-- Strong 2-year Ecommerce growth compared to FY20, but supressed year-on-year as we anniversary toughpromotion-driven comparatives and some trade switches back into physical stores; and

-- A modest, but sustainable revenue recovery in Wholesale

We expect margin to increase across all channels as we transition towards a full price stance, supported by further mix benefits from the switch back into stores.

We expect to generate operating leverage from reduced store rents and payroll compared to pre-Covid levels, although we anticipate a GBP35-45m year-on-year increase in costs due to one-off benefits recognised in FY21, such as the return of UK business rates, the end of furlough support, and the normalisation of other variable and discretionary costs.

Considering the above, we don't expect a change to the adjusted PBT market expectations for FY22.

We are continuing to focus on cash generation and working capital efficiency in FY22. We expect to reduce inventory by a further 2m units, which will partially offset the unwind of deferred rent and service charges (GBP40m, inclusive of VAT), some of which we expect to crystallise as permanent savings as we continue to negotiate lease terms.

Recognising the structural growth opportunity in Ecommerce, as well as the geographic and customer segmental targeting opportunities in our Wholesale business, we expect revenue to exceed peak historic levels in the medium term. Disciplined full price trading, continuing rent renegotiations, and the operating leverage from cost savings will also return the business to historic operating profit margins.

Notes

1. Foreign currency sales are translated at the average rate for the month in which they were made.

2. Fulfil From Store sales reallocated to Ecommerce in the current (GBP8.3m) and prior year comparatives (GBP1.6m).

3. 'Adjusted', 'Adjusting' and 'Net Cash' are used as alternative performance measures ('APMs'). Definition of APMs and how they are calculated are disclosed in the financial statements in Note 22. 'Net working capital' has been reconciled within the CFO Review.

4. 'Lost trading days' calculated as the simple average number of stores closed each day of the period as a percentage of total potential trading days in the period, excludes impact of restricted trading hours.

5. Sustainably sourced product defined as organic, low impact and/or recycled in line with our Environmental Policy.

6. Cash annualised saving has been calculated based on the effective date of the lease agreement.

Market Briefing

A webcast for analysts and investors will be held today starting at 09:00, followed by a Q&A with management. The webcast will be available to join live, but questions will be limited to analysts. If you would like to register, please go to https://secure.emincote.com/client/superdry/superdry009. A recording of the event will also be available on our corporate website shortly afterwards.

Superdry is pleased to announce the appointment of Peel Hunt LLP as joint corporate broker to Superdry, with immediate effect.

For further information:

Superdry: 


Adam Smith      adamj.smith@superdry.com      +44 (0) 1242 586747 
Candice Johnson candice.johnson@superdry.com  +44 (0) 1242 586747 
Peel Hunt:             +44 (0) 20 3128 8789 
George Sellar 
Michael Burke 
 
 
Numis:                 +44 (0) 20 7260 1000 
Luke Bordewich 
Edmund van der Klugt

Media enquiries 


Tim Danaher, Imran Jina superdry@brunswickgroup.com +44 (0) 207 404 5959

Notes to Editors

Our mission is "To inspire and engage style obsessed consumers, while leaving a positive environmental legacy" through hyper-segmentation of twelve consumer types across five collections. We design affordable, premium quality clothing, accessories and footwear which are sold around the world. We have a clear strategy for delivering continued growth via a multi-channel approach combining Stores, Ecommerce, and Wholesale.

Superdry has 231 physical stores and around 475 franchisees and licensees. We operate in over 50 countries and have over 3,750 colleagues globally.

Cautionary Statement

This announcement contains certain forward-looking statements with respect to the financial condition and operational results of Superdry Plc. These statements and forecasts involve risk, uncertainty, and assumptions because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. These forward-looking statements are made only as at the date of this announcement. Nothing in this announcement should be construed as a profit forecast. Except as required by law, Superdry Plc has no obligation to update the forward-looking statements or to correct any inaccuracies therein.

