Information  X 
Enter a valid email address

Shoe Zone PLC (SHOE)

  Print   

Tuesday 18 May, 2021

Shoe Zone PLC

Interim Results

RNS Number : 9084Y
Shoe Zone PLC
18 May 2021
 

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the company's obligations under Article 17 of MAR. Upon the publication of this announcement via regulatory news service this inside information is now considered to be in the public domain.

 

SHOE ZONE PLC

INTERIM RESULTS

 

Shoe Zone PLC ("Shoe Zone", the "Company") is pleased to announce its interim results for the six months to 3 April 2021. (the "Period")

Financial Update

• Revenue of £40.4m (2020 H1: £68.9m)

Store revenue £22.8m (2020 H1: £63.3m)

Digital revenue £17.6m (2020 H1: £5.5m)

Digital contribution of £5.3m (2020 H1: £1.9m)

Digital conversion rate 6.43% (2020 H1: 3.47%)

Over 1.0 million engaged users in shoezone.com database

• Statutory loss before tax £(2.6)m (2020 H1: £(2.5)m as a result of tight cost control and increase in digital.

• Statutory earnings per share (4.2)p (2020 H1: (4.1)p)

• Net cash balance of £4.1m (2020 H1: £3.6m)

• No interim dividend to be paid (2020 H1: no dividend)

Business and COVID-19 Update

• All stores closed for a minimum of 16 weeks in the Period

• Digital and Warehouse teams operated throughout the lockdowns

• Supply chain disruption due to container shortages and Ever Given/Suez Canal issues

• Continual cash preservation action taken throughout the period resulting in net cash of £4.1m at the end of the Period

• Ongoing negotiations with Landlords and suppliers

• Majority of staff furloughed and we have used the Government business support schemes including grants, rates and VAT

• CLBILS loan of £15m in place and drawn down. £4.6m repaid

• Store numbers are 422 having reduced by 38 in the period. A full review of individual store viability will now continue

• Exit from the Republic of Ireland with all stores and shoezone.ie now closed

 

 

For further information please call:

 

Shoe Zone PLC                                                                                  Tel: via 0116 222 3000

Anthony Smith (Chief Executive)

Terry Boot (Finance Director)

Finncap (Nominated Advisor and Broker)  Tel: 020 7220 0500

Matt Goode (Corporate Finance)

Kate Bannatyne (Corporate Finance)

Alice Lane (ECM)

 

Chief Executive's statement

Introduction

The last 12 months have been like no other in the company's history. The COVID-19 pandemic has had a huge social and economic impact around the world and has led to huge consequences for all businesses, including our own, as we have had to adapt and change to meet the significant challenges in the last year and I thank our loyal and committed staff during this period. However, we have come through this challenging period and are now in position to continue our strategy going forward, with the assumption that no further lockdowns are required.

The company currently operates from a portfolio of around 422 stores (38 closed in the period with 3 stores refitted and 1 relocation to new formats). We operate a comprehensive digital proposition, enabling it to provide a multi-channel shopping experience to its customers.

Since the period end we have relocated a further 3 stores.

Strategy Update

The strategy outlined before the COVID-19 pandemic took hold, is still the general direction the Directors believe is the route to be taking going forward. The last 12 months has demonstrated the need to build on the significant successes within our Digital business. The investments we have made have put us in a strong position to enable our customers to buy throughout the lockdown, resulting in strong growth over this period. Digital growth will continue to be a big part of our future strategy along with our focus on Big Box and Hybrid expansion. These new stores will be at a lower pace due to cash constraints.

COVID-19 Update

We have had to adapt and reshape our business to react to extremely difficult trading conditions. We enter the second half of the financial year with the hope that we have seen the worst of the COVID-19 impact and look forward to the stores getting back to what we would call "normal" trading conditions, with no further lockdowns. 

No stores were open in the first 2 weeks of the 2nd half. Trading started strongly but has settled down to a more mixed picture of good High Street and retail park sales but weaker shopping centre performance.

