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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Shoe Zone Plc | LSE:SHOE | London | Ordinary Share | GB00BLTVCF91 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 205.00 | 200.00 | 210.00 | 205.00 | 205.00 | 205.00 | 38,369 | 08:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Footwear-wholesale | 165.66M | 13.22M | 0.2860 | 7.17 | 94.77M |
TIDMSHOE
RNS Number : 7147Q
Shoe Zone PLC
23 June 2020
23 June 2020
Shoe Zone plc
Interim Results
Shoe Zone plc ("Shoe Zone", the "Company" or the "Group") is pleased to announce its Interim Results for the six months to 4 April 2020.
Financial Update
-- Revenue of GBP68.9m (2019 H1: GBP73.0m) -- Year to February revenue growth of 2.6% -- Statutory profit before tax of GBP(2.5)m (2019 H1: GBP1.0m)
-- Net cash of GBP3.6m (2019 H1: GBP3.3m) inclusive of the immediate measures taken to maintain cash balances at the end of March.
-- Statutory earnings per share of (4.1)p (2019 H1: 1.65p) -- No interim dividend to be paid (2019 H1: 3.5p per share)
-- Operating from 47 Big Box locations at period end contributing GBP9.4m (2019: GBP5.5m) revenue in H1
-- Digital sales increased by 31.9% to GBP6.5m (2019 H1: GBP5.0m) achieving profit contribution of GBP1.9m (2019 H1: GBP1.5m)
-- Over 1.4 million engaged users on Shoezone.com database
COVID-19 Update
-- All retail stores closed on 24 March 2020.
-- 416 stores in England, Northern Ireland and ROI re-opened by 15 June 2020 in line with the government guidelines.
-- Wales will open on 28 June and Scotland will start to open on 29 June. -- Digital team and the Distribution Centre continued to operate throughout
-- Immediate action was taken to reduce cash outflows including negotiations with landlords and suppliers, cancellation of final dividend, furloughing the majority of employees and utilising government tax deferment schemes.
-- CBILS loan of GBP15m secured of which GBP10m has been drawn down to date.
-- Additional financial impacts post the balance sheet date not included in the Interim Results are GBP0.9m write down of Freehold Asset values and GBP0.3m redundancy costs incurred as a result of a Head Office rationalisation programme. The total impact of these is GBP1.2m.
-- A review of the viability of all stores continues post exit from lockdown.
The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via regulatory news service this inside information is now considered to be in the public domain.
For further information, please call:
Shoe Zone plc Tel: via 0116 222 Anthony Smith (Chief Executive) 3000 Jonathan Fearn (Chief Financial Officer) Finncap (Nominated Advisor and Broker) Tel: +44 (0)20 7220 Matt Goode (Corporate Finance) 0500 Hannah Boros (Corporate Finance) Alice Lane (ECM)
Chief Executive's Statement
Introduction
The Group operates from a portfolio of around 470 stores and a comprehensive digital proposition enabling it to provide a truly multi-channel shopping experience to its customers.
Financial Summary
In the six months to 4 April 2020, the Group generated revenues of GBP68.9m (2019 H1: GBP73.0m) and Profit before Tax of GBP(2.7)m (2019 H1: GBP1.0m) on a pre-IFRS 16 basis. The implementation of IFRS16 during the period has increased Statutory Profit before Tax by GBP0.2m resulting in Statutory Profit before Tax of GBP(2.5)m. A reconciliation of the Income statement is shown below:
Pre-IFRS16 Impact Statutory of IFRS16 Profit GBP'000 GBP'000 GBP'000 Revenue 68,944 - 68,944 Cost of sales (61,554) 292 (61,262) ---------- ---------- --------- Gross profit 7,390 292 7,682 Administration & Distribution Costs (9,999) 799 (9,200) Profit from operations (2,609) 1,091 (1,518) Financing costs (77) (933) (1,010) Profit before taxation (2,686) 158 (2,528) Taxation 510 (30) 480 ---------- ---------- --------- Profit attributable to equity holders of the parent (2,176) 128 (2,048) ========== ========== =========
The reduction in revenue and profit performance over prior year reflects the early impact of COVID-19. During the period we experienced both disruption in the supply chain and a fall in consumer spending in March resulting in the subsequent closure of retail stores from the 24(th) March 2020. Prior to this, the five months to February showed a year on year increase in revenue of 2.6%.
