
|
Subsequent
measurement of debt instruments depends on the group’s business model for managing the asset and the cash flow characteristics
of the asset. There are three measurement categories into which the group classifies its debt instruments:
|
|
●
|
Amortised
cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal
and interest are measured at amortised cost. Interest income from these financial assets is included in finance income using
the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and
presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as separate
line item in the statement of profit or loss.
|
|
|
|
|
●
|
FVOCI:
Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’
cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are
taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and
losses which are recognised in profit or loss. When the financial asset is derecognised, the cumulative gain or loss previously
recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/(losses). Interest income from
these financial assets is included in finance income using the effective interest rate method. Foreign exchange gains and
losses are presented in other gains/(losses) and impairment expenses are presented as separate line item in the statement
of profit or loss.
|
|
|
|
|
●
|
FVPL:
Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt investment
that is subsequently measured at FVPL is recognised in profit or loss and presented net within other gains/(losses) in the
period in which it arises.
|
Equity
instruments
The
group subsequently measures all equity investments at fair value. Where the group’s management has elected to present fair
value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to
profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognised in profit
or loss as other income when the group’s right to receive payments is established.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
2
|
Summary
of Significant Accounting Policies
|
|
(k)
|
Financial
instruments
|
|
|
|
|
|
Changes
in the fair value of financial assets at FVPL are recognised in other gains/(losses) in the statement of profit or loss as
applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported
separately from other changes in fair value.
|
|
|
|
|
|
(iv)
Impairment
|
|
|
|
|
|
From
1 February 2018, the group assesses on a forward looking basis the expected credit losses associated with its debt instruments
carried at amortised cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase
in credit risk.
|
|
|
|
|
|
For
trade receivables, the group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses
to be recognised from initial recognition of the receivables.
|
|
|
|
|
|
(v)
Subsequent measurement
|
|
|
|
|
|
If
there is objective evidence that an impairment loss on financial assets carried at amortised cost has been incurred, the amount
of the loss is measured as the difference between the asset’s carrying amount and the present value of the estimated
future cash flows discounted at the financial assets original effective interest rate.
|
|
|
|
|
|
Subsequent
recoveries of amounts previously written off are credited against other expenses in profit or loss.
|
|
|
|
|
|
Financial
liabilities
|
|
|
|
|
|
Financial
liabilities are classified as either financial liabilities ‘at fair value through profit or loss’ or other financial
liabilities depending on the purpose for which the liability was acquired. Although the Group uses derivative financial instruments
in economic hedges of currency and interest rate risk, it does not hedge account for these transactions.
|
|
|
|
|
|
The
Group’s financial liabilities include borrowings, trade and other payables (including finance lease liabilities), which
are measured at amortised cost using the effective interest rate method.
|
|
|
|
|
|
All
of the Group’s derivative financial instruments that are not designated as hedging instruments are accounted for at
fair value through profit or loss.
|
|
|
|
|
(l)
|
Impairment
of non-financial assets
|
|
|
|
|
|
At
the end of each reporting period the Group determines whether there is an evidence of an impairment indicator for non-financial
assets.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
2
|
Summary
of Significant Accounting Policies
|
|
(l)
|
Impairment
of non-financial assets
|
|
|
|
|
|
Where
an indicator exists and regardless for goodwill, indefinite life intangible assets and intangible assets not yet available
for use, the recoverable amount of the asset is estimated.
|
|
|
|
|
|
Where
assets do not operate independently of other assets, the recoverable amount of the relevant cash-generating unit (CGU) is
estimated.
|
|
|
|
|
|
The
recoverable amount of an asset or CGU is the higher of the fair value less costs of disposal and the value in use. Value in
use is the present value of the future cash flows expected to be derived from an asset or cash-generating unit.
|
|
|
|
|
|
Where
the recoverable amount is less than the carrying amount, an impairment loss is recognised in profit or loss.
|
|
|
|
|
|
Reversal
indicators are considered in subsequent periods for all assets which have suffered an impairment loss, except for goodwill.
|
|
|
|
|
(m)
|
Cash
and cash equivalents
|
|
|
|
|
|
For
the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held
at call with financial institutions, other short-term, highly liquid investments with original maturities of three months
or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in
value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
|
|
|
|
|
(n)
|
Trade
receivables
|
|
|
|
|
|
Trade
receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest
method, less provision for impairment.
|
|
|
|
|
(o)
|
Trade
and other payables
|
|
|
|
|
|
These
amounts represent liabilities for goods and services provided to the group prior to the end of financial year which are unpaid.
The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current
liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their
fair value and subsequently measured at amortised cost using the effective interest method.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
2
|
Summary
of Significant Accounting Policies
|
|
(p)
|
Intangibles
|
|
|
|
|
|
Goodwill
|
|
|
|
|
|
Goodwill
is carried at cost less accumulated impairment losses. Goodwill is calculated as the excess of the sum of:
|
|
i)
|
the
consideration transferred;
|
|
ii)
|
any
non-controlling interest; and
|
|
iii)
|
the
acquisition date fair value of any previously held equity interest;
|
|
over
the acquisition date fair value of net identifiable assets acquired in a business combination.
|
|
|
|
Patents
and licences
|
|
|
|
Separately
acquired patents and licences are shown at historical cost. Licenses and customer contracts acquired in a business combination
are recognised at fair value at the acquisition date. They have a finite useful life and are subsequently carried at cost
less accumulated amortisation and impairment losses. Licence fees have an estimated useful life of 5 - 50 years.
|
|
|
|
Software
|
|
|
|
Software
has a finite life and is carried at cost less any accumulated amortisation and impairment losses. It has an estimated useful
life of between one and three years.
|
|
|
|
Brands
|
|
|
|
Brand
assets relate to brands owned by the Group that have arisen on historical acquisitions. These assets were initially measured
at fair value.
|
|
|
|
Brands
are considered to have an indefinite life and are therefore not amortised. They are considered to have indefinite lives because
there is no foreseeable limit to the period over which the asset is expected to generate net cash flows for the entity. The
brands have been in existence for many years, are well established and show no signs of deteriorating. They are assessed for
impairment annually or more frequently if impairment indicators exist.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
2
|
Summary
of Significant Accounting Policies
|
|
(p)
|
Intangibles
|
|
|
|
|
|
Amortisation
|
|
|
|
|
|
Amortisation
is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than
goodwill and brands, from the date that they are available for use.
|
|
|
|
|
|
Amortisation
methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
|
|
|
|
|
|
Goodwill
and indefinite life brands are not amortised but are tested for impairment annually or more frequently if impairment indicators
exist. Goodwill is allocated to the Group’s cash generating units or groups of cash generating units, which represent
the lowest level at which goodwill is monitored but where such level is not larger than an operating segment. Gains and losses
on the disposal of an entity include the carrying amount of goodwill related to the entity sold.
|
|
|
|
|
(q)
|
Employee
benefits
|
|
(i)
|
Short-term
obligations
|
|
|
|
|
|
Liabilities
for wages and salaries, including non-monetary benefits and accumulating sick leave that are expected to be settled wholly
within 12 months after the end of the period in which the employees render the related service are recognised in respect of
employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the
liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
|
|
|
|
|
(ii)
|
Other
long-term employee benefit obligations
|
|
|
|
|
|
The
liabilities for long service leave and annual leave are not expected to be settled wholly within 12 months after the end of
the period in which the employees render the related service. They are therefore measured as the present value of expected
future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected
unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and
periods of service. Expected future payments are discounted using market yields at the end of the reporting period of high-quality
corporate bonds with terms and currencies that match, as closely as possible, the estimated future cash outflows. Remeasurements
as a result of experience adjustments and changes in actuarial assumptions are recognised in profit or loss.
|
|
|
|
|
|
The
obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to
defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected
to occur.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
2
|
Summary
of Significant Accounting Policies
|
|
(r)
|
Provisions
|
|
|
|
|
|
Provisions
are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable
that an outflow of economic benefits will result and that outflow can be reliably measured.
|
|
|
|
|
|
Provisions
are measured at the present value of management’s best estimate of the outflow required to settle the obligation at
the end of the reporting period. The discount rate used is a pre-tax rate that reflects current market assessments of the
time value of money and the risks specific to the liability. The increase in the provision due to the unwinding of the discount
is taken to finance costs in the consolidated statements of profit or loss and other comprehensive income.
|
|
|
|
|
|
Provisions
recognised represent the best estimate of the amounts required to settle the obligation at the end of the reporting period.
|
|
(i)
|
Lease
incentive provision
|
|
|
|
|
|
Lease
contributions include payment for improvements initially funded by the landlord. The improvement asset is capitalised and
a provision for the amount of landlord contribution is recognised. The provision is released on a monthly basis over the term
of the lease of the property.
|
|
|
|
|
(ii)
|
Onerous
contract provision
|
|
|
|
|
|
The
Group provides for future losses on long-term contracts where it is considered probable that the contract costs are likely
to exceed revenues in future years. A provision is required for the present value of future losses. Estimating these future
losses involves a number of assumptions about the achievement of contract performance targets and the likely levels of future
cost escalation over time.
|
|
|
|
|
(iii)
|
Make
good provision
|
|
|
|
|
|
The
Group is required to restore the lease premises of various retail stores to their original condition at the end of the respective
lease terms. Provisions for make good obligations are recognised when the group has a present legal or constructive obligation
as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the
amount can be reliably estimated. A provision is recognised for the present value of the estimated expenditure required to
remove any leasehold improvements. These costs have been capitalised as part of the cost of leasehold improvements and are
amortised over the lease term.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
2
|
Summary
of Significant Accounting Policies
|
|
(s)
|
Earnings/(loss)
per share
|
|
|
|
|
|
(i)
Basic earnings/(loss) per share
|
|
|
|
|
|
Basic
earnings/(loss) per share is calculated by dividing:
|
|
●
|
the
profit/(loss) attributable to owners of the Group, excluding any costs of servicing equity other than ordinary shares
|
|
●
|
by
the weighted average number of ordinary shares outstanding during the financial year.
|
|
(ii)
Diluted earnings/(loss) per share
|
|
|
|
Diluted
earnings/(loss) per share adjusts the figures used in the determination of basic earnings per share to take into account:
|
|
●
|
the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and
|
|
●
|
the
weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive
potential ordinary shares.
|
|
|
For
periods in which the Group has reported net losses, diluted net loss per share attributable to common shareholders is the
same as basic net loss per share attributable to common stockholders, since their impact would be anti-dilutive to the calculation
of net loss per share.
|
|
|
|
|
(t)
|
Borrowings
|
|
|
|
|
|
Borrowings
are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised
cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or
loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities
are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be
drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable
that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised
over the period of the facility to which it relates.
|
|
|
|
|
|
Borrowings
are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The
difference between the carrying amount of a financial liability that has been extinguished or transferred to another party
and the consideration paid, including any non cash assets transferred or liabilities assumed, is recognised in profit or loss
as other income or finance costs.
|
|
|
|
|
|
Where
the terms of a financial liability are renegotiated and the entity issues equity instruments to a creditor to extinguish all
or part of the liability (debt for equity swap), a gain or loss is recognised in profit or loss, which is measured as the
difference between the carrying amount of the financial liability and the fair value of the equity instruments issued.
|
|
|
|
|
|
Borrowings
are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for
at least 12 months after the reporting period.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
2
|
Summary
of Significant Accounting Policies
|
|
(u)
|
Convertible
Notes
|
|
|
|
|
|
On
issuance of the convertible notes, an assessment is made to determine whether the convertible notes contain an equity instrument
or whether the whole instrument should be classified as a financial liability.
|
|
|
|
|
|
When
it is determined that the whole instrument is a financial liability and no equity instrument is identified (for example for
foreign-currency-denominated convertibles notes), the conversion option is separated from the host debt and classified as
a derivative liability. The carrying value of the host contract (a contract denominated in a foreign currency) at initial
recognition is determined as the difference between the consideration received and the fair value of the embedded derivative.
The host contract is subsequently measured at amortised cost using the effective interest rate method. The embedded derivative
is subsequently measured at fair value at the end of each reporting period through the profit and loss. The convertible note
and the derivative are presented as a single number on the balance sheet within interest-bearing loans and borrowings.
|
|
|
|
|
|
When
it is determined that the instrument contains an equity component based on the terms of the contract, on issuance of the convertible
notes, the fair value of the liability component is determined using a market rate for an equivalent non-convertible bond.
This amount is classified as a financial liability measured at amortised cost (net of transaction costs) until it is extinguished
on conversion or redemption. The remainder of the proceeds is allocated to the conversion option that is recognised and included
in equity. Transaction costs are deducted from equity, net of associated income tax. The carrying amount of the conversion
option is not re-measured in subsequent years.
|
|
|
|
|
(v)
|
Share
capital
|
|
|
|
|
|
Ordinary
shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as
a deduction from equity, net of any tax effects.
|
|
|
|
|
(w)
|
Foreign
currency transactions and balances
|
|
|
|
|
|
Each
of the entities within the Group prepare their financial statements based on the currency of the primary economic environment
in which the entity operates (functional currency). The consolidated financial statements are presented in New Zealand dollars
which is the parent entity’s functional and presentation currency.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
2
|
Summary
of Significant Accounting Policies
|
|
(w)
|
Foreign
currency transactions and balances
|
|
|
|
|
|
Transaction
and balances
|
|
|
|
|
|
Foreign
currency transactions are recorded at the spot rate on the date of the transaction.
|
|
|
|
|
|
At
the end of the reporting period:
|
|
●
|
Foreign
currency monetary items are translated using the closing foreign currency rate;
|
|
●
|
Non-monetary
items that are measured at historical cost are translated using the exchange rate at the date of the transaction; and
|
|
●
|
Non-monetary
items that are measured at fair value are translated using the rate at the date when fair value was determined.
|
|
Exchange
differences arising on the settlement of monetary items or on translating monetary items at rates different from those at
which they were translated on initial recognition or in prior reporting periods are recognised through profit or loss, except
where they relate to an item of other comprehensive income or whether they are deferred in equity as qualifying hedges.
|
|
|
|
Group
companies
|
|
|
|
The
financial results and position of foreign operations whose functional currency is different from the Group’s presentation
currency are translated as follows:
|
|
●
|
assets
and liabilities are translated at period-end exchange rates prevailing at that reporting date;
|
|
●
|
income
and expenses are translated at average exchange rates for the period where the average rate approximates the rate at the date
of the transaction; and
|
|
●
|
retained
earnings are translated at the exchange rates prevailing at the date of the transaction.
|
|
Exchange
differences arising on translation of foreign operations are transferred directly to the Group’s foreign currency translation
reserve in the consolidated balance sheets. These differences are recognised in the consolidated statements of profit or loss
and other comprehensive income in the period in which the operation is disposed.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
2
|
Summary
of Significant Accounting Policies
|
|
(x)
|
New
and amended accounting standards adopted by the Group
|
|
|
|
|
|
A
number of new or amended accounting standards become applicable for the current reporting period and the Group had to change
it accounting policies as a result of adopting the following accounting standards.
|
|
|
|
|
|
-
IFRS 9 Financial Instruments
|
|
|
-
IFRS 15 Revenue from contract with customers
|
|
|
|
|
|
There
were no material impacts on adoption of IFRS 9 and IFRS 15. The other accounting standards did not have any impact on the
Group’s accounting policies and did not require retrospective adjustments.
|
|
|
|
|
(y)
|
New
Accounting Standards and Interpretations
|
|
|
|
|
|
Certain
new accounting standards and interpretations have been published that are not mandatory for 31 January 2018 reporting periods
and have not been early adopted by the Group. The Group’s assessment of the impact of these new standards and interpretations
is set out below.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
2
|
Summary
of Significant Accounting Policies
|
|
(y)
|
New
Accounting Standards and Interpretations
|
Title
of Standard
|
|
Nature
of change
|
|
Impact
|
|
Mandatory
application date/Date of adoption by Group
|
IFRS
16
Leases
|
|
The
IASB issued a new standard for leases. This will replace IAS 17
The
main impact on lessees is that almost all leases go on balance sheet. This is because the balance sheet distinction between
operating and finance leases is removed for lessees. Instead, under the new standard an asset (the right to use the leased
item) and a financial liability to pay rentals are recognised. The only exemptions are short-term and low-value leases.
|
|
Management
is currently assessing the impact of the new rules and believes the adoption of the provisions
of this update will have a material impact on the Group’s consolidated financial
statements.
The
new standard will require that we record a liability and a related asset on the balance sheet for our leased facilities.
|
|
Management
is currently assessing the impact of the new rules and believes the adoption of the provisions
of this update will have a material impact on the Group’s consolidated financial
statements.
Mandatory
for financial years commencing on or after 1 January 2019.
Expected
date of adoption by the Group: 1 February 2019.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
2
|
Summary
of Significant Accounting Policies
|
|
(y)
|
New
Accounting Standards and Interpretations
|
Title
of Standard
|
|
Nature
of change
|
|
Impact
|
|
Mandatory
application date/Date of adoption by Group
|
IFRC
23
Uncertainty
over Income Tax Treatments (IFRIC 23)
|
|
On
June 7, 2017, the IASB issued IFRIC 23, Uncertainty over Income Tax Treatments (“IFRIC 23”). IFRIC 23 clarifies
the application of recognition and measurement requirements in IAS 12, Income Taxes, when there is uncertainty over income
tax treatments. The IFRIC 23 interpretation specifically addresses whether an entity considers uncertain tax treatments separately;
the assumptions an entity makes about the examination of tax treatments by taxation authorities; how an entity determines
taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates; and how an entity considers changes
in facts and circumstances.
|
|
The
Group is currently evaluating the impact of adopting this standard on the consolidated financial statements.
|
|
IFRIC
23 is effective for annual periods beginning on or after January 1, 2019, with earlier application permitted.
|
|
|
There
are no other standards that are not yet effective and that would be expected to have a material impact on the entity in the
current or future reporting periods and on foreseeable future transactions.
|
|
|
|
|
(z)
|
Operating
segments
|
|
|
|
|
|
Operating
segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The
executive directors are the chief operating decision maker, responsible for allocating resources and assessing performance
of the operating segments.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
3
|
Changes
in accounting policies
|
|
|
|
This
note explains the impact of the adoption of IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers
on the group’s financial statements and also discloses the new accounting policies that have been applied from 1 February
2018, where they are different to those applied in prior periods.
|
|
(a)
|
Impact
on the financial statements
|
|
|
|
|
|
There
were no impacts on the Group’s accounting policies on adoption of IFRS 9 and IFRS 15, and no retrospective adjustments
required either.
|
|
|
|
|
(b)
|
IFRS
9 Financial Instruments – Accounting policies applied from 1 February 2018
|
|
|
|
|
|
Impairment
|
|
|
|
|
|
For
trade receivables, the group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses
to be recognised from initial recognition of the receivables.
|
|
|
|
|
(c)
|
IFRS
15 Revenue from Contracts with Customers – Accounting policies
|
|
|
|
|
|
(i)
Sale of goods - wholesale
|
|
|
|
|
|
The
Group sells a range of lingerie products in the wholesale market. Sales are recognised when control of the products has transferred,
being when the products are delivered to the wholesaler, the wholesaler has full discretion over the channel and price to
sell the products, and there is no unfulfilled obligation that could affect the wholesaler’s acceptance of the products.
Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been
transferred to the wholesaler, and either the wholesaler has accepted the products in accordance with the sales contract,
the acceptance provisions have lapsed, or the group has objective evidence that all criteria for acceptance have been satisfied.
|
|
|
|
|
|
Revenue
from these sales is recognised based on the price specified in the contract, net of the estimated volume discounts. The estimates
of discount is based on the trading terms in the contracts, and revenue is only recognised to the extent that it is highly
probable that a significant reversal will not occur. A refund liability (included in trade and other payables) is recognised
for expected volume payable to customers in relation to sales made until the end of the reporting period. The Group’s
obligation to provide a refund for faulty products under the standard trading terms is recognised as a provision.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
3
|
Changes
in accounting policies
|
|
(c)
|
IFRS
15 Revenue from Contracts with Customers – Accounting policies
|
|
|
|
|
|
(ii)
Sale of goods - retail/e-commerce
|
|
|
|
|
|
The
group operates a chain of retail stores and e-commerce websites selling lingerie products. Revenue from the sale of goods
is recognised when a group entity sells a product to the customer.
|
|
|
|
|
|
Payment
of the transaction price is due immediately when the customer purchases the product. It is the group’s policy to sell
its products to the end customer with a right of return within 30 days. Therefore, a refund liability (included in trade and
other payables) and a right to the returned goods (included in inventory) are recognised for the products expected to be returned.
Accumulated experience is used to estimate such returns at the time of sale at a portfolio level (expected value method).
Because the number of products returned has been steady for years, it is highly probable that a significant reversal in the
cumulative revenue recognised will not occur. The validity of this assumption and the estimated amount of returns are reassessed
at each reporting date.
|
4
|
Critical
Accounting Estimates and Judgments
|
|
|
|
The
directors make estimates and judgements during the preparation of these financial statements regarding assumptions about current
and future events affecting transactions and balances.
|
|
|
|
These
estimates and judgements are based on the best information available at the time of preparing the financial statements, however
as additional information is known then the actual results may differ from the estimates.
|
|
|
|
The
significant estimates and judgements made have been described below.
|
|
|
|
Key
estimates - inventory
|
|
|
|
Each
item on inventory is reviewed on an annual basis to determine whether it is being carried at higher than its net realisable
value. During the period, management have written down inventory based on best estimate of the net realisable value, although
until the time that inventory is sold this is an estimate.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
4
|
Critical
Accounting Estimates and Judgments
|
|
|
|
Key
estimates - fair value of financial instruments
|
|
|
|
The
Group has certain financial assets and liabilities which are measured at fair value. Where fair value has not been able to
be determined based on quoted price, a valuation model has been used. The inputs to these models are observable, where possible,
however these techniques involve significant estimates and therefore fair value of the instruments could be affected by changes
in these assumptions and inputs.
|
|
|
|
Key
estimates - impairment of brands
|
|
|
|
In
accordance with IAS 36 Impairment of Assets, the Group is required to estimate the recoverable amount of indefinite-lived
brand assets at each reporting period.
|
|
|
|
Impairment
testing is an area involving management judgement, requiring assessment as to whether the carrying value of assets can be
supported by their value in use or fair value less cost to sell.
|
|
|
|
In
calculating the fair value less costs to sell, certain assumptions are required to be made in respect of highly uncertain
matters including management’s expectations of:
|
|
-
|
growth
in brand revenues
|
|
-
|
market
royalty rate
|
|
-
|
the
selection of discount rates to reflect the risks involved, and
|
|
-
|
long-term
growth rates
|
|
Changing
the assumptions selected by management, in particular the growth rate, discount rate and market royalty rate assumption used,
could significantly affect the Group’s impairment evaluation and hence results.
|
|
|
|
The
Group’s review includes the key assumptions related to sensitivity in the model. Further details are provided in note
12 to the consolidated financial statements.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
4
|
Critical
Accounting Estimates and Judgments
|
|
|
|
Key
estimates - impairment of goodwill
|
|
|
|
In
accordance with IAS 36 Impairment of Assets, the Group is required to estimate the recoverable amount of goodwill at each
reporting period.
|
|
|
|
Impairment
testing is an area involving management judgement, requiring assessment as to whether the carrying value of assets can be
supported by the net present value of future cash flows derived from such assets using cash flow projections which have been
discounted at an appropriate rate and using a terminal value to incorporate expectations of growth thereafter.
|
|
|
|
In
calculating the net present value of the future cash flows, certain assumptions are required to be made in respect of highly
uncertain matters including management’s expectations of:
|
|
-
|
growth
in EBITDA future cash flows;
|
|
-
|
timing
and quantum of future capital expenditure;
|
|
-
|
long-term
growth rates; and
|
|
-
|
the
selection of discount rates to reflect the risks involved.
|
|
Changing
the assumptions selected by management, in particular the discount rate and growth rate assumptions used in the cash flow
projections, could significantly affect the Group’s impairment evaluation and hence results.
|
|
|
|
The
Group’s review includes the key assumptions related to sensitivity in the cash flow projections. Further details are
provided in note 8 to the consolidated financial statements.
|
|
|
|
Key
judgments - taxes
|
|
|
|
Deferred
tax assets
|
|
|
|
Determining
income tax provisions and the recognition of deferred tax assets including carried forward income tax involves judgment on
the tax treatment of certain transactions. Deferred tax is recognised on tax losses not yet used and on temporary differences
where it is probable that there will be taxable revenue against which these can be offset. Management has made judgments as
to the probability of future taxable income being generated against which tax losses will be available for offset based on
budgets, current and future expected economic conditions.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
5
|
Revenue
and Other Income
|
|
|
|
Revenue
from continuing operations
|
|
|
For
the Year Ended 31 January 2019
NZ$000’s
|
|
|
For
the Year Ended 31 January 2018
NZ$000’s
|
|
|
For
the 7 Months Ended 31 January 2017
NZ$000’s
|
|
|
For
the Year Ended 30 June 2016
NZ$000’s
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
revenue
|
|
|
120,278
|
|
|
|
145,452
|
|
|
|
104,007
|
|
|
|
163,481
|
|
Rebates
|
|
|
(8,359
|
)
|
|
|
(14,064
|
)
|
|
|
(7,723
|
)
|
|
|
(12,481
|
)
|
|
|
|
111,920
|
|
|
|
131,388
|
|
|
|
96,284
|
|
|
|
151,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale of goods
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Retail
|
|
|
50,443
|
|
|
|
53,150
|
|
|
|
34,460
|
|
|
|
58,837
|
|
-
Wholesale
|
|
|
29,394
|
|
|
|
45,901
|
|
|
|
43,379
|
|
|
|
77,729
|
|
-
Online
|
|
|
32,082
|
|
|
|
32,234
|
|
|
|
18,157
|
|
|
|
6,724
|
|
|
|
|
111,920
|
|
|
|
131,285
|
|
|
|
95,996
|
|
|
|
143,290
|
|
Services
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7,702
|
|
Other
income
|
|
|
-
|
|
|
|
103
|
|
|
|
288
|
|
|
|
8
|
|
|
|
|
111,920
|
|
|
|
131,388
|
|
|
|
96,284
|
|
|
|
151,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
of goods by geography
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
New Zealand
|
|
|
40,791
|
|
|
|
46,665
|
|
|
|
30,676
|
|
|
|
62,109
|
|
-
Australia
|
|
|
32,065
|
|
|
|
38,208
|
|
|
|
32,913
|
|
|
|
53,193
|
|
-
United States
|
|
|
34,112
|
|
|
|
32,323
|
|
|
|
23,146
|
|
|
|
19,167
|
|
-
Europe
|
|
|
4,996
|
|
|
|
14,192
|
|
|
|
9,549
|
|
|
|
16,531
|
|
|
|
|
111,920
|
|
|
|
131,388
|
|
|
|
96,284
|
|
|
|
151,000
|
|
Other
income relates to non-recurring advisory, managemen and design services provided to other third party intimates apparel brand
owners.
All
revenue is recognised at a point in time.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
6
|
Loss
for the Period
|
|
|
|
The
loss for the half year was derived after charging / (crediting) the following items that are unusual and of significance because
of their size, nature and incidence:
|
|
|
For
the Year Ended 31 January 2019
NZ$000’s
|
|
|
For
the Year Ended 31 January 2018
NZ$000’s
|
|
|
For
the 7 Months Ended 31 January 2017
NZ$000’s
|
|
|
For
the Year Ended 30 June 2016
NZ$000’s
|
|
Finance
Costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Interest expense on external borrowings
|
|
|
2,338
|
|
|
|
5,431
|
|
|
|
2,923
|
|
|
|
3,140
|
|
-
Interest expense on shareholder loans
|
|
|
1,062
|
|
|
|
2,807
|
|
|
|
3,040
|
|
|
|
7,042
|
|
-
Amortisation on loan set up costs
|
|
|
641
|
|
|
|
553
|
|
|
|
275
|
|
|
|
227
|
|
|
|
|
4,041
|
|
|
|
8,791
|
|
|
|
6,238
|
|
|
|
10,409
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
(gains)/losses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Fair value (gain)/loss on foreign exchange contracts
|
|
|
1,065
|
|
|
|
(502
|
)
|
|
|
2,135
|
|
|
|
7,660
|
|
-
Net foreign exchange (gains)/losses
|
|
|
(3,027
|
)
|
|
|
(256
|
)
|
|
|
171
|
|
|
|
(5,237
|
)
|
|
|
|
(1,963
|
)
|
|
|
(758
|
)
|
|
|
3,306
|
|
|
|
2,423
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
|
|
For
the Year Ended 31 January 2019
NZ$000’s
|
|
|
For
the Year Ended 31 January 2018
NZ$000’s
|
|
|
For
the 7 Months Ended 31 January 2017
NZ$000’s
|
|
|
For
the Year Ended 30 June 2016
NZ$000’s
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brand
transition, restructure and transaction expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Brand transition expenses
|
|
|
291
|
|
|
|
-
|
|
|
|
-
|
|
|
|
884
|
|
-
Onerous contracts
|
|
|
(109
|
)
|
|
|
(265
|
)
|
|
|
1,166
|
|
|
|
789
|
|
-
Restructure expenses
|
|
|
626
|
|
|
|
215
|
|
|
|
103
|
|
|
|
559
|
|
-
Transaction expenses
|
|
|
9,268
|
|
|
|
3,322
|
|
|
|
52
|
|
|
|
-
|
|
|
|
|
10,075
|
|
|
|
3,272
|
|
|
|
1,321
|
|
|
|
2,232
|
|
The
onerous contracts expense reversal relates to a reversal of the provision raised in the prior year.
Transaction
expenses relate to costs incurred in respect of the US listing process.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
6
|
Loss
for the Period
|
|
|
|
The
loss for the year includes the following specific expenses:
|
|
|
For
the Year Ended 31 January 2019
NZ$000’s
|
|
|
For
the Year Ended 31 January 2018
NZ$000’s
|
|
|
For
the 7 Months Ended 31 January 2017
NZ$000’s
|
|
|
For
the Year Ended 30 June 2016
NZ$000’s
|
|
Employee
benefits expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Salaries and wages
|
|
|
30,872
|
|
|
|
33,613
|
|
|
|
19,917
|
|
|
|
33,666
|
|
-
Defined contribution expenses
|
|
|
508
|
|
|
|
545
|
|
|
|
1,022
|
|
|
|
1,588
|
|
|
|
|
31,380
|
|
|
|
34,158
|
|
|
|
20,939
|
|
|
|
35,254
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
2,151
|
|
|
|
2,724
|
|
|
|
1,664
|
|
|
|
2,966
|
|
Amortisation
|
|
|
231
|
|
|
|
306
|
|
|
|
178
|
|
|
|
323
|
|
Impairment
loss
|
|
|
8,173
|
|
|
|
1,914
|
|
|
|
292
|
|
|
|
2,157
|
|
|
|
|
10,555
|
|
|
|
4,944
|
|
|
|
2,134
|
|
|
|
5,446
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
expense on operating leases:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
Lease payments
|
|
|
9,760
|
|
|
|
10,807
|
|
|
|
6,485
|
|
|
|
11,034
|
|
-
Sublease payments received
|
|
|
-
|
|
|
|
(483
|
)
|
|
|
(354
|
)
|
|
|
(567
|
)
|
|
|
|
9,760
|
|
|
|
10,324
|
|
|
|
6,131
|
|
|
|
10,467
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
7
|
Income
Tax Expense/(benefit)
|
|
|
|
(a)
The major components of tax expense/(benefit) comprise:
|
|
|
For
the Year Ended 31 January 2019
NZ$000’s
|
|
|
For
the Year Ended 31 January 2018
NZ$000’s
|
|
|
For
the 7 Months Ended 31 January 2017
NZ$000’s
|
|
|
For
the Year Ended 30 June 2016
NZ$000’s
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
tax on profits for the period
|
|
|
(667
|
)
|
|
|
537
|
|
|
|
807
|
|
|
|
301
|
|
Adjustments
for current tax of prior periods
|
|
|
(607
|
)
|
|
|
(478
|
)
|
|
|
58
|
|
|
|
(344
|
)
|
Total
current tax expense/(benefit)
|
|
|
(1,274
|
)
|
|
|
60
|
|
|
|
865
|
|
|
|
(43
|
)
|
Deferred
tax expense/(benefit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decreased/(increase)
in deferred tax assets (note 28)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,589
|
|
Income
tax expense/(benefit) for continuing operations
|
|
|
(1,274
|
)
|
|
|
60
|
|
|
|
865
|
|
|
|
5,546
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
Reconciliation of income tax to accounting profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss
before income tax
|
|
|
(50,494
|
)
|
|
|
(37,533
|
)
|
|
|
(15,114
|
)
|
|
|
(15,200
|
)
|
Tax
at New Zealand tax rate of 28%
|
|
|
(14,138
|
)
|
|
|
(10,509
|
)
|
|
|
(4,232
|
)
|
|
|
(4,256
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax effect
of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
permanent differences (including impairment expense)
|
|
|
753
|
|
|
|
(105
|
)
|
|
|
(6
|
)
|
|
|
757
|
|
-
adjustments in respect of current income tax of previous years
|
|
|
(522
|
)
|
|
|
(449
|
)
|
|
|
41
|
|
|
|
(237
|
)
|
-
effects of different tax rates of subsidiaries operating in other jurisdictions
|
|
|
493
|
|
|
|
(30
|
)
|
|
|
(15
|
)
|
|
|
(42
|
)
|
-
deferred tax assets relating to prior periods no longer recognised (note 28)
|
|
|
12,077
|
|
|
|
11,150
|
|
|
|
5,119
|
|
|
|
3,934
|
|
-
deferred tax assets relating to the current year not brought to account
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
5,589
|
|
-
other
|
|
|
63
|
|
|
|
3
|
|
|
|
(42
|
)
|
|
|
(199
|
)
|
Income
tax expense/(benefit)
|
|
|
(1,274
|
)
|
|
|
60
|
|
|
|
865
|
|
|
|
5,546
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
7
|
Income
Tax Expense/(benefit)
|
|
|
|
(c)
Tax losses not recognised
|
|
|
For
the Year Ended 31 January 2019
NZ$000’s
|
|
|
For
the Year Ended 31 January 2018
NZ$000’s
|
|
|
For
the 7 Months Ended 31 January 2017
NZ$000’s
|
|
|
For
the Year Ended 30 June 2016
NZ$000’s
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unused
tax losses for which no deferred tax asset has been recognised
|
|
|
130,587
|
|
|
|
87,455
|
|
|
|
43,269
|
|
|
|
23,765
|
|
Potential
tax benefit at 28%
|
|
|
36,564
|
|
|
|
24,487
|
|
|
|
12,115
|
|
|
|
6,654
|
|
|
The
Group has assessed future forecast profits and concluded that not enough criteria have been satisfied to recognise any deferred
tax assets at the period ended 31 January 2019. Unused tax losses do not have an expiry date.
|
|
|
|
(d)
Temporary differences not recognised
|
|
|
For
the Year Ended 31 January 2019
NZ$000’s
|
|
|
For
the Year Ended 31 January 2018
NZ$000’s
|
|
|
For
the 7 Months Ended 31 January 2017
NZ$000’s
|
|
|
For
the Year Ended 30 June 2016
NZ$000’s
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Temporary
differences for which no deferred tax asset has been recognised
|
|
|
14,504
|
|
|
|
14,661
|
|
|
|
18,703
|
|
|
|
19,924
|
|
Potental
tax benefit at 28%
|
|
|
4,061
|
|
|
|
4,105
|
|
|
|
5,237
|
|
|
|
5,579
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
8
|
Business
Combination
|
|
|
|
On
19th June 2018, Bendon Limited (Bendon) and Naked Brand Group Inc. (Naked) completed a business combination pursuant to the
Merger Agreement. The business combination was executed after Bendon Limited reorganised its group and inserted a new entity
as its parent entity in which the Bendon shareholders rolled over their shares into the new entity. The new parent entity
is called Naked Brand Group Limited. Bendon Limited was considered the accounting acquirer of the consolidated group and the
consolidated accounts represents a continuation of the Bendon Limited financial statements.
|
|
|
|
Pursuant
to the Merger Agreement, (i) Bendon undertook a reorganization (the “Reorganization”) pursuant to which all of
the shareholders of Bendon Limited exchanged all of the outstanding ordinary shares of Bendon Limited (the “Bendon Ordinary
Shares”) for ordinary shares in Naked Brand Group Limited (“Naked Brand Group Ordinary Shares”), and (ii)
immediately thereafter, the parties effectuated a merger of Merger Sub and Naked, with Naked surviving as a wholly owned subsidiary
of Naked Brand Group Limited and the Naked stockholders receiving Naked Brand Group Ordinary Shares in exchange for all of
the outstanding shares of common stock of Naked (the “Merger” and together with the Reorganization, the “Transactions”).
