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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 | |
---|---|---|---|---|---|---|---|---|---|---|
-6.00 | -1.49% | 396.00 | 400.00 | 401.40 | 406.60 | 395.00 | 400.80 | 3,743,640 | 16:35:12 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Jewelry & Watches-whsl | 1.54B | 121.8M | 0.5084 | 7.89 | 960.68M |
TIDMWOSG
RNS Number : 7722H
Watches of Switzerland Group PLC
31 July 2023
31 July 2023
Watches of Switzerland Group PLC (the "Company")
Annual Report and Accounts 2023
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
1. Annual Report and Accounts 2023; and
2. Notice of Annual General Meeting of the Company, to be held at 36 North Row, London W1K 6DH at 3.30pm on 31 August 2023
In accordance with DTR 6.3.5(3) the Annual Report and Accounts 2023 and the Notice of Annual General Meeting are accessible on the Group's website: thewosgroupplc.com
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 FY23 results announcement on 13 July 2023. That information together with the information set out below which is extracted from the Annual Report and Accounts 2023 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 2023. Page and note references in the text below refer to page numbers in the Annual Report and Accounts 2023. To view the FY23 results announcement visit the Company website: thewosgroupplc.com/investors
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 If the Board adopts the wrong strategy The Board reviews its business or does not implement its strategy strategy on a regular basis to effectively, the business may suffer. determine how sales and profit The Group's growth strategy exposes can be maximised, and business it to risks and the Group may encounter operations can be made more efficient. setbacks in its ongoing expansion The Board has significant relevant in the UK, US, and Europe. experience, including in the retail The Group's significant investments and luxury markets. in its showroom portfolio, IT systems, The CEO provides updates to the colleagues and marketing may be Board on key development opportunities unsuccessful in growing the Group's and initiatives. business as planned. Expansion of the property portfolio The Group may make acquisitions or potential acquisitions must or other investments that prove meet strict payback criteria. Return unsuccessful or divert its resources. on investment of marketing and Successful growth through future other investment activity is monitored acquisitions is dependent upon closely. 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-making. transactions on favourable terms, The Group has adapted its strategy complete such transactions and to take advantage of online trading, successfully integrate the acquired client appointments and introduced businesses. the Luxury Watch and Jewellery The Group may fail to respond to Virtual Boutique to maximise sales. the pressures of an increasingly The Group has diversified its operations changing retail environment effectively through the expansion of mono-brand and rapidly. The re-evaluation boutiques and ecommerce platforms. of priorities and their delivery, The Group operates in the UK and including the consideration of US, and recently entered into the initiatives to respond to permanent European market. There is international changes in client behaviours or market diversification reducing to change working practices, is reliance on one territory. 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 partners been held for a significant length and the production of luxury watches of time. is limited by the small number Supplier distribution contracts of master watchmakers and the availability are monitored to ensure ongoing of artisanal skills. Owners of compliance with contractual obligations. luxury watch brands control distribution The Group works collaboratively through strict, Selective Distribution with partner brands to identify Agreements. Consequently, the relationship product trends and forward demand. with owners of luxury watch brands Continued focus on providing exceptional is crucial to the Group's success. client 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 In-depth training for showroom a right to terminate the agreement colleagues is provided, including in the event of a change of control specific training provided by the and/or management of the Group. brand partners. The Group is subject to the risk The Group's sales mix is becoming that owners of luxury watch brands more broad-based, with less reliance may decide to terminate these contracts on individual brands to drive success. 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 or other pandemics, supplier manufacturing operations could be forced to close, impacting operational activities, client experience and business strategy. Client Experience and Market Risk An inability to maintain a consistent The Group provides the ultimate high-quality experience for the luxury environment for its clients Group's clients across the sales to feel welcome, appreciated and channels, particularly within the supported showroom network, could adversely Our Xenia Client Experience Programme affect business. further elevates our client experience The increased number of registration proposition. of interest (RoI) watches could Exceptional training is provided adversely impact the perceived for our showroom colleagues, and client experience. other client facing colleagues, The Group faces competition and to allow them to provide the best any failure by the Group to compete client service, along with in-depth effectively could result in a loss product knowledge. of market share or the ability The CRM database allows the Group to retain supplier agencies. Long-term to engage with the client on their consumer attitudes to diamonds, journey from a potential to a loyal gold and other precious metals client. and gemstones could be affected The Group continues to invest in by a variety of issues, including and develop its product offering concern over the source of raw to improve the value offered to materials, the impact of mining consumers, retailers, and manufacturers. and refining of minerals on the Competitor activity is monitored environment, labour conditions in detail, enabling strategic decision-making in the supply chain, and the availability on key market positions. and perception of substitute products, The diversification of the Group such as cubic zirconia and laboratory-created through mono-brand boutiques and
