12 October 2021

 

FRENCH CONNECTION GROUP PLC

 

Interim Results for the six-month period ending 31 July 2021

 

"Group recovers from impact of COVID-19 Pandemic"

 

French Connection Group PLC ("French Connection", the "Company" or the "Group") today announces results for the six-month period ending 31 July 2021.

 

In accordance with statutory requirements, the financial statements in this document present the results for the current six-month period ending 31 July 2021, the prior six-month period ending 31 July 2020 and the end of the immediately preceding financial year ending 31 January 2021.

 

The comparisons, however, are presented relative to two years ago (six months ended 31 July 2019) where the one-year comparisons (six months ended 31 July 2020) are generally not reflective of typical trading performance due to disruption from COVID-19.

 

 

Highlights:

 

·      Group revenue of £40.2m (2019: £51.0m), down 21.2%, due to the reduced Retail portfolio and temporary COVID-19 store closures, offset by increased Wholesale and E-commerce contribution

 

·      Underlying loss of £(0.9)m compared to £(3.6)m in 2019, driven by continued closure of non-contributing stores, bounce back of Wholesale volumes and tight focus on overheads

 

·      Composite gross margin of 31.6% (2019: 42.7%) due to mix shift towards lower margin Wholesale channel and the level of fixed product development and logistic costs on the lower overall volumes

 

·      Overheads reduced to £15.2m (2019: £27.3m) due to permanent and temporary store closures, restructuring initiatives, a tight focus on all costs as well as some COVID-19 relief

 

·      Permanent closure of 3 non-contributing locations during the first half

 

·      Terms and conditions agreed of a recommended acquisition of the Company

 

·      Closing net funds of £1.0m (2019: £10.0m)

 

Commenting on the results, Stephen Marks, Chairman and Chief Executive said:

 

"I am pleased that the improvement in business we saw in the early part of the period has continued throughout the first half of the financial year. Wholesale in both the UK and the US has performed well, with a good outcome to the Summer season.

 

Over the last 5 years, French Connection has made significant progress in its plans to rationalise the size of its store portfolio and to return the Group to profitability.

 

The Board has concluded that the offer being made by MIP Holdings Ltd is fair and reasonable and recommends that all shareholders accept.

 

Following completion of the transaction, I will retire from French Connection. This is an appropriate time for me to step back from the business that I founded in 1972, and I would like to take this opportunity to thank all our people for their contribution to our achievements over the years. I wish them all every success in the future."

 

 

Summary of key financial and non-financial performance indicators

 

	Six months 31 July 2021	Six months 31 July 2019	2 year variance	Six months 31 July 2020	1 year variance
	£m	£m	%	£m	%
Revenue
Retail	11.4	23.8	-52.1%	10.1	+12.9%
Wholesale	28.8	27.2	+5.9%	13.8	+108.7%
Group revenue	40.2	51.0	-21.2%	23.9	+68.2%
Gross margin
Retail	44.7%	52.5%	-7.8%	18.8%	+25.9%
Wholesale	26.4%	34.2%	-7.8%	12.3%	+14.1%
Group gross margin	31.6%	42.7%	-11.1%	15.1%	+16.5%
Group operating expenses	(15.2)	(27.3)	+44.3%	(16.7)	+9.0%
Underlying operating (loss)/profit
Retail	(2.5)	(5.2)	+51.9%	(7.5)	+66.7%
Wholesale	4.5	4.8	-6.3%	(1.3)	+446.2%
Licence income	2.4	2.7	-11.1%	1.5	+60.0%
Common and Group overheads	(4.5)	(5.1)	+11.8%	(4.3)	-4.7%
Finance expense	(0.8)	(0.8)	-	(0.6)	-33.3%
Underlying Group operating loss	(0.9)	(3.6)	+75.0%	(12.2)	+92.6%
Net funds	1.0	10.0	-90.0%	5.2	-80.8%
Average UK/Europe Retail Space (sq.ft. 000s)	104.7	151.0	-30.7%	116.7	-10.3%
Average Group Retail Space (sq.ft. '000s)	104.7	161.3	-35.1%	124.3	-15.8%
Number of stores/concessions:
-               Operated	64	90	-28.9%	72	-11.1%
-               Franchised, Licensed & JV	164	185	-11.4%	162	+1.2%

 

 

Notes:

 

1.       Underlying results exclude adjusting items and discontinued operations.

2.       Comparatives have been included for the six months ended 31 July 2019 and 31 July 2020. The July 2019 numbers are not impacted by COVID-19.