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
8
|
Business
Combination
|
|
|
|
Details
of the purchase consideration, the net assets acquired and goodwill are as follows:
|
|
|
Naked
NZ$000’s
|
|
Purchase consideration:
|
|
|
|
|
Shares issued
|
|
|
14,196
|
|
The assets and liabilities recognised as a result of the acquisition are as follows:
|
|
Fair value
NZ$000’s
|
|
Cash
|
|
|
592
|
|
Trade and other receivables
|
|
|
4,186
|
|
Inventories
|
|
|
1,810
|
|
Intangible assets
|
|
|
|
|
- Brand
|
|
|
2,726
|
|
Trade and other payables
|
|
|
(916
|
)
|
Net identifiable assets acquired
|
|
|
8,398
|
|
Add: goodwill
|
|
|
5,798
|
|
Net assets acquired
|
|
|
14,196
|
|
|
There
were no acquisitions in the year ended 31 January 2018.
|
|
|
|
(a)
Acquisition-related costs
|
|
|
|
Acquisition
related costs of $3,739,279 that were not directly attributable to the issue of shares are included in administrative expenses
in profit or loss and in operating cash flows in the statement of cash flows. In addition, approximately 100,000 Naked Brand
Group’s share was issued to advisors as part of their consultancy in lieu of cash payment. The fair value of these was
$700 thousand and that cost has been recognised as an expense in the profit and loss.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
8
|
Business
Combination
|
|
|
|
|
(b)
|
Revenue
and profit contribution
|
|
|
|
|
The
acquired business contributed revenues of $2,244,095 and net loss of $813,808 to the group for the period from 19 June 2018
to 31 January 2019. If the acquisition occurred on 1 February 2018, the full year revenue of the combined group would have
been $113,969,040 and loss of $49,255,319.
|
|
|
(c)
|
Provisional
accounting
|
|
|
|
|
The
initial accounting for the business combination is incomplete at the time of the end of the reporting period and will be recognised
using provisional amounts. During the measurement period, the Group will retrospectively adjust the provisional amounts recognised
at the acquisition date to reflect new information obtained about facts and circumstance that existed as at the acquisition
date. The measurement period ends as soon the Group receives the information it was seeking about facts and circumstances
that existed as of the acquisition date or learns that more information is not obtained. The measurement shall not exceed
one year from the acquisition date.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
9
|
Acquisition
of FOH Online Corp Inc.
|
|
|
|
On
November 15, 2018 the Group entered into a Stock Purchase Agreement with the shareholders of FOH Online Corp Inc (FOH), which
included Cullen Investments Limited (Cullen) a related entity, that the Group purchased all of the issued and outstanding
shares of FOH. The transaction was settled on December 6, 2019. The sub licence agreement which was in place between the Group
and FOH was terminated upon completion of this transaction. The Group has treated this transaction as an asset acquisition
as the activities of FOH did not constitute a business.
|
|
|
|
Details
of the purchase consideration, the net assets acquired and goodwill are as follows:
|
|
|
FOH
NZ$000’s
|
|
Purchase consideration:
|
|
|
|
|
Shares issued
|
|
|
6,872
|
|
Debt Forgiveness
|
|
|
13,073
|
|
Total purchase consideration
|
|
|
19,946
|
|
|
The
assets and liabilities recognised as a result of the acquisition are as follows:
|
|
|
Fair value
NZ$000’s
|
|
Cash
|
|
|
278
|
|
Net balance with sub licencee
|
|
|
(3,119
|
)
|
Loan payable to EJ Watson
|
|
|
(2,172
|
)
|
Patents and Licences
|
|
|
24,959
|
|
Total of assets acquired
|
|
|
19,946
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
10
|
Operating
Segment
|
|
|
|
Segment
information
|
|
|
|
Identification
of reportable operating segments
|
|
|
|
The
consolidated entities’ Director examined the group’s performance from both sales channel and geographical perspective
and identified seven reportable segments being Australia Retail, New Zealand Retail, Australia wholesale, New Zealand wholesale,
US Wholesale, EU Wholesale and e-commerce.
|
|
|
|
Australia
retail
|
|
|
|
This
segment covers retail and outlet stores located in Australia.
|
|
|
|
New
Zealand retail
|
|
|
|
This
segment covers retail and outlet stores located in New Zealand.
|
|
|
|
Australia
wholesale
|
|
|
|
This
segment covers the wholesale of intimates apparel to customers based in Australia
|
|
|
|
New
Zealand wholesale
|
|
|
|
This
segment covers the wholesale of intimates apparel to customers based in New Zealand.
|
|
|
|
US
wholesale
|
|
|
|
This
segment covers the wholesale of intimates apparel to customers based in the United States of America.
|
|
|
|
Europe
wholesale
|
|
|
|
This
segment covers the wholesale of intimates apparel to customers based in Europe.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
10
|
Operating
Segment
|
|
|
|
Identification
of reportable operating segments
|
|
|
|
E-commerce
|
|
|
|
This
segment covers the group’s online retail activities. E commerce revenue for the periods ended 31 January 2019, 31 January
2018 and 31 January 2017 include revenue from a US brand called Fredericks of Hollywood for which Bendon Limited currently
has a licence agreement.
|
|
|
|
These
operating segments are based on the internal reports that are reviewed and used by the Chief Executive Officer (who is identified
as the Chief Operating Decision Makers (‘CODM’)) in assessing performance and in determining the allocation of
resources.
|
|
|
|
The
CODM reviews underlying EBITDA (earnings before interest, tax, depreciation and amortisation). The accounting policies adopted
for internal reporting to the CODM are consistent with those adopted in the financial statements.
|
|
|
|
EBITDA
is a financial measure which is not prescribed by IFRS and represents the profit adjusted for specific non cash and significant
items. The directors consider EBITDA to reflect the core earnings of the consolidated entity.
|
|
|
|
The
information reported to the CODM is on a monthly basis.
|
|
|
|
Other
Costs and Business Activities
|
|
|
|
Certain
costs are not allocated to our reporting segment results, such as costs associated with the following:
|
|
|
|
-
Corporate overheads, which is responsible for centralized functions such as information technology, facilities, legal, finance,
human resources, business development, and procurement. These costs also include compensation costs and other miscellaneous
operating expenses not charged to our operating segments, as well as interest and tax income and expense.
|
|
|
|
These
costs are included with in “unallocated” segment in our segment performance.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
10
|
Operating
Segment
|
|
|
|
Other
assets and liabilities
|
|
|
|
We
manage our assets and liabilities on a Group basis, not by segment. CODM does not regularly review any asset or liability
information by segment and its preparation is impracticable. Accordingly, we do not report asset and liability information
by segment.
|
|
|
|
(a)
Reconciliations
|
|
|
|
Reconciliation
of segment revenue to consolidated statements of profit or loss and other comprehensive income:
|
|
|
For the Year
Ended
31 January 2019
NZ$000’s
|
|
|
For the Year
Ended
31 January 2018
NZ$000’s
|
|
|
For the 7 Months
ended
31 January
2017
NZ$000’s
|
|
|
For the Year
Ended
30 June
2016
NZ$000’s
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total segment revenue
|
|
|
136,844
|
|
|
|
156,311
|
|
|
|
113,031
|
|
|
|
176,145
|
|
Intersegment eliminations
|
|
|
(24,924
|
)
|
|
|
(24,923
|
)
|
|
|
(16,747
|
)
|
|
|
(32,855
|
)
|
Other revenue
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7,710
|
|
Total revenue
|
|
|
111,920
|
|
|
|
131,388
|
|
|
|
96,284
|
|
|
|
151,000
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
10
|
Operating
Segment
|
|
|
|
(a)
Reconciliations
|
|
|
|
Reconciliation
of segment EBITDA to the consolidated statements of profit or loss and other comprehensive income:
|
|
|
|
The
Board meets on a monthly basis to assess the performance of each segment, net operating profit does not include non-operating
revenue and expenses such as dividends, fair value gains and losses.
|
|
|
For the Year
Ended
31 January 2019
NZ$000’s
|
|
|
For the Year
Ended
31 January 2018
NZ$000’s
|
|
|
For the 7 Months
ended
31 January
2017
NZ$000’s
|
|
|
For the Year
Ended
30 June
2016
NZ$000’s
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA
|
|
|
(25,602
|
)
|
|
|
(24,053
|
)
|
|
|
(2,126
|
)
|
|
|
10,470
|
|
Income tax (expense)/benefit
|
|
|
1,274
|
|
|
|
(60
|
)
|
|
|
(865
|
)
|
|
|
(5,546
|
)
|
Other revenue
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
7,710
|
|
Any other reconciling items
|
|
|
(24,892
|
)
|
|
|
(13,481
|
)
|
|
|
(12,988
|
)
|
|
|
(33,380
|
)
|
Total net loss after tax
|
|
|
(49,220
|
)
|
|
|
(37,593
|
)
|
|
|
(15,979
|
)
|
|
|
(20,746
|
)
|
|
Any
other reconciling items includes brand transition, finance expenses, impairment expense, depreciation and amortisation, fair
value gain/loss on foreign exchange contracts, and unrealised foreign exchange gain/loss that cannot be allocated to segments.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
10
|
Operating
Segment
|
|
|
|
(b)
Geographical information
|
|
|
|
In
presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers
whereas segment assets are based on the location of the assets.
|
|
|
For the Year Ended 31 January 2019
NZ$000’s
|
|
|
For the Year Ended 31 January 2018
NZ$000’s
|
|
|
For the 7 Months ended 31 January 2017
NZ$000’s
|
|
|
For the Year Ended 30 June 2016
NZ$000’s
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Zealand
|
|
|
40,747
|
|
|
|
46,665
|
|
|
|
30,676
|
|
|
|
62,109
|
|
Australia
|
|
|
32,065
|
|
|
|
38,208
|
|
|
|
32,913
|
|
|
|
53,193
|
|
United States
|
|
|
34,112
|
|
|
|
32,323
|
|
|
|
23,146
|
|
|
|
19,167
|
|
Europe
|
|
|
4,996
|
|
|
|
14,192
|
|
|
|
9,549
|
|
|
|
16,531
|
|
|
|
|
111,920
|
|
|
|
131,388
|
|
|
|
96,284
|
|
|
|
151,000
|
|
|
The
revenues resulting from the Naked business combination are included in the United States segment as shown above
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
10
|
Operating
Segment
|
|
|
|
(c)
Segment performance
|
|
|
NZ
Retail
NZ$000’s
|
|
|
AU
Retail
NZ$000’s
|
|
|
NZ
Wholesale
NZ$000’s
|
|
|
AU
Wholesale
NZ$000’s
|
|
|
US
Wholesale
NZ$000’s
|
|
|
EU
Wholesale
NZ$000’s
|
|
|
e-commerce
NZ$000’s
|
|
|
Unallocated
NZ$000’s
|
|
|
Total
|
|
For
the year ended 31 January 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
from external customers
|
|
|
31,801
|
|
|
|
18,547
|
|
|
|
7,154
|
|
|
|
11,491
|
|
|
|
5,798
|
|
|
|
4,996
|
|
|
|
32,133
|
|
|
|
-
|
|
|
|
111,920
|
|
Service
income
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
31,801
|
|
|
|
18,547
|
|
|
|
7,154
|
|
|
|
11,491
|
|
|
|
5,798
|
|
|
|
4,996
|
|
|
|
32,133
|
|
|
|
-
|
|
|
|
111,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of sales
|
|
|
(15,423
|
)
|
|
|
(9,192
|
)
|
|
|
(6,372
|
)
|
|
|
(8,498
|
)
|
|
|
(5,222
|
)
|
|
|
(4,490
|
)
|
|
|
(21,248
|
)
|
|
|
(4,034
|
)
|
|
|
(74,480
|
)
|
Gross
margin
|
|
|
16,378
|
|
|
|
9,355
|
|
|
|
781
|
|
|
|
2,993
|
|
|
|
576
|
|
|
|
506
|
|
|
|
10,885
|
|
|
|
(4,034
|
)
|
|
|
37,440
|
|
Other
segment expenses*
|
|
|
(13,537
|
)
|
|
|
(11,003
|
)
|
|
|
(912
|
)
|
|
|
(4,495
|
)
|
|
|
(2,724
|
)
|
|
|
(1,536
|
)
|
|
|
(11,248
|
)
|
|
|
-
|
|
|
|
(45,454
|
)
|
Unallocated
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative
expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,050
|
)
|
|
|
(1,050
|
)
|
Corporate
expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(17,947
|
)
|
|
|
(17,947
|
)
|
Other
foreign exchange gain/loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,409
|
|
|
|
1,409
|
|
EBITDA
|
|
|
2,842
|
|
|
|
(1,648
|
)
|
|
|
(130
|
)
|
|
|
(1,502
|
)
|
|
|
(2,148
|
)
|
|
|
(1,030
|
)
|
|
|
(363
|
)
|
|
|
(21,623
|
)
|
|
|
(25,602
|
)
|
Brand
transition, restructure and transaction expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(10,075
|
)
|
|
|
(10,075
|
)
|
Finance
expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(4,041
|
)
|
|
|
(4,041
|
)
|
Impairment
expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(8,173
|
)
|
|
|
(8,173
|
)
|
Depreciation
and amortisation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,382
|
)
|
|
|
(2,382
|
)
|
Fair
value (gain)/loss on foreign exchange contracts
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,704
|
)
|
|
|
(1,704
|
)
|
Unrealised
foreign exchange gain/(loss)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,258
|
|
|
|
2,258
|
|
Fair
value gain/(loss) on Convertible Note derivative
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(775
|
)
|
|
|
(775
|
)
|
Loss
before income tax expense
|
|
|
2,842
|
|
|
|
(1,648
|
)
|
|
|
(130
|
)
|
|
|
(1,502
|
)
|
|
|
(2,148
|
)
|
|
|
(1,030
|
)
|
|
|
(363
|
)
|
|
|
(46,514
|
)
|
|
|
(50,494
|
)
|
Income
tax expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,274
|
|
|
|
1,274
|
|
Loss
after income tax expense
|
|
|
2,842
|
|
|
|
(1,648
|
)
|
|
|
(130
|
)
|
|
|
(1,502
|
)
|
|
|
(2,148
|
)
|
|
|
(1,030
|
)
|
|
|
(363
|
)
|
|
|
(45,240
|
)
|
|
|
(49,220
|
)
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
10
|
Operating
Segment
|
|
|
|
(c)
Segment performance
|
|
|
NZ
Retail
NZ$000’s
|
|
|
AU
Retail
NZ$000’s
|
|
|
NZ
Wholesale
NZ$000’s
|
|
|
AU
Wholesale
NZ$000’s
|
|
|
US
Wholesale
NZ$000’s
|
|
|
EU
Wholesale
NZ$000’s
|
|
|
e-commerce
NZ$000’s
|
|
|
Unallocated
NZ$000’s
|
|
|
Total
|
|
For
the year ended 31 January 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
from external customers
|
|
|
34,269
|
|
|
|
18,236
|
|
|
|
10,453
|
|
|
|
15,512
|
|
|
|
6,390
|
|
|
|
14,192
|
|
|
|
32,234
|
|
|
|
-
|
|
|
|
131,286
|
|
Service
income
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
102
|
|
|
|
102
|
|
|
|
|
34,269
|
|
|
|
18,236
|
|
|
|
10,453
|
|
|
|
15,512
|
|
|
|
6,390
|
|
|
|
14,192
|
|
|
|
32,234
|
|
|
|
102
|
|
|
|
131,388
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of sales
|
|
|
(16,488
|
)
|
|
|
(9,457
|
)
|
|
|
(8,213
|
)
|
|
|
(12,545
|
)
|
|
|
(6,438
|
)
|
|
|
(10,221
|
)
|
|
|
(20,974
|
)
|
|
|
(3,123
|
)
|
|
|
(87,459
|
)
|
Gross
margin
|
|
|
17,781
|
|
|
|
8,779
|
|
|
|
2,240
|
|
|
|
2,967
|
|
|
|
(48
|
)
|
|
|
3,971
|
|
|
|
11,260
|
|
|
|
(3,021
|
)
|
|
|
43,929
|
|
Other
segment expenses*
|
|
|
(13,451
|
)
|
|
|
(11,329
|
)
|
|
|
(1,068
|
)
|
|
|
(3,781
|
)
|
|
|
(3,301
|
)
|
|
|
(2,904
|
)
|
|
|
(11,520
|
)
|
|
|
-
|
|
|
|
(47,354
|
)
|
Unallocated
expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative
expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,101
|
)
|
|
|
(1,101
|
)
|
Corporate
expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(19,150
|
)
|
|
|
(19,150
|
)
|
Other
foreign exchange gain/loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(377
|
)
|
|
|
(377
|
)
|
EBITDA
|
|
|
4,330
|
|
|
|
(2,550
|
)
|
|
|
1,172
|
|
|
|
(814
|
)
|
|
|
(3,349
|
)
|
|
|
1,067
|
|
|
|
(260
|
)
|
|
|
(23,649
|
)
|
|
|
(24,053
|
)
|
Brand
transition, restructure and transaction expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,272
|
)
|
|
|
(3,272
|
)
|
Finance
expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(8,791
|
)
|
|
|
(8,791
|
)
|
Impairment
expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,914
|
)
|
|
|
(1,914
|
)
|
Depreciation
and amortisation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,030
|
)
|
|
|
(3,030
|
)
|
Fair
value (gain)/loss on foreign exchange contracts
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(502
|
)
|
|
|
(502
|
)
|
Unrealised
foreign exchange gain/(loss)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,636
|
|
|
|
1,636
|
|
Fair
value gain/(loss) on Convertible Note derivative
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,393
|
|
|
|
2,393
|
|
Loss
before income tax expense
|
|
|
4,330
|
|
|
|
(2,550
|
)
|
|
|
1,172
|
|
|
|
(814
|
)
|
|
|
(3,349
|
)
|
|
|
1,067
|
|
|
|
(260
|
)
|
|
|
(37,129
|
)
|
|
|
(37,533
|
)
|
Income
tax expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(60
|
)
|
|
|
(60
|
)
|
Loss
after income tax expense
|
|
|
4,330
|
|
|
|
(2,550
|
)
|
|
|
1,172
|
|
|
|
(814
|
)
|
|
|
(3,349
|
)
|
|
|
1,067
|
|
|
|
(260
|
)
|
|
|
(37,189
|
)
|
|
|
(37,593
|
)
|
|
*
Other segment expenses relate to brand management expenses and some corporate expenses.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
10
|
Operating
Segment
|
|
|
|
(c)
Segment performance
|
|
|
NZ Retail
NZ$000’s
|
|
|
AU Retail
NZ$000’s
|
|
|
NZ Wholesale
NZ$000’s
|
|
|
AU Wholesale
NZ$000’s
|
|
|
US Wholesale
NZ$000’s
|
|
|
EU Wholesale
NZ$000’s
|
|
|
e-commerce
NZ$000’s
|
|
|
Unallocated
NZ$000’s
|
|
|
Total
|
|
For the 7 months ended 31 January 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from external customers
|
|
|
21,953
|
|
|
|
12,053
|
|
|
|
7,484
|
|
|
|
18,091
|
|
|
|
9,015
|
|
