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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Watches Of Switzerland Group Plc | LSE:WOSG | London | Ordinary Share | GB00BJDQQ870 | ORD GBP0.0125 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
33.00 | 9.77% | 370.80 | 370.20 | 372.20 | 402.20 | 360.80 | 380.00 | 1,615,331 | 09:31:08 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Jewelry & Watches-whsl | 1.54B | 121.8M | 0.5084 | 7.27 | 885.93M |
TIDMWOSG
RNS Number : 2988H
Watches of Switzerland Group PLC
02 August 2021
02 August 2021
Watches of Switzerland Group PLC (the "Company")
Annual Report and Accounts 2021
In compliance with Listing Rule 9.6.1, the Company announces that the following documents have today been submitted to the UK Financial Conduct Authority, and will shortly be available for inspection via the National Storage Mechanism at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
-- Annual Report and Accounts 2021; and
-- Notice of Annual General Meeting of the Company, to be held at 36 North Row, London W1K 6DH at 2pm on 2(nd) September 2021
In accordance with DTR 6.3.5(3) the Annual Report and Accounts 2021 and the Notice of Annual General Meeting are accessible on the Group's website: thewosgroupplc.com/governance /
A condensed set of Watches of Switzerland Group PLC financial statements and information on important events that have occurred during the year and their impact on the financial statements were included in the Company's FY 21 results announcement on 8(th) July 2021. That information together with the information set out below which is extracted from the Annual Report and Accounts 2021 constitute the requirements of DTR 6.3.5 which is to be communicated via an RNS in unedited full text. This announcement is not a substitute for reading the full Annual Report and Accounts 2021. Page and note references in the text below refer to page numbers in the Annual Report and Accounts 2021. To view the FY 21 results announcement visit the Company website: thewosgroupplc.com/governance /
For further information, please contact:
Laura Battley
Company Secretary and General Counsel
+44 (0)20 7317 4604
companysecretariat@thewosgroup.com
Additional Information
Principal risks and uncertainties
Below are descriptions of our principal risks and uncertainties and explanations of how we manage or mitigate the risk. It is recognised that the Group is exposed to risks wider than those listed. However, we have disclosed those we believe are likely to have the greatest impact on our business at this moment in time.
Principal risk description How we manage or mitigate the risk Business strategy execution and development: The Board reviews business strategy If the Board adopts the wrong strategy on a regular basis to determine or does not implement its strategy how sales and profit can be maximised, effectively, the business may suffer. and business operations be made more efficient The Group's growth strategy exposes it to risks and the Group may encounter The Board has significant relevant setbacks in its ongoing expansion experience, including in the retail in the UK and the US. and luxury markets The Group's significant investments The CEO provides updates to the in its store portfolio, IT systems, Board on key development opportunities colleagues and marketing may be and initiatives unsuccessful in growing the Group's business as planned. Expansion of the property portfolio or potential acquisitions must The Group may make acquisitions meet strict payback criteria. Return or other investments that prove on investment of marketing and unsuccessful or divert its resources. other investment activity is monitored Successful growth through future closely acquisitions is dependent upon the Group's ability to identify Key management information is provided suitable acquisition targets, conduct to the Board on a regular basis appropriate due diligence, negotiate to help inform strategic decision transactions on favourable terms, making complete such transactions and successfully integrate the acquired The Group adapted its strategy businesses. to take advantage of online trading and remote clienteling activities The Group may fail to respond to to maximise sales throughout lockdown the pressures of an increasingly periods and post re-opening changing retail environment effectively and rapidly, including from the The Group has diversified its operations impact of COVID-19. The re-evaluation through the expansion of mono-brand of priorities and their delivery, boutiques and ecommerce platforms. including the consideration of Having entered the US market in initiatives to respond to permanent 2017 there is international market changes in customer behaviours diversification reducing reliance or to change working practices, on one territory is paramount in the current environment --------------------------------------------------- Key suppliers and supply chain: The manufacture of key luxury watch The Group fosters strong relationships brands is highly concentrated among with suppliers, many of which have a limited number of brand owners been held for a significant length and the production of luxury watches of time is limited by the small number of master watchmakers and the availability Supplier distribution contracts of artisanal skills. are monitored to ensure ongoing compliance with contractual obligations Owners of luxury watch brands control distribution through strict, selective The Group works collaboratively distribution agreements. Consequently, with suppliers to identify product the relationship with owners of trends and forward demand luxury watch brands is crucial to the Group's success. Continued focus on providing exceptional customer experience, representing Some of the Group's distribution the brands in the best possible agreements with luxury watch brands way provide owners of such brands with a right to terminate the agreement In-depth training for store colleagues in the event of a change of control is provided, including specific and/or management of the Group. training provided by