 

The Directors believe these measures are best reflective of how the business is managed and are informative to shareholders in understanding the performance of the business.

 

A copy of this release will also be available on the 'Recommended Offer for French Connection plc' microsite at https://www.frenchconnection.com/content/investor-relations/recommended-offer-for-french-connection-plc/index.htm

 

 

 

Enquiries:	Neil Williams Lee Williams	French Connection	+44 (0) 20 7036 7207
	Tom Buchanan  Louise Evans	Paternoster	+44 (0) 20 3012 0241

 

 

 

CHAIRMAN'S STATEMENT

 

I am pleased to report that the improvement in business we saw in the early part of the period has continued throughout the first half of the financial year. Wholesale in both the UK and the US has performed well, with a good outcome to the Summer season coupled with encouraging order books for the Winter collections. We achieved a stronger trading performance following the re-opening of stores in Q2 2021 compared to the post-lockdown periods of 2020 and have additionally seen the benefit of the closure of several non-contributing stores over the last 18 months. We took a significantly less promotional stance through the Summer season in stores and through E-commerce, resulting in increased full price revenue. Consequently, margins improved, however revenue growth was restricted to some extent. Licence income has generally returned to growth following the COVID-19 period, with a particularly strong performance from DFS.

 

Revenue for the period was £40.2m (2019: £51.0m) with the reduction reflecting the weeks of store closures at the start of the period and the permanently closed locations. Wholesale revenue has bounced back to above the levels seen in 2019. Overall margin at 31.6% (2019: 42.7%) was lower due to the movement in the revenue mix away from Retail to Wholesale, the level of fixed logistics and development expenses, offset by reduced discounting of the Summer product. Particularly, following the restructuring exercise undertaken last year but also with tight control over ongoing expenses, these costs have been considerably reduced. Overall this has resulted in an improvement in the performance of the business reflected in a loss for the period of £(0.9)m (2019: £(3.6)m).

 

The net funds position of £1.0m is slightly ahead of our expectations following a period of tight cash control. The seasonality of our cash profile means that July tends to be one of our strongest cash months prior to the commitment of working capital to our Autumn/Winter collections and, accordingly, we are grateful that our liquidity continues to be supported by credit facilities of circa £20m which are available to fund our larger working capital requirements during the second half of the year.

 

Wholesale

Overall revenue grew to £28.8m for the period (2019: £27.2m). Performance improved across all ranges with good sell throughs achieved, particularly in the US. Underlying margins were maintained but the impact of the increased fixed cost allocation of development and logistics costs, due to the contraction of the Retail business, reduced the reported margin to 26.4% (2019: 34.2%). Expenses were reduced across all areas to £3.1m (2019: £4.5m) and overall the division made a contribution of £4.5m (2019: £4.8m).

 

Retail

Revenue for the period was £11.4m (2019: £23.8m), reflecting the store closures for 11 weeks due to COVID-19 restrictions and the significant reduction in the store portfolio since 2019. Within this, E-commerce revenue grew to £5.8m from £5.3m, with growth achieved in both the UK and US despite reduced levels of promotion, reflecting the strong sell through of the Summer product at full price. Like-for-like sales were down 11.9% on 2019, which is a better performance than when we reopened in 2020. Gross margin was 44.7% (2019: 52.5%) with an improvement in E-commerce offset by a higher mix of outlet sales given the current makeup of the Retail store portfolio and added clearance in the sale of the prior season's stock built up during the COVID-19 period. Expenses were reduced to £7.6m (2019: £17.7m) predominantly reflecting the closure of stores but also the restructuring of staff levels within the stores undertaken last year, as well as the continued business rates relief. This was offset to some extent by additional investment in the E-commerce channel to assist with the development of that business which is reflected in the increase in revenue through that channel. Overall the division made a loss of £(2.5)m (2019: £(5.2)m).

