TIDMQUIZ
RNS Number : 9741E
Quiz PLC
05 July 2023
5 July 2023
QUIZ plc
("QUIZ" or the "Group")
Final Results for the year ended 31 March 2023
Continued revenue recovery and improved profitability in
FY23
QUIZ , the omni-channel fashion brand, announces its final
audited results for the year ended 31 March 2023 ("FY 2023").
Financial highlights:
The income statement set out below is included to show the
underlying performance of the Group:
Year Year
GBPm ended ended
31 March 31 March Change Change
2023 2022 GBPm %
Revenue 91.7 78.4 +13.3 +17.0%
Gross profit 56.5 47.3 +9.2 +19.5%
Operating expenses (54.2) (47.4) -6.8 +14.5%
Government grants - 1.0 -1.0 -100.0%
Other income 0.2 - +0.2 -
Operating profit 2.5 0.9 +1.6 +169.9%
Finance costs (net) (0.2) (0.1) -0.1 +103.3%
Profit before tax 2.3 0.8 +1.5 +191.5%
========== ========== ======= ========
EBITDA 6.2 5.1 +1.1 +20.8%
========== ========== ======= ========
-- Group revenue increased 17% year on year supported by the
cessation of all social restrictions leading to increased
demand.
-- Higher levels of full price sales resulted in gross margin
increasing to 61.6% (2022: 60.3%), which was above the level
achieved prior to the pandemic
-- Efficient cost control with the proportionate rise in
operating costs (distribution and administrative costs) being below
the increase in revenues despite the significant inflationary
pressures experienced during the year
-- EBITDA increased 21% to GBP6.2 million (2022: GBP5.1 million)
-- Profit before tax increased 192% to GBP2.3 million (2022: GBP0.8 million)
-- Operating cash inflows of GBP5.9 million (2022: inflow of GBP5.3 million)
-- Total liquidity headroom at 31 March 2023 of GBP8.3 million,
being a cash balance of GBP7.6 million and GBP2.1 million of
unutilised bank facilities less GBP1.4 million of bank loans (31
March 2022: GBP6.5 million, being cash of GBP5.8 million and GBP2.1
million of unutilised bank facilities less GBP1.4 million of bank
loans)
Operational highlights:
-- Continued online growth with a 13% increase in sales through QUIZ's own website
-- Active customers(1) increased 11% on the prior financial year
in line with demand for QUIZ's core occasion wear offering
-- The benefits of previous store restructuring reflected in a
positive contribution from stores
-- Continued growth in International revenues with a 10% increase year on year
-- QUIZ's store estate comprised 62 stores in the United Kingdom
and six in the Republic of Ireland at the end of the year (2022: 62
in the UK and 5 in the ROI)
Post year end and Outlook:
-- The Group generated revenue of GBP23.2 million in the three
months to 30 June 2023, representing a 15% decrease on the prior
year in part reflecting the strong prior year comparatives in the
first half as well as the impact of the macroeconomic uncertainty
and inflationary pressures on consumer demand.
-- Revenues in the first three months of the current financial
year have been broadly consistent on a like-for-like basis with
those generated in the comparable period in FY 2019, that being the
last period unaffected by coronavirus related factors.
-- Continued focus on growing of revenues from our own stores
and website with three new stores opening in the United Kingdom
post year end
-- Bank facilities extended to 30 June 2024 and increased from
GBP3.5 million to GBP4.0 million
-- Total liquidity headroom at 4 July 2023 of GBP7.1 million,
being a cash balance of GBP3.7 million and GBP3.7 million of
undrawn banking facilities less GBP0.3 million of bank loans
-- During H2 the trading environment is expected to remain
challenging, albeit the Group has softer comparatives in the second
half of the financial year. Reflecting the uncertainty with regards
to consumer demand and inflationary cost pressures, the Board
currently anticipates that profit before tax for current year will
be similar that generated in the past year.
-- Longer term the Board remains confident the Group will
deliver sustainable and profitable growth
1. An active customer is a customer registered on our database
who has transacted in the last twelve months.
Tarak Ramzan, Founder and Chief Executive Officer,
commented:
" Our FY 2023 results reflected a strong recovery in consumer
demand for QUIZ's occasion-wear-led product offering, resulting in
positive sales and profit growth. The past year once again
demonstrated the benefits of the Group's omni-channel model as we
saw encouraging revenue growth across stores and online.
We continue to firmly believe that the QUIZ brand has a clear,
differentiated position in the market and continues to resonate
with a broad age range of customers. The Group continues to focus
on achieving its online growth potential through its website and we
were encouraged by the increase in sales and active customers
during the year.
The trading environment in the opening months of the new
financial year has been tough reflecting the widely publicised
external economic factors impacting consumer demand. Whilst this
challenging backdrop is expected to continue into the second half,
the Board remains confident that the Group's omni-channel business
model and differentiated brand will enable the Group's long-term
success and profitable growth."
Enquiries :
QUIZ plc Via Hudson Sandler
Tarak Ramzan, Chief Executive
Officer
Gerry Sweeney, Chief Financial
Officer
Sheraz Ramzan, Chief Commercial
Officer
Panmure Gordon
(Nominated Adviser and Broker)
Emma Earl
Rupert Dearden +44 (0) 207 886 2500
Hudson Sandler LLP (Public Relations) +44 (0) 207 796 4133
Alex Brennan / Ben Wilson quiz@hudsonsandler.com
Notes:
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 as it forms part of UK
domestic law by virtue of the European Union (Withdrawal) Act 2018
("MAR").
About QUIZ :
QUIZ is an omni-channel fashion brand, specialising in occasion
wear and dressy casual wear. QUIZ delivers a distinct proposition
that empowers its fashion forward customers to stand out from the
crowd.
QUIZ's buying and design teams constantly develop its own
product lines, ensuring the latest glamorous looks at value prices.
This flexible supply chain, together with the winning formula of
style, quality, value and speed-to-market has enabled QUIZ to grow
rapidly into an international brand with stores, concessions,
franchise stores, wholesale partners and international online
partners
QUIZ operates through an omni-channel business model, which
encompasses online sales, standalone stores, concessions,
international franchises and wholesale arrangements.
To download images please visit:
http://www.quizgroup.co.uk/media-download-centre/
For further information:
https://www.quizclothing.co.uk/
http://www.quizgroup.co.uk/
CHAIRMAN'S STATEMENT
Introduction
The Group's financial statements for the year ended 31 March
2023 show an uplift in revenues reflecting increased consumer
demand following the cessation of COVID-19 related lockdowns and
social restrictions. As a result of the increased revenues as well
as improved gross margins and continued tight cost control, we are
pleased to report an uplift in profitability.
Our trademark occasion and dressy wear for social events and
activities has always been at the centre of the QUIZ brand. QUIZ
has traditionally provided options for a variety of social
occasions such as attending lunch with friends, a day at the races,
a Christmas party or a wedding. The return of these and other
activities in the year has led the notable positive impact on
customer demand.
The positive performance in the year was driven by strong growth
recorded across each of the Group's key channels of both owned and
third-party retail and online operations, reinforcing the benefits
of QUIZ's omni-channel model.
Our store portfolio performed well during the Period, generating
a positive financial contribution. This reflects the favourable
lease arrangements and well-located nature of our store estate as
well as customers' desire to interact directly with the brand
whether that be through purchasing in-store, utilising our click
and collect in store service, ordering in-store, or
exchanging/returning to store.
I would like to take this opportunity to thank the Group's
management team and all colleagues across the business for their
continued commitment and hard work that contributed to the improved
financial performance in the current year.