|
|
9,548
|
|
|
|
18,140
|
|
|
|
-
|
|
|
|
96,284
|
|
|
|
|
21,953
|
|
|
|
12,053
|
|
|
|
7,484
|
|
|
|
18,091
|
|
|
|
9,015
|
|
|
|
9,548
|
|
|
|
18,140
|
|
|
|
-
|
|
|
|
96,284
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
(9,707
|
)
|
|
|
(5,592
|
)
|
|
|
(4,961
|
)
|
|
|
(11,431
|
)
|
|
|
(6,934
|
)
|
|
|
(6,277
|
)
|
|
|
(11,902
|
)
|
|
|
(340
|
)
|
|
|
(57,144
|
)
|
Gross margin
|
|
|
12,246
|
|
|
|
6,461
|
|
|
|
2,523
|
|
|
|
6,660
|
|
|
|
2,081
|
|
|
|
3,271
|
|
|
|
6,238
|
|
|
|
(340
|
)
|
|
|
39,140
|
|
Other segment expenses*
|
|
|
(7,480
|
)
|
|
|
(6,196
|
)
|
|
|
(475
|
)
|
|
|
(2,089
|
)
|
|
|
(2,065
|
)
|
|
|
(2,013
|
)
|
|
|
(3,654
|
)
|
|
|
(8,068
|
)
|
|
|
(32,040
|
)
|
Unallocated expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(541
|
)
|
|
|
(541
|
)
|
Corporate expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(8,082
|
)
|
|
|
(8,082
|
)
|
Other foreign exchange gain/loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(603
|
)
|
|
|
(603
|
)
|
EBITDA
|
|
|
4,766
|
|
|
|
265
|
|
|
|
2,048
|
|
|
|
4,571
|
|
|
|
16
|
|
|
|
1,258
|
|
|
|
2,584
|
|
|
|
(17,634
|
)
|
|
|
(2,126
|
)
|
Brand transition, restructure and transaction expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,321
|
)
|
|
|
(1,321
|
)
|
Finance expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(6,238
|
)
|
|
|
(6,238
|
)
|
Impairment expense
|
|
|
-
|
|
|
|
(281
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(11
|
)
|
|
|
(292
|
)
|
Depreciation and amortisation expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,842
|
)
|
|
|
(1,842
|
)
|
Fair value gain/(loss) on foreign exchange contracts
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,135
|
)
|
|
|
(2,135
|
)
|
Unrealised foreign exchange (gain)/loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(568
|
)
|
|
|
(568
|
)
|
Fair value (gain)/loss on Convertible Note derivative
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(592
|
)
|
|
|
(592
|
)
|
Loss before income tax expense
|
|
|
4,766
|
|
|
|
(16
|
)
|
|
|
2,048
|
|
|
|
4,571
|
|
|
|
16
|
|
|
|
1,258
|
|
|
|
2,584
|
|
|
|
(30,341
|
)
|
|
|
(15,114
|
)
|
Income tax expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(865
|
)
|
|
|
(865
|
)
|
Loss after income tax expense
|
|
|
4,766
|
|
|
|
(16
|
)
|
|
|
2,048
|
|
|
|
4,571
|
|
|
|
16
|
|
|
|
1,258
|
|
|
|
2,584
|
|
|
|
(31,206
|
)
|
|
|
(15,979
|
)
|
|
*
Other segment expenses relate to brand management expenses and some corporate expenses.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
10
|
Operating
Segment
|
|
|
|
(c)
Segment performance
|
|
|
NZ Retail
NZ$000’s
|
|
|
AU Retail
NZ$000’s
|
|
|
NZ Wholesale
NZ$000’s
|
|
|
AU Wholesale
NZ$000’s
|
|
|
US Wholesale
NZ$000’s
|
|
|
EU Wholesale
NZ$000’s
|
|
|
e-commerce
NZ$000’s
|
|
|
Unallocated
NZ$000’s
|
|
|
Total
|
|
For the year ended 30 June 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from external customers
|
|
|
37,389
|
|
|
|
20,680
|
|
|
|
15,071
|
|
|
|
28,021
|
|
|
|
18,876
|
|
|
|
16,531
|
|
|
|
6,722
|
|
|
|
-
|
|
|
|
143,290
|
|
Service income
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7,702
|
|
|
|
7,702
|
|
Other income
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8
|
|
|
|
8
|
|
|
|
|
37,389
|
|
|
|
20,680
|
|
|
|
15,071
|
|
|
|
28,021
|
|
|
|
18,876
|
|
|
|
16,531
|
|
|
|
6,722
|
|
|
|
7,710
|
|
|
|
151,000
|
|
Cost of sales
|
|
|
(16,053
|
)
|
|
|
(8,930
|
)
|
|
|
(10,721
|
)
|
|
|
(18,056
|
)
|
|
|
(14,540
|
)
|
|
|
(11,658
|
)
|
|
|
(3,582
|
)
|
|
|
15
|
|
|
|
(83,525
|
)
|
Gross margin
|
|
|
21,336
|
|
|
|
11,750
|
|
|
|
4,350
|
|
|
|
9,965
|
|
|
|
4,336
|
|
|
|
4,873
|
|
|
|
3,140
|
|
|
|
7,725
|
|
|
|
67,475
|
|
Other segment expenses*
|
|
|
(12,263
|
)
|
|
|
(9,835
|
)
|
|
|
(709
|
)
|
|
|
(3,520
|
)
|
|
|
(2,817
|
)
|
|
|
(3,204
|
)
|
|
|
(2,039
|
)
|
|
|
(13,975
|
)
|
|
|
(48,362
|
)
|
Unallocated expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Administrative expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(801
|
)
|
|
|
(801
|
)
|
Corporate expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(13,002
|
)
|
|
|
(13,002
|
)
|
Other foreign exchange gain/loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,160
|
|
|
|
5,160
|
|
EBITDA
|
|
|
9,073
|
|
|
|
1,915
|
|
|
|
3,641
|
|
|
|
6,445
|
|
|
|
1,519
|
|
|
|
1,669
|
|
|
|
1,101
|
|
|
|
(14,893
|
)
|
|
|
10,470
|
|
Brand transition, restructure and transaction expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,232
|
)
|
|
|
(2,232
|
)
|
Finance expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(10,409
|
)
|
|
|
(10,409
|
)
|
Impairment expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Depreciation and amortisation expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,157
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,289
|
)
|
|
|
(5,446
|
)
|
Fair value gain/(loss) on foreign exchange contracts
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(7,660
|
)
|
|
|
(7,660
|
)
|
Unrealised foreign exchange (gain)/loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
77
|
|
|
|
77
|
|
Loss before income tax expense
|
|
|
9,073
|
|
|
|
1,915
|
|
|
|
3,641
|
|
|
|
4,288
|
|
|
|
1,519
|
|
|
|
1,669
|
|
|
|
1,101
|
|
|
|
(38,406
|
)
|
|
|
(15,200
|
)
|
Income tax expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,546
|
)
|
|
|
(5,546
|
)
|
Loss after income tax expense
|
|
|
9,073
|
|
|
|
1,915
|
|
|
|
3,641
|
|
|
|
4,288
|
|
|
|
1,519
|
|
|
|
1,669
|
|
|
|
1,101
|
|
|
|
(43,952
|
)
|
|
|
(20,746
|
)
|
|
*
Other segment expenses relate to brand management expenses and some corporate expenses.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
11
|
Cash
and Cash Equivalents
|
|
|
31 January 2019
NZ $000’s
|
|
|
31 January 2018
NZ $000’s
|
|
|
31 January 2017
NZ $000’s
|
|
|
|
|
|
|
|
|
|
|
|
Cash on hand
|
|
|
47
|
|
|
|
54
|
|
|
|
48
|
|
Cash at bank
|
|
|
1,915
|
|
|
|
10,685
|
|
|
|
2,596
|
|
|
|
|
1,962
|
|
|
|
10,739
|
|
|
|
2,644
|
|
12
|
Trade
and Other Receivables
|
|
|
|
|
|
31 January 2019
NZ $000’s
|
|
|
31 January 2018
NZ $000’s
|
|
|
31 January 2017
NZ $000’s
|
|
CURRENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
|
|
|
|
7,789
|
|
|
|
9,982
|
|
|
|
26,499
|
|
Provision for impairment
|
|
(a)
|
|
|
|
(609
|
)
|
|
|
(326
|
)
|
|
|
(537
|
)
|
|
|
|
|
|
|
7,180
|
|
|
|
9,656
|
|
|
|
25,962
|
|
Prepayments
|
|
|
|
|
|
2,288
|
|
|
|
1,792
|
|
|
|
1,779
|
|
Other receivables
|
|
|
|
|
|
183
|
|
|
|
1,717
|
|
|
|
349
|
|
|
|
|
|
|
|
9,650
|
|
|
|
13,165
|
|
|
|
28,090
|
|
|
Due
to the short-term nature of the current receivables, their carrying amount is considered to be the same as their fair value.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
12
|
Trade
and Other Receivables
|
|
|
|
(a)
Impairment of receivables
|
|
|
|
The
Group applies the simplified approach to providing for expected credit losses prescribed by AASB 9, which permits the use
of the lifetime expected loss provision for all trade receivables. To measure the expected credit losses, trade receivables
have been grouped based on shared credit risk characteristics and the days past due. The loss allowance provision as at 31
January 2019 is determined as follows, the expected credit losses incorporate forward looking information.
|
31 January 2019
|
|
0 - 30 days
|
|
|
31 - 60 days
|
|
|
60 - 90 days
|
|
|
> 90 days overdue
|
|
|
Total
|
|
Expected loss rate (%)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
48.40
|
|
|
|
|
|
Gross carrying amount ($)
|
|
|
5,577
|
|
|
|
852
|
|
|
|
101
|
|
|
|
1,259
|
|
|
|
7,789
|
|
ECL provision
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
609
|
|
|
|
609
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
12
|
Trade
and Other Receivables
|
|
|
|
(a)
Impairment of receivables
|
|
|
|
Reconciliation
of changes in the provision for impairment of receivables is as follows:
|
|
|
For the Year Ended
31 January 2019
|
|
|
For the Year Ended
31 January 2018
|
|
|
For the 7 Months Ended
31 January 2017
|
|
|
|
NZ $000’s
|
|
|
NZ $000’s
|
|
|
NZ $000’s
|
|
Balance at beginning of the period (calculated in accordance with AASB 139)
|
|
|
(326
|
)
|
|
|
(537
|
)
|
|
|
(268
|
)
|
Amount restated through opening retained earnings on adoption of AASB 9
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Opening impairment allowance calculated under AASB 9
|
|
|
(326
|
)
|
|
|
(537
|
)
|
|
|
(268
|
)
|
Additional impairment loss recognised
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Amounts written off as uncollectable
|
|
|
|
|
|
|
|
|
|
|
|
|
Directly to P&L
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Movement through provision
|
|
|
(1,037
|
)
|
|
|
(92
|
)
|
|
|
(364
|
)
|
Unused amounts reversed
|
|
|
772
|
|
|
|
316
|
|
|
|
80
|
|
Foreign exchange movement
|
|
|
(18
|
)
|
|
|
(13
|
)
|
|
|
15
|
|
Balance at end of the period
|
|
|
(609
|
)
|
|
|
(326
|
)
|
|
|
(537
|
)
|
|
The
Group measures the loss allowance for trade receivables at an amount equal to lifetime expected credit loss (ECL). The ECL
on trade receivables are estimated using a provision matrix by reference to past default experience of the debtor and an analysis
of the debtor’s current financial position, adjusted for factors that are specific to the debtors, general economic
conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction
of conditions at the reporting date.
|
|
|
|
The
Group has recognised a loss allowance of 48.40% against identifiable receivables at risk in excess of 90 days because historical
experience has indicated that these receivables are generally not recoverable.
|
|
|
|
There
has been no change in the estimation techniques or significant assumptions made during the current reporting period.
|
|
|
|
The
Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty
and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into
bankruptcy proceedings, whichever occurs first.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
12
|
Trade
and Other Receivables
|
|
|
|
(b)
Aged analysis
|
|
|
|
The
ageing analysis of receivables is as follows:
|
|
|
31 January 2019
NZ $000’s
|
|
|
31 January 2018
NZ $000’s
|
|
|
31 January 2017
NZ $000’s
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0-30 days
|
|
|
5,577
|
|
|
|
7,945
|
|
|
|
14,883
|
|
31-60 days
|
|
|
852
|
|
|
|
335
|
|
|
|
2,566
|
|
61-90 days (past due not impaired)
|
|
|
101
|
|
|
|
489
|
|
|
|
2,166
|
|
61-90 days (considered impaired)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
91+ days (past due not impaired)
|
|
|
3,295
|
|
|
|
1,213
|
|
|
|
6,884
|
|
91+ days (considered impaired)
|
|
|
(2,036
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
7,789
|
|
|
|
9,982
|
|
|
|
26,499
|
|
|
(c)
Transferred receivables
|
|
|
|
During
the periods ended 31 January 2018 and 31 January 2017 the carrying amounts of the trade receivables included receivables which
were subject to a bank funding arrangement. Under this arrangement, Bendon had transferred the relevant receivables to BNZ
in exchange for cash and is prevented from selling or pledging the receivables. However, Bendon has retained credit risk.
The group therefore continues to recognise the transferred assets in their entirety in the balance sheet. The amount repayable
under the factoring agreement is presented as secured borrowings.
|
|
|
31 January 2019
NZ $000’s
|
|
|
31 January 2018
NZ $000’s
|
|
|
31 January 2017
NZ $000’s
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transferred receivables
|
|
|
-
|
|
|
|
9,790
|
|
|
|
11,649
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
|
|
31 January 2019
NZ $000’s
|
|
|
31 January 2018
NZ $000’s
|
|
|
31 January 2017
NZ $000’s
|
|
|
|
|
|
|
|
|
|
|
|
Finished goods
|
|
|
21,564
|
|
|
|
31,451
|
|
|
|
37,904
|
|
Provision for impairment
|
|
|
(444
|
)
|
|
|
(338
|
)
|
|
|
(153
|
)
|
|
|
|
21,120
|
|
|
|
31,113
|
|
|
|
37,751
|
|
|
Write
downs of inventories to net realisable value during the period were NZ$106,433 (2018: NZ$185,026, 2017: NZ$364,660).
|
14
|
Property,
plant and equipment
|
|
|
31 January 2019
NZ $000’s
|
|
|
31 January 2018
NZ $000’s
|
|
|
31 January 2017
NZ $000’s
|
|
Plant, furniture, fittings and motor vehicles
|
|
|
|
|
|
|
|
|
|
|
|
|
At cost
|
|
|
25,666
|
|
|
|
27,801
|
|
|
|
25,455
|
|
Accumulated depreciation
|
|
|
(25,168
|
)
|
|
|
(25,789
|
)
|
|
|
(23,182
|
)
|
|
|
|
499
|
|
|
|
2,013
|
|
|
|
2,273
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leasehold improvements
|
|
|
|
|
|
|
|
|
|
|
|
|
At cost
|
|
|
12,035
|
|
|
|
10,762
|
|
|
|
10,132
|
|
Accumulated depreciation
|
|
|
(8,770
|
)
|
|
|
(8,034
|
)
|
|
|
(7,441
|
)
|
|
|
|
3,264
|
|
|
|
2,728
|
|
|
|
2,691
|
|
Total property, plant and equipment
|
|
|
3,763
|
|
|
|
4,741
|
|
|
|
4,964
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
14
|
Property,
plant and equipment
|
|
|
|
(a)
Movements in carrying amounts of property, plant and equipment
|
|
|
|
Movement
in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial
period:
|
|
|
Leasehold improvements
NZ $000’s
|
|
|
Plant, furniture,
fittings and
motor vehicles
NZ $000’s
|
|
|
Total
NZ $000’s
|
|
Year ended 31 January 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the beginning of the period
|
|
|
2,728
|
|
|
|
2,013
|
|
|
|
4,741
|
|
Additions
|
|
|
1,501
|
|
|
|
1,084
|
|
|
|
2,585
|
|
Disposals
|
|
|
(105
|
)
|
|
|
(2,736
|
)
|
|
|
(2,841
|
)
|
Depreciation expense
|
|
|
(982
|
)
|
|
|
(1,170
|
)
|
|
|
(2,151
|
)
|
Impairment
|
|
|
-
|
|
|
|
(239
|
)
|
|
|
(239
|
)
|
Foreign exchange movements
|
|
|
121
|
|
|
|
1,547
|
|
|
|
1,668
|
|
Balance at the end of the year
|
|
|
3,264
|
|
|
|
499
|
|
|
|
3,763
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
14
|
Property,
plant and equipment
|
|
|
|
(a)
Movements in carrying amounts of property, plant and equipment
|
|
|
Leasehold improvements
NZ $000’s
|
|
|
Plant,
furniture,
fittings and
motor
vehicles
NZ$000’s
|
|
|
Total
NZ $000’s
|
|
Year ended 31 January 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the beginning of the period
|
|
|
2,691
|
|
|
|
2,273
|
|
|
|
4,964
|
|
Additions
|
|
|
285
|
|
|
|
2,032
|
|
|
|
2,317
|
|
Disposals
|
|
|
(4
|
)
|
|
|
(118
|
)
|
|
|
(122
|
)
|
Depreciation expense
|
|
|
(496
|
)
|
|
|
(2,228
|
)
|
|
|
(2,724
|
)
|
Foreign exchange movements
|
|
|
253
|
|
|
|
54
|
|
|
|
306
|
|
Balance at the end of the year
|
|
|
2,728
|
|
|
|
2,013
|
|
|
|
4,741
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
14
|
Property,
plant and equipment
|
|
|
|
(a)
Movements in carrying amounts of property, plant and equipment
|
|
|
Leasehold improvements
NZ $000’s
|
|
|
Plant,
furniture,
fittings and
motor
vehicles
NZ$000’s
|
|
|
Total
NZ $000’s
|
|
7 months ended 31 January 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the beginning of the year
|
|
|
2,795
|
|
|
|
3,414
|
|
|
|
6,209
|
|
Additions
|
|
|
241
|
|
|
|
482
|
|
|
|
723
|
|
Depreciation expense
|
|
|
(296
|
)
|
|
|
(1,368
|
)
|
|
|
(1,664
|
)
|
Impairment
|
|
|
-
|
|
|
|
(281
|
)
|
|
|
(281
|
)
|
Foreign exchange movements
|
|
|
49
|
|
|
|
26
|
|
|
|
75
|
|
Balance at the end of the year
|
|
|
2,691
|
|
|
|
2,273
|
|
|
|
4,964
|
|
|
The
group is currently assessing the impact of IFRS 16 Leases and believes adoption of the provisions of this standard will have
a material impact on the Group’s consolidated financial statements
|
|
|
|
IFRS16
Leases will require that the group record a liability and a related asset on the balance sheet for our leased facilities
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
|
|
31 January 2019
NZ $000’s
|
|
|
31 January 2018
NZ $000’s
|
|
|
31 January 2017
NZ $000’s
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
5,607
|
|
|
|
-
|
|
|
|
-
|
|
Accumulated impairment
|
|
|
(3,287
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
2,320
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Patents, licences and trademarks
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
25,993
|
|
|
|
919
|
|
|
|
1,169
|
|
Accumulated amortisation and impairment
|
|
|
(918
|
)
|
|
|
(718
|
)
|
|
|
(573
|
)
|
|
|
|
25,076
|
|
|
|
201
|
|
|
|
596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brands
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
14,769
|
|
|
|
12,463
|
|
|
|
12,036
|
|
Accumulated amortisation and impairment
|
|
|
(4,563
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
10,205
|
|
|
|
12,463
|
|
|
|
12,036
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
|
15,718
|
|
|
|
15,788
|
|
|
|
17,308
|
|
Accumulated amortisation and impairment
|
|
|
(15,455
|
)
|
|
|
(15,440
|
)
|
|
|
(15,260
|
)
|
|
|
|
263
|
|
|
|
348
|
|
|
|
2,048
|
|
Total intangible assets
|
|
|
37,864
|
|
|
|
13,012
|
|
|
|
14,680
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
15
|
Intangible
Assets
|
|
|
|
(a)
Software Impairment
|
|
|
|
For
the year ended 31 January 2018, management decided to fully impair the costs on the ERP upgrade and are currently reviewing
alternatives.
