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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 | |
---|---|---|---|---|---|---|---|---|---|---|
13.00 | 7.34% | 190.00 | 185.00 | 195.00 | 190.00 | 177.50 | 177.50 | 98,958 | 09:56:05 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Footwear-wholesale | 165.66M | 13.22M | 0.2860 | 6.64 | 87.83M |
TIDMSHOE
RNS Number : 9084Y
Shoe Zone PLC
18 May 2021
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the company's obligations under Article 17 of MAR. Upon the publication of this announcement via regulatory news service this inside information is now considered to be in the public domain.
SHOE ZONE PLC
INTERIM RESULTS
Shoe Zone PLC ("Shoe Zone", the "Company") is pleased to announce its interim results for the six months to 3 April 2021. (the "Period")
Financial Update
-- Revenue of GBP40.4m (2020 H1: GBP68.9m)
o Store revenue GBP22.8m (2020 H1: GBP63.3m)
o Digital revenue GBP17.6m (2020 H1: GBP5.5m)
o Digital contribution of GBP5.3m (2020 H1: GBP1.9m)
o Digital conversion rate 6.43% (2020 H1: 3.47%)
o Over 1.0 million engaged users in shoezone.com database
-- Statutory loss before tax GBP(2.6)m (2020 H1: GBP(2.5)m as a result of tight cost control and increase in digital.
-- Statutory earnings per share (4.2)p (2020 H1: (4.1)p) -- Net cash balance of GBP4.1m (2020 H1: GBP3.6m) -- No interim dividend to be paid (2020 H1: no dividend)
Business and COVID-19 Update
-- All stores closed for a minimum of 16 weeks in the Period -- Digital and Warehouse teams operated throughout the lockdowns -- Supply chain disruption due to container shortages and Ever Given/Suez Canal issues
-- Continual cash preservation action taken throughout the period resulting in net cash of GBP4.1m at the end of the Period
-- Ongoing negotiations with Landlords and suppliers
-- Majority of staff furloughed and we have used the Government business support schemes including grants, rates and VAT
-- CLBILS loan of GBP15m in place and drawn down. GBP4.6m repaid
-- Store numbers are 422 having reduced by 38 in the period. A full review of individual store viability will now continue
-- Exit from the Republic of Ireland with all stores and shoezone.ie now closed
For further information please call:
Shoe Zone PLC Tel: via 0116 222 3000
Anthony Smith (Chief Executive)
Terry Boot (Finance Director)
Finncap (Nominated Advisor and Broker) Tel: 020 7220 0500
Matt Goode (Corporate Finance)
Kate Bannatyne (Corporate Finance)
Alice Lane (ECM)
Chief Executive's statement
Introduction
The last 12 months have been like no other in the company's history. The COVID-19 pandemic has had a huge social and economic impact around the world and has led to huge consequences for all businesses, including our own, as we have had to adapt and change to meet the significant challenges in the last year and I thank our loyal and committed staff during this period. However, we have come through this challenging period and are now in position to continue our strategy going forward, with the assumption that no further lockdowns are required.
The company currently operates from a portfolio of around 422 stores (38 closed in the period with 3 stores refitted and 1 relocation to new formats). We operate a comprehensive digital proposition, enabling it to provide a multi-channel shopping experience to its customers.
Since the period end we have relocated a further 3 stores.
Strategy Update
The strategy outlined before the COVID-19 pandemic took hold, is still the general direction the Directors believe is the route to be taking going forward. The last 12 months has demonstrated the need to build on the significant successes within our Digital business. The investments we have made have put us in a strong position to enable our customers to buy throughout the lockdown, resulting in strong growth over this period. Digital growth will continue to be a big part of our future strategy along with our focus on Big Box and Hybrid expansion. These new stores will be at a lower pace due to cash constraints.
COVID-19 Update
We have had to adapt and reshape our business to react to extremely difficult trading conditions. We enter the second half of the financial year with the hope that we have seen the worst of the COVID-19 impact and look forward to the stores getting back to what we would call "normal" trading conditions, with no further lockdowns.
No stores were open in the first 2 weeks of the 2(nd) half. Trading started strongly but has settled down to a more mixed picture of good High Street and retail park sales but weaker shopping centre performance.
