Final Results

RNS Number : 4629D

Unbound Group PLC

03 March 2022

Unbound Group plc

Unaudited results for the 16 months ended 31 January 2022

Unbound Group plc ("Unbound Group" or the "Company") is an online multi-brand retail platform building on its foundational business, Hotter Shoes, to provide a broader range of own-brand and third-party products and services that enhance the active lifestyles of its targeted 55 plus demographic.

Unbound Group plc was named Electra Private Equity PLC until January 2022 and was an investment trust until 1 February 2022 when it was admitted to trading on AIM. These financial statements reflect the final position of the Company as an investment trust as at 31 January 2022. Further to the Company's trading update of 17 February 2022, it expects to announce the full year audited financials for its Hotter Shoes trading subsidiary in May 2022.

Preliminary Results

· Results to 31 January 2022 reflect final position as an investment trust prior to admission to trading on AIM on 1 February 2022

· Reported net asset value of £23.1 million reflects closing market capitalisation on 31 January 2022

Strategic Highlights

· The Company's shares were admitted to trading on AIM on 1 February 2022, completing the transition to Unbound Group

· Unbound Group is an online multi-brand retail platform focused on enhancing the active lifestyle of the 55 plus consumer through the provision of products and services that allow them to do more of what they love

· Unbound Group, through Hotter Shoes, already sells to over 29% of the female 55 plus population through its direct-to-consumer channels

· Addition of carefully selected products and services, in addition to Hotter Shoes, targeted to increase customer transaction frequency and share of wallet

· Progress towards launch of Unbound Group partner brands on the Unbound Group digital platform in summer 2022 is on track

· Planned realisation of remaining non-core assets carried at £3.7 million to focus resource on accelerated development of the Unbound partnership and product strategy

· Capital Markets Day planned for May 2022 to give a detailed update on Unbound Group partnerships progress

Hotter Shoes Update

· As announced on 17 February 2022, Unbound Group's foundational trading business, Hotter Shoes, reported unaudited results for the year to January 2022 (FY22) in line with expectation - with revenue of approximately £51.9 million (FY21: £44.5 million) and profit before tax and exceptional items (on an IFRS basis) improved by over £6.0 million from FY21 to return to a small positive

· Hotter's trading in FY23 to date in line with expectations

· Partnership with M&S also announced on 17 February 2022 builds on recently established e-commerce partnerships with John Lewis, Next and The Very Group

Unbound Group Balance Sheet on Admission

· Group banking net debt after all admission related costs of £8.7 million

· Non-core assets held for disposal valued at additional £3.7 million as at 31 January 2022

· Banking facilities (Hotter) extended to December 2024 pre admission

Neil Johnson, Chairman of Unbound Group, commented:

"I am pleased to present our Report and Accounts with the financial statements presented as an Investment Trust for the final time.

I am delighted with the progress made by the Unbound Group team both at Hotter and in developing the new multi-brand Unbound Group platform and partnerships. The Board looks forward with confidence and excitement to the future development of the Group."

ENQUIRIES

Unbound Group plc

Dan Lampard

020 3874 8300

Stifel Nicolaus Europe Limited (Nomad and corporate broker)

Ash Burman, Nick Adams, Stewart Wallace, Francis North

020 7710 7600

Vico Partners

Sofia Newitt

020 3957 5045

The financial information set out in the announcement does not constitute the company's statutory accounts for the period ended 31 January 2022 or the year ended 30 September 2020. The financial information for the year ended 30 September 2020 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The auditors reported on those accounts: their report was unqualified and did not contain a statement under s498(2) or (3) of the Companies Act 2006. Their report did contain an emphasis of matter in respect of the fact that the financial statements for the year ended 30 September 2020 were prepared on a basis other than that of a going concern. The circumstances of the Group and the Company have since changed and the financial information set out in this announcement has been prepared on the going concern basis. The audit of the statutory accounts for the year ended 31 January 2022 is not yet complete. These accounts will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the company's annual general meeting.

1. Chairman's Statement

"After navigating not only the impact of the Covid-19 pandemic but also the challenges of transitioning to Unbound Group and its AIM listing, I am pleased to present our Report and Accounts with the financial statements presented as an Investment Trust for the final time.

I am delighted to present my first statement as the Chairman of Unbound Group plc ("Unbound", the "Company" or the "Group"), having previously reported as Chairman of the Company under its former name, Electra Private Equity PLC ("Electra"), until late January 2022.

Throughout the 16-month period ended 31 January 2022, the period reviewed and reflected in this Annual Report and Financial Statements, the Company traded as a private equity investment trust. As such the financial statements have been prepared under IFRS 10 Consolidated Financial Statements on a basis appropriate for an investment company and consistent with the basis of preparation of accounts for prior reporting periods. The Company's financial statements for future reporting period will be prepared under IFRS 10 without the exception from consolidation requirements for investment entities.

On 1 February 2022, the Company relinquished its listing on the FTSE Main Market and was admitted to the Alternative Investment Market ("AIM") of the London Stock Exchange as Unbound Group plc. The admission to AIM marked the Company ceasing to be an investment trust and investment company, and the start of it being the parent company of the Unbound Group, a consolidated trading group. As such, in future periods the financial statements of the Group will be prepared on the basis of consolidated accounts for a trading group. In addition, the Company expects to announce the full year audited financials for its Hotter Shoes trading subsidiary which will be comparable to the historic financial information contained in the Company's AIM admission document in May 2022.

Given the situation of the Company as at 31 January 2022, the Directors have valued the assets of the Company on the basis of its market capitalisation as at that date. The value attributed to Hotter Shoes ("Hotter") therefore represents the market capitalisation of the Company on 31 January 2022 less the other net assets of the Company at that date. As such it does not represent the Directors' opinion of the future value of Hotter.

The table below presents movement of the Company's Net Asset Value ("NAV") per share during the 16 months to 31 January 2022.

NAV per share	p
As at 1 October 2020	353.4
Capital gains and income	131.1
Expenses and other	(29.2)*
Dividend in specie (demerger of Hostmore)	(400.7)
As at 31 January 2022	54.6**

*Expenses and other costs represent all operating and transactional costs met by the Company during the 16-month period to 31 January 2022.

**Closing market price on 31 January 2022.

Section 5 of this Annual Report (Transformation from Electra Private Equity PLC to Unbound Group plc) deals in more detail with the period to 31 January 2022. It also deals with the impact of transitioning from investment company reporting to consolidated group reporting, and the re-presentation of the "opening" balance sheet of Unbound Group plc as at 31 January 2022 on a consolidated group basis. It should be noted that these financial statements relate to Unbound Group plc in its investment company format as at the period end prior to its transformation on 1 February 2022. The performance of Hotter in the period to the end of January 2022 referenced in this document is unaudited.

The transition to Unbound marked the successful conclusion of the value realisation strategy implemented by the Company as Electra between 2016 and January 2022. This strategy was first implemented when the market capitalisation stood at approximately £1.1 billion and has resulted in the realisation of over £2.3 billion of value to shareholders between 2016 and late 2021 ahead of the demerger of Hostmore plc ("Hostmore"). With the demerger of Hostmore in November 2021 and ultimately the transformation to Unbound in February 2022, the final stage of Electra's strategy has resulted in shareholders owning two independent and well capitalised businesses with strong management and deliverable strategies for growth. Electra shareholders have had the opportunity to realise final value in the short term or to continue to hold Hostmore and Unbound separately as they implement their strategies.

In concluding that the final transition into Unbound represented a significant value creation opportunity for shareholders, the Board took account of the successful turnaround of Hotter into a growing digitally focused business that serves almost 30% of the female population of the UK over the age of 55. This consumer demographic is not only growing faster than any other, but has the most rapidly increasing digital literacy, an increasingly positive and active outlook and high disposable wealth and is inherently loyal once trust is established. The Hotter brand already enjoys extremely high loyalty and trust ratings with an average transaction frequency of 1.6x per annum per customer, which is already strong for a footwear business. By adding other trusted brands that provide products and services to the same demographic and support our consumers' active lifestyles and wellbeing, we believe that we can build a strong consumer proposition with significantly increased transaction frequency.

The strategy outlined above and considered in more detail in the Chief Executive's Business and Strategy Review on pages 6 to 19 is one focused on growth. As such, the Board does not anticipate implementing a policy of paying dividends in the short to medium term.

In implementing the Unbound strategy, it was appropriate that our Board should evolve from one established to develop and implement the Electra strategy to one focused on the demands and opportunities of Unbound. As such, as indicated in my statement for the Second Interim Report, David Lis and Stephen Welker both stepped down from the Board in November 2021, replaced by Baroness Kate Rock and Suki Thompson. I would again thank David and Stephen for their considerable contribution to the success of the Electra strategy over recent years and look forward to working with Kate and Suki in the years ahead.

On admission to AIM, Ian Watson and Dan Lampard, respectively Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") of Hotter Shoes, assumed the same roles in the wider Unbound Group. At the same time, Gavin Manson, Chief Financial and Operating Officer ("CFOO") of Electra, and I both stepped back from our Executive roles, with Gavin becoming a Non-Executive Director and me becoming Non-Executive Chairman. Finally, having seen the Company through its transition to Unbound, Linda Wilding will step down from the Board with effect from the AGM on 12 May 2022. The Board is delighted that Gavin Manson will succeed her as Audit Committee Chair. Gavin's long experience as a Chartered Accountant and Chief Financial Officer combined with his knowledge of the Unbound business leave him ideally suited to the role.

After what has been a challenging period, navigating not only the impact of the Covid-19 pandemic but also the challenges of transition to Unbound, the continuing impact of the pandemic and its AIM listing, the Board looks forward with confidence and excitement to the future development of the Group.

Neil Johnson

Chairman

2 March 2022

2. Chief Executive's Business and Strategy Review

2.1. Hotter Shoes as the Foundation of Unbound Group

Currently Hotter is the sole trading business within the Unbound Group and it will form the foundation on which we develop other trading activities of the Group this year and beyond.

Hotter provides footwear with an uncompromising focus on comfort and fit, delivered through the use of differentiated technology, to consumers in the UK and US predominantly in the 55 plus demographic. Founded in 1959, originally as a slipper manufacturer, Hotter today offers a wide range of men's and predominantly women's footwear with a focus on comfort provided through utilising technology in design and manufacture.

Having undergone a significant transformation which started in 2019, the Hotter brand has pivoted towards digital channels whilst maintaining a right-sized and profitable store portfolio. The result is a digitally led business which is agile, flexible and scalable, yielding strong returns from its leading online business.

Hotter's mission is to provide footwear that enhances its consumers' lives by allowing them to do more of what they enjoy. Hotter is now a digital first brand that serves over 29% of the UK's 55 plus female population direct to their home. In the year to January 2022, Hotter's UK direct to consumer sales grew by 16% on the corresponding period in 2020.

Following the implementation of a technology infrastructure to support its developing e-commerce ambitions, over recent months Hotter has established digital partnerships with a number of online retailers such as Next, John Lewis, The Very Group and, as recently announced, Marks and Spencer, that serve a wide demographic including Hotter's targeted consumers.

Hotter continues to demonstrate delivery as an e-commerce focused business and, with further product improvements being introduced on an ongoing basis, the Directors have confidence that a standalone Hotter business has the opportunity to deliver value well in excess of that attributed to it in recent valuations. The demonstration of sustained growth and profitability in its new model and the resilience and performance to date give the Directors grounds for confidence in its development as an increasingly profitable digital business serving its target 55 plus demographic in the UK, the US and beyond.

