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ANNU
AL
REPOR
T
&
A
CCOUNTS
2022.
FRASERS GR
OUP PL
C
ABOUT
FRASERS GR
OUP
F
ounded as a single stor
e in
1982, F
rasers Gr
oup Plc (Frasers
Group
, the Group
, the business
or the Compan
y) is t
oday the
UK’s largest sporting goods
ret
ailer b
y re
v
enue.
The Group operat
es a div
ersified portfolio of sports,
fitness, premium lif
estyle and luxury fascias in o
v
er 20
countries. W
e have mor
e than 30,
000 colleagues acr
oss
fiv
e business segments: UK Sports Ret
ail, Premium
Lifestyle
, European Ret
ail, Rest o
f W
orld Retail and
Wholesale & Licensing.
Our strat
egy is t
o pro
vide consumers with access to
the W
orld’s best sports, premium and luxury brands b
y
pro
viding a W
orld-leading ret
ail ecosy
stem. Aligned with
this vision, w
e have de
fined the Group
’s purpose:
T
o elevat
e the lives of the many by giving them access t
o the
W
orld’s best brands and e
xperiences.
OUR IMP
A
CT
SINCE 2007
W
e became a listed public compan
y in 2007
. In
the y
ears since we float
ed, the Gr
oup has greatly
contributed t
o the British econom
y
. This includes:
£250m
Appro
x. £250m paid in staff share bonuses
30,
000
Hav
e a workf
orce of appr
o
x. 30,
000 people
W
orldwide, appro
x. 22,000 of which are in the UK
£2,300m
Contribut
ed appro
x. £2,300m in V
A
T and Duty
£200m
Appro
x. £200m paid in sales commission
to r
et
ail bonuses
£700m
Contribut
ed appro
x. £700m in UK Corpor
ation T
ax
£200m
Contribut
ed appro
x. £200m in NI
emplo
yer contribut
ions
GR
OUP
OUTL
OOK
W
e are delight
ed to r
eport a recor
d-breaking
y
ear for Fr
asers Group with an adjust
ed pr
ofit
befor
e tax o
f £339
.8m (FY21: loss £39
.
9m),
despite the significant economic headwinds and
w
ell-chronicled challenges acr
oss the sector
.
Our Elev
ation str
ategy has r
emained laser focused,
and w
e have r
e-structured our t
eam t
o ex
ecute
it with conviction. It is underpinned b
y our cor
e
strengths and r
ock
-solid foundations. Although the
backdr
op remains challenging, this momentum
giv
es us the confidence of achieving an adjust
ed
profit be
fore t
ax of betw
een £450m and £5
00m for
the next financial y
ear
.
MISSION ST
A
TEMENT
T
O SER
VE OUR CONSUMERS WITH
THE W
ORLD’S BEST SPOR
TS,
PREMIUM AND LUXUR
Y BRANDS.
BUSINESS ETHOS
W
e do not run the business for the short-
t
erm
but w
ork to ensur
e w
e deliver shar
eholder v
alue
o
ver the medium t
o long-t
erm, whilst adopting
accounting principles that are conserv
ativ
e,
consistent and simple
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
2
CONTENTS
01.
HIGHLIGHTS
AND
O
VER
VIE
W
002
About Fr
asers Group
004
Gr
oup at a Glance
006
Financial H
ighlights
008
Str
ategic & Oper
ational Highlights
02.
STRA
TEGIC
REPOR
T
010
Chair’s Stat
ement
012
Our Business
014
Our Strat
egy
016
K
ey P
erformance Indicat
ors
018
CEO R
eport and Business Re
view
028
Financial R
evie
w
031
Non-Financial Inf
ormation
032
W
ork
ers Repr
esentativ
e Report
033
ESG Report (Including T
CFD)
048
S
172 Stat
ement
050
Principal Risks and Uncertainties
063
Viability St
atement
0
3. GO
VERNANCE
065
Corporate Go
v
ernance Report
072
The Board
075
Nomination Committee R
eport
077
Direct
ors’ R
emuneration R
eport
089
Audit Committee Report
095
Direct
ors’ R
eport
101
Direct
ors’ R
esponsibility Stat
ement
04.
GR
OUP FINANCIAL
ST
A
TEMENTS
102
Independent Auditor’s Report
to the Members o
f Fr
asers Group Plc.
113
Consolidat
ed Income Stat
ement
114
Consolidat
ed Stat
ement of
Comprehensiv
e Income
115
Consolidated Balance Sheet
116
Consolidat
ed Cash Flo
w Stat
ement
117
Consolidat
ed St
atement of
Changes in Equity
118
Notes t
o the F
inancial Stat
ements
05.
COMP
ANY FINANCIAL
ST
A
TEMENTS
198
Compan
y Balance Sheet
199
Company Stat
ement of Changes in E
quity
200
Notes t
o the Compan
y
Financial St
at
ements
06. GL
OSSAR
Y
208
Consolidat
ed Fiv
e Y
ear R
ecord and
Alternat
ive P
erformance Measures
210
Company Direct
ory
211
Shareholder Information
GR
OUP A
T
A GL
ANCE
UK SPOR
TS RET
AIL
EUR
OPEAN RE
T
AIL
55
.0%
T
ot
al Group R
ev
enue
16.4%
T
ot
al Group R
ev
enue
£2,
640.
1m
£790.2m
0.7%
0.5%
UK Sports Ret
ail includes core sports r
etail st
ore
operations in the UK, plus all the Gr
oup
’s sports
ret
ail online business (e
x
cluding Bob
’s Stores, E
astern
Mountain Sports and Sports Dir
ect Malaysia), the gyms,
SRL, the Group
’s Shirebrook campus oper
ations, ret
ail
stor
e operations in Northern Ir
eland, E
v
ans C
ycles and
GAME UK.
Our stor
e footprint is significant, with
808 st
ores
acr
oss
the UK, tot
alling appr
o
ximatel
y
6.7
m sq.
ft.
of r
etail
space. The majority of st
ores ar
e operat
ed under the
Sports Direct, USC, E
v
ans C
y
cles and GAME fascias
.
European Ret
ail includes all the Gr
oup
’s sports
ret
ail st
ores, management and operat
ions in
Europe including the Gr
oup
’s European distribution
centres in Belgium and A
ustria as well as G
AME
Spain. The tot
al European st
or
e count is
489 stor
es
and appro
ximately
3.7
m sq.ft.
o
f ret
ail space.
During FY22, management continued t
o elev
ate
the Group
’s European stor
es and w
ork to further
tailor the Gr
oup
’s consumer v
alue propositions t
o
our local markets
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
4
PREMIUM LIFESTYLE
WHOLESALE & LICENSING
The Group
’s Premium Lifestyle division offers a br
oad range of clothing,
footw
ear and accessories from leading global cont
empor
ary and luxury
ret
ail brands thr
ough our fascias in the UK: FLANNELS, Cruise
, v
an mildert,
House of Fr
aser
, Sofa.
com and Jack W
ills along with their relat
ed w
ebsites.
The majority of these fascias operat
e as multi-br
and premium r
etail
destinations and are f
ocused on pro
viding fashion conscious consumers
with high-end and on trend pr
oducts.
The segment is supported b
y our Gr
oup-wide centralised commer
cial and
support functions, giving the benefits of scale and oper
ating efficiencies
to each f
ascia. The segment is a significant part of the Group
’s new
generation r
etail concept and as such, in cert
ain locations, Pr
emium and
Lifestyle st
ores ar
e co-located alongside our Sports r
et
ail stor
es to bene
fit
from incr
eased customer f
ootfall and oper
ating syner
gies.
The tot
al Premium Lif
estyle stor
e count is
179 st
ores
and appro
ximately
4.0m s
q.
ft.
of ret
ail space
.
The Wholesale & Licensing segment operat
es our globally r
eno
wned
heritage Gr
oup brands (such as E
v
erlast, Lonsdale
, Karrimor and
Slazenger) and our wholes
ale, licensing and distribution r
elationships
across the W
orld, as w
ell as our partnerships with third party br
ands that
w
e license-in to sell cert
ain products
.
The Group
’s own brands ar
e managed both individually and centrall
y within
this segment. This unique, int
egrat
ed appr
oach to br
and management
lev
erages the expertise of our people
, encourages inno
v
ation, and
ensures consist
ency
.
REST OF THE W
ORLD RET
AIL
Rest of W
orld Ret
ail includes sports and outdoor r
etail st
or
es in the US
under the Bob
’s St
ores and E
astern Mount
ain Sports fascias and their
corresponding e-commer
ce offerings. It also includes the Gr
oup
’s ret
ail
stor
es in Malaysia, under the Sports Dir
ect fascia, and its corr
esponding
e-commerce off
ering. Subsequent t
o the period end the Bob
’s St
ores and
East
ern Mount
ain Sports fascias and their corresponding e-commer
ce
offerings w
er
e disposed of
.
As at the period end, the tot
al Rest of W
orld st
ore count is
7
6 stores
and
appro
ximately
1.3m sq.
ft.
o
f ret
ail space.
£1,056.6m
1.7%
22.0%
T
otal
Group Re
v
enue
£150.3m
1.
1%
3.
1%
T
otal
Group Re
v
enue
£168.
1m
0.7%
3.5%
T
otal
Group Re
v
enue
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
5
£335
.
6m
FINANCIAL HIGHLIGHTS
32.5%
Strong financial perf
ormance as w
e
reco
ver fr
om Co
vid-
19
, with Group r
e
v
enue
up b
y 32.5%
Ex
cluding acquisitions and on a currency neutr
al basis,
re
v
enue increased b
y 31.2%
(1)
Report
ed pr
ofit befor
e
t
ax w
as £335.
6m, up
3,848.2% fr
om a profit
of £8.5m driv
en b
y the
strong r
eopening of
st
ores aft
er lock
do
wn,
ne
w FLANNELS st
ores,
continued gro
wth in online
in the Premium Lif
estyle
segment, continued
operating efficiencies, F
Y21
including Co
vid-
19 relat
ed
lock
do
wns and current
period property r
elat
ed
impairments of £227
.0m
compared t
o £317
.0m
in FY21.
Premium Lif
estyle re
venue incr
eased b
y
43.
6
%, largel
y due t
o ne
w FLANNELS
st
ores, continued gr
o
wth in online, and the
strong r
eopening of st
ores aft
er the last
lock
do
wn in March 2021
Ex
cluding acquisitions, re
v
enue increased b
y 43
.3%
(1)
Cash inflo
w from oper
ating activities
increased t
o £6
28.
9m compared t
o
£578.3m in the prior period
43.6
%
£628.
9m
£578.3m
3,848.2%
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
6
£335
.
6m
£339
.8m
Group adjust
ed PB
T
(2)
increased t
o £33
9.8m
compared t
o a loss of £(3
9.
9m) in the
prior period
Ex
cluding acquisitions and on a currency neutr
al basis,
Adjusted PB
T
(2)
increased b
y £39
4.
0m
(1)
UK Sports Ret
ail re
v
enue
increased b
y 34.
1%,
largel
y due to the st
rong
reopening of st
or
es aft
er
the last lock
do
wn in March
2021 and the comparativ
e
period being impact
ed b
y
lock
do
wns as a result of
Co
vid-
19
Ex
cluding acquisitions, re
v
enue
increased b
y 30
.
1%
(1)
European R
etail r
e
v
enue increased b
y
28.4
%, largely due t
o str
ong gro
wth in
Ireland and the lock
downs e
xperienced in
the prior y
ear
Ex
cluding acquisitions and on a currency neutr
al basis,
re
v
enue increased b
y 33.
4
%
(1)
As at 24 April 2022 net assets incr
eased t
o
£1,308.6m fr
om £1,211.0m at 25 April 2021
(1)
A reconciliation ex
cluding acquisitions and currency neutr
al performance
measures can be found in the Gloss
ary.
(2)
Adjusted PBT (PB
T) is profit befor
e tax less the effects of e
xceptional it
ems,
realised for
eign ex
change, fair v
alue adjustments to derivativ
e financial
instruments included within Finance income/
costs, fair value gains/losses and
profit on disposal of equity deriv
atives, and shar
e schemes. Further det
ail on this
calculation can be found in the Glossary
.
28.4%
£1,308.6m
34.
1%
£(39
.
9m)
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
7
STRA
TE
GIC AND
OPERA
TIONAL HIGHLIGHTS
FUR
THER
GR
O
W
TH
F
urther gro
wth of our k
ey br
and partner relationships, alongside est
ablishing ne
w and innov
ativ
e brand partners
OUR
ELE
V
A
TION
STRA
TE
G
Y
HAS COME
T
O LIFE
SPORTS DIRE
CT BIRMINGHAM
Our Elev
ation str
ategy has come t
o life thr
ough the ne
w
stor
e de
velopments, including the cr
eation of flagship
stor
es, leading t
o recent openings including Sports Dir
ect
Birmingham and FLANNELS Liverpool
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
8
Supported our str
at
egic brand partner Hugo Boss A
G, with an incr
eased
inv
estment r
eflecting our gro
wing r
elationship and confidence in the brand’s futur
e
£19
3.2m
Returned £193
.2m to shar
eholders through a
significant share buy back pr
ogram
£9
80m
Successfully r
efinanced our Group f
acility,
which no
w stands at £980m
UNL
OCK
NE
W E
COMMER
CE
CAP
ABILITIES
Strat
egic acquisitions, including Miss
guided (post period end) and Studio Ret
ail (‘SRL
’), enable the
Group t
o unlock ne
w e-commerce capabilities and access a wider cust
omer base
IMPR
O
VED
THE DIGIT
AL
CONSUMER
EXPERIENCE
Significantly impr
ov
ed the digit
al consumer experience acr
oss
all touchpoints within the Gr
oup
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
9
CHAIR’S ST
A
TEMENT
CE
O Appointment
Earlier this y
ear
, Michael Murr
ay transitioned int
o
the role of Chie
f Ex
ecutive o
f Fr
asers Group and w
as
formally appoint
ed on 1 May 2022. W
ith Michael’s
leadership, w
e r
emain laser focused on the gro
wth of
the business, through k
eeping up the momentum of our
Elev
ation str
ategy
, in
vesting in our people and building
out the proposition f
or brands.
Michael has set out a clear vision for the business -
to pr
o
vide consumers with access to the W
orld’s best
sports, premium and luxury br
ands b
y pro
viding a
W
orld-leading ret
ail ecosyst
em, and thr
ough that, he
has significantly impr
ov
ed our r
elationships with our ke
y
brand partners and gr
own our pr
esence across the UK
and Europe
, through the de
v
elopment of our
stor
e portfolio
.
W
ith the Group
’s new leadership, and a clear dir
ection,
Michael continues t
o rede
fine the culture, emplo
yee
v
alue proposition and str
ategy of F
rasers Gr
oup, which
all contribute t
o the efficiency of the business and our
strong perf
ormance.
Business Perf
ormance and
Financial H
ighlights
W
e are pleased that our business has performed
abo
ve e
xpect
ations since stor
es reopened in Mar
ch
2021, follo
wing the final period of closur
e due to the
Co
vid-
19 pandemic. W
e ar
e a cash generativ
e business
which enables us to cont
inue to in
vest in our str
at
egies
and withstand some of the pr
essures and impact of
the pandemic, Bre
xit, global supply chain challenges
and political and economic uncert
ainty at home and
abroad. Notwithst
anding our business resilience
, these
macro-economic f
actors hav
e contribut
ed to our
conserv
ative judgements and est
imates, leading t
o some
significant non-cash accounting impairments of £232.7
m
(FY21: £326
.
1m) to our asset base
, further det
ails can be
found in not
es 2, 17
, 18 and 19.
•
Re
venue incr
eased t
o £4,80
5.3m (FY21: £3
,6
25.3m)
•
Profit Be
fore T
ax increased to £335.
6m (FY21: £8.5m)
•
Adjusted PB
T increased t
o a pr
ofit of £339
.8m
(FY21: loss £39
.
9m)
•
Net assets at FY22 £1,308.
6m (FY21: £1,211.0m
)
Looking forw
ar
d, we will continue t
o in
vest in the high
street alongside our online and digit
al capabilities.
F
ollo
wing the success of the business’s first Sports Direct
flagship on London
’s Oxfor
d Street, which opened t
o
great acclaim last June
, w
e recently opened our second
Sports Direct flagship st
ore in Birmingham – further
demonstrating the str
ength of our elev
ated consumer
experience
, and the direction of the Sports Dir
ect brand.
The FLANNELS business continues to perf
orm
ex
ceptionally well and w
e are ex
cited about the recent
opening of our 120,
000 sq. ft
. FLANNELS flagship stor
e
in Liv
erpool. The stor
e is our largest st
ore opening t
o
date and s
aw an impressiv
e in
vestment of appr
o
x. £30m
from the business. Our e
xpansion plans for FLANNELS
are crucial t
o the on-going success of the luxury side
of the business and through our ne
w brand vision t
o
become the leading destination for ne
w luxury
, w
e are
delighted t
o be e
xpanding into ne
w mark
ets and new
locations throughout the UK and Eur
ope, including the
expansion int
o Ir
eland with openings planned for Dublin,
Blanchardst
o
wn and Cork.
Acquisitions
W
e continue to see opportunities that str
engthen Fr
asers
Group
’s brand proposition and our r
ecent acquisitions of
Studio Ret
ail Limited (with its significant kno
wledge and
experience in consumer cr
edit) during FY22. Miss
guided
and I Saw It First (with their f
ocus on womens
w
ear and
its digital platf
orms) subsequent to the period end ar
e
ex
amples of our driv
e t
o expand and acquir
e businesses
and brands that can str
engthen the Group
, and our
connection t
o our consumers.
Operations
W
e are continually de
v
eloping our automation
capabilities in our Shirebr
ook distribution facility
,
including the launch of a Dematic Shuttle machine
which co
vers a floor plat
e of 200
,000 s
q. ft and
increasing the siz
e of our Aut
oSt
ore facility
, which was
already the biggest in Eur
ope. In the second half of the
financial y
ear, w
e completed the purchase of land in
Bitburg, German
y
, where w
e hav
e plans for a significant
distribution centre which will service mainland Eur
ope
from both a st
ore and digit
al perspectiv
e.
Our People
Our people are the k
e
y asset to the business.
Under Michael Murray’s leadership
, the management
team has been str
engthened. The business has creat
ed
sev
eral new r
oles including the additions of a Managing
Direct
or of Sports, Ger W
right (formerly a Nik
e Ex
ecutiv
e),
and a Managing Direct
or of Luxury and Premium, David
Epstein. Alongside the management t
eam, w
e will look
to support the business b
y adding relev
ant t
alent and
expertise t
o the Boar
d when appropriat
e.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
10
This year the Gr
oup will receiv
e its thir
d annual intak
e of
highly t
alented individuals int
o the Ele
vat
ion Programme
.
The programme is aimed at high pot
ential gr
aduates
seeking a career in commer
cial management, and
w
e have tw
enty-six (FY20: tw
enty-se
v
en and FY21:
tw
enty-fiv
e) y
oung, ambitious new joiners who st
art
ed
in September 20
22. Over the past thr
ee y
ears, we
hav
e been monitoring the success and bene
fits of the
Elev
ation Pr
ogramme and ar
e pleased to confirm that
w
e will be rolling out the scheme acr
oss our finance
department, which has seen fiv
e graduat
es start in
August 2022.
Sust
ainability
Sustainability and Ele
v
ation go hand in hand and
both are import
ant priorities for the Gr
oup and its
stak
eholders. W
e have built a Sust
ainability T
eam
structure within the or
ganisation with our CF
O
Chris W
ootton as the e
x
ecutive sponsor
. There are
Sustainability Champions acr
oss the business and
hundreds of dedicat
ed people across our st
or
es who
are r
esponsible for helping deliv
er against our priorities.
W
e have set ourselv
es tar
gets t
o reduce emissions and
single use plastic, and impro
v
e our w
ast
e management
and recy
cling. W
e now offer a carbon neutr
al deliv
ery
option on the w
eb.
W
e have outperf
ormed our tar
get of a 10% reduction
in our UK stor
es energy us
age, achie
ving a reduction
of 15%. Mor
e detail of our v
arious achie
v
ements and
tar
gets can be found in the ESG Report on page 33
.
This is the first year of T
askforce on Climat
e-relat
ed
Financial Disclosur
es (T
CFD). During the y
ear w
e hav
e
w
orked closel
y with expert e
xt
ernal advisors to enhance
our understanding of the pot
ential impact of climat
e
change on Fr
asers Group and t
o inform our futur
e
strat
egy risk management approach and the metric and
tar
gets w
e will use to monit
or our pr
ogress. The T
CFD
section can be found in the ESG r
eport
on page 40.
Refinancing
In our Half Y
ear reporting w
e not
ed the successful
refinance o
f our Group facility wher
eb
y w
e have access
to a combined t
erm loan and r
ev
olving credit f
acility
(RCF) o
f £930.
0m for a period of thr
ee y
ears, with the
possibility to e
xt
end this b
y a further 2 years
. This facility
has increased in siz
e t
o £980.
0m since then. W
e believ
e
this is a great endorsement f
or the business and our
Elev
ation str
ategy and I w
ant to say thank y
ou t
o our
banking partners for their support.
Disposals
Subsequent to the period end the Bob
’s Stor
es and
East
ern Mount
ain Sports fascias and their corresponding
e-commerce off
erings w
ere disposed of for
consideration of $7
0m. The Bobs and EMS stor
e estat
e
does not include any of the ne
w ele
v
ated st
ores which
are cor
e to the F
G Ele
v
ation strat
egy
. The disposal of
these non-core businesses allo
ws F
rasers Gr
oup to hav
e
an ev
en greater f
ocus on delivering its Ele
v
ation strat
egy
b
y focusing on st
ore e
xperience, digit
al and product
. The
board of F
rasers Gr
oup is grat
eful t
o staff in Bobs and
EMS for their lo
y
al service and wishes these businesses
ev
ery success for the future.
The Group disposed of a number of fr
eehold and
long leasehold ret
ail parks held b
y its wholly o
wned
subsidiaries post period end for a t
otal o
f £205m.
Fr
asers Group f
ascias will operat
e from leases within
these properties wher
e appropriat
e. F
rasers Gr
oup in
the ordinary course of business pur
chases and sells
properties fr
om time t
o time.
Outlook
Under Michael Murray’s dir
ection and leadership, w
e are
confident the Group is w
ell positioned f
or a successful
y
ear ahead.
Relationships with our k
e
y brand partners are bett
er
than they hav
e ev
er been, and we will continue t
o in
vest
in supporting and gro
wing these r
elationships.
The business cannot ov
erlook the man
y significant
economic fact
ors which are headwinds on the business,
including challenges with supply chain, increased ener
gy
costs and cost of living – these fact
ors could hav
e an
impact on business potent
ial.
Ho
we
v
er
, w
e look forw
ard t
o gr
owing the business both
organically and thr
ough acquisitions, t
o ensure w
e
remain a mark
et leader globally
. W
e belie
ve the gr
o
wth
fact
ors will mitigat
e these headwinds and we will be
looking to gr
o
w our Adjusted PB
T t
o between £4
50m
and £500m in FY23
.
Dividend and Share Buybacks
The Board has decided not t
o pay a final dividend in
relation t
o FY22 (FY
21 £nil). The Board remains of the
opinion that it is in the best inter
ests of the Group and its
shareholders t
o preserv
e financial flexibility and facilit
ate
future in
v
estments and other gro
wth opportunities. The
payment of dividends remains under r
evie
w
.
Our share buyback pr
ogramme during the y
ear has
continued which is a demonstration of our commitment
to shar
eholder returns, our confidence in the C
ompany
and the strat
egy for futur
e gro
wth.
David Daly
Non-Ex
ecutiv
e Chair of the Board
20 Sept
ember 2022
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
11
OUR BUSINESS
Business Model
F
ounded as a single Stor
e in Maidenhead in 1982,
Fr
asers Group Plc t
oday operat
es a div
ersified portfolio
of sports, fitness, premium lif
estyle and luxury stor
e
fascias. The Gr
oup
’s colleagues w
ork together with our
suppliers and our third-party br
and partners to serv
e
customers in o
ver 20 countries. The Group aspir
es to
be an internat
ional leader in sports, lifestyle and luxury
ret
ail. The Board is committ
ed t
o treating all people with
dignity and respect
. W
e value our people, our cust
omers
and our shareholders and w
e striv
e t
o adopt good
practices in our corpor
ate dealings
. W
e aim to deliv
er
shareholder v
alue o
v
er the medium to long t
erm, whilst
adopting accounting principles that are conserv
ative,
consistent and simple
. Our strat
egy is set out in the ‘
Our
Strat
egy – T
o build the W
orld’s most compelling brand
ecosy
stem
’ section of this report.
Our business model remains consist
ent in pro
viding
customers with the W
orld’s best brands. This requir
es
us to hav
e the right product, in the right place, at the
right time and at the right price. Our vision is t
o become
the elev
at
ed, multi-channel platform f
or our Sports
Ret
ail and Premium Lif
estyle fascias. T
o this end, w
e are
elev
ating acr
oss all channels to enhance the cust
omer
journey e
v
ery st
ep of the w
ay
.
The Group
’s business model is explained in great
er
detail belo
w
. T
his includes an outline of our fascias and
ret
ail channels, management of our property portf
olio,
our people, our thir
d-party brand partners, our Gr
oup
brands and our centr
alised support functions.
Business Structure
The Group is structur
ed across fiv
e business segments:
UK Sports Ret
ail, Premium Lif
estyle, Eur
opean Ret
ail,
Rest of W
orld Ret
ail and Wholesale & Licensing.
In UK Sports Ret
ail, w
e offer a complet
e range of
sporting apparel
, footw
ear and equipment through our
predominant f
ascia, Sports Direct. This segment also
includes our lifestyle fascia USC
. Our current forw
ard-
looking view is that the majority o
f our offering t
o
customers must include leading thir
d-party brands
.
The elev
ation of our sports r
etail pr
oposition is k
ey t
o
ensuring w
e are fully aligned with the futur
e direction
and ambitions of these brand partners
. UK Sports
Ret
ail includes core sports r
etail st
ore oper
ations in the
UK, plus all the Group
’s sports retail online business
(e
x
cluding Bob
’s St
ores, E
astern Mount
ain Sports and
Sports Direct Malay
sia), the gyms, SRL, the Group
’s
Shirebr
ook campus operations, r
etail st
or
e operations in
Northern Ireland, E
v
ans C
y
cles and the GAME UK st
ores
and online business.
In Premium Lif
estyle, w
e are de
v
eloping the Group
’s
premium and luxury off
ering, which consists of the
FLANNELS, Fr
asers, House of Fr
aser
, Jack W
ills and
Sofa.
com fascias, along with Cruise and v
an mildert. W
e
aim to off
er fashion-conscious consumers a luxurious,
multi-brand r
etail dest
ination with high-end and
on-tr
end products.
In European Ret
ail, w
e are ev
olving our customer
proposition in line with the Ele
v
ation strat
egy
, while also
seeking to incr
easingly t
ailor our proposition t
o the local
markets in which w
e operate
. These include the Republic
of Ireland and continent
al Eur
ope.
In Rest of W
orld Ret
ail, w
e operat
e st
ores trading as
Bob
’s St
ores and E
astern Mount
ain Sports and w
e
also hav
e stor
es trading as Sports Dir
ect in Malaysia.
Subsequent to the period end the Bob
’s Stor
es and
East
ern Mount
ain Sports fascias and their corresponding
e-commerce off
erings w
ere disposed of
, further det
ail
can be found in not
e 16.
In Wholesale & Licensing, the Gr
oup ret
ains a portfolio
of W
orld-famous heritage br
ands, which w
e offer via
our fascias, and also wholesale and license t
o partners
internat
ionally
. Our o
wn brands include E
v
erlast,
Lonsdale
, Karrimor and Slaz
enger
. The Group is also
proud t
o hav
e a number of sporting and ent
ertainment
personalities as ambassadors, as w
ell as supporting
sporting ev
ents.
Multi-Channel Ele
v
ation str
at
egy
Our Elev
ation str
ategy continues t
o w
ork t
ow
ards
impro
ving our offering t
o cust
omers across all our
channels, including market
ing, social media, product,
digital and in-st
or
e. This aims t
o enable the Company
,
along with our third-party br
and partners, to connect
with customers via a consist
ent v
oice across mult
iple
platforms, including online
, mobile and on the high
street. This str
ategy enables our st
or
es and our online
operations t
o complement each other
.
The websit
es for each o
f our core fascias in the UK,
including SPORTSDIRE
CT
.com, USC.
co.uk, FLANNELS
.
com, Houseoffraser
.co.
uk and GAME.
co.uk, hav
e
undergone significant enhancements t
o facilit
at
e
optimum appeal t
o consumers. Our product off
ering
across these cor
e fascias, both in-st
ore and online
,
aims to cr
eat
e a compelling shopping experience in
ke
y cat
egories that include, amongst others, f
ootball,
w
omen
’s, kids, running, cy
cling, lifestyle, f
ashion, luxury
and gaming.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
12
W
e offer product acr
oss a range of price points,
including good, better and best
. This enables us to
offer mor
e premium pr
oducts, which is net-ne
w t
o
the business. This giv
es consumers a great
er range
of choices for those who wish t
o shop for pr
emium
products, whilst still r
etaining our original entry
-lev
el and
continuity product off
erings.
Progr
ession of the Ele
v
at
ed St
ore Model
The Group remains firml
y committed t
o the Ele
vation
strat
egy across f
ascias and territ
ories building on the
momentum gained o
ver r
ecent y
ears.
F
or Sports Direct, the beginning of the financial period
w
elcomed the opening of the Oxford Str
eet, London
flagship stor
e follo
wing a significant r
efurbishment.
This stor
e show
cases the elev
ated flagship concept in
one of Europe
’s most iconic r
etailing destinations
. A
further flagship Sports Direct st
ore w
as opened after
the financial period end in Birmingham city centre
,
and additional mark
ets are being e
xplored t
o deliv
er
equiv
alent flagship stor
es.
T
o complement the elev
at
ed Sports Direct concept,
stor
e-in-st
ore models continue t
o be re
fined for our
E
vans C
ycles and GAME f
ascia’s pro
viding a more
div
erse offer in-st
ore
.
A significant milestone o
ver the period w
as the first
FLANNELS flagship stor
e opening in Sheffield, with
this large f
ormat incorporating ne
w categories such as
beauty and food & be
v
erage
. After the period end, the
FLANNELS flagship concept reached ne
w heights with
the opening of the largest FLANNELS st
ore t
o dat
e
in Liv
erpool, co
vering 120
,
000 sq ft o
v
er sev
en floors.
The new st
ore intr
oduces ne
w experiences such as the
boutique fitness brand Barry’s Boot
camp
.
Post period end a ne
w Jack W
ills concept stor
e w
as
launched in Derb
y
. T
o complement this new concept a
stor
e-in-st
ore model has also been de
v
eloped, having
been launched in selected USC locat
ions.
Finall
y, a ne
w E
v
erlast Gym concept w
as deliv
ered in
Denton, Manchest
er
. This elevat
ed concept sets the
new st
andar
d for the division, with more sit
es t
o follo
w
.
Our People
The Group
’s policy is to treat all our people with dignity
and respect
. Fr
asers Group colleagues w
ork t
ogether
across all ar
eas of the business and w
e are pr
oud that
Fr
asers Group Plc is one of the first public companies
in the UK to mak
e an elect
ed W
orkers’ R
epresent
ativ
e
a Board member
. W
e w
elcome all ne
w colleagues into
the Group f
ollowing the acquisitions in the y
ear and post
period end and those who joined us through the F
rasers
Group Ele
v
ation Progr
amme as w
ell as all other
new r
ecruits.
Remuner
ation and Re
w
ards
Our policy is to f
oster a r
e
w
ard-based culture that
enables our colleagues to shar
e in the success of the
Group
. It is Company policy t
o pay abo
v
e the statut
ory
National Minimum W
age, including rat
es that are
abo
ve the st
atut
ory National Living W
age for those
o
ver 23 y
ears of age in the UK. In addit
ion to this, in the
current period the Gr
oup paid aw
ards and incentiv
es of
appro
ximately £15.
0m, from which both permanent and
casual colleagues benefitt
ed.
Our F
earless 1000 share scheme will r
esult in 1,000 of our
F
earless colleagues, who liv
e and breathe our v
alues -
thinking without limits and tak
e the t
eam with y
ou, don
’t
hesitat
e and act with purpose and o
wn it and back
y
ourself - being eligible to r
eceiv
e share bonuses ranging
from £50k right up t
o £1m, if the shar
e price is at £10 at
the v
esting dates
. See note 25 f
or further details.
W
orkers
’ Repr
esentat
iv
e
The Fr
asers Group W
orkers
’ Represent
ativ
e is Cally
Price, a Manager at our Car
diff Bay stor
e. The W
orkers
’
Repr
esentativ
e has a unique insight int
o the Group
and will speak on behalf of the Group
’s workf
orce at all
scheduled meetings of the Board, in or
der to f
acilitat
e a
healthy and constructiv
e dialogue.
Colleague Engagement
In addition t
o the W
orkers Repr
esentativ
e
, the Company
has an ongoing dialogue with colleagues via an
initiativ
e called ‘Y
our Company
, Y
our V
oice.’ This is a
sy
stem wher
eb
y colleagues are able t
o raise an
y issues
of their choosing via a number of differ
ent rout
es, both
phy
sical and digital
. This feedback is passed to senior
management and the W
orkers’ R
epresent
ativ
e for
re
vie
w and appropriat
e action.
Our Global Third-Party Brand P
artners
W
e work with our leading thir
d-party global brand
partners and pro
vide significant prominence f
or them
with our customers acr
oss all our platforms.
Our third-party and Gr
oup brands ar
e managed by
central br
and and marketing t
eams. This centr
alised
structure significantl
y benefits the Group b
y enabling
the individual brands t
o participat
e in Group buying
and sourcing; aggr
egated supplier r
elationships and
enhanced supply chain disciplines; Group in
v
entory
monitoring and r
eplenishment; and more inspir
ed and
harmonious visual merchandising in-st
ore
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
13
OUR STRA
TE
G
Y
Fr
asers Group belie
v
es in the pow
er of brands. W
e serve
them, nurture them, and in
v
ent them. T
oday more than
ev
er, the W
orld looks to Br
ands for ideas, inspir
ation
and meaningful change, cr
ex
ating v
alue for people and
elev
ating the e
v
eryday
.
Our strat
egy is aligned t
o this purpose and is based on
three int
erconnect
ed focus pillars – the br
ands w
e sell,
our digital off
ering and our phy
sical stor
es. These are
supported b
y a set of enablers, focused on our people,
sy
stems, aut
omation and dat
a. By continuing t
o ele
vat
e
our performance acr
oss all areas of our str
ategy
, w
e will
achiev
e our vision: to build the W
orld’s most compelling
brand ecos
yst
em.
TO
BUILD
THE
W
ORLD’S
MOST
COMPELLING
BRAND
E
COSYSTEM
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
14
Strat
egy
Key Achie
v
ements In
FY22
Priorities for
FY23
Brands
Our customers look t
o brands t
o elev
ate their
ev
eryday
. T
he
y want t
o have the choice of the
W
orld’s best brands, whether in sports, lif
estyle or
luxury
. Accessibility is essential for our success. T
o
achiev
e our vision, we f
ocus on building ex
cellent
relationships with our br
and partners, unlocking
the best talent and pr
oduct.
This pow
erful brand offering is support
ed b
y our
complementary r
ange of own br
ands, where w
e
aim to off
er unrivalled choice and v
alue, and
drive gr
owth thr
ough meaningful partnerships
and brand collaborations
. W
e will continue
to consider str
ategic acquisitions that bring
attractiv
e brands int
o the Group.
During FY22, our achiev
ements included:
•
Further gr
owing our r
elationships with ke
y
brand partners, such as Nik
e, adidas, Gucci,
Balenciaga, Mulberry and Hugo Boss, and
establishing ne
w, inno
v
ative br
and partners
such as Hermes Beauty, On Running
and Jacquemus.
•
Supporting our ke
y strat
egic brand partner
,
Hugo Boss A
G, with an increased Strat
egic
Inv
estment, reflecting our gr
owing r
elationship,
our confidence in its future and the pot
ential
for syner
gies between our businesses
.
During FY23, our priorities ar
e to
:
•
Continue to nurtur
e and strengthen our brand
partner relationships and further impr
ov
e our
access to their best pr
oduct and talent.
•
Inv
est in and gro
w our own-br
and portfolio, t
o
ensure the
y remain rele
vant t
o consumers and
pioneer the market.
•
Inv
est in the best talent for our businesses, so
that our partners continue to hav
e consistent
and effectiv
e communication, to ensur
e that
they hav
e clear insight into the businesses
’
strat
egic goals.
Digital
W
e aim t
o elev
ate our digit
al experience t
o meet
the demands of consumers and brands and offer
an outstanding e
xperience.
Through our digital Ele
v
ation strategy
, w
e
are continuing t
o inv
est more than £100m t
o
elev
ate our pr
oposition across our channels. This
inv
estment has and will further build on our core
digital f
oundations, to support future gr
owth
and agility
.
A ke
y focus remains our online cust
omer
experience
, which includes inv
estment into
platforms that will rein
vent engagement, dat
a,
marketing and cust
omer service.
During FY22, our achiev
ements included:
•
Significantly impro
ving the digital consumer
experience acr
oss all touchpoints within the
Group
.
•
Inv
esting and working alongside industry
leaders, ensuring our web business has
remained rele
v
ant with strong performance
.
•
Integr
ated 360 mark
eting initiativ
es to
demonstrat
e a cohesive and bett
er reflecting
brand image for our f
ascia’s.
During FY23, our priorities ar
e to
:
•
Continue to in
vest in our online r
etail
capabilities, particularly on the luxury
side of the business, which will focus on
merchandising, brand adjacencies and visual
represent
ation.
•
Pioneer our approach t
o digital mark
eting
through the lat
est trends and consumer
insights, to ensur
e we ar
e industry leaders
within this market.
•
Inv
est in our payment platform strat
egy
.
Phy
sical
The elev
ation and concept innov
ation of our
physical st
ore portf
olio is a fundamental part of
our Group-wide strat
egy
.
Across our thr
ee pillars of Sports, Premium and
Luxury, w
e will continue t
o:
•
Inv
est in new str
ategic locations and
acquisitions.
•
Elev
ate and impr
ov
e our current est
ate
,
particularly for Sports Dir
ect.
•
Give consumers access t
o unrivalled luxury
destinations across the UK.
•
Inv
est in ret
ail efficiencies which will impro
ve
our operating, t
echnology, and st
ock
capabilities.
During FY22, our achiev
ements included:
•
Opening a series of our new-concept flagship
stor
es, including:
•
FLANNELS Sheffield and FLANNELS
Leicester
, which also saw the deliv
ery of
our first ev
er food & be
ver
age concepts
and the launch of
FLANNELS Beauty.
•
Sports Dir
ect Birmingham New Street
•
Continuing to open ne
w location stor
es
across UK and Europe
, including Brighton,
Southampton, and Hertf
ordshire
.
•
Significantly inv
esting in our flagship
FLANNELS Liverpool on Park
er Street, which
opened to gr
eat acclaim in
June 2022.
•
Committing to o
ver 5
00,
000 sq. ft of v
acant
ret
ail space in the Irish market with recent
stor
e openings in Derry, Cork,
and Galway
.
•
Acquiring Boucher Ret
ail Park in
Northern Ireland.
During FY23, our priorities ar
e to
:
•
Roll out new ele
v
ated st
ores across
the Group
.
•
Inv
est in new concepts and r
etail partner
collaborations acr
oss ke
y categories which
will focus on fitness, home, and beauty
.
•
Dev
elop and impro
ve oper
ational ex
cellence
across our ret
ail portfolio
.
•
Progress the ongoing ele
v
ation and
impro
vement of our e
xisting stor
e portfolio.
•
Strat
egise and select ke
y destinations across
Europe for e
xpansion.
Enablers
W
e need t
o have t
alented people who will
enable us to succeed, support
ed by tr
aining that
empow
ers them to achie
v
e.
T
o attract new t
alent, we will cont
inue to de
velop
our employ
er brand, while further impr
oving
internal communication t
o drive engagement
with existing colleagues.
W
e will also continue t
o inv
est in our syst
ems and
automation t
o enhance efficiency
, and in our data
capabilities, so we can mak
e data-driv
en decisions.
During FY22, our achiev
ements included:
•
Doubling down on our in
vestment in people
,
launching a new car
eers websit
e, introducing
new r
oles and programmes f
ocused on
learning and dev
elopment, rein
vigorating our
ret
ail pay rates and incent
ives and recruit
ing
ov
er 60 ne
w high-potential people int
o our
early careers pr
ogrammes.
•
Connecting through r
egular communication
and videos, to cr
eate transpar
ency with our
Leadership team.
•
Further in
vesting in aut
omation, no
w claiming
one of the largest aut
o stor
es in the W
orld.
•
Enhancing data sharing with suppliers
through electronic dat
a inter
change (EDI),
impro
ving management of stock and
streamlining supplier payment processes
.
During FY23, our priorities ar
e to
:
•
Build out clear career path
way
s in our
Commercial function, t
o enable the gro
wth
we need in this ar
ea ov
er the coming y
ears.
•
Continue to driv
e a high-performance cultur
e,
with the introduction of mor
e regular updates
and support around colleague performance
.
•
Significantly expand our R
etail de
velopment
offering.
•
Launch a new int
ernal comms and
engagement platform t
o better connect
people across our business and share k
e
y
updates and successes.
•
Continue onboarding pr
oducts and suppliers
onto EDI.
•
Capture cust
omer data and insights through
gro
wth in our digital business, digit
al
marketing and the r
oll-out of our loy
alty
programme
.
KE
Y PERF
ORMANCE INDICA
T
ORS
The Board manages the Group
’s performance b
y re
viewing a number o
f ke
y performance indicat
ors (KPIs).
The KPIs are discussed in this Chief Ex
ecutive
’s Report and Business Re
vie
w
, the Financial Re
vie
w
, the Environment
section and the ‘
Our People’ section.
The table belo
w summarises the Group
’s KPIs.
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
52 weeks ended
26 April 2020
Group re
v
enue
£4,80
5.3m
£3,6
25.3m
£3,
957
.
4m
Reported PB
T
£335.6m
£8.5m
£143.5m
Adjusted PB
T
(1)
£339
.8m
(£39
.9m)
£115.
1m
Cash flow fr
om operating activities
£628.
9m
£578.3m
£4
25.2m
Net assets
£1,308.6m
£1,211.0m
£1,280
.3m
Non-Financial
KPI
s
Number of ret
ail stor
es
(2)
1,552
1,547
1,534
W
orkfor
ce turnov
er
38.3%
28.
9%
28
.6%
Packaging r
ecycling
(3)
14,
405 t
onnes
11,
164 tonnes
12,358 tonnes
The Direct
ors hav
e adopted Alt
ernativ
e Performance
Measures (APM’s). APMs should be consider
ed in
addition t
o IFRS measures. The Direct
ors belie
v
e
that Adjusted pr
ofit bef
ore t
ax (PBT) pro
vide further
useful information f
or shareholders on the underl
ying
performance of the Gr
oup in addition to the r
eport
ed
numbers, and are consist
ent with ho
w business
performance is measur
ed internall
y
. They ar
e not
recognised pr
ofit measures under IFRS and may not be
directly compar
able with ‘
adjusted’ or ‘
alternativ
e’ profit
measures used b
y other companies.
Fr
om FY22 management changed the main r
eporting
KPI from Underl
ying EBITD
A to Adjust
ed PBT
. Adjusted
PBT is pr
ofit befor
e t
ax less the effects of e
x
ceptional
items, r
ealised for
eign ex
change, fair v
alue adjustments
to deriv
ative financial instruments included within
Finance income/
costs, fair v
alue gains/losses and pr
ofit
on disposal of equity deriv
ativ
es, and share schemes
.
This change has been re
view
ed b
y the Audit C
ommittee
which has appropriat
ely challenged management on
the present
ation and the adjusting it
ems included in
this APM.
(1)
The method for calculating adjusted PB
T is set out in note 4 and the Glossary
.
(2)
Excluding associat
es and stores in the Balt
ic states that tr
ade under fascias other
than SPORTLAnd or SPOR
TSDIRECT
.com. and other niche fascias. Includes GAME
and Sofa.com concessions.
(3)
Cardboar
d and plastic recycling
.
Management has tak
en this decision for the f
ollo
wing
reasons:
•
with the continued significant inv
estment in and roll
out of our Elev
ation strategy
, on both the ph
ysical
and digital fr
onts, the import
ance of depreciation
and amortisation t
o both the Board and our
stak
eholders in t
erms of assessing performance has
gro
wn;
•
our understanding fr
om a number of financial
sectors including the banking sect
or is that
accounting for IFRS 16 Leases is becoming an
increasingl
y important consider
ation; and
•
with this new measur
e being introduced w
e are
trying to align with the F
inancial Reporting Council
’s
thematic st
andpoint with regard t
o ‘
alternativ
e
performance measur
es’ as far as possible whilst
ret
aining a degree of int
erpr
etation giv
en fact
ors
outside of our control
, such as FX and fair v
alue
mo
vements in our Str
ategic In
v
estments which
are e
x
ceptionally difficult t
o for
ecast, particularly
months in adv
ance.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
16
Group R
e
v
enue
The Board considers that this measurement is a k
e
y
indicator o
f the Group
’s gr
owth.
Report
ed Pr
ofit Befor
e T
ax
Report
ed PBT sho
ws both the Gr
oup
’s trading and
operational e
fficiency, as w
ell as the eff
ects on the
Group of e
xt
ernal fact
ors as shown in the f
air v
alue
mo
vements in Str
ategic in
v
estments and FX.
Adjust
ed Profit Bef
or
e T
ax
Adjusted PB
T sho
ws ho
w w
ell the Group is managing
its ongoing trading perf
ormance and controllable costs
and theref
ore the o
v
erall perf
ormance of the Group
.
Cash Inflo
w from Oper
ating Act
ivities
Cash inflo
w from oper
ating activities is considered
an important indicat
or for the Business o
f the cash
av
ailable for inv
estment in the Ele
v
ation strat
egy
.
Net Assets
The Board considers that this measurement is a k
e
y
indicator o
f the Group
’s health.
Number of Ret
ail St
ores
The Board considers that this measure is an indicat
or
of the Group
’s gro
wth. The Group
’s Ele
vat
ion strat
egy
is replacing older st
ores and of
ten this can r
esult in the
closure of tw
o or thr
ee stor
es, to be r
eplaced b
y one
larger ne
w generation st
or
e.
W
orkfor
ce T
urnov
er
The Board considers that this measure is a k
e
y indicat
or
of the contentment o
f our people. for mor
e det
ails ref
er
to the r
et
ention section of the ‘
Our People’ section of this
report.
Pack
aging Recy
cling
The Board considers that this measurement is a k
e
y
indicator o
f our impact and commitment to the best
envir
onmental pr
actices. for mor
e det
ails ref
er to the
envir
onment section of this report
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
17
CHIEF EXE
CUTIVE’S REPOR
T AND
BUSINESS RE
VIE
W
Clear Vision
W
e are accelerating our str
at
egy to pr
ovide consumers
with access to the W
orld’s best sports, premium and
luxury brands b
y pr
oviding a W
orld-leading retail
ecosy
stem. Aligned with this vision, w
e hav
e defined the
Group
’s purpose:
T
o elevate the lives of the many b
y giving them access to the
W
orld’s best brands and e
xperiences.
T
o deliver on this mission and purpose
, and to maint
ain
the momentum creat
ed b
y the Elev
ation strategy
, w
e
will continue t
o work closel
y with our ke
y brand partners
such as Nik
e, Hugo Boss and St
one Island, t
o align
plans. Our brand partnerships ar
e deeper and stronger
than they hav
e ev
er been in the Group
’s history
. These
relationships will allo
w us t
o continue impro
ving our
product off
ering and customer e
xperience, b
y creating
the best platforms t
o enable our brands t
o succeed.
W
e are also rede
v
eloping our sustainability str
at
egy to
ensure w
e set ambitious t
argets and meet them in
the coming y
ears.
Strat
egic Deliv
ery
Our focus has been on e
x
ecuting our Elev
ation
strat
egy
, with inv
estments across our st
or
e portfolio,
brand partnerships and further inno
v
ations across our
operations. The str
ategic in
v
estments w
e made during
the y
ear offer e
x
citing new opportunities f
or Fr
asers
Group
, whilst also supporting the long-t
erm future of the
existing r
et
ail businesses, saving the jobs and
liv
elihoods of many
.
Our recent acquisition of Studio R
etail Limit
ed pro
vides
expertise and s
ynergies which will enable us t
o deliv
er
flexible payment models in the futur
e. Our post period
end acquisitions of the digit
al-first fashion brands
Missguided and I Saw It F
irst allo
ws us t
o unlock the
latest tr
ends in w
omen
’s fashion and e-commer
ce.
T
o strengthen our European e
xpansion str
ategy
,
subsequent to the period end w
e acquired the leading
Danish sport ret
ailer SportMast
er
.
W
e will also continue to div
est non-core assets that f
all
outside our vison and ke
y f
ocus segments, such as our
post period end disposal of Bob
’s Stores and E
astern
Mountain Sports in America. F
urther det
ails can be
found within not
e 16.
Increased PB
T Guidance
W
e are aliv
e to the challenging economic conditions at
present, with inflationary pr
essures and suppl
y chain
disruption causing challenges for man
y businesses
operating in the r
etail sect
or
. As well as the significant
increase in gener
al running costs, w
e are fighting
against a fundamentall
y flaw
ed business rat
es sy
stem
which is y
et to be addr
essed. Linked t
o these ar
e the
cost-of
-living pressur
es facing man
y of our consumers.
As a result, w
e hav
e been conserv
ativ
e in our forecast
ing
for the ne
xt financial y
ear
. How
e
ver
, with our prov
en
strat
egy and strong oper
ational backbone, w
e are
confident of achieving a health
y gr
owth t
o betw
een
£450m and £500m of Adjust
ed PB
T
.
St
ore Openings
Our Elev
ation str
ategy k
eeps e
x
ceeding our
expect
ations. Its str
ength is demonstrat
ed b
y our recent
stor
e openings of FLANNELS Liv
erpool and Sports
Direct Birmingham.
FLANNELS Liverpool is one of the lar
gest luxury ret
ail
inv
estments in the UK t
o date
. This re
v
olutionary
sev
en floor, 120
,000 sq. f
t stor
e in a historic building
brings a ground-br
eaking fashion, beauty
, w
ellness
and rest
aurant e
xperience t
o the North of England. It
boasts a leading collection of e
xperiences including
boutique fitness phenomenon Barry’s Boot
camp, the
first ev
er of its kind in a retail en
vironment. Our r
egional
flagships do not only benefit the ph
ysical en
vironment,
but also allo
w us to bring in ne
w cat
egories and brands
that our consumers can access online through our
omnichannel platforms.
Sports Direct Birmingham f
ollow
s our Oxford Str
eet,
London, opening last summer
. Both stor
es demonstrat
e
the pinnacle of our journey and sho
wcase the strength
of our Elev
ation strategy
. T
he consumer e
xperience
has been enhanced at ev
ery stage including digital
touchpoints, act
ivations and int
egr
ations of other
group br
ands such as E
vans, USC and G
AME, giving
access to a wider v
ariety of products and experiences.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
18
Big Belie
v
ers in Ph
ysical R
et
ail
W
e have consist
ently criticised the ar
chaic business rat
es
regime and the need f
or ref
orm. Unfortunat
ely
, these
issues remain unaddr
essed and are no
w coupled with
soaring construction and st
ore fit out costs, making
for an e
xtremely challenging en
vironment t
o open and
operat
e ph
ysical st
ores. While others hav
e shied aw
ay
from committing t
o phy
sical ret
ail in these difficult times,
w
e are con
vinced that consumers will still flock to st
ores
for gr
eat brands and e
xperiences. This belief has allo
wed
us to build r
emark
able momentum, bucking market
trends. W
e will continue to in
vest in ne
w st
ore openings,
refurbishments and flagship opportunit
ies, to bring
the W
orld’s best brands and experiences t
o unt
apped
markets
.
Digit
al and Operational T
ransformat
ion
As part of our gro
wth str
ategy
, w
e are continuall
y
inno
vating acr
oss our supply chain and logistics t
o
driv
e further efficiencies. At our Shir
ebrook sit
e, home
to our distribut
ion centre, w
e have inv
ested o
ver £200m
in automat
ion. This makes us the biggest Aut
oSt
ore in
Europe and v
astly impr
o
ves our digit
al capabilities.
This has pro
vided us with significant operational
efficiencies and support
ed the smooth integr
ation of
acquisitions int
o the Fr
asers Group platform, enabling
both our o
wn brands and brand partners t
o benefit fr
om
our W
orld-leading operations and logistics capabilities.
At Shir
ebrook, w
e no
w have appr
o
ximat
ely 2 million sq.
ft of w
arehousing, which enables us t
o pr
ocess up to 4
million units per w
eek. This still leaves us with capacity
for further gr
owth.
W
e have continued t
o it
erat
e and impro
v
e across the
entirety of our F
rasers Gr
oup platform. Most not
ably
w
e have trialled a ne
w headless e-commer
ce platform
on our Malaysian sit
e, with a vie
w t
o roll-out acr
oss
the Group
. This will be a transformativ
e step for the
Group
, allowing us t
o be mor
e agile when entering ne
w
territ
ories or deplo
ying changes t
o our technology st
ack.
Global Gro
wth
W
e also have e
xt
ensive ambitions t
o gr
ow the business
outside of the UK and will be exploring the pot
ential
for further int
ernational e
xpansion through acquisitions,
joint v
entures and or
ganic openings. W
e have alr
eady
begun to e
xpand our oper
ational capabilities in Europe
,
with a new de
v
elopment sit
e in Bitburg, German
y set to
open in the coming y
ears. This will have up t
o 2.
4million
sq. ft of w
arehouse and distribution space, handling
appro
ximately 300 million units annually
. This will
support our gro
wth across cont
inental Eur
ope.
T
alent and Partners
T
o support the Group in e
x
ecuting our ambitious strat
egy
,
I am proud t
o hav
e built an ex
cellent senior team made
up of outstanding t
alent. The
y are the driving f
orce
behind the Group
’s ambitious culture, bringing t
ogether
dynamic, talent
ed and motiv
at
ed teams t
o driv
e
gro
wth across the business
. I have made it a priority
to str
engthen Fr
asers Group
’s management team b
y
creating se
v
eral ne
w roles
. Alongside the management
team, w
e will look to support the business b
y adding
rele
v
ant talent and e
xpertise t
o the Board
when appropriat
e.
Finall
y, thank y
ou t
o our people and partners for y
our
continued support. I am pr
oud of the steps w
e hav
e
tak
en this y
ear in transf
orming the traject
ory of Fr
asers
Group and look f
orw
ard t
o another ex
citing year of
inno
vation, impact and gr
o
wth.
Michael Murray
Chief Ex
ecutiv
e Officer
20 Sept
ember 2022
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
19
Perf
ormance Ov
ervie
w
Group r
ev
enue incr
eased b
y 32.5% to £4
,80
5.3m in
the y
ear
. UK Sports Retail r
ev
enue increased by 3
4.
1%
to £2,
640
.
1m, Premium Lif
estyle re
venue incr
eased b
y
43.
6
% to £1,
056.
6m, European Ret
ail r
ev
enue incr
eased
b
y 28.4
% to £790.2m, R
est of W
orld Retail r
ev
enue
decreased b
y 1.6
% to £150
.3m and Wholesale &
Licensing re
v
enue increased b
y 9
.7% t
o £168.
1m.
Group gr
oss margin in the y
ear has impro
v
ed compared
with the prior y
ear with a small increase of 130 basis
points from 42.2% t
o 43
.5%. UK Sports Ret
ail margin
increased 100 basis points t
o 43.
1% (FY21: 42.
1%),
largely due t
o the continuall
y impro
ving product
mix. Premium Lif
estyle’s gr
oss margin w
as 44.9%
(FY21:44
.9%), consist
ent with the prior y
ear as product
margins w
er
e maintained o
v
er the period. European
Ret
ail gross mar
gin increased t
o 42.7% (FY
21: 39
.0%),
largely due t
o continuall
y impro
ving product mix in
the core business. R
est of W
orld Retail gr
oss margin
increased t
o 51.
0% (FY21: 4
1.9%), lar
gely due t
o
decreased in
v
entory pr
ovisions within the US businesses
as inv
ent
ory management w
as significantly impro
v
ed.
Wholesale & Licensing gr
oss margin decr
eased to 37
.5%
(FY21: 44
.
1%), largely due t
o pr
oduct mix within the US
wholesale division.
Group Selling, distribution and administr
ativ
e expenses
increased b
y 20
.5% largel
y driven b
y increased stor
e
costs due to the r
eopening of st
ores aft
er lock
downs
due to the C
ovid-
19 pandemic, no repeat of the prior
y
ear Gov
ernment support schemes such as CJRS
(C
oronavirus Job Ret
ention Scheme), business rat
es
relief in the prior y
ear particularly in House of Fraser and
increased in
v
estment in marketing
.
There w
ere pr
operty relat
ed impairments in the period
tot
aling £227
.0m (FY21: £317
.0m), including £7
6.8m in
relation t
o right
-of-use assets (FY21: £168.2m
), £106.5m
in relation t
o freehold land and buildings (FY
21: £84.
4m),
£2.0m in r
elation t
o long-t
erm leasehold (FY21: £3.
9m),
£40.
7
m of other property
, plant and equipment (FY21:
£59
.
9m) and £1.0m o
f inv
estment properties (FY
21:
£0.
6m). Property r
elated impairments hav
e been
recognised f
ollowing a r
eassessment of future e
xpect
ed
cash flo
ws largely driv
en by supply chain issues, the
increased cost of living, the change in consumer
behaviour in mo
ving from ph
ysical t
o online shopping,
the impact of direct
-t
o-consumer and incr
easing costs
as a result of Br
exit
. Further det
ails including sensitivity
analysis ar
e included within not
e 2.
Depreciation and amortis
ation charges hav
e decr
eased
b
y 15.4
% to £260
.0m (FY
21: £307
.5m) largely due t
o prior
period impairment and a decrease in fr
eehold land and
buildings depreciation, f
ollowing the change in use
ful
economic life estimat
e in the period. See accounting
policies for further det
ails.
As a result, Adjust
ed PBT f
or the y
ear w
as £339
.8m (FY21:
loss £39
.
9m). Ex
cluding acquisitions and on a currency
neutral basis, Adjust
ed PBT incr
eased t
o £371.9m fr
om
a loss of £22.
1m. UK Sports Ret
ail Adjust
ed PBT w
as
£196.
9m up from a loss of £12.8m in FY
21, while Premium
Lifestyle Adust
ed PBT w
as £10.5m, up from a loss of
£7
.8m in FY21. European Ret
ail Adjust
ed PBT w
as £88.
6m,
up from a loss of £5
1.3m in FY21. Rest of W
orld Retail
Adjusted PB
T w
as £32.7
m, up fr
om £12.2m in FY21 and
Wholesale & Licensing Adjust
ed PBT decr
eased to £11.
1m
from £19
.8m.
Group pr
ofit befor
e tax incr
eased t
o £335.6m (FY
21:
£8.5m), driv
en b
y the strong r
eopening of st
ores aft
er
lockdo
wn, new FLANNELS stor
es, continued gro
wth
in online in the premium lif
estyle segment, continued
operating e
fficiencies, and the FY21 comparativ
e
including Co
vid-
19 relat
ed lockdo
wns, mitigat
ed to some
ext
ent b
y property r
elat
ed impairments of £227
.0m.
Basic EPS for the y
ear increased t
o 52.
9p
(FY21: loss of 16.5p
).
W
ithin other comprehensiv
e income, the Gr
oup
’s
hedging contracts incr
eased b
y £43.8m (FY21: decr
eased
b
y £16.5m) as a r
esult of the fair v
alue mo
vements in the
period. W
ith regar
d to the Gr
oup
’s long-t
erm financial
assets, fair v
alue mo
v
ements have r
esult
ed in a loss of
£8.
1m (FY21: gain of £77
.3m) in the period.
The Group generat
ed cash inflo
ws fr
om operating
activities during the y
ear of £628.
9m, up fr
om £578.3m in
the prior period, largely due t
o the incr
ease in operating
profit y
ear on y
ear
, offset b
y the increase in in
vent
ory
.
T
otal Net assets as at the period end t
ot
alled £1,308.6m
compared t
o £1,211.0m in the prior period, lar
gely due t
o
the profit
ability of the business mitigat
ed b
y significant
share buybacks.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
20
RE
VIE
W B
Y BUSINESS SE
GMENT
UK Sports Ret
ail
The UK Sports Retail segment includes all o
f the
Group
’s sports retail and USC st
or
e operations in the
UK (including Northern Ireland), all of the Gr
oup
’s online
businesses (e
x
cluding Bob
’s St
ores, E
astern Mount
ain
Sports, Baltics and Malaysia), the Gr
oup
’s gyms, E
vans
C
y
cles, GAME UK st
ores and the Group
’s Shirebrook
campus operations. UK Sports R
etail is the main driv
er of
the Group and accounts f
or 54.
9% (FY
21: 54.3
%)
of Group r
ev
enue.
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£m)
(£m)
UK Sports Retail R
ev
enue
2,640
.1
1,968
.5
Cost of Sales
(1,503.3)
(1,
139
.2)
Gross Pro
fit
1,
136.8
829.3
Gross Margin %
43
.1
42
.1
Re
venue incr
eased 34
.
1% to £2,
640
.
1m. Ex
cluding
acquisitions, re
v
enue increased 30
.
1%, largel
y due to
the strong r
eopening of stor
es aft
er the last lockdo
wn in
March 2021 and the compar
ativ
e period being impacted
b
y lockdo
wns as a r
esult of Co
vid-
19.
UK Sports Ret
ail gross mar
gin increased t
o 43.
1%
(FY21: 42.
1%), largely due t
o the continually impro
ving
product mix.
Adjusted PB
T for UK Sports R
etail w
as £196.
9m (FY21:
loss of £12.8m), largel
y due to the str
ong reopening of
stor
es aft
er the last lockdo
wn in Mar
ch 2021 and the
comparativ
e period being impact
ed b
y lockdo
wns as
a result of Co
vid-
19 and a reduction in property r
elated
impairments in the current period (FY
22: £103.
4m
compared t
o FY21: £201.
9m).
UK Sports Ret
ail St
ore P
ortfolio
(3)
24 April 2022
25 April 2021
England
387
394
Scotland
37
39
W
ales
30
31
Northern Ireland
19
21
Isle of Man
1
1
GAME UK (1)
259
247
Ev
ans C
ycles (2)
57
48
USC
18
25
T
otal
808
806
Opened
90
93
Closed
(88)
(98)
Acquired
-
42
Area (sq.
ft.)
appro
x. 6.7
m
appr
ox. 6
.5m
(1)
The GAME UK store numbers include 12
5 concessions operating within
Sports Direct fascia st
ores (FY21: 71) and does not include BEL
ONG arenas.
(2)
The Ev
ans Cy
cles store numbers include 2 concessions oper
ating within
House of Fraser f
ascia stores (FY
21: 1).
(3)
T
able excludes the Gr
oup’s st
andalone gyms.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
21
Premium Lif
estyle
Premium Lif
estyle consists of FLANNELS, Cruise, v
an
mildert, House of Fr
aser
, Jack W
ills and Sofa.
com fascia
stor
es and corresponding w
eb sales.
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£m)
(£m)
Gross T
ransaction V
alue (GTV)
(1)
1,
133.8
78
8
.1
Rev
enue
1,056
.6
735.6
Cost of Sales
(581.8)
(405.3)
Gross Pro
fit
4
74
.
8
330.3
Gross Margin %
44
.9
44
.9
Adjusted PB
T
10.5
(7
.8)
(1)
GTV being gross sales net of V
A
T
, discounts and returns, and gross s
ales where the
Group acts as agent.
Re
venue gr
e
w 43.6
% to £1,
056.6m. This w
as lar
gely due
to ne
w FLANNELS st
ores, continued gr
owth in online
,
gro
wth in House of F
raser
, and the impact of Co
vid-
19
relat
ed lock
downs on the prior period compar
ativ
e.
Gross mar
gin w
as 44.
9%, consist
ent with the prior year
as product mar
gins w
ere maint
ained ov
er the period.
It should be noted that despit
e y
ear-on-y
ear trading
impro
v
ements in the House of Fr
aser business, business
rat
es in their current f
orm continue to be a significant
and disproportionat
e cost t
o House of Fr
aser
.
Adjusted PB
T for Pr
emium Lifestyle incr
eased from a
loss of £7
.8m in FY21 to a pr
ofit of £10.5m f
or the period,
largely due t
o ne
w FLANNELS stor
es, continued gro
wth
in online, the str
ong reopening of st
ores aft
er the last
lockdo
wn in March 2021, offset b
y more significant
property r
elated impairments in the curr
ent period (FY22:
£103.5m compar
ed to FY
21: £40.
9m).
Premium Lif
estyle St
ore P
ortfolio
24 April 2022
25 April 2021
FLANNELS
53
41
Jack Wills
(2)
52
60
House of Fr
aser / Frasers
(2)
39
43
Sofa.com
(1)
23
24
Cruise
5
5
18 Montrose
4
3
van mildert
1
1
Garment Quarter
1
1
Psy
che
1
1
T
otal
179
179
Opened
21
12
Closed
(21)
(17)
Acquired
-
5
Area (sq.
ft.)
appro
x. 4.
0m
appro
x. 4.2m
(1)
Sofa.com st
ore numbers include 17 concessions operating
within House of Fr
aser
fascia stor
es (FY21: 17).
(2)
Jack Wills and F
rasers stor
es in Republic of Ireland are sho
wn in the European
store numbers as opposed t
o the Premium Lifestyle st
ore numbers.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
22
European R
etail
The European Ret
ail division includes the Group
’s sports
ret
ail st
ore management and operat
ions in Europe,
including the Group
’s European distribution centres in
Belgium and Austria, st
ores and corr
esponding w
eb
business in the Baltic regions and G
AME Spain stor
es
and corresponding w
eb business.
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£m)
(£m)
Rev
enue
790.2
6
15.2
Cost of Sales
(452.
9)
(375.5)
Gross Pro
fit
337
.3
23
9.7
Gross Margin %
42.7
39.0
Adjusted PB
T
88.6
(51.3)
Re
venue incr
eased 28.
4
% to £790
.2m. On a currency
neutral basis and e
x
cluding acquisitions, European R
etail
re
v
enue increased b
y 33.
4
%, largely due t
o t
emporary
stor
e closures as a r
esult of Co
vid-
19 in the prior period
comparativ
e
.
Gross mar
gin increased t
o 42.7%, lar
gely due t
o
continually impr
oving pr
oduct mix in the core business.
Adjusted PB
T for Eur
opean Ret
ail impro
v
ed from a loss of
£51.3m in FY21 t
o a pr
ofit of £88.6m f
or the period, largely
due to the str
ong reopening of st
or
es after lock
do
wn, the
comparativ
e period being impact
ed b
y lockdo
wns as a
result of Co
vid-
19, especially in Ir
eland and significant
property r
elated impairments in the prior period of
£71.6m compar
ed to £17
.
9m in the current period.
All of the follo
wing st
ores ar
e operat
ed b
y companies
wholly o
wned b
y the Group
, ex
cept Estonia and Latvia
where the Gr
oup owns 6
0.
0% and Lithuania where the
Group o
wns 51%.
European R
etail St
ore Portf
olio
(1)
24 April 2022
25 April 2021
GAME Spain
235
236
Republic of Ireland
(1)
43
39
Belgium
34
34
Portugal
21
20
Estonia
(2)
20
21
Austria
19
20
Lithuania
(2)
19
18
Latvia
(2)
18
17
Poland
13
14
Slov
enia
13
13
Czech Republic
12
12
Spain
10
9
Hungary
8
8
C
yprus
6
6
Holland
5
5
Slov
akia
5
5
Fr
ance
4
4
Lux
embourg
2
2
Germany
1
2
Iceland
1
1
T
otal
489
486
Opened
12
13
Closed
(9)
(38)
Acquired
-
-
Area (sq.
ft.)
appro
x. 3.7
m
appro
x. 3.6m
(1)
Excluding Heat
ons fascia stor
es
(2)
Includes only stor
es with SPORTSDIRECT
.com and SPORTLAnd fascias.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
23
Rest of W
orld Ret
ail
Rest of W
orld Ret
ail includes sports stor
es in Malaysia
trading under the Sports Dir
ect fascia, r
etail st
ores in the
US trading under Bob
’s Stores and E
astern Mount
ain
Sports and their online businesses. In Malaysia the st
ores
are 5
1.0% o
wned b
y the Group
.
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£m)
(£m)
Rev
enue
150.3
152.7
Cost of Sales
(73.6)
(88.7)
Gross Pro
fit
76.
7
64.0
Gross Margin %
51.0
41.9
Adjusted PB
T
32.7
12.2
(1)
GTV being gross sales net of V
A
T
, discounts and returns, and gross s
ales where the
Group acts as agent.
Re
venue decr
eased 1.6
% to £150
.3m, mostly due t
o the
US businesses offset b
y an increase in Malay
sia. Gross
margin incr
eased to 5
1.0% fr
om 41.
9%, largel
y due to
decreased in
v
entory pr
ovisions within the US businesses,
as inv
ent
ory management w
as significantly impro
v
ed.
Adjusted PB
T w
as £32.7
m, compar
ed to £12.2m in FY
21,
largely due t
o o
v
erall oper
ating efficiencies in the US
businesses.
Subsequent to the period end the Bob
’s Stor
es and
East
ern Mount
ain Sports fascias and their corresponding
e-commerce off
erings w
ere disposed of
.
Rest of W
orld Ret
ail St
ore P
ortfolio
24 April 2022
25 April 2021
Malaysia
34
33
Bob
’s Stor
es
21
22
East
ern Mountain Sports
21
21
T
otal
76
76
Area (sq.
ft.)
appro
x. 1.3m
approx. 1.3m
Wholesale & Licensing
The portfolio of Group br
ands includes a wide v
ariety of
W
orld-famous sport and lifestyle br
ands. The Group
’s
Sports Ret
ail division sells products under these br
ands
in its stor
es, and the Wholesale & Licensing division
sells the brands thr
ough its wholesale and licensing
activities. The Wholesale & Licensing division continues
to sponsor a v
ariety of prestigious ev
ents and r
etains a
v
ariety of globally recognised celebrities and sport
ing
prof
essionals as brand ambassadors
.
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£m)
(£m)
Wholesale
145.3
131.5
Licensing
22.8
21.8
T
otal Re
v
enue
168.
1
153.3
Cost of Sales
(105.
0)
(85.8)
Gross Pro
fit
63
.1
6
7.
5
Gross Margin %
3
7.
5
4
4.1
Adjusted PB
T
11.
1
19.8
Re
venue incr
eased b
y 9
.7% t
o £168.
1m. Wholesale
re
v
enues w
ere up 10
.5% t
o £145.3m and Licensing
re
v
enues increased 4
.6
% t
o £22.8m, largely due t
o the
prior period comparativ
e being impact
ed b
y Co
vid-
19.
T
otal gr
oss margin decr
eased to 37
.5% (FY21: 44.
0%),
largely due t
o pr
oduct mix within the US wholesale
division. Adjusted PB
T decreased 4
3.
9% to £11.
1m (FY21:
£19
.8m), largely due t
o impairment of goodwill in
the period.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
24
PR
OPER
TY RE
VIE
W
The beginning of the financial year w
elcomed the
opening of the re
furbished Sports Direct on Oxfor
d
Street, London, sho
w
casing the elev
ated stor
e model
in one of Europe
’s most iconic r
etailing destinations
.
F
urther Sports Direct flagship locations in the pipeline
include Birmingham, which opened shortly aft
er the
financial period end and Manchester
, due to open lat
e
FY23. Opportunities t
o deliv
er this flagship concept are
also being considered in v
arious Eur
opean capital cities.
In addition, a re
furbishment model has been trialled
and is under dev
elopment, to elev
at
e appropriat
e st
ores
which are curr
ently trading
.
FLANNELS experienced significant ne
w st
ore activity
o
ver the period with 15 ne
w openings. The most not
able
opening w
as deliv
ering the first FLANNELS flagship stor
e
in Sheffield incorporat
ing beauty and food & be
ver
age
elements across 55k s
q ft. The outcome is a W
orld-class
luxury offering r
eceiving industry recognition. A second
FLANNELS Flagship stor
e w
as also opened in F
osse Park,
Leicester
, in the period. Further flagship sit
es have been
secured in Liv
erpool which is no
w trading, along with
Cardiff and Leeds which ar
e both due to open during
FY2
4. FLANNELS will also be e
xpanding its stor
e netw
ork
into Ir
eland o
v
er the coming financial period. These will
be the first stor
e openings outside of the U
.K
. for the
brand having secur
ed sites in Dublin, Blanchar
dsto
wn
and Cork.
The Group continues t
o identify large sit
es, which
w
orking with collaborativ
e landlords can be configur
ed
to pr
o
vide a multi fascia off
ering. Ov
er the period sites
hav
e been secured at Derb
y
, Cork and Newbridge in
Ireland, t
o de
velop int
o F
rasers and Sports Dir
ect stor
es.
The main objective f
or the Group
’s estat
e remains the
mo
ve t
o turno
v
er-based rents. Ther
e has been significant
inv
estment int
o new st
or
e concepts across all the
Group
’s brands, including more r
ecently the ne
w Ev
erlast
Gym concept as w
ell as enhancements t
o existing br
and
concepts such as the Sports Direct and FLANNELS
Flagship concepts. Where landlor
ds are pr
epared t
o
co-inv
est in ne
w stor
es the Group is pr
epared t
o ent
er
into long leases
.
The Group r
emains acquisitive acr
oss fascias and
territ
ories, with an e
x
citing pipeline of ne
w stor
es due to
open in the coming financial y
ear; the number of new
stor
e openings is e
xpected t
o be comparable t
o FY22.
Ho
we
v
er
, caution is being applied o
ver shop fit costs,
which are being monit
ored closel
y and could influence
the stor
e opening pipeline. In the usual manner
, freehold
inv
estment activity will continue t
o be used as an option
to secur
e space for the Gr
oup.
The business rat
es regime continues t
o be a challenging
landscape to navigat
e
, particularly on large st
or
es
and former department st
ores. W
ith further clarity
requir
ed on the new r
egime effect
ive April 2023 and the
uncertainty ar
ound transitional r
elief arr
angements, the
Group is t
aking a cautious vie
w on future r
ates liabilities
.
St
ore Portf
olio – UK Ret
ail
Sports Stor
es in the UK (including Northern Ireland):
•
Sports Direct is curr
ently operat
ing 387 stor
es in
England, 37 in Scotland, 30 in W
ales and 19 in
Northern Ireland. Ther
e wer
e 18 openings and 30
closures o
v
er the period. The majority of closures
w
ere link
ed to ne
w lar
ger stor
e openings and
closures, f
ollowing the acquisition o
f the D
W Sports
estat
e in FY21.
•
Note
w
orth
y openings include the Oxford Str
eet
flagship (55k sq ft), Leicest
er F
osse Park (35k s
q ft)
and Cheshunt (25k sq ft), a ne
w mark
et opening
follo
wing the successful asset management plan of
the ret
ail park that the Group acquir
ed in FY20
.
•
Stor
e-in-st
ore GAME/BEL
ONG and E
v
ans C
y
cles
concepts hav
e been dev
eloped t
o complement
Sports Direct f
ormats in selected locations
. All new
stor
e openings include a USC z
one pro
viding a
lifestyle off
ering, as part of the elev
at
ed stor
e model
across all siz
e formats.
St
ore Portf
olio – E
v
ans C
ycles:
•
There are curr
ently 57 E
v
ans C
y
cle stor
es trading, an
increase of nine st
ores o
ver the period as a result
of ten openings and one closur
e
. The Ev
ans C
y
cles
stor
e-in-st
ore concept continues t
o be re
fined and
will be rolled out int
o select
ed future st
ore openings.
St
ore Portf
olio – GAME UK
:
•
The relocation pr
ogram transit
ioning GAME st
ores
into select
ed Sports Dir
ect stor
es continued o
ver
the period and will continue throughout FY
23. W
ith
GAME no
w forming part of a significant number of
new Sports Dir
ect st
ore openings, the o
v
erall number
of GAME st
ores f
or the UK estat
e increased t
o 259
,
having closed 50 and opened 62.
•
The BELONG gaming ar
enas form part of G
AME
stor
es in select
ed viable locations and hav
e been
introduced t
o a number of ele
vat
ed Sports Dir
ect
stor
es. Not
e the GAME st
ore numbers do not
include BEL
ONG.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
25
St
ore Portf
olio – Pr
emium Lifestyle
FLANNELS, Cruise and v
an mildert:
•
Acr
oss the FLANNELS, Cruise and van mildert
fascias ther
e w
as significant stor
e activity with
16 openings and four closur
es resulting in a net
increase of 12 st
ores
. Combining these fascias,
the tot
al est
ate at the end of the financial period
amounted t
o 59 st
or
es.
•
Ke
y openings for FLANNELS include the
Meado
whall flagship being the first FLANNELS stor
e
to incorpor
at
e a beauty offering and F&B along
with the Leicester F
osse Park Flagship opening
shortly aft
er
. FLANNELS was also intr
oduced on the
South Coast of England for the first time opening at
Southampton, Bright
on and Portsmouth.
•
Aft
er the financial period, the largest FLANNELS
flagship stor
e t
o date w
as opened in Liverpool
co
vering se
v
en floors o
ver 120
,
000 sq ft and
introducing ne
w e
xperiences such as the boutique
fitness brand Barry’s Boot
camp.
•
A refit pr
ogramme r
efr
eshing older stor
es to the
new st
andar
d continued ov
er the period and
will continue throughout the upcoming financial
period. There will be a focus on securing further
new st
or
es in ke
y increment
al mark
ets as w
ell as
flagship locations.
•
Finall
y, FLANNELS is due t
o launch in the Republic
of Ireland o
v
er FY23 having secur
ed three ne
w st
ore
locations o
ver the period. The secur
ed locations are
in Dublin, Blanchardst
o
wn and Cork.
House of Fr
aser (HoF):
•
At the end of FY22 ther
e w
ere 39 House o
f Fr
asers
stor
es trading, a net decr
ease of four st
ores af
ter fiv
e
closures and one opening
.
•
Having come back into e
ffect follo
wing r
elief o
ver
the pandemic, the current business r
ates r
egime
remains a significant bur
den on the Hof estat
e
particularly giv
en the large st
or
e sizes. Clarity
around the ne
w regime e
ffectiv
e April 2023 is
eagerly aw
ait
ed and will be an influential fact
or on
the Hof estat
e
.
•
Whilst a significant proportion of the Hof est
at
e
remains on short t
erm fle
xible leases, progress has
been made on securing long term solut
ions. New
Fr
asers stor
es due t
o open ov
er FY23 include Derby
along with Cork and Ne
wbridge in Ireland.
Jack Wills:
•
Ov
er FY22 there w
ere eight stor
e closures r
educing
the estat
e t
o 52 stor
es. Negotiations with landlor
ds
continue t
o transition t
o long term leases
.
•
A new st
or
e concept for Jack W
ills w
as deliv
ered
shortly aft
er the FY22 period end in Derb
y and
additional locations t
o deliver the ne
w concept ar
e
being pursued. F
urther to this a ne
w shop-in-shop
concept has been dev
eloped and implemented in a
number of USC locations.
St
ore Portf
olio - Eur
opean Ret
ail:
Republic of Ireland (R
OI):
•
At the end of the financial period ther
e wer
e 43
stor
es within the Republic of Ir
eland (ROI), a net
increase of f
our stor
es. K
ey ne
w openings included
Sports Direct st
ores in Galw
ay, Ne
wbridge and Cork
Mahon Point Shopping Centr
e, which are all ne
w
increment
al mark
ets.
•
F
urther increment
al markets and upsiz
es across the
ROI ar
e activ
ely being pursued for Sports Dir
ect.
Along with the new st
or
e pipeline, a r
efit progr
amme
is underw
ay elev
ating appr
opriate Sports Dir
ect
stor
es t
o the latest concept
.
•
During the financial period three FLANNELS
locations w
ere secur
ed in ROI and due t
o open o
v
er
FY23. This is a first f
or the fascia and the t
erritory
.
The secured locations w
ere Dublin, Blanchar
dst
own
and Cork.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
26
Stor
e Portf
olio Europe (e
xcluding R
OI):
•
The Group continues t
o operat
e sports st
ores in 19
countries in Europe
.
•
211 Sports ret
ail st
ores in Eur
ope (e
x
cluding ROI
, plus
26 non-core
, speciality and outlet st
ores).
•
T
otal s
q.f
t. of appro
x. 2.7m of all sports f
ascias
in Europe (including Sportland, Lill
ywhites,
Sports
W
orld et
c).
•
Closed 1 GAME st
ore in Spain during the period.
•
Sev
en openings in six different countries.
•
Eight closures in fiv
e differ
ent countries either due
to poor perf
ormance, beneficial tr
ade transf
er or
landlords r
equired the units back.
•
During the period four ele
v
ated Sports Dir
ect stor
es
incorporating a USC w
er
e opened tot
alling 47
,012
sq ft of r
etail space
. One of these w
as a freehold
purchased in FY
20 that has been refurbished and
opened as an elev
at
ed Sports Direct st
ore alongside
a right-siz
ed T
o
ys R Us st
ore
.
•
As is the case in the UK, the Group is firml
y
committed t
o the rollout o
f elev
at
ed stor
es across
Europe
. Due to the acceler
at
ed shift to online
experienced acr
oss Europe due t
o the eff
ects of
Co
vid-
19 and a number of ret
ailers reducing their
portfolio siz
e, the Gr
oup believ
es it can capit
alise
on these market condit
ions to efficientl
y expand
our phy
sical estat
e
, focussing on capit
al city and
flagship opportunities.
•
W
e further expanded our geographical co
verage
with the purchase of Denmark’s number one
Sporting Goods chain, Sportmast
er, shortl
y aft
er
the financial period. This increased our sports st
ore
numbers b
y a further 75.
St
ore Portf
olio – Rest of the W
orld:
•
34 st
ores in Malaysia f
ollo
wing 4 openings and 3
closures o
v
er FY22. Our flagship st
ore at Sun
w
ay
Carniv
al tot
alling 18,284 s
q ft and incorporating a
USC lifestyle ar
ea on the ground floor
, opened in the
period alongside our Fr
asers Group Asia HQ at the
Sunw
ay P
yramid r
et
ail and leisure comple
x.
•
The Malaysian ele
vation and e
xpansion driv
e
continues with all long t
erm stor
es now ele
v
at
ed
into the lat
est Sports Dir
ect fit outs. Fiv
e of these
stor
es no
w hav
e USC areas within and w
e will
look to r
oll-out this concept across the est
at
e
where appr
opriate
.
•
42 st
ores in the USA, f
ollowing one closur
e in FY22.
The Group subsequently sold the Bob
’s Stores and
East
ern Mount
ain Sports business shortly aft
er the
financial period end.
F
reehold / Long Leasehold Pr
operty:
•
Ov
er FY22 a t
otal of 14 pr
operties w
ere acquir
ed
across the Gr
oup, t
otalling £121.3m. The most
significant purchase w
as Boucher Road R
etail
Park in Northern Ireland f
or £40.
0m. One sit
e w
as
acquired within the EU consisting of de
v
elopment
land for a logistics scheme
.
•
Disposal of pr
operty assets continues to be st
andar
d
practice f
or the Group
. Over the period eight
disposals complet
ed in the Group t
ot
alling £36.8m.
There w
ere no dispos
als across the EU or Ro
W
.
•
F
or the upcoming financial period it is anticipat
ed
that Fr
eehold acquisition activity will be broadl
y in
line with pre
vious financial y
ears.
Michael Murray
Chief Ex
ecutiv
e Officer
20 Sept
ember 2022
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
27
FINANCIAL RE
VIE
W
The Financial St
atements f
or the Group f
or the 52 weeks
ended 24 April 2022 ar
e present
ed in accor
dance with
Internat
ional Financial Reporting St
andards (IFRS
).
Summary of Results
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£m)
(£m)
Rev
enue
4,80
5.3
3,
625.3
Reported pr
ofit befor
e tax
335.6
8.5
Adjusted PB
T
(1)
339
.8
(39
.9)
Earnings per share (EPS
)
Pence per share
Pence per share
Reported basic EPS
52.9
(16.5)
Adjusted basic EPS
(2)
53
.9
(27
.3)
(1)
Adjusted PBT is pr
ofit before t
ax less the effects of e
xceptional it
ems, realised
foreign e
xchange
, fair value adjustments t
o derivativ
e financial instruments
included within Finance income / costs, fair v
alue gains/losses and pr
ofit on
disposal of equity deriv
atives, and share schemes. F
urther detail on this
calculation can be found in the Glossary
.
(2)
Adjusted basic EPS is report
ed basic EPS less the effects of e
xceptional it
ems,
realised for
eign ex
change, fair v
alue adjustments to derivativ
e financial
instruments included within Finance income/
costs, fair value gains/losses and
profit on disposal of equity deriv
atives, and shar
e schemes. Further det
ail on this
calculation can be found in note 15
.
F
or
eign Ex
change and T
reasury
The Group r
eports its results in GBP but trades
internat
ionally and is there
fore e
xposed t
o currency
fluctuations on currency cash flo
ws in v
arious w
ays
.
These include purchasing inv
entory from o
v
erseas
suppliers, making sales in curr
encies other than GBP and
holding o
verseas assets in other curr
encies. The Board
mitigat
es the cash flow risks associat
ed with these
fluctuations with the care
ful use of currency hedging
using forw
ar
d contracts and other deriv
ativ
e
financial instruments.
The Group uses forw
ard contracts that qualify for hedge
accounting in tw
o main w
ays – t
o hedge highly probable
EUR sales income and USD in
vent
ory pur
chases. This
introduces a le
v
el of certainty int
o the Gr
oup
’s planning
and for
ecasting process. Management has r
evie
w
ed
detailed f
orecasts and the gr
owth assumpt
ions within
them and is satisfied that the f
orecasts meet the crit
eria
for being highly pr
obable for
ecast transact
ions.
As at 24 April 2022 and as det
ailed in not
e 30c, the
Group had the f
ollowing f
orw
ard contr
acts that
qualified for hedge accounting under IFRS 9 F
inancial
Instruments, meaning that fluctuations in the v
alue of
the contracts bef
ore maturity ar
e recognised in the
Hedging Reserv
e through Other Compr
ehensiv
e Income.
Aft
er maturity, the s
ales and purchases ar
e then valued
at the hedge rat
e.
Currency
Hedging
against
Currency
value
Timing
Rat
es
USD / GBP
USD
inv
entory
purchases
USD 480m
FY23
1.41
USD / EUR
USD
inv
entory
purchases
USD 120m
FY23-FY24
1.26 – 1.31
EUR / GBP
Euro sales
EUR 600m
FY23, FY
25
0
.99 - 1.
08
The Group also uses curr
ency options, sw
aps and spots
for mor
e flexibility against cash flo
ws that ar
e less than
highly probable and ther
ef
ore do not qualify for hedge
accounting under IFRS 9 Financial Instruments
. The fair
v
alue mov
ements bef
ore maturity ar
e recognised in the
Income Stat
ement.
The Group has the follo
wing curr
ency options and
unhedged forw
ar
ds:
Currency
Expected
use
Currency
value
Timing
Rat
es
USD / EUR
USD
inv
entory
purchases
USD 120m
FY23
, FY25
1.26 – 1.31
EUR / GBP
Euro sales
EUR 7
40m
FY23, FY26
0.
99 - 1.08
The Group is pr
oactive in managing its curr
ency
requir
ements. The T
reasury team w
orks closely with
senior management to underst
and the Gr
oup
’s
plans and for
ecasts, and discusses and understands
appropriat
e financial products with v
arious financial
institutions, including those within the Group R
ev
olving
Credit F
acility (RCF). This information is then used t
o
implement suitable curr
ency products t
o align with the
Group
’s strategy
.
Regular r
evie
ws of the hedging performance ar
e
performed b
y the T
reasury t
eam alongside senior
management to ensur
e the continued appropriat
eness
of the currency hedging in place and, wher
e suitable
,
to implement addit
ional strat
egies and / or restructur
e
existing appr
oaches, in conjunction with our financial
institution partners.
Giv
en the potential impact of commodity prices on r
aw
material costs, the Gr
oup may hedge cert
ain input costs,
including cotton, crude oil and electricity
.
T
axat
ion
The effectiv
e t
ax rat
e on profit be
fore t
ax in FY22 w
as
23.5% (FY
21: 1,017
.6%). The prior y
ear w
as impact
ed b
y
more significant pr
operty impairments and disallo
w
able
depreciation compar
ed to FY
22.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
28
Earnings
Basic earnings per share (EPS
) is calculated b
y dividing
the earnings attributable t
o ordinary shar
eholders
b
y the w
eighted av
erage number o
f ordinary shares
outstanding during the financial period. Shar
es held in
T
reasury and the Emplo
y
ee Benefit T
rust are ex
cluded
from this figur
e.
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
Pence Per Share
Pence Per Share
Reported EPS (Basic)
52.9
(16
.5)
Adjusted EPS (Basic)
(1)
53
.9
(27.3)
W
eight
ed aver
age number of
shares (actual)
471,
975,282
501,
955,281
(1)
Adjusted earnings per share measur
es provide addit
ional useful information for
shareholders on the underlying performance o
f the business and are consistent
with how business performance is measur
ed internally
. Adjusted earnings is not a
recognised profit measur
e under IFRS and may not be directly comparable with
adjusted pro
fit measures used by other companies. F
urther details can be f
ound in
the Glossary
.
Dividends
The Board has decided not t
o pay a final dividend in
relation t
o FY22 (FY
21 £nil). The Board remains of the
opinion that it is in the best inter
ests of the Group and its
shareholders t
o preserv
e financial flexibility and facilit
ate
future in
v
estments and other gro
wth opportunities. The
payment of dividends remains under r
evie
w
.
Capit
al Expenditure
During the period, gross capit
al e
xpenditure (
ex
cluding
IFRS 16) amounted t
o £323.2m (FY
21: £219
.4m), which
included £121.3m on freehold and in
v
estment properties
(FY21: £84
.3m) and £36.8m on w
arehouse aut
omation
(FY21: £48.5m).
Strat
egic In
v
estments
The Group continues t
o hold v
arious strat
egic
inv
estments as det
ailed in note 21. In addition, the Gr
oup
also holds indirect str
ategic in
v
estments within contracts
for differ
ence and options.
The fair v
alues of the contracts f
or difference and options
are r
ecognised in Deriv
ative F
inancial Assets or Liabilities
on the Group Balance Sheet, with the mo
v
ement in fair
v
alue recorded in the Income St
at
ement.
Acquisitions
On 25 F
ebruary 2022, the Group acquir
ed the entire
share capit
al of Studio Ret
ail Limit
ed and certain other
assets of Studio Ret
ail Group Plc (in administr
ation).
The consideration for the tr
ansaction comprised cash
and the release of SR
G from its liabilit
ies to the lending
banks under its re
v
olving credit facilities r
esulting in
a cash payment b
y Fr
asers Group t
o the lenders of
£28.3m. As F
rasers Group seeks t
o ele
v
ate its cust
omer
journey including a fle
xible r
epayment proposition,
the acquisition of SRL will pro
vide F
rasers Gr
oup with
expertise and s
ynergies that will acceler
at
e this ambition.
Relat
ed Parties
MM Prop Consult
ancy Limit
ed, a company o
wned and
controlled b
y Michael Murr
ay
, who is a member of ke
y
management personnel as per IAS 24
, continued t
o
pro
vide property consult
ancy services t
o the Group
during FY22. During FY22, MM Pr
op Consult
ancy Limited
w
as primarily t
asked with finding and negotiat
ing the
acquisition of ne
w sites in the UK, Eur
ope and Rest of
the W
orld, for both our larger-f
ormat stor
es and our
combined ret
ail and gym units but it also pro
vides
advice to the C
ompany’s in-house pr
operty team in
relation t
o e
xisting sites in the UK, Eur
ope and Rest
of the W
orld.
In the y
ear, all pr
operties hav
e been assessed
that are consider
ed to hav
e created v
alue across
all the outstanding fr
eehold and long leasehold
properties o
v
er the applicable period from the MM
Property Consult
ancy agreement commencement
to 29 Sept
ember 2021, the
y hav
e been v
alued by an
independent v
aluer who confirms the value cr
eat
ed by
MM Prop Consult
ancy Limit
ed. The Group
’s independent
Non-Ex
ecutiv
e Direct
ors then re
vie
w and agree the v
alue
creat
ed and hav
e full discretion t
o appro
ve a payment
to MM Pr
op Consult
ancy Limited of up t
o 25% of
the v
alue creat
ed.
On 1 May 2022 Michael Murr
ay w
as appointed as
CE
O
. Prior to his appointment MM Pr
op Consult
ancy
Limited and F
rasers Gr
oup finalised the t
erms on which
any r
elev
ant prior consultancy services agreements
are t
erminat
ed. The Board has no
w completed its
assessment of the unsettled value cr
eat
ed b
y MM Prop
Consultancy Limit
ed t
o the Group
, with the assistance of
independent third-party e
xperts.
MM Prop Consult
ancy Limit
ed is entitled to up t
o 25%
of any v
alue created b
y services pr
ovided t
o the Gr
oup.
MM Prop Consult
ancy Limit
ed has agreed t
o w
aiv
e
contractually due amounts, including part cr
editing
pre
vious payments under this agreement, such that
the Group r
eceiv
es a 40% discount as part of the
finalisation and cess
ation of the consultancy agr
eement.
The final payment to be made b
y the Gr
oup to MM
Prop Consult
ancy Limit
ed follo
wing the application of
this discount is £20.
9m which w
as paid in the y
ear (FY21:
£2.5m w
as accrued and subsequently paid in FY22).
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
29
During FY21 the Gr
oup enter
ed into an agr
eement
with M.P
.M Elev
ation Limit
ed, a company o
wned and
controlled b
y Michael Murr
ay
, in relation t
o Elev
ation
strat
egy services. M.P
.M Elev
ation Limited w
as paid
£0.
1m in relation t
o the pro
vision of the Elev
ation
strat
egy services (FY21: £0
.
1m).
Other relat
ed parties are disclosed in not
e 35.
Cash Flo
w and Net Debt
Net debt increased b
y £2
42.2m, from £2
48.
9m at 25 April
2021 t
o £491.
1m at 2
4 April 2022 (including the £232.0m
borro
wings acquired due t
o the acquisition of Studio
Ret
ail). Inter
est on bank loans and o
ver
drafts incr
eased
to £13
.6m (FY21: £11.
1m) largely due t
o increased us
age of
the RCF in the period.
Analy
sis of Net Debt:
24 April 2022
25 April 2021
(£m)
(£m)
Cash and cash equivalents
336.8
4
5
7.
0
Borro
wings
(827
.
9)
(705.9)
Net debt
(491.
1)
(2
48.9)
On 30 No
vember 2021 the Gr
oup re
financed its existing
borro
wings and ent
ered int
o a combined t
erm loan and
re
v
olving credit facility of £9
30.
0m for a period of thr
ee
y
ears, with the possibility to e
xt
end this by a further tw
o
y
ears. This facility increased t
o £940
.
0m as at 24 April
2022 and t
o £980.
0m subsequent to the period end.
The Group continues t
o operat
e comfort
ably within its
banking facilities and co
v
enants and the Board r
emains
comfort
able with the Group
’s available headr
oom.
Note
: Due to the timing of payr
oll and supplier
payments, net debt at calendar period end 30 April 2022
w
as materiall
y higher than at 24 April 2022.
Cash flo
w:
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£m)
(£m)
Cash inflow fr
om operating activities
62
8.9
578.3
Income tax
es paid
(121.0)
(59
.3)
Inv
ested in:
Purchase of subsidiaries, net of cash
acquired
(0.2)
(39.
4)
Purchase of list
ed inv
estments
(198.4)
(113.3)
Proceeds on disposal of list
ed
inv
estments and derivativ
es
238.4
7.
