BOOHOO
GROUP
PLC
stock code: BOO
A N N U A L
R E P O R T
& ACCOUNTS
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BOOHOO GROUP PLC
12 CASTLE STREET
ST HELIER
JERSEY JE2 3RT UK
BOOHOO GROUP PLC
A LEADING E-COMMERCE
RETAIL GROUP
Our multi-brand platform
comprises boohoo, boohooMAN,
PrettyLittleThing, Nasty Gal,
MissPap, Karen Millen, Coast,
Oasis, Warehouse, Debenhams,
Dorothy Perkins, Wallis and
Burton, and targets fashion-
conscious 16 to 45 year-olds
in the UK and internationally.
VISIT US ONLINE AT
BOOHOOPLC.COM
AGENDA FOR
CHANGE
BUSINESS
MODEL
20
BOARD OF
DIRECTORS
16
CHAIRMAN’S
STATEMENT
50
18
STRATEGIC REPORT
Group financial and operational highlights
Our vision
Our values
About our group and our global brands
Our business model
Chairman's statement
Agenda for Change
COVID-19 response
Review of the business
Financial review
Risk management
Environmental, social and governance report
GOVERNANCE
Board of directors
Corporate governance report
Directors' report
Directors' remuneration report
Statement of directors' responsibilities in respect
of the annual report and financial statements
6
8
9
10
16
18
20
24
26
31
34
39
50
52
60
66
85
FINANCIAL STATEMENTS
Independent auditor's report to the members of boohoo group plc 86
90
Consolidated statement of comprehensive income
91
Consolidated statement of financial position
92
Consolidated statement of changes in equity
93
Consolidated cash flow statement
94
Notes to the financial statements
119
Five-year financial summary
C
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T
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01
ANNUAL REPORT AND ACCOUNTS 2021/ STRATEGIC REPORTBOOHOO GROUP PLC GROWTH FOR
A SUSTAINABLE
FUTURE
WE ARE ENCAPSULATING
THE FUTURE OF RETAIL
As an online fashion retailer,
we are well placed to capitalise
on the growth opportunities
that are arising from globally
changing shopping habits, with
an ever-increasing number of
consumers now shopping online.
We know what they want, and we
are committed to providing value
for them.
Underpinning our growth potential, we
delivered strong gains in all major KPIs –
including new customer growth, which
remains high – and across all our brands.
We have continued our strong track record
of revenue growth, delivering 41% this year.
In addition, we have continued to grow
our market share across all geographies.
This has been supported by our world-class
marketing abilities, enabling us increased
presence as our customers’ use of social
media further expands.
WHILE
GROWING
OUR BRANDS
At the beginning of our
financial year, we had seven brands.
There now are thirteen brands in
boohoo group.
In May 2020, we acquired the
remaining 34% minority stake in
PrettyLittleThing.com Limited.
We acquired the online businesses and all
associated intellectual property of Oasis and
Warehouse in June 2020, and have successfully
integrated and relaunched these brands onto our
multi-brand platform.
In January 2021, we acquired Debenhams’
online business and associated intellectual
property (including the brands Maine, Mantaray,
Principles and Faith). We are rebuilding and
relaunching Debenhams as a digital department
store and marketplace; the acquisition also
allows us to grow into additional categories
including beauty, sport and homeware.
In February 2021, we acquired the Dorothy
Perkins, Wallis and Burton brands, which give us
the opportunity to grow our market share across
a broader demographic and strengthen our
menswear proposition.
These acquisitions represent an important
step towards achieving our strategic priority of
investment to deliver growth through organic
means and acquisitions.
FOR MORE INFORMATION ABOUT
OUR PERFORMANCE, GO TO PAGES
26 TO 33 OF THE STRATEGIC REPORT
FOR MORE INFORMATION ABOUT
OUR BRANDS, GO TO PAGES 10 TO 15
OF THE STRATEGIC REPORT
FOR MORE INFORMATION ABOUT
OUR STRATEGY, GO TO PAGES 16 TO 17 OF
THE STRATEGIC REPORT
02
03
ANNUAL REPORT AND ACCOUNTS 2021/ STRATEGIC REPORTBOOHOO GROUP PLC GROWTH FOR A SUSTAINABLE FUTURE
AND FOCUSING
ON HIGHER
STANDARDS
OF OVERSIGHT
Our Agenda for Change programme was
introduced following an independent review
of our supply chain in September 2020,
and demonstrates our commitment to
strengthening our corporate governance,
environmental footprint and social impact.
This programme focuses on a number of key
areas across the group including: corporate
governance; redefining our purchasing
practices; raising standards across our supply
chain; supporting Leicester’s workers and
workers’ rights; providing better support for
suppliers; and demonstrating best practice
in action.
Sir Brian Leveson PC is providing
independent oversight of the programme,
supported by a team from KPMG, and we are
committed to publishing his progress reports.
As part of the changes we are implementing,
we have strengthened our governance and
teams with key appointments, significantly
increased oversight of our supply chain,
and demonstrated best practice in action
by focusing on setting a new industry-wide
standard for ethical supply chains.
FOR MORE INFORMATION ABOUT
OUR SUSTAINABILITY, GO TO PAGES
39 TO 49
FOR MORE INFORMATION ABOUT
OUR AGENDA FOR CHANGE PROGRAMME,
GO TO PAGES 20 TO 23
AS WE LOOK TO
THE FUTURE, WE
ARE COMMITTED TO
CHANGE THAT BRINGS
SUSTAINABLE GROWTH
AND THAT BENEFITS ALL
OUR STAKEHOLDERS
04
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ANNUAL REPORT AND ACCOUNTS 2021/ STRATEGIC REPORTBOOHOO GROUP PLC GROUP FINANCIAL AND OPERATIONAL HIGHLIGHTS
OUR PERFORMANCE
I
/
S
T
R
A
T
E
G
C
R
E
P
O
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Profit before tax
£125m
m
1
3
£
m
0
6
£
m
3
4
£
m
5
2
1
£
m
2
9
£
2017
2018
2019
2020
2021
Adjusted EBITDA
£174m
m
6
3
£
m
5
8
£
m
7
5
£
m
4
7
1
£
m
7
2
1
£
2017
2018
2019
2020
2021
Revenue
£1,745m
m
5
9
2
£
m
7
5
8
£
m
0
8
5
£
m
5
4
7
,
1
£
m
5
3
2
,
1
£
2017
2018
2019
2020
2021
Financial
• Revenue £1,745 million, up 41% (41% CER1)
• Strong revenue growth across all
geographies, with UK up 39% and
international up 44%. International revenue
is now 46% of total, up from 45%
• Gross margin 54.2%, up 20bps
• Adjusted EBITDA £173.6 million up
37%, with Adjusted EBITDA margin of
10.0% (2020: 10.2%), notwithstanding
COVID-19 cost headwinds and significant
investment in acquisitions
• Robust balance sheet with net cash of
£276.0 million (2020: £240.6 million).
High cash generation with operating cash
flow of £201.1 million (2020: £127.3
million). £195.7 million capital raised
1. CER designates Constant Exchange Rate translation of
foreign currency revenue, which gives a truer indication
of the performance in international markets by
removing year-to-year exchange rate movements when
local currency sales are converted to sterling.
YEAR TO FEBRUARY
Revenue
Gross profit
Gross margin
Adjusted EBITDA2
% of revenue
Adjusted EBIT3
% of revenue
Adjusted profit before tax4
Profit before tax
Adjusted diluted earnings per share5
Diluted earnings per share
Net cash6 at year end
Operational
• Significant group-wide progress made
on Agenda for Change programme,
which has independent oversight from
Sir Brian Leveson PC
• Strengthening corporate governance
through a new non-executive director
appointment, establishment of a Risk
Committee and committed in excess
of £10 million in supply chain monitoring
and compliance
• Successful integration and relaunch
of Oasis and Warehouse brands on our
multi-brand platform
• Acquisition of Debenhams online business
and investing to transform the business
into a digital department store with
significant potential
• Acquisition of Dorothy Perkins, Wallis
and Burton brands, adding to the group’s
diversity and reach
• Third distribution centre on track for
operational use in spring 2021 and
long-term lease agreed for fourth
distribution centre, expected to go
live in the second quarter of the new
financial year
• 18 million active customers, up 28%
• Over 1,000 jobs secured through
recent acquisitions
2021
£ million
1,745.3
945.2
54.2%
173.6
10.0%
149.3
8.6%
149.9
124.7
8.67p
7.25p
276.0
2020
£ million
1,234.9
666.3
54.0%
126.6
10.2%
107.0
8.7%
108.3
Change
+41%
+42%
+20bps
+37%
-20bps
+40%
-10bps
+38%
+35%
92.2
+47%
5.88p
5.35p
+36%
240.6 +£35.4 million
2. Adjusted EBITDA is calculated as profit before tax, interest, depreciation, amortisation, and share-based payment charges.
3. Adjusted EBIT is calculated as profit before tax, interest, share-based payment charges,and amortisation of acquired
intangible assets.
4. Adjusted profit before tax is calculated as profit before tax, excluding share-based payment charges, and amortisation of
acquired intangible assets.
5. Adjusted diluted earnings per share is calculated as diluted earnings per share, adding back amortisation of acquired
intangible assets, share-based payment charges, and adjusting to 34% of the non-controlling interest as in previous years.
6. Net cash is cash less bank borrowings.
06
07
ANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC
AT A GLANCE
A GROWING BUSINESS
OUR VALUES
OUR VISION
The group’s multi-brand platform enables us to
service groups of consumers efficiently with ranges
of products differentiated in style and price point.
The appeal of online shopping, with its convenience
and value proposition, continues to resound with
consumers globally and supports high-growth rates.
Our vision is to be leading the e-commerce fashion market for 16 to 45
year-olds, which we will drive through our strategic priorities:
INSIGHT
creating a competitive
customer proposition
INVESTMENT
delivering growth through
organic means and acquisitions
to increase market share
INNOVATION
driving customer
engagement
INTEGRATION
integrating new brands
REVENUE BY
GEOGRAPHY
USA
£435M
HIGHLIGHTS
HIGH GROWTH
Revenue
+41%
GLOBAL CUSTOMER BASE
Active customers1
18M
1.
Active customers defined as having
shopped on the website in the last year.
PROFITABLE
Profit before tax
+35%
UK
£945M
REST OF
EUROPE
£245M
08
REST OF THE
WORLD
£120M
OUR VALUES
PASSION
Each day we are inspired to be the
best we can be. We are focused and
committed to giving our customers the
experience they want.
AGILE
We are constantly evolving to stay one
step ahead. We embrace change and
grab new opportunities with both hands.
We are lean, effective and efficient.
CREATIVE
We are unique and aspirational. We
are not afraid of doing things our way;
daring to be different. We are creative in
thinking and design.
TEAM
We listen and respond to create a
place where everyone’s contribution
is important. Building success through
our people and sharing in it together.
We remember to have fun along the way.
OUR BUSINESS PRINCIPLES
CHALLENGING THE
FASHION MARKET
We understand what customers want.
We operate in an efficient and profitable
way, delivering value to our stakeholders.
We invest to create a sustainable business.
RESPONSIBLE
INSPIRED
We operate with responsibility
towards all our stakeholders
– our customers, employees and partners
– and in a sustainable way to reduce
environmental impact.
With a finger on the pulse of fashion,
we spot the latest trends from all over
the world.
GLOBAL
CONNECTED
FAST
We operate in a global market,
unhindered by borders, languages
and physical presence.
Through a large social media following,
we connect with millions globally.
Hundreds of new products added daily
and top sellers are re-bought within days,
with the group built on its successful
“test and repeat” model.
09
010204030506ANNUAL REPORT AND ACCOUNTS 2021/ STRATEGIC REPORTBOOHOO GROUP PLC GROUP STRUCTURE AND BRANDS
ABOUT OUR
GROUP AND
OUR GLOBAL
BRANDS
EACH BRAND IS
DIFFERENTIATED IN ITS
MESSAGE, APPEAL AND
TARGET AGE GROUP
boohoo group plc owns the brands boohoo,
boohooMAN, PrettyLittleThing, Nasty
Gal, MissPap, Karen Millen, Coast,
Oasis, Warehouse, Debenhams, Dorothy
Perkins, Wallis and Burton. It designs,
sources, markets and sells clothing, shoes,
accessories and beauty products targeted
at 16 to 45 year-old consumers globally.
BOOHOO
boohoo is the young girl’s fashion best friend,
offering the most up-to-date fashion at incredible
prices with unbeatable choice, great quality and
excellent service. The brand’s core values are
fun, fashion, social and inclusive. This translates
into a product range for every young woman
around the world.
BOOHOOMAN
Combining cutting-edge design with an affordable
price tag, boohooMAN brings young men the latest
styles and looks in a youthful package, 24/7.
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ANNUAL REPORT AND ACCOUNTS 2021/ STRATEGIC REPORTBOOHOO GROUP PLC GROUP STRUCTURE AND BRANDS
CONTINUED
PRETTYLITTLETHING
PrettyLittleThing is a youthful trend leader in online
women’s fashion, offering a wide range of products
at great prices, supported by an engaging global
social media presence. The brand aims to help every
girl feel like a celebrity with her clothes.
NASTY GAL
Rooted in LA, Nasty Gal is a bold and distinctive
brand for fashion-forward, free-thinking young
women, offering limited edition clothing and vintage
pieces to a global audience. The brand’s largest
market so far has been in the USA, giving them a
global reach with enormous potential for growth.
MISSPAP
MissPap is aimed at fashion-
conscious young women who
love fashion and want to create
looks that are worth sharing with
friends.
KAREN MILLEN
Karen Millen is known globally
for creating beautifully crafted
fashion for confident women who
know their own style. Targeted
at driven and career-minded
women in their 30s and 40s, the
brand offers high-quality clothes
for that modern, polished and
feminine look.
COAST
Coast believes that life is for
living, fashion should be fun and
dressing up is for every day. The
brand produces versatile pieces
that are easy to wear and are an
effortless addition to a woman’s
own style.
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ANNUAL REPORT AND ACCOUNTS 2021/ STRATEGIC REPORTBOOHOO GROUP PLC GROUP STRUCTURE AND BRANDS
OASIS
Oasis creates hard-working, easy
pieces that are made for modern
life and non-stop schedules. The
brand’s collection of crafted
silhouettes, beautiful shapes and
pretty detailing breathes life into
faithful staples.
WAREHOUSE
Warehouse is a British-born
fashion brand with a city state
of mind. With trending pieces
designed for every moment, an
urban edge and essence of tough
femininity, the brand captures
the spirit of club culture in styles
that look good now and even
better later.
DOROTHY PERKINS
Dorothy Perkins is a feminine,
versatile and affordable brand
with rich British heritage.
The brand has been inspiring
and dressing women for over
100 years, striving to provide
flattering fits across all pieces
with the mantra: if you feel good,
you should wear it.
WALLIS
“We understand real women
and design clothes to help
them look and feel great.”
Wallis is a British brand offering
exclusive, modern styles aimed at
women in their 30s and 40s.
BURTON
Burton is a British brand
offering menswear clothing
and accessories that combine
heritage tailoring with modern
style. Burton’s exclusive collection
includes everything from suits to
casuals.
DEBENHAMS
A digital department store
offering everything from
fashion, beauty, sport, and
homeware, Debenhams provides
its customers with a unique,
differentiated and exclusive mix
of brands.
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CONTINUEDANNUAL REPORT AND ACCOUNTS 2021/ STRATEGIC REPORTBOOHOO GROUP PLC OUR BUSINESS MODEL
We have created a formidable suite of relationships and resources, and have combined this
with our insight and understanding of changing consumer demands to build a business
platform that delivers value to all our stakeholders.
RELATIONSHIPS AND RESOURCES
HOW WE OPERATE
VALUE GENERATED FOR STAKEHOLDERS
RELATIONSHIPS
Employees
Our employees are our greatest asset, delivering a truly
awesome package of skill and knowledge that enables us to
tackle the most challenging feats
Suppliers
We have developed a comprehensive network of suppliers
from all corners of the world and we continue to work with
them to bring us the product and services that drive our
success
Customers and partners
Our customers and partners are our life-blood. We engage,
listen, learn, create and repeat successfully. Our partners
help us reach customers globally
RESOURCES
Brands
A portfolio of diverse brands, with a rich heritage and
consumer loyalty, renewed and developed for today, enables
us to grow market share
Infrastructure
We have invested millions in state-of-the-art, automated
distribution centres and great office facilities for our
talented teams
Technology
Our formidable technology platform comprises best-of-
kind systems and enables us to operate a huge volume
business with efficiency and accuracy
Financial
Financial resources from our shareholders have been
boosted by retained profits that have enabled us to build
a debt-free business with the capacity for investment and
acquisitions
We design, source, market and sell fashion clothing, shoes,
accessories and beauty products to 16 to 45 year-old
consumers globally.
We implement a “test and repeat” model that brings the
latest trends and fashion inspiration in a matter of days to
our consumers across the world.
Design
and inspiration
Our skilled designers and buyers
have their fingers on the pulse of
fashion around the world to spot the
latest trends
Sourcing
and production
Buyers tap into a global network
of approved suppliers to find the
best mix of quality and price to
deliver outstanding value to our
customers
Engagement and repeat
Sophisticated monitoring of
marketing and product success
enables us to respond rapidly to
consumer demand and optimise
customer reach
Marketing
and customer
engagement
We connect with our consumers
through social media and innovative
advertising, supported by influencers
and celebrities, and through our
engaging websites and apps,
offering the customer the very
best online shopping
experience
Delivery and
customer care
Great customer service is provided
by a comprehensive choice of
delivery options, payment methods
and a highly rated customer service
centre takes care of the entire
customer journey
EMPLOYEES
We provide our employees with the opportunity to develop
their skills and experience in a dynamic business and give
them a share in its success through share ownership plans
and bonuses
SUPPLIERS
We operate with our suppliers in a transparent way and
enable suppliers to participate in our success as we grow,
and we work to improve factory standards where required
CUSTOMERS
We provide our customers with great product and value at
prices below those of the high street and with a service that
is convenient and safe at home
COMMUNITY
We engage with the wider community through our
charitable work, the Leicester Garment and Textile Workers'
Trust, and through the provision of jobs in our offices and
distribution centres that benefit the local area
INVESTORS
Investors have seen substantial capital growth as the share
price has risen, along with the growth and profitability of the
group
PLANET
We are determined to play our part in reducing the
environmental impact of clothing and our operations
through our greatly increased focus on sustainability
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0504030201ANNUAL REPORT AND ACCOUNTS 2021/ STRATEGIC REPORTBOOHOO GROUP PLC
CHAIRMAN’S STATEMENT
Mahmud
Kamani
EXECUTIVE CHAIRMAN
4 MAY 2021
AGENDA FOR CHANGE
Undoubtedly, the most significant issue that we, as a
group, have been addressing since last July has been
that of unacceptable practices within the group’s
Leicester supply chain.
We are implementing many important changes to the way we work
with suppliers to eliminate these practices, while ensuring Leicester
becomes a centre of excellence for British garment manufacturing and
supporting British jobs.
I want to reassure our stakeholders that this matter is of the highest
priority and has the full attention of your board and me, as Executive
Chairman. The progress we are making is detailed in the Agenda for
Change section later in this report, and is also summarised in the
review of the business. The board is acting with determination to
implement every change recommended by Alison Levitt QC in her
review. To guarantee transparency and independence in the oversight
of the programme, progress is being monitored by Sir Brian Leveson PC,
KPMG and other highly respected third parties.
COVID-19
Like every other organisation, we faced COVID-19 and the many
challenges it presented – none more so than how to keep our colleagues
safe, while continuing to maintain our business for the benefit of all our
stakeholders. None of the decisions we have made have been taken
lightly, especially during the worst periods of the pandemic. I believe
that we have been able to control the risk and the preservation of our
business through careful implementation of safety processes in all our
facilities. In addition, we have sought to be fair in all our dealings with
stakeholders: we have kept to our promise of paying UK suppliers on
14-day terms; we have paid self-isolating colleagues their full pay; and
we have not drawn on any government support. The board is immensely
grateful to our colleagues for their adaptability into new working
practices and hard work during these difficult times.
HIGH GROWTH
£1.745BN
Revenue up 41%
GLOBAL CUSTOMER BASE
18M
Active customers
PROFITABLE
+35%
Profit before tax
BUILDING FOR THE FUTURE
18
“
These acquisitions are very
exciting for us: Debenhams
gives us the opportunity to
open up a digital department
store and marketplace, while
the other iconic brands give us
the opportunity to extend our
target demographic and reach.”
We are also passionate about making boohoo
a sustainable business for the longer term.
Our new Group Director of Sourcing and
Sustainability, Andrew Reaney, is leading a
programme of change and has developed a
roadmap to ensure we put that into effect.
You can read about this in Andrew’s section
on sustainability in this report.
Finally, on behalf of the board and myself, I
would like to thank our colleagues, suppliers
and partners for their invaluable contributions
and support in this unprecedented year and I
wish them all the best for the next, as we look
forward to a return to normality.
Mahmud Kamani
EXECUTIVE CHAIRMAN
GROUP ACTIVITIES AND
PERFORMANCE
From a trading perspective, the fact that we
are exclusively an online business has enabled
us to continue to operate and, with our
compelling customer proposition, we have
been able to grow revenue by 41% to £1.745
billion. We have maintained our 10% EBITDA
profit margin; an achievement that we are
proud of.
We are fortunate to have been in a strong
cash position and, as a result, we have been
able to undertake a number of strategic
acquisitions. We purchased the minority
interest in PrettyLittleThing, well in advance
of the date of the option agreement, and
we acquired the online businesses of Oasis,
Warehouse and, towards the end of the
financial year, Debenhams, Dorothy Perkins,
Wallis and Burton. These acquisitions are
very exciting for us: Debenhams gives us the
opportunity to open up a digital department
store and marketplace, while the other iconic
brands give us the opportunity to extend
our target demographic and reach. We
have become experts at revitalising brands
and making them appeal strongly to the
consumer, as our track record shows.
Our other investment activities planned over
the next financial year are centred upon
automation at the Sheffield warehouse that
serves PrettyLittleThing, the opening of third
and fourth warehouses in Wellingborough and
Daventry for our growing brands, the set up
of our Leicester factory and showcase facility,
and in enhancements to our IT infrastructure.
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ANNUAL REPORT AND ACCOUNTS 2021/ STRATEGIC REPORTBOOHOO GROUP PLC AGENDA FOR CHANGE
John
Lyttle
CEO
4 MAY 2021
“
From the meetings in which I have
been involved, I have no doubt about
the determination of all at boohoo
to address the issues in respect of
which it has been criticised and both
to promote and embed a new way of
working. boohoo has enthusiastically
embarked upon and pursued a review
of its supply chain and has initiated
improvements by way of learning and
development in relation to responsible
purchasing practices. It has visualised
the high standards to which it aspires
in every aspect of its business and is
taking steps to bring them into being
not least through its newly established
charitable trust and the development
of Thurmaston Lane in Leicester as a
factory and training academy.”
Sir Brian Leveson PC,
FORMERLY A COURT OF APPEAL JUDGE.
In July 2020, allegations emerged of poor
and potentially illegal practices by garment
manufacturers in Leicester, some of which
supplied clothing to the boohoo group.
I am proud to lead a business that, instead of choosing to walk away
from the allegations, took the immediate decision to do everything
within its power to address them and play its part in rebuilding a
thriving garment sector in the heart of the UK – a sector that
provides good employment and makes a significant contribution to
the local and UK economies.
We took the allegations of malpractice and poor working conditions
extremely seriously and immediately launched an in-depth
investigation. We appointed senior barrister, Alison Levitt QC, to
conduct a thorough review of the supply chain in Leicester with
a particular focus on the treatment of workers. As part of our
commitment to deal with these issues in an open and transparent
manner, the group published Ms Levitt’s report in full.
On receipt of the report, we launched our Agenda for Change,
a programme to ensure that we resolve the issues identified in
Leicester and accepted all 17 recommendations from the Levitt
report. In the eight months that have passed since publication,
my team has showed outstanding leadership and driven significant
change, and are on track to deliver against all of Ms. Levitt’s
recommendations; these are outlined in this section. The changes
we have made are creating a much stronger, more transparent and
more sustainable business that will benefit everyone involved in the
garment industry and the UK economy.
INCREASED
TRANSPARENCY
In September, the group committed to
operating in a more open and transparent
way. Following the publication of the full
Alison Levitt QC report in full, the group has:
• volunteered and subsequently appeared
in front of the UK’s Environmental Audit
Select Committee in December 2020
• published and will continue to publish
every report that Sir Brian Leveson PC
produces for the group’s board
• proactively and regularly updated a
broad range of stakeholders including
No. 10, the Secretary of State for
Business, the Chancellor of the Exchequer,
the Secretary of State for International
Trade, the Shadow Cabinet, local MPs,
local government, NGOs and many
other interested parties
• published its UK supply chain and a new
sustainability strategy in March 2021,
and has committed to publishing the
full international manufacturers list in
September 2021
GOVERNANCE
AND CORPORATE
RESPONSIBILITY
Strengthening our internal governance
structures was one of Ms Levitt’s key
recommendations and we have made a
number of new appointments to ensure
that our business continues to go from
strength to strength. External appointments
include Shaun McCabe, an independent
non-executive director, who is leading the
group’s Risk Committee, and former High
Court Judge, Sir Brian Leveson PC, who
has been appointed to provide independent
oversight and governance of the Agenda
for Change programme.
Internally, responsibility for oversight of
the group’s supply chain and sustainability
programmes sits within the group’s ethical
trade and sustainability teams. Since July
2020, we have made a number of strategic
appointments in this team including:
• Director of Responsible Sourcing & Group
Product Operations
• Head of Sustainability
• Head of Ethical Product Compliance
• Head of Ethical Compliance
• Head of Product Operations
• Senior UK Ethical Compliance Manager
20
21
ANNUAL REPORT AND ACCOUNTS 2021/ STRATEGIC REPORTBOOHOO GROUP PLC AGENDA FOR CHANGE
CONTINUED
RAISING STANDARDS
ACROSS OUR SUPPLY CHAIN
MAPPING AND AUDITING
The group continues to map and audit the
UK supply chain, a piece of work that was
already underway in February 2020 and was
accelerated in July 2020.
To increase the capacity and speed at which
audits were completed, the group’s external
supply-chain auditors, Verisio, increased their
auditing teams and presence ‘on the ground’.
A new Head of Ethical Compliance, Head
of Product Compliance and a Senior UK
Ethical Sourcing Manager were appointed
to strengthen the UK in-house team, and
Sir Brian Leveson PC has appointed a team
of investigators led by Tim Godwin OBE, ex
Deputy Commissioner of the Metropolitan
Police, to assist him.
By March 2021, this team collectively had
audited the majority of suppliers in the UK at
least twice. These audits were unannounced
and included visits conducted in the evening
and weekends to investigate allegations of
illegal working hours.
A4C ROADMAP
July 2020
• Appointed Alison Levitt QC to undertake
independent review of boohoo group
• Meeting with Deputy Mayor and senior team
from Leicester City Council
As well as accompanying the boohoo
compliance team and Verisio on audits, Tim
Godwin’s team also undertook ‘deep dives’
and analyses into the corporate structures
to identify directors and people exercising
significant control, who were then interviewed.
The government also deployed teams of
investigators from the GLAA, NCA, DWP
and HMRC. The group has been working
closely with the Director of Operations for
the GLAA who, on 21 April 2021, confirmed
that they had uncovered no evidence to
support claims of modern-day slavery in the
boohoo supply chain.
Every supplier was provided with the
opportunity to remedy issues identified during
their audit process and to implement additional
measures required by the business to provide
more protection to workers, including adoption
of biometric clocking-in systems.
The group has been encouraged by the
actions of many suppliers who have
demonstrated that they fully support the
approach taken by the group and the values
they share to improve the UK garment sector.
CONSOLIDATION
One of Alison Levitt’s key recommendations
was to consolidate the group’s UK supply chain.
The insight from the auditing and mapping
process has led to the group’s ceasing to
trade with some suppliers who were unable
or unwilling to demonstrate the required level
of transparency. Each supplier, with whom
we have ceased business relations, was given
numerous warnings and opportunities to
remedy issues, but some failed to do so. It is
key to the group’s policy that suppliers are
given an opportunity to remedy any issues an
audit may bring to light.
Unauthorised subcontracting was identified as
a key problem in the Levitt review. To resolve
this and prevent reoccurrence, the in-house
ethical compliance team worked side-by-side
with suppliers to support them in bringing their
nominated Cut Make and Trim (‘CMT’) units
in-house. This shift in approach ensures that
ownership, responsibility and accountability
sits with the direct supplier while – critically –
workers are fully protected by the group’s code
of conduct.
The group remains committed to sourcing in
Leicester and the UK, and growing volumes
with good and compliant suppliers. The FY21
volume of units sourced in Leicester remains
at levels of growth consistent with the
previous year.
THE GARMENT AND TEXTILE
WORKERS' TRUST
The Trust’s founding mission will be to create
positive and lasting change for the benefit
of the wider industry – providing guidance,
advocacy and remedy to anyone working in
the garment industry in Leicester, whether
they work for one of boohoo’s suppliers or not.
The purpose of the Garment and Textile
Workers’ Trust has been informed from
months of ongoing engagement with local
and government stakeholders. In addition
to seeking guidance from individual experts
and NGOs, the group hosted a consultation
workshop, where over 30 different
organisations and individuals were invited to
share their insights.
In its first year, we envisage that the Trust
will be grant giving, complementing rather
than competing with existing charities
and community and NGO initiatives in
Leicester. As it grows and develops, the
trustees will look to expand on the remit
and deliver a more comprehensive package
of services for garment workers in the city.
This could include community initiatives,
such as outreach workers and educational
opportunities, such as scholarships.
The five founding trustees reflect a broad
spectrum of stakeholders with group NGO,
enforcement, local government and local
community representation. The trustees are:
• Tim Nelson, International Development
Director for Hope for Justice
• David Lindley, QPM Deputy Lieutenant
• Councillor Luis Fonseca, Leicester
• Alison Tripney, Head of Community,
Leicester City Football Club
• Cheryl Chung, Head of Corporate Affairs,
boohoo group
A CENTRE OF
MANUFACTURING
EXCELLENCE
In June 2020, the group finalised
the purchase of a site to establish a
manufacturing facility in Leicester. The site
on Thurmaston Lane will be a world-class,
end-to-end garment production facility for
the group. The aims of the site include:
• establishing a state-of-the art production
facility in Leicester that will provide a
benchmark for the sector;
• ensuring there is a detailed understanding
of our ability to produce garments at our
price points ethically, safely and legally; and
• creating great jobs and adding value to the
community of Leicester
The group is working with all education
providers across Leicester to understand how
our local presence can support their students.
October 2020
November 2020
February 2021
May 2021
• New non-executive director, Sean McCabe, appointed
• Agenda for Change programme launched, committing the boohoo
group to implement all 17 recommendations in the Levitt review
• Bureau Veritas begin mapping and auditing international suppliers
• Development of new ‘Responsible Purchasing Practices’ begins
• Work a new portal to manage all interactions with suppliers
• Agenda for Change and supply chain updates mandated at board
meetings
• Sir Brian Leveson PC appointed to oversee Agenda for Change
• New Sustainability Manager starts
• New Risk Committee established
• Announce exclusion of 64 suppliers from approved supply chain
• Provided evidence to the Business, Energy & Industrial Strategy
Select Committee on Xing jian
• New boohoo group Modern Slavery Statement published
• New requirement for suppliers to bring CMT units in-house
• Consultation to inform establishment of Garment and Textile Workers' Trust
• Became a member of the Unseen National Modern Slavery helpline and portal
• New whistleblowing escalation process
• Launch our first economic impact report
• Launch our Responsible Purchasing
Practices
• Publish a new sustainability report,
charting progress
September 2021
• Publish our international supply chain
• Open new manufacturing centre of
excellence in Leicester
March 2021
• New Senior UK Ethical and
Compliance Manager starts
• New Head of Ethical Product
Compliance starts
• Publish our UK supply chain
• Launch new group sustainability strategy
• Sir Brian Leveson’s second board
report published
• Andrew Reaney delivers keynote
address at Draper’s 2021 sustainability
conference
• Sign contracts with Cotton Connect
and Better Cotton Initiative to expand
sustainable cotton sourcing
• Around 500 audits completed
since July 2020
January 2021
• Sir Brian’s first report to boohoo group board
•
published in full
Internal communications update business progress
on Agenda for Change programme
• Engagement with local community partners in
Leicester, hosted by Leicester City Football Club
charitable foundation
• New Head of Product Operations starts
• Listening sessions with our buying and
merchandising teams to inform Responsible
Purchasing Practices
“
For those of us in Leicester
who take pride in the
clothing manufacturing
industry, the last year has
been really tough. We are
grateful for boohoo sticking
by UK manufacturers
and taking a stance with
an Agenda for Change.
