TIDMBOO
RNS Number : 1949K
boohoo group plc
04 May 2022
4 May 2022
The information contained within this announcement is deemed by
the company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014 as it forms part of the
domestic law of the United Kingdom by virtue of the European Union
(Withdrawal) Act 2018 (as amended) ("UK MAR"). Upon the publication
of this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public
domain.
boohoo group plc - final results for the year ended 28 February
2022
"Leading the fashion eCommerce market"
Investing for the future
-- Significantly increased market share in the UK and US since
FY2020. Total group sales +61% since FY2020
-- Extended target addressable market through acquisitions, with
up to 500 million potential customers
-- Increased warehousing and distribution capacity, capable of
supporting over GBP4 billion of net sales
-- Plans on track for automation of Sheffield warehouse going
live in FY2023, driving material efficiencies, and opening of new
distribution centre in the USA in FY2024, transforming delivery
proposition
-- Strong revenue growth in the UK of 27% YOY, with product,
price and proposition resonating with customers
-- GBP125 million of Adjusted EBITDA, down 28% vs. last year,
and broadly flat vs two years ago, despite significant freight and
logistics cost inflation and record investments across multi-brand
platform
-- Capital expenditure of GBP261.5 million, funded using
existing cash reserves, including freehold properties and the
expansion and automation of the distribution network
2022 2021 Change 2020 Change
GBP million GBP million on 2021 GBP million on 2020(1)
Revenue 1,982.8 1,745.3 +14% 1,234.9 +61%
Gross profit 1,041.1 945.2 +10% 666.3 +56%
Gross margin 52.5% 54.2% -170bps 54.0% -150bps
Adjusted measures(3) :
Adjusted EBITDA(4) 125.1 173.6 -28% 126.6 -1%
% of revenue 6.3% 10.0% -370bps 10.2% -390bps
Adjusted EBIT(5) 84.1 149.3 -44% 107.0 -21%
% of revenue 4.2% 8.6% -440bps 8.7% -450bps
Adjusted profit before
tax(6) 82.5 149.9 -45% 108.3 -24%
Adjusted diluted earnings
per share(7) 4.39p 8.67p -49% 5.88p -25%
------------------------------ ------------- ------------- --------- ------------- ------------
Statutory measures:
Profit before tax 7.8 124.7 -94% 92.2 -92%
Diluted (loss)/earnings
per share (0.32)p 7.25p -104% 5.35p -106%
Net cash(2) at year-end 1.3 276.0 -GBP275m 240.6 -GBP239m
------------------------------ ------------- ------------- --------- ------------- ------------
John Lyttle, Group CEO, commented:
"Over the past two years, we have significantly increased market
share in our core geographies of the UK and the US, and we have
grown active customer numbers by 43% across the group to 20
million. Our focus over the past two years has been on investing to
build a strong platform, with the right infrastructure, supported
by increased capacity to better serve our customers. In the year
ahead we are focussed on optimising our operations through
increasing flexibility within our supply chain, landing key
efficiency projects and progressing strategic initiatives such as
wholesale and our US distribution centre. This will ensure that the
group is well-positioned to rebound strongly as pandemic-related
headwinds ease."
Summary of FY2022 performance
The group has delivered further revenue growth, with revenues up
14% vs. last year, and 61% compared to FY2020, at a time when
apparel markets globally remain below pre-pandemic levels. In our
largest market, the UK, growth has remained strong, compounding on
the exceptional growth delivered in the previous year. This
demonstrates the strength of the group's business model when
product, pricing and proposition are all strong, and is reflected
in our strong customer KPIs.
Growth has however been impacted by three factors: firstly,
returns rates increased significantly in the second half of the
year ahead of both expectations and pre-pandemic levels; secondly,
consumer demand has been subdued as a result of lockdowns in key
markets throughout the year; and thirdly, our proposition
internationally has been negatively impacted as a result of
extended delivery times.
The group has continued to invest significantly through the last
year, including rebuilding and relaunching four new brands in
FY2022, incurring costs that will be leveraged in the coming years
as the brands scale. Our distribution network has been extended
through the opening of two new distribution centres and progress on
our automation project in Sheffield, expected to go live in the new
financial year, continues apace. We have also announced our
intention to open a distribution centre in the USA to transform our
customer proposition.
Adjusted EBITDA, at GBP125 million, has remained broadly flat
compared to pre-pandemic levels and has declined compared to the
excellent results delivered in FY2021, due to lower growth than
anticipated, a significant increase in outbound carriage costs due
to a lack of airfreight capacity and inbound shipping costs rising
equally steeply, collectively impacting EBITDA by GBP60 million, as
well as higher marketing costs as we invest in our newly acquired
brands.
Financial highlights
-- Revenue GBP1.983 billion, up 14% (14% CER(8) ), and up 61% on 2020
o UK growth at 27% emphasises good brand positioning and
strength of brand portfolio
o International performance impacted by COVID-19 challenges,
down 3%
-- Growth of 14% achieved while set against exacerbated
comparative year, highlighting very strong two-year performance: UK
up 77%; international up 40%
-- International revenue is now 39% of total (2021: 46%),
reflecting strong organic UK growth and mix impact from brands
acquired in the last two years
-- Gross margin 52.5%, down 170bps from 54.2% (2020: down 150bps)
-- Adjusted EBITDA GBP125.1 million down 28%, with Adjusted
EBITDA margin of 6.3% (2021: 10.0%; 2020: 10.2%), after GBP60
million of pandemic-related shipping cost headwinds and investment
in launching our new brands
-- GBP261.5 million capital expenditure investment, building
infrastructure for growth, including freehold properties and
significant expansion and automation of distribution network
-- Strong balance sheet with net cash of GBP1.3 million (2021:
GBP276.0 million; 2020: GBP240.6 million). Operating cash flow of
GBP10.3 million (2021: GBP201.1 million; 2020: GBP127.3 million).
New GBP325 million RCF agreed in March 2022, underpinning the
group's investment programme
Operational highlights
-- Significant investment into broadening our operational and
warehouse capacity, ensuring global infrastructure is fit for the
future and ready for sustained growth, and to support over GBP4
billion of net sales
-- 20 million active customers, up 10%, and up 43% on 2020
-- Two new UK distribution centres, Daventry and Wellingborough,
launched and now fully operational
-- Automation fit-out of Sheffield warehouse commenced with
expected completion in September 2022, unlocking additional
operational efficiencies and multiple service enhancements
-- Announcement of plans for US distribution centre in 2023,
supporting the group's next phase of growth
-- Relaunch of Debenhams, adding a new dimension of a digital
department store to the group's portfolio and extending the group's
target addressable market
-- Integration and relaunch of the newly acquired Dorothy
Perkins, Wallis and Burton brands, complementary additions to the
group's scalable, multi-brand platform
-- Purchase of new offices in the heart of London's West End,
housing the group's London-based brands and their employees
Sustainability and governance highlights
-- Agenda for Change process completed, with action items
established into business as usual operations, following
publication of fifth Leveson report in March 2022
-- Economic Impact Assessment conducted. Commitment to investing
over GBP500 million and creating over 5,000 jobs over five years,
highlighting the group's significant ongoing contribution to the UK
economy
-- Board strengthened with appointment of two non-executive
directors, including one to chair the newly constituted ESG
Committee
-- Publication of the group's sustainability strategy, further
establishing ongoing commitment to transparency. Significant
progress made against our 2021 goals
Outlook and Guidance
Heading into the new financial year, the group is planning the
business on the basis that the pandemic-related external factors
impacting performance in FY2022 will continue for the year ahead.
The group's priorities therefore are focussing on optimising its
operations, including:
-- Sourcing and freight
Targeting increased sourcing from near-shore markets, leveraging
the flexibility that exists in the group's diverse supplier base to
reduce lead times that have been negatively impacted through global
supply chain challenges in FY2022 and exposure to fluctuating
inbound freight costs that remain elevated
-- Stock management and returns
Operating with lower levels of inventory through tighter stock
management and increased levels of open to buy, giving greater
flexibility to react to changes in demand mid-season. Whilst
returns rates are expected to remain around current levels during
FY2023, the group will annualise material increases in return rates
in the first half of the new financial year.
-- Cost management
The group has commenced a cost efficiency programme, and by
scaling recent acquisitions that have already received significant
investment, overheads across the group can be leveraged.
-- Unlocking strategic enablers
Focusing resources and capital investment into key projects to
support strategic growth, including: onboarding new wholesale
partnerships; upgrading the Debenhams technology platform; going
live with automation in our Sheffield distribution centre; and
progressing our US distribution centre ahead of go-live in 2023
By focusing on these areas, the group will be in a position of
greater financial and operational strength, and well-positioned to
rebound strongly as pandemic-related headwinds ease, allowing it to
capitalise on its significantly expanded target addressable market,
returning towards normalised growth rates of 25% per annum
post-pandemic and adjusted EBITDA margin rebuilding back to
10%.
For the financial year ending 28 February 2023, the group is
focussed on retaining the significant market share gains that it
has made over the course of the last two years. With current
short-term cost inflation impacting consumers, the group intends to
maximise efficiencies in its operating model and mitigate where
possible before passing prices onto consumers.
It is anticipated that revenue percentage growth will be
low-single digits, and adjusted EBITDA margins for the year are
expected to be between 4% to 7% as the group expects to continue to
be impacted by pandemic-related factors that negatively impact
costs within its supply chain and international competitive
proposition.
In the first half of the financial year, the trends impacting
performance in the second half of FY2022 are expected to continue,
including: uncertain consumer demand; tough comparatives as well as
reduced levels of net sales growth due to the annualisation of
elevated returns rates year on year; and sustained freight-related
headwinds. As a result, the group currently expects revenue growth
to be broadly flat in the first half of FY2023, as relatively
higher returns rates lead to net sales being down year on year in
the first quarter, with a return to growth in the second quarter.
For the first half of FY2023, Adjusted EBITDA margins are expected
to improve from the level achieved in the second half of H2
FY2022.
Performance is expected to improve in the second half of the
year with sales growth accelerating as the group annualises high
returns rates and normalising consumer demand, with profitability
improving as it benefits from key strategic initiatives and
leveraging of overheads.
Other financial guidance for FY2023 is outlined below:
-- Underlying depreciation and amortisation of approximately GBP60 million
-- Net interest charge of GBP7million to GBP8 million
-- Effective tax rate of circa 28%, above the rate of UK
Corporation Tax due to disallowable expenditure
-- Capital expenditure of GBP100 million to GBP120 million,
primarily relating to investments in our distribution network
expansion and automation as well as the group's technology
platform; and
-- Adjusting items of approximately GBP60 million, of which
around GBP45 million relates to non-cash items, including:
share-based pay, acquisition intangible amortisation, exceptional
costs of Sheffield automation and warehouse commissioning costs
Longer-term competitive positioning and opportunity to take
market share unchanged
The group expects to emerge from the pandemic in a far stronger
position compared to two years ago. Reflecting significant and
ongoing investments in its platform, brands, distribution and
people, the group has:
-- A broader portfolio of brands and a significantly larger
target addressable market with 500 million potential customers
across key markets
-- Greater infrastructure capacity capable of supporting in
excess of GBP4 billion of net sales, with automation investments
driving future efficiencies
-- Committed to opening a new distribution centre in the USA,
significantly strengthening the customer proposition
-- 20 million customers globally
-- Numerous growth opportunities through the group's direct to
consumer proposition, Debenhams and strategic partnerships with
select partners globally.