FY2023 performance overview
The removal of all social restrictions led to increased demand
and strong like-for like sales in the first half of the year.
Demand moderated in the second half of the year as the
cost-of-living pressures progressively impacted consumer spend and,
as a result, sales were broadly in line with their pre-pandemic
levels on a like-for-like basis. Across the year to 31 March 2023
there was a 17% increase in the Group's revenues to GBP91.7million
(2022: GBP78.4 million).
As demand increased and revenues improved, so did the proportion
of full price sales. This is reflected in the 130bps improvement in
the gross margin generated compared to the same period in the
previous year.
Management retained close control on operating costs with the
proportionate increase in costs being less than the rise in
revenues in the year despite the significant inflationary
pressures.
Across our store estate the majority of lease arrangements
provide increased flexibility with charges predominantly linked to
revenues generated. During the year the business secured a number
of longer lease arrangements for stores to secure the positive
contribution being generated. As a result, the stores currently
have an average lease term of 23 months, up from 15 months in the
previous year.
During the year the number of concessions operated by the Group
was broadly maintained and there were a number of changes made to
the arrangements with third party websites to increase the
proportion of sales despatched directly by QUIZ. As a result, the
Group's performance benefited from a higher proportion of revenues
generated from its own stores and website which typically generate
a higher contribution than other revenue streams.
Further to the above, operating profit before financing and
taxation was GBP2.5 million (2022: GBP0.9 million). EBITDA was
GBP6.2 million (2022: GBP5.1million). Profit before tax amounted to
GBP2.3 million (2022: GBP0.8 million).
The Financial Review section provides more detail on the Group's
financial performance during the year.
Cash position
The Group remains focussed on its cash balance and ensuring that
the business has the necessary resources to grow and minimise the
impact of any disruption arising from reduced consumer demand.
Increasing our cash balance provides greater financial stability
and helps ensure that the business can continue to capitalise on
demand for its product.
We were pleased to generate a cash inflow of GBP5.9 million from
operating activities in the year (2022: inflow of GBP5.3 million).
After a GBP2.5 million outflow acquiring intangible assets and
property, plant and equipment (2022: GBP0.5 million) total
liquidity headroom improved by GBP1.8 million. As at 31 March 2023,
the Group had GBP8.3 million of total liquidity headroom, being a
cash balance of GBP7.6 million and GBP2.1 million of undrawn bank
facilities less GBP1.4 million of bank loans(31 March 2022: GBP6.5
million of total liquidity headroom).
On 4 July 2023 the total liquidity headroom available was GBP7.1
million, being a GBP3.7 million cash balance and GBP3.7 million of
undrawn bank facilities less GBP0.3 million of bank loans. The cash
utilisation since 31 March partially reflects investment in three
new stores and the commencement of works to expand our distribution
centre.
The bank facilities available to the Group were recently renewed
and were increased from GBP3.5 million to GBP4.0 million. These
facilities will expire on 30 June 2024. There are no financial
covenants applicable to these facilities.
This will support the business's initiatives to further
diversify the product range and ensure the Group is well positioned
to respond to the continued increase in demand for its core
occasion wear offering in due course.
Operating an ethical supply chain
The Board continues to prioritise ensuring that the Group has an
ethical and responsible supply chain that all QUIZ's stakeholders
are proud of. The Group is committed to continuing to invest in
this critical area of the business to ensure that the Group's
systems remain robust and that the Group's strict Ethical Code of
Practice is always adhered to by all QUIZ suppliers.
There is an ongoing programme in place to ensure that all our
products are supplied in line with our Ethical Code of Practice.
Regular supplier visits continue to be conducted and processes are
in place to allow for clear visibility across the Group's supply
chain. The Board remains resolutely committed to ensuring the
Group's systems, processes and culture are fit for purpose to
assure compliance in this area.
Dividends
The Board does not recommend the payment of a final dividend
(2022: GBPNil).
The business will remain focused on delivering a sustainable
profitable performance, subject to which the Board would anticipate
reinstating dividend payments.
Outlook and current trading
Consistent with many other fashion and clothing retailers,
year-on-year growth has moderated this calendar year as
inflationary pressures continue to impact consumer confidence. As a
result of these external headwinds as well as the strong prior year
comparatives which benefited from increased demand as social
restrictions ceased, like-for-like revenues in recent months have
been lower than the previous year.
However, despite the challenging trading conditions in recent
months, Group revenues in the first three months of FY24 have been
broadly consistent on a like-for-like basis with those generated in
the comparable period in the year ended 31 March 2019, that being
the last period unaffected by coronavirus related factors.
The Group has generated sales of GBP23.2 million in the three
months to 30 June 2023, broken down across the Group's channels as
follows:
I April I April
to 30 June to 30 June Year-on-year
2023 2022 change
Online GBP7.6m GBP9.5m - 20.0%
UK stores and concessions GBP11.0m GBP13.0m - 15.4%
International GBP4.6m GBP4.8m - 4.2%
Total GBP23.2m GBP27.3m - 15.1%
Gross margins are in line with expectations and are broadly
consistent with the previous year.
The business continues to actively manage the increased cost
pressures affecting the wider retail sector, but we would expect an
increase in operating costs particularly in relation to payroll
costs and utility costs further to the expiry of the previous price
arrangements which were established two years ago.
Given the uncertainty with regards to consumer demand and the
inflationary cost pressures the Board anticipates that profit
before tax for the current financial year will be broadly similar
to that generated in FY23.
Despite the near-term economic challenges the Board is confident
that the Group's omni-channel business model can deliver long-term
success underpinned by a clear focus on the development of revenues
from our own stores and website. We are encouraged by the continued
demand for the Group's product proposition and the revenue growth
increased profitability achieved in the previous year, and we
remain confident in the Group's future success.
Peter Cowgill
Non-Executive Chairman
CHIEF EXECUTIVE'S REPORT
Introduction
QUIZ's FY 2023 financial year reflected a strong recovery in
demand further to the cessation of all COVID-19 related social
restrictions. Across the year sales grew positively on a
like-for-like basis.
The past year illustrated the benefits of QUIZ's omni-channel
model which provides customers with the opportunity to engage with
the QUIZ brand across different channels. As a result, we generated
revenue growth in each channel during the year as follows:
Share Share
Year-on-year of revenue of revenue
FY 2023 FY 2022 change 2023 2022
Online GBP29.8m GBP26.7m + 12% 32.5% 34.1%
International GBP16.4m GBP14.9m + 10% 17.9% 19.0%
UK stores and concessions GBP45.5m GBP36.8m + 24% 49.6% 46.9%
Total GBP91.7m GBP78.4m + 17%
The Group's long-term strategy remains focussed on the
development of the QUIZ brand through its omni-channel distribution
model and to adapt and improve to ensure the brand continues to
succeed. The Group continues to focus on achieving its online
growth potential through its own website, which has historically
generated a higher contribution than revenues from third party
websites, supported by a profitable store and concession
portfolio.
We continue to firmly believe that the QUIZ brand has a clear,
differentiated position in the market as an occasion wear led brand
and continues to resonate with a broad age range of customers. This
belief is supported by the increased demand for our products across
the year.
Optimising the omni-channel model in the UK
QUIZ's online channel provides the potential for significant
long-term growth. The business has benefited from the return to
social activities and the corresponding increase in customer demand
for occasion wear has increased the profitability of sales through
the higher revenues and margins generated in the year.
Given the long-term trends towards increased online shopping, we
continue to believe that QUIZ's online channel offers significant
long-term profitable growth potential for the Group. In FY 2023,
given the stronger growth experienced across the stores and
concession revenues in the year, online sales represented 33% of
QUIZ's Group revenue (2022: 34%).