0
Proceeds on disposal of subsidiary
undertaking
1.0
-
Proceeds in relat
ion to equity
derivativ
es
117
.4
4
8.1
Net capital e
xpenditure
(280.2)
(192.3)
Ex
change mov
ement on
cash balances
0.1
(5.3)
Inv
estment income receiv
ed
1.0
0.5
Finance income receiv
ed less finance
costs paid
(26.5)
(22.6)
Lease payments
(176
.2)
(78.0)
Purchase of o
wn shares
(193.2)
(4.3)
Borro
wings acquired through
business combinations
(232.0)
-
Repayment of acquired debt
-
(1.
4)
Dividend paid to non-contr
olling
inter
est
(1.3)
(0.
9)
(Increase) / decrease in net debt
(242.2)
117
.
1
Summary of Consolidat
ed Balance Sheet
(Extract
)
24 April 2022
25 April 2021
(£m)
(£m)
Property
, plant and equipment
816.3
915.2
Right of use assets
194.7
249.
7
Inv
estment properties
89.2
1
4.1
Long-t
erm financial assets
206.6
263.3
Deferr
ed tax assets
100.8
66.8
Inv
entory
1,277
.6
1,096.
6
T
rade and other r
eceivables
841.4
546.5
Pro
visions
433
.0
361.2
T
rade and other pay
ables
729.8
646.3
Lease liabilities
620.
6
722.7
Borro
wings
827
.
9
705.9
The majority of the decrease in pr
operty, plant and
equipment relat
es t
o the impairments of freehold land
and building and plant and equipment due to the
significant economic fact
ors which are headwinds on
the business, including challenges with supply chain,
increased ener
gy costs and cost of living.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
30
IFRS 16 right of use assets hav
e decreased lar
gely due t
o impairments. Lease liabilities hav
e decreased lar
gely due to
lease payments during the period.
Long-t
erm financial assets hav
e decreased during the period due t
o the reduction in the v
aluation of Studio Retail
Group plc.
Inv
ent
ory has increased due t
o the acquisitions in the period, these being the single individual reason.
Receiv
ables includes a £88.3m reimbursement asset in r
elation t
o the Group
’s ongoing non-UK tax enquiries (FY21:
£118.3m), £2
43.
9m relat
ing to deposits in r
espect of deriv
ativ
e financial instruments (FY21: £131.0m
) with the increase
mainly relat
ing to Hugo Boss and £234
.2m credit cust
omer r
eceivables r
elating t
o the Studio Ret
ail business (FY21: £nil).
Pro
visions hav
e increased mainl
y due to the acquisition of SRL in the period.
Pay
ables hav
e increased largel
y due the acquisition of SRL in the period.
Summary of Compan
y Balance Sheet
(Extract
)
24 April 2022
25 April 2021
(£m)
(£m)
Inv
estments
1,443.6
1
,494
.9
Debtors
512.8
162.
9
Credit
ors: amounts falling due within one year
(985.7)
(609
.0)
Inv
estments r
elates t
o inv
estments in subsidiaries and long-
term financial assets. The majority of the decr
ease relat
es
to Studio R
etail Gr
oup Plc.
The majority of the mov
ement in debtors relat
es t
o an increase in collat
eral t
o co
ver mar
gin requir
ements for deriv
ativ
e
trans
actions held with counterparties
.
Credit
ors largel
y relat
es to amounts o
wed t
o
Group undert
akings.
Chris W
ootton
Chief Financial Officer
20 Sept
ember 2022
NONFINANCIAL INF
ORMA
TION
The table belo
w sets out where the in
formation requir
ed b
y sections 414
CA and 414
CB of the Companies Act 2006 can
be found in this Annual Report
.
Requirement
Location
Relev
ant Policies
Environment
al Matters
Environment pages 38 t
o 39
Environment
al policy
Employ
ees
ESG Report pages 33 to 3
7
Staff Handbook
Employ
ee Data Priv
acy St
atement
Accept
able Use Policy
Social Matters*
ESG Report pages 33 to 3
7
Human Rights
ESG Report pages 33 to 3
7
Anti-Slav
ery and Human T
rafficking Policy
Anti-Bribery & Corruption policy
ESG Report pages 33 to 3
7
Staff Handbook Anti-Bribery & Corruption policy
Whistleblowing P
olicy
Code of Conduct / Supply Policy
* W
e continually w
ork to ensure that w
e impro
ve in this sector
. Our policy is not sufficiently formalised although evidence of what w
e do can be located on pages 33 t
o 37
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
31
W
ORKERS’
REPRESENT
A
TIVE REPOR
T
I hav
e now been in the r
ole of W
orkers Repr
esent
ativ
e
and Non-Ex
ecutiv
e Direct
or for thr
ee years and during
this period, my r
elationship with both m
y colleagues and
the Board hav
e gone fr
om strength t
o strength.
Although this past y
ear has had challenges for the
ret
ail sect
or as a whole, this has not detract
ed fr
om
the w
ellbeing and dev
elopment of our people being a
ke
y f
ocus. I continue to hav
e full control and ownership
of the colleague w
elfar
e portal, wher
e e
very colleague
has the opportunity to r
aise concerns or queries directl
y
to me
. I operat
e with complet
e transpar
ency and any
findings from these platf
orms are shar
ed with the rest
of Board or
, if appr
opriate
, in accordance with our
whistleblo
wing policy
.
A ke
y success of m
y role this y
ear w
as being able t
o host
and present t
o all our Ret
ail Managers at confer
ences
held at our London and Shirebr
ook offices. At the
confer
ences, w
e celebrat
ed our people and re
w
arded
ev
ery Manager with a selection of gifts for their efforts
o
ver the past y
ear
, including a number of points under
the F
earless 1000 scheme to managers and
their colleagues.
F
urthermore, I am pleased that despit
e the challenges
that the ret
ail sect
or faces, this y
ear w
e have r
eviv
ed our
ret
ail colleague bonus and launched ne
w re
w
ard and
recognition incentiv
es, reinforcing the v
alue we place
in our people.
Continuing m
y focus on our people, I am w
orking across
the UK facilit
ating focus gr
oups with colleagues of
v
arying seniority and experience t
o ensure our people
are consist
ently giv
en a platform f
or their v
oices
to be hear
d.
This year
, I have attended both the R
emuneration and
Nomination committees, so I hav
e full transparency and
insight into e
v
erything at Board le
v
el. This has not only
pro
v
ed useful t
o me for m
y own personal de
v
elopment
but has giv
en me a great
er depth and understanding of
the topics that ar
e discussed at Board le
v
el. W
ith each
passing y
ear, I am con
fident that I continue to add v
alue
to both our Non-Ex
ecutive and Ex
ecutive t
eams.
I am looking forw
ar
d to the y
ear ahead and supporting
our incoming CE
O Michael Murray
, t
o ensure that
Fr
asers Group continues t
o place our people at the heart
of the business.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
32
ESG REPOR
T
Our People
W
e have appr
o
ximatel
y 30,
000 people across the Gr
oup.
Building on strong f
oundations around ho
w w
e manage
and support our people, during FY
22 we hav
e continued
to in
v
est in and impro
v
e the experience of w
orking for
Fr
asers Group
.
Culture and V
alues
Our culture and v
alues continue t
o be integr
al t
o the
envir
onment w
e are creat
ing for our colleagues t
o
w
ork in. W
e have maint
ained a focus on embedding
our v
alues through e
very aspect o
f the colleague
journey
, including r
ecruitment, re
w
ard and r
ecognition,
leadership and learning and ho
w we measur
e
performance
. Having this thread running thr
ough our
approach ar
ound people ensures w
e ar
e clear about
what is important and what success looks lik
e
, so our
people understand ho
w the
y can dev
elop and progress.
Our v
alues are:
•
Own it and back y
ourself
•
Don
’t hesit
ate and act with purpose
•
Think without limits and tak
e the t
eam with you
This year w
e hav
e de
veloped our r
ecruitment process
to include a specific cultur
e and v
alues assessment,
ensuring that w
e select those people who are most
aligned with our business and w
ays of w
orking,
impro
ving their e
xperience and their chances of
achieving success with us
.
W
e have also f
ocused on continuing to driv
e aw
ar
eness
of Fr
asers Group as an emplo
y
er e
xternall
y, driv
en b
y a
social media strat
egy designed t
o:
•
raise the r
eputation and pr
ofile of F
rasers Group;
and
•
bring the organis
ation to lif
e for pot
ential
future t
alent.
This strat
egy has driv
en an increase in follo
w
ers of 71%
across our F
rasers Gr
oup Linked In account and an
increase in f
ollow
ers of 34% on Inst
agram. W
e have also
undertak
en an e
xternal surv
ey, r
epresent
ativ
e of the UK
w
orking population, with our specialist emplo
yer br
and
partner and w
e learned that 78% of those who ar
e
aw
are of F
rasers Gr
oup w
ould consider working f
or us.
W
e also recognise that int
ernal communication is
an integr
al part of engaging our colleagues with
the business and our culture and this y
ear w
e raised
the bar with a significant lev
elling up in our internal
communications approach. W
e have deliv
ered
a monthly ne
wsletter fr
om our senior leaders t
o
all colleagues, updating on k
ey e
v
ents across the
organis
ation, as w
ell as regular updat
es celebrating our
success through pr
ogrammes lik
e our monthly F
rasers
Champion aw
ards, w
eekly r
ound ups of all comms
messages and mor
e focus on driving function updat
es
via our central comms t
eams, t
o impro
v
e consistency
and accessibility
.
W
e also held our first Retail Managers Conf
erence in
o
ver tw
o years follo
wing the pandemic. This ev
ent
saw our Ret
ail Managers acr
oss the UK and Europe
come together o
ver three w
eeks t
o thank them for their
hard w
ork and dedication during the pandemic and
to r
ecognise their incredible e
fforts since returning t
o
w
ork. Here w
e also re-in
vigorat
ed our ret
ail incentiv
e
schemes, recognition e
v
ents and aw
arded points under
our F
earless 1000 bonus scheme (more det
ails belo
w).
W
e also held dedicated confer
ences for the first time f
or
some of our k
ey support functions acr
oss the business.
Attr
action
W
e aim to hir
e the best people within each discipline
across our or
ganisation. Our ability t
o do so is k
ey t
o our
strat
egy and success.
This year
, we launched a ne
w careers w
ebsit
e, designed
to engage and educat
e pot
ential ne
w hires about
who Fr
asers Group ar
e, our cultur
e and values and the
people who make our business what it is
. This was also
underpinned b
y the introduction of a ne
w Applicant
T
racking S
yst
em, to impr
o
ve our ability t
o sour
ce the best
candidates f
or all roles acr
oss the business and impro
v
e
the experience our candidat
es hav
e when applying f
or
roles with F
rasers Gr
oup.
W
e understand that one of the best w
ays t
o find people
who are suit
able for our or
ganisation is thr
ough the
recommendation of people that alr
eady w
ork for us, so
this y
ear we also r
e-launched an int
ernal ref
erral scheme,
encouraging colleagues who w
ork for us t
o r
ecommend
people they kno
w for ke
y roles.
Ret
ention
Alongside hiring the best people, w
e aim t
o ret
ain their
kno
wledge, skills and commitment within the Group
.
FY22 saw one of the most challenging landscapes
for colleague r
etention in r
ecent times and as a result,
w
e saw an increase in the attrition of our UK s
alaried
colleagues to 33
% (29% in FY21). Pleasingly ho
w
e
ver
,
across our St
ore Manager population within Sports
Direct, our st
ability increased t
o 91% fr
om 84% in FY
21.
Our Assistant Manager st
ability incr
eased to 87% fr
om
86
% and our F
ootw
ear Manager stability decr
eased
slightly t
o 91%, compared t
o 94
% in FY
21.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
33
De
v
elopment
Continuing our objectiv
e of populating the organis
ation
with high-calibre
, w
ell trained people t
o be the future
leaders of Fr
asers Group
, this y
ear we hav
e started
an inv
estment of o
v
er £1m in the dev
elopment of our
people. W
e have introduced a ne
w Head of Learning &
Dev
elopment to shape and dev
elop a compr
ehensive
offering of oper
ational, t
echnical and soft skills
dev
elopment. Our new group L&D t
eam pr
ovides a
shared service acr
oss the business, with a ke
y focus
on management and leadership dev
elopment, retail
capability
, commercial training and the learning
experience of our colleagues
. W
e have also in
vest
ed in
new ‘Head o
f’ roles in each of these ar
eas and, true to
our core principles ar
ound promoting fr
om within, all of
these roles hav
e been filled b
y int
ernal talent
.
W
e have alr
eady launched a new Leadership A
cademy
,
which houses a trio of options for our people leaders
across the Gr
oup. These include pr
emium digital
on-demand content fr
om our strat
egic partners
Sporting Edge
, our own in-house de
v
elopment
progr
amme, Managing W
ithout Limits, as w
ell as access
to pr
ofessionall
y accredit
ed qualifications from the
Charter
ed Management Institut
e (CMI) in partnership
with Corndel and Imperial College
’s Business School.
W
e have also kick
ed off our most significant cohort of
internal appr
enticeships y
et, with 154 people fr
om our
early career t
alent pool enr
olled on our new R
etail T
eam
Leader progr
amme, in
vesting almost £7
00k from our
apprenticeship le
vy funds.
W
ithin Ret
ail, w
e hav
e re
vised our new st
ore on-boar
ding
progr
amme for Management colleagues and de
veloped
a new pr
ogramme f
or our CAST t
eams to ensur
e that
they r
eceiv
e a W
orld class start t
o their careers with
Fr
asers Group
.
W
e have also undert
ak
en a full refurbishment of our
Shirebr
ook Learning Academ
y facility
, with significant
inv
estment in ne
w technology and an upgr
ade of our
facilities, with a f
ocus on impro
ving the repr
esentation
of all our Group f
ascias and further enhancing the
experience colleagues hav
e when they come to
the campus.
Div
ersity and Inclusion
Fr
asers Group is a compan
y of gro
wth, ele
v
ation,
determinat
ion and a global community of diverse
and talent
ed people
. W
e welcome and celebr
ate
individuality and tak
e pride in only allo
wing a
colleague
’s contribution to de
fine their path. W
e
empo
wer individuality thr
ough our core v
alues and
our attitude is championed within our brands thr
ough
div
ersity and inclusion amongst sport, fashion and
lifestyle
, and is a considered and crucial part of our
approach. As w
e continue on our ele
v
ation journey as
one team, w
e are clear that the success of our business
is dependent on the success of our colleagues. W
e
aspire t
o creat
e an en
vironment where e
v
ery
one can be
the best that they can be
, e
very day
. T
o us, diversity and
inclusion are about being the business that our people
w
ant us to be
.
W
e will not toler
ate discrimination on gr
ounds of gender
identity
, sexual orient
ation, race
, nationality
, religion, age
,
disability or an
y other grounds.
Included in our Management W
ithout Limits progr
amme,
launched in FY22 is an entir
e module dedicated t
o
promoting diff
erence within our w
orkfor
ce, t
o help our
managers understand the import
ance and benefits of
div
ersity and inclusion and educate them on concepts
like conscious and unconscious bias
.
W
e endeavour t
o meet our responsibilities t
o tr
ain and
emplo
y disabled people
. Applications for emplo
yment
b
y people with any dis
ability are giv
en full and fair
consideration f
or all vacancies and ar
e assessed in
accordance with their skills and abilities. P
eople who
hav
e a first language other than English are import
ant
to our business
. In our W
arehouse, w
e hav
e this y
ear
begun the introduction of personalised w
orkwear
to enable eas
y identification of colleagues
’ native
language and w
e are also off
ering translat
ors in training
and meetings.
The table belo
w sho
ws the gender div
ersity of our
w
orkforce at the period end. Appr
o
ximat
ely 54
% of
our w
orkforce is f
emale, including 36
% of our senior
management and their direct r
eports (FY21: 35% UK
w
orkforce). W
e aim to ensure that both male and f
emale
candidates ar
e pro
vided with equal opportunities t
o
apply for and w
ork in all positions across the Group
.
F
emale
Male
Direct
ors
29%
71%
Other senior managers and
direct reports
3
6%
64%
Other employ
ees
55%
45%
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
34
Gender Pay Gap
Our gender pay gap report f
or 2021 w
as published
in April 2022. W
e are pleased t
o report that w
e hav
e
maintained a 0% av
erage gender pay gap across the
Group f
or three y
ears in a ro
w
, compared t
o 6.3
% in 2017
.
W
e continue to w
ork vigorousl
y on aligning roles and
putting transpar
ent structures in place acr
oss all areas
of the business. When it comes t
o re
w
ards, w
e hav
e
been lifelong champions of gr
owth in earnings thr
ough
performance r
elated bonuses. W
e encourage all our
people to r
each their maximum pot
ential and re
w
ard
the achiev
ement of appropriate t
argets, set within the
respectiv
e discipline of the business. This is r
eflect
ed
in the high percent
age of males and females earning
a bonus, which are all gender neutr
al b
y design, and
continues t
o reflect the equality which w
e striv
e t
o
achiev
e across our business.
W
e recognise there is a diff
erence in t
otal earnings
betw
een female and male colleagues. W
e are theref
ore
continuing t
o explor
e and implement methods that will
establish enhanced pr
ocesses and training t
ools for our
emplo
yees and engaged w
orkers, to achie
v
e maximum
earning potent
ial through our v
arious bonus and
commission schemes (more det
ails of which belo
w).
T
alent and Capability Dev
elopment
Our strat
egy and future goals r
ely significantly on our
ability to nurtur
e and gro
w the best t
alent in our industry
,
and this y
ear, alongside the in
v
estment in our people
dev
elopment capability mentioned abov
e, w
e hav
e
continued t
o build on our ability to identify and support
talent t
o pr
ogress within F
rasers Gr
oup.
This year
, we hav
e continued t
o run our F
earless F
ocus
performance r
evie
w process, aligning individual goals
to our br
oader Group objectiv
es and ensuring that ev
ery
colleague has a clear plan to pr
ogress their car
eers. This
has also enabled us to ident
ify those colleagues who
w
e believ
e hav
e the pot
ential to de
v
elop and gro
w t
o
become future leaders of our or
ganisation.
W
e have also intr
oduced new leadership r
oles across
our Ret
ail, Digit
al and T
echnology and IT functions,
to ensur
e that w
e hav
e the right people at the right
lev
el to support the achiev
ement of our goals and the
dev
elopment of future talent within their business ar
eas.
W
e have also r
e-organised our structur
es within our
Ret
ail and Commercial functions t
o align with our Sports,
Premium and Luxury pillars, ensuring these k
e
y teams
are best positioned t
o deliv
er our purpose and strat
egy
.
W
e have continued t
o see success from our Ele
v
ation
Progr
amme, with tw
o colleagues from our first cohort
being promot
ed int
o senior leadership roles in our
Commercial t
eam at the end of their second y
ear in the
progr
amme. W
e have also seen our second cohort of
25 ne
w colleagues start their pr
ogramme in Sept
ember
2021 and the recruitment f
or cohort three being
completed, with another 2
6 high-potential individuals
who joined Fr
asers Group in Sept
ember 2022. W
e
lev
elled up our approach to attract
ing the best calibre
of early car
eers talent this y
ear
, running an onsit
e and
digital mark
eting campaign that s
aw us vot
ed thir
d in
the category f
or Best Student Mark
eting Campaign at
the National Graduat
e Recruitment A
war
ds 2022. W
e
also ext
ended our Ele
vat
ion Programme t
o our F
inance
team in FY
22, with fiv
e new gr
aduates r
ecruit
ed, who
joined in August 2022.
Remuner
ation and Re
w
ard
W
e foster a r
e
w
ard-based culture that enables our
colleagues to shar
e in the Group
’s success. In the UK,
our policy is to pay abo
ve the National Minimum W
age,
including rat
es that are abo
v
e the National Living W
age
for people aged o
v
er 25. W
e offer bonus schemes and
incentiv
es depending on the role and the f
ascia, and
colleagues receiv
e discounts acr
oss all fascias.
In FY22, w
e st
arted the y
ear with a full r
evie
w of our
Ret
ail pay structures, r
esulting in increased r
ates of pay
across the boar
d, including management and casual
w
orkers
. In Nov
ember 2021, w
e also r
e-invigorat
ed our
Ret
ail commission and bonus structures, making them
more accessible than the
y hav
e ev
er been bef
ore and
paying out o
ver £15m t
o our colleagues thr
ough our
bonus and commission schemes o
ver the course of this
financial y
ear
.
W
e also revie
w
ed our F
earless 1000 bonus scheme and
made a number of changes, to ensur
e that the scheme
is w
orking in the best inter
ests of our colleagues.
These included:
•
ext
ending the scheme for a further 12 months t
o
account for the impact of the pandemic in the first
y
ear of the scheme and increase the opportunity t
o
achiev
e the goal of hit
ting the £10 shar
e price for 30
consecutiv
e days;
•
increasing the number of points av
ailable t
o ret
ail
leaders to r
ecognise the number of people under
their remit; and
•
mo
ving the points allocation window t
o half y
early
to enable mor
e time for gr
eat w
ork to be visible t
o
senior leaders who are aw
ar
ding points to
our colleagues.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
35
Casual W
orkers
W
e strive t
o ensure our arr
angements for casual st
aff
are f
air and equitable
. All casual w
orkers ar
e paid the
same r
ates as permanent emplo
y
ees in the same r
ole.
W
e promot
e stability in w
orking hours, while our casual
w
orkers also bene
fit from the fle
xibility to decline shifts
at any time
. This flexibility also bene
fits the Group
,
enabling us to adjust st
affing le
v
els to cope with peak
times and quiet
er periods.
Casual w
orkers ar
e also included in our commission
schemes and in the F
earless 1000 bonus scheme.
Health and Safety
The Group
’s health and safety progr
amme has
continued t
o ev
olve
, t
o support business gro
wth. The
Company has s
afely oper
at
ed through the Co
vid-
19
pandemic and w
e have successfull
y implemented
a number of significant general health and s
afety
impro
v
ement measures that w
e ar
e confident will help
driv
e and support our continuous impro
v
ement plans.
Ov
er the last 12 months the Company continued t
o
respond eff
ectiv
ely t
o the Co
vid-
19 pandemic. Across
our distribution, office and w
arehousing oper
ations and
together with our r
et
ail team, w
e maint
ained robust
social distancing and cleaning policies, meet
ing or
ex
ceeding guidelines, to ensure cust
omers w
ere able
to enjo
y a safe ret
ail e
xperience and maintain a s
afe
w
orkplace for our t
eams.
W
e have implement
ed a number of measures t
o
strengthen our health and s
afety progr
amme, f
ocusing
on identifying and sharing good practices acr
oss the
business and, where appr
opriate
, harmonising our
health and safety policy and pr
ocedures
. Specific
initiativ
es include:
•
the introduction of a bespok
e online accident
reporting s
yst
em, which is deliv
ering impro
v
ed
accident reporting and dat
a analytics t
o inform
organis
ational learning and accident pre
v
ention;
•
a significant increase in our Health and Saf
ety team
in our Shirebr
ook w
arehouse t
o pro
vide additional
expertise and support f
or our operational t
eams;
•
supporting the ret
ail t
eam to help implement and
sustain in-st
or
e health and safety st
andards; and
•
inv
esting in our health and saf
ety capabilities with
our regional H&S officers undert
aking specialist
training on fir
e risk assessments.
W
e continue to positiv
ely engage with fir
e service and
local authority enfor
cement repr
esentativ
es and ther
e
hav
e not been any en
vironment
al enfor
cements or
prosecutions in the past 12 months
.
All accidents and incidents are in
v
estigated in a timel
y
manner
, to pr
ev
ent recurrence
.
The Group
’s Reporting of Injuries, Disease and
Dangerous Occurr
ences (RIDDOR) incidents in the last
12 months all inv
olv
ed ov
er se
v
en-day incapacitation. In
tot
al six incidents w
ere r
eport
ed in FY22, a reduction o
f
45% on the 11 incidents r
eported during FY
21.
The accident rat
e for the distribution, office and st
ore
w
orkforce w
as 2.5 accidents per 100,000 hours w
orked
in FY22, an incr
ease on the rat
e of 1.8 compared t
o
FY21. A dir
ect comparison between periods is adv
ersely
affect
ed b
y ext
ended periods of Co
vid-
19 relat
ed
disruption, across oper
ations and t
eams, including stor
e
closures. The FY
22 rat
e is more r
epresent
ativ
e of regular
business activity
.
In prior y
ears, we hav
e calculated the number of
accidents to the gener
al public as a rat
e per £10m of
stor
e turno
v
er, using a 12-month r
olling av
erage
. The
FY22 accident r
ate w
as 6.
6. A comparison with FY21
is not considered t
o be meaningful, giv
en the impact
of Co
vid-
19 restrictions and associat
ed stor
e closures
during this period.
During FY23, w
e will pursue our continuous improv
ement
progr
amme to further de
v
elop and sustain e
ffectiv
e
health and safety acr
oss the business.
W
ellbeing
Colleague w
ellbeing continues to be a f
ocus for us,
as the understanding and import
ance of health and
w
ellbeing and its impact on our colleagues gro
ws. W
e
maintain and hav
e further embedded our relationship
with the Ret
ail T
rust this year
. Our partnership gives all
Fr
asers Group colleagues access t
o free and confident
ial
w
ellbeing support, including advice, financial assist
ance,
face-
to-f
ace and telephone counselling, cognitiv
e
behavioural ther
ap
y, non-r
epayable gr
ants, career
dev
elopment support, legal guidance and on-site critical
incident support. The helpline is av
ailable 24 hours a
day, se
v
en days a w
eek. W
e also offer an enhanced
counselling ref
erral service t
o colleagues who requir
e a
great
er le
vel of support
.
In FY22 w
e hav
e dev
eloped and launched a mental
health and w
ellbeing series through our digit
al learning
platform for colleagues and managers, t
o access
support people who are dealing with issues r
elated t
o
their mental health.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
36
Human Rights and Modern Slav
ery
W
e are committed t
o r
espect and maintain equal
treatment f
or all people.
W
e recognise that modern slav
ery is an ongoing
challenge for or
ganisations, especially those dealing
in consumer goods, and w
e remain committ
ed to
addressing this risk. Ultimat
ely
, w
e striv
e to ensur
e that
no slav
ery or human trafficking t
akes place within our
business or supply chain. W
e have policies in place
aimed at proactiv
ely ident
ifying and mitigating these
risks. These policies aim to send a clear mess
age that w
e
do not toler
at
e these practices.
W
e have a r
ange of tools in place
, including videos and
liter
ature t
o educat
e colleagues about their rights, and
a number of communication channels, including an
internal t
elephone hotline and comment bo
x
es on sit
e,
for r
eporting any f
eedback or concerns. Any
one making
a report can r
emain anonymous if the
y choose
. W
e also
continue t
o re
view and de
v
elop our colleague training,
monitoring pr
ocesses and e
valuation of out
comes, and
w
ork with our emplo
yment agencies and other rele
vant
bodies, including the Gangmasters and Labour Abuse
Authority and the police
, to support our tr
aining
and kno
wledge.
If w
e find, or suspect, that any or
ganisations or
individuals are participating in modern slav
ery, w
e will
tak
e immediat
e action. Accor
dingly
, w
e have a policy of
reporting an
y suspicious activity t
o the police, who hav
e
historicall
y assisted in ensuring successful con
victions.
Our s54 Modern Slav
ery Act st
at
ement can be found on
our w
ebsite www
.frasers
.group
.
Community and Charity
W
e are committed t
o engaging with the local and
wider communities around our st
ores and our o
ffices in
London and Shirebr
ook, and w
e aim to minimise an
y
detrimental impact on them.
Our Sports Direct
ory subsidiary has been a specialist
supplier of sports equipment to the educat
ion sector
for nearly 30 y
ears, and part of the F
rasers Gr
oup since
2016. Sports Dir
ectory play
s a ke
y r
ole in giving back to
schools in the UK and helping to k
eep our y
oung people
fit and healthy
. Through its ‘My School’ scheme, schools
purchase sports equipment fr
om Sports Direct
ory and
the business giv
es them the opportunity to claim a
v
oucher for e
very pur
chase. T
o date, Sports Dir
ectory
has issued o
ver 65
,000 v
ouchers t
o UK schools, which
equates t
o mor
e than £4.5 million w
orth of free
sports equipment.
Sports Direct
ory has also, via the Pr
ofessional
F
ootballers’ Association, donat
ed free equipment t
o 72
football league clubs, helping t
o support
local communities.
F
or more inf
ormation on Sports Direct
ory visit: www
.
sportsdir
ectory
.com
The Group has also run campaigns t
o encourage
children t
o become activ
e in sport. This included the
Monster K
ickabout campaign launched b
y Eric Cantona.
Ov
er 3,
000 schools participated in this campaign and
the Group donat
ed £500
,000 of f
ootball kits to the
schools. F
our schools w
ere also giv
en the e
xperience of
a lifetime at St Geor
ge
’s Park, where the
y receiv
ed the
opportunity to tr
ain with F
A coaches.
Anti-Bribery and Corruption
The Group has an Anti-Bribery and Corruption P
olicy
in place, which w
as originally cr
eat
ed follo
wing the
introduction of the UK Bribery A
ct. As a result o
f the
Act, all policies and pr
ocedures w
ere r
evie
w
ed t
o ensure
compliance measures w
er
e put in place to mitigat
e
colleagues being offer
ed and/
or accepting bribes.
W
e have a z
ero-
toler
ance approach t
o bribery and
corruption at Fr
asers Group
, and w
e encourage our
people to speak up if the
y hav
e concerns that bribery or
fraud is t
aking place. No inst
ances of bribery
, corruption
or fraud hav
e been r
eported during FY
22.
Whistleblo
wing
The Group has an appr
ov
ed whistleblo
wing policy and
a number of processes in place which support our policy
,
including Y
our Company Y
our V
oice
, our Retail Support
Unit Asset Prot
ection hotline, as w
ell as a dedicated
whistleblo
wing e-mail address.
During the financial y
ear the Audit Committ
ee re
view
ed
and recommended t
o the Board the appr
o
val of an
updated Whistleblo
wing Policy, which w
as subsequently
adopted b
y the Group and rolled out t
o colleagues.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
37
ENVIR
ONMENT
ESG is an increasingl
y important ar
ea to F
rasers Gr
oup.
W
e recognise the import
ance of sustainability t
o our
stak
eholders and t
o the future success of the business
and tak
e seriously the part w
e must play to change the
paradigm of the r
etail and manuf
acturing industries.
W
e welcome the pr
ogress made at COP26 and
are activ
ely w
orking with our partners to identify
opportunities t
o work t
ogether t
o tackle climat
e change
,
particularly in r
elation to carbon emissions fr
om
transport and w
ast
e.
Fr
asers Group supports the intr
oduction of the T
askforce
for Climat
e-relat
ed Financial Disclosur
es (T
CFD
).
Significant analysis and scenario modelling w
ent into
producing our disclosur
e. The findings hav
e giv
en us
a robust f
oundation to mitigat
e climat
e relat
ed risks
and inform opportunities going f
orw
ards. Our full T
CFD
disclosure can be f
ound at page 40.
The role of the sust
ainability team cont
inues to e
v
olve as
w
e further embed sustainability thr
oughout the Group
,
linking sustainability t
o Gr
oup strat
egy and vice v
ersa.
T
CFD has further helped t
o formalise this appr
oach
and the Group
’s sustainability manager is an int
egral
member of the newl
y formed Climat
e Risk Group
.
There has been a particular focus on mat
eriality and
data gathering o
v
er the past y
ear
, to bett
er inform the
direction of the Gr
oup
’s ESG journe
y
. Not
ably
, there
has been impro
v
ed data collect
ed on ener
gy use and
savings, pr
oduct material composition and
single-use plastic.
W
e expect continued impr
ov
ement in the quality of dat
a
w
e collect and in the w
ay we use and shar
e that dat
a, to
better inf
orm agile decision making as the information
and the opportunities that presents become clear
er
.
Campaigns through the y
ear included our Sav
e the
Bumblebees campaign, which aimed to engage and
educate our cust
omers on biodiv
ersity
, giving out
free seeds and inf
ormation booklets and tempor
arily
rebr
anding our popular Sports Direct bag f
or life and
mug with the #sav
ethebumblebees logo.
Carbon
This continues to be a priority f
ocus area f
or the Group,
as evidenced b
y our newly cr
eated Carbon Reduct
ion
Manager role
. It is one of the areas wher
e w
e have made
significant impro
v
ements in data gathering and
tar
get setting.
The plans we alr
eady had in motion last y
ear to r
educe
our energy use and emissions hav
e cushioned the Gr
oup
from some of the impacts of a v
olatile ener
gy market
and associated incr
eased energy costs and will continue
to bring cost s
avings y
ear on year
. This approach has
bought about both commercial and en
vironment
al
benefits.
Of note
, w
e hav
e accelerat
ed our LED upgrade
progr
amme, in
vesting mor
e than £5M in replacing LED
lights in 124 st
or
es and 1 war
ehouse. The pr
oject will sav
e
more than £2.5M per y
ear (as an av
erage of our energy
costs last y
ear) and more than 3.
0Mt
co2e annuall
y
.
W
e also introduced a st
ore colleague incentiv
e t
o reduce
energy use
, dubbed ‘T
op of the Shops.’ The incentive
re
w
ards st
ore colleagues f
or best practice in ener
gy
saving measur
es, such as ensuring the escalators w
er
e
only turned on when the st
ores ar
e open to cust
omers.
Impacts of the savings w
er
e communicated t
o st
ores
regularly and st
or
es w
ere able t
o measure themselv
es
against each other in a T
op of the Shops league table
,
fost
ering healthy compet
ition. W
e wer
e delighted with
the engagement lev
el from stor
e colleagues. W
e had
for
ecast a 10% reduction in UK electricity use f
or the
y
ear but ex
ceeded this t
o achiev
e a 15% reduction
(from a 2019 baseline
, measured against lik
e-for-lik
e
stor
es. 2019 baseline used as a compar
ativ
e year due t
o
coronavirus lock
do
wns affecting dat
a in 2020 and
early 2021).
Our pilot trial of infrar
ed o
ver
door heat
ers has
demonstrat
ed their impro
v
ed efficiency compar
ed to
the traditional electric blo
w heat
ers. Infrar
ed heat
ers will
no
w be installed as st
andard pr
actice in all new st
or
es
and stor
e re
fits.
W
e installed 18 EV charging points at our w
arehouses
last y
ear which have been w
ell utilised by colleagues
and visitors
.
Aside from our est
at
e, w
e hav
e also been w
orking
hard t
o reduce emissions in our suppl
y chain, notabl
y
from deliv
ery of goods, building on the success of our
pioneering container optimis
ation progr
amme which
maximises the space used per container
. W
e have
further expanded the number of br
ands w
e collaborat
e
with and hav
e also increased the number of deliv
eries
that are optimised fr
om our exist
ing brand partners.
Deliv
ering to us in this w
ay reduces the number
of deliv
eries b
y 25% on av
erage
. That means
appro
ximately 25% has been s
av
ed in delivery costs and
the greenhouse gases associat
ed with those deliv
eries.
Container opt
imisation complements our gr
owing
automat
ion syst
em, r
educing manual handling and
processing time fr
om leaving port of origin, t
o arrival
with our customers
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
38
F
or last mile deliv
eries, customers no
w hav
e the option
to select DPD Carbon neutr
al deliv
ery at check out.
Appro
ximately 32.
1t
co2
e w
as sav
ed in FY22 b
y cust
omers
selecting this option.
Ackno
wledging the urgency of the climat
e crisis, F
rasers
Group
’s primary focus for the coming y
ear will be to
further inv
estigat
e our scope 3 emissions and gather
decision-useful dat
a, to enable us t
o t
arget high-impact
areas eff
ectiv
ely
.
Fr
asers Group has r
esponded to the Science Based
T
argets initiativ
e
’s (SBT
i) ur
gent call for corporat
e climat
e
action, b
y committing to align with 1.5°C and net
-z
ero
through the Business Ambition f
or 1.5°C campaign.
The Group no
w has 24 months t
o submit a t
arget f
or
v
alidation to the SB
T
i.
W
ast
e
W
aste has alw
ays been managed v
ery well from our
Shirebr
ook DC and w
e have det
ailed collection dat
a
going back to 20
14. In FY
22 we r
ecy
cled 86
% of our
w
aste
, of which 68% w
as cardboard.
This last year w
e modernised the w
ay w
e collect and
share inf
ormation to help further impr
o
ve our r
ecy
cling
rat
es. W
e hav
e set a tar
get for FY23 that 90% of
the w
aste that goes thr
ough Shirebr
ook DC will be
recy
cled. This includes ev
en more packaging w
aste that
w
e expect t
o receiv
e back from our stor
es, due to the
stor
e recy
cling initiativ
e that is being pilot
ed, t
o drive
behaviour change and bring do
wn wast
e r
ates. W
e are
proud of this achie
v
ement, as reducing w
ast
e has a
big impact on the envir
onment. Ho
w
ev
er
, w
e recognise
that whilst perfecting the s
yst
em at Shirebr
ook DC, w
e
hav
e not had the same focus on our other w
arehouses.
W
e acknowledge that w
e hav
e a lot of w
ork to do in
collecting baseline dat
a for those and looking at the
sy
stems in place t
o see where impr
o
v
ements can
be made.
Pack
aging
Detailed dat
a is being gather
ed on the material
composition of the Group
’s own-br
and core
product pack
aging, t
o enable us to look f
or more
envir
onmentall
y responsible alt
ernativ
es such as FSC
card and alt
ernativ
es to vir
gin plastic pack
aging. This
w
ork w
as already being undert
aken t
o r
educe and
impro
v
e the pack
aging we use but has been acceler
at
ed
and other streams of dat
a added, t
o account for the
Plastic Pack
aging T
ax that came into f
orce in April 2022.
The additional data collection also br
ought int
o scope
other plastics w
e procur
e, such as e-commer
ce and
carrier bags. All of our carrier bags are no
w fully FSC
certified and recy
clable or fr
om 100% recy
cled and
recy
clable plastic (80% post
-consumer w
aste
, 20%
fact
ory w
aste).
W
e are in a strong position t
o r
eport for the t
ax
requir
ement and hav
e already been able t
o implement
changes to some o
f our packaging t
o remo
v
e or reduce
plastic cont
ent, thereb
y falling out of scope f
or the tax
whilst impro
ving the envir
onment
al impact.
Ele
v
at
ed Product
Fr
asers Group ackno
wledges its responsibility as part
of the fashion industry t
o reduce the amount of t
e
xtiles
w
aste that is sent t
o landfill and t
o maximise the full
v
alue of te
xtiles already in cir
culation.
As part of the Elev
ated Product pillar of our str
ategy
, w
e
hav
e gathered dat
a on the material cont
ent of 91% of
our o
wn-brand core t
e
xtile products. This will giv
e bett
er
visibility of the composition of mat
erials w
e use and
enable us to choose mor
e sust
ainable materials in the
future
. W
e are in a good position t
o report the first
-y
ear
submissions to the T
extiles 2030 initiativ
e
, of which we
are a member
.
F
or Spring/Summer 2022, 100% of our o
wn-brand
seasonal swim
w
ear w
as from 100% recy
cled nylon
and w
e plan to e
xt
end use of recy
cled n
ylon across the
ranges f
or next y
ear
, as w
ell as w
orking with our brand
partners to encour
age the use of more sust
ainable fibr
es
in third-party pr
oducts.
Looking at circularity in f
ashion, we ar
e delight
ed to
announce our partnership with Share
w
ear in piloting
a clothing tak
e-back scheme
, which launched in five
House of Fr
aser st
ores in April 2022. Shar
ew
ear’s unique
ReLiv
ed scheme is the only clothing collection scheme
that guarant
ees all useable clothing will go t
o someone
in po
verty in the UK, fr
ee of charge
. The collaboration
is part of Fr
asers Group
’s commitment to reduce our
impact on the envir
onment b
y ensuring that te
xtiles
are k
ept in use for as long as possible
. Not only does
this initiativ
e prot
ect the envir
onment, but it also helps
people in need in our local communities. F
rasers Gr
oup
w
as the only ret
ailer t
o pilot the scheme with Share
w
ear
,
pro
viding a supply of clothing that enabled people t
o
attend int
ervie
ws, leading t
o work and tr
aining, and send
their children t
o school w
arm and dry
.
F
uture Pr
ogress
W
e are pleased with the progr
ess made during the last
y
ear and recognise that there is much mor
e w
ork to do
in all areas of sust
ainability
.
Whilst w
e are k
een to addr
ess e
very issue with ur
gency
,
w
e are mindful that it t
akes t
ime to deliv
er lar
ge scale
adjustments and w
e are committ
ed to w
orking with our
partners and colleagues to deliv
er changes that are long
lasting and impactful.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
39
T
ASK F
OR
CE ON CLIMA
TE

RELA
TED FINANCIAL
DISCL
OSURES T
CFD
Fr
asers Group supports the aims of the T
CFD
, which
w
e believ
e is an import
ant step in t
ackling climat
e
change. In this section of the r
eport, w
e are making
the disclosures r
ecommended b
y T
CFD
, to pro
vide
stak
eholders with useful inf
ormation on climat
e-relat
ed
risks and opportunities rele
v
ant to our business
.
During the y
ear, w
e have w
ork
ed closely with expert
ext
ernal advisers t
o enhance our understanding of the
potent
ial impact of climate change on F
rasers Gr
oup
and to inf
orm our future str
ategy
, risk management
approach and the metrics and t
argets w
e will use t
o
monitor our pr
ogress
. This work has included:
•
a gap analysis, t
o identify k
ey gaps betw
een our
practices and the T
CFD recommendations;
•
identification and shortlisting of our k
ey pot
ential
climate-r
elat
ed risks and opportunities;
•
qualitat
ive scenario anal
ysis for both ph
ysical and
transition risks and opportunities, o
v
er time and
across tw
o differ
ent t
emperatur
e scenarios; and
•
dev
elopment of actions to int
egrat
e climate-risk
considerations int
o our Ent
erprise-wide Risk
Management frame
w
ork (ERM).
The two t
emper
ature scenarios w
e considered w
ere
increases of 1.5oc and 4oc abo
v
e pre-industrial le
v
els.
W
e selected tw
o pathw
ays as we ident
ified that there
are tw
o pot
ential futures ahead of us
. A scenario where
w
e activ
ely mo
ve t
o
w
ards a lo
w
er-carbon economy t
o
keep w
arming to 1.5oc w
ould introduce mor
e transitional
risks to our business
. 1.5oc w
as identified as a best-case
scenario of the Paris Agr
eement at the COP21 summit in
2015, w
as r
eiter
ated at the COP2
6 summit in Nov
ember
2021, and also aligns with the objectiv
es of the SBT
i.
Alternat
ivel
y, if e
fforts are not made t
o limit global
w
arming to the agr
eed 1.5oc, w
e could face a w
orst
-case
scenario of 4oc of w
arming, which w
ould pose a lot
more ph
ysical risks such as e
xtreme w
eather e
v
ents.
Go
v
ernance
The Board has ultimat
e responsibility f
or ensuring
effectiv
e risk management and that our strategy
tak
es account of the risks and opportunities w
e face
,
including those relat
ed t
o climate change
. The Board
has delegated its o
versight of climat
e-relat
ed risks to the
Audit Committ
ee, which r
eports to the Boar
d on these
matters on a quart
erly basis, and ar
e task
ed with:
•
Monitoring pr
ogress against climat
e-r
elated goals
and tar
gets.
•
Continuous re
vie
w of the Group
’s ESG risks
and opportunities.
•
Keeping under r
evie
w the mat
eriality of climat
e-
relat
ed risk and its impact on financial st
atements.
•
Monitoring adher
ence t
o ext
ernally applicable
sustainability codes and principles
.
During the y
ear, our e
xt
ernal advisers present
ed
twice to the A
udit Committee
, sharing their w
ork
on the identification and assessment of transit
ional
and phy
sical climate-r
elat
ed risks, and proposals f
or
enhancing our risk management processes in r
elation to
climate
. Our Sust
ainability Manager also present
ed the
ext
ernal advisers’ findings t
o the Boar
d in the F
ebruary
2022 Board meeting
.
Going forw
ar
d, we plan t
o est
ablish our Climate Risk
Steering Gr
oup t
o manage any curr
ent or upcoming
identified risks relating t
o climat
e whose responsibilities
will include:
•
Pro
viding direct
ion and input into our t
argets and
goals, and ensure the continual e
v
olution of our
action plans
•
Ov
ersight of the delivery o
f our action plan and
impro
v
ement roadmap
, tar
gets and emerging
climate-r
elat
ed risks.
Our Sustainability Manager who will be an int
egr
al
part of the Climat
e Risk Steering Gr
oup, will then
communicate findings fr
om the Group int
o the Audit
Committee and Compliance & Risk Gr
oup on a
quarterl
y basis.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
40
Reporting t
o the Climate Risk St
eering Gr
oup, cr
oss
functional management are r
esponsible for managing
on a day-
to-day basis the climat
e relat
ed risks and
opportunities of the business.
The Chief Ex
ecutiv
e Officer has o
ver
all responsibility f
or
our management of risk, support
ed by his dir
ect reports,
who are account
able t
o him for managing the risks that
fall within their r
emits. In addition, the Compliance &
Risk Group has a r
ange of important r
oles in relation t
o
risk management, as described on pages 50 t
o 62.
Strat
egy
Scenarios are h
ypothetical in nature describing a path
of dev
elopment leading to a plausible future st
at
e.
During the y
ear, w
e work
ed with our ext
ernal advisers
to ident
ify the potential ph
ysical risks, tr
ansition risks
and opportunities that could affect our business in
both a 1.5oc scenario (lo
w phy
sical risk, high transition
risk), as recommended b
y the T
CFD recommendations
and in line with the 2015 Paris Agr
eement and a 4oc
high emissions (high phy
sical risk, lo
w transition risk)
scenarios. W
e compiled the list on both a top-do
wn and
bottom-up basis, acr
oss each of our business areas. W
e
refined the list t
o e
x
clude those where our assessment
of their potent
ial likelihood and impact meant the risks
w
ere not mat
erial*, or to combine cert
ain risks (such as
heatw
av
es and wat
er str
ess) where the
y arose fr
om
the same cause
.
* The materiality of the climat
e related risks wer
e assessed by taking int
o account probability of
failure and pr
oductivity loss values over time for each risk and their impact on Fr
asers Group
’
locations and operations using a qualit
ative approach in line with our risk management
framework.
Ph
ysical Risks
Fr
om our shortlist of phy
sical risks, w
e identified the
follo
wing pot
ential hazar
ds:
•
riv
erine flooding;
•
surface w
at
er flooding;
•
extr
eme wind;
•
coastal inundat
ion; and
•
extr
eme heat.
T
o understand the pot
ential impact of these hazar
ds, w
e
aggregat
ed our business operations int
o thr
ee areas:
sourcing, logistics and r
etail
. Underlying these three
areas ar
e 11 sectors of oper
ation, co
v
ering the breadth
of our v
alue chain, as shown in the diagr
am belo
w
. W
e
then re
vie
wed these sect
ors acr
oss 11 ke
y countries
of operation.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
41
Each haz
ard w
as assessed for:
•
the annual probability of that haz
ard causing an
asset or sector t
o st
op w
orking, with or
without damage;
•
the percent
age loss of product
ive av
ailability of an
asset due to component f
ailure
, damage or repair;
and
•
the resulting pr
oductivity loss for F
rasers Gr
oup,
w
eighted b
y the per
centage of s
ales and
procur
ement in each country
.
This analysis demonstr
ated that the k
e
y phy
sical risks
for F
rasers Gr
oup are coast
al inundation and extr
eme
heat, and that the potent
ial impact of riverine flooding,
surface flooding and e
xtreme wind ar
e not material
. No
significant changes are e
xpect
ed to the Gr
oup
’s business
model as a result of the anal
ysis, other than considering
a potent
ial other sourcing locations.
F
or coastal inundat
ion, although there is uncert
ainty
around the time horiz
on o
v
er which climate r
elated risks
will materialise
, w
e assessed the risk at specific points in
time, such as 2025
, 2030 and 2050
, r
epresenting short,
medium and long term t
ime horizons, acr
oss both the
1.5oc and 4oc scenarios. for e
xtreme heat, w
e considered
the number of median (>35oc) and e
xtremel
y hot days
(>40oc) in 2030 and 2050
, acr
oss both temper
ature-rise
scenarios.
Our assessment of the impact on our productivity and
the range of opportunities t
o mitigat
e that impact are
sho
wn in the table belo
w
. Ov
erall
, we see these risks as
arising in the medium to long t
erm. W
ithout mitigating
actions, w
e are lik
ely t
o see the impact of these risks on
the business in around 20 y
ears.
Risk
Potential annual impact
on productivity
Mitigations av
ailable &
Business response
Coastal
inundation
•
Sourcing: The
annual probability of
occurrence of coast
al
inundation causing
closures and disruptions
to oper
ations is likely
to incr
ease ov
er time.
The production of
raw mat
erials and
manufacturing of
garments are sect
ors
that are lik
ely to hav
e
high productivity loss.
•
Logistics: Coastal
inundation resulting
in coastal flooding
could have major
consequences on
transport infrastructur
e.
Potent
ial productivity
loss impact for both
land and wat
er
transport
ation is likely
to incr
ease.
•
Baseline assessment of
supply chain climate
resilience
.
•
F
ocus on countries that
came out as highest risk
in our analysis.
•
Engage with
suppliers, brands or
manufacturing units t
o
dev
elop or impro
ve their
risk mitigations.
•
Explore other supplier
bases that are
more resilient
.
Extreme heat
•
Sourcing: There is
an increase in the
likelihood of e
xtreme
heat ev
ents such as
heatwav
e, dr
ought
etc. mat
erialising and
leading to closur
e/
stoppage of activities in
supply chains.
•
Logistics: The
annual probability
of occurrence of an
extr
eme heat ev
ent
causing disruptions
to F
rasers Group
’
operations is lik
ely to
increase o
ver time
.
•
Retail: An incr
ease in
the productivity loss
impact of phy
sical risks
could be felt across
most ret
ail activities.
•
Understand supply
chain risks through
engagement, including
suppliers’ business
continuity and
contingency plans.
•
W
ork with suppliers t
o
mitigate f
actory-le
v
el
operational risks.
•
Build an internal dat
a
set to tr
ack the effects
of rising temper
atures
across locations.
•
Explore other supplier
bases that are
more resilient
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
42
T
ransition Risks
The risk identification process described earlier
highlighted se
v
eral pot
ential risks r
elated t
o the
transition t
o a lo
w-carbon economy
. These were
:
•
the cost to tr
ansition, as a result of rising ener
gy
costs and the swit
ch t
o rene
w
able energy gener
ation;
•
increased costs of r
aw materials and pr
oduction;
•
carbon tax
es and other carbon-pricing mechanisms;
•
regulat
ory changes, reporting obligat
ions and
increased st
ak
eholder concerns; and
•
shifting consumer pre
fer
ences and supplier
requir
ements, which also presents opportunities f
or
us (see belo
w).
W
e analysed the pot
ential impact of rising costs
of energy
, raw mat
erials and pr
oduction, and the
introduction of carbon t
ax
es or pricing, using our
ext
ernal adviser’s specialist modelling t
ools. The effect
of regulat
ory
, reporting and st
ak
eholder changes, and of
shifting consumer pre
fer
ences and supplier requirements,
w
ere assessed using qualit
ativ
e re
view
s, analysis of
trends and identification of k
e
y driv
ers. All of these
analyses w
ere conducted f
or both the 1.5oc and 4oc
scenarios. This enabled us to pr
oject the lik
ely traject
ory
of costs, tax
es and other variables, t
o giv
e a potential
impact for each y
ear o
ver the period fr
om 2020 t
o 2050
.
The risks, their potential impacts and the mitigat
ions
av
ailable are summarised in the t
able below
. Over
all,
while these risks may arise in a shorter t
imeframe
(less than fiv
e years), and continue t
o impact o
v
er the
medium to longer t
erm, w
e are w
orking to mitigat
e these
as sho
wn in the table belo
w;
Risk
Pot
ential impact
Mitigations av
ailable &
Business response
Cost to
transition t
o
a low-carbon
economy
•
Increased energy costs,
as low-carbon ener
gy
and technology t
ends
to be mor
e capital
intensiv
e.
•
Increased capit
al
expenditur
e, for
ex
ample to implement
rene
wable ener
gy
generation on F
rasers
Group sit
es.
•
Business planning to
fact
or in higher energy
costs and capital
expenditur
e.
•
Dev
elop a robust
transition plan aligned
to the business str
ategy
.
Increased
cost of raw
materials and
production
•
Increased costs and
reduction in pr
ofitability
if supplier costs are
passed through as a
result of fluctuating r
aw
material prices, carbon
price rises etc.
•
Engage with suppliers
and gain increased
visibility of supply chain
operations.
•
Dev
elop methods to
impro
ve agility of the
supply chain, to av
oid
major disruptions.
Carbon tax
and other
carbon pricing
mechanisms
•
Increased cost base
as a result of higher
carbon prices, felt
directly or indir
ectly
across most activities in
the sector
.
•
Measure Scope 3
emissions, to det
ermine
materiality of suppl
y
chain exposur
e to
carbon prices.
•
Engage with suppliers,
to influence mitigation
of supply chain
emissions.
•
Identify products
that are less emission
intensiv
e.
Regulatory
changes,
reporting
obligations
and increased
stak
eholder
concerns
•
Regulations are
changing rapidly
,
adding to e
xisting
reporting r
equirements.
•
Insufficient
transparency in our
operations could
lead to litigation and
reput
ational risks.
•
Set up repeat
able
climate-r
elated dat
a
collection processes.
•
Engage with
stak
eholders to enable
ov
ersight of ne
w
regulat
ory requirements.
•
Regular stockt
akes
and assessment of
regulat
ory compliance
measures.
Shifting
consumer
pref
erences
and supplier
requirements
•
Increased consumer
demand for highest
lev
els of low-carbon
compliance and
great
er transparency of
operations.
•
Dev
elop supplier
selection criteria t
o
identify leaders in the
domain and screen out
suppliers who do not
meet the criteria.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
43
Opportunities
W
e have identified opportunities in r
elation t
o the transition t
o a lo
w-carbon economy
. T
hese hav
e the pot
ential to
increase our r
ev
enues, enhance our efficiency and optimise costs, and open up a br
oader range of financing sour
ces.
The opportunities are set out in the t
able belo
w:
T
ransition opportunity
Benefit for F
rasers Group
Potential act
ions
Optimisation and efficiency of
processes and assets
•
There is an opportunity for F
rasers Group t
o reduce
costs by upgr
ading and impro
ving assets and processes
across the v
alue chain.
•
Impro
ve building and infr
astructure efficiency
.
•
Swit
ch to an all-electric v
ehicle fleet.
•
Optimise logistics and the supply chain.
Financing
•
There may be opportunities t
o raise debt capital t
o
finance climate pr
ojects.
•
A robust approach t
o managing climate risks and
opportunities can help us to attr
act and retain ne
w
shareholders.
•
Identify potential opportunities t
o finance climate
projects using debt capit
al.
•
Continue to enhance our climat
e-relat
ed reporting and
our sustainability r
eporting more generall
y.
Shifting consumer pref
erences
and supplier requirements
•
There may be opportunities t
o capitalise on the
emergence of a ne
w and gro
wing market for
sustainable
, clean and responsibly sourced pr
oducts.
•
Engage with suppliers and brands who are leaders in
sustainability
.
Risk Management
The process thr
ough which we hav
e identified and
assessed our climate-r
elat
ed risks during the year is
described in the Strat
egy section abo
v
e. Our o
v
erall
risk
-management frame
w
ork is set out on page 50.
W
e have begun w
ork t
o fully int
egrat
e the identification,
assessment and management of climat
e-relat
ed risks
into our Gr
oup-wide ERM. This w
ork is based on the
follo
wing principles:
•
Disaggregat
ion.
W
e will assess climate risks as
individual phy
sical and transition risks, acr
oss our
regions and sit
es.
•
Cross-cutting.
W
e will integrat
e climat
e risks into
existing pr
ocesses, so the
y can be considered
alongside our other operational and business risks,
including their inter
action with those risks.
•
Appetit
e.
W
e will set an appropriat
e risk appetit
e for
each disaggr
egated risk.
•
Ownership.
W
e will set clear roles and
responsibilities, fr
om the top do
wn.
•
Escalation.
W
e will establish a pr
ocess to escalat
e
risks to senior management, if necess
ary
.
•
Monitoring and e
valuation.
W
e will set up a
continuous process f
or monitoring, e
v
aluating and
reporting acr
oss the business.
Our w
ork to dat
e includes climat
e risk being included
within our ESG principal risk and ensuring that
phy
sical and transition risks ar
e included in the
functional risk regist
ers o
wned b
y the respectiv
e
business risk o
wners, such as finance, property
,
logistics, commercial tr
ading, supply chain and
people which can be found in on page 33.
Our plan is then to discuss pot
ential actions with each
team, based on the principles described abo
ve. W
e are
implementing a Climat
e Risk Group, which will meet
regularly t
o discuss and driv
e forw
ard our approach t
o
climate risk management
. This will include all of the risk
o
wners mentioned abov
e with ex
ecutiv
e sponsorship
and Audit Committ
ee o
versight, t
o ensure w
e remain
focused on the risks and opportunities f
or the Group
W
e will report on our progr
ess with integr
ating climat
e
risks into the ERM in our FY
23 Annual Report.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
44
Metrics and T
argets
Information on our gr
eenhouse gas emissions can be found on page 46. Curr
ently w
e do not hav
e an appro
v
ed
greenhouse gas emissions r
eduction tar
get as part of our metrics and t
argets. Ho
w
ev
er, w
e hav
e submitted our
commitment to the SB
T
i, which has no
w been appro
v
ed and we plan t
o hav
e a t
arget in place within the ne
xt tw
o
y
ears. The table belo
w sets out the metrics w
e will use to monit
or pr
ogress with managing our climat
e-relat
ed
opportunities and risks, as w
ell as the tar
gets w
e have set in r
elation t
o them.
Metric Category
Climate-r
elated T
arget
Climate-r
elated Metric
Reasoning
T
ransit
ion Risks
All sustainability
-related mandat
ory
reporting obligations met on time
annually
% sustainability
-related r
egulatory
disclosures met within requir
ed
timeframe annuall
y
W
e continue t
o be committed t
o
complying with ongoing regulat
ory
changes and support the aims of
initiativ
es such as T
CFD to prepar
e
companies for climat
e change.
Physical Risks
Counter-cost the t
op 40% of our
own br
and contributing lines with
alternativ
e manufactur
ers by end
of FY23
% of products b
y contribution with
an alternativ
e manufactur
er plan
in place
T
o migitat
e the risks of coastal
inundation and extr
eme heat we
plan to count
er cost the top 40%
of our own br
and contributing lines
with alternativ
e manufactur
ers
to pr
ovide us with an alt
ernative
partner, should our curr
ent partner
become unavailable
.
Physical Risks
Ensure top manufactur
er by
contribution has risk mitigation in
place in line with 2050 pr
ojected
floodplain by end of FY
23
Risk mitigation in place Y
/N
Following our anal
ysis as part
of T
CFD w
e plan to share the
project
ed floodplain information
with our manufacturers t
o help
them mitigate their pot
ential
physical risks in their locat
ions.
Climate-r
elated Opportunities
90%+ Sports Direct GB st
ores with
a lease of 2 years or mor
e and no
planned fix
ed break to be fitt
ed
with LED lighting by end o
f 2023
% of Sports Direct GB st
ores with
LED lighting
Lighting w
as identified as
the great
est energy reduction
opportunity within our estat
e. W
e
chose Sports Direct st
ores as a
starting point as the
y are the lar
gest
percent
age of our estat
e.
Climate-r
elated Opportunities
Increase our container fill rat
e b
y
5% b
y end of FY23 based on a
2020 base year
A
ver
age units per delivery
By maximising the fill rate of our
containers w
e reduce the number
of containers tr
ansported thereb
y
reducing greenhouse gas emissions
and costs relat
ed to those deliv
eries
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
45
Greenhouse Gas Emissions and
Energy Consumption
Reporting period
1 May 2021 to 30 April 2022
Baseline year
(1)
FY20
Consolidation approach
Financial control
Boundary summary
All entities and facilities globally
, either
owned or under financial contr
ol, w
ere
included. Emissions from air conditioning and
refriger
ation units are e
xcluded due t
o the
cost of data collection. These ar
e expect
ed to
be a negligible percent
age of scope
1 emissions.
Consistency with
financial stat
ements
Organisations ar
e encouraged t
o align
information t
o financial years, t
o aid
comparability and consist
ency of information
with financial performance. SE
CR reporting
has been prepared on an annual basis t
o 30
April 2022, which is aligned with the financial
year of F
rasers Group
. The difference in
emissions of these date r
anges is expect
ed to
be negligible.
Emission fact
or
data sour
ce
DEFRA (BEIS) 2021 has been used for all
emissions sources.
Assessment methodology
The footprint is calculated in accor
dance
with the Greenhouse Gas (
GHG) Protocol
and Environment
al Reporting Guidelines:
Including streamlined energy and carbon
reporting guidance
. Scope 2 reporting uses
the market
-based calculation approach.
Estimations
18% of the energy dat
a (kWh
) and 16% of the
emissions data (FY20: 10
.3% of the energy
data (k
Wh) and 7
.6
% of the emissions dat
a)
used to pr
epare these results is based on
estimations or extr
apolations, as calculated
by a thir
d-party pro
vider
.
Intensity r
atio
Emissions per £m of re
venue
(1)
Due to the impact of Co
vid-
19, the base y
ear chosen for all future SE
CR
comparisons is FY20 (1 May 2019 t
o 30 Apr 2020).
The Group has engaged a third-party pr
o
vider to assess
emissions and energy consumption f
or the periods
report
ed in these results
.
Scope 1 emissions comprise the emissions associated
with the combustion of fuels b
y the Group
, as w
ell as
additional emissions sources such as tr
ansport fuel.
Scope 2 emissions comprise the emissions associated
with electricity consumption b
y the Group
, as w
ell
as emissions from an
y generat
ed electricity
. Scope 3
emissions are other indir
ect emissions occurring as a
consequence of the activities from sour
ces not o
wned
or controlled b
y the Gr
oup, including indir
ect transport
from tr
av
el in employ
ee-o
wned cars and lease/hire
cars not o
wned by the C
ompany
, transmission and
distribution losses and w
ell to t
ank losses. The non-UK
emission fact
ors are those published b
y IEA and specific
to each country
.
CO2 equiv
alent fact
ors are used, which ensur
es w
e hav
e
report
ed on all of the emission sources r
equired under
the Companies Act 2006 Regulat
ions. Consumption
considers all Group companies and no adjustments
hav
e been made to compar
ativ
es for prior periods for
subsidiaries newl
y acquired in the period.
The Group
’s CO2 emissions and supporting metrics are
detailed in the f
ollo
wing table:
Y
ear
FY22
FY20
Scope 1 CO2 emissions (t
onnes)
38,
913
20
,98
7
Scope 2 CO2 emissions
(market based) (t
onnes)
40,
077
68,
162
Scope 3 CO2 emissions (t
onnes)
13,08
1
7,
5
5
0
T
otal Scope 1, 2 and 3
emissions (tonnes)
92,071
96,699
CO2 emissions (t
onnes) / £m turnov
er
19.2
24.4
CO2 emissions vs turno
ver Inde
x
(2020 = 100)
78.7
100
7
4.7% of Scope 1 and 2 emissions r
elat
e to the UK and
UK offshore ar
eas.
The table belo
w sho
ws the Group
’s energy consumption.
Scope 1 consumption relat
es t
o the consumption of
fuel and consumption from f
acilities operat
ed b
y the
Group
. Scope 2 consumption is based on the amounts of
electricity purchased thr
ough the period, as w
ell as heat
and steam the Gr
oup generat
es for its o
wn use
.
Y
ear
FY22
FY20
Scope 1 consumption (kWh)
184,
646,729
101,337
,897
Scope 2 consumption (kWh)
305,
169,539
276
,6
18,
984
T
otal Scope 1 and 2
consumptions (kWh)
489,
816,268
377
,956,88
1
The majority of the increase is due t
o the later part o
f
FY20 being impact
ed b
y the Co
vid-
19 pandemic.
The table belo
w sho
ws energy consumption f
or the UK
and UK offshore ar
eas only:
Y
ear
FY22
FY20
Scope 1 consumption (kWh)
156,504
,302
80,
667
,717
Scope 2 consumption (kWh)
224
,4
94,586
195,
475,533
T
otal Scope 1 and 2
consumptions (kWh)
380,
998,888
276,
143,250
Fr
asers Group is committ
ed to r
esponsible energy
management and sustainability
, which it pr
actises
throughout the or
ganisation wher
e it is cost effectiv
e
to do so
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
46
During the reporting y
ear the Gr
oup has implemented
the follo
wing energy and carbon e
fficiencies across the
organis
ation, to ensur
e that energy consumption and
associated emissions ar
e reduced:
•
Energy consumption f
or each Ret
ail site in the UK
is monitor
ed, t
o make sur
e they ar
e operating in an
efficient w
ay and t
o ensure that le
v
els are reducing
.
•
W
e continue to upgr
ade fluorescent lighting t
o
LED
. for the Ret
ail sit
es all opportunities t
o replace
lighting during a re
fit wer
e t
aken and the r
esulting
consumption has reduced b
y c. 52% for those sites
that hav
e had a full refit of lighting t
o the lat
est
LED technology
.
•
F
ace-t
o-face meetings with colleagues and
suppliers hav
e reduced thr
ough the increased
av
ailability of video confer
encing thereb
y reducing
the amount of trav
el and further r
educing Fr
asers
Group
’s carbon footprint.
•
W
e are implementing mini Building Management
S
yst
ems that are highly fle
xible based on common
industry standar
ds and pro
vide e
x
cellent
energy s
avings.
•
W
e are using additional submet
ering within
sites and pr
operties, t
o impro
v
e real-
time energy
consumption and promot
e granular in-depth r
e
view
of facility ener
gy data.
•
Heating and v
entilations sy
stems ar
e undergoing
trials that include retr
ofits to impr
o
v
e
energy efficiency
.
•
W
e are implementing v
oltage opt
imisation projects
that pro
vide cost
-effectiv
e solutions and deliv
er
optimised supply v
olt
age.
A number of other energy efficiency measur
es are
under consideration f
or implementation during the ne
xt
reporting y
ear
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
47
SE
CTION 172 ST
A
TEMENT
The Board confirms that, during FY22 it has act
ed in
the w
ay it considers, in good faith, w
ould be most
likel
y to pr
omot
e the success of the Company f
or the
benefit of its members as a whole
, having regard t
o
the stak
eholders and matt
ers set out in s.
172(1)(a)-(f) of
the Companies Act 2006. This st
at
ement sets out the
matters consider
ed under each subsection of s.
172(1)
(a)-(f) and pro
vides cr
oss ref
erences t
o where further
information can be f
ound in the Annual report. The
areas the Boar
d focused on during the y
ear and the k
ey
decisions made are set out on page 65 t
o 71 and our
report on st
ak
eholder engagement during the year is on
page 66.
A.
The likel
y consequences of any decision in the
long term
When making ke
y str
ategic decisions, the Boar
d
tak
es int
o consideration the str
ategy
, purpose,
v
alues and culture of the Gr
oup. The Board is
focused on the sust
ainability of the Group and
mindful of the impact the decisions may hav
e on
this objectiv
e. f
or each matter
, it also considers
the likel
y consequences of any decision in the
long term, ident
ifying stak
eholders who may be
affect
ed and care
fully considering their inter
ests
and any pot
ential impact part of the decision-
making process may hav
e
. During the year
, the
Board has made decisions based on Boar
d papers,
present
ations from senior e
x
ecutiv
es, informat
ion
documents, discussions with ext
ernal advisors
and reports.
Principal Decisions/St
eps:
Ke
y appointments t
o positions of senior leadership
within the Group which included:
Prepar
ation for the tr
ansition of Michael Murray who
w
as appointed as CE
O on 1 May 2022 as part of the
Board’s long-
term succession planning
. The Board felt
Michael had pr
ov
ed himself t
o be a v
aluable asset to the
business, as an ext
ernal consult
ant in relation t
o property
matters and the ele
v
ation of the phy
sical st
ore est
ate
.
More r
ecently
, in his role of Head of Ele
v
ation, he has
built up a strong r
apport with a number of ke
y br
ands.
The appro
v
al of the appointment of Dav
e Al-Mudallal
and Sean Nevitt as Chief Oper
ating Officer and Chief
Commercial Officer r
espectiv
ely
, so that more f
ocus can
be placed on areas of the business that will add v
alue
and contribute t
o the ongoing Ele
v
ation strat
egy
.
The decision to continue the shar
e buyback progr
amme
w
as also ke
y during the financial y
ear t
o demonstrat
e
that the Board continues t
o maint
ain confidence in the
performance of the Gr
oup.
The Board continued t
o be acquisitiv
e throughout the
y
ear
. The acquisition of Studio Retail Limit
ed w
as of
strat
egic import
ance to the Gr
oup due to its cr
edit
offering which is an ar
ea that the Group is k
een t
o
explor
e for its other f
ascias. SRL
’s expertise in this regar
d
will pro
vide v
aluable insight for the Gr
oup.
B.
The int
erests of the Compan
y’s emplo
y
ees
Details of the init
iatives and engagement with our
colleagues is detailed in the W
orkers’ R
epresent
ativ
e
report, the Our People r
eport and the
Direct
ors’ r
eport.
Principal Decisions/St
eps:
The Non-Ex
ecutiv
e W
orkforce Direct
or r
emains the
primary method that w
e use to ensur
e that colleagues
are list
ened t
o and responded t
o b
y somebody who
fully underst
ands their situation. Cally Price r
emains the
W
orkers’ R
epresent
ativ
e on the Board and r
etains full
control of the colleague w
elf
are port
al.
The Group has also implement
ed a new e-learning and
dev
elopment programme which includes a ne
w learning
platform for colleagues which not onl
y co
vers r
egulatory
learning, including data pr
ot
ection, but also personal
dev
elopment and wellbeing courses that can be used
outside the business.
It has also been decided that a Leadership Academ
y
that pro
vides pro
fessional accredit
ation and fost
ers
home gro
wn t
alent from within the or
ganisation should
be offer
ed. This allows us t
o in
vest in our people
and ret
ain our t
alent, which helps with the long-t
erm
planning and sustainability of the Gr
oup.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
48
C.
The need to f
oster the Compan
y’s business
relationships with suppliers, cust
omers and others
The Group aims t
o dev
elop and maint
ain
mutually beneficial business r
elationships with
all our suppliers and go
vernment agencies and
other stak
eholders. Det
ails of the Compan
y’s
business relationships with suppliers, cust
omers,
regulat
ors and lenders are set out in the Corpor
at
e
Go
vernance R
eport.
Principal Decisions/St
eps:
•
Our new lo
yalty progr
amme has been launched.
•
W
e have incr
eased the available cust
omer service
contact channels f
or our customers t
o pr
ovide
great
er choice.
•
W
e are focusing on incr
easing the number of
satisf
action surve
y
s to assist with our str
ategy of
impro
ving o
v
erall cust
omer satisf
action.
•
Re
w
orked oper
ating hours, to be aligned t
o
customer demands and act
ivity
.
D.
The impact of the Compan
y’s operations on the
community and the envir
onment
The ESG report on page 33 det
ails the initiativ
es
w
e have undert
ak
en in sustainability and the
community
.
Principal Decisions/St
eps:
•
W
e have de
v
eloped and published our ESG policy
.
•
The Group has signed up t
o the te
xtiles 2030
initiativ
e to addr
ess sust
ainability issues within the
supply chain.
•
W
e have de
v
eloped ext
ensiv
e metrics and tar
gets
around T
CFD reporting (see page 40).
•
The Group has responded t
o the SB
Ti’s ur
gent call
for corpor
ate climat
e action, b
y committing t
o
align with 1.5°C and net-
zer
o through the Business
Ambition for 1.5°C campaign.
As part of our sustainability plans, the Gr
oup has
launched a pilot – the ReLiv
ed Scheme, which is aimed
at recy
cling used clothing so it can be redistribut
ed t
o
the people in the communities that need it the most. W
e
are also supporting the Bumblebee Conserv
ation T
rust
and hav
e launched a campaign to s
ave the bumblebees
.
E.
The desirability of the Compan
y maintaining a
reput
ation for high st
andards of business conduct
At all times w
e endeav
our to adher
e t
o strict
Corporat
e Go
v
ernance standar
ds. The Board
continues t
o comply with the Corporat
e Go
v
ernance
Code as w
ell as industry best practice
.
Principal Decisions/St
eps:
F
ollo
wing recommendations fr
om ext
ernal consult
ants,
the Board appr
ov
ed the revie
w and elev
ation of the
Group
’s internal policies and procedur
es t
o bring them
into line with industry st
andar
ds and best practice
.
These new policies and pr
ocedures implement gr
eater
lev
els of transparency within the business.
F.
T
he need t
o act fairly as betw
een members of
the Company
All shareholders of the Compan
y hold ordinary
shares which att
ach the same rights and benefits
.
W
e ensure that all shareholders hav
e the
opportunity to e
xpr
ess their concerns to the Boar
d
throughout the y
ear
, with the e
xistence of our
inv
est
or relations cont
act on the Group
’s websit
e,
and endeav
our to r
espond when appropriat
e. The
A
GM allo
ws an opportunity for shar
eholders to ask
questions and t
o discuss issues in more depth.
Principal Decisions/St
eps:
The Group r
ecognises that the inter
ests of our
institutional inv
estors and other shareholders may not
alw
ays align with that of our majority shar
eholder
. As
a result, cert
ain resolutions at the A
GM are requir
ed to
pass on a majority of independent shareholders v
ot
e.
The Group invit
es and analy
ses feedback fr
om inv
est
ors
in relation t
o their v
ot
es on resolutions put forw
ard
at the A
GM as w
ell as internal policies
. This feedback
is routinel
y present
ed to the Boar
d for consider
ation
during its decision making and long-t
erm planning.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
49
PRINCIP
AL RISKS AND
UNCER
T
AINTIES
Our Risk Management F
rame
w
ork
The Board has o
v
erall r
esponsibility for the effect
iveness
of the Group
’s syst
ems of risk management and int
ernal
control. These s
yst
ems are int
ended t
o manage, r
ather
than eliminate
, the risk of failing t
o achie
ve business
objectiv
es, and they pr
o
vide reasonable but not absolut
e
assurance against the risk of mat
erial misst
atement or
financial loss.
The Audit Committ
ee supports the Board with
discharging its r
esponsibilities, under a delegated
authority
. The Chief Ex
ecutiv
e Officer has o
ver
all
accountability f
or managing risks in the business, and
his direct r
eports are account
able t
o him for effect
ivel
y
managing those risks within their remits.
The Group
’s risk management framew
ork comprises
a top-do
wn and bot
t
om-up approach t
o risk
identification, e
valuation and mit
igation. Principal risks
are discussed and agr
eed b
y ex
ecutive management
through the Compliance & Risk Gr
oup and b
y the Audit
Committee on behalf of the Boar
d. The Board and/
or its sub-committees discuss each principal risk at
least annually and r
eceive pr
esentat
ions and detailed
risk reporting fr
om risk o
wners on a cyclical basis
. Risk
o
wners re-e
valuat
e principal risks in adv
ance of each
Compliance & Risk Group discussion. An
y changes are
report
ed t
o the Audit Committ
ee, as part of our Gr
oup
Risks Profile r
eporting.
The Compliance & Risk Group pr
ovides connectivity
betw
een ex
ecutive management’s responsibilities
for risk management and int
ernal controls and the
o
versight r
oles of the Audit Committ
ee and the Board. It
facilit
ates cr
oss-functional discussion and collaborat
ion
across principal risk ar
eas and matters of int
ernal
control. It also f
acilit
ates horiz
on scanning, emerging
risk discussions, and challenges the appropriat
eness of
internal contr
ols and their eff
ectiveness
. The Compliance
& Risk Group
’s activities are report
ed formall
y to the
Audit Committ
ee. Our St
eering Groups also r
eport
formally t
o the Compliance & Risk Gr
oup, completing
our go
vernance structur
e.
Our approach t
o risk management is illustrat
ed belo
w:
RISK MANA
GEMENT FRAMEW
ORK
Board | Audit Committ
ee | Sub-committees
Compliance & Risk Group
Steering Gr
oups
THREE LINES MODEL
First line
Second line
Third line
Management
Compliance & other
assurance functions
Internal A
udit
RISK
CONTR
OLS
ASSURANCE
Operational t
eams and F
unctional lev
el risks
Risk Identification
W
e have continued t
o identify and assess both our
principal and functional risks with management which
has enabled us to further de
v
elop our risk management
frame
w
ork. Horizon scanning and emer
ging risks
form part of our structur
ed compliance and risk group
discussions.
Risk Controls and R
esponses
W
e have continued t
o enhance clear definitions r
elating
to contr
ols assessment, probability and impact, t
o
ensure our risks ar
e clearly prioritised in line with our
defined risk appetit
e across each of our principal and
functional risks.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
50
Go
v
ernance and Monit
oring
The responsibility for identifying, assessing and
managing risks resides with management at a
functional and ex
ecutive le
v
el. The Compliance and
Risk Group pr
ovides r
eports and det
ailed ev
aluation of
ke
y principal risks t
o the Audit Committ
ee. The Audit
Committee on behalf of the Boar
d, undert
akes an
annual effectiv
eness assessment of the risks and internal
controls of the Gr
oup.
During the period, the Audit Committ
ee, on behalf of the
Board, has: undert
ak
en a full re
view of the Gr
oup risk
regist
er and receiv
ed risk owner present
ations, det
ailed
risk reporting and summary updat
e report
ing on the
Group
’s principal risks profile, f
or further discussion
and challenge.
Audit and Assur
ance
W
e have a number of assur
ance functions that pro
vide
second line monitoring and contr
ols assessment e.g
.
Health & Safety
, Digit
al risk, Information Security and
Ret
ail Support.
Our Group Int
ernal Audit function pr
o
vides independent
assurance that contr
ols are w
orking eff
ectiv
ely and
reports its findings t
o management and the Audit
Committee as per an agr
eed annual audit plan.
Principal Risks and Uncert
ainties
These are defined as our most significant risks that
could affect our str
ategic ambitions, futur
e performance
,
viability and/
or reput
ation. Principal risks ar
e cascaded
to oper
ational t
eams and central functions f
or discussion
and action on risk mitigations, as part of oper
ational risk
management activity
. Operat
ional risk management
facilit
ates the ele
v
ation of risks t
o the Compliance & Risk
Group
, for on
w
ard report
ing to the A
udit Committee
.
Board R
e
vie
w
The work of the A
udit Committee and the Int
ernal
Audit & Risk t
eam has been present
ed t
o the Board
for discussion. The Board is s
atisfied that the Group
’s
sy
stems of risk management and int
ernal contr
ol
(including financial, operat
ional and compliance
controls) hav
e oper
ated eff
ectiv
ely during the financial
period, up to and including the dat
e of this r
eport,
and no significant failings of int
ernal control w
er
e
identified during the period. The Group is committ
ed to
continuously impr
oving its risk management fr
amew
ork
and methodology
, in line with regulat
ory standar
ds and
the Group
’s Elev
ation strat
egy
.
Assessment of Principal Risks
W
e have carried out a r
obust assessment of our
principal and emerging risks in the period and our
principal risks profile has been updat
ed t
o reflect wher
e
our risks hav
e changed.
W
e have continued t
o respond w
ell to the on-going
challenges present
ed b
y the Co
vid-
19 pandemic in light
of the uncertainty ar
ound lock
downs in Eur
ope and ne
w
v
ariants during the period. The effects of the pandemic
on economies and society at large w
er
e more prominent
than expect
ed and w
e remain cautious with a number
of w
ell publicised macroeconomic headwinds on the
horizon in the f
orm of but not limit
ed to cost incr
eases,
supply chain issues and pot
ential squeez
es on consumer
spending po
wer
.
Envir
onmental
, social and gov
ernance (ESG) issues
featur
e more pr
ominently in our disclosures. Climat
e
and sustainability risks hav
e remained an integr
al part
of our commitment to ESG and our business oper
ations,
but hav
e pre
viously been incorporat
ed int
o our broader
disclosures on corpor
ate and social r
esponsibility
.
The follo
wing risks and mitigations are an e
xtract fr
om
our principal risks profile and ar
e not present
ed in an
y
order of priority
. Principal risks are those which w
e
consider pose a threat t
o our business model, futur
e
performance
, prospects and/
or reputation.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
51
Ref
erence T
o Strat
egy
1
Building ex
cellent relationships
with the W
orld’s best brands
2
Elev
ation in our digit
al offering
3
Elev
ation of our ph
ysical st
ores
4
Enablers : People, T
raining,
Brand, Communication, S
y
stems,
Aut
omation, Dat
a
Risk T
rends
Increasing
Unchanged
Decreasing
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
52
PRINCIP
AL RISKS
Strat
egy
The Group continues t
o deliv
er its Elev
ation str
ategy
, which focuses on the br
ands w
e sell, our digit
al offering and our
phy
sical stor
es. Our vision is t
o become the elev
at
ed multi-channel platform f
or sports, premium and luxury br
ands.
W
e continue to deliv
er w
ell against all aspects of our strat
egy
, and the on-going support of our k
ey partners and
inv
est
ors for our str
ategy has enabled this risk t
o reduce o
v
er the past 12 months.
Risk T
rend and
Links T
o Strategy
Risk
Controls and Mitigations
1
2
3
4
W
e fail t
o deliv
er our strategy e
fficiently, eff
ectivel
y and on a
timely basis, or w
e adopt the wrong strat
egy, which impacts our
long-t
erm gro
wth, performance and ambition.
•
The Board and senior management set and agree the Gr
oup
strat
egy and undertak
e both regular and detailed r
evie
ws.
•
Our Group is div
erse in terms of geogr
aphy and product
and ex
ecutiv
e management is able to r
espond to strat
egic
opportunities and challenges with agility, t
o maximise
achiev
ement of our strat
egic ambitions.
•
W
e continue t
o ev
aluate str
ategic brand acquisit
ions, to
pro
vide product and choice in line with our brand str
ategy
and add attractiv
e locations to the st
ore est
ate
.
•
Effectiv
e management of our property portf
olio supports our
elev
ated dir
ection.
•
W
e monit
or our performance, mark
ets and competition on an
ongoing basis.
•
Our strong financial controls, r
eporting and analysis help t
o
optimise resour
ce allocations, maximise profits and cash flo
w
and support efficient and effectiv
e strat
egic deliv
ery.
•
W
e perform ongoing r
esearch for insights int
o consumer trends.
•
Ongoing internal and e
xternal communication of our str
ategic
direction supports underst
anding, engagement and
effectiv
e deliv
ery.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
53
Third-Party Brand R
elationships, K
e
y Suppliers and Supply Chain Management
Ke
y br
ands, brand suppliers and major manufactur
ers are centr
al to our business and Ele
v
ation strat
egy
. Our str
ategic
acquisitions and business model aim t
o bring attractiv
e brands int
o the Group
, to support cust
omer demand and
choice.
Our supply chain is int
ernational and is subject to stringent management o
f supply chain logistics and w
orking capital
,
w
e continue to navigat
e thr
ough the well-publicised global suppl
y chain issues to ensur
e the flo
w of product is in line
with our strat
egic ambition.
W
e have continued t
o strengthen our br
and and supplier relationships during the pandemic, demonstr
ating the
strength of our business model and str
ategic perf
ormance. This also supports ne
w product av
ailability
, in line with our
elev
ation ambitions
.
Risk T
rend and
Links T
o Strategy
Risk
Controls and Mitigations
1
2
3
4
W
e fail t
o manage and lev
erage our supplier and br
and partner
relationships successfully
, to secur
e the right products for our
business at the right price and quality, and t
o meet or ex
ceed
our customers
’ expectat
ions. Failur
e to mitigat
e these risks might
impact our elev
ation tar
gets, performance and long-t
erm gro
wth.
•
The Group has a policy of for
ging close long-term commer
cial
relationships, which ar
e underpinned by our commitment t
o
product, ele
vation and cust
omer ex
cellence.
•
The Ele
vation str
ategy t
argets for
ging stronger relationships
with ke
y brand partners, and this continues t
o be an
ongoing priority
.
•
Dedicated r
elationship partners, procurement and commer
cial
teams support truly int
egrat
ed supplier engagement.
•
The Group utilises tw
o leading supply chain companies to
procure much o
f its own-brand pr
oducts. A Group-o
wned
supply chain entity further div
ersifies risk.
•
Our stock le
vels support
ed our ability to tr
ade through
the Covid-
19 pandemic and supply chain delays. W
e have
continued to secur
e ongoing supplies, due to the depth and
breadth of our commer
cial relationships.
•
Suppliers sign-up to the Gr
oup
’s Supplier Manual, which
enables us to monit
or and benchmark supplier performance.
•
Strong service le
vel agr
eements are in place, which help t
o
support an effectiv
e supply chain netw
ork.
•
Our own-br
and inv
estment targets consumer tr
ends and
complements third-party brands, supporting consumer choice
.
•
Influencer partnerships and brand collaborat
ions provide
opportunities for o
wn-brand gro
wth.
•
Electronic Dat
a Interface (EDI) capability impr
ov
es our process
efficiency through the commer
cial cycle and enhances
supplier engagement through a dedicat
ed supplier portal.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
54
Global Macro-economic Conditions, E
vents (P
andemic) or Political F
actors
The current geo-political e
v
ents and the on-going global pandemic are cor
e aspects of this risk in the period under
re
vie
w
. W
e also monitor global and national political change on an ongoing basis, for impacts on our str
at
egy and
supplier netw
orks. These are e
xternal e
v
ents and w
e respond w
ell t
o those fact
ors w
e can control. The str
ength of our
business and our performance enables us t
o generall
y absorb the broader indirect economic impacts associat
ed with
these risks (including the challenging economic conditions at present, with inflationary pr
essures and incr
eased energy
and cost of living) although w
e remain cautious at all times
.
The current macr
o-economic pressures and geo-polit
ical ev
ents occurring in East
ern Eur
ope have clearl
y increased
this risk and w
e continue to monit
or these e
v
ents and the potential impacts on the Gr
oup.
Risk T
rend and
Links T
o Strategy
Risk
Controls and Mitigations
1
2
3
4
F
ailure to anticipat
e, e
valuat
e or appropriat
ely respond t
o
ext
ernal ev
ents, or broader global/
macroeconomic conditions,
ev
ents (pandemic) or political fact
ors, may risk the achiev
ement
of our performance t
argets, impact our strat
egic direction or
longer-t
erm viability, or r
esult in lost opportunities for gro
wth.
Pandemic:
•
W
e hav
e continued to implement eff
ective r
esponse
procedures, with Boar
d ov
ersight and prioritisation.
•
Our mandated s
afe working and oper
ating standar
ds
prioritise colleague and customer w
ellbeing.
•
W
e deplo
yed ne
w safety r
equirements quickly
, with ext
ernal
validation and ongoing e
valuat
ion, revie
w and monitoring
.
•
Inv
estments in our online capability and customer service
delivery support our acceler
ated gr
owth in e-commer
ce.
•
Effectiv
e supplier and supply chain management optimises
working capit
al and lev
erages and str
engthens our
commercial relat
ionships.
•
Effectiv
e management of cash flo
ws and committed facilit
ies
supports our liquidity, long-
term viability and trading
partner support.
•
W
e conduct ongoing scenario analy
sis, with timely reporting
to
management.
•
W
e le
ver
age opportunities for inv
estment, through str
ong
management ov
ersight.
Monitoring of economic and political change:
•
W
e ensure ongoing financial and commer
cial ev
aluation of
economic and political change, with senior management
ov
ersight and Board r
eporting.
•
The ex
ecutiv
e-led Compliance & Risk Group holds emerging
risks discussions, with ov
ersight reporting t
o the
Audit Committee
.
•
Immediate online closur
e of sanctioned countries for deliv
eries
or trade through our w
eb platforms w
as actioned during the
current conflict.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
55
T
reasury, Liquidity and Cr
edit Risks
Short, medium and long-t
erm funding arrangements support our business oper
ations and our ability t
o meet our
financial obligations and deliv
er our strat
egic ambitions.
F
unding availability r
emains a principal risk but the o
ver
all risk lev
el trended down
w
ards t
o
w
ards the end of the period,
based on our trading perf
ormance and strat
egic deliv
ery through the height of the pandemic and the successful
refinancing o
f our Group facility t
o 202
4, ho
w
e
ver with the acquisition of Studio R
etail Gr
oup, w
e r
emain cautious of
our exposur
e t
o credit risk in respect t
o ‘
Credit cust
omer receiv
ables’ and ther
efor
e the o
ver
all risk remains unchanged.
Inter
est rat
e risks arise on net borr
owings. F
oreign ex
change risk arises from internat
ional trading, future s
ales and
purchases in f
oreign curr
ency, loans t
o non-UK subsidiaries and unhedged options t
o buy or sell for
eign currency
.
Credit risk arises primaril
y through our Wholesale and Licensing cust
omers and there is some le
v
el of count
er-party
risk exposur
e, although w
e do not consider this t
o be mat
erial.
Risk T
rend and
Links T
o Strategy
Risk
Controls and Mitigations
1
2
3
4
F
ailure to appr
opriately manage our funding and liquidity
positions and secure access t
o funding markets might impact our
plans for gro
wth, the ability to manage our tr
ading requir
ements,
meet longer-t
erm liabilities and the ongoing viability of
our business.
•
Our Board report
ing on debt, cov
enants, funding and cash
flow positions includes str
ess testing and e
xtensiv
e business
risk scenario analysis, including Br
exit, Co
vid-
19
, mandated
stor
e closures and relat
ed costs.
•
The Group T
reasury function manages liquidity, int
erest rat
e
and foreign e
x
change risks.
•
The Group treasury policy
, with Board o
versight, outlines
delegated authorities f
or operation, monit
oring and reporting.
•
W
e hav
e refinanced our Gr
oup facility until 2024 with an
option to incr
ease the term b
y an additional tw
o years.
•
Ongoing monitoring and r
eporting of going concern and
viability are part of our st
andard suite o
f internal and
ext
ernal reporting.
•
Our hedging strat
egy is revie
w
ed and appro
ved annually
as part of our treasury go
vernance
, with hedging activity
report
ed to Board.
•
Inv
estments of surplus cash, borro
wings and derivativ
e
inv
estments are made under pre-appr
ov
ed inv
estment criteria.
•
W
e use forw
ard f
oreign currency contr
acts to hedge against
highly probable f
oreign currency tr
ading transactions.
•
W
e conduct regular monit
oring of cust
omer and
counter-party cr
edit risks.
See note 3 t
o the F
inancial Stat
ements for further det
ail on financial risk management.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
56
Cust
omer
Customer engagement and r
et
ention is vital t
o our Group
, whether through our ph
ysical st
or
es or online. Continuing
to harness cust
omer v
alue and lo
y
alty consistently acr
oss the Group is comple
x as it is underpinned b
y our product
offerings, price and service
.
W
e have enhanced our e-commer
ce offering and significantly impr
o
ved our cust
omer e
xperience through our
Elev
ation str
ategy
, as w
ell as our cust
omer service and the underlying platform f
or our digital business.
W
e continue to str
engthen our elev
ation thr
ough our new concept st
ores and flagship mult
i-fascia offerings.
Risk T
rend and
Links T
o Strategy
Risk
Controls and Mitigations
1
2
3
4
F
ailure to anticipat
e and respond t
o customer needs or changes
in consumer trends and spending, or t
o drive and deliv
er
customer service e
x
cellence, may impact our gro
wth, value
,
reput
ation and strat
egic ambition.
•
W
e conduct ongoing monit
oring of customer insights and
competitor and mark
et trends.
•
W
e re
view and updat
e our customer policies periodically which
enables us to r
espond to and driv
e our customer-led str
ategy
.
•
Continued inv
estment in our customer service off
ering,
syst
ems and communication enables us to underst
and and
impro
ve our cust
omer experience
, working acr
oss all channels
including social media.
•
W
e continue t
o dev
elop and inv
est in our online offering, in
line with customer demand.
•
Ongoing enhancement of our ESG agendas supports our
strat
egy, in line with our cust
omer focus.
Legal and Regulat
ory Compliance
The legal and regulat
ory landscape in which w
e operat
e is constantl
y changing. Our commitment t
o delivering
robustly on our obligat
ions is central t
o our culture and v
alues.
W
e have incr
eased our assessment of this risk in the period, based on fact
ors which continue t
o impact the legal and
regulat
ory landscape in which w
e operat
e. W
e are conserv
ative in our assessments and ar
e confident in our ability
to manage these risks e
ffectiv
ely
. T
he tr
end we ar
e reporting r
ecognises anticipat
ed changes through our horiz
on
scanning and emerging risks e
v
aluations, until w
e have implement
ed our r
esponse plans.
Risk T
rend and
Links T
o Strategy
Risk
Controls and Mitigations
4
An action or incident may occur which results in a legal or
regulat
ory breach and which impacts our business financially
,
commercially or r
eputationally and/
or may result in litigation.
•
Our experienced and qualified in-house Legal t
eam pro
vides
core services and advice as w
ell as ov
ersight of ne
w and
emerging legislativ
e and regulat
ory requirements.
•
External advisers pr
ovide additional services and tr
aining in
specialist areas, as requir
ed by the business and legal t
eam.
•
Ke
y legislative and r
egulatory compliance risk ar
eas are
prioritised (including but not limited t
o), F
CA regulation, GDPR/
data pr
otection, health and saf
ety, IP rights, Listing Rules and
T
rading St
andards as an ongoing priority
.
•
Our Code of Conduct supports our ethics, behaviours and
culture, and our r
egulatory policies include
, for ex
ample,
Anti-Bribery & Corruption, Corporat
e Gifts & Hospitality and
Conflicts of
Int
erest.
•
W
e re
view the appr
oach and content of mandat
ory induction,
policies and ongoing training across r
elev
ant areas, for
all colleagues.
•
The Legal team is a k
ey contribut
or and adviser to the
Compliance & Risk Group
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
57
T
echnology Capability and Infrastructur
e Rene
w
al
W
e operat
e in a competitiv
e and challenging customer-f
ocused market
. Our syst
ems need t
o be built with customer
experience at the f
orefr
ont, supporting an end-t
o-end supply chain logistics service
. T
echnology is constantl
y ev
olving
and managing change and transf
ormation in this envir
onment is a ke
y focus.
W
e have in
vest
ed heavily in our aut
omation, enhancement of IT platf
orms and delivery capabilit
ies, which support a
modernised online and in-stor
e cust
omer experience
, built on resilient infr
astructure
.
Risk T
rend and
Links T
o Strategy
Risk
Controls and Mitigations
1
2
3
4
F
ailure to maximise the use of our e
xisting t
echnology or to
rene
w our infrastructure in a timel
y and effectiv
e way may aff
ect
our ability to k
eep up with the pace of change and deliver our
strat
egic ambition.
•
W
e continue t
o dev
elop our Group t
echnology strategy
, which
is aligned to the business str
ategy
.
•
Our forw
ard progr
amme of infrastructur
e renew
al enables us
to oper
ate our business efficiently and support our ability
to compet
e.
•
Our streamlining and decommissioning progr
amme supports
acquisitions and integr
ation activity
.
•
Inv
estments in our online trading capabilities, w
arehouse
management syst
ems and in-stor
e technology enhance the
end-t
o-end customer e
xperience.
•
Our experienced T
echnology team, supported b
y ongoing
skills training, helps us t
o keep abreast o
f emerging
technologies
and cust
omer-leading insights
.
•
W
e de
velop an ongoing cy
cle of internal tr
aining programmes
to support eff
ective use of e
xisting and new t
echnologies
across our businesses, as the
y are introduced.
•
Strengthening our information security capability has
enhanced our transformation pr
ogramme, our str
ategic
technology deliv
ery and the robustness of our
second-line ov
ersight.
C
yber Risks, Dat
a Loss and Dat
a Priv
acy
Att
empts to att
ack or gain unauthorised access to s
yst
ems and dat
a are becoming incr
easingly sophisticat
ed. Our
sy
stems ar
e critical t
o our operations and tr
ading. W
e have legal and commer
cial obligations t
o prot
ect the security
and priv
acy of the data w
e hold and pr
ocess.
W
e combine the continued inv
estment in our digital off
ering, automat
ion and technological change with the
strengthening of our people and in-house capabilities, t
o deliv
er on our risk mitigations.