With our joint efforts, all the
good suppliers are confident
that this will start building
Leicester to be a great
manufacturing hub. We hope
that the work boohoo has
done gives other retailers the
confidence to begin buying
British once again.”
Sajid Esa
5TH AVENUE CLOTHING
Aug 2020
September 2020
December 2020
• New Head of Ethical Compliance and Head of
Sustainability start
• Supply chain auditors Verisio given additional
resources to accelerate audit programme
• Work with Slave-Free Alliance to strengthen our
whistleblowing policy
• New Director of Responsible Sourcing starts
• Alison Levitt QC review published in full
• Begin work with Apparel & General Merchandise
Public and Private Protocol
• New Supply Chain Committee established
• New supplier app launched, strengthening our purchasing procedures
• Sir Brian Leveson PC appoints new investigative and inquiry team, led
by Tim Goodwin OBE, to conduct further checks on suppliers
• Provided evidence to the Environmental Audit Committee
• Modern slavery training mandated for managers and above
22
23
ANNUAL REPORT AND ACCOUNTS 2021/ STRATEGIC REPORTBOOHOO GROUP PLC OUR COVID-19 RESPONSE
THE GROUP IS CONTINUING
TO MONITOR AND
IMPLEMENT GOVERNMENT
ADVICE ON SAFE WORKING
CONDITIONS IN ALL OF ITS
FACILITIES AND OFFICES
IN THE UK AND OVERSEAS,
SO THAT ALL COLLEAGUES
ARE KEPT SAFE AND
CAN CONTINUE TO WORK
EFFECTIVELY.
These measures have been subject to change
throughout the pandemic, meaning there
have been periods when all office staff worked
from home, periods with limited rotational
workplace visits, and periods when all but
essential workers worked at home.
In the distribution centres, we invested
significantly to implement measures to
ensure the safety and protection of all our
colleagues. These include, but are not limited
to, scheduling of colleagues’ workdays to
be on staggered starting and break times,
and monitored social distancing in all
areas where closer contact might occur
within the otherwise large spaces of the
warehouses. In all instances, appropriate
signage, screening, traffic management,
sanitising stations and additional regular deep
cleaning has been implemented. We installed
thermal imaging detectors in our distribution
centre and Manchester offices to ensure no
colleagues with symptoms could enter. In
addition, we have been broadcasting frequent
reminders and updates to colleagues on safety
procedures and practices, and have been
monitoring and tracking COVID-19 cases.
The business also pioneered a rapid lateral flow
testing programme run by the British Army
and Lancashire County Council. Following
two days of onsite testing of colleagues, the
Army returned in January 2021 to train our
teams to conduct the tests. In early February
2021, we rolled this programme out to all
office locations to keep our colleagues,
their families and the community as safe
as possible.
Our office and warehouse COVID-19 safety
processes have been verified and approved by
public health officials in England.
The group has not utilised any government
support, and maintains rigorous control
over its finances in order to react rapidly to
developments. Further, the group has drawn on
its own resources to support colleagues during
the pandemic, ensuring that all colleagues in
self-isolation receive their full pay.
24
25
ANNUAL REPORT AND ACCOUNTS 2021/ STRATEGIC REPORTBOOHOO GROUP PLC REVIEW OF THE BUSINESS
PERFORMANCE DURING THE YEAR
OVERVIEW
Revenue
Gross profit
Gross margin
EBITDA
% of revenue
Profit before tax
Diluted earnings per share
Net cash1 at year end
Adjusted measures:
Adjusted EBITDA2
% of revenue
Adjusted EBIT3
% of revenue
Adjusted profit before tax4
Adjusted diluted earnings per share5
2021
£ million
1,745.3
945.2
54.2%
153.9
8.8%
124.7
7.25p
276.0
173.6
10.0%
149.3
8.6%
149.9
8.67p
2020
£ million
1,234.9
666.3
54.0%
115.6
9.4%
92.2
5.35p
Change
+41%
+42%
+20bps
+33%
-60bps
+35%
+36%
240.6 +£35.4 million
126.6
10.2%
107.0
8.7%
108.3
5.88p
+37%
-20bps
+40%
-10bps
+38%
+47%
1. Net cash is cash less borrowings.
2. Adjusted EBITDA is calculated as profit before tax, interest, depreciation, amortisation, and share-based payment charges.
3. Adjusted EBIT is calculated as profit before tax, interest, share-based payment charges, and amortisation of acquired
intangible assets.
4. Adjusted profit before tax is calculated as profit before tax, excluding share-based payment charges and amortisation of
acquired intangible assets.
5. Adjusted diluted earnings per share is calculated as diluted earnings per share, adding back amortisation of acquired
intangibles, share-based payment charges, and adjusting to 34% of the non-controlling interest as in previous years
(affects prior year comparative only).
GROUP OVERVIEW
Group revenue for the year increased by
41% (41% CER) to £1.745 billion (2020:
£1.235 billion). Revenue growth across all
territories and brands was strong. Our longer-
established brands continued their strong
growth, whilst the newer brands delivered
rapid incremental growth as they were
refreshed and relaunched.
Adjusted EBITDA was £173.6 million (2020:
£126.6 million), an increase of 37% on the
previous year. Through leverage of overheads
and tight control of costs, we were able
to largely offset the increase in overseas
distribution costs caused by the pandemic
and were able to deliver an adjusted EBITDA
margin of 10.0% (2020: 10.2%). Profit
before tax was £124.7 million (2020: £92.2
million), an increase of 35%. Adjusted diluted
earnings per share was 8.67p, up 47% on the
prior year. Diluted earnings per share rose to
7.25p, an increase of 36% (2020: 5.35p).
I
/
S
T
R
A
T
E
G
C
R
E
P
O
R
T
The three brands that we acquired in the
previous financial year, MissPap, Karen
Millen and Coast, are growing well, with solid
foundations being built and the promise of
bright futures. In June 2020, we acquired
a further two new womenswear brands,
Oasis and Warehouse, which have a great
heritage and a strong following in the UK.
Both brands started to trade on new websites
from late July and have made excellent
progress. In January 2021, we acquired the
online business and intellectual property of
Debenhams for £55.0 million, which we will
develop into a digital department store and
marketplace. In February 2021, we acquired
the Dorothy Perkins, Wallis and Burton
brands and inventory for £25.2 million, which
will broaden our demographic reach and
product offering. These three new brands
continued to trade on the former Arcadia
platform for a three-month period, pending
transition to our platform. We are very excited
about the potential of these new brands,
as they complement our successful and
comprehensive, multi-brand platform.
The remaining 34% minority interest in
PrettyLittleThing was acquired in May
2020, ahead of the original 2022 option-
to-acquire date, for a combination of cash
and shares with initial consideration £269.8
million, potentially rising to £323.8 million.
PrettyLittleThing is continuing to trade
very well, with high-growth rates across all
territories and the acquisition resulted in
substantial earnings enhancement for the
group’s shareholders. We remain excited
about PLT’s long-term prospects and the
value creation opportunity that exists for the
group’s shareholders.
Cash generation was strong, with operating
cash flow of £201.1 million (2020: £127.3
million). Net cash flow was £30.6 million
(2020: £47.6 million), following significant
infrastructure capital expenditure of £49.3
million, the acquisition of the new brands and
associated intellectual property for £73.4
million and the remaining minority interest
in PrettyLittleThing for £161.9 million (a
related party transaction). The share placing
raised £195.7 million net of issue costs and
£39.4 million was spent on the purchase
of own shares for the Employee Benefit
Trust. Our net cash balance at the period
end increased to £276.0 million (2020:
£240.6 million).
Our priority throughout the pandemic has
been to ensure the safety of our colleagues,
customers and partners by following
government guidelines on safe working
practices. We have been able to continue
operating our facilities on this basis, which
has kept the business functioning with
the support of all parties involved. During
this period, in light of its strong trading
performance, the group has not claimed any
of the UK Government’s financial support
packages for businesses.
The group has continued to benefit
from strong growth across all brands and
geographies, as the convenience, pricing,
product range and customer service
resonated with consumers, even more so in
these unprecedented times. Customer return
rates across all geographic regions have been
lower than in the pre-pandemic period, with
fluctuations towards levels closer to normal
during periods of easing of lockdowns.
Active customer numbers in the last 12
months increased by 28% to 17.8 million.
We have seen an 8% increase in the number
of items per basket, which we are attributing
largely to the impact of the pandemic. Session
growth was 27%. Website conversion rate to
sale remained steady at 4.28%.
26
27
ANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC
USA
The group’s highest territorial growth rates have been seen in the
USA, as the brands’ momentum builds and market share increases.
PrettyLittleThing, Karen Millen and boohooMAN continued their
exceptional growth, whilst boohoo and NastyGal grew strongly too.
With all brands supported by the success of social media outreach and
the compelling customer proposition, group USA revenue increased by
65% to £435.1 million. Return rates have also been significantly lower
than in the previous year.
Gross margin improved slightly from 59.8% to 59.9%. Increases in
basket size and reduced return rates have only partially offset the
significant rise in distribution costs caused by the pandemic’s impact
on carrier capacity. We expect higher distribution costs to continue for
some time to come until there is a resumption of a more normal level
of air traffic.
REST OF WORLD
Growth in the rest of the world has been moderate at 16% to £120.4
million, impacted undoubtedly by the delays in the distribution network
caused by greatly reduced airfreight capacity. Gross margin declined
slightly from 55.8% to 54.9%, a small reduction given the challenging
conditions in overseas territories brought about by the pandemic.
Airfreight capacity constraints, caused by the pandemic, also increased
distribution costs to the more distant markets, and this is expected to
continue for some time to come.
REVIEW OF THE BUSINESS
CONTINUED
PERFORMANCE BY MARKET
UK
The UK market continues to be the largest for the group, accounting
for 54% of revenue (2020: 55%). Growth of 39% to £945.1 million
was strong across all brands, with the three new brands acquired in the
prior year augmenting this growth as they built from a low base. Our
multi-brand strategy continues to enable us to gain market share in the
UK, through our compelling consumer proposition.
Gross margin increased from 50.3% to 50.9%, supported by a
small increase in basket size and a strong product offering. During
the lockdown period, we increased the offering of activewear,
loungewear and tops, reacting quickly to the changes in demand from
home working, which was highly successful. Return rates have been
lower than in the previous year, due to a different mix of product
and consumer behaviour during the pandemic. Online shopping
clearly benefitted from the lockdown, with strong customer growth
continuing and, with a prudent strategy to reduce marketing costs as
a percentage of sales, we were able to achieve improved profitability.
The convenience of our comprehensive range of customer payment
options has also added to customer growth and purchase frequency.
REST OF EUROPE
It is apparent that the restrictions on movement and the effect of
lockdowns in Europe have impacted growth variably at different points
in time across the continent, but nevertheless, overall performance was
pleasing. Revenue growth of 30% to £244.7 million was good across all
brands and all major countries, starting with exceptional growth rates
in Q1, resulting from consumers shifting to online shopping during
lockdown, and continuing with moderating growth in subsequent
quarters. Overall, return rates have been significantly lower than in the
previous year, with some resumption to normal levels during easing of
lockdowns. Gross margin declined from 58.0% to 56.2%.
The group had planned for many months to ensure that it could
continue to trade effectively with EU countries after the end of
the transition period on 31 December 2020, following Brexit. As a
result, operations continued uninterrupted in January and February
2021, although additional customs compliance costs and duty on
some products does increase costs moderately. Whilst these costs
will continue to provide a modest headwind in the new financial year,
the group will look to mitigate these costs, for example, through
operational efficiencies.
UK GROWTH
USA GROWTH
+39%
RoE
+30%
+65%
RoW
+16%
28
29
ANNUAL REPORT AND ACCOUNTS 2021/ STRATEGIC REPORTBOOHOO GROUP PLC REVIEW OF THE BUSINESS
CONTINUED
AGENDA FOR CHANGE
Our programme for the Agenda for Change
commenced with the publication of Alison
Levitt QC’s independent review of the
group’s UK supply chain, published in full
in September 2020. We followed the
review with the appointment in November
2020 of Sir Brian Leveson PC to oversee
progress on implementation of the review's
recommendations, which the board intends
to implement in full. Sir Brian’s first board
report, which was published in full, reported
progress at pace in January 2021, while
noting that recommendations remain work
in progress. Sir Brian’s most recent update,
published in March 2021 alongside the
group’s UK supplier list, notes that the depth
and detail of supplier audits have dramatically
changed the way the industry is run in
Leicester and the determination of boohoo to
embed a new way of working, which, despite
a number of acquisitions in recent months,
remains its top priority.
The areas the group is committed to bring to
fruition are: enhancing corporate governance;
redefining our purchasing practices; raising
standards across our supply chain; supporting
Leicester’s workers and workers’ rights;
supporting suppliers; and demonstrating best
practice in action. Significant progress on the
Agenda for Change has been delivered by our
teams over the last six months and the group
expects to make further great progress in the
coming year, with publication of our global
supplier list expected by September 2021.
Further details of the progress of the Agenda
for Change are contained in a separate
section in this report on page 20.
CORPORATE GOVERNANCE
The board is committed to strengthening
corporate governance and progress to
date includes: the appointment of Shaun
McCabe as an independent non-executive
director and Chair of the Audit and Risk
Committees; the appointment of a Group
Director of Responsible Sourcing and
resourcing of a support team; the publication
30
of the group’s first Sustainability Report; and
the search for an additional non-executive
director with ESG experience. The Risk
Committee is a high-profile board function
created to oversee, in particular, the Supply
Chain Compliance Committee as part of
the Agenda for Change, demonstrating
our commitment to change at the highest
level in the company. Additionally, the
group appointed Sir Brian Leveson PC to
provide oversight of its Agenda for Change
programme in November 2020.
SUSTAINABILITY
The group published its first sustainability
strategy, UP.FRONT, in March 2021, in
which we have addressed key priority areas
and time-based targets to achieve our goals.
The three key areas of focus are on smarter
manufacturing of clothes, better terms for
suppliers and action in responsible business
practices to reduce our carbon footprint.
This strategy has been formulated over the
past year by the sustainability team, with
board support demonstrating the group’s firm
commitment to tangible progress in this area.
CONTINUED PROFITABLE GROWTH
FINANCIAL REVIEW
“The group has achieved a strong performance with revenues
and profits increasing in all territories and across all brands.”
REVENUE BY GEOGRAPHICAL MARKET
UK
Rest of Europe
USA
Rest of world
KPIs
Active customers1
Number of orders
Order frequency2
Conversion rate to sale3
Average order value4
Number of items per basket
1.
2. Defined as number of website orders in last 12 months divided by number of active customers.
3. Defined as the percentage of website orders taken to internet sessions.
4. Calculated as gross sales including sales tax divided by the number of orders.
Defined as having shopped in the last 12 months on the website.
CONSOLIDATED INCOME STATEMENT
Revenue
Cost of sales
Gross profit
Gross margin
Operating costs
Other income
Adjusted EBITDA
Adjusted EBITDA margin %
Depreciation
Amortisation of other intangible assets
Adjusted EBIT
Adjusted EBIT margin %
Adjusting items:
Amortisation of acquired intangible assets
Equity-settled share-based payment charges
Operating profit
Finance income
Finance expense
Profit before tax
Tax
Profit after tax for the year
Diluted earnings per share
Adjusted profit after tax for the year
Amortisation of acquired intangible assets
Share-based payment charges
Adjustment for tax
Profit after tax for the year
Adjusted profit for the period attributable to shareholders of the company
Adjusted diluted earnings per share
31
2021
£ million
945.1
244.7
435.1
120.4
1,745.3
2020
£ million
679.4
188.4
263.6
103.5
1,234.9
Change
+39%
+30%
+65%
+16%
+41%
2021
17.8 million
53.4 million
3.00
4.28%
£46.06
3.32
2020
13.9 million
42.2 million
3.04
4.26%
£43.50
3.06
2021
£ million
1,745.3
(800.1)
945.2
54.2%
(772.6)
1.0
173.6
10.0%
(20.1)
(4.2)
149.3
8.6%
(5.5)
(19.7)
124.1
0.9
(0.3)
124.7
(31.3)
93.4
7.25p
113.8
(5.5)
(19.7)
4.8
93.4
108.5
8.67p
2020
£ million
1,234.9
(568.6)
666.3
54.0%
(539.9)
0.2
126.6
10.2%
(16.6)
(3.0)
107.0
8.7%
(5.1)
(11.0)
90.9
1.7
(0.4)
92.2
(19.3)
72.9
5.35p
86.0
(5.1)
(11.0)
3.0
72.9
69.9
5.88p
Change
CER
+39%
+30%
+63%
+19%
+41%
Change
+28%
+27%
-1%
+2bps
+6%
+8%
Change
+41%
+41%
+42%
+20bps
+37%
-20bps
+40%
-10bps
+37%
+35%
+28%
+36%
+32%
+55%
+47%
ANNUAL REPORT AND ACCOUNTS 2021/ STRATEGIC REPORTBOOHOO GROUP PLC CONTINUED PROFITABLE GROWTH
Operating costs comprise distribution costs and administrative expenses excluding depreciation and amortisation and have increased by
60bps to 44.3% of revenue, with tight control of overheads and marketing costs mitigating the increase in overseas distribution costs caused
by the pandemic.
Adjusted EBITDA, which is not a statutory measure, represents earnings before interest, tax, depreciation, amortisation, non-cash share-based
payments charges and exceptional items. It provides a useful measure of the underlying profitability of the business. Adjusted EBITDA increased
by 37% from £126.6 million to £173.6 million and, as a percentage of revenue, moved from 10.2% to 10.0%.
Adjusted profit after tax, as with Adjusted EBITDA, provides another more consistent measure of the underlying profitability of the business
by removing non-cash amortisation of intangible assets relating to the acquisition of new brands (being their trademarks and customer lists),
share-based payment charges and exceptional items.
TAXATION
The effective rate of tax for the year was 25.1% (2020: 21.0%), which is higher (2020: higher) than the blended UK statutory rate of tax for
the year of 19.0% (2020: 19.0%), due to expenditure not deductible for tax purposes, being principally depreciation on buildings and fit out,
disallowable legal claims and share-based payment charges on growth shares.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Intangible assets
Property, plant and equipment
Right-of-use assets
Financial assets
Deferred tax asset
Non-current assets
Working capital
Lease liabilities
Net financial assets/(liabilities)
Cash and cash equivalents
Interest-bearing loans and borrowings
Deferred tax liability
Net current tax asset/(liability)
Net assets
2021
£ million
118.3
141.6
16.7
13.1
3.2
292.9
(90.9)
(18.3)
12.6
276.0
–
(4.2)
4.4
472.5
2020
£ million
42.3
119.2
14.6
4.5
6.0
186.6
(63.9)
(16.2)
(9.0)
245.4
(4.8)
(3.6)
(6.6)
327.9
The increase in intangible assets is due to the purchase of the new brands. The right-of-use-assets are the capitalised value of property leases.
Working capital has decreased in line with business growth and because of the increase in provisions of £23.4 million due to a number of claims.
The lease liability is the discounted value of future lease payments. The group has repaid all its borrowings.
INTANGIBLE AND FIXED ASSET ADDITIONS
Purchased intangible and fixed assets
Intangible assets
Trademarks and customer lists
Software
Tangible fixed assets
Distribution centres
Offices, office equipment, fixtures and fit outs
Motor vehicles
Total intangible and fixed asset additions
2021
£ million
2020
£ million
73.4
12.3
85.7
16.9
20.0
0.1
37.0
122.7
19.4
3.8
23.2
15.4
6.6
0.4
22.4
45.6
LIQUIDITY AND FINANCIAL RESOURCES
Operating cash flow was £201.1 million compared to £127.3 million in the previous year, and free cash outflow after tax was £121.8 million compared
to an inflow of £70.1 million in the previous financial year. Capital expenditure and intangible asset purchases were £49.3 million, which includes a
£16.9 million investment in our distribution centres to support projected growth in the business, acquisition of new brands was £73.4 million and
purchase of the remaining non-controlling interest in PrettyLittleThing was £161.9 million. The closing cash balance for the group was £276.0 million.
32
CONSOLIDATED CASH FLOW STATEMENT
Profit after tax for the year
2021
£ million
93.4
2020
£ million
72.9
Share-based payments charge
Depreciation charges and amortisation
Finance income
Finance expense
Loss on sale of fixed assets
Tax expense
Increase in inventories
Increase in trade and other receivables
Increase in trade and other payables
Operating cash flow
Capital expenditure and intangible asset purchases
Acquisition of new brands
Acquisition of non-controlling interest in PrettyLittleThing
Tax paid
Free cash (outflow)/inflow after tax
Net proceeds from the issue of ordinary shares
Purchase of own shares by EBT
Finance income received
Finance expense paid
Dividend paid to non-controlling interests
Lease payments
Repayment of borrowings
Net cash flow
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
TRENDS AND FACTORS
LIKELY TO AFFECT FUTURE
PERFORMANCE
The market for online fashion is forecast
to continue to grow and, along with the
increasing use of the internet globally,
provides a favourable backdrop for the
group with much opportunity for further
growth. Customers throughout the world
are seeking a wide choice of quality products
at value prices lower than those available
on the high street, with the convenience of
home delivery. The group’s target market
has a high propensity to spend on fashion
and the market is quite resilient to external
macroeconomic factors.
OUTLOOK
As always, our focus is to maintain an
outstanding customer proposition, with the
latest fashion at great prices, combined with
excellent customer service. To this end, we have
a plan of continuous investment in our systems,
infrastructure and technology to ensure we
offer an optimal online shopping experience
19.7
29.8
(0.9)
0.3
–
31.3
(45.8)
(8.8)
82.1
201.1
(49.3)
(73.4)
(161.9)
(38.3)
(121.8)
201.4
(39.4)
1.2
(0.1)
–
(5.9)
(4.8)
30.6
245.4
276.0
11.0
24.7
(1.7)
0.4
0.2
19.3
(32.3)
(9.4)
42.2
127.3
(26.2)
(19.4)
–
(11.6)
70.1
2.7
(14.9)
1.8
(0.3)
(3.4)
(6.0)
(2.4)
47.6
197.8
245.4
as we look to further cement our position
as a leader in global fashion e-commerce.
Revenue growth for the full year to
February 2022 is expected to be around
25% at a group level, with newly acquired
brands expected to deliver approximately five
percentage points of this growth. Growth
within our established brands remains strong,
and over the last two years we have achieved
a revenue CAGR of 42%. Trading in the first
few weeks of the financial year has been
encouraging; however, the economic outlook
remains uncertain and we expect the benefits
seen from reduced returns over the last
12 months to begin to unwind this year, whilst
still experiencing significantly elevated levels
of carriage and freight costs.
Margins for established brands are expected
to be in line year-on-year. We expect
investment in newly acquired brands to dilute
the group’s overall adjusted EBITDA margin
by 50-100bps, with the group’s adjusted
EBITDA margin expected to be in the region
of 9.5-10% for the full year.
Adjusted EBITDA is likely to see more of a
weighting towards the second half of the year,
reflecting a strong comparative period in the
33
first half. This is consistent with financial years
prior to the one herein reported, and the group
expects a higher adjusted EBITDA margin in
the second half, reflecting investments in our
scalable multi-brand platform.
As announced on 12 April 2021, the group
acquired a new office in the heart of London’s
West End for £72 million. Capital expenditure
for the remainder of the financial year is
expected to be in the region of £125-175
million. This relates to growth investments in
our new warehouse sites in Wellingborough
and Daventry, as well as continued
enhancements to our existing facilities,
including automation at our Sheffield site to
increase both capacity and efficiency.
We are focused on building the business for
the future and continued investment in our
brands, infrastructure, people and technology
will drive this growth and further economies
of scale. We are also committed to continued
improvements across our environmental
responsibilities and to accelerate our
sustainability journey. The group’s medium-
term target of sales growth of 25% per annum
and an adjusted EBITDA margin of around
10% remains unchanged.
CONTINUEDANNUAL REPORT AND ACCOUNTS 2021/ STRATEGIC REPORTBOOHOO GROUP PLC HOW WE MANAGE RISK
RISK MANAGEMENT
The board has overall responsibility for risk
management, validating the appropriateness
of the supporting system of internal controls
and for reviewing their effectiveness.
Effective risk management is an evolving and
continuous process; our aim is to intrinsically
embed effective risk management throughout
the business in order to manage risk in a way
that helps the group achieve its objectives.
During the last financial year, there have been
considerable ongoing improvements to the
risk management framework at boohoo and
the way we manage risk. This includes:
• The introduction of a new risk management
policy, approved by the board;
• The establishment of risk-focused
governance structures;
• The provision of risk management training
to senior executives;
• The introduction of the assessment of risk
appetite at board level; and
• Additional resourcing within the internal
audit and risk team.
RISK GOVERNANCE
The group has established an Executive Risk Group and Risk Committee to oversee and
monitor the improvements being made in relation to risk management. Below this level, we have
established functional risk groups across the business to identify, assess, monitor and manage
risks held at a functional level.
PLC Board
Twice yearly monitoring of STRATEGIC RISK
Strategic risk reporting
Risk appetite
Strategic risk reporting
Risk Committee
Quarterly monitoring of STRATEGIC RISK
Executive Risk Management Group
Quarterly monitoring of STRATEGIC RISK
and escalated FUNCTIONAL RISK
Functional risk reporting
Executive Focus Groups
At least quarterly monitoring
of FUNCTIONAL RISK
Functional risk reporting
Risk owners
Continuous identification and
management of FUNCTIONAL RISK
OUR RISK MANAGEMENT APPROACH
• Identify – Top down and bottom up identification methods including workshops, interviews
and focus groups
• Assess – Prioritisation and measurement of risks using consistent risk assessment methods
and against risk appetites agreed with the board
• Manage – Identifying, improving and reviewing control measures that reduce risk impact or
likelihood
• Monitor – Monitoring and reporting on the status of risks
At a functional level, each business function is responsible for preparing and maintaining their
functional risk registers and, with the assistance of the risk team, identifying, assessing, managing
and monitoring risks and reviewing emerging risks within their function. Each risk is assigned an
owner, through which ongoing activities and any actions related to that risk are updated.
At strategic level, the Executive Risk Group oversees the monitoring of escalated functional risks
as well as key strategic risks to the group. The board, assisted by the Risk Committee, reviews
the strategic risks facing the group and assesses the mitigating factors, reviews emerging risks,
performs deep dives on key risks, and assists the board in setting the risk appetite of the group,
against which risks are evaluated. Each risk is assigned to a senior executive, through which
ongoing activities and any actions related to that risk are updated.
Both functional and strategic risk registers are prepared using consistent risk factors and evaluate
business impact and likelihood ratings, both before (inherent) and after (residual) the effect of
any mitigating activities or controls.
Our risk management process is an ongoing assessment of the key risks facing our business, such
that it is updated whenever there is a major change in the principal risks and uncertainties.
The following are considered to be the principal risks and uncertainties as at the year-end.
STRATEGIC RISKS
Risk factors
Risk owner
SUPPLY CHAIN ETHICS
Director of Responsible Sourcing & Group Product Operations
Mitigation
• As a result of complexity inherent within the supply chain, there is
a risk that inappropriate, unethical and illegal non-compliance with
required supply chain practices go undetected, which could lead to
investigations from regulatory bodies and may cause reputational
damage.
• Agenda for Change outputs defining current and future policy,
with actions rigorously monitored and reported
• Establishing the right structure and team by building out the
sourcing and ethical compliance team, across the UK and regional
offices
• Mapping the supply chain ready for reporting in 2021
(March/September)
• Scheduling regular audits against boohoo code of conduct
• Transparency systems and tools are in place for UK (Leicester)
manufacturing
• Creating a series of behaviours which align with boohoo values
COMPETITION RISK
CEO and CFO
• The business operates in a broad and open market, with many
• Operating a differentiated business model, across brand and
competitors. There are many factors that influence customers’
choice, including service, fashion, price and brand. As a result of the
above factors, there is a risk that market share may not grow or could
decline
• European customers may be deterred from purchasing from a UK
company following the UK’s decision to leave the EU
geographies insulates against specific brand competitors as a group
• Investment in brands, both at an individual level and through
acquisition
• Competitor activity and offerings are reviewed regularly to
remain abreast of market developments and identify competitive
advantages
• Consumers’ changing preferences are monitored internally and by
market research to ensure product and service is relevant to demand
• Developments in e-commerce trends are monitored to keep abreast
of the latest developments and innovations
• Performance targets control key deliverables (product quality,
customer service and traffic)
SUSTAINABILITY
Director of Responsible Sourcing & Group Product Operations
• As a result of sustainability and environmental factors, there is a risk
that customer perception is damaged, which could negatively impact
the brand
• Longer term, consumers may reduce consumption of fast fashion
due to environmental concerns
• A defined supplier framework and governance structure,
which outlines the relationship owners, exists
• Supplier security assessments are conducted
• Diversification of the service providers, where appropriate
to spread risk
GOVERNANCE
CFO
• As a result of governance issues there is a risk of the business not
• Sustainable change is being driven by Agenda for Change
meeting the best interests of its stakeholders
and embedded within business practices
• Governance is a constant board agenda item
• New non-executive directors have been recruited,
which improves governance
• New committee structure established
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ANNUAL REPORT AND ACCOUNTS 2021/ STRATEGIC REPORTBOOHOO GROUP PLC HOW WE MANAGE RISK
CONTINUED
STRATEGIC RISKS CONTINUED
Risk factors
Risk owner
ETHOS AND CULTURE
Chief People Officer
Mitigation
OPERATIONAL RISKS
Risk factors
Risk owner
IT AND CYBER SECURITY
CIO
• As a result of business change, developing and implementing new
systems, controls and significant acquisitions, there is a risk that
culture is impacted, which could lead to a decrease in brand ethos
and morale, impacting operations
• Board commitment to positive change, led from within the business
• Investment in colleague engagement, including regular town hall
meetings
• Investment in colleague training to support change
• There is a risk of a cyber-attack, which could lead to application,
system and operational downtime, which may impact trading and
operations across the group
REGULATORY COMPLIANCE
Group Legal Counsel
• As a result of complex data privacy regulations and continuous
increase in threats to data, there is a risk of a regulatory breach,
which could lead to regulatory investigation and financial penalties
• As a result of operating in many international markets and variations
in local regulation in those different markets, compliance risks are
increased. Specifically, those where websites are located, pricing and
promotion restrictions are in place and any countries with complex
legal marketplace compliance (e.g. US) laws, there is a risk of non-
compliance and regulatory-related investigations that could lead
to financial penalties and reputational damage
• Training of colleagues on GDPR and data security
• Additional resource relating to data privacy
• Privacy policies and procedures reviewed and updated
• Understanding and compliance to key laws and regulations
• Impact reduced by skilled legal team in house and utilising specific
expert advice from external lawyers in territories concerned
• Monitoring of emerging regulations to ensure the business is best
placed for any new compliance requirements – e.g. buy-now-pay-
later
• As a result of emerging regulations, there is a risk that additional
• Expert counsel taken to fully understand M&A risks prior to
compliance costs are incurred in the future
acquisitions
• As a result of a large or high-profile acquisitions and the associated
market share implementation, there is a risk of investigation and
review by the competition authority, which may lead to financial
costs and delays to processing of the deal
TAXATION AND DUTIES
CFO
• Governments may impose additional corporation taxes on
• Impact of potential future corporation tax rates is considered in
online businesses
future plans
• Governments are increasingly reducing duty and tax-free thresholds
on imports and imposing tax collection responsibility on sellers,
thereby increasing prices to consumers
• Sales taxes are already imposed in all major markets and the group
believes that its products will remain competitive due to its online
proposition and with customs warehousing, the impact of duty costs
can be minimised
BREXIT
CFO
• As a result of required operational changes caused by the Brexit
agreement, specifically in relation to trading costs and regulation,
there is a risk of unplanned operational and financial impact,
which could lead to unexpected trading levels and/or downtime
in operations
• Impacts are understood and additional costs are factored in to future
plans and budgets, together with mitigating actions and cost savings
• Consideration being given to the availability of staffing and potential
increase in labour costs
CHANGE
CIO
• As a result of a high number of critical projects running in parallel,
there is a risk that delivery is not completed in line with proposed
timelines and business as usual activities are not appropriately
established, thereby not meeting the expectations of both internal
and external stakeholders, which could lead to reputational damage
Mitigation
• Board engagement in cyber risks, mitigations and plans
• Perimeter security regularly updated and tested
• Industry leading tooling to prevent and detect attacks
• 24/7 security operations centre.
