Final Results, 5 Aug 2021 07:00

05 August 2021, 07:00

Source - LSE Regulatory

RNS Number : 6287H

Frasers Group PLC

05 August 2021

Frasers Group

5 August 2021

Preliminary Results for the period ended 25 April 2021

	52 weeks ended 25 April 2021	52 weeks ended 26 April 2020	Change (%)
	£m	£m
Group revenue	3,625.3	3,957.4	(8.4)
UK Sports Retail	1,968.5	2,203.3	(10.7)
Premium Lifestyle	735.6	722.0	1.9
European Retail	615.2	697.7	(11.8)
Rest of World Retail	152.7	174.2	(12.3)
Wholesale & licensing	153.3	160.2	(4.3)
Group gross margin (%)	42.2	42.0

Reported EBITDA	536.5	551.0	(2.6)
Underlying EBITDA ⁽²⁾	390.8	302.1	29.4

Reported profit before tax	8.5	143.5	(94.1)
Underlying profit before tax (PBT) ⁽²⁾	5.8	117.4	(95.1)

Reported profit after tax	(78.0)	101.0	(177.2)

Reported basic earnings per share	(16.5)p	18.5p	(189.2)
Underlying basic earnings per share (EPS) ⁽²⁾	(17.0)p	16.2p	(204.9)

Underlying free cash flow ⁽³⁾	427.8	263.1	62.6
Net debt ⁽⁴⁾	248.9	366.0	32.0

• Group revenue decreased by 8.4%

• Excluding acquisitions and on a currency neutral basis, revenue decreased by 11.4%⁽⁵⁾

• UK Sports Retail revenue decreased by 10.7%, largely due the temporary store closures caused by the Covid-19 pandemic, offset by growth in our online business and pent up demand on reopening stores

• Excluding acquisitions, revenue decreased by 14.6%⁽⁵⁾, largely caused by temporary store closures caused by the Covid-19 pandemic

• UK Sports Retail like-for-like gross contribution was down 13.4%⁽¹⁾

• Premium Lifestyle revenue increased by 1.9% largely due to growth in our online business, and new store openings

• Excluding acquisitions, revenue increased by 1.4%⁽⁵⁾

• Premium Lifestyle like-for-like gross contribution was down 2.8%⁽¹⁾

• European Retail revenue decreased by 11.8%, largely due the temporary store closures caused by the Covid-19 pandemic

• Excluding acquisitions and on a currency neutral basis, revenue decreased by 20.5%⁽⁵⁾, largely caused by temporary store closures due to the Covid-19 pandemic.

• European Retail like-for-like gross contribution was down 15.0%⁽¹⁾

• Group gross margin increased to 42.2% from 42.0%

• Group reported EBITDA decreased by 2.6% to £536.5m compared to £551.0m in the prior period

• Group underlying EBITDA⁽²⁾ increased by 29.4% to £390.8m compared to £302.1m in the prior period

• Excluding acquisitions and on a currency neutral basis, underlying EBITDA increased 16.9%⁽⁵⁾

• Underlying free cash flow (pre-capex) increased to £427.8m compared to £263.1m in the prior period ⁽³⁾

• Reported profit before tax was £8.5m, down 94.1% from a profit of £143.5m

• Underlying profit before tax⁽²⁾ decreased by 95.1% to £5.8m from £117.4m

• Reported basic earnings per share fell by 189.2% to a loss of 16.5p, from a profit of 18.5p

• Underlying basic earnings per share⁽²⁾ decreased by 204.9% to a loss 17p from a profit of 16.2p ⁽²⁾

• Reported profit after tax⁽²⁾ was a loss of £78.0m down 177.2% from a profit of £101.0m

• Net debt decreased to £248.9m (£366.0m at 26 April 2020)⁽⁴⁾

(1) Figure is on a 52-week currency neutral basis and with a consistent year on year inventory provision used.

(2) Underlying EBITDA, underlying profit before taxation and underlying EPS exclude the effects of IFRS 16, realised foreign exchange gains / losses in selling and administration costs, exceptional costs, and the profit / loss on disposal of subsidiaries, strategic investments and properties. Further detail on this calculation can be found in the financial review, in note 2 and the glossary.

(3) Underlying free cash flow is defined as operating cash flow after working capital and pre IFRS 16, made up of underlying EBITDA plus realised foreign exchange gains and losses, less corporation tax paid. Further detail on this calculation can be found in the financial review.

(4) Net debt is borrowings (excluding IFRS 16 lease liabilities) less cash and cash equivalents held. Further detail can be found in note 12.

(5) A reconciliation of excluding acquisitions and currency neutral performance measures can be found in the glossary.

Mission Statement

To serve our consumers with the world's best sports, premium and luxury brands.

Outlook

The Group is continuing to invest in its physical and digital elevation strategy and our omni-channel offering is growing in strength. Our stores in the UK have reopened above expectations and our online channel continues to significantly outperform pre-Covid-19 periods. None the less, management remains of the view that there is a high risk of future Covid-19 pandemic restrictions, likely to be over this Winter and maybe beyond.

The board of Frasers Group has continued to consider the probable return of restrictions during FY22, including within its accounting judgements and estimates for FY21. As the effects of the Covid-19 pandemic continue to cause future uncertainty, including the Delta variant surge we are currently seeing, the board of Frasers Group considers it cannot currently confirm with enough material accuracy what the outcome for FY22 will look like.

Based on this we will not be giving a projection to the market for FY22 performance. Any projections produced by third parties such as research analysts are not produced on behalf of Frasers Group plc and Frasers Group plc takes no responsibility for such projections. As a result prospective investors and other market participants should not treat, and Frasers Group plc does not intend to treat, the financial projections produced by third parties as indicative of the market expectations of Frasers Group plc's future financial performance. We specifically note that we are under no obligation to correct estimates made by financial analysts or to inform the market should we come to believe that our actual performance will differ from those estimates.

We will review the current situation again at the half year and depending on whether there is more certainty on further restrictions or not we may be able to give guidance at that point.

Frasers Group plc

Mike Ashley, Chief Executive

T: 0344 245 9200

FGPR@frasers.group

STRATEGIC REPORT

Chair's Statement

INTRODUCTION

The Covid-19 pandemic continues to be a significant challenge for the country, the retail industry and for Frasers Group. Our stores were closed again in November 2020, followed by a significant closure in the week before Christmas which then led to the third lockdown in January 2021. These lockdowns resulted in virtually all of our UK stores being closed for approximately six months in FY21. Our European stores were also impacted by closures although the impact was not as punitive as it was for the UK business.

I am proud of how our colleagues have battled through these very difficult times to help us achieve a solid set of financial results on an underlying EBITDA basis. We are a resilient business but the Covid-19 pandemic has resulted in some significant non-cash accounting impairments to our asset base. Our RNS announcements in February and April 2021 gave warning of the situation and consequently we have to report an overall profit before tax of £8.5m down from £143.5m in FY20.

We appreciate the Government support with the furlough scheme and business rates relief. We are predominantly a bricks and mortar business and this support has enabled us to keep stores open that otherwise might have been closed, particularly loss making House of Fraser stores, saving many jobs. We must caution however that the return to pre Covid-19 business rates will present a threat to a number of these stores. There must be a change to the outdated business rates system for us to justify the survival of some of these House of Fraser stores.

We are looking to take on a number of ex-Debenhams stores across the country but the excessive business rates make the viability of these investments, and the jobs that could be created, less likely. Again, we ask for clarity from the Government and for a new and appropriate policy on business rates.

ELEVATION WITHOUT LIMITS

We continue to invest in all areas of the business to support our elevation strategy. Our flagship Sports Direct store on Oxford Street re-opened in June 2021 at a cost of approximately £10m to the Group and we have received overwhelming endorsements from our customers and our brand partners such as Nike and Adidas.

Our Flannels business continues to go from strength to strength since we took full ownership during 2017 and has revenue CAGR from the end of FY18 to FY21 of approximately 40%. We have an ambition to reach approximately £2 billion in gross turnover by the end of FY26, with a forecast split of 60% from physical stores and 40% from online channels.

We will continue to invest across the portfolio of our retail fascias, always pushing the boundaries and thinking without limits. Our investment in our digital capability, including on platforms and people, will continue as will investment in automation in our warehouse to support our bricks and clicks fulfilment capabilities.

The Elevation No Limits strategy is working and we are fully supported by our third-party brands as elevation is complimenting their own strategies.

RESULTS

We do not hesitate to remind our stakeholders of our key accounting principles, namely being conservative, consistent, and simple. It is with this in mind that we present our financial results for FY21 in a period of uncertainty, with in our opinion, the effects of the pandemic far from over, and a probable risk of further restrictions.

Our results highlights are:

· Underlying EBITDA increased to £390.8m (FY20: £302.1m)

· Revenue decreased to £3,625.3m (FY20: £3,957.4m)

· Profit before tax £8.5m (FY20: £143.5m)

· Net debt of £248.9m (FY20: £366.0m)

More underlying detail is given throughout the Annual Report and Accounts. The highlights and explanations of these by segment is set out in note 2.

OUR PEOPLE

Our people are our finest resource and we are committed to treating all of our colleagues with dignity and respect. Throughout the pandemic we have kept colleagues engaged with regular update videos and a provision for help and wellbeing support where people needed it. Frasers Group colleagues are talented, loyal and resilient. I have been very impressed how they have found creative ways of working through the challenges of the pandemic with undiminished enthusiasm. The Board are very appreciative of the efforts of our colleagues during these challenging times.

The Board is really pleased that The Fearless 1000 share scheme was unanimously voted through at the AGM in October 2020 and is now up and running. The Board is receiving regular updates and progress reports and we are comfortable it is running as intended. The aim of the scheme is to pay out significant bonuses in the form of shares if the share price stays above £10 for 30 consecutive trading days. This could see 10 colleagues receiving shares worth £1m each if the share price is at £10 at the vesting dates. One thousand of our Fearless colleagues, who live and breathe our values of thinking without limits, not hesitating and owning it, will be eligible to receive share bonuses ranging from £50k right up to £1m if the share price is at £10 at the vesting dates. There is also a cash bonus scheme which runs concurrently with the share scheme which will pay out bonuses for those eligible colleagues who do not qualify for the Fearless 1000.

The Frasers Group Elevation Programme was introduced in September 2020 to attract highly talented people to Frasers Group. The quality of the recruits from the initial intake has been strong and they have impressed people across all levels of the organisation including the Board. We are looking to run this programme again in September 2021 with a new intake of talent and our assessment centres are now up and running. Our objective is to populate the organisation with high calibre, high potential, well trained people who we intend to be the future leaders of the Company.

ACQUISITIONS AND STRATEGIC INVESTMENTS

During the year we increased our investments in Hugo Boss and Mulberry and we also acquired the DW Sports and Fitness business. These investments are consistent with our strategic objectives and align with our elevation strategy.

As at period end, we held approximately 16.4% directly and indirectly in Hugo Boss. We consider this strategic investment in Hugo Boss to be very successful. We have strengthened our relationship with the company and have regular and constructive dialogue with the senior executive team. We have noted press speculation about a potential acquisition of Hugo Boss and stated we had no intention to bid in our RNS of 26 May 2021.

We held approximately 36.8% of Mulberry Group plc at the year end. We believe this is an iconic British brand and hope that together we can build a mutually beneficial partnership going forward.

We acquired certain assets of DW Sports Limited from administration for a cash consideration of £37m. The transaction complements the existing gym and fitness club portfolio within the Group and is consistent with the Group's elevation strategy. Frasers Group looks forward to elevating the gym and fitness assets and is also pleased to have saved a number of jobs. Further detail on the trade and assets acquired can be found in note 13.

We consider a combination of both organic and acquisitive growth will assist in the ongoing delivery and success of our Elevation Strategy and we will continue to look at potential opportunities across a range of categories to complement and enhance our Group offering, in the UK, Europe and beyond if appropriate.

ENVIRONMENTAL, SOCIAL & GOVERNANCE

We are proud of the successes we have had with our sustainability agenda to date. For instance the majority of our waste from our Shirebrook delivery centre is recycled and we are targeting zero waste to landfill from Shirebrook in the next few years. Excluding acquisitions during the year, our stores and gyms are operating on 100% renewable power and we are targeting a reduction of 10% power usage in our stores over the next few years. Sustainability will continue to play a key role in our future processes and procedures led by our Sustainability Steering Group which is executive sponsored by our Chief Financial Officer.

We are proud to invest in local communities and to support a key facet of British life, the high street. We provide jobs for over 20,000 people in the U.K. alone and during the pandemic we have done our utmost to retain and support as many colleagues as possible with very few redundancies.

During the year we have given approximately £25m in discounts to NHS staff as we reopened in June 2020 in gratitude to the unbelievable job they have done during the Covid-19 pandemic.

Our workers representative Cally Price is a shining example of good corporate governance and we thoroughly recommend the appointment of such a position across the boardrooms of corporate Britain. Cally brings colleague queries and concerns directly to the boardroom for action by the Board. Cally takes a very active part in every Board meeting, which she attends in full, and her vote counts for as much in a Board vote as mine or the executive team. Alongside Cally, the rest of our Non-executive Directors bring their own knowledge and experience to their roles in helping to ensure we do the right thing by our stakeholders.

THE BOARD

We recently went through an independent review of the Board which is a mandatory obligation once every three years. We are very happy with the findings and will act on the recommendations.

We will continue to look at the construction of the Board ensuring we have the appropriate blend of skills and experience. We consider diversity, and energetic and passionate individuals to be priorities as we look to strengthen the Board in the future.

Due to the success of the Worker's Representative Board role we have decided to extend the tenure of Cally Price for a further few years and she will be proposed for re-election at the 2021 AGM.

DIVIDEND AND SHARE BUYBACK

Our share buy back programme has continued which is a demonstration of our confidence in the Company and the strategy for future growth. Further details can be found in Note 14.

No final dividend will be payable in relation to FY21 as we intend to make further investments in the business to support the elevation strategy.

OUTLOOK

The Covid-19 pandemic continues to create uncertainty and we must be prepared for more lockdowns in the future. There must be concerns about the stability of some retailers as Government support schemes come to an end, yet there still seems to be very little tangible long-term action being taken by the Government to save the high street. Notwithstanding the probable risk of further lockdowns, which are considered and do impact our property accounting estimates, Frasers Group is confident in our long-term strategy which we believe will help us to get through this difficult period.

We will continue on the path of elevation and to invest in our talented and loyal colleagues. Our business is built on rock solid foundations and we believe we are well set for some promising times in the future.

David Daly

Non-executive Chair

5 August 2021

Chief Executive's Report And Business Review

KEY PERFORMANCE INDICATORS

The Board manages the Group's performance by reviewing a number of key performance indicators (KPIs). The KPIs are discussed in this Chief Executive's Report and Business Review, the Financial Review, the Environment section and the "Our People" section. The table below summarises the Group's KPIs.

	52 weeks ended 25 April 2021	52 weeks ended 26 April 2020	52 weeks ended 28 April 2019
Group revenue	£3,625.3m	£3,957.4m	£3,701.9m
Underlying EBITDA(1)	£390.8m	£302.1m	£287.8m
Group gross margin	42.2%	42.0%	42.8%
Underlying basic earnings per share(2)	(17.0p)	16.2p	17.6p
Underlying free cash flow ⁽³⁾	427.8	£263.1m	£273.3m
Net debt(4)	£248.9m	£366.0m	£378.5m
NON-FINANCIAL KPIs
Number of retail stores(5)	1,547	1,534	968
Workforce turnover	28.9%	28.6%	23.0%
Packaging recycling(6)	11,164 tonnes	12,358 tonnes	12,807 tonnes

(1) The method for calculating underlying EBITDA is set out the Glossary.

(2) The method for calculating underlying basic earnings per share is set out in the Glossary.

(4) The method for calculating Net debt is set out in the Financial Review.

(5) Excluding associates and stores in the Baltic states that trade under fascias other than SPORTLAND or SPORTSDIRECT.com. and other niche fascias. Includes GAME and Sofa.com concessions.

(6) Cardboard and plastic recycling.

The Directors believe that underlying EBITDA, underlying basic EPS and underlying free cash flow provide further useful information for shareholders on the underlying performance of the business in addition to the reported numbers and are consistent with how business performance has been measured internally. They are not recognised profit measures under IFRS and may not be directly comparable with "adjusted" performance measures used by other companies. See Glossary for further information on the Group's Alternative Performance Measures.

