TIDMTED

RNS Number : 7179B

Ted Baker PLC

14 June 2021

Ted Baker Plc

("Ted Baker", the "Group")

Preliminary Results Announcement for the 53 weeks ended 30 January 2021

Strategic progress and increasing brand strength position the business for future success

Rachel Osborne, Chief Executive Officer, commented:

"We are making good progress against our strategic transformation plan and Ted Baker is increasingly well placed to take advantage of the significant growth opportunities ahead of us. The Ted Baker brand has strengthened further, with the number of active customers growing to 1.2m by the end of the year.

"While the impact of COVID-19 is clear in our results and has amplified some of the legacy issues impacting the business, Ted Baker has responded proactively and is in a much stronger place than it was a year ago. During the period, we delivered robust cashflow generation, fixed our balance sheet, refreshed our senior leadership team and today we are upgrading our financial targets for the second time since outlining our new strategy last summer.

Additionally, we have made good progress with our sustainability strategy, Fashioning a Better Future, including the mapping of all of our factory partners within our supply chain and significantly increasing our usage of cotton from sustainable sources to 69%.

"We are a year into Ted Baker's transformation plan and continue to believe that we have the right strategy and team in place to set the business up for a stronger, more sustainable future."

 
                                 53 weeks                   52 weeks    Change 
                                    ended                      ended 
                               30 January                 25 January 
                                     2021        2020 (restated(1) ) 
 Group Revenue                                GBP352.0m    GBP630.5m   (44.2)% 
 Underlying (Loss)/Profit Before Tax(2)      GBP(59.2)m      GBP4.8m       n/a 
 (Loss)/Profit Before Tax                   GBP(107.7)m   GBP(77.6)m     38.8% 
 Basic EPS                                      (56.2)p     (153.0)p       n/a 
 Underlying(2) EPS                              (26.0)p         6.7p       n/a 
 Dividend(3)                                        nil         7.8p       n/a 
 
 
   Notes:       (1) Details of the restatement are included in the annual report and accounts 

(2) Before non-underlying items

(3) Declared and paid

Financial Summary

- This year was a 53-week year and the extra week added 2% to sales. Throughout this document, unless otherwise stated, we will compare sales and profit in the 53 weeks to January 2021 with the 52 weeks in the prior year. Due to the level of disruption in the year, we do not believe comparison on a 52-week basis would be helpful.

- Group revenue down 44.2% (down 44.1% in constant currency) to GBP352.0m compared to GBP630.5m in the prior year, driven by the ongoing impact of COVID restrictions on trading globally.

- Underlying loss before tax of GBP59.2m, primarily driven by lower revenue levels, and partially offset by our cost actions.

- Retail sales including eCommerce down 42.2% (down 42.1% in constant currency) to GBP254.3m, compared to GBP439.9m in the prior year.

- ECommerce sales up 22.0% (up 22.1% in constant currency) to GBP144.9m, compared to GBP118.7m in the prior year, supported by continued investment in our digital business and significant improvements to our customer journey. Growth in our directly operated eCommerce channels of 30.2%.

- Wholesale sales down 50.3% (down 48.6% in constant currency) to GBP85.3m, compared to GBP171.5m in the prior year, reflecting market pressure on our Trustees.

- Improvement in net cash of GBP 193.8m, which exceeds the net proceeds of the equity raise and disposal of the UBB building, representing positive free cash flow generation.

   -     Net cash of GBP66.7m at 30 January 2021, well ahead of management's expectations. 
   -     Upgrade of financial target.  We now expect a net cash position at YE2023. 

- Renewed Revolving Credit Facility (RCF). The Group has ongoing support from our four existing lending banks, with its facilities extended from August 2022 to November 2023, with a GBP90m facility until January 2022 and then GBP80m until November 2023, including a new set of covenants.

Operational and strategic highlights

In June 2020 we launched our three-year strategic transformation programme, Ted's Growth Formula. Our progress in executing this plan has been encouraging, despite several of the legacy issues facing the business having been amplified by COVID. Alongside a rapid and effective response to the pandemic, the foundations of our business are now fixed, and we are switching our focus to growth. Key highlights for the period include:

- Brand strength enhanced. The Ted Baker brand remains healthy, notwithstanding the impact of extensive store closures during the pandemic lockdown period. Customers have responded positively to our refreshed social media, campaign imagery and new product. NPS increased during the period and we have 1.2m active digital customers.

- Excellent cash flow management embedded into business. The business has demonstrated cashflow discipline throughout the period, with a tight grip on working capital and the implementation of a new commercial stock cycle.

- Significant cost action taken. The Group commenced a full cost review at the start of the year, which increased in scope and scale during COVID, with GBP31m of annualised payroll savings and GBP8m of negotiated rent savings during the year.

- China JV delivered strong growth in first full year of operation. Our Chinese business grew 6% during the year, despite the store closures during Q1. Growth was robust in both stores and online and we have a healthy pipeline of new stores in the year ahead. Q1 2022 has seen growth of 262% vs. prior year and 47% growth vs. Q1 2020.

These strong foundations have supported our further progress across the three core pillars of our strategy, which are designed to deliver a structurally more profitable business with higher ROCE and higher sustainable free cash flow generation. Highlights for the full year period and following the period end include:

   1.   Refresh and reenergise the product and brand 

- New product pyramid in place ensuring that brand identity is reflected in product while maintaining appropriate alignment with the market.

- Mad(e) in Britain capsule collection, which sits at the top of the pyramid and sets the creative tone for the collection, launched in November 2020 and was positively received.

- New Global Creative Director Anthony Cuthbertson joined in November 2020 and has hit the ground running, bringing a new energy and creative vision to Ted Baker.

- Good progress against our sustainability targets and a broader ESG programme in development, including 69% of cotton from sustainable sources and 100% of terminal product being donated to charity and avoiding landfill in the financial year.

   2.   Prioritise digital & asset light growth 

- All our key metrics relating to eCommerce and digital improved year-on-year, including new customer acquisition, total customers, online conversion rate, social media engagement, and retention.

- Significant enhancements to our digital experience. Key initiatives delivered during the period include:

o Major upgrade of our payment options to now include Apple Pay, Google Pay, Klarna and a series of local payment options.

o Introduction of virtual appointments via Hero, with in-store colleagues

o Launch of our new VIP programme DevoTED.

o Launch of Live Chat, among the first in our peer group to introduce this feature.

o Launch of Live Commerce

- We have signed several new high-quality product licence deals with category-leaders in recent months:

o Building on the successful start to our Childrenswear licence, NEXT has been appointed as our new licence partner for lingerie and nightwear.

o Baird Group has been appointed as our new licence partner for Men's Formalwear for the UK and Ireland.

o Bedeck has been appointed as our new licence partner for bedding and towels.

   -     We have strengthened our territory licence division with a number of deals: 

o Our strategic partnership with AFG has been enhanced, to now include a full omni-channel relationship for retail, eCommerce and wholesale for much of the MENA region. AFG has committed to open 14 new stores in the region over the coming six years. We have extended our agreement for ten years.

o MAP has been appointed our new licence partners for Indonesia.

   3.   Significant cost out programme 
   -     We have made material savings across our central costs and retail store costs. 

o Central and retail store costs: Annualised savings across both functions will be GBP31.0m per annum at a cash cost of GBP3.9m, ahead of previous guidance.

o Store estate: We have negotiated and delivered rent savings of GBP8m during the financial year. We also benefitted from GBP27.8m of turnover-related rent savings, reflecting the flexible nature of a large amount of our Retail space. We will be continuing our programme of rent renegotiations in the year ahead to reflect the new commercial realities.

Current Trading and Outlook

The Group is reporting Q1 revenues, for the first 12 weeks to 24 April 2021.

Q1 trading as been materially impacted by ongoing COVID restrictions, with lockdowns in place in the UK, Europe and Canada for parts of this period.

- Q1 FY22 Group revenue down 19.9% (down 17.3% in constant currency), driven by ongoing impact of COVID restrictions on trading globally.

o eCommerce up 4.5% (up 25.9% vs. Q1 FY20), as the Group starts to take a less heavy promotional stance compared to the prior year.

o Retail stores down 40.7% (down 73.1% vs. Q1 FY20). Globally, the Group lost 10 more trading days during the period than the prior year, with 53 days of trading during Q1 FY21 and 83 in Q1 FY20. We are encouraged with how our UK stores have performed since reopening on 12 April, albeit that revenue remains below FY20 levels. Our retail stores in metro cities and travel retail locations accounted for 36% of pre-COVID global store revenues and those stores remain materially below FY20 trading levels.

o Wholesale and Licence down 22.4% (down 48.3% vs. Q1 FY20) reflecting cautious ordering from store-based trustees, as well as continued restrictions on store openings in Europe.

- Gross profit margin for eCommerce has increased around 250 bps, reflecting the Group reducing promotional levels.

- eCommerce performance is set against an exceptionally promotional market last year. Our promotional stance in the FY22 quarter remained in line with the market, but we have begun to move towards a more typical promotional schedule.

- Net cash was GBP29.6m at 24 April 2021. This positive cash position reflects continuing action to manage working capital and reduce expenditure. Revolving credit facilities of GBP133m remained undrawn throughout the period.

The Group is implementing a new reporting calendar, aligned to internal management reporting, Q2 will represent weeks 13-28, Q3 weeks 29-40 and Q4 weeks 41-52. This new calendar will allow greater insights around trading margin and period end cash position. The Group does not intend to report against periods outside this new calendar, which is considered an appropriate level of financial disclosure.

Following the successful execution of the five operational targets that were set for Year 1 of the transformation plan, the Group has announced six operational targets for the new financial year, on the assumption of no further major lockdowns in core territories. The targets are as follows:

o Improve Product Proposition: increase full price sales mix in H2 by 500bps

o Drive Digital Development: complete eCommerce re-platform launch

o Sustain Brand Strength: Maintain top quartile NPS score

o Grow Global Footprint: Open 10 new stores in strategic markets

o Promote ESG: Increase sustainable cotton use to at least 75%

o Continue Property Cost Reduction: Base rent saving of at least 15%, and each renegotiation to deliver at least 50% reduction in base rent

 
 Enquiries: 
 Ted Baker Plc                               Tel: +44 (0) 20 7255 4800 
 Rachel Osborne, Chief Executive Officer 
 David Wolffe, Chief Financial Officer 
 
 
 Tulchan Communications                     Tel: +44 (0) 20 7353 4200 
 Jonathan Sibun/Jessica Reid 
 

Media images available for download at:

http://www.tedbakerplc.com/ted/en/mediacentre/imagelibrary

Notes to Editors

Ted Baker Plc - "No Ordinary Designer Label"

Ted Baker is a global lifestyle brand distributing across five continents through its three main distribution channels: retail (including eCommerce); wholesale; and licensing.

Ted Baker has 521 stores and concessions worldwide, comprising 182 in the UK, 99 in Europe, 136 in North America, 95 in the Middle East, Africa and Asia, and 9 in Australasia.

We offer a wide range of collections including Menswear; Womenswear; Accessories; Bedding; Childrenswear; Eyewear; Footwear; Fragrance and Skinwear; Gifting and Stationery; Jewellery; Lingerie and Sleepwear; Men's Underwear and Loungewear; Luggage; Neckwear; Rugs; Suiting; Technical Accessories; Wallpaper; and Watches.

Business and Financial Review

Business Review

The COVID-19 pandemic had a significant impact on the Group's performance, resulting in stores remaining closed for a significant proportion of the year and depressed in our key markets.

Global Group Summary

 
                                                   53 weeks      52 weeks    Variance       Constant 
                                                      ended         ended                   currency 
                                                 30 January    25 January                variance(1) 
                                                       2021          2020 
 Group        Revenue                            GBP352.0m     GBP630.5m     (44.2%)      (44.1%) 
             --------------------------------  ------------  ------------  ----------  ------------- 
  Gross margin (excluding 
   non-underlying items)                           54.2%         55.6%      (140) bps 
 --------------------------------------------  ------------  ------------  ----------  ------------- 
  Operating contribution 
   (excluding non-underlying                                                 (1,700) 
   items) *                                       (14.1%)        2.9%          bps 
 --------------------------------------------  ------------  ------------  ----------  ------------- 
  Operating (loss)/                                                          (1,860) 
   contribution margin**                          (28.1%)       (9.5%)         bps 
 --------------------------------------------  ------------  ------------  ----------  ------------- 
  (Loss)/Profit before 
   tax (excluding non-underlying 
   items) as a % of                                                          (1760) 
   revenue                                        (16.8%)        0.8%          bps 
 --------------------------------------------  ------------  ------------  ----------  ------------- 
  (Loss) before tax                                                          (1,830) 
   as a % of revenue                              (30.6%)       (12.3%)        bps 
 --------------------------------------------  ------------  ------------  ----------  ------------- 
 Retail       Revenue                            GBP254.3m     GBP439.9m     (42.2%)      (42.1%) 
             --------------------------------  ------------  ------------  ----------  ------------- 
  Ecommerce revenue                              GBP144.9m     GBP118.7m      22.0%        22.1% 
 --------------------------------------------  ------------  ------------  ----------  ------------- 
  Gross margin                                     57.5%         59.9%      (240) bps 
 --------------------------------------------  ------------  ------------  ----------  ------------- 
  Average square footage***                       421,435       442,790      (4.8%) 
 --------------------------------------------  ------------  ------------  ----------  ------------- 
  Closing square footage***                       411,602       438,483      (6.1%) 
 --------------------------------------------  ------------  ------------  ----------  ------------- 
  Sales per square 
   foot including eCommerce                         603           994        (39.3%)      (39.2%) 
 --------------------------------------------  ------------  ------------  ----------  ------------- 
  Sales per square 
   foot excluding eCommerce                         260           725        (64.2%)      (64.2%) 
 --------------------------------------------  ------------  ------------  ----------  ------------- 
 Wholesale    Revenue                            GBP85.3m      GBP171.5m     (50.3%)      (48.6%) 
             --------------------------------  ------------  ------------  ----------  ------------- 
  Gross margin                                     37.6%         39.8%       220 bps 
 --------------------------------------------  ------------  ------------  ----------  ------------- 
 Licensing    Revenue                            GBP12.4m      GBP19.0m      (34.5%)      (34.5%) 
             --------------------------------  ------------  ------------  ----------  ------------- 
 

*Operating contribution/(loss) (excluding non-underlying items) is defined as operating profit/(loss) before non-underlying items as a percentage of revenue.

**Operating contribution margin is defined as operating profit/(loss) as a percentage of revenue.

***Excludes licence partner stores.

Channel Performance

Retail

Our retail channel comprises stores, concessions and eCommerce, providing an omni-channel experience. We operate stores and concessions across the UK, Europe, North America and South Africa, and localised eCommerce sites in the UK, continental Europe, the US, Canada and Australia. We also have eCommerce businesses with many of our concession partners. Our stores are important to the success of our digital businesses through supporting brand awareness and showcasing our products. The relatively high number of concession locations and short lease length on our stores (averaging 3.5 years) allow us to maintain a flexible business model.

The performance of the Retail business reflects the unprecedented trading conditions across the world, with stores remaining closed to comply with local lockdowns, particularly during the first half of the year. Where they were remained open, footfall was significantly below normal levels. Demand shifted onto online channels, with eCommerce sales increasing to 57.0% (2020: 27.0%) of total retail sales in the year. Store performance improved in the second half as the impact of lockdown and trading restrictions was reduced, particularly in the run-up to the peak Christmas trading period.

We have continued to review and refine our store portfolio in line with new trading conditions. Given lower footfall, and despite discussions with landlords to renegotiate rent, we determined that a several locations would no longer be viable to operate and could be exited cost-effectively. We closed four stores during the year, contributing to a reduction in the average retail square footage of 4.8% to 421,435 sq ft (2020: 442,790 sq ft). This follows the transfer in the second half of FY20 of 14 stores in China and Hong Kong to joint ventures and 4 stores in Japan to a license partner. These stores generated GBP9.0m in sales during 2020.