 

Licensing

License income was £2.4m in the period (2019: £2.7m). DFS continued to perform very strongly both on the existing ranges and having added a further set. Our US homeware license also traded well. These are offset by a drop in income from our formalwear license and from our partner in India.

 

Operating expenses

Group operating expenses dropped by 44.3%, reflecting predominantly the store closures and restructuring initiatives discussed above. In addition, good progress has been made in achieving savings across all expense categories.

 

CHAIRMAN'S STATEMENT (continued)

 

Other items

There are no adjusting items in the current period however in 2019 we incurred adjusting items of £1.0m. This was made up of store closure costs, the reorganisation of some of our overseas franchise relationships and the cost of a small Head Office restructuring.

 

There still, however, remains a risk of disruption to trading due to any future COVID-19 restrictions, particularly through the winter months, together with other macro-economic factors including the current constraints in the global supply chain and the impact on the availability of merchandise at the correct time.

 

Following the commencement of a formal sale process under the Takeover Code announced on 2 March 2021, we announced on 4 October 2021 the terms of a formal offer to be made by MIP Holdings Ltd for the Company at 30p per share to be effected by way of a scheme of arrangement under Part 26 of the Companies Act 2006. The terms and conditions of this offer are set out in more detail in the scheme document which was published on 9 October 2021. This offer is being recommended by the Board and is supported by irrevocable undertakings to vote in favour of the scheme from shareholders representing, in aggregate, 43.6% of the issued share capital of the Company. I and my fellow Directors strongly recommend that shareholders read the scheme document on www.frenchconnection.com/content/investor-relations/recommended-offer-for-french-connection-plc/index.htm and vote in favour of the scheme at the upcoming shareholder meetings to approve the transaction.

 

 

 

 

 

 

 

 

Stephen Marks

Chairman and Chief Executive

12 October 2021

 

 

Notes:

1. Underlying results excludes adjusting items and discontinued operations.

2. Comparative numbers are for the six-month period ending 31 July 2019 as these numbers exclude any COVID-19 impact.

 

The Directors believe these measures are best reflective of how the business is managed and are informative to shareholders in understanding the performance of the business.

 

 

FINANCIAL REVIEW

 

Financial results overview

The half-year results cover the six-month period to 31 July 2021. This period continued to be significantly impacted by COVID-19 and lockdown restrictions imposed in both the UK and our global territories, with Retail stores only fully re-opening from the middle of April 2021. Full details of the operational impact of COVID-19 on the business are highlighted in Note 8 in these half-year statements.

 

The first half generated a significantly improved underlying operating performance reflected in a loss of £(0.9)m (2020: £(12.2)m and 2019: £(3.6)m). The underlying result for the current period includes no adjusting items (2020 and 2019: £1.0m relating to store disposal and refinancing costs). Total operating loss for the six months to July 2021 was £(0.9)m (2020: £(13.2)m and 2019: £(4.7)m).

 

On 24 July 2020, the Group secured a two-year £15 million asset based working capital facility with Hilco Capital. Furthermore, in December 2020, our US business secured additional funding of $6.5m (the "US loan") through the Government sponsored Main Street Lending Programme. The US loan, through Flushing Bank, Uniondale is for a period of five years with repayments commencing from the end of the third year. The Group believes that these combined working capital facilities are sufficient to cover the Company's foreseeable future cash requirements.