|
|
|
|
(b)
Movements in carrying amounts of intangible assets
|
|
|
Software
NZ $000’s
|
|
|
Patents and licences
NZ $000’s
|
|
|
|
Brands
NZ $000’s
|
|
|
Goodwill
NZ $000’s
|
|
|
Total
NZ $000’s
|
|
Year ended 31 January 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the beginning of the year
|
|
|
348
|
|
|
|
201
|
|
|
|
|
12,463
|
|
|
|
-
|
|
|
|
13,012
|
|
Additions
|
|
|
33
|
|
|
|
25,076
|
|
|
|
|
2,726
|
|
|
|
5,798
|
|
|
|
33,634
|
|
Amortisation
|
|
|
(29
|
)
|
|
|
(202
|
)
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(231
|
)
|
Impairment (refer note 12c)
|
|
|
(83
|
)
|
|
|
-
|
|
|
|
|
(4,563
|
)
|
|
|
(3,287
|
)
|
|
|
(7,934
|
)
|
Foreign exchange movements
|
|
|
(7
|
)
|
|
|
1
|
|
|
|
|
(420
|
)
|
|
|
(192
|
)
|
|
|
(618
|
)
|
Closing value at 31 January 2019
|
|
|
263
|
|
|
|
25,076
|
|
|
|
|
10,205
|
|
|
|
2,320
|
|
|
|
37,864
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
15
|
Intangible
Assets
|
|
|
|
(b)
Movements in carrying amounts of intangible assets
|
|
|
Software
NZ $000’s
|
|
|
Patents and licences
NZ $000’s
|
|
|
Brands
NZ $000’s
|
|
|
Goodwill
NZ $000’s
|
|
|
Total
NZ $000’s
|
|
Year ended 31 January 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the beginning of the year
|
|
|
2,048
|
|
|
|
596
|
|
|
|
12,036
|
|
|
|
-
|
|
|
|
14,680
|
|
Additions
|
|
|
106
|
|
|
|
12
|
|
|
|
-
|
|
|
|
-
|
|
|
|
118
|
|
Amortisation
|
|
|
(163
|
)
|
|
|
(143
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(306
|
)
|
Impairment (refer note 12c)
|
|
|
(1,650
|
)
|
|
|
(264
|
)
|
|
|
|
|
|
|
-
|
|
|
|
(1,914
|
)
|
Foreign exchange movements
|
|
|
7
|
|
|
|
1
|
|
|
|
427
|
|
|
|
-
|
|
|
|
434
|
|
Closing value at 31 January 2018
|
|
|
348
|
|
|
|
201
|
|
|
|
12,463
|
|
|
|
-
|
|
|
|
13,012
|
|
15
|
Intangible
Assets
|
|
|
|
(a)
Movements in carrying amounts of intangible assets
|
|
|
Software
NZ $000’s
|
|
|
Patents
and licences
NZ $000’s
|
|
|
Brands
NZ $000’s
|
|
|
Goodwill
NZ $000’s
|
|
|
Total
NZ $000’s
|
|
7 months ended 31 January 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at the beginning of the period
|
|
|
2,251
|
|
|
|
128
|
|
|
|
12,554
|
|
|
|
-
|
|
|
|
14,933
|
|
Additions
|
|
|
10
|
|
|
|
808
|
|
|
|
-
|
|
|
|
-
|
|
|
|
818
|
|
Amortisation
|
|
|
(318
|
)
|
|
|
(33
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(351
|
)
|
Impairment
|
|
|
|
|
|
|
(331
|
)
|
|
|
|
|
|
|
-
|
|
|
|
(331
|
)
|
Foreign exchange movements
|
|
|
105
|
|
|
|
24
|
|
|
|
(518
|
)
|
|
|
-
|
|
|
|
(389
|
)
|
Closing value at 31 January 2017
|
|
|
2,048
|
|
|
|
596
|
|
|
|
12,036
|
|
|
|
-
|
|
|
|
14,680
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
15
|
Intangible
Assets
|
|
|
|
(c)
Impairment of goodwill
|
|
|
|
For
the purpose of impairment testing, goodwill is allocated to cash-generating units as below:
|
|
|
|
Description
of cash-generating unit (CGU)
|
|
|
31 January 2019
NZ $000’s
|
|
|
31 January 2018
NZ $000’s
|
|
|
31 January 2017
NZ $000’s
|
|
United States
|
|
|
2,320
|
|
|
|
-
|
|
|
|
-
|
|
Impairment expense
|
|
|
2,320
|
|
|
|
-
|
|
|
|
-
|
|
|
Impairment
assumption
|
|
|
|
Goodwill
relates to the acquisition of Naked Inc, a business operating in the United States and was allocated to the Group’s
operation in United States which is the cash generating unit (CGU) for the purpose of impairment testing. The recoverable
amount of the CGU was determined based on value in use calculations which require the use of assumptions. The calculations
use cash flow projections based on financial budgets approved by management covering a five year period. Cash flows beyond
the five year period are extrapolated using the estimated growth rates stated below. These growth rates do not exceed the
long term average growth rates for the industry.
|
|
|
|
The
result of the impairment assessment is that the carrying value exceeded the fair value less costs to sell by an amount of
$3.2m. As such, the goodwill has been partially impaired for the year ended 31 January 2019.
|
|
|
|
Significant
assumptions used for the purposes of the value in use calculation include:
|
|
|
|
United
States
|
|
Post-tax
discount rate - 10.50%
|
|
EBITDA
growth rate - 10%
|
|
Terminal
growth - 2%
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
|
(c)
|
Impairment
of goodwill
|
|
Impact
of possible changes in key assumptions
|
|
|
|
The
directors have made judgements and estimates to assess goodwill for impairment. Should these judgements and estimates not
occur the resulting carrying amount may decrease.
|
|
|
|
The
sensitivities that have been separately modelled are as follows:
(a)
a 3.25% increase in the post-tax discount rate
(b) sales growth rate reduced to 5%
|
|
|
|
The
carrying amount of the goodwill is sensitive to assumptions used in the impairment test calculations including the post tax
discount rate and sales growth rate. A 3.25% increase in the post tax discount rate would result in an additional impairment
of $2,320 thousand against the carrying amount of the goodwill. A reduction of the EBITDA growth rate to 5% would not result
in a further impairment as goodwill would be fully impaired from the increase of the post-tax discount rate.
|
|
(d)
|
Impairment
testing for indefinite-lived brand intangibles
|
|
Brand
intangible assets represent brands owned by the Group, that arose on historical acquisitions including Pleasure State, Davenport
and Lovable. The intangible assets increased in the current period as result of the business combinations with Naked Brand
Group Inc. See note 8 for further information.
|
|
|
|
The
brand intangible assets of $10,205,000 (2018: $12,463,000, 2017: $12,036,000) are tested for impairment annually.
|
|
|
|
Impairment
assumptions
|
|
|
|
Management
has determined the recoverable amount of the indefinite lived brand assets by assessing the fair value less cost of disposal
(FVLCOD) of the underlying assets. The relief from royalty method adopted to complete the valuation determines, in lieu of
ownership, the cost that would be required to obtain comparable rights to use the asset via a third party licence arrangement.
These calculations use cash flow projections based on financial budgets approved by management covering a five-year period.
Cash flows beyond the five-year period are extrapolated using the estimated growth rates shown below. These growth rates do
not exceed the long term average growth rates for the industry. The result of the impairment assessment is that the carrying
value has exceeded the fair value less costs to sell by $3.9m. As such, the indefinite lived brand assets has been partially
impaired for the year ended 31 January 2019.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
|
(d)
|
Impairment
testing for indefinite-lived brand intangibles
|
|
Management’s
approach and the key assumptions used to determine the FVLCOD were as follows:
Sales
growth: 2.5% (31 January 2018: 5%)
Royalty rate: 5.0% (31 January 2018: 6.6%)
Cash flow - revenue forecast period: 5 years (31 January 2018: 5 years)
Post tax discount rate (%) for US brands: 10.5% (31 January 2018: 0%)
Post-tax discount rate (%) for NZ brands: 11.75% (31 January 2018: 11.4%)
Long term sales growth rate (%): 2% (31 January 2018: 2%)
|
|
|
|
Impact
of possible changes in key assumptions
|
|
|
|
The
directors have made judgements and estimates to assess indefinite-lived brand assets for impairment. Should these judgements
and estimates not occur the resulting carrying amount may decrease.
|
|
|
|
The
sensitivities that have been separately modelled are as follows:
(a) a 2.1% increase in the post-tax discount rate
(b) sales growth rate reduced to 0%
|
|
|
|
The
carrying amounts of the indefinite lived brand intangible assets are sensitive to assumptions used in the impairment test
calculations including the post tax discount rate and sales growth rate. A 2.1% increase in the post tax discount rate would
result in an additional impairment of $951 thousand (31 January 2018: an increase of 1.5% would result an impairment of $929
thousand) against the carrying amount of the indefinite lived brand intangibles. A reduction of the sales growth rate to 0%
would result in an additional impairment of $1,554 thousand (31 January 2018: a reduction to 2% would result an impairment
of $611 thousand) against the carrying amount of the indefinite lived brand intangible assets.
|
|
|
16
|
Derivative
Financial Instruments
|
|
|
31 January 2019
NZ $000’s
|
|
|
31 January 2018
NZ $000’s
|
|
|
31 January 2017
NZ $000’s
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward exchange contracts
|
|
|
1,484
|
|
|
|
2,087
|
|
|
|
4,188
|
|
|
In
order to mitigate exchange rate movements and to manage the inventory costing process, the Group has entered into forward
currency contracts to purchase US dollars.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
17
|
Derivative
on Convertible Notes
|
|
|
31 January 2019
NZ $000’s
|
|
|
31 January 2018
NZ $000’s
|
|
|
31 January 2017
NZ $000’s
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative on Convertible Notes
|
|
|
-
|
|
|
|
1,110
|
|
|
|
4,112
|
|
|
The
Group has an embedded derivative feature in convertible notes due to foreign currency. Derivatives are recognized initially
at fair value; attributable transaction costs are recognized in profit or loss as incurred. Fair value of the derivative is
determined on inception using the Black-Scholes model. Subsequent to initial recognition, derivatives are measured at fair
value, and changes therein are accounted in profit or loss.
|
|
|
|
The
fair value of the separable embedded derivative in the convertible notes has been determined using Black-Scholes model. Measurement
inputs include share price on measurement date, expected term of the instrument, risk free rate (based on government bonds),
expected volatility (based on weighted average historic volatility) and expected dividend rate.
|
|
|
18
|
Trade
and Other Payables
|
|
|
31 January 2019
NZ $000’s
|
|
|
31 January 2018
NZ $000’s
|
|
|
31 January 2017
NZ $000’s
|
|
CURRENT
|
|
|
|
|
|
|
|
|
|
Trade payables
|
|
|
23,580
|
|
|
|
21,143
|
|
|
|
19,221
|
|
Accruals
|
|
|
10,150
|
|
|
|
9,568
|
|
|
|
7,503
|
|
Employee benefits liabilities
|
|
|
1,815
|
|
|
|
1,805
|
|
|
|
1,842
|
|
|
|
|
35,545
|
|
|
|
32,516
|
|
|
|
28,565
|
|
|
Trade
and other payables are unsecured, non interest bearing and are normally settled within 30 days however some the trade creditors
are out of term as at 31 January 2019 and subsequent to the end of the financial period the Group has reduced the out of term
trade creditors but further work is required to bring all of the creditors in term. The carrying amounts are considered to
be a reasonable approximation of fair value.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
|
|
Note
|
|
31 January 2019
NZ $000’s
|
|
|
31 January 2018
NZ $000’s
|
|
|
31 January 2017
NZ $000’s
|
|
CURRENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secured liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank overdraft
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Shareholder loans
|
|
|
|
|
-
|
|
|
|
10,951
|
|
|
|
8,200
|
|
Leased liability
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Bank Loans
|
|
|
|
|
20,000
|
|
|
|
16,000
|
|
|
|
16,000
|
|
Debt issuance costs in relation to bank loan
|
|
|
|
|
(270
|
)
|
|
|
(218
|
)
|
|
|
(656
|
)
|
Working capital financing bank facility
|
|
|
|
|
-
|
|
|
|
22,489
|
|
|
|
31,710
|
|
Convertible notes
|
|
|
|
|
-
|
|
|
|
1,740
|
|
|
|
13,744
|
|
Other loan
|
|
|
|
|
1,236
|
|
|
|
1,159
|
|
|
|
-
|
|
|
|
|
|
|
20,967
|
|
|
|
52,121
|
|
|
|
68,998
|
|
|
The
fair value of borrowings is not considered to be materially different to their carrying amounts.
|
|
|
|
(a)
Assets pledged as security:
|
|
|
|
Borrowings
are secured by a fixed and floating charge over the assets of the consolidated entity. The lease liabilities are effectively
secured as the rights to the leased assets, recognised in the balance sheet, revert to the lessor in the event of default.
|
|
|
|
(b)
Bank overdrafts and bank loans
|
|
|
|
On
27 June 2016, all banking facilities were repaid and a new banking arrangement with BNZ commenced. BNZ has a first ranking
charge over all assets of the Bendon Limited group.
|
|
|
|
The
new debt arrangement entered into on 27 June 2016 includes a term loan facility and interchangeable (working capital) loan
facility.
|
|
|
|
On
13 June 2018, the Company entered into a Deed of Amendment with BNZ to reduce the facility to NZD$20,000,000 (31 January 2018:
NZD$38,489,428). In addition the new facility takes over guarantees and financial instruments totalling NZD$1,345,000.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
19
|
Borrowings
|
|
|
|
(b)
Bank overdrafts and bank loans
|
|
|
|
The
term loan facility of NZD$20,000,000 is repayable on 14 June 2019. The current interest rate on this loan is 5.57% (31 January
2018: 5.55%) per annum. There has been a breach of covenant during the period.
|
|
|
|
Bank
of New Zealand has the first ranking charge over all assets of Naked Brand Group Limited. Under the terms of the major borrowing
facility, the facility is subject to four undertakings being: Interest cover ratio of three times that is first tested as
at 30 April 2019; gross EBITDA ratio measured to 3 months to September 2018 had to be greater than $0, six months to 30 December
2018 is greater than $3 million; inventory and receivables ratio must be greater than 2 times being first measured as at 30
September 2018; and the actual sales and gross margin must not vary by more than 10% from the budget submitted to the Bank.
|
|
|
|
(c)
Shareholder loan - Related party
|
|
|
|
On
19 June 2018, Naked Brand Group Limited issued additional 24,221 Naked shares to the shareholders as part of an agreement
to convert a portion of the outstanding liability (Debt) to equity. The amount of debt converted on this date amounted to
a fair value of $12,244,208. After this conversion, the shareholder loan is fully converted to equity and the outstanding
balance as at 31 January 2019 is nil (31 January 2018: $10,951,295).
|
|
|
|
The
interest rate on the shareholder loans up to the date of conversion was 30% (31 January 2018: 30%) and was increased at the
end of 2014, and was capitalised quarterly. Total interest capitalised during the year ended 31 January is $1.062 million
(year ended 31 January 2018: $2.807 million, 7 months to 31 January 2017 is $3.040 million).
|
|
|
|
(d)
Convertible Notes
|
|
|
|
On
19th June 2018, the holders of USD$2.8m (NZ$4.2m) of convertible notes converted to 16,408 Bendon ordinary shares. The holder
of US$1.0m (NZ$1.42m) of convertible notes elected for their convertible note to be repaid at a future date as agreed. The
amount owing has been classified as a current borrowing and amounted to $1.159 million as at 31 January 2019.
|
|
|
|
(e)
Loan covenants
|
|
|
|
As
at 31 January 2019, there was a breach of the minimum Gross EBITDA ratio and a breach of the Inventory and Receivables ratio.