2.2. Unbound's Vision, Mission and Core Strategic Principles

In order to encapsulate what Unbound means to the Board and what we will seek to ensure that our customers and stakeholders recognise, we have defined Unbound's vision, mission and five core strategic principles that will define how and why we do things as being:

Vision

"To help people move better, feel better and do more of what they love."

Mission

"Develop technologies, products, experiences and partnerships rooted in digital excellence and unrivalled insight - to give people in their 50s and beyond the comfort and confidence to go further."

Unbound's five core strategic principles

· Guided by insight - Insight excellence drives all that Unbound does.

Unbound builds its business out of unrivalled insight into the needs, attitudes and behaviours of its 55 plus audience. Unbound goes the extra mile to engage with, listen to and respond to its audience's changing needs and continuously track, measure and improve based on its learnings - embedding insight into everything it does.

· Superiority through specialism - Expertise and focus are how Unbound wins.

Unbound is focused and undistracted. Focused on the 55 plus consumers. Experts in comfort that helps its consumers to do more of what they love. Unbound leverages its audience and comfort specialism to both strengthen its roots in footwear and to expand into relevant adjacent categories. Growing and leveraging its unique database of engaged consumers is central to Unbound's business strategy and how it plans to achieve its goals.

· Growth through connection - Unbound grows its business by curating, connecting and engaging.

Unbound has unique access to, and understanding of, the 55 plus consumers. Leveraging its combination of access and understanding, Unbound brings together a highly curated group of brands with deep relevance for its consumers. Unbound's connected commerce excellence enables our customers to shop when, where and how they want.

· Working smarter - Unbound fuels success by driving productivity.

Unbound continuously assesses and improves the ways in which it works - seeking to maximise its efficiency and enhance its outputs. Unbound utilises "Lean Six Sigma" management principles to minimise wastage and maximise customer experience. Lean Six Sigma represents a methodology for overall organisational culture change. At its core, it is a process improvement approach for eliminating inefficiencies and improving work processes by identifying the defects' root causes. Unbound does this every day in all it does - believing in the power of marginal gains to drive its business forward.

· Stepping up - Unbound steps up, for our business, our planet and our community.

Unbound believes in taking responsibility, at an individual and collective level, for the way in which it operates as a business, for reducing its impact on the planet and for contributing to the communities of which it is a part.

2.3. Unbound, Building on the Foundation of Hotter

Cultural and demographic shifts provide an opportunity for the Unbound Group to address a customer audience represented by Hotter's consumers and database with the characteristics of:

· rapidly increasing digital literacy - the 55 plus age demographic is now generating over 30% of overall internet participation;

· long-term structural growth in older demographics, significantly in excess of growth in younger demographics;

· focus on health, wellbeing, leisure and recreation with a more acute need for comfort over performance; and

· high concentration of UK wealth in the targeted demographic results in focus for product selection being on value rather than price.

With the Hotter business already selling to over 29% of the UK 55 plus female population, the Directors believe that this offers an opportunity for significant sustainable growth beyond that already being delivered by Hotter. Building on the strong brand, customer trust and loyalty enjoyed by Hotter, Unbound is building a curated portfolio of partner brands to offer a selected range of products and services on an Unbound e-commerce platform. These products, services that will ultimately lead to a community, will be selected with a focus on enhancing the lifestyle and wellbeing of customers in the 55 plus demographic.

The revenue model being implemented is to generate commission income on sales of these selected partner products, which will utilise the Unbound platform. Unbound's initial partner selection is based on consumer demographic insights from Hotter's customers. This insight will be developed as the range of products and services offered expands and will increasingly become a differentiator allowing Unbound to achieve its goal of allowing our customers to "do more of what they love" enhancing their lifestyle and wellbeing.

The first Unbound revenues from sales of products other than Hotter footwear are expected in Q2 2022, with the medium-term ambition being to generate more than half of Unbound's profit from non-Hotter products.

2.4. Our Focus on Consumer Demographic

Ageing population: growth in the 55 plus demographic that is twice as fast as the under 55 age group

An ageing population combined with increasing life expectancy will continue to increase Unbound's addressable market and the proportion of the population with acute comfort needs. The 55 plus demographic is the fastest growing demographic of the UK population. Hotter already has almost 30% of 55 plus female consumers on its database representing a significant opportunity for Unbound to cross-sell additional products and services. Unbound intends to further increase its penetration amongst the 55 plus age category across both men and women.

Large and attractive demographic, growing faster than the UK total

	16-55 years UK population	56+ years UK population
2019	34.5 million (63.8%)	19.0 million (36.2%)
2029	34.5 million (60.1%)	22.9 million (39.9%)
2039	35.1 million (58.8%)	24.6 million (41.2%)
Growth 2019-2039	14.0%	26.0%

Source: Office for National Statistics, UK only

Significant market share for key target group of 55 plus female

	Not on Hotter database	On Hotter database
Male	8.8 million (95.6%)	0.4 million (4.4%)
Female	7.4 million (71.3%)	3.0 million (28.7%)
Total	16.2 million (82.6%)	3.4 million (17.4%)

Increasing digital literacy and online penetration: rising participation rates for online shopping in the 55 plus age group, with further room to grow

Older generations have rapidly become more digitally active with the Covid-19 pandemic likely to have accelerated this trend. Over 30% of internet users in the UK are over 55 years old, broadly in line with their proportion of the UK demographic. A further growth opportunity continues to exist with 35% of over 65-year-olds and 21% of 55 to 64-year-olds yet to shop online. In addition to higher participation rates, purchase frequency should increase as they become more comfortable with e-commerce.

Over 30% of online users are over 55

Age Range	Population age composition	Online age composition
55+	38%	32%
45-54	18%	19%
35-44	16%	18%
25-34	17%	19%
18-24	11%	12%

Source: Ofcom Online Nation Report, 2020, Office for National Statistics

% of consumers shopping online by age group

Age Range	2017	2018	2019	2020
45-54	84%	81%	89%	95%
55-64	75%	71%	77%	79%
65+	45%	48%	54%	65%

Source: Ofcom Online Nation Report, 2020, Office for National Statistics

Demographic trends − household wealth is overwhelmingly concentrated within older demographics, and this is starting to produce faster increases in discretionary spending

An ageing population combined with increasing life expectancy will continue to increase Unbound's addressable market and the proportion of the population with acute comfort needs. The older demographic is the fastest growing demographic of the UK population. The UK's wealth is concentrated in the 55 plus demographic with approximately 57% of household wealth within this group against a population composition of just 38%. Household disposable income for the 55 plus age demographic has increased threefold* when compared to the under 55 age demographic which has increased twofold*. The 50 plus demographic accounts for over half of the consumer spending in the UK, having spent £367 billion* on discretionary items in 2020.

Household wealth distribution in the UK, by age of lead household member*

Age range	Private pension wealth £	Non pension wealth £	Total £
16-24	8,000	57,000	65,000
25-34	33,000	93,000	126,000
35-44	112,000	220,000	332,000
45-54	269,000	379,000	647,000
55-64	449,000	410,000	859,000
65+	261,000	432,000	692,000

* Source: 2020 Craft Media - Hotter Channel Planning 2020

Increasing focus on health and wellbeing in the older demographic: health and wellness is increasingly in focus for the target demographic alongside a wider trend towards casualisation and comfort

Older generations are becoming more active, with the largest percentage increase in exercise participation coming from the 55 plus age segment. This is expected to be further boosted by more active older generations who are increasingly likely to seek more comfort-oriented products.

Staying active for longer, UK population participating in regular physical activity

Age range	November 2015/2016	May 2017/2018	May 2018/2019
16-34	72%	71%	70%
34-54	66%	66%	66%
55-74	57%	59%	61% (+4%)
75+	33%	35%	40% (+7%)

Source: Active England Study 2019, OC&C Commercial Review 2021 and Craft Media - Hotter Channel Planning 2020

The 55 plus age demographic is materially underserved online

The majority of e-commerce businesses are focused on younger demographics with a product suite and marketing campaigns that are inappropriate for over 55-year-olds. When combined with the retrenchment of department stores, this leads to a materially underserved demographic resulting in an opportunity for Unbound to build a targeted business.

2.5. Hotter Business Overview and Strategy

Hotter is a digitally led, omni-channel footwear brand with an uncompromising focus on comfort and fit delivered through the use of differentiated technology to consumers in the UK, the US and Europe predominantly in the 55 plus demographic.

Hotter has transformed its business over the past three years since the introduction of the new management team and strategy, with Hotter now serving over 29% of the UK's 55 plus female population direct to their homes. This has had a significant effect on the distribution of sales by channel and the profitability of the business with the Group undertaking a strategic repositioning in March 2019.

Historically, Hotter's business model was focused on a retail store-led approach. It experienced a decline across all its channels as a result of a product portfolio that had lost focus with its core consumers. Prior to the strategic repositioning in the first half of 2019, the Hotter business had a high fixed cost base and, whilst profitable at an EBITDA level, was loss making overall with negative operating cash flow.

Following the strategic repositioning before and during the Covid-19 lockdowns, Hotter has evolved into a direct to consumer-focused business with growth coming from its rapidly developing e-commerce channel. All channels are now profitable at the EBITDA level, the US business is no longer significantly loss making and investment is focused on the UK business. Fixed costs have been materially reduced resulting in positive operating cash flow and strong EBITDA cash conversion in the first half of 2022. Overall EBITDA margin in the six months to July 2021 was just under 13% with a gross margin of almost 62%.

(a) Footwear Market and Purchase Drivers

The UK women's footwear segment is forecast to grow to £3.9 billion by 2024 from a value of £3.1 billion in 2020, representing an annual growth rate of 5.9%. This compares to a pre-pandemic peak of £4.1 billion. The total addressable market of Hotter is far greater when considering growth plans into the US and other international markets.

Hotter has continued to have a keen focus on two aspects, as per the business' value proposition. Shoe fit and comfort are emphasised to distinguish itself from other brands and peers. 59% of UK consumers identified shoe fit as a significant purchase driver, while 81% considered comfort a key purchase driver.

(b) Brand Proposition

The Hotter brand proposition is of key importance and underpins its cultural values, namely:

"We're here to deliver the ultimate comfort, so people can do more of what they love."

Hotter targets the 55 plus age demographic and currently has strong traction within the female footwear segment within this consumer group, providing a wide range of casual footwear. An important facet of the brand proposition is to change the negative connotations associated with "comfort", reframing comfort as active, empowering and freeing. This reinforces the goal to provide high-quality products and as a result, Hotter has emphasised its brand DNA - "Customised comfort. Limitless possibilities."

To deliver on the brand proposition, Hotter operates in a customer-first approach:

· Every foot matters : "Great shoes cannot be made without obsessing about feet. Hotter understands every size, shape and type of foot, so that it can create the perfect shoe for each of them."

· Begin and end with comfort: "Every design brief starts with the kind of comfort Hotter aims to deliver. Every piece of consumer research focuses on how Hotter's shoes feel in action. All that Hotter does starts and ends with comfort."

· Expert Tech & Expert People: "From tech to its people, Hotter does all it can to constantly expand its skills and deepen its knowledge. If there is anything that enhances the comfort of a shoe, then Hotter makes sure it knows about it."

Hotter sells on-trend, affordable footwear for its customer base, covering a wide range of styles and categories with all of the product offerings designed and developed by the in-house design team. The Company aims to increase the number of product drops to 10 per annum, an evolution from the previous strategy of two drops per season (autumn/winter, spring/summer).

