Business
FY24 Results
FY24 Results.
About this update from Dr. Martens Plc
[{"type":"text","content":"\n \n \n \n 30 May 2024 \n Dr. Martens plc \n Preliminary results for the year ended 31 March 2024 \n \n \n \"Our FY24 results were as expected and reflect continued weak USA consumer demand. This particularly impacted our USA wholesale business and offset our Group DTC performance, where pairs grew by 7%. We have achieved robust performances in EMEA and APAC, and our supply chain strategy continues to deliver good savings. We are clear that we need to drive demand in the USA to return to growth in FY26 onwards and are executing a detailed plan to achieve this, with refocused and increased USA marketing investment in the year ahead. We are also announcing a cost action plan across the Group, targeting savings of £20m to £25m. I am confident that the actions we are taking as we enter this year of transition will put us in good shape for the years ahead.\" \n \n Kenny Wilson, Chief Executive Officer \n \n \n \n \n \n £m \n \n \n FY24 \n \n \n \n FY23 \n \n \n % change Actual \n \n \n % change CC 2 \n \n \n \n \n Revenue \n \n \n 877.1 \n \n \n 1,000.3 \n \n \n -12.3% \n \n \n -9.8% \n \n \n \n \n DTC revenue mix \n \n \n 61% \n \n \n 52% \n \n \n +9pts \n \n \n \n \n \n \n \n EBITDA 1 \n \n \n 197.5 \n \n \n 245.0 \n \n \n -19.4% \n \n \n \n \n \n \n \n EBITDA margin \n \n \n 22.5% \n \n \n 24.5% \n \n \n -2.0pts \n \n \n \n \n \n \n \n EBIT \n \n \n 122.2 \n \n \n 176.2 \n \n \n -30.6% \n \n \n \n \n \n \n \n Profit Before Tax (before FX) 1 \n \n \n 97.2 \n \n \n 170.1 \n \n \n -42.9% \n \n \n \n \n \n \n \n Profit After Tax \n \n \n 69.2 \n \n \n 128.9 \n \n \n -46.3% \n \n \n \n \n \n \n \n Basic EPS (p) \n \n \n 7.0 \n \n \n 12.9 \n \n \n -45.7% \n \n \n \n \n \n \n \n Net Debt 1 \n \n \n 357.5 \n \n \n 288.3 \n \n \n \n \n \n \n \n \n \n \n Dividend per share (p) \n \n \n 2.55 \n \n \n 5.84 \n \n \n \n \n \n \n \n \n \n \n \n 1. Alternative Performance Measure (APM) as defined in the Glossary on pages 66 and 67. \n 2. Constant currency applies the same exchange rate to the FY23 and FY24 results, based on FY23 budgeted rates \n \n · Revenue down 12% (10% constant currency (CC)), with DTC revenue up 2% (5% CC) offset by Wholesale revenue down 28% (26%CC) primarily driven by USA wholesale \n · Within DTC, Retail revenue was up 6% (10% CC) and ecommerce was broadly flat (down 1% or up 1% CC) \n · By region: \n o EMEA revenue was down 3% (actual and CC), with 12% growth in DTC offset by wholesale decline, driven predominantly by the planned strategic decision to reduce volumes into EMEA etailers \n o Americas revenue declined 24% (20% CC) driven by wholesale \n o APAC revenue was broadly flat (down 7% or up 1% CC) driven by good growth in Japan \n · Strong performance in shoes and sandals, with DTC pairs in both categories growing over 20% year-on-year, showing the continued strength of the brand \n · Opened 35 net new own stores globally, with the majority of these being in continental Europe and APAC \n · Successful supply chain strategy delivered continued savings, supporting gross margins which increased 3.8%pts to 65.6% \n · Continued investment into IT systems including the Customer Data Platform and Supply and Demand Planning Systems, which will generate benefits FY26 onwards \n · Profit before tax (before FX losses) of £97.2m, down 43% driven by the decline in EBITDA together with increased Depreciation & Amortisation \n · Further strides made in Sustainability with the launch of UK Authorised Repair, USA ReWair and our first products made from reclaimed leather \n · Net Debt increased to £357.5m (FY23: £288.3m) due to returns to shareholders, lower profits and increased lease liabilities. Inventory was flat year-on-year, in line with expectations \n · The Board proposes a final dividend of 0.99p, taking the total dividend to 2.55p, equating to a 35% earnings payout. The Board's intention is to hold the FY25 dividend flat in absolute terms, before returning to an earnings payout in line with our dividend policy (of 25% to 35% payout) in FY26 onwards \n \n \n \n Current trading and guidance \n Current trading is in line with our expectations and our planning assumptions for FY25 are unchanged from those shared in our announcement on 16 th April. There remains a wide range of potential outcomes for both revenue and profit for the year, dependent on the performance through the key peak trading period. For the first half, we expect a Group revenue decline of around 20%, driven by wholesale revenues down around a third. Combined with the cost headwinds which impact both halves, the impact of operational deleverage is significantly more pronounced in the first half. Overall results this year will therefore be very second-half weighted, particularly from a profit perspective. \n Detailed financial guidance is on page 12. \n \n \n Enquiries \n Investors and analysts \n Bethany Barnes, Director of Investor Relations [email protected] \n +44 7825 187465 \n Beth Callum, Investor Relations Manager [email protected] \n \n Press \n H/Advisors Maitland +44 20 7379 5151 \n Katharine Spence +44 7384 535739 \n \n Gill Hammond, Director of Communications +44 7384 214248 \n \n \n Presentation of full year results \n Kenny Wilson, CEO and Giles Wilson, CFO will be presenting the FY24 results at 09:30 (UK time) on 30 May 2024. The presentation will be streamed live and the link to join is https://www.drmartensplc.com . A playback of the presentation will be available on our corporate website after the event, at https://www.drmartensplc.com/investors/results-centre . \n \n About Dr. Martens \n Dr. Martens is an iconic British brand founded in 1960 in Northamptonshire. Produced originally for workers looking for tough, durable boots, the brand was quickly adopted by diverse youth subcultures and associated musical movements. Dr. Martens has since transcended its working-class roots while still celebrating its proud heritage and, six decades later, \"Docs\" or \"DM's\" are worn by people around the world who use them as a symbol of empowerment and their own individual attitude. The Company listed on the main market of the London Stock Exchange on 29 January 2021 (DOCS.L) and is a constituent of the FTSE 250 index. \n \n Cautionary statement relating to forward-looking statements \n Announcements, presentations to investors, or other documents or reports filed with or furnished to the London Stock Exchange (LSE) and any other written information released, or oral statements made, to the public in the future by or on behalf of Dr. Martens plc and its group companies (\"the Group\"), may contain forward-looking statements. \n Forward-looking statements give the Group's current expectations or forecasts of future events. An investor can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as 'aim', 'ambition', 'anticipate', 'estimate', 'expect', 'intend', 'will', 'project', 'plan', 'believe', 'target' and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. In particular, these include statements relating to future actions, future performance or results of current and anticipated products, expenses, the outcome of contingencies such as legal proceedings, dividend payments and financial results. Other than in accordance with its legal or regulatory obligations (including under the Market Abuse Regulation, the UK Listing Rules and the Disclosure and Transparency Rules of the Financial Conduct Authority), the Group undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The reader should, however, consult any additional disclosures that the Group may make in any documents which it publishes and/or files with the LSE. All readers, wherever located, should take note of these disclosures. Accordingly, no assurance can be given that any particular expectation will be met and investors are cautioned not to place undue reliance on the forward-looking statements. \n Forward-looking statements are subject to assumptions, inherent risks and uncertainties, many of which relate to factors that are beyond the Group's control or precise estimate. The Group cautions investors that a number of important factors, including those referred to in this document, could cause actual results to differ materially from those expressed or implied in any forward-looking statement. Any forward-looking statements made by or on behalf of the Group speak only as of the date they are made and are based upon the knowledge and information available to the Directors on the date of this report. \n \n \n \n BUSINESS REVIEW \n FY24 was a challenging year for our business, with a difficult trading environment and considerable macroeconomic uncertainty. Our largest market, the USA, continues to face two significant external headwinds, namely weak consumer confidence impacting spending and a particularly challenging boots segment, which was down 17% for the year overall (source: Circana data). This resulted in widespread caution from wholesale customers, leading to weaker wholesale order books, as well as impacting our DTC ('Direct-to-consumer') performance. The USA has the highest wholesale penetration of any major market, and therefore the weak performance here had a significant impact on our business overall. We have a new leadership team in the Americas which is still embedding, and our marketing and trading execution during the year was not as strong as it should have been. In the next section we detail the changes we're making in our marketing approach and the action plan we're implementing to reignite demand in this market. \n In FY24 we took the strategic decision to reduce the breadth and depth of volume we sell to EMEA etailers, which reduced wholesale revenues in this region. The 11.8% EMEA DTC growth is therefore more indicative of our underlying performance, albeit it was partially flattered by the earlier timing of Easter. Within EMEA, our conversion markets of Germany, Italy and Spain saw strong double-digit DTC growth and UK DTC growth was positive, although at a lower level. Japan makes up the majority of our APAC region and we saw continued good growth in this largely DTC market. \n We achieved significant supply chain savings through the year, which benefited gross margin. These savings were due to our supply chain transformation strategy together with a relatively benign sourcing backdrop. The ongoing supply chain transformation has steadily increased