Management will, from FY22, change our main reporting KPI from underlying EBITDA to adjusted profit before tax (PBT). From FY22, the Group will therefore no longer report underlying EBITDA. Adjusted PBT is reported profit before tax less the effects of exceptional items, unhedged foreign exchange (FX), gains and losses on strategic investments and share scheme charges. Management has taken this decision for the following reasons:

- With the continued significant investment in and roll out of our elevation strategy on both the physical and digital fronts, the importance of depreciation and amortisation to both the Board and our stakeholders in terms of assessing performance has grown.

- Our understanding from a number of financial sectors, including the banking sector, is that IFRS16 is becoming an increasingly important consideration.

- With this new measure, we are trying to align with the Financial Reporting Council's thematic standpoint with regard to 'alternative performance measures' as far as possible, whilst retaining a degree of interpretation given that factors outside of our control, such as FX and strategic investments movements which are exceptionally difficult to forecast, particularly months in advance.

Adjusted PBT for the 52 weeks ended 25 April 2021 was a loss of £53.7m. See Glossary for reconciliation to reported PBT.

Group Revenue

The Board considers that this measurement is a key indicator of the Group's growth.

Underlying EBITDA

Underlying EBITDA shows how well the Group is managing its trading and operational efficiency and therefore the overall trading performance of the Group.

Group Gross Margin

The Board considers that this measurement is a key indicator of the Group's trading profitability.

Underlying Basic Earnings Per Share (EPS)

Underlying basic EPS is a measure of adjusted total shareholder return and ultimately an indicator to our shareholders of the success of our elevation strategy.

Underlying Free Cash Flow

Underlying free cash flow is considered an important indicator for the Business of the cash available for investment in the elevation strategy.

Net Debt

Net debt is an indicator of both the Group's investment in the elevation strategy and its covenant headroom which is a key component of the Group's going concern considerations.

Number Of Retail Stores

The Board considers that this measure is an indicator of the Group's growth. The Group's elevation strategy is replacing older stores and often this can result in the closure of two or three stores to be replaced by one larger new generation store.

Workforce Turnover

The Board considers that this measure is a key indicator of the contentment of our people. For more details refer to the retention section of the "Our People" section of this report.

Packaging Recycling

The Board considers that this measurement is a key indicator of our impact and commitment to the best environmental practices. For more details refer to the environment section of this report.

Performance Overview

Group revenue decreased by 8.4% to £3,625.3m in the year. UK Sports Retail decreased by 10.7% to £1,968.5m, Premium Lifestyle revenue increased by 1.9% and European Retail decreased by 11.8% to £615.2m. Rest of World Retail revenue was £152.7m, down 12.3% and revenue in the Wholesale & Licensing division decreased by 4.3%.

Group gross margin in the year was consistent with the prior year with a small increase of 20 basis points from 42.0% to 42.2%. UK Sports Retail margin increased 110 basis points to 42.1% (FY20: 41.0%) largely due to the continually improving product mix. Premium Lifestyle's gross margin decreased by 340 basis points from 48.3% to 44.9% largely due to a reduction in concession sales within House of Fraser as a percentage of total sales which have a higher gross margin. European Retail gross margin increased 60 basis points from 38.4% to 39.0% largely due to the continually improving product mix. Rest of World Retail margin decreased 250 basis points from 44.4% to 41.9%, largely due to the lower margin rate in the US business which makes up a larger proportion of the segment in FY21. Wholesale & Licensing gross margin increased 310 basis points to 44.0% (FY20: 40.9%), largely due to UK wholesale.

Group operating costs decreased by 15.7% to £1,140.0m (FY20: £1,353.0m), largely driven by savings in store costs during the lockdowns as a result of the Covid-19 pandemic, Government support schemes such as CJRS (Coronavirus Job Retention Scheme) and business rates relief particularly in House of Fraser. The amount received by the Group in the period in regard to the CJRS (or equivalent where received in non-UK territories) was approx. £80m. The amount of business rates relief received by the Group in the period (or equivalent where received in non-UK territories) was approx. £97.5m. See the Financial Review for a reconciliation of Group operating costs to selling, distribution and administrative expenses.

As a result, Group underlying EBITDA for the year was up 29.4% to £390.8m (FY20: £302.1m). Excluding acquisitions and on a currency neutral basis, underlying EBITDA increased 16.9%. UK Sports Retail underlying EBITDA was £279.2m up from £227.4m in FY20, while Premium Lifestyle underlying EBITDA was £53.9m, up from £4.5m in FY20. European Retail underlying EBITDA was £4.1m, down from £51.8m in FY20. Rest of World Retail underlying EBITDA was £25.6m, up from a loss of £6.8m in FY20 and Wholesale & Licensing underlying EBITDA increased to £28.0m from £25.2m.

There were property related impairments in the period totalling £317.0m (FY20: £122.6m), including £168.2m in relation to right of use assets (FY20: £97.8m), £84.4m in relation to freehold land and buildings (FY20: £nil), £63.8m of other property, plant and equipment (FY20: £24.8m) and £0.6m of investment properties (FY20: £nil). Property related impairments have been recognised following a re-assessment of future expected cash flows largely driven by anticipated future lockdowns as a result of the Covid-19 pandemic, the change in consumer behaviour in moving from physical to online shopping, the impact of Direct-To-Consumer and increasing costs as a result of Brexit. Further details including sensitivity analysis is included within Note 1.

Depreciation and amortisation charges have increased by 11.3% to £307.5m (FY20: £276.3m) largely due to an increase in freehold land and buildings depreciation, following the change in useful economic life estimate in the period. See the accounting policies within the Annual Report and Accounts for further details.

Group underlying profit before tax ⁽¹⁾ decreased to £5.8m (FY20: £117.4m), largely due to the effects of the Covid-19 pandemic including the closure of retail stores, the associated provisioning and impairment and depreciation and amortisation charges. Underlying basic EPS for the year decreased by 204.9% to a loss of 17.0p (FY20: profit of 16.2p).

Within other comprehensive income, the Group's hedging contracts decreased by £16.5m (FY20: decreased by £18.7m) as a result of the fair value movements in the period. With regard to the Group's long-term financial assets, fair value movements have resulted in a gain of £77.3m (FY20: loss of £19.7m) in the period.

The Group generated free cash flow during the year of £427.8m, up from £263.1m in the prior period. Net debt decreased by £117.1m to £248.9m at period end. Spend on acquisitions and capex, including Wigan Robin Retail Park and warehouse automation, was offset by continued strong cash generation in the core business. Net debt currently stands at 0.5 times reported EBITDA (FY20: 0.7 times).

⁽¹⁾Underlying profit before taxation excludes the effects of IFRS 16, realised foreign exchange gains / losses in selling and administration costs, exceptional items, and the profit / loss on disposal of subsidiaries, strategic investments and properties.

REVIEW BY BUSINESS SEGMENT

UK SPORTS RETAIL

The UK Sports Retail segment includes all of the Group's sports retail and USC store operations in the UK (including Northern Ireland), all of the Group's sports online businesses (excluding Bob's Stores, Eastern Mountain Sports, Baltics and Malaysia), the Group's gyms, Evans Cycles, GAME UK stores and online operations and the Group's Shirebrook campus operations. UK Sports Retail is the main driver of the Group and accounts for 54.3% (FY20: 55.7%) of Group revenue.

	52 weeks ended 25 April 2021 (£'m)	52 weeks ended 26 April 2020 (£'m)
UK Sports Retail Revenue	1,968.5	2,203.3
Cost of Sales	(1,139.2)	(1,300.1)
Gross Profit	829.3	903.2
Gross Margin %	42.1	41.0

Revenue decreased 10.7% to £1,968.5m. Excluding acquisitions, revenue fell 14.6%. This was largely due to the temporary store closures in the UK caused by the Covid-19 pandemic, partially offset by growth in our online business and pent up demand on store reopening.

UK Sports Retail gross margin increased to 42.1% (FY20: 41.0%), largely due to the continually improving product mix. Excluding acquisitions gross margin increased to 45.0% (FY20: 43.5%).

Operating expenses decreased by 16.8% to £548.7m largely driven by savings in store costs during the store closure periods as a result of the Covid-19 pandemic. Excluding acquisitions, operating expenses decreased by 20.2% largely driven by savings in store costs and Government support schemes during lockdowns as a result of the Covid-19 pandemic.

Underlying EBITDA for UK Sports Retail was £279.2m (FY20: £227.4m), an increase of 22.8% for the year, largely due to the strong reopening of stores after lockdowns, growth in our online business and improved operating efficiencies.

UK SPORTS RETAIL STORE PORTFOLIO⁽¹⁾

25 April 2021 26 April 2020
England	394	367
Scotland	39	37
Wales	31	28
Northern Ireland	21	17
Isle of Man	1	1
USC	25	27
Evans Cycles	48	50
GAME UK ⁽²⁾	247	242
Total	806	769

Opened	93	25
Closed	(98)	(53)
Acquired	42	256
Area (sq.ft.)	approx. 6.5m	approx. 6.3m

⁽¹⁾Table excludes the Group's standalone Gyms.

⁽²⁾ The GAME UK store numbers include 71 concessions (FY20: 3) operating within Sports Direct fascia stores and does not include BELONG arenas.

PREMIUM LIFESTYLE

Premium Lifestyle consists of Flannels, Cruise, van mildert, House of Fraser, Jack Wills and Sofa.com fascia stores and corresponding web sales.

	52 weeks ended 25 April 2021 (£'m)	52 weeks ended 26 April 2020 (£'m)
Gross Transaction Value (GTV) ⁽¹⁾	788.1	903.1

Revenue	735.6	722.0
Cost of sales	(405.3)	(373.4)
Gross Profit	330.3	348.6
Gross Margin %	44.9	48.3

⁽¹⁾ GTV being gross sales net of VAT, discounts and returns and gross sales where the Group acts as agent.

Premium Lifestyle sales increased by 1.9% to £735.6m (FY20: £722.0m), mostly due to new Flannels stores and increased web sales. Excluding acquisitions, sales increased 1.4%. The Premium Lifestyle gross margin for the year decreased by 340 basis points to 44.9% (FY20: 48.3%) largely due a reduction in concession sales within House of Fraser as a percentage of total sales which have a higher gross margin.

Premium Lifestyle operating costs decreased by 20.1% to £275.1m (FY20: £344.1m) largely driven by savings in store costs during the store closure periods as a result of the Covid-19 pandemic and Government support schemes such as business rates relief particularly in House of Fraser. As a result, underlying EBITDA improved from £4.5m in FY20 to £53.9m in the year, largely due to Flannels store openings, growth in our online business, continued operating efficiencies and business rates relief particularly in House of Fraser.

PREMIUM LIFESTYLE STORE PORTFOLIO

	25 April 2021	26 April 2020
Flannels	41	37
Cruise	5	5
van mildert	1	1
Jack Wills	60	67
House of Fraser / Frasers	43	48
Sofa.com ⁽¹⁾	24	21
18Montrose	3	-
Garment Quarter	1	-
Psyche	1	-
	179	179

Opened	12	10
Acquired	5	117
Closed	(17)	(42)
Area (sq.ft.)	approx. 4.2m	approx. 4.5m

⁽¹⁾ Sofa.com store numbers include 17 concessions (FY20: 12 concessions) operating within House of Fraser fascia stores.

EUROPEAN RETAIL

The European Retail division includes the Group's sports retail store management and operations in Europe, including the Group's European distribution centres in Belgium and Austria, stores and corresponding web business in the Baltic regions and GAME Spain stores and corresponding web business.

	52 weeks ended 25 April 2021 (£'m)	52 weeks ended 26 April 2020 (£'m)
European Retail Revenue	615.2	697.7
Cost of Sales	(375.5)	(429.8)
Gross Profit	239.7	267.9
Gross Profit %	39.0	38.4

Revenue decreased 11.8% to £615.2m. On a currency neutral basis and excluding acquisitions, European Retail revenue decreased by 20.5% largely due to the temporary store closures caused by the Covid-19 pandemic.

European Retail gross margin increased to 39.0% (FY20: 38.4%) largely due to the continually improving product mix. Excluding acquisitions and on a currency neutral basis, margin is up 100 basis points to 46.3%.

Operating expenses increased by 10.2% to £238.1m (FY20: £216.1m). Excluding acquisitions and on a currency neutral basis operating costs increased by 9.3% largely due to property related provisions including prior year releases as a result of disposals. As a result, underlying EBITDA decreased 92.1% to £4.1m.

All of the following stores are operated by companies wholly owned by the Group, except Estonia, Latvia and Lithuania where the Group owns 60.0%.

EUROPEAN STORE PORTFOLIO (1)

	25 April 2021	26 April 2020
GAME Spain	236	261
Republic of Ireland(2)	39	35
Belgium	34	35
Estonia(1)	21	25
Austria	20	22
Portugal	20	21
Latvia(1)	17	18
Lithuania(1)	18	18
Poland	14	16
Slovenia	13	14
Czech Republic	12	12
Hungary	8	8
Cyprus	6	6
Holland	5	5
Slovakia	5	5
France	4	4
Germany	2	2
Luxembourg	2	2
Spain	9	1
Iceland	1	1
Total	486	511

Opened	13	11
Closed	(38)	(14)
Acquired	-	265
Area (sq.ft.)	approx. 3.6m	approx. 4.0m

(1) Includes only stores with SPORTSDIRECT.com and SPORTLAND fascias

(2) Excluding Heatons fascia stores

REST OF WORLD RETAIL

Rest of World Retail includes sports stores in Malaysia trading under the SPORTS DIRECT fascia, retail stores in the US trading under Bob's Stores and Eastern Mountain Sports and their online businesses. In Malaysia the Group has 33 stores which are 51.0% owned by the Group.

	52 weeks ended 25 April 2021 (£'m)	52 weeks ended 26 April 2020 (£'m)
Rest of World Revenue	152.7	174.2
Cost of sales	(88.7)	(96.9)
Gross Profit	64.0	77.3
Gross Margin %	41.9	44.4

Rest of World Retail sales were £152.7m for the year. Gross margin was 41.9%, down from 44.4% in the prior year, largely due to the lower margin rate in the US business which makes up a larger proportion of the segment in FY21. Underlying EBITDA was £25.6m, from a loss of £6.8m in FY20. This was largely due to operating efficiencies in the US business.

REST OF WORLD STORE PORTFOLIO

	25 April 2021	26 April 2020
Malaysia	33	31
Bob's Stores	22	24
Eastern Mountain Sports	21	20
	76	75
Area (sq.ft.)	approx. 1.3m	approx. 1.3m

WHOLESALE & LICENSING

The portfolio of Group brands includes a wide variety of world-famous sport and lifestyle brands. The Group's Sports Retail division sells products under these brands in its stores, and the Wholesale & Licensing division sells the brands through its wholesale and licensing activities. The Wholesale & Licensing division continues to sponsor a variety of prestigious events and retains a variety of globally recognised celebrities and sporting professionals as brand ambassadors.

	52 weeks ended 25 April 2021 (£'m)	52 weeks ended 26 April 2020 (£'m)
Wholesale	131.5	134.4
Licensing	21.8	25.8
Total Revenue	153.3	160.2
Cost of Sales	(85.8)	(94.7)
Gross Profit	67.5	65.5
Gross Margin %	44.1	40.9

Wholesale & Licensing total revenue decreased by 4.3% to £153.3m (FY20: £160.2m).

Wholesale revenues were down 2.2% to £131.5m (FY20: £134.4m), due to reductions in UK wholesale activity offset by an increase in the US. Total gross margin increased by 320 basis points to 44.1% (FY20: 40.9%). Wholesale gross margins increased 430 basis points to 33.6% (FY20: 29.5%), largely due to UK wholesale.

Licensing revenues in the year were down 15.5% to £21.8m (FY20: £25.8m).

Operating costs decreased by 2.2% to £39.4m (FY20: £40.3m). As a result, underlying EBITDA increased by 11.1% to £28.0m (FY20: £25.2m).

PROPERTY REVIEW

The store elevation program remains a key focus point for the Group across all fascias and territories. For Sports Direct, the new stores continue to push boundaries as demonstrated by the opening of the new Portsmouth Sports Direct store incorporating a USC, Evans and Game, as well as Belong gaming arena. Further to this, shortly after financial year end the newly refurbished London, Oxford Street flagship opened featuring world class design incorporating new activation spaces, technology and features including a first in kind bra fitting studio. In Europe, the portfolio of six Toys R Us properties acquired during FY20 in Spain have now been developed launching as elevated Sports Direct stores in the same format as the UK.

