TIDMCURY
RNS Number : 7575J
Currys PLC
15 December 2022
Unaudited Results for the Half Year Ended 29 October 2022
UK&I performance strengthens again, International impacted
by temporary market disruption
We Help Everyone Enjoy Amazing Technology
Key Highlights
-- UK&I profit growth as gross margin improvements and cost
savings offset sales decline
-- International profits down significantly due to actions
taken in face of competitors' heavy discounting
-- Cost savings: UK&I programme well on track for GBP300m saving
target, International offsetting inflationary pressures
-- Tech market still larger than pre-pandemic (UK +14% Yo3Y,
Nordics +15% Yo3Y)
-- Online share of business stable, highlighting strength of
omnichannel model following pandemic disruption
-- UK&I Credit adoption of 17%, +460bps YoY and well ahead
of 16% target for 2023/24
Financial Performance(1)
-- Group LFL (8)% (Yo3Y +7%); Revenue (7)% (Yo3Y (6)%)
-- Group adjusted loss before tax GBP(17)m, down GBP(62)m YoY
due to lower International profits
-- Group statutory loss before tax GBP(548)m driven by non-cash
goodwill impairment of GBP(511)m
-- Period-end net debt GBP(105)m with significant liquidity
headroom given total revolving credit facilities of GBP676m
-- Pension deficit decreased slightly to GBP(251)m (30 April
2022: GBP(257)m, 30 Oct 2021: GBP(416)m) despite market volatility
-- Interim dividend of 1.00p declared (flat YoY).
Current Year Guidance: Reflecting the strength of the UK&I
business and the disruption to our International markets, we now
expect full year PBT to be between GBP100-125m, with cash
generation in the second half.
Alex Baldock, Group Chief Executive
"Currys UK&I performance continues to strengthen, and is
showing real momentum, reflecting good progress in our
transformation. International, however, has had a tough period, and
faces short-term but intense pressures from a disrupted market.
In the UK&I, our profits are up, from increased gross
margins and strong cost discipline. We're bucking the trend with
world-class and increased colleague engagement. Our customers are
happier too, and are more likely than ever to recommend us. We are
making more of our winning Omnichannel model and are building more
Customers for Life with strong Services growth.
Our International business, which has consistently delivered
growth in sales and profits over many years, has had a difficult
first half with margins sharply down. Lower demand has left
domestic competitors with excess stock, which they're now heavily
discounting. This has substantially disrupted the market, and
required margin investment to keep our sales strong. We expect
these pressures, intense though they are, to be temporary - demand
will normalise, excess stock will wash through, and competitors
will find unprofitable aggression hard to sustain. We've also
stepped up our self-help actions on margins and cost.
Of course, our customers are feeling real cost of living
pressure and our job is to help them get hold of the technology
that's more essential to their lives than ever. We're doing that,
through our price promise, giving customers access to responsible
credit, and offering more products that save them money through
lower energy costs. Our Go Greener range is flying off the
shelves.
It's a tough environment, and we are planning for that to
continue. Still, we expect to maintain the trajectory of improving
UK&I profitability and a robust recovery in International
profits. Our ever-improving customer experience and strong Services
give us confidence in improving margins. And we will continue our
excellent progress on cost efficiency.
We have a strong balance sheet and a strategy that's working. By
focusing on the things we can control, while doing everything we
can to support our colleagues and customers, we'll ride out the
current turbulence and emerge an even stronger business well-set
for long-term success."
Performance Summary
Group sales declined (7)% and (8)% on a like-for-like basis
against the high level of sales seen over the last two years.
Compared to three years ago, like-for-like sales grew +7%, with
positive trends in all territories. Over the same period total
sales are down (6)% due to the closure of legacy operations.
Year-on-year Year-on-3-year
---------------- --------- --------- --------------------------------------
Revenue H1 H1 Currency Currency
2022/23 2021/22 Reported neutral Like-for-Like Reported neutral Like-for-Like
GBPm GBPm % change % change % change % change % change % change
---------------- --------- --------- ---------- ---------- -------------- ---------- ---------- --------------
UK & Ireland 2,292 2,546 (10)% (10)% (10)% (19)% (19)% 2%
International 2,181 2,239 (3)% (2)% (6)% 15% 19% 12%
- Nordics 1,886 1,959 (4)% (3)% (7)% 12% 17% 10%
- Greece 295 280 5% 5% 4% 30% 34% 25%
---------------- --------- --------- ---------- ---------- -------------- ---------- ---------- --------------
Group 4,473 4,785 (7)% (6)% (8)% (6)% (4)% 7%
---------------- --------- --------- ---------- ---------- -------------- ---------- ---------- --------------
In UK&I adjusted EBIT increased +25% YoY and was higher than
three years ago. Improvements to gross margin were driven through
higher customer adoption rate of credit and other services
(especially online), improved use of data and analytics to drive
better returns on marketing and promotions, cost savings and the
introduction of two-person delivery charges towards the end of the
period. Operating costs fell in absolute terms as savings offset
inflationary cost pressures and increased business rates tax.
We have recorded a GBP(511)m non-cash impairment of UK&I
goodwill that arose at time of Dixons Carphone merger in 2014. This
was primarily driven by increased discount rates as a result of the
sharp increases in UK gilt yields around our period end, as well as
more prudent economic assumptions within our internal valuation
models.
In International, adjusted EBIT declined (94)% YoY and is also
down significantly on three years ago. This was driven by gross
margin erosion as some smaller domestic competitors are following
aggressive growth strategies to gain share in a market that is
structurally bigger following the pandemic. They substantially
overestimated demand and the excess stock bought into market is
being cleared at discounted prices. Against this backdrop, we
deliberately kept pricing competitive to preserve market share in
what we expect to be a temporary period of depressed market
profitability. Demand will normalise, the excess stock will sell
through, and the smaller competitors are unlikely to be able to
sustain these unprofitable practices.
Due to lower International profitability, operating cash flow
declined (54)% YoY, while free cash flow was an outflow of GBP(86)m
reflecting the lower operating profitability , normalized levels of
investment and a small, expected working capital outflow.
Profit and Cash Flow H1 2021/22 Currency
Summary H1 2022/23 Adjusted neutral
H1 2022/23 H1 2021/22 Adjusted (restated)(1) Reported % change
GBPm GBPm GBPm GBPm % change
------------------------ ----------- ----------- --------------- ---------- ----------
Segmental EBIT
UK & Ireland (495) 33 25 20 25% 25%
International (3) 62 4 68 (94)% (94)%
- Nordics (4) 51 3 57 (95)% (95)%
- Greece 1 11 1 11 (91)% (91)%
EBIT (498) 95 29 88 (67)% (67)%
(120) (120)
EBIT Margin (11.1)% 2.0% 0.6% 1.8% bps bps
Net finance costs (50) (47) (46) (43)
------------------------ ----------- ----------- ----------- --------------- ---------- ----------
(Loss) / profit before
tax (548) 48 (17) 45 n/a n/a
------------------------ ----------- ----------- ----------- --------------- ---------- ----------
Tax (12) (6) 3 (16)
------------------------ ----------- ----------- ----------- --------------- ---------- ----------
(Loss) / profit after
tax (560) 42 (14) 29
------------------------ ----------- ----------- ----------- --------------- ---------- ----------
(Loss) / earnings
per share (50.8)p 3.7p (1.3)p 2.5p
------------------------ ----------- ----------- ----------- --------------- ---------- ----------
Operating cash flow 60 131 (54)% (54)%
Operating cash flow (140) (130)
margin 1.3% 2.7% bps bps
Free cash flow (86) 185 n/a n/a
Net (debt) / cash (105) 250
------------------------ ----------- ----------- --------------- ---------- ----------
Current Trading
In the six weeks since the period end, trading performance is
in-line with the first half.
Current year guidance
We are confident that the improvements to UK&I gross margin
and ongoing cost control will continue to deliver robust
profitability despite our expectation that market conditions will
not improve in the second half.
In International, the high market shares and our long track
record of growth in sales and profit, together with self-help
action on margin and costs, give us confidence that profitability
will recover robustly when market conditions normalise. The timing
and extent of this will depend on when demand normalises, but
especially on how long competitors need to clear excess stock, and
how long they sustain unprofitable pricing.
The Group expects to generate stronger free cash flow in the
second half of the year.
-- Full year adjusted PBT to be range of GBP100-125m, assuming
no further unexpected macro deterioration
(vs previous guidance of GBP125-145m on like-for-like basis,
after adjusting for the reclassification of GBP5m IT spend)
-- Capital expenditure of around GBP120m (vs previous guidance
of GBP135-155m on like-for-like basis)
-- Net exceptional cash costs of around GBP40m (unchanged guidance)
Medium term guidance
-- Group targeting at least 3.0% adjusted EBIT margin by 2024/25.
We aim to continue to improve it thereafter
(1) In the reporting of financial information, the Group uses
certain measures that are not required under IFRS. These are
presented in accordance with the Guidelines on APMs issued by the
European Securities and Markets Authority ('ESMA') and are
consistent with those used internally by the Group's Chief
Operating Decision Maker to evaluate trends, monitor performance,
and forecast results.
We consider these additional measures to provide additional
information on the performance of the business and trends to
shareholders. Adjusted results and adjusting items for the
comparative periods ended 30 October 2021 and 30 April 2022 have
been restated to reflect the updated adjusting items policy that
reflects management's belief that the more stringent classification
provides greater clarity on the current and future performance of
the Group's ongoing omnichannel retail operations. There has been
no impact on statutory results as a result of the restatements.
The below, and supplementary notes to the APMs, provides further
information on the definitions, purpose, prior period restatements
and reconciliations to IFRS measures of those APMs that are used
internally to provide parity and transparency between the users of
this financial information and the CODM in assessing the core
results of the business in conjunction with IFRS measures.
These APMs may not be directly comparable with other similarly
titled measures of 'adjusted' or 'underlying' revenue or profit
measures used by other companies, including those within our
industry, and are not intended to be a substitute for, or superior
to, IFRS measures.
We Help Everyone Enjoy Amazing Technology
Chief Executive's Review
It's been a mixed half year. We've shown, through our
strengthening UK&I results, that our long-term transformation
is increasingly bearing fruit financially, as well as for
colleagues and customers. We are obviously disappointed that our
long track record of sales and profit growth internationally has
been interrupted by market disruption in the past six months. But
we see nothing structural or permanent in the drivers of that
disruption and are confident that International will resume its
long-term trajectory, to produce a Group that reflects our
strategic progress in strong and sustainable financial results.
The UK&I's performance strengthened again, all the more
noteworthy given the challenging circumstances. Profits were up
again. Sales were solid, up +2% LFL Yo3Y as we protected our number
one market share. We improved gross margins again. Services growth,
our increasing ability to charge for an improving customer
experience (while still offering good value for money), our
disinclination to chase less profitable sales (and improving tools
to avoid having to), and strong cost efficiency in our supply chain
and service operations, have all contributed to those gross margin
gains, and there's more to come from all of those drivers.
Meanwhile, we remain on track for (at least) the GBP300m committed
cost reduction, with in-year savings more than compensating for
inflationary and tax headwinds.
Internationally, the markets have been experiencing a painful
period, and we've not been spared the impact of that. It's been a
difficult first half, with gross margins (and profits) sharply
down, even as we've performed well on sales and costs. Our
International markets have experienced the same pressures as the
UK, with softer demand coupled with COGS inflation. But the Nordics
has experienced substantial further disruption. A long tail of
smaller domestic competitors, boosted by the pandemic and new
funding since, chose aggressive growth strategies and big stock
buys just as demand softened. They've felt forced to discount
excess stock heavily, and have taken the market profit pool
temporarily to near-zero. In Greece, we have seen similar heavy
discounting from some competitors, exacerbated by government
subsidies that have negatively affected product mix in the first
half.
As we do everywhere in the Group, in International we seek to
balance maintaining the benefits of our market-leading topline
share with profitability. The market disruption in the Nordics has
required unexpectedly heavy margin sacrifice to protect our market
leadership. As we plan our recovery in International profits, we
remember that Elkjøp is an excellent business with a long and
hitherto uninterrupted track record of sales and profit growth. Nor
do we see in any of the past six months' market pressures,
unexpectedly intense though they've been, anything structural or
permanent. The Nordics are fundamentally healthy, wealthy markets,
and demand will normalise in time. Excess stock will sell through.
Competitors can't sustain current levels of desperate and
unprofitable pricing. And in response to longer and deeper market
disruption than expected, we're accelerating our margin, cost and
cash self-help. We expect a robust recovery in Nordics profits.
The same strategy that lies behind the Nordics' long track
record is now producing improving results in the UK.
We remain number one in a market that is structurally larger
post-pandemic (UK +14% and Nordics +15% larger Yo3Y). Technology
can no longer be seen as a purely discretionary category, though,
of course, the market (and our sales) have still come under much
pressure during the cost of living squeeze.
We have happier colleagues and customers. Colleague engagement
has bucked the global downward trend, is up in the UK, and at
world-class levels. I'm proud of everything we've done to support
our colleagues, who've felt the brunt of the cost of living
pressures just as customers have, through improved reward,
recognition, learning, development, and well-being. Customers are
happier too, with NPS up +5pts Yo3Y.
We continue to improve on retail fundamentals. Our range is
larger, with energy-efficient products (such as our Go Greener
range) to the fore. Unlike others, we've stood by our price
promise, making the most of our leading relationships with
suppliers to keep the lid on inflation-driven price rises as far as
possible, as well as to get preferential access to the most
desirable stock. Our availability is improved and market leading.
And our customer experience is easier. We're not happy with where
we are on any of this, of course, but we are happy with the
trajectory.
Meanwhile, on our two big differentiators of Omnichannel and
Services, we've made strong progress. Omnichannel continues to
prove itself as the winning model for customers, with online share
of business remaining stable on last year. We've built on our
advantage here. Investments in store colleagues, new online
platforms (whose full benefits are still to come), and Omnichannel
benefits such as 24/7 video shopping (ShopLive), continue to prove
their worth with customers. Now, as our improving gross margins
show, we are making the Omnichannel model work economically too, as
we continue to level up profitability between channels.
In Services, our outstanding progress on Credit in the UK (where
we're already ahead of next year's target) has been important to
both customers and the business. We've also made big strides in
giving longer life to customers' technology. With our leadership in
protection, repair, trade-in and recycling, we're uniquely placed
to do so. Giving longer life to the technology that customers
already have (as well as selling them new kit) chimes with
customers' ever-increasing concerns on sustainability, as well as
on affordability during a cost of living crisis. It's another
reason for customers to prefer Currys - and it's already profitable
for us, with more upside to come.
The outlook is obviously uncertain. We're not counting on any
macro improvement anytime soon, and have been accordingly prudent
in our planning. But we are a more resilient business now, with a
strong balance sheet and GBP676m of revolving credit facilities
that give ample liquidity. We expect strengthening UK&I
performance to make up for a weaker year in the Nordics. Longer
term, we stand by the (at least) 3% EBIT margin target, though are
now prudently only committing to that by 2024/25 reflecting the
weaker macroeconomic backdrop. We will aim for more, sooner, of
course. To do that, we will protect our number one market share,
continue to improve gross margins, realise at least the promised
GBP300m per annum cost efficiencies by 2023/24, normalise capital
expenditure and minimise exceptionals, to produce at least GBP150m
of sustainable free cash flow per annum.
So we are resilient now, and well set for longer term success,
by following the strategy that has proved itself over many years in
the Nordics, and is producing real financial momentum in the
UK&I. We will continue to build on a strong bricks and mortar
retail business, to produce a world-class Omnichannel retailer and
services provider, with stickier and more valuable customer
relationships to match. As ever, I'm humbled by the skill and will
of my colleagues, who share my determination to help millions of
people enjoy to the full the benefits of amazing technology, for
the benefit of colleagues, customers, shareholders, and society
alike.
We will grow profitably, with higher margins and ever-lower
costs
-- In November 2021, we announced a plan to save GBP300m of
annual costs in the UK&I by the end of 2023/24. We are
progressing well with those initiatives and are on track to save
over GBP170m on a cumulative basis by the end of this year and
GBP300m by the end of 2023/24.
-- In UK&I, headwinds and cost inflation totaled GBP(36)m as
we paid GBP(14)m more in business rates, GBP(11)m more for energy
and experienced GBP(11)m in wage and other inflation. Against this,
our programmes drove GBP44m of savings with the largest areas of
saving including store payroll efficiencies of GBP18m, supply chain
efficiencies of GBP11m and central, IT and procurement savings of
GBP15m.
-- In total, Group energy costs were GBP15m higher for the half
year than last year and we forecast energy costs to increase around
GBP22m for the full year, which will be GBP32m more than the cost
in 2020/21.
-- We welcomed the UK Government's announcement on business
rates last month, the removal of inflationary increases and fairer
application of downward relief will reduce business rate taxes by
around GBP4m next year.
-- In Nordics, our strong cost control, particularly in IT
expenditure, has allowed us to offset inflationary increases of
GBP(13)m and a further GBP(5)m of costs related to new stores.
Saving initiatives included lower IT costs and reduced hiring
rates.
-- In August, the Group announced the launch of our Global
Business Services and strategic partnership with Infosys. The
initial transfer of over 700 colleagues from our Brno office to
Infosys took place in October, alongside opening a new off-shore
delivery centre with Infosys in Pune, India. We expect this
partnership to develop significantly over the coming years.
Capable and Committed Colleagues
-- Our colleagues are our strongest advantage. Our Group eSat
(how happy you are to work at Currys) remains strong at 77. In the
UK&I this has increased another point to 79. This is four
points above the Global and Retail benchmarks and puts Currys in
the top 25% of all businesses. In Nordics we saw positive
development in both response rate (+9) and engagement (+2).
-- All UK store colleagues moved on to single contract, driving
greater efficiency in store while allowing colleagues to retain
expertise in chosen areas, this has enabled a +12% increase in
customer facing hours.
-- UK colleagues were given further pay increases effective from
30 October 2022, marking a 16% increase in minimum pay rates over
the past 13 months and +38% increase over the past five years.
-- We continue to upgrade the tools and information available to
our colleagues, with the UK seeing a new Colleague Hub as well as
upgrades to ShopLive and Store Mode during the period (see more in
our omnichannel section).
-- Nordics has fully implemented a new flexible bonus system
which enables gamification to incentivise delivery of both our
near-term and long-term priorities.
-- The long term improvements in colleague engagement are
feeding into customer satisfaction with UK in-store NPS climbing
YoY and +6pts Yo3Y and Nordic 'Happy or Not' scores maintaining the
very high levels of the last few years.
Easy To Shop: Omnichannel
Omnichannel is the preferred model for customers in technology
retail: two-thirds of customers prefer to shop using stores,
underlined by unchanged online share of business. We're continuing
to build on this advantaged business model.