• Continued and expanding investment in IT and security teams
• Training of both technical and non-technical teams regarding
cyber security
• Growth of projects capability including head of delivery and project
function, business analysts and project managers
• Change Advisory Board ('CAB') ensures that approvals are obtained
in advance of changes being implemented
• Project Prioritisation Group ('PPG') – Assesses and agrees the need
for changes/projects
• IT team includes appropriate skillset and talent within the team to
deliver what is required
• Established project methodology including the right level of
governance for each project
THIRD PARTIES
CFO/CIO/Supply Chain Director
• As a result of reliance placed on third parties, there is a risk that key
• Sustainability strategy and targets in place
third parties are not performing in line with expectations, which could
lead to operational and technological disruption
• First sustainability strategy published in March 2021 on group website
• Recruitment of key roles to deliver the strategy
BUSINESS CONTINUITY/DISASTER RECOVERY
CFO/CIO/Supply Chain Director
• As a result of an unplanned business continuity incident/event, there
is a risk that warehouses and key operations facilities are required to
close, which could lead to reduced productivity and operations across
the group
• As a result of a critical IT failure, when enforcement of disaster
recovery is required, there is a risk that key recovery objectives are
not met, which could lead to data and financial loss
• Warehouses are protected by 24-hour security, access control,
fire protection and sprinkler systems
• Head office is protected by security alarm, access control,
fire protection and sprinkler systems
• Electric power continuity is protected by back-up generators
• Consideration has been given to location diversification, resulting
in more options to move sites in the event that a major incident
occurs at one site
• IT disaster recovery covers critical applications and third party
contracts with appropriate service level agreements
• Investment in monitoring and alerting, governance,
change management
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ANNUAL REPORT AND ACCOUNTS 2021/ STRATEGIC REPORTBOOHOO GROUP PLC HOW WE MANAGE RISK
CONTINUED
OPERATIONAL RISKS CONTINUED
Risk factors
Risk owner
PEOPLE RISK
Chief People Officer
Mitigation
• Competitors are inclined to poach key staff and talented individuals
• Employees may leave the company for better pay and prospects
elsewhere
• Incentive schemes across all levels of staff are operated, including
share ownership, bonus and incentive schemes linked to business
and personal performance
• Succession planning aims to reduce key person dependencies
• Training, development and progression opportunities to retain staff
PRODUCT RISK
Director of Responsible Sourcing & Group Product Operations
• As a result of health and safety regulations in relation to products,
• Head of Product Compliance joined in early 2021
there is a risk of product liability costs and potential legal implications
• Quality control teams check the products at distribution centres
• As a result of product quality issues, there is a risk of a decline in
and within factories
customer satisfaction
FINANCIAL RISKS
Risk factors
Risk owner
FINANCIAL RISK
CFO
• Policies and procedures in place for suppliers to follow
• Testing of products for chemical components to legal limits
Mitigation
• Poor business performance or lack of appetite for the sector may
• Regular budgeting and forecasting ensures working capital is
impede raising of capital
• Exchange rate fluctuations may erode margins
sufficient for business requirements and rapid reaction to adverse
business performance
• Uncertainty due to fluctuating exchange rates is reduced by
appropriate forward looking hedging policies
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
Andrew
Reaney
DIRECTOR OF RESPONSIBLE SOURCING AND
GROUP PRODUCT OPERATIONS
4 MAY 2021
We’re facing up to the future, doing more for
our clothes, suppliers, communities and our
impact on the environment.
We’ve looked hard both inside and outside our business, and come up
with a plan that will help us get ready for the future.
There is work to be done, and we’re going to be open, up front, and
frank on the progress we are making. Our next chapter is still in the
making.
The importance of responsible purchasing practices and the need to
improve suppliers’ social and environmental practices is recognised
now more than ever.
Important issues arising during the year include labour standards
concerns in UK and international manufacturing, and traceability and
human rights concerns in global supply chains, including allegations of
forced labour risks linked to cotton sourced from the Xinjiang region of
China. We are conscious that many workers have also become more
vulnerable as a result of the COVID-19 crisis.
In 2020, we tackled these challenges head on, communicating
our insights, views and approaches transparently. We published an
independent review on our Leicester supply chain by Alison Levitt
QC, and launched our Agenda for Change, setting out how we would
deliver her recommendations. We also took part in the Environmental
Audit Committee on Fast Fashion and the UK Government
consultation on cotton sourcing.
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ANNUAL REPORT AND ACCOUNTS 2021/ STRATEGIC REPORTBOOHOO GROUP PLC
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
CONTINUED
We’ll communicate these changes to our
customers, too. Shoppers will increasingly
see a consistent message across our brands,
bearing the strapline READY FOR THE
FUTURE, and as we move ahead on our
journey, more and more products will meet
these criteria.
In addition, we’ve signed up to WRAP’s
Textiles 2030, which is a call to action to all
UK fashion brands and retailers to transform
our industry through better materials, more
circular product design and alternative
business models.
With the introduction of new brands including
Debenhams, we’re going to be looking closely
at sustainability in our beauty and home
offering too.
This year, alongside our annual report and
accounts, we are also publishing a standalone
sustainability report where stakeholders can
find more information on how we plan to
meet our goals and what steps they will see us
take first.
I joined the business in September 2020, and
took responsibility for the full sustainability
strategy in March 2021, bringing together our
ethical and environmental programmes. I am
excited to lead our delivery of the strategy,
driving change in our own operations and
through our supply chains.
Andrew Reaney
DIRECTOR OF RESPONSIBLE SOURCING AND
GROUP PRODUCT OPERATIONS
This spirit of openness and transparency
is central to our first group sustainability
strategy, UP.FRONT, published in March
2021 on the group’s website. Importantly,
we’ve designed the strategy to address key
priority areas and set clear, time-bound goals
to help demonstrate our progress. They are
stretching and will be tough to achieve, but
we are committed to making it happen.
This strategy hasn’t come out of nowhere.
We have been laying the foundations over
the last two years, recruiting ethical trade and
sustainability experts, joining and contributing
to industry groups like the British Retail
Consortium, WRAP and the Sustainable
Apparel Coalition ('SAC'), and analysing
our current approach to sustainability
management.
UP.FRONT is about taking this work further,
driving measurable progress on our issues like
materials, carbon
and waste. And
we’ve already got
started.
Our buying teams
are working with
existing and new
suppliers to develop
more sustainable
garments, focusing
on materials like
recycled polyester
and organic
cotton, and over
the coming year,
we will be making
big changes to the
way we purchase
our cotton.
HOW WE DEVELOPED OUR STRATEGY
We’ve been through a comprehensive
process to develop our sustainability strategy.
We began by conducting a materiality
assessment – an evaluation of the key
environmental, social and governance
issues that matter most to our business and
stakeholders, and on which we stand to make
the greatest impact. We worked with an expert
third party to make sure that this was an
effective, objective exercise.
They interviewed people across our business,
reviewed sustainability indices, analysed major
industry and sustainability campaigns, mapped
industry-wide issues and stakeholder views.
This helped to prioritise the issues and focus
our strategy.
On top of this assessment, we layered on
further insight from our business and customer
research, using this to refine our priorities and
identify relevant goals and targets.
We involved teams around the business,
including buying, marketing and operations and
consulted the executive team and board too.
UP.FRONT is about making progress on
the sustainability issues where we can make
a real difference, and working in an open,
collaborative way to get there.
THERE ARE THREE FOCUS AREAS
CLOTHES.
MADE SMARTER
SUPPLIERS.
ON BETTER TERMS
OUR BUSINESS.
TAKING ACTION
There’s an environmental cost to producing
clothes, but there are ways we can be
smarter and leave a lighter footprint.
We’re focusing our efforts on the areas
that will have the biggest impact on the
future of the clothes that we produce
– materials, design, waste, packaging
and finding ways to keep our clothes in
use for longer.
And this is just the start. We are going to
work with experts to develop more focused
plans on water, chemicals, biodiversity and
microfibres.
Our business is growing. We rely on strong
relationships with our suppliers to provide
our customers with on trend products at
great prices.
We’ve been building our team so we can
engage with suppliers in the UK and
beyond to make sure we have a clear map
of all the factories producing our clothes,
and that our standards are followed to
protect the workers in those factories.
We will embed enhanced ethical and
environment standards in the UK and
globally, working alongside those who make
our clothes to help ensure that our role
in the fashion supply chain is a positive one.
We’re passionate about fashion, our
business and the role that we can play in
the wider industry.
We’re going to be up front about how we
work, our environmental impact and our
role in the global fashion community –
starting with tackling carbon emissions
across our value chain, creating great jobs,
promoting responsible marketing and
strong governance, and acting as a force
for good in local communities.
In the coming pages, we will share an overview of our sustainability strategy. More information can be found in our 2020 Sustainability Report, which
can be downloaded at boohooplc.com/sustainability.
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010203ANNUAL REPORT AND ACCOUNTS 2021/ STRATEGIC REPORTBOOHOO GROUP PLC ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
CONTINUED
FOCUS AREA 1:
CLOTHES MADE
SMARTER
BETTER MATERIALS
2025 All our polyester and cotton will
be recycled or more sustainable
2030 All our clothes made with more
sustainable materials
Making our clothes in a smarter way – with better materials, more
sustainable design and less waste and packaging.
Buying more sustainable alternatives to traditional materials is a top priority. Working with our
industry partners like WRAP and the SAC, we’ve analysed our materials mix and developed
guidelines on more sustainable options.
Around 80% of the materials we use (by volume) are polyester and cotton, so our most
ambitious targets focus on these areas. However, we’re also working with our suppliers on other
materials like viscose, acrylic and animal-derived products.
We’re launching a consistent strapline across our brands to help customers identify which
products helping to achieve our goals, so look out for READY FOR THE FUTURE across our
sites, as products displaying this criterion will meet our standards.
SUSTAINABLE DESIGN
2025 Design innovation to reduce
waste, increase durability and
improve recyclability
Building on our materials strategy, we want to develop a set of standards to incorporate this
and consider other relevant elements of product design, such as upcycling, recyclability and
durability.
We’ve appointed one of our most experienced designers in the business as Sustainable Product
Design Director to lead this work, and we’re excited about the potential innovations in the
pipeline.
FUTURE FOCUS
2023 Announce our goals on water,
chemicals, biodiversity and
microfibers, developed in
partnership with experts
There are other important issues to address like water, chemicals, biodiversity and microfibres.
Our work in areas such as better materials and improved supply chain standards will help us
make progress on these areas, as well as our contribution to industry groups like the Microfibre
Consortium and Textiles 2030. But we will also develop dedicated goals on each of these issues
and work with experts to understand the best role we can play in tackling them.
Find out more in our sustainability report on pages 39 to 49.
FOCUS AREA 2:
SUPPLIERS ON
BETTER TERMS
TRANSPARENCY
2021 Disclose our supplier and factory
list
2021
Publish our purchasing practices
2025 Map our raw materials supply
chain for key fibres
Doing more for our suppliers – transparent supply chains, improved
standards and management, and a long-term commitment to those that
work in fashion.
Transparency is central to the commitments we’ve made through our Agenda for Change.
We have already delivered in a number of areas by publishing Alison Levitt QC’s independent
review of our supply chain in full, and sharing updates by Sir Brian Leveson PC, who is holding
our board to account on delivering our Agenda for Change programme and publishing our list of
UK suppliers.
In 2021, we will continue to deliver against our Agenda for Change commitments by publishing
our global supplier list and our purchasing practices.
Longer term, we’re going to work with key suppliers to map priority raw materials through our
supply chain, right back to the fields and factories where they were produced.
TEXTILE WASTE
2023 Launch resale and recycling offers
across out brands
2025 No textile waste direct to landfill
in our UK supply chain
We’ve been working for some time on diverting any textile waste in our own operations from
landfill, working with recycling partners and charities. Now, we want to extend this to our UK
supply chain. In particular, we hope to launch a pilot project to make sure that any offcuts are put
to the best use, through upcycling or recycling, for example.
We’re also committed to developing different ways for customers to recycle their garments and
investing in resale platforms to keep clothes in use for longer.
STANDARDS
Our new sourcing team includes ethical trade, product compliance, quality assurance and
environmental sustainability experts.
2023 Demonstrated improvements in
UK garment factories and the
positive impact on workers
2025 Demonstrate the impact of our
improved supplier management
programme over five years
Together, they are implementing a more robust set of supplier standards and a rigorous
management programme. They’re also improving the systems we use to order, monitor and track
our products.
All this work will drive positive changes for suppliers, factories and workers, and we are
committed to monitoring the impact of these improvements over the coming year and
publishing the findings.
PACKAGING
2030 All customer garment packaging
will be reusable, recyclable or
compostable, and any plastic used
will contain over 50% recycled
content
We’ve made a lot of progress on key types of packaging and labelling. For example, our despatch
bags contain over 80% recycled plastic, and we’re working with a local supplier on poly-bags
(which we use to keep clothes protected in transport) with a high proportion of recycled content.
Now, we want to go further by working with our suppliers to ensure this is consistent across
all our garment packaging. We’ll also keep innovating to explore more sustainable, recyclable
packaging materials.
42
43
CONTINUEDANNUAL REPORT AND ACCOUNTS 2021/ STRATEGIC REPORTBOOHOO GROUP PLC ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
CONTINUED
PROGRAMMES
2021
Set up and donate £1 million
to the Garment Workers' Trust
in Leicester
2021
Launch manufacturing centre
of excellence
FOCUS AREA 3:
OUR BUSINESS
TAKING ACTION
GOVERNANCE
2021 Embed sustainability risks and
opportunities in business decisions
and KPIs
One of our key Agenda for Change commitments was to set up a Garment Workers' Trust in
Leicester to help champion workers’ rights and provide support for vulnerable garment workers
in Leicester. The Trust will be overseen and managed by an independent Board of Trustees (for
whom we’re currently recruiting), and we will provide grants and crisis funds for those in need.
We hope that it will become a recognised and trusted source of support for anyone working in
the fashion and textiles industry, providing both hardship funds and clear and understandable
guidance in multiple languages for those who may need independent support.
We’ve also purchased a site in Leicester where we want to establish a manufacturing facility in
partnership with one of our strategic suppliers.
We’re obtaining planning permission for the facility, which is due to launch in 2021. We hope that
it will showcase how our products can be made legally, ethically and safely. We hope to create up
to 100 local jobs and offer a community hub to inspire new talent in the industry. Our growing
team in charge of checking standards among our Leicester suppliers will also work from this
facility.
Running our business responsibly – strong governance, a great place
to work, tackling climate change, responsible marketing and a role in
communities we can all be proud of.
In 2020, we strengthened our approach to governance with a Supply Chain Compliance
Committee, which reports to our Risk Committee and the group board.
Improving supply chain standards is an important agenda item at every board meeting. In 2020,
these discussions focused on our Agenda for Change, UK supplier management programme and
UP.FRONT sustainability strategy. In 2021, we will discuss broader sustainability issues through
this governance process.
CLIMATE CHANGE
2030 Achieve carbon reductions across
our value chain aligned with
science-based targets equivalent
to 52% reduction in emissions
relative to our growth.*
*4.2% absolute reduction in operational emissions
year-on-year, and 7% reduction in value chain emissions
year-on-year relative to our growth.
The climate crisis is one of the biggest challenges facing the planet and urgent action is needed.
We know that boohoo has a key role to play in this fight and are determined to be a proactive
presence in the retail industry.
Working with an independent and expert carbon management consultancy, we have calculated
our carbon footprint across both our own operations and value chain. We have identified key
areas where we can – and must – make the most significant reductions. These are our products,
product logistics and marketing channels.
We are setting a bold climate change commitment. By 2030, we will achieve carbon reductions
across our value chain aligned with science-based targets equivalent to a 52% reduction in
emissions relative to our growth.*
Furthermore, we have joined the BRC Climate Action Roadmap and the WRAP Textiles 2030
initiative.
Find out more in our sustainability report on pages 39 to 49.
MARKETING
2021
Publish responsible marketing
principles
ONGOING Make it easier for customers to
make sustainable choices with us
We live and breathe marketing and social media. It’s how we get inspiration, talk with our
customers, sell our products and get feedback on what we do. Our marketing approach and
discounting strategies mean that customers from all walks of life are able to access our on-trend
products at great prices.
We’ve published our responsible marketing principles. Our teams are also working hard to make
it easier for customers to make more sustainable choices by launching READY FOR THE
FUTURE products and clearly communicating how products are meeting these guidelines.
Find out more in our sustainability report on pages 39 to 49.
And to drive change, teams across our business will have KPIs linked to our sustainability
strategy. For example, buying teams are focusing on better materials.
COMMUNITY
Find out more in business governance on pages 52 to 59.
2021
Publish our social impact strategy
to support local communities
OUR PEOPLE
2025 Aspire to be independently
recognised as the best online
retailer to work for
We want to attract and retain the best talent in the industry, building a diverse, inclusive boohoo
family where all our colleagues feel valued, have the opportunity to reach their full potential and
are proud of what we achieve together.
We’ll listen to colleagues’ needs, make diversity and inclusion a part of everything we do, and
create a thriving workplace culture. We’ll focus on health and wellbeing, and provide first-class
learning and development opportunities and market-leading reward and benefit packages. And
we’ll improve the way we monitor performance and plan for the future.
Find out more in our people section on pages 48 to 49.
Our teams are passionate about giving back to their local communities and supporting charities.
In addition, all our brands have their own charitable giving programmes, which include sample
donations, cash donations, volunteering and partnerships.
To amplify our positive impact, in 2021, we plan to launch a group-wide social impact strategy,
bringing all this work together under shared ambitions. This won’t stop our brands supporting the
causes that they and their customers love, but it will help us reach more people and measure the
impact on their lives.
Find out more in our sustainability report on pages 39 to 49
44
45
CONTINUEDANNUAL REPORT AND ACCOUNTS 2021/ STRATEGIC REPORTBOOHOO GROUP PLC ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
CONTINUED
CARBON REPORTING
Our carbon footprint has been calculated in accordance with the internationally recognised
standard the Greenhouse Gas Protocol, a corporate accounting and reporting standard,
developed by the World Resources Institute ('WRI') and the World Business Council for
Sustainable Development ('WBCSD'). The data in this report has been prepared in line with the
HM Government’s guidance: Environmental Reporting Guidelines: Including streamlined energy and
carbon reporting. This is the second year that the group has reported on its carbon footprint.
PERFORMANCE
This is the first year we have calculated our emissions across all three scopes for both this and the
previous reporting year and have made the results publicly available. The group’s 2020 carbon
footprint is 782,264 tCO2e, which is mainly attributable to purchased goods and services
(including sold goods) as well as the transport and distribution thereof.
Since the previous reporting year, market-based emissions have increased by 33% from
587,983 to 782,264 tCO2e. This is predominately driven by business growth and an increase in
goods sold since the previous reporting period.
Operational market-based emissions (scope 1 & 2) have decreased by 84% from 3,120 to 499
tCO2e, which was largely driven by a switch to 100% renewable energy supply in our operations.
We also saw a reduction in business activities, such as building use and business travel due to
COVID-19 restrictions.
CARBON EMISSIONS
(metric tonnes of carbon dioxide equivalent)
Scope 1
Company cars
Natural gas
Other fuels
Refrigerant
Scope 2
Electricity (market-based)
Electricity (location-based)
Scope 3 categories
Upstream emissions
Purchased goods and services
Capital goods
Fuel and energy-related activities
Upstream transportation and distribution
Waste generated in operations
Business travel
Employee commuting
Upstream leased assets
Downstream emissions
Downstream transportation and distribution
End of life treatment of sold products
Total emissions market-based
Total emissions location-based
Energy reporting: total energy usage (kWh)
Intensity metrics (UK and offshore)
Total revenue (£ million)
All scopes (1, 2 & 3) emissions (tCO2e)/total revenue
(£ million)
2020
tCO2e
66
273
13
146
–
2,674
613,877
4,188
285
149,883
91
526
505
20
2019
tCO2e
111
240
15
146
2,608
2,928
436,700
–
310
139,120
63
2,436
459
22
3,710
8,681
782,264
784,938
12,717,546
2,730
3,023
587,983
588,303
13,065,849
1,674
467
1,172
502
Emissions intensity by revenue has decreased by 7%, highlighting an improved carbon efficiency
by turnover.
46
and transportation of goods. It also
includes non-company cars as per the
SECR regulations
The group’s carbon emissions calculations
used two approaches depending on the
availability of data across its operations and
supply chains in accordance with the GHG
Protocol. These approaches included:
• Process-based approach – uses quantity-
based consumption data to estimate
the carbon emissions associated with a
given activity e.g. litres of fuel used. This
approach was used for scope 1, 2, and some
scope 3 emissions. For goods for resale,
a subcategory of purchased goods and
services the Higgs Index carbon emissions
benchmarks were applied
• Spend-based approach – using extended
economic input-output modelling. This
approach combines industry and trade
flow data between industries with total
emissions data from a given industry to
estimate the carbon emissions associated
with £1 million spend in each industry. This
approach was used for good not for resale
(a subcategory of purchased goods and
services and capital goods)
ENERGY EFFICIENCY
ACTION
Since 2019, the group has carried out several
initiatives to drive energy efficiency across
our own operations. These include:
• Continued LED roll out across Burnley
and Manchester
• Commenced the installation of solar
panels at Burnley and Manchester
METHODOLOGY
boohoo group plc’s carbon footprint has
been calculated in accordance with the
internationally recognised standard the
Greenhouse Gas Protocol, a corporate
accounting and reporting standard, developed
by the World Resources Institute ('WRI') and
the World Business Council for Sustainable
Development ('WBCSD'). It adheres to
the best practice practices of relevance,
completeness, consistency, transparency
and accuracy.
The carbon footprint assessment was
carried out by an independent sustainability
consultancy Avieco.
The group’s carbon emissions are measured
in carbon dioxide equivalents or CO2e.
This metric includes the six greenhouse
gases covered by the Kyoto Protocol: carbon
dioxide (CO2), methane (CH4), nitrous
oxide (N2O), hydrofluorocarbons (HFCs),
perfluorocarbons (PFCs), and sulphur
hexafluoride (SF6).
The carbon reporting period is from 1 January
2020 to 31 December 2020. This is offset
from the business’s financial reporting period
1 March 2020 to 28 February 2021 to allow
sufficient time to capture 12 months of data
for our carbon assessment in preparation for
the group’s end of year reporting.
The carbon emissions calculations followed
the operational control approach, which
means that all emissions over which the group
has direct control is included in its scope 1 &
2 boundary.
The emissions calculations breakdown into
three reporting scopes. These include:
• Scope 1 – this includes all direct emissions
from assets over which the group has
control, including company cars, natural
gas and other fuels used in our operations
and any refrigerant gas leakages
• Scope 2 – this includes indirect emissions
associated with the generation of
electricity. In line with best practice,
market and location-based emissions are
both reported on:
− Market-based emissions – which reflect
the actual emissions from the electricity
agreements with the business’s suppliers
− Location-based – which reflect the
average emissions intensity of the grids
in which the consumption occurs
• Scope 3 – this includes other indirect
emissions generated along our value chain,
which predominately consists of goods for
resale, goods not for resale, and distribution
47
ANNUAL REPORT AND ACCOUNTS 2021/ STRATEGIC REPORTBOOHOO GROUP PLC
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
CONTINUED
PEOPLE
INTRODUCTION
People are at the very heart of
everything we do here at the
boohoo group. It is vital for
boohoo’s growth and success
that we maintain focus on the
development and wellbeing
of our colleagues. We want to
continue to create a supportive
environment where our colleagues
feel energised, motivated and
valued. We have developed an
outstanding reward and benefits
framework where, irrespective
of role, all our colleagues can
share in the success of boohoo’s
incredible growth. We focus on
listening to our teams to always
understand what matters most to
them. We offer an inclusive and
diverse working environment,
where we make people feel
respected and valued for who they
are as individuals. Our colleagues
continue to have a voice through
our ever-evolving listening and
engagement forums. We offer a
strong learning and development
experience with online training,
check ins and webinars delivered
throughout the past 12 months.
SENIOR ROLES
HELD BY WOMEN
41%
DIVERSITY AND INCLUSION
Creating a working environment that is free from discrimination and harassment, and where
everyone can be heard is essential if we are to operate in an inclusive workplace. This year, we
took part in National Inclusion Week with the theme being ‘Each One Reach One’. Various
activities were held throughout a week in October to celebrate each other’s uniqueness and to
also share and promote inspiring inclusion practices and ideas across the business. Also, in the
autumn of 2020, a D&I steering group was formed to ensure that all areas and brands within
the business are represented. The group meet six times a year to discuss group strategy and
initiatives. A charter was developed and suggestions are brought to life and embedded by each
of our working groups, ensuring each brand keeps their own distinct personality while operating
as one business. One of the immediate actions has been to begin to collect demographic data
from everyone to inform our future strategy. This is a sensitive topic and so, with the support of
colleagues from across the business, a short video was produced explaining why this is important.
A comprehensive guide was also produced with information on how to submit demographic
data via our people system. We will continue to support an inclusive and diverse workforce by
sustaining momentum through our designated groups.
GENDER PAY AND DIVERSITY
We encourage diversity in the workforce: at the year-end, the percentage of males was
46% (2020: 42%) and females 54% (2020: 58%), with 41% (2020: 45%) of our senior
management positions held by women.
NUMBER OF EMPLOYEES OF EACH
GENDER AT THE YEAR-END
Directors of the parent company
Senior managers
Other employees
Male
7
43
1,621
1,671
Female
1
30
1,919
1,950
Our gender pay gap data for the group, prepared up to March 2020, showed females were paid
4.1% more than males, using the median results, and males were paid 6.2% more than females,
using mean results (male average pay being the higher due to a greater proportion of males in the
most senior roles), which is significantly below the national average as reported by ONS.
OPERATIONS
Colleague safety and wellbeing remains our number one priority, and we have all worked tirelessly
during the pandemic to support colleagues in our distribution centres and offices. We have teams
of COVID-19 marshals who review our processes daily, keeping wellbeing at the top of the agenda.
We invested in various measures (including temperature scanners and lateral flow test centres)
across all offices and distribution centres to ensure we are keeping our colleagues, their families and
our local communities safe.
Our international customer services team, who were based at Burnley, have experienced a
complete change of working environment. At the start of the pandemic, they transitioned to
work from home and they are just as effective working remotely. Colleagues are kept informed
and engaged through new online learning modules and a mental health support package, which
are facilitating the change from a busy office environment to working remotely.
HEALTH, WELLBEING AND ENGAGEMENT ACTIVITIES
We take the health and wellbeing of our colleagues very seriously and place a huge importance
on supporting teams to navigate their busy lives and critically their mental and physical health.
The people team are trained mental health first aiders and work with managers to provide
guidance to anyone that needs some additional wellbeing support.
We also focus on days that raise awareness of issues that matter to our boohoo family. These
days give us the perfect chance to bring vital conversations to the forefront and get people
talking about topics beyond the immediate working day. Some of the wellbeing areas we
highlighted in 2020 included breast cancer screening and mental health (through the charity,
CALM).
Operations and PLT, we have pioneered a
fresh approach to training by rolling out a
coaching programme across the business.
This approach really shifted the perception
that training only happens in the classroom.
SUMMARY
With the backdrop of a global pandemic our
customers have demanded more from us
than ever before. The continued commitment
and support from our colleagues has allowed
us to step up and deliver exceptional results in
an extraordinarily challenging year.
Our colleagues are our strongest asset, and
we will always strive to support them to grow,
develop and thrive within our boohoo family.
On behalf of the board
John Lyttle
4 May 2021
Neil Catto
4 May 2021
Across the group, we now have digital
wellness hubs for all our colleagues, which
provide articles, videos, hints and tips on
how to improve wellbeing in a specific area
of their world.
Alongside our healthcare app MediCash,
sits our Employee Assistance Programme.
This service allows our colleagues to access
around-the-clock support and high-quality
advice from experts on health and wellbeing.
DRIVING EMPLOYEE
ENGAGEMENT WITHIN
OUR FAMILY
This year, all our employees across the group
were invited to participate in a Wellbeing
and Engagement survey, which allows us to
measure wellbeing and engagement levels and
identify ways to improve how we do things. This
year, 57% of colleagues participated in survey
across all brands and locations and over 75%
of employees see themselves working for the
group in 12 months’ time.
The survey confirmed that we have an engaged
workforce, our colleagues feel valued and
respected, they know what’s expected of them
in their role and they also have the right tools
to do their role effectively.
This survey has also drawn out great results
in the Diversity and Inclusion space, with
85% of colleagues who participated in the
survey saying their manager has a focus on
Diversity and Inclusion, and 81% would feel
comfortable raising concerns around D&I,
bullying or unfair treatment.
BOOHOOFAMILY INSTA
To improve communication and engagement,
the boohoofamily Instagram platform
was introduced in 2019. This allows us to
share colleague stories on any engagement
activities and also to showcase what it’s like to
be part of boohoo group. This continues to be
very successful, uniting our global locations
and providing an insight into all the different
aspects of working at the boohoo group. We
now have circa 6,000 followers up from
3,000 followers this time last year.
PLTHQ ON INSTAGRAM
Our PLTHQ account on Instagram is one of
our crucial tools to engage with colleagues
and external audiences across the globe. The
account acts as a showreel to highlight what
it’s really like to work at PrettyLittleThing
(‘PLT’) and gives us a platform to interact with
our wide following from a people perspective.
We post our live vacancies, host all our
famous competitions, shout about important
causes we are supporting, and promoting our
wellbeing activity that we are hosting at our
Manchester HQ.
YOUR VOICE
Your Voice started back in 2014 and it
is a two-way communications channel
where colleagues can share their ideas
and suggestions with the leadership team.
The group supports on all decisions from
policy work to events to health and safety
matters across our sites and truly enables our
colleagues to feel listened to and to have a
voice in the business.
REWARD AND BENEFITS
From our very early days, supporting the
growth and retention of talent has been
central to our success. We pride ourselves
on our competitive total reward package, and
especially the opportunity every colleague
receives to join in our incredible success by
making regular savings into our SAYE share
save scheme. We also like to recognise the
contribution each and every one of us makes
by gifting every colleague a free number of
shares each year in our SIP scheme. We offer
a great range of benefits for our colleagues to
enjoy, such as staff discount across our rapidly
growing brands, annual incentive schemes, life
assurance and health and wellbeing benefits,
as well as free gym access and classes. We aim
to be a leader in our field and we continue to
evolve and improve our offering to make sure
we find and retain the very best people.
LEARNING AND
DEVELOPMENT
We are committed to developing our
boohoo family in our own distinct way,
promoting a culture that supports, develops
and challenges us to deliver success. We
champion microlearning and training on
demand, which really fit with the fast-paced
world of fashion. Our learning offer provides
webinars, access to coaching and support to
all our colleagues and leadership. At PLT, we
quickly pivoted our face-to-face training to
online during the pandemic with a brand new
learning offer tailored to responding to the
'new normal' with initiatives like virtual check
ins and a fresh collection of new webinars with
titles like 'Building resilience in uncertainty'
and 'Being a remote leader'. Across
48
49
ANNUAL REPORT AND ACCOUNTS 2021/ STRATEGIC REPORTBOOHOO GROUP PLC BOARD OF DIRECTORS
MAHMUD KAMANI
CAROL KANE
JOHN LYTTLE
NEIL CATTO
BRIAN SMALL
PIERRE CUILLERET
SHAUN MCCABE
IAIN MCDONALD
GROUP EXECUTIVE
CHAIRMAN
Mahmud founded boohoo with
Carol Kane in 2006, leveraging
over 30 years of experience in
the fashion and clothing industry.
