TIDMDC.
RNS Number : 5538D
Dixons Carphone PLC
30 June 2021
30 June 2021
Audited Results for the Year Ended 1 May 2021
Strong performance in a challenging year
We Help Everyone Enjoy Amazing Technology
Key Highlights
-- Strong trading in all markets; market share gains in all open channels
-- Electricals online sales growth +103% to GBP4.7bn
-- Significant acceleration in omnichannel transformation
-- Strong cash flow generation driving return to net cash balance sheet
-- Repaid governments GBP73m of furlough paid to UK &
Ireland colleagues during the year and GBP144m VAT deferral
-- Restarting dividend; full year dividend of 3.0p proposed
Financial Performance
-- Electricals LFL +14%, despite UK, Ireland, Norway, Denmark
and Greece stores being shut for substantial periods
-- Group total revenue +2% as LFL growth offset by impact of high street store closures in Mobile
-- Group adjusted profit before tax GBP156m (2019/20: GBP116m)
-- Group statutory profit before tax of GBP33m (2019/20: loss of GBP(140)m)
-- Free cash flow GBP438m (2019/20: GBP109m) aided by acceleration of Mobile network debtor cash
-- Year-end net cash(1) GBP169m (2019/20: net debt GBP(204)m)
Transformation progress accelerated following Covid-19
disruption
-- Omnichannel: ShopLive launched and scaling up, order &
collect and online-in-store sales growing fast
-- Credit: UK Electricals active credit customers 1.4m, +20% year-on-year
-- Services: Nordics Customer Club grown to over 5.4m members,
equivalent to >40% of Nordic households
-- Mobile: Improved contract agreed with Vodafone and with Three for our MVNO, iD Mobile
There are a number of non-GAAP measures and alternative pro t
measures "APMs", discussed within this announcement, a glossary and
reconciliation to statutory measures are provided within the
Glossary and Definitions section at the end of this report.
Adjusted results are consistent with how business performance is
measured internally and presented to aid comparability of
performance. Refer to adjusting items table set out in the glossary
to the condensed financial statements for further details.
Alex Baldock, Group Chief Executive
"I'm so proud of my colleagues. They've navigated the challenges
of the pandemic with skill and energy, helped many millions of
people enjoy vital technology, kept our transformation on track,
and performed strongly. Our big investments in colleague wellbeing,
skills and reward have meant more engaged colleagues, and in turn
more satisfied customers. This bodes well for our sustainable
success.
Technology has become even more central to people's lives. As
the market leader, with the winning omnichannel business model, we
can make the most of that. The past year has seen us do so, growing
a big online business and adding it to our in-store strengths.
We're now financially stronger too, allowing us to pay back over
GBP200m to governments and to recommence our dividend.
But we're most excited about what lies ahead. New technology
platforms will add more fuel to our growth and to innovation that
customers love and no-one else can get close to, whether getting
them their amazing technology ever-faster, or helping them 24/7
with live video shopping.
This year, we move to one brand in the UK (as we have in each
international market), and Currys can become ever-more the first
choice for all things tech, electrical and mobile, products and
services alike. The start of the financial year has seen continued
strong trading in all our markets and I'm more confident than ever
in our prospects."
Divisional Highlights
-- UK&I Electricals revenue +8% (LFL +14%), adjusted EBIT
GBP209m, +GBP45m year-on-year (Statutory EBIT GBP78m)
o Online sales +114% to GBP3.4bn, offsetting sales loss from
enforced store closures and in Dixons Travel
o Online market share gain +6.0ppts, store market share up when
stores open
o Grew number of customers with whom we have a relationship and
contact permissions to 9.6m (from 3.5m)
-- International revenue +16% (LFL +15%), adjusted EBIT GBP170m,
+GBP23m year-on-year (Statutory EBIT GBP158m)
o Online sales +79% to GBP1.3bn, contributing 28% of sales,
+10ppts year-on-year
o Nordics share growth +0.8ppts, delivering another year of
record sales, profit and customer satisfaction
o Greece sales +10% and profits robust despite widespread store
closures
-- UK&I Mobile revenue down (55)%, adjusted EBIT loss
GBP(117)m, GBP(20)m year-on-year (Statutory EBIT loss GBP(89)m)
o Sales declined due to UK standalone Carphone Warehouse store
closures announced in March 2020, exacerbated by unexpected
enforced 3-in-1 store closures
o Network debtor unwind drove segmental free cash flow of
GBP143m
Performance Summary
Group sales were +1% higher than last year on a currency neutral
basis, as +11% growth in our Electricals business was offset by the
decline in Mobile sales.
Statutory Revenue 2020/21 2019/20 Reported Currency neutral Like-for-Like
GBPm GBPm % change % change % change
--------------------------- -------- -------- ---------- ----------------- --------------
UK & Ireland Electricals 4,921 4,538 8% 8% 14%
International 4,702 4,043 16% 14% 15%
- Nordics 4,186 3,573 17% 15% 16%
- Greece 516 470 10% 8% 11%
--------------------------- -------- -------- ---------- ----------------- --------------
Electricals 9,623 8,581 12% 11% 14%
--------------------------- -------- -------- ---------- ----------------- --------------
UK & Ireland Mobile 721 1,589 (55)% (55)%
--------------------------- -------- -------- ---------- ----------------- --------------
Group 10,344 10,170 2% 1%
--------------------------- -------- -------- ---------- ----------------- --------------
Gross margin declines due to the shift of sales online were more
than offset by operating leverage from stronger sales and cost
savings, resulting in improved operating margins. This drove higher
cashflow and alongside working capital inflow meant the group
generated free cash flow of GBP438m and ended the year with GBP169m
of net cash.
Profit and Cash Flow Summary 2020/21 2019/20 2020/21 2019/20 Currency neutral
Statutory Statutory Adjusted Adjusted Reported % change
GBPm GBPm GBPm GBPm % change
------------------------------ ----------- ---------- ---------- ---------- -----------------
Segmental EBIT
UK & Ireland Electricals 78 119 209 164 27% 27%
International 158 135 170 147 16% 16%
Electricals 236 254 379 311 22% 22%
EBIT Margin 2.5% 3.0% 3.9% 3.6% 30 bps
------------------------------ ----------- ----------- ---------- ---------- ---------- -----------------
UK & Ireland Mobile (89) (282) (117) (97) (21)% (23)%
------------------------------ ----------- ----------- ---------- ---------- ---------- -----------------
EBIT 147 (28) 262 214 22% 22%
EBIT Margin 1.4% (0.3)% 2.5% 2.1% 40 bps
Net finance costs (114) (112) (106) (98)
------------------------------ ----------- ----------- ---------- ---------- ---------- -----------------
Profit / (Loss) Before Tax 33 (140) 156 116 34% 34%
------------------------------ ----------- ----------- ---------- ---------- ---------- -----------------
Tax (33) (21) (33) (38)
------------------------------ ----------- ----------- ---------- ---------- ---------- -----------------
Profit / (Loss) After tax - (161) 123 78
------------------------------ ----------- ----------- ---------- ---------- ---------- -----------------
EPS - continuing operations -p (13.9)p 10.7p 6.7p
------------------------------ ----------- ----------- ---------- ---------- ---------- -----------------
Operating cashflow 338 299 13% 18%
Operating cashflow margin 3.3% 2.9% 40 bps
Free cash flow 438 109 302% 324%
Year-end net cash / (debt) 169 (204)
------------------------------ ----------- ---------- ---------- ---------- -----------------
Current Trading
The start to the financial year has seen continued strong
trading. We continue to see evidence that our markets will be
structurally larger post-pandemic, and that not all last year's
growth was pulled forward. In UK&I Electricals, our sales are
up on last year, with around half of the sales through our stores,
as expected. In International, our sales are trending positively
against strong growth in the previous year.
Guidance
Current year guidance
-- To maintain a net cash position at year end
-- Capital expenditure of around GBP190m
-- Net exceptional cash costs of less than GBP100m (from GBP130m previously guided)
Medium term guidance :
-- Group to generate cumulative free cash flow of more than GBP1bn over 2019/20 to 2023/24
-- Group expects at least 4.0% EBIT margin by 2023/24 (equivalent to 3.5% on a pre-IFRS16 basis)
-- Total positive cashflow from UK&I Mobile over 2020/21 to
2023/24 will be at least GBP200m (from previously guided
GBP125-175m range), including GBP143m generated in 2020/21
-- Annual pension contributions will rise to GBP78m from 2021/22
onwards
-- Dividend of 3.0p expected to grow, further details to be
provided in due course
Notes
1. Net cash / (debt) has been redefined in the period to
comprise only cash and cash equivalents and short-term deposits,
less borrowings. As such, the year ended 2 May 2020 has been
restated. A full reconciliation to net cash / (debt) can be found
in note A10 within the Glossary and Definitions section.
Results presentation webcast
There will be a recorded presentation for investors and analysts
available at 7:00am today, followed by a live Q&A at 9:00am.
The presentation slides will be available via the webcast and on
www.dixonscarphone.com
Next scheduled announcement
The Group's AGM will be held on 15 September 2021.
The Group is planning a Capital Markets Day for 4 November
2021.
The Group is scheduled to publish its Interim results covering
the 26 weeks to 30 October 2021 on Wednesday 15 December 2021.
For further information
Assad Malic Group Strategy & Corporate Affairs Director +44 (0)7414 191044
Dan Homan Head of Investor Relations +44 (0)7401 400442
Amy Shields Director of External Communications +44 (0)7588 201442
Tim Danaher, Sam Chiene Brunswick Group +44 (0)207 4045959
========================= ============================================= ===================
Information on Dixons Carphone plc is available at
www.dixonscarphone.com
Follow us on Twitter: @dixonscarphone
About Dixons Carphone
Dixons Carphone plc is a leading omnichannel retailer of
technology products and services, operating through 829 stores and
16 websites in 7 countries. We Help Everyone Enjoy Amazing
Technology, however they choose to shop with us.
We are the market leader in the UK & Ireland, throughout the
Nordics and in Greece, employing 35,000 capable and committed
colleagues across the Group. Our full range of services and support
makes it easy for our customers to discover, choose, afford and
enjoy the right technology for them, throughout their lives. The
Group's operations are supported by a sourcing office in Hong Kong,
state-of-the-art repair facilities and an extensive distribution
network, enabling delivery to stores and homes.
Our brands include Currys PC World the UK & Ireland and
Carphone Warehouse and iD Mobile in the UK where our services are
provided through Team Knowhow; Elkjøp, Elgiganten and Gigantti in
the Nordics; and Kotsovolos in Greece.
Certain statements made in this announcement are
forward-looking. Such statements are based on current expectations
and are subject to a number of risks and uncertainties that could
cause actual results to differ materially from any expected future
events or results referred to in these forward-looking statements.
Unless otherwise required by applicable laws, regulations or
accounting standards, we do not undertake any obligation to update
or revise any forward-looking statements, whether as a result of
new information, future developments or otherwise. Information
contained on the Dixons Carphone plc website or the Twitter feed
does not form part of this announcement and should not be relied on
as such.
We Help Everyone Enjoy Amazing Technology
Our vision is to help customers choose, afford and enjoy amazing
technology for life. By offering the best range of products, credit
and services through digital-first omnichannel we will build
customer relationships that are stickier and more valuable over
time. This will benefit our customers, our colleagues, our
shareholders and society.
Chief Executive's Review
The last year has been extraordinary and challenging with
unprecedented national lockdowns and enforced store closures in the
UK, Ireland, Greece, Denmark and parts of Norway.
Throughout the pandemic our priorities have been to keep our
colleagues and customers safe, and to help customers with the vital
technology they need to keep them connected with loved ones, their
families fed, clean and entertained, to work from home and to
home-school their children.
To do this, and restricted by enforced store closures, we
transformed our operations and services almost overnight, including
operating our UK and Greek businesses as online-only retailers for
the first time in their history. We were able to do so because of
our hard work pre-pandemic to build a stronger online arm to our
business. Our investments in a bigger range, unbeatable prices,
better availability, improved delivery options and performance, and
a higher capacity technology platform, all paid off. We built on
this with innovation during the pandemic, introducing zero-contact
one-hour order & collect and ShopLive, our 24/7 live video
shopping service.
With heightened demand came unprecedented disruption in customer
service, especially in customer support. With the enforced closure
of our contact centres, we had to develop instant work-from-home
solutions, and recruit heavily, including the transfer of over 700
store colleagues who volunteered to help meet demand. Their work
has been rewarded by the recovery of customer satisfaction to flat
(or better) year-on-year for the full year.
These actions, together with heightened demand for technology,
allowed us to generate strong and sustained sales growth in every
market. We saw growth in every major product category, but
computing was the standout performer as people adjusted to home
working, learning and entertainment.
Despite the impact of the pandemic, we're a stronger business
than a year ago. We've gained share in all open channels, our
online business has more than doubled, we've gained millions of new
customers and our Mobile transformation has been highly cash
generative. Our sales and profits are up healthily in the year and
our balance sheet position has materially improved. From net debt
of GBP(204)m a year ago, we ended the year with GBP169m of net cash
alongside lower pension and lease liabilities and new financing
facilities in place to April 2025.
We've also continued to streamline and simplify the business,
with difficult but necessary actions taken to exit Carphone
Warehouse Ireland and Dixons Travel.
None of this would have been possible without the outstanding
commitment and skill of our 35,000 colleagues. They've shown
remarkable resilience and resourcefulness in testing circumstances.
Capable and committed colleagues are at the heart of our agenda for
a reason: happy colleagues make for happy customers, and we
continue to invest in the skills, wellbeing, systems, tools and
processes to help colleagues do their job well. We're recognising
their exceptional work through fair reward: we have committed to
increasing minimum hourly wages for almost 12,000 UK colleagues
from October (to at least current real living wage levels) and
continue to make all colleagues shareholders, having granted share
awards to an additional 7,000 colleagues during the year. Our
colleagues have recognised all this progress in sharply increased
engagement scores.
We've remained mindful of our responsibilities to all
stakeholders. We've increased support to our charity partners,
including a GBP1m donation to 'Digital Access For All' to tackle
the digital divide. We've paid all our suppliers and landlords,
made all pension contributions on time and in full, and reimbursed
all government support for the GBP73m of furlough paid to UK and
Ireland colleagues during the year. We're also restarting the
payment of dividend to shareholders.
We believe that Covid-19 has structurally increased the size of
the technology market. Hybrid working will become normal, and
in-home entertainment will stay bigger. More time at home means
more usage, and more customers' eyes have been opened to what new
technology can do, both of which point to faster replacement. A
larger installed base means more upgrades, repairs and recycling
and means more opportunity to sell complementary products and
services. Technology, in short, is playing a bigger, more important
role in many millions of lives, and accounts for an accordingly
higher share of wallet. We're not alone in this view: our partners,
some of the world's leading technology suppliers, believe, as we
do, that technology is now an essential (and sustainably larger)
category for consumers.
As the leading omnichannel retailer of technology products and
services in all our markets, we are ideally positioned to
capitalise on this opportunity, and will make sure we do so by
continuing our transformation. The coming year is the final year of
accelerated investment. It will see a step change to our consumer
websites in the UK and Nordics, with a radically easier and richer
online customer experience. We'll continue to scale up ShopLive,
and improve our credit offers across the Group. In the UK, we'll be
launching an exciting new mobile proposition and we're moving to
one brand - Currys. Under this brand we'll continue to make it
easier for customers to choose, afford and enjoy amazing
technology, however they want to shop.
The combination of a structural market tailwind, our stores
returning to full trading and the execution of these
transformational programmes mean we also expect future market share
gains, providing stronger revenue growth prospects for our business
over the medium term.
Alongside this, we expect improvements in our profitability to
come through after this year as we eliminate Mobile losses and
complete the transition to One Business. We see greater
opportunities to create more value in all our markets, including in
the Nordics and the Group's capital position has already been
significantly strengthened. We've therefore decided to keep our
strong Nordics business as a fully owned part of this Group and
will not be pursuing a partial IPO.
These results, and the plentiful progress behind them,
demonstrate why I'm more confident than ever that we're on the
right path to create a world class business for colleagues,
customers, shareholders and society. I am privileged and excited to
be part of it.
Strategic Review
The transformation of the Group revolves around four priorities;
Omnichannel, Credit, Services and Mobile underpinned by three
enablers; Capable and Committed Colleagues, One Business and
Stronger Infrastructure.
Omnichannel
The disruption to our stores placed a big onus on our online
business, and on our work in prior years to improve it. Those
improvements in the 'online fundamentals' of range, availability,
price, delivery and platform capacity have allowed us to grow
online strongly in every market; UK&I Electricals + 114%,
Nordics +74% and Greece +186%. In total, we recorded over GBP4.7bn
of online revenue during the year.