 

Revenue overview

Total H1 2021 revenue of £40.2m was 21.2% lower than the 2019 comparative period (2019: £51.0m). Wholesale revenue improved to slightly above pre-pandemic volumes of £28.8m (2019: £27.2m) as the business benefitted from UK customers with strong E-commerce propositions and a growing US departmental store client base. Retail revenue fell by 52.1% to £11.4m (2019: £23.8m) reflecting the significant reduction in the store portfolio since 2019. However, total E-commerce sales volumes continued to grow and constitute 50.9% (2019: 22.3%) of total Retail sales.

 

Gross margin

Composite gross margin of 31.6% was lower than the comparative 2019 period (42.7%) reflecting a mix shift towards the lower margin Wholesale channel following the closure of a significant number of Retail outlets.

 

Wholesale

Wholesale revenue increased to slightly above pre-pandemic volumes with total sales of £28.8m (2019: £27.2m), an improvement of 5.9% (8.9% at constant currency). Geographic revenues have significantly increased in UK/Europe to £18.4m (2019: £15.1m), while North America has remained broadly flat at £9.9m (2019: £10.9m) and Rest of World volumes decreasing to £0.5m (2019: £1.2m).

 

Group Wholesale margin has recovered in the period to 26.4% (2019: 34.2%) although margins remain softened by off-price clearance of older seasons product and a higher allocation of the fixed overhead base as the Retail portfolio declines. Underlying Wholesale performance in the first half returned to profitability of £4.5m (2019: £4.8m).

 

Retail

Group Retail revenue of £11.4m was 52.1% (51.7% at constant currency) lower than the 2019 comparative period (2019: £23.8m) driven by the reduction in the Retail store portfolio. Three non-contributing stores were closed during the last six months. Over the past 24 months we have closed 26 non-contributing stores and concessions. We continue to review each store depending upon circumstances and opportunities available to us.

 

Retail gross margins of 44.7% (2019: 52.5%) reflect the higher mix of outlet product sales and increased clearance sales of unsold stock during lockdown periods.  

 

E-commerce revenue as a proportion of Group Retail revenue has increased to 50.9% (2019: 22.3%). Mobile comprises 71.6% of E-commerce traffic (2019: 63.7%) and 59.8% of transactions (2019: 48.1%) as we continue to focus on and develop our CRM capability and targeted social media advertising.

 

Underlying Retail loss in the six months improved to £(2.5)m (2019: £(5.2)m) reflecting the significant reduction in the Retail store portfolio over the last two years. The current period result has been supported by a reduction in the Retail cost base arising from Government initiatives, including employment furlough schemes and business rates holidays. We have continued throughout the current period to be in active discussions with landlords regarding rent discounts together with an extension of existing payment terms.

 

FINANCIAL REVIEW (continued)

 

Geographical analysis

The geographical revenue analysis highlights the UK/Europe proportion of sales remaining constant at 72.2% (2019: 72.5%), North American share of global revenue increasing to 26.6% (2019: 25.1%) and Rest of World revenue decreasing to 1.2% (2019: 2.4%).

 

The half-year has seen an improvement in profitability in the geographic regions: UK/Europe returning to profitability of £1.0m (2019: loss of £(1.5)m), North America similarly generating a profit of £1.8m (2019: £1.4m) and the Rest of World contributing a loss of £(0.4)m (2019: £(0.4)m).

 

Licensing income

Licensing income of £2.4m generated during the first half remained broadly constant (2019: £2.7m). DFS orders continue to grow year-on-year and new footwear and childrenswear licensees have been launched in the US. However, these are offset slightly by a drop in income from our formalwear license and our Indian partner.

 

Operating expenses

Underlying Group operating expenses of £15.2m were 44.3% lower than the comparative 2019 year (2019: £27.3m), reflecting the year-on-year impact of store closures, targeted cost savings from restructuring initiatives and Government support from furlough schemes and business rates holidays. We continue to focus on cost control and efficiency savings through H2. Total Group operating expenses, including adjusting items and discontinued operations, were £15.2m (2019: £28.3m).

 

Adjusting items

There were no adjusting items in the current period. Adjusting items of £1.0m were recognised in 2020 and 2019 relating to store disposal and dilapidation costs and refinancing costs in relation to securing the working capital facility.

