The below adjustments are disclosed separately in the Group statement of comprehensive income and are applied to the reported loss before tax to arrive at the adjusted loss before tax. Further information about the determination of adjusting items in financial year 2021 is included in note 22. 


                                                                                                   Group 
                                                                                                   2021   2020 
                                                                                                   GBPm     GBPm 
Adjusting items 
Unrealised (loss)/gain on financial derivatives                                                    (4.7)  1.9 
Net store asset impairment charges and reversals, and onerous property related contracts provision (15.8) (124.8) 
Non-store intangible asset impairments                                                             (2.1)  - 
Restructuring, strategic change and other costs                                                    (1.0)  (1.9) 
IFRS 2 charge on Founder Share Plan (note 9)                                                       (0.5)  (0.3) 
Total adjusting items                                                                              (24.1) (125.1) 
Taxation 
Tax impact of adjusting items (note 10)                                                            -      0.1 
Deferred tax on adjusting items                                                                    3.9    17.3 
Total taxation                                                                                     3.9    17.4 
Total adjusting items after tax                                                                    (20.2) (107.7)

Adjusting items before tax in the period totalled a charge of GBP24.1m in the year (2020: GBP125.1m charge).

Store asset impairment charges and reversals and onerous property related contracts provision

Comprehensive reviews have been performed in both the current and prior reporting periods across the owned store portfolio to identify any stores which were either unprofitable, or where the anticipated future performance would not support the carrying value of assets.

The prior period review, performed following the downgraded forecast in the medium-term plan driven by Covid-19, identified stores which were either unprofitable, at risk of becoming unprofitable over time, or where anticipated future performance would not support the carrying value of assets. The overall costs charged to the 2020 Group statement of Comprehensive Income of non-cash impairments were GBP136.8m, affecting around 177 stores. In addition, the reassessment of the onerous property related contracts provision resulted in a release of GBP12.0m, affecting around 35 stores. There were no releases of impairment provisions against specific stores in the prior year.

A subsequent review was performed in the current period, resulting from the continuing impact of the Covid-19 pandemic on trading performance across the store portfolio. This identified the need for an additional charge to the Group statement of Comprehensive Income for non-cash impairments of GBP22.8m, affecting 125 stores. Additionally, there is a non-cash credit of GBP12.1m in the Group statement of Comprehensive Income for the reversal of impairments that were recognised in previous periods, where revised future cash flow projections now support the carrying value of 52 stores. This includes a GBP5.6m impairment reversal for the Regent Street store. The total net impairment of GBP10.7m affects plant property and equipment and right of use assets. A significant level of estimation and judgement has been used to determine the charges and reversals.

A reassessment was also performed on the onerous property related contracts provision, resulting in a charge of GBP5.1m, affecting around 30 stores. Onerous property related contracts provisions are no longer recognised on rental expenses, following the transition to IFRS 16. A significant level of estimation has been used to determine the charges to be recognised.

Intangible asset impairments

The Group has recognised impairment charges in the period for website and software intangible assets. A review was performed during the period over website and software intangible assets which are likely to be replaced or upgraded in the foreseeable future, leading to an impairment of GBP2.1m. This is considered to be an adjusting item due to the one-off nature of this review.

Restructuring, strategic change and other costs

Adjusting items include GBP1.4m (2020: GBPnil) resulting from the restructuring programme announced in the FY20 Group Annual Report. This restructuring included redundancies in order to make the Group fit for the future. The Directors consider these to be adjusting items due to their one-off nature.

During the prior year, the Board and the Executive Committee reviewed the long-term business plan for the Trendy & Superdry Holding Limited joint venture. Following discussions with the joint venture partner and considering the challenging retail environment due to Covid-19, both parties agreed to end the relationship. Costs for the wind-up of the business totalling GBP1.5m were accrued for in 2020; these were adjusting items based on the one-off nature of this decision. A credit of GBP0.4m has been recognised in the current year for unutilised accrued amounts.

Unrealised gain/(loss) on financial derivatives

A GBP4.7m charge has been recognised within adjusting items in respect of the fair value movement in financial derivatives (2020: GBP1.9m credit), which has been driven primarily by the timing of derivatives and the strong Sterling position against the US Dollar at the year-end, and its impact on forward currency contracts, buying US Dollar with Sterling or selling Euro for Sterling (see note 20 for further details).

IFRS 2 charge on Founder Share Plan

The IFRS 2 charge of GBP0.5m (2020: GBP0.3m) in respect of the Founder Share Plan is also included within adjusting items (see notes 9 and 22 for further details).

Tax on adjusting items

The net tax credit on adjusting items totals GBP3.9m (2020: GBP17.4m credit). An adjusting tax credit of GBP1.4m (2020: GBP16.7m credit) arises as a result of impairments to the right of use assets, a GBP0.3m adjusting tax credit (2020: GBP1.5m credit) as a result of impairments to property, plant and equipment at the balance sheet date, and an adjusting tax credit of GBP2.2m (2020: GBP0.8m charge) arises in connection with movements on the derivative contracts and an updated onerous lease review.

8. Share based Long-Term Incentive Plans ("LTIP")

Share awards are granted to employees in the form of equity settled awards and cash settled awards.

Performance Share Plan

The award of shares is made under the Superdry Performance Share Plan ("PSP"). Shares have no value to the participant at the grant date, but subject to the conditions of the specific scheme can convert and give participants the right to be granted nil-cost shares at the end of the performance period.

The vesting period of these schemes is between two and three years. Share awards will also expire if the employee leaves the Group prior to the exercise or vesting date subject to the discretionary powers of the Remuneration Committee.

The movement in the number of these share awards outstanding is as follows: 


                                                  Group and Company 
                                                  2021          2021                 2020          2020 
                                                  Number of     Weighted average     Number of     Weighted average 
                                                  shares        exercise             shares        exercise 
                                                                price                              price 
At start of the period                            1,365,690     -                    684,868       - 
Granted                                           2,158,592     -                    1,026,040     - 
Exercised                                         -             -                    -             - 
Forfeited                                         (544,644)     -                    (176,041)     - 
Cancelled                                         (160,940)     -                    (169,177)     - 
Total number of outstanding share awards at end   2,818,698     -                    1,365,690     - 
of the period

None of the share awards were exercisable at the period end date (2020: nil).

The terms and conditions of the award of shares granted under the PSP during the year are as follows: 


              Group and Company 
Grant date    Type of award           Number of shares Vesting 
                                                       period 
October 2020  Restricted share award  1,491,157        3 years 
October 2020  Restricted share award  667,435          2 years

In 2021, the Company changed the award mechanism under the PSP from a scheme with market-based vesting criteria to a Restricted Share Awards (RSA) plan with no performance or market-based vesting criteria attached. The shares granted during the year are restricted share based conditional awards. The fair value of the shares awarded at the grant date during the year is GBP3.8m (2019: GBP2.9m), determined using the modified grant-date method. Shares awarded in previous years, which are still within their vesting period, contain market-based vesting criteria such as diluted earnings per share and total shareholder return performance targets. The fair value of these awards were determined at the grant date using a Black-Scholes pricing model.

A charge of GBP1.0m (2020: GBP0.5m) has been recorded in the Group statement of comprehensive income during the year for schemes under the PSP.

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