ANNUAL
REPORT
2024
ANNUAL
REPORT
2024
2
Chairman and Chief Executive Officers’ Report
5
Our Brands
10
Directors’ Report
19
Remuneration Report
37
Auditor’s Independence Declaration
38
Statement of Profit or Loss and
Other Comprehensive Income
39
Statement of Financial Position
40
Statement of Changes in Equity
41
Statement of Cash Flows
42
Notes to the Financial Statements
77
Consolidated Entity Disclosure Statement
78
Directors’ Declaration
79
Independent Auditor’s Report
85
Shareholder Information
87
Corporate Directory
CONTENTS
Accent Group Limited (AX1) is a market
leading digitally integrated retail and
distribution business in the performance
and lifestyle market sectors.
1
Annual Report 2024
AT A
GLANCE
863
RETAIL STORES
32
WEBSITES
14
GLOBAL BRANDS
RETAIL BANNERS
20
10.2M
CONTACTABLE
CUSTOMERS
2
Accent Group Limited
CHAIRMAN
AND CHIEF
EXECUTIVE
OFFICERS’
REPORT
OPERATING REVIEW
Accent Group remains committed
to a long-term strategy of delivering
customers a best in class integrated
digital and instore experience.
Owned sales of $1.43 billion in
FY24 were up 3% on the prior
year. The owned sales result was
supported by continued online
sales growth and our integrated
omnichannel capability.
Retail & Wholesale
The Group opened 93 new stores
in FY24 and closed 19 stores where
required rent outcomes could not
be achieved. Our store development
team continues to prove that they
are best in class.
The Company remains focused on
growth and return on investment for
shareholders, with newer banners
such as Nude Lucy, Stylerunner,
HOKA and UGG performing
well, alongside continued growth
in Skechers, The Athlete’s Foot,
Hype DC and others.
As the Group adds and grows
new businesses, it also continually
evaluates business unit performance
to drive investor returns. This
ongoing process resulted in the
decision to exit 17 underperforming
stores relating to the Glue Store
business. The Trybe business has also
been sold and the CAT distribution
agreement will not continue
beyond its expiry at the end of
December 2024.
David Gordon
Chairman
Daniel Agostinelli
Chief Executive Officer
Dear fellow Shareholders,
We are pleased to present to you
the 2024 Annual Report for Accent
Group Limited (Accent Group,
Group or Company).
In the context of a more challenging
consumer environment, Accent
Group did not deliver the results
that we hoped could be delivered in
FY24. Total sales for the year were
$1.61 billion with net profit after tax
of $59.5 million. Trading through
softening conditions towards the end
of FY23 and into FY24 (Australians
having sustained 12 consecutive
interest rate increases since May
2022), Accent Group was able
to capitalise on the strength of
its brands and defensible market
position to finish the year with
positive sales momentum.
The management team maintained
its focus on driving return on
investment through meeting
customer demand and high service
expectations and offering new and
innovative products. This focus
has contributed to the profits and
shareholder returns for FY24.
The results delivered in FY24
continue the Company’s long-term
objective of delivering profits and
growing shareholder value and the
Board commends the efforts of the
Accent Group team throughout
the year.
$1.61b
Total Sales
(incl. TAF)1
$1.43b
Accent Group
Sales (company
owned)
1
Includes The Athlete’s Foot franchise
store sales (non-IFRS measure).
3
Annual Report 2024
This continued portfolio review
allows more capital and focus to be
applied to the highest performing
and growth businesses. In addition,
to respond to ongoing cost inflation
pressures, the Company has
initiated a program to deliver further
operational cost efficiencies which
are expected to improve CODB
performance across FY25-27.
Loyalty
Over the past year, contactable
customers grew from 9.8 million
to 10.2 million customers. We are
well placed to continue to service
the growing demand for digital
sales from customers with our
market leading, digitally integrated
consumer business, comprising 32
websites, 23 owned and distributed
FINANCIAL REVIEW
The Group’s net profit after tax for FY24 was $59.5 million. Your Board has declared a final fully franked dividend
of 4.50 cents per share, which brings the total dividends declared during the year to 13.0 cents per share.
Financials
($ millions)
FY24
FY23
Growth
Total Sales to Customers (incl. TAF)1
1,608
1,566
+2.7%
Accent Group Sales (company owned)
1,435
1,393
+3.0%
EBITDA
293.7
298.2
-1.5%
EBIT2
110.4
138.8
-20.5%
NPAT
59.5
88.7
-32.9%
EPS (cents per share)
10.61
16.16
-34.3%
Dividends (cents per share)
13.00
17.50
-25.7%
1
Includes The Athlete’s Foot franchise store sales (non-IFRS measure).
2
Included in the FY24 EBIT of $110.4 million is a non-recurring charge of $17.3m relating to store transition costs and carrying value provisions in several
underperforming Glue stores. The $17.3m comprises of: $14.1m impairment provision charge attributable to PPE/ROU assets; $0.6m PPE write-off in
relation to stores already transitioned in FY24; and $2.6m provision for write-down of inventories to net realisable value.
brands, 895 points of distribution
and now 10.2 million contactable
customers.
Customer loyalty programs continue
to be a focus for the Group, with a
key focus on delivering value and
increasing engagement across all
the Group’s programs.
CHAIRMAN
AND CHIEF
EXECUTIVE
OFFICERS’
REPORT
4
Accent Group Limited
SUSTAINABILITY
Accent Group will continue to focus on
preparing for the mandatory climate-related
financial disclosures despite its delay. The
Group’s achievements in this area will be
delivered in a more succinct report by way of the
2024 Sustainability Paper, which will be released
on the same date as this Annual Report.
BOARD CHANGES
As previously advised to shareholders, Stephen
Goddard and Joshua Lowcock retired from the
Board at the conclusion of the 2023 Annual
General Meeting. We are grateful to have been
the fortunate beneficiaries of their expertise and
exceptional contribution to the Board during
a period of rapid growth, and we acknowledge
and thank them for their outstanding service
to Accent Group.
As a part of the Board renewal process, we
welcomed two new directors to the Board,
Anne Loveridge AM and Lawrence Myers.
Their appointments reflect our continued focus
on orderly Board renewal and commitment
to succession planning. Their considerable
experience will further enhance the Board’s
broad range of skills, experience and diversity
and we look forward to their valuable
contributions to the Board.
CONCLUSION
FY24 year proved to be a challenging year in
a softer consumer environment, with the final
results below what we hoped could be achieved.
In this context the business continues to focus on
maximising annual performance and delivering
appropriate long-term growth and improved
shareholder returns.
David Gordon
Chairman
Daniel Agostinelli
Chief Executive Officer
“Our focus is on
driving return on
investment through
meeting customer
demand and high
service expectations
and offering new and
innovative products”
Skechers is a global leader in lifestyle
and performance footwear. Driven
by innovative comfort technology
and is always on trend. Skechers
offers a diverse range of footwear
and apparel for men, women and
children. We currently operate over
180 Skechers stores across Australia
and New Zealand.
Platypus is over 210 stores strong
across Australia and New Zealand.
It is now the region’s largest multi-
branded sneaker destination offering
the freshest footwear from the
biggest brands across the world.
Hype DC is the destination for the
latest exclusive footwear in Australia
and New Zealand. They specialise in
premium sneakers, short-run releases
and timeless classics. Established 20
years ago, Hype DC is the longest-
standing, Australian-owned footwear
retailer with over 80 locations.
With over 150 stores across Australia
and New Zealand, The Athlete’s Foot
is one of the region’s largest specialty
athletic and lifestyle footwear
retailers. They are well known for their
exceptional in-store customer service
experience and fitting technology.
Launched in 2012, Stylerunner offers
a highly edited set of global brands
and curated collections of women’s
activewear and sneakers. Stylerunner
opened its first store in 2020 and
now operates over 25 stores across
Australia and New Zealand.
ODE combines sophisticated
detailing with fashion pieces that
effortlessly style back with activewear
and sneakers to elevate the athleisure
wardrobe. Range is available
exclusively in Stylerunner stores.
5
Annual Report 2024
OUR BRANDS
OUR BRANDS
The Vans brand evolution continues,
with over 40 Vans stores across
Australia and New Zealand.
From its foundation as an original
skateboarding company to its
emergence as a leading action sports
brand, to its rise to become the
world’s largest youth culture brand.
Merrell is the world’s leading brand of
performance outdoor and adventure
footwear. Constantly innovating new
technologies and products to give
you the confidence to head outdoors
and go and seek and do. We operate
over 15 Merrell stores.
Inspired by the company’s New
England heritage, Timberland is a
brand true to the outdoor lifestyle. It is
a fashion staple on a global scale. We
operate 9 Timberland stores.
Glue Store is one of Australia’s leading
retailers for men’s and women’s
apparel. Delivering on trend clothing,
shoes and accessories from an
aspirational brand assortment that
empowers individuals to be fashion
leaders.
Born in 2010 in Sydney, Australia,
Nude Lucy provides a premium,
everyday wardrobe inspired by an
inherently Australian relaxed way
of life. Over a decade later, it is now
firmly established as a sought-after,
trustworthy and timeless destination
for casualwear, made by women, for
women with over 35 stores.
The Dr Martens range of footwear
was born in 1960. It is a representation
of rebellion and free-thinking youth
culture and made like no other shoe
on earth. With an expanding store
network, we now operate over 20
stores.
6
Accent Group Limited
Timberland Pro was born in 1999 and
brings premium and durable products
to professional tradespeople,
focusing on protection, performance
and comfort. The brand is committed
to delivering a greener future
by striving to create net positive
emissions by 2030.
OUR BRANDS
Saucony is synonymous with high
performance footwear and is a
leading global running lifestyle brand.
This focus and passion drives Saucony
to offer best in-class running shoes,
apparel and timeless retro footwear.
Founded on FEEL, UGG is dedicated
to long-lasting quality and enduring
designs that transcend trends. Bold,
provocative, and real, UGG is a
purpose-driven brand for those who
refuse to be defined by convention.
HOKA offers consumers
performance enhancing footwear
for all terrains. Established in 2009,
HOKA delivers classic and new styles
of running, walking, trail and hiking
shoes. Designed not only with eye-
catching colours but with the latest
technology-designed shoes that
provide ultimate comfort.
The Alpha range of footwear offers
an extensive range of back to school
footwear, designed for active kids to
wear all day long. Durability, multi-fit
and versatility are key to the success
of this brand.
SUBTYPE is a destination for
premium sneakers and apparel that
blurs the lines between fashion
and street. SUBTYPE’s unique,
conceptual stores are a cultural hub
and curate a full collection of apparel
and footwear from established and
upcoming labels.
7
Annual Report 2024
OUR BRANDS
Bold and edgy, Beyond Her is an
Australian fashion label known for
its strong 90’s vibe which combines
modern and vintage designs. A mix of
urban edge streetwear with elegant
and feminine fits that will take you
from casual and workwear to off-duty
and party outfits.
Made with the everyday traveller
in mind, Herschel’s collection of
bags and backpacks have been
thoughtfully designed. Combining
modern functionality with a touch of
nostalgia. Herschel is renowned for
their practical details; laptop sleeves,
hidden compartments and separated
sections for everything you need.
FIRST MSE is a brand that is bold,
confident and the new must-have
addition to the after-dark wardrobe.
With their range of clothing including
dresses and tops, FIRST MSE is
all about clean lines and sleek
silhouettes.
IN THE NAME OF aka, I–T–N–O is a
brand that’s constantly in the know
of the next footwear trend. Founded
in Melbourne and designed for the
ultimate trend setter, ITNO offers
a diverse range of sandals, boots,
sneakers and heels.
For over 100 years, Superga has been
known for their wide range of classic
sneakers and tennis shoes. Loved by
fashionistas, bloggers and trend-
setters alike, Superga, labelled as ‘the
people’s shoes of Italy’, has paved the
way for casual streetwear.
Founded in 2012, ARTICLE ONE’s
philosophy is to provide elevated
styles for the modern-day individual
which form the core of every
wardrobe. Every ARTICLE ONE
piece aligns with the distinctively
relaxed and effortless Australian
sensibility through fit, fabric, subtle
detailing and timeless colour palettes.
8
Accent Group Limited
Lulu & Rose is a contemporary
women’s label inspired by nostalgia,
flirtation and femininity. Bringing out
the hottest trends and styles, Lulu
& Rose will keep your outfit on point
through all four seasons.
OUR BRANDS
9
Annual Report 2024
10
Accent Group Limited
for the year ended 30 June 2024
DIRECTORS' REPORT
FY24 DIRECTORS’ REPORT
The Directors present their report, together with the financial statements of the consolidated entity (the Consolidated
Entity or Group) consisting of Accent Group Limited (the Company or Accent Group) and its controlled entities for the
year ended 30 June 2024.
1.
DIRECTORS
The following persons were Directors of Accent Group during the whole of the financial year and up to the date of this
report, unless otherwise stated:
–
David Gordon Chairman
–
Daniel Agostinelli Group Chief Executive Officer
–
Stephen Goddard (resigned 17 November 2023)
–
Michael Hapgood
–
Donna Player
–
Joshua Lowcock (resigned 17 November 2023)
–
Brett Blundy
–
Timothy Dodd alternate Director for Brett Blundy
–
Anne Loveridge AM (appointed 17 November 2023)
–
Lawrence Myers (appointed 17 November 2023)
2.
PRINCIPAL ACTIVITIES
Accent Group is a leading digitally integrated consumer business in the retail and distribution sectors of branded
performance and lifestyle footwear, apparel and accessories with over 890 stores across 20 different retail banners
and exclusive distribution rights for 14 international brands across Australia and New Zealand.
The Group’s banners and brands include The Athlete’s Foot (TAF), Platypus Shoes, Hype DC, Skechers, Merrell, CAT,
Vans, Dr. Martens, Saucony, Timberland, HOKA, Superga, Subtype, The Trybe, Stylerunner, Nude Lucy, Glue Store
and UGG.
3.
DIVIDENDS
Dividends paid or declared by the Company during, and since the end of, the financial year are set out in Note 25 to the
financial statements and summarised below:
FY24 Final
FY24 Interim
FY23 Final
FY23 Interim
Cents per ordinary share
4.50
8.50
5.50
12.00
Total amount ($’000)
25,337
47,859
30,968
66,295
Payment date
26 September 2024
21 March 2024
28 September 2023
9 March 2023
The total dividend for the financial year ended 30 June 2024 of 13.0 cents per share is a decrease of 25.7% on the
previous year.
4.
OPERATING AND FINANCIAL REVIEW
The Operating and Financial Review of the Group for the financial year ended 30 June 2024 is provided in the Chairman
and Chief Executive Officer’s Report on page 2 and forms part of this Directors’ Report.
5.
MATERIAL BUSINESS RISKS
The Group’s risk management framework enables it to continuously, systematically and actively monitor and manage
the potential risks which may adversely impact the operational and financial performance of its businesses, which in turn
may affect the outcome of an investment in the Group. There is no guarantee that the stated objectives of the Group will
be achieved. A variety of factors, both Group specific and of a general nature, may impact upon the Group’s activities
and results, including general economic and business conditions, inflation, interest and exchange rates, consumer
confidence, government policies and the trailing effects of the COVID-19 pandemic.
The Group considers the following to be business risks that are likely to have a material effect on its operational and
financial performance. An overview (and not exhaustive list) of mitigation actions taken by the Group is also set out.
11
Annual Report 2024
for the year ended 30 June 2024
DIRECTORS' REPORT
Type and description of risk
Mitigating Actions
Competition
The markets in which the Group operates remain highly
competitive, and any increased competition from new
and existing competitors may lead to price deflation and
a decline in sales and profitability, in particular:
–
Entrance of new international competitors
–
Aggressive discounting by local competitors
–
Growth in international online sites providing shipping
to Australia and New Zealand
–
DTC distribution strategies of global brands
–
Global luxury brands expanding in the lifestyle
footwear category
–
Competition from existing and new apparel brands and
retailers in the youth, lifestyle and athleisure segments
–
Implementing a world class omnichannel retail strategy
to ensure seamless customer experience
–
Opening new stores to increase market share in Australia
and New Zealand
–
Opening new and larger, or upgrading existing, stores in
locales where there is a heavy competitor presence
–
Development and execution of new brand formats and
product offerings in the performance, youth and lifestyle
footwear and apparel markets
–
Continuing to enhance online digital capability and sales
penetration
–
Monitoring international markets to identify
opportunities for growth
–
Developing a deeper understanding of our customers,
including through application of technological
developments, CRM, and face-to-face engagement
in-store
Changes in consumer behaviour
The Group is exposed to both the upside and downside of
cycles in consumer spending and demands, given that the
products offered by the Group are discretionary in nature.
Accordingly, customers' preferences, perception of
brands, and demographics are all considered risks,
in particular:
–
A reduction in consumer spending and demand may
lead to a decline in the Group’s sales and profitability
–
Trends in consumers shifting to online shopping drives
a prolonged decline in stores’ like-for-like sales growth
–
An acceleration of the online trend drives inaccurate
stock allocations in the short-term
–
Managing a diverse portfolio of brands, with appeal to
broader consumer demographic
–
Driving store rental reductions at renewal
–
Continued investment in store fit-out with each new
store and refurbished stores including new experiential
elements
–
Development of a forward-looking store performance/
profitability tool
–
Continuing to optimise the incremental digital costs for
marketing and distribution
–
Closely monitoring and responding quickly to changes
in the economic environment, consumer demand and
new products
Health and Safety
The Group is committed to the health and safety of its
team members, customers and contractors and places
a strong emphasis on the implementation of work health
and safety standards. However, risks still remain possible,
in particular:
–
Injury to a customer or a team member in work
locations
–
Death of a customer or a team member in work
locations
–
A natural disaster event impacting on the safety of
team members or customers
–
External events involving a team member or a member
of the public (e.g. self-harm, public situations) causing
trauma, distress and psychological harm
–
Incidents such as bullying or harassment of any nature
leading to mental health injuries
–
Established and regularly updating and implementing
a health and safety management system including
resources, training and procedures on physical health,
mental health, customer aggression and Respect at
Work obligations
–
Investigating every incident to mitigate against
reoccurrence
–
Implementing learning initiatives and improvements to
create safer work locations (including against customer
aggression)
–
Creating training modules to ensure that all team
members are inducted in safe work practices
–
Developing an auditing program to train leaders to
regularly identify safety risks
–
Establishing the Safety Steering Group which meets
regularly to discuss and review incidents
–
Engaging with government agencies to ensure legal
compliance
–
Engaging third party providers to support team
members with issues that may impact their wellbeing
–
Provide First Aid/CPR training to nominated
representatives in office locations, and Mental Health
First aid training to State and National Managers
12
Accent Group Limited
for the year ended 30 June 2024
DIRECTORS' REPORT
Type and description of risk
Mitigating Actions
Cyber Security and Information Technology
While an increased reliance on information technology
systems maximises the efficiency of the Group’s business
operations, any sustained and unplanned downtime due to
cybersecurity attacks, system failures, network disruptions
and other malicious or non-malicious incidents could have
a material adverse impact on the Group’s reputation, and
its operating and financial performance, in particular:
–
Corruption of inventory management software
–
External attack on websites
–
Internal/external unauthorised access to sensitive
commercial data
–
Internal/external unauthorised access to customer data
–
Fraudulent email phishing attacks resulting in
compromised infrastructure or systems
–
Third party actions resulting in technology failure
or malicious attack impacting ability to trade
(e.g. POS systems)
–
Documented disaster recovery processes (including
offsite information technology back-up infrastructure)
–
Implementing improved user access and profiling
–
Increasing the frequency of security assessments,
penetration and vulnerability testing using external
expert advisers
–
Implementing higher level password security and
change protocols
–
Implementing appropriate programs and tools to
identify and formalise the remediation of vulnerabilities
–
Reviewing payment card industry compliance
–
Exploring and, where appropriate, implementing
security tools based on artificial intelligence
–
Increasing sophistication of enterprise password tools
and protocols
Distributed brands and key supplier relationships
The Group enjoys strong partnerships with all major
suppliers, and its regional exclusivity with numerous
sought-after brands is a key distinguishing feature of
its product offering. Failing to maintain good working
relationships with key suppliers may lead to the
following risks:
–
Loss of a key distributed brand due to poor
management, lack of growth or brand preference
to manage the territory themselves.
–
Loss of a key global third party brand due to pressure
from competitors
–
Substantive change in distribution strategy of a key
supplier resulting in a substantial product ranging change
–
Implementing a thorough, methodical and effective
renewal program for distributed brands
–
C-suite engagement with distributed brand principals
over regular periods
–
Driving the mix and growth of distributed brands
–
Rolling out concept stores for distributed brands
–
Opening new store formats to increase category reach,
expanding the Group’s relevance as a distributor or
brand partner.
