Preliminary results - 52 weeks ended 1 May 2022

About this update from Theworks.co.uk Plc

[{"type":"text","content":"\n \n \n \n 23 September 2022 \n \n \n \n \n   \n \n \n \n \n TheWorks.co.uk plc  \n \n \n \n (\"The Works\", the \"Company\" or the \"Group\") \n \n \n \n Preliminary results for the 52 weeks ended 1 May 2022 \n \n \n \n \n The Works delivered a strong financial performance in FY22 and made good strategic progress. There is confidence in the Group's prospects despite the more challenging trading conditions expected in the near term. \n \n \n \n The Works, the multi-channel value retailer of arts and crafts, stationery, toys, and books announces its preliminary results for the 52 weeks ended 1 May 2022 (the \"Period\" or \"FY22\") and an update on current trading. \n \n \n \n Financial highlights \n \n \n \n · \n Strong underlying sales driven by solid progress against the Group's strategic objectives, careful management of supply chain, and increased consumer demand post COVID-19. \n \n \n o  \n Total revenue £264.6m, up 46.5% compared with FY21. \n \n \n o  \n Two-year LFL sales (1) up 10.5%, with positive growth online and in stores. \n \n \n o  \n Two-year total gross sales up 12.7% (1)(2) . \n \n \n · \n The sales performance and the improvements made throughout the year to operations and proposition, helped to offset the impact of external headwinds, (3) resulting in an increased profit. \n \n \n o  \n Pre IFRS 16 Adjusted EBITDA increased to £16.6m (FY21: £4.3m). \n \n \n o  \n Profit before tax of £10.2m compared with a loss of £2.8m in FY21. \n \n \n · \n Further strengthened the balance sheet, ending the period with net cash of £16.3m excluding lease liabilities (FY21: net cash £0.8m). Bank facilities successfully refinanced post year end (4) . \n \n \n · \n Reflecting the strong performance and its confidence in the Group's prospects, the Board proposes a final dividend of 2.4 pence per share in respect of FY22. \n \n \n · \n Trading since the Group's update on 8 August 2022 has remained resilient however the outlook for FY23 is unchanged, reflecting the Board's desire to remain cautious in light of the uncertain economic conditions. \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n FY22 \n \n \n \n \n £m \n \n \n \n \n \n \n FY21 \n \n \n \n \n £m \n \n \n \n \n \n \n \n Revenue \n \n \n \n \n 264.6 \n \n \n \n \n 180.7 \n \n \n \n \n \n \n Revenue growth/(decline) \n \n \n \n \n 46.5% \n \n \n \n \n (19.7%) \n \n \n \n \n \n \n Pre-IFRS16 Adjusted (5) EBITDA \n \n \n \n \n 16.6 \n \n \n \n \n 4.3 \n \n \n \n \n \n \n PBT \n \n \n \n \n 10.2 \n \n \n \n \n (2.8) \n \n \n \n \n \n \n Adjusted (5) PBT \n \n \n \n \n 10.1 \n \n \n \n \n (3.6) \n \n \n \n \n \n \n Basic EPS (pence) \n \n \n \n \n 14.0 \n \n \n \n \n (3.7) \n \n \n \n \n \n \n Adjusted (5) basic EPS (pence) \n \n \n \n \n 13.9 \n \n \n \n \n (4.9) \n \n \n \n \n \n \n Net bank cash \n \n \n \n \n 16.3 \n \n \n \n \n 0.8 \n \n \n \n \n \n \n \n Business highlights \n \n \n \n We continued to make progress on our strategy of being \"better, not just bigger\" , including: \n \n \n \n \n \n \n · \n \n \n \n \n Defined the Group's new purpose and brand positioning, inspiring reading, learning, creativity and play - making lives more fulfilled . This provides a common goal to show everybody at The Works that they have a role to play in delivering our \" better, not just bigger strategy \". \n \n \n \n \n \n \n · \n \n \n \n \n Created a more appealing, more customer-focused product proposition, aligned to our purpose. This included overhauling our book strategy to stock more front-list titles, capitalising on the 'BookTok' trend and increasing ranges of popular branded products in our kids and board games ranges. \n \n \n \n \n \n \n · \n \n \n \n \n Catered for increasingly 'time poor' customers, who seek greater product availability and faster delivery times, by improving our online fulfilment capacity and delivery options.  \n \n \n \n \n \n \n · \n \n \n \n \n Improved the quality of the store estate by opening five new stores, closing seven and relocating six. We undertook 16 store refits as part of our strategy to refresh the store estate, as well as enhancing the in-store experience for customers through better space planning, ranging and merchandising. \n \n \n \n \n \n \n · \n \n \n \n \n Further strengthened our senior leadership team with the appointment of a new Commercial Director and new 'Heads of' in our Buying, Brand Marketing, Digital Marketing and Profit Protection functions. \n \n \n \n \n \n \n · \n \n \n \n \n Maintained our high levels of colleague engagement and 13 th place on the 'Best Big Companies to work for' ranking. \n \n \n \n \n \n \n \n Trading update and FY23 outlook \n \n \n \n When we updated on Q1 trading on 8 August 2022 we noted that store sales had been resilient and online sales more challenging, although significantly higher than pre-COVID levels. The more positive pattern of trading that had developed by the end of Q1 has continued for the subsequent 7 weeks ended Sunday 18 September 2022, with our refreshed outdoor play range performing well, a very good 'Back to School' season \n and a gradual improvement in our online performance. This \n resulted in store LFL sales up 7.9% and online sales down by 10.1% (but 40% higher than pre-COVID levels), resulting in a total LFL sales increase of 5.7% during the seven week period. For the year to date (20 weeks ended 18 September 2022) the store LFL is up 4.0%, online sales down by 21.7%, the overall LFL up by 0.8% and total sales were up by 2.3%. \n \n \n We are encouraged by the strength of recent trading which reinforces our confidence in the resilience of the business and that the ongoing improvements we are making to our proposition are \n resonating well with customers. Despite the positive recent trading, we remain cautious with regard to how consumer spending might be affected during the remainder of this financial year, by factors such as higher inflation, and therefore the Board's expectations regarding the FY23 result are unchanged (6) . \n \n \n \n Gavin Peck, Chief Executive Officer of The Works, commented: \n \n \n \n \"We delivered a strong performance in FY22, with good growth in sales and profits ahead of pre-COVID levels. This was achieved despite some significant external operational challenges and reflects the ongoing appeal of our proposition, the effective execution of our strategy, a strengthened management team and the collective efforts of our amazing colleagues. We closed the year in a much stronger financial position and will be pleased to recommend to shareholders the payment of a dividend. \n \n \n \"Since our last update in August, our online performance has gradually improved and we continue to be encouraged by store sales, which comprise the significant majority of our revenue and have delivered positive LFL sales growth since June. This has all been supported by the ongoing evolution of our proposition, including a strong performance of our improved 'Back to School' range. We have also had significant growth in our books category, driven by our increased representation of front-list authors including Julia Donaldson and Richard Osman. We are well-placed operationally for Christmas and are gearing up to deliver for our customers, maintaining our commitment to provide them with the products they love at fantastic value. \n \n \n \"The Works is a resilient business with a proven track record of delivering robust results during times of economic hardship, however, given current conditions, we maintain our cautious view of the year ahead. We remain confident in our ability to continue making good strategic progress and to deliver growth in the medium-term.\" \n \n \n \n Preliminary results presentation \n \n \n \n A presentation for analysts will be held today at 9.30 a.m. via video conference call. A copy of the presentation will shortly be made available on the Company's website ( \n \n \n https://corporate.theworks.co.uk/ \n \n ). \n \n \n \n   \n \n \n \n \n \n \n \n Enquiries: \n \n \n \n \n TheWorks.co.uk plc \n \n \n \n Gavin Peck, CEO \n \n \n Steve Alldridge, CFO \n \n \n \n   \n \n \n \n \n \n   \n \n \n   \n \n \n via Sanctuary Counsel \n \n \n \n \n \n \n \n Sanctuary Counsel \n \n \n \n Ben Ullmann \n \n \n Rachel Miller \n \n \n \n \n   \n \n \n +44 (0)20 7340 0395 \n \n \n \n \n [email protected] \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 Footnotes: \n \n \n \n \n \n \n \n (1) \n \n \n \n \n The like for like (LFL) sales increase has been calculated with reference to the FY20 comparative sales figures, or two-year LFL, because the extended periods of enforced store closures during FY21 prevent that period from forming the basis of meaningful comparisons. For the last 5 weeks of the Period, the LFL percentages were calculated with reference to the corresponding weeks in FY19, because the equivalent weeks during FY20 were also affected by the first period of lockdown. Similar comparison periods are also used for the total gross sales growth figures quoted. \n \n \n \n \n \n \n (2) \n \n \n \n \n \"Total sales\" referred to in this statement include VAT and are stated prior to deducting the cost of loyalty points which are adjusted out of the sales figure in the calculation of statutory revenue. A reconciliation between the sales figures and the statutory revenue is included in the Financial Report section of this document. \n \n \n The 52 week comparison periods used for the 2 year LFL and total sales growth calculations uses a literal mapping of calendar weeks between FY22 and the corresponding 52 weeks two/three years prior. Due to the inclusion of a 53rd week in FY21, the FY20/FY19 accounting periods are one week offset from the FY22 52 week period. \n \n \n \n \n \n \n (3) \n \n \n \n \n Primarily, uncertainty over the impact of the Omicron variant and the ongoing supply chain challenges faced by the sector. \n \n \n \n \n \n \n (4) \n \n \n \n \n Bank facilities increased to £30.0m (committed revolving credit facility) and maturity date extended to 30 November 2025. \n \n \n \n \n \n \n (5) \n \n \n \n \n Adjusted profit figures exclude Adjusting items. See Notes 3 and 4 of the attached condensed financial statements. \n \n \n \n \n \n \n (6) \n \n \n \n \n For reference, the Company compiled estimate of the market's expectation for the FY23 Adjusted EBITDA result is approximately £9.0m. \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n Notes for editors: \n \n \n \n The Works is one of the UK's leading multi-channel value retailers of arts and crafts, stationery, toys, and books, offering customers a differentiated proposition as a value alternative to full price specialist retailers. The Group operates a network of over 500 stores in the UK & Ireland and an online store. \n \n \n \n Cautionary statement \n \n \n \n The financial information set out in this statement does not constitute the Company's statutory accounts for the periods ended 1 May 2022 or 2 May 2021, but is derived from those accounts. Statutory accounts for FY21 have been delivered to the Registrar of Companies and those for FY22 will be delivered in due course. The auditor has reported on those accounts: their reports were (i) unqualified and (ii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006. The audit of the statutory accounts for the Period is now complete. Whilst the financial information included in this announcement has been computed in accordance with International Financial Reporting Standards (\"IFRS\") this announcement does not itself contain sufficient information to comply with IFRS. \n \n \n This announcement may contain forward-looking statements with respect to the financial condition, results of operations, and business of the Group.  These statements and forecasts involve risk, uncertainty and assumptions because they relate to events and depend upon circumstances that will occur in the future.  