Risk T
rend and
Links T
o Strategy
Risk
Controls and Mitigations
2
3
4
A cyber-attack may result in dat
a loss and/
or denial of service,
impacting our business financially through fines and penalties or
lost trade, as w
ell as our reput
ation and our ability to oper
ate
.
F
ailure to adequat
ely prot
ect our processes and the dat
a we hold
may result in legal or regulat
ory breach, loss of trust and financial
loss.
•
W
e hav
e strat
egies and policies in place to support our IT
security, with continued de
velopment and r
evie
w
.
•
W
e collaborat
e closely with our industry leading service
partners, who pro
vide core services be
yond our in-house
capabilities. Capability deliv
ery, security and savings ar
e
core driv
ers.
•
Prot
ection tools, including encryption, and det
ection tools ar
e
in place to support eff
ective monit
oring and reporting, and ar
e
re
view
ed r
egularly
.
•
W
e hav
e enhanced our information security capabilities and
strengthened our second-line monit
oring.
•
W
e conduct an annual e
xternal re
view of our cyber
infrastructure and penetr
ation testing acr
oss the Group
.
•
Strengthening our dat
a protect
ion mandate, enhancing our
policies and procedures and ongoing int
ernal training help
to mitigat
e data pr
otection and priv
acy risks and support
delivery of our change and tr
ansformation progr
amme.
•
W
e hav
e an ongoing programme of security and priv
acy
monitoring acr
oss our Group and ext
ended enterprise
.
•
Our in-house Legal team supports second-line monit
oring and
reporting of legislativ
e compliance.
•
W
e hav
e continued to in
vest in dat
a prot
ection training and
communications (and local legislativ
e equivalents in our
ov
erseas
operations).
•
W
e rout
inely action and ret
ain Data Prot
ection
Impact Assessments.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
58
Business Continuity Management and Incident Response
Our Head Office and Distribution Centre at Shir
ebrook and our e-commer
ce activity are critical t
o our business
operations. Ther
e is an ongoing and increasing r
eliance on the availability o
f technology acr
oss our Group
. W
e need
the ability to r
espond t
o incidents effectiv
ely and on a timel
y basis, to ensur
e continuity of operat
ions and trade
.
W
e have continued t
o inv
est in our war
ehouse automation and de
v
elop appropriat
e document
ed contingency
strat
egies allo
wing this risk to mo
v
e do
wnw
ards ov
er the period.
Risk T
rend and
Links T
o Strategy
Risk
Controls and Mitigations
1
2
3
4
F
ailure to r
espond effectiv
ely or on a timely basis t
o operational
or IT incidents or ev
ents might impact the Group financially
through lost re
v
enue or have a r
eputational impact, based on our
capability and communications.
•
Our business continuity plans are fully document
ed and are
scheduled for continual re
view
, re
vision and testing as r
equired.
•
Our gov
ernance structure supports agile incident r
esponse,
with clear roles, responsibilit
ies and reporting lines.
•
Annual ext
ernal re
view and challenge of our processes
supports our commitment to continuous impr
ov
ement.
•
Ongoing training supports good practice and kno
wledge
sharing f
or continuity
.
•
Internal and e
xternal communications, mark
eting and PR
capabilities are int
egral t
o our incident response plans.
•
Reco
very prioritisat
ion of IT syst
ems and processes forms part
of our business impact analysis r
evie
w.
•
W
e hav
e reco
very time t
argets for both crit
ical and normal
service functions.
•
Critical reco
very capabilities align t
o our appetit
e and controls,
supported b
y appropriat
e insurance co
ver
.
Group Entities and Ext
ended Enterprise
Our Group is comple
x and ext
ensiv
e and includes o
v
ersight of our third-party and e
xtended ent
erprise partners and
suppliers. W
e are committ
ed to ensuring w
e hav
e the right le
vels of tr
ansparency
, consist
ency and monitoring acr
oss
our Group
, to enable e
ffectiv
e o
versight in line with our v
alues and culture.
W
e have an appetit
e for acquisitions as part of our str
at
egic gro
wth agenda. Our int
egration str
ategy continues t
o be
dev
eloped to support ongoing efficient and eff
ective acquisit
ion engagement and management.
Risk T
rend and
Links T
o Strategy
Risk
Controls and Mitigations
1
2
3
4
F
ailure to e
ffectiv
ely monitor activities acr
oss our Group entities,
partners and suppliers, who form part of our e
xtended ent
erprise,
may result in financial, r
eputational or legal compliance issues.
•
T
ranspar
ency across our Gr
oup and extended ent
erprise
and its changes is an ongoing priority
. It is subject to regular
re
view and discussion and forms part of our risk management
frame
work and r
eporting.
•
Oversight r
oles and responsibilities acr
oss our Group structure
support risk-based funct
ional monitoring and assurance
.
•
W
e maint
ain strength in our supply chain management and
supplier and partner relationships.
•
Risk and controls report
ing across the Group is subject t
o
continuous impro
vement, including self
-assessment processes
for confirmation of compliance with k
ey policies, contr
ols and
other Group requir
ements.
•
Gov
ernance and monitoring ar
e in place for ne
w inv
estments,
acquisitions and opportunities.
•
The Group Internal A
udit team is de
veloping thir
d-line
monitoring t
o support the broader int
ernal controls frame
work
across the Group
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
59
People, T
alent Management and Succession
Our business benefits from str
ength and depth of kno
wledge, t
alent and experience
, which has long been piv
otal t
o its
success. Ret
aining and prot
ecting this t
alent, pro
viding for succession and an ongoing pr
ogramme of attr
acting and
dev
eloping new talent is cor
e t
o our people plans and objectives
.
W
e have made significant pr
ogress in the period in this ar
ea and when new initiativ
es have time t
o embed, w
e expect
to see this risk tr
end decrease
. Ho
w
ev
er
, the current pr
essures on the national labour mark
et thr
oughout the ret
ail
sector has incr
eased our risk o
v
er the period.
Risk T
rend and
Links T
o Strategy
Risk
Controls and Mitigations
1
2
3
4
F
ailure to attr
act, retain or de
v
elop talent across our business and
implement effectiv
e succession planning might impact our ability
to achie
ve business and str
ategic objectiv
es and the efficiency of
our gro
wth transformation.
•
Continued dev
elopment of strong tr
ainee management and
apprenticeships pr
ogrammes supports our future
talent pipeline
.
•
W
e recruit e
xternall
y to fill capability gaps necessary f
or our
gro
wth and transformation.
•
W
e prioritise int
ernal dev
elopment and promotion wher
ev
er
possible and activel
y encourage cross-functional e
xperience.
•
A new ‘
fearless focus
’ appraisal s
ystem has been intr
oduced,
with clear expect
ations for performance
, opportunities for
dev
elopment and broader succession planning.
•
A six pillar People Fr
amew
ork supporting performance and
talent r
ecognition is now in place acr
oss the Group.
•
An internal r
ecruitment mandate operat
es, with impro
v
ements
in onboarding and applicant tracking
.
•
W
e hav
e creat
ed core principles and a colleague v
alue
proposition that shar
e the Group
’s values and ambitions f
or
our people, with an ele
vat
ed and re-energised w
ebsit
e to
attract talent
.
•
A new r
ecognition and bonus structure has been launched,
recognising and re
w
arding people who continually adopt our
core principles.
•
The W
orkers
’ Represent
ative is a Boar
d Direct
or, who supports
communication channels and gives our people a v
oice at the
highest lev
el in our business.
•
W
e hav
e a strong strat
egy for div
ersity and inclusion and
people support.
•
W
e hav
e made significant inv
estment into learning and
dev
elopment, supporting internal pr
ogression and o
ver
all
organisational capability
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
60
En
vironment
al
, Social & Go
v
ernance (ESG)
T
ackling climate change is a global imper
ative and the r
esulting incr
ease in regulation is a k
ey f
ocus area f
or
the Group
.
Measures which support climat
e change initiativ
es and our wider ESG agenda continue t
o be ke
y components of our
strat
egic direction, support
ing sustainability
, the broader social agenda and consumer choice
.
Risk T
rend and
Links T
o Strategy
Risk
Controls and Mitigations
1
2
3
4
F
ailure to maximise our position and v
alue relat
ing to ESG fact
ors
might impact our ability to achie
ve our gr
owth, v
alue, r
eputation
and strat
egic ambitions.
•
W
e hav
e Board-le
vel engagement and an Ex
ecutiv
e sponsor
of our ESG agenda.
•
Sustainability continues t
o be embedded throughout the
business and is a continued area of focus f
or the Group
.
•
Dedicated oper
ational leadership continues to driv
e project
and programme init
iatives and engagement thr
ough our
supply chain.
•
Appointing our Group Carbon Reduction Manager sho
ws our
commitment to t
ackling climate change
.
•
W
e hav
e ev
aluated our risks and opportunities ar
ound climate
change and our T
CFD disclosures pr
ovide further det
ails
on this.
•
W
e hav
e an environment
al policy in place, which has been
re
view
ed and appro
ved b
y the Board.
•
W
e hav
e energy efficiency t
argets, monit
oring and
measurement, with e
xternal specialist support and league
tables with r
ew
ard mechanisms t
o drive this f
orwar
d.
•
W
e continue t
o launch ranges and products that driv
e
responsible and sust
ainable purchasing decisions.
•
Our community initiativ
es support the provision of v
ouchers t
o
schools and organisations t
o allo
w purchases of
discounted sports
wear
.
•
Revie
w and ongoing dev
elopment of the Group Code o
f
Conduct supports our values and colleague engagement and
includes a standar
dised framew
ork for supplier onboar
ding.
•
W
e are const
antly w
orking with our partner brands and
suppliers to encour
age more sustainable pr
actices.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
61
Property
The ret
ail landscape continues to see significant changes with a high v
olume of retail pr
operties v
acant due to the
high lev
el of retail insolv
encies and ret
ailers mo
ving aw
ay from bricks and mort
ar to e-commer
ce due t
o the shift in
consumer behaviour
, which has further increased due t
o the Co
vid-
19 pandemic.
As a result of the abo
v
e, both the v
alue and v
alue in use of ret
ail pr
operties has declined.
Risk T
rend and
Links T
o Strategy
Risk
Controls and Mitigations
3
4
There is a financial risk to the Gr
oup if our commitment to a
lease or the value of our fr
eehold properties decline
, where high
vacancy r
ates mak
e the area less attractiv
e for our consumers
and drive less f
ootfall to our st
ores.
•
F
or new st
ore leases w
e actively engage and w
ork with our
landlords t
o support rents that are fle
xible and linked t
o
stor
e turnov
er
.
•
W
e aim t
o align rent free pack
ages and capital contributions
from landlords t
o reflect the ele
v
ated st
ore fit outs.
•
As ret
ail units become more affor
dable, w
e look to mo
ve
into mor
e prime locations with more footf
all and consumer
resilience
.
•
W
e are activ
ely re
viewing our lease portf
olio and looking to
renegotiat
e with landlords in relation t
o underperforming st
ores.
•
The freehold estat
e is activ
ely managed b
y the property team
and we will look t
o dispose of sites which ar
e not aligned with
the Group
’s strat
egy or where ther
e is a commercial benefit t
o
the wider Group
.
The Strat
egic Report has been appro
v
ed b
y the Board and signed on its behalf b
y:
Chris W
ootton
Chief Financial Officer
20 Sept
ember 2022
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
62
VIABILIT
Y ST
A
TEMENT
The 2018 UK Corporat
e Go
v
ernance Code requir
es the
Board t
o e
xpress its vie
w of the long-t
erm viability of
the Group and assess the Compan
y’s prospects, capit
al
management and principal risks.
Accor
dingly
, the Board regularl
y carries out thorough
and robust assessments of the risks, including str
ess
test
ing the Group
’s r
esilience to thr
eats to its business
model, strat
egy
, future perf
ormance and liquidity
and the risks identified in the Principal Risks and
Uncertainties sect
ion of this Report, t
ogether with the
steps the Gr
oup has t
aken t
o mitigat
e them. In addition,
the Board r
egularly re
vie
ws the performance and
financing position of the Group and its pr
oject
ed funding
position and requir
ements.
The Group continues t
o face the challenges that the
pandemic, Bre
xit, supply chain issues and changing
consumer behaviour are having on the r
etail industry
.
The Board chose t
o re
view these o
ver a three-
year
period to 27 April 20
25. This period is cov
ered by the
Group
’s combined term loan and re
v
olving credit
facility (
on the assumption the ext
ension is gr
anted).
Management is satisfied that a thr
ee year period is
appropriat
e t
o re
view perf
ormance, as it best r
eflects the
short-
t
erm budgeting and planning process of the Gr
oup,
the longer-t
erm for
ecasting and the expect
ed timescales
for str
ategy implement
ation. The process adopt
ed t
o
prepar
e the model for assessing the viability of the
Group in
v
olved input from a number o
f departments
across the business t
o model a conserv
ativ
e scenario.
The Board has considered all the risks included within
our Principal Risks section as the
y could all have an
impact on performance
. How
ev
er, with r
egards t
o
viability, w
e have focused on those which ar
e the
great
est risk:
Global Macro-economic Conditions,
E
v
ents (Pandemic) or Polit
ical fact
ors
W
e have:
•
re
vie
wed the continuing impact o
f the pandemic
on the Group
’s sales and margin in r
elation to both
stor
e and online re
v
enue; and
•
re
vie
wed the continuing impact on costs due
to Br
e
xit.
Third-party Brand R
elationships, Ke
y
Suppliers and Supply Chain Management
W
e have:
•
test
ed the business model’s r
esilience to changes in
the ret
ail mark
et and responses t
o v
ariability in sales
and margins;
•
tak
en int
o account further consumer shift from
bricks and mortar t
o online;
•
for
ecast the impact of ke
y suppliers going dir
ect
to consumer;
•
re
vie
wed the arr
angements with k
ey suppliers; and
•
for
ecast and modelled increased costs associat
ed
with supply chain issues.
T
reasury, Liquidity and Cr
edit Risks
W
e have:
•
re
vie
wed the Gr
oup facility and its suit
ability for the
Group
’s cash flow cy
cle and liquidity requir
ements;
and
•
re
vie
wed the Gr
oup
’s hedging strat
egy
.
Viability has been assessed b
y performing sensitivity
analysis and str
ess t
esting of the Group
’s FY23 budget
and for
ecast for the viability period prepar
ed b
y
management. This comprised a recent r
evie
w b
y the
Board of a number of scenarios in which the Gr
oup
’s
income stat
ement, balance sheet and cash flo
w
for
ecasts wer
e stress t
est
ed to det
ermine ho
w much
the Group
’s trade w
ould need to be aff
ected in or
der
to br
each the Group
’s cov
enants (being int
erest co
v
er
and net debt to EBITD
A ratios). These scenarios, the
occurrence of which ar
e deemed to be highl
y
remot
e, include
:
Scenario 1:
The Fr
asers Group operat
ions as a whole are impact
ed
b
y a material and une
xpect
ed reduction in demand (
e.g
.
future pandemic), w
e mat
erially fail t
o manage br
and
partner relationships r
esulting in trade being impact
ed
for a period of time (
e.g
. loss of ke
y suppliers) or ther
e
is a significant impact due to the economic do
wnturn
globally due t
o reduced cust
omer confidence resulting in
lo
wer spending
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
63
Assumptions:
•
a further decrease in s
ales of 10%, margin r
emaining
consistent with original budget and dir
ect costs
falling in line with sales
.
Scenario 2:
Our supply chain continues t
o be affect
ed across
the Group b
y the impact of Co
vid-
19 and Brexit,
with logistics costs significantly incr
eased for both
ourselves and our suppliers who pass on the incr
eased
costs impacting our margin or ther
e is a significant
impact due to the economic do
wnturn globally due to
customers being mor
e price sensitiv
e.
Assumptions:
•
the gross mar
gin percent
age reducing b
y a further
2% across the Gr
oup, with other assumptions
remaining consist
ent with the original budget.
Scenario 3:
•
this is a combination of scenarios 1 and 2 abo
v
e and
is seen as the w
orst-case and highl
y unlikel
y
.
This scenario testing indicat
ed that the business could
withstand a sust
ained decline in sales and gr
oss margin
and, through the use of mitigating act
ions, remain within
its financing facilities and co
v
enants.
On 30 No
vember 2021 the Gr
oup re
financed its existing
borro
wings and ent
ered int
o a combined t
erm loan and
re
v
olving credit facility of £9
30.
0m for a period of thr
ee
y
ears, with the possibility to e
xt
end this by a further tw
o
y
ears. This facility increased t
o £940
.
0m as at 24 April
2022 and t
o £980.
0m subsequent to the period end.
The Group has consist
ently creat
ed str
ong operating
cash flo
ws from underlying tr
ading and has an
appropriat
e hedging strat
egy t
o meet currency risks.
There hav
e been no post balance sheet changes
to liquidity
.
The impact on the project
ed cash flow as a r
esult of
the conserv
ative model has been r
e
view
ed, if r
equired
management has a number of mitigating actions which
could be tak
en such as putting on hold discr
etionary
spend, liquidating cert
ain assets on the balance sheet, or
reductions in labour and mark
eting costs.
Based on its assessment, the Board has a r
easonable
expect
ation that the Gr
oup will be able to continue
operating and be able t
o meet its liabilities as the
y fall
due for a period of appr
o
ximatel
y three y
ears.
The Viability Stat
ement w
as appr
ov
ed b
y the Boar
d on
20 September 20
22, and signed on its behalf by:
Chris W
ootton
Chief Financial Officer
20 Sept
ember 2022
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
64
GO
VERNANCE
CORPORA
TE GO
VERNANCE
REPOR
T
Chair’s Introduction
As Chair
, my primary r
ole is to ensur
e that the Board
effectiv
ely sets and implements the Company’s dir
ection
and strat
egy
. I am responsible f
or leading the Board
to mak
e decisions that will benefit the Gr
oup and
ultimat
ely its stak
eholders. My r
ole is to ensur
e that w
e
adhere t
o high st
andards of corpor
ate go
v
ernance that
will facilit
ate the cont
inued sustainability of the Gr
oup.
Our Non-Ex
ecutiv
e Direct
ors hav
e a great depth
of experience
, remain independent thr
oughout all
discussions and are rigor
ous in challenging the
Ex
ecutiv
es in the best inter
ests of the Group
. Our
Ex
ecutiv
e Direct
ors underst
and the Group
’s v
alues and
behaviours. They w
ork tirelessly t
o ret
ain and gro
w
shareholder v
alue, engage our w
orkforce and promot
e
the Group
’s strategy
.
The Board and the Committ
ees continue to w
ork
effectiv
ely and collaborativ
ely t
o ensure the decisions
being made driv
e the Group forw
ard. I would lik
e to
thank Board members f
or their commitment
and diligence.
W
e have continued our e
fforts t
o work on impr
o
ving our
envir
onmental impact and sust
ainability as w
ell as the
differ
ence we mak
e in the communities w
e serv
e. F
urther
details ar
e included in our ESG report at page 33
.
The Board and Audit Committ
ee hav
e w
orked with
the sustainability t
eam as w
ell as e
xternal advisors in
relation t
o T
CFD reporting. The Board and Committ
ee
’s
hav
e also work
ed with the Gr
oup to set str
etching
but achiev
able t
argets f
or the Group during the FY23
financial y
ear
. The T
CFD report is at page 40
.
W
e have also continued t
o strengthen our go
vernance
as part of our ongoing Elev
ation strategy
. Further
information r
egarding our compliance with the Code
can be found in our Corpor
ate Go
v
ernance St
atement
at page 65.
David Daly
Non-Ex
ecutiv
e Chair of the Board
20 Sept
ember 2022
CORPORA
TE GO
VERNANCE
ST
A
TEMENT
This Corporat
e Go
vernance R
eport and Stat
ement sets
out ho
w the Company has applied the principles in the
2018 UK Corporat
e Go
v
ernance Code during its financial
period ended 24 April 2022. A cop
y of the Code is
av
ailable at www
.fr
c.or
g.
uk.
Disclosures in r
elation to D
TR 7
.2.6 (share capit
al) and
D
TR 7
.2.8 (div
ersity) are set out in the Dir
ect
ors’ Report
on page 95 and in the Nomination Committ
ee Report
on page 75.
The Board considers that it complied with the majority of
the principles and pro
visions of the 2018 UK Corpor
ate
Go
vernance Code f
or the period ended 24 April 2022.
One area in which the Boar
d w
as not fully compliant
w
as Code Pro
vision 36 which r
equires that remuner
ation
schemes should promot
e long-t
erm shar
eholdings
b
y Ex
ecutiv
e Direct
ors that support alignment with
long-t
erm shareholder int
er
ests and that share aw
ards
grant
ed for this purpose should be r
eleased for sale on
a phased basis and be subject to a t
ot
al v
esting and
holding period of fiv
e years or mor
e. The Ex
ecutive
Share Scheme appr
ov
ed by 86.
6
% of shareholders’
v
oting at the 2021 A
GM has a tot
al fiv
e-y
ear v
esting
period as suggested b
y the Code but could permit 50%
of share aw
ards to v
est aft
er four y
ears if our stret
ching
share price t
argets (
a minimum £12 or £15 as rele
v
ant
maintained f
or 30 dealing days) ar
e attained within 4
y
ears of the commencement of the plan.
Board Leadership and Compan
y Purpose
The Board
Board changes during the y
ear w
ere minimal
, with one
direct
or resignation due t
o a conflict of int
erest
. Despite
this, the Board r
emains stable and w
ell r
esourced. W
e
are r
evie
wing the Board’s siz
e
, composition and skillset
on a regular basis t
o ensure that it continues t
o be fit
for purpose and addr
ess areas wher
e we can mak
e the
most effectiv
e changes.
Business Model
Information on the Gr
oup
’s business model and strat
egy
can be found in the Str
ategic R
eport on pages 12 to 16.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
65
Culture
During the y
ear the Board, and the Remuner
ation
Committee in particular
, met regularly with the Group
Head of People t
o assess and monitor the cultur
e of the
Group
, especially as seen from outside the Gr
oup. This
led to a social media str
at
egy to r
aise the reput
ation and
profile of the Gr
oup t
o bring in potential futur
e talent
.
The Group has also de
veloped a ne
wslett
er t
o pro
vide
more r
egular and consistent mess
aging to colleagues
.
F
urther information on the Gr
oup
’s culture can be f
ound
on page 33.
Stak
eholder Engagement
Like most companies, the Gr
oup has t
o balance
the needs of multiple st
akeholders. St
ak
eholder
engagement is integr
al t
o the gro
wth and sustainability
of the Group
. W
e aim to ensur
e that we captur
e the
view
s of as many st
ak
eholders as possible. Whilst w
e
try to accept commendat
ion where appropriat
e and
address criticisms when necess
ary, w
e are mindful that
this may not alw
ays be possible
. W
e recognise that the
most important object
ive in our appr
oach to st
ak
eholder
engagement is to balance st
ak
eholder view
s against
other competing fact
ors and accept that it may not
alw
ays be possible t
o achiev
e a satisfact
ory outcome f
or
all stak
eholders. During the y
ear
, the Board has made
decisions based on the Board papers, pr
esentations
from senior e
x
ecutiv
es and discussions with and reports
from e
xt
ernal consultants. The principal decisions in
relation each of st
ak
eholders is contained in the s
.
172
stat
ement on page 48.
Emplo
y
ees
Please see the Direct
or’s report f
or details of emplo
yee
engagement.
Shareholders
The A
GM pro
vides shareholders with an av
enue t
o hav
e
direct access t
o the Board and senior leadership
. The
Group r
esumed phy
sical A
GMs in FY21 but also offer
ed
shareholders the ability t
o submit questions prior t
o
the meeting.
Comments from our shar
eholders are passed t
o the
Board and r
elev
ant committ
ees for considerat
ion and
analysis
. The Executiv
e Directors ar
e also av
ailable
for questions at all our r
esult present
ations and
shareholders
’ opinions are closely monit
ored thr
ough
analyst and br
ok
er correspondence
. Our larger
shareholders also hav
e r
egular engagement with senior
ex
ecutives and a number hav
e visit
ed our Shirebr
ook site
during the financial y
ear
. Shareholders also hav
e access
to other k
e
y repr
esentat
ives of the Gr
oup, b
y using the
inv
est
or relations cont
act on the Group
’s websit
e.
Customers
The Group continues in its eff
ort to pr
o
vide an elev
at
ed
customer e
xperience
. Our efforts aim t
o act upon and
impro
v
e cust
omer feedback. Cust
omers now hav
e the
ability to r
each out t
o us through numer
ous channels
and w
e have st
art
ed the roll out of self
-service options
in selected f
ascias. There hav
e also been impr
ov
ements
to the online help centr
e t
o encourage first
-time
resolutions f
or the customers who mak
e cont
act and w
e
hav
e adopted a fle
xible-w
orking approach t
o address
customer demand during peak t
imes.
The Group has inv
ested in an Operational Ex
cellence
progr
amme which is focused on supporting, de
v
eloping
and empo
wering the Cust
omer Service t
eams to
pro
vide them with the right t
ools to meet the highest
standar
ds of cust
omer service and satisfaction. W
e
hav
e also inv
est
ed in increasing our Cust
omer Service
capacity b
y establishing an inhouse cont
act centre in
one of the o
verseas t
errit
ories in which w
e operat
e. The
Group has also made significant in
v
estments in our
digital capabilit
ies and approach t
o customer service
management which w
e are confident will yield impr
ov
ed
results f
or FY23.
The acquisition of Studio Ret
ail Group
, which had a very
strong consumer cr
edit team, has also ensur
ed that w
e
can accelerat
e our proposition o
f offering our cust
omers
more fle
xible payment options, b
y utilising this e
xpertise
for the r
est of the Group
.
Suppliers
W
e aim to engage with suppliers who hav
e compatible
v
alues to those of the Gr
oup and who pro
vide v
alue for
money and high-quality goods and services
. The Group
prides itself on fost
ering long-t
erm relationships with
our ke
y br
and partners to ensur
e ongoing continuity
of supplies to our cust
omers. This includes, wher
e
appropriat
e, making str
ategic in
v
estments in brand
partners such as Mulberry and Hugo Boss.
Our o
wn-brand products cont
inue to be pr
oduced and
supplied b
y our tw
o gate
w
ay suppliers with whom w
e
hav
e a longstanding r
elationship.
W
e are currentl
y undertaking a r
evie
w of our
procur
ement process and policies, t
o assess our suppliers
to ensur
e that w
e can meet our ESG commitments and
achiev
e our TCFD t
ar
gets. Further in
formation can be
found in our ESG r
eport.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
66
Regulat
ors
The Group mak
es ev
ery endeav
our t
o comply with its
legislativ
e and regulat
ory obligations. W
e regularly
liaise with HMRC
, the FRC and the F
CA in an open and
transpar
ent manner
. The Finance t
eam and the Board
hav
e established r
egular communications with tax
authorities int
ernationally
. Our int
ernal tax t
eam has a
dedicated cont
act at HMR
C and w
e have dedicat
ed
contacts at other Go
v
ernment bodies, such as
T
rading Standar
ds.
Lenders
Alongside attending all Boar
d meetings, the CF
O is
alw
ays av
ailable t
o inform the Board of an
y updat
es in
relation t
o financial lenders. W
ith the assist
ance of the
Finance t
eam, the CF
O ensures that the Gr
oup complies
with the terms and condit
ions in its credit facility
agreements. The CF
O regularl
y liaises with the Chair of
the Remunerat
ion Committee and the Chair of the A
udit
Committee
, t
o discuss the Group
’s financial perf
ormance.
Updates on the Gr
oup
’s financial performance ar
e
pro
vided at e
very Boar
d meeting.
During the y
ear, the Gr
oup ent
ered int
o a new t
erm loan
and re
v
olving credit facility that is v
alid for thr
ee y
ears
at a v
alue of £930 million with the option t
o increase
the v
alue up to £1.2 billion. As at the dat
e of the release
of this Annual report the Gr
oup facility w
as at a v
alue of
£980m. This replaces the pre
vious £913m facility
.
Community
Details of our engagement with the community can be
found in our ESG r
eport on page 33.
W
orkforce Concerns
Cally Price remains the v
oice of work
ers on the Board
and pro
vides a direct link with the w
orkforce and Board.
She regularl
y pro
vides the Board with an updat
e on the
w
orkforce and brings an
y pertinent issues t
o
their attention.
The workf
orce is able t
o raise aw
areness of any issue
they f
ace b
y speaking with their line managers or HR.
They can also send an e-mail t
o the whistleblo
wing
inbo
x if they hav
e concerns around wrongdoing or
they can r
eport issues anon
ymously through the ‘Y
our
Company
, Y
our V
oice’ hotline
, which is monitor
ed b
y
Cally Price
. There is also an anonymous whistleblo
wing
e-mail address t
o v
oice concerns, which the Company
Secret
ary has access t
o and is responsible for monit
oring.
Whistleblo
wing is an agenda item at each Boar
d
meeting so that any concerns can be r
aised t
o the
Board. In addition, the Chair has r
egular meetings with
the Company Secr
et
ary on an informal basis, where an
y
whistleblo
wing reports can be discussed.
Colleagues also hav
e access to confident
ial wellbeing
advice and support through the R
etail T
rust.
Direct
or Concerns
During the y
ear, no concerns w
ere raised b
y the Board,
or any curr
ent or former dir
ectors, r
egarding the
operation of the Boar
d or the management of
the Group
.
Conflicts of Inter
est
Details of pr
ocedures r
egarding Dir
ectors
’ conflicts of
inter
est, including the Relationship Agr
eement with Mik
e
Ashley as the contr
olling shareholder
, can be found in
the Direct
ors’ R
eport.
Anouska K
apour w
as appoint
ed to the Boar
d in
September 20
21, but subsequently took the decision
to r
esign from the Boar
d in December 2021 due t
o a
conflict of int
erest. No further conflicts fr
om other Board
members became apparent thr
oughout the year
.
The Board considered whether N
icola Fr
ampton
’s
appointment as Chief Operat
ions Officer of Domino
’s
Pizza Gr
oup creat
ed a conflict of int
erest. It w
as
unanimously agreed that as Domino
’s operat
es in a
separat
e sect
or to the Gr
oup, that this w
as not a conflict.
Nicola continues t
o be able to dedicat
e enough time t
o
her role as a Non-Ex
ecutive Direct
or
, as sho
wn b
y her
Board and Committ
ee attendance thr
oughout the y
ear
.
Corporat
e Go
vernance F
rame
work
The Group has continued with the ele
v
ation of its
corporat
e go
vernance fr
ame
work. The Gr
oup has
re-dr
afted and published numer
ous policies including
our Whistleblo
wing and Anti-Bribery & Corruption
policies to str
engthen our current int
ernal contr
ols. This
w
ork will continue into the ne
xt financial y
ear
. The
Internal A
udit team has dr
aft
ed an audit timetable
for the FY23 financial y
ear, re
vie
wing v
arious different
departments to ensur
e int
ernal controls ar
e appropriat
e.
Division of Responsibilities
The Chair
The Chair leads the Board, ensuring constructiv
e
communications betw
een Board members and that
all Direct
ors are able t
o play a full part in the Boar
d’s
activities. The Chair sets Board agendas and ensur
es
that Board meetings ar
e effectiv
e and that all Directors
receiv
e accur
ate
, timely and clear information.
The Chair communicates with shar
eholders effectiv
ely
and ensures that the Boar
d understands the vie
ws of
major inv
est
ors. The Chair also pro
vides advice and
support to both the Ex
ecutive and Non-e
x
ecutiv
e
Board members. The Chair continues t
o meet the
independence criteria set out in pr
o
vision 10 of the
Corporat
e Go
v
ernance Code.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
67
The Chief Ex
ecutiv
e
The Chief Ex
ecutiv
e pro
vides leadership t
o the senior
leadership team in the day
-t
o-day management of the
Group
, with an emphasis on long-t
erm goals, gro
wth,
profit, and r
eturn on inv
estment. He is instrument
al in
formulating and implementing the Gr
oup
’s strat
egy
.
He is the main point of contact betw
een the senior
leadership team and the Boar
d and facilit
at
es effectiv
e
communication and flo
w of information with the
Non-Ex
ecutiv
e Direct
ors. Michael Murr
ay became Chief
Ex
ecutiv
e on 1 May 2022. Mik
e Ashley and M
ichael
Murray w
ork
ed together f
or a number of months, t
o
ensure a smooth tr
ansition into the r
ole.
The Senior Independent Direct
or
Richard Bott
omley
, OBE, is the Senior Independent
Non-ex
ecutive Dir
ector
. He works closel
y with the
Chair and pro
vides support t
o both him and the other
Non-Ex
ecutiv
e Direct
ors. He is also an alt
ernativ
e point
of contact f
or shareholders and is able t
o assist when
necessary if the
y hav
e concerns. He is also responsible
for ensuring that the annual appr
aisal of the Chair’s
performance is complet
ed and is supported b
y the
other Non-Ex
ecutiv
e Direct
ors in this respect and f
or
o
verseeing the succession planning f
or the role of the
Chair
. Richard is also chair of the Audit C
ommittee and
has regular cont
act with the int
ernal finance team and
the ext
ernal audit
or
.
Role of the Non-Ex
ecutive Direct
ors
The Non-Ex
ecutiv
e Direct
ors have e
xt
ensiv
e experience
from a wide r
ange of sectors
. Their role is t
o understand
the Group in its entir
ety
, to constructiv
ely challenge
strat
egy and management performance
, set ex
ecutive
remuner
ation and ensure appr
opriate succession
planning is in place. The Non-Ex
ecutiv
e Dir
ectors
must also ensure the
y are s
atisfied with the accuracy
of financial information and that e
ffectiv
e risk
management and internal contr
ol processes ar
e in place.
Independence
There are curr
ently thr
ee independent Non-Ex
ecutiv
e
Direct
ors, as w
ell as a Non-ex
ecutive Chair of the Boar
d,
a Non-ex
ecutive W
orkforce Direct
or
, and three Ex
ecutive
Direct
ors, with the appointment of Michael Murr
ay
as CE
O on 1 May 2022. All Non-Ex
ecutiv
e Direct
ors,
other than the Non-ex
ecutive W
orkforce Direct
or
,
w
ere consider
ed independent upon appointment. The
Non-ex
ecutive W
orkforce Direct
or is not considered t
o
be independent as she is emplo
yed b
y the Group.
Delegation of Responsibilities
The Board has three sub-committ
ees, namely the A
udit
Committee
, Remuner
ation Committee and Nomination
Committee
. The Committees ar
e go
verned b
y their
T
erms of Refer
ence, which pr
o
vide details of matt
ers
delegated t
o them. The T
erms of Ref
erence ar
e available
on the Group
’s websit
e at frasers.gr
oup
/financials
/
corporat
e-go
vernance and ar
e re
vie
w
ed annually t
o
ensure the
y remain fit f
or purpose. The r
oles of the
Chairman, Chief Ex
ecutiv
e and Senior Independent
Direct
or are clearl
y defined and set out in writing.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
68
Remuner
ation
Committee
Remunerat
ion
policy
Remunerat
ion
schemes
Service contracts
for senior e
x
ecutiv
es
Ke
y Board
Responsibilities
Appro
ving budgets
Setting the Group
’s values and st
andards
Appro
ving strat
egic aims and objectiv
es
Appro
ving acquisitions and disposals
Appro
ving the appointment or remo
val of
Board members
Appro
ving for
eign ex
change and commodities
trans
actions abov
e a material lev
el
Audit
Committee
External audit
Financial r
eporting
Internal audit
Risk management
Compliance
and fraud
Nomination Committ
ee
Composition of the Board
Succession planning
Matters r
eserv
ed for the Board
There is a formal schedule of matt
ers that requir
e
Board appr
ov
al before an
y action is tak
en by the senior
leadership team. The matt
ers reserv
ed for the Boar
d
could hav
e significant strat
egic, financial or reput
ational
impact on the Group so ar
e subject to e
xtra scrut
iny
. T
he
schedule of matters is r
evie
w
ed annually and updat
ed
b
y the Board when necessary
.
Board and Committ
ee Performance
Board, Committ
ee and individual direct
or performance
are e
v
aluated annuall
y in line with the requir
ements
of the Corporat
e Go
v
ernance Code 2018. The
Non-Ex
ecutiv
e Direct
ors, led b
y Richard Bott
omley
,
re
vie
w the performance of the Chair
, t
aking into
account the view
s of Ex
ecutiv
e Direct
ors. The outcome
of the re
vie
w is relay
ed t
o the Chair, with construct
ive
comments to impr
o
v
e his future performance
.
During the period, the Chair re
vie
wed the perf
ormance
of all Non-Ex
ecutiv
e Direct
ors, t
o ensure their
performance r
emains effectiv
e and that the
y are
committed t
o and capable of performing the r
ole. The
Chair has discussed with each Non-Ex
ecutiv
e Direct
or
ho
w they can impr
ov
e their knowledge, behaviour and
skills, in order t
o be better equipped f
or the role
. A skills
matrix is in the process of being pr
oduced to allo
w
objectiv
e analysis of wher
e Board perf
ormance can be
impro
v
ed. It will also be used as a t
ool in our succession
planning when recruiting ne
w direct
ors. The Boar
d
and Nomination Committee had numer
ous meetings
throughout the y
ear t
o discuss the appointment of
Michael Murray as CE
O. These meetings r
evie
w
ed his
performance during his pr
operty consulting role and as
Head of Elev
ation and identified the skills that he could
bring to the Boar
d.
There w
as a thorough independent e
xt
ernal ev
aluation
of the Board and its committ
ees in FY21. The
performance of the boar
d and its committees hav
e
been discussed in the individual Board appr
aisals t
aking
into account the r
ecommendations and comments
arising from the r
evie
w in FY21.
F
ollo
wing the appointment of the new CE
O in May
2022, the Board is int
ending t
o consider again the
recommendations of the e
xt
ernal re
view and see
whether there ar
e any further st
eps t
o tak
e
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
69
In addition t
o the ev
aluation of the Non-Ex
ecutiv
e
Direct
ors, the performance of the Ex
ecutive Dir
ectors
w
as also re
view
ed by the Chair and performance
objectiv
es set. During the period, the Chair held informal
meetings with the Non-Ex
ecutiv
e Direct
ors without the
Ex
ecutiv
e Direct
ors present
.
Direct
or Commitment
Prior to accept
ing Board positions, pr
ospective
Direct
ors are inf
ormed that follo
wing induction, the
y
are r
equired t
o dedicat
e between 15 and 20 day
s per
annum to fulfil the r
ole of a Non-e
x
ecutiv
e Direct
or
.
Non-Ex
ecutiv
e Direct
ors are aw
are that scheduled and
unscheduled meetings may t
ake place
, as w
ell as other
ev
ents including site visits, shareholder meetings and
strat
egy meetings. The time commitment specified in
Non-Ex
ecutiv
e Direct
ors’ lett
ers of appointment has
been re
vie
wed b
y the Nomination Committee and is
considered appr
opriate
. Regular tr
aining is offer
ed to all
Direct
ors and this is further considered during
Direct
or e
valuations
.
The Direct
ors are e
xpected t
o att
end all scheduled
Board meetings and ar
e asked t
o use best endeav
ours
to att
end unscheduled meetings. T
o assist with
managing their commitments, the Non-Ex
ecutiv
e
Direct
ors are giv
en prospective annual Boar
d calendars
early in the second half of the pr
eceding year
. During
the y
ear, ther
e w
ere six scheduled and six unscheduled
Board meetings.
Appointment Document
ation
Details of Ex
ecutive Dir
ectors
’ service contracts,
and of the Chair’s and the Non-Ex
ecutiv
e Direct
ors’
appointment letters, ar
e giv
en on page 81.
Copies of service contracts and appointment lett
ers are
av
ailable for inspection at the Compan
y’s regist
ered
office during normal business hours and at the Annual
General Meeting
. None of the Ex
ecutiv
e Direct
ors hold a
direct
orship of another FTSE 350 compan
y
.
Meeting Document
ation
A detailed agenda is est
ablished for each scheduled
meeting and appropriat
e document
ation is pro
vided t
o
Direct
ors in adv
ance. R
egular Board meeting agenda
items include r
eports from the Chie
f Financial Officer
,
reports on the perf
ormance of the business and current
trading, and specific pr
oposals wher
e the Board’s
appro
v
al is sought. The Board monit
ors and questions
performance and r
evie
ws anticipat
ed results. The Boar
d
also receiv
es r
eports from the Non-Ex
ecutiv
e W
orkforce
Direct
or
, who attends all Boar
d meetings.
During Board meetings, pr
esentat
ions are made on
business or strat
egic issues where appr
opriat
e, where the
Board considers the Gr
oup
’s strat
egy at least annually
.
Minut
es of Committee meetings ar
e circulat
ed t
o all
Board members f
or agreement.
Copies of analy
sts’ reports and br
ok
ers’ not
es are
also pro
vided t
o Direct
ors. The Board also r
eceiv
es
present
ations from industry e
xperts when necessary
.
Board Meeting A
ttendance
The Board has a formal schedule of r
egular meetings
that is agreed and cir
culated in adv
ance
. Scheduled
meetings are used t
o appro
ve st
andard regulat
ory
matters and mak
e significant decisions and also pro
vides
an opportunity for the Boar
d to e
x
ercise its e
xpertise t
o
advise and influence the business. The Board has the
capacity to meet on other occasions if decisions need t
o
be tak
en outside the scheduled meetings.
The Direct
ors’ att
endance at Board and Committ
ee
meetings during the y
ear
, and the tot
al number of
meetings that the
y could have att
ended, are set out in
the table belo
w
. Attendance w
as high for all Dir
ectors,
who attended all meetings unless pr
ev
ented from doing
so b
y a prior commitment. There w
as an ongoing need
for unscheduled meetings during the y
ear
, t
o discuss
numerous decisions and matt
ers outside the scheduled
Board meetings.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
70
Board Meetings
Scheduled
Board Meetings
Unscheduled
Audit Committee
Meetings
Remuneration
Committee Meetings
Nomination
Committee Meetings
Mik
e Ashley
6/6
6/9
David Brayshaw
6/6
8/9
5/5
4/4
3/3
David Daly
6/6
9/
9
5/5*
4
/4
3/3
Nicola Fr
ampton
5/6
9/
9
3/5
4
/4
3/3*
Richard Bottomle
y
6/6
8/9
5/5
1
/4
*
3/3
Cally Price
6/6
8/9
1
/4
*
1/
3*
Chris W
oot
t
on
6/6
9/
9
5/5*
1
/4
*
Anouska K
apur**
2/6
(attended 2/2 meet
ings
during her tenur
e)
0/9
(attended 0/1 meet
ings
during her tenur
e)
* Not a committee member but attended meeting
.
** No longer a member of the Board.
Company Secr
etarial Support
All Direct
ors hav
e access to the advice and services of
the Company Secr
et
ary and may tak
e independent
prof
essional advice at the Company’s e
xpense, subject
to prior not
ification to the other Non-Ex
ecutive Dir
ectors
and the Company Secr
et
ary
.
The Company Secr
etary ensur
es that the Compan
y
maintains appr
opriat
e insurance co
v
er in respect of its
Direct
ors and Officers. He also advises the Boar
d on
corporat
e go
vernance matt
ers.
The Group Position and Pr
ospects
The Board t
akes r
esponsibility for the pr
eparation of
the Annual Report and Accounts f
or FY22, and is in
agreement that t
ak
en as a whole, the
y are f
air, balanced
and understandable
. for the Boar
d’s stat
ement on this
matter please r
efer t
o page 92. W
e are confident that
the Annual Report and Accounts pr
o
vide sufficient
detail and that our shar
eholders hav
e been pro
vided
with the necessary inf
ormation on the Group
’s position,
performance
, business model and strat
egy
. F
urther
details on this can be f
ound in the Strat
egic Report on
page 10. Det
ailed information on the financial posit
ion
and performance can also be locat
ed in the Group
Financial St
at
ements located on pages 113 t
o 117
.
As a result of its findings, the Boar
d has adopted a
going concern stat
ement for FY
22, and full details of this
can be found in the Dir
ectors
’ Report at page 95. The
Direct
ors hav
e also assessed the prospects of the Gr
oup
o
ver a thr
ee-y
ear period and the Viability St
at
ement can
be found at page 63
.
Risk Management
The Board’s responsibilit
ies and procedur
es for
managing risk and the supporting sy
stems of
internal contr
ol are set out in the Principal Risks and
Uncertainties sect
ion of the Strat
egic Report. F
urther
information is included in the A
udit Committee R
eport.
Controls in r
espect of financial reporting and the
production of the consolidat
ed financial st
atements
are w
ell est
ablished. Group accounting policies ar
e
consistentl
y applied and re
view and r
econciliation
controls oper
ate e
ffectiv
ely
. Standard r
eporting
packages ar
e used b
y all Group entities t
o ensur
e
consistent and st
andar
d information is av
ailable for the
production of the consolidat
ed financial st
atements
.
The Board has carried out a robust assessment o
f the
Groups
’ emerging and principal risks in the period and
further detail can be f
ound in the Strat
egic Report and
Principal Risk and Uncertainties sect
ion as noted abo
v
e.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
71
THE BO
ARD
David Daly
Non-Ex
ecutiv
e Chair of the Board, Chair of the
Nomination Committee
Appointed:
2 October 20
17
Committees:
Nomination and Remuner
ation
Committees
Pre
vious roles:
David has held a number of positions during a 30-y
ear
internat
ional career with Nik
e, wher
e his primary focus
w
as the business of football. He st
art
ed in a sales r
ole in
1986 later becoming s
ales direct
or for N
ike UK/Ir
eland.
He retir
ed in 2015 as a Senior Direct
or for N
ike
’s Club
and F
ederation business, wher
e he w
as responsible f
or
global merchandising business f
or all of Nik
e
’s leading
football clubs.
Present r
oles:
David is a Non-Ex
ecutiv
e Direct
or of F
ulham
F
ootball Club.
Ke
y skills, e
xperience and contribution:
David has significant kno
wledge of the sporting goods
industry having w
orked at N
ike f
or 30 years
. He has
w
orked in senior r
oles in sales, mark
eting, product
dev
elopment and general management, which has
giv
en him a thorough underst
anding of consumer
trends and behaviour
. He has spent 18 years w
orking
outside the UK and this internat
ional experience
has pro
v
en crucial t
o the Board. David joined the
Group as a Boar
d member in October 20
17
, gaining a
much-needed understanding of the business, be
for
e
being appointed as Chair in Oct
ober 2018. H
is focus has
been on impro
ving best pract
ices, corporat
e gov
ernance,
promoting div
ersity and driving the Ele
v
ation strat
egy
.
He ensures the Boar
d functions effectiv
ely by f
acilitating
an open and productiv
e debat
e and pro
viding
constructiv
e challenge.
Michael Murr
ay
Chief Ex
ecutiv
e Officer
Michael Murray is Chie
f Ex
ecutiv
e of Fr
asers Group; he
will accelerat
e the Group
’s strategy t
o achie
v
e its vision:
‘t
o serve our customers wi
th the W
orld’s best sports, premium
and luxury brands.’
Michael has had a r
elationship with the Group dating
back to 20
15 when his consultancy services (thr
ough MM
Prop Consult
ancy Limit
ed) commenced.
He w
as first task
ed with r
ethinking and implementing
the elev
ation of the Gr
oup
’s national and int
ernational
property portf
olio. As part of that str
ategy
, the Gr
oup
pursued a £1bn inv
estment strat
egy
, rein
vigorating
the Group
’s estat
e, transf
orming customer in-st
or
e
experience
, and repositioning the Gr
oup in the e
yes of
ke
y st
ak
eholders and brands. This w
ork w
as to f
orm the
bedrock of the Gr
oup
’s future Ele
v
ation strat
egy
.
Through the implement
ation of the property Ele
v
ation
strat
egy Michael demonstr
ated a clear vision f
or future
business gro
wth and also the pot
ential for a full scale
re-imagining of the mark
et identity of the Gr
oup. This
encouraged the Gr
oup to complet
ely r
e-ev
aluate its
intended futur
e consumer offering, ultimat
ely leading t
o
the decision of the Group t
o rebr
and from Sports Dir
ect
Internat
ional plc to F
rasers Gr
oup Plc.
Building on the success of the property Ele
v
ation
strat
egy Michael w
as t
asked b
y the Group with using his
vision to pr
o
vide non-property ele
v
ation services to the
Group
, encompassing inv
esting in brands, t
echnology
,
ret
ail envir
onments and 360 digit
al innov
ation. Michael’s
unriv
alled vision, and willingness to shak
e up the industry
,
allo
ws the Group t
o continue its uniquely impr
essiv
e
traject
ory and t
o pioneer the business’s de
velopment
.
Michael has been instrument
al to the gr
o
wth and
continued success of FLANNELS - the multi-cat
egory
ret
ailer that has rein
v
ented luxury r
etail and r
e
vived
in-stor
e e
xperiences across the UK. St
ocking the biggest
names in luxury fashion and beauty
, FLANNELS has
become one of the most ex
citing players in the industry
.
During his time w
orking with the Group
, Michael has
also re
v
olutionised Sports Direct, b
y e
v
olving the product
offering, in
vest
ing in phy
sical stor
e experiences, and
establishing the business
’ identity as the leading sports
destination - championed b
y an all-ne
w aesthetic and
brand mission.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
72
Mik
e
Ashle
y
Direct
or
Appointed:
1982 (founder)
Pre
vious roles:
Mik
e established the business of the Gr
oup on leaving
school in 1982 and w
as the sole owner unt
il the Group
’s
listing in March 200
7
. He was Ex
ecutiv
e Deputy Chair
prior to being appoint
ed Chief Ex
ecutive in Sept
ember
2016 bef
ore handing o
v
er the role t
o Michael Murray on
1 May 2022.
Ke
y skills, e
xperience and contribution:
Mik
e w
as the founder of the Gr
oup and has the
necessary skills for f
ormulating the vision and
commercial str
ategy of the Gr
oup. W
ith ov
er 30 y
ears
in the sports ret
ail business with Sports Direct, he
is inv
aluable t
o the Group
. Mik
e
’s knowledge and
experience in all ar
eas of ret
ailing, buying, w
arehousing
and logistics ensures that he is crucial t
o the eff
ectiv
e
and efficient running of oper
ations. W
ith the continuing
challenges in the macro-economic en
vironment his
decisiv
e leadership has meant the Group has r
emained
resilient and in good health and will be able t
o t
ake
adv
antage of futur
e opportunities.
Chris W
ootton
Chief Financial Officer
Appointed:
12 September 20
19
Pre
vious roles:
Chris w
orked at PwC f
or the early part of his accounting
career in the assur
ance practice
, including w
ork on large
corporat
es and list
ed entities.
Ke
y skills, e
xperience and contribution:
Chris is a Charter
ed Account
ant and has pro
vided k
e
y
support in the transition t
o the ne
w leadership team.
He continues t
o impro
v
e the skills, experience and
capabilities of the Fr
asers Group F
inance t
eam. Chris is
a ke
y driv
er of the Gr
oup
’s accounting principles, namely
being conserv
ative
, consist
ent and simple.
Chris w
as instrumental in negotiat
ing the recent rene
w
al
of the Group
’s combined term loan and re
v
olving credit
facility during the financial y
ear
.
Cally Price
Non-Ex
ecutiv
e W
orkforce Direct
or and W
orkers’
Represent
ativ
e
Appointed:
1 January 2019
Pre
vious roles:
Cally began her car
eer with Sports Direct as a casual
sales assist
ant in our Aberdar
e stor
e in 2007
.
Present r
oles:
Company’s W
orkers’ R
epresent
ativ
e
Ke
y skills, e
xperience and contribution:
Cally has been with the Group f
or o
ver 13 y
ears,
commencing on the shop floor w
orking as a casual
assistant
. Cally continues t
o manage the Cardiff
Sports Direct st
ore giving her a unique insight int
o the
challenges of the ret
ail sect
or from those on the gr
ound.
Richard Bott
omle
y
OBE
Senior Independent Non-Ex
ecutiv
e Direct
or
, Chair of
the Audit Committ
ee
Appointed:
1 Oct
ober 2018
Committees:
A
udit and Nomination Committees
Pre
vious roles:
Richard has o
v
er 25 y
ears’ e
xperience working with list
ed
companies during his time as a senior partner at KPMG,
and continues t
o be a member of the Audit Committ
ee
Institut
e. Until r
ecently Richard w
as a Non-Executiv
e
Direct
or of Ne
w
castle Building Society, wher
e he chaired
the Audit Committ
ee.
Present r
oles:
Richard is a Non-Ex
ecutive Direct
or of MSL Pr
operty
Care Services Lt
d, Marsden Pack
aging Limit
ed and
Jessgr
ov
e Limit
ed.
Ke
y skills, e
xperience and contribution:
Richard has str
ong experience in corpor
ate go
v
ernance,
corporat
e finance and strat
egy
. He has been influential
in the recruitment and appointment of a Head of
Internal A
udit, ensuring that risks are pr
operly assessed
and mitigat
ed.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
73
David Bray
shaw
Independent Non-Ex
ecutiv
e Direct
or
, Chair of the
Remuneration Committ
ee
Appointed:
8 December 2016
Committees:
Audit, Nomination and Remuner
ation
Committees
Pre
vious roles:
David is a v
ery experienced senior in
vestment and
commercial bank
er
. He has ov
er 30 years
’ experience
with organis
ations such as Barclays Capit
al, HSB
C,
Citigroup and Pilkingt
on plc.
Ke
y skills, e
xperience and contribution:
David graduat
ed from Oxf
ord in 1975 with a Mast
er
of Arts in Chemistry
. He has spent a long career in
the field of corporat
e financing for a number of major
financial institutions and w
as also the Group T
reasurer
of Pilkingt
on plc. David spent 15 years of his car
eer at
Barclay
s Capital
, advising FTSE 350 companies on all
aspects of corporat
e, s
yndicat
ed, and capital mark
ets
funding, together with int
er
est rat
e, f
oreign e
x
change
and balance sheet hedging. He has funded countless
public company acquisitions and st
ill remains inv
ol
v
ed
in an advisory role with se
v
eral corpor
ates and banks in
a priv
ate capacity
. He has a prov
en track record in the
finance and acquisitions sect
or, pr
o
viding sound advice
in line with the Group
’s Elev
ation strat
egy
.
Nicola F
rampt
on
Independent Non-Ex
ecutiv
e Direct
or
Appointed:
1 Oct
ober 2018
Committees:
Audit and R
emuneration Committ
ees
Present r
oles:
Nicola has spent the majority of her r
ecent career in
senior ex
ecutive management r
oles and has recently
been appointed t
o a ne
w senior ex
ecutive r
ole with
Domino
’s Pizza Gr
oup, wher
e she is Chief
Operations Officer
.
Pre
vious roles:
Prior to joining Domino
’s Pizza Group
, Nicola w
as the
Managing Direct
or of W
illiam Hill’s UK R
etail division
from April 2010
, w
orking closely with W
illiam Hill’s Boar
d,
Ex
ecutiv
e Committee and oper
ational management.
During her time at W
illiam Hill, N
icola led a number of
successful major inno
vation and tr
ansformation pr
ojects.
Befor
e swit
ching t
o an ex
ecutive management career
,
Nicola spent the pr
evious t
en y
ears working in the
prof
essional services industry, most r
ecently as a Dir
ector
at Deloitte
.
Ke
y skills, e
xperience and contribution:
Nicola has e
xtensiv
e e
xperience in risk management,
assurance and corpor
ate go
v
ernance across a wide
range of industries, having specialised in these ar
eas
of corporat
e activity at both W
illiam Hill and prior t
o
that whilst at Deloitte
. The Board also benefits fr
om
Nicola’s curr
ent and pre
vious ret
ail experience running
large
, non-competing ret
ail businesses. Nicola serv
es
as a T
rustee Boar
d member for a number of charities
and brings an informed perspectiv
e on corpor
ate
responsibility t
o the Board.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
74
NOMINA
TION COMMITTEE REPOR
T
Dear Shareholder
T
o meet the Group
’s needs, the Nomination Committ
ee
must ensure that the Boar
d remains compet
ent, div
erse,
w
ell balanced and equipped to deal with an
y present
or future issues which may arise
. It is also important
that the Nomination Committee both supports and
challenges the decisions of the Ex
ecutiv
e Direct
ors,
which includes re
vie
wing the Group
’s leadership and
making recommendations r
egarding the appointment
of ne
w Direct
ors and ext
ending the t
erm of office of
existing Dir
ect
ors.
Biographical det
ails of each Committ
ee member are
sho
wn in the Board of Dir
ectors
’ profiles on pages 72
t
o
74
.
The Nomination Committee usuall
y meets formally
twice a y
ear, although addit
ional meetings tak
e place
when appropriat
e. The Committ
ee formally met thr
ee
times during FY22, with meetings r
eturning to ph
ysical
meetings follo
wing the end of Co
vid-
19 restrictions.
All members of the Nomination Committ
ee are
Non-Ex
ecutiv
e Direct
ors and, with the ex
ception of the
Chair
, are consider
ed to be independent
.
The Responsibilities of the Nomination
Committee Include
:
•
re
vie
wing the leadership needs of the Group
, looking
at both Direct
ors and senior management;
•
re
vie
wing the composition, structure and siz
e of
the Board, and r
ecommending adjustments to the
Board, having r
egard t
o div
ersity, skills, kno
wledge
and experience;
•
re
vie
wing the time the Non-Ex
ecutiv
e Direct
ors are
requir
ed to spend dischar
ging their duties;
•
identifying and nominating, for the appr
ov
al of the
Board, candidat
es t
o fill Board v
acancies as and
when they arise;
•
considering succession planning for Dir
ectors
and senior management, taking int
o account the
challenges and opportunities facing the Gr
oup and
the skills and expertise ther
ef
ore needed on
the Board;
•
formally documenting the appointment and
re-appointment of Dir
ectors;
•
identifying potential candidat
es f
or senior posts, and
making recommendations t
o the Board; and
•
considering the recommendations t
o shareholders
for r
e-electing the Direct
ors, under the annual
re-election pr
o
visions of the 2018 UK Corporat
e
Go
vernance Code
.
A full list of the Committee
’s responsibilities is set out in
its T
erms of Refer
ence which are av
ailable on the Gr
oup
W
ebsite:
www
.
frasers.gr
oup.
What has the Committee Done During
the Y
ear
?
Board Nominations
•
The Committee consider
ed and recommended t
o
the Board the r
eappointment of Nicola F
rampt
on
and Richard Bott
omley
.
•
The Committee consider
ed and recommended the
election or re-election of all Dir
ect
ors at the A
GM,
follo
wing consideration of their e
ffectiv
eness
and commitment.
Composition of the Board
The Committee has r
evie
w
ed the Board’s composition
and w
e continue to look t
o add t
alented people t
o the
Board, who will bring appr
opriate skills and e
xperience
.
The Committee has begun w
ork on pr
eparing a skills
matrix that will identify ke
y ar
eas in which Board
members hav
e experience in or
der to identify the ar
eas
in which board kno
wledge could be strengthened. This
is being updated t
o t
ake int
o account the skills that
Michael Murray brings t
o the Boar
d. The results will be
used to influence futur
e Board appointments
. The Board
continues t
o have dialogue with e
xt
ernal recruitment
agents, a number of which specialise in recruiting
div
erse candidates.
Annual Performance Appr
aisals
All Board members, both Ex
ecutive and Non-Ex
ecutiv
e,
w
ent through an annual performance r
e
view during
FY22 and each Dir
ector engaged full
y in the process.
This included setting objectives f
or each individual. I
led these apprais
als, as Chair of the Board and the
Nomination Committee
. This process will be r
epeated
annually
. Richar
d Bottomle
y
, Chair of the Audit
Committee and Senior Independent Non-e
x
ecutiv
e
Direct
or
, led my perf
ormance apprais
al and
objectiv
e setting.
The Direct
ors will tak
e int
o account any de
v
elopment
needs identified in their apprais
als and will be
challenged on ho
w they hav
e t
aken action against these
objectiv
es during their next annual appr
aisal.
The results of appr
aisals will be used t
o influence
Board appointments.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
75
Div
ersity and Inclusion
At the period end the Board had tw
o female Direct
ors,
repr
esenting 29% of the Board. Ther
e is currently no
repr
esentation fr
om ethnic minority back
grounds on the
Board. Ho
w
ev
er, the Board is conscious o
f the tar
gets set
b
y the FCA which appl
y for the FY23 financial y
ear and
its reporting r
equirements in r
espect of this.
The Group
’s objectives in relat
ion to Boar
d diversity and
inclusion are:
•
T
o ensure that the Board has an appr
opriat
e mix of
skills, experience and kno
wledge
, to ensur
e a v
ariety
of perspectiv
es are r
epresent
ed on the Board and
enable the Board t
o effect
ivel
y ov
ersee and support
the Group
’s growth and management
.
•
T
o maintain Board r
epresent
ation from the w
orkforce,
which brings the v
oice of colleagues into the
boardr
oom, supports our strat
egy of inv
esting in our
people and enables the Board t
o effect
ivel
y ov
ersee
and support the Group
’s growth and management
.
•
T
o increase female r
epresent
ation and
ethnic minority repr
esentation at both senior
management and Board le
v
el, in line with the F
CA
’s
recommendations
.
The Group achie
ved its Div
ersity policy objective in
respect of gender and age
, b
y having a strong gender
balance in senior management and their direct r
eports,
and a v
aried repr
esentation of ages in middle and senior
management. When r
evie
wing candidates who may
become potent
ial Board members, the Committ
ee has
regar
d to f
actors including pr
ofessional e
xperience, skills,
education, gender
, ethnicity and backgr
ound, t
o ensure
a v
ariety of perspectiv
es are repr
esent
ed at Board
lev
el. As discussed abov
e, w
e have been w
orking with
a recruitment agent specialising in div
erse candidat
es.
The Board is conscious that t
o successfully deliv
er the
strat
egic goals of the business, our people, including the
Board of Dir
ectors must r
eflect the div
erse cultures and
v
alues of our customer base
.
The Committee r
ecognises the advant
ages of having
a div
erse team and has ther
efor
e re
vie
wed the
composition of the senior management t
eam, including
their direct r
eports. A number of senior management
roles w
er
e held by w
omen at period end, including the
Chief Mark
eting Officer
, Head of Sustainability
, Head of
Consumer Credit, Head of PR and Communicat
ions and
the UK Group F
inancial Controller
.
The table belo
w sho
ws the gender div
ersity of our
w
orkforce at the period end. Appr
o
ximat
ely 54
% of
our w
orkforce is f
emale, including 36
% of our senior
management (FY21: 35% UK w
orkforce). W
e aim to
ensure that both male and f
emale candidates ar
e
pro
vided with equal opportunities t
o apply for and w
ork
in all positions across the Gr
oup.
F
emale
Male
Direct
ors
29%
71%
Other senior managers and
direct reports
3
6%
64%
Other employ
ees
55%
45%
W
e wer
e pleased that our most recent Gender Pay Gap
Report sho
w
ed that w
e have maint
ained a 0% gender
pay gap.
F
urther details on div
ersity and inclusion are set out in
the Our People section.
David Daly
Chair of the Nomination Committ
ee
20 Sept
ember 2022
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
76
DIRE
CT
ORS’ REMUNERA
TION
REPOR
T
Dear Shareholder
,
As the Chair of the Remuner
ation Committee (the
Committee), I am pleased t
o pr
esent our Direct
ors’
Remunerat
ion Report for the period ended 2
4 April 2022.
This report is split int
o three parts: this Annual St
at
ement,
a summary of our Direct
ors’ R
emuneration Policy f
or
FY22-FY2
5 and the Annual Report on Remunerat
ion.
As a first item, the R
emuneration Committ
ee wishes
to thank our shar
eholders for the support which the
y
gav
e to the r
esolutions on remuner
ation matters at
our September 20
21 A
GM. Each of the thr
ee A
GM
resolutions, which w
er
e to appr
o
ve our r
e
vised
Direct
ors’ R
emuneration Policy
, t
o appro
v
e our Direct
ors’
Remunerat
ion Report and t
o appro
v
e the establishment
of the Ex
ecutiv
e Share Scheme (‘ESS
’) was appr
o
v
ed by
shareholders at le
v
els of v
oting which indicted str
ong
support from both our full shar
eholder base and also b
y
our independent shareholders who v
ot
ed.
Board Changes
As shareholders will hav
e seen, on 1 May 2022 Michael
Murray became our ne
w Chief Ex
ecutiv
e Officer
. Details
of Michael’s pay arr
angements as our CEO (
and which
are consist
ent with information alr
eady pro
vided t
o
shareholders when this appointment w
as announced
in Summer 2021) are set out in this r
eport. On 1 May
2022, Michael w
as formall
y grant
ed an aw
ard under
the ESS, the t
erms of which had been communicated
to shar
eholders as part of the arrangements f
or the
appro
v
al of the ESS at our Sept
ember 2021 A
GM.
Mik
e Ashley r
emains on our Board as a dir
ector
. Mik
e
receiv
es no compensat
ion for this role and he r
eceiv
ed
no compensation in r
elation to his st
epping do
wn
as Group CE
O
. On 20 Sept
ember 2022 the Group
announced that Mik
e Ashley w
ould not be standing for
re-election as a dir
ector at this y
ear’s Annual General
Meeting (“
AGM”) and that he will ther
efor
e st
ep down
from the Boar
d upon the conclusion of the A
GM.
Actions T
ak
en in FY22 and Impacts on Pay
Notwithstanding the se
v
eral aspects of positiv
e
Company perf
ormance in FY22, the Remuner
ation
Committee has not aw
arded an annual cash bonus for
the y
ear to our CF
O
.
The Committee e
x
ercised what it r
egards as normal
commercial judgement in r
espect of Direct
ors’
remuner
ation throughout the y
ear (and in all cases in
line with the Company’s Dir
ect
ors’ Remuner
ation Policy).
There w
ere no other e
x
ercises o
f judgement or discretion
b
y the Committee s
ave as det
ailed in this r
eport.
Operation of Remuner
ation Policy in FY23
It is the Committee
’s intention t
o operat
e the
Remunerat
ion Policy in FY23 consist
ent with ho
w the
policy w
as operat
ed in FY22.
•
our Ex
ecutiv
e Direct
ors’ s
alaries for FY23 ar
e
unchanged (CE
O: £1,000,
000; CF
O £250
,000);
•
in line with our shareholder appr
ov
ed Directors
’
Remunerat
ion Policy
, our FY23 annual bonus for
our Ex
ecutiv
e Direct
ors will be operat
ed with a
maximum pay-out pot
ential of 200% of base salary;
and
•
there will be no further aw
ar
ds of L
TIPs made
to the Ex
ecutive Dir
ectors in FY
23 (other than
implementation o
f the ESS aw
ards for our CE
O
which w
ere appr
ov
ed at our FY21 A
GM).
F
ormat of the Report and Matt
ers to be Appr
o
ved at
Our 2022 A
GM
At the FY22 A
GM, shareholders will be ask
ed to appr
ov
e
the Direct
ors’ R
emuneration Report f
or FY22. This will be
the normal annual advisory v
ote
.
I hope that our shareholders r
emain supportiv
e of our
approach t
o e
x
ecutive pay at F
rasers and v
ote in fav
our
of the resolutions on r
emuneration matt
ers t
o be tabled
at the FY22 A
GM.
David Brayshaw
Chair of the Remuner
ation Committee
20 Sept
ember 2022
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
77
Direct
ors’ R
emuneration R
eport
This report cont
ains the material r
equired t
o be set out
as the Direct
ors’ R
emuneration Report f
or the purposes
of Part 4 of the Lar
ge and Medium-sized Companies
and Groups (A
ccounts and Reports) (Amendment)
Regulations 2013
, which amended the Large and
Medium-sized C
ompanies and Groups (Accounts and
Reports) Regulations 2008 (the DRR R
egulations).
Direct
ors’ R
emuneration P
olicy
The Direct
ors’ Remuner
ation Policy w
as appro
ved b
y
shareholders at the 29 Sept
ember 2021 A
GM. The full
Remunerat
ion Policy as appro
v
ed b
y shareholders can
be found on pages 52 t
o 57 of the 2021 Annual Report, a
cop
y of which is also av
ailable on the Group
’s corpor
ate
w
ebsite at https:/
/
www
.
frasers.gr
oup. f
or ease of
ref
erence
, w
e have set out belo
w the Future P
olicy T
able
for Ex
ecutiv
e Dir
ectors, as included in the appr
ov
ed
Direct
ors’ R
emuneration Policy
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
78
F
uture P
olicy T
able
The table belo
w describes each of the elements of the r
emuneration pack
age for the Ex
ecutive Direct
ors.
Element of
Remuneration
Purpose /
Link T
o Strategy
Operation
Maximum
Performance Measur
es
Changes T
o
Policy Appro
ved
At The 2021
AG
M
BASE SALAR
Y
Fix
ed element of the
remunerat
ion package,
where the balance of fix
ed
and variable r
emuneration
is aligned to the commer
cial
strat
egy of long-term
profit
able gro
wth and
reflects the Compan
y
remunerat
ion philosophy
of gearing re
war
d to
performance, with a sharing
of risk between Ex
ecutive
Direct
ors and shareholders.
Base salaries are normall
y
re
view
ed annually
.
Mike Ashle
y does not
currently r
eceive a s
alary for
his role
.
Although salaries for
Ex
ecutive Dir
ectors (
other
than Mike Ashle
y
, who
does not currently r
eceive
a salary) are set at le
vels
below the amounts typicall
y
paid by similar-siz
ed
companies, the Committee
ret
ains discretion t
o set
salaries at lev
els considered
appropriat
e for the business,
considering its size and
complexity
.
Not applicable.
No change.
BENEFITS
W
ith the ex
ception of a
20% colleague discount
on products purchased
from the Group
’s retail
stor
es, which is available
to Ex
ecutiv
e Direct
ors
other than Mike Ashle
y
,
no additional benefits
are generall
y available t
o
Ex
ecutive Dir
ectors. The
same lev
el of discount is
available t
o all colleagues.
The current Ex
ecutive
Direct
ors do not receiv
e
any benefits other than the
colleague discount, which
is not available f
or Mike
Ashley
.
Benefits may be pro
vided
in line with market pr
actice
to r
ecruit a new Ex
ecutiv
e
Direct
or taking int
o account
individual circumst
ances.
Such benefits may include
relocation e
xpenses.
Although the Remuneration
Committee has not set an
absolute maximum le
vel of
benefits Ex
ecutive Dir
ectors
may receiv
e, the Compan
y
ret
ains discretion t
o set
benefits at a lev
el which the
Remuneration Committ
ee
considers appropriat
e
against the market and
to support the on-going
strat
egy of the Company
.
Not applicable.
No change.
RETIREMENT
BENEFITS
Pro
vide post-emplo
yment
benefits to r
ecruit and ret
ain
individuals of the calibre
required f
or
the business.
The Executiv
e Direct
ors are
entitled to participat
e in a
stak
eholder pension scheme,
on the same basis as other
employ
ees.
On request, this benefit
may be paid as a salary
supplement in lieu of
pension contribution,
as necessary
.
The current maximum
employ
er contribution t
o the
stak
eholder pension scheme
is 3%.
The Committee may
increase emplo
yer
contribution rat
es to
reflect changes in the
auto enr
olment employ
er
contribution rat
es.
Not applicable.
No change.
ANNUAL
BONUS
Rew
ar
ds the Executiv
e
Direct
ors for performance
which supports the Group
’s
strat
egy and performance
in role
.
Ex
ecutive Dir
ectors, other
than Mike Ashle
y
, may earn
a bonus. Any bonus earned
in ex
cess of 100% of salary
would be de
ferred int
o
shares for a period of tw
o
years, unless the amount
to be def
erred w
ould be
less than £10,
000. The
Committee also r
etains a
discretion not t
o operat
e
deferr
al in an ex
ceptional
case and where salary paid
in the year w
as £250
,000
or less.
Any bonus paid w
ould be
subject to clawback f
or
a period of three y
ears
follo
wing its determination,
in the ev
ent of gross
misconduct, material
misstat
ement of the
Company’s financial
stat
ements or corporat
e
failure
.
The maximum bonus that
an Ex
ecutive Dir
ector may
earn shall be 200% of salary
in respect of an
y
financial year
.
Any bonus opportunity shall
be assessed against one or
more metrics det
ermined
by the Committ
ee and
linked t
o the Company’s
strat
egy and/
or the
performance of the
Ex
ecutive Dir
ectors in role
,
with the weighting betw
een
the metrics determined
by the Committ
ee, if
rele
vant. Bonuses will be
determined betw
een 0%
and 100% of the maximum
opportunity, based on the
Committee
’s assessment of
the applicable metrics.
The annual bonus plan is a
discretionary arr
angement
and the Committee
ret
ains a standard po
w
er
to apply its judgement
to adjust the out
come of
the annual bonus plan for
any performance measur
e
(from z
ero to an
y cap)
should it consider that to be
appropriat
e.
No change.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
79
Element of
Remuneration
Purpose /
Link T
o Strategy
Operation
Maximum
Performance Measur
es
Changes T
o
Policy Appro
ved
At The 2021
AG
M
LONG-
TERM
INCENTIVES
T
o motivat
e and incentivise
delivery of sust
ained
performance o
ver the
long-t
erm, and to promot
e
alignment with shareholders’
inter
ests, the Company
intends t
o operat
e an
Ex
ecutive Shar
e Scheme.
Ex
ecutive Dir
ectors, other
than Mike Ashle
y
, may
receiv
e awar
ds under the
Ex
ecutive Shar
e Scheme.
A
war
ds may be grant
ed
as nominal cost options or
conditional share aw
ards,
which vest t
o the ext
ent the
performance conditions are
satisfied o
ver a period of
four y
ears.
The Committee shall hav
e
discretion t
o reduce the
number of shares subject
to an aw
ard gr
anted under
the Ex
ecutive Shar
e Scheme
by an amount equal t
o
the aggregat
e gross salary
receiv
ed by a participant
during the performance
period.
Clawback and malus
pro
visions apply to aw
ards
grant
ed under the Executiv
e
Share Scheme
. Any
amounts receiv
ed under the
Ex
ecutive Shar
e Scheme
may be subject to clawback
for a period of three y
ears
follo
wing the end of the
performance period, in the
ev
ent of gross misconduct,
material misst
atement of
the Company’s financial
stat
ements, corporat
e failure
or reput
ational damage.
As is normal, the
Committee r
etains po
wer
to settle aw
ards in cash in
ex
ceptional cases only
.
F
or awar
ds with a £15 share
price tar
get, the maximum
opportunity for an Ex
ecutive
Direct
or will be an awar
d
ov
er 6,
711,409 shar
es.
F
or awar
ds with a £12 share
price tar
get, the maximum
opportunity for an Ex
ecutive
Direct
or will be an awar
d
ov
er up to 6
00,000 shar
es.
A
war
ds will vest subject
to an absolut
e share price
tar
get of either £12 or £15.
The share price must be
ov
er the tar
get for an
y
period of 30 consecutive
dealing days during the
four-y
ear performance
period.
The Committee may set
additional performance
conditions on aw
ards under
the Ex
ecutive Shar
e Scheme,
as it considers appropriat
e.
F
or information: there ar
e
two underpins appl
ying
which relat
e to satisf
actory
performance ratings f
or
each participant, and
anticipated deliv
ery of our
Elev
ation strat
egy
.
Introduction of the
Ex
ecutive Shar
e
Scheme, which is
our new long-
term
incentive plan that
will re
war
d our
senior ex
ecutiv
es
for achieving
sustained
performance o
ver
the long term.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
80
Service Contracts and Policy on P
ayments
for Loss of Office
The Company’s policy is f
or Ex
ecutiv
e Direct
ors to be
emplo
yed on the t
erms of service contr
acts which may
be terminat
ed b
y either the Compan
y or the Ex
ecutiv
e
Direct
or on the giving of not more than 12 months
’
notice. All Dir
ect
ors are subject t
o annual re-election.
Ex
ecutive Dir
ect
ors
Details of the curr
ent service contract f
or each Ex
ecutiv
e
Direct
or are set out belo
w:
Contract
Date
Unexpir
ed T
erm
/ Notice Period
Gov
erning
Law
Mik
e Ashley
11/02/2007
12 months*
England &
W
ales
Michael Murray
20/09/20
22
6 months
England &
W
ales
Chris W
oot
t
on
06/03/2017
6 months
England &
W
ales
*The Company may terminat
e Mr Ashley’s service contr
act by giving six months’ notice if
he is unable to perform his duties f
or ov
er 120 days in any consecutiv
e 12 months.
Non-Ex
ecutive Dir
ect
ors
The Non-Ex
ecutiv
e Direct
ors enter int
o an agreement
with the Group f
or a period of three y
ears, other than
the Chair whose agreement continues until t
erminat
ed
in accordance with its t
erms. The appointments of
the Non-Ex
ecutiv
e Direct
ors may be t
erminated
b
y either party on one month
’s written notice and
in accordance with the Articles of Association o
f
the Company
. T
ermination would be immediat
e in
certain cir
cumst
ances (including the bankruptcy of the
Non-ex
ecutive Dir
ector).
Non-Ex
ecutiv
e Direct
ors (other than the Non-e
x
ecutiv
e
W
orkforce Dir
ector) do not and ar
e not entitled
to part
icipate in an
y bonus or share scheme
. The
Non-ex
ecutive W
orkforce Direct
or is entitled t
o
participat
e in employ
ee bonus and shar
e schemes for
emplo
yees, including all-emplo
yee schemes.
The approach t
o determining Non-Ex
ecutive Dir
ectors
’
pay is to benchmark ourselv
es against other companies/
ret
ailers within the FTSE 250 with r
emuneration
ultimat
ely a Board r
esponsibility
.
Non-Ex
ecutiv
e Direct
ors are subject t
o confidentiality
undertakings without limit
ation in time
. Non-Ex
ecutiv
e
Direct
ors are not entitled t
o r
eceive an
y compensat
ion
on the terminat
ion of their appointment.
Details of the Non-Ex
ecutive Dir
ectors
’ letters of
appointment are set out belo
w:
Position
Date of Lett
er
of Appointment
End Date of
Appointment
David Daly
Non-ex
ecutiv
e
Chair of the
Board
16 July 2020
1 October 2023
David Brayshaw
Non-ex
ecutiv
e
Direct
or
23 April 2020
7 December
2022
Nicola
Frampt
on
Non-ex
ecutiv
e
Direct
or
1 October 2018
30 September
20
24
1
Richard
Bottomle
y
Non-ex
ecutiv
e
Direct
or
1 October 2018
30 September
20
24
1
Cally Price
Non-ex
ecutiv
e
W
orkfor
ce
Direct
or
6 October 2020
5 October 2022
(1)
The original three year t
erms of appointment for Nicola F
rampton and Richard
Bottomle
y have been ext
ended for a further three y
ears, subject to continuing
annual re-election at the A
GM.
Copies of the service contracts of Ex
ecutive Dir
ectors
and of the appointment letters of the Chair and
Non-Ex
ecutiv
e Direct
ors are av
ailable for inspect
ion at
the Company’s r
egist
ered office during normal business
hours and at the A
GM.
Engagement with Shareholders
The Committee consults major shar
eholders and
repr
esentativ
e groups where appr
opriate concerning
remuner
ation matters. Gener
al repr
esent
ations have
been receiv
ed fr
om inv
estors r
egarding o
v
erall FTSE
remuner
ation. The Committee has due r
egard t
o the
Inv
estment Association principles, and is alw
ays happ
y
to r
eceiv
e feedback fr
om shareholders. There hav
e been
no changes to the R
emuneration Policy or out
comes as
a result of shar
eholder engagement.
Colleague Re
w
ard
It is w
orth reminding shar
eholders that our UK
colleagues (e
x
cluding the Ex
ecutiv
e Direct
ors) who
hav
e participated in our shar
e schemes hav
e receiv
ed,
subsequent to an
y IPO bonus payments, a t
otal v
alue of
£250m (FY21: £25
0m) of aw
ards since their intr
oduction.
In addition t
o share schemes, the Compan
y operat
es
other bonus and incentiv
e aw
ards for its w
orkforce. B
y
w
ay of recent e
x
ample, in FY22 the Gr
oup paid aw
ards
and incentiv
es of appro
ximately £15.
0m (FY21: £5.
4m). A
significant proportion of these other bonus and incentiv
e
aw
ards w
as paid t
o our casual ret
ail w
orkers
.
During FY21, the Compan
y launched the Fr
asers
All-Emplo
yee Omnibus Plan (kno
wn as ‘F
earless 1000’)
follo
wing appro
v
al b
y shareholders at the 2020 A
GM.
The F
earless 1000 plan is available t
o all eligible and
qualifying Fr
aser Group emplo
y
ees (e
x
cept for the Chie
f
Ex
ecutiv
e, Chief F
inancial Officer
, Chief Commer
cial
Officer and Chief Operat
ing Officer) and is intended t
o
pro
vide a significant one-off r
ew
ar
d for emplo
y
ees if a
stret
ching share price gr
o
wth tar
get is achiev
ed within a
fiv
e year period measur
ed t
o October 2025
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
81
There are tw
o related but distinct parts t
o the F
earless
1000 plan as follo
ws:
•
share aw
ar
ds to those 1,
000 eligible and qualifying
emplo
yees in the business who most demonstr
at
e
outstanding service and perf
ormance consistent
with the Company’s v
alues; and
•
cash bonuses to eligible and qualifying emplo
y
ees
in the Company’s Gr
oup, t
o r
ew
ar
d them for their
lo
yalty and har
d w
ork.
A similar incentiv
e plan is also available f
or our
non-emplo
yee Gr
oup w
orkers
.
The Remuneration Committ
ee remains committ
ed t
o
transpar
ent and simple remuner
ation for Ex
ecutiv
e
Direct
ors, based upon re
w
ard f
or significant financial
and personal performance only
. The Committee also
remains committ
ed to appr
opriat
ely re
w
arding our lar
ge
and lo
yal w
orkforce.
Our W
orkforce-nominat
ed Direct
or
, Cally Price engages
with colleagues through r
egular and multi-channel
communication mechanisms. This enables colleagues t
o
understand the str
at
egy of the Company
, the vit
al role
all colleagues play in contributing t
o the ov
er
all success
of the Group and ho
w this is r
ew
ar
ded and to r
aise any
questions directl
y with a Board member
. Cally has been
directly in
v
olved in the r
evie
w of r
etail colleague pay
during FY22. The Committee has r
e
view
ed the salaries,
other remuner
ation and other emplo
yment conditions of
senior and middle managers throughout the Gr
oup and
has tak
en them int
o account in considering Direct
ors’
salaries. The Committ
ee has considered pay and
emplo
yment conditions of colleagues (other than the
Direct
ors) and has aligned pension contributions and
colleague discounts of the Direct
ors with emplo
y
ees.
Whilst the Company has not dir
ectly consult
ed with
emplo
yees on Dir
ect
ors’ remuner
ation, the vie
ws of
colleagues can be expr
essed b
y the W
orkforce Dir
ector
.
Annual Report on R
emuneration
This part of the Direct
ors’ Remuner
ation Report sets
out the actual payments made b
y the Company t
o its
Direct
ors with respect t
o the period ended 2
4 April 2022
and ho
w our Direct
ors’ Remuner
ation Policy will be
applied in the y
ear commencing 25 April 2022.
Base Salary and F
ees
Michael Murray’s s
alary will be £1,000
,
000 per annum,
with effect fr
om the start o
f his employment on 1 May
2022. Chris W
ootton
’s salary will r
emain at £250
,000 per
annum (no change from FY
22).
Mik
e Ashley does not r
eceiv
e a salary for his r
ole.
F
ees for the Chair and Non-Ex
ecutiv
e Dir
ectors ar
e
normally re
vie
w
ed annually
. In r
espect of fees for FY
23,
David Daly will r
eceive an annual f
ee of £200,
000
(FY22: £150
,000) f
or his role as Chair
. Richard Bottomle
y
will receiv
e £75
,000 f
or his role as Senior Independent
Direct
or (FY22: £65
,000). David Br
ayshaw and Nicola
Fr
ampton will each r
eceiv
e a fee of £65,
000 (no change
from FY
22) for their roles as Non-Ex
ecutive Dir
ectors.
Cally Price will receiv
e a fee of £15,000 (no change fr
om
FY22) for her r
ole as Non-e
x
ecutive W
orkforce Dir
ector
.
Pension
The contribution rat
e for Michael Murr
ay and Chris
W
ootton will be 3% of s
alary, capped at £5
0,
000 of
salary
, being the maximum emplo
y
er contribution rat
e
av
ailable under the Company st
ak
eholder pension
scheme. No Dir
ector part
icipates in a defined bene
fit
scheme (FY21: none).
Mik
e Ashley is not eligible t
o r
eceive emplo
yer
contributions under the Compan
y stak
eholder
pension scheme.
Annual Bonus Scheme
Michael Murray and Chris W
ootton will be eligible t
o
earn a bonus in respect of FY
23. An
y amount earned
shall be determined b
y refer
ence to one or mor
e
performance metrics det
ermined b
y the Committee and
linked t
o the Compan
y’s strat
egy and/
or the Executiv
e
Direct
or’s performance in r
ole. The Committ
ee will
pro
vide appropriat
e and r
elev
ant le
v
els of retr
ospective
disclosure of the assessed crit
eria applied t
o the FY23
bonus. An
y such bonus shall be of up to 200% of s
alary,
and any bonus earned in e
x
cess of 100% of s
alary may
be subject to de
ferral
.
Mik
e Ashley shall not be eligible t
o earn a bonus in
respect of FY
23.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
82
Long-
T
erm Incentiv
es
Michael Murray and Chris W
ootton are both eligible t
o participat
e in the new Ex
ecutive Shar
e Scheme (which w
as
appro
v
ed b
y shareholders at the 2021 A
GM). Chris W
ootton r
eceiv
ed an aw
ard o
v
er 600
,000 shar
es in FY22 and
Michael Murray r
eceiv
ed an aw
ard o
v
er 6,
711,
409 shares as soon as pract
ical after he joined the Boar
d in FY23.
A
w
ards under the Ex
ecutive Shar
e Scheme are due t
o v
est after a f
our-y
ears performance period ending in Oct
ober
2025, subject t
o a stret
ching absolut
e share price perf
ormance tar
get (£15 for the pr
oposed awar
d t
o Michael Murray
and £12 for the aw
ar
d made to
Chris W
ootton).
In addition t
o the share price performance measur
e, aw
ards under the Ex
ecutive Shar
e Scheme will be grant
ed subject
to tw
o underpins requiring:
i.
satisf
actory perf
ormance ratings for the Ex
ecutive Dir
ector during the t
erm of the aw
ar
d; and
ii.
anticipat
ed delivery of the C
ompany’s
Elev
ation str
ategy
.
Mik
e Ashley is not eligible t
o be gr
anted aw
ar
ds under the Ex
ecutiv
e Share Scheme
.
Single Figur
e T
able (Audit
ed)
The aggregat
e remuner
ation pro
vided t
o individuals who have serv
ed as Directors in the period ended 2
4 April 2022 is
set out belo
w, along with the aggr
egat
e remunerat
ion pro
vided to individuals who hav
e served as Direct
ors during the
prior financial y
ear
.
Direct
or
Salaries
and fees
Other
benefits
Bonus
Long-term
incentiv
e
schemes
Pension
(1)
T
otal
T
otal fix
ed
remuneration
T
otal v
ariable
remuneration
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
Ex
ecutive Dir
ectors
Mike Ashle
y
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Chris W
oott
on
250
150
-
-
-
100
-
-
1
1
251
251
251
151
-
100
Non-Ex
ecutive Dir
ectors
David Daly
150
100
-
-
-
-
-
-
-
-
150
100
1
50
100
-
-
David Brayshaw
65
50
-
-
-
-
-
-
-
-
65
50
65
50
-
-
Nicola Fr
ampton
65
50
-
-
-
-
-
-
1
1
66
51
66
51
-
-
Richard Bottomle
y
65
50
-
-
-
-
-
-
-
-
65
50
65
50
-
-
Cally Price
15
15
-
-
-
-
-
-
-
-
15
15
15
15
-
-
Anouska K
apur
22
-
-
-
-
-
-
-
-
-
22
-
22
-
-
-
T
otal
632
415
-
-
-
100
-
-
2
2
63
3
517
633
41
7
-
100
(1)
Pensions are pro
vided via a defined contribution t
o the Company stak
eholder pension scheme (see note 38).
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
83
F
urther Informat
ion on the
F
Y2
2 Annual
Bonus (Audit
ed)
Chris W
ootton receiv
ed a bonus of £nil in respect of
FY22 (FY21: £100k).
Payments f
or Loss of Office and Payments
t
o F
ormer Dir
ect
ors (Audit
ed)
No payments for loss of office or payments t
o former
Direct
ors w
ere made in FY
22 (FY21: nil).
St
at
ement of Direct
ors’ Shar
eholding and
Share Int
er
ests (Audit
ed)
The beneficial inter
ests of the Direct
ors who serv
ed
during the y
ear and of their connected persons, in
both cases at the beginning of the financial y
ear
, or at
the date o
f appointment if later
, and at the end of the
financial y
ear, or at the dat
e of r
esignation if earlier
, in
the share capit
al of the Compan
y are sho
wn belo
w:
Ordinary
Shares held at
24 April 2022*
Ordinary
Shares held at
25 April 2021*
Mike Ashle
y
330,
000,
000
330,
000,000
Chris W
oott
on
-
-
David Daly
31,563
24
,205
Nicola Fr
ampton
5,732
5,73
2
David Brayshaw
31,6
11
31,6
11
Richard Bottomle
y
10,
000
10,000
Cally Price
-
-
Anouska K
apur
-
-
*or if earlier the date of resignat
ion
There has been no change t
o the inter
ests report
ed
abo
ve betw
een 24 April 2022 and 20 September 2022
(being the latest possible dat
e for inclusion in the 20
22
Annual Report). The Compan
y did not receiv
e any
notifications under D
TR 5 between 2
4 April 2022 and 20
September 20
22.
As at 24 April 2022 and the r
eporting dat
e, Michael
Murray held an equity deriv
ativ
es contract which is the
economic equiv
alent of the holding of 6,85
1,
120 Fr
asers
Group Plc or
dinary shares.
In addition, Ex
ecutiv
e Direct
ors hold outst
anding scheme
inter
ests under the Ex
ecutiv
e Share Scheme as f
ollow
s:
Ex
ecutive
Direct
or
(1)
A
war
ds held
at 26 April
2021
A
war
ds
grant
ed
during the
year
(2)(3)
A
war
ds
lapsed
during the
year
A
war
ds held
at 24 April
2022
Chris
W
oot
t
on
-
600,000
-
600,
000
(1)
Mike Ashle
y is not eligible to participat
e in the Executiv
e Share Scheme.
(2)
Aw
ards ar
e granted in the form o
f a conditional share awar
d.
(3)
The award to Chris W
ootton was grant
ed on 14 October 2021 and has a f
ace value
of £3.8m, based on a closing share price of 6
32 pence per share on the date
of grant.
A
w
ards under the Ex
ecutive Shar
e Scheme are subject
to a str
et
ching share price t
arget measur
ed ov
er a four-
y
ear performance period t
o October 2025
. In the case of
the aw
ard t
o Chris W
ootton, the share price t
ar
get is £12
per share f
or 30 consecutiv
e trading days. In addit
ion,
each aw
ard is subject t
o underpins relating t
o
:
i.
achiev
ement of satisfact
ory performance ratings f
or
each participant; and
ii.
anticipat
ed delivery of the C
ompany’s Ele
v
ation
strat
egy
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
84
Perf
ormance Graph and T
able
The follo
wing graph sho
ws the Compan
y’s performance measur
ed by t
ot
al shareholder r
eturn compared with the
performance of the FTSE 100 and FTSE 250 Inde
x (
ex
cluding investment trusts).
The Committee consider
ed these as appropriat
e indices against which to compar
e the Compan
y’s performance
.
They ar
e widely accept
ed as national measures and include the companies that in
vest
ors ar
e likel
y to consider as
alternat
ive in
v
estments.
T
otal Chief Ex
ecutiv
e Remuner
ation and Perf
ormance-Relat
ed Pay
The table belo
w sho
ws det
ails of the tot
al remuner
ation and performance-r
elated pay f
or the Compan
y’s Chief
Ex
ecutiv
e ov
er the last ten financial y
ears.
T
otal remuner
ation
Long term incentiv
e scheme v
esting as a % of
maximum opportunity
FY22 - Mik
e Ashley
Nil
N
/A
FY21 - Mik
e Ashley
Nil
N
/A
FY20 - Mik
e Ashley
Nil
N
/A
FY19 - Mik
e Ashley
Nil
N
/A
FY18 - Mik
e Ashley
Nil
N
/A
FY17 - Mik
e Ashley
(1)
Nil
N
/A
FY17 - Dav
e F
orsey
(2)
£62,500
N
/A
FY16 - Dav
e F
orsey
£150,
000
N
/A
FY15 - Dav
e F
orsey
£150,
000
(3)
0%
(3)
FY14 - Dav
e F
orsey
£150,
000
N
/A
(1)
Mike Ashle
y was appoint
ed as Chief Execut
ive with effect fr
om 22 September 2016.
(2)
Dave F
orsey r
esigned with effect from 22 Sept
ember 2016. His tot
al remuneration is his r
emuneration earned
in the period from 25 April 2016 until the dat
e his resignation took e
ffect.
(3)
The figures for FY15 reflect Dav
e Forse
y’s decision on 6 June 2016 to f
orego an awar
d ov
er 1 million shares
which would otherwise hav
e been due to v
est on 6 September 2017
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
85
Chief Ex
ecutiv
e t
o Emplo
y
ee Pay R
atio
In line with reporting r
equirements, the Compan
y is requir
ed t
o disclose ratios which compar
e the tot
al remuner
ation
of the Chief Ex
ecutiv
e t
o the remuner
ation of the 25th, 50th and 75th per
centile of the Group
’s UK employ
ees. The
Company has not disclosed these r
atios and associat
ed supporting information on the basis that M
ike Ashle
y who
w
as the CEO during FY
22 is not remuner
ated b
y the Company
.
Annual Percent
age Change in Remuneration of Dir
ectors and Emplo
y
ees
The table belo
w sho
ws the percent
age change in r
emuneration of the Dir
ectors and emplo
y
ees of the business
betw
een FY21 and FY22 and betw
een FY20 and FY
21.
% Change Fr
om
FY2
1
To
F
Y22
% Change Fr
om
FY2
0
To
F
Y21
Salary or fees
Benefits
Bonus
Salary or fees
Benefits
Bonus
Employ
ees
(1)
23%
31%
1%
(13%)
(21%)
8%
Ex
ecutive Dir
ectors
Mike Ashle
y
(2)
N
/A
N
/A
N
/A
N
/A
N
/A
N
/A
Chris W
oott
on
67%
0%
(100%)
70%
0%
100%
Non-Ex
ecutive Dir
ectors
David Daly
50%
N
/A
N
/A
0%
(100%)
(100%)
Nicola Fr
ampton
30%
N
/A
N
/A
0%
0%
N
/A
David Brayshaw
30%
N
/A
N
/A
0%
(100%)
N
/A
Richard Bottomle
y
30%
N
/A
N
/A
0%
(100%)
N
/A
Cally Price
0%
N
/A
N
/A
50%
N
/A
N
/A
(1)
Employ
ees is been based on tot
al number of employ
ees, the decreased between FY
20 and FY21 is due to the impact of Co
vid-
19.
(2)
Mike Ashle
y receiv
es no remuneration.
Disclosure f
or all Direct
ors in addition t
o the CEO has
been added this y
ear in line with the new r
equirements
under the EU Shareholder Rights Dir
ectiv
e II and ov
er
time a fiv
e-y
ear comparison will be built up. F
rasers
Group Plc does not hav
e an
y emplo
yees and ther
efor
e a
subset of the Group
’s employ
ees has been used.
The table abo
v
e sho
ws ho
w the percent
age increase/
decrease in each Dir
ector’s s
alary
/fees, t
ax
able benefits
and annual incentiv
e plan betw
een 2021 and 2022
compares with the av
er
age percent
age increase in
each of those components of pay for the UK
-based
emplo
yees of the Gr
oup as a whole.
Relativ
e Importance of Spend on Pay
The table belo
w sets out the Group
’s distributions to
shareholders b
y w
ay of dividends and shar
e buybacks,
inv
estment (
calculated as set out belo
w) and t
otal
Group-wide e
xpenditure on pay f
or all colleagues (as
report
ed in the audit
ed financial stat
ements for FY
22
and FY21) and the Compan
y’s share price (
calculat
ed
as at the close of business on the last day of FY22
and FY21). W
e hav
e included information on both
inv
estment in the business in the y
ear and share price
performance
. These are indicativ
e of actual shareholder
v
alue being generat
ed and the continuing steps being
tak
en t
o position the business for futur
e generation of
shareholder v
alue
.