Going forward, the focus will be to ensure the business
continues to benefit from offering on trend product for social
activities ranging from lunch with friends through to attending
weddings. The business continues to benefit from altering its
product offering dependent upon the occasion, whether that be
attending a race day, going on holiday or preparing for the
Christmas party season.
The Group has continued to develop its store estate opening new
stores in Bracknell and Brighton and relocating stores in Aberdeen
and Lakeside. In addition, two stores closed during the year
therefore the number of stores operated at the end of the year
remained at 62.
Three new stores opened subsequent to the year end in
Southampton, Plymouth and Fareham. In addition, we have commenced
work on relocating our Braehead store and anticipate reopening a
store in Liverpool later in the year. We will continue to open new
stores where appropriate flexible lease arrangements can be
secured.
Concessions provide a flexible model to ensure that they are
making a positive contribution. During the year, 15 concessions
were closed and 13 opened resulting in a reduction in the number
operating at 31 March 2023 to 67.
The Group believes that stores and concessions with appropriate
cost bases will continue to make a positive contribution going
forward and is encouraged by the improvement in returns generated
from stores across the year. We will continue to undertake
initiatives to promote footfall into stores including trialling the
introduction of new product categories in store, utilising our
store network for online collections and returns, and improving
stock availability across the estate.
Selective international growth potential through capital light
model
We continue to receive positive customer reactions to the QUIZ
brand internationally. Our mix of casual and occasion wear can be
tailored for each market and our flexible routes to market has been
beneficial.
International customers also experienced increased demand
further to the cessation of lockdowns and the relaxation of social
restrictions. Given this, international revenues as a share of
Group revenues remained broadly consistent year on year at 18%
(2022: 19%). We continue to identify opportunities to extend our
sales through low-risk, low-cost international expansion driven by
our capital-light online, consignment and concession routes to
market.
Managing gross margin
During the current year, gross margins improved to levels in
excess of those generated prior to the pandemic. The increased
demand for newer, full price products experienced during the year
and the greater proportion of sales through the higher margin store
and concession channel resulted in the gross margin increasing to
61.6% (2022: 60.3%).
During the year we encountered increased cost pressures in
relation to product and shipping costs. We have successfully
adjusted prices to maintain our gross margin whilst broadening the
range of prices offered to customers so they have a wide range of
options suitable for their budgets.
Leveraging our cost base
We continue to carefully manage costs and will look to leverage
off the Group's existing infrastructure as revenues grow. The last
year has proven challenging given the inflationary cost pressures
impacting across the business with increased employee costs,
utility costs, and the removal of all reliefs associated with
business rates.
Given this we were pleased that the increase in operating costs
was restricted to 15% which was below the 17% increase in
revenues.
We will continue to review our cost base to ensure it is
appropriate for the revenues that will be generated going
forward.
A strong brand
QUIZ is a distinctive fashion brand which, over many years, has
developed a specialisation in occasion wear and dressy casual wear
for women. QUIZ's core business continues to deliver a distinct
proposition that empowers fashion-forward females to stand out from
the crowd.
We firmly believe that the QUIZ brand has a clear,
differentiated position in the market with a specialisation in
occasion wear and dressy casual wear for women, and the brand
continues to resonate with a broad age range of customers. This
belief was supported by the increased demand for our products over
the year as restrictions on social events were eased.
The number of online active customers increased during the year,
reflecting the recovery in online revenues and the appeal of the
QUIZ brand. The number of active customers, increased by 11% to
622,000 (2022: 563,000) which is approaching the levels achieved
prior to the pandemic.
During the period, the brand maintained its social media
engagement relative to the prior year, with increases in our
Instagram and Facebook audiences respectively and growth in our
engagement on Tik Tok.
Our flexible supply chain remains a key competitive
advantage
The business has a well invested infrastructure and a proven
successful supply chain which allows us to source clothes in a
responsible and ethical manner. This allows for the business to
respond to customer demands and to provide on-trend product whether
it be influenced by social media, the catwalk or television.
During the year we finalised plans to expand capacity at our
Distribution Centre. This work commenced subsequent to the year end
and will provide a new mezzanine level to increase storage space
and provide an improved layout to accommodate more efficient
working practices. The work will conclude in the Autumn and will
cost GBP1.3 million.
We continue to work to broaden our supply base and reduce any
dependency on any one particular supplier or region. Our supply
chain and ability to constantly refresh products for sale in store
and online are strong competitive advantages.
QUIZ continues to introduce new products each week in order to
meet customer demand as trends emerge throughout the season. The
Board believes this remains an important component for success as
customers increasingly access the options available of where, when
and how to shop.
QUIZ's sustainable collection
In the last year we introduced the QUIZ Eco collection, which
was our first step to creating an environmentally friendly
collection. The capsule collection was designed and manufactured in
the UK via the Global Recycled Standard certified route.
Going forward we will focus on using more sustainable materials
across our ranges to help minimise our environmental impact.
Targeted marketing investment
Underpinning the growth and expansion of the QUIZ brand is the
Group's approach to targeted and returns-driven marketing
investment. Our marketing activity utilised a pipeline of celebrity
and influencer activity across the year. These activities continued
to be supplemented with digital marketing and offline activity to
push the QUIZ brand to the forefront of our target customers'
minds.
Investment continued to be carefully managed during the year
given the Group's focus on cost management. Marketing spend
increased 17% to GBP2.7 million (2022: GBP2.3million) in line with
the increase in revenues and, as a result, marketing investment as
a proportion of Group sales for FY 2022 was maintained at 3.0%
(2022: 3.0%).
We are pleased to see a positive response to our ongoing social
media activity. This activity continues to be supplemented with
digital marketing and offline activity to ensure that QUIZ remains
at the forefront of our customers' minds.
The QUIZ community
Our business has progressed well in the last year; growing
revenues and profitability whilst investing to facilitate further
growth. The resilience of the business is a reflection of the
commitment and professionalism shown by our colleagues across our
stores and concessions, distribution centre and head office through
these difficult times. I would like to thank all my colleagues for
their hard work and contribution in the last year and we can look
forward to achieving further profitable growth going forward.
I would also like to thank our suppliers, business partners and
customers for their continued support, allowing the business and
brand to approach the future with confidence.
Tarak Ramzan
Chief Executive Officer
FINANCIAL AND BUSINESS REVIEW
Group overview
The business benefited from the complete removal of lockdowns
and social restrictions related to COVID-19 in early 2022. This
supported an uplift in revenues across each area of our business
during the year and a higher level of profitability which
contributed to a strengthening of the Group's financial
position.
Group revenue increased 17% to GBP91.7 million (2022: GBP78.4
million).
Further to this increase in revenues, operating profit generated
was GBP2.5 million (2022: GBP0.9 million).
Financial KPIs
FY 2023 FY 2022 Change
Revenue GBP91.7m GBP78.4m + 17.0%
Gross margin 61.6% 60.3% + 1.3%
Adjusted EBITDA % 6.8% 6.6% + 0.2%
Cash from operating activities GBP5.9m GBP5.3m + GBP0.6m
EBITDA increased to a profit of GBP6.2 million (2022: GBP5.1
million) which represented an EBITDA margin of 6.8% (2022: 6.6%).
Group profit before tax was GBP2.3 million (2022: GBP0.8 million).
Earnings per share was 1.64 pence (2022: 1.65 pence).
Cash net of bank borrowings at the year end amounted to GBP6.2
million (2022: GBP4.4 million).