During the first half the Group furloughed store colleagues in response to government-imposed lockdowns. As it became apparent that market demand was likely to remain weak for the remainder of the year, we reviewed the store staffing model and a significant number of roles were made redundant to ensure that stores remained viable. We benefitted from government support, such as business rates holidays and job support schemes, as well as rent savings and waivers through negotiations with landlords and reductions in turnover-related rent. Driving business through our online channels, as well as the highly offer-driven market through the year, necessitated some increased expenditure on marketing and promotions. As a result of all the cost movements combined, retail operating costs excluding non-underlying items decreased by 28.7% to GBP165.5m (2020: GBP232.2m).

Wholesale

Our wholesale business in the UK serves countries across the world, primarily in the UK and Europe, as well as supplying products to stores operated by our territorial licence partners. In addition, we operate a wholesale business in North America serving the US and Canada.

Wholesale sales decreased by 50.3% (48.6% in constant currency(1) ) to GBP85.3m (2020: GBP171.5m) as our wholesale trustees' businesses were also affected by COVID. Margin was adversely affected by the discounts we offered to support a number of key trustee businesses and an increase in the mix of off-price product, which contributed to the reduction in wholesale gross margin to 37.6% (2020: 39.8%) in the period.

Licence Income in revenue

We operate both territorial and product licences. Our licence partners are carefully selected as experts in their field and share our passion for unwavering attention to detail and firm commitment to quality.

Territorial licences cover specific countries or regions in Asia, Australasia, Europe, the Middle East, Africa and Central America, where our partners operate licensed retail stores and, in some territories, wholesale operations.

Product licences cover Bedding; Childrenswear; Eyewear; Fragrance and Skincare; Gifting and Stationery; Jewellery; Lingerie and Sleepwear; Men's Underwear and Loungewear; Luggage; Neckwear; Rugs; Suiting; Ted's Grooming Rooms; Technical Accessories; Wallpaper; and Watches.

Licence income decreased by 34.5% to GBP12.4m (2020: GBP19.0m). Product licence income was affected by the challenging trading environment and particularly impacted in formalwear, adversely affected by the increase in working from home, as well as the replacement of existing agreements for watches and childrenswear with new partners. Royalty payments from regional franchise operators were also impacted by the restrictions on trading and lower sales levels, particularly in the Middle East and Asia.

Collection Performance

Ted Baker womenswear sales decreased by 40.7% to GBP219.7m (2020: GBP370.4m) and represented 64.7% (2020: 60.6%) of total sales. Ted Baker menswear sales were down 50.3% to GBP119.8m (2020: GBP241.1m) and represented 35.3% of total sales (2020: 39.4%). Demand for more formal styles and occasionwear were particularly affected by lockdown, and these represent a greater proportion of the menswear range.

Geographic Performance

United Kingdom and Europe

 
                                53 weeks      52 weeks     Variance     Constant 
                                  ended         ended                   currency 
                                30 January    25 January               variance(1) 
                                   2021          2020 
 Revenue (inc. Licensing)       GBP246.8m     GBP422.6m    (41.6%)      (41.7%) 
                              ------------  ------------  ---------  ------------- 
 Total retail revenue           GBP181.9m     GBP296.9m    (38.7%)      (38.9%) 
                              ------------  ------------  ---------  ------------- 
 Store revenue                  GBP67.3m      GBP202.3m    (66.7%)      (67.0%) 
                              ------------  ------------  ---------  ------------- 
 ECommerce revenue              GBP114.6m     GBP94.6m      21.2%        21.0% 
                              ------------  ------------  ---------  ------------- 
 Average square footage*         276,437       284,533      (2.8%) 
                              ------------  ------------  ---------  ------------- 
 Closing square footage*         269,283       291,557      (7.6%) 
                              ------------  ------------  ---------  ------------- 
 Sales per square foot 
  including eCommerce sales      GBP658       GBP1,043     (36.9%)      (37.1%) 
                              ------------  ------------  ---------  ------------- 
 Sales per square foot 
  excluding eCommerce sales      GBP244        GBP711      (65.7%)      (66.0%) 
                              ------------  ------------  ---------  ------------- 
 Wholesale revenue              GBP52.4m      GBP106.7m    (50.9%)      (48.4%) 
                              ------------  ------------  ---------  ------------- 
 Own stores                        45            46         (2.2%) 
                              ------------  ------------  ---------  ------------- 
 Concessions                       205           242       (15.3%) 
                              ------------  ------------  ---------  ------------- 
 Outlets                           21            22         (4.5%) 
                              ------------  ------------  ---------  ------------- 
 Partner stores/concessions        10            11         (9.1%) 
                              ------------  ------------  ---------  ------------- 
 Total                             281           321       (12.5%) 
                              ------------  ------------  ---------  ------------- 
 

*Excludes licence partner stores

Lockdowns in several territories meant that our stores had to remain closed for parts of the year, with footfall remaining depressed even when stores were open. City centres and areas traditionally popular with tourists were the most badly affected. As a result, Retail sales in the UK and Europe decreased by 38.7% (38.9% in constant currency(1) ) to GBP181.9m (2020: GBP296.9m), with eCommerce sales increasing to represent 63.0% (2020: 31.9%) of the total. Many of our trustees and licence partners were also impacted by the challenging trading conditions, driving sales from our UK wholesale business lower by 50.9% (48.4% in constant currency)(1) .

North America

 
                                  53 weeks      52 weeks   Variance       Constant 
                                     ended         ended                  currency 
                                30 January    25 January               variance(1) 
                                      2021          2020 
 Revenue                        GBP102.8m     GBP194.6m    (47.2%)      (46.7%) 
                              ------------  ------------  ---------  ------------- 
 Total retail revenue           GBP69.9m      GBP129.8m    (46.1%)      (45.6%) 
                              ------------  ------------  ---------  ------------- 
 Store revenue                  GBP39.7m      GBP107.7m    (63.2%)      (62.8%) 
                              ------------  ------------  ---------  ------------- 
 ECommerce revenue              GBP30.3m      GBP22.1m      37.2%        3 8.3% 
                              ------------  ------------  ---------  ------------- 
 Average square footage*         137,894       138,152      (0.2%) 
                              ------------  ------------  ---------  ------------- 
 Closing square footage*         135,215       139,822      (3.3%) 
                              ------------  ------------  ---------  ------------- 
 Sales per square foot 
  including eCommerce sales      GBP507        GBP9 39     (46.0%)      (45.5%) 
                              ------------  ------------  ---------  ------------- 
 Sales per square foot 
  excluding eCommerce sales      GBP288        GBP780      (63.1%)      (62.7%) 
                              ------------  ------------  ---------  ------------- 
 Wholesale revenue              GBP32.8m      GBP64.8m     (49.3%)      (48.9%) 
                              ------------  ------------  ---------  ------------- 
 Own stores                        35            38         (7.9%) 
                              ------------  ------------  ---------  ------------- 
 Concessions                       64            64           0% 
                              ------------  ------------  ---------  ------------- 
 Outlets                           12            12           0% 
                              ------------  ------------  ---------  ------------- 
 Partner stores/concessions        25            26         (3.8%) 
                              ------------  ------------  ---------  ------------- 
 Total                             136           140        (2.9%) 
                              ------------  ------------  ---------  ------------- 
 

*Excludes licence partner stores.

In comparison to the UK & Europe, disruption to trading in North America stores started later, and the adverse impact on demand from COVID-19 was supplemented by political and social unrest. We closed 3 stores during the year, where the economics of reopening were unattractive, and renegotiated leases to further improve profitability in a number of other locations. This contributed in a drop in Retail sales of 46.1% (45.6% in constant currency(1) ) to GBP69.9m (2020: GBP129.8m).Our eCommerce business delivered a strong performance, with sales increasing by 37% to GBP30.3m (2020: GBP22.1m), Ecommerce sales represented 43.3% of total retail sales (2020: 17.0%).

Rest of the World

 
                                  53 weeks      52 weeks   Variance       Constant 
                                     ended         ended                  currency 
                                30 January    25 January               variance(1) 
                                      2021          2020 
 Revenue                         GBP2.4m      GBP13.3m     (82.0%)      (79.8%) 
                              ------------  ------------  ---------  ------------- 
 Total retail revenue            GBP2.4m      GBP13.3m     (82.0%)      (79.8%) 
                              ------------  ------------  ---------  ------------- 
 Store revenue                   GBP2.4m      GBP11.2m     (78.7%)      (76.1%) 
                              ------------  ------------  ---------  ------------- 
 ECommerce revenue                  -          GBP2.1m     (100.0%)     (100.0%) 
                              ------------  ------------  ---------  ------------- 
 Average square footage*          7,104        20,105      (64.7%) 
                              ------------  ------------  ---------  ------------- 
 Closing square footage*          7,104         7,104         0% 
                              ------------  ------------  ---------  ------------- 
 Sales per square foot 
  including eCommerce sales      GBP337        GBP662      (49.1%)      (42.9%) 
                              ------------  ------------  ---------  ------------- 
 Sales per square foot 
  excluding eCommerce sales      GBP337        GBP558      (39.6%)      (32.3%) 
                              ------------  ------------  ---------  ------------- 
 Own stores                         4             4           0% 
                              ------------  ------------  ---------  ------------- 
 Concessions                        0             0           0% 
                              ------------  ------------  ---------  ------------- 
 Outlets                            0             0           0% 
                              ------------  ------------  ---------  ------------- 
 Partner stores/concessions        79            83         (4.8%) 
                              ------------  ------------  ---------  ------------- 
 Joint venture locations           21            15         40.0% 
                              ------------  ------------  ---------  ------------- 
 Total                             104           102         2.0% 
                              ------------  ------------  ---------  ------------- 
 

*Excludes licence partner stores.

The reduction in sales outside of our core European and North American businesses reflects the evolution of our distribution strategy.

In the second half of FY20, we transitioned our businesses in China (including Hong Kong S.A.R. and Macau S.A.R.) to a joint venture, covering 14 stores and concessions, and eCommerce, with the income from these businesses now reflected in other income.

In China, our venture's expansion plans have been delayed by COVID, but managed to open seven during the period, and now operates 21 stores and concessions across the region (2020: 15 locations).

In Japan, we announced an agreement with our licence partner Sojitz Infinity in August 2019, and transitioned operations into the partnership during the second half of FY20. Our partner opened three new stores, and now operates seven stores and concessions across the region (2020: four locations).

The joint venture with our Australian licence partner, Flair Industries Pty Ltd, operates nine stores in Australasia (2020: nine stores).

Financial Review

The COVID-19 pandemic had a significant impact on the Group's performance, resulting in stores remaining closed for a significant proportion of the year and depressed demand in our key markets. While a proportion of demand shifted to online channels, this was not enough to compensate for the shortfall in store sales in the year. As a result, Group revenue decreased by 44.2% (44.1% decrease in constant currency(1) ) to GBP352.0m (2020: GBP630.5m) for the 53 weeks ended 30 January 2021.

This reduction in revenue was particularly marked during Quarter 2 when the full impact of lockdowns began to bite internationally, and affected all channels, especially wholesale.

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Gross margin before non-underlying items was 54.2% (2020: 55.6%). At a trading level, the impact of falling demand, restrictions on store trading and retailers' need for cash was that the market became highly promotional. This was particularly pronounced during the first half, as we acted to clear stock and drive additional cash. Margins improved substantially during the second half as stores in the UK and Europe re-opened and inventory levels were brought in line. The second half improvement was limited, however, as sales of higher margin categories occasionwear and outerwear remained below normal levels on account of increased working from home and reduced opportunities for socialising.

The Group reacted rapidly to unprecedentedly challenging conditions of rapidly shrinking sales by reducing operational expenditure, furloughing staff in both stores and head office, utilising support schemes offered by the British and other governments and initiating cost control and restructuring programmes. Excluding non-underlying costs, distribution costs, which comprise the cost of retail operations and distribution centres, decreased by 28.0% to GBP175.9m (2020: GBP244.1m), and administration expenses decreased by 19.6% to GBP71.0m (2020: GBP88.3m). These decreases resulted from the implementation of cost savings initiatives in the business, including

-- making headcount reductions in store and head office permanent staff, where appropriate, saving GBP31m on an annualised basis

-- initiating discussions with our landlords to abate fixed rent during the closure periods and reduce rent thereafter to reflect lower levels of footfall. This generated savings of GBP8.0m in the year.

Loss/profit before tax and non-underlying items and Loss/profit before tax

The loss before tax was GBP107.7m (2020: loss of GBP77.6m). The loss before tax, non-underlying items was GBP59.2m (2020: profit of GBP4.8m).

Non-underlying items

Non-underlying items before tax in the period amounted to GBP48.6m (2020: GBP82.4m) and comprised the following items expenses / (income):

 
                                                53 weeks ended     52 weeks ended 
                                                    30 January         25 January 
                                                          2021    2020 (Restated) 
---------------------------------------------  ---------------  ----------------- 
                                                       GBP'000            GBP'000 
Included in cost of sales: 
Inventory changes in estimates                         (6,065)           (32,351) 
Change to inventory obsolescence provision                   -           (13,539) 
Onerous contract provision                             (1,973)                  - 
Other                                                       81              2,221 
                                               ---------------  ----------------- 
Included in Gross Profit                               (7,957)           (43,669) 
Included in distribution costs : 
 (Loss) on disposal of business                              -            (7,585) 
Impairment of intangibles, property, 
 plant and equipment and right-of-use 
 assets                                               (45,303)           (13,969) 
Other closure costs                                          -              (603) 
Included in administrative costs: 
Acquisition costs and unwind of fair 
 value accounting adjustments                          (1,987)            (4,710) 
Reorganisation, restructuring costs and 
 other legal and professional costs                   (11,415)            (7,852) 
Included in Other Operating (Loss)/income: 
Gain on disposal of business                            17,446                  - 
Included in operating profit                          (49,216)           (78,388) 
Included in share of post-tax profits 
 from joint venture: 
Unwind of fair value adjustments                           (7)              (989) 
Included in finance income/(expense): 
 Foreign exchange on the translation of 
 monetary assets and liabilities denominated 
 in foreign currencies                                     655            (3,026) 
Non-underlying items                                  (48,568)           (82,403) 
                                               ---------------  ----------------- 
 

Note: details of the restatement and of the above items can be found in the notes to the accounts

Finance income and expenses

Net finance expenses were GBP7.7m (2020: GBP15.5m). The IFRS 16 interest expense for the period was GBP6.8m (2020: GBP8.3m). Excluding the impact of non-underlying items, net finance expenses were GBP8.4m (2020: GBP12.4m).

Taxation

The Group tax credit for the period was GBP21.3m (2020: credit of GBP9.4m). This effective tax rate is lower than the UK tax rate for the period of 19%, primarily due to the Group being loss making in territories where it has major market operations and due to the utilisation of previously unrecognised tax losses in territories with higher tax rates.

Cash Flow

We took prompt action to support the Group's cash position, to ensure it has sufficient resources to trade through an extended period of weak demand while investing in profitable growth. We brought in additional financing through the sale of the Ugly Brown Building for gross proceeds of GBP77.8m and the issuance of GBP105.0m new equity (gross).

The Group's working capital position was also reviewed. Actions to maintain cash and manage liquidity included

   --    increased sell-through and liquidation of older, excess stock 
   --    significantly intake reductions to align stock levels with demand 
   --    agreeing extended payment terms with suppliers 
   --    deferral of rental payments 

As a result, net working capital, which comprises inventories, trade and other receivables and trade and other payables, decreased by GBP68.3m to GBP34.4m (2020: GBP102.7m). Continued tight cash management ensured that, despite a second UK lockdown during December and January, net cash outflow was minimal during the second half.

Group capital expenditure of GBP7.0m (2020: GBP25.8m) has been significantly reduced. We are continuing to invest in systems and infrastructure to support our digital businesses and improve efficiency, but investment on physical locations has been limited only to essential works.

Borrowing facilities

The Group's net cash balance at 30 January 2020 was GBP66.7m (2020: net debt GBP127.1m). On 23 March 2020, the Group announced that its lending bank syndicate agreed to increase the headroom under the Group's revolving credit facilities of GBP180m (Facility A), by a further GBP13.5m until 18 December 2020 (Facility B). On 20 May 2020, the lending bank syndicate agreed to increase the headroom under Facility B by a further GBP11.5m, taking the total Facility B facility to GBP25m, with a revised Facility B expiry date of 18 January 2022.