Sustainability and social responsibility
The sustainability of the Group’s business is impacted by
a number of environmental and social factors. Any actual
or perceived failure to adequately address sustainability
related issues may have an adverse effect on the Group’s
reputation, and operational and financial performance,
in particular:
–
Identifying issues in its supply chain (including modern
slavery practices)
–
Sourcing sustainable materials and packaging
–
Implementing product compliant systems to improve
product safety
–
Promoting gender equality
–
Responding inadequately to increasing demand
from consumers regarding traceability of products
and clearer and more meaningful labelling may lead
to reputational damage and potentially immediate
adverse political or customer actions
–
Establishing an Environmental, Social and Governance
(‘ESG’) framework
–
General purview of ESG under Group Chief Financial
and Operating Officer, with individual accountability
for implementation of initiatives sitting within each
business, with ultimate oversight by the Audit and Risk
Committee
–
Reporting on the Group’s progress of published targets
in the Sustainability Report annually with regular
monitoring throughout the year
–
Reporting annually on the Group’s Modern Slavery
Statement with regular monitoring throughout the year
–
Establishing a responsible sourcing framework under
which the Ethical Sourcing Policy was created, to be
distributed to relevant parties in the Group’s vertical
products supply chain
–
Reviewing the recommendations of the Financial
Stability Board’s Task Force on Climate-related
Financial Disclosures and local regulatory developments
and, if appropriate, provide an analysis of and make
disclosures aligned with, the recommendations
–
Commitment for gender equality in leadership roles
as published in the Group’s Sustainability Report and
Corporate Governance Statement annually
13
Annual Report 2024
for the year ended 30 June 2024
DIRECTORS' REPORT
Type and description of risk
Mitigating Actions
Legal, Regulatory and Compliance
The Group is required to maintain compliance with all
applicable laws and regulations, including those relating to
consumer protection, product quality, ethical sourcing and
corporate governance. Failure to comply with these laws
and regulations could result in high legal costs, adverse
monetary judgments, regulatory enforcement action and
other claims which could have a material adverse impact
on the Group’s reputation, and operational and financial
performance, in particular:
–
Aggressive or poorly controlled tax risk management
leading to misstatements of tax payable
–
Lack of focus on supply chain management, resulting
in an inability to meet Modern Slavery regulations
requirements
–
Poor management of PCI compliance, resulting in
monetary fines and regulatory breaches
–
Poor understanding of key pieces of legislation
impacting on the Group’s business leading to
regulatory breaches, significant monetary fines
and/or litigious action
–
Establishing policies, procedures and compliance
systems
–
Establishing a Group-wide Code of Conduct including
periodic reviews and attestations of compliance from the
senior management team
–
Establishing the Whistleblower Policy and dedicated
Whistleblower Protection Officer
–
Dedicated in‑house legal team
–
Regular consultation with professional advisers on key
areas of compliance risk
–
Actively monitoring changes to regulations and laws
–
Monthly financial and disclosures obligation reporting
–
Upweighted focus on tax risk compliance, including
the regular, systematic review of the effectiveness and
currency of the Group’s Tax Risk Management Policy
Black Swan events
While the impacts of the COVID-19 pandemic have largely
subsided, the Group may face altered societal behaviour
in relation to public health concerns (for example to
emerging epidemics), including:
–
Timing and nature of government containment
measures (which may again include lockdowns
and mandated store closures impacting profit and
cashflow)
–
Unforeseeable fluctuations in consumer demand by
state, and even local suburbs impacting profit and
cashflow
–
Risk of team member or customer infection resulting in
office(s) or store(s) closures
–
Risk of fines for regulatory breaches of government
safe operating requirements
–
Altered consumer behaviour (e.g. long-term shift
towards online shopping or significant reduction in
household spending)
–
Relevant health and safety protocols and policies
developed and in place to encourage personal hygiene,
physical distancing and management of mental health
–
Required personal protective equipment made available
in all offices and stores
–
Increased effectiveness and frequency of office and
store cleaning practices
–
Online/digital contingency plans developed and
implemented for potential rolling shutdowns
–
Able to quickly adjust marketing plans to support online
trading
–
Regular monitoring and communication to team
members of government updates and requirements
–
Factoring in the potential foreseeable impact of health
epidemics into forward sales, costs, inventory and
cashflow plans
6.
SUSTAINABILITY
A detailed account of our approach to business sustainability, covering people and safety, ethical sourcing, community and
the environment is contained in the Company’s 2024 Sustainability Paper.
14
Accent Group Limited
for the year ended 30 June 2024
DIRECTORS' REPORT
7.
INFORMATION ON DIRECTORS
Name
Particulars
David Gordon
Non-Executive Chairman
David has over 30 years’ experience as a director of both public and private companies
and working in corporate advisory roles to Australian and international organisations. He
brings extensive knowledge of mergers and acquisitions, as well as capital raisings, IPOs
and joint ventures.
David also has a proven track record in guiding businesses to harness their digital asset
capability to successfully explore and grow new markets.
David is a non-executive director of nib Holdings Limited (since May 2020) and was
appointed Chair in July 2021. He is also a director of its health fund subsidiary, nib Health
Funds Limited. He is also the Chairman of Shippit Pty Limited, Homecare Holdings
Pty Ltd, and Genesis Capital Manager 1 Pty Ltd. He is a Non-Executive Director of
international not-for-profit organisation High Resolves.
David has been a Non-Executive Director of Accent Group since October 2006 and was
appointed Non-Executive Chairman in November 2017.
David was also the Chairman of the People and Remuneration Committee for the
financial year ended 30 June 2024, and is a member of the Audit and Risk Committee.
Daniel Agostinelli
Chief Executive Officer
Daniel oversees the day-to-day operations of Accent Group. He has over 30 years
of retail experience and was formerly the CEO of Sanity Music and part owner of the
Ghetto Shoes sneaker business. Daniel has been with Accent Group since 2006 and
CEO of Accent Group since March 2015.
Michael Hapgood
Co-Founder and
Non-Executive Director
A founding Director and shareholder of Accent Group, Michael has extensive
knowledge of the processes required to effectively launch, source and manage
global brands within the Australasian market.
From Accent Group’s inception, Michael has been intimately involved in the
development of all major strategic initiatives for the business initially from 1988 as
marketing director before becoming CEO in 1998 until the sale to RCG Group in
May 2015. Michael then became Accent Group’s Chairman until August 2016 when
all ongoing executive roles were relinquished.
He continues as a Non-Executive Director and shareholder of Accent Group.
Donna Player
Non-Executive Director
Donna has over 35 years’ experience in retail including senior executive positions
in merchandising, planning and marketing with Big W and David Jones. Donna
is currently a Non-Executive Director of Baby Bunting Group Limited (since
January 2017) and is the Merchandise Director of Camilla Australia. Donna has
a proven track record in developing and delivering retail strategy and business
transformation.
Donna was appointed as a Non-Executive Director in November 2017 and
is a member of the People and Remuneration Committee.
Brett Blundy
Non-Executive Director
Brett is one of Australia’s best known and most successful retailers and entrepreneurs.
He is the Chairman and Founder of BBRC, a private investment group with diverse
global interests across retail, capital management, retail property, beef, and other
innovative ventures. BBRC’s retail presence extends to 2,000 stores across more
than 35 countries.
Brett is the Chairman of Lovisa Holdings Limited (since November 2018).
Brett was re-appointed as a Non-Executive Director of Accent Group in April 2021
and is a member of the Audit and Risk Committee.
15
Annual Report 2024
for the year ended 30 June 2024
DIRECTORS' REPORT
Name
Particulars
Anne Loveridge AM
Non-Executive Director
Anne has more than 30 years’ experience in business as a partner at PwC and as a
non-executive director of ASX listed companies. Anne is a qualified accountant (FCA).
During her career as a senior executive and partner, Anne gained deep experience
in business performance, client experience, stakeholder engagement, governance,
and people and culture. This included a particular focus on business growth and
change management, leadership development and succession, performance and
reward frameworks and promoting increased diversity. Anne’s experience as a non-
executive director includes being appointed to the board of National Australia Bank
(since December 2015), nib Holdings Limited (since February 2017), Platinum Asset
Management (since September 2016) and Destination NSW (since August 2021).
Anne was appointed to the Board as Accent Group as a non-executive director and
chair of the Audit and Risk Committee on 17 November 2023.
Anne is entitled to receive a retirement benefit from PwC as part of her retirement
plan. The amount of the payment was determined at the time of retirement, in 2015,
based on role and tenure with the firm. The benefit is not impacted by or related to
the financial performance of PwC. The Board is satisfied that this does not affect her
independence as Non-Executive Director and does not constitute a conflict of interest.
Lawrence Myers
Non-Executive Director
Lawrence has deep consumer retail and advisory board experience, working with
notable Australian retail brands such as Bec + Bridge, Cue Clothing Group and
Industrie Clothing, and is the Deputy Chair of Breville Group Limited. With more
than 20 years’ experience as a practising Chartered Accountant, Lawrence is also
the Managing Director and founder of high-end accounting firm MBP Advisory Pty
Limited, a non-executive director of Regal Asian Investments Limited (since September
2019), VGI Partners Global Investments Limited (since July 2017) and Foundation
of the Board of Trustees of the Art Gallery of New South Wales. He was recently
appointed as the Chief Executive Officer of Consolidated Press Holdings Pty Limited.
Lawrence was appointed to the Board of Accent Group as a non-executive director and
member of the People and Remuneration Committee on 17 November 2023, and as
Chair of the People and Remuneration Committee on 1 July 2024.
Timothy Dodd
Alternate Director for
Brett Blundy
Tim joined BBRC in September 2020 and serves as the Global CFO, covering all
investments and operations worldwide. Tim has over 30 years’ experience in financial
and operational roles across the banking, funds management, real estate and
investment sectors, and has worked in both publicly listed and private enterprises in
Australia.
Tim was appointed as alternate director for Brett Blundy on 2 June 2021.
8.
COMPANY SECRETARIES
The following persons were Company Secretaries of Accent Group during the whole of the financial year and up to the date of
this report:
Name
Particulars
Matthew Durbin
Matthew is Group Chief Financial and Operations Officer, having had his role
expanded during 2021 to have oversight of and responsibility for shared services of the
Group. He is also a joint Company Secretary. Matthew is a qualified accountant (FCPA)
with 30 years’ experience in retail. Prior to joining Accent Group, he was the CFO and
COO of The PAS Group and has also held executive roles with David Jones in strategy,
financial services and merchandise planning.
Matthew joined Accent Group in November 2017 and was appointed as the joint
Company Secretary in January 2018.
Alethea Lee
Alethea is Group General Counsel and joint Company Secretary with over 18 years’
experience in corporate governance, strategic corporate transactions, corporate
advisory, and commercial, consumer and competition law. Prior to joining Accent
Group, Alethea held senior legal and governance positions with Fairfax Media Limited
and David Jones Limited.
Alethea joined Accent Group and was appointed as the joint Company Secretary in
June 2021.
16
Accent Group Limited
for the year ended 30 June 2024
DIRECTORS' REPORT
9.
BOARD COMPOSITION AND INDEPENDENCE
The Board recognises the importance of having Directors who possess the combined skills, expertise and experience to
facilitate constructive decision making and follow good governance processes and procedures.
The table below outlines the mix of skills and experience considered by the Board to be important for its Directors to
collectively possess. The Board considers that collectively it has an effective blend of these skills to enable it to discharge
its duties and effectively govern the business and add value in driving the Group’s strategy.
Skill
Description
Strategy and planning
Ability to think strategically and identify and critically assess opportunities and threats
and develop effective strategies in the context of changing market conditions.
Operations
A broad range of commercial and business experience in business systems, practices,
improvements, risk and compliance, sales, technology and human resources.
Capital markets and M&A
Expertise in considering and implementing efficient capital management including
alternative capital sources and distributions, yields and markets.
Experience in all aspects of the negotiation, structuring, risk management and
assessment of both acquisitions and divestments.
Finance and tax
The ability to analyse financial statements and reporting, critically assess the financial
performance of the Group, contribute to budget planning and efficient use of capital
and resources, and demonstrable ability to assess, understand and manage tax risks
and obligations.
Sales and marketing
Clear understanding of retail selling and marketing, developing and implementing
sales and marketing teams and strategies, recruiting, running and incentivising sales
teams, and setting sales budgets and targets.
Retail experience
(physical and digital)
Experience and broad understanding of the physical and online retail footwear
and apparel industry, including market drivers, risks and trends including policies,
competitors, end users, regulatory policy and framework.
People and performance
Appreciation for the best practices in HR planning and management with familiarity
in employment legislation and labour relations, recruitment, compensation,
performance reviews and conflict management.
Technology, data and privacy
Expertise in the area of technology that the Group should be aware of and utilising,
including keeping abreast of new and emerging technology.
Governance, compliance and
risk management
Ability to identify key risks to the group in a wide range of areas including legal and
regulatory compliance and monitor risk and compliance management frameworks and
systems.
Knowledge and experience in best practice ASX and Corporations Act, governance
structures, policies and processes.
Director independence
Daniel Agostinelli is a full-time executive and therefore not considered independent.
Of the remaining six non-executive Directors, four are considered by the Board to be independent – David Gordon,
Donna Player, Stephen Goddard and Joshua Lowcock (both until November 2023) and Anne Loveridge AM and
Lawrence Myers (both from November 2023).
Notwithstanding the tenure of Mr Gordon, the Board considers him to be independent and the Company is well
served by Mr Gordon’s deep understanding of Accent Group and its business as a result of his longer tenure. Given
Mr Gordon’s tenure of over 10 years, the Board regularly assesses whether he has become too close to management
to be considered independent. The Board regularly conducts such an assessment, and has recently reconfirmed
Mr Gordon’s independence, on the basis that he is non-executive, not a substantial shareholder, and conducts himself
at arm’s length in his engagement with the Company. He brings his considerable skills and knowledge to bear on matters
before the Board. The Board considers that Mr Gordon’s approach to matters of the Board is always independent in
both appearance and in fact.
17
Annual Report 2024
for the year ended 30 June 2024
DIRECTORS' REPORT
Mr Hapgood is related to two of the senior executives of the Company and is not considered independent. However,
as a non-executive director, Mr Hapgood is not involved in the day-to-day operating decisions of the business and
therefore able to bring clarity and considerable skills and knowledge to bear on matters before the Board. Due to his
familial links with two executives, Mr Hapgood does not participate in any Board matters relating to management
remuneration other than the CEO.
Mr Blundy is a substantial shareholder and is therefore not considered to be independent. However, as a non-executive
director, he is not involved in day-to-day operating decisions of the business and therefore able to bring clarity and
considerable skills and knowledge to bear on matters before the Board. The Board considers that Mr Blundy draws on
his considerable skillset to act in the best interests of the Company and its shareholders. Similarly, Mr Blundy’s alternate
director is not considered to be independent.
10. MEETINGS OF DIRECTORS
The following table sets out the number of Directors' meetings (committee meetings) held during the year ended 30
June 2024 and the number of meetings attended by the members of the Board or the relevant committee. During the
financial year, six Board Meetings, four Audit and Risk Committee meetings, four People and Remuneration Committee
meetings, one Nominations Committee meeting, and two Digital Strategy Group meetings were held.
Directors have a standing invitation to attend meetings of Board committees of which they are not members.
All Directors receive copies of the agendas, papers and minutes of each Board committee meeting (appropriately
redacted, where necessary).
Full Board
Audit and Risk
Committee
People and
Remuneration
Committee
Digital Strategy
Group3
Nominations
Committee
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Held
Attended
David Gordon
6
6
4
4
4
4
2
1
1
1
Daniel Agostinelli
6
6
–
–
–
–
–
–
–
–
Stephen Goddard1
3
3
2
2
2
2
–
–
1
1
Michael Hapgood
6
6
–
–
–
–
2
2
1
1
Donna Player
6
6
–
–
4
4
–
–
1
1
Joshua Lowcock1
3
2
2
1
–
–
2
2
1
0
Brett Blundy
6
4
–
–
–
–
–
–
1
1
Timothy Dodd
6
2
4
4
–
–
–
–
–
–
Anne Loveridge AM2
3
3
2
2
2
2
–
–
–
–
Lawrence Myers2
3
3
2
2
2
2
–
–
–
–
1 Resigned on 17 November 2023
2 Appointed on 17 November 2023
3 Dissolved on 16 November 2023
Held: represents the number of meetings held during the time the Director held office.
11.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
In the Directors’ opinion, there have been no significant changes in the state of affairs of the Group during the year.
12. MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
On 11 July 2024, the Group entered into an agreement to sell the Trybe business. The sale has completed in August
2024. The relevant financial effect is immaterial and will be accounted for in the financial year ending 29 June 2025.
See Note 25 for dividend declared.
Apart from the matters described above, no other matters or circumstances have arisen since 30 June 2024 that have
significantly affected, or may significantly affect the Group's operations, the results of those operations, or the Group's
state of affairs in future financial years.
18
Accent Group Limited
for the year ended 30 June 2024
DIRECTORS' REPORT
13. LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
Expected future developments (except for those considered to be commercially sensitive) are outlined in the Chairman
and Chief Executive Officer’s Report, Section 5 - Material business risks of this report and Section 12 - Matters
subsequent to the end of the financial year of this report.
14. ENVIRONMENTAL REGULATION
The operations of the Group are not subject to any particular and significant environmental regulation, and did not incur
any significant liabilities under any environmental legislation during the financial year. Disclosures regarding the Group’s
material sustainability-related issues can be found in its Sustainability Report.
15. INDEMNITY AND INSURANCE OF OFFICERS
The Company has indemnified the Directors and executives of the Company for costs incurred, in their capacity as
a director or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the Directors and executives
of the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance
prohibits disclosure of the nature of the liability and the amount of the premium.
16. PROCEEDINGS ON BEHALF OF THE COMPANY
No proceedings have been brought or intervened in on behalf of the Company with the leave of the court under
section 237 of the Corporations Act 2001. No person has applied to the court under section 237 of the Corporations
Act 2001 for leave to bring proceedings on behalf of the Company, or to intervene in any proceedings to which the
Company is a party.
17.
AUDITOR
The appointment of PricewaterhouseCoopers by the Board as the new auditor was approved by the shareholders of the
Company on 17 November 2023. It continues in office in accordance with section 327 of the Corporations Act 2001.
18. INDEMNITY AND INSURANCE OF AUDITOR
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor
of the Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the
Company or any related entity.
19.
NON-AUDIT SERVICES
As set out in Note 29 to the financial statements, the auditor did not provide any non-audit services to the Company
during the financial year.
20. ROUNDING OF AMOUNTS
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with
that Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
21. AUDITOR'S INDEPENDENCE DECLARATION
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set
out on page 31.
19
Annual Report 2024
30 June 2024
REMUNERATION REPORT
FY24 REMUNERATION REPORT
Letter from the Chair of the People and Remuneration Committee
Dear Shareholders,
On behalf of Accent Group, I present the FY24 Remuneration Report outlining the Group’s remuneration strategy and
framework, and decisions taken by the Board in relation to the remuneration of key management personnel (KMP).
This report sets out how the Board has approached remuneration in the context of the significant business growth achieved
over the last five years. Notwithstanding this, we acknowledge that FY24 was a challenging year and the financial results of
the Company were not what we hoped could be delivered. It is in this context that we present the remuneration outcomes,
which reflect the challenging consumer environment and the financial results achieved in FY24.
Our Business Strategy
Accent Group continued to invest in the strategic priorities of the business, both for future growth and to continue the
journey as a regional leader in the retailing and distribution of performance and lifestyle footwear and apparel.
The management team continued to drive store network growth and opened 93 new stores during the financial year.
The Group operates over 890 stores across 20 different retail banners with exclusive distribution rights for 14 international
brands throughout Australia and New Zealand.
In a year characterised by a more challenging consumer environment and inflationary pressures, the Company has
remained focused on growth and return on investment for shareholders. Highlights for the year include the strong
contribution of our newer banners including Nude Lucy, Stylerunner, HOKA and UGG along with continued strong
performance in Skechers, The Athlete’s Foot (TAF), Hype DC and others. In addition, the management team’s focus on
improving the efficiencies and capabilities in its digital operations has seen an increase in the profitability of its digital
sales. The Company remains focused on improving shareholder returns. Aligned to this objective, it continues to review
and evolve its brand portfolio including the sale of The Trybe business, discontinuing the distribution of CAT at agreement
expiry in December 2024 and the decision to exit 17 underperforming stores for the Glue Store business. This continued
portfolio review will allow more capital and focus to be applied to the highest performing and growth businesses.
Our Performance
In FY24 we achieved Earnings Before Interest and Tax (EBIT) of $110.4m, down 20.5% on FY23 (FY23: $138.8m; FY22:
$62.3m EBIT). The Board considers that the long-term performance of Accent Group taken over the past 10 years has been
commendable, delivering shareholders a 10-year compounding total shareholder return of more than 20% to 30 June
2024.
The Board considers that the overall performance of Accent Group taken over the past 10 years has been commendable,
delivering shareholders a 10-year compounding total shareholder return of more than 20% to 30 June 2024.
Continuous Improvement in Remuneration Practices
The Company continues to respond to feedback received from Shareholders and their advisors in relation to the
Company’s remuneration practices.
The Board maintains its commitment to continue to improve transparency in the Remuneration Report in relation to
remuneration outcomes. For the FY24 performance period, the primary financial metric for the Short-Term Incentive
(STI) program remained unchanged from FY23 and is reported EBIT (no underlying or other discretionary adjustments
have been applied). Additional detail has been provided in relation to the performance outcomes for the strategic
objective measures in the CEO and CFOO STI outcomes in accordance with feedback received in FY22.
In relation to the Company’s Long-Term Incentive (LTI) program, the Board still considers a single metric program, using
Adjusted Diluted Earnings Per Share (ADEPS) as the measure, to be the best approach for the delivery of a scheme that
is both easy to understand and that also drives a real incentive during each year of the plan.
20
Accent Group Limited
30 June 2024
REMUNERATION REPORT
FY24 Remuneration Outcomes
The financial performance of the Company in FY24 has resulted in the following remuneration outcomes. It is important to
note that all financial outcomes with respect to the FY24 STI and LTI programs have been assessed, including the impact
of charges relating to the exit of underperforming stores in the Glue Store business, and that no adjustments or discretion
have been applied to these assessments.
–
With respect to FY24, the financial performance hurdles required for the payment of 70% of the FY24 short term
incentive were not achieved. A partial number of the strategic measures required for the payment of 30% of the
short-term incentive were achieved. On this basis, the Board determined that STI would be paid in line with strategic
measures achieved, with the CEO and CFOO each achieving 10.2% of the maximum STI payable.
–
In respect of Tranche 4 (FY20-FY23) of the Company’s Performance Rights Plan (issued in November 2019),
it was determined in FY23 that the required minimum 10% compounding growth per annum in ADEPS for the period
FY20-FY23, being 13.97 cents per share or more, had been met with the actual ADEPS for FY23 being 15.62 cents
per share. On this basis the Board approved the performance condition for the Tranche 4 rights as having been met,
and those participants who met the time-based condition of being employed on 1 July 2024 will be notified that the
tranche has vested.
–
In respect of Tranche 5 (FY21-FY24) of the Company’s Performance Rights Plan (issued in November 2020),
the required compounding growth per annum in ADEPS for the period FY21-FY24 was not met and as such,
no performance rights will vest from Tranche 5.
In conclusion, I am pleased to present the Company’s FY24 Remuneration Report which includes significant additional
disclosure compared to prior years.