-- Group online share of business was broadly unchanged YoY at
32%. Compared to three years ago, the increase is +10%pts, with
UK&I seeing the largest increase at +17%pts.
Online Share of Business H1 2022/23 H1 2021/22 H1 2019/20 Year-on-Year Year-on-3-Year
------------------------- ---------- ---------- ---------- ------------ --------------
UK & Ireland 43% 43% 26% -%pt 17%pts
International 21% 22% 15% (1)%pt 6%pts
- Nordics 23% 24% 17% (1)%pt 6%pts
- Greece 7% 8% 5% (1)%pt 2%pts
------------------------- ---------- ---------- ---------- ------------ --------------
Group 32% 33% 22% (1)%pt 10%pts
------------------------- ---------- ---------- ---------- ------------ --------------
Stores: investing in colleagues, while increasing flexibility
and efficiency:
-- Face-to-face advice from trusted experts is a principal
reason for customers to shop in-store. Stores investment is
therefore focused on building colleague capability and commitment,
for example, through their +16% pay increase in the past 13 months
in the UK. Results of that are visible in store colleague
engagement up +12pts Yo2Y, store NPS up +6pts Yo3Y and recovery in
stores to 57% of sales.
-- Lease costs continue to fall, as we have closed another four
UK stores at the lease expiry and negotiated an average effective
net rent reduction of more than 20% on the 12 leases renewed.
Online: investing in new platforms
-- During the period we have made significant improvements to
our UK&I website, Colleague Hub, ShopLive and Store Mode, which
means that we now have a website that is fast, future proof, and
provides a richer, seamless, more personalised experience. It also
enables better upsell, cross-sell credit and other service adoption
online, all of which increase gross margins and "level up"
profitability between channels. By introducing the new Colleague
Hub, and improving Store Mode and ShopLive, we're arming our
colleagues in store with the tools, technology and information they
need to have more meaningful conversations with customers.
-- Next Generation retail project completed, which has improved
our Nordics omnichannel experience for customers. Amongst many
improvements this has allowed implementation of recurring revenue
on insurance, self-service for customers (reducing customer
contacts), flexibility in home deliveries and improved
availability.
-- In the UK, we opened new Harworth warehouse on 19 September,
this 355,000 sq ft facility has allowed us to increase our product
availability on domestic appliances for both home delivery and
stores, as well as serving as a new base for delivery &
installation services in the region. As a result of seamless
collaboration between Currys and our logistics partner, GXO, the
facility was fully operational within two months of opening.
-- We announced the opening of a new 870,000 sq ft warehouse in
Jönköping, Sweden, increasing the total capacity at the Nordic
Distribution Centre to 1,940,000 sq ft. This will facilitate the
move of our Nordic kitchen distribution from Brno to Jönköping, as
well as providing additional storage capacity for mixed electrical.
We're targeting opening in two years.
Customers For Life
We help customers afford amazing technology:
Responsible credit plays a vital role in helping customers
afford the (sometimes expensive) technology that's so impactful to
them. This is especially true during a costs of living crisis. Our
credit customers are happier as a result (+12 points NPS vs
non-credit customers). Credit is valuable for Currys too, with
credit customers spending +7% more and are +70% likelier to return
(shop with us in the next 12 months).
-- UK credit adoption increased +460bps to 17.0%, well ahead of
the 16% adoption we have targeted for 2023/24 as active credit
accounts rose +17% to 1.8m. Online credit adoption increased
+620bps to 17.9% and store credit adoption +320bps to 16.3%,
marking the first period where online adoption has been greater
than store. The largest increases in adoption were from repeat
customers, particularly online, as our easier to access accounts
and targeted marketing have stimulated repeat spend. We take no
risk on credit.
-- Last year, Nordics launched integrated financing services in
the online channel together with our consumer financing bank
partners in Norway, Sweden and Finland. This has been a successful
change, contributing to +24% growth in financed sales. Our Nordic
business aims to increase financing sales even further by
optimising the sales processes in stores.
Our Services help customers get tech started:
-- During the period, we introduced charging for all two-person
deliveries in the UK, following successful removal of free
deliveries on all orders below GBP40 last year. This has had a
small positive impact on profitability in the period, and we have
been pleased to see that it has not had a detrimental impact on
sales, customer satisfaction or adoption rate of our services. We
will look to add delivery charging in the Nordics later this
year.
-- Our installation services are becoming ever more valued by
customers, and we saw installation adoption rise in all markets
during the six months and one-quarter of UK big-box deliveries now
include installation.
We help give tech a longer life through protection, repair,
trade-in and recycling services:
-- Protection products performed well across the Group and we
have 14m Protection (warranty and insurance) agreements in the
Group, with over a third of the products sold in Greece including
some level of protection services as part of the bundle.
-- In the UK, our Care & Repair adoption climbed +350bps
compared to last year, as customers look to benefit from our
improved propositions, which we are doing a better job of
highlighting in-store and online.
-- In Nordics, we launched insurance for devices with monthly
payment in all our markets. We have been gradually increasing the
offering from mobile to tablets and PCs between May and August.
Customers have welcomed this, and a high share choose this option
over up-front payment. The recurring revenue this generates is
growing month by month.
-- In Nordics, our trade-in business is still nascent, but this
was the period when it started to become mainstream, growing almost
10x larger than last year. Norway led the way, but all markets saw
significant growth.
-- In the UK, we collected over 700,000 items for recycling from
customers' homes, +34% more than last year. As customers become
more aware of the environmental consequences of their actions, we
are there to help them.
-- In Nordics, we have introduced a new, high-quality
calibration service for TVs. This has been well received by our
customers.
We help customers make the most out of their tech with
connectivity and subscriptions:
-- iD Mobile, our award winning MVNO, grew the number of
subscribers +10% to 1.2m, demonstrating the incredible value it
offers to our customers.
We will collect, protect, and use Data to build more valuable
customer relationships:
-- Currys Perks members grew +11% YoY to 11m and represented
half of UK sales, Perks customers are happier, shop more
frequently, have higher average order values and greater adoption
rate of credit and other services than non-Perks customers. Traffic
to our website generated from email marketing is almost 3x higher
Yo3Y.
-- Nordic customer club grew +20% YoY to 7.1m customers. Club
members spend more with us as increased shopping frequency
outweighs lower average order values.
Results call
There will be a live presentation followed by Q&A call for
investors and analysts at 9:00am today.
It will be webcast here:
https://stream.brrmedia.co.uk/broadcast/638e00cd21e50e480f0739b3
Next scheduled announcement
The Group is scheduled to publish its Peak trading update
covering the 10 weeks to 7 January 2023 on Wednesday 18 January
2023.
For further information
Dan Homan Investor Relations +44 (0)7401 400442
Toby Bates Corporate Communications +44 (0)7841 037946
Tim Danaher Brunswick Group +44 (0)2074 045959
============= ========================== ===================
Information on Currys plc is available at www.currysplc.com
Follow us on Twitter: @currysplc
About Currys plc
Currys plc is a leading omnichannel retailer of technology
products and services, operating online and through 826 stores in 8
countries. We Help Everyone Enjoy Amazing Technology, however they
choose to shop with us.
In the UK & Ireland we trade as Currys; in the Nordics under
the Elkjøp brand and as Kotsovolos in Greece. In each of these
markets we are the market leader, employing 30,000 capable and
committed colleagues. Our full range of services and support makes
it easy for our customers to discover, choose, afford and enjoy the
right technology for them, throughout their lives. The Group's
operations include state-of-the-art repair facilities in Newark,
UK, a sourcing office in Hong Kong and an extensive distribution
network, enabling fast and efficient delivery to stores and
homes.
Our vision, we help everyone enjoy amazing technology, has a
powerful social purpose at its heart. We believe in the power of
technology to improve lives, help people stay connected,
productive, healthy, and entertained. We're here to help everyone
enjoy those benefits and with our scale and expertise, we are
uniquely placed to do so.
We're a leader in giving technology a longer life through
repair, recycling and reuse. We're reducing our impact on the
environment in our operations and our wider value chain and we will
achieve net zero emissions by 2040. We offer customers products
that help them save energy, reduce waste and save water, and we
partner with charitable organisations to bring the benefits of
amazing technology to those who might otherwise be excluded.
Certain statements made in this announcement are
forward-looking. Such statements are based on current expectations
and are subject to a number of risks and uncertainties that could
cause actual results to differ materially from any expected future
events or results referred to in these forward-looking statements.
Unless otherwise required by applicable laws, regulations or
accounting standards, we do not undertake any obligation to update
or revise any forward-looking statements, whether as a result of
new information, future developments or otherwise. Information
contained on the Currys plc website or the Twitter feed does not
form part of this announcement and should not be relied on as
such.
Performance Review
The business is managed and evaluated across three reporting
segments; UK & Ireland, Nordics and Greece. The table below
show the combined Group results, with fuller explanation following
under each of the individual segments.
Income Statement Currency
H1 2021/22 neutral
H1 2022/23 (restated) Reported % change
GBPm GBPm % change
--------------------------------- ------------ ------------ ------------ ------------
Revenue 4,473 4,785 (7)% (6)%
Adjusted EBITDA 183 244 (25)% (25)%
--------------------------------- ------------ ------------ ------------ ------------
Adjusted EBITDA margin 4.1% 5.1% (100) bps (100) bps
Depreciation on right-of-use
assets (95) (95)
Depreciation on other assets (28) (33)
Amortisation (31) (28)
------------
Adjusted EBIT 29 88 (67)% (67)%
Adjusted EBIT margin 0.6% 1.8% (120) bps (120) bps
Interest on lease liabilities (34) (36)
Finance income 1 1
Adjusted finance costs (13) (8)
Adjusted PBT (17) 45 n/a n/a
Adjusted PBT margin (0.4)% 0.9% (130) bps (140) bps
Adjusted tax 3 (16)
--------------------------------- ------------ ------------ ------------ ------------
Adjusted Profit after tax (14) 29
--------------------------------- ------------ ------------ ------------ ------------
Adjusted EPS (1.3)p 2.5p
--------------------------------- ------------ ------------ ------------ ------------
Statutory Reconciliation
Adjusting items to EBITDA (515) 19
--------------------------------- ------------ ------------ ------------ ------------
EBITDA (332) 263
Adjusting items to depreciation
and amortisation (12) (12)
--------------------------------- ------------ ------------ ------------ ------------
EBIT (498) 95 n/a n/a
EBIT Margin (11.1)% 2.0% (1,310) bps (1,300) bps
Adjusting items to finance
costs (4) (4)
PBT (548) 48
Adjusting items to tax (15) 10
Profit after tax (560) 42
--------------------------------- ------------ ------------ ------------ ------------
EPS - total (50.8)p 3.7p
--------------------------------- ------------ ------------ ------------ ------------
Cash flow H1 2021/22
Currency
H1 2022/23 (restated) Reported neutral
GBPm GBPm % change % change
--------------------------------- ------------ ------------ ----------- ----------
Adjusted EBITDAR 188 252 (25)% (26%)
Adjusted EBITDAR margin 4.2% 5.3% (110) bps (110) bps
Cash payments of leasing
costs, debt & interest(1) (136) (134)
Other non-cash items in EBIT 8 13
--------------------------------- ------------ ------------ ----------- ----------
Operating cash flow (1) 60 131 (54)% (54)%
--------------------------------- ------------ ------------ ----------- ----------
Operating cash flow margin 1.3% 2.7% (140) bps (130) bps
Capital expenditure (56) (51)
Adjusting items to cash flow(1) (25) 16
------------ ----------- ----------
Free cash flow before working
capital (21) 96
Working capital (28) 102
Segmental free cash flow (49) 198 n/a n/a
Cash tax paid (24) (6)
Cash interest paid (13) (7)
--------------------------------- ------------ ------------ ----------- ----------
Free cash flow (86) 185 n/a n/a
--------------------------------- ------------ ------------ ----------- ----------
Dividend (24) (34)
Purchase of own shares -
employee benefit trust (4) (28)
Pension (39) (39)
Other 4 (3)
--------------------------------- ------------ ------------ ----------- ----------
Movement in net cash / (debt) (149) 81
--------------------------------- ------------ ------------ ----------- ----------
Net cash / (debt) (105) 250
--------------------------------- ------------ ------------ ----------- ----------
(1) Cash payments of leasing cost, debt and interest exclude
non-trading stores.
UK & Ireland
H1 2021/22
H1 2022/23 (restated) Reported
Currency
neutral
GBPm GBPm % change % change
--------------------------------- ------------ ------------ ---------- ----------
Income Statement
--------------------------------- ------------ ------------ ---------- ----------
Revenue 2,292 2,546 (10)% (10)%
Adjusted EBITDA 103 105 (2)% (2)%
Adjusted EBITDA margin 4.5% 4.1% 40 bps 40 bps
Depreciation on right-of-use
assets (49) (50)
Depreciation on other assets (12) (17)
Amortisation (17) (18)
Adjusted EBIT 25 20 25% 25%
--------------------------------- ------------ ------------ ---------- ----------
Adjusted EBIT margin 1.1% 0.8% 30 bps 30 bps
Adjusting items to EBIT (520) 13
--------------------------------- ------------ ------------ ---------- ----------
EBIT (495) 33 n/a n/a
--------------------------------- ------------ ------------ ---------- ----------
(2,290) (2,290)
EBIT margin (21.6)% 1.3% bps bps
Cash flow
--------------------------------- ------------ ------------ ---------- ----------
Adjusted EBITDAR 105 110 (5)% (5)%
Adjusted EBITDAR margin 4.6% 4.3% 30 bps 30 bps
Cash payments of leasing costs,
debt & interest(1) (78) (83)
Other non-cash items in EBIT 6 11
--------------------------------- ------------ ------------ ---------- ----------
Operating cash flow (1) 33 38 (13)% (13)%
--------------------------------- ------------ ------------ ---------- ----------
Operating cash flow margin 1.4% 1.5% (10) bps (10) bps
Capital expenditure (28) (24)
Adjusting items to cash flow(1) (24) 16
------------ ---------- ----------
Free cash flow before working
capital (19) 30 n/a n/a
Working capital 1 134
Segmental free cash flow (18) 164 n/a n/a
--------------------------------- ------------ ------------ ---------- ----------
(1) Cash payments of leasing cost, debt and interest exclude
non-trading stores.
Total UK&I sales declined (10)%, driven by like-for-like
sales decline of (10)%. Compared to pre-pandemic levels, UK&I
like-for-like sales are up +2%.
During the period, the online share of business was 43%, flat
YoY. Compared to three years ago online share of business is up
+17ppts as customers have benefited from the improvement to our
online-only propositions as the market has shifted towards
online.
Domestic appliances and Mobile were the strongest performing
categories due to our investment in these areas and improved
availability. Consumer Electronics and Computing both saw sales
decline, albeit the strong growth in Computing over the pandemic
meant sales were still healthily up on three years ago.
The UK market shrank (7)% during H1 with the online market
reducing by (10)% and the store channel declining less than (2)%.
Compared to three years ago, the market is +14% larger as the
online market growth of +62% has compensated for a (23)% decline in
the store channel. Our market share is down (120)bps compared to
last year as we lost share in consumer electronics and computing.
Our market share is down (200)bps on three years ago due to the
shift away from stores where we historically had higher share. In
stores, our share is stable, and we have gained share online.
Gross margins increased +160bps, as the investment in long-term
transformation activities has yielded improvements in bundling,
upselling and adoption rate of credit and other services. The
operating expense to sales ratio worsened by (130)bps as costs
reduced in absolute terms, but not enough to offset the decline in
sales. A GBP(14)m headwind from the lowering of UK & Ireland
business rates tax reliefs, energy cost inflation of GBP(11)m and
wage inflation of GBP(4)m were more than offset by cost savings
across supply chain, store operations and central costs as well as
lower depreciation.
Adjusted EBIT increased to GBP25m at 1.1% margin, up +30bps
YoY.
In the period, adjusting items to EBIT totalled GBP(520)m due to
GBP(511)m impairment of goodwill, predominantly due to increased
discount rates as a result of the recent increases in UK gilt
yields and more prudent assumptions within our valuation models due
to the increased macroeconomic uncertainty. The cash costs in the
period related to leases on previously closed stores and the cash
impact of ongoing strategic change and cost saving initiatives.
H1 20201/22, GBPm
H1 2022/23, GBPm (restated)
P&L Cash P&L Cash
----------------------------------------- ---------- ------- -------- ----------
Acquisition / disposal related
items (6) - (6) -
Strategic change programmes (3) (24) 1 (34)
Impairment losses and onerous contracts (511) - - (3)
Other - - 18 53
Total (520) (24) 13 16
---------- -------- ----------
Operating cash flow was broadly flat with profits remaining
stable year-on-year. Capital expenditure was up slightly compared
to last year at GBP28m, with significant expenditure focussed on IT
and upgrading our omnichannel platform. Adjusting items are
described above. Working capital cashflow was neutral as the usual
seasonal inflow was offset by lower stock turn as we increased
product availability compared to last year. In combination, this
resulted in segmental free cash outflow of GBP(18)m, GBP(182)m
lower than last year.
Nordics
Currency
H1 2022/23 H1 2021/22 Reported neutral %
GBPm GBPm % change change
------------------------------- ----------- ----------- ---------- -----------
Income Statement
------------------------------- ----------- ----------- ---------- -----------
Revenue 1,886 1,959 (4)% (3)%
Adjusted EBITDA 67 117 (43)% (42)%
Adjusted EBITDA margin 3.6% 6.0% (240) bps (240) bps
Depreciation on right-of-use
assets (39) (38)
Depreciation on other assets (13) (13)
Amortisation (12) (9)
Adjusted EBIT 3 57 (95)% (95)%
------------------------------- ----------- ----------- ---------- -----------
Adjusted EBIT margin 0.2% 2.9% (270) bps (270) bps
Adjusting items to EBIT (7) (6)
------------------------------- ----------- ----------- ---------- -----------
EBIT (4) 51 n/a n/a
------------------------------- ----------- ----------- ---------- -----------
EBIT margin (0.2)% 2.6% (280) bps (280) bps
Cash flow
------------------------------- ----------- ----------- ---------- -----------
Adjusted EBITDAR 69 119 (42)% (41)%
Adjusted EBITDAR margin 3.7% 6.1% (240) bps (240) bps
Cash payments of leasing
costs, debt & interest (48) (43)
Other non-cash items in EBIT 2 2
------------------------------- ----------- ----------- ---------- -----------
Operating cash flow 23 78 (71)% (70)%
------------------------------- ----------- ----------- ---------- -----------
Operating cash flow margin 1.2% 4.0% (280) bps (270) bps
Capital expenditure (24) (20)
Adjusting items to cash flow (1) -
----------- ---------- -----------
Free cash flow before working
capital (2) 58 n/a n/a
Working capital (47) (31)
Segmental free cash flow (49) 27 n/a n/a
------------------------------- ----------- ----------- ---------- -----------
Revenue declined by (3)% on a currency neutral basis, with
like-for-like sales decline of (7)%. Against three years ago,
currency neutral sales grew +17%, driven by +10% like-for-like
growth. During the period, we opened one store, while online share
of business was broadly stable compared to last year.