The additional facility announced on 23 March 2020 was made available in conjunction with the exchange of contracts for the sale of Big Lobster Limited, a wholly owned Group subsidiary, which owns the Group's Head Office in London. In connection with the sale, the Group entered into a short-term lease of the property for a period following completion from 1 June 2020 to 31 March 2023. The consideration from the sale was GBP78.75m paid in cash by the buyer on completion, in June 2020. The net proceeds of the sale of GBP72.2m, after fees and taxes, was applied to repay existing indebtedness under Facility A to significantly de-lever the Group. The remaining available facilities totalled GBP132.8m, with GBP107.8m in Facility A and GBP25m in Facility B.

On 25 May 2021 the Group announced that it signed an extension to its revolving credit facility with its existing lending syndicate. The new agreement extends the revolving credit facility maturity from September 2022 to November 2023 and amends the covenants. Under the new agreement, the existing Facility A of GBP107.8m maturing in September 2022 and Facility B of GBP25m maturing in January 2022, will be replaced by a new RCF of GBP90m reducing to GBP80m in January 2022 until maturity in November 2023. The existing lending syndicate continues to show ongoing support to the Group.

The amended revolving credit facility includes among other changes amendments to the quarterly covenant tests on adjusted EBITDA, leverage ratio and fixed charge cover, providing further financial flexibility for the Group.

Treasury risk management

The most significant exposure to foreign exchange fluctuation relates to purchases made in foreign currencies, principally the US Dollar and the Euro.

A proportion of the Group's purchases are hedged in accordance with the Group's risk management policy, which allows for foreign currency to be hedged for up to twenty-four months in advance. The balance of purchases is hedged naturally as the business operates internationally and income is generated in the local currencies. The Group is also exposed to movements in foreign exchange rates on intercompany balances denominated in a foreign currency. These are not hedged. In April 2020, the Group exited its foreign exchange contracts to crystallise a cash gain of GBP6.9m, and as a result, the Group's foreign exchange risk was unhedged for most of FY21. At 30 January 2021, the Group held foreign exchange contracts for the right to purchase USD.

The Group is exposed to movements in UK interest rates as the revolving credit facility accrues interest based on floating LIBOR plus a margin. The Group does not hold any interest rate hedge contracts.

Brexit

The Group undertook a significant preparatory steps for Brexit on 1 January 2021 at the end of the current transitional period, and despite the challenging timing of the deal between the UK Government and European Union, we have put in place a number of administrative and legal changes to our operational processes to mitigate the impact of Brexit. To date, the main operational impacts have been the flow of goods into the UK through the ports, and from the UK to stores and customers in Europe.

We have set up a customs warehouse in the UK, which became operational in April 2021 and has partially mitigated the impact of higher duties, but there remain a number of other areas outstanding, including rules of origin and reclamation of input VAT. We expect that a full year impact of Brexit on profits will be c.GBP5m, and anticipate, only to a limited extent, mitigating the extra cost of duties through the reflowing of inventory for our EU stores.

Earnings per share and dividends

The basic loss per share was 56.2p (2020: loss per share 153.0p). Underlying loss per share, which excludes non-underlying items, changed to a loss of 26.0p (2020: earnings per share 6.7p).

Given current trading conditions and the high level of uncertainty about the future, the Board has determined that no final dividend is to be paid (2020: 40.7p). In the long term we remain committed to paying dividends and returning surplus cash to our shareholders.

David Wolffe

Chief Financial Officer

Notes:

1. Constant currency comparatives are obtained by applying the exchange rates that were applicable for the period ended 25 January 2020 to the financial results in overseas subsidiaries for the 53 weeks ended 30 January 2021 to remove the impact of exchange rate fluctuations

Principal Risks and Uncertainties

Risk management is a key part of Ted Baker's business strategy and success. As with any business, we face inherent risks, and we keep these under constant review. At the same time, we consider potential new risks and actions we can take to reduce or where possible eliminate them. Of course, risk management is not an exact science; it is designed to manage the risk of failure to reach our business objectives. Not surprisingly, in a year that has seen heightened risks ranging from COVID-19 to the recapitalisation of the balance sheet and the stock inventory review, risk has been high on our agenda.

As a result, we have reviewed our approach to risk through the year. Important actions included the refresh of the management Risk Committee and developing our Group-wide programme to risk, which lets us identify, analyse and assess risks and then manage, control and monitor them. The Board and the Audit & Risk Committee work together with the management Risk Committee to deal with different aspects of the process. Our ongoing process for identifying, evaluating and managing the significant and emerging risks faced by the Group has been in place throughout the year.

Oversight

Our risk oversight is designed to give a clear picture of risk from every angle, from Group to operational levels.

 
 Board             The Board is ultimately responsible for our approach 
                    to risk management and internal controls. It 
                    is also responsible for reviewing the effectiveness 
                    of our management and controls and setting the 
                    Group's appetite for risk. This is done on a 
                    regular basis, helping us to identify emerging 
                    risk and assess the status of existing risk. 
                    Risk management will continue to be a key focus 
                    for the Board next year. 
 Audit & Risk      The Audit & Risk Committee is responsible for 
  Committee         overseeing and reviewing the effectiveness of 
                    the Group's internal control and risk management 
                    systems. It reports its findings to the Board 
                    regularly through the year and also assesses 
                    the findings and recommendations of the Management 
                    Risk Committee and the Group's external and internal 
                    audit processes, then looks critically at how 
                    the business responds. 
                  --------------------------------------------------------- 
 Executive         The Executive Team is responsible for the identification 
  Team              and evaluation of significant risks applicable 
                    to their areas of the business, along with the 
                    design and operation of suitable internal controls. 
                    These risks are assessed on an ongoing basis 
                    through the year and may be associated with a 
                    variety of internal or external sources. 
                  --------------------------------------------------------- 
 Management        The management Risk Committee was re-established 
  Risk Committee    last year. It reviews risk management and control 
                    process for each of our key business areas. Its 
                    members include relevant people from the Executive 
                    Team and heads of department. This is designed 
                    to give more people ownership of risk across 
                    the business and to keep risk front of mind on 
                    a day-to-day basis. 
                  --------------------------------------------------------- 
 

This year, the Audit & Risk Committee reviewed and adopted revised terms of reference which can be found on the Company website www.tedbakerplc.com. The revised terms cover:

o The authority, resources and co-ordination of those involved in the identification, assessment and management of significant risks faced by the Group.

o The response to the significant risks which have been identified by management and others.

o The maintenance of a controlled environment directed towards the proper management of risk.

o The ability to raise awareness of potential emerging risks and their assessment.

o The annual reporting procedures.

Principal Risks

 
                                                    Principal Risks 
                Risk category           Potential issue               Mitigation                        Change in 
                 / issue                                                                                 level of 
                                                                                                           risk 
               ----------------------  ----------------------------  ---------------------------  -------------------- 
 Market         COVID-19                The longevity                 While some sales                 Increased, 
  risks                                  of the pandemic               may migrate to                  as pandemic 
                                         could lead to                 the Company's                  impact spread 
                                         further lockdown              eCommerce operations,             globally 
                                         store closures,               it is unlikely 
                                         team members on               that sales through 
                                         furlough and the              this distribution 
                                         need to discount.             channel will fully 
                                         This could lead               replace revenue 
                                         to more redundancies          lost to store 
                                         and store closures            and concession 
                                         in the longer                 closures. We will 
                                         term.                         need to explore 
                                                                       all UK government 
                                                                       support schemes 
                                                                       and take steps 
                                                                       to reduce costs 
                                                                       and protect cash 
                                                                       flow. This will 
                                                                       include suspending 
                                                                       all non-essential 
                                                                       capital expenditure, 
                                                                       stopping discretionary 
                                                                       operating expenses, 
                                                                       furloughing team 
                                                                       members and restricting 
                                                                       travel 
               ----------------------  ----------------------------  ---------------------------  -------------------- 
                Economic                Due to a slowdown             We carefully manage              Increased, 
                 downturn               in the economy,                costs and regularly             as a result 
                                        there is a decrease            update the Board               of the global 
                                        in demand for                  on performance.                   pandemic 
                                        Ted Baker's products.          We work to ensure 
                                        For example, people            our fixed costs 
                                        have less disposable           are managed well. 
                                        income to spend                And we make sure 
                                        on non-essential               we are 'no ordinary 
                                        items. This could              brand', with product 
                                        lead to the need               that reflects 
                                        to discount and                this differentiated 
                                        reduce margin                  positioning and 
                                        or hold excess                 continues to attract 
                                        stock, ultimately              customers. 
                                        affecting the 
                                        bottom line and 
                                        business 
                                        profitability/viability, 
                                        as well as damaging 
                                        the Ted Baker 
                                        brand. 
               ----------------------  ----------------------------  ---------------------------  -------------------- 
                Competition             A lack of insight             We regularly review              Increased, 
                                         around customers              performance, product,           as a result 
                                         and competitors               price and our                  of the global 
                                         could result in               competitors to                    pandemic 
                                         Ted Baker being               make sure we are 
                                         overtaken by the              best placed to 
                                         competition, particularly     succeed in a competitive 
                                         if our market                 market. We continue 
                                         position isn't                to invest in our 
                                         clear. This could             online business, 
                                         reduce our market             including the 
                                         share and supply              appointment of 
                                         chain buying power            a Chief Customer 
                                         if we are not                 Officer, Jennifer 
                                         seen as competitive           Roebuck, to steer 
                                         with other brands             this activity. 
                                         or we fail to 
                                         offer a competitive 
                                         and suitably diverse 
                                         product mix. 
               ----------------------  ----------------------------  ---------------------------  -------------------- 
                Changing                We fail to understand         We maintain a                    Increased, 
                 customer                and respond to                high level of                   as a result 
                 preferences             changes in customer           market awareness               of the global 
                                         preferences. For              and an understanding              pandemic 
                                         example, lack                 of consumer trends 
                                         of stock diversity            and fashion so 
                                         or preferred shopping         we can respond 
                                         channel, or lack              to changes in 
                                         of influencer                 consumer preference. 
                                         recommendation,               We use customer 
                                         results in Ted                data to develop 
                                         Baker losing its              targeted marketing 
                                         competitive edge.             and promotional 
                                         This could lead               activity. We continue 
                                         to a loss of sales,           to focus on product 
                                         reduced margins,              design, quality 
                                         missed opportunities          and attention 
                                         for growth or                 to detail 
                                         a poor balance 
                                         of sales channels 
               ----------------------  ----------------------------  ---------------------------  -------------------- 
                Execution                    Failing to deliver       The Group's Directors             No change 
                 of transformation           our corporate             and Executive 
                 strategy                    transformation            Team have set 
                                             strategy could            up regular reviews 
                                             result in Ted             to monitor and 
                                             Baker not realising       assess the ongoing 
                                             the long-term             progress of the 
                                             goals of the business.    new transformation 
                                             This could be             strategy with 
                                             a result of:              detailed execution 
                                             o The wrong               plans. These plans 
                                             transformation            are designed to 
                                             strategy being            successfully deliver 
                                             rolled out to             the new strategy 
                                             the business (or          while reducing 
                                             failing to pivot          any new risk 
                                             that strategy 
                                             if the operating 
                                             environment changes). 
                                             o A lack of bandwidth 
                                             - starting on 
                                             too many activities 
                                             without sufficient 
                                             resource, an inability 
                                             to focus on future 
                                             value due to 
                                             short-term 
                                             firefighting, 
                                             an inability to 
                                             retain and recruit 
                                             the right talent, 
                                             confusion around 
                                             responsibility 
                                             for individual 
                                             workstreams, 
                                             misaligned 
                                             prioritisation 
                                             or competing 
                                             priorities. 
                                             For example, failing 
                                             to align our finance 
                                             strategy with 
                                             the wider business 
                                             strategy, inability 
                                             to deliver strategy 
                                             due to budget 
                                             constraints. 
               ----------------------  ----------------------------  ---------------------------  -------------------- 
                Real estate             Unable to respond             We have launched                 Increased, 
                 agility                 to market changes             a comprehensive                 as a result 
                                         around real estate            programme of landlord          of the global 
                                         - meaning we cannot           renegotiations                    pandemic 
                                         negotiate new                 internationally 
                                         contracts that                to ensure that 
                                         support a profitable          existing and new 
                                         store opening                 contracts are 
                                         and/or exit old               both flexible 
                                         contracts that                and commercially 
                                         are no longer                 viable, 
                                         commercially viable. 
                                         Inability to structure 
                                         leases in a flexible 
                                         way could limit 
                                         our ability to 
                                         operate on the 
                                         high street or 
                                         being tied to 
                                         long and potentiality 
                                         expensive leases 
               ----------------------  ----------------------------  ---------------------------  -------------------- 
                Margin deliverability   Factors such as               We maintain a                     No change 
                 / foreign               foreign exchange              regular and rigorous 
                 exchange                movements, an                 forecasting cycle 
                                         inability to pass             that enables early 
                                         on increased costs            action to hedge 
                                         to customers and              foreign exchange 
                                         produce goods                 risk and manage 
                                         for less could                cost variations. 
                                         mean the Company 
                                         fails to meet 
                                         our goal to improve 
                                         margin. 
               ----------------------  ----------------------------  ---------------------------  -------------------- 
 Reputational   Brand reputation        A revitalised                 Our dedicated                     Increased 
  risks          / identity              product mix with              team focuses on               as we implement 
                 crisis                  a new composition             reputational matters         the transformation 
                                         of product categories,        relating to Ted                   strategy 
                                         combined with                 Baker. The team 
                                         a change in focus             is made up of 
                                         on target audience            internal stakeholders 
                                         could send mixed              and external consultants. 
                                         messages to consumers,        We deal with reputational 
                                         resulting in a                issues swiftly 
                                         loss of core loyal            and in a considered 
                                         customers and                 way. We carefully 
                                         failure to engage             consider each 
                                         new customers                 new partner we 
                                         and influencers               do business with. 
                                                                       And all partners 
                                                                       are subject to 
                                                                       due diligence 
                                                                       and monitored 
                                                                       on an ongoing 
                                                                       basis to make 
                                                                       sure they remain 
                                                                       appropriate for 
                                                                       the brand. 
               ----------------------  ----------------------------  ---------------------------  -------------------- 
                Corporate               Exposure of stakeholders      We have clear                     No change 
                 reputation              to negative media             governance and 
                                         stories could                 people policies 
                                         lead to reputational          that seek to prevent 
                                         damage affecting              reputational issues 
                                         the ability to                arising. 
                                         attract and retain 
                                         investors, customers 
                                         and team members 
               ----------------------  ----------------------------  ---------------------------  -------------------- 
 Supply         Supplier                A failure to evaluate         We have reduced                    Reduced 
  and            risk                    suppliers, set                the number of 
  value                                  up suitable commercial        suppliers globally, 
  chain                                  contracts, or                 concentrating 
  risks                                  establish supplier            on our strongest 
                                         management protocols          partnerships 
                                         (including ongoing 
                                         monitoring), could 
                                         leave Ted Baker 
                                         exposed to supplier 
                                         failure, an inability 
                                         to source goods 
                                         or significant 
                                         margin pressure. 
               ----------------------  ----------------------------  ---------------------------  -------------------- 
                Critical                Without creating              We continue to                   Increased, 
                 path / agility          a more agile approach         review the length               as a result 
                                         to the critical               of our critical                of the global 
                                         path and enhancing            path to maximise                  pandemic 
                                         speed to market               our responsiveness 
                                         we won't be able              and agility. We 
                                         to take advantage             maintain flexibility 
                                         of opportunities              in buying through 
                                         in the market                 creating room 
                                         as they arise                 for 'open to buy' 
                                         and would lose                in portions of 
                                         out to competitors            stock planning 
                                         who can respond               and 'speed to 
                                         faster.                       market' in areas 
                                                                       of product design. 
               ----------------------  ----------------------------  ---------------------------  -------------------- 
                Control environment     Insufficient or               We are executing                  No change 
                                         inadequate checks,            a broad controls 
                                         controls and processes        remediation programme 
                                         could result in               with the support 
                                         limited financial             of a specialist 
                                         oversight, leading            team from Deloitte. 
                                         to errors, misstatement       This programme 
                                         or fraud. A weak              ensures continuous 
                                         control environment           review of controls 
                                         could lead to                 as well as progressive 
                                         poor business                 improvements. 
                                         decisions or decisions 
                                         made by team members 
                                         who do not have 
                                         adequate insight 
                                         or authority such 
                                         as changing supplier 
                                         or customer payment 
                                         terms, oversight 
                                         over stock quantities 
                                         and stock buy. 
                                         A weak control 
                                         environment could 
                                         also lead to an 
                                         impaired ability 
                                         to forecast revenues 
                                         and profits and 
                                         inaccurate accounting. 
               ----------------------  ----------------------------  ---------------------------  -------------------- 
                Merchandising           Inventory risk                We maintain a                     No change 
                 / stock obsolescence    due to stock obsolescence     regular and rigorous 
                                         could lead to                 forecasting cycle 
                                         a write-off that              that enables appropriate 
                                         damages profitability         stock ordering, 
                                         and asset value.              as well as early 
                                         This could be                 action to recognise 
                                         a result of inaccurate        and monetise elevated 
                                         forecasting, lack             stock levels 
                                         of relevance to 
                                         customers, high 
                                         price points or 
                                         poor inventory 
                                         controls, and 
                                         poor management 
                                         of revenue data 
                                         to drive decision-making 
               ----------------------  ----------------------------  ---------------------------  -------------------- 
                IT resilience           A lack of resiliency          We have a steering                No change 
                 and continuity          or business continuity        committee to review 
                                         plans could result            major IT projects 
                                         in a failure to               and an infrastructure 
                                         withstand any                 of senior team 
                                         shocks and an                 members across 
                                         inability to adapt            IT, legal and 
                                         during a crisis.              procurement along 
                                         For example, failure          with external 
                                         to take more sales            professional advisers. 
                                         online while shops            We have introduced 
                                         are forced to                 a new security 
                                         close, inability              manager role and 
                                         to adapt effectively          adopted new security 
                                         and communicate               measures during 
                                         action required               the year. In addition, 
                                         during a crisis.              the Group has 
                                                                       a clear and robust 
                                                                       approach to change 
                                                                       management with 
                                                                       project managers 
                                                                       to overseas major 
                                                                       projects with 
                                                                       the key business 
                                                                       stakeholders. 
               ----------------------  ----------------------------  ---------------------------  -------------------- 
 People         Talent management       Failing to attract            Identification                    No change 
  risks                                 and retain the                 and retention 
                                        best talent could              of key talent 
                                        mean we cannot                 is vital and we 
                                        achieve our strategic          take active steps 
                                        goals through                  to keep the team 
                                        a lack of the                  stable and secure. 
                                        innovation, objectivity        An annual benchmarking 
                                        and diversity                  review ensures 
                                        we need to support             we offer competitive 
                                        customer and market            remuneration and 
                                        needs. We may                  total reward packages. 
                                        not meet our business          We also utilise 
                                        objectives if                  long-term incentive 
                                        we fail to retain              schemes to retain 
                                        and train existing             key talent. Employee 
                                        team members so                engagement through 
                                        their skill sets               our culture and 
                                        evolve to meet                 environment strengthens 
                                        the needs of the               the commitment 
                                        business. Failing              of team members 
                                        to attract new                 and has a positive 
                                        team members with              impact on our 
                                        the right capabilities         retention rate. 
                                        and ensuring market            Succession plans 
                                        competitiveness                are in place and 
                                        (through competitive           have been reviewed 
                                        salary, benefits               during the period. 
                                        and flexible working)          The Group has 
                                        could also undermine           put policies and 
                                        our ability to                 procedures in 
                                        complete our transformation    place to detect 
                                        strategy.                      and deal with 
                                                                       people matters. 
                                                                       This includes 
                                                                       robust reporting 
                                                                       channels through 
                                                                       an independent 
                                                                       helpline. 
               ----------------------  ----------------------------  ---------------------------  -------------------- 
                Diversity               Without a sufficient          The business has                  New risk 
                 and inclusion           focus on inclusion            engaged a specialist 
                                         across all levels             consultancy to 
                                         of the business               support us as 
                                         there is a risk               we build our inclusion 
                                         that team members             strategy. We have 
                                         will become demotivated       held listening 
                                         which could damage            sessions across 
                                         performance and               the Group and 
                                         reputation                    we are building 
                                                                       a clear plan to 
                                                                       recognise inclusivity 
                                                                       as a global business 
               ----------------------  ----------------------------  ---------------------------  -------------------- 
 