the brand owners themselves The Group is subject to the risk that owners of luxury watch brands may decide to terminate these contracts or otherwise not to renew them upon expiry, or to reduce the number of agencies they grant to the Group. The Group's distribution agreements with suppliers do not guarantee a steady supply of merchandise. The Group's business model may also come under significant pressure should the owners of luxury watch brands choose to distribute their own watches, increasingly or entirely by-passing third party retailers such as the Group. As a result of COVID-19, supplier manufacturing operations could be forced to close, impacting operational activities, customer experience and business strategy. Customer Experience and Market Risk The Group provides the ultimate An inability to maintain a consistent luxury environment for its customers high-quality experience for the to feel welcome, appreciated and Group's customers across the sales supported channels, particularly within the store network, and during the COVID-19 Initiatives launched in response pandemic, could adversely affect to the COVID-19 lockdown to continue business. making product available safely to customers The Group faces competition and any failure by the Group to compete Exceptional training is provided effectively could result in a loss for our store colleagues, and other of market share or the ability customer facing colleagues, to to retain supplier agencies. The allow them to provide the best Group also competes with the grey customer service, along with in-depth market, where unauthorised dealers product knowledge may be offering significant discounts. The CRM database allows the Group Long term consumer attitudes to to engage with the customer from diamonds, gold and other precious a potential to a loyal customer metals and gemstones could be affected by a variety of issues, including The Group continues to invest in concern over the source of raw and develop its product offering materials, the impact of mining to improve the value offered to and refining of minerals on the consumers, retailers and manufacturers environment, labour conditions in the supply chain, and the availability Competitor activity is monitored and perception of substitute products, in detail, enabling strategic decision
such as cubic zirconia and laboratory-created making on key market positions diamonds. Equally, longer term consumer attitudes to more technologically The diversification of the Group advanced watches, such as "smart through mono-brand boutiques and watches" could reduce consumer significant online presence together demand for luxury watches with the Group's scale and technological capabilities are competitive advantages for the Group Colleague talent and capability: The Group depends on the services The Trading Board considers the of key personnel to manage its development of Senior Management business, and the departure of to ensure there are opportunities such personnel or the failure to for career development, promotion recruit and retain suitable personnel and appropriate succession could adversely affect the Group's business. The Nomination Committee considers Customer experience is an essential the succession planning for the element in the success of the Group's Board business, where many customers prefer a more personal face-to-face The Group's award winning 'VibE' experience and have established recognition programme is in place personal relationships with the to incentivise and motivate all Group's sales colleagues. An inability colleagues to recruit, train, motivate and retain suitably qualified colleagues, A wide range of training and development especially with specialised knowledge programmes are available to colleagues, of luxury watches, would have a including the Group's own Academy material impact on the Group. A group-wide engagement survey provides an insight into what colleagues feel would make the Group an even better place to work The Group continually reviews the remuneration and benefits packages for all colleagues to make sure they are appropriately rewarded for the substantial contribution they make to the Group's growth and success. These benefits and the value they bring to colleagues are continually communicated to ensure they are taking advantage of them A focused project group has been established, with an objective to monitor and reduce retail labour turnover, particularly in the first year of employment The Group is initiating a shift from part time to full time contracts for retail colleagues A talent bank has been established, which provides a pipeline for management and high potential hires Succession planning for key management, below Executive level, has been presented to the Nomination Committee Business interruption and IT infrastructure: Adverse weather conditions, pandemics, The Group has a framework of operational travel disruption, natural disasters, procedures and business continuity terrorism, acts of war or other plans that are regularly reviewed, external events could adversely updated and tested affect consumer discretionary spending or cause a disruption to the Group's The multi-channel model allows operations. customers to purchase online from the safety and comfort of their The inability of the Group to be homes able to operate stores or a significant reduction in available colleagues Robust security arrangements are to operate the business, such as in place across our store network during the COVID-19 pandemic, would to protect people and products significantly impact the operations in the case of security incidents of the business. A comprehensive insurance programme The Group offers flexible delivery is in place to offset the financial options (home delivery or click consequences of insured events and collect in store) and its online operations rely on third party Business critical systems are based carriers and transportation providers. on established, industry leading The Group's shipments are subject package solutions to various risks, including labour strikes and adverse weather. A