Mobile sales saw good growth due to new product launches and
successful marketing and digital campaigns. All other categories
saw some level of decline, but remain significantly stronger than
three years ago.
Compared to last year, the Nordic market declined around (3)%
but it is +15% larger than three years ago. Our market share was
28.0% during the half, down (50)bps compared to last year and
stable compared to three years ago.
Gross margin declined (200)bps, as the market was characterised
by a number of competitors putting in place aggressive growth
strategies to gain share in market that is structurally bigger
following the pandemic; the excess stock bought into market was
then cleared at very low prices. Against this backdrop, we
deliberately kept pricing competitive to preserve market share in
what we believe is a temporary period of high competitiveness. The
operating expense to sales ratio worsened by (70)bps due to
operating deleverage and a small increase in absolute costs as
additional costs from new stores, increased energy prices and
depreciation were offset by lower IT costs.
As a result, adjusted EBIT decreased by GBP(54)m to GBP3m.
In the period, adjusting items to EBIT totalled GBP(7)m, this
was almost entirely due to the amortisation of acquisition
intangibles which had no cash impact. In addition, there was GBP1m
of cash exceptionals for restructuring costs. EBIT decreased to
GBP(4)m.
The operating cash flow decreased by (71)% to GBP23m, driven by
the lower profit outturn. Capital expenditure was GBP24m, with
significant areas of expenditure including our Next Generation
Retail omnichannel platform and store refits. The total spend was
up slightly on last year due to timing of payments. Working capital
outflow of GBP(47)m was due to holding changes in timing of stock
buy-in and the associated timing of VAT payments.
Greece
Currency
H1 2022/23 H1 2021/22 Reported neutral %
GBPm GBPm % change change
------------------------------- ----------- ----------- ---------- -----------
Income Statement
------------------------------- ----------- ----------- ---------- -----------
Revenue 295 280 5% 5%
Adjusted EBITDA 13 22 (41)% (43)%
Adjusted EBITDA margin 4.4% 7.9% (350) bps (370) bps
Depreciation on right-of-use
assets (7) (7)
Depreciation on other assets (3) (3)
Amortisation (2) (1)
Adjusted EBIT 1 11 (91)% (91)%
------------------------------- ----------- ----------- ---------- -----------
Adjusted EBIT margin 0.3% 3.9% (360) bps (350) bps
Adjusting items to EBIT - -
------------------------------- ----------- ----------- ---------- -----------
EBIT 1 11 (91)% (91)%
------------------------------- ----------- ----------- ---------- -----------
EBIT margin 0.3% 3.9% (360) bps (350) bps
Cash flow
------------------------------- ----------- ----------- ---------- -----------
Adjusted EBITDAR 14 23 (39)% (43)%
Adjusted EBITDAR margin 4.7% 8.2% (350) bps (370) bps
Cash payments of leasing
costs, debt & interest (10) (8)
Other non-cash items in EBIT - -
------------------------------- ----------- ----------- ---------- -----------
Operating cash flow 4 15 (73)% (73)%
------------------------------- ----------- ----------- ---------- -----------
Operating cash flow margin 1.4% 5.4% (400) bps (390) bps
Capital expenditure (4) (7)
Adjusting items to cash flow - -
----------- ---------- -----------
Free cash flow before working - 8
capital n/a n/a
Working capital 18 (1)
Segmental free cash flow 18 7 157% 171%
------------------------------- ----------- ----------- ---------- -----------
Revenue increased +5% on a currency neutral basis, with
like-for-like sales growth of +4%. Against three years ago,
like-for-like revenue is up +25%. During the period we opened one
outlet store and relocated two stores. Online (including call
centre) share of sales was broadly stable compared to last
year.
Mobile performed strongly mainly due to Apple phone launches.
Computing and Consumer Electronics sales fell compared to the
strong sales last year when sales benefited from government
subsidies for students. Cooling and air conditioning sales were
partially aided by start of a government subsidy programme, but
this also saw high promotions and mix shift towards lower end
products. This programme continues in the second half, when we
expect more positive impact on higher end product sales.
Gross margin declined (210)bps over prior year as increases in
cost of goods were not fully passed on to customers due to high
stock positions and competitive intensity in the market, the
increased mix of Mobile which has a lower gross margin, and
promotions on delivery and installation. Operating expense ratio
worsened by (150)bps, mainly due to increased energy costs,
increased colleague reward and removal of government rent
subsidies. As a result, adjusted EBIT decreased to GBP1m. There
were no adjusting items to EBIT.
The operating cash flow was GBP4m, down GBP(11)m from the prior
year due to lower operating profit. Capital expenditure was GBP4m,
with significant areas of expenditure including stores, IT and
distribution. Working Capital was an GBP18m inflow driven by
increased creditors, as a result of increased stock in order to
secure availability for Black Friday and the government subsidy
programs.
Finance Costs
Interest on lease liabilities was GBP(34)m, a slight decrease on
prior year due to timing of amortisation on the lease portfolio;
the cash impact of this interest is included within segmental free
cash flow.
The adjusted net finance costs were higher than last year as the
Group moved into an average net debt position. The net cash impact
of these costs was GBP(13)m, from GBP(7)m in the prior year.
The finance costs on the defined benefit pension scheme is an
adjusting item and is flat year-on-year in line with the
assumptions used in the valuation of the pension obligations.
H1 2022/23 H1 2021/22
GBPm GBPm
---------------------------------- ----------- -----------
Interest on lease liabilities (34) (36)
Finance income 1 1
Finance costs (13) (8)
---------------------------------- ----------- -----------
Adjusted net finance costs (46) (43)
---------------------------------- ----------- -----------
Finance costs on defined benefit
pension schemes (4) (4)
---------------------------------- ----------- -----------
Net finance costs (50) (47)
---------------------------------- ----------- -----------
Tax
A tax rate of 20% has been applied to the adjusted half year
results. Thich is lower than the prior half year adjusted rate of
35% due to a lower proportion of International profits and because
the prior year included the deferred tax impact of the change in
the UK tax rate to 25% from 19%. The cash tax paid in the half year
period was GBP24m, up from GBP6m in the prior year which is
primarily due to timing of Nordic payments.
The expected full year adjusted effective tax rate at 25% is
slightly lower than the prior full year rate of 27% due to a lower
proportion of international profits (which are taxed at a higher
rate than the UK).
The half year adjusting items tax charge of GBP15m includes the
derecognition of deferred tax assets relating to tax losses. The
adjusting items tax credit of GBP10m for the half year ended 30
October 2021 included the benefit of rebasing deferred tax assets
relating to tax losses to the future UK tax rate of 25%.
Cash flow
H1 2021/22 Currency
H1 2022/23 GBPm Reported neutral
GBPm (restated) % change % change
----------------------------------- ----------- ------------ ---------- ----------
Operating cash flow 60 131 (54)% (54)%
Capital expenditure (56) (51) 10%
Adjusting items to cash flow (25) 16 n/a
Free cash flow before working
capital (21) 96
Working capital (28) 102
Segmental free cash flow (49) 198 n/a n/a
Cash tax paid (24) (6)
Cash interest paid (13) (7)
----------------------------------- ----------- ------------ ---------- ----------
Free cash flow (86) 185 n/a n/a
----------------------------------- ----------- ------------ ---------- ----------
Dividend (24) (34)
Purchase of own shares - employee
benefit trust (4) (28)
Pension (39) (39)
Other 4 (3)
----------------------------------- ----------- ------------ ---------- ----------
Movement in net cash (149) 81 n/a n/a
----------------------------------- ----------- ------------ ---------- ----------
Opening net cash / (debt) 44 169
----------------------------------- ----------- ------------ ---------- ----------
Closing net cash / (debt) (105) 250 n/a n/a
----------------------------------- ----------- ------------ ---------- ----------
Segmental free cash flow was an outflow of GBP(49)m (H1 2021/22:
inflow of GBP198m) and interest and tax outflows totalled GBP(37)m
as described above, resulting in a free cash outflow of GBP(86)m
(H1 2021/22: inflow of GBP185m).
A GBP24m (2.15p per share) final dividend for the 2021/22
financial year was approved by shareholders and paid during the
period. The employee benefit trust acquired GBP4m of shares to
satisfy share awards to colleagues.
Pension contributions of GBP39m (1H 2021/22: GBP39m) were flat
with prior year and in line with the contribution plan agreed with
the pension fund Trustees.
Other movements predominantly relate to currency translation
differences.
The closing net debt position was GBP(105)m, compared to a net
cash position of GBP250m at 31 October 2021. This included GBP30m
of restricted cash (30 October 2021: GBP33m). The average net debt
for the half-year period was GBP(114)m, compared to an average net
cash position of GBP290m in H1 2021/22.
The Board has declared an Interim dividend of 1.00p per ordinary
share for the half year to 29 October 2022. The dividend will be
paid on 27 January 2023 to shareholders registered at the close of
business on 30 December 2022. The ex-dividend date will be 29
December.
Balance sheet
29 October 30 October 30 April 2022
2022 2021
GBPm GBPm GBPm
----------------------- ----------- ----------- --------------
Goodwill 2,296 2,836 2,814
Other fixed assets 1,520 1,555 1,554
Working capital (319) (587) (342)
Net cash / (debt) (105) 250 44
Net lease liabilities (1,231) (1,223) (1,263)
Pension (251) (416) (257)
Deferred tax 23 97 74
Provisions (44) (62) (59)
Other (42) (68) (64)
----------------------- ----------- ----------- --------------
Net assets 1,847 2,382 2,501
----------------------- ----------- ----------- --------------
Goodwill declined GBP(518)m during the half-year ended 29
October 2022, of which GBP(511)m related to an impairment over
goodwill allocated to UK & Ireland, primarily driven by a
material increase in the discount rate used as explained in the
UK&I performance review. Currency revaluations of GBP(7)m
impacted goodwill allocated to Nordics.
Other fixed assets decreased by GBP(34)m since 30 April 2022 as
capital expenditure and the present value of lease renewals were
more than offset by depreciation and amortisation of GBP(154)m.
29 October 30 October 30 April 2022
2022 2021
GBPm GBPm GBPm
-------------------------------- ----------- ----------- --------------
Inventory 1,750 1,580 1,286
Trade Receivables 361 342 336
Trade Payables (2,181) (2,134) (1,614)
-------------------------------- ----------- ----------- --------------
Trade working capital (70) (212) 8
Other Receivables 360 247 293
Other Payables (775) (843) (850)
Network commission receivables
and contract assets 161 233 190
Derivatives 5 (12) 17
-------------------------------- ----------- ----------- --------------
Working capital (319) (587) (342)
-------------------------------- ----------- ----------- --------------
At half year-end, total working capital was GBP(319)m (H1
2021/22: GBP(587)m). Group inventory was GBP1,750m, higher than 30
October 2021 as the Group invested in intake to ensure availability
for both peak and the 2022 FIFA World Cup, while also lapping
global supply chain constraints experienced in the prior year. The
increased stock resulted in stock days increasing from 56 to 63.
Trade payable days increased from 73 to 80 since 30 October 2021 as
trade payables increased by +GBP47m to GBP(2,181)m (H1 2021/22:
GBP(2,134)m) due to the additional stock purchases.
Other receivables increased by +GBP113m (H1 2021/22: GBP247m)
since 30 October 2021 due to additional accrued income that relates
to handset receivables following the switch in iD customer
ownership.
Other payables fell by GBP68m due to lower VAT payable.
Lease liabilities are flat against 30 October 2021 as the store
portfolio has now normalised following the closure of Carphone
Warehouse stores in previous periods with all Ireland stores now
exited and only a handful remaining within the UK. The remaining
non-trading leases continue to expire throughout the period.
The IAS 19 accounting deficit of the defined benefit section of
the pension scheme amounted to GBP250m (FY 2021/22: GBP257m, H1
2021/22: GBP416m). Contributions during the period under the terms
of the deficit reduction plan amounted to GBP39m (H1 2021/22:
GBP39m).
The deficit is broadly flat to 30 April 2022 as the declining
market value of the underlying assets was offset by a decrease in
liability due to higher discount rates linked to long-term bond
yield returns.
During the period, the liability-driven investments held by
pension scheme functioned as intended, but in order to provide
additional collateral in the event of a further sudden spike in
bond yields, the Group put in place an arrangement that allowed
short term lending to the scheme. This facility was not utilised
and has now terminated.
29 October 30 October 30 April 2022
2022 2021
GBPm GBPm GBPm
--------------------------------- ---------- ---------- -------------
Net cash / (debt) (105) 250 44
Restricted cash (30) (33) (30)
Net lease liabilities (1,231) (1,223) (1,263)
Pension liability (251) (416) (257)
Working capital facilities - - -
--------------------------------- ---------- ---------- -------------
Total closing indebtedness (1,617) (1,422) (1,506)
Less: year-end net cash / (debt) 105 (250) (44)
Add: average net cash / (debt) (114) 290 290
--------------------------------- ---------- ---------- -------------
Total average indebtedness (1,626) (1,382) (1,260)
--------------------------------- ---------- ---------- -------------
As at 29 October 2022 the Group had net debt of GBP(105)m (H1
2021/22: net cash GBP250m, FY2021/22: net cash GBP44m) and average
net debt throughout the period of GBP(114)m (H1 2021/22: net cash
GBP290m, FY2021/22: net cash GBP290m). In October 2022 the Group
secured two additional short term credit facilities totalling
GBP140m that expire in October 2023. The Group also has access to
GBP536m across two longer term revolving credit facilities that
expire in October 2026, taking total available lines of credit from
revolving credit facilities to GBP676m. The covenants on the debt
facilities are fixed charge cover >1.75x (1H 2022/23: 1.98x) and
net debt leverage <2.5x (1H 2022/23: 0.44x).
Bank covenant ratios 29 October 30 October 30 April 2022
2022 2021
GBPm GBPm GBPm
(restated) (restated)
Operating cashflow (last 12 months) 304 336 375
Cash payments of leasing costs, debt
& interest 265 285 263
--------------------------------------- ---------- ----------- -------------
Operating cash flow plus cash payments
of leasing 569 621 638
Fixed charges (cash lease costs + cash
interest) 288 304 280
--------------------------------------- ---------- ----------- -------------
Fixed charge cover 1.98x 2.04x 2.28x
--------------------------------------- ---------- ----------- -------------
Net cash excluding restricted funds (135) 217 14
--------------------------------------- ---------- ----------- -------------
Net debt leverage 0.44x (0.65)x (0.04)x
--------------------------------------- ---------- ----------- -------------
The deferred tax asset decreased by GBP(51)m since year end,
largely as a result of the derecognition of the UK deferred tax
asset, which has been prudently assessed based on the current
macroeconomic uncertainty.
Provisions primarily relate to property, reorganisation and
sales provisions. The balance reduced by GBP(18)m in the period as
the utilisation of reorganisation provisions for central and retail
operations, sales provisions and property related onerous contract
costs for closed stores more than offset additions. Onerous
property contract costs of GBP5m were released during the period
following the completion of negotiations to exit stores closed as
part of previously announced property rationalisation projects.
Comprehensive income / Changes in equity
Total equity for the Group decreased from GBP2,501m to GBP1,847m
in the period, driven by a loss of GBP(560)m, the actuarial loss
(net of taxation) on the defined benefit pension deficit for the UK
pensions scheme of GBP(71)m, dividends paid of GBP(24)m, hedging
losses of GBP(2)m, GBP(2)m for the translation of legacy overseas
operations now disposed of and purchase of own shares by the EBT of
GBP(4)m. This was marginally offset by movements in relation to
share schemes of GBP9m.
Share count
The weighted average number of shares used for basic earnings
reduced by 28m to 1,102m as the weighted average number of shares
in issue fell 32m following the repurchase of shares in 2021/22 and
the average number of shares held by the Group EBT to satisfy
colleague shareholder schemes increased.
The dilutive effect of share options and other incentive schemes
decreased as several schemes' performance declined against vesting
conditions.
29 October 30 October 30 April
2022 2021 2022
Million Million Million
---------------------------------------- ---------- ---------- --------
Weighted average number of shares
Average shares in issue 1,133 1,166 1,165
Less average holding by Group EBT and
treasury shares held by Company (31) (25) (35)
----------------------------------------- ---------- ---------- --------
For basic earnings / (loss) per share 1,102 1,141 1,130
Dilutive effect of share options and
other incentive schemes 18 49 45
----------------------------------------- ---------- ---------- --------
For diluted earnings / (loss) per share 1,120 1,190 1,175
----------------------------------------- ---------- ---------- --------
Prior period restatement
As disclosed in the Performance Review the adjusted results and
adjusting items for the comparative periods ended 30 October 2021
and 30 April 2022 have been restated to reflect the updated
adjusting items policy which is used to determine whether an item
is to be classified as adjusting.
Management believes the more stringent classification policy
provides greater clarity on the current and future performance of
the Group's ongoing omnichannel retail operations.
The impact of the restatement on the Group's adjusted results
for the respective comparative periods is outlined below with
additional reconciliations and information on the revised policy
included within the glossary and definitions section of this
report. There is no impact on statutory results as a result of the
restatements.