 
                      Emerging risks and uncertainties 
 Risk category         Description 
  / issue 
                      ------------------------------------------------------ 
 Data analytics        A lack of understanding and effective use of 
  / data management     collected data could result in Ted Baker missing 
                        opportunities to strengthen its business and 
                        drive informed decision-making through robust 
                        management information and data analysis. For 
                        example, this could include using collected 
                        customer data to perform analytics that gather 
                        insights on customer demands and use this to 
                        improve decision-making and customer engagement. 
                      ------------------------------------------------------ 
 Marketing /           Limited investment in marketing and supporting 
  consumer targeting    the new product mix or targeting the incorrect 
                        customer profile, new influencers and joint 
                        venture partners could lead to missed revenue 
                        opportunities, with products failing to realise 
                        their full potential and being overshadowed 
                        by competitor products. Focusing on customers 
                        who don't align with Ted Baker's product and 
                        brand could also lead to a loss of brand equity. 
                      ------------------------------------------------------ 
 Risk and crisis       The absence of a clearly defined risk management 
  management            strategy and poor dedicated resource could 
                        result in a lack of awareness of internal and 
                        external business critical risks. This could 
                        lead to: a lack of insight into how and when 
                        risks could affect the business and the potential 
                        damage they could cause; an inability to identify 
                        and address emerging risks; a failure to monitor 
                        changes in the level of existing risks; and 
                        a failure to ensure effective controls are 
                        in place to manage these risks. All this could 
                        result in failure to proactively manage risks, 
                        leading to the need to adjust the business 
                        strategy and/or associated assumptions with 
                        little warning. 
                      ------------------------------------------------------ 
 Sales channel         Disagreement about and a lack of clarity on 
  optimisation          Ted Baker's channel strategy, including our 
                        eCommerce strategy, could result in missed 
                        growth opportunities. This could lead to competitors 
                        overtaking Ted Baker's market share with customers 
                        seeking out a more versatile retailer 
                      ------------------------------------------------------ 
 Increasing            Failure to comply with relevant regulatory 
  regulations           requirements in relation to tax, financial 
  / legal / tax         reporting, health and safety and GDPR could 
  compliance            lead to fines and legal actions. For example, 
                        fines or penalties when there is failure to 
                        comply with changing export/import regulation 
                      ------------------------------------------------------ 
 Sustainability        Our business depends on our suppliers being 
  and climate           able to maintain continuity of service to provide 
  change                a consistent supply of goods to customers. 
                        Natural events and increasing changes to government 
                        policy may impact our suppliers' ability to 
                        do this. 
                      ------------------------------------------------------ 
 

Viability statement

In accordance with Provision 31 of the UK Corporate Governance Code dated July 2018 (the Code), the Directors have assessed the prospects and viability of the Group, taking into account the Group's current position and the potential impact of principal risks documented above.

The Group's objective remains the same; to continue to grow and develop the Ted Baker brand through Ted's Growth Formula which is supported by the actions undertaken during the year to support the balance sheet in the sale and leaseback of our head office and equity raise.

The Group operates a three-year plan, which is updated and reviewed regularly by the Board. Within the three-year plan, detailed scenario planning and stress testing was carried out over a period to 27 January 2024, in the form of a Base Case and a Severe but Plausible forecast, to assess the viability and prospects of the Group with a high level of certainty. The key assumptions made in the formulation of the three-year plan are the increased exposure and promotion of the Ted Baker brand through digital, geographical diversification of sales, growth of eCommerce and turnover projections. The Severe but Plausible forecast was overlaid after considering a prolonged severe disruption to trade caused by the COVID-19 pandemic, while also considering current and future risks disclosed in the Annual Report.

The Directors' assessment has been further enhanced by analysing the current and future risks, controls and assurances available, resulting in a clear picture of the risk profile across the whole business. The principal risks that could affect the future viability of the Group over the three years are identified above in Principal Risks and Uncertainties. In making this assessment the Directors have considered the resilience of the Group to the occurrence of these risks in both Base Case and Severe but Plausible scenarios.

In addition, the Board has considered the impact on the Group's cash flows, headroom, covenants and other key financial ratios under both Base Case and Severe but Plausible scenarios. The Board has considered the Group's refinancing and covenants within the Financial Review section above, and below within the Going Concern section. Sensitivity analysis was used to stress test the Group's Base Case and Severe but Plausible scenarios to confirm that sufficient headroom would remain available under the Group's credit facilities. The sensitivity analysis was performed in the form of a Reverse Stress Test described further in the Going Concern section below. The Group has also stressed tested the Group's strategic plans in light of COVID-19 and the impact on the business and global trade. The situation is continually evolving which in turn is creating uncertainty across most of the Group's markets. The Board has considered that under each scenario tested, the mitigating actions would be effective and sufficient to ensure the continued viability of the Group and adequate liquidity and covenant headroom exists. The directors have further considered the Severe but Plausible downside scenario and the associated uncertainty expanded in the Going Concern section below.

For the reasons stated above, based on the robust assessment undertaken, the Directors confirm they have a reasonable expectation that the Group will be able to continue in operation, and meets its liabilities as they fall due, over the period of assessment.

Going concern statement

The consolidated financial statements have been prepared on a going concern basis. The Directors have prepared a going concern assessment covering the 12-month period from the date of signing these financial statements, which demonstrates that the Group is capable of continuing to operate within its existing facilities and can meet its financial covenant tests during the period. The Directors' assessment considers the principal risks facing the business, and a series of financial forecasts, which include a review of current performance and forecasts of revenue across all sales channels combined with ongoing expenditure including capital expenditure and borrowing facilities. The forecasts have been prepared whilst considering various levels of disruption from the COVID-19 pandemic. The Directors have concluded that it is appropriate to adopt the going concern basis of accounting in preparing these financial statements.

 
 Group Income Statement 
 

For the 53 weeks ended 30 January 2021

 
   53 weeks ended 30 January   52 weeks ended 25 January 
              2021                        2020 
 
 
                    Underlying   Non-underlying     Total          Underlying   Non-underlying       Total 
                                    items(1)                                       items(1)      (Restated)(2) 
                                                                                 (Restated)(2) 
                     GBP'000        GBP'000        GBP'000          GBP'000        GBP'000          GBP'000 
 
 Revenue             351,983           -           351,983          630,478           -             630,478 
 
 Cost of sales      (161,271)       (7,957)       (169,228)        (279,719)       (43,669)        (323,388) 
 
 Gross 
  profit/(loss)      190,712        (7,957)        182,755          350,759        (43,669)         307,090 
 
 Distribution 
  costs             (175,854)       (45,303)      (221,157)        (244,124)       (22,157)        (266,281) 
 
 Administrative 
  costs              (71,025)       (13,402)      (84,427)          (88,345)       (12,562)        (100,907) 
 
 Other operating 
  income and 
  expenses            6,488          17,446        23,934             144             -               144 
 
 Operating 
  (loss)/profit      (49,679)       (49,216)      (98,895)           18,434        (78,388)        (59,954) 
 
 Share of 
  post-tax 
  (losses) from 
  joint ventures     (1,136)          (7)          (1,143)          (1,229)         (989)           (2,218) 
 
 Finance income        399            655           1,054             138             -               138 
 Finance expense     (8,745)           -           (8,745)          (12,565)       (3,026)         (15,591) 
 
 (Loss)/Profit 
  before tax         (59,161)       (48,568)      (107,729)          4,778         (82,403)        (77,625) 
 
 Taxation             19,149         2,135         21,284           (1,804)         11,243           9,439 
                   -----------  ---------------  ----------       -----------  ---------------  -------------- 
 
 (Loss)/Profit 
  after tax 
  attributable 
  to owners of 
  the company        (40,012)       (46,433)      (86,445)           2,974         (71,160)        (68,186) 
                   -----------  ---------------  ----------       -----------  ---------------  -------------- 
 
 Loss per share 
 Basic                                              (56.2p)                                               (153.0p) 
 Diluted                                            (56.2p)                                               (153.0p) 
 Dividends per 
  share 
 Interim                                                  -                                                   7.8p 
 Final                                                    -                                                      - 
 
 

(1) More details on non-underlying items and a reconciliation of Alternative Performance Measures are included in the annual report and accounts

(2) M ore details of the restatement are included in the annual report and accounts

 
 
 
   Group Statement of Comprehensive Income 
 For the 53 weeks ended 30 January 2021 
 
                                                      53 weeks              52 weeks 
                                                         ended                 ended 
                                                    30 January            25 January 
                                                          2021    2020 (Restated)(1) 
 
                                                       GBP'000               GBP'000 
 
 (Loss) after tax attributable to owners of 
  the company                                         (86,445)              (68,186) 
                                                  ------------  -------------------- 
 
 Other comprehensive (loss)/income 
 Items that may be reclassified to the Income 
  Statement 
 Net effective portion of changes in fair value 
  of cash flow hedges                                    (422)                 2,227 
 Exchange differences on translation of foreign 
  operations net of tax                                  (746)                 1,472 
                                                  ------------  -------------------- 
 Other comprehensive (loss)/income for the 
  period                                              (1 ,168)                 3,699 
 
                                                         (87,6 
 Total comprehensive (loss) for the period                 13)              (64,487) 
                                                  ============  ==================== 
 
 

(1) M ore details of the restatement are included in the annual report and accounts

Group Statement of Changes in Equity

For the 53 weeks ended 30 January 2021

 
                                                                                                          Total equity 
                                                                                                          attributable 
                                                                                                             to equity 
                                                                         Translation         Retained     shareholders 
                    Share capital    Share premium   Other reserves          reserve         earnings    of the parent 
----------------  ---------------  ---------------  ---------------  ---------------  ---------------  --------------- 
                          GBP'000          GBP'000          GBP'000          GBP'000          GBP'000          GBP'000 
 
 Balance at 25 
  January 2020 
  (restated)(1)             2,228           10,555            (743)            6,328          122,305          140,673 
----------------  ---------------  ---------------  ---------------  ---------------  ---------------  --------------- 
 Comprehensive 
 Loss for the 
 period 
 Loss for the 
  period                        -                -                -                -         (86,445)         (86,445) 
 Exchange 
  differences on 
  translation of 
  foreign 
  operations                    -                -                -          (1,333)                -          (1,333) 
 Current tax on 
  foreign 
  currency 
  translation                   -                -                -              587                -              587 
 Effective 
  portion of 
  changes in 
  fair value of 
  cash flow 
  hedges                        -                -            (428)                -                -            (428) 
 Deferred tax 
  associated 
  with movement 
  in hedging 
  reserve                       -                -                6                -                -                6 
                  ---------------  ---------------  ---------------  ---------------  ---------------  --------------- 
 Total 
  comprehensive 
  loss for the 
  period                        -                -            (422)            (746)         (86,445)         (87,613) 
                  ---------------  ---------------  ---------------  ---------------  ---------------  --------------- 
 
 Transactions 
 recognised 
 directly in 
 equity 
 Increase in 
  issued share 
  capital                   7,002           90,749                -                -                -           97,751 
 Share-based 
  payment 
  charges                       -                -                -                -            1,204            1,204 
 Movement on 
  current and 
  deferred tax 
  on share-based 
  payments                      -                -                -                -               21               21 
                  ---------------  ---------------  ---------------  ---------------  ---------------  --------------- 
 Total                      7,002           90,749                -                -            1,225           98,976 
                  ---------------  ---------------  ---------------  ---------------  ---------------  --------------- 
 
 Balance at 30 
  January 2021              9,230          101,304          (1,165)            5,582           37,085          152,036 
                  ===============  ===============  ===============  ===============  ===============  =============== 
 

(1) M ore details of the restatement are included in the annual report and accounts