There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. These forward looking statements are made only as at the date of this announcement.  Nothing in this announcement should be construed as a profit forecast.  Except as required by law, the Group has no obligation to update the forward-looking statements or to correct any inaccuracies therein. \n \n \n \n   \n \n \n \n \n Chair's statement \n \n \n \n \n Introduction \n \n \n \n I have greatly enjoyed my first year as Chair of The Works and feel very proud to be part of a business that seeks to enrich the lives of its customers and their families, friends and communities. I have spent a lot of my time getting to know the business, meeting the teams and celebrating too, having joined during The Works' 40 th anniversary year. \n \n \n I have been impressed by the resilience of the business and its ability to adapt to challenging external conditions, whilst also delivering good strategic and financial progress. Over the course of the last year I have also seen The Works become an increasingly modern and efficient business that is being run, for the long-term and in a more professional and structured way by Gavin Peck and his strengthened leadership team. I have seen time and time again exactly why its customers have such a strong affinity to the brand, how it is managing to maintain its position as one of the leading retailers in the value sector and how it has sustained a well-earned reputation for being an incredibly supportive workplace for colleagues. \n \n \n A standout feature of The Works is its truly unique culture. It is one of the greatest strengths of the business and has developed as a result of strong leadership, a positive work environment and a shared passion for delighting customers. Clarifying the Group's purpose - To inspire reading, learning, creativity and play - making lives more fulfilled. - has already had a positive effect on colleagues across the business by helping them to understand the role they can play in inspiring our customers and supporting our communities. Given the current external environment, our purpose has never been more relevant. It is vital that we help our customers to be resourceful, inspire them to get creative and help them see that having fun doesn't need to be costly or excessively consumptive.  \n \n \n This has all been spearheaded by a strengthened leadership team, led by Gavin, and supported by a team of passionate and committed colleagues. On behalf of the Board, I would like to thank colleagues for all they have done, and continue to do, for our business and stakeholders, and for constantly going above and beyond to care for one other. \n \n \n \n Performance \n \n \n \n All retailers have faced difficult external conditions over the past year, particularly the increased costs and disruption caused by the global supply chain challenges post COVID-19. The Works was also subject to a cyber security incident in March which required swift and extensive action to be taken to protect the business and minimise the impact on trading. Each of these factors in isolation would be enough to test any retailer, let alone both in one year. However, despite the adverse impacts from these events, due to the groundwork that Gavin and colleagues laid before the pandemic, an improved customer proposition and effective execution of our strategy, the business was able to deliver a strong trading performance in FY22, which was well ahead of pre-pandemic levels. Revenue increased to £264.6m (FY21: £180.7m), profit before tax increased to £10.2m (FY21: loss before tax of £2.8m) and the business delivered another record Christmas, demonstrating its resilience in very challenging circumstances. \n \n \n \n Strategy \n \n \n \n The last year has also demonstrated that the refocused ' better, not just bigger ' strategy, which is already delivering tangible results, is the right strategic direction for the business. If we continue making progress against each of our four strategic pillars the Board and I are confident that we will see more new customers choose The Works as their primary destination for products to read, learn, create and play and that we will earn increased loyalty from existing customers. We will also be very well positioned to deliver sustainable sales and profit growth in the medium-term and to create value for all our stakeholders. \n \n \n \n Environmental, Social and Governance (ESG) \n \n \n \n The Works has been increasingly focused on its ESG agenda in recent years and has developed three pillars to provide greater clarity and structure, as well as a steering group to drive progress in these areas (more information is included in the Group's FY22 Annual Report). The business has now laid the foundations for a more ambitious and systematic approach to ESG and made some good early progress, but more work needs to be done. In particular, we need to develop a detailed programme of activities and agree metrics to measure progress and targets to reduce our environmental impact. We must also implement the necessary changes to ensure that our reporting is consistent with the recommendations of the Task Force on Climate-related Financial Disclosures. The Works' governance structure is effective and the business has a good track record in protecting its people and supporting its communities, however there are plenty of opportunities to enhance these areas further, for example by promoting greater diversity and inclusion across the business. Our colleagues have shown a desire to engage more in our ESG strategy and already play a role in supporting their local communities, fundraising for our charity partners and protecting the environment, for example through recycling and donating old stock to schools and charities. They are by nature enthusiastic, crafty and resourceful, so will play an important part in driving progress against our ESG pillars. \n \n \n \n Dividend \n \n \n \n As part of some prudent measures to strengthen the balance sheet and manage the cost base and cash flows during the COVID-19 pandemic, dividends were suspended in FY20 and FY21. Reflecting the Group's strong performance in FY22, and its future potential, the Board will propose the payment of a final dividend of 2.4 pence per share in respect of FY22, subject to shareholder approval at our AGM on 27 October 2022, and will look to maintain the cadence of twice yearly dividend payments thereafter. Whilst the consumer market remains especially volatile, we will review future payment levels based on prevailing conditions, but intend to pursue a progressive dividend policy in due course once conditions stabilise. \n \n \n \n Outlook \n \n \n \n Our success this year reflects the ongoing appeal of our proposition and the resilience of our business and was achieved despite some significant external challenges. In the current economic environment, characterised by ongoing inflationary pressure and subdued consumer sentiment, our value proposition is more relevant than ever. We are confident that the Group will continue to make good strategic progress in the year ahead and will deliver growth in the medium-term, albeit that the Adjusted EBITDA result for FY23 will be lower than in FY22. \n \n \n   \n \n \n Carolyn Bradley \n \n \n Chair \n \n \n 23 September 2022 \n \n \n   \n \n \n \n Chief Executive's Review \n \n \n \n \n Introduction \n \n \n \n Our financial year started shortly after we emerged from a lengthy period of COVID-19 lockdowns, with stores having just re-opened. Our customers were delighted to be able to shop with us in store again, and it was a real boost to see colleagues back doing the job they love and the retail sector starting to recover from a period beset by disruptions. I am pleased to report that despite the significant challenges arising from global supply chain disruption and a cyber security incident towards the end of the financial year, we delivered a strong financial performance and made good strategic progress in FY22. This was due to our colleagues, who were ready to serve our customers on their return and continued to show incredible resilience, team spirit and passion for the work they do. On behalf of the leadership team, I would like to thank them for all their ongoing support. This year has demonstrated the resilience of the business; I am proud of all that we have achieved and remain confident about the future prospects for The Works. \n \n \n \n Our purpose \n \n \n \n The Works' proposition, which resonated particularly well with customers during the pandemic, really strengthened over the course of FY22. To underpin the evolution of our brand, we felt the time was right to redefine our purpose. This purpose is \" to inspire reading, learning, creativity and play - making lives more fulfilled\". This will help focus our colleagues on a common goal and show everybody at The Works that they have a role to play as part of our strategy to make our business better, not just bigger . Having now succinctly articulated why we exist the next step is to fully embed this purpose across the business. We believe it will have a truly transformational effect on our performance over the next three years. \n \n \n \n Trading performance and financial results \n \n \n \n The Works delivered a strong trading performance in FY22, well ahead of pre-COVID levels, demonstrating the strong execution of our strategy. Our first half performance was ahead of our expectations and in H2 FY22 we delivered a record Christmas despite uncertainty over the impact of the Omicron variant and the supply chain challenges faced by the sector. Trading in the second half remained positive, although, as expected, the rate of growth began to slow in the latter months of the period, primarily reflecting the impact of an increasingly challenging consumer environment, and also a cyber security incident towards the end of FY22. Overall, total gross sales (1) for the period were £298.4m, an increase of 44.7% compared with FY21 and 12.7% compared with FY20 (1) . Two-year LFL sales increased by 10.5%, with growth online and in stores. \n \n \n This positive trading performance was driven by our ' better, not just bigger' strategy (see below). This included a greater focus on products that inspire and delight our customers such as front-list books, branded products and extended online product ranges, which engaged existing customers and attracted new ones to shop with us, both in store and online. Our flexible business model also enabled us to capitalise on trends like the 'summer of staycations', Fidget Frenzy and BookTok, which boosted sales of the most in-demand products during the year.  \n \n \n Retail is a sector in which challenges arise constantly but two notable ones arose during the year, which we would not expect to recur and are therefore worth highlighting: \n \n \n \n \n \n \n 1. \n \n \n \n \n Supply chain disruption and ongoing uncertainty surrounding possible COVID-19 related restrictions saw some Christmas trade brought forward into September and October. Our proactive management of the supply chain ensured that we had adequate stock overall, despite some of it arriving later than planned, which meant that, although the sales pattern pre-Christmas was different than in previous years, and sub-optimal compared to our plans, we were still able to deliver a record Christmas performance. \n \n \n \n \n \n \n 2. \n \n \n \n \n We also experienced a cyber-security incident at the end of March 2022, which for a short time impacted our till systems, replenishment deliveries to stores and delayed the fulfilment of online orders. We took swift action to protect the business, which dealt with the immediate threat and enabled us to continue trading online and from more than 95% of our stores. Although the initial impact on trading was minimal, our operational recovery, which also included making significant improvements to security arrangements, took longer than expected, and resulted in a residual impact on sales into the early part of FY23. \n \n \n \n \n \n \n Profit performance improved significantly, with FY22 EBITDA increasing to £16.6m (FY21: £4.3m). Our improved sales performance and the operational and proposition improvements we have made throughout the year helped to offset the cost impact of the external headwinds highlighted above, which were also partially offset by £5.8m of COVID-19 business rates relief. On a statutory basis, profit before tax increased to £10.2m (FY21: loss before tax of £2.8m). \n \n \n \n (1) \n \n See footnotes (1) and (2) in the Financial review which describe the basis for calculating 2-year sales comparisons. \n \n \n \n Strategy \n \n \n \n At the FY21 preliminary results we announced an evolution of our strategy, to be a ' better, not just bigger ' version of ourselves. Since then we have made good strategic progress, both behind the scenes to improve our operations and efficiency, as well as more visible changes to sharpen the proposition, improve our stores, our product ranges and how we interact with our customers. We have also strengthened the management team and senior leadership across the business to support the successful execution of our strategy. \n \n \n Each change made, when considered in isolation, will have a relatively limited impact on our future performance but collectively the changes we have made across the entire business will, we believe, be truly game changing for The Works. These improvements have already helped to drive top and bottom-line growth in FY22 and we believe that if we continue to make good progress against this strategy it will significantly increase sales and will generate much more sustainable returns in the long-term. \n \n \n Outlined below is an overview of each of the four pillars of our strategy, progress made against them during FY22, and our priorities for the year ahead. \n \n \n \n Develop our brand and increase our customer engagement \n \n \n \n In line with our purpose, we are improving our customer proposition to help build deeper relationships with our existing customers, drive increased brand loyalty and inspire and attract new customers. \n \n \n In FY22 we: \n \n \n \n \n \n \n · \n \n \n \n \n Clarified our purpose to better reflect what we do every day. Articulating why we exist has helped give all colleagues the same 'north star' and is ensuring that everything we do is focused on The Works' customers. \n \n \n \n \n \n \n · \n \n \n \n \n Evolved our brand to create a new, more modern look and began to focus our communications on inspiring customers. \n \n \n \n \n \n \n · \n \n \n \n \n Recruited a new Commercial Director to drive forward our customer proposition and further strengthen the commercial function. \n \n \n \n \n \n \n · \n \n \n \n \n Recruited a new Head of Brand to improve our brand marketing and customer communications, engagement and loyalty. \n \n \n \n \n \n \n · \n \n \n \n \n Made significant progress in improving our offer by taking a more strategic and customer-focused approach to range selection. Our great value proposition is already well recognised and as a result of the action we have taken this year we are now becoming customers' go-to destination for reading, learning, creativity and play. We have achieved this by: \n \n \n \n \n \n \n \n \n \n \n \n \n \n o  \n \n \n \n \n Overhauling our book strategy, stocking many more front-list titles such as David Walliams' Gangsta Granny Strikes Again and Richard Osman's The Man Who Died Twice . This is helping to increase our market share in the book category, improve our credibility as a bookseller and also drive sales of great value back-list titles which can still represent significant sales opportunities. \n \n \n \n \n \n \n \n \n \n \n \n \n \n o  \n \n \n \n \n Capitalising on the BookTok trend. Our flexible business model and strengthened relationships with publishers enable us to respond to trending books highlighted on TikTok and provide customers with the most in-demand books at great value. \n \n \n \n \n \n \n \n \n \n \n \n \n \n o  \n \n \n \n \n Increasing our ranges of popular branded products in our Kids Zone, such as Peppa Pig, Paw Patrol and Cocomelon, and board games including Scrabble, Articulate and Elf Monopoly. \n \n \n \n \n \n \n In FY23 we will focus on: \n \n \n \n \n \n \n · \n \n \n \n \n Developing our marketing strategy, deploying our evolved brand and refreshed look to inspire and engage with customers more effectively. \n \n \n \n \n \n \n · \n \n \n \n \n Ensuring our products and ranges align with our purpose - to inspire reading, learning, creativity and play - making lives more fulfilled. \n \n \n \n \n \n \n · \n \n \n \n \n Further developing our product offering, including extending our range of Children's books (including front-list authors such as Julia Donaldson being introduced) and refreshing our own-brand Art, Craft and Stationery ranges. \n \n \n \n \n \n \n · \n \n \n \n \n Using data and insight more effectively so that we develop a better understanding of our customers and their preferences. \n \n \n \n \n \n \n · \n \n \n \n \n Relaunching our Together loyalty programme, which has enormous untapped potential, given the relatively low levels of penetration of the scheme (c13% of transactions in FY22). \n \n \n \n \n \n \n \n Enhance our online proposition \n \n \n \n We strive to become customers' go-to destination for reading, learning, creativity and play. We believe that our online channel will be an important part of achieving this ambition given the role it can play in providing inspiring content and convenient shopping. We invested in a new web platform in July 2020 which provided the foundation for us to subsequently invest significantly in our online fulfilment capacity and in shortening delivery times. Our online capability is now more efficient and better able to meet increasing customer demand. \n \n \n In FY22 we: \n \n \n \n \n \n \n · \n \n \n \n \n Improved our fulfilment capacity and delivery capabilities for increasingly 'time poor' customers, who seek greater product availability and faster delivery times. We extended our next day delivery cut-off from 8pm to 11pm and reduced our standard delivery window from three to five days to a guaranteed three days. \n \n \n \n \n \n \n · \n \n \n \n \n Further enhanced our complementary online ranges, focusing particularly on expanding online ranges of larger items in our Out2Play range, which performed well during the ' summer of staycations' in 2021, as well as offering a greater selection of front-list books, branded toys and games. \n \n \n \n \n \n \n · \n \n \n \n \n Started to optimise our new platform. For example, we have improved the navigation across key product and category pages to help customers find product matches and introduced browse attributes to reduce clicks required to purchase. \n \n \n \n \n \n \n · \n \n \n \n \n Recruited a Head of Digital Marketing to develop and implement campaigns across new channels, improve efficiency, help attract more people to our website and improve our CRM. \n \n \n \n \n \n \n In FY23 we will focus on: \n \n \n \n \n \n \n · \n \n \n \n \n Further enhancing the online customer experience, including undertaking a usability study to better understand the customer journey and key friction points. Alongside the outputs of this review we will improve the merchandising of products on the site and navigation through the site, supported by better analytics and the introduction of new tooling, including multi-variate testing. \n \n \n \n \n \n \n · \n \n \n \n \n Launching more targeted online range extensions, building on improvements made in our front-list book, and branded toys and games offers in store. \n \n \n \n \n \n \n · \n \n \n \n \n Introducing 'Parcelshop' as an alternative delivery option, adding c.11k additional pick-up points, improving convenience for our customers. \n \n \n \n \n \n \n · \n \n \n \n \n Engaging and retaining more customers through our digital marketing, including building a team to strengthen our in-house capabilities. \n \n \n \n \n \n \n · \n \n \n \n \n Improving the customer experience between stores and online by making it possible for customers to order from the website when shopping in store and performing an end-to-end review of our click and collect journey. \n \n \n \n \n \n \n \n Optimise our store estate \n \n \n \n We already have a strong footprint across the UK and Ireland, with stores conveniently located on high streets, in shopping centres, in retail parks and concessions within garden centres. The broad appeal of our proposition and low-cost model of our stores, which tend to be smaller than those of our competitors, allows us to operate in such locations which often do not suit more specialist retailers. As a result, in these locations, there is often very little direct high street competition. \n \n \n Our main priority is to optimise our stores to create an environment that inspires our customers, reflects the communities we serve and encourages more shoppers to consider The Works as their primary destination for the products we offer. \n \n \n In FY22 we: \n \n \n \n \n \n \n · \n \n \n \n \n Further improved the quality of the store estate, opening five new stores, closing seven and relocating six. Our opening in Bluewater, one of the UK's most high-profile shopping centres, was a particular highlight and the store is trading successfully. As of 1 May 2022 we traded from 525 stores. \n \n \n \n \n \n \n · \n \n \n \n \n Undertook 16 store refits as part of our strategy to refresh the store estate and bring all stores up to an 'ideal' standard over the next three years. These refits will improve customer experience by modernising the store shopping environment and improving the store layout, whilst also making the stores easier to run operationally. \n \n \n \n \n \n \n · \n \n \n \n \n Enhanced the in-store experience through better space planning, ranging and merchandising. We also improved customer experience and made our stores easier to shop, for example through better navigation and ensuring that all stock is at an easily accessible height. \n \n \n \n \n \n \n In FY23 we will focus on: \n \n \n \n \n \n \n · \n \n \n \n \n Continuing to grow our brand awareness with selective new store openings, focused on the top locations that we are not yet represented in. \n \n \n \n \n \n \n · \n \n \n \n \n Optimising our existing stores through relocations and refits, with 40 stores expected to benefit from this activity. \n \n \n \n \n \n \n · \n \n \n \n \n Further improving our use of space in store to enhance the customer experience and drive improved sales densities, supported by the introduction of new space and merchandising software. \n \n \n \n \n \n \n · \n \n \n \n \n Increasing our focus on offering excellent customer service in-store, through improved training and continuing to simplify the way we operate our stores to reduce other tasks. \n \n \n \n \n \n \n \n Drive operational improvements \n \n \n \n Improving our ways of working to become a more productive and modern retailer is a core part of our \"better, not just bigger\" strategy. We want to ensure we operate efficiently and in a cost-effective way, as well as providing better product choice and availability for our customers. The progress we have made means that 'behind the scenes' we are already operating more effectively, which we believe will help to generate more sustainable returns in the future. \n \n \n In FY22 we: \n \n \n \n \n \n \n · \n \n \n \n \n Invested in our supply chain team and systems, making improvements in our end-to-end stock management processes, including successfully piloting a new stock allocation system that will significantly improve on-shelf availability and drive improved stock turn. \n \n \n \n \n \n \n · \n \n \n \n \n Renewed our e-commerce