direct control over our supply chain inputs, from around 10% five years ago to around 70% today. This has enabled improved quality and consistency, diversification of risk from single point dependency and direct negotiation of costs. The savings delivered in FY24 as a result of this strategy include lower costs for key components, factory benchmarking to align profit, re-negotiation of our inbound shipping contract and optimisation and re-tender of retail outbound freight. \n Our product strategy is 'icons and innovation', meaning that we aim to grow revenue of our iconic continuity products through constant innovation around this core, to drive brand heat and newness. We aim to grow all three categories of boots, shoes and sandals simultaneously. Pairs sold declined by 17% year-on-year, however this was entirely due to weakness in wholesale orders, with DTC pairs up 7%. By category, DTC pairs for both shoes and sandals grew more than 20% year-on-year, whilst DTC boots pairs saw a small decline. Growing shoes and sandals, alongside growing boots, is an important part of our strategy to broaden our product portfolio over the medium-term, and we saw particularly good success during the year with our mules range within sandals and loafers within shoes. We are steadfastly focused on growing our boots category, with this accounting for 66% of Group revenues in FY24. \n During AW23 we launched a capsule collection of our new Amp category : 14XX. Amp and 14XX represents the pinnacle of our creative expression, with cutting-edge innovation at the forefront while still remaining true to our product handwriting and design principles of durability and versatility. The capsule collection, built around our original 1460 boot, 1461 shoe and 2976 Chelsea boot, saw encouraging consumer feedback and in AW24 we will launch a larger 14XX range to consumers. The purpose of these collections is to create a 'trickle down' effect, creating demand for the mainline product range. \n Collaborations have always been an important part of our product strategy, being an incubator for future product success and scale, whilst also driving brand heat. In FY24 our collaborations included a partnership with Lagos-born, London-based collective Motherlan, which reinterpreted our 1461 shoe. We also worked with streetwear brand Girls Don't Cry with our creeper shoe, which was released through our ecommerce channels globally together with Dover Street Market locations and sold out worldwide within 48 hours. As part of our celebration of 10 years of the Jadon, our biggest product within our Fusion category and one of our four icon products, we launched a collaboration with fashion-forward brand Ganni, with a high impact activation event in New York. We also returned to our highly successful partnership with Rick Owens, this time creating two iterations of our 1460 boot together with our 18 eyelet 1918 boot. These boots stood on our inflated DMXL sole which originated in our 14XX range. Exaggerating our classic construction, the sole combines lightweight EVA with durable PVC pods. \n The business continues on a professionalisation journey, of which a key element is the next phase of our technology investment programme. The projects currently underway are the Customer Data Platform and the Supply and Demand Planning System. The Customer Data Platform will give us a single customer view across both DTC channels (retail and ecommerce), enabling more targeted marketing and consumer engagement. The Supply and Demand Planning System is a modern and agile planning system, which will improve availability and accuracy of product forecasting. This will drive meaningful working capital savings, beginning in FY26. Alongside these two projects we have a number of other technology workstreams underway to improve our data capabilities, increase our speed of decision making and drive efficiency. \n We continue to make significant strides in sustainability. Our Science Based Targets were verified and approved by the Science Based Target Initiative in October. We have committed to reducing our absolute greenhouse gas emissions aligned with the Science Based Targets initiative to achieve near-term reduction targets by 2030 and Net Zero by FY40. \n In October we launched our Authorised Repair service to consumers in the UK . The service enables consumers to repair their Dr. Martens products, working with a third-party repair partner and using our own machines and materials. Consumer reaction so far has been very encouraging and we will look to roll this out in our other key markets in the future. \n In March we launched our own resale offering in the USA, named ReWair . We repair and restore second hand Dr. Martens products and sell them through a directly run dedicated resale site. ReWair is an important part of our Net Zero by FY40 target as the carbon generated from a resale is substantially lower than a new product. Although relatively early days, performance since launch has exceeded expectations, for both revenue and conversion rate, and we've had high positive engagement on social media. \n In late March we also launched three products in Genix Nappa, a new upper material made from reclaimed leather . This is an important step in our efforts to achieve our target of 100% of products made from sustainable materials by 2040. It is early days, however press and consumer engagement has been positive. \n \n LOOKING TO FY25 AND BEYOND \n FY25 will be a year of transition for our business. In EMEA and APAC regions we will continue to execute our successful DOCS strategy, to take advantage of the significant whitespace growth opportunity in both. \n We continue to see good brand metrics globally . Total brand awareness has increased by 2% to 74%. In EMEA, our key conversion markets of Germany, Italy and Spain each saw brand awareness growth of 2-3%pts. Our home market of UK saw a marginal decline in brand awareness although this remains significantly above the Group at 92%. In Japan our brand awareness increased by 1%pts to 53%, with continued opportunity to close the gap to the Group average. \n In the USA, where we have seen a disappointing trading performance, brand awareness is flat at 73%, however we have seen a meaningful decline in consideration from consumers who have not purchased recently and therefore our efforts will be particularly focused on broadening our appeal to attract new consumers. \n Under the direction of Ije Nwokorie, in his current role as Chief Brand Officer (CBO), we are shifting our marketing efforts globally from storytelling focused on culture to a relentless focus on product marketing . Our AW24 marketing will lead and be dominated by boots and the marketing organisation has been reorganised to product-led marketing, centred around icons. \n The USA remains our number one priority across the business and we are implementing a detailed action plan to return this business to growth, targeting a return to positive DTC growth in H2 FY25. Against this action plan we are increasing marketing investment as a percentage of revenue in the USA in the year ahead, whilst ensuring that we maximise the return and efficiency of this spend. The key pillars of this action plan are: \n - Marketing : We will have an 'always on' product marketing approach to icons, a re-energisation of boots in AW24 and four key seasonal boot stories to ensure we drive newness and excitement. Marketing spend will be increased on mid to lower funnel activity, to drive consideration. \n - Digital: We will improve the quality of our product detail pages and optimise our checkout process to maximise ecommerce conversion. We will seek to drive more qualified traffic to our site, again to improve conversion. Finally, we will implement an order in store offering. \n - Wholesale: Given the nature of wholesale order books, there will be a lag between when we see our USA DTC performance improve and when our wholesale business will return to growth. Our expectation is that we won't see an in-market restock driving a recovery in our USA wholesale revenues until AW25 at the earliest, which equates to the second half of FY26. We therefore anticipate our USA wholesale revenue declining double-digit percentage in FY25. Through FY25, however, we will work with key USA wholesale customers to focus actions on driving boots sell-through in store. \n Over recent years we have invested in the business and built an operating cost base in anticipation of a larger business, and with revenues weaker we are therefore seeing significant deleverage. Alongside our action plan to reignite DTC boots growth, we will also be implementing a cost action plan across the Group, led by new CFO Giles Wilson and the leadership team. We will target £20m to £25m of cost reduction, with savings from organisational efficiency and design, better procurement and operational streamlining. We will see the benefit of this saving in FY26, with the FY25 benefit likely to be immaterial due to the costs of implementation. Further details and a progress update will be provided at our first half results in November. \n \n \n \n FINANCE REVIEW \n Total revenue declined 12.3% (9.8% CC) with 2.4% growth in DTC (4.9% CC) offset by a 28.3% decline in wholesale revenues (-26.0% CC). Profit before tax (before FX charge) was £97.2m (FY23: £170.1m), down 42.9%, reflecting lower EBITDA, increased depreciation and amortisation charges due to continued investments in new stores and IT projects, and higher rate-led interest costs. Earnings per share declined by 45.7% to 7.0p. \n \n Results - at a glance \n \n \n \n \n \n \n \n \n £m \n \n \n \n \n \n FY24 \n \n \n FY23 \n \n \n % change \n Actual \n \n \n % change \n CC 4 \n \n \n \n \n Revenue \n \n \n Ecommerce \n \n \n 276.3 \n \n \n 279.0 \n \n \n -1.0% \n \n \n 1.0% \n \n \n \n \n \n \n \n Retail \n \n \n 256.8 \n \n \n 241.7 \n \n \n 6.2% \n \n \n 9.5% \n \n \n \n \n \n \n \n DTC \n \n \n 533.1 \n \n \n 520.7 \n \n \n 2.4% \n \n \n 4.9% \n \n \n \n \n \n \n \n Wholesale 3 \n \n \n 344.0 \n \n \n 479.6 \n \n \n -28.3% \n \n \n -26.0% \n \n \n \n \n \n \n \n \n \n \n 877.1 \n \n \n 1,000.3 \n \n \n -12.3% \n \n \n -9.8% \n \n \n \n \n Gross margin \n \n \n \n \n \n 575.2 \n \n \n 618.1 \n \n \n -6.9% \n \n \n \n \n \n \n \n Opex \n \n \n \n \n \n (377.7) \n \n \n (373.1) \n \n \n 1.2% \n \n \n \n \n \n \n \n EBITDA 1 \n \n \n \n \n \n 197.5 \n \n \n 245.0 \n \n \n -19.4% \n \n \n \n \n \n \n \n Depreciation & Amortisation \n \n \n \n \n \n (72.3) \n \n \n (54.2) \n \n \n 33.4% \n \n \n \n \n \n \n \n EBIT 1 \n \n \n \n \n \n 122.2 \n \n \n 176.2 \n \n \n -30.6% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Profit before tax (before FX charge) 1 \n \n \n \n \n \n 97.2 \n \n \n 170.1 \n \n \n -42.9% \n \n \n \n \n \n \n \n Profit before tax \n \n \n \n \n \n 93.0 \n \n \n 159.4 \n \n \n -41.7% \n \n \n \n \n \n \n \n Profit after tax \n \n \n \n \n \n 69.2 \n \n \n 128.9 \n \n \n -46.3% \n \n \n \n \n \n \n \n Basic earnings per share (p) \n \n \n \n \n \n 7.0 \n \n \n 12.9 \n \n \n -45.7% \n \n \n \n \n \n \n \n Dividend per share (p) \n \n \n \n \n \n 2.55 \n \n \n 5.84 \n \n \n -56.3% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Key statistics \n \n \n Pairs sold (m) \n \n \n 11.5 \n \n \n 13.8 \n \n \n -17% \n \n \n \n \n \n \n \n \n \n \n No. of stores 2 \n \n \n 239 \n \n \n 204 \n \n \n 17% \n \n \n \n \n \n \n \n \n \n \n DTC mix % \n \n \n 61% \n \n \n 52% \n \n \n +9pts \n \n \n \n \n \n \n \n \n \n \n Gross margin % \n \n \n 65.6% \n \n \n 61.8% \n \n \n +3.8pts \n \n \n \n \n \n \n \n \n \n \n EBITDA margin % 1 \n \n \n 22.5% \n \n \n 24.5% \n \n \n -2.0pts \n \n \n \n \n \n \n \n \n 1. Alternative Performance Measure (APM) as defined in the Glossary on pages 66 and 67. \n 2. Own stores on streets and malls operated under arm's length leasehold arrangements. \n 3. Wholesale revenue including distributor customers. \n \n 4. Constant currency applies the same exchange rate to the FY24 and FY23 non-GBP results, based on FY24 budgeted rates. \n \n \n \n PERFORMANCE BY CHANNEL \n Revenue decreased by 12.3% to £877.1m (FY23: £1,000.3m), down 9.8% on a CC basis. DTC grew 2.4% to £533.1m (FY23: £520.7m), up 4.9% on a CC basis, representing 61% of revenue mix. Wholesale revenues declined 28.3% to £344.0m (FY23: £479.6m), down 26% on a CC basis. The wholesale channel was impacted both by planned strategic decisions to reduce volumes into EMEA etailers and cease the distributor contract in China, and very weak wholesale orders in USA due to widespread caution from wholesale customers. Volume, represented by pairs sold, declined 17% to 11.5m pairs with all the reduction in wholesale; DTC volume increased 7%. \n \n Ecommerce revenue was down 1.0% to £276.3m (FY23: £279.0m) and was up 1.0% on a CC basis which represented a revenue mix of 32% (FY23: 28%). Good growth throughout the year in both EMEA (up 9.6% CC) and APAC (up 12.5% CC), was offset by continued weak trading in USA, (down 9.9% CC). We saw traffic growth in EMEA and APAC, whilst in USA traffic declined. Ecommerce conversion improved in all three regions. Following the implementation of an order management system (\"OMS\") in EMEA, we successfully rolled out a full omnichannel offer across all UK stores with Continental Europe to follow in FY25. \n \n Retail revenue grew 6.2% to £256.8m (FY23: £241.7m), up 9.5% on a CC basis. Growth was led by new and maturing stores (stores opened last financial year) across all geographies, with continued footfall recovery in EMEA and APAC, offset by footfall decline in USA. We also benefitted from the transfer of 14 Japan franchise stores at the end of FY23. During the year, we opened 46 new stores and closed 11 stores, to end the year with 239 own stores. \n \n Wholesale revenue was down 28.3% to £344.0m (FY23: £479.6m), 26.0% lower on a CC basis. As previously announced, we took three strategic decisions which impacted wholesale revenues this year. Firstly, we significantly reduced the quantity and breadth of product sold into EMEA etailers, in order to ensure scarcity of supply in the region and migrate sales to our own websites. We also ceased sales to our distributor in China ahead of the contract ending in June 2023, and in USA we worked with two large wholesale accounts who had excess inventory, reducing shipments through the first half in order to right size their inventory positions. In addition to these strategic decisions, revenues were impacted by widespread caution amongst wholesale customers in the USA, resulting in a significantly weaker USA order book year-on-year. \n \n The total number of wholesale accounts globally decreased to 1.6k after closing c.500 accounts and opening c.200 accounts. Total revenues per account declined by 18%. \n \n \n \n \n \n PERFORMANCE BY REGION \n \n \n \n \n \n \n \n \n £m \n \n \n \n \n \n FY24 \n \n \n FY23 \n \n \n % change \n Actual \n \n \n % change \n CC \n \n \n \n \n Revenue: \n \n \n EMEA \n \n \n 431.8 \n \n \n 443.0 \n \n \n -2.5% \n \n \n -3.0% \n \n \n \n \n \n \n \n Americas \n \n \n 325.8 \n \n \n 428.2 \n \n \n -23.9% \n \n \n -20.2% \n \n \n \n \n \n \n \n APAC \n \n \n 119.5 \n \n \n 129.1 \n \n \n -7.4% \n \n \n 0.5% \n \n \n \n \n \n \n \n \n \n \n 877.1 \n \n \n 1,000.3 \n \n \n -12.3% \n \n \n -9.8% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n EBITDA 1 : \n \n \n EMEA \n \n \n 140.8 \n \n \n 146.1 \n \n \n -3.6% \n \n \n \n \n \n \n \n \n \n \n Americas \n \n \n 64.4 \n \n \n 100.1 \n \n \n -35.7% \n \n \n \n \n \n \n \n \n \n \n APAC \n \n \n 31.7 \n \n \n 33.8 \n \n \n -6.2% \n \n \n \n \n \n \n \n \n \n \n Support costs 2 \n \n \n (39.4) \n \n \n (35.0) \n \n \n 12.6% \n \n \n \n \n \n \n \n \n \n \n \n \n \n 197.5 \n \n \n 245.0 \n \n \n -19.4% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n EBITDA 1 margin by region: \n \n \n EMEA \n \n \n 32.6% \n \n \n 33.0% \n \n \n -0.4pts \n \n \n \n \n \n \n \n \n \n \n Americas \n \n \n 19.8% \n \n \n 23.4% \n \n \n -3.6pts \n \n \n \n \n \n \n \n \n \n \n APAC \n \n \n 26.5% \n \n \n 26.2% \n \n \n +0.3pts \n \n \n \n \n \n \n \n \n \n \n Total \n \n \n 22.5% \n \n \n 24.5% \n \n \n -2.0pts \n \n \n \n \n \n \n \n \n 1. Alternative Performance Measure (APM) as defined in the Glossary on pages 66 and 67. \n \n 2. Support costs represent group related support costs not directly attributable to each region's operations and including Group Finance, Legal, Group HR, Global Brand and Design, Directors and other group only related costs and expenses. \n \n \n \n EMEA Revenue was down 2.5% to £431.8m (FY23: £443.0m) and down 3.0% on a CC basis. DTC grew by 11.8% (10.7% CC) with retail and ecommerce both up 11.8% (11.9% CC and 9.6% CC respectively). DTC mix grew by 7.7%pts, with DTC growth in all core markets (UK and France both up low single-digits, with Germany, Spain and Italy all up over 25% on a CC basis). DTC growth was offset by wholesale revenue down 19.2% as expected, due to the strategic decision to reduce volume and breadth sold to etailers. \n \n During the year we opened 20 new stores: six stores in Italy, four stores each in Germany and UK, two stores each in Spain and Belgium, one store in France and our first store in Denmark. Included in the new store openings were six locations that were closed and relocated to more prominent positions in Belgium, Germany and UK. \n \n EMEA EBITDA was down 3.6% to £140.8m (FY23: £146.1m), with EBITDA margin 32.6%, 0.4%pts lower than last year, impacted by foreign exchange on purchases and the opex investments including the expansion of retail stores and investment in brand and demand marketing. \n \n Americas Revenue was down 23.9% to £325.8m (FY23: £428.2m) (20.2% CC). DTC revenue was down 6.9% with lower footfall and traffic in retail and ecommerce respectively only partly mitigated by new and maturing stores and better conversion across both channels. DTC mix increased by 8.3%pts. Wholesale revenue declined 32.7% on a CC basis, partly due to the strategic decision to manage down inventory of some of our larger wholesale customers but also driven by widespread caution from wholesale customers resulting in weaker order books. We maintained a disciplined approach to wholesale, and at the end of the financial year the average inventory position of our top ten USA wholesale customers was down around a quarter compared to the prior year. \n During the year we opened 7 new stores: two in LA and one in each Washington DC, Miami, Philadelphia, San Antonio and Denver. We also improved picking automation in our Los Angeles distribution centre (\"LADC\"), expanded operational functionality and space in the New Jersey distribution centre (\"NJDC\") and relocated our Canada distribution centre from the West Coast to Toronto. \n \n Americas EBITDA was 35.7% lower at £64.4m (FY23: £100.1m) with EBITDA margin 3.6%pts lower than last year, reflecting lower revenue together with additional storage costs of £13.1m due to the elevated inventory levels in this market. \n \n APAC Revenue was down 7.4% to £119.5m (FY23: £129.1m) (+0.5% CC). We saw lower revenue in China due to the planned exit of the distributor contract in June 2023 and in Japan we transferred 14 franchise stores at the end of last financial year; these two factors drove APAC wholesale revenue down 24.0% on a CC basis. DTC revenues grew 18.8%, improving DTC mix by 10.4%pts, with both retail and ecommerce growing double-digits. This was led by Japan with DTC revenues up 35.5% with both underlying growth and the benefit of the franchise stores transfer at the end of FY23. \n \n During the year we opened 19 new stores with six stores each in Japan and South Korea, five in China and two in Hong Kong. \n \n APAC EBITDA was down 6.2% to £31.7m (FY23: £33.8m) and EBITDA margin up 0.3%pts due to increased mix from Japan (our most profitable market), partly offset by lower EBITDA in China (as a result of lower distributor revenue in the period across a fixed cost base). \n \n \n \n RETAIL STORE ESTATE \n During the year, we opened 46 (FY23: 52) new own retail stores (via arm's length leasehold arrangements) and closed 11 (FY23: 6) stores as follows: \n \n \n \n \n \n \n \n \n \n \n \n \n 1 April 2023 \n \n \n \n \n \n Opened \n \n \n \n \n \n Closed \n \n \n \n \n \n 31 March 2024 \n \n \n \n \n EMEA: \n \n \n UK \n \n \n 33 \n \n \n \n \n \n 4 \n \n \n \n \n \n (2) \n \n \n \n \n \n 35 \n \n \n \n \n \n \n \n Germany \n \n \n 17 \n \n \n \n \n \n 4 \n \n \n \n \n \n (2) \n \n \n \n \n \n 19 \n \n \n \n \n \n \n \n France \n \n \n 16 \n \n \n \n \n \n 1 \n \n \n \n \n \n - \n \n \n \n \n \n 17 \n \n \n \n \n \n \n \n Italy \n \n \n 6 \n \n \n \n \n \n 6 \n \n \n \n \n \n - \n \n \n \n \n \n 12 \n \n \n \n \n \n \n \n Spain \n \n \n 4 \n \n \n \n \n \n 2 \n \n \n \n \n \n - \n \n \n \n \n \n 6 \n \n \n \n \n \n \n \n Other \n \n \n 12 \n \n \n \n \n \n 3 \n \n \n \n \n \n (2) \n \n \n \n \n \n 13 \n \n \n \n \n \n \n \n \n \n \n 88 \n \n \n \n \n \n 20 \n \n \n \n \n \n (6) \n \n \n \n \n \n 102 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Americas: \n \n \n \n \n \n 54 \n \n \n \n \n \n 7 \n \n \n \n \n \n - \n \n \n \n \n \n 61 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n APAC: \n \n \n Japan \n \n \n 40 \n \n \n \n \n \n 6 \n \n \n \n \n \n (3) \n \n \n \n \n \n 43 \n \n \n \n \n \n \n \n China \n \n \n 5 \n \n \n \n \n \n 5 \n \n \n \n \n \n (1) \n \n \n \n \n \n 9 \n \n \n \n \n \n \n \n South Korea \n \n \n 11 \n \n \n \n \n \n 6 \n \n \n \n \n \n - \n \n \n \n \n \n 17 \n \n \n \n \n \n \n \n Hong Kong \n \n \n 6 \n \n \n \n \n \n 2 \n \n \n \n \n \n (1) \n \n \n \n \n \n 7 \n \n \n \n \n \n \n \n \n \n \n 62 \n \n \n \n \n \n 19 \n \n \n \n \n \n (5) \n \n \n \n \n \n 76 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total \n \n \n \n \n \n \n 204 \n \n \n \n \n \n 46 \n \n \n \n \n \n (11) \n \n \n \n \n \n 239 \n \n \n \n \n \n The Group also trades from 22 (FY23: 28) concession counters in department stores in South Korea and a further 77 (FY23: 119) mono-branded franchise stores around the world with no stores in China (FY23: 55, the decline being due to the end of the distributor contract), 19 in Japan (FY23: 16), 24 across Australia and New Zealand (FY23: 20), 34 across other South East Asia countries, the Nordics and Canada (FY23: 28). \n \n ANALYSIS OF PERFORMANCE BY HALF YEAR \n Revenue in H2 was down 17.3% to £481.3m (FY23: £581.7m) (down 14.5% CC) with EBITDA down 23.2% to £119.9m (FY23: £156.2m). \n Ecommerce revenue was up 5.1% in H1 and down 1.0% in H2 on a CC basis. In retail, revenue grew in both halves of the financial year led by new and maturing stores and continued footfall recovery in both EMEA and APAC. Both EMEA and APAC were impacted by strategic decisions, of reducing EMEA etailer volumes and ceasing the distributor in China respectively. In Americas, revenue was down in both halves as expected, predominantly driven by wholesale. \n \n \n \n \n \n \n \n \n \n \n \n \n H1 FY24 \n \n \n \n \n \n H2 FY24 \n \n \n \n \n \n \n \n \n \n \n Actual \n \n \n CC \n \n \n \n \n \n Actual \n \n \n CC \n \n \n \n \n Total Revenue \n \n \n \n \n \n -5.4% \n \n \n -3.5% \n \n \n \n \n \n -17.3% \n \n \n -14.5% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Channel: \n \n \n Ecommerce \n \n \n 3.3% \n \n \n 5.1% \n \n \n \n \n \n -2.9% \n \n \n -1.0% \n \n \n \n \n \n \n \n Retail \n \n \n 15.1% \n \n \n 17.4% \n \n \n \n \n \n 0.9% \n \n \n 4.6% \n \n \n \n \n \n \n \n DTC \n \n \n 9.2% \n \n \n 11.3% \n \n \n \n \n \n -1.2% \n \n \n 1.5% \n \n \n \n \n \n \n \n Wholesale 1 \n \n \n -16.5% \n \n \n -14.7% \n \n \n \n \n \n -40.0% \n \n \n -37.4% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Region: \n \n \n EMEA \n \n \n 8.5% \n \n \n 7.5% \n \n \n \n \n \n -10.0% \n \n \n -10.1% \n \n \n \n \n \n \n \n Americas \n \n \n -17.8% \n \n \n -14.6% \n \n \n \n \n \n -28.3% \n \n \n -24.3% \n \n \n \n \n \n \n \n APAC \n \n \n -10.0% \n \n \n -3.3% \n \n \n \n \n \n -5.2% \n \n \n 3.6% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 1. Wholesale revenue including distributor customers. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n ANALYSIS OF PERFORMANCE BY QUARTER \n DTC Revenue in Q4 showed a return to growth at 9.7% CC vs a 3.2% CC decline in Q3, however this benefitted from the timing of Easter and the end of season sale, which moved from Q1 FY25 (as is typically the case) to Q4 FY24. Retail grew in all quarters on a CC basis led by new and maturing stores and continued footfall recovery, supported by volume growth in EMEA and APAC. Ecommerce grew in the first half, declined in Q3, before returning to positive growth in Q4, again helped by timing changes. \n Wholesale was down in all quarters due a combination of the strategic decisions taken in EMEA and APAC, together with the continued challenging backdrop in the USA. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Q1 \n \n \n \n \n \n Q2 \n \n \n \n \n \n Q3 \n \n \n \n \n \n Q4 \n \n \n \n \n \n \n \n \n \n \n Actual \n \n \n CC \n \n \n \n \n \n Actual \n \n \n CC \n \n \n \n \n \n Actual \n \n \n CC \n \n \n \n \n \n Actual \n \n \n CC \n \n \n \n \n Total Revenue \n \n \n \n \n \n -11.0% \n \n \n -11.2% \n \n \n \n \n \n -2.2% \n \n \n 1.3% \n \n \n \n \n \n -20.5% \n \n \n -17.9% \n \n \n \n \n \n -12.9% \n \n \n -9.8% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Revenue: \n \n \n Ecommerce \n \n \n 7.3% \n \n \n 6.8% \n \n \n \n \n \n 0.1% \n \n \n 3.8% \n \n \n \n \n \n -9.3% \n \n \n -7.6% \n \n \n \n \n \n 9.5% \n \n \n 11.8% \n \n \n \n \n \n \n \n Retail \n \n \n 27.4% \n \n \n 27.2% \n \n \n \n \n \n 5.6% \n \n \n 9.5% \n \n \n \n \n \n -0.1% \n \n \n 2.9% \n \n \n \n \n \n 2.6% \n \n \n 7.4% \n \n \n \n \n \n \n \n DTC \n \n \n 17.4% \n \n \n 17.1% \n \n \n \n \n \n 2.9% \n \n \n 6.7% \n \n \n \n \n \n -5.4% \n \n \n -3.2% \n \n \n \n \n \n 6.2% \n \n \n 9.7% \n \n \n \n \n \n \n \n Wholesale 1 \n \n \n -41.1% \n \n \n -41.0% \n \n \n \n \n \n -5.3% \n \n \n -2.1% \n \n \n \n \n \n -48.6% \n \n \n -46.1% \n \n \n \n \n \n -31.7% \n \n \n -29.3% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Region: \n \n \n EMEA \n \n \n -1.4% \n \n \n -2.7% \n \n \n \n \n \n 13.8% \n \n \n 13.1% \n \n \n \n \n \n -14.5% \n \n \n -14.9% \n \n \n \n \n \n -3.0% \n \n \n -2.6% \n \n \n \n \n \n \n \n Americas \n \n \n -26.3% \n \n \n -26.5% \n \n \n \n \n \n -12.3% \n \n \n -6.3% \n \n \n \n \n \n -30.8% \n \n \n -26.3% \n \n \n \n \n \n -25.2% \n \n \n -21.9% \n \n \n \n \n \n \n \n APAC \n \n \n 12.2% \n \n \n 16.1% \n \n \n \n \n \n -21.7% \n \n \n -13.9% \n \n \n \n \n \n -8.0% \n \n \n -1.1% \n \n \n \n \n \n -1.9% \n \n \n 9.0% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 1. Wholesale revenue including distributor customers. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n EBITDA ANALYSIS \n Gross margin improved by 3.8pts to 65.6% with the biggest benefit being from supply chain savings, together with the benefits of new and maturing stores and price net COGS inflation. In the year, the average price increase was 4.5% and COGs inflation was approximately 6%. \n \n Operating expenses increased by 1.2%, or £4.6m, to £377.7m. Within this movement we benefitted from supply chain savings, which were offset by the operating cost drag from new and maturing stores, together with a small year-on-year increase in marketing spend. The supply chain savings were the result of continued good cost control, including lower volume-related costs and retail outbound freight savings. Within our operating costs we incurred £13.1m (FY23: £14.5m) in relation to temporary inventory storage space rented in LA, given the elevated inventory levels in this market. \n \n EBITDA decreased by 19.4% to £197.5m (FY23: £245.0m) resulting in an EBITDA margin decrease of 2.0pts to 22.5%. Increased costs (as a percentage of revenue) were partially offset by supply chain savings. \n \n EBIT decreased by 30.6% to £122.2m as a result of the decline in EBITDA together with increased depreciation and amortisation. \n \n EARNINGS \n The following table analyses the results for the year from EBITDA to profit before tax. \n \n \n \n \n \n \n \n \n £m \n \n \n \n \n \n FY24 \n \n \n FY23 \n \n \n \n \n EBITDA 1 \n \n \n \n \n \n 197.5 \n \n \n 245.0 \n \n \n \n \n Depreciation and amortisation \n \n \n \n \n \n (72.3) \n \n \n (54.2) \n \n \n \n \n Impairment \n \n \n \n \n \n - \n \n \n (3.9) \n \n \n \n \n Other gains \n \n \n \n \n \n 1.2 \n \n \n - \n \n \n \n \n Foreign exchange losses \n \n \n \n \n \n (4.2) \n \n \n (10.7) \n \n \n \n \n EBIT 1 \n \n \n \n \n \n 122.2 \n \n \n 176.2 \n \n \n \n \n Net interest cost on bank debt \n \n \n \n \n \n (19.4) \n \n \n (10.8) \n \n \n \n \n Amortisation of loan issue costs/interest on lease liabilities \n \n \n \n \n \n (9.8) \n \n \n (6.0) \n \n \n \n \n Profit before tax \n \n \n \n \n \n 93.0 \n \n \n 159.4 \n \n \n \n \n Tax \n \n \n \n \n \n (23.8) \n \n \n (30.5) \n \n \n \n \n Earnings \n \n \n \n \n \n 69.2 \n \n \n 128.9 \n \n \n \n \n \n \n 1. Alternative Performance Measure (APM) as defined in the Glossary on pages 66 and 67. \n \n \n \n Profit before tax (including FX charge) declined by 41.7% to £93.0m (FY23: £159.4m) with profit after tax of £69.2m (FY23: £128.9m). This was primarily due to lower EBITDA together with higher depreciation and amortisation costs and higher interest costs. \n \n Depreciation and amortisation charged in the period was £72.3m (FY23: £54.2m), and is analysed as follows: \n \n \n \n \n \n \n \n \n £m \n \n \n FY24 \n \n \n FY23 \n \n \n \n \n Amortisation of intangibles 1 \n \n \n 5.8 \n \n \n 8.4 \n \n \n \n \n Depreciation of property, plant and equipment 2 \n \n \n 15.2 \n \n \n 13.6 \n \n \n \n \n \n \n \n 21.0 \n \n \n 22.0 \n \n \n \n \n Depreciation of right-of-use assets 3 \n \n \n 51.3 \n \n \n 32.2 \n \n \n \n \n Total \n \n \n 72.3 \n \n \n 54.2 \n \n \n \n \n \n \n 1. Mainly represented by IT related spend with the average term of 5 to 15 years. \n 2. Mainly represented by new store fit out costs with the average term of 5 years. \n 3. Mainly represented by depreciation of IFRS 16 capitalised leases with the average term remaining of 3.8 years and 263 properties (FY23: 5.1 years and 229 properties). \n \n \n \n \n \n \n \n Foreign Exchange \n Dr. Martens is a global brand selling to consumers across the world in many different currencies, with the financial statements reported in GBP. Foreign currency amounts in the profit or loss account are prepared on an average actual currency rate basis for the year. These exchange rates are calculated monthly and applied to revenue and costs generated in that month, such that the actual performance translated across the year is dependent on monthly trading profiles as well as movement in currency exchange rates. To aid comparability of underlying performance, we have also calculated constant currency for revenue. This is calculated by translating non-sterling revenues at the same exchange rate year on year. \n Foreign exchange exposures mainly impacting the Group are £/$, £/€ and £/¥. The following table summarises average exchange rates used in the year: \n \n \n \n \n \n \n \n \n \n £/$ \n \n \n \n \n \n \n £/€ \n \n \n \n \n \n \n £/¥ \n \n \n \n \n \n \n \n FY24 \n \n \n FY23 \n \n \n % \n \n \n \n \n \n FY24 \n \n \n FY23 \n \n \n % \n \n \n \n \n \n FY24 \n \n \n FY23 \n \n \n % \n \n \n \n \n H1 \n \n \n 1.26 \n \n \n 1.22 \n \n \n 3% \n \n \n \n \n \n 1.16 \n \n \n 1.17 \n \n \n -1% \n \n \n \n \n \n 178 \n \n \n 163 \n \n \n 9% \n \n \n \n \n H2 \n \n \n 1.26 \n \n \n 1.19 \n \n \n 6% \n \n \n \n \n \n 1.16 \n \n \n 1.14 \n \n \n 2% \n \n \n \n \n \n 186 \n \n \n 163 \n \n \n 14% \n \n \n \n \n FY \n \n \n 1.26 \n \n \n 1.21 \n \n \n 4% \n \n \n \n \n \n 1.16 \n \n \n 1.16 \n \n \n 0% \n \n \n \n \n \n 182 \n \n \n 163 \n \n \n 12% \n \n \n \n \n \n \n The Group takes a holistic approach to exchange rate risk, monitoring exposures on a Group-wide, net cashflow basis, seeking to maximise natural offsets wherever possible. While COGs purchases for the Group are predominantly denominated in USD, foreign exchange risk on this currency is partially offset from USD revenues earned in Americas and from distributor revenues, which are also largely USD denominated. Where a net foreign currency exposure is considered material, the Group seeks to reduce volatility from exchange movements by using derivative financial instruments. During the period, a £1.5m gain was recorded in revenues related to derivatives partially hedging the net EUR inflows. \n Retranslation of foreign currency denominated monetary assets and liabilities in the year resulted in a foreign exchange loss of £4.2m (FY23: loss £10.7m). This was predominantly due to the revaluation of receivable balances following the appreciation of GBP against EUR and USD. \n Interest \n The Group's exposure to changes in interest rates relates primarily to cash investments, borrowings, and IFRS 16 lease liabilities. Total Group interest costs for the year were £29.2m, £12.4m higher than prior year (FY23 £16.8m) primarily due to increases in bank debt related borrowing expenses of £22.3m (FY23: £12.7m). The increase compared to the prior year was driven from a higher benchmark EURIBOR rate and interest costs of the in-year drawn RCF amounts. This was partially offset by a £1.3m gain on higher interest receivables from cash investments. In addition, we incurred higher interest costs on lease liabilities of £3.8m due to new stores opened in the year. \n \n The tax charge was £23.8m (FY23: £30.5m) with an effective tax rate of 25.6% (FY23: 19.1%) which is slightly higher than the UK corporate tax rate of 25.0%, due mainly to overseas tax rates and deferred tax on temporary differences. The effective tax rate was higher than last year due to the increase in UK tax rate from 19.0% to 25.0% on 1 April 2023. \n \n Earnings per share was 7.0p (FY23: 12.9p). The total number of diluted shares is detailed in note 9 in the financial statements. The following table summarises these EPS figures: \n \n \n \n \n \n \n \n \n \n \n \n FY24 pence \n \n \n FY23 pence \n \n \n % change \n \n \n \n \n Earnings per share \n \n \n Basic \n \n \n 7.0 \n \n \n 12.9 \n \n \n -46% \n \n \n \n \n \n \n \n Diluted \n \n \n 7.0 \n \n \n 12.9 \n \n \n -46% \n \n \n \n \n \n \n \n \n EPS and diluted EPS for the current and prior year are presented as the same amount due to the minimal dilutive impact of share options on the total diluted share number. \n \n \n \n \n OPERATING CASH FLOW \n \n \n \n \n \n \n \n \n £m \n \n \n FY24 \n \n \n FY23 \n \n \n \n \n EBITDA 1 \n \n \n 197.5 \n \n \n 245.0 \n \n \n \n \n Increase in inventories \n \n \n (1.6) \n \n \n (133.2) \n \n \n \n \n Decrease/(increase) in debtors \n \n \n 23.0 \n \n \n (6.6) \n \n \n \n \n Increase in creditors \n \n \n (37.7) \n \n \n (9.2) \n \n \n \n \n Total change in net working capital \n \n \n (16.3) \n \n \n (149.0) \n \n \n \n \n Share-based payments \n \n \n 4.0 \n \n \n 0.5 \n \n \n \n \n Capital expenditure \n \n \n (28.4) \n \n \n (51.2) \n \n \n \n \n Operating cash flow 1 \n \n \n 156.8 \n \n \n 45.3 \n \n \n \n \n Operating cash flow conversion 1 \n \n \n 79% \n \n \n 18% \n \n \n \n \n \n \n \n 1. Alternative Performance Measure (APM) as defined in the Glossary on pages 66 and 67. \n \n \n \n \n Operating cash inflow was £156.8m (FY23: £45.3m) representing a cash conversion of EBITDA of 79% (FY23 18%), in line with guidance. \n Trade debtor days remained at 52 days, primarily due to customer mix with a higher proportion of Americas debtors (with debtor days at 55) than EMEA (with debtor days at 48). \n \n Capex was £28.4m (FY23: £51.2m) and represented 3.2% of revenue (FY23: 5.1%). The breakdown in capex by category is as follows: \n \n \n \n \n \n \n \n \n £m \n \n \n FY24 \n \n \n FY23 \n \n \n \n \n Retail stores \n \n \n 14.4 \n \n \n 18.9 \n \n \n \n \n Supply Chain \n \n \n 2.7 \n \n \n 19.2 \n \n \n \n \n IT/Tech \n \n \n 11.3 \n \n \n 13.1 \n \n \n \n \n \n \n \n 28.4 \n \n \n 51.2 \n \n \n \n \n \n \n \n \n Net cash flow after interest \n Net cash flow after interest costs is summarised below: \n \n \n \n \n \n \n \n \n £m \n \n \n FY24 \n \n \n FY23 \n \n \n \n \n Operating cash flow 1 \n \n \n 156.8 \n \n \n 45.3 \n \n \n \n \n Net interest paid \n \n \n (17.0) \n \n \n (5.6) \n \n \n \n \n Investment \n Payment of lease liabilities \n \n \n - \n (52.2) \n \n \n (1.0) \n (33.9) \n \n \n \n \n Taxation \n \n \n (18.8) \n \n \n (22.3) \n \n \n \n \n Repurchase of shares \n \n \n (50.5) \n \n \n - \n \n \n \n \n Derivatives settlement \n \n \n (4.0) \n \n \n 3.1 \n \n \n \n \n Dividends paid \n \n \n (57.8) \n \n \n (58.4) \n \n \n \n \n Net cash outflow \n \n \n (43.5) \n \n \n (72.8) \n \n \n \n \n Opening cash \n \n \n 157.5 \n \n \n 228.0 \n \n \n \n \n Net cash exchange translation \n \n \n (2.9) \n \n \n 2.3 \n \n \n \n \n Closing cash \n \n \n 111.1 \n \n \n 157.5 \n \n \n \n \n \n \n 1. Alternative Performance Measure (APM) as defined in the Glossary on pages 66 and 67. \n \n \n \n Net interest paid was £17.0m, higher than FY23 by £11.4m due to the timing of interest payments and higher interest rates, which were partially offset by higher interest receivables from cash investments. The increase in lease liabilities was due mainly to the increased number of retail stores opened in the period under lease arrangements and increased space across the DC network. \n \n Funding and Leverage \n The Group is funded by cash, bank debt and equity. Further details on the capital structure and debt are given in note 17 of the financial statements. The Group's bank debt is denominated in Euros which allows the excess Euros the Group generates from trading in Continental Europe to fund interest costs. The bank debt falls due for repayment in full on 2 February 2026. The Group also has a revolving credit facility of £200.0m which also matures on 2 February 2026 with £30.0m drawn down and subsequently fully repaid during the period. Included in this facility is a committed line of £3.4m used for guarantee arrangements primarily for landlord rent guarantees. \n The group financing arrangements are subject to a total net leverage covenant test every six months. The total net leverage test is calculated with a full 12 months of EBITDA and net debt being inclusive of IFRS 16 lease liabilities at the balance sheet date. At 31 March 2024 the Group had total net leverage of 1.8 times (FY23: 1.2 times). \n BALANCE SHEET \n \n \n \n \n \n £m \n \n \n 31 March \n 2024 \n \n \n 31 March \n 2023 \n \n \n \n \n Freehold property \n \n \n 7.0 \n \n \n 7.4 \n \n \n \n \n Right-of-use assets \n \n \n 173.5 \n \n \n 144.1 \n \n \n \n \n Other fixed assets \n \n \n 81.7 \n \n \n 78.8 \n \n \n \n \n Inventory \n \n \n 254.6 \n \n \n 257.8 \n \n \n \n \n Debtors \n \n \n 70.4 \n \n \n 92.2 \n \n \n \n \n Creditors 2 \n \n \n (100.7) \n \n \n (133.7) \n \n \n \n \n Working capital \n \n \n 224.3 \n \n \n 216.3 \n \n \n \n \n Other 1 \n \n \n (1.5) \n \n \n 5.2 \n \n \n \n \n Operating net assets \n \n \n 485.0 \n \n \n 451.8 \n \n \n \n \n Goodwill \n \n \n 240.7 \n \n \n 240.7 \n \n \n \n \n Cash \n \n \n 111.1 \n \n \n 157.5 \n \n \n \n \n Bank debt \n \n \n (288.6) \n \n \n (296.8) \n \n \n \n \n Unamortised bank fees \n \n \n 2.3 \n \n \n 3.4 \n \n \n \n \n Lease liabilities \n \n \n (182.3) \n \n \n (152.4) \n \n \n \n \n Net assets \n \n \n 368.2 \n \n \n 404.2 \n \n \n \n \n \n \n 1. Other includes investments, deferred tax assets, income tax assets, and provisions. \n 2. Includes bank interest of £8.4m (FY23: £6.0m). \n \n \n \n Net Debt 1 is summarised below: \n \n \n \n \n \n £m \n \n \n 31 March \n 2024 \n \n \n 31 March \n 2023 \n \n \n \n \n Bank loans \n \n \n (286.3) \n \n \n (293.4) \n \n \n \n \n Cash \n \n \n 111.1 \n \n \n 157.5 \n \n \n \n \n Net bank loans \n \n \n (175.2) \n \n \n (135.9) \n \n \n \n \n Lease liabilities \n \n \n (182.3) \n \n \n (152.4) \n \n \n \n \n Net Debt 1 \n \n \n (357.5) \n \n \n (288.3) \n \n \n \n \n \n \n 1. Alternative Performance Measure (APM) as defined in the Glossary on pages 66 and 67. \n \n \n \n Inventory \n Given the high proportion of continuity products we sell, with four out of five pairs being black and having a strong product margin structure, we have minimal markdown risk below cost. Inventory levels are currently at elevated levels in our Americas business. As a result we have reduced purchases for the year ahead and are targeting a reduction in inventory in FY25. \n \n \n \n \n \n \n \n \n \n \n \n 31 March \n 2024 \n \n \n 31 March \n 2023 \n \n \n \n \n Inventory (£m) \n \n \n 254.6 \n \n \n 257.8 \n \n \n \n \n Turn (x) 1 \n \n \n 1.2x \n \n \n 1.5x \n \n \n \n \n Weeks cover 2 \n \n \n 44 \n \n \n 35 \n \n \n \n \n \n \n 1. Calculated as historic LTM COGS divided by inventory. \n 2. Calculated as 52 weeks divided by stock turn. \n \n \n Equity of £368.2m can be analysed as follows: \n \n \n \n \n \n \n \n \n £m \n \n \n 31 March 2024 \n \n \n \n \n Share capital \n \n \n 9.6 \n \n \n \n \n Hedging reserve \n \n \n 0.9 \n \n \n \n \n Capital redemption reserve \n \n \n 0.4 \n \n \n \n \n Merger reserve \n \n \n (1,400.0) \n \n \n \n \n Non-UK translation reserve \n \n \n 9.7 \n \n \n \n \n Retained earnings \n \n \n 1,747.6 \n \n \n \n \n Equity \n \n \n 368.2 \n \n \n \n \n \n \n \n \n \n \n \n \n \n RETURNS TO SHAREHOLDERS \n Our capital allocation philosophy guides our view of returns to shareholders and usage of excess cash. The first priority for investment is into the business and we will continue to invest in a targeted manner to support long-term growth and resilience of the Group. This is mainly represented by investment into marketing, logistics, people, systems and inventory. Beyond