The Bank has advised that they are currently taking these Breaches under review.
|
|
|
|
(f)
Other loan
|
|
|
|
The
other loan is convertible note which the note holder elected not to convert. This loan is payable at a future date to be agreed.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
|
|
31 January 2019
NZ $000’s
|
|
|
31 January 2018
NZ $000’s
|
|
|
31 January 2017
NZ $000’s
|
|
CURRENT
|
|
|
|
|
|
|
|
|
|
Lease contributions
|
|
|
179
|
|
|
|
412
|
|
|
|
480
|
|
Onerous contracts
|
|
|
-
|
|
|
|
264
|
|
|
|
377
|
|
Make good
|
|
|
742
|
|
|
|
430
|
|
|
|
671
|
|
|
|
|
921
|
|
|
|
1,106
|
|
|
|
1,528
|
|
|
|
31 January 2019
NZ $000’s
|
|
|
31 January 2018
NZ $000’s
|
|
|
31 January 2017
NZ $000’s
|
|
NON-CURRENT
|
|
|
|
|
|
|
|
|
|
Lease contributions
|
|
|
906
|
|
|
|
910
|
|
|
|
702
|
|
Onerous contracts
|
|
|
-
|
|
|
|
-
|
|
|
|
176
|
|
Make good
|
|
|
1,466
|
|
|
|
1,801
|
|
|
|
1,371
|
|
|
|
|
2,372
|
|
|
|
2,711
|
|
|
|
2,249
|
|
|
|
Lease contributions
NZ $000’s
|
|
|
Onerous contracts
NZ $000’s
|
|
|
Make good
NZ $000’s
|
|
|
Total
NZ $000’s
|
|
Opening balance at 1 February 2018
|
|
|
1,321
|
|
|
|
264
|
|
|
|
2,230
|
|
|
|
3,815
|
|
Additional provisions recognised
|
|
|
337
|
|
|
|
-
|
|
|
|
717
|
|
|
|
1,054
|
|
Unused amounts reversed
|
|
|
-
|
|
|
|
-
|
|
|
|
(600
|
)
|
|
|
(600
|
)
|
Unwinding of discounts
|
|
|
-
|
|
|
|
-
|
|
|
|
(84
|
)
|
|
|
(84
|
)
|
Amounts used during the year
|
|
|
(510
|
)
|
|
|
(264
|
)
|
|
|
-
|
|
|
|
(774
|
)
|
Exchange differences
|
|
|
(62
|
)
|
|
|
-
|
|
|
|
(56
|
)
|
|
|
(118
|
)
|
Balance at 31 January 2019
|
|
|
1,086
|
|
|
|
-
|
|
|
|
2,208
|
|
|
|
3,294
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
|
|
Lease contributions
NZ $000’s
|
|
|
Onerous contracts
NZ $000’s
|
|
|
Make good
NZ $000’s
|
|
|
Total
NZ $000’s
|
|
Opening balance at 1 February 2017
|
|
|
1,182
|
|
|
|
553
|
|
|
|
2,042
|
|
|
|
3,777
|
|
Additional provisions recognised
|
|
|
635
|
|
|
|
-
|
|
|
|
595
|
|
|
|
1,230
|
|
Unused amounts reversed
|
|
|
-
|
|
|
|
-
|
|
|
|
(658
|
)
|
|
|
(658
|
)
|
Unwinding of discounts
|
|
|
-
|
|
|
|
-
|
|
|
|
271
|
|
|
|
271
|
|
Amounts used during the year
|
|
|
(547
|
)
|
|
|
(289
|
)
|
|
|
(77
|
)
|
|
|
(913
|
)
|
Exchange differences
|
|
|
50
|
|
|
|
(0
|
)
|
|
|
58
|
|
|
|
108
|
|
Balance at 31 January 2018
|
|
|
1,321
|
|
|
|
264
|
|
|
|
2,230
|
|
|
|
3,815
|
|
|
|
Lease contributions
NZ $000’s
|
|
|
Onerous contracts
NZ $000’s
|
|
|
Make good
NZ $000’s
|
|
|
Total
NZ $000’s
|
|
Opening balance at 1 February 2017
|
|
|
1,318
|
|
|
|
275
|
|
|
|
1,817
|
|
|
|
3,410
|
|
Additional provisions recognised
|
|
|
145
|
|
|
|
508
|
|
|
|
353
|
|
|
|
1,006
|
|
Unused amounts reversed
|
|
|
-
|
|
|
|
-
|
|
|
|
(112
|
)
|
|
|
(112
|
)
|
Unwinding of discounts
|
|
|
-
|
|
|
|
-
|
|
|
|
(9
|
)
|
|
|
(9
|
)
|
Amounts used during the year
|
|
|
(269
|
)
|
|
|
(230
|
)
|
|
|
-
|
|
|
|
(499
|
)
|
Exchange differences
|
|
|
(12
|
)
|
|
|
-
|
|
|
|
(7
|
)
|
|
|
(19
|
)
|
Balance at 31 January 2018
|
|
|
1,182
|
|
|
|
553
|
|
|
|
2,042
|
|
|
|
3,777
|
|
|
Onerous
contracts
|
|
|
|
The
onerous provision relates to a head office lease for which the space is not fully utilised. The provision is calculated using
a pre-tax discount rate of 10.25% (2018: 11.4%, 2017: 11.4%).
|
|
|
|
Make
good
|
|
|
|
In
accordance with certain lease agreements, the Group must refurbish and restore the lease premises to a condition agreed with
the landlord at the end of the lease term or as prescribed. The provision has been calculated using a pre-tax discount rate
of 2% (2018: 2%, 2017: 2%), and other market assumptions and re-assessed annually.
|
|
|
|
During
the 2018 financial year an additional $595 thousand was recognised in relation to new retail leases in Australia. As a result
of the new Auckland office lease, make good requirements were reversed.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
|
|
31
January 2019 NZ $000’s
|
|
|
31
January 2018 NZ $000’s
|
|
|
31
January 2017 NZ $000’s
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29,640,965(2018:
306,028, 2017: 274,839) Ordinary shares
|
|
|
134,183
|
|
|
|
68,727
|
|
|
|
27,948
|
|
|
|
For
the Year Ended 31 January 2019 NZ$000’s
|
|
|
For
the Year Ended 31 January 2018 NZ$000’s
|
|
|
For
the 7 Months Ended 31 January 2017 NZ$000’s
|
|
|
|
|
|
|
|
|
|
|
|
At the beginning of the
reporting period
|
|
|
68,727
|
|
|
|
27,948
|
|
|
|
3,108
|
|
Issuance of new shares
|
|
|
|
|
|
|
|
|
|
|
24,840
|
|
- Cash collected
|
|
|
23,248
|
|
|
|
22,990
|
|
|
|
-
|
|
- Settle Shareholder loan
|
|
|
12,242
|
|
|
|
0
|
|
|
|
|
|
- Shares issued in lieu of consultancy
fee
|
|
|
692
|
|
|
|
-
|
|
|
|
|
|
- Shares issued in lieu of stock payment
|
|
|
4,045
|
|
|
|
-
|
|
|
|
|
|
Convertible note maturity
|
|
|
4,159
|
|
|
|
17,789
|
|
|
|
|
|
Business combination with Naked Brand
Group Inc.
|
|
|
14,196
|
|
|
|
-
|
|
|
|
|
|
Business combination
with FOH Online Inc.
|
|
|
6,872
|
|
|
|
|
|
|
|
|
|
At the end of
the reporting period
|
|
|
134,183
|
|
|
|
68,727
|
|
|
|
27,948
|
|
The
holders of ordinary shares are entitled to participate in dividends and the proceeds on winding up of the Company. On a show of
hands at meetings of the Company, each holder of ordinary shares has one vote in person or by proxy, and upon a poll each share
is entitled to one vote.
The
Company does not have authorised capital or par value in respect of its shares.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
|
|
For
the Year Ended 31 January 2019 Number
|
|
|
For
the Year Ended 31 January 2018 Number
|
|
|
For
the 7 Months Ended 31 January 2017 Number
|
|
|
|
|
|
|
|
|
|
|
|
Naked Brand Group Limited shares issued
on close of the merger between Bendon Limited and Naked Brand Group Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
- Bendon shareholders
|
|
|
20,889,940
|
|
|
|
306,028
|
|
|
|
274,839
|
|
- Naked shareholders
|
|
|
2,068,438
|
|
|
|
|
|
|
|
-
|
|
Shares issued during the period
|
|
|
6,682,587
|
|
|
|
|
|
|
|
-
|
|
At the end of
the period
|
|
|
29,640,965
|
|
|
|
306,028
|
|
|
|
274,839
|
|
The
number of shares for the year ended 31 January 2018 and 31 January 2017 relates to the pre-merger entity Bendon Limited.
|
|
31
January 2019 NZ $000’s
|
|
|
31
January 2018 NZ $000’s
|
|
|
31
January 2017 NZ $000’s
|
|
|
|
|
|
|
|
|
|
|
|
Value
of conversion rights - convertible notes
|
|
|
4,159
|
|
|
|
17,789
|
|
|
|
-
|
|
The
amount shown for other equity is the value of the conversion rights relating to the 15% convertible notes, details of which are
shown in note 16(d).
The
key objectives of the Company when managing capital is to safeguard its ability to continue as a going concern and maintain optimal
benefits to stakeholders. Management also aims to maintain a capital structure that ensures the lowest cost of capital available
to the entity. The Company defines capital as its equity and net debt.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
There
has been no change to capital risk management policies during the year.
Management
are constantly adjusting the capital structure to take advantage of favourable costs of capital or high return on assets. As the
market is constantly changing, management may change the amount of dividends to be paid to shareholders, return capital to shareholders
or sell assets to reduce debt. The Group is not subject to any externally imposed capital requirements.
The
gearing ratio for the years ended 31 January 2019, 31 January 2018 and 31 January 2017 are as follows:
|
|
Note
|
|
|
31
January 2019 NZ $000’s
|
|
|
31
January 2018 NZ $000’s
|
|
|
31
January 2017 NZ $000’s
|
|
Total borrowings
|
|
|
19
|
|
|
|
20,967
|
|
|
|
52,121
|
|
|
|
68,998
|
|
Less Cash and
cash equivalents
|
|
|
11
|
|
|
|
(1,962
|
)
|
|
|
(10,739
|
)
|
|
|
(1,965
|
)
|
Net debt
|
|
|
|
|
|
|
19,005
|
|
|
|
41,382
|
|
|
|
67,033
|
|
Equity
|
|
|
|
|
|
|
10,519
|
|
|
|
(5,710
|
)
|
|
|
(9,044
|
)
|
Total capital
|
|
|
|
|
|
|
29,524
|
|
|
|
35,672
|
|
|
|
57,989
|
|
Gearing ratio
|
|
|
|
|
|
|
64
|
%
|
|
|
116
|
%
|
|
|
116
|
%
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
|
|
31
January 2019 NZ $000’s
|
|
|
31
January 2018 NZ $000’s
|
|
|
31
January 2017 NZ $000’s
|
|
Foreign currency
translation reserve
|
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance
|
|
|
(2,006
|
)
|
|
|
(2,154
|
)
|
|
|
(2,125
|
)
|
Trasnfers in
|
|
|
(7
|
)
|
|
|
148
|
|
|
|
(29
|
)
|
Balance at the end
of the year
|
|
|
(2,013
|
)
|
|
|
(2,006
|
)
|
|
|
(2,154
|
)
|
Foreign
currency translation reserve
Exchange
differences arising on translation of the foreign controlled entity are recognised in other comprehensive income - foreign currency
translation reserve. The cumulative amount is reclassified to profit or loss when the net investment is disposed of.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
|
(a)
|
Basic
and diluted loss per share
|
|
|
For
the Year Ended 31 January 2019 NZ$
|
|
|
For
the Year Ended 31 January 2018 NZ$
|
|
|
For
the 7 Months Ended 31 January 2017 NZ$
|
|
|
For
the Year Ended 30 June 2016 NZ$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From
continuing operations attributable to the ordinary equity holders of the company
|
|
|
(2.01
|
)
|
|
|
(1.79
|
)
|
|
|
(0.82
|
)
|
|
|
(1.13
|
)
|
Total
basic and diluted loss per share attributable to the ordinary equity holders of the company
|
|
|
(2.01
|
)
|
|
|
(1.79
|
)
|
|
|
(0.82
|
)
|
|
|
(1.13
|
)
|
All
convertible notes issued during the period are not included in the calculation of diluted loss per share because they are antidilutive
in nature for the period ended 31 January 2018. These notes could potentially dilute earnings/loss per share in the future.
|
(b)
|
Reconciliation
of loss used in calculating earnings per share
|
|
|
For
the Year Ended 31 January 2019 NZ$000’s
|
|
|
For
the Year Ended 31 January 2018 NZ$000’s
|
|
|
For
the 7 Months Ended 31 January 2017 NZ$000’s
|
|
|
For
the Year Ended 30 June 2016 NZ$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted loss per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit/(loss)
attributable to the ordinary equity holders of the company used in calculating basic earnings per share:
|
|
|
(48,946
|
)
|
|
|
(37,445
|
)
|
|
|
(16,008
|
)
|
|
|
(20,715
|
)
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
|
(c)
|
Weighted
average number of shares used as the denominator
|
|
|
31
January 2019 Number
|
|
|
31
January 2018 Number
|
|
|
31
January 2017 Number
|
|
|
30
June 2016 Number
|
|
Weighted
average number of ordinary shares used as the denominator in calculating basic and diluted loss per share
|
|
|
24,379,019
|
|
|
|
20,915,036
|
|
|
|
19,404,681
|
|
|
|
18,345,000
|
|
*
As a result of the merger between Bendon and Naked on 19 June 2018 the calculation of basic and diluted earnings per share for
2018 and 2017 has been adjusted retrospectively. Number of ordinary shares outstanding has been adjusted to reflect the proportionate
change in the number of shares.
|
(d)
|
Information
concerning the classification of securities
|
Convertible
notes
At
31 January 2019, the Group had no convertible notes.
|
|
For
the Year Ended 31 January 2019 NZ$000’s
|
|
|
For
the Year Ended 31 January 2018 NZ$000’s
|
|
|
For
the 7 Months Ended 31 January 2017 NZ$000’s
|
|
|
|
|
|
|
|
|
|
|
|
(Accumulated losses)/retained
earnings at the beginning of ther period
|
|
|
(72,431
|
)
|
|
|
(34,838
|
)
|
|
|
(18,859
|
)
|
Loss for the
period
|
|
|
(49,220
|
)
|
|
|
(37,593
|
)
|
|
|
(15,979
|
)
|
Accumulated
losses at the end of ther period
|
|
|
(121,651
|
)
|
|
|
(72,431
|
)
|
|
|
(34,838
|
)
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
25
|
Capital
and Leasing Commitments
|
|
|
31
January 2019 NZ $000’s
|
|
|
31
January 2018 NZ $000’s
|
|
|
31
January 2017 NZ $000’s
|
|
Minimum lease payments under non-cancellable
operating lease
|
|
|
|
|
|
|
|
|
|
|
|
|
- not later than one year
|
|
|
8,533
|
|
|
|
9,618
|
|
|
|
9,472
|
|
- between one year and five years
|
|
|
18,039
|
|
|
|
14,943
|
|
|
|
14,435
|
|
- later than
five years
|
|
|
1,485
|
|
|
|
528
|
|
|
|
59
|
|
|
|
|
28,058
|
|
|
|
25,089
|
|
|
|
23,966
|
|
Operating
leases are in place for leased premises and vehicles, and normally have a term between 1 and 11 years. Lease payments are increased
on an annual basis to reflect market rentals.
|
(b)
|
Contracted
Commitments
|
|
|
31
January 2019 NZ $000’s
|
|
|
31
January 2018 NZ $000’s
|
|
|
31
January 2017 NZ $000’s
|
|
Licence contract
|
|
|
|
|
|
|
|
|
|
|
|
|
- not later than one year
|
|
|
4,286
|
|
|
|
3,797
|
|
|
|
3,652
|
|
- between one year and five years
|
|
|
8,696
|
|
|
|
12,009
|
|
|
|
15,917
|
|
- later than
five years
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
12,982
|
|
|
|
15,806
|
|
|
|
19,569
|
|
The
Group has an exclusive licence to use the trademark and name Heidi Klum in the manufacture, promotion, sale and distribution of
product. The contract was executed on 26 September 2014 and commenced on 1 January 2015. The contract has a 7 year term with no
rights to renew. Licence royalties are calculated based on net sales, and the minimum guarantee payments payable by the Group
are set out above.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
The
Group sub leases its US and Australian premises under a commercial lease. These non-cancellable leases have terms between 1 and
6 years. All leases include an option for the Group to increase rent to current market rental on an annual basis.
The
future minimum lease payments under non-cancellable leases are:
|
|
31
January 2019 NZ $000’s
|
|
|
31
January 2018 NZ $000’s
|
|
|
31
January 2017 NZ $000’s
|
|
|
|
|
|
|
|
|
|
|
|
- not later than one year
|
|
|
441
|
|
|
|
166
|
|
|
|
503
|
|
- between one year and five years
|
|
|
493
|
|
|
|
-
|
|
|
|
1,076
|
|
- later than
five years
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total minimum
lease payments
|
|
|
934
|
|
|
|
166
|
|
|
|
1,579
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
27
|
Financial
Risk Management
|
The
Group is exposed to a variety of financial risks through its use of financial instruments.
The
Group’s overall risk management plan seeks to minimise potential adverse effects due to the unpredictability of financial
markets.
The
most significant financial risks to which the Group is exposed to are described below:
Specific
risks
|
●
|
Liquidity
risk
|
|
●
|
Credit
risk
|
|
●
|
Market
risk - currency risk, interest rate risk and price risk
|
Financial
instruments used
The
principal categories of financial instrument used by the Group are:
|
●
|
Trade
receivables
|
|
●
|
Cash
at bank
|
|
●
|
Bank
overdraft
|
|
●
|
Trade
and other payables
|
|
●
|
Floating
rate bank loans
|
|
●
|
Forward
currency contracts
|
|
●
|
Shareholders
loan
|
|
Objectives,
policies and processes
|
The
Board of Directors receives overall responsibility for the establishment of the Group’s financial risk management framework.
This includes the development of policies covering specific areas such as foreign exchange risk, interest rate risk, credit risk
and the use of derivatives.
Risk
management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities.
The
day-to-day risk management is carried out by the Group’s finance function under policies and objectives which have been
approved by the Board of Directors.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
27
|
Financial
Risk Management
|
Objectives,
policies and processes
Mitigation
strategies for specific risks faced are described below:
Liquidity
risk
Liquidity
risk arises from the Group’s management of working capital and the finance charges and principal repayments on its debt
instruments. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due.
The
Group’s policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities as and when they
fall due.
The
Group manages its liquidity needs by carefully monitoring scheduled debt servicing payments for long term financial liabilities
as well as cash outflows due in day to day business.
The
timing of cash flows presented in the table to settle financial liabilities reflects the earliest contractual settlement dates
and does not reflect management’s expectations that banking facilities will be rolled forward. The amounts disclosed in
the table are the undiscounted contracted cash flows and therefore the balances in the table may not equal the balances in the
consolidated balance sheets due to the effect of discounting.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
27
|
Financial
Risk Management
|
The
Group’s liabilities have contractual maturities which are summarised below:
|
|
Non-derivatives
Borrowings NZ$000’s
|
|
|
Non-derivatives
Trade paybles NZ$000’s
|
|
|
Non-derivatives
Total NZ$000’s
|
|
|
Derivatives
Gross future cash settlement on forward currency contracts - inflow NZ$000’s
|
|
|
Derivatives
Gross future cash settlement on forward currency contracts - (outflow) NZ$000’s
|
|
|
Derivatives
Total NZ$000’s
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Not later than 1
month
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31 January 2019
|
|
|
1,329
|
|
|
|
23,580
|
|
|
|
24,908
|
|
|
|
18,325
|
|
|
|
(19,212
|
)
|
|
|
(887
|
)
|
31 January 2018
|
|
|
24,677
|
|
|
|
21,143
|
|
|
|
45,820
|
|
|
|
13,577
|
|
|
|
(13,950
|
)
|
|
|
(373
|
)
|
31 January 2017
|
|
|
56,333
|
|
|
|
19,221
|
|
|
|
75,554
|
|
|
|
2,078
|
|
|
|
(2,250
|
)
|
|
|
(172
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 to 3 months
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31 January 2019
|
|
|
184
|
|
|
|
-
|
|
|
|
184
|
|
|
|
9,610
|
|
|
|
(10,061
|
)
|
|
|
(451
|
)
|
31 January 2018
|
|
|
148
|
|
|
|
-
|
|
|
|
148
|
|
|
|
13,836
|
|
|
|
(14,453
|
)
|
|
|
(617
|
)
|
31 January 2017
|
|
|
129
|
|
|
|
-
|
|
|
|
129
|
|
|
|
9,900
|
|
|
|
(11,326
|
)
|
|
|
(1,426
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 months to 1 year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31 January 2019
|
|
|
20,184
|
|
|
|
-
|
|
|
|
20,184
|
|
|
|
4,976
|
|
|
|
(5,121
|
)
|
|
|
(145
|
)
|
31 January 2018
|
|
|
27,247
|
|
|
|
-
|
|
|
|
27,247
|
|
|
|
20,895
|
|
|
|
(21,993
|
)
|
|
|
(1,098
|
)
|
31 January 2017
|
|
|
18,631
|
|
|
|
-
|
|
|
|
18,631
|
|
|
|
37,855
|
|
|
|
(40,445
|
)
|
|
|
(2,590
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 to 5 years
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31 January 2019
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
31 January 2018
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
31 January 2017
|
|
|
323
|
|
|
|
-
|
|
|
|
323
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31 January 2019
|
|
|
21,697
|
|
|
|
23,580
|
|
|
|
45,277
|
|
|
|
32,912
|
|
|
|
(34,395
|
)
|
|
|
(1,483
|
)
|
31 January 2018
|
|
|
52,072
|
|
|
|
21,143
|
|
|
|
73,215
|
|
|
|
48,308
|
|
|
|
(50,396
|
)
|
|
|
(2,088
|
)
|
31 January 2017
|
|
|
75,416
|
|
|
|
19,221
|
|
|
|
94,637
|
|
|
|
49,833
|
|
|
|
(54,021
|
)
|
|
|
(4,188
|
)
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
27
|
Financial
Risk Management
|
Credit
Risk
Credit
risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group.