diamonds. Equally, longer term significant online presence together consumer attitudes to more technologically with the Group's scale and technological advanced watches, such as 'smart capabilities are competitive advantages watches' could reduce consumer for the Group. demand for luxury watches. Colleague Talent and Capability The Group depends on the services The Trading Board considers the of key talent to manage its business, development of Senior Management and the departure of such colleagues to ensure there are opportunities or the failure to recruit and retain for career development, promotion, suitable personnel could adversely and appropriate succession. affect the Group's business. The Nomination Committee considers Client experience is an essential the succession planning for the element in the success of the Group's Board, and Senior Management. business, where many clients prefer The Company's recognition programmes a more personal face- to-face experience are in place to incentivise and and have established personal relationships motivate colleagues. with the Group's retail colleagues. The Group operates a share save An inability to recruit and retain scheme for all colleagues to participate suitably qualified colleagues, in the growth of the Group. especially with specialised knowledge A wide range of training and development of luxury watches and jewellery, programmes are available to colleagues. would have a material impact on The Colleague Engagement Survey the Group. 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. A focused project group has been established, with an objective to monitor and reduce retail labour turnover, particularly in the first year of employment. We utilise a two-way engaging communications platform, Workplace, globally. This social channel underpins Group communications to colleagues. Data Protection and Cyber Security The increasing sophistication and Dedicated Group Data Protection frequency of cyber-attacks, coupled Officer in place. with data protection laws, highlight Significant investment in systems the escalating information security development and security programmes. risk facing all businesses. Systems vulnerability and penetration As the Group operates in the UK, testing is carried out regularly. US, and European markets, the regulatory The Group Data Protection Committee environment surrounding these areas meets regularly to review related is considered more complex. processes and emerging risks. Security breaches and failures Information security and data protection in the Group's IT infrastructure policies, procedures, and training and networks, or those of third in place. parties, could compromise sensitive Strict access rights are in place and confidential information and to limit access to data and reports affect the Group's reputation. to limited people. Theft or loss of Company or client Regular communication with all data or potential damage to any colleagues on the risk of 'phishing' systems from viruses, ransomware emails and alerts of identified or other malware could result in examples. fines and reputational damage to Security Information and Event the business that could negatively Management tools have been introduced impact on our sales. across the Group's technology estate. Our Virtual Private Network security controls have been enhanced considering the increased requirement for use through working from home arrangements. Enhanced password security measures have been introduced globally to decrease the likelihood of a breach. Business Interruption 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 The multi-channel model allows or cause a disruption to the Group's clients to purchase online from operations. the safety and comfort of their The inability of the Group to be homes. able to operate showrooms or a Robust security arrangements are significant reduction in available in place across our showroom network colleagues to operate the business, to protect people and products such as during a material pandemic, in the case of security incidents. would significantly impact the A comprehensive insurance programme operations of the business. is in place to offset the financial The Group offers flexible delivery consequences of insured events. options (home delivery or click Business critical systems are based and collect in showroom) and its on established, industry- leading online operations rely on third package solutions party carriers and transportation A detailed IT development and security providers. The Group's shipments roadmap is in place aligned to are subject to various risks, including our strategy. labour strikes and adverse weather. Reliable and reputable third party The Group may experience significant logistic partners have been engaged theft of products from its showrooms, to ensure the secure transportation distribution centres or during of goods. the transportation of goods. If The Group has in place action plans a hold-up, burglary, or other theft to effectively deal with the impact incident takes a violent turn, of a pandemic on business operations. the Group may also suffer reputational damage and our clients may become less inclined to visit our showrooms. 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 pandemic lockdowns. The Group relies on IT networks and systems, some of which are managed by third parties, to process, encrypt, transmit and showroom electronic information, and to manage or support a variety of business processes and activities, including sales, supply chain, merchandise distribution, client invoicing and collection of payments. ------------------------------------------------ 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, US and Europe and compliance or regulatory requirements including, with existing obligations. but not limited to, consumer law, Clear Group policies and procedures health and safety, employment law, are in place, including, but not data protection, anti-bribery and limited to, anti-bribery, corruption corruption, competition law, anti-money and fraud, whistleblowing, and laundering and supply chain regulations. data protection. As the Group continues to expand Mandatory induction briefings and in the US and Europe, there is training for all colleagues on a risk the business lacks the detailed regulation and compliance knowledge of US and European laws Experienced in-house legal team and regulations resulting in a with external expertise sought