FY22
FY2
1
Percent
age
Change
Distributions to
shareholders b
y
way o
f dividends
and share
buybacks
£193,200
,000
-
100%
Inv
estment*
£504
,200,
000
£231,200,
000
79.
1%
Group-wide
expenditur
e on pay
for all emplo
yees
£532,900
,000
£377
,
100,
000
41.3%
Share price
(pence)**
690.0
515.5
33.9%
* Comprises of increases in w
orking capital, acquisitions and capit
al expenditure in the
year (see Consolidat
ed Cash Flow St
atement and note 33: Cash inflo
w from operating
activities) as the Board belie
ves these to be the most r
elev
ant measures of the Group
’s
inv
estment in future gro
wth. FY21 has been restat
ed as per note 33.
** for these purposes, the share price for FY
22 and the share price for FY21 ar
e calculated
at the close of business on 22 April 2022 and 23 April 2021 respectiv
ely, being the last
working days prior t
o the period ends.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
86
Remuner
ation Committee
During FY22, the Remuner
ation Committ
ee consisted
of David Bray
shaw and Nicola Fr
ampt
on, who are
considered independent and the Chair of the Boar
d,
David Daly
. The purpose of the Committ
ee, as pr
eviously
outlined, is to assist the Boar
d t
o ensure that Ex
ecutiv
e
Direct
ors and senior e
x
ecutives r
eceiv
e appropriat
e
lev
els of pay and benefits.
Att
endance at the meetings held during the year is
detailed on page 71.
The members of the Committee hav
e no personal
financial inter
est, other than as shareholders, in the
matters t
o be decided, no actual or pot
ential conflicts
of int
erest arising from other Dir
ect
orships and no
day-
to-day oper
ational responsibility within
the Company
.
Advisers t
o the Committee
Mik
e Ashley
, the Chief Ex
ecutive
, and Chris W
ootton,
the Chief F
inancial Officer, hav
e advised or materially
assisted the C
ommittee thr
oughout FY22 when
request
ed. Ex
ecutiv
e Direct
ors are not pr
esent during,
nor do they t
ak
e part in, discussions in respect of matt
ers
relating dir
ectly t
o their o
wn remunerat
ion.
FIT Remunerat
ion Consultants LLP (‘FIT’) act as adviser
to the C
ommittee
. FIT is a founder member of the
Remunerat
ion Consultants
’ Group and adher
e to its
code of conduct. F
ees t
otalling £7
5,889 plus V
A
T have
been paid for its services during the y
ear (FY21: £127
,184
plus V
A
T) for the pr
ovision of advice t
o the Committ
ee
on v
arious aspects of remuner
ation including advice
on the Remunerat
ion Policy and implementat
ion of
incentiv
e schemes. The Committee has r
evie
w
ed the
quality of the advice pro
vided and whether it pr
operly
addressed the issues under consider
ation and is satisfied
that the advice receiv
ed during the y
ear w
as objectiv
e
and independent. FIT has no personal connection t
o the
Company or its Dir
ect
ors.
T
otal Remuner
ation
The Committee considers that the curr
ent remuner
ation
arrangements pr
omote the long-
term success o
f the
Company within an appr
opriat
e risk frame
w
ork and are
suitabl
y aligned to the Compan
y’s objectiv
e of deliv
ering
long term sust
ainable gr
owth in t
ot
al shareholder r
eturns
giv
en bonuses are discr
etionary
.
Remuner
ation Principles
A ke
y priority is t
o ensure that our R
emuneration Policy
is aligned with strat
egy t
o achiev
e the long-t
erm
success of the Group
. The Committee ensur
es that
it complies with the requir
ements of regulat
ory and
go
vernance bodies including, but not limit
ed t
o, the UK
Corporat
e Go
v
ernance Code, whilst meeting st
ak
eholder,
shareholder and w
orkfor
ce e
xpectations.
The Remuneration Committ
ee and Board r
emain
committed t
o a fully tr
ansparent and simple
Remunerat
ion Policy that is aligned with the inter
ests
of all its shareholders. In the oper
ations of the
Remunerat
ion Committee
, we r
eit
erat
e our commitment
to the f
ollo
wing ke
y principles:
•
Clarity:
W
e pro
vide open and transpar
ent
disclosures r
egarding our e
x
ecutiv
e remuner
ation.
•
Simplicity:
Our Remunerat
ion Policy for our
Ex
ecutiv
e Direct
ors is straightf
orw
ard and
understood b
y both Directors and shar
eholders.
•
Predict
ability:
Most components of Direct
or
remuner
ation are either fix
ed or subject to individual
caps set b
y ref
erence t
o base salary
. T
hr
ough the
use of a share price measur
e under the Ex
ecutiv
e
Share Scheme
, performance out
comes are
predict
able and highly aligned t
o the experience o
f
our shareholders.
•
Proportionality:
Our Ex
ecutive Direct
or s
alaries are
amongst the lo
west in the FTSE 25
0. V
ariable pay
aw
ards ar
e ‘
at-risk’ and linked t
o deliv
ery of our
strat
egy and long-t
erm performance
, to ensur
e that
poor performance is not r
ew
arded.
•
Risks and behaviours:
W
e ensure that in our
operations w
e identify and mitigat
e reput
ational
risks arising from our r
emuneration arr
angements
and behavioural risks r
elated t
o incentiv
e t
argets.
•
Alignment to cult
ure:
Incr
eases to pay and
bonuses are only aw
arded where the Ex
ecutive
Direct
or demonstrat
es high-le
vel behaviours and
performance consist
ent with Compan
y purpose,
v
alues and strat
egy
.
Responsibilities of the Committ
ee
The Committee is r
esponsible for:
•
determining the C
ompany’s policy on Ex
ecutiv
e
Direct
or’s remuner
ation, including the design of
bonus schemes and tar
gets, share schemes when
appropriat
e, t
ogether with payments under them;
•
determining the le
v
el of remuner
ation of the Chair
and each of the Ex
ecutiv
e Direct
ors;
•
setting the remuner
ation for the first lay
er of
management belo
w the Board le
vel
, including the
Company Secr
et
ary;
•
monitoring the r
emuneration o
f senior management
and making recommendations in that r
espect;
•
agreeing an
y compensation f
or loss of office of any
Ex
ecutiv
e Direct
or; and
•
ensuring that the Company’s R
emuneration P
olicy
remains fit f
or purpose and tak
es not
e of any ne
w
regulat
ory requir
ements.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
87
What Has the Committee Done
During the Y
ear
?
•
Put in place an Ex
ecutiv
e Share Scheme f
or the
CE
O
, CF
O
, COO (‘
Chief Operating Officer’) and
CCO (‘
Chief Commercial Officer’). This w
as vot
ed on
b
y shareholders at the 2021 A
GM and will rew
ar
d
ex
ecutives based on a str
etching shar
e price tar
get
of £12 for all e
x
ecutiv
es apart from the CE
O and a
share price t
arget of £15 f
or the CE
O
.
•
W
orked with senior leaders in the business t
o
explor
e long service aw
ards f
or colleagues with five
,
ten, and tw
enty years’ service
.
•
Re
view
ed the F
earless 1000 share scheme to spr
ead
points more e
v
enly around the business
. Regional
managers no
w have 1,
000 points (the same as
senior leaders) as they hav
e a large amount of the
w
orkforce r
eporting t
o them. The Committee is
satisfied that the points distribution in the F
earless
1000 is fairly split betw
een head office, ret
ail
and w
arehouse
.
•
W
orked with HR t
o introduce e
xit int
erviews t
o
establish colleagues
’ reasons f
or departure
.
The Remuneration Committ
ee meets se
ver
al times a
y
ear, with f
our formal meetings and a number of ad hoc
meetings held in FY22.
During the y
ear, the C
ommittee consider
ed its
obligations under the UK Corporat
e Go
v
ernance Code
and concluded that:
•
the Direct
ors’ R
emuneration Policy supports the
Company’s str
at
egy (including in the performance
measures chosen), considers other e
xt
ernal
remuner
ation guidance/benchmarked against other
FTSE companies and pay ratios and w
ork
ed as
intended in FY
22; and
•
taking int
o consider
ation Company perf
ormance
during FY22, r
emuneration for our Dir
ect
ors
remains appr
opriate
.
Shareholder V
oting
The follo
wing table sets out actual v
oting in r
espect of the resolution t
o appr
ov
e the Dir
ectors
’ Remuneration R
eport
for the period ended 25 April 2021 at the 2021 A
GM and the resolution to appr
o
v
e the Direct
ors’ Remuner
ation Policy
at the 2021 A
GM.
V
otes for
% for
V
otes
against
% against
T
otal vot
es cast
V
otes
withheld
Direct
ors’ Remuneration R
eport for the period
ended 25 April 2021
391,676,
959
86.27
62,315,356
13.73
453,99
2,315
14,649
Direct
ors’ Remuneration P
olicy
385,510
,
465
8
4.9
2
68,
480,84
9
15.
08
453,
991,314
15,650
David Brayshaw
Chair of the Remuner
ation Committee
on Behalf of the Board
20 Sept
ember 2022
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
88
A
UDIT COMMITTEE REPOR
T
Dear Shareholder
I am pleased to pr
esent the report of the A
udit
Committee (the Committ
ee) for the 52-w
eek period
ended 24 April 2022. The r
eport sets out the Committee
’s
w
ork and areas of f
ocus during the year
, which has
continued t
o have the shado
w of uncert
ainty cast b
y
Co
vid-
19 and the emergence of ne
w variants along with
supply chain risks and w
ell-publicised macroeconomic
fact
ors. The Committee has ther
efor
e focused on and
discussed the Group
’s performance, and the impacts of
,
and response t
o these e
xternal f
actors. Our perf
ormance
as a business has remained str
ong in these challenging
circumst
ances. It has been impr
essive t
o see the
continued strength and depth of e
xperience across all
our business teams and their ability t
o withst
and and
manage the significant risks that materialised.
W
e monitor
ed the Group
’s ongoing viability and going
concern positions, re
vie
wing cashflow f
orecasts and
scenario modelling. W
e hav
e kept the Gr
oup risk
profile and emer
ging risks under continued re
vie
w and
had clear o
versight of the act
ivities of the ex
ecutive
Compliance & Risk Group
. W
e have also monit
ored the
Group
’s response to opportunities and acquisit
ions, to
ensure w
e come thr
ough the period stronger and on
track t
o meet our strat
egic t
argets.
On behalf of the Board, the Committ
ee monit
ors the
Group
’s financial reporting processes and the int
egrity
of its financial stat
ements and ensur
es high standar
ds
of quality and effectiv
eness in the external audit
process. The Committ
ee also re
vie
ws and monitors the
effectiv
eness of the Group
’s sy
stems of risk management
and internal contr
ol, go
v
ernance and compliance.
W
e have built a str
ong and productiv
e w
orking
relationship with RSM UK A
udit LLP (‘RSM’) since its
appointment in 2019 as our Ext
ernal Audit
or and w
e
v
alue the integrity
, strength and depth o
f its audit
and approach.
W
e have continued t
o mak
e strong pr
ogress against
our continuous impro
v
ement assurance agenda acr
oss
go
vernance
, risk and control
. W
e have closely monit
ored
the Go
vernment’s audit and go
v
ernance ref
orm agenda
and aw
ait their response t
o this.
The Committee v
alues the ongoing w
ork of the Group
’s
Internal A
udit and Risk T
eam, Retail Support Unit and
Digital Risk t
eams and continues t
o seek assurance that
their w
ork remains a str
ength in our Group
.
T
aking its responsibilities as a whole, the C
ommittee is
satisfied that the going concern basis of accounting is
appropriat
e (see further det
ail at page 99) and that the
Group is viable o
v
er its assessment period (see page 63).
I w
ould like t
o t
ake the opportunity t
o thank all our
colleagues for their v
aluable commitment, contributions
and support to
wards our Gr
oup performance
.
Membership
During the y
ear, the A
udit Committee comprised thr
ee
Non-Ex
ecutiv
e Direct
ors, David Bray
shaw
, Nicola
Fr
ampton and m
yself as Chair
. Biographies of each
Committee member ar
e set out in the Direct
ors’ pr
ofiles
on pages 72 to 7
4 of this Annual Report.
As Chair of the Audit Committ
ee and Senior
Independent Non-ex
ecutive Dir
ector
, I am satisfied
that the Committee
’s membership includes Directors
with recent and r
elev
ant financial e
xperience and
competence in account
ing, risk management and
go
vernance
, and that the Committee as a whole has
competence r
ele
vant t
o the ret
ail sect
or in which the
Group oper
ates
.
Meetings
The Committee met fiv
e times during the y
ear
, as
w
e have e
xt
ended our agenda to accommodat
e our
assurance r
equirements. Non-Committ
ee members
of the Board and the e
x
ecutiv
e management t
eam
attended Committ
ee meetings at m
y invit
ation to
ensure the Committ
ee is k
ept informed of import
ant
dev
elopments in the business and the risk and control
envir
onment. Att
endance b
y members of the ex
ecutive
management team also helps t
o r
einforce a str
ong
culture of risk management within the business.
Non-Committee members do not participat
e in A
udit
Committee decision making
.
Our External A
uditor att
ended all Committ
ee meetings
during the y
ear
. The Committee meets priv
atel
y with
the External A
uditor at least annuall
y
. In my capacity as
Chair
, I hav
e regular meetings with the Ext
ernal Audit
or
prior to each C
ommittee meeting during the audit
planning process and as the audit pr
ogresses, t
o address
issues early and t
o av
oid any surprises. I am also in
continuous cont
act with the Board Chair
, Chief Ex
ecutiv
e,
Chief Financial Officer
, External Audit Lead P
artner and
our Head of Int
ernal Audit & Risk Management, who has
an independent reporting line t
o me
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
89
The Main Responsibilities of the
Audit Committ
ee
The Committee
’s main r
esponsibilities, as delegated b
y
the Board, r
emained unchanged during the year and
are set out in the Committ
ee
’s T
erms of Refer
ence. These
include o
versight, assessment and r
evie
w of:
Financial St
at
ements and Reporting:
•
the integrity of the Gr
oup
’s financial r
eporting as a
whole and any f
ormal announcements relating t
o
the Group
’s financial performance, including an
y
significant judgements contained in them; and
•
the Group
’s assessment of its going concern and
longer-t
erm
prospects
and
viability
.
External A
udit
or
•
the effectiv
eness of the external audit pr
ocess
taking int
o consider
ation rele
v
ant UK professional
and regulat
ory requir
ements;
•
dev
eloping and implementing policy on the supply
of non-audit services b
y the External A
uditor and
appro
ving an
y such work; and
•
re
vie
wing and monitoring the Ext
ernal Audit
ors’
independence and objectivity
.
Risk Management and Internal Cont
rols
•
the effectiv
eness of the Group
’s internal financial
controls, risk management and int
ernal control
sy
stems, including the monit
oring and re
vie
wing
the effectiv
eness of activities of the Internal Audit
function, and driving an agenda of continuous
impro
v
ement;
•
identifying and assessing principal and emerging
risks and risk exposur
es; and
•
the effectiv
eness of whistleblowing arrangements
.
In addition, the Committee
:
•
supports the Board in dischar
ging its responsibilities
for Corpor
ate Go
v
ernance Code compliance;
•
advises the Board on the out
come of the e
xternal
audit and whether it considers the Annual Report
and Accounts, when t
aken as a whole
, are f
air
,
balanced and understandable and pr
o
vide
information necess
ary to shar
eholders to assess the
Group
’s position and performance, business model
and strat
egy;
•
makes r
ecommendations t
o the Board on the
appointment, reappointment or r
emov
al of the
External A
uditor;
•
appro
v
es the Ext
ernal Audit
or’s fees and t
erms
of engagement;
•
maintains str
ong relationships with the Boar
d,
ex
ecutive management, the Ext
ernal Audit
or and
Internal A
udit, in the ex
ecution of their respectiv
e
responsibilities; and
•
reports t
o the Board on ho
w the Committ
ee has
discharged its r
esponsibilities during the y
ear
.
Activit
ies During the Period
The Committee f
ocused on a number of significant areas
of int
ernal control (including financial, oper
ational and
compliance controls). During the period, the Committ
ee:
•
re
vie
wed the Gr
oup
’s financial st
atements and
assessed whether suitable account
ing policies have
been adopted and whether management has made
appropriat
e estimat
es and judgements;
•
re
vie
wed the det
ailed scenarios and assumptions
behind the going concern basis of accounting and
enhanced viability
, including the worst
case scenario;
•
assessed the effectiv
eness of the external audit
process and consider
ed the reappointment of RSM
as the External A
uditor f
or FY23;
•
monitor
ed the eff
ectiveness of the Gr
oup
’s risk
management and internal contr
ol sy
stems and
receiv
ed det
ailed reports and pr
esentations on
principal risks management;
•
receiv
ed r
egular updates on ESG matt
ers, including
T
CFD r
equirements, climat
e-relat
ed risks
and opportunities;
•
re
vie
wed its T
erms of Refer
ence; and
•
together with the Boar
d, considered the
Committee
’s own effect
iveness
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
90
Risk Management and Int
ernal Controls
Information on our appr
oach to risk management
and internal contr
ol is set out in the risk section of the
Strat
egic Report and the conclusion of our r
evie
w is set
out on page 51. Our plans for cont
inuous impro
v
ement
of our risk management and internal contr
ol sy
st
ems
remained in place during the y
ear and our Group
Internal A
udit & Risk Management function has
reinf
orced our pr
ogress. The w
ork of our Ret
ail Support
Unit is central t
o the Group
’s syst
em of int
ernal control.
The Unit pro
vides internal assur
ance on the efficacy of
controls o
v
er our ret
ail operational pr
ocedures
and sy
stems.
In the y
ear, the C
ommittee focused on a number of
significant areas of int
ernal control
, including:
•
climate risk and the Gr
oup
’s en
vironment
al, social
and go
vernance agenda, supporting T
askforce for
Climate-r
elat
ed Financial Disclosur
es reporting.
F
urther details can be f
ound on page 40;
•
ke
y legislativ
e and r
egulatory obligations, including
data pr
ot
ection and ov
ersight of Gov
ernment plans
for audit and go
v
ernance ref
orm - strengthening
controls o
v
er financial reporting;
•
cyber risk and data loss pr
e
vention, including
strengthening of our inf
ormation security capability;
•
the enhancements made to IT gener
al controls
(‘IT
GC’), including a r
evie
w of a critical business
database
’s access to ensure that it w
as
proportionat
e t
o the needs of the business as w
ell as
meeting the robust security st
andards r
equired of a
critical dat
abase. The process is no
w being scaled
and aligned across all k
e
y syst
ems t
o ensure access
is appropriat
e;
•
updates on the go
vernance policies re
vie
w
and reporting;
•
re
vie
wing significant accounting judgements
and estimat
es;
•
the v
aluation of assets and stock and the
calculation of associat
ed pro
visions;
•
the effectiv
eness of hedge accounting and the
management of for
eign currency e
xposures;
•
property and the s
yst
ems in place to ensur
e
impairments are r
ecognised on a timely basis;
•
re
vie
wing and communicating the Group
’s
Whistleblo
wing policy, ensuring concerns can be
raised via t
elephone, via email t
o a dedicat
ed
whistleblo
wing address or directl
y to the C
ompany
Secret
ary or CF
O;
•
HR re
vie
w of control pr
ocesses for managing
start
ers, mo
v
ers and leav
ers;
•
business continuity
, IT disast
er reco
v
ery and incident
response; and
•
the Group
’s banking arrangements.
Audit Quality
The Committee r
eceived compr
ehensiv
e updates fr
om
RSM and the business in response t
o outlined re
form
propos
als in the current Go
v
ernment consultation:
rest
oring trust in audit and corporat
e go
v
ernance.
Building on the three significant r
evie
ws in the last
couple of y
ears -the Competition and Mark
ets Authority
(CMA) Mark
et Study
, the Kingman Re
vie
w and the
Brydon R
evie
w - the UK audit sect
or
, the audit prof
ession,
audit regulation, and the quality of the audit pr
oduct,
hav
e nev
er been under gr
eater scrutin
y
.
The Committee will continue t
o o
v
ersee the dev
elopment
of plans for compliance r
eadiness in response t
o the
current BEIS consult
ation and w
e look forw
ar
d to
Go
vernment’s decision in due course
. The Group has
responded t
o the Go
v
ernment consultation.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
91
Ext
ernal Audit
or
The Committee w
as pleased t
o recommend the
reappointment of RSM as Ext
ernal Audit
or for FY
22
follo
wing a robust e
xt
ernal audit re
view of FY
21. The
length of tenur
e of RSM as e
xternal audit
ors is
three y
ears.
RSM has report
ed t
o the Committee that, in its
prof
essional judgement, it is independent within the
meaning of regulat
ory and pro
fessional requir
ements
and the objectivity of the audit engagement partner
and audit staff is not impair
ed. The Audit Committ
ee
has assessed the independence of the audit
or and
concurs with this stat
ement.
The Committee e
v
aluates the e
ffectiv
eness of the
ext
ernal audit pr
ocess on an ongoing basis and makes
recommendations annuall
y to the Boar
d on the External
Audit
or’s reappointment
. The External Audit
or is then
proposed f
or reappointment (
as applicable) each year
at the A
GM.
In making its recommendations t
o the Board, the
Committee considers a number of f
actors r
elating t
o
the lev
el of service provided b
y the External Audit
or
, the
quality of its w
ork and its independence. These include:
•
the quality and scope of the planning of the e
xternal
audit, including the External A
uditor’s assessment o
f
risks and ho
w it intends t
o e
volv
e the audit plan t
o
respond t
o changes in the business;
•
the quality and timeliness of the Ext
ernal Audit
or’s
reports t
o the Committ
ee and the Board during
the y
ear;
•
the lev
el of understanding that the External A
uditor
has demonstrat
ed in relation t
o the Gr
oup
’s
businesses and the ret
ail sect
or;
•
the objectivity of the Ext
ernal Audit
or’s view on an
y
deficiencies in int
ernal control which came t
o its
attention during the course of its audit w
ork, and the
robustness of challenge and its findings on ar
eas
which requir
e management judgement;
•
the contents o
f any e
xternal r
eports or regulat
ory
stat
ements published in r
espect of the External
Audit
or; and
•
the nature and scope of non-audit services pr
o
vided
b
y the External A
uditor and the le
v
el of fees char
ged
for these services.
W
e have a stringent policy and appr
ov
al process in
place in respect of non-audit services and our vie
w
is to k
eep this type of engagement minimal unless in
ex
ceptional but reasonable circumst
ances, and in line
with Group policy
. No non-audit services have been
pro
vided b
y the Ext
ernal Audit
or in the financial year
(other than agr
eed upon procedur
es in relation t
o the
interim financial st
at
ements).
Opinion on the Annual Report
and Accounts
The Board has ask
ed the Committee t
o advise it on
whether the Annual Report and Accounts, t
ak
en as
a whole, ar
e fair
, balanced and underst
andable and
pro
vide the informat
ion necessary for shar
eholders
to assess the Gr
oup
’s position, perf
ormance, business
model and strat
egy
.
The Committee has r
evie
w
ed the process f
or
preparing this Annual R
eport in order t
o assess
whether other information cont
ained in it is
consistent with the Gr
oup
’s financial st
atements f
or
the 52 w
eeks ended 24 April 2022. This pr
ocess has
included the follo
wing k
ey elements:
•
re
vie
wing new r
egulations and reporting
requir
ements with ext
ernal advisers t
o identify
additional information and disclosur
es that may
be appropriat
e;
•
preparing a det
ailed timet
able and allocation of
drafting r
esponsibility t
o rele
vant int
ernal t
eams with
re
vie
w by an appr
opriat
e senior manager;
•
pro
viding an e
xplanation of the requir
ement for the
Annual Report and Accounts, t
ak
en as a whole, t
o
be fair
, balanced and underst
andable, t
o those with
drafting r
esponsibility;
•
monitoring the int
egrity of the financial st
at
ements
and other information pr
o
vided to shar
eholders
to ensur
e the
y repr
esent a clear and accurat
e
assessment of the Group
’s financial position
and performance;
•
re
vie
wing significant financial reporting issues and
judgements contained in the financial st
at
ements;
•
re
vie
w of all sections of the Annual Report b
y
rele
v
ant ext
ernal advisers;
•
re
vie
w by the senior manager w
orking group
responsible f
or the Annual Report process; and
•
ov
er
all re
view of the cont
ents of the Annual Report
and Financial St
at
ements for the period under re
vie
w
.
The Committee has advised the Boar
d that it considers
the Annual Report and F
inancial Stat
ements for the
period ended 24 April 2022, when t
ak
en as a whole, t
o
be fair
, balanced and underst
andable and that they
pro
vide the necessary inf
ormation t
o assess the Group
’s
position, performance
, business model and strat
egy
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
92
Significant Financial R
eporting Issues
The Committee has consider
ed the follo
wing areas of significance during the period and held discussions with
management and the External A
uditor in r
e
viewing these matt
ers. The Committee is s
atisfied with ho
w each of these
matters has been discussed and addr
essed.
Going concern and viability
T
he Audit Committ
ee has held ext
ensive t
alks with management on going concern and viability, and the C
ommittee as a
whole has re
view
ed and challenged management analysis and assumptions used in both these assessments. This includes
re
viewing cash flo
w forecasts, sensitivity anal
ysis, finance facilities and futur
e funding plans. W
e considered ar
eas of ongoing
uncertainty in r
espect of Brexit, suppl
y chain issues, cost of living and the broader economic do
wnturn.
The Group has successfully r
efinanced a combined term loan and r
ev
olving credit facility (R
CF) which currently t
otals £980m
for a period of three y
ears with the possibility t
o extend f
or a further 2 years.
On this basis, the Committee is sat
isfied that the going concern basis of accounting is appropriat
e and the Group is viable
ov
er its assessment period. F
urther information is included within the Viability St
atement and the Direct
ors’ Report
.
Inv
entory
The Committee has considered the w
ork performed on in
vent
ory valuat
ion and provisioning and has r
evie
wed
management’s methodology.
The Committee is satisfied the appr
oach is consistent with the prior periods and t
akes account of an
y relat
ed supply chain
and macroeconomic risks.
The Committee is satisfied with the appr
oach tak
en on inv
entory v
aluation and pro
visioning for Studio Ret
ail, due t
o the
specific risks associated with in
vent
ory within that business.
Impairment of right-of
-use
assets; property
, plant
& equipment; freehold
property and relat
ed
property pro
visions
The Committee re
view
ed and challenged management’s impairment testing, including the k
ey assumptions and
methodologies used. The projected cash flo
ws, discount r
ates and third-party v
aluations used in the ev
aluation w
ere
considered appropriat
e, within the cont
ext of the changes in consumer behaviour and economic uncert
ainties.
F
orwar
d currency contracts
The Committee revie
w
ed and discussed with management the valuation methodology used and accounting tr
eatment
applied to deriv
ativ
e contracts. The Committee also r
evie
w delegated authorities in place f
or the ex
ecution of such
transactions and is s
atisfied these are appropriat
e.
Accounting for in
vestments
and associates
Inv
estments: the Committee consider
ed management’s work on present
ation and classification risk, in respect of in
vestment
shareholdings in e
xcess of 20%. This w
ork inv
olves management judgement on whether or not the Gr
oup has significant
influence ov
er these entities. The Committ
ee discussed with management and revie
w
ed its represent
ations in determining
significant influence.
Associates: the Committ
ee also considered management’s work on pr
esentation and classification risk in r
elation to
associates. The Committ
ee has similarly discussed with management and re
view
ed its repr
esentations in det
ermining
whether the Group has control o
v
er its associates.
Related part
ies
The Committee has e
valuat
ed the appropriat
eness of relat
ed-party disclosures through discussions with management and
re
view of papers outlining the v
aluation of the loan to F
our Holdings Limit
ed and the FY22 payments in respect of MM Pr
op
Consultancy Limit
ed and M.P
.M Elev
ation Limited. The Committ
ee is satisfied that the disclosures, payment and appr
oach
are appropriat
e.
Legal and other pro
visions
and accruals
The Committee has re
view
ed and discussed with management its judgements and det
erminations in respect of legal
pro
visioning and accrual for tax
-relat
ed matters at the period end. Giv
en the inherent le
vels of uncert
ainty and estimation in
these areas, the Committ
ee has carefully consider
ed and challenged management’s conclusions and revie
wed independent
third-party reports wher
e available
. As a result, the Committ
ee is satisfied that the v
aluation of amounts recognised within
legal and other pro
visions are appropriat
e.
Impairment allow
ance on
trade receiv
ables (Studio
Retail Lt
d)
The Committee challenged managements judgements and estimat
es on pro
visioning lev
els. The Committee is satisfied the
underlying approach is consist
ent with Studio Ret
ail’s prior periods and has been adequately updat
ed to t
ake int
o account
relat
ed supply chain and macroeconomic risks. F
urthermore
, the committee is satisfied with the appr
oach for the post model
economic ov
erlay
.
Business combination
accounting
The Committee re
view
ed the w
ork performed b
y management in respect of the acquisition of Studio Ret
ail Limited,
specifically
, in relation to the v
aluation of net assets at the dat
e of acquisition, accounting for the defined benefit pension
scheme, fair v
alue of intangibles and the f
air value of the cr
edit purchased impaired assets
. The Committee is satisfied
that the acquisition and present
ation of Studio Retail Limit
ed repr
esents a true and fair view and that the dat
e of control
,
estimates and judgements used b
y management are appr
opriate
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
93
Re
view of the Committ
ee
’s Eff
ectiv
eness
The Committee has impr
ov
ed its gov
ernance and annual
planning cy
cle in the year and will continue t
o build on
this in FY23. I monit
or and assess the eff
ectiv
eness of
the Committee r
egularly as Chair and in
vite input fr
om
the External A
uditor on this
.
Ke
y Objectiv
es for
FY23
The Committee
’s k
ey object
ives f
or FY23 ar
e to
:
•
o
versee the de
v
elopment of plans in response t
o the
Go
vernment’s r
eform pr
oposals: rest
oring trust in
audit and corporat
e go
vernance;
•
monitor cont
inuous impro
v
ement of the Group
’s
sy
stems of risk management and int
ernal contr
ol;
•
maintain a str
ong relationship with our Ext
ernal
Audit
or and engagement on the deliv
ery of a robust,
efficient and eff
ectiv
e ext
ernal audit; and
•
strengthen assur
ance activity across the Gr
oup
based on the three lines model
, (account
ability,
actions,
assurance).
Richard Bott
omley
Chair of the Audit Committ
ee and Senior Independent
Non-Ex
ecutiv
e Direct
or
20 Sept
ember 2022
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
94
DIRE
CT
ORS’ REPOR
T
The Direct
ors of Fr
asers Group Plc pr
esent their Annual
Report and Accounts f
or the period ended 24 April 2022.
The Group
’s Corporate Go
v
ernance Stat
ement is set out
on page 65 and forms part of the Dir
ectors
’ Report.
Principal Activit
ies and Business Re
vie
w
The Chief Ex
ecutiv
e
’s Report and Business Re
view on
page 18 pro
vides a det
ailed re
view of the Gr
oup
’s
current activities and pot
ential futur
e dev
elopments,
together with matt
ers lik
ely t
o affect future de
v
elopment,
performance and conditions. Principal risks and
uncertainties lik
ely to affect the Gr
oup are set out on
page 50. The financial position of the Gr
oup, its cash
flo
w, liquidity position and borr
o
wing facilities ar
e
described in the Financial R
evie
w on page 28. The
Strat
egic Report on page 10 co
v
ers envir
onmental
matters, including the impact of the Gr
oup
’s businesses
on the envir
onment, the Group
’s workfor
ce, and on
community engagement.
The principal activities of the Group during the
period w
ere:
•
ret
ailing of sports and leisure clothing, f
ootw
ear and
equipment, premium and luxury appar
el;
•
ret
ailing through department st
or
es, shops
and online;
•
wholesale distribution and s
ale of sports and leisure
clothing, footw
ear and equipment, premium and
luxury apparel;
•
production of appar
el under Group-o
wned or
licensed brands; and
•
licensing of Group Br
ands.
Fr
asers Group Plc, thr
ough v
arious subsidiaries, has
established br
anches in a number of differ
ent countries
in which the business operat
es.
F
urther information on the Gr
oup
’s principal activities
is set out at the front of this r
eport and in the Chief
Ex
ecutiv
e
’s Report and Business Re
view on page 18
.
Results f
or the Period and Dividends
Re
venue f
or the 52 w
eeks ended 24 April 2022 w
as
£4,
805.3m and pr
ofit befor
e tax w
as £335.6m compared
with £3,
625.3m and £8
.5m in the prior period. The
trading r
esults for the period and the Gr
oup
’s financial
position as at the end of the y
ear are sho
wn in the
attached financial st
at
ements and discussed further in
the Chief Ex
ecutiv
e
’s Report and Business Re
vie
w and in
the Financial R
evie
w on pages 18 and 28 respectiv
ely.
The Board has decided not t
o propose a dividend in
relation t
o FY22 (FY
21: nil). The Board remains of the
opinion that it is in the best inter
ests of the Group and its
shareholders t
o preserv
e financial flexibility, f
acilitating
future in
v
estments and other gro
wth opportunities.
Share Capit
al and Contr
ol
As at 20 September 20
22, there are 640
,
602,369 or
dinary
shares of 10p in issue and full
y paid, of which 163,
124
,6
12
w
ere held in tr
easury
. As at the period end there w
ere
151,2
40,
17
4 ordinary shares held in tr
easury
.
F
urther information r
egarding the Group
’s issued share
capital can be f
ound in note 2
5. Details o
f our share
schemes are also set out in not
e 25.
There are no specific r
estrictions on the tr
ansfer of shares,
which are go
v
erned both b
y the general pr
ovisions of
the Articles of Association and pre
v
ailing legislation.
The Direct
ors are not aw
ar
e of any agr
eements betw
een
holders of the Compan
y’s shares that may result in
restrictions on the tr
ansfer of securities or on v
oting rights.
Authority t
o Issue Shar
es
The Direct
ors w
ere authorised t
o allot shares in the
capital of the Gr
oup up t
o an aggregat
e nominal
amount of £17
,068,
843 (being appro
x. one third of the
then issued share capit
al) for the period e
xpiring at the
end of the 2022 A
GM.
In line with guidance from the Association of British
Insurers, the Compan
y w
as also grant
ed authority t
o
issue a further third of the issued shar
e capital t
o a t
otal
nominal amount of £34
,
137
,686, in connect
ion with a
rights issue.
An authority to allot shar
es up t
o a maximum nominal
v
alue of £2,560,32
6 (being appro
x. 5% of the then issued
share capit
al) as if st
atutory pr
e-emption rights did not
apply
, w
as also appro
v
ed. In addition, the Direct
ors w
ere
grant
ed a further authority t
o allot up to a maximum
nominal v
alue of £2,560,32
6 (being appro
x. 5% of the
then issued capital) as if st
atut
ory pre-emption rights
did not apply when such allotment w
as for the purposes
of financing (or r
efinancing, if the po
w
er is used within
six months of the original trans
action) a trans
action
which the Board det
ermined t
o be an acquisition or
other capital in
v
estment of a kind contemplat
ed b
y
the Pre-emption Gr
oup
’s St
atement of Principles on
disapplying pr
e-emption rights.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
95
The Group w
as authorised t
o make mark
et pur
chase of
ordinary shar
es of 10p each in the Company o
f up to a
maximum aggregat
e number of 7
6,
758,587
, representing
14.
99% of the Company’s issued ordinary shar
e capital
at the 2021 A
GM. The abo
ve authority e
xpires at the
close of the next A
GM of the Company
.
Whilst authorities expir
e at the close of the ne
xt A
GM
of the Compan
y, a contr
act to allot shar
es under these
authorities may be made prior t
o the expiry of the
authority and concluded in whole or part aft
er the A
GM,
and at that meeting other authorities will be sought
from shar
eholders.
Share Buybacks
During the period to 2
4 April 2022 the Compan
y
purchased 29
,
979
,
999 under the Share buyback
progr
ammes that commenced on 4 May 2021, 6 August
2021, 4 Oct
ober 2021, 13 December 2021 and 1 April 2022.
The nominal value of the shar
es purchased w
as 10p for a
consideration of £19
3.2m. Up t
o 20 September 2022 the
Company has pur
chased 11,884
,
438 additional shar
es
with a nominal v
alue of 10p for considerat
ion of £79.
9m.
No shares hav
e been disposed of b
y the Compan
y to
this date
. The purpose of the Progr
amme is to r
educe
the share capit
al of the Compan
y
.
Shareholders
No shareholder enjo
ys an
y special contr
ol rights, and,
ex
cept as set out below
, there ar
e no restrictions in the
transf
er of shares or of v
oting rights.
As a controlling shar
eholder Mik
e Ashley has ent
er
ed
into a writt
en and legally binding R
elationship
Agreement with the Compan
y
. This agreement
ensures that the contr
olling shareholder complies with
the independence pro
visions set out in Listing Rule
6.5.
4. Under the t
erms of the Agreement, M
ike Ashle
y
undertook that, f
or so long as he is entitled t
o ex
ercise,
or to contr
ol the e
x
ercise of
, 15% or mor
e of the rights
to v
ote at general meetings of the Compan
y
, he will:
conduct all trans
actions and relationships with an
y
member of the Group on arm
’s length terms and on a
normal commercial basis; e
x
ercise his v
oting rights or
other rights in support of the Compan
y being managed
in accordance with the Listing Rules and the principles
of good go
vernance set out in the 20
18 UK Corporat
e
Go
vernance Code and not e
x
er
cise any of his v
oting or
other rights and po
wers t
o pr
ocure an
y amendment to
the Articles of Association of the Compan
y; and other
than through his int
erest in the Compan
y
, not hav
e any
inter
est in an
y business which sells sports apparel and
equipment, subject to cert
ain rights, aft
er notification
to the C
ompany
, t
o acquire an
y such inter
est of less
than 20% of the business concerned, and certain other
limited e
x
ceptions, without r
eceiving the prior appro
v
al
of the Non-Ex
ecutiv
e Direct
ors; and not solicit for
emplo
yment or emplo
y any senior emplo
y
ee of
the Company
.
The Company has complied with this Agr
eement’s
independence pro
visions during the period and, as far as
the Company is aw
are, the contr
olling shareholder and
his associates hav
e also complied with them.
As at 24 April 2022, the C
ompany had been advised
that the follo
wing parties had an int
erest in 3% or mor
e
of the issued share capit
al of the Compan
y pursuant
to R
ule 5 of the Disclosure Guidance and T
ranspar
ency
Rules (‘D
TR’);
Number of
shares held
Percent
age
of issued
Ordinary
share capit
al
with vot
ing
rights held
Nature of
holding
Mike Ashle
y
(1)
330,
000,
000
6
7.0
%
Indirect
Phoenix Asset
Management
Partners Limited
(2)
35,727
,677
7.
0
%
Direct
Odey Asset
Management LLP
(3)
28,694,940
5.3%
Direct
(1)
Mike Ashle
y held the shares through tw
o companies, namely MASH Beta Limit
ed
and MASH Holdings Limited, which held 303
,507
,
460 ordinary shares (6
1.65% of
the issued ordinary share capit
al of the Company) and 26,
492,5
40 ordinary shares
(5.38% of the issued or
dinary share capital of the Compan
y) respectivel
y.
(2)
These figures are as at 06 Oct
ober 2021 being the last date on which the
Company w
as notified of a change in the percent
age of shares.
(3)
These figures are as at 14 December 2018, being the last dat
e on which the
Company w
as notified of a change in the percent
age of shares
Betw
een 25 April 2022 and 20 September 20
22 (being
the latest pr
acticable dat
e prior to the publication of
this Report) Mik
e Ashle
y’s shareholding incr
eased to
69% held via MASH Bet
a Limit
ed and MASH Holdings
Limited, which hold 30
3,50
7
,460 or
dinary shares (6
3.46
%
of the issued ordinary shar
e capital of the C
ompany)
and 26,
492,540 ordinary shar
es (5.54
% of the issued
ordinary shar
e capital of the Compan
y) r
espectivel
y
.
There hav
e been no other notification of changes in the
inter
est held b
y the abo
ve parties
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
96
ADR
Progr
ammes
W
e are aw
are of unsponsor
ed American Depository
Receipt (ADR
) programmes est
ablished fr
om time to
time in respect of our shar
es. W
e have not sponsor
ed or
authorised their creation and an
y questions should be
direct
ed t
o the rele
vant deposit
ory
.
Fr
asers Group has not and does not int
end t
o offer or
sell its ordinary shar
es or other securities (in the form
of ADR or otherwise) to the gener
al public in the Unit
ed
Stat
es nor has it list
ed or intend t
o list its Or
dinary
Shares or other securities on an
y national securities
ex
change in the United St
ates or t
o encourage the
trading of its Or
dinary Shares on an
y o
ver-
the-count
er
market locat
ed in the Unit
ed Stat
es. The Gr
oup does
not make arr
angements t
o permit the vot
ing of ordinary
shares held in the f
orm of ADRs and its publication of
periodic financial and other information is not int
ended
to f
acilitat
e the oper
ation of any unsponsor
ed ADR
progr
amme under Rule 12g 3-2(b
) of U
.S. Securities
Ex
change Act of 193
4, as amended or otherwise
.
Articles of Association
The Company’s Articles of Associat
ion may only be
amended b
y special resolution at a gener
al meeting of
shareholders. The articles w
er
e last amended at the 2021
A
GM. Subject t
o applicable laws and the Company’s
Articles of Association, the Direct
ors may e
x
ercise all
po
wers of the C
ompany
.
T
akeo
vers
The Direct
ors do not believ
e that ther
e are an
y
significant contracts that may change in the e
v
ent of a
successful tak
eo
v
er of the Company
.
Share Schemes
Details of the Ex
ecutive shar
e scheme are set out in
the Direct
ors’ R
emuneration Report on page 77
. T
he
F
earless 1000 share scheme r
emains in place and is due
to bene
fit colleagues in 2025, should the par
ameters of
that scheme be met.
Colleague In
v
olvement
The Group curr
ently has appro
x. 30,000 colleagues in its
stor
es, offices and w
arehouses
.
The workf
orce is notified of announcements and major
changes in the business via Company emails, SLA
CK,
social media and our intranet, as w
ell as informat
ion
being communicated thr
ough line managers. The
Company has elect
ed a W
orkers’ Repr
esentat
ive
, Cally
Price, who att
ends all Board meetings and pr
o
vides
feedback fr
om employ
ees to the Board. The Compan
y
also has the ‘Y
our Company
, Y
our V
oice’ scheme
which enables colleagues to r
aise issues of concern
via suggestion bo
x
es. The contributions are r
ead b
y
senior management and the W
orkers’ R
epresent
ativ
e,
who pro
vides the Board with an o
vervie
w and replies
to colleagues as appr
opriat
e. A selection of questions
receiv
ed, and answ
ers given b
y management, are
display
ed in communal areas for colleagues
.
The Group has inv
ested heavily in a ne
w e-learning
platform that pr
ovides colleagues with access t
o
courses and opportunities t
o keep up t
o dat
e with the
latest de
v
elopments of the Group as w
ell as personal
dev
elopment opportunities. Our new Leadership
Academ
y also inv
ests in colleagues who wish t
o
gro
w within the business and pro
vides them with the
opportunity to shape the polices and futur
e direction o
f
the business.
Our ret
ail confer
ences offer att
endees an opportunity
to celebr
at
e their successes, receiv
e updat
es on how
the Group
’s strategy is pr
ogressing, and f
or them to
judge ho
w the Group is performing via the ‘
Confident or
Concerned’ questionnaire
.
Our monthly nominations for ‘F
rasers Champion
’
pro
vides colleagues with the opportunity t
o individually
recognise and r
ew
ard the hard w
ork of their fello
w
colleagues. W
inners of the monthly champion aw
ar
ds
win an additional month
’s salary as w
ell as 10 points
under the F
earless 1000 bonus scheme. A t
ot
al of 98
colleagues w
ere ‘F
rasers Champions’ in the y
ear
.
There are v
arious colleague incentives av
ailable t
o
our ret
ail colleagues. These incentiv
es include our 5
Star Commission Scheme
, T
urnov
er Bonus, PBT Bonus,
Stockt
ak
e Bonus and other commission schemes. These
schemes v
ary between f
ascias.
F
urther information on r
elationships with our people and
the principal decisions tak
en b
y the Group during the
period having regar
d to colleague in
v
olvement can be
found in the Dir
ectors
’ Report on page 97 and page 13 of
the Our People section.
Div
ersity and Equal Opportunit
ies
The Group
’s recruitment policy is to mat
ch the
capabilities and t
alents of each applicant to the
appropriat
e job. F
actors such as gender
, race
, religion or
belief
, se
xual orientation, age
, disability or ethnic origin
are ignor
ed, and decisions are made with r
egard t
o
candidates irr
espectiv
e of these fact
ors. Discrimination
in any f
orm is not toler
at
ed within the Group
.
Applications for emplo
yment b
y persons with an
y
disability ar
e given full and f
air consideration f
or all
v
acancies and are assessed in accordance with their
particular skills and abilities.
The Group endeav
ours t
o meet its responsibilities
to
wards the tr
aining and emplo
yment of disabled
people, and t
o ensure that tr
aining, career de
v
elopment
and promotion opportunities ar
e av
ailable to all
.
The Group mak
es ev
ery eff
ort to pr
o
vide continuity
of emplo
yment when our people become disabled.
Att
empts are made in e
very cir
cumst
ance to pr
o
vide
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
97
emplo
yment, whether this inv
olves adapt
ing the current
job role and r
emaining in the same job
, or moving
to a mor
e appropriat
e r
ole. Job r
etraining and job
adaptat
ion are just tw
o ex
amples of how the Group
w
orks in the inter
ests of its w
orkfor
ce to pr
omote equal
opportunities, in order that an individual’s emplo
yment
within the Group may continue
. The Group v
alues the
kno
wledge and expertise that our people hav
e gained
throughout their time with us, and ther
efor
e does not
wish to lose v
alued colleagues.
F
urther information on our appr
oach to div
ersity can be
found in the Str
ategic R
eport on page 34.
Business Relationships
Details of our r
elationships with business partners ar
e
detailed in our S
.
172 st
atement, within the
Strat
egic Report.
Resear
ch and De
v
elopment
The Group designs some clothing and footw
ear for our
in-house brands f
or sale in st
ores. The Gr
oup is currently
inv
esting in r
esearch that will enable us t
o produce mor
e
sustainable pr
oducts and processes that will help us
meet our ESG tar
gets.
External br
ands are pur
chased from thir
d-party suppliers,
although w
e do work with them t
o agr
ee on the specific
pieces which w
e sell in-stor
e.
Charit
able and Political Donations
During the y
ear, the Gr
oup made charit
able donations
of £6.6k (2021: £3k) in the UK
. The Group also made
donations in kind such as clothing, sleeping bags and
sports equipment to v
arious organisations and charities.
No political donations w
ere made (2021: nil). F
urther
information on our charit
able donations and community
initiativ
es can be found in our ESG r
eport.
Direct
ors
Details of curr
ent Direct
ors, dat
es of appointment,
their roles, r
esponsibilities and significant ext
ernal
commitments are set out on page 72. The membership
of the Board of Dir
ectors has lar
gely r
emained the
same thr
oughout FY22 with the e
x
ception that Anouska
Kapour who w
as appointed on 29 September 20
21,
subsequently r
esigned on 21 December 2021 due to
a conflict that arose during her t
enure
, and Michael
Murray w
as appoint
ed t
o the Board on 1 May 2022.
Although the Company’s Art
icles of Association requir
e
retir
ement b
y rot
ation of one third of Dir
ect
ors each
y
ear, the Gr
oup complies with the 2018 UK Corpor
ate
Go
vernance Code and at each A
GM all of the Direct
ors
will retir
e and stand f
or reappointment
.
Information on service contr
acts and details of the
inter
ests of the Direct
ors and their persons closely
associated in the shar
e capit
al of the Company at 2
4
April 2022, and at the dat
e of this Report, are sho
wn in
the Direct
ors’ R
emuneration Report on page 77
.
Copies of the service contracts of Ex
ecutive Dir
ectors
and of the appointment letters of the Chair and
Non-Ex
ecutiv
e Direct
ors are av
ailable for inspect
ion at
the Company’s r
egist
ered office during normal business
hours and at the A
GM.
No Direct
or has a direct
orship in common or other
significant links with any other Dir
ect
or
.
Direct
or appointments are go
v
erned b
y the Companies
Act 2006, the 20
18 UK Corporat
e Go
vernance Code and
the Group
’s Articles of Association.
The Direct
ors confirm that:
•
so far as each Dir
ector is aw
are, there is no r
ele
vant
audit information of which the Compan
y’s audit
or is
unaw
are; and
•
the Direct
ors hav
e tak
en all st
eps that they ought
to hav
e taken t
o mak
e themselves aw
are of any
rele
v
ant audit information and t
o establish that the
auditor is aw
are of that information.
Direct
ors’ Conflicts of Int
erest
The Board has formal pr
ocedures t
o deal with Direct
ors’
conflicts of int
erest. The appointment lett
ers of
Non-Ex
ecutiv
e Direct
ors st
ate that the
y agree t
o consult
with the Chair prior to accept
ing any dir
ectorships
in publicly quot
ed companies or any major e
xt
ernal
appointments. Also, if an
y Non-e
x
ecutiv
e Direct
or
becomes aw
are of an
y pot
ential conflict of inter
est, the
Chair and Company Secr
et
ary must be notified as soon
as possible.
During the period, the Chair and the Company Secr
et
ary
w
ere made aw
ar
e of an arising conflict of inter
est in
relation t
o Anousk
a Kapur as a Dir
ector
. As a result of
this conflict, Anousk
a elected t
o st
and down fr
om her
role
. No other conflicts or additional appointments for
other Non-Ex
ecutiv
e Direct
ors became apparent
.
The independence of Non-Ex
ecutiv
e Direct
ors is
re
vie
wed b
y the Board annually
. All Direct
ors complet
e
an annual questionnaire t
o recor
d an
y potential conflicts
of int
erest. No conflicts w
er
e disclosed for the FY22
questionnaire
.
The Company has ent
ered int
o a Relationship
Agreement with M
ike Ashle
y
, whose wholly-o
wned
companies, MASH Holdings Limited and MASH Bet
a
Limited, curr
ently hold appr
o
x. 5.54
% and 6
1.65
%
respectiv
ely of the issued shar
e capit
al of the Company
(e
x
cluding treasury shar
es) as at 2
4 April 2022. This
agreement is described in the Dir
ectors
’ Report on
page 95.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
98
Direct
ors’ Indemnit
ies
The Group has qualifying third-party indemnity
pro
visions within the meaning giv
en t
o the term b
y s234
and s235 of the Companies Act 2006 f
or the Direct
ors.
This is in respect of an
y potential e
xposur
e of liability in
their capacity as a Direct
or of the Compan
y and of any
company within the Gr
oup. Such indemnities w
ere in
for
ce throughout the financial period and will r
emain
in for
ce.
Sports Direct Emplo
yee Bene
fit T
rust
W
e note that the T
rustees of the Sports Dir
ect Emplo
y
ee
Benefit T
rust have w
aived their right t
o receiv
e dividends
on the ordinary shar
es comprised in the trust fund. No
dividends w
ere paid b
y the Compan
y for the period
ended 24 April 2022 nor f
or the period ended
25 April 2021.
Disclosures R
equired Under
UK
Listing
Rule 9
.8.
4
The information r
equired b
y Listing Rule 9
.8.
4 is set out in
the table belo
w:
Applicable sub-paragraph within
LR 9.8.
4
Disclosure pro
vided
(1) Inter
est capitalised b
y the Group
N
/A
(2) Publication of unaudited financial
information
N
/A
(3) Requirement delet
ed from the
Listing Rules
-
(4) Details of long-
term incentiv
e
schemes only inv
olving a Direct
or
N
/A
(5) W
aiver of emoluments by
a Direct
or
N
/A
(6) W
aiver of future emoluments b
y
a Direct
or
N
/A
(7) Non pro-rat
a allotments for cash
(issuer)
N
/A
(8) Non pro-rat
a allotments for cash
(major subsidiaries)
N
/A
(9) Parent participation in a placing
by a list
ed subsidiary
N
/A
(10) Contracts of significance
N
/A
(11) Pro
vision of services by a
controlling shareholder
page 81
(12) Shareholder w
aivers of dividends
page 95
(13) Shareholder w
aivers of
future dividends
N
/A
(14) Agreements with contr
olling
shareholders
page 96
Annual General Meeting
Details on the dat
e
, time and format of the A
GM will
follo
w shortly aft
er the finalisation of this Annual R
eport
and Accounts. Inf
ormation will be easily accessible on
the Group
’s websit
e.
Going Concern
The Group
’s business activities, together with the fact
ors
likel
y to aff
ect its future de
v
elopment, performance and
position are set out in the Chie
f Ex
ecutiv
e’s R
eport and
Business Re
view
.
The financial position of the Group
, its cash flow
s,
liquidity position and borro
wing facilit
ies are described
in the Financial R
evie
w
. In addition, the financial
stat
ements include the Gr
oup
’s objectiv
es, policies
and processes f
or managing its capital
, its financial
risk management objectiv
es, details of its financial
instruments and hedging activities, and its e
xposures t
o
credit risk and liquidity risk.
The Group is pr
ofitable
, highly cash generativ
e and
has considerable financial r
esources. The Gr
oup is able
to oper
at
e within its banking facilities and co
v
enants,
which run until No
vember 20
24 with a tw
o-y
ear option
to e
xt
end, and is w
ell placed to t
ak
e advant
age of
strat
egic opportunities as the
y arise. As a consequence
,
the Direct
ors belie
ve that the Gr
oup is w
ell placed
to manage its business risks successfull
y despite the
continued uncert
ain economic outlook.
Management has assessed the lev
el of trading and has
for
ecast and project
ed a conserv
ative base case and
also a number of ev
en more conservativ
e scenarios,
including taking int
o account the Gr
oup
’s open positions
in relation t
o Hugo Boss options. These for
ecasts and
projections sho
w that the Gr
oup will be able to oper
ate
within the lev
el of the current facility and its co
v
enant
requir
ements (being inter
est co
ver and net debt t
o
EBITD
A ratios). Management also has a number of
mitigating actions which could be t
aken if r
equired
such as putting on hold discretionary spend, liquidating
certain assets on the balance sheet and paying do
wn
the re
v
olving credit facility
. See the Viability Stat
ement
for further det
ails.
Having thoroughl
y re
view
ed the performance o
f the
Group and Par
ent Compan
y and having made suitable
enquiries, the Direct
ors are confident that the Gr
oup and
Parent C
ompany hav
e adequat
e resour
ces to r
emain in
operational e
xist
ence for the for
eseeable future
, which
is at least 12 months from the dat
e of these financial
stat
ements. T
rading would need t
o fall significantl
y
belo
w lev
els observ
ed during the pandemic to r
equire
mitigating actions or a r
elaxation of co
venants.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
99
F
urthermore, as per the outlook st
at
ement, the
Direct
ors are confident o
f achieving an Adjust
ed
PBT of betw
een £450m to £500m during FY
23. On
this basis, the Direct
ors continue t
o adopt the going
concern basis for the pr
eparation of the Annual
Report and F
inancial stat
ements.
Account
ability and A
udit
A stat
ement b
y the Ext
ernal Audit
or can be found on
page 102, det
ailing its reporting r
esponsibilities. The
Direct
ors fulfil their responsibilities, and these ar
e set out
in the Direct
ors’ R
esponsibilities Stat
ement on page 101.
Audit
or
RSM UK Audit LLP will be pr
oposed for reappointment
at the A
GM. In accordance with s
.489(4) of the
Companies Act 2006, r
esolutions t
o determine
remuner
ation are t
o be agreed at the A
GM.
Post Balance Sheet E
v
ents
See note 3
7 to the F
inancial Stat
ements.
F
uture De
v
elopments
F
uture de
velopments ar
e discussed throughout the
Strat
egic Report.
Financial Risk Management
Financial risk management is discussed in not
e 3 of the
financial stat
ements.
By Or
der of the Board
Robert Palmer
Company Secr
et
ary
20 Sept
ember 2022
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
100
DIRE
CT
ORS’ RESPONSIBILITY
ST
A
TEMENT
The Direct
ors are r
esponsible for preparing the
Strat
egic Report and the Dir
ectors
’ Report, the
Direct
ors’ R
emuneration Report, the separ
ate C
orporat
e
Go
vernance St
at
ement and the financial stat
ements in
accordance with applicable law and r
egulations.
Company law r
equires the Dir
ect
ors to pr
epare
Group and Compan
y financial st
atements f
or each
financial y
ear
. The Directors hav
e elect
ed under
company law and ar
e requir
ed under the Listing Rules
of the Financial Conduct A
uthority to pr
epare Gr
oup
financial stat
ements in accor
dance with UK
-adopted
Internat
ional Accounting St
andards. The Dir
ectors hav
e
elected under compan
y law t
o prepar
e the Company
financial stat
ements in accor
dance with United
Kingdom Gener
ally Accept
ed Accounting Pr
actice
(United K
ingdom Accounting St
andards and
applicable law).
The Group financial st
atements ar
e requir
ed b
y law and
UK
-adopted Int
ernational Accounting St
andards t
o
present f
airly the financial position and performance of
the Group; the Companies A
ct 2006 pro
vides in relation
to such financial st
at
ements that ref
erences in the
rele
v
ant part of that Act t
o financial stat
ements giving a
true and fair vie
w are r
efer
ences to their achie
ving a
fair pr
esentation.
Under company law the Dir
ect
ors must not appro
v
e the
financial stat
ements unless the
y are s
atisfied that they
giv
e a true and fair vie
w of the stat
e of affairs of the
Group and the Compan
y and of the pro
fit or loss of the
Group f
or that period.
In preparing each of the Gr
oup and Company financial
stat
ements, the Dir
ectors ar
e requir
ed to
:
A.
select suitable accounting policies and then apply
them consistentl
y;
B.
make judgements and accounting est
imates that
are r
easonable and prudent;
C.
for the Gr
oup financial stat
ements, st
ate whether
they hav
e been prepared in accordance with
UK
-adopted Int
ernational Accounting St
andards;
D.
for the Compan
y financial stat
ements, st
ate
whether applicable UK accounting st
andards
hav
e been follo
w
ed, subject to an
y mat
erial
departures disclosed and e
xplained in the
Company financial st
at
ements;
E.
prepar
e the financial stat
ements on the going
concern basis unless it is inappropriat
e t
o presume
that the Group and the Compan
y will continue
in business.
The Direct
ors are r
esponsible for k
eeping adequate
accounting recor
ds that are sufficient t
o sho
w and
explain the Gr
oup
’s and the Compan
y’s trans
actions
and disclose with reasonable accur
acy at any time the
financial position of the Group and the Compan
y and
enable them to ensur
e that the financial st
atements
and the Direct
ors’ R
emuneration Report compl
y with
the Companies Act 2006. The
y are also r
esponsible for
safeguar
ding the assets of the Group and the C
ompany
and hence for t
aking reasonable st
eps for the pr
ev
ention
and detect
ion of fraud and other irr
egularities.
Direct
ors’ St
atement Pursuant t
o the
Disclosure and T
ransparency R
ules
Each of the Dir
ectors, whose names and functions ar
e
listed on pages 72 t
o 7
4 confirm that, to the best of each
person
’s kno
wledge:
A.
the financial stat
ements, prepar
ed in accordance
with the applicable set of accounting st
andards,
giv
e a true and fair vie
w of the assets, liabilities,
financial position and profit of the C
ompany and
the undertakings included in the consolidat
ion tak
en
as a whole; and
B.
the Strat
egic Report cont
ained in the Annual
Report includes a fair r
evie
w of the de
v
elopment
and performance of the business and the position
of the Compan
y and the undertakings included in
the consolidation t
aken as a whole
, together with a
description of the principal risks and uncert
ainties
that they f
ace.
The Direct
ors are r
esponsible for the maint
enance and
integrity o
f the corporat
e and financial information
included on the Company’s w
ebsite.
Legislation in the Unit
ed Kingdom go
verning the
prepar
ation and dissemination of financial st
atements
may differ fr
om legislation in other jurisdictions.
Chris W
ootton
Chief Financial Officer
20 Sept
ember 2022
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
101
INDEPENDENT A
UDIT
OR’S
REPOR
T T
O THE MEMBERS OF
FRASERS GR
OUP PL
C
Opinion
W
e have audit
ed the financial st
atements of F
rasers
Group Plc (the ‘
parent compan
y’) and its subsidiaries
(the ‘
Group
’) for the period ended 2
4 April 2022 which
comprise the Consolidat
ed Income Stat
ement, the
Consolidat
ed Stat
ement of Comprehensiv
e Income, the
Consolidat
ed Balance Sheet, the Consolidated Cashflo
w
Stat
ement, the Consolidat
ed St
atement of Changes
in Equity
, the Compan
y Balance Sheet, the Company
Stat
ement of Changes in E
quity and notes t
o the
financial stat
ements, including a summary of significant
accounting policies. The financial reporting fr
ame
work
that has been applied in the prepar
ation of the Group
financial stat
ements is applicable law and Unit
ed
Kingdom adopt
ed Internat
ional Accounting St
andards.
The financial reporting fr
amew
ork that has been applied
in the prepar
ation of the parent compan
y financial
stat
ements is applicable law and Unit
ed Kingdom
Accounting St
andards including F
inancial Reporting
Standar
d 102 “The Financial Reporting St
andard
applicable in the UK and Republic of Ir
eland” (United
Kingdom Gener
ally Accept
ed Accounting Pr
actice).
In our opinion:
•
the financial stat
ements giv
e a true and fair vie
w
of the stat
e of the Gr
oup
’s and of the parent
company’s aff
airs as at 24 April 2022 and of the
Group
’s profit for the period then ended;
•
the Group financial st
at
ements have been pr
operly
prepar
ed in accordance with Unit
ed Kingdom
adopted Int
ernational A
ccounting Standar
ds;
•
the parent compan
y financial st
atements hav
e
been properly pr
epared in accor
dance with Unit
ed
Kingdom Gener
ally Accept
ed Accounting Pr
actice;
and
•
the financial stat
ements hav
e been prepar
ed
in accordance with the r
equirements of the
Companies Act 2006.
Basis for Opinion
W
e conducted our audit in accor
dance with
Internat
ional Standar
ds on Auditing (UK) (ISAs (UK)
and applicable law
. Our responsibilities under those
standar
ds are further described in the A
uditor’s
responsibilities f
or the audit of the financial stat
ements
section of our report
. W
e are independent of the
Group and par
ent company in accor
dance with the
ethical requir
ements that are r
elev
ant t
o our audit
of the financial stat
ements in the UK, including the
FRC’s E
thical Standar
d as applied to list
ed public
inter
est entities and w
e hav
e fulfilled our other ethical
responsibilities in accor
dance with these requir
ements.
W
e believ
e that the audit evidence w
e have obt
ained is
sufficient and appropriat
e t
o pro
vide a basis for
our opinion.
Our opinion is consistent with our r
eporting t
o the
Audit Committ
ee.
Summary of Our Audit Appr
oach
Ke
y audit matters
Group – Recurring risks
•
V
aluation of invent
ory.
•
Impairment of property
relat
ed assets.
•
Property
, Legal and
Other Pro
visions.
Group – e
vent driv
en risks
•
Impairment of Studio Retail
trade receiv
ables.
•
Accounting for the acquisition
of the trade and cert
ain assets
of Studio Retail Gr
oup.
Materiality
Group
•
Over
all materiality: £17
.0million.
•
Performance mat
eriality:
£11.0million.
Parent Compan
y
•
Over
all materiality: £5.
4million.
•
Performance mat
eriality:
£3.5million.
Scope
Our Group audit procedur
es
cov
ered 83
% of rev
enue, 86
%
of tot
al assets and 91% of profit
befor
e tax.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
102
Ke
y Audit Matt
ers
Ke
y audit matt
ers are those matt
ers that, in our professional judgment, w
ere of most significance in our audit of the
Group and par
ent company financial st
at
ements of the current period and include the most significant assessed risks
of mat
erial misstat
ement (whether or not due t
o fraud) w
e identified, including those which had the great
est eff
ect on
the o
ver
all audit strat
egy
, the allocation of resour
ces in the audit and directing the e
fforts of the engagement t
eam.
These matters, and an
y comments w
e make on the r
esults of our procedur
es thereon, w
er
e addressed in the cont
ext of
our audit of the Group and par
ent company financial st
at
ements as a whole, and in f
orming our opinion thereon, and
w
e do not pro
vide a separat
e opinion on these matt
ers. This is not a complete list of all risks identified b
y our audit.
V
aluation of invent
ory
Ke
y audit matter description
At 24 April 2022, the Gr
oup Consolidated Balance Sheet r
ecords inv
ent
ory of £1,277
.6m (2021: £1,
096.6m). This
amount is net of an inv
entory pr
ovision of £236.
7m (2021: £219
.8m).
As described in note 2 t
o the financial stat
ements, management use a forw
ard looking inv
ent
ory provisioning model
which calculates a pr
ovision b
y category of in
vent
ory based on historical e
xperience, pricing and discounting
strat
egies and management’s assessment of risk.
There is significant estimation inv
olved in the calculation o
f invent
ory pro
visions to ensur
e that inv
entory is held at
the low
er of cost and net realis
able value
. This involv
es consideration of e
xpected futur
e losses on sale of inv
entory
including assessing the likely impacts o
f macro-economic fact
ors, inv
entory obsolescence and the additional costs
to sell which need t
o be included in calculating the net realisable v
alue of inv
ent
ory.
Due to the f
actors e
xplained abov
e, w
e have identified the v
aluation of inv
ent
ory as a ke
y audit matter
.
How the matt
er was addr
essed in
the audit
In respect of inv
ent
ory valuation w
e:
•
Assessed the appropriat
eness of management’s invent
ory pro
vision calculations, including testing the accur
acy
and completeness of the dat
a used and the mathematical accuracy of the pr
ovisioning model.
•
Critically challenged the assumptions made in the inv
ent
ory provision model in r
espect of the expect
ed lev
el of
discounting and the expect
ed costs of sale, including:
•
The basis on which expect
ed discounts wer
e calculated and whether calculat
ed discounts wer
e realistic
based on historical e
xperience and the current trading en
vironment.
•
The assumptions regarding the e
xpected v
olume and allocated costs o
f redistributing (tunnelling) and
repricing product
.
•
Whether different assumptions and est
imates should be applied for diff
erent fascias giv
en the
differentiat
ed product mix.
•
Considered management’s strat
egic options for addressing demand in the uncert
ain ret
ail economic
environment r
esulting from curr
ent macro-economic fact
ors, including discounting lev
els and further
dev
elopment of on-line ret
ail channels.
As a result of our findings fr
om challenging management’s model, we independently de
veloped an alt
ernativ
e
model that applied historic in
vent
ory loss experience t
o calculate a pr
ovision against curr
ent out of season and
clearance inv
ent
ory and inv
entory that w
ould be expect
ed to r
emain unsold and fall into those cat
egories in future
periods. In addition, w
e recalculated the e
xpected futur
e tunnelling and repricing costs t
o tak
e account of our
assessment of the likel
y future costs of these activities in relation t
o products that w
ould hav
e a net realisable v
alue
which was belo
w cost.
W
e then formed an assessment, based on discussions with management and av
ailable mark
et data, t
o reflect the
expect
ed impact of current macro-economic f
actors and e
xpected changes in cust
omer disposable income. This
included consideration of for
ecast future sales perf
ormance, e
xpected margin decline
, the increased risk of inv
ent
ory
becoming out of season and adjustments considered r
elev
ant for specific fascias, where the risk o
f invent
ory
obsolescence was consider
ed to be higher
. Our alternativ
e model allow
ed us t
o dev
elop an estimate of the le
vel of
pro
vision we consider
ed appropriat
e and supportable against which w
e wer
e able to assess management’s estimat
es.
Ke
y observations
Our audit work on in
vent
ory valuat
ion, and in particular the dev
elopment of our own alt
ernativ
e provision model
, did
not identify any mat
erial misstat
ement in the valuation of in
vent
ory
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
103
Impairment of property relat
ed assets
Ke
y audit matter description
As a result of the macr
o-economic factors, r
eduction in consumer disposable income and changing patterns of r
etail
consumer behaviour, part
icularly in relation t
o physical st
ores, the Gr
oup identified that there w
ere indications of
impairment in relation t
o freehold property int
erests, right of use assets and r
elated PPE (“
property relat
ed assets”).
As required b
y IAS 36 (Impairment of Assets) the Gr
oup has performed an impairment re
view of all such assets.
As a result of this r
eview
, impairments in relat
ion to freehold pr
operty (£106.5m), right of use assets (£7
6.8m) and
relat
ed PPE (£40.7
m) hav
e been made in these financial stat
ements.
As described in note 2 t
o the financial stat
ements, the impairment re
view inv
olves management judgements and
estimates in r
elation to the v
alue in use of the property r
elated assets (being the net present v
alue of the for
ecast
relat
ed cashflows) and, in the case of fr
eehold property
, comparison of calculated v
alue in use to int
ernal and
ext
ernal property v
aluations. The values deriv
ed are then compar
ed to the book v
alue of the relat
ed assets to
determine whether impairment is r
equired. In making this assessment management determined each pr
operty or
stor
e to be a cash generat
ing unit (CGU).
The value in use calculations in
volv
e significant assumptions regarding futur
e cashflows, the long t
erm gro
wth rat
e in
like f
or like sales, an assessment of the pr
opensity for cust
omers to swit
ch to online pur
chases, pressure on mar
gins
and determination of an appr
opriate discount r
ate and an assessment of the lik
ely impact of high inflation and
reduced consumer disposable income
. In the case of freehold pr
operty, v
aluations are dependent on assumptions
regarding the ability t
o relet pr
operty, the length of v
oid and rent fr
ee periods and future rent
als achiev
able.
Accordingl
y we det
ermined that the valuation of pr
operty relat
ed assets had a high degree of estimation uncert
ainty
.
Due to the f
actors e
xplained abov
e, w
e have identified v
aluation, present
ation and disclosure of pr
operty relat
ed
assets as a ke
y audit matter
.
How the matt
er was addr
essed in
the audit
W
e obt
ained an understanding of ho
w management performed their impairment test
ing of property relat
ed assets
and their approach t
o valuation.
W
e critically assessed the methodology applied b
y management with re
ference t
o the requirements of IAS 36 and
test
ed the integrity of the v
alue in use calculations and the calculat
ed impairments by CGU
.
In the case of freehold pr
operty, in addition t
o assessing the value in use calculations, w
e ev
aluat
ed the approach
to the v
aluation of freehold int
erests with input fr
om an independent ext
ernal retail pr
operty valuation e
xpert and
critically challenged the underlying assumptions.
In particular we challenged the significant assumpt
ions within management’s models through:-
•
Ev
aluating management’s assumptions through consider
ation of historical and curr
ent trading performance and
ext
ernal data points.
•
Sensitised the assumptions in management’s impairment models.
•
T
ested the reconciliat
ion between the cashflo
ws used in the v
alue in use calculations with those used to assess
going concern and viability to ensur
e they w
ere consist
ent.
•
Critically challenging whether it w
as appropriat
e to e
xclude pr
operties from the impairment model and assessing
whether the reasons for e
x
clusion wer
e supportable – for e
xample wher
e specific properties w
ere
under rede
velopment.
•
Challenging whether pre
vious impairments should be rev
ersed.
•
Comparing the discount rat
e used with that independently calculated b
y our int
ernal valuation e
xpert.
W
e assessed whether the disclosures within the financial st
atements ar
e consistent with IAS 36
.
Ke
y observations
Our audit work in r
espect of the impairment of property r
elated assets concluded that the relat
ed balances w
ere not
materially misst
ated and the disclosur
es management have made ar
e appropriat
e.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
104
Property
, Legal and Other Provisions
Ke
y audit matter description
The Gr
oup makes pro
vision for liabilities wher
e it identifies there is a present obligat
ion as a result of a past ev
ent
and where it is probable that ther
e will be a result
ant outflow of r
esources that can be reliabl
y measured.
The Group has a significant pro
vision in relation t
o legal and regulat
ory matters and property r
elated pr
ovisions.
As detailed in not
e 29 to the financial st
atements, the Consolidat
ed Balance Sheet includes pro
visions of £230.2m
(FY21: £215.8m) r
elating to legal and r
egulatory matt
ers, £161.2m (2021: £144
.
1m) relating t
o property pro
visions which
principally comprise pro
visions for dilapidations on leasehold pr
operties and £41.6m (2021: £nil) r
elating to the
financial services business of Studio Retail
.
The dilapidation pro
vision requires significant judgements t
o be made as to futur
e amounts payable based on
historical e
xperience, e
xternal advice and e
volving conditions within the property sect
or
.
Additionally
, the Group faces a number of legal, t
ax and other commercial claims and significant judgement is
required in det
ermining whether a pro
vision should be recor
ded and for what amount.
As a result of the Gr
oup’s acquisition o
f Studio Retail it has r
ecognised a provision o
f £41.6m in respect o
f a matter
which is subject to a high degr
ee of estimation uncertainty
. This is discussed further in the k
ey audit matter dealing
with the acquisition of trade and cert
ain assets of Studio Retail Gr
oup and in note 29 t
o the financial stat
ements.
Due to the amounts in
volv
ed and the significant judgements required in quantifying and assessing pr
ovisions
we hav
e identified e
xistence, accur
acy, complet
eness, present
ation and disclosure of property legal and other
pro
visions as a ke
y audit matter
.
How the matt
er was addr
essed in
the audit
Our audit work included the f
ollowing:
•
Considering management’s assessment in respect of pro
visions and assessing whether the recognition crit
eria of
IAS 37 – Pro
visions, Contingent Liabilities and Contingent assets had been met.
•
Challenging the assumptions made in the dilapidation pro
vision model in respect of the e
xpected le
vel of
dilapidations on a stor
e by st
ore basis. As a r
esult of our findings from challenging management’s model, w
e
independently dev
eloped an alt
ernative model that applied hist
oric dilapidation costs and rele
vant f
actors
such as geograph
y and property type as w
ell as considering the impacts of likely futur
e changes in the property
market. Our alt
ernativ
e model allow
ed us to de
v
elop an estimate of the le
vel of pr
ovision w
e considered
appropriat
e and supportable against which w
e wer
e able to assess management’s estimat
es.
•
Challenging pro
visions and relat
ed assumptions with ke
y management outside the finance function, including
members of the property and legal t
eams and obtaining corr
oborativ
e evidence from thir
d parties in relation t
o
material ongoing legal and t
ax matters.
•
Auditing the mo
vement in pr
ovisions and checking for complet
eness through the r
evie
w of ongoing claims for
dilapidations and through cir
cularisation of legal advisors in relation t
o other claims.
Ke
y observations
Our audit work in r
espect of Property
, legal and other pro
visions concluded that the relat
ed balances wer
e not
materially misst
ated, albeit subject t
o a high degree of estimat
ion uncertainty as regar
ds the Studio ret
ail provision,
and the disclosures management hav
e made are appropriat
e.
Impairment of Studio Ret
ail trade receiv
ables
Ke
y audit matter description
Frasers Gr
oup acquired Studio Ret
ail Limited (SRL) on 2
4 February 20
22.
SRL has significant trade receiv
ables as a result of cr
edit facilities which are o
ffered t
o customers. These ar
e
reco
ver
ed through inst
alments. These trade receiv
ables make up a significant pr
oportion of Fr
asers Group
’s tot
al
assets at 24 April 2022. An appr
opriate allo
wance f
or expect
ed credit losses in respect of these tr
ade receiv
ables is
required t
o be deriv
ed from estimat
es and underlying assumptions such as the Probability of Def
ault and the Loss
Given De
fault, taking int
o consideration forw
ard looking macro-economic assumptions. Changes in the assumptions
applied such as the value and fr
equency of future debt sales in calculating the Loss Giv
en Def
ault, and the
estimation of customer r
epayments and Probability of Def
ault rates, as w
ell as the w
eighting of the macroeconomic
scenarios applied to the impairment model could hav
e a significant impact on the carrying value o
f these trade
receiv
ables.
W
e det
ermined that credit risk is a highly judgement
al area due t
o the use of subjective assumptions and a high
degree of estimation uncert
ainty
. The impairment provision r
elating to the Studio R
etail trade r
eceivables r
equired
the Direct
ors to mak
e judgements ov
er the ability of customers t
o make futur
e repayments. Since the r
ecov
erability
of trade receiv
ables has a high degree of est
imation uncertainty
, with a potential r
ange of possible outcomes, w
e
consider this to be a k
ey audit matt
er
.
How the matt
er was addr
essed in
the audit
Our audit work in r
elation to the acquir
ed trade receiv
ables within SRL included:-
•
Revie
wing the w
ork of the component auditor in assessing the design and implement
ation, and testing the
operating eff
ectiveness, of the k
ey contr
ols in relation t
o the impairment and pro
vision model and forming our
own assessment based on this r
evie
w and discussions with management.
•
Assessing the ov
erall methodology against the r
equirements of IFRS 9
.
•
Revie
wing the w
ork of the component auditor in performing t
esting on the data within the model and v
erifying
this to underlying sour
ce documentation. Utilising e
xperts to assist the audit t
eam in assessing the v
alidity of
the model and challenging management’s forecasting and w
eighting of ke
y model driv
ers (macro-economic
variables) and e
xpected futur
e debt sale prices (ultimat
e recov
eries).
Ke
y observations
Based on the work performed, w
e considered the methodologies and modelled assumptions used t
o value tr
ade
receiv
ables expect
ed credit losses t
o be reasonable and in line with IFRS 9
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
105
Acquisition of the trade and cert
ain assets (including credit impaired assets) of St
udio Retail Gr
oup
Ke
y audit matter description
On 2
4 February 2022, the Gr
oup acquired digit
al retailer
, Studio Ret
ail Limited (SRL) and cert
ain other assets of
Studio Retail Gr
oup plc (in administration) (SR
G). The consideration for the tr
ansaction, which t
otalled £28.3m,
comprised of cash and the release of SR
G from its liabilities t
o the lending banks under its rev
olving credit facilit
ies.
The Company also agreed t
o act as guarant
or of certain payments in r
espect of the SRG gr
oup pension scheme to
the satisfaction of the T
rustees. Det
ails of the acquisition are giv
en in note 32 t
o the financial stat
ements.
Judgement is applied by management in assessing the f
air value of the assets and liabilities acquir
ed in the business
combination, including any int
angibles in accordance with IFRS 13: F
air V
alue Measurement.
Management have applied a number of k
ey judgements and est
imates in order t
o account for this acquisition in
both the Group and parent compan
y financial stat
ements in accordance with IFRS 3 Business Combinations and
FRS 102 Section 19. These include:
•
Considering whether this constitutes a st
ep acquisition on the basis of the Group
’s holding in SRG
pre administrat
ion.
•
Considering whether the debt purchase is a separ
ate trans
action.
•
Determining the carrying v
alue of net assets in the acquisition balance sheet of SRL, in particular relat
ing to the
carrying value of tr
ade receiv
ables.
•
Determining the f
air values assigned t
o determine the separat
ely identifiable int
angibles at the acquisition date
.
•
Determining an
y other fair v
alue adjustments required at the acquisition dat
e and the quantum of these,
including specifically in relation t
o the purchase of cr
edit impaired assets.
•
Estimating the pro
vision requir
ed at acquisition in relation t
o the ongoing revie
w of probable r
emediation actions
required in r
espect of past lending and collection activities and re
ferred t
o in note 29
.
Due to the natur
e of the judgements and estimates in
volv
ed and in particular the estimation uncertainty r
elating
to the costs of r
emediation, we hav
e identified business combination and acquisition accounting t
ogether with
accounting for credit impair
ed assets as a ke
y audit matter f
or both the accuracy and valuat
ion assumptions.
How the matt
er was addr
essed in
the audit
Our audit work in r
elation to the acquisition accounting included:
•
Obtaining and r
evie
wing management’s acquisition accounting paper in relation to the acquisition o
f SRL
to v
erify that the treatment of the acquisition entries and an
y fair v
alue adjustments are appropriat
e and in
accordance with IFRS 3 Business Combinations and FRS 102 Section 19
.
•
Concluding that the conditions for r
ecognising a step acquisition w
ere absent giv
en that the Group
’s shares in
Studio Retail plc became w
orthless at the dat
e of that company’s administrat
ion.
•
Checking accounting entries to pur
chase and other agreements and bank st
atements.
•
Performing t
esting on the net assets at the acquisition date including on the e
xpected cr
edit loss pro
visions in
respect of SRL
’s trade receiv
ables.
•
Critically challenging management’s judgements in relation t
o fair v
alue adjustments and recognition of
separat
ely identifiable intangible assets.
•
Revie
wing and challenging management assumptions and estimat
es applied in accounting for the Purchase of
Credit Impaired Assets (tr
ade receiv
ables) in accordance with IFRS 9
.
•
Revie
wing and challenging the methodology adopted b
y management in det
ermining the initial estimate of the
pro
vision recognised under IFRS 3 in relation t
o potent
ial liabilities arising from the re
view described in not
e 29 to
the financial stat
ements.
•
Inspecting financial stat
ement disclosures in r
elation to the acquisition and considering in particular the
adequacy of the disclosure and sensitivities applied in r
elation to the r
ecognition of pro
vision referr
ed to abo
ve
.
Ke
y observations
W
e found the approach to accounting f
or the acquisition, including the judgements made in the recognition and
valuation of acquir
ed assets and liabilities to be accept
able.
In relation t
o the pro
vision recognised in connection with the ongoing re
view of pr
obable remediation actions
required in r
espect of past lending and collection activity and re
ferred t
o in note 29
, we consider the appr
oach
adopted b
y the Group in making a pr
ovisional estimat
e, in accordance with IFRS 3
, of the quantum of pro
vision and
the associated disclosur
e to be reasonable but dr
aw attention t
o the high degree of estimation uncert
ainty with
a potential r
ange of reasonably possible out
comes great
er than our materiality for the financial st
atements as a
whole and possibly many multiples o
f that amount.
There are no k
ey audit matters r
elating to the par
ent compan
y
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
106
Changes t
o Ke
y Audit Matters
In the prior y
ear we r
eport
ed a ke
y audit matter in r
espect of the impact of the Co
vid 19 pandemic and going concern
in the light of the uncertaint
ies surrounding the impact of the pandemic on the r
etail sect
or
. Ho
we
v
er
, due to the UK’s
reco
v
ery from the pandemic and the str
ong performance of the business in the post pandemic period. W
e have not
deemed going concern to be a k
e
y audit matter although it r
emains an area of f
ocus in the audit.
W
e also included, in the prior year
, a k
ey audit matt
er regar
ding the classification of in
vestments wher
e the Group
held more than 20% but less than 50% of the v
oting share capital of the in
v
estee but wher
e the Group had r
ebutted
the presumption that significant influence e
xist
ed. Since the only remaining such in
v
estment at the period end w
as in
Mulberry Group plc (36.
9%) which has a significant shareholder with a beneficial int
erest in e
x
cess of 55% of v
oting
share capit
al, w
e no longer consider our assessment of management’s judgements in this area t
o be a k
ey audit matt
er
.
Our Application of Mat
eriality
When establishing our o
v
erall audit str
at
egy, w
e set cert
ain thresholds which help us t
o det
ermine the nature
, timing
and ext
ent of our audit pr
ocedures. When e
v
aluating whether the effects of misst
at
ements, both individually and
on the financial stat
ements as a whole
, could reasonably influence the economic decisions of the users w
e take
into account the qualit
ativ
e nature and the siz
e of the misst
at
ements. Based on our prof
essional judgement, we
determined mat
eriality for the financial st
at
ements as follo
ws:
Group
Parent compan
y
Over
all materiality
£17
.0 million (2021: £11.
1million)
£5.
4million (2021: £11.0million)
Basis for det
ermining ov
erall mat
eriality
5% of profit be
fore t
ax (2021: 2.8% of
underlying EBITD
A)
1% of tot
al assets (capped at an allocation of
ov
erall Gr
oup materiality)
Rationale for benchmark applied
During the year the Group changed the basis
on which market guidance w
as giv
en to a pro
fit
befor
e tax based measure (
adjusted pr
ofit before
tax) r
ather than the underlying EBITD
A measure
applied pre
viously on the basis that a measure
which included the impact of depreciation,
amortisation and IFRS 16 w
as more appr
opriate
given the Gr
oup
’s increased inv
estment
in properties.
W
e applied a lo
wer le
vel of mat
eriality to the audit
of components and, in accordance with ISA 320
, in
relation t
o certain classes of tr
ansactions, account
balances and disclosures.
The Parent Compan
y does not trade and
theref
ore tot
al assets is considered t
o be the most
appropriat
e benchmark.
Performance mat
eriality
£11.0m (2021: £7
.2m)
W
e set performance mat
eriality at a lev
el
low
er than o
ver
all materiality for the financial
stat
ements as a whole to r
educe to an
appropriat
ely low le
vel the pr
obability that,
in aggregat
e, uncorrect
ed and undetect
ed
misstat
ements ex
ceed o
ver
all materiality
.
The factors w
e considered in det
ermining
performance mat
eriality included; our knowledge
of the Group, the pr
essures within the r
etail sect
or
and the lev
el of misstat
ements in prior periods.
£3.5m (2021: £7
.1m)
W
e set performance mat
eriality at a lev
el
low
er than o
ver
all materiality for the financial
stat
ements as a whole to r
educe to an
appropriat
ely low le
vel the pr
obability that,
in aggregat
e, uncorrect
ed and undetect
ed
misstat
ements ex
ceed o
ver
all materiality
.
The factors w
e considered in det
ermining
performance mat
eriality included; our knowledge
of the Group, the pr
essures within the r
etail sect
or
and the lev
el of misstat
ements in prior periods.
Basis for det
ermining performance mat
eriality
65% of ov
erall mat
eriality (2021; 65% of
ov
erall mat
eriality)
65% of o
ver
all materiality (2021: 65% of
ov
erall mat
eriality)
Reporting of misst
atements t
o the
Audit Committee
Misstat
ements in ex
cess of £0.85million and
misstat
ements below that thr
eshold that, in our
view
, w
arranted r
eporting on qualitativ
e grounds
.
Misstat
ements in ex
cess of £0.56million and
misstat
ements below that thr
eshold that, in our
view
, w
arranted r
eporting on qualitativ
e grounds
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
107
An Ov
ervie
w of the Scope of
Our
Audit
Our audit approach w
as based on a thor
ough
understanding of the Gr
oup
’s business and is risk based,
and in particular included:
•
E
valuation o
f identified components to assess the
significance of each component and to det
ermine
the planned audit response based on a measur
e
of materiality
. This included significance as a
percent
age of the Group
’s re
venue
, tot
al assets and
adjusted pr
ofit bef
ore t
ax;
•
F
or those components that w
ere e
v
aluat
ed as
significant, or likel
y to include significant risks,
either a full-scope or tar
get
ed approach w
as t
aken
based on their relativ
e mat
eriality t
o the Group,
and our assessment of the audit risk. F
or significant
components requiring a full-scope appr
oach, w
e
ev
aluat
ed controls o
v
er the financial reporting
sy
stems identified as part of our risk assessment
and addressed critical accounting matt
ers.
Substant
ive t
esting w
as performed on significant
classes of trans
actions and balances, and other
material balances, det
ermined during the Gr
oup
scoping ex
ercise;
•
F
ull scope audit procedures hav
e been performed
on the financial stat
ements of F
rasers Gr
oup
plc, and on the financial information of the main
trading companies within the UK Ret
ail component;
(Sportsdir
ect.com R
etail Limit
ed, W
areshop 2
Limited, Sports Dir
ect Int
ernational Holdings Limited,
House of Fr
aser Limit
ed, The Flannels Group
Limited), and on the SDI Pr
operty component and
GAME Ret
ail Limit
ed.
•
In relation t
o the significant o
v
erseas component in
Spain and the Internat
ional component; comprising
Austria, Belgium, Ir
eland and the United St
at
es, we
engaged RSM member firms to perf
orm full scope
component audits. Additionally
, RSM member firms
attended in
v
entory counts in a number of locations;
•
In relation t
o Studio Ret
ail Limit
ed, component
auditors w
ere engaged to perf
orm full scope audit
procedur
es cov
ering the post acquisition period.
•
The Group engagement t
eam re
view
ed the
w
ork performed b
y the component audit
ors. W
e
determined the le
v
el of inv
ol
v
ement w
e needed to
hav
e in their audit work at those r
eporting units t
o
be able to conclude whether sufficient, appr
opriat
e
audit evidence had been obt
ained as a basis for our
opinion on the Group financial st
at
ements as
a whole.
•
F
urther specific audit procedures o
ver the Group
consolidation and areas of significant judgement
including impairment of property r
elated assets,
leases, tax
ation and treasury wer
e performed b
y the
Group engagement t
eam.
The operations that w
ere subject t
o full-scope audit
procedur
es made up 82% of consolidated r
e
venues,
84
% of tot
al assets and 91% of pr
ofit befor
e tax.
The operations that w
ere subject t
o t
arget
ed audit
procedur
es made up 1% of consolidated r
e
venues, 2% of
tot
al assets and 0% of pr
ofit befor
e tax; and
The remaining operat
ions of the Group w
ere subject
to anal
ytical procedur
es o
ver the balance sheet and
income stat
ements of the r
elev
ant entities with a f
ocus
on applicable risks identified abo
ve
. This made up 17%
of consolidat
ed re
venues, 1
4% of t
ot
al assets and 9% of
profit be
fore t
ax.
The cov
er
age achiev
ed b
y our audit procedur
es w
as:
F
ull scope audits wer
e performed f
or 7 components
(some of which included a number of legal entities which
w
ere combined for gr
oup reporting purposes), t
ar
geted
audit procedur
es for 7 components and analytical
procedur
es at group le
v
el for the remaining components
.
Number of
components
Re
venue
T
ot
al assets
Profit
befor
e tax
Full scope
audit
7
82%
84%
91%
T
argeted audit
procedures
7
1%
2%
0%
T
otal
14
83%
86%
91%
Analytical pr
ocedures at gr
oup lev
el w
ere perf
ormed for
the remaining components.
The Group t
eam visited tw
o component locations
in the UK and attended video conf
erence calls and
performed r
emote file r
evie
ws f
or components in
Austria, Belgium, Ir
eland, Spain, the UK and the USA.
At these meetings the findings r
eported t
o the Group
team w
ere discussed in more det
ail, and an
y further
w
ork requir
ed by the Gr
oup t
eam w
as then performed
b
y the component auditor
.
The parent compan
y w
as subject to a full scope audit
for the purposes of the Gr
oup and Parent Compan
y
financial stat
ements.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
108
The Impact of Climate Change on the A
udit
In planning our audit w
e have consider
ed the pot
ential
impact of the risk arising from climat
e change on the
Group
’s business and its financial stat
ements.
F
urther information on the Gr
oup
’s commitments is
pro
vided in the Group
’s T
ask For
ce for Climat
e-Relat
ed
Financial Disclosur
es (“T
CFD”) disclosur
es on page 40.
As part of our audit w
e hav
e performed a risk
assessment, including making enquiries of management,
reading boar
d minutes and appl
ying our knowledge of
the Group and the sect
or within which it operat
es, t
o
understand the e
xt
ent of the potent
ial impact of climate
change on the Group
’s financial stat
ements. T
aking
account of the nature of the business and the e
xt
ent
of the headroom in impairment t
esting. W
e have not
assessed climate r
elat
ed risk to be significant t
o our
audit. There w
as no impact on our key audit matt
ers.
W
e have r
ead the Group
’s T
CFD and considered
consistency with the financial st
at
ements and our
audit kno
wledge.
W
e have not been engaged t
o pro
vide assur
ance ov
er
the accuracy of the climat
e risk disclosures set out on
pages 40 to 4
5 in the Annual Report.
Conclusions Relating t
o Going Concern
In auditing the financial st
atements, w
e hav
e concluded
that the Direct
ors’ use of the going concern basis
of accounting in the prepar
ation of the financial
stat
ements is appr
opriate
.
Our ev
aluation of the Dir
ectors
’ assessment of the
Group
’s and parent company’s ability t
o continue t
o
adopt the going concern basis of accounting included:-
•
Obtaining an underst
anding of management’s
going concern models, discussing ke
y assumptions
with management and assessing whether those
assumptions w
ere consist
ent with those applied
elsewher
e, such as in r
elation t
o inv
ent
ory valuation
and the assessment of property r
elated pr
o
visions.
•
Checking the mathematical accuracy of
management’s cashflow models, and agr
eeing
opening balances to 2
4 April 2022 actual figur
es.
•
Checking management’s cov
enant compliance
calculations t
o determine whether ther
e is a risk
of breach and assessed whether the assumptions
in management’s base model appeared realistic,
achiev
able and consist
ent with other int
ernal and
ext
ernal e
vidence.
•
Comparing for
ecast sales with r
ecent historical
information t
o consider the accuracy of f
orecasting
.
•
Considering post y
ear end sales patt
erns to assess
whether they w
ere consistent with those assumed in
the base model.
•
Critically assessing and t
esting management’s
sensitivity analysis and perf
orming our o
wn analysis
based on further sensitising of the models t
o tak
e
account of reasonabl
y possible scenarios that could
arise from the risks identified.
•
Challenging management regarding their
identification of discret
ionary spend that could be
reduced should mitigating actions become necess
ary
.
•
Re
viewing agr
eements and correspondence r
elating
to the av
ailability of financing arrangements.
•
E
valuating the Gr
oup
’s disclosur
es on going concern
against the requir
ements of IAS 1.
Based on the w
ork we hav
e performed, we hav
e not
identified any mat
erial uncert
ainties relating t
o e
v
ents
or conditions that, individually or collectiv
ely
, may
cast significant doubt on the Group
’s or the parent
company’s ability t
o continue as a going concern f
or a
period of at least tw
elve months fr
om when the financial
stat
ements ar
e authorised for issue.
In relation t
o the Direct
ors’ r
eporting on ho
w they hav
e
applied the UK Corporat
e Go
v
ernance Code, w
e hav
e
nothing material t
o add or dr
aw attention t
o in relation
to the Dir
ect
ors’ st
atement in the financial st
at
ements
about whether the Direct
ors considered it appr
opriat
e to
adopt the going concern basis of accounting.
Our responsibilities and the r
esponsibilities of the
Direct
ors with respect t
o going concern ar
e described in
the rele
v
ant sections of this report
.
Other Information
The other information comprises the informat
ion
included in the annual report on pages 1 t
o 101 other
than the financial stat
ements and our audit
or’s report
thereon. The Dir
ectors ar
e responsible for the other
information cont
ained within the annual report
. Our
opinion on the financial stat
ements does not co
v
er the
other information and, e
x
cept t
o the ext
ent otherwise
explicitl
y stat
ed in our report, w
e do not express an
y
form of assur
ance conclusion thereon.
In connection with our audit of the financial st
atements,
our responsibility is t
o read the other inf
ormation and,
in doing so, consider whether the other inf
ormation is
materiall
y inconsistent with the financial st
at
ements
or our kno
wledge obtained in the audit or otherwise
appears to be mat
erially misst
at
ed.
If w
e identify such material inconsist
encies or apparent
material misst
at
ements, w
e are r
equired t
o determine
whether there is a mat
erial misst
atement in the financial
stat
ements or a mat
erial misstat
ement of the other
information. If
, based on the work w
e hav
e performed,
w
e conclude that there is a mat
erial misstat
ement of this
other information, w
e ar
e requir
ed to r
eport that fact.
W
e have nothing t
o report in this r
egard.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
109
Opinions on Other Matters Pr
escribed b
y
the Companies Act 2006
In our opinion, the part of the Direct
ors’ r
emuneration
report t
o be audit
ed has been properly pr
epared in
accordance with the Companies A
ct 2006.