Yours faithfully,
David Gordon
Chairman of the People and Remuneration Committee
23 August 2024
21
Annual Report 2024
30 June 2024
REMUNERATION REPORT
FY24 REMUNERATION REPORT
1.
REMUNERATION OVERVIEW
1.1.
Details of Management Personnel (KMP)
Key management personnel are those persons having authority and responsibility for planning, directing and controlling
the activities of the entire entity, directly or indirectly, including all Directors.
Executive Director
Daniel Agostinelli
Group Chief Executive Officer
Full year
Senior Executives
Matthew Durbin
Group Chief Financial and Operating Officer
Full year
Non-Executive Directors
David Gordon
Chairman
Full year
Michael Hapgood
Director
Full year
Stephen Goddard
Director
Resigned 17 November 2023
Anne Loveridge AM
Director
Appointed 17 November 2023
Lawrence Myers
Director
Appointed 17 November 2023
Donna Player
Director
Full year
Joshua Lowcock
Director
Resigned 17 November 2023
Brett Blundy
Director
Full year
Timothy Dodd
Alternate Director
Full year
1.2. People and Remuneration Committee (PARCO) and Nomination Committee
The Board has established a People and Remuneration Committee (PARCO) which operates under the delegated
authority of the Board of Directors. The following Non-Executive Directors are members of PARCO:
Mr D Gordon
Independent Non-Executive Committee Chair to 30 June 2024
Ms D Player
Independent Non-Executive Director
Mr L Myers
Independent Non-Executive Director (appointed 17 November 2023) and Committee Chair
from 1 July 2024
Ms A Loveridge AM
Independent Non-Executive Director (appointed 17 November 2023)
Mr S Goddard
Independent Non-Executive Director (resigned 17 November 2023)
PARCO is authorised by the Board to obtain external professional advice, and to secure the attendance of advisers with
relevant experience and expertise when it considers this necessary.
The Group’s remuneration strategy is designed and implemented on behalf of the Board by PARCO. PARCO then makes
recommendations to the Board on matters relating to remuneration for the entities within the Group. PARCO considers
recruitment, retention and termination policies and procedures, non-executive Directors’ remuneration, executive
Directors and KMP remuneration and incentive policy and awards, and contractual arrangements with KMP.
More detail on the Company’s remuneration policy is provided in the Corporate Governance Statement.
The Nomination Committee comprises all of the Non-Executive Directors of the Company.
The Nomination Committee is charged with overseeing, monitoring and evaluating Board performance, ensuring
appropriate induction and professional development programs for directors, and succession planning. In addition
to making recommendations to the Board on the above, it is also responsible for recommending to the Board (once
identified) the best-qualified candidates for the Board of Directors.
22
Accent Group Limited
30 June 2024
REMUNERATION REPORT
1.3. Use of Remuneration Consultants
Where PARCO determines it may benefit from external advice, it may engage directly with a remuneration consultant,
who reports directly to the Committee. In selecting a suitable consultant, the Committee considers potential conflicts of
interest and requires independence from the Group’s KMP as part of their terms of engagement.
1.4. Board Policies for Determining Remuneration
The Board understands that the performance of the Group is driven through the quality and motivation of its people,
including the CEO and executive team and the approximately 8,700 team members of the Group across Australia
and New Zealand. The Group’s remuneration strategy is designed to attract, motivate and retain high quality and high
performing employees, while ensuring that the interests of employees are in line with the interests of shareholders. Our
strategy is guided by our vision to be the leader in the performance and lifestyle footwear and apparel markets across
Australia and New Zealand, by delivering world-class customer experiences, and harnessing the power of our people,
brands and products. The Board aims to achieve this by setting market competitive remuneration packages that consist
of a mix of fixed remuneration, short-term incentives to reward annual performance and long-term incentives that align
to long-term financial performance and long-term shareholder value creation.
Our remuneration framework is guided by the key principles of alignment with:
–
Delivery of long-term returns to shareholders through the delivery of sustainable sales and profit growth across the
business
–
Delivery of sustainable growth in dividends flowing from the strong cash flows from its defensible and desirable
business
–
Maintaining a strong, conservatively geared balance sheet
–
Adherence to the Group’s Code of Conduct and Company values
–
Encouraging a culture of equality and diversity
The Group’s remuneration reviews take place within three months of the end of each financial year. Prior to these
reviews, the CEO makes recommendations to PARCO regarding the remuneration of each of his direct reports and
the overall remuneration framework for all employees. PARCO meets to consider those recommendations, and also
discusses and recommends the remuneration of the CEO to the Board.
2.
REMUNERATION COMPONENTS
The key features of the Executive KMP remuneration structure are outlined below:
Type of remuneration
Total Executive Remuneration
Fixed
At risk
Fixed remuneration
Short-term incentive
Long-term incentive
How is it set
Fixed remuneration is
set with reference to
market competitive
rates in comparable
ASX listed companies
for similar positions,
adjusted to account for
the experience, ability
and productivity of the
individual employee.
The Group’s STI plan
is tied directly to the
achievement of profit
growth in the case of
KMP, this is based on the
Group as a whole
Refer to section 2.3 for
further details.
The Company
has established a
Performance Rights
Plan. There have been
a number of tranches
of performance rights
issued under the plan,
each requiring a target
achievement of 10% (or
greater) compounding
earnings per share
growth over the relevant
performance period.
Refer to section 2.4 for
further details.
How is it delivered
–
Base salary
–
Superannuation
–
Other benefits
(e.g. motor vehicle)
–
100% cash
–
Performance rights
that vest at the end
of the performance
period if vesting
conditions are met
–
Escrow periods may
also apply
23
Annual Report 2024
30 June 2024
REMUNERATION REPORT
Type of remuneration
Total Executive Remuneration
Fixed
At risk
Fixed remuneration
Short-term incentive
Long-term incentive
What is the objective
–
Attract and retain key
talent
–
Be competitive
–
Support workplace
diversity and equality
–
Drive annual
profit growth and
shareholder returns
–
Reward value
creation over a one-
year period whilst
supporting the long-
term strategy
–
Incentivise desired
behaviours in line
with the Group’s risk
appetite
–
Support delivery
of the business
strategy and growth
objectives
–
Incentivise long-term
value creation and
shareholder returns
–
Drive alignment
of employee and
shareholder interests
2.1. Link between financial performance, shareholder wealth and remuneration
The Group’s executive remuneration is directly related to the performance of the Group, through the linking of
incentives to certain financial measures as detailed previously and shown below.
The financial performance of the Group and shareholder value creation over the last 5 years is also summarised in the
table below.
FY20
FY21
FY22*
FY23
FY24
Growth YoY
CAGR
Last
5 years
Revenues ($'m) (inc. Franchisees
and Other Income)
830.1
993.8
1,130.6
1,422.1
1,456.2
2.4%
15.1 %
EBITDA ($'m)
202.9
242.0
213.6
298.2
293.7
(1.5%)
9.7%
EBIT ($'m)
94.5
124.9
62.3
138.8
110.4
(20.5%)
4.0%
Net profit attributable to the
owners of the Company ($'m)
55.5
76.9
31.5
88.7
59.5
(32.9%)
1.8%
EPS** (cents)
10.28
14.21
5.81
16.16
10.61
(34.3%)
0.8%
Shareholder value created:
Market capitalisation ($'m)***
797.0
1,496.0
661.1
928.1
1,089.5
17.4%
8.1%
Enterprise value($'m)***
828.2
1,563.0
780.4
1,047.7
1,211.7
15.7%
10.0%
Movement in enterprise value
during the financial year ($'m)
29.1
734.8
(782.7)
267.3
164.0
Dividends paid during the
financial year ($'m)
48.8
65.0
31.2
88.0
78.8
(10.5%)
12.7%
Closing Share Price ($)
1.47
2.76
1.22
1.68
1.94
15.5%
7.2%
DPS**** declared (cents)
9.25
11.25
6.5
17.5
13.0
(25.7%)
8.9%
*
No STI was paid in FY22
**
Earnings Per Share
*** Based on last ASX trading day prior to financial year end (FY24: 28 June 2024; FY23: 30 June 2023).
**** Dividend Per Share
24
Accent Group Limited
30 June 2024
REMUNERATION REPORT
KMP remuneration and EPS over the last 5 financial years
The graph below shows the relationship between total KMP remuneration and EPS over the past five years and the
relationship between KMP remuneration and Company performance, specifically, the total aggregate remuneration of
the KMP team for each year from FY20 to FY24 as set out in the Remuneration Report each year.
*
In FY22 no STIs were paid to KMPs
Company financial performance and share price
The long-term effectiveness of the Company’s performance-related remuneration strategy and the strong alignment
between financial performance and executive remuneration is demonstrated by the relative outperformance of the
Company’s share price over the last 10 years.
0
200
400
600
800
1,000
1,200
1,400
1,600
830
994
1,131
1,422
1,456
FY20
FY21
FY22
FY23
FY24
FY20 to FY24 Revenues ($m)
0
20
40
60
80
100
120
140
160
95
125
62
139
110
FY24
FY20
FY21
FY22
FY23
FY20 to FY24 EBIT ($m)
0
5
10
15
20
13.00
9.25
10.61
11.25
10.28
14.21
6.50 5.81
17.50
16.16
FY24
FY20
FY21
FY22
FY23
DPS
EPS
FY20 to FY24 DPS & EPS (Cents)
0
2
4
6
8
10
12
14
16
18
10.28
14.21
5.81
16.16
FY24
FY20
FY21
FY22
FY23
10.61
FY20 to FY24 EPS (Cents)
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12.00
13.00
14.00
15.00
17.00
16.00
EPS (cents)
1,150
150
-850
2,150
3,150
4,150
5,150
6,150
KMP Remuneration ($'m)
FY20
FY21
FY22*
FY23
FY24
Fixed
STI
LTI
EPS
25
Annual Report 2024
30 June 2024
REMUNERATION REPORT
The following chart demonstrates the 10-year outperformance of the Company’s share price relative to the ASX200.
Remuneration Mix
The total remuneration for the KMP comprises both fixed remuneration and at-risk components in STI and LTI. The table
shown below indicates the potential remuneration mix based on the fixed remuneration as of 30 June 2024 with STI and
LTI presented at maximum and target opportunities respectively.
Executive KMP
Fixed
Remuneration
STI
LTI
Total
Daniel Agostinelli
33.3%
33.3%
33.3%
100%
Matthew Durbin
33.3%
33.3%
33.3%
100%
33.3%
33.3%
33.3%
Matthew
Durbin
Fixed
STI
LTI
33.3%
33.3%
33.3%
Daniel
Agostinelli
Fixed
STI
LTI
AX1
ASX200
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY23
FY22
FY24
$3.50
$3.00
$2.50
$2.00
$1.50
$0
$0.50
+44.0%
+207.1%
Source: FactSet. Market data as at 28 June 2024
1.
ASX200 share price performance rebased to AX1 from 30 June 2014.
$1.00
26
Accent Group Limited
30 June 2024
REMUNERATION REPORT
2.2. Fixed Remuneration
Fixed remuneration is set with reference to market competitive rates in comparable ASX listed companies for
similar positions, adjusted to account for the experience, ability and productivity of the individual employee. Fixed
remuneration includes base salary along with any fringe benefits to the employee and statutory superannuation
contributions.
To ensure appropriate and competitive remuneration for FY24, PARCO considered the remuneration levels and
structures for the CEO and CFOO with reference to:
–
external listed comparable remuneration benchmarks
–
the competency and skillsets of the individuals and their performance over the long term
–
the scarcity of talent and the importance and value of retaining key executives
–
changes in the complexity, organisational structure and geographical spread of the Company
In respect of FY24 and as advised in the FY23 Remuneration Report, the Company retained Morrow Sodali to provide
an independent report on comparable remuneration benchmarks. No remuneration recommendations were provided
by Morrow Sodali under the definition of the Corporations Act 2001. Consideration was also given to:
–
the growth that the management team has continued to drive over the last two years
–
no increases having been applied to CEO or CFOO remuneration for FY23
–
the significant increase in the Group’s net profit in FY23, which was a record profit year
In consideration of these factors for FY24, the fixed remuneration of the CEO was increased from FY23 by 13.3% and by
7.7% for the CFOO effective from 1 July 2023. Inclusive of the 1 July 2023 increase, since FY20, base CEO remuneration
has increased by 32.8% and CFOO remuneration by 27.3%. These increases are in context of a 75% increase in revenues
and a 7% increase in net profit after tax over the same period.
The Board has determined that the fixed remuneration for the CEO and CFOO remain appropriate for FY25 and no
additional increase will be applied.
2.3. STI Plan
Purpose and Objectives
The Group’s STI program is designed to drive the Company’s objective of delivering profit growth and shareholder
returns, whilst also ensuring the achievement of strategic objectives that are aligned with current and future profit
growth. KMP have a significant proportion of their STI tied directly to the achievement of profit growth, either for
the Group as a whole or a relevant business unit or both (as the case may be). All STI payments are also subject to an
assessment by PARCO of individual non-financial performance measures related to strategy implementation, leadership
and behaviours consistent with the Group’s values and corporate philosophy.
The Group believes that by implementing the STI program, KMP are best positioned to effectively carry out their duties
in achieving the strategic objectives of the company. The Group also expects KMP to continue to drive the values
engrained within the Group’s culture and Code of Conduct, acting in the best interests of shareholders and other
stakeholders and in turn driving success for the Group along with long term shareholder value creation.
27
Annual Report 2024
30 June 2024
REMUNERATION REPORT
Structure
The STI program in FY24 was structured as follows:
FY24 STI Plan Structure
Performance period
12 months
Opportunity
CEO – 100% of fixed remuneration at maximum
CFOO – 100% of fixed remuneration at maximum
How the STI is paid
Cash
Performance measures/KPIs
1. EBIT growth – 70%
2. Measurable strategic objectives – 30%
Performance conditions
Financial Condition – 70% Weighting
–
Achievement of Accent Group EBIT budget
–
The Group EBIT budget was set at an increase of 12% growth on FY23 to
$144.5m (Hurdle)
–
Achievement of aged inventory of less than 2.5% of total inventory
(Downward Modifier)
Strategic Objectives condition – 30% Weighting
–
The STI award is also subject to achieving the following quantitative strategic
objectives.
1.
New stores
Achieve above 90% of budgeted sales and EBIT performance and meet
required Return on Invested Capital (ROIC) benchmarks
2. Gross margin
Achieve above budgeted gross margin
- Above 56.5%
- Above 57%
Achieve year-on-year increase of vertical and distributed brand mix % to
sales (above prior year)
3. Accent Lifestyle including Glue Store
Achieve profitable results inclusive of fully allocated corporate overhead
costs
4. Culture and Sustainability
Achieve increase in overall Team Engagement score from prior year
5. Other executive strategic measures
Average performance of the executive team’s strategic measures, evaluated
on a sliding scale
How is STI assessed?
PARCO reviews the CEO’s performance against the performance targets and
objectives set for that year. The CEO assesses the performance of the senior
executive team, with the CEO having oversight of his direct reports and the
day-to-day functions of the Company.
The performance assessment of the CEO and CFOO are reviewed by PARCO and
then recommended for Board approval.
What happens when KMP
ceases employment?
If the employment of KMP is terminated for cause, no STI will be paid.
If the KMP resigns or is considered a good leaver prior to the completion of
the performance period, the STI may be granted on a pro rata basis in relation
to the period of service completed, subject to the discretion of the Board and
conditional upon the individual performance of the KMP.
Malus and Clawback
In the event of serious misconduct or a material misstatement in the Group’s
financial statements, the Board may cancel the STI payment and may also claw
back STI payments paid in previous financial years, to the extent this can be done
in accordance with the law.
28
Accent Group Limited
30 June 2024
REMUNERATION REPORT
FY24 STI Plan Structure
Is there any STI deferral?
The STI awards are currently delivered fully in cash and vest at the end of the one-
year period, subject to the achievement of the performance conditions. The Board
periodically reviews the appropriateness of a deferral of a portion of the STI into
equity. After this year’s review, the Board determined that a deferral is currently not
appropriate for the Group in light of the size of the Group and the KMP team, as well
as the CEO’s current equity ownership in the Company consisting of 20,753,001
shares which represent 3.69% of issued capital and an interest in a further 4,261,892
performance rights through the Performance Rights Plan (PRP).
The Board is of the view that the objectives of a deferral (i.e. retention and risk
management) are currently satisfied through the KMPs’ participation in the PRP
which vests progressively between FY24-FY26 and existing share ownership.
STI outcomes FY24
The FY24 year has seen continued progress against the Company’s strategic objectives. Compared to FY23, revenue
was up 2.4%, EBIT was down 20.5% and EPS was down 34.3%. EBIT growth for FY24 did not meet the 12% growth from
FY23 required to meet the FY24 STI outcome.
Financial Condition
70% of award based on the achievement of the Group EBIT Budget: Not achieved
EBIT for FY24 did not meet the required 12% EBIT growth and as a result did not meet the requirement for the payment
of this component.
Strategic Objectives
30% of the STI award for the CEO and CFO is based on measurable strategic objectives. Performance against these
objectives along with the weighting applied to each objective is outlined in the table below.
Based on the performance against these strategic objectives 10.2% of a total opportunity of 30% was awarded.
Objective
Outcomes
Achieved
STI allocation
Weighting
STI outcome
New stores:
–
Achieve >90% of
budgeted sales and EBIT
–
Achieved required ROIC
benchmarks
–
Achieved
Y
5%
5%
Gross margin
–
Achieve above budgeted
gross margin
–
Not achieved
N
7%
0%
–
Above 56.5%
–
Above 57%
–
Achieve >prior year
(60.5%) of vertical and
distribution brand mix %
to sales
Accent Lifestyle
–
Achieve profit >$0
–
Not achieved
N
5%
0%
Culture and
Sustainability:
–
Achieve increase
in overall Team
Engagement score
from prior year
–
Not achieved
N
3%
0%
Divisional
strategic
measures
–
Based on average
performance of the
executive team’s
strategic measures
–
Partially
achieved
P
10%
5.2%
Total
30.0%
10.2%
29
Annual Report 2024
30 June 2024
REMUNERATION REPORT
The table below sets out the performance of the CEO and CFOO in relation to the STI program:
Financial
Performance
target
Performance
outcome
Strategic
objectives
outcome
Maximum STI
available
Achievement*
FY23
FY24
CEO – Daniel
Agostinelli
Group EBIT
Budget
Did not achieve
Partial
achievement
10.2%
100% of fixed
remuneration
98.25%
10.2%
CFOO – Matthew
Durbin
Group EBIT
Budget
Did not achieve
Partial
achievement
10.2%
100% of fixed
remuneration
98.25%
10.2%
*
Achievement represents the amount achieved as a percentage of the maximum available
2.4. LTI Plan
Purpose and Objectives
The Company has implemented an LTI program through the Performance Rights Plan (PRP), first approved by
shareholders at the Company’s 2016 Annual General Meeting.
The objectives of this plan are:
–
to drive long-term value creation for shareholders; and
–
to attract, motivate and retain key employees, and for them to share in the value created for all shareholders of the
Company.
The PRP operates under the rules most recently approved by shareholders at the Company's 2019 Annual General
Meeting.
The current Tranches 5-7 of the PRP have a single financial performance measure. For Target performance, the
achievement of 10% or greater compounding earnings per share growth over the relevant performance period is
required. In respect of Tranche 6 issued in FY22, Target performance requires the achievement of 11% or greater
compounding adjusted diluted earnings per share growth over the relevant performance period. In respect of
Tranche 7 issued in FY24, Target performance requires the achievement of 14% or greater compounding adjusted
diluted earnings per share growth over the relevant performance period. The Board periodically evaluates
the impact and relevance of this performance measure and considers it to be effective in achieving the stated
objectives since the plan has been successful in driving strong performance since its inception in FY17.
Structure
During FY24, a new issue of Performance Rights was made (Tranche 7) with the structure set out below:
FY24-FY26 LTI Plan (Tranche 7) Structure
Performance/vesting period
3 years from FY24-FY26 plus a one-year escrow period to the end of FY27
following the completion of the performance period
Maximum opportunity
–
CEO – 150% of fixed remuneration
–
CFOO – 150% of fixed remuneration
Instrument
Performance Rights
Performance metric
Compound adjusted diluted earnings per share (ADEPS) growth over 3 years
(100%)
Vesting condition
50% of award opportunity vesting at Threshold - 9% ADEPS growth
100% of award opportunity vesting at Target - 14% ADEPS growth
150%1 of award opportunity vesting at Stretch - 18% ADEPS growth
Straight-line vesting occurs between 9% and 18%
No portion of an award will vest if compound ADEPS growth is less than 9%
Awards are also subject to a service condition requiring the participant to remain
employed by the Group until the end of the vesting period (three years in total)
1
150% of award opportunity represents total performance rights granted to the respective eligible employees
30
Accent Group Limited
30 June 2024
REMUNERATION REPORT
FY24-FY26 LTI Plan (Tranche 7) Structure
Rationale for the performance
metric and condition
In consultation with shareholders, advisors and other market participants, and
based on a benchmark review of relevant ASX listed companies, the Board has
determined that earnings per share growth is a widely used and well understood
indicator of company performance and a long-term driver of shareholder value
creation through the link to share price and dividend growth.
Earnings per share growth represents a transparent and well understood metric
for both shareholders and management that is not subject to market outcomes
but rather is a direct outcome of the strategic and operational efforts of the
management team over time. ADEPS also incorporates all the aspects of the
Company’s financial performance that are within management’s control.
Tranche 7 of the LTI requires a minimum 9% compound ADEPS growth and delivers
increasing outcomes as compound ADEPS growth factor exceeds 9% up to a
stretch target of 18%.
What happens when a KMP
ceases employment?
If the KMP’s employment is terminated for cause, or due to resignation, all
unvested Performance Rights will lapse, unless the Board determines otherwise.
In all other circumstances, unless the Board decides otherwise, a pro-rata portion
of the KMP’s Performance Rights, calculated in accordance with the proportion
of the performance period that has elapsed, will remain on foot, subject to the
performance condition as set by the Board. If and when the Performance Rights
vest, shares will be allocated in accordance with the plan rules and any other
condition of the grant.