breach, significant fine, and reputational as needed. impact. The established culture and values foster open, honest communication. Operational activities have been amended, and continue to be updated, to comply with guidance provided by the Government to prioritise the safety of colleagues and clients. 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. with planned further expansion Focus on client service to attract in Europe. Any sustained stagnation and retain clients. or deterioration in the luxury Detailed sales data is analysed watch or jewellery markets or decline to anticipate future trends and in consumer spending in these territories demand, taking into consideration could have a material adverse impact the current economic environment. on the Group's business. Through the expansion into the The Group or its suppliers may US and Europe, the Group is not not be able to anticipate, identify wholly dependent on the economic and respond to changing consumer or political environment in one preferences in a timely manner, single market. and the Group may not manage its inventory in line with client demand. Ongoing legal, political, and economic uncertainty in the UK, US, European 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 Training and monitoring of adherence reputation and brand could lead by colleagues to Group policies to a loss of trust and confidence. and procedures. This could result in a decline Excellent client experience is in the client base, affect the a key priority of the Group. ability to recruit and retain the The Group undertakes regular client best people, and damage our reputation engagement to understand and adapt with our suppliers or investors. the product, offer, and showroom environment. The use of 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 In May 2023, the Group successfully financial obligations and to support refinanced, entering into a new the operations and expansion of GBP225.0 million multicurrency the business is dependent on having revolving loan facility with a sufficient funding over the short, five-year term. medium and long-term. The Group's net cash position, The Group is reliant on the availability available funding and cash flow of adequate financing from banks projections are regularly monitored and capital markets to meet its by management and the Board. liquidity needs. Exchange and interest rates are The Group's level of indebtedness regularly reviewed to determine could adversely affect its ability if hedging should be put in place. to react to changes in the business A three-year strategic cash flow and may limit the commercial and is prepared and stress-tested, financial flexibility to operate including the impact on covenant the business. calculations. The Group is exposed to foreign Quarterly meeting with the lenders' exchange risk and profits may be agent to update on forecast and adversely impacted by unforeseen trading. movements in foreign exchange rates. Significantly reduced trading over an extended period, due to a pandemic, could impact the business's ability to operate within committed credit facilities. ------------------------------------------------ Climate Change The increased frequency of extreme The Board has overall responsibility weather events may lead to the for managing climate- related risks, significant disruption of retail as well as ensuring our strategy showrooms, offices, and distribution creates value and achieves our centres, through flooding and strong Purpose to WOW clients, while caring winds. The supply chain may also for colleagues, our communities be impacted through transporting and our planet. goods to showrooms. Climate-related issues are addressed In a changing climate, there is on a regular basis by the ESG Committee, the potential for higher insurance which is chaired by Independent premiums for business operations, Non-Executive Director, Rosa Monckton. especially ones located in specific The ESG Committee challenges our geographies. ESG Steering Group on progress The increasing cost of energy and against goals and targets. potential regulatory mechanisms Key climate-related risks and opportunities on direct carbon emissions, may are governed via our Audit & Risk impact business financials and Committee along with the accuracy profit if the Group cannot transition and compliance with ESG-related to a more low carbon business model. disclosures, including TCFD. The Group's reliance on premium The ESG agenda continues to evolve raw materials, which are a finite rapidly and climate training has resource, increases its exposure been introduced for Board members to resource scarcity, and the potential to ensure they have sufficient increase cost of obtaining these knowledge for effective decision-making. resources in a challenging supply The CEO has overall operational chain environment. responsibility for Climate Strategy The Group may fail to implement and the mitigation of related risks. its mitigation strategy to reduce The CFO has day-to-day operational its impact on the climate and manage responsibility for climate-related the risk appropriately, leading risks and opportunities and chairs to increased scrutiny from stakeholders a regular ESG Steering Group, which and investors, resulting in reputational reports into the ESG Committee. damage. The Group has a dedicated Head of Sustainability and ESG, who has significant experience in relation to climate change. The ESG Steering Group is responsible for assessing and managing climate-related risks and opportunities against KPIs aligned to our ESG pillars of 'People, Planet and Product' and ensuring all operational matters in respect to our ESG Strategy are fully embedded into our business strategy and operation. Each ESG pillar is supported by Working Groups, which include senior
operational managers, with input from external consultants. ------------------------------------------------
Further information on the financial risks we face and how they are managed is provided on pages 112 to 121 of the Annual Report and Accounts 2023.
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 UK adopted international accounting standards 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 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 UK adopted international accounting standards 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. 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 130 and 131 of the Annual Report and Accounts 2023 confirms that, to the best of their knowledge:
- that the Group Financial Statements, which have been prepared in accordance with UK adopted international accounting standards, give a true and fair view of the assets, liabilities, financial position and profit of the Group;
- that the Annual Report and Accounts 2023, 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;
- that they consider the Annual Report and Accounts 2023, 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 2023 and on the Group's website: thewosgroupplc.com
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