Hotter's primary product categories are:

· Active	· Boots
· Deck	· Formal shoes
· Gore-Tex	· Sandals
· Shoes	· Slippers

All of Hotter's products are aligned to Hotter's core product pillars:

· precision fit - 3D fit technology, and UK whole and half sizes with four width options (slim to extra wide);

· tailored comfort - Cushion+, Stability+ and Freesole; and

· timeless style - clear Hotter designs, iconic and timeless silhouettes, and visible and meaningful comfort features.

Hotter has developed innovative technology within its products that offers differentiation from competitors and enables it to charge a premium price:

· Cushion+ - Freesole, Cushion+ designs are crafted from a PU compound to return some of the energy put in by every stride and invest it into the next. This offers improved energy returns and an ultra-flexible, super lightweight shoe; and

· Stability+ - Hotter's Stability+ designs benefit from a balance bar and are fitted with an OrthoLite^® insole, making the shoe both more secure and more breathable. Hotter also includes adjustability points on every shoe, which means they are tailored to fit the shape of each individual customer's foot.

The Group has implemented a clearly defined and scalable product development process. A fast-paced, multi-drop strategy is executed to anticipate consumer needs and changing fashion trends. The continuous product refreshment results in lower working capital and higher gross margins and reduces the Group's stock risk at the outset of a range launch.

Product cycle drops

Month	Product drops
February	Spring Drop 1
March	Spring Drop 2
April	Summer Drop 1
May	Summer Drop 2
June	Transitional Drop
July	Autumn Drop 1
August	Autumn Drop 2
September	Winter Drop 1
October	Winter Drop 2
November	Transitional Drop

Hotter's development process follows a structured process:

· Discovery Gate : the start of a new launch with the review and challenge of product development and brand objectives. This includes consumer research and a review of digital and manufacturing strategy;

· Definition Gate (approx. four weeks) : product strategy and supplier strategy are reviewed together with margin expectations and pricing strategy;

· Design Gate (approx. five weeks) : consumer validation and testing, supplier sign off and design review against the creative brief;

· Development Gate (approx. 24 weeks) : creative concepts are turned into products and financials are approved and backed by detailed trading plans factoring in feedback, current trading and market conditions;

· Deployment Gate (approx. 16 weeks) : the planning of trading the range gains traction with detailed production and quality planning commencing together with product commercialisation and factory production; and

· Delivery Gate (approx. three weeks) : the range is delivered ready to be sold in all channels for full launch with a range available for soft launch.

(d) Customers and Marketing

A key strategy for Hotter is to increase its email database (currently approx. 1.1 million) through both converting the existing analogue customer base (current total database is approx. 4.6 million) and through new customer acquisition. Hotter has established a proven marketing strategy, underpinned by the use of technology, to enable customer conversion, acquisition and retention in a cost-effective manner. A number of technology solutions are employed to capture consumer data, both on the Hotter website and through its 17 technology centres and 6 garden centre concessions through the "Footprint" experience.

The Hotter App is increasingly used by customers due to its ease of use for a more engaging experience. Hotter has developed innovative new features, such as an augmented reality shoe try-on, to further drive users towards the app. The Group expects greater levels of app downloads as the marketing strategy unfolds, benefiting the Group given a two times conversion rate on the app when compared with the Hotter website. Overall, digital marketing provides a cost-effective approach by sending tailored emails, updates to notify customers about upcoming launches, and promotional activity to generate engagement and increase customer retention and repeat purchases.

Hotter undertakes a full marketing strategy, including digital and direct marketing, "above the line" ("ATL") media and retail point-of-sale. From an ATL perspective, the media objective has been to stimulate consideration growth, focused on the over 55 female audience.

(e) Store Proposition

As part of the wider strategic e-commerce focus, accelerated by the onset of the Covid-19 pandemic, the Group decreased its retail store portfolio from 68 locations to 23 locations through a Company Voluntary Arrangement ("CVA") which commenced in July 2020 and completed in November 2020. 17 of the remaining stores were repurposed into technology centres, enabling a personalised digital marketing journey, through targeted product recommendations to the user while also providing a data acquisition opportunity to fuel e-commerce growth. 6 of the retail locations are garden centre concessions.

(f) Manufacturing and Operations

The head office, manufacturing facility and distribution centre are all located in Skelmersdale, UK. The majority of the Hotter collection is manufactured in the UK site, using shoe uppers sourced from India. The UK manufacturing plant creates shoe soles and midsoles using direct injection processes, with Deutschland Shoe Machinery ("DESMA"). The completed uppers are sent to the UK factory by sea or air freight following a quality inspection, where they are lasted onto the sole units. The products are then moulded, trimmed and packed to be sent to the UK distribution centre. The UK manufacturing plant has the capacity to produce up to 63,000 pairs of shoes a week.

Though using foreign suppliers for shoe uppers, approximately 80% of the product range is manufactured in the UK. The UK factory employs c.100 people tasked with finishing and packing the goods. This manufacturing facility is a key aspect in ensuring dependability of supply chain as the Group is not reliant on bought in finished goods, mitigating some supply chain risks present. A limited number of ranges are purchased as finished goods and transported, largely from Vietnam.

The Group management is currently in the process of exploring additional European suppliers and also has placed a strategic focus on the manufacturing process to increase efficiency and reduce wastages and labour time.

(g) In-House Technology

Hotter's operation is supported by its scalable HCL eCommerce platform (formerly IBM Websphere Commerce), adapted in house by its technology team to meet the needs of the market. The platform is already a "headless e-commerce platform", decoupling the back-end and front-end process, ensuring Hotter is agile and flexible in its response to business change. The "headless" capability allows Hotter to test and experiment on the website at pace. This links inventory, warehouse and orders to support key aspects of Hotter's operational activity, adapted specifically for Hotter's processes. The system is managed by Will Rose, Hotter's Technology Director, and his team of e-commerce and IT professionals. The platform is cloud based and can scale to fulfil growing order volumes. The team is responsible for continuous improvements to the platform which can be done on a modular basis, with discreet changes and upgrades delivered quickly while minimising delivery risk of these enhancements. Hotter's data-driven business model provides the analysis of customer browsing and ordering behaviour to support its marketing, product and customer service strategies and enables a greater understanding of the customer. Data regarding individual customer browsing behaviour is provided to the marketing team, informing Hotter's go-to-market strategy and improving the customer experience through more intelligent matching of products with specific search terms.

(h) ESG Strategy

The Group is committed to achieving high standards throughout all its undertakings. The way in which the Group works and operates in all aspects of its business is a key factor in maintaining its reputation as a responsible business and maintaining the high standards the Group represents. As such, the Group has established an ESG Committee. The main purpose of the Committee is to represent the Board in defining the Company's strategy relating to ESG matters and in reviewing the practices and initiatives of the Company relating to ESG matters, ensuring that they remain effective and up to date.

Key practices that the Group is currently implementing include:

Environmental

· The Group has completed a review of all materials used in packaging with a view to reducing excess waste.

· Hotter Shoes will be changing its shoe box to a sustainable option for spring/summer 2022 rollout. The Group is targeting producers who will recycle returns packaging.

· The Group is working across its entire material supply chain to introduce sustainable alternatives, looking to introduce replacements from spring/summer 2022 onwards.

· The majority of the Hotter Shoes footbeds use premium OrthoLite^© foam which contains 5% recycled rubber and is machine washable and designed to be long lasting.

· Hotter Shoes have introduced organic cotton canvas into its summer deck shoe ranges.

Social

· The Group maintains a focus on its fundamental principle of allowing its consumers to do more of what they love.

· The Group has a long-standing relationship with the charity Marie Curie.

· The Group has a clear privacy policy in place, demonstrating its commitment to safeguarding and protecting the data of its customers.

· All of the Group's suppliers must sign up to the Group Supplier Manual which includes the Group's Global Sourcing Principles which are aligned with the nine-point base code of the Ethical Trade Initiative.

· The Group's Indian factories which supply the majority of Hotter products have mapped and reported their supply chains to tier 3 level (and have therefore reviewed their supply chains up to their suppliers of required materials, e.g. shoelaces).

· As part of the Group's commitment to best practice, all key staff members are provided with regular training in using the services of SGS, the world leading testing, inspection and certification company.

Governance

· Unbound has adopted the provisions of the QCA Corporate Governance Code from admission to trading on AIM.

· In addition to the Audit and Risk Committee, Nomination Committee and Remuneration Committee, the Group has also established a monthly Executive ESG Committee, chaired by the CEO, to monitor, control and report on key actions.

· Hotter Shoes is a member of the Leather Working Group ("LWG") and all of the Group's Indian suppliers are using tanneries which are gold rated and approved by the LWG.

· The Group has locally based staff in India under the direction of in-country managers who visit all key factories on a weekly basis, conducting audits as required to ensure compliance with the Group's Global Sourcing Principles.

2.6. Financial Performance

The performance of Hotter in the year to January 2022 marked significant progress in terms of both strategic progression and in demonstrating resilience. The period continued to be impacted significantly by the implications of the Covid-19 pandemic; however, despite this Hotter demonstrated the key strategic objectives of:

· online sales growth : year-on-year growth of 11.6% in online sales resulting in overall sales growth of 16.5%;

· average selling price growth : significant increases in average selling prices in FY22 of over 16% compared to the prior year;

· gross margin development : gross margin improvement year on year from 54.0% to 63.5%; and

· email address capture: rapid growth in the email database to over one million, growth of over 35%.

These strategic improvements were achieved despite the impact on consumer confidence of the pandemic extending throughout 2021 and in addition the specific significant disruptive influences summarised below:

	Disruptive influence	Impact
1	Hotter's permanent closure of 59 retail stores in 2020 was too late to reduce product volumes planned for winter 2020/21	Margins in early FY22 reduced as inventory levels managed coming into spring/summer 2021
2	Lockdown over winter 2020/21 reduced sales volume through retail and overall as consumer confidence impacted	Margins in early FY22 reduced as inventory levels managed coming into spring/summer 2021
3	Lockdown throughout Q1 FY22 and continued travel restrictions reduced demand throughout 2021	Demand and margins impacted throughout FY22
4	Lockdown in India over summer 2021 impacted delivery of components for launch of autumn/winter products in 2021	Freight costs increased significantly as components shipped by air freight to reduce delay Volumes and margins further impacted over winter 2021/22 as product "landed" late in season
5	Global supply chain disruption and inflationary pressures in H2 FY22	Freight and other costs impacted in H2 FY22

The resilience demonstrated at sales and margin level combined with the improved cost efficiency of the e-commerce focused operating model implemented in 2020 allowed Hotter to make a year-on-year improvement of over £6 million in profit before tax and exceptional costs associated with the admission to AIM.

On an IFRS basis, Hotter is expected to generate adjusted EBITDA of approximately £5.5 million for FY22 (FY21 loss of £0.9 million). Profit before tax and exceptional items for the year is anticipated to not be below £0.2 million, an improvement of over £6.0 million compared with the prior year (FY21 loss of £6.6 million). This improved performance led to cash conversion at EBITDA level of 53% which combined with the investment of £5.0 million from Electra prior to admission reduced Hotter net banking debt to £8.7 million at the period end.

2.7. Looking Forward

As we enter our first period as an independent, listed Group our focus is clear:

· continue the profitable growth of Hotter Shoes as a digitally focused business. This will not only deliver increased shareholder value but will generate cash to support the development of our Unbound strategy; and

· implement the first stages of our Unbound strategy with the launch of our Unbound digital partnerships in the second quarter of our financial year.