We remain extremely confident in the group's future growth
prospects, and as short-term demand uncertainty and material cost
headwinds as a result of the pandemic unwind, the group's belief
that it continues to be capable of executing its strategy aimed at
leading the fashion e-commerce market remains unchanged.
Investor and analyst meeting
A meeting for analysts will be held at 9am (UK time) today at
the offices of boohoo, 10 Great Pulteney Street, London, W1F 9NB. A
live video webcast for analysts and investors at 9am (UK time) via
the following link:
https://webcasting.buchanan.uk.com/broadcast/624d820de1d0d456b32a3ef1
A replay will subsequently be available the same day via the
same link.
boohoo group plc's results are available at www.boohooplc.com
.
Enquiries
boohoo group plc
Neil Catto, Chief Financial Officer Tel: +44 (0)161 233
2050
Alistair Davies, Investor Relations Tel: +44 (0)161 233
2050
Clara Melia, Investor Relations Tel: +44 (0)20 3289
5520
Mark Mochalski, Investor Relations Tel: +44 (0)20 3239
6289
Zeus Capital - Nominated adviser and joint
broker
Nick Cowles / Andrew Jones Tel: +44 (0)161 831
1512
Benjamin Robertson Tel: +44 (0)20 3829
5000
Jefferies - Joint broker
Philip Noblet / Max Jones Tel: +44 (0)20 7029
8000
Buchanan - Financial PR adviser boohoo@buchanan.uk.com
Richard Oldworth / Kim Looringh-van Beeck / Tel: +44 (0)20 7466
Toto Berger / Sophie Wills 5000
Notes:
(1) Change on 2020, two years ago, compares current trading to
the pre-pandemic period to give a better understanding of
performance when compared to the unusual growth and characteristics
of trade in 2021.
(2) Net cash is cash less borrowings, excluding lease
liabilities.
(3) Adjusted items, which are not statutory measures, show the
underlying performance of the group excluding large, non-cash and
exceptional items.
(4) Adjusted EBITDA is calculated as profit before tax,
interest, depreciation, amortisation, share-based payment charges
and exceptional items.
(5) Adjusted EBIT is calculated as profit before tax, interest,
amortisation of acquired intangible assets, share-based payment
charges and exceptional items.
(6) Adjusted profit before tax is calculated as profit before
tax, excluding amortisation of acquired intangible assets,
share-based payment charges and exceptional items.
(7) Adjusted diluted earnings per share is calculated as diluted
earnings per share, adding back amortisation of acquired intangible
assets, share-based payment charges and exceptional items.
(8) CER designates Constant Exchange Rate translation of foreign
currency revenue, which gives a truer indication of the performance
in international markets by removing year-to-year exchange rate
movements when local currency sales are converted to sterling.
About boohoo group plc
"Leading the fashion eCommerce market"
Founded in Manchester in 2006, boohoo is an inclusive and
innovative global brand targeting young, value-orientated
customers, pushing boundaries to bring its customers up-to-date and
inspirational fashion, 24/7.
In 2017, the group extended its customer offering through the
acquisitions of the vibrant fashion brand PrettyLittleThing and
free-thinking brand Nasty Gal. In March 2019, the group acquired
the MissPap brand, in August 2019 the Karen Millen and Coast brands
and in June 2020 the Warehouse and Oasis brands, all complementary
to the group's scalable, multi-brand platform. In January 2021, the
group acquired the intellectual property assets of Debenhams, with
the goal of transforming a leading UK fashion and beauty retailer
into a digital department store and marketplace through a new
capital-light and low-risk operating model. In February 2021, the
group acquired the intellectual property assets of UK brands
Dorothy Perkins, Wallis and Burton. As at 28 February 2022, the
boohoo group had 20 million active customers across all its brands
around the world.
Cautionary Statement
Certain statements included or incorporated by reference within
this announcement may constitute "forward-looking statements" in
respect of the group's operations, performance, prospects and/or
financial condition. Forward-looking statements are sometimes, but
not always, identified by their use of a date in the future or such
words and words of similar meaning as "anticipates", "aims", "due",
"could", "may", "will", "should", "expects", "believes", "intends",
"plans", "potential", "targets", "goal" or "estimates". By their
nature, forward-looking statements involve a number of risks,
uncertainties and assumptions and actual results or events may
differ materially from those expressed or implied by those
statements. Accordingly, no assurance can be given that any
particular expectation will be met and reliance should not be
placed on any forward-looking statement. Additionally,
forward-looking statements regarding past trends or activities
should not be taken as a representation that such trends or
activities will continue in the future. No responsibility or
obligation is accepted to update or revise any forward-looking
statement resulting from new information, future events or
otherwise. Nothing in this announcement should be construed as a
profit forecast. This announcement does not constitute or form part
of any offer or invitation to sell, or any solicitation of any
offer to purchase any shares or other securities in the Company,
nor shall it or any part of it or the fact of its distribution form
the basis of, or be relied on in connection with, any contract or
commitment or investment decisions relating thereto, nor does it
constitute a recommendation regarding the shares or other
securities of the Company. Past performance cannot be relied upon
as a guide to future performance and persons needing advice should
consult an independent financial adviser. Statements in this
announcement reflect the knowledge and information available at the
time of its preparation. Liability arising from anything in this
announcement shall be governed by English law. Nothing in this
announcement shall exclude any liability under applicable laws that
cannot be excluded in accordance with such laws.
Agenda for Change
A stronger more sustainable future
In September 2020, the group announced its Agenda for Change
programme: a series of commitments designed to strengthen corporate
governance, purchasing practices and entrench the group's support
for the UK garment manufacturing sector more broadly.
The programme encompassed 17 commitments recommended by Alison
Levitt QC in her independent report, with the commitments broken
down into the 34 deliverables that formed the Agenda for
Change.
Progress and the validity of completion against each of the
commitments was overseen, scrutinised and examined by two
independent parties: Sir Brian Leveson, whose reports the group
made available publicly in line with its transparency; and experts
at KPMG.
We have faced into these issues and are proud of the significant
progress that we have made, which in turn is influencing
sustainable change in British apparel manufacturing, impacting the
people who make the products that we sell and the wider garment
sector.
In March 2022, KPMG formally recognised the completion of all
aspects of the group's Agenda for Change programme. However, the
group remains focused on driving continual improvement and has
embedded future actions within the various streams of its board-led
committees, including the Risk Committee, Supply Chain Compliance
Committee and the new ESG Committee.
We have implemented both procedural and cultural change, driven
internally by our own teams and informed by the extensive work that
we have done through working in partnership with multiple external
stakeholder and NGO groups.
After 18 months of dedicated and hard work by our talented
teams, the boohoo group is a stronger and more sustainable business
that is looking to the future. We are working side by side with
approved suppliers who share our values to support our aim of
backing British manufacturing.
Review of the business
Performance during the year
Overview
2022 2021 2022 2020 2022 change
GBP million GBP million change GBP million on 2020(1)
on 2021
Revenue 1,982.8 1,745.3 +14% 1,234.9 +61%
Gross profit 1,041.1 945.2 +10% 666.3 +56%
Gross margin 52.5% 54.2% -170bps 54.0% -150bps
Profit before tax 7.8 124.7 -94% 92.2 -92%
Diluted (loss)/earnings
per share (0.32)p 7.25p -104% 5.35p -106%
Net cash(2) at year-end 1.3 276.0 -GBP275m 240.6 -GBP239m
------------------------------ ------------- ------------- --------- ------------- ------------
Adjusted measures(3) :
Adjusted EBITDA(4) 125.1 173.6 -28% 126.6 -1%
% of revenue 6.3% 10.0% -370bps 10.2% -390bps
Adjusted EBIT(5) 84.1 149.3 -44% 107.0 -21%
% of revenue 4.2% 8.6% -440bps 8.7% -450bps
Adjusted profit before
tax(6) 82.5 149.9 -45% 108.3 -24%
Adjusted diluted earnings
per share(7) 4.39p 8.67p -49% 5.88p -25%
------------------------------ ------------- ------------- --------- ------------- ------------
Notes:
(1) 2022 change on 2020, two years ago, compares current trading
to the pre-pandemic period to give a better understanding of
performance when compared to the unusual growth and characteristics
of trade in 2021.
(2) Net cash is cash less borrowings, excluding lease
liabilities.
(3) Adjusted items, which are not statutory measures, show the
underlying performance of the group excluding large, non-cash and
exceptional items (Note 1).
(4) Adjusted EBITDA is calculated as profit before tax,
interest, depreciation, amortisation, share-based payment charges
and exceptional items.
(5) Adjusted EBIT is calculated as profit before tax, interest,
amortisation of acquired intangible assets, share-based payment
charges and exceptional items.
(6) Adjusted profit before tax is calculated as profit before
tax, excluding amortisation of acquired intangible assets,
share-based payment charges and exceptional items.
(7) Adjusted diluted earnings per share is calculated as diluted
earnings per share, adding back amortisation of acquired intangible
assets, share-based payment charges and exceptional items.
Group overview
Group revenue for the year increased by 14% (14% CER) to
GBP1.983 billion from GBP1.745 billion in 2021 and over the
two-year period increased by 61% from GBP1.235 billion in 2020, at
a time when apparel markets globally remain below pre-pandemic
levels. International revenue growth was dampened by the continued
impacts of the pandemic, due to extended delivery times and weaker
consumer demand. Growth in the UK, however, was very strong,
supported by organic growth in the existing brands and augmented by
the newer acquisitions. Return rates climbed to pre-pandemic
levels, following the exceptionally low levels in the previous
year, which impacted net sales growth in the second half of the
financial year.
Adjusted EBITDA was GBP125.1 million (2021: GBP173.6 million;
2020: GBP126.6 million), a decrease of 28% on the previous year and
1% on 2020. Gross product margin was maintained at a level only
170bps lower than in the prior year at 52.5%, despite inbound
shipping expenses rising substantially due to the shortage of
shipping containers and lack of airfreight capacity, which, after
mitigation, presented approximately GBP22 million of headwind.
Relative to 2020 rates, volume-adjusted marketing costs have been
higher by GBP22 million in the face of weaker demand and investment
in the newer brands. Outbound carriage expenses continued to be
elevated, and represented a GBP38 million increase above
pre-pandemic rates. These headwinds together have reduced
profitability and resulted in Adjusted EBITDA margin of 6.3% (2021:
10.0%; 2020: 10.2%). Profit before tax was GBP7.8 million (2021:
GBP124.7 million; 2020: GBP92.2 million), a decrease of 94% on 2021
and 92% on 2020. Adjusted diluted earnings per share was 4.39p,
down 49% on the prior year and 25% on 2020. Diluted (loss)/earnings
per share was (0.32)p, a decrease of 104% (2021: 7.25p; 2020:
5.35p).