Malus and clawback
In the event of fraud, dishonesty, gross misconduct, acts of harassment or
discrimination or a material misstatement or omission in the Company’s financial
statements, the Board may deem any unvested Performance Rights and/or any
vested and unexercised Performance Rights of the participant to have lapsed.
Dividends and voting rights
Performance rights do not confer on the holder any entitlement to any dividends
or other distributions by the Group or any right to attend or vote at any general
meeting of the Group.
Re-testing
Awards are tested once, at the end of the performance period of three years.
There is no further retesting of the performance conditions.
Change of Control provision
In the event of a Change of Control (including a takeover scheme or arrangement
or winding up of the company), Performance Rights automatically and
immediately vest from the date of the event in the proportion that the Group’s
share price has increased since the date of grant of the Performance Rights.
The Board may determine that all or a specified amount of the participant’s
remaining unvested Performance Rights automatically and immediately vest.
LTI Outcomes FY24
CEO & CFOO FY24 Long Term Incentive
PARCO recommended the issuance of performance rights under the PRP to the CEO and CFOO with a performance date
of September 2026 (Tranche 7 detailed above). This new issuance of Performance Rights to the CEO was approved by
Shareholders at the Company’s Annual General Meeting on 17 November 2023.
CEO & CFOO Long Term Incentive
The remaining balance of performance rights issued under Tranche 2 FY18-FY22 PRP fully vested in August 2024,
following which no further performance rights remained outstanding under this Tranche. Further details are set out below.
31
Annual Report 2024
30 June 2024
REMUNERATION REPORT
Tranche 2 (FY18-FY22) of the PRP
As discussed in the FY23 Remuneration Report, the FY18-FY22 performance rights plan (Tranche 2, issued in
December 2017), included the following performance and retention conditions:
–
a performance condition that at least 10% compound ADEPS growth per annum be achieved over the performance
period FY18-FY22 such that the required ADEPS in the FY22 year was 10.94 cents per share; and
–
a retention condition that the participant had to be employed at the testing date immediately post release of the
FY22 financial results.
For reasons which are set out in detail in the FY22 Remuneration Report and the 2022 Notice of Meeting, the Board,
following the shareholder approval obtained at its 2022 Annual General Meeting, exercised certain discretions in
respect of Tranche 2, being:
a) in respect of up to 50% of the Performance Rights, to waive the performance-based vesting condition that applied to
those Performance Rights, with the retention condition requiring the participant to be employed on 18 August 2022
remaining in place;
b) in respect of the remaining 50% of the Performance Rights, to defer the testing date of the performance condition
and retention condition to immediately following the release of the Company’s FY23 financial results for FY23,
noting that the performance condition requires ADEPS for FY23 to be above 10.94 cents per share; and
c) in respect of up to 100% of the Performance Rights, to extend the period for exercise of any vested Performance
Right by up to 18 months from the date of vesting.
The exercise of those discretions impacted KMP in the following ways:
KMP
Total Tranche 2
performance rights
issued (December
2017)
50% of Tranche 2
performance rights
vested immediately
post release of FY22
financial results
50% of Tranche 2
rights – testing
date deferred to
immediately post
release of the FY23
financial results
Daniel Agostinelli
5,500,000
2,750,000
2,750,000
Matthew Durbin
3,000,000
1,500,000
1,500,000
50% of the Tranche 2 rights that had the testing date deferred (Deferred Rights) to immediately post the release of the
FY23 results. Based on the FY23 results the achieved ADEPS of 15.62 cents per share is above the required performance
condition of 10.94 cents per share. Those participants who therefore met the retention condition were informed that
their Deferred Rights had vested on 28 August 2023.
Tranche 4 (FY20-FY23) of the PRP
The FY20-FY23 PRP (Tranche 4, issued in November 2019), included the following performance and retention
conditions:
–
a performance condition that at least 10% compound ADEPS growth per annum be achieved over the performance
period FY20-FY23 with the required ADEPS per share to be achieved in FY23 being at least 13.97 cents per share;
and
–
an additional 1-year retention condition requiring the participant being employed as at 1 July 2024.
In respect of FY23, the ADEPS achieved was 15.62 cents per share, which is above the ADEPS hurdle of 13.97 cents per
share. On this basis, the performance condition for Tranche 4 was met.
The retention condition (which required that participants be employed on 1 July 2024) was tested and allocated
performance rights will vest for those participants that met the condition.
Tranche 5 (FY21-FY24) of the PRP
The FY21-FY24 PRP (Tranche 5, issued in November 2020), included the following performance and retention
conditions:
–
a performance condition requiring that between 8% (Threshold) and 15% (Stretch) compound ADEPS growth per
annum be achieved over the performance period FY21-FY24 with the required ADEPS per share to be achieved in
FY24 being at least 13.51 cents per share (Threshold)
–
a retention condition requiring the participant to be employed and to not have resigned by 1 September 2024
In respect of FY24 the ADEPS achieved was 10.55 cents per share, and as such, the required minimum performance
condition was not met and no rights will be vested in respect of Tranche 5.
32
Accent Group Limited
30 June 2024
REMUNERATION REPORT
Tranche 6 (FY22-FY25) and Tranche 7 (FY23-FY26) of the PRP
In the context of the recent economic conditions and a challenging consumer environment, the Board intends to review
the performance hurdles set for FY22-FY25 PRP (Tranche 6, issued in November 2021) and FY23-FY26 PRP (Tranche 7,
issued in November 2023) to ensure that the overall structure of these tranches continue to provide appropriate
performance and retention incentives for participants.
2.5. Other Information
Key terms of executive employment contracts
The remuneration and other terms of employment of the CEO and CFOO are set out in individual employment contracts
that are not fixed-term contracts.
Name
Notice period/termination payment
Daniel Agostinelli
12 months’ notice by either party (or payment in lieu)
Matthew Durbin
6 months’ notice by either party (or payment in lieu)
2.6. Non-Executive Directors Remuneration
On an annual basis, PARCO considers the fees payable to Non-Executive Directors. When considering the level of
fees, the Committee undertakes a review of benchmark fees paid by similar organisations and may access independent
advice as well as drawing on the knowledge and experience of its members. PARCO makes recommendations on Non-
Executive Director fees to the Board. Non-Executive Directors can choose, subject to certain restrictions, the amount of
their fees allotted to superannuation.
The aggregate fee limit of $1,200,000 was approved by shareholders at the 2019 AGM.
In August 2023, in recognition of the additional demands and responsibilities of these roles, the Board approved
an incremental increase of $20,000 each for the Chair of the Audit & Risk Committee and Chair of the People &
Remuneration Committee (provided that the Chair of the People & Remuneration Committee was also not the Chair of
the Board) moving forward. There was no increase to the base directors’ fees.
2024
$
Board Chair
297,000
Audit and Risk Committee Chair (until 17 November 2023)
127,710
Audit and Risk Committee Chair (from 17 November 2023)
138,800
People and Remuneration Committee Chair*
–
Non-Executive Directors
118,800
*
David Gordon, being both the Chair of the Board and Chair of the People and Remuneration Committee during FY24, has elected not to receive any
additional fee for his role as the latter.
33
Annual Report 2024
30 June 2024
REMUNERATION REPORT
REMUNERATION OF KEY MANAGEMENT PERSONNEL
2.7. Table of remuneration to KMP (calculated in accordance with Australian Accounting Standards)
Short-term benefits
Long-term
benefits
Post
employment
benefits
Share-based
payments
Year
Cash salary
and fees1
$
Cash
bonus2
$
Other
monetary
$
Accrued
leave
benefits1
$
Super-
annuation
$
Equity-
settled1,3
$
Total
$
Non-executive
Directors
D Gordon
2024
269,500
–
–
–
27,500
–
297,000
2023
269,500
–
–
–
27,500
–
297,000
M Hapgood
2024
118,800
–
–
–
–
–
118,800
2023
118,800
–
–
–
–
–
118,800
D Player
2024
107,027
–
–
–
11,773
–
118,800
2023
107,511
–
–
–
11,289
–
118,800
B Blundy
2024
118,800
–
–
–
–
–
118,800
2023
118,800
–
–
–
–
–
118,800
T Dodd
2024
–
–
–
–
–
–
–
2023
–
–
–
–
–
–
–
A Loveridge AM
(appointed 17 November
2023)
2024
84,195
–
–
–
1,671
–
85,866
2023
–
–
–
–
–
–
–
L Myers (appointed
17 November 2023)
2024
66,039
–
–
–
7,264
–
73,303
2023
–
–
–
–
–
–
–
Former non-executive
Directors
S Goddard (resigned
17 November 2023)
2024
46,174
–
–
–
5,079
–
51,253
2023
115,575
–
–
–
12,135
–
127,710
J Lowcock (resigned
17 November 2023)
2024
39,600
–
–
–
–
–
39,600
2023
118,800
–
–
–
–
–
118,800
Executive Directors
and other KMP
D Agostinelli
2024
1,530,981
172,890
13,189
173,085
27,500
(518,426)
1,399,219
2023
1,279,943
1,473,750
10,580
131,329
27,500
874,613
3,797,715
M Durbin
2024
618,183
71,190
–
103,579
27,500
(226,096)
594,356
2023
584,192
638,625
–
58,819
27,500
387,700
1,696,836
Total
2024 2,999,299
244,080
13,189
276,664
108,287
(744,522)
2,896,997
2023
2,713,121
2,112,375
10,580
190,148
105,924
1,262,313
6,394,461
1
Cash salary and fees relate to base salary excluding annual leave but including an accrual for annual leave not taken. Long-term benefits relate to
statutory annual leave and long service leave accruals.
2 Cash bonuses relate to STI bonuses issued on the basis of the achievement of relevant performance measures for the year ended 30 June 2024 and
were approved by PARCO and the Board in August 2024.
3 Share-based payments represent performance rights. The fair value of performance rights is measured at grant date and progressively allocated to
profit and loss over the vesting period. The amount included in remuneration above may not be indicative of the benefit (if any) that key management
personnel may ultimately realise should the performance rights vest.
34
Accent Group Limited
30 June 2024
REMUNERATION REPORT
PERFORMANCE RIGHTS PLAN (PRP)
The table below sets out the details of KMP Performance Rights for unvested plans issued under the Company’s PRP:
Issue
Number of
Rights
Grant Date
Exercise
Price
Vesting
Date
Vesting
condition
% Achieved
Number
of rights
exercised
Number
of rights
forfeited
Current
balance
Tranche 2
8,500,000
3 Oct 17
Nil
50% vested
post release
of FY22
financial
results
ADEPS
hurdle1
100%
8,500,000
0
0
50% post
release
of FY23
financial
results
Tranche 4
1,136,646
30 Nov 19
Nil
1 Jul 24
ADEPS
hurdle
100%
0
0
1,136,646
Tranche 5
1,748,408
18 Nov 20
Nil
1 Sep 24
ADEPS
hurdle –
sliding scale
0%
0
0
1,748,408
Tranche 6
1,459,276
27 Sep 21
Nil
1 Sep 25
ADEPS
hurdle –
sliding scale
To be
determined
0
0
1,459,276
Tranche 7
504,754
2 Nov 23
Nil
1 Sep 26
ADEPS
hurdle –
sliding scale
To be
determined
0
0
504,754
Tranche 7
1,225,831
17 Nov 23
Nil
1 Sep 26
ADEPS
hurdle –
sliding scale
To be
determined
0
0
1,225,831
Total
14,574,915
8,500,000
0
6,074,915
1
As noted above, having received shareholder approval, the Board exercised its discretion and determined that (i) the ADEPS performance condition
for 50% of the Tranche 2 performance rights had been deemed as met and exercised in 2023, and (ii) deferred the testing date for the remaining
50% of the Tranche 2 performance rights by one year to immediately post release of FY23 financial results. The remaining 50% were exercised into
ordinary shares in September 2023.
The table below sets out the detailed conditions for each tranche of KMP performance rights for unvested plans.
Issue
Current
Balance
ADEPS Hurdle – Expressed as
CAGR over the performance period
Retention condition
Threshold
Target
Stretch
Tranche 4
1,136,646
NA
10%
NA
Must be employed and not have
resigned at 1 July 24
Tranche 5
1,748,408
8%
10%
15%
Must be employed and not have
resigned at 1 September 24
Tranche 6
1,459,276
9%
11%
16%
Must be employed and not have
resigned at 1 September 25
Tranche 7
1,730,585
9%
14%
18%
Must be employed and not have
resigned at 1 September 26
Total
6,074,915
35
Annual Report 2024
30 June 2024
REMUNERATION REPORT
PERFORMANCE RIGHTS OF THE CEO AND CFOO
The unvested Performance Rights of the CEO and CFOO under the PRP are set below:
Balance as at
2 July 2023
Granted
Vested
Forfeited
Unvested
balance as
at 30 June
2024
Value at grant
date
Minimum
value to vest
Maximum
Value to vest
CEO – Daniel
Agostinelli
Tranche 1
–
–
–
–
–
–
Tranche 2
2,750,000
– 2,750,000
–
–
–
–
–
Tranche 3
–
–
–
–
–
–
–
–
Tranche 4
795,031
–
–
–
795,031
$1,042,724
–
$571
Tranche 5
1,222,930
–
–
–
1,222,930
$1,638,692
–
$1,638,692
Tranche 6
1,018,100
–
–
–
1,018,100
$1,759,019
–
$1,337,131
Tranche 71
–
1,225,831
–
–
1,225,831
$1,843,022
–
$1,650,110
Total
5,786,061
1,225,831 2,750,000
–
4,261,892 $6,283,457
– $4,626,504
CFOO – Matthew
Durbin
Tranche 1
–
–
–
–
–
–
–
–
Tranche 2
1,500,000
– 1,500,000
–
–
–
–
–
Tranche 3
–
–
–
–
–
–
–
–
Tranche 4
341,615
–
–
–
341,615
$448,046
–
$245
Tranche 5
525,478
–
–
–
525,478
$704,126
–
$704,126
Tranche 6
441,176
–
–
–
441,176
$762,240
–
$579,422
Tranche 71
–
504,754
–
–
504,754
$756,078
–
$676,938
Total
2,808,269
504,754 1,500,000
–
1,813,023 $2,670,490
–
$1,960,731
1
Fair value at the respective grant dates was $1.50.
Refer to section 2.7 above for the proportion of the CEO and CFOO’s remuneration that represents the PRP allocation
for the year ended 30 June 2024.
2.8. Loans and Transactions with Key Management Personnel
In the previous financial year ended 2 July 2023, Placed Pty Ltd, which was then a company associated with Brett Blundy,
provided recruitment services to the Group amounting to $54,081. The company is no longer a related party in the
financial year ended 30 June 2024.
Lyneliz Pty Ltd, a company associated with Daniel Agostinelli, provided storage services to the Group amounting to $0
(2 July 2023: $60,000).
There were no loans outstanding and no balances receivable or owing at the reporting date between the Company,
or any of its subsidiaries, and its KMP (including their related parties).
36
Accent Group Limited
30 June 2024
REMUNERATION REPORT
3.
SHAREHOLDINGS OF KMP
The number of shares in the Company held during the financial year by each Director and other members of key
management personnel of the Group, including their related parties, is set out below:
Name
Balance at
start of year
Received on
exercise of
performance
rights
Additions
Disposals
Balance at
end of year
Daniel Agostinelli
18,003,001
2,750,000
–
–
20,753,001
Matthew Durbin
1,050,000
1,500,000
–
250,000
2,300,000
David Gordon
2,599,034
–
–
–
2,599,034
Stephen Goddard1
50,000
–
–
–
50,000
Donna Player
50,000
–
–
–
50,000
Michael Hapgood
7,500,000
–
–
–
7,500,000
Joshua Lowcock1
18,105
–
30,300
–
48,405
Brett Blundy
107,502,463
–
– 25,025,000
82,477,463
Timothy Dodd
30,046
–
–
–
30,046
Lawrence Myers2
–
–
1,200,000
–
1,200,000
Anne Loveridge AM2
–
–
30,000
–
30,000
Total
136,802,649
4,250,000
1,260,300 25,275,000
117,037,949
1
Balances at end of year represent shareholding as at resignation date 17 November 2023.
2 Additions represent shareholding since appointment date 17 November 2023.
The Remuneration Report has been audited as required by section 308(3c) of the Corporations Act 2001.
This Directors’ Report, which includes the Remuneration Report, is made in accordance with a resolution of Directors,
pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the Directors
David Gordon
Chairman
23 August 2024
37
Annual Report 2024
AUDITOR’S INDEPENDENCE DECLARATION
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Auditor’s Independence Declaration
As lead auditor for the audit of Accent Group Limited for the period 3 July 2023 to 30 June 2024, I
declare that to the best of my knowledge and belief, there have been:
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Accent Group Limited and the entities it controlled during the period.
Alison Tait Milner
Melbourne
Partner
PricewaterhouseCoopers
23 August 2024
38
Accent Group Limited
for the year ended 30 June 2024
STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
Note
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Revenue
6
1,454,352
1,420,688
Interest revenue
1,861
1,434
Expenses
Cost of sales
7
(634,754)
(624,415)
Distribution
(63,068)
(61,678)
Marketing
(42,219)
(50,799)
Occupancy
7
(36,209)
(23,930)
Employee expenses
7
(310,402)
(294,670)
Other
(74,013)
(66,975)
Depreciation, amortisation and impairment
7
(183,293)
(159,433)
Finance costs
7
(27,839)
(20,606)
Profit before income tax expense
84,416
119,616
Income tax expense
8
(24,886)
(30,963)
Profit after income tax expense for the year
59,530
88,653
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Net change in the fair value of cash flow hedges taken to equity, net of tax
(2,031)
(3,432)
Foreign currency translation
(61)
(6,507)
Other comprehensive income for the year, net of tax
(2,092)
(9,939)
Total comprehensive income for the year
57,438
78,714
Profit for the year is attributable to:
Owners of Accent Group Limited
59,530
88,653
59,530
88,653
Total comprehensive income for the year is attributable to:
Owners of Accent Group Limited
57,438
78,714
57,438
78,714
Cents
Cents
Basic earnings per share
38
10.61
16.16
Diluted earnings per share
38
10.55
15.62
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
39
Annual Report 2024
as at 30 June 2024
STATEMENT OF FINANCIAL POSITION
STATEMENT OF FINANCIAL POSITION
Note
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Current assets
Cash and cash equivalents
28,051
29,722
Trade and other receivables
9
36,832
34,060
Inventories
10
264,844
239,606
Lease receivables
11
7,459
9,324
Derivative financial instruments
12
-
3,738
Other current assets
13
6,326
6,373
Current tax receivable
2,957
32
Total current assets
346,469
322,855
Non-current assets
Property, plant and equipment
14
121,403
140,527
Right-of-use assets
15
265,413
281,393
Lease receivables
11
8,484
10,231
Intangibles
16
384,014
382,191
Net deferred tax assets
17
22,164
17,331
Total non-current assets
801,478
831,673
Total assets
1,147,947
1,154,528
Current liabilities
Trade and other payables
18
151,287
110,816
Deferred revenue
19
11,593
14,377
Provisions
20
20,662
23,813
Borrowings
21
10,659
9,954
Lease liabilities
22
138,039
132,130
Derivative financial instruments
12
315
–
Total current liabilities
332,555
291,090
Non-current liabilities
Provisions
20
1,736
840
Deferred revenue
19
1,346
5,190
Borrowings
21
139,594
139,350
Lease liabilities
22
253,911
276,846
Total non-current liabilities
396,587
422,226
Total liabilities
729,142
713,316
Net assets
418,805
441,212
Equity
Issued capital
23
390,926
390,926
Reserves
24
33,846
36,956
(Accumulated losses)/Retained earnings
(5,967)
13,330
Total equity
418,805
441,212
The above statement of financial position should be read in conjunction with the accompanying notes
40
Accent Group Limited
for the year ended 30 June 2024
STATEMENT OF CHANGES IN EQUITY
STATEMENT OF CHANGES IN EQUITY
Consolidated
Issued
capital
$'000
Foreign
currency
translation
reserve
$'000
Hedging
reserve - cash
flow
hedges
$'000
Share-based
payments
reserve
$'000
Retained
earnings
$'000
Total equity
$'000
Balance at 27 June 2022
390,926
7,709
5,567
23,377
12,647
440,226
Profit after income tax expense for
the year
–
–
–
–
88,653
88,653
Other comprehensive income for
the year, net of tax
–
(6,507)
(3,432)
–
–
(9,939)
Total comprehensive income for
the year
–
(6,507)
(3,432)
–
88,653
78,714
Transactions with owners in their
capacity as owners:
Share-based payments
–
–
–
10,242
–
10,242
Dividends paid (Note 25)
–
–
–
–
(87,970)
(87,970)
Balance at 2 July 2023
390,926
1,202
2,135
33,619
13,330
441,212
Consolidated
Issued
capital
$'000
Foreign
currency
translation
reserve
$'000
Hedging
reserve - cash
flow
hedges
$'000
Share-based
payments
reserve
$'000
(Accumulated
losses)/
Retained
earnings
$'000
Total equity
$'000
Balance at 3 July 2023
390,926
1,202
2,135
33,619
13,330
441,212
Profit after income tax expense for
the year
–
–
–
–
59,530
59,530
Other comprehensive income for
the year, net of tax
–
(61)
(2,031)
–
–
(2,092)
Total comprehensive income for
the year
–
(61)
(2,031)
–
59,530
57,438
Transactions with owners in their
capacity as owners:
Share-based payments
–
–
–
(1,018)
–
(1,018)
Dividends paid (Note 25)
–
–
–
–
(78,827)
(78,827)
Balance at 30 June 2024
390,926
1,141
104
32,601
(5,967)
418,805
The above statement of changes in equity should be read in conjunction with the accompanying notes
41
Annual Report 2024
for the year ended 30 June 2024
STATEMENT OF CASH FLOWS
STATEMENT OF CASH FLOWS
Note
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Cash flows from operating activities
Receipts from customers and franchisees (inclusive of GST)
1,603,488
1,583,248
Payments to suppliers and employees (inclusive of GST)
(1,301,776)
(1,287,771)
Interest received
1,038
631
Interest and other finance costs paid
(10,653)
(6,616)
Interest on lease liabilities
(15,975)
(12,900)
Income taxes paid
(30,071)
(20,004)
Net cash from operating activities
37
246,051
256,588
Cash flows from investing activities
Payment for purchase of businesses, net of cash acquired
34
(2,211)
(6,098)
Payments for property, plant and equipment (1)
(24,840)
(26,220)
Payments for intangibles
16
(6,983)
(8,143)
Net cash used in investing activities
(34,034)
(40,461)
Cash flows from financing activities
Proceeds from borrowings
1,000
-
Repayment of borrowings
-
(20,000)
Payments for debt transaction costs
(439)
-
Payment of lease liabilities
(135,441)
(127,445)
Dividends paid
25
(78,827)
(87,970)
Net cash used in financing activities
(213,707)
(235,415)
Net decrease in cash and cash equivalents
(1,690)
(19,288)
Cash and cash equivalents at the beginning of the financial year
29,722
49,734
Effects of exchange rate changes on cash and cash equivalents
19
(724)
Cash and cash equivalents at the end of the financial year
28,051
29,722
(1) Payments for property, plant and equipment are net of cash fit-out contributions received from landlords of $17,402,000 (2023: $21,534,000)
The above statement of cash flows should be read in conjunction with the accompanying notes
42
Accent Group Limited
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1.