this, our priority is to return excess cash to shareholders, through a regular dividend and, when possible, further returns. \n \n Dividends \n The Board has proposed, subject to shareholder approval, a final dividend of 0.99p, taking the total dividend for FY24, including the interim dividend of 1.56p, to 2.55p, a 35% payout ratio. Whilst this is a year-on-year reduction given the higher payout in FY23 and lower earnings achieved this year, the 35% payout for FY24 is at the top of the policy range. The Board's intention is to hold the FY25 dividend flat in absolute terms, before returning to an earnings payout in line with our dividend policy (of 25% to 35% payout) in FY26 onwards. \n \n Going forwards, the Board is also adopting a consistent approach to setting the interim dividend, with this dividend set at one-third of the previous year's total dividend. We are also adjusting the payment dates for the dividends, to better reflect the trading cash profile of the Group, and therefore the final dividend will be paid in early October. The final dividend for FY24 will be paid to shareholders on the register as at 30 August 2024 with payment on 1 October 2024. \n \n \n \n \n \n \n \n \n £m \n \n \n \n \n \n FY24 \n \n \n FY23 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Earnings \n \n \n \n \n \n 69.2 \n \n \n 128.9 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Interim dividend (declared and paid): 1.56p (FY23: 1.56p) \n \n \n \n \n \n 15.0 \n \n \n 15.6 \n \n \n \n \n Final dividend (proposed): 0.99p (FY23: 4.28p) \n \n \n \n \n \n 9.5 \n \n \n 42.8 \n \n \n \n \n Total dividend (paid and proposed): 2.55p (FY23: 5.84p) \n \n \n \n \n \n 24.5 \n \n \n 58.4 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Payout ratio % \n \n \n \n \n \n 35% \n \n \n 45% \n \n \n \n \n \n \n \n \n Share Buyback \n During the year to 31 March 2024 the Group repurchased 39.9m shares. The cash outflow was £50.5m (including transaction costs of £0.5m) pursuant to the share buyback scheme that was announced on 14 July 2023 and concluded on 19 December 2023. For further details please refer to notes 23 and 24 of the Consolidated Financial Statements. \n \n FY25 guidance \n Our key targets for FY25 are: \n - Positive USA DTC growth in the second half \n - Inventory declining by c.£40m \n - Net debt declining to £310m to £330m (including lease liabilities) \n Alongside this, our guidance for FY25 is: \n - USA wholesale revenue declining double-digit percentage in FY25 \n - New own store openings of 25 to 30 \n - Depreciation and Amortisation of £75m to £80m \n - Net finance costs of £27m to £30m \n - Blended tax rate of c.27% \n - Capex of around £40m \n For the first half , we expect a Group revenue decline of around 20%, driven by wholesale revenues down around a third. Combined with the cost headwinds which impact both halves, the impact of operational deleverage is significantly more pronounced in the first half. Overall results this year will therefore be very second-half weighted, particularly from a profit perspective. \n \n \n \n Consolidated Statement of Profit or Loss \nFor the year ended 31 March 2024 \n \n \n \n \n \n \n \n \n Note \n \n \n FY24 \n £m \n \n \n FY23 \n £m \n \n \n \n \n Revenue \n \n \n 3 \n \n \n 877.1 \n \n \n 1,000.3 \n \n \n \n \n Cost of sales \n \n \n \n \n \n (301.9) \n \n \n (382.2) \n \n \n \n \n Gross profit \n \n \n \n \n \n 575.2 \n \n \n 618.1 \n \n \n \n \n Selling and administrative expenses \n \n \n 4 \n \n \n (453.0) \n \n \n (441.9) \n \n \n \n \n Finance income \n \n \n \n \n \n 3.0 \n \n \n 1.9 \n \n \n \n \n Finance expense \n \n \n 7 \n \n \n (32.2) \n \n \n (18.7) \n \n \n \n \n Profit before tax \n \n \n \n \n \n 93.0 \n \n \n 159.4 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n EBITDA 1 \n \n \n 3 \n \n \n 197.5 \n \n \n 245.0 \n \n \n \n \n Depreciation and amortisation \n \n \n 4 \n \n \n (72.3) \n \n \n (54.2) \n \n \n \n \n Impairment \n \n \n 4 \n \n \n - \n \n \n (3.9) \n \n \n \n \n Foreign exchange losses \n \n \n \n \n \n (4.2) \n \n \n (10.7) \n \n \n \n \n Other gains \n \n \n \n \n \n 1.2 \n \n \n - \n \n \n \n \n Net finance expense \n \n \n \n \n \n (29.2) \n \n \n (16.8) \n \n \n \n \n Profit before tax \n \n \n \n \n \n 93.0 \n \n \n 159.4 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Tax expense \n \n \n 8 \n \n \n (23.8) \n \n \n (30.5) \n \n \n \n \n Profit for the year \n \n \n \n \n \n 69.2 \n \n \n 128.9 \n \n \n \n \n \n \n \n \n \n \n \n \n Note \n \n \n FY24 \n \n \n FY23 \n \n \n \n \n Earnings per share \n \n \n \n \n \n \n \n \n \n \n \n \n \n Basic \n \n \n 9 \n \n \n 7.0p \n \n \n 12.9p \n \n \n \n \n Diluted \n \n \n 9 \n \n \n 7.0p \n \n \n 12.9p \n \n \n \n \n 1. Alternative Performance Measure (APM) as defined in the Glossary on pages 66 and 67. \n \n \n The results for the years presented above are derived from continuing operations and are entirely attributable to the owners of the Parent Company. \n \n The notes on pages 18 to 54 form part of these Consolidated Financial Statements. \n \n \n \n Consolidated Statement of Comprehensive Income \nFor the year ended 31 March 2024 \n \n \n \n \n \n \n \n \n Note \n \n \n FY24 \n £m \n \n \n FY23 \n £m \n \n \n \n \n Profit for the year \n \n \n \n \n \n 69.2 \n \n \n 128.9 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Other comprehensive (expense)/income \n \n \n \n \n \n \n \n \n \n \n \n \n \n Items that may subsequently be reclassified to profit or loss \n \n \n \n \n \n \n \n \n \n \n \n \n \n Foreign currency translation differences \n \n \n \n \n \n (2.8) \n \n \n 5.5 \n \n \n \n \n Cash flow hedges: Fair value movements in equity \n \n \n \n \n \n (1.8) \n \n \n 1.9 \n \n \n \n \n Cash flow hedges: Reclassified and reported in profit or loss \n \n \n 19 \n \n \n 3.9 \n \n \n (2.5) \n \n \n \n \n Tax in relation to share schemes \n \n \n 8 \n \n \n 0.5 \n \n \n - \n \n \n \n \n Tax in relation to cash flow hedges \n \n \n 8 \n \n \n (0.7) \n \n \n 0.2 \n \n \n \n \n \n \n \n \n \n \n (0.9) \n \n \n 5.1 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Total comprehensive income for the year \n \n \n \n \n \n 68.3 \n \n \n 134.0 \n \n \n \n \n \n \n The notes on pages 18 to 54 form part of these Consolidated Financial Statements. \n \n \n \n \n \n Consolidated Balance Sheet \nAs at 31 March 2024 \n \n \n \n \n \n \n \n Note(s) \n \n \n FY24 \n £m \n \n \n FY23 \n £m \n \n \n \n \n ASSETS \n \n \n \n \n \n \n \n \n \n \n \n \n \n Non-current assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n Intangible assets \n \n \n 11 \n \n \n 270.0 \n \n \n 265.6 \n \n \n \n \n Property, plant and equipment \n \n \n 12 \n \n \n 59.4 \n \n \n 61.3 \n \n \n \n \n Right-of-use assets \n \n \n 12 \n \n \n 173.5 \n \n \n 144.1 \n \n \n \n \n Investments \n \n \n 20 \n \n \n 1.0 \n \n \n 1.0 \n \n \n \n \n Derivative financial assets \n \n \n 19 \n \n \n 0.1 \n \n \n - \n \n \n \n \n Deferred tax assets \n \n \n 22 \n \n \n 11.2 \n \n \n 11.8 \n \n \n \n \n \n \n \n \n \n \n 515.2 \n \n \n 483.8 \n \n \n \n \n Current assets \n \n \n \n \n \n \n \n \n \n \n \n \n \n Inventories \n \n \n 13 \n \n \n 254.6 \n \n \n 257.8 \n \n \n \n \n Trade and other receivables \n \n \n 14 \n \n \n 68.8 \n \n \n 93.0 \n \n \n \n \n Income tax assets \n \n \n \n \n \n 1.2 \n \n \n - \n \n \n \n \n Derivative financial assets \n \n \n 19 \n \n \n 1.5 \n \n \n 0.5 \n \n \n \n \n Cash and cash equivalents \n \n \n 15 \n \n \n 111.1 \n \n \n 157.5 \n \n \n \n \n \n \n \n \n \n \n 437.2 \n \n \n 508.8 \n \n \n \n \n Total assets \n \n \n \n \n \n 952.4 \n \n \n 992.6 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n LIABILITIES \n \n \n \n \n \n \n \n \n \n \n \n \n \n Current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Trade and other payables \n \n \n 16 \n \n \n (92.2) \n \n \n (127.7) \n \n \n \n \n Borrowings \n \n \n 17 \n \n \n (8.4) \n \n \n (6.0) \n \n \n \n \n Lease liabilities \n \n \n 17, 28 \n \n \n (47.0) \n \n \n (28.1) \n \n \n \n \n Derivative financial liabilities \n \n \n 19 \n \n \n (0.1) \n \n \n (1.3) \n \n \n \n \n Income tax payable \n \n \n \n \n \n (5.8) \n \n \n (1.4) \n \n \n \n \n \n \n \n \n \n \n (153.5) \n \n \n (164.5) \n \n \n \n \n Non-current liabilities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Borrowings \n \n \n 17 \n \n \n (286.3) \n \n \n (293.4) \n \n \n \n \n Lease liabilities \n \n \n 17, 28 \n \n \n (135.3) \n \n \n (124.3) \n \n \n \n \n Provisions \n \n \n 18 \n \n \n (6.3) \n \n \n (4.4) \n \n \n \n \n Deferred tax liabilities \n \n \n 22 \n \n \n (2.8) \n \n \n (1.8) \n \n \n \n \n \n \n \n \n \n \n (430.7) \n \n \n (423.9) \n \n \n \n \n Total liabilities \n \n \n \n \n \n (584.2) \n \n \n (588.4) \n \n \n \n \n Net assets \n \n \n \n \n \n 368.2 \n \n \n 404.2 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n EQUITY \n \n \n \n \n \n \n \n \n \n \n \n \n \n Equity attributable to the owners of the Parent \n \n \n \n \n \n \n \n \n \n \n \n \n \n Ordinary share capital \n \n \n 23 \n \n \n 9.6 \n \n \n 10.0 \n \n \n \n \n Treasury shares \n \n \n 24 \n \n \n - \n \n \n - \n \n \n \n \n Hedging reserve \n \n \n 25 \n \n \n 0.9 \n \n \n (0.5) \n \n \n \n \n Capital redemption reserve \n \n \n 25 \n \n \n 0.4 \n \n \n - \n \n \n \n \n Merger reserve \n \n \n 25 \n \n \n (1,400.0) \n \n \n (1,400.0) \n \n \n \n \n Foreign currency translation reserve \n \n \n 25 \n \n \n 9.7 \n \n \n 12.5 \n \n \n \n \n Retained earnings \n \n \n 25 \n \n \n 1,747.6 \n \n \n 1,782.2 \n \n \n \n \n Total equity \n \n \n \n \n \n 368.2 \n \n \n 404.2 \n \n \n \n \n \n The notes on pages 18 to 54 form part of these Consolidated Financial Statements. \n \n The Consolidated Financial Statements on pages 13 to 54 were approved and authorised by the Board of Directors on 29 May 2024 and signed on its behalf by: \n \n \n Kenny Wilson Giles Wilson \nChief Executive Officer Chief Financial Officer \n \n Consolidated Statement of Changes in Equity \nFor the year ended 31 March 2024 \n \n \n \n \n \n \n \n \n \n \n Ordinary share capital \n \n \n Treasury shares \n \n \n Hedging reserve \n \n \n \n Capital redemption reserve \n \n \n Merger reserve \n \n \n Foreign translation reserve \n \n \n Retained earnings \n \n \n Total equity \n \n \n \n \n \n \n \n Note(s) \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n £m \n \n \n \n \n At 1 April 2022 \n \n \n \n \n \n 10.0 \n \n \n - \n \n \n (0.1) \n \n \n - \n \n \n (1,400.0) \n \n \n 