During the year, the group incurred a number of significant,
non-recurring costs, which have been shown as exceptional items in
the financial statements and have not been included in the adjusted
performance measures. These items relate to: dual running and
inefficiency costs within warehouses; legal expenses and redundancy
costs associated with the acquisition of the new brands in February
2021; additional costs of working at the Sheffield warehouse during
the automation installation; and irrecoverable sales taxes on
customer returns from the EU during the period after Brexit and
before simplified procedures in the EU became operational. These
exceptional items amounted to GBP35.8 million and are detailed in
note 1 of the financial statements.
Cash generation was lower than prior years due to the inventory
build to service the brand portfolio and to the longer product lead
times caused by the global issue of lengthy shipping times and the
expansion of the supplier base that included a larger overseas
element, reflecting the group's larger portfolio of brands.
Operating cash flow was GBP10.3 million (2021: GBP201.1 million;
2020: GBP127.3 million). Net cash flow was down GBP174.7 million
(2021: GBP30.6 million; 2020: GBP47.6 million), following
significant infrastructure capital expenditure of GBP261.5 million.
Our net cash balance at the year-end reduced to GBP1.3 million (net
cash, 2021: GBP276.0 million; 2020: GBP240.6 million), with total
liquidity of GBP101.3 million. After the year-end, the group
secured a new GBP325 million rolling capital facility, increasing
from the previous GBP100 million facility, which was fully drawn at
the year-end.
The group has invested heavily in preparation for growth from
both its existing brands and more recent acquisitions. Two new
distribution centres have been opened and become operational in
Wellingborough and Daventry and the automation of the Sheffield
distribution centre has commenced, with an estimated completion
date of September 2022. Capital expenditure on these facilities has
amounted to GBP120.3 million. The acquisition of our London office
was completed in April 2021 and additional studio facilities in
London were acquired in September 2021 for a combined GBP88
million. We have also invested in our IT systems, with GBP32.0
million of expenditure that enhances both platform stability and
additional operating abilities, such as marketplace.
Active customer numbers in the last 12 months increased by 10%
to 19.9 million and have increased 43% over the last two years as a
result of organic growth from our brands and extension of our
target addressable market through brand acquisitions. Order
frequency increased marginally from 3.03 to 3.14 times p.a. and
average order value increased by 8% to GBP48.16. The number of
items per basket decreased from 3.34 to 3.04, driven partly by the
addition of the new brands with lower basket sizes and partly to a
return to closer to pre-pandemic basket sizes in our established
brands.
Performance by market
UK
The UK market continues to be the largest for the group,
accounting for 61% of revenue (2021: 54%). Overall growth across
all brands was strong, up 27% on 2021 and up 77% on 2020, driven by
the success of our multi-brand strategy. Return rates have
increased back to pre-pandemic levels, being 9.8%pts above the
prior year at 33.7%. This is partly attributable to the change in
the product mix from more casual items to occasion wear and to the
introduction of the newer, higher price point brands, which all
have higher return rates.
Gross margin reduced slightly from 50.9% to 49.4%, despite the
substantial increases in inbound shipping. Prices were raised
across some product lines to offset the increased logistics costs,
where we were unable to change sourcing to alternative geographic
regions to reduce the impact of these cost increases. Nevertheless,
we are greatly encouraged by the progress we are making in growing
our market share in the UK.
Rest of Europe
Our revenue in the rest of Europe decreased by 10% over 2021,
although increased by 16% on 2020, as the effect of continued
lockdowns has hampered the recovery of demand together with the
longer delivery times. Return rates were only marginally higher
than in the prior year. Gross margin remained healthy at 54.5%,
down 1.7%pts on the prior year.
USA
Growth in the USA was 4% up on 2021 and up 71% on 2020. Return
rates increased marginally, but the continued extended delivery
times, driven by reduced airfreight capacity, have subdued demand
on the group's established brands. Menswear has grown strongly as
it gains market share and gathers momentum, as have the newer
brands, albeit from a low base. Gross margin decreased slightly by
0.1%pts to 59.8%.
Rest of world
Revenue in the rest of the world has decreased by 10% on the
prior year to GBP109.2 million (increased by 5% on 2020), impacted
undoubtedly by the delays in the distribution network caused by
greatly reduced airfreight capacity. Gross margin declined slightly
from 54.9% to 52.5%, a relatively small reduction given the
challenging conditions in overseas territories brought about by the
pandemic.
Airfreight capacity constraints, caused by the pandemic, also
kept distribution costs to the more distant markets high and these
are expected to continue for some time to come. Nevertheless, the
region delivered growth in the fourth quarter as a result of the
positive contribution from wholesale.
Agenda for Change
Progress continued at pace in the Agenda for Change, with the
publication of the full UK manufacturer list in March 2021 and the
international manufacturer list in September 2021. Sir Brian
Leveson's fifth and final report on Agenda for Change was published
in March 2022 and highlighted, in particular, the strengthening of
the product compliance, sourcing, sustainability and quality
assurance teams and completion of the actionable items contained in
the Levitt Review.
Corporate governance
The group has delivered on its commitment to strengthen its
corporate governance with the appointment of two new and
independent non-executive directors. Tim Morris joined the board in
May 2021 and brings a wealth of experience built on his career in
legal services and in business entrepreneurship, which will be
invaluable as he focuses on the oversight of risk and corporate
governance. Additionally, Kirsty Britz joined the board in October
2021. Kirsty has spent a large part of her career on sustainability
and professional standards and brings expertise that will assist
the group in defining and executing its sustainability practices.
The group has recently constituted an ESG Committee, which will
oversee its ESG strategy and provide recommendations to the
Executive ESG group. These enhancements ensure that key ESG matters
are considered by leaders and decision-makers, who are appraised of
the relevant information, at the appropriate time.
With the completion of the Agenda for Change programme, we are
embedding the core themes of the programme - corporate governance,
purchasing practices and our support for the garment sector - into
sustainability KPIs across our business that we monitor
monthly.
Sustainability
We recognise the environmental impact of fashion and our
responsibility to reduce the negative aspects of production, waste
and poor longevity of apparel. We have built a sustainability
function in our business and have developed a strategy to target
three material areas of focus: clothes made smarter; suppliers on
better terms; and our business taking action. The ESG function is
overseen by a non-executive director with expertise in the subject.
Full details on our sustainability strategy and our results to date
can be found within our published documents on our corporate
website.
In the last year, the group published its sustainability
strategy, UP.FRONT, with three pillars:
1) Clothes made smarter;
2) Suppliers on better terms; and
3) Our business taking action.
Clothes made smarter: the group is targeting increases in
products made from more sustainable materials (targeting all
polyester and cotton to be more recycled or sustainably sourced by
2025); improvements in sustainably-designed products; the
introduction of resale and recycling offers across our brands by
2023 (with the PLT resale marketplace due to launch in FY2023); and
increases in recycled content in our labelling and packaging.
Suppliers on better terms: focuses on transparency, standards
and programmes. Global supplier and factory lists have been
published, as well as our responsible purchasing practices. More
robust supplier standards and a rigorous management programme have
been implemented by our sourcing teams, supported by improved
systems to order, monitor and track products ordered from our
suppliers. The group also became a member of Fast Forward, and by
September 2022 will have completed the Fast Forward audit programme
in its UK supply chain. In the last year, the group has also set up
and donated GBP1 million to the Garment and Textile Works Trust in
Leicester and recently opened its manufacturing centre of
excellence in Thurmaston Lane.
Our business taking action: the group has made progress in the
last year under its third sustainability pillar; embedding
sustainability risks and opportunities into decision-making and
KPIs (and the constitution of a dedicated ESG Risk Committee). The
group has set out climate change targets based on the Science-Based
Targets Initiative, with the goal of achieving carbon reductions
across our value chain that are equivalent to 52% reduction in
emissions relative to our growth by 2030.
Continued profitable growth
Financial review
Revenue by geographical market
2022 2021 2022 change on 2022 change on 2020 2022 change on
GBP million GBP million 2021 2021 GBPmillion 2020
CER
UK 1,202.8 945.1 +27% +27% 679.4 +77%
Rest of Europe 219.2 244.7 -10% -9% 188.4 +16%
USA 451.6 435.1 +4% +4% 263.6 +71%
Rest of world 109.2 120.4 -9% -10% 103.5 +6%
---------------- ------------- ------------- ----------------- ----------------- ------------ ------------------
1,982.8 1,745.3 +14% +14% 1,234.9 +61%
================ ============= ============= ================= ================= ============ ==================
KPIs
2022 2021 2022 change
on 2021
Active customers(1) 19.9 million 18.0 million +10%
Number of orders 62.4 million 54.7 million +14%
Order frequency(2) 3.14 3.03 +4%
Conversion rate to sale (3) 2.76% 2.72% +4bps
Average order value(4) GBP48.16 GBP44.59 +8%
Number of items per basket 3.04 3.34 -9%
----------------------------- ------------- ------------- ------------
(1) Defined as having shopped in the last 12 months on the
website and app, including marketplace
(2) Defined as number of website and app orders in last 12
months divided by number of active customers
(3) Defined as the percentage of website and app orders taken to
internet sessions
(4) Calculated as gross sales including sales tax divided by the
number of orders
Note: 2020 data not available due to improved data gathering
introduced in 2021 and 2022
Consolidated income statement
2022 2021 2022 change on 2021 2020 2022 change on 2020
GBP million GBP million GBP million
Revenue 1,982.8 1,745.3 +14% 1,234.9 +61%
Cost of sales (941.7) (800.1) +18% (568.6) +66%
----------------------------- ------------- ------------- -------------------- ------------- --------------------
Gross profit 1,041.1 945.2 +10% 666.3 +56%
Gross margin 52.5% 54.2% -170bps 54.0% -150bps
Operating costs (916.1) (772.6) (539.9)
Other income 0.1 1.0 0.2
Adjusted EBITDA 125.1 173.6 -28% 126.6 -1%
Adjusted EBITDA margin % 6.3% 10.0% -360bps 10.2% -400bps
Depreciation (32.0) (20.1) (16.6)
Amortisation of other
intangible assets (9.0) (4.2) (3.0)
Adjusted EBIT 84.1 149.3 -44% 107.0 -21%
Adjusted EBIT margin % 4.2% 8.6% -440bps 8.7% -450bps
Adjusting items:
Amortisation of acquired
intangible assets (12.8) (5.5) (5.1)
Equity-settled share-based
payment charges (26.1) (19.7) (11.0)
Exceptional items (35.8) - -
Operating profit 9.4 124.1 -92% 90.9 -90%
Finance income - 0.9 1.7
Finance expense (1.6) (0.3) (0.4)
----------------------------- ------------- ------------- -------------------- ------------- --------------------
Profit before tax 7.8 124.7 -94% 92.2 -92%
Tax (11.8) (31.3) (19.3)
----------------------------- ------------- ------------- -------------------- ------------- --------------------
(Loss)/profit after tax for
the year (4.0) 93.4 -104% 72.9 -105%
============================= ============= ============= ==================== ============= ====================
Diluted (loss)/earnings per
share (0.32)p 7.25p -104% 5.35p -106%
Adjusted profit after tax
for the year 56.3 113.8 -51% 86.0 -35%
Amortisation of acquired
intangible assets (12.8) (5.5) (5.1)
Share-based payment charges (26.1) (19.7) (11.0)
Exceptional items (35.8) - -
Adjustment for tax 14.4 4.8 3.0
----------------------------- ------------- ------------- -------------------- ------------- --------------------
(Loss)/profit after tax for
the year (4.0) 93.4 72.9
----------------------------- ------------- ------------- -------------------- ------------- --------------------
Adjusted profit for the year
attributable to
shareholders of the company 56.3 108.5 -48% 69.9 -19%
Adjusted diluted earnings
per share 4.39p 8.67p -49% 5.88p -25%
----------------------------- ------------- ------------- -------------------- ------------- --------------------
Revenue in the financial year grew 14% (up 61% on a two-year
basis), with strong growth in the UK partly offset by weaker demand
in overseas markets due largely to extended delivery timeframes,
which negatively impacted the group's international proposition to
customers. Gross margin declined 170bps year-on-year, as a
consequence of elevated inbound shipping costs arising from the
pandemic
Operating costs, comprising distribution costs and
administrative expenses excluding depreciation and amortisation,
have increased by 190bps to 46.2% of revenue, driven by higher
marketing costs and continued high levels of overseas distribution
costs caused by the pandemic.