With Hotter's gross bank debt reduced to £12.1 million and extended to December 2024 prior to AIM admission and overall net bank debt of approximately £6.0 million, which includes £2.5 million of net cash within Unbound Group plc, on admission the Group is well funded and, in a position, to implement its strategy. The successful implementation of the Group's strategy presents an opportunity to generate significant value for shareholders and will be to the benefit of all stakeholders. As such, in order to focus on these drivers of value creation we intend to realise the non-core assets retained by the Group on transition from Electra over the coming months. With the carrying value of these assets being £3.8 million as at 31 January 2022, this will give us increased financial resilience and the resource to accelerate our strategy if appropriate.

Hotter's trading in the period since our Capital Markets Day in September 2021 has shown resilience against the headwinds of supply chain issues and inflationary pressures. We entered the year to January 2023 with inventory on plan and at optimum levels and trading in the early weeks of the period has been in line with our expectations. As such we maintain the medium-term guidance given at the September Capital Markets Day:

Unbound's Medium-Term Guidance

Strategy

Framework

Unbound partnership model

· Unbound will add digital partnerships to build on and further develop the focused consumer database already in place through Hotter.

· Developing on the digital platform already in place for Hotter, building in a scalable manner.

· Commission-based partnership model for non-Hotter sales.

· First revenues from H1 2022 and with a launch planned for this summer.

· Profit generated from non-Hotter revenues targeted at 25% of Group profit in three years and 50% in five years.

· Unbound partnerships will be EBITDA and cash generative from the outset but with reinvestment in growth in the short term.

· No investment required in inventory in the short/medium term.

Hotter Medium-Term Guidance

Continued growth within online and offline channels, with retail stores recovering to pre-Covid-19 levels by the end of 2022. Improved gross margin and continued management of costs driving improving EBITDA margin over the medium term.

UK direct to consumer	Online: mid-teen percentage annual growth expected Offline: mid-single digit percentage annual growth expected
UK retail	Recovers to FY20 levels by end of FY23 and then stable
US direct to consumer	Undergoing strategic review, short term maintained at current levels
Hotter digital partnerships	Double-digit percentage annual growth
Wholesale	Maintained at current levels
Gross margin	Approximately 2% above pre-Covid-19 levels from FY23 as Covid-19 disruption diminishes and positive impact of differentiated product drives margin.
EBIT margin	Levels to reach mid-teen percentage over medium term
Cash conversion	Operating cash flow (pre-exceptional items) in line with EBITDA
Capital expenditure	Annual capital expenditure spend of c.£2.5 million. No material one-off spends required in the medium term with plan spend exceeding current depreciation levels
Working capital	No structural change with stable conversion of EBITDA to cash
Net debt/(cash)	Targeted to be maintained below 2x maintainable EBITDA in the short term, and in the medium term a net cash position without future strategic spend

2.8. Key Performance Indicators

The Group has implemented an integrated pyramid of key performance indicators ("KPIs") that cascade from the longer-term strategic "shareholder metrics" to individual department and employee metrics. This structure is intended to ensure alignment throughout the organisation over focus on achieving objectives that drive delivery of shareholder objectives and value.

The KPI measures employed for shareholder metrics are:

· earnings per share; and

· total shareholder return.

These are used for measurement of success in relation to Long-Term Incentive Plans ("LTIPs") whilst other metrics are used to measure achievement of the shorter-term performance necessary to achieve longer-term objectives. These shorter-term measures are used for routine performance management and for annual bonus measures. They reflect specific priorities of the Group in the short term and are likely to evolve in line with the Group's development.

At Board level these metrics are currently:

· earnings before tax ("EBT"): is likely to be retained as a recurring measure of short-term financial performance;

· net bank debt: is likely to be retained as a long-term measure, but it is particularly key in the short term during the coincidence of the Unbound investment phase with rapid online development of Hotter;

· Unbound partners: a critical short-term measure as we seek to add products and services through the Unbound partnership model;

· Percentage of earnings from Unbound partners: a measure of the success of the Unbound partnership model in delivering value incremental to that of Hotter;

· active database size: as an e-commerce focused business the size of the active database (customers who have purchased within the last 12 months) is key; and

· ESG targets: the Board is committed to both ESG and CSR. The Group is engaged in many initiatives in support of ESG measures and is working to bring these together to form measures and objectives that are reliable and demanding.

Given the significant changes recently undertaken in the business and the implementation of the Unbound partnership strategy in the current period certain operating KPIs are currently being finalised to ensure consistent integration into the overall structure.

3. Transition from Electra Private Equity PLC to Unbound Group plc

Throughout the period under review, from 1 October 2020 to 31 January 2022 the Company operated as a private equity investment trust focused on the final stages of the portfolio realisation strategy formally adopted in October 2018.

Given the circumstances of the Company as at 31 January 2022, the Directors consider it appropriate to adopt Net Asset Value ("NAV") as the closing market price on that date. This does not necessarily reflect the Directors' view of the future value of the Company and its investments.

During the 16 months to 31 January 2022, the changes to the investments held were:

	Investment fair value as at 30 September 2020	Net (realisations)/investments	Investment return	Investment fair value as at 31 January 2022
	£m	£m	£m	£m
TGI Fridays	106.6	(150.7)	44.1	-
Sentinel Performance Solutions	10.9	(22.2)	11.3	-
Hotter Shoes	5.8	10.2	3.6	19.6
Total core investments	123.3	(162.7)	59.0	19.6
Hostmore	-	2.7	(0.5)	2.2
Other	3.9	(2.2)	(0.1)	1.6
Special Product Company	1.0	(1.0)	-	-
Secondaries	0.4	(0.4)	-	-
Total non-core investments	5.3	(0.9)	(0.6)	3.8
Total investment portfolio	128.6	(163.6)	58.4	23.4

Final Stages of the Realisation Strategy

As at 1 October 2020, each of the remaining principal controlled investments of the Company was in a period of significant change. In each case that change had started prior to the emergence of the Covid-19 pandemic with planned changes being implemented concurrently with adapting to the circumstances of the pandemic and with subsequent realisation activities.

The main investments and realisations were:

Sentinel Performance Solutions Ltd ("Sentinel"):

Electra gained control of Sentinel for a nominal sum in mid-2019 and, following the investment of a further £1.7 million, a change of management and the adoption of a simplification strategy, the business performed strongly though the non-peak summer months of the first Covid-19 lockdown. Performance over winter 2020/21 proved to be key to plans for an exit in 2021.

Despite significant Covid-19 restrictions in each of its main markets of the UK, France and Italy in the year to March 2021 Sentinel recorded EBITDA of over £4.2 million, a 350% increase from the year to March 2019, immediately before Electra assumed control. This successful turnaround allowed Electra to complete a successful exit in April 2021 that resulted in net proceeds to Electra of £22.1 million.

The direct impact and continuing uncertainty of the Covid-19 pandemic significantly impacted the consumer markets in which both of the other remaining significant investments, TGI Fridays and Hotter Shoes, operated. As well as providing significant challenges to these businesses it resulted in the M&A market for these assets being focused on distressed transactions. Whilst continuing to explore the possibility of cash realisations the sale proceeds of Sentinel gave the opportunity to consider alternative solutions that would provide significantly greater return to shareholders in the longer term than sub-optimal cash sales.

TGI Fridays ("Fridays"):

Following management changes in late 2019, Fridays was not only going through significant planned change in 2020, with renewed focus on a mantra of Quality, Simplicity and Relevance, but was also accelerating the evolution of its previously premises-based model to adapt to the evolving market and also the implications of the pandemic. Through the implementation of "click and collect" and delivery, Fridays outperformed the market throughout the pandemic whilst implementing a highly efficient and scalable infrastructure platform and significant customer pacing improvements in quality and consistency of delivery.

With a highly experienced management team and scalable infrastructure in place a strategy for growth was developed. This resulted in the establishment of Hostmore as a holding company for Fridays and a platform on which to add other complementary and growing hospitality brands. "63^rd+1^st" was developed in house as a cocktail and food concept with three locations opened in 2021.

In November 2021, following a cash investment of £12.5 million from Electra, Hostmore was demerged to form Hostmore plc, an independent FTSE listed business that is well led and well capitalised and has a sound strategy for growth through organic growth of Fridays and "63^rd+1^st" and through the addition of other disruptor brands.

Hotter Shoes ("Hotter"):

Following management change in early 2019, Hotter Shoes commenced the implementation of product differentiation through the application of technology within a business-wide digitisation strategy prior to the emergence of the pandemic. The retail lockdown enforced by the pandemic in the first half of 2020 led to a CVA resulting in the closure of all but 17 of Hotter's retail stores. This allowed acceleration of the digital focus of the business, leaving it smaller but much stronger.

Through its focus on direct-to-consumer marketing Hotter had over 29% of the female population of the UK on its direct-to-consumer database by early 2021. This penetration within its target market gave the opportunity to add additional products and services that would increase frequency of purchase and share of consumer spending. The Unbound strategy was born, which, following a £5 million reduction in Hotter's bank debt, funded by Electra, led to the transformation of Electra into Unbound as a holding company for Hotter and a platform for the addition of products and services serving Hotter's core 55 plus demographic.

The Board is confident that this strategy provides the opportunity for shareholders to realise significantly more value in the medium term than would have been available from a disposal of Hotter followed by winding up Electra.

Other Assets:

During the period, the Company also realised £1.6 million from the disposal of Adjustoform Products Limited and £1.0 million from the distribution from an escrow holding following the disposal of the assets of Special Product Company Inc. in 2019.

The Impact of Transition of Electra to Unbound

As Electra Private Equity PLC, the Company was an investment trust listed on the FTSE Main Market as an investment company under Listing Rule 15, following the UK Corporate Governance Code and with financial reporting as an investment company. In ceasing to be both an investment company and an investment trust, the Company had no automatic right to move from being listed on the FTSE Main Market under Listing Rule 15 (Investment Companies) to remaining on the Main Market under Listing Rule 6 (Consolidated Groups). As such the Directors concluded that in transitioning to Unbound a relisting on AIM was appropriate given the size and nature of Unbound. Unbound is now a trading group and admission to trading on AIM.

Given its scale the Company has now adopted the Quoted Companies Alliance ("QCA") Corporate Governance Code. However, as the Company operated as an investment trust during the period under review, the Board considers that reporting against the principles and provisions of the Association of Investment Companies ("AIC") Code, which has been endorsed by the Financial Reporting Council, will provide better information to shareholders.

As the financial statements reported in this document relate to the period ended 31 January 2022, the day before admission to AIM, the statutory balance sheet reflects the position of the Company as an investment company owning Hotter Shoes as a portfolio company. Given the position of the Company at that date the valuation of Hotter reflected in the statutory reported balance sheet is based on the market capitalisation of the Company as at 31 January 2022 less other net liabilities at book value. As such the value attributed to Hotter does not necessarily reflect what the Directors consider to be the underlying value of the business.

Whilst the basis of preparation of the statutory accounts reflects the situation of the Company as at 31 January 2022 as an investment company, given the subsequent transition to become a trading group with effect from 1 February 2022, shareholders will find an equivalent balance sheet prepared as a consolidated trading group useful. The table on page 23 illustrates the transition from the balance sheet presented in these financial statements to one prepared as a consolidated trading group as at the same date using the same base data.