In the UK, we saw a +67% increase in website traffic which, with
better conversion rates and improved average order values, drove
sales growth. The proportion of traffic that came directly to the
website increased to over 70%, highlighting the strength of the
currys.co.uk brand. Traffic from our own CRM emails also more than
doubled as we grew the number of relationship customers with
contact permissions to 9.6m from 3.5m a year ago. This is very
encouraging for future growth: we know more customers better, and
have better means to reach them, so can help them better and more
frequently in ways valuable to all concerned.
The rebranding of our UK business to Currys will further boost
brand awareness and traffic. And our consumer websites will undergo
a significant overhaul, leading to a richer user experience that
will benefit conversion, average basket sizes and adoption of
credit and services. Our strong growth online in the past year has
been achieved despite the constraints of a legacy platform. We are
now removing those constraints, with new platforms landing in the
UK and the Nordics.
In the Nordics, we saw big improvements again this year. Total
traffic grew +16% as website visits increased to 367m, making
Elkjop one of the most visited online retailers in the Nordics,
regardless of industry. In combination with improved conversion and
increased average order values, this resulted in online growth of
+74%. This performance was partly driven by the use of 'Dynamic
Yield' to provide a richer experience to our customers and improve
gross margins online through pop-ups and recommendations on
products, bundles and services.
In Greece, Kotsovolos website traffic jumped +58%, generating
+164% more transactions than the prior year. To fulfil this
elevated demand, each store developed its own logistics capability,
resulting in our daily delivery capacity rising to 30,000 orders,
from 6,000 in the previous year. Small box deliveries in the year
more than tripled to 780,000.
This online growth is only part of our progress. Omnichannel is
our way of bringing the strengths of all our channels - stores and
online - to all our customers, however they may be shopping on any
given day. Omnichannel is the way customers want to shop for
technology, with 60% of UK customers preferring to use both
channels.
We're focused on three big customer benefits of Omnichannel that
we're best-placed to provide. First, for our customers in-store,
we're never "out of stock". Our 'Order Online In-Store' sales,
where our in-store colleagues sell customers products from the
online range, grew by +76%, despite sales from this being zero in
four months of the year. This ability is becoming more beneficial
as we extend our online ranges. In UK & Ireland we now sell
18,000 products, having added 6,000 in the year, while the Nordics
range has increased to over 100,000 (including marketplace). There
is further scope for growth from a bigger range, especially in the
UK, and it will be enhanced by technology platform improvements
this year.
Second, customers can get hold of their technology right now
through order online & collect in store. In the UK it accounted
for almost 30% of online sales when stores were open, with over 55%
of these orders for same day collection, showing that customers
value the nationwide store network that enables this. In the
Nordics, where customers in Norway benefit from a 30-minute order
& collect promise, 41% of online sales were through order &
collect, up from 39% in the previous year despite store
restrictions. This encourages us to keep working to reduce the
order & collect time in all markets to a target of 15 minutes,
which will drive further growth.
Third, customers can now always get the expert face-to-face
advice they value, not just in store, but anywhere, 24/7, through
ShopLive video shopping. This innovation has grown rapidly and in
the UK alone it generated over GBP100m of sales. Customers prefer
this to an unassisted online experience. They are four times as
likely to purchase, they spend 55% more, and tell us they are more
satisfied. It is not only customers that benefit. Our colleagues
can keep selling even when a store is quieter and can build
specialist skills to a greater extent than if they only served
customers walking in off the street. ShopLive benefits our business
by productively using in-store downtime to sell nationally, making
our colleague cost more efficient and supporting the economics of
the individual store and the national network. We have extended
this innovation to the Nordics where we are seeing encouraging
early progress. We will continue to scale up ShopLive and expect it
to be an important channel in the future, driving both growth and
profitability.
In the Nordics, we are continuing to roll out our Next
Generation Retail platform. This is an update of many of our online
and store systems and an overhaul of processes that will generate a
seamless Omnichannel experience for our customers, and further fuel
growth and margin improvements. We started the roll out to our
stores in Denmark in April 2020. Despite Covid-19, the roll-out to
stores has proceeded on time and on budget and the new systems are
now live in 369 stores. Over the next year, these changes will also
be reflected in the customer facing websites.
Credit
Credit appeals to customers. Technology is expensive, and Credit
makes the amazing technology customers want more affordable by
allowing them to spread the cost. We take our responsibility in
providing access to credit seriously and we train all frontline
colleagues to sell responsibly.
UK credit sales grew +8% in the year, with total active
customers up +20%. The adoption rate of credit was at least stable
in both channels but the large swing of sales towards online meant
that total adoption fell to 10.8%, from 11.2% last year.
Nevertheless, we're confident we remain on track for our 16%
targeted adoption rate. We will use the new credit platform
('Strategic Credit') which is on track for launch this year, more
flexible and tailored credit propositions and our better CRM to
stimulate repeat spend from our base of 1.4m active customers (and
higher utilisation of available balances), as well as continue to
acquire more new credit customers.
In Nordics, we signed financial service agreements with
Santander in Norway and Denmark and Ecster in Sweden and Finland.
Credit is being integrated to be part of the overall customer
journey, no longer requiring a separate process, which will enable
higher adoption.
Services
We are uniquely positioned to provide services to our customers
to help them enjoy technology for life, at scale, in ways no
competitor can match. We get products working through delivery,
installation and set-up, keep them working through protection and
repair, help get the most out of products through connectivity and
subscriptions, and, at the end of life, trade-in and recycle
products. In the UK, almost 30% of sales included a service, well
down on pre-pandemic levels as closed stores were unable to sell or
fulfil services, a trend we expect to reverse in the coming
year.
In the UK, we delivered over 26m products, including over 16.5m
big-box products through our own two-person delivery network. We
installed 6.4m of these products, a +60% increase on last year.
Our 1,350-person repair team fixed over 1 million products last
year, including over 350,000 computing and vision repairs, over
370,000 mobile phones and more than 280,000 white goods repairs,
most of these in customers' homes. These volumes are materially
lower than the previous year as the pandemic restrictions prevented
many in-store and in-home repairs from taking place.
Our trade-in enables customers to get value from old products,
making new technology more affordable and is good for
sustainability, preventing items entering the waste stream. This
area was most significantly impacted by store closures and, at
62,000 items in the UK, our trade-in volume was down (76)% on last
year.
We recycled 104,173 tonnes of Waste Electrical and Electronic
Equipment (WEEE) last year. We will recycle all tech brought into
stores for free, whether you bought it from us or not, and although
volumes were down in UK stores, strong uptake of recycling services
and Group progress meant that overall volumes were stable on last
year. We are also committed to a 'Greener' product range in the UK
and Nordics to make it easier for customers to make more
sustainable choices. Finally, we are the first UK specialist
electricals retailer to commit to net zero carbon by 2040 and to
electric and alternative fuel vehicles by 2030.
We expect all this to provide us with commercial benefits. As
more and more consumers are mindful of the planet as well as their
pocket, so more will prefer the retailer helping extend the life of
their technology, and at the end of life, deal responsibly with it.
Our leadership in repair and recycling positions us well here, and
we intend to make the most of it.
We are continuing to join up these services with improved data
to create customers for life. Our Nordics Customer Club continues
to grow, and we had 5.4m members at the end of the year, having
added 2.2m customers in the year, equivalent to over 40% of Nordics
households. The benefits to customers include discounts on some
products, exclusive deals, extended try and buy and early access to
Black Friday deals. Over the next year we will increasingly use the
rich data and insight this gives us to improve personalised
communication and strengthening customer relationships.
Mobile
Our UK & Ireland Mobile sales declined (55)% due to the
impact of the permanent closure of our small standalone Carphone
Warehouse UK stores, announced in March 2020. This was exacerbated
by the impact of the unexpected, enforced store closures in the UK
which impacted sales transfer.
As we promised, we will deliver the transformation of Mobile,
away from the heavily loss-making traditional post-pay business,
whilst generating positive cashflow. We now have no minimum volume
commitments and full control over what we sell. The operating
losses and restructuring costs have been more than funded by the
unwind of the network receivable. Due to good progress and
segmental free cash flow of GBP143m in the year, we now expect that
net positive cashflow from restructuring of the legacy business
will be over GBP200m from 2020/21 to 2023/24.
We have also secured new connectivity and better terms. In the
UK, we signed a new agreement with Three to extend our iD Mobile
MVNO and, after the year-end, we were pleased to have reached a new
exclusive multiyear partnership with Vodafone.
In the year ahead, we will launch our own mobile offer, giving
customers market-beating transparency, flexibility and value,
combining the best choice of handsets, connectivity and ways to
pay. We will provide this new mobile offer under the Currys brand,
as a fully integrated part of One Business. This will in turn allow
us to streamline much of the legacy cost base of Mobile.
Our new mobile offer will mark the final step in our
transformation of Mobile. The next year will see UK Mobile
transformed from a heavily loss-making business to a smaller, but
profitable, cash-generative and capital light category, which we
expect to achieve by 2022/23. As the business will be materially
smaller and integrated into our UK&I Electricals business, we
will report both as a single UK&I segment from 2021/22
onwards.
Capable and Committed Colleagues
There remains no bigger priority than colleague and customer
safety. Throughout the pandemic, we have protected colleagues while
meeting high customer demand. We have spent GBP14m to implement
extensive hygiene and social distancing measures at our facilities
and stores to ensure our sites are Covid-secure. We have worked
with the BRC and the Government to help set the industry standard
for Covid-19 safety measures, provided voluntary testing in our
larger sites and have extended temperature checks to stores. This
has enabled our colleagues to safely continue delivering vital
technology to customers.
We invested in training, to help colleagues build skills for
life. Our colleagues completed almost 600,000 hours of training in
the year, both face-to-face where safely possible and online,
focussed on improved assisted sales. We reskilled colleagues so
that 700 colleagues could be redeployed to UK customer service to
cope with demand and we have trained more than 2,800 retail
colleagues to support ShopLive.
Finally, we have made sure that colleagues are well rewarded. We
paid a special thank you bonus to supply chain colleagues and we
have announced that, from October, UK hourly wages will increase by
an average of 9%, bringing them in line with the current Living
Wage Foundation's recommendation, benefiting almost 12,000
colleagues. We continue to make all our colleagues shareholders,
with another 7,000 colleagues granted share awards in the year,
ensuring we're all invested in our future success. All this has
resulted in sharply increased colleague engagement levels.
One Business
After the year-end, we announced that in the United Kingdom
& Ireland, Currys PC World, Carphone Warehouse and Team KnowHow
will all become a single brand 'Currys' by October 2021. Consumers
have a high awareness of, and deep affection for Currys, a trusted
brand providing vital technology to customers to enrich their lives
since 1884. We expect the single brand to mean more customers see
Currys as their natural choice for electricals and mobile, products
and services.
Stronger Infrastructure
Our investment in further improvements to our infrastructure was
suspended during the early months of the pandemic but has resumed
since. We have opened a new Regional Distribution Centre (RDC) in
Bolton to amalgamate existing centres in Leeds and Manchester,
which has seen improved efficiency and delivery capacity. We have
replaced our decade-old UK&I Warehouse Management System,
driving better forecasting and more efficient operations across
Newark and our four RDCs.
We have reached an agreement with XPO logistics to run our
warehouses in Newark, Bolton, and London Gateway distribution
centres. The same teams will work for our customers from the same
locations - but with the added benefit of XPO's expertise,
experience and tools to help us.
Performance Review
Group sales were +2% higher than last year, as +12% growth in
our Electricals business was offset by the anticipated decline in
Mobile sales. Adjusted EBIT grew +22% as UK&I Electricals and
Nordics grew profits, offset by a small decline in Greece and large
operating losses in UK&I Mobile.
Segmental free cash flow more than tripled to GBP497m, because
of large working capital inflow in UK&I Mobile more than
offsetting the operating losses and restructuring costs. Total free
cash flow was GBP438m which after pension and other payments
generated cash flow of GBP373m, improving the year end position to
net cash of GBP169m.
Income Statement 2020/21 2019/20 Reported Currency neutral
GBPm GBPm % change % change
-------------------------------------------------- -------- -------- ---------- -----------------
Revenue 10,344 10,170 2% 1%
Adjusted EBITDA 598 556 8% 7%
-------------------------------------------------- -------- -------- ---------- -----------------
Adjusted EBITDA margin 5.8% 5.4% 40 bps 40 bps
Depreciation on right-of-use assets (200) (217)
Depreciation on other assets (79) (81)
Amortisation (57) (44)
-----------------
Adjusted EBIT 262 214 22% 22%
Adjusted EBIT margin 2.5% 2.1% 40 bps
Interest on right-of-use assets (77) (80)
Finance income 6 10
Adjusted finance costs (35) (28)
Adjusted PBT 156 116 34% 34%
Adjusted PBT margin 1.5% 1.1% 40 bps 40 bps
Adjusted tax (33) (38)
-------------------------------------------------- -------- -------- ---------- -----------------
Adjusted Profit after tax 123 78
-------------------------------------------------- -------- -------- ---------- -----------------
Adjusted EPS 10.7p 6.7p
-------------------------------------------------- -------- -------- ---------- -----------------
Statutory reconciliation
Adjusting items to EBITDA (89) (217)
-------------------------------------------------- -------- -------- ---------- -----------------
Statutory EBITDA 509 339
Adjusting items to depreciation and amortisation (26) (25)
-------------------------------------------------- -------- -------- ---------- -----------------
Statutory EBIT 147 (28) 625% 603%
EBIT Margin 1.4% (0.3)% 170 bps 170 bps
Adjusting items to finance costs (8) (14)
Statutory PBT 33 (140)
Adjusting items to Tax - 17
Discontinued operations 12 (2)
-------------------------------------------------- -------- -------- ---------- -----------------
Profit / (Loss) after tax 12 (163)
-------------------------------------------------- -------- -------- ---------- -----------------
EPS - total 1.0p (14.1)p
-------------------------------------------------- -------- -------- ---------- -----------------
Cashflow Reported Currency neutral
2020/21 2019/20 % change % change
---------------------------------------------------- -------- -------- ---------- -----------------
Adjusted EBITDAR 611 596 3% 5%
Adjusted EBITDAR margin 5.9% 5.8% 10 bps 30 bps
Cash payments of leasing costs, debt & interest(1) (288) (324)
Other non-cash items in EBIT 15 27
---------------------------------------------------- -------- -------- ---------- -----------------
Operating cashflow (1) 338 299 13% 18%
---------------------------------------------------- -------- -------- ---------- -----------------
Operating cashflow margin 3.3% 2.9% 40 bps
Capital expenditure (122) (191) 36%
Adjusting items to cashflow(1) (173) (94) (84)%
-------- ---------- -----------------
Free cash flow before working capital 43 14
Working capital 454 141
Segmental free cash flow 497 155 221% 232%
Cash tax paid (35) (20)
Cash interest paid (24) (26)
---------------------------------------------------- -------- -------- ---------- -----------------
Free cash flow 438 109 302% 324%
---------------------------------------------------- -------- -------- ---------- -----------------
Dividend - (78)
Purchase of own shares (13) (12)
Pension (47) (46)
Other (5) 5
---------------------------------------------------- -------- -------- ---------- -----------------
Movement in net cash / (debt) 373 (22)
---------------------------------------------------- -------- -------- ---------- -----------------
Net Cash / (debt) 169 (204)
---------------------------------------------------- -------- -------- ---------- -----------------
(1) Cash payments of leasing cost, debt and interest ha ve been
revised to exclude non-trading stores, which is now included within
adjusting items to cashflow. As such, results for the year ended 2
May 2020 have been restated. The non-trading stores relate to the
remaining closed stores under the Currys PC World 3-in-1 and
Carphone Warehouse programme announced in 2015/16 and closed
standalone UK Carphone Warehouse stores as announced on 17th March
2020.