A significant milestone for the Group was delivering the new Frasers concept with the opening of Frasers Wolverhampton, another example of the continued store elevation programme. The opening of such stores demonstrates the Group's commitment to physical retail and ability to create genuine retail destinations.

Flannels remains an important fascia for the Group. The key focus has been the development of the Regional Flagship concept introducing new categories for the fascia such as beauty, food & beverage and active. Terms have been agreed to launch this new concept at Meadowhall Shopping Centre which is set to open in the coming financial year. Further sites for this concept are also due to open at Fosse Park in Leicester and Liverpool city centre.

Another notable event in FY21 was the acquisition of 42 DW Stores. The acquisition enhanced the Group's gym and UK Sports Retail estate. A refurbishment and rebranding exercised commenced shortly after acquisition and will continue into the coming financial year.

The primary objective for the estate continues to be the transition to turnover based rents. The Group is highly acquisitive across fascias and with co-operative landlords can offer a portfolio of new store deals providing a variety of retail offerings. The Group is prepared to sign long term leases for those landlords willing to co-invest in the elevated store concepts.

With leasehold activity across the Group expected to increase over the coming year, the same is likely to apply with freehold acquisitions as we capitalise on favourable market conditions coupled with the Group's growing requirement for retail space.

Store Portfolio - UK Retail

Sports Stores in the UK (including Northern Ireland):

· The Group is currently operating from 394 stores in England, 39 in Scotland, 31 in Wales and 21 in Northern Ireland. There were 14 openings and 20 closures for Sports Direct fascia stores over the period. 42 stores were acquired as part of the acquisition of DW Sports comprising a number of 'combined' sites with retail and leisure. Six of the store closures were sites acquired as part of this acquisition where agreements could not be reached with landlords resulting in 33 'combined' and 3 stand-alone Sports Direct stores as additions in the period. 13 of the remaining 14 closures occurred due to relocations into elevated multi-fascia stores.

· Noteworthy openings include Portsmouth, Birmingham Fort, Scunthorpe and Wrexham where existing Sports Direct stores were closed to relocate into an elevated multi-format store.

· All new store openings include a USC lifestyle offering as part of the elevated store model across all formats. As mentioned previously, both a GAME and Evans Cycles concept has been developed to form part of the elevated Sports Direct format in selected locations. Over the coming financial period there will be a push towards more multi-fascia store openings incorporating each of these fascias.

Evans Cycles:

· There are currently 48 Evans Cycle stores operating, a reduction of two stores over the period. During FY21 the Evans Cycles concept was first introduced as a store-in-store area in our latest Portsmouth multi-fascia store alongside Sports Direct, USC, Game & Belong. This concept will continue to be developed to roll out into selected future store openings.

Game UK:

· Over the period, the relocation programme moving Game into selected Sports Direct stores was accelerated. Coupled with the new Sports Direct store openings featuring an area for Game, the overall number of stores for the UK estate increased to 247 having closed 67 and opening 72 (net increase of 5 stores).

· The Belong gaming arenas are building their presence across the UK featuring in a number of the new Sports Direct openings such as Portsmouth.

Store Portfolio - Premium Lifestyle

Flannels, Cruise And Van Mildert:

· Across Flannels, Cruise and van mildert during FY21 there were 6 openings and 2 closures, resulting in a net increase of 4 stores. Combining these fascias, the total estate amounts to 47 stores.

· Key openings for Flannels include Rushden Lakes, Kingston Upon Thames and Wolverhampton. The Glasgow Cruise store was also extensively refurbished and expanded.

· A major area of development has been the Flannels Regional Flagship concept, incorporating new categories such as beauty, food & beverage and active. The first regional flagship to open will be Flannels Meadowhall which will extend to approximately 55,000 sqft with further locations to follow over the coming financial year including Fosse Park in Leicester and Liverpool city centre.

House of Fraser:

· At the end of FY21 there were 43 House of Fraser stores trading, a net decrease of 5 stores after 6 closures and 1 opening.

· A key highlight was the delivery of the new 'Frasers' store concept at Wolverhampton. This new store showcases the elevated format and what can be provided upon agreeing appropriate new long term lease deals.

· Much of the estate continues to remain on short term flexible leases. Whilst negotiations are ongoing to transition stores to long term leases it is anticipated that there will be further closures, particularly as business rates come back into effect in FY22.

· However following the demise of major high street retail chains we envisage new location opportunities to come to fruition over the coming financial period, albeit again punitive business rates at many of these locations put the viability of doing these lease deals in doubt.

Jack Wills:

· Over FY21 there were 7 store closures and no openings reducing the estate to 60 stores. We continue to negotiate with landlords to move to long term leases.

· A new store concept is under development with the ambition to open in new key markets across the UK. The new concept is intended to be finalised over FY22.

Forecast Openings UK FY22:

· Over FY21, despite the challenges faced relating to the Covid-19 pandemic the Group continued the elevated store roll out programme. For the coming financial year the Group's ambition is to increase the new store activity across fascias, with a particular focus on Sports Direct and Flannels. Key new stores include the new Flannels Regional Flagships along with new Sports Direct flagships such as Birmingham city centre. However, it should be noted that program risk remains relating to factors linked to the Covid-19 pandemic.

Store Portfolio - European Retail:

Republic Of Ireland (ROI):

· Over FY21 the remaining Heatons store conversions to include Sports Direct were completed.

· There was one opening in the year, with 39 stores at the period end. Shortly after the year end a new store in Galway opened, a first for the Group in that market.

· The intention for the coming financial year is to increase the store estate across ROI, this has been bolstered by the increasing number of new location opportunities now being presented. In certain locations other Group fascias not currently trading in the ROI are being considered.

Continental Europe:

· The Group continues to operate sports stores in 18 countries in continental Europe:

· 211 Sports retail stores in Europe, excluding Republic of Ireland (plus 26 non-core, speciality and outlets).

· Total sq.ft. of approximately 2.7m of all sports fascias in Europe (including Sportland, Lillywhites, Sportsworld etc).

· Closed 25 GAME stores in Spain during the period as part of rationalising the estate and removing duplication finishing the period on 236 stores.

· Twelve openings in four different countries, three of which were relocations.

· 10 closures in seven different countries with a mixture of closing non-performing stores and closures linked to relocations. The 1 Austrian store closure was due to a sale of our freehold property in Salzburg.

· During the period 8 Sports Direct stores incorporating a USC were opened during the period totalling 117,165 sq ft of retail space. 5 of these were freeholds purchased in FY20 that have been refurbished and opened as elevated Sports Direct stores. A further freehold store opened in Malaga shortly after FY21.

· As is the case in the UK, the Group is firmly committed to the rollout of elevated stores across Europe. Due to the accelerated shift to online experienced across Europe due to the effects of the Covid-19 pandemic and a number of retailers reducing their portfolio size. The Group believes it can capitalise on these market conditions to efficiently expand our physical estate, focusing on capital city and flagship opportunities.

Store Portfolio - Rest of The World:

· 33 stores in Malaysia with three openings and one closure in FY21. The closure was a Tesco based store leaving us with three as we continue to relocate our stores to higher performance locations.

· The Malaysian elevation and expansion drive continues, with 2 new elevated stores opened in the period. We now have a total of seven elevated stores in the region in line with UK standards and four stores with a USC retail area.

· As a major milestone our flagship ASEAN HQ opened in FY21 in the Sunway Pyramid shopping centre with the adjoining retail store opening shortly.

· 43 stores in the USA, following two closures and one opening in FY21.

Freehold / Long Leasehold Property:

· Over FY21 a total of 14 properties were acquired across the UK totalling £84.3m. The most significant purchase was Robin Retail Park in Wigan for £41.8m. No properties were acquired in Europe or RoW.

· Disposal of property assets continues to be standard practice for the Group. During the period 4 disposals completed in the UK and 3 disposals completed in the EU.

· For the upcoming financial period it is anticipated that there will be an increase in acquisition activity as we capitalise on favourable market conditions coupled with the groups growing requirement for retail space. Disposals will continue as has been the case in previous financial years.

Mike Ashley

Chief Executive

5 August 2021

FINANCIAL REVIEW

The Financial Statements for the Group for the 52 weeks ended 25 April 2021 are presented in accordance with International Financial Reporting Standards (IFRS).

SUMMARY OF RESULTS

	52 weeks ended 25 April 2021 (£'m)	52 weeks ended 26 April 2020 (£'m)
Revenue	3,625.3	3,957.4
Reported EBITDA	536.5	551.0
Underlying EBITDA	390.8	302.1
Reported profit before tax	8.5	143.5
Underlying profit before tax	5.8	117.4
Earnings per share (EPS)	Pence per share	Pence per share
Reported basic EPS	(16.5)	18.5
Underlying basic EPS	(17.0)	16.2

EBITDA is earnings before investment income and investment costs, finance income and finance costs, tax, depreciation, amortisation and impairment. It includes the Group's share of losses from associated undertakings and joint ventures. Underlying EBITDA is calculated as EBITDA before the effects of IFRS 16, realised foreign exchange gains / losses in selling and administration costs, profit / loss on disposal of subsidiaries, strategic investments and properties.

GROUP OPERATING COSTS

	52 weeks ended 25 April 2021 (£'m)	52 weeks ended 26 April 2020 (£'m)
Group operating costs	1,140.0	1,353.0
Depreciation and amortisation	225.4	145.3
Intangible impairment	-	5.9
IFRS 16 depreciation	82.1	122.6
IFRS 16 disposal and modification/remeasurement of lease liabilities	(27.7)	(9.7)
IFRS 16 reversal of rent expense	(127.3)	(137.5)
IFRS 16 reversal of onerous lease provision	(36.6)	(35.5)
Realised FX loss/(gain)	26.3	(34.9)
Operating income	36.8	32.5
Selling, distribution and administration costs	1,319.0	1,441.7

Group operating costs for the purposes of management reporting:

i. Excludes depreciation, amortisation and impairments of property, plant and equipment, intangible assets and realised FX gains and losses; and

ii. Includes other operating income.

FOREIGN EXCHANGE AND TREASURY

The Group reports its results in GBP but trades internationally and is therefore exposed to currency fluctuations on currency cash flows in various ways. These include purchasing inventory from overseas suppliers, making sales in currencies other than GBP and holding overseas assets in other currencies. The Board mitigate the cash flow risks associated with these fluctuations with the careful use of currency hedging using forward contracts and other derivative financial instruments.

The Group uses forward contracts that qualify for hedge accounting in two main ways - to hedge highly probable EUR salesincome

and USD inventory purchases. This introduces a level of certainty into the Group's planning and forecasting process. Management

has reviewed detailed forecasts and the growth assumptions within them and is satisfied that the forecasts meet the criteria as being highly probable forecast transactions.

As at 25 April 2021 and as detailed in note 29c of the Annual Report and Accounts the Group had the following forward contracts that qualified for hedge accounting under IFRS 9 Financial Instruments, meaning that fluctuations in the value of the contracts before maturity are recognised in the Hedging Reserve through Other Comprehensive Income. After maturity, the sales and purchases are then valued at the hedge rate.

Currency	Hedging against	Currency value	Timing	Rates
USD / GBP	USD inventory purchases	USD 720m	FY22 - FY23	1.36 - 1.41
USD / EUR	USD inventory purchases	USD 120m	FY22, FY24	1.21 - 1.31
EUR / GBP	Euro sales	EUR 240m	FY23	0.99

The Group also uses currency options, swaps and spots for more flexibility against cash flows that are less than highly probable and therefore do not qualify for hedge accounting under IFRS9 Financial Instruments. The fair value movements before maturity are recognised in the Income Statement.

The Group has the following currency options and unhedged forwards:

Currency	Expected use	Currency value	Timing	Rates
EUR / GBP	Euro sales	EUR 380m	FY23	0.99

The Group is proactive in managing its currency requirements. The Treasury team works closely with senior management to understand the Group's plans and forecasts, and discusses and understands appropriate financial products with various financial institutions, including those within the Group Revolving Credit Facility (RCF). This information is then used to implement suitable currency products to align with the Group's strategy.

Regular reviews of the hedging performance are performed by the Treasury team alongside senior management to ensure the continued appropriateness of the currency hedging in place, and where suitable, either implementing additional strategies and / or restructure existing approaches in conjunction with our financial institution partners.

Given the potential impact of commodity prices on raw material costs, the Group may hedge certain input costs, including cotton, crude oil and electricity.

TAXATION

The effective tax rate on profit before tax in FY21 was 1017.6% (FY20: 29.6%). This reflects the impact of the increase in property impairments and disallowable depreciation.

EARNINGS

	52 weeks ended 25 April 2021	52 weeks ended 26 April 2020	Change (%)
Reported EPS (Basic)	(16.5)	18.5	(189.2)
Underlying EPS (Basic) ⁽¹⁾	(17.0)	16.2	(204.9)
Weighted average number of shares (actual)	501,955,281	505,826,890

Basic earnings per share (EPS) is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the financial period. Shares held in Treasury and the Employee Benefit Trust are excluded from this figure.

⁽¹⁾The underlying basic EPS reflects the underlying performance of the business compared with the prior period and is calculated using the weighted average number of shares. It is not a recognised profit measure under IFRS and may not be directly comparable with "adjusted" performance measures used by other companies. Further details can be found in the Glossary.

DIVIDENDS

The Board has decided not to pay a final dividend in relation to FY21 (FY20 £nil). The Board remains of the opinion that it is in the best interests of the Group and its shareholders to preserve financial flexibility and facilitate future investments and other growth opportunities. The payment of dividends remains under review.

CAPITAL EXPENDITURE

During the period, gross capital expenditure (excluding IFRS 16) amounted to £219.4m (FY20: £323.5m), which included £84.3m on freehold properties (FY20: £177.2m) and £48.5m on warehouse automation (FY20: £31.1m).

STRATEGIC INVESTMENTS

The Group continues to hold various strategic investments as detailed in Note 11. In addition the Group also holds indirect strategic investments within contracts for difference and options.

The fair values of the contracts for difference and options are recognised in Derivative Financial Assets or Liabilities on the Group Balance Sheet, with the movement in fair value recorded in the Income Statement.

ACQUISITIONS

On 22 August 2020, the Group acquired the trade and assets of DW Sports for cash consideration of £37.0m which is deemed to be the fair value of the consideration. The acquisition complements the Group's existing gym and fitness club portfolio and is consistent with the Group's elevation strategy. Goodwill represents the premium associated with advantageous site locations, potential growth opportunities offered by economies of scale, and the assembled workforce. The fair value adjustment to property, plant and equipment relates to the management's assessment of the price that would be paid for the acquired assets in an orderly transaction between market participants at the acquisition date. The leases were acquired under short-term licences and therefore no right-of-use asset or lease liability has been recognised on acquisition.

During the year the Group acquired the entire share capital of Psyche Holdings Limited, the entire share capital of GRMNT Limited, and the trade and assets of 18 Montrose for consideration of £2.7m. These acquisitions will provide increased product offerings in the 'Premium Lifestyle' division. The fair value adjustment to property, plant and equipment relates to the recognition of right-of-use assets and lease liabilities.

RELATED PARTIES

MM Prop Consultancy Limited, a company owned and controlled by Michael Murray, who is a member of key management personnel as per IAS 24, continues to provide property consultancy services to the Group. MM Prop Consultancy Limited is primarily tasked with finding and negotiating the acquisition of new sites in the UK, Europe and Rest of the World for both our larger format stores and our combined retail and gym units. It also provides advice to the Company's in-house property team in relation to existing sites in the UK, Europe and Rest of the World.

In the year all properties are assessed. Those that are considered by the Group's independent Non-executive Directors to have completed development and be eligible for review at the year-end are assessed and if required valued by an independent valuer who confirms the value created by MM Prop Consultancy Limited. The Group's independent Non-executive Directors then review and agree the value created and have full discretion to approve a payment to MM Prop Consultancy Limited of up to 25% of the value created. There is a current pipeline of properties that may be eligible to be assessed both positively and negatively by the Group's Non-executive Directors in future years.

In the current year £2.5m has been accrued based on 25% of the value created on two properties where the gain has crystallised through contract exchange or completion of sale (FY20 - £nil provided and £nil paid, MM Prop Consultancy Limited was last paid in relation to FY19). This is payable to MM Prop Consultancy Limited and agreed by the independent Non-Executive Directors.

During the period the Group entered into an agreement with M.P.M Elevation Limited, a company owned and controlled by Michael Murray in relation to elevation strategy services. M.P.M Elevation Limited will be paid an annual fee of £0.1m in relation to the provision of the elevation strategy services.