Group Statement of Changes in Equity

For the 52 weeks ended 25 January 2020

 
                                  Share      Share       Other     Translation     Retained        Total equity 
                                  capital    premium    reserves     reserve      earnings(2)      attributable 
                                                                                                     to equity 
                                                                                                   shareholders 
                                                                                                 of the Company(2) 
------------------------------  ---------  ---------  ----------  ------------  -------------  ------------------- 
                                  GBP'000    GBP'000     GBP'000       GBP'000        GBP'000              GBP'000 
 Balance at 26 January 
  2019                              2,228     10,555       (183)         4,856        211,012              228,468 
 Adjustment on initial 
  application of IFRS 
  16(1)                                 -          -           -             -            894                  894 
                                ---------  ---------  ----------  ------------  -------------  ------------------- 
 Balance at 27 January 
  2019 (restated)(2)                2,228     10,555       (183)         4,856        211,906              229,362 
                                ---------  ---------  ----------  ------------  -------------  ------------------- 
 Comprehensive (loss)/income 
 for the period 
 Loss for the period(2)                 -          -           -             -       (68,186)             (68,186) 
 Exchange differences 
  on translation of 
  foreign operations                    -          -           -         1,764              -                1,764 
 Current tax on foreign 
  currency translation                  -          -           -         (173)              -                (173) 
 Foreign exchange 
  differences on disposal 
  of subsidiaries                       -          -           -         (119)              -                (119) 
 Effective portion 
  of changes in fair 
  value of cash flow 
  hedges                                -          -       2,205             -              -                2,205 
 Deferred tax associated 
  with movement in 
  hedging reserve                       -          -          22             -              -                   22 
                                                                                               ------------------- 
 Total comprehensive 
  (loss)/income for 
  the period                            -          -       2,227         1,472       (68,186)             (64,487) 
                                ---------  ---------  ----------  ------------  -------------  ------------------- 
 Transactions recognised 
  directly in equity 
 Net change in fair 
  value of cash flow 
  hedges transferred 
  to cost of inventory                  -          -     (2,787)             -              -              (2,787) 
 Share-based payment 
  charges                               -          -           -             -            225                  225 
 Movement on current 
  and deferred tax 
  on share-based payments               -          -           -             -           (25)                 (25) 
 Dividends paid                         -          -           -             -       (21,615)             (21,615) 
                                ---------  ---------  ----------  ------------  -------------  ------------------- 
 Total transactions 
  with owners                           -          -     (2,787)             -       (21,415)             (24,202) 
                                ---------  ---------  ----------  ------------  -------------  ------------------- 
 
 Balance at 25 January 
  2020 (restated)(2)                2,228     10,555       (743)         6,328        122,305              140,673 
                                =========  =========  ==========  ============  =============  =================== 
 
 
 

(1) The Group has initially applied IFRS 16 at 27 January 2019, using the simplified modified retrospective transition approach.

(2) M ore details of the restatement are shown in the annual report and accounts

Company Statement of Changes in Equity

For the 53 weeks ended 30 January 2021

 
                                       Share     Share      Other   Retained  Total equity 
                                     capital   premium   reserves   earnings 
----------------------------------  --------  --------  ---------  ---------  ------------ 
                                     GBP'000   GBP'000    GBP'000    GBP'000       GBP'000 
 Balance at 25 January 2020            2,228    10,555     22,781     17,586        53,150 
                                    --------  --------  ---------  ---------  ------------ 
 
Profit for the period                      -         -          -        157           157 
                                    --------  --------  ---------  ---------  ------------ 
 
 Transactions with owners 
  recorded directly in equity 
 Increase in issued share 
  capital                              7,002    90,749          -          -        97,751 
Share-based payments charges 
 for awards granted to subsidiary 
 employees                                 -         -      1,204                    1,204 
Dividends paid                             -         -          -          -             - 
                                    --------  --------  ---------  ---------  ------------ 
 Total transactions with 
  owners                               7,002    90,749      1,204          -        98,955 
                                    --------  --------  ---------  ---------  ------------ 
 
Balance at 30 January 2021             9,230   101,304     23,985     17,743       152,262 
                                    ========  ========  =========  =========  ============ 
 

Company Statement of Changes in Equity

For the 52 weeks ended 25 January 2020

 
                                       Share     Share      Other   Retained  Total equity 
                                     capital   premium   reserves   earnings 
----------------------------------  --------  --------  ---------  ---------  ------------ 
                                     GBP'000   GBP'000    GBP'000    GBP'000       GBP'000 
 Balance at 26 January 2019            2,228    10,555     22,556     44,791        80,130 
                                    --------  --------  ---------  ---------  ------------ 
 
(Loss) for the period                      -         -          -    (5,590)       (5,590) 
                                    --------  --------  ---------  ---------  ------------ 
 
 Transactions with owners 
  recorded directly in equity 
Share-based payments charges 
 for awards granted to subsidiary 
 employees                                 -         -        225          -           225 
Dividends paid                             -         -          -   (21,615)      (21,615) 
                                    --------  --------  ---------  ---------  ------------ 
 Total transactions with 
  owners                                   -         -        225   (21,615)      (21,390) 
                                    --------  --------  ---------  ---------  ------------ 
 
 Balance at 25 January 2020            2,228    10,555     22,781     17,586        53,150 
                                    ========  ========  =========  =========  ============ 
 

Group and Company Balance Sheet

At 30 January 2021

 
                                            Group           Group      Company      Company 
                                       30 January      25 January   30 January   25 January 
                                             2021            2020         2021         2020 
                                                    (Restated)(1) 
                                          GBP'000         GBP'000      GBP'000      GBP'000 
 Intangible assets                         34,758          46,964            -            - 
 Property, plant and equipment             39,401         122,730            -            - 
 Right-of-use assets                       81,759         137,987            -            - 
 Investment in equity accounted 
  investee                                  3,691           5,088            -            - 
 Investment in subsidiary 
  companies                                     -               -       26,407       25,203 
 Amounts owed by Group undertakings             -               -      119,672            - 
 Deferred tax assets                       27,635          17,638        1,100          943 
 Prepayments                                  541             634            -            - 
                                      -----------  --------------  -----------  ----------- 
 Non-current assets                       187,785         331,041      147,179       26,146 
                                      -----------  --------------  -----------  ----------- 
 Inventories                               87,848         131,663            -            - 
 Trade and other receivables               44,666          67,271            -            - 
 Amount due from equity accounted 
  investee                                  4,305           4,462            -            - 
 Amounts owed by Group undertakings             -               -            -       27,096 
 Derivative financial assets                    -             203            -            - 
 Income tax receivable                      7,983           2,343            -            - 
 Cash and cash equivalents                 66,671          52,912        5,195           21 
                                      -----------  --------------  -----------  ----------- 
 Current assets                           211,473         258,854        5,195       27,117 
                                      -----------  --------------  -----------  ----------- 
 Total assets                             399,258         589,895      152,374       53,263 
                                      -----------  --------------  -----------  ----------- 
 Trade and other payables                (98,138)        (96,202)        (112)        (113) 
 Bank overdraft                                 -       (180,000)            -            - 
 Income tax payable                       (2,607)               -            -            - 
 Lease liabilities                       (33,754)        (36,381)            -            - 
 Provisions                               (1,973)               -            -            - 
 Derivative financial liabilities         (1,191)         (1,095)            -            - 
                                      -----------  --------------  -----------  ----------- 
 Current liabilities                    (137,663)       (313,678)        (112)        (113) 
                                      -----------  --------------  -----------  ----------- 
 
 Deferred tax liability                         -         (3,588)            -            - 
 Provisions                               (2,942)               -            -            - 
 Lease liabilities                      (106,617)       (131,956)            -            - 
                                      -----------  --------------  -----------  ----------- 
 Non-current liabilities                (109,559)       (135,544)            -            - 
                                      -----------  --------------  -----------  ----------- 
 Total liabilities                      (247,222)       (449,222)        (112)        (113) 
                                      -----------  --------------  -----------  ----------- 
 Net assets                               152,036         140,673      152,262       53,150 
                                      -----------  --------------  -----------  ----------- 
 
 
 Group and Company Balance Sheet 
  At 30 January 2021 
                                      ===========  ==============  ===========  =========== 
                                            Group           Group      Company      Company 
                                       30 January      25 January   30 January   25 January 
                                             2021            2020         2021         2020 
                                                    (Restated)(1) 
                                          GBP'000         GBP'000      GBP'000      GBP'000 
 Share capital                              9,230           2,228        9,230        2,228 
 Share premium                            101,304          10,555      101,304       10,555 
 Other reserves                           (1,165)           (743)       23,985       22,781 
 Translation reserve                        5,582           6,328            -            - 
 Retained earnings                         37,085         122,305       17,743       17,586 
                                                                   ----------- 
 Total equity attributable to 
  equity shareholders of the parent 
  company                                 152,036         140,673      152,262       53,150 
                                      -----------  --------------  -----------  ----------- 
 Total equity                             152,036         140,673      152,262       53,150 
                                      ===========  ==============  ===========  =========== 
 

(1) M ore details of the prior period errors or misstatements are shown in the annual report and accounts

Group and Company Cash Flow Statement

For the 53 weeks ended 30 January 2021

 
                                                  Group             Group       Company       Company 
                                               53 weeks    52 weeks ended      53 weeks      53 weeks 
                                                  ended        25 January         ended         ended 
                                             30 January              2020    25 January    25 January 
                                                   2021     (Restated)(2)          2021          2020 
                                                GBP'000           GBP'000       GBP'000       GBP'000 
 Cash generated from operations 
 (Loss)/Profit for the period                  (86,445)          (68,186)           157       (5,590) 
 Adjusted for: 
 Income tax credit                             (21,284)           (9,439)         (157)         (943) 
 Depreciation and amortisation                   53,109            65,058             -             - 
 Amortisation of reacquired right                 1,746             1,890             -             - 
 Impairment                                      45,303            13,969             -             - 
 (Profit)/Loss on disposal of business         (17,446)             7,585             -             - 
 Loss on disposal of property, plant 
  and equipment                                     933               447             -             - 
 Write off property, plant and equipment            325                 -             -             - 
 Share-based payments charge                      1,204               225             -             - 
 Net finance expense                              7,691            15,453             -             - 
 Change in accounting estimates for 
  inventory                                           -            45,890             -             - 
 IFRS16 practical expediency                      (361)                 -             -             - 
 Net change in derivative financial 
  assets and liabilities carried at 
  fair value through profit or loss                   -              (44)             -             - 
 Share of loss in joint venture                   1,143             2,218             -             - 
 Increase in provisions                           4,915                 -             -             - 
 Decrease in non-current prepayments                126               127             -             - 
 Decrease in inventory                           43,821            21,715             -             - 
 Decrease in trade and other receivables         21,966            10,700             -        28,728 
 Increase/(decrease) in trade and 
  other payables                                  3,174           (2,202)             -         (658) 
 Income taxes received/(paid)                     4,021           (6,953)                           - 
 Net cash generated from operating 
  activities                                     63,941            98,453      (92,557)        21,537 
                                           ------------  ----------------  ------------  ------------ 
 
   Cash flow from investing activities 
 Purchases of property, plant and 
  equipment and intangibles                     (6,981)          (25,823)             -             - 
 Proceeds from sale of property, 
  plant and equipment                            77,782               227             -             - 
 Investment in equity accounted investee              -           (5,710)             -             - 
 Disposal of cash on disposal of 
  Asian business                                      -             (865)             -             - 
 Increase in loans to group companies                 -                 -      (92,557) 
 Interest received                                   94                 -             -             - 
 Dividends received from joint venture              254               278             -             - 
 Payments from joint venture                        157               138             -             - 
                                           ------------  ----------------  ------------  ------------ 
 Net cash from investing activities              71,306          (31,755)      (92,557)             - 
                                           ------------  ----------------  ------------  ------------ 
 
   Cash flow financing activities 
 Repayment of term loan/ overdraft            (180,000)          (47,000)             -             - 
 Drawdown of overdraft                                -            88,504             -             - 
 Repayment of capital element of 
  leases                                       (29,045)          (34,089)             -             - 
 Repayment of interest element of 
  leases                                        (6,781)           (7,248)             -             - 
 Interest paid                                  (1,974)           (4,256)             -             - 
 Dividends paid                                       -          (21,615)             -      (21,615) 
 Proceeds from issue of shares                  105,003                 -       105,003             - 
 Cost of issue of shares                        (7,252)                 -       (7,252)             - 
                                           ------------  ----------------  ------------  ------------ 
 Net cash from financing activities           (120,049)          (25,704)        97,751      (21,615) 
                                           ------------  ----------------  ------------  ------------ 
 
 Net increase/(decrease) in cash 
  and cash equivalents                           15,198            40,994         5,174          (78) 
 Net cash and cash equivalents at 
  the beginning of the period                    52,912            14,654            21            99 
 Exchange rate movement                         (1,439)           (2,736)             -             - 
                                           ------------  ----------------  ------------  ------------ 
 Net cash and cash equivalents at 
  the end of the period(1)                       66,671            52,912         5,195            21 
                                           ------------  ----------------  ------------  ------------ 
 

(1) The Group cashflow for the 52 weeks ended 25 January 2020 has been represented to exclude overdrafts from cash and cash equivalents

(2) M ore details of the restatement are shown in the annual report and accounts

Notes to the Financial Statements

Summary of Significant Accounting Policies

The principal accounting policies applied in the preparation of these consolidated and Company financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

Basis of Preparation

The financial information set out in this preliminary announcement does not constitute Ted Baker plc's statutory accounts for the 53 weeks ended 30 January 2021 or the 52 weeks ended 25 January 2020. Statutory accounts for the 53 weeks ended 30 January 2021 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The auditor has issued a report on those accounts which was qualified solely in respect of comparative figures. The basis for the qualified opinion is set out below. The auditor's report did not contain a statement under Section 498 (2) of the Companies Act 2006 but contained a statement under Section 498(3) that, solely in respect of the matter below, they had not obtained all the information and explanations that they considered necessary for the purpose of their audit.

Basis for qualified opinion which is qualified solely in respect of the comparative figures

The Group recorded, in its financial statements for the 52 weeks ended 25 January 2020, a number of adjustments to inventory values, including amendments to inventory which had been overstated at the previous year end. It has not been possible for the auditors to determine what the impact of these adjustments would have been on inventory values at 26 January 2019 and consequently on retained profit at that date and on the income and expenditure and calculated cash flows for the 52 week period ended 25 January 2020. Accordingly, the auditors have been unable to determine whether the comparative figures shown in the financial statements relating to that period have been prepared on a fully comparable basis.

Statutory accounts for the 52 weeks ended 25 January 2020 have been delivered to the Registrar of Companies. The Auditor has reported on those accounts; their report was unqualified, did draw attention by way of emphasis to going concern, and did not contain a statement under Section 498 (2) or (3) of the Companies Act 2006. The financial information contained in this results announcement has been prepared on the basis of the accounting policies set out in the statutory financial statements for the 52 weeks ended 25 January 2020.

Whilst the financial information included in this announcement has been computed in accordance with the recognition and measurement requirements of IFRS in accordance with international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union, this announcement does not itself contain sufficient disclosures to comply with IFRS.

Adoption of new accounting standards, interpretations and amendments

The group has applied the following standards and amendments for the first time in these financial statements:

-- Definition of Material - Amendments to IAS 1 and IAS 8

-- Definition of a Business - Amendments to IFRS 3

-- Covid-19 - Related Rent Concessions - Amendment to IFRS16

The application of these new standards and amendments did not have a material impact on the Financial Statements.

Certain new accounting standards and interpretations have been published that are not yet effective and have not been early adopted by the group. These standards are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

Going concern

The consolidated financial statements have been prepared on a going concern basis. The Directors have prepared a going concern assessment covering the 12 month period from the date of signing these financial statements, which demonstrates that the Group is capable of continuing to operate within its existing facilities and can meet its financial covenant tests during the period. The Directors assessment considers the principal risks facing the business, and a series of financial forecasts, which include a review of current performance and forecasts of revenue across all sales channels combined with ongoing expenditure including capital expenditure and borrowing facilities. The forecasts have been prepared whilst considering various levels of disruption from the Covid-19 pandemic. The Directors have concluded that it is appropriate to adopt the going concern basis of accounting in preparing these financial statements for the reasons set out below.