Adjusted EBITDA, which is not a statutory measure, represents
earnings before interest, tax, depreciation, amortisation, non-cash
share-based payments charges and exceptional items. It provides a
useful measure of the underlying profitability of the business.
Adjusted EBITDA decreased by 28% from GBP173.6 million to GBP125.1
million and, as a percentage of revenue, decreased from 10.0% to
6.3%.
Adjusted profit after tax, as with Adjusted EBITDA, provides
another more consistent measure of the underlying profitability of
the business by removing non-cash amortisation of intangible assets
relating to the acquisition of new brands (being their trademarks
and customer lists), share-based payment charges and exceptional
items.
Exceptional items relate to: dual running and inefficiency costs
of the warehouses; legal expenses and redundancy costs of some
employees associated with the acquisition of the new brands in
February 2021; additional costs of working at the Sheffield
warehouse during the automation installation; and irrecoverable
sales taxes on customer returns from the EU during the period after
Brexit and before simplified procedures in the EU became
operational. These exceptional items amounted to GBP35.8 million.
Exceptional items are shown in more detail in note 1 of the
financial statements below.
Taxation
The effective rate of tax for the year was 151.3% (2021: 25.1%),
which is higher (2021: higher) than the UK statutory rate of tax
for the year of 19.0% (2021: 19.0%), due to the revaluation of
deferred tax liabilities in line with the increase in corporation
tax rates to 25%, expenditure not deductible for tax purposes,
being principally depreciation on buildings and fit-out,
disallowable legal claims and share-based payment charges on growth
shares.
Consolidated statement of financial position
2022 2021 2020
GBP million GBP million GBP million
--------------------------------------- ------------ ------------ ------------
Intangible assets 128.5 118.3 42.3
Property, plant and equipment 349.2 141.6 119.2
Right-of-use assets 49.7 16.7 14.6
Financial assets 2.8 13.1 4.5
Deferred tax asset 7.5 3.2 6.0
---------------------------------------- ------------ ------------ ------------
Non-current assets 537.7 292.9 186.6
Working capital (12.7) (90.9) (63.9)
Lease liabilities (51.9) (18.3) (16.2)
Net financial assets/(liabilities) 7.4 12.6 (9.0)
Cash and cash equivalents 101.3 276.0 245.4
Interest-bearing loans and borrowings (100.0) - (4.8)
Deferred tax liability (25.3) (4.2) (3.6)
Net current tax asset/(liability) 7.8 4.4 (6.6)
Net assets 464.3 472.5 327.9
======================================== ============ ============ ============
There has been a substantial investment in property and
distribution centres to facilitate our next growth phase, which has
been partly funded out of cash resources and partly from the fully
drawn rolling capital facility of GBP100 million. Working capital
has increased largely because of the build in inventory to service
the new brands along with the growth of the business in
general.
Intangible and fixed asset additions
2022 2021 2020
GBP million GBP million GBP million
--------------------------------------------------- ------------ ------------ ------------
Purchased intangible and fixed assets
Intangible assets
Trademarks and customer lists - 73.4 19.4
Software 32.0 12.3 3.8
---------------------------------------------------- ------------ ------------ ------------
32.0 85.7 23.2
Tangible fixed assets
Distribution centres 120.3 16.9 15.4
Offices, office equipment, fixtures and fit-outs 109.0 20.0 6.6
Motor vehicles 0.2 0.1 0.4
---------------------------------------------------- ------------ ------------ ------------
229.5 37.0 22.4
Total intangible and fixed asset additions 261.5 122.7 45.6
==================================================== ============ ============ ============
Liquidity and financial resources
Operating cash flow was GBP10.3 million compared to GBP201.1
million in the previous year and free cash outflow after tax was
GBP251.2 million compared to an outflow of GBP121.8 million in the
previous financial year. Capital expenditure and intangible asset
purchases were GBP261.5 million, which includes a GBP120.3 million
investment in our distribution centres to support projected growth
in the business. The closing cash balance for the group was
GBP101.3 million and the net cash balance GBP1.3 million. In March
2022, a new GBP325 million rolling capital facility was
secured.
Consolidated cash flow statement
2022 2021 2020
GBP million GBP million GBP million
-------------------------------------------------------------- ------------ ------------ ------------
(Loss)/profit after tax for the year (4.0) 93.4 72.9
Share-based payments charge 26.1 19.7 11.0
Depreciation charges and amortisation 53.8 29.8 24.7
Finance income - (0.9) (1.7)
Finance expense 1.6 0.3 0.4
Loss on sale of fixed assets - - 0.2
Tax expense 11.8 31.3 19.3
Increase in inventories (134.5) (45.8) (32.3)
Increase in trade and other receivables (17.7) (8.8) (9.4)
Increase in trade and other payables 73.2 82.1 42.2
-------------------------------------------------------------- ------------ ------------ ------------
Operating cash flow 10.3 201.1 127.3
Capital expenditure and intangible asset purchases (261.5) (49.3) (26.2)
Acquisition of new brands - (73.4) (19.4)
Acquisition of non-controlling interest in PrettyLittleThing - (161.9) -
Tax paid - (38.3) (11.6)
Free cash outflow after tax (251.2) (121.8) 70.1
Net proceeds from the issue of ordinary shares 6.8 201.4 2.7
Purchase of own shares by EBT (19.2) (39.4) (14.9)
Finance income received - 1.2 1.8
Finance expense paid (0.9) (0.1) (0.3)
Dividend paid to non-controlling interests - - (3.4)
Lease payments (10.2) (5.9) (6.0)
Increase in/(repayment) of borrowings 100.0 (4.8) (2.4)
Net cash (out)flow (174.7) 30.6 47.6
Cash and cash equivalents at beginning of year 276.0 245.4 197.8
-------------------------------------------------------------- ------------ ------------ ------------
Cash and cash equivalents at end of year 101.3 276.0 245.4
============================================================== ============ ============ ============
Trends and factors likely to affect future performance
The global market for online fashion is forecast to continue to
grow, which provides a favourable backdrop for the group with much
opportunity for further growth. Customers throughout the world are
seeking a wide choice of quality fashion forward products at value
prices, generally lower than those available on the high street,
with the convenience of home delivery. The group's target market
has a high propensity to spend on fashion and the market has proven
to be quite resilient to external macroeconomic factors.
The pandemic has impacted our business and is most significantly
seen in the unpredictability of customer demand, the rate of
customer returns, the increase in shipping times and the cost of
shipping on both inbound and outbound products. Some of these
factors, such as the rate of customer returns, have already
reverted from the low rates during the pandemic to rates seen
before the pandemic, while other factors such as the shipping cost
increases are taking longer to move towards pre-pandemic levels. We
expect shipping costs to continue at elevated levels during FY2023.
Wage costs have also risen, given heightened levels of inflation,
and in the UK the group will incur a 1.25% increase in National
Insurance and a 6.6% increase in the National Living Wage expected
from April 2022. Higher levels of inflation have also been seen in
materials and the group will work to mitigate these costs across
labour and materials where possible.
Consolidated statement of comprehensive income
for the year ended 28 February 2022
Note 2022 pre-exceptional 2022 exceptional 2022 total(2) 2021
items items(1)
GBP million GBP million GBP million GBP million
-------------------------------------- ---- -------------------- ---------------- ------------- -----------
Revenue 2 1,982.8 - 1,982.8 1,745.3
Cost of sales (941.7) - (941.7) (800.1)
-------------------------------------- ---- -------------------- ---------------- ------------- -----------
Gross profit 1,041.1 - 1,041.1 945.2
Distribution costs (488.1) (28.4) (516.5) (422.0)
Administrative expenses (507.9) (7.4) (515.3) (400.1)
-------------------------------------- ---- -------------------- ---------------- ------------- -----------
Amortisation of acquired intangibles (12.8) - (12.8) (5.5)
Other administrative expenses (495.1) (7.4) (502.5) (394.6)
-------------------------------------- ---- -------------------- ---------------- ------------- -----------
Other income 3 0.1 - 0.1 1.0
-------------------------------------- ---- -------------------- ---------------- ------------- -----------
Operating profit/(loss) 45.2 (35.8) 9.4 124.1
Finance income 4 - - - 0.9
Finance expense (1.6) - (1.6) (0.3)
-------------------------------------- ---- -------------------- ---------------- ------------- -----------
Profit/(loss) before tax 6 43.6 (35.8) 7.8 124.7
Taxation 10 (18.6) 6.8 (11.8) (31.3)
Profit/(loss) for the year 25.0 (29.0) (4.0) 93.4
====================================== ==== ==================== ================ ============= ===========
Profit/(loss) for the year
attributable to:
Owners of the parent company 25.0 (29.0) (4.0) 90.7
Non-controlling interests - - - 2.7
-------------------------------------- ---- -------------------- ---------------- ------------- -----------
25.0 (29.0) (4.0) 93.4
====================================== ==== ==================== ================ ============= ===========
Total other comprehensive income/(loss) for the year
(Gain)/loss reclassified to
profit and loss during the
year (14.8) - (14.8) 9.0
Fair value (loss)/gain on
cash flow hedges during the
year (3) (0.7) - (0.7) 21.2
Total comprehensive income/(loss)
for the year 9.5 (29.0) (19.5) 123.6
============================================ ==================== ================ ============= ===========
Total comprehensive income/(loss) attributable to:
Owners of the parent company 9.5 (29.0) (19.5) 120.9
Non-controlling interests - - - 2.7
-------------------------------------- ---- -------------------- ---------------- ------------- -----------
9.5 (29.0) (19.5) 123.6
====================================== ==== ==================== ================ ============= ===========
Earnings/(loss) per share 7
Basic (0.32)p 7.43p
Diluted (0.32)p 7.25p
-------------------------------------- ---- -------------------- ---------------- ------------- -----------
1. See Note 1, exceptional items
2. 2022 total is the IFRS-compliant measure for the consolidated
statement of comprehensive income
3. Net fair value gains on cash flow hedges will be reclassified
to profit or loss during the three years to 28 February 2025.