 

Balance sheet

The Group balance sheet at 31 July 2021 includes net assets of £8.4m (2019: £33.4m).

 

Closing net funds of £1.0m (2019: £10.0m) are inclusive of recently secured drawdown working capital facilities of £7.7m (2019: £Nil) offset by cash of £8.7m (2019: £10.0m).

 

Inventories reduced by 24.1% to £24.9m (2019: £32.8m) reflecting a reduced Retail portfolio, offset by an increased Winter season buy to service the growing UK and US Wholesale order books. Trade and other payables have increased by 7.6% to £28.4m (2019: £26.4m) relating to the increased Winter inventory. Trade and other receivables of £18.9m have increased in the last twelve months as wholesale volumes return to pre-pandemic levels although remain lower than 2019 comparatives (£21.5m).

 

The right of use non-current asset, relating to the value-in-use of future lease rentals has reduced to £9.1m (2019: £23.0m), reflective of a contracting store portfolio and prior year impairments relating to the impact of COVID-19 on Retail profitability. The increase from January '21 year-end position of £6.6m relates to an extension of a warehouse lease.

 

Cash flow

Combined UK and US working capital facilities of circa £20m were secured in the second half of the prior financial year to support the Group's foreseeable future cash requirements. The maximum facility utilised in the six months to 31 July 2021 was £9.4m and the maximum borrowing position forecast over the next 12 months is £12.5m.

 

Cash inflows of £6.4m (2019: £1.1m) were generated from operating activities in the six-month period; the increase being a combination of improved trading results and additional working capital invested in increased period-end trade debtors as a result of growing Wholesale sales volumes.

 

Cash outflows from investing activities of £0.4m (2019: £1.5m) included store closure costs of £0.2m (2019: £0.6m) relating to the closure of three stores in the first half. We continue to target the closure of non-contributing stores and expect more to close in the second half.

 

Cash outflows from financing activities of £2.5m (2019: £5.8m) are inclusive of additional working capital facility loans drawdown in the period of £1.2m (2019: £Nil) utilised to finance lease liability rental and interest payments of £3.4m (2019: £5.8m) and debt interest and refinancing costs of £0.3m (2019: £Nil).

 

 

FINANCIAL REVIEW (continued)

 

Taxation

The tax charge for the half was £Nil (2019: £Nil). Deferred tax assets of £4.5m (2019: £4.3m) on the balance sheet relate to unused tax trading losses which can be utilised when the Group returns to profitability.

 

Dividends

The Board of Directors remain of the view that the business is best served by retaining current cash reserves to support the turnaround of the business and therefore do not recommend the payment of an interim dividend. Depending on the outcome of the offer from MIP Holdings Ltd to acquire the Company, the Board intend to keep the shareholder distribution policy under close review during the year.

 

COVID-19

The half-year results continued to be impacted by COVID-19 and the lockdown restrictions imposed during this period, particularly in the UK. Further details are presented in Note 8.

 

Going concern

Given the Group and parent Company's new liquidity, together with the actions being taken to optimise sales, tightly manage costs and preserve cash, the Board is confident that the Group and parent Company are well positioned to navigate an extended period of uncertain consumer demand which will cover at least 12 months from the date of approval of these interim results. The Board has therefore concluded that it is appropriate to prepare the interim accounts on a going concern basis.

 

The Group has a debt facility from Hilco which expires in January 2022 with an option to extend the facility to July 2022 at the Company's sole discretion. Furthermore, Hilco has offered the Company an option to extend this facility further to July 2024. Given the announcement on 4 October 2021 by MIP Holdings Ltd, a company owned and controlled by, among others, Apinder Singh Ghura (the second largest shareholder in French Connection with a holding representing approximately 25.4% of the issued share capital of the Company), of an intention to make an offer for the Company at 30p per share, and the subsequent publication of the scheme document setting out the full terms and conditions of that offer and given that MIP Holdings Ltd has secured irrevocable commitments in support of its offer from shareholders holding in aggregate 43.6% of the issued share capital of the Company which, together with the shares already owned by Apinder Singh Ghura, amount in total to approximately 69% of the issued share capital of the Company, the Company has elected to defer exercising the option offered by Hilco, pending the outcome of the offer. Hilco have confirmed that the offer of the option remains in place at the date of this announcement and that it is not their intention to withdraw the offer of the option until such time that control of the business might pass to the Bidder and include the forthcoming renewal of the UK credit facility in July 2022.