The group ended the period with net cash balance of GBP3.6m (2019: GBP3.3m). This increase in cash balance has only been achieved through the emergency measures put in place during March to restrict cash outflows. These include cancelation of the 2019 final dividend (GBP4m), management of payments to suppliers and engagement with landlords to delay and renegotiate monthly and quarterly rents. Capital expenditure for the period was GBP2.2m compared to GBP3.2m prior year. Management continues to monitor all costs closely and these remain tightly controlled.
Dividend
Cash conservation continues to be the focus for the business as we emerge from lockdown and therefore no interim dividend will be paid (2019 H1: 3.5p per share). On 29 April 2020, the Group announced the cancellation of its previous dividend policy.
Strategy Update
At the beginning of 2020 we announced an updated strategy to focus on Big Box expansion; Digital growth and Town Centre renewal. We also announced a renewed focus on streamlining business processes and reducing Head Office costs.
The company has made good progress in all of these areas in H1 2020:
-- We ended the period with 47 Big Box stores, (2019: 26 stores) an increase in store numbers of 81%. The Big Box portfolio generated GBP9.4m (2019: GBP5.5m) of total turnover for the first six months. One store was converted from High Street to Hybrid format in the period.
-- Digital has returned to strong growth showing revenue growth of 31.9% to GBP6.5m (2019: GBP5.0m). Contribution has grown by 17.7% to GBP1.7m (2019 H1: GBP1.5m). Email collections and active database growth continues to be a key lever in digital performance. As at the period end, the database had 1,444,000 active users (2019: 501,000), an increase of 188%.
-- Overall store numbers were 490 (2019: 495) at period end.
-- Immediate action has been taken to review and streamline the Head Office functions and the new rationalised structure is now in place.
COVID-19 Update and Outlook
Following closure of all our stores on 24 March 2020, we continued to sell via our website, www.shoezone.com and via other online partners. Digital performance has delivered high sales growth since lock down increasing from around 6.5% of total company sales to 17% of previously forecasted sales for the lockdown period. This has been driven by a very aggressive Buy One Get One Free (BOGOF) promotion on all stock to generate cash as quickly as possible. Although this has been now been amended to BOGOF on selected lines only it continues to have a significant impact on ongoing digital gross margin levels.
We opened all England, Northern Ireland and the Republic of Ireland stores by the 15 June and the Welsh and Scottish stores will open as soon as government guidance allows. We have implemented all published COVID-19 guidelines in stores and head office to ensure the safety of our colleagues and customers. This includes Perspex screens being retrofitted to tills, distance markings on the floor and limits on the number of customers dependent on store size.
COVID-19 will continue to have an unprecedented impact on the UK economy and the retail industry. Whilst the group has taken all possible steps to ensure that the business will survive through the crisis and continue into the future, the impact is likely to continue to be felt for several years.
As a result of this and following an extensive review of the store portfolio Shoe Zone has closed an additional 20 stores during lockdown and will only open 470 when permitted. The Group has also taken immediate action to reduce costs at Head Office and pause all areas of discretionary spend. Negotiations with landlords have also been accelerated and supplier orders reduced, cancelled or deferred as far as possible.
The Head Office rationalisation programme has meant an additional GBP0.3m has been incurred in redundancy payments after the balance sheet date. We have also undertaken a review of freehold values held resulting in a write down of GBP0.9m, giving an additional COVID-19 impact, not included in the first half results of GBP1.2m.
Cash remains the key focus for the business and as stated on the 29 April 2020, the immediate focus will be on rebuilding cash balances to a higher level than previously carried and repaying the debt taken on as part of the CBILS scheme whilst fulfilling other statutory obligations. The Board remain confident that the Group's current level of funding will be sufficient to secure the future of the business, assuming that sales return to a high proportion of previous sales during the next year.
The Board would like to thank all of the Shoe Zone team and its business partners for their hard work and support in the first half of the financial year and during the current COVID-19 period.