26 weeks ended 30 October 2021
H1 2021/22
as previously H1 2021/22
reported Policy adjustment restated
GBPm GBPm GBPm
----------------------------------- --------------- ------------------ -----------
Income Statement
----------------------------------- --------------- ------------------ -----------
Adjusted revenue 4,783 2 4,785
Adjusting items to revenue 2 (2) -
------------------------------------ --------------- ------------------ -----------
Revenue 4,785 - 4,785
Adjusted EBITDA 247 (3) 244
Adjusted EBITDA margin 5.2% (10) bps 5.1%
Depreciation on right-of-use
assets (95) - (95)
Depreciation on other assets (33) - (33)
Amortisation (28) - (28)
Adjusted EBIT 91 (3) 88
------------------------------------ --------------- ------------------ -----------
Adjusted EBIT margin 1.9% (10) bps 1.8%
Interest on lease liabilities (36) - (36)
Finance income 1 - 1
Adjusted finance costs (8) - (8)
------------------------------------ --------------- ------------------ -----------
Adjusted PBT 48 (3) 45
Adjusted PBT margin 1.0% (10) bps 0.9%
Adjusted tax (16) - (16)
Adjusted Profit after tax 32 (3) 29
Adjusted EPS 2.8p (0.3)p 2.5p
Cash flow
----------------------------------- --------------- ------------------ -----------
Adjusted EBITDAR 255 (3) 252
Adjusted EBITDAR margin 5.3% - bps 5.3%
Cash payments of leasing costs,
debt & interest(1) (134) - (134)
Other non-cash items in EBIT 13 - 13
------------------------------------ --------------- ------------------ -----------
Operating cash flow (1) 134 (3) 131
------------------------------------ --------------- ------------------ -----------
Operating cash flow margin 2.8% (10) bps 2.7%
Capital expenditure (51) - (51)
Adjusting items to cash flow(1) 10 6 16
--------------- ------------------ -----------
Free cash flow before working
capital 93 3 96
Working capital 105 (3) 102
Segmental free cash flow 198 - 198
Cash tax paid (6) - (6)
Cash interest paid (7) - (7)
------------------------------------ --------------- ------------------ -----------
Free cash flow 185 - 185
------------------------------------ --------------- ------------------ -----------
Dividend (34) - (34)
Purchase of own shares - employee
benefit trust (28) - (28)
Pension (39) - (39)
Other (3) - (3)
------------------------------------ --------------- ------------------ -----------
Movement in net cash 81 - 81
------------------------------------ --------------- ------------------ -----------
Net cash 250 - 250
------------------------------------ --------------- ------------------ -----------
Year ended 30 April 2022
2021/22
as previously 2021/22
reported Policy adjustment restated
GBPm GBPm GBPm
----------------------------------- --------------- ------------------ ----------
Income Statement
----------------------------------- --------------- ------------------ ----------
Adjusted revenue 10,122 22 10,144
Adjusting items to revenue 22 (22) -
------------------------------------ --------------- ------------------ ----------
Revenue 10,144 - 10,144
Adjusted EBITDA 588 6 594
Adjusted EBITDA margin 5.8% +10 bps 5.9%
Depreciation on right-of-use
assets (190) - (190)
Depreciation on other assets (62) - (62)
Amortisation (62) - (62)
Adjusted EBIT 274 6 280
------------------------------------ --------------- ------------------ ----------
Adjusted EBIT margin 2.7% +10 bps 2.8%
Interest on lease liabilities (70) - (70)
Finance income 2 - 2
Adjusted finance costs (20) - (20)
------------------------------------ --------------- ------------------ ----------
Adjusted PBT 186 6 192
Adjusted PBT margin 1.8% +10 bps 1.9%
Adjusted tax (51) (1) (52)
Adjusted Profit after tax 135 5 140
Adjusted EPS 11.9p 0.5p 12.4p
Cash flow
----------------------------------- --------------- ------------------ ----------
Adjusted EBITDAR 602 6 608
Adjusted EBITDAR margin 5.9% +10 bps 6.0%
Cash payments of leasing costs,
debt & interest(1) (263) - (263)
Other non-cash items in EBIT 22 8 30
------------------------------------ --------------- ------------------ ----------
Operating cash flow (1) 361 14 375
------------------------------------ --------------- ------------------ ----------
Operating cash flow margin 3.6% +10 bps 3.7%
Capital expenditure (133) - (133)
Adjusting items to cash flow(1) (33) 10 (23)
--------------- ------------------ ----------
Free cash flow before working
capital 195 24 219
Working capital (88) (24) (112)
Segmental free cash flow 107 - 107
Cash tax paid (18) - (18)
Cash interest paid (17) - (17)
------------------------------------ --------------- ------------------ ----------
Free cash flow 72 - 72
------------------------------------ --------------- ------------------ ----------
Dividend (46) - (46)
Purchase of own shares - share
buyback (32) - (32)
Purchase of own shares - employee
benefit trust (41) - (41)
Pension (78) - (78)
Other - -
----------------------------------- --------------- ------------------ ----------
Movement in net cash (125) - (125)
------------------------------------ --------------- ------------------ ----------
Net cash 44 - 44
------------------------------------ --------------- ------------------ ----------
Financial information
Consolidated income statement
26 weeks 26 weeks Year
ended ended ended
29 October 30 October 30 April
2022 2021 2022
Unaudited Unaudited Audited
Note GBPm GBPm GBPm
----------------------------------------------- ---- ----------- ----------- ---------
Revenue 2 4,473 4,785 10,144
----------------------------------------------- ---- ----------- ----------- ---------
Profit before impairment of goodwill, interest
and tax 13 95 222
----------------------------------------------- ---- ----------- ----------- ---------
Impairment of goodwill 8 (511) - -
----------------------------------------------- ---- ----------- ----------- ---------
(Loss) / profit before interest and tax 2 (498) 95 222
----------------------------------------------- ---- ----------- ----------- ---------
Finance income 1 1 2
Finance costs (51) (48) (98)
----------------------------------------------- ---- ----------- ----------- ---------
Net finance costs (50) (47) (96)
----------------------------------------------- ---- ----------- ----------- ---------
(Loss) / profit before tax (548) 48 126
Income tax expense (12) (6) (55)
----------------------------------------------- ---- ----------- ----------- ---------
(Loss) / profit after tax for the period (560) 42 71
(Loss) / earnings per share (pence) 3
----------------------------------------------- ---- ----------- ----------- ---------
Basic (50.8)p 3.7p 6.3p
Diluted (50.8)p 3.5p 6.0p
Financial information
Consolidated statement of comprehensive income
26 weeks 26 weeks Year
ended ended ended
29 October 30 October 30 April
2022 2021 2022
Unaudited Unaudited Audited
GBPm GBPm GBPm
----------------------------------------------------------------- ----------- ----------- ---------
(Loss) / profit after tax for the period (560) 42 71
Items that may be reclassified to the income
statement in subsequent periods:
Cash flow hedges
Fair value movements recognised in other comprehensive
income 14 (9) 14
Reclassified and reported in income statement (5) 11 (28)
Tax on movements on cash flow hedges - - (3)
Exchange loss arising on translation of foreign
operations - (19) (33)
9 (17) (50)
----------------------------------------------------------------- ----------- ----------- ---------
Items that will not be reclassified to the
income statement in subsequent periods:
Actuarial (loss) / gain on defined
benefit pension schemes: * UK (29) 32 156
* Overseas - - 3
Tax on movements on defined benefit pension
schemes (42) (9) 8
(71) 23 167
----------------------------------------------------------------- ----------- ----------- ---------
Other comprehensive (expense) / income for
the period (taken to equity) (62) 6 117
----------------------------------------------------------------- ----------- ----------- ---------
Total comprehensive (expense) / income for
the period (622) 48 188
----------------------------------------------------------------- ----------- ----------- ---------
Financial information
Consolidated balance sheet
29 October 30 October 30 April
2022 Unaudited 2021 Unaudited 2022 Audited
Note GBPm GBPm GBPm
----------------------------------------- ---- --------------- --------------- -------------
Non-current assets
Goodwill 8 2,296 2,836 2,814
Intangible assets 374 430 385
Property, plant & equipment 160 158 162
Right-of-use assets 986 967 1,007
Lease receivable 5 3 3
Trade and other receivables 97 136 123
Deferred tax assets 228 263 282
----------------------------------------- ---- --------------- --------------- -------------
4,146 4,793 4,776
----------------------------------------- ---- --------------- --------------- -------------
Current assets
Inventory 1,750 1,580 1,286
Lease receivable 1 1 1
Trade and other receivables 785 686 696
Derivative assets 6 16 28 28
Cash and cash equivalents 138 255 126
2,690 2,550 2,137
Total assets 6,836 7,343 6,913
----------------------------------------- ---- --------------- --------------- -------------
Current liabilities
Trade and other payables (2,856) (2,871) (2,368)
Derivative liabilities 6 (11) (40) (11)
Income tax payable (42) (68) (64)
Loans and other borrowings (1) (5) (2)
Lease liabilities (213) (209) (210)
Provisions (36) (52) (48)
(3,159) (3,245) (2,703)
----------------------------------------- ---- --------------- --------------- -------------
Non-current liabilities
Trade and other payables (100) (106) (96)
Loans and other borrowings (242) - (80)
Lease liabilities (1,024) (1,018) (1,057)
Retirement benefit obligations 5 (251) (416) (257)
Deferred tax liabilities (205) (166) (208)
Provisions (8) (10) (11)
(1,830) (1,716) (1,709)
Total liabilities (4,989) (4,961) (4,412)
----------------------------------------- ---- --------------- --------------- -------------
Net assets 1,847 2,382 2,501
----------------------------------------- ---- --------------- --------------- -------------
Capital and reserves
Share capital 1 1 1
Share premium account 2,263 2,263 2,263
Other reserves (800) (800) (803)
Accumulated profits 383 918 1,040
Equity attributable to equity holders of
the parent company 1,847 2,382 2,501
----------------------------------------- ---- --------------- --------------- -------------
Financial information
Consolidated statement of changes in equity
Share
Share premium Other Accumulated Total
capital account reserves profits equity
Note GBPm GBPm GBPm GBPm GBPm
--------------------------------- ---- -------- -------- --------- ----------- -------
At 30 April 2022 1 2,263 (803) 1,040 2,501
Loss for the period - - - (560) (560)
Other comprehensive income
/ (expense) recognised directly
in equity - - 9 (71) (62)
--------------------------------- ---- -------- -------- --------- ----------- -------
Total comprehensive income
/ (expense)
for the period - - 9 (631) (622)
Amounts transferred to the
carrying value of inventory
purchased during the year - - (11) - (11)
Amounts transferred to the
income statement during
the year - - (2) - (2)
Net movement in relation
to share schemes - - 11 (2) 9
Purchase of own shares -
employee benefit trust - - (4) - (4)
Equity dividends 4 - - - (24) (24)
At 29 October 2022 1 2,263 (800) 383 1,847
--------------------------------- ---- -------- -------- --------- ----------- -------
Share
Share premium Accumulated Total
capital account Other reserves profits equity
Note GBPm GBPm GBPm GBPm GBPm
------------------------------ ---- -------- -------- -------------- ----------- -------
At 1 May 2021 1 2,263 (764) 881 2,381
Profit for the period - - - 42 42
Other comprehensive (expense)
/ income recognised directly
in equity - - (17) 23 6
------------------------------ ---- -------- -------- -------------- ----------- -------
Total comprehensive (expense)
/ income for the period - - (17) 65 48
Amounts transferred to the
carrying value of inventory
purchased during the year - - 1 - 1
Net movement in relation
to share schemes - - 8 6 14
Purchase of own shares -
employee benefit trust - - (28) - (28)
Equity dividends 4 - - - (34) (34)
At 30 October 2021 1 2,263 (800) 918 2,382
------------------------------ ---- -------- -------- -------------- ----------- -------
Financial information
Consolidated statement of changes in equity
Share
Share premium Accumulated Total
capital account Other reserves profits equity
GBPm GBPm GBPm GBPm GBPm
------------------------------ -------- -------- -------------- ----------- -------
At 1 May 2021 1 2,263 (764) 881 2,381
Profit for the period - - - 71 71
Other comprehensive (expense)
/ income recognised directly
in equity - - (50) 167 117
------------------------------- -------- -------- -------------- ----------- -------
Total comprehensive (expense)
/ income for the period - - (50) 238 188
Amounts transferred to the
carrying value of inventory
purchased during the year - - 28 - 28
Net movement in relation
to share schemes - - 24 (1) 23
Purchase of own shares -
employee benefit trust - - (41) - (41)
Purchase of own shares -
share buyback - - (32) - (32)
Cancellation of treasury
shares - - 32 (32) -
Equity dividend - - - (46) (46)
At 30 April 2022 1 2,263 (803) 1,040 2,501
------------------------------- -------- -------- -------------- ----------- -------
Financial information
Consolidated cash flow statement
26 weeks 26 weeks Year
ended ended ended
29 October 30 October 30 April
2022 2021 2022
Unaudited Unaudited Audited
Note GBPm GBPm GBPm
------------------------------------------------- ---- ----------- ----------- ---------
Operating activities
Cash generated from operations 7 145 389 524
Special contributions to defined benefit pension
scheme (39) (39) (78)
Income tax paid (24) (6) (18)
-------------------------------------------------- ---- ----------- ----------- ---------
Net cash flows from operating activities 82 344 428
-------------------------------------------------- ---- ----------- ----------- ---------
Investing activities
Net cash outflow arising from acquisitions - (2) (2)
Proceeds on sale of business - 1 1
Acquisition of property, plant & equipment
and other intangibles (56) (51) (133)
Net cash flows from investing activities (56) (52) (134)
-------------------------------------------------- ---- ----------- ----------- ---------
Financing activities
Interest paid (47) (43) (87)
Capital repayment of lease liabilities (103) (98) (208)
Purchase of own shares - employee benefit trust (4) (28) (41)
Purchase of own shares - share buyback - - (32)
Equity dividends paid 4 (24) (34) (46)
Drawdown of borrowings 157 - 80
Facility arrangement fees paid (1) (6) (6)
Net cash flows from financing activities (22) (209) (340)
-------------------------------------------------- ---- ----------- ----------- ---------
Increase/(decrease) in cash and cash equivalents
and bank overdrafts 4 83 (46)
-------------------------------------------------- ---- ----------- ----------- ---------
Cash and cash equivalents and bank overdrafts
at beginning of the period 124 169 169
Currency translation differences 9 (2) 1
-------------------------------------------------- ---- ----------- ----------- ---------
Cash and cash equivalents and bank overdrafts
at end of the period 137 250 124
-------------------------------------------------- ---- ----------- ----------- ---------
Financial information
Notes to the financial information
1 Accounting policies
(a) Basis of preparation
The interim financial information for the 26 weeks ended 29
October 2022 was approved by the directors on 14 December 2022. The
interim financial information, which is a condensed set of
financial statements, has been prepared in accordance with the
Listing Rules of the Financial Conduct Authority and International
Accounting Standard 34 "Interim Financial Reporting" (IAS 34) as
adopted by the UK and has been prepared on the going concern basis
as described further below and in the section on risks to achieving
the Group's objectives.
The accounting policies adopted are those set out in the Group's
Annual Report and Accounts 2021/22 which were prepared in
accordance with IFRS as adopted by the UK. New accounting
standards, amendments to standards and IFRIC interpretations which
became applicable during the period were either not relevant or had
no impact on the Group's net results or net assets.
Going Concern
Going concern is the basis of preparation of the financial
statements that assumes an entity will remain in operation for a
period of at least 12 months from the date of approval of these
condensed financial statements.
In their consideration of going concern, the directors have
reviewed the Group's future cash forecasts and profit projections,
which are based on market data and past experience. The directors
are of the opinion that the Group's forecasts and projections,
which take into account reasonably possible changes in trading
performance including the impact of increased uncertainty and
inflation in the wider economic environment, show that the Group is
able to operate within its current facilities and comply with its
banking covenants for at least 12 months from the date of approval
of these condensed financial statements. In arriving at their
conclusion that the Group has adequate financial resources, the
directors considered the level of borrowings and facilities and
that the Group has a robust policy towards liquidity and cash flow
management.
As a result of the uncertainties surrounding the forecasts due
to the current macroeconomic environment, the Group has also
modelled a reasonable worst case scenario with sales risk of c. 5%
next year declining to 2% by 2025/26 applied. This sales risk is
able to be offset with controllable mitigations across various
operating expense line items and hence in this reasonable worst
case, the Group does not breach any of the Group's facilities or
banking covenants. Further, the Group has numerous other
mitigations available (in addition to those applied to the
reasonable worst case) which are considered controllable should
sales drop below the reasonable worst case, before requiring
additional sources of financing in excess of those that are
committed. Such a scenario, and the sequence of events which could
lead to it, is considered to be remote.
As a result, the Board believes that the Group is well placed to
manage its financing and other significant risks satisfactorily and
that the Group will be able to operate within the level of its
facilities for at least 12 months from the date of approval of
these condensed financial statements. For this reason, the Board
considers it appropriate for the Group to adopt the going concern
basis in preparing the interim financial information. The long-term
effect of macroeconomic factors is uncertain and should the impact
on trading conditions be more prolonged or severe than what the
directors consider to be reasonably possible, the Group would need
to implement additional operational or financial measures.
Alternative performance measures
In addition to IFRS measures, the Group uses certain alternative
performance measures that are considered to be additional
informative measures of ongoing trading performance of the Group
and are consistent with how performance is measured internally. The
alternative performance measures used by the Group are included
within the glossary and definitions section. This includes further
information on the definitions, purpose and reconciliations to IFRS
measures of those alternative performance measures that are used
for internal reporting and presented to the Group's Chief Operating
Decision Maker (CODM). The CODM has been determined to be the
Board.
1 Accounting policies (continued)
(a) Basis of preparation (continued)
Further information
The interim financial information uses definitions that are set
out within the glossary and definitions section of this
document.
The interim financial information is unaudited and does not
constitute statutory accounts within the meaning of Section 434 of
the Companies Act 2006, but has been reviewed by the auditor. The
financial information for the year ended 30 April 2022 does not
constitute the company's statutory accounts for that period but has
been extracted from those accounts which have been filed with the
Registrar of Companies and are also available on the Group's
corporate website www.currysplc.com .
Currys plc and its subsidiaries have changed auditors for the
financial year 2022/23 from Deloitte LLP to KPMG LLP as explained
in the Audit Committee report in the Group's Annual Report and
Accounts 2021/22. Deloitte LLP reported on the Group's financial
accounts for the year ended 30 April 2022. Their report was
unqualified, did not draw attention to any matters by way of
emphasis, and did not contain statements under Sections 498 (2) or
(3) of the Companies Act 2006.
(b) Key sources of estimation uncertainty and critical
accounting judgements
Critical accounting judgements and estimates used in the
preparation of the financial statements are continually reviewed
and revised as necessary. Whilst every effort is made to ensure
that such judgements and statements are reasonable, by their nature
they are uncertain and as such changes may have a material
impact.
In preparing the condensed consolidated financial statements,
the significant judgements made by management in applying the
Group's accounting policies and key sources of estimation
uncertainty include the impairment of goodwill and deferred tax
recognition within the UK as disclosed below. In addition, key
sources of estimation uncertainty including revenue recognition on
network commissions, UK defined benefit pension scheme assumptions,
impairment of assets at a store level and critical accounting
judgements related to taxation detailed in the Group's Annual
Report and Accounts 2021/22 remain relevant.
Impairment of non-financial assets - Goodwill
As required by IAS 36, goodwill is subject to an impairment
review on an annual basis, or more frequently where indicators of
impairment exist. The Group has considered if indicators of
impairment exist with regard to a number of external factors,
including the recent increases in the long-term risk-free
investment rates and increased uncertainty in the wider
macroeconomic environment. Management concluded that these factors
are indicators of impairment and consequently, a full impairment
review was undertaken per IAS 36 using the value in use ('VIU')
method as detailed in the Group's Annual Report and Accounts
2021/22.