Revenue
Group revenue increased by 17% to GBP91.7 million from GBP78.4
million in 2022, with our three revenue channels shown below:
Share Share
Year-on-year of revenue of revenue
FY 2023 FY 2022 growth 2023 2022
Online GBP29.8m GBP26.7m + 12% 32.5% 34.1%
International GBP16.4m GBP14.9m + 10% 17.9% 19.0%
UK stores and concessions GBP45.5m GBP36.8m + 24% 49.6% 46.9%
Total GBP91.7m GBP78.4m + 17%
Online
The increase in Online revenues reflects the increased demand
for product experienced across the business.
Revenues from QUIZ's own website grew 13% and contributed 70% of
total online sales (2022: 69%). Sales through third-party websites
increased 9% in the year. Most of the sales through third party
websites are now despatched from QUIZ's facilities which allows for
a reduction in the stock being held by third-parties, provides
improved service for customers and helps maximise the financial
returns generated.
The impact of the stronger demand during the year was reflected
in the number of active customers at 31 March 2023 which increased
11% in the year to 622,000 (2022: 563,000).
International
International sales include revenue from QUIZ standalone stores
and concessions in the Republic of Ireland and franchises in 19
countries.
As with the UK sales, International revenues benefited from
increased demand once pandemic related restrictions were lifted
leading to a 10% rise to GBP16.4 million (2022: GBP14.9
million).
Revenues in Ireland increased 48% in the year to GBP6.4 million
(2022: GBP4.3 million) further to the cessation of lockdown periods
which restricted trading. At 31 March 2023 the business operated
six stores and 18 concessions in Ireland (March 2022 - five stores
and 18 concessions),
Sales with our main franchise partners also benefited from the
return to previous demand levels. Further to ceasing arrangement
with a number of smaller customers, revenues decreased 6% to
GBP10.0 million (2022: GBP10.6 million).
UK stores and concessions
Sales in the Group's UK standalone stores and concessions
increased 24% to GBP45.5 million (2022: GBP36.8
million). The increase was largely attributable to a strong performance across our store estate.
As at 31 March 2023, the Group operated from 62 stores and 67
concessions (2022: 62 stores and 69 concessions). During the year,
two stores opened, two closed and two were relocated. There were a
number of changes in the concessions operated with 13 opening and
15 closing in the year.
As a result of these changes, total selling space across the
stores and concessions at 31 March 2023 increased by 7% to 145,000
sq. ft. (2022: 136,000 sq. ft.).
Gross margin
Gross margins in the year progressively improved and achieved
levels in excess of those generated prior to the pandemic. In the
current year, customers have continued to express their preference
for new products. In addition, a higher proportion of sales were
generated through stores and concessions which are traditionally
higher margin channels.
Promotional activity which is undertaken on a targeted basis
increased later in the year as consumer demand slowed.
Further to the factors, the gross margin in the year increased
to 61.6% (2022: 60.3%).
Progress was made in disposing of excess stock from previous
lockdown periods and this contributed to a GBP0.9 million reduction
in the provision against slow-moving stock in the year to GBP1.7
million (2022: GBP2.6 million). The Group remains focussed upon
ensuring that forward commitments on stock are managed to allow the
business to be responsive to changes in customer demand and that
any slow moving stock is discounted at an early stage to help
improve the turnover of stock.
During the year we continued to encounter increased product cost
and the costs associated with their shipment cost pressures. Whilst
we have marginally increased prices to maintain our gross margin,
we have ensured a range of price points is available to customers
to meet their price expectations.
The previously reported industry-wide global freight disruption
and increased costs abated in the second half of the year. This has
allowed for more product to shipped by air freight allowing the
product offering to be more responsive to trends and consumer
preferences.
Operating costs
Further to the Group's increased revenues and operational
activities there have been increases in operating costs, namely
administrative and distribution costs, in the year. Operating costs
increased by 15% from GBP47.4 million to GBP54.3million.
The increases in costs reflect the impact of higher revenues on
variable costs, including turnover rents, merchant fees, certain
distribution costs, utilities, travel and expenses.
Administrative costs increased by GBP5.1 million or 14% to
GBP41.7 million (2022: GBP36.6 million). The most significant
increases included:
-- A GBP2.8 million or a 42% rise in property costs to
GBP9.5million (2022: GBP6.7 million) which includes depreciation
charges in relation to leases for standalone stores. The increase
is primarily due to a GBP2.5 million increase in business rates for
retail businesses further to the removal of any COVID related
relief on the amount charged;
-- A GBP1.4 million increase in employee costs reflecting
increases in the amount paid as well as higher employee numbers
year-on-year; and
-- A GBP0.4 million or a 17% increase in marketing costs to
GBP2.7 million. Spend continued to be focused on digital marketing
where a clear Return on Investment can be demonstrated and spend to
drive broader awareness of the QUIZ brand and to ensure the
business benefited from the increased consumer demand for occasion
and dressy wear.
The above increases were partially offset by a GBP0.5 million or
21% decrease in depreciation and amortisation costs (excluding
depreciation charges in relation to leases for standalone stores
which are reflected in property costs) to GBP1.8 million (2022:
GBP2.3 million) which reflect the previous asset impairments and
therefore reduced depreciation charges recorded in the current
year.
In the current year there continues to be pressure on payroll
costs further to the increase in the National Living Wage and other
associated changes. This will increase employee costs by circa
GBP0.8 million in the year. In addition, the Group has recently
renewed its utility contracts, which had been fixed two years
previously. Given the changes in the utility market since that date
there will an increase of GBP0.6 million in costs per annum.
Distribution costs increased 16% to GBP12.5 million (2022:
GBP10.8 million) and is reflective of the higher revenues generated
in the period.
Included in distribution costs are commission payments to third
parties which sell product on behalf of QUIZ. These increased as a
result of the higher revenues generated through concessions and
International franchise partners.
Also reflected in the increase in distribution costs are higher
carriage costs to stores, concessions and franchises as well as to
online customers further to the increased revenues generated and
inflationary increases incurred during the year.
Other operating income
Other operating income of GBP0.2 million (2022:GBP1.0 million)
was generated in the period. The current year income arose from the
disposal of inventory which was no longer appropriate for sale
through our existing revenue channels. The prior year income
comprised GBP0.6 million from the utilisation of the Government's
Coronavirus Job Retention Scheme and GBP0.4 million of payments
received in relation to coronavirus grants made available to retail
businesses which were closed due to national or local
restrictions.
Finance costs
The finance cost of GBP0.2 million (2022: GBP0.1 million)
primarily relates to interest costs arising on the lease payments
for stores in accordance with IFRS 16.
Taxation
In the current year the Group recorded an income tax charge of
GBP0.3 million (2022: income tax credit of GBP1.3 million) which
represents a reported tax rate of a charge of 11.3% (2022: tax
credit rate of 160.0%).
As at 31 March 2023 the deferred tax asset amounted to GBP1.0
million (2022: GBP1.0 million). This balance reflects the
anticipated future cash benefit expected to be derived from
utilising previously generated tax losses and available capital
allowances in excess of the recorded net book value.
The remaining unrecognised deferred tax asset at 31 March 2023
amounts to GBP0.5 million (2022: GBP0.4 million).
Earnings per share
Basic earnings per share for 2023 was 1.64 pence per share
(2022: 1.65 pence).
Dividends
No dividend was paid during the year (2022: GBPNil). Given the
level of operating profits generated in the current year the Board
does not recommend the payment of a final dividend.
Cash flow and cash position
Cash, net of bank borrowings, at the year-end amounted to GBP6.2
million (2022: GBP4.4 million).