Unaudited consolidated income statement
Note 26 weeks 26 weeks 53 weeks ended 4 ended 30 ended 5 April March October 2020 2019 2019 IFRS16 IAS17 IAS17 GBP'000 GBP'000 GBP'000 Revenue 2 68,944 72,995 162,047 Cost of sales (61,262) (63,453) (136,965) -------- --------- --------- Gross profit 7,682 9,542 25,082 Administration expenses (6,273) (5,508) (12,081) Distribution costs (2,927) (2,987) (6,154) -------- Profit from operations (1,518) 1,047 6,847 Finance income (1) 56 44 Finance expense (1,009) (87) (192) -------- --------- --------- Profit before taxation (2,528) 1,016 6,699 Taxation 4 480 (193) (985) -------- --------- --------- Profit attributable to equity holders of the parent 5 (2,048) 823 5,714 ======== ========= ========= Earnings per share - basic and diluted 5(4.1)p 1.65p 11.43p ====== ============= ======
Unaudited consolidated statement of total comprehensive income
26 weeks ended 4 April 26 weeks ended 30 March 53 weeks 2020 2019 ended 5 October 2019 GBP'000 GBP'000 GBP'000 Profit for the period (2,048) 823 5,714 ---------------------- ----------------------- ---------------- Items that will not be reclassified subsequently to the income statement Remeasurement gains and losses on defined benefit pension scheme (642) (611) (4,177) Movement in deferred tax on pension schemes 94 340 707 IFRS 16 Opening balances (3,242) - - Cash flow hedges Fair value movements in other comprehensive income (2,431) (4,082) (826) Cash flow hedges recognised in inventories 2,868 1,930 1,474 Tax on cash flow hedges (74) 180 (126) ---------------------- Other comprehensive (expense) / income for the period (3,427) (2,243) (2,948) ---------------------- ----------------------- ---------------- Total comprehensive (expense) / income for the period attributable to equity holders of the parent (5,475) (1,420) 2,766 ====================== ======================= ================
Unaudited consolidated statement of financial position
Notes 26 weeks 26 weeks 53 weeks ended 04 ended 30 ended April March 5 October 2020 2019 2019 GBP'000 GBP'000 GBP'000 Assets Non-current assets Property, plant and equipment 22,669 22,762 22,143 Right of use assets 53,456 - - Deferred tax asset 1,597 736 1,677 --------- --------- ---------- Total non-current assets 77,722 23,498 23,820 --------- --------- ---------- Current assets Inventories 25,727 27,576 28,511 Trade and other receivables 4,978 5,775 6,078 Derivative financial assets 3 2,751 1,500 2,726 Corporation tax asset - - - Cash and cash equivalents 3,571 3,311 11,417 --------- --------- ---------- Total current assets 37,027 38,162 48,732 --------- --------- ---------- Total assets 114,749 61,660 72,552 --------- --------- ---------- Current liabilities Trade and other payables (31,167) (21,988) (27,429) Provisions for liabilities and charges (573) (268) (715) Derivative financial liability 3 - - - Corporation tax liability - (118) (440) Total current liabilities (31,740) (22,374) (28,584) --------- --------- ---------- Non-current liabilities Trade and other payables (46,521) (1,913) (2,432) Provisions for liabilities and charges (581) (420) (370) Employee benefit liability (9,952) (7,959) (9,736) Total non-current liabilities (57,054) (10,292) (12,538) Total liabilities (88,794) (32,666) (41,122) --------- --------- ---------- Net assets 25,955 28,994 31,430 ========= ========= ========== Equity attributable to equity holders of the company Called up share capital 500 500 500 Share premium reserve 2,662 2,662 2,662 Cash flow hedge reserve 2,008 882 1,645 Retained earnings 20,785 24,950 26,623 --------- --------- ---------- Total equity and reserves 25,955 28,994 31,430 ========= ========= ==========
Unaudited consolidated statement of changes in equity
Share Share Cash Retained Total capital premium flow earnings hedge reserve GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 At 29 September 2018 500 2,662 1,123 34,129 38,414 Profit for the period - - - 823 823 Defined benefit pension movements - - - (611) (611) Cash flow hedge movements - - (421) - (421) Deferred tax on other comprehensive income - - 180 (1,391) (1,211) ----------- ---------------- ---------------- --------- ------- Total comprehensive income for the period - - (241) (1,179) (1,420) ----------- ---------------- ---------------- --------- ------- Dividends paid during the period - - - (8,000) (8,000)