Other related parties are disclosed in note 34 of the Annual Report and Accounts.

CASH FLOW AND NET DEBT

Net debt decreased by £117.1m from £366.0m at 26 April 2020 to £248.9m at 25 April 2021. Interest on bank loans and overdrafts decreased to £11.2m (FY20: £17.8m) largely due to reduced usage of the RCF in the period.

The analysis of net debt at 25 April 2021 and at 26 April 2020 was as follows:

	25 April 2021 (£'m)	26 April 2020 (£'m)
Cash and cash equivalents	457.0	534.0
Borrowings	(705.9)	(900.0)
Net debt	(248.9)	(366.0)

The Group's Working Capital Facility is £913.5m (FY20: £913.5m). It is available until November 2021 and is not secured against any of the Group's assets. £847.5m of the facility is due to expire in November 2022.

The Group continues to operate well within its banking covenants and the Board remains comfortable with the Group's available headroom. Note: due to the timing of payroll and supplier payments, net debt at calendar period end 30 April 2021 was approximately £350.0m (FY20: approximately £408.0m).

CASH FLOW

The total movement was follows:

	52 weeks ended 25 April 2021 (£'m) ⁽¹⁾	52 weeks ended 26 April 2020 (£'m) ⁽¹⁾
Underlying EBITDA	390.8	302.1
Realised FX (gain) loss	(26.3)	34.8
Taxes paid	(59.3)	(48.5)
Movement in inventory	99.3	(120.8)
Working capital and other	23.3	95.5
Underlying free cash flow after working capital	427.8	263.1
Invested in:
Purchase of own shares	(4.3)	(43.9)
Dividend paid to non-controlling interest	(0.9)	-
Purchase of subsidiaries, net of cash acquired	(39.4)	(7.3)
Purchase of listed investments	(113.3)	(24.8)
Purchase of intangibles	(1.0)	-
Purchase of associates	-	(5.6)
Proceeds on disposal of investments and derivatives	55.1	4.9
Proceeds on disposal of intangibles	7.5	-
Net capital expenditure	(198.8)	(170.9)
Exchange movement on cash balances	(5.3)	5.0
Investment income received	0.5	0.5
Finance income received less finance costs paid	(10.8)	(8.5)
Decrease in net debt	117.1	12.5

⁽¹⁾ This table excludes the impact of IFRS16.

BALANCE SHEET

Significant balance sheet items are shown below:

	25 April 2021 (£'m)	26 April 2020 (£'m)
Property, plant and equipment	915.2	1,041.9
Right of use assets	249.7	305.7
Long-term financial assets	263.3	83.8
Inventory	1,096.6	1,198.3
Trade and other receivables	546.5	414.2
Provisions	(361.2)	(336.0)
Trade and other payables	(646.3)	(602.5)
Lease liabilities	(722.7)	(624.1)

The majority of the decrease in property, plant and equipment relates to the impairments of freehold land and building and plant and equipment due to the Covid-19 pandemic and factors such as changes in consumer behaviour.

IFRS 16 right of use assets have decreased largely due to impairments. Lease liabilities have increased largely due to remeasurements during the period.

Long-term financial assets have increased during the period due to the additions of Hugo Boss AG and Mulberry Group plc.

Inventory has decreased largely due to a reduction in inventories held within the Rest of World segment.

Receivables includes a £118.3m reimbursement asset in relation to the Group's ongoing non-UK tax enquiries (FY20: £118.3m) and £131.0m relating to deposits in respect of derivative financial instruments (FY20: £71.3m) with the increase mainly relating to Hugo Boss.

Provisions have increased mainly due to an increase in property provisions as a result of the Covid-19 pandemic.

Payables have increased largely due to rent payments under negotiation as a result of the Covid-19 pandemic.

COMPANY BALANCE SHEET

Significant balance sheet items are shown below:

	25 April 2021 (£'m)	26 April 2020 (£'m)
Investments	1,494.9	1,235.8
Debtors	166.6	86.8
Creditors: amounts falling due within one year	(609.0)	(901.5)

Investments relates to investments in subsidiaries and long-term financial assets. The majority of the increase relates to additions due to a reorganisation of our US businesses and purchases of physical shares in Mulberry Group plc and Hugo Boss AG.

The majority of the movement in debtors relates to an increase in collateral to cover margin requirements for derivative transactions held with counterparties.

Creditors relates to amounts owed to Group undertakings, the decrease relates to subsidiary dividends declared during the period.

Chris Wootton

Chief Financial Officer

5 August 2021

CONSOLIDATED INCOME STATEMENT

For the 52 weeks ended 25 April 2021

		52 weeks ended	52 weeks ended
	Note	25 April 2021	26 April 2020
		(£'m)	(£'m)
Revenue	2	3,625.3	3,957.4
Cost of sales		(2,094.5)	(2,294.8)
Gross profit		1,530.8	1,662.6
Selling, distribution and administrative expenses		(1,319.0)	(1,441.7)
Other operating income		36.8	32.5
Property related impairments ⁽¹⁾	10	(317.0)	(122.6)
Exceptional items	3	(1.6)	(13.1)
Profit on sale of properties		9.7	54.2
Operating (loss)/profit	2	(60.3)	171.9
Investment income	4	103.7	15.2
Investment costs	5	(7.7)	(49.8)
Finance income	6	9.0	31.0
Finance cost	7	(36.2)	(29.3)
Share of loss of associated undertakings		-	(15.9)
Fair value gain on step acquisition		-	20.4
Profit before taxation		8.5	143.5
Taxation	8	(86.5)	(42.5)
(Loss)/profit for the period	2	(78.0)	101.0

ATTRIBUTABLE TO:
Equity holders of the Group		(83.0)	93.8
Non-controlling interests		5.0	7.2
(Loss)/profit for the period	2	(78.0)	101.0

EARNING PER SHARE ATTRIBUTABLE TO THE EQUITY SHAREHOLDERS
		Pence per share	Pence per share

Basic earnings per share	9	(16.5)	18.5
Diluted earnings per share	9	(16.5)	18.5

(1) Property related impairments of £317.0m have been separately presented for the year ended 25 April 2021. The prior year comparative of £122.6m which was previously included within Selling, distribution and administrative expenses in the FY20 Annual Report has been represented to be comparable.

The Consolidated Income Statement has been prepared on the basis that all operations are continuing.

The accompanying accounting policies and notes form part of these financial statements.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the 52 weeks ended 25 April 2021

		52 weeks ended	52 weeks ended
	Note	25 April 2021	26 April 2020
		(£'m)	(£'m)
(Loss)/profit for the period	2	(78.0)	101.0

OTHER COMPREHENSIVE INCOME
ITEMS THAT WILL NOT BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS
Fair value movement on long-term financial assets		77.3	(19.7)

ITEMS THAT WILL BE RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS
Exchange differences on translation of foreign operations		(49.1)	9.8
Fair value movement on hedged contracts - recognised in the period		0.4	16.4
Fair value movement on hedged contracts - ineffectiveness		-	0.2
Fair value movement on hedged contracts - reclassified and reported in sales		(2.8)	(1.7)
Fair value movement on hedged contracts - reclassified and reported in cost of sales		(17.1)	(37.4)
Fair value movement on hedged contracts - taxation taken to reserves		3.0	3.8


OTHER COMPREHENSIVE INCOME/(LOSS) FOR THE PERIOD, NET OF TAX		11.7	(28.6)

TOTAL COMPREHENSIVE (LOSS)/INCOME FOR THE PERIOD		(66.3)	72.4

ATTRIBUTABLE TO:
Equity holders of the group		(71.3)	65.2
Non-controlling interest		5.0	7.2
		(66.3)	72.4

The accompanying accounting policies and notes form part of these financial statements.

CONSOLIDATED BALANCE SHEET

At 25 April 2021

	Note	25 April 2021	26 April 2020
		(£'m)	(£'m)
ASSETS - NON CURRENT
Property, plant and equipment	10	1,164.9	1,347.6
Investment properties		14.1	18.9
Intangible assets		120.5	143.4
Long-term financial assets		263.3	83.8
Deferred tax assets		66.8	49.9
		1,629.6	1,643.6
ASSETS - CURRENT
Inventories		1,096.6	1,198.3
Trade and other receivables		546.5	414.2
Derivative financial assets		55.4	78.1
Cash and cash equivalents		457.0	534.0
		2,155.5	2,224.6
TOTAL ASSETS		3,785.1	3,868.2

EQUITY
Share capital		64.1	64.1
Share premium		874.3	874.3
Treasury shares reserve		(295.7)	(295.7)
Permanent contribution to capital		0.1	0.1
Capital redemption reserve		8.0	8.0
Foreign currency translation reserve		28.8	77.9
Reverse combination reserve		(987.3)	(987.3)
Own share reserve		(66.7)	(67.0)
Hedging reserve		11.5	28.0
Share based payment reserve		1.3	-
Retained earnings		1,554.5	1,564.9
Issued capital and reserves attributable to owners of the parent		1,192.9	1,267.3
Non-controlling interests		18.1	13.0
TOTAL EQUITY		1,211.0	1,280.3

LIABILITIES - NON CURRENT
Lease liability	12	534.2	476.2
Borrowings	12	705.9	900.0
Retirement benefit obligations		1.9	1.9
Deferred tax liabilities		27.0	25.6
Provisions		361.2	336.0
		1,630.2	1,739.7
LIABILITIES - CURRENT
Derivative financial liability		19.2	44.2
Trade and other payables		646.3	602.5
Lease liability	12	188.5	147.9
Current tax liabilities		89.9	53.6
		943.9	848.2

TOTAL LIABILITIES		2,574.1	2,587.9
TOTAL EQUITY AND LIABILITIES		3,785.1	3,868.2

The accompanying accounting policies and notes form part of these Financial Statements. The Financial Statements were approved by the Board on 5 August 2021 and were signed on its behalf by:

Chris Wootton

Chief Financial Officer

Company number: 06035106

CONSOLIDATED CASH FLOW STATEMENT

For the 52 weeks ended 25 April 2021

		52 weeks ended	52 weeks ended
	Note	25 April 2021	26 April 2020
		(£'m)	(£'m)
Cash inflows from operating activities		578.3	425.2
Income taxes paid		(59.3)	(48.5)
Net cash inflows from operating activities		519.0	376.7
Proceeds on disposal of property, plant and equipment and investment property		20.6	152.6
Proceeds on disposal of intangibles assets		7.5	-
Proceeds on disposal of listed investments and derivatives		55.1	4.9
Purchase of associates		-	(5.6)
Purchase of subsidiaries, net of cash acquired	13	(39.4)	(7.3)
Purchase of property, plant and equipment		(219.4)	(323.5)
Purchase of intangible assets		(1.0)	-
Purchase of listed investments		(113.3)	(24.8)
Investment income received		0.5	0.5
Finance income received		9.0	9.8
Net cash outflows from investing activities		(280.4)	(193.4)
Lease payments		(78.0)	(113.6)
Finance costs paid		(31.6)	(18.3)
Borrowings drawn down	12	1,128.1	510.0
Borrowings repaid	12	(1,323.6)	(436.5)
Dividends paid to non-controlling interests		(0.9)	-
Purchase of own shares		(4.3)	(43.9)
Net cash outflows from financing activities		(310.3)	(102.3)

Net (decrease)/increase in cash and cash equivalents including overdrafts		(71.7)	81.0
Exchange movement on cash balances		(5.3)	5.0
Cash and cash equivalents including overdrafts at beginning of period		534.0	448.0
Cash and cash equivalents including overdrafts at the period end		457.0	534.0

The accompanying accounting policies and notes form part of these Financial Statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the 52 weeks ended 25 April 2021

	Share capital	Share premium⁽¹⁾	Treasury shares	Share scheme reserve	Foreign currency translation	Own share reserve	Retained earnings	Other⁽²⁾	Total attributable to owners of parent	Non-controlling interests	Total
	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)
At 29 April 2019	64.1	874.3	(281.7)	-	68.1	(67.2)	1,490.8	(932.5)	1,215.9	5.8	1,221.7
Purchase of own shares	-	-	(44.0)	-	-	0.2	-	-	(43.8)	-	(43.8)
Reversal of FY19 fair valuation of share buyback contractual obligation	-	-	30.0	-	-	-	-	-	30.0	-	30.0
Transactions with owners in their capacity as owners	-	-	(14.0)	-	-	0.2	-	-	(13.8)	-	(13.8)
Profit for the financial period	-	-	-	-	-	-	93.8		93.8	7.2	101.0
OTHER COMPREHENSIVE INCOME
Cash flow hedges - recognised in the period	-	-	-	-	-	-	-	16.4	16.4	-	16.4
Cash flow hedges - ineffectiveness	-	-	-	-	-	-	-	0.2	0.2	-	0.2
Cash flow hedges - reclassified and reported in sales	-	-	-	-	-	-	-	(1.7)	(1.7)	-	(1.7)
Cash flow hedges - reclassified and reported in cost of sales	-	-	-	-	-	-	-	(37.4)	(37.4)	-	(37.4)
Cash flow hedges - taxation	-	-	-	-	-	-	-	3.8	3.8	-	3.8
Fair value adjustment in respect of long term financial assets - recognised	-	-	-	-	-	-	(19.7)	-	(19.7)	-	(19.7)
Translation differences - Group	-	-	-	-	9.8	-	-	-	9.8	-	9.8
Total comprehensive income for the period	-	-	-	-	9.8	-	74.1	(18.7)	65.2	7.2	72.4

At 26 April 2020	64.1	874.3	(295.7)	-	77.9	(67.0)	1,564.9	(951.2)	1,267.3	13.0	1,280.3
Acquisitions (note 13)	-	-	-	-	-	-	-	-	-	1.0	1.0
Share scheme	-	-	-	1.3	-	0.3	(4.7)	-	(3.1)	-	(3.1)
Dividends paid to non-controlling interests	-	-	-	-	-	-	-	-	-	(0.9)	(0.9)
Transactions with owners in their capacity as owners	-	-	-	1.3	-	0.3	(4.7)	-	(3.1)	0.1	(3.0)
(Loss)/profit for the financial period	-	-	-	-	-	-	(83.0)	-	(83.0)	5.0	(78.0)
OTHER COMPREHENSIVE INCOME
Cashflow hedges - recognised in the period	-	-	-	-	-	-	-	0.4	0.4	-	0.4
Cashflow hedges - reclassified and reported in sales	-	-	-	-	-	-	-	(2.8)	(2.8)	-	(2.8)
Cashflow hedges - reclassified and reported in cost of sales	-	-	-	-	-	-	-	(17.1)	(17.1)	-	(17.1)
Cashflow hedges - taxation	-	-	-	-	-	-	-	3.0	3.0	-	3.0
Fair value adjustment in respect of long-term financial assets - recognised	-	-	-	-	-	-	77.3	-	77.3	-	77.3
Translation differences - Group	-	-	-	-	(49.1)	-	-	-	(49.1)	-	(49.1)
Total comprehensive loss for the period	-	-	-	-	(49.1)	-	(5.7)	(16.5)	(71.3)	5.0	(66.3)
At 25 April 2021	64.1	874.3	(295.7)	1.3	28.8	(66.7)	1,554.5	(967.7)	1,192.9	18.1	1,211.0

^{(1) The share premium account is used to record the excess proceeds over nominal value on the issue of shares.}

^{(2) Other reserves comprises permanent contribution to capital, capital redemption reserve, reverse combination reserve and the hedging reserve. All movements in the period related to the hedging reserve (note 25 of the Annual Report and Accounts).}

The accompanying accounting policies and notes form part of these Financial Statements.

NOTES TO THE FINANCIAL STATEMENTS

For the 52 weeks ended 25 April 2021

1. ACCOUNTING POLICIES

Frasers Group Plc (Company number: 06035106) is a company incorporated and domiciled in the United Kingdom, its shares are listed on the London Stock Exchange. The registered office is Unit A, Brook Park East, Shirebrook NG20 8RY. The principle activities and structure of the group can be found in the 'Our Business' section of the Annual Report.

These Condensed Consolidated Financial Statements of Frasers Group plc (the "Company") and its subsidiaries (together the "Group") have been prepared in accordance with International Accounting Standards in conformity with the requirements of the Companies Act 2006 and in accordance with international financial reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union. The comparative figures for the financial year ended 26 April 2020 have been extracted from the Group's statutory accounts for that financial year. The Group Financial Statements for the period ended 25 April 2021 were approved by the Board on 5 August 2021.