In our opinion, based on the w
ork undertak
en in the
course of the audit:
•
the information giv
en in the Str
ategic Report and
the Direct
ors’ R
eport for the financial period for
which the financial stat
ements ar
e prepar
ed is
consistent with the financial st
at
ements and those
reports hav
e been pr
epared in accordance with
applicable legal requir
ements;
•
the information about int
ernal control and risk
management sy
stems in r
elation t
o financial
reporting pr
ocesses and about share capit
al
structures, giv
en in compliance with rules 7
.2.5
and 7
.2.6 in the Disclosure Rules and T
ranspar
ency
Rules sourcebook made b
y the Financial Conduct
Authority (the F
CA Rules), is consist
ent with the
financial stat
ements and has been pr
epared in
accordance with applicable legal r
equirements; and
•
information about the compan
y’s corporat
e
go
vernance code and pr
actices and about its
administrativ
e
, management and supervisory bodies
and their committees complies with rules 7
.2.2, 7
.2.3
and 7
.2.7 of the FCA R
ules.
Matters on which w
e are Requir
ed t
o
Report b
y Ex
ception
In the light of the kno
wledge and understanding of the
Group and the par
ent company and their en
vironment
obtained in the course of the audit, w
e have not
identified mat
erial misstat
ements in:
•
the Strat
egic Report or the Dir
ectors
’ Report; or
•
the information about int
ernal control and risk
management sy
stems in r
elation t
o financial
reporting pr
ocesses and about share capit
al
structures, giv
en in compliance with rules 7
.2.5 and
7
.2.6 of the FCA Rules
.
W
e have nothing t
o report in r
espect of the follo
wing
matters in r
elation t
o which the Companies Act 2006
requir
es us to r
eport t
o you if
, in our opinion:
•
adequate account
ing records hav
e not been kept
b
y the parent compan
y, or r
eturns adequat
e for our
audit hav
e not been receiv
ed from br
anches not
visited b
y us; or
•
the parent compan
y financial st
atements and the
part of the Direct
ors’ r
emuneration r
eport to be
audited ar
e not in agreement with the accounting
recor
ds and returns; or
•
certain disclosur
es of Direct
ors’ r
emuneration
specified b
y law are not made; or
•
w
e have not r
eceiv
ed all the information and
explanations w
e require for our audit
.
Corporat
e Go
v
ernance Stat
ement
W
e have r
evie
w
ed the Direct
ors’ st
at
ement in relation t
o
going concern, longer-t
erm viability and that part of the
Corporat
e Go
v
ernance Stat
ement relating t
o the par
ent
company’s compliance with the pr
o
visions of the UK
Corporat
e Go
v
ernance Code specified for our re
vie
w b
y
the Listing Rules.
Based on the w
ork undertak
en as part of our audit, w
e
hav
e concluded that each of the follo
wing elements
of the Corporat
e Go
v
ernance Stat
ement is mat
erially
consistent with the financial st
at
ements or our
kno
wledge obtained during the audit:
•
Direct
ors’ st
at
ement with regards the
appropriat
eness of adopting the going concern
basis of accounting and an
y material uncert
ainties
identified set out on page 99;
•
Dir
ectors
’ explanation as t
o its assessment of the
Group
’s prospects, the period this assessment
co
vers and wh
y this period is appropriat
e set out on
page 63;
•
Direct
or’s st
atement on whether it has a
reasonable e
xpect
ation that the Group will be
able to cont
inue in operation and meets its
liabilities set out on page 99;
•
Direct
ors’ st
at
ement on fair
, balanced and
understandable set out on page 9
2;
•
Board’s confirmation that it has carried out a r
obust
assessment of the emerging and principal risks set
out on page 50;
•
The section of the annual report that describes the
re
vie
w of effectiv
eness of risk management and
internal contr
ol sy
stems set out on page 71; and,
•
The section describing the work o
f the audit
committee set out on page 89
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
110
Responsibilities of Dir
ect
ors
As explained mor
e fully in the Dir
ectors
’ responsibilities
stat
ement set out on page 101, the Dir
ectors ar
e
responsible f
or the prepar
ation of the financial
stat
ements and for being s
atisfied that the
y give a
true and fair vie
w
, and for such int
ernal control as
the Direct
ors det
ermine is necessary t
o enable the
prepar
ation of financial stat
ements that ar
e free fr
om
material misst
at
ement, whether due to fr
aud or error
.
In preparing the financial st
at
ements, the Direct
ors
are r
esponsible for assessing the Gr
oup
’s and the
parent compan
y’s ability t
o continue as a going
concern, disclosing, as applicable, matt
ers relat
ed t
o
going concern and using the going concern basis of
accounting unless the Direct
ors either int
end to liquidat
e
the Group or the par
ent company or t
o cease operat
ions,
or hav
e no realistic alt
ernativ
e but to do so
.
Audit
or’s R
esponsibilities for the A
udit of
the Financial St
at
ements
Our objectiv
es are t
o obtain r
easonable assurance
about whether the financial stat
ements as a whole
are fr
ee from mat
erial misst
atement, whether due t
o
fraud or err
or
, and to issue an audit
or’s report that
includes our opinion. Reasonable assurance is a high
lev
el of assurance but is not a guarant
ee that an audit
conducted in accor
dance with ISAs (UK) will alw
ay
s
detect a mat
erial misst
atement when it e
xists.
Misst
atements can arise fr
om fraud or err
or and are
considered mat
erial if
, individually or in the aggr
egate
,
they could r
easonably be e
xpected t
o influence the
economic decisions of users tak
en on the basis of these
financial stat
ements.
The Extent t
o which the Audit w
as
Considered Capable of Det
ecting
Irregularities, Including F
r
aud
Irregularities ar
e instances o
f non-compliance with
laws and regulat
ions. The objectives of our audit
are t
o obt
ain sufficient appropriat
e audit evidence
regar
ding compliance with laws and regulations that
hav
e a direct eff
ect on the determination of mat
erial
amounts and disclosures in the financial st
at
ements, to
perform audit pr
ocedures t
o help identify instances of
non-compliance with other laws and regulations that
may hav
e a material e
ffect on the financial st
atements,
and to r
espond appropriat
ely t
o identified or suspect
ed
non-compliance with laws and regulat
ions identified
during the audit.
In relation t
o fraud, the object
ives of our audit ar
e t
o
identify and assess the risk of material misst
at
ement of
the financial stat
ements due t
o fraud, t
o obt
ain sufficient
appropriat
e audit e
vidence regarding the assessed
risks of material misst
at
ement due t
o fraud through
designing and implementing appropriat
e responses and
to r
espond appropriat
ely t
o fraud or suspect
ed fr
aud
identified during the audit.
Ho
we
v
er
, it is the primary responsibility of management,
with the o
versight of those char
ged with go
vernance
,
to ensur
e that the entity’s operat
ions are conduct
ed in
accordance with the pr
ovisions o
f laws and regulations
and for the pr
ev
ention and det
ection of fraud.
In identifying and assessing risks of material
misstat
ement in r
espect of irregularities, including
fraud, the Gr
oup audit engagement team and
component auditors:
•
obtained an underst
anding of the natur
e of
the industry and sector
, including the legal and
regulat
ory frame
w
orks that the Group and par
ent
company oper
at
es in and how the Gr
oup and
parent compan
y are compl
ying with the legal and
regulat
ory frame
w
orks;
•
inquired of management, and those char
ged with
go
vernance
, about their o
wn identification and
assessment of the risks of irregularities, including
any kno
wn actual, suspect
ed or alleged inst
ances
of fraud;
•
applied analytical r
evie
w procedur
es t
o identify
unusual or unexpect
ed r
elationships.
•
discussed matters about non-compliance with
laws and regulations and ho
w fraud might occur
including assessment of ho
w and where the
financial stat
ements may be susceptible t
o fraud
having obtained an underst
anding of the
control en
vironment.
As the Group is r
egulated, our assessment of risks
inv
olv
ed gaining an understanding of the eff
ectiv
eness
of the control en
vironment including the contr
ols
established t
o mitigat
e the risks of fraud and the
procedur
es for complying with r
egulatory r
equirements
.
All rele
v
ant laws and regulations identified at a Gr
oup
lev
el and areas susceptible to fr
aud that could hav
e
a material e
ffect on the financial st
atements w
ere
communicated t
o component audit
ors. An
y instances
of non-compliance with laws and regulat
ions identified
and communicated b
y component auditors w
ere
considered in our audit appr
oach. W
e remained alert to
any indications o
f fraud throughout the audit
.
As a result of these pr
ocedures, w
e consider
ed the
opportunities and incentiv
es that may exist within the
Group f
or fraud and identified the gr
eatest pot
ential for
fraud in those ar
eas in which management is requir
ed
to e
x
er
cise significant judgement. In common with
all audits under ISAs (UK) w
e also performed specific
procedur
es to r
espond t
o the risk of management
o
verride and the risk of fr
audulent re
v
enue recognition.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
111
These procedur
es included :-
•
test
ing the appropriat
eness of journal entries
and other adjustments based on risk criteria and
comparing the identified entries t
o supporting
documentat
ion.
•
assessing whether the judgements made in
making accounting estimat
es wer
e indicativ
e of
potent
ial bias.
•
ev
aluating the business r
ationale of any significant
trans
actions that are unusual or outside the normal
course of business.
•
test
ing the operating eff
ectiv
eness of the manual
controls in r
elation to the complet
eness, accur
acy,
and exist
ence of cash sales
.
•
inv
estigating tr
ansactions post
ed to nominal ledger
codes outside of the normal re
v
enue cy
cle identified
through the use of dat
a analytics t
ools.
The Group is subject t
o laws and regulations which
directly aff
ect the mat
erial amounts and disclosures in
the financial stat
ements. The most significant laws and
regulations w
er
e detertmined t
o be as follo
ws:-Unit
ed
Kingdom adopt
ed Internat
ional Accounting St
andards
and FRS 102, the UK Companies Act, F
inancial Conduct
Authority r
egulations, including the Listing Rules and
tax legislat
ion.
In addition, the Group is subject t
o other laws and
regulations which do not hav
e a dir
ect effect on the
financial stat
ements but compliance with which may be
fundamental t
o the Gr
oup
’s ability to oper
at
e or to av
oid
material penalt
ies. W
e identified the follo
wing areas as
those most likel
y to hav
e such an effect: competition
and anti-bribery laws, dat
a prot
ection, emplo
yment,
envir
onmental and health and s
afety r
egulations.
In response t
o the abo
v
e, audit procedur
es performed b
y
the audit engagement team included:
•
re
vie
wing financial stat
ement disclosures and
test
ing to supporting document
ation t
o assess
compliance with pro
visions of r
elev
ant laws and
regulations described as having a dir
ect effect on
the financial stat
ements.
•
enquiring of management, the Audit Committ
ee
and in-house legal counsel concerning actual and
potent
ial litigation and claims.
•
reading minut
es of meetings of those char
ged with
go
vernance
, re
vie
wing internal audit r
eports and
correspondence with HMR
C.
A further description of our responsibilities f
or the audit
of the financial stat
ements is locat
ed on the Financial
Reporting Council’s w
ebsite at: http:/
/
www
.fr
c.or
g.
uk/
auditorsr
esponsibilities. This description forms part of our
auditor’s r
eport.
Other Matters Which W
e Are Requir
ed
t
o Address
F
ollo
wing the recommendation of the audit committ
ee,
w
e wer
e appoint
ed b
y the Audit Committ
ee and the
Board on 18 No
v
ember 2019 t
o audit the financial
stat
ements for the y
ear ending 26 April 2020 and
subsequent financial periods.
The period of tot
al unint
errupted consecutiv
e
appointments is 3 y
ears cov
ering the y
ears ending 26
April 2020 t
o 24 April 2022.
The non-audit services prohibit
ed b
y the FRC’s Ethical
Standar
d w
ere not pr
ovided t
o the Gr
oup or the parent
company and w
e remain independent of the Group and
the parent compan
y in conducting our audit.
Our audit opinion is consistent with the addit
ional report
to the audit committ
ee
.
Use of Our Report
This report is made solely t
o the compan
y’s members,
as a body
, in accordance with Chapt
er 3 of Part 16 of
the Companies Act 2006. Our audit w
ork has been
undertak
en so that w
e might st
ate t
o the compan
y’s
members those matters w
e ar
e requir
ed to st
at
e to them
in an auditor’s r
eport and for no other purpose
. T
o the
fullest ext
ent permitt
ed by law
, we do not accept or
assume responsibility t
o an
yone other than the compan
y
and the company’s members as a body
, for our audit
w
ork, for this report, or f
or the opinions w
e have f
ormed.
Other Matter
In due course, as r
equired b
y the F
inancial Conduct
Authority (F
CA) Disclosure Guidance and T
ransparency
Rule (D
TR) 4.
1.14R
, these financial stat
ements will form
part of the European Single Electr
onic F
ormat (ESEF)
prepar
ed Annual Financial Report filed on the Nat
ional
Stor
age Mechanism of the UK F
CA in accordance with
the ESEF Regulat
ory T
echnical Standar
d (‘ESEF RTS
’).
This auditor’s r
eport pro
vides no assurance o
v
er whether
the annual financial report will be pr
epared using the
single electronic f
ormat specified in the ESEF RTS
.
Mark Harw
ood (Senior Statut
ory A
uditor)
F
or and on behalf of RSM UK Audit LLP
,
Statut
ory Audit
or
Charter
ed Account
ants
25 F
arringdon Street
London
E
C4A 4AB
Date
: 20 September 2022.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
112
CONSOLID
A
TED INCOME
ST
A
TEMENT
F
or the 52 w
eeks ended 24 April 2022
Note
Continuing
operations
52 weeks ended
24 April 2022
Discontinued
operations
52 weeks ended
24 April 2022
T
otal
52 weeks ended
24 April 2022
Continuing
operations
52 weeks ended
25 April 2021
Discontinued
operations
52 weeks ended
25 April 2021
T
otal
52 weeks ended
25 April 2021
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
Rev
enue
4,672.9
114.2
4,787.1
3,507.3
118.0
3,625.3
Credit account int
erest
18.2
-
18.2
-
-
-
T
otal re
v
enue (including
credit account int
erest)
4
4,691.1
114.2
4,805.3
3,507.3
118.0
3,625.3
Cost of sales
(2,647.2)
(56.1)
(2,703.3)
(2,023.4)
(71.1)
(2,094.5)
Impairment losses on credit
customer r
eceivables
4
(13.3)
-
(13.3)
-
-
-
Gross Profit
2,030.6
58.1
2,088.7
1,483.9
46.9
1,530.8
Selling, distribution and
administrativ
e expenses
(1,557.3)
(31.5)
(1,588.8)
(1,281.6)
(37.4)
(1,319.0)
Other operating income
5
45.4
2.6
48.0
33.3
3.5
36.8
Property relat
ed
impairments
17, 18
(227.0)
-
(227.0)
(317.0)
-
(317.0)
Ex
ceptional items
6
(1.3)
-
(1.3)
(1.6)
-
(1.6)
Profit on sale of pr
operties
7
10.8
-
10.8
9.7
-
9.7
Operating Profit/(Loss)
4,8
301.2
29.2
330.4
(73.3)
13.0
(60.3)
Inv
estment income
10
43.8
-
43.8
103.7
-
103.7
Inv
estment costs
11
(19.7)
-
(19.7)
(7.7)
-
(7.7)
Finance income
12
30.3
-
30.3
9.0
-
9.0
Finance costs
13
(48.9)
(0.3)
(49.2)
(32.9)
(3.3)
(36.2)
Profit/(loss) bef
ore tax
ation
306.7
28.9
335.6
(1.2)
9.7
8.5
T
axation
14
(75.5)
(3.2)
(78.7)
(85.4)
(1.1)
(86.5)
Profit/(loss) for the period
4
231.2
25.7
256.9
(86.6)
8.6
(78.0)
A
TTRIBUT
ABLE T
O:
Equity holders of the Group
224.1
25.7
249.8
(91.6)
8.6
(83.0)
Non-controlling int
erests
7.1
-
7.1
5.0
-
5.0
Profit/(loss) for the period
4
231.2
25.7
256.9
(86.6)
8.6
(78.0)
Pence per share
Pence per share
Pence per share
Pence per share
Pence per share
Pence per share
Basic earnings per share
15
47.5
5.4
52.9
(18.2)
1.7
(16.5)
Diluted earnings per shar
e
15
47.5
5.4
52.9
(18.2)
1.7
(16.5)
Discontinued operations r
elat
e to the Gr
oup
’s US ret
ail businesses which w
ere disposed of post y
ear-end (see not
e 16).
The accompanying accounting policies and not
es form part of these financial st
at
ements.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
113
CONSOLID
A
TED ST
A
TEMENT OF
COMPREHENSIVE INCOME
F
or the 52 w
eeks ended 24 April 2022
Note
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£’m)
(£’m)
Profit/(loss) for the period
4
256.9
(78.0)
O
THER COMPREHENSIVE INCOME
ITEMS THA
T WILL NO
T BE RECLASSIFIED SUBSE
QUENTL
Y T
O PR
OFIT OR LOSS
F
air value mo
vement on long-
term financial assets
21
(8.1)
77.3
Remeasurements of de
fined benefit pension scheme
38
(26.8)
-
Deferr
ed tax on remeasur
ements of defined benefit pension scheme
28
6.7
-
ITEMS THA
T WILL BE RECLASSIFIED SUBSE
QUENTL
Y T
O PROFIT
OR LOSS
Ex
change differences on translat
ion of foreign oper
ations
26
6.8
(49.1)
F
air value mo
vement on hedged contr
acts - recognised in the period
26,30
52.1
0.4
F
air value mo
vement on hedged contr
acts - reclassified and report
ed in sales
26,30
-
(2.8)
F
air value mo
vement on hedged contr
acts - reclassified and report
ed in inv
entory
/
cost of sales
26,30
7.5
(17.1)
F
air value mo
vement on hedged contr
acts - tax
ation tak
en to r
eserves
26,30
(15.8)
3.0
O
THER COMPREHENSIVE INCOME F
OR THE PERIOD
, NET OF
T
AX
22.4
11.7
T
O
T
AL COMPREHENSIVE INCOME/L
OSS F
OR THE PERIOD
279.3
(66.3)
A
TTRIBUT
ABLE T
O:
Equity holders of the Group
272.2
(71.3)
Non-controlling int
erest
7.1
5.0
279.3
(66.3)
The accompanying accounting policies and not
es form part of these financial st
at
ements.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
114
CONSOLID
A
TED BAL
ANCE SHEE
T
At 2
4 April 2022
Note
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£’m)
(£’m)
ASSETS  NON CURRENT
Property
, plant and equipment
17
1,011.0
1,164.9
Inv
estment properties
18
89.2
14.1
Intangible assets
19
120.6
120.5
Long-t
erm financial assets
21
206.6
263.3
Retirement bene
fit surplus
38
2.2
-
Deferr
ed tax assets
28
100.8
66.8
1,530.4
1,629.6
ASSETS - CURRENT
Inv
entories
22
1,277.6
1,096.6
T
rade and other r
eceivables
23
841.4
546.5
Derivativ
e financial assets
30
116.5
55.4
Cash and cash equivalents
24
336.8
457.0
2,572.3
2,155.5
Assets in disposal groups classified as held f
or sale
16
40.0
-
T
O
T
AL ASSETS
4,142.7
3,785.1
EQUITY
Share capit
al
25
64.1
64.1
Share premium
874.3
874.3
T
reasury shar
es reserv
e
26
(488.9)
(295.7)
Permanent contribution t
o capital
26
0.1
0.1
Capital r
edemption reserv
e
26
8.0
8.0
F
oreign currency tr
anslation reserv
e
26
35.6
28.8
Rev
erse combination reserv
e
26
(987.3)
(987.3)
Own share reserv
e
26
(66.8)
(66.7)
Hedging reserv
e
26
55.3
11.5
Share based payment reserv
e
14.1
1.3
Retained earnings
1,778.1
1,554.5
Issued capital and r
eserves attribut
able to o
wners of the parent
1,286.6
1,192.9
Non-controlling int
erests
22.0
18.1
T
O
T
AL EQUITY
1,308.6
1,211.0
LIABILITIES  NON CURRENT
Lease liability
27
503.6
534.2
Borro
wings
27
827.9
705.9
Retirement bene
fit obligations
1.6
1.9
Deferr
ed tax liabilities
28
40.4
27.0
Pro
visions
29
433.0
361.2
1,806.5
1,630.2
LIABILITIES - CURRENT
Derivativ
e financial liability
30
107.2
19.2
T
rade and other pay
ables
31
729.8
646.3
Lease liability
27
117.0
188.5
Current t
ax liabilities
50.9
89.9
1,004.9
943.9
Liabilities in disposal groups classified as held f
or sale
16
22.7
-
T
O
T
AL LIABILITIES
2,834.1
2,574.1
T
O
T
AL EQUITY AND LIABILITIES
4,142.7
3,785.1
The accompanying accounting policies and not
es form part of these F
inancial St
atements. The F
inancial Stat
ements
w
ere appr
ov
ed b
y the Board on 20 Sept
ember 2022 and w
er
e signed on its behalf by:
Chris W
ootton
Chief Financial Officer
Company number: 06035
106
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
115
CONSOLID
A
TED CASH FL
O
W
ST
A
TEMENT
F
or the 52 w
eeks ended 24 April 2022
Note
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£’m)
(£’m)
Cash inflow
s from operating activities
33
628.9
578.3
Income tax
es paid
(121.0)
(59.3)
Net cash inflow
s from operating activities
507.9
519.0
Proceeds on disposal of pr
operty, plant and equipment and in
vestment pr
operty
32.0
20.6
Proceeds from s
ale and leaseback transactions
9.5
-
Proceeds on disposal of int
angibles assets
-
7.5
Proceeds on disposal of list
ed inv
estments
(1)
21
238.4
7.0
Proceeds in relat
ion to equity deriv
atives
(1)
117.4
48.1
Disposal of subsidiary undert
aking
1.0
-
Purchase of subsidiaries, net of cash acquir
ed
32
(0.2)
(39.4)
Purchase of pr
operty, plant and equipment and inv
estment property
17, 18
(323.2)
(219.4)
Purchase of int
angible assets
19
-
(1.0)
Purchase of list
ed inv
estments
21
(198.4)
(113.3)
Inv
estment income receiv
ed
1.0
0.5
Finance income receiv
ed
6.3
9.0
Net cash outflow
s from inv
esting activities
(116.2)
(280.4)
Lease payments
(176.2)
(78.0)
Finance costs paid
(32.8)
(31.6)
Borro
wings drawn do
wn
27
1,374.4
1,128.1
Borro
wings repaid
27
(1,484.4)
(1,323.6)
Proceeds from s
ale and leaseback transactions
1.5
-
Dividends paid to non-contr
olling interests
(1.3)
(0.9)
Purchase of o
wn shares
(193.2)
(4.3)
Net cash outflow
s from financing activities
(512.0)
(310.3)
Net decrease in cash and cash equiv
alents including ov
erdrafts
(120.3)
(71.7)
Ex
change mov
ement on cash balances
0.1
(5.3)
Cash and cash equivalents including o
v
erdrafts at beginning of period
457.0
534.0
Cash and cash equivalents including o
v
erdrafts at the period end
24
336.8
457.0
(1)
Proceeds in relation t
o equity derivativ
es in both the current and prior periods hav
e been shown separat
ely from proceeds on dispos
al of listed inv
estments.
This has no impact on net cash outflows fr
om investing activities or net cash.
The accompanying accounting policies and not
es form part of these F
inancial St
atements.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
116
CONSOLID
A
TED ST
A
TEMENT OF
CHANGES IN E
QUIT
Y
F
or the 52 w
eeks ended 24 April 2022
Share
capital
Share
premium
(1)
T
reasury
shares
Share
scheme
reserv
e
F
oreign
currency
translation
Own
share
reserv
e
Retained
earnings
Other
(2)
T
otal
attributable
to o
wners
of parent
Non-controlling
inter
ests
T
otal
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m
)
(£’m)
(£’m)
(£’m)
(£’m)
At 27 April 2020
64.1
874.3
(295.7)
-
77.9
(67.0)
1,564.9
(951.2)
1,267.3
13.0
1,280.3
Acquisitions
-
-
-
-
-
-
-
-
-
1.0
1.0
Share scheme
-
-
-
1.3
-
0.3
(4.7)
-
(3.1)
-
(3.1)
Dividends paid to
non-controlling int
erests
-
-
-
-
-
-
-
-
-
(0.9)
(0.9)
T
ransact
ions with owners in
their capacity as owners
-
-
-
1.3
-
0.3
(4.7)
-
(3.1)
0.1
(3.0)
(Loss)/
profit f
or the financial
period
-
-
-
-
-
-
(83.0)
-
(83.0)
5.0
(78.0)
Other comprehensiv
e income
Cashflow hedges - r
ecognised
in the period
-
-
-
-
-
-
-
0.4
0.4
-
0.4
Cashflow hedges - r
eclassified
and report
ed in sales
-
-
-
-
-
-
-
(2.8)
(2.8)
-
(2.8)
Cashflow hedges - r
eclassified
and report
ed in inv
entory
/
cost
of sales
-
-
-
-
-
-
-
(17.1)
(17.1)
-
(17.1)
Cashflow hedges - t
axat
ion
-
-
-
-
-
-
-
3.0
3.0
-
3.0
F
air value adjustment in r
espect
of long-t
erm financial assets -
recognised
-
-
-
-
-
-
77.3
-
77.3
-
77.3
T
ranslat
ion differences - Group
-
-
-
-
(49.1)
-
-
-
(49.1)
-
(49.1)
T
otal comprehensiv
e loss for
the period
-
-
-
-
(49.1)
-
(5.7)
(16.5)
(71.3)
5.0
(66.3)
At 25 April 2021
64.1
874.3
(295.7)
1.3
28.8
(66.7)
1,554.5
(967.7)
1,192.9
18.1
1,211.0
Acquisitions
-
-
-
-
-
-
1.9
-
1.9
(1.9)
-
Share scheme
-
-
-
12.8
-
(0.1)
0.1
-
12.8
-
12.8
Dividends paid to
non-controlling int
erests
-
-
-
-
-
-
-
-
-
(1.3)
(1.3)
T
ransact
ions with owners in
their capacity as owners
-
-
-
12.8
-
(0.1)
2.0
-
14.7
(3.2)
11.5
Profit for the financial period
-
-
-
-
-
-
249.8
-
249.8
7.1
256.9
Other comprehensiv
e income
Purchase of o
wn shares
-
-
(193.2)
-
-
-
-
-
(193.2)
-
(193.2)
Cashflow hedges - r
ecognised
in the period
-
-
-
-
-
-
-
52.1
52.1
-
52.1
Cashflow hedges - r
eclassified
and report
ed in inv
entory
/
cost
of sales
-
-
-
-
-
-
-
7.5
7.5
-
7.5
Cashflow hedges - t
axat
ion
-
-
-
-
-
-
-
(15.8)
(15.8)
-
(15.8)
F
air value adjustment in r
espect
of long-t
erm financial assets -
recognised
-
-
-
-
-
-
(8.1)
-
(8.1)
-
(8.1)
Remeasurements of de
fined
benefit pension scheme
-
-
-
-
-
-
(26.8)
-
(26.8)
-
(26.8)
Deferr
ed tax on
remeasurements o
f defined
benefit pension scheme
-
-
-
-
-
-
6.7
-
6.7
-
6.7
T
ranslat
ion differences - Group
-
-
-
-
6.8
-
-
-
6.8
-
6.8
T
otal comprehensiv
e income
for the period
-
-
(193.2)
-
6.8
-
221.6
43.8
79.0
7.1
86.1
At 24 April 2022
64.1
874.3
(488.9)
14.1
35.6
(66.8)
1,778.1
(923.9)
1,286.6
22.0
1,308.6
(1)
The share premium account is used t
o record the e
xcess proceeds o
ver nominal v
alue on the issue of shares.
(2)
Other reserv
es comprises permanent contribution to capital
, capital redemption r
eserve, r
everse combinat
ion reserve and the hedging r
eserve.
All mov
ements in the period related t
o the hedging reserv
e (note 26).
The accompanying accounting policies and not
es form part of these F
inancial St
atements.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
117
NO
TES T
O THE FINANCIAL
ST
A
TEMENTS
F
or the 52 w
eeks ended 24 April 2022
1.
A
CCOUNTING POLICIES
Fr
asers Group Plc (
Compan
y number: 06035106) is a
company incorpor
at
ed and domiciled in the United
Kingdom, its shar
es are list
ed on the London Stock
Ex
change. The r
egister
ed office is Unit A, Brook Park
East, Shir
ebrook, NG20 8R
Y
. The principal activities and
structure of the Gr
oup can be found in the Dir
ectors
’
Report and the ‘
Our Business’ section.
Basis of Prepar
ation
The consolidated F
inancial Stat
ements hav
e been
prepar
ed in accordance with Int
ernational Accounting
Standar
ds in conformity with the r
equirements of
the Companies Act 2006 and in accor
dance with
internat
ional financial reporting st
andards adopt
ed b
y
the UK Endorsement Board. This change in the basis of
prepar
ation is requir
ed b
y UK company law f
or financial
reporting as a r
esult of the UK’s exit fr
om the European
Union on 31 January 2020 and the cessation of the
transition period on 31 December 2020
. This change
does not constitut
e a change in accounting policy, r
ather
a change in frame
w
ork which is requir
ed to gr
oup the
use of IFRS in company law
. There is no impact on the
recognition, measur
ement or disclosure betw
een the tw
o
frame
w
orks in the period report
ed. The consolidated
Financial St
at
ements have been pr
epared under the
historical cost con
v
ention, as modified to include f
air
v
aluation of certain financial assets and deriv
ativ
e
financial instruments.
The accounting policies set out below hav
e been applied
consistentl
y to all periods in these F
inancial St
atements
and hav
e been applied consistentl
y by all Gr
oup entities.
Cert
ain subsidiaries have been consolidat
ed based on a
calendar y
ear-end date of 30 April 2022.
The numbers present
ed in the Financial St
at
ements have
been rounded t
o the nearest million.
Going Concern
The Group
’s business activities, together with the fact
ors
likel
y to aff
ect its future de
v
elopment, performance and
position are set out in the Chie
f Ex
ecutiv
e’s R
eport and
Business Re
view
.
The financial position of the Group
, its cash flow
s,
liquidity position and borro
wing facilit
ies are described
in the Financial R
evie
w
. In addition, the financial
stat
ements include the Gr
oup
’s objectiv
es, policies
and processes f
or managing its capital
, its financial
risk management objectiv
es, details of its financial
instruments and hedging activities, and its e
xposures t
o
credit risk and liquidity risk.
The Group is pro
fitable
, highly cash generativ
e and
has considerable financial r
esources. The Gr
oup is able
to oper
at
e within its banking facilities and co
v
enants,
which run until No
vember 20
24 with a tw
o y
ear option
to e
xt
end, and is w
ell placed to t
ak
e advant
age of
strat
egic opportunities as the
y arise. As a consequence
,
the Direct
ors belie
ve that the Gr
oup is w
ell placed
to manage its business risks successfull
y despite the
continued uncertain economic outlook.
Management hav
e assessed the lev
el of tr
ading and
hav
e forecast and pr
oject
ed a conservativ
e base case
and also a number of ev
en more conservativ
e scenarios,
including taking int
o account the Gr
oup
’s open positions
in relation t
o Hugo Boss options. These for
ecasts and
projections sho
w that the Gr
oup will be able to oper
ate
within the lev
el of the current facility and its co
v
enant
requir
ements (being inter
est co
ver and net debt t
o
EBITD
A ratios). Management also has a number of
mitigating actions which could be t
aken if r
equired
such as putting on hold discretionary spend, liquidat
e
certain assets on the Balance Sheet and pay do
wn the
Re
volving Cr
edit F
acility
. See the Viability St
atement f
or
further details
.
Having thoroughly r
e
view
ed the performance o
f the
Group and Par
ent Compan
y and having made suitable
enquiries, the Direct
ors are confident that the Gr
oup
and Parent C
ompany hav
e adequat
e resour
ces to
remain in oper
ational exist
ence for the f
oreseeable
future which is at least 12 months fr
om the date of
these financial stat
ements. T
rading would need t
o fall
significantly belo
w lev
els observed during the pandemic
to r
equire mitigat
ing actions or a relax
ation of co
v
enants.
F
urthermore, as per the outlook st
at
ement the Direct
ors
are confident of achie
ving an Adjust
ed PBT f
or FY23 of
betw
een £450m t
o £500m during FY23
. On this basis,
the Direct
ors continue t
o adopt the going concern basis
for the pr
eparation of the Annual Report and financial
stat
ements which is a period of at least 12 months fr
om
the date o
f appro
v
al of these financial stat
ements.
FRASERS GROUP PL
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AL REPORT 2022
118
Basis of Consolidation
The consolidated F
inancial Stat
ements incorpor
ate
the financial stat
ements of the Compan
y and entities
controlled b
y the Compan
y (its subsidiaries) each y
ear
.
Control is achie
v
ed when the Company:
•
has the po
wer o
v
er the inv
estee;
•
is exposed, or has rights, t
o v
ariable returns fr
om its
inv
olv
ement with the inv
estee; and
•
has the ability to use its po
wer t
o affect its returns
.
The Company r
eassesses whether or not it controls an
inv
est
ee if facts and cir
cumstances indicat
e that there
are changes t
o one or more of the thr
ee elements of
control list
ed abo
v
e.
When the Company has less than a majority o
f the
v
oting rights of an inv
est
ee, it considers that it has po
w
er
o
ver the in
v
estee when the v
oting rights ar
e sufficient to
giv
e it the practical ability t
o direct the r
elev
ant activities
of the inv
est
ee unilater
ally
. T
he Compan
y considers all
rele
v
ant facts and circumst
ances in assessing whether
or not the Company’s v
oting rights in an invest
ee ar
e
sufficient to giv
e it pow
er
, including:
•
the size of the C
ompany’s holding of v
oting rights
relativ
e t
o the size and dispersion o
f holdings of the
other v
ote holders;
•
potent
ial voting rights held b
y the Company
, other
v
ote holders or other parties;
•
rights arising from other contr
actual arrangements;
and
•
any additional f
acts and circumst
ances that
indicate that the C
ompany has, or does not hav
e,
the current ability t
o direct the r
elev
ant activities at
the time that decisions need t
o be made, including
v
oting patterns at pr
evious shar
eholders’ meetings.
Consolidation of a subsidiary begins when the Compan
y
obtains contr
ol o
ver the subsidiary and ceases when the
Company loses contr
ol of the subsidiary
. Specifically
, the
results of subsidiaries acquir
ed or disposed of during
the y
ear are included in pro
fit or loss from the dat
e
the Company gains contr
ol until the dat
e when the
Company ceases t
o contr
ol the subsidiary
.
Where necess
ary, adjustments ar
e made to the
financial stat
ements of subsidiaries t
o bring the
accounting policies used int
o line with the Group
’s
accounting policies.
All intragr
oup assets and liabilities, equity
, income,
expenses and cash flo
ws r
elating t
o transactions
betw
een the members of the Group ar
e eliminated
on consolidation.
Non-controlling int
erests in subsidiaries ar
e identified
separat
ely fr
om the Group
’s equity therein. Those
inter
ests of non-controlling shar
eholders that are
present o
wnership int
erests entitling their holders t
o
a proportionat
e share o
f net assets upon liquidation
may initially be measur
ed at fair v
alue or at the
non-controlling int
erests
’ proportionat
e share of the
fair v
alue of the acquiree
’s identifiable net assets. The
choice of measurement is made on an acquisition-
b
y-acquisition basis. Other non-contr
olling inter
ests
are initiall
y measured at fair v
alue. Subsequent to
acquisition, the carrying amount of non-controlling
inter
ests is the amount of those int
erests at initial
recognition plus the non-contr
olling inter
ests’ shar
e of
subsequent changes in equity
.
Profit or loss and each component of other
comprehensiv
e income ar
e attributed t
o the o
wners
of the Compan
y and to the non-contr
olling inter
ests.
T
otal compr
ehensive income o
f the subsidiaries is
attributed t
o the o
wners of the Compan
y and to the
non-controlling int
erests e
v
en if this results in the
non-controlling int
erests having a de
ficit balance.
Changes in the Group
’s interests in subsidiaries that
do not result in a loss of contr
ol are account
ed for as
equity trans
actions. The carrying amount of the Group
’s
inter
ests and the non-controlling int
er
ests are adjust
ed
to r
eflect the changes in their r
elativ
e inter
ests in the
subsidiaries. An
y difference betw
een the amount by
which the non-controlling int
erests ar
e adjust
ed and
the fair v
alue of the considerat
ion paid or receiv
ed
is recognised dir
ectly in equity and attribut
ed to the
o
wners of the Company
.
When the Group loses contr
ol of a subsidiary
, the gain or
loss on disposal r
ecognised in profit or loss is calculat
ed
as the differ
ence between (i) the aggr
egat
e of the fair
v
alue of the consideration r
eceived and the f
air v
alue
of any r
et
ained inter
est and (ii) the pre
vious carrying
amount of the assets (including goodwill), less liabilities
of the subsidiary and any non-contr
olling int
erests. All
amounts pre
viously r
ecognised in other comprehensiv
e
income in relation t
o that subsidiary are account
ed
for as if the Gr
oup had directly disposed of the r
elat
ed
assets or liabilities of the subsidiary (i.e
. reclassified t
o
profit or loss or tr
ansferr
ed to another cat
egory of equity
as requir
ed/
permit
t
ed b
y applicable IFRS Standar
ds).
The fair v
alue of any in
v
estment ret
ained in the former
subsidiary at the date when contr
ol is lost is regar
ded
as the fair v
alue on initial recognit
ion for subsequent
accounting under IFRS 9 when applicable, or the cost on
initial recognition of an in
v
estment in an associate or a
joint v
enture
.
FRASERS GROUP PL
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ANNU
AL REPORT 2022
119
Business Combinations
Acquisitions of businesses ar
e accounted f
or using the
acquisition method. The consideration tr
ansferred in a
business combination is measured at f
air value
, which is
calculated as the sum o
f the acquisition-date f
air values
of assets transf
erred t
o the Group
, liabilities incurred
b
y the Group t
o the former o
wners of the acquiree and
the equity inter
est issued b
y the Group in e
x
change for
control of the acquir
ee. A
cquisition-relat
ed costs are
recognised in pr
ofit or loss as incurred.
At the acquisition dat
e, the identifiable assets acquir
ed
and the liabilities assumed are r
ecognised at their fair
v
alue at the acquisition date
, ex
cept that:
•
deferr
ed tax assets or liabilit
ies and assets or
liabilities relat
ed t
o emplo
yee bene
fit arrangements
are r
ecognised and measured in accor
dance with
IAS 12 and IAS 19 respectiv
ely;
•
liabilities or equity instruments relat
ed t
o
share-based payment arr
angements of the acquiree
or share-based payment arr
angements of the
Group ent
ered int
o t
o replace shar
e-based payment
arrangements of the acquir
ee are measur
ed in
accordance with IFRS 2 at the acquisition dat
e; and
•
assets (or dispos
al groups) that ar
e classified as held
for sale in accor
dance with IFRS 5 are measur
ed in
accordance with that St
andard.
Goodwill is measured as the e
x
cess of the sum of
the consideration tr
ansferr
ed, the amount of any
non-controlling int
erests in the acquir
ee, and the f
air
v
alue of the acquirer’s pr
eviously held equity int
er
est in
the acquiree (if an
y) o
ver the net o
f the acquisition-date
amounts of the identifiable assets acquired and the
liabilities assumed. If
, aft
er reassessment, the net of
the acquisition-dat
e amounts of the identifiable assets
acquired and liabilities assumed e
x
ceeds the sum
of the consideration tr
ansferr
ed, the amount of any
non-controlling int
erests in the acquir
ee and the fair
v
alue of the acquirer’s pr
eviously held int
er
est in the
acquiree (if an
y), the ex
cess is recognised immediatel
y in
profit or loss as a bar
gain purchase gain.
F
or business combinations achie
ved in st
ages, the Group
remeasur
es its pre
viously held equity int
erest in the
acquiree at its acquisition dat
e fair v
alue and r
ecognises
the resulting gain or loss, if an
y
, in the Income Stat
ement
as appropriat
e.
Associat
es
An associate is an ent
ity ov
er which the Gr
oup has
significant influence and that is neither a subsidiary
nor an inter
est in a joint v
enture
. Significant influence is
the po
wer t
o participat
e in the financial and operating
policy decisions of the inv
est
ee but is not control or joint
control o
v
er those policies.
The results and assets and liabilities of associat
es
are incorpor
ated in these F
inancial St
atements using
the equity method of accounting, e
x
cept when the
inv
estment is classified as held for s
ale, in which case it is
accounted f
or in accordance with IFRS 5
.
Under the equity method, an inv
estment in an associat
e
is recognised initiall
y in the consolidated Balance Sheet
at cost and adjusted ther
eaft
er to r
ecognise the Group
’s
share of the pr
ofit or loss and other comprehensiv
e
income of the associat
e. When the Gr
oup
’s share of
losses of an associat
e or a joint ventur
e ex
ceeds the
Group
’s interest in that associat
e (which includes an
y
long-t
erm int
erests that, in subst
ance, form part o
f the
Group
’s net inv
estment in the associate), the Gr
oup
discontinues recognising its shar
e of further losses.
Additional losses are r
ecognised only t
o the ext
ent that
the Group has incurr
ed legal or constructiv
e obligations
or made payments on behalf of the associat
e.
An inv
estment in an associat
e is accounted f
or using
the equity method from the dat
e on which the
inv
est
ee becomes an associate
. On acquisition of the
inv
estment in an associat
e, an
y ex
cess of the cost of the
inv
estment o
v
er the Group
’s share of the net fair v
alue
of the identifiable assets and liabilities of the in
vest
ee
is recognised as goodwill, which is included within the
carrying amount of the inv
estment. An
y e
x
cess of the
Group
’s share of the net fair v
alue of the identifiable
assets and liabilities o
ver the cost o
f the inv
estment,
aft
er reassessment, is r
ecognised immediately in pr
ofit or
loss in the period in which the inv
estment is acquir
ed.
The requir
ements of IAS 36 are applied t
o determine
whether it is necessary t
o recognise an
y impairment
loss with respect t
o the Group
’s inv
estment in an
associate
. When necessary
, the entir
e carrying
amount of the inv
estment (including goodwill) is
test
ed for impairment in accor
dance with IAS 36 as
a single asset b
y comparing its reco
v
erable amount
(higher of v
alue in use and fair v
alue less costs of
disposal) with its carrying amount. An
y re
v
ersal of
that impairment loss is recognised in accor
dance
with IAS 36 to the e
xt
ent that the reco
v
erable amount
of the inv
estment subsequently incr
eases.
The Group discontinues the use of the equity method
from the dat
e when the inv
estment ceases t
o be an
associate
. When the Group r
et
ains an inter
est in the
former associat
e and the ret
ained int
erest is a financial
asset, the Group measur
es the ret
ained int
erest at fair
v
alue at that date and the f
air value is r
egarded as
its fair v
alue on initial recognit
ion in accordance with
IFRS 9
. The difference betw
een the carrying amount
of the associat
e at the date the equity method w
as
discontinued, and the fair v
alue of an
y ret
ained inter
est
and any pr
oceeds from disposing of a part int
er
est in the
associate is included in the det
ermination of the gain or
loss on disposal of the associat
e. In addition, the Gr
oup
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
120
accounts for all amounts pr
eviously r
ecognised in other
comprehensiv
e income in r
elation to that associat
e on
the same basis as w
ould be requir
ed if that associat
e
had directl
y disposed of the relat
ed assets or liabilities.
Theref
ore
, if a gain or loss pre
viously recognised in other
comprehensiv
e income b
y that associat
e would be
reclassified t
o profit or loss on the dispos
al of the relat
ed
assets or liabilities, the Group r
eclassifies the gain or
loss from equity t
o profit or loss (
as a reclassification
adjustment) when the associate is disposed of
.
When the Group r
educes its ownership int
er
est in an
associate but the Gr
oup continues t
o use the equity
method, the Group r
eclassifies to pr
ofit or loss the
proportion of the gain or loss that had pr
eviousl
y
been recognised in other compr
ehensiv
e income
relating t
o that reduct
ion in ownership int
erest if
that gain or loss w
ould be reclassified t
o profit or
loss on the disposal of the r
elated assets or liabilities
.
When a group entity tr
ansacts with an associat
e
of the Group
, profits and losses r
esulting from the
trans
actions with the associate or joint v
entur
e are
recognised in the Gr
oup
’s consolidat
ed Financial
Stat
ements only t
o the e
xtent of int
er
ests in the
associate that ar
e not relat
ed t
o the Group
.
Re
venue R
ecognition
Re
venue with cust
omers is measur
ed based on the
fiv
e-step model under IFRS 15: ‘R
ev
enue from C
ontracts
with Customers
’:
1.
identify the contract with the customer;
2.
identify the performance obligations in the contr
act;
3.
det
ermine the trans
action price;
4.
allocate the tr
ansaction price t
o separat
e
performance obligations in the contr
act; and
5.
recognise re
v
enues when (
or as) each performance
obligation is satisfied.
Re
venue is measur
ed at the fair v
alue of the
consideration r
eceiv
ed, or receiv
able, and r
epresents
amounts receiv
able for goods supplied, st
at
ed net of
discounts, returns and v
alue added t
ax
es. Cust
omers
hav
e a right of return within a specified period and this
giv
es rise to v
ariable consider
ation under IFRS 15. The
right of return asset is r
ecognised within inv
ent
ory, with
the refund liability due t
o cust
omers on return of their
goods recognised within tr
ade and other payables
.
In the case of goods sold through r
etail st
or
es, re
venue
is recognised when w
e hav
e satisfied the perf
ormance
obligation of transf
erring the goods to the cust
omer at
the point of sale
, less pro
vision for r
eturns. Accumulat
ed
experience is used t
o estimat
e and pro
vide for such
returns at the time of the s
ale. R
etail s
ales are usually in
cash, b
y debit card or b
y credit car
d.
In the case of goods sold on the int
ernet where the
customer has opt
ed for deliv
ery, re
v
enue is recognised
when w
e have s
atisfied the performance obligation
of transf
erring the goods to the cust
omer
, which is at
the point of deliv
ery to the cust
omer
. T
rans
actions are
settled b
y credit card or debit car
d. Pro
visions ar
e made
for int
ernet credit not
es based on the e
xpected le
v
el of
returns using the e
xpect
ed value method, which in turn
is based upon the historical r
at
e of returns. In the case
of internet click and collect or
ders which are collect
ed
in stor
e, the perf
ormance obligation is deemed to hav
e
been satisfied when the goods ar
e dispatched fr
om
the w
arehouse
.
In the case of goods sold t
o other businesses via
wholesale channels, r
ev
enue is r
ecognised when we
hav
e satisfied the performance obligation o
f transferring
the goods to the cust
omer upon deliv
ery
. Payment t
erms
are gener
ally 30-60 days with no right o
f return.
In the case of income generat
ed from tr
ademarks and
licences, re
v
enue is recognised based either on a fix
ed
fee basis or based on sales with specified minimum
guarant
ee amounts in accordance with the r
elev
ant
agreements. If the s
ales-based ro
y
alty is not expect
ed
to clearl
y ex
ceed the minimum guarantee thr
eshold,
re
v
enue is recognised o
v
er the rights period measured
on the basis of the fix
ed guarant
eed considerat
ion.
Re
venue abo
ve the minimum guarant
ee threshold is
recognised as earned based on the contr
actual ro
y
alty
rat
e applied t
o the sales.
Re
venue fr
om Gym membership f
ees is stat
ed e
x
clusiv
e
of v
alue added tax and comprises monthl
y membership
fees, non-r
efundable joining fees and longer t
erm
membership fees r
ecognised during the period.
Membership income is recognised and spr
ead ov
er
the period to which it r
elat
es, being the period of the
Group
’s performance obligations, with any subscriptions
in adv
ance of the period to which the
y relat
e being
recognised as contr
act liabilities. Joining fee income
is recognised o
v
er time, on a str
aight-line basis o
ver
the expect
ed dur
ation of the membership. G
ym ret
ail
income is recognised at the point of s
ale. Other r
ev
enue
includes v
arious ancillary re
venue str
eams, which are
recognised in the period t
o which the
y relat
e. T
otal
re
v
enue from gyms r
ecognised in FY22 is £47
.4m (FY21:
£14.
0m) and is r
ecognised in the UK Ret
ail segment.
In the case of re
v
enue from thir
d party commission on
concession sales within the House of F
raser department
stor
es this is recognised when goods ar
e sold t
o the
customer
. As we act as the agent this is st
at
ed at the
v
alue of the commission that the Group r
eceives on the
trans
action rather than the gr
oss re
venue fr
om the sale
of the concessionaires
’ goods.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
121
The Group operat
es lo
y
alty progr
ammes which allow
members to accumulat
e points on pur
chases and
receiv
e e
x
clusiv
e offers and benefits. The f
air value of
the points aw
arded t
o cust
omers is determined r
elativ
e
to the t
ot
al trans
action price and accounted f
or as a
separat
e identifiable component of a sales tr
ansaction.
Re
venue is de
ferr
ed to mat
ch the estimat
ed value o
f
earned lo
yalty points
. Deferr
ed re
v
enue is adjusted
for the v
alue of points that are not e
xpect
ed to be
redeemed b
y cust
omers based on historical r
edemption
rat
es. When the points ar
e redeemed and the Group
fulfils its obligations pursuant t
o the programmes, the
re
v
enue that w
as deferr
ed is recognised. In the UK
points aw
arded e
xpire f
ollowing a period of 12 months
of inactivity
, in Spain they ar
e v
alid until the end of the
follo
wing calendar y
ear
.
Re
venue fr
om gift car
ds and vouchers is r
ecognised
when the cards or v
ouchers ar
e redeemed b
y the
customer
, breakage is r
ecognised when the lik
elihood
of the card or v
oucher being r
edeemed is remot
e or
has expir
ed. for gift car
ds monies receiv
ed r
epresent
deferr
ed re
v
enue prior to the r
edemption.
Credit account int
erest r
ev
enue related t
o int
erest
charged on tr
ade receiv
ables in Studio Ret
ail Limit
ed
is determined using the e
ffectiv
e int
erest method.
Credit account int
erest r
ev
enue is calculated on the
gross carrying amount of the financial asset unless the
financial asset is impaired, in which case the int
erest
re
v
enue is calculated on the amortised cost, af
ter
allo
wance f
or expect
ed cr
edit losses. Credit account
inter
est re
v
enue is recognised o
v
er time
.
Go
v
ernment Grants
Go
vernment gr
ants are not r
ecognised until there is
reasonable assur
ance that the Group will comply with
the conditions attaching t
o them and that the grants will
be receiv
ed.
Grants that ar
e receiv
able as compensation f
or
expenses alr
eady incurred or f
or the purpose of
giving immediate financial support t
o the Gr
oup with
no future r
elated costs ar
e recognised in the Income
Stat
ement at their fair v
alue in the period in which
they become r
eceiv
able.
The Group has r
eceived Go
v
ernment support in the
current and prior period r
elating to business r
at
es relief
and in the prior period relating t
o the Cor
onavirus Job
Ret
ention Scheme (CJRS
) as a result of the Co
vid-
19
pandemic. The amount receiv
ed b
y the Group (including
the UK) in the period in regar
d to the CJRS (
or equiv
alent
where r
eceiv
ed in non-UK territ
ories) w
as £nil (FY21:
appro
x. £80.0m). The amount of business r
ates r
elief
receiv
ed b
y the Group in the period (
or equiv
alent where
receiv
ed in non-UK t
erritories) w
as appro
x. £38.2m (FY21:
£97
.5m). Gov
ernment grants that compens
ate the Gr
oup
for e
xpenses incurred ar
e recognised in pr
ofit or loss
as a deduction against the relat
ed e
xpense ov
er the
periods necessary t
o match them with the r
elat
ed costs.
The amounts quoted hav
e been r
ecognised in Selling,
distribution and administrativ
e expenses in the period.
Ex
ceptional Items
The Group pr
esents ex
ceptional it
ems on the face of
the Income Stat
ement. These ar
e significant items of
income and expense which, because of their siz
e
, nature
and infrequency of the e
v
ents giving rise to them, merit
separat
e present
ation t
o allo
w shareholders t
o better
understand the elements of financial perf
ormance in the
y
ear, so as t
o facilit
at
e comparison with prior periods
and assess trends in financial perf
ormance more r
eadily
.
Finance Income
Finance income is r
eported on an accruals basis using
the effectiv
e interest method.
T
axat
ion
T
ax expense comprises of curr
ent and deferr
ed tax.
T
ax is recognised in the Income St
atement, e
x
cept
to the e
xt
ent it relat
es t
o items r
ecognised in other
comprehensiv
e income or dir
ectly in equity
. The
income tax e
xpense or cr
edit for the period is the
tax pay
able on the curr
ent periods tax
able income,
based on the applicable income tax r
at
e for each
jurisdiction, adjust
ed b
y changes in deferr
ed tax
assets and liabilities attributable t
o t
emporary
differ
ences and to unused losses.
Deferr
ed tax
ation is calculated using the liability method,
on tempor
ary differ
ences arising betw
een the tax bases
of assets and liabilities and their carrying amounts in
the consolidated F
inancial St
atements. Ho
we
ver
, if
the deferr
ed tax arises fr
om the initial r
ecognition of
goodwill or initial recognition of an asset or liability in a
trans
action other than a business combination that at
the time of the trans
action affects neither accounting
nor tax
able profit or loss, it is not accounted f
or
. Deferr
ed
tax on t
empor
ary differences associat
ed with shar
es in
subsidiaries is not pro
vided if re
v
ersal of these t
emporary
differ
ences can be controlled b
y the Group and it is
probable that r
ev
ers
al will not occur in the foreseeable
future
. In addition, t
ax losses available t
o be carried
forw
ar
d as well as other income t
ax credits t
o the Gr
oup
are assessed f
or recognition as def
erred t
ax assets.
Deferr
ed tax is det
ermined using t
ax rat
es and laws that
hav
e been enacted (
or subst
antivel
y enacted) b
y the
balance sheet date and ar
e e
xpected t
o apply when the
relat
ed def
erred t
ax asset is realised or the def
erred t
ax
liability is settled.
Deferr
ed tax liabilit
ies are pr
ovided in full
.
Deferr
ed tax assets ar
e recognised t
o the e
xtent that it
is probable that futur
e tax
able pr
ofits will be available
against which the tempor
ary differ
ences can be utilised.
FRASERS GROUP PL
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Deferr
ed tax assets ar
e offset where ther
e is a legally
enfor
ceable right to offset curr
ent t
ax assets and
liabilities and where the de
ferred t
ax balances r
elate t
o
the same t
ax authority
.
Changes in current and def
erred t
ax assets or liabilities
are r
ecognised as a component of tax e
xpense in the
Income Stat
ement, e
x
cept where the
y relat
e t
o items
that are r
ecorded in other compr
ehensive income
or charged or cr
edited dir
ectly t
o equity in which
case the relat
ed def
erred t
ax is also charged t
o other
comprehensiv
e income or cr
edited dir
ectly t
o equity
.
Deferr
ed tax assets and liabilit
ies are not discount
ed.
Goodwill
Goodwill arising on consolidation is recognised as an
asset and re
vie
wed f
or impairment at least annually or
when a change in circumst
ances or situation indicat
es
that the goodwill has suffer
ed an impairment loss.
The need for impairment is t
ested b
y comparing the
reco
v
erable amount of the cash-gener
ating unit (
CGU)
to which the goodwill balance has been allocat
ed, which
is the higher of fair v
alue less costs t
o sell and value in
use, t
o the carrying v
alue of the goodwill balance. An
y
impairment is recognised immediat
ely in the Income
Stat
ement. Impairment losses on goodwill ar
e not
re
v
ersed. Gains and losses on the disposal of a business
include the amount of goodwill relating t
o that business.
When the non-controlling int
erest of an e
xisting
subsidiary is acquired the carrying v
alue of the
non-controlling int
erests in the Balance Sheet is
eliminated. An
y differ
ence betw
een the amount b
y
which the non-controlling int
erest is adjust
ed and the
fair v
alue of the considerat
ion paid is recognised directl
y
in equity
.
Other Int
angible Assets
Brands, tr
ademarks, licences and customer r
elated
intangibles that ar
e int
ernally generat
ed are not
recor
ded on the Balance Sheet. Acquir
ed brands,
trademarks, licences and cust
omer relat
ed int
angibles
are initiall
y carried on the Balance Sheet at cost. The
fair v
alue of brands, tr
ademarks, licences and cust
omer
relat
ed int
angibles that are acquir
ed by virtue of a
business combination is det
ermined at the date of
acquisition and is subsequently assessed as being the
deemed cost to the Gr
oup.
Expenditure on adv
ertising and pr
omotional activities is
recognised as an e
xpense as incurred.
Amortisation is pr
o
vided on brands, trademarks, licences
and customer r
elat
ed intangibles with a definit
e lif
e
on a straight line basis o
v
er their useful economic liv
es
of betw
een 1 to 15 y
ears and is account
ed for within
the selling, distribution and administrativ
e expenses
category within the Income St
at
ement.
Property
, Plant and E
quipment
Property
, plant and equipment are st
at
ed at historical
cost less depreciation less an
y recognised impairment
losses. Cost includes e
xpenditure that is dir
ectly
attributable t
o the acquisition or construction of these
items
. Subsequent costs are included in the asset’s
carrying amount only when it is pr
obable that future
economic benefits associat
ed with the item will flo
w t
o
the Group and the costs can be measur
ed reliably
.
All other costs, including repairs and maint
enance costs
and labour costs are char
ged to the Income St
at
ement
in the period in which they ar
e incurred.
Depreciation is pr
o
vided on all property
, plant and
equipment other than freehold land and is calculat
ed
on a straight
-line basis, whichev
er is deemed by the
Direct
ors t
o be more appr
opriate
, to allocat
e cost
less assessed residual v
alue, other than assets in the
course of construction, o
v
er the estimated use
ful lives,
as follo
ws:
•
Fr
eehold buildings - 15 y
ears - straight line
•
Leasehold impro
v
ements – 5 y
ears or ov
er the term
of the lease, whiche
v
er is shortest - str
aight line
•
Plant and equipment – betw
een 5 to 10 y
ears -
straight line
A full y
ear of depreciation is char
ged on all additions
in property
, plant and equipment in the period. The
assets’ useful liv
es and r
esidual values ar
e re
vie
w
ed and,
if appropriat
e, adjust
ed at each balance sheet dat
e.
The gain or loss arising on disposal or scrapping of an
asset is determined as the diff
erence betw
een the sales
proceeds, net of selling costs, and the carrying amount
of the asset and is recognised in the Income St
at
ement.
Property
, plant and equipment where the carrying
amount is reco
v
ered principall
y through a sales
trans
action and where a sale is consider
ed t
o be highly
probable ar
e stat
ed at the lo
w
er of carrying v
alue and
fair v
alue less costs t
o sell.
In
v
estment Properties
Inv
estment pr
operties, which are defined as pr
operty
held for r
ental income or capit
al appreciation, ar
e
initially measur
ed at cost being purchase price and
directly attribut
able e
xpenditure
. Where the int
ention is
to hold pr
operty as o
wner occupied, this is recognised as
property
, plant and equipment.
Subsequently inv
estment properties are held at cost
less accumulated depr
eciation and impairment losses.
Inv
estment pr
operties are depr
eciated betw
een 15 y
ears
straight line
, other than the land element which is not
depreciat
ed.
F
air v
alues of the inv
estment propert
ies are disclosed.
FRASERS GROUP PL
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Impairment of Assets Other Than Goodwill
At each balance sheet dat
e, the Dir
ectors r
evie
w the
carrying amounts of the Group
’s tangible and int
angible
assets, other than goodwill, t
o determine whether
there is an
y indication that those assets hav
e suffer
ed
an impairment loss. If an
y such indication exists, the
reco
v
erable amount of the asset in its curr
ent condition
is estimat
ed in order t
o determine the e
xt
ent of the
impairment loss, if any
. Where the asset does not
generat
e cash flo
ws that are independent fr
om other
assets, the Group estimat
es the reco
verable amount of
the CGU to which the asset belongs
. W
ith respect t
o
property
, plant and equipment, each st
ore is consider
ed
to be a CGU and r
e
view
ed for impairment wher
eb
y
changes in circumst
ances indicat
e that the reco
v
erable
amount is lo
wer than the carrying v
alue
.
The reco
v
erable amount is the higher of fair v
alue less
costs to sell and v
alue in use. In assessing the value in
use, the estimat
ed future cash flo
ws are discounted t
o
their present v
alue using a pr
e-t
ax discount rat
e that
reflects curr
ent mark
et assessments of the time v
alue of
money and the risks specific t
o the asset for which the
estimat
es of future cash flo
ws hav
e not been adjust
ed.
If the reco
v
erable amount of an asset (
or CGU) is
estimat
ed to be less than its carrying amount, the
carrying amount of the asset (
CGU) is reduced t
o its
reco
v
erable amount
. An impairment loss is recognised
as an expense immediat
ely
, unless the r
elev
ant asset
is carried at a re-v
alued amount, in which case the
impairment loss is treat
ed as a re
v
aluation decrease t
o
the original historic cost and then as an e
xpense
.
Impairment losses recognised f
or CGU’s to which
goodwill has been allocated ar
e credit
ed initially t
o the
carrying amount of goodwill. An
y remaining impairment
loss is charged pr
o rat
a to the other assets in the CGU
.
Where an impairment loss subsequentl
y re
verses, the
carrying amount of the asset (
CGU) ex
cluding goodwill,
is increased t
o the re
vised estimat
e of its reco
v
erable
amount, but so that the increased carrying amount does
not ex
ceed the carrying amount that would hav
e been
determined had no impairment loss been r
ecognised
for the asset (
CGU) in prior periods. A re
v
ersal of an
impairment loss is recognised in the Income St
at
ement
immediatel
y
.
Assets Held for Sale
Non-current assets classified as held f
or sale are
present
ed separat
ely and measur
ed at the lo
wer of
their carrying amounts immediatel
y prior to their
classification as held for s
ale and their fair v
alue less
costs to sell
. Once classified as held for sale
, the assets
are not subject t
o depreciation or amort
isation.
Discontinued Operations
A discontinued operation is a component of the Gr
oup
’s
business that repr
esents a separat
e major line of
business or geographical ar
ea of operations that has
been disposed of or is held for s
ale, or is a subsidiary
acquired e
x
clusiv
ely with a vie
w to r
esale
. Classification
as a discontinued operation occurs upon dispos
al or
when the operation meets the crit
eria t
o be classified as
held for sale
, if earlier
. When an operation is classified
as a discontinued operation, the r
esults are pr
esented
separat
ely in the consolidat
ed financial stat
ements and
the comparativ
e income st
atement is r
est
ated as if the
operation had been discontinued fr
om the st
art of the
comparativ
e period.
In
v
ent
ories
Inv
ent
ories are v
alued at the lo
w
er of cost and net
realis
able value
. Cost includes the purchase price o
f the
manufactur
ed products, mat
erials, direct labour and
transport costs. Cost is calculat
ed using the w
eight
ed
av
erage cost method. Net r
ealisable v
alue is based on
the estimat
ed selling price less all estimated selling costs.
The Group r
eceives tr
ade discounts and rebat
es from
suppliers based upon the v
olume of orders placed in
a giv
en time window
. T
ypical discounts and rebates
receiv
ed b
y the Group include earl
y settlement discounts,
v
olume rebat
es on inv
ent
ory purchases, supplier r
ebates
based on faulty goods, and mark
eting support. Wher
e
there is sufficient cert
ainty that a discount or rebat
e
will be receiv
ed in the futur
e that relat
es to hist
oric
purchases this is r
eflect
ed in the cost of inv
ent
ories.
Where the r
eceipt of rebat
es is uncert
ain, the cost of
inv
ent
ories is held at full cost price until the rebat
e is
receiv
ed. Recognised r
ebates ar
e released t
o the Income
Stat
ement t
o the ext
ent that the st
ock has been sold.
Cash and Cash Equiv
alents
Cash and cash equiv
alents include cash in hand and
deposits held on call, t
ogether with other short term
highly liquid inv
estments that are readily con
v
ertible to
kno
wn amounts of cash and which are subject t
o an
insignificant risk of changes in v
alue.
Financial Instruments
Financial assets and financial liabilities ar
e recognised in
the Group
’s Balance Sheet when the Group becomes a
party to the contr
actual pro
visions of the instrument.
Financial assets and financial liabilities ar
e initially
measured at f
air value
. T
ransaction costs that ar
e
directly attribut
able t
o the acquisition or issue of
financial assets and financial liabilities (other than
financial assets and financial liabilities at fair v
alue
through pr
ofit or loss) are added t
o or deduct
ed from
the fair v
alue of the financial assets or financial liabilities,
as appropriat
e, on initial r
ecognition. T
ransact
ion costs
FRASERS GROUP PL
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ANNU
AL REPORT 2022
124
directly attribut
able t
o the acquisition of financial assets
or financial liabilities at fair v
alue through pr
ofit or loss
are r
ecognised immediatel
y in profit or loss.
Financial assets ar
e derecognised when the contr
actual
rights to the cash flo
ws from the financial asset expir
e,
or when the financial asset and substantiall
y all the
risks and re
w
ards ar
e transf
erred. A financial liability
is derecognised when it is e
xtinguished, discharged,
cancelled or expir
es.
Financial Assets
Classification and initial measur
ement of financial assets
Ex
cept for those tr
ade receiv
ables that do not cont
ain
a significant financing component and are measur
ed
at the trans
action price in accordance with IFRS 15,
all financial assets are initiall
y measured at fair v
alue
adjusted f
or trans
action costs (where applicable).
Financial assets, other than those designat
ed and
effectiv
e as hedging instruments, are classified into the
follo
wing cat
egories:
•
amortised
cost
•
fair v
alue through pr
ofit or loss (FVTPL)
•
fair v
alue through other compr
ehensiv
e
income (FV
OCI)
All income and expenses r
elating t
o financial assets
that are r
ecognised in profit or loss ar
e present
ed within
finance costs or finance income, e
x
cept for impairment
of trade r
eceiv
ables and amounts due from relat
ed
parties which are pr
esented within selling distribut
ion
and administrativ
e e
xpenses. Impairment losses in
respect of cr
edit customer r
eceiv
ables are disclosed
separat
ely on the f
ace of the Income Stat
ement.
The Group mak
es an assessment of the objectiv
e of
the business model in which a financial asset is held at
a portfolio le
v
el because this best reflects the w
ay the
business is managed and information is pr
o
vided to
management. The information consider
ed includes:
•
The stat
ed policies and objectiv
es for the portf
olio
and the operation of those policies in pr
actice.
These include whether management’s strategy
focuses on earning contr
actual inter
est income or
realising cash flo
ws fr
om the sale of assets;
•
Ho
w the performance of the portfolio is e
v
aluated
and report
ed t
o the Group
’s management;
•
The risks that affect the performance of the business
model and ho
w those risks are managed;
•
Ho
w managers of the business are compensat
ed;
and
•
The frequency
, v
olume and timing of sales of
financial assets in prior periods, the reasons f
or such
sales and e
xpectations about futur
e sales activity
.
F
or the purposes of this assessment, ‘principal
’ is
defined as the fair v
alue of the financial asset on initial
recognition. ‘Int
erest’ is defined as consider
ation for the
time v
alue of money and f
or the credit risk associat
ed
with the principal amount outstanding during a
particular period of time and for other basic lending risks
and costs (e
.g. liquidity risk and administr
ativ
e costs), as
w
ell as a profit mar
gin.
In assessing whether the contractual cash flo
ws ar
e
solely payments of principal and int
erest, the Gr
oup
considers the contractual t
erms of the instrument. This
includes assessing whether the financial asset contains
a contractual t
erm that could change the timing or
amount of contractual cash flo
ws such that it w
ould
not meet this condition. In making this assessment, the
Group considers:
•
contingent ev
ents that would change the amount or
timing of cash flo
ws; and
•
terms that may adjust the contr
actual coupon rat
e
.
Subsequent Measurement of
Financial Assets
Financial assets at amortis
ed cost
Financial assets ar
e measured at amortised cost if
the assets meet the follo
wing conditions (and ar
e not
designated as FVTPL):
•
they ar
e held within a business model whose
objectiv
e is to hold the financial assets and collect
its contractual cash flo
ws; and
•
the contractual t
erms of the financial assets giv
e rise
to cash flo
ws that are solely payments of principal
and inter
est on the principal amount outst
anding.
Aft
er initial recognition, these ar
e measured
at amortised cost using the effect
ive int
er
est
method. Discounting is omitted wher
e the effect o
f
discounting is immat
erial. The Group
’s cash and cash
equiv
alents, trade and most other receiv
ables fall into
this category o
f financial instruments.
Financial assets at f
air value through pr
ofit or loss (FVTPL)
Financial assets that ar
e held within a differ
ent business
model other than ‘hold to collect’ or ‘hold t
o collect and
sell’ are cat
egorised at fair v
alue through profit and
loss. F
urther
, financial assets whose contractual cash
flo
ws are not solely payments o
f principal and inter
est
are account
ed for at FVTPL. All deriv
ativ
e financial
instruments fall int
o this category
, ex
cept for those
designated and e
ffectiv
e as hedging instruments, for
which the hedge accounting requir
ements apply
(see belo
w).
FRASERS GROUP PL
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AL REPORT 2022
125
Assets in this category ar
e measured at f
air v
alue with
gains or losses recognised in pr
ofit or loss. The fair v
alues
of financial assets in this cat
egory are det
ermined
b
y ref
erence t
o activ
e market tr
ansactions or using a
v
aluation technique wher
e no activ
e market e
xists.
Financial assets at f
air value through o
ther comprehensive
income (FV
OCI)
On initial application of IFRS 9 the Group made the
irre
v
ocable election to account f
or long term financial
assets at fair v
alue through other compr
ehensiv
e
income (FV
OCI) giv
en these are not held f
or trading
purposes. The election has been made on an
instrument-b
y-instrument basis, only qualifying
dividend income is recognised in pr
ofit and loss,
changes in fair v
alue are r
ecognised within OCI and
nev
er reclassified to pr
ofit and loss, ev
en if the asset
is impaired, sold or otherwise der
ecognised.
Impairment of financial assets
IFRS 9’s impairment requir
ements use more f
orwar
d-
looking information t
o recognise e
xpect
ed credit losses –
the ‘
expect
ed credit loss (E
CL) model’. Instruments within
the scope of the requir
ements include trade r
eceivables,
other receiv
ables, amounts due fr
om relat
ed parties,
loan commitments and some financial guarant
ee
contracts (f
or the issuer) that are not measur
ed at fair
v
alue through pr
ofit or loss.
Other receivables and amounts due fr
om relat
ed parties
Recognition of cr
edit losses is no longer dependent on
the Group first identifying a cr
edit loss ev
ent. Inst
ead
the Group considers a br
oader range of inf
ormation
when assessing credit risk and measuring e
xpect
ed
credit losses, including past e
v
ents, current conditions,
reasonable and support
able for
ecasts that affect the
expect
ed collect
ability of the future cash flo
ws of
the instrument.
In applying this forw
ard-looking approach, a distinction
is made betw
een:
•
financial assets that hav
e not deterior
ated
significantly in credit quality since init
ial recognition
or that hav
e low cr
edit risk (‘Stage 1’);
•
financial assets that hav
e deterior
ated significantl
y
in credit quality since initial r
ecognition and whose
credit risk is not lo
w (‘St
age 2’); and
•
financial assets where the cr
edit risk has increased
to a point at which it is consider
ed credit impair
ed
(‘Stage 3’)
‘12-month expect
ed cr
edit losses’ are r
ecognised for the
first category while ‘
lifetime e
xpected cr
edit losses’ ar
e
recognised f
or the second and third cat
egories.
Measurement of the e
xpect
ed credit losses is
determined b
y a probability-w
eight
ed estimate of cr
edit
losses o
ver the e
xpect
ed life of the financial instrument.
T
rade receivables
The Group mak
es use of a simplified approach in
accounting for tr
ade receiv
ables and recor
ds the loss
allo
wance as lif
etime e
xpected cr
edit losses. These
are the e
xpect
ed shortfalls in contractual cash flo
ws,
considering the potent
ial for default at an
y point during
the life of the financial instrument. In calculat
ing, the
Group uses its hist
orical e
xperience, e
xternal indicat
ors
and forw
ar
d-looking information t
o calculate the
expect
ed cr
edit losses using a pro
vision matrix.
Credit cust
omer rec
eivables
12-month E
CLs are used for St
age 1 performing assets
and a lifetime E
CL is used for st
ages 2 and 3. An asset
will mo
ve fr
om Stage 1 t
o St
age 2 when there is e
vidence
of significant increase in cr
edit risk since the asset
originated and int
o St
age 3 when it is credit impair
ed.
Should the credit risk impr
ov
e so that the assessment of
credit risk at the r
eporting date is consider
ed not t
o be
significant any longer
, assets return to an earlier st
age in
the E
CL model.
A financial asset is considered t
o hav
e experienced a
significant increase in cr
edit risk since initial recognition
where ther
e has been a significant increase in the
remaining lif
etime probability of def
ault of the asset. The
Group assumes that the cr
edit risk on a financial asset
has increased significantl
y if it is more than 30 days past
due, has been placed on an arr
angement to pay less
than the standar
d requir
ed minimum payment (e
x
cept
where a payment holiday w
as gr
anted in r
esponse to
Co
vid-
19) or has had inter
est suspended.
In line with IFRS 9
, a financial asset is considered t
o be
in default when it is mor
e than 90 days past due and/
or
when the borro
w
er is unlik
ely t
o pay its obligations in full.
Days past due ar
e determined b
y counting the number
of days since the earliest elapsed due dat
e in respect
of which the minimum payment has not been receiv
ed.
Due dates ar
e det
ermined without considering any
grace period that might be av
ailable t
o the borro
w
er
.
When determining whether the cr
edit risk of a
financial asset has increased significantl
y since initial
recognition and when estimat
ing ECLs, the Gr
oup
considers reasonable and support
able information
that is rele
v
ant and available without undue cost or
effort
. This includes both quantitativ
e and qualit
ativ
e
information and anal
ysis based on the Group
’s
historical e
xperience and informed cr
edit assessment
including forw
ar
d looking information.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
126
The ke
y assumptions in the E
CL calculations are
:
•
Probability of De
fault (“PD”) - an estimat
e of the
likelihood o
f default o
v
er 12 months and the
expect
ed lifet
ime of the debt;
•
Exposure at Def
ault (“EAD”) - an estimat
e of the
exposur
e at a future de
fault dat
e, t
aking into
account expect
ed changes in the e
xposure aft
er the
reporting dat
e, including r
epayments of principal
and inter
est, whether scheduled b
y the contract
or otherwise and accrued inter
est from missed
payments; and
•
Loss Giv
en Default (“L
GD
”) - an estimate of the
loss arising in the case where a def
ault occurs at a
giv
en time. It is based on the diff
erence betw
een
the contractual cash flo
ws due and those that the
Group w
ould e
xpect to r
eceiv
e, discount
ed at the
original effectiv
e interest r
ate
. The ke
y ar
eas of
estimation are ar
ound the v
alue that the Group will
reco
v
er in respect of the de
fault
ed debt and the
timing of such reco
v
eries.
The Group incorporat
es f
orwar
d-looking information int
o
its measurement of E
CLs. This is achie
ved b
y dev
eloping
four pot
ential economic scenarios and modelling E
CLs
for each scenario
. The outputs from each scenario
are combined; using the estimat
ed lik
elihood of each
scenario occurring to deriv
e a probability weight
ed E
CL.
Management judgement is requir
ed in setting
assumptions around pr
obabilities of def
ault and the
w
eighting of economic scenarios in particular which
hav
e a material impact on the r
esults indicated b
y the
E
CL model.
Acquir
ed loans that meet the Group
’s definition of
default (i.
e., those that ar
e more than 90 day
s past
due and/
or when the borro
w
er is unlik
ely t
o pay
its obligations in full) at acquisition are tr
eat
ed as
purchased or originat
ed credit
-impair
ed (“POCI”) assets.
These assets attract a lifetime E
CL allo
w
ance o
ver the
full term o
f the loan, ev
en when these loans no longer
meet the definition of def
ault post acquisition. The
Group does not originat
e credit
-impair
ed loans.
Loss allo
wances f
or financial assets are deduct
ed
from the gr
oss carrying amount of the asset.
Impairment losses relat
ed t
o Studio Ret
ail’s
trade r
eceivables ar
e separat
ely disclosed in the
consolidated income st
at
ement.
Financial Liabilities
Classification and measurement o
f financial liabilities
The Group
’s financial liabilities include borrowings and
lease liabilities, trade and other pay
ables and deriv
ativ
e
financial instruments.
Financial liabilities ar
e initially measur
ed at fair v
alue,
and, where applicable
, adjusted f
or trans
action costs
unless the Group designat
ed a financial liability at fair
v
alue through pr
ofit or loss. Subsequently
, financial
liabilities are measur
ed at amortised cost using the
effectiv
e interest method e
x
cept for deriv
ativ
es and
financial liabilities designat
ed at FVTPL, which are
carried subsequently at fair v
alue with gains or losses
recognised in pr
ofit or loss (other than deriv
ativ
e
financial instruments that are designat
ed and eff
ective
as hedging instruments).
All inter
est
-relat
ed charges and, if applicable
, fair v
alue
changes in currency deriv
ativ
e instruments that are
report
ed in profit or loss ar
e included within finance
costs or finance income. F
air value changes in equity
deriv
ative financial instruments ar
e recognised in
inv
estment income or inv
estment costs.
Derivative financial instruments and hedge accounting
Deriv
ative financial instruments ar
e account
ed for
at fair v
alue through pr
ofit and loss (FVTPL) ex
cept
for deriv
ativ
es designat
ed as hedging instruments
in cash flo
w hedge relationships, which r
equire a
specific accounting treatment
. T
o qualify for hedge
accounting, the hedging relationship must meet all of
the follo
wing requir
ements:
•
there is an economic r
elationship betw
een the
hedged item and the hedging instrument;
•
the effect of cr
edit risk does not dominat
e the value
changes that result fr
om that economic relationship;
and
•
the hedge ratio of the hedging r
elationship is the
same as that r
esulting from the quantity of the
hedged item that the ent
ity actually hedges and the
quantity of the hedging instrument that the entity
actually uses t
o hedge that quantity of hedged it
em.
W
ritt
en option contracts do not qualify for hedge
accounting and fair v
alue mo
v
ements are r
ecognised
directly in the Income St
at
ement.
F
or the reporting periods under r
evie
w
, the Group
has designated cert
ain forw
ard currency contr
acts as
hedging instruments in cash flo
w hedge relationships.
These arrangements hav
e been ent
ered int
o to mitigat
e
for
eign currency e
x
change risk arising from cert
ain
highly probable s
ales and purchases tr
ansactions
denominated in f
oreign curr
encies.
FRASERS GROUP PL
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ANNU
AL REPORT 2022
127
All deriv
ative financial instruments used f
or hedge
accounting are r
ecognised initially at f
air value and
report
ed subsequently at f
air value in the Balance Sheet
.
T
o the ext
ent that the hedge is effect
ive
, changes in
the fair v
alue of deriv
ativ
es designated as hedging
instruments in cash flo
w hedges are recognised in other
comprehensiv
e income and included within the cash
flo
w hedge reserv
e in equity
. An
y ineffectiv
eness in the
hedge relationship is r
ecognised immediatel
y in profit
or loss.
At the time the hedged it
em affects pr
ofit or loss,
any gain or loss pr
eviousl
y recognised in other
comprehensiv
e income is r
eclassified from equity
to pr
ofit or loss and present
ed as a r
eclassification
adjustment within other comprehensiv
e income
.
Ho
we
v
er
, if a non-financial asset or liability is recognised
as a result of the hedged tr
ansaction, the gains and
losses pre
viously r
ecognised in other comprehensiv
e
income are included in the initial measur
ement of the
hedged item.
If a for
ecast transaction is no longer e
xpect
ed to
occur
, any r
elated gain or loss r
ecognised in other
comprehensiv
e income is tr
ansferred immediat
ely
to pr
ofit or loss. If the hedging r
elationship ceases
to meet the e
ffectiv
eness conditions or when the
relationship no longer meets the crit
eria for hedge
accounting, hedge accounting is discontinued and
the relat
ed gain or loss is held in the equity reserv
e
until the for
ecast transact
ion occurs.
Pro
visions
A pro
vision is recognised when the Gr
oup has a present
legal or constructiv
e obligation as a result of a past
ev
ent, it is probable that an outflow of r
esources will be
requir
ed to settle the obligation and a r
eliable estimat
e
can be made of the amount of the obligation.
The Group pr
ovides f
or its legal responsibility for
dilapidation costs follo
wing advice from chart
er
ed
surv
ey
ors and pr
evious e
xperience of exit costs
. The
estimat
ed cost of fulfilling the leasehold dilapidations
obligations is discount
ed to pr
esent value and anal
ysed
betw
een non-capital and capit
al components. The
capital element is depr
eciat
ed ov
er the lif
e of the
asset. The non-capital element is t
ak
en t
o the Income
Stat
ement in the first y
ear of the lease where the cost
it repr
esents is of no lasting benefit t
o the Group or
its landlord. ‘W
ear and tear’ costs are e
xpensed t
o
the Income Stat
ement. Pr
o
visions for onerous lease
contracts ar
e recognised when the Gr
oup believ
es the
unav
oidable costs of meeting the lease obligations
ex
ceed the economic benefits expect
ed to be r
eceiv
ed
under the lease. Legal pr
o
visions (including settlements
and court fees) ar
e recognised based on advice fr
om the
Group
’s lawyers when it is probable that ther
e will be an
outflo
w of resour
ces and a reliable estimat
e can
be made.
Other pro
visions include management’s best estimate o
f
restructuring, emplo
yment r
elated costs and other claims.
Any r
eimbursement that the Group is virtuall
y certain t
o
collect from a thir
d party with respect t
o the obligation
is recognised as a separ
ate asset
. How
ev
er, this asset
may not ex
ceed the amount of the related pr
o
vision.
No liability is recognised if an outflo
w of economic
resour
ces as a result of pr
esent obligations is not
probable
. Such situations are disclosed as contingent
liabilities unless the outflo
w of resour
ces is remot
e.
Leases
The Group assesses whether a contract is or cont
ains
a lease, at inception of the contr
act. Lease liabilities
are measur
ed at the present v
alue of the contractual
payments due to the lessor o
ver the lease t
erm, with
the discount rat
e det
ermined by r
ef
erence t
o the rat
e
implicit in the lease unless (as is typically the case) this
is not readil
y determinable
, in which case the Group
’s
increment
al borro
wing r
ate on commencement of
the lease is used. V
ariable lease payments are only
included in the measurement of the lease liability if the
y
depend on an index or r
at
e. In such cases, the initial
measurement of the lease liability assumes the v
ariable
element will remain unchanged thr
oughout the lease
term. Other v
ariable lease payments such as rev
enue
linked pr
operty leases are e
xpensed in the period t
o
which they r
elat
e.
On initial recognition, the carrying v
alue of the lease
liability also includes:
•
amounts expect
ed t
o be payable under an
y r
esidual
v
alue guarant
ee;
•
the ex
ercise price of any pur
chase option grant
ed
in fav
our of the Group if it is r
easonably cert
ain that
the option will be ex
ercised; and
•
any penalties pay
able f
or terminating the lease
, if
the term of the lease has been est
imated on the
basis of the terminat
ion option being ex
ercised.
Subsequent to init
ial measurement lease liabilities
increase as a r
esult of inter
est charged at the e
ffectiv
e
rat
e on the balance outst
anding and are reduced f
or
lease payments made.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
128
Right-of
-use assets are initiall
y measured at the amount
of the lease liability
, reduced for an
y lease incentiv
es
(payments made b
y a lessor to a lessee associat
ed
with a lease, or the r
eimbursement or assumption b
y a
lessor of costs of a lessee) receiv
ed or impairment, and
increased f
or:
•
lease payments made at or befor
e commencement
of the lease;
•
initial direct costs incurr
ed; and
•
the amount of any pr
o
vision recognised wher
e
the Group is contr
actually requir
ed t
o dismantle,
remo
v
e or rest
ore the leased asset, pr
o
viding it
meets the Group
’s property, plant and equipment
capitalis
ation policy
.
When an indication of impairment is identified,
right-of
-use assets are t
est
ed for impairment in
accordance with IAS 36 b
y comparing the r
ecov
er
able
amount (higher of v
alue in use and fair v
alue less costs
of disposal) with its carrying amount. The right
-of-use
assets are pr
esented within pr
operty
, plant and
equipment in the consolidated Balance Sheet
.
Subsequent to init
ial measurement, right
-of-use
assets are amortised on a str
aight-line basis o
v
er the
remaining t
erm of the lease or o
v
er the remaining
economic life of the asset if this is judged t
o be short
er
than the lease term.
When the Group r
evises its estimat
e of the t
erm of
any lease (because
, for e
x
ample, it r
e-assesses the
probability of a lessee e
xt
ension or termination option
being ex
ercised), it adjusts the carrying amount of the
lease liability to r
eflect the payments t
o mak
e ov
er the
re
vised t
erm, which are discount
ed at a re
vised discount
rat
e. The carrying v
alue of lease liabilities is r
evised using
the original discount rat
e when the v
ariable element of
future lease payments dependent on a r
ate or inde
x is
re
vised. In both cases an equiv
alent adjustment is made
to the carrying v
alue of the right-of-use asset, with
the re
vised carrying amount being amortised o
v
er the
remaining (r
evised) lease t
erm.
When the Group r
enegotiates the contr
actual t
erms of
a lease with the lessor
, the accounting depends on the
nature of the modification:
•
if the renegotiation r
esults in one or more
additional assets being leased for an amount
commensurat
e with the st
andalone price for the
additional rights-of-use obt
ained, the modification
is accounted f
or as a separat
e lease in accordance
with the abo
ve policy
•
in all other cases where the r
enegotiation increases
the scope of the lease (whether that is an ext
ension
to the lease t
erm, or one or mor
e additional assets
being leased), the lease liability is remeasur
ed using
the discount rat
e applicable on the modification
date
, with the right
-of use asset being adjusted b
y
the same amount
•
if the renegotiation r
esults in a decrease in the
scope of the lease, both the carrying amount of the
lease liability and right-of
-use asset are r
educed
b
y the same proport
ion to r
eflect the partial or
full terminat
ion of the lease with any diff
erence
recognised in pr
ofit or loss. The lease liability is
then further adjusted t
o ensur
e its carrying amount
reflects the amount o
f the renegotiat
ed payments
o
ver the r
enegotiat
ed term, with the modified lease
payments discounted at the r
at
e applicable on the
modification dat
e. The right
-of-use asset is adjust
ed
b
y the same amount.
Sale and leaseback
On entering int
o a sale and leaseback tr
ansaction
the Group det
ermines whether the transf
er of the
assets qualifies as a sale (sat
isfying a performance
obligation in IFRS 15 ‘Re
v
enue from Contr
acts with
Customers
’). Where the tr
ansfer is a sale and pr
o
viding
the trans
action is on market t
erms then the pr
evious
carrying amount of the underlying asset is split betw
een:
•
a right-of
-use asset arising from the leaseback
(being the proportion of the pr
evious carrying
amount of the asset that relat
es t
o the rights
ret
ained), and
•
the rights in the underlying asset ret
ained b
y the
buy
er-lessor at the end of the leaseback.
The Group r
ecognises a portion of the tot
al gain or loss
on the sale
. The amount recognised is calculat
ed by
splitting the tot
al gain or loss int
o:
•
an unrecognised amount r
elating to the rights
ret
ained b
y the seller-lessee, and
•
a recognised amount r
elating to the
buy
er-lessor’s rights in the underlying asset at the
end of the leaseback.
The leaseback itself is then accounted f
or under IFRS 16.
Rent
al income from oper
ating leases where the Gr
oup
acts as a lessor is recognised on a str
aight-line basis o
v
er
the term of the r
ele
vant lease
.
T
reasury Shares
The purchase price of the Gr
oup
’s o
wn shares that
it acquires is r
ecognised as ‘T
reasury shares’ within
equity
. When shares ar
e transf
erred out of tr
easury
the differ
ence between the mark
et v
alue and the
av
erage pur
chase price of shares sold out of tr
easury is
transf
erred t
o ret
ained earnings.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
129
Emplo
y
ee Benefit T
rust
An Emplo
yee Bene
fit T
rust has been established for the
purposes of satisfying cert
ain share-based aw
ar
ds. The
Group has ‘
de-fact
o
’ control o
ver the special purpose
entity
. This T
rust is fully consolidated within the accounts
.
The cost of shares acquir
ed by the Sports Dir
ect
Emplo
yee Bene
fit T
rust is recognised within ‘
Own Share
reserv
e
’ in equity
.
Share-Based Payments
The Group issues equity-settled shar
e-based payments
to cert
ain Dir
ectors and emplo
y
ees. These are measur
ed
at fair v
alue at the dat
e of grant, which is e
xpensed to
the consolidated Income St
at
ement on a straight
-line
basis o
ver the v
esting period, with the corr
esponding
credit going t
o equity
.
Non-market v
esting conditions are not tak
en int
o
account in determining gr
ant dat
e fair v
alue. Inst
ead,
they ar
e t
aken int
o account b
y adjusting the number of
equity instruments to v
est. At the end of each reporting
period the Group r
evises its estimat
es of the number
of options that are e
xpect
ed to v
est based on the non
market v
esting and service conditions. Any r
evisions, if
any
, ar
e recognised in pr
ofit and loss with an adjustment
to equity
.
F
air v
alue is calculated using an adjust
ed form of
the Black
-Scholes model which includes a Mont
e
Carlo simulation model that t
akes int
o account the
ex
ercise price, the t
erm of the option, the impact of
dilution (where mat
erial), the share price at gr
ant dat
e
and the expect
ed price v
olatility of the underlying
share
, the expect
ed dividend yield, and the risk
-free
inter
est rat
e for the t
erm of the scheme
. The expect
ed
staff numbers used in the model has been adjust
ed,
based on management’s best estimate
, for the
effects of non-
transf
erability
, ex
ercise restrictions, and
behavioural consider
ations.
F
or cash-settled share-based payment tr
ansactions, the
Group measur
es the services receiv
ed and the liability
incurred at the f
air value of the liability
. Until the liability
is settled, the Group r
emeasures the fair v
alue of the
liability at the end of each reporting period and at
the date o
f settlement, with any changes in fair v
alue
recognised in the Income St
at
ement for the period.
The credit for the shar
e based payment charge does
not equal the charge per the Income St
at
ement as it
ex
cludes amounts recognised in the Balance Sheet in
relation t
o the e
xpected national insur
ance contributions
for the shar
es.
Equity Instruments
An equity instrument is any contr
act that evidences
a residual int
erest in the assets of the Gr
oup aft
er
deducting all of its liabilities. E
quity instruments issued
b
y the Group ar
e recor
ded at the proceeds receiv
ed, net
of any dir
ect issue costs.
F
or
eign Currencies
The present
ational currency of the Gr
oup is sterling
. The
functional currency of the Compan
y is also st
erling.
F
oreign curr
ency trans
actions are tr
anslated int
o st
erling
using the ex
change rates pr
ev
ailing on the dates of the
trans
actions. Ex
change differ
ences of the Company
arising on the settlement of monetary it
ems, and on
the retr
anslation of monetary it
ems, ar
e included in the
Income Stat
ement for the period.
Ex
change differ
ences arising on the retr
anslation of
non-monetary it
ems carried at fair v
alue are included
in the Income Stat
ement for the period e
x
cept for
differ
ences arising on the retr
anslation of non-monetary
items in r
espect of which gains and losses are
recognised in other compr
ehensiv
e income. for such
non-monetary it
ems, an
y ex
change component of
that gain or loss is also recognised dir
ectly in other
comprehensiv
e income
. Monetary assets and liabilities
denominated in f
oreign curr
encies are tr
anslated at
the rat
e of e
x
change ruling at the balance sheet date
.
Non-monetary it
ems that ar
e measured in t
erms of
historical cost in a f
oreign curr
ency are not r
etranslat
ed.
Non-monetary it
ems that ar
e held at valuation ar
e
translat
ed at the for
eign ex
change rate at the dat
e of
the v
aluation.
On consolidation, the assets and liabilities of for
eign
operations which hav
e a functional curr
ency other than
sterling ar
e translat
ed int
o sterling at f
oreign e
x
change
rat
es ruling at the balance sheet dat
e. The re
v
enues
and expenses of these subsidiary undert
akings ar
e
translat
ed at av
erage r
ates applicable in the period. All
resulting e
x
change differ
ences are r
ecognised in other
comprehensiv
e income and document
ed in a separat
e
component of equity
.
When a for
eign operation is sold, the cumulativ
e
ex
change differences that hav
e been recognised as
a separat
e component of equity are r
eclassified from
equity to the Income St
at
ement when the disposal
is recognised.
In order t
o mitigat
e its exposur
e to cert
ain for
eign
ex
change risks, the Group enters int
o forw
ard and option
contracts (see Chief Ex
ecutive
’s Report and Business
Re
view and the cash flo
w hedging accounting policy).
Dividends
Dividends are r
ecognised as a liability in the Group
’s
Financial St
at
ements and as a deduction from equity in
the period in which the dividends are declar
ed. Where
such dividends are pr
oposed subject to the appr
o
val of
shareholders, the dividends ar
e regar
ded as declared
once shareholder appr
ov
al has been obtained and they
are no longer at the discr
etion of the Compan
y
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
130
Mat
eriality
In preparing the F
inancial Stat
ements, the Boar
d
considers both quantit
ative and qualit
ativ
e fact
ors in
forming its judgements, and r
elated disclosur
es, and
are mindful of the need t
o best serv
e the inter
ests of its
stak
eholders and t
o av
oid unnecessary clutt
er borne of
the disclosure of immat
erial it
ems.
In making this assessment the Board considers the
nature of each it
em, as w
ell as its size
, in assessing
whether any disclosur
e omissions or misst
atements
could influence the decisions of users of the
Financial St
at
ements.
Post-emplo
yment obligations
F
or defined benefit plans, obligations ar
e measured at
discounted pr
esent v
alue (using the project
ed unit credit
method) and plan assets are r
ecorded at f
air value
.
The operating and financing costs of such plans ar
e
recognised separ
atel
y in the Group Income St
atement
and actuarial gains and losses are r
ecognised in the
Group st
at
ement of comprehensiv
e income/(loss).
Payments t
o defined contribution schemes are
recognised as an e
xpense when the
y fall due.
Share buybacks
Share buybacks ar
e undertak
en fr
om time to time
.
Shares pur
chased are typically held in as T
reasury
shares at the t
ot
al consideration paid or pay
able. The
Group also uses contingent shar
e purchase contr
acts
and irre
v
ocable closed period buyback progr
ammes;
the obligation t
o purchase shares is r
ecognised in
full at the inception of the contract, e
v
en when that
obligation is conditional on the share price
. An
y
subsequent reduction in the obligation caused b
y the
expiry or t
ermination of a contr
act is credit
ed back
to equity at that t
ime. No gain or loss is r
ecognised
on the purchase
, sale, issue or cancellat
ion of the
Group
’s own equity instruments.
Ne
w Accounting St
andards, Interpr
et
ations
and Amendments Adopt
ed By The Group
The Group has not early adopt
ed an
y new accounting
standar
d, int
erpret
ation or amendment that has been
issued but is not effectiv
e. The Group has applied for the
first time the follo
wing ne
w standar
ds:
•
Inter
est Rat
e Benchmark Ref
orm – Phase 2 –
amendments to IFRS 9
, IAS 39, IFRS 7
, IFRS 4 and
IFRS 16.
•
CO
VID-
19 relat
ed rent concessions be
y
ond 30 June
2021 – amendment t
o IFRS 16.
•
Configuration or Cust
omisat
ion Costs in a Cloud
Computing Arrangement (IAS 38 Int
angible Assets) –
Agenda Paper 2.
•
Amendments to IFRS 3
, IAS 37
, Annual impro
v
ements
cy
cle 2018-2020
.
By adopting the abo
v
e, ther
e has been no material
impact on the Financial St
at
ements.
Int
ernational Financial R
eporting
St
andards (“St
andards”) in Issue but not
Y
et Eff
ectiv
e
At the dat
e of authorisation of these consolidat
ed
Financial St
at
ements, there ar
e no standar
ds in
issue from the Int
ernational Accounting St
andar
ds
Board (“IASB
”) or International F
inancial Reporting
Interpr
et
ations Committee (“IFRIC”) which ar
e effectiv
e
for annual accounting periods beginning on or aft
er
25 April 2022 that will hav
e a material impact on these
Financial St
at
ements.