Mahmud is an entrepreneur,
with expertise encompassing
all areas of the supply chain
from sourcing, to import and
wholesale. Mahmud is an
inspirational leader, having built
a strong team and engendered
loyalty from many long-serving
employees.
GROUP
CO-FOUNDER
AND EXECUTIVE
DIRECTOR
Carol has over 30 years of
experience in the fashion
industry. Starting her career as
a designer, then fashion buyer,
Carol has worked with Mahmud
Kamani for the past 27 years
supplying high street retailers.
Carol co-founded boohoo in
2006 and since inception has
worked on marketing, product
and brand strategy both
domestically and abroad.
CHIEF EXECUTIVE
John previously spent eight
years at Primark, a division of
Associated British Foods, as
Chief Operating Officer. During
his tenure, turnover grew 158%
to £7bn. Prior to joining Primark,
John held senior roles at Matalan
and Arcadia group.
CHIEF FINANCIAL
OFFICER
Neil qualified as a chartered
accountant with Ernst & Young
and spent nine years working
in their Manchester, Palo Alto
and Reading offices. He was
previously Finance Director of
dabs.com plc and has held senior
financial positions in BT plc
and The Carphone Warehouse
Group plc.
DEPUTY
CHAIRMAN,
NON-EXECUTIVE
DIRECTOR
AND SENIOR
INDEPENDENT
DIRECTOR
N A RI R
Brian is Deputy Chairman,
Senior Independent Director,
Chairman of the Nomination
Committee and sits on the
Audit, Risk and Remuneration
Committees.
Brian was most recently CFO
of JD Sports plc for nearly 15
years. Prior to this role, he was
Operations Finance Director
at Intercare Group Plc and has
also been finance director of a
number of other companies.
Brian is also a non-executive
director and Audit Committee
Chair at Mothercare plc and
Pendragon plc. He qualified
as an accountant with Price
Waterhouse in 1981.
NON-EXECUTIVE
DIRECTOR
A N RI R
Pierre sits on the Audit,
Nomination, Risk and
Remuneration Committees.
Pierre founded The Phone
House in 1996, a large European
mobile phone retailer. Between
2005 and 2014, Pierre was
CEO and shareholder of
Micromania, the number one
video game retailer in France.
From 2011 to 2014, he was
Senior VP of GameStop
Europe to whom he had sold
Micromania. Other previous
non-executive directorships
include DIA, listed on the Madrid
Stock Exchange and part of Ibex,
and fashion retailer Desigual.
Pierre currently supports
and invests in rapid growth
companies in Europe and the
US and serves on the advisory
boards of Antwort Capital in
Luxembourg and DianaCapital
in Spain.
NON-EXECUTIVE
DIRECTOR
A RI R N
Shaun is Chairman of the Audit
and Risk Committees and
sits on the Remuneration and
Nomination Committees.
Shaun has extensive financial
experience across e-commerce
and retail. He is currently serving
as Chief Financial Officer at
Trainline plc and as a non-
executive director at AO World
plc where he is a member of
its Audit and Remuneration
Committees. Prior to joining
Trainline plc, he held the roles of
International Director at ASOS
and Chief Financial Officer for
Amazon Europe.
NON-EXECUTIVE
DIRECTOR
R A RI N
Iain is Chairman of the
Remuneration Committee
and sits on the Audit, Risk and
Nomination Committees.
Iain is the founder of Belerion
Capital, a specialist technology
and e-commerce company and
was an early investor in a number
of technology businesses,
including Asos, The Hut Group,
Eagle Eye Solutions, Anatwine
and Metapack.
Iain is a non-executive director
of the Hut Group, and also
AIM-listed software business
CentralNic. Prior to founding
Belerion Capital, Iain was a
partner of the William Currie
Group, a technology and
e-commerce private family
office.
50
51
Committee Key
A Audit Committee
N Nomination
Committee
R Remuneration
Committee
RI Risk Committee
Chairman
—
ANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC// GOVERNANCE CORPORATE GOVERNANCE REPORT
Mahmud
Kamani
EXECUTIVE CHAIRMAN
4 MAY 2021
As Group Executive Chairman it is my responsibility
to ensure that boohoo has an effective board and
corporate governance framework.
Following the publication of the Independent Review by Alison
Levitt QC, we made a commitment to adding further independent
experience, increasing oversight on matters of compliance and business
practices and adopting higher standards of corporate governance. We
have endeavoured to do this in a way that is transparent and provable
by our Agenda for Change, which will build a sustainable foundation
for the long-term success of the business and for the benefit of our
stakeholders.
The board has worked hard during the year to implement our Agenda
for Change. We recognise there is further work to be done and I
personally undertake that this will remain a key focus and priority
throughout 2021 and beyond. A summary of the considerable
improvements to our governance framework is detailed below.
INDEPENDENT OVERSIGHT
On 26 November 2020, the group announced the appointment of Sir
Brian Leveson PC to provide independent oversight of the Agenda for
Change and committed to publishing progress reports. In his reports,
Sir Brian Leveson acknowledges the pace the group is making towards
affecting change and these reports can be viewed in full on our group
website. The board also appointed KPMG as consultants to advise
and monitor the implementation and governance of the Agenda for
Change programme.
I’M PLEASED TO PRESENT
THIS YEAR’S CORPORATE
GOVERNANCE REPORT.
STRENGTHENING
GOVERNANCE WITH KEY
APPOINTMENTS
The board is committed to additional
expertise and independent challenge
through the appointment of non-executive
directors. Shaun McCabe was appointed
on 17 November 2020 as an independent
non-executive director and Chair of the
group's Audit and Risk Committees. Shaun’s
full biography can be found on page 51 of
this report.
We are also in the process of recruiting a
second independent non-executive director
experienced in dealing with environmental,
social and governance ('ESG') matters.
RISK MANAGEMENT
The board takes ultimate responsibility for the
effectiveness of risk management within the
group and acknowledges that it must satisfy
itself that the significant risks faced by the
group are being managed appropriately.
We have implemented a new governance
framework to ensure effective monitoring
and reporting of risks across the group going
forwards. We have also constituted a new risk
committee to enable better identification and
closer monitoring of risk at board level.
Further information on risk management can
be found on page 34 of this report.
EXECUTIVE
REMUNERATION
We have redesigned the executive directors’
remuneration policy to align the interests of
the executives with stakeholders, including
the introduction of performance conditions
linked to ESG criteria. This is an important
part of the board’s response to the findings of
the Independent Review and the successful
implementation of the corporate governance
aspects of our Agenda for Change
programme.
BOARD EVALUATION
In February 2021, the board participated in
an external evaluation of its performance to
assess and address any areas for development
through an independent lens. The aim of the
evaluation was to identify ways to enable
the board to achieve its full potential and
operate more effectively. Looking ahead,
I will commission a further externally
facilitated board evaluation by the end
of the next financial year to consider the
effectiveness of these changes, implemented
following the initial review.
BOARD EFFECTIVENESS
AND DEVELOPMENT
This year, as part of the board’s commitment
to ensuring the highest standards of
governance for the group, each board
member will attend training on the practical
application of the QCA Corporate
Governance Code and issues raised in the
Independent Review, including how to
operate as an effective board as well as latest
trends and developments in areas such as the
ESG agenda and risk management.
GOVERNANCE
FRAMEWORK
Under my leadership, it is the responsibility
of each member of the board to ensure that
we uphold the highest standards of corporate
governance. We embraced the Independent
Review as a critical, but fair, assessment
of our business practices and governance
framework. Whilst we remain on track to
deliver the Agenda for Change, and by doing
so improving our governance framework, we
recognise that it will take time to demonstrate
real change and rebuild stakeholder trust.
We will continue to focus on delivering
the Agenda for Change and maintaining
momentum to make boohoo a better and
more responsible business. We will be
transparent about the progress we’re making
through open and regular communication
with our stakeholders.
Mahmud Kamani
GROUP EXECUTIVE CHAIRMAN
CHAIRMAN'S GOVERNANCE STATEMENT
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ANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC// GOVERNANCE CORPORATE GOVERNANCE REPORT
CONTINUED
THE COMPANY HAS
ADOPTED THE 2018
QUOTED COMPANIES
ALLIANCE CORPORATE
GOVERNANCE CODE
('QCA CODE').
The board believes that the
QCA Code provides the most
appropriate framework of
governance arrangements for a
public listed company of boohoo’s
size and complexity.
The board acknowledges the importance of
the ten QCA Code principles and sets out
the group’s current approach below.
DELIVER GROWTH
1. Establish a strategy and business
model which promotes long-term value
for shareholders
The group owns the brands boohoo,
boohooMAN, PrettyLittleThing, Nasty Gal,
MissPap, Coast, Karen Millen, Warehouse,
Oasis, Debenhams, Dorothy Perkins, Burton
and Wallis and designs, sources, markets
and sells clothing, shoes, accessories and
beauty products targeted at 16-45 year-old
consumers in the UK and internationally.
The group has a strong presence in the
UK, US, Australia, France and Ireland, and
sells products to customers in almost every
country in the world.
The group’s business model is entirely
focussed on its customers and every element
of the model begins and ends with them – we
engage, we listen, we learn, we create and
repeat.
The group’s ambition and growth prospects
are underpinned by forecast growth in both
the domestic and international online fashion
retail markets, a highly efficient product-
sourcing model and a robust infrastructure
development plan. The group’s vision is to be
a leading e-commerce fashion market for
16-45 year-olds, which will be driven through
the following strategic priorities:
• Insight – creating a competitive customer
proposition
• Investment – delivering organic growth to
increase market share
• Innovation – driving customer engagement
• Integration – integrating new brands
A fuller explanation of how the strategy and
business model are executed can be found on
page 16.
2. Seek to understand and meet
shareholder needs and expectations
The board is informed of shareholder views
as part of the regular reporting process and
matters for discussion, and maintains an
active dialogue with its shareholders through
a planned programme of investor relations.
This activity is a keystone of boohoo’s
corporate communications programme and is
headed by the Executive Board, supported by
an Investor Relations team and the Company
Secretary. The group’s non-executive Deputy
Chairman (who is also Senior Independent
Director) acts as an additional link between
the shareholders and the group’s executive
directors.
The programme includes formal presentations
of the group’s full year and interim results
and meetings between institutional investors,
analysts and senior management on a
regular basis. Regular communication with
shareholders also takes place through the
group’s annual and interim report and via the
group website (www.boohooplc.com), which
contains up-to-date information on the
group’s activities.
The Chairman of the Remuneration
Committee has actively engaged and
consulted with shareholders on major changes
to the remuneration policy during the year.
The board recognises that the annual general
meeting is an important opportunity for
communication with both institutional and
private shareholders.
There is also a designated email address for
shareholder liaison – investorrelations@
boohoo.com – and all contact details are
included on the investor relations website.
3. Take into account wider stakeholder
and social responsibilities and their
implications for long-term success
The board recognises the importance of
maintaining strong relationships with its
stakeholders in order to create sustainable
long-term value, and the board encourages
active dialogue and transparency with all its
stakeholder groups.
Further information on stakeholder
engagement can be found on page 64.
The board believes that modern slavery
is a significant global issue presenting a
challenge for businesses worldwide and
has committed to continually reviewing its
practices to combat slavery. The board has a
zero-tolerance approach to modern slavery
and is committed to ensuring that its group
companies and supply chain acts ethically
and with integrity.
Our Modern Slavery Statement can be found
on the group’s website. Further information
on the Agenda for Change and our Supply
Chain can be found on page 20.
4. Embed effective risk management,
considering both opportunities and
threats, throughout the organisation
The board has overall responsibility for the
group’s systems of internal control and
risk management and for reviewing the
effectiveness of those systems. Such systems
are designed to manage rather than eliminate
the risk of failure to achieve business
objectives. Any system can only provide
reasonable and not absolute assurance against
material misstatement or loss.
The board confirms that there are new
procedures for identifying, evaluating and
managing significant risks faced by the
group, and will review these formally with
management before each financial year end
(as well as the ongoing review of risks which
emerge throughout the year).
The board has implemented a new internal
risk management procedure to identify, with
relevant management, the major business
risks facing the group and to put in place
appropriate policies and procedures to manage
those risks. Internal and external risks, which
are assessed on a continual basis, may be
associated with a variety of internal or external
sources, including control breakdowns,
disruption in information systems,
competition, inadequate financing, poor
business performance, natural catastrophe
and regulatory requirements. These involve
a process of control, self-assessment and
reporting that will be established to provide a
documented trail of accountability, which will
be reported to the board.
The newly constituted Executive Risk Group
reports on its review of the risks and how
they are managed to both the board and
Risk Committee, whose role it is to review
the key risks inherent in the business and
the systems of control necessary to manage
those risks. The Executive Risk Group, which
includes the CEO and CFO, reports to the
Risk Committee and provides independent
assurance over risks and internal controls.
The Risk Committee presents its findings to
the board as appropriate. The Executive Risk
Group also reports to the Risk Committee on
major changes in the business and external
environment which affect significant risks.
Where areas for improvement in the systems
are identified, the board considers the
recommendations made by the Executive
Risk Group and the Risk Committee.
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CONTINUED
MAINTAIN A DYNAMIC
MANAGEMENT
FRAMEWORK
5. Maintain the board as a well-
functioning, balanced team led by the
chair
The board currently comprises four executive
directors and four non-executive directors.
The board has an Executive Chairman and
a Non-executive Deputy Chairman and
intends to recruit a further independent non-
executive director to maintain the balance
on the board in favour of non-executive
directors. Further details of the governance
structure are set out at Principle 9.
The board as a whole is collectively responsible
for the success of the boohoo group and
provides entrepreneurial leadership of the
group within the framework of effective
controls, which enable risk to be assessed
and managed. It sets out the group’s values
and standards and ensures that its obligations
to shareholders and other stakeholders are
understood and met.
Guidelines are in place concerning the
content, presentation and timely delivery
of papers by management to directors for
each board meeting so that the directors
have enough information to be properly
briefed. Where issues arise at board meetings,
the Chairman ensures that all directors
are properly briefed and, when necessary,
appropriate further enquiries are made.
The current division of responsibilities
between the Chairman and Chief Executive
and the Chairman and the Deputy Chairman
have each been agreed by the board.
It is intended that the board meets at least
eight times a year, the Audit Committee
at least three times a year, the Nomination
Committee at least once a year, the
Remuneration Committee at least twice a year
and the Risk Committee four times per year.
6. Ensure that, between them, the
directors have the necessary up-to-date
experience, skills and capabilities
The directors’ biographies appear on pages
50 and 51.
ATTENDANCE AT BOARD AND COMMITTEE MEETINGS
The table below shows the attendance of individual directors at board meetings and committee meetings of which they are members during the
year. As at 4 May 2021, the board has met twice since the end of the financial year.
All directors have access to the advice and services of the Chief Financial Officer and Company Secretary, who are responsible for ensuring that
the board procedures are followed and that applicable rules and regulations are complied with. In addition, procedures are in place to enable the
directors to obtain independent professional advice in the furtherance of their duties, if necessary, at the company’s expense.
Board
Audit
Committee
Remuneration
Committee
Nomination
Committee
Risk
Committee
Eligible
to attend Attended
Eligible
to attend Attended
Eligible
to attend Attended
Eligible
to attend Attended
Eligible
to attend Attended
Mahmud Kamani
Carol Kane
John Lyttle
Neil Catto
Pierre Cuilleret
Shaun McCabe
Iain McDonald
Sara Murray
Brian Small
9
9
9
9
9
3
9
1
9
9
9
9
9
9
3
9
1
9
-
-
-
-
3
1
3
-
3
-
-
-
-
3
1
3
-
3
-
-
-
-
2
2
-
-
2
-
-
-
-
4
2
4
1
3
-
-
-
-
4
2
4
1
3
-
-
-
-
2
2
2
-
2
-
-
-
-
2
2
2
-
2
-
-
-
-
2
2
2
-
2
56
The enlarged and strengthened board
structure has substantially enhanced the
bandwidth to formulate, plan and begin to
execute a multi-brand strategy. The structure
enables the directors to use their extensive
commercial experience in developing the
wider group and its strategy for the benefit of
the company’s stakeholders.
Brian Small has been appointed as Deputy
Chairman to lead the independent non-
executive directors on matters where
independence is required.
In summary, this structure enables the
retention of key skill-sets within the company
whilst facilitating the enhancement of the
executive director base and the continuing
development of the board and committee
membership otherwise in line with the QCA
Code's key principles.
There are four board committees – Audit,
Nomination, Remuneration and Risk
Committees on the following pages.
BUILD TRUST
10. Communicate how the company
is governed and is performing by
maintaining a dialogue with shareholders
and other relevant stakeholders
The AGM is an important opportunity for
communication with both institutional and
private shareholders and also involves a short
statement on the company’s latest trading
position. Shareholders may ask questions
of the full board, including the chairs of the
Audit, Remuneration, Nomination and Risk
Committees.
The result of the proxy votes submitted by
shareholders in respect of each resolution will
be available on the company’s website or on
request to the Company Secretary.
As outlined at principle 2, the company
maintains an active dialogue with its
shareholders through a planned programme of
investor relations.
The board has a blend of different experience
and backgrounds. Each of Brian Small, Pierre
Cuilleret, Iain McDonald, and Shaun McCabe
were, prior to appointment, considered to be
“independent” non-executive directors under
the criteria identified in the QCA Code.
The board has access to independent advice,
in particular from boohoo’s Nominated
Adviser (Zeus Capital), TLT LLP (from a legal
perspective), and our auditor PKF Littlejohn
LLP. During the year, the Remuneration
Committee took advice from KPMG, Korn
Ferry and Paul Hastings LLP.
The board is kept informed on an ongoing
basis by the Company Secretary about their
duties and any update in relation to legal
and governance requirements for the group.
Training is provided to the board each year
regarding their duties.
7. Evaluate board performance based
on clear and relevant objectives, seeking
continuous improvement
The most recent external evaluation of
the board (including sub-committees and
individual board members) was completed
in early 2021 by Korn Ferry. The evaluation
confirmed that the board continued to
operate effectively.
The evaluation was structured around seven
key areas, each addressed through a series of
critical questions that all directors responded
to through an online survey. The survey was
supported by telephone interviews on specific
areas for further questioning.
The key recommendations from the external
evaluation include:-
a. Clearer succession plans across the
business and its brands;
b. A regular review of the key roles and
organisation structure to ensure that
they remain appropriate as the business
continues to scale;
c. Consideration of the most appropriate
method of engaging non-executive
directors in strategic opportunities so
that they are fully utilised in the strategic
decision-making process; and
d. Review the extent to which cultural change
is effectively permeating throughout the
organisation with the newly appointed
Chief People Officer.
boohoo’s wider succession plan is the role and
responsibility of the Nomination Committee,
to ensure that the board is comprised of
appropriately skilled and capable individuals.
The Nomination Committee chair will identify
gaps in the skill set required to oversee the
group’s development, and will seek to recruit
suitably qualified individuals.
8. Promote a corporate culture that is
based on ethical values and behaviours
boohoo is guided by its values of Passion,
Agility, Creativity and Teamwork. The
company prides itself on its inclusive culture
and team spirit, and in operating in a fair and
sustainable manner.
boohoo takes the welfare of all its employees
extremely seriously and continues to invest
in its people, who are encouraged to develop
and grow with the business. boohoo strives to
continually improve the working environment
and benefits of its people. This is done by
listening to and actioning feedback given
through the open Your Voice sessions,
and internal HR channels, with immediate
attention paid to any concerns raised. boohoo
is continually improving the support provided
to managers to help ensure they are leading,
and ensuring the people in our organisation
feel valued and are listened to, shown in the
significant investment made to upgrade all
the facilities and working environment.
Further information can be found on pages
48 to 49 of this report.
9. Maintain governance structures
and processes that are fit for purpose
and support good decision-making
by the board
The board has a formal schedule of matters
reserved to it for decision, including approval
of strategic plans and the annual operating
plan, significant investments and capital
projects, treasury and risk management
policies. All directors take decisions
objectively in the interests of the group.
Further details of the roles and responsibilities
of the directors is set out at principle 6.
boohoo continues to look at how to best
improve its corporate governance; and as a
fast growing company, boohoo is constantly
looking for ways to strengthen its board,
whilst ensuring that the business is led by
people with the right experience, passion
and enthusiasm. In order to ensure there are
enough independent directors to maintain
the balance of the board in favour of non-
executive directors, the company will be
appointing one more. The search process to
recruit a further independent non-executive
director is ongoing.
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CONTINUED
THERE ARE FOUR
BOARD COMMITTEES –
AUDIT, NOMINATION,
REMUNERATION AND RISK
COMMITTEES. THE ROLES
AND RESPONSIBILITIES OF
EACH ARE DETAILED HERE.
AUDIT COMMITTEE
01
Following his appointment in November
2020, Shaun McCabe is currently the
Chairman of the Audit Committee, which
has primary responsibility for monitoring the
quality of internal controls, ensuring that
the financial performance of the company
is properly measured and reported on and
reviewing reports from the company’s auditors
relating to the company’s accounting and
internal controls, in all cases having due regard
to the interests of shareholders. Brian Small,
Iain McDonald and Pierre Cuilleret are the
other members of the Audit Committee.
The Audit Committee meets three times
a year and also after the year end. Matters
considered at these meetings include:
• reviewing and approving the annual report
and financial statements for the year and
half-year end;
• discussion with the external auditors to
confirm their independence and scope for
audit work;
• considering the reports from the external
auditors identifying any accounting or
judgemental issues requiring the Board’s
attention and the auditors’ assessment of
internal controls;
• reviewing and approving the group’s tax
strategy;
• considering the work of the corporate
social responsibility and supplier
conformance functions;
• reviewing compliance with minimum pay
legislation and fairness at work procedures;
and
• considering the adequacy of the whistle-
blowing facility, the anti-bribery training
and monitoring and data protection policy
and procedures.
The Audit Committee Chairman maintains
dialogue with the auditors outside of the
scheduled meetings and meets with the
auditors without the presence of executive
directors and members of the finance team.
The group’s internal audit function is overseen
by and reports independently to the Audit
Committee.
The Audit Committee reports to the board
on the effectiveness, value and independence
of the auditors on an annual basis. The
board is satisfied with the independence
and objectivity of PKF Littlejohn LLP who,
following a competitive tender process,
replaced PricewaterhouseCoopers as the
company’s auditor on 21 December 2020.
RISK COMMITTEE
02
The chairman of the Risk Committee is
Shaun McCabe. This committee reviews
management’s recommendations on risk
management, particularly in relation to
the structure and implementation of the
risk strategy, system of governance, risk
management framework, the quality and
effectiveness of the related internal controls
and reporting processes, risk appetite limits
and exposures, and the overall risk profile of
the business. The Risk Committee meets at
least four times a year. Brian Small, Pierre
Cuilleret and Iain McDonald are the other
members of the Risk Committee.
The responsibilities and activities of the Risk
Committee are set out in more detail in the
Risk Management report on page 31.
NOMINATION COMMITTEE
03
Brian Small is the chairman of the
Nomination Committee which identifies
and nominates, for the approval of the
board, candidates to fill board vacancies as
and when they arise. The committee also
considers matters of succession planning.
The Nomination Committee meets at least
once a year and otherwise as required. Pierre
Cuilleret, Iain McDonald and Shaun McCabe
are the other members of the Nomination
Committee.
REMUNERATION COMMITTEE
04
The chairman of the Remuneration
Committee is Iain McDonald. This
committee reviews the performance of the
executive directors and determines their
terms and conditions of service, including
their remuneration and the grant of share
awards, having due regard to the interests of
shareholders. The Remuneration Committee
meets at least twice a year. Pierre Cuilleret,
Shaun McCabe and Brian Small are the other
members of the Remuneration Committee.
The responsibilities and activities of the
Remuneration Committee are set out in more
detail in the Directors’ Remuneration Report
on page 66.
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ANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC// GOVERNANCE DIRECTORS’ REPORT
THE DIRECTORS PRESENT
THEIR DIRECTORS’ REPORT AND
ANNUAL REPORT AND FINANCIAL
STATEMENTS FOR THE YEAR
ENDED 28 FEBRUARY 2021.
REGISTERED OFFICE
The registered office is 12 Castle Street, St
Helier, Jersey, JE2 3RT.
PRINCIPAL ACTIVITIES
The principal activity of the company is that
of a holding company. The principal activity
of its subsidiary undertakings is that of online
clothing retailers.
BUSINESS REVIEW
The directors are required by Company Law
to set out a fair review of the business, its
position at the year end and a description of
the principal risks and uncertainties facing the
group and to prepare the financial statements
in accordance with applicable law and
International Financial Reporting Standards
(IFRS) as adopted by the European Union.
The review of the business on pages 26 to 33
provides this review and financial position and
these are incorporated by cross-reference
and form part of this report. The corporate
governance report on pages 52 to 59 should
be read as forming part of the directors’ report.
RESULTS AND DIVIDENDS
Group profit after tax for the year to 28
February 2021 was £93.4 million (2020:
£72.9 million). The audited financial
statements for the year for the group and
company are set out on pages 90 to 118.
The directors do not recommend the
payment of a dividend (2020: no dividend) so
that cash is retained in the group for capital
expenditure projects that are required for the
rapid growth and efficiency improvements
of the business and for suitable business
acquisitions.
DIRECTORS AND
COMPANY SECRETARY
The biographies of the directors who held
office throughout the year and subsequently
are set out on pages 50 to 51. The Company
Secretary is Thomas Kershaw.
The interests of the directors in the shares
of the company and their share options and
awards are detailed in the remuneration
report on page 81.
The company maintains directors’ and officers’ liability insurance, which gives appropriate cover
for any legal action brought against the directors. The company has also provided an indemnity
for its directors, which is a qualifying third-party indemnity provision for the purposes of section
234 of the Companies Act 2006 and was in place during the year and up to the date of approval
of the financial statements.
SHARE CAPITAL AND RESTRICTIONS ON SALE OF SHARES
The authorised and issued share capital of the company and details of shares issued during the
year are shown in note 23. The issued share capital as at 28 February 2021 was 1,263,255,457
shares of 1p.
Powers related to the issue and buy-back of the company’s shares are included in the company’s
articles of association and such authorities are renewed annually by shareholders at the annual
general meeting.
SHARE INCENTIVE PLAN TRUST
The Share Incentive Plan ('SIP') trust is used by the company to provide free shares as
share incentives to its employees. The trustees are Link Asset Services, an independent UK
professional body. The SIP trustee buys shares and holds them in trust for the benefit of
employees who remain with the company for three years. The trust held 22.6 million shares as
at 28 February 2021. The trustees may vote on the beneficiaries’ shares in accordance with the
beneficiaries’ instructions.
SUBSTANTIAL SHAREHOLDERS
Shareholders holding more than 3% of the company’s shares as at 31 March 2021:
Shareholder
Number of ordinary shares held
Percentage held
Mahmud Kamani*
Jupiter Asset Management
T Rowe Price Associates
Invesco Advisers Inc
Rabia Kamani*
Hargreaves Lansdown
152,979,880
114,054,515
82,165,541
76,328,033
56,944,782
40,932,989
12.53%
9.04%
6.51%
6.05%
4.51%
3.25%
Shareholders marked as * are considered to be a concert party.
ASSESSMENT OF PROSPECTS AND VIABILITY
The group’s business activities together with the factors that are likely to affect the future
development, performance, position and risks of the group are set out in the review of the
business on pages 26 to 33.
The continued impact of the COVID-19 crisis on the group is not expected to change materially
over the next year, provided that governments’ actions in controlling the virus continue to be
effective. Trading during the year to February 2021 has shown that online sales have been resilient
during lockdowns in many countries. The group has substantial cash resources and undrawn credit
facilities sufficient to continue solvent trading in the face of an unforeseen downturn in demand.
As of the date of this report, we are continuing to operate, with the warehouses functioning under
government-compliant safe working conditions and many office staff working from home.
The directors considered the prospects of the group through an analysis of the markets for the
group’s product offering online in the UK and overseas and concluded that potential growth rates
remain strong as the markets continue to develop as more customers become comfortable with
online shopping. This provides great opportunities for future expansion. There is a diverse supply
chain with no key dependencies, enabling sourcing to be dynamic. Major expense categories relate
to carriage and marketing services, which are widely diversified amongst suppliers. The business
model affords a great deal of flexibility in responding to demand and economic changes: the wide
range of products and relatively low buy quantities reduce inventory risk; a large customer base
across many countries reduces specific economic and fashion dependencies; retail customers
pay at the time of order with a small risk of default; and the high marketing expenditure is very
controllable over a short time period.
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ANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC// GOVERNANCE DIRECTORS’ REPORT
CONTINUED
The group operates a regular budgeting,
forecasting and long-range planning cycle,
which is integrated with strategic plans and
objectives. This planning cycle, in which the
board is substantively involved, ensures,
as far as is possible, that the profitability,
cash flow and capital requirements of the
business are sufficient to ensure its ongoing
viability. Annual budgets, against which
performance is compared, are prepared in
advance of the next financial year. A cadence
of weekly, monthly and quarterly forecasts
is operated to monitor, control and report
on performance in the current financial
year. These forecasts form the basis upon
which the board satisfies its requirements to
update stakeholders with relevant financial
performance and prospects. Once a year,
three-year financial plans are prepared
to assess the medium and longer-term
prospects of the group and its finance
requirements, based on its strategic plans.
The directors have reviewed the group’s
profitability in the three-year plans, the
annual budgets and medium-term forecasts,
including assumptions concerning capital
expenditure and expenditure commitments
and their impact on cash flow. The directors
consider that a three-year plan is the
appropriate period to project financial plans
with a reasonable level of certainty in line with
their current strategic objectives.
Based on their assessment of prospects
and viability, and having taken into account
a worst-case scenario arising from a
continuation of the COVID-19 pandemic,
the directors confirm that they have a
reasonable expectation that the group will
be able to continue in operation and meet
its liabilities as they fall due in the three-year
period ending February 2024.
GOING CONCERN
Having considered the prospects and viability
as detailed above, the directors considered
it appropriate to prepare the financial
statements on the going concern basis, as
explained in the basis of preparation in note
1 to the financial statements.
FINANCIAL RISK
MANAGEMENT
Financial risk management is detailed in note
27 to the financial statements.
Our impacts on, and engagement with, our
stakeholder groups is considered further
within the group’s Sustainability Strategy on
pages 39 to 49.
HEALTH AND SAFETY
The group is committed to providing a safe
place of work for employees. Group policies
are reviewed on a regular basis to ensure that
policies regarding training, risk assessment,
safe working and accident management are
appropriate. There are designated officers
responsible for health and safety and issues
are reported at each board and executive
meeting.
GREENHOUSE GAS
EMISSIONS
As a group, boohoo recognises that its global
operations have an environmental impact
and we have a responsibility to understand,
manage and minimise such impacts. That is
why we have chosen to set our goal aligned
with science-based targets and reduce our
carbon emissions year-on-year in line with
the Paris Agreement.
We are also aware of the UK reporting
obligations under The Companies (Directors’
Report) and Limited Liability Partnerships
(Energy and Carbon Report) Regulations
2018, which the board is following voluntarily
as a Jersey registered company. As such,
this year we have enhanced our energy
and carbon reporting to meet these
new requirements and to increase the
transparency with which we communicate
our environmental impact to our
stakeholders. The section on environment,
social responsibility and governance on pages
39 to 49 is incorporated into this report
by cross-reference.
62
63
STATEMENT ON
DISCLOSURE OF
INFORMATION TO
AUDITORS
The directors who held office at the date
of approval of this directors’ report confirm
that, so far as they are each aware, there
is no relevant audit information of which
the company’s auditors are unaware and
each director has taken all the steps that
he/she ought to have taken as a director
to make himself/herself aware of any
relevant audit information and to establish
that the company’s auditors are aware of
that information.
INDEPENDENT AUDITORS
The auditors, PKF Littlejohn LLP, have
indicated their willingness to continue
in office and a resolution that they be
reappointed will be proposed at the
annual general meeting.