The financial information, which comprises the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Consolidated Cash Flow Statement, Consolidated Statement of Changes in Equity and related notes, do not constitute full statutory accounts within the meaning of s435 (1) and (2) of the Companies Act 2006. The auditor has reported on the Group's statutory accounts for each of the periods ended 26 April 2020 and 25 April 2021 which do not contain any statement under s498 of the Companies Act 2006, were unqualified and did not contain any matters which the auditor drew attention to by way of emphasis of matter without qualifying their report. The statutory accounts for the year ended 26 April 2020 have been delivered to the Registrar of Companies and the statutory accounts for the year ended 25 April 2021 will be delivered in due course.

Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chief Executive's Report and Business Review.

The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the Financial Review. In addition, the Financial Statements include the Group's objectives, policies and processes for managing its capital, its financial risk management objectives, details of its financial instruments and hedging activities, and its exposures to credit risk and liquidity risk.

The Group still trades profitably, is highly cash generative and has considerable financial resources. The Group is able to operate within its banking facilities and covenants, which run until November 2022, and is well placed to take advantage of strategic opportunities as they arise. As a consequence, the Directors believe that the Group is able to manage its business risks successfully despite the continued uncertain economic outlook.

Management have assessed the level of trading to date since the impacts of Covid-19 and has forecast and projected a conservative base case and also a number of even more conservative scenarios taking into account a potential further wave and associated lockdowns over winter, Government support, foreign exchange exposure and cost saving initiatives. These forecasts and projections show that the Group will be able to operate within the level of the current facility and its covenant requirements (being interest cover and net debt to EBITDA ratios). Management also have a number of mitigating actions which could be taken if required such as putting on hold discretionary spend, realising certain assets on the Balance Sheet and paying down the Revolving Credit Facility. See the Viability Statement for further details.

Having thoroughly reviewed the Group's performance and having made suitable enquiries, the Directors are confident that the Group has adequate resources to remain in operational existence for at least 12 months from the date of these Financial Statements. Trading would need to fall significantly below levels observed during the pandemic to require mitigating actions or a relaxation of covenants. On this basis, the Directors continue to adopt the going concern basis for the preparation of the Annual Report and Financial Statements which is a period of at least twelve months from the date of approval of these Financial Statements.

New Accounting Standards, Interpretations And Amendments Adopted By The Group

The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not effective. The Group applies for the first time the following new standards:

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

• Definition of a Business - Amendments to IFRS 3

• Interest Rate Benchmark Reform - Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16

• Covid-19 Related Rent Concessions - Amendments to IFRS 16

• Amendments to References to the Conceptual Framework in IFRS Standards

By adopting the above, there has been no material impact on the Financial Statements.

International Financial Reporting Standards ("Standards") In Issue But Not Yet Effective

At the date of authorisation of these consolidated Financial Statements, there are no standards in issue from the International Accounting Standards Board ("IASB") or International Financial Reporting Interpretations Committee ("IFRIC") which are effective for annual accounting periods beginning on or after 26 April 2021 that will have a significant impact on these Financial Statements.

CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES

The critical accounting estimates and judgements made by the Group regarding the future or other key sources of estimation, uncertainty and judgement that may have a significant risk of giving rise to a material adjustment to the carrying values of assets and liabilities within the next financial period are:

Key Judgements

Determining Related Party Relationships

Management determines whether a related party relationship exists by assessing the nature of the relationship by reference to the requirements of IAS 24, Related Party Disclosures. This is in order to determine whether significant influence exists as a result of control, shared directors or parent companies, or close family relationships. The level at which one party may be expected to influence the other is also considered for transactions involving close family relationships.

Control And Significant Influence Over Certain Entities

Under IAS 28 Investments in Associates and Joint Ventures if an entity holds 20% or more of the voting power of the investee, it is presumed that the entity has significant influence, unless it can clearly demonstrate that this is not the case. During the period the Group has held greater than 20% of the voting rights of Studio Retail Group Plc, French Connection Group Plc (sold during the period) and Mulberry Group Plc, whereby management consider that the Group does not have significant influence over these entities for combinations of the following reasons:

• The Group does not have any representation on the board of directors of the investee other than a Frasers Group representative having an observer role on the board of Studio Retail Group Plc. Management have reviewed the terms of the observer arrangement and have concluded that this does not give them the right to participate in or influence the financial or operating decisions of Studio Retail Group Plc. Studio Retail Group Plc can terminate this arrangement at any time, and can determine which parts of the Board meetings the representative can be present at and what information they are given access to. It should be noted the Frasers Group representative did not attend any board meetings in full or part during the reporting period;

• There is no participation in decision making and strategic processes, including participation in decisions about dividends or other distributions;

• There have been no material transactions between the entity and these investee companies;

• There has been no interchange of managerial personnel;

• No non-public essential technical management information is provided to the investee

In assessing the level of control that management have over certain entities, management will consider the various aspects that allow management to influence decision making. This includes the level of share ownership, board membership, the level of investment and funding and the ability of the Group to influence operational and strategic decisions and effect its returns through the exercise of such influence. If management were to consider that the Group does have significant influence over these entities then the equity method of accounting would be used and the percentage shareholding (disclosed in note 11) multiplied by the results of the investee in the period (as disclosed in note 34 of the Annual Report and Accounts) would be recognised in profit or loss.

The Group holds 49% of the share capital of Four (Holdings) Limited which is accounted for using the equity method. The Group does not have any representation on the board of directors and no participation in decision about relevant activities such as establishing operating and capital decisions, including budgets, appointing or remunerating key management personnel or service providers and terminating their services or employment. However, in prior periods the Group has provided Four (Holdings) Limited with a significant loan. At the reporting date, the amount owed by Four (Holdings) Limited for this loan totalled £60.0m (£21.6m net of amounts recognised in respect of loss allowance). The Group is satisfied that the existence of these transactions provides evidence that the entity has significant influence over the investee but in the absence of any other rights, in isolation it is insufficient to meet the control criteria of IFRS 10, as the Group does not have power over Four (Holdings) Limited and therefore Four (Holdings) Limited is not equity accounted.

Cash Flow Hedging

The Group uses a range of forward and option contracts that are entered into at the same time, they are in contemplation with one another and have the same counterparty. A judgement is made in determining whether there is an economic need or substantive business purpose for structuring the transactions separately that could not also have been accomplished in a single transaction. Management are of the view that there is a substantive distinct business purpose for entering into the options and a strategy for managing the options independently of the forward contracts. The forward and options contracts are therefore not viewed as one instrument and hedge accounting for the forwards is permitted.

Under IFRS 9 in order to achieve cash flow hedge accounting, forecast transactions (primarily Euro denominated sales and USD denominated purchases) must be considered to be highly probable. The hedge must be expected to be highly effective in achieving offsetting changes in cash flows attributable to the hedged risk. The forecast transaction that is the subject of the hedge must be highly probable and must present an exposure to variations in cash flows that could ultimately affect profit or loss. Management have reviewed the detailed forecasts and growth assumptions within them, and are satisfied that forecasts in which the cash flow hedge accounting has been based meet the criteria per IFRS 9 as being highly probable forecast transactions. Should the forecast levels not pass the highly probable test, any cumulative fair value gains and losses in relation to either the entire or the ineffective portion of the hedged instrument would be taken to the Income Statement.

Management considers various factors when determining whether a forecast transaction is highly probable. These factors include detailed sales forecasts by channel, geographical area and seasonality, conditions in target markets and the impact of expansion in new areas. Management also consider any change in alternative customer sales channels that could impact on the hedged transaction.

If the forecast transactions were determined to be not highly probable and all hedge accounting was discontinued, the Hedging reserve of £11.5m would be shown in Finance Income.

Key Estimates

Provision For Obsolete, Slow Moving Or Defective Inventories

The Directors have applied their knowledge and experience of the retail industry in determining the level and rates of provisioning required in calculating the appropriate inventory carrying values. Specific estimates and judgements applied in relation to assessing the level of inventory provisions required are considered in relation to the following areas:

a. Continuity inventory

b. Seasonal inventory lines - specifically seasons that have now finished

c. Third party versus own brand inventory

d. Ageing of inventory

e. Sports Retail or Premium Lifestyle

f. Local economic conditions

g. Divisional specific factors

h. Increased cost of inventory and lower margins with the devaluation of the Pound

i. Over-stock and out of season inventory as a result of Covid-19

Provision estimates are forward looking and are formed using a combination of factors including historical experience, management's knowledge of the industry, group discounting, sales pricing protocols and the overall assessment made by management of the risks in relation to inventory. Management use a number of internally generated reports to monitor and continually re-assess the adequacy and accuracy of the inventory provision. The additional cost of repricing inventory and handling charges in relation to relocating inventory (tunnelling) are considered in arriving at the appropriate percentage provision. The assessment involves significant estimation uncertainty, therefore in order to check that the assumptions applied remain valid, management produces a range of outcomes and the provision is set within this range.

Key assumptions used to create the estimates are:

• Discounting - Based on historical experience and managements anticipated future discounting including the impact of Covid-19

• Tunnelling - Cost of handling stock for reworking and repacking

• Repricing - Labour cost associated with repricing units of stock

• Shrinkage - Stock lost through damage and theft

Total Group inventory provision at 25 April 2021 is 16.6% (FY20: 15.7%). A 1% change in the total provision would impact underlying EBITDA by approx. £13.2m (FY20: £14.2m). Management do not consider it appropriate to disclose sensitivities for key assumptions in isolation as in practice changes in one assumption would lead to an offset in another.

Property Related Provisions

Property related estimates and judgements are continually evaluated and are based on historical experience, external advice and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Dilapidations

The Group provides for its legal responsibility for dilapidation costs following advice from chartered surveyors and previous experience of exit costs (including strip out costs and professional fees). Management use a reference estimate of £100,000 (FY20: £100,000) for large leasehold stores, £50,000 (FY20: £50,000) for smaller leasehold stores (£25,000 per store for Game UK and Game Spain stores) and $/€50,000 (FY20: $/€50,000) for non-UK stores. Management do not consider these costs to be capital in nature and therefore dilapidations are not capitalised, except for in relation to the sale and leaseback of Shirebrook in the prior period in which a material dilapidations provision was capitalised.

A 10% increase in dilapidation cost per store would result in an approx. £8.0m reduction in underlying EBITDA.

Other Provisions

Provisions are made for items where the Group has identified a present legal or constructive obligation arising as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Legal and regulatory provisions relate to management's best estimates of provisions required for legal and regulatory claims and ongoing non-UK tax enquiries. Other provisions relate to management's best estimates of provisions required for restructuring, employment and commercial. Where applicable these are inclusive of any estimated penalties, interest and legal costs. See note 28 of the Annual Report and Accounts.

In relation to the non-UK tax enquiries management have made a judgement to consider all claims collectively, applying the following key estimates to the gross amounts (excluding re-imbursement assets):

• 10% penalty (FY20: 10%). A 5% increase to 15% would result in approx. £6.5m increase in the provision (FY20: approx. £7.0m).

• 3% interest on the liability (FY20: 3%). A 1% increase to 4% would result in approx. £11.5m increase in the provision (FY20: approx. £10.0m).

Management are satisfied that the judgement to consider all claims collectively is the only reasonable approach because they are all dependant on the outcome of a court ruling on the interpretation of the non-UK tax enquiries. Management are satisfied that with regard to timing a reasonable range of outcomes are all greater than one year and so are satisfied with including the provisions as non-current.

Other Receivables And Amounts Owed By Related Parties

Other receivables and amounts owed by related parties are stated net of provision for any impairment. Management have applied estimates in assessing the recoverability of working capital and loan advances made to investee companies. Matters considered include the relevant financial strength of the underlying investee company to repay the loans, the repayment period and underlying terms of the monies advanced, forecast performance of the underlying borrower, and where relevant, the Group's intentions for the companies to which monies have been advanced.

IFRS 16

The key areas of judgement in relation to property leases recognised under IFRS 16 are below:

• IFRS 16 defines the lease term as the non-cancellable period of a lease together with the options to extend or terminate a lease, if the lessee were reasonably certain to exercise that option. The Group will assess the likelihood of extending lease contracts beyond the break date by taking into account current economic and market conditions, current trading performance, forecast profitability and the level of capital investment in the property.

• IFRS 16 states that the lease payments shall be discounted using the lessee's incremental borrowing rate where the rate implicit in the lease cannot be readily determined. Accordingly, all lease payments have been discounted using the incremental borrowing rate (IBR). The IBR has been determined by using a synthetic credit rating for the Group which is used to obtain market data on debt instruments for companies with the same credit rating, this is split by currency to represent each of the geographical areas the Group operates within and adjusted for the lease term.

The weighted average discount rates based on incremental borrowing rates used throughout the period across the Group's lease portfolio are shown below. The discount rate for each lease is dependent on lease start date, term and location.

Lease Term	UK	Europe	Rest of World
Up to 5 years	1.4% - 1.8%	0.3% - 0.8%	1.5% - 3.3%
Greater than 5 years and up to 10 years	2.0% - 2.2%	0.5% - 1.2%	2.5% - 3.5%
Greater than 10 years and up to 20 years	2.2% - 2.5%	0.8% - 1.4%	2.9% - 3.7%
Greater than 20 years	2.5% - 2.8%	1.1% - 1.7%	3.5% - 3.8%

• The right of use asset will be reviewed for impairment at each reporting period in line with IAS 36 impairment to review whether the carrying amount exceeds its recoverable amount. For impairment testing purposes the Group has determined that each store is a separate CGU. The recoverable amount is calculated based on the Group's latest forecast cash flows which are then extrapolated to cover the period to the break date of the lease taking into account historic performance and knowledge of the current market, together with the Group's views on future profitability of each CGU. The key assumptions in the calculations are the sales growth rates, gross margin rates, changes in the operating cost base and the pre-tax discount rate derived from the Group's weighted average cost of capital using the capital asset pricing model, the inputs of which include a risk-free rate, equity risk premium and a risk adjustment (Beta). Given the number of assumptions used the assessment involves significant estimation uncertainty. The assumptions used are consistent with those disclosed in the Freehold Land and Buildings and Long-term leasehold section below. Impairments in the period have been recognised for the amount of £174.9m, being £168.2m against the right-of-use asset (£114.1m UK Sports Retail segment, £20.5m Premium Lifestyle segment, £31.0m European Retail segment, and £2.6m Rest of the World Retail segment) and £6.7m against plant and equipment (£2.6m UK Sports Retail segment, £0.5m Premium Lifestyle segment, £3.6m European Retail segment). The impairments were due to the ongoing impact of Covid-19 and the challenges in the retail sector on the forecast cash flows of the CGU.

The key assumptions, which are equally applicable to each CGU, in the cash flow projections used to support the carrying amount of the right of use asset are consistent with the cashflow projections for the Freehold land and Buildings impairment assessment.

A sensitivity analysis has been performed in respect of sales and margin as these are considered to be the most sensitive of the key assumptions. With regard to the sales assumption below we have performed a sensitivity for both no lockdown in year 1 and a lockdown which lasts four months compared to two months:

Forecast:	Impact of change in assumption:	Impairment increase / (decrease) £m
Sales year 1 - No lockdown	15% - improvement	(23.9)
Sales year 1 - 4 months lockdown	15% - reduction	63.5
Existing Gross Margin year 1 >40%	100bps - improvement	(4.6)
Existing Gross Margin year 1 >40%	100bps - reduction	5.3

Freehold Land and Buildings and Long-term leasehold

Freehold land and buildings and long-term leasehold assets are assessed at each reporting period for whether there is any indication of impairment in line with IAS 36 impairment.

An asset is impaired when the carrying amount exceeds its recoverable amount. IAS 36 defines recoverable amount as the higher of an asset's or cash-generating unit's fair value less costs of disposal and its value in use, the Group has determined that each store is a separate CGU. Impairments in the period have been recognised in the amount of £117.9m (FY20: £nil) due to the ongoing impact of Covid-19 and the challenges in the retail sector on the forecast cash flows of the CGU. This is split £84.4m against freehold land and buildings (£68.7m UK Sports Retail segment and £15.7m European Retail segment), £3.9m against long-term leasehold (£2.9m UK Sports Retail segment and £1.0m European Retail segment), £29.0m plant & equipment (£15.1m UK Sports Retail segment, £8.8m Premium Lifestyle segment, £5.1m European Retail segment), and £0.6m investment property (all UK Sports Retail segment).