As at 31 January 2022 (£ million)	Investment Company	Hotter	Consolidation entries	Unbound Group consolidated
Fixed assets
Investments	19.6	-	(19.6)	-
Intangible assets	-	4.1	25.7	29.8
Tangible assets	-	2.7	-	2.7
Right-of-use assets	-	6.9	-	6.9
Deferred tax assets	-	3.8	-	3.8
Current assets/liabilities
Investments	3.7	-	-	3.7
Inventory	-	5.0	-	5.0
Cash	1.9	3.6	-	5.5
Lease liabilities	(0.1)	(1.4)	-	(1.5)
Borrowings	-	(2.0)	-	(2.0)
Other net liabilities	(2.0)	(10.0)	-	(12.0)
Non-current liabilities
Lease liabilities	-	(6.3)	-	(6.3)
Borrowings	-	(10.1)	-	(10.1)
Provisions	-	(1.0)	-	(1.0)
Net assets	23.1	(4.7)	6.1	24.5

Related Party Transactions

The Electra Private Equity Executive Share of Value Plan ("SoVP") vested in May 2021. As awards made under the plan vested in cash, in order to maintain alignment between the executives and shareholders the executives undertook to reinvest the full net proceeds of their awards in the purchase of new shares issues to them by the Company. As a result, on 7 May 2021 Neil Johnson and Gavin Manson respectively acquired 249,057 and 441,509 shares in the Company at a price of 530p per share, which was the closing market price on the day of the issuance.

Prior to the demerger of Hostmore plc on 1 November 2021, the executives of Hostmore undertook to receive awards due to them under the TGI Fridays Management Incentive Arrangements as shares in Hostmore plc rather than in cash. This ensured continued alignment between the objectives of Hostmore management and shareholders. The Hostmore Executive Directors, Robert Cook and Alan Clark respectively received 3,360,662 and 2,421,518 shares in Hostmore.

Prior to Admission to AIM on 1 February 2022, the executives of Hotter undertook to receive awards due to them under the Hotter Shoes Management Incentive Arrangements as shares in Unbound Group plc rather than in cash. This ensured continued alignment between the objectives of Hostmore management and shareholders. As announced on 9 December 2021 and 14 January 2022, Ian Watson, the CEO of Hotter Shoes, and from Admission to AIM the CEO of Unbound Group plc received 2,086,833 shares in Unbound Group plc.

Ian Watson

Chief Executive Officer

2 March 2022

Consolidated Income Statement

		16 months to 31 January 2022			12 months to 30 September 2020
		Revenue	Capital	Total	Revenue	Capital	Total
Note	For the	£m	£m	£m	£m	£m	£m
2	Investment income	6.5	-	6.5	0.7	-	0.7
14	Investment gains/(losses)	-	48.9	48.9	-	(57.8)	(57.8)
3	Other expenses	(12.4)	-	(12.4)	(2.5)	-	(2.5)
	Loss on revaluation of foreign currencies	-	-	-	-	(0.2)	(0.2)
	Net (loss)/return before tax	(5.9)	48.9	43.0	(1.8)	(58.0)	(59.8)
	Tax	-	-	-	(0.2)	-	(0.2)
	(Loss)/return after tax	(5.9)	49.4	43.0	(2.0)	(58.0)	(60.0)
9	Basic and diluted (loss)/return per share (p)	(15.3)	126.7	111.4	(5.0)	(151.4)	(156.4)

The "Total" columns of this statement represent the Group's Consolidated Income Statement prepared in accordance with International Financial Reporting Standards ("IFRS") adopted by the United Kingdom. The supplementary "Revenue" and "Capital" columns are prepared under guidance published by the Association of Investment Companies ("AIC"). This is further explained in the Basis of Accounting and Significant Accounting Policies.

All activities represent continuing operations. The Company has no recognised gains and losses other than those shown above and therefore no separate Statement of Total Comprehensive Income has been presented.

The accompanying notes are an integral part of these financial statements.

Consolidated Statement of Changes in Equity

Note	For the 16 months to 31 January 2022	Called up share capital	Share premium	Own shares held	Capital reserve	Revenue reserve	Total equity
Note	For the 16 months to 31 January 2022	£m	£m	£m	£m	£m	£m
	As at 1 October 2020	9.6	-	(2.4)	76.9	51.2	135.3
	Distribution in specie	-	-	-	(161.2)	-	(161.2)
15	Share issuance	1.0	5.0	-	-	-	6.0
	Net return/(loss) during the period	-	-	-	48.9	(5.9)	43.0
	As at 31 January 2022	10.6	5.0	(2.4)	(35.4)	45.3	23.1

Note	For the 12 months to 30 September 2020	Called up share capital	Share premium	Capital redemption reserve	Own shares held	Capital reserve	Revenue reserve	Total equity
Note	For the 12 months to 30 September 2020	£m	£m	£m	£m	£m	£m	£m
	As at 1 October 2019	9.6	122.9	34.9	(0.4)	(11.6)	54.5	209.9
	Net loss during the period	-	-	-	-	(58.0)	(2.0)	(60.0)
15	Reserve reclassification	-	(122.9)	(34.9)	-	157.8	-	-
15	Share forfeiture	-	-	-	-	0.5	-	0.5
	Share-based payments	-	-	-	(2.0)	-	(1.3)	(3.3)
8	Dividends	-	-	-	-	(11.8)	-	(11.8)
	As at 30 September 2020	9.6	-	-	(2.4)	76.9	51.2	135.3

The accompanying notes are an integral part of these financial statements.

Company Statement of Changes in Equity

Note	For the 16 months to 31 January 2022	Called up share capital	Share premium	Own shares held	Capital reserve	Revenue reserve	Total equity
Note	For the 16 months to 31 January 2022	£m	£m	£m	£m	£m	£m
	As at 1 October 2020	9.6	-	(2.4)	226.5	(98.4)	135.3
	Distribution in specie	-	-	-	(161.2)	-	(161.2)
15	Share issuance	1.0	5.0	-	-	-	6.0
	Net return during the period	-	-	-	9.0	34.0	43.0
	As at 31 January 2022	10.6	5.0	(2.4)	74.3	(64.4)	23.1

Note	For the 12 months to 30 September 2020	Called up share capital	Share premium	Capital redemption reserve	Own shares held	Capital reserve	Revenue reserve	Total equity
Note	For the 12 months to 30 September 2020	£m	£m	£m	£m	£m	£m	£m
	As at 1 October 2019	9.6	122.9	34.9	(0.4)	138.2	(95.3)	209.9
	Net loss during the year	-	-	-	-	(58.2)	(1.8)	(60.0)
15	Reserve reclassification	-	(122.9)	(34.9)	-	157.8	-	-
15	Share forfeiture	-	-	-	-	0.5	-	0.5
15	Share-based payments	-	-	-	(2.0)	-	(1.3)	(3.3)
8	Dividends	-	-	-	-	(11.8)	-	(11.8)
	As at 30 September 2020	9.6	-	-	(2.4)	226.5	(98.4)	135.3

The accompanying notes are an integral part of these financial statements.

Consolidated Balance Sheet

		31 January 2022	30 September 2020
Note	As at	£m	£m
	Non-current assets
14	Investments held at fair value	-	128.6
		-	128.6
	Current assets
14	Investments held at fair value	23.4	5.6
11	Trade and other receivables	0.4	0.6
	Current tax asset	0.2	0.3
	Cash	1.9	1.3
		25.9	7.8
	Current liabilities
12	Trade and other payables	(2.3)	(0.9)
13	Provisions	(0.5)	-
		(2.8)	(0.9)
	Total assets less current liabilities	23.1	135.5

	Non-current liabilities
13	Provisions	-	(0.2)
		-	(0.2)
	Net assets	23.1	135.3
	Capital and reserves
15	Called up share capital	10.6	9.6
15	Share premium	5.0	-
15	Own shares held	(2.4)	(2.4)
15	Capital reserve	(35.4)	76.9
15	Revenue reserve	45.3	51.2
	Total equity	23.1	135.3
10	Basic and diluted net asset value per share (p)	54.6	353.4
15	Number of ordinary shares in issue	42,258,128	38,282,763

The accompanying notes are an integral part of these financial statements.

Approved by the Board of Directors and signed on its behalf by:

Neil Johnson	Dan Lampard
Chairman	Chief Financial Officer
2 March 2022	2 March 2022

Unbound Group plc

Company number: 00303062

Company Balance Sheet

Note	As at	31 January 2022	30 September 2020
Note	As at	£m	£m
	Non-current assets
14	Investments held at fair value	-	20.9
		-	20.9
	Current assets
14	Investments held at fair value	23.4	5.6
11	Trade and other receivables	0.4	108.3
	Current tax assets	0.2	0.3
	Cash	1.9	1.3
		25.9	115.5
	Current liabilities
12	Trade and other payables	(2.3)	(0.9)
13	Provisions	(0.5)	-
		(2.8)	(0.9)
	Total assets less current liabilities	23.1	135.5
	Non-current liabilities
13	Provisions	-	(0.2)
		-	(0.2)
	Net assets	23.1	135.3
	Capital and reserves
15	Called up share capital	10.6	9.6
15	Share premium	5.0	-
15	Own shares held	(2.4)	(2.4)
15	Capital reserve	74.3	226.5
15	Revenue reserve	(64.4)	(98.4)
	Total equity	23.1	135.3

The Company's return for the 16 months to 31 January 2022 was £43.0 million (12 months to 30 September 2020: loss of £60.0 million).

The accompanying notes are an integral part of these financial statements.

Approved by the Board of Directors and signed on its behalf by:

Neil Johnson	Dan Lampard
Chairman	Chief Financial Officer
2 March 2022	2 March 2022

Unbound Group plc

Company number: 00303062

Consolidated Cash Flow Statement

For the	16 months to 31 January 2022	12 months to 30 September 2020
For the	£m	£m
Operating activities
Purchase of trading investments	(40.2)	(14.0)
Sales of trading investments	50.2	31.6
Dividends and distributions received	0.7	1.5
Interest income received	1.5	-
Expenses paid	(11.5)	(4.6)
Cash generated from operations	0.7	14.5
Tax repaid	0.1	0.6
Net cash inflow from operating activities	0.8	15.1
Financing activities
Dividends paid	-	(11.8)
Share forfeiture	-	0.5
Purchase of shares held under incentive schemes	-	(2.0)
Repayment of lease liabilities	(0.2)	(1.0)
Net cash used in financing activities	(0.2)	(14.3)
Net increase in cash and cash equivalents	0.6	0.8
Opening cash	1.3	0.5
Closing cash	1.9	1.3

The accompanying notes are an integral part of these financial statements.

Notes to the Financial Statements

1. Segmental Analysis

Throughout the period, the Group operated as a single business segment for reporting purposes. It was managed as a single investment company and reporting was provided to the Board of Directors on an aggregated basis. The Company's portfolio of investments was predominantly based in the United Kingdom.

2. Revenue Income

	16 months to 31 January 2022	12 months to 30 September 2020
	£m	£m
Interest income	5.8	0.1
Other income	0.7	0.6
Total revenue income	6.5	0.7

3. Other Expenses

	16 months to 31 January 2022	12 months to 30 September 2020
	£m	£m
Administrative expenses	12.4	2.5
Total other expenses	12.4	2.5

Administrative expenses for the 16 months to 31 January 2022 above include a £7.6 million charge (2020: credit of £1.3 million) related to vesting of the SoVP.