As a result of the impairment review, for the UK & Ireland
where GBP1,840m of goodwill was allocated, a non-cash impairment
charge of GBP511m has been recognised, bringing the goodwill
balance to GBP1,329m. This was mainly due to a material increase in
discount rate reflecting the recent increases in UK government bond
yields, and partly due to the short-to-medium term macroeconomic
uncertainty which has been factored into the Group's business
plans. In accordance with IFRIC 10, the impairment loss recognised
in this period shall not be reversed in a future period. Further
details on the sensitivities and key assumptions are included in
note 8.
1 Accounting policies (continued)
(b) Key sources of estimation uncertainty and critical
accounting judgements (continued)
Deferred tax asset
The Group recognises and regularly remeasures deferred tax
assets for the carry forward of unused tax losses and pension
contributions within the UK, to the extent that future taxable
profit will be available against which unused tax losses and
pension contributions can be utilised. The Group recognised a total
net deferred tax asset of GBP74m at 30 April 2022, which included
GBP61m in the UK relating to unused tax losses and pension
contributions. Given the macroeconomic uncertainty built into the
Group's business plans (used for both the Going Concern and
Goodwill impairment testing), management concluded that an
appropriately prudent judgement is to de-recognise the UK net
deferred tax asset.
2 Segmental analysis
The Group's operating segments reflect the segments routinely
reviewed by the Board and are used to manage performance and
allocate resources. This information is predominantly based on
geographical areas which are either managed separately or have
similar trading characteristics such that they can be aggregated
together into one segment. The Group's operating and reportable
segments have therefore been identified as follows:
-- UK & Ireland, comprising operations of Currys, Carphone Warehouse and iD Mobile;
-- Nordics, operating in Norway, Sweden, Finland, Denmark with
franchise operations in Iceland, Greenland and Faroe Islands;
and
-- Greece, consisting of our operations in Greece and Cyprus.
UK & Ireland, Nordics and Greece are involved in the sale of
consumer electronics and mobile technology products and services,
primarily through stores or online channels.
Transactions between segments are on an arm's length basis.
(a) Segmental results
26 weeks ended 29
October 2022
------------------------ ----------- -------- ----- ------- ------- ------------------------
UK &
Ireland Nordics Greece Eliminations Total
GBPm GBPm GBPm GBPm GBPm
------------------------ ----- -------- ---------- ------- ------- ------------ ----------
External revenue 2,292 1,886 295 - 4,473
Inter-segmental revenue 33 - - (33) -
------------------------------------------ ---------- ------- ------- ------------ ----------
Total revenue 2,325 1,886 295 (33) 4,473
------------------------------------------ ---------- ------- ------- ------------ ----------
(Loss) / profit before
interest and tax (495) (4) 1 - (498)
------------------------------------------ ---------- ------- ------- ------------ ----------
2 Segmental analysis (continued)
(a) Segmental results (continued)
26 weeks ended 30 October 2021
------------------------ ----- -------- ------------ ------------------------------------------
UK & Ireland Nordics Greece Eliminations Total
GBPm GBPm GBPm GBPm GBPm
------------------------ ----- -------- ------------ ------- ------- ------------ ----------
External revenue 2,546 1,959 280 - 4,785
Inter-segmental revenue 32 - - (32) -
----------------------------------------- ------------ ------- ------- ------------ ----------
Total revenue 2,578 1,959 280 (32) 4,785
----------------------------------------- ------------ ------- ------- ------------ ----------
Profit before interest
and tax 33 51 11 - 95
----------------------------------------- ------------ ------- ------- ------------ ----------
Year ended 30 April 2022
------------------------ ------- -------- ------------ ------------------------------------------
UK & Ireland Nordics Greece Eliminations Total
GBPm GBPm GBPm GBPm GBPm
------------------------ ------ -------- ------------ ------- ------- ------------ ----------
External revenue 5,485 4,105 554 - 10,144
Inter-segmental revenue 67 - - (67) -
------------------------------------------- ------------ ------- ------- ------------ ----------
Total revenue 5,552 4,105 554 (67) 10,144
------------------------------------------- ------------ ------- ------- ------------ ----------
Profit before interest
and tax 71 130 21 - 222
------------------------------------------- ------------ ------- ------- ------------ ----------
26 weeks 26 weeks
ended ended Year ended
29 October 30 October 30 April
2022 2021 2022
Note GBPm GBPm GBPm
------------------------------- ---- ----------- ----------- ----------
UK & Ireland before impairment
of goodwill 16 33 71
Impairment of UK & Ireland
goodwill 8 (511) - -
---------------------------------- ---- ----------- ----------- ----------
UK & Ireland (495) 33 71
Nordics (4) 51 130
Greece 1 11 21
---------------------------------- ---- ----------- ----------- ----------
(Loss) / profit before
interest and tax (498) 95 222
Finance income 1 1 2
Finance costs (51) (48) (98)
---------------------------------- ---- ----------- ----------- ----------
(Loss) / profit before
tax (548) 48 126
---------------------------------- ---- ----------- ----------- ----------
(b) Seasonality
The Group's business is highly seasonal, with a substantial
proportion of its revenue and (loss) / profit before interest and
tax generated during its third quarter, which includes Black Friday
and the Christmas and New Year season.
2 Segmental analysis (continued)
(c) Geographical information
Revenues are allocated to countries according to the entity's
country of domicile. Revenue by destination is not materially
different to that shown by domicile. Non-current assets exclude
financial instruments and deferred tax assets.
26 weeks ended 29 October 26 weeks ended 30 October 2021
2022
----------------------------------- --------------------------------------
UK Norway Sweden Other Total UK Norway Sweden Other Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
-------------------- ----- ------ ------ ----- ----- ------ ------- ------- ----- -----
Revenue 2,219 598 652 1,004 4,473 2,464 612 658 1,051 4,785
Non-current
assets at period
end 2,163 569 436 706 3,874 2,819 571 442 656 4,488
Capital expenditure 28 17 3 8 56 24 14 3 10 51
-------------------- ----- ------ ------ ----- ----- ------ ------- ------- ----- -----
Year ended 30 April 2022
------------------------------------
UK Norway Sweden Other Total
GBPm GBPm GBPm GBPm GBPm
-------------------- ----- ------ ------ ----- ------
Revenue 5,299 1,245 1,387 2,213 10,144
Non-current
assets at period
end 2,718 588 457 690 4,453
Capital expenditure 64 32 10 27 133
---------------------------- ----- ------ ------ ----- ------
(d) Disaggregation of revenues
The Group's disaggregated revenue recognised under 'Revenue from
Contracts with Customers' in accordance with IFRS 15 relates to the
following operating segments and revenue streams:
26 weeks ended 29 October 26 weeks ended 30 October 2021
2022
------------------- --------------------------------- ------------------------------------
UK & UK &
Ireland Nordics Greece Total Ireland Nordics Greece Total
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------- -------- ------- ------- ----- --------- -------- -------- -----
Sales of goods 1,982 1,724 268 3,974 2,163 1,788 259 4,210
Commission revenue 114 100 12 226 203 108 9 320
Support services
revenue 117 26 6 149 130 28 8 166
Other services
revenue 78 36 9 123 48 35 4 87
Other revenue 1 - - 1 2 - - 2
------------------- -------- ------- ------- ----- --------- -------- -------- -----
Total revenue 2,292 1,886 295 4,473 2,546 1,959 280 4,785
------------------- -------- ------- ------- ----- --------- -------- -------- -----
Year ended 30 April 2022
----------------------------------
UK &
Ireland Nordics Greece Total
GBPm GBPm GBPm GBPm
------------------- -------- ------- ------- ------
Sales of goods 4,698 3,756 511 8,965
Commission revenue 423 220 18 661
Support services
revenue 239 57 17 313
Other services
revenue 124 72 8 204
Other revenue 1 - - 1
-------------------------- -------- ------- ------- ------
Total revenue 5,485 4,105 554 10,144
-------------------------- -------- ------- ------- ------
3 (Loss) / earnings per share
26 weeks 26 weeks Year
ended ended ended
29 October 30 October 30 April
2022 2021 2022
GBPm GBPm GBPm
---------------------------------------- ----------- ----------- ---------
Total (loss) / profit after tax for
the period (560) 42 71
----------------------------------------- ----------- ----------- ---------
Million Million Million
---------------------------------------- ----------- ----------- ---------
Weighted average number of shares
Average shares in issue 1,133 1,166 1,165
Less average holding by Group EBT and
Treasury shares held by Company (31) (25) (35)
----------------------------------------- ----------- ----------- ---------
For basic (loss) / earnings per share 1,102 1,141 1,130
Dilutive effect of share options and
other incentive schemes 18 49 45
For diluted (loss) / earnings per share 1,120 1,190 1,175
----------------------------------------- ----------- ----------- ---------
Pence Pence Pence
---------------------------------------- ----------- ----------- ---------
Basic (loss) / earnings per share (50.8) 3.7 6.3
Diluted (loss) / earnings per share (50.8) 3.5 6.0
----------------------------------------- ----------- ----------- ---------
Basic and diluted (loss) / earnings per share are based on the
(loss) / profit after tax for the period attributable to equity
shareholders.
4 Dividends
26 weeks 26 weeks Year
ended ended ended
29 October 30 October 30 April
2022 2021 2022
GBPm GBPm GBPm
-------------------------------------------------- ----------- ----------- ---------
Final dividend for the year ended 1 May 2021 of
3.00p - 34 34
Interim dividend for the year ended 30 April 2022
of 1.00p - - 12
Final dividend for the year ended 30 April 2022
of 2.15p 24 - -
Amounts recognised as distributions to equity
shareholders on ordinary shares of 0.1p each 24 34 46
--------------------------------------------------- ----------- ----------- ---------
The proposed interim dividend for the year ending 29 April 2023
is 1.00p per share. The expected cost of this dividend is GBP11m
and incorporates the agreement with the Group's Employee Benefit
Trust to waive its rights to receive dividends.
5 Retirement benefit obligations
29 October 30 October 30 April
2022 2021 2022
GBPm GBPm GBPm
------------------------------------ ---------- ---------- --------
Retirement benefit
obligations * UK 250 416 257
1 - -
* Nordics
------------------- --------------- ---------- ---------- --------
Net obligation 251 416 257
------------------------------------ ---------- ---------- --------
The Group operates a number of defined contribution and defined
benefit pension schemes. The principal scheme operates in the UK
and includes a funded defined benefit section, the assets of which
are held in a separate trustee administered fund. The defined
benefit section of the scheme was closed to future accrual on 30
April 2010. The net obligations of this scheme, calculated in
accordance with IAS 19 "Employee Benefits", are analysed as
follows:
29 October 30 October 30 April
2022 2021 2022
GBPm GBPm GBPm
--------------------------------------------- ---------- ---------- --------
Fair value of plan assets 987 1,586 1,363
Present value of defined benefit obligations (1,237) (2,002) (1,620)
Net obligation - UK (250) (416) (257)
----------------------------------------------- ---------- ---------- --------
The value of obligations is particularly sensitive to the
discount rate applied to liabilities at the assessment date as well
as mortality rates. The defined benefit obligation has declined by
GBP383m since 30 April 2022 primarily as a result of market
conditions impacting the discount rate assumption. The value of the
plan assets is also sensitive to market conditions and has declined
by GBP376m primarily as a result of macroeconomic uncertainty
impacting the return on assets. The scheme's investment strategy
and its investment objectives remain consistent with those adopted
as at 30 April 2022.
The assumptions used in the valuation of obligations are listed
below:
29 October 30 October 30 April
2022 2021 2022
---------------------------------------- ------------- ---------- ---------- --------
Rates per annum:
Discount rate 4.60% 1.80% 3.05%
Rate of increase in pensions in payment - pre April
/ deferred pensions 2006 3.05% 3.25% 3.30%
- post April
2006 2.15% 2.25% 2.25%
Inflation 3.10% 3.35% 3.40%
------------------------------------------------------- ---------- ---------- --------
Mortality rates are based on historical experience and standard
actuarial tables and include an allowance for future improvements
in longevity.
If the discount rate assumption decreased by 3.0% the defined
benefit obligation would increase by approximately GBP920m. If the
assumption increased by 3.0% the defined benefit obligation would
decrease by approximately GBP431m.
If the inflation assumption increased by 1.0% the defined
benefit obligation would increase by approximately GBP157m. If the
assumption decreased by 1.0% the defined benefit obligation would
decrease by approximately GBP141m.
6 Financial instruments, loans and other borrowings
The Group holds the following financial instruments at fair
value:
29 October 30 October 30 April
2022 2021 2022
GBPm GBPm GBPm
--------------------------------- ---------- ---------- --------
Derivative financial assets 16 28 28
Derivative financial liabilities (11) (40) (11)
The significant inputs required to fair value the Group's net
derivatives are observable and are classified as 'Level 2' in the
fair value hierarchy.
Fair values have been arrived at by discounting future cash
flows (where the impact of discounting is material), assuming no
early redemption, or by revaluing forward currency contracts to
period end market rates as appropriate to the instrument.
The Group has accounted for variable consideration for network
commission under IFRS 15 'Revenue from contracts with customers'.
The carrying value of such ongoing network commission receivables
and contract assets (net of commission received at the point of
connection) is GBP161m (30 October 2021: GBP233m, 30 April 2022:
GBP190m).
There have been no transfers of assets or liabilities between
levels of the fair value hierarchy. For all other financial assets
and liabilities, the carrying amount approximates their fair
value.
Committed facilities
In April 2021, the Group refinanced its existing debt with two
revolving credit facilities which are due to expire in April 2026.
In October 2022, the group signed an additional two short-term
revolving credit facilities which are due to expire in October
2023. As at 29 October 2022 available facilities totalled GBP676m
(30 October 2021: GBP549m, 30 April 2022: GBP543m) and the Group
had drawn down on these facilities by GBP242m (30 October 2021:
GBPnil, 30 April 2022: GBP80m). The Group's facilities available
throughout the current and prior year are detailed below.
In April 2021, the Group signed a GBP200m revolving credit
facility with a number of relationship banks which was initially
due to expire in April 2025. In April 2022, this facility was
extended by one year to expire in April 2026. The interest rate
payable for drawings under this facility is at a margin over risk
free rates (or other applicable interest basis) for the relevant
currency and for the appropriate period. The actual margin
applicable to any drawing depends on the fixed charges cover ratio
calculated in respect of the most recent accounting period. A
non-utilisation fee is payable in respect of amounts available but
undrawn under this facility and a utilisation fee is payable when
aggregate drawings exceed certain levels. At 29 October 2022, the
Group had drawn down on this facility by GBP90m (26 weeks ended 30
October 2021: GBPnil, year ended 30 April 2022: GBP80m).
In April 2021, the Group signed a NOK 4,036m (GBP336m) (26 weeks
ended 30 October 2021: GBP349m, year ended 30 April 2022: GBP343m)
revolving credit facility with a number of relationship banks which
was initially due to expire in April 2025. In April 2022, this
facility was extended by one year to expire in April 2026. This is
on broadly similar terms to the GBP200m facility. At 29 October
2022, the Group had drawn down on this facility by NOK 1,830m
(GBP152m) (26 weeks ended 30 October 2021: GBPnil, year ended 30
April 2022: GBPnil).
In October 2022, the Group signed a GBP90m revolving credit
facility and a NOK 600m (GBP50m) revolving credit facility with a
number of relationship banks to mitigate against any potential
short-to-medium term macroeconomic uncertainty. These facilities
are for one year, with the option of a further year at the bank's
option, and are on broadly similar terms to the GBP200m facility
signed in April 2021. At 29 October 2022, both facilities were
undrawn.
6 Financial instruments, loans and other borrowings
(continued)
Uncommitted facilities
The Group also has overdrafts and short-term money market lines
from UK and European banks denominated in various currencies, all
of which are repayable on demand. Interest is charged at the market
rates applicable in the countries concerned and these facilities
are used to assist in short term liquidity management. Total
available facilities are GBP71m (30 October 2021: GBP69m, 30 April
2022: GBP70m). At 29 October 2022 the Group had drawn down on the
uncommitted facilities by GBP1m (30 October 2021: GBP5m, 30 April
2022: GBP2m).
7 Note to the cash flow statement
26 weeks 26 weeks Year
ended ended ended
29 October 30 October 30 April
2022 2021 2022
GBPm GBPm GBPm
------------------------------------------------- ----------- ----------- ---------
(Loss) / profit before interest and tax (498) 95 222
Depreciation and amortisation 166 168 338
Share-based payment charge 9 14 23
Profit on disposal of fixed assets - (1) (1)
Impairments and other non-cash items 509 3 65
Operating cash flows before movements in working
capital 186 279 647
Movements in working capital:
Increase in inventory (469) (408) (130)
Increase in receivables (67) (95) (92)
Increase in payables 512 646 143
Decrease in provisions (17) (33) (44)
------------------------------------------------- ----------- ----------- ---------
(41) 110 (123)
Cash generated from operations 145 389 524
------------------------------------------------- ----------- ----------- ---------
Restricted funds, which predominantly comprise funds held by the
Group's insurance business for regulatory reserve requirements,
were GBP30m (30 October 2021: GBP33m; 30 April 2022: GBP30m). These
restricted funds are included within cash and cash equivalents on
the face of the consolidated balance sheet.
Changes in liabilities arising from financing activities
The table below details changes in the Group's liabilities
arising from financing activities, including both cash and non-cash
changes. Liabilities arising from financing activities are those
for which cash flows were, or future cash flows will be, classified
in the Group's consolidated cash flow statement as cash flows from
financing activities.
Lease
30 Financing additions,
April cash modifications Foreign 29 October
2022 flows and disposals Exchange Interest 2022
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------- -------- ---------- --------------- ---------- --------- -----------
Loans and other borrowings (80) (150) - (5) (7) (242)
Lease liabilities (1,267) 138 (76) 2 (34) (1,237)
----------------------------- -------- ---------- --------------- ---------- --------- -----------
Total liabilities arising
from financing activities (1,347) (12) (76) (3) (41) (1,479)
----------------------------- -------- ---------- --------------- ---------- --------- -----------
7 Note to the cash flow statement (continued)
Financing Lease additions,
1 May cash modifications Foreign 30 October
2021 flows and disposals Exchange Interest 2021
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------- -------- ---------- ----------------- ---------- --------- -----------
Loans and other borrowings - 7 - - (7) -
Lease liabilities (1,326) 134 (7) 8 (36) (1,227)
----------------------------- -------- ---------- ----------------- ---------- --------- -----------
Total liabilities arising
from financing activities (1,326) 141 (7) 8 (43) (1,227)
----------------------------- -------- ---------- ----------------- ---------- --------- -----------
Financing Lease additions,
1 May cash modifications Foreign 30 April
2021 flows and disposals Exchange Interest 2022
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------- -------- ---------- ----------------- ---------- --------- ---------
Loans and other borrowings - (74) - - (6) (80)
Lease liabilities (1,326) 278 (165) 16 (70) (1,267)
----------------------------- -------- ---------- ----------------- ---------- --------- ---------
Total liabilities arising
from financing activities (1,326) 204 (165) 16 (76) (1,347)
----------------------------- -------- ---------- ----------------- ---------- --------- ---------
Lease liabilities are secured over the Group's right-of-use
assets.