detailed IT development and security roadmap is in place aligned to The Group may experience significant our strategy theft of products from its stores, distribution centres or during Reliable and reputable third party the transportation of goods. If logistic partners have been engaged a hold-up, burglary or other theft to ensure the secure transportation incident takes a violent turn, of goods the Group may also suffer reputational damage and our customers may become The Group put in place action plans less inclined to visit our stores. to effectively deal with the COVID-19 pandemic impact on business operations Disruptions to, or failures in, the Group's IT infrastructure and networks, or those of third parties, could disrupt the Group's operations, especially during periods of increased reliance on these systems such as those experienced during the COVID-19 lockdowns. The Group relies on IT networks and systems, some of which are managed by third parties, to process, encrypt, transmit and store electronic information, and to manage or support a variety of business processes and activities, including sales, supply chain, merchandise distribution, customer invoicing and collection of payments. ---------------------------------------------- ------------------------------------------- Data protection and cyber security: The increasing sophistication and Significant investment in systems frequency of cyber-attacks, coupled development and security programmes with data protection laws, highlight the escalating information security Systems vulnerability and penetration risk facing all businesses. testing is carried out regularly As the Group operates in both the The Data Protection Committee meets US and UK markets, the regulatory at least six times a year to review environment surrounding these areas related processes and emerging is considered more complex. risks Security breaches and failures in the Group's IT infrastructure GDPR policies, procedures and training and networks, or those of third in place parties, could compromise sensitive and confidential information and Strict access rights are in place affect the Group's reputation. to limit access to data and reports to limited people Theft or loss of Company or customer data or potential damage to any Regular communication with colleagues systems from viruses, ransomware on the risk of "phishing" emails or other malware could result in and alerts of identified examples fines and reputational damage to the business that could negatively Security Information and Event impact on our sales. Management (SEIM) tools are being introduced across the Group's technology Potential additional COVID-19 related estate security risks in relation to increased working from home arrangements, VPN security controls have been an increase in phishing campaigns, enhanced in light of the increased
and increased reliance on third requirement for use through working parties supporting critical support from home arrangements services. Enhanced password security measures have been introduced to decrease the likelihood of a breach Regulatory and compliance: Fines, litigation, and reputational The Group actively monitors both damage could arise if the Group regulatory developments in the fails to comply with legislative UK and US and compliance with existing or regulatory requirements including, obligations but not limited to, consumer law, health and safety, employment law, Clear policies and procedures are data protection, in place, including, but not limited anti-bribery and corruption, competition to, anti-bribery and corruption, law, anti-money laundering and whistleblowing, and data protection supply chain regulations. As the Group continues to expand Mandatory induction briefings and in the US, there is a risk the training for all staff on regulation business lacks the detailed knowledge and compliance of US laws and regulations resulting in a breach, significant fine and Experienced in-house legal team reputational impact. with external expertise sought There is a risk that the Group as needed could fail to adequately look after the health and wellbeing of its The established culture and values colleagues and customers, especially foster open, honest communication considering the challenges faced by COVID-19, with potential breaches Operational activities have been of health and safety laws and regulations. amended, and continue to be updated, to comply with guidance provided by the Government to prioritise the safety of colleagues and customers Regulatory compliance reviews form part of the rolling internal audit plan Economic and political: The Group's business is geographically Regular monitoring of economic concentrated in the UK and US. and political events Any sustained stagnation or deterioration in the luxury watch or jewellery Focus on customer service to attract markets or decline in consumer and retain customers spending in the UK or US could have a material adverse impact Detailed sales data is analysed on the Group's business. to anticipate future trends and demand, taking into consideration The Group or its suppliers may the current economic environment not be able to anticipate, identify and respond to changing consumer Through the expansion into the preferences in a timely manner, US, the Group is not wholly dependent and the Group may not manage its on the economic or political environment inventory in line with customer in one single market demand. Ongoing legal, political and economic uncertainty in the UK, US and international markets could give rise to significant currency fluctuations, interest rate increases, adverse taxation arrangements or affect current trading and supply arrangements. -------------------------------------------- Brand and reputational damage: The Watches of Switzerland Group's The Group has a clear and open trading brands and its corporate culture with a focus on trust and brand are an important asset, and transparency failure to protect the Group's reputation and brand could lead Training and monitoring of adherence to a loss of trust and confidence. by