Net cash flow from operating activities resulted in an inflow of
GBP5.9 million (2022: inflow of GBP5.3 million). Reflected in this
inflow of cash is a GBP0.9 million working capital outflow (2022:
inflow of GBP0.2 million). The outflow arose further to the
increased revenues year-on-year giving rise to increased inventory
and receivables balances which was partially offset by higher trade
payables.
Spend on intangible assets and property, plant and equipment
amounted to GBP0.5 million and GBP2.0 million respectively (2022:
GBP0.2 million and GBP0.3 million).
Included in property, plant and equipment was investment in new
or relocating stores amounting to GBP1.5 million in year, arising
from three new stores and two relocations during the year and spend
on two stores opened shortly after the year end. In addition, two
new stores opened shortly after the year end.
Loans, being amounts drawn down on the Group's working capital
facility which are repayable in less than one year, at 31 March
2023 of GBP1.4 million was consistent with the previous year.
The payment of lease liabilities amounted to GBP1.8 million
(2022: GBP1.9 million) reflecting lease charges and the increased
period of trading for the relevant stores in the past year. Given a
number of new leases were entered into during the year the amounts
outstanding in relation to lease liabilities increased to GBP6.9
million (2022: GBP1.1 million).
Foreign currency hedging
The Group currently undertakes foreign exchange
transactions.
The primary outflow of foreign exchange relates to the purchase
of stock, primarily in Chinese Renminbi. The primary inflow of
foreign exchange relates to Euro denominated revenues generated in
Ireland.
The Group manages the risk associated with foreign currency
fluctuations through the use of forward contracts for the sale or
the purchase of the respective currency for a period between six
and twelve months in advance. We have currently hedged our expected
currency outflows in respect of Chinese Renminbi for the remainder
of the financial year to 31 March 2024.
QUIZ plc
Consolidated statement of comprehensive income
Year ended 31 March 2023
2023 2022
Notes GBP000 GBP000
----------------------------------------- ----- -------- --------
Continuing operations
Revenue 2 91,680 78,371
Cost of sales (35,166) (31,074)
----------------------------------------- ----- -------- --------
Gross profit 56,514 47,297
----------------------------------------- ----- -------- --------
Administrative costs (41,728) (36,578)
Distribution costs (12,544) (10,820)
Government grants 3 - 1,010
Other operating income 214 1
----------------------------------------- ----- -------- --------
Total operating costs (54,058) (46,387)
----------------------------------------- ----- -------- --------
Operating profit 5 2,456 910
Finance income 6 89 -
Finance costs 6 (248) (122)
Profit before income tax 2,297 788
Income tax (charge)/credit 7 (260) 1,261
----------------------------------------- ----- -------- --------
Profit for the year 2,037 2,049
----------------------------------------- ----- -------- --------
Other comprehensive income:
Foreign currency translation differences
- foreign operations 138 (20)
----------------------------------------- ----- -------- --------
Profit and total comprehensive income
for the year attributable to owners
of the parent 2,175 2,029
----------------------------------------- ----- -------- --------
Profit per share:
Basic and diluted earnings per share 8 1.64p 1.65p
----------------------------------------- ----- -------- --------
All of the above income is attributable to the shareholders of
the Company.
QUIZ plc
Consolidated statement of financial position
As at 31 March 2023
31 March 31 March
2023 2022
Notes GBP000 GBP000
--------------------------------- ----- -------- --------
Assets
Non-current assets
Property, plant and equipment 10 4,688 3,985
Right of use assets 11 6,523 1,108
Intangible assets 12 2,703 2,782
Deferred tax assets 18 957 964
Total non-current assets 14,871 8,839
--------------------------------- ----- -------- --------
Current assets
Inventories 13 12,322 11,710
Trade and other receivables 14 7,429 6,425
Cash and cash equivalents 22 7,575 5,840
--------------------------------- ----- -------- --------
Total current assets 27,326 23,975
--------------------------------- ----- -------- --------
Total assets 42,197 32,814
--------------------------------- ----- -------- --------
Liabilities
Current liabilities
Trade and other payables 15 (12,602) (11,466)
Loans and borrowings 16 (1,410) (1,420)
Lease liabilities 11 (1,909) (954)
Derivative financial liabilities 17 (65) (65)
Corporation tax payable (291) -
Total current liabilities (16,277) (13,905)
--------------------------------- ----- -------- --------
Non-current liabilities
Lease liabilities 11 (4,967) (185)
Deferred tax liabilities 18 (20) (21)
--------------------------------- ----- -------- --------
Total non-current liabilities (4,987) (206)
--------------------------------- ----- -------- --------
Total liabilities (21,264) (14,111)
--------------------------------- ----- -------- --------
Net assets 20,933 18,703
--------------------------------- ----- -------- --------
Equity
Called-up share capital 20 373 373
Share premium 20 10,315 10,315
Merger reserve 20 1,130 1,130
Retained earnings 20 9,115 6,885
--------------------------------- ----- -------- --------
Total equity 20,933 18,703
--------------------------------- ----- -------- --------
QUIZ plc
Consolidated statement of changes in equity
Year ended 31 March 2023
Share Share Merger Retained
capital premium reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 April 2021 373 10,315 1,130 4,804 16,622
Profit and total comprehensive
income for the year - - - 2,029 2,029
Share-based payments charge - - - 52 52
At 31 March 2022 373 10,315 1,130 6,885 18,703
Profit and total comprehensive
income for the year - - - 2,175 2,175
Share-based payments charge - - - 55 55
At 31 March 2023 373 10,315 1,130 9,115 20,933
------------------------------- -------- -------- -------- --------- -------
QUIZ plc
Consolidated cash flow statement
Year ended 31 March 2023
Year ended Year ended
31 March 31 March
2023 2022
Notes GBP000 GBP000
--------------------------------------------- ----- ---------- ----------
Cash flows from operating activities
Cash generated by operations
Profit after tax for the year 2,037 2,049
Adjusted for:
Depreciation of property, plant and
equipment 1,263 1,522
Depreciation of right-of-use assets 1,898 1,873
Amortisation of intangible assets 589 832
Share-based payment charges 55 52
Exchange movement 126 (20)
Finance income (89) -
Finance cost expense 248 122
Income tax charge/(credit) 260 (1,261)
Increase in inventories (612) (623)
Increase in receivables (1,384) (2,454)
Increase in payables 1,136 3,308
Net cash generated from operating activities 5,527 5,400
Interest paid (18) (40)
Income taxes refunded/(paid) 417 (62)
--------------------------------------------- ----- ---------- ----------
Net cash inflow from operating activities 5,926 5,298
--------------------------------------------- ----- ---------- ----------
Cash flows from investing activities
Payments to acquire intangible assets (510) (200)
Payments to acquire property, plant
and equipment (1,965) (290)
Interest received 89 -
--------------------------------------------- ----- ---------- ----------
Net cash outflow from investing activities (2,386) (490)
--------------------------------------------- ----- ---------- ----------
Cash flows from financing activities
Loans (repaid)/received (10) 14
Payment of lease liabilities (1,807) (1,908)
Net cash outflow from financing activities 21 (1,817) (1,894)
--------------------------------------------- ----- ---------- ----------
Net increase in cash and cash equivalents 1,723 2,914
Cash and cash equivalents at beginning
of year 5,840 2,927
Effect of foreign exchange rates 12 (1)
--------------------------------------------- ----- ---------- ----------
Cash and cash equivalents at end of
year 22 7,575 5,840
--------------------------------------------- ----- ---------- ----------
The Group considers overdrafts to be an integral part of its
cash management activities and these are included in cash and cash
equivalence for the purposes of the cash flow statement.