ANNUAL GENERAL
MEETING
Further details of the format and date
of the annual general meeting will be
communicated to shareholders in due
course and in the usual way and the notice
of the meeting will be available to view on
the group’s website www.boohooplc.com at
least 21 days before the meeting.
ANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC// GOVERNANCE SECTION 172 STATEMENT:
BOARD ENGAGEMENT WITH STAKEHOLDERS
"A fresh and proactive approach to stakeholder engagement
to create mutually positive opportunities and outcomes."
AN AGENDA FOR CHANGE
The significant and clearly unacceptable supply chain issues identified in Leicester
have had a marked impact on all our stakeholders. The board recognises that a fresh
and proactive approach to stakeholder engagement is required to create mutually
positive opportunities and outcomes for all our stakeholders, and to promote long-
term sustainability and success.
How we have responded to protect the garment workers, suppliers, our business and
manage the expectations of all our stakeholders is set out in full on pages 20 to 23.
THE BOARD'S APPROACH
The board has voluntarily chosen to
follow the section 172 guidance from
UK law, although this is not required
under Jersey regulations. The board
recognises the importance of maintaining
strong relationships with our stakeholders
in order to create sustainable long-
term value, and encourages active
dialogue and transparency with all
its stakeholder groups.
Speaking with those we work with,
deliver products for and who invest their
money, is essential to running a successful
business. We take time to engage with, and
listen to, the views of our stakeholders in
order to shape our decision-making and to
continue improving the way we do things.
The board exercises skill and judgement
in good faith, having regard to the likely
consequences of their decisions, to
promote actions that lead to the long-
term success of the group.
When developing strategy, the board has
regard to financial considerations as well
as the need to engage with a wide range of
stakeholders. The board ensures that these
relationships are managed effectively
and that there is sufficient visibility of
stakeholder engagement activities in the
boardroom to inform decision-making and
delivery of strategy. Board materials and
discussions therefore seek to appropriately
consider the impact and views of key
stakeholder groups whilst always ensuring
the need to promote the success of the
group for the benefit of its members as
a whole. You can read more about board
decision-making on pages 52 to 59.
As well as acknowledging a responsibility
towards society and the environment,
the board recognises that effective
engagement with key stakeholders is a key
component of long-term sustainability
and success. The board considers that the
interests of the group and its shareholders
are aligned in seeking sustainable value
creation over the longer term through the
group’s operations.
Consideration of the impact that the group
and its operations has on all stakeholders is
central to the culture and values of boohoo
– more information about our values and
culture can be found on page 9.
HIGH STANDARDS OF
BUSINESS CONDUCT
The way we work and boohoo’s
expectations for conduct and behaviour
are set out in our group policies. These
policies cover areas such as environmental
protection, animal welfare, employee and
supplier conduct and human rights and are
available on our website.
The board recognises the importance of
corporate governance and a description
of how the group has adopted the QCA
Corporate Governance Code 2018 can
be found on pages 54 to 57.
ACTING FAIRLY
BETWEEN DIFFERENT
STAKEHOLDERS OF
THE GROUP
As a board of directors, we recognise our
shareholders as an important stakeholder
group and treat them fairly and equally, so
they too may benefit from the growth of
the business and the value we create.
Here we have mapped out our six key
stakeholder groups, the material issues
that they have raised throughout the year
and how the board has responded.
Stakeholders
What they care about
How the board engaged during the year
Working environment
Culture
Learning and development
Pay and benefits
Wellbeing
Payment
Transparency
Human rights
Material sourcing
Future business growth
Product quality,
design and safety
Affordable
On-trend fashion
Sustainability
Customer service
Sustainability
Climate change
Charity
Support
E
M
P
L
O
Y
E
E
S
S
U
P
P
L
I
E
R
S
C
U
S
T
O
M
E
R
S
E
N
V
I
R
O
N
M
E
N
T
C
O
M
M
U
N
I
T
Y
&
W
O
R
K
E
R
S
G
A
R
M
E
N
T
Working conditions
Safety
Communication
Living wage
Transparency
Open communication
ESG management
Financial performance
S
H
A
R
E
H
O
L
D
E
R
S
• Engaged with external experts to run wellbeing and diversity and inclusion
workshops.
• Created a new internal engagement strategy and an employee-led
diversity and inclusion steering group
• Launched a new internal intranet site called boohooforyou and employee
Instagram page
• Introduced regular global town hall meetings for the board and
other senior management to engage with employees about key
issues
• Engaged employees in developing our sustainability strategy
• Enforced industry-leading payment terms to ensure suppliers' cash flow
• Visited suppliers whenever practical (COVID-19 safety
is robust
protocols adhered to)
• Hosted a virtual conference for all UK manufacturing suppliers, sharing
strategies and information on ethical and product compliance, sourcing,
sustainability, Thurmaston Lane and the Agenda for Change.
• Reviewed monthly reports on customer brand perceptions, including
quality, value, trends, and CSR measures, including sustainability.
• Interaction with customers on WhatsApp and social media
channels
• Proactively communicated to around 2 million customers throughout the
• Engaged experts in developing our sustainability strategy
year about delays relating to weather, COVID-19 or carrier failures.
• Established a cross-functional steering group to lead the creation of the
• Engaged experts, customers and employees in developing our
group’s new sustainability strategy
sustainability strategy
• Actively contributed to Waste Resources Action Programme’s Textiles
2030 initiative, the sustainable apparel coalition and the microfibre
consortium
• Gave evidence to the BEIS committee session on sourcing from the
Xinjiang Province of China and the Environmental Audit Committee
session on fashion
• Established the Garment and Textile Workers’ Trust with the aim of
delivering a package of services for garment workers in the city. This will
include community initiatives, such as outreach workers and educational
opportunities, such as scholarships.
• Investor roadshows in May and September following annual and half-year
results
• Attended virtual investor conferences through a series of
one-to-one and group meetings
• Extensive shareholder engagement as part of the Independent Review of
the group’s supply chain
• Reviewed value creation opportunities for the group through: a fund-
raise in May 2020, acquisitions of the Oasis and Warehouse brands as
well as selected brands from the Arcadia Group, and strategic purchase
of Debenhams
• Engaged with key campaigns such as the changing markets
campaign on responsible viscose sourcing
• Considered value-creation potential for shareholders through
an early purchase of the remaining 34% minority interest in
PrettyLittleThing.com Limited
• Conducted non-executive director roadshows on governance-
related matters, directly engaging with approximately 40% of
independent shareholders
• Extensive engagement with shareholder representative group,
the Investor Forum
A
N
D
N
G
O
s
G
O
V
E
R
N
M
E
N
T
Compliance with laws
and workers’ rights
• Volunteered to appear in front of three House of Commons select
• Hosted consultation workshops for local stakeholders
committees in 2020 to illustrate the approach that the group is taking on
particular issues
• Proactively engaged with government, local government, NGOs,
charities and local stakeholders, sharing regular updates on Agenda for
Change.
• Engaged with broad range of government stakeholders and
APPG on Textiles to provide an update on our sustainability
strategy
• One-to-one meetings between CEO and local MPs,
Mayor of Manchester and NGO leaders
On behalf of the board
John Lyttle
4 May 2021
Neil Catto
64
65
ANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC// GOVERNANCE
DIRECTORS’ REMUNERATION REPORT
ANNUAL STATEMENT BY THE CHAIRMAN OF THE REMUNERATION COMMITTEE
Dear shareholder,
I am pleased to present the report of the
Remuneration Committee on behalf of the
directors. This directors’ remuneration report
will be put to an advisory shareholder vote at
the forthcoming annual general meeting.
REMUNERATION POLICY
The Remuneration Committee is committed
to complying with the principles of good
corporate governance in relation to the
design of the directors’ remuneration policy.
As such, our policy takes account of the UK
Corporate Governance Code and the QCA
Corporate Governance Code (against which
the company formally reports compliance).
The Committee also considers other best
practice guidance (for example, the QCA
Remuneration Committee Guide and the
Investment Association’s Principles of
Remuneration), as far as is appropriate to the
group’s management structure, size and listing.
We also endeavour in this report to provide
information on the remuneration policy
and its implementation in a manner broadly
consistent with the reporting regulations as
they apply to Premium Listed companies.
Our approach to remuneration is governed
by our directors’ remuneration policy. The
primary objectives of the policy continue to
be to attract and retain the highest calibre
directors and to design remuneration which
promotes the long-term success of the
group. In order to put these objectives
into effect, we provide the opportunity
for executives to receive short-term and
long-term variable pay, dependent upon
appropriate performance conditions, ensuring
a clear link is established between shareholder
value creation and the pay of our directors.
Each year, the Committee reviews overall
levels of pay and the operation of the
incentive arrangements for executive
directors to ensure they remain appropriate
in light of the current business strategy and
the interests of shareholders. This has been
a particular area of focus for the Committee
during the year under review in light of the
heightened level of scrutiny of the business,
the size of the vote against the directors’
remuneration report at the 2020 AGM,
feedback from leading shareholders and our
desire to ensure that, going forwards, there
is the strongest possible alignment between
executive pay and the long-term interests
of all stakeholders. After a detailed review,
we have agreed a number of changes to
directors’ remuneration, which are explained
in more detail below. We discussed these
changes with major shareholders earlier this
year and I was pleased to report that we
received overwhelmingly positive feedback.
PERFORMANCE AND
REWARD FOR THE YEAR
ENDED 28 FEBRUARY 2021
For the year ended 28 February 2021, in
relation to the annual bonus plan, the group
achieved outstanding revenue and Adjusted
EBITDA growth above the top end of the
stretching target ranges, which are disclosed
on page 77. As a result, the executive
directors received 100% of their bonus
potential, which the Committee believes
was an excellent result in what have been
challenging business conditions.
We considered the financial performance
in the context of the wider supply chain and
governance issues which occurred during the
course of the year and noted the outstanding
response of the management team in seeking
to resolve the complex and difficult problems
that have been the subject of much debate
internally and externally. Although there is
still some way to go, progress to date has
been excellent and the Committee does
not believe that reducing bonus outcomes
would be necessary or desirable. Bonuses
have also been paid to employees throughout
the company to recognise the very strong
level of performance over the year and
we have made a one-off share award to
all full-time employees worth £3,600 per
person, in recognition of their outstanding
commitment and performance in what has
been an exceptionally challenging year from
an operating perspective.
MANAGEMENT
INCENTIVE PLAN
A new, one-off, long-term incentive plan
for directors and senior managers, the
Management Incentive Plan ('MIP') was
introduced in June 2020 to align long-
term growth in the share price and market
capitalisation to executive reward. Participants
include the founders of the business, Mahmud
Kamani and Carol Kane, neither of whom
have participated in any long-term incentive
scheme since the flotation in 2014, despite
being integral to the success of the group since
its inception. The MIP is broad-based and
includes 13 other participants, including the
CFO, Neil Catto, and key contributors below
board level. The ultimate value of MIP awards
will depend on the growth of the business over
the three years to June 2023, with the market
66
capitalisation of the company needing to reach
£6.295 billion (equal to a compound annual
growth rate of 11%) by June 2023 before any
value is realised. A maximum amount of £150
million may be shared by all participants if
market capitalisation is £7.554 billion (equal
to a CAGR of 18%) or higher. The Committee
believes that the targets, required to be
achieved in just over two years’ time from now,
are exceptionally demanding.
The MIP is a central part of the remuneration
arrangements for our leading executives over
the mediumterm and is intended to drive
further growth in the business. It is consistent
with our performance-based culture and has
many similarities with the structure of the
Growth Share Plan introduced for John Lyttle
in 2019, thus ensuring a broadly consistent
approach to long-term incentives across the
executive director and senior management
team. Although participants have the ability
to earn considerable amounts under the
MIP, this would be a very small fraction of
the overall returns delivered to shareholders
and will only become payable if boohoo
achieves exceptional growth for the benefit
of all shareholders.
The MIP was implemented after it was
announced to the market and, as permitted
by the AIM Rules, there was no requirement
to seek shareholder approval for the plan. As
announced at the time, the Committee took
the view that the interests of shareholders
would be best served by granting the awards
immediately without recourse to a shareholder
vote, which ensured participants were
immediately incentivised to deliver stretching
share price growth as the group executes its
multi-brand online strategy. We subsequently
received a number of comments about this
decision and, with hindsight, we recognise that
it would have been more consistent with our
philosophy of transparency and shareholder
openness to seek shareholder approval before
implementing the plan.
We have also reviewed the MIP in light of the
supply chain issues raised over the course
of the financial year. Whilst we ultimately
believe that the full resolution (or otherwise)
of these issues will be reflected in long-term
share price performance (and thus have an
impact on the value of awards) we have also
agreed with participants to add a new non-
financial performance condition. Under this
new target, the Committee must be satisfied
that the Agenda for Change programme
has been successfully implemented over the
three-year performance period before the
vesting of any MIP awards. The Agenda for
Change programme is centred around the
implementation of the recommendations
from the Alison Levitt Independent Review.
These recommendations are a set of clear,
measureable and focused targets, which
have been published in full. The level of
programme oversight provided by KPMG,
together with the overall programme
oversight provided by Sir Brian Leveson,
will ensure that performance against these
recommendations and the wider programme
is constantly monitored and reported on
by independent third parties. In line with its
wider commitment to the highest standards
of transparency, the group has committed to
publishing each of Sir Brian Leveson’s reports,
in full. Through the Agenda for Change
programme, the Committee has a clear
structure in place to assess performance. In
the event of the Committee determining that
the Agenda for Change programme has not
been successfully implemented in full, we will
have the ability to reduce the level of vesting
of awards, irrespective of the share price
growth achieved over the performance period.
In addition, John Lyttle has agreed to a similar
amendment to his award under the Growth
Share Plan, meaning that he will only benefit
from his award to the extent that there is
both sufficient growth in boohoo’s market
capitalisation and a successful implementation
of Agenda for Change.
REMUNERATION
FOR THE YEAR ENDING
28 FEBRUARY 2022
We have also reflected on how we should
implement the remuneration policy for the
financial year ending 28 February 2022,
taking into account the events of the
past year and the views of major boohoo
shareholders. These changes are as follows:
• Basic salaries for the executive directors
will increase by 3% with effect from May
2021, in line with the average increase for
the workforce as a whole.
• Maximum bonus opportunity will continue
to be up to 100% of salary for Neil Catto,
up to 150% for John Lyttle and up to
200% for Mahmud Kamani and Carol
Kane. In line with common practice for
companies of a similar size to boohoo, we
will introduce an equity deferral element
such that a minimum of one-third of any
bonus earned must be invested in shares
and held for at least two years.
• We will supplement the current financial
performance conditions for the annual
bonus with a mix of ESG and strategic
non-financial targets. As a result, 45% of
the 2022 bonus will be based on EBITDA,
30% on revenue, 15% on continued progress
on the 2022 Agenda for Change milestones
and 10% on the successful integration of the
newly-acquired brands.
• The Remuneration Committee will also have
the discretion to scale back the entire bonus
if it is considered that the Agenda for Change
has not been implemented successfully
over the financial year. These changes are
designed to ensure that the management
team remains focused both on growing the
business and continuing to make progress on
addressing the supply chain issues.
• No awards will be made to the executive
directors under the Long-Term Incentive
Plan ('LTIP') in the 2022 financial year, to
ensure full focus on the targets which must
be met under the MIP and the Growth
Share Plan. To date, Neil Catto has been
the only director to receive standard awards
under the LTIP, which vest subject to
stretching three-year performance targets.
He received an award during the year ended
28 February 2021 as part of his standard
remuneration package. Whilst executives will
not receive an award in the 2022 financial
year, we will review the position at a later
date with regards to awards in future years,
mindful of the need to have suitable ongoing
long-term incentive arrangements in place.
• The shareholding requirements for the
executive directors have been extended
and increased from 150% of basic salary to
200% of basic salary. For John Lyttle, the
holding requirement currently increases to
300% on maturity of the Growth Share
Plan and this will rise to 400%. On maturity
of their awards under the MIP, the other
executive directors will then also be required
to hold shares equivalent to 400% of their
basic salary. We are also requesting that the
executive directors hold shares equivalent
to the level of their in-service shareholding
guideline for a minimum of two years after
cessation of employment. These changes
further enhance the alignment between
directors’ remuneration and the interests of
shareholders, and are consistent with best
practice for a company of boohoo’s size.
• The clawback and malus provisions in the
incentive schemes have been extended, with
the Committee now able to invoke them
in circumstances of serious reputational
damage or corporate failure (in addition
to the existing trigger events). Again, this
change brings our practice into line with what
investors expect for a large listed company.
• We have decided to make a small but
important change to the pension provision
for the directors. Currently, certain directors
receive a cash supplement equivalent to
67
6.2% of basic salary in lieu of a pension
contribution. With effect from 1 January
2023, we will reduce this to 5% of basic
salary to align with the provision for the
wider workforce. This approach ensures that
boohoo complies with the UK Corporate
Governance Code and the guidance of the
Investment Association (notwithstanding
that the Code and the IA guidance apply
primarily to premium listed companies).
ENCOURAGING EQUITY
OWNERSHIP ACROSS THE
BUSINESS
The Remuneration Committee regularly reviews
the pay arrangements for all employees. We
remain committed to encouraging all our
employees, as well as our senior executives,
to be shareholders in the business. As part of
facilitating this policy objective, as stated above,
we made a further award of free shares worth
£3,600 per person to all eligible employees
under a UK HMRC-approved Share Incentive
Plan in February 2021. This award recognised
the outstanding contribution made by boohoo
employees to the performance of the business
over a challenging period. The award follows
those made in the 2015, 2016, 2019 and 2020
financial years and our intention will be to make
another award in the financial year ending 2022.
Discounted options were issued under an
HMRC-approved Save As You Earn ('SAYE')
plan in each of the financial years ended
2016 to 2021. There has been a high level of
participation by employees, and we intend
to continue with similar arrangements in
subsequent years.
SHAREHOLDER FEEDBACK
The Remuneration Committee recognises
that dialogue with shareholders plays a
key role in informing the design of the
remuneration policy and we welcome the
interactions we have had with investors over
the last 12 months. The comments received
have been instrumental in informing the
changes that we have made, as set out above.
We would welcome any additional feedback
either before or after the forthcoming AGM.
We will keep executive remuneration under
regular review and will continue to consult
with significant shareholders where major
changes are proposed.
We hope you will support the advisory vote
on the directors’ remuneration report at
the forthcoming annual general meeting, as
the directors will do in respect of their own
beneficial shareholdings.
Iain McDonald
CHAIRMAN OF THE REMUNERATION COMMITTEE
ANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC// GOVERNANCE DIRECTORS’ REMUNERATION REPORT
CONTINUED
UK CORPORATE GOVERNANCE
CODE
with the wider workforce with effect from
January 2023 and the introduction of post-
employment shareholding requirements.
As indicated in the Remuneration
Committee Chairman’s Annual Statement,
the remuneration policy takes into account
the provisions of the UK Corporate
Governance Code, despite boohoo not
being formally required to report the extent
of its compliance against the Code. The
Remuneration Committee believes that in the
vast majority of areas the remuneration policy
complies with the principles and provisions of
the Code. This has been enhanced through
proposed changes to the policy such as the
alignment of directors’ pension provision
The main point where the policy is not
currently fully compliant with the Code is
that certain share awards do not have a total
vesting and holding period of five years or
more. This applies to standard awards made
to the CFO and other senior executives
under the LTIP, and to the Management
Incentive Plan (MIP) structure introduced for
certain executive directors during 2020. In
both cases, awards vest subject to extremely
challenging performance conditions to be
met over a three-year period. Although
there are no formal post-vesting holding
periods in place for these awards, the
executive directors are obliged to comply
with shareholding requirements which have
recently been strengthened and which, as
noted above, will now apply for a period of
time following cessation of employment.
As such, the Committee believes that the
current structures are sufficiently long-term
in nature. It should also be noted that the
Growth Share Plan, introduced for the CEO
in 2019, has a five-year performance period
and is thus compliant with the Code.
The Committee has considered the principles
set out in Provision 40 of the Code and
believes that the policy sufficiently addresses
these principles, as set out below:
Principle
Clarity
Simplicity
Risk
Predictability
Proportionality
How it is addressed
The remuneration policy and its application are set out in detail in this Directors’ Remuneration Report, providing
shareholders with full information on all elements of directors’ pay and how the policy is set. The level of detail provided
has been extended this year to reflect the Committee’s desire to report in line with best practice, and the vast majority
of the reporting requirements for Premium Listed companies have been adopted.
The Committee believes strongly that simple remuneration structures based around easily-understood performance
measures are likely to be the most effective in terms of incentivising outperformance. For example, the annual bonus
scheme rewards performance against a relatively small number of financial and (with effect from FY2022) non-
financial metrics. The Growth Share Plan (for the CEO) and the MIP (for the other executive directors) pay out
primarily due to the growth in the market capitalisation of boohoo and are not complicated through the use of metrics
such as relative Total Shareholder Return.
The remuneration policy is designed to be compatible with the group’s risk policies and systems. The policy rewards
strong levels of growth in the business and has been instrumental in the group’s success since admission. The
Committee has considered very carefully the current incentive structures in light of the issues raised during the course
of the financial year and has recognised the merits of making some enhancements. For example, participants in the
Growth Share Plan and the MIP have agreed that no awards will vest unless the Committee is satisfied that the Agenda
for Change programme has been successfully implemented over the performance period. This is intended to provide
additional reassurance that executives are directly focused on resolving the supply chain issues which have emerged and
not focused solely on growth without due recognition of wider stakeholder interests.
The extent of potential remuneration outcomes for directors is clear from the policy and implementation disclosures in
this report. There is a limit on the size of annual bonus payments and awards under the standard LTIP. Although there
is a wide range of potential outcomes under the Growth Share Plan and MIP, both plans are capped in the sense that
individual participants cannot earn more than specified amounts.
The incentive schemes are designed to support our strategic growth programme as we strive to lead the fashion
e-commerce market globally. The schemes operate with ambitious targets which are closely aligned to the growth
aspirations of the business. There is no potential for rewards for failure or poor performance.
Alignment to culture
boohoo’s fast-moving and performance-driven culture has been integral to its success and the incentive schemes have
been designed to reflect this approach. The changes to the remuneration policy as discussed in this report will also help
ensure that incentives take due account of the need for growth to be matched with a focus on the management of
stakeholder relationships which are critical to the long-term value of the brand.
POLICY REPORT
PAY PHILOSOPHY
The Remuneration Committee ('Committee')
is responsible for determining, on behalf of
the board, the group’s pay philosophy and the
policy on the remuneration of the executive
directors, the Chairman and other senior
executives of the group.
The aim of the remuneration policy is to
ensure that high calibre senior executives are
provided with remuneration, which is designed
to promote the long-term success of the
group. The policy includes performance-
related elements, which are transparent,
stretching and rigorously applied so as to
encourage enhanced performance and to
reward, in a fair and responsible manner,
individual contributions to the success of the
group. The remuneration policy is designed to
be compatible with risk policies and systems
and to be aligned with the group’s long-term
strategic goals. The policy framework is
structured so as to adhere to the principles
of good corporate governance and has been
developed taking into account the principles
of the UK Corporate Governance Code and
the QCA Corporate Governance Code.
The performance-related variable pay
component makes up a significant proportion
of the overall package for senior executives
and is designed to incentivise the delivery
of the group’s growth strategy and other
strategic and business objectives. The
interests of the executives are designed
to align with the interests of shareholders
through encouraging equity ownership and,
in support of this, awards under the group’s
equity incentive plans are made where
appropriate.
CONSIDERATION
OF EMPLOYMENT
CONDITIONS ELSEWHERE
IN THE GROUP
When setting the remuneration policy for
executive directors, the Committee takes
into account the overall approach to reward
for, and the pay and employment conditions
of, other employees in the group, especially
when determining annual salary increases.
This process ensures that any increase to
the pay of executive directors is set in an
appropriate context, especially relative to
increases proposed for other employees.
The Committee is also provided with periodic
updates on employee remuneration practices
and trends across the group.
The principle of encouraging our senior
executives to be shareholders in the business
is reflected across the group as a whole and
a key aim of the remuneration policy is to
encourage widespread equity ownership
across the whole employee base. In support
of this objective, we operate an HMRC-
approved Share Incentive Plan and an
approved SAYE option plan.
The Committee has not consulted directly
with employees in designing the remuneration
policy for the directors. However, in line with
the recommendation of the UK Corporate
Governance Code, the Committee intends
to engage with employees to explain how
executive remuneration aligns with wider
company pay policy.
CONSIDERATION OF
SHAREHOLDER VIEWS
The Committee pays close attention to
the views of shareholders when setting the
remuneration policy for executive directors.
This includes consideration of shareholder
voting on the Directors’ Remuneration
Report resolution at each AGM, the
published guidelines of investors and their
representative bodies and individual feedback
received by the Committee. In recent
months, the Committee has also consulted
with major shareholders on the proposed
changes to the policy.
68
69
ANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC// GOVERNANCE DIRECTORS’ REMUNERATION REPORT
CONTINUED
CHANGES TO THE REMUNERATION POLICY
In general, we believe that our pay philosophy and the broad structure of our remuneration policy has served the company well and has been a key
factor in driving exceptional levels of performance. We intend to retain the overall broad framework but, as explained in the Annual Statement
by the Chairman of the Remuneration Committee, we intend to make a number of changes to improve the alignment with shareholders and key
stakeholders in the business. The revised policy is as follows:
Element
Long-Term
Incentive
Plan ('LTIP')
Maximum
opportunity
• Annual increases
will generally be
restricted to those
of the average of the
wider workforce
• Increases beyond
those awarded to
the wider workforce
(in percentage of
salary terms) may be
awarded in certain
circumstances,
such as where
there is a change
in responsibility or
experience, or a
significant increase
in the scale or
complexity of the role
and/or size and value
of the company
• Up to 200% of salary
for Mahmud Kamani
and Carol Kane, up
to 150% of salary for
John Lyttle and up
to 100% of salary for
all other executive
directors, dependent
on performance
Element
Purpose and
link to strategy
Base salary
• To aid
recruitment and
retention
Operation
• Normally reviewed annually, with any
increase usually becoming effective
1 May
• To reflect
experience and
expertise
• Set initially at a level required to recruit
suitable executives, reflecting their
experience and expertise
• To provide an
• Any subsequent increase influenced by:
Annual
bonus
appropriate level
of fixed basic
income
− Scope of the role
− Experience and personal performance
in the role
− Average change in total workforce
salary
− Performance of the group
− External economic conditions, such as
inflation
• Account taken of practice in comparable
companies (e.g. those of a similar size and
complexity)
• No recovery or withholding provisions
apply
• To reward the
• All bonus payments are at the discretion
annual delivery of
short to medium-
term objectives
relating to the
business strategy
of the Committee
• Not pensionable
• Payable following the end of the year
based on targets set at the start of the
year
• Targets are set and/or reviewed annually
• With effect from the financial year
ending 28 February 2022, a minimum
of one-third of any bonus earned must
be invested in shares and held for at least
two years. The remainder of the bonus is
payable in cash
• Recovery provisions apply in certain
circumstances at the discretion of the
Committee (including where there
has been a misstatement of accounts,
an error in assessing any applicable
performance condition, misconduct
on the part of the participant, serious
reputational damage to the company,
and/or corporate failure)
Framework used to assess
performance
• The Committee reviews the
salaries of executive directors
each year, taking due account of
all the factors described in the
salary policy
• Bonuses are based on
performance measures with
appropriate targets set and
assessed by the Committee
at its discretion
• Those financial measures which
are identified as the key indicators
of success against the strategy
(e.g. EBITDA and revenue) will
represent the majority of bonus,
with any other measures (e.g.
strategic, ESG and/or personal
objectives), where appropriate,
representing the balance
• Performance is measured over a
single financial year
• 30% of maximum bonus will be
payable for achievement of a
threshold level of performance,
rising to 100% of maximum bonus
for reaching stretch targets
• Measures and weightings may
change each year to reflect any
year-on-year changes to business
priorities at the discretion of the
Committee
• Targets for threshold and stretch
performance will be disclosed
retrospectively
Growth
Share Plan
Management
Incentive Plan
('MIP')
Purpose and
link to strategy
• Intended to align
the long-term
interests of
senior executives
with those of
shareholders
• Neil Catto is the
only executive
director to
participate in this
plan
• To incentivise
the delivery of
key strategic
objectives over
the longer term
• Intended to align
the long-term
interests of the
CEO with those
of shareholders
• To incentivise
the delivery of
key strategic
objectives over
the longer term
• Intended to align
the long-term
interests of
certain executive
directors
(Mahmud
Kamani, Carol
Kane and Neil
Catto) and
senior executives
with those of
shareholders
• To incentivise
the delivery of
key strategic
objectives over
the longer term
Operation
• Awards are normally granted in the form
of nominal cost options
• Ability to exercise is dependent on
performance targets being met during
the performance period and continued
service of the directors
• Recovery and withholding provisions
apply in certain circumstances at
the discretion of the Committee
(including where there has been a
misstatement of accounts, an error in
assessing any applicable performance
condition, misconduct on the part of the
participant, serious reputational damage
to the company, and/or corporate failure)
Maximum
opportunity
• The maximum annual
limit contained within
the plan rules is 150%
of salary for executive
directors
• Awards are at the
discretion of the
Committee and may
be made at lower
levels than this
• Exceptionally, at
the discretion of the
Committee, awards
may be made in
excess of 150% of
salary per annum
Framework used to assess
performance
• Award vest based on challenging
targets measured over a three-
year period and are dependent
upon continued service
• At least half of awards will
normally be based on financial
performance metrics (such as,
inter alia, PBT or EPS)
• Prior to each award, the
Committee will set threshold
and stretch targets along
with an intermediate vesting
range. Details of these will
be disclosed in the annual
report on remuneration for
the year in which the award
was granted unless the targets
are commercially sensitive, in
which case they will be disclosed
retrospectively
• John Lyttle was required to pay an
amount to the company on grant of the
award. This investment is intended to
reflect his commitment to the group
• Vesting of the award is dependent on
performance targets being met during
the performance period and John Lyttle’s
continued service
• Recovery and withholding provisions
apply in certain circumstances at
the discretion of the Committee
(including where there has been a
misstatement of accounts, an error in
assessing any applicable performance
condition, misconduct on the part of the
participant, serious reputational damage
to the company, and/or corporate failure)
• Participants were required to pay an
amount to the company on grant of the
award. This investment is intended to
reflect their commitment to the group
• Vesting of the award dependent on
performance targets being met during
the performance period and continued
service of the participants
• Recovery and withholding provisions
apply in certain circumstances at
the discretion of the Committee
(including where there has been a
misstatement of accounts, an error in
assessing any applicable performance
condition, misconduct on the part of the
participant, serious reputational damage
to the company, and/or corporate failure)
• The maximum value
that can be paid out
to John Lyttle is £50
million (satisfied at
the discretion of the
company by either
cash or boohoo group
plc shares valued at
the end of the five-
year performance
period)
• The performance measure is
based on the compound annual
growth rate of the company’s
market capitalisation measured
over a five-year performance
period
• In addition, John Lyttle has agreed
to an amendment to the terms of
the award such that vesting of any
part of the award will require the
successful implementation of the
Agenda for Change programme
• The performance measure is
based on the achievement of
stretching increases in market
capitalisation measured over a
three-year performance period
starting in June 2020
• In addition, all participants have
agreed to an amendment to
the terms of their award such
that vesting of any part of the
award will require the successful
implementation of the Agenda for
Change programme
• The maximum value
that can be paid out
to all participants is
£150 million (satisfied
at the discretion
of the company by
either cash or in
boohoo group plc
shares valued at the
end of the three-year
performance period)
• The maximum value
that can be paid out
to Mahmud Kamani
and Carol Kane is
£50 million each
• The maximum value
that can be paid out
to Neil Catto is £10
million
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ANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC// GOVERNANCE DIRECTORS’ REMUNERATION REPORT
CONTINUED
Element
Pension
Purpose and
link to strategy
• To aid
Operation
• Executive directors may receive an
recruitment and
retention
employer’s pension contribution or cash
allowance
• To provide an
appropriate level
of fixed income
Framework used to assess
performance
N/A
Maximum
opportunity
• Employer’s defined
contribution or cash
allowance up to 6.2%
of salary
• From 1 January 2023
this will be aligned
with the average
contribution rate for
the wider workforce
(currently 5%)
Other
benefits
• To provide a
competitive
benefits package
• Executive directors may receive benefits
including health care, income protection
and life assurance, as well as other
standard group-wide benefits offered by
the company from time to time
• The value of benefits
may vary from year
to year depending
on the cost to the
company
N/A
Shareholding
requirement
• To support
long-term
commitment to
the company and
the alignment
of executive
director interests
with those of
shareholders
• Executive directors are also eligible to
participate in any all-employee share
plans operated by the company on the
same basis as for other eligible employees
(and in line with relevant HMRC rules)
• The Remuneration Committee has
adopted formal shareholding guidelines
that will encourage executive directors
to build up over a five-year period and
then subsequently hold a shareholding
equivalent to a percentage of base
salary. Adherence to these guidelines is
a condition of continued participation in
the equity incentive arrangements
• These guidelines will continue to apply
for a minimum of two years following a
director’s cessation of employment
None
• 200% of salary for
executive directors,
rising to 400% of
salary on maturity of
the Growth Share
Plan/MIP
CHOICE OF PERFORMANCE MEASURES AND APPROACH TO TARGET SETTING
Growth Share Plan and MIP
The primary performance measure selected for John Lyttle’s Growth Share Plan and for the MIP is market capitalisation growth over a five-year
and three-year period respectively. The targets reflect the ambitious growth plans for the group and the performance measure ensures that
executive directors’ and senior managers’ interests are fully aligned with shareholders. As explained in the Annual Statement by the Chairman of
the Remuneration Committee, an additional measure has been added to both plans which means that vesting of any awards requires successful
implementation of the Agenda for Change programme, thus tying management reward more closely to this critical priority for the business.