 

The Board believes that the combined secured circa £20 million UK and US asset based working capital facilities are expected to be sufficient to cover the Company's foreseeable future cash requirements.

 

The Board is also of the opinion that the outcome of the current offer for the Company by MIP Holdings Ltd is likely to see the current financing arrangements amended with alternative funding arrangements put in place, but is unlikely to affect the going concern basis of these financial statements.

 

Principal risks and uncertainties

The principal risks and uncertainties were outlined in the Director's Report within the 2021 Annual Report and remain unchanged. These are described in Note 1 to these financial statements.

 

Related party transactions

There have been no additional related party transactions to those disclosed in the Group's Annual Report and Accounts for the year ended 31 January 2021.

 

 

FINANCIAL REVIEW (continued)

 

Financial Reporting Council Investigation

It was announced on 6 October 2021 that the Financial Reporting Council (FRC) has commenced an investigation into the audit procedures undertaken by Mazars LLP in Mazars' audit of the Group financial statements for the year ended 31 January 2020. As was noted in the Audit Committee Report in French Connection's Annual Report 2021, the FRC's Audit Quality Review team's assessment of Mazars' audit of the FY2020 accounts highlighted that a number of improvements in the auditing process were required by Mazars. There was no indication however that the findings of the audit were incorrect. The subsequent FY2021 audit has also now been completed satisfactorily. Following subsequent discussions with Mazars, the Audit Committee was satisfied that the changes recommended by the FRC were fully implemented during the FY2021 audit.

 

 

By order of the Board

 

 

 

 

 

Lee Williams

Chief Financial Officer

12 October 2021

 

 

Notes:

1. Underlying results excludes adjusting items and discontinued operations.

2. Constant Currency is calculated translating the half-year ending 31 July 2021 at 31 July 2019 rates to remove the impact of exchange rate fluctuations.

 

The Directors believe these measures are best reflective of how the business is managed and are informative to shareholders in understanding the performance of the business.

 

In order to assist users of the accounts, we have additionally presented the Income Statement, Balance Sheet and Cash Flow for the preceding six-month period ended 31 July 2019.

INCOME STATEMENT	31 July 2021	31 July 2020	31 July 2019
	£m	£m	£m
Revenue	40.2	23.9	51.0
Cost of sales	(27.5)	(20.3)	(29.2)
Gross profit	12.7	3.6	21.8
Operating expenses	(15.2)	(16.7)	(27.3)
Other operating income	2.4	1.5	2.7
Finance expense	(0.8)	(0.6)	(0.8)
Underlying loss before taxation	(0.9)	(12.2)	(3.6)
Taxation	-	-	-
Underlying loss for the period	(0.9)	(12.2)	(3.6)

 

 

SEGMENT REVENUE AND RESULTS	31 July 2021 £m	31 July 2020 £m	31 July 2019 £m
Revenue
Retail	11.4	10.1	23.8
Wholesale	28.8	13.8	27.2
Group revenue	40.2	23.9	51.0
Gross profit	12.7	3.6	21.8
Retail	44.7%	18.8%	52.5%
Wholesale	26.4%	12.3%	34.2%
Group gross margin	31.6%	15.1%	42.7%
Underlying operating (loss)/profit
Retail	(2.5)	(7.5)	(5.2)
Wholesale	4.5	(1.3)	4.8
Licence income	2.4	1.5	2.7
Common and Group overheads	(4.5)	(4.3)	(5.1)
Finance expense	(0.8)	(0.6)	(0.8)
Underlying Group operating loss	(0.9)	(12.2)	(3.6)
Underlying operating margin
Retail	(21.9)%	(74.3)%	(21.8)%
Wholesale	15.6%	(9.4)%	17.6%
Underlying Group operating margin	(2.2)%	(51.0)%	(7.1)%