8 Goodwill
29 October 30 October 30 April
2022 2021 2022
GBPm GBPm GBPm
----------------------- ---------- ---------- --------
Cost
Opening balance 3,039 3,076 3,076
Foreign exchange (7) (15) (37)
Closing balance 3,032 3,061 3,039
------------------------- ---------- ---------- --------
Accumulated impairment
Opening balance (225) (225) (225)
Impairment charge (511) - -
------------------------- ---------- ---------- --------
Closing balance (736) (225) (225)
------------------------- ---------- ---------- --------
Carrying value 2,296 2,836 2,814
------------------------- ---------- ---------- --------
(a) Carrying value of goodwill
The components of goodwill comprise the following
businesses:
29 October 30 October 30 April
2022 2021 2022
GBPm GBPm GBPm
------------- ---------- ---------- --------
UK & Ireland 1,329 1,840 1,840
Nordics 967 996 974
2,296 2,836 2,814
------------- ---------- ---------- --------
8 Goodwill (continued)
(b) Goodwill impairment testing
As required by IAS 36, goodwill is subject to an impairment
review on an annual basis, or more frequently where indicators of
impairment exist. The Group has considered if indicators of
impairment exist with regard to a number of external factors,
including the recent increases in the long-term risk-free
investment rates and increased uncertainty in the wider
macroeconomic environment. Management concluded that these factors
are indicators of impairment and consequently, a full impairment
review was undertaken per IAS 36 using the value in use ('VIU')
method as detailed in the Group's Annual Report and Accounts
2021/22.
As a result of the impairment review, for the UK & Ireland
operating segment where GBP1,840m of goodwill was allocated, a
non-cash impairment charge of GBP511m has been recognised, bringing
the goodwill balance to GBP1,329m. This was mainly due to a
material increase in discount rate reflecting increased market risk
and volatility, and partly due to the short-to-medium term
macroeconomic uncertainty which has been factored into the Group's
business plans. In accordance with IFRIC 10, the impairment loss
recognised in this period shall not be reversed in a future
period.
For the Nordics operating segment, where GBP967m of goodwill is
allocated, the review shows material headroom above the carrying
amount and management do not consider that any reasonably possible
changes to the key assumptions would reduce the recoverable amount
to its carrying value.
Key assumptions
The key assumptions used in calculating VIU are:
-- Management' sales and costs projections;
-- The long-term growth rate; and
-- The pre-tax discount rate.
For the annual impairment test conducted in the year ended 30
April 2022 the strategic plan covered a three-year period. For the
period ended 29 October 2022 the updated strategic plan was
overlaid to include an additional years four and five due to the
short-to-medium term macroeconomic uncertainty. Management
considers the five-year outlook a more accurate representation of
the steady-state level of return expected in the longer-term. As a
result, this is a more appropriate basis on which to calculate the
VIU.
The long-term sales and cost projections are based on the Board
approved extended plan. The projections consider the outlook for
addressable markets and the relative performance of competitors,
together with management's views on the future achievable growth in
market share and impact of the committed initiatives, including the
Group's commitment to long term sustainability targets. In forming
these projections, management draws on past experience as a measure
to forecast future performance.
Long-term growth rates and pre-tax discount rates have been
calculated as explained in the Group's Annual Report and Accounts
2021/22. The values attributed to these assumptions are as
follows:
29 October 2022 30 April 2022
Compound Compound Compound Compound
annual annual Long term Pre-tax annual annual Long term Pre-tax
growth growth growth discount growth growth growth discount
in sales in costs rate rate in sales in costs rate rate
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
UK & Ireland 0.8% 0.2% 1.5% 13.0% 2.7% 2.0% 1.5% 10.6%
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
Nordics 2.6% 2.4% 1.8% 11.5% 0.7% 0.5% 1.8% 9.6%
---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
8 Goodwill (continued)
(b) Goodwill impairment testing (continued)
Sensitivity analysis
In accordance with IAS 36, the Group performed sensitivity
analysis on the estimates of recoverable amount and a summary of
the sensitivities applied to these key assumptions and the
resulting headroom / (impairment) is as follows:
UK & Ireland CGU Sensitivity Headroom / (Impairment) Movement
applied GBPm GBPm
Base case - (511) -
------------- ------------------------ ---------
Operating profit Increase of
in final year 20% (292) 219
------------- ------------------------ ---------
Decrease of
20% (730) (219)
-------------------------------- ------------------------ ---------
Long-term growth Increase of
rate 0.5% (462) 49
------------- ------------------------ ---------
Decrease of
0.5% (557) (46)
-------------------------------- ------------------------ ---------
Pre-tax discount Increase of
rate 2% (768) (257)
------------- ------------------------ ---------
Decrease of
2% (149) 362
-------------------------------- ------------------------ ---------
9 Contingent liabilities
The Group continues to cooperate with HMRC in relation to open
tax enquiries arising from pre-merger legacy corporate transactions
in the former Carphone Warehouse Group. It is possible that a
future economic outflow will arise from one of these matters, and
therefore a contingent liability has been disclosed. This
determination is based on the strength of third-party legal advice
on the matter and therefore the Group considers it 'more likely
than not' that these enquiries will not result in an economic
outflow. The potential range of tax exposures relating to this
enquiry is estimated to be approximately GBPnil - GBP214m excluding
interest and penalties. Interest on the upper end of the range is
approximately GBP62m up to 29 October 2022. Penalties could range
from nil to 30% of the principal amount of any tax.
The Group received a Spanish tax assessment in relation to a
business that was disposed of by the legacy Carphone Warehouse
Group in 2014. This issue will enter litigation and is likely to
take a minimum of three years to reach resolution. The Group
considers it 'more likely than not' that the assessment will not
result in an economic outflow based on third party legal advice.
The maximum potential exposure as a result of the claim is
GBP10m.
10 Related party transactions
Transactions between the Group's subsidiary undertakings, which
are related parties, have been eliminated on consolidation and
accordingly are not disclosed.
The Group had the following transactions and balances with its
associates:
26 weeks 26 weeks Year
ended ended ended
29 October 30 October 30 April
2022 2021 2022
GBPm GBPm GBPm
---------------------------------------- ------------ ----------- ---------
Revenue from sale of goods and services 7 7 15
Amounts owed to the Group 1 1 -
---------------------------------------- ------------ ----------- ---------
All transactions entered into with related parties were
completed on an arm's length basis.
Risks to achieving the Group's objectives
The Board continually reviews and monitors the risks and
uncertainties which could have a material effect on the Group's
results. The Group's risks, and the factors which mitigate them,
are set out in more detail on pages 60 to 64 in the Annual Report
and Accounts 2021/22 and remain relevant, but have evolved, in the
current period.
The updated risks and uncertainties are listed below:
1. Supply Chain Resilience risk covers broad external supply
chain related challenges for sourcing and logistics which, if not
managed adequately, could result in a deterioration of financial
performance;
2. Failure to deliver an effective business transformation
programme in response to a changing consumer environment could
result in a loss of competitive advantage impacting financial
performance;
3. Failure to comply with Financial Services regulation could
result in reputational damage, customer compensation, financial
penalties and a resultant deterioration in financial
performance;
4. Failure in appropriately safeguarding sensitive information
and failure to comply with legislation could result in reputational
damage, financial penalties and a resultant deterioration in
financial performance;
5. Failure to adequately invest in and integrate the Group's IT
systems and infrastructure could result in restricted growth and
reputational damage impacting financial performance;
6. Failure to appropriately safeguard against cyber risks and
associated attacks could result in reputational damage, customer
compensation, financial penalties and a resultant deterioration in
financial performance;
7. Failure to action appropriate Health and Safety measures
resulting in injury could give rise to reputational damage and
financial penalties;
8. Business continuity plans are not effective and major
incident response is inadequate resulting in reputational damage
and a loss of competitive advantage;
9. Crystallisation of potential tax exposures resulting from
legacy corporate transactions, employee and sales taxes arising
from periodic tax audits and investigations across various
jurisdictions in which the Group operates may impact cash flows for
the Group;
10. Failure to employ adequate procedures and due diligence
regarding product quality and safety could result in the provision
of products which pose a risk to customer health, resulting in
fines, prosecution and significant reputational damage;
11. Failure to either deliver or adequately communicate our
commitment to sustainability and being a good corporate citizen
could result in reduced cash flow, reputational damage and loss of
competitive advantage; and
12. Failure to successfully navigate an increasingly pervasive
set of externally driven factors, inflation and cost of living
pressures could result in a deterioration in financial
performance.
The directors have prepared the interim financial information on
a going concern basis. In considering the going concern basis, the
directors have considered the above-mentioned principal risks and
uncertainties, especially in the context of a highly competitive
consumer and retail environment as well as the wider macroeconomic
environment and how these factors might influence the Group's
objectives and strategy.
In their consideration of going concern, the directors have
reviewed the Group's future cash forecasts and profit projections,
which are based on market data and past experience. The directors
are of the opinion that the Group's forecasts and projections,
which take into account reasonably possible changes in trading
performance including the impact of increased uncertainty and
inflation in the wider economic environment, show that the Group is
able to operate within its current facilities and comply with its
banking covenants for at least 12 months from the date of approval
of these condensed financial statements. In arriving at their
conclusion that the Group has adequate financial resources, the
directors considered the level of borrowings and facilities and
that the Group has a robust policy towards liquidity and cash flow
management.
As a result, the Board believes that the Group is well placed to
manage its financing and other significant risks satisfactorily and
that the Group will be able to operate within the level of its
facilities for at least 12 months from the date of approval of
these condensed financial statements. For this reason, the Board
considers it appropriate for the Group to adopt the going concern
basis in preparing the interim financial information.
Statement of directors' responsibilities
The directors confirm that to the best of their knowledge:
-- the interim financial information has been prepared in
accordance with IAS 34 as adopted by the UK;
-- the financial highlights, performance review and interim
financial information include a fair review of the information
required by DTR 4.2.7R (indication of important events during the
first 26 weeks and description of principal risks and uncertainties
for the remaining 26 weeks of the year); and
-- the financial highlights and performance review includes a
fair review of the information required by DTR 4.2.8R (disclosure
of related party transactions and changes therein).
At the date of this statement, the directors are those listed in
the Group's Annual Report and Accounts 2021/22, with the exception
of Ian Livingston who resigned on 8 September 2022 and Ian Dyson
who was appointed on 1 September 2022.
By order of the Board
Alex Baldock Bruce Marsh
Group Chief Executive Group Chief Financial Officer
14 December 2022 14 December 2022
Independent review report
To Currys plc
Conclusion
We have been engaged by the company to review the condensed set
of financial statements in the half-yearly financial report for the
26 weeks ended 29 October 2022 which comprises the consolidated
income statement, the consolidated balance sheet, the consolidated
statement of changes in equity, the consolidated cash flow
statement and the related explanatory notes.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the 26 weeks ended 29
October 2022 is not prepared, in all material respects, in
accordance with IAS 34 Interim Financial Reporting as adopted for
use in the UK and the Disclosure Guidance and Transparency Rules
("the DTR") of the UK's Financial Conduct Authority ("the UK
FCA").
Basis for conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410 Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity ("ISRE (UK) 2410") issued for use in the UK. A review of
interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. We
read the other information contained in the half-yearly financial
report and consider whether it contains any apparent misstatements
or material inconsistencies with the information in the condensed
set of financial statements.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis of conclusion
section of this report, nothing has come to our attention that
causes us to believe that the directors have inappropriately
adopted the going concern basis of accounting, or that the
directors have identified material uncertainties relating to going
concern that have not been appropriately disclosed.
This conclusion is based on the review procedures performed in
accordance with ISRE (UK) 2410. However, future events or
conditions may cause the group to cease to continue as a going
concern, and the above conclusions are not a guarantee that the
group will continue in operation.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the DTR of the UK FCA.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with UK-adopted international
accounting standards.
The directors are responsible for preparing the condensed set of
financial statements included in the half-yearly financial report
in accordance with IAS 34 as adopted for use in the UK.
In preparing the condensed set of financial statements, the
directors are responsible for assessing the group's ability to
continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the
group or to cease operations, or have no realistic alternative but
to do so.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review. Our conclusion, including our
conclusions relating to going concern, are based on procedures that
are less extensive than audit procedures, as described in the Basis
for conclusion section of this report.
The purpose of our review work and to whom we owe our
responsibilities
This report is made solely to the company in accordance with the
terms of our engagement to assist the company in meeting the
requirements of the DTR of the UK FCA. Our review has been
undertaken so that we might state to the company those matters we
are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the company for our
review work, for this report, or for the conclusions we have
reached.
Mark Flanagan
for and on behalf of KPMG LLP
Chartered Accountants
15 Canada Square
London, E14 5GL
14 December 2022
Retail store data (unaudited)
Number of stores
At 29 October 2022 At 30 April 2022
Own Franchise Own Franchise
stores stores Total stores stores Total
-------------------- -------- ---------- ------ -------- ---------- ------
UK 289 - 289 293 - 293
Ireland 16 - 16 16 - 16
Total UK & Ireland 305 - 305 309 - 309
Norway 88 66 154 86 67 153
Sweden 100 77 177 102 77 179
Denmark 41 - 41 40 - 40
Finland 21 21 42 21 20 41
Other Nordics - 14 14 - 14 14
---------------------- -------- ---------- ------ -------- ---------- ------
Nordics 250 178 428 249 178 427
Greece 74 17 91 75 19 94
Cyprus 2 - 2 - - -
---------------------- -------- ---------- ------ -------- ---------- ------
Greece 76 17 93 75 19 94
Total 631 195 826 633 197 830
---------------------- -------- ---------- ------ -------- ---------- ------
Selling space '000
sq ft
At 29 October 2022 At 30 April 2022
Own Franchise Own Franchise
stores stores Total stores stores Total
-------------------- -------- ---------- ------- -------- ---------- -------
UK 5,288 - 5,288 5,326 - 5,326
Ireland 207 - 207 207 - 207
---------------------- -------- ---------- ------- -------- ---------- -------
Total UK & Ireland 5,495 - 5,495 5,533 - 5,533
Norway 1,118 644 1,762 1,107 654 1,761
Sweden 1,175 390 1,565 1,203 390 1,593
Denmark 694 - 694 678 - 678
Finland 520 184 704 517 176 693
Other Nordics - 97 97 - 97 97
---------------------- -------- ---------- ------- -------- ---------- -------
Nordics 3,507 1,315 4,822 3,505 1,317 4,822
Greece 977 64 1,041 998 71 1,069
Cyprus 43 - 43 - - -
---------------------- -------- ---------- ------- -------- ---------- -------
Greece 1,020 64 1,084 998 71 1,069
---------------------- -------- ---------- ------- -------- ---------- -------
Total 10,022 1,379 11,401 10,036 1,388 11,424
---------------------- -------- ---------- ------- -------- ---------- -------
Glossary and Definitions
Alternative performance measures ('APMs')
In the reporting of financial information, the Group uses
certain measures that are not required under IFRS. These are
presented in accordance with the Guidelines on APMs issued by the
European Securities and Markets Authority ('ESMA'). These measures
are consistent with those used internally by the Group's Chief
Operating Decision Maker ('CODM') in order to evaluate trends,
monitor performance and forecast results.
These APMs may not be directly comparable with other similarly
titled measures of 'adjusted' or 'underlying' revenue or profit
measures used by other companies, including those within our
industry, and are not intended to be a substitute for, or superior
to, IFRS measures.
We consider these additional measures to provide additional
information on the performance of the business and trends to
shareholders. The below, and supplementary notes to the APMs,
provides further information on the definitions, purpose and
reconciliations to IFRS measures of those APMs that are used
internally in order to provide parity and transparency between the
users of this financial information and the CODM in assessing the
core results of the business in conjunction with IFRS measures.
Adjusted results
Included within our APMs the Group reports a number of adjusted
profit and earnings measures, all of which are described throughout
this section. The Group subsequently refers to adjusted results as
those which reflect the in-period trading performance of the
ongoing omnichannel retail operations (referred to below as
underlying operations and trade) and excludes from IFRS measures
certain items that are significant in size or volatility or by
nature are non-trading or highly infrequent. Those items that the
Group consider to be adjusting, as well as the threshold used to
determine the departure from IFRS measures is defined below.
Restatement of comparative periods as a result of a change in
Group adjusting items policy
During the current period the Group adopted a new policy to
determine whether an item is to be classified as adjusting. The
policy reduces the scope of items that could be classified as
adjusting by assessing the significance of income or costs on a
project-by-project or one-off item basis. This ensures that the
impact is material and therefore the departure from IFRS measures
is useful for the users of the financial statements.
Management believes the more stringent classification policy
provides greater clarity on the current and future performance of
the Group's ongoing omnichannel retail operations.
The updated criteria for income or costs to be recognised within
adjusting items is explained below. The change in policy has been
applied retrospectively with the Group's adjusted results presented
within the performance review being restated for the comparative
periods. The reconciliations back to the closest equivalent
statutory measure within notes A1 to A10 to the Glossary and
definitions have also been restated and a reconciliation of the
performance review previously announced to the restated position is
provided within note A11.
Adjusting items
When determining whether an item is to be classified as
adjusting, and the departure from IFRS measures is more useful for
the users of the financial statements than the additional
disclosure requirements for material items under IAS 1, the project
or item must:
- be one-off in nature and have a significant impact on amounts
presented in either the statutory income statement or statutory
cash flow statement in any set of annual Group financial
statements; or
- recur for a finite number of years and do not reflect the
underlying trading performance of the business. Items specifically
included in this section are the amortisation of acquired
intangibles and net pension interest costs on the defined benefit
pension scheme.
Management will classify items as adjusting where these criteria
are met and it is considered more useful for the users of the
financial statements to depart from IFRS measures.
Items excluded from adjusted results can evolve from one
financial year to the next depending on the nature of exceptional
items or one-off type activities. Where appropriate, for example
where a business is classified as exited/to be exited, comparative
information is restated accordingly.
Below highlights the grouping in which management allocate
adjusting items and provides further detail on how management
consider such items to meet the criteria set out above. Further
information on the adjusting items recognised in the current and
comparative periods can be found in note A4.
Acquisition and disposal related items
Includes costs incurred in relation to the acquisition, and
income for the disposal of business operations, as the related
costs and income reflect significant changes to the Group's
underlying business operations and trading performance. Adjusted
results do not exclude the related revenues or costs that have been
earned in relation to previous acquisitions, with the exception of
the amortisation of intangibles, such as brands, that would not
have been recognised prior to their acquisition. Where practically
possible amounts are restated in comparative periods to reflect
where a business operation has subsequently been disposed.