Auditor's Remuneration

	16 months to 31 January 2022		12 months to 30 September 2020
	Group	Company	Group	Company
	£000	£000	£000	£000
Audit of Group financial statements pursuant to legislation	132.6	132.6	81.9	81.9
Audit of subsidiary financial statements pursuant to legislation	-	-	43.0	-
Sub-total	132.6	132.6	124.9	81.9
Other assurance services*	106.8	106.8	33.0	33.0
Total auditor's remuneration	239.4	239.4	157.9	114.9
*The other assurance services include £56,800 related to the half year and second half year reviews (2020: half year review only £32,400), and £50,000 relating to reviews of the circulars on the demerger of Fridays and AIM listing of Unbound (2020: £nil).

Non-Audit Services

It is the Group's practice to employ Deloitte LLP on assignments additional to its statutory audit duties only when its expertise and experience with the Group are important or where it has been awarded assignments on a competitive basis. Details of the Group's process for safeguarding and supporting the independence and objectivity of the external auditor are given in the Audit and Risk Committee Report.

4. Employee Costs

During the 16 months to 31 January 2022, the Company did not have any non-Director employees.

5. Right-of-Use Assets

	16 months to 31 January 2022	12 months to 30 September 2020
	£m	£m
Opening balance	0.3	-
Adjustment on transition to IFRS 16	-	1.5
Additions	-	0.4
Disposals	-	(1.1)
Depreciation	(0.2)	(0.2)
Onerous contract	(0.1)	-
Closing balance	-	0.3

The Company adopted IFRS 16 Leases on 1 October 2019 in respect of the head office which the Company rents, using the "modified retrospective" approach on transition. Prior to adoption of IFRS 16, the lease was recognised as an operating lease and the related rental expenses were recognised in other expenses in the Income Statement.

The head office property is the only right-of-use asset held by the Company. As part of its downsizing plan, the Company relocated to a smaller office in December 2019. Disposals in the above table relate to the exit of the old lease. The new office lease was entered into in December 2019 with a three-year lease term and is measured as a right-of-use asset with an initial value of £0.4 million, which is depreciated over its lease term in accordance with the Company's accounting policy.

Due to its transition to Unbound Group plc, the Company determined that the leased office is unlikely going to be materially used for its intended purposes and concluded that the contract had become onerous as at 31 January 2022. Therefore, the remaining right-of-use asset value of £0.1 million has been fully impaired.

6. Lease Liabilities

In accordance with IFRS 16 Leases, a liability of £0.4 million was recognised when the office lease was entered into. The cash commitment amounts to £200,000 in total for the remaining lease period. Interest charge is calculated at an incremental borrowing rate of 3.5%, totalling £20,000 over the three-year lease term, and charged in the Income Statement. The carrying value of lease liabilities as at 31 January 2022 is £0.1 million.

7. Tax

Analysis of Tax Charge During the Period

	16 months to 31 January 2022			12 months to 30 September 2020
	Revenue	Capital	Total	Revenue	Capital	Total
	£m	£m	£m	£m	£m	£m
Current tax
UK corporate tax on (loss)/return for the period	-	-	-	-	-	-
Deferred tax
Adjustments in respect of previous periods	-	-	-	0.2	-	0.2
Total tax charge	-	-	-	0.2	-	0.2

7. Tax (continued)

The difference between the income tax expense shown above and the amount calculated by applying the effective rate of UK corporation tax, currently 19.0% (2020: 19.0%), to the (loss)/return before tax is as follows:

	16 months to 31 January 2022			12 months to 30 September 2020
	Revenue	Capital	Total	Revenue	Capital	Total
	£m	£m	£m	£m	£m	£m
(Loss)/return on ordinary activities before tax	(5.9)	48.9	43.6	(1.8)	(58.0)	(59.8)
(Loss)/return before tax at the rate of UK corporation tax of 19.0% (2020: 19.0%)	(1.1)	9.3	8.2	(0.3)	(11.0)	(11.3)
Effects of:
Adjustments in respect of prior period	-	-	-	0.2	-	0.2
Capital (return)/loss not taxable	-	(9.3)	(9.3)	-	11.0	11.0
Deferred tax not recognised	(0.5)	-	(0.5)	(0.2)	-	(0.2)
Disallowed expense	1.6	-	1.6	0.5	-	0.5
Total tax charge	-	-	-	0.2	-	0.2

Disallowed expenses in the reconciliation above relate to tax charge on excess management expenses of £8.4 million (2020: £2.5 million). Excess management expenses are expenses incurred by the Company, exceeding the income the Company generated during the period.

8. Dividends

	16 months to 31 January 2022	12 months to 30 September 2020
	£m	£m
Dividend in specie (net)	161.2	-
Special Dividend of FY20 (31.0p per share)	-	11.8
Total dividends	161.2	11.8

As at 31 January 2022, the Company had distributable reserves of £27.3 million (2020: £217.2 million), being the sum of the realised capital reserve and the revenue reserve. The Board does not consider the unrealised capital reserve of negative £17.3 million (2020: negative £89.0 million) to be distributable, and therefore the Company's net distributable reserves as at 31 January 2022 were £10.0 million (2020: £128.1 million).

9. (Loss)/Return per Share

The capital, revenue and total return per ordinary share are based on the net (loss)/return shown in the Consolidated Income Statement and the weighted average number of ordinary shares during the 16 months to 31 January 2022 of 38,592,946 (12-month period to 30 September 2020: 38,282,763). There are no dilutive instruments issued by the Company.

10. NAV per Share

The NAV per share is calculated by dividing the NAV of £23.1 million (2020: £135.3 million) by the number of ordinary shares in issue as at 31 January 2022 of 42,258,128 (30 September 2020: 38,282,763). There are no dilutive instruments issued by the Company.

11. Trade and Other Receivables

As at	31 January 2022		30 September 2020
	Group	Company	Group	Company
	£m	£m	£m	£m
Amounts owed by subsidiary undertakings	-	-	-	107.7
Other receivables	0.4	0.4	0.6	0.6
	0.4	0.4	0.6	108.3

12. Trade and Other Payables

	31 January 2022		30 September 2020
As at	Group	Company	Group	Company
As at	£m	£m	£m	£m
Other payables	2.3	2.3	0.9	0.9

Trade and other payables consist of accrued expenses, including £1.8 million estimated transaction costs on AIM listing of Unbound Group plc and completion of the Company's final strategic delivery, and supplier invoices received but not settled.

13. Provisions

	16 months to 31 January 2022		12 months to 30 September 2020
	Group	Company	Group	Company
	£m	£m	£m	£m
Opening balance	0.2	0.2	0.3	0.3
Amounts paid	(0.2)	(0.2)	-	-
Change in provision	0.5	0.5	(0.1)	(0.1)
Closing balance	0.5	0.5	0.2	0.2

The closing provisions as at 31 January 2022 relate to onerous contracts as a result of the Company's transition to Unbound Group plc, including costs on the Company's leased office and other service providers.

The closing provisions as at 30 September 2020 included liability and National Insurance contributions provided for on the SoVP incentive scheme, which vested in May 2021, and therefore the related provisions have been settled during the 16 months to 31 January 2022.

14. Financial Instruments

Management of Risk

The Group's financial instruments comprise securities in listed and unlisted companies, trade receivables, trade payables and cash. The main risks arising from the Group's and Company's financial instruments are fluctuations in market price, liquidity and capital. The policies for managing each of these risks are summarised below. The financial risks of the Company are aligned to the Group's financial risks.

Market Price Risk

Market price risk arises mainly from uncertainty about future prices of financial instruments used in the Group's operations. It represents the potential loss the Group might suffer through holding market positions in the face of price movements. The Group is exposed to the risk of the change in value of its investments in listed and unlisted equity.

14. Financial Instruments (continued)

Liquidity Risk

The Group's assets comprise unlisted equity, which is illiquid by nature. Short-term flexibility is achieved through holding of cash, which is available on demand, and liquid investments such as listed equity. The Group's financial liabilities are expected to be settled in less than a year.

Credit Risk

The Group's exposure to credit risk principally arises from its cash deposits. Only major banks are used when making cash deposits and the level of cash is reviewed on a regular basis. In total, cash balance of £1.9 million (30 September 2020: £1.3 million) was principally held with two UK banks, whose credit ratings are listed in the table below.

Bank credit ratings as at 31 January 2022	Moody's
HSBC	A1 (stable)
Royal Bank of Scotland International	A3 (stable)

Capital Risk Management

The Group's capital, as at 31 January 2022, comprised share capital of £10.6 million (2020: £9.6 million) and total other reserves of £12.5 million (30 September 2020: £125.7 million).

The Group's objective in the management of capital risk is to maintain an optimal capital structure. In doing so the Group may adjust the amount of dividends paid to shareholders or issue new shares or debt. During the 16 months to 31 January 2022, TGI Fridays demerged from the Group by way of dividend in specie to the Company's shareholders, and no cash dividend was paid (12 months to 2020: £11.8 million). The Group has an existing authority to implement an on-market share buy-back programme to generate shareholder value. There are no externally imposed requirements on the

Company's capital.

Financial Assets and Liabilities

		Group		Company
	31 January 2022	30 September 2020	31 January 2022	30 September 2020
As at	£m	£m	£m	£m
Financial assets
Equity shares	23.4	11.0	23.4	11.0
Non-equity shares	-	2.1	-	2.1
Fixed interest securities	-	115.5	-	7.8
Floating rate securities	-	5.6	-	5.6
Cash at bank	1.9	1.3	1.9	1.3
Other assets	0.4	0.6	0.4	108.3
Financial liabilities
Other payables	2.3	0.9	2.3	0.9

Cash and other receivables and payables are measured at amortised cost and the rest of the financial assets in the table above are held at fair value through profit or loss. The carrying values of the financial assets and liabilities measured at amortised cost are short-term in nature and repayable/payable on demand, and therefore are considered to be materially equal to the fair value.

Fair Value Hierarchy

Fair value is the amount for which an asset could be exchanged between knowledgeable willing parties in an arm's length transaction. The Group complies with IFRS 13 in respect of disclosures about the degree of reliability of fair value measurements. The levels of fair value measurement bases are defined as follows:

14. Financial Instruments (continued)

Level 1: fair values measured using quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: fair values measured using valuation techniques for all inputs significant to the measurement other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: fair values measured using valuation techniques for which any significant input to the valuation is not based on observable market data (unobservable inputs).

The Group considers observable data to be market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary and provided by independent sources that are actively involved in the relevant market.

The following tables present the Group's assets by hierarchy levels. During the 16 months to 31 January 2022, £2.2 million of level 3 assets were transferred to level 1 and £20.1 million of level 3 assets were transferred to level 2 (during the 12 months to 30 September 2020: no transfer).

Financial Assets at Fair Value through Profit or Loss

	Level 1		Level 2	Level 3	Total
	£m		£m	£m	£m
Investments as at 31 January 2022	2.2		19.6	1.6	23.4
Investments as at 30 September 2020		5.6	-	128.6	134.2

Investments classified within level 1 consist only of listed equity investments, whose values are based on quoted market prices in active markets. The Group does not adjust the quoted price for these instruments.

Investments classified within level 2 consist of unlisted equity investments, whose values are based on quoted market prices in active markets adjusted for other assets and liabilities held by the Group and the Company.

Investments classified within level 3 consist of private equity direct investments, on which observable prices are not available and the Group uses valuation techniques to derive the fair value.

The following tables present the movement of assets measured at fair value, based on fair value measurement levels.