7.0 \n \n \n 1,711.3 \n \n \n 328.2 \n \n \n \n \n Profit for the year \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 128.9 \n \n \n 128.9 \n \n \n \n \n Other comprehensive (expense)/income \n \n \n \n \n \n - \n \n \n - \n \n \n (0.4) \n \n \n - \n \n \n - \n \n \n 5.5 \n \n \n - \n \n \n 5.1 \n \n \n \n \n Total comprehensive (expense)/income for the year \n \n \n \n \n \n - \n \n \n - \n \n \n (0.4) \n \n \n - \n \n \n - \n \n \n 5.5 \n \n \n 128.9 \n \n \n 134.0 \n \n \n \n \n Dividends paid \n \n \n 10 \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (58.4) \n \n \n (58.4) \n \n \n \n \n Share-based payments \n \n \n 26 \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 0.4 \n \n \n 0.4 \n \n \n \n \n At 31 March 2023 \n \n \n \n \n \n 10.0 \n \n \n - \n \n \n (0.5) \n \n \n - \n \n \n (1,400.0) \n \n \n 12.5 \n \n \n 1,782.2 \n \n \n 404.2 \n \n \n \n \n Profit for the year \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 69.2 \n \n \n 69.2 \n \n \n \n \n Other comprehensive income/(expense) \n \n \n \n \n \n - \n \n \n - \n \n \n 1.4 \n \n \n - \n \n \n - \n \n \n (2.8) \n \n \n 0.5 \n \n \n (0.9) \n \n \n \n \n Total comprehensive income/(expense) for the year \n \n \n \n \n \n - \n \n \n - \n \n \n 1.4 \n \n \n - \n \n \n - \n \n \n (2.8) \n \n \n 69.7 \n \n \n 68.3 \n \n \n \n \n Dividends paid \n \n \n 10 \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (57.8) \n \n \n (57.8) \n \n \n \n \n Shares issued \n \n \n 23 \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n Share-based payments \n \n \n 26 \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 4.0 \n \n \n 4.0 \n \n \n \n \n Repurchase of ordinary share capital \n \n \n 23, 24 \n \n \n - \n \n \n (50.0) \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (0.5) \n \n \n (50.5) \n \n \n \n \n Cancellation of repurchased ordinary share capital \n \n \n 23, 24 \n \n \n (0.4) \n \n \n 50.0 \n \n \n - \n \n \n 0.4 \n \n \n - \n \n \n - \n \n \n (50.0) \n \n \n - \n \n \n \n \n At 31 March 2024 \n \n \n \n \n \n 9.6 \n \n \n - \n \n \n 0.9 \n \n \n 0.4 \n \n \n (1,400.0) \n \n \n 9.7 \n \n \n 1,747.6 \n \n \n 368.2 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n The notes on pages 18 to 54 form part of these Consolidated Financial Statements. \n \n \n \n \n Consolidated Statement of Cash flows \nFor the year ended 31 March 2024 \n \n \n \n \n \n \n \n Note \n \n \n \n FY24 \n £m \n \n \n FY23 \n £m \n \n \n \n \n Profit after taxation \n \n \n \n \n \n 69.2 \n \n \n 128.9 \n \n \n \n \n Add back: income tax expense \n \n \n 8 \n \n \n 23.8 \n \n \n 30.5 \n \n \n \n \n finance income \n \n \n \n \n \n (3.0) \n \n \n (1.9) \n \n \n \n \n finance expense \n \n \n 7 \n \n \n 32.2 \n \n \n 18.7 \n \n \n \n \n depreciation, amortisation and impairment \n \n \n \n \n \n 72.3 \n \n \n 58.1 \n \n \n \n \n other gains \n \n \n \n \n \n (1.2) \n \n \n - \n \n \n \n \n foreign exchange losses \n \n \n \n \n \n 4.2 \n \n \n 10.7 \n \n \n \n \n share-based payments charge \n \n \n 26 \n \n \n 4.0 \n \n \n 0.5 \n \n \n \n \n Increase in inventories \n \n \n \n \n \n (1.6) \n \n \n (133.2) \n \n \n \n \n Decrease/(increase) in trade and other receivables \n \n \n \n \n \n 23.0 \n \n \n (6.6) \n \n \n \n \n Decrease in trade and other payables \n \n \n \n \n \n (37.7) \n \n \n (9.2) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Change in net working capital \n \n \n \n \n \n (16.3) \n \n \n (149.0) \n \n \n \n \n Cash flows from operating activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash generated from operations \n \n \n \n \n \n 185.2 \n \n \n 96.5 \n \n \n \n \n Taxation paid \n \n \n \n \n \n (18.8) \n \n \n (22.3) \n \n \n \n \n Settlement of matured derivatives \n \n \n \n \n \n 1.5 \n \n \n (1.5) \n \n \n \n \n Net cash inflow from operating activities \n \n \n \n \n \n 167.9 \n \n \n 72.7 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash flows from investing activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Additions to intangible assets \n \n \n 11 \n \n \n (10.2) \n \n \n (11.8) \n \n \n \n \n Additions to property, plant and equipment \n \n \n 12 \n \n \n (18.2) \n \n \n (39.6) \n \n \n \n \n Finance income received \n \n \n \n \n \n 2.9 \n \n \n 1.6 \n \n \n \n \n Capital contributions received for right-of-use assets \n \n \n \n \n \n - \n \n \n 0.2 \n \n \n \n \n Purchase of equity investment \n \n \n 20 \n \n \n - \n \n \n (1.0) \n \n \n \n \n Net cash outflow from investing activities \n \n \n \n \n \n (25.5) \n \n \n (50.6) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash flows from financing activities \n \n \n \n \n \n \n \n \n \n \n \n \n \n Finance expense paid \n \n \n \n \n \n (19.9) \n \n \n (7.2) \n \n \n \n \n Payment of lease interest \n \n \n 28 \n \n \n (8.6) \n \n \n (4.8) \n \n \n \n \n Payment of lease liabilities \n Repurchase of shares \n \n \n 28 \n 23 \n \n \n (43.6) \n (50.5) \n \n \n (29.1) \n - \n \n \n \n \n Revolving credit facility drawdown \n \n \n 17 \n \n \n 30.0 \n \n \n - \n \n \n \n \n Revolving credit facility repayment \n \n \n 17 \n \n \n (30.0) \n \n \n - \n \n \n \n \n Settlement of matured derivatives \n \n \n \n \n \n (5.5) \n \n \n 4.6 \n \n \n \n \n Dividends paid \n \n \n 10 \n \n \n (57.8) \n \n \n (58.4) \n \n \n \n \n Net cash outflow from financing activities \n \n \n \n \n \n (185.9) \n \n \n (94.9) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Net decrease in cash and cash equivalents \n \n \n \n \n \n (43.5) \n \n \n (72.8) \n \n \n \n \n Cash and cash equivalents at beginning of year \n \n \n \n \n \n 157.5 \n \n \n 228.0 \n \n \n \n \n Effect of foreign exchange on cash held \n \n \n \n \n \n (2.9) \n \n \n 2.3 \n \n \n \n \n Cash and cash equivalents at end of year \n \n \n 15 \n \n \n 111.1 \n \n \n 157.5 \n \n \n \n \n \n The notes on pages 18 to 54 form part of these Consolidated Financial Statements. \n \n \n \n \n \n Notes to the Consolidated Financial Statements \n For the year ended 31 March 2024 \n \n 1. General information \n Dr. Martens plc (the 'Company') is a public company limited by shares incorporated in the United Kingdom, and registered and domiciled in England and Wales, whose shares are traded on the London Stock Exchange. The Company's registered office is: 28 Jamestown Road, Camden, London NW1 7BY. The principal activity of the Company and its subsidiaries (together referred to as the 'Group') is the design, development, procurement, marketing, selling and distribution of footwear, under the Dr. Martens brand. \n \n 2. Accounting policies \n The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been consistently applied to the periods presented, unless otherwise stated. Amounts are presented in GBP and to the nearest million pounds (to one decimal place) unless otherwise noted. The reporting period is defined as the year ended 31 March 2024 and year ended 31 March 2023 for the comparative period. \n \n 2.1 Basis of preparation \n The Consolidated Financial Statements of the Group have been prepared in accordance with UK-adopted International Accounting Standards in conformity with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. The Group's Consolidated Financial Statements have been prepared on a going concern basis under the historical cost convention, except for equity investments, derivative financial instruments, money market funds, share-based payments and pension scheme assets that have been measured at fair value. \n \n Certain amounts in the Statement of Profit or Loss and the Balance Sheet have been grouped together for clarity, with their breakdown being shown in the notes to the financial statements. The distinction presented in the Balance Sheet between current and non-current entries has been made on the basis of whether the assets and liabilities fall due within more than one year. \n \n Consideration of climate risk matters \n The Group continues to assess the impact of climate risk matters on many aspects of the business, including climate related scenario analysis as required by the Task Force on Climate-Related Disclosures. Building on this scenario analysis, consideration has been given to the impact of climate related risk on management judgements and estimates, and compliance with existing accounting requirements. The incurred costs and investments associated with our sustainability strategy are reflected in the Group's Financial Statements. The impact of climate related risk matters is not expected to be material to the 31 March 2024 Consolidated Financial Statements, the Group going concern assessments to 30 September 2025, or the viability of the Group over the next three years. \n \n Financial calendar \n During the year, the Group amended the basis of preparation of the Consolidated Financial Statements to align with the operational trading of the business; by moving from a calendar year to a retail calendar basis. The retail calendar will report a 52-week year, split into monthly 5-4-4 Monday to Sunday week formats. A 53-week year will be reported around every six years to avoid the retail calendar deviating by more than seven days to the calendar year and accounting reference date of 31 March. As 31 March 2024 falls on a Sunday, the FY25 period will begin on a Monday and conform to a retail calendar thereafter. \n \n Going concern \n The financial statements have been prepared on the going concern basis. The going concern assessment covers at least the 12-month period from the date of the signing of the financial statements, and the going concern basis is dependent on the Group maintaining adequate levels of resources to operate during the period. To support this assessment, detailed trading and cash flow forecasts, including forecast liquidity and covenant compliance, were prepared for the 16-month period to 30 September 2025. The Directors' assessment used the same assumptions and methods as the viability assessment on pages 44 and 45 of the Annual Report. \n \n The key stages of the assessment process are summarised as follows: \n · The Group planning process forms the basis of the Going Concern review, starting from the DOCS strategy and producing outputs for long, medium and short term financial plans, based on key assumptions which are agreed with the GLT and Board. \n · The trading outlook over the long, medium and short term is evaluated, contextualising our assessments within the broader macroeconomic environment. \n · Micro and macro central