Performance Summary for the Half Year Ended 28 October 2023:
- Group sales decreased (4)% on a like-for-like basis to £4.159bn with a decline in all markets as consumer spending remained under pressure from persistent inflation and rising interest rates.
- Group posted an adjusted pre-tax loss of £16 million compared to a loss of £17 million in the same period a year earlier.
- Group adjusted EBIT of £31m up +7% YoY.
- Nordics profitability improved despite difficult consumer environment, with gross margins back up to the levels of two years ago.
- First-half free cash outflow limited to £(10)m (H1 2022/23: £(86)m).
- After period closed, agreed sale of Greece for an enterprise value of £175m and net proceeds of £156m, representing an attractive return for shareholders. Greece will be included in continuing operations until transaction completes.
Financial performance
- Group LFL revenue (4)%; Currency neutral revenue (4)%; Reported revenue (7)%.
- Group adjusted loss before tax £(16)m, in line with last year.
- UK&I LFL revenue (3)%, adjusted EBIT £15m, (40)% YoY – profit decline as improved gross margin and costs savings of £53m were more than offset by inflationary pressures and non-repeat of £11m of mobile revaluation.
- Nordics LFL revenue (6)%, adjusted EBIT £12m, +300% YoY – gross margin recovery of +190bps and cost actions offset continued market driven sales decline.
- Greece LFL revenue (4)%, adjusted EBIT £4m, +300% YoY.
- Group statutory loss before tax of £(46)m, from £(548)m in prior year.
- Period end net debt of £(129)m – first-half cash outflow of £(32)m, compared to £(149)m outflow in prior year.
- Period end IAS 19 pension deficit £(190)m, from £(249)m at year end.
Outlook
- Trading since the period end has been consistent with the Board’s expectations.
- No change to previous guidance.
- Greece disposal expected to receive final approvals and to complete in first quarter of 2024.
- Group expected to finish year in net cash position if disposal completes before year end.
Alex Baldock, Group Chief Executive“Our priorities this year are simple: to get the Nordics back on track, to keep up the UK&I’s encouraging momentum, while strengthening our balance sheet and liquidity. We’re making good progress on all these in a still challenging economic environment.In the Nordics, our trusted brands have delivered substantial gross margin gains, which combined with strong cost discipline have resulted in significantly improved profits. There’s still a long way back to healthy Nordics performance, but we’re on the way.In the UK&I, profits are in line with expectations, as we focus on more profitable sales and growing the services that drive margins and customer lifetime value. Credit, Care & Repair and iD Mobile are all performing strongly, while colleague engagement and customer satisfaction continue to rise.We’ve already substantially strengthened our balance sheet and liquidity this year. The proceeds of the planned sale of Kotsovolos, at a price that represents a very good outcome for shareholders, will strengthen us further. We’re confident we’re building a business that’s resilient today and fit to prosper long term.”Read the Trading StatementView the Presentation
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