logistics contract with iForce. The renewed contract includes additional investment to fund the introduction of automated picking robots and an automated packing machine. This is expected to drive productivity, help to offset the National Living Wage cost headwind in our online fulfilment operation, whilst also reducing our waste packaging. \n \n \n \n \n \n \n · \n \n \n \n \n Launched a trial to deliver directly to 29 stores (rather than via a third party network), which was subsequently expanded to cover 60 stores, significantly reducing the lead time from picking to delivery and helping to improve on-shelf availability. This will be rolled out to more stores in FY23 although most stores will continue to receive deliveries via a third party network. \n \n \n \n \n \n \n · \n \n \n \n \n Established a Profit Protection function with an initial focus on reducing store stock loss (e.g. through identifying and reducing high levels of theft). \n \n \n \n \n \n \n · \n \n \n \n \n Selected a new electronic point of sale (EPOS) solution for stores and began development of this new system ahead of deployment later in FY23. This system replaces the existing outdated system and provides a platform for introducing additional functionality, for example self-service checkout and ordering from our website whilst in store. \n \n \n \n \n \n \n · \n \n \n \n \n Accelerated the implementation of our existing plans to strengthen IT security measures following the cyber-security incident in March 2022. \n \n \n \n \n \n \n In FY23 we will focus on: \n \n \n \n \n \n \n · \n \n \n \n \n Rolling out our new stock allocation system across our entire store estate. \n \n \n \n \n \n \n · \n \n \n \n \n Extending our scheme to deliver directly to stores. \n \n \n \n \n \n \n · \n \n \n \n \n Deploying the new EPOS solution across the store estate, including the functionality to order online whilst in-store. \n \n \n \n \n \n \n · \n \n \n \n \n Reducing store stock loss through the execution of our profit protection plans, including driving a colleague awareness programme, better utilising data to identify stores with high stock losses and targeting increased activity on these higher risk stores. \n \n \n \n \n \n \n · \n \n \n \n \n Adopting a continuous improvement approach in relation to all operational processes across the business. \n \n \n \n \n \n \n \n Colleagues \n \n \n \n In a challenging and competitive retail environment, our colleagues are fundamental to the delivery of great customer service. Many retail businesses make this claim, but we believe that The Works is unique and fortunate to have a team of colleagues who truly believe in our purpose and are passionate about the job they do. Attracting, retaining, developing, and engaging good people are key to our success and I was very pleased that we have maintained our position on the Best Big Companies to Work for National List, ranking 13 th place. \n \n \n During the year we have strengthened the leadership team through the creation of a number of new roles. Nina Findley, our new Commercial Director, joined the Operational Board in June 2021. Nina has over 20 years' buying experience in highly relevant markets, having spent her early career with Woolworths and Superdrug and more recently holding a variety of senior roles at Homebase .   During the period we also strengthened our senior leadership team with the appointment of new 'Heads of' in our Brand Marketing, Digital Marketing, Buying and Profit Protection functions.  \n \n \n We remain focused on further enhancing the engagement and development of our colleagues with further exciting initiatives planned for FY23, including introducing a new Communication and Rewards platform ('MyWorks') and a new learning and development system (our 'Can Do Academy'). \n \n \n \n Environmental, Social and Governance (ESG) \n \n \n \n Having reviewed our approach last year and, as a first step, formed a new ESG steering group, we are increasing our focus on ESG issues and defining our ESG commitments. Working to reduce our impact on the planet and supporting our people and communities is not only the right thing to do, it is a key issue for our stakeholders and will also ensure that we stay relevant as customer demand for more sustainable products continues to grow. \n \n \n We are currently developing our sustainability strategy to ensure that it addresses environmental issues whilst supporting our growth. We are also engaged in a programme of work to ensure our compliance with the recommendations of the Task Force on Climate-related Financial Disclosures. We have also signed up to the British Retail Consortium's Diversity and Inclusion charter and are gathering baseline data and insight to help further develop our D&I strategy and ensuring its effectiveness.  \n \n \n The Works has always been a business that gives back and I am very proud of the fundraising efforts of our colleagues and grateful for the generosity of our customers. Our commercial and fundraising partnership with Cancer Research UK continues and last year we were delighted to enter into a nationwide partnership with MIND, SAMH and Inspire - three leading charities that do incredible work to support people's mental health. \n \n \n \n Outlook \n \n \n \n Overall, we are pleased with the performance delivered in FY22. However, we are not immune from the current inflationary pressures, which have increased business costs and we anticipate may weigh on consumer spending levels over a much more sustained period than initially expected. In this environment, our value proposition is more relevant than ever, and we are confident that the Group will continue to make good strategic progress in the year ahead and will deliver growth in the medium-term, albeit the Adjusted EBITDA result for FY23 will be lower than in FY22. \n \n \n   \n \n \n Gavin Peck \n \n \n Chief Executive Officer \n \n \n 23 September 2022 \n \n \n   \n \n \n \n Financial review \n \n \n \n The FY22 accounting period relates to the 52 weeks ended 1 May 2022 (also referred to as the Period) and the comparative FY21 accounting period relates to the 53 weeks ended 2 May 2021. \n \n \n As is \n described in the financial statements, the Group tracks a number of alternative performance measures (APMs), as it believes that these provide management and other stakeholders with additional helpful information. APMs used in this report include EBITDA, Adjusted EBITDA and like for like (\"LFL\") sales \n . \n \n \n The Group made a profit before tax of £10.2m (FY21: loss before tax of £2.8m). Adjusting items in FY22 were insignificant and the adjusted profit before tax was £10.1m (FY21: adjusted loss before tax of £3.6m). The adjusting items related to net impairment reversals. \n \n \n The pre IFRS 16 Adjusted EBITDA was £16.6m (FY21: £4.3m). \n \n \n   \n \n \n \n Overview \n \n \n \n The Group delivered a strong performance in FY22, the first year under the leadership of the new management team that was relatively unaffected by COVID-19 disruption. FY22's performance was characterised by the following factors: \n \n \n · \n Strong underlying sales throughout the year driven by solid progress against the Group's strategic objectives beginning to leverage the inherent strength of the proposition. \n \n \n · \n Significant disruption to global freight operations in the autumn of 2021 resulted in much higher freight costs and a less than ideal flow of stock into the business, despite which, the Group achieved a record Christmas trading period. \n \n \n · \n A cyber security incident occurred at the end of March 2022. Operations in the last month of the financial year (and the beginning of FY23) were intentionally restricted to allow the deployment of strengthened system security measures alongside a carefully staged system recovery plan. \n \n \n · \n As the effects of COVID-19 reduced, the level of Government financial support reduced correspondingly, although the Group received £5.8m of business rates relief during FY22. \n \n \n · \n The effects of inflation began to have an impact, particularly in the form of higher freight costs and an increase in the National Living Wage. \n \n \n \n \n \n \n \n EBITDA bridge between FY21 and FY22 \n \n \n \n \n \n \n £m \n \n \n \n \n \n \n \n \n FY21 adjusted EBITDA (pre IFRS 16) \n \n \n \n \n \n \n 4.3 \n \n \n \n \n \n \n \n Increased gross margin due to year-on-year increase in sales \n \n \n \n \n 51.9 \n \n \n \n \n \n \n Lower gross product margin % (including impact of freight costs) \n \n \n \n \n (6.6) \n \n \n \n \n \n \n Government furlough relief received in FY21 (nil in FY22) \n \n \n \n \n (15.4) \n \n \n \n \n \n \n Lower level of COVID-19 business rates relief received in FY22 \n \n \n \n \n (8.3) \n \n \n \n \n \n \n COVID-19 business grants received in FY21 (nil in FY22) \n \n \n \n \n (1.8) \n \n \n \n \n \n \n Resumption of normal operating costs and inflation \n \n \n \n \n (7.5) \n \n \n \n \n \n \n \n FY22 adjusted EBITDA (pre IFRS 16) \n \n \n \n \n \n \n 16.6 \n \n \n \n \n \n \n \n The strong financial performance resulted in another year of healthy cash generation, even allowing for favourable working capital timing differences which slightly flattered the comparison; the closing net cash balance was £16.3m, which compares well with the £0.8m balance at the end of FY21 (and, for reference, £7.1m of net debt at the end of FY20). \n \n \n Despite the healthy cash position and our confidence in the inherent ability of the Group to generate strong positive cash flow, with the increasingly bleak tone of external predictions about the near-term economic outlook, we considered it prudent to buttress the Group's financial position by refinancing the Group's bank facilities. This was formally completed shortly after the year end and increases the size of the facility to £30.0m and extends the expiration date to the end of November 2025. \n \n \n As a further indication of the Board's confidence in the prospects of The Works, dividends will be reinstated, assuming that shareholders at the AGM approve the Board's recommendation of a 2.4 pence per share dividend in respect of FY22. \n \n \n Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures. \n \n \n \n   \n \n \n \n \n Revenue analysis \n \n \n \n Total revenue increased by 46. 5% to £264.6 million (FY21: £180.7 million).  \n \n \n The enforced closure of stores during certain periods in FY21 prevents meaningful comparisons of FY22's sales performance with that year, so FY20 is used as a comparison period for trading performance. Total gross sales (1) in FY22 increased by 12.7% compared to FY20 and two-year LFL sales (2) increased by 10.5%, with positive growth continuing both online and in stores. \n \n \n \n \n \n \n \n 2 year LFL sales growth \n \n \n \n \n \n \n Stores \n \n \n \n \n \n \n Online \n \n \n \n \n \n \n Total \n \n \n \n \n \n \n \n Q1 \n \n \n \n \n 5.7% \n \n \n \n \n 96.8% \n \n \n \n \n 13.4% \n \n \n \n \n \n \n Q2 \n \n \n \n \n 8.6% \n \n \n \n \n 71.0% \n \n \n \n \n 15.5% \n \n \n \n \n \n \n \n H1 \n \n \n \n \n \n \n 7.3% \n \n \n \n \n \n \n 80.6% \n \n \n \n \n \n \n 14.5% \n \n \n \n \n \n \n \n Q3 \n \n \n \n \n (0.3%) \n \n \n \n \n 70.0% \n \n \n \n \n 7.9% \n \n \n \n \n \n \n Q4 \n \n \n \n \n 3.2% \n \n \n \n \n 42.5% \n \n \n \n \n 6.8% \n \n \n \n \n \n \n \n H2 \n \n \n \n \n \n \n 0.9% \n \n \n \n \n \n \n 62.1% \n \n \n \n \n \n \n 7.5% \n \n \n \n \n \n \n \n \n Full year \n \n \n \n \n \n \n 3.7% \n \n \n \n \n \n \n 69.7% \n \n \n \n \n \n \n 10.5% \n \n \n \n \n \n \n \n   \n \n \n · \n Q1 highlights \n \n \n o  \n Pent up demand following the recent re-opening of stores (in April 2021) was supported by a sale which was larger than usual as it included stock we were unable to sell in January/February 2021 when we would normally have held a post-Christmas sale. \n \n \n o  \n During summer 2021, \"fidget frenzy\" stock became very popular at the end of Q1, which then combined with a strong back to school performance in August to create a positive start to Q2. \n \n \n · \n Q2 highlights \n \n \n o  \n Sales during September and October were stronger than expected, likely to have been helped by Christmas demand beginning early. We hypothesise that customers sought to minimise risks of not being able to shop before Christmas and/or of stocks being scarce due to widely reported issues with supplies due to the global freight/supply chain challenges. \n \n \n · \n Q3 highlights \n \n \n o  \n Record Christmas despite the overall stock mix and its distribution to stores not being as well executed as we had planned due to the supply chain disruption, for example, Christmas accessories did not arrive until early in December. The Omicron COVID-19 variant may have reduced sales from consumers who were being more cautious about going out. \n \n \n o  \n The January sale event was smaller than planned because terminal stock levels were low and we had not bought stock specifically for the sale period. \n \n \n · \n Q4 highlights \n \n \n o  \n Developments to the product proposition, with front list books and branded toys and games being highlights, sold well as we emerged from the January sale. \n \n \n o  \n A cyber security incident at the end of March caused limited immediate/direct interruption to trading, but the cautious approach taken to the recovery affected sales in April (and into the beginning of FY23). \n \n \n The table below shows the reconciliation of LFL sales used for year-on-year comparisons, with statutory revenue. \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n FY22 \n \n \n \n \n £m \n \n \n \n \n \n \n FY21 \n \n \n \n \n £m \n \n \n \n \n \n \n Variance \n \n \n \n \n £m \n \n \n \n \n \n \n Variance \n \n \n \n \n % \n \n \n \n \n \n \n \n \n Total LFL sales for Period (one year LFL) \n \n \n \n \n \n \n 261.1 \n \n \n \n \n \n \n 191.0 \n \n \n \n \n \n \n 70.1 \n \n \n \n \n \n \n 36.7% \n \n \n \n \n \n \n \n Sales from new/closed stores \n \n \n \n \n 37.3 \n \n \n \n \n 15.2 \n \n \n \n \n 22.1 \n \n \n \n \n \n 145.8% \n \n \n \n \n \n \n \n \n Total Gross Sales \n \n \n \n \n \n \n 298.4 \n \n \n \n \n \n \n 206.2 \n \n \n \n \n \n \n 92.2 \n \n \n \n \n \n \n 44.7% \n \n \n \n \n \n \n \n VAT \n \n \n \n \n (33.5) \n \n \n \n \n (24.3) \n \n \n \n \n (9.2) \n \n \n \n \n \n 38.0% \n \n \n \n \n \n \n \n Loyalty points redeemed \n \n \n \n \n (0.3) \n \n \n \n \n (1.2) \n \n \n \n \n 0.9 \n \n \n \n \n \n (77.0)% \n \n \n \n \n \n \n \n \n Revenue (per statutory accounts) \n \n \n \n \n \n \n 264.6 \n \n \n \n \n \n \n 180.7 \n \n \n \n \n \n \n 83.9 \n \n \n \n \n \n \n 46.4% \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n (1) \n \n \n \n \n \n \"Total sales\" \n \n include VAT and are stated prior to deducting the cost of loyalty points which are adjusted out of the sales figure in the calculation of statutory revenue. The 52-week comparison periods used for the LFL and total sales growth calculations use a literal mapping of calendar weeks between FY22 and the corresponding 52 weeks two/three years prior. Due to the inclusion of a 53 rd week in FY21, the FY20/FY19 statutory accounting periods are one week offset from the 52-week period used in the LFL and total sales comparisons.  \n \n \n \n \n \n \n (2) \n \n \n \n \n \n LFL sales \n \n increase has been calculated with reference to the FY20 comparative sales figures, or two-year LFL, because the extended periods of enforced store closures during FY21 prevent that period from forming the basis of meaningful comparisons. For the last 5 weeks of the Period, the LFL percentages are calculated using the corresponding weeks in FY19 , because the equivalent weeks during FY20 were also affected by the first period of enforced store closures. Similar comparison periods are also used for the total sales growth figures quoted. \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n The number of stores trading reduced by two during the period, from 527 to 525. Despite this small change in the net number of stores at the year end, the sales from new/closed stores in the previous table shows a significant increase compared with the prior year due to the relative timing of store openings/closures as well as the effect of the periods of enforced store closures in FY21. The one-year LFL percentage growth is relatively low by comparison, because a significant one-year LFL decline in online sales partially offset a high store LFL (also due to the periods of closure in FY21). \n \n \n Most of the capital cost of opening the new stores continued to be funded via capital contributions from landlords, reducing the impact on the Group's cashflow.  The new stores are trading successfully with sales levels above their financial appraisal targets. \n \n \n \n \n \n \n \n Store numbers \n \n \n \n \n \n \n FY22 \n \n \n \n \n \n \n FY21 \n \n \n \n \n \n \n \n Stores at beginning of period \n \n \n \n \n 527 \n \n \n \n \n 534 \n \n \n \n \n \n \n Opened in the period \n \n \n \n \n 5 \n \n \n \n \n 4 \n \n \n \n \n \n \n Closed in the period \n \n \n \n \n (7) \n \n \n \n \n (11) \n \n \n \n \n \n \n Relocated (excluded from opened/closed above, NIL net effect on store numbers) \n \n \n \n \n \n 6 \n \n \n \n \n \n \n 2 \n \n \n \n \n \n \n \n \n Stores at end of period \n \n \n \n \n \n \n 525 \n \n \n \n \n \n \n 527 \n \n \n \n \n \n \n \n   \n \n \n The cost of loyalty points redeemed during the year increased as expected, in line with the sales increase, but the reported cost reduced due to the write back of points previously issued and accounted for, which have subsequently expired, and can no longer be redeemed. \n \n \n We have noted that books sold well during FY22, increasing their participation of total sales. As they are zero rated for VAT, this benefited the effective VAT rate which was 11.2% compared with 11.8% in FY21 \n . \n \n \n \n   \n \n \n \n \n Gross profit \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n FY22 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n FY21 \n \n \n (Restated *) \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 £m \n \n \n \n \n \n \n % of revenue \n \n \n \n \n \n \n   \n \n \n \n \n \n \n £m \n \n \n \n \n \n \n % of revenue \n \n \n \n \n \n \n   \n \n \n \n \n \n \n Variance \n \n \n \n \n £m \n \n \n \n \n \n \n Variance \n \n \n \n \n % \n \n \n \n \n \n \n \n \n Revenue \n \n \n \n \n \n \n 264.6 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n 180.7 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n 84.0 \n \n \n \n \n \n \n 46.5 \n \n \n \n \n \n \n \n Less: Cost of goods sold \n \n \n \n \n 107.7 \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n 69.0 \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n 38.7 \n \n \n \n \n \n 56.1 \n \n \n \n \n \n \n \n \n Product gross margin \n \n \n \n \n \n \n 157.0 \n \n \n \n \n \n \n 59.3 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 111.7 \n \n \n \n \n \n \n 61.8 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 45.3 \n \n \n \n \n \n \n 40.5 \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 \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 Other costs included in statutory cost of sales \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 Store payroll \n \n \n \n \n 43.6 \n \n \n \n \n \n 16.5 \n \n \n \n \n \n \n   \n \n \n \n \n \n 37.7 \n \n \n \n \n \n 20.8 \n \n \n \n \n \n \n   \n \n \n \n \n \n 5.9 \n \n \n \n \n \n 15.7 \n \n \n \n \n \n \n \n Store property and establishment costs \n \n \n \n \n 43.7 \n \n \n \n \n \n 16.5 \n \n \n \n \n \n \n   \n \n \n \n \n \n 36.7 \n \n \n \n \n \n 20.3 \n \n \n \n \n \n \n   \n \n \n \n \n \n 7.0 \n \n \n \n \n \n 19.1 \n \n \n \n \n \n \n \n Store PoS & transaction fees \n \n \n \n \n 2.1 \n \n \n \n \n \n 0.8 \n \n \n \n \n \n \n   \n \n \n \n \n \n 1.4 \n \n \n \n \n \n 0.8 \n \n \n \n \n \n \n   \n \n \n \n \n \n 0.7 \n \n \n \n \n \n 47.7 \n \n \n \n \n \n \n \n Store depreciation \n \n \n \n \n 5.0 \n \n \n \n \n \n 1.9 \n \n \n \n \n \n \n   \n \n \n \n \n \n 5.2 \n \n \n \n \n \n 2.9 \n \n \n \n \n \n \n   \n \n \n \n \n \n (0.2) \n \n \n \n \n \n (4.0) \n \n \n \n \n \n \n \n Online variable costs  \n \n \n \n \n 18.7 \n \n \n \n \n \n 7.1 \n \n \n \n \n \n \n   \n \n \n \n \n \n 24.5 \n \n \n \n \n \n 13.6 \n \n \n \n \n \n \n   \n \n \n \n \n \n (5.8) \n \n \n \n \n \n (23.8) \n \n \n \n \n \n \n \n IFRS16 impact \n \n \n \n \n (4.7) \n \n \n \n \n \n (1.8) \n \n \n \n \n \n \n   \n \n \n \n \n \n (4.2) \n \n \n \n \n \n (2.3) \n \n \n \n \n \n \n   \n \n \n \n \n \n (0.5) \n \n \n \n \n \n 11.1 \n \n \n \n \n \n \n \n Adjusting items \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n \n   \n \n \n \n \n \n (1.0) \n \n \n \n \n \n (0.5) \n \n \n \n \n \n \n   \n \n \n \n \n \n 0.9 \n \n \n \n \n \n (97.0) \n \n \n \n \n \n \n \n \n Total non-product related cost of sales \n \n \n \n \n \n \n 108.4 \n \n \n \n \n \n \n 41.0 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 100.4 \n \n \n \n \n \n \n 55.6 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 8.0 \n \n \n \n \n \n \n 8.0 \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 \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 Gross profit per financial statements \n \n \n \n \n \n \n 48.6 \n \n \n \n \n \n \n 18.4 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 11.3 \n \n \n \n \n \n \n 6.3 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 37.2 \n \n \n \n \n \n \n 328.8 \n \n \n \n \n \n \n \n (*) See Note 5 of condensed financial statements \n \n \n The product gross margin decreased by 250bps to 59.3% (FY21: 61.8%). \n \n \n · \n The gross margin was affected by much higher freight costs than normal, particularly in H2 FY22 (these have remained high into FY23 but we expect them to abate in FY24, offsetting the adverse effect of a weaker pound). \n \n \n · \n The FY21 comparative included unusually low discounting, particularly online, when the stores were closed due to restrictions. \n \n \n · \n The product mix included a greater proportion of front-list books and branded games and toys, which sell at a lower percentage margin, although contribute positively to the cash margin. \n \n \n Store payroll costs increased due to the National Living Wage increase, which was partially mitigated by operational efficiencies and reduced tasking in the stores. Also, in FY21, when colleagues were furloughed, only 80 % of the normal wage rate was paid. \n \n \n Store property and establishment costs increased due to a year-on-year reduction in the value of COVID-19 business rates relief received (£5.8m was received in FY22) and higher energy costs, which were partially offset by further rent savings (energy costs have also increased significantly in FY23, although this is factored into our forecast). \n \n \n The increase in store point of sale (PoS) and transaction fees, which are volume related costs, was broadly in line with the increase in sales. \n \n \n Although on a two year LFL basis, online sales grew by 69.7%, on a one year LFL basis, compared to the exceptionally high sales levels in FY21 when stores were closed, online sales declined, with a corresponding decrease in volume related costs including marketing and fulfilment costs \n . \n \n \n \n   \n \n \n \n \n Other operating income/expense \n \n \n \n The other operating expense was £0.1m (FY21: other operating income of £17.1m). In FY21 the income related to the Government Coronavirus Job Retention Scheme and the COVID-19 Retail, Hospitality and Leisure Grant Fund (the COVID-19 rates relief received is netted off rates costs within the cost of sales, as described in the previous section). \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n FY22 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n FY21 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n Other operating income \n \n \n \n \n \n \n £m \n \n \n \n \n \n \n % of revenue \n \n \n \n \n \n \n   \n \n \n \n \n \n \n £m \n \n \n \n \n \n \n % of revenue \n \n \n \n \n \n \n   \n \n \n \n \n \n \n Variance \n \n \n \n \n £m \n \n \n \n \n \n \n Variance \n \n \n \n \n % \n \n \n \n \n   \n \n \n \n \n \n Coronavirus Job Retention Scheme grants \n \n \n \n \n (0.1) \n \n \n \n \n \n - \n \n \n \n \n \n \n \n \n \n \n \n \n 15.3 \n \n \n \n \n \n 8.5 \n \n \n \n \n \n \n \n \n \n \n \n \n (15.4) \n \n \n \n \n \n (100.7) \n \n \n \n \n   \n \n \n \n \n \n COVID 19 retail business grant \n \n \n \n \n - \n \n \n \n \n \n - \n \n \n \n \n \n \n \n \n \n \n \n \n 1.8 \n \n \n \n \n \n 1.0 \n \n \n \n \n \n \n \n \n \n \n \n \n (1.8) \n \n \n \n \n \n (100.0) \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n (0.1) \n \n \n \n \n \n \n - \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 17.1 \n \n \n \n \n \n \n 9.4 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n (17.2) \n \n \n \n \n \n \n (100.7) \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 Distribution costs \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n FY22 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n FY21 \n \n \n (Restated *) \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 £m \n \n \n \n \n \n \n % of revenue \n \n \n \n \n \n \n   \n \n \n \n \n \n \n £m \n \n \n \n \n \n \n % of revenue \n \n \n \n \n \n \n   \n \n \n \n \n \n \n Variance \n \n \n \n \n £m \n \n \n \n \n \n \n Variance \n \n \n \n \n % \n \n \n \n \n \n \n \n \n Adjusted distribution costs \n \n \n \n \n \n   9.0 \n \n \n \n \n \n 3.4 \n \n \n \n \n \n \n \n \n \n \n \n \n   6.4 \n \n \n \n \n \n 3.5 \n \n \n \n \n \n \n \n \n \n \n \n \n 2.7 \n \n \n \n \n \n 42.5 \n \n \n \n \n \n \n \n Depreciation \n \n \n \n \n   0.1 \n \n \n \n \n \n - \n \n \n \n \n \n \n \n \n \n \n \n \n   0.1 \n \n \n \n \n \n 0.1 \n \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n \n \n \n (16.0) \n \n \n \n \n \n \n \n IFRS 16 impact \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 (91.0) \n \n \n \n \n \n \n \n \n Distribution costs per statutory accounts \n \n \n \n \n \n \n 9.1 \n \n \n \n \n \n \n 3.4 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 6.4 \n \n \n \n \n \n \n 3.6 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 2.7 \n \n \n \n \n \n \n 41.8 \n \n \n \n \n \n \n \n (*) See Note 5 of condensed financial statements \n \n \n Retail distribution costs were higher during the period as the stores were trading throughout, in contrast to the prior year, and therefore volume driven labour and pallet delivery costs increased. In addition, the increase in the National Living Wage rate increased staff costs although some of the inflationary increase was mitigated by operating/efficiency improvements. \n \n \n \n   \n \n \n \n \n Administration costs \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n FY22 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n FY21 \n \n \n (Restated *) \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 £m \n \n \n \n \n \n \n % of revenue \n \n \n \n \n \n \n   \n \n \n \n \n \n \n £m \n \n \n \n \n \n \n % of revenue \n \n \n \n \n \n \n   \n \n \n \n \n \n \n Variance \n \n \n \n \n £m \n \n \n \n \n \n \n Variance \n \n \n \n \n % \n \n \n \n \n \n \n \n \n Pre-IFRS 16, Adjusted administration costs \n \n   \n \n \n \n \n  23.2 \n \n \n \n \n \n   8.8 \n \n \n \n \n \n \n \n \n \n \n \n \n  17.8 \n \n \n \n \n \n   9.9 \n \n \n \n \n \n \n \n \n \n \n \n \n   5.4 \n \n \n \n \n \n 30.1 \n \n \n \n \n \n \n \n Depreciation \n \n \n \n \n   1.2 \n \n \n \n \n \n   0.5 \n \n \n \n \n \n \n \n \n \n \n \n \n   1.7 \n \n \n \n \n \n   0.9 \n \n \n \n \n \n \n \n \n \n \n \n \n   (0.5) \n \n \n \n \n \n   (28.2) \n \n \n \n \n \n \n \n IFRS 16 impact \n \n \n \n \n  (0.4) \n \n \n \n \n \n   (0.1) \n \n \n \n \n \n \n \n \n \n \n \n \n (0.4) \n \n \n \n \n \n   (0.2) \n \n \n \n \n \n \n \n \n \n \n \n \n   0.0 \n \n \n \n \n \n   (6.9) \n \n \n \n \n \n \n \n Adjusting items \n \n \n \n \n   -  \n \n \n \n \n \n   -  \n \n \n \n \n \n \n \n \n \n \n \n \n   0.2 \n \n \n \n \n \n   0.1 \n \n \n \n \n \n \n \n \n \n \n \n \n   (0.2) \n \n \n \n \n \n   (100.0) \n \n \n \n \n \n \n \n \n Administration costs per statutory accounts \n \n \n \n \n \n \n 24.0 \n \n \n \n \n \n \n 9.1 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 19.3 \n \n \n \n \n \n \n 10.7 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 4.7 \n \n \n \n \n \n \n 24.5 \n \n \n \n \n \n \n \n (*) See Note 5 of condensed financial statements \n \n \n The increase in administrative costs reflects investments made to strengthen the senior leadership team and key functions including supply chain and IT, and an accrual for FY22 bonus (there was no bonus cost in respect of FY21). There were also higher software maintenance/licence costs and the cost of resuming normal activities such as travel which were suppressed for periods during FY21. \n \n \n \n IFRS 16 Leases \n \n \n \n \n \n \n The Group continues to include information to enable stakeholders to see the effect of IFRS 16. The net impact of IFRS 16 was to increase the profit before tax in FY22 by £0.9m (FY21: £0.7m increase). \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n FY22 \n \n \n \n \n   \n \n \n \n \n £m \n \n \n \n \n \n FY21 \n \n \n (Restated *) \n \n \n £m \n \n \n \n \n \n \n Profit/(loss) before tax before IFRS 16 \n \n \n \n \n 9.3 \n \n \n \n \n (3.5) \n \n \n \n \n \n \n Profit/(loss) before tax post IFRS 16 \n \n \n \n \n 10.2 \n \n \n \n \n (2.8) \n \n \n \n \n \n \n Net impact on profit/(loss) \n \n \n \n \n \n 0.9 \n \n \n \n \n \n 0.7 \n \n \n \n \n \n \n \n \n \n (*) See Note 5 of condensed financial statements \n \n \n \n Net financing expense \n \n \n \n Net financing costs in the period were £5.2m (FY21: £5.5m), mostly relating to notional IFRS 16 lease interest. \n \n \n \n \n \n Actual interest payable was £0.7m, in relation to the Group's bank facilities (FY21: £0.6m), and comprised facility availability charges and the amortisation of the initial costs of establishing the bank facility in August 2020 (the cost of the new facility will be amortised from FY23). \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n FY22 \n \n \n £m \n \n \n \n \n \n \n FY21 \n \n \n £m \n \n \n \n \n \n \n \n Bank interest payable (including non-utilisation costs) \n \n \n \n \n 0.4 \n \n \n \n \n 0.3 \n \n \n \n \n \n \n Other interest payable (amortisation of facility set-up costs) \n \n \n \n \n 0.3 \n \n \n \n \n 0.3 \n \n \n \n \n \n \n IFRS 16 notional interest on lease liabilities \n \n \n \n \n \n 4.5 \n \n \n \n \n \n \n 4.9 \n \n \n \n \n \n \n \n Total finance expense \n \n \n \n \n \n 5.2 \n \n \n \n \n \n 5.5 \n \n \n \n \n \n \n   \n \n \n \n   \n \n \n \n \n Tax \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n FY22 \n \n \n £m \n \n \n \n \n FY21 \n \n \n £m \n \n \n \n \n \n \n Current tax expense \n \n \n \n \n 2.1 \n \n \n \n \n 0.0 \n \n \n \n \n \n \n Deferred tax credit \n \n \n \n \n (0.6) \n \n \n \n \n (0.5) \n \n \n \n \n \n \n \n Total tax expense/credit \n \n \n \n \n \n \n 1.4 \n \n \n \n \n \n (0.5) \n \n \n \n \n \n \n   \n \n \n The UK corporation tax rate for FY22 and FY21 was 19.0% . The UK corporation rate is due to increase from 19% to 25% on 1 April 2023, although we understand that this decision is now under review. \n \n \n Deferred tax assets and liabilities are recognised based on the corporation tax rate applicable when they are anticipated to unwind. Therefore, the deferred tax assets and liabilities have been largely recognised at a rate of 25.0% (FY21: 19.0%), which creates a deferred tax credit that reduced the Group's effective tax rate for FY22. \n \n \n The total tax expense was £1.4m (FY21: credit of £0.5m). The effective tax rate was 14.1% (FY21: 17.9% on the loss before tax). \n \n \n \n Earnings per share \n \n \n \n The basic EPS for the year was 14.0 pence (FY21: loss per share of 3.7 pence) and the diluted EPS was 13.7 pence (FY21: diluted loss per share of 3.7 pence). \n \n \n \n Capital expenditure \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n FY22 \n \n \n \n \n \n \n FY21 \n \n \n \n \n \n \n Variance \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n £m \n \n \n \n \n \n \n £m \n \n \n \n \n \n \n £m \n \n \n \n \n \n \n \n New stores and relocations \n \n \n \n \n   0.5 \n \n \n \n \n 0.6 \n \n \n \n \n \n (0.1) \n \n \n \n \n \n \n \n Store refits and maintenance \n \n \n \n \n 0.9 \n \n \n \n \n 0.7 \n \n \n \n \n \n 0.2 \n \n \n \n \n \n \n \n IT hardware and software \n \n \n \n \n 1.2 \n \n \n \n \n 0.6 \n \n \n \n \n \n 0.6 \n \n \n \n \n \n \n \n Online development expenditure \n \n \n \n \n 0.2 \n \n \n \n \n 0.5 \n \n \n \n \n \n (0.3) \n \n \n \n \n \n \n \n Other \n \n \n \n \n 0.2 \n \n \n \n \n 0.1 \n \n \n \n \n \n 0.1 \n \n \n \n \n \n \n \n \n Total capital expenditure \n \n \n \n \n \n \n 3.0 \n \n \n \n \n \n 2.4 \n \n \n \n \n \n 0.6 \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n Capital expenditure in the Period was £3.0m (FY21: £2.4m) and comprised \n \n \n · \n The cost of opening five new stores and relocating six others to new sites. Most of the new store capex was funded by landlord contributions. \n \n \n · \n Store maintenance including 16 refits. \n \n \n · \n Increased IT development expenditure, reflecting the implementation of the Group's strategy to improve its systems. \n \n \n FY23 capex is expected to be approximately £7.5m. \n \n \n \n   \n \n \n \n \n Inventory \n \n \n \n Stock levels were £29.4m at the end of FY22 (FY21: 29.1m), an increase of 1.0%. \n \n \n \n \n \n \n \n \n \n \n \n \n \n FY22 \n \n \n \n \n FY21 \n \n \n \n \n Variance \n \n \n \n \n Variance \n \n \n \n \n Provisions as % of gross stock \n \n \n \n \n \n \n \n \n \n \n \n \n \n £m \n \n \n \n \n £m \n \n \n \n \n £m \n \n \n \n \n % \n \n \n \n \n FY22 % \n \n \n \n \n FY21 % \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n Gross stock \n \n \n \n \n 29.8 \n \n \n \n \n 31.0 \n \n \n \n \n (1.2) \n \n \n \n \n (3.9%) \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 Shrinkage provision \n \n \n \n \n \n \n (1.9) \n \n \n \n \n \n \n (2.6) \n \n \n \n \n \n \n 0.7 \n \n \n \n \n \n \n (26.9%) \n \n \n \n \n \n \n 6.4% \n \n \n \n \n \n \n 8.4% \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n Obsolescence provision \n \n \n \n \n \n \n (1.3) \n \n \n \n \n \n \n (1.8) \n \n \n \n \n \n \n 0.5 \n \n \n \n \n \n \n (27.8%) \n \n \n \n \n \n \n 4.4% \n \n \n \n \n \n \n 5.8% \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n Total provisions \n \n \n \n \n (3.2) \n \n \n \n \n (4.4) \n \n \n \n \n 1.2 \n \n \n \n \n (27.3%) \n \n \n \n \n 10.7% \n \n \n \n \n 14.2% \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n Net stock on hand \n \n \n \n \n 26.6 \n \n \n \n \n 26.7 \n \n \n \n \n 0.1 \n \n \n \n \n 0.4% \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 \n \n \n Stock in transit \n \n \n \n \n 2.8 \n \n \n \n \n 2.5 \n \n \n \n \n 0.3 \n \n \n \n \n 13.9% \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 Stock per balance sheet \n \n \n \n \n \n \n 29.4 \n \n \n \n \n \n \n 29.1 \n \n \n \n \n \n \n 0.3 \n \n \n \n \n \n \n 1.0% \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 \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 Stock levels at the end of FY22 were as planned and were not affected as they had been at the previous two year ends by issues related to COVID-19. The level of stock provisions has reduced significantly since the end of FY21: \n \n \n · \n The provision for unrecognised stock loss (shrinkage) is lower as, unlike in FY21, it was possible during FY22 to complete store stock counts which enabled stock adjustments to be made during the year to recognise losses, requiring a lower unrecognised loss provision at the Period end. \n \n \n · \n The obsolescence provision is lower because a significant quantity of terminal stock was sold or