Financial Summary
In the six months to 3 April 2021, the company generated revenues of GBP40.4m (2020 H1: GBP68.9m) and a loss before tax of GBP(2.6)m (2020 H1 GBP(2.5)m).
The reduction in revenue over the prior year reflects the continued impact of COVID-19. During the six months we experienced significant disruption in the supply chain and a fall in consumer spending for a significant number of months in the period, particularly in Jan, Feb and March when all stores were closed. In the period we saw an increase in Digital sales to GBP17.6m compared to last year of GBP5.5m, however the store deficit was GBP40.5m compared to last year.
The gross profit for this year reflects the sales related margin reduction year on year due to clearing excess stock and the benefit of the Government COVID business support schemes. Admin and distribution costs are higher than last year primarily due to GBP3.1m additional expenditure relating to the increase in Digital sales and a GBP0.5m increase due to foreign exchange revaluation.
The company ended the period with a net cash balance of GBP4.1m (2020 GBP3.6m). The increase in cash balance has been achieved through the measures taken by the business over the last 12 months, which restricted cash out of the business but also took advantage of the Government furlough scheme, the business rates holiday, retail grants and the ability to delay VAT. We should state that, compared to last year, we are behind on rental payments as we continue to negotiate better terms with Landlords.
Dividend
We are continuing to focus on cash preservation as the business comes out of lockdown and therefore no interim dividend will be paid. Our dividend policy remains on hold as previously stated.
Unaudited consolidated income statement
26 Wks end 26 Wks end 52 Wks end 3 Apr 2021 4 Apr 2020 3 Oct 2020 GBP'000 GBP'000 GBP'000 Revenue 40,435 68,944 122,568 Cost of Sales (29,804) (61,262) (114,455) ----------- ----------- ----------- Gross Profit 10,631 7,682 8,113 Administration Expenses (7,906) (6,273) (13,928) Distribution Costs (4,477) (2,927) (6,895) ----------- ----------- ----------- Loss from Operations (1,752) (1,518) (12,710) Finance Income 0 (1) 10 Finance Expense (860) (1,009) (1,901) ----------- ----------- ----------- Loss before Taxation (2,612) (2,528) (14,601) Taxation 497 480 2,698 Loss attributable to equity holders of the parent (2,115) (2,048) (11,903) =========== =========== =========== Earnings per Share (4.2)p (4.1)p (23.8)p
Unaudited consolidated statement of total comprehensive income
26 Wks 26 Wks 52 Wks end end end 3 Apr 4 Apr 3 Oct 2021 2020 2020 GBP'000 GBP'000 GBP'000 Loss for the period (2,115) (2,048) (11,903) -------- -------- --------- Items that will not be reclassified subsequently to the income statement DB pension scheme 2,769 (642) (2,114) Movement in deferred tax on pension schemes (526) 94 899 IFRS-16 Opening balances 0 (3,242) 0 Cash flow hedges Fair value movements in other comprehensive income (1,903) (2,431) (2,124) Cash flow hedges recognised in inventories 0 2,868 0 Tax on cash flow hedges 364 (74) 363 -------- -------- --------- Other comprehensive (expense)/Income for the period 704 (3,427) (2,976) Total comprehensive (expense)/Income for the period (1,411) (5,475) (14,879) ======== ======== ========= attributable to equity holders of the parent
Unaudited consolidated statement of financial position
26 Wks end 26 Wks end 52 Wks end 3 Apr 2021 4 Apr 2020 3 Oct 2020 GBP'000 GBP'000 GBP'000 Assets Non-current Assets Property, plant and equipment 14,733 22,669 16,967 Right of use assets 36,464 53,456 42,387 deferred tax asset 5,455 1,597 5,617 ----------- ----------- ----------- Total Non-current assets 56,652 77,722 64,971 Current Assets Inventories 28,433 25,727 26,698 Trade and other receivables 3,524 4,978 2,735 Derivative financial assets 0 2,751 0 Cash and cash equivalents 14,473 3,571 13,266 ----------- ----------- ----------- Total Current Assets 46,430 37,027 42,699 Total Assets 103,082 114,749 107,670 Current Liabilities Trade and other payables (12,250) (31,167) (17,316) Lease liabilities (15,629) 0 (19,914) Derivative financial liability (2,620) 0 (105) Bank loans (4,800) 0 (1,944) Provisions (1,756) (573) (1,471) Corporation tax liability 0 0 (137) ----------- ----------- ----------- Total Current Liabilities (37,055) (31,740) (40,887) Non-Current Liabilities Trade and other payables 0 0 0 Lease liabilities (40,042) (46,521) (37,475) Bank loans (5,600) 0 (5,056) Provisions (1,499) (581) (1,260) Employee benefit liability (7,899) (9,952) (10,594) ----------- ----------- ----------- Total Non-Current Liabilities (55,040) (57,054) (54,385) Total liabilities (92,095) (88,794) (95,272) Net Assets 10,987 25,955 12,398 =========== =========== =========== Equity attributable to equity holders of the company Called up share capital 500 500 500 Merger reserve 2,662 2,662 2,662 Cash flow hedge reserve (1,654) 2,008 (116) Retained earnings 9,479 20,785 9,352 Total Equity and Reserves 10,987 25,955 12,398 =========== =========== ===========
Unaudited consolidated statement of changes in Equity
Share Share Cash flow Retained Total Capital Premium Hedge Earnings Reserve GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 At October 2019 500 2,662 1,645 26,623 31,430 -------- -------- ---------- --------- --------- Loss for the period 0 0 0 (2,048) (2,048) Defined benefit pension movements 0 0 0 (642) (642) cash flow hedge movements 0 0 437 0 437 Right of use asset movement 0 0 0 (3,242) (3,242) Deferred tax on other comp. income 0 0 (74) 94 20 -------- -------- ---------- --------- --------- Total comprehensive income for the period 0 0 363 (5,838) (5,475) Dividends paid 0 0 0 0 0 -------- -------- ---------- --------- --------- Contributions by and distribution to owners 0 0 0 0 0 As at April 2020 500 2,662 2,008 20,785 25,955 -------- -------- ---------- --------- --------- At October 2019 500 2,662 1,645 26,623 31,430 -------- -------- ---------- --------- --------- Impact of transition to IFRS-16 0 0 0 (4,153) (4,153) Loss for the period 0 0 0 (11,903) (11,903) Defined benefit pension movements 0 0 0 (2,114) (2,114) cash flow hedge movements 0 0 (2,124) 0 (2,124) Deferred tax on other comp. income 0 0 363 899 1,262 -------- -------- ---------- --------- --------- Total comprehensive income for the period 0 0 (1,761) (17,271) (19,032) Dividends paid 0 0 0 0 0 -------- -------- ---------- --------- --------- Contributions by and distribution to owners 0 0 0 0 0 As at October 2020 500 2,662 (116) 9,352 12,398 -------- -------- ---------- --------- --------- At October 2020 500 2,662 (116) 9,352 12,398 -------- -------- ---------- --------- --------- Loss for the period 0 0 0 (2,115) (2,115) Defined benefit pension movements 0 0 0 2,769 2,769 cash flow hedge movements 0 0 (1,903) 0 (1,903) Deferred tax on other comp. income 0 0 364 (526) (162) -------- -------- ---------- --------- --------- Total comprehensive income for the period 0 0 (1,539) 128 (1,411) Dividends paid 0 0 0 0 0 -------- -------- ---------- --------- --------- Contributions by and distribution to owners 0 0 0 0 0 As at April 2021 500 2,662 (1,655) 9,480 10,987 -------- -------- ---------- --------- ---------
Unaudited consolidated statement of cash flows
26 Wks 26 Wks 52 Wks end end end 3 Apr 4 Apr 3 Oct 2021 2020 2020 GBP'000 GBP'000 GBP'000 Operating activities Loss after tax (2,115) (2,048) (11,903) Corporation tax (497) (480) (2,698) Finance income 0 (8) (10) Finance expense 860 1,018 1,901 Depn of property, plant and machinery 1,598 1,573 3,545 FA impairment and loss on disposal of property, 840 66 4,642 plant and machinery ROUA on disposal, depn and impairment 7,782 9,722 23,998 Pension contributions paid 0 (417) (1,466) -------- --------- --------- 8,468 9,426 18,009 Decrease/(increase) in trade and other receivables (789) 1,324 (810) Decrease/(increase) in foreign exchange contracts 613 0 336 Decrease/(increase) in inventories (1,735) 3,196 2,184 (Decrease)/increase in trade and other payables (5,066) (17,857) (5,498) Increase in provisions 524 110 1,646 -------- --------- --------- (6,453) (13,227) (2,142) -------- --------- ---------