Online Share of Business 2020/21 2019/20 YoY (%pts)
--------------------------- -------- ------- ----------
UK & Ireland Electricals 69% 35% +34%
International 28% 18% +10%
- Nordics 29% 19% +10%
- Greece 21% 8% +13%
--------------------------- -------- ------- ----------
Electricals 49% 27% +22%
--------------------------- -------- ------- ----------
UK & Ireland Electricals
2020/21 2019/20 Reported % change Currency neutral % change
------------------------------ ------------------ ------------------ ------------------ --------------------------
INCOME STATEMENT
------------------------------ ------------------ ------------------ ------------------ --------------------------
Revenue 4,921 4,538 8% 8%
Adjusted EBITDA 393 344 14% 14%
Adjusted EBITDA margin 8.0% 7.6% 40 bps
Depreciation on right-of-use
assets (104) (111)
Depreciation on other assets (42) (44)
Amortisation (38) (25)
Adjusted EBIT 209 164 27% 27%
------------------------------ ------------------ ------------------ ------------------ --------------------------
Adjusted EBIT margin 4.2% 3.6% 60 bps
Adjusting items to EBIT (131) (45)
------------------------------ ------------------ ------------------ ------------------ --------------------------
Statutory EBIT 78 119 (34)% (34)%
------------------------------ ------------------ ------------------ ------------------ --------------------------
Statutory EBIT margin 1.6% 2.6% (100) bps
CASHFLOW
------------------------------ ------------------ ------------------ ------------------ --------------------------
Adjusted EBITDAR 401 368 9%
Adjusted EBITDAR margin 8.1% 8.1% - bps
Cash payments of leasing
costs, debt & interest(1) (155) (170)
Other non-cash items in EBIT - 12
------------------------------ ------------------ ------------------ ------------------ --------------------------
Operating cashflow (1) 246 210 17% 22%
------------------------------ ------------------ ------------------ ------------------ --------------------------
Operating cashflow margin 5.0% 4.6% 40 bps
Capital expenditure (59) (106) 44%
Adjusting items to
cashflow(1) (63) (46) (37)%
------------------ ------------------ --------------------------
Free cash flow before working
capital 124 58
Working capital 3 34
Segmental free cash flow 127 92 38% 36%
------------------------------ ------------------ ------------------ ------------------ --------------------------
(1) Cash payments of leasing cost, debt and interest have been
revised to exclude non-trading stores, which is now included within
adjusting items to cashflow. As such, results for the year ended 2
May 2020 have been restated. The non-trading stores relate to the
remaining closed stores under the Currys PC World 3-in-1 and
Carphone Warehouse programme announced in 2015/16.
Sales increased +8%, as strong like-for-like growth was offset
by the impact of store closures and the impact of an additional
week of trading in the prior year. Like-for-like growth of +14% was
driven by strong online sales growth which more than compensated
for sales lost through temporary enforced store closures and the
almost complete loss of sales in Dixons Travel, which impacted
like-for-like growth by 3ppts. In the year, we closed eleven Currys
PC World stores, including seven High Street stores. We also took
the difficult but necessary decision to close our 35 Dixons Travel
stores.
During the year, online sales grew +114% and comprised 69% of
segmental sales, +34ppts higher than last year.
Across the year, all major categories grew with computing sales
the standout performer, growing +28% with especially high growth in
Apple products, laptops and gaming. Consumer electricals sales were
strong as sales of large TVs and smart tech offset declines in
Imaging and Audio products, despite very strong growth in
headphones. Major domestic appliance sales were adversely impacted
by the closure of stores but trends since reopening have been
encouraging in this category.
The market grew +21% during the year as the store channel
declined (48)% and the online market almost doubled. We lost (1.7)%
of share due to the temporary enforced store closures, when not all
competitor stores were required to close. Our online market share
grew +6.0ppts.
Gross margin declined (230)bps (1H: (350)bps, 2H: (140)bps),
predominantly driven by the shift of sales to our lower gross
margin online business and the loss of higher gross margin Dixons
Travel sales. This decline improved in the second half of the year
due to the easier base of comparison against the Covid disruption
at the end of last year and aided by order & collect being
available. The operating expense to sales ratio improved by
+300bps, with around +130bps of improvement coming from the UK
& Ireland business rates tax reliefs which lowered operating
costs by GBP62m (2019/20: GBP4m). The Group fully reimbursed all
Government support for furlough money received for the year, so it
had no impact on operating costs (2019/20: GBP17m). In 2021/22
changes in the IT systems being procured will increase operating
costs by c.GBP15m.
Adjusted EBIT increased +27% to GBP209m, from GBP164m in
2019/20.
In the period, adjusting items to EBIT totalled GBP(131)m.
Impairment losses of GBP(100)m were recognised due to the closure
of Dixons Travel, store impairments and write-off of IT assets.
This primarily related to software development costs, given a
change in strategic direction towards a best-in-class cloud-based
solution which will aim to achieve operational efficiencies and
improve the customer journey. Strategic change costs of GBP(21)m
were due to restructuring of business. Amortisation of acquisition
intangibles totalled GBP(14)m. Alongside previously provided
amounts these had a cash impact of GBP(63)m in the period.
Statutory EBIT for the year decreased by GBP41m to GBP78m.
2020/21 2019/20
P&L Cash P&L Cash
----------------------------------------- ------- ------ ------ ------
Acquisition / disposal related items (14) - (14) -
Strategic change programmes (21) (51) (13) (41)
Data incident costs - (1) - (5)
Impairment losses and onerous contracts (100) (16) (18) -
Regulatory (1) - - -
Other 5 5
Total (131) (63) (45) (46)
------- ------ ------
The operating cashflow increased by +17% to GBP246m, mostly
driven by the better profit outturn. Capital expenditure was
GBP59m, with significant areas of expenditure including supply
chain investments in our new distribution centres and IT
investments. Expenditure was down from last year due to the
suspension of projects during the first UK lockdown. Adjusting
items are described above while working capital inflow was small at
GBP3m. In combination, this resulted in segmental free cash flow of
GBP127m, GBP35m better than last year.
Nordics
2020/21 2019/20 Reported % change Currency neutral % change
---------------------------------------- ------------------ -------- ------------------ --------------------------
INCOME STATEMENT
---------------------------------------- ------------------ -------- ------------------ --------------------------
Revenue 4,186 3,573 17% 15%
Adjusted EBITDA 267 240 11% 11%
Adjusted EBITDA margin 6.4% 6.7% (30) bps
Depreciation on right-of-use assets (77) (74)
Depreciation on other assets (27) (25)
Amortisation (12) (15)
Adjusted EBIT 151 126 20% 20%
---------------------------------------- ------------------ -------- ------------------ --------------------------
Adjusted EBIT margin 3.6% 3.5% 10 bps
Adjusting items to EBIT (12) (11)
---------------------------------------- ------------------ -------- ------------------ --------------------------
Statutory EBIT 139 115 21% 23%
---------------------------------------- ------------------ -------- ------------------ --------------------------
Statutory EBIT margin 3.3% 3.2% 10 bps
CASHFLOW
---------------------------------------- ------------------ -------- ------------------ --------------------------
Adjusted EBITDAR 271 248 9%
Adjusted EBITDAR margin 6.5% 6.9% (40) bps
Cash payments of leasing costs, debt &
interest (100) (91)
Other non-cash items in EBIT 5 5
---------------------------------------- ------------------ -------- ------------------ --------------------------
Operating cashflow 176 162 9% 7%
---------------------------------------- ------------------ -------- ------------------ --------------------------
Operating cashflow margin 4.2% 4.5% (30) bps
Capital expenditure (52) (63) 17%
Adjusting items to cashflow: - - -
-------- ------------------ --------------------------
Free cash flow before working capital 124 99
Working capital 64 117
Segmental free cash flow 188 216 (13)% (11)%
---------------------------------------- ------------------ -------- ------------------ --------------------------
Revenue grew by +15% on a currency neutral basis, and +17% on a
52-week basis, with double digit growth in all markets. This was
driven by like-for-like growth of +16% and included online growth
of +74% as online sales grew to 29% of total sales, +10ppts higher
than last year. Our store sales were broadly flat in the second
half of the year as robust trading in open stores offset closures
in Denmark and Norway. This resulted in overall market share
increasing +0.8ppts to 26.8%, with share gains in every market
except Denmark where sales were impacted by temporary store
closures. The fastest growing market was Sweden where there has
been no discernible impact on trading from the entry of Amazon.
During the year, we opened a net total of six stores, five in
Norway and one in Sweden.
Sales of laptops, smart TVs and gaming equipment saw significant
increases as people spent more time working, and more leisure time,
at home. Coffee machines saw very strong growth as people made
coffee at home, fitness wearables had good growth due to public gym
closures and people working out on their own, while domestic
appliances including vacuum cleaners were strong as customers kept
homes clean.
Gross margin declined (130)bps (1H: (70)bps, 2H (180)bps),
predominantly driven by the shift of sales towards the lower gross
margin online channel. The operating expense to sales ratio
improved by +130bps, due to operating leverage.
As a result, adjusted EBIT increased GBP25m to GBP151m, from
GBP126m in 2019/20.
In the period, adjusting items to EBIT totalled GBP(12)m, this
was entirely due to the amortisation of acquisition intangibles and
had no cash impact. The statutory EBIT increased GBP24m to
GBP139m.
The operating cashflow increased by 9% to GBP176m, driven by the
better profit outturn. Capital expenditure was GBP52m, with
significant areas of expenditure including our Next Generation
Retail platform and store refits. The total spend was down on last
year as some spend was held back at the start of the Covid-19
crisis. Working capital inflow of GBP64m was driven by timing of
year end payments that will largely reverse in 2021/22.
Greece
2020/21 2019/20 Reported % change Currency neutral % change
------------------------------------------------- -------- -------- ------------------ --------------------------
INCOME STATEMENT
------------------------------------------------- -------- -------- ------------------ --------------------------
Revenue 516 470 10% 8%
Adjusted EBITDA 40 40 -% (3)%
Adjusted EBITDA margin 7.8% 8.5% (70) bps
Depreciation on right-of-use assets (13) (13)
Depreciation on other assets (6) (5)
Amortisation (2) (1)
Adjusted EBIT 19 21 (10)% (14)%
------------------------------------------------- -------- -------- ------------------ --------------------------
Adjusted EBIT margin 3.7% 4.5% (80) bps
Adjusting items to EBIT - (1)
------------------------------------------------- -------- -------- ------------------ --------------------------
Statutory EBIT 19 20 (5)% (10)%
------------------------------------------------- -------- -------- ------------------ --------------------------
Statutory EBIT margin 3.7% 4.3% (60) bps
CASHFLOW
------------------------------------------------- -------- -------- ------------------ --------------------------
Adjusted EBITDAR 42 42 -
Adjusted EBITDAR margin 8.1% 8.9% (80) bps
Cash payments of leasing costs, debt & interest (20) (15)
Other non-cash items in EBIT 2 1
------------------------------------------------- -------- -------- ------------------ --------------------------
Operating cashflow 24 28 (14)% (11)%
------------------------------------------------- -------- -------- ------------------ --------------------------
Operating cashflow margin 4.7% 6.0% (130) bps
Capital expenditure (10) (15) 33%
Adjusting items to cashflow - - -%
-------- ------------------ --------------------------
Free cash flow before working capital 14 13
Working capital 25 (57)
Segmental free cash flow 39 (44) 189% 184%
------------------------------------------------- -------- -------- ------------------ --------------------------
Revenue increased +8% on a currency neutral basis, with
like-for-like sales growth of +11%. Online sales grew +186% and
contributed 21% of sales, from 8% in 2019/20. Stores were closed
from 8 November until 11 January and again from 29 January until 5
April, and as a result, store sales declined slightly during the
year.
Sales were strong in all categories, except air conditioning
which saw slower sales due to the mild weather. Sales in computing
and telecom were particularly strong with the Government's digital
care initiative, where low income students have been granted a
EUR200 coupon, boosting sales towards the end of the year.
Gross margin was down (390)bps over prior year (1H: (280)bps,
2H: (460)bps) as a result of lower achieved product margin due to
channel and category mix, lower protection service and credit
income and additional costs of fulfilling online sales as well as
collection costs for consumer credit. Operating costs decreased due
to enforcement by Government on landlords of a 40% rental reduction
for May, June, November and December and a further 100% reduction
for January until April.
As a result, adjusted EBIT decreased (10)% to GBP19m, from
GBP21m in 2019/20. There were no adjusting items to EBIT in the
current year, resulting in statutory EBIT of GBP19m.
The operating cashflow was GBP24m, down from GBP28m in the prior
year. Capital expenditure was GBP10m, with significant areas of
expenditure including digital transformation and property. Working
capital inflow of GBP25m was driven by strong trading at the end of
the period.
In the year ahead we will enter Cyprus, an area with a
population of 1.1m. Two new stores will open in Nicosia and
Limassol in June, to complement our online shop and call
centre.
UK & Ireland Mobile
2020/21 2019/20 Reported % change Currency neutral % change
-------------------------------- ---------------- ------------------ ------------------ --------------------------
INCOME STATEMENT
-------------------------------- ---------------- ------------------ ------------------ --------------------------
Adjusted Revenue 707 1,636 (57)% (57)%
Statutory revenue 721 1,589 (55)% (55)%
Adjusted EBITDA (102) (68) (50)% (50)%
Adjusted EBITDA margin (14.4)% (4.2)% (1,020) bps
Depreciation on right-of-use
assets (6) (19)
Depreciation on other assets (4) (7)
Amortisation (5) (3)
Adjusted EBIT (117) (97) (21)% (23)%
-------------------------------- ---------------- ------------------ ------------------ --------------------------
Adjusted EBIT margin (16.5)% (5.9)% (1,060) bps
Adjusting items to EBIT 28 (185)
-------------------------------- ---------------- ------------------ ------------------ --------------------------
Statutory EBIT (89) (282) 68% 68%
-------------------------------- ---------------- ------------------ ------------------ --------------------------
Statutory EBIT margin (12.3)% (17.7)% 540 bps
CASHFLOW
-------------------------------- ---------------- ------------------ ------------------ --------------------------
Adjusted EBITDAR (103) (62) (66)%
Adjusted EBITDAR margin (14.6)% (3.8)% (1080) bps
Cash payments of leasing costs,
debt & interest(1) (13) (48)
Other non-cash items in EBIT 8 9
-------------------------------- ---------------- ------------------ ------------------ --------------------------
Operating cashflow (1) (108) (101) (7)% (2)%
-------------------------------- ---------------- ------------------ ------------------ --------------------------
Operating cashflow margin (15.3)% (6.2)% (910) bps
Capital expenditure (1) (7) 86%
Adjusting items to cashflow(1) (110) (48) (129)%
------------------ ------------------ --------------------------
Free cash flow before working
capital (219) (156)
Network debtor 391 133
Other working capital (29) (86)
Segmental free cash flow 143 (109) 231% 234%
-------------------------------- ---------------- ------------------ ------------------ --------------------------
(1) Cash payments of leasing cost, debt and interest have been
revised to exclude non-trading stores, which is now included within
adjusting items to cashflow. As such, results for the year ended 2
May 2020 have been restated. The non-trading stores relate to the
Carphone Warehouse programme announced in 2015/16 and closed
standalone UK Carphone Warehouse stores as announced on 17th March
2020.
Adjusted revenue decreased by (57)%, reflecting our decision in
March 2020 to close the small standalone Carphone Warehouse stores
in the UK and the negative impact from the enforced closures of our
larger stores in the UK due to Covid-19. In April we made the
decision to close our 68 Carphone Warehouse stores in the Republic
of Ireland. The statutory revenue decrease was (55)% as there was a
GBP14m positive impact on revenue and EBIT from mobile network
debtor revaluations, against a GBP(47)m negative revaluation in the
prior year.
During the year we ended our unprofitable legacy agreements with
O2 and EE, which included receiving GBP189m of outstanding
receivable from EE. We also renewed the contract with Three on our
iD Mobile MVNO which will mean the revenue is largely accounted for
as cash is received. This will impact sales and profit by c.GBP15m
in 2021/22 but will not change the cash flow. After the year end,
we agreed an exclusive multiyear partnership with Vodafone based on
a new commercial framework focused on driving great service,
innovation, and loyalty.
The decline in adjusted EBIT to a GBP(117)m loss reflects the
lost gross profit from lower sales, with sales transfer to Currys
PC World stores inhibited by unexpected closures, which was not
fully offset by cost savings in the year.
Adjusting items were GBP28m positive as mobile network debtor
revaluations, settlements and release of previous provisions more
than offset impairments, which were mainly related to closure of
Carphone Warehouse Ireland. This resulted in statutory EBIT loss of
GBP(89)m, a significant improvement on the GBP(282)m loss recorded
last year.
Together with previously provided items the adjusting items to
cashflow were GBP(110)m in the period.
2020/21 2019/20
P&L Cash P&L Cash
-------------------------------------- ----- ------- ------- ------
Mobile network debtor revaluations 14 - (47)
Acquisition / disposal related items - (2) (1) -
Strategic change programmes (20) (102) (107) (36)
Regulatory 8 (4) (30) (12)
Other 26 (2)
28 (110) (185) (48)
----- ------- ------
The operating cashflow decreased to GBP(108)m from GBP(101)m.