Credit
risk arises from cash and cash equivalents, derivative financial instruments, as well as credit exposure to wholesale and retail
customers, including outstanding receivables and committed transactions.
Trade
receivables and contract assets
Trade
receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation
is performed on the financial condition of accounts receivable.
The
Group has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss
from defaults. The utilisation of credit limits by customers is regularly monitored by line management. Customers who subsequently
fail to meet their credit terms are required to make purchases on a prepayment basis until creditworthiness can be re established.
Management
considers that all the financial assets that are not impaired for each of the reporting dates under review are of good credit
quality, including those that are past due.
The
Group has no significant concentration of credit risk with respect to any single counterparty or group of counterparties.
The
credit risk for liquid funds and other short-term financial assets is considered negligible, since the counterparties are reputable
banks with high quality external credit ratings.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
27
|
Financial
Risk Management
|
Credit
Risk
On
a geographical basis, the Group has significant credit risk exposures in New Zealand, Australia, United States and United Kingdom
given the substantial operations in those regions.
The
credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings
if available or historical information about counterparty default rate.
|
|
31 January 2019
|
|
|
31 January 2018
|
|
|
31 January 2017
|
|
|
|
NZ $000’s
|
|
|
NZ $000’s
|
|
|
NZ $000’s
|
|
Trade receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
Counterparty without external credit ratings
|
|
|
|
|
|
|
|
|
|
|
|
|
New customer less than 6 months
|
|
|
42
|
|
|
|
12
|
|
|
|
187
|
|
Existing customers (more than 6 months with default in past)
|
|
|
7,747
|
|
|
|
9,970
|
|
|
|
26,312
|
|
Total trade receivables
|
|
|
7,789
|
|
|
|
9,982
|
|
|
|
26,499
|
|
|
|
31 January 2019
|
|
|
31 January 2018
|
|
|
31 January 2017
|
|
|
|
NZ $000’s
|
|
|
NZ $000’s
|
|
|
NZ $000’s
|
|
Credit ratings
|
|
|
|
|
|
|
|
|
|
|
|
|
AA-
|
|
|
1,915
|
|
|
|
10,591
|
|
|
|
265
|
|
A+
|
|
|
-
|
|
|
|
94
|
|
|
|
(11
|
)
|
|
|
|
1,915
|
|
|
|
10,685
|
|
|
|
254
|
|
The
Group has no significant concentration of credit risk with respect to any single counterparty or group of counterparties.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
27
|
Financial
Risk Management
|
Market
risk
Market
risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
prices.
(i)
Foreign exchange risk
Exposure
to foreign exchange risk may result in the fair value or future cash flows of a financial instrument fluctuating due to movement
in foreign exchange rates of currencies in which financial instruments are held in currencies other than the functional currency.
Exposures
to currency exchange rates arise from overseas sales and purchases, which are primarily denominated in currencies other than the
functional currency, in particular USD.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
27
|
Financial
Risk Management
|
Foreign
currency denominated financial assets and liabilities, translated into New Zealand Dollars at the closing rate, are as follows:
|
|
AUD
NZ$000’s
|
|
|
USD
NZ$000’s
|
|
|
GBP
NZ$000’s
|
|
|
EUR
NZ$000’s
|
|
|
HKD
NZ$000’s
|
|
|
Total
NZ$000’s
|
|
31 January 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
|
51
|
|
|
|
42
|
|
|
|
-
|
|
|
|
285
|
|
|
|
-
|
|
|
|
378
|
|
Trade payables
|
|
|
1
|
|
|
|
9,035
|
|
|
|
8
|
|
|
|
61
|
|
|
|
7
|
|
|
|
9,111
|
|
Cash and cash equivalents
|
|
|
623
|
|
|
|
149
|
|
|
|
38
|
|
|
|
8
|
|
|
|
11
|
|
|
|
829
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31 January 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
|
328
|
|
|
|
199
|
|
|
|
-
|
|
|
|
1,376
|
|
|
|
-
|
|
|
|
1,903
|
|
Trade payables
|
|
|
781
|
|
|
|
11,209
|
|
|
|
74
|
|
|
|
29
|
|
|
|
53
|
|
|
|
12,146
|
|
Cash and cash equivalents
|
|
|
1,660
|
|
|
|
7,190
|
|
|
|
77
|
|
|
|
92
|
|
|
|
165
|
|
|
|
9,185
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31 January 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
|
424
|
|
|
|
211
|
|
|
|
-
|
|
|
|
1,509
|
|
|
|
-
|
|
|
|
2,144
|
|
Trade payables
|
|
|
315
|
|
|
|
8,557
|
|
|
|
131
|
|
|
|
32
|
|
|
|
16
|
|
|
|
9,051
|
|
Cash and cash equivalents
|
|
|
926
|
|
|
|
401
|
|
|
|
131
|
|
|
|
388
|
|
|
|
28
|
|
|
|
1,874
|
|
The
following table illustrates the sensitivity of the net result for the year and equity in regards to the Group’s financial
assets and financial liabilities and the US dollar New Zealand Dollar, Australian Dollar New Zealand Dollar, GB Pound New Zealand
Dollar, Euro New Zealand Dollar, and Hong Kong Dollar New Zealand Dollar exchange rates. There have been no changes in the assumptions
calculating this sensitivity from prior years.
It
assumes a 10% change of the New Zealand Dollar / Australian Dollar exchange rate for the year ended 31 January 2019 (31 January
2018: 10%, 31 January 2017: 10%). A 10% change is considered for the New Zealand Dollar / US Dollar exchange rate (31 January
2018: 10%, 31 January 2017: 10%). A 10% change is considered for the New Zealand Dollar / GB Pound exchange rate (31 January 2018:
10%, 31 January 2017: 10%). A 10% change is considered for the New Zealand Dollar / Euro exchange rate (31 January 2018: 10%,
31 January 2017: 10%). All of these percentages have been determined based on the average market volatility in exchange rates
in the previous 12 months.
The
year end rate is 0.9513 AUD, 0.6903 USD, 0.5265 GBP, 0.6008 EUR and 5.4138 HKD.
The
sensitivity analysis is based on the foreign currency financial instruments held at the reporting date and also takes into account
forward exchange contracts that offset effects from changes in currency exchange rates.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
27
|
Financial
Risk Management
|
If
the New Zealand Dollar had strengthened and weakened against the Australian Dollar, US Dollar, GB Pound, Euro and HK Dollar by
10% (31 January 2018: 10%, 31 January 2017: 10%) and 10% (31 January 2018: 10%, 31 January 2017: 10%) respectively then this would
have had the following impact:
|
|
NZ$000’s
|
|
|
|
+10%
|
|
|
-10%
|
|
USD
|
|
|
|
|
|
|
|
|
Net results/Equity (31 January 2018)
|
|
|
(954
|
)
|
|
|
954
|
|
Net results/Equity (31 January 2017)
|
|
|
(1,509
|
)
|
|
|
1,509
|
|
Net results/Equity (30 June 2016)
|
|
|
(1,196
|
)
|
|
|
1,196
|
|
|
|
|
|
|
|
|
|
|
AUD
|
|
|
|
|
|
|
|
|
Net results/Equity (31 January 2018)
|
|
|
(5
|
)
|
|
|
5
|
|
Net results/Equity (31 January 2017)
|
|
|
(805
|
)
|
|
|
805
|
|
Net results/Equity (30 June 2016)
|
|
|
86
|
|
|
|
(86
|
)
|
|
|
|
|
|
|
|
|
|
GBP
|
|
|
|
|
|
|
|
|
Net results/Equity (31 January 2018)
|
|
|
(1
|
)
|
|
|
1
|
|
Net results/Equity (31 January 2017)
|
|
|
(175
|
)
|
|
|
175
|
|
Net results/Equity (30 June 2016)
|
|
|
34
|
|
|
|
(34
|
)
|
|
|
|
|
|
|
|
|
|
EUR
|
|
|
|
|
|
|
|
|
Net results/Equity (31 January 2018)
|
|
|
(32
|
)
|
|
|
32
|
|
Net results/Equity (31 January 2017)
|
|
|
(136
|
)
|
|
|
136
|
|
Net results/Equity (30 June 2016)
|
|
|
186
|
|
|
|
(186
|
)
|
|
|
|
|
|
|
|
|
|
HKD
|
|
|
|
|
|
|
|
|
Net results/Equity (31 January 2018)
|
|
|
(1
|
)
|
|
|
1
|
|
Net results/Equity (31 January 2017)
|
|
|
(14
|
)
|
|
|
14
|
|
Net results/Equity (30 June 2016)
|
|
|
1
|
|
|
|
(1
|
)
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
27
|
Financial
Risk Management
|
Exposures
to foreign exchange rates vary during the year depending on the volume of overseas transactions. Nonetheless, the analysis above
is considered to be representative of the Group’s exposure to foreign currency risk.
Forward
exchange contracts
The
Group has open forward exchange contracts at the end of the reporting period relating to highly probable forecast transactions
and recognised financial assets and financial liabilities. These contracts commit the Group to buy specified amounts of foreign
currencies in the future at specified exchange rates. The Group has a policy of requiring that forward exchange contracts be entered
into where future commitments are entered into requiring settlement at a time in excess of 1 month but less than 1 year, to a
value of approximately 75% total foreign exchange exposure. Contracts are taken out with terms that reflect the underlying settlement
terms of the commitment to the maximum extent possible so that hedge ineffectiveness is minimised.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
27
|
Financial
Risk Management
|
The
following table summarises the notional amount of the Group’s commitments in relation to forward exchange contracts.
|
|
Notional Accounts
|
|
|
Average Exchange
Rate
|
|
|
|
31 January 2019
NZ $000’s
|
|
|
31 January 2018
NZ $000’s
|
|
|
31 January 2017
NZ $000’s
|
|
|
31 January 2019
NZ $000’s
|
|
|
31 January 2018
NZ $000’s
|
|
|
31 January 2017
NZ $000’s
|
|
Buy USD/ sell NZD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Settlement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than 6 months
|
|
|
34,395
|
|
|
|
48,149
|
|
|
|
47,292
|
|
|
|
0.6620
|
|
|
|
0.7061
|
|
|
|
0.6687
|
|
6 months to 1 year
|
|
|
-
|
|
|
|
-
|
|
|
|
3,479
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.7186
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buy AUD/ sell NZD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Settlement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
$
|
|
|
$
|
|
|
$
|
|
Less than 6 months
|
|
|
-
|
|
|
|
2,247
|
|
|
|
2,250
|
|
|
|
-
|
|
|
|
0.8900
|
|
|
|
0.8890
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buy GBP/ sell NZD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Settlement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than 6 months
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
NZ$000’s
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.5784
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
27
|
Financial
Risk Management
|
(ii)
Interest rate risk
The
Group is exposed to interest rate risk as funds are borrowed at floating and fixed rates. Borrowings issued at fixed rates expose
the Group to fair value interest rate risk.
The
Group’s policy is to minimise interest rate cash flow risk exposures on long term financing. Longer term borrowings are
therefore usually at fixed rates. At the reporting date, the Group is exposed to changes in market interest rates through its
bank borrowings, which are subject to variable interest rates.
|
|
31 January 2019
NZ $000’s
|
|
|
31 January 2018
NZ $000’s
|
|
|
31 January 2017
NZ $000’s
|
|
|
|
|
|
|
|
|
|
|
|
Floating rate instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank overdrafts
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Working capital financing bank facility
|
|
|
-
|
|
|
|
22,489
|
|
|
|
31,710
|
|
Convertible notes
|
|
|
-
|
|
|
|
1,740
|
|
|
|
16,474
|
|
Borrowings
|
|
|
20,000
|
|
|
|
16,000
|
|
|
|
16,000
|
|
|
|
|
20,000
|
|
|
|
40,229
|
|
|
|
64,184
|
|
The
following table illustrates the sensitivity of the net result for the year and equity to a reasonably possible change in interest
rates of +1.00%/ 1.00% (2018: +1.00%/ 1.00%, 2017: +1.00%/ 1.00%), with effect from the beginning of the year. These changes are
considered to be reasonably possible based on observation of current market conditions and economist reports.
The
calculations are based on the financial instruments held at each reporting date. All other variables are held constant.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
27
|
Financial
Risk Management
|
|
|
NZ $000’s
|
|
|
|
1.00%
|
|
|
1.00%
|
|
Net results/Equity (31 January 2019)
|
|
|
200
|
|
|
|
(200
|
)
|
Net results/Equity (31 January 2018)
|
|
|
402
|
|
|
|
(402
|
)
|
Net results/Equity (31 January 2017)
|
|
|
642
|
|
|
|
(642
|
)
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
28
|
Tax
assets and liabilities
|
|
|
Opening Balance
NZ$000’s
|
|
|
Charged to Income
NZ$000’s
|
|
|
Charged directly to Equity
NZ$000’s
|
|
|
Changes in Tax Rate
NZ$000’s
|
|
|
Exchange Differences
NZ$000’s
|
|
|
Closing Balance
NZ$000’s
|
|
Deferred tax assets/(liabilities)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carried forward tax losses
|
|
|
630
|
|
|
|
692
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,322
|
|
Intangible assets
|
|
|
(630
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(630
|
)
|
Balance at 31 January 2019
|
|
|
-
|
|
|
|
692
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
692
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carried forward tax losses
|
|
|
630
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
630
|
|
Intangible assets
|
|
|
(630
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(630
|
)
|
Balance at 31 January 2018
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carried forward tax losses
|
|
|
630
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
630
|
|
Intangible assets
|
|
|
(630
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(630
|
)
|
Balance at 31 January 2017
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
No
final dividend will be paid in respect of the period ended 31 January 2019 (31 January 2018: Nil, 31 January 2017).
Franking
account
|
|
31 January 2019
NZ $000’s
|
|
|
31 January 2018
NZ $000’s
|
|
|
31 January 2017
NZ $000’s
|
|
Australian franking credits available for subsequent financial years at a tax rate of 30%
|
|
|
3,995
|
|
|
|
3,995
|
|
|
|
3,757
|
|
New Zealand imputation credits available for subsequent financial years at a tax rate of 28%
|
|
|
236
|
|
|
|
236
|
|
|
|
235
|
|
The
above amounts are based on the dividend franking account at period-end adjusted for:
|
(a)
|
Franking
credits that will arise from the payment of the current tax liabilities;
|
|
(b)
|
Franking
debits that will arise from the payment of dividends recognised as a liability at the period end;
|
|
(c)
|
Franking
credits that will arise from the receipt of dividends recognised as receivables at the end of the period.
|
30
|
Key
Management Personnel Remuneration
|
Key
management personnel remuneration included within employee expenses for the period is shown below:
|
|
For the Year Ended
31 January 2019
NZ$000’s
|
|
|
For the Year Ended
31 January 2018
NZ$000’s
|
|
|
For the 7 Months Ended
31 January 2017
NZ$000’s
|
|
|
For the Year Ended
30 June 2016
NZ$000’s
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term employee benefits
|
|
|
2,056
|
|
|
|
1,743
|
|
|
|
1,492
|
|
|
|
1,752
|
|
|
|
|
2,056
|
|
|
|
1,743
|
|
|
|
1,492
|
|
|
|
1,752
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
31
|
Interests
in Subsidiaries
|
Composition
of the Group
|
|
Principal place of business / country of Incorporation
|
|
Percentage
Owned (%)*
31 January 2019
|
|
|
Percentage
Owned (%)*
31 January
2018
|
|
|
Percentage
Owned (%)*
31 January
2017
|
|
Subsidiaries:
|
|
|
|
|
|
|
|
|
|
|
|
Bendon Retail Limited
|
|
New Zealand
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
Bendon Holdings Limited
|
|
New Zealand
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
Bendon Holdings Pty Limited
|
|
Australia
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
Bendon Pty Limited
|
|
Australia
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
Bendon Intimates Pty Limited
|
|
Australia
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
PS Holdings No. 1 Pty Limited
|
|
Australia
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
Pleasure State Pty Limited
|
|
Australia
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
Pleasure State (HK) Limited
|
|
Hong Kong
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
Bendon UK Limited
|
|
United Kingdom
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
Bendon USA Inc
|
|
United States of America
|
|
|
100
|
|
|
|
100
|
|
|
|
100
|
|
Bendon Limited**
|
|
New Zealand
|
|
|
100
|
|
|
|
-
|
|
|
|
-
|
|
Naked Brand Inc.
|
|
United States of America
|
|
|
100
|
|
|
|
-
|
|
|
|
-
|
|
FOH Online Corp Inc.
|
|
United States of America
|
|
|
100
|
|
|
|
-
|
|
|
|
-
|
|
*The
percentage of ownership interest held is equivalent to the percentage voting rights for all subsidiaries.
