24 January 2025
TheWorks.co.uk
plc
("The
Works", the "Company" or the "Group")
Interim results, Christmas
trading update and new strategy
Delivered significant
improvement in H1 FY25 profitability. Maintaining full year
guidance. Announcing new strategy to elevate The Works over the
next five years.
TheWorks.co.uk plc, the
family-friendly value retailer of arts, crafts, toys, books and
stationery, announces its interim results for the 26 weeks ended 3
November 2024 (the "period" or "H1 FY25"), an update on current
trading for the 11 weeks ended 19 January 2025 and a new
strategy.
Summary
·
|
H1 FY25 total revenue growth of
1.3% to £124.2m (H1 FY24: £122.6m) and total LFL (1)
sales decline of 0.8%, which was in line with expectations and
ahead of the wider non-food retail sector.(2)
|
|
o
|
Store LFL sales (over 90% of total
sales) grew by 0.9%, driven by improved seasonal ranges and fiction
book sales.
|
|
o
|
Online sales declined by 14.7%,
impacted by a planned reduction in promotional activity and reduced
capacity stemming from challenges at our third-party online
fulfilment centre towards the end of the period.
|
·
|
Pre-IFRS 16 Adjusted EBITDA loss
of £2.8m (H1 FY24: £8.5m loss) and adjusted loss before tax
(3) of £6.5m (H1 FY24: Restated (4) £10.4m
loss). (5) Significant year-on-year improvement driven
by:
|
|
o
|
Action taken to grow product
margins, up +220bps compared to H1 FY24.
|
|
o
|
Cost saving action over the last
12 months delivering tangible results.
|
·
|
The Group ended the Period with
net debt (6) of £8.5m (H1 FY24: net debt £2.5m),
reflecting higher levels of stock on water and the adverse impact
of the different Period end date. (7)
|
·
|
Current trading
for the 11 weeks ended 19 January 2025 is
in line with expectations:
|
|
o
|
Resilient store performance, with
LFL sales up 1%, supported by significant operational improvements
across stores and in our retail Distribution Centre. Online sales
declined by 14.9% YOY.
|
|
o
|
Strong end to Christmas trading
continued into January.
|
·
|
Ongoing product margin growth and
cost-saving action expected to deliver further benefits in
remainder of this financial year and FY26, helping to offset
significant cost headwinds.
|
·
|
On track to meet market
expectations of pre-IFRS16 Adjusted EBITDA of £8.5m for FY25
and further profit growth in
FY26.
|
·
|
New strategy announced - expect to
transform the business and deliver sales in excess of £375m and an
EBITDA margin of at least 6% within five years.
|
H1
FY25 financial highlights
|
H1 FY25
£m
|
H1 FY24
Restated (4)
£m
|
Revenue
|
£124.2m
|
£122.6m
|
Revenue growth %
|
1.3%
|
3.1%
|
Total LFL sales
(1)
|
(0.8)%
|
1.6%
|
Pre-IFRS 16 Adjusted EBITDA
(3)
|
(£2.8m)
|
(£8.5m)
|
Loss before tax
|
(£6.9m)
|
(£16.5m)
|
Adjusted loss before tax
(3)
|
(£6.5m)
|
(£10.4m)
|
Adjusted Basic loss per
share
|
(9.4p)
|
(12.6p)
|
Net debt (6)
|
(£8.5m)
|
(£2.5m)
|
H1 FY25 strategic progress
Significant progress delivered in
H1, with more targeted for H2:
·
|
Completed project to define brand
positioning more clearly, which is now reflected in our external
marketing and includes rollout of new #TimeWellSpent
strapline.
|
·
|
Continued optimisation of store
portfolio with three new openings, two relocations and eight
closures. Operated from 506 stores at period end, of which 98% are
trading profitably.
|
·
|
Significant product margin growth
as a result of negotiations with suppliers, conscious control of
mix and reduced promotional activity.
|
·
|
Reduced cost base through improved
ways of working at our retail Distribution Centre, which supported
delivery of targeted annualised saving of at least £1m.
Action taken in FY24 delivered
further efficiencies in H1
FY25, including the removal of the
customer loyalty scheme, restructuring of the Operating Board,
implementation of a new store labour model and additional rent
savings secured through negotiations with
landlords.
|
New strategy
Having strengthened the Board in
H1 we revisited our longer-term goals to ensure The Works has the
right strategy to succeed over the long term and become the
favourite destination for affordable, screen free activities for
the whole family. We have now developed this strategy, 'Elevating
The Works', which provides a clear plan to achieve those goals and
drive a significant improvement in performance and shareholder
returns. This strategy is underpinned by three strategic
drivers:
·
|
Growing Brand Fame
|
·
|
Improving Customer
Convenience
|
·
|
Being a Lean and Efficient
Operator
|
We are confident that delivery of
this strategy will have a transformative
impact on the business and will enable us to deliver
sales in excess of £375m and an EBITDA margin of
at least 6% within five years.
Trading update
In the 11 weeks ended 19 January
2025, total LFL sales declined by 0.9%. The performance of our
store estate, accounting for over 90% of sales, was resilient over
the festive period, delivering LFL sales up 1.0%. We delivered a
much-improved Christmas operationally across our stores, both store
standards and customer service, and in our retail Distribution
Centre. We saw particularly strong growth in Adult Fiction Books
and good growth in our Christmas Accessories and Stationery
ranges.
In contrast, our
online performance was constrained over the
festive period. Our third-party operated online fulfilment
centre faced challenges
fulfilling volumes during peak, which affected capacity and caused
disruption for customers. We took timely and decisive action to
control customer demand and protect profitability, however these
unforeseen issues resulted in online LFLs declining 14.9%, which
pulled our total LFL sales lower and created an additional circa
£1m in exceptional fulfilment costs. We are currently investigating
remedial actions and are considering our options for the future of
our online offering and fulfilment.
Consumers remained cost-conscious,
which resulted in high levels of promotional activity across the
market in November and December. Whilst still providing customers
with excellent value, we limited our promotional activity and
maximised full-price sales in the run up to Christmas, helping to
deliver a 190bps margin improvement year-on-year over the 11-week
period.
Outlook
We saw a strong end to Christmas
trading in December, which continued into January, and the online
capacity issues experienced during peak trading have subsided. Our
cash position also improved following Christmas, with £14.7m of
cash as of 19 January 2025 and we expect to end the financial year
with net cash of approximately £4m.
Consumer confidence is expected to
remain fragile, however we are excited about the potential of new
ranges landing in the Spring and expect to deliver
modest sales growth for the remainder of the
financial year.
We remain mindful of significant
cost headwinds, including a circa £6.5m
impact in FY26 due to the rise in National Living and Minimum Wages
and changes to employers' National Insurance contributions.
We will mitigate this through ongoing action to
reduce costs and grow margins, including carefully targeted price
increases. As a result, we are on track to
deliver FY25 profits in line with compiled market forecasts
(Pre-IFRS16 Adjusted EBITDA of £8.5m) and further profit
growth in FY26.
With a new strategy in place and
progress already underway, we are optimistic that we can deliver a
significant improvement in performance and shareholder returns in
the medium term.
Gavin Peck, Chief Executive Officer of The Works,
commented:
"We started the financial year
with a clear focus on reducing our cost base and growing margins in
order to offset ongoing cost headwinds. We successfully delivered
on these objectives in the first half of FY25 and are pleased to
report a significant improvement in profitability
year-on-year.
"We faced persistently difficult
market conditions this Christmas but did not let this dampen our
enthusiasm, instead focusing on the factors within our control. We
delivered a resilient store performance and saw strong customer
demand for our festive ranges, with our giant The Grinch soft toy standing out as a
Christmas bestseller.
"Looking ahead, we are mindful of
the need to navigate fragile consumer confidence and significant
cost headwinds but believe there is much to be optimistic about at
The Works. We expect that our action to grow revenue, increase
margins and reduce costs will deliver improved results in the
remainder of this financial year and in FY26. We have laid the
foundations for our new strategy, which will transform the business
and deliver a significant improvement in
performance and shareholder returns in the
years to come."
Interim results presentation
A copy of the H1 FY25 Interim
results presentation will shortly be made available on the
Company's website (https://corporate.theworks.co.uk/investors/).
A presentation and Q&A for all
existing and potential shareholders will be held via Investor Meet
Company at 1.30pm today (Friday 24 January 2025). Investors can
register here:
https://www.investormeetcompany.com/theworkscouk-plc/register-investor
Enquiries:
TheWorks.co.uk plc
Gavin Peck, CEO
Rosie Fordham, CFO
|
via Sanctuary Counsel
|
|
Sanctuary Counsel
Ben Ullmann
Rachel Miller
Kitty Ryder
|
0207 340 0395
|
theworks@sanctuarycounsel.com
|
|
|
|
Singer Capital Markets (Nomad and Broker)
Peter Steel
Jalini Kalaravy
|
020 7496 3000
|
|
Footnotes:
(1)
|
Total LFL sales is the
growth/decline in gross sales from stores which have been trading
for the full financial period (current and previous year), and from
the Group's online store.
|
(2)
|
Data from the British Retail
Consortium (BRC) showed non-food retail LFL decline of 1.3% for the
26-week period.
|
(3)
|
Adjusted profit figures exclude
Adjusting items. See Note 5 of the attached condensed
unaudited financial statements for details of Adjusting
items.
|
(4)
|
Prior period restatements reflect
adjustments wholly related to IFRS 16 lease accounting. Further
details can be found in Note 15 of the condensed unaudited
financial statements included in this RNS.
|
(5)
|
The seasonality of the business
typically results in a loss in the first half of the financial
year, with profit being generated through Christmas trading in
H2.
|
(6)
|
Net debt at bank excluding finance
leases, on a pre-IFRS 16 basis.
|
(7)
|
Due to the 53rd week at the end of
FY24, the Period end was 3 November 2024 compared to 27 October in
the prior year. This resulted in the timing of month end payments
falling within the Period end in 2024 but after the Period end in
2023.
|
Notes for editors:
The Works is one of the UK's
leading family-friendly value retailers of arts and crafts,
stationery, toys, and books, offering customers a differentiated
proposition as a value alternative to full price specialist
retailers. Our aim is to become the
favourite destination for affordable, screen free activities for
the whole family. The Group operates a
network of over 500 stores in the UK & Ireland, as well as
trading online at TheWorks.co.uk.
Chief Executive's
Report
Overview
Our primary focus in FY25 was to
reduce our cost base and grow margins to offset ongoing cost
headwinds and improve our profitability. We successfully delivered
on these objectives in the first half of FY25, supported by good
strategic progress. Today we announce a new strategy designed to
transform the business and our financial performance in the years
ahead.
H1
trading performance
The retail environment was
challenging in the first half of FY25. The start of the period saw
improved consumer confidence, albeit this did not translate into
increased consumer spend. Towards the end of the period, consumer
confidence was again impacted ahead of the new government's Autumn
Budget. Against this backdrop The Works' total revenue grew 1.3%,
with total like-for-like (LFL) sales declining 0.8%. This
performance was broadly in line with our expectations of stable
sales heading into the financial year and was ahead of the wider
sector. (1)
Stores, which comprise 91% of
sales, delivered robust LFL sales growth of 0.9%. Although external
factors tempered customer spend, our improved Back to School and
Halloween ranges were well received by customers and new book
releases continued to drive strong growth in fiction book sales.
Online LFL sales declined by 14.7%, reflecting operational
challenges experienced at our third-party operated online
fulfilment facility towards the end of the period, which
significantly reduced capacity and performance. The first half
outcome also reflects a planned reduction in promotional activity
year-on-year from September onwards, helping to improve online
profitability.
Group profitability improved
significantly year-on-year, with pre-IFRS 16 Adjusted EBITDA loss
of £2.8m (H1 FY24: £8.5m loss) and an Adjusted loss before tax of
£6.5m (H1 FY24: Restated £10.4m loss).(2) This was
driven by product margin improvement (+220bps on H1 FY24) and cost
saving action over the last 12 months delivering tangible results.
We expect to continue seeing the benefits from this activity in the
second half, helping to offset the ongoing cost headwinds
from changes to employers' National
Insurance contributions, higher National
Living and Minimum Wages, freight costs and business
rates.
H1
strategic progress
Significant progress was delivered
in H1, with more targeted in H2 and beyond driven by our new
strategy, which is explained in the section below.
Whilst developing this new
strategy we completed a project to more clearly define our brand
positioning and what we want The Works to be famous for. We now
have a new mission, "to become the favourite destination for
affordable, screen free activities for the whole family" and
branding to bring this mission to life, which is being reflected in
our external marketing. This includes the introduction of our new
#TimeWellSpent strapline, which was rolled out as part of our
Christmas marketing campaign.