Strategic change programmes
Primarily relate to material one-off costs incurred for the
execution and delivery of a change in strategic direction, such as;
severance and other direct employee costs incurred following the
announcement of detailed formal restructuring plans; property
rationalisation programmes where a business decision is made to
rebase the store estate; and significant transformational system
implementation costs for strategic change delivery projects. Such
costs incurred do not reflect the Group's underlying trading
performance and are one-off in nature. Results are therefore
adjusted to exclude such items in order to aid comparability
between periods.
Regulatory costs
Compliance costs are included within adjusted results, however
in certain instances material costs are to be incurred following
significant one-off events such as fines and consumer redress.
The Group includes material costs related to data incidents and
regulatory challenge within adjusting items so far as on the basis
of internal or external legal advice, it has been determined that
it is more than possible that a material outflow will be required
to settle the obligation (legal or constructive) and subsequently
recognised a provision in accordance with IAS 37.
Impairment losses and onerous contracts
In order to aid comparability, costs incurred for material
non-cash impairments (or reversals of previously recognised
impairments) and onerous contracts are included within adjusting
items where they have a significant impact on amounts presented in
either the statutory income statement or statutory cash flow
statement in any set of annual Group financial statements. When
considering the threshold, management will consider whether the
gross impairment charge and gross reversal of previously recognised
impairment in any one reportable operating segment is above the
material threshold for that financial year.
While the recognition of such is considered to be one-off in
nature, the unavoidable costs for those contracts considered
onerous is continuously reviewed and therefore based on readily
available information at the reporting date as well as managements
historical experience of similar transactions. As a result, future
cash outflows and total charges to the income statement may
fluctuate in future periods. If these changes are material they
will be recognised in adjusting items.
Other items
Other items include those items that are one-off in nature that
are material enough to distort the underlying results of the
business but do not fall into the categories disclosed above. Such
items include the settlement of legal cases and other contractual
disputes where the corresponding income, or costs, would be
considered to distort users understanding of trading performance
during the period.
Net interest income / (costs)
Included within adjusting interest income / (costs) are the
finance income / (costs) of businesses to be exited, previously
disposed operations, net pension interest costs on the defined
benefit pension scheme within the UK and other exceptional items
considered one-off or so material that they distort underlying
finance costs of the Group.
As disclosed above, the disposal of businesses represents a
significant change to the underlying business operations, as such,
the related interest income / (costs) are removed from adjusted
results to assist users' understanding of the trading business.
The net interest charge on defined benefit pension schemes
represents the non-cash remeasurement calculated by applying the
corporate bond yield rates applicable on the last day of the
previous financial year to the net defined benefit obligation. As a
non-cash remeasurement cost which is unrepresentative of the actual
investment gains or losses made or the liabilities paid and
payable, and given the defined benefit section of the scheme having
closed to future accrual on 30 April 2010, the accounting effect of
this is excluded from adjusted results.
Tax
Included within taxation is the tax impact on those items that
are classified as adjusting items explained above and the
respective costs to the Group where it is co-operating with tax
authorities in relation to tax treatments arising from changes in
underlying business operations as a result of acquisition,
divestiture or closure of operations. The exclusion from adjusted
results ensures that users, and management, can assess the overall
performance of the Groups underlying operations.
The tax impact on adjusting items may not have a significant
impact on amounts presented in the statutory income statement,
however the tax treatment is consistent with the presentation of
the income or cost itself.
Definitions, purpose and reconciliations
In line with the Guidelines on Alternative Performance Measures
issued by ESMA, we have provided additional information on the APMs
used by the Group below, including full reconciliations back to the
closest equivalent statutory measure.
EBIT / EBITDA
In the key highlights and performance review we reference
financial metrics such as EBIT and EBITDA. We would like to draw to
the user's attention that these are shown to aid comparison of our
adjusted measures to the closest IFRS measure. We acknowledge that
the terminology of EBIT and EBITDA are not IFRS defined labels but
are compiled directly from the IFRS measures of profit without
making any adjustments for adjusting items explained above. These
measures are: profit / (loss) for the year before deducting
interest and tax, termed as EBIT; and profit / (loss) for the year
before deducting interest, tax, depreciation, and amortisation,
termed as EBITDA. These metrics are further explained and
reconciled within notes A2 and A3 below.
Currency neutral
Some comparative performance measures are translated at constant
exchange rates, called 'currency neutral' measures. This restates
the prior period results at a common exchange rate to the current
year in order to provide appropriate year-on-year movement measures
without the impact of foreign exchange movements.
Like-for-like (LFL) % change
Like-for-like revenue is calculated based on adjusted store and
online revenue (including Order & Collect, Online In-Store and
ShopLive) using constant exchange rates consistent with the
currency neutral % change measure detailed above. New stores are
included where they have been open for a full financial year both
at the beginning and end of the financial period. Revenue from
franchise stores are excluded and closed stores are excluded for
any period of closure during either period. Customer support
agreement, insurance and wholesale revenues along with revenue from
other non-retail businesses are excluded from like-for-like
calculations. We consider that LFL revenue represents a useful
measure of the trading performance of our underlying and ongoing
store and online portfolio.
Year-on-three-year (Yo3Y)
Within the key highlights and performance review we present
year-on-three-year (Yo3Y) results for certain metrics in order to
aid users in making meaningful comparisons of the Group's
performance following the influence that Covid-19 government
enforced store closures had on the Group in the year ended 1 May
2021.
A1 Reconciliation from (loss) / profit before interest and tax
to adjusted EBIT and adjusted PBT
Adjusted EBIT and adjusted PBT are measures of profitability
that are adjusted from total IFRS measures to remove adjusting
items, the nature of which are disclosed above. A description of
costs included within adjusting items during the period and
comparative periods is further disclosed in note A4.
The exclusion of such costs helps management and users with the
comparability of results, based on the underlying trading
performance of continuing operations within the relevant reporting
period.
The below reconciles (loss) / profit before tax and (loss) /
profit before interest and tax, which are considered to be the
closest equivalent IFRS measures, to adjusted EBIT and adjusted
PBT.
26 weeks ended 29 October 2022
------------ ---------------------------------------------------------------------------------------
Total Acquisition Impairment Adjusted
(loss) / disposal Strategic losses Pension profit
/ related change and onerous scheme /
profit items programmes contracts Other interest (loss)
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------ ------- ----------- ----------- ------------ -------- --------- --------
UK & Ireland (495) 6 3 511 - - 25
Nordics (4) 6 1 - - - 3
Greece 1 - - - - - 1
-------
EBIT (498) 12 4 511 - - 29
Finance income 1 - - - - - 1
Finance costs (51) - - - - 4 (47)
------------------ ------- ----------- ----------- ------------ -------- --------- --------
Loss before
tax (548) 12 4 511 - 4 (17)
------------------ ------- ----------- ----------- ------------ -------- --------- --------
26 weeks ended 30 October 2021
----------- ------------ ------------------------------------------------------------------------------------
Acquisition Impairment
/ disposal Strategic losses Pension Adjusted
Total related change and onerous scheme profit
profit items programmes contracts Other interest (restated)*
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------------ ------------ ----------- ----------- ------------ ----------- ---------- ------------
UK & Ireland 33 6 (1) - (18) - 20
Nordics 51 6 - - - - 57
Greece 11 - - - - - 11
------------ ------------
EBIT 95 12 (1) - (18) - 88
Finance income 1 - - - - - 1
Finance costs (48) - - - - 4 (44)
------------------ ------------ ----------- ----------- ------------ ----------- ---------- ------------
Profit before
tax 48 12 (1) - (18) 4 45
------------------ ------------ ----------- ----------- ------------ ----------- ---------- ------------
* Adjusted EBIT in the comparative periods has been restated as
explained in note A11 to the Glossary and definitions
A1 Reconciliation from (loss) / profit before interest and tax
to adjusted EBIT and adjusted PBT (continued)
Year ended 30 April 2022
------------------------------------------------------------------------------------------------
Acquisition Impairment
/ disposal Strategic losses Pension Adjusted
Total related change and onerous scheme profit
profit items programmes contracts Other interest (restated)*
GBPm GBPm GBPm GBPm GBPm GBPm GBPm
--------------- ------- ----------- ----------- ------------ ----- --------- ------------
UK & Ireland 71 12 (1) 54 (19) - 117
Nordics 130 12 - - - - 142
Greece 21 - - - - - 21
-------
EBIT 222 24 (1) 54 (19) - 280
Finance income 2 - - - - - 2
Finance costs (98) - - - - 8 (90)
--------------- ------- ----------- ----------- ------------ ----- --------- ------------
Profit before
tax 126 24 (1) 54 (19) 8 192
--------------- ------- ----------- ----------- ------------ ----- --------- ------------
* Adjusted EBIT in the comparative periods has been restated as
explained in note A11 to the Glossary and definitions
A2 Reconciliation from (loss) / profit before interest and tax
to EBITDA
EBITDA represents earnings before interest, tax, depreciation
and amortisation. It provides a useful measure of profitability for
users as it is a commonly used metric to compare profitability
between businesses that have differing capital asset
structures.
The below reconciles profit before interest and tax, which is
considered to be the closest equivalent IFRS measures, to
EBITDA.
26 weeks 26 weeks
ended ended Year ended
29 October 30 October 30 April
2022 2021 2022
GBPm GBPm GBPm
----------------------- ----------- ----------- ----------
(Loss) / profit before
interest and tax (498) 95 222
Depreciation 123 128 252
Amortisation 43 40 86
EBITDA (332) 263 560
------------------------- ----------- ----------- ----------
A3 Reconciliation from adjusted EBIT to adjusted EBITDA and
adjusted EBITDAR
Adjusted EBITDA represents earnings before interest, tax,
depreciation and amortisation. This measure also excludes adjusting
items, the nature of which are disclosed above and with further
detail in note A4. It provides a useful measure of profitability
for users by adjusting for the items noted in A1 as well as
depreciation and amortisation expense noted in A2.
The depreciation adjusted within adjusted EBITDA includes
right-of-use asset depreciation on leased assets in accordance with
IFRS 16. Some leasing costs, including those on short-term or low
value leases, or variable lease payments not included in the
measurement of the lease liability, are also included within
EBITDA. A similar measure, EBITDAR, provides a measure of
profitability based on the above EBITDA definition as well as
deducting for leasing costs in EBITDA.
A3 Reconciliation from adjusted EBIT to adjusted EBITDA and
adjusted EBITDAR (continued)
The below reconciles adjusted EBIT to adjusted EBITDA and
adjusted EBITDAR. The closest equivalent IFRS measures are
considered to be profit / (loss) before interest and tax, the
reconciliation of such from adjusted EBIT can be found in note
A1.
26 weeks 26 weeks
ended ended Year ended
29 October 30 October 30 April
2022 2021 2022
(restated)* (restated)*
GBPm GBPm GBPm
------------------------ --- ------------ ------------ ------------
Adjusted EBIT 29 88 280
Depreciation 123 128 252
Amortisation 31 28 62
Adjusted EBITDA 183 244 594
Leasing costs in EBITDA 5 8 14
--------------------------------- ------------ ------------ ------------
Adjusted EBITDAR 188 252 608
--------------------------------- ------------ ------------ ------------
* Adjusted EBIT in the comparative periods has been restated as
explained in note A11 to the Glossary and definitions
A4 Further information on the adjusting items between IFRS
measures to adjusted profit measures noted above
26 weeks 26 weeks
ended ended Year ended
29 October 30 October 30 April
2022 2021 2022
(restated)* (restated)*
Note GBPm GBPm GBPm
Included in (loss) / profit before interest
and tax:
Acquisition / disposal related items (i) 12 12 24
Strategic change programmes (ii) 4 (1) (1)
Impairment losses and onerous contracts (iii) 511 - 54
Other (iv) - (18) (19)
527 (7) 58
--------------------------------------------------- ------------ ------------ ------------
Included in net finance costs:
Net non-cash finance costs on defined
benefit pension schemes (v) 4 4 8
-------------------------------------------- ------ ------------ ------------ ------------
Total impact on (loss) / profit before
tax 531 (3) 66
Tax regulatory matters (vi) - - 1
Tax on other adjusting items (vii) 15 (10) 2
-------------------------------------------- ------ ------------ ------------ ------------
Total impact on (loss) /profit after
tax 546 (13) 69
---------------------------------------------------- ------------ ------------ ------------
* Adjusted EBIT in the comparative periods has been restated as
explained in note A11 to the Glossary and definitions
A4 Further information on the adjusting items between IFRS
measures to adjusted profit measures noted above (continued)
(i) Acquisition / disposal related items:
A charge of GBP12m (26 weeks ended 30 October 2021: GBP12m, year
ended 30 April 2022: GBP24m) relates primarily to amortisation of
acquisition intangibles arising on the Dixons Retail Merger.
(ii) Strategic change programmes:
During the period a further GBP9m of costs have been incurred as
the Group continues to deliver the long-term strategic plan set in
2018; becoming clearer, simpler and faster, improving the overall
customer experience with an omnichannel offering and building
customers for life. The Group have included such items within
adjusting items as projects are one-off in nature and have a
significant impact on the statutory income statement or statutory
cash flow statement in the current period. The costs incurred
relate to the following programmes:
- GBP7m one off implementation costs of transferring service
centre operations to a third-party. This was announced during the
current period and the transition is expected to be finalised in
2023/24; and
- GBP2m of restructuring costs for central and retail operations
(30 October 2021: GBP3m, 30 April 2022: GBP11m).
For the year ended 30 April 2022 the Group also incurred GBP10m
one-off implementation costs of the Currys rebrand (26 weeks ended
30 October 2021: GBP9m).
Property rationalisation:
Included within strategic change programmes is a net credit of
GBP5m (26 weeks ended 30 October 2021: GBP13m, year ended 30 April
2022: GBP22m) that primarily relates to the release of excess
property provisions following successful early exit negotiations on
stores included within previously announced rationalisation and
closure programmes.
(iii) Impairment losses and onerous contracts:
During the period a non-cash impairment charge of GBP511m was
recognised over the goodwill recognised in the UK & Ireland
operating segment. Further explanation is provided within note 8 to
the financial information. No impairment charge over goodwill was
recognised in either comparative period.
In the year ended 30 April 2022 impairment losses and onerous
contracts of GBP54m were recognised as follows:
- an impairment of GBP31m (GBP25m over right-of-use assets and
GBP6m on other fixed assets) was recognised after the Group
announced it would close its Acton Campus and relocate to
facilities operated by WeWork;
- an impairment of GBP24m of fixed assets and recognition of a
GBP4m provision for onerous contracts relating to the unavoidable
costs after management took the decision to stop selling its
credit-based mobile offer;
- an impairment of GBP2m of right-of-use assets after the Group
negotiated an early termination settlement on non-trading lease
premises;
- a credit of GBP7m (26 weeks ended 30 October 2021: GBP3m
credit) following the release of previously recognised onerous
contracts related to the closure of the Dixons Travel business
following successful early exit negotiations and lower than
expected closure costs; and
- the recognition of a non-cash impairment charge of GBP16m (26
weeks ended 30 October 2021: GBP13m) and a non-cash impairment
reversal of GBP16m (26 weeks ended 30 October 2021: GBP10m) over
store assets within the UK as a result of changes in consumer
shopping habits between our store mix.
(iv) Other:
In the year ended 30 April 2022, credits of GBP19m (26 weeks
ended 30 October 2021: GBP18m) primarily relate to compensation
received following the settlement of a legal case in relation to
anti-competitive behaviour engaged by the counterparty. No charges
or credits have been recognised in the current period.
A4 Further information on the adjusting items between IFRS
measures to adjusted profit measures noted above (continued)
(v) Net non-cash financing costs on defined benefit pension schemes:
The net interest charge on defined benefit pension schemes
represents the non-cash remeasurement calculated by applying the
corporate bond yield rates applicable on the last day of the
previous financial year to the net defined benefit obligation.
(vi) Tax regulatory matters:
As previously disclosed, the Group has been co-operating with
HMRC in relation to the tax treatment arising due to pre-merger
legacy corporate transactions. The Group maintains the tax
treatment was appropriate, however, the likelihood of litigation,
and therefore risk associated with this matter is such that the
Group holds a provision for the probable economic outflow. There
have been no significant developments in the year, as such the
principal has been retained, while a further GBP1m of interest
accumulated throughout the 12 months ended 30 April 2022.
(vii) Tax on other adjusting items:
The effective tax rate on adjusting items is (3)%. Included
within tax on other adjusting items is a GBP19m charge relating to
the derecognition of deferred tax assets (related to tax losses) in
the UK, which has been reassessed prudently given the current
elevated macroeconomic uncertainty and a GBP4m credit reflecting
the tax effect on adjusting items explained above. The impairment
charge over goodwill in the UK & Ireland operating segment has
no tax effect.
A5 Reconciliation from net finance costs to adjusted net finance
costs
Adjusted net finance costs exclude certain adjusting finance
cost items from total finance costs. The adjusting items include
the finance charges of businesses to be exited, net pension
interest costs, finance income from previously disposed operations
not classified as discontinued, and other exceptional items
considered so one-off or material that they distort underlying
finance costs of the Group.
The below provides a reconciliation from net finance costs,
which is considered to be the closest IFRS measure, to adjusted net
finance costs.
26 weeks 26 weeks
ended ended Year ended
29 October 30 October 30 April
2022 2021 2022
GBPm GBPm GBPm
-------------------------------- ----------- ----------- ----------
Total net finance costs (50) (47) (96)
Net interest on defined benefit
pension 4 4 8
Adjusted total net finance
costs (46) (43) (88)
---------------------------------- ----------- ----------- ----------
A6 Adjusted effective tax rate
Tax charged on adjusted profits within the 26 weeks ended 29
October 2022 has been calculated by applying the effective rate of
tax which is expected to apply to the Group for the year ending 29
April 2023 using rates substantively enacted at the reporting date
as required by IAS 34 'Interim Financial Reporting'.
The Group's adjusted effective rate of taxation for the full
year has been estimated at 25% (2021/22: 27%). A rate of 20% has
been applied to the adjusted half year results due to the weighting
of profit in different jurisdictions.
The effective tax rate measures provide a useful indication of
the tax rate of the Group. Adjusted effective tax is the rate of
tax recognised on adjusting earnings, and total effective tax is
the rate of tax recognised on total earnings.
A7 Reconciliation from (loss) / earnings per share to adjusted
(loss) / earnings per share
Earnings per share ('EPS') measures are adjusted in order to
show an adjusted EPS figure which reflects the adjusted earnings
per share of the Group. We consider the adjusted EPS provides a
useful measure of the ongoing earnings of the underlying Group.