Cash generated from operations 2,015 (3,801) 15,867 Net corporation tax paid 360 (1,888) (283) -------- --------- --------- Net cash flows from operating activities 2,375 (5,689) 15,584 -------- --------- --------- Investing activities Purchase of property, plant and machinery (204) (2,165) (2,809) Interest received 0 8 10 --------- --------- Net cash used in investing activities (204) (2,157) (2,799) -------- --------- --------- New secured loan repayable by instalments 5,000 0 10,000 Repayment of secured loan (1,600) 0 (3,000) Capital element of lease repayments (4,210) 0 (17,719) Interest paid (154) 0 (217) Dividends paid during year 0 0 0 --------- --------- Net cash used in financing activities (964) 0 (10,936) -------- --------- --------- Net increase in cash and cash equivalents 1,207 (7,846) 1,849 Cash and cash equivalents at beginning of period 13,266 11,417 11,417 Cash and cash equivalents at end of period 14,473 3,571 13,266 ======== ========= =========
Notes to the financial statements for the 26 weeks ended 3 April 2021
Basis for preparation
The consolidated interim financial statements of the company for the 26 weeks ended 3 April 2021, which are unaudited, have been prepared in accordance with the same accounting policies, presentations and methods of computation followed in the condensed set of financial statements as applied in the group's latest audited financial statements. A copy of those accounts has been delivered to the Registrar of Companies.
The financial information for the 26 weeks ended 3 April 2021, 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 2020 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 historic cost convention, as modified by the revaluation of derivative financial instruments to far 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 amount of assets and liabilities at the date of the financial statements and the reported amount 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 52 weeks ended 3 Oct 2020.
Going Concern
At the balance sheet date the company had a good cash balance and a strong net asset position. At the time of reviewing these accounts, the Directors have considered the effect of COVID-19 on the ongoing 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 time.
The cash forecast prepared by the Directors show that the company will be able to operate within the facilities available to it and 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 COVID-19 lockdown ended with non-essential retailers able to open from April onwards. Assuming that this will be the last period of lockdown, the Directors believe that the company is strongly positioned to progress positively.
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 and Finance Director. 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.
3 Apr 4 Apr 3 Oct 2021 2020 2020 External revenue by location of customers: GBP'000 GBP'000 GBP'000 United Kingdom 21,934 61,871 100,098 Digital 17,624 5,471 19,296 Republic of Ireland 675 1,602 2,678 Other 202 0 496 40,435 68,944 122,568 ======== ======== ========
There are no customers with turnover in excess of 10% of total turnover.
3 Apr 4 Apr 3 Oct 2021 2020 2020 Non-current assets by location GBP'000 GBP'000 GBP'000 United Kingdom 15,732 22,650 16,962 Republic of Ireland 0 19 5 15,732 22,669 16,967 ======== ======== ========
3. Derivative financial assets
At the balance sheet date, details of the forward contracts that the group has committed to are as follows:
3 Apr 4 Apr 3 Oct 2021 2020 2020 GBP'000 GBP'000 GBP'000 Derivative financial assets Not designated as hedging instruments (578) 332 34 Designated as hedging instruments (2,042) 2,419 (139) (2,620) 2,751 (105) ======== ======== ========
4. Taxation
The taxation credit for the 26 weeks ended 3 April 2021 is based on an estimated effective tax rate for the full year of 19% (2020:19%)
5. Earnings per share
3 Apr 4 Apr 3 Oct 2021 2020 2020 GBP'000 GBP'000 GBP'000 Profit in the period and earnings used in basic diluted earnings per share (2,115) (2,048) (11,903) (4.2)p (4.10)p (23.8)p ======== ======== =========
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