planning assumptions are identified and incorporated into the assessments. \n · The Directors of the Group have considered the future position based on current trading and a number of potential downside scenarios which may occur, including the impact of appropriate principal risks crystallising. \n · Further details on the potential downside scenarios relevant to the going concern assessment period have been included below. \n \n The Directors also considered the Group's funding arrangements at 31 March 2024 with cash of £111.1m, available undrawn facilities of £194.5m and bullet debt repayment of £288.6m not due until 2 February 2026. \n \n Consistent with the Viability Statement on pages 44 and 45 of the Annual Report, management have modelled, and the Directors have reviewed 'top-down' sensitivity and stress testing, including a review of the cash flow projections and covenant compliance under a severe but plausible scenario in relation to two main risks and specific 'black swan' events assessed which are detailed below: \n · the impact of a factory closure in one key production geographic area due to climate change (flooding). \n · weaker consumer sentiment and lower demand. \n \n 'Top-down' sensitivity and stress testing included a review of the cash flow projections and covenant compliance under a severe but plausible scenario in relation to the downside scenarios described above. In the unlikely event of the above two scenarios occurring together, the Group can withstand material revenue decline and by applying available mitigations, headroom above covenant requirements remain in line with expectation and the Group continues to have satisfactory liquidity and covenant headroom throughout the period under review. Experience over three years of FY22, FY23 and FY24 have indicated minimal wholesale bad debt risk and minimal margin risk with the principal risk to meeting covenant compliance being lower revenue. \n \n \n Notes to the Consolidated Financial Statements (continued) \n For the year ended 31 March 2024 \n \n 2. Accounting policies (continued) \n 2.1 Basis of preparation (continued) \n Going concern (continued) \n In modelling our severe but plausible downside we have incorporated the impact of a double digit decrease in revenue from the base plan in the short term, with the base plan already representing a single digit decline versus FY24. Under this scenario, certain mitigations are available or are intrinsically linked to the forecast, including some cost and cash savings that materialise immediately if the Group's performance is below budget and other planned and standard cost reductions. \n \n A more extreme downside scenario is not considered plausible. \n \n A reverse stress test has also been modelled to determine what could break covenant compliance estimates and liquidity before mitigating actions. To model these reverse stress tests the impact on revenue of zero covenant headroom and zero liquidity was calculated at the end of the going concern period. Under the covenant breach test it is concluded that the business could weather extreme growth reductions without mitigation versus the base plan, with the base plan already representing a single digit decline versus FY24. The business would have to experience -11%pts to revenue growth in the going concern period before covenants are breached. Similarly, the business would have to experience -51%pts revenue growth reduction in the going concern period before zero cash headroom is reached. The Directors have assessed the likelihood of occurrence to be remote. \n \n We have also assessed the qualitative and quantitative impact of climate-related risks, as noted in our TCFD scenario analysis in the Annual Report and above, on asset recoverable amounts and concluded that there would not be a material impact on the business and cash flows in the going concern period. \n \n We will continue to monitor the impact of the macroeconomic backdrop and geopolitical events on the Group in the countries where we operate, and we plan to maintain flexibility to react as appropriate. \n \n 2.2 Basis of consolidation \n The Consolidated Financial Statements comprise the financial statements of the Company and its subsidiaries as at 31 March 2024 and 31 March 2023. Control is achieved when the Group has rights to variable returns from its involvement with the investee and the ability to use its power over the investee to affect the amount of the investor's returns. Specifically, the Group controls an investee if, and only if, the Group has: \n · power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee); \n · exposure, or rights, to variable returns from its involvement with the investee; and \n · the ability to use its power over the investee to affect its returns. \n \n Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including: \n · the contractual arrangement(s) with the other vote holders of the investee; \n · rights arising from other contractual arrangements; and \n · the Group's voting rights and potential voting rights. \n \n The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the Consolidated Financial Statements from the date the Group gains control until the date the Group ceases to control the subsidiary. \n \n Profit or loss and each component of other comprehensive income are attributed to the equity holders of the parent of the Group. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group's accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. \n \n A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. \n \n If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value. \n \n 2.3 Adoption of new and revised standards \n A number of new or amended standards became applicable for the current reporting period. These standards, amendments or interpretations are not expected to have a material impact on the Group in the current or future reporting periods: \n · Amendments to IAS 1 - Classification of liabilities as current, and disclosure of accounting policies \n · Amendments to IAS 8 - Definition of accounting estimates \n · Amendments to IAS 12 - Deferred tax related to assets and liabilities arising from a single transaction \n · Amendments to IAS 12 - Pillar Two model rules \n · Implementation of IFRS 17 - Insurance contracts \n \n New standards and interpretations not yet applied \n The following new or amended IFRS accounting standards, amendments and interpretations are not yet adopted and it is expected that where applicable, these standards and amendments will be adopted on each respective effective date: \n · Amendments to IAS 1 - Presentation of financial statements: non-current liabilities with covenants \n · Amendments to IFRS 16 - Leases on sale and leaseback \n · Amendments to IAS 7 and IFRS 7 - Supplier finance arrangements \n \n These standards, amendments or interpretations are not expected to have a material impact on the Group in the current or future reporting periods. \n \n Notes to the Consolidated Financial Statements (continued) \n For the year ended 31 March 2024 \n \n 2. Accounting policies (continued) \n 2.4 Alternative Performance Measures (APMs) \n Management exercises judgement in determining the adjustments to apply to IFRS measurements in order to derive suitable APMs. As set out on pages 66 to 67 of the Glossary, APMs are used as management believes these measures provide additional useful information on the underlying trends, performance and position of the Group. These measures are used for performance analysis. The APMs are not defined by IFRS and therefore may not be directly comparable with other companies' APMs. These measures are not intended to be a substitute for, or superior to, IFRS measurements. \n \n 2.5 Foreign currency translation \n The Consolidated Financial Statements are presented in GBP, which is the Group's presentational currency. The Group includes foreign entities whose functional currencies are not GBP. On consolidation, the assets and liabilities of the Group entities that have a functional currency different from the presentation currency are translated into GBP at the closing rate at the date of that Balance Sheet. Income and expenses for each Statement of Profit or Loss are translated at average foreign exchange rates for the period. Foreign exchange differences are recognised in other comprehensive income. The functional currency of each company in the Group is that of the primary economic environment in which the entity operates. \n \n 2.6 Revenue \n The Group's revenue arises from the sale of goods to customers. Contracts with customers generally have one performance obligation. The Group has concluded that the revenue from the sale of goods should be recognised at a point in time when control of the goods is transferred to the customer, which is dependent on the revenue channel. Revenue is recognised at the invoiced price less any associated discounts and sales taxes. \n \n The Group assessed its revenue channels against the IFRS 15 five-step model, identifying the contracts, the performance obligations and the transaction price, and then allocating this to determine the timing of revenue recognition. The revenue channels that have been separately assessed are as follows: \n · ecommerce revenue, including delivery charge income; \n · retail revenue; and \n · wholesale revenue. \n \n Control is passed to the customer on the following basis under each of the revenue channels as follows: \n · ecommerce channel: upon receipt of the goods by the customer; \n · retail channel: upon completion of the transaction; and \n · wholesale channel: upon delivery of the goods or upon dispatch to the customer if the customer takes responsibility for delivery. \n \n The payment terms across each of these revenue channels varies. The payments for retail are received at the transfer of control. Ecommerce payments are mainly received in advance of transfer of control by less than one week as there is a timing difference between receipt of cash on order and receipt of goods by the customer. Wholesale customers pay on terms generally between 30 and 60 days. \n \n Some contracts for the sale of goods provide customers with a right of return and rebates. Under IFRS 15, this gives rise to variable consideration, which is constrained such that it is highly probable that significant reversal will not occur. \n \n Rights of return \n When a contract provides a customer with a right of...