The performance metrics and targets that are set for the executive directors via the annual bonus plan and LTIP awards are carefully selected to
align closely with the group’s strategic plan and key performance indicators.
Annual bonus
In terms of annual performance targets, the bonus is determined on the basis, primarily, of performance against financial measures, which are
identified as the key indicators of success against the strategy set annually. For the financial year ending 28 February 2022, additional non-financial
metrics have been introduced to the bonus scheme. The precise metrics chosen, along with the weightings of each, may vary from year to year. The
Committee will review the performance measures and targets each year and vary them as appropriate to reflect the priorities for the business in the
year ahead.
LTIP
In terms of the LTIP, metrics will be set at the time of each grant but will normally include at least half based on financial performance in line with
our key objectives of delivering returns to shareholders through achievement of our growth strategy. The Committee will disclose the targets for
each award to the executive directors in advance in the annual report on remuneration unless the targets are commercially sensitive, in which case
they will be disclosed retrospectively. The Committee will review the choice of performance measures and the appropriateness of the performance
targets prior to each LTIP grant.
Challenging targets are set whereby modest rewards are payable for the delivery of threshold
levels of performance, rising to maximum rewards for the delivery of substantial outperformance
of our financial and operating plans.
DIFFERENCES IN REMUNERATION POLICY FOR
EXECUTIVE DIRECTORS COMPARED TO OTHER
EMPLOYEES
The Committee has regard to pay structures across the wider group when setting the
remuneration policy for executive directors. The Committee, in particular, considers the general
basic salary increase for the broader workforce when determining the annual salary review for
the executive directors.
Overall, the remuneration policy for the executive directors is more heavily weighted towards
performance-related pay than for other employees. Performance-related long-term incentives
are provided for those employees considered to have the greatest potential to influence overall
levels of performance and those whose retention within the group is regarded as important.
That said, whilst the use of the LTIP, Growth Share Plan and MIP is confined to the more senior
management in the group, there is a commitment to encouraging widespread equity ownership
through, for example, our use of an HMRC-approved Share Incentive Plan and SAYE share
option scheme.
The level of performance-related pay varies within the group by grade of employee and is
informed by the specific responsibilities of each role, as appropriate.
The Committee has not consulted directly with employees in designing the remuneration policy
for the directors.
SERVICE CONTRACTS AND LOSS OF
OFFICE PAYMENTS
Executive directors are not employed on fixed term contracts.
Service contracts normally continue until the executive
director’s agreed retirement date or such other date as the
parties agree. The company’s policy is that executive directors
will be employed on a contract that can be terminated by the
company on giving no more than one year’s notice, with the
executive director required to give up to one year’s notice of
termination.
A director’s service contract may be terminated without notice
and without any further payment or compensation, except for
sums earned up to the date of termination, on the occurrence
of certain events such as gross misconduct. The circumstances
of the termination (taking into account the individual’s
performance) and an individual’s duty and opportunity to
mitigate losses are taken into account by the Committee
when determining amounts payable on/following termination.
Our policy is to reduce compensatory payments to former
executive directors where they receive remuneration from
other employment during the compensation period. The
Committee will consider the particular circumstances of each
leaver on a case-by-case basis and retains flexibility as to
at what point, and the extent to which, payments would be
reduced. Details will be provided in the relevant annual report
on remuneration should such circumstances arise.
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ANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC// GOVERNANCE DIRECTORS’ REMUNERATION REPORT
CONTINUED
In summary, the contractual provisions are as follows:
Provision
Notice period
Termination payment
Detailed terms
Maximum of 12 months from both the company and the executive
director
Payment in lieu of notice of base salary only, normally subject
to mitigation and paid monthly1, subject to the discretion of the
Committee
In addition, any statutory entitlements would be paid as necessary
Change of control
There are no enhanced provisions on a change of control
1. The Committee may elect to make a lump sum termination payment (up to a maximum of 12 months’ base salary) as part of an executive director’s termination arrangements where it
considers it appropriate to do so.
Annual bonus on termination
There is no contractual entitlement to annual bonus on termination. At the discretion of the Committee, in certain circumstances a pro rata bonus
may become payable at the normal payment date for the period of active service only.
LTIP, Growth Share Plan and MIP on termination
Any share-based entitlements granted under the company’s share plans will be determined on the basis of the plan rules. In determining whether an
executive director should be treated as a good leaver under the plan rules, the Committee will take into account the performance of the individual
and the reasons for his/her departure and, in the event of this determination being made, will set out its rationale in the following annual report on
remuneration.
APPROACH TO RECRUITMENT
AND PROMOTIONS
The remuneration package for a new executive director would generally be
set in accordance with the terms of the company’s remuneration policy
in force at the time of appointment and would be subject to the individual
limits set out in the policy table above. In addition, with specific regard to the
recruitment of new executive directors (whether by external recruitment or
internal promotion), the remuneration policy will allow for the following:
• Where new joiners or recent promotions have been given a starting salary
at a discount to the mid-market level, a series of increases above those
granted to the wider workforce (in percentage of salary terms) may be
awarded over the following few years, subject to satisfactory individual
performance and development in the role.
• The Committee may offer additional cash and/or share-based
elements when it considers these to be in the best interests of the
company and its shareholders. Any such additional payments would
aim to reflect the terms and value of remuneration relinquished when
leaving the former employer.
• The annual bonus would operate in accordance with the terms of the
policy, subject to the overriding discretion of the Committee. Depending
on the timing and responsibilities of the appointment, it may be necessary
to set different performance measures and targets in the first year.
• For an internal executive appointment, any variable pay element awarded
in respect of the former role would be allowed to pay out according to
its terms, adjusted as relevant to take into account the appointment.
In addition, any other ongoing remuneration obligations existing prior
to appointment would continue.
• For external and internal appointments, the Committee may agree that
the company will meet certain relocation expenses as appropriate.
For the appointment of a new chairman or non-executive director, the fee
arrangement would generally be set in accordance with the fee policy in
force at that time.
EXTERNAL NON-EXECUTIVE DIRECTOR POSITIONS
The company allows executive directors to hold external directorships subject to agreement by the Chairman on a case-by-case basis and, at the
discretion of the Committee, to retain the fees received from those roles.
NON-EXECUTIVE DIRECTORS’ LETTERS OF APPOINTMENT
The non-executive directors do not have service contracts with the company, but instead have letters of appointment. The letters of appointment
are usually renewed every three years. Termination of the appointment may be earlier at the discretion of either party on one month’s written notice
for non-executive directors. None of the non-executive directors is entitled to any compensation if their appointment is terminated. Appointments
will be subject to re-election at the annual general meeting by rotation.
NON-EXECUTIVE DIRECTORS’ FEES
The non-executive directors’ fees policy is described below:
Element
Purpose and
link to strategy
Operation
Maximum
opportunity
Fees
• To recruit and
• Fees are determined by the board, with
• There is no cap on fees
• Fees may be increased to ensure they
continue to appropriately recognise the time
commitment of the role, increases to fee levels
for non-executive directors in general and
fee levels in companies of a similar size and
complexity
retain high calibre
non-executives
non-executive directors abstaining from any
discussion or decision in relation to their fees
• Non-executive directors are paid an annual
fee for all board duties, which will include an
annual award of shares (with the value of shares
normally determined at the market price in
February of each year)
• In relation to the cash element, fees are
normally paid monthly
• In relation to the share element there will be
certain restrictions which prevent the director
selling these shares during the period of their
appointment
• Non-executive directors will not receive
awards under any of the company’s incentive
arrangements or receive any pension provision
• The fee levels are reviewed on a periodic basis,
with reference to the time commitment of
the role and market levels in companies of
comparable size and complexity
• In exceptional circumstances, if there is a
temporary yet material increase in the time
commitment for non-executive directors,
the board may pay extra fees to recognise the
additional workload
• Non-executive directors shall be entitled
to have reimbursed all expenses that they
reasonably incur in the performance of their
duties, including taxes payable thereon
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ANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC// GOVERNANCE DIRECTORS’ REMUNERATION REPORT
CONTINUED
ANNUAL REPORT ON REMUNERATION
This section of the remuneration report contains details as to how the group’s remuneration policy was implemented during the year ended
28 February 2021.
DISCLOSURE OF DIRECTORS’ SINGLE-FIGURE TOTAL REMUNERATION FOR THE YEAR –
AUDITED INFORMATION
The total single-figure remuneration of the directors during the year ended 28 February 2021 is set out below:
Base salary
and fees
£
450,000
433,333
450,000
433,333
615,000
592,947
300,000
294,833
1,815,000
1,754,496
60,000
56,667
20,192
-
70,000
65,000
-
75,000
126,859
59,679
277,051
Fixed remuneration
Benefits
£
42,747
42,488
5,331
8,572
3,777
4,283
2,959
2,925
54,814
58,269
-
-
-
-
-
-
-
-
-
-
-
Pension
equivalent
£
-
-
27,900
23,467
33,388
19,267
18,600
14,317
79,888
57,051
-
-
-
-
-
-
-
-
-
-
2020
2021
2020
256,346
2,092,051
2,010,842
-
54,814
58,269
-
79,888
57,051
Executive directors
Mahmud Kamani
John Lyttle
Carol Kane
2021
2020
2021
2020
2021
2020
2021
2020
Total executive directors 2021
2020
Neil Catto
Non-executive directors
Pierre Cuilleret
2021
2020
2021
2020
2021
2020
2021
2020
2021
2020
2021
Shaun McCabe
Iain McDonald
Sara Murray
Brian Small
Total non-executive
directors
Total
Variable remuneration
Annual
bonus
£
Long-term
incentives
£
900,000
900,000
900,000
900,000
922,500
922,500
300,000
300,000
3,022,500
3,022,500
-
-
-
-
-
1,156,695
435,155
513,084
435,155
1,669,779
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
£
1,392,747
1,375,822
1,383,231
1,365,372
1,578,264
2,702,190
1,060,313
1,131,706
5,414,555
6,575,091
70,000
66,667
30,192
-
80,000
75,000
-
85,000
146,859
79,679
327,051
-
3,022,500
3,022,500
-
435,155
1,669,779
306,346
5,741,606
6,881,437
Other
£
-
-
-
-
3,599
6,498
3,599
6,498
7,198
12,996
10,000
10,000
10,000
-
10,000
10,000
-
10,000
20,000
20,000
50,000
50,000
57,198
62,996
Figures in the single total figure remuneration include the following for the financial year:
Base salary and fees
The amount of salary or non-executive directors’ fees.
Pension and pension equivalent
Where an executive has elected to forego company pension contributions, due to pension cap restrictions, an
amount of 6.2% is paid as a supplementary element, being the company cost-neutral equivalent of the pension
cost and employer’s NI foregone.
Other
Annual bonus
Long-term incentives
The value of SIP awards and SAYE options granted in the financial period for executive directors (SAYE option
calculated as the 20% discount at grant on the three-year plan) and the value of free shares issued to non-
executive directors as part of their fees.
The amount of performance-related bonus receivable. Further details of the performance outcome can be
found below.
The value of long-term incentives vesting based on performance ending in the year under review.
Further details of the share options granted in 2018 and vesting on 28 June 2021 based on performance
measured to 28 February 2021 can be found below. A share price of 338p (the three-month average share
price to 26 February 2021) has been used for the purposes of valuing the gain. Of the amount stated in the
table, £175,156 is attributable to share price appreciation.
Benefits
The value of private medical insurance, income protection, life assurance, company car and fuel costs based on
the taxable value and driver services.
ANNUAL BONUS
For the year ended 28 February 2021, Mahmud Kamani’s and Carol Kane’s maximum potential bonus was 200% of basic salary, John Lyttle’s 150%
and Neil Catto’s 100%. 40% of the potential bonus related to a revenue target and 60% of the potential bonus related to an adjusted EBITDA
target. Bonus entitlement targets were as follows:
Financial target range
Revenue target:
Threshold £1,500 million
Upper limit £1,600 million or more
Adjusted EBITDA target:
Threshold £145 million
Upper limit £160 million or more
Bonus entitlement %
12.0%
40.0%
18.0%
60.0%
The amount of bonus payable varies on a sliding scale between the threshold and upper limit shown above. For the financial year ended 28 February
2021, revenue was £1,745 million and adjusted EBITDA £173.6 million, resulting in payments of 40% and 60% of bonus entitlement respectively.
Bonuses payable were as follows:
Name
Mahmud Kamani
Carol Kane
John Lyttle
Neil Catto
Bonus % of salary
200%
200%
150%
100%
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ANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC// GOVERNANCE DIRECTORS’ REMUNERATION REPORT
CONTINUED
LONG-TERM SHARE INCENTIVES
Neil Catto holds options under the LTIP subject to the achievement of performance conditions as follows:
Name
Neil Catto
Neil Catto
Neil Catto
Neil Catto
Neil Catto
Option scheme
2016 LTIP
2017 LTIP
2018 LTIP
2019 LTIP
2020 LTIP
No. of ordinary
shares under
option
404,822
120,546
128,744
168,570
164,865
Exercise
price pence
1
1
1
1
1
Date
of grant
30/06/16
13/06/17
28/06/18
11/12/19
03/11/20
Exercise period
30/06/19 to 30/06/26
13/06/20 to 13/06/27
28/06/21 to 28/06/28
21/04/22 to 21/04/29
03/11/23 to 03/11/30
2016 grant
The performance targets for the shares granted on 30/06/16 were based upon the achievement of two key criteria, Three-Year Aggregate Adjusted
Earnings per Share (67%) and Total Shareholder Return (33%) over a three-year period to the end of FY2019. Minimum “threshold” and “stretch”
targets were established by the Committee against these criteria. The EPS element vested on a straight-line basis between target intervals from
1.6p for a 25% vesting to 2.4p for 100% vesting. The actual vesting was 100%. The TSR element vested on a straight-line basis between target
intervals from 50% growth in TSR for a 25% vesting to 125% growth in TSR for a 100% vesting. The actual vesting was 100%. The combined vesting
was therefore 100%.
2017 grant
The performance targets for the shares granted on 13/06/17 were based upon the achievement of two key criteria, Three-Year Aggregate Adjusted
Earnings per Share (67%) and Total Shareholder Return (33%) over a three-year period to the end of FY2020. Minimum “threshold” and “stretch”
targets were established by the Committee against these criteria. The EPS element vested on a straight-line basis between target intervals from
7.5p for a 25% vesting to 12p for 100% vesting. The actual vesting was 100%. The TSR element vested on a straight-line basis between target
intervals from 50% growth in TSR for a 25% vesting to 125% growth in TSR for a 100% vesting. The actual vesting was 62%. The combined vesting
was therefore 87.3%.
2018 grant
The performance targets for the shares granted on 28/06/18 were based upon the achievement of two key criteria, Three-Year Aggregate Adjusted
Earnings per Share (67%) and Total Shareholder Return (33%) over a three-year period to five days after publication of the FY2021 Annual Report
and Accounts. Minimum “threshold” and “stretch” targets were established by the Committee against these criteria. The EPS element vests on
a straight-line basis between target intervals from 11.3p for a 20% vesting to 14.9p for 100% vesting. The actual vesting will be 100%. The TSR
element vests on a straight-line basis between target intervals from 20.4% growth in TSR for a 25% vesting to 73.9% growth in TSR for a 100%
vesting.
2019 grant
The performance targets for the shares granted on 11/12/19 are based upon the achievement of two key criteria, Three-Year Aggregate Adjusted
Earnings per Share (67%) and Total Shareholder Return (33%) over a three-year period to the end of FY2022. Minimum “threshold” and “stretch”
targets have been established by the Committee against these criteria. The EPS element vests on a straight-line basis between target intervals from
16p for a 20% vesting to 19p for 100% vesting. The TSR element vests on a straight-line basis between target intervals from 55.3% growth in TSR
for a 25% vesting to 84.1% growth in TSR for a 100% vesting.
2020 grant
The performance targets for the shares granted on 03/11/20 are based upon the achievement of two key criteria, Three-Year Aggregate Adjusted
Earnings per Share (67%) and Total Shareholder Return (33%) over a three-year period to the end of FY2023. Minimum “threshold” and “stretch”
targets have been established by the Committee against these criteria. The EPS element vests on a straight-line basis between target intervals from
28p for a 20% vesting to 33p for 100% vesting. The TSR element vests on a straight-line basis between target intervals from 50% growth in TSR
for a 25% vesting to 75% growth in TSR for a 100% vesting. The award granted to Neil Catto on 03/11/20 had a face value of 150% of basic salary.
ALL-EMPLOYEE SHARE INCENTIVE PLAN ('SIP')
The HMRC-approved all-employee Share Incentive Plan purchases shares and holds them in trust for the benefit of employees who remain
with the company for three years. There are no performance criteria for the SIP shares. The directors hold the following options over shares
under this scheme:
Name
Neil Catto
Neil Catto
Neil Catto
Neil Catto
Neil Catto
John Lyttle
John Lyttle
No. of ordinary
shares held in trust
6,000
3,571
938
884
974
884
974
Purchase
price pence
50
28
213
226
370
226
370
Date of
grant
14/03/14
19/06/15
27/09/18
23/08/19
19/02/21
23/08/19
19/02/21
Maturity
date
14/03/17
19/06/18
27/09/21
23/08/22
19/02/24
23/08/22
19/02/24
SAVE AS YOU EARN SHARE SCHEME ('SAYE')
The HMRC-approved all-employee Save As You Earn scheme allows employees to purchase shares at a 20% discount to market price at date of
grant on the future option date. There are no performance criteria for the SAYE shares. The directors hold the following options over shares under
this scheme:
Name
Neil Catto
John Lyttle
Estimated shares to be
purchased at option date
8,297
8,297
Option price
pence
216.9
216.9
Date of
grant
30/10/19
30/10/19
Option
date
30/10/22
30/10/22
OTHER BENEFITS
In the prior year, and as previously disclosed, a one-off conditional award over 357,446 ordinary shares was made to John Lyttle in compensation
for the loss of short and long-term incentive awards, which lapsed on leaving his previous employer, provided John stayed in his role as Chief
Executive for a period of 12 months to 15 March 2020. The award vested in March 2020 and the value of £1.2 million was recognised in the single
total figure table for the financial year ended 29 February 2020.
PERFORMANCE GRAPH AND TABLE
The graph below illustrates boohoo’s total shareholder return since admission in March 2014 relative to two broad equity market indices, the FTSE
AIM 100 index and the FTSE 250 index.
TOTAL SHAREHOLDER RETURN
800
700
600
500
400
300
200
100
)
d
e
s
a
b
e
R
(
)
£
(
e
u
a
V
l
0
13/03/14
28/02/15
29/02/16
28/02/17
28/02/18
28/02/19
29/02/20
28/02/21
Boohoo
FTSE 250
FTSE AIM 100
78
79
Source: Datastream (Thomson reutuers)
ANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC// GOVERNANCE
DIRECTORS’ REMUNERATION REPORT
CONTINUED
The table below sets out the total remuneration of the CEO over the period since admission, as disclosed in the Single Figure table in each year’s
Directors’ Remuneration Report. Mahmud Kamani and Carol Kane served as Joint CEOs until John Lyttle’s appointment in March 2019.
DIRECTORS’ INTERESTS IN SHARES
The table below sets out the beneficial and non-beneficial interests in the number of ordinary shares as at the year end.
2015
2016
2017
2018
2019
2020
2021
Mahmud
Kamani
Carol
Kane
Mahmud
Kamani
Carol
Kane
Mahmud
Kamani
Carol
Kane
Mahmud
Kamani
Carol
Kane
Mahmud
Kamani
Carol
Kane
John
Lyttle
John
Lyttle
Total Single Figure (£k)
Annual bonus payment
(% of maximum)
217
0%
235
379
390
396
410
893
914
1,062
1,072
2,702
1,578
0%
90%
90%
100%
100%
100%
100%
100%
100%
100%
100%
LTIP vesting level
(% of maximum)1
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
1. During their tenure as Joint CEOs, Mahmud Kamani and Carol Kane did not participate in long-term incentive arrangements. For John Lyttle, there were no long-term incentives
which vested in respect of FY2020 or FY2021. This excludes the shares he received as compensation for the loss of short and long-term incentives which lapsed on leaving his previous
employer, as disclosed in last year’s Directors’ Remuneration Report.
CHIEF EXECUTIVE’S REMUNERATION COMPARED TO ALL OTHER EMPLOYEES
OF THE GROUP
Percentage change of Chief Executive’s base salary in the year compared to that of all employees:
Percentage increase in Chief Executive’s annualised base salary
Average percentage increase in all employees’ base salaries
0%
5.9%
The Chief Executive’s total single figure remuneration ratio to the equivalent pay for the lower quartile, median and upper quartile UK employees,
calculated using option A of the Companies (Miscellaneous Reporting) Requirements 2018 is as follows:
Year
2021
20201
1. Prior year numbers restated based on total single figure remuneration and not basic pay as previously reported
25th percentile ratio
76:1
151:1
50th percentile ratio
65:1
130:1
75th percentile ratio
49:1
95:1
Option A was chosen as it represents the most accurate means of identifying the relevant employees at each percentile level. The workforce
comparison is based on data for the years ended 28 February. The median is considered to be representative of the wider pay and reward of the
UK workforce. As indicated in the table, there has been a significant reduction in the pay ratio reported for 2021 when compared to that reported
for 2020. This is primarily a consequence of the notably lower total single figure remuneration reported for the CEO for 2021 as a result of his
having no long-term incentive award vesting in respect of 2021. (In 2020, his single figure remuneration included the value of the buyout award he
received on joining boohoo.) The group believes that the median pay ratio accurately reflects the comparison between the CEO’s remuneration and
the pay for UK employees and is consistent with wider pay, reward and progression policies affecting UK employees. There is an obvious differential
between the pay for the CEO and for the wider employee base, with the CEO’s remuneration reflecting market norms for leaders of listed
companies. For all employees, we strive to offer a competitive pay and benefits package relevant to the roles performed. This includes participation
in the SIP and SAYE share schemes (offered to all eligible employees) and, at more senior levels, participation in additional bonus and long-term
incentive schemes.
Pay data £000
Chief Executive remuneration
UK employees 25th percentile
UK employees 50th percentile
UK employees 75th percentile
2021
2020
Base salary
615
19
21
29
Total pay and
benefits
1,578
21
24
32
Base salary
(annualised)
615
18
19
26
Total pay and
benefits
2,702
18
21
29
Beneficially
owned at
29 February
2020
Free share
award
under NED
remuneration
policy
Shares
acquired
during the
year
Shares
disposed of
during the
year
Beneficially
owned at
28 February
2021
Name of director
As a % of
share capital
Outstanding
share options
Shares held
under SIP
Mahmud Kamani 152,679,880
31,330,421
Carol Kane
-
John Lyttle
73,910
Neil Catto
Pierre Cuilleret
Iain McDonald
Shaun McCabe
Brian Small
214,481
468,481
-
46,770
-
-
-
-
5,300,000
2,000,000
-
5,825
2,855
2,855
2,855
5,711
-
150,000
100,000
10,000
-
-
-
-
-
-
-
-
157,979,880
33,330,421
-
79,735
217,336
621,336
102,855
62,481
12.55%
2.65%
-
0.01%
0.02%
0.05%
0.01%
0.01%
-
-
357,446
1,005,038
-
-
-
-
-
-
1,858
12,367
-
-
-
-
SAYE
options
granted
Total
interests in
shares at 28
February
2021
- 157,979,880
-
33,330,421
8,297
367,601
8,297
1,105,437
-
-
-
-
217,336
621,336
102,855
62,481
GROWTH SHARE PLAN
As explained in last year’s report, John Lyttle, Chief Executive, has subscribed for 1,950 A ordinary shares of 0.1 pence each ('A Ordinary Shares')
in boohoo Holdings Limited, an intermediary holding company of the group, as part of a Growth Share Plan.
The value of the award under the Growth Share Plan is directly linked to the creation of significant growth in shareholder value as set out below:
• The value of the award will be determined by the compound annual growth rate ('CAGR') in market capitalisation of the group over the five-year
period starting on the date John joined as Chief Executive, 15 March 2019 ('the Period').
• The CAGR will be calculated using a base market capitalisation of £2.037 billion, being the market capitalisation on the date of the
announcement on 17 September 2018 that John would be joining the group.
• The value of the award under the Growth Share Plan is capped at £50 million of gross value before tax in the event of achieving CAGR of at least
23% at the end of the Period. CAGR of less than 10% yields nil value.
• The Growth Share Plan provides for adjustments to be made for increases in market capitalisation arising from corporate events, such as the issue
of shares for acquisitions, so that the benefits derived from the Growth Share Plan only arise from organic growth and the Growth Share Plan
also provides clawback and malus provisions, which allow repayment in defined circumstances.
• As explained in the Annual Statement by the Chairman of the Remuneration Committee on page 66, John Lyttle has agreed to an amendment
to the terms of his award under the Growth Share Plan such that the vesting of the award is also subject to the Committee being satisfied that
the Agenda for Change programme has been successfully implemented over the performance period.
MANAGEMENT INCENTIVE PLAN
In line with the announcement to the market on 26 June 2020, Mahmud Kamani, Carol Kane and Neil Catto have subscribed for 1,950, 1,950 and
390 B ordinary shares of 0.1 pence each ('B Ordinary Shares'), respectively, in boohoo Holdings Limited, an intermediary holding company of the
group, as part of a Management Incentive Plan ('the MIP').
The value of the award under the MIP is directly linked to the creation of significant growth in shareholder value as set out below:
• The value of the award will be determined by the achievement of stretching targets of market capitalisation growth of the group over the three-
year period starting on 16 June 2020 ('the Period').
• The value of the award under the MIP is capped at £50 million of gross value before tax for Mahmud and Carol and £10 million for Neil in the
event of achieving a market capitalisation of £7.554 billion (18% CAGR and 66% growth in market capitalisation from 16 June 2020). A market
capitalisation of less than £6.295 billion (11% CAGR) yields nil value.
• The MIP provides for adjustments to be made for increases in market capitalisation arising from corporate events, such as the issue of shares for
acquisitions, so that the benefits derived from the MIP only arise from organic growth and the MIP also provides clawback and malus provisions,
which allow repayment in defined circumstances.
• As explained in the Annual Statement by the Chairman of the Remuneration Committee on page 71, the executive directors have agreed to
an amendment to the terms of their MIP awards such that the vesting of the awards is also subject to the Committee being satisfied that the
Agenda for Change programme has been successfully implemented over the performance period.
80
81
ANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC// GOVERNANCE DIRECTORS’ REMUNERATION REPORT
CONTINUED
COMPOSITION OF THE
REMUNERATION COMMITTEE
The members of the Committee are Iain McDonald, Pierre
Cuilleret, Shaun McCabe and Brian Small. Executive
directors are invited to attend meetings, if requested by the
Committee, in order to provide information and advice, to
enable the Committee to make informed decisions. Each
director is, however, specifically excluded from any matter
concerning his own remuneration. Representatives of the
Committee’s retained advisers may also attend meetings
by invitation. The Company Secretary attends meetings as
secretary to the Committee.
ADVISERS TO THE REMUNERATION
COMMITTEE
During the year, the Committee received advice from
KPMG LLP. The total fees paid to KPMG LLP in respect of
its services during the year were £15,000 (2020: £61,850).
The Committee also appointed Korn Ferry to provide
advice on remuneration matters and reporting. The total
fees paid to Korn Ferry in respect of its services during the
year were £23,200 (2020: £nil). KPMG LLP and Korn
Ferry are signatories to the Remuneration Consultants
Group Code of Conduct and operate voluntarily under this
Code, which sets out the scope and conduct of the role of
executive remuneration consultants when advising UK listed
companies. The Committee regularly reviews the external
adviser relationship and is comfortable that the advice
received during the year was objective and independent. The
Committee received additional advice on the Management
Incentive Plan from Paul Hastings (Europe) LLP during the
year, for which fees of £8,625 (2020: £nil) were payable.
SHAREHOLDER VOTING AT AGM
The table below sets out the results of voting on the Directors’ Remuneration Report resolution
at the AGM held on 19 June 2020:
Resolution
For
Against
Withheld
Approve the Directors’
Remuneration Report
for the year ended 29 February
2020
677,473,350
(65.92%)
350,227,062
(34.08%)
10,171
The Committee has reflected on the level of votes cast against the above resolution and
has taken this into account when proposing the changes to the remuneration policy and its
implementation as set out in this report.
IMPLEMENTATION OF REMUNERATION POLICY FOR THE YEAR ENDING 28 FEBRUARY 2022 -
UNAUDITED
BASE SALARY
The annual base salaries (excluding any substitution allowance for a company pension foregone) of the executive directors are as follows.
The Committee has agreed salary increases of 3% with effect from 1 May 2021, as set out in the table below. These increases are in line with
the average increase for the wider workforce.
Mahmud Kamani
Carol Kane
John Lyttle
Neil Catto
Group Executive Chairman
Group Co-founder and Executive Director
Chief Executive
CFO
From 1 May
2021
£463,500
£463,500
£633,450
£309,000
From 1 May
2020
£450,000
£450,000
£615,000
£300,000
PENSION AND OTHER BENEFITS
Carol Kane, John Lyttle and Neil Catto receive a 6.2% compensatory salary element for electing to discontinue receiving a company pension due to
the pension cap provisions. This will be revised in 2023 to 5%, in line with the majority of colleagues’ pension contributions. Mahmud Kamani does
not receive a company pension contribution.
Carol Kane, John Lyttle and Neil Catto receive company health care benefits and life assurance. Carol Kane receives driver services and Mahmud
Kamani driver services and a company car and fuel.
ANNUAL BONUS
All of the executive directors are eligible to participate in the company-wide annual bonus plan. The Committee oversees the bonus plan, and any
bonus payments are at the discretion of the Committee. The maximum bonus payable for the year ending 28 February 2022 as a percentage of
salary will be as follows: Mahmud Kamani and Carol Kane 200%, John Lyttle 150% and Neil Catto 100%. The maximum bonus will be payable based
on performance measured over the single financial year ending 28 February 2022. The performance targets are based on a combination of financial
and non-financial performance measures. Of the total bonus payable, 45% will be based on EBITDA, 30% on revenue, 15% on continued progress
on the 2022 Agenda for Change milestones and 10% on the successful integration of the group’s newly acquired brands. The Remuneration
Committee will also have the discretion to scale back the entire bonus if it is considered that Agenda for Change has not been implemented
successfully over the financial year.