Capital expenditure was almost nil. The network debtor reduced by
GBP(377)m, with the acceleration in part due to early repayment by
EE. The difference to cashflow of GBP(14)m is due to the
revaluation in the period. The year-end position was GBP239m, down
from GBP1,057m three years ago. Other working capital outflow was
GBP(29)m driven by net unwinding of stock and creditors.
As previously announced, the transition away from the
loss-making traditional post-pay business will be delivered cash
positive overall, with the operating losses and restructuring costs
more than funded by the unwind of the working capital position over
time.
As described above, the UK&I Mobile segment will be reported
as part of a single UK&I segment from 2021/22 onwards.
Finance Costs
Interest on lease liabilities was GBP(77)m, a slight decrease on
prior year due to lower capitalised leases, the cash impact of this
interest is included within segmental free cash flow.
The net adjusted finance income and finance costs were higher
than last year, as the improved debt position was offset by the
amortisation of new facility arrangement fees and the write off of
arrangement and extension fees on legacy facilities that were
replaced during refinancing. The net cash impact of these costs was
GBP(24)m, from GBP(26)m in the prior year. The finance costs on the
defined benefit pension scheme was an adjusting item and declined
in line with the assumptions used in the valuation of the pension
obligations.
2020/21 2019/20
---------------------------------- -------- --------
Interest on lease liabilities (77) (80)
Finance income 6 10
Finance costs (35) (28)
---------------------------------- -------- --------
Adjusted net finance costs (106) (98)
---------------------------------- -------- --------
Finance costs on defined benefit
pension schemes (8) (14)
---------------------------------- -------- --------
Net finance costs (114) (112)
---------------------------------- -------- --------
Tax
The full year adjusted effective tax rate at 21% was lower than
the prior year rate of 33% due to provision releases relating to
uncertain tax positions for prior periods. The cash tax in the year
was GBP(35)m.
Cash flow
Currency neutral
2020/21 2019/20 Reported % change % change
----------------------------------------- -------- -------- ------------------ -----------------
Operating cashflow 338 299 13% 18%
Capital expenditure (122) (191) 36%
Adjusting items to cashflow (173) (94) (84)%
Free cash flow before working capital 43 14
Working capital and network commissions 454 141
Segmental free cash flow 497 155 221% 232%
Cash tax paid (35) (20)
Cash interest paid (24) (26)
----------------------------------------- -------- -------- ------------------ -----------------
Free cash flow 438 109 302% 324%
----------------------------------------- -------- -------- ------------------ -----------------
Dividend - (78)
Net purchase of own shares (13) (12)
Pension (47) (46)
Other (5) 5
----------------------------------------- -------- -------- ------------------ -----------------
Movement in net debt 373 (22)
----------------------------------------- -------- -------- ------------------ -----------------
Opening net cash / (debt) (204) (182)
----------------------------------------- -------- -------- ------------------ -----------------
Closing net cash / (debt) 169 (204)
----------------------------------------- -------- -------- ------------------ -----------------
Segmental free cash flow was an inflow of GBP 497 m (2019/20:
GBP155m) and interest and tax totalled GBP(59)m as described above,
resulting in free cash flow of GBP438m (2019/20: GBP109m).
The Board decided not to pay a dividend during the year and no
cash was returned to shareholders in the period. The employee
benefit trust acquired GBP13m of shares to satisfy share awards to
colleagues.
Pension contributions of GBP47m were in-line with the prior
year. Annual contribution will rise to GBP78m from 2021/ 22 , as
agreed with the fund Trustees.
The closing net cash position was GBP169m, compared to a net
debt position of GBP(204)m at 2 May 2020. T his included GBP35m of
restricted cash (2 May 2020: GBP32m). The average net cash for the
year was GBP280m, compared to an average net debt position of
GBP(355)m in 2019/20.
This year, the Group has redefined net debt to comprise cash and
cash equivalents and short-term deposits, less borrowings but
excluding leases previously designated as financing under IAS17.
Including these in net cash/(debt) would have reduced the balance
by GBP75m to GBP94m (2 May 2020: GBP(284)m debt).
Balance sheet
1 May 2021 2 May 2020
GBPm GBPm
---------------------------------------------------- ----------- -----------
Goodwill 2,851 2,803
Other fixed assets 1,661 1,823
Network commission receivables and contract assets 239 616
Working capital (684) (645)
Net cash / (debt) 169 (204)
Lease liabilities (1,322) (1,439)
Pension (482) (550)
Deferred tax 100 97
Provisions (85) (150)
Other (66) (71)
---------------------------------------------------- ----------- -----------
2,381 2,280
---------------------------------------------------- ----------- -----------
Goodwill increased in the period due to currency revaluation of
Nordics goodwill.
Other fixed assets decreased by GBP(162)m as additions of GBP
247 m were more than offset by a mortisation and depreciation
charge of GBP( 362 )m and impairment of GBP( 75 )m related to
right-of-use and UK store assets, the closure of Carphone Warehouse
Ireland and Dixons Travel and the write-off of some intangible
assets.
Network commission receivables and contract assets decreased by
GBP(377)m as the scale of our mobile business reduced and the
amount of new revenue capitalised was lower than the payments
received. This decrease was accelerated by EE paying all its
outstanding network receivable during the year.
At year-end, total working capital was GBP(684)m. Group
inventory was GBP1,178m, higher than prior year due to unusually
strong sell-through of stock in the UK&I and Nordics in the
prior year due to Covid-19. Over the year stock turn increased to
6.8 (2019/20: 6.1) due to strong trading and the growing portion of
sales fulfilled by our less stock intensive online business. Trade
receivables decreased by GBP(6)m to GBP294m (2019/20: GBP300m).
Trade payables increased by GBP171m to GBP(1,420)m (2019/20
GBP(1,249)m) due to timing of payments around year end in the
Nordics and one-off early supplier payments in 2019/20 in the
UK&I due to Covid-19. At the year end, and since July 2020, the
supplier financing facility utilisation was GBPnil ( 2 May 2020:
GBP51m) .
Other receivables decreased by GBP(17)m compared to 2 May 2020
due to prepayment and accrued income decline with reduced Mobile
operation. Other payables were broadly stable on prior year.
1 May 2021 2 May 2020
GBPm GBPm
----------------------- ----------- -----------
Inventory 1,178 970
Trade Receivables 294 300
Trade Payables (1,420) (1,249)
----------------------- ----------- -----------
Trade working capital 52 21
Other Receivables 192 209
Other Payables (910) (899)
Derivatives (18) 24
----------------------- ----------- -----------
Working capital (684) (645)
----------------------- ----------- -----------
Lease liabilities reduced mainly because of the closure of our
Carphone Warehouse standalone UK stores in March 2020, as these
non-trading leases continue to come to an end throughout the
period. In addition to this, there has been a small decrease in the
average lease length outstanding across our store portfolio.
The IAS 19 accounting deficit of the defined benefit section of
the UK pension scheme amounted to GBP482m at 1 May (2 May 2020:
GBP550m). Contributions during the period under the terms of the
deficit reduction plan amounted to GBP47m (2019/20: GBP46m).
Pension contributions are tax deductible and there is a GBP59m
deferred tax asset associated with the pension liabilities (2 May
2020: GBP53m).
The deficit decreased largely as a result of increases in the
discount rate applied to future liabilities in line with long term
bond yield returns, together with increased values of underlying
assets. This was partially offset by increases in inflation rate
assumptions reflecting changes in long term RPI expectations.
Deferred tax was broadly flat year-on-year.
Provisions primarily relate to reorganisation and property
provisions. In the period, the balance reduced by GBP(65)m
primarily as a result of utilisation of provisions, mainly related
to Mobile restructuring, offset by increases in provisions due to
the announced closure of Carphone Warehouse Ireland and Dixons
Travel businesses.
Comprehensive Income / Changes In Equity
Total equity for the Group increased from GBP2,280m to GBP2,381m
in the period, driven by the statutory profit of GBP12m, gain on
re-translation of overseas operations of GBP46m, actuarial gain
(net of taxation) on the defined benefit pension deficit for the UK
pension scheme of GBP43m and gains on investment revaluation of
GBP8m offset by the hedging losses of GBP(16)m and other movements
of GBP8m.
Impact of IFRS16
Accounts are presented using IFRS16 accounting. To aid
understanding and comparability with previous periods, here we
present the impact of IFRS16 accounting.
2020/21 2019/20
--------------------------- ---------------------------
Reported IFRS16 Excluding Reported IFRS16 Excluding
IFRS16 IFRS16
--------------------------- --------- ------- ---------- -------- ------ ---------
Adjusted EBIT
UK & Ireland Electricals 209 (31) 178 164 (2) 162
International 170 (15) 155 147 (11) 136
- Nordics 151 (11) 140 126 (10) 116
- Greece 19 (4) 15 21 (1) 20
--------------------------- --------- ------- ---------- -------- ------ ---------
Electricals 379 ( 46) 333 311 (13) 298
Adjusted EBIT margin 3.9% 3.5% 3.6% 2.9%
UK & Ireland Mobile (117) (3) (120) (97) (7) (104)
--------------------------- --------- ------- ---------- -------- ------ ---------
Adjusted EBIT 262 ( 49) 213 214 (20) 194
Adjusted EBIT margin 2.5% 2.1% 2.1% 1.9%
Finance costs (106) 71 (35) (98) 70 (28)
--------------------------- --------- ------- ---------- -------- ------ ---------
Adjusted PBT 156 22 178 116 50 166
--------------------------- --------- ------- ---------- -------- ------ ---------
Adjusted PBT margin 1.5% 1.7% 1.1% 1.6%
--------------------------- --------- ------- ---------- -------- ------ ---------
Consolidated income statement
Year Year
ended ended
1 May 2 May
2021 2020
Note GBPm GBPm
---------------------------------------------------- ---- ------ ------
Continuing operations
Revenue 2 10,344 10,170
---------------------------------------------------- ---- ------ ------
Profit / (loss) before interest and tax 2 147 (28)
---------------------------------------------------- ---- ------ ------
Finance income 6 10
Finance costs (120) (122)
---------------------------------------------------- ---- ------ ------
Net finance costs 3 (114) (112)
---------------------------------------------------- ---- ------ ------
Profit / (loss) before tax 33 (140)
Income tax expense (33) (21)
---------------------------------------------------- ---- ------ ------
Profit / (loss) after tax - continuing operations - (161)
Profit / (loss) after tax - discontinued operations 7 12 (2)
Profit / (loss) after tax for the period 12 (163)
Earnings / (loss) per share (pence) 4
---------------------------------------------------- ---- ------ ------
(13.9)
Basic - continuing operations -p p
(13.9)
Diluted - continuing operations - p p
(14.1)
Basic - total 1.0 p p
(14.1)
Diluted - total 1.0 p p
---------------------------------------------------- ---- ------ ------
Consolidated statement of comprehensive income
Year Year
ended ended
1 May 2 May
2021 2020
GBPm GBPm
------------------------------------------------------------------------------------------------------------------------- ----- -----
Profit / (loss) after tax for the period 12 (163)
Items that may be reclassified to the income statement in
subsequent years:
Cash flow hedges
Fair value movements recognised in other comprehensive
income (51) 26
Reclassified and reported in income statement 11 12
Exchange gain / (loss) arising on translation of foreign
operations 46 (39)
------------------------------------------------------------------------------------------------------------------------- ----- -----
6 (1)
------------------------------------------------------------------------------------------------------------------------- ----- -----
Items that will not be reclassified to the income statement
in subsequent years:
Actuarial gains / (losses) on defined benefit pension schemes
- UK 30 (3)
-
Overseas - (1)
Fair value through other comprehensive income financial
assets
Gains / (losses) arising during the period 8 (8)
Tax on movements on defined benefit pension schemes 13 (39)
------------------------------------------------------------------------------------------------------------------------- ----- -----
51 (51)
------------------------------------------------------------------------------------------------------------------------- ----- -----
Other comprehensive income / (expense) for the period (taken
to equity) 57 (52)
------------------------------------------------------------------------------------------------------------------------- ----- -----
Total comprehensive income / (expense) for the period 69 (215)
------------------------------------------------------------------------------------------------------------------------- ----- -----
Consolidated balance sheet
1 May 2 May
2021 2020
GBPm GBPm
---------------------------------------------------- -------- --------
Non-current assets
Goodwill 2,851 2,803
Intangible assets 426 469
Property, plant & equipment 184 240
Right-of-use assets 1,051 1,114
Lease receivable 3 4
Investments - 10
Trade and other receivables 138 294
Deferred tax assets 262 259
----------------------------------------------------- -------- --------
4,915 5,193
---------------------------------------------------- -------- --------
Current assets
Inventory 1,178 970
Lease receivable 1 1
Trade and other receivables 587 831
Derivative assets 24 76
Cash and cash equivalents 175 660
--------
1,965 2,538
--------
Total assets 6,880 7,731
----------------------------------------------------- -------- --------
Current liabilities
Trade and other payables (2,233) (2,017)
Derivative liabilities (42) (52)
Contingent consideration (2) (1)
Income tax payable (64) (78)
Loans and other borrowings (6) (584)
Lease liabilities (216) (258)
Provisions (58) (114)
----------------------------------------------------- -------- --------
(2,621) (3,104)
---------------------------------------------------- -------- --------
Non-current liabilities
Trade and other payables (97) (131)
Contingent consideration - (2)
Loans and other borrowings - (280)
Lease liabilities (1,110) (1,186)
Retirement benefit obligations (482) (550)
Deferred tax liabilities (162) (162)
Provisions (27) (36)
--------
(1,878) (2,347)
--------
Total liabilities (4,499) (5,451)
----------------------------------------------------- -------- --------
Net assets 2,381 2,280
----------------------------------------------------- -------- --------
Capital and reserves
Share capital 1 1
Share premium reserve 2,263 2,263
Other reserves (764) (775)
Accumulated profits 881 791
Equity attributable to equity holders of the parent
company 2,381 2,280
----------------------------------------------------- -------- --------
Consolidated statement of changes in equity
Share
Share premium Other Accumulated Total
capital reserve reserves profits equity
Note GBPm GBPm GBPm GBPm GBPm
------------------------------------------- ---- -------- -------- --------- ----------- -------
At 27 April 2019 1 2,263 (713) 1,089 2,640
Adjustment on initial application of
IFRS 16 - - - (45) (45)
Taxation on IFRS 16 transition adjustment - - - 8 8
------------------------------------------- ---- -------- -------- --------- ----------- -------
Adjusted balance at 27 April 2019 1 2,263 (713) 1,052 2,603
( 163
Loss for the period - - - (163) )
Other comprehensive income and expense
recognised directly in equity - - (9) (43) (52)
------------------------------------------- ---- -------- -------- --------- ----------- -------
( 206
Total comprehensive expense for the period - - (9) ) (215)
Amounts transferred to the carrying value
of inventory purchased during the year - - (41) - (41)
Equity dividends 5 - - - (78) (78)
Net movement in relation to share schemes - - - 23 23
Purchase of own shares - - (12) - (12)
------------------------------------------- ---- -------- -------- --------- ----------- -------
At 2 May 2020 1 2,263 (775) 791 2,280
Profit for the period - - - 12 12
Other comprehensive income and expense
recognised directly in equity - - 14 43 57
------------------------------------------- ---- -------- -------- --------- ----------- -------
Total comprehensive income and expense
for the period - - 14 55 69
Amounts transferred to the carrying value
of inventory purchased during the year - - 24 - 24
Net movement in relation to share schemes - - 4 17 21
Amounts transferred from investments
revaluation reserve - - (18) 18 -
Purchase of own shares - - (13) - (13)
------------------------------------------- ---- -------- -------- --------- ----------- -------
At 1 May 2021 1 2, 263 (764) 881 2, 381
------------------------------------------- ---- -------- -------- --------- ----------- -------
Consolidated cash flow statement
Year Year
ended ended
1 May 2 May
2021 2020
Note GBPm GBPm
---------------------------------------------------------- ---- ------ ------
Operating activities
Cash generated from operations 6 926 649
Contributions to defined benefit pension scheme (47) (46)
Income tax paid (35) (20)
---------------------------------------------------------- ---- ------ ------
Net cash flows from operating activities 844 583
---------------------------------------------------------- ---- ------ ------
Investing activities
Net cash outflow arising from acquisitions (1) (3)
Proceeds from sale of financial assets at FVTOCI 18 -
Proceeds on sale of business 2 2
Acquisition of property, plant & equipment and other
intangibles (122) (191)
Net cash flows from investing activities (103) (192)
---------------------------------------------------------- ---- ------ ------
Financing activities
Interest paid (101) (106)
Capital repayment of lease liabilities (232) (219)
Purchase of ordinary shares (13) (12)
Equity dividends paid - (78)
(Repayment) / drawdown of borrowings (326) 36
Facility arrangement fees paid - (4)
Net cash flows from financing activities (672) (383)
---------------------------------------------------------- ---- ------ ------
Increase in cash and cash equivalents and bank overdrafts 69 8
Cash and cash equivalents and bank overdrafts at the
beginning of the period 120 106
Currency translation differences (20) 6
---------------------------------------------------------- ---- ------
Cash and cash equivalents and bank overdrafts at the
end of the period 6 169 120
---------------------------------------------------------- ---- ------ ------
Notes to the Financial Information
1 Basis of preparation
The Financial Information, which comprises the consolidated
income statement, consolidated statement of comprehensive income,
consolidated balance sheet, consolidated statement of changes in
equity, consolidated cash flow statement and extracts from the
notes to the accounts for the year ended 1 May 2021 and 2 May 2020,
has been prepared in accordance with the accounting policies set
out in the full financial statements and on a going concern
basis.