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain. The person responsible for this announcement on behalf of Superdry is Ruth Daniels, Group General Counsel and Company Secretary of Superdry.

Chair's Statement

Welcome to Superdry Plc's preliminary results for FY21. I was appointed Chair on 29 April 2021 and I am excited to work with another global brand. During my first few months in post, I have spent time with fellow Board members and senior colleagues at Superdry (as far as restrictions have allowed), familiarising myself with Superdry's business model and operations.

I would like to take this opportunity to thank former Chair, Peter Williams, for his work with the Board and Superdry from April 2019 to April 2021. I would also like to thank all of my new colleagues at Superdry, at our Head Office and in our stores and locations worldwide, for their continued hard work and commitment during this difficult and extraordinary year.

The ways in which the Covid-19 pandemic have impacted our customers, colleagues, suppliers and operations during FY21, and how we have responded to those challenges, have been set out in the Covid-19 Statement. The crisis encouraged the Executive Team to sharpen the strategy, accelerating reviews of digital platforms and of operations across all channels, enabling Superdry to emerge from the pandemic in a good position to drive the strategy forward. I invite you to read about our new strategy, led by Superdry's founder and CEO, Julian Dunkerton, and the Executive Team, in the Chief Executive Officer's Statement. Information on our financial results can be found in the CFO Review.

As the Executive Team starts to implement our new strategy, there is a lot of work to be done, but there is also a lot to look forward to.

Peter Sjölander

Chair, Superdry plc

Our response to Covid-19

Our response to Covid-19

Throughout the pandemic there has been a significant level of uncertainty with restrictions regularly changing depending on local Government advice. Taking decisive actions to protect the long-term financial position of Superdry, whilst ensuring the ongoing wellbeing, health, and safety of our colleagues and customers, has continued to be our top priority.

We have continued to trade online throughout the lockdown periods, sustaining operations in our distribution centres, whilst ensuring all appropriate measures were taken to ensure the health and safety of our staff.

During FY21, an average of 39%1 of store trading days were lost. However, by the end of June 2021, most of our owned stores had reopened.

Government support

As a consequence of the enforced store closures in FY21 and in order to preserve as many jobs as possible through the peak of the pandemic we furloughed staff across our international owned store estate, corporate offices and distribution centres. The support we received from applicable furlough (or similar) schemes across the UK and EU to date totals GBP12.1m, with GBP9.2m recognised in FY21. During the initial wave of the pandemic our Executive team took a temporary pay cut of 20% for three months from 1 April 2020, whilst our CEO and members of the Board took a cut of 25% for six months.

We also benefitted from UK Business Rates relief, equivalent to GBP15.7m in FY21 (FY20: GBP1.7m). Currently, this scheme has only been extended for a small number of our qualifying stores and the expected benefit in FY22 is roughly GBP5m. In addition, the business was eligible for GBP2.5m of local government grants across a number of markets (FY20: GBPnil).

As at FY21 year end the Group had a modest deferral of EUR1.5m for Belgian VAT, with no other material deferrals of VAT, PAYE, or duty across any other territories.

Cash management

Improving operational efficiency and overall liquidity has continued to be a focus during the pandemic through reduced capex, tight control over day-to-day spend and working collaboratively with suppliers.

In FY21, 39 stores' leases were renegotiated representing 17% of our portfolio. The total annualised cash benefit of the leases negotiated in FY21 was GBP5.3m2, with an average lease length of 3 years. In addition to the underlying reductions, there were GBP7.7m of one-off Covid related savings recognised in FY21 and we are anticipating in excess of GBP10m in FY22. Due to the continuing disruption from enforced closures, there was GBP40m of deferred rent and service charges, inclusive of VAT, as at the FY21 year-end, though we are yet to conclude on the majority of these contracts and so anticipate being able to reduce this liability during FY22.

Inventory decreased by GBP10.4m to GBP148.3m through reduced buys and targeted clearance activity, and we will continue to see opportunities to reduce our working capital further in FY22 through optimised stock management.

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