----------- ---------------- ---------------- --------- ------- Total contributions by and distributions to owners - - - (8,000) (8,000) ----------- ---------------- ---------------- --------- ------- At 30 March 2019 500 2,662 882 24,950 28,994 ----------- ---------------- ---------------- --------- ------- At 29 September 2018 500 2,662 1,123 34,129 38,414 Profit for the period - - - 5,714 5,714 Defined benefit pension movements - - - (4,177) (4,177) Cash flow hedge movements - - 648 - 648 Deferred tax on other comprehensive income - - (126) 707 581 ----------- ---------------- ---------------- --------- ------- Total comprehensive income for the period - - 522 2,244 2,766 ----------- ---------------- ---------------- --------- ------- Dividends paid during the period - - - (9,750) (9,750) ----------- ---------------- ---------------- --------- ------- Total contributions by and distributions to owners - - - (9,750) (9,750) ----------- ---------------- ---------------- --------- ------- At 5 October 2019 500 2,662 1,645 26,623 31,430 ----------- ---------------- ---------------- --------- ------- Profit for the period - - - (2,048) (2,048) Defined benefit pension movements - - - (642) (642) Cash flow hedge movements - - 437 - 437 Right of use assets opening movement - - - (3,242) (3,242) Deferred tax on other comprehensive income - - (74) 94 20 ----------- ---------------- ---------------- --------- ------- Total comprehensive income for the period - - 363 (5,838) (5,475) ----------- ---------------- ---------------- --------- ------- Dividends paid during the - - - - - period ----------- ---------------- ---------------- --------- ------- Total contributions by and - - - - - distributions to owners ----------- ---------------- ---------------- --------- ------- At 4 April 2020 500 2,662 2,008 20,785 25,955 =========== ================ ================ ========= =======
Unaudited consolidated statement of cash flows
26 weeks 26 weeks 53 weeks ended 4 ended 30 ended 5 April March October 2020 2019 2019 GBP'000 GBP'000 GBP'000 Operating activities Profit after taxation (2,048) 823 5,714 Corporation tax (480) 193 985 Finance income (8) (56) (44) Finance expense 1,018 87 192 Depreciation of property, plant and equipment 1,573 1,473 3,258 Fixed asset impairment and loss on disposal of property, plant and equipment 66 31 3,034 Amortisation of right of use assets 9,722 - - Pension contributions paid (417) (415) (890) 9,426 2,136 12,249 Decrease / (increase) in trade and other receivables 1,324 430 157 Increase in foreign exchange contract - - 30 (Increase) / decrease in inventories 3,196 (239) (1,451) (Decrease) / increase in trade and other payables (17,857) (3,011) 3,150 Increase in provisions 110 131 83 -------- --------- -------- (13,227) (2,689) 1,969 Cash generated from operations (3,802) (553) 14,218 Income taxes paid (1,888) (627) (1,488) -------- --------- -------- Net cash flows from operating activities (5,689) (1,180) 12,730 -------- --------- -------- Investing activities Purchase of property, plant and equipment (2,165) (3,248) (7,290) Sale of property, plant and equipment - - - Interest received 8 56 44 -------- --------- -------- Net cash used in investing activities (2,157) (3,192) (7,246) -------- --------- -------- Financing activities Dividends paid during the year 0 (8,000) (9,750) Net cash used in financing activities 0 (8,000) (9,750) -------- --------- -------- Net decrease in cash and cash equivalents (7,846) (12,372) (4,266) Cash and cash equivalents at beginning of period 11,417 15,683 15,683 -------- --------- -------- Cash and cash equivalents at end of period 3,571 3,311 11,417 ======== ========= ========
Notes to the financial statements for the 26 weeks ended 4 April 2020
Basis of preparation
The consolidated interim financial statements of the Group for the 26 weeks ended 4 April 2020, which are unaudited, have been prepared in accordance with the same accounting policies, presentation and methods of computation followed in the condensed set of financial statements as applied in the group's latest annual audited financial statements. A copy of those accounts has been delivered to the Registrar of Companies.