Alternative performance measures (APMs)
In addition to IFRS measures, the Group uses certain alternative
performance measures that are considered to be additional
informative measures of ongoing trading performance of the Group
and are consistent with how performance is measured internally. The
alternative performance measures used by the Group in addition to
IFRS measures are included within the glossary and definitions
section. This includes further information on the definitions,
purpose, and reconciliation to IFRS measures of those alternative
performance measures that are used for internal reporting and
presented to the Group's Chief Operating Decision Maker (CODM). The
CODM has been determined to be the Board.
Going concern
Going concern is the basis of preparation of the financial
statements that assumes an entity will remain in operation for a
period of at least 12 months from the date of approval of the
financial statements.
In their consideration of going concern, the Directors have
reviewed the Group's future cash forecasts and profit projections,
which are based on market data and past experience. The Directors
are of the opinion that the Group's forecasts and projections,
which take into account reasonably possible changes in trading
performance, including the potentially prolonged impact of
Covid-19, show that the Group is able to operate within its current
facilities and comply with its banking covenants for the
foreseeable future. In arriving at their conclusion that the Group
has adequate financial resources, the Directors considered the
level of borrowings and facilities and that the Group has a robust
policy towards liquidity and cash flow management.
As a result of the uncertainties surrounding the forecasts due
to the Covid-19 pandemic, the Group has also modelled a reverse
stress test scenario. The reverse stress test models the decline in
sales that the Group would be able to absorb before requiring
additional sources of financing in excess of those that are
committed. Such a scenario, and the sequence of events which could
lead to it, is considered to be remote.
As a result, the Board believes that the Group is well placed to
manage its financing and other significant risks satisfactorily and
that the Group will be able to operate within the level of its
facilities for the foreseeable future. For this reason, the Board
considers it appropriate for the Group to adopt the going concern
basis in preparing its financial statements. The long-term impact
of Covid-19 is uncertain and should the impacts of the pandemic on
trading conditions be more prolonged or severe than what the
Directors consider to be reasonably possible, the Group would need
to implement additional operational or financial measures.
Further information
The Financial Information set out in this announcement does not
constitute statutory accounts within the meaning of Sections 434 to
436 of the Companies Act 2006 and is an abridged version of the
Group's financial statements for the year ended 1 May 2021 which
were approved by the directors on 29 June 2021. Statutory accounts
for the year ended 2 May 2020 have been delivered to the Registrar
of Companies, the auditor has reported on those accounts, their
report was unqualified and did not contain statements under Section
498(2) or (3) of the Companies Act 2006. Statutory accounts for the
year ended 1 May 2021 will be delivered in due course. The auditor
has reported on those accounts, their report was unqualified and
did not contain statements under Section 498 of the Companies Act
2006.
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRS)
adopted pursuant to Regulation (EC) No 1606 / 2002 as it applies in
the European Union and IFRS as issued by the International
Accounting Standards Board. The consolidated financial statements
incorporate the financial statements of the Company and its
subsidiary undertakings for the year ended 1 May 2021.
2 Segmental analysis
The Group's operating segments reflect the segments routinely
reviewed by the CODM and which are used to manage performance and
allocate resources. This information is predominantly based on
geographical areas which are either managed separately or have
similar trading characteristics such that they can be aggregated
together into one segment.
The Group's operating and reportable segments have therefore
been identified as follows:
- UK & Ireland Electricals comprises the operations of
Currys PCWorld and the Dixons Travel business.
- UK & Ireland Mobile comprises the Carphone Warehouse, iD Mobile and B2B operations.
- Nordics operates in Norway, Sweden, Finland, Denmark and Iceland.
- Greece, consisting of our ongoing operations in Greece.
UK & Ireland Electricals, UK & Ireland Mobile, Nordics
and Greece are involved in the sale of consumer electronics and
mobile technology products and services, primarily through stores
or online channels.
Transactions between segments are on an arm's length basis.
In accordance with IFRS 5, discontinued operations are disclosed
separately as a single amount within the Group's consolidated
income statement after profit after tax for continuing operations.
Discontinued operations are therefore excluded from the segmental
analysis. Further information on the Group's operations classified
as discontinued is outlined in note 7.
2 Segmental analysis (continued)
Year ended 1 May
2021
------------ -------- ------- ------- --------------------
UK & UK &
Ireland Ireland
Electricals Mobile Nordics Greece Eliminations Total
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- ------------ -------- ------- ------- ------------ ------
External revenue 4,9 21 721 4,186 516 - 10,344
Inter-segmental revenue 66 128 - - (194) -
-------------------------------- ------------ -------- ------- ------- ------------ ------
Total revenue 4,987 849 4,186 516 (194) 10,344
-------------------------------- ------------ -------- ------- ------- ------------ ------
Profit / (loss) before interest
and tax 78 (89) 139 19 - 147
-------------------------------- ------------ -------- ------- ------- ------------ ------
Year ended 2 May
2020
------------ -------- ------- ------ --------------------
UK & UK &
Ireland Ireland
Electricals Mobile Nordics Greece Eliminations Total
GBPm GBPm GBPm GBPm GBPm GBPm
-------------------------------- ------------ -------- ------- ------ ------------ ------
External revenue 4,538 1,589 3,573 470 - 10,170
Inter-segmental revenue 86 98 - - (184) -
-------------------------------- ------------ -------- ------- ------ ------------ ------
Total revenue 4,624 1,687 3,573 470 (184) 10,170
-------------------------------- ------------ -------- ------- ------ ------------ ------
Profit / (loss) before interest
and tax 119 (282) 115 20 - (28)
-------------------------------- ------------ -------- ------- ------ ------------ ------
Year Year
ended ended
1 May 2 M ay
2021 2020
GBPm GBPm
---------------------------------------- ------ -------
UK & Ireland Electricals 7 8 119
UK & Ireland Mobile (89) (282)
Nordics 139 115
Greece 19 20
Profit / (loss) before interest and tax 147 (28)
Finance income 6 10
Finance costs (120) (122)
Profit / (loss) before tax 33 (140)
----------------------------------------- ------ -------
2 Segmental analysis (continued)
The Group's disaggregated revenue recognised under 'Revenue from
Contracts with Customers' in accordance with IFRS 15 relates to the
following operating segments and revenue streams:
Year ended 1 May
2021
---------------------- -----------------------
UK & UK &
Ireland Ireland
Electricals Mobile Nordics Greece Total
GBPm GBPm GBPm GBPm GBPm
------------------------- ------------ -------- ------- ------ ------
Sale of goods 4,561 190 3,797 491 9,039
Commission revenue 6 463 252 1 722
Support services revenue 260 - 60 17 337
Other services revenue 89 68 77 7 241
Other revenue 5 - - - 5
------------------------- ------------ -------- ------- ------ ------
Total revenue 4,921 721 4,186 516 10,344
------------------------- ------------ -------- ------- ------ ------
Year ended 2 May
2020
---------------------- -----------------------
UK & UK &
Ireland Ireland
Electricals Mobile Nordics Greece Total
GBPm GBPm GBPm GBPm GBPm
------------------------- ------------ -------- ------- ------ ------
Sale of goods 4,147 397 3,218 446 8,208
Commission revenue 5 1,090 268 1 1,364
Support services revenue 285 - 30 17 332
Other services revenue 97 102 57 6 262
Other revenue 4 - - - 4
------------------------- ------------ -------- ------- ------ ------
Total revenue 4,538 1,589 3,573 470 10,170
------------------------- ------------ -------- ------- ------ ------
Revenue from support services relates predominantly to customer
support agreements, while other services revenue comprises delivery
and installation, product repairs and product support.
3 Net finance costs
Year Year
ended ended
1 May 2 May
2021 2020
GBPm GBPm
---------------------------------------------------- ------ ------
Unwind of discounts on trade receivables 6 10
Finance income 6 10
---------------------------------------------------- ------ ------
Interest on bank overdrafts, loans and borrowings (8) (15)
Interest expense on lease liabilities (77) (80)
Net interest on defined benefit pension obligations (8) (14)
Amortisation of facility fees* (11) (2)
(1 6 (1 1
Other interest expense ) )
Finance costs (120) (122)
---------------------------------------------------- ------ ------
Total net finance costs (114) (112)
---------------------------------------------------- ------ ------
* I n A p r il 2 02 1, the Gro up re f in a n ced its ex isting
debt w ith two new Revolv ing Cre dit F a c ilities, w hi ch ex
pire in A p r il 202 5. As s uc h, a ll other fa c ilities were ca
n ce l led as p a rt of the re f in a n c ing a nd the fees re
lating to the se fa c ilities were s u bs e q ue ntly i m p a ire
d.
All finance costs in the above table represent interest costs of
financial liabilities and assets, other than amortisation of
facility fees which represent non-financial assets and net interest
on defined benefit pension obligations which represent the net
defined benefit liabilities.
4 Earnings / (loss) per share
Year Year
ended ended
1 May 2 May
2021 2020
GBPm GBPm
----------------------------------------------------- --------- ----------
Total profit / (loss)
Continuing operations - (161)
Discontinued operations 12 (2)
------------------------------------------------------ --------- ----------
Total 12 (163)
------------------------------------------------------ --------- ----------
Million Million
----------------------------------------------------- --------- ----------
Weighted average number of shares
Average shares in issue 1,166 1,162
Less average holding by Group EBT (14) (5)
------------------------------------------------------ --------- ----------
For basic earnings / (loss) per share 1,152 1,157
Dilutive effect of share options and other incentive
schemes 42 25
For diluted earnings / (loss) per share 1,194 1,182
------------------------------------------------------ --------- ----------
Pence Pence
----------------------------------------------------- --------- ----------
Basic earnings / (loss) per share
Total (continuing and discontinued operations) 1.0 (14.1)
Adjustment in respect of discontinued operations (1.0) 0.2
------------------------------------------------------ --------- ----------
Continuing operations - (13.9)
Diluted earnings / (loss) per share
Total (continuing and discontinued operations) 1.0 (14.1)
Adjustment in respect of discontinued operations (1.0) 0.2
------------------------------------------------------ --------- ----------
Continuing operations - (13.9)
------------------------------------------------------ --------- ----------
Basic and diluted earnings / (losses) per share are based on the
profit / (loss) for the period attributable to equity
shareholders.
5 Equity dividends
1 M
ay 2 May
2021 2020
GBPm GBPm
------------------------------------------------------------ ----- -----
Amounts recognised as distributions to equity shareholders
in the period
- on ordinary shares of 0.1p each
Final dividend for the year ended 27 April 2019 of 4.50p
per ordinary share - 52
Interim dividend for the year ended 2 May 2020 of 2.25p per
ordinary share - 26
------------------------------------------------------------ -----
- 78
------------------------------------------------------------ ----- -----
The following distribution is proposed but has not been effected
at 1 May 2021 and is subject to shareholders' approval at the
forthcoming Annual General Meeting:
1 M
ay
2021
GBPm
------------------------------------------------------------------- -----
Final dividend for the year ended 1 May 2021 of 3.00p per ordinary
share 3 4
------------------------------------------------------------------- -----
The payment of this dividend will not have any tax consequences
for the Group.
6 Notes to the cash flow statement
a) Reconciliation of cash and cash equivalents and back
overdrafts at the end of the period
Year Year
ended ended
1 May 2 May
2021 2020
GBPm GBPm
--------------------------------------------------------- ------ ------
Cash at bank and on deposit 175 660
Bank overdrafts (6) (540)
--------------------------------------------------------- ------ ------
Cash and cash equivalents and bank overdrafts at the end
of the period 169 120
--------------------------------------------------------- ------ ------
b) Reconciliation of operating profit / (loss) to net cash
inflow from operating activities
Year Year
ended ended
1 May 2 May
2021 2020
GBPm GBPm
------------------------------------------------------------------ ------ ------
Profit / (loss) before interest and tax - continuing operations 147 (28)
Profit / (loss) before interest and tax - discontinued operations 7 (2)
Depreciation and amortisation 362 367
Share-based payment charge 21 23
(Profit) / loss on disposal of fixed assets (6) 3
Impairments and other non-cash items 76 51
Operating cash flows before movements in working capital 607 414
Movements in working capital:
(Increase) / decrease in inventory (174) 156
Decrease in receivables 404 284
Increase / (decrease) in payables 182 (248)
(Decrease) / increase in provisions (93) 43
------------------------------------------------------------------ ------ ------
319 235
Cash generated from operations 926 649
------------------------------------------------------------------ ------ ------
6 Notes to the cash flow statement (continued)
c) Changes in liabilities arising from financing activities
The table below details changes in the Group's liabilities
arising from financing activities, including both cash and non-cash
changes. Liabilities arising from financing activities are those
for which cash flows were, or future cash flows will be, classified
in the Group's consolidated cash flow statement as cash flows from
financing activities.
Lease
additions,
3 May Financing modifications Foreign 1 May
2020 cash flows and disposals exchange Interest 2021
GBPm GBPm GBPm GBPm GBPm GBPm
--------------------------------- ------- ----------- -------------- --------- -------- -------
Loans and other borrowings(i) (324) 348 - - (24) -
Lease liabilities(ii) (1,444) 310 (96) (19) (77) (1,326)
--------------------------------- ------- ----------- -------------- --------- -------- -------
Total liabilities from financing
activities (1,768) 658 (96) (19) (101) (1,326)
--------------------------------- ------- ----------- -------------- --------- -------- -------
Adjustment
on initial Lease
28 April application additions, 1 May
2019 of IFRS Financing modifications Foreign 2021
GBPm 16(iii) cash flows and disposals exchange Interest GBPm
GBPm GBPm GBPm GBPm GBPm
------------------------------- ---------- ------------ ----------- -------------- --------- -------- -------
L oans and other borrowings(i) ( 288) - ( 10) - - (26) (324)
Lease liabilities(ii) ( 83) (1,403) 299 (194) 17 (80) (1,444)
------------------------------- ---------- ------------ ----------- -------------- --------- -------- -------
Total liabilities from
financing activities (371) (1,403) 289 (194) 17 (106) (1,768)
------------------------------- ---------- ------------ ----------- -------------- --------- -------- -------
(i) The Group used interest rate swaps and FX forward contracts
to hedge borrowings. The fair value of these derivatives rounded to
GBPnil (2019/20: GBPnil). There were no material cash flows or
changes in fair value on these instruments during the year.
(ii) Lease liabilities are secured over the Group's right-of-use assets.
(iii) The Group adopted IFRS 16 using the modified retrospective
approach in the year ended 2 May 2020.
7 Discontinued operations and assets held for sale
There have been no additional operations classified as
discontinued during the year ended 1 May 2021. The following were
classified as discontinued in previous years and have continued to
incur costs and cash flows in the current financial year:
honeybee
No profit or loss has been recognised in relation to the
disposal of the honeybee operation in the current or comparative
period.
Spain
On 29 September 2017, the Group completed the disposal of The
Phone House Spain S.L.U., Connected World Services Europe
S.L. and Smarthouse Spain S.A., which together represented the
trading operations in Spain. For the year ended 1 May 2021, a
GBP2m credit was recognised in relation to the reversal of
previously held provisions no longer required.
Other
During the prior year, VAT assessments were issued for
historical periods relating to the disposed Phonehouse Germany
business. These assessments fell under warranties given as part of
the sale agreement and as such, the full amount was provided for
with a charge of GBP6m being recognised. The claim was subsequently
settled within the year ended 1 May 2021 resulting in the release
of
GBP5m, reducing the provision to nil.
As a result of the settlement of the Phonehouse Germany set out
above, the Group does not expect any further warranty claims in
respect of tax risks in territories within which the legacy
Carphone group used to operate. As such, GBP5m has been released
during the year.