Financial Summary

In the six months to 3 April 2021, the company generated revenues of £40.4m (2020 H1: £68.9m) and a loss before tax of £(2.6)m (2020 H1 £(2.5)m).

The reduction in revenue over the prior year reflects the continued impact of COVID-19. During the six months we experienced significant disruption in the supply chain and a fall in consumer spending for a significant number of months in the period, particularly in Jan, Feb and March when all stores were closed. In the period we saw an increase in Digital sales to £17.6m compared to last year of £5.5m, however the store deficit was £40.5m compared to last year.

The gross profit for this year reflects the sales related margin reduction year on year due to clearing excess stock and the benefit of the Government COVID business support schemes. Admin and distribution costs are higher than last year primarily due to £3.1m additional expenditure relating to the increase in Digital sales and a £0.5m increase due to foreign exchange revaluation.

The company ended the period with a net cash balance of £4.1m (2020 £3.6m). The increase in cash balance has been achieved through the measures taken by the business over the last 12 months, which restricted cash out of the business but also took advantage of the Government furlough scheme, the business rates holiday, retail grants and the ability to delay VAT. We should state that, compared to last year, we are behind on rental payments as we continue to negotiate better terms with Landlords.

Dividend

We are continuing to focus on cash preservation as the business comes out of lockdown and therefore no interim dividend will be paid. Our dividend policy remains on hold as previously stated.

 

 

Unaudited consolidated income statement

 

 

 

 

 

 

26 Wks end

26 Wks end

52 Wks end

 

 

 

 

 

 

3 Apr 2021

4 Apr 2020

3 Oct 2020

 

 

 

 

 

 

£'000

£'000

£'000

Revenue

 

 

 

 

 

40,435

68,944

122,568

Cost of Sales

 

 

 

 

(29,804)

(61,262)

(114,455)

Gross Profit

 

 

 

 

10,631

7,682

8,113

Administration Expenses

 

 

 

(7,906)

(6,273)

(13,928)

Distribution Costs

 

 

 

 

(4,477)

(2,927)

(6,895)

Loss from Operations

 

 

 

(1,752)

(1,518)

(12,710)

Finance Income

 

 

 

 

0

(1)

10

Finance Expense

 

 

 

 

(860)

(1,009)

(1,901)

Loss before Taxation

 

 

 

(2,612)

(2,528)

(14,601)

Taxation

 

 

 

 

 

497

480

2,698

Loss attributable to equity holders of the parent

 

(2,115)

(2,048)

(11,903)

 

 

 

 

 

 

 

 

 

Earnings per Share

 

 

 

 

(4.2)p

(4.1)p

(23.8)p

 

 

Unaudited consolidated statement of total comprehensive income

 

 

 

 

 

 

26 Wks end

26 Wks end

52 Wks end

 

 

 

 

 

 

3 Apr 2021

4 Apr 2020

3 Oct 2020

 

 

 

 

 

 

£'000

£'000

£'000

Loss for the period

 

 

 

(2,115)

(2,048)

(11,903)

Items that will not be reclassified subsequently to the

 

 

 

income statement

 

 

 

 

 

 

DB pension scheme

 

 

 

2,769

(642)

(2,114)

Movement in deferred tax on pension schemes

 

(526)

94

899

IFRS-16 Opening balances

 

 

 

0

(3,242)

0

Cash flow hedges

 

 

 

 

 

 

Fair value movements in other comprehensive income

(1,903)

(2,431)

(2,124)

Cash flow hedges recognised in inventories

 

0

2,868

0

Tax on cash flow hedges

 

 

 

364

(74)

363

Other comprehensive (expense)/Income for the period

704

(3,427)

(2,976)

Total comprehensive (expense)/Income for the period

(1,411)

(5,475)

(14,879)

attributable to equity holders of the parent

 

 

 

 

 

 

Unaudited consolidated statement of financial position

 