Consolidated statement of financial position
at 28 February 2022
Note 2022 2021
GBP million GBP million
-------------------------------------- ---- ----------- -----------
Assets
Non-current assets
Intangible assets 11 128.5 118.3
Property, plant and equipment 12 349.2 141.6
Right-of-use assets 13 49.7 16.7
Financial assets 22 2.8 13.1
Deferred tax 14 7.5 3.2
-------------------------------------- ---- ----------- -----------
537.7 292.9
Current assets
Inventories 15 279.4 144.9
Trade and other receivables 16 58.0 40.6
Financial assets 22 14.2 17.1
Current tax asset 7.8 4.4
Cash and cash equivalents 187 101.3 276.0
Total current assets 460.7 483.0
Total assets 998.4 775.9
Liabilities
Current liabilities
Trade and other payables 18 (296.6) (222.9)
Provisions 19 (53.5) (53.5)
Interest-bearing loans and borrowings 20 (100.0) -
Lease liabilities 21 (7.9) (6.7)
Financial liabilities 22 (3.7) (2.6)
Total current liabilities (461.7) (285.7)
Non-current liabilities
Lease liabilities 21 (44.0) (11.6)
Financial liabilities 22 (3.1) (1.9)
Deferred tax 14 (25.3) (4.2)
Total liabilities (534.1) (303.4)
Net assets 464.3 472.5
====================================== ==== =========== ===========
Equity
Share capital 23 12.7 12.6
Shares to be issued 24 31.9 31.9
Share premium 922.8 916.2
Hedging reserve 10.2 25.7
EBT reserve (75.6) (56.5)
Other reserves 25 (795.5) (795.2)
Retained earnings 357.8 337.8
-------------------------------------- ---- ----------- -----------
Total equity 464.3 472.5
====================================== ==== =========== ===========
Consolidated statement of changes in equity
Share Shares Share Hedging EBT Other Non-controlling Retained earnings Total
capital to be premium reserve reserve reserves interest equity
issued
GBP GBP GBP GBP GBP GBP GBP million GBP million GBP
million million million million million million million
Balance at 29
February 2020 11.7 - 608.4 (4.5) (17.1) (515.2) 17.3 227.3 327.9
Profit for the
year - - - - - - 2.7 90.7 93.4
Other
comprehensive
income/(expense):
Loss reclassified
to profit and
loss in revenue - - - 9.0 - - - - 9.0
Fair value gain on
cash flow hedges
during the year - - - 21.2 - - - - 21.2
------------------ ------- ------- ------- ------- ------- -------- --------------- -------------------- -------
Total
comprehensive
income for the
year - - - 30.2 - - 2.7 90.7 123.6
Issue of shares 0.6 - 169.8 - (39.4) 0.8 (0.2) - 131.6
Share-based
payments credit - - - - - - 0.5 19.2 19.7
Excess taxation on
share-based
payments - - - - - - 0.1 0.6 0.7
Acquisition of
non-controlling
interest (see
note 1) 0.3 31.9 138.0 - - (281.3) (20.4) - (131.5)
Translation of
foreign
operations - - - - - 0.5 - - 0.5
Balance at 28
February 2021 12.6 31.9 916.2 25.7 (56.5) (795.2) - 337.8 472.5
------------------ ------- ------- ------- ------- ------- -------- --------------- -------------------- -------
Loss for the year - - - - - - - (4.0) (4.0)
Other
comprehensive
income/(expense):
Gain reclassified
to profit and
loss in revenue - - - (14.8) - - - - (14.8)
Fair value loss on
cash flow hedges
during the year - - - (0.7) - - - - (0.7)
------------------ ------- ------- ------- ------- ------- -------- --------------- -------------------- -------
Total
comprehensive
income for the
year - - - (15.5) - - - (4.0) (19.5)
Issue of shares 0.1 - 6.6 - (19.1) - - - (12.4)
Share-based
payments credit - - - - - - - 26.1 26.1
Excess taxation on
share-based
payments - - - - - - - (2.1) (2.1)
Translation of
foreign
operations - - - - - (0.3) - - (0.3)
Balance at 28
February 2022 12.7 31.9 922.8 10.2 (75.6) (795.5) - 357.8 464.3
------------------ ------- ------- ------- ------- ------- -------- --------------- -------------------- -------
Consolidated cash flow statement
for the year ended 28 February 2022
Note 2022 2021
GBP million GBP million
------------------------------------------------- ---- ----------- -----------
Cash flows from operating activities
(Loss)/profit for the year (4.0) 93.4
Adjustments for:
Share-based payments charge 26.1 19.7
Depreciation charges and amortisation 53.8 29.8
Finance income - (0.9)
Finance expense 1.6 0.3
Tax expense 11.8 31.3
------------------------------------------------- ---- ----------- -----------
89.3 173.6
Increase in inventories 15 (134.5) (45.8)
Increase in trade and other receivables 16 (17.7) (8.8)
Increase in trade and other payables 18 73.2 82.1
Cash generated from operations 10.3 201.1
Tax paid - (38.3)
Net cash generated from operating activities 10.3 162.8
Cash flows from investing activities
Acquisition of intangible assets 11 (32.0) (85.7)
Acquisition of property, plant and equipment 12 (229.5) (37.0)
Acquisition of non-controlling interest
in PrettyLittleThing - (161.9)
Finance income received - 1.2
Net cash used in investing activities (261.5) (283.4)
Cash flows from financing activities
Proceeds from the issue of ordinary shares 6.8 204.9
Share issue costs written off to share
premium - (3.5)
Purchase of own shares by EBT (19.2) (39.4)
Finance expense paid (0.9) (0.1)
Lease payments (10.2) (5.9)
Increase in/(repayment) of borrowings 20 100.0 (4.8)
Net cash generated from financing activities 76.5 151.2
(Decrease)/increase in cash and cash equivalents (174.7) 30.6
Cash and cash equivalents at beginning
of year 276.0 245.4
------------------------------------------------- ---- ----------- -----------
Cash and cash equivalents at end of year 101.3 276.0
================================================= ==== =========== ===========
Notes to the financial statements
(forming part of the financial statements)
1 Accounting policies
General information
The boohoo group plc operates as a multi-brand online retailer,
based in the UK and is a public limited company incorporated and
domiciled in Jersey and listed on the Alternative Investment Market
(AIM) of the London Stock Exchange. Its registered office address
is 12 Castle Street, St Helier, Jersey, JE2 3RT. The company was
incorporated on 19 November 2013.
Basis of preparation
This condensed consolidated financial information for the year
ended 28 February 2021 has been prepared in accordance with the
recognition and measurement criteria of UK-adopted International
Financial Reporting Standards and the Companies (Jersey) Law
1991.
The financial information contained in this preliminary
announcement for the years ended 28 February 2022 and 28 February
2021 does not comprise the group's statutory financial statements
within the meaning of Companies (Jersey) Law 1991. Statutory
accounts for the year ended 28 February 2022 will be filed with the
Jersey Companies Registry in due course. The auditors' reports on
the statutory accounts for each of the years ended 28 February
20212 and 28 February 2021 are unqualified, do not draw attention
to any matters by way of emphasis and do not contain any statement
under any matters that are required to be reported by exception
under Companies (Jersey) Law 1991.
The financial statements have been approved on the assumption
that the group and company remain a going concern. The continued
impact of the COVID-19 crisis on the group is not expected to
change materially over the next year, provided that governments'
actions in controlling the virus and its variants continue to be
effective. Trading during the year to February 2022 has shown that
on-line sales have some resilience during lockdowns in many
countries. The group has cash resources and credit facilities
sufficient to continue solvent trading in the face of an unforeseen
downturn in demand.
New and amended standards adopted by the group
The following new standards, and amendments to standards, have
been adopted by the group for the first time during the year
commencing 1 March 2021:
-- Amendments to IFRS 3 business combinations
Standards, amendments and interpretations to existing standards
that are not yet effective and have not been early adopted by the
group and/or company
The following standards have been published for accounting
periods beginning after 1 March 2021 but have not been adopted by
the UK and have not been early adopted by the group or company and
could have an impact on the group and company financial
statements:
-- Amendments to IAS 16 property, plant and equipment
-- Amendments to IAS 37 provisions, contingent liabilities and contingent assets
Measurement convention
The consolidated financial statements have been prepared under
the historical cost convention, excluding financial assets and
financial liabilities (including derivative instruments) held at
fair value through profit or loss and excluding assets and
liabilities acquired through acquisitions and held at fair value.
The principal accounting policies adopted in the preparation of
these financial statements are set out below. These policies have
been consistently applied to all the years presented, unless
otherwise stated.
Exceptional items
Exceptional items are those of significant size and of a
non-recurring nature that require disclosure in order that the
underlying business performance can be identified. The exceptional
costs in these financial statements include: redundancy costs in
temporary warehouse facilities that were operated in the period
between acquisition of the new brands and integration into new
warehouses; the costs of moving inventory from one warehouse to
another; additional disruption costs associated with the
installation of the automation in the Sheffield facility; legal
expenses associated with the acquisitions; irrecoverable sales
taxes on customer returns from the EU during the period after
Brexit and before simplified procedures (IOSS) in the EU became
operational; and additional costs of working during transitional
administrative and warehousing operations subsequent to the
acquisitions of the brands in February 2021. The latter additional
costs have been calculated as the difference between the
medium-term operating costs incurred in the new warehouse
facilities and the set-up and initial operating costs. Such
additional costs do require estimation by management.
Exceptional costs GBP million
Selling and distribution costs
Sheffield automation disruption costs 10.6
Dual warehouse operating costs 9.4
Irrecoverable EU sales tax on returns pre IOSS 5.1
Redundancy costs 3.3
------------------------------------------------ ------------
28.4
Administration expenses
Dual administrative costs during transition of
new brands from sellers 3.9
Acquisition and restructuring costs 3.1
Redundancy costs 0.4
------------------------------------------------ ------------
7.4
------------------------------------------------ ------------
Total before tax 35.8
Tax (6.8)
------------------------------------------------ ------------
Total after tax 29.0
------------------------------------------------ ------------
2 Segmental analysis
IFRS 8, 'Operating Segments', requires operating segments to be
determined based on the group's internal reporting to the chief
operating decision maker. The chief operating decision maker is
considered to be the executive board, which has determined that the
primary segmental reporting format of the group for the year ending
February 2022 is by geographic region. This is because the group is
multi-brand and now focuses on geographic performance at a group
level and not on individual brand performance. The group strategy
is to increase market share in each territory using the optimum mix
of brands that is appropriate for each market, taking into account
factors such as consumer preference, established presence and brand
appeal.