2.
CRITICAL A
CCOUNTING
JUDGEMENTS
AND
ESTIMA
TES
Climat
e Change
W
e have consider
ed the potential impact o
f climate
change in preparing these financial st
at
ements.
T
ackling climate change is a global imper
ative
, measures
which support climate change init
iatives and our
wider ESG agenda continue t
o be ke
y components of
our strat
egic direction, support
ing sustainability
, the
broader social agenda and consumer choice
. The risks
associated with climat
e change hav
e been deemed t
o
be arising in the medium to long t
erm, ho
w
ev
er we are
w
orking to mitigat
e these risks as det
ailed within the
T
CFD section of this annual r
eport.
W
e have consider
ed climate change as part of our
cash flo
w projections within going concern, impairment
assessments and viability
, and the impact of climate
change is not deemed to hav
e a significant impact on
these assessments currentl
y and theref
ore the
y are not
deemed to be a k
e
y source of estimat
ion uncertainty
.
The Group will continue t
o monitor the impacts o
f
climate change o
ver the coming y
ears.
The critical accounting estimat
es and judgements made
b
y the Group r
egarding the futur
e or other ke
y sources
of estimation, uncert
ainty and judgement that may have
a significant risk of giving rise to a mat
erial adjustment
to the carrying v
alues of assets and liabilities within the
next financial period ar
e:
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
131
Critical Account
ing Judgements
Determining R
elated P
arty Relationships
Management determines whether a r
elat
ed party
relationship e
xists b
y assessing the nature of the
relationship b
y refer
ence to the r
equirements of IAS 2
4,
Relat
ed Party Disclosures
. This is in order t
o determine
whether significant influence exists as a r
esult of control
,
shared dir
ectors or par
ent companies, or close family
relationships
. The lev
el at which one party may be
expect
ed t
o influence the other is also considered f
or
trans
actions inv
olving close family r
elationships.
Control and Significant Influence Ov
er
Cert
ain Entities
Under IAS 28 Inv
estments in Associat
es and Joint
V
entures if an entity holds 20% or mor
e of the v
oting
po
wer of the in
v
estee
, it is presumed that the entity has
significant influence, unless it can clearl
y demonstrat
e
that this is not the case. During the period the Gr
oup
has held great
er than 20% of the v
oting rights of Studio
Ret
ail Group Plc (Studio Ret
ail Limit
ed and certain
assets of Studio Ret
ail Group Plc w
er
e acquired out of
administration during the period) and Mulberry Gr
oup
Plc, whereb
y management consider that the Gr
oup
does not hav
e significant influence ov
er these entities for
combinations of the follo
wing r
easons:
•
The Group does not hav
e any r
epresent
ation on
the board of dir
ectors of the in
v
estee other than a
Fr
asers Group r
epresent
ativ
e having an observ
er
role on the boar
d of Studio Ret
ail Group Plc bef
ore
it w
as acquired. Management hav
e re
vie
w
ed the
terms of the observ
er arrangement for the period
befor
e acquisition and hav
e concluded that this
did not giv
e them the right to participat
e in or
influence the financial or operating decisions of
Studio Ret
ail Group Plc. Studio Ret
ail Gr
oup Plc
could terminat
e this arr
angement at any time
, and
could determine which parts o
f the Board meetings
the repr
esentativ
e could be present at and what
information the
y w
ere giv
en access t
o. It should
be noted the F
rasers Gr
oup repr
esent
ative did not
attend an
y board meetings in full or part during the
reporting period;
•
There is no participation in decision making and
strat
egic processes, including participat
ion in
decisions about dividends or other distributions;
•
There hav
e been no mat
erial transactions betw
een
the entity and these inv
est
ee companies;
•
There has been no int
erchange of managerial
personnel;
•
No non-public essential t
echnical management
information is pr
o
vided to the in
vest
ee
In assessing the lev
el of control that management have
o
ver cert
ain entities, management will consider the
v
arious aspects that allow management t
o influence
decision making. This includes the le
vel of shar
e
o
wnership, board membership
, the lev
el of investment
and funding and the ability of the Group t
o influence
operational and str
ategic decisions and e
ffect its returns
through the e
x
ercise of such influence
. If management
w
ere t
o consider that the Group does hav
e significant
influence o
ver these ent
ities then the equity method
of accounting w
ould be used and the percent
age
shareholding multiplied b
y the results of the inv
est
ee in
the period w
ould be recognised in pr
ofit or loss.
The Group holds 49% of the shar
e capit
al of F
our
(Holdings) Limited which is account
ed for as an
associate using the equity method. The Gr
oup does
not hav
e any r
epresent
ation on the board of dir
ect
ors
and no participation in decision making about rele
v
ant
activities such as est
ablishing operating and capit
al
decisions, including budgets, appointing or remuner
ating
ke
y management personnel or service pr
oviders and
terminat
ing their services or employment
. How
ev
er
, in
prior periods the Group has pr
ovided F
our (Holdings)
Limited with a significant loan. A
t the reporting dat
e, the
amount o
wed b
y Four (Holdings) Limit
ed for this loan
tot
alled £60
.0m (£21.
6m net of amounts recognised in
respect of loss allo
w
ance). The Group is s
atisfied that
the exist
ence of these tr
ansactions pro
vides evidence
that the entity has significant influence o
v
er the inv
estee
but in the absence of any other rights, in isolat
ion it is
insufficient to meet the contr
ol crit
eria of IFRS 10, as the
Group does not hav
e po
w
er ov
er Four (Holdings) Limit
ed.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
132
Cash Flo
w Hedging
The Group uses a range o
f forw
ard and option contr
acts
that are ent
ered int
o at the same t
ime, the
y are in
contemplat
ion with one another and have the s
ame
counterparty
. A judgement is made in determining
whether there is an economic need or subst
antiv
e
business purpose for structuring the tr
ansactions
separat
ely that could not also hav
e been accomplished
in a single trans
action. Management are of the vie
w
that there is a subst
antiv
e distinct business purpose for
entering int
o the options and a str
ategy f
or managing
the options independently of the f
orwar
d contracts
.
The forw
ard and options contr
acts are ther
efor
e not
view
ed as one instrument and hedge accounting for the
forw
ar
ds is permitted.
Under IFRS 9 in order t
o achie
ve cash flo
w hedge
accounting, for
ecast transact
ions (primarily Euro
denominated s
ales and USD denominated pur
chases)
must be considered t
o be highly pr
obable. The hedge
must be expect
ed t
o be highly eff
ectiv
e in achieving
offsetting changes in cash flo
ws attributable t
o the
hedged risk. The forecast tr
ansaction that is the subject
of the hedge must be highly pr
obable and must present
an exposur
e t
o variations in cash flo
ws that could
ultimat
ely affect pr
ofit or loss. Management hav
e
re
vie
wed the det
ailed for
ecasts and gro
wth assumptions
within them and are s
atisfied that for
ecasts in which
the cash flo
w hedge accounting has been based meet
the criteria per IFRS 9 as being highl
y probable f
orecast
trans
actions. Should the for
ecast lev
els not pass the
highly probable t
est, an
y cumulativ
e fair v
alue gains and
losses in relation t
o either the entir
e or the ineffectiv
e
portion of the hedged instrument w
ould be recognised
in the Consolidat
ed Income Stat
ement.
Management considers v
arious fact
ors when
determining whether a f
orecast tr
ansaction is highly
probable
. These fact
ors include detailed s
ales and
purchase f
orecasts b
y channel, geogr
aphical area and
seasonality
, conditions in tar
get markets and the impact
of expansion in ne
w ar
eas. Management also consider
any change in alt
ernativ
e cust
omer sales channels that
could impact on the hedged trans
action.
If the for
ecast transactions w
ere determined t
o be
not highly probable and all hedge account
ing w
as
discontinued, amounts in the Hedging reserv
e of up t
o
£55.3m (FY21: £11.5m
) would be sho
wn in F
inance Income.
Recognition of Defined Bene
fit
Pension Surplus
At 2
4 April 2022, the Group section of the F
indel Group
Pension F
und (of which Studio R
etail Limit
ed is the
sponsoring emplo
yer) sho
w
ed a surplus of £2.2m. This
surplus has been recognised in the Gr
oup
’s consolidat
ed
balance sheet. In r
ecognising the surplus, management
ex
ercised judgement as to whether Studio R
etail Limit
ed
(as sponsoring emplo
y
er) has an unconditional right t
o
benefit from an
y pension surplus at some point in the
future (thr
ough refunds of surplus or r
eductions in futur
e
contributions), in accordance with the r
equirements of
IFRIC 14. Management concluded that this w
as the case.
Ke
y Estimates
Pro
vision for Obsolet
e
, Slow Mo
ving or
Defect
ive In
v
ent
ories
The Direct
ors hav
e applied their knowledge and
experience of the r
et
ail industry in determining the le
v
el
and rat
es of pro
visioning r
equired in calculating the
appropriat
e inv
ent
ory carrying v
alues. Specific estimat
es
and judgements applied in relation t
o assessing the
lev
el of invent
ory pr
ovisions r
equired ar
e considered in
relation t
o the follo
wing ar
eas:
A.
Continuity inv
entory
B.
Seasonal inv
ent
ory lines – specifically seasons that
hav
e now finished
C.
Third party v
ersus o
wn brand inv
entory
D.
Ageing of inv
ent
ory
E.
Sports Ret
ail or Premium Lif
estyle
F.
Local economic conditions
G.
Divisional specific fact
ors
H.
Increased cost of inv
entory and low
er margins with
the dev
aluation of the P
ound
I.
Ov
er-stock and out of season in
v
entory as a r
esult of
macro-economic f
actors
Pro
vision estimat
es are f
orw
ard looking and are f
ormed
using a combination of fact
ors including hist
orical
experience
, management’s knowledge of the industry
,
group discounting, s
ales pricing prot
ocols and the
o
ver
all assessment made b
y management of the risks
in relation t
o inv
entory
. Management use a number of
internall
y generat
ed reports t
o monit
or and continually
re-assess the adequacy and accur
acy of the inv
ent
ory
pro
vision. The additional cost of repricing in
v
entory
and handling charges in r
elation to r
elocating inv
entory
(tunnelling) are consider
ed in arriving at the appropriat
e
percent
age pro
vision. The assessment inv
olv
es
significant estimation uncert
ainty, ther
efor
e in order
to check that the assumpt
ions applied remain v
alid,
management produces a r
ange of outcomes and the
pro
vision is set within this range
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
133
Ke
y assumptions used t
o creat
e the estimat
es are:
•
Discounting – Based on hist
orical experience and
managements anticipat
ed future discounting
including the continuing impact of the pandemic,
Bre
xit, global supply chain challenges and
macro-economic f
actors
•
T
unnelling – Cost of handling stock for r
ew
orking
and repacking
•
Repricing – Labour cost associat
ed with repricing
units of st
ock
•
Shrinkage – St
ock lost thr
ough damage and theft
T
otal Gr
oup inv
ent
ory pro
vision at 24 April 20
22 is
15.2% (FY21: 16
.6
%) of gross in
v
entory
. A 1% change
in the pro
vision as a percent
age of gr
oss inv
ent
ory
w
ould impact profit bef
ore t
ax b
y appro
x. £15.5m (FY21:
£13.2m). Management do not consider it appr
opriate t
o
disclose sensitivities for k
e
y assumptions in isolation as
in practice changes in one assumption w
ould lead to an
offset in another
.
Property R
elat
ed Pro
visions
Property r
elated estimat
es and judgements ar
e
continually e
v
aluated and ar
e based on historical
experience
, ext
ernal advice and other fact
ors, including
expect
ations of futur
e ev
ents that ar
e believ
ed t
o be
reasonable under the cir
cumstances
.
Dilapidations
The Group pr
ovides f
or its legal responsibility for
dilapidation costs follo
wing advice from chart
er
ed
surv
ey
ors and pr
evious e
xperience of exit costs
(including strip out costs and prof
essional fees).
Management use a ref
erence estimat
e of £100
,000
(FY21: £100
,000) f
or large leasehold st
ores, £50
,
000 (FY21:
£50
,000) for smaller leasehold st
or
es (£25,
000 per stor
e
for Game UK and Game Spain st
ores) and $/€50
,
000
(FY21: $/€50
,000) f
or non-UK stor
es. Management do
not consider these costs to be capit
al in natur
e and
theref
ore dilapidations ar
e not capit
alised, ex
cept f
or
in relation t
o the sale and leaseback of Shir
ebrook f
or
which a material dilapidat
ions pro
vision w
as capitalised
in FY20
.
A 10% increase in dilapidation cost per st
ore w
ould
result in an appr
o
x. £8.5m (FY21: £8.
0m) r
eduction in
profit be
fore t
ax.
Other Pro
visions
Pro
visions are made f
or it
ems where the Group has
identified a present legal or constructiv
e obligation
arising as a result of a past e
v
ent, it is probable that
an outflo
w of resour
ces will be required t
o settle the
obligation and a reliable estimat
e can be made of the
amount of the obligation.
Legal and regulat
ory pro
visions r
elate t
o management’s
best estimat
es of pro
visions requir
ed for legal and
regulat
ory claims and ongoing non-UK t
ax enquiries.
Other pro
visions relat
e t
o management’s best estimates
of pro
visions r
equired for r
estructuring, emplo
yment and
commercial. Wher
e applicable these are inclusiv
e of any
estimat
ed penalties, inter
est and legal costs.
In relation t
o the non-UK t
ax enquiries management
hav
e made a judgement to consider all claims
collectiv
ely
, applying the follo
wing k
ey est
imates t
o the
gross amounts (
ex
cluding re-imbursement assets):
•
10% penalty (FY21: 10%). A 5% incr
ease t
o 15%
w
ould result in appr
o
x. £6.5m increase in the
pro
vision (FY21: appr
o
x. £6.5m incr
ease).
•
3% int
erest on the liability (FY
21: 3%). A 1% increase
to 4
% would result in appr
o
x. £14m incr
ease in the
pro
vision (FY21: appr
o
x. £11.5m increase).
Management are s
atisfied that the judgement to
consider all claims collectiv
ely is the only r
easonable
approach because the
y are all dependant on the
outcome of a court ruling on the int
erpr
etation of the
non-UK tax enquiries
. Management are sat
isfied that
with regar
d to timing, a r
easonable range of out
comes
are all gr
eater than one y
ear and so ar
e satisfied with
including the pro
visions as non-current
.
Detailed disclosur
es and sensitivities with r
egards t
o
financial services relat
ed pro
visions can be f
ound in
note 29
.
Other Receiv
ables and Amounts Owed b
y
Relat
ed Parties
Other receiv
ables and amounts o
w
ed b
y relat
ed
parties are st
at
ed net of pro
vision for an
y impairment.
Management hav
e applied estimates in assessing the
reco
v
erability of w
orking capit
al and loan adv
ances
made to in
v
estee companies
. Matters consider
ed
include the rele
v
ant financial strength of the underlying
inv
est
ee company t
o repay the loans, the r
epayment
period and underlying t
erms of the monies adv
anced,
for
ecast performance of the underlying borr
o
wer
, and
where r
elev
ant, the Gr
oup
’s intent
ions for the companies
to which monies hav
e been advanced. Management
hav
e applied a weight
ed pr
obability to cert
ain pot
ential
repayment scenarios, with the str
ongest w
eighting given
to e
xpect
ed default aft
er tw
o y
ears.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
134
Impairment of Assets
A.
IFRS 16 right-of-use assets and associat
ed plant and equipment
IFRS 16 defines the lease t
erm as the non-cancellable period of a lease together with the opt
ions to e
xtend or
terminat
e a lease
, if the lessee wer
e reasonabl
y certain t
o e
x
ercise that option. The Group will assess the lik
elihood
of ext
ending lease contr
acts bey
ond the break dat
e b
y t
aking into account curr
ent economic and mark
et conditions,
current tr
ading performance, f
orecast pr
ofitability and the le
v
el of capit
al inv
estment in
the property
.
IFRS 16 stat
es that the lease payments shall be discount
ed using the lessee
’s increment
al borro
wing rat
e wher
e the
rat
e implicit in the lease cannot be readil
y determined. A
ccordingly
, all lease payments hav
e been discount
ed using
the increment
al borro
wing r
ate (IBR
). The IBR has been determined b
y using a s
ynthetic credit r
ating for the Gr
oup
which is used to obt
ain mark
et data on debt instruments f
or companies with the same cr
edit rating, this is split b
y
currency t
o repr
esent each of the geographical ar
eas the Group oper
ates within and adjust
ed for the lease t
erm.
The weight
ed av
erage discount r
ates based on incr
ement
al borro
wing rat
es used throughout the period acr
oss the
Group
’s lease portfolio are sho
wn belo
w
. The discount rat
e for each lease is dependent on lease st
art date
, term
and location.
Lease T
erm
UK
Europe
Rest of W
orld
Up to 5 y
ears
1.4
% - 2.6
%
0.8
% - 1.0%
1.5% - 2.
9%
Great
er than 5 years and up t
o 10 years
2.2% - 3.2%
1.2% - 1.9%
2.4
% - 4.
1%
Great
er than 10 years and up t
o 20 years
2.5% - 3.
4%
1.4
% - 2.2%
2.9% - 4
.3%
Great
er than 20 years
2.8% - 3.5%
1.7% - 2.5%
3.5% - 4.
6%
The right of use assets are assessed for impairment
at each reporting period in line with IAS 36 t
o re
vie
w
whether the carrying amount ex
ceeds its recov
erable
amount. F
or impairment t
esting purposes the Group
has determined that each st
or
e is a separat
e CGU
. The
reco
v
erable amount is calculat
ed based on the Group
’s
latest f
orecast cash flo
ws which ar
e then extr
apolated
to co
ver the period t
o the break dat
e of the lease taking
into account hist
oric performance and kno
wledge of the
current mark
et, t
ogether with the Group
’s views on future
profit
ability of each CGU
.
The ke
y assumptions in the calculations ar
e the sales
gro
wth rat
es, gr
oss margin rat
es, changes in the
operating cost base and the pr
e-t
ax discount rat
e
deriv
ed from the Gr
oup
’s w
eighted av
er
age cost of
capital using the capit
al asset pricing model, the inputs
of which include a risk
-free r
ate
, equity risk premium
and a risk adjustment (Beta). Giv
en the number of
assumptions used, the assessment inv
olv
es significant
estimation uncert
ainty
.
Impairments in the period hav
e been recognised for the
amount of £115.
9m (FY21: £17
4.
9m) due to the ongoing
challenges in the ret
ail sect
or on the forecast cash
flo
ws of the CGU
, including supply chain issues and the
anticipat
ed cost of living squeez
e on customers
. This is
brok
en do
wn as follo
ws:
•
£7
6.8m (FY21: £168.2m) against the right
-of-use asset
(£50
.7
m UK Sports Ret
ail segment, £9.5m Pr
emium
Lifestyle segment, £15.
6m European Ret
ail segment,
and £1.0m R
est of the W
orld Retail segment); and
•
£39
.
1m (FY21: £6
.7
m) against plant and equipment
(£28.7
m UK Sports Ret
ail segment, £10
.4m Pr
emium
Lifestyle segment).
The ke
y assumptions, which ar
e equally applicable to
each CGU
, in the cash flow pr
ojections used t
o support
the carrying amount of the right of use asset are
consistent with the cash
flow pr
ojections for the F
reehold
land and Buildings impairment assessment.
In line with IAS 36 Impairment of Assets, management
hav
e considered whether an
y amounts should be
recognised f
or the re
v
ersal of prior period impairment
losses with £nil (FY21: £nil) being r
ecognised in the period.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
135
A sensitivity analysis has been perf
ormed in respect of s
ales, margin and the ne
w st
ore e
x
emption as these are
considered t
o be the most sensitiv
e of the k
ey assumptions:
F
orecast:
Impact of change in assumption:
Impairment increase / (decrease) (£'m)
Sales decline year 1
10% impro
vement
to 0%
(21.8)
Sales decline year 1
10% reduction
to 20%
1
7.9
Existing gross mar
gin year 1 > 40%
100bps - impro
vement
(4.2)
Existing gross mar
gin year 1 > 40%
100bps - reduction
2.7
New st
ore e
xemption
(1)
Change from
1 to 2 y
ears
(27
.2)
Operating costs incr
ease year 1
Change from
6
% to 10%
3.9
(1)
Stores which hav
e been open for less than one y
ear are not revie
wed f
or impairment.
B.
Freehold land and buildings, long-
term leasehold, in
vestment pr
operty and associat
ed plant
and equipment
Fr
eehold land and buildings and long-t
erm leasehold assets are assessed at each r
eporting period for whether ther
e is
any indication o
f impairment in line with IAS 36.
An asset is impaired when the carrying amount e
x
ceeds its reco
v
erable amount
. IAS 36 defines reco
v
erable
amount as the higher of an asset’s or cash-generating unit’s fair v
alue less costs of disposal and its v
alue in use
,
the Group has det
ermined that each st
ore is a separ
ate CGU
.
Impairments in the period hav
e been recognised in the amount of £111.
1m (FY21: £117
.
9m) due t
o the ongoing
challenges in the ret
ail sect
or on the forecast cash flo
ws of the CGU
. This is broken do
wn as follo
ws:
•
£106.5m (FY21: £84
.4m
) against freehold land and buildings (£19
.8m UK Sports Ret
ail segment, £83.4m Pr
emium
Lifestyle segment, £2.
1m European Retail segment, and £1.2m R
est of W
orld Retail segment);
•
£2.0m (FY
21: £3.
9m) against long-t
erm leasehold (£2.
0m UK Sports Ret
ail segment);
•
£1.6m (FY21: £29
.
0m) plant and equipment (£1.2m UK Sports Ret
ail segment, £0.2m Pr
emium Lifestyle segment,
£0.2m Eur
opean Ret
ail segment); and
•
£1.0m (FY
21: £0.
6m) inv
estment property (
all UK Sports Ret
ail segment).
In line with IAS 36 Impairment of Assets, management hav
e considered whether an
y amounts should be recognised
for the r
ev
ersal of prior period impairment losses with £nil (FY
21: £nil) being recognised in the period.
V
alue In Use (VIU)
The value in use is calculat
ed based on a fiv
e y
ear cash flow pr
ojections. These are f
ormulated b
y using the Group
’s
for
ecast cash flow
s of each individual CGU, t
aking int
o account historic perf
ormance of the CGU
, and then adjusting
for the Gr
oup
’s current vie
ws on futur
e profit
ability of each CGU
. The ke
y assumptions in the calculations ar
e the sales
gro
wth rat
es, gr
oss margin rat
es, changes in the oper
ating cost base and the pre-
tax discount r
ate deriv
ed from the
Group
’s weight
ed av
erage cost of capit
al using the capital asset pricing model
, the inputs of which include a risk
-free
rat
e, equity risk pr
emium and a risk adjustment (Beta). Giv
en the number of assumptions used, the assessment inv
olves
significant estimation uncert
ainty
.
The ke
y assumptions, which ar
e equally applicable to each CGU
, in the cash flow projections used t
o support the
carrying amount of the freehold land and buildings w
er
e as follo
ws:
Ke
y assumptions
Y
ear 1
Y
ear 2
Y
ear 3
Y
ear 4
Y
ear 5
Sales decline
-
10%
-5%
-4%
-3%
-2
%
Existing gross mar
gin > 40%
-200bps
-
175bps
-
150bps
-
125bps
-
100bps
Operating costs incr
ease per annum
6%
3%
3%
3%
3%
Discount rat
e
7.
5
%
7.
5
%
7.
5
%
7.5
%
7.5
%
T
erminal gro
wth rate of 2%
A sensitivity analysis has been perf
ormed in respect of s
ales and margin as these ar
e considered t
o be the most
sensitiv
e of the ke
y assumptions.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
136
F
orecast:
Impact of:
Impairment increase / (
decrease) (£'m)
Sales year 1
10% impro
vement
to 0%
(16.8)
Sales year 1
10% reduction
to 20%
25.5
Existing gross mar
gin year 1
> 40%
100bps - impro
vement
(5.2)
Existing gross mar
gin year 1
> 40%
100bps - reduction
6.7
Operating costs incr
ease year 1
Change from
6
% to 10%
9.1
F
air value less costs of disposal
F
or those CGUs where the v
alue in use is less than the carrying v
alue of the asset, the fair v
alue less costs of dispos
al
has been determined using both e
xt
ernal and internal mark
et v
aluations. This fair v
alue is deemed t
o fall in t
o Lev
el
3 of the fair v
alue hierar
ch
y as per IFRS 13. The property portfolio consists of v
acant, Frasers Gr
oup occupied and
third party t
enant
ed units, one property can include all thr
ee types. The follo
wing valuat
ion methodology has been
adopted f
or each:
Scenario
V
aluation methodology
Ke
y assumptions
V
acant units
Estimated Rent
al V
alue (ERV) and suitable r
ev
ersionary yield applied
to r
eflect the market t
o generat
e a net capital v
alue. A deduction t
o
the capital v
alue generat
ed is then made based on the void period
with applicable rat
es payable for the unit and r
ent-fr
ee incentive
.
V
oid period and rent free band – two bands
applied depending on circumst
ances:
•
1 y
ear void, 2 y
ears rent fr
ee; or
•
2 y
ears void, 3 y
ears rent fr
ee.
Yield bands – ranging from 5
.5% - 14.
0%
Fr
asers Group occupied
Will be assumed the unit is v
acant given ther
e is no legally
binding inter-compan
y agreement in place. Ther
efore
, a void
and rent free incent
ive period assumed, the cost amount then
deducted fr
om the capital v
alue generat
ed by the ER
V and
re
versionary yield. Although w
e consider the commercial r
eality
is that fair v
alue less costs to sell will be higher than v
acant
possession this very conserv
ativ
e assumption is in line with both
technical accounting rules and that of our management e
xperts.
V
oid period and rent free band – two bands
applied depending on circumst
ances:
•
1 y
ear void, 2 y
ears rent fr
ee; or
•
2 y
ears void, 3 y
ears rent fr
ee.
Yield bands – ranging from 5
.5% - 14.
0%
Third party tenant
ed
An ER
V is applied using a percentage band on the passing rent. An
appropriat
e rev
ersionary yield is applied re
flecting the risk of tenant
and rene
wal t
o generat
e a capital v
alue. This will also pro
vide a net
initial yield based off the current passing r
ent.
ER
V is applied reflecting the mark
et for the
applicable unit. An appropriat
e re
versionary yield is
applied reflecting the risk of t
enant and rene
wal t
o
generat
e a capital v
alue. This will also pro
vide a net
initial yield based off the current passing r
ent.
A 10% increase in the mark
et v
aluation amounts used in the impairment calculations w
ould result in a decr
ease in
impairment of £5.
0m (FY21: £7
.5m).
The tot
al reco
v
erable amount of the assets that w
ere impaired at the period end w
as £105
.9m (FY
21: £170
.0m), with
£47
.3m (FY21: £87
.0m) of this being based on their fair v
alue less costs of disposal and £58.6m (FY21: £83
.0m) being
based on their v
alue in use.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
137
Credit Cust
omer R
eceiv
ables
Studio Ret
ail Limited’s cr
edit cust
omer receiv
ables are
recognised on balance sheet at amortised cost (i.
e. net
of pro
vision for e
xpect
ed credit loss). At 2
4 April 2022,
trade r
eceivables with a gr
oss v
alue of £372.7
m w
ere
recor
ded on the balance sheet, less a pro
vision for
impairment of £138.5m.
F
air value considerations
Management has concluded that the fair v
alue of trade
receiv
ables acquir
ed broadly equat
ed t
o their book
v
alue and theref
ore that the differ
ence on a go-forw
ard
basis will not be material giv
en that the nature of the
loan product off
ered (
a re
volving cr
edit account) means
that the portfolio has a r
elativ
ely short life (i.
e. loans
with customers ar
e repaid and r
eplaced with fresh
loans under the re
v
olving account). As a result of this,
management has concluded that it is appropriat
e t
o
recognise the tr
ade receiv
ables portfolio at the gr
oss
book v
alue less associated e
xpect
ed credit losses
(calculat
ed b
y Studio Ret
ail Limit
ed) at acquisition, and
to appl
y the accounting policies for e
xpected cr
edit loss
that w
ere in place at the point of the acquisition in the
Studio business on a go-forw
ar
d basis.
Expected cr
edit loss
An appropriat
e allo
w
ance for e
xpected cr
edit loss in
respect of tr
ade receiv
ables is deriv
ed from estimat
es
and underlying assumptions such as the Pr
obability
of Default and the Loss Giv
en Default, taking int
o
consideration f
orw
ard looking macr
o-economic
assumptions. The assessment inv
olv
es significant
estimation uncert
ainty
. Changes in the assumptions
applied such as the v
alue and frequency of futur
e debt
sales in calculating the Loss Giv
en Def
ault, and the
estimation of cust
omer repayments and Pr
obability
of Default r
at
es, as well as the w
eighting of the
macro-economic scenarios applied t
o the impairment
model could hav
e a significant impact on the carrying
v
alue of trade r
eceivables
. These assumptions are
continually assessed for r
ele
vance and adjust
ed
appropriat
ely
. Revisions t
o estimates ar
e recognised
prospectiv
ely
. Sensitivity analysis is giv
en in not
e 23.
Post model adjustment
The impairment model w
as not designed to t
ak
e into
account changes to cust
omer payment and def
ault
performance arising as a r
esult of the current cost
of living crisis where le
v
els of price inflation greatl
y
ex
ceed income growth, as the e
xisting model uses
unemplo
yment rat
es as the principal determinant
in considering forw
ar
d looking macro-economic
assumptions.
It is our expect
ation that SRL
’s customer base has seen
and will continue t
o see a significant reduction in r
eal
earnings as a result of the curr
ent cost of living crisis,
and that this will adv
ersely impact payment and arrears
performance
. It is also management’s view that these
anticipat
ed impacts are not adequat
ely re
flected in
the output of the impairment model. Judgement has
theref
ore been e
x
ercised in appl
ying a post model
adjustment of £40.
0m t
o the output of the impairment
model in arriving at the pro
vision. This adjustment w
as
included in the credit cust
omer receiv
ables pr
ovision
on acquisition of SRL and has been ret
ained at period
end as this reflects management’s best estimat
e based
on the information av
ailable t
o them. The post model
adjustment w
as formulat
ed based on an assessment
of the anticipat
ed length of the cost of living crisis,
anticipat
ed changes to def
ault behaviour o
ver that time
horizon, and cr
edit bureau dat
a assessing the le
vel o
f
customer indebt
edness.
The purpose of the post model adjustment is to ensur
e
that the probability w
eight
ed macroeconomic scenarios
adequatel
y reflect the risks t
o cust
omer payment and
default perf
ormance described abov
e.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
138
In arriving at the £40.
0m estimat
e, a number of macr
o-economic scenarios wer
e modelled based on the
considerations not
ed abo
v
e and a probability w
eighting w
as applied t
o each scenario as follo
ws:
Scenario
Qualitativ
e explanation
Probability w
eighting
applied
Upside
Although real incomes are under pr
essure
, households spend freely on hospit
ality, holidays and
entert
ainment, given the s
avings they’v
e accumulated o
ver the last 2 y
ears, throughout the pandemic.
Those that wer
e struggling before high inflat
ion are likel
y experiencing financial difficulty
. The
expect
ation is that the cost-of
-living crisis is shorter under this scenario at betw
een 12 and 18 months.
20%
Baseline
The cost-of-living crisis int
ensifies with real incomes e
xpected t
o be much low
er in 2022 than they w
ere
in 2021. The continued war in Ukr
aine puts prolonged pressur
e on global markets k
eeping inflation high,
with the expect
ation inflation will continue to rise thr
oughout 2022. The longevity of the cost
-of-living
crisis is assumed to last o
ver 2 y
ears.
60%
Downside
The economy underperf
orms and the UK goes into a recession. The Bank of England continue t
o try
to addr
ess inflationary pressures with r
egular increases in base rat
e, pushing mor
e households into
financial difficulty
. Higher costs in Manufacturing and other sect
ors most exposed t
o the conflict in
Ukraine see a w
ave of insolv
encies and subsequently an increase in unemplo
yment. The impact is
expect
ed to last up t
o 3 years.
10%
Stress
The conflict in Ukraine escalates and economic s
anctions damage west
ern economies. W
ith continued
labour shortages and pr
oblems in supply-chains, this perfect st
orm of shock sees inflation rise sharply
. As
well as the impact on r
eal incomes, the rise in inflation unsettles markets and leads t
o a crash in asset
values. Whilst not e
xplicitly modelled this scenario w
ould also cov
er another emerging Co
vid-
19 variant,
more resist
ant to v
accines leading t
o a sev
ere out
come and further lockdo
wns. The impact is expect
ed to
last ov
er 3 y
ears.
10%
W
e note that the unpr
ecedented le
v
el of uncertainty ar
ound the cost of living and the UK econom
y as a whole,
and the impact this will hav
e on Studio
’s customer base
, will continue cause challenges in assessing bad debt on a
forw
ar
d-looking basis.
£9
.
1m of the trade r
eceivables acquir
ed w
ere cat
egorised as St
age 3 by Studio and w
ould likely meet the Gr
oup
’s
definition of pur
chased credit
-impaired (“POCI”). On the basis of mat
eriality
, and that the loans w
ould attract a
lifetime E
CL allo
w
ance whether categorised as St
age 3 or POCI, w
e hav
e chosen t
o continue to appl
y Studio
’s
classification and measurement of these loans as St
age 3 in the consolidat
ed financial stat
ements.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
139
3.
FINANCIAL RISK
MANA
GEMENT
The Group
’s current activities result in the f
ollowing
financial risks and set out belo
w are management’s
responses t
o those risks in order t
o minimise an
y
resulting adv
erse eff
ects on the Group
’s financial
performance
.
F
or
eign Ex
change Risk
The Group is e
xposed to f
oreign e
x
change risk
principally via:
A.
T
r
ansactional e
xposure fr
om the cost of future
purchases of goods f
or resale
, where those
purchases ar
e denominated in a curr
ency other than
the functional currency of the pur
chasing company
.
T
ransactional e
xposures that could significantl
y
impact the income stat
ement ar
e hedged. These
exposur
es are hedged via f
orw
ard for
eign currency
contracts which ar
e designated as cash flo
w hedges.
The notional and fair v
alue of these contracts is
sho
wn in note 30;
B.
T
ransactional e
xposure fr
om the sale of goods,
where those s
ales are denominat
ed in a currency
other than the functional currency of the selling
company
. T
r
ansactional e
xposures that could
significantly impact the income st
atement ar
e
hedged. These exposur
es are hedged via forw
ard
for
eign currency contr
acts which are designat
ed
as cash flo
w hedges. The notional and fair v
alue of
these contracts is sho
wn in not
e 30;
C.
Loans to non-UK subsidiaries
. These are hedged
via for
eign currency tr
ansactions and borro
wings
in matching curr
encies, which are not f
ormally
designated as hedges, as gains and losses on
hedges and hedged loans will naturally o
ffset; and
D.
The Group uses currency options, s
w
aps and spots
for mor
e flexibility against cash flo
ws that ar
e less
than highly pr
obable and theref
ore do not qualify
for hedge accounting under IFRS 9 F
inancial
Instruments. Exposures in r
espect of written
options t
o sell Euros or buy USD are e
xplained in
the Financial R
evie
w
. These are not hedged and
mo
vements in f
air v
alue could significantly impact
the Income Stat
ement in futur
e periods. See note 30
.
Int
erest R
ate Risk
The Group has net borr
owings, which ar
e principally
at floating int
erest rat
es link
ed t
o bank base rat
es
or SONIA. The Group uses int
erest r
ate financial
instruments to hedge its e
xposur
e to int
erest r
ate
mo
vements using int
er
est rat
e sw
aps although hedge
accounting is not applied. The Group r
egularly monit
ors
and reacts accor
dingly t
o any e
xposure t
o fluctuations in
inter
est rat
es and the impact on its monet
ary assets
and liabilities.
Credit Risk
The Direct
ors hav
e a credit policy in place and the
exposur
e t
o credit risk is monit
ored on an ongoing
basis. Credit e
v
aluations are perf
ormed on all customers
requiring cr
edit ov
er a certain amount. The Group does
not requir
e collater
al in respect of financial assets
.
At each balance sheet dat
e, ther
e wer
e no significant
concentrations of cr
edit risk. The maximum exposur
e to
credit risk is r
epresent
ed b
y the carrying amount of each
financial asset in the balance sheet.
Inv
estments of cash surpluses, borr
owings and deriv
ativ
e
instruments are made thr
ough banks and companies
which must fulfil credit r
ating and inv
estment crit
eria
appro
v
ed b
y the Board.
Liquidity Risk
The Group has sufficient liquid resour
ces t
o manage
the operating r
equirements of the business and it does
this through utilis
ation of its re
v
olving credit facilities
together with equity and r
et
ained profits ther
eby
achieving continuity o
f funding and short-
term fle
xibility
,
while keeping int
er
est to a minimum.
Management regularl
y re
view f
orecasts t
o ensure ther
e
is adequate headr
oom on the facilities and t
o ensur
e the
Group is oper
ating within its financial co
venants
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
140
Price Risk
The Group is e
xposed to price risk in r
espect of
its long term financial assets (in r
elation t
o listed
company shar
es).
The price risk relat
es to v
olatility in the market, and
ho
w other comprehensiv
e income and equity w
ould
hav
e been affect
ed b
y changes in market risk that w
er
e
reasonabl
y possible at the reporting dat
e. If the quot
ed
stock price f
or these securities increased or decr
eased,
other comprehensiv
e income and equity w
ould hav
e
changed. The listed securities ar
e classified as long term
inv
estments at fair v
alue thr
ough other comprehensiv
e
income so there w
ould be no eff
ect on profit or loss.
The inv
estments in list
ed equity securities (long-t
erm
financial assets) are consider
ed medium to long-
t
erm
strat
egic inv
estments. In accor
dance with the Group
’s
policies, no specific hedging activities are undert
ak
en in
relation t
o these inv
estments.
Capit
al Management
A description of the Group
’s objectives, policies and
processes f
or managing capital ar
e included in note 30
.
4.
SE
GMENT
AL ANAL
YSIS
Management has determined t
o pr
esent its segmental
disclosures consist
ently with the pr
esentation in the 2021
Annual Report. Management considers oper
ationally
that the UK Ret
ail divisions (UK Sports Ret
ail and
Premium Lif
estyle) are run as one business unit in t
erms
of allocating resour
ces, inv
ent
ory management and
assessing performance
. Under IFRS 8 w
e have not at
this reporting dat
e met the requir
ed crit
eria with enough
certainty t
o aggr
egate these oper
ating segments. W
e
will continually k
eep this under re
vie
w at subsequent
reporting dat
es. W
e continue to monit
or the impacts
of Co
vid-
19, Br
exit, and the continued uncert
ainties
this has brought r
elating to the polit
ical and economic
envir
onments, and market and curr
ency v
olatility in
the countries w
e operat
e in. European countries hav
e
been identified as operating segments and hav
e
been aggregat
ed int
o a single operating segment as
permitted under IFRS 8. The decision t
o aggregat
e
these segments w
as based on the fact that the
y each
hav
e similar economic charact
eristics, similar long-t
erm
financial performance e
xpectations, and ar
e similar in
each of the follo
wing respects:
•
The nature of the pr
oducts;
•
The type or class of customer f
or the products; and
•
The methods used to distribut
e the products
.
In accordance with par
agraph 12 of IFRS 8 the Gr
oup
’s
operating segments hav
e been aggr
egated int
o the
follo
wing report
able segments:
1.
UK Retail:
i.
UK Sports Ret
ail - includes core sports r
et
ail
stor
e operations in the UK, plus all the Gr
oup
’s
sports ret
ail online business (e
x
cluding Bob
’s
Stor
es, East
ern Mount
ain Sports, Malaysia
and Baltics), the gyms, the Group
’s Shirebrook
campus operations, fr
eehold property o
wning
companies ex
cluding Premium Lifestyle
fascia pr
operties, GAME UK st
ores and
online operations, Studio R
etail Limit
ed (from
acquisition on 24 F
ebruary 2022) and ret
ail
stor
e operations in Northern Ir
eland.
ii.
Premium Lifestyle – includes the results of the
premium and luxury r
etail businesses Flannels,
Cruise, v
an mildert, Jack W
ills, House of F
raser
and Sofa.
com along with relat
ed w
ebsites, and
freehold pr
operty owning companies wher
e
trading is pur
ely from Pr
emium Lifestyle f
ascias.
2.
European R
etail - includes all the Gr
oup
’s sports
ret
ail st
ores, management and operat
ions in Europe
including the Group
’s European Distribution Centres
in Belgium and Austria, Eur
opean freehold pr
operty
o
wning companies, as well as G
AME Spain stor
es
and Baltics online.
3.
Rest o
f W
orld Retail – includes the r
esults of US
based ret
ail activities, Asia based r
etail activities
along with their e-commerce off
erings.
4.
Wholesale & Licensing – includes the r
esults of
the Group
’s portfolio of internationall
y recognised
brands such as E
v
erlast, Karrimor
, Lonsdale
and Slazenger
.
It is management’s current int
ention to run the Gr
oup
as four oper
ating segments being UK Ret
ail (including
UK Sports Ret
ail and Premium Lif
estyle), European
Ret
ail, Rest of W
orld Retail and Wholesale & Licensing
.
Management is satisfied that the UK Sports Ret
ail and
Premium Lif
estyle will meet the criteria permitt
ed under
IFRS 8 to aggr
egat
e as one segment in due course.
The FY21 numbers hav
e been re-cat
egorised due t
o
changes in the reporting segments, with fr
eehold
property o
wning companies where tr
ading is purel
y
from Pr
emium Lifestyle fascias being mo
v
ed from UK
Sports Ret
ail to Pr
emium Lifestyle
. Adjustments for IFRS
16, which w
ere pr
eviousl
y report
ed as a reconciling
item, hav
e been included within Operating profit bef
ore
for
eign ex
change, ex
ceptional it
ems and property and
other relat
ed impairments t
o be consistent with the
present
ation adopt
ed for FY22.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
1
41
Segmental inf
ormation for the 52 w
eeks
ended 24 April 2022:
UK Sports
Premium
Lifestyle
UK Retail
T
otal
European
Retail
Rest of
W
orld Retail
T
otal
Retail
Wholesale &
Licensing
Eliminations
Group
T
otal
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
Sales to e
xternal cust
omers
2,640
.1
1,056.
6
3
,696
.7
790.2
150.3
4,637
.2
168.1
-
4,805.3
Sales to other segments
-
-
-
-
-
-
8
0.1
(80.
1)
-
Re
venue
2,640.
1
1,056.
6
3,696
.7
790.2
150.3
4,6
37
.2
248.2
(80.
1)
4,805.3
Gross pro
fit
1,
136.8
474
.
8
1,6
11.6
337
.3
76
.7
2,025.6
6
3.1
-
2,088.7
Operating profit bef
ore for
eign
ex
change, ex
ceptional items
and property and other relat
ed
impairments
28
9.4
124.0
413.
4
109
.8
34.4
557
.6
6.9
-
564.5
Ex
ceptional items
(1.3)
-
(1.3)
-
-
(1.3)
-
-
(1.3)
Property and other
relat
ed impairments
(103.4)
(103.5)
(206.9)
(17.
9)
(2.2)
(227
.0)
-
-
(227
.0)
Realised for
eign ex
change loss
(1.
1)
(0.
1)
(1.2)
(2.9)
(0
.8)
(4.9)
(0.
9)
-
(5.8)
Operating profit
183.6
20.4
204.0
89.0
31.4
32
4.4
6.0
-
330.4
Inv
estment income
43.8
-
43.
8
-
-
43
.8
-
-
43.8
Inv
estment costs
(19.
7)
-
(19
.7)
-
-
(19
.7)
-
-
(19.
7)
Finance income
(1)
36.8
-
36.8
1
.0
1
.0
38.8
-
(8.5)
30.3
Finance costs
(1)
(42.8)
(10.0)
(52.8)
(4.4
)
(0.5)
(57
.7)
-
8.5
(49.2)
Profit bef
ore tax
ation
201.7
1
0.4
212.1
8
5.6
31.9
329.6
6
.0
-
335.6
T
axation
(78.7)
Profit for the period
256.9
(1)
Includes inter-compan
y related finance income in UK Sports Ret
ail and the equivalent finance cost in Pr
emium Lifestyle that eliminates on consolidation.
F
ollo
wing the acquisition of Studio Ret
ail Limited, s
ales to e
xt
ernal customers includes cr
edit account inter
est of £18.2m,
and gross pr
ofit includes impairment losses on credit cust
omer receiv
ables of £13
.3m, both of which are r
ecognised in
the UK Sports segment. The gain on bargain pur
chase arising from the acquisition of Studio R
etail Limit
ed of £4
.8m
(see note 32) has been r
ecognised in gross pr
ofit in the UK Sports segment.
Other segment items included in the income st
at
ement for the 52 w
eeks
ended 24 April 2022:
UK Sports
Premium
Lifestyle
UK Retail
T
otal
European
Retail
Rest of
W
orld Retail
T
otal
Retail
Wholesale &
Licensing
Group
T
otal
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
Property
, plant & equipment depreciation
122.2
22.9
1
4
5.1
20.2
2
.4
1
67.
7
1.3
1
69.0
Property
, plant & equipment impairment
51.7
94.0
1
45.7
2.3
1.2
149.2
-
149.2
IFRS 16 ROU depr
eciation
4
7.
8
6.4
54.2
1
9.9
3
.1
77.2
0.4
7
7.6
IFRS 16 ROU impairment
50.7
9.5
6
0.2
15
.6
1.0
76
.8
-
76.
8
Inv
estment property depreciation
5.9
-
5.9
-
-
5.9
-
5.9
Inv
estment property impairment
1.0
-
1.0
-
-
1.0
-
1.0
IFRS 16 disposal and modification/
remeasurement
of lease liabilities
14.2
3
.9
18.1
9.
2
1.0
28.3
-
28.3
Intangible amortis
ation
1.0
-
1.0
-
-
1.0
6.5
7.
5
Intangible impairment
1.3
-
1.3
-
-
1.3
4.4
5.7
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
142
Information r
egarding segment assets and liabilities as at 2
4 April 2022 and capit
al expenditur
e for the 52 w
eeks
then ended:
UK Sports
Premium
Lifestyle
UK Retail
T
otal
European
Retail
Rest of
W
orld Retail
T
otal
Retail
Wholesale &
Licensing
Eliminations
Group
T
otal
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
T
otal assets
4,
16
1.
9
1,002.
1
5,
164.
0
485.5
8
4.4
5,733.9
3
49.7
(1,9
40.
9)
4,
142.7
T
otal liabilities
(2,908
.9)
(1,098.
9)
(4,007
.8)
(681.4)
7.6
(4,
681.6)
(93.
4)
1,
940.
9
(2,834.
1)
T
angible asset additions
228.
1
63.6
291.7
29.4
1.3
322.4
0.
8
-
323.2
Right of use asset additions
27
.8
25
.0
52.8
43.0
4.7
100.5
0.4
-
100.9
Intangible assets acquir
ed
7.
0
-
7.0
-
-
7.
0
-
-
7.
0
Segmental inf
ormation for the 52 w
eeks
ended 25 April 2021
(1)
:
UK Sports
Premium
Lifestyle
UK Retail
T
otal
European
Retail
Rest of
W
orld Retail
T
otal
Retail
Wholesale &
Licensing
Eliminations
Group
T
otal
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
Sales to e
xternal cust
omers
1,968
.5
73
5.6
2,
70
4.1
6
15.2
152.7
3
,472.0
153.3
-
3,625.3
Sales to other segments
-
-
-
-
-
-
95
.4
(95.
4)
-
Re
venue
1,
968.5
7
35.6
2
,7
04
.1
615.2
152.7
3,472.
0
248.7
(95.
4)
3,625.3
Gross pro
fit
829.3
330.3
1,
159
.6
2
39.
7
6
4.0
1,463.3
6
7.
5
-
1,530.8
Operating profit bef
ore for
eign
ex
change, ex
ceptional items
and property and other relat
ed
impairments
191.0
34.3
225.3
20.5
18.6
2
64.4
20.2
-
284.6
Ex
ceptional items
3.1
(1.6)
1.5
(3.
1)
-
(1.6)
-
-
(1.6)
Realised for
eign ex
change (loss)
/ gain
(20.2)
(0.2)
(20.4)
0.
8
(1.4)
(21.0)
(5.3)
-
(26.3)
Property and other relat
ed
impairments
(201.
9)
(40.9)
(242.8)
(71.6)
(2.6)
(317
.0)
-
-
(317
.0)
Operating (loss)/
profit
(28.0)
(8.4)
(36.
4)
(53.4)
14.6
(75.2)
1
4.9
-
(60.3)
Inv
estment income
103.7
-
103.7
-
-
103.7
-
-
103.7
Inv
estment costs
(7
.7)
-
(7
.7)
-
-
(7
.7)
-
-
(7
.7)
Finance income
6.5
-
6.5
2.5
-
9.0
-
-
9.0
Finance costs
(28.
1)
(1.2)
(29.3)
(2.7)
(3.8)
(35.8)
(0.4)
-
(36.2)
Profit bef
ore tax
ation
46.4
(9
.6)
36.8
(53.6)
10.8
(6.0)
14.5
-
8.5
T
axation
(86.5)
Loss for the period
(78.0)
(1)
The FY21 numbers have been r
e-categorised due to changes in the r
eporting segments, with freehold property o
wning companies where trading is pur
ely from
Premium Lifestyle f
ascias being moved fr
om UK Sports Retail t
o Premium Lifestyle
.
Inter-segment s
ales are priced at cost plus a 10% mark
-up.
Other segment items included in the income st
at
ement for the 52 w
eeks
ended 25 April 2021
(1)
:
UK
Sports
Premium
Lifestyle
UK Retail
T
otal
European
Retail
Rest of
W
orld Retail
T
otal
Retail
Wholesale
& Licensing
Group
T
otal
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
Property
, plant & equipment depreciation
131.9
42.3
174
.2
35.3
5.7
215.2
1.2
216.4
Property
, plant & equipment impairment
8
7.
2
20.
4
107
.6
4
0.6
-
148.2
-
148.2
IFRS 16 ROU depr
eciation
51.5
6
.4
5
7.
9
21.9
2.3
82.1
-
82.
1
IFRS 16 ROU impairment
1
14
.1
20
.5
1
34.6
31.0
2.6
168.2
-
168.2
Inv
estment property depreciation
1.9
-
1
.9
-
-
1.9
-
1
.9
Inv
estment property impairment
0.6
-
0.6
-
-
0.6
-
0.6
IFRS 16 disposal and modification/
remeasurement
of lease liabilities
(20.
0)
(5.
6)
(25.6)
(1.4)
(0.7)
(27
.7)
-
(27.7)
Intangible amortis
ation
-
-
-
0.
5
-
0.5
6.6
7.1
Intangible impairment
3.7
2.3
6.0
3.1
-
9.1
-
9
.1
(1)
The FY21 numbers have been r
e-categorised due to changes in the r
eporting segments, with freehold property o
wning companies where trading is pur
ely from
Premium Lifestyle f
ascias being moved fr
om UK Sports Retail t
o Premium Lifestyle
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
143
Information r
egarding segment assets and liabilities as at 25 April 2021
(1)
and capital e
xpenditur
e for the
52 w
eeks then ended:
UK Sports
Premium
Lifestyle
UK Retail
T
otal
European
Retail
Rest of
W
orld Retail
T
otal
Retail
Wholesale &
Licensing
Eliminations
Group
T
otal
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
T
otal assets
3,305
.9
668.0
3
,97
3.
9
670.
8
158.6
4,803.3
344.
7
(1,362.9)
3,785.
1
T
otal liabilities
(2,357
.8)
(499
.6)
(2,857
.
4)
(857
.0)
(95.1)
(3
,809.5)
(127
.5)
1,362.
9
(2,57
4.
1)
T
angible asset additions
163.4
3
3.1
196.5
1
7.4
3.0
216.9
2.5
-
219
.4
Right of use asset additions
77
.5
1
4.1
91.6
24.
3
2.4
118.3
0.
5
-
118.8
Intangible asset additions/
acquired
3.7
2.3
6
.0
-
-
6
.0
1
.0
-
7.
0
(1)
The FY21 numbers have been r
e-categorised due to changes in the r
eporting segments, with freehold property o
wning companies where trading is pur
ely from
Premium Lifestyle f
ascias being moved fr
om UK Sports Retail t
o Premium Lifestyle
.
Geographic Inf
ormation
Segmental inf
ormation for the 52 w
eeks
ended 24 April 2022:
UK
Europe
USA
Asia
Eliminations
T
otal
(£’m)
(£’m)
(£’m
)
(£’m)
(£’m)
(£’m)
Segmental r
ev
enue from
ext
ernal customers
3,714
.8
823.0
223.0
44.5
-
4,805.3
T
otal capit
al expenditure
291.7
2
9.4
0.9
1.2
-
323.2
Non-current segment
assets*
962.2
130.3
12
6.0
4.
5
-
1,223.0
T
otal segment
al assets
5,
486.8
381.3
176.3
39.
2
(1,9
40.
9)
4,
142.7
*Excludes de
ferred tax and financial instruments
.
Segmental inf
ormation for the 52 w
eeks
ended 25 April 2021:
UK
Europe
USA
Asia
Eliminations
T
otal
(£’m)
(£’m)
(£’m
)
(£’m)
(£’m)
(£’m)
Segmental r
ev
enue from
ext
ernal customers
2,721.7
646.2
213.7
43.7
-
3,625.3
T
otal capit
al expenditure
196.5
1
7.
4
3.2
2.3
-
219.
4
Non-current segment
assets*
1,052.3
11
4.9
127
.7
4.6
-
1,299.5
T
otal segment
al assets
4,264
.7
589.2
256.2
3
7.9
(1,362.
9)
3,785.
1
*Excludes de
ferred tax and financial instruments
.
Material non-curr
ent segment
al assets –
b
y a non-UK country:
USA
Belgium
Austria
Estonia
Ireland
Spain
(£’m)
(£’m)
(£’m
)
(£’m)
(£’m)
(£’m)
FY22
126
.0
5
8.4
19.5
0.7
13.3
33.4
FY21
127
.7
46.8
22.4
-
12.9
39.9
Material segment
al r
ev
enue from e
xt
ernal customers –
b
y a non-UK country:
USA
Belgium
Austria
Estonia
Ireland
Spain
(£’m)
(£’m)
(£’m
)
(£’m)
(£’m)
(£’m)
FY22
223.0
113.3
38.3
118.5
172.6
229.4
FY21
213.7
93
.1
42
.1
9
6.7
9
5.4
208
.1
Note the Gr
oup has no individual cust
omer which accounts for more than 10% of r
e
venue in the curr
ent or prior period.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
144
The follo
wing tables r
econciles the Profit Be
fore T
ax to the Adjusted PB
T as it is one of the main measur
es used by the
Chief Operat
ing Decision Maker when r
evie
wing the performance of the segment:
Reconciliation of Report
ed PB
T to Adjust
ed PB
T for the 52 w
eek period
ended 24 April 2022:
UK Sports
Premium
Lifestyle
UK Retail
T
otal
European
Retail
Rest of
W
orld Retail
T
otal
Retail
Wholesale &
Licensing
Group
T
otal
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
Report
ed PBT
201.6
10.4
212.0
85.7
31.9
329.6
6.0
335.6
Ex
ceptional Items
1.3
-
1.3
-
-
1.3
-
1.3
F
air value adjustments t
o derivativ
e
financial instruments
(7
.6)
-
(7
.6)
-
-
(7
.6)
-
(7.
6)
F
air value (gains)/
losses and profit on dispos
al
of equity derivativ
es
(9.
9)
-
(9.
9)
-
-
(9.
9)
-
(9.9)
Realised FX loss
1
.1
0
.1
1.2
2
.9
0.8
4.9
0.9
5.8
Share scheme
10.4
-
10.4
-
-
10.4
4.2
14.6
Adjusted PB
T
196.9
10.5
207.
4
88.6
32.7
328.7
11.
1
339.8
Reconciliation of Report
ed PB
T to Adjust
ed PB
T for the 52 w
eek period
ended 25 April 2021
(1)
:
UK Sports
Premium
Lifestyle
UK Retail
T
otal
European
Retail
Rest of
W
orld Retail
T
otal
Retail
Wholesale &
Licensing
Group
T
otal
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
Report
ed PBT
46.4
(9
.6)
36.8
(53.6)
10.8
(6.0)
14.5
8.5
Ex
ceptional items
(3.
1)
1.6
(1.5)
3.1
-
1.6
-
1.6
F
air value adjustment t
o derivativ
e
financial instruments
4.6
-
4.6
-
-
4.6
-
4.6
F
air value (gains)/
losses and profit on dispos
al
of equity derivativ
es
(82.2)
-
(82.2)
-
-
(82.2)
-
(82.2)
Realised FX loss / (gain)
20.2
0.2
20.4
(0.8)
1
.4
21.0
5.3
26.3
Share scheme
1.3
-
1.3
-
-
1.3
-
1.3
Adjusted PB
T
(12.8)
(7
.8)
(20.6)
(51.3)
12.2
(59
.7)
19
.8
(39.
9)
(1)
The FY21 numbers have been r
e-categorised due to changes in the r
eporting segments, with freehold property o
wning companies where trading is pur
ely from
Premium Lifestyle f
ascias being moved fr
om UK Sports Retail t
o Premium Lifestyle
.
5.
O
THER OPERA
TING INCOME
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£m)
(£m)
Rent receiv
able
27
.3
1
6.1
Other
20.7
2
0.7
48.0
36.8
Other operating income r
elates t
o char
ges for aircr
aft, lease surrender pr
emiums, ad hoc income and sundry charges
to thir
d parties.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
145
6.
EX
CEPTIONAL ITEMS
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£m)
(£m)
Impairments
(1.3)
(9.
1)
Profit on disposal of int
angible assets
-
7.
5
(1.3)
(1.6)
The impairment in both the current and prior period relat
es t
o goodwill, wher
eby the discount
ed pr
esent value o
f
future cash flo
ws do not support the full v
alue of the assets. The pro
fit on disposal of int
angible assets in the prior
period relat
es t
o the sale of cert
ain IP relating t
o the BEL
ONG business.
7
.
PR
OFIT ON SALE OF PR
OPER
TIES
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£m)
(£m)
Profit on sale of pr
operties
10.8
9.7
The profit on the sale o
f properties in the curr
ent period includes gains on the sale of UK propert
ies
(FY21: Eur
opean properties).
8.
OPERA
TING PR
OFIT
/(L
OSS) F
OR THE PERIOD
Operating pr
ofit/(loss) for the period is st
at
ed after char
ging/(cr
editing):
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£m)
(£m)
F
oreign ex
change loss
5.8
26.3
Depreciation and amortisation of non-curr
ent assets:
- Depreciation of pr
operty, plant & equipment (incl. right
-of-use asset)
246.
6
298.5
- Impairment of property
, plant & equipment (incl. right-of
-use asset)
226
.0
316.4
- Depreciation of in
vestment pr
operties
5.9
1
.9
- Impairment of inv
estment properties
1.0
0.6
- Amortisation of int
angible assets
7.
5
7.
1
- Impairment of intangible assets
5.7
9.1
IFRS 16 leases:
Profit on disposal and modification/ r
emeasurement of lease liabilities
(28.3)
(27
.7)
V
ariable lease payments
14.0
25.5
Short term and lo
w value
lease expenses
25.0
31.6
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
146
Services Pro
vided by the Gr
oup
’s Auditor
The remunerat
ion of the auditors, RSM UK A
udit LLP
, and associated firms, w
as as detailed below:
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£m)
(£m)
AUDIT SER
VICES
Audit of the Group and compan
y - recurring
1.8
1.5
Audit of the Group and compan
y - non-recurring
-
0.1
Audit of subsidiary companies
1.0
0.8
2.8
2
.4
There w
ere no non-audit services pr
o
vided by RSM UK A
udit LLP and associat
ed firms in either the current or
prior period.
9
.
P
A
YR
OLL COSTS
The aver
age monthly number of emplo
y
ees, including Ex
ecutiv
e Direct
ors, emplo
y
ed by the Gr
oup during the
period w
as:
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
Retail st
ores
23,
971
22,122
Distribution, administration and other
6,382
4
,
3
74
30,353
2
6,496
The increase in emplo
y
ees is mainly due t
o acquisitions and the ongoing organic gr
owth of the business
.
The aggregat
e payroll costs of the emplo
y
ees, including Ex
ecutiv
e Direct
ors, net of amounts r
eceived fr
om
Go
vernment gr
ants, w
ere as follo
ws:
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£m)
(£m)
W
ages and salaries
491.5
342.2
Social security costs
34.9
29.3
Pension costs
6.5
5.6
532.9
377
.
1
Aggregat
e emoluments of the Direct
ors of the Compan
y are summarised belo
w:
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
Aggregat
e emoluments
0.6
0.5
F
urther details of Dir
ectors
’ remuner
ation are giv
en in the Dir
ectors
’ Remuneration R
eport. Details o
f ke
y management
remuner
ation are giv
en in not
e 35.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
147
10.
INVESTMENT INCOME
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£m)
(£m)
Profit on disposal of equity deriv
ativ
es
23.2
2
7.
4
Premium receiv
ed on equity deriv
atives
13.2
13.3
F
air value gain on equity deriv
atives
6.4
62.5
Dividend income
1.0
0.
5
43.8
103.7
The profit on disposal o
f equity derivativ
es mainly relates t
o Hugo Boss contr
acts for differ
ence. The fair v
alue gain on
equity deriv
atives mainl
y relat
es t
o Hugo Boss options. The premium r
eceived on equity deriv
atives mainly r
elates t
o
Hugo Boss options.
11.
INVESTMENT COSTS
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£m)
(£m)
F
air value loss on equity deriv
atives
19.
7
7.
7
19.7
7.
7
The fair v
alue loss on equity deriv
atives in the curr
ent period mainly r
elates t
o Hugo Boss contracts f
or differ
ence.
12.
FINANCE INCOME
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£m)
(£m)
Bank inter
est receiv
able
4.5
3.5
Inter
est on retirement bene
fit obligations
0.1
-
Other finance income
1.7
5.5
F
air value adjustment t
o derivativ
es
24.0
-
30.3
9.0
The fair v
alue adjustment to deriv
ativ
es lar
gely relat
es t
o mov
ement in the fair value of int
erest r
at
e sw
aps.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
148
13.
FINANCE COSTS
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£m)
(£m)
Inter
est on bank loans and ov
erdraf
ts
13.6
11.
1
Other inter
est
7.
0
8.6
Inter
est on retirement bene
fit obligations
-
0.1
IFRS 16 lease inter
est
12.2
11.8
F
air value adjustment t
o derivativ
es
16.4
4.
6
49.2
36.2
The fair v
alue adjustment to deriv
ativ
es r
elates t
o differ
ences betw
een the fair v
alue of forw
ar
d foreign curr
ency
contracts and writt
en options that w
ere not designat
ed for hedge accounting fr
om one period end to the ne
xt.
14. T
AX
A
TION
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£m)
(£m)
Current t
ax
86.2
83.2
Adjustment in respect t
o prior periods
(5.7)
13.6
T
otal current t
ax
80.5
96.8
Deferr
ed tax
(8.5)
(10.
1)
Adjustment in respect of prior periods
6.7
(0.2)
T
otal def
erred tax (see not
e 28)
(1.8)
(10.3)
78.7
86.5
Profit bef
ore tax
ation
335.6
8.5
T
axation at the st
andard rat
e of tax in the UK of 19% (20
21: 19%)
63.8
1
.6
Non-t
axable income
(14.4
)
(3.9)
Expenses not deductible for t
ax purposes
62.4
7
7.
0
Other tax adjustments
(15.6)
(1.6)
Adjustments in respect of prior periods - curr
ent tax
(5.7)
13.6
Adjustments in respect of prior periods - def
erred tax
6.7
(0.2)
Changes in deferr
ed tax rat
e
(18.5)
-
78.7
86.5
Non-t
ax
able income largely r
elat
es to diff
erences betw
een capit
al allow
ances and depreciation which are not
timing differ
ences on which deferr
ed tax is pr
o
vided. Expenses not deductible for t
ax purposes largely r
elat
es to
non-qualifying depreciation and impairments not qualifying for t
ax allo
w
ances.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
149
15.
EARNINGS PER SHARE FR
OM T
O
T
AL AND CONTINUING
OPERA
TIONS A
TTRIBUT
ABLE T
O THE E
QUITY
SHAREHOLDERS
Basic earnings per share is calculat
ed b
y dividing the earnings attributable t
o ordinary shar
eholders of the parent b
y
the w
eighted av
er
age number of ordinary shar
es outstanding during the y
ear
.
F
or diluted earnings per shar
e, the w
eighted av
erage number of shar
es, 471,
975,282 (FY
21: 501,
955,28
1), is adjusted t
o
assume conv
ersion of all dilutiv
e pot
ential ordinary shar
es under the Group
’s share schemes, being nil (FY21: 88,
605),
to giv
e the diluted w
eighted av
er
age number of shares of 471,
975,282 (FY21: 502,
043
,886). In FY21, as ther
e w
as a loss
for the period, the eff
ect of potent
ially dilutiv
e ordinary shar
es w
as anti-dilutiv
e, and ther
efor
e the weight
ed av
erage
number of shares f
or the Diluted EPS calculation w
as kept the same as f
or the Basic EPS calculation. There is there
for
e
no differ
ence between the Basic and Dilut
ed EPS calculations f
or both periods.
Basic and Dilut
ed Earnings Per Shar
e
52 weeks ended
24 April 2022
Basic and diluted,
continuing
operations
52 weeks ended
24 April 2022
Basic and diluted,
discontinued
operations
52 weeks ended
24 April 2022
Basic and diluted,
tot
al
52 weeks ended
25 April 2021
Basic and diluted,
continuing
operations
52 weeks ended
25 April 2021
Basic and diluted,
discontinued
operations
52 weeks ended
25 April 2021
Basic and diluted,
tot
al
(£’m)
(£’m)
(£’m
)
(£’m)
(£’m)
(£’m)
Profit for the period
2
24.1
25.7
2
49.8
(91.6)
8.6
(83.0)
Number in
thousands
Number in
thousands
Number in
thousands
Number in
thousands
Number in
thousands
Number in
thousands
W
eight
ed aver
age number
of shares
471,
975
471,
975
471,
975
501,955
501,955
501,955
Pence per share
Pence per share
Pence per share
Pence per share
Pence per share
Pence per share
Earnings per share
4
7.
5
5.4
52.9
(18.2)
1.7
(16
.5)
Adjust
ed Earnings Per Shar
e
The adjusted earnings per shar
e reflects the underl
ying performance of the business compar
ed with the prior period
and is calculated b
y dividing adjusted earnings b
y the w
eighted av
er
age number of shares for the period. Adjust
ed
earnings is used b
y management as a measure of pr
ofitability within the Gr
oup. Adjust
ed earnings is defined as pr
ofit/
(loss) for the period attribut
able to equity holders of the par
ent for each financial period but e
x
cluding the post
-t
ax
effect of cert
ain non-
trading it
ems. T
ax has been calculated with r
efer
ence to the e
ffectiv
e rat
e of t
ax for the Gr
oup.
The Direct
ors believ
e that the adjust
ed earnings and adjust
ed earnings per share measures pr
o
vide additional useful
information f
or shareholders on the underlying perf
ormance of the business and are consist
ent with ho
w business
performance is measur
ed internall
y
. Adjusted earnings is not a r
ecognised profit measur
e under IFRS and may not be
directly compar
able with adjust
ed profit measur
es used b
y other companies.
52 weeks ended
24 April 2022
Basic
52 weeks ended
24 April 2022
Diluted
52 weeks ended
25 April 2021
Basic
52 weeks ended
25 April 2021
Diluted
(£’m)
(£’m)
(£’m
)
(£’m)
Profit / (loss) for the period
249.8
249.
8
(83.0)
(83.0)
Pre-t
ax adjustments to pr
ofit / (loss) for the period for the f
ollowing it
ems:
Ex
ceptional items
1.3
1.3
1.6
1.6
F
air value adjustment t
o derivativ
es included within
Finance (income) / costs
(7
.6)
(7
.6)
4.
6
4.6
F
air value gains and pr
ofit on disposal of equity derivat
ives
(9.
9)
(9.9)
(82.2)
(82.2)
Realised for
eign ex
change loss
5.8
5.8
26.3
26.3
Share scheme
14.6
1
4.6
1.3
1.3
T
ax adjustments on the abov
e items
0.3
0.3
(5.9)
(5.9)
Adjusted pr
ofit / (loss) for the period
254.3
254.3
(137
.3)
(137
.3)
Number in
thousands
Number in
thousands
Number in
thousands
Number in
thousands
W
eight
ed aver
age number of shares
471,
975
471,
975
501,955
501,955
Pence per share
Pence per share
Pence per share
Pence per share
Adjusted E
arnings per share
53
.9
53
.9
(27
.3)
(27
.3)
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
150
16.
DISCONTINUED OPERA
TIONS
Subsequent to the period end, on 2
4 May 2022, the Gr
oup disposed of its US ret
ail businesses trading as Bobs St
ores
and East
ern Mount
ain Sports for cash consideration of $7
0.
0m (appr
o
x. £56.
1m). The disposal t
ook place thr
ough sale
of 100% of the share capit
al of Roberts 5
0 USA LL
C and its subsidiaries to GoDigit
al Media Gr
oup. These businesses
are r
eported as part of the R
est of W
orld operating segment.
As per IFRS 5 Non-current Assets Held f
or Sale and Discontinued Operations, this dispos
al group has been classified as
held for sale and as a discont
inued operation. A pr
ofit on disposal of appr
o
x. £30.
0m will be recognised in FY23
.
The follo
wing major classes of assets and liabilities relating t
o the disposal gr
oup hav
e been classified as held for sale
in the consolidation balance sheet as at
24 April 2022:
24 April 2022
(£’m)
Inv
entories
3
7.
7
T
rade and other r
eceivables
2.3
Assets held for sale
40.0
T
rade and other pay
ables
10.6
Pro
visions
3.2
Lease liabilities
8.9
Liabilities held for sale
22.7
The Cash Flow St
at
ement includes the follo
wing amounts relating t
o this discontinued oper
ation:
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£’m)
(£’m)
Operating activities
4.2
6.9
Financing activities
(6.
1)
(9.
9)
Net cash outflow fr
om discontinued operations
(1.9)
(3.0)
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
151
17
.
PR
OPER
TY
, PLANT AND E
QUIPMENT
Right of
use asset
Fr
eehold land and
Buildings
Long-term
Leasehold
Short-t
erm
leasehold
impro
vements
Plant and
Equipment
T
ot
al
(£’m)
(£’m)
(£’m
)
(£’m)
(£’m)
(£’m)
COST
At 26 April 2020
524
.4
918.9
70.6
131.6
772.6
2,418.
1
Acquisitions
2
.1
0.5
-
-
29.0
31.6
Additions
118.8
84.3
4.
3
2
.0
128.8
338.2
Eliminated on dispos
als
(48.
1)
(16.5)
(0.7)
(6.0)
(57
.4)
(128.7)
Reclassifications /
Remeasurements
(1)
76.4
(79.
4)
79.2
0.1
8.7
8
5.0
Ex
change differences
(4.5)
(2.4)
(0.
1)
(0.3)
(2.9)
(10.2)
At 25 April 2021
6
69.1
905
.4
153.3
127
.4
878.8
2,734.0
Acquisitions (see not
e 32)
5.6
7.
0
-
-
6.9
19.5
Additions
100
.
9
79.3
4.1
2.5
195.3
382.
1
Eliminated on dispos
als
(75.9)
(42.0)
(1.2)
(4.7)
(82.0)
(205.8)
Reclassifications /
Remeasurements
(2)
(5.4)
(43.4)
-
-
(0.2)
(49.
0)
Ex
change differences
(7
.7)
(2.3)
(0.5)
(0.
1)
(3.0)
(13.6)
At 24 April 2022
686.6
9
04.0
155.7
125.
1
995.8
2,867
.2
A
CCUMULA
TED DEPRE
CIA
TION AND IMPAIRMENT
At 26 April 2020
(218.7)
(153.3)
(16.7)
(113.9)
(567
.9)
(1,070.5)
Charge for the period
(82.1)
(7
4
.5)
(11.6)
(11.5)
(118.8)
(298.5)
Impairment
(168.2)
(84.4)
(3.9)
(0.1)
(59
.8)
(316.4)
Eliminated on dispos
als
4
7.
5
11.2
0.3
6.7
5
4.4
120.
1
Reclassifications /
Remeasurements
(1)
-
18
.1
(17
.9)
-
(8.8)
(8.6)
Ex
change differences
2.1
0.2
0
.1
0.1
2.3
4.
8
At 25 April 2021
(419.
4)
(282.7)
(49.7)
(118.7)
(698.
6)
(1,569
.1)
Charge for the period
(77
.6)
(47
.9)
(12.4)
(
3.6)
(105
.1)
(246.6)
Impairment
(76
.8)
(106.5)
(2.0)
-
(40.7)
(226.0)
Eliminated on dispos
als
75.
9
15.7
1
.1
1.8
7
9.1
1
73.6
Reclassifications /
Remeasurements
(2)
-
0.
6
(0.
1)
(1.
1)
4.0
3
.4
Ex
change differences
6.0
0.
3
0.1
0.2
1.9
8.
5
At 24 April 2022
(491.
9)
(420.5)
(63.
0)
(121.4)
(759.4)
(1,856.2)
NET BOOK V
ALUE
At 24 April 2022
194.7
483.5
92.7
3.7
236.4
1,011.0
At 25 April 2021
249.7
622.7
103.6
8.7
180.2
1,
164.
9
At 26 April 2020
3
05.7
765
.
6
5
3.9
1
7.
7
2
04.7
1,347
.6
(1)
In FY21 a number of properties w
ere identified that w
ere pre
viously classified within Freehold Land and Buildings but management belie
ve
it to be more appr
opriate t
o classify within Long-term Leasehold. These hav
e therefore been adjust
ed in the prior period as reclassifications.
(2)
During the period assets wer
e identified that were pr
eviously classified within Pr
operty, Plant and Equipment but management belie
ve it t
o be
more appropriat
e to classify within Inv
estment Properties. These hav
e therefor
e been adjusted in the period as reclassifications.
Note 2 pr
o
vides further detail on the pr
operty relat
ed impairments (relat
ing to R
OU assets and freehold land
and buildings).
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
152
Leases
The Group only has pr
operty leases within the scope of IFRS 16, including r
etail st
ores, offices and w
arehouses. Leases
are lar
gely for a period betw
een 1 – 15 y
ears typically with br
eak clauses. It is management’s intention t
o continue t
o
enter int
o turno
v
er linked leases in the futur
e.
The Group pr
esents right-of-use assets that do not meet the de
finition of inv
estment pr
operty in ‘pr
operty, plant and
equipment’, the same line item as it pr
esents underlying assets of the s
ame nature that it o
wns. The carrying amount
and mo
vements in the period can be seen in the t
able abo
v
e.
Lease liabilities are pr
esented separ
at
ely within the Consolidat
ed Balance Sheet. The maturity analysis of lease
liabilities is sho
wn in note 30(f). Int
erest e
xpense on the lease liability is present
ed as a component of finance costs as
per note 13
. Cash payments for the principal portion and the int
erest portion of the lease liability ar
e present
ed in the
Consolidat
ed Cash Flow St
at
ement with further details giv
en in not
e 27
.
The Group is party t
o a number of leases that are classed as short t
erm leases and with v
ariable lease payments.
These are typically pr
operty leases on turno
ver based r
ents. Not
e 8 discloses variable lease payments and short t
erm
and lo
w value lease e
xpenses incurred in the period. Cash flo
ws in the period r
elating t
o variable lease payments,
short term lease payments, and leases f
or lo
w value assets w
ere appro
x. £33m (FY21: appr
o
x. £24m
). It is expect
ed that
future cash flo
ws will not be mat
erially differ
ent t
o the FY22 cash flo
ws.
Leases to which the Gr
oup is committed but hav
e not yet commenced at period end are not consider
ed to
be material
.
18.
INVESTMENT PROPER
TIES
T
otal
(£’m)
COST
At 26 April 2020
45.8
Eliminated on dispos
als
(7
.6)
At 25 April 2021
38.2
Additions
42.0
Reclassifications
(1)
43.4
At 24 April 2022
123.6
A
CCUMULA
TED DEPRE
CIA
TION AND IMPAIRMENT
At 26 April 2020
(26.
9)
Charge for the period
(1.9)
Impairment
(0.6)
Eliminated on dispos
als
5.3
At 25 April 2021
(24.
1)
Charge for the period
(5.
9)
Impairment
(1.0)
Reclassifications
(1)
(3.4)
At 24 April 2022
(34.4)
NET BOOK V
ALUE
At 24 April 2022
89.
2
At 25 April 2021
1
4.1
At 26 April 2020
18.9
(1)
During the period assets wer
e identified that were pr
eviously classified within Pr
operty, Plant and Equipment but management belie
ve it t
o be more
appropriate t
o classify within Inv
estment Properties. These have ther
efore been adjust
ed in the period as reclassifications.
The fair v
alues of the Group
’s inv
estment properties as at 2
4 April 2022 and 25 April 2021 w
ere estimat
ed as being
materiall
y in line with carrying v
alues. The valuations w
ere calculated b
y the Gr
oup
’s internal pr
operty t
eam who are
appropriat
ely qualified chart
ered surv
e
y
ors and follo
w the applicable v
aluation methodology of the Ro
y
al Institute of
Charter
ed Surv
ey
ors. Not
e 2 pr
ovides further det
ail on the property r
elat
ed impairments.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
153
19
.
INT
ANGIBLE ASSETS
Goodwill
T
rademarks
and licenses
Brands
Customer r
elated
T
ot
al
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
COST
At 26 April 2020
17
3.4
94.0
90.4
-
357
.8
Acquisitions
6.0
-
-
-
6.0
Additions
-
1
.0
-
-
1.0
Disposals
-
(3.3)
-
-
(3.3)
Ex
change adjustments
(8.7)
(1.0)
(9.8)
-
(19.5)
At 25 April 2021
170.7
90.7
80.6
-
342
.0
Acquisitions
1.3
-
-
5.7
7.
0
Ex
change adjustments
4.8
0.4
6
.4
-
11.6
At 24 April 2022
17
6.8
91.
1
8
7.
0
5.7
360.6
AMORTISA
TION AND IMPAIRMENT
At 26 April 2020
(119.3)
(89.
1)
(6.0)
-
(214.4)
Amortisation charge
(0.3)
(1.3)
(5.5)
-
(7.
1)
Impairment
(9.
1)
-
-
-
(9.
1)
Disposals
-
3.3
-
-
3.3
Ex
change adjustments
4.7
0.4
0.7
-
5.8
At 25 April 2021
(124.0)
(86.7)
(10.8)
-
(221.5)
Amortisation charge
-
(0.5)
(6.0)
(1.0)
(7.5)
Impairment
(5.7)
-
-
-
(5.7)
Ex
change adjustments
(2.7)
(0.
1)
(2.5)
-
(5.3)
At 24 April 2022
(132.4)
(87.3)
(19.3)
(1.0)
(240.0)
At 24 April 2022
44.4
3.8
6
7.
7
4.7
120.
6
At 25 April 2021
46.7
4.0
69.
8
-
120.5
At 26 April 2020
54
.1
4
.9
84.4
-
1
43.4
Amortisation is char
ged to selling, distribut
ion and administrativ
e expenses in the consolidat
ed Income St
at
ement.
The majority of the net book value of int
angible assets r
elates t
o the £86.5m pur
chase of E
verlast in 200
7
.
The carrying value of goodwill and br
ands that are consider
ed to hav
e an indefinite life ar
e allocat
ed to the Gr
oup
’s
operating segments be
fore aggr
egation. W
ith the ex
ception of Ev
erlast, none of the individual cash-gener
ating units
(CGUs) ar
e considered mat
erial t
o goodwill or indefinit
e life int
angibles. The carrying value o
f goodwill and brands
allocated t
o the Gr
oup
’s CGUs (as aggr
egated e
x
cept in the case of E
v
erlast) is sho
wn below:
24 April 2022
25 April 2021
Goodwill
Brands
Goodwill
Brands
(£’m)
(£’m)
(£’m)
(£’m)
Wholesale & Licensing (e
x
cl. E
verlast)
9.9
-
14.3
-
Ev
erlast
34.5
6
7.
7
32.4
69.
8
44.4
6
7.
7
46
.7
69.
8
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
154
The Group t
ests the carrying amount of goodwill and
assets with an indefinit
e life annually f
or impairment
or more fr
equently if there ar
e indications that their
carrying v
alue might be impaired. The carrying amounts
of other intangible assets ar
e re
vie
w
ed for impairment if
there is an indication of impairment
.
Impairment is calculated b
y comparing the carrying
amounts to the v
alue in use derived from discount
ed
cash flo
w projections for each CGU t
o which the
intangible assets ar
e allocat
ed. A CGU is deemed to
be an individual fascia or br
and and these have been
grouped t
ogether int
o similar classes for the purpose
of formulating oper
ating segments as report
ed in not
e
4. The t
otal r
eco
ver
able amount of all CGUs in relat
ion
to the abo
ve int
angible assets was £228
.
1m of which
£128.3m relat
ed t
o E
verlast
. The reco
v
erable amount
relating t
o E
v
erlast is based on a value in use calculat
ion
that includes expect
ed cash flo
ws from ne
w commer
cial
negotiations. Based on management’s for
ecasts if these
new commer
cial negotiations ar
e unsuccessful there
could be a need for a full impairment r
evie
w of E
v
erlast’s
intangible assets
. Due to the ongoing challenges with
the ret
ail sect
or, part o
f the Wholesale & Licensing
goodwill w
as impaired in the period with an impairment
charge of £4
.4m (FY
21: £3.
1m) being r
ecognised where
the discounted pr
esent v
alue of future cash flo
ws did not
support the full v
alue of the asset.
V
alue in use calculations are based on fiv
e-y
ear
management for
ecasts with a terminal gr
o
wth rat
e
applied thereaft
er
, repr
esenting management’s estimate
of the long-t
erm gro
wth r
ate of the sect
or serv
ed b
y
the CGUs.
T
otal impairments of £5
.7
m (FY21: £9
.
1m) hav
e been
recognised in r
elation to goodwill on loss making
companies and are individually immat
erial t
o each CGU
that has been written do
wn. These impairments include
an element of the Wholesale & Licensing goodwill
and the goodwill from acquisitions in the period. The
impairment of goodwill from acquisitions in the period of
£1.3m has been recognised in Ex
ceptional Items,
see note 6
.
The Ev
erlast brand is amortised ov
er a 15 y
ear period
within the selling, distribution and administrativ
e
expenses cat
egory within the income st
atement
. The
amount charged t
o the income st
atement in the period
is £6.
0m (FY21: £5.5m), the futur
e amortisation char
ge is
expect
ed t
o be appro
ximately £6.
0m per annum for the
remaining 12 y
ear amortisat
ion period (FY21: 13 y
ear).
The ke
y assumptions, which ar
e equally applicable to each CGU
, in the cash flow projections used t
o support the
carrying amount of goodwill w
ere as f
ollows:
As at
24 April 2022
Wholesale & Licensing
(e
x
cl. E
verlast)
Ev
erlast
T
erminal sales gro
wth
2.0%
2.0%
5 year f
orecast gro
wth
(1)
(4.4%)
(0.6
%)
Discount rat
e
7.
5
%
13.5%
As at
25 April 2021
European Retail
Wholesale & Licensing
(e
x
cl. E
verlast)
Ev
erlast
T
erminal sales gro
wth
2.0%
2.0%
2.
0%
5 year f
orecast gro
wth
(1)
(3.5%)
(5.3%)
(1.6
%)
Gross margin
30% - 40%
-
-
Discount rat
e
6.3%
6.3%
12.
1%
(1)
The 5 year gro
wth rat
es are based on the aver
age growth o
ver 5 y
ears.
Hist
orically the same pr
e-t
ax discount rat
e w
as used in European R
etail and Wholes
ale & Licensing (e
x
cl. E
v
erlast) as
these CGU’s w
ere consider
ed to hav
e similar risk pr
ofiles. A specific discount rat
e is used for E
v
erlast as this business
operat
es in a differ
ent market and has diff
erent char
acteristics
.
The ke
y assumptions ar
e based on market dat
a and management’s historical e
xperience and future plans f
or
each CGU
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
155
Sensitivity Analy
sis
A reasonabl
y possible change in any k
e
y assumption would not cause the carrying v
alue of the Ev
erlast or Wholesale
& Licensing (e
x
cluding E
v
erlast) CGU to e
x
ceed its reco
verable amount, the t
able belo
w sho
ws the amount of
headroom and the r
evised assumption r
equired in or
der to eliminat
e the headr
oom in full.
Wholesale &
Licensing
(e
x
cl. E
verlast)
Ev
erlast
Reco
verable amount o
f CGU (£'m)
99.8
128.3
Current headroom (£'m
)
89.9
1
3.7
Revised 5-
year f
orecast gro
wth rat
e %
(6.0%)
0
.1%
Revised t
erminal gro
wth rat
e %
< (1000%)
(0.
1%)
Revised discount r
ate %
89.
0%
1
4.9
%
20.
INVESTMENTS IN ASSOCIA
TED UNDERT
AKINGS
The Group uses the equity method of accounting f
or associates and joint v
entur
es in accordance with IAS 28. The
follo
wing t
able shows the aggr
egat
e mov
ement in the Group
’s inv
estment in associat
es and joint v
entures:
Associates
(£’m)
At 25 April 2021 and 24 April 2022
-
The Group curr
ently holds a 49
.0% shar
e of F
our (Holdings) Limit
ed (FY21: 49
.0%), the carrying amount of this
inv
estment is £nil (FY21: £nil). Det
ailed disclosures hav
e not been presented as the r
esults are immat
erial. The Group
is o
wed £6
2.4m fr
om the group of companies headed b
y F
our (Holdings) Limit
ed (£24
.0m net of amounts r
ecognised
in respect of loss allo
w
ance) (FY21: £64
.
9m, £26.5m net of loss allo
w
ance), see not
e 23 for further det
ails. The group of
companies headed b
y F
our (Holdings) Limited made a pr
ofit of £11.5m in the period (FY21: pr
ofit of £8.
1m).
21.
LONG-
TERM FINANCIAL ASSETS
The Group is not looking t
o make gains thr
ough increases in mark
et prices of its long-
term financial assets, ther
efor
e
on initial application of IFRS 9 the Group made the irr
e
vocable election t
o account f
or long term financial assets at
fair v
alue through other compr
ehensiv
e income (FV
OCI). The election has been made on an instrument-b
y-instrument
basis, only qualifying dividend income is recognised in pr
ofit and loss, changes in fair v
alue ar
e recognised within OCI
and nev
er reclassified to pr
ofit and loss, ev
en if the asset is impair
ed, sold or otherwise derecognised. The majority of
long-t
erm financial assets are r
ecognised in the UK Sports segment.
The fair v
alue of the long-t
erm financial assets is based on bid quot
ed market prices at the balance sheet dat
e or
where mark
et prices are not av
ailable, at management’s estimate of fair v
alue
.
The follo
wing table sho
ws the aggr
egate mo
vement in the Group
’s financial assets during the period:
24 April 2022
25 April 2021
(£m)
(£m)
At beginning of period
263.3
83.8
Additions
198.4
113.3
Disposals
(238.4)
(7
.0)
Amounts recognised through other compr
ehensive income
(8.
1)
77
.3
Ex
change differences
(8.6)
(4.
1)
206.6
2
63.3
Included within long-t
erm financial assets at the period ended 24 April 20
22 are the follo
wing dir
ect inter
ests held b
y
the Group
:
•
36.
9% (FY21: 36.8
%) inter
est in Mulberry Group plc
•
28.
9% (FY21: 35.
6
%) inter
est in Studio Ret
ail Group plc
•
2.2% (FY21: 5.
1%) interest in Hugo Boss A
G
•
V
arious other inter
ests, none of which repr
esent more than 5.
0% of the v
oting po
w
er of the inv
est
ee
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
156
The follo
wing table sho
ws the f
air value of each o
f the Group
’s long-term financial assets (
all listed):
24 April 2022
25 April 2021
(£m)
(£m)
Mulberry Group plc
65.3
52.0
Studio Retail Gr
oup plc
-
89.
7
Hugo Boss A
G
68.4
118.7
Other
72.9
2.9
At end of period
206.6
2
63.3
These holdings have been assessed under IFRS 9 F
inancial Instruments and cat
egorised as long-t
erm financial assets,
as the Group does not consider them t
o be associat
es and theref
ore
, they ar
e not accounted f
or on an equity basis,
see note 2.
Our strat
egic inv
estments ar
e intended t
o allo
w us to de
v
elop relationships and commer
cial partnerships with the
rele
v
ant ret
ailers and assist in building relationships with k
e
y suppliers and brands.
22. INVENT
ORIES
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£m)
(£m)
Goods for res
ale
1,277
.6
1,096
.6
As at 24 April 2022, goods f
or res
ale include a right of return asset t
otalling £3
.2m (FY21: £4
.5m). Amounts written off in
the period relating t
o st
ock w
as £59
.8m (FY21: £2
4.3m).
The follo
wing inv
ent
ory costs have been r
ecognised in cost of sales:
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£m)
(£m)
Cost of inv
entories r
ecognised as an expense
2,703
.3
2,094.5
The Direct
ors hav
e re
view
ed the opening and closing pr
ovisions against in
v
entory and hav
e concluded that these are
fairly st
at
ed. The Group has re
vie
w
ed its estimates and assumptions f
or calculating inv
ent
ory pro
visions at 2
4 April
2022. Ov
erall pr
ovisions hav
e incr
eased from £219
.8m in FY21 t
o £236.
7m as at 2
4 April 2022, with this £16.
9m change in
pro
vision being recognised as a char
ge in cost of sales
.
23.
TRADE AND O
THER RECEIV
ABLES
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£m)
(£m)
Gross credit cust
omer receiv
ables
372.7
-
Allow
ance for e
xpected cr
edit loss on credit cust
omer receivables
(138.5)
-
Net credit cust
omer receivables
234.2
-
T
rade r
eceivables
56.4
57
.2
Deposits in respect of deriv
ative financial instruments
243
.9
131.0
Amounts ow
ed b
y relat
ed parties (see note 35)
24.2
26.8
Other receiv
ables
170.2
24
6.9
Prepayments
112.5
84.6
841.
4
546
.5
F
ollo
wing the acquisition of Studio Ret
ail Limited (see not
e 32), credit cust
omer r
eceivables no
w mak
e up a significant
element of trade and other r
eceiv
ables. Further disclosur
e with regar
ds t
o the credit cust
omer receiv
ables and the
associated allo
wance for e
xpect
ed credit loss can be found at the end o
f this note
.
The Direct
ors consider that the carrying amount of trade and other r
eceivables appr
o
ximat
es to their f
air v
alue. The
maximum exposur
e t
o credit risk at the report
ing date is the carrying v
alue of each class of asset abo
v
e, plus an
y cash
balances. Other receiv
ables also include unremitted sales r
eceipts.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
157
Deposits in respect of deriv
ativ
e financial instruments are collat
er
al to co
v
er margin r
equirements f
or derivat
ive
trans
actions held with counterparties
. The collater
al requirement changes with the mark
et (which is dependent
on share price
, inter
est rat
es and v
olatility) and further purchases / s
ales of underlying inv
estments held.
Included within other receiv
ables is the r
eimbursement asset tot
alling £88.3m (FY21: £118
.3m) in relation t
o the Group
’s
ongoing non-UK tax enquiries, f
or further information see not
e 29
.
The majority of the Group
’s trade receiv
ables are held within the Wholes
ale & Licensing businesses, each customer’s
creditw
orthiness is assessed bef
ore payment t
erms are agr
eed.
Under IFRS 9
, the Group has applied the simplified appr
oach to pr
oviding f
or expect
ed cr
edit losses for trade
receiv
ables, using the lifetime e
xpect
ed loss pro
vision for all tr
ade receiv
ables. T
o measure the expect
ed credit losses,
trade r
eceivables hav
e been grouped based on credit risk char
acteristics, r
epresenting management’s vie
w of the
risk, and the days past due
. The credit quality of assets neither past due nor impaired is consider
ed t
o be good. The
Group considers a debt t
o be def
aulted at the point when no further amounts ar
e expect
ed t
o be reco
v
ered. F
inancial
assets are writt
en off when there is no r
easonable expect
ation of r
ecov
ery. If r
ecov
eries are subsequently made aft
er
receiv
ables hav
e been written off
, they are r
ecognised in profit or loss
.
The amounts ow
ed b
y r
elated parties mostl
y relat
es to the gr
oup headed b
y F
our (Holdings) Limited, f
or further det
ails
see note 35
.
Exposure t
o credit risk of tr
ade receiv
ables:
24 April 2022
25 April 2021
(£m)
(£m)
Current
24.2
31.8
0-30 days past due
14.2
12.0
30-60 days past due
4.6
4.0
60-90 days past due
3.0
2
.4
Over 90 day
s past due
10.4
7.0
56
.4
57.2
The credit quality of assets neither past due nor impair
ed is considered t
o be good.
The mov
ement in loss allo
w
ance relating t
o tr
ade receiv
ables and amounts o
wed b
y related parties can be anal
ysed
as follo
ws:
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£m)
(£m)
Opening position
68.3
46.2
Amounts charged t
o the income stat
ement
6.6
22.3
Amounts written off as uncollect
able
-
(0.
1)
Amounts reco
ver
ed during the period
-
(0.
1)
Closing position
74
.
9
68.3
Included in the belo
w table is the loss allo
w
ance mo
vement in amounts due fr
om relat
ed parties as f
ollow
s:
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£m)
(£m)
Opening position
38.4
33.8
Amounts charged t
o the income stat
ement
-
4.6
Closing position
38.4
38.4
The gross carrying amount of the balance due is £62.
6m (FY21: £65.2m). The char
ge in the prior period w
as recor
ded in
Selling, distribution and administrativ
e expenses. £17
.6m of the gross amounts due fr
om relat
ed parties balance is due
in less than one y
ear with the remaining being due in more than a one y
ear (FY21: £12.4m due less than one y
ear).
The Group has no significant concentrat
ion of credit risk, with e
xposure spr
ead ov
er a large number of customers. The
loss allo
wance / char
ges hav
e been determined b
y refer
ence to past de
fault e
xperience, current / f
orecast
ed trading
performance and futur
e economic conditions.
Deposits in respect of deriv
ativ
e financial instruments and prepayments ar
e not considered t
o be impair
ed.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
158
Credit Cust
omer R
eceiv
ables
Cert
ain of the Studio
’s trade r
eceivables ar
e funded
through a securitis
ation facility that is secur
ed against
those receiv
ables. The finance pro
vider will seek
repayment of the finance
, as to both principal and
inter
est, only t
o the ext
ent that collections fr
om the trade
receiv
ables financed allo
ws and the benefit of additional
collections remains with the Gr
oup. A
t the period end,
receiv
ables of £287
.2m w
ere eligible t
o be funded via the
securitisation f
acility, and the f
acilities utilised
w
ere £143
.6m.
Other information
The aver
age credit period t
ak
en on sales of goods is 219
days. On av
er
age, int
erest is char
ged at 3.5% per month
on the outstanding balance
.
Studio will undertak
e a r
easonable assessment of the
creditw
orthiness of a cust
omer befor
e opening a ne
w
credit account or significantl
y increasing the credit
limit on that credit account
. Studio will only offer cr
edit
limit increases f
or those customers that can r
easonably
be expect
ed t
o be able to aff
ord and sust
ain the
increased r
epayments in line with the affor
dability and
creditw
orthiness assessment. Ther
e are no cust
omers
who repr
esent more than 1% of the t
ot
al balance of the
Group
’s trade receiv
ables.
Where appr
opriate
, the Group will off
er forbear
ance
to allo
w customers reasonable time t
o repay the debt
.
Studio will ensure that the f
orbearance option deplo
y
ed
is suitable in light of the cust
omer’s cir
cumstances
(paying due regar
d to curr
ent and future personal and
financial circumst
ances). Where r
epayment plans are
agreed, Studio will ensur
e that these are aff
ordable t
o
the customer and that unr
easonable or unsust
ainable
amounts are not r
equested. A
t the balance sheet date
there w
er
e 24
,711 accounts (
acquisition date
: 23,396)
with tot
al gr
oss balances of £16.2m (acquisition dat
e:
£15.