The below table shows a reconciliation of statutory basic EPS to
adjusted basic EPS as this is considered to be the closest IFRS
equivalent.
26 weeks 26 weeks
ended ended Year ended
29 October 30 October 30 April
2022 2021 2022
(restated)* (restated)*
GBPm GBPm GBPm
---------------------------------- --- ------------ ------------ ------------
Adjusted (loss) / profit (14) 29 140
--------------------------------------- ------------ ------------ ------------
Total (loss) / profit (560) 42 71
--------------------------------------- ------------ ------------ ------------
Million Million Million
---------------------------------- --- ------------ ------------ ------------
Average shares in issue 1,133 1,166 1,165
Less average holding by Group
EBT (31) (25) (35)
--------------------------------------- ------------ ------------ ------------
Weighted average number of shares 1,102 1,141 1,130
Pence Pence Pence
---------------------------------- --- ------------ ------------ ------------
Basic (loss) / earnings per share (50.8) 3.7 6.3
Adjustments (net of taxation) 49.5 (1.2) 6.1
--------------------------------------- ------------ ------------ ------------
Adjusted basic (loss) / earnings
per share (1.3) 2.5 12.4
--------------------------------------- ------------ ------------ ------------
* Adjusted EBIT in the comparative periods has been restated as
explained in note A11 to the Glossary and definitions
Basic (loss) / earnings per share is based on the (loss) /
profit for the period attributable to equity shareholders. Adjusted
(loss) / earnings per share is presented in order to show the
underlying performance of the Group. Adjustments used to determine
adjusted (loss) / profit are described further in note A4.
A8 Reconciliation of cash generated from operations to free cash
flow
Operating cash flow comprises cash generated from / (utilised
by) operations, but before cash generated from / (utilised by)
discontinued operations, adjusting items (the nature of which are
disclosed above), and after repayments of lease liabilities
(excluding non-trading stores) and movements in working capital
presented within the performance review. The measure aims to
provide users a clear understanding of cash generated from the
continuing operations excluding material one-off items of the
Group.
Sustainable free cash flow comprises cash generated from /
(utilised by) operations, but before cash generated from /
(utilised by) discontinued operations and movements in working
capital and after capital expenditure, capital repayments of lease
liabilities, net cash interest paid, and income tax paid. Free cash
flow comprises all items contained within sustainable free cash
flow but after movements in working capital. Sustainable free cash
flow and free cash flow are considered to be useful for users as
they represent available cash resources after operational cash
outflows and capital investment to generate future economic
inflows. We consider it useful to present both measures to draw
users' attention to the impact of movements in working capital on
free cash flow.
A8 Reconciliation of cash generated from operations to free cash
flow (continued)
Reconciliation of cash inflow from operations to free cash
flow
26 weeks 26 weeks
ended ended Year ended
29 October 30 October 30 April
2022 2021 2022
(restated)* (restated)*
GBPm GBPm GBPm
--------------------------------------------------- ------------ ------------ ------------
Cash generated from operations 145 389 524
Capital repayment of leases cost and interest (137) (134) (278)
Less adjusting items to cash flow 25 (16) 23
Less movements in working capital presented within
the performance review (note A10) 28 (102) 112
Facility arrangement fees (1) (6) (6)
Operating cash flow 60 131 375
Capital expenditure (56) (51) (133)
Add back adjusting items to cash flow (25) 16 (23)
Taxation (24) (6) (18)
Cash interest paid (13) (7) (17)
--------------------------------------------------- ------------ ------------ ------------
Sustainable free cash flow (58) 83 184
Add back movements in working capital presented
within the performance review (note A10) (28) 102 (112)
Free cash flow (86) 185 72
--------------------------------------------------- ------------ ------------ ------------
* Adjusted EBIT in the comparative periods has been restated as
explained in note A11 to the Glossary and definitions
Reconciliation of adjusted EBIT to free cash flow
Year
26 weeks 26 weeks
ended ended ended
29 October 30 October 30 April
2022 2021 2022
(restated)* (restated)*
GBPm GBPm GBPm
------------------------------------------------- --- ------------ ------------ ------------
Adjusted EBIT (note A1) 29 88 280
Depreciation and amortisation (note A3) 154 156 314
Working capital presented within the performance
review (note A10) (28) 102 (112)
Capital expenditure (56) (51) (133)
Taxation (24) (6) (18)
Interest (13) (7) (17)
Repayment of leases** (131) (126) (249)
Other non-cash items in EBIT*** 8 13 30
Free cash flow before adjusting items
to cash flow (61) 169 95
Adjusting items to cash flow (25) 16 (23)
---------------------------------------------------------- ------------ ------------ ------------
Free cash flow (86) 185 72
Add back working capital presented within
the performance review (note A10) 28 (102) 112
---------------------------------------------------------- ------------ ------------ ------------
Sustainable free cash flow (58) 83 184
---------------------------------------------------------- ------------ ------------ ------------
* Adjusted EBIT in the comparative periods has been restated as
explained in note A11 to the Glossary and definitions
** Repayment of leases excludes the impact of non-trading
leases, which are presented within adjusting items to cash flow
*** Other non-cash items in EBIT, as disclosed within the
Summary of Performance section, comprise share-based payments,
profit/loss on disposal of fixed assets, impairments and other
non-cash items.
A9 Reconciliation from liabilities arising from financing
activities to total indebtedness and net (debt)/ cash
Total indebtedness is a measure which represents period end net
(debt) / cash, pension deficit and lease liabilities, less any
restricted cash. The purpose of this is to evaluate the liquidity
of the Group with the inclusion of all interest-bearing
liabilities.
Net (debt) / cash comprises cash and cash equivalents and
short-term deposits, less loans and other borrowings. We consider
that this provides a useful alternative measure of the indebtedness
of the Group and is used within our banking covenants as part of
the leverage ratio.
The below provides a reconciliation of total liabilities from
financing activities, which is considered the closest equivalent
IFRS measure, to total indebtedness and net (debt) / cash.
29 October 30 October 30 April
2022 2021 2022
GBPm GBPm GBPm
-------------------------------------------- ---------- ---------- --------
Loans and other borrowings (242) - (80)
Lease liabilities* (1,237) (1,227) (1,267)
---------------------------------------------- ---------- ---------- --------
Total liabilities from financing activities
(note 7) (1,479) (1,227) (1,347)
Cash and cash equivalents less restricted
cash 108 222 96
Overdrafts (1) (5) (2)
Lease receivables* 6 4 4
Pension liability (251) (416) (257)
---------------------------------------------- ---------- ---------- --------
Total indebtedness (1,617) (1,422) (1,506)
Restricted cash 30 33 30
Add back pension liability 251 416 257
Add back lease liabilities* 1,237 1,227 1,267
Less lease receivables* (6) (4) (4)
Net (debt) / cash (105) 250 44
---------------------------------------------- ---------- ---------- --------
* Net lease liabilities within the performance review relates to
lease liabilities less lease receivables.
Within the performance review management also refer to average
net (debt) / cash. Average net (debt) / cash comprises the same
items included in net (debt) / cash as defined above, however
calculated as the average between April - October for the interim
reporting period and April - April for the full year to align to
the Group's Remuneration Committee calculation and as reported
internally.
A10 Reconciliation of movements in statutory working capital to
working capital presented within the performance review
Within the performance review a reconciliation of the adjusted
EBIT to free cash flow is provided. Within this, the working
capital balance of GBP(28)m (26 weeks ended 30 October 2021
GBP102m, year ended 30 April 2022 GBP(112)m) differs to the
statutory working capital balance as cash flows on adjusting items
are separately disclosed.
Working capital presented within the performance review is a
measure of working capital that is adjusted from total IFRS
measures to remove the working capital on adjusting items. A
description of costs included within adjusting items during the
period and comparative periods is further disclosed in note A4.
As discussed above, the Group uses adjusted profit measures in
order to provide a useful measure of the ongoing performance of the
Group. A reconciliation of the disclosed working capital balance is
as follows:
26 weeks 26 weeks
ended ended Year ended
29 October 30 October 30 April
2022 2021 2022
(restated)* (restated)*
GBPm GBPm GBPm
------------------------------------------ --- ------------ ------------ ------------
Movements in working capital (note
7) (41) 110 (123)
Adjusting items provisions 14 32 51
Exceptional receivable - legal settlement - (34) (34)
Facility arrangement fees (1) (6) (6)
Working capital presented within the
performance review (28) 102 (112)
--------------------------------------------------- ------------ ------------ ------------
* Adjusted EBIT in the comparative periods has been restated as
explained in note A11 to the Glossary and definitions
A11 Restatement of the Group's performance review
The adjusted results and adjusting items for the 26 weeks ended
30 October 2021 and year ended 30 April 2022 have been restated to
reflect the updated adjusting items policy which is used to
determine whether an item is to be classified as adjusting.
Management believes the more stringent classification policy
provides greater clarity on the current and future performance of
the Group's ongoing omnichannel retail operations.
The impact of the restatement on the Group's adjusted results
for the respective comparative periods is outlined below. There is
no impact on statutory results as a result of the restatements.
A11 Restatement of the Group's performance review
(continued)
26 weeks ended 30 October 2021
H1 2021/22
as previously H1 2021/22
reported Policy adjustment restated
GBPm GBPm GBPm
----------------------------------- --------------- ------------------ -----------
Income statement
----------------------------------- --------------- ------------------ -----------
Adjusted revenue 4,783 2 4,785
Adjusting items to revenue 2 (2) -
------------------------------------ --------------- ------------------ -----------
Revenue 4,785 - 4,785
Adjusted EBITDA 247 (3) 244
Adjusted EBITDA margin 5.2% (10) bps 5.1%
Depreciation on right-of-use
assets (95) - (95)
Depreciation on other assets (33) - (33)
Amortisation (28) - (28)
Adjusted EBIT 91 (3) 88
------------------------------------ --------------- ------------------ -----------
Adjusted EBIT margin 1.9% (10) bps 1.8%
Interest on lease liabilities (36) - (36)
Finance income 1 - 1
Adjusted finance costs (8) - (8)
------------------------------------ --------------- ------------------ -----------
Adjusted PBT 48 (3) 45
Adjusted PBT margin 1.0% (10) bps 0.9%
Adjusted tax (16) - (16)
Adjusted profit after tax 32 (3) 29
Adjusted EPS 2.8p (0.3)p 2.5p
Cash flow
----------------------------------- --------------- ------------------ -----------
Adjusted EBITDAR 255 (3) 252
Adjusted EBITDAR margin 5.3% - bps 5.3%
Cash payments of leasing costs,
debt & interest (134) - (134)
Other non-cash items in EBIT 13 - 13
------------------------------------ --------------- ------------------ -----------
Operating cash flow 134 (3) 131
------------------------------------ --------------- ------------------ -----------
Operating cash flow margin 2.8% (10) bps 2.7%
Capital expenditure (51) - (51)
Adjusting items to cash flow 10 6 16
------------------------------------ --------------- ------------------ -----------
Free cash flow before working
capital 93 3 96
Working capital 105 (3) 102
------------------------------------ --------------- ------------------ -----------
Segmental free cash flow 198 - 198
Cash tax paid (6) - (6)
Cash interest paid (7) - (7)
------------------------------------ --------------- ------------------ -----------
Free cash flow 185 - 185
Dividend (34) - (34)
Purchase of own shares - employee
benefit trust (28) - (28)
Pension (39) - (39)
Other (3) - (3)
------------------------------------ --------------- ------------------ -----------
Movement in net cash 81 - 81
------------------------------------ --------------- ------------------ -----------
Net cash 250 - 250
------------------------------------ --------------- ------------------ -----------
A11 Restatement of the Group's performance review
(continued)
Year ended 30 April 2022
2021/22
as previously 2021/22
reported Policy adjustment restated
GBPm GBPm GBPm
----------------------------------- --------------- ------------------ ----------
Income Statement
----------------------------------- --------------- ------------------ ----------
Adjusted revenue 10,122 22 10,144
Adjusting items to revenue 22 (22) -
------------------------------------ --------------- ------------------ ----------
Revenue 10,144 - 10,144
Adjusted EBITDA 588 6 594
Adjusted EBITDA margin 5.8% +10 bps 5.9%
Depreciation on right-of-use
assets (190) - (190)
Depreciation on other assets (62) - (62)
Amortisation (62) - (62)
Adjusted EBIT 274 6 280
------------------------------------ --------------- ------------------ ----------
Adjusted EBIT margin 2.7% +10 bps 2.8%
Interest on lease liabilities (70) - (70)
Finance income 2 - 2
Adjusted finance costs (20) - (20)
------------------------------------ --------------- ------------------ ----------
Adjusted PBT 186 6 192
Adjusted PBT margin 1.8% +10 bps 1.9%
Adjusted tax (51) (1) (52)
Adjusted profit after tax 135 5 140
Adjusted EPS 11.9p 0.5p 12.4p
Cash flow
----------------------------------- --------------- ------------------ ----------
Adjusted EBITDAR 602 6 608
Adjusted EBITDAR margin 5.9% +10 bps 6.0%
Cash payments of leasing costs,
debt & interest (263) - (263)
Other non-cash items in EBIT 22 8 30
------------------------------------ --------------- ------------------ ----------
Operating cash flow 361 14 375
------------------------------------ --------------- ------------------ ----------
Operating cash flow margin 3.6% +10 bps 3.7%
Capital expenditure (133) - (133)
Adjusting items to cash flow (33) 10 (23)
--------------- ------------------ ----------
Free cash flow before working
capital 195 24 219
Working capital (88) (24) (112)
Segmental free cash flow 107 - 107
Cash tax paid (18) - (18)
Cash interest paid (17) - (17)
------------------------------------ --------------- ------------------ ----------
Free cash flow 72 - 72
------------------------------------ --------------- ------------------ ----------
Dividend (46) - (46)
Purchase of own shares - share
buyback (32) - (32)
Purchase of own shares - employee
benefit trust (41) - (41)
Pension (78) - (78)
Other - - -
----------------------------------- --------------- ------------------ ----------
Movement in net cash (125) - (125)
------------------------------------ --------------- ------------------ ----------
Net cash 44 - 44
------------------------------------ --------------- ------------------ ----------
Other definitions
The following definitions may apply throughout this interim
statement and the Annual Report and Accounts 2021/22 previously
published:
Acquisition intangibles Acquired intangible assets such as customer bases,
brands and other intangible assets acquired through
a business combination capitalised separately from
goodwill.
----------------------------------------------------------
B2B Business to business.
----------------------- ----------------------------------------------------------
Board The Board of Directors of the Company.
----------------------- ----------------------------------------------------------
Carphone, Carphone The Company or Group prior to the Merger on 6 August
Warehouse or Carphone 2014.
Group
----------------------- ----------------------------------------------------------
CGU Cash-generating Unit.
----------------------- ----------------------------------------------------------
CODM Chief Operating Decision Maker.
----------------------- ----------------------------------------------------------
Company or the Currys plc (incorporated in England & Wales under
Company the Act, with registered number 07105905), whose
registered office is at 1 Portal Way, London W3
6RS .
----------------------- ----------------------------------------------------------
Credit adoption Sales on Credit as a proportion of total sales.
----------------------- ----------------------------------------------------------
CRM Customer Relationship Management.
----------------------- ----------------------------------------------------------
Currys plc or The Company, its subsidiaries, interests in joint
Group ventures and other investments.
----------------------- ----------------------------------------------------------
Dixons Retail The all share merger of Dixons Retail plc and Carphone
Merger or Merger Warehouse plc which occurred on 6 August 2014.
----------------------- ----------------------------------------------------------
EBT Employee benefit trust.
----------------------- ----------------------------------------------------------
ESG Environmental, social and governance.
----------------------- ----------------------------------------------------------
FVTOCI Financial assets measured at fair value through
other comprehensive income.
----------------------- ----------------------------------------------------------
GfK Growth from Knowledge.
----------------------- ----------------------------------------------------------
HMRC Her Majesty's Revenue and Customs.
----------------------- ----------------------------------------------------------
honeybee honeybee was our proprietary IT software for which
an asset sale was completed on 31 May 2018.
----------------------- ----------------------------------------------------------
IFRS International Financial Reporting Standards as
adopted by the UK.
----------------------- ----------------------------------------------------------
Market position Ranking against competitors in the electrical and
mobile retail market, measured by market share.
Market share is measured for each of the Group's
markets by comparing data for revenue or volume
of units sold relative to similar metrics for competitors
in the same market.
----------------------- ----------------------------------------------------------
MNO Mobile network operator.
----------------------- ----------------------------------------------------------
Net zero Net zero emissions includes our Scope 1, 2 and
3 emissions. In 2020, we collaborated with The
British Retail Consortium and other major retailers
on the development of a Climate Action Roadmap
to decarbonise the retail industry and its supply
chains. The plan aims to bring the retail industry
and its supply chains to Net Zero by 2040. Our
commitment to net zero meets a number of the criteria
of the SBTi Corporate Net-Zero Standard but is
not fully aligned or validated against this standard.
We will develop and publish a robust net zero emissions
roadmap for the Group which will provide detail
on carbon abatement for key emissions sources and
neutralisation plans of any source of residual
emissions that remain unfeasible to remove.
----------------------- ----------------------------------------------------------
NPS Net promoter score, a rating used by the Group
to measure customers' likelihood to recommend its
operations.
----------------------- ----------------------------------------------------------
Online Online sales and Online market share relate to
all sales where the journey is completed via the
website or app. This includes online home delivered,
order & collect, Online In-Store and ShopLive UK.
----------------------- ----------------------------------------------------------
Online in-store Sales that are generated through in-store tablets
for products that are not stocked in the store.
----------------------- ----------------------------------------------------------
Order & collect Sales where the sale is made via the website or
app and collected in store.
----------------------- ----------------------------------------------------------
Peak / post-Peak Peak refers to the 10-week trading period ending
on 7 January 2023 as to be announced in the Group's
Christmas Trading statement in January 2023. Post
peak refers to the trading period from 8 January
2023 to the Group's year end on 29 April 2023.
----------------------- ----------------------------------------------------------
RCF Revolving credit facility.
----------------------- ----------------------------------------------------------
Sharesave or Save as you earn share scheme.
SAYE
----------------------- ----------------------------------------------------------
ShopLive UK The Group's own video shopping service where store
colleagues can assist, advise and demonstrate the
use of products to customers online face-to-face.
----------------------- ----------------------------------------------------------
Store Store sales, Store market share, and Store share
of business relate to all sales where the journey
is completed in store. This excludes online home
delivered, order & collect, Online in-store and
ShopLive UK.
----------------------- ----------------------------------------------------------
TSR Total shareholder return.
----------------------- ----------------------------------------------------------
WAEP Weighted average exercise price.
----------------------- ----------------------------------------------------------
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END
IR GPGRAPUPPGMC
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