Optimising our store portfolio
continues to be a key strategic focus. As part of this we perform
an annual portfolio review (with more regular reviews of low-profit
stores), to determine clear actions to improve performance, reduce
costs and agree our approach with landlords ahead of lease expiries
and breaks, including exploring potential relocation opportunities.
We also continue to selectively open new stores, focused on a list
of circa 100 target locations where we believe there is sufficient
demand for The Works and an opportunity to drive strong payback. In
the first half of FY25 we opened three new stores, relocated two
stores and closed eight predominantly loss-making stores. Our new
stores are performing well, with strong payback within just over a
year of opening. At period end, the business operated from 506
stores, of which 98% are trading profitably. We expect a further
net five store closures in H2 FY25 but are building a new store
pipeline which will see us return to modest growth in the store
estate, with a net five new stores being targeted in
FY26.
We made good progress in growing
our product margins through supplier negotiations, more conscious
control of product mix and reduced promotional activity. We also
reduced our cost base, with improved ways of working at our
Distribution Centre driving better stock flows to stores and
supporting the delivery of the targeted annualised saving of at
least £1m from this initiative. Further cost savings were realised
in H1 FY25 from action taken in FY24, including the removal of the
customer loyalty scheme, the restructure of the Operating Board,
implementation of the new store labour model and additional rent
savings through negotiations with landlords. These initiatives
enabled us to partially offset the significant ongoing cost
headwind from National Living and Minimum Wages increases and a
further headwind from temporarily higher freight costs in the first
half.
We also completed the rollout of
our new EPoS software across our store estate, replacing the
previous end of life solution and providing a platform for improved
capabilities in the future.
New strategy
Having strengthened the Board in
the first half, we revisited our longer-term goals and our strategy
to achieve them, recognising the need for refined plans to
transform our business, drive a significantly improved operational
and financial performance and thereby shareholder returns in the
years ahead.
Today we announce this new
strategy, focused on 'Elevating The Works' to become the favourite
destination for affordable, screen free activities for the whole
family. Delivering this strategy will have
a transformative impact on the business, with an ambition to reach
annual sales in excess of £375m and an EBITDA margin of at least 6%
within five years.
The key drivers of this strategy
are as follows:
Growing Brand Fame
The Works is well known and loved
by our core customers, but many potential customers still don't
know who we are or what we do. We have a meaningful purpose - to
inspire reading, learning, creativity and play - and a much clearer
brand identity, addressing a known customer need. We will grow our
brand fame through aligning our marketing to our new mission and
brand identity and will develop our product proposition to have
more all-year-round appeal by increasing exposure to new brands and
introducing a broader party offering and extended ranges in larger
stores. We will also ensure we provide a fun, family friendly and
inspiring experience for customers that will give them a real
reason to visit and re-visit The Works and work more closely with
our charity partners to help fulfil our purpose.
Improving Customer Convenience
Customer expectations regarding
convenience and value continue to grow. As a multi-channel retailer
with a large store estate, we can offer much greater convenience
than we currently do, and that offered by many of our competitors.
We will improve the convenience we offer our customers by
delivering a more consistent execution of our proposition,
tailoring store ranging to better meet the needs of local customers
including through better use of store space, accessing new
customers through new store openings, improving the shopability of
our website and improving the connection between our stores and our
website. This will see us better provide our customers with the
ranges they want, where they want, further improving overall
customer experience and satisfaction.
Being a Lean and Efficient Operator
To support offering our customers
great value products and delivering sustainable profit margins, we
need to be a business that is lean, simple and efficient. This will
require us to review and simplify our business processes, invest in
replacing our out-dated and inefficient systems, reduce operational
and support costs where appropriate, further increase our product
margins, grow our average selling price (to help reduce our cost to
serve ratio) and continue with our store portfolio
optimisation.
The step change in sales growth to
in excess of £375m sales within five years will be driven by
multiple levers, including:
·
|
Winning new customers by improving
brand recognition.
|
·
|
Developing deeper relationships
with, and increased spend from, existing customers.
|
·
|
Developing a more all-year-round
proposition.
|
·
|
Improving availability through
better execution of our proposition across our store
estate.
|
·
|
Increasing store sales densities
through the better use of store space.
|
·
|
Accessing new catchments through
the opening of a net 60 new stores.
|
·
|
Driving online sales growth by
improving online customer experience and our multi-channel
proposition.
|
The growth in EBITDA margins to at
least 6% within five years will be driven by:
·
|
Delivering LFL store sales growth
on a largely fixed cost base.
|
·
|
Growing our product
margins.
|
·
|
Reducing our operating costs
through cost transformation, supported by new systems and
processes.
|
·
|
Reducing our cost to serve ratio
by growing our average selling price.
|
·
|
Ongoing optimisation of our store
portfolio.
|
ESG
Underpinning these strategic
drivers is our commitment to 'Doing Business Better', ensuring we
continue inspiring current and future generations to read, learn,
create and play. A process is underway to refine our plans to
support our People and Planet pillars, which we will share in due
course.
We were delighted to place
10th in the Best Big Companies to Work For, up from
15th place last year and 12th the year
before. This is a fantastic achievement and demonstrates the
special culture we have at The Works. A huge thank you to all
colleagues for helping us maintain our 1* accreditation.
Leadership changes
In July 2024 Steve Bellamy
succeeded Carolyn Bradley as Chair of The Works, bringing extensive
strategic and operational experience across a range of businesses.
He has already had an incredibly positive impact on the business,
helping to drive a review of our goals and strategy, as well as
operational improvements.
Simon Hathway joined the Board
shortly after the Period end as an Independent Non-Executive
Director, Chair of the Remuneration Committee and member of the
Audit and Nomination Committees. Simon is highly experienced in
value retail as both an executive and an advisor, and his counsel
has already proved invaluable to the business.
Outlook
Consumer confidence has remained
fragile following the Autumn Budget and this, combined with the
operational challenges at our third-party operated online
fulfilment centre during peak Christmas trading, had an impact on
sales and profitability as we entered H2 FY25. These online
capacity issues do not affect us outside of peak and, with the
strong store sales we saw in December and into January, support our
expectations of delivering modest sales
growth for the remainder of the financial year. This, together with
our ongoing action to reduce costs and grow margins, means that
we remain on track to deliver an increase
in profitability in FY25, in line with market expectations of
pre-IFRS16 Adjusted EBITDA of £8.5m (FY24: £6m).
We are mindful of further
significant cost headwinds in FY26, anticipating a circa £6.5m
impact due to the rise in National Living and Minimum Wage and
changes to employers' National Insurance contributions. We continue
to take proactive action to mitigate the impact of these headwinds
and as part of our new strategy we are undertaking a cost
transformation project, supported by external consultants,
Interpath, which aims to unlock at least £5m of annualised cost
savings, with £2m targeted in FY26. We are also targeting further
growth in product margins, including through carefully targeted
price increases, and expect to deliver at least 100bps improvement
in margins in FY26. This action, together with an expectation of
low single-digit sales growth, will see us deliver further profit
growth in FY26.
Looking further ahead, we are
excited by the potential of the new strategy to transform the
business and expect to deliver a meaningful uplift in sales and
profitability in the medium-term.
Gavin Peck
Chief Executive Officer
Footnotes:
(1)
|
Data from the British Retail
Consortium (BRC) showed non-food retail
LFL decline of 1.3% for the 26-week period.
|
(2)
|
The seasonality of the business
typically results in a loss in the first half of the financial
year, with profit being generated through Christmas trading in
H2.
|
Financial
Report
Overview
This report covers the 26-week
period ended 3 November 2024 ("H1 FY25", "H1" or "the Period") and
refers to the comparative "H1 FY24" period of the 26 weeks ended 29
October 2023.
|
HY25
|
HY24
(Restated)(1)
|
Revenue
|
£124.2m
|
£122.6m
|
Revenue growth
|
1.3%
|
3.1%
|
LFL sales(2)
|
(0.8%)
|
1.6%
|
Pre-IFRS 16 Adjusted
EBITDA(2)
|
(£2.8m)
|
(£8.5m)
|
Loss before tax
(3)
|
(£6.9m)
|
(£16.5m)
|
Net debt
|
(£8.5m)
|
(£2.5m)
|
(1)
Prior period restatements reflect adjustments
wholly related to IFRS 16 Lease accounting. Further details can be
found in Note 12 of the attached condensed unaudited financial
statements.
(2)
The Group tracks a number of alternative
performance measures ("APMs") including pre-IFRS 16 EBITDA,
pre-IFRS 16 Adjusted EBITDA and like for like ("LFL") sales, as it
believes these provide stakeholders with additional helpful
information. These are described more fully in Notes 1(c) and 4 of
the attached condensed unaudited financial statements.
(3)
For further information on impairment refer to
Note 3 of the attached condensed unaudited financial
statements
Due to rounding, numbers presented
throughout this document may not add up precisely to the totals
provided and percentages may not precisely reflect the absolute
figures.
Revenue
Total revenue increased by 1.3% to
£124.2 million (H1 FY24: £122.6 million). Total LFL sales decreased
by 0.8%, with store LFLs increasing by
0.9% and online sales decreasing by 14.7%.
The closure of the loyalty scheme
towards the end of FY24 resulted in there being no negative
adjustment to gross sales from the incentives offered through the
scheme in H1 FY25 as there had been in H1 FY24. These reduced
incentives result in net revenues increasing by £0.8m year on
year.
The number of stores trading
decreased by five, from 511 at the end of FY24 to 506 at the end of
the Period. Three new stores were opened, eight were closed and two stores were relocated.
LFL sales growth
|
Stores
|
Online
|
Total
|
Q1
|
(1.6%)
|
0.4%
|
(1.4%)
|
Q2
|
2.9%
|
(21.4%)
|
(0.3%)
|
H1 FY25
|
0.9%
|
(14.7%)
|
(0.8%)
|
· Q1 -
reported a 1.4% decline in LFL sales reflecting the challenging
external market (BRC reported non-food retail LFL three-month
average decline of 1.7%) and poor performance in our Kids Books and
Toys and Games categories, which recovered through Q2.
· Q2 -
reported flat LFL sales, down 0.3% (compared to BRC reported
non-food retail LFL three-month average decline of 0.8%). Store LFL
sales growth was strong, up 2.9%, reflecting much improved Back to
School and Halloween ranges and continued strong growth in Adult
Fiction books. A planned reduction in September sale activity
adversely impacted sales, particularly online, but delivered a much
stronger margin rate. Online sales were also impacted by the
previously mentioned challenges experienced in online fulfilment
towards the end of the quarter and subsequent action taken to
prioritise improving profitability.
Gross profit
|
FY25
|
|
FY24
Restated(1)
|
|
|
|
|
£m
|
% of
revenue
|
|
£m
|
% of
revenue
|
|
Variance
£m
|
Variance
%
|
Revenue
|
124.2
|
|
|
122.6
|
|
|
1.6
|
1.3
|
Less: Cost of goods
sold
|
(50.5)
|
|
|
(52.5)
|
|
|
2.0
|
3.8
|
Product gross margin
|
73.7
|
59.3
|
|
70.1
|
57.2
|
|
3.6
|
5.1
|
|
|
|
|
|
|
|
|
|
Store payroll
|
(24.7)
|
(19.9)
|
|
(24.9)
|
(20.2)
|
|
0.2
|
0.8
|
Store property and establishment
costs
|
(24.4)
|
(19.7)
|
|
(25.4)
|
(20.7)
|
|
1.0
|
4.0
|
Store PoS and transaction
fees
|
(1.2)
|
(1.0)
|
|
(1.2)
|
(1.0)
|
|
0.0
|
0.0
|
Online variable
costs
|
(6.6)
|
(5.3)
|
|
(7.0)
|
(5.7)
|
|
0.4
|
5.7
|
Total non-product related cost of sales
|
(56.9)
|
(45.8)
|
|
(58.5)
|
(47.7)
|
|
1.6
|
2.8
|
Store depreciation (excluding IFRS
16)
|
(1.0)
|
(0.8)
|
|
(1.4)
|
(1.1)
|
|
0.4
|
28.6
|
Adjusting items (impairment
charges)
|
(0.3)
|
(0.3)
|
|
(6.1)
|
(5.0)
|
|
5.8
|
95.1
|
IFRS16 impact (excluding Adjusting
items)
|
0.0
|
0.0
|
|
2.8
|
2.3
|
|
(2.8)
|
(100.0)
|
Gross Profit Per Financial Statements
|
15.5
|
12.5
|
|
6.9
|
5.6
|
|
8.6
|
124.7
|
(1)
Prior period restatements reflect adjustments
wholly related to IFRS 16 Lease accounting. Further details can be
found in Note 15 of the attached condensed unaudited financial
statements.