Value In Use (VIU)

The value in use is calculated based on five year cash flow projections. These are formulated by using the Group's forecast cash flows of each individual CGU excluding any Covid-19 impact, taking into account historic performance of the CGU, and then adjusting for the Group's current views on future profitability of each CGU as a result of Covid-19 and knowledge of the current market. The key assumptions in the calculations are the sales growth rates, gross margin rates, changes in the operating cost base and the pre-tax discount rate derived from the Group's weighted average cost of capital using the capital asset pricing model, the inputs of which include a risk-free rate, equity risk premium and a risk adjustment (Beta). Given the number of assumptions used the assessment involves significant estimation uncertainty.

The key assumptions, which are equally applicable to each CGU, in the cash flow projections used to support the carrying amount of the freehold land and buildings were as follows:

Key assumptions	Year 1	Year 2	Year 3	Year 4	Year 5
Sales decline	-15%	-5%	-4%	-3%	-2%
Existing gross margin > 40%	-100bps	-175bps	-150bps	-125bps	-100bps
Operating costs increase per annum	3%	3%	3%	3%	3%
Discount rate	6%	6%	6%	6%	6%
Terminal growth rate of 2%

Forecast:	Impact of:	Impairment increase / (decrease) £m
Sales year 1 - No lockdown	15% - improvement	(53.3)
Sales year 1 - 4 months lockdown	15% - reduction	57.6
Existing Gross Margin year 1 >40%	100bps - improvement	(7.4)
Existing Gross Margin year 1 >40%	100bps - reduction	9.3

Fair value less costs of disposal

For those CGUs where the value in use is less than the carrying value of the asset, the fair value less costs of disposal has been determined using both external and internal market valuations. This fair value is deemed to fall in to Level 3 of the fair value hierarchy as per IFRS 13. The property portfolio consists of vacant, Frasers Group occupied and third party tenanted units, one property can include all three types. The following valuation methodology has been adopted for each:

Scenario

Valuation methodology

Key assumptions

Vacant units

Estimated Rental Value (ERV) and suitable reversionary yield applied to

reflect the market to generate a net capital value. A deduction to the

capital value generated is then made based on the void period with

applicable rates payable for the unit and rent free incentive.

Void period and rent free band - two bands applied depending on circumstances:

· 1 year void, 2 years rent free; or

· 2 years void, 3 years rent free.

Yield bands - ranging from 7% - 15%

Frasers Group occupied

Will be assumed the unit is vacant given there is no legally binding

Inter-company agreement in place. Therefore a void and rent free

incentive period assumed, the cost amount then deducted from the

capital value generated by the ERV and reversionary yield. Although we

consider the commercial reality is that fair value less costs to sell will be

higher than vacant possession this very conservative assumption is in

line with both technical accounting rules and that of our management

experts.

Void period and rent free band - two bands applied depending on circumstances:

· 1 year void, 2 years rent free; or

· 2 years void, 3 years rent free.

Yield bands - ranging from 7% - 15%

Third party tenanted

An ERV is applied using a percentage band on the passing rent. An

appropriate reversionary yield is applied reflecting the risk of tenant and

renewal to generate a capital value. This will also provide a net initial

yield based off the current passing rent.

ERV bands applied to passing rent - ranging from 0% to -50%.

Yield bands - ranging from 6.5% - 15%

A 10% increase in the market valuation amounts used in the impairment calculations would result in a decrease in impairment of £7.5m.

The total recoverable amount of the assets that were impaired at the period end was £170.0m, with £87.0m of this being based on their fair value less costs of disposal and £83.0m being based on their value in use.

Key Estimates In Relation To Alternative Performance Measures

The Directors believe that underlying EBITDA, underlying Profit before tax and underlying basic EPS provide further useful information for shareholders on the underlying performance of the Business in addition to the reported numbers and are consistent with how business performance is measured internally. They are not recognised profit measures under IFRS and may not be directly comparable with "adjusted" profit measures used by other companies.

EBITDA is earnings before investment income, finance income and finance costs, tax, depreciation, amortisation and impairment. It includes the Group's share of losses from associated undertakings and joint ventures. Underlying EBITDA excludes the impact of IFRS 16, foreign exchange gains/losses in selling and administration costs, exceptional costs, and the profit / loss on disposal of subsidiaries, strategic investments and properties. Underlying EBITDA also excludes fair value adjustments on step acquisitions.

Management will from FY22 change our main reporting KPI from Underlying EBITDA to Adjusted PBT. Thus from FY22 the Group will no longer report Underlying EBITDA. Adjusted PBT is Reported Profit Before Tax less the effects of unhedged FX, exceptional items, and gains and losses on strategic investments. Management have taken this decision for the following reasons:

• With the continued significant investment in and roll out of our elevation strategy on both the physical and digital fronts, the importance of depreciation and amortisation to both the Board and our stakeholders in terms of assessing performance has grown.

• Our understanding from a number of financial sectors including the banking sector is that IFRS16 is becoming an increasingly important consideration, including on covenants in many new financing arrangements.

• With this new measure being introduced we are trying to align with the Financial Reporting Council's thematic standpoint with regard to 'alternative performance measures' as far as possible whilst retaining a degree of interpretation given factors outside of our control, such as FX and strategic investments movements which are exceptionally difficult to forecast, particularly months in advance.

•

The following are further key estimates used with regard to the alternative performance measures used by the group.

Onerous lease provision

Provisions for onerous lease contracts are recognised when the unavoidable costs of meeting lease obligations exceed the economic benefits expected to be received over the term of the lease. Where an onerous lease has been identified, the property, plant and equipment associated to that store are also reviewed for impairment.

Management use store EBITDA in order to determine whether an onerous lease exists. Specific assumptions, which involve the use of estimates and involve significant estimation uncertainty, that are used to determine the appropriate level of provision are consistent with the cashflow projections for the Freehold land and Buildings assessment except for the following:

• Discount rate 2% (FY20: 2%) across the Group

• Operating costs increase 3% (FY20: 3%) across the Group

• Store profitability includes 100% contribution towards central overheads

• Assumed get out cap of 10 years (FY20: 10 years), being the maximum period for total unavoidable costs

• Planned store closures, relocations and re-brandings

Forecast:	Impact of:	Provision increase / (decrease) £m
Sales year 1 - No lockdown	15% - improvement	(104.4)
Sales year 1 - 4 months lockdown	15% - reduction	151.0
Existing Gross Margin year 1 >40%	100bps - improvement	(12.6)
Existing Gross Margin year 1 >40%	100bps - reduction	12.5

Further information on the basis of the estimation of provisioning for dilapidations and onerous lease contracts is detailed in the provisions accounting policy and note 28 in the Annual Report and Accounts.

Impairments of plant and equipment and short-term leasehold improvements of £24.2m have also been recognised as a result of identified onerous lease contracts (£6.4m UK Sports Retail segment, £2.7m Premium Lifestyle segment, £15.1m European Retail segment).

2. SEGMENTAL ANALYSIS

Management has determined to present its segmental disclosures consistently with the presentation in the 2020 Annual Report. Management considers operationally that the UK Retail divisions (UK Sports Retail and Premium Lifestyle) are run as one business unit in terms of allocating resources, inventory management and assessing performance. Under IFRS 8 we have not at this reporting date met the required criteria with enough certainty to aggregate these operating segments. We will continually keep this under review at subsequent reporting dates. We continue to monitor the impacts of Covid-19, Brexit, and the continued uncertainties this has brought relating to the political and economic environments, and market and currency volatility in the countries we operate in. European countries have been identified as operating segments and have been aggregated into a single operating segment as permitted under IFRS 8. The decision to aggregate these segments was based on the fact that they each have similar economic characteristics, similar long-term financial performance expectations, and are similar in each of the following respects:

• The nature of the products;

• The type or class of customer for the products; and

• The methods used to distribute the products.

In accordance with paragraph 12 of IFRS 8 the Group's operating segments have been aggregated into the following reportable segments:

1) UK Retail:

i) UK Sports Retail - includes core sports retail store operations in the UK, plus all the Group's sports retail online business (excluding Bob's Stores, Eastern Mountain Sports, Malaysia and Baltics), the gyms, the Group's Shirebrook campus operations, GAME UK stores and online operations, and retail store operations in Northern Ireland.

ii) Premium Lifestyle - includes the results of the premium retail businesses Flannels, Cruise, Van Mildert, Jack Wills, House of Fraser and Sofa.com along with related websites.

2) European Retail - includes all the Group's sports retail stores, management and operations in Europe including the Group's European Distribution Centres in Belgium and Austria, as well as GAME Spain stores and Baltics online.

3) Rest of World Retail - includes the results of US based retail activities, Asia based retail activities, along with their e-commerce offerings.

4) Wholesale & Licensing - includes the results of the Group's portfolio of internationally recognised brands such as Everlast, Karrimor, Lonsdale and Slazenger.

It is management's current intention to run the Group as four operating segments being UK Retail (including UK Sports Retail and Premium Lifestyle), European Retail, Rest of World Retail and Wholesale & Licensing. Management is satisfied that the UK Sports Retail and Premium Lifestyle will meet the criteria permitted under IFRS 8 to aggregate as one segment in due course.

Segmental information for the 52 weeks ended 25 April 2021:

	UK Sports	Premium Lifestyle	UK Retail Total	European Retail	Rest of World Retail	Total Retail	Wholesale & Licensing	Eliminations	Group Total
	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)
Sales to external customers	1,968.5	735.6	2,704.1	615.2	152.7	3,472.0	153.3	-	3,625.3
Sales to other segments	-	-	-	-	-	-	95.4	(95.4)	-
Revenue	1,968.5	735.6	2,704.1	615.2	152.7	3,472.0	248.7	(95.4)	3,625.3
Gross profit	829.3	330.3	1,159.6	239.7	64.0	1,463.3	67.5	-	1,530.8
Operating profit/(loss) before foreign exchange, exceptional items, disposal of properties and IFRS 16	29.7	22.0	51.7	(68.6)	19.6	2.7	20.2	-	22.9
Exceptional items	(4.4)	(1.6)	(6.0)	(3.1)	-	(9.1)	-	-	(9.1)
Profit on disposal of intangible assets	7.5	-	7.5	-	-	7.5	-	-	7.5
Profit on sale of properties	1.0	-	1.0	8.8	(0.1)	9.7	-	-	9.7
Foreign exchange realised	(20.2)	(0.2)	(20.4)	0.8	(1.4)	(21.0)	(5.3)	-	(26.3)
IFRS 16 adjustment	(71.9)	1.7	(70.2)	8.7	(3.5)	(65.0)	-	-	(65.0)
Operating (loss)/profit	(58.3)	21.9	(36.4)	(53.4)	14.6	(75.2)	14.9	-	(60.3)

Investment income									103.7
Investment costs									(7.7)
Finance income									9.0
Finance costs									(36.2)
Profit before taxation									8.5
Taxation									(86.5)
Loss for the period									(78.0)

Other segment items included in the income statement for the 52 weeks ended 25 April 2021:

	UK Sports	Premium Lifestyle	UK Retail Total	European Retail	Rest of World Retail	Total Retail	Wholesale & Licensing	Group Total
	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)
Property, plant & equipment depreciation	153.8	20.4	174.2	35.3	5.7	215.2	1.2	216.4
Property, plant & equipment impairment	95.6	12.0	107.6	40.6	-	148.2	-	148.2
IFRS 16 ROU depreciation	51.5	6.4	57.9	21.9	2.3	82.1	-	82.1
IFRS 16 ROU impairment	114.1	20.5	134.6	31.0	2.6	168.2	-	168.2
Investment property depreciation	1.9	-	1.9	-	-	1.9	-	1.9
Investment property impairment	0.6	-	0.6	-	-	0.6	-	0.6
IFRS 16 disposal and modification/remeasurement of lease liabilities	(20.0)	(5.6)	(25.6)	(1.4)	(0.7)	(27.7)	-	(27.7)
Intangible amortisation	-	-	-	0.5	-	0.5	6.6	7.1
Intangible impairment	3.7	2.3	6.0	3.1	-	9.1	-	9.1

Information regarding segment assets and liabilities as at 25 April 2021 and capital expenditure for the 52 weeks then ended:

	UK Sports	Premium Lifestyle	UK Retail Total	European Retail	Rest Of World Retail	Total Retail	Wholesale & Licensing	Eliminations	Group Total
Total assets	3,535.2	438.7	3,973.9	670.8	158.6	4,803.3	344.7	(1,362.9)	3,785.1
Total liabilities	(2,357.8)	(499.6)	(2,857.4)	(857.0)	(95.1)	(3,809.5)	(127.5)	1,362.9	(2,574.1)

Tangible asset additions	174.6	21.9	196.5	17.4	3.0	216.9	2.5	-	219.4
Right of use asset additions	77.5	14.1	91.6	24.3	2.4	118.3	0.5	-	118.8

Intangible assets acquired	3.7	2.3	6.0	-	-	6.0	1.0	-	7.0

Segmental information for the 52 weeks ended 26 April 2020:

	UK Sports	Premium Lifestyle	UK Retail Total	European Retail	Rest Of World Retail	Total Retail	Wholesale & Licensing	Eliminations	Group Total
	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)
Sales to external customers	2,203.3	722.0	2,925.3	697.7	174.2	3,797.2	160.2	-	3,957.4
Sales to other segments	-	-	-	-	-	-	17.8	(17.8)	-
Revenue	2,203.3	722.0	2,925.3	697.7	174.2	3,797.2	178.0	(17.8)	3,957.4
Gross profit	903.2	348.6	1,251.8	267.9	77.4	1,597.1	65.5	-	1,662.6
Operating profit / (loss) before foreign exchange, exceptional items and IFRS 16	145.6	(18.0)	127.6	14.5	(11.6)	130.5	11.4	-	141.9
Exceptional items	(2.7)	(6.9)	(9.6)	(3.5)	-	(13.1)	-	-	(13.1)
Profit on sale of properties	33.2	-	33.2	21.0	-	54.2	-	-	54.2
Foreign exchange realised	29.5	1.4	30.9	4.1	0.4	35.4	(0.5)	-	34.9
IFRS 16 adjustments	2.3	(9.7)	(7.4)	(46.5)	7.9	(46.0)	-	-	(46.0)
Operating profit / (loss)	207.9	(33.2)	174.7	(10.4)	(3.3)	161.0	10.9	-	171.9

Investment income									15.2
Investment costs									(49.8)
Finance income									31.0
Finance cost									(29.3)
Share of loss of associated undertakings									(15.9)
Fair value gain on step acquisition									20.4
Profit before taxation									143.5
Taxation									(42.5)
Profit for the period									101.0

Sales to other segments are priced at cost plus a 10% mark-up.

Other segment items included in the income statement for the 52 weeks ended 26 April 2020:

	UK Sports	Premium Lifestyle	UK Retail Total	European Retail	Rest Of World Retail	Total Retail	Wholesale & Licensing	Group Total
	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)
Depreciation	98.5	20.7	119.2	39.4	4.8	163.4	1.4	164.8
IFRS 16 ROU depreciation/Impairment	113.1	16.1	129.2	77.0	13.3	219.5	-	219.5
IFRS 16 disposal of lease liabilities	(2.7)	(0.2)	(2.9)	(6.4)	(0.4)	(9.7)	-	(9.7)
Exceptional Impairment	2.7	6.9	9.6	3.5	-	13.1	-	13.1
Amortisation/Impairment	2.1	2.0	4.1	3.9	-	8.0	12.4	20.4

Information regarding segment assets and liabilities as at 26 April 2020 and capital expenditure for the 52 weeks then ended:

	UK Sports	Premium Lifestyle	UK Retail Total	European Retail	Rest Of World Retail	Total Retail	Wholesale & Licensing	Eliminations	Group Total
	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)
Total assets	3,324.9	474.7	3,799.6	455.9	128.6	4,384.1	344.3	(860.2)	3,868.2
Total liabilities	(1,986.8)	(556.1)	(2,542.9)	(627.0)	(195.1)	(3,365.0)	(83.1)	860.2	(2,587.9)

Tangible asset additions	236.8	25.4	262.2	48.7	12.5	323.5	-	-	323.5
Right of use asset additions	50.6	22.9	73.5	25.5	2.2	101.2	-	-	101.2

Intangible assets acquired	2.7	8.9	11.6	3.1	-	14.7	-	-	14.7

Geographic Information

Segmental information for the 52 weeks ended 25 April 2021:

	UK	Europe	USA	Asia	Eliminations	Total
	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)
Segmental revenue from external customers	2,721.7	646.2	213.7	43.7	-	3,625.3
Total capital expenditure	196.5	17.4	3.2	2.3	-	219.4
Non-current segment assets*	1,052.3	114.9	127.7	4.6	-	1,299.5
Total segmental assets	4,264.7	589.2	256.2	37.9	(1,362.9)	3,785.1

*Excludes deferred tax and financial instruments.