            

 

BALANCE SHEET	31 July 2021 £m	31 July 2020 £m	31 July 2019 £m
Assets
Non-current assets
Intangible assets	0.2	0.2	0.2
Property, plant and equipment	0.7	1.6	2.6
Right-of-use asset	9.1	14.4	23.0
Investments in joint ventures	-	-	1.7
Deferred tax assets	4.5	4.5	4.3
Total non-current assets	14.5	20.7	31.8
Current assets
Inventories	24.9	26.0	32.8
Trade and other receivables	18.9	15.3	21.5
Cash and cash equivalents	8.7	5.2	10.0
Total current assets	52.5	46.5	64.3
Total assets	67.0	67.2	96.1
Non-current liabilities
Loans and borrowings	4.7	-	-
Lease liabilities	15.6	17.7	25.4
Provisions	0.6	0.2	-
Total non-current liabilities	20.9	17.9	25.4
Current liabilities
Loans and borrowings	3.0	-	-
Trade and other payables	28.4	25.3	26.4
Lease liabilities	5.6	7.1	10.7
Provisions	0.7	0.7	0.2
Total current liabilities	37.7	33.1	37.3
Total liabilities	58.6	51.0	62.7
Net assets	8.4	16.2	33.4

 

 

CASH FLOW	31 July 2021 £m	31 July 2020 £m	31 July 2019 £m
Operating activities
Loss for the period	(0.9)	(13.2)	(4.7)
Adjustments for:
Depreciation of property, plant and equipment	0.5	0.6	0.6
Depreciation of right-of-use asset	1.2	3.2	3.3
Share of loss of joint ventures	-	-	0.1
Finance expense	0.8	0.6	0.8
Adjusting items	-	1.0	1.0
Operating cash flows before changes in working capital   and provisions	1.6	(7.8)	1.1
(Increase)/decrease in inventories	(1.3)	0.8	(4.0)
(Increase)/decrease in trade and other receivables	(1.0)	4.3	0.8
Increase in trade and other payables	7.1	6.4	3.3
Cash flows from operations	6.4	3.7	1.2
Income tax paid	-	-	(0.1)
Cash flows from operating activities	6.4	3.7	1.1
Investing activities
Acquisition of property, plant and equipment	(0.2)	(0.2)	(0.6)
Net costs from store and head office restructuring	(0.2)	(0.4)	(0.9)
Cash flows from investing activities	(0.4)	(0.6)	(1.5)
Financing activities
Proceeds from working capital facilities and loans	1.2	-	-
Payment of lease liabilities	(2.9)	(5.0)	(5.0)
Interest paid on lease liabilities	(0.5)	(0.6)	(0.8)
Interest paid on loans	(0.3)	-	-
Refinancing costs	-	(0.5)	-
Cash flows from financing activities	(2.5)	(6.1)	(5.8)
Net increase/(decrease) in cash and cash equivalents	3.5	(3.0)	(6.2)
Cash and cash equivalents at 1 February	5.2	8.1	16.2
Exchange rate fluctuations on cash held	-	0.1	-
Cash and cash equivalents at period end	8.7	5.2	10.0

 

                                    

Cash and cash equivalents	8.7	5.2	10.0
Bank loans	(7.7)	-	-
Net cash and borrowings at period end	1.0	5.2	10.0

 

RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE HALF-YEARLY FINANCIAL REPORT

 

We confirm that to the best of our knowledge: 

·      the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting;

·      the interim management report includes a fair review of the information required by: 

(a)  DTR rule 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and 

(b)  DTR rule 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

 

 

By order of the Board

 

 

 

 

 

 

Neil Williams	Lee Williams
Chief Operating Officer 12 October 2021	Chief Financial Officer