(2)
Adjusted profit figures exclude Adjusting items.
See Notes 4 (Alternative performance measures) and 5 (Adjusting
items) of the attached condensed unaudited financial statements.
Product gross margin increased to 59.3% from 57.2% last year, reflecting action
taken to grow margins towards the end of FY24, with notable factors
as follows:
· Significant growth as a result of negotiations with
suppliers, conscious control of product mix and reduced promotional
activity.
· The
hedged FX rate on payments made in US dollars during H1 was
favourable year-on-year and continues to be a tailwind in H2.
H1 FY25 hedged US dollar;GB pound rate was
1.26 versus 1.11 in H1 FY24.
· Adverse 2024 container freight rates versus 2023 rates,
creating a further headwind in H2 due to the disruption in the Red
Sea. Average container rates paid during
H1 FY25 were $2.9k versus H1 FY24 of $1.8k.
Store payroll costs reduced
by £0.2m.
· Changes to our store labour model implemented at the start of
the Period, supported by an hours efficiency programme implemented
towards the end of FY24, more than offset the 9.8% increase in the
National Living and Minimum Wage ('NLMW') in April 2024 (and the
corresponding retail management salary increases).
Store property and establishment costs
reduced by £1.0m.
· Electricity costs reduced by £0.6m as a result of a reduction
in the contracted rate through hedging agreements, reflecting the
unwind of market-led energy price reductions.
· The
renegotiation of expiring leases across the LFL store estate
resulted in a reduction in rents of £0.4m.
· A
£0.3m reduction in property costs due to the net five store
closures.
· Partially offset by a £0.3m increase in dilapidation and
property repair costs.
Online variable costs decreased by £0.4m, primarily due to lower sales volumes.
Further cost savings resulted from improvements in the order
profile with increases in both average order value and average
ticket price reducing our cost to serve ratio. Efficiencies were
delivered as a result of improvements made to the online fulfilment
picking process following the move to the more automated,
third-party operated, facility in January 2024. However,
our third-party online fulfilment centre
subsequently faced unexpected operational
challenges, which affected capacity and resulted in increased costs
towards the end of the Period and through peak Christmas
trading.
Operating profit and pre-IFRS 16 EBITDA
|
HY25
|
|
HY24
(Restated)(1)
|
|
Variance
|
Variance
|
|
£m
|
% of
revenue
|
|
£m
|
% of
revenue
|
|
£m
|
%
|
Gross profit per financial statements
|
15.5
|
12.5
|
|
6.9
|
5.6
|
|
8.6
|
124.6
|
Distribution expenses
|
(6.2)
|
(5.0)
|
|
(6.8)
|
(5.6)
|
|
0.6
|
8.8
|
Administrative expenses
|
(13.7)
|
(11.0)
|
|
(14.2)
|
(11.6)
|
|
0.5
|
3.5
|
Operating profit per financial statements
|
(4.4)
|
(3.6)
|
|
(14.1)
|
(11.5)
|
|
9.7
|
68.7
|
Less Depreciation, amortisation
and IFRS16 included in Operating profit
|
1.3
|
1.1
|
|
(0.5)
|
(0.4)
|
|
1.8
|
240.0
|
Adjusting items
|
0.3
|
0.3
|
|
6.1
|
(5.0)
|
|
(5.8)
|
95.1
|
Pre-IFRS 16 Adjusted EBITDA
|
(2.8)
|
|
|
(8.5)
|
|
|
5.7
|
67.2
|
(4)
Prior period restatements reflect adjustments
wholly related to IFRS 16 Lease accounting. Further details can be
found in Note 15 of the attached condensed unaudited financial
statements.
Distribution costs (before
depreciation and IFRS 16) comprising picking stock and delivering
it to stores decreased by £0.6m compared
with the prior period. The move to a new way of
working in the retail Distribution Centre, supported by a
strengthened management team, drove efficiencies that more than
offset the NLMW increase.
Administration costs (before
depreciation and IFRS 16) increased by
£0.2m compared to H1 FY24. The prior period costs were flattered by
a release of the VAT provision and lower long term incentive
employee share plan charges. Underlying costs in H1 FY25 reduced by
£0.7m reflecting a reduction in Audit Fees
(following the move to AIM) and the restructuring of the Operating Board in late
FY24.
Depreciation, amortisation and IFRS16
adjustments are favourable
year-on-year primarily due to lower rental charges and lower IFRS16
adjustments, in turn due to a nil gain on modification of leases in
the Period, offset by lower depreciation of property, plant and
equipment. Refer to Note 4 (Alternative performance measures
("APMs")) of the attached condensed unaudited financial statements
for a reconciliation of re-IFRS16 EBITDA to profit/(loss) after
tax.
Adjusting items were a £0.3m
charge in H1 FY25 (restated H1 FY24: £6.1m charge),
comprising:
· A
£0.4m charge in relation to non-recurring operational costs in
respect of the challenges in online fulfilment towards the end of
the Period.
· £0.3m of restructuring and legal costs.
· A
£0.4m credit (restated H1 FY24: £2.0m credit) resulting from profit
on disposal and modification of right of use assets and lease
liabilities following the requirements of the IFRS16 accounting
standard.
Impairment charges are nil for the
Period (H1 FY24: Net charge £8.0m) as the Directors concluded that
no impairment trigger has occurred (see Note 13 of the attached
condensed unaudited financial statements).
A reconciliation of statutory
profit to EBITDA can be found in Note 4 of the attached condensed
unaudited financial statements.
Net financing expense
Net financing costs in the Period
were £2.4m (H1 FY24: £2.4m), mostly relating to IFRS 16 notional
interest on the calculated lease liability.
Interest relating to bank
facilities was £0.4m (H1 FY24: £0.3m) and
comprised facility availability charges and amortisation of the
cost of setting up the facility.
Loss before tax
The loss before tax was £6.9m (H1
FY24: £16.5m loss) which includes the £0.3m charge (H1 FY24: £6.1m
charge) for Adjusting items (described above). Due to the
seasonality of the business, the first half of the financial year
is typically loss making.
Tax
The Group's total income tax
credit in respect of the Period was £0.6m (restated H1 FY24 credit:
£3.6m). The effective tax rate on the total loss before tax was
9.3% (H1 FY24: 21.9%; FY24: 7.8%), the Adjusted tax rate was 9.7%
(restated H1 FY24: 24.6%).
The difference between the total
effective tax rate and the Adjusted tax rate relates to certain
costs and depreciation charges (including impairment) being
non-deductible for tax purposes.
Earnings per share
The basic and diluted losses per
share for the Period were 9.9 pence (restated H1 FY24: 20.6 pence
loss). Adjusted basic and diluted losses per share for the Period
were 9.4 pence (restated H1 FY24:12.6 pence loss).
Capital expenditure
Capital expenditure in the Period
was £2.2 million (H1 FY24: £3.1m).
Lower leasehold contributions from
landlords resulted in similar levels of new store expenditure
compared to FY24, despite fewer store openings.
There was a notable reduction in
expenditure on store refits with four undertaken in the Period vs
19 in the prior period).
Capital expenditure for the full
year is expected to be approximately £5.0m (FY24:
£5.8m).
|
H1 FY25
|
H1 FY24
|
Variance
|
|
£'m
|
£'m
|
£m
|
New stores and
relocations
|
(0.7)
|
(0.6)
|
(0.1)
|
Store refits and
maintenance
|
(0.7)
|
(1.6)
|
0.9
|
IT hardware, software,
projects
|
(0.8)
|
(0.9)
|
0.1
|
Total capital expenditure
|
(2.2)
|
(3.1)
|
0.9
|
Inventory
Stock was valued at £51.7m at the
end of the Period (H1 FY24: £56.1m), a reduction of
£4.4m.
The operating cycle of the
business causes maximum stock levels to occur prior to the
Christmas sales peak, and therefore stock levels typically increase
at the half year end compared with the levels at the year end. The
lower stock level compared to the prior period reflects a planned
reduction in stock holding and more efficient flow of peak stock
due to improvements in strengthening of the merchandising function
in FY24.
Stock in transit is higher
year-on-year, reflecting higher stock on water because of the extra
transit time from China due to the Red Sea challenges over the
summer. This resulted in an extra two weeks of stock in transit
recognised on the balance sheet at the period end.
Stock provisions are higher
compared to the prior period due to increased shrinkage provision.
This reflects an increase in the percentage of stock loss, which is
derived from four wall stock counts performed in stores at FY24
year end and during the Period used to calculate an estimate of the
unrecognised shrinkage at the Period end.
|
H1 FY25
|
H1
FY24
|
|
£m
|
£m
|
Gross stock
|
42.9
|
50.5
|
Less: provisions
|
(2.5)
|
(1.7)
|
Stock net of provisions
|
40.4
|
48.8
|
Stock in transit
|
11.3
|
7.3
|
Stock per balance sheet
|
51.7
|
56.1
|
Cash
flow
The table below shows a summarised
non IFRS 16 presentation of cash flow. The net cash outflow before
loan movements for the Period was £10.2m (H1 FY24: outflow of
£12.6m). The improvement in cash flows reflects the significant
improvement in profitability in the Period.
|
|
HY25
|
HY24
|
Variance
|
|
|
£m
|
£m
|
£m
|
Operating profit
|
|
(4.4)
|
(14.1)
|
9.7
|
Other operating
cashflows(1)
|
|
(0.2)
|
5.3
|
(5.5)
|
Net movement in working
capital
|
|
(2.3)
|
(0.2)
|
(2.1)
|
Net Cash from Investing
Activities
|
|
(2.2)
|
(3.1)
|
0.9
|
Tax paid
|
|
(0.5)
|
0.0
|
(0.5)
|
Interest and financing
costs
|
|
(0.3)
|
(0.4)
|
0.1
|
Purchase of Treasury
Shares
|
|
(0.3)
|
(0.1)
|
(0.2)
|
Cashflow before loan
movements
|
|
(10.2)
|
(12.6)
|
2.4
|
Drawdown of RCF
|
|
9.0
|
5.0
|
4.0
|
Exchange rate movements
|
|
0.1
|
(0.1)
|
0.1
|
Net decrease in cash and cash equivalents
|
|
(1.1)
|
(7.7)
|
6.6
|
Opening net cash
balance
|
|
1.6
|
10.2
|
(8.6)
|
Closing net (debt)/cash balance excluding lease
liabilities
|
|
(8.5)
|
(2.5)
|
(6.0)
|
(1) Other operating
cashflows relate to pre-working capital movements, excluding tax
and interest. See Condensed consolidated cash flow statement
in of the attached condensed unaudited
financial statements.
The Group ended the Period with
net debt of £8.5m (H1 FY24: £2.5m net debt). The
higher net debt position is due to the lower opening cash at the
start of the Period, along with a working capital outflow compared
to H1 FY24 as a consequence of the timing of month end payments
falling within the Period end (due to the Period end being 3
November 2024 compared to 27 October in the prior year) partially
offset by improved profitability in the period.
Bank facilities and financial position
The Group continues to have a
Revolving Credit Facility (RCF) of £20.0m, which provides ample
liquidity and is utilised to support the build of stock prior to
peak trading. The terms of this financing agreement expire on 30
November 2026.
Capital distributions
The Board is not proposing an
interim dividend. Future shareholder distributions, including share
buybacks, continue to be assessed as profitability improves and
funding allows.