	16 months to 31 January 2022			12 months to 30 September 2020
Group	Level 1	Level 2	Level 3	Level 1	Level 2	Level 3
Group	£m	£m	£m	£m	£m	£m
Opening balance	5.6	-	128.6	17.3	-	192.4
Purchases	21.0	-	23.4	9.1	-	4.1
Realisations	(26.6)	-	(187.0)	(20.9)	-	(12.0)
Transfer from level 3 to level 1	2.7	-	(2.7)	-	-	-
Transfer from level 3 to level 2	-	19.6	(19.6)	-	-	-
(Decrease)/increase in valuation	(0.5)	-	58.9	0.1	-	(55.9)
Closing balance	2.2	19.6	1.6	5.6	-	128.6

14. Financial Instruments (continued)

	16 months to 31 January 2022			12 months to 30 September 2020
Company	Level 1	Level 2	Level 3	Level 1	Level 2	Level 3
Company	£m	£m	£m	£m	£m	£m
Opening balance	5.6	-	20.9	17.3	-	44.7
Purchases	21.0	-	19.2	9.1	-	2.9
Transfer from Group entities	-	-	176.2	-	-	-
Realisations	(26.6)	-	(187.0)	(20.9)	-	(12.2)
Transfer from level 3 to level 1	2.7	-	(2.7)	-	-	-
Transfer from level 3 to level 2	-	19.6	(19.6)	-	-	-
(Decrease)/increase in valuation	(0.5)	-	(5.4)	0.1	-	(14.5)
Closing balance	2.2	19.6	1.6	5.6	-	20.9

Realisations in the tables above include interest and distributions received from investments. During the 16 months ended 30 January 2022, the Company incurred costs of £5.2 million in transaction costs (12 months to 30 September 2020: £1.9 million). Total gains and losses on assets measured at level 3 are recognised as part of the investment gains and losses balance in the Consolidated Income Statement and no other comprehensive income has been recognised on these assets. Total unrealised gains for the 16 months ended 31 January 2022 were £2.2 million (12 months to 30 September 2020: loss of £58.2 million).

15. Called up Share Capital and Reserves

The Company has 42,258,128 (30 September 2020: 38,282,763) allotted, called up and fully paid ordinary shares of 25p each, totalling £10.6 million as at 31 January 2022 (30 September 2020: £9.6 million).

Upon vesting of the Electra SoVP in May 2021, the Company issued a total of 690,566 ordinary shares to the Chairman and CFOO (before the Company's transition to Unbound). In January 2022, 3,284,799 of the Company's new shares were issued to the management team at Hotter in settlement of its entitlement under the Hotter Management Incentive Plan ("MIP"). All recipients of the new shares have retained the shareholding in the Company since issuance.

Own Shares Held

Own shares held are shares purchased by the Company's Employee Benefit Trust (the "Trust") in relation to the SoVP scheme operated by the Company. The Trust waives its rights to dividends on the shares held. The number of shares held by the Trust was 690,481 as at 31 January 2022 (30 September 2020: 690,481). These shares are held at a historic cost of £2.4 million (2020: £2.4 million).

Share Premium and Capital Redemption Accounts

The Company cancelled its share premium account and capital redemption reserve in July 2020, increasing the distributable reserves by £157.8 million, to facilitate the distribution of the Company's targeted returns to shareholders. Issuance of the 690,566 ordinary shares in settlement of vesting of the Electra SoVP in May 2021 and 3,284,799 ordinary shares in settlement of the Hotter MIP in January 2022 have created a £5.0 million share premium account.

Capital Reserve

The capital reserve includes both realised capital reserve, which is the accumulated gains and losses on the realisation of investments and unrealised capital reserve, which is the accumulated changes in the value of financial instruments measured at fair value which have been charged through profit and loss.

15. Called up Share Capital and Reserves (continued)

Revenue Reserve

The revenue reserve is the accumulated net revenue profits and losses of the Group.

Share Forfeiture

Following approval at the AGM in February 2020, the Company commenced a programme to seek to identify and contact shareholders with whom contact was lost for in excess of 12 years. The programme was concluded in August 2020 and in total 72 shareholders have been identified as untraced and as a result 11,194 shares and related unclaimed dividends with a total value of £0.5 million, after fees, were forfeited.

16. Particulars of Holdings

Subsidiary Undertakings

The results and balances of the following subsidiaries are included in the consolidated financial statements of the Group for the 16 months to 31 January 2022:

Hotter MIPCO Limited

Company number: 13227465

Registered office: 17 Old Park Lane, London, England W1K 1QT

Place of incorporation: United Kingdom

Ownership: 100% in ordinary shares

Electra Private Equity Limited (formerly Electra Investments Limited)

Company number: 00021895

Registered office: 17 Old Park Lane, London, England W1K 1QT

Place of incorporation: United Kingdom

Ownership: 100% in ordinary shares

Significant Interests in Investee Undertakings

The Group has a significant interest in the following investee company as at 31 January 2022:

Galaxy Topco Limited (holding company for Hotter Shoes)

Company number: 08812566

Registered office: 2 Peel Road, Skelmersdale, England WN8 9PT

Place of incorporation: United Kingdom

Ownership: 100% in ordinary shares

Loss for the period ended 2 February 2020: £25.1 million

Net assets as at 2 February 2020: negative £182.3 million

17. Related Party Transactions

Balances and transactions between the Company and its subsidiaries are eliminated on consolidation. Details of transactions between the Company and other related parties are disclosed below.

17. Related Party Transactions (continued)

Sherborne Investors Management LP ("Sherborne") has served as an adviser to the Group on research and formulation as well as making proposals to the Board of Directors. Stephen Welker, who is also a Partner in Sherborne, served as a Non-Executive Director in the Company until his resignation on 1 November 2021. Under the terms of its contract with the Company, Directors appointed by Sherborne have waived their fees but were entitled to be reimbursed for all reasonable expenses. In the 16 months to 31 January 2022, Sherborne charged no expenses to the Company (12 months to 30 September 2020: £22,609 as reimbursement for Mr Welker's travel and subsistence costs), and no outstanding amount was payable by the Company as at 31 January 2022 (30 September 2020: £nil). There are now no Directors of the Company appointed by Sherborne.

18. Capital Commitments and Contingencies

There were no outstanding capital commitments or contingent liabilities as at 31 January 2022.

19. Post Balance Sheet Events

On 1 February 2022, listing of the Company's shares on the premium segment of the Official List of the Financial Conduct Authority of the United Kingdom was cancelled, and trading of the Company's shares was removed from the Main Market for listed securities of the London Stock Exchange plc and was admitted on AIM as Unbound Group plc.

20. Basis of Accounting and Significant Accounting Policies

The Group financial statements for the 16 months ended 31 January 2022 have been prepared in accordance with the Companies Act 2006 and International Financial Reporting Standards ("IFRSs"). IFRSs comprise standards and interpretations approved by the International Accounting Standards Board ("IASB") and the IFRS Interpretations Committee ("IFRS IC") as adopted by the United Kingdom.

In order to reflect the activities of an investment trust company, supplementary information which analyses the Consolidated Income Statement between items of a revenue and capital nature has been presented alongside the Consolidated Income Statement. In analysing total income between capital and revenue returns, the Directors have followed the guidance contained in the Statement of Recommended Practice ("SORP") for investment companies issued by the Association of Investment Companies in November 2014 and updated in October 2019.

The recommendations of the SORP which have been followed include:

· realised and unrealised profits or losses arising on the revaluation or disposal of investments classified as held at fair value through profit or loss should be shown in the "Capital" column of the Consolidated Income Statement;

20. Basis of Accounting and Significant Accounting Policies (continued)

· realised gains are taken to the realised reserves in equity and unrealised gains are transferred to the unrealised reserves in equity;

· returns on any share or debt security (whether in respect of dividends, interest income or otherwise) should be shown in the "Revenue" column of the Consolidated Income Statement. The total of the "Revenue" column of the Consolidated Income Statement is taken to the revenue reserve in equity; and

· the Board should determine whether the indirect costs of generating capital gains should also be shown in the "Capital" column of the Consolidated Income Statement. If the Board decides that this should be so, the management expenses should be allocated between revenue and capital in accordance with the Board's expected long-term split of returns, and other expenses should be charged to capital only to the extent that a clear connection with the maintenance or enhancement of the value of investments can be demonstrated. The Board has decided that the Company should continue to charge management expenses as a revenue item for the 16 months to 31 January 2022.

The separate financial statements of the Company have been prepared in accordance with Financial Reporting Standard 101 ("FRS 101") and the Companies Act 2006. The Company has taken advantage of the exemption under section 408 of the Companies Act 2006 and accordingly has not presented a separate Company Income Statement.

In preparing these financial statements, the Company applies recognition, measurement and disclosure requirements of FRS 101 and the following exemptions have been applied:

15. Cash Flow Statement and related notes;

16. related party disclosures in respect of transactions with wholly owned subsidiaries;

17. the effects of new but not yet effective IFRSs; and

18. IFRS 2 Share-Based Payment in respect of Group settled share-based payment schemes.

Going Concern

Following the adoption of the wind-down strategy in 2018 it became appropriate, in light of the likely ultimate wind-up of the Company, for the Company to report on a basis other than that of a going concern. Given the Company's transition to Unbound Group plc as a trading holding company for Hotter, listed on AIM on 1 February 2022, this basis of preparation is no longer appropriate. As such these accounts are prepared on the basis of a going concern.

The Directors have conducted a going concern review and concluded that preparation of the report on a going concern basis was appropriate because the Group is expected to be able to meet its liabilities as they fall due for a period of 12 months from the date of approval of the financial statements. In reaching this decision the Directors considered the trading position of Hotter Shoes in relation to the covenants on its banking facilities that extend to December 2024, forecast profitability and levels of cash, and also the Board's intention to realise the non-core assets of the Company.

Given the situation of the Company, the change of basis of preparation has no numerical impact on the financial performance or position of the Company as reported.

Basis of Consolidation

The consolidated financial statements include the Company and its subsidiary undertakings. Subsidiaries are entities controlled by the Group. Control, as defined by IFRS 10, is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

20. Basis of Accounting and Significant Accounting Policies (continued)

The amendments to IFRS 10 and IFRS 12 define an investment entity and include an exception from the consolidation requirements for investment entities.

The Company has been deemed to meet the definition of an investment entity per IFRS 10, as the following conditions exist:

· the Company has multiple unrelated investors which are not related parties and holds multiple investments;

· ownership interests in the Company are exposed to variable returns from changes in the fair value of the Company's net assets;

· the Company has obtained funds for the purpose of providing investors with investment management services;

· the Company's business purpose is investing solely for returns from capital appreciation and investment income; and

· the performance of investments is measured and evaluated on a fair value basis.

The Company does not consolidate the portfolio companies it controls. The principal subsidiaries are wholly owned companies, which provide investment-related services through the provision of investment management or advice and hold investments in managed assets. The primary purpose of these entities is to provide investment-related services that relate to the Company's investment activities and therefore they are not considered to be investment entities. These subsidiaries continue to be consolidated.

Investments

Purchases and sales of listed investments are recognised on the trade date where a contract exists whose terms require delivery within a timeframe determined by the relevant market. Purchases and sales of unlisted investments are recognised when the contract for acquisition or sale becomes unconditional.

Investments are designated at fair value through profit or loss (as detailed in the financial statements as investments held at fair value) and are subsequently measured at reporting dates at fair value. The fair value of direct unquoted investments is calculated in accordance with the Principles of Valuation of Investments below.