The Group acted quickly to mitigate the impact of Covid-19 by taking steps to strengthen the balance sheet through the restructuring of debt, the sale and leaseback of the Group's Head Office and the equity raise completed in June 2020. At 30 January 2021, the Group held GBP66.7 million of cash balances.

At 30 January 2021, the Group's financing arrangements comprised of two facilities, a GBP107.8 million Revolving Credit Facility maturing in September 2022, and a GBP25 million restricted Revolving Credit Facility maturing in January 2022. At year end, neither facility had been drawn down. On 24 May 2021, the Group successfully refinanced existing debt facilities, reducing the size of the facility to reflect future forecasts for the business. The existing facilities totalling GBP132.8 million have been replaced with a GBP90 million Revolving Credit Facility, reducing to GBP80 million in January 2022, before maturing in November 2023. Financial covenants within the facility have been set at levels that reflect past store closures and future levels of disruption modelled within the Severe but Plausible scenario. The Directors have concluded that this facility provides adequate liquidity and financial covenant headroom under all downside scenarios described below.

In making the going concern assessment, the Group has modelled a number of scenarios for the period to June 2022. The Base Case scenario is consistent with the Board approved FY22 Budget. This scenario assumes there are no further lockdowns with a slow return to global economic recovery. This includes growth assumptions that factor a continued challenge to physical retail, wholesale and licence channels. The Group has forecast strong growth in the online retail channel driven by a continued customer shift towards online spend compared to pre-Covid preferences, supported by continued investment in our online platforms and related marketing spend. Total forecast Group sales remain below pre-Covid levels for the 12 month going concern period with margins returning to pre-Covid levels.

In light of the considerable uncertainty surrounding the ongoing impact of Covid-19, a Severe but Plausible downside scenario has also been modelled, applying severe but plausible assumptions to the Base Case. This scenario assumes all sales channels, including own stores, online, wholesale and licence income, are further disrupted throughout the 12 month going concern period. Further, this scenario assumes a two-month lockdown in December 2021 and January 2022, with a gradual recovery in the months that follow. The Severe but Plausible scenario does not assume any deterioration in margins and only assumes that directly attributable variable costs are reduced, with all remaining costs in line with the Base Case. Within the 12 month going concern period, this translates to total turnover that is +23% and -32% against the same period in 2021 and 2020. Under the Severe but Plausible scenario, the Group has adequate liquidity and covenant headroom throughout the going concern period.

In addition, the Directors have performed a Reverse Stress Test, applying further downside trade reductions to the Severe but Plausible scenario to demonstrate the value of lost sales until financial covenants within the facility signed 24 May 2021 are breached. Liquidity under the facility is adequate, even under the Reverse Stress Test. In addition to the trade reductions described below, this scenario considers the year-to-date performance as at the date of the assessment and a reduction to directly attributable variable costs associated with a reduction in turnover. If such a downside scenario were to materialise, the Directors would consider significant cost savings initiatives around areas such as central and head office payroll, overhead expenditure, marketing costs, rents, warehousing costs and professional fees, however for the purpose of this analysis, none of these cost saving efforts are included within the modelling. In the Reverse Stress Test, trade reductions have been gradually applied to all sales channels during the 12 month going concern period. Store, wholesale and licence income reductions of up to 20% and online reductions of up to 10% have been applied against the Severe but Plausible scenario. Within the 12 month going concern period, this translates to total turnover that is +11% and -39% against the same period in 2021 and 2020. In the Reverse Stress Test, the quarterly financial covenant reported in April 2022 would be the only one impacted during the going concern assessment period, allowing the Directors time to take appropriate actions if there are early signs of a prolonged reduction in trade.

As a result of the above analysis, the Directors have concluded that the Group has sufficient financial resources to continue in operation and meet its obligations as they fall due for the 12 months from the date of approval of these financial statements.

Changes in accounting estimates

In the prior accounting period, our inventory accounting basis of estimating inventory cost included certain logistics and freight costs in getting stock from the distribution centre to its final location. The Directors now believe that this basis of estimating is not suitable due to an increasingly multi-channel business in which purchases may reach the consumer through a variety of different routes. As a result of these changes, the estimation of costs relating to this has become less reliable. The amount capitalised in respect of these costs at 26 January 2020 was GBP6.1m which has been expensed in the current period with no similar amounts capitalised in the 53 weeks ended 30 January 2021.

Flagship stores

In previous accounting periods flagship stores were considered corporate assets and were considered to support the wider business in the geographic territory in which that store was located. The Directors now believe that this treatment is not suitable due to an increasingly multi-channel business which has reduced the significance of flagship stores. Therefore, the impairment estimation basis has been revised in the current period to align it with the remainder of the store portfolio. This has resulted in an impairment in the period of GBP1.9m.

IFRS16 - rent concessions

The Group has applied the practical expedient for the application of rent concessions provided as a response to the Covid-19 pandemic, as allowed by the amendment to IFRS16. The Group has applied the practical expedient to all its leases within Europe that meet the criteria set out in the amendment. The Group has not applied the practical expedient to concessions in the rest of world. GBP0.4m has been recognised in the Income Statement in the period to reflect these lease concessions to which the practical expedient has been applied.

Errors or misstatements

IFRS16 prior year adjustments identified in the current year

   i)    Incorrect classification of lease incentives - GBP13.3m 

During the prior period GBP10.2m of creditor balances relating to lease incentives were taken to reserves as an IFRS16 adjustment, when they should have been offset against the right of use asset for the lease they relate to. In addition, GBP3.1m of lease incentives were held in other creditors at transition, when they should have been offset against the right of use asset for the lease they relate to.

Accordingly, GBP13.3m has been corrected retrospectively by restating the right of use asset, other creditors has been restated by GBP3.1m and retained earnings by GBP10.2m on the balance sheet as at 25 January 2020. There was no impact on earnings for the period or EPS.

   ii)   Incorrect impairment of assets - GBP2.2m 

At 25 January 2019 the impairment of right of use assets was overstated as a result of the above incorrect classification.

Accordingly, the GBP2.2m impact has been corrected retrospectively by restating the income statement for the period to 25 January 2020 and the corresponding increase to right of use assets and retained earnings.

Tangible and intangible fixed assets prior year adjustment identified in the current year

iii) In prior years, computer software with a cost of GBP8.4m and related accumulated depreciation of GBP3.7m was incorrectly shown as part of tangible fixed assets. Subsequent depreciation charges in respect of this computer software were expensed against intangible fixed assets. At 26 January 2019 and 25 January 2020, these assets were fully depreciated and no longer in use. To correct this error, tangible fixed assets have been restated by cost of GBP8.3m and depreciation of GBP3.7m in note 12 and by restatement of depreciation of GBP4.7m in intangible fixed assets in note 11 to correct this mis-classification at 26 January 2019 and 25 January 2020.

Inventory adjustments identified in the prior year

iv) Adjustments to the carrying amount of inventory at 26 January 2019 - GBP20.2m

As previously described in the Annual Report 2020, in December 2019 the Group identified that the value of inventory held on its balance sheet at that time had been overstated following an internal review. As a result of these findings, the Group engaged Deloitte LLP to undertake an independent review of this issue.

Following the conclusion of Deloitte's review and the completion of the year-end process and audit, the Group restated the balance of inventory at 26 January 2019 from GBP225.8m to GBP205.6m, a GBP20.2m restatement. The restatement was due to inappropriate cost values being attributed to inventory, inventory reflected on the balance sheet which did not physically exist and intercompany profit in stock that was not adjusted for in previous calculations.

The treatment for the items identified from the inventory review were classified as changes in accounting estimates or errors or misstatements, and is governed by IAS 8 'Accounting policies, changes in accounting estimates and errors.'

   v)      Stock that did not physically exist - GBP6.5m 

The adjustments primarily related to inventory held in system locations that were not subject to inventory counts and were not written off despite not physically existing. These balances primarily arose as stock were moved between warehouses, between retail and outlet stores and warehouses over seasons, and due to weaknesses in the control environment over those moves and stock locations.

   vi)     Adjustments to correct calculations - GBP13.7m 

Adjustments were identified to correct calculations, including to correct for the capitalisation of duties that should not have been capitalised to inventory, and to eliminate parts of intercompany profit in stock that was not adjusted for in previous calculations.

In addition, the Group reviewed its approach to estimating the carrying value of stock and adopted a more prudent methodology which resulted in a GBP32.4m reduction in stock value, being accounted for as a change in estimate booked as a non-underlying expense in the income statement for the 52 weeks ended 30 January 2020 The Group also changed its stock provisioning policy from one based on provisioning against seasons to one based on forward forecasting the expected terminal stock value at the point at which the stock has traded through its expected lifecycle of two years. The impact of the increase in the obsolescence provision of GBP13.5m was included within non underlying costs.

Alternative performance measures

In the reporting of financial information, the Group uses certain measures that are not separately disclosable under IFRS or the Companies Act. The Directors believe that these additional measures, which are used internally, are useful to the users of the financial statements in helping them understand the underlying business performance. Non-underlying items are those items which, in the opinion of the Directors, should be excluded in order to provide a consistent and comparable view of the underlying performance of the Group's ongoing business and are considered by the Directors to be significant. The Directors also exclude foreign exchange gains and losses on the translation of intercompany monetary assets and liabilities denominated in foreign currencies.

Non-underlying items are added back/deducted to derive certain alternative performance measures as follows:

-- profit attributable to the owners of the Company, to arrive at underlying earnings per share (after the tax effect of non-underlying items); and

   --      profit before tax, to arrive at profit before tax and non-underlying items. 

The Directors believe the alternative performance measures presented along with comparable GAAP measurements is useful to provide information with which to measure our performance, and our ability to invest in new opportunities. Management uses these measures with the most directly comparable GAAP financial measures in evaluating our operating performance and value creation. Alternative financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP. The requirements for identifying non-underlying items are on a consistent basis each period and presented consistently, and a reconciliation of profit before tax and non-underlying items to profit before tax is included in Note 3 below.

The profit before tax and non-underlying items and underlying earnings per share are not recognised measures under IFRS and may not be directly comparable with adjusted profit and earnings per share measures used by other companies.

Constant currency comparatives are obtained by applying the exchange rates that were applicable for the period ended 25 January 2020 to the financial results in overseas subsidiaries for the 53 weeks ended 30 January 2021 to remove the impact of exchange rate fluctuations.

2. Segment Information

The Group has three reportable segments: retail, wholesale and licensing. For each of the three segments, the Executive Committee (considered to be the Chief Operating Decision Maker) reviews internal management reports on a four-weekly basis.

   a)    Segment revenue and segment result 
 
 53 weeks ended 30 January 2021                                       Retail   Wholesale   Licensing        Total 
----------------------------------------------------------------  ----------  ----------  ----------  ----------- 
                                                                     GBP'000     GBP'000     GBP'000      GBP'000 
 
 Revenue                                                             254,256      85,278      12,449      351,983 
 Cost of sales                                                     (108,102)    (53,169)           -    (161,271) 
                                                                  ----------  ----------  ----------  ----------- 
 Gross profit before non-underlying items                            146,154      32,109      12,449      190,712 
 Operating costs                                                   (165,458)           -           -    (165,458) 
                                                                  ----------  ----------  ----------  ----------- 
 Operating (loss)/contribution before non-underlying items          (19,304)      32,109      12,449       25,254 
 
   Reconciliation of segment 
   result to loss before tax 
 Segment result before non-underlying items                         (19,304)      32,109      12,590       25,254 
 Other operating costs                                                     -           -           -     (81,421) 
 Other operating income                                                    -           -           -        6,488 
                                                                                                      ----------- 
 Operating loss before non-underlying items                                                              (49,679) 
 Finance income                                                            -           -           -          399 
 Finance expense                                                           -           -           -      (8,745) 
 Share of losses from joint ventures                                       -           -           -      (1,136) 
                                                                                                      ----------- 
 Loss before tax and non-underlying items                                                                (59,161) 
                                                                                                      =========== 
 Non-underlying items before tax                                           -           -           -     (48,568) 
                                                                                                      =========== 
 Loss before tax                                                                                        (107,729) 
                                                                                                      =========== 
 
 Capital expenditure                                                   3,432           -           -        3,432 
 Unallocated capital expenditure                                           -           -           -        3,549 
                                                                                                      ----------- 
 Total capital expenditure                                                                                  6,981 
 Additions to right of use assets                                          -           -           -        9,229 
 Total capital expenditure and additions to right of use assets                                            16,210 
                                                                                                      =========== 
 
 Depreciation and amortisation                                       (7,493)       (206)           -      (7,699) 
 Unallocated depreciation and amortisation                                 -           -           -     (26,763) 
 Depreciation of right of use assets                                       -           -           -   ( 20,393 ) 
                                                                                                      ----------- 
 Total depreciation and amortisation                                                                     (54,855) 
                                                                                                      =========== 
 
 Segment assets                                                      239,491      75,630           -      315,121 
 Property, plant and equipment - central                                   -           -           -        2,279 
 Intangible assets - central                                               -           -           -       34,491 
 Deferred tax assets                                                       -           -           -       27,635 
 Income tax receivable                                                     -           -           -        7,983 
 Inventories - central                                                                                      3,107 
 Cash - central                                                                                             2,344 
 Other receivables central                                                                                    609 
 Unallocated assets(1)                                                     -           -           -        5,689 
 Total assets                                                                                             399,258 
                                                                                                      =========== 
 
 Segment liabilities                                               (214,035)    (28,341)           -    (242,376) 
 Central liabilities                                                       -           -           -      (1,045) 
 Current tax payable                                                       -           -           -      (2,607) 
 Unallocated liabilities(2)                                                -           -           -      (1,194) 
                                                                                                      ----------- 
 Total liabilities                                                                                      (247,222) 
                                                                                                      =========== 
 
 Net assets                                                                                               152,036 
                                                                                                      ----------- 
 

(1) Other assets include prepayments, derivatives and central allocations of inventory, cash and cash equivalents and other receivables

.(2) Other liabilities include derivatives and central allocations of trade and other payables and borrowings.

 
 52 weeks ended 25 January 2020 (Restated)(3)                         Retail   Wholesale   Licensing       Total 
----------------------------------------------------------------  ----------  ----------  ----------  ---------- 
                                                                     GBP'000     GBP'000     GBP'000     GBP'000 
 
 Revenue                                                             439,941     171,536      19,001     630,478 
 Cost of sales                                                     (176,520)   (103,199)           -   (279,719) 
                                                                  ----------  ----------  ----------  ---------- 
 Gross profit before non-underlying items                            263,421      68,337      19,001     350,759 
 Operating costs                                                   (232,175)           -           -   (232,175) 
                                                                  ----------  ----------  ----------  ---------- 
 Operating contribution before non-underlying items                   31,246      68,337      19,001     118,584 
 
 Reconciliation of segment 
  result to profit before tax 
 Segment result before non-underlying items                           31,246      68,337      19,001     118,584 
 Other operating costs                                                     -           -           -   (100,294) 
 Other operating income                                                    -           -           -         144 
                                                                                                      ---------- 
 Operating profit before non-underlying items                              -           -           -      18,434 
 Finance income                                                            -           -           -         138 
 Finance expense                                                           -           -           -    (12,565) 
 Share of losses from joint ventures                                       -           -           -     (1,229) 
                                                                                                      ---------- 
 Profit before tax and non-underlying items                                -           -           -       4,778 
                                                                                                      ========== 
 Non-underlying items before tax                                           -           -           -    (82,403) 
                                                                                                      ========== 
 Loss before tax                                                                                        (77,625) 
                                                                                                      ========== 
 
 Capital expenditure                                                  13,610         515           -      14,125 
 Unallocated capital expenditure                                           -           -           -      11,698 
 Total capital expenditure                                                                         -      25,823 
 Additions to right of use assets                                          -           -                  12,473 
                                                                                                      ---------- 
 Total capital expenditure and additions to right of use assets                                           38,296 
                                                                                                      ========== 
 
 Depreciation and amortisation                                      (14,394)       (595)           -    (14,989) 
 Unallocated depreciation and amortisation                                 -           -           -    (13,911) 
 IFRS 16 Depreciation                                                      -           -           -    (38,048) 
                                                                                                      ---------- 
 Total depreciation and amortisation                                                               -    (66,948) 
                                                                                                      ========== 
 
 Segment assets                                                      326,703      94,513           -     421,216 
 Property, plant and equipment - central                                   -           -           -      67,996 
 Intangible assets - central                                               -           -           -      42,603 
 Right-of-use assets - central                                             -           -           -      21,347 
 Deferred tax assets                                                       -           -           -      17,638 
 Income tax receivable                                                     -           -           -       2,343 
 Investment in equity accounted investee                                   -           -           -       5,088 
 Amounts due from equity accounted investee                                -           -           -       4,462 
 Other assets(1)                                                           -           -           -       7,202 
 Total assets                                                                                            589,895 
                                                                                                      ========== 
 
 Segment liabilities                                               (333,557)    (75,989)           -   (409,546) 
 Lease liability - central                                                 -           -           -    (29,665) 
 Deferred tax liability                                                    -           -           -     (3,588) 
 Other liabilities(2)                                                      -           -           -     (6,423) 
                                                                                                      ---------- 
 Total liabilities                                                                                     (449,222) 
                                                                                                      ========== 
 
 Net assets                                                                                              140,673 
                                                                                                      ========== 
 

(1) Other assets include prepayments, derivatives and central allocations of inventory, cash and cash equivalents and other receivables.