Rosie Fordham
Chief Financial Officer
24 January 2025
Unaudited Condensed Consolidated Income
Statement
For the 26 weeks ended 3 November
2024
|
|
26 weeks to 3 November
2024
|
26
weeks to 29 October 2023
(Restated - Note 15)
|
53
weeks to 5 May 2024
|
|
|
Adjusted
|
Adjusting
items
|
Total
|
Adjusted
|
Adjusting items1
|
Total
|
Adjusted
|
Adjusting items
|
Total
|
|
Note
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
Revenue
|
3
|
124,200
|
-
|
124,200
|
122,575
|
-
|
122,575
|
282,585
|
-
|
282,585
|
Cost of sales
|
5
|
(108,362)
|
(316)
|
(108,678)
|
(109,615)
|
(6,052)
|
(115,667)
|
(234,505)
|
3,741
|
(230,764)
|
Gross profit
|
|
15,838
|
(316)
|
15,522
|
12,960
|
(6,052)
|
6,908
|
48,080
|
3,741
|
51,821
|
|
|
|
|
|
|
|
|
|
|
|
Other operating income
|
|
4
|
-
|
4
|
4
|
-
|
4
|
8
|
-
|
8
|
Distribution expenses
|
|
(6,160)
|
-
|
(6,160)
|
(6,846)
|
-
|
(6,846)
|
(12,725)
|
-
|
(12,725)
|
Administrative expenses
|
|
(13,788)
|
-
|
(13,788)
|
(14,173)
|
-
|
(14,173)
|
(27,685)
|
-
|
(27,685)
|
Operating (loss)/profit
|
|
(4,106)
|
(316)
|
(4,422)
|
(8,055)
|
(6,052)
|
(14,107)
|
7,678
|
3,741
|
11,419
|
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
6
|
-
|
-
|
-
|
17
|
-
|
17
|
19
|
-
|
19
|
Finance expense
|
6
|
(2,431)
|
-
|
(2,431)
|
(2,411)
|
-
|
(2,411)
|
(4,520)
|
-
|
(4,520)
|
Net financing expense
|
|
(2,431)
|
-
|
(2,431)
|
(2,394)
|
-
|
(2,394)
|
(4,501)
|
-
|
(4,501)
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) / profit before tax
|
|
(6,537)
|
(316)
|
(6,853)
|
(10,449)
|
(6,052)
|
(16,501)
|
3,177
|
3,741
|
6,918
|
|
|
|
|
|
|
|
|
|
|
|
Tax
|
9
|
635
|
-
|
635
|
2,573
|
1,034
|
3,607
|
(541)
|
-
|
(541)
|
(Loss) / profit for the period
|
|
(5,902)
|
(316)
|
(6,218)
|
(7,876)
|
(5,018)
|
(12,894)
|
2,636
|
3,741
|
6,377
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) / profit before tax and IFRS 16
|
4
|
(5,454)
|
(674)
|
(6,128)
|
(11,311)
|
(3,281)
|
(14,592)
|
1,118
|
(1,022)
|
96
|
|
|
|
|
|
|
|
|
|
|
|
Basic (loss)/earnings per share
(pence)
|
10
|
(9.4)
|
|
(9.9)
|
(12.6)
|
|
(20.6)
|
4.2
|
|
10.2
|
Diluted (loss)/earnings per share
(pence)
|
10
|
(9.4)
|
|
(9.9)
|
(12.6)
|
|
(20.6)
|
4.2
|
|
10.2
|
|
|
|
|
|
|
|
|
|
|
|
| |
1 Profit on disposal and modification of right-of-use assets
and lease liabilities recognised under IFRS 16 has been restated in
the 26 weeks to 29 October 2023 to be shown as an Adjusting item
rather than in result before Adjusting items.
All results arise from continuing
operations. The loss for the period is attributable to equity
holders of the Parent company.
Unaudited Condensed Consolidated Statement of Comprehensive
Income
For the 26 weeks ended 3 November
2024
|
26 weeks
to
3 November
2024
|
26 weeks
to
29
October 2023 (Restated - Note 15)
|
53 weeks
to
5 May
2024
|
|
£000
|
£000
|
£000
|
(Loss) / profit for the period
|
(6,218)
|
(12,894)
|
6,377
|
Items that may or may not be recycled subsequently into
profit and loss
|
|
|
|
Cash flow hedges - changes in fair
value
|
(1,058)
|
2,423
|
1,664
|
Cash flow hedges - reclassified to
profit and loss
|
404
|
(278)
|
134
|
Cost of hedging reserve - changes
in fair value
|
298
|
(357)
|
(415)
|
Cost of hedging reserve -
reclassified to profit and loss
|
183
|
135
|
182
|
Tax relating to components of
other comprehensive income
|
190
|
(525)
|
(323)
|
Other comprehensive (expense)/ income for the period, net of
income tax
|
17
|
1,398
|
1,242
|
Total comprehensive (expense) / income for the period
attributable to equity shareholders of the Parent
|
(6,201)
|
(11,496)
|
7,619
|
Unaudited Condensed Consolidated Statement of Financial
Position
As at 3 November 2024
|
|
3 November
2024
|
29
October 2023 (Restated - Note 15)
|
5 May
2024
|
|
Note
|
£000
|
£000
|
£000
|
Non-current assets
|
|
|
|
|
Intangible assets
|
12
|
2,177
|
1,583
|
1,866
|
Property, plant and
equipment
|
13
|
11,936
|
9,456
|
12,358
|
Right of use assets
|
14
|
60,106
|
53,779
|
57,703
|
Deferred tax assets
|
|
4,860
|
8,087
|
4,036
|
|
|
79,079
|
72,905
|
75,963
|
Current assets
|
|
|
|
|
Inventories
|
16
|
51,721
|
56,118
|
31,354
|
Trade and other
receivables
|
|
11,980
|
9,390
|
8,384
|
Derivative financial
assets
|
20
|
90
|
1,134
|
306
|
Current tax asset
|
|
1,645
|
1,020
|
1,189
|
Cash and cash
equivalents
|
|
522
|
2,458
|
1,619
|
|
|
65,958
|
70,120
|
42,852
|
Total assets
|
|
145,037
|
143,025
|
118,815
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
Interest bearing loans and
borrowings
|
17
|
9,000
|
5,000
|
-
|
Lease liabilities
|
14
|
20,580
|
18,287
|
19,943
|
Trade and other
payables
|
|
51,712
|
60,028
|
29,886
|
Provisions
|
18
|
303
|
276
|
543
|
Derivative financial
liabilities
|
20
|
605
|
84
|
64
|
|
|
82,200
|
83,675
|
50,436
|
Non-current liabilities
|
|
|
|
|
Lease liabilities
|
14
|
58,716
|
66,713
|
57,817
|
Provisions
|
18
|
634
|
893
|
476
|
|
|
59,350
|
67,606
|
58,293
|
Total liabilities
|
|
141,550
|
151,281
|
108,729
|
Net assets/ (liabilities)
|
|
3,487
|
(8,256)
|
10,086
|
|
|
|
|
|
Equity attributable to equity holders of the
Parent
|
|
|
|
|
Share capital
|
19
|
625
|
625
|
625
|
Share premium
|
19
|
28,322
|
28,322
|
28,322
|
Merger reserve
|
|
(54)
|
(54)
|
(54)
|
Share based payment
reserve
|
|
2,771
|
2,782
|
2,583
|
Hedging reserve
|
|
(139)
|
1,035
|
129
|
Retained earnings
|
|
(28,038)
|
(40,966)
|
(21,519)
|
Total equity
|
|
3,487
|
(8,256)
|
10,086
|
Unaudited Condensed Consolidated Statement of Changes in
Equity
|
Attributable to equity holders
|
|
|
|
|
Share
based
|
|
|
|
|
Share
|
Share
|
Merger
|
Payments
|
Hedging
|
Retained
|
Total
|
|
capital
|
premium
|
reserve
|
reserve
|
reserve1
|
earnings
|
equity
|
For the 26 Weeks Ended 3 November 2024
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
At 5 May 2024
|
625
|
28,322
|
(54)
|
2,583
|
129
|
(21,519)
|
10,086
|
Total comprehensive income / (expense) for the
period
|
|
|
|
|
|
|
|
Loss for the period
|
-
|
-
|
-
|
-
|
-
|
(6,218)
|
(6,218)
|
Other comprehensive
income
|
-
|
-
|
-
|
-
|
17
|
-
|
17
|
Total comprehensive income / (expense) for the
period
|
-
|
-
|
-
|
-
|
17
|
(6,218)
|
(6,201)
|
Hedging gains and losses and costs
of hedging transferred to the cost of inventory
|
-
|
-
|
-
|
-
|
(285)
|
-
|
(285)
|
Transactions with owners of the Company
|
|
|
|
|
|
|
|
Share-based payment
charges
|
-
|
-
|
-
|
188
|
-
|
-
|
188
|
Acquisition of treasury
shares
|
-
|
-
|
-
|
-
|
-
|
(301)
|
(301)
|
Total transactions with owners
|
-
|
-
|
-
|
188
|
-
|
(301)
|
(113)
|
Balance at 3 November 2024
|
625
|
28,322
|
(54)
|
2,771
|
(139)
|
(28,038)
|
3,487
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the 26 Weeks Ended 29 October 2023
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
At 30 April 2023
|
625
|
28,322
|
(54)
|
2,780
|
(331)
|
(29,688)
|
1,654
|
Cumulative prior period adjustments
|
-
|
-
|
-
|
-
|
-
|
1,762
|
1,762
|
Balance at 30 April 2023 (restated)
|
625
|
28,322
|
(54)
|
2,780
|
(331)
|
(27,926)
|
3,416
|
Total comprehensive income / (expense) for the
period
|
|
|
|
|
|
|
|
Loss for the period (restated, see
note 15)
|
-
|
-
|
-
|
-
|
-
|
(12,894)
|
(12,894)
|
Other comprehensive
income
|
-
|
-
|
-
|
-
|
1,398
|
-
|
1,398
|
Total comprehensive income / (expense) for the
period
|
-
|
-
|
-
|
-
|
1,398
|
(12,894)
|
(11,496)
|
Hedging gains and losses and costs
of hedging transferred to the cost of inventory
|
-
|
-
|
-
|
-
|
(32)
|
-
|
(32)
|
Transactions with owners of the Company
|
|
|
|
|
|
|
|
Share-based payment
charges
|
-
|
-
|
-
|
2
|
-
|
-
|
2
|
Acquisition of treasury
shares
|
-
|
-
|
-
|
-
|
-
|
(146)
|
(146)
|
Total transactions with owners
|
-
|
-
|
-
|
2
|
-
|
(146)
|
(144)
|
Balance at 29 October 2023
|
625
|
28,322
|
(54)
|
2,782
|
1,035
|
(40,966)
|
(8,256)
|
|
|
|
|
|
|
|
|
1
Hedging reserve includes £(61)k in relation to
changes in forward points which are recognised in other
comprehensive income and accumulated as a cost of hedging within
the hedging reserve (£391k for the 26 weeks ended 29 October 2023,
£410k for the 53 weeks ended 5 May 2024).
Unaudited Condensed Consolidated Cash Flow
Statement
For the 26 weeks ended 3 November
2024
|
26 weeks
to
3 November
2024
|
26 weeks
to
29
October 2023 (Restated - Note 15)
|
53 weeks
to
5 May
2024
|
|
£000
|
£000
|
£000
|
Cash Flows From Operating Activities
|
|
|
|
(Loss) /
profit for the period
|
(6,218)
|
(12,894)
|
6,377
|
Adjustments for:
|
|
|
|
Depreciation of property, plant
and equipment
|
1,399
|
2,420
|
3,663
|
Impairment of property, plant and
equipment
|
-
|
2,787
|
1,589
|
Reversal of impairment of
property, plant and equipment
|
-
|
(293)
|
(1,272)
|
Depreciation of right-of-use
assets
|
10,203
|
10,240
|
18,224
|
Impairment of right-of-use
assets
|
-
|
6,874
|
3,394
|
Reversal of impairment of
right-of-use assets
|
-
|
(537)
|
(4,620)
|
Amortisation of intangible
assets
|
390
|
374
|
632
|
Impairment of
intangible assets
|
-
|
450
|
442
|
Reversal of
impairment of intangible assets
|
-
|
(729)
|
(850)
|
Derivative exchange loss /
(gain)
|
285
|
344
|
494
|
Financial income
|
-
|
(17)
|
(19)
|
Financial expense
|
388
|
275
|
536
|
Interest on lease
liabilities
|
2,043
|
2,136
|
3,984
|
(Profit) / loss on disposal of
property, plant and equipment
|
492
|
(174)
|
202
|
Profit on
disposal of right of use assets and lease liability
|
(358)
|
(1,517)
|
(3,537)
|
Profit relating
to lease modifications and amortisation of capital
contributions
|
(320)
|
(984)
|
-
|
(Profit) / loss
on disposal of intangible assets
|
-
|
(66)
|
-
|
Share based
payment charges
|
188
|
2
|
(197)
|
Taxation
|
(635)
|
(3,607)
|
541
|
Operating cash flows before changes in working
capital
|
7,857
|
5,084
|
29,583
|
(Increase) / decrease in trade and
other receivables
|
(3,512)
|
(1,823)
|
(963)
|
(Increase)/ decrease in
inventories
|
(20,255)
|
(23,217)
|
1,149
|
Increase / (decrease) in trade and
other payables
|
21,527
|
25,559
|
(3,672)
|
Decrease in provisions
|
(82)
|
(694)
|
(844)
|
Cash inflows from operating activities
|
5,535
|
4,909
|
25,253
|
Corporation tax paid
|
(457)
|
-
|
(97)
|
Net cash from operating activities
|
5,078
|
4,909
|
25,156
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
Acquisition of property, plant and
equipment
|
(1,985)
|
(3,092)
|
(6,078)
|
Capital contributions received
from landlords
|
516
|
659
|
1,460
|
Acquisition of intangible
assets
|
(702)
|
(695)
|
(1,208)
|
Interest received
|
-
|
17
|
19
|
Net cash outflows from investing activities
|
(2,171)
|
(3,111)
|
(5,807)
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
Payment of finance lease
liabilities (capital element)
|
(10,402)
|
(11,788)
|
(22,471)
|
Payment of finance lease
liabilities (interest)
|
(2,043)
|
(2,136)
|
(3,984)
|
Payment of long term borrowing
costs
|
-
|
(60)
|
(60)
|
Other interest paid
|
(341)
|
(349)
|
(434)
|
Proceeds from bank
borrowings
|
9,000
|
5,000
|
(6,000)
|
Repayment of bank
borrowings
|
-
|
-
|
6,000
|
Dividend paid
|
-
|
-
|
-
|
Purchase of treasury
shares
|
(301)
|
(146)
|
(260)
|
Net cash from financing activities
|
(4,087)
|
(9,479)
|
(27,209)
|
|
|
|
|
Net decrease in cash and cash
equivalents
|
(1,180)
|
(7,681)
|
(7,860)
|
Exchange rate movements
|
83
|
(57)
|
(717)
|
Cash and cash equivalents at
beginning of Period
|
1,619
|
10,196
|
10,196
|
Cash and cash equivalents at end of Period
|
522
|
2,458
|
1,619
|
Notes to the Unaudited Condensed Consolidated Interim
Financial Statements
For the 26 weeks ended 3 November
2024
1 Accounting Policies
(a) General Information
TheWorks.co.uk plc ('the Company')
is a public limited company domiciled in the United Kingdom and its
registered office is Boldmere House, Faraday Avenue, Hams Hall
Distribution Park, Coleshill, Birmingham, B46 1AL. These unaudited
condensed consolidated interim financial statements ('interim
financial statements') as at and for the 26 weeks ended 3 November
2024 comprise the results of the Company and its subsidiaries
(together referred to as 'the Group').