The financial information for the 26 weeks ended 4 April 2020, contained in this interim report, does not constitute the full statutory accounts for that period. The Independent Auditors' Report on the Annual Report and Financial Statements for 2019 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.
The consolidated interim financial statements have neither been audited nor reviewed pursuant to guidance issued by the Auditing Practices Board.
The condensed consolidated interim financial statements have been prepared on a going concern basis and under the historical cost convention, as modified by the revaluation of derivative financial instruments to fair value.
The condensed consolidated interim financial statements are presented in sterling and have been rounded to the nearest thousand (GBP'000).
The preparation of financial information in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual events ultimately may differ from those estimates.
1. Accounting policies
In preparing these interim financial statements, the significant judgements made by management in applying the group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements reported in the latest annual audited financial statements for the 53 weeks ended 5 October 2019.
Going Concern
At the balance sheet date the company had a good cash balance and a strong net current asset position. At the time of signing these accounts, the directors have considered the effect of the Coronavirus on the going concern position, and consider that this does indicate that the company will continue to trade for a period of at least 12 months from the date of publishing these accounts due to the banking facilities available to it and the UK Government support available to businesses during this difficult time.
The financial forecasts prepared by the Directors show that the company will be able to operate within the facilities available to it.
On that basis, the directors have prepared these financial statements on a going concern basis.
Events after the period end
Subsequent to the period end, the Coronavirus pandemic has resulted in a long period of lockdown and closure of non-essential retail. At this stage the directors continue to assess the impact this may have on the company and although there is a high level of uncertainty about the extent and the timeframe of the virus on the global economy, they believe the company is strongly positioned to handle any downturn that may occur in the retail sector.
To date, the directors have undertaken a review of Freehold values held on the balance sheet resulting in a reduction of carrying value from GBP4.7m to GBP3.8m. This write down of GBP0.9m will be included in the full year results.
The head office rationalisation programme has resulted in redundancy payments of GBP0.3m paid post balance sheet. Again these will be included in the full year results. A review of the viability of all stores continues post exit from lockdown.
2. Segmental information
The group complies with IFRS 8 'Operating Segments', which determines and presents operating segments based on information provided to the chief operating decision-maker. The chief decision maker has been identified as the management team including the Chief Executive Officer and Chief Financial Officer. The Board considers that each store is an operating segment but there is only one reporting segment as the stores qualify for aggregation, as defined under IFRS 8.
04 30 05 April March October 2020 2019 2019 GBP'000 GBP'000 GBP'000 External revenue by location of customers: United Kingdom 67,342 71,257 158,209 Republic of Ireland 1,602 1,738 3,517 Other - - 321 ------- ------- -------- 68,944 72,995 162,047 ======= ======= ========
There are no customers with turnover in excess of 10% of total turnover
04 30 05 April March October 2020 2019 2019 GBP'000 GBP'000 GBP'000 Non-current assets by location: United Kingdom 22,650 22,744 22,124 Other 19 18 19 ------- ------- -------- 22,669 22,762 22,143 ======= ======= ========
Notes to the financial statements for the 26 weeks ended 4 April 2020 (continued)
3. Derivative financial instruments
At the balance sheet date, details of the forward foreign exchange contracts that the group has committed to are as follows:
04 30 05 April March October 2020 2019 2019 GBP'000 GBP'000 GBP'000 Derivative financial assets Derivatives not designated as hedging instruments 332 437 744 Derivatives designated as hedging instruments 2,419 1,063 1,982 ------- ------- -------- 2,751 1,500 2,726 ======= ======= ======== 4. Taxation
The taxation charge for the 26 weeks ended 04 April 2020 is based on the estimated effective tax rate for the full year of 19% (2019:19%).
5. Earnings per share 04 30 05 April March October 2020 2019 2019 GBP'000 GBP'000 GBP'000 Profit for the period and earnings used in basic and diluted earnings per share (2,048) 823 5,714 Earnings per share - basic and diluted (4.1)p 1.65p 11.43p ======= ======= ========
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR EAXKAASSEEFA
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June 23, 2020 02:00 ET (06:00 GMT)
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