1m) on r
epayment plans. Pro
visions are assessed as
detailed abo
v
e
.
During the current period, o
v
erdue r
eceiv
ables with
a gross v
alue of £5.3m w
ere sold to thir
d party debt
collection agencies. As a result o
f the sales, the
contractual rights t
o receiv
e the cash flo
ws fr
om these
assets w
ere tr
ansferred t
o the pur
chasers. Any gain or
loss betw
een actual reco
v
ery and expect
ed reco
very is
reflect
ed within the impairment char
ge.
Allowance for e
xpect
ed credit loss
The follo
wing tables pr
o
vide information about the e
xposure t
o credit risk and E
CLs for tr
ade receiv
ables fr
om
individual customers as at 2
4 April 2022:
24 April 2022
24 F
ebruary 2022
T
rade r
eceivables
T
rade r
eceivables
on forbearance
arrangements
T
ot
al
T
rade receivables
T
rade r
eceivables
on forbearance
arrangements
T
ot
al
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
Ageing of trade receiv
ables
Not past due
272.
1
1
4.3
286.4
298.4
13.6
312.0
Past due:
0 - 60 days
36.7
1.8
38.5
36.8
1.5
38.3
60 - 120 days
20.0
0
.1
2
0.1
1
4.9
-
1
4.9
120+ days
2
7.
7
-
2
7.
7
17
.8
-
17
.8
Gross trade r
eceivables
356.5
16.2
372.7
3
6
7.9
1
5
.1
383.0
Allow
ance for e
xpected
credit loss
(127
.3)
(11.2)
(138.5)
(118.5)
(10.5)
(129.
0)
Carrying value
229.2
5.0
234
.2
249.
4
4.6
254.0
24 F
ebruary 2022 to 2
4 April 2022
Stage 1
Stage 2
Stage 3
T
otal
(£’m)
(£’m)
(£’m)
(£’m)
Gross trade r
eceivables
248.6
5
9.9
64.2
372.7
Allow
ance for doubtful debts:
Acquisition balance
(6
1.1)
(25.
7)
(42.2)
(129.0)
Impairment charge
0.6
-
(14.8)
(14.2)
Utilisation in period
0.1
-
4.6
4.7
Closing balance
(60.
4)
(25.7)
(52.4)
(138.5)
Carrying value
188.2
34.2
11.8
234.2
Analysis of impairment char
ge:
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
159
24 F
ebruary 2022 to 2
4 April 2022
(£’m)
Impairment charge impacting on pr
ovision
(14.2)
Reco
veries
1
.1
Other
(0.2)
Impairment charge
(13.3)
Sensitivity analysis
Management judgement is requir
ed in setting assumptions around pr
obabilities of default, cash r
eco
v
eries and the
w
eighting of macro-economic scenarios applied t
o the impairment model, which hav
e a mat
erial impact on the
results indicat
ed b
y the model.
A 1% increase/
decrease in the probability of def
ault w
ould increase/
decrease the pro
vision amount b
y
appro
ximately £2.2m.
A 1% increase/
decrease in the assumed reco
v
eries rat
e w
ould result in the impairment pr
ovision decr
easing/increasing
b
y appro
ximat
ely £1.
1m.
Changing the w
eighting of macro-economic scenarios so that the base-case scenario
’s weighting is halv
ed to 30%
(with upside increasing t
o 30% and both do
wnside and sev
er
e increasing t
o 20%) w
ould result in the impairment
pro
vision reducing b
y appro
ximatel
y £1.7
m.
These sensitivities reflect management’s assessment of r
easonably possible changes t
o ke
y assumptions which could
result in a mat
erial adjustment t
o the lev
el of pr
ovision within the ne
xt financial y
ear
.
24.
CASH AND CASH E
QUIV
ALENTS
24 April 2022
25 April 2021
(£m)
(£m)
Cash in bank and in hand - Sterling
135.4
1
4
4.1
Cash in bank and in hand - US dollars
(4.7)
9
7.
4
Cash in bank and in hand - Euros
176
.4
192.5
Cash in bank and in hand - Other
29.
7
23
.0
Cash and cash equivalents including o
v
erdrafts at period end
336.8
4
5
7.
0
25. SHARE CAPIT
AL
24 April 2022
25 April 2021
(£m)
(£m)
AUTHORISED
999,5
00,0
10 ordinary shares of 10p each
10
0.0
1
00.0
ALLO
T
TED
, CALLED UP AND FULL
Y P
AID
640,
602,369 (2021: 640
,602,36
9) ordinary shar
es of 10p each
6
4.1
6
4.1
SHARE CAPIT
AL
At 24 April 2022 and A
t 25 April 2021
6
4.1
6
4.1
The Group holds 151,2
40
,
17
4 shares in T
reasury as at period end (FY
21: 121,260,
175).
The holders of ordinary shar
es are entitled t
o receiv
e dividends as declar
ed from time t
o time and are entitled t
o one
v
ote per or
dinary share at gener
al meetings of the Company
.
W
e are aw
are of unsponsor
ed American Depository R
eceipt (ADR) pr
ogrammes est
ablished from time t
o time in
respect of our shar
es. W
e have not sponsor
ed or authorised their creation and an
y questions should be dir
ected t
o the
rele
v
ant depositary
.
Fr
asers has not and does not intend t
o off
er or sell its Ordinary Shares or other securit
ies (in the form of ADR or
otherwise) to the gener
al public in the Unit
ed Stat
es nor has it list
ed or intends t
o list its Ordinary Shar
es or other
securities on any nat
ional securities ex
change in the United Stat
es or t
o encourage the tr
ading of its Ordinary Shar
es
on any o
v
er the count
er market locat
ed in the Unit
ed Stat
es. F
rasers does not mak
e arrangements t
o permit the
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
160
v
oting of Ordinary Shar
es held in the form of ADRs
and its publication of periodic financial and other
information is not int
ended t
o facilit
ate the oper
ation of
any unsponsor
ed ADR progr
amme under Rule 12g3-
2(b)
of U
.S. Securities Ex
change Act of 1934
, as amended
or otherwise.
Contingent Share A
war
ds
Share Schemes
The 2011 Share Scheme w
as a f
our year scheme
based upon achieving underl
ying EBITD
A (befor
e the
costs of the scheme) of £215m in FY12, £25
0m in FY13
,
£260m in FY
14 and £300m in FY15 coupled with the
individual participating emplo
y
ee’s s
atisfact
ory personal
performance and continued emplo
yment. All of the
abo
ve t
argets w
ere met meaning that appro
x. 11.6m
shares v
est
ed in September 20
17 and appro
x. 4m shar
es
v
ested in Sept
ember 2015.
Betw
een 26 April 2021 and 24 April 20
22, 24
,36
1 shares
sold b
y participants follo
wing ex
ercise of aw
ards under
the Group 2011 Shar
e Scheme w
ere acquir
ed b
y Ester
a
T
rust (Jersey) Limit
ed, as T
rustee of the Sports Dir
ect
Emplo
yee Bene
fit T
rust (
T
rustee), with the acquisition
being funded b
y a loan advanced b
y the Company
of £0.2m. The shar
es w
ere acquired at prices o
f
betw
een 603.5 and 683
.5 pence per share in off-mark
et
trans
actions. The weight
ed av
erage pur
chase price w
as
658 pence per share (FY
21: 365 pence per share).
The Group holds 17
,386,
913 shares in the Own Shar
e
Reserv
e as at period end (FY21: 17
,386,913).
F
earless 1000 Bonus Scheme
FY21 scheme launch
At the annual general meet
ing in October 2020
, our
shareholders gav
e appr
ov
al for the F
earless 1000 bonus
scheme. Under this scheme shar
es may be issued b
y the
Group t
o emplo
y
ees for no cash consideration. All Gr
oup
emplo
yees (
e
x
cluding Ex
ecutiv
e Direct
ors, their family
associates, and the Head o
f Commercial) ar
e eligible to
participat
e in the scheme. Under the scheme
, 10 million
shares ar
e aw
arded t
o eligible emplo
yees if cert
ain
market condit
ions are achie
ved. This w
ould equat
e t
o
£100m w
orth of fully paid ordinary shar
es in Fr
asers
Group Plc that could be paid t
o eligible emplo
y
ees if our
share price r
eaches £10 any time o
v
er the ne
xt four y
ears.
The share price must st
ay abov
e £10 for 30 consecutive
trading day
s to trigger the v
esting of shar
es at the end
of the four y
ear v
esting period. 50% of the shar
es are
grant
ed aft
er 4 years and the r
emaining 50% aft
er 5
y
ears. One thousand eligible emplo
y
ees will receiv
e the
shares with a pot
ential v
alue ranging fr
om £50k t
o £1m if
the share price is at £10 at the v
esting dat
es. In all other
respects the shar
es rank equally with other full
y paid
ordinary shar
es on issue.
The share element of the scheme is deemed t
o be an
equity-settled scheme as defined b
y IFRS 2 Shar
e-based
payment. In line with the accounting policy in not
e 1,
the fair v
alue at the dat
e of grant is e
xpensed to the
Consolidat
ed Income Stat
ement on a straight
-line basis
o
ver the v
esting period, with the corr
esponding credit
going to equity
.
The assessed fair v
alue at grant dat
e of the shares
grant
ed during the period ended 25 April 2021 w
as
165.6
9p per share f
or the 4 year v
esting period and
165.
95p per shar
e for the 5 y
ear vest
ing period. The
fair v
alue at grant dat
e is independently det
ermined
using an adjusted f
orm of the Black
-Scholes model
which includes a Monte Carlo simulat
ion model that
tak
es int
o account the ex
ercise price, the t
erm of the
option, the impact of dilution (where mat
erial), the shar
e
price at grant dat
e and e
xpected price v
olatility of the
underlying share
, the e
xpected dividend yield, and the
risk
-free int
erest r
ate f
or the term o
f the scheme. The
model inputs for shar
es grant
ed during the period ended
25 April 2021 included:
•
ex
ercise price: £nil
•
grant dat
e: 10 F
ebruary 2021, being the dat
e the
Deed of Grant w
as ex
ecuted
•
expiry dat
e: 7 Oct
ober 202
4 and 7 October 2025
•
share price at gr
ant date
: 450p
•
e
xpected price v
olatility of the Compan
y’s
shares: 38.8
%
•
expect
ed dividend yield: 0%
•
risk
-free int
erest r
ate
: 0.
1%
The expect
ed price v
olatility is based on the historic
v
olatility (based on the remaining lif
e of the scheme),
adjusted f
or any e
xpect
ed changes to futur
e v
olatility
due to publicl
y av
ailable information.
A charge in the Consolidat
ed Income St
atement of
£0.8m w
as recognised in the FY21 period in relation t
o
the equity-settled element of the scheme r
esulting in
£0.8m being held in equity
.
The scheme also has a cash-settled bonus for all other
eligible emplo
yees who do not qualify f
or the F
earless
1000 share scheme
. The cash bonus at the end of the
4 y
ear period is based on the employ
ee t
enure and
has been accounted as an other long-
t
erm employ
ee
benefit as defined b
y IAS 19 Emplo
y
ee Benefits. A
charge in the Consolidat
ed Income St
atement of
£0.5m w
as recognised in the FY21 period along with a
corresponding liability
.
FY22 updat
e
At the annual general meet
ing in October 2021, our
shareholders gav
e appr
ov
al for an e
xt
ension to the
performance period for the F
earless 1000 plan up
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
1
61
to fiv
e years. This is seen t
o benefit participants as it
pro
vides an additional period t
o achiev
e the £10 share
price tar
get giv
en that the difficulties associated with
the Co
vid-
19 pandemic have impact
ed the business in
the first y
ear of the plan. In addition, the Remuneration
Committee can no
w allo
w all aw
ards t
o v
est early if a
£15 share price t
arget is achie
v
ed.
As per IFRS 2 Share-based payments, the original f
air
v
alue charge for the equity
-settled scheme will continue
to be t
ak
en o
ver the original period. In addition, an
increment
al charge is being t
ak
en that repr
esents the
additional v
alue pro
vided t
o participants b
y making
these amendments and this additional charge is being
tak
en o
v
er the new modified period.
The tot
al assessed fair v
alue of the amendment at gr
ant
date is £1.
1m which is being recognised o
ver the 4 and 5
y
ear vesting periods
.
A charge in the Consolidat
ed Income St
atement of
£0.
15m has been recognised in the period in relation
to the modificat
ion with an equivalent £0
.
15m being
recognised in equity
.
F
or the equity-settled element of the FY21 F
earless 1000
plan, a charge in the Consolidat
ed Income St
atement
of £4.
1m has been recognised in the period in relation t
o
the scheme with an equiv
alent £4.
1m being r
ecognised
in equity
.
F
or the cash-settled element of the FY21 F
earless 1000
plan, a charge t
o the Consolidat
ed Income Stat
ement
of £2.4m has been r
ecognised in the period along with a
corresponding incr
ease in liability
.
Ex
ecutive Shar
e Scheme
At the annual general meet
ing in October 2021, our
shareholders gav
e appr
ov
al for the Ex
ecutive Shar
e
Scheme. Under this scheme shar
es may be issued b
y
the Group t
o Chris W
ootton (
CF
O), Sean Ne
vitt (Chie
f
Commercial Officer) and David Al-Mudallal (
COO
) for
no cash consideration. Under the scheme
, 600
,000
shares per person ar
e aw
arded t
o the individuals if
certain mark
et conditions ar
e achiev
ed. The share price
must stay abo
v
e £12 for 30 consecutiv
e trading days t
o
trigger the v
esting of shares at the end of the f
our year
v
esting period, or the Remuneration C
ommittee can
no
w allow all aw
ards to v
est early if a £15 shar
e price
tar
get is achiev
ed. 50% of the shares are gr
anted af
ter
4 y
ears and the remaining 50% aft
er 5 y
ears. In all other
respects the shar
es rank equally with other full
y paid
ordinary shar
es on issue.
The scheme is deemed to be an equity
-settled scheme
as defined b
y IFRS 2 Share-based payment
. In line with
the accounting policy in not
e 1, the fair v
alue at the
date of gr
ant is e
xpensed to the Consolidat
ed Income
Stat
ement on a str
aight-line basis o
v
er the v
esting
period, with the corresponding cr
edit going to equity
.
The assessed fair v
alue at grant dat
e of the shares
grant
ed during the period ended 24 April 20
22 w
as
364.22p per shar
e for the 4 y
ear v
esting period and
368.44p per shar
e for the 5 y
ear v
esting period. The
fair v
alue at grant dat
e is independently det
ermined
using an adjusted f
orm of the Black
-Scholes model
which includes a Monte Carlo simulat
ion model that
tak
es int
o account the ex
ercise price, the t
erm of the
option, the impact of dilution (where mat
erial), the shar
e
price at grant dat
e and e
xpected price v
olatility of the
underlying share
, the e
xpected dividend yield, and the
risk
-free int
erest r
ate f
or the term o
f the scheme. The
model inputs for shar
es grant
ed during the period ended
24 April 2022 included:
•
ex
ercise price: £nil
•
grant dat
e: 14 Oct
ober 2021
•
expiry dat
e: 7 Oct
ober 2025 and 7 Oct
ober 2026
•
share price at gr
ant date
: 632p
•
expect
ed price v
olatility of the Compan
y’s
shares: 39
.85%
•
expect
ed dividend yield: 0%
•
risk
-free int
erest r
ate
: 0.54
%
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
162
The expect
ed price v
olatility is based on the historic v
olatility (based on the remaining life of the scheme), adjust
ed for
any e
xpect
ed changes to futur
e v
olatility due to publicl
y av
ailable information.
A charge in the Consolidat
ed Income St
atement of £0
.8m has been recognised in the period in r
elation t
o the scheme
with an equiv
alent £0.8m being r
ecognised in equity
.
26.
O
THER RESER
VES
Permanent
contribution
to capit
al
Capital
redemption
reserv
e
Re
verse
combination
reserv
e
Hedging
reserv
e
T
otal other
reserv
es
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
At 27 April 2020
0.1
8.0
(987
.3)
28.0
(951.2)
Cash flow hedges
- recognised in the period
-
-
-
0.4
0.4
- reclassified in the period and report
ed in
the sales
-
-
-
(2.8)
(2.8)
- reclassified and report
ed in cost of sales
-
-
-
(17.
1)
(17
.
1)
- tax
ation
-
-
-
3
.0
3.0
At 25 April 2021
0.1
8.0
(987
.3)
11.5
(967
.7)
Cash flow hedges
- recognised in the period
-
-
-
52.1
52.1
- reclassified and report
ed in cost of sales
-
-
-
7.
5
7.
5
- tax
ation
-
-
-
(15.8)
(15.8)
At 24 April 2022
0
.1
8.0
(987
.3)
55.3
(923.
9)
The permanent contribution to capit
al relat
es t
o a cash
payment of £50
,000 t
o the Compan
y on 8 F
ebruary
2007 under a deed of capit
al contribution.
The capital r
edemption reserv
e ar
ose on the redemption
of the Compan
y’s redeemable pre
fer
ence shares of 10p
each at par on 2 March 200
7
.
The re
verse acquisit
ion reserv
e exists as a r
esult of
the adoption of the principles of re
v
erse acquisition
accounting in accounting for the Gr
oup restructuring
which occurred on 2 Mar
ch 2007 and 29 March 200
7
betw
een the Company and Sports W
orld International
Limited, Br
ands Holdings Limit
ed, International Br
and
Management Limited and CD
S Holdings SA with Sports
W
orld International Limit
ed as the acquirer
.
The hedging reserv
e repr
esents the cumulativ
e amount
of gains and losses on hedging instruments deemed
effectiv
e in cash flow hedges. The cumulativ
e deferr
ed
gain or loss on the hedging instrument is recognised
in the income stat
ement only when the hedged
trans
action impacts the income stat
ement.
Other Balance Sheet Reserv
es
The foreign curr
ency translation r
eserv
e is used to r
ecord
ex
change differences arising fr
om the translation of
the Financial St
at
ements of foreign subsidiaries and
associates
.
The own shar
es reserv
e r
epresents the cost of shar
es in
Fr
asers Group Plc pur
chased in the market and held b
y
Fr
asers Group Emplo
y
ee Benefit T
rust to s
atisfy options
under the Group
’s share options scheme. The tr
easury
reserv
e r
epresents shares held b
y the Group in treasury
.
The Group holds 17
,386,
913 shares in the Emplo
yee
Benefit T
rust as at period end (FY21: 17
,386,
913).
The non-controlling int
erests of the Gr
oup mostly
relat
es t
o Sportland International Gr
oup AS and its
subsidiaries. This company is incorpor
ated in Est
onia
with the principal places of business being a number of
Baltic countries in Europe
. The non-controlling int
erests
hold 40% of the share capit
al of Sportland Int
ernational
Group AS
. During the period £5.6m pr
ofit (FY21: £3.
0m)
has been allocated t
o the non-contr
olling inter
ests
of Sportland Internat
ional Group AS, r
esulting in an
accumulated non-contr
olling int
erests at the end of the
period of £18.
0m (FY21: £12.4m
). A dividend of £1.3m w
as
paid to the non-contr
olling int
erest in the period (FY21:
£0.
9m). The gr
oup of companies headed b
y Sportland
Internat
ional Group AS has t
otal assets of £68
.6m (FY21:
£67
.8m) and t
otal liabilities of £23
.4m (FY21: £1
4.6m
).
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
163
27
. BORR
O
WINGS
24 April 2022
25 April 2021
(£m)
(£m)
Current:
Lease liabilities
117
.0
188.5
Non-Current
29.
7
23
.0
Bank and other loans
827
.
9
705.9
Lease liabilities
503.6
534.2
1,448.5
1,428.6
An analysis of the Gr
oup
’s t
otal borr
o
wings other than bank ov
erdrafts is as follo
ws:
24 April 2022
25 April 2021
(£m)
(£m)
Borro
wings - sterling
827
.
9
705.9
Group borr
owings (
e
x
cluding Studio Ret
ail Limited) ar
e at a rat
e of int
erest of 2.
0% (FY21: 1.3%) o
v
er the int
erbank
rat
e of the country within which the borro
wing entity r
esides. As part of the Studio Ret
ail Limit
ed acquisition, a
securitisation loan w
as acquired which had a balance at 24 April 2022 of £14
3.6m. The av
erage int
erest r
at
e paid on
the securitisation loan w
as 3.23%.
Reconciliation Of Liabilities Arising F
r
om Financing A
ctivities
The changes in the Group
’s liabilities arising from financing activities can be classified as follo
ws:
Non-current
borro
wings
Current
borro
wings
T
otal
(£m)
(£m)
(£m)
At 26 April 2020
1,37
6.2
147.
9
1,524.1
Cash-flows:
- Borro
wings drawn do
wn
1,
128.
1
-
1,128.
1
- Borro
wings repaid
(1,323.6)
-
(1,323.6)
- Borro
wings acquired through business combinations
1.4
-
1.4
Lease liability:
- IFRS 16 Lease Liabilities - cash-flow
s
-
(78.0)
(78.0)
- IFRS 16 Lease Liabilities - modifications/
remeasur
ements, transfers fr
om non-current
to curr
ent, and foreign e
xchange adjustments
(40.3)
9
8
.1
57.8
- IFRS 16 Lease Liabilities - new leases
98.3
20.5
118.8
At 25 April 2021
1,240.
1
188.5
1,428.6
Cash-flows:
- Borro
wings drawn do
wn
1,
37
4.4
-
1,
37
4.4
- Borro
wings repaid
(1,
484.4)
-
(1,484
.4)
- Borro
wings acquired through business combinations (not
e 32)
232.0
-
232.0
Lease liability:
- IFRS 16 Lease Liabilities - cash-flow
s
-
(176.2)
(176.2)
- IFRS 16 Lease Liabilities - modifications/
remeasur
ements, transfers fr
om non-current
to curr
ent, and foreign e
xchange adjustments
(136.7)
91.
1
(
45.6)
- IFRS 16 Lease Liabilities - new leases
9
0.1
11.4
101.5
- IFRS 16 Lease Liabilities - acquired thr
ough business combinations (note 32)
16.0
2.2
18.2
At 24 April 2022
1,331.5
117
.0
1,448.5
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
164
On 30 No
vember 2021 the Gr
oup re
financed its existing borr
o
wings and enter
ed into a combined t
erm loan and
re
v
olving credit facility of £9
30.
0m for a period of 3 y
ears, with the possibility t
o ext
end this b
y a further 2 years
. This
facility incr
eased to £9
40.
0m as at 24 April 20
22 and to £980
.0m subsequent t
o the period end. Giv
en the re
v
olving
credit f
acility is available f
or a minimum of 3 y
ears and the limited r
estriction of lending under the facility
, the balance
is classified as non-current on the Consolidat
ed Balance Sheet.
The Group continues t
o operat
e comfort
ably within its banking f
acilities and cov
enants and the Board remains
comfort
able with the Group
’s available headr
oom. The carrying amounts and fair v
alue of the borro
wings are not
materiall
y differ
ent.
Reconciliation of Net Debt:
24 April 2022
25 April 2021
(£m)
(£m)
Borro
wings
(1,
448.5)
(1,428.6)
Add back:
- Lease liabilities
620.
6
722.7
Cash and cash equivalents
336.8
45
7.0
Net debt
(491.
1)
(248.
9)
28.
DEFERRED T
AX ASSE
TS AND LIABILITIES
IFRS 16
Accounts
depreciation
ex
ceeding tax
depreciation
T
ax losses
reco
ver
able
Bonus
share
scheme
F
orwar
d
currency
contracts
Fair v
alue
adjustments
to int
angibles
Retirement
benefit
obligations
Other
tempor
ary
differences
T
otal
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
At 26 April 2020
28.5
1
9.6
-
-
(8.0)
(17
.6)
-
1.8
24.3
Credit
ed/(charged) t
o the
income stat
ement
14.6
4.1
-
-
(2.0)
1
.0
-
(7.
4)
10.3
Charged t
o reserv
es
-
-
-
(0.3)
-
2.5
-
-
2.2
Credit
ed to hedging reserv
es
-
-
-
-
3.0
-
-
-
3
.0
At 25 April 2021
43
.1
2
3.7
-
(0.3)
(7.
0)
(14.
1)
-
(5.6)
39.8
Acquired thr
ough business
combinations (see note 32)
-
8.2
22.6
-
-
(1.1)
(6.8)
3.
2
2
6
.1
Credit
ed/(charged) t
o the
income stat
ement
1
0.1
(12.6)
-
2.5
-
1.5
(0.5)
0.
8
1.8
Charged t
o reserv
es
-
-
-
3.5
-
(1.7)
6.7
-
8.5
Credit
ed to hedging reserv
es
-
-
-
-
(15.8)
-
-
-
(15.8)
At 24 April 2022
53.2
19.3
22.6
5.7
(22.8)
(15.4)
(0.6)
(1.6)
6
0.4
24 April 2022
25 April 2021
(£m)
(£m)
Deferr
ed tax assets
100.8
66.8
Deferr
ed tax liabilities
(40.
4)
(27
.
0)
Net deferr
ed tax balance
60.4
39.
8
The tax r
ates used t
o measure the de
ferr
ed tax assets and liabilities w
as 25% (FY21: 19%), on the basis that this w
as the
tax r
at
e that was subst
antiv
ely enact
ed at the balance sheet dat
e.
Deferr
ed tax assets ar
e recognised t
o the e
xtent that r
ealisation of the r
elat
ed tax benefit is pr
obable on the basis
of the Group
’s current expect
ations of futur
e tax
able pr
ofits. The Group has appr
o
x. £122m of tax
able losses not
recognised as a def
erred t
ax asset (appr
o
x. £30m def
erred t
ax asset).
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
165
29
. PR
O
VISIONS
Legal and
regulat
ory
Property
relat
ed
Financial
services relat
ed
Other
T
otal
(£m)
(£m)
(£m)
(£m)
(£m)
At 26 April 2020
225.4
107
.9
-
2.7
336.0
Amounts pro
vided
7.
3
41.5
-
-
48.8
Amounts utilised / re
versed
(16.
9)
(5.3)
-
(1.4)
(23.6)
At 25 April 2021
215.8
144.
1
-
1.3
36
1.2
Acquired thr
ough business combinations
(see note 32)
7.1
2.7
42
.4
-
52.2
Amounts pro
vided
1
7.
7
53
.7
-
-
71.4
Amounts utilised / re
versed
(10.
4)
(39
.3)
(0.8)
(1.3)
(51.8)
At 24 April 2022
230.2
161.2
41
.6
-
433.0
Legal and regulat
ory pro
visions r
elate t
o management’s
best estimat
e of the potential impact of claims including
legal, commercial
, regulat
ory and ongoing non-UK t
ax
enquiries. The timing of the out
come of non-UK tax
inquiries and legal claims made against the Group is
dependent on fact
ors outside the Group
’s control and
theref
ore the timing of settlement is uncert
ain. Aft
er
taking appr
opriat
e legal advice, the out
comes of these
claims are not e
xpect
ed to giv
e rise t
o material loss
in ex
cess of the amounts pro
vided. Included within
Legal and regulat
ory pro
visions, ar
e amounts relating
to Studio R
etail Limit
ed’s ongoing discussions with
HMRC with r
egard t
o agr
eeing a new Part
ial Ex
emption
Special Method (the means b
y which the reco
v
ery of
input V
A
T on costs r
elating to the compan
y’s financial
services activities is restrict
ed). As at 2
4 April 2022, the
company held a pr
o
vision of £6.
9m which repr
esents
management’s best estimate of the lik
ely incr
ease in
the lev
el of restriction on the reco
v
ery of input V
A
T ov
er
and abo
ve that which has alr
eady been restrict
ed in
the company’s quart
erly V
A
T returns. W
e note that
management’s best estimate is one of a number of
differ
ent outcomes so the amounts pr
o
vided may differ
to the final costs incurr
ed b
y the company in r
espect of
this matter
.
A reimbursement asset of £88.3m (FY
21: £118.3m) has
been recognised separ
atel
y within debtors r
elating t
o
ongoing non-UK tax enquiries
.
Included within property r
elated pr
o
visions are
pro
visions for dilapidations in r
espect of the Group
’s
ret
ail st
ores and w
arehouses
. Further det
ails of
managements estimat
es are included in not
e 2.
Other pro
visions relat
e t
o pro
visions for r
estructuring and
emplo
yment (non-retir
ement relat
ed).
Included abo
ve is a pr
o
vision of £41.6m f
or probable
outflo
ws in respect of the financial services business.
As a regulat
ed business, Studio Ret
ail Limit
ed has an
obligation t
o proactiv
ely r
evie
w its business t
o ensure
that appropriat
e out
comes wer
e deliv
ered t
o cust
omers.
Based on w
ork undertak
en as at the balance sheet dat
e
it is considered lik
ely that some le
v
el of remediation will
be requir
ed to full
y satisfy this obligation.
The pro
vision recognises the inher
ent uncertainties in
any such r
emediation including the number of cust
omers
who might hav
e been impacted, the pr
oportion of those
who w
ere adv
ersely aff
ected b
y the legacy decisions,
the possible remediation pay
able, and o
verlays these
uncertainties with a risk
-based consideration of the
proportion of the population ident
ified abov
e that
suffer
ed adverse out
comes, and the period o
v
er which
such adv
erse outcomes may hav
e been suffer
ed.
Assumptions hav
e been ov
erlaid in respect of the timing
and mechanism for undert
aking any r
emediation.
At this st
age a detailed anal
ysis of the rele
v
ant cust
omer
cohorts has not y
et been completed and as such
there ar
e a range of out
comes which could result in a
settlement which is significantly lo
w
er or higher than the
amount estimat
ed. This variation could be significant
and theref
ore highl
y material f
or a user of these
accounts. This range of out
comes is e
xpected t
o narro
w
as the w
ork to subst
antiat
e each of the uncertaint
ies set
out abo
ve is complet
ed. It is anticipat
ed this w
ork will be
completed within the 12 month f
air v
alue measurement
period in line with IFRS3.
The timing of any pot
ential outflo
ws is also uncert
ain, but
w
e have assumed that these t
ak
e place within tw
o years
.
The recognition of a pr
ovision b
y the Group is not an
admission of liability for the payment of this amount,
but rather t
o comply with the Dir
ectors
’ obligations to
prepar
e financial stat
ements that giv
e a true and fair
view of the perf
ormance and financial position of the
Group in accor
dance with IFRS.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
166
30.
FINANCIAL INSTR
UMENTS
A.
Financial Assets and Liabilities b
y Category and F
air V
alue Hierar
chy
The fair v
alue hierar
chy of financial assets and liabilities, which ar
e principally denominat
ed in St
erling or US Dollars,
w
ere as follo
ws:
Lev
el 1
Lev
el 2
Lev
el 3
Other
T
otal
FINANCIAL ASSETS - 24 April 2022
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
Amortised cost:
T
rade and other r
eceivables*
-
-
-
704.7
704.7
Cash and cash equivalents
-
-
-
336.8
336.8
Amounts ow
ed b
y relat
ed parties
-
-
-
24.
2
24.2
FV
OCI:
Long T
erm Financial Assets (Equity Instruments) - designat
ed
206.6
-
-
-
206.6
Derivativ
e financial assets (FV):
F
oreign forw
ard pur
chase and sales contracts, and int
erest rat
e sw
aps
-
116.5
-
-
116.5
-
116.5
-
-
116.5
FINANCIAL LIABILITIES - 24 April 2022
Amortised cost:
Non-current borro
wings
-
-
-
(827
.9)
(827
.9)
T
rade and other pay
ables**
-
-
-
(721.7)
(721.7)
IFRS 16 Lease liabilities
-
-
-
(620.6)
(620.6)
Derivativ
e financial liabilities (FV):
F
oreign forw
ard and writt
en options purchase and sales contr
acts - Unhedged
-
(31.3)
-
-
(31.3)
Derivativ
e financial liabilities - contracts f
or difference & equity options
-
(
75.9)
-
-
(75.9)
-
(107
.2)
-
-
(107
.2)
*Prepayments of £112.5m are not included as a financial asset
.
**Other tax
es including social security costs of £8.
1m are not included as a financial liability
.
Lev
el 1
Lev
el 2
Lev
el 3
Other
T
otal
FINANCIAL ASSETS - 25 April 2021
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
Amortised cost:
T
rade and other r
eceivables*
-
-
-
43
5
.1
4
35
.1
Cash and cash equivalents
-
-
-
4
5
7.
0
4
5
7.
0
Amounts ow
ed b
y relat
ed parties
-
-
-
2
6.8
26.8
FV
OCI:
Long T
erm Financial Assets (Equity Instruments) - designat
ed
263.3
-
-
-
263.3
Derivativ
e financial assets (FV):
F
oreign forw
ard pur
chase and sales contracts
-
35.3
-
-
35.3
Derivativ
e financial assets - contracts f
or difference & equity options
-
20
.1
-
-
20
.1
-
55
.4
-
-
5
5.4
FINANCIAL LIABILITIES - 25 April 2021
Amortised cost:
Non-current borro
wings
-
-
-
(705.9)
(705.9)
T
rade and other pay
ables**
-
-
-
(620.
1)
(620.
1)
IFRS 16 Lease liabilities
-
-
-
(722.7)
(722.7)
Derivativ
e financial liabilities (FV):
F
oreign forw
ard and writt
en options purchase and sales contr
acts - Unhedged
-
(17.5)
-
-
(17.5)
Derivativ
e financial liabilities - contracts f
or difference & equity options
-
(1.7)
-
-
(1.7)
-
(19.2)
-
-
(19.2)
*Prepayments of £84.
6m are not included as a financial asset.
**Other tax
es including social security costs of £26.2m are not included as a financial liability
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
167
B.
Financial Assets and Liabilities Sensitivities b
y Currency
The Group
’s principal foreign currency e
xposures ar
e t
o US Dollars and Euros. The t
able below illustr
at
es the
hypothetical sensit
ivity of the Group
’s reported pr
ofit and equity to a 5
% increase and decr
ease in the US Dollar /
Sterling and Eur
o / St
erling ex
change rates at the y
ear-end dat
e, assuming all other v
ariables remain unchanged.
The figures hav
e been calculat
ed by comparing the f
air v
alues of outstanding f
oreign curr
ency contracts, assets and
liabilities at the current e
x
change rat
e t
o those if ex
change rates mo
v
ed as illustrat
ed. The income st
atement figur
es
include the profit e
ffect of an
y rele
vant deriv
atives which are not in a designat
ed cash flo
w hedge. The impact on US
Dollar and Euro r
elated hedging instruments is included in equity
.
The analysis has been pr
epared using the follo
wing assumptions:
1.
Existing assets and liabilities are held as at the period end; and
2.
No additional hedge contr
acts are t
aken out
.
SENSITIVITY
USD
EUR
GBP & Other
USD
EUR
T
otal
-5%
+5%
-5%
+5%
FY22:
T
rade and Other R
eceivables
648.6
24.
5
31.6
704.7
(1.2)
1.2
(1.6)
1.6
Cash and cash equivalents
243.
2
19
.2
7
4.4
336.8
(1.0)
1.0
(3.7)
3.7
T
rade and Other P
ayables
(6
14.0)
(15.0)
(92.7)
(721.7)
0.
8
(0.8)
4.6
(4.
6)
FY21:
T
rade and Other R
eceivables
3
70.1
25.2
39.
8
43
5
.1
(1.3)
1.3
(2.0)
2.0
Cash and cash equivalents
353.4
4
9.4
54.
2
4
5
7.
0
(2.5)
2.5
(2.7)
2.7
T
rade and Other P
ayables
(489.
0)
(24.5)
(106.
6)
(620.
1)
1.2
(1.2)
5.3
(5.3)
There is no differ
ence betw
een fair v
alue and carrying v
alue of the abov
e financial instruments (FY21: £nil).
F
air V
alue Hier
arch
y
The Group uses the follo
wing hier
arch
y for det
ermining
and disclosing the fair v
alue of financial instruments b
y
v
aluation technique
:
•
Lev
el 1: quoted (unadjusted) prices in activ
e markets
for identical assets or liabilities;
•
Lev
el 2: other techniques for which all inputs which
hav
e a significant effect on the r
ecorded fair v
alue
are observ
able, either dir
ectly or indir
ectly; and
•
Lev
el 3: techniques which use inputs which hav
e a
significant effect on the r
ecorded f
air value that ar
e
not based on observ
able market dat
a.
Contracts f
or difference ar
e classified as Le
vel 2 as the
fair v
alue is calculat
ed using quoted prices f
or listed
shares and commodities at contr
act inception and the
period end.
F
oreign f
orw
ard purchase and s
ales contracts and
options are classified as Le
v
el 2, the Group ent
ers int
o
these deriv
ative financial instruments with v
arious
counterpart
ies, principally financial institutions with
inv
estment grade cr
edit ratings
. F
oreign e
x
change
forw
ar
d contracts and options ar
e valued using
v
aluation techniques, which emplo
y the use of market
observ
able inputs. The most frequently applied
v
aluation techniques include f
orw
ard pricing and sw
ap
models using present v
alue calculations.
The models incorporat
e various inputs including the
credit quality of count
erparties, for
eign e
x
change spot
and forw
ar
d rat
es, and yield curves o
f the respectiv
e
currencies.
Long-t
erm financial assets such as equity instruments
are classified as Le
v
el 1 as the fair v
alue is calculat
ed
using quoted prices
.
The fair v
alue of equity deriv
ative agr
eements are
included within the deriv
ative financial assets balance
of £nil (FY21: £20
.
1m) and deriv
ativ
e financial liabilities
balance of £75.
9m (FY
21: £1.7
m). The derivat
ive financial
assets and deriv
ative financial liabilit
ies as at 24 April
2022 relat
e t
o strat
egic inv
estments held of betw
een
0.8
% and 22.4
% of in
vest
ee shar
e capital
.
Sold options are classified as Le
v
el 2 as the fair v
alue
is calculated using other t
echniques, wher
e inputs are
observ
able.
T
rade receiv
ables / pay
ables, amounts o
wed fr
om
relat
ed parties, other receiv
ables / payables, cash and
cash equiv
alents, current / non-curr
ent borro
wings, and
lease liabilities are held at amortised cost
.
The maximum exposur
e to cr
edit risk as at 24 April 2022
and at 25 April 2021 is the carrying v
alue of each class
of asset in the Balance Sheet, ex
cept for amounts ow
ed
from r
elated parties which is the gr
oss carrying amount
of £62.6m (FY
21: £65.2m).
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
168
C.
Deriv
ativ
es: F
oreign Currency F
orwar
d Contracts
(c)(i) Hedging
The most significant exposur
e to f
oreign e
x
change
fluctuations relat
es t
o purchases made in f
oreign
currencies, principall
y the US Dollar and online sales in
Euros. The Gr
oup
’s policy is t
o reduce subst
antially the
risk associated with f
oreign curr
ency spot rat
es b
y using
forw
ar
d fix
ed rat
e currency pur
chase contracts, t
aking
into account an
y for
eign currency cash flo
ws. The Gr
oup
does not hold or issue deriv
ative financial instruments
for tr
ading purposes, how
e
v
er if derivat
ives, including
both forw
ar
ds and written options, do not qualify for
hedge accounting the
y are account
ed for as such and
accordingly an
y gain or loss is r
ecognised immediatel
y
in the income stat
ement. Management ar
e of the vie
w
that there is a subst
antiv
e distinct business purpose for
entering int
o the options and a str
ategy f
or managing
the options independently of the f
orwar
d contracts
. The
forw
ar
d and options contracts ar
e theref
ore not vie
w
ed
as one contract and hedge accounting f
or the forw
ards
is permitted.
Hedge effectiv
eness is determined at inception of
the hedge relationship and at e
v
ery reporting period
end through the assessment of the hedged it
ems and
hedging instrument to det
ermine whether ther
e is still an
economic relationship betw
een the tw
o
.
The critical terms of the f
oreign curr
ency forw
ards
enter
ed int
o ex
actly mat
ch the t
erms of the hedged
item. As such the economic r
elationship and hedge
effectiv
eness are based on the qualitativ
e fact
ors and
the use of a hypothet
ical derivativ
e where appropriat
e.
Hedge ineffectiv
eness may arise where the critical terms
of the for
ecast transact
ion no longer meet those of the
hedging instrument, for e
x
ample, if there w
as a change
in the timing of the for
ecast sales tr
ansactions from
what w
as initially estimat
ed or if the v
olume of currency
in the hedged item w
as below e
xpectations leading
to o
ver-hedging. Diff
erences can arise when the initial
v
alue on the Hedging instrument is not zer
o.
The hedged items and the hedging instrument ar
e
denominated in the s
ame currency and as a r
esult the
hedging ratio is alw
ays one to one
.
All deriv
ative financial instruments used f
or hedge
accounting are r
ecognised initially at f
air value and
report
ed subsequently at f
air value in the st
at
ement
of financial position. T
o the ext
ent that the hedge
is effectiv
e, changes in the fair v
alue of deriv
atives
designated as hedging instruments in cash flo
w
hedges are r
ecognised in other comprehensiv
e income
and included within the cash flo
w hedge reserv
e in
equity
. An
y ineffectiv
eness in the hedge relat
ionship is
recognised immediat
ely in pr
ofit or loss.
At the time the hedged it
em affects pr
ofit or loss,
any gain or loss pr
eviousl
y recognised in other
comprehensiv
e income is r
eclassified from equity
to pr
ofit or loss and present
ed as a r
eclassification
adjustment within other comprehensiv
e income
. If a
for
ecast transaction is no longer e
xpect
ed to occur
, any
relat
ed gain or loss recognised in other compr
ehensiv
e
income is transf
erred immediat
ely t
o profit or loss. If the
hedging relationship ceases t
o meet the eff
ectiv
eness
conditions then hedge accounting is discontinued and
the relat
ed gain or loss is held in the equity reserv
e until
the for
ecast transaction occurs
.
The fair v
alue of hedged contracts as at
2
4 April 2022 was:
24 April 2022
25 April 2021
(£m)
(£m)
Assets
US Dollar purchases - GBP
32.9
2.4
US Dollar purchases - EUR
54.2
2.3
Euro sales
12.8
3
0.6
T
otal
99.9
35.3
Liabilities
US Dollar purchases - GBP
-
7.
3
US Dollar purchases - EUR
-
0.1
T
otal
-
7.4
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
169
The details of hedged f
orw
ard for
eign currency pur
chase contracts and contr
acted f
orw
ard r
ates w
er
e as follo
ws:
24 April 2022
25 April 2021
(£’m)
(£’m)
Currency
GBP
Currency
GBP
US Dollar purchases
48
0.0
340.4
72
0.0
523.
1
Contract
ed rat
es USD / GBP
1.41
1.36 - 1.41
W
eight
ed aver
age contracted r
ates USD / GBP
1.41
1.38
US Dollar purchases
12
0.0
78.6
120.0
8
3.9
Contract
ed rat
es USD / EUR
1.26-
1.31
1.21 - 1.31
W
eight
ed aver
age contracted r
ates USD / EUR
1.28
1.26
Euro sales
(600.
0)
(57
4.5)
(240.0)
(242.4)
Contract
ed rat
es EUR / GBP
0.
99-
1.08
0.9
9
W
eight
ed aver
age contracted r
ates EUR / GBP
1.04
0.9
9
The timing of the contracts is as f
ollows:
Currency
Hedging against
Currency value
Timing
Rates
USD
/
GBP
USD invent
ory purchases
USD 480m
FY23
1.41
USD
/EUR
USD in
vent
ory purchases
USD 120m
FY23 - FY2
4
1.26-
1.31
EUR/
GBP
Euro s
ales
EUR 600m
FY23, FY2
5
0.99-
1.08
The foreign curr
ency forw
ar
ds and options are denominat
ed in the same curr
ency as the highly probabl
y future
inv
ent
ory purchases and s
ales so the hedged ratio is 1:1. Hedge ineff
ectiv
eness may arise where the critical t
erms of
the for
ecast transaction no longer meet those o
f the hedging instrument, for e
xample if ther
e w
as a change in the
timing of the for
ecast sales tr
ansactions from what w
as initially estimated or if the v
olume of curr
ency in the hedged
item w
as below e
xpectations leading t
o o
v
er-hedging.
24 April 2022
25 April 2021
(£m)
(£m)
Change in discounted spot v
alue of outstanding hedging instruments since inception o
f the hedge
(77
.5)
(14.5)
Change in value of hedged it
em used to det
ermine hedge ineffectiv
eness
(104.
9)
(28.
1)
24 April 2022
25 April 2021
(£’m)
(£’m)
Change in the
fair v
alue of the
currency forw
ard
Change in the
fair v
alue of the
hedged item
Change in the
fair v
alue of the
currency forw
ard
Change in the
fair v
alue of the
hedged item
US Dollars purchases - GBP
30.5
30.5
(4.8)
(4.8)
US Dollars purchases - EUR
9.7
9.7
2.1
2
.1
Euro sales
11.9
11.
9
3
.1
3.1
At 2
4 April 2022 £57
4.5m of forw
ard sales contracts (FY
21: £242.
4m) and £4
19.
0m of pur
chase contracts (FY21: £60
7
.0m)
qualified for hedge accounting and the gain on f
air valuation o
f these contracts of £52.
1m (FY21: £0
.
4m) has theref
ore
been recognised in other compr
ehensiv
e income.
At 2
4 April 2022, £38.6m hedged pur
chase contracts had a maturity of gr
eater than 12 months (FY
21: £210.5m of pur
chase
contracts) and £332.
1m of hedged sales had a maturity of great
er than 12 months (FY21: £2
42.4m of s
ales contracts).
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
170
The mov
ements thr
ough the Hedging reserv
e are
:
USD
/
GBP
EUR/
GBP
USD/EUR
T
otal
hedge mov
ement
Def
erred t
ax
T
otal
hedging reserv
e
(£m)
(£m)
(£m)
(£m)
(£m)
(£m)
As at 26 April 2020
-
1
6.6
17
.2
33.8
(5.8)
28.0
Recognised
(4.
9)
3.2
2
.1
0.4
-
0.4
Reclassified in sales
-
(2.8)
-
(2.8)
-
(2.8)
Reclassified in inv
entory /
cost of sales
-
-
(17.
1)
(17
.
1)
-
(17
.
1)
Deferr
ed T
ax
-
-
-
-
3
.0
3.0
As at 25 April 2021
(4.9)
1
7.
0
2.2
14.3
(2.8)
11.5
Recognised
30.5
11.
9
9.7
52.
1
-
52.1
Reclassified in inv
entory /
cost of sales
7.
4
-
0
.1
7.
5
-
7.
5
Deferr
ed T
ax
-
-
-
-
(15.8)
(15.8)
As at 24 April 2022
33.0
28.9
12.0
73
.9
(18.6)
55.3
(c)(ii) Unhedged
The sterling principal amounts of unhedged f
orw
ard contracts and writt
en currency opt
ion contracts and contract
ed
rat
es w
ere as f
ollow
s:
24 April 2022
25 April 2021
(£m)
(£m)
US Dollar purchases
78.6
40.3
Contract
ed rat
es USD / EUR
1.26-
1.31
1.31
- Euro sales
(715.
9)
(383.8)
Contract
ed rat
es EUR / GBP
0.
99-
1.08
0.9
9
Included within finance costs, classified within fair v
alue adjustment t
o derivativ
es, is a loss on fair value of unhedged
forw
ar
d contracts, written curr
ency option contracts and s
w
aps of £28.
9m (FY21: loss of £4
.6m).
At 2
4 April 2022, £78.6m o
f unhedged purchase
contracts had a maturity at inception of gr
eat
er than 12
months (FY21: £nil pur
chase contracts) and £715.
9m of
unhedged sales had a maturity at inception of gr
eater
than 12 months (FY21: £335.
4m of sales contr
acts).
These contracts form part of the T
reasury management
activities, which incorporat
es the risk management
strat
egy for ar
eas that are not r
eliable enough in timing
and amount to qualify f
or hedge accounting. This
includes acquisitions, disposals of o
v
erseas subsidiaries,
relat
ed w
orking capital r
equirements, dividends and loan
repayments fr
om ov
erseas subsidiaries and purchase
and sale of o
v
erseas property
. Writt
en options carry
additional risk as the ex
ercise of the option lies with the
purchaser
. The options inv
olve the Group r
eceiving a
premium on inception in e
x
change for accepting that
risk and the outcome is that the bank may r
equire the
Group t
o sell Euros
. How
e
v
er
, the Group is satisfied that
the use of options as a T
reasury management t
ool
is appropriat
e.
FY22 v
alue e
x
cludes short term s
w
aps of USD
/
GBP of
USD 40.
0m and EUR/USD of EUR 40
.0m which w
ere
requir
ed for cash management purposes only
. In FY21
there ar
e nil short term s
w
aps at period end.
D.
Interest rat
e sw
aps
The Group uses int
erest r
ate s
w
aps to manage its
exposur
e t
o inter
est rat
e mo
vements on its bank
borro
wings. The Group has tw
o contracts in place that
fix inter
est payments on v
ariable rat
e debt. The first
contract co
v
ers a notional amount of £250
.0m and fix
es
the inter
est rat
e at 0
.985
% per annum until 29 May
2026. The second contract co
vers a notional amount of
£100.
0m and fix
es the int
erest r
ate at 0
.4
5% per annum
until 2 Sept
ember 2024
. The fair v
alue of these inter
est
rat
e sw
aps is an asset of £16.6m (2021: liability of £7
.4m).
The fair v
alue gain has been recognised in finance
income classified as fair v
alue adjustment t
o derivativ
es.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
171
E.
Sensitivity Analy
sis
The Group
’s principal foreign currency e
xposures ar
e t
o US Dollars and Euros. The t
able below illustr
at
es the
hypothetical sensit
ivity of the Group
’s reported pr
ofit and equity to a 10% incr
ease and decrease in the US Dollar /
Sterling and Eur
o / St
erling ex
change rates at the y
ear-end dat
e, assuming all other v
ariables remain unchanged. The
figures hav
e been calculat
ed b
y comparing the fair v
alues of outst
anding foreign curr
ency contracts at the curr
ent
ex
change rate t
o those if e
x
change rat
es mo
ved as illustr
at
ed. The income stat
ement figures include the pr
ofit effect
of any r
ele
vant deriv
ativ
es which ar
e not in a designated cash flo
w hedge
. The impact on US Dollar and Euro relat
ed
hedging instruments is included in equity
.
Positiv
e figures r
epresent an incr
ease in profit or equity:
Income stat
ement
Equity
24 April 2022
25 April 2021
24 April 2022
25 April 2021
(£’m)
(£’m)
(£’m)
(£’m)
Sterling str
engthens by 10%
US Dollar
(2.9)
8
.1
(22.6)
(17
.4)
Euro
(39
.4)
23.4
1
0.0
1
0.9
Sterling w
eakens b
y 10%
US Dollar
3.5
(9.9)
2
7.6
21.3
Euro
4
8.1
(90.8)
(12.3)
(13.4)
Int
erest R
ate Sensit
ivity Analysis
The follo
wing table illustr
ates the sensit
ivity of the Group
’s reported pr
ofit and equity to a 0
.5% incr
ease or decrease in
inter
est rat
es, assuming all other v
ariables w
ere unchanged.
The analysis has been pr
epared using the follo
wing assumptions:
•
F
or floating rat
e assets and liabilities, the amount of asset or liability outst
anding at the balance sheet date is
assumed to hav
e been outstanding for the whole y
ear
.
•
Fix
ed rate financial instruments that ar
e carried at amortised cost are not subject t
o int
erest r
ate risk f
or the
purpose of this analysis
.
Positiv
e figures r
epresent an incr
ease in profit or equity:
Income stat
ement
Equity
24 April 2022
25 April 2021
24 April 2022
25 April 2021
(£’m)
(£’m)
(£’m)
(£’m)
Inter
est rate incr
ease of 0.5%
(2.6)
(3.0)
(2.6)
(3.0)
Inter
est rate decr
ease of 0.5%
2.6
3.0
2.6
3.0
Long t
erm Inv
estments Sensitivity Analy
sis
The follo
wing table illustr
ates the sensit
ivity of price risk in relation t
o long t
erm inv
estments held b
y the Group
:
24 April 2022
Equity
(£'m)
Share price increase o
f 10%
20.2
Share price decrease o
f 10%
(20.2)
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
172
F.
Liquidity Risk
The table belo
w sho
ws the maturity analy
sis of the undiscounted r
emaining contractual cash flo
ws of the Gr
oup
’s non
deriv
ative liabilit
ies and foreign curr
ency deriv
ativ
e financial instruments:
Less than 1 year
1 to 2 years
2 to 5 y
ears
Over 5 y
ears
T
otal
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
2022
Non derivativ
e financial liabilities:
Bank loans and ov
erdr
afts
-
-
827.
9
-
827.
9
Bank loans and ov
erdr
afts inter
est
26.5
27
.3
28.2
-
82.0
T
rade and other pay
ables
721.7
-
-
-
721.7
IFRS 16 Lease liabilities
131.5
93.6
182.4
426.4
833.9
Derivativ
e financial instruments:
Cash inflow
s
(1,008.
7)
(38.5)
(711.5)
-
(1,758.
7)
Cash outflows
1,079
.7
45.1
702
.4
-
1,827
.2
950.7
127.5
1,029.4
426.4
2,534.0
2021
Non derivativ
e financial liabilities:
Bank loans and ov
erdr
afts
-
705.9
-
-
7
05.9
Bank loans and ov
erdr
afts inter
est
-
9.9
-
-
9.9
T
rade and other pay
ables
62
0
.1
-
-
-
6
20
.1
IFRS 16 Lease liabilities
196.6
112.7
196.8
67
0.9
1,
177.
0
Derivativ
e financial instruments:
Cash inflow
s
(396.5)
(766.
9)
(80.
6)
-
(1,244.0)
Cash outflows
389.
1
798.9
81.5
-
1,269
.5
809.3
860.5
197.
7
67
0.9
2,538.4
Capit
al Management
The capital structur
e of the Group consists of equity
attributable t
o the equity holders of the parent
company
, comprising issued shar
e capital (less
treasury shar
es), share pr
emium, ret
ained earnings
and cash and borro
wings.
It is the Group
’s policy to maint
ain a strong capit
al
base so as to maint
ain in
vest
or
, credit
or and mark
et
confidence and t
o sustain the de
v
elopment of
the business.
In respect of equity
, the Board has decided that, in or
der
to maximise fle
xibility in the near t
erm with regar
ds to a
number of inorganic gr
o
wth opportunities under re
view
,
not to r
eturn an
y cash by w
ay of a final dividend at
this time.
The Board is committ
ed to k
eeping this policy under
re
vie
w and to looking t
o e
valuat
e methods of r
eturning
cash to shar
eholders when appropriat
e
.
The objective o
f the Share Scheme is t
o encourage
emplo
yee shar
e o
wnership and to link emplo
yee
’s
remuner
ation to the perf
ormance of the Compan
y
. It is
not designed as a means of managing capital
.
In respect of cash and borr
o
wings, the Board regularl
y
monitors the r
atio of net debt t
o Report
ed EBITD
A
(Pre-IFRS 16), the w
orking capit
al requir
ements and
for
ecasted cash flo
ws, ho
w
ev
er no minimum or
maximum ratios ar
e set outside of maintaining a r
atio
of net debt to R
eported EBITD
A (pre IFRS 16) belo
w 3.0
.
The ratio for net debt t
o Report
ed EBITD
A (pr
e IFRS 16) is
0.
6 (FY21: 0
.5). The objective is t
o k
eep this figure belo
w
3.
0 (FY21: 3.
0).
Based on this analysis, the Boar
d det
ermines the
appropriat
e return t
o equity holders whilst ensuring
sufficient capital is r
et
ained within the Group t
o meet
its strat
egic objectiv
es, including but not limited t
o
,
acquisition opportunities.
These capital management policies hav
e r
emained
unchanged from the prior period.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
173
31.
TRADE AND O
THER P
A
Y
ABLES
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£m)
(£m)
T
rade pay
ables
358.
1
279
.3
Amounts ow
ed to r
elated undert
akings
0.1
2.6
Other tax
es including social security costs
8.1
26.2
Other payables
102.0
9
3.0
Accruals
26
1.5
245.2
729.8
646.3
Included within other payables ar
e amounts outst
anding in respect of gift car
ds and v
ouchers of £42.6m (FY21: £28
.8m).
The Direct
ors consider that the carrying amount of trade and other pay
ables appro
ximates t
o their fair v
alue.
32. A
CQUISITIONS
i.
On 24 F
ebruary 2022, the Group acquired 100% of the shar
e capital and v
oting rights of Studio Retail Limit
ed
(SRL) and certain other assets of Studio R
etail Gr
oup plc (in administration
) (SRG) f
or cash consideration of £28.3m
which is deemed to be the f
air v
alue of the consideration. SRL is a digit
al v
alue ret
ailer with a broad pr
oduct
offering and the ability t
o pro
vide cust
omers a range of payment options including a fle
xible credit f
acility
. The
acquisition will help t
o accelerat
e the Group
’s ambition to ele
vat
e its cust
omer journey including a fle
xible
repayment pr
oposition. As part of the trans
action, SRG assigned its liabilit
ies held to its lending banks under its
re
v
olving credit facilities t
o SRL. A debt transf
er took place which tr
ansferr
ed this re
v
olving credit facility debt fr
om
the lending banks to F
rasers Gr
oup Plc which became the ne
w lender
. The fair value adjustment t
o int
angible
assets and inv
ent
ory relat
es t
o management’s assessment of the price that would be paid f
or the acquired assets
in an orderly tr
ansaction betw
een market participants at the acquisition dat
e, as w
ell as the recognition o
f a
customer r
elat
ed intangible
. The fair v
alue adjustment to pr
operty
, plant and equipment relat
es to management’s
assessment of the fair v
alue of the buildings acquir
ed as part of the acquisition and which are r
ecognised on the
balance sheet of the Fr
asers Group Plc compan
y
. The fair v
alue adjustment relat
ing to borr
owings r
elat
es to the
acquisition b
y Fr
asers Group Plc of the liabilities held betw
een SRG and the lending banks under its re
v
olving
credit f
acilities which SRG assigned t
o SRL. Acquisit
ion relat
ed costs of £0.
4m are included in administr
ativ
e
expenses in the Consolidat
ed Income St
atement and in cash flo
ws from operating activities in the C
onsolidated
Cash Flo
w Stat
ement. The Group continues t
o hold a 28.
9% int
erest in SR
G at the period end, ho
w
ev
er giv
en the
administration of SR
G and the sale of its main tr
ading subsidiary SRL, the int
erest has been fair v
alued to £nil with
the loss recognised thr
ough other comprehensiv
e income (see not
e 21).
ii.
During the period the Group acquir
ed the entire shar
e capital of Bob W
oolmer Sales Limited for consider
ation of
£2.5m.
The follo
wing table summarises the f
air values o
f consideration paid:
Studio Ret
ail
Limited
Other
(£m)
(£m)
Cash consideration
28.3
2.5
28.3
2.5
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
1
74
The asset and liability values at acquisition ar
e det
ailed below
. W
e hav
e re
vie
wed the f
air v
alue of the assets and
liabilities acquired which ar
e deemed to be pr
o
visional giv
en the judgemental natur
e of some of the balances.
Studio Ret
ail Limited
Other
Book V
alue
Fair V
alue
Adjustment
Fair V
alue
Book V
alue
Fair V
alue
Adjustment
Fair V
alue
(£m)
(£m)
(£m)
(£m)
(£m)
(£m)
Property
, plant
and equipment
12.5
7.
0
19.5
-
-
-
Intangible assets
12.6
(6.9)
5.7
-
-
-
Inv
entories
56.4
7.6
6
4.0
0.4
-
0.4
Cash and cash equivalents
29.8
-
29.8
0.
8
-
0.8
Retirement bene
fit
obligations
27
.3
-
27
.3
-
-
-
Credit cust
omer
receiv
ables
383.0
-
383.0
-
-
-
Allow
ance for e
xpected
credit losses
(129.
0)
-
(129
.0)
-
-
-
Deferr
ed tax balances
27
.2
(1.1)
26
.1
-
-
-
Borro
wings
(253.3)
21.3
(232.0)
-
-
-
Other working capit
al
(90.
9)
(90.
9)
-
-
-
Lease liability
(18.2)
-
(18.2)
-
-
-
Pro
visions
(52.2)
-
(52.2)
-
-
-
Goodwill
-
-
-
-
1.3
1.3
Bargain purchase
-
(4
.8)
(4.8)
-
-
-
Net assets acquired
5.2
2
3.1
28.3
1.2
1.3
2.5
The bargain purchase o
f £4.8m fr
om the Studio Retail Limit
ed acquisition is as a r
esult of the administration of
SRG
, and the amount has been recognised within cost of sales within the period. The Goodwill arising on the other
acquisitions of £1.3m has been impaired t
o £nil as at period end with the impairment being r
ecognised in Ex
ceptional
Items, see not
e 6. Due t
o the natur
e of the credit facility off
ered b
y SRL t
o cust
omers being a rolling facility
, wher
e new
purchases ar
e added to the account as the
y ar
e incurred and payments being allocat
ed against the tot
al cust
omer
balance as receiv
ed, the cr
edit customer r
eceivable and the IFRS 9 allo
wance for e
xpect
ed credit losses hav
e been
recognised gr
oss at the acquisition date
. The period end analysis of this r
eceiv
able balance and the IFRS 9 allo
wance
for e
xpected cr
edit losses can be found at not
e 23. Sensitivities with r
egards t
o the acquired pr
o
visions can be found
in note 29
.
Since the date o
f control, the f
ollowing amounts hav
e been included within the Group
’s Financial St
at
ements for
the period:
Studio Ret
ail
Limited
Other
T
otal
(£m)
(£m)
(£m)
(£m)
Rev
enue
58.3
0.8
59
.1
Operating loss
(6.6)
(0.1)
(6.7)
Loss befor
e tax
(7
.2)
(0.
1)
(7
.3)
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
175
Had the acquisitions been included from the st
art of the period the follo
wing amounts w
ould hav
e been included
within the Group
’s Financial Stat
ements for the period:
Studio Ret
ail
Limited
Other
T
otal
(£m)
(£m)
(£m)
(£m)
Rev
enue
491.4
3.0
494.4
Operating (loss)/
profit
(108.
9)
0.
2
(108.7)
(Loss)/
profit be
fore t
ax
(115.4)
0.
2
(115.2)
There w
ere no contingent liabilit
ies acquired as a result o
f the abov
e tr
ansactions.
Reconciliation of net cash outflo
w from in
v
esting activities:
Studio Ret
ail
Limited
Other
T
otal
(£m)
(£m)
(£m)
(£m)
Cash consideration
(28.3)
(2.5)
(30.8)
F
air value of cash and cash equiv
alent acquired
29.8
0.
8
3
0.6
Purchase of subsidiaries, net of cash acquired
1.5
(1.7)
(0.2)
During the prior period ended 25 April 2021 the Group acquir
ed the trade and assets of D
W Sports for cash
consideration of £37
.0m which result
ed in Goodwill being recognised of £3
.7
m.
33.
CASH INFLO
W FR
OM OPERA
TING A
CTIVITIES
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
(£m)
(£m)
Profit bef
ore tax
ation
335.6
8.5
Net finance cost
18
.9
27.2
Net inv
estment income
(24
.1)
(96.0)
Operating profit/(loss)
330.4
(60.3)
Depreciation of pr
operty, plant and equipment
246.
6
298.5
Depreciation on in
vestment propert
ies
5.9
1
.9
Gain on disposal and modification/
remeasurement of lease liabilities
(28.3)
(27
.7)
Amortisation of int
angible assets
7.
5
7.
1
Impairment of tangible and int
angible assets and inv
estment properties
232.7
3
26
.1
Profit on disposal of pr
operty, plant and equipment
(10.8)
(9.7)
Profit on disposal of int
angibles
-
(7
.5)
Gain on bargain purchase
(4.8)
(3.1)
Share based payment charge in equity (
ex
cluding def
erred tax)
9.2
-
Pension contributions less income stat
ement charge
(1.6)
-
Operating cash inflo
w before changes in w
orking capit
al
786.8
525.3
Increase in receiv
ables
(33.3)
(136.6)
(Increase) / decrease in in
vent
ories
(155.0)
99.3
Increase in pay
ables
7.
5
6
4.9
Increase in pro
visions
22.9
25.4
Cash inflow
s from operating activities
628.
9
578.3
34.
CAPIT
AL COMMITMENTS
The Group had capit
al commitments of £145.
0m as at 2
4 April 2022 (25 April 2021: £87
.
1m) relating t
o w
arehouse
automat
ion, aircraf
t, other plant and machinery, and pr
operty purchases.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
1
76
35.
RELA
TED P
ART
Y TRANSA
CTIONS
The Group has t
aken adv
ant
age of the e
x
emptions contained within IAS 2
4 - “Relat
ed Party Disclosur
es” from the
requir
ement to disclose tr
ansactions betw
een Gr
oup companies as these have been eliminat
ed on consolidation.
The Group ent
ered int
o the follo
wing mat
erial transact
ions with relat
ed parties:
52 w
eeks ended 24 April 2022:
Relationship
Sales
Purchases
T
rade
and other
receiv
ables
T
rade
and other
payables
(£’m)
(£’m)
(£’m)
(£’m)
Related P
arty
F
our (Holdings) Limited & subsidiaries
(1)
Associate
2
.6
63.7
24.0
-
Mash Holdings Limited
Parent compan
y
-
-
0.2
-
Mike Ashle
y
(2)
Plc Direct
or
1.5
-
-
-
N M Design London Limited
Connected
persons
-
0.2
-
-
Rangers Ret
ail Limited
Associate
-
-
-
0.1
MM Prop Consult
ancy Limited & M.P
.M Elev
ation Limit
ed
Connected
persons
-
21.0
-
-
52 w
eeks ended 25 April 2021:
Relationship
Sales
Purchases
T
rade
and other
receiv
ables
T
rade
and other
payables
(£’m)
(£’m)
(£’m)
(£’m)
Related P
arty
F
our (Holdings) Limited & subsidiaries
(1)
Associate
2.2
4
1
.1
26.5
0.1
Mash Holdings Limited
Parent compan
y
-
-
0.2
-
Mike Ashle
y
(2)
Plc Direct
or
1.3
-
-
-
N M Design London Limited
Connected
persons
-
0
.1
-
-
MM Prop Consult
ancy Limited
Connected
persons
-
2.5
-
2.5
New
castle United F
ootball Club Limited
& St James Holdings Limited
(3)
Connected
persons
0.2
(1.9)
0.1
-
Rangers Ret
ail Limited
Associate
-
-
-
0.1
(1)
The outstanding balance with F
our (Holdings) Limited reflects the funding r
elated t
o Agent Prov
ocateur
. Management consider that the underlying results of
Four (Holdings) Limit
ed supports the reco
verability of the r
eceivables balance. The r
esults of Four (Holdings) Limit
ed are not material on the basis of net
assets and profit befor
e tax, subsequently det
ailed disclosures have not been pr
esented under IFRS 12.
(2)
Use of the Company jet and helicopt
er are charged at commercial r
ates.
(3)
The sales relate to in
vent
ory and purchases include the re
versal of the FY
20 advertising charge
.
An agreement has been ent
ered int
o with Double T
ake Limit
ed, a compan
y o
wned by Mash Holdings Limit
ed in which
Matilda Ashle
y, M
ike Ashle
y’s daught
er
, is a direct
or
. Under the agreement, Double T
ake Limit
ed licenses the Gr
oup the
ex
clusive rights t
o the cosmetic brand SPOR
T FX. During the period a re
vie
w has been undertak
en and no r
oy
alties or
other fees ar
e expect
ed t
o be payable t
o Double T
ake Limit
ed for these rights until at least Sept
ember 2023
, the fee
arrangement will continue t
o be re
vie
w
ed on an ongoing basis, no pro
vision is requir
ed in the financial stat
ements. It
should be noted that the Gr
oup (rather than Double T
ake Limited) o
wns the rights to SPORT FX f
or clothing, footw
ear
and sports equipment.
N M Design London Limited is a compan
y in which Nicola Murr
ay
, Michael Murray’s mother
, is a dir
ector
, who
performs design w
ork for the Gr
oup in relation t
o some of the Gr
oup
’s sites
.
A pro
vision w
as made in FY20 f
or £2.0m pay
able t
o New
castle Unit
ed F
ootball Club, this w
as rev
ersed in FY21.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
177
The trade and other receiv
ables balance with Four (Holdings) Limit
ed includes an unsecured loan balance of £6
0.
0m
(gr
oss of amounts recognised in r
espect of loss allo
wance) which attr
acts inter
est at a rat
e of 3% within curr
ent assets
(FY21: £60
.0m
). This has been accounted for at amortised cost in accor
dance with IFRS 9
. The carrying value has been
determined b
y assessing the recov
erability of the receiv
able balance, discount
ed at an appropriat
e mark
et rat
e of
inter
est. £nil w
as r
ecognised in the period in respect of doubtful debts (FY21: £4
.7
m). F
urther disclosur
e can be found in
note 23
.
The sales amount in relation t
o F
our (Holdings) Limit
ed relat
es t
o the inter
est charge on the loan and the pur
chases
relat
e t
o the purchase of clothing pr
oducts.
At the period end the Gr
oup does not have significant influence o
v
er but holds great
er than 20% of the v
oting rights of
Mulberry Group plc. The lat
est equity amounts and results ar
e shown belo
w:
Mulberry Group plc
Period ended
2 April 2022
(£m)
Share capit
al
3.0
Share premium
12.2
Retained earnings
2
7.
0
T
otal equity
42.2
Profit for the period
19.2
The Group does not consider it has the po
w
er to participat
e in the financial and oper
ating policy decisions of Mulberry
Group Plc and so management do not consider the Gr
oup to be able t
o e
x
ert significant influence as per IAS 28
Inv
estments in Associat
es and Joint V
entures and IAS 2
4 Relat
ed Party Disclosures
.
Ke
y Management, Ex
ecutiv
e And Non-Ex
ecutiv
e Direct
or Compensation
24 April 2022
25 April 2021
(£m)
(£m)
Salaries and short-
term benefits
1.4
1.3
F
air value charge f
or Ex
ecutive Shar
e Scheme (see note 25)
0.8
-
T
otal
2.2
1.3
Ke
y management personnel ar
e considered t
o be the Direct
ors and members of management who play a k
ey
part in the long term str
at
egy and operations of the Gr
oup. Det
ailed remuner
ation disclosures ar
e pro
vided in
the Direct
ors’ R
emuneration Report in this annual r
eport including Direct
ors’ shar
eholdings and share int
erests
.
MM Prop Consult
ancy Limit
ed, a company o
wned and
controlled b
y Michael Murr
ay
, who is a member of ke
y
management personnel as per IAS 24
, continued t
o
pro
vide property consult
ancy services t
o the Group
during FY22. During FY22 MM Pr
op Consult
ancy Limited
w
as primarily t
asked with finding and negotiat
ing the
acquisition of ne
w sites in the UK, Eur
ope and Rest of
the W
orld for both our larger f
ormat stor
es and our
combined ret
ail and gym units but it also pro
vides
advice to the C
ompany’s in-house pr
operty team in
relation t
o e
xisting sites in the UK, Eur
ope and Rest of
the W
orld.
In the y
ear all properties hav
e been assessed
that are consider
ed to hav
e created v
alue across
all the outstanding fr
eehold and long leasehold
properties o
v
er the applicable period from the MM
Property Consult
ancy agreement commencement
to 29 Sept
ember 2021, the
y hav
e been v
alued by an
independent v
aluer who confirms the value cr
eat
ed by
MM Prop Consult
ancy Limit
ed. The Group
’s independent
Non-Ex
ecutiv
e Direct
ors then re
vie
w and agree the v
alue
creat
ed and hav
e full discretion t
o appro
ve a payment
to MM Pr
op Consult
ancy Limited of up t
o 25% of the
v
alue creat
ed.
On 1 May 2022 Michael Murr
ay w
as appointed as CE
O
,
prior to his appointment MM Pr
op Consult
ancy Limited
and the Group finalised the t
erms on which an
y rele
vant
prior consultancy services agr
eements t
erminated.
The Board has no
w completed its assessment o
f the
unsettled value cr
eat
ed by MM Pr
op Consult
ancy
Limited t
o the Gr
oup, with the assist
ance of independent
third party e
xperts.
MM Prop Consult
ancy Limit
ed is entitled to up t
o 25%
of any v
alue created b
y services pr
ovided t
o the Gr
oup.
MM Prop Consult
ancy Limit
ed has agreed t
o w
aiv
e
contractually due amounts, including part cr
editing
pre
vious payments under this agreement, such that
the Group r
eceiv
es a 40% discount as part of the
finalisation and cess
ation of the consultancy agr
eement.
The final payment to be made b
y the Gr
oup to MM
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
178
Prop Consult
ancy Limit
ed follo
wing the application of
this discount is £20.
9m which w
as paid in the y
ear (FY21:
£2.5m w
as accrued and subsequently paid in FY22).
During FY21 the Gr
oup enter
ed into an agr
eement
with M.P
.M Elev
ation Limit
ed, a company o
wned and
controlled b
y Michael Murr
ay in relation t
o ele
vat
ion
strat
egy services. M.P
.M Elev
ation Limited w
as paid
£0.
1m in relation t
o the pro
vision of the elev
ation
strat
egy services (FY21: £0
.
1m).
36.
UL
TIMA
TE CONTROLLING
PA
R
T
Y
The Group is contr
olled by M
ike Ashle
y thr
ough his
100% shareholding in Mash Bet
a Limit
ed and Mash
Holdings Limited, which o
wn 303,507
,
460 (6
1.7% of the
issued ordinary shar
e capital of the Compan
y) and
26,
492,540 (5.5
% of the issued ordinary share capit
al of
the Company) or
dinary shares r
espectiv
ely at the period
end. Mash Holdings Limited is the smallest and lar
gest
company t
o consolidat
e these accounts. Mash Holdings
Limited is r
egist
ered in England and W
ales and a copy
of their financial stat
ements can be obt
ained from
Companies House, Cr
o
wn W
ay, Cardiff
, CF14 3UZ.
37
.
POST BAL
ANCE SHEET
E
VENTS
On 25 April 2022 and 20 June 2022 the Gr
oup
commenced share buyback pr
ogrammes with the
aggregat
e purchase price of all shar
es acquired
under these progr
ammes of no great
er than £105
.0m
and the maximum number of shares that may be
purchased under the pr
ogrammes of 15m or
dinary
shares with a nominal v
alue of 10p each. The purpose
of the progr
ammes w
as to r
educe the share capit
al of
the Company
. 11,884,
438 ordinary shares of 10p each
for consider
ation of £79
.9m w
ere acquired through
these progr
ammes.
On 1 May 2022 Michael Murr
ay w
as appointed as
Chief Ex
ecutiv
e Officer of F
rasers Group
. Mik
e Ashle
y
and Michael Murray w
orked t
ogether for a number
of months to ensur
e a smooth transit
ion into the r
ole.
Michael will accelerat
e the Gr
oup
’s strat
egy t
o achiev
e
its vision: “t
o serve our cust
omers with the W
orld’s best
sports, premium and luxury br
ands.”
On 16 May 2022 the Group acquir
ed the entire shar
e
capital of leading Danish sport r
et
ailer SportMaster
. Due
to the pr
o
ximity of the acquisition dat
e to the dat
e these
financial stat
ements ar
e authorised for issue, the initial
accounting for the business combination is incomplet
e
and so the disclosures r
equired b
y IFRS 3 Business
Combinations cannot be made at this st
age.
On 25 May 2022 the Group disposed of its US
ret
ail businesses trading as Bobs St
ores (“Bobs
”)
and East
ern Mount
ain Sports (“EMS”) for a cash
consideration of $7
0m to GoDigit
al Media Group
(“
GDMG”). Further det
ails are included within not
e 16
of the Group financial st
at
ements.
On 1 June 2022 the Group acquir
ed certain int
ellectual
property of the online w
omen
’s fashion ret
ailer
,
Missguided Limit
ed (in administr
ation), Mennace
Limited (in administr
ation) and Miss
guided (IP) Limited
for cash consider
ation of £20.
0 million. Due t
o the
pro
ximity of the acquisition date t
o the date these
financial stat
ements ar
e authorised for issue, the initial
accounting for the business combination is incomplet
e
and so the disclosures r
equired b
y IFRS 3 Business
Combinations cannot be made at this st
age.
The Group announced on 22 June 2022 that it has
increased its in
v
estment in Hugo Boss A
G, and now has
the follo
wing int
erests in the common st
ock:
•
3,
425
,000 shar
es of common stock, r
epresent
ing
4.
9% of Hugo Boss’s t
ot
al share capit
al
•
18,289
,
000 shares of common st
ock via the sale of
put options, repr
esenting 26.
0% of Hugo Boss’s t
ot
al
share capit
al
Aft
er taking int
o account the premium it will r
eceiv
e
under the put options, Fr
asers Group
’s maximum
aggregat
e e
xposure in connection with its acquir
ed
inter
ests in Hugo Boss, with the common st
ock holding
v
alued at the closing share price on 21 June 2022, is
appro
ximately €900m (
c. £770m).
On 28 July 2022 the Gr
oup acquired the online fashion
ret
ailer I Saw It First f
or cash consideration of £1. Due t
o
the pro
ximity of the acquisition date t
o the date these
financial stat
ements ar
e authorised for issue, the initial
accounting for the business combination is incomplet
e
and so the disclosures r
equired b
y IFRS 3 Business
Combinations cannot be made at this st
age.
On 11 August 2022 the Gr
oup completed the dispos
al
of a number of freehold and long leasehold r
etail
parks held b
y its wholly o
wned subsidiaries, to RI
UK 1 Limited f
or a headline price of £205m. F
rasers
Group f
ascias will operat
e from leases within these
properties wher
e appropriat
e. F
rasers Gr
oup in the
ordinary course of business pur
chases and sells
properties fr
om time t
o time and the Group int
ends t
o
use the proceeds of s
ale to
w
ards the w
orking capital
of the Group and its oper
ations.
On 17 August 2022 the Gr
oup made a cash offer t
o
acquire the entir
e issued and to be issued or
dinary share
capital of MySale Gr
oup plc (‘MySale
’) not already held
b
y Fr
asers Group at a price of 2 pence per MySale Shar
e.
The offer v
alues the entire issued and t
o be issued share
capital of MySale not curr
ently held b
y F
rasers Gr
oup
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
179
at appro
ximately £13.
6 million (not taking int
o account
the ex
ercise of any outst
anding options which may hav
e
v
ested under the MySale Shar
e Plans or any con
v
ersion
ev
ent pursuant to the Conv
ertible Loan Not
es). On 29
June 2022, Fr
asers Group acquir
ed 270
,666
,650 MySale
Shares and, t
ogether with the contracts f
or differ
ence
already held b
y it, F
rasers Gr
oup increased its st
ake
in MySale to 28
.7% and became MySale
’s largest
shareholder
. Since the disclosure of Fr
asers Group
’s
acquisition of this further st
ake
, the market price of
MySale shares has incr
eased.
On 20 September 20
22 the Group announced that
Mik
e Ashley w
ould not be standing for r
e-election as a
Direct
or at this y
ear’s Annual General Meeting (“
A
GM”)
and that he will theref
ore st
ep do
wn from the Boar
d
upon the conclusion of the A
GM.
38. PENSIONS
Defined contribution schemes
The group operat
es a defined contribution r
etir
ement
benefit plan for all qualifying emplo
y
ees. The assets of
the plan are held separ
atel
y from those of the Gr
oup in
funds under the control of trust
ees. The only obligation
of the Group with r
espect to the r
etirement bene
fit plan
is to mak
e the specified contributions. The t
ot
al expense
recognised in the income st
at
ement of £6.5m repr
esents
contributions pay
able at rat
es specified b
y the rules of
the plan.
Defined benefit schemes
On 24 F
ebruary 2022, as part of the acquisition of Studio
Ret
ail Limited (“SRL
”) as documented in not
e 32, SRL
became the sponsor of the Findel Gr
oup Pension F
und
(“The Scheme”) via a Deed of Amendment, Substitution,
W
aiver of Liability and Guar
ant
ee. Only the costs and
liabilities associat
ed with the Group section of the
Scheme relat
e t
o SRL and as such, it is only assets
and liabilities of the Group section that hav
e been
recognised in these consolidat
ed financial st
atements.
Fr
asers Group Plc has also guar
anteed payments fr
om
Studio Ret
ail Group plc (in administr
ation) t
o the three
other sections of the Scheme up t
o a maximum of £0.
9m.
As part of the Deed of Amendment, Substitution, W
aiver
of Liability and Guarant
ee, a one off contribut
ion of
£2.0m w
as made to the Scheme b
y SRL. Of this amount,
£1.2m is held b
y the Scheme but is unallocated b
y the
administrat
or
. This amount has theref
ore been sho
wn
within the cash position of the Group section o
f the
pension scheme.
On 11 March 2022, the T
rustee signed a full buy-in
contract (i.
e. a policy t
o co
v
er all members’ benefits in
the four sections of the Scheme) with St
andard Lif
e.
This insurance policy allo
ws the pension scheme t
o
hav
e assets that broadly mat
ch the benefits paid b
y
the Scheme. Ho
w
e
ver
, SRL retains r
esponsibility for the
Group section of the Scheme until it is full
y transf
erred
to St
andar
d Life. The contr
act includes the potential t
o
conv
ert the policy t
o a full buy-out at an unspecified
point in the future
. Ho
we
v
er
, this is expect
ed t
o only
happen if a number of conditions included in the
contract ar
e met, based on the insurer’s r
equirements
and a formal r
equest from the T
rustee and ther
efor
e is
not a certainty
. The buy-in has theref
ore been tr
eated
as an inv
estment decision for accounting purposes, with
the associated r
emeasurement of plan assets r
ecognised
through Other Compr
ehensiv
e Income (“
OCI”).
F
ollo
wing the Deed of Amendment, Substitution, W
aiver
of Liability and Guarant
ee and the buy-in, no further
contributions t
o the scheme are anticipat
ed.
The last funding valuation o
f the Scheme was
undertak
en on 5 April 2019 and r
ecorded a surplus of
£1.5m in respect of the Gr
oup section. The Scheme is
administer
ed b
y Barnet W
addingham LLP
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
180
The latest full actuarial v
aluation has been updat
ed for IAS 19 purposes t
o 24 April 20
22 by Price
w
at
erhouseCoopers
LLP (“PwC”) using the assumptions detailed belo
w. The results of the IAS 19 v
aluation are summarised as follo
ws:
24 April 2022
24 February 2022
(£m)
(£m)
F
air value of the scheme assets
89.
0
120.5
Present v
alue of the funded obligations
(86.8)
(93
.2)
Surplus in the scheme
2.2
27
.3
Plan assets
24 April 2022
24 February 2022
(£m)
(£m)
Plan assets comprise:
Fix
ed inter
est gilts
-
76
.5
Index link
ed gilts
-
39.6
Annuities
84.8
0.1
Cash
4.2
4.3
T
otal
89.0
120.5
Mo
v
ement in the present v
alue of defined benefit obligations
24 April 2022
24 February 2022
(£m)
(£m)
On acquisition
(93.2)
-
Inter
est cost
(0.
4)
-
Effect of changes in demogr
aphic assumptions
0.1
-
Effect of changes in financial assumptions
5.7
-
Effect of e
xperience adjustments
(0.
4)
-
Benefits paid
1.4
-
At end of the period
(86.8)
(93.2)
Mo
v
ement in the fair v
alue of plan assets
24 April 2022
24 February 2022
(£m)
(£m)
On acquisition
120.5
-
Scheme expenses
(0.
4)
-
Inter
est on assets
0.5
-
Remeasurements
(32.2)
-
Employ
er contributions
2.0
-
Benefits paid
(1.4)
-
At end of the period
89.0
120.5
Mo
v
ement in the pension surplus
24 April 2022
24 February 2022
(£m)
(£m)
Surplus on acquisition
27
.3
-
Scheme expenses
(0.
4)
-
Net inter
est income
0.1
-
Remeasurements
(26.8)
-
Employ
er contributions
2.0
-
Surplus at end of the period
2.2
27
.3
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
181
Expense recognised in the Consolidat
ed Income St
at
ement
24 April 2022
(£m)
(i) Included within administrativ
e expenses
Scheme expenses
(0.
4)
(ii) Included within finance income
Net inter
est income
0.1
Amounts recognised in other compr
ehensiv
e income
24 April 2022
(£m)
T
otal remeasur
ements
(26.8)
Actuarial Assumpt
ions
The follo
wing are the principal actuarial assumptions at the r
eporting date
:
24 April 2022
24 February 2022
Financial Assumptions
Discount rat
e for scheme liabilities
3.00%
2.55%
RPI Price Inflation
3.70%
3.65%
CPI Price Inflation (Pre-
2030 / Post
-2030)
2.70% / 3.
70%
2.65% / 3.65%
Rate o
f increase to pensions in payment in line with RPI inflation (up t
o 5% per annum)
2.50%
2.50%
Rate o
f increase to pensions in payment in line with CPI inflation (up t
o 5% per annum)
3.1
5
%
3.
10%
Rate o
f increase to de
ferred pensions
3.20%
3
.15
%
Post retir
ement mortality (in y
ears)
Current pensioners at 65 - male
86.6
yrs
86.6yrs
Current pensioners at 65 - female
87
.
9yrs
87
.
9yrs
Current pensioners at 45 - male
88.4
yrs
88.4
yrs
Current pensioners at 45 - f
emale
89.8yrs
89.8yrs
Demographic Assumptions
Cash Commutation (members t
aking cash lump sum)
60%
60%
Proportion of members that ar
e married at retirement
70%
70%
The duration, or av
erage t
erm t
o payment for the benefits due w
eight
ed b
y liability, is ar
ound 15 y
ears.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
182
Risks
Inflation
In projecting the e
xpect
ed future benefit payments, assumptions ar
e made regar
ding future price inflation. Ther
e is a
risk that the actual rat
e of inflation will be higher than assumed which will incr
ease the cost of pro
viding the benefits
and thus the liability
. This w
ould result in additional contributions being r
equired and a det
erioration in the solv
ency
position unless inv
estment r
eturns are similarly higher than e
xpect
ed.
Mortality
It is not possible to pr
edict with an
y certainty ho
w long members of the Scheme will liv
e, and if members liv
e longer
than expect
ed, additional contributions will be r
equired and the Scheme
’s solv
ency position will deterior
ate
.
Managing risk
T
o manage the risks of the Scheme, TPIE e
x
ercises w
ere carried out during 20
15 and 2016, which r
esulted in a number
of members transf
erring out of the Scheme. The TPIE option has no
w been embedded within the scheme.
IFRIC 14
IFRIC 14 is an int
erpret
ation relating t
o IAS 19 that co
v
ers whether pension scheme surpluses can be recognised on the
balance sheet. Based on the cir
cumstances of the F
und and in line with the prior period, management do not belie
ve
that IFRIC 14 impacts the IAS 19 results since the Compan
y has a right t
o a refund o
f surplus assets at some point in
the future
, and as such hav
e not made any adjustments t
o the results.
F
unding
The Scheme is funded by SRL. During the curr
ent period, the compan
y contributed £1.
9m t
o the scheme. The Gr
oup
expects t
o mak
e contributions of £nil in the financial period ended April 2023.
The follo
wing table sho
ws the e
xpect
ed future benefit payments f
or the Findel Gr
oup Pension F
und:
Futur
e benefit payments
(£m)
2022 - 2031
39.
7
2032 - 2041
41.5
2042 - 205
1
34.6
2052 - 206
1
19.3
2062 - 2071
4.1
2072 - 2081
0.2
2082 - 2091
-
After 209
2
-
T
otal
139.4
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
183
39
.
SUBSIDIAR
Y UNDERT
AKINGS
NAME
REGIS
TERED OFFICE ADDRESS
COMP
ANY NUMBER
PERCENT
A
GE OF
ISSUED SHARE
CAPIT
AL HELD
18 Montrose Ret
ail Limited
Shirebrook
(1)
115776
36
100
2Care4 Limit
ed
Church Bridge House, Henry Str
eet, Accringt
on, United Kingdom,
BB5 4EE
3806485
100
Activ
ator Br
ands Limited
Shirebrook
(1)
5344658
100
Activ
ator Pr
oducts Limited
Shirebrook
(1)
42046
11
100
Activ
e Apparel Ne
w Corp
Cogency Global Inc. 850 New Burt
on Road Suit
e 201 Dov
er
Delawar
e 19904; USA
3270168
100
Alpha Dev
elopments Stockport Lt
d
Shirebrook
(1)
12662564
100
AP Brands Holdings Lt
d
12th Floor, Menar
a Synphon
y No 5, Jalan Semangat (Jalan
Professor Khoo K
ay Kim) , Seks
yen 13, 46
200 46200 Pet
aling
Jaya, Selangor Darul Ehs
an, Malaysia
4921-
A
100
Bellatrix Associates Limit
ed
Clinch
’s House, Lord Str
eet, Douglas, Isle of Man, IM99 1RZ,
Isle of Man
111671C
100
Bellatrix Overseas Limit
ed
Clinch
’s House, Lord Str
eet, Douglas, Isle of Man, IM99 1RZ,
Isle of Man
128827C
100
Bellatrix Unlimited
Clinch
’s House, Lord Str
eet, Douglas, Isle of Man, IM99 1RZ,
Isle of Man
111670C
100
Bob W
oolmer Sales Limit
ed
Shirebrook
(1)
2237568
100
Bob
’s Stor
es USA LLC
The Corporation T
rust Company, Corpor
ation T
rust Cent
er, 1209
Orange Street, W
ilmingt
on, New Castle County DE 19801,
United St
ates
639085
100
Brands & F
ashion NV
Leopoldstraat, nr
. 79, 2800 Mechelen, Belgium
0477-995-4
12
99.8
Brands 001 Limit
ed
Shirebrook
(1)
5347540
100
Brands Holdings Limit
ed*
Shirebrook
(1)
4087
435
100
Brands Holdings Sponsorship Limit
ed
Shirebrook
(1)
10375418
100
Brands Inc Limit
ed
Shirebrook
(1)
3585719
100
Brasher Leisure Limit
ed
Shirebrook
(1)
999421
100
BSL International Limit
ed
Shirebrook
(1)
2800425
100
Cafe Clo Limit
ed
Shirebrook
(1)
13641982
100
Cafico - Comercio de Artigos de
Desportos S
.A.
Via Central de M
ilheiros no 121, 4475-
334, Fr
guesia de Milherios,
Concelho da Maia, Port
o, Portugal
503751804
100
Campri Limited
Shirebrook
(1)
5398677
100
Cardinal Inv
estments S.l
C.
C.Puerto V
enecia, local 84, T
rav
. Jardines Reales, 7
, 50021
Zar
agoza, Spain
B885427
66
100
Carlton Sports Compan
y Limited
Shirebrook
(1)
467
686
100
Catrinona Inv
estments S.L
C.
C.Puerto V
enecia, local 84, T
rav
. Jardines Reales, 7
, 50021
Zar
agoza, Spain
B88542683
100
CDS IP SA
Parc Industriel, A
venue Ernest, Solvay 29 1480 Saint
es, Belgium
4064610
77
100
Criminal Clothing Limited
Shirebrook
(1)
418475
0
100
Cruise Clothing Limited
Martin House, 184 Ingram Str
eet, Glasgo
w, Scotland, G
1 1DN
SC382991
100
Curlina Inv
estments S.l
C.
C.Puerto V
enecia, local 84, T
rav
. Jardines Reales, 7
, 50021
Zar
agoza, Spain
B8841536
9
100
Designer T
rav
el Goods Limit
ed
Shirebrook
(1)
12298797
100
Dink Digital Holdings Limit
ed
Shirebrook
(1)
11143016
100
Donnay International N.
V
.
Leopoldstraat nr 79
, 2800 Mechelen,Belgium
4353
92220
100
East
chance Limited
Unit 1903B & 1905, Ex
change T
ower
,, 33 W
ang Chiu Road,
Ko
wloon Bay, K
owloon, Hong K
ong
17
4348
100
Epoch Properties Limit
ed
First Floor La Chasse Chambers St Helier JE2 4UE Jerse
y
74
7
5
3
100
Etail Services Limit
ed
Shirebrook
(1)
5146
997
100
Ev
ans C
ycles Br
ands Limited
Shirebrook
(1)
11634915
100
Ev
ans C
ycles Limit
ed
Shirebrook
(1)
11577650
100
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
184
NAME
REGIS
TERED OFFICE ADDRESS
COMP
ANY NUMBER
PERCENT
A
GE OF
ISSUED SHARE
CAPIT
AL HELD
Ev
ans C
ycles Pr
operty Limited
Shirebrook
(1)
11634939
100
Ev
erlast Austr
alia Limited
Shirebrook
(1)
8103912
100
Ev
erlast Sports Int
ernational Inc. Corp.
Ev
erlast 42 W
est 39th St. 3rd Floor Ne
w Y
ork, New Y
ork, 10018
13-2811380
100
Ev
erlast Sports Mfg
. Corp.
Corporation Service Compan
y 80 Stat
e Street, Alban
y, Ne
w Y
ork,
122207-
2543, US
A
13-
1804772
100
Ev
erlast W
orld Boxing Headquarters
Corporation
Corporation Service Compan
y 80 Stat
e Street, Alban
y, Ne
w Y
ork,
122207-
2543, US
A
13-
1804773
100
Ev
erlast W
orldwide Inc.
The Corporation T
rust Company, Corpor
ation T
rust Cent
er, 1209
Orange Street, W
ilmingt
on, New Castle County DE 19801,
United St
ates
13-3672716
100
Exsports Limited
Shirebrook
(1)
2779040
100
FG (AF Holdings) Limit
ed
Shirebrook
(1)
13281983
100
FG US
A T
rade Gr
oup Limited
Shirebrook
(1)
13216390
100
Firetr
ap Limited
Shirebrook
(1)
6836684
100
F
orev
er Media Limited
Shirebrook
(1)
8249185
100
F
orev
er Sports Limited
Shirebrook
(1)
9489811
100
Fr
asers Group (European Holdings) Limit
ed
Shirebrook
(1)
12903845
100
Fr
asers Group Asia SDN.BHD
.
Lev
el 15-2, Bangunan F
aber Imperial Court, Jalan Sult
an Ismail,
50250 Kuala Lumpur W
.P
. Malaysia
201901040821
51
Fr
asers Group Financial Services Limit
ed
Shirebrook
(1)
13191369
100
Fr
asers Group Lo
yalty Services Limit
ed
Shirebrook
(1)
13340837
100
FRASERS RET
AIL NIGERIA LIMITED
RCO COUR
T 3-5, SINARI D
ARANIJO STREET
, VICTORIA
ISLAND
, LAGOS S
T
A
TE, Nigeria
1799366
60
Game AR Limited
Basingstok
e
(2)
10142852
100
Game Belong Limited
Shirebrook
(1)
12794477
100
Game Digital Holdings Limit
ed
Basingstok
e
(2)
7893832
100
Game Digital Limit
ed
Basingstok
e
(2)
9040213
100
Game Digital Solutions Limit
ed
Basingstok
e
(2)
947
6209
100
Game Retail Limit
ed
Basingstok
e
(2)
7837246
100
Game Spain Holdings Limited
Basingstok
e
(2)
10846702
100
Game Spain Inv
estments Limited
Basingstok
e
(2)
10863881
100
Game Stor
es Iberia SLU
C/ Virgilio 7 - 9
, Parcelas 12 - 13
, Pozuelo de Alar
con, Madrid,
Spain
B81209751
100
Gelert IP Limited
Shirebrook
(1)
8576
185
100
Gelert Limited
Shirebrook
(1)
8576
204
100
Global Apparel (HK) Limit
ed
Unit 1903B & 1905, Ex
change T
ower
, 33 W
ang Chiu Road,
Ko
wloon Bay, K
owloon, Hong K
ong
1330162
100
Golddigga Brands Limit
ed
Shirebrook
(1)
6636
173
100
Gotay In
vestments S
.L
C.