(b) Basis of preparation
The interim financial statements
have been prepared in accordance with IAS 34 Interim Financial
Reporting, and should be read in conjunction with TheWorks.co.uk
plc financial statements for the 53 weeks ended 5 May 2024. The
interim financial statements do not include all of the information
required for a complete set of IFRS financial statements. However,
selected explanatory notes are included to explain events and
transactions that are significant to an understanding of the
changes in the Group's financial position and performance since the
last annual financial statements.
The consolidated financial
statements are presented in pounds sterling and all values are
rounded to the nearest thousand (£000), except when otherwise
indicated.
(i) Going concern
The unaudited condensed financial
statements have been prepared on a going concern basis, which the
Directors consider appropriate for the reasons set out
below.
The Directors have assessed the
prospects of the Group, taking into account its current position
and the potential impact of the principal risks which have been
identified through the Group's risk evaluation process.
In preparing its FY24 Annual
Report and financial statements (which were approved on 1 October
2024), the Group prepared a cash flow forecast. The revised
forecast covers a period of 18 months from the date of approval of
these unaudited condensed financial statements (the going concern
assessment period), based on the Board's forecast for FY25 and its
three-year plan, referred to the 'Base Case' scenario. In addition,
a 'severe but plausible' 'Downside Case' sensitivity was prepared
to support the Board's conclusion regarding going concern, by
stress testing the Base Case to indicate the financial headroom
resulting from applying more pessimistic assumptions.
In assessing the basis of
preparation the Directors considered:
• The
external environment.
• The
Group's financial position including the quantum and expectations
regarding availability of bank facilities.
• The
potential impact on financial performance of the principal
risks.
•
The output of the Base Case scenario, which
mirrors the Group's three-year plan and therefore represents its
estimate of the most likely financial performance over the forecast
period.
•
Measures to maintain or increase liquidity in the
event of a significant downturn in trading.
•
The resilience of the Group to these risks having
a more severe impact, evaluated via the Downside Case which shows
the impact on the Group's cash flows, bank facility headroom and
covenants.
These factors are described below.
External environment
The risks which are considered the
most significant to this evaluation relate to the economy and the
market, specifically their effect on the strength of trading
conditions, and the Group's ability to successfully execute its
strategy. The risk of weaker consumer demand is considered to be
the greater of these risks, due to higher interest rates and years
of high level inflation, and its potential effect on economic
growth and consumer spending.
An emerging risk has been noted in
relation to the possible effects of climate change, but this is not
expected to have a material financial impact on the Group during
the forecast period.
Financial position and bank facilities
At the Period end the Group held
net debt (excluding lease liabilities) of £8.5m (HY24: £2.5m) (Note
17).
The Group's bank facilities
comprise a £20.0m revolving credit facility (RCF) which terminates
at the end of November 2026. The facility includes two financial
covenants which are structured in a way that is typical for a
retail business of this size and are tested quarterly:
1. The
level of net debt to LTM (last twelve months') EBITDA must not
exceed 2.5 times during the life of the facility.
2. The
"Fixed Charge Cover" or ratio of LTM EBITDA prior to deducting rent
and interest, to LTM rent and interest. In March 2024, the Group
agreed an amendment to the facility agreement which resulted in in
a reset of the fixed charge cover; until October 2025, the ratio
must be at least 1.05 times and thereafter 1.20 times.
The Group expects to be able to
operate and have sufficient headroom within these covenants during
the forecast period.
Potential impact of risks on financial
scenarios
The 'Principal risks and
uncertainties' section of the Strategic report on pages 38 to 43 of
the Group's FY24 Annual Report, sets out the main risks that the
Board considers relevant.
It is considered unlikely that all
the risks would manifest themselves to adversely affect the
business at the same time. The Base Case scenario/ the Group's
three-year financial plan implicitly already takes into accounts
the risks described and assumes that they manifest themselves in a
way or to an extent that might be considered 'neutral'.
The Downside Case scenario assumes
that there are more severely negative effects than the Base Case.
In particular, the Downside Case assumptions are that macroeconomic
conditions are significantly worse, resulting in reduced consumer
spending and lower sales. It should be noted that the Base Case
already teaks into account the current subdued consumer market
conditions. The Downside Case assumes conditions become worse still
from the second half of the FY25 financial year.
Base Case scenario
The Base Case scenario assumptions
reflect the following factors:
· The
macroeconomic environment remains challenging resulting in only
marginal total sales growth in the second half of FY25 with sales
in the outer years reflecting a slightly improving external
environment.
· The
FY25 product margin percentage is exceeding the expected
performance in the Base Case and has increased significantly
compared to the prior year. It reflects the expected full year
effect of targeted cost price reductions, along with a slightly
favourable hedged FX rate; these are partly offset by the increased
ocean container freight costs that have been in place since the
beginning of 2024.
· The
anticipated further inflationary effects, in particular the
increase in the National Living Wage and reduction in the threshold
applied to National Insurance. In respect of other costs, notably
property occupancy costs, it is not expected that there will be
further significant inflationary effects in the forecast period
following the significant increases (for example in electricity
costs) already experienced during FY24.
· Capital expenditure levels are in line with the Group's
strategic plan. A significant proportion of the Group's capital
expenditure is discretionary, particularly over a short-term time
period. As a result, if required, it can therefore be reduced
substantially, for example, in the event of the Group needing to
preserve cash.
· The
anticipated costs of the Group's net zero climate change
commitments have been incorporated within the Base Case model. As
set out in the climate related disclosures in the annual report,
the impact on the Group's financial performance and position is not
expected to be material in the short term.
· The
plan makes provision for capital distribution payments in the form
of buy backs or dividends.
Under the Base Case scenario, the
Group expects to make routine operational use of its bank facility
each year as stock levels are increased in September-October, prior
to peak sales occurring.
The output of the Base Case model
scenario indicates that the Group has sufficient financial
resources to continue to operate as a going concern and for the
financial statements to be prepared on this basis.
Measures to maintain or increase liquidity in the event of a
significant downturn in trading
If necessary, mitigating actions
can and would be taken in response to a significant downturn in
trading such as is described below, which would increase
liquidity.
These include, for example,
delaying and reducing stock purchases, stock liquidation,
reductions in capital expenditure, the review of payment terms and
the review of dividend levels. Some of these potential mitigations
have been built into the Downside Case model, and some are
additional measures that would be available in the event of that
scenario, or worse, actually occurring.
Severe but plausible Downside Case scenario
The Downside Case makes the
following assumptions to reflect more adverse macroeconomic
conditions compared to the Base Case:
· In
the second half of FY25 store and online sales are assumed to be
lower than the Base case by 1.5% and 2.0% respectively reflecting a
more challenging consumer environment over
peak.
· Store
and online sales continue to be lower than the Base Case in FY26
and FY27 and store sales are further reduced as the assumption
surrounding new store growth is reduced in the Downside
Case.
· The
product gross margin percentage is lower in FY26 and FY27
reflecting continued higher ocean freight rates (which are already
built into the FY25 Base Case) along with an assumed increase in
promotional activity to allow for the clearance of stock which is
assumed would have accumulated due to lower sales levels. Expected
FX requirements are hedged until mid-FY26. Other gross margin
inputs are relatively controllable, including via the setting of
selling prices to reflect any systematic changes in the cost price
of goods bought for resale.
· Volume related costs in the Downside Case are lowered where
they logically alter in a direct relationship with sales levels,
for example, forecast online fulfilment and marketing costs. The
model also reflects certain steps which could be taken to mitigate
the effect of lower sales, depending on management's assessment of
the situation at the time. These include adjustments to stock
purchases, reducing capital expenditure, reductions in variable
labour usage and the suspension of dividend
payments.
· The
combined financial effect of the modified assumptions in this
scenario compared with the Base Case, over the three-year period,
including implementing some of the mitigating activities available,
would result in:
o A
reduction in store net sales of approximately
£30m.
o A
reduction in online net sales of approximately
£3m.
o A
reduction to EBITDA of approximately £13m.
Under this scenario the Group will
draw on its bank facility for the usual peak stock build. The bank
facility financial covenants are complied with throughout the
period, including during the pre-Christmas period when the facility
is being used. There is sufficient headroom within both covenants
and sufficient cash headroom under this scenario throughout the
going concern period.
Conclusion regarding basis of preparation
The current economic environment
remains challenging with the cost-of-living crisis continuing to
impact much of the UK particularly low-income households, however
the rate of inflation is slowing and interest rates are at the
lowest since July 2023. There is sufficient cash headroom and
headroom within both covenants under both scenarios and therefore
the Directors are confident that the Group will have sufficient
funds to continue to meet its liabilities as they fall due for at
least 12 months from the date of approval of the financial
statements and have therefore prepared the financial statements on
a going concern basis.
(ii) Accounting policies
The interim financial statements
have been prepared on a basis consistent with the accounting
policies published in the Group's financial statements for
FY24.
(c) Alternative performance measures and
Adjusting items
The Group tracks a number of
alternative performance measures (APMs) in managing its business,
which are not defined or specified under the requirements of IFRS
because they exclude amounts that are included in, or include
amounts that are excluded from, the most directly comparable
measure calculated and presented in accordance with IFRS, or are
calculated using financial measures that are not calculated in
accordance with IFRS.
The Group believes that these
APMs, which are not considered to be a substitute for or superior
to IFRS measures, provide stakeholders with additional helpful
information on the performance of the business. They are consistent
with how the business performance is planned and reported
internally, and are also consistent with how these measures have
been reported historically. Some of the APMs are also used for the
purpose of setting remuneration targets.
The APMs should be viewed as
supplemental to, but not as a substitute for, measures presented in
the consolidated financial statements prepared in accordance with
IFRS. The Group believes that the APMs are useful indicators of its
performance but they may not be comparable with similarly titled
measures reported by other companies due to the possibility of
differences in the way they are calculated.
The key APMs that the Group uses
include: like-for-like sales growth (LFL); Pre-IFRS 16 Earnings
before interest, tax, depreciation and amortisation (Pre-IFRS 16
EBITDA), Profit before tax and IFRS 16, Pre-IFRS 16 Adjusted
EBITDA, Adjusted Profit; and Adjusted earnings per share. The APMs
used by the Group and explanations of how they are calculated and
how they can be reconciled to a statutory measure where relevant,
are set out in Note 4.
"Adjusted" measures are calculated
by adding back or deducting Adjusting Items. Adjusting items are
material in size and unusual in nature or incidence and, in the
judgement of the Directors, should therefore be disclosed
separately on the face of the financial statements to ensure that
the reader has a proper understanding of the Group's financial
performance and that there is comparability of financial
performance between periods.
Refer to Note 5 for information
regarding items that were treated as Adjusting.
(d) Key sources of estimation
uncertainty
The preparation of consolidated
financial statements requires the Group to make estimates and
judgements that affect the application of policies and reported
amounts.
Critical judgements represent key
decisions made by management in the application of the Group's
accounting policies. Where a significant risk of materially
different outcomes exists, this will represent a key source of
estimation uncertainty.