**
Bendon Limited was the parent entity in the periods ended 31 January 2018 and 31 January 2017.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
32
|
Fair
Value Measurement
|
The
Group measures the following assets and liabilities at fair value on a recurring basis:
●
|
Financial
assets - derivative financial instruments
|
●
|
Financial
liabilities - derivative financial instruments
|
Fair
value hierarchy
All
assets and liabilities measured at fair value to be assigned to a level in the fair value hierarchy as follows:
Level 1
|
|
Unadjusted quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date.
|
Level 2
|
|
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
|
Level 3
|
|
Unobservable inputs for the asset or liability.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
Fair
value hierarchy
The
table below shows the assigned level for each asset and liability held at fair value by the Group:
|
|
Level
1
NZ$000’s
|
|
|
Level
2
NZ$000’s
|
|
|
Level
3
NZ$000’s
|
|
|
Total
|
|
31 January 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring fair value measurements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
|
|
-
|
|
|
|
1,484
|
|
|
|
-
|
|
|
|
1,484
|
|
Derivative on Convertible Notes
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31 January 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring fair value measurements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
|
|
-
|
|
|
|
2,087
|
|
|
|
-
|
|
|
|
2,087
|
|
Derivative on Convertible Notes
|
|
|
-
|
|
|
|
-
|
|
|
|
1,110
|
|
|
|
1,110
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
31 January 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring fair value measurements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts
|
|
|
-
|
|
|
|
4,188
|
|
|
|
-
|
|
|
|
4,188
|
|
Derivative on Convertible Notes
|
|
|
-
|
|
|
|
-
|
|
|
|
4,112
|
|
|
|
4,112
|
|
There
were no transfers between levels during the financial periods.
The
carrying amount of trade and other receivables and trade and other payables are assumed to approximate their fair values due to
their short term nature. Bank loans approximate fair value of the carrying amount on the basis of the variable nature of the interest
rates associated with the
Valuation
techniques for fair value measurements categorised within level 2
The
fair value of derivative financial instruments is determined using valuation techniques which maximise the use of observable market
data where it is available and relies as little as possible on entity specific estimates.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
Valuation
techniques for fair value measurements categorised within level 3
The
fair value of the derivative on convertible notes has been determined using a Black Scholes model. Measurement inputs include
share price on measurement date, expected term of the instrument, risk free rate, expected volatility and expected dividend rate.
The Group used valuations specialists to perform these valuations.
Fair
value measurements using significant unobservable movements (level 3)
The
following table presents the changes in level 3 instruments for the year ended 31 January 2019.
|
|
Convertible
note liability
NZ$000’s
|
|
Balance at 31 January 2018
|
|
|
1,110
|
|
Changes in fair value
|
|
|
|
|
Conversion
|
|
|
(1,110
|
)
|
Balance at 31 January 2019
|
|
|
-
|
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
Contingent
Liabilities
The
Group had the following contingent liabilities at the end of the reporting period:
|
|
For the Year
Ended
31 January 2019
NZ$000’s
|
|
|
For the Year
Ended
31 January 2018
NZ$000’s
|
|
|
For the 7 Months Ended
31 January 2017
NZ$000’s
|
|
|
|
|
|
|
|
|
|
|
|
Rent guarantees to certain landlords
|
|
|
419
|
|
|
|
419
|
|
|
|
571
|
|
Standby letter of credit to JP Morgan Chase Bank
|
|
|
291
|
|
|
|
291
|
|
|
|
286
|
|
Guarantee provided to UK Customs Department
|
|
|
329
|
|
|
|
329
|
|
|
|
282
|
|
Guarantee provided to ANZ for Merchant Service
|
|
|
172
|
|
|
|
172
|
|
|
|
-
|
|
A
shareholder has lodged a court Action against the Group claiming they did not receive the correct number of shares in the Group
on completion of the merger between Naked Inc. and Bendon Limited on 19 June 2018. The Group has sought to have this claim dismissed
by the Court on the basis that the Group had no contract with the shareholder and that the shareholder did not have a possessory
right over a certain number of shares in the Group.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
|
(a)
|
The
Group’s main related parties are entities owned/controlled by shareholders:
|
|
(b)
|
Loans
(to)/from related parties
|
|
|
Opening
balance
NZ$
|
|
|
Closing
balance
NZ$
|
|
|
|
|
|
|
|
|
Loans to related parties
|
|
|
|
|
|
|
|
|
Cullen Investments Limited - 31 January 2019
|
|
|
11,535,677
|
|
|
|
-
|
|
Cullen Investments Limited - 31 January 2018
|
|
|
13,051,321
|
|
|
|
11,535,677
|
|
Cullen Investments Limited - 31 January 2017
|
|
|
9,613,014
|
|
|
|
13,051,321
|
|
Whitespace Atelier Limited - 31 January 2019
|
|
|
272,665
|
|
|
|
281,714
|
|
Whitespace Atelier Limited - 31 January 2018
|
|
|
-
|
|
|
|
272,665
|
|
FOH Online Inc. - 31 January 2018
|
|
|
3,518,009
|
|
|
|
-
|
|
FOH Online Inc. - 31 January 2018
|
|
|
-
|
|
|
|
3,518,009
|
|
|
|
|
|
|
|
|
|
|
Loans from related parties
|
|
|
|
|
|
|
|
|
SBL Holdings - 31 January 2019
|
|
|
-
|
|
|
|
(1,448,646
|
)
|
Naked Inc. - 31 January 2019
|
|
|
(1,368,577
|
)
|
|
|
-
|
|
Naked Inc. - 31 January 2018
|
|
|
-
|
|
|
|
(1,368,577
|
)
|
Naked Inc. - 31 January 2017
|
|
|
-
|
|
|
|
-
|
|
EJ Watson - 31 January 2019
|
|
|
|
|
|
|
(2,289,212
|
)
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
|
(b)
|
Loans
(to)/from related parties
|
On
15th November 2018, the Group entered into a Stock Purchase Agreement with the shareholders of FOH Online Corp (FOH), which included
Cullen Investments Limited (Cullen), that the Group will purchase all of the issued and outstanding shares of FOH. Under the terms
of the Agreement, the amount owed by Cullen was fully forgiven by the Group (31 January 2018: $11,535,677).
Whitespace
Atelier Limited (“Whitespace”) is owned by a shareholder of the Naked Brand Group Limited. Beginning 1 Feb 2017, Whitespace
is engaged by the Group to procure stock from various suppliers at competitive prices. During the year ended 31 January 2019,
purchases amounting to $12,720,499 (31 January 2018: $13,281,727) have been made from Whitespace. As at 31 January 2018, the Group
has made prepayments to Whitespace amounting to $281,714 (31 January 2018: $272,665).
Subsequent
to the merger with Naked Brand Group Inc. on 19th June 2018, Naked Brand Group Inc. became part of the Group as at 31 January
2019. The balances between the subsidiaries are eliminated in the Group Balance Sheet (31 January 2018: $1,368,557).
Subsequent
to the acquisition of FOH Online Inc. on 15th November 2018, FOH Online Inc. became part of the Group as at 31 January 2019. The
balances between the subsidiaries are eliminated in the Group Balance Sheet (31 January 2018: $3,518,009).
During
the period, a shareholder SBL Holdings Limited loaned the business funds to be utilised as working capital in the business.
During
the period, and subsequent to the acquisition of FOH Online Inc, the balance of the loan outstanding from EJ Watson as at 31 January
2019 was$ 2,289,212, which includes interest accrued for the period of $81,866 (31 January 2018: Nil)
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
Reconciliation
of result for the year to cashflows from operating activities
Reconciliation
of net income to net cash provided by operating activities:
|
|
For the Year Ended
31 January 2019
NZ$000’s
|
|
|
For the Year Ended
31 January 2018
NZ$000’s
|
|
|
For the 7 Months Ended
31 January 2017
NZ$000’s
|
|
|
For the Year Ended
30 June 2016
NZ$000’s
|
|
Loss for the period
|
|
|
(49,220
|
)
|
|
|
(37,593
|
)
|
|
|
(15,979
|
)
|
|
|
(20,746
|
)
|
Cash flows excluded from profit attributable to operating activities interest paid on
borrowings
|
|
|
3,400
|
|
|
|
8,792
|
|
|
|
6,238
|
|
|
|
10,182
|
|
Non-cash flows in profit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- depreciation and amortisation expense
|
|
|
2,382
|
|
|
|
3,030
|
|
|
|
1,842
|
|
|
|
3,516
|
|
- impairment expense
|
|
|
8,173
|
|
|
|
1,914
|
|
|
|
292
|
|
|
|
2,157
|
|
- fair value gain/(loss) on Convertible Notes derivative
|
|
|
775
|
|
|
|
(2,393
|
)
|
|
|
592
|
|
|
|
-
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- (increase) in trade and other receivables
|
|
|
14,267
|
|
|
|
14,925
|
|
|
|
(4,748
|
)
|
|
|
(6,518
|
)
|
- (increase) in current tax receivables
|
|
|
(355
|
)
|
|
|
52
|
|
|
|
35
|
|
|
|
(88
|
)
|
- (increase)/decrease in derivative assets
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,289
|
)
|
- (increase)/decrease in inventories
|
|
|
13,350
|
|
|
|
6,638
|
|
|
|
(179
|
)
|
|
|
8,088
|
|
- (increase)/decrease in deferred tax asset/(liability)
|
|
|
(692
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
5,589
|
|
- (increase)/decrease in related party receivables
|
|
|
6,531
|
|
|
|
(906
|
)
|
|
|
(3,438
|
)
|
|
|
(5,603
|
)
|
- (increase)/decrease in trade and other payables
|
|
|
(5,681
|
)
|
|
|
6,956
|
|
|
|
2,078
|
|
|
|
(11,113
|
)
|
- (increase)/decrease in income taxes payable
|
|
|
226
|
|
|
|
152
|
|
|
|
635
|
|
|
|
(483
|
)
|
- (increase)/decrease in provisions
|
|
|
(522
|
)
|
|
|
39
|
|
|
|
367
|
|
|
|
311
|
|
- (increase)/decrease in foreign currency derivative liability
|
|
|
(1,712
|
)
|
|
|
(5,104
|
)
|
|
|
(1,343
|
)
|
|
|
5,530
|
|
- net exchange differences
|
|
|
(355
|
)
|
|
|
(618
|
)
|
|
|
90
|
|
|
|
1,849
|
|
Cashflows from operations
|
|
|
(9,434
|
)
|
|
|
(4,116
|
)
|
|
|
(13,518
|
)
|
|
|
(5,040
|
)
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
36
|
Events
occurring after the reporting date
|
On
February 14, 2019, Carole Hochman resigned from the board of directors and as Executive Chairman.
In
March 2019 the following share transactions occurred :
|
(1)
|
1.4m
ordinary shares and 1.4m warrants were issued in exchange for services to the value of NZ $0.1m / US$ 87k. The warrants have
an exercise price of US$0.50 and expire 2 years from the date of issue.
|
|
(2)
|
The
issue of 11,248,415 ordinary shares to trade creditors in satisfaction of NZ$6.6m / US$4.5m trade payables, at a share price
of US$0.40.
|
|
(3)
|
The
issue of 2,119,178 ordinary shares in settlement of a promissory notes in the amount of NZ$1.25m / US$847,671, at a share
price of US$0.40 per share.
|
|
(4)
|
The
issue of 4,510,588 ordinary shares to investors in a private placement at a share price of US$0.255 for a total cash consideration
of NZ$1.69m / US$1.15m.
|
|
|
The
investors also received warrants to purchase 4.510,588 ordinary shares, at an exercise price of US$0.306 and expiry 2 years
from the date of issue.
|
On
April 2, 2019, the board of directors appointed Anna Johnson as Chief Executive Officer. Previously Ms. Johnson was Chief Executive
Officer of Bendon Limited, the main operating entity within the Company. At the same time, Justin Davis-Rice was appointed as
Executive Chairman and resigned as our Chief Executive Officer.
In
May 2019, the following share of funding transactions occurred :
|
(1)
|
NZ$4.3m
/ US$3m cash was raised via a secured convertible promissory note to St. George Investments, with a US$3.32m note principal
value. The note accrues daily interest at 10% p.a, and matures on November 13, 2020. The Company has the right to prepay the
note, subject to a 15% premium. The note is secured by a second priority security interest over all the Company’s assets
and is subordinated to the Company’s existing senior secured credit facility with the Bank of New Zealand. The noteholder
has the right to convert the note into Naked ordinary shares at a conversion price of US$0.90 per share, and also has the
right, from December 13, 2019, to request redemption of any portion of the note, up to a maximum of US$0.4m per month.
|
|
(2)
|
NZ$2.17m
/ US$1.5m cash was raised via the issue of 6m Naked ordinary shares to an investor in a private placement at a share price
of US$0.25. The investor also received warrants to purchase 1m Naked ordinary shares. The warrants have an exercise price
of US$0.25, and expire 2 years from the date of issue.
|
|
(3)
|
653,595
ordinary shares were issued in exchange for the cancellation of NZ$0.3m / US$0.2m in debt held by a shareholder, at a price
of US$0.306 per share.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
36
|
Events
occurring after the reporting date (continued)
|
In
July 2019, the following share transactions occurred :
|
(1)
|
The
issue of 25,068,250 ordinary shares to certain suppliers at a price of US$0.10 per share, in cancellation of NZ$3.7m / US$2,506,825
trade payables.
|
|
(2)
|
The
issue of 15.75m ordinary shares to certain investors at a price of US$0.10 per share, and warrants to purchase up to 15.75m
ordinary shares, at an exercise price of US$0.10 per share, for a total cash consideration of NZ$2.35m / US$ 1.575m. Warrants
to purchase 1.26m ordinary shares were also issued to various designees of the placement agent at an exercise price of US
$0.125 per share. The placement agent warrants are immediately exercisable and expire 5.5 years from date of the cash offering.
|
|
(3)
|
The
exercise prices of certain outstanding warrants to purchase 2.8m ordinary shares held by one of the investors were reduced
to US$0.10 per share, with the exercise prices previously ranging from US$1.55 to US$3.75.
|
On
July 31, 2019, Kelvin Fitzalan was appointed as a member of the board of directors
In
August 2019, the following equity transactions occurred :
|
(1)
|
28,571,431
ordinary shares, at a price of $0.07 per share in a cash offering and 28,571,431 warrants to purchase ordinary shares were
issued to certain investors, for a total cash consideration of NZ $3.1m / US$2.0m. The warrants are immediately exercisable,
expiring 5.5 years from the date of issue, at an exercise price per share of US $0.07, and may be exercised on a ‘cashless’
basis based on as Black Scholes valuation from 6 months after the issue. The Company also issued warrants to certain designees
of the placement agent to purchase 2,285,714 ordinary shares at an exercise price of $0.0875 per share. The placement agent
warrants are immediately exercisable and expire 5.5 years from date of the cash offering.
|
|
(2)
|
The
Company agreed to reduce the exercise price of outstanding warrants held by certain investors, consisting of warrants to purchase
up to 18.55m ordinary shares at an exercise price of US$0.10 per share that expire in October 2021, June 2023 and July 2025.
The Company agreed to amend each of the outstanding warrants to reduce the exercise price to US$0.07.
|
|
(3)
|
The
Company issued 57,142,857 ordinary shares to suppliers at a price of $0.07 per share in exchange for the cancellation of NZ$6.2m
/ US$4.0m trade payables and the establishment of prepayment credits.
|
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
36
|
Events
occurring after the reporting date (continued)
|
In
October 2019, the following funding transaction occurred :
The
Company completed a private placement of a convertible promissory note and a warrant to purchase ordinary shares, for a purchase
price of NZ$3.2m / US$2m, with a principal balance before discount and expenses of US$2.12m. The holder had the right to exchange
the warrant for a 5% increase in the balance of the note. On October 9, 2019, the holder exercised this right, and as result the
warrant was cancelled and the balance of the note was increased by US$106,100. The note balance was further increased to US$2.51m
on November 21 2019 due to additional funding requirement deadline not being met. The note accrues daily interest at 20% p.a.,
and matures on October 4, 2021. The Company has the right to prepay the Note, subject to a 25% premium. The note is subordinated
to the Company’s existing senior secured credit facility with the Bank of New Zealand, From April 7, 2020 the holder has
the right to convert the outstanding balance of the note into the Company’s ordinary shares at a conversion price of US$0.05
per share.
In
November 2019, the following funding transaction occurred :
The
Company issued a NZ $ 4.8m / $US 3m convertible note in a private placement, maturing November 12 2021. The face value of the
note is NZ $ 5.0m / $US 3.17m after discount and costs, with a cash consideration of $US 3m. The interest rate is 20% p.a.. The
Company has the right to prepay the note at a 25% premium. The note is subordinated to the Company’s existing BNZ facility.
The note outstanding balance is convertible into ordinary shares from May 13, 2020, at a conversion price of $US 0.04 per share.
From May 13, 2020, the holder can request the company redeem any portion of the note, up to a maximum of $US0.4m per month. At
same time 63.4m warrants were issued to the note holder at a $US 0.05 exercise price, exercisable at any time, with a November
30 2021 expiry date.
St.
George Investments converted 12.1m convertible notes at an agreed $US 0.028 average price, reducing the principal value of the
convertible note by $US 340k.
In
December 2019, the following funding transactions occurred (prior to reverse stock split on December 20 2019, referred to below)
:
St.
George Investments converted 108.2m convertible notes at an $US 0.021 average price, reducing the principal value of the convertible
note by $US 2.265m
The
Company issued a NZ $ 4.8m / $US 3m convertible note in a private placement, maturing December 19 2021. The face value of the
note is NZ $ 5.0m / $US 3.17m after discount and costs, with a cash consideration of $US 3m. The interest rate is 20% p.a.. The
Company has the right to prepay the note at a 25% premium. The note is subordinated to the Company’s existing BNZ facility.
The note outstanding balance is convertible into ordinary shares from May 13, 2020, at a conversion price of $US 0.04 per share.
From June 19, 2020, the holder can request the company redeem any portion of the note, up to a maximum of $US0.6m per month. At
same time 79.3m warrants were issued to the note holder at a $US 0.05 exercise price, exercisable at any time, with a December
31 2021 expiry date.
Naked
Brand Group Limited
ACN
619 054 938
Notes
to the Consolidated Financial Statements
For
the Periods Ended 31 January 2019, 31 January 2018, 31 January 2017, 30 June 2016
36
|
Events
occurring after the reporting date (continued)
|
On
February 5, 2019, we received a notice from the Listing Qualifications Department of Nasdaq stating that, for the last 30 consecutive
business days, the closing bid price for our Ordinary Shares had been below the minimum of US$1.00 per share required for continued
inclusion on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2). Compliance has been extended in November 2019 until
February 3, 2020. In order to regain compliance, the bid price for shares of our Ordinary Shares must close at US$1.00 per share
or more for a minimum of ten consecutive business days.
At
the AGM on held on December 16, 2019 and in conjunction with a Board decision on timing, it was resolved to complete on December
20 2019 a reverse stock split of our Ordinary Shares, pursuant to which every 100 Ordinary Shares outstanding as of the effective
time of the reverse stock split were combined into one Ordinary Share. This should resolve the Nasdaq requirement for a US $1.00
minimum share price.
The
senior secured credit facility with the Bank of New Zealand matured on August 31, 2019 and has been extended to January 31 2020,
with discussions underway to extend for a further period beyond 12 months. The bank covenants were breached since January 2019
and were reset at April 30, 2019. The reset inventory ratio has been breached to the date of signing these accounts.
A
restructure or operations was commenced in October 2019 with initiatives to close the US wholesale business as well as the Australian
office and to disestablish up to 50 roles globally by the end of the year, subject to consultation.
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