For the year ended 2 May 2020 an additional GBP4m credit was
recognised following the release of provisions relating to other
legacy
European Carphone operations which are now in liquidation.
7 Discontinued operations and assets held for sale
(continued)
a) Profit / (loss) after tax from discontinued operations
Year ended 1
May 2021
-------- ----- --------------
honeybee Spain Other Total
GBPm GBPm GBPm GBPm
------------------ -------- ----- ------ ------
Revenue - - - -
Expenses - 2 5 7
-------------------- -------- ----- ------ ------
Profit before tax - 2 5 7
Income tax - - 5 5
- 2 10 12
------------------ -------- ----- ------ ------
Year ended 2
May 2020
-------- ----- --------------
honeybee Spain Other Total
GBPm GBPm GBPm GBPm
---------------- -------- ----- ------ ------
Revenue - - - -
Expenses - - (2) (2)
------------------ -------- ----- ------ ------
Loss before tax - - (2) (2)
Income tax - - - -
- - (2) (2)
---------------- -------- ----- ------ ------
b) Cash flows from discontinued operations
The net cash flows incurred by the discontinued operation during
the year are as follows. These cash flows are included within the
Consolidated cash flow statement:
Year ended 2
May 2020
-------- ----- --------------
honeybee Spain Other Total
GBPm GBPm GBPm GBPm
--------------------- -------- ----- ------ ------
Operating activities - - (3) (3)
Investing activities 2 - - 2
2 - (3) (1)
--------------------- -------- ----- ------ ------
Year ended 27
April 2019
-------- ----- ---------------
honeybee Spain Other Total
GBPm GBPm GBPm GBPm
--------------------- -------- ----- ------- ------
Operating activities - - (1) (1)
Investing activities 2 - - 2
2 - (1) 1
--------------------- -------- ----- ------- ------
8 Related party transactions
Transactions between the Group's subsidiary undertakings, which
are related parties, have been eliminated on consolidation and
accordingly are not disclosed.
The Group had the following transactions and balances with its
associates and joint venture:
1 May 2 M ay
2021 2020
GBPm GBPm
----- ------
Revenue from sale of goods and services 16 14
Amounts owed to the Group - 2
---------------------------------------- ----- ------
All transactions entered into with related parties were
completed on an arm's length basis.
Risks to Achieving the Group's Objectives
The Board continually reviews and monitors the risks and
uncertainties which could have a material effect on its results.
The updated risks and uncertainties are listed below. Risks 1 to
11, and the factors which mitigate them, are set out in more detail
in the 2019-20 Annual Report and Accounts on pages 20 to 23 and
remain relevant in the current period.
1. Covid-19 has had an impact across the Group's business in
every operational function and geography in order to comply with
Government instructions and could impact on profitability, cash
flow and colleague / customer illness or loss of life;
2. Dependence on key suppliers in driving profitability, cash flow and market share;
3. Failure to deliver an effective business transformation
programme in response to a changing consumer environment could
result in a loss of competitive advantage impacting financial
performance;
4. Failure to comply with Financial Services regulation could
result in reputational damage, customer compensation, financial
penalties and a resultant deterioration in financial
performance;
5. Failure in appropriately safeguarding sensitive information
and failure to comply with legislation could result in reputational
damage, financial penalties and a resultant deterioration in
financial performance;
6. Failure to adequately invest in and integrate the Group's IT
systems and infrastructure could result in restricted growth and
reputational damage impacting financial performance;
7. Failure to appropriately safeguard against cyber risks and
associated attacks could result in reputational damage, customer
compensation, financial penalties and a resultant deterioration in
financial performance;
8. Failure to action appropriate Health and Safety measures
resulting in injury could give rise to reputational damage and
financial penalties;
9. Business continuity plans are not effective and major
incident response is inadequate resulting in reputational damage
and a loss of competitive advantage;
10. Failure to employ adequate procedures and due diligence
regarding product quality and safety could result in the provision
of products which pose a risk to customer health, resulting in
fines, prosecution and significant reputational damage;
11. Crystallisation of potential tax exposures resulting from
legacy corporate transactions, employee and sales taxes arising
from periodic tax audits and investigations across various
jurisdictions in which the Group operates may impact cash flows for
the Group;
12. Sustainability has been added to the Group's Principal Risk
Register this year. Failure to either deliver or adequately
communicate our commitment to sustainability and being a good
corporate citizen could result in reduced cash flow, reputational
damage and loss of competitive advantage; and
13. People has been added to the Group's Principal Risk Register
this year. Not having the right workforce capacity, capability and
colleague commitment necessary to deliver on our strategy could
result in reduced revenue and profitability and failure to achieve
strategic objectives.
The directors have prepared the preliminary Financial
Information on a going concern basis. In considering the going
concern basis, the directors have considered the above mentioned
principal risks and uncertainties, especially in the context of a
highly competitive consumer and retail environment as well as the
wider macro-economic environment and how these factors might
influence the Group's objectives and strategy.
The directors have reviewed the Group's future cash forecasts
and profit projections, which are based on market data and past
experience, including seasonal borrowing requirements and available
facilities on a monthly basis. The directors are of the opinion
that the Group's forecasts and projections, which take into account
reasonably possible changes in trading performance, show that the
Group is able to operate within its current facilities and comply
with its banking covenants for the foreseeable future. In arriving
at their conclusion that the Group has adequate financial
resources, the directors were mindful of the level of borrowings
and facilities and that the Group has a robust policy towards
liquidity and cash flow management.
Accordingly, the directors have a reasonable expectation that
the Group has adequate resources to continue in operation for the
foreseeable future and consequently the directors continue to apply
the going concern basis in the preparation of the financial
statements.
Glossary and definitions
Alternative performance measures (APMs)
In the reporting of financial information the Group uses certain
measures that are not required under IFRS. These are presented in
accordance with the Guidelines on APMs issued by the European
Securities and Markets Authority ('ESMA'). We consider that these
additional measures (commonly referred to as 'alternative
performance measures') provide additional information on the
performance of the business and trends to shareholders. These
measures are consistent with those used internally, and are
considered critical to understanding the financial performance and
financial health of the Group. APMs are also used to enhance the
comparability of information between reporting periods, by
adjusting for non-recurring or items considered to be distortive on
trading performance which may affect IFRS measures, to aid the user
in understanding the Group's performance. These alternative
performance measures may not be directly comparable with other
similarly titled measures or 'adjusted' revenue or profit measures
used by other companies, and are not intended to be a substitute
for, or superior to, IFRS measures.
Adjusting items
Included within our APMs we report adjusted revenue, adjusted
PBT, adjusted EBIT, adjusted EBITDA, adjusted EBITDAR and adjusted
EPS. These measures exclude items which are significant in size or
volatility or by nature are non-trading or highly infrequent.
Adjusted results are stated before the results of discontinued
operations or exited / to be exited businesses, amortisation of
acquisition intangibles, acquisition related costs, any items
considered so material that they distort underlying performance
(such as reorganisation costs, impairment charges and property
rationalisation costs, out of period mobile network debtor
revaluations and non-recurring charges), income from previously
disposed operations, and net pension interest costs. There are no
adjustments made to exclude the impact of Covid-19. Businesses
exited or to be exited are those which the Group has exited or
committed to or commenced to exit through disposal or closure but
do not meet the definition of discontinued operations as stipulated
by IFRS and are material to the results and / or operations of the
Group.
Impact of IFRS 16: 'Leases'
The Group adopted IFRS 16: 'Leases' using the modified
retrospective method in the prior year. In order to aid
comparability with prior year measures, the impact of IFRS 16 was
included within adjusting items and adjusted results were reported
under IAS 17.
Following the adoption, and ability to report comparatives under
IFRS 16, the impact of such is no longer considered to be an
adjusting item. The adjusted results and adjusting items for the
comparative reporting period ended 2 May 2020 have subsequently
been restated to reflect this.
Currency neutral
Some comparative performance measures are translated at constant
exchange rates, called 'currency neutral' measures. This restates
the prior period results at a common exchange rate to the current
year in order to provide appropriate year-on-year movement measures
without the impact of foreign exchange movements.
Definitions and reconciliations
In line with the Guidelines on Alternative Performance Measures
issued by the European Securities and Markets Authority ('ESMA'),
we have provided additional information on the APMs used by the
Group below, including full reconciliations back to the closest
equivalent statutory measure
Note reference
Alternative performance Closest equivalent showing reconciliation
measure GAAP measure to IFRS measure Definition and purpose
Revenue measures
------------------------- ----------------------- --------------------------- -------------------------------------
Adjusted revenue Revenue See note A1 Adjusted revenues are adjusted to
remove out of period mobile network
debtor revaluations and the
revenues
of those operations which the Group
classifies as exited or to be
exited
but do not meet the definition of
discontinued in accordance with
IFRS 5: 'Non- Current Assets Held
for Sale and Discontinued
Operations'.
------------------------- ----------------------- --------------------------- -------------------------------------
Like for Like No direct equivalent Not applicable Like-for-like revenue is calculated
(LFL) % change based on adjusted store and online
revenue (including order and
collect,
Online In-Store and ShopLive) using
constant exchange rates consistent
with the currency neutral % change
measure detailed below. New stores
are included where they have been
open for a full financial year both
at the beginning and end of the
financial period. Revenue from
franchise
stores are excluded and closed
stores
(where closed by the Group's
decision
and not where closed due to
government
imposed restrictions related to
the global Covid-19 pandemic) are
excluded for any period of closure
during either period. Customer
support
agreement, insurance and wholesale
revenues along with revenue from
other non-retail businesses are
excluded from like-for-like
calculations.
We consider that LFL revenue
represents
a useful measure of the trading
performance of our underlying and
ongoing store and online portfolio.
------------------------- ----------------------- --------------------------- -------------------------------------
Currency neutral Revenue compared Not applicable Reflects total revenue on a
% change to prior period constant
consolidated currency and period basis. Provides
at a constant a measure of performance excluding
exchange rate. the impact of foreign exchange rate
movements.
------------------------- ----------------------- --------------------------- -------------------------------------
Profit measures
------------------------- ----------------------- --------------------------- -------------------------------------
Adjusted profit Profit / (loss) See notes A2 As discussed above, the Group uses
/ (loss) before before interest and A5 adjusted profit measures in order
tax, adjusted and tax, Profit to provide a useful measure of the
EBIT and adjusted / (loss) after ongoing performance of the Group.
profit / (loss) interest and These are adjusted from total
after tax tax. measures
to remove adjusting items, the
nature
of which are disclosed above.
------------------------- ----------------------- --------------------------- -------------------------------------
EBIT Profit / (loss) No reconciling Earnings before interest and tax
before interest items (EBIT) is directly comparable to
and tax profit / (loss) before tax. The
terminology used is consistent with
that used historically and in
external
communications.
------------------------- ----------------------- --------------------------- -------------------------------------
Adjusted EBITDA Profit / (loss) See note A4 As discussed above, the Group uses
before interest adjusted profit measures in order
and tax to provide a useful measure of the
ongoing performance of the Group.
These are adjusted from total
measures
to remove adjusting items, the
nature
of which are disclosed above.
------------------------- ----------------------- --------------------------- -------------------------------------
EBITDA Profit / (loss) See note A3 Earnings before interest, tax,
before interest depreciation
and tax and amortisation (EBITDA). Provides
a measure of profitability based
on profit / (loss) before tax, and
after adding back depreciation and
amortisation expense.
The terminology used is consistent
with that used historically and
in external communications.
------------------------- ----------------------- --------------------------- -------------------------------------
Adjusted EBITDAR Profit / (loss) See note A4 As discussed above, the Group uses
before interest adjusted profit measures in order
and tax to provide a useful measure of the
ongoing performance of the Group.
These are adjusted from total
measures
to remove adjusting items, the
nature
of which are disclosed above.
------------------------- ----------------------- --------------------------- -------------------------------------
EBITDAR Profit / (loss) See note A3 Earnings before interest, tax,
before interest depreciation,
and tax amortisation and rental expense
(EBITDAR). Provides a measure of
profitability based on profit /
(loss) before tax, and after adding
back depreciation, amortisation
and rental expenses outside the
scope of IFRS 16.
------------------------- ----------------------- --------------------------- -------------------------------------
Other earnings
measures
------------------------- ----------------------- --------------------------- -------------------------------------
Adjusted net Net finance See note A6 Adjusted net finance costs exclude
finance costs costs certain adjusted finance costs from
total finance costs. The adjusting
items include the finance charge
of business to be exited, net
pension
interest costs, finance income from
previously disposed operations not
classified as discontinued, and
other exceptional items considered
so one-off and material that they
distort underlying finance costs
of the Group. Under IAS 19:
'Employee
Benefits', the net interest charge
on defined benefit pension schemes
is calculated based on corporate
bond yield rates at a specific
date,
which, as can vary over time,
creates
volatility in the income statement
and is unrepresentative of the
actual
investment gains or losses made
on the liabilities. Therefore, this
item has been removed from our
adjusted
earnings measure in order to remove
this non-cash volatility.
------------------------- ----------------------- --------------------------- -------------------------------------
Adjusted income Income tax See note A7 Adjusted income tax expense /
tax expense / expense / (credit) (credit)
(credit) represents the income tax on
adjusted
earnings. Income tax expense /
(credit)
on adjusting items represents the
tax on items classified as
'adjusted',
either in the current year, or the
current year effect of prior year
tax adjustments on items previously
classified as adjusted. We consider
the adjusted income tax measures
represent a useful measure of the
ongoing tax charge / credit of the
Group.
------------------------- ----------------------- --------------------------- -------------------------------------
Adjusted / Total No direct equivalent See note A7 The effective tax rate measures
effective tax provide a useful indication of the
rate tax rate of the Group. Adjusted
effective tax is the rate of tax
recognised on headline earnings,
and total effective tax is the rate
of tax recognised on total
earnings.
------------------------- ----------------------- --------------------------- -------------------------------------
Earnings per share measures
----------------------------------------------------------------------------------------------------------------------
Adjusted basic Statutory EPS See note A8 EPS measures are presented to
EPS - continuing figures reflect
operations, adjusted the impact of adjusting items in
diluted EPS - order to show an adjusted EPS
continuing operations, figure,
adjusted basic which reflects the adjusted
EPS - total, earnings
adjusted diluted per share of the Group. We consider
EPS - total the adjusted EPS provides a useful
measure of the ongoing earnings
of the underlying Group.
----------------------- --------------------------- -------------------------------------
Cash flow measures
----------------------- --------------------------- -------------------------------------
Segmental working No direct equivalent See note A11 Segmental working capital comprises
capital movements in inventory, trade
receivables,
trade payables and provisions and
is adjusted to remove movements
arising from adjusting items, the
nature of which are disclosed
above.
------------------------- ----------------------- --------------------------- -------------------------------------
Free cash flow Cash generated See note A9 Free cash flow comprises cash
from operations generated
from / (utilised by) continuing
operations including restructuring
costs, but before cash generated
from / (utilised by) businesses
exited / to be exited, less net
finance expense, less income tax
paid, less net capital expenditure
and before any special pension
contributions
and dividends. Free cash flow is
derived from adjusted EBIT which
excludes other adjusting items.
------------------------- ----------------------- --------------------------- -------------------------------------
Operating cash Cash generated See the adjusted Operating cash flow comprises cash
flow from operations EBITDA to operating generated from / (utilised by)
cash flow reconciliation continuing
within the operations, but before cash
performance generated
review from / (utilised by) discontinued
operations, adjusting items, the
nature of which are disclosed
above,
repayments of lease liabilities
for non-trading properties where
closed by the Group's decision,
and movements in working capital.
------------------------- ----------------------- --------------------------- -------------------------------------
Net debt Cash and cash See note A10 Comprises cash and cash equivalents
equivalents and short-term deposits, less
less loans borrowings.
and other borrowings We consider that this provides a
useful measure of the indebtedness
of the Group.