Year ended 28 February 2022
UK Rest of USA Rest of Total
Europe world
GBP million GBP million GBP million GBP million GBP million
------------------------- ----------- ----------- ----------- ----------- -----------
Revenue 1,202.8 219.2 451.6 109.2 1,982.8
Cost of sales (608.6) (99.7) (181.5) (51.9) (941.7)
-------------------------- ----------- ----------- ----------- ----------- -----------
Gross profit 594.2 119.5 270.1 57.3 1,041.1
Distribution costs - - - - (516.5)
Administrative expenses
- other - - - - (502.5)
Amortisation of acquired
intangibles - - - - (12.8)
Other income - - - - 0.1
-------------------------- ----------- ----------- ----------- ----------- -----------
Operating profit - - - - 9.4
Finance income - - - - -
Finance expense - - - - (1.6)
-------------------------- ----------- ----------- ----------- ----------- -----------
Profit before tax - - - - 7.8
========================== =========== =========== =========== =========== ===========
Year ended 28 February 2021
UK Rest of USA Rest of Total
Europe world
GBP million GBP million GBP million GBP million GBP million
------------------------- ----------- ----------- ----------- ----------- -----------
Revenue 945.1 244.7 435.1 120.4 1,745.3
Cost of sales (464.2) (107.1) (174.5) (54.3) (800.1)
-------------------------- ----------- ----------- ----------- ----------- -----------
Gross profit 480.9 137.6 260.6 66.1 945.2
h
Distribution costs - - - - (422.0)
Administrative expenses
- other - - - - (394.6)
Amortisation of acquired
intangibles - - - - (5.5)
Other income - - - - 1.0
-------------------------- ----------- ----------- ----------- ----------- -----------
Operating profit - - - - 124.1
Finance income - - - - 0.9
Finance expense - - - - (0.3)
-------------------------- ----------- ----------- ----------- ----------- -----------
Profit before tax - - - - 124.7
========================== =========== =========== =========== =========== ===========
Due to the nature of its activities, the group is not reliant on
any individual customers.
No analysis of the assets and liabilities of each operating
segment is provided to the chief operating decision maker in the
monthly management accounts; therefore, no measure of segmental
assets or liabilities is disclosed in this note. Non-current assets
located outside the UK comprise offices in the USA with a net book
value of GBP2.5 million.
3 Other income
2022 2021
GBP million GBP million
----------------------- ----------- -----------
Property rental income 0.1 1.0
------------------------ ----------- -----------
4 Finance income and expense
2022 2021
GBP million GBP million
---------------------------------------- ----------- -----------
Finance income: Bank interest received - 0.9
========================================= =========== ===========
Finance expense: Loan interest paid (0.8) (0.1)
Finance expense: IFRS 16 lease interest (0.8) (0.2)
----------------------------------------- ----------- -----------
(1.6) (0.3)
======================================== =========== ===========
5 Auditors' remuneration
2022 2021
GBP million GBP million
----------------------------------------------------------------------------- ----------- -----------
Audit of these financial statements 0.5 0.4
Disclosure below based on amounts receivable in respect of services to the group
Amounts receivable by auditors and their associates in respect of:
Audit of financial statements of subsidiaries pursuant to legislation - -
0.5 0.4
============================================================================= =========== ===========
6 Profit before tax
Profit before tax is stated after charging: 2022 2021
GBP million GBP million
------------------------------------------------- ----------- -----------
Short-term operating lease rentals for buildings 0.6 0.2
Equity-settled share-based payment charges 26.1 19.7
Exceptional items (note 1) 35.8 -
Depreciation of property, plant and equipment 22.0 14.4
Depreciation of right-of-use assets 10.0 5.7
Amortisation of intangible assets 9.0 4.2
Amortisation of acquired intangible assets 12.8 5.5
------------------------------------------------- ----------- -----------
7 Earnings per share
Basic earnings per share is calculated by dividing profit after
tax attributable to members of the holding company by the weighted
average number of shares in issue during the year. Own shares held
by the Employee Benefit Trust are eliminated from the weighted
average number of shares. Diluted earnings per share is calculated
by dividing the profit after tax attributable to members of the
holding company by the weighted average number of shares in issue
during the year, adjusted for potentially dilutive share options,
except when there is a loss, in which case the basic measure is
used.
2022 2021
Weighted average shares in issue for basic
earnings per share 1,235.3 1,220.7
Dilutive share options 48.2 31.4
------------------------------------------------ -------- --------
Weighted average shares in issue for diluted
earnings per share 1,283.5 1,252.1
================================================ ======== ========
(Loss)/earnings (GBP million) (4.0) 90.7
Basic (loss)/earnings per share (0.32)p 7.43p
Diluted (loss)/earnings per share (0.32)p 7.25p
------------------------------------------------ -------- --------
(Loss)/earnings (GBP million) (4.0) 90.7
Adjusting items:
Amortisation of intangible assets arising
on acquisitions 12.8 5.5
Share-based payments charges 26.1 19.7
Share-based payment charge adjustment for
non-controlling interests - (0.7)
Exceptional items 35.8 -
Adjustment for tax (14.4) (4.8)
Pro-forma non-controlling interest adjustment
to 34% - (1.9)
Adjusted earnings 56.3 108.5
------------------------------------------------ -------- --------
Adjusted basic earnings per share 4.56p 8.89p
Adjusted diluted earnings per share 4.39p 8.67p
------------------------------------------------ -------- --------
Adjusted earnings and adjusted earnings per share gives a more
consistent measure of the underlying performance of the business
excluding non-cash accounting charges relating to the amortisation
of intangible assets valued upon acquisitions and non-cash
share-based payment charges.
8 Staff numbers and costs
The average monthly number of persons employed by the group
(including directors) during the year, analysed by category, was as
follows:
Number of employees
2022 2021
--------------- ---------- ---------
Administration 2,462 1,767
Distribution 2,888 1,275
--------------- ---------- ---------
5,350 3,042
=============== ========== =========
The aggregate payroll costs of these persons were as
follows:
2022 2021
GBP million GBP million
------------------------------------------- ----------- -----------
Wages and salaries 174.8 106.6
Social security costs 14.3 9.2
Post-employment benefits 3.8 2.5
Equity-settled share-based payment charges 26.1 19.7
------------------------------------------- ----------- -----------
219.0 138.0
=========================================== =========== ===========
9 Directors' and key management compensation
2022 2021
GBP million GBP million
------------------------------------------- ----------- -----------
Short-term employee benefits 25.3 17.6
Post-employment benefits 0.3 0.2
Equity-settled share-based payment charges 3.4 2.7
29.0 20.5
=========================================== =========== ===========
Directors' and key management compensation comprises the group
directors and executive committee members.
10 Taxation
2022 2021
GBP million GBP million
-------------------------------------------------------------------------------------------- ----------- -----------
Analysis of charge in year
Current tax on income for the year (1.9) 27.0
Adjustments in respect of prior year taxes (0.1) 1.1
Deferred taxation (note 15) 13.8 3.2
Tax on profit 11.8 31.3
============================================================================================ =========== ===========
Income tax expense computations are based on the jurisdictions in which taxable profits were
earned at prevailing rates in those jurisdictions. The company is subject to Jersey income
tax at the standard rate of 0%. The reconciliation below relates to tax incurred in the UK
where the group is tax resident. The total tax charge differs from the amount computed by
applying the UK rate of 19.0% for the year (2021: 19.0%) to profit before tax as a result
of the following:
Profit before tax 7.8 124.7
-------------------------------------------------------------------------------------------- ----------- -----------
Profit before tax multiplied by the standard rate of corporation tax of the UK of 19.0%
(2021:
19.0%) 1.5 23.7
Effects of:
Expenses not deductible for tax purposes 3.5 5.8
Change in deferred tax rate 5.9 -
Adjustments in respect of prior year taxes (0.1) 1.1
Overseas tax differentials 0.5 0.2
R&D tax credits 0.1 -
Depreciation on ineligible assets 0.4 0.5
Tax on profit 11.8 31.3
============================================================================================ =========== ===========
Tax recognised in the statement of changes in equity
Deferred tax debit on movement in tax base of share options (3.0) (0.2)
------------------------------------------------------------ ----- -----
No current tax was recognised in other comprehensive income
(2021: GBPnil).
11 Intangible assets
Patents Trademarks Customer Computer Total
and licences lists software
GBP million GBP million GBP million GBP million GBP million
-------------------------- -------------- ------------ ------------ ------------ ------------
Cost
Balance at 29 February
2020 0.6 44.2 6.1 14.6 65.5
Additions - 71.4 2.0 12.3 85.7
Disposals - - - (3.4) (3.4)
-------------------------- -------------- ------------ ------------ ------------ ------------
Balance at 28 February
2021 0.6 115.6 8.1 23.5 147.8
Additions - - - 32.0 32.0
Disposals - - - (2.3) (2.3)
-------------------------- -------------- ------------ ------------ ------------ ------------
Balance at 28 February
2022 0.6 115.6 8.1 53.2 177.5
========================== ============== ============ ============ ============ ============
Accumulated amortisation
Balance at 29 February
2020 0.4 8.6 5.9 8.3 23.2
Amortisation for year 0.1 5.3 0.2 4.1 9.7
Disposals - - - (3.4) (3.4)
-------------------------- -------------- ------------ ------------ ------------ ------------
Balance at 28 February
2021 0.5 13.9 6.1 9.0 29.5
Amortisation for year 0.1 12.1 0.7 8.9 21.8
Disposals - - - (2.3) (2.3)
-------------------------- -------------- ------------ ------------ ------------ ------------
Balance at 28 February
2022 0.6 26.0 6.8 15.6 49.0
========================== ============== ============ ============ ============ ============
Net book value
At 29 February 2020 0.2 35.6 0.2 6.3 42.3
At 28 February 2021 0.1 101.7 2.0 14.5 118.3
At 28 February 2022 - 89.6 1.3 37.6 128.5
-------------------------- -------------- ------------ ------------ ------------ ------------
Within the statement of comprehensive income, amortisation of
acquired intangible assets (trademarks and customer lists) of
GBP12.8 million (2021: GBP5.5 million) is shown separately. The
amount of amortisation of the other intangible assets included in
distribution costs is GBP0.2 million (2021: GBP0.2 million) and in
administrative expenses is GBP8.8 million (2021: GBP4.1
million).