 

 

 

 

 

26 Wks end

26 Wks end

52 Wks end

 

 

 

 

 

 

3 Apr 2021

4 Apr 2020

3 Oct 2020

 

 

 

 

 

 

£'000

£'000

£'000

Assets

 

 

 

 

 

 

 

 

Non-current Assets

 

 

 

 

 

 

 

Property, plant and equipment

 

 

 

14,733

22,669

16,967

Right of use assets

 

 

 

 

36,464

53,456

42,387

deferred tax asset

 

 

 

 

5,455

1,597

5,617

Total Non-current assets

 

 

 

56,652

77,722

64,971

Current Assets

 

 

 

 

 

 

 

Inventories

 

 

 

 

28,433

25,727

26,698

Trade and other receivables

 

 

 

3,524

4,978

2,735

Derivative financial assets

 

 

 

0

2,751

0

Cash and cash equivalents

 

 

 

14,473

3,571

13,266

Total Current Assets

 

 

 

 

46,430

37,027

42,699

Total Assets

 

 

 

 

103,082

114,749

107,670

Current Liabilities

 

 

 

 

 

 

 

Trade and other payables

 

 

 

(12,250)

(31,167)

(17,316)

Lease liabilities

 

 

 

 

(15,629)

0

(19,914)

Derivative financial liability

 

 

 

(2,620)

0

(105)

Bank loans

 

 

 

 

(4,800)

0

(1,944)

Provisions

 

 

 

 

(1,756)

(573)

(1,471)

Corporation tax liability

 

 

 

0

0

(137)

Total Current Liabilities

 

 

 

(37,055)

(31,740)

(40,887)

Non-Current Liabilities

 

 

 

 

 

 

Trade and other payables

 

 

 

0

0

0

Lease liabilities

 

 

 

 

(40,042)

(46,521)

(37,475)

Bank loans

 

 

 

 

(5,600)

0

(5,056)

Provisions

 

 

 

 

(1,499)

(581)

(1,260)

Employee benefit liability

 

 

 

(7,899)

(9,952)

(10,594)

Total Non-Current Liabilities

 

 

 

(55,040)

(57,054)

(54,385)

Total liabilities

 

 

 

 

(92,095)

(88,794)

(95,272)

Net Assets

 

 

 

 

10,987

25,955

12,398

Equity attributable to equity holders of the company

 

 

 

 

Called up share capital

 

 

 

500

500

500

Merger reserve

 

 

 

 

2,662

2,662

2,662

Cash flow hedge reserve

 

 

 

(1,654)

2,008

(116)

Retained earnings

 

 

 

 

9,479

20,785

9,352

Total Equity and Reserves

 

 

 

10,987

25,955

12,398

 

 

Unaudited consolidated statement of changes in Equity

 

Share

Share

Cash flow

Retained

Total

 

Capital

Premium

Hedge

Earnings

 

 

 

 

Reserve

 

 

 

£'000

£'000

£'000

£'000

£'000

 

 

 

 

 

 

At October 2019

500

2,662

1,645

26,623

31,430

Loss for the period

0

0

0

(2,048)

(2,048)

Defined benefit pension movements

0

0

0

(642)

(642)

cash flow hedge movements

0

0

437

0

437

Right of use asset movement

0

0

0

(3,242)

(3,242)

Deferred tax on other comp. income

0

0

(74)

94

20

Total comprehensive income for the period

0

0

363

(5,838)

(5,475)

Dividends paid

0

0

0

0

0

Contributions by and distribution to owners

0

0

0

0

0

As at April 2020

500

2,662

2,008

20,785

25,955

 

 

 

 

 

 

At October 2019

500

2,662

1,645

26,623

31,430

Impact of transition to IFRS-16

0

0

0

(4,153)

(4,153)

Loss for the period

0

0

0

(11,903)

(11,903)

Defined benefit pension movements

0

0

0

(2,114)