Estimates and judgements are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances. Actual results may differ from these
estimates.
Key sources of estimation
uncertainty which are material to the interim financial statements
are described in the context of the matters to which they relate,
in the following notes:
|
|
Going concern
|
1
|
Impairment of intangible assets,
property, plant and equipment and right-of-use assets
|
|
2 Segmental
reporting
IFRS 8 requires segment
information to be presented on the same basis as is used by the
Chief Operating Decision Maker for assessing performance and
allocating resources.
The Group has one operating
segment with two revenue streams, bricks and mortar stores and
online. This reflects the Group's management and reporting
structure as viewed by the Board of Directors, which is considered
to be the Group's Chief Operating Decision Maker. Aggregation is
deemed appropriate due to both operating segments having similar
economic characteristics, similar products on offer and a similar
customer base.
3 Revenue
The Group's revenue is derived
from the sale of finished goods to customers. The following table
shows the primary geographical markets from which revenue is
derived.
|
26 weeks
ended
3 November
2024
|
26 weeks
ended
29
October 2023
|
53 weeks
ended
5 May
2024
|
|
£000
|
£000
|
£000
|
Sale of goods
|
|
|
|
- UK
|
122,127
|
120,588
|
277,828
|
- EU (Republic of
Ireland)
|
2,073
|
1,987
|
4,757
|
Total revenues
|
124,200
|
122,575
|
282,585
|
Seasonality of operations
The Group's revenue is subject to
seasonal fluctuations as a result of peaking during the approach to
Christmas, from October to December. Therefore, the first half of
the financial year, from April to October, typically produces lower
revenue and profit than the second half.
4 Alternative performance
measures ("APMs")
Like-for-like ("LFL") sales
LFL sales are defined by the Group
as the year-on-year growth in gross sales from stores which have
been trading for a full financial year prior to the current year
and have been trading throughout the current financial period being
reported on, and from the Company's online store, calculated on a
calendar week basis. The measure is used widely in the retail
industry as an indicator of sales performance. LFL sales are
calculated on a gross basis to ensure that fluctuations in the VAT
rates of products sold are excluded from the like-for-like sales
growth percentage figure.
Pre-IFRS 16 Adjusted EBITDA (EBITDA) and Adjusted profit after
tax
EBITDA is defined by the Group as
pre-IFRS 16 earnings before interest, tax, depreciation,
amortisation and profit/loss on the disposal and modification of
fixed assets, after adding back or deducting Adjusting items. See
Note 5 for a description of Adjusting items. Pre-IFRS 16 EBITDA is
used for the bank facility LTM EBITDA covenant
calculations.
The table provides a
reconciliation of pre-IFRS 16 EBITDA to profit/(loss) after tax and
the impact of IFRS 16:
|
26 weeks
ended
3 November
2024
|
26 weeks
ended
29
October 2023
(Restated - Note 15)
|
53 weeks
ended
5 May
2024
|
|
£000
|
£000
|
£000
|
Pre-IFRS 16 Adjusted EBITDA
|
(2,779)
|
(8,486)
|
6,042
|
Income statement rental charges
not recognised under IFRS 16
|
10,809
|
13,179
|
24,288
|
Foreign exchange differences on
euro leases
|
(10)
|
45
|
69
|
Post-IFRS 16 Adjusted EBITDA
|
8,020
|
4,738
|
30,399
|
|
|
|
|
Profit / (loss) on disposal of
property, plant and equipment
|
(134)
|
174
|
(168)
|
Profit / (loss) on disposal of
intangible assets
|
-
|
67
|
(34)
|
Depreciation of property, plant
and equipment
|
(1,399)
|
(2,420)
|
(3,663)
|
Depreciation of
right-of-use-assets
|
(10,203)
|
(10,240)
|
(18,224)
|
Amortisation
|
(390)
|
(374)
|
(632)
|
Finance expenses
|
(2,431)
|
(2,411)
|
(4,520)
|
Finance income
|
-
|
17
|
19
|
Tax credit / (charge)
|
635
|
2,573
|
(541)
|
Adjusted (loss) / profit after tax
|
(5,902)
|
(7,876)
|
2,636
|
Adjusting items (including
impairment charges and reversals)
|
(316)
|
(6,052)
|
3,741
|
Tax (charge) / credit in relation
to Adjusting items
|
-
|
1,034
|
-
|
(Loss) / profit after tax
|
(6,218)
|
(12,894)
|
6,377
|
Profit before tax and IFRS 16
The following tables provides a
reconciliation of (loss)/profit before tax and IFRS 16 adjustments
to (loss)/profit before tax.
|
26 weeks
ended
3 November
2024
|
26
weeks ended
29
October 2023
(Restated - Note 15)
|
53
weeks ended
5 May
2024
|
|
Adjusted
|
Adjusting
items
|
Total
|
Adjusted
|
Adjusting items
|
Total
|
Adjusted
|
Adjusting items
|
Total
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
(Loss) / profit before tax before IFRS 16
adjustments
|
(5,454)
|
(674)
|
(6,128)
|
(11,311)
|
(3,281)
|
(14,592)
|
1,118
|
(1,022)
|
96
|
Remove rental charges not
recognised under IFRS 16
|
11,111
|
-
|
11,111
|
13,117
|
-
|
13,117
|
24,166
|
-
|
24,166
|
Remove hire costs from hire of
equipment
|
56
|
-
|
56
|
62
|
-
|
62
|
122
|
-
|
122
|
Remove depreciation charged on the
existing assets
|
-
|
-
|
-
|
-
|
-
|
-
|
(94)
|
-
|
(94)
|
Remove interest charged on the
existing liability
|
6
|
-
|
6
|
14
|
-
|
14
|
4
|
-
|
4
|
Depreciation charge on right of
use asset
|
(10,203)
|
-
|
(10,203)
|
(10,240)
|
-
|
(10,240)
|
(18,224)
|
-
|
(18,224)
|
Interest cost on lease
liability
|
(2,043)
|
-
|
(2,043)
|
(2,136)
|
-
|
(2,136)
|
(3,984)
|
-
|
(3,984)
|
Profit on disposal of right-of-use
assets and lease liability
|
-
|
358
|
358
|
-
|
980
|
980
|
-
|
3,537
|
3,537
|
Profit on modification of
leases
|
-
|
-
|
-
|
-
|
983
|
983
|
-
|
-
|
-
|
Foreign exchange difference on
euro leases
|
(10)
|
-
|
(10)
|
45
|
-
|
45
|
69
|
-
|
69
|
Additional net impairment charge
under IAS 36
|
-
|
-
|
-
|
-
|
(4,734)
|
(4,734)
|
-
|
1,226
|
1,226
|
Net Impact of IFRS 16 on (loss) / profit before
tax
|
(1,083)
|
358
|
(725)
|
862
|
(2,771)
|
(1,909)
|
2,059
|
4,763
|
6,822
|
(Loss) / profit before tax
|
(6,537)
|
(316)
|
(6,853)
|
(10,449)
|
(6,052)
|
(16,501)
|
3,177
|
3,741
|
6,918
|
Other adjusted profit metrics
Other key profit measures
including operating profit, profit before tax, profit for the
period, and earnings per share are also calculated on an Adjusted
basis by adding back or deducting Adjusting items. These adjusted
metrics are included within the consolidated income statement and
statement of other comprehensive income, with details of Adjusting
items included below in Note 5.
5 Adjusting
items
During the period, the items
analysed below have been classified as Adjusting:
|
26 weeks ended 3 November
2024
|
26 weeks
ended
29
October 2023
(restated)
|
53 weeks
ended
5 May
2024
|
|
£000
|
£000
|
£000
|
Within cost of sales
|
|
|
|
Impairment charges
|
-
|
10,110
|
5,333
|
Impairment reversals
|
-
|
(2,095)
|
(6,742)
|
Profit on disposal and
modification of right-of-use assets and lease
liabilities
|
(358)
|
(1,963)
|
(3,537)
|
Other exceptional items
|
674
|
-
|
1,205
|
Total Adjusting items before tax
|
316
|
6,052
|
(3,741)
|
Impairment charges and reversals
of prior period impairment charges relate to fixed assets (see
Notes 12, 13, 14).
Profit on disposal and
modification of right-of-use assets and lease liabilities relate to
leases (see Note 14).
Other exceptional items comprise
of £0.1m of redundancy costs, £0.1m related to the settlement of a
legal case and £0.4m related to non-recurring operational costs as
a result of the challenges in online fulfilment. (26 weeks ended 29
October 2023: £nil. 53 weeks ended 5 May 2024: £0.5m of
professional fees and other costs related to the listing of the
Company on AIM and £0.7m of redundancy costs related to the
restructure of the Operating Board.)
6 Finance income and
expense
|
26 weeks ended 3 November
2024
|
26 weeks
ended
29
October 2023
|
53 weeks
ended
5 May
2024
|
|
£000
|
£000
|
£000
|
Finance income
|
|
|
|
Bank interest
receivable
|
-
|
17
|
19
|
Total finance income
|
-
|
17
|
19
|
Finance expense
|
|
|
|
Bank interest payable
|
(310)
|
(210)
|
(389)
|
Amortisation of capitalised loan
costs
|
(78)
|
(65)
|
(147)
|
Interest payable on lease
liabilities
|
(2,043)
|
(2,136)
|
(3,984)
|
Total finance expense
|
(2,431)
|
(2,411)
|
(4,520)
|
7 Share based
payments
During the Period, nil shares were
awarded under "TheWorks.co.uk 2018 Long Term Incentive Plan" and
nil awarded under the Save As You Earn Scheme. (26 weeks ended 29
October 2023: 2,716,687 and 1,416,375, 53 weeks ended 5 May 2024:
2,716,687 and 1,416,375 respectively).
During the Period, nil restricted
stock awards were granted to key management and senior employees
(26 weeks ended 29 October 2023: 856,250, 53 weeks ended 5 May
2024: 856,250).
Expense recognised in the income statement
The IFRS 2 charge recognised
during the Period was as follows:
|
26 weeks
ended
3 November
2024
|
26 weeks
ended
29
October 2023
|
53 weeks
ended
5 May
2024
|
|
£000
|
£000
|
£000
|
LTIP -- Share based payment
(credit) / expense
|
79
|
(155)
|
(308)
|
RSA - Share based payment
expense
|
82
|
121
|
84
|
SAYE - Share based payment
expense
|
27
|
36
|
27
|
Total IFRS 2 charges/ (credit)
|
188
|
2
|
(197)
|
8 Employee
benefits
The Group operates a defined
contribution pension scheme. The pension charge for the period
represents contributions payable by the group to the scheme and
amounted to £565k (26 weeks ended 29 October 2023: £484k; 53 weeks
ended 5 November 2024: £1,066k).
9 Tax
The income tax expense or credit
is determined by multiplying the loss before tax for the interim
reporting period by management's best estimate of the weighted
average annual income tax rate expected for the full financial
year, adjusted for the tax effect of certain items recognised in
full in the interim period. As such, the effective tax rate in the
interim financial statements may differ from management's estimate
of the effective tax rate for the annual financial
statements.
The Group's total income tax
credit in respect of the Period was £635k (26 weeks ended 29
October 2023 credit (restated): £3,607k, 53 weeks ended 5 May 2024
tax charge: £541k). The effective tax rate on the total loss before
tax was 9.3% (26 weeks ended 29 October 2023 restated: 21.9%; 53
weeks ended 5 May 2024: 7.8%), the Adjusted tax rate was 9.7% (26
weeks ended 29 October 2023 restated: 24.6%, 53 weeks ended 5 May
2024: 17.0%).
The difference between the total
effective tax rate and the Adjusted tax rate relates to certain
costs and depreciation charges (including impairment) being
non-deductible for tax purposes.
10 Earnings per share
Basic earnings per share is
calculated by dividing the profit or loss for the period
attributable to ordinary shareholders by the weighted average
number of ordinary shares in issue during the period.
Diluted earnings per share uses
the weighted average number of shares in issue for the period,
adjusted for the dilutive effect of potential ordinary shares.
Potential ordinary shares represent employee share incentive
awards. In the event that there are losses per share, diluted EPS
is deemed to be the same as Basic EPS.