12 Property, plant and equipment
Short Fixtures Computer Motor Land Total
leasehold and fittings equipment vehicles & buildings
alterations
GBP million GBP million GBP million GBP million GBP million GBP million
-------------------------- ------------- -------------- ------------ ------------ ------------- ------------
Cost
Balance at 29 February
2020 9.1 86.9 6.3 0.9 40.8 144.0
Additions 10.2 16.1 3.6 0.1 7.0 37.0
Exchange differences - - - - (0.2) (0.2)
Disposals - (0.6) (0.8) - - (1.4)
-------------------------- ------------- -------------- ------------ ------------ ------------- ------------
Balance at 28 February
2021 19.3 102.4 9.1 1.0 47.6 179.4
Additions 7.3 129.0 4.4 0.2 88.6 229.5
Exchange differences - - - - 0.1 0.1
Disposals (0.1) (0.9) (1.2) (0.2) - (2.4)
-------------------------- ------------- -------------- ------------ ------------ ------------- ------------
Balance at 28 February
2022 26.5 230.5 12.3 1.0 136.3 406.6
========================== ============= ============== ============ ============ ============= ============
Accumulated depreciation
Balance at 29 February
2020 2.7 16.0 3.5 0.3 2.3 24.8
Depreciation charge for
the year 2.0 9.1 2.1 0.3 0.9 14.4
Disposals - (0.6) (0.8) - - (1.4)
-------------------------- ------------- -------------- ------------ ------------ ------------- ------------
Balance at 28 February
2021 4.7 24.5 4.8 0.6 3.2 37.8
Depreciation charge for
the year 2.1 14.4 2.9 0.2 2.4 22.0
Disposals (0.1) (0.9) (1.2) (0.2) - (2.4)
-------------------------- ------------- -------------- ------------ ------------ ------------- ------------
Balance at 28 February
2022 6.7 38.0 6.5 0.6 5.6 57.4
========================== ============= ============== ============ ============ ============= ============
Net book value
At 29 February 2020 6.4 70.9 2.8 0.6 38.5 119.2
At 28 February 2021 14.6 77.9 4.3 0.4 44.4 141.6
At 28 February 2022 19.8 192.5 5.8 0.4 130.7 349.2
-------------------------- ------------- -------------- ------------ ------------ ------------- ------------
The amounts of depreciation included in the statement of
comprehensive income in distribution costs is GBP13.1 million
(2021: GBP8.7 million) and in administrative expenses is GBP8.9
million (2021: GBP5.7 million).
13 Right-of-use assets
Short leasehold properties
GBP million
Cost
Balance at 29 February 2020 27.1
Additions 7.8
--------------------------------- ---------------------------
Balance at 28 February 2021 34.9
Additions 43.0
Balance at 28 February 2022 77.9
================================= ===========================
Accumulated depreciation
Balance at 29 February 2020 12.5
Depreciation for year 5.7
--------------------------------- ---------------------------
Balance at 28 February 2021 18.2
Depreciation for year 10.0
--------------------------------- ---------------------------
Balance at 28 February 2022 28.2
================================= ===========================
Net book value
At 29 February 2020 14.6
At 28 February 2021 16.7
At 28 February 2022 49.7
--------------------------------- ---------------------------
14 Deferred tax
Assets
Unused Depreciation Share-based payments Total
tax losses in excess of
capital
allowances
GBP million GBP million GBP million GBP million
------------------------------------------------- ------------ -------------- --------------------- ------------
Asset at 29 February 2020 - 0.3 5.7 6.0
Recognised in statement of comprehensive income - 0.3 (2.9) (2.6)
Debit in equity - - (0.2) (0.2)
------------------------------------------------- ------------ -------------- --------------------- ------------
Asset at 28 February 2021 - 0.6 2.6 3.2
Recognised in statement of comprehensive income 7.5 (0.6) (0.1) 6.8
Debit in equity - - (2.5) (2.5)
------------------------------------------------- ------------ -------------- --------------------- ------------
Asset at 28 February 2022 7.5 - - 7.5
------------------------------------------------- ------------ -------------- --------------------- ------------
Liabilities
Business combinations Capital allowances in Share-based payments Total
excess of depreciation
GBP million GBP million GBP million GBP million
---------------------------- ---------------------- --------------------------- --------------------- ------------
Liability at 29 February
2020 (1.2) (2.4) - (3.6)
Recognised in statement of
comprehensive income 0.2 (0.8) - (0.6)
---------------------------- ---------------------- --------------------------- --------------------- ------------
Liability at 28 February
2021 (1.0) (3.2) - (4.2)
Recognised in statement of
comprehensive income 0.2 (19.3) (1.5) (20.6)
Debit in equity - - (0.5) (0.5)
---------------------------- ---------------------- --------------------------- --------------------- ------------
Liability at 28 February
2022 (0.8) (22.5) (2.0) (25.3)
---------------------------- ---------------------- --------------------------- --------------------- ------------
Recognition of the deferred tax assets is based upon the
expected generation of future taxable profits. The deferred tax
liability will reverse in more than one year's time as the
intangible assets are amortised. Deferred tax is calculated at 25%
as enacted from April 2023 by the UK Government.
15 Inventories
2022 2021
GBP million GBP million
------------------------- ----------- -----------
Finished goods 262.4 133.5
Finished goods - returns 17.0 11.4
------------------------- ----------- -----------
279.4 144.9
------------------------- ----------- -----------
The value of inventories included within cost of sales for the
year was GBP939.1 million (2021: GBP791.7 million). The finished
goods returns is the estimated value of stock at customers but
expected to be returned. An impairment provision of GBP18.4 million
(2021: GBP15.8 million) was charged to the statement of
comprehensive income. There were no write-backs of prior period
provisions during the year.
16 Trade and other receivables
2022 2021
GBP million GBP million
------------------------------------- ----------- -----------
Trade receivables 34.6 18.3
Prepayments 21.3 10.4
Accrued income 2.1 0.3
Taxes and social security receivable - 11.6
------------------------------------- ----------- -----------
58.0 40.6
===================================== =========== ===========
Trade receivables represent amounts due from wholesale customers
and advance payments to suppliers.
The fair value of trade and other receivables is not materially
different from the carrying value.
Where specific trade receivables are not considered to be at
risk and requiring a provision, the trade receivables impairment
provision is calculated using the simplified approach to the
expected credit loss model, based on the following percentages:
2022 2021
Age of trade receivable % %
------------------------ ---- ----
60 - 90 days past due 1 1
91 - 120 days past due 5 5
Over 121 days past due 90 90
------------------------- ---- ----
The provision for impairment of receivables is charged to
administrative expenses in the statement of comprehensive income.
The maturing profile of unsecured trade receivables and the
provisions for impairment are as follows:
2022 2021
GBP million GBP million
------------------------------- ----------- -----------
Due within 30 days 25.1 18.3
Provision for impairment (0.1) (2.4)
Due in 31 to 90 days 10.7 3.6
Provision for impairment (2.4) (1.4)
Past due 1.3 0.2
Provision for impairment - -
Total amounts due and past due 37.1 22.1
Total provision for impairment (2.5) (3.8)
------------------------------- ----------- -----------
34.6 18.3
=============================== =========== ===========
17 Cash and cash equivalents
2022 2021
GBP million GBP million
------------------------- ----------- -----------
At start of year 276.0 245.4
Net movement during year (174.5) 30.8
Effect of exchange rates (0.2) (0.2)
------------------------- ----------- -----------
At end of year 101.3 276.0
========================= =========== ===========
There is no material credit risk associated with the cash at
bank due to the healthy credit ratings of the banks of BBB+ and
higher.
18 Trade and other payables
2022 2021
GBP million GBP million
---------------------------------- ----------- -----------
Trade payables 97.5 47.9
Other creditors 6.6 6.4
Accruals 152.4 144.0
Deferred income 16.7 10.2
Taxes and social security payable 23.4 14.4
---------------------------------- ----------- -----------
296.6 222.9
================================== =========== ===========
The fair value of trade payables is not materially different
from the carrying value.
19 Provisions
Dilapidations Returns Claims Total
GBP million GBP million GBP million GBP million
------------------------------------------------------------ -------------- ------------ ------------ ------------
Provision at 28 February 2021 5.9 24.2 23.4 53.5
Movements in provision charged/(credited) to income
statement:
Prior year provision utilised (2.2) (24.2) (5.6) (32.0)
Increase in provision in current year - 32.0 - 32.0
------------------------------------------------------------ -------------- ------------ ------------ ------------
Provision at 28 February 2022 3.7 32.0 17.8 53.5
============================================================ ============== ============ ============ ============
The dilapidation provision represents the estimated exit cost of
leased premises; the returns provision represents the revenue
reduction of estimated customer returns which occur over the two to
three months after the date of sale; and the claims represents the
estimate of claims against the group that are expected to settle in
the period within nine to twelve months after the year-end.
20 Interest-bearing loans and borrowings
This note provides information about the contractual terms of
the group's interest-bearing loans and borrowings, which are
measured at amortised cost.
Terms and debt repayment schedule
Nominal
interest Year of 2022 2021
Currency rate maturity GBP million GBP million
-------------------------- --------- ---------- --------- ----------- -----------
Revolving credit facility GBGBP SONIA CIA 2022 100.0 -
Movement in interest-bearing loans and borrowings
2022 2021
GBP million GBP million
----------------------- ----------- -----------
Opening balance - 4.8
Increase of borrowings 100.0 -
Interest accrued 0.8 0.1
Interest paid (0.8) (0.1)
Capital paid - (4.8)
Closing balance 100.0 -
======================= =========== ===========
A new revolving credit facility of GBP325 million with a
three-year term was agreed after the year-end in March 2022 to
support the group's liquidity requirements and provide a greater
degree of headroom.
Reconciliation of movements in cash flows from financing
activities to movements in liabilities:
Balance Cash flow Additions Statement Movement Balance
28 February from financing of comprehensive in retained at 28 February
2021 activities income earnings 2022
and other
reserves
GBP million GBP million GBP million GBP million GBP million GBP million
----------------- ------------- ---------------- ------------ ------------------ ------------- ----------------
Equity 472.5 (12.4) - (19.5) 23.7 464.3
Leases 18.3 (10.2) 43.0 0.8 - 51.9
Bank borrowings - 99.1 - 0.9 - 100.0
----------------- ------------- ---------------- ------------ ------------------ ------------- ----------------
490.8 76.5 43.0 (17.8) 23.7 616.2
================= ============= ================ ============ ================== ============= ================
21 Lease liabilities
Minimum lease payments Within 1-2 years 2-5 years 5-10 years More than Total
due 1 year 10 years
GBP million GBP million GBP million GBP million GBP million GBP million
------------------------ ------------ ------------ ------------ ------------ ------------ ------------
28 February 2022
Lease payments 8.8 5.9 7.7 13.1 24.4 59.9
Finance charges (0.9) (0.7) (2.0) (2.5) (1.9) (8.0)
------------------------ ------------ ------------ ------------ ------------ ------------ ------------
Net present value 7.9 5.2 5.7 10.6 22.5 51.9
======================== ============ ============ ============ ============ ============ ============
2022 2021
GBP million GBP million
---------------------------- ----------- -----------
Current lease liability 7.9 6.7
Non-current lease liability 44.0 11.6
---------------------------- ----------- -----------
Total 51.9 18.3
---------------------------- ----------- -----------
Movement in lease liabilities:
2022 2021
GBP million GBP million
------------------------- ----------- -----------
Opening balance 18.3 16.2
Interest accrued 0.8 0.2
Cash flow lease payments (10.2) (5.9)
Additions 43.0 7.8
Closing balance 51.9 18.3
========================= =========== ===========
22 Financial instruments
(a) Fair values of financial instruments
Trade and other receivables
The fair value of trade and other receivables is estimated as
the present value of future cash flows, discounted at the market
rate of interest at the reporting date if the effect is
material.