(2,114)

cash flow hedge movements

0

0

(2,124)

0

(2,124)

Deferred tax on other comp. income

0

0

363

899

1,262

Total comprehensive income for the period

0

0

(1,761)

(17,271)

(19,032)

Dividends paid

0

0

0

0

0

Contributions by and distribution to owners

0

0

0

0

0

As at October 2020

500

2,662

(116)

9,352

12,398

 

 

 

 

 

 

At October 2020

500

2,662

(116)

9,352

12,398

Loss for the period

0

0

0

(2,115)

(2,115)

Defined benefit pension movements

0

0

0

2,769

2,769

cash flow hedge movements

0

0

(1,903)

0

(1,903)

Deferred tax on other comp. income

0

0

364

(526)

(162)

Total comprehensive income for the period

0

0

(1,539)

128

(1,411)

Dividends paid

0

0

0

0

0

Contributions by and distribution to owners

0

0

0

0

0

As at April 2021

500

2,662

(1,655)

9,480

10,987

 

 

Unaudited consolidated statement of cash flows

 

 

26 Wks end

26 Wks end

52 Wks end

 

 

3 Apr 2021

4 Apr 2020

3 Oct 2020

 

 

£'000

£'000

£'000

Operating activities

 

 

 

 

Loss after tax

 

(2,115)

(2,048)

(11,903)

Corporation tax

 

(497)

(480)

(2,698)

Finance income

 

0

(8)

(10)

Finance expense

 

860

1,018

1,901

Depn of property, plant and machinery

 

1,598

1,573

3,545

FA impairment and loss on disposal of property,

 

840

66

4,642

  plant and machinery

 

 

 

 

ROUA on disposal, depn and impairment

 

7,782

9,722

23,998

Pension contributions paid

 

0

(417)

(1,466)

 

 

8,468

9,426

18,009

Decrease/(increase) in trade and other receivables

 

(789)

1,324

(810)

Decrease/(increase) in foreign exchange contracts

 

613

0

336

Decrease/(increase) in inventories

 

(1,735)

3,196

2,184

(Decrease)/increase in trade and other payables

 

(5,066)

(17,857)

(5,498)

Increase in provisions

 

524

110

1,646

 

 

(6,453)

(13,227)

(2,142)

Cash generated from operations

 

2,015

(3,801)

15,867

Net corporation tax paid

 

360

(1,888)

(283)

Net cash flows from operating activities

 

2,375

(5,689)

15,584

Investing activities

 

 

 

 

Purchase of property, plant and machinery

 

(204)

(2,165)

(2,809)

Interest received

 

0

8

10

Net cash used in investing activities

 

(204)

(2,157)

(2,799)

New secured loan repayable by instalments

 

5,000

0

10,000

Repayment of secured loan

 

(1,600)

0

(3,000)

Capital element of lease repayments

 

(4,210)

0

(17,719)

Interest paid

 

(154)

0

(217)

Dividends paid during year

 

0

0

0

Net cash used in financing activities

 

(964)

0

(10,936)

Net increase in cash and cash equivalents

 

1,207

(7,846)

1,849

Cash and cash equivalents at beginning of period

 

13,266

11,417

11,417

Cash and cash equivalents at end of period

 

14,473

3,571

13,266

 

 

Notes to the financial statements for the 26 weeks ended 3 April 2021

Basis for preparation

The consolidated interim financial statements of the company for the 26 weeks ended 3 April 2021, which are unaudited, have been prepared in accordance with the same accounting policies, presentations and methods of computation followed in the condensed set of financial statements as applied in the group's latest audited financial statements. A copy of those accounts has been delivered to the Registrar of Companies.

The financial information for the 26 weeks ended 3 April 2021, contained in this interim report, does not constitute the full statutory accounts for that period. The independent Auditors' report on the Annual Report and Financial Statements for 2020 was unqualified, did not draw attention to any matters by way of emphasis. And did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

The consolidated interim financial statements have neither been audited nor reviewed pursuant to guidance issued by the Auditing Practices Board.