Segmental information for the 52 weeks ended 26 April 2020:

	UK	Non-UK	US	Asia	Eliminations	Total
	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)
Segmental revenue from external customers	2,951.0	722.3	235.2	48.9	-	3,957.4
Total capital expenditure	262.5	56.8	1.9	2.3	-	323.5
Non-current segmental assets*	1,172.6	113.1	210.4	13.8	-	1,509.9
Total segmental assets	3,861.1	473.3	354.5	39.5	(860.2)	3,868.2

*Excludes deferred tax and financial instruments.

Material non-current segmental assets - by a non-UK country:

	USA	Belgium	Austria	Estonia	Ireland	Spain
	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)
FY21	127.7	46.8	22.4	-	12.9	39.9
FY20	173.8	41.2	30.3	24.2	52.9	36.7

Material segmental revenue from external customers - by a non-UK country:

	USA	Belgium	Austria	Estonia	Ireland	Spain
	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)
FY21	213.7	93.1	42.1	96.7	95.4	208.1
FY20	235.2	95.5	55.2	103.1	147.3	184.1

Note the Group has no individual customer which accounts for more than 10% of revenue in the current or prior period.

The following table reconciles the reported operating profit to the underlying EBITDA as it has been one of the main measures used by the Chief Operating Decision Maker when reviewing performance during the period:

Reconciliation of operating (loss)/profit to underlying EBITDA for the 52 week period ended 25 April 2021:

	UK Sports Retail	Premium Lifestyle	UK Retail Total	European Retail	Rest of World Retail	Retail Total	Wholesale & Licensing	Group Total
	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)
Operating (loss) / profit	(58.3)	21.9	(36.4)	(53.4)	14.6	(75.2)	14.9	(60.3)
IFRS 16 disposal and modification/remeasurement of lease liabilities	(20.0)	(5.6)	(25.6)	(1.4)	(0.7)	(27.7)	-	(27.7)
IFRS 16 ROU depreciation	51.5	6.4	57.9	21.9	2.3	82.1	-	82.1
IFRS 16 ROU impairment	114.1	20.5	134.6	31.0	2.6	168.2	-	168.2
PPE depreciation (including investment property)	155.7	20.4	176.1	35.3	5.7	217.1	1.2	218.3
PPE impairment (including investment property)	96.2	12.0	108.2	40.6	-	148.8	-	148.8
Intangible amortisation	-	-	-	0.5	-	0.5	6.6	7.1
Reported EBITDA	339.2	75.6	414.8	74.5	24.5	513.8	22.7	536.5
(Profit)/loss on sale of properties	(1.0)	-	(1.0)	(8.8)	0.1	(9.7)	-	(9.7)
Exceptional items	(3.1)	1.6	(1.5)	3.1	-	1.6	-	1.6
IFRS 16 adjustments ⁽¹⁾	(76.1)	(23.5)	(99.6)	(63.9)	(0.4)	(163.9)	-	(163.9)
Realised FX loss / (gain)	20.2	0.2	20.4	(0.8)	1.4	21.0	5.3	26.3
Underlying EBITDA	279.2	53.9	333.1	4.1	25.6	362.8	28.0	390.8

⁽¹⁾ Relates to the reversal of IFRS 16 rent and onerous lease provisions.

Reconciliation of operating profit to underlying EBITDA for the 52 week period ended 26 April 2020:

	UK Sports	Premium Lifestyle	UK Retail Total	European Retail	Rest Of World Retail	Total Retail	Wholesale & Licensing	Group Total
	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)
Operating profit / (loss)	207.9	(33.2)	174.7	(10.4)	(3.3)	161.0	10.9	171.9
IFRS 16 Disposal of lease liability	(2.7)	(0.3)	(3.0)	(6.4)	(0.4)	(9.8)	-	(9.8)
IFRS 16 ROU depreciation/impairment	113.1	16.1	129.2	77.0	13.3	219.5	-	219.5
IFRS 16 PPE impairment	3.2	-	3.2	6.0	-	9.2	-	9.2
Depreciation	95.3	20.6	115.9	33.5	4.8	154.2	1.4	155.6
Amortisation/impairment	2.1	2.0	4.1	3.9	-	8.0	12.5	20.5
Share of loss of associated undertakings	(15.9)	-	(15.9)	-	-	(15.9)	-	(15.9)
Reported EBITDA	403.0	5.2	408.2	103.6	14.4	526.2	24.8	551.0
Profit on sale of properties	(33.2)	-	(33.2)	(21.0)	-	(54.2)	-	(54.2)
Exceptional items	2.7	6.9	9.6	3.5	-	13.1	-	13.1
IFRS 16 adjustments ⁽¹⁾	(115.9)	(6.1)	(122.0)	(30.1)	(20.8)	(172.9)	-	(172.9)
Realised FX (gain) / loss	(29.2)	(1.5)	(30.7)	(4.2)	(0.4)	(35.3)	0.4	(34.9)
Underlying EBITDA	227.4	4.5	231.9	51.8	(6.8)	276.9	25.2	302.1

⁽¹⁾ Relates to the reversal of IFRS 16 rent and onerous lease provisions.

3. EXCEPTIONAL ITEMS

	52 weeks ended	52 weeks ended
	25 April 2021	26 April 2020
	(£'m)	(£'m)
Impairments	(9.1)	(13.1)
Profit on disposal of intangible assets	7.5	-
	(1.6)	(13.1)

The impairment in both the current and prior year relates to goodwill, whereby the discounted present value of future cash flows do not support the full value of the assets. The profit on disposal of intangible assets relates to the sale of certain IP relating to the BELONG business.

4. INVESTMENT INCOME

	52 weeks ended	52 weeks ended
	25 April 2021	26 April 2020
	(£'m)	(£'m)
Profit on disposal of financial assets and equity derivative financial instruments	27.4	7.4
Premium received on derivative financial instruments	20.6	-
Fair value gain on equity derivative financial instruments	55.2	7.3
Dividend income	0.5	0.5
	103.7	15.2

The profit on disposal of financial assets mainly relates to Hugo Boss contracts for difference. The fair value gain on equity derivative financial instruments mainly relates to Hugo Boss options and contracts for difference. The premium received on derivative financial instruments mainly relates to Hugo Boss options.

5. INVESTMENT COSTS

	52 weeks ended	52 weeks ended
	25 April 2021	26 April 2020
	(£'m)	(£'m)
Loss on disposal of financial assets and equity derivative financial instruments	-	14.0
Fair value loss on equity derivative financial instruments	7.7	35.8
	7.7	49.8

The fair value loss on equity derivatives in the current period mainly relates to movements in contracts for difference.

The loss on disposal recognised in the prior period mainly relates to the sale of equity derivatives. The fair value loss on equity derivatives in the prior period mainly relates to Hugo Boss options and commodities.

6. FINANCE INCOME

	52 weeks ended	52 weeks ended
	25 April 2021	26 April 2020
	(£'m)	(£'m)
Bank interest receivable	3.5	1.6
Other finance income	5.5	8.1
Fair value adjustment to derivative financial instruments	-	21.3
	9.0	31.0

The fair value adjustment to derivative financial instruments relates to differences between the fair value of forward foreign currency contracts and written options that were not designated for hedge accounting from one period end to the next. Other finance income largely relates to premiums received on option contracts.

7. FINANCE COSTS

	52 weeks ended	52 weeks ended
	25 April 2021	26 April 2020
	(£'m)	(£'m)
Interest on bank loans and overdrafts	11.1	17.9
Other interest	8.6	0.4
Interest on retirement benefit obligations	0.1	0.1
IFRS 16 lease interest	11.8	10.9
Fair value adjustment to derivative financial instruments	4.6	-
	36.2	29.3

8. TAXATION

	52 weeks ended	52 weeks ended
	25 April 2021	26 April 2020
	(£'m)	(£'m)
Current tax	83.2	57.2
Adjustment in respect to prior periods	13.6	3.9
Total current tax	96.8	61.1

Deferred tax	(10.1)	(25.8)
Adjustment in respect of prior periods	(0.2)	7.2
Total deferred tax	(10.3)	(18.6)

	86.5	42.5

Profit before taxation	8.5	143.5
Taxation at the standard rate of tax in the UK of 19% (2020: 19%)	1.6	27.3

Non-taxable income	(3.9)	(22.4)
Expenses not deductible for tax purposes	77.0	19.0
Other tax adjustments	(1.6)	9.6
Adjustments in respect of prior periods - current tax	13.6	3.9
Adjustments in respect of prior periods - deferred tax	(0.2)	7.2
Changes in deferred tax rate	-	(2.1)
	86.5	42.5

Non-taxable income largely relates to profits on property disposal due to differences between capital allowances and depreciation. Expenses not deductible for tax purposes relate to non-qualifying depreciation, impairments, and fair valuation of investments.

9. EARNINGS PER SHARE FROM TOTAL AND CONTINUING OPERATIONS ATTRIBUTABLE TO THE EQUITY SHAREHOLDERS

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders of the parent by the weighted average number of ordinary shares outstanding during the year.

For diluted earnings per share, the weighted average number of shares, 501,955,281 (FY20: 505,826,890), is adjusted to assume conversion of all dilutive potential ordinary shares under the Group's share schemes, being 88,605 (FY20: 1,239,075), to give the diluted weighted average number of shares of 502,043,886 (FY20: 507,065,965). However, as there is a loss for the period ended 25 April 2021, the effect of potentially dilutive ordinary shares is anti-dilutive, and therefore the weighted average number of shares for the Diluted EPS calculation has been kept the same as for the Basic EPS calculation for the current period.

Basic And Diluted Earnings Per Share

Basic and Diluted EPS	2021	2021	2020	2020
	£'000	£'000	£'000	£'000
	Basic	Diluted	Basic	Diluted
(Loss)/profit for the period	(83.0)	(83.0)	93.8	93.8
	Number in thousands		Number in thousands
Weighted average number of shares	501,955	501,955	505,827	507,066
	Pence per share		Pence per share
Earnings per share	(16.5)	(16.5)	18.5	18.5

Underlying Earnings Per Share

The underlying earnings per share reflects the underlying performance of the business compared with the prior period and is calculated by dividing underlying earnings by the weighted average number of shares for the period. Underlying earnings is used by management as a measure of profitability within the Group. Underlying earnings is defined as (loss)/profit for the period attributable to equity holders of the parent for each financial period but excluding the post-tax effect of certain non-trading items. Tax has been calculated with reference to the effective rate of tax for the Group.

The Directors believe that the underlying earnings before exceptional items and underlying earnings per share measures provide additional useful information for shareholders on the underlying performance of the business and are consistent with how business performance is measured internally. Underlying earnings is not a recognised profit measure under IFRS and may not be directly comparable with "adjusted" profit measures used by other companies.

	52 Weeks Ended		52 Weeks Ended
	25 April 2021	25 April 2021	26 April 2020	26 April 2020
	(£'m)	(£'m)	(£'m)	(£'m)
	Basic	Diluted	Basic	Diluted

(Loss)/profit for the period	(83.0)	(83.0)	93.8	93.8
Post tax adjustment to (loss)/profit for the period for the following items:
Realised loss/(gain) on forward foreign exchange contracts	19.7	19.7	(26.1)	(26.1)
Fair value adjustment to forward foreign exchange contracts	3.4	3.4	(16.0)	(16.0)
Fair value gain on step acquisition	-	-	(20.4)	(20.4)
Fair value adjustment to derivative financial instruments	(47.5)	(47.5)	26.9	26.9
Dividend income and profit on disposal of financial assets and equity derivative financial instruments	(48.5)	(48.5)	7.7	7.7
Profit on disposal of properties	(9.7)	(9.7)	(54.2)	(54.2)
Impairment of goodwill	9.1	9.1	13.1	13.1
Profit on disposal of intangible assets	(5.6)	(5.6)	-	-
IFRS 16 adjustments	76.8	76.8	56.9	56.9
Underlying (loss)/profit for the period	(85.3)	(85.3)	81.7	81.7
	Number in thousands		Number in thousands
Shares in issue at the period end	501,955	501,955	505,827	507,066
	Pence per share		Pence per share
Earnings per share	(17.0)	(17.0)	16.2	16.1

10. PROPERTY, PLANT AND EQUIPMENT

	Right of use asset (£'m)	Freehold Land and Buildings (£'m)	Long-term Leasehold (£'m)	Short-term Leasehold improvements (£'m)	Plant and equipment (£'m)	Total (£'m)
COST
At 28 April 2019	-	747.3	68.0	133.7	623.8	1,572.8
Recognised on adoption of IFRS 16	422.5	-	-	-	-	422.5
Acquisitions	18.8	25.4	0.5	-	6.1	50.8
Additions	101.2	177.2	2.2	15.4	128.7	424.7
Eliminated on disposals	(20.9)	(33.5)	(0.3)	(16.7)	(21.8)	(93.2)
Reclassifications / Remeasurements ⁽¹⁾	2.8	-	-	-	33.0	35.8
Exchange differences	-	2.5	0.2	(0.8)	2.8	4.7
At 26 April 2020	524.4	918.9	70.6	131.6	772.6	2,418.1
Acquisitions (see note 13)	2.1	0.5	-	-	29.0	31.6
Additions	118.8	84.3	4.3	2.0	128.8	338.2
Eliminated on disposals	(48.1)	(16.5)	(0.7)	(6.0)	(57.4)	(128.7)
Reclassifications / Remeasurements ⁽³⁾	76.4	(79.4)	79.2	0.1	8.7	85.0
Exchange differences	(4.5)	(2.4)	(0.1)	(0.3)	(2.9)	(10.2)
At 25 April 2021	669.1	905.4	153.3	127.4	878.8	2,734.0


ACCUMULATED DEPRECIATION AND IMPAIRMENT
At 28 April 2019	-	(132.8)	(14.2)	(117.7)	(484.9)	(749.6)
Recognised on adoption of IFRS 16	-	-	-	-	(6.2)	(6.2)
Charge for the period ⁽²⁾	(219.6)	(47.8)	(2.5)	(7.0)	(104.2)	(381.1)
Eliminated on disposals	-	27.8	0.1	10.0	24.8	62.7
Exchange differences	0.9	(0.5)	(0.1)	0.8	2.6	3.7
At 26 April 2020	(218.7)	(153.3)	(16.7)	(113.9)	(567.9)	(1,070.5)
Charge for the period	(82.1)	(74.5)	(11.6)	(11.5)	(118.8)	(298.5)
Impairment	(168.2)	(84.4)	(3.9)	(0.1)	(59.8)	(316.4)
Eliminated on disposals	47.5	11.2	0.3	6.7	54.4	120.1
Reclassifications / Remeasurements ⁽³⁾	-	18.1	(17.9)	-	(8.8)	(8.6)
Exchange differences	2.1	0.2	0.1	0.1	2.3	4.8
At 25 April 2021	(419.4)	(282.7)	(49.7)	(118.7)	(698.6)	(1,569.1)

NET BOOK VALUE
At 25 April 2021	249.7	622.7	103.6	8.7	180.2	1,164.9
At 26 April 2020	305.7	765.6	53.9	17.7	204.7	1,347.6
At 28 April 2019	-	614.5	53.8	16.0	138.9	823.2

⁽¹⁾ The £33.0m was reclassified due to Shirebrook warehouse plant and equipment not forming part of the final sale and leaseback completed during the prior year.

⁽²⁾In the prior period there is no separate disclosure of impairment from depreciation in respect of the property, plant and equipment. Total impairment in FY20 was £122.6m of which £97.8m related to the Right-of-use assets.

⁽³⁾In the current period a number of properties were identified that were previously classified within Freehold Land and Buildings but management believe it to be more appropriate to classify within Long-term Leasehold. These have therefore been adjusted in the period as reclassifications.

Note 1 provides further detail on the property related impairments (relating to ROU assets, freehold land and buildings and onerous lease provisions).

Leases

The Group adopted IFRS 16 on 29 April 2019. The Group only has property leases within the scope of IFRS 16, including retail stores, offices and warehouses. Leases are largely for a period between 1 - 15 years typically with break clauses. It is management's intention to continue to enter into turnover linked leases in the future.

The Group presents right-of-use assets that do not meet the definition of investment property in 'property, plant and equipment', the same line item as it presents underlying assets of the same nature that it owns. The carrying amount and movements in the period can be seen in the table above.