Trade and other payables
The fair value of trade and other payables is estimated as the
present value of future cash flows, discounted at the market rate
of interest at the reporting date if the effect is material.
Cash and cash equivalents
The fair value of cash and cash equivalents is estimated as its
carrying amount where the cash is repayable on demand. Where it is
not repayable on demand then the fair value is estimated at the
present value of future cash flows, discounted at the market rate
of interest at the reporting date.
Interest-bearing borrowings
Fair value is calculated based on the present value of future
principal and interest cash flows, discounted at the market rate of
interest at the reporting date.
Cash flow hedges
Fair value is calculated using forward interest rate points to
restate the hedge to fair market value.
Fair values
2022 2021
GBP million GBP million
-------------------------- ----------- -----------
Financial assets
Cash and cash equivalents 101.3 276.0
Cash flow hedges 17.0 30.2
Trade receivables 34.6 18.3
Accrued income 2.1 0.3
-------------------------- ----------- -----------
155.0 324.8
========================== =========== ===========
2022 2021
GBP million GBP million
-------------------------------------- ----------- -----------
Financial liabilities
Cash flow hedges 6.8 4.5
Trade payables 97.5 47.9
Other creditors 6.6 6.4
Accruals 152.4 144.0
Provisions 53.5 53.5
Interest-bearing loans and borrowings 100.0 -
Lease liabilities 51.9 18.3
-------------------------------------- ----------- -----------
468.7 274.6
====================================== =========== ===========
23 Share capital
2022 2021
GBP million GBP million
------------------------------------------------------------------- ----------- -----------
1,267,634,949 authorised and fully paid ordinary shares of 1p each
( 2021: 1,263,255,457) 12.7 12.6
------------------------------------------------------------------- ----------- -----------
During the year, a total of 4.4 million shares were issued under
the share incentive plans (2021: 5.2 million). On 21 February 2022,
63,761 (2021: 14,276) new ordinary shares were issued to
non-executive directors as part of their annual remuneration.
The directors do not recommend the payment of a dividend so that
cash is retained in the group for capital expenditure projects that
are required for the rapid growth and efficiency improvements of
the business and for suitable business acquisitions (2021:
GBPnil).
24 Shares to be issued
2022 2021
GBP million GBP million
----------- -----------
31.9 31.9
The shares to be issued represents the fair value of the
contingent shares to be issued to the non-controlling interests of
PrettyLittleThing.com Limited, in accordance with the acquisition
agreement entered into and announced on 28 May 2020. Under this
agreement, 16,112,331 Ordinary Shares in boohoo group plc are to be
issued subject to the group's share price averaging 491 pence per
share over a six-month period, up until a longstop date of 14 March
2024. If this condition is not met, the consideration will
lapse.
25 Reserves
2022 2021
GBP million GBP million
------------------------------------------------------------------------- ----------- -----------
Translation reserve 0.2 0.5
Capital redemption reserve 0.1 0.1
Reconstruction reserve (515.3) (515.3)
Acquisition of non-controlling interest in PrettyLittleThing.com Limited (281.3) (281.3)
Proceeds from issue of growth shares in boohoo holdings Limited 0.8 0.8
------------------------------------------------------------------------- ----------- -----------
(795.5) (795.2)
------------------------------------------------------------------------- ----------- -----------
The translation reserve arises from the movement in the
revaluation of subsidiary balance sheets in foreign currencies; the
capital redemption reserve arose from a capital reconstruction in
2014; the reconstruction reserve arose on the impairment of the
carrying value of the subsidiary company in 2014 at that date; and
the acquisition of the non-controlling interest in
PrettyLittleThing is the excess of consideration paid over the
carrying value of the non-controlling interest as at the date of
acquisition in May 2020, written off to reserves.
26 Capital commitments
Capital expenditure contracted for at the end of the reporting
year but not yet incurred is as follows:
2022 2021
GBP million GBP million
------------------------------ ----------- -----------
Property, plant and equipment 21.8 5.5
27 Contingent liabilities
From time to time, the group can be subject to various legal
proceedings and claims that arise in the ordinary course of
business, which may include cases relating to the group's brand and
trading name. All such cases brought against the group are robustly
defended and a liability is recorded only when it is probable that
the case will result in a future economic outflow and that the
outflow can be reliably measured.
Appendices
Growth rates on prior period revenue by region
Revenue by period for the year to 28 February 2022 (FY22)
GBPm 4m to 31 December 2m to 28 February 12m to 28 February
----------------------------
FY22 FY21 yoy yoy FY22 FY21 yoy yoy FY22 FY21 yoy yoy
% % CER % % % %
CER CER
------ ------ ----- ------- ------ ------ ----- ----- -------- -------- ----- -----
Total 714.5 660.8 8% 9% 292.5 268.0 9% 9% 1,982.8 1,745.3 14% 14%
------ ------ ----- ------- ------ ------ ----- ----- -------- -------- ----- -----
Revenue by region
------ ------ ----- ----- -------- -------- -----
UK 451.0 356.7 26% 26% 182.3 158.3 15% 15% 1,202.8 945.1 27% 27%
------ ------ ----- ------- ------ ------ ----- ----- -------- -------- -----
ROE 79.9 90.3 -11% -11% 34.9 30.5 14% 13% 219.2 244.7 -10% -9%
------ ------ ----- ------- ------ ------ ----- ----- -------- -------- ----- -----
USA 145.8 168.2 -13% -12% 55.4 64.6 -14% -13% 451.6 435.1 4% 4%
------ ------ ----- ------- ------ ------ ----- ----- -------- -------- ----- -----
ROW 37.8 45.6 -17% -16% 19.8 14.6 36% 34% 109.2 120.4 -10% -8%
------ ------ ----- ------- ------ ------ ----- ----- -------- -------- ----- -----
GBPm 3m to 31 May 3m to 31 August 6m to 31 August
----------------------------
FY22 FY21 yoy yoy FY21 FY20 yoy yoy FY21 FY20 yoy yoy
% % CER % % % %
CER CER
------ ------ ----- ------- ------ ------ ----- ----- ------ ------ ----- -----
Total 486.1 367.8 32% 32% 489.8 448.7 9% 10% 975.9 816.5 20% 20%
------ ------ ----- ------- ------ ------ ----- ----- ------ ------ ----- -----
Revenue by region
------ ------ ----- ----- ------ ------ -----
UK 274.5 183.0 50% 50% 294.9 247.2 19% 19% 569.4 430.2 32% 32%
------ ------ ----- ------- ------ ------ ----- ----- ------ ------ -----
ROE 54.4 63.4 -14% -12% 50.0 60.3 -17% -16% 104.4 123.7 -16% -14%
------ ------ ----- ------- ------ ------ ----- ----- ------ ------ ----- -----
USA 131.9 92.0 43% 40% 118.6 110.2 8% 9% 250.5 202.2 24% 23%
------ ------ ----- ------- ------ ------ ----- ----- ------ ------ ----- -----
ROW 25.2 29.4 -15% -10% 26.3 31.0 -15% -18% 51.5 60.4 -15% -14%
------ ------ ----- ------- ------ ------ ----- ----- ------ ------ ----- -----
Revenue by period for the year to 28 February 2021 (FY21)
GBPm 4m to 31 December 2m to 28 February 12m to 28 February
----------------------------
FY21 FY20 yoy yoy FY21 FY20 yoy yoy FY21 FY20 yoy yoy
% % CER % % % %
CER CER
------ ------ ---- ------- ------ ------ ----- ----- -------- -------- ---- -----
Total 660.8 473.7 40% 40% 268.0 196.3 37% 36% 1,745.3 1,234.9 41% 41%
------ ------ ---- ------- ------ ------ ----- ----- -------- -------- ---- -----
Revenue by region
------ ------ ----- ----- -------- -------- -----
UK 356.7 255.8 39% 39% 158.3 108.5 46% 46% 945.1 679.4 39% 39%
------ ------ ---- ------- ------ ------ ----- ----- -------- -------- -----
ROE 90.3 69.6 30% 32% 30.5 31.4 (3)% (1)% 244.7 188.4 30% 30%
------ ------ ---- ------- ------ ------ ----- ----- -------- -------- ---- -----
USA 168.2 110.6 52% 51% 64.6 42.3 53% 46% 435.1 263.6 65% 63%
------ ------ ---- ------- ------ ------ ----- ----- -------- -------- ---- -----
ROW 45.6 37.7 20% 24% 14.6 14.1 3% 11% 120.4 103.5 16% 19%
------ ------ ---- ------- ------ ------ ----- ----- -------- -------- ---- -----
GBPm 3m to 31 May 3m to 31 August 6m to 31 August
---------------------------
FY21 FY20 yoy yoy FY21 FY20 yoy yoy FY21 FY20 yoy yoy
% % CER % % % %
CER CER
------ ------ ---- ------- ------ ------ ---- ----- ------ ------ ---- -----
Total 367.8 254.3 45% 45% 448.7 310.5 44% 44% 816.5 564.9 45% 44%
------ ------ ---- ------- ------ ------ ---- ----- ------ ------ ---- -----
Revenue by region
------ ------ ---- ----- ------ ------ -----
UK 183.0 140.6 30% 30% 247.2 174.4 42% 42% 430.2 315.0 37% 37%
------ ------ ---- ------- ------ ------ ---- ----- ------ ------ -----
ROE 63.4 38.2 66% 65% 60.3 49.2 23% 21% 123.7 87.5 41% 40%
------ ------ ---- ------- ------ ------ ---- ----- ------ ------ ---- -----
USA 92.0 51.3 79% 83% 110.2 59.4 86% 83% 202.2 110.7 83% 83%
------ ------ ---- ------- ------ ------ ---- ----- ------ ------ ---- -----
ROW 29.4 24.2 22% 22% 31.0 27.5 12% 14% 60.4 51.7 17% 18%
------ ------ ---- ------- ------ ------ ---- ----- ------ ------ ---- -----
CER in this appendix for the year ended 28 February 2021 is
calculated using exchange rates prevailing during the year ending
28 February 2021. Nomenclature: ROE - rest of Europe; ROW - rest of
world; yoy - year-on-year; CER - constant exchange rate
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