(2) Other liabilities include derivatives and trade and other payables and borrowings.

(3) Details of the restatement can be found in the annual report and accounts.

b) Geographical information

 
                                                       UK        US   Rest of the World(2)     Total 
-----------------------------------------------  --------  --------  ---------------------  -------- 
                                                  GBP'000   GBP'000                GBP'000   GBP'000 
 53 weeks ended 30 January 2021 
 Revenue                                          215,756   102,787                 33,440   351,983 
 Non-current assets(1)                            136,641    16,214                  3,604   156,459 
 
 52 weeks ended 25 January 2020 (restated)(3) 
 Revenue                                          360,281   194,599                 75,598   630,478 
 Non-current assets(1)                            194,550    65.057                 48,708   308,315 
----------------------------------------------- 
 
 
 

(1) Non-current assets exclude deferred tax assets and investment in associates.

(2) Rest of the World includes Europe, Canada, Asia (up to disposal) and South Africa.

(3) More details of the restatement are shown in the annual report and accounts.

c) Revenue by collection(1)

 
                  53 weeks ended   52 weeks ended 
                      30 January       25 January 
                            2021             2020 
---------------  ---------------  --------------- 
                         GBP'000          GBP'000 
 
 Menswear(1)             119,790          241,098 
 Womenswear(1)           219,744          370,379 
                         339,534          611,477 
                 ===============  =============== 
 

(1) Revenue by collection includes retail and wholesale revenue and excludes licence income.

d) Retail revenue

 
                53 weeks ended   52 weeks ended 
                    30 January       25 January 
                          2021             2020 
-------------  ---------------  --------------- 
                       GBP'000          GBP'000 
 Stores                109,402          321,214 
  E-commerce           144,854          118,727 
                       254,256          439,941 
               ===============  =============== 
 

3. Loss Before Tax

 
 Loss before tax is stated after charging/(crediting):       53 weeks        52 weeks ended 
                                                                ended            25 January 
                                                           30 January    2020 (Restated)(1) 
                                                                 2021 
                                                         ------------  -------------------- 
                                                              GBP'000               GBP'000 
Depreciation and amortisation(2)                               53,109                64,527 
Non-underlying items (further detail 
 below)                                                        48,568                82,403 
Leasehold properties: 
 Variable rental payments(3)                                    1,728                 5,429 
Concessions: 
 Minimum contract payments(3)                                   3,621                 9,235 
 Variable rental and commission payments(3)                    39,325                36,222 
Loss on sale of property, plant and 
 equipment and intangibles                                        933                   447 
Practical expedient on IFRS 16 application                      (361)                     - 
Government schemes (4)                                       (10,545)                     - 
Close out of foreign exchange hedge 
 contracts                                                    (6,916)                     - 
Gain on lease modifications                                   (2,992)                     - 
 
  Auditors' remuneration: 
 Audit of these financial statements                              150                    20 
 
  Amounts receivable by the Company's 
  auditors and their associates in respect 
  of: 
 Audit of financial statements of subsidiaries 
  of the Company                                                  754                 1,600 
 Interim financial statements review                              130                    20 
Other statutory auditors                                           73                    37 
Other assurance services                                            -                    17 
 
 
 

(1) The restatement relates to the prior year stock misstatement

(2) The Group has applied IFRS 16. Depreciation of right-of-use asset of GBP26,763,000 (2020: GBP34,048,000) has been included within GBP53,129,000 above (2020: GBP64,527,000). The depreciation charge above excludes the amortisation of the reacquired right of GBP1.7m (2020: GBP1.9m). 2020 also excludes GBP0.5m depreciation charge for the closure of the outlet store in Italy. These charges are included within non-underlying costs below.

(3) Disclosed above are the variable rentals charged relating to leasehold properties and fixed and variable rentals charged in relation to concession arrangements. These are either fixed in nature or variable based on revenue levels for a particular store or concession, where relevant, including e-commerce sales with concession partners not meeting the definition of a lease under IFRS 16.

(4) Support received from governments around the world to support businesses throughout the Covid-19 epidemic. Payments from the UK government for furloughed employees amounted to GBP8,460,000.

Reconciliation of profit before tax to profit before tax and non-underlying items:

 
                                                            53 weeks ended        52 weeks ended 
                                                                30 January            25 January 
                                                                      2021    2020 (Restated)(1) 
--------------------------------------------  -----------  ---------------  -------------------- 
                                                                   GBP'000               GBP'000 
Loss before tax                                                  (107,729)              (77,625) 
                                                           ---------------  -------------------- 
Non-underlying items 
 Included in cost of sales: 
Inventory changes in estimates                          1          (6,065)              (32,351) 
Change to inventory obsolescence provision              2                -              (13,539) 
Onerous contract provision                              3          (1,973)                     - 
Other                                                                   81                 2,221 
                                                           ---------------  -------------------- 
Included in gross profit                                           (7,957)              (43,669) 
Included in distribution costs : 
 (Loss) on disposal of business                         4                -               (7,585) 
Impairment of intangibles, property, 
 plant and equipment and right-of-use 
 assets                                                 5         (45,303)              (13,969) 
Other closure costs                                                      -                 (603) 
Included in administrative costs: 
Acquisition costs and unwind of fair 
 value accounting adjustments                           6          (1,987)               (4,710) 
Reorganisation, restructuring costs 
 and other legal and professional costs                 7         (11,415)               (7,852) 
Included in other operating loss: 
Gain on sale and leaseback of Head 
 Office                                                 8           17,446                     - 
Included in operating loss                                        (49,216)              (78,388) 
Included in share of post-tax profits 
 from joint venture: 
Unwind of fair value adjustments                                       (7)                 (989) 
Included in finance income/(expense): 
 Foreign exchange on the translation 
 of monetary assets and liabilities 
 denominated in foreign currencies                      9              655               (3,026) 
                                                           ---------------  -------------------- 
Non-underlying items                                              (48,568)              (82,403) 
                                                           ---------------  -------------------- 
(Loss)/Profit before tax and non-underlying 
 items                                                            (59,161)                 4,778 
                                                           ---------------  -------------------- 
 

Notes

1. Further details surrounding the changes in accounting estimates for inventory can be found in the full financial statements

   2.     Changes to inventory obsolescence provision are detailed in the full financial statements 
   3.     Details of the onerous contract provision can be found in the full financial statements 

4. In the prior period the Group reorganised operations in Asia (Hong Kong, China and Japan), which resulted in a loss on disposal.

5. The Group impaired a number of assets resulting in a charge of GBP44.6m (2020: GBP14.0m), including key money, leasehold improvements and right-of-use assets.

6. Charges in the current and prior period relate to amortisation of reacquired rights, fair value and accounting adjustments in relation to the acquisition of the footwear business in financial year 2019.

7. A number of costs were incurred during the year, relating to the restructuring and reorganisation of the business. These include:

   a.     GBP3.7m (2020: GBPnil) for redundancy costs. 
   b.     GBP5.3 (2020: GBP2.2m) for restructuring costs 
   c.     GBPNil ((2020: GBP2.7m) for stock investigation 

d. GBPNil (2020: GBP1.4m) for investigations into the allegations of misconduct of the former CEO

   e.     GBP2.5m (2020: GBP1.6m) for other legal and professional fees 

8. Relates to the sale of the corporate head office building

9. Foreign exchange loss on re-translation of intercompany balances denominated in foreign currencies.

(1) M ore details of the restatement are shown in the annual report and accounts.

4. Finance Income and Expenses

 
                                    53 weeks ended   52 weeks ended 
                                        30 January       25 January 
                                              2021             2020 
                                   ---------------  --------------- 
                                           GBP'000          GBP'000 
 Finance income 
 - Interest receivable                          94              138 
 - Foreign exchange gains                      960                - 
                                             1,054              138 
                                   ===============  =============== 
 Finance expenses 
 - Interest payable                        (1,964)          (4,256) 
 - Interest on lease liabilities           (6,781)          (8,309) 
 - Foreign exchange losses                       -          (3,026) 
                                   ---------------  --------------- 
                                           (8,745)         (15,591) 
                                   ===============  =============== 
 

5. Income Tax Expense

a) The tax charge comprises:

 
                                                  53 weeks ended 
                                                      30 January       52 weeks ended 
                                                            2021           25 January 
                                                                                 2020 
                                                         GBP'000              GBP'000 
  Current tax 
               United Kingdom corporation tax              (180)                  - 
               Overseas Tax                              (1,275)              1,804 
  Deferred tax 
               United Kingdom corporation tax            (7,129)            (4,152) 
               Overseas Tax                             (10,737)            (5,430) 
  Prior period under/(over) provision 
             Current tax                                 (6,113)              (414) 
             Deferred tax                                  4,150            (1,247) 
                                                 ---------------  ----------------- 
                                                        (21,284)              (9,439) 
                                                 ===============  =================== 
 
 

b) Current year deferred tax movement by type

 
                                53 weeks ended   52 weeks ended 
                                    30 January       25 January 
                                          2021             2020 
-----------------------------  ---------------  --------------- 
                                       GBP'000          GBP'000 
 Property, plant & equipment             5,306            1,024 
 Share-based payments                      (3)             (25) 
 Losses                                  7,929            4,906 
 Inventory                                 147              329 
 Other                                   4,487            4,593 
                               ---------------  --------------- 
                                        17,866           10,827 
                               ===============  =============== 
 

c) Factors affecting the tax charge for the period

The tax assessed for the period is higher than the tax calculated at the UK prevailing corporation tax rate of 19%. The differences are explained below.

 
                                                       53 weeks ended   52 weeks ended 
                                                           30 January       25 January 
                                                                 2021             2020 
-------------------------------------------  ------------------------  --------------- 
                                                              GBP'000          GBP'000 
Loss before tax                                             (107,729)         (79,856) 
Loss multiplied by the standard rate 
 in the UK - 19%, (2020: standard rate 
 in the UK of 19%)                                           (20,469)         (15,173) 
Income not taxable/expenses not deductible 
 for tax purposes                                             (3,847)            8,280 
Overseas losses not recognised                                  5,313            4,402 
Withholding tax expensed                                          505                - 
Chargeable gain on disposal                                     3,299                - 
Movement in current and deferred tax 
 on share awards and options                                      180               35 
Prior period over provision 
                                                              (1,775)          (1,707) 
 Recognition of losses previously not 
 recognised                                                      (20)          (5,466) 
Effect of rate change on deferred tax                             166            (950) 
Difference due to overseas tax rates                          (4,636)            1,140 
                                             ------------------------  --------------- 
Total income tax credit                                      (21,284)          (9,439) 
                                             ========================  =============== 
 

The tax charge for the current year includes a credit of GBP2,135,000 in respect of non-underlying items. This arises from deductible items, primarily in the UK, on the gain on sale and leaseback of Head Office and IFRS16 impairments.

d) Deferred and current tax recognised directly in equity

 
                                            53 weeks ended   52 weeks ended 
                                                30 January       25 January 
                                                      2021             2020 
-----------------------------------------  ---------------  --------------- 
                                                   GBP'000          GBP'000 
Deferred tax (credit)/ charge) on 
 share awards and options                             (20)               25 
Deferred tax (credit)/ charge associated 
 with movement in hedging reserve                      (6)             (22) 
Deferred tax (credit)/ charge associated 
 with foreign exchange movements in 
 reserves                                            (587)              173 
                                           ---------------  --------------- 
                                                     (613)              176 
                                           ===============  =============== 
 

The March 2020 Budget announced that a rate of 19% would continue to apply with effect from 1 April 2020 and this was substantively enacted on 17 March 2020

As the deferred tax assets and liabilities should be recognised based on the corporation tax rate at which they are anticipated to unwind, the assets and liabilities on UK operations have been largely recognised at a rate of 19% (2020:17%). Assets and liabilities arising on foreign operations have been recognised at the applicable overseas tax rates.

The March 2021 Budget announced a further increase to the main rate of corporation tax to 25% from April 2023. This rate has not been substantively enacted at the balance sheet date, as result UK deferred tax balances as at 30 January 2021 continue to be measured at 19%. If all o the UK deferred tax was to reverse at the amended rate the impact to the closing deferred tax position would be to increase the deferred tax asset by GBP1.7m.

6. Dividends Per Share

 
                                                53 weeks ended   52 weeks ended 
                                                    30 January       25 January 
                                                          2021             2020 
--------------------------------------------  ----------------  --------------- 
                                                       GBP'000          GBP'000 
  Final dividend paid for prior period 
   of nil p per ordinary share (2020: 
   40.7p)                                                    -           18,138 
  Interim dividend paid of nil per ordinary 
   share (2020: 7.8p)                                        -            3,477 
                                              ----------------  --------------- 
                                                             -           21,615 
                                              ================  =============== 
 
 

The directors have temporarily suspended the dividend, and hence, no final dividend is proposed for the period ended 30 January 2021.

7. Earnings Per Share

 
                                           53 weeks ended        52 weeks ended 
                                               30 January            25 January 
                                                     2021    2020 (Restated)(1) 
----------------------------------------  ---------------  -------------------- 
Number of shares:                                  Number                Number 
Weighted number of ordinary shares 
 outstanding                                  153,941,467            44,565,753 
Effect of dilutive options(3)                   5,293,825                48,391 
Weighted number of ordinary shares 
 outstanding - diluted                        159,241,292            44,614,144 
                                          ===============  ==================== 
 
Earnings:                                         GBP'000               GBP'000 
Loss for the period basic and diluted            (86,445)              (68,186) 
Underlying (loss)/profit(2)                      (40,012)                 2,974 
 
Basic loss per share                              (56.2p)              (153.0p) 
Underlying (loss)/earnings per share(2)           (26.0p)                  6.7p 
Diluted loss per share                            (56.2p)              (153.0p) 
Underlying diluted (loss)/earnings 
 per share(2)                                     (26.0p)                  6.7p 
 
 

Due to the loss-making position at the year end, all potential ordinary shares are considered to be antidilutive.

(1) M ore details of the restatement are shown in the annual report and accounts.

(2) Underlying profit for the period and underlying earnings per share is shown before non-underlying items. Non-underlying items net of tax were GBP46,433,000 (2020: GBP71,160,000).

(3) Diluted earnings per share and adjusted diluted earnings per share have been calculated using additional ordinary shares of 5p each available under the Ted Baker Sharesave Scheme and the Ted Baker Plc Long Term Incentive Plan 2013.