GENERAL INFORMATION
The financial statements cover Accent Group Limited ('Company', 'parent entity' or 'Accent') as a Group consisting of
Accent Group Limited and the entities it controlled at the end of, or during, the year ('Group'). The financial statements
are presented in Australian dollars, which is Accent's functional and presentation currency.
Accent is a listed public company limited by shares, listed on the Australian Securities Exchange (‘ASX’), incorporated
and domiciled in Australia. Its registered office and principal place of business is:
2/64 Balmain Street
Richmond VIC 3121
A description of the nature of the Group's operations and its principal activities are included in the directors' report,
which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 23 August 2024.
The directors have the power to amend and reissue the financial statements.
NOTE 2. BASIS OF PREPARATION
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards
and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001,
as appropriate for for-profit oriented entities. These financial statements also comply with International Financial
Reporting Standards as issued by the International Accounting Standards Board ('IASB').
The financial statements have been prepared under the historical cost convention, except for, where applicable:
–
Derivative financial instruments which have been fair valued at balance date. Refer to Note 12;
–
Share-based payments which have been measured at fair value at grant date. Refer to Note 39; and
–
Certain non-financial assets which have been measured at fair value less cost of disposal. Refer to Note 15.
The current financial year, 3 July 2023 to 30 June 2024, represents 52 weeks and the comparative financial year is
from 27 June 2022 to 2 July 2023 which represents 53 weeks. From time to time, management may change prior year
comparatives to reflect classifications applied in the current year.
Critical accounting estimates
The preparation of consolidated financial statements requires the Group to make estimates and judgements that affect
the application of policies and reported amounts. The estimates which could cause a significant risk of causing a material
adjustment to the carrying amount of assets and liabilities within the next 12 months are disclosed in the following notes:
–
Note 10
Inventories
–
Note 14
Property, plant and equipment
–
Note 15
Right-of-use assets
–
Note 16
Intangibles
–
Note 20
Provisions
–
Note 34
Business combinations
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Accent Group Limited as
at 30 June 2024 and the results of all subsidiaries for the year then ended. A list of subsidiaries at year end is contained in
Note 35. Supplementary information about the parent entity is disclosed in Note 33.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses
and profits and losses resulting from intragroup transactions have been eliminated. Subsidiaries are consolidated
from the date on which control is obtained to the date on which control is disposed. The acquisition of subsidiaries is
accounted for using the acquisition method.
If the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling
interest in the subsidiary together with any cumulative translation differences recognised in equity. The Group
recognises the fair value of the consideration received and the fair value of any investment retained together with any
gain or loss in profit or loss.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are
recognised in the income statement.
43
Annual Report 2024
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 2. BASIS OF PREPARATION (CONTINUED)
Foreign operations
The functional currencies of overseas subsidiaries are listed in Note 35. The assets and liabilities of overseas subsidiaries
are translated into Australian dollars at the rate as at reporting date and the income statements are translated at
the average exchange rates for the year. The exchange differences arising on the retranslation are taken directly to
a separate component of equity.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with
that Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
Comparatives have been reclassified where appropriate to ensure consistency and comparability with the current period.
NOTE 3. ACCOUNTING POLICIES
Significant and other accounting policies adopted in the preparation of the financial statements are provided throughout
the notes. These policies have been consistently applied to all the years presented, unless otherwise stated.
NOTE 4. NEW OR AMENDED ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED
In the current year, the Group has adopted all of the following new and revised Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board ('AASB') that are relevant to its operations and mandatory for the
current annual reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
New and revised Standards and amendments thereof and Interpretations effective for the current year that are relevant
to the Group include:
–
Annual Improvements to IFRS Standards 2018-2020
–
Amendments to AASB12 Disclosures of Interests in Other Entities
–
Amendments to Disclosure of accounting policies and definition of accounting estimates (AASB 2021-2)
–
Amendments to AASB112 Income Taxes (AASB 2021-5)
–
Amendments to Australian Accounting Standards – International Tax Reform – Pillar Two Model Rules (AASB 2023-2)
International Tax Reform – Pillar Two Model Rules
In December 2021, the Organisation for Economic Co-operation and Development (OECD) released Global Anti-Base
Erosion (GLoBE) Model rules (“Pillar Two”), introducing new ‘top-up’ taxing mechanisms for multinational enterprises
(MNEs) that fall within the rules. MNEs will be liable to pay a top-up tax reflecting the difference between their GloBE
effective tax rate per jurisdiction and the 15% minimum rate. As at 30 June 2024, Pillar Two draft legislation has been
released in Australia but not yet been enacted. Certain jurisdictions in which the Group operates have enacted or
substantively enacted Pillar Two legislation. The legislation will be effective for the Group for the financial year beginning
1 July 2024.
In June 2023, the Australian Accounting Standards Board (AASB) issued AASB 2023-2 to amend AASB 112 Income
Taxes in order to address Pillar Two. It introduced a mandatory temporary exception from recognising and disclosing
Pillar Two deferred taxes, which has been adopted by the Group. The Group is performing an assessment of the potential
exposure to Pillar Two income taxes. The Group does not operate in jurisdictions that have a headline corporate tax rate
of less than 15% and does not expect to pay any Pillar Two top-up taxes.
The above standards and interpretations have not led to any changes to the Group's accounting policies or had any other
material impact on the financial position or performance of the Group.
NOTE 5. OPERATING SEGMENTS
The Group is required to determine and present its operating segments based on the way in which financial information
is organised and reported to the chief operating decision-makers (CODMs). The CODMs have been identified as the
Board of Directors on the basis they make the key operating decisions of the Group and are responsible for allocating
resources and assessing performance.
Based on the internal reports that are reviewed and used by the CODMs in assessing performance and in determining
the allocation of resources, the consolidated entity is organised into two operating segments. There is no aggregation of
operating segments.
The CODMs assess the performance of the operating segments based on a measure of Management Pre-AASB 16 EBIT
(earnings before interest and tax) prior to the impact of AASB 16 Leases and non-operating intercompany charges.
44
Accent Group Limited
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 5. OPERATING SEGMENTS (CONTINUED)
In FY2024, the Retail and Wholesale businesses have been identified as two separate operating segments in line with
the way in which financial information is organised and reported to the CODMs. In prior periods, these were determined
to be one operating segment.
Support costs comprise of costs attributable to the support functions such as IT, Legal, Finance and Property Leasing.
Reportable segments
Operations
Retail
Sale of footwear and apparel directly to consumers
Wholesale
Sale of footwear and apparel in bulk internally and to other businesses
Operating segment information
Reportable Segments
52-week financial year ended 30 June 2024
Retail
$'000
Wholesale
$'000
Support
Costs
$'000
Consolidated
$'000
Revenue
Total sales revenue
1,271,294
463,199
–
1,734,493
Inter-segment revenue
–
(299,595)
–
(299,595)
Revenue from external customers
1,271,294
163,604
–
1,434,898
Management Pre-AASB 16 EBIT
163,404
16,476
(79,231)
100,649
Reconciliation of Management Pre-AASB16 EBIT to profit after income tax expense is as follows:
Management Pre-AASB 16 EBIT
100,649
AASB 16 Leases impact
9,745
Reported EBIT
110,394
Finance costs
(27,839)
Interest revenue
1,861
Profit before income tax expense
84,416
Income tax expense
(24,886)
Profit after income tax expense
59,530
Reportable Segments
53-week financial year ended 2 July 2023
Retail
$'000
Wholesale
$'000
Support
Costs
$'000
Consolidated
$'000
Revenue
Total sales revenue
1,196,454
451,604
–
1,648,058
Inter-segment revenue
-
(254,801)
–
(254,801)
Revenue from external customers
1,196,454
196,803
–
1,393,257
Management Pre-AASB 16 EBIT
186,506
17,152
(74,783)
128,875
Reconciliation of Management Pre-AASB16 EBIT to profit after income tax expense is as follows:
Management Pre-AASB 16 EBIT
128,875
AASB 16 Leases impact
9,913
Reported EBIT
138,788
Finance costs
(20,606)
Interest revenue
1,434
Profit before income tax expense
119,616
Income tax expense
(30,963)
Profit after income tax expense
88,653
45
Annual Report 2024
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 6. REVENUE
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Sales revenue
Sales to customers
1,434,898
1,393,257
Royalties and other franchise related income
13,177
15,758
1,448,075
1,409,015
Other revenue
Marketing levies received from TAF stores
5,913
9,669
Other revenue
364
2,004
6,277
11,673
Revenue
1,454,352
1,420,688
The following table summarises sales to customers by geographic location of the Group:
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Australia
1,272,921
1,238,523
New Zealand
161,977
154,734
Sales to customers
1,434,898
1,393,257
Recognition and measurement
The major sources of the Group’s revenue are from sales to customers and royalties and other franchise related income
received from TAF stores. The Group’s revenue is principally generated on a ‘point in time’ basis.
Sales to customers
Sales to customers of goods comprise the sale of branded performance and lifestyle footwear, apparel and
accessories to customers outside the Group less discounts, markdowns, loyalty scheme vouchers and an appropriate
deduction for actual and expected returns. Sales to customers is stated net of tax. Revenue is recognised when
performance obligations are satisfied, typically being where goods are delivered to the customer and the control of
goods is transferred to the buyer.
Gift cards are considered a prepayment for goods to be delivered in the future. The Group has an obligation to transfer
the goods in the future, creating a performance obligation. The Group recognises deferred revenue when the gift card
is purchased and recognises revenue when the customer redeems the gift card and the Group fulfills the performance
obligation.
Royalties and other franchise related income
Franchise royalty fee income is earned based upon a percentage of sales that has occurred and is recognised on an
accrual basis.
Franchise establishment fees are recognised as income over the term of the Franchise Agreement. Franchise
establishment fees are recognised on an ‘over time’ basis.
Marketing levies
Marketing levies are recognised in the period the sales are recorded by TAF stores. Marketing levies are collected by
the Group for specific use within the TAF Marketing Fund, which is operated on behalf of the TAF network. Expenses
in relation to the marketing of TAF stores are recorded within marketing expenses in profit or loss. In any given year, a
deficit in the marketing fund will need to be recouped in the following year and any surplus in the marketing fund will
need to be spent in the subsequent year.
46
Accent Group Limited
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 7. EXPENSES
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Profit before income tax includes the following specific expenses:
Depreciation
Right-of-use assets
115,200
107,893
Plant and equipment
47,293
46,604
Total depreciation
162,493
154,497
Amortisation
Licence fee
32
32
Re-acquired rights
724
358
Software
5,910
4,546
Total amortisation
6,666
4,936
Impairment of assets
Impairment charge – right-of-use assets
3,877
-
Impairment charge – property, plant and equipment
10,257
-
Total impairment
14,134
-
Total depreciation, amortisation and impairment
183,293
159,433
Finance costs
Interest and finance charges paid/payable on borrowings
11,041
6,904
Interest and finance charges paid/payable on lease liabilities
16,798
13,702
Finance costs expensed
27,839
20,606
Occupancy
Variable lease payments
21,343
39,877
Employee expenses
Share-based payments (income)/expense
(2,528)
3,137
Cost of sales
Cost of sales comprises cost of inventories sold, incoming freight and related duties.
COVID-19 Related Rental Concessions
During the last financial year ended 2 July 2023, the Group recognised $4,082,287 of COVID-19 related rental
concessions from landlords. These concessions were included as a reduction in occupancy expense in the statement
of profit or loss and other comprehensive income. There was no such concession recognised during the financial year
ended 30 June 2024.
47
Annual Report 2024
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 8. INCOME TAX EXPENSE
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Income tax expense
Current tax
26,978
26,220
Deferred tax
(2,562)
4,440
Adjustment recognised for prior periods – Deferred tax
365
439
Adjustment recognised for prior periods – Current tax
105
(136)
Aggregate income tax expense
24,886
30,963
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax expense
84,416
119,616
Tax at the statutory tax rate of 30%
25,325
35,885
Tax effect amounts which are not (deductible)/taxable in calculating taxable income:
Entertainment expenses
(75)
84
Share-based payments
–
(5,588)
Impairment of assets
76
–
Sundry items
(661)
327
24,665
30,708
Adjustment recognised for prior periods
470
303
Difference in overseas tax rates
(249)
(48)
Income tax expense
24,886
30,963
Amounts recognised directly to other comprehensive income
Tax effect of hedges in reserves
(868)
(1,473)
Tax effect of share-based payments in reserves
(1,510)
(3,775)
Total tax effect recognised directly to other comprehensive income
(2,378)
(5,248)
Deferred tax assets not recognised
Deferred tax assets not recognised comprises temporary differences attributable to:
Capital losses (tax-effected)
7,199
7,199
Total deferred tax assets not recognised
7,199
7,199
The above potential tax benefit, which excludes tax losses for deductible temporary differences, has not been
recognised in the statement of financial position as the recovery of this benefit is uncertain.
Recognition and measurement
Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to taxation
authorities at the tax rates and tax laws enacted or substantively enacted by the balance sheet date.
Deferred tax
Deferred tax is accounted for using the balance sheet liability method, providing for temporary differences between
the carrying amounts of assets and liabilities under financial reporting and taxation purposes. Deferred tax is measured
at the rates that are expected to apply in the period in which the liability is settled or asset realised, based on tax rates
enacted or substantively enacted at the reporting date.
Deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition
(other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor
the accounting profit or in relation to the initial recognition of goodwill.
48
Accent Group Limited
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 8. INCOME TAX EXPENSE (CONTINUED)
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against
which the deductible temporary differences or unused tax losses and tax offsets can be utilised. Deferred tax assets are
reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and
the Group intends to settle its current tax assets and liabilities on a net basis.
Tax consolidation
Accent Group Limited (the 'head entity') and its wholly-owned Australian subsidiaries have formed an income tax
consolidated group under the tax consolidation regime. The head entity and each subsidiary in the tax consolidated
group continue to account for their own current and deferred tax amounts. The tax consolidated group has applied the
'separate taxpayer within group' approach in determining the appropriate amount of taxes to allocate to members of
the tax consolidated group.
In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities
(or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from each
subsidiary in the tax consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts
receivable from or payable to other entities in the tax consolidated group. The tax funding arrangement ensures that
the intercompany charge equals the current tax liability or benefit of each tax consolidated group member, resulting in
neither a contribution by the head entity to the subsidiaries nor a distribution by the subsidiaries to the head entity.
NOTE 9. TRADE AND OTHER RECEIVABLES
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Trade receivables
34,784
32,907
Less: Allowance for expected credit losses
(554)
(996)
34,230
31,911
Other receivables
2,602
2,149
Trade and other receivables
36,832
34,060
Movement in the allowance for credit losses were as follows:
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Carrying value at beginning of year
(996)
(1,238)
Allowance for credit losses recognised
–
(59)
Unused amount reversed
442
301
Allowances for expected credit losses at year end
(554)
(996)
Set out below is the information about the credit risk exposure on the Group’s trade receivables.
2024
Carrying
amount
$'000
Expected
credit
loss rate
%
Expected
credit loss
$'000
Current
16,553
0.6%
99
Under one month
9,293
1.0%
93
One to two months
3,427
2.9%
99
Two to three months
1,165
2.8%
33
Over three months
4,346
5.3%
230
34,784
554
49
Annual Report 2024
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 9. TRADE AND OTHER RECEIVABLES (CONTINUED)
2023
Carrying
amount
$'000
Expected
credit
loss rate
%
Expected
credit loss
$'000
Current
25,455
1.0%
255
Under one month
3,022
5.1%
154
One to two months
940
14.2%
133
Two to three months
1,420
5.3%
75
Over three months
2,070
18.3%
379
32,907
996
Recognition and measurement
Trade receivables
Trade receivables generally have terms of between 30 to 60 days. They are recognised at amortised cost less allowance
for expected credit losses (‘ECL’). Customers who wish to trade on credit terms are subject to extensive credit
verification procedures. Receivable balances are monitored on an ongoing basis and the ECL recognised is based on
management’s expectation of losses without regard to whether an impairment event exists.
Other receivables
Other receivables include rebates receivable from suppliers and fit-out contributions from landlords which are
considered fully recoverable and therefore no allowance has been made.
Impairment of trade receivables
Collectability and impairment of trade receivables is assessed on an ongoing basis at an individual customer level by
a centralised accounts receivable function. The Group has established a provision matrix that is based on average
write-offs as a proportion of average debt over a period of 12 months. The historical loss rates are adjusted for current
and forward-looking information where significant.
NOTE 10. INVENTORIES
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Finished goods (at lower of cost or net realisable value)
193,974
190,168
Goods in transit
70,870
49,438
264,844
239,606
Recognition and measurement
Finished goods are valued at the lower of cost and net realisable value. Net realisable value is the estimated selling price
in the ordinary course of business less costs to sell. Cost comprises of the purchase price on a weighted average basis
and logistic expenses incurred in bringing the inventories to their present location and condition.
Determining the net realisable value of inventories relies on key assumptions that require the use of management
judgement. Management’s estimate of the net realisable value is based on historical finished goods sold below cost and
inventory write-off transactional data.
The provision for write-down of inventories to net realisable value amounted to $11,667,000 (2 July 2023: $9,909,000)
at 30 June 2024. Included in the provision is $2,585,000 attributable to the decision to exit 17 underperforming Glue
Stores. Refer to Note 15 for further details.
50
Accent Group Limited
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 11. LEASE RECEIVABLES
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Current
Lease receivables
7,459
9,324
Non-Current
Lease receivables
8,484
10,231
The Group sub-leases property leases to TAF franchises. The Group has classified these sub-leases as a finance lease,
because the sub-lease is substantially on the same terms as the head lease.
The following table sets out the maturity analysis of lease receivables, showing the undiscounted lease payments to be
received after the reporting date.
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Less than one year
8,059
10,427
One to five years
9,055
11,323
More than five years
–
–
Total undiscounted lease payments
17,114
21,750
Discounted using the Group’s incremental borrowing rate
(1,171)
(2,195)
Total lease receivables
15,943
19,555
of which are:
Current lease receivables
7,459
9,324
Non-current lease receivables
8,484
10,231
NOTE 12. DERIVATIVE FINANCIAL INSTRUMENTS
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Forward foreign exchange contracts - receivable
–
3,518
Interest rate swap contracts – receivable
–
220
Total derivative financial instruments receivable - current
–
3,738
Forward foreign exchange contracts – payable
315
–
Total derivative financial instruments payable – current
315
–
Foreign exchange forward contracts are held as hedging instruments against forecast purchases in USD. The notional
amount for the contracts held at 30 June 2024 totalled $USD 77,849,000 (2 July 2023: $USD 99,214,000). The average
rate of the forward contracts is 0.66 (2023: 0.68).
The net gain or loss recognised as other comprehensive income is equal to the change in fair value of the hedging
instruments. There is no ineffectiveness recognised in profit or loss.
Recognition and measurement
The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign
exchange risk, including foreign exchange forward contracts and interest rate swaps. Derivatives are initially recognised
at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each
reporting date. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the
fair value is negative.
When a cash flow hedge is discontinued, any cumulative gain or loss on the hedging instrument recognised in other
comprehensive income is retained in equity until the forecast transaction occurs.
51
Annual Report 2024
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 13. OTHER CURRENT ASSETS
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Prepayments
5,331
6,242
Other current assets
995
131
6,326
6,373
Prepayments represent general prepaid expenses, largely insurance premiums and license fees for the Group’s
eCommerce platforms.
NOTE 14. PROPERTY, PLANT AND EQUIPMENT
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Plant and equipment - at cost
410,607
366,885
Less: Accumulated depreciation and impairment
(296,384)
(237,952)
114,223
128,933
Assets under construction - at cost
7,180
11,594
121,403
140,527
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Plant and
equipment
$'000
Assets under
construction
$'000
Total
$'000
Balance at 26 June 2022
125,482
13,706
139,188
Additions
36,370
11,594
47,964
Transfer
13,706
(13,706)
–
Disposals
(108)
–
(108)
Exchange differences
87
–
87
Depreciation expense
(46,604)
–
(46,604)
Balance at 2 July 2023
128,933
11,594
140,527
Additions
31,278
7,180
38,458
Transfer
11,594
(11,594)
–
Exchange differences
(32)
–
(32)
Impairment
(10,257)
–
(10,257)
Depreciation expense
(47,293)
–
(47,293)
Balance at 30 June 2024
114,223
7,180
121,403
52
Accent Group Limited
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 14. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Recognition and measurement
The carrying value of property, plant and equipment is measured as the cost of the asset, less accumulated depreciation,
and impairment.
Depreciation and amortisation
Items of property, plant and equipment are depreciated on a straight-line basis over the expected useful lives. Most of
the property, plant and equipment represents leasehold improvements which are amortised over the period of the lease.
As at 30 June 2024, the average lease term is 5 years. Assets under construction are not depreciated.