This choice of metrics reflects measures that have been identified as key indicators of the group’s success against its growth strategy, with non-
financial metrics introduced to provide for a more rounded assessment of performance and to ensure that the management team continues to
make progress on addressing the supply chain issues. The amount of bonus payable will be calculated as a percentage of base salary modified by a
factor linked to the performance targets. An equity deferral element for the bonus has been introduced such that a minimum of one-third of any
bonus must be invested in shares and held for at least two years. The remaining portion of the bonus will be payable in cash immediately after the
announcement of the financial results.
The annual bonus targets, in relation to the financial year ending 28 February 2022, are considered to be commercially sensitive at this stage.
Details of the targets, performance against those targets, and any payments resulting, will be disclosed in next year’s annual report on remuneration.
LONG-TERM INCENTIVE PLAN ('LTIP')
No new awards under the LTIP or any other long-term incentive arrangement will be made to executive directors during the financial year ending
28 February 2022.
ALL-EMPLOYEE SHARE PLANS
The board granted free shares in the financial year ended 28 February 2021. It is intended to grant a further issue of free shares to all employees in
the financial year ending 28 February 2022. The company offered HMRC-approved SAYE plans in each of the financial years ended from 2016 to
2021 and it is intended that a further SAYE grant be offered for the financial year ending 28 February 2022. The executive directors are eligible to
participate in the schemes on the same basis as other employees.
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ANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC// GOVERNANCE DIRECTORS’ REMUNERATION REPORT
CONTINUED
REMUNERATION FOR NON-EXECUTIVE DIRECTORS
The non-executive directors all receive a fee and annual allocation of shares each year to cover all their duties.
The current annual remuneration is:
Pierre Cuilleret NED
Iain McDonald NED and Chairman of Remuneration Committee
Shaun McCabe Chairman of Audit and Risk Committees
Brian Small
Deputy Chairman, SID, Chairman of Nomination Committee
The above remuneration will be reviewed annually by the board.
From 1 March 2021
From 1 March 2020
Share awards
£10,000
£10,000
£10,000
£20,000
Fees
£60,000
£70,000
£80,000
£120,000
Share awards
£10,000
£10,000
-
£20,000
Fees
£60,000
£70,000
-
£120,000
Iain McDonald
CHAIRMAN OF THE REMUNERATION COMMITTEE
4 May 2021
STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT
OF THE ANNUAL REPORT AND FINANCIAL STATEMENTS
The directors are responsible for preparing financial statements for each financial year, which
give a true and fair view, in accordance with applicable Jersey law and International Financial
Reporting Standards, of the state of affairs of the group and of the profit or loss of the group for
that period. In preparing those financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable accounting standards have been followed, subject to any material
departures disclosed and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to
presume that the company will continue in business.
The directors confirm that they have complied with the above requirements in preparing the
financial statements.
The directors are responsible for keeping proper accounting records that disclose with reasonable
accuracy at any time the financial position of the company and enable them to ensure that the
financial statements comply with the Companies (Jersey) Law, 1991. They are also responsible for
safeguarding the assets of the company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
On behalf of the board
John Lyttle
4 May 2021
Neil Catto
4 May 2021
84
85
ANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC// GOVERNANCE INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BOOHOO
OPINION
We have audited the consolidated financial
statements of boohoo group plc and its
subsidiaries (the ‘group’) for the year
ended 28 February 2021, which comprise
the Consolidated Statement of Financial
Position, the Consolidated Statement of
Comprehensive Income, the Consolidated
Statement of Changes in Equity, the
Consolidated Statement of Cash Flows and
notes to the financial statements, including
a summary of significant accounting policies.
The financial reporting framework that has
been applied in their preparation is applicable
law and International Financial Reporting
Standards (IFRSs) as adopted by the
European Union.
In our opinion:
• the financial statements give a true and fair
view of the state of the group’s affairs as at
28 February 2021 and of the group’s profit
for the year then ended;
• the group financial statements have been
properly prepared in accordance with
IFRSs as adopted by the European Union;
and
• the financial statements have been
prepared in accordance with the
requirements of the Companies (Jersey)
Law 1991.
BASIS FOR OPINION
We conducted our audit in accordance
with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards
are further described in the Auditor’s
responsibilities for the audit of the financial
statements section of our report. We are
independent of the group in accordance with
the ethical requirements that are relevant to
our audit of the financial statements in the
UK, including the FRC’s Ethical Standard
as applied to listed entities, and we have
fulfilled our other ethical responsibilities in
accordance with these requirements. We
believe that the audit evidence we have
obtained is sufficient and appropriate to
provide a basis for our opinion.
CONCLUSIONS RELATED
TO GOING CONCERN
OUR APPROACH
TO THE AUDIT
In designing our audit, we determined
materiality, as above, and assessed the risk
of material misstatement in the financial
statements. In particular, we looked at areas
requiring the directors to make subjective
judgements, for example in respect of
significant accounting estimates, including
inventory provision, returns provision, and
judgements related to the fair value of the
consideration in respect of the acquisition of
the NCI in PrettyLittleThing.com. We also
addressed the risk of management override
of internal controls, including evaluating
whether there was evidence of bias by the
directors that represents a risk of material
misstatement due to fraud.
A full scope audit was performed on the
complete financial information of the group’s
operating components located in the United
Kingdom, with the group’s key accounting
function for all being based in the same
location.
KEY AUDIT MATTERS
Key audit matters are those matters that, in
our professional judgement, were of most
significance in our audit of the financial
statements of the current period and include
the most significant assessed risks of material
misstatement (whether or not due to fraud)
we identified, including those which had the
greatest effect on: the overall audit strategy,
the allocation of resources in the audit; and
directing the efforts of the engagement team.
These matters were addressed in the context
of our audit of the financial statements as a
whole, and in forming our opinion thereon,
and we do not provide a separate opinion on
these matters.
In auditing the financial statements, we
have concluded that the director’s use of
the going concern basis of accounting in
the preparation of the financial statements
is appropriate. Our evaluation of the
directors’ assessment of the group’s ability
to continue to adopt the going concern
basis of accounting included obtaining
management’s assessment of going concern
and associated budgets for a minimum period
of 12 months from the date of approval of the
financial statements. We have reviewed the
inputs to the forecast financial information
for reasonableness, compared to historic
financial information, and stress-tested where
appropriate.
Based on the work we have performed,
we have not identified any material
uncertainties relating to events or conditions
that, individually or collectively, may cast
significant doubt on the group’s ability to
continue as a going concern for a period of
at least 12 months from when the financial
statements are authorised for issue.
Our responsibilities and the responsibilities
of the directors with respect to going concern
are described in the relevant sections of this
report.
OUR APPLICATION
OF MATERIALITY
The scope of our audit was influenced by our
application of materiality. We determined
materiality for the financial statements as
a whole to be £6.2m for the consolidated
financial statements using 5% of profit before
tax as a basis. We consider profit before tax
to be the most relevant determinant of the
group’s performance used by shareholders.
Whilst materiality for the financial statements
as a whole was set at £6.2m, each significant
component of the group was audited to an
overall materiality ranging between £3.9m
and £4.3m with performance materiality
set at 70% and a triviality threshold of 5%,
above which any differences noted have been
reported to the Audit Committee. We applied
the concept of materiality both in planning
and performing our audit, and in evaluating
the effect of misstatement.
Key audit matter
How the scope of our audit responded to the key audit matter
Acquisition of the 34% minority stake in PrettyLittleThing.com
[Note 1]
As part of the pre-existing shareholder agreement, boohoo had an
existing option to buy the remaining 34% non-controlling interest in
PrettyLittleThing.com Limited (‘PLT’) for market value or a lesser sum,
depending upon financial performance over the five years to 2022.
The performance period for the option commenced on 1 March 2017
and attracted an equity-settled share-based payment charge over the
five-year performance period in accordance with IFRS 2.
During FY2021, boohoo exercised this option and now holds
100% of the shares in PLT. The 34% stake was acquired for initial
consideration of £269.8 million, with a further £54 million of
contingent consideration, with the initial consideration settled through
shares in the Group totalling £107.9 million and an up-front cash
payment of £161.9 million. As part of the transaction, the share-based
payment charge under the option agreement was accelerated.
There is a risk that this transaction has not been appropriately
accounted for, and that it did not take place on arms-length terms.
There is a further risk that the share-based payment element of
the transaction has not been appropriately valued and recorded.
Our audit work in this area included the following:
• Obtaining copies of the original share purchase agreement in
respect of PLT, and the share purchase agreement relating to the
current year 34% interest acquired, and reviewing the key terms;
• Vouching cash and share elements of consideration to supporting
records;
• Obtaining and reviewing the reports produced by KPMG in respect
of the NCI acquisition, including the accounting treatment of the
transaction and the valuation of the consideration and the Non-
Compete agreement;
• Engaging auditor’s expert to review key inputs to fair value
calculations in respect of the contingent consideration and the
non-compete agreement, and reperform these calculations using
Monte-Carlo models, providing challenge to the work performed by
management’s expert;
• Reviewing the accounting entries made in respect of the pre-
existing share-based payment, and ensuring the charge was
appropriately accelerated in the year;
• Reviewing accounting entries made at acquisition date to ensure
compliance with IFRS 10;
• Reviewing disclosures made in the financial statements surrounding
the transaction to ensure compliance with IFRS.
Valuation of inventory [Note 1 and Note 16]
Our audit work in this area included the following:
Inventory is carried at the lower of cost and net realisable value.
The provision in respect of inventory requires significant judgement.
There is a risk that the provision is understated and inventory is
therefore not held at the lower of cost and net realisable value in
accordance with the group’s accounting policy.
• Discussing with management the rationale and methodology used
in making such provision in order to gain an understanding of key
assumptions and inputs to the model;
• Obtaining management’s year-end provision against inventory
calculation and performing the following:
− Agreement of the provision per stock listing to the financial
statements;
− Recalculation of the provision using the IT team to reproduce
underlying data;
− Prior year lookback – review of utilisation of FY20 provision in
FY21;
− Performing sensitivity analysis on the calculation;
− Assessing completeness of the provision;
− Testing accuracy of inputs to management’s model;
− Testing the mathematical accuracy of the model.
• For a sample of items included within the inventory listing at year
end, vouching to pre-year end purchase documentation and post-
year end sales information to ensure inventory is held at the lower of
cost and net realisable value.
86
87
ANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC/// FINANCIAL STATEMENTS INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BOOHOO
CONTINUED
Key audit matter
How the scope of our audit responded to the key audit matter
Returns provision [Note 1 and Note 20]
Our audit work in this area included the following:
The provision for sales returns is estimated based on recent historical
returns and management’s best estimates and is allocated to the
period in which the revenue is recorded. Actual returns could differ
from these estimates.
The group’s provisioning model takes into account current trends as
far as possible, product mix, seasonal change and other factors based
largely on historic events, with the output being the overall return rate
to be applied and resulting provision.
There is a risk that the returns provision is understated.
• Discussing with management the rationale and methodology used
in making such provision in order to gain an understanding of key
assumptions and inputs to the model;
• Obtained the management’s year end returns provision calculation
and performed the following:
− Agreeing underlying data used to the accounting records using the
IT team to reproduce the relevant reports;
− Prior year lookback – review of utilisation of FY20 provision in
FY21; review average PY monthly returns as well as actual returns
in March 2020 to assess reasonableness of the provision;
− Post-year end returns review – look at actual returns in March 2021;
− Performing sensitivity analysis on the calculation;
− Assessing completeness of the provision;
− Testing accuracy of inputs to the management’s model;
− Testing the mathematical accuracy of the model.
MATTERS ON WHICH WE ARE
REQUIRED TO REPORT BY
EXCEPTION
In the light of the knowledge and
understanding of the group and its
environment obtained in the course of
the audit, we have not identified material
misstatements in the directors’ report.
We have nothing to report in respect of the
following matters in relation to which the
Companies (Jersey) Law 1991 requires us to
report to you if, in our opinion:
• proper accounting records have not been
kept, or proper returns adequate for
our audit have not been received from
branches not visited by us; or
• the financial statements are not in
agreement with the accounting records; or
• we have not received all the information
and explanations we require for our audit.
RESPONSIBILITIES OF
DIRECTORS
As explained more fully in the statement
of directors’ responsibilities, the directors
are responsible for the preparation of the
financial statements and for being satisfied
that they give a true and fair view, and
for such internal control as the directors
determine is necessary to enable the
preparation of financial statements that are
free from material misstatement, whether
due to fraud or error.
In preparing the group financial statements,
the directors are responsible for assessing the
group’s ability 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.
OTHER INFORMATION
The other information comprises the
information included in the annual report,
other than the financial statements and
our auditor’s report thereon. The directors
are responsible for the other information
contained within the annual report. Our
opinion on the group financial statements
does not cover the other information and
we do not express any form of assurance
conclusion thereon. Our responsibility is
to read the other information and, in doing
so, consider whether the other information
is materially inconsistent with the financial
statements or our knowledge obtained in
the course of the audit or otherwise appears
to be materially misstated. If we identify
such material inconsistencies or apparent
material misstatements, we are required
to determine whether this gives rise to
a material misstatement in the financial
statements themselves. If, based on the
work we have performed, 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.
A further description of our responsibilities
for the audit of the financial statements
is located on the Financial Reporting
Council’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms
part of our auditor’s report.
USE OF OUR REPORT
This report is made solely to the company’s
members, as a body, in accordance with
Article 113A of the Companies (Jersey) Law
1991. Our audit work has been undertaken
so that we might state to the company’s
members those matters we are required
to state to them in an auditor’s report and
for no other purpose. To the fullest extent
permitted by law, we do not accept or assume
responsibility to anyone, other than the
company and the company’s members as a
body, for our audit work, for this report, or for
the opinions we have formed.
Mark Ling (Engagement Partner)
For and on behalf of PKF Littlejohn LLP
Recognised Auditor
London, UK
15 Westferry Circus
Canary Wharf
London E14 4HD
4 May 2021
AUDITOR’S
RESPONSIBILITIES FOR THE
AUDIT OF THE FINANCIAL
STATEMENTS
Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are 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
ISAs (UK) 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 these financial
statements.
Irregularities, including fraud, are instances
of non-compliance with laws and regulations.
We design procedures in line with our
responsibilities, outlined above, to detect
material misstatements in respect of
irregularities, including fraud. The extent
to which our procedures are capable of
detecting irregularities, including fraud is
detailed below:
• We obtained an understanding of the
group and the sector in which it operates
to identify laws and regulations that could
reasonably be expected to have a direct
effect on the financial statements. We
obtained our understanding in this regard
through discussions with management and
the internal legal team. We also selected
a specific audit team based on experience
with auditing entities within this industry
facing similar audit and business risks.
• We determined the principal laws and
regulations relevant to the group in this
regard to be those arising from:
− AIM Rules
− UK employment law
− Local tax laws and regulations
• We designed our audit procedures
to ensure the audit team considered
whether there were any indications of
non-compliance by the group with those
laws and regulations. These procedures
included, but were not limited to:
− Making enquiries of management;
− A review of board minutes;
− A review of legal ledger accounts;
− A review of RNS announcements;
− Discussions with internal legal
personnel, and liaising with external legal
consultants;
− Review of internal and external reports
on key practices, including supply chain
and payroll reviews.
• We also identified the risks of material
misstatement of the financial statements
due to fraud. Aside from the non-
rebuttable presumption of a risk of fraud
arising from management override of
controls, we did not identify any significant
fraud risks.
• As in all of our audits, we addressed the
risk of fraud arising from management
override of controls by performing audit
procedures which included, but were not
limited to: the testing of journals, reviewing
accounting estimates for evidence of bias;
and evaluating the business rationale of any
significant transactions that are unusual or
outside the normal course of business.
Because of the inherent limitations of
an audit, there is a risk that we will not
detect all irregularities, including those
leading to a material misstatement in the
financial statements or non-compliance
with regulation. This risk increases the more
that compliance with a law or regulation is
removed from the events and transactions
reflected in the financial statements, as
we will be less likely to become aware of
instances of non-compliance. The risk is also
greater regarding irregularities occurring due
to fraud rather than error, as fraud involves
intentional concealment, forgery, collusion,
omission or misrepresentation.
88
89
ANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC/// FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 28 FEBRUARY 2021
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 28 FEBRUARY 2021
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Amortisation of acquired intangibles
Other administrative expenses
Other income
Operating profit
Finance income
Finance expense
Profit before tax
Taxation
Profit for the year
Profit for the year attributable to:
Owners of the parent company
Non-controlling interests
Total other comprehensive income for the year
Impact of adoption of IFRS 16
Loss reclassified to profit and loss during the year
Fair value gain/(loss) on cash flow hedges during the year 1
Total comprehensive income for the year
Total comprehensive income attributable to:
Owners of the parent company
Non-controlling interests
Earnings per share
Basic
Diluted
1. Net fair value gains on cash flow hedges will be reclassified to profit or loss during the three years to 29 February 2024.
All activities relate to continuing operations. Notes 1 to 30 form part of these financial statements.
Note
2
3
4
6
10
7
2021
£ million
1,745.3
(800.1)
945.2
(422.0)
(400.1)
(5.5)
(394.6)
1.0
124.1
0.9
(0.3)
124.7
(31.3)
93.4
90.7
2.7
93.4
-
9.0
21.2
123.6
120.9
2.7
123.6
7.43p
7.25p
2020
£ million
1,234.9
(568.6)
666.3
(278.3)
(297.3)
(5.1)
(292.2)
0.2
90.9
1.7
(0.4)
92.2
(19.3)
72.9
63.7
9.2
72.9
(0.5)
1.3
(13.6)
60.1
50.9
9.2
60.1
5.48p
5.35p
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Right-of-use assets
Financial assets
Deferred tax
Current assets
Inventories
Trade and other receivables
Financial assets
Current tax asset
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Provisions
Interest-bearing loans and borrowings
Lease liabilities
Financial liabilities
Current tax liability
Total current liabilities
Non-current liabilities
Interest-bearing loans and borrowings
Lease liabilities
Financial liabilities
Deferred tax
Total liabilities
Net assets
Equity
Share capital
Shares to be issued
Share premium
Hedging reserve
EBT reserve
Other reserves
Non-controlling interest
Retained earnings
Total equity
Note
2021
£ million
2020
£ million
11
12
13
27
15
16
17
27
18
19
20
21
22
27
21
22
27
15
23
24
25
118.3
141.6
16.7
13.1
3.2
292.9
144.9
40.6
17.1
4.4
276.0
483.0
775.9
(222.9)
(53.5)
-
(6.7)
(2.6)
-
(285.7)
-
(11.6)
(1.9)
(4.2)
(303.4)
472.5
12.6
31.9
916.2
25.7
(56.5)
(795.2)
-
337.8
472.5
42.3
119.2
14.6
4.5
6.0
186.6
99.1
31.8
6.6
-
245.4
382.9
569.5
(165.5)
(29.3)
(2.4)
(5.4)
(8.7)
(6.6)
(217.9)
(2.4)
(10.8)
(6.9)
(3.6)
(241.6)
327.9
11.7
-
608.4
(4.5)
(17.1)
(515.2)
17.3
227.3
327.9
Notes 1 to 30 form part of these financial statements.
These financial statements of boohoo group plc, registered number 114397, on pages 90 to 118 were approved by the board of directors on
4 May 2021 and were signed on its behalf by:
John Lyttle
DIRECTORS
Neil Catto
90
91
ANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC/// FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 28 FEBRUARY 2021
Share
capital
£ million
11.6
Shares to
be issued
£ million
-
Share
premium
£ million
606.1
Hedging
reserve
£ million
7.8
EBT
reserve
£ million
(2.2)
Other
reserves
£ million
(515.2)
Non-
controlling
interest
£ million
8.4
Retained
earnings
£ million
153.9
Total
equity
£ million
270.4
(0.5)
63.7
(0.5)
72.9
-
-
63.2
-
10.5
2.0
-
1.3
(13.6)
60.1
(12.2)
11.0
2.0
-
-
-
9.2
-
-
9.2
0.3
0.5
-
-
-
-
-
-
-
(14.9)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2.3
(2.3)
-
(17.1)
-
(515.2)
(3.4)
17.3
-
227.3
(3.4)
327.9
-
-
-
-
(39.4)
-
-
-
-
-
-
-
0.8
-
-
2.7
90.7
93.4
-
-
2.7
(0.2)
0.5
0.1
-
-
90.7
-
19.2
0.6
9.0
21.2
123.6
131.6
19.7
0.7
(281.3)
(20.4)
-
(131.5)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2.3
-
-
-
-
-
608.4
-
-
-
-
169.8
-
-
31.9
138.0
-
-
1.3
(13.6)
(12.3)
-
-
-
-
-
-
(4.5)
-
9.0
21.2
30.2
-
-
-
-
-
31.9
-
916.2
-
25.7
-
(56.5)
0.5
(795.2)
-
-
-
337.8
0.5
472.5
Balance at 28 February 2019
Impact of adoption of IFRS 16
Profit for the year
Other comprehensive
income/(expense):
Loss reclassified to profit and
loss in revenue
Fair value loss on cash flow
hedges during the year
Total comprehensive income
for the year
Issue of shares
Share-based payments credit
Excess taxation on share-
based payments
Translation of foreign
operations
Non-controlling interests’
increase in share of net assets
Dividend paid to non-
controlling interests
Balance at 29 February 2020
Profit for the year
Other comprehensive
income/(expense):
Loss reclassified to profit and
loss in revenue
Fair value gain on cash flow
hedges during the year
Total comprehensive income
for the year
Issue of shares
Share-based payments credit
Excess taxation on share-
based payments
Acquisition of non-controlling
interest (see note 1)
Translation of foreign
operations
Balance at 28 February 2021
-
-
-
-
-
0.1
-
-
-
-
-
11.7
-
-
-
-
0.6
-
-
0.3
-
12.6
Cash flows from operating activities
Profit for the year
Adjustments for:
Share-based payments charge
Depreciation charges and amortisation
Loss on sale of fixed assets
Finance income
Finance expense
Tax expense
Increase in inventories
Increase in trade and other receivables
Increase in trade and other payables
Cash generated from operations
Tax paid
Net cash generated from operating activities
Cash flows from investing activities
Acquisition of intangible assets
Acquisition of property, plant and equipment
Acquisition of non-controlling interest in PrettyLittleThing
Finance income received
Net cash used in investing activities
Cash flows from financing activities
Proceeds from the issue of ordinary shares
Share issue costs written off to share premium
Purchase of own shares by EBT
Finance expense paid
Dividend paid to non-controlling interests
Lease payments
Repayment of borrowings
Net cash used in financing activities
Increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Notes 1 to 30 form part of these financial statements.
Note
2021
£ million
2020
£ million
16
17
19
11
12
1
93.4
19.7
29.8
-
(0.9)
0.3
31.3
173.6
(45.8)
(8.8)
82.1
201.1
(38.3)
162.8
(85.7)
(37.0)
(161.9)
1.2
(283.4)
204.9
(3.5)
(39.4)
(0.1)
-
(5.9)
(4.8)
151.2
30.6
245.4
276.0
72.9
11.0
24.7
0.2
(1.7)
0.4
19.3
126.8
(32.3)
(9.4)
42.2
127.3
(11.6)
115.7
(23.2)
(22.4)
-
1.8
(43.8)
2.7
-
(14.9)
(0.3)
(3.4)
(6.0)
(2.4)
(24.3)
47.6
197.8
245.4
Notes 1 to 30 form part of these financial statements.
92
93
ANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC/// FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS
(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUED
1 ACCOUNTING POLICIES
GENERAL INFORMATION
boohoo group plc operates as a multi-brand online retailer, based in the UK and is a public limited company incorporated and domiciled in Jersey
and listed on the Alternative Investment Market (‘AIM’) of the London Stock Exchange. Its registered office address is: 12 Castle Street, St Helier,
Jersey, JE2 3RT. The company was incorporated on 19 November 2013.
BASIS OF PREPARATION
The consolidated financial statements of the group have been approved by the directors and prepared on a going concern basis in accordance with
International Financial Reporting Standards as adopted by the European Union (Adopted IFRSs), IFRS IC Interpretations and the Companies
(Jersey) Law 1991.
The financial statements have been approved on the assumption that the group and company remain a going concern as explained on page 62.
The continued impact of the COVID-19 crisis on the group is not expected to change materially over the next year, provided that governments’
actions in controlling the virus continue to be effective. Trading during the year to February 2021 has shown that online sales have been resilient
during lockdowns in many countries. The group has substantial cash resources and undrawn credit facilities sufficient to continue solvent trading in
the face of an unforeseen downturn in demand. As of the date of this report, we are continuing to operate, with the warehouses functioning under
government-compliant safe working conditions and many office staff working from home.
NEW AND AMENDED STANDARDS ADOPTED BY THE GROUP
The following new standards, and amendments to standards, have been adopted by the group for the first time during the year commencing
1 March 2020:
• Amendments to References to the Conceptual Framework in IFRS Standards
• Amendments to IFRS 3: Business Combinations
• Amendments to IAS 1 and IAS 8: Definition of Material
STANDARDS, AMENDMENTS AND INTERPRETATIONS TO EXISTING STANDARDS THAT
ARE NOT YET EFFECTIVE AND HAVE NOT BEEN EARLY ADOPTED BY THE GROUP
AND/OR COMPANY
The following standards have been published and are mandatory for accounting periods beginning after 1 March 2020 but have not been early
adopted by the group or company and could have an impact on the group and company financial statements:
• Amendments to IAS 1: Presentation of Financial Statements: Classification of Liabilities as Current or Non-current and Amendments to IAS 1:
Classification of Liabilities as Current or Non-current – Deferral of Effective Date – effective 1 January 2023
• Amendments to IFRS 3: Business Combinations – Reference to the Conceptual Framework – effective 1 January 2022
• Amendments to IAS 16: Property, Plant and Equipment – effective 1 January 2022
• Amendments to IAS 37: Provisions, Contingent Liabilities and Contingent Assets – effective 1 January 2022
• Annual Improvements to IFRS Standards 2018-2020 Cycle – 1 January 2022
Measurement convention
The consolidated financial statements have been prepared under the historical cost convention, excluding financial assets and financial liabilities
(including derivative instruments) held at fair value through profit or loss. The principal accounting policies adopted in the preparation of these
financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Basis of consolidation
The group financial statements consolidate those of its subsidiaries and the Employee Benefit Trust. All intercompany transactions between group
companies are eliminated.
Subsidiaries are entities controlled by the group. The group controls an entity when the group is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power over the entity.
In assessing control, the group takes into consideration potential voting rights that are currently exercisable. The acquisition date is the date on
which control is transferred to the acquirer. Subsidiary undertakings acquired during the year are accounted for using the acquisition method of
accounting. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences
until the date that control ceases. The cost of the acquisition is the aggregate of the fair values of the assets and liabilities and equity instruments
issued on the acquisition date. The excess of the cost of acquisition over the group’s share of the fair values of the identifiable net assets acquired
is recorded as goodwill. If the cost of acquisition is less than the fair value of the assets, the difference is recognised directly in the statement of
comprehensive income.
The Employee Benefit Trust is considered to be a special purpose entity in which the substance of the relationship is that of control by the group in
order that the group may benefit from its control. The assets held by the trust are consolidated into the group.
Business combinations
The group uses the acquisition method of accounting for business combinations of entities not under common control. Separable identifiable assets
and liabilities are measured initially at their fair values on the acquisition date. Any non-controlling interest is measured at either fair value or at
the non-controlling interest’s share of the acquiree’s net assets. Acquisition costs are expensed as incurred. The excess of any consideration paid
over the fair value of the net assets is recognised as goodwill and any shortfall of consideration paid against the fair value of net assets is recognised
directly in the statement of comprehensive income.
Intangible assets
Trademark and licences are stated at cost less accumulated amortisation and impairment losses and are amortised over their expected lives of ten
years and charged to administrative expenses. Customer lists are amortised over expected customer lifetime value of three years.
The costs of acquiring or developing software are recorded as intangible assets and stated at cost less accumulated amortisation and impairment
losses. The costs include the payroll costs of employees directly associated with the project and other direct external material and service
costs. Costs are capitalised only where there is an identifiable project that will bring future economic benefit. Other website development and
maintenance costs are expensed in the statement of comprehensive income. Software costs are amortised over three to five years based on their
estimated useful lives and charged to administrative expenses in the statement of comprehensive income.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Where parts of an item of property, plant
and equipment have different useful lives, they are accounted for as separate property, plant and equipment. Cost includes expenditures that are
directly attributable to the acquisition of the asset. The cost of each item of property, plant and equipment is written off evenly over its estimated
remaining useful life. Depreciation is charged to the statement of comprehensive income on a straight-line basis over the estimated useful lives of
each part of an item of property, plant and equipment, as follows: short leasehold alterations over the life of the lease or 2% if it is likely the lease is
extended; buildings 2%; motor vehicles and computer equipment 33%; and fixtures and fittings 33%, 20%, 10% or 7%. The assets’ residual values
and useful lives are reviewed and adjusted, if appropriate, at each reporting date.
Financial instruments
Financial instruments are recognised at fair value and subsequently re-measured at fair value at the end of each reporting date or at amortised cost.
Further details are shown in note 27.
Derivative financial instruments and cash flow hedges
The group holds derivative financial instruments to hedge its foreign currency exposures. These derivatives, classified as cash flow hedges, are
initially recognised at fair value and then re-measured at fair value at the end of each reporting date. Hedging instruments are documented at
inception and effectiveness is tested throughout their duration. Changes in the value of cash flow hedges are recognised in other comprehensive
income and any ineffective portion is immediately recognised in the income statement. If the firm commitment or forecast transaction that is the
subject of a cash flow hedge results in the recognition of a non-financial asset or liability, then at the time the asset is recognised, the associated
gains or losses on the derivative that had been previously recognised in other comprehensive income are included in the initial measurement of
the asset or liability. For hedges that do not result in the recognition of an asset or liability, amounts deferred in other comprehensive income are
recognised in the statement of comprehensive income in the same period in which the hedged item affects net profit.
To qualify for hedge accounting, the hedging relationship must meet all of the following requirements:
• There is an economic relationship between the hedged item and the hedging instrument
• The effect of credit risk does not dominate the value changes that result from that hedging relationship
• The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the entity actually uses to
hedge that quantity of hedged item
94
95
ANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC/// FINANCIAL STATEMENTS (FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUED
1 ACCOUNTING POLICIES CONTINUED
At inception of the hedge relationship, the group documents the economic relationship between hedging instruments and hedged items, including
whether changes in the cash flows of the hedging instruments are expected to offset changes in the cash flows of hedged items. The group
documents its risk management objective and strategy for undertaking its hedge transactions.
Hedge ineffectiveness may occur due to:
• Fluctuation in volume of hedged item caused due to operational changes
• Index basis risk of hedged item vs hedging instrument
• Credit risk as a result of deterioration of credit profile of the counterparties
Hedge ineffectiveness in relation to all designated hedges was negligible during 2021 and 2020.
Further details of derivative financial instruments including fair value measurements are disclosed in note 27.
Trade and other receivables
Trade receivables (including supplier advances) are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less provision for impairment. Under IFRS 9, the group elected to use the simplified approach to measure the loss allowance at
an amount equal to lifetime expected credit losses for trade receivables and contract assets that result from transactions that are within the scope
of IFRS 15, irrespective of whether they contain a significant financing component or not. The group establishes a provision for impairment of
trade receivables when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the
receivables. Significant financial difficulties of the counterparty, probability that the counterparty will enter bankruptcy or financial reorganisation,
and default in or delinquency in payments are considered indicators that the trade receivable is impaired. In addition, IFRS 9 requires the group to
consider forward-looking information and the probability of default when calculating expected credit losses. The measurement of expected credit
losses reflects an unbiased and probability-weighted amount that is determined by evaluating the range of possible outcomes as well as incorporating
the time value of money. The group considers reasonable and supportable customer-specific and market information about past events, current
conditions and forecasts of future economic conditions when measuring expected credit losses. The amount of the provision is the difference
between the carrying amount and the present value of estimated future cash flows of the asset, discounted, where material, at the original effective
interest rate. The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the
income statement within administrative expenses. When a trade receivable is uncollectable, it is written off against the allowance account for trade
receivables. Subsequent recoveries of amounts previously written off are credited against administrative expenses in the income statement.
Trade and other payables
Trade and other payables are recorded initially at fair value. Subsequent to this, they are measured at amortised cost.