written off during FY22 which resulted in a lower level requiring a provision at the end of the year. \n \n \n \n   \n \n \n \n \n Cash flow \n \n \n \n The table shows a summarised non IFRS 16 presentation cash flow; the financial statements include a statutory consolidated cash flow statement. The net cash inflow for the year was £15.5m (FY21: £7.9m). \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n FY22 \n \n \n \n \n \n \n FY21 \n \n \n \n \n \n \n Variance \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n £m \n \n \n \n \n \n \n £m \n \n \n \n \n \n \n £m \n \n \n \n \n \n \n \n Cash flow pre-working capital \n \n \n \n \n 19.3 \n \n \n \n \n 14.8 \n \n \n \n \n \n 4.5 \n \n \n \n \n \n \n \n Net movement in working capital \n \n \n \n \n 7.4 \n \n \n \n \n (1.2) \n \n \n \n \n 8.6 \n \n \n \n \n \n \n Capex \n \n \n \n \n (3.0) \n \n \n \n \n (2.4) \n \n \n \n \n \n (0.6) \n \n \n \n \n \n \n \n Tax paid \n \n \n \n \n (0.2) \n \n \n \n \n 0.0 \n \n \n \n \n \n (0.2) \n \n \n \n \n \n \n \n Interest and financing costs \n \n \n \n \n (0.3) \n \n \n \n \n (0.9) \n \n \n \n \n \n 0.6 \n \n \n \n \n \n \n \n Dividends \n \n \n \n \n 0.0 \n \n \n \n \n 0.0 \n \n \n \n \n \n 0.0 \n \n \n \n \n \n \n \n Cash flow before loan movements \n \n \n \n \n 23.2 \n \n \n \n \n 10.3 \n \n \n \n \n \n 12.9 \n \n \n \n \n \n \n \n Drawdown/(repayment) of CLBILS loan \n \n \n \n \n (7.5) \n \n \n \n \n 7.5 \n \n \n \n \n \n (15.0) \n \n \n \n \n \n \n \n Drawdown/(repayment) of RCF \n \n \n \n \n 0.0 \n \n \n \n \n (10.0) \n \n \n \n \n \n 10.0 \n \n \n \n \n \n \n \n Exchange rate movements \n \n \n \n \n (0.1) \n \n \n \n \n 0.2 \n \n \n \n \n \n (0.3) \n \n \n \n \n \n \n \n \n Net increase in cash  and cash equivalents \n \n \n \n \n \n \n 15.5 \n \n \n \n \n \n \n 7.9 \n \n \n \n \n \n \n 7.7 \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 Opening net cash balance excluding IAS 17 leases \n \n \n \n \n \n \n 0.8 \n \n \n \n \n \n \n (7.1) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Closing net cash balance excluding IAS 17 leases \n \n \n \n \n \n \n 16.3 \n \n \n \n \n \n \n 0.8 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n · \n The cash flow pre working capital shown in the table deducts IFRS 16 notional lease and interest payments from the statutory operating cash flow before changes in working capital, and adds back the £7.5m CLBILS loan repayment. \n \n \n · \n The tax paid in FY22 was lower than we would expect to pay in relation to normal years, due to previous low levels of taxable profits. \n \n \n · \n During the year the Group repaid its £7.5m CLBILS term loan.  \n \n \n The year end cash balance was higher than expected as it included favourable working capital timing differences, most of which have unwound in FY23.  The cash position provides the Group with a high degree of available liquidity and comfortably allows for the payment of the final dividend the Board will recommend at the AGM. \n \n \n \n   \n \n \n \n \n Bank facilities and financial position \n \n \n \n The financial position of the Group continued to improve during the period, at the end of which, there were no borrowings. \n \n \n At the period end, the Group held net cash (excluding lease liabilities) of £16.3m (FY21: £0.8m) resulting in headroom of approximately £35.0m within its previous bank facility limit. \n \n \n The Group's bank facilities were renewed shortly after the period end and now comprise a larger revolving credit facility ('RCF') of £30.0m which expires on 30 November 2025. The facility includes standard financial covenants in relation to leverage and fixed charge cover. \n \n \n \n Dividend \n \n \n \n In light of the strong performance in FY22, the robust balance sheet, and its confidence in the future prospects of the business despite the short-term concerns as regards the external economic environment, the Board will be recommending a 2.4 pence per share dividend in respect of FY22, which will be subject to shareholder approval at our AGM on 27 October 2022. If approved by shareholders, the dividend will be paid on 24 November 2022 to shareholders on the register on the record date of 4 November 2022. \n \n \n   \n \n \n We hope to maintain the cadence of twice yearly dividend payments thereafter; whilst the consumer market remains especially volatile, we will review future payment levels based on conditions at the time, but intend to resume a progressive dividend policy in due course once conditions stabilise. \n \n \n   \n \n \n   \n \n \n Steve Alldridge \n \n \n Chief Financial Officer \n \n \n 23 September 2022 \n \n \n   \n \n \n   \n \n \n \n Consolidated income statement \n \n \n \n For the period ended 1 May 2022 \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 52 weeks to \n \n 1 \n \n May 2022 \n \n \n \n \n \n \n \n \n \n \n \n \n \n 53 weeks to 2 May 2021 \n \n \n (Restated - Note 3, Note 5) \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n Note \n \n \n \n \n \n \n Result before \n \n \n  Adjusting items \n \n \n £000 \n \n \n \n \n \n \n Adjusting \n \n \n items \n \n \n £000 \n \n \n \n \n \n \n Total \n \n \n £000 \n \n \n \n \n \n \n   \n \n \n \n \n \n \n Result before \n \n \n  Adjusting items \n \n \n £000 \n \n \n \n \n \n \n Adjusting \n \n \n items \n \n \n £000 \n \n \n \n \n \n \n Total \n \n \n £000 \n \n \n \n \n   \n \n \n \n \n \n Revenue \n \n \n \n \n \n \n \n \n \n \n \n \n 264,630 \n \n \n \n \n \n \n - \n \n \n \n \n \n \n 264,630 \n \n \n \n \n \n \n \n \n \n \n \n \n 180,680 \n \n \n \n \n - \n \n \n \n \n 180,680 \n \n \n \n \n \n \n \n Cost of sales \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n (216,082) \n \n \n \n \n \n \n \n \n 29 \n \n \n \n \n \n \n \n \n (216,053) \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n (170,342) \n \n \n \n \n \n \n 975 \n \n \n \n \n \n \n \n (169,367) \n \n \n \n \n \n \n \n \n Gross profit \n \n \n \n \n \n \n \n \n \n \n \n \n 48,548 \n \n \n \n \n \n \n 29 \n \n \n \n \n \n \n 48,577 \n \n \n \n \n \n \n \n \n \n \n \n \n 10,338 \n \n \n \n \n 975 \n \n \n \n \n 11,313 \n \n \n \n \n \n \n Other operating income \n \n \n \n \n 2 \n \n \n \n \n \n (111) \n \n \n \n \n \n \n - \n \n \n \n \n \n \n (111) \n \n \n \n \n \n \n \n \n \n \n \n \n 17,081 \n \n \n \n \n - \n \n \n \n \n 17,081 \n \n \n \n \n \n \n Distribution expenses \n \n \n \n \n \n \n \n \n \n \n \n \n (9,128) \n \n \n \n \n \n \n - \n \n \n \n \n \n \n (9,128) \n \n \n \n \n \n \n \n \n \n \n \n \n (6,440) \n \n \n \n \n - \n \n \n \n \n (6,440) \n \n \n \n \n \n \n \n Administrative expenses \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n (24,004) \n \n \n \n \n \n \n \n \n - \n \n \n \n \n \n \n \n \n (24,004) \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n (19,088) \n \n \n \n \n \n \n (199) \n \n \n \n \n \n \n (19,287) \n \n \n \n \n \n \n \n \n Operating profit \n \n \n \n \n \n \n 5 \n \n \n \n \n \n \n \n 15,305 \n \n \n \n \n \n \n \n \n 29 \n \n \n \n \n \n \n \n \n 15,334 \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 1,891 \n \n \n \n \n \n \n 776 \n \n \n \n \n \n \n 2,667 \n \n \n \n \n \n \n \n Finance income \n \n \n \n \n \n \n \n \n \n \n \n \n 16 \n \n \n \n \n \n \n - \n \n \n \n \n \n \n 16 \n \n \n \n \n \n \n \n \n \n \n \n \n 18 \n \n \n \n \n - \n \n \n \n \n 18 \n \n \n \n \n \n \n \n Finance expenses \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n (5,192) \n \n \n \n \n \n \n \n \n - \n \n \n \n \n \n \n \n \n (5,192) \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n (5,486) \n \n \n \n \n \n \n - \n \n \n \n \n \n \n (5,486) \n \n \n \n \n \n \n \n \n Net financing expense \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n (5,176) \n \n \n \n \n \n \n \n \n - \n \n \n \n \n \n \n \n \n (5,176) \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n (5,468) \n \n \n \n \n \n \n - \n \n \n \n \n \n \n (5,468) \n \n \n \n \n \n \n \n Profit/(loss) before tax \n \n \n \n \n \n \n \n \n \n \n \n \n 10,129 \n \n \n \n \n \n \n 29 \n \n \n \n \n \n \n 10,158 \n \n \n \n \n \n \n \n \n \n \n \n \n (3,577) \n \n \n \n \n 776 \n \n \n \n \n (2,801) \n \n \n \n \n \n \n \n Taxation \n \n \n \n \n \n \n 6 \n \n \n \n \n \n \n \n (1,436) \n \n \n \n \n \n \n \n \n - \n \n \n \n \n \n \n \n \n (1,436) \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 502 \n \n \n \n \n \n \n - \n \n \n \n \n \n \n 502 \n \n \n \n \n \n \n \n \n Profit/(loss) for the period \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n 8,693 \n \n \n \n \n \n \n \n \n 29 \n \n \n \n \n \n \n \n \n 8,722 \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n (3,075) \n \n \n \n \n \n \n 776 \n \n \n \n \n \n \n (2,299) \n \n \n \n \n \n \n \n \n Profit/(loss) before tax and IFRS 16 \n \n \n \n \n \n \n 3 \n \n \n \n \n \n \n \n 9,525 \n \n \n \n \n \n \n \n \n (241) \n \n \n \n \n \n \n \n \n 9,284 \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n (3,395) \n \n \n \n \n \n \n (94) \n \n \n \n \n \n \n (3,489) \n \n \n \n \n \n \n \n \n Basic earnings per share (pence) \n \n \n \n \n \n \n 8 \n \n \n \n \n \n \n \n 13.9 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n 14.0 \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n (4.9) \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n (3.7) \n \n \n \n \n \n \n \n \n Diluted earnings per share (pence) \n \n \n \n \n \n \n 8 \n \n \n \n \n \n \n \n 13.7 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n 13.7 \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n (4.9) \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n (3.7) \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 for the Period is attributable to equity holders of the Parent. \n \n \n   \n \n \n   \n \n \n   \n \n \n \n Consolidated statement of comprehensive income \n \n \n \n For the period ended 1 May 2022 \n \n \n   \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n FY22 \n \n \n £000 \n \n \n \n \n \n \n FY21 \n \n \n £000 \n \n \n \n \n \n \n \n Profit/(loss) for the year \n \n \n \n \n 8,722 \n \n \n \n \n (2,299) \n \n \n \n \n \n \n Items that may be recycled subsequently into profit and loss \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash flow hedges - changes in fair value \n \n \n \n \n \n 4,181 \n \n \n \n \n \n (2,865) \n \n \n \n \n \n \n Cash flow hedges - reclassified to profit and loss \n \n \n \n \n \n (321) \n \n \n \n \n \n 252 \n \n \n \n \n \n \n Cost of hedging reserve - changes in fair value \n \n \n \n \n \n (83) \n \n \n \n \n \n (90) \n \n \n \n \n \n \n Cost of hedging reserve - reclassified to profit and loss \n \n \n \n \n \n 94 \n \n \n \n \n \n (160) \n \n \n \n \n \n \n \n Tax relating to components of other comprehensive income \n \n \n \n \n \n \n \n - \n \n \n \n \n \n \n \n 536 \n \n \n \n \n \n \n \n \n Other comprehensive income/(expense) for the period, net of income tax \n \n \n \n \n \n \n \n 3,871 \n \n \n \n \n \n \n \n (2,327) \n \n \n \n \n \n \n \n \n Total comprehensive income/(expense) for the period \n \n \n \n \n \n \n \n 12,593 \n \n \n \n \n \n \n \n (4,626) \n \n \n \n \n \n \n \n   \n \n \n \n Consolidated statement of financial position \n \n \n \n As at 1 May 2022 \n \n \n   \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n Note \n \n \n \n \n \n \n FY22 \n \n \n £000 \n \n \n \n \n \n \n FY21 \n \n \n (Restated - \n \n \n  Note 10) \n \n \n £000 \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 \n \n \n \n \n \n \n \n \n \n \n \n \n \n Intangible assets \n \n \n \n \n 9 \n \n \n \n \n \n 2,672 \n \n \n \n \n \n 2,463 \n \n \n \n \n \n \n Property, plant and equipment \n \n \n \n \n 10 \n \n \n \n \n \n 13,970 \n \n \n \n \n \n 17,524 \n \n \n \n \n \n \n Right-of-use assets \n \n \n \n \n 10, 11 \n \n \n \n \n \n 94,351 \n \n \n \n \n \n 112,542 \n \n \n \n \n \n \n \n Deferred tax assets \n \n \n \n \n \n \n 12 \n \n \n \n \n \n \n \n 3,477 \n \n \n \n \n \n \n \n 2,852 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n 114,470 \n \n \n \n \n \n \n \n 135,381 \n \n \n \n \n \n \n \n Current assets \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 Inventories  \n \n \n \n \n 13 \n \n \n \n \n 29,387 \n \n \n \n \n  29,132 \n \n \n \n \n \n \n Trade and other receivables \n \n \n \n \n 14 \n \n \n \n \n 8,427 \n \n \n \n \n  6,913 \n \n \n \n \n \n \n Derivative financial asset \n \n \n \n \n \n \n \n \n \n \n \n 2,393 \n \n \n \n \n  -  \n \n \n \n \n \n \n Current tax asset \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n \n \n  704 \n \n \n \n \n \n \n \n Cash and cash equivalents \n \n \n \n \n \n \n 15 \n \n \n \n \n \n \n 16,280 \n \n \n \n \n \n \n 8,315 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 56,487 \n \n \n \n \n \n \n 45,064 \n \n \n \n \n \n \n \n \n Total assets \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 170,957 \n \n \n \n \n \n \n 180,445 \n \n \n \n \n \n \n \n Current liabilities \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 Interest-bearing loans and borrowings \n \n \n \n \n 16 \n \n \n \n \n - \n \n \n \n \n 7,095 \n \n \n \n \n \n \n Lease liabilities \n \n \n \n \n 11, 16 \n \n \n \n \n 25,434 \n \n \n \n \n 31,552 \n \n \n \n \n \n \n Trade and other payables \n \n \n \n \n 17 \n \n \n \n \n 35,958 \n \n \n \n \n 26,188 \n \n \n \n \n \n \n Provisions  \n \n \n \n \n \n \n \n \n \n \n \n 204 \n \n \n \n \n 718 \n \n \n \n \n \n \n Derivative financial liability  \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n \n \n 1,649 \n \n \n \n \n \n \n \n Current tax liability \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 1,115 \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 62,711 \n \n \n \n \n \n \n 67,202 \n \n \n \n \n \n \n \n Non-current liabilities \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 Lease liabilities \n \n \n \n \n 11, 16 \n \n \n \n \n 85,702 \n \n \n \n \n 104,362 \n \n \n \n \n \n \n Provisions \n \n \n \n \n \n \n \n \n \n \n \n 913 \n \n \n \n \n -  \n \n \n \n \n \n \n \n Derivative financial liability \n \n \n \n \n \n \n   \n \n \n \n \n \n \n - \n \n \n \n \n \n \n 53 \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 86,615 \n \n \n \n \n \n \n 104,415 \n \n \n \n \n \n \n \n \n Total liabilities \n \n \n \n \n \n \n   \n \n \n \n \n \n \n 149,326 \n \n \n \n \n \n \n 171,617 \n \n \n \n \n \n \n \n \n Net assets \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n 21,631 \n \n \n \n \n \n \n \n 8,828 \n \n \n \n \n \n \n \n Equity attributable to equity holders of the Parent \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 capital \n \n \n \n \n \n \n \n \n \n \n \n \n 625 \n \n \n \n \n \n 625 \n \n \n \n \n \n \n Share premium \n \n \n \n \n \n \n \n \n \n \n \n \n 28,322 \n \n \n \n \n \n 28,322 \n \n \n \n \n \n \n Merger reserve \n \n \n \n \n \n \n \n \n \n \n \n \n (54) \n \n \n \n \n \n (54) \n \n \n \n \n \n \n Share-based payment reserve \n \n \n \n \n \n \n \n \n \n \n \n \n 2,252 \n \n \n \n \n \n 1,601 \n \n \n \n \n \n \n Hedging reserve \n \n \n \n \n \n \n \n \n \n \n \n \n 2,227 \n \n \n \n \n \n (1,203) \n \n \n \n \n \n \n \n Retained earnings \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n (11,741) \n \n \n \n \n \n \n \n (20,463) \n \n \n \n \n \n \n \n \n Total equity \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n 21,631 \n \n \n \n \n \n \n \n 8,828 \n \n \n \n \n \n \n \n   \n \n \n \n Consolidated statement of changes in equity \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Attributable to equity holders of the Company \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n Share \n \n \n capital \n \n \n £000 \n \n \n \n \n \n \n Share \n \n \n premium \n \n \n £000 \n \n \n \n \n \n \n Merger \n \n \n reserve \n \n \n £000 \n \n \n \n \n \n \n Share-based \n \n \n payment \n \n \n reserve \n \n \n £000 \n \n \n \n \n \n \n Hedging \n \n \n reserve 1 \n \n \n £000 \n \n \n \n \n \n \n Retained \n \n \n earnings \n \n \n £000 \n \n \n \n \n \n \n Total \n \n \n equity \n \n \n £000 \n \n \n \n \n \n \n \n \n Balance at 26 April 2020 \n \n \n \n \n \n \n 625 \n \n \n \n \n \n \n 28,322 \n \n \n \n \n \n \n (54) \n \n \n \n \n \n \n 1,506 \n \n \n \n \n \n \n 1,171 \n \n \n \n \n \n \n (18,164) \n \n \n \n \n \n \n 13,406 \n \n \n \n \n \n \n \n Total comprehensive income for the period \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 Loss for the period \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 (2,299) \n \n \n \n \n (2,299) \n \n \n \n \n \n \n \n Other comprehensive income/(expense) \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 14 \n \n \n \n \n \n \n (2,341) \n \n \n \n \n \n \n - \n \n \n \n \n \n \n (2,327) \n \n \n \n \n \n \n \n Total comprehensive income/(expense) for the period \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 14 \n \n \n \n \n (2,341) \n \n \n \n \n (2,299) \n \n \n \n \n (4,626) \n \n \n \n \n \n \n \n Hedging gains and losses and costs of hedging transferred to the cost of inventory \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 (33) \n \n \n \n \n \n \n - \n \n \n \n \n \n \n (33) \n \n \n \n \n \n \n \n Transactions with owners of the Company \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 Share-based payment charges \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 81 \n \n \n \n \n - \n \n \n \n \n - \n \n \n \n \n 81 \n \n \n \n \n \n \n \n Total transactions with owners \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 81 \n \n \n \n \n \n \n - \n \n \n \n \n \n \n - \n \n \n \n \n \n \n 81 \n \n \n \n \n \n \n \n \n Balance at 2 May 2021 \n \n \n \n \n \n \n 625 \n \n \n \n \n \n \n 28,322 \n \n \n \n \n \n \n (54) \n \n \n \n \n \n \n 1,601 \n \n \n \n \n \n \n (1,203) \n \n \n \n \n \n \n (20,463) \n \n \n \n \n \n \n 8,828 \n \n \n \n \n \n \n \n Total comprehensive income for the period \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 Profit for the period \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 8,722 \n \n \n \n \n \n \n 8,722 \n \n \n \n \n \n \n \n \n Other comprehensive income \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 3,871 \n \n \n \n \n \n \n \n \n - \n \n \n \n \n \n \n \n \n 3,871 \n \n \n \n \n \n \n \n \n Total comprehensive income for the period \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 3,871 \n \n \n \n \n \n \n 8,722 \n \n \n \n \n \n \n 12,593 \n \n \n \n \n \n \n \n \n Hedging gains and losses and costs of hedging transferred to the cost of inventory \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 (441) \n \n \n \n \n \n \n \n \n - \n \n \n \n \n \n \n \n \n (441) \n \n \n \n \n \n \n \n \n Transactions with owners of the Company \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 Share-based payment charges \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 651 \n \n \n \n \n \n \n - \n \n \n \n \n \n \n - \n \n \n \n \n \n \n 651 \n \n \n \n \n \n \n \n \n Total transactions with owners \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 651 \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 651 \n \n \n \n \n \n \n \n \n \n Balance at \n 1 \n May 2022 \n \n \n \n \n \n \n \n 625 \n \n \n \n \n \n \n \n \n 28,322 \n \n \n \n \n \n \n \n \n (54) \n \n \n \n \n \n \n \n \n 2,252 \n \n \n \n \n \n \n \n \n 2,227 \n \n \n \n \n \n \n \n \n (11,741) \n \n \n \n \n \n \n \n \n 21,631 \n \n \n \n \n \n \n \n \n   \n \n \n 1.  Hedging reserve includes £175,956 (FY21: £155,124) in relation to changes in forward points which are recognised in other comprehensive income and accumulated as a cost of hedging within the hedging reserve. \n \n \n   \n \n \n   \n \n \n \n Consolidated cash flow statement \n \n \n \n For the period ended 1 May 2022 \n \n \n   \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n FY22 \n \n \n £000 \n \n \n \n \n \n \n FY21 \n \n \n (Restated - \n \n \n Note 10) \n \n \n £000 \n \n \n \n \n \n \n \n Profit/(loss) for the year (including Adjusting items) \n \n \n \n \n \n 8,722 \n \n \n \n \n \n (2,299) \n \n \n \n \n \n \n Adjustments for: \n \n \n \n \n \n   \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Depreciation of property, plant and equipment \n \n \n \n \n \n 5,005 \n \n \n \n \n \n 5,187 \n \n \n \n \n \n \n Impairment of property, plant and equipment \n \n \n \n \n \n 416 \n \n \n \n \n \n 957 \n \n \n \n \n \n \n Reversal of impairment of property, plant and equipment \n \n \n \n \n \n (175) \n \n \n \n \n \n (1,000) \n \n \n \n \n \n \n Depreciation of right-of-use assets \n \n \n \n \n \n 20,029 \n \n \n \n \n \n 23,311 \n \n \n \n \n \n \n Impairment of right-of-use assets \n \n \n \n \n \n 710 \n \n \n \n \n \n 4 \n \n \n \n \n \n \n Reversal of impairment of right-of-use assets \n \n \n \n \n \n (980) \n \n \n \n \n \n (874) \n \n \n \n \n \n \n Amortisation of intangible assets \n \n \n \n \n \n 806 \n \n \n \n \n \n 947 \n \n \n \n \n \n \n Derivative exchange gain \n \n \n \n \n \n 289 \n \n \n \n \n \n (444) \n \n \n \n \n \n \n Financial income \n \n \n \n \n \n (16) \n \n \n \n \n \n (18) \n \n \n \n \n \n \n Financial expense \n \n \n \n \n \n 692 \n \n \n \n \n \n 617 \n \n \n \n \n \n \n Interest on lease liabilities \n \n \n \n \n \n 4,500 \n \n \n \n \n \n 4,869 \n \n \n \n \n \n \n Loss on disposal of property, plant and equipment \n \n \n \n \n \n 244 \n \n \n \n \n \n 262 \n \n \n \n \n \n \n Loss on disposal of right-of-use assets \n \n \n \n \n \n 2,066 \n \n \n \n \n \n 373 \n \n \n \n \n \n \n Profit on disposal of lease liability \n \n \n \n \n \n (2,340) \n \n \n \n \n \n (464) \n \n \n \n \n \n \n Loss on disposal of intangible assets \n \n \n \n \n \n - \n \n \n \n \n \n 311 \n \n \n \n \n \n \n Share-based payment charges \n \n \n \n \n \n 651 \n \n \n \n \n \n 81 \n \n \n \n \n \n \n \n Taxation \n \n \n \n \n \n \n \n 1,436 \n \n \n \n \n \n \n \n (502) \n \n \n \n \n \n \n \n Operating cash flows before changes in working capital \n \n \n \n \n \n 42,055 \n \n \n \n \n \n 31,318 \n \n \n \n \n \n \n (Increase)/decrease in trade and other receivables \n \n \n \n \n \n (1,514) \n \n \n \n \n \n 1,217 \n \n \n \n \n \n \n Increase in inventories \n \n \n \n \n \n (892) \n \n \n \n \n \n (2,284) \n \n \n \n \n \n \n Increase in trade and other payables \n \n \n \n \n \n 9,336 \n \n \n \n \n \n 167 \n \n \n \n \n \n \n \n Increase/(decrease) in provisions \n \n \n \n \n \n \n \n 399 \n \n \n \n \n \n \n \n (261) \n \n \n \n \n \n \n \n Cash flows from operating activities \n \n \n \n \n \n 49,384 \n \n \n \n \n \n 30,157 \n \n \n \n \n \n \n \n Corporation tax paid \n \n \n \n \n \n \n \n (222) \n \n \n \n \n \n \n \n (30) \n \n \n \n \n \n \n \n \n Net cash inflow from operating activities \n \n \n \n \n \n \n \n 49,162 \n \n \n \n \n \n \n \n 30,127 \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 \n \n \n \n \n \n \n Acquisition of property, plant and equipment \n \n \n \n \n \n (1,936) \n \n \n \n \n \n (1,869) \n \n \n \n \n \n \n Acquisition of intangible assets \n \n \n \n \n \n (1,015) \n \n \n \n \n \n (526) \n \n \n \n \n \n \n \n Interest received \n \n \n \n \n \n \n \n 16 \n \n \n \n \n \n \n \n 18 \n \n \n \n \n \n \n \n \n Net cash outflow from investing activities \n \n \n \n \n \n \n \n (2,935) \n \n \n \n \n \n \n \n (2,377) \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 \n \n \n \n \n \n \n Payment of lease liabilities (capital) \n \n \n \n \n \n (25,969) \n \n \n \n \n \n (14,327) \n \n \n \n \n \n \n Payment of lease liabilities (interest) \n \n \n \n \n \n (4,500) \n \n \n \n \n \n (4,869) \n \n \n \n \n \n \n Payment of RCF fees \n \n \n \n \n \n - \n \n \n \n \n \n (619) \n \n \n \n \n \n \n Other interest paid \n \n \n \n \n \n (157) \n \n \n \n \n \n (279) \n \n \n \n \n \n \n Repayment of bank borrowings \n \n \n \n \n \n (7,500) \n \n \n \n \n \n (10,000) \n \n \n \n \n \n \n \n Issue of bank loan \n \n \n \n \n \n \n \n - \n \n \n \n \n \n \n \n 7,500 \n \n \n \n \n \n \n \n \n Net cash outflow from financing activities \n \n \...

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