Derecognition
An item of property, plant and equipment is derecognised when it is sold or otherwise disposed of, or when its use is
expected to bring no future economic benefits. Any gain or loss between the carrying amount and the disposal proceeds
are included in the income statement in the period the item is derecognised.
Impairment
Refer to Note 15 for details on impairment testing.
NOTE 15. RIGHT-OF-USE ASSETS
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Buildings - right-of-use1
751,325
648,913
Less: Accumulated depreciation and impairment
(485,912)
(367,520)
265,413
281,393
1
Additions to right-of-use assets of $93,904,000 for the year ended 30 June 2024 (2 July 2023: $89,128,000)
Recognition and measurement
A right-of-use asset is recognised at the commencement date of a lease. The Group leases land and buildings for its
offices and retail stores under agreements with an average term of 5 years. The right-of-use asset is measured initially at
cost based on the value of the associated lease liability, adjusted for, as applicable, any lease payments made at or before
the commencement date net of any lease incentives received and any initial direct costs incurred.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease. Right-of-use assets
are subject to impairment or adjusted for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases
with terms of 12 months or less and leases of low-value assets. Short term lease payments of $11,722,000 (2 July
2023: $9,303,000) were expensed to profit or loss as incurred within occupancy expense. The remaining contractual
commitment for short term leases is $414,000 (2 July 2023: $2,907,000).
Impairment of property, plant and equipment and right-of-use assets
For impairment testing purposes the Group has determined that each store is a separate Cash Generating Unit (CGU).
Each CGU is tested for impairment at the balance sheet date if any indicators of impairment have been identified.
Based on the assessments below, a total of $14,116,000 impairment charge was recognised during the financial year
ended 30 June 2024 (2 July 2023: $0) in relation to Glue stores, comprising of $10,257,000 attributable to property,
plant and equipment (PPE) and $3,859,000 attributable to right-of-use assets.
Glue stores
In May 2024, the Group has made a decision to exit 17 underperforming Glue stores where required returns are not
being achieved. These 17 Glue stores are tested for impairment based on their respective fair values less costs of disposal
(FVLCD) (Level 3 fair values in the fair value hierarchy). The FVLCD was determined based on the assumption that PPE
attributable to each store will not be reused within the business and further assumptions around the exit time frame of
each store and the potential lease surrender payments driving the related right-of-use asset impairment.
53
Annual Report 2024
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 15. RIGHT-OF-USE ASSETS (CONTINUED)
All other stores
The impairment test for all other stores (including Glue stores that continue trading) as at 30 June 2024 was carried
out based on value in use for each CGU. The recoverable amount was determined based on the Group’s latest trading
performance at the time of assessment which represents cash flows for year one for all stores other than Glue stores.
Cash flows in year one for Glue stores incorporate a 1.5% trading risk adjustment.
Cash flows beyond year one represent a steady state 2.0% long term growth rate. Cash flows were discounted to present
value using a mid-point after-tax discount rate of 10.47% (2023: 9.85%).
The cash flows used within the impairment models are based on assumptions which are sources of estimation
uncertainty and movements in these assumptions could lead to further impairment. The key assumptions in the value in
use calculations are growth rates of sales, gross profit margins and the after-tax discount rate.
Management has performed sensitivity analysis using reasonably possible changes in the key assumptions across the
store portfolio. These reasonably possible changes do not lead to a significant increase in the impairment charge.
NOTE 16. INTANGIBLES
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Goodwill - at cost
323,628
322,568
Brands and trademarks - at cost
44,825
44,825
Less: Accumulated impairment
(9,714)
(9,714)
35,111
35,111
Licence fees - The Athlete's Foot - at cost
7,832
7,832
Less: Accumulated amortisation
(456)
(424)
7,376
7,408
Distribution rights - at cost
16,800
16,800
Less: Accumulated amortisation
(16,800)
(16,800)
–
–
Re-acquired rights
2,991
2,547
Less: Accumulated amortisation
(2,009)
(1,285)
982
1,262
Software
37,716
30,447
Less: Accumulated amortisation
(22,251)
(16,341)
15,465
14,106
Assets under construction
1,452
1,736
Intangibles
384,014
382,191
54
Accent Group Limited
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 16. INTANGIBLES (CONTINUED)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Goodwill
$'000
Brands and
trademarks
$'000
Licence
fees
$'000
Distribution
rights
$'000
Re-acquired
rights
$'000
Software
$'000
Assets
under
construction
$'000
Total
$'000
Balance at 26 June
2022
319,187
35,111
7,440
–
732
11,169
1,102
374,741
Additions
–
–
–
–
–
6,407
1,736
8,143
Additions through
business combinations
(Note 34)
3,387
–
–
–
888
–
–
4,275
Transfer
–
–
–
–
–
1,102
(1,102)
–
Exchange differences
(6)
–
–
–
–
(26)
–
(32)
Amortisation expense
–
–
(32)
–
(358)
(4,546)
–
(4,936)
Balance at 2 July 2023
322,568
35,111
7,408
–
1,262
14,106
1,736
382,191
Additions
–
–
–
–
–
5,531
1,452
6,983
Additions through
business combinations
(Note 34)
1,065
–
–
–
444
–
–
1,509
Transfer
–
–
–
–
–
1,736
(1,736)
–
Exchange differences
(5)
–
–
–
–
2
–
(3)
Amortisation expense
–
–
(32)
–
(724)
(5,910)
–
(6,666)
Balance at 30 June
2024
323,628
35,111
7,376
–
982
15,465
1,452
384,014
Recognition and measurement
Goodwill
Goodwill acquired in a business combination is initially measured at cost. Cost is measured as the cost of the business
combination minus the net fair value of the acquired and identifiable assets, liabilities and contingent liabilities. Following
initial recognition, goodwill is measured at cost less any accumulated impairment losses.
Brands and trademarks
Brands and trademarks are recognised at cost in a business combination. Brands and trademarks have indefinite useful
lives. This assessment reflects management's intention to continue to utilise these intangible assets in the foreseeable
future. Each period, the useful life of these assets is reviewed to determine whether events and circumstances continue
to support an indefinite useful life assessment for the assets.
Computer software and Software-as-a-Service (SaaS) arrangements
SaaS arrangements are arrangements in which the Group does not currently control the underlying software used in the
arrangement. Costs incurred to configure or customise SaaS arrangements that result in the creation of a resource which
is identifiable, and where the Group has the power to obtain the future economic benefits flowing from the underlying
resource and to restrict the access of others to those benefits, such costs are recognised as a separate intangible
software asset and amortised over the useful life of the software on a straight-line basis. The amortisation is reviewed at
least at the end of each reporting period and any changes are treated as changes in accounting estimates.
Useful life
Software
Finite (up to 4 years)
55
Annual Report 2024
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 16. INTANGIBLES (CONTINUED)
Other intangible assets
Intangible assets with finite lives are amortised on a straight-line basis over their useful lives and tested for impairment
whenever there is an indication that they may be impaired. The amortisation period and method is reviewed at each
financial year-end. A summary of the useful lives of other intangible assets is as follows:
Useful life
License fees
Finite (up to 249 years)
Distribution rights
Finite (up to 7 years)
Re-acquired rights
Finite (up to 8 years)
Impairment testing of goodwill
Goodwill is tested annually for impairment, or more frequently if events or changes in circumstances indicate that it might
be impaired. In the previous financial year ended 2 July 2023, for impairment testing purpose, the Group was determined
to be one Cash Generating Unit (CGU) and represented the operating segment.
As at 30 June 2024, for impairment testing purpose, the CGU is determined to be the Retail business representing the
Retail operating segment.
The impairment test as at 30 June 2024 was carried out based on value in use calculations for the CGU. The recoverable
amount was determined based on the Retail Operating Segment’s actual FY24 performance which is the basis for year
one cash flows. The cash flows include ongoing capital expenditure required to maintain the store network but exclude
any growth capital initiatives not committed. The cash flows beyond year one have been extrapolated using a steady state
2.0% long term growth rate (2023: 2.0%). It is assumed that there will be no material change to existing key distributor
agreements. Cash flows were discounted to present value using a mid-point after-tax discount rate of 12.3% (2023: 11.8%).
Management has performed sensitivity analysis using reasonably possible changes in the key assumptions. These
reasonably possible changes do not lead to an impairment charge. The Group has concluded that no impairment is required
based on expected performance and current market and economic conditions.
There is no impairment indication identified for the remaining of the Group that do not form part of the CGU and no further
asset impairment test performed.
Brand names and trademarks
The Group recognises the following brands and trademarks as indefinite life intangible assets:
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Carrying amount of brand names and trademarks:
The Athlete's Foot
3,466
3,466
Platypus
11,100
11,100
Hype DC
20,545
20,545
Brands and trademarks
35,111
35,111
Impairment testing of brands and trademarks
Intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment
or more frequently if events or changes in circumstances indicate that they might be impaired.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.
The recoverable amount was determined independently using the Relief from Royalty (‘RFR’) valuation method. The
calculations reflect actual FY24 revenue in year one. Revenue beyond year 1 represents the Group’s budgeted growth
which was approved by the Board on 30 May 2024. The calculations require the use of assumptions, including estimated
royalty rates, tax rate and estimated discount rates.
The royalty rates used in the valuation model were brand specific and based on rates observed in the market. The royalty rates
across all brands ranged between 3.5% to 5.25%. The TAF brands royalty rate was in line with current franchise agreements.
The tax rate applied in the valuation model is based on the corporate tax rate in Australia of 30.0% and the after-tax
discount rate used is 14.6% (2023: 14.8%).
Management has performed sensitivity analysis using reasonably possible changes in the key assumptions. These
reasonably possible changes do not lead to an impairment charge. The Group has concluded that no impairment is
required based on expected performance and current market and economic conditions.
56
Accent Group Limited
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 17. NET DEFERRED TAX
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Net deferred tax comprises temporary differences attributable to:
Amounts recognised in profit or loss:
Allowance for expected credit losses
165
273
Provision for shrinkage and stock obsolescence
3,440
2,851
Share-based payments
(2,645)
4,608
Provision for employee entitlements
5,914
6,985
Other provisions and accrued expenses
4,570
6,888
Difference in accounting and tax depreciation
(17,826)
(24,653)
Supplier contributions
847
954
Right-of-use asset
(73,045)
(90,142)
Lease liability
104,049
115,773
Trademarks, brand names and distribution rights
(10,734)
(10,716)
Other
2,189
1,648
16,924
14,469
Amounts recognised directly to other comprehensive income
Tax effect of hedges in reserves
(45)
(913)
Tax effect of share-based payments
5,285
3,775
5,240
2,862
Net deferred tax asset
22,164
17,331
NOTE 18. TRADE AND OTHER PAYABLES
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Trade payables
71,325
46,623
Goods and services tax payable
7,645
8,677
Accrued expenses
40,222
34,780
Other payables
32,095
20,736
151,287
110,816
Trade payables and accruals represent liabilities for goods and services provided to the Group prior to the end of
financial year which are unpaid. Other payables represent goods receipted that have not been invoiced as at 30 June
2024. Trade and other payables are stated at amortised cost. The amounts are unsecured and are usually settled within
30 to 60 days of recognition.
57
Annual Report 2024
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 19. DEFERRED REVENUE
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Current
Gift cards
5,974
5,355
Other deferred revenue
5,619
9,022
11,593
14,377
Non-current
Other deferred revenue
1,346
5,190
12,939
19,567
Deferred revenue relates to unredeemed gift cards, loyalty program liabilities, and unused supplier contributions for
fixtures, fittings and point of purchase. Revenue is recognised when the gift cards and loyalty points are redeemed or
expire. The unused supplier contributions will be utilised for future store openings and refurbishments.
NOTE 20. PROVISIONS
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Current
Employee benefits
17,456
20,271
Other provisions
3,206
3,542
20,662
23,813
Non-Current
Employee benefits
1,736
840
22,398
24,653
Recognition and measurement
Employee benefits
Liabilities for annual leave, bonuses and other employee benefits expected to be settled wholly within 12 months of the
reporting date are measured at the amounts expected to be paid when the liabilities are settled.
Employee benefits not expected to be settled within 12 months of the reporting date are measured at the present
value of expected future payments to be made in respect of services provided by employees up to the reporting date.
Consideration is given to expected future wage and salary levels, experience of employee departures and periods of
service. Expected future payments are discounted using market yields at the reporting date on high quality corporate
bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event,
it is probable the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the reporting date.
58
Accent Group Limited
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 21. BORROWINGS
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Current
Secured
Working capital facility
11,000
10,000
Capitalised debt transaction costs
(341)
(46)
10,659
9,954
Non-Current
Secured
Bank loans
140,000
140,000
Capitalised debt transaction costs
(406)
(650)
139,594
139,350
Borrowings
150,253
149,304
Movements in borrowings
Movements in current borrowings during the current financial year is set out below:
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Carrying amount at start of the year
149,304
169,016
Repayments
–
(20,000)
Additional loans
1,000
–
Capitalised debt transaction costs
(51)
288
Carrying amount at end of the year
150,253
149,304
The outstanding financing facilities have a combination of three and five-year tenure, expiring between December 2026
and December 2027. The weighted average interest rate on these financing facilities is 5.86%.
Recognition and measurement
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured
at amortised cost.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting date and intends to do so.
The Group monitors compliance with its financial covenants on a monthly basis and reports compliance on a monthly
basis to the banks. The Group has complied with all such requirements.
Assets pledged as security
The senior bank debt is secured by cross-guarantees and all assets of Accent Group Limited and each of its wholly-
owned subsidiaries. Total secured assets amounted to $858,306,000 at 30 June 2024 (2 July 2023: $843,637,000).
59
Annual Report 2024
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 21. BORROWINGS (CONTINUED)
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Total facilities
Bank overdraft
12,000
12,000
Bank loans
140,000
140,000
Working capital facility
84,101
120,240
Bank guarantee and letters of credit
31,799
25,660
267,900
297,900
Used at the reporting date
Bank loans
140,000
140,000
Working capital facility
11,000
10,000
Bank guarantee and letters of credit
27,005
21,341
178,005
171,341
Unused at the reporting date
Bank overdraft
12,000
12,000
Working capital facility
73,101
110,240
Bank guarantee and letters of credit
4,794
4,319
89,895
126,559
NOTE 22. LEASE LIABILITIES
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Current
Lease liability
138,039
132,130
Non-current
Lease liability
253,911
276,846
Total lease liabilities
391,950
408,976
Less than one year
146,370
134,937
One to five years
271,638
279,629
More than five years
5,339
5,286
Total undiscounted lease liabilities
423,347
419,852
Recognition and measurement
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the Group's incremental borrowing
rate. Leases are entered into for varying terms and rent reviews are based on CPI increases or fixed increases. Variable
lease payments are expensed in the period in which they are incurred.
60
Accent Group Limited
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 22. LEASE LIABILITIES (CONTINUED)
The carrying amount of a lease liability is remeasured if there is a change in the lease payments arising from a change
in an index or a rate used and a change in lease term. Most of the Group’s leases do not contain renewal or extension
options. When a lease liability is remeasured, an adjustment is made to the corresponding right-of-use asset, or to profit
or loss if the carrying amount of the right-of-use asset is fully written down.
NOTE 23. EQUITY - ISSUED CAPITAL
Consolidated
30 Jun 2024
Shares
2 Jul 2023
Shares
30 Jun 2024
$'000
2 Jul 2023
$'000
Ordinary shares - fully paid
563,053,196
552,459,958
390,926
390,926
Ordinary shares
Ordinary shares are classified as equity and entitle the holder to participate in dividends and the proceeds on the
winding up of the Company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary
shares have no par value and the Company does not have a limited amount of authorised capital.
Share buy-back
There is no current on-market share buy-back.
Movements in ordinary share capital
Details
Date
Shares
Issue price
$'000
Balance
26 June 2022
541,866,715
390,926
Shares issued during the period
18 November 2022
10,593,243
–
–
Balance
2 July 2023
552,459,958
390,926
Shares issued during the period(i)
8 September 2023
10,593,238
–
–
Balance
30 June 2024
563,053,196
390,926
(i) A total of 10,593,238 (2 July 2023: 10,593,243) ordinary shares were issued in relation to the performance rights plan.
NOTE 24. EQUITY - RESERVES
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Foreign currency translation reserve
1,141
1,202
Hedging reserve - cash flow hedges
104
2,135
Share-based payments reserve
32,601
33,619
33,846
36,956
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the
financial statements of foreign subsidiaries.
Hedging reserve - cash flow hedges
Changes in the fair value of derivative financial instruments that are designated and effective as hedges of future cash
flows are recognised in other comprehensive income with the remaining change in fair value recognised in the hedging
reserve. Any ineffective portion is recognised immediately in the statement of profit or loss and other comprehensive
income.
Share-based payments reserve
The share-based payments reserve is used to recognise the value of equity-settled share-based payments provided to
employees, including key management personnel, as part of their remuneration.
61
Annual Report 2024
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 25. EQUITY - DIVIDENDS
Dividends
Dividends paid during the financial year were as follows:
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Final dividend for the year ended 2 July 2023 of 5.50 cents (2022: 4.00 cents) per
ordinary share
30,968
21,675
Interim dividend for the year ended 30 June 2024 of 8.50 cents (2023: 12.00 cents) per
ordinary share
47,859
66,295
78,827
87,970
In respect of the financial year ended 30 June 2024, the directors recommended the payment of a final fully franked
dividend of 4.50 cents per share to be paid on 26 September 2024 to the registered holders of fully paid ordinary shares as
at 12 September 2024.
Franking credits
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Franking credits available for subsequent financial years based on a tax rate of 30%
12,028
17,430
New Zealand imputation credits available to New Zealand residential shareholders amount to NZ$3,406,000
(2 July 2023: NZ$1,558,000).
NOTE 26. FINANCIAL INSTRUMENTS
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk
and interest rate risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance
of the Group. The Group uses derivative financial instruments such as forward foreign exchange contracts to hedge
foreign currency exposures and interest rate swaps to hedge interest rate exposures. Derivatives are exclusively used for
hedging purposes, i.e. not as trading or other speculative instruments. The Group uses different methods to measure
different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign
exchange and other price risks and ageing analysis for credit risk.
Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of
Directors ('the Board'). These policies include identification and analysis of the risk exposure of the Group and
appropriate procedures, controls and risk limits. Finance identifies, evaluates and hedges financial risks within the
Group's operating units. Finance reports to the Board on a periodic basis.
Market risk
Foreign currency risk
The Group has transactional foreign currency exposures arising from the purchase of inventory denominated in
US dollars. To minimise the impact of changes in the Australian Dollar/US Dollar exchange rate on profit and loss, the
Group enters into forward exchange contracts in accordance with its Board-approved foreign exchange hedging policy.
The Group enters into hedge relationships where the critical terms of the hedging instrument match exactly with the
terms of the hedged item. The Group therefore performs a qualitative assessment of effectiveness based on critical
terms match. In hedges of foreign currency purchases, ineffectiveness may arise if the timing of the forecast transaction
changes from what was originally estimated, or if there are changes in the credit risk of Australia or the derivative
counterparty.
62
Accent Group Limited
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 26. FINANCIAL INSTRUMENTS (CONTINUED)
The Group's exposure to foreign currency risk as at the end of the reporting period, expressed in Australian dollars,
is shown below:
30 Jun 2024
2 Jul 2023
Consolidated
US dollar
transactional
exposure
$'000
Australian
dollar
equivalent
$'000
US dollar
transactional
exposure
$'000
Australian
dollar
equivalent
$'000
Forward contracts
77,849
117,366
99,214
145,662
Foreign currency trade payables
18,814
28,403
19,357
29,196
Transactional foreign exchange risk
96,663
145,769
118,571
174,858
The sensitivity of the Group's transactional foreign currency risk exposure is estimated by assessing the impact that a
10% increase and 10% decrease in the Australian Dollar/US Dollar exchange rate would have on profit and equity of the
Group at the reporting date.
30 Jun 2024
2 Jul 2023
Movement
in Australian
dollar/
US dollar
exchange rate
%
Increase/
(decrease) in
profit or loss
$'000
Increase/
(decrease)
in other
comprehensive
income
$'000
Movement
in Australian
dollar/
US dollar
exchange rate
%
Increase/
(decrease) in
profit or loss
$'000
Increase/
(decrease)
in other
comprehensive
income
$'000
Forward Contracts
10%
–
(7,508)
10%
–
(6,735)
(10%)
–
8,452
(10%)
–
13,263
Trade Payables
10%
387
2,195
10%
352
2,302
(10%)
(473)
(2,683)
(10%)
(431)
(2,813)
The maturity, settlement amounts and the average contractual exchange rates of the Group's outstanding forward
foreign exchange contracts at the reporting date were as follows:
Sell Australian dollars
Average exchange rates
30 Jun 2024
$'000
2 Jul 2023
$'000
30 Jun 2024
2 Jul 2023
Buy US dollars
Maturity:
0 - 3 months
42,336
95,673
0.6578
0.6732
3 - 6 months
63,074
49,989
0.6659
0.7069
6 - 12 months
11,956
–
0.6664
–
> 12 months
–
–
–
–
Translational Foreign Currency Risk
The Group includes certain subsidiaries whose functional currencies are different to the Group’s presentation currency
of Australian Dollars. As stated in Note 2, on consolidation the assets and liabilities of these entities are translated into
Australian dollars at exchange rates prevailing on the balance date. The income and expenses of these entities are
translated at the average exchange rates for the year. Exchange differences arising are classified as equity and are
transferred to a foreign exchange translation reserve. The main operating entities outside of Australia are based in
New Zealand. The Group’s future reported profits could therefore be impacted by changes in rates of exchange between
the Australian Dollar and the New Zealand Dollar.
30 Jun 2024
2 Jul 2023
NZ dollar
translational
exposure
$'000
Australian
dollar
equivalent
$'000
NZ dollar
translational
exposure
$'000
Australian
dollar
equivalent
$'000
New Zealand dollar net assets
8,344
7,636
8,055
7,402
63
Annual Report 2024
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 26. FINANCIAL INSTRUMENTS (CONTINUED)
The sensitivity of the Group's translational foreign currency risk exposure is estimated by assessing the impact that a
10% increase and 10% decrease in the Australian Dollar/NZ Dollar exchange rate would have on profit and equity of the
Group at the reporting date.