Selected notes to the Group financial statements
Year ended 31 March 2023
1 Significant accounting policies
General information
Quiz Plc (the 'parent company') is a public limited company,
incorporated and domiciled in Jersey. It is listed on AIM. The
registered office of the Company is 22 Grenville Street, St Helier,
Jersey, Channel Islands E4 8PX. The principal activity of the group
is that of retailing clothes.
Basis of preparation
The Board of Directors approved this preliminary announcement on
4 July 2023. Whilst the financial information included in the
preliminary announcement has been prepared in accordance with the
recognition and measurement criteria of UK-adopted International
Accounting Standards and the Companies (Jersey) Law 1991, this
announcement does not itself contain sufficient information to
comply with all the disclosure requirements of UK-adopted
International Accounting Standards and does not constitute
statutory accounts within the meaning of Companies (Jersey) Law
1991 but is derived from the accounts of the Company for the years
ended 31 March 2023 and 2022. The financial information is prepared
on the same basis as set out in the statutory accounts for the year
ended 31 March 2022.
The financial statements are presented in Pounds Sterling
because that is the currency of the primary economic environment in
which the Group operates. Monetary amounts in these financial
statements are rounded to the nearest thousand. Foreign operations
are included in accordance with the policies set out below.
The annual financial statements have been prepared on the
historical cost basis, except for certain financial assets and
liabilities which are carried at fair value.
The preparation of financial statements in conformity with
UK-adopted International Accounting Standards requires the use of
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reported year.
Although these estimates are based on management's best knowledge
of current events and actions, actual results ultimately may differ
from those estimates.
The statutory accounts for the year ended 31 March 2022 have
been filed with the Jersey Companies Registry and the statutory
accounts for the year ended 31 March 2023 will be filed in due
course. The auditors have reported on the accounts for the years
ended 31 March 2023 and 2022; their reports were unqualified, did
not include any matters to which the auditor drew attention by way
of emphasis and under 113B (3) or 113B (4) of the Companies
(Jersey) Law 1991 .
Accounting standards in issue but not yet effective
At the date of issue of these financial statements, there are
several standards and interpretations issued by the IASB that are
effective for financial statements after this reporting period. Of
these new standards, amendments and interpretations, there are none
which are expected to have a material impact on the Group's
consolidated financial statements.
Going concern
The Directors have prepared a detailed forecast with a
supporting business plan for the foreseeable future to determine
whether the Group will have adequate resources to enable it to
operate as a going concern for the foreseeable future.
When preparing this forecast, the Directors considered the
current trading levels, which have been consistent with
management's expectation, and the outlook for the Group against
their detailed base case scenario and further downside
scenarios.
At 31 March 2023, the Group had cash net of bank borrowings of
GBP6.2 million, being a GBP7.6 million cash balance offset by a
GBP1.4 million bank loan , and GBP2.1 million of unutilised banking
facilities (2022: GBP4.4 million of net cash and GBP2.1 million of
unutilised banking facilities).
Borrowing facilities
As at 4 July 2022, the Group has GBP4.0 million of banking
facilities, which were recently extended until 30 June 2024. These
facilities comprise a GBP2.0 million overdraft and GBP2.0 million
working capital facility. There are no financial covenants
associated with these facilities, which are reviewed annually.
Whilst the facilities are repayable on demand the Directors believe
that these facilities will be available to the Group through to 30
June 2024 and will be renewed in due course.
The Group had a net cash balance of GBP3.4 million at 4 July
2023, being a GBP3.7 million cash balance offset by a GBP0.3
million bank loan and GBP3.7 million of unutilised banking
facilities.
Forecast scenarios
The Directors have reviewed management's business plan forecast
for the twelve months from the date when these financial statements
are authorised to be issued. The forecasts have been produced on
the following basis:
-- Given the strong demand at the start of the previous year the
base case scenario assumes stores and concessions sales are lower
on a like-for-like basis in the four months to July 2024.
Thereafter sales forecast to be a similar or slightly higher levels
on a like-for-like basis. Web sales through the QUIZ website are
assumed to be at a level similar to those generated in the previous
year. The assumed sales levels are broadly consistent with those
currently achieved.
-- Downside scenario assumes reduced sales across the next year
to reflect reduced demand including assumed reductions in store and
concessions sales of 10% on a like-for-like basis. Online sales are
assumed to be 10% below their base case scenario.
Within each forecast, management have reflected outstanding
financial commitments and the impact of previously realised cost
savings. There are no further anticipated savings incorporated in
response to any downside scenario for reduced revenues. Further
actions could be undertaken to mitigate against any shortfalls
arising from these scenarios. These include reducing operating
costs and capital expenditure, ceasing or suspending loss-making
activities and optimising working capital.
The Base Case and Downside scenario forecasts indicate the Group
will remain within its available borrowing facilities through the
forthcoming twelve month period. Under the downside scenario the
Group has more than GBP5.0 million available liquidity headroom
through-out the period under consideration.
Going concern basis
Based on the assessment outlined above, the Directors have a
reasonable expectation that the Group has access to adequate
resources to enable it to continue to operate as a going concern
for the foreseeable future, being a period of at least twelve
months from the date when these financial statements are authorised
to be issued. For these reasons, the Directors consider it
appropriate for the Group to continue to adopt the going concern
basis of accounting in preparing the Annual Report and financial
statements. Accordingly, the financial statements of the Group have
been prepared on a going concern basis in accordance with
UK-adopted International Accounting Standards and the Companies
(Jersey) Law 1991.
2 Revenue
A n analysis of revenue by geographical destination is as
follows:
2023 2022
GBP000 GBP000
-------------------------- ------ ------
Online 29,872 26,742
International 16,357 14,862
UK stores and concessions 45,451 36,767
-------------------------- ------ ------
91,680 78,371
-------------------------- ------ ------
2023 2022
GBP000 GBP000
------------------ ------ ------
United Kingdom 75,077 63,176
Rest of the world 16,603 15,195
------------------ ------ ------
91,680 78,371
------------------ ------ ------
As at 31 March 2023 non-current assets in the United Kingdom
were GBP14,459,000 (FY 2022: GBP8,616,000) with GBP412,000 (FY
2022: GBP223,000) located in the rest of the world.
3 Government grants
2023 2022
GBP000 GBP000
--------------------------------------- ------ ------
Government support - furlough payments - 640
Government support - grant income - 370
--------------------------------------- ------ ------
- 1,010
--------------------------------------- ------ ------
4 Employee benefit expenses
Employment costs and average monthly number of employees
(including Directors) during the year were as follows:
2023 2022
GBP000 GBP000
---------------------------- ------ ------
Wages and salaries 14,970 14,420
Social security costs 1,142 1,023
Other pension costs 257 302
Agency costs 2,857 2,065
Share-based payment charges 55 52
---------------------------- ------ ------
19,281 17,862
---------------------------- ------ ------
No. No.
--------------- --- ---
Retail 727 689
Distribution 98 97
Administration 150 136
--------------- --- ---
975 922
--------------- --- ---
Included above is GBP697,000 in respect of Directors'
remuneration (FY 2022: GBP679,000).