   8.             Intangible Assets 
 
                         Reacquired  Key money   Computer    Computer software     Total 
                              right              software    under development 
-----------------------  ----------  ---------  ---------  -------------------  -------- 
                            GBP'000    GBP'000    GBP'000              GBP'000   GBP'000 
Cost 
At 25 January 2020(1)         3,781        617     55,607                2,879    62,884 
Additions                         -          -          -                3,692     3,692 
Transfers                         -          -      5,057              (5,057)         - 
Exchange rate movement            -          -      (154)                   54     (100) 
                         ----------  ---------  ---------  -------------------  -------- 
At 30 January 2021            3,781        617     60,510                1,568    66,476 
 
Amortisation 
At 25 January 2020(1)         2,035          -     13,885                    -    15,920 
Charge for the 
 period                       1,746          -     13,509                    -    15,255 
Impairments                       -        653          -                    -       653 
Exchange rate movement            -       (36)       (74)                    -     (110) 
                         ----------  ---------  ---------  -------------------  -------- 
At 30 January 2021            3,781        617     27,320                    -    31,718 
                         ----------  ---------  ---------  -------------------  -------- 
 
Net book value 
 
At 30 January 2021                -          -     33,190                1,568    34,758 
                         ==========  =========  =========  ===================  ======== 
At 25 January 2020            1,746        617     41,722                2,879    46,964 
                         ==========  =========  =========  ===================  ======== 
 
 
 

(1) More details of the restatement are shown in the annual report and accounts.

 
                    Reacquired  Key money     Computer            Computer    Total 
                         right                software            software 
                                            (restated)   under development 
------------------  ----------  ---------  -----------  ------------------  ------- 
                       GBP'000    GBP'000      GBP'000             GBP'000  GBP'000 
Cost 
At 26 January 
 2019                    3,781        633       47,957               4,147   56,518 
Additions                    -          -            -               6,368    6,368 
Transfers                    -          -        7,636             (7,636)        - 
Exchange rate 
 movement                    -       (16)           14                   -      (2) 
                    ----------  ---------  -----------  ------------------  ------- 
At 25 January 
 2020                    3,781        617       55,607               2,879   62,884 
                    ---------- 
 
Amortisation 
At 26 January 
 2019                      145          -       12,700                   -   12,845 
Prior period 
 restatement(1)              -          -      (4,699)                   -  (4,699) 
                    ----------  ---------  -----------  ------------------  ------- 
At 26 January 
 2019 as restated          145          -        8,001                   -    8,146 
Charge for the 
 period                  1,890          -        5,876                   -    7,766 
Exchange rate 
 movement                    -          -            8                   -        8 
                    ----------  ---------  -----------  ------------------  ------- 
At 25 January 
 2020                    2,035          -       13,885                   -   15,920 
                    ----------  ---------  -----------  ------------------  ------- 
 
Net book value 
                    ----------  ---------  -----------  ------------------  ------- 
At 25 January 
 2020                    1,746        617       41,722               2,879   46,964 
                    ==========  =========  ===========  ==================  ======= 
At 26 January 
 2019                    3,636        633       39,956               4,147   48,372 
                    ==========  =========  ===========  ==================  ======= 
 

(1) More details of the restatement are shown in the annual report and accounts.

Amounts included within computer software relate to the Group's information technology and ERP systems and further development of our e-commerce platforms and other business systems. The computer software under development category is stated net of transfers to computer software. Internally capitalised costs amount to GBPnil (2020: GBP718,000).

Transfers from the computer software under development category in the period amounted to GBP5,057,000 (2020: GBP7,636,000) while additions into this category were GBP3,692,000 (2020: GBP6,368,000).

9. Property, Plant and Equipment

 
                                Freehold      Leasehold    Fixtures,      Motor   Assets under     Total 
                                land and   improvements     fittings   vehicles   construction 
                               buildings                  and office 
                                                           equipment 
                                                          (restated) 
----------------------------  ----------  -------------  -----------  ---------  -------------  -------- 
                                 GBP'000        GBP'000      GBP'000    GBP'000        GBP'000   GBP'000 
Cost 
At 25 January 
 2020(1)                          57,973        126,687      104,871        111          1,524   291,166 
Additions                              -              -            -          -          3,289     3,289 
Transfers                              -            212        3,774          -        (3,986)         - 
Write offs                             -        (3,240)      (3,988)          -              -   (7,228) 
Disposals                       (57,973)        (6,369)      (7,976)        (2)              -  (72,320) 
Exchange rate 
 movement                              -        (1,539)            3          -             22   (1,514) 
                              ----------  -------------  -----------  ---------  -------------  -------- 
At 30 January 
 2021                                  -        115,751       96,684        109            849   213,393 
                              ----------  ------------- 
 
Depreciation 
At 25 January 
 2020(1)                           1,827         84,441       82,060        108              -   168,436 
Charge for the 
 period                              192          7,554        5,111          -              -    12,857 
Write offs                             -        (3,037)      (3,866)          -              -   (6,903) 
Disposals                        (2,019)        (6,281)      (2,703)          1              -  (11,002) 
Impairment                             -          7,142        5,001          -              -    12,143 
Exchange rate 
 movement                              -        (1,309)        (230)          -              -   (1,539) 
                              ----------  ------------- 
At 30 January 
 2021                                  -         88,510       85,373        109              -   173,992 
 
Net book value 
At 30 January 
 2021                                  -         27,241       11,311          -            849    39,401 
At 25 January 
 2020                             56,146         42,246       22,811          3          1,524   122,730 
 
                                      (1) More details of the restatement are shown in the annual report 
                                                                                           and accounts. 
                                Freehold      Leasehold    Fixtures,      Motor   Assets under     Total 
                                land and   improvements     fittings   vehicles   construction 
                               buildings                  and office 
                                                           equipment 
----------------------------  ----------  -------------  -----------  ---------  -------------  -------- 
                                 GBP'000        GBP'000      GBP'000    GBP'000        GBP'000   GBP'000 
Cost 
At 26 January 
 2019                             57,973        129,351      101,743        111          3,248   292,426 
Prior period restatement(3)            -              -      (8,384)          -              -   (8,384) 
At 26 January 
 2019 as restated                 57,973        129,351       93,359        111          3,248   284,042 
Additions/transfers                    -          6,828       14,624          -        (1,997)    19,455 
Disposals                              -        (9,788)      (2,802)          -            210  (12,380) 
Exchange rate 
 movement                              -            296        (310)          -             63        49 
                              ----------  -------------  -----------  ---------  -------------  -------- 
At 25 January 
 2020                             57,973        126,687      104,871        111          1,524   291,166 
                              ----------  ------------- 
 
Depreciation 
At 26 January 
 2019                              1,379         82,580       76,494        108              -   160,561 
Prior period restatement(3)            -              -      (3,685)          -              -   (3,685) 
At 26 January 
 2019 as restated                  1,379         82,580       72,809        108              -   156,876 
Charge for the 
 period (1)                          448          9,225       11,461          -              -    21,134 
Disposals (2)                          -        (8,385)      (2,421)          -              -  (10,806) 
Impairment                             -            744          537          -              -     1,281 
Exchange rate 
 movement                              -            277        (326)          -              -      (49) 
                              ----------  ------------- 
At 25 January 
 2020                              1,827         84,441       82,060        108              -   168,436 
 
Net book value 
At 25 January 
 2020                             56,146         42,246       22,811          3          1,524   122,730 
At 26 January 
 2019                             56,594         46,771       20,550          3          3,248   127,166 
 

(1) Depreciation includes GBP0.5m in relation the closure of our outlet store in Italy. This charged has been included in other closure costs within the non-underlying charge disclosed in the full financial statements .

(2) Disposals include the disposal of property, plant and equipment in Asia of GBP0.9m following the Asia reorganisation during the year. This charge is included in the total loss on disposal of Asian business of GBP7.6m within the non-underlying charge disclosed in the full financial statements

(3) More details of the restatement are shown in the annual report and accounts.

Transfers from the assets under construction category in the period amounted to GBP3,986,000 (2020: GBP1,997,000) while additions into this category were GBP3,289,000 (2020: GBP19,455,000).

10. Related Parties

The Group considers its Executive and Non-Executive Directors, together with the Executive Team as key management and their compensation therefore comprises a related-party transaction.

Total compensation in respect of key management for the period was as follows:

 
                                  53 weeks ended  52 weeks ended 
                                      30 January      25 January 
                                            2021            2020 
                                         GBP'000         GBP'000 
Salaries, fees and short-term 
 benefits                                  3,297           1,092 
Contributions to money purchase 
 pension schemes                              57              55 
Share-based payment (credit) /                 -               - 
 charges 
                                           3,354           1,147 
 

Directors of the Company as at 30 January 2021 and their immediate relatives control 0.2% of the voting shares of the Company.

At 30 January 2021, No Ordinary Designer Label Limited ("NODL"), the main trading company owed Ted Baker Plc GBP122,677,000 (2020: GBP27,096,000) and owed No Ordinary Shoes Limited GBP10,070,000 (2020: GBP10,070,000.) NODL was owed GBP105,290,000 (2020: GBP174,488,000) from the other subsidiaries within the Group. Transactions between subsidiaries were priced on an arm's length basis.

The Group has a 50% interest in the ordinary share capital of No Ordinary Retail Company Pty*, a company incorporated in Australia, through its wholly owned subsidiary No Ordinary Designer Label Limited. As at 30 January 2021, the joint venture owed GBP372,000 to the main trading company (2020: GBP530,000). In the period the value of sales made to the joint venture by the Group was GBP1,261,000 (2020: GBP2,485,000).

The Group has a 50% interest in the ordinary share capital of Shanghai LongShang Trading Company Ltd*, a company incorporated in Mainland China, Hong Kong and Macau, through its wholly owned subsidiary No Ordinary Designer Label Limited. As at 30 January 2021, the joint venture owed GBP3,933,000 to the main trading company (2020: GBP3,933,000). In the period the value of sales made to the joint venture by the Group was GBP2,876,000 (2020: GBP1,074,000).

Ray Kelvin, the former Chief Executive and a major shareholder in the business, has the right to appoint a non-executive director. He has exercised this right, and Colin La Fontaine Jackson has been appointed to the Board in September 2020.

*The registered office addresses are as follows:

 
Related party                  Registered office address 
No Ordinary Retail Company     6 Albert St, Preston VIC 3072, 
 Pty                            Australia 
Ted Baker (Hong Kong) Limited  Room 2001-2, Tower 2, The Gateway, 
                                Harbour City, 25 Canton Road, 
                                Tsim Sha Tsui, Kowloon, Hong 
                                Kong 
 

12. Impact of IFRS 16 'Leases'

Right-of-use assets

The Group has applied IFRS 16 using the simplified modified retrospective transition approach.

Right-of-use assets are recognised in relation to the Group's leases, representing the economic benefits of the Group's right to use the underlying leased assets. The Group's lease portfolio is principally comprised of property leases of stores, distribution centres and overseas head offices.

The Group has applied the practical expedient for the application of rent concessions provided as a response to the COVID-19 pandemic, as allowed by the amendment to IFRS16.

 
Right-of-use asset                    30 January  25 January 
                                            2021        2020 
Cost                                     GBP'000     GBP'000 
Opening                                  188,219           - 
Adoption of IFRS 16                            -     185,409 
Restatement(1)                                 -    (13,276) 
Restated opening                         188,219     172,133 
Gross adjustment(2)                      (2,019)           - 
Additions                                  9,229      12,473 
(Decrease)/increase in right-of-use 
 assets                                  (9,179)       9,445 
Disposals                                (4,706)     (5,832) 
Closing                                  181,544     188,219 
Amortisation 
Opening                                 (50,232)           - 
Gross adjustment(2)                        2,019           - 
Charge for the period                   (26,763)    (38,048) 
Restatement(1)                                 -       2,229 
Disposals                                  4,706       2,426 
Impairments(3)                          (29,515)    (16,839) 
Closing                                 (99,785)    (50,232) 
 
Net book value                            81,759     137,987 
 

(1) M ore details of the restatement are shown in the annual report and accounts.

(2) Gross adjustment between cost and amortisation brought forward to better reflect underlying gross split.

(3) Impairments in the year of GBP29,515,000 consisted of the interim impairment of GBP33,922,000 less a reversal of GBP4,407,000 arising from modifications.

Lease liabilities

When measuring lease liabilities, the Group discounted lease payments using its incremental borrowing rate upon transition to IFRS 16 and at subsequent remeasurement dates. The discount rates applied range between 3.9% to 9.1%, they have been determined based on comparable bond yields and are lease specific varying by territory and lease length.

Amounts recognised in profit or loss

 
                                            Group         Group 
                                       30 January    25 January 
                                             2021          2020 
                                          GBP'000       GBP'000 
 Interest on lease liabilities (1)          6,781         8,309 
 

(1) Expenses related to variable rental payments for leasehold properties are detailed within the annual report and accounts. .

Lease liabilities included in the statement of financial position

 
                                  Group         Group 
                             30 January    25 January 
                                   2021          2020 
                                GBP'000       GBP'000 
 Current                         33,754        36,381 
 Non-current                    106,617       131,956 
 Total lease liabilities        140,371       168,337 
 

Reconciliation of liabilities to cashflow arising from financing activities:

 
                                           Group              Group 
                                      30 January    25 January 2020 
                                            2021 
                                         GBP'000            GBP'000 
 Opening                                 168,337            185,409 
 Gross Adjustment(1)                       (807)                  - 
 Changes from financing cash 
  flows: 
 Payment of lease liabilities           (35,826)           (41,337) 
 Remeasurement                             (361)                  - 
 Total changes from financing 
  cash flows                            (36,187)           (41,337) 
 
 Increase in lease liability(2)            2,509             21,918 
 Disposal of lease liabilities                 -            (3,406) 
 The effect of changes in foreign 
  exchange rates                           (262)            (2,556) 
 Interest expense                          6,781              8,309 
 Total other changes                       9,028             24,265 
                                         140,371            168,337 
 

(1) Gross adjustment to opening balance to better reflect the gross split.

(2) Increase in lease liability consists of additions of GBP9.229m and reductions of GBP6.720m arising from lease modifications.

Maturity analysis - contractual undiscounted cash flows

 
                               Group              Group 
                          30 January    25 January 2020 
                                2021 
                             GBP'000            GBP'000 
 Less than one year           34,510             36,379 
 One to five years            98,531            107,024 
 More than five years         17,355             40,786 
                             150,396            184,189 
 

13. Post balance sheet events

On 24 May 2021, the Group successfully refinanced its existing debt facilities of GBP132.8 million due to mature in September 2022 with one maturing in November 2023. The new Revolving Credit Facility, reflecting the future business forecasts, is initially for GBP90 million, reducing to GBP80 million in January 2022. Unamortized fees from the original facility will be treated as an underlying item in the financial statements for 2022. Fees associated with the facility will be amortised over the expected life of the facility as an underlying item.

In May 2022, the Group restructured its French business, following a consultation with all colleagues in country, closing three of its four owned stores or outlets. The future operating model will be based around concession and partner sites. The costs of approximately GBP2.2 million for redundancy, asset write-offs and other fees, have been treated as non-underlying costs in 2022.

Statement of Directors' Responsibilities

The Directors are responsible for preparing the annual report and the financial statements in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006 and applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors are required to prepare the group financial statements and have elected to prepare the company financial statements in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company and of the profit or loss for the group for that period. The Directors are also required to prepare financial statements in accordance with international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union.

In preparing these financial statements, the Directors are required to:

o select suitable accounting policies and then apply them consistently

o make judgements and accounting estimates that are reasonable and prudent

o state whether they have been prepared in accordance with international accounting standards in conformity with the requirements of the Companies Act 2006, subject to any material departures disclosed and explained in the financial statements.

o state whether they have been prepared in accordance with international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union, subject to any material departures disclosed and explained in the financial statements

o prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business

o prepare a Directors' report, a Strategic report and Directors' remuneration report which comply with the requirements of the Companies Act 2006.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006 and, as regards the group financial statements, Article 4 of the IAS Regulation.

They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for ensuring that the annual report and accounts, taken as a whole, are fair, balanced, and understandable and provides the information necessary for shareholders to assess the group's performance, business model and strategy.

Website publication

The Directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial statements are published on the company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.

Directors' responsibilities pursuant to DTR4

The Directors confirm to the best of their knowledge:

o The financial statements have been prepared in accordance with the applicable set of accounting standards and Article 4 of the IAS Regulation and give a true and fair view of the assets, liabilities, financial position and profit and loss of the group and company.

o The annual report includes a fair review of the development and performance of the business and the financial position of the group and company, together with a description of the principal risks and uncertainties that they face.

We consider the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group's position and performance, business model and strategy.

On behalf of the Board

 
John Barton  Rachel Osborne 
 Chair        Chief Executive Officer 
 

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