30 Jun 2024
2 Jul 2023
Movement
in Australian
dollar/
NZ dollar
exchange rate
%
Increase/
(decrease)
in other
comprehensive
income
$'000
Movement
in Australian
dollar/
NZ dollar
exchange rate
%
Increase/
(decrease)
in other
comprehensive
income
$'000
New Zealand dollar net assets
10%
(694)
10%
(673)
(10%)
848
(10%)
822
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The Group's main interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the
Group to interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk.
As at the reporting date, the Group had the following cash and cash equivalents, variable rate borrowings and interest
rate swap contracts outstanding:
30 Jun 2024
2 Jul 2023
Consolidated
Weighted
average
interest rate
%
Balance
$'000
Weighted
average
interest rate
%
Balance
$'000
Bank loans
5.87%
(140,000)
5.67%
(140,000)
Working capital facility
5.80%
(11,000)
5.59%
(10,000)
Interest rate swap
–
–
1.84%
37,500
Net exposure to cash flow interest rate risk
(151,000)
(112,500)
Sensitivity impact of interest rate changes has not been shown as a 0.5% change in interest rates would have an
immaterial profit or loss impact based on the net exposure to cash flow interest rate risk at balance date.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Group. The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount,
net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the
financial statements.
Credit risk is managed on a group basis. Risk control assesses the credit quality of wholesale customers, taking into
account its financial position, past experience and other factors. Individual risk limits are set based on internal or external
ratings in accordance with limits set by the Group policy. The compliance with credit limits by wholesale customers is
regularly monitored by management.
Sales to retail customers are required to be settled in cash or using major credit cards, mitigating credit risk. There are
no significant concentrations of credit risk, whether through exposure to individual customers, specific industry sectors
and/or regions.
64
Accent Group Limited
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 26. FINANCIAL INSTRUMENTS (CONTINUED)
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash
equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable.
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by
continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and
liabilities.
Financial covenants are provided to its lenders by the Group with respect to leverage, gearing and fixed charges
coverage. The Group has complied with the financial covenants of its borrowing facilities during the 2024 and 2023
financial years.
All measurements are monitored month-to-month and reported to the banks on a semi-annual basis.
Financing arrangements
Unused borrowing facilities at the reporting date:
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Bank overdraft
12,000
12,000
Working capital facility
73,101
110,240
Bank guarantee and letters of credit
4,794
4,319
89,895
126,559
Remaining contractual maturities
The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The tables
have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which
the financial liabilities are required to be paid, and therefore these totals may differ from their carrying amount in the
statement of financial position.
Consolidated - 30 Jun 2024
Weighted
average
interest rate
%
1 year or less
$'000
Between
1 and 2 years
$'000
Between
2 and 5 years
$'000
Over 5 years
$'000
Remaining
contractual
maturities
$'000
Non-derivatives
Non-interest bearing
Trade payables
71,325
–
–
–
71,325
Other payables
32,095
–
–
–
32,095
Lease liabilities
146,370
113,119
158,519
5,339
423,347
Interest-bearing - variable
Term loans
5.87%
8,214
8,214
143,466
–
159,894
Working capital facility
5.80%
11,009
–
–
–
11,009
Total non-derivatives
269,013
121,333
301,985
5,339
697,670
Derivatives
Interest rate swaps net settled
–
–
–
–
–
Forward foreign exchange
contracts net settled
315
–
–
–
315
Total derivatives
315
–
–
–
315
65
Annual Report 2024
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 26. FINANCIAL INSTRUMENTS (CONTINUED)
Consolidated - 2 Jul 2023
Weighted
average
interest rate
%
1 year
or less
$'000
Between
1 and 2 years
$'000
Between
2 and 5 years
$'000
Over
5 years
$'000
Remaining
contractual
maturities
$'000
Non-derivatives
Non-interest bearing
Trade payables
46,623
–
–
–
46,623
Other payables
20,736
–
–
–
20,736
Lease liabilities
134,937
110,774
168,855
5,286
419,852
Interest-bearing - variable
Term loans
5.67%
7,943
7,943
151,272
–
167,158
Working capital facility
5.59%
10,043
–
-
–
10,043
Total non-derivatives
220,282
118,717
320,127
5,286
664,412
Derivatives
Interest rate swaps net settled
1.84%
(220)
–
–
–
(220)
Forward foreign exchange
contracts net settled
(3,518)
–
–
–
(3,518)
Total derivatives
(3,738)
–
–
–
(3,738)
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.
Capital risk management
The Group manages its capital to ensure that all the entities within the Group are able to continue as going concerns
while maximising the return to stakeholders through the optimisation of the debt and equity balance.
The capital structure of the Group consists of cash and cash equivalents, trade and other receivables, inventories,
intangibles and net working capital. The equity attributable to equity holders of the parent entity comprises issued
capital, reserves and accumulated losses.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting the Group’s
capital structure in response to changes in these risks and in the market. These responses include the management of
debt levels, distributions to shareholders and share issues.
None of the Group entities are subject to externally-imposed capital requirements.
NOTE 27. FAIR VALUE MEASUREMENT
The only financial assets or financial liabilities carried at fair value are interest rate swaps and foreign currency forward
contracts. All these instruments are Level 2 financial instruments because, unlike Level 1 financial instruments, their
measurement is derived from inputs other than quoted prices that are observable for the assets or liabilities, either
directly or indirectly.
Valuation techniques for fair value measurements
The fair values are determined using the valuation techniques below. The fair value was obtained from third party valuations.
Forward foreign exchange contracts
The fair value was obtained from third party valuations derived from discounted cash flow forecasts of forward exchange
rates at the end of the reporting period and contract exchange rates.
Interest rate swap contracts
Future cash flows are estimated based on forward interest rates (from observable yield curves at the end of the reporting
period) and contract interest rates, discounted at a rate that reflects the credit risk of various counterparties.
There were no transfers between levels during the year.
The carrying amount of other financial assets and financial liabilities recorded in the financial statements approximate
their fair values.
66
Accent Group Limited
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 28. KEY MANAGEMENT PERSONNEL COMPENSATION
The aggregate compensation made to directors and other members of key management personnel of the Group is set
out below:
Consolidated
30 Jun 2024
$
2 Jul 2023
$
Short-term employee benefits
3,256,568
4,836,076
Post-employment benefits
108,287
105,924
Long-term benefits
276,664
190,148
Share-based payments
(744,522)
1,262,313
2,896,997
6,394,461
NOTE 29. REMUNERATION OF AUDITORS
During the financial year the following fees were paid or payable for services provided by PricewaterhouseCoopers, the
auditor of the Group:
Consolidated
30 Jun 2024
$
2 Jul 2023
$
Audit services - PricewaterhouseCoopers
Audit or review of the financial statements
768,790
650,000
Other services - PricewaterhouseCoopers
Other consulting services
–
–
768,790
650,000
NOTE 30. CONTINGENT LIABILITIES
The Group has bank guarantees outstanding as at 30 June 2024 of $3,937,000 (2 July 2023: $2,740,000). The Group
also has open letters of credit of $23,068,000 (2 July 2023: $17,797,000). These guarantees and letters of credit are in
favour of international stock suppliers and landlords where parent guarantees cannot be negotiated.
NOTE 31. COMMITMENTS
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Capital commitments
Committed at the reporting date but not recognised as liabilities, payable:
Property, plant and equipment
14,697
17,909
The commitment amounts disclosed above represent the maximum amounts that the Group is obliged to pay and
exclude landlord contributions to store fit-out costs.
67
Annual Report 2024
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 32. RELATED PARTY TRANSACTIONS
Parent entity
Accent Group Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in Note 35.
Key management personnel
Disclosures relating to key management personnel are set out in Note 28 and the remuneration report included in the
directors' report.
Entities associated with key management personnel
Rivan Pty Limited, a shareholder, is a company associated with David Gordon.
2 Como Pty Ltd, a shareholder, is a company associated with Daniel Agostinelli.
BBRC International Pte Ltd, a shareholder, is a company associated with Brett Blundy.
Musician Pty Ltd, a shareholder, is a company associated with Matthew Durbin.
Milner York Pty Ltd ATF Milner York Family Trust, a shareholder, is a company associated with Joshua Lowcock.
HIT Group Limited ATF Hapgood Investment Trust, a shareholder, is a company associated with Michael Hapgood.
Lyneliz Pty Ltd is a company associated with Daniel Agostinelli.
JOA5 Pty Ltd (previously known as Retail Reality Pty Ltd) is a company associated with Daniel Agostinelli.
Boxed to Go (JOA5 Investments Pty Ltd) is a company associated with Daniel Agostinelli.
Bodyelectric Pty Limited, a shareholder, is a company associated with Lawrence Myers.
Exodus Enterprises Pty Limited, a shareholder, is a company associated with Lawrence Myers.
Transactions with related parties
The following transactions occurred with related parties:
In the previous financial year ended 2 July 2023, Placed Pty Ltd, which was then a company associated with Brett Blundy,
provided recruitment services to the Group amounting to $54,081. The company is no longer a related party in the
financial year ended 30 June 2024.
Lyneliz Pty Ltd, a company associated with Daniel Agostinelli, provided storage services to the Group amounting to $0
(2 July 2023: $60,000).
Loans to/from and outstanding balances with related parties
There were no loans to/from and no balances receivable from/owing to related parties outstanding at the reporting date.
NOTE 33. PARENT ENTITY INFORMATION
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Parent
30 Jun 2024
$'000
2 Jul 2023
$'000
Profit after income tax
93,452
123,592
Other comprehensive income for the year, net of tax
–
–
Total comprehensive income
93,452
123,592
68
Accent Group Limited
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 33. PARENT ENTITY INFORMATION (CONTINUED)
Statement of financial position
Parent
30 Jun 2024
$'000
2 Jul 2023
$'000
Total current assets
202,738
184,421
Total non-current assets
375,096
374,907
Total assets
577,834
559,328
Total current liabilities
10,297
11,843
Total non-current liabilities
147,885
141,439
Total liabilities
158,182
153,282
Net assets
419,652
406,046
Equity
Issued capital
390,926
390,926
Share-based payments reserve
32,600
33,618
Accumulated losses
(3,874)
(18,498)
Total equity
419,652
406,046
The financial information for the parent entity has been prepared on the same basis as the consolidated financial
statements, except as set out below.
–
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
–
Dividends received from subsidiaries are recognised in the parent entity’s profit or loss.
NOTE 34. BUSINESS COMBINATIONS
30 June 2024
During the year to 30 June 2024, the Group completed the acquisition of 3 TAF stores. The total consideration
transferred for these acquisitions was $2,206,000. Goodwill of $1,065,000 was recognised on acquisition.
Details of the business combinations are as follows:
Provisional
Fair value
$'000
Cash and cash equivalents
1
Inventories
500
Right-of-use assets
501
Net deferred tax assets
214
Provisions
(18)
Lease Liability
(501)
Net assets acquired
697
Reacquired rights
444
Goodwill
1,065
Acquisition-date fair value of the total consideration transferred
2,206
Representing:
Cash paid or payable to vendor
2,212
Outstanding debt
(6)
2,206
69
Annual Report 2024
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 34. BUSINESS COMBINATIONS (CONTINUED)
Details of the cash flow movement relating to the acquisition are as follows:
Provisional
Fair value
$'000
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
2,206
Less: cash and cash equivalents
(1)
Less: outstanding debts/loans forgiven
6
Net cash used
2,211
The fair value of assets acquired, liabilities and contingent liabilities assumed are initially estimated by the Group taking
into consideration all available information at the reporting date. Fair value adjustments on the finalisation of the
business combination accounting is retrospective, where applicable, to the period the combination occurred and may
have an impact on the assets and liabilities, depreciation and amortisation reported.
The 3 TAF stores contributed revenue of $1,832,000 from the acquisition dates to 30 June 2024.
2 July 2023
During the year to 2 July 2023, the Group completed the acquisition of 6 TAF stores. The total consideration transferred
for these acquisitions was $6,288,000. Goodwill of $3,387,000 was recognised on acquisition. The 6 TAF stores
contributed revenue of $8,399,000 from the acquisition dates to 2 July 2023.
Details of the assets and liabilities acquired are as follows:
Fair value
$'000
Cash and cash equivalents
2
Inventories
1,533
Right-of-use assets
2,030
Net deferred tax assets
531
Provisions
(53)
Lease liability
(2,030)
Net assets acquired
2,013
Reacquired rights
888
Goodwill
3,387
Acquisition-date fair value of the total consideration transferred
6,288
Representing:
Cash paid or payable to vendor
6,100
Outstanding debts/loans forgiven
188
6,288
Details of the cash flow movement relating to the acquisition are as follows:
Fair value
$'000
Cash used to acquire business, net of cash acquired:
Acquisition-date fair value of the total consideration transferred
6,288
Less: cash and cash equivalents
(2)
Less: outstanding debts/loans forgiven
(188)
Net cash used
6,098
70
Accent Group Limited
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 35. INTERESTS IN SUBSIDIARIES
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in Note 2:
Ownership interest
Name
Principal place of business/Country of incorporation
30 Jun 2024
%
2 Jul 2023
%
The Athlete's Foot Australia Pty Ltd
Australia
100%
100%
TAF Constructions Pty Ltd(a)
Australia
100%
100%
RCG Brands Pty Ltd
Australia
100%
100%
RCG Retail Pty Ltd
Australia
100%
100%
TAF eStore Pty Ltd(a)
Australia
100%
100%
TAF Partnership Stores Pty Ltd(a)
Australia
100%
100%
TAF Rockhampton Pty Ltd(b)
Australia
100%
100%
TAF Eastland Pty Ltd(b)
Australia
100%
100%
TAF The Glen Pty Ltd(b)
Australia
100%
100%
TAF Hornsby Pty Ltd(b)
Australia
100%
100%
TAF Hobart Pty Ltd(b)
Australia
100%
100%
TAF Booragoon Pty Ltd(b)
Australia
100%
100%
Accent Group Ltd(c)
New Zealand(f)
100%
100%
Platypus Shoes Ltd(d)
New Zealand(f)
100%
100%
Accent Footwear Ltd(d)
New Zealand(f)
100%
100%
Hype DC Ltd(d)
New Zealand(f)
100%
100%
TAF New Zealand Ltd(d)
New Zealand(f)
100%
100%
Accent Brands Pty Ltd(c)
Australia
100%
100%
Platypus Shoes (Australia) Pty Ltd(c)
Australia
100%
100%
42K Pty Ltd(e)
Australia
100%
100%
Accent Store Development Pty Ltd
Australia
100%
100%
RCG Accent Group Holdings Pty Ltd
Australia
100%
100%
Hype DC Pty Ltd
Australia
100%
100%
Subtype Pty Ltd
Australia
100%
100%
Pivot Store Pty Ltd
Australia
100%
100%
Accent Lifestyle Pty Ltd
Australia
100%
100%
Accent Active Pty Ltd
Australia
100%
100%
Subtype Limited(d)
New Zealand(f)
100%
100%
Accent Active (NZ) Limited
New Zealand(f)
100%
100%
Accent Lifestyle (NZ) Limited
New Zealand(f)
100%
100%
(a) Indirectly held through The Athlete's Foot Australia Pty Ltd
(b) Indirectly held through TAF Partnership Stores Pty Ltd
(c) Indirectly held through RCG Accent Group Holdings Pty Ltd
(d) Indirectly held through Accent Group Ltd (New Zealand)
(e) Indirectly held through Accent Brands Pty Ltd
(f) The functional currency of these foreign subsidiaries is NZD
71
Annual Report 2024
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 36. DEED OF CROSS GUARANTEE
The following entities are party to a deed of cross guarantee under which each company guarantees the debts of
the others:
Accent Group Ltd
(ACN 108 096 251)
RCG Brands Pty Ltd
(ACN 125 433 972)
The Athlete's Foot Australia Pty Ltd
(ACN 001 777 582)
RCG Retail Pty Ltd
(ACN 144 955 117)
RCG Accent Group Holdings Pty Ltd
(ACN 613 017 422)
Hype DC Pty Limited
(ACN 081 432 313)
TAF Partnership Stores Pty Ltd
(ACN 164 791 048)
TAF eStore Pty Ltd
(ACN 158 031 040)
T.A.F Constructions Pty Ltd
(ACN 097 684 430)
Accent Group Pty Ltd
(ACN 001 742 552)
Platypus Shoes (Australia) Pty Ltd
(ACN 122 726 907)
42K Pty Ltd
(ACN 169 043 145)
Accent Store Development Pty Ltd
(ACN 611 621 482)
Subtype Pty Ltd
(ACN 628 866 419)
Pivot Store Pty Ltd
(ACN 634 893 691)
Accent Lifestyle Pty Ltd
(ACN 636 815 284)
Accent Active Pty Ltd
(ACN 637 053 028)
By entering into the deed, the wholly-owned entities have been relieved from the requirement to prepare financial
statements and directors' report under Corporations Instrument 2016/785 issued by the Australian Securities and
Investments Commission.
The above subsidiaries and Accent Group Limited, together referred to as the ‘Closed Group’, have either originally
entered the Deed on 23 February 2017 or have subsequently joined the Deed.
Set out below is a consolidated statement of profit or loss and other comprehensive income and statement of financial
position of the 'Closed Group'.
Statement of profit or loss and other comprehensive income
30 Jun 2024
$'000
2 Jul 2023
$'000
Revenue
1,301,315
1,280,949
Other income
9,769
–
Interest revenue
1,587
1,377
Cost of sales
(557,176)
(545,538)
Distribution expenses
(55,967)
(54,826)
Marketing expenses
(38,401)
(48,558)
Occupancy expenses
(32,749)
(21,740)
Employee expenses
(286,384)
(268,866)
Other expenses
(69,011)
(54,326)
Depreciation, amortisation and impairment expense
(165,243)
(142,196)
Finance costs
(26,180)
(19,086)
Profit before income tax expense
81,560
127,190
Income tax expense
(22,268)
(28,761)
Profit after income tax expense
59,292
98,429
Other comprehensive income
Net change in the fair value of cash flow hedges taken to equity, net of tax
(2,148)
(4,058)
Foreign currency translation
(1,369)
(5,161)
Other comprehensive income for the year, net of tax
(3,517)
(9,219)
Total comprehensive income for the year
55,775
89,210
72
Accent Group Limited
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 36. DEED OF CROSS GUARANTEE (CONTINUED)
Statement of financial position
30 Jun 2024
$'000
2 Jul 2023
$'000
Current assets
Cash and cash equivalents
16,720
21,805
Trade and other receivables
54,787
51,544
Inventories
234,345
211,751
Lease receivables
7,459
9,324
Derivative financial instruments
–
3,738
Other current assets
6,347
6,081
Current tax receivable
4,246
–
Total current assets
323,904
304,243
Non-current assets
Property, plant and equipment
106,256
119,527
Right-of-use assets
236,370
246,984
Lease receivables
8,484
10,231
Intangibles
383,594
381,968
Net deferred tax assets
18,799
14,459
Total non-current assets
753,503
773,169
Total assets
1,077,407
1,077,412
Current liabilities
Trade and other payables
135,122
97,920
Deferred revenue
10,290
12,594
Provisions
19,296
21,792
Borrowings
10,659
9,954
Lease liabilities
123,034
117,559
Derivative financial instruments
315
–
Provision for income tax
–
73
Total current liabilities
298,716
259,892
Non-current liabilities
Provisions
1,736
840
Deferred revenue
1,197
4,308
Borrowings
139,594
139,350
Lease liabilities
226,630
241,532
Total non-current liabilities
369,157
386,030
Total liabilities
667,873
645,922
Net assets
409,534
431,490
Equity
Issued capital
390,926
390,926
Reserves
34,074
38,607
(Accumulated losses)/Retained earnings
(15,466)
1,957
Total equity
409,534
431,490
73
Annual Report 2024
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 37. CASH FLOW INFORMATION
Reconciliation of profit after income tax to net cash from operating activities
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Profit after income tax expense for the year
59,530
88,653
Adjustments for:
Depreciation and amortisation
169,159
159,433
Share-based payments
(2,528)
3,137
Provision for asset impairment
14,134
–
Foreign exchange differences
307
633
Net gain on lease modifications
(748)
(2,964)
Other non-cash items
401
(1,798)
Change in assets and liabilities, net of the effect from acquisition of businesses
Receivables
326
15,462
Inventories
(24,738)
3,558
Trade creditors and provisions
35,372
(20,485)
Tax assets and liabilities
(5,164)
10,959
Net cash from operating activities
246,051
256,588
NOTE 38. EARNINGS PER SHARE
Consolidated
30 Jun 2024
$'000
2 Jul 2023
$'000
Profit after income tax
59,530
88,653
Profit after income tax attributable to the owners of Accent Group Limited
59,530
88,653
Number
Number
Weighted average number of ordinary shares used as the denominator in calculating
basic earnings per share
561,097,970
548,623,486
Adjustments for calculation of diluted earnings per share:
Performance rights
2,945,783
18,927,830
Weighted average number of ordinary shares used as the denominator in calculating
diluted earnings per share
564,043,753
567,551,316
Cents
Cents
Basic earnings per share
10.61
16.16
Diluted earnings per share
10.55
15.62
Recognition and measurement
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Accent Group Limited,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares
outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
74
Accent Group Limited
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 39. SHARE-BASED PAYMENTS
Performance rights
The objective of the Performance Rights Plan ('PRP') is to align the interests of employees of the Group with those of the
shareholders and provide employees of the Group who are considered to be key to the future success of the Company
with an opportunity to receive shares in order to reward and retain the services of those persons and recognise the
employees of the Group for their contribution to the future success of the Company.
Eligibility and grant of performance rights
The Board may, from time to time, grant performance rights to an employee of the Group who the Board determines
to be eligible to participate in the PRP. This may include an executive director of the Company but may not include a
non-executive director of the Company. The performance rights granted are under the terms and conditions of the PRP
and may include additional terms and conditions, including any performance conditions, as the Board determine. The
Board may only grant performance rights where an employee continues to satisfy any relevant conditions imposed by
the Board.