5 Operating profit
Operating profit is stated after charging/(crediting):
2023 2022
GBP000 GBP000
---------------------------------------------- ------ -------
Cost of inventories recognised as an expense 35,166 31,074
Distribution costs 12,544 10,820
Employment costs 19,236 17,810
Share based payments charges 55 52
Depreciation of property, plant and equipment 1,263 1,522
Depreciation of right-of-use assets 1,898 1,873
Amortisation of intangible assets 589 832
Short-term and variable lease costs 2,257 2,105
Foreign exchange losses/(gains) 86 (53)
Government grants - (1,010)
Other operating income (214) (1)
Other expenses 16,355 12,441
---------------------------------------------- ------ -------
6 Finance income and expense
2023 2022
GBP000 GBP000
-------------------------- ------ ------
Interest on cash deposits 89 -
Finance income 89 -
-------------------------- ------ ------
2023 2022
GBP000 GBP000
--------------------------------- ------ ------
Interest on lease liabilities 231 82
Interest on loans and overdrafts 17 40
Finance expense 248 122
--------------------------------- ------ ------
7 Income tax
2023 2022
GBP000 GBP000
------------------------------------------------------- ------ -------
UK corporation tax - current year 393 -
UK corporation tax - prior year (53) (244)
Foreign tax 19 -
Deferred tax - current year 104 (1,088)
Deferred tax - prior year (203) 71
------------------------------------------------------- ------ -------
Tax on profit 260 (1,261)
------------------------------------------------------- ------ -------
Reconciliation of effective tax rate
Profit on ordinary activities before taxation 2,297 788
------------------------------------------------------- ------ -------
Profit on ordinary activities multiplied by
standard rate of UK corporation tax of 19% 436 150
Expenses not deductible for tax purposes 43 42
Change in unrecognised deferred tax assets 32 (964)
Impact of overseas tax rate (18) (2)
Impact on deferred tax of increase in UK corporation
tax rate - 13
Utilisation in current year of previously unrecognised
deferred tax asset - (327)
Write down of previously recognised deferred
tax asset 23 -
Adjustments to previous years (256) (173)
260 (1,261)
------------------------------------------------------- ------ -------
8 Earnings per share
2023 2022
Number of shares: No. No.
----------------------------------- ------------- -------------
Weighted number of ordinary shares
outstanding - basic and diluted 124,230,905 124,230,905
----------------------------------- ------------- -------------
Earnings: GBP000 GBP000
---------- ------ ------
Profit 2,037 2,049
---------- ------ ------
Earnings per share: Pence Pence
------------------------- ----- -----
Basic earnings per share 1.64 1.65
------------------------- ----- -----
The diluted earnings per share is the same as the basic earnings
per share each year as the average share price during the year was
less than the prices applicable to the outstanding options and
therefore the outstanding options were not dilutive.
9 Dividends
No dividends in respect of 2023 are proposed (FY 2022:
GBPNil).
10 Property, plant and equipment
Fixtures,
fittings
Leasehold Motor Computer and
improvements vehicles equipment equipment Total
GBP000 GBP000 GBP000 GBP000 GBP000
----------------- ------------- --------- ---------- ---------- -------
Cost
At 1 April 2022 601 133 1,583 14,799 17,116
Additions 199 18 133 1,616 1,966
Disposals (8) (14) (18) (593) (633)
----------------- ------------- --------- ---------- ---------- -------
At 31 March 2023 792 137 1,698 15,822 18,449
----------------- ------------- --------- ---------- ---------- -------
Depreciation
At 1 April 2022 416 91 967 11,657 13,131
Charge 165 22 201 875 1,263
Disposals (8) (14) (18) (593) (633)
----------------- ------------- --------- ---------- ---------- -------
At 31 March 2023 573 99 1,150 11,939 13,761
----------------- ------------- --------- ---------- ---------- -------
Net book value
At 31 March 2023 219 38 548 3,883 4,688
----------------- ------------- --------- ---------- ---------- -------
At 31 March 2022 185 42 616 3,142 3,985
----------------- ------------- --------- ---------- ---------- -------
11 Right to use assets and lease liabilities
Property
GBP000
----------------- --------
Cost
At 1 April 2022 3,872
Additions 7,313
Disposals (2,297)
At 31 March 2023 8,888
-------------------- --------
Amortisation
At 1 April 2022 2,764
Charge 1,898
Disposals (2,297)
At 31 March 2023 2,365
-------------------- --------
Net book value
At 31 March 2023 6,523
-------------------- --------
At 31 March 2022 1,108
-------------------- --------
The Group presents lease liabilities separately within the
statement of financial position. The movement in the year
comprised:
2023 2022
GBP000 GBP000
---------------------------------------------------- ------- -------
At 1 April 2022 1,139 2,965
Additions 7,313 -
Interest expense related to lease liabilities 231 82
Repayment of lease liabilities (including interest) (1,807) (1,908)
At 31 March 2023 6,876 1,139
---------------------------------------------------- ------- -------
Current lease liabilities 1,909 954
Non-current lease liabilities 4,967 185
---------------------------------------------------- ------- -------
The above leases relate to the use of the Group's Head Office,
Distribution Centre and a number of its retail stores. Lease
arrangements in respect of retail stores are a mix of leases with
fixed rents which are reflected in the right-of -use assets and the
associated lease liabilities and leases where charges are related
to the revenues generated in the relevant retail stores. Costs in
the year in respect of facilities in the year with fixed rentals
amounted to GBP2,129.000 (2022: GBP1,955,000) and GBP2,257,000 in
respect of leases with charges related to the revenue generated
within that store (2022: GBP2,105,000).
Short-term operating leases
At the balance sheet date, the Group had outstanding commitments
for future minimum lease payments under non-cancellable leases
which fall due as follows:
2023 2022
GBP000 GBP000
---------------- ------ ------
Within one year 85 109
---------------- ------ ------
12 Intangibles
Computer
Goodwill software Trademarks Total
GBP000 GBP000 GBP000 GBP000
----------------- -------- --------- ---------- ------
Cost
At 1 April 2022 6,175 3,827 165 10,167
Additions - 510 - 510
At 31 March 2023 6,175 4,337 165 10,677
----------------- -------- --------- ---------- ------
Amortisation
At 1 April 2022 5,248 2,060 77 7,385
Charge - 572 17 589
At 31 March 2023 5,248 2,632 94 7,974
----------------- -------- --------- ---------- ------
Net book value
At 31 March 2023 927 1,705 71 2,703
----------------- -------- --------- ---------- ------
At 31 March 2022 927 1,767 88 2,782
----------------- -------- --------- ---------- ------
The goodwill primarily arose when Shoar (Holdings) Limited
acquired the entire share capital of Tarak Retail Limited in 2012
and reflects the difference between the fair value of the
consideration transferred and the fair value of assets and
liabilities purchased. Goodwill is assessed for impairment by
comparing the carrying value to value-in-use calculations. Value in
use has been estimated using cash flow projections based on
detailed budgets and forecasts over the period of three years, with
a decline rate of 15% (FY 2022: 10%) and a pre-tax discount rate of
10% (FY 2022: 10%) applied, being the Directors' estimate of the
Group's cost of capital, with no terminal value. The budgets and
forecasts are based on historical data and the past experience of
the Directors as well as the future plans of the business. No
reasonable change in any of the assumptions would result in an
impairment charge and therefore no sensitivity analysis is
disclosed. The Directors do not consider goodwill to be impaired in
the current year.
13 Inventories
2023 2022
GBP000 GBP000
------------------------------------ ------ ------
Finished goods and goods for resale 12,322 11,710
------------------------------------ ------ ------
The cost of inventories recognised as an expense during the year
in respect of continuing operations amounted to GBP35,166,000
(2022: GBP31,074,000). The cost of inventories included a net
credit in respect of write-downs of inventory to net realisable
value of GBP875,000 (2022: credit of GBP1,138,000). Inventories are
stated after provisions for impairment of GBP1,675,000 (2022:
GBP2,550,000).