Lease liabilities are presented separately within the Consolidated Balance Sheet. The maturity analysis of lease liabilities is show in note 29e of the Annual Report and Accounts. Interest expense on the lease liability is presented as a component of finance costs as per note 7 . Cash payments for the principal portion and the interest portion of the lease liability are presented in the Consolidated Cash Flow Statement with further details given in note 12.

The Group is party to a number of leases that are classed as short term leases and with variable lease payments. These are typically property leases on turnover based rents. Note 8 of the Annual Report and Accounts discloses variable lease payments and short term and low value lease expenses incurred in the period. Cash flows in the period relating to variable lease payments, short term lease payments, and leases for low value assets were approx. £24m (FY20: approx. £72m). It is expected that future cash flows will not be materially different to the FY20 cash flows.

Leases to which the Group is committed but have not yet commenced at period end are not considered to be material.

11. LONG-TERM FINANCIAL ASSETS

The Group is not looking to make gains through increases in market prices of its long-term financial assets, therefore on initial application of IFRS 9 the Group made the irrevocable election to account for long term financial assets at fair value through other comprehensive income (FVOCI). The election has been made on an instrument-by-instrument basis, only qualifying dividend income is recognised in profit and loss, changes in fair value are recognised within OCI and never reclassified to profit and loss, even if the asset is impaired, sold or otherwise derecognised. The majority of long-term financial assets are recognised in the UK Sports segment.

The fair value of the long-term financial assets is based on bid quoted market prices at the balance sheet date or where market prices are not available, at management's estimate of fair value.

The following table shows the aggregate movement in the Group's financial assets during the period:

	25 April 2021	26 April 2020
	(£'m)	(£'m)
At beginning of period	83.8	84.6
Additions	113.3	24.8
Disposals	(7.0)	(5.9)
Amounts recognised through other comprehensive income	77.3	(19.7)
Exchange differences	(4.1)	-
	263.3	83.8

Included within long-term financial assets at the period ended 25 April 2021 are the following direct interests held by the group:

• 36.8% (FY20: 12.5%) interest in Mulberry Group plc

• 35.6% (FY20: 36.9%) interest in Studio Retail Group plc

• 5.1% (FY20: 0.2%) interest in Hugo Boss AG

• Various other interests, none of which represent more than 5.0% of the voting power of the investee

During the period the Group sold its 26.1% interest in French Connection Group plc due to it no longer being considered part of the Group's long-term strategy. The fair value at the date of derecognition was £2.6m with the £1.7m gain on disposal being recognised in investment income.

The following table shows the fair value of each of the Group's long-term financial assets (all listed):

	25 April 2021	26 April 2020
	(£'m)	(£'m)
Mulberry Group plc	52.0	14.6
Studio Retail Group plc	89.7	61.2
Hugo Boss AG	118.7	2.4
French Connection Group plc	-	1.6
Other	2.9	4.0
At end of period	263.3	83.8

These holdings have been assessed under IFRS 9 Financial Instruments and categorised as long-term financial assets, as the Group does not consider them to be associates and therefore, they are not accounted for on an equity basis, see note 1.

Our strategic investments are intended to allow us to develop relationships and commercial partnerships with the relevant retailers and assist in building relationships with key suppliers and brands.

12. BORROWINGS

	25 April 2021	26 April 2020
	(£'m)	(£'m)
CURRENT:
Lease liabilities	188.5	147.9

NON-CURRENT:
Bank and other loans	705.9	900.0
Lease liabilities	534.2	476.2
Total	1,428.6	1,524.1

An analysis of the Group's total borrowings other than bank overdrafts is as follows:

	25 April 2021	26 April 2020
	(£'m)	(£'m)
Borrowings - sterling	705.9	900.0

As at period end, loans are at a rate of interest of 1.3% (FY20: 1.3%) over the interbank rate of the country within which the borrowing entity resides.

Reconciliation Of Liabilities Arising From Financing Activities

The changes in the Group's liabilities arising from financing activities can be classified as follows:

	Non-current borrowings	Current borrowings	Share buy backs	Total
	(£'m)	(£'m)	(£'m)	(£'m)
At 28 April 2019	826.5	-	30.0	856.5

Cash-flows:
- Borrowings drawn down	510.0	-	-	510.0
- Borrowings repaid	(436.5)	-	-	(436.5)
- Share buy back	-	-	(43.9)	(43.9)

Lease liability:
- IFRS 16 Lease Liabilities	459.8	136.3	-	596.1
- IFRS 16 Lease Liabilities - Acquisitions	16.4	11.6	-	28.0

Non-cash movements:
- Share buy back	-	-	13.9	13.9
At 26 April 2020	1,376.2	147.9	-	1,524.1

Cash-flows:
- Borrowings drawn down	1,128.1	-	-	1,128.1
- Borrowings repaid	(1,322.2)	-	-	(1,322.2)

Lease liability:
- IFRS 16 Lease Liabilities - cash-flows	-	(78.0)	-	(78.0)
- IFRS 16 Lease Liabilities - modifications/remeasurements, transfers from non-current to current, and foreign exchange adjustments	(40.3)	98.1	-	57.8
- IFRS 16 Lease Liabilities - new leases	98.3	20.5	-	118.8

At 25 April 2021	1,240.1	188.5	-	1,428.6

The acquired borrowings (note 13) of £1.4m were repaid in full during the period.

The Group's Working Capital Facility is at £913.5m (FY20: £913.5m) available until November 2021 and is not secured against any of the Group's assets. During FY19 the Group enacted an extension option for a further year to November 2022 for £847.5m.

The Group continues to operate comfortably within its banking facilities and covenants. The carrying amounts and fair value of the borrowings are not materially different.

Reconciliation of Net Debt:

	25 April 2021	26 April 2020
	(£'m)	(£'m)
Borrowings	(1,428.6)	(1,524.1)
Add back:
- Lease liabilities	722.7	624.1
Cash and cash equivalents	457.0	534.0
Net Debt	(248.9)	(366.0)

13. ACQUISITIONS

i. On 22 August 2020, the Group acquired the trade and assets of DW Sports for cash consideration of £37.0m which is deemed to be the fair value of the consideration. The acquisition complements the Group's existing gym and fitness club portfolio and is consistent with the Group's elevation strategy. Goodwill represents the premium associated with advantageous site locations, potential growth opportunities offered by economies of scale, and the assembled workforce. The fair value adjustment to property, plant and equipment relates to management's assessment of the price that would be paid for the acquired assets in an orderly transaction between market participants at the acquisition date. The leases were acquired under short-term licences and therefore no right-of-use asset or lease liability has been recognised on acquisition.

ii. During the year the Group acquired the entire share capital of Psyche Holdings Limited, the entire share capital of GRMNT Limited, and the trade and assets of 18 Montrose (51% owned) for consideration of £2.7m. These acquisitions will provide increased product offerings in the 'Premium Lifestyle' division. The fair value adjustment to property, plant and equipment relates to the recognition of right-of-use assets and lease liabilities.

The asset and liability values at acquisition are detailed below. We have reviewed the fair value of the assets and liabilities acquired. The following table summarises the fair values of consideration paid:

	DW Sports		Other
		(£'m)	(£'m)
Cash consideration		37.0	2.7

	DW Sports			Other
	Book Value	Fair Value Adjustment	Fair Value	Book Value	Fair Value Adjustment	Fair Value
	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)	(£'m)
Property, plant and equipment	71.1	(42.1)	29.0	1.1	1.5	2.6
Intangible assets	2.9	(2.9)	-	-	-	-
Inventories	3.1	0.9	4.0	5.2	0.7	5.9
Cash and cash equivalents	-	-	-	0.3	-	0.3
Borrowings	-	-	-	(1.4)	-	(1.4)
Working capital	0.3	-	0.3	(0.8)	-	(0.8)
Lease liability	-	-	-	-	(2.1)	(2.1)
Goodwill	-	3.7	3.7	-	2.3	2.3
Bargain purchase	-	-	-	-	(3.1)	(3.1)
Non-controlling interests	-	-	-	-	(1.0)	(1.0)
Net assets acquired	77.4	(40.4)	37.0	4.4	(1.7)	2.7

The bargain purchase of £3.1m from the Other acquisitions has been recognised within cost of sales within the period. The Goodwill arising on all acquisitions of £6.0m has been impaired to £nil as at period end with the impairment being recognised in Exceptional Items, see note 3.

Since the date of control, the following amounts have been included within the Group's Financial Statements for the period:

Acquisitions (£m)	DW Sports	Other	Total
Acquisitions (£m)	(£'m)	(£'m)	(£'m)
Revenue	12.9	3.5	16.4
Operating (Loss)/profit	(15.2)	0.3	(14.9)
(Loss)/profit before tax	(15.2)	0.3	(14.9)

Had the acquisitions been included from the start of the period the following amounts would have been included within the Group's Financial Statements for the period:

Acquisitions (£m)	DW Sports	Other	Total
Acquisitions (£m)	(£'m)	(£'m)	(£'m)
Revenue	16.0	8.3	24.3
Operating loss	(14.7)	(0.2)	(14.9)
Loss before tax	(14.7)	(0.1)	(14.8)

There were no contingent liabilities acquired as a result of the above transaction.

14. POST BALANCE SHEET EVENTS

On 4 May 2021 the Group commenced a share buyback programme with the aggregate purchase price of all shares acquired under the programme to be no greater than £60m and the maximum number of shares to be purchased of 10m ordinary shares with a nominal value of 10p each. The purpose of the programme was to reduce the share capital of the Company. 3,895,835 ordinary shares of 10p each for consideration of £22,429,985 were acquired through this programme.

On 21 June 2021 the Group commenced an irrevocable non-discretionary share buyback programme to purchase the Group's shares during the closed period which commenced 21 June 2021 and ends on the day of reporting full year FY21 results. The aggregate purchase price of all shares acquired under the programme were no greater than £60m and the maximum number of shares to be purchased were 10m ordinary shares with a nominal value of 10p each. The purpose of the programme was to reduce the share capital of the Company. In total to date 2,024,127 ordinary shares of 10p each for consideration of £11,937,385 have been acquired through this programme.

The board of Frasers is now in discussions with regards to transitioning the CEO role from Mike Ashley to Michael Murray over the course of FY22. It is currently proposed that Michael Murray will assume the role of CEO on 1 May 2022. A reward and remuneration package is now under consideration on the assumption Michael Murray will assume the CEO role. Any reward and remuneration package will be subject to any requisite shareholder approval.

The group's elevation strategy is transforming the business and receiving positive feedback from consumers and our brand partners, especially on projects such as the new Oxford Street Sports Direct which opened in June 2021.

The board consider it appropriate that Michael leads us forward on this increasingly successful elevation journey.

Should Michael Murray assume the CEO role, Mike Ashley would step down from the CEO role at the same time but would remain on the board as an executive director.

14. GLOSSARY

ALTERNATIVE PERFORMANCE MEASURES

Reconciliation of excluding acquisitions and currency neutral performance measures:

	UK Retail	Premium Lifestyle	European Retail	Rest Of World Retail	Wholesale & Licensing	Group Total
	Revenue
FY21 Reported	1,968.5	735.6	615.2	152.7	153.3	3,625.3
Adjustments for acquisitions and currency neutral	(307.4)	(83.9)	(202.5)	-	-	(593.8)
FY21 Excluding acquisitions and currency neutral	1,661.1	651.7	412.7	152.7	153.3	3,031.5

FY20 Reported	2,203.3	722.0	697.7	174.2	160.2	3,957.4
Adjustments for acquisitions and currency neutral	(257.7)	(79.2)	(178.9)	(11.2)	(7.3)	(534.3)
FY20 Excluding acquisitions and currency neutral	1,945.6	642.8	518.8	163.0	152.9	3,423.1

% Variance	(14.6%)	1.4%	(20.5%)	(6.3%)	0.3%	(11.4%)

	Underlying EBITDA

FY21 Reported	279.2	53.9	4.1	25.6	28.0	390.8
Adjustments for acquisitions and currency neutral	0.4	(13.8)	(7.4)	-	-	(20.8)
FY21 Excluding acquisitions and currency neutral	279.6	40.1	(3.3)	25.6	28.0	370.0

FY20 Reported	227.4	4.5	51.8	(6.8)	25.2	302.1
Adjustments for acquisitions and currency neutral	6.1	3.9	5.0	0.2	(0.7)	14.5
FY20 Excluding acquisitions and currency neutral	233.5	8.4	56.8	(6.6)	24.5	316.6

% Variance	19.7%	377.4%	(105.8%)	(487.9%)	14.3%	16.9%

Movement in provisions pre-IFRS 16:

	Legal and regulatory	Property related	Other	Total
	(£'m)	(£'m)	(£'m)	(£'m)
At 29 April 2019	234.0	198.5	8.0	440.5
Amounts provided	13.0	111.2	-	124.2
Amounts utilised / reversed	(21.6)	(70.8)	(5.3)	(97.7)
Acquisitions	-	10.6	-	10.6
At 26 April 2020	225.4	249.5	2.7	477.6
Amounts provided	7.4	118.2	-	125.6
Amounts utilised / reversed	(17.0)	(45.8)	(1.4)	(64.2)
At 25 April 2021	215.8	321.9	1.3	539.0

During the period, onerous lease provisions (Pre-IFRS 16) were recognised due to an ongoing management review of the Group's store profile and strategy including current and anticipated freehold acquisitions, resulting in overall additional onerous provisions of £71.9m (FY20: £26.9m) in the period, with reference to the Groups alternative performance measures.

Reconciliation of underlying performance measures (EBITDA and PBT):

		52 weeks ended		52 weeks ended
		25 April 2021		26 April 2020
	EBITDA (£'m)	PBT (£'m)	EBITDA (£'m)	PBT (£'m)
OPERATING (LOSS) / PROFIT	(60.3)	-	171.9	-
Depreciation of property, plant and equipment and investment properties (excluding right-of-use asset)	218.3	-	130.8	-
Impairment of property, plant and equipment and investment properties (excluding right-of-use asset)	148.8	-	24.8	-
Amortisation of intangible assets	7.1	-	14.5	-
Impairment of intangible assets (non-exceptional)	-	-	5.9	-
IFRS 16 right-of-use asset depreciation	82.1	-	122.6	-
IFRS 16 right-of-use asset impairment	168.2	-	106.1	-
IFRS 16 disposal and modification/remeasurement of lease liabilities	(27.7)	-	(9.7)	-
	536.5	-	566.9	-
Share of (loss) / profit and impairments of associates	-	-	(15.9)	-
REPORTED	536.5	8.5	551.0	143.5

Exceptional items	1.6	1.6	13.1	13.1
	1.6	1.6	13.1	13.1
IFRS 16 Reversal of rent expense	(127.3)	(127.3)	(137.5)	(137.5)
IFRS 16 Reversal of onerous lease provision	(36.6)	(36.6)	(35.5)	(35.5)
IFRS 16 right-of-use asset depreciation	-	82.1	-	122.6
IFRS 16 right-of-use asset impairment	-	168.2	-	106.1
IFRS 16 disposal and modification/remeasurement of lease liabilities	-	(27.7)	-	(9.7)
Interest Payable - IFRS 16	-	11.8	-	10.9
	(163.9)	70.5	(173.0)	56.9
Profit on sale of properties:
Profit on sale of properties - pre-IFRS 16 basis	(9.7)	(9.7)	(109.3)	(109.3)
IFRS 16 sale and leaseback - adjustment to post-IFRS 16 basis	-	-	55.1	55.1
	(9.7)	(9.7)	(54.2)	(54.2)
(Profit) / loss on disposal of financial instruments	-	(48.5)	-	7.7
Realised FX loss / (gain)	26.3	26.3	(34.8)	(34.8)
Fair value adjustment on equity derivatives	-	(47.5)	-	26.9
Fair value adjustment on foreign currency contracts	-	4.6	-	(21.3)
Fair value gain on step acquisition	-	-	-	(20.4)
UNDERLYING	390.8	5.8	302.1	117.4

Reconciliation of Adjusted Profit/(loss) before Tax performance measure:

	52 weeks ended	52 weeks ended
	25 April 2021	26 April 2020
	PBT (£'m)	PBT (£'m)
REPORTED	8.5	143.5
Exceptional items	1.6	13.1
Fair value gain on step acquisition	-	(20.4)
Fair value adjustment to foreign currency contracts	4.6	(21.3)
Net investment (income) / costs	(96.0)	34.6
Realised FX loss / (gain)	26.3	(34.8)
Share scheme	1.3	-
ADJUSTED	(53.7)	114.7

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