The Group has chosen to present an
Adjusted earnings per share measure, with profit adjusted for
Adjusting items (see Note 5 for further details) to reflect the
Group's underlying (loss) / profit for the Period.
|
|
|
|
|
3 November
2024
|
29
October 2023
(Restated - Note 15)
|
5 May
2024
|
|
Number
|
Number
|
Number
|
Number of shares in
issue
|
62,500,000
|
62,500,000
|
62,500,000
|
Number of dilutive share options
(nil in the event of a loss)
|
-
|
-
|
-
|
Number of shares for diluted earnings per
share
|
62,500,000
|
62,500,000
|
62,500,000
|
|
|
|
|
|
£000
|
£000
|
£000
|
(Loss) / profit for the financial
period
|
(6,218)
|
(12,894)
|
6,377
|
Adjusting items
|
316
|
5,018
|
(3,741)
|
Total Adjusted (loss) / profit for Adjusted earnings per
share
|
(5,902)
|
(7,876)
|
2,636
|
|
|
|
|
|
Pence
|
Pence
|
Pence
|
Basic (loss) / earnings per share
|
(9.9)
|
(20.6)
|
10.2
|
Diluted (loss) / earnings per share
|
(9.9)
|
(20,6)
|
10.2
|
Adjusted basic (loss) / earnings per share
|
(9.4)
|
(12.6)
|
4.2
|
Adjusted diluted (loss) / earnings per
share
|
(9.4)
|
(12.6)
|
4.2
|
11 Dividends
The Board has not recommended the
payment of a dividend in respect of FY25 interim results (FY24:
nil).
12 Intangible assets
|
Goodwill
|
Software
|
Total
|
|
£000
|
£000
|
£000
|
Cost
|
|
|
|
Balance at 5 May 2024
|
16,180
|
10,299
|
26,479
|
Additions
|
-
|
701
|
701
|
Disposals
|
-
|
(3)
|
(3)
|
Balance at 3 November 2024
|
16,180
|
10,997
|
27,177
|
Amortisation / Impairment
|
|
|
|
Balance at 5 May 2024
|
16,180
|
8,433
|
24,613
|
Amortisation charge
|
-
|
390
|
390
|
Impairment charge
|
-
|
-
|
-
|
Impairment reversal
|
-
|
-
|
-
|
Disposals
|
-
|
(3)
|
(3)
|
Balance at 3 November 2024
|
16,180
|
8,820
|
25,000
|
Net book value
|
|
|
|
At 5 May 2024
|
-
|
1,866
|
1,866
|
At 3 November 2024
|
-
|
2,177
|
2,177
|
13 Property, plant and
equipment
|
Leasehold
|
Plant
&
|
Fixtures
&
|
|
|
improvements
|
equipment
|
fittings
|
Total
|
|
£000
|
£000
|
£000
|
£000
|
Cost
|
|
|
|
|
Balance at 5 May 2024
|
5,818
|
3,763
|
19,072
|
28,653
|
Additions
|
(22)
|
332
|
1,159
|
1,469
|
Disposals
|
(115)
|
(23)
|
(368)
|
(506)
|
Balance at 3 November 2024
|
5,681
|
4,072
|
19,863
|
29,616
|
Depreciation and impairment
|
|
|
|
|
Balance at 5 May 2024
|
4,149
|
3,138
|
9,008
|
16,295
|
Depreciation charge
|
100
|
49
|
1,250
|
1,399
|
Impairment charges
|
-
|
-
|
-
|
-
|
Impairment reversals
|
-
|
-
|
-
|
-
|
Disposals
|
262
|
(20)
|
(256)
|
(14)
|
Balance at 3 November 2024
|
4,511
|
3,167
|
10,002
|
17,680
|
Net book value
|
|
|
|
|
At 5 May 2024
|
1,669
|
625
|
10,064
|
12,358
|
At 3 November 2024
|
1,170
|
905
|
9,861
|
11,936
|
Impairment of tangible and intangible
assets
The carrying amounts of the Group's
tangible and intangible assets with a measurable useful life are
reviewed at each balance sheet date if events or circumstances
indicate that the full carrying value may not be recoverable to
determine whether there is any indication of impairment to their
value. If such an indication exists, the asset's recoverable amount
is estimated and compared to its carrying value. Where the asset
does not generate cash flows that are independent from other
assets, the Group estimates the recoverable amount of the CGU to
which the asset belongs. The Directors consider an individual
retail store to be a cash generating unit (CGU), as well as the
Company's website.
The recoverable amount of an asset
is the greater of its fair value less disposal cost and its value
in use (the present value of the future cash flows that the asset
is expected to generate). In determining value in use, the present
value of future cash flows is discounted using a discount rate that
reflects current market assessments of the time value of money in
relation to the period of the investment and the risks specific to
the asset concerned.
The carrying value represents each
CGU's specific assets, as well as the IFRS 16 right-of-use asset,
plus an allocation of corporate assets where these assets can be
allocated on a reasonable and consistent basis.
Where the carrying value exceeds
the recoverable amount an impairment loss is established with a
charge being made to the income statement. When the reasons for a
write down no longer exist, the write down is reversed in
the income statement up to the net book value
that the relevant asset would have had if it had not been written
down and if it had been depreciated.
An impairment review was conducted
for the 53 weeks to 5 May 2024 for the Annual Report and Accounts
signed on 1 October 2024. All CGU's were reviewed for impairment.
An impairment charge or reversal of impairment recognised in prior
periods was recognised in the 53 weeks to 5 May 2024. The Directors
have reviewed the events and circumstances since 5 May 2024, and
the Group's Base Case plan and do not consider it to have changed
materially since the impairment review as at 5 May 2024 was
completed and have therefore concluded that no impairment trigger
has occurred.
As a result of no impairment
triggers being present, no impairment review was completed for the
the 26 weeks ended 3 November 2024, and therefore no impairment
charge or reversal was recognised. An impairment charge of £5,333k
was recognised for the 53 weeks ended 5 May 2024 against 184 stores
with a recoverable amount of £23,396k, and an impairment charge of
£591k was recognised against the trading website. An impairment
reversal of £6,742k was recognised for the 53 weeks ended 5 May
2024 relating to 135 stores with a recoverable amount of £33,537k.
In line with the previously adopted treatment, impairment charges
and reversals have been shown as Adjusting items.
14 Leases
Amounts recognised in the
statement of financial position
Right-of-use assets
|
|
|
|
3
November 2024
|
|
|
|
|
|
|
|
At 5 May 2024
|
57,309
|
394
|
57,703
|
Depreciation charge for the
year
|
(10,088)
|
(115)
|
(10,203)
|
Additions to right-of-use
assets
|
4,153
|
79
|
4,232
|
Effect of modifications to
right-of-use assets
|
8,031
|
-
|
8,031
|
Derecognition of right-of-use
assets
|
343
|
-
|
343
|
Impairment
charge1
|
-
|
-
|
-
|
|
|
|
|
|
|
|
|
1 The total impairment
charge/ reversal is in Adjusting items.
Lease liabilities
|
|
|
|
3
November 2024
|
|
|
|
|
|
|
|
At 5 May 2024
|
77,336
|
424
|
77,760
|
Additions to lease
liabilities
|
3,833
|
79
|
3,912
|
Interest expense
|
2,034
|
9
|
2,043
|
Effect of modifications to lease
liabilities
|
8,031
|
-
|
8,031
|
Lease payments
|
(12,322)
|
(123)
|
(12,445)
|
Disposals of lease
liabilities
|
(15)
|
-
|
(15)
|
Foreign exchange
movements
|
|
|
|
|
|
|
|
Carrying value of leases included
in the consolidated statement of financial position
15 Prior period restatements
The following adjustments were
identified when completing the FY24 full year financial statements,
and therefore adjustments have been made to the FY24 half year
comparatives.
Restatement of opening balances
As part of the review of IFRS 16
balances during the 53 weeks ended 5 May 2024, the Directors
identified adjustments to opening balances that were not required.
These balances related to previous adjustments to the residual rent
balance in the consolidated income statement following the IFRS 16
calculations.
These adjustments resulted in an
increase in the FY24 opening balances of £3,822k to the right of
use assets brought forward and £3,822k decrease to the lease
liability brought forward.
Adjustment to impairment, associated depreciation and profit
on disposal of right-of-use assets
There were a number of stores
where the lease had expired prior to the start of the FY24
financial period. The Group recognises a right-of-use asset and
lease liability for such stores where it is likely that a new lease
will be entered into, based on an estimate of the new lease terms,
prior to final agreement of terms with the landlord. During the 53
weeks ended 5 May 2024, the Directors considered the allocation of
impairment to these stores and concluded that impairment was
incorrectly calculated in light of the modification of the
lease. In the interim financial statements for the 26 weeks
ended 29 October 2023, adjustments were made to correct this which
have now been adjusted for as a prior period restatement in line
with disclosures made in the FY24 Annual Report and
Accounts.
A gain on modification of the
lease of £3,613k should have been recognised in the prior period,
with a corresponding increase to right of use assets of £3,613k. As
a result, the FY23 closing right-of-use asset balance has been
increased by £3,613k with a corresponding reduction to right-of-use
assets additions recognised in FY24 interim financial statements.
Gain on modification of £3,613k shown in the consolidated income
statement for 26 weeks ended 29 October 2023 has been reversed and
shown as an adjustment to opening retained earnings.
The FY23 closing right-of-use
asset has been decreased by £1,880k as a result of the reversal of
an impairment reversal of £1,603k, depreciation charge of £4,549k
and profit on disposal of right-of-use assets of £1,066k previously
recognised in the FY24 interim financial statements. The
corresponding adjustments have been made to the consolidated income
statement for the 26 weeks ended 29 October 2023, resulting in a
decrease to FY24 opening retained earnings of £1,732k.
Impact on cash flow statement
These adjustments increase the
'depreciation of property, plant and equipment', 'depreciation of
right of use assets' and 'amortisation of intangible assets'
balance in the consolidated cash flow statement, however there is
no overall impact on 'net increase in cash and cash
equivalents'.
Corporation tax restatement
The above adjustments have
resulted in restatements to the corporation tax charges, current
tax assets/ liabilities and the deferred tax asset. Refer to Note 9
for restated tax disclosures.
The following tables summarise the
impact of the above restatements on the Group's consolidated
financial statements including the impact of current and deferred
corporation tax.
Summarised consolidated
income statement
|
Per FY24 interim financial
statements
|
Right-of-use asset cost variance
|
Depreciation variance
|
Impairment charge variance
|
Profit on
disposal of right-of-use asset
|
FY24
interim
restated
balance
|
|
Income statement
|
|
|
|
|
|
|
|
Revenue
|
122,575
|
-
|
-
|
-
|
-
|
122,575
|
|
Cost of sales
|
(113,935)
|
(3,613)
|
4,549
|
(1,602)
|
(1,066)
|
(115,667)
|
|
Gross profit
|
8,640
|
(3,613)
|
4,549
|
(1,602)
|
(1,066)
|
6,908
|
|
Other operating income
|
4
|
-
|
-
|
|
-
|
4
|
|
Distribution expenses
|
(6,846)
|
-
|
-
|
-
|
-
|
(6,846)
|
|
Administrative expenses
|
(14,173)
|
-
|
-
|
-
|
-
|
(14,173)
|
|
Operating profit
|
(12,375)
|
(3,613)
|
4,549
|
(1,602)
|
(1,066)
|
(14,107)
|
|
Finance income
|
17
|
-
|
-
|
-
|
-
|
17
|
|
Finance expense
|
(2,411)
|
-
|
-
|
-
|
-
|
(2,411)
|
|
Profit before tax
Taxation
|
(14,769)
3,757
|
(3,613)
-
|
4,549
(29)
|
(1,602)
-
|
(1,066)
(121)
|
(16,501)
3,607
|
|
|
Profit after tax
|
(11,012)
|
(3,613)
|
4,520
|
(1,602)
|
(1,187)
|
(12,894)
|
|
Summarised consolidated
statement of financial position
|
Per FY24 interim financial
statements
|
Right-of-use asset cost variance
|
Depreciation variance
|
Impairment charge variance
|
Profit on
disposal of right-of-use asset
|
IFRS 16
adjustment
|
FY24
interim
restated
balance
|
Non-current assets
|
|
|
|
|
|
|
|
Intangible assets
|
1,583
|
-
|
-
|
-
|
-
|
-
|
1,583
|
Property, plant and
equipment
|
9,426
|
-
|
-
|
30
|
-
|
-
|
9,456
|
Right of use assets
|
57,602
|
-
|
-
|
-
|
-
|
(3,823)
|
53,779
|
Other non-current Assets
|
8,087
|
-
|
-
|
-
|
-
|
-
|
8,087
|
|
76,698
|
-
|
-
|
30
|
-
|
(3,823)
|
72,905
|
Current assets
|
70,270
|
-
|
(29)
|
-
|
(121)
|
-
|
70,120
|
Total assets
Liabilities
|
146,968
|
-
|
(29)
|
30
|
(121)
|
(3,823)
|
143,025
|
Current lease
liabilities
|
(22,110)
|
-
|
-
|
-
|
-
|
3,823
|
(18,287)
|
Other current
liabilities
|
(65,388)
|
-
|
-
|
-
|
-
|
-
|
(65,388)
|
Non-current lease
liabilities
|
(66,713)
|
-
|
-
|
-
|
-
|
|
(66,713)
|
Other non-current lease
liabilities
|
(893)
|
-
|
-
|
-
|
-
|
-
|
(893)
|
Total liabilities
|
(155,104)
|
-
|
-
|
-
|
-
|
3,823
|
(151,281)
|
Net liabilities
|
(8,136)
|
-
|
(29)
|
30
|
(121)
|
-
|
(8,256)
|
Equity attributable to equity holders of the
Parent
|
|
|
|
|
|
|
|
Retained earnings
|
(29,688)
|
3,612
|
(4,549)
|
1,633
|
1,066
|
-
|
(27,926)
|
Retained earnings in
year
|
(11,158)
|
(3,612)
|
4,520
|
(1,603)
|
(1,187)
|
-
|
(13,040)
|
Other reserves
|
32,710
|
-
|
-
|
-
|
-
|
-
|
32,710
|
Total equity
|
(8,136)
|
-
|
(29)
|
30
|
(121)
|
-
|
(8,256)
|
Summarised consolidated
statement of changes in equity
|
|
|
|
Share-based
payment
reserve
£000
|
|
|
|
Reported balance at 30 April 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restated balance at 30 April 2023
|
|
|
|
|
|
|
|
16 Inventory
|
3 November
2024
|
29
October 2023
|
5 May
2024
|
|
£000
|
£000
|
£000
|
Goods for resale
|
42,859
|
50,530
|
28,401
|
Less: stock provisions for
shrinkage and obsolescence
|
(2,450)
|
(1,682)
|
(1,932)
|
Goods for resale net of provisions
|
40,409
|
48,848
|
26,469
|
Stock in transit
|
11,312
|
7,270
|
4,885
|
Inventory
|
51,721
|
56,118
|
31,354
|
A provision of £2.5m for stock
obsolescence and shrinkage is included in the balance sheet at the
Period end (29 October 2023: £1.7m, 5 May 2024: £1.9m). The
provision is an estimate, which is based on stock ageing and
historical trends and is reviewed by management during the
year.