colleagues to Group policies This could result in a decline and procedures in the customer base, affect the ability to recruit and retain the Good customer experience is a key best people, and damage our reputation priority of the Group with our suppliers. The Group undertakes regular customer engagement to understand and adapt the product, offer and store environment The use of bold, impactful, digital-led marketing, along with an in-depth knowledge of products, makes the Group an authority in the markets it serves -------------------------------------------- Financial and treasury: The Group's ability to meet its The Group's debt position, available financial obligations and to support funding and cash flow projections the operations and expansion of are regularly monitored the business is dependent on having sufficient funding over the short, Current lending facilities are medium and long term. The Group in place until April 2023 and June is reliant on the availability 2024. On 18 June 2020, the covenant of adequate financing from banks requirements on the UK facilities and capital markets to meet its were amended to reflect a liquidity liquidity needs. headroom requirement, rather than financial ratios, for the October The Group's level of indebtedness 2020 and April 2021 covenant tests could adversely affect its ability to react to changes in the business and may limit the commercial and financial flexibility to operate the business. The Group is exposed to foreign exchange risk and profits may be adversely impacted by unforeseen movements in foreign exchange rates. Significantly reduced trading over an extended period, due to the COVID-19 pandemic, could impact the business's ability to operate within committed credit facilities. This has been considered as part of the Group's going concern assessment on page 114 ---------------------------------------------- --------------------------------------------
Further information on the financial risks we face and how they are managed is provided on pages 102 to 113.
Directors' Responsibility Statement
The Directors are responsible for preparing the Annual Report and Accounts in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year that give a true and fair view of the state of affairs of the Group and the Company as at the end of the financial year, and of the profit or loss of the Group for the financial year.
Under that law the Directors have elected to prepare the Group Financial Statements in accordance with International Financial Reporting Standards (IFRSs) in conformity with the requirements of the Companies Act 2006 and have elected to prepare the Company's financial statements in accordance with United Kingdom Generally Accepted Accounting Practice, including FRS 102 (The Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland) and the Companies Act 2006. Under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules, Group Financial Statements are required to be prepared in accordance with IFRSs adapted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.
Under company law, the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing the Annual Report and Accounts, the Directors are required to:
- Select suitable accounting policies in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (or in respect of the parent company Financial Statements, Section 10 of FRS 102) and then apply them consistently;
- Make judgements and accounting estimates that are reasonable and prudent;
- Present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
- Provide additional disclosures when compliance with the specific requirements in IFRSs (or in respect of the parent company financial statements, FRS 102) is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Group's financial position and financial performance;
- For the Group Financial Statements, state whether International Financial Reporting Standards in conformity with the requirements of the Companies Act 2006 and IFRSs adapted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union have been followed, subject to any material departures disclosed and explained in the Financial Statements;
- For the Parent Company Financial Statements, state whether applicable UK accounting standards, FRS 102, have been followed, subject to any material departures disclosed and explained in the Parent Company financial statements;
- Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's and the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements comply with the Companies Act 2006 and, as regards the Group Financial Statements, Article 4 of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Under applicable law and regulations, the Directors are also responsible for preparing a Strategic report, Directors' report, Directors' Remuneration report and Corporate Governance statement that comply with that law and those regulations.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website.
Each of the Directors, whose names and functions are listed on pages 128 to 129 confirms that, to the best of their knowledge:
- that the Group Financial Statements, which have been prepared in accordance with International Financial Reporting Standards in conformity with the requirements of the Companies Act 2006 and IFRSs adopted pursuant to Regulation (EC) 1606/2002 as it applies in the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Group;
- that the Annual Report and Accounts 2021, including the Strategic Report, includes a fair review of the development and performance of the business and the position of the Company and undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and
- that they consider the Annual Report and Accounts 2021, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position, performance, business model and strategy
The Directors of Watches of Switzerland Group PLC are listed in the Group's Annual Report and Accounts 2021 and on the Group's website: thewosgroupplc.com
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August 02, 2021 10:31 ET (14:31 GMT)
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