The condensed consolidated interim financial statements have been prepared on a going concern basis and under the historic cost convention, as modified by the revaluation of derivative financial instruments to far value.

The condensed consolidated interim financial statements are presented in sterling and have been rounded to the nearest thousand (£'000).

The preparation of financial information in conformity with IFRS requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual events ultimately may differ from those estimates.

1.  Accounting policies

In preparing these interim financial statements, the significant judgements made by management in applying the group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements reported in the latest annual audited financial statements for the 52 weeks ended 3 Oct 2020.

 

Going Concern

At the balance sheet date the company had a good cash balance and a strong net asset position. At the time of reviewing these accounts, the Directors have considered the effect of COVID-19 on the ongoing position, and consider that this does indicate that the company will continue to trade for a period of at least 12 months from the date of publishing these accounts due to the banking facilities available to it and the UK Government support available to businesses during this time.

The cash forecast prepared by the Directors show that the company will be able to operate within the facilities available to it and on that basis, the Directors have prepared these financial statements on a going concern basis.


 

 

 

Events after the period end

Subsequent to the period end, the COVID-19 lockdown ended with non-essential retailers able to open from April onwards. Assuming that this will be the last period of lockdown, the Directors believe that the company is strongly positioned to progress positively.

 

2.  Segmental Information

The group complies with IFRS 8 'Operating Segments' which determines and presents operating segments based on information provided to the chief operating decision maker. The chief decision maker has been identified as the management team including the Chief Executive and Finance Director. The Board considers that each store is an operating segment but there is only one reporting segment as the stores qualify for aggregation, as defined under IFRS 8. 

 

 

 

 

 

3 Apr

4 Apr

3 Oct

 

 

 

 

 

2021

2020

2020

External revenue by location of customers:

£'000

£'000

£'000

 

 

 

 

 

 

 

 

United Kingdom

 

 

 

21,934

61,871

100,098

Digital

 

 

 

 

17,624

5,471

19,296

Republic of Ireland

 

 

 

675

1,602

2,678

Other

 

 

 

 

202

0

496

 

 

 

 

 

40,435

68,944

122,568

 

There are no customers with turnover in excess of 10% of total turnover.

 

 

 

 

 

 

3 Apr

4 Apr

3 Oct

 

 

 

 

 

2021

2020

2020

Non-current assets by location

 

 

£'000

£'000

£'000

 

 

 

 

 

 

 

 

United Kingdom

 

 

 

15,732

22,650

16,962

Republic of Ireland

 

 

 

0

19

5

 

 

 

 

 

15,732

22,669

16,967

 

 

 

3. Derivative financial assets

 

At the balance sheet date, details of the forward contracts that the group has committed to are as follows:

 

 

 

 

 

3 Apr

4 Apr

3 Oct

 

 

 

 

 

2021

2020

2020

 

 

 

 

 

£'000

£'000

£'000

Derivative financial assets

 

 

 

 

 

Not designated as hedging instruments

 

(578)

332

34

Designated as hedging instruments

 

(2,042)

2,419

(139)

 

 

 

 

 

(2,620)

2,751

(105)

 

4. Taxation

The taxation credit for the 26 weeks ended 3 April 2021 is based on an estimated effective tax rate for the full year of 19% (2020:19%)

 

 

5. Earnings per share

 

 

 

 

 

3 Apr

4 Apr

3 Oct

 

 

 

 

 

2021

2020

2020

 

 

 

 

 

£'000

£'000

£'000

Profit in the period and earnings used in basic

 

 

 

  diluted earnings per share

 

 

(2,115)

(2,048)

(11,903)

 

 

 

 

 

 

 

 

 

 

 

 

 

(4.2)p

(4.10)p

(23.8)p

 

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 [email protected] 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
 
 
IR GPUGUAUPGGMM

a d v e r t i s e m e n t