Principles of Valuation of Investments

The Group estimates the fair value of each investment at the reporting date in accordance with IFRS 13 and the International Private Equity and Venture Capital Valuation ("IPEV") Guidelines. Fair value is the price for which an asset could be exchanged between knowledgeable and willing parties in an arm's length transaction. In estimating fair value, the Manager applies a valuation technique which is appropriate in light of the nature, facts and circumstances of the investment and uses reasonable current market data and inputs combined with judgement and assumptions. Valuation techniques are applied consistently from one reporting date to another except where a change in technique results in a better estimate of fair value.

In respect of unlisted investments, the Group selects one or more of the following valuation techniques:

· a market approach, based on the price of the recent investment, earnings multiples or industry valuation benchmarks;

· an income approach, employing a discounted cash flow technique; and

· a replacement cost approach valuing the net assets of the portfolio company.

20. Basis of Accounting and Significant Accounting Policies (continued)

In assessing whether a methodology is appropriate the Group maximises the use of techniques that draw heavily on observable market-based measures of risk and return. In some circumstances the Group may apply a multiple to the net assets of a business, typically where the business' value derives mainly from the underlying fair value of its assets rather than its earnings, such as property holding companies.

The fair value of listed investments is based on quoted prices in active markets at the Balance Sheet date. A market is regarded as active, if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis. The quoted market price used for financial assets held by the Group is the current bid price.

Subsidiary Undertakings

Investments in subsidiaries are stated in the Company Balance Sheet at the fair value.

Cash

Cash comprises cash at bank and is measured at amortised cost.

Leased Assets - Group as a Lessee

For any new contracts entered into on or after 1 October 2019, the Group considers whether a contract is or contains a lease. A lease is defined as a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for a consideration. The Group assesses whether it has the right to direct how and for what purpose the asset is used throughout the period of use.

For leases identified, the Group recognises a right-of-use asset and a lease liability on the Balance Sheet at lease commencement date. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability, any initial direct costs incurred by the Group, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date (net of any incentives received).

The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group also assesses the right-of-use asset for impairment when such indicators exist.

At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily available or the Group's incremental borrowing rate. Lease payments included in the measurement of the lease liability are made up of fixed payments (including in-substance fixed), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments arising from options reasonably certain to be exercised.

Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments. When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced to zero. The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight-line basis over the lease term.

20. Basis of Accounting and Significant Accounting Policies (continued)

Foreign Currencies

The Group's and Company's presentational and functional currency is Pounds Sterling ("Sterling"), since that is the currency of the primary economic environment in which the Group operates. Transactions in currencies other than Sterling are recorded at the rates of exchange prevailing on the dates of the transactions. Foreign currency assets and liabilities are translated into the functional currencies of the Group's respective entities at rates prevailing at the Balance Sheet date. Foreign currency revenue and expenses are translated into the functional currencies of the Group's respective entities at the month-end rate for the period the transaction occurred. Exchange differences arising are recognised through the Consolidated Income Statement.

At each Balance Sheet date, assets and liabilities of foreign operations are translated into Sterling at the rates prevailing on the Balance Sheet date. Foreign exchange differences arising on retranslation of the equity and reserves of subsidiaries with functional currencies other than Sterling are recognised directly in the translation reserve in equity. Foreign exchange differences arising on the retranslation of non-monetary items carried at fair value are included in the Consolidated Income Statement for the year.

Investment Income

Dividends receivable from equity shares are accounted for on the ex-dividend date or, where no ex-dividend date is quoted, when the Group's right to receive payment is established. Fixed returns on non-equity shares and debt securities are recognised on a time apportionment basis so as to reflect the effective yield when it is probable that economic benefit will flow to the Group. Where income accruals previously recognised, but not received, are no longer considered to be reasonably expected to be received, either through investee company restructuring or doubt over its receipt, then these amounts are reversed through expenses.

Expenses

Expenses are charged through the "Revenue" column of the Consolidated Income Statement.

Defined Contribution Plan

The Group operates a defined contribution pension plan under which the Group pays fixed contributions. Pension contributions are recognised as expenses in the Consolidated Income Statement, as incurred.

Tax

The tax effect of different items of income/gain and expense/loss is allocated between capital and revenue on the same basis as the particular item to which it relates, using the Company's effective rate of tax for the accounting year. The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit before tax as reported in the Consolidated Income Statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the Balance Sheet date.

Provisions

Provisions are recognised when the Group has a present obligation of uncertain timing or amount as a result of past events and it is probable that the Group will be required to settle that obligation and a reliable estimate of that obligation can be made. The provisions are measured at the Directors' best estimate of the amount to settle the obligation at the Balance Sheet date. Changes in provisions are recognised in the Consolidated Income Statement.

20. Basis of Accounting and Significant Accounting Policies (continued)

Revenue and Capital Reserves

Net capital return is added to the capital reserve in the Consolidated Statement of Changes in Equity, while the net revenue return is added to the revenue reserve.

Receivables and Payables

Receivables and payables are typically settled in a short time frame and are carried at the amount due to be settled. As a result, the fair value of these balances is considered to be materially equal to the carrying value, after taking into account potential impairment losses.

Share Capital

Ordinary shares issued by the Group are recognised at the proceeds or fair value received with the excess of the amount received over nominal value being credited to the share premium account. Direct issue costs, net of tax, are deducted from equity.

Critical Accounting Judgements and Key Sources of Estimation Uncertainty

Critical accounting judgements and key sources of estimation uncertainty used in preparing the financial information are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable. The resulting judgements and estimates will, by definition, seldom equal the related actual results.

In the course of preparing the Annual Report and Financial Statements for the 16 months ended 31 January 2022, the Directors concluded that the Company continues to meet the definition of an investment entity based on the reassessment of the conditions listed under the basis of consolidation above.

Key Sources of Estimation Uncertainty

The valuation for Hotter as at 31 January 2022 is derived by adjusting the market capitalisation of Unbound Group plc on that date by all other assets and liabilities held by the Company, and the Company's liabilities include accrued transaction costs on its transition to Unbound and estimated costs provided for contracts, which have become onerous as a direct result of the transition.

There is a risk that these costs could be different to the amounts estimated as at the year end, therefore causing adjustments to the carrying amounts of assets and liabilities within the next financial year. However, the Company has performed a detailed review of the cost estimates, many of which are based on either quotes from service providers or contractual amounts. Therefore, the Directors believe that any differences between actual and estimated costs would be immaterial.

Information for Shareholders

Financial calendar for 2022/23

Annual results announced	3 March 2022
Annual General Meeting	12 May 2022

Website and Unbound News via Email

For further information on share prices, regulatory news and other information, please visit www.unboundgroupplc.com.

If you would like to receive email notification of our announcements, please visit the Unbound website at www.unboundgroupplc.com/regulatory-news/ and "Subscribe to Unbound Group's News Alerts". Registering for email alerts will not stop you receiving Annual Reports or any other shareholder documents you have selected to receive by post or electronically.

Shareholder Enquiries

In the event of queries regarding your ordinary shareholding, contact the Company's Registrar, Equiniti Limited, which will be able to assist you with:

• registered holdings;

• balance queries;

• lost certificates; and

• change of address notifications.

Equiniti Limited's full details are provided on page 46 or please visit www.equiniti.com.

If you are an existing shareholder and wish to buy more/sell your shares in Unbound:

An internet and telephone dealing service has been arranged through Equiniti, which provides a simple way for UK shareholders of Unbound to buy or sell Unbound's shares. For full details and terms and conditions simply log onto www.shareview.co.uk/dealing or call 0371 384 2351. Please note that lines are open 8.30am to 5.30pm (UK time) Monday to Friday (excluding public holidays in England and Wales).

The service is only available to shareholders of Unbound who hold shares in their own name, have a UK registered address and are aged 18 and over.

Shareview Dealing is provided by Equiniti Financial Services Limited. Equiniti Financial Services Limited is authorised and regulated by the Financial Conduct Authority of 25 The North Colonnade, Canary Wharf, London E14 5HS (FCA reference 468631). Equiniti Financial Services Limited is registered in England and Wales with number 6208699.

If you are not an existing shareholder:

If you are not an existing shareholder, we recommend you seek your own personal financial advice from an appropriately qualified independent adviser or alternatively contact your own broker. Unbound Group plc's shares are listed on the London Stock Exchange with the ticker "UBG".

Please Note: The above information is not a recommendation to buy or sell shares. The value of shares and any income from them can fluctuate and you may get back less than the amount invested. If you have any doubt over what action you should take, please contact an authorised financial adviser.

Trading Information - Ordinary Shares

Listing	London Stock Exchange
ISIN	GB0003085445
SEDOL	0308544
Ticker/EPIC code	UBG
Bloomberg	UBGLN

Share Fraud Warning

We are aware that in the past a number of shareholders have received unsolicited phone calls or correspondence concerning investment matters. These are typically from overseas-based brokers who target UK shareholders, offering to sell them what often turn out to be worthless or high-risk shares. These operations are commonly known as boiler room scams.

Please be very wary of any such calls or correspondence. Ask for the name and organisation of the person calling you and check if they can be found on the Financial Conduct Authority ("FCA") Register. If they are not listed, please report it directly to the FCA using its consumer helpline (0800 111 6768). You may also wish to advise us by telephoning 020 3874 8300 or emailing Investorrelations@unboundgroup.com.

It is very unlikely that either the Company or the Company's Registrar, Equiniti, would make unsolicited telephone calls to shareholders. Such calls would only relate to official documentation already circulated to shareholders and never be in respect of investment advice.

Please remember that if you use an unauthorised firm to buy or sell shares, you will not be eligible to receive payment under the Financial Services Compensation Scheme if things go wrong.

Contact Details

Unbound Group plc

Board of Directors

Neil Johnson (Chairman)

Ian Watson (Chief Executive Officer, appointed as a Director on 1 February 2022)

Dan Lampard (Chief Financial Officer, appointed as a Director on 1 February 2022)

Paul Goodson

Gavin Manson

Baroness Kate Rock (appointed on 1 November 2021)

Suki Thompson (appointed on 1 November 2021)

Linda Wilding

Registered Office

Registered in England: Company no. 00303062

17 Old Park Lane, London, England W1K 1QT

Telephone +44 (0)20 3874 8300

www.unboundgroupplc.com

Company Secretary and Administrator

Frostrow Capital LLP (to 12 May 2022)

25 Southampton Buildings, London, England WC2A 1AL

Telephone +44 (0)20 3008 4910

ONE Advisory Limited (from 12 May 2022)

3 Temple Avenue, Temple, London, England EC4Y 0DT

Telephone +44 (0)20 7583 8304

Registered Independent Auditor

Deloitte LLP

Hill House, 1 Little New Street, London, England EC4A 3TR

Corporate Brokers

Stifel Nicolaus Europe Limited

4^th Floor, 150 Cheapside, London, England EC2V 6ET

HSBC

8 Canada Square, Canary Wharf, London, England E14 5HQ

Registrar and Transfer Office

Equiniti Limited

Aspect House, Spencer Road, Lancing, West Sussex, England BN99 6DA

Telephone (UK) 0371 384 2351*

Textel/hard of hearing line (UK) 0371 384 2255*

Telephone (overseas) +44 121 415 7047

* Lines open 8.30am to 5.30pm (UK time), Monday to Friday (excluding public holidays in England and Wales).

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

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Unbound Group (UBG)

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