14 Trade and other receivables
2023 2022
GBP000 GBP000
------------------------------------------------------ ------ ------
Trade receivables - gross 3,292 3,948
Less allowance for expected credit losses (calculated
under IFRS 9) (333) (327)
------------------------------------------------------ ------ ------
Trade receivables - net 2,959 3,621
Other receivables 2,113 422
Current tax receivable - 380
Prepayments and accrued income 2,357 2,002
7,429 6,425
------------------------------------------------------ ------ ------
The Directors consider that the fair value of trade and other
receivables is not materially different from the carrying
value.
15 Trade and other payables
2023 2022
GBP000 GBP000
-------------------------------------- ------ ------
Trade payables 7,116 5,155
Other taxes and social security costs 1,610 979
Accruals 2,585 3,733
Other payables 1,291 1,591
Amounts due to related parties - 8
-------------------------------------- ------ ------
12,602 11,466
-------------------------------------- ------ ------
Trade payables and accruals principally comprise amounts
outstanding for trade purchases and ongoing costs. The Directors
consider that the fair value of trade and other payables is not
materially different from the carrying value.
Included within other payables at the year-end date was a
balance of GBP59,000 (FY 2022: GBP52,000) owed to the Group's
pension scheme.
16 Loans and borrowings
2023 2022
GBP000 GBP000
----------- ------ ------
Bank loans 1,410 1,420
Current 1,410 1,420
----------- ------ ------
The Group's overdraft and other credit facilities amount to
GBP4.0 million (2022: GBP3.5 million) and are secured by an
unlimited multilateral and cross-company guarantee given by Zandra
Retail Limited and Tarak International Limited and also by a
limited guarantee given by, and by a floating charge over the
assets of, Zandra Retail Limited and Tarak International Limited.
The bank also holds a right of set-offs between Zandra Retail
Limited and Tarak International Limited. All entities included in
the guarantee are wholly owned subsidiaries in the Group. In
addition, the Company has provided a parent company guarantee with
respect to the facilities.
In addition, credit facilities are secured by a bond and
floating charge from Tarak Retail Limited over the whole of its
property and undertakings.
The bank overdraft and other credit facilities are annual
facilities and are repayable on demand. These facilities were
renewed after the year end and are next subject to review in June
2024.
Borrowings are denominated and repaid in Pounds Sterling, have
contractual interest rates that are either fixed rates or variable
rates linked to the Bank of England base rate that are not
leveraged, and do not contain conditional returns or repayment
provisions other than to protect the lender against credit
deterioration or changes in relevant legislation or taxation.
17 Derivative financial instruments
The following is an analysis of the derivative financial
instruments liability:
2023 2022
GBP000 GBP000
------------------------- ------ ------
Foreign currency options 65 65
------------------------- ------ ------
Forward foreign exchange contracts are used to hedge exposure to
fluctuations in foreign exchange rates that arise in the normal
course of the Group's business.
As at 31 March 2023, the Group had commitments to buy the
equivalent of GBP3,050,000 of Chinese Renminbi (FY 2022:
GBP5,200,000).
18 Deferred tax
The following is an analysis of the deferred tax assets:
Fixed
asset
timing
Tax Losses differences Total
GBP000 GBP000 GBP000
---------------------------------------- ---------- ------------ ------
Balance brought forward 634 330 964
Credit to income statement (65) 58 (7)
Total deferred tax asset at end of year 569 388 957
---------------------------------------- ---------- ------------ ------
At 31 March 2023 there was a total of unprovided deferred tax
assets of GBP471,000 (2022 - GBP413,000) in relation to fixed asset
timing differences.
The following is an analysis of the deferred tax
liabilities:
Fixed
asset
timing
differences
GBP000
---------------------------------------- ------------
Balance brought forward 21
Credit to income statement (1)
Total deferred tax asset at end of year 20
------------------------------------------ ------------
19 Financial instruments
The following table shows the carrying amounts and fair values
of financial assets and liabilities, other than derivatives. All
financial liabilities are measured at amortised cost. The
derivative liability, which is measured at fair value, is level 2
in the fair value hierarchy.
2023 2022
GBP000 GBP000
----------------------------------------- -------- --------
Category of financial instruments
Carrying value of financial assets:
Cash and cash equivalents 7,575 5,840
Trade and other receivables 5,072 4,423
----------------------------------------- -------- --------
Total financial assets 12,647 10,263
----------------------------------------- -------- --------
Carrying value of financial liabilities:
Trade and other payables (10,992) (10,479)
Bank and other borrowings (1,410) (1,420)
Derivative financial instruments (65) (65)
Lease liabilities (6,876) (1,139)
----------------------------------------- -------- --------
Total financial liabilities (19,343) (13,103)
----------------------------------------- -------- --------
The fair value and carrying value of financial instruments have
been assessed and there is deemed to be no material differences
between fair value and carrying value.
The cash and cash equivalents are held with bank and financial
institution counterparties, which are rated P-1 and A-1, based on
Moody's ratings.
20 Share capital and reserves
2023 2022
GBP000 GBP000
---------------------------------------------- ------ ------
Share capital - allotted, called up and fully
paid
124,230,905 ordinary shares of 0.3 pence each
(31 March 2022: 124,230,905) 373 373
---------------------------------------------- ------ ------
Share premium 10,315 10,315
---------------------------------------------- ------ ------
Share capital
The issued share capital at 31 March 2023 comprised 124,230,905
ordinary shares of 0.3 pence each with a nominal value of
GBP372,693. The company has one class of ordinary share which have
equal right, preferences and restrictions.
Share premium
The share premium reserve contains the premium arising on the
issue of equity shares, net of issue expenses incurred by the
Company. The 6,583,851 ordinary shares of 0.3 pence each with a
nominal value of GBP19,752 on 28 July 2017 were issued at a price
of 161 pence per share giving rise to a share premium of
GBP10,315,248 (net of expenses).
Merger reserve
The merger reserve arose on the purchase of certain
subsidiaries. The merger reserve represents the difference between
the cost value of the shares acquired less the cost value of the
shares issued for the purchase of each company and the stamp duty
payable in respect of these transactions.
Retained earnings
The movement on retained earnings is as set out in the statement
of changes in equity. Retained earnings represent cumulative
profits or losses, net of dividends and other adjustments.
21 Change in liabilities arising from financing activities
Cash Non-cash
2022 flow changes 2023
GBP000 GBP000 GBP000 GBP000
------------------------------------- ------- ------ -------- -------
Cash at bank and in hand 5,840 1,723 12 7,575
------------------------------------- ------- ------ -------- -------
Net cash per statement of cash flows 5,840 1,723 12 7,575
Borrowings (1,420) 10 - (1,410)
------------------------------------- ------- ------ -------- -------
Net cash before lease liabilities 4,420 1,733 12 6,165
Lease liabilities (1,139) 1,807 (7,544) (6,876)
------------------------------------- ------- ------ -------- -------
Net debt after lease liabilities 3,281 3,540 (7,532) (711)
------------------------------------- ------- ------ -------- -------
Non-cash changes relate to the translation of foreign currency
balances at the end of the period and lease acquisitions, disposals
and modifications.
22 Cash and cash equivalents
2023 2022
GBP000 GBP000
----------------------------- ------ ------
Cash at bank and in hand 7,575 5,840
Net cash at bank and in hand 7,575 5,840
----------------------------- ------ ------
23 Financial commitments
Capital commitments
The Group had GBP1.9 million of capital commitments of at 31
March 2023 (FY 2022: Nil) which were not provided for in the
financial statements.
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END
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