Vesting of performance rights
Vesting of performance rights are subject to prescribed performance conditions. The number of equity instruments
that are expected to vest is based on management’s assessment of the likelihood of the vesting conditions attached to
the equity instruments being satisfied. The key vesting conditions that are assessed are earnings per share targets and
required service periods. If the performance condition is met, 100% of the performance rights vest. If the performance
condition is not met, none of the performance rights vest unless the Board determines otherwise.
Recognition and measurement
The Group recognises the fair value at the grant date of equity settled shares as an expense with a corresponding
increase in equity over the vesting period. Fair value is independently determined using the Black-Scholes option pricing
model, as appropriate, that takes into account the exercise price, the term of the option, the impact of dilution, the share
price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free
interest rate for the term of the option. Vesting is also subject to the recipients of the performance rights remaining in
employment with the Company.
Lapsing of performance rights
An unvested performance right will lapse in various prescribed circumstances, unless the Board determines otherwise.
Such circumstances include:
–
the circumstances specified by the Board on or before the grant of the performance right;
–
if a participant ceases to be an employee and/or director of a Group company for any reason or they cease to satisfy
any other relevant conditions imposed by the Board at the time of the grant of the performance rights;
–
failure to meet the performance conditions attaching to the performance right or any performance condition no
longer, in the opinion of the Board, being capable of being satisfied in accordance with their terms; and
–
if in the opinion of the Board a participant acts fraudulently or dishonestly, is in breach of their material duties or
obligations to any Group company, has committed an act of harassment or discrimination or has done any act which
has brought the Group or any Group company into disrepute.
Performance rights outcomes
In 2020 the Board exercised its discretion and determined that the performance condition for 50% of the performance
rights granted in 2017 had been met and would therefore vest on 19 August 2022. These performance rights are still subject
to the recipients remaining in employment with the Group. For the remaining 50%, on 31 May 2022, the Board exercised
its discretion and deferred the vesting period by 12 months to 19 August 2023. These Performance Rights continue to be
subject to all other relevant plan rules. Shareholder approval for the deferral has been obtained on 11 November 2022 in
accordance with ASX requirements.
More information is available in relation to the outcomes of performance rights within the Remuneration Report.
During the financial year ended 30 June 2024, Tranche 7 of PRP was granted to eligible employees. The assessed fair
value at respective grant dates was $1.50 per unit of performance right. The fair value at the respective grant dates is
independently determined using the Black-Scholes Model that takes into account the exercise price, the term of the
PRP, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and
the risk-free interest rate for the term of the PRP.
The model inputs included:
–
Share price at the respective grant dates: $1.94
–
Expected dividend yield: 9.04%
–
Risk-free interest rate: 4.10%
75
Annual Report 2024
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 39. SHARE-BASED PAYMENTS (CONTINUED)
Set out below are summaries of the performance rights granted:
30 Jun 2024
Grant date
Expiry date
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/other
Balance at
the end of
the year
03/10/2017
24/08/2023
6,400,000
–
(6,400,000)
–
–
27/12/2017
24/08/2023
3,250,000
–
(3,250,000)
–
–
20/06/2018
24/08/2023
200,000
–
(200,000)
–
–
30/11/2019
24/08/2023
743,238
–
(743,238)
–
–
30/11/2019
01/07/2024
2,945,783
–
–
–
2,945,783
30/11/2020
01/09/2024
5,388,809
–
–
(178,638)
5,210,171
28/06/2021
01/09/2025
4,530,648
–
–
(239,122)
4,291,526
02/11/2023
01/09/2026
–
4,275,253
–
–
4,275,253
17/11/2023
01/09/2026
–
1,225,831
–
–
1,225,831
23,458,478
5,501,084
(10,593,238)
(417,760)
17,948,564
2 Jul 2023
Grant date
Expiry date
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/other
Balance at
the end of
the year
03/10/2017
24/08/2023
12,800,000
–
(6,400,000)
–
6,400,000
27/12/2017
24/08/2023
6,500,000
–
(3,250,000)
–
3,250,000
20/06/2018
24/08/2023
400,000
–
(200,000)
–
200,000
30/11/2019
24/08/2023
1,486,481
–
(743,243)
–
743,238
30/11/2019
01/07/2024
3,269,882
–
–
(324,099)
2,945,783
30/11/2020
01/09/2024
6,076,707
–
–
(687,898)
5,388,809
28/06/2021
01/09/2025
5,060,662
–
–
(530,014)
4,530,648
35,593,732
–
(10,593,243)
(1,542,011)
23,458,478
The weighted average remaining contractual life of performance rights outstanding at the end of the financial year was
1 year (2023: 0.88 year).
NOTE 40. SUMMARY OF OTHER MATERIAL ACCOUNTING POLICIES
Material and other accounting policies adopted in the preparation of the financial statements are provided throughout
the notes. These policies have been consistently applied to all the years presented, unless otherwise stated.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
Group's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within
12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or
used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is
held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is
no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other
liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
76
Accent Group Limited
for the year ended 30 June 2024
NOTES TO THE FINANCIAL STATEMENTS
NOTE 40. SUMMARY OF OTHER MATERIAL ACCOUNTING POLICIES (CONTINUED)
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity
instruments or other assets are acquired.
The consideration transferred is the sum of the acquisition date fair values of the assets transferred, equity instruments
issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling
interest in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at
either fair value or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed
as incurred to profit or loss.
On the acquisition of a business, the Group assesses the financial assets acquired and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic conditions, the Group's operating or
accounting policies and other pertinent conditions in existence at the acquisition date.
Where the business combination is achieved in stages, the Group remeasures its previously held equity interest in the
acquiree at the acquisition date fair value and the difference between the fair value and the previous carrying amount is
recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent
changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss.
Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within
equity.
The difference between the acquisition date fair value of assets acquired, liabilities assumed and any non-controlling
interest in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing
investment in the acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is
less than the fair value of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference
is recognised as a gain directly in profit or loss by the acquirer on the acquisition date, but only after a reassessment
of the identification and measurement of the net assets acquired, the non-controlling interest in the acquiree, if any,
the consideration transferred and the acquirer's previously held equity interest in the acquirer.
If the initial accounting for a business contribution is incomplete by the end of the reporting period in which the
combination occurs, the Group reports provisional amounts for items for which the accounting is incomplete.
Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached
conditions will be complied with. When the grant relates to an expense item, it is recognised as a reduction of the expense
to which it relates.
Dividends
Dividends are recognised when declared during the financial year.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part
of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to,
the tax authority.
NOTE 41. EVENTS AFTER THE REPORTING PERIOD
On 11 July 2024, the Group entered into an agreement to sell the Trybe business. The sale has completed in August
2024. The relevant financial effect is immaterial and will be accounted for in the financial year ending 29 June 2025.
See Note 25 for dividend declared.
Apart from the matters described above, no other matters or circumstances have arisen since 30 June 2024 that have
significantly affected, or may significantly affect the Group's operations, the results of those operations, or the Group's
state of affairs in future financial years.
77
Annual Report 2024
for the year ended 30 June 2024
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
New legislation requires Australian public companies to disclose details for each subsidiary in the consolidated financial
statements – including the tax residency of each of those entities during the financial year.
The consolidated financial statements incorporate the assets, liabilities, and results of the following subsidiaries in
accordance with the accounting policy described in Note 2:
30 Jun 2024
Name
Body corporate,
partnership or trust
Principal place
of business/
Country of
Incorporation
% of share
capital held
Australian
or Foreign
Resident
Countries of
residence for
tax purposes
Accent Group Limited
Body corporate
Australia
N/A
Australia
Australia
The Athlete's Foot Australia Pty Ltd(a)
Body corporate
Australia
100%
Australia
Australia
TAF Constructions Pty Ltd(a)
Body corporate
Australia
100%
Australia
Australia
RCG Brands Pty Ltd(a)
Body corporate
Australia
100%
Australia
Australia
RCG Retail Pty Ltd(a)
Body corporate
Australia
100%
Australia
Australia
TAF eStore Pty Ltd(a)
Body corporate
Australia
100%
Australia
Australia
TAF Partnership Stores Pty Ltd(a)
Body corporate
Australia
100%
Australia
Australia
TAF Rockhampton Pty Ltd(a)
Body corporate
Australia
100%
Australia
Australia
TAF Eastland Pty Ltd(a)
Body corporate
Australia
100%
Australia
Australia
TAF The Glen Pty Ltd(a)
Body corporate
Australia
100%
Australia
Australia
TAF Hornsby Pty Ltd(a)
Body corporate
Australia
100%
Australia
Australia
TAF Hobart Pty Ltd(a)
Body corporate
Australia
100%
Australia
Australia
TAF Booragoon Pty Ltd(a)
Body corporate
Australia
100%
Australia
Australia
Accent Group Ltd(b)
Body corporate
New Zealand
100%
Foreign
New Zealand
Platypus Shoes Ltd(b)
Body corporate
New Zealand
100%
Foreign
New Zealand
Accent Footwear Ltd(b)
Body corporate
New Zealand
100%
Foreign
New Zealand
Hype DC Ltd(b)
Body corporate
New Zealand
100%
Foreign
New Zealand
TAF New Zealand Ltd(b)
Body corporate
New Zealand
100%
Foreign
New Zealand
Accent Brands Pty Ltd(a)
Body corporate
Australia
100%
Australia
Australia
Platypus Shoes (Australia) Pty Ltd(a)
Body corporate
Australia
100%
Australia
Australia
42K Pty Ltd(a)
Body corporate
Australia
100%
Australia
Australia
Accent Store Development Pty Ltd(a)
Body corporate
Australia
100%
Australia
Australia
RCG Accent Group Holdings Pty Ltd(a)
Body corporate
Australia
100%
Australia
Australia
Hype DC Pty Ltd(a)
Body corporate
Australia
100%
Australia
Australia
Subtype Pty Ltd(a)
Body corporate
Australia
100%
Australia
Australia
Pivot Store Pty Ltd(a)
Body corporate
Australia
100%
Australia
Australia
Accent Lifestyle Pty Ltd(a)
Body corporate
Australia
100%
Australia
Australia
Accent Active Pty Ltd(a)
Body corporate
Australia
100%
Australia
Australia
Subtype Limited(b)
Body corporate
New Zealand
100%
Foreign
New Zealand
Accent Active (NZ) Limited(b)
Body corporate
New Zealand
100%
Foreign
New Zealand
Accent Lifestyle (NZ) Limited(b)
Body corporate
New Zealand
100%
Foreign
New Zealand
(a) These subsidiaries are part of a tax consolidated group with Accent Group Limited (Australia) as the head entity and taxpayer in the respect of the
group.
(b) These subsidiaries are part of a tax consolidated group with Accent Group Limited (New Zealand) as the head entity and taxpayer in the respect of
the group.
Basis of preparation
This consolidated entity disclosure statement (CEDS) has been prepared in accordance with the Corporations Act 2001
and includes information for each entity that was part of the consolidated entity as at the end of the financial year in
accordance with AASB 10 Consolidated Financial Statements.
78
Accent Group Limited
for the year ended 30 June 2024
DIRECTORS' DECLARATION
DIRECTORS' DECLARATION
In the directors' opinion:
–
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
–
●the attached financial statements and notes comply with International Financial Reporting Standards as issued by
the International Accounting Standards Board as disclosed in Note 2 of the financial statements;
–
●the attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June
2024 and of its performance for the financial year ended on that date;
–
●the attached consolidated entity disclosure statement is true and correct as at 30 June 2024;
–
●there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable; and
–
at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed
group identified in Note 36 to the financial statements will be able to meet any obligations or liabilities to which
they are, or may become, subject by virtue of the deed of cross guarantee described in Note 36 to the financial
statements.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
David Gordon
Chairman
23 August 2024
Melbourne
79
Annual Report 2024
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS
OF ACCENT GROUP LIMITED
PricewaterhouseCoopers, ABN 52 780 433 757
2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001
T: 61 3 8603 1000, F: 61 3 8603 1999
Liability limited by a scheme approved under Professional Standards Legislation.
Independent auditor’s report
To the members of Accent Group Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Accent Group Limited (the Company) and its controlled entities
(together the Group) is in accordance with the Corporations Act 2001, including:
(a)
giving a true and fair view of the Group's financial position as at 30 June 2024 and of its
financial performance for the period 3 July 2023 to 30 June 2024
(b)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The financial report comprises:
the statement of financial position as at 30 June 2024
the statement of changes in equity for the period 3 July 2023 to 30 June 2024
the statement of cash flows for the period 3 July 2023 to 30 June 2024
the statement of profit or loss and other comprehensive income for the period 3 July 2023 to 30
June 2024
the notes to the consolidated financial statements, including material accounting policy
information and other explanatory information
the consolidated entity disclosure statement as at 30 June 2024
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
80
Accent Group Limited
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS
OF ACCENT GROUP LIMITED
Our audit approach
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an
opinion on the financial report as a whole, taking into account the geographic and management
structure of the Group, its accounting processes and controls and the industry in which it operates.
Audit scope
Key audit matters
Our audit focused on where the Group made
subjective judgements; for example, significant
accounting estimates involving assumptions and
inherently uncertain future events.
Amongst other relevant topics, we communicated
the following key audit matters to the Audit and
Risk Committee:
The carrying value of Retail goodwill
The carrying value of right of use assets and
property, plant and equipment
The valuation of inventory
These are further described in the Key audit
matters section of our report.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context.
Key audit matter
How our audit addressed the key audit matter
The carrying value of Retail goodwill
(Refer to note 16)
The Group has recognised goodwill of $323.6 million in
the Retail Cash Generating Unit (“CGU”).
The Group performed an impairment assessment for
goodwill by preparing a financial model to determine if
the carrying value of the assets is supported by
forecast future cash flows, discounted to present value
(the “model”).
We considered the carrying value of goodwill to be a
key audit matter due to the magnitude of the balances
Our procedures included the following, amongst others:
Obtaining the Group’s cash flow model and
evaluating the appropriateness of the
valuation methodology used to estimate the
recoverable amount of Retail goodwill against
our understanding of the nature of the Group’s
operations.
Evaluating the Group’s cash flow forecasts for
the Retail CGU included in the model and the
process by which they were developed, with
reference to the historical performance of the
business.
Assessing the historical accuracy of the
81
Annual Report 2024
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS
OF ACCENT GROUP LIMITED
Key audit matter
How our audit addressed the key audit matter
and assumptions applied by the Group in estimating
future cash flows.
Group’s prior period forecasts by comparing
them to actual performance over the same
period.
Assessing the key assumptions for
appropriateness with reference to external
market data where possible.
Together with PwC valuation experts,
comparing the discount rate and long-term
growth rate used in the model to external
market data.
Evaluating the reasonableness of disclosures
in the financial report in light of the
requirements of Australian Accounting
Standards.
The carrying value of right of use assets and
property, plant and equipment
(Refer to note 14 and 15)
The Group has recognised property, plant and
equipment and right-of-use assets of $121.4 million
and $265.4 million respectively as at 30 June 2024.
These balances relate predominantly to retail stores
(“store assets”). The Group has determined that each
store is a separate CGU. A store is assessed for
impairment if an indicator of impairment is identified.
We considered the impairment assessment for store
assets to be a key audit matter due to the magnitude of
the balances and assumptions applied by the Group in
estimating future cash flows used in the assessment.
Our procedures included the following, amongst others:
Obtaining the Group’s assessment of
indicators for impairment for store assets, and
evaluating its appropriateness.
For the stores where an impairment indicator was
identified:
Assessing the forecast cash flow
assumptions for the recoverable amount
assessment for appropriateness with
reference to historical growth rates and
external market data where possible.
Testing the mathematical accuracy of the
recoverable amount assessment and the
comparison to the carrying value for the
store.
Assessing the appropriateness of key
assumptions on store leases planned to
be exited before the end of lease terms.
Together with PwC valuation experts,
comparing the discount rate used in the
recoverable amount assessment to
external market data.
Evaluated the reasonableness of the
disclosures made in note 15 in the
financial report in light of the
requirements of Australian Accounting
Standards.
82
Accent Group Limited
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS
OF ACCENT GROUP LIMITED
Key audit matter
How our audit addressed the key audit matter
The valuation of inventory
(Refer to note 10)
The Group has recognised a net realisable value
provision against its inventory of $11.7 million as at 30
June 2024. The Group’s estimate of the inventory
provision is based on historical finished goods sold
below cost and inventory write-offs.
We considered the valuation of inventory to be a key
audit matter due to the magnitude of the inventory
balance and the judgement required by the Group in
determining the net realisable value of inventory.
Our procedures included the following, amongst others:
Obtaining the Group’s inventory provision
assessments and evaluating the
appropriateness of the methodology used.
Testing the mathematical accuracy of key
data included in the calculation of the Group’s
inventory provision and comparing key inputs
to supporting evidence.
Comparing the selling price (net realisable
value) subsequent to period end to the
recorded cost, for a sample of inventory items.
Evaluating the reasonableness of disclosures
in the financial report in light of the
requirements of Australian Accounting
Standards.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the period 3 July 2023 to 30 June 2024, but does not
include the financial report and our auditor’s report thereon. Prior to the date of this auditor's report,
the other information we obtained included the Chairman and Chief Executive Officer's report, the
director's report, and the Appendix 4E. We expect the remaining other information to be made
available to us after the date of this auditor's report.
Our opinion on the financial report does not cover the other information and we do not and will not
express an opinion or any form of assurance conclusion thereon through our opinion on the financial
report. We have issued a separate opinion on the remuneration report.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
When we read the other information not yet received, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to the directors and use our
professional judgement to determine the appropriate action to take.
83
Annual Report 2024
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS
OF ACCENT GROUP LIMITED
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report in accordance
with Australian Accounting Standards and the Corporations Act 2001 including giving a true and fair
view and for such internal control as the directors determine is necessary to enable the preparation of
the financial report that is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in the directors’ report for the period 3 July 2023 to
30 June 2024.
In our opinion, the remuneration report of Accent Group Limited for the period 3 July 2023 to 30 June
2024 complies with section 300A of the Corporations Act 2001.
84
Accent Group Limited
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS
OF ACCENT GROUP LIMITED
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the remuneration report, based on our audit conducted in accordance with
Australian Auditing Standards.
PricewaterhouseCoopers
Alison Tait Milner
Melbourne
Partner
23 August 2024
85
Annual Report 2024
SHAREHOLDER INFORMATION
SHAREHOLDER INFORMATION
The shareholder information set out below was applicable as at 13 August 2024.
DISTRIBUTION OF EQUITABLE SECURITIES
Analysis of number of equitable security holders by size of holding:
Number
of holders
of ordinary
shares
1 to 1,000
4,715
1,001 to 5,000
5,519
5,001 to 10,000
2,317
10,001 to 100,000
3,424
100,001 and over
279
16,254
Holding less than a marketable parcel
598
EQUITY SECURITY HOLDERS
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
Number held
% of total
shares
issued
BBRC INTERNATIONAL PTE LTD
82,477,463
14.65
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
67,626,535
12.01
CITICORP NOMINEES PTY LIMITED
45,838,218
8.14
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
40,608,690
7.21
CRAIG JOHN THOMPSON
30,936,589
5.49
NETWEALTH INVESTMENTS LIMITED
21,447,926
3.81
JAMES WILLIAM DUELL
12,000,000
2.13
MRS CINDY GILBERT
11,000,000
1.95
MR DANIEL JOHN GILBERT
11,000,000
1.95
BNP PARIBAS NOMS PTY LTD
10,936,167
1.94
HIT GROUP LIMITED
7,500,000
1.33
NATIONAL NOMINEES LIMITED
6,395,251
1.14
BNP PARIBAS NOMINEES PTY LTD
3,344,181
0.60
RIVAN PTY LTD
2,599,034
0.46
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
2,511,607
0.45
PITTMANN PTY LIMITED
2,391,130
0.43
MUSICIAN PTY LIMITED
2,250,000
0.40
BNP PARIBAS NOMINEES PTY LTD
2,167,767
0.39
UBS NOMINEES PTY LTD
1,933,914
0.34
SALE STREET PTY LTD
1,597,715
0.28
366,562,187
65.10
86
Accent Group Limited
SHAREHOLDER INFORMATION
SUBSTANTIAL HOLDERS
Substantial holders in the Company are set out below:
Ordinary shares
Number held
% of total
shares
issued
BBRC International Pte Ltd
82,477,463
14.65
Craig John Thompson
30,936,589
5.49
VOTING RIGHTS
The voting rights attached to ordinary shares are set out below:
Ordinary shares
All ordinary shares carry one vote per share without restriction.
There are no other classes of equity securities.
87
Annual Report 2024
CORPORATE DIRECTORY
CORPORATE DIRECTORY
DIRECTORS
David Gordon – Chairman
Daniel Agostinelli - Chief Executive Officer
Stephen Goddard (resigned 17 November 2023)
Michael Hapgood
Laurence Myers (appointed 17 November 2023)
Donna Player
Anne Loveridge AM (appointed 17 November 2023)
Joshua Lowcock (resigned 17 November 2023)
Brett Blundy
Timothy Dodd – alternate Director for Brett Blundy
JOINT COMPANY SECRETARIES
Matthew Durbin
Alethea Lee
REGISTERED OFFICE AND PRINCIPAL
PLACE OF BUSINESS
2/64 Balmain Street
Richmond VIC 3121
Telephone: +61 3 9427 9422
Facsimile: +61 3 9427 9622
Email: investors@accentgr.com.au
SHARE REGISTER
Computershare Investor Services Pty Limited
Level 4
60 Carrington Street
Sydney NSW 2000
Telephone: 1300 787 272
AUDITOR
PricewaterhouseCoopers
2 Riverside Quay, Southbank
Melbourne VIC 3006
BANKERS
National Australia Bank
Hongkong and Shanghai Banking Corporation
Australia and New Zealand Banking Group
STOCK EXCHANGE LISTING
Accent Group Limited shares are listed on the
Australian Securities Exchange (ASX code: AX1)
WEBSITE
www.accentgr.com.au
CORPORATE GOVERNANCE
STATEMENT
www.accentgr.com.au/investor/investor-documents
Accent Group Limited
(ABN: 85 108 096 251)
2/64 Balmain Street, Richmond VIC 3121
+61 3 9427 9422
www.accentgr.com.au