------------------------- ----------------------- --------------------------- -------------------------------------
A1 Reconciliation from statutory to adjusted revenue
Year ended 1 May
2021
------------------------------ ------------ -------- ------- ------- --------------------
UK & UK &
Ireland Ireland
Electricals Mobile Nordics Greece Eliminations Total
GBPm GBPm GBPm GBPm GBPm GBPm
------------------------------ ------------ -------- ------- ------- ------------ ------
S tatutory e xternal revenue 4,921 721 4,186 516 - 10,344
O ut of period mobile network
debtor revaluations - (14) - - - (14)
------------------------------ ------------ -------- ------- ------- ------------ ------
Adjusted external revenue 4,921 707 4,186 516 - 10,330
Inter-segmental revenue 66 128 - - (194) -
------------------------------ ------------ -------- ------- ------- ------------ ------
Total a djusted revenue 4,987 835 4,186 516 (194) 10,330
------------------------------ ------------ -------- ------- ------- ------------ ------
Year ended 2 May
2020
----------------------------- ------------ -------- ------- ------ --------------------
UK & UK &
Ireland Ireland
Electricals Mobile Nordics Greece Eliminations Total
GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------- ------------ -------- ------- ------ ------------ ------
Statutory external revenue 4,538 1,589 3,573 470 - 10,170
Out of period mobile network
debtor revaluations - 47 - - - 47
----------------------------- ------------ -------- ------- ------ ------------ ------
Adjusted external revenue 4,538 1,636 3,573 470 - 10,217
Inter-segmental revenue 86 98 - - (184) -
----------------------------- ------------ -------- ------- ------ ------------ ------
Total adjusted revenue 4,624 1,734 3,573 470 (184) 10,217
----------------------------- ------------ -------- ------- ------ ------------ ------
A2 Reconciliation from statutory profit / (loss) before interest
and tax to adjusted EBIT and adjusted PBT
Year ended 1 May 2021
--------------------------------------------------------------------------------------------------------------------
Impairment
Mobile Acquisition losses
Total network / disposal Strategic and Pension Adjusted
profit debtor related change Regulatory onerous scheme profit
/ (loss) revaluations items programmes costs contracts Other interest / (loss)
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------ --------- ------------ ----------- ---------- ---------- ---------- ----- --------- ---------
UK & Ireland
Electricals 78 - 14 21 1 100 (5) - 209
UK & Ireland
Mobile (89) (14) - 20 (8) - (26) - (117)
Nordics 139 - 12 - - - - - 151
Greece 19 - - - - - - - 19
EBIT 147 (14) 26 41 (7) 100 (31) - 262
Finance
income 6 - - - - - - - 6
Finance costs (120) - - - - - - 8 (112)
------------- --------- ------------ ----------- ---------- ---------- ---------- ----- --------- ---------
Profit /
(loss)
before
tax 33 (14) 26 41 (7) 100 (31) 8 156
------------- --------- ------------ ----------- ---------- ---------- ---------- ----- --------- ---------
Year ended 2 May 2020
------------------------------------------------------------------------------------------------------------------
Impairment
Mobile Acquisition losses Adjusted
Total network / disposal Strategic and Pension profit
profit debtor related change Regulatory onerous scheme / (loss)
/ (loss) revaluations items programmes costs leases interest (restated)*
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
------------ ---------- ------------ ----------- ----------- ---------- ---------- --------- -----------
UK & Ireland
Electricals 119 - 14 13 - 18 - 164
UK & Ireland
Mobile (282) 47 1 107 30 - - (97)
Nordics 115 - 11 - - - - 126
Greece 20 - - 1 - - - 21
EBIT (28) 47 26 121 30 18 - 214
Finance income 10 - - - - - - 10
Finance costs (122) - - - - - 14 (108)
-------------- ---------- ------------ ----------- ----------- ---------- ---------- --------- -----------
(Loss) /
profit
before
tax (140) 47 26 121 30 18 14 116
------------- ---------- ------------ ----------- ----------- ---------- ---------- --------- -----------
* Adjusted results for the year ended 2 May 2020 have been
restated from those previously reported to exclude the impact of
IFRS 16 from adjusting items.
A3 Reconciliation from statutory profit / (loss) before interest
and tax to EBITDA and EBITDAR
Year Year
ended ended
1 May 2 May
2021 2020
GBPm GBPm
---------------------------------------- ------ ------
Profit / (loss) before interest and tax 147 (28)
Depreciation 279 298
Amortisation 83 69
---------------------------------------- ------ ------
EBITDA 509 339
Leasing costs in EBITDA 13 40
---------------------------------------- ------ ------
EBITDAR 522 379
---------------------------------------- ------ ------
A4 Reconciliation from adjusted EBIT to adjusted EBITDA and
adjusted EBITDAR
Year
ended
2 May
Year
ended
1 M ay 2020
2021 (restated)*
GBPm GBPm
------------------------ ------- ------------
Adjusted EBIT 262 214
Depreciation 279 298
Amortisation 57 44
------------------------ -------
Adjusted EBITDA 598 556
------------------------ ------- ------------
Leasing costs in EBITDA 13 40
------------------------ ------- ------------
Adjusted EBITDAR 611 596
------------------------ ------- ------------
* Adjusted results for the year ended 2 May 2020 have been
restated from those previously reported to exclude the impact of
IFRS 16 from adjusting items.
A5 Further information on the adjusting items between statutory
profit / (loss) to adjusted profit measures noted above
Year
ended
Year
ended 2 May
1 M
ay 2020
2021 (restated)*
Note GBPm GBPm
----------------------------------------------------------- ------ ------ ------------
Included in revenue:
Mobile network debtor revaluation (i) (14) 47
----------------------------------------------------------- ------ ------ ------------
(14) 47
----------------------------------------------------------- ------ ------ ------------
Included in (loss) / profit before interest and tax:
Mobile network debtor revaluation (i) (14) 47
Acquisition / disposal related items (ii) 26 26
Strategic change programmes (iii) 41 121
Regulatory costs (iv) (7) 30
Impairment losses and onerous leases (v) 100 18
Other (vi) (31) -
115 242
----------------------------------------------------------- ------ ------ ------------
Included in net finance costs:
Net non-cash finance costs on defined benefit pension
schemes (vii) 8 14
Total impact on profit / (loss) before tax - continuing
operations 123 2 5 6
----------------------------------------------------------- ------ ------ ------------
Tax on regulatory matters (viii) 1 (17)
Tax on other adjusting items (ix) (1) -
----------------------------------------------------------- ------ ------ ------------
Total impact on profit / (loss) after tax - continuing
operations 123 23 9
----------------------------------------------------------- ------ ------ ------------
Discontinued operations 7 ( 1 2) 2
----------------------------------------------------------- ------ ------ ------------
Total impact on profit / (loss) after tax 1 11 24 1
----------------------------------------------------------- ------ ------ ------------
* Adjusted results for the year ended 2 May 2020 have been
restated from those previously reported to exclude the impact of
IFRS 16 from adjusting items.
(i) Mobile network debtor revaluations
In the current period changes in consumer behaviour on
previously recognised transactions have led to positive
revaluations of
network receivables of GBP14m. For the comparative period, the
Group recognised negative revaluations totalling GBP47m as
legislative impacts, changing consumer taste and the closure of the
Carphone Warehouse standalone stores within the UK drove a
reduction in the expected value of variable revenue previously
recognised.
(ii) Acquisition / disposal related items
A charge of GBP26m (2019/20: GBP26m) relates primarily to
amortisation of acquisition intangibles arising on the Dixons
Retail Merger
(iii) Strategic change programmes
During the current period, restructuring and redundancy costs of
GBP54m (2019/20: GBP56m) have been incurred as the Group continues
to deliver it's long term strategic plan by becoming clearer,
simpler and faster in order to improve the overall customer
experience with an Omnichannel offering. The costs incurred relate
to the following strategic restructuring programmes:
-- GBP24m for restructuring and redundancy costs across the UK
& Ireland Electricals store team management structure;
-- GBP17m related to central operations;
-- GBP8m following the strategic decision to close the Carphone
Warehouse Ireland business as the Group enters the next strategic
phase in returning Mobile to profitability; and
-- GBP5m related to the previously announced Carphone Warehouse
standalone store closure within the United Kingdom.
Property rationalisation
Included within strategic change programmes is a credit of
GBP19m that primarily relates to the release of excess property
provisions following successful early exit negotiations on stores
included within previously announced rationalisation and closure
programmes.
The Group has also incurred GBP9m of property costs following
the announcement to close the Carphone Warehouse Ireland business,
GBP3m of which relates to non-cash impairments over right-of-use
assets and GBP6m for dilapidation and closure related costs.
For the year ended 2 May 2020, a further GBP71m of property
costs was recognised following the closure of the Carphone
Warehouse standalone stores in the United Kingdom while GBP6m of
property provisions within the UK & Ireland Electricals segment
were released.
(iv) Regulatory costs
In the year ended 2 May 2020, based on the information
available, the Group provided GBP30m for redress related to the
mis-selling of Geek Squad mobile phone insurance policies following
the FCA investigation for periods prior to June 2015. All customer
claims are carefully considered by the Group on a case by case
basis with the majority of claims received being invalid.
While the volume and value of outstanding claims remains
uncertain no new claims have been received during the period. This
has led to the Group reducing the provision in relation to redress
by GBP8m.
Costs of GBP1m have also been recognised in relation to past
service costs for the Group's defined benefit pension scheme
following an additional judgement on GMP equalisation.
(v) Impairment losses and onerous contracts
Following the unprecedented effects of the Covid-19 pandemic and
the enforced store closures throughout the year ended 1 May 2021,
the Group accelerated the operational roll out of its long term
strategic plan in moving towards a full omnichannel offering;
bringing stores and online together, giving customers the best of
both worlds at scale.
This change, accelerated by the pandemic, has resulted in the
identification of a material non-cash impairment charge over
intangible assets within the UK & Ireland Electricals business,
together with impairment of related assets to be recognised against
individual stores and additional onerous IT contracts. The
breakdown of the impairment recorded in relation to the UK &
Ireland Electricals asset base is as follows:
-- GBP46m of intangible assets, primarily related to software
development costs, as the Group moves towards best in class cloud
based solutions to achieve operational efficiencies and improve the
customer journey;
-- GBP14m over right-of-use and store related assets following
the deterioration in individual store forecast performance.
In addition, a GBP16m one off cash charge related to the early
settlement of contracted IT service arrangements has been
recognised.
Following the continued impact of Covid-19 on the aviation and
travel and tourism industry, coupled with the UK government's
decision to remove airside tax-free shopping, the Group announced
the difficult decision on 28 April 2021 to close the Dixons Travel
business. This has led to recognition of:
-- GBP16m of onerous contracts and store related asset impairments; and
-- an GBP8m impairment of acquisition intangibles arising on the Dixons Retail Merger.
For the year ended 2 May 2020, an impairment indicator was
identified following the initial government enforced store closure
across the United Kingdom. Management considered the future cash
flow forecasts and adjusted for the negative impact of Covid-19
using the best available knowledge at that time. This resulted in
an impairment of GBP18m being recorded over right-of-use assets in
the UK & Ireland Electricals operating segment.
(vi) Other
In May 2021, the Group settled an ongoing legal matter following
a contractual dispute with the counterparty that caused damage to
the Group. As a result of the settlement confirming the Group's
position, a credit of GBP28m has been recognised within the UK
& Ireland Mobile operating segment for the year ended 1 May
2021 and is included within trade and other receivables at the
reporting date.
A further GBP5m was received in the year following the
settlement of a legal case in relation to anti-competitive
behaviour engaged by the counterparty.
(vii) Net non-cash financing costs on defined benefit pension
schemes
The net interest charge on defined benefit pension schemes
represents the non-cash remeasurement calculated by applying the
corporate bond yield rates applicable on the last day of the
previous financial year to the net defined benefit obligation. As a
non-cash remeasurement cost which is unrepresentative of the actual
investment gains or losses made or the liabilities paid and
payable, the accounting effect of this is excluded from adjusted
earnings.
(viii) Tax regulatory matters:
As previously disclosed, the Group has been co-operating with
HMRC in relation to the tax treatment arising due to pre-merger
legacy corporate transactions. The Group maintains the tax
treatment was appropriate, however, the likelihood of litigation,
and therefore risk associated with this matter was such that a
provision was recognised in the year ended 27 April 2019. There
have been no significant developments in the year, as such the
principal has been retained, while a further GBP1m of interest
accumulated throughout the last 12 months has been provided.
(ix) Taxation
The effective tax rate on adjusting items is nil. The rate of
relief is lower than the UK statutory rate of 19% predominantly due
to store closure costs that do not attract tax relief and movements
in unrecognised deferred tax assets in the UK where it is not
considered there are sufficient future taxable profits to recognise
all of the deferred tax asset in respect of losses, pensions and
other timing differences.
A6 Reconciliation from statutory net finance costs to adjusted net finance costs
Year
ended
Year
ended 2 May
1 May 2020
2021 (restated)*
GBPm GBPm
---------------------------------------------------- ------ ------------
Total net finance costs (114) (112)
Net interest on defined benefit pension obligations 8 14
---------------------------------------------------- ------ ------------
Adjusted total net finance costs (106) (98)
---------------------------------------------------- ------ ------------
* Adjusted results for the year ended 2 May 2020 have been
restated from those previously reported to exclude the impact of
IFRS 16 from adjusting items.
A7 Adjusted tax expense
a) Tax expense
The corporation tax charge comprises:
Year
ended Year ended
1 May 2 M ay
2021 2020 (restated)*
GBPm GBPm
Current tax
UK corporation tax at 19% (2019/20: 19% ) - Adjusted 5 13
-
Adjusting 2 (4)
Overseas tax - Adjusted 36 23
-
Adjusting - 1
--------------------------------------------------------------------------------------- ------ -----------------
43 33
--------------------------------------------------------------------------------------- ------ -----------------
Adjustments made in respect of prior years:
UK corporation tax - Adjusted (12) 12
-
Adjusting - (17)
Overseas tax - Adjusted (1) 1
--------------------------------------------------------------------------------------- ------ -----------------
(13) (4)
--------------------------------------------------------------------------------------- ------ -----------------
Total current tax 30 29
--------------------------------------------------------------------------------------- ------ -----------------
Deferred tax
UK tax - Adjusted 4 (9)
-
Adjusting 1 6
Overseas tax - Adjusted (3) 6
-
Adjusting (3) (3)
--------------------------------------------------------------------------------------- ------ -----------------
(1) -
--------------------------------------------------------------------------------------- ------ -----------------
Adjustments in respect of prior years:
UK corporation tax - Adjusted 5 (4)
Overseas tax - Adjusted (1) (4)
--------------------------------------------------------------------------------------- ------ -----------------
4 (8)
--------------------------------------------------------------------------------------- ------ -----------------
Total deferred tax 3 (8)
--------------------------------------------------------------------------------------- ------ -----------------
Total tax charge 33 21
--------------------------------------------------------------------------------------- ------ -----------------
Adjusted tax charge 33 38
--------------------------------------------------------------------------------------- ------ -----------------
* Adjusted results for the year ended 2 May 2020 have been
restated from those previously reported to exclude the impact of
IFRS 16 from adjusting items.
Tax related to discontinued operations is included in the
figures set out in note 7.
b) Reconciliation of standard to actual (effective) tax rate
The principal differences between the total tax charge shown
above and the amount calculated by applying the standard rate of UK
corporation tax to profit / (loss) before taxation are as
follows:
Year ended 1 May Year ended 2 May
2021 2020 (restated)*
---------------------------------- ------------------------------ -------------------------------
Adjusting Adjusting
Adjusted items Statutory Adjusted* items* Statutory
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------------- -------- --------- --------- --------- --------- ---------
Profit / (loss) before taxation 156 (123) 33 116 (256) (140)
---------------------------------- -------- --------- --------- --------- --------- ---------
Tax at UK statutory rate of
19% (2019/20: 19%) 30 (24) 6 22 (49) (27)
Items attracting no tax relief
or liability(i, v) 4 8 12 3 4 7
Movement in unprovided deferred
tax(iv) 1 15 16 6 46 52
Effect of change in statutory
tax rate 1 - 1 (1) (1) (2)
Differences in effective overseas
tax rates 6 - 6 3 - 3
Increase in provisions 1 - 1 - - -
Adjustments in respect of prior
years - provision(ii) (14) 1 (13) - (17) (17)
Adjustments in respect of prior
years - other(iii) 4 - 4 5 - 5
---------------------------------- -------- --------- --------- --------- --------- ---------
Total tax charge / (credit) 33 - 33 38 (17) 21
---------------------------------- -------- --------- --------- --------- --------- ---------
* Adjusted results for the year ended 2 May 2020 have been
restated from those previously reported to exclude the impact of
IFRS 16 from adjusting items.
The effective tax rate on adjusted earnings for the year ended 1
May 2021 is 21% (2019/20: 33%).
(i) Items attracting no tax relief or liability relate mainly to
non-deductible depreciation and share-based payments in the UK
business.
(ii) Provision releases are predominantly where the window for
recovery has now closed in relation to pre-merger uncertain tax
positions.
(iii) Other adjustments in respect of prior years are mainly due
to lower tax relief on fixed assets through capital allowances in
submitted tax returns than originally estimated.