C.Puerto V
enecia, local 84, T
rav
. Jardines Reales, 7
, 50021
Zar
agoza, Spain
B88542709
100
GRMNT Ltd
Shirebrook
(1)
11144039
100
GT
-Lines BV
Bert Haanstrak
ade 2, 1087DN, Amster
dam, Netherlands
17117820
100
Gul IP Limited
Shirebrook
(1)
86
12478
100
Gul W
atersports Limited
Shirebrook
(1)
7589716
100
Heatons (N.I
.) Limited
PO Bo
x BT15EX, 5th Floor Lesley Buildings, 6
1-65 Fountain Str
eet,
Belfast, Northern Ireland
NI035599
100
Heatons St
ores Limit
ed
Heaton House
, IDA Business P
ark, Whitest
own, T
allaght, Dublin,
Ireland, D2
4E9
32,
509525
100
Heatons Unlimit
ed Company
Heaton House
, IDA Business P
ark, Whitest
own, T
allaght, Dublin,
Ireland, D2
4E9
32,
11229
100
Heaven or Hell Limit
ed
Shirebrook
(1)
5899282
100
HK Sports & Golf Aktiebolag
Eskiolstorpsv
agen 7
, 269 96, Bastad, S
weden
556510-8189
100
HOF Ireland St
ores Limited
Heaton House
, IDA Business P
ark, Whitest
own, T
allaght, Dublin,
Ireland, D2
4E9
32
626384
100
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
185
NAME
REGIS
TERED OFFICE ADDRESS
COMP
ANY NUMBER
PERCENT
A
GE OF
ISSUED SHARE
CAPIT
AL HELD
Hot T
una IP Limited
Shirebrook
(1)
6836792
100
House of Fr
aser Brands Limited
Shirebrook
(1)
10687367
100
House of Fr
aser Limited
Shirebrook
(1)
10686681
100
International Br
and Management Limited*
Shirebrook
(1)
5142123
100
Jack Wills (IP) Limit
ed
Shirebrook
(1)
1177549
5
100
Jack Wills Pr
operty Limited
Shirebrook
(1)
11775643
100
Jack Wills R
etail (Ireland ) Limit
ed
Heaton House
, IDA Business P
ark, Whitest
own, T
allaght, Dublin,
Ireland, D2
4E9
32,
656208
100
Jack Wills R
etail Limit
ed
Shirebrook
(1)
11634810
100
James Lillywhites Limit
ed
Shirebrook
(1)
118840
100
Kangol Holdings Limit
ed
Shirebrook
(1)
3317738
100
Kangol Limit
ed
Shirebrook
(1)
3343793
100
Kangol T
rustees Limited
Shirebrook
(1)
3505512
100
Karrimor Int
ernational Limited
Aminaka K
udan Building 6/F
, 1-
14-
17 Kudankit
a, Chiyoda-ku,
T
okyo
, 102-0073, Japan
0100-01-012128
95
Karrimor Limit
ed
Shirebrook
(1)
521597
4
100
KooGa IP Limit
ed
Shirebrook
(1)
12402087
100
La Jolla (UK) Limited
Shirebrook
(1)
5737550
100
Lillywhites Limit
ed
Shirebrook
(1)
290939
100
Lonsdale Austr
alia Limited
Shirebrook
(1)
7665885
100
Lonsdale Bo
xing Limited
Shirebrook
(1)
3912303
100
Lonsdale Sports Limit
ed
Shirebrook
(1)
4430781
100
Lov
ell Sports (Holdings) Limited
Shirebrook
(1)
9608995
100
Lov
ell Sports Limited
Shirebrook
(1)
4184358
100
Lov
ells SP Limited
Shirebrook
(1)
8907509
100
Loy
alti Holdings Limit
ed
Shirebrook
(1)
12110637
100
Masters Holders Limit
ed
Shirebrook
(1)
8787718
100
Midto
wn Lt
d
Shirebrook
(1)
9467997
100
Mississippi Manufacturing LL
C
The Corporation T
rust Company, Corpor
ation T
rust Cent
er, 1209
Orange Street, W
ilmingt
on, New Castle County DE 19801,
United St
ates
3470413
100
Mountain Sports LL
C
The Corporation T
rust Company, Corpor
ation T
rust Cent
er, 1209
Orange Street, W
ilmingt
on, New Castle County DE 19801,
United St
ates
638622
4
100
Mountain Sports US
A LLC
The Corporation T
rust Company, Corpor
ation T
rust Cent
er, 1209
Orange Street, W
ilmingt
on, New Castle County DE 19801,
United St
ates
712425
9
100
Muddyfo
x IP Limited
Shirebrook
(1)
10246
764
100
Muddyfo
x Limited
Shirebrook
(1)
4187350
100
Nevica IP Limit
ed
Shirebrook
(1)
6836778
100
No F
ear Brand Limited
Shirebrook
(1)
5568043
100
No F
ear International Limit
ed
Shirebrook
(1)
5532482
100
No F
ear USA Limited
Shirebrook
(1)
7712470
100
Olympus V
entures Limited
Shirebrook
(1)
3945752
100
Paddle Sport Limited
Shirebrook
(1)
6836690
100
POD Collection Services Limited
Academy House
, 36 Poland Street, London, W1F 7L
U,
United K
ingdom
9918495
100
Psy
che Holdings Limited
Shirebrook
(1)
03438665
100
Psy
che Limited
Shirebrook
(1)
02844011
100
Puffa IP Limit
ed
Shirebrook
(1)
10910124
100
Queensberry Bo
xing IP Limited
Shirebrook
(1)
7929363
100
Queensberry Rules Limited
Shirebrook
(1)
6723660
100
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
186
NAME
REGIS
TERED OFFICE ADDRESS
COMP
ANY NUMBER
PERCENT
A
GE OF
ISSUED SHARE
CAPIT
AL HELD
Quentin Inv
estments S.l
C.
C.Puerto V
enecia, local 84, T
rav
. Jardines Reales, 7
, 50021
Zar
agoza, Spain
B88542733
100
Quickreply Limit
ed
Shirebrook
(1)
5904737
100
Republic IP Limited
Shirebrook
(1)
5635015
100
Republic.com R
etail Limit
ed
Shirebrook
(1)
8248997
100
Rhapsody Inv
estments (Europe) SA
1 Cote d’Eich, L
-
1450
, Luxembour
g
B21.60
X
100
Roberts 50 USA LL
C
c/
o Corporation Service Company
, 251 Little F
alls Drive
, County
of New Castle
, Wilmingt
on, Delaw
are, 19808
5186
173
100
Runnel Limited
Shirebrook
(1)
9336830
100
S&B Brands Limit
ed
Shirebrook
(1)
5635585
100
SC Sports (SG) PTE L
TD
60 Pay
a Lebar Road, #08-43, Pay
a Lebar Square
, 409051,
Singapore
198203096N
100
SD Equestrian Limit
ed
Shirebrook
(1)
86927
80
100
SD Outdoor IP Limit
ed
Shirebrook
(1)
8560252
100
SD Outdoor Limit
ed
Shirebrook
(1)
8560260
100
SDB 2 S.A.
Parc Industriel, A
venue Ernest, Solvay 29 1480 Saint
es, Belgium
0848.964
.388
100
SDI (Aberdeen 2) Limit
ed
Shirebrook
(1)
12579371
100
SDI (Aberdeen) Limit
ed
Shirebrook
(1)
851259
2
100
SDI (Aberwystwyth) Limit
ed
Shirebrook
(1)
2789996
100
SDI (Acqco 5) Limit
ed
Shirebrook
(1)
10162904
100
SDI (Aintree) Limit
ed
Shirebrook
(1)
3352462
100
SDI (Ashford) Limit
ed
Shirebrook
(1)
7848460
100
SDI (Ashington) Limit
ed
Shirebrook
(1)
7849231
100
SDI (A
yr) Limited
Shirebrook
(1)
5528267
100
SDI (Ballymena) Limited
5th Floor, Lesle
y Buildings, 6
1-65 F
ountain Street, Belf
ast,
Northern Ireland, B
T1 5EX
NI653829
100
SDI (Bangor) Limited
Shirebrook
(1)
5529705
100
SDI (Barro
w in Furness) Limit
ed
Shirebrook
(1)
785157
4
100
SDI (Belfast) Limit
ed
Shirebrook
(1)
9872471
100
SDI (Berwick) Limited
Shirebrook
(1)
2739957
100
SDI (Betws-y-C
oed) Limited
Shirebrook
(1)
6836673
100
SDI (Birkenhead) Limit
ed
Shirebrook
(1)
7849198
100
SDI (Bishop Auckland) Limit
ed
Shirebrook
(1)
30042
46
100
SDI (Boucher Road) Limited
Shirebrook
(1)
13808700
100
SDI (Brands 1) Limit
ed
Shirebrook
(1)
11795958
100
SDI (Brands 2) Limit
ed
Shirebrook
(1)
12299584
100
SDI (Brands 3) Limit
ed
Shirebrook
(1)
12299567
100
SDI (Brands 4) Limit
ed
Shirebrook
(1)
12299515
100
SDI (Bridgwat
er) Limited
Shirebrook
(1)
785206
1
100
SDI (Brighton) Limit
ed
Shirebrook
(1)
12579780
100
SDI (Brixton) Limit
ed
Shirebrook
(1)
9127300
100
SDI (Brook R
O
W) Limited
Shirebrook
(1)
9336806
100
SDI (Brook UK) Limit
ed
Shirebrook
(1)
9340379
100
SDI (Burton) Limit
ed
Shirebrook
(1)
8495632
100
SDI (Car
diff Flannels) Limited
Shirebrook
(1)
10177359
100
SDI (CARDIFF QS 2) L
TD
Shirebrook
(1)
11227321
100
SDI (Car
diff QS) Limited
Shirebrook
(1)
12578045
100
SDI (Carlisle) Limit
ed
Shirebrook
(1)
785195
9
100
SDI (Chatham) Limit
ed
Shirebrook
(1)
6836679
100
SDI (Cheshunt 2) Limit
ed
Shirebrook
(1)
11775717
100
SDI (Cheshunt) Limit
ed
Shirebrook
(1)
11775599
100
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
187
NAME
REGIS
TERED OFFICE ADDRESS
COMP
ANY NUMBER
PERCENT
A
GE OF
ISSUED SHARE
CAPIT
AL HELD
SDI (Clact
on) Limited
Shirebrook
(1)
7852078
100
SDI (Clonmel) Limit
ed
5th Floor, Lesle
y Buildings, 6
1-65 F
ountain Street, Belf
ast,
Northern Ireland, B
T1 5EX
NI653359
100
SDI (Colchest
er) Limited
Shirebrook
(1)
5632790
100
SDI (Corb
y) Limit
ed
Shirebrook
(1)
10885672
100
SDI (Cork) Limit
ed
Shirebrook
(1)
117757
63
100
SDI (Co
v
entry) Limited
Shirebrook
(1)
9680128
100
SDI (Darlington) Limit
ed
Shirebrook
(1)
10915193
100
SDI (Derby) Limit
ed
Shirebrook
(1)
9310031
100
SDI (Derry) Limited
5th Floor, Lesle
y Buildings, 6
1-65 F
ountain Street, Belf
ast,
Northern Ireland, B
T1 5EX
NI653340
100
SDI (Doncaster) Limit
ed
Shirebrook
(1)
9888670
100
SDI (Dundee) Limited
Shirebrook
(1)
9702004
100
SDI (Dunfermline) Limit
ed
Shirebrook
(1)
8483679
100
SDI (East Ham) Limit
ed
Shirebrook
(1)
9810378
100
SDI (East Kilbride) Limit
ed
Shirebrook
(1)
6656368
100
SDI (Edinburgh
) Limited
Shirebrook
(1)
10100990
100
SDI (Enfield) Limited
Shirebrook
(1)
10086209
100
SDI (Fulham) Limit
ed
Shirebrook
(1)
7852037
100
SDI (Gainsbor
ough) Limited
Shirebrook
(1)
6338907
100
SDI (Galashiels) Limit
ed
Shirebrook
(1)
7852091
100
SDI (Glas
gow Argyle S
T) Limited
Shirebrook
(1)
11227937
100
SDI (Glas
gow F
ort) Limited
Shirebrook
(1)
986
1504
100
SDI (Glas
gow F
rasers) Limited
Shirebrook
(1)
11531596
100
SDI (Glas
gow Ingram Str
eet) Limited
Shirebrook
(1)
9925519
100
SDI (Gloucest
er) Limited
Shirebrook
(1)
7852067
100
SDI (Gr
eat Y
armouth) Limited
Shirebrook
(1)
11732687
100
SDI (Hanley) Limit
ed
Shirebrook
(1)
11228017
100
SDI (Hastings) Limited
Shirebrook
(1)
8625893
100
SDI (Heref
ord) Limited
Shirebrook
(1)
9888642
100
SDI (Hofco
) Limited
Shirebrook
(1)
8319960
100
SDI (HoH Holdings) Limited
Shirebrook
(1)
1016
1592
100
SDI (Hounslow) Limit
ed
Shirebrook
(1)
10086218
100
SDI (Hull) Limited
Shirebrook
(1)
9638564
100
SDI (Ipswich 2) Limit
ed
Shirebrook
(1)
12578948
100
SDI (Ipswich) Limit
ed
Shirebrook
(1)
9788411
100
SDI (Isle of Man) Limited
Shirebrook
(1)
99017
45
100
SDI (Jersey Holding) Limit
ed
Shirebrook
(1)
10177028
100
SDI (K L
ynn) Limited
Shirebrook
(1)
1007307
6
100
SDI (Keighle
y) Limited
Shirebrook
(1)
6260239
100
SDI (Kendal) Limit
ed
Shirebrook
(1)
6338918
100
SDI (Kentish T
own) Limit
ed
Shirebrook
(1)
9901702
100
SDI (Kidderminst
er) Limited
Shirebrook
(1)
9203731
100
SDI (Kilmarnock) Limit
ed
Shirebrook
(1)
7853433
100
SDI (Kingst
on) Limited
Shirebrook
(1)
10915209
100
SDI (Kirk
caldy) Limited
Shirebrook
(1)
7852097
100
SDI (Leeds 2) Limited
Shirebrook
(1)
13808640
100
SDI (Leeds) Limited
Shirebrook
(1)
9293515
100
SDI (Leicester) Limit
ed
Shirebrook
(1)
9127170
100
SDI (Liverpool) Limit
ed
Shirebrook
(1)
9888734
100
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
188
NAME
REGIS
TERED OFFICE ADDRESS
COMP
ANY NUMBER
PERCENT
A
GE OF
ISSUED SHARE
CAPIT
AL HELD
SDI (Low
esto
ft) Limited
Shirebrook
(1)
7852265
100
SDI (LSL Holdings) Limited
Shirebrook
(1)
1016
1824
100
SDI (Manchester Cheetham Hill) Limit
ed
Shirebrook
(1)
10100969
100
SDI (Manchester Dent
on) Limited
Shirebrook
(1)
9127295
100
SDI (Market Road) Limit
ed
Shirebrook
(1)
107992
47
100
SDI (Middlesbrough) Limit
ed
Shirebrook
(1)
10081909
100
SDI (Nassau Street) Limit
ed
Shirebrook
(1)
11227964
100
SDI (Neath) Limited
Shirebrook
(1)
7853548
100
SDI (New
ark) Limited
Shirebrook
(1)
7853470
100
SDI (New
castle) Limited
Shirebrook
(1)
9127286
100
SDI (Newport IO
W) Lt
d
Shirebrook
(1)
12578944
100
SDI (Newport) Limit
ed
Shirebrook
(1)
8679118
100
SDI (New
quay) Limited
Shirebrook
(1)
10089800
100
SDI (Newry) Limit
ed
5th Floor, Lesle
y Buildings, 6
1-65 F
ountain Street, Belf
ast,
Northern Ireland, B
T1 5EX
NI653358
100
SDI (Newt
on Abbot) Limited
Shirebrook
(1)
6836666
100
SDI (Newt
ownabbe
y) Limited
Shirebrook
(1)
9127266
100
SDI (NFSK) Limited
Shirebrook
(1)
10919102
100
SDI (Northampton) Limit
ed
Shirebrook
(1)
7852272
100
SDI (Northwich) Limit
ed
Shirebrook
(1)
5656295
100
SDI (Nottingham) Limited
Shirebrook
(1)
10100609
100
SDI (Nuneaton) Limit
ed
Shirebrook
(1)
785224
9
100
SDI (Os
westry) Limit
ed
Shirebrook
(1)
7852363
100
SDI (Oxf
ord Street) Limit
ed
Shirebrook
(1)
10046080
100
SDI (Penzance) Limit
ed
Shirebrook
(1)
7852297
100
SDI (Peterlee) Limit
ed
Shirebrook
(1)
785240
1
100
SDI (Plymouth Flannels) Limited
Shirebrook
(1)
9127387
100
SDI (Plymouth) Limit
ed
Shirebrook
(1)
9470468
100
SDI (Portsmouth) Limit
ed
Shirebrook
(1)
12579294
100
SDI (Prest
on) Limited
Shirebrook
(1)
10915199
100
SDI (Propco 100) Limit
ed
Shirebrook
(1)
11732700
100
SDI (Propco 101) Limit
ed
Shirebrook
(1)
11773466
100
SDI (Propco 102) Limit
ed
Shirebrook
(1)
11775629
100
SDI (Propco 105) Limit
ed
Shirebrook
(1)
11775597
100
SDI (Propco 107) Limit
ed
Shirebrook
(1)
11775706
100
SDI (Propco 111) Limit
ed
Shirebrook
(1)
11775722
100
SDI (Propco 112) Limit
ed
Shirebrook
(1)
9127160
100
SDI (Propco 114) Limit
ed
Shirebrook
(1)
12298708
100
SDI (Propco 115) Limit
ed
Shirebrook
(1)
12300052
100
SDI (Propco 116) Limit
ed
Shirebrook
(1)
12332460
100
SDI (Propco 117) Limit
ed
Shirebrook
(1)
12332456
100
SDI (Propco 118) Limit
ed
Shirebrook
(1)
12332859
100
SDI (Propco 119) Limit
ed
Shirebrook
(1)
12332862
100
SDI (Propco 125) Limit
ed
Shirebrook
(1)
12577378
100
SDI (Propco 134) Limit
ed
Shirebrook
(1)
9625631
100
SDI (Propco 139) Limit
ed
Shirebrook
(1)
13808689
100
SDI (Propco 14
1) Limited
Shirebrook
(1)
13808701
100
SDI (Propco 142) Limit
ed
Shirebrook
(1)
13808704
100
SDI (Propco 35) Limit
ed
Shirebrook
(1)
11500282
100
SDI (Propco 36) Limit
ed
Shirebrook
(1)
11523336
100
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
189
NAME
REGIS
TERED OFFICE ADDRESS
COMP
ANY NUMBER
PERCENT
A
GE OF
ISSUED SHARE
CAPIT
AL HELD
SDI (Propco 37) Limit
ed
Shirebrook
(1)
11523343
100
SDI (Propco 38) Limit
ed
Shirebrook
(1)
11523424
100
SDI (Propco 39) Limit
ed
Shirebrook
(1)
11523440
100
SDI (Propco 40) Limit
ed
Shirebrook
(1)
11523489
100
SDI (Propco 41) Limit
ed
Shirebrook
(1)
11523621
100
SDI (Propco 43) Limit
ed
Shirebrook
(1)
11523609
100
SDI (Propco 44) Limit
ed
Shirebrook
(1)
11523608
100
SDI (Propco 46) Limit
ed
Shirebrook
(1)
115237
48
100
SDI (Propco 47) Limit
ed
Shirebrook
(1)
11530370
100
SDI (Propco 49) Limit
ed
Shirebrook
(1)
11526
115
100
SDI (Propco 50) Limit
ed
Shirebrook
(1)
11526
182
100
SDI (Propco 51) Limit
ed
Shirebrook
(1)
11527237
100
SDI (Propco 52) Limit
ed
Shirebrook
(1)
11526972
100
SDI (Propco 55) Limit
ed
Shirebrook
(1)
11527303
100
SDI (Propco 56) Limit
ed
Shirebrook
(1)
11527382
100
SDI (Propco 57) Limit
ed
Shirebrook
(1)
11527500
100
SDI (Propco 58) Limit
ed
Shirebrook
(1)
11527596
100
SDI (Propco 60) Limit
ed
Shirebrook
(1)
11531386
100
SDI (Propco 6
1) Limited
Shirebrook
(1)
11531382
100
SDI (Propco 62) Limit
ed
Shirebrook
(1)
11531444
100
SDI (Propco 63) Limit
ed
Shirebrook
(1)
11531503
100
SDI (Propco 64) Limit
ed
Shirebrook
(1)
11531506
100
SDI (Propco 65) Limit
ed
Shirebrook
(1)
11531532
100
SDI (Propco 67) Limit
ed
Shirebrook
(1)
1157267
6
100
SDI (Propco 6
9) Limited
Shirebrook
(1)
11572830
100
SDI (Propco 70) Limit
ed
Shirebrook
(1)
11572933
100
SDI (Propco 71) Limit
ed
Shirebrook
(1)
1157
4887
100
SDI (Propco 73) Limit
ed
Shirebrook
(1)
11575050
100
SDI (Propco 75) Limit
ed
Shirebrook
(1)
11577256
100
SDI (Propco 7
6) Limited
Shirebrook
(1)
115776
17
100
SDI (Propco 77) Limit
ed
Shirebrook
(1)
11578164
100
SDI (Propco 80) Limit
ed
Shirebrook
(1)
115776
70
100
SDI (Propco 81) Limit
ed
Shirebrook
(1)
11641123
100
SDI (Propco 83) Limit
ed
Shirebrook
(1)
11646302
100
SDI (Propco 85) Limit
ed
Shirebrook
(1)
11649632
100
SDI (Propco 86) Limit
ed
Shirebrook
(1)
11649235
100
SDI (Propco 87) Limit
ed
Shirebrook
(1)
11649336
100
SDI (Propco 88) Limit
ed
Shirebrook
(1)
1167
4753
100
SDI (Propco 90) Limit
ed
Shirebrook
(1)
11649431
100
SDI (Propco 91) Limit
ed
Shirebrook
(1)
11687077
100
SDI (Propco 92) Limit
ed
Shirebrook
(1)
11730204
100
SDI (Propco 93) Limit
ed
Shirebrook
(1)
11730253
100
SDI (Propco 94) Limit
ed
Shirebrook
(1)
11730440
100
SDI (Propco 96) Limit
ed
Shirebrook
(1)
11730503
100
SDI (Propco 98) Limit
ed
Shirebrook
(1)
11730868
100
SDI (Propco 99) Limit
ed
Shirebrook
(1)
11732772
100
SDI (Ramsgat
e) Limited
Shirebrook
(1)
7852250
100
SDI (Reading) Limited
Shirebrook
(1)
10422164
100
SDI (Redcar) Limited
Shirebrook
(1)
2731452
100
SDI (Retail C
o 10) Limited
Shirebrook
(1)
11689119
100
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
190
NAME
REGIS
TERED OFFICE ADDRESS
COMP
ANY NUMBER
PERCENT
A
GE OF
ISSUED SHARE
CAPIT
AL HELD
SDI (Retail C
o 11) Limited
Shirebrook
(1)
12298852
100
SDI (Retail C
o 13) Limited
Shirebrook
(1)
1229876
7
100
SDI (Retail C
o 4) Limited
Shirebrook
(1)
11635011
100
SDI (Retail C
o 7) Limited
Shirebrook
(1)
11687276
100
SDI (Retail C
o 8) Limited
Shirebrook
(1)
1168737
6
100
SDI (Retail C
o 9) Limited
Shirebrook
(1)
11689077
100
SDI (Rolle St) Limited
Shirebrook
(1)
7852669
100
SDI (Romfor
d) Limited
Shirebrook
(1)
10071547
100
SDI (Rotherham) Limit
ed
Shirebrook
(1)
9888635
100
SDI (Salisbury) Ltd
Shirebrook
(1)
10107572
100
SDI (Scarborough) Limit
ed
Shirebrook
(1)
6328463
100
SDI (Scunthorpe Parishes Centre) Limit
ed
Shirebrook
(1)
11730442
100
SDI (Scunthorpe) Limited
Shirebrook
(1)
7852055
100
SDI (Southampton 2) Limit
ed
Shirebrook
(1)
9665889
100
SDI (Southampton) Limit
ed
Shirebrook
(1)
8512480
100
SDI (Southport) Limited
Shirebrook
(1)
9888806
100
SDI (St Aust
ell) Limited
Shirebrook
(1)
7852284
100
SDI (St Helens) Limited
Shirebrook
(1)
7852281
100
SDI (Staff
ord Riverside) Limit
ed
Shirebrook
(1)
8972499
100
SDI (Staff
ord) Limited
Shirebrook
(1)
8568681
100
SDI (Staines) Limit
ed
Shirebrook
(1)
11646482
100
SDI (Stockport) Limit
ed
Shirebrook
(1)
6372181
100
SDI (Stok
e Longton) Limit
ed
Shirebrook
(1)
7853877
100
SDI (Stok
e Newingt
on) Limited
Shirebrook
(1)
7852207
100
SDI (Strabane) Limit
ed
Shirebrook
(1)
9890243
100
SDI (Streatham) Limit
ed
Shirebrook
(1)
10066335
100
SDI (Strood) Limit
ed
Shirebrook
(1)
7852251
100
SDI (Sunderland) Limited
Shirebrook
(1)
8755347
100
SDI (Sutton) Limit
ed
Shirebrook
(1)
11228011
100
SDI (Swindon) Limit
ed
Shirebrook
(1)
9888662
100
SDI (T
aunton) Limited
Shirebrook
(1)
7852191
100
SDI (Thanet) Limited
Shirebrook
(1)
12579034
100
SDI (The House Y
arm) Limited
Shirebrook
(1)
12332871
100
SDI (The Lion Hotel) Limited
Shirebrook
(1)
6836880
100
SDI (Thurrock) Limited
Shirebrook
(1)
100897
43
100
SDI (T
ro
wbridge) Limited
Shirebrook
(1)
1235566
1
100
SDI (Uxbridge 2) Limited
Shirebrook
(1)
9127316
100
SDI (Uxbridge) Limited
Shirebrook
(1)
10177276
100
SDI (W
akefield) Limited
Shirebrook
(1)
8483711
100
SDI (W
alsall) Limited
Shirebrook
(1)
7852289
100
SDI (W
atford) Limited
Shirebrook
(1)
6328505
100
SDI (Widnes) Limit
ed
Shirebrook
(1)
8576472
100
SDI (Wigan
) IP Limited
Shirebrook
(1)
6835407
100
SDI (Wigan
) Limited
Shirebrook
(1)
12579287
100
SDI (Wishaw) Limit
ed
Shirebrook
(1)
6656365
100
SDI (W
re
xham) Limited
Shirebrook
(1)
10915200
100
SDI (Wythenshaw
e) Limited
Shirebrook
(1)
9659156
100
SDI (Y
eovil) Limited
Shirebrook
(1)
12577947
100
SDI (Y
ork) Limited
Shirebrook
(1)
11331391
100
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
191
NAME
REGIS
TERED OFFICE ADDRESS
COMP
ANY NUMBER
PERCENT
A
GE OF
ISSUED SHARE
CAPIT
AL HELD
SDI 2300 Collins LLC
The Corporation T
rust Company, Corpor
ation T
rust Cent
er, 1209
Orange Street, W
ilmingt
on, New Castle County DE 19801,
United St
ates
6870031
100
SDI 735 Collins LL
C
The Corporation T
rust Company, Corpor
ation T
rust Cent
er, 1209
Orange Street, W
ilmingt
on, New Castle County DE 19801,
United St
ates
68700128
100
SDI A
viation Limited*
Shirebrook(1)
9633152
100
SDI Corrib Shopping Centre Limit
ed
HEA
TON HOUSE , ID
A BUSINESS P
ARK, WHITEST
OWN
,
T
ALL
A
GHT
, DUBLIN 24
, Ireland
715322
100
SDI Fitness (Bury St Edmunds) Limit
ed
Shirebrook
(1)
9038949
100
SDI Fitness (
Cheltenham) Limit
ed
Shirebrook
(1)
9039840
100
SDI Fitness (
Colchester) Limit
ed
Shirebrook
(1)
9039011
100
SDI Fitness (
Cro
ydon) Limit
ed
Shirebrook
(1)
9039243
100
SDI Fitness (D
W) Limit
ed
Shirebrook
(1)
12298794
100
SDI Fitness (Epsom) Limit
ed
Shirebrook
(1)
9039043
100
SDI Fitness (
Glasgow) Limit
ed
Shirebrook
(1)
9038811
100
SDI Fitness (
Guildford) Limit
ed
Shirebrook
(1)
9039269
100
SDI Fitness (Ho
ve) Limit
ed
Shirebrook
(1)
9039030
100
SDI Fitness (Huntingdon) Limit
ed
Shirebrook
(1)
9039881
100
SDI Fitness (K Heath) Limit
ed
Shirebrook
(1)
9039717
100
SDI Fitness (K L
ynn) Limit
ed
Shirebrook
(1)
9039847
100
SDI Fitness (K
ettering) Limit
ed
Shirebrook
(1)
9039852
100
SDI Fitness (Lincoln City) Limited
Shirebrook
(1)
9039331
100
SDI Fitness (Liv
erpool) Limited
Shirebrook
(1)
9039347
100
SDI Fitness (Manchest
er) Limited
Shirebrook
(1)
9039339
100
SDI Fitness (Milngavie) Limit
ed
Shirebrook
(1)
9039510
100
SDI Fitness (NI 1) Limit
ed
c/
o Kennedys, 10th Floor
, River House
, 48-60 High Street, Belfast,
Northern Ireland, B
T1 2BE, United Kingdom
NI672034
100
SDI Fitness (NI 2) Limit
ed
c/
o Kennedys, 10th Floor
, River House
, 48-60 High Street, Belfast,
Northern Ireland, B
T1 2BE, United Kingdom
NI672033
100
SDI Fitness (NI 3) Limit
ed
c/
o Kennedys, 10th Floor
, River House
, 48-60 High Street, Belfast,
Northern Ireland, B
T1 2BE, United Kingdom
NI672035
100
SDI Fitness (NI 4) Limit
ed
c/
o Kennedys, 10th Floor
, River House
, 48-60 High Street, Belfast,
Northern Ireland, B
T1 2BE, United Kingdom
NI672885
100
SDI Fitness (NI 5) Limit
ed
c/
o Kennedys, 10th Floor
, River House
, 48-60 High Street, Belfast,
Northern Ireland, B
T1 2BE, United Kingdom
NI672884
100
SDI Fitness (Northfield) Limit
ed
Shirebrook
(1)
90394
12
100
SDI Fitness (Rugb
y) Limited
Shirebrook
(1)
9039408
100
SDI Fitness (Sale) Limit
ed
Shirebrook
(1)
903940
5
100
SDI Fitness (Salisbury) Limit
ed
Shirebrook
(1)
9039429
100
SDI Fitness 1 Limit
ed
Shirebrook
(1)
12371923
100
SDI Fitness 10 Limit
ed
Shirebrook
(1)
12372368
100
SDI Fitness 11 Limit
ed
Shirebrook
(1)
12820382
100
SDI Fitness 12 Limit
ed
Shirebrook
(1)
12821058
100
SDI Fitness 13 Limit
ed
Shirebrook
(1)
12820585
100
SDI Fitness 14 Limit
ed
Shirebrook
(1)
12820516
100
SDI Fitness 15 Limit
ed
Shirebrook
(1)
12822245
100
SDI Fitness 16 Limit
ed
Shirebrook
(1)
12822564
100
SDI Fitness 17 Limit
ed
Shirebrook
(1)
12822692
100
SDI Fitness 18 Limit
ed
Shirebrook
(1)
12822794
100
SDI Fitness 19 Limit
ed
Shirebrook
(1)
12822856
100
SDI Fitness 2 Limit
ed
Shirebrook
(1)
12372165
100
SDI Fitness 20 Limit
ed
Shirebrook
(1)
12823728
100
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
192
NAME
REGIS
TERED OFFICE ADDRESS
COMP
ANY NUMBER
PERCENT
A
GE OF
ISSUED SHARE
CAPIT
AL HELD
SDI Fitness 21 Limit
ed
Shirebrook
(1)
12823572
100
SDI Fitness 22 Limit
ed
Shirebrook
(1)
12823510
100
SDI Fitness 23 Limit
ed
Shirebrook
(1)
12823786
100
SDI Fitness 2
4 Limited
Shirebrook
(1)
12823986
100
SDI Fitness 25 Limit
ed
Shirebrook
(1)
12823926
100
SDI Fitness 26 Limit
ed
Shirebrook
(1)
12825248
100
SDI Fitness 27 Limit
ed
Shirebrook
(1)
12830411
100
SDI Fitness 28 Limit
ed
Shirebrook
(1)
12825356
100
SDI Fitness 29 Limit
ed
Shirebrook
(1)
12825569
100
SDI Fitness 3 Limit
ed
Shirebrook
(1)
12372169
100
SDI Fitness 30 Limit
ed
Shirebrook
(1)
12825721
100
SDI Fitness 31 Limit
ed
Shirebrook
(1)
129307
43
100
SDI Fitness 32 Limit
ed
Shirebrook
(1)
12930838
100
SDI Fitness 33 Limit
ed
Shirebrook
(1)
12930826
100
SDI Fitness 34 Limit
ed
Shirebrook
(1)
12930829
100
SDI Fitness 35 Limit
ed
Shirebrook
(1)
12930938
100
SDI Fitness 36 Limit
ed
Shirebrook
(1)
12930954
100
SDI Fitness 37 Limit
ed
Shirebrook
(1)
12930944
100
SDI Fitness 38 Limit
ed
Shirebrook
(1)
09038724
100
SDI Fitness 39 Limit
ed
Shirebrook
(1)
090387
68
100
SDI Fitness 4 Limit
ed
Shirebrook
(1)
1237217
4
100
SDI Fitness 40 Limit
ed
Shirebrook
(1)
09038881
100
SDI Fitness 41 Limit
ed
Shirebrook
(1)
09038839
100
SDI Fitness 42 Limit
ed
Shirebrook
(1)
09038943
100
SDI Fitness 43 Limit
ed
Shirebrook
(1)
09039023
100
SDI Fitness 44 Limit
ed
Shirebrook
(1)
09039343
100
SDI Fitness 45 Limit
ed
Shirebrook
(1)
0903948
1
100
SDI Fitness 46 Limit
ed
Shirebrook
(1)
13030435
100
SDI Fitness 47 Limit
ed
Shirebrook
(1)
13030364
100
SDI Fitness 48 Limit
ed
Shirebrook
(1)
13030107
100
SDI Fitness 49 Limit
ed
Shirebrook
(1)
13030173
100
SDI Fitness 5 Limit
ed
Shirebrook
(1)
12372199
100
SDI Fitness 50 Limit
ed
Shirebrook
(1)
13030175
100
SDI Fitness 6 Limit
ed
Shirebrook
(1)
12372224
100
SDI Fitness 7 Limit
ed
Shirebrook
(1)
12372218
100
SDI Fitness 8 Limit
ed
Shirebrook
(1)
12372305
100
SDI Fitness 9 Limit
ed
Shirebrook
(1)
12372303
100
SDI F
our Limited
Shirebrook
(1)
9719779
100
SDI Gift Card LL
C
The Corporation T
rust Company, Corpor
ation T
rust Cent
er, 1209
Orange Street, W
ilmingt
on, New Castle County DE 19801,
United St
ates
S6773735
100
SDI Golf Limited
Shirebrook
(1)
9083512
100
SDI Holdings USA inc
The Corporation T
rust Company, Corpor
ation T
rust Cent
er, 1209
Orange Street, W
ilmingt
on, New Castle County DE 19801,
United St
ates
6651201
100
SDI Lifestyle Limit
ed
Shirebrook
(1)
82936
14
100
SDI Properties (USA) Inc.
Corporation Service Compan
y, 2 Office Park C
ourt, Suite 103
Columbia
535872
100
SDI Properties (W
iagn) Limited
Shirebrook
(1)
6836522
100
SDI Property (Europe) B
.
V
.
V
an Konijnenburgw
eg 45, 4672PL Ber
gen op Zoom Netherlands
6904
2594
100
SDI Property (E
vans C
y
cles) Limited
Shirebrook
(1)
11646219
100
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
193
NAME
REGIS
TERED OFFICE ADDRESS
COMP
ANY NUMBER
PERCENT
A
GE OF
ISSUED SHARE
CAPIT
AL HELD
SDI Property Limit
ed*
Shirebrook
(1)
2
7
6
74
9
3
100
SDI Property US Inc
The Corporation T
rust Company, Corpor
ation T
rust Cent
er, 1209
Orange Street, W
ilmingt
on, New Castle County DE 19801,
United St
ates
6870002
4
100
SDI Property US Limit
ed
Shirebrook
(1)
11323420
100
SDI Retail Services Limit
ed
Shirebrook
(1)
8143303
100
SDI Sport London Limited
Shirebrook
(1)
984876
7
100
SDI Sports (Stok
e) Limited
Shirebrook
(1)
10163722
100
SDI Sports Group Americas LL
C
The Corporation T
rust Company, Corpor
ation T
rust Cent
er, 1209
Orange Street, W
ilmingt
on, New Castle County DE 19801,
United St
ates
2047393
100
SDI Stor
es LLC
The Corporation T
rust Company, Corpor
ation T
rust Cent
er, 1209
Orange Street, W
ilmingt
on, New Castle County DE 19801,
United St
ates
1240332
100
SDI V
entures LLC
The Corporation T
rust Company, Corpor
ation T
rust Cent
er, 1209
Orange Street, W
ilmingt
on, New Castle County DE 19801,
United St
ates
6870023
100
SDI Property (Bitburg) B
.
V
.
Netherlands
8249
5807
100
SDI.com F
itness Parent Limit
ed*
Shirebrook
(1)
908245
4
100
SDIL S.A.
Parc Industriel, A
venue Ernest, Solvay 29 1480 Saint
es, Belgium
810
.
198.636
100
SIA SIG Logistics
A. Deglava str 50 L
V
-
1-
35 Riga Latvia
40203110
76
60
SIA Sportland
A. Deglava str 50 L
V
-
1-
35 Riga Latvia
4000353096
1
60
SIA Sportsdirect
.com
A. Deglava str 50 L
V
-
1-
35 Riga Latvia
40103932873
60
Sienna Dining Limited
Shirebrook
(1)
13629737
100
Ski and Outdoor W
arehouse Limited
Shirebrook
(1)
2917223
100
Skins IP Limited
Shirebrook
(1)
12168568
100
Slazenger Carlt
on (Holdings) Limited
Shirebrook
(1)
1046305
1
100
Slazengers A
ustralia Limited
Shirebrook
(1)
9217319
100
Slazengers Limit
ed
Shirebrook
(1)
116000
100
Smith & Brooks Limit
ed
Shirebrook
(1)
2073720
100
Smith And Brooks Group Limit
ed
Shirebrook
(1)
4079331
100
Smith And Brooks Holdings Limit
ed
Shirebrook
(1)
4983573
100
SNÖ Sport V
ertriebs GmbH
Flugplatzstraße 30
, 4600, W
els Austria
272671 m
100
Sofa.com Bidco Limit
ed
Shirebrook
(1)
9341955
100
Sofa.com B
V
Flaas 4 V 6, Den Dungen, 5275HH, Netherlands
17196766
100
Sofa.com Lt
d
Shirebrook
(1)
5222498
100
Sondico IP Limited
Shirebrook
(1)
6546
121
100
Sport Eybl & Sports Experts Logistikbetriebs
GmbH
Flugplatzstraße 30
, 4600, W
els Austria
FN 96024 m
100
Sport Eybl Holding GmbH
Flugplatzstraße 30
, 4600, W
els Austria
180095 x
100
Sportdir
ect.com China Pt
e Limited
C25, 3rd Floor
, ASEAN Building, 690 M
inzhi A
venue
, Xinniu
Community, M
inzhi Street, Longhua District, Shenzhen, China
91440300579987
503D
100
Sportland Eestie A.S.
Parnu mnt 139c K
esklinna, T
allinn Estonia 11317
10677712
60
Sportland International Gr
oup A.S.
Parnu mnt 139c K
esklinna, T
allinn Estonia 11317
1099319
5
60
Sports Direct (Singapore) Pt
e.
Ltd
6 Eu T
ong Sen Street, #11-09
, The Central, 05
9817
, Singapore
2020045
42Z
51
Sports Direct Holdings Limit
ed*
Shirebrook
(1)
6464317
100
Sports Direct Int
ernational Holdings Limited*
Shirebrook
(1)
6027131
100
Sports Direct Int
ernational Limited
Shirebrook
(1)
11775757
100
Sports Direct Malaysia Sdn. Bhd.
Lev
el 15-2. Bangunan F
aber Imperial Court Jalan Sult
an Ismail
52200 Kuala Lumpur Malaysia
925116-M
51
Sports W
orld Int
ernational Limited
Shirebrook
(1)
6531266
100
Sports W
orld The Netherlands B.
V
.
V
an Konijenburgw
eg 45, 46
12 PL Bergen op z
oom, Netherlands
34056291
100
Sportsdirect (Iceland) ehf
Skogarlind 2, 201, K
opav
ogur, Iceland
63011217
60
100
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
194
NAME
REGIS
TERED OFFICE ADDRESS
COMP
ANY NUMBER
PERCENT
A
GE OF
ISSUED SHARE
CAPIT
AL HELD
Sportsdirect
.com (Asia) Ltd
Unit 1903B & 1905, Ex
change T
ower
,, 33 W
ang Chiu Road,
Ko
wloon Bay, K
owloon, Hong K
ong
1216339
100
Sportsdirect
.com (Shanghai) Limited
Room 315, 3r
d Floor Building 2, No 239 Gang’ao Road, China
(Shanghai) Pilot Fr
ee Zone, Shanghai, China
91310115MA
1K463A6B
95
Sportsdirect
.com (T
aiwan) Limit
ed
17F
.-5, No.500
, Shizheng Rd., , Xitun District, 40757
, T
aiwan
827706
19
95
Sportsdirect
.com Austria GmbH
Flugplatzstraße 30
, 4600, W
els Austria
309738 y
100
Sportsdirect
.com Belgium S.A.
Parc Industriel, A
venue Ernest, Solvay 29 1480 Saint
es, Belgium
416.268.
471
100
Sportsdirect
.com C
yprus Limited
Miltiades Stylianou 34B, Shop 2, 8577 T
ala, Paphos, Cyprus
HE 230
340
100
Sportsdirect
.com Czech R
epublic s.r
.o.
Prague 1 - No
ve Mest
o, Na Porici 10
79/3a, 100 00,
Czech Republic
242689
33
100
Sportsdirect
.com Fitness Limit
ed
Shirebrook
(1)
9028577
100
Sportsdirect
.com Fr
ance
Zac des Br
ateaux, Rue des Brat
eaux, 9100, V
illabe, Fr
ance
FR27379062813
100
Sportsdirect
.com Hungary Kft
H-
1053 Budapest, Karolyi Mihal
y utca 12, Hungary
01-09-986824
100
Sportsdirect
.com Immobilien GmbH
Flugplatzstraße 30
, 4600, W
els Austria
10415
1 p
100
Sportsdirect
.com Malta Limit
ed
Bre
wery Str
eet, Zone 3 Central Business District Birkirk
ara CBD
3040 Malta
C99278
100
Sportsdirect
.com OU
Parnu mnt 139c, K
esklinna, T
allinn, 11318, Estonia
1285837
100
Sportsdirect
.com Poland S.
P
.Z.oo
5 Składow
a Street, 6
1-888 Po
znań,, Poland , 00-872, W
arsaw
452610
100
Sportsdirect
.com Pty Ltd
c/
o Norton Rose Fulbright, L
11, 485 Bourke Street, Melbourne VIC
3000, Austr
alia
603 187 319
100
Sportsdirect
.com Ret
ail (Europe) S.A.*
Parc Industriel, A
venue Ernest, Solvay 29 1480 Saint
es, Belgium
458883046
100
Sportsdirect
.com Ret
ail Limited*
Shirebrook
(1)
3406347
100
Sportsdirect
.com S.L.
U
. Spain
Centro Comer
cial Puerto V
enecia, Local 84, T
ravesía de los
Jardines Reales nº 7
, 50021, Zarago
za , Spain
B-86567880
100
Sportsdirect
.com Slo
vakia s.r
.o.
Vysok
a 2/B, 81106
, Bratislav
a, Slov
akia
47 240 458
100
Sportsdirect
.com SL
VN d.o.o
.
Planjava 4
, 1236 T
rzin, Slo
venia
1198157000
100
Sportsdirect
.com Switz
erland A.
G.
Switz
erland CHE-
Zeughausgasse 27
, 3011 Bern, Switz
erland
331.683.
991
100
Sportsdirect
.com Vienna North GmbH
W
els, Flugplatzstrabe 30
FN104486G
100
SSG Sport GmbH (SSD)
V
ornholzstr
. 48, , 94036
, Passau, German
y
HRB 7134
100
Sterling Resour
ces (Holdings) Limited
Shirebrook
(1)
4651701
100
Sterling Resour
ces Limited
Shirebrook
(1)
1413254
100
Stirlings (Argyle Str
eet) Limited
Martin House, 184 Ingram Str
eet, Glasgo
w, Scotland, G
1 1DN
SC088
108
100
Straub Corporat
ion Limited
Shirebrook
(1)
3003584
100
Studio Asia Limited
Unit 1506, T
ower A, F
inancial Street Hailun Centre No
.440
, Hailun
Road, Shanghai, PRC
9131000MA
1G5FKRX
1
100
Studio Financing Limit
ed
8th Floor 100 Bishopsgat
e, London, United K
ingdom, EC2N 4A
G
11644219
(3)
Studio Online Limited
Church Bridge House, Henry Str
eet, Accringt
on, United Kingdom,
BB5 4EE
3994833
100
Studio Retail Limit
ed
Church Bridge House, Henry Str
eet, Accringt
on, United Kingdom,
BB5 4EE
718151
100
Suplay Inv
estments S.l.
C.
C.Puerto V
enecia, local 84, T
rav
. Jardines Reales, 7
, 50021
Zar
agoza, Spain
B885426
91
100
SwImmo Eupen SPRL
Parc Industriel, A
venue Ernest, Solvay 29 1480 Saint
es, Belgium
878673906
100
T
able T
ennis Pro Europe Lt
d
Shirebrook
(1)
5003853
100
The Antigua Group Inc
3773 Ho
war
d Huges Pkway
, STE 500S Las v
egas, Nev
ada, USA
89169-601
4
07346
79-4
100
THE FLANNELS GROUP (R
OI) LIMITED
HEA
TON HOUSE , ID
A BUSINESS P
ARK, WHITEST
OWN
,
T
ALL
A
GHT
, DUBLIN 24
, Ireland
707
468
100
The Flannels Group Limited
Shirebrook
(1)
2318510
100
The T
rademark Licensing Compan
y Limited
Shirebrook
(1)
4477829
100
T
otal Est
ates Limit
ed
Shirebrook
(1)
4958214
100
T
ri Y
eovil UK Limited
Shirebrook
(1)
10680690
100
UAB SDI (
Gedimino) L
T
Seimyniskiu g. 3
, Vilnius, Lithuania
135039836
100
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
195
NAME
REGIS
TERED OFFICE ADDRESS
COMP
ANY NUMBER
PERCENT
A
GE OF
ISSUED SHARE
CAPIT
AL HELD
UAB Sportland L
T
Seimyniskiu g. 3
, Vilnius, Lithuania
135039836
51
UAB Sports
direct.
com
Seimyniskiu g. 3
, Vilnius, Lithuania
3041556
13
100
Univers
al Cy
cles Limit
ed
Shirebrook
(1)
1339667
100
USA Pro IP Limit
ed
Shirebrook
(1)
6497914
100
USC IP Limited
Shirebrook
(1)
6836808
100
V
an Mildert (Lifestyle) Limited
Shirebrook
(1)
8319959
100
V
oodoo Dolls Brand Limited
Shirebrook
(1)
5323305
100
W
areshop2 Limited
Shirebrook
(1)
9870840
100
W
arrnambool *
Heaton House , ID
A Business Park, Whit
esto
wn, T
allaght, Dublin
24
, Ireland
387014
100
W
aterline Angling Products Limited
Shirebrook
(1)
2
6
9
6
3
74
100
W
est Coast Capit
al (HOFCO
) Limited
15 Atholl Crescent, E
dinburgh, EH3 8HA
SC437
614
100
W
estminst
er Manufacturing LL
C
2 Office Park Court , Suit
e 103, Coumbia SC 29233 USA
44358
100
Y
eomans Outdoors Limit
ed
Shirebrook
(1)
8058714
100
Y
ubel Int
ernational T
rade Co Limit
ed
Room 5C, No56
1 Ouy
ang Road, Hongkou District, Shanghai
91310000MA
1G5FKRX
1
100
Zapar
oh SPz.o.
o
ul. Żernick
a 22, Robak
ow
o, 62-0
23 Gądki, Poland
KRS 0000459435
100
(1)
Unit A, Brook Park East, Shir
ebrook, NG20 8RY
(2)
Unity House, T
elford Road, Basingst
oke, Hampshire
, RG21 6
Y
J
(3)
A controlled entity other than by share o
wnership
*
Direct shareholdings held by F
rasers Group Plc
Fr
asers Group Plc int
ends t
o pro
vide a parent
al guarant
ee for the f
ollo
wing United K
ingdom incorporat
ed subsidiaries
thus entitling them t
o ex
emption fr
om statut
ory audit under section 479
A of the Companies Act 2006.
COMP
ANY NAME
COMP
ANY NUMBER
COMP
ANY NAME
COMP
ANY NUMBER
Alpha Dev
elopments Stockport Limit
ed
12662564
SDI (Manchester Cheetham Hill) Limit
ed
10100969
Brands Inc Limit
ed
03585719
SDI (Manchester Dent
on) Limited
09127295
Hot T
una IP Limited
06836792
SDI (Market Road) Limit
ed
107992
47
SD Equestrian Limit
ed
086927
80
SDI (Middlesbrough) Limit
ed
10081909
SD Outdoor Limit
ed
08560260
SDI (Nassau Street) Limit
ed
11227964
SDI (Aberdeen) Limit
ed
0851259
2
SDI (Neath) Limited
07853548
SDI (Aberdeen 2) Limit
ed
12579371
SDI (New
ark) Limited
07853470
SDI (Aberwystwyth) Limit
ed
02789996
SDI (New
castle) Limited
09127286
SDI (Aintree) Limit
ed
0335246
2
SDI (Newport) Limit
ed
08679118
SDI (Ashford) Limit
ed
07848460
SDI (Newport IO
W) Limit
ed
12578944
SDI (Ashington) Limit
ed
07849231
SDI (New
quay) Limited
10089800
SDI (A
yr) Limited
05528267
SDI (Newt
on Abbot) Limited
06836666
SDI (Bangor) Limited
05529705
SDI (Newt
ownabbe
y) Limited
09127266
SDI (Barro
w In Furness) Limit
ed
0785157
4
SDI (Northampton) Limit
ed
07852272
SDI (Belfast) Limit
ed
09872471
SDI (Northwich) Limit
ed
05656295
SDI (Berwick) Limited
02739957
SDI (Nottingham) Limited
10100609
SDI (Betws-
Y-Coed) Limit
ed
06836673
SDI (Nuneaton) Limit
ed
078522
49
SDI (Birkenhead) Limit
ed
07849198
SDI (Os
westry) Limit
ed
07852363
SDI (Bishop Auckland) Limit
ed
030042
46
SDI (Oxf
ord Street) Limit
ed
10046080
SDI (Boucher Road) Limited
13808700
SDI (Penzance) Limit
ed
07852297
SDI (Bridgwat
er) Limited
0785206
1
SDI (Peterlee) Limit
ed
07852
401
SDI (Brighton) Limit
ed
12579780
SDI (Plymouth Flannels) Limited
09127387
SDI (Brixton) Limit
ed
09127300
SDI (Plymouth) Limit
ed
09470
468
SDI (Burton) Limit
ed
08495632
SDI (Portsmouth) Limit
ed
12579294
SDI (Car
diff Flannels) Limited
10177359
SDI (Prest
on) Limited
10915199
SDI (Car
diff QS) Limited
12578045
SDI (Propco 75) Limit
ed
11577256
SDI (Car
diff QS 2) Limited
11227321
SDI (Propco 100) Limit
ed
11732700
SDI (Carlisle) Limit
ed
07851959
SDI (Propco 119) Limit
ed
12332862
SDI (Chatham) Limit
ed
06836679
SDI (Propco 139) Limit
ed
13808689
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
196
COMP
ANY NAME
COMP
ANY NUMBER
COMP
ANY NAME
COMP
ANY NUMBER
SDI (Cheshunt 2) Limit
ed
11775717
SDI (Ramsgat
e) Limited
07852250
SDI (Cheshunt) Limit
ed
11775599
SDI (Reading) Limited
10422164
SDI (Clact
on) Limited
07852078
SDI (Redcar) Limited
02731452
SDI (Colchest
er) Limited
05632790
SDI (Rolle St) Limited
0785266
9
SDI (Corb
y) Limit
ed
10885672
SDI (Romfor
d) Limited
10071547
SDI (Cork) Limit
ed
117757
63
SDI (Salisbury) Limited
10107572
SDI (Co
v
entry) Limited
09680128
SDI (Scarborough) Limit
ed
06328463
SDI (Darlington) Limit
ed
10915193
SDI (Scunthorpe) Limited
07852055
SDI (Derby) Limit
ed
09310031
SDI (Scunthorpe Parishes Centre) Limit
ed
11730442
SDI (Derry) Limited
NI653340
SDI (Southampton 2) Limit
ed
09665889
SDI (Doncaster) Limit
ed
09888670
SDI (Southampton) Limit
ed
08512480
SDI (Dundee) Limited
09702004
SDI (Southport) Limited
09888806
SDI (Dunfermline) Limit
ed
08483679
SDI (St Aust
ell) Limited
07852284
SDI (East Ham) Limit
ed
09810378
SDI (St Helens) Limited
07852281
SDI (East Kilbride) Limit
ed
06656368
SDI (Staff
ord) Limited
08568681
SDI (Edinburgh
) Limited
10100990
SDI (Staff
ord Riverside) Limit
ed
08972499
SDI (Enfield) Limited
10086209
SDI (Staines) Limit
ed
11646482
SDI (Fulham) Limit
ed
07852037
SDI (Stockport) Limit
ed
06372181
SDI (Gainsbor
ough) Limited
06338907
SDI (Stok
e Longton) Limit
ed
07853877
SDI (Galashiels) Limit
ed
07852091
SDI (Stok
e Newingt
on) Limited
07852207
SDI (Glas
gow Argyle St) Limit
ed
11227937
SDI (Strabane) Limit
ed
09890243
SDI (Glas
gow F
ort) Limited
0986
1504
SDI (Streatham) Limit
ed
10066335
SDI (Glas
gow F
rasers) Limited
11531596
SDI (Strood) Limit
ed
07852251
SDI (Glas
gow Ingram Str
eet) Limited
09925519
SDI (Sunderland) Limited
08755347
SDI (Gloucest
er) Limited
07852067
SDI (Sutton) Limit
ed
11228011
SDI (Gr
eat Y
armouth) Limited
11732687
SDI (Swindon) Limit
ed
09888662
SDI (Hanley) Limit
ed
11228017
SDI (T
aunton) Limited
07852191
SDI (Hastings) Limited
08625893
SDI (Thanet) Limited
12579034
SDI (Heref
ord) Limited
09888642
SDI (The House Y
arm) Limited
12332871
SDI (Hofco
) Limited
08319960
SDI (Thurrock) Limited
100897
43
SDI (Hoh Holdings) Limited
1016
1592
SDI (T
ro
wbridge) Limited
1235566
1
SDI (Hounslow) Limit
ed
10086218
SDI (Uxbridge 2) Limited
09127316
SDI (Hull) Limited
09638564
SDI (Uxbridge) Limited
10177276
SDI (Ipswich) Limit
ed
09788411
SDI (W
akefield) Limited
08483711
SDI (Ipswich 2) Limit
ed
12578948
SDI (W
alsall) Limited
07852289
SDI (Isle Of Man) Limited
099017
45
SDI (W
atford) Limited
06328505
SDI (Jersey Holding) Limit
ed
10177028
SDI (Widnes) Limit
ed
08576472
SDI (K L
ynn) Limited
1007307
6
SDI (Wigan
) Limited
12579287
SDI (Keighle
y) Limited
06260239
SDI (Wishaw) Limit
ed
06656365
SDI (Kendal) Limit
ed
06338918
SDI (W
re
xham) Limited
10915200
SDI (Kentish T
own) Limit
ed
09901702
SDI (Wythenshaw
e) Limited
09659156
SDI (Kidderminst
er) Limited
09203731
SDI (Y
eovil) Limited
12577947
SDI (Kilmarnock) Limit
ed
07853433
SDI (Y
ork) Limited
11331391
SDI (Kingst
on) Limited
10915209
SDI Corrib Shopping Centre Limit
ed
ROI (715322)
SDI (Kirk
caldy) Limited
07852097
SDI F
our Limited
09719779
SDI (Leeds) Limited
09293515
SDI Golf Limited
09083512
SDI (Leeds 2) Limited
13808640
SDI Properties (W
igan) Limited
06836522
SDI (Leicester) Limit
ed
09127170
SDI Property Limit
ed
0
2
7
6
74
9
3
SDI (Liverpool) Limit
ed
09888734
SDI Sport London Limited
0984876
7
SDI (Low
esto
ft) Limited
07852265
SDI Sports (Stok
e) Limited
10163722
SDI (Lsl Holdings) Limited
1016
1824
Stirlings (Argyle Str
eet) Limited
SC088108
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
197
COMP
ANY B
AL
ANCE SHEET
at 24 April 2022
Note
As at
24 April 2022
As at
25 April 2021
(£’m)
(£’m)
FIXED ASSETS
Property
, Plant and Equipment
3
6
.9
-
Inv
estments
2
1,443.6
1
,49
4.9
CURRENT ASSETS
Debtors
5
512.8
162.
9
Cash at bank and in hand
1.8
1
6
.1
514.
6
179.0
Credit
ors: amounts falling due within one year
6
(945.7)
(609.
0)
NET CURRENT LIABILITIES
(431.
1)
(430.0)
Pro
visions
8
(3.0)
-
Deferr
ed T
ax Liability
7
(6.1)
-
NET ASSETS
1,010.3
1,064.
9
CAPIT
AL AND RESERVES
Called up share capit
al
9
6
4.1
6
4.1
Share premium
8
74
.
3
8
74
.
3
T
reasury shar
e reserv
e
(488.
9)
(295.7)
Permanent contribution t
o capital
0.1
0
.1
Capital r
edemption reserv
e
8.0
8
.0
Own share reserv
e
(66.8)
(66.7)
Share based payment reserv
e
5.8
0.8
Profit and Loss account
61
3.7
480.0
SHAREHOLDERS' FUNDS
1,010.3
1,064.
9
Fr
asers Group Plc r
eported a pr
ofit aft
er tax
ation f
or the 52 weeks ended 2
4 April 2022 of £14
1.7
m
(FY21: a pr
ofit of £231.8m).
The accompanying accounting policies and not
es form part of these F
inancial St
atements.
The Financial St
atements w
ere appro
v
ed b
y the Board on 20 Sept
ember 2022 and w
ere signed on its behalf b
y:
Chris W
ootton
Chief Financial Officer
Company number: 06
035106
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
198
COMP
ANY ST
A
TEMENT OF
CHANGES IN E
QUIT
Y
F
or the 52 w
eeks ended 24 April 2022
Called
up share
capital
Share
premium
account
T
reasury
share
reserv
e
Permanent
contribution
to capit
al
Capital
redemption
reserv
e
Own
share
reserv
e
Share based
payment
reserv
e
Profit
& loss
account
T
otal
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
As at 26 April 2020
6
4.1
87
4.3
(295
.7)
0
.1
8
.0
(67
.0)
-
17
0.9
754.7
Profit for the financial period
-
-
-
-
-
-
-
231.8
231.8
F
air value adjustment in r
espect of
long-t
erm financial assets
- recognised
-
-
-
-
-
-
-
77.3
77
.3
Share scheme
-
-
-
-
-
0.
3
0.8
-
1
.1
As at 25 April 2021
6
4.1
87
4.3
(295
.7)
0
.1
8
.0
(66.7)
0.8
4
80.0
1,064.9
Profit for the financial period
-
-
-
-
-
-
-
141.
7
141.
7
F
air value adjustment in r
espect of
long-t
erm financial assets
- recognised
-
-
-
-
-
-
-
(8.0)
(8.0)
Share scheme
-
-
-
-
-
-
5.0
-
5.0
Share repur
chase
-
-
(193.2)
-
-
(0
.1)
-
-
(193.3)
As at 24 April 2022
6
4.1
87
4.3
(488.9)
0.1
8.0
(66.8)
5.8
61
3.
7
1,010.3
The share pr
emium account is used to r
ecord the e
x
cess proceeds o
v
er nominal v
alue on the issue of shares.
The permanent contribution to capit
al relat
es t
o a cash payment of £50
,000 t
o the Compan
y on 8 F
ebruary
2007 under a deed of capit
al contribution. The capital r
edemption reserv
e ar
ose on the redemption of the
Company’s r
edeemable pre
ference shar
es of 10p each at par on 2 Mar
ch 2007
. The own shares and tr
easury
reserv
es r
epresent the cost of shar
es in Fr
asers Group Plc pur
chased in the market and held b
y F
rasers Gr
oup
Plc Emplo
yee Bene
fit T
rust to satisfy options under the Gr
oup
’s Share Scheme
. F
or further informat
ion see note
26 in the Group Not
es t
o the financial stat
ements.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
199
NO
TES T
O THE COMP
ANY
FINANCIAL ST
A
TEMENTS
F
or the 52 w
eeks ended 24 April 2022
1.
A
CCOUNTING POLICIES
Accounting P
olicies
Fr
asers Group Plc (the “
Company”) (
Compan
y number:
06035106) is a compan
y incorpor
ated and domiciled in
the United K
ingdom, its shares ar
e listed on the London
Stock Ex
change. The regist
ered office is Unit A, Br
ook
Park East, Shir
ebrook, NG20 8R
Y
.
These financial stat
ements hav
e been prepar
ed in
compliance with FRS 102 “The Financial Reporting
Standar
d applicable in the UK and Republic of
Ireland” (“FRS 102”) and the r
equirements of the
Companies Act 2006.
The financial stat
ements are pr
epared in st
erling, which
is the functional currency of the Compan
y
. Monetary
amounts in these financial stat
ements ar
e rounded t
o
the nearest £0
.
1m.
These accounts have been pr
epared in accor
dance with
applicable United K
ingdom accounting st
andards. A
summary of the mat
erial accounting policies adopted
are described belo
w
.
Basis Of Accounting
The accounts have been pr
epared under the hist
orical
cost basis ex
cept for the modification to a f
air v
alue
basis for cert
ain financial instruments as specified in the
accounting policies belo
w
.
These financial stat
ements for the period ended 2
4 April
2022 are pr
epared in accor
dance with FRS 102, The
Financial R
eporting Standar
d applicable in the UK and
Republic of Ir
eland.
As permitted b
y Section 408 of the Companies A
ct
2006, a pro
fit and loss account of the Company is not
present
ed. The Company’s pr
ofit aft
er tax
ation for the
52-w
eek period ended 24 April 2022 w
as £141.7
m
(FY21: £231.8m).
As permitted b
y FRS 102 the Compan
y has t
aken
adv
antage of the disclosur
e ex
emptions available
under that standar
d in relation t
o financial instruments,
present
ation of a cash flo
w stat
ement, shar
e-based
payments, the aggregat
e remuner
ation of k
ey
management personnel and relat
ed party trans
actions
with other wholly-o
wned members of the Group. Wher
e
requir
ed, equiv
alent disclosures are giv
en in the Group
accounts of Fr
asers Group Plc.
Principal Activity
The principal activity of Fr
asers Group Plc is that of an
inv
estment holding compan
y
.
In
v
estments
Fix
ed asset investments in subsidiaries ar
e account
ed
for at cost less pr
ovision f
or impairment. In the Group
accounts associates ar
e account
ed for under the equity
method b
y which the Group
’s investment is initiall
y
recor
ded at cost and subsequently adjust
ed to r
eflect
the Group
’s share of the net assets of the associat
e.
As this is not permitted under FRS 102 associat
es ar
e
accounted f
or at cost less pro
vision for impairment
. An
assessment is made at each reporting dat
e of whether
there ar
e indications that the Compan
y’s inv
estment
in subsidiaries or associates may be impair
ed or that
an impairment loss pre
viously r
ecognised has fully or
partially r
ev
ersed. If such indications e
xist, the Company
estimat
es the reco
v
erable amount of the asset. Shortf
alls
betw
een the carrying value of the in
v
estment and their
reco
v
erable amounts, being the higher of f
air value
less costs to sell and v
alue-in-use, are recognised as
impairment losses. Impairment losses are r
ecognised in
profit or loss.
The Company has f
ollow
ed the requirements of IFRS 9
for list
ed inv
estments, as permitt
ed by FRS 10
2 Section
12. The Company has made the irr
ev
ocable election
av
ailable under IFRS 9 to account f
or the inv
estments
at fair v
alue through the other compr
ehensiv
e income
(FV
OCI).
F
air v
alue mo
v
ements through other
comprehensiv
e income
Elections are made on an instrument
-b
y-instrument
basis to account f
or mo
vements in select
ed instruments
through other compr
ehensiv
e income. The Compan
y
has elected t
o account for mo
vements in its list
ed
inv
estments thr
ough other comprehensiv
e income.
These inv
estments are not subject t
o impairment and
gains and losses are not r
ecycled t
o the pr
ofit and loss
account on the disposal of list
ed inv
estments. Dividend
income is recognised in the pr
ofit and loss account.
This treatment does not apply t
o inv
estments in
the Company’s subsidiaries and associat
es wher
e
mo
vements ar
e recognised in the pr
ofit and loss account
and inv
estments ar
e subject to impairment.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
200
Associat
es
An entity is treat
ed as an associat
ed undertaking wher
e
the Company e
x
er
cises significant influence in that it has
the po
wer t
o participat
e in the operating and financial
policy decisions.
Financial Assets
Financial assets, other than in
v
estments and derivativ
es,
are initiall
y measured at tr
ansaction price (including
trans
action costs) and subsequently held at cost, less
any impairment
. Pro
vision for impairment is est
ablished
when there is objectiv
e e
vidence that the Company will
not be able to collect amounts due accor
ding t
o the
original terms of the r
eceiv
able. The Compan
y applies
a consistent account
ing policy as the Group in t
erms of
impairment of financial assets and the recognition of
expect
ed cr
edit losses.
Financial Liabilities
Financial liabilities ar
e classified according t
o the
substance of the financial instrument’s contr
actual
obligations, rather than the financial instrument’s
legal form. F
inancial liabilities, ex
cluding derivativ
es,
are initiall
y measured at tr
ansaction price (af
ter
deducting trans
action costs) and subsequently held
at amortised cost.
Emplo
y
ee Benefit T
rust
An Emplo
yee Bene
fit T
rust has been established
for the purposes of s
atisfying certain shar
e based
aw
ards. The Gr
oup has ‘
de facto
’ control ov
er the
special purpose entity
.
The cost of shares acquir
ed by the Sports Dir
ect
Emplo
yee Bene
fit T
rust is recognised within ‘
Own share
reserv
e
’ in equity
.
Def
erred T
ax
ation
Deferr
ed tax is pr
o
vided for on a full pr
ovision basis on
all timing differ
ences, which hav
e arisen but not re
versed
at the balance sheet date
. A def
erred t
ax asset is not
recognised t
o the e
xtent that the tr
ansfer of economic
benefit in the future is mor
e unlik
ely than not.
Deferr
ed tax is calculat
ed on a non-discount
ed basis at
the tax r
at
es that are e
xpected t
o apply in the periods in
which timing differ
ences re
v
erse, based on t
ax rat
es and
laws enact
ed or substantiv
ely enact
ed at the balance
sheet date
.
F
or
eign Currencies
T
ransactions in f
oreign curr
encies are initially r
ecorded
in the Company’s funct
ional currency b
y applying the
spot ex
change rate ruling at the dat
e of the tr
ansaction.
Monetary assets and liabilities denominat
ed in f
oreign
currencies ar
e retr
anslated at the r
ate of e
x
change ruling
at the balance sheet date
. All differ
ences are t
ak
en to
the profit and loss account
. Non-monetary it
ems that
are measur
ed in terms of hist
orical cost in a for
eign
currency ar
e not retr
anslated.
Dividends
Dividends on the Company’s or
dinary shares ar
e
recognised as a liability in the Compan
y’s Financial
Stat
ements, and as a deduction fr
om equity, in the
period in which the dividends are declar
ed. Where such
final dividends are pr
oposed subject to the appr
o
val of
the Company’s shar
eholders, the final dividends are onl
y
declared once shar
eholder appro
v
al has been obtained.
Equity Instruments
An equity instrument is any contr
act that evidences
a residual int
erest in the assets of the C
ompany aft
er
deducting all of its liabilities. E
quity instruments issued
b
y the Company
, with the e
x
ception of those account
ed
for via mer
ger relief av
ailable under Section 6
12 of the
Companies Act 2006, ar
e recor
ded at the proceeds
receiv
ed, net of an
y direct issue costs.
Income F
rom Gr
oup Undertakings
Income from Gr
oup undertakings is r
ecognised when
qualifying consideration is r
eceived fr
om the Group
undertaking
.
Relat
ed Party T
ransactions
The Company has t
ak
en advant
age of the e
x
emption
contained in FRS 10
2 and has theref
ore not disclosed
trans
actions or balances with wholly-o
wned
subsidiaries which form part of the Gr
oup. See not
e
35 of the Group F
inancial Stat
ements for further
details of r
elat
ed party transact
ions.
Share-Based Payments
The Company issues fr
om time t
o time equity-settled
share-based payments t
o cert
ain Direct
ors and
emplo
yees of the C
ompany and its subsidiaries.
These are measur
ed at fair v
alue at the date of gr
ant,
which is expensed t
o pr
ofit and loss on a straight
-line
basis o
ver the v
esting period, with the corr
esponding
credit going t
o equity
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
201
Non-market v
esting conditions are not tak
en int
o
account in determining gr
ant dat
e fair v
alue. Inst
ead,
they ar
e t
aken int
o account b
y adjusting the number
of equity instruments to v
est. At the end of each
reporting period the Compan
y r
evises its estimat
es of
the number of options that are e
xpect
ed to v
est based
on the non-market v
esting and service conditions. Any
re
visions, if any
, are recognised in pro
fit and loss with an
adjustment to equity
.
F
air v
alue is calculated using an adjust
ed form of the
Black
-Scholes model which includes a Mont
e Carlo
simulation model that t
akes int
o account the e
x
ercise
price, the t
erm of the option, the impact of dilution
(where mat
erial), the share price at gr
ant dat
e and
the expect
ed price v
olatility of the underlying shar
e,
the expect
ed dividend yield, and the risk
-free int
er
est
rat
e for the t
erm of the scheme
. The expect
ed staff
numbers used in the model has been adjusted, based
on management’s best estimate
, for the eff
ects
of non-tr
ansfer
ability, e
x
ercise r
estrictions, and
behavioural consider
ations.
F
or cash-settled share-based payment tr
ansactions,
the Company measur
es the services receiv
ed and the
liability incurred at the f
air value of the liability
. Until
the liability is settled, the Company r
emeasures the f
air
v
alue of the liability at the end of each reporting period
and at the date of settlement, with an
y changes in fair
v
alue recognised in the Income St
atement f
or the period.
The credit for the shar
e-based payment charge
does not equal the charge per the pr
ofit and loss
as it ex
cludes amounts recognised in the balance
sheet in relation t
o the e
xpected national insur
ance
contributions for the shar
es.
Critical Account
ing Estimat
es
and Judgements
In the application of the Compan
y’s accounting
policies, the Direct
ors are r
equired t
o mak
e judgements,
estimat
es and assumptions about the carrying amount
of assets and liabilities that are not r
eadily appar
ent
from other sour
ces. The estimates and associat
ed
assumptions are based on hist
orical e
xperience and
other fact
ors that are consider
ed to be r
ele
vant
. Actual
results may diff
er from these estimat
es.
The estimates and underl
ying assumptions are r
evie
w
ed
on an ongoing basis. Re
visions t
o accounting estimates
are r
ecognised in the period in which the estimate is
re
vised, if the re
vision affects onl
y that period, or in the
period of the re
vision and future periods
.
The estimates and assumptions which hav
e a significant
risk of causing a material adjustment t
o the carrying
amount of assets and liabilities are outlined belo
w
.
Control and Significant Influence Ov
er
Cert
ain Entities
The Company holds gr
eater than 20% of the v
oting
rights of Studio Ret
ail Group plc and the Mulberry Gr
oup
plc. The Company e
x
ercises the s
ame judgements as per
note 2 o
f the Group financial st
atements on assessing
whether it has control and significant influence o
v
er
associates and joint v
entures.
Impairment of In
v
estments and Amounts
Ow
ed b
y Gr
oup Undert
akings
At each period end management assess the future
performance of entities with which the Compan
y
holds an inv
estment in, or a debt
or from, t
o ascert
ain
whether there is objectiv
e e
vidence of impairment
of these balances. Judgement is inv
ol
v
ed in the
assessment of future perf
ormance and this inv
olves an
element of estimation uncert
ainty
. As at the period
end the Direct
ors hav
e re
vie
wed the carrying v
alue of
its inv
estments and hav
e made no impairments (FY21:
£1.
1m impairment charge) as disclosed in not
e 2 of the
Company financial st
at
ements. As at the period end the
Direct
ors hav
e re
vie
wed the carrying v
alue of amounts
o
wed b
y Group undertakings and hav
e made an
impairment charge of £6
.4m (FY21: £nil).
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
202
2. INVESTMENTS
Inv
estments
in subsidiaries
Long-term
financial
assets
T
otal
(£m)
(£m)
(£m)
As at 26 April 2020
1,
155.5
80.3
1,235.8
Additions
78
.9
113.3
192.2
Impairment charge
(1.
1)
-
(1.1)
Disposals
-
(5.6)
(5.6)
Amounts recognised through other compr
ehensive income
-
77
.3
77.3
Ex
change differences
-
(3.7)
(3.7)
As at 25 April 2021
1,233.3
2
61
.6
1
,494.9
Additions
5.0
198.0
203.0
Disposals
-
(238.4)
(238.4)
Amounts recognised through other compr
ehensive income
-
(8.0)
(8.0)
Ex
change differences
-
(7
.
9)
(7
.9)
As at 24 April 2022
1,238.3
205.3
1,44
3.6
The fair v
alue of the long-t
erm financial assets is based on bid quot
ed market prices at the balance sheet dat
e or
,
where mark
et prices are not av
ailable, at management’s best estimate.
Long-t
erm financial assets include v
arious holdings including a 36.
9% stak
e in Mulberry Gr
oup plc, for further det
ails
ref
er t
o Note 21 of the Gr
oup Financial St
at
ements. The Company continues t
o hold a 28.
9% int
erest in Studio Ret
ail
Group (in administr
ation) at the period end. Ho
w
ev
er
, giv
en the administration and the s
ale of its main trading
subsidiary Studio Ret
ail Limited, the int
er
est has been fair v
alued to £nil with a £6
9
.2m loss recognised thr
ough other
comprehensiv
e income
.
F
or further disclosures in r
elation t
o inv
estments in associates and long-
t
erm financial assets see note 20
, 21 and 35 of
the Group F
inancial Stat
ements.
The Direct
ors assess the v
alue of the inv
estments in subsidiaries at each period end for indicat
ors of impairment. In
the prior period an impairment loss of £1.
1m w
as recognised within the income st
at
ement for loss making companies
where the r
ecov
erable amount w
as less than the carrying value
. The additions in the period relat
e t
o the F
earless 1000
share scheme
, see note 25 o
f the Group Financial St
at
ements.
The Company is the principal holding compan
y of the Group
. The principal subsidiary undertakings of the
Company ar
e set out in not
e 39 of the Group F
inancial St
atements.
The Group
’s policies for financial risk management are set out in not
e 3 and note 30 of the Gr
oup Financial St
at
ements.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
203
3.
PR
OPER
T
Y
, PLANT AND E
QUIPMENT
Fr
eehold Land
and Buildings
(£m)
Cost
At 25 April 2021
-
Additions
7.
0
At 24 April 2022
7.
0
Accumulat
ed Depreciation and Impairment
At 25 April 2021
-
Charge for the period
(0.
1)
At 24 April 2022
(0.
1)
Net Book V
alue
At 25 April 2021
-
At 24 April 2022
6.9
4.
FINANCIAL INSTR
UMENTS
Financial Assets and Liabilities b
y Category
The fair v
alue hierar
chy of financial assets and liabilities, which ar
e principally denominat
ed in St
erling or US Dollars,
w
ere as follo
ws:
25 April 2022
25 April 2021
(£m)
(£m)
FINANCIAL ASSETS
Amortised cost:
T
rade and other r
eceivables*
510.2
138.1
FV
OCI:
Long T
erm Financial Assets (Equity Instruments)
205.2
261
.
6
Derivativ
e financial assets (FV):
Derivativ
e financial assets – contracts f
or difference
-
2
0
.1
715.4
4
19.8
FINANCIAL LIABILITIES
Amortised cost:
T
rade and other pay
ables
869
.8
6
0
7.
3
Derivativ
e financial Liabilities (FV):
Derivativ
e financial Liabilities – contracts f
or difference and equity options
75.9
1.7
945.7
60
9.0
* Prepayments of £1.6m (FY21: £3
.7m) and corpor
ation tax assets of £1.
0m (FY21: £1.0m) are not included as a financial asset
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
204
5. DEB
T
ORS
At
24 April 2022
At
25 April 2021
(£m)
(£m)
Amounts ow
ed b
y Group undertakings
2
5
7.
6
6.
8
Derivativ
e financial assets
-
2
0
.1
Other debtors
252.6
131.3
Corporation t
ax
1.0
1
.0
Prepayments
1.6
3.7
512.8
162.
9
Other debtors includes £2
43
.9m (FY
21: £131.0m) of deposits in r
espect of deriv
ativ
e financial instruments which
are collat
eral t
o co
v
er margin r
equirements for deriv
ativ
e tr
ansactions held with count
erparties. The collater
al
requir
ement changes with the market (which is dependent on shar
e price, int
er
est rat
es and volat
ility) and
further purchases / s
ales of underlying inv
estments held.
Amounts o
wed b
y Group undertakings ar
e inter
est free and unsecur
ed.
F
urther information on deriv
ativ
e financial assets can be found in the Gr
oup consolidated accounts in the financial
instruments note 30 and the financial risk management disclosur
e not
e 3.
6.
CREDIT
ORS: AMOUNTS F
ALLING DUE WITHIN ONE YEAR
At
24 April 2022
At
25 April 2021
(£m)
(£m)
T
rade cr
editors
1.9
1.3
Amounts ow
ed to Gr
oup undertakings
864.
9
602.5
Derivativ
e financial liabilities
75.9
1.7
Other credit
ors
3.0
3.5
945.7
60
9.0
The amounted o
w
ed t
o Group undert
akings mainly relat
es t
o an unsecured int
erest fr
ee loan with Sportsdir
ect.
com
Ret
ail Limited which is r
epay
able on demand.
F
urther information on deriv
ativ
e financial liabilities can be found in the Gr
oup consolidated accounts in the financial
instruments note 30 and the financial risk management disclosur
e not
e 3.
The prior period Other credit
ors balance mostly relat
ed t
o the accrual for costs pay
able t
o MM Prop
Consultancy Limit
ed, see not
e 35 of the Group financial st
at
ements.
7
.
DEFERRED T
AX
Other tempor
ary
differences
(£m)
At 26 April 2020
3.7
Charged t
o the profit and loss account
(3.7)
At 25 April 2021
-
Charged t
o the profit and loss account
(6.
1)
At 24 April 2022
(6.
1)
The tax r
ate used t
o measure the de
ferr
ed tax assets and liabilities w
as 25% (FY21: 19%) on the basis that these w
ere
the tax r
at
es that wer
e subst
antivel
y enacted at the balance sheet dat
e for the periods when the assets and liabilit
ies
are e
xpect
ed to r
ev
erse
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
205
8. PR
O
VISIONS
Legal and
regulat
ory
T
ot
al
(£m)
(£m)
At 25 April 2021
-
-
Amounts pro
vided
3.0
3.0
At 24 April 2022
3.0
3.0
Fr
asers Group Plc has pr
ovided a guar
ant
ee in relation t
o payments from Studio R
etail Gr
oup plc (in
administration) t
o the thr
ee other sections of the Findel Gr
oup Pension F
und up to a maximum o
f £0.
9m. See
note 38 o
f the Group accounts.
9
.
CALLED UP SHARE CAPIT
AL
At
24 April 2022
At
25 April 2021
(£m)
(£m)
Authorised
999,5
00,0
10 ordinary shares of 10p each
10
0.0
1
00.0
499
,990 r
edeemable pref
erence shares of 10p each
-
-
Called up and fully paid
640,
602,369 (FY
21: 640,6
02,369) ordinary shar
e of 10p each
6
4.1
6
4.1
Share capit
al
6
4.1
6
4
.1
The Company holds 15
1,240
,
17
4 ordinary shares in treasury as at the period end dat
e (FY21: 121,2
60,
175).
10.
POST BALANCE SHEE
T E
VENTS
On 25 April 2022 and 20 June 2022 the Gr
oup
commenced share buyback pr
ogrammes with the
aggregat
e purchase price of all shar
es acquired
under these progr
ammes of no great
er than £105
.0m
and the maximum number of shares that may be
purchased under the pr
ogrammes of 15m or
dinary
shares with a nominal v
alue of 10p each. The purpose
of the progr
ammes w
as to r
educe the share capit
al of
the Company
. 11,884,
438 ordinary shares of 10p each
for consider
ation of £79
.9m w
ere acquired through
these progr
ammes.
On 1 May 2022 Michael Murr
ay w
as appointed as
Chief Ex
ecutiv
e Officer of F
rasers Group
. Mik
e Ashle
y
and Michael Murray w
orked t
ogether for a number
of months to ensur
e a smooth transit
ion into the r
ole.
Michael will accelerat
e the Gr
oup
’s strat
egy t
o achiev
e
its vision: “t
o serve our cust
omers with the W
orld’s best
sports, premium and luxury br
ands.”
On 16 May 2022 the Group acquir
ed the entire shar
e
capital of leading Danish sport r
et
ailer SportMaster
. Due
to the pr
o
ximity of the acquisition dat
e to the dat
e these
financial stat
ements ar
e authorised for issue, the initial
accounting for the business combination is incomplet
e
and so the disclosures r
equired b
y IFRS 3 Business
Combinations cannot be made at this st
age.
On 25 May 2022 the Group disposed of its US r
et
ail
businesses trading as Bobs St
ores (“Bobs
”) and East
ern
Mountain Sports (“EMS
”) for a cash considerat
ion of
$70m t
o GoDigital Media Gr
oup (“
GDMG”). Further
details ar
e included within not
e 16.
On 1 June 2022 the Group acquir
ed certain int
ellectual
property of the online w
omen
’s fashion ret
ailer
,
Missguided Limit
ed (in administr
ation), Mennace
Limited (in administr
ation) and Miss
guided (IP) Limited
for cash consider
ation of £20.
0 million. Due t
o the
pro
ximity of the acquisition date t
o the date these
financial stat
ements ar
e authorised for issue, the initial
accounting for the business combination is incomplet
e
and so the disclosures r
equired b
y IFRS 3 Business
Combinations cannot be made at this st
age.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
206
The Group announced on 22 June 2022 that it has
increased its in
v
estment in Hugo Boss A
G, and now has
the follo
wing int
erests in the common st
ock:
•
3,
425
,000 shar
es of common stock, r
epresent
ing
4.
9% of Hugo Boss’s t
ot
al share capit
al
•
18,289
,
000 shares of common st
ock via the sale of
put options, repr
esenting 26.
0% of Hugo Boss’s t
ot
al
share capit
al
Aft
er taking int
o account the premium it will r
eceiv
e
under the put options, Fr
asers Group
’s maximum
aggregat
e e
xposure in connection with its acquir
ed
inter
ests in Hugo Boss, with the common st
ock holding
v
alued at the closing share price on 21 June 2022, is
appro
ximately €900m (
c. £770m).
On 28 July 2022 the Gr
oup acquired the online fashion
ret
ailer I Saw It First f
or cash consideration of £1. Due t
o
the pro
ximity of the acquisition date t
o the date these
financial stat
ements ar
e authorised for issue, the initial
accounting for the business combination is incomplet
e
and so the disclosures r
equired b
y IFRS 3 Business
Combinations cannot be made at this st
age.
On 11 August 2022 the Gr
oup completed the dispos
al
of a number of freehold and long leasehold r
etail
parks held b
y its wholly o
wned subsidiaries, to RI
UK 1 Limited f
or a headline price of £205m. F
rasers
Group f
ascias will operat
e from leases within these
properties wher
e appropriat
e. F
rasers Gr
oup in the
ordinary course of business pur
chases and sells
properties fr
om time t
o time and the Group int
ends t
o
use the proceeds of s
ale to
w
ards the w
orking capital
of the Group and its oper
ations.
On 17 August 2022 the Gr
oup made a cash offer t
o
acquire the entir
e issued and to be issued or
dinary share
capital of MySale Gr
oup plc (‘MySale
’) not already held
b
y Fr
asers Group at a price of 2 pence per MySale Shar
e.
The offer v
alues the entire issued and t
o be issued share
capital of MySale not curr
ently held b
y F
rasers Gr
oup
at appro
ximately £13.
6 million (not taking int
o account
the ex
ercise of any outst
anding options which may hav
e
v
ested under the MySale Shar
e Plans or any con
v
ersion
ev
ent pursuant to the Conv
ertible Loan Not
es). On 29
June 2022, Fr
asers Group acquir
ed 270
,666
,650 MySale
Shares and, t
ogether with the contracts f
or differ
ence
already held b
y it, F
rasers Gr
oup increased its st
ake
in MySale to 28
.7% and became MySale
’s largest
shareholder
. Since the disclosure of Fr
asers Group
’s
acquisition of this further st
ake
, the market price of
MySale shares has incr
eased.
On 20 September 20
22 the Group announced that
Mik
e Ashley w
ould not be standing for r
e-election as a
Direct
or at this y
ear’s Annual General Meeting (“
A
GM”)
and that he will theref
ore st
ep do
wn from the Boar
d
upon the conclusion of the A
GM.
11.
P
A
YR
OLL COSTS
Fr
asers Group Plc had no dir
ect emplo
yees during the
periods ended 24 April 2022 and 2
5 April 2021, and the
Direct
ors are r
emunerat
ed through Sports
direct
.com
Ret
ail Limited. Det
ails of the Dir
ectors
’ remunerat
ion can
be found in the Dir
ectors
’ Remuneration R
eport.
12.
RELA
TED P
AR
TY
TRANSA
CTIONS
Relat
ed party trans
actions with the Company ar
e
disclosed within note 35 in the Gr
oup Financial St
at
ements.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
207
GL
OSSAR
Y
CONSOLID
A
TED FIVE YEAR RE
CORD AND AL
TERNA
TIVE
PERF
ORMANCE MEASURES
52 weeks ended
24 April 2022
52 weeks ended
25 April 2021
52 weeks ended
26 April 2020
52 weeks ended
28 April 2019
52 weeks ended
29 April 2018
(£m)
(£m)
(£m)
(£m)
(£m)
REPORTED PB
T
335.6
8.5
143.
5
179.2
61
.1
Ex
ceptional items
1.3
1.6
1
3.1
41.0
4.
8
F
air value gain on st
ep acquisition
-
-
(20.
4)
F
air value adjustments t
o derivativ
es included
within Finance (income) / costs
(7
.6)
4.6
(21.3)
(39.7)
1
7.
7
F
air value (gains) / losses and pr
ofit on disposal
of equity derivativ
es
(9.
9)
(82.2)
3
5
.1
(3.3)
103.6
Realised for
eign ex
change (gain) / loss
5.8
26.3
(34.
9)
(22.1)
(24.
1)
Share scheme
14.6
1.3
-
-
(6.0)
ADJUS
TED PBT
339.8
(39.
9)
115.
1
155.
1
157
.
1
Notes t
o the consolidat
ed income stat
ement fiv
e y
ear recor
d:
1.
All information is present
ed under IFRS.
2.
The fiv
e year r
ecord has been pr
epared on the s
ame basis as the Financial St
atements f
or the 52 w
eeks ended 24
April 2022, as set out in not
e 1, basis of prepar
ation, of the Consolidated F
inancial St
atements.
Reconciliation of e
x
cluding acquisitions and currency neutr
al performance measur
es:
UK
Retail
Premium
Lifestyle
European
Retail
Rest Of
W
orld Retail
Wholesale &
Licensing
Group
T
otal
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
(£’m)
Re
venue
FY22 Report
ed
2,640
.1
1,056.
6
790
.2
150.3
168.
1
4,80
5.3
Adjustments for acquisitions and currency neutr
al
(90.
1)
(3.
9)
-
-
-
(94.
0)
FY22 Ex
cluding acquisitions and currency neutr
al
2,550.0
1,052.7
790.2
150.3
168.
1
4,711.3
FY21 Report
ed
1,968
.5
73
5.6
6
15.2
152.7
153.3
3,625.3
Adjustments for acquisitions and currency neutr
al
(8.2)
(0.8)
(23.0)
(0
.8)
(1.7)
(34.5)
FY21 Ex
cluding acquisitions and currency neutr
al
1,
960.3
734.8
59
2.2
151.9
151.6
3,590
.8
% V
ariance
30.
1%
43.
3%
33
.4%
(1.1%)
10.
9%
31.2%
Adjusted PB
T
FY22 Report
ed
196.
9
10.5
88.6
32.7
11.
1
339
.8
Adjustments for acquisitions and currency neutr
al
32.5
(0.
4)
-
-
-
32.
1
FY22 Ex
cluding acquisitions and currency neutr
al
229.
4
1
0.1
88.6
32.7
11.
1
371.9
FY21 Report
ed
(12.8)
(7
.8)
(51.3)
12.2
19.8
(39
.9)
Adjustments for acquisitions and currency neutr
al
15.8
0.
2
2
.0
(0.1)
(0.
1)
17.8
FY21 Ex
cluding acquisitions and currency neutr
al
3.0
(7
.6)
(49.3)
12.1
1
9.7
(22.1)
% V
ariance
7
,546.
7%
(232.9%)
(279
.7%)
170.2%
(43.
7%)
(1,782.8%)
(1)
The FY21 numbers have been r
e-categorised due to changes in the r
eporting segments, with freehold property o
wning companies where trading is pur
ely from
Premium Lifestyle f
ascias being moved fr
om UK Sports Retail t
o Premium Lifestyle
.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
208
Ke
y Performance Indicat
ors
Performance Measur
e
Closest equivalent st
atutory
measure
Reconciling it
ems to st
atutory
measure
Definition and purpose
Group re
v
enue
-
-
T
he Board considers that this
measure is a k
ey indicat
or of the
Group
’s gro
wth.
Reported PB
T
-
-
Reported PB
T shows both the
Group's trading and oper
ational
efficiency, as w
ell as the eff
ects on
the Group of e
xternal fact
ors as
shown in the f
air value mo
vements in
strat
egic inv
estments and
foreign e
x
change.
Adjusted PB
T
Profit bef
ore tax
ation
Adjusting items (see Glossary
reconciliation abo
ve). The adjusting
items ar
e those deemed by the
Board t
o be volatile and ther
efore
difficult to f
orecast.
Adjusted PB
T shows ho
w w
ell the
Group is managing its ongoing
trading performance and
controllable costs and there
fore the
ov
erall perf
ormance of the Group.
Cash inflow fr
om
operating activities
-
-
Cash inflo
w from operat
ing activities is
considered an import
ant indicator for
the business of the cash available f
or
inv
estment in the Elev
ation strat
egy
.
Net assets
-
-
T
he Board considers that this
measurement is a k
ey indicat
or of
the Group's health.
Number of ret
ail stor
es
-
-
T
he Board considers that this
measure is an indicat
or of the
Group
’s gro
wth. The Group
’s
Elev
ation strat
egy is replacing older
stor
es and often this can r
esult in
the closure of tw
o or three st
ores
to be r
eplaced by one lar
ger new
generation st
ore.
W
orkfor
ce turnov
er
-
-
T
he Board considers that this
measure is a k
ey indicat
or of the
contentment of our people
.
Packaging r
ecycling
-
-
T
he Board considers that this
measurement is a k
ey indicat
or of
our impact and commitment to the
best environment
al practices.
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
209
COMP
ANY DIRE
CT
OR
Y
RE
GISTRAR AND
TRANSFER OFFICE
Comput
ershare In
v
est
or Services plc
The Pavilions
Bridgw
ater R
oad
Bristol
BS99 6
ZZ
T
elephone: 0370 7
07 4030
COMP
ANY SECRET
AR
Y AND
RE
GISTERED OFFICE
F
rasers Group Plc
Unit A, Brook Park E
ast
Shirebr
ook
NG20 8R
Y
T
elephone: 0344 2
45 9200
Fr
asers Group Plc is r
egister
ed in England and W
ales
(No. 060
35106)
SOL
CIT
ORS
Re
ynolds Port
er Chamberlain LLP
T
ow
er Bridge House
St Katharine
’s W
ay
London
E1W 1A
A
Dent
ons UK and Middle East LLP
One Fleet Place
London
E
C4M 7WS
BR
OKERS
Liberum Capit
al Limit
ed
Ropemak
er Place, Le
v
el 12
25 Ropemak
er Street
London
E
C2Y 9L
Y
Numis Securities Limit
ed
45 Gr
esham Street
London
E
C2V 7BF
PRINCIP
AL BANKERS
Barclay
s Bank plc
5 The North Colonnade Canary Wharf
London
E14 4BB
HSBC Bank plc
8 Canada Square London
E14 5HQ
A
UDIT
ORS
RSM UK Audit LLP
25 F
arringdon Street
London
E
C4A 4AB
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
210
SHAREHOLDER INF
ORMA
TION
ANNU
AL GENERAL MEETING
The date and time of the Annual Gener
al Meeting
is to be announced in a separ
at
e notice. E
ach
shareholder is entitled t
o att
end and vot
e at the
meeting, the arrangements f
or which are described in
a separat
e notice
.
RESUL
TS
F
or the y
ear to 30 April 2023:
•
Half y
ear results announced: tbc December 2022
•
Preliminary announcement of full y
ear r
esults: tbc
•
Annual Report cir
culated: tbc
SHAREHOLDER HELPLINE
The Fr
asers Group shar
eholder regist
er is maintained
b
y Computershar
e who are r
esponsible for making
dividend payments and updating the regist
er
, including
details of changes t
o shar
eholders’ addresses
. If you
hav
e a query about your shar
eholding in Sports Direct,
y
ou should contact Comput
ershare
’s Frasers Gr
oup
Shareholder Helpline on: 03
70 707 4030
. Calls ar
e
charged at st
andard geogr
aphic rat
es, although netw
ork
charges may v
ary
.
Address:
The Pavilions, Bridgw
ater R
oad, Bristol
, BS99 6
ZZ
W
ebsite:
www
.comput
ershare
.
com
WEBSITE
The Group w
ebsit
e at www
.fr
asers.gr
oup pro
vides ne
ws
and details of the C
ompany’s activities plus inf
ormation
for shar
eholders and contains r
eal time share price dat
a
as w
ell as the latest r
esults and announcements.
UNSOLICITED MAIL
The Company is obliged b
y law t
o mak
e its share
regist
er publicly av
ailable and as a consequence some
shareholders may r
eceiv
e unsolicited mail, including
from unauthorised in
v
estment firms.
F
or more inf
ormation on unauthorised inv
estment firms
tar
geting UK inv
estors, visit the w
ebsite of the F
inancial
Conduct Authority at www
.fca.
org
.uk
If y
ou wish to limit the amount of unsolicit
ed mail y
ou
receiv
e cont
act:
Mailing Pref
er
ence Service
DMA House
70 Margar
et Street
London
W1W 8SS
T
elephone:
020 7291 3310
Email:
mps@dma.or
g.uk
or regist
er online at www
.mpsonline.
org
.uk
F
rasers Group Plc
Unit A, Brook Park E
ast, Shirebr
ook, NG20 8RY
0344 2
45 9200
www
.
frasers.gr
oup
FRASERS GROUP PL
C
ANNU
AL REPORT 2022
211
ANNU
AL
REPOR
T
&
A
CCOUNTS
2022.
FRASERS GR
OUP PL
C