17 Borrowings and cash
|
3 November
2024
|
29
October 2023
(Restated - Note 15)
|
5 May
2024
|
|
£000
|
£000
|
£000
|
Non-current liabilities
|
|
|
|
Lease liabilities
|
58,716
|
66,713
|
57,817
|
Non-current liabilities
|
58,716
|
66,713
|
57,817
|
Current liabilities
|
|
|
|
Revolving credit facility
(RCF)
|
9,000
|
5,000
|
-
|
Lease liabilities
|
20,580
|
18,287
|
19,943
|
Current liabilities
|
29,580
|
23,287
|
19,943
|
The Group's bank facilities
comprise an RCF of £20.0m expiring 30 November 2026. The facility
includes financial covenants in relation to the level of net debt
to LTM EBITDA and 'Fixed Charge Cover' or ratio of LTM EBITDA prior
to deducting rent and interest, to LTM rent and
interest.
None of the Group's cash and cash
equivalents (FY24: £Nil) is held by the trustee of the Group's
employee benefit trust in relation to the share schemes for
employees.
Net debt reconciliation
|
|
3 November
2024
|
29
October 2023
(Restated - Note 15)
|
5 May
2024
|
|
|
£000
|
£000
|
£000
|
Net debt (excluding unamortised debt costs)
|
|
|
|
|
RCF
|
|
9,000
|
5,000
|
-
|
Cash and cash
equivalents
|
|
(522)
|
(2,458)
|
(1,619)
|
Net debt / (cash) at bank
|
|
8,478
|
2,542
|
(1,619)
|
Non IFRS 16 lease
liabilities
|
|
11
|
139
|
89
|
Non IFRS 16 net debt / (cash)
|
|
8,489
|
2,681
|
(1,530)
|
IFRS 16 lease
liabilities
|
|
79,296
|
85,000
|
77,760
|
Net debt including IFRS 16 lease
liabilities
|
|
87,785
|
87,681
|
76,230
|
18 Provisions
|
HMRC VAT
Provision
|
Property
|
Total
|
|
£000
|
£000
|
£000
|
Balance at 5 May 2024
|
147
|
872
|
1,019
|
Provisions made during the
period
|
-
|
158
|
158
|
Provisions used during the
period
|
-
|
(240)
|
(240)
|
Provisions released during the
period
|
-
|
-
|
-
|
Balance as at 3 November 2024
|
147
|
790
|
937
|
Maturity analysis of cash flows:
|
HMRC VAT
Provision
|
Property
|
Total
|
|
£000
|
£000
|
£000
|
Due in less than one
year
|
147
|
156
|
303
|
Due between one and five
years
|
-
|
634
|
634
|
Due in more than five
years
|
-
|
-
|
-
|
Total
|
147
|
790
|
937
|
Property provision
(a) A dilapidation
provision is recognised when there is a future obligation relating
to the maintenance of leasehold property. The provision is based on
management's best estimate of the obligation which forms part of
the Group's unavoidable cost of meeting its obligations under the
lease contracts. Key uncertainties are estimates of amounts
due.
(b) HMRC VAT provision
(c) HMRC initiated a
VAT review in August 2022 in respect of a four-year period (FY19 to
FY22). The review is ongoing and therefore a provision of £147k
(FY24: £147k) is recognised in respect of the potential
liability.
19 Share Capital
As at 3 November 2024, 29 October
2023 and 5 May 2024 the company had the following share
capital:
|
£000
|
Share capital
|
625
|
Share premium
|
28,322
|
20 Financial Instruments
The following table details the
Group's expected maturities for its financial liabilities based on
the undiscounted contractual maturities of the financial
liabilities, including interest that will be payable.
|
Within 1
year
|
2-5 years
|
5+ years
|
Total
|
Contractual maturity of financial
liabilities
|
£000
|
£000
|
£000
|
£000
|
3
November 2024
|
|
|
|
|
Non Derivative
|
|
|
|
|
Interest bearing
|
9,000
|
-
|
-
|
9,000
|
Non-interest bearing
|
46,966
|
634
|
-
|
47,600
|
Undiscounted lease
liabilities
|
23,753
|
51,165
|
16,953
|
91,871
|
Derivative
|
|
|
|
|
Forward currency
contracts
|
605
|
-
|
-
|
605
|
|
80,324
|
51,799
|
16,953
|
149,076
|
|
|
|
|
|
29 October 2023
|
|
|
|
|
Non Derivative
|
|
|
|
|
Interest bearing
|
5,000
|
-
|
-
|
5,000
|
Non-interest bearing
|
65,532
|
893
|
-
|
66,425
|
Undiscounted lease liabilities
(restated - Note 15)
|
21,915
|
55,977
|
20,666
|
98,558
|
Derivative
|
|
|
|
|
Forward currency
contracts
|
84
|
-
|
-
|
84
|
|
92,531
|
56,870
|
20,666
|
170,067
|
5
May 2024
|
|
|
|
|
Non Derivative
|
|
|
|
|
Interest bearing
|
-
|
-
|
-
|
-
|
Non-interest bearing
|
27,214
|
-
|
-
|
27,214
|
Undiscounted lease
liabilities
|
23,446
|
49,067
|
17,632
|
90,145
|
Derivative
|
|
|
|
|
Forward currency
contracts
|
64
|
-
|
-
|
64
|
|
50,724
|
49,067
|
17,632
|
117,423
|
Fair value measurements
Financial instruments carried at
fair value are measured by reference to the following fair value
hierarchy, based on the extent to which the fair value is
observable;
· Level
1 fair value measurements are derived from quoted prices
(unadjusted) in active markets for identical assets or
liabilities;
· Level
2 fair value measurements are derived from inputs other than quoted
prices included within Level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly (i.e.
derived from prices); and
· Level
3 fair value measurements are those derived from valuation
techniques that include inputs for the asset or liability that are
not based on observable market data (unobservable
inputs).
Derivative financial instruments
are carried at fair value under a Level 2 valuation method. All
other financial instruments carried at fair value are measured
using the Level 1 valuation method.
There were no transfers between
the levels during the current or prior period.
Derivative Financial Instruments
The fair value of derivative
financial instruments at the Balance Sheet date is as
follows:
|
3 November
2024
|
29
October 2023
|
5 May
2024
|
|
£000
|
£000
|
£000
|
Net Derivative Financial Instruments
|
|
|
|
Foreign exchange
contracts
|
(515)
|
1,050
|
242
|
Classification of financial instruments
The tables below show the
classification of financial assets and liabilities as at 3 November
2024. The fair values of financial instruments have been assessed
to be approximately equivalent to their carrying values.
|
|
Financial
|
|
|
Cash flow
|
assets at
|
Other
|
|
hedging
|
amortised
|
financial
|
|
instruments
|
cost
|
liabilities
|
|
£000
|
£000
|
£000
|
Financial assets measured at fair value
|
|
|
|
Derivative financial
instruments
|
90
|
-
|
-
|
Financial assets not measured at fair value
|
|
|
|
Trade and other
receivables
|
-
|
11,980
|
-
|
Cash and cash
equivalents
|
-
|
522
|
-
|
Financial liabilities measured at fair
value
|
|
|
|
Derivative financial
instruments
|
(605)
|
-
|
-
|
Financial liabilities not measured at fair
value
|
|
|
|
Unsecured bank loans
|
-
|
-
|
(9,000)
|
Lease liabilities
|
-
|
-
|
(79,296)
|
Trade and other
payables
|
-
|
-
|
(51,712)
|
As at 3 November 2024
|
(515)
|
12,502
|
(140,008)
|
|
|
|
|
|
|
Financial
|
|
|
Cash flow
|
assets at
|
Other
|
|
hedging
|
amortised
|
financial
|
|
instruments
|
cost
|
liabilities
|
|
£000
|
£000
|
£000
|
Financial assets measured at fair value
|
|
|
|
Derivative financial
instruments
|
1,134
|
-
|
-
|
Financial assets not measured at fair value
|
|
|
|
Trade and other
receivables
|
-
|
9,390
|
-
|
Cash and cash
equivalents
|
-
|
2,458
|
-
|
Financial liabilities not measured at fair
value
|
|
|
|
Unsecured bank loans
|
(84)
|
-
|
(5,000)
|
Lease liabilities
|
|
|
(85,000)
|
Trade and other
payables
|
-
|
-
|
(60,028)
|
As at 29 October 2023
|
1,050
|
11,848
|
(150,028)
|
|
Cash
flow
|
Financial
|
Other
|
|
hedging
|
assets
at
|
Financial
|
|
instruments
|
amortised cost
|
Liabilities
|
|
£000
|
£000
|
£000
|
Financial assets measured at fair value
|
|
|
|
Derivative financial
instruments
|
306
|
-
|
-
|
Financial assets not measured at fair value
|
|
|
|
Trade and other
receivables
|
-
|
8,384
|
-
|
Cash and cash
equivalents
|
-
|
1,619
|
-
|
Financial liabilities measured at fair
value
|
|
|
|
Derivative financial
instruments
|
(64)
|
-
|
-
|
Financial liabilities not measured at fair
value
|
|
|
|
Lease liabilities
|
-
|
-
|
(77,760)
|
Trade and other
payables
|
-
|
-
|
(29,886)
|
As at 5 May 2024
|
242
|
10,003
|
(107,646)
|
21 Related parties
Identity of related parties with which the Group has
transacted
Balances and transactions between
the Company and its subsidiaries, which are related parties, have
been eliminated on consolidation and are not disclosed in this
note. There were no transactions with related parties who are not
members of the Group during the financial period.
22 Contingent liabilities
There were no contingent liabilities noted at the end of the
Period.
By Order of the Board
Rosie
Fordham
Chief Financial
Officer
24 January 2025
Principal risks and uncertainties
There are a number of risks and
uncertainties which could have a material negative impact on the
Group's performance over the remainder of the current financial
year. These could cause actual results to differ materially from
historical or expected results. The Board does not believe that
these risks and uncertainties are materially different to those
published in the Group's Annual Report for the period ended 5 May
2024.
These risks are associated
with:
1. Economy
and market
2. Design
and execution of strategy
3. Supply
chain
4. IT
systems and cyber security
5. Brand
and reputation
6.
Seasonality of sales
7.
People
8.
Environmental (including climate change)
9.
Regulation and compliance
10. Liquidity
11. Business
continuity
Detailed explanations of these
risks are set out on pages 38 to 43 of the FY24 Annual Report which
is available at
https://corporate.theworks.co.uk/application/files/9417/2833/3328/TheWorks.co.uk_plc_Annual_Report_and_Accounts_2024.pdf