The effective tax rate on adjusting items is nil (2019/20:
7%).
(iv) Deferred tax assets relating principally to tax losses in
the UK business have not been recognised due to uncertainty over
the Group's ability to utilise the losses in the future.
(v) Items attracting no tax relief or liability relate mainly to
non-deductible store closure costs.
The future effective tax rate is likely to be impacted by the
geographical mix of profits and the Group's ability to take
advantage of currently unrecognised deferred tax assets.
A8 Adjusted earnings / (loss) per share
Year
ended
Year
ended 2 May
1 May 2020
2021 (restated)*
GBPm GBPm
------------------------------------------------------ --- ---------- ------------
Adjusted earnings
Continuing operations 123 78
----------------------------------------------------------- ---------- ------------
Total profit / (loss)
Continuing operations - (161)
Discontinued operations 12 (2)
----------------------------------------------------------- ---------- ------------
Total profit / (loss) 12 (163)
----------------------------------------------------------- ---------- ------------
Million Million
------------------------------------------------------ --- ---------- ------------
Weighted average number of shares
Average shares in issue 1,166 1,162
Less average holding by Group EBT (14) (5)
----------------------------------------------------------- ---------- ------------
For basic earnings per share 1,152 1,157
Dilutive effect of share options and other incentive
schemes 42 25
For diluted earnings per share 1,194 1,182
----------------------------------------------------------- ---------- ------------
Pence Pence
------------------------------------------------------ --- ---------- ------------
Basic earnings / (loss) per share
Total (continuing and discontinued operations) 1.0 (14.1)
Adjustment in respect of discontinued operations (1.0) 0.2
----------------------------------------------------------- ---------- ------------
Continuing operations - (13.9)
Adjustments - continuing operations (net of taxation) 10.7 20.6
----------------------------------------------------------- ---------- ------------
Adjusted basic earnings per share 10.7 6.7
----------------------------------------------------------- ---------- ------------
Diluted earnings / (loss) per share
Total (continuing and discontinued operations) 1.0 (14.1)
Adjustment in respect of discontinued operations (1.0) 0.2
----------------------------------------------------------- ---------- ------------
Continuing operations - (13.9)
Adjustments - continuing operations (net of taxation) 10.3 20.5
----------------------------------------------------------- ---------- ------------
Adjusted diluted earnings per share 10.3 6.6
----------------------------------------------------------- ---------- ------------
* Adjusted results for the year ended 2 May 2020 have been
restated from those previously reported to exclude the impact of
IFRS 16 from adjusting items.
Basic and diluted earnings per share are based on the profit for
the period attributable to equity shareholders. Adjusted earnings
per share is presented in order to show the underlying performance
of the Group. Adjustments used to determine adjusted earnings are
described further in note A5.
A9 Reconciliation of cash inflow from operations to free cash
flow
Year Year
ended ended
1 May 2 May
2021 2020
GBPm GBPm
---------------------------------------------------------------- ------ ------
Cash inflow from operations 926 649
Operating cash flows from discontinued operations(*) 3 1
Taxation (35) (20)
Interest, facility arrangement fees, dividends from investments
and other (25) (31)
Repayment of leases (309) (299)
Capital expenditure (122) (191)
Free cash flow 438 109
---------------------------------------------------------------- ------ ------
* Operating cash flows from discontinued operations are removed
in the above reconciliation as free cash flow is presented on a
continuing basis.
Reconciliation of adjusted EBIT to free cash flow
Year
Year ended
ended 2 May
1 May 2020
2021 (restated)*
GBPm GBPm
---------------------------------------- ------ ------------
Adjusted EBIT (note A2) 262 214
Depreciation and amortisation (note A4) 336 342
Segmental working capital (note A11) 454 141
Share-based payments** 21 23
Capital expenditure (122) (191)
Taxation (35) (20)
Interest (24) (26)
Repayment of leases (275) (284)
Other** (6) 4
---------------------------------------- ------ ------------
Free cash flow before exceptional items 611 203
---------------------------------------- ------ ------------
Exceptional costs (173) (94)
---------------------------------------- ------ ------------
Free cash flow 438 109
---------------------------------------- ------ ------------
* Adjusted results for the year ended 2 May 2020 have been
restated from those previously reported to exclude the impact of
IFRS 16 from adjusting items.
** Other non-cash items in EBIT, as disclosed within the
Performance Review, comprise share-based payments and other items
in the above reconciliation to free cash flow.
A10 Reconciliation from liabilities arising from financing
activities to net cash / (debt)
2 May
1 May 2020
2021 (restated)*
GBPm GBPm
------------------------------------------------------ ------- ------------
Loans and other borrowings - (324)
Lease liabilities (1,326) (1,444)
------------------------------------------------------ ------- ------------
Total liabilities from financing activities (note 6c) (1,326) (1,768)
Cash and cash equivalents 175 660
Overdrafts (6) (540)
Add back lease liabilities 1,326 1,444
------------------------------------------------------ ------- ------------
Net cash / (debt) 169 (204)
------------------------------------------------------ ------- ------------
* Net cash / (debt) at 2 May 2020 has been restated from the
amounts previously reported to reflect the new definition as
discussed in the Performance Review.
A11 Reconciliation of statutory working capital cash inflow to
segmental working capital cash inflow
Within the performance review, a reconciliation of the adjusted
EBIT to free cash flow is provided. Within this, the working
capital balance of GBP454m (2019/20: GBP141m) differs to the
statutory working capital balance of GBP319m (2019/20: GBP235m) as
cash flows on adjusting items are separately disclosed. A
reconciliation of the disclosed working capital balance is as
follows:
2 May
1 May 2020
2021 (restated)*
GBPm GBPm
-------------------------------------------------------- ------ ------------
Working capital cash inflow (note 6b) 319 235
Exceptional provisions 93 (43)
Network debtor out of period revaluation 14 (47)
Exceptional receivable - legal settlement (note A5(vi)) 28 -
Facility arrangement fees - (4)
-------------------------------------------------------- ------ ------------
Segmental working capital 454 141
-------------------------------------------------------- ------ ------------
A12 Summary of working capital presented within the performance
review
Within the performance review, a summary balance sheet is
provided which includes a working capital balance of GBP(684)m
(2019/20: GBP(645)m). The below table provides a breakdown of how
the summary working capital balance ties through to the statutory
balance sheet. Network commission receivables are excluded from the
breakdown as they are presented separately.
2 May
1 May 2020
2021 (restated)*
GBPm GBPm
-------------------------------------------------------- ------- ------------
Non-current assets
Trade and other receivables** 38 35
Current assets
Inventory 1,178 970
Trade and other receivables** 448 474
Derivative assets 24 76
Current liabilities
Trade and other payables (2,233) (2,017)
Derivative liabilities (42) (52)
Non-current liabilities
Trade and other payables (97) (131)
-------------------------------------------------------- ------- ------------
Working capital presented within the performance review (684) (645)
-------------------------------------------------------- ------- ------------
* Working capital presented within the performance review at 2
May 2020 has been restated from the amounts previously reported to
reflect the separate presentation of provision balances within the
performance review balance sheet summary.
** Trade and other receivables excludes network commission
receivables and contract assets of GBP239m (2019/20: GBP616m) as
these are presented separately within the condensed balance sheet
in the performance review.
Other definitions
The following definitions apply throughout this statement unless
the context otherwise requires:
Acquisition intangibles Acquired intangible assets such as customer
bases, brands and other intangible assets acquired
through a business combination capitalised
separately from goodwill. Where businesses
have grown organically rather than through
acquisition, there is no amortisation of acquired
intangibles and therefore the non-cash amortisation
charge is removed from our adjusted earnings
measures in order to increase comparability
between segments
--------------------------------------------------------
Active credit customers Customers with an open 'Your Plan' account
------------------------- --------------------------------------------------------
ADRs American Depositary Receipts
------------------------- --------------------------------------------------------
ARPU Average monthly revenue per user
------------------------- --------------------------------------------------------
B2B Business to business
------------------------- --------------------------------------------------------
Board The Board of Directors of the Company
------------------------- --------------------------------------------------------
Businesses to be Businesses exited or to be exited are those
exited which the Group has exited or committed to
or commenced to exit through disposal or closure
but do not meet the definition of discontinued
operations as stipulated by IFRS and are material
to the results or operations of the Group.
Comparative results in the statement of comprehensive
income and the notes are restated accordingly
for the impact of businesses exited or to be
exited.
------------------------- --------------------------------------------------------
Carphone, Carphone The Company or Group prior to the Merger on
Warehouse or Carphone 6 August 2014
Group
------------------------- --------------------------------------------------------
CGU Cash Generating Unit
------------------------- --------------------------------------------------------
CODM Chief Operating Decision Maker
------------------------- --------------------------------------------------------
Colleague engagement Measured using various colleague engagement
surveys across the Group
------------------------- --------------------------------------------------------
Company or the Company Dixons Carphone plc (incorporated in England
& Wales under the Act, with registered number
07105905) , whose registered office is at 1
Portal Way, London W3 6RS
------------------------- --------------------------------------------------------
CPW The continuing business of the Carphone Group
------------------------- --------------------------------------------------------
CPW Europe Best Buy Europe's core continuing operations
------------------------- --------------------------------------------------------
CPW Europe Acquisition The Company's acquisition of Best Buy's interest
in CPW Europe, which completed on 26 June 2013
------------------------- --------------------------------------------------------
Credit adoption Sales on Credit as a proportion of total sales
------------------------- --------------------------------------------------------
CRM Customer Relationship Management
------------------------- --------------------------------------------------------
CWS The Connected World Services division of the
Company
------------------------- --------------------------------------------------------
Dixons or Dixons Dixons Retail plc and its subsidiary companies
Retail
------------------------- --------------------------------------------------------
Dixons Carphone or The Company, its subsidiaries, interests in
Group joint ventures and other investments
------------------------- --------------------------------------------------------
Dixons Retail Merger The all share merger of Dixons Retail plc and
or Merger Carphone Warehouse plc which occurred on 6
August 2014
------------------------- --------------------------------------------------------
EBT Employee benefit trust
------------------------- --------------------------------------------------------
Electricals Represents the combination of our UK & Ireland
Electricals, Nordics, and Greece operating
segments
------------------------- --------------------------------------------------------
GfK Growth from Knowledge
------------------------- --------------------------------------------------------
HMRC Her Majesty's Revenue and Customs
------------------------- --------------------------------------------------------
honeybee honeybee was our proprietary IT software operation
for which an asset sale was completed on 31
May 2018
------------------------- --------------------------------------------------------
IFRS International Financial Reporting Standards
as adopted by the European Union
------------------------- --------------------------------------------------------
Market position Ranking against competitors in the electrical
and mobile retail market, measured by market
share. Market share is measured for each of
the Group's markets by comparing data for revenue
or volume of units sold relative to similar
metrics for competitors in the same market
------------------------- --------------------------------------------------------
MNO Mobile network operator
------------------------- --------------------------------------------------------
Mobile Represents sales made from legacy Carphone
brands, iD Mobile and SimplifyDigital
------------------------- --------------------------------------------------------
MVNO Mobile virtual network operator
------------------------- --------------------------------------------------------
NPS Net promoter score, a rating used by the Group
to measure customers' likelihood to recommend
its operations
------------------------- --------------------------------------------------------
Online Online sales and Online market share relate
to all sales where the journey is completed
via the website or app. This includes online
home delivered, Order and Collect, Online In-Store
and ShopLive
------------------------- --------------------------------------------------------
Online In-store Online In-store is the term used for sales
that are generated through in-store tablets
for product that is not stocked in the store
------------------------- --------------------------------------------------------
Order and Collect Order and Collect is the term used for sales
where the sale is made via the website or app
and collected in store
------------------------- --------------------------------------------------------
Peak / post peak Peak refers to the 10 week trading period ended
on 9 January 2021 as reported in the Group's
Christmas Trading statement on 20 January 2021.
Post peak refers to the trading period from
10 January 2021 to the Group's year end on
1 May 2021
------------------------- --------------------------------------------------------
RCF Revolving credit facility
------------------------- --------------------------------------------------------
Sharesave or SAYE Save as you earn share scheme
------------------------- --------------------------------------------------------
ShopLive The Group's own video shopping service where
store colleagues can assist, advise and demonstrate
the use of products to customers online face-to-face
------------------------- --------------------------------------------------------
SIMO Sales of SIM-only contracts, without attached
handset
------------------------- --------------------------------------------------------
SWAS Stores-within-a-store
------------------------- --------------------------------------------------------
TSR Total shareholder return
------------------------- --------------------------------------------------------
UK GAAP United Kingdom Accounting Standards and applicable
law
------------------------- --------------------------------------------------------
Virgin Mobile France Omer Telecom Limited (incorporated in England
& Wales) and its subsidiaries, operating an
MVNO in France as a joint venture between the
Company, Bluebottle UK Limited and Financom
S.A.S.
------------------------- --------------------------------------------------------
WAEP Weighted average exercise price
------------------------- --------------------------------------------------------
Responsibility Statement
The 2020/21 Annual Report and Accounts which will be issued in
July 2021, contains a responsibility statement in compliance with
DTR 4.1.12 of the Listing Rules which sets out that as at the date
of approval of the Annual Report and Accounts on 29 June 2021, the
directors confirm to the best of their knowledge:
-- the Group and unconsolidated Company financial statements,
prepared in accordance with the applicable set of accounting
standards, give a true and fair view of the assets, liabilities,
financial position and profit of the Group and Company,
respectively; and
-- the performance review contained in the Annual Report and
Accounts includes a fair review of the development and performance
of the business and the position of the Group together with a
description of the principal risks and uncertainties that they
face.
At the date of this statement, the directors are those listed in
the Group's 2019/20 Annual Report and Accounts.
The financial statements were approved by the directors on 29
June 2021 and signed on their behalf by:
Alex Baldock Jonny Mason
Group Chief Executive Group Chief Financial Officer
Number of stores (unaudited)
1 May 2 May
2021 2020
------------------------- -------------------------
Own Franchise Own Franchise
stores stores Total stores stores Total
------------------------- ------- --------- ----- ------- --------- -----
UK Dixons 298 - 298 309 - 309
UK Dixons Travel - - - 33 - 33
Ireland Dixons 16 - 16 16 - 16
------------------------- ------- --------- ----- ------- --------- -----
UK & Ireland Electricals 314 - 314 358 - 358
UK Carphone - - - - - -
Ireland Carphone - - - 70 - 70
------------------------- ------- --------- -----
UK & Ireland Mobile - - - 70 - 70
Total UK & Ireland 314 - 314 428 - 428
Norway 86 69 155 83 67 150
Sweden 102 73 175 104 70 174
Denmark 38 - 38 38 - 38
Finland 21 20 41 22 19 41
Other Nordics - 13 13 - 13 13
------------------------- ------- --------- ----- ------- --------- -----
Nordics 247 175 422 247 169 416
Greece 74 19 93 75 20 95
Total 635 194 829 750 189 939
------------------------- ------- --------- ----- ------- --------- -----
Selling space '000 sq ft (unaudited)
1 May 2 May
2021 2020
-------------------------- --------------------------
Own Franchise Own Franchise
stores stores Total stores stores Total
------------------------- ------- --------- ------ ------- --------- ------
UK Dixons 5,422 - 5,422 5,542 - 5,542
UK Dixons Travel - - - 40 - 40
Ireland Dixons 207 - 207 207 - 207
------------------------- ------- --------- ------ ------- --------- ------
UK & Ireland Electricals 5,629 - 5,629 5,789 - 5,789
UK Carphone - - - - - -
Ireland Carphone - - - 44 - 44
------------------------- ------- --------- ------
UK & Ireland Mobile - - - 44 - 44
Total UK & Ireland 5,629 - 5,629 5,833 - 5,833
Norway 1,089 675 1,764 1,096 637 1,733
Sweden 1,217 375 1,592 1,194 371 1,565
Denmark 667 - 667 691 - 691
Finland 506 176 682 530 163 693
Other Nordics - 86 86 - 90 90
------------------------- ------- --------- ------ ------- --------- ------
Nordics 3,479 1,312 4,791 3,511 1,261 4,772
Greece 954 71 1,025 953 76 1,029
Total 10,062 1,383 11,445 10,297 1,337 11,634
------------------------- ------- --------- ------ ------- --------- ------
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
FR DKCBDOBKDDAB
(END) Dow Jones Newswires
June 30, 2021 02:00 ET (06:00 GMT)
Grafico Azioni Currys (LSE:CURY)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni Currys (LSE:CURY)
Storico
Da Apr 2023 a Apr 2024