Provisions
Provisions are accounted for where there is a liability of uncertain timing or amount, such as a legal or constructive obligations, where it is probable
that an outflow of cash or other economic resource will be required to settle the provision.
Inventories
Inventories are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. Inventories are
valued on a first in, first out basis. Inventory includes the cost price of estimated returns.
Cash and cash equivalents
Cash and cash equivalents, for the purpose of the cash flow statement and the statement of financial position, comprises cash in bank.
Revenue
Revenue is attributable to the one principal activity of the business. Revenue represents net invoiced sales of goods, including carriage receipts,
excluding value added tax. Revenue from the sale of goods is recognised when the customer has received the products, which is when it is
considered that the performance obligations have been met, and is adjusted for actual returns and a provision for expected returns. Internet sales
are paid by customers at the time of ordering using a variety of payment methods. Wholesale sales are paid in accordance with agreed credit terms
with business customers. A provision for returns, based on historical customer return rates, is deducted from revenue and included in provisions
within trade and other payables.
Rebates
Retrospective rebates from suppliers are accounted for in the period to which the rebate relates to the extent that it is reasonably certain that the
rebate will be received. Early settlement discounts are taken when payment is made.
Leases
The group assesses whether a contract is or contains a lease, at inception of the contract. The group recognises a right-of-use asset and a
corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with
a lease term of 12 months or less) and leases of low value assets (less than £0.1 million p.a.), which fall out of IFRS 16 scope and are charged to
the statement of comprehensive income on a straight-line basis over the period of the lease. The lease liability is initially measured at the present
value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be
readily determined, the group uses its incremental borrowing rate. The lease liability is presented as a separate line in the consolidated statement of
financial position. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability based on the
effective interest method and by reducing the carrying amount to reflect the lease payments made.
Right-of-use assets
The right-of-use asset comprises the initial measurement of the corresponding lease liability, lease payments made at or before the
commencement date and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.
Where the group has an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying
asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured under IAS 37. The costs are
included in the related right-of-use asset, unless those costs are incurred to produce inventories. The right-of-use asset is presented as a separate
line in the balance sheet. For subsequent measurement, right-of-use assets are depreciated over the shorter of the lease term and useful life of the
underlying asset.
Finance costs
Interest payable is recognised in the statement of comprehensive income as it accrues in respect of the effective interest rate method.
Finance income
Interest receivable is recognised in the statement of comprehensive income as it is earned.
Pension costs
The group contributes to a Group Personal Pension Scheme for certain employees under a defined contribution scheme. The costs of these
contributions are charged to the statement of comprehensive income on an accruals basis as they become payable under the scheme rules.
Share-based payments
The group issues equity-settled share-based payments in the parent company to certain employees in exchange for services rendered. These
awards are measured at fair value on the date of the grant using an option pricing model and expensed in the statement of comprehensive income
on a straight-line basis over the vesting period after making an allowance for the estimated number of shares that are estimated will not vest. The
level of vesting is reviewed and adjusted annually. Free shares awarded are expensed immediately.
Taxation
Tax on the profit for the year comprises current and deferred tax. Tax is recognised in the statement of comprehensive income except to the extent
that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date,
and any adjustments to tax payable in respect of previous years.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the reporting date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised.
Deferred tax is provided for on the fair value of intangible assets acquired in subsidiaries.
Foreign currency translation
The results and cash flows of overseas subsidiaries are translated at the average monthly exchange rates during the period. The statement of
financial position of each overseas subsidiary is translated at the year end rate. The resulting exchange differences are recognised in a translation
reserve in equity and are reported in other comprehensive income.
Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates on the day of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the year end rate and exchange
differences are recognised in the statement of comprehensive income.
96
97
NOTES TO THE FINANCIAL STATEMENTSANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC/// FINANCIAL STATEMENTS (FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUED
1 ACCOUNTING POLICIES CONTINUED
Significant estimates and judgements
The preparation of financial statements in conformity with IFRS as adopted by the EU requires management to make judgements, estimates and
assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. The estimates and
assumptions are based on historical experience and various other factors believed to be reasonable under the circumstances. Actual results could
differ from these estimates and any subsequent changes are accounted for when such information becomes available. The judgements, estimates
and assumptions that are the most subjective or complex are discussed below:
Returns provision
The provision for sales returns is estimated based on recent historical returns and management’s best estimates and is allocated to the period
in which the revenue is recorded. Actual returns could differ from these estimates. The historic difference between the provision estimate and
the actual results, known at a later stage, has never been, nor is expected to be, material. A difference of 1%pt in the percentage of sales returns
rate would have an impact of +/- £1.6 million on reported revenue and +/- £0.8 million on operating profit. The choice of a 1%pt change for the
determination of sensitivity represents a reasonable, but not extreme, variation in the return rate.
Claims provision
Management makes judgements in respect of the likelihood of the realisation of a claim. The provision for claims is then estimated from the
settlement amount of similar claims in the relevant jurisdiction, with assistance from legal counsel. Factors taken into account are the degree of loss
to the appealing party, the likelihood of success in defence and the possible bases of the amount of the settlement claims.
Inventory valuation
Inventory is carried at the lower of cost or net realisable value. The judgement of net realisable value may be different from the future actual value
realised, but that difference is not expected ever to be material. A difference of 1%pt in the provision as a percentage of gross inventory would give
rise to a difference of +/- £1.4m in gross margin. The choice of a 1%pt change for the determination of sensitivity represents a reasonable, but not
extreme, variation in the provision.
Acquisition of the non-controlling interest in PrettyLittleThing.com Limited
The remaining 34% non-controlling interest in PrettyLittleThing was acquired in May 2020, ahead of the original 2022 option-to-acquire date,
for a combination of cash and shares with initial total consideration £269.8 million, potentially rising to £323.8 million subject to the group’s share
price averaging 491 pence per share over a six-month period up until a longstop date of 14 March 2024. If this condition is not met, (although
management has judged it will be met), this final £54 million element of consideration will lapse.
The amount written off to equity, in other reserves, as shown in the consolidated statement of changes in equity is as follows:
Cash consideration
Share consideration
Fair value of future performance-related share consideration
Less: carrying value of non-controlling interest
Amount written off to other reserves
£ million
161.9
107.9
31.9
(20.4)
281.3
2 SEGMENTAL ANALYSIS
IFRS 8, ‘Operating Segments’, requires operating segments to be determined based on the group’s internal reporting to the chief operating
decision maker. The chief operating decision maker is considered to be the executive board, which has determined that the primary segmental
reporting format of the group for the year ending February 2021 is by geographic region. This is a change to the segments reported in previous
periods, since the group has become multi-brand and now focusses on geographic performance at a group level and not on individual brand
performance. The group strategy is to increase market share in each territory using the optimum mix of brands that is appropriate for each market,
taking into account factors such as consumer preference, established presence and brand appeal.
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses - other
Amortisation of acquired intangibles
Other income
Operating profit
Finance income
Finance expense
Profit before tax
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses - other
Amortisation of acquired intangibles
Other income
Operating profit
Finance income
Finance expense
Profit before tax
Year ended 28 February 2021
Rest of
Europe
£ million
244.7
(107.1)
137.6
-
-
-
-
-
-
-
-
USA
£ million
435.1
(174.5)
260.6
-
-
-
-
-
-
-
-
Rest of
world
£ million
120.4
(54.3)
66.1
-
-
-
-
-
-
-
-
Year ended 29 February 2020
Rest of
Europe
£ million
188.4
(79.2)
109.2
-
-
-
-
-
-
-
-
USA
£ million
263.6
(105.9)
157.7
-
-
-
-
-
-
-
-
Rest of
world
£ million
103.5
(45.7)
57.8
-
-
-
-
-
-
-
-
Total
£ million
1,745.3
(800.1)
945.2
(422.0)
(394.6)
(5.5)
1.0
124.1
0.9
(0.3)
124.7
Total
£ million
1,234.9
(568.6)
666.3
(278.3)
(292.2)
(5.1)
0.2
90.9
1.7
(0.4)
92.2
UK
£ million
945.1
(464.2)
480.9
-
-
-
-
-
-
-
-
UK
£ million
679.4
(337.8)
341.6
-
-
-
-
-
-
-
-
Due to the nature of its activities, the group is not reliant on any individual customers.
No analysis of the assets and liabilities of each operating segment is provided to the chief operating decision maker in the monthly management
accounts; therefore, no measure of segmental assets or liabilities is disclosed in this note. Non-current assets located outside the UK comprise
offices in the USA with a net book value of £2.5 million.
98
99
NOTES TO THE FINANCIAL STATEMENTSANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC/// FINANCIAL STATEMENTS (FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUED
3 OTHER INCOME
Property rental income
4
FINANCE INCOME AND EXPENSE
Finance income: Bank interest received
Finance expense: Loan interest paid
Finance expense: IFRS 16 lease interest
5 AUDITOR’S REMUNERATION
Audit of these financial statements
Disclosure below based on amounts receivable in respect of services to the group
Amounts receivable by auditors and their associates in respect of:
Audit of financial statements of subsidiaries pursuant to legislation
Other services relating to taxation
2021
£ million
1.0
2020
£ million
0.2
2021
£ million
0.9
(0.1)
(0.2)
(0.3)
2020
£ million
1.7
(0.1)
(0.3)
(0.4)
2021
£ million
-
2020
£ million
-
0.4
-
0.4
0.2
0.2
0.4
The auditor’s remuneration in 2021 is payable to PKF Littlejohn LLP, whereas that in 2020 was payable to PricewaterhouseCoopers LLP.
6 PROFIT BEFORE TAX
Profit before tax is stated after charging:
Short-term operating lease rentals for buildings
Equity-settled share-based payment charges
Acquisition and restructuring costs
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Amortisation of intangible assets
Amortisation of acquired intangible assets
2021
£ million
0.2
19.7
0.3
14.4
5.7
4.2
5.5
2020
£ million
0.2
11.0
1.3
11.5
5.1
3.0
5.1
7
EARNINGS PER SHARE
Basic earnings per share is calculated by dividing profit after tax attributable to members of the holding company by the weighted average number
of shares in issue during the year. Own shares held by the Employee Benefit Trust are eliminated from the weighted average number of shares.
Diluted earnings per share is calculated by dividing the profit after tax attributable to members of the holding company by the weighted average
number of shares in issue during the year, adjusted for potentially dilutive share options.
Weighted average shares in issue for basic earnings per share
Dilutive share options
Weighted average shares in issue for diluted earnings per share
Earnings (£ million)
Basic earnings per share
Diluted earnings per share
Earnings (£ million)
Adjusting items:
Amortisation of intangible assets arising on acquisitions
Share-based payments charges
Share-based payment charge adjustment for non-controlling interests
Adjustment for tax
Pro forma non-controlling interest adjustment to 34%
Adjusted earnings
Adjusted basic earnings per share
Adjusted diluted earnings per share
2021
1,220.7
31.4
1,252.1
90.7
7.43p
7.25p
90.7
5.5
19.7
(0.7)
(4.8)
(1.9)
108.5
8.89p
8.67p
2020
1,161.4
27.7
1,189.1
63.7
5.48p
5.35p
63.7
5.1
11.0
(0.7)
(3.0)
(6.2)
69.9
6.02p
5.88p
Adjusted earnings and adjusted earnings per share gives a more consistent measure of the underlying performance of the business excluding non-
cash accounting charges relating to the amortisation of intangible assets valued upon acquisitions, non-cash share-based payment charges and
increasing the non-controlling interest in PrettyLittleThing.com Limited to 34% of net profit for the year, as in previous years (see note 1).
8 STAFF NUMBERS AND COSTS
The average monthly number of persons employed by the group (including directors) during the year, analysed by category, was as follows:
Administration
Distribution
The aggregate payroll costs of these persons were as follows:
Wages and salaries
Social security costs
Post-employment benefits
Equity-settled share-based payment charges
Number of employees
2021
1,767
1,275
3,042
2021
£ million
106.6
9.2
2.5
19.7
138.0
2020
1,599
1,020
2,619
2020
£ million
84.9
8.7
1.7
11.0
106.3
100
101
NOTES TO THE FINANCIAL STATEMENTSANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC/// FINANCIAL STATEMENTS (FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUED
9 DIRECTORS’ AND KEY MANAGEMENT COMPENSATION
11
INTANGIBLE ASSETS
Short-term employee benefits
Post-employment benefits
Equity-settled share-based payment charges
2021
£ million
17.6
0.2
2.7
20.5
2020
£ million
15.1
0.2
2.2
17.5
Directors’ and key management compensation comprises the group directors and executive committee members. Directors’ emoluments and
pension payments of boohoo group plc are detailed in the directors’ remuneration report on page 76.
10 TAXATION
Analysis of charge in year
Current tax on income for the year
Adjustments in respect of prior year taxes
Deferred taxation
Tax on profit
2021
£ million
2020
£ million
27.0
1.1
3.2
31.3
19.0
0.6
(0.3)
19.3
Income tax expense computations are based on the jurisdictions in which taxable profits were earned at prevailing rates in those jurisdictions.
The company is subject to Jersey income tax at the standard rate of 0%. The reconciliation below relates to tax incurred in the UK where the group
is tax resident. The total tax charge differs from the amount computed by applying the UK rate of 19.0% for the year (2020: 19.0%) to profit
before tax as a result of the following:
Profit before tax
Profit before tax multiplied by the standard rate of corporation tax of the UK of 19.0% (2020: 19.0%)
Effects of:
Expenses not deductible for tax purposes
Change in deferred tax rate
Adjustments in respect of prior year taxes
Overseas tax differentials
Depreciation on ineligible assets
Tax on profit
Tax recognised in the statement of changes in equity
Deferred tax (debit)/credit on movement in tax base of share options
No current tax was recognised in other comprehensive income (2020: £nil).
2021
£ million
124.7
23.7
2020
£ million
92.2
17.5
5.8
-
1.1
0.2
0.5
31.3
(0.2)
0.4
0.1
0.6
-
0.7
19.3
2.2
Cost
Balance at 28 February 2019
Additions
Disposals
Balance at 29 February 2020
Additions
Disposals
Balance at 28 February 2021
Accumulated amortisation
Balance at 28 February 2019
Amortisation for year
Disposals
Balance at 29 February 2020
Amortisation for year
Disposals
Balance at 28 February 2021
Net book value
At 28 February 2019
At 29 February 2020
At 28 February 2021
Patents and
licences
£ million
Trademarks
£ million
Customer
lists
£ million
Computer
software
£ million
Total
£ million
0.6
-
-
0.6
-
-
0.6
0.3
0.1
-
0.4
0.1
-
0.5
0.3
0.2
0.1
25.1
19.1
-
44.2
71.4
-
115.6
5.2
3.4
-
8.6
5.3
-
13.9
19.9
35.6
101.7
5.8
0.3
-
6.1
2.0
-
8.1
4.1
1.8
-
5.9
0.2
-
6.1
1.7
0.2
2.0
11.9
3.8
(1.1)
14.6
12.3
(3.4)
23.5
6.6
2.8
(1.1)
8.3
4.1
(3.4)
9.0
5.3
6.3
14.5
43.4
23.2
(1.1)
65.5
85.7
(3.4)
147.8
16.2
8.1
(1.1)
23.2
9.7
(3.4)
29.5
27.2
42.3
118.3
Within the statement of comprehensive income, amortisation of acquired intangible assets (trademarks and customer lists) of £5.5 million
(2020: £5.2 million) is shown separately. The amount of amortisation of the other intangible assets included in distribution costs is £0.2 million
(2020: £0.4 million) and in administrative expenses is £4.1 million (2020: £2.6 million). Trademarks and customer list additions represent
amounts paid for those of the acquired brands: Oasis, Warehouse, Dorothy Perkins, Wallis and Burton £18.4 million and Debenhams £55 million.
102
103
NOTES TO THE FINANCIAL STATEMENTSANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC/// FINANCIAL STATEMENTS (FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUED
12 PROPERTY, PLANT AND EQUIPMENT
Cost
Balance at 28 February 2019
Additions
Exchange differences
Disposals
Balance at 29 February 2020
Additions
Exchange differences
Disposals
Balance at 28 February 2021
Accumulated depreciation
Balance at 28 February 2019
Depreciation charge for the year
Exchange differences
Disposals
Balance at 29 February 2020
Depreciation charge for the year
Disposals
Balance at 28 February 2021
Net book value
At 28 February 2019
At 29 February 2020
At 28 February 2021
Short
leasehold
alterations
£ million
Fixtures and
fittings
£ million
Computer
equipment
£ million
Motor
vehicles
£ million
Land &
buildings
£ million
Total
£ million
6.0
3.6
-
(0.5)
9.1
10.2
-
-
19.3
1.2
1.8
-
(0.3)
2.7
2.0
-
4.7
4.8
6.4
14.6
71.8
15.7
-
(0.6)
86.9
16.1
-
(0.6)
102.4
9.5
7.1
-
(0.6)
16.0
9.1
(0.6)
24.5
62.3
70.9
77.9
4.6
2.1
-
(0.4)
6.3
3.6
-
(0.8)
9.1
2.2
1.6
-
(0.3)
3.5
2.1
(0.8)
4.8
2.4
2.8
4.3
0.4
0.5
-
-
0.9
0.1
-
-
1.0
0.1
0.2
-
-
0.3
0.3
-
0.6
0.3
0.6
0.4
40.2
0.5
0.1
-
40.8
7.0
(0.2)
-
47.6
1.5
0.8
-
-
2.3
0.9
-
3.2
38.7
38.5
44.4
123.0
22.4
0.1
(1.5)
144.0
37.0
(0.2)
(1.4)
179.4
14.5
11.5
-
(1.2)
24.8
14.4
(1.4)
37.8
108.5
119.2
141.6
The amounts of depreciation included in the statement of comprehensive income in distribution costs is £8.7 million (2020: £7.1 million) and in
administrative expenses is £5.7 million (2020: £4.4 million).
13 RIGHT-OF-USE ASSETS
Cost
Transition on adoption of IFRS 16 on 1 March 2019
Additions
Balance at 29 February 2020
Additions
Balance at 28 February 2021
Accumulated depreciation
At 1 March 2019
Depreciation for year
Balance at 29 February 2020
Depreciation for year
Balance at 28 February 2021
Net book value
At 1 March 2019
At 29 February 2020
At 28 February 2021
Short
leasehold
properties
£ million
23.5
3.6
27.1
7.8
34.9
7.4
5.1
12.5
5.7
18.2
16.1
14.6
16.7
104
105
NOTES TO THE FINANCIAL STATEMENTSANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC/// FINANCIAL STATEMENTS 14 INVESTMENTS
The subsidiaries held and consolidated in these financial statements are set out below:
15 DEFERRED TAX
ASSETS
Name of company
Direct investment
Boohoo Holdings Limited
Indirect investments
21Three Clothing Company Limited
Acraman 1878 Limited
Acraman 1879 Limited
Acraman 1880 Limited
Boo Who Limited
boohoo France SAS
boohoo Germany GmbH
boohoo Italy srl
boohoo.com Australia Pty Ltd
boohoo.com UK Limited
boohoo.com USA Inc
boohoo.com USA Limited
Burton Online Limited
CoastLondon.com Limited
Debenhams.com Online Limited
Dorothy Perkins Online Limited
Karenmillen.com Limited
MissPap UK Limited
NastyGal.com Limited
NastyGal.com USA Inc
Oasis Fashions Online Limited
Pancorp1 Limited
PrettyLittleThing.com France SAS
PrettyLittleThing.com Limited
PrettyLittleThing.com USA Inc
Shanghai Wasabi Frog Trading Co Limited
Wallis Online Limited
Warehouse Fashions Online Limited
Principal activity
Country of
incorporation Address
Percentage
ownership
Holdings
UK
49-51 Dale St, Manchester
Dormant
Dormant
Dormant
Dormant
Dormant
Marketing office
Marketing office
Admin office
Marketing office
Trading
Marketing office
Dormant
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Marketing office
Trading
Dormant
Marketing office
Trading
Marketing office
Dormant
Trading
Trading
UK
UK
UK
UK
UK
France
Germany
Italy
Australia
UK
USA
UK
UK
UK
UK
UK
UK
UK
UK
USA
UK
UK
France
UK
USA
China
UK
UK
Wellington Mill, Pollard Street East, Manchester
49-51 Dale St, Manchester
49-51 Dale St, Manchester
49-51 Dale St, Manchester
49-51 Dale St, Manchester
15, Rue Bachaumont, Paris
Tucholskystrasse 13, Berlin
Via Sant’Antonio n. 30, Prato
468 St Kilda Road, Melbourne
49-51 Dale St, Manchester
8431 Melrose Pl, Los Angeles
49-51 Dale St, Manchester
49-51 Dale St, Manchester
49-51 Dale St, Manchester
49-51 Dale St, Manchester
49-51 Dale St, Manchester
49-51 Dale St, Manchester
49-51 Dale St, Manchester
49-51 Dale St, Manchester
2135 Bay Street, Los Angeles
49-51 Dale St, Manchester
49-51 Dale St, Manchester
81 Rue Reaumur, 75002, Paris
Wellington Mill, Pollard Street East, Manchester
1209 Orange Street, Wilmington
49-51 Dale St, Manchester
49-51 Dale St, Manchester
49-51 Dale St, Manchester
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Asset at 28 February 2019
Recognised in statement of comprehensive income
Credit in equity
Asset at 29 February 2020
Recognised in statement of comprehensive income
Credit in equity
Asset at 28 February 2021
LIABILITIES
Liability at 28 February 2019
Recognised in statement of comprehensive income
Liability at 29 February 2020
Recognised in statement of comprehensive income
Liability at 28 February 2021
Depreciation
in excess
of capital
allowances
£ million
0.1
0.2
-
0.3
0.3
-
0.6
Capital
allowances
in excess of
depreciation
£ million
(0.5)
(1.9)
(2.4)
(0.8)
(3.2)
Share-based
payments
£ million
3.9
1.6
0.2
5.7
(2.9)
(0.2)
2.6
Business
combinations
£ million
(1.6)
0.4
(1.2)
0.2
(1.0)
Total
£ million
4.0
1.8
0.2
6.0
(2.6)
(0.2)
3.2
Total
£ million
(2.1)
(1.5)
(3.6)
(0.6)
(4.2)
Recognition of the deferred tax assets is based upon the expected generation of future taxable profits. The deferred tax asset is expected to be
recovered in more than one year’s time and the deferred tax liability will reverse in more than one year’s time as the intangible assets are amortised.
Deferred tax is likely to increase from 19% as enacted to 25% from April 2023 as announced by the UK Government.
16 INVENTORIES
Finished goods
Finished goods – returns
2021
£ million
133.5
11.4
144.9
2020
£ million
89.8
9.3
99.1
The value of inventories included within cost of sales for the year was £791.7 million (2020: £566.5 million). An impairment provision of £15.8
million (2020: £7.4 million) was charged to the statement of comprehensive income. There were no write-backs of prior period provisions during
the year.
106
107
NOTES TO THE FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC/// FINANCIAL STATEMENTS 17 TRADE AND OTHER RECEIVABLES
19 TRADE AND OTHER PAYABLES
Trade receivables
Prepayments
Accrued income
Taxes and social security receivable
2021
£ million
18.3
10.4
0.3
11.6
40.6
2020
£ million
20.6
7.3
0.3
3.6
31.8
Trade payables
Other creditors
Accruals
Deferred income
Taxes and social security payable
Trade receivables represent amounts due from wholesale customers and advance payments to suppliers.
The fair value of trade and other receivables is not materially different from the carrying value.
The fair value of trade payables is not materially different from the carrying value.
Where specific trade receivables are not considered to be at risk and requiring a provision, the trade receivables impairment provision is calculated
using the simplified approach to the expected credit loss model, based on the following percentages:
20 PROVISIONS
Age of trade receivable
60 - 90 days past due
91 - 120 days past due
Over 121 days past due
2021
%
1
5
90
2020
%
1
5
90
The provision for impairment of receivables is charged to administrative expenses in the statement of comprehensive income. The maturing profile
of unsecured trade receivables and the provisions for impairment are as follows:
Provision at 29 February 2020
Movements in provision charged/(credited) to income statement:
Prior year provision utilised
Increase in provision in current year
Provision at 28 February 2021
Dilapidations
£ million
4.2
Returns
£ million
25.1
-
1.7
5.9
(25.1)
24.2
24.2
2021
£ million
47.9
6.4
144.0
10.2
14.4
222.9
Claims
£ million
-
-
23.4
23.4
2020
£ million
33.9
2.7
99.3
10.7
18.9
165.5
Total
£ million
29.3
(25.1)
49.3
53.5
Due within 30 days
Provision for impairment
Due in 31 to 90 days
Provision for impairment
Past due
Provision for impairment
Total amounts due and past due
Total provision for impairment
18 CASH AND CASH EQUIVALENTS
At start of year
Net movement during year
Effect of exchange rates
At end of year
There is no material credit risk associated with the cash at bank due to the healthy credit ratings of the banks.
2021
£ million
18.3
(2.4)
2020
£ million
13.1
(2.4)
3.6
(1.4)
0.2
-
22.1
(3.8)
18.3
10.0
(1.0)
0.9
-
24.0
(3.4)
20.6
2021
£ million
245.4
30.8
(0.2)
276.0
2020
£ million
197.8
46.9
0.7
245.4
The dilapidation provision represents the estimated exit cost of leased premises; the returns provision represents the revenue reduction of estimated
customer returns which occur over the two to three months after the date of sale; and the claims represents the estimate of claims against the
group that are expected to settle in the period within nine to twelve months after the year end.
21 INTEREST-BEARING LOANS AND BORROWINGS
This note provides information about the contractual terms of the group’s interest-bearing loans and borrowings, which are measured at amortised cost.
Non-current liabilities
Secured bank loans
Current liabilities
Current portion of secured bank loans
Terms and debt repayment schedule
Secured bank loan
2021
£ million
2020
£ million
-
-
2.4
2.4
Nominal
interest
rate
LIBOR + 0.95%
Currency
GB£
Year of
maturity
2022
2021
£ million
-
2020
£ million
4.8
The bank loan of £4.8 million was repaid during the period in advance of its maturity date in 2022.
Movement in interest-bearing loans and borrowings
Opening balance
Interest accrued
Interest paid
Capital paid
Closing balance
2021
£ million
4.8
0.1
(0.1)
(4.8)
-
2020
£ million
7.2
0.1
(0.1)
(2.4)
4.8
108
109
NOTES TO THE FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC/// FINANCIAL STATEMENTS Within 1 year
£ million
1-2 years
£ million
2-5 years
£ million
5-10 years
£ million
6.9
(0.2)
6.7
6.9
(0.1)
6.8
4.8
-
4.8
-
-
-
22 LEASE LIABILITIES
Minimum lease payments due
28 February 2021
Lease payments
Finance charges
Net present value
Current lease liability
Non-current lease liability
Total
Movement in lease liabilities:
Opening balance
Transition on adoption of IFRS 16
Interest accrued
Cash flow lease payments
Additions
Closing balance
23 SHARE CAPITAL
1,263,255,457 authorised and fully paid ordinary shares of 1p each (2020: 1,168,033,762)
More than
10 years
£ million
-
-
-
2021
£ million
6.7
11.6
18.3
2021
£ million
16.2
-
0.2
(5.9)
7.8
18.3
Total
£ million
18.6
(0.3)
18.3
2020
£ million
5.4
10.8
16.2
2020
£ million
-
18.4
0.2
(6.0)
3.6
16.2
2021
£ million
12.6
2020
£ million
11.7
During the year, a total of 5.2 million shares were issued under the share incentive plans (2020: 5.1 million). On 27 February 2021, 14,276
(2020: 16,925) new ordinary shares were issued to non-executive directors as part of their annual remuneration.
The directors do not recommend the payment of a dividend so that cash is retained in the group for capital expenditure projects that are required
for the rapid growth and efficiency improvements of the business and for suitable business acquisitions (2020: £nil).
24 SHARES TO BE ISSUED
The shares to be issued represents the fair value of the contingent shares to be issued to the non-controlling interests of PrettyLittleThing.com
Limited, in accordance with the acquisition agreement entered into and announced on 28 May 2020. Under this agreement, 16,112,331 Ordinary
Shares in boohoo group plc are to be issued subject to the group’s share price averaging 491 pence per share over a six-month period, up until a
longstop date of 14 March 2024. If this condition is not met, the consideration will lapse.
2021
£ million
31.9
2020
£ million
-
25 RESERVES
Translation reserve
Capital redemption reserve
Reconstruction reserve
Acquisition of non-controlling interest in PrettyLittleThing.com Limited
Proceeds from issue of growth shares in boohoo holdings Limited
2021
£ million
0.5
0.1
(515.3)
(281.3)
0.8
(795.2)
2020
£ million
-
0.1
(515.3)
-
-
(515.2)
The translation reserve arises from the movement in the revaluation of subsidiary balance sheets in foreign currencies; the capital redemption
reserve arose from a capital reconstruction in 2014; the reconstruction reserve arose on the impairment of the carrying value of the subsidiary
company in 2014 at that date; and the acquisition of the non-controlling interest in PrettyLittleThing is the excess of consideration paid over the
carrying value of the non-controlling interest as at the date of acquisition in May 2020, written off to reserves.
26 RELATED PARTY DISCLOSURES
Company transacting with
the related party
Nature of relationship
boohoo.com UK Limited
Related party
Amounts included in the statement
of financial position
Amounts owed to related party
undertakings
Kamani Commercial Property Limited
Lease liabilities
Common directors and shareholders
Kamani Commercial Property Limited
Kamani Commercial Property Limited PrettyLittleThing.com Limited Common directors and shareholders
Amounts included in the statement
of comprehensive income
Purchases
The Pinstripe Property Investment Co.
Limited
Kamani Construction Limited
Common directors and shareholders
Kamani Commercial Property Limited PrettyLittleThing.com Limited Common directors and shareholders
Admin costs - marketing
The White Cube Creative Limited
Common directors and shareholders
Common directors and shareholders
boohoo.com UK Limited
boohoo.com UK Limited
boohoo.com UK Limited
boohoo.com UK Limited
Director of supplier is the husband of
Carol Kane, boohoo group plc director
Common directors and shareholders
boohoo.com UK Limited
Kamani Global Investments Limited
Depreciation – right-of-use assets
Kamani Commercial Property Limited
Common directors and shareholders
Kamani Commercial Property Limited PrettyLittleThing.com Limited Common directors and shareholders
Pinstripe Hong Kong Limited
Common directors and shareholders
Amounts included in equity
Umar Kamani
boohoo.com UK Limited
boohoo.com UK Limited
boohoo group plc
Umar is the son of Mahmud Kamani,
Chairman of boohoo group plc
2021
£ million
2020
£ million
-
2.2
-
0.1
-
-
-
0.7
0.1
0.1
301.7
-
3.1
0.1
-
0.2
-
0.1
-
0.8
0.1
0.1
-
Kamani Commercial Property Limited has been the lessor of boohoo’s and PrettyLittleThing’s head office buildings in Manchester since the IPO in 2014.
The company exercised its option to buy the non-controlling interest of 34% of the share capital of PrettyLittleThing.com Limited (formerly
21Three Clothing Company Limited) in May 2020, in advance of the original maturity date in March 2022. Umar Kamani, a related party as the
son of Mahmud Kamani, executive chairman and director of boohoo group plc, is a director and shareholder of PrettyLittleThing.com Limited and
held 31.5% of that company before the option was exercised.
Related party transactions are considered to be on arm’s length commercial terms.
110
111
NOTES TO THE FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC/// FINANCIAL STATEMENTS 27 FINANCIAL INSTRUMENTS
(A) FAIR VALUES OF FINANCIAL INSTRUMENTS
Trade and other receivables
The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of interest at the
reporting date if the effect is material.
Trade and other payables
The fair value of trade and other payables is estimated as the present value of future cash flows, discounted at the market rate of interest at the
reporting date if the effect is material.
Cash and cash equivalents
The fair value of cash and cash equivalents is estimated as its carrying amount where the cash is repayable on demand. Where it is not repayable on
demand then the fair value is estimated at the present value of future cash flows, discounted at the market rate of interest at the reporting date.
Interest-bearing borrowings
Fair value is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date.
Cash flow hedges
Fair value is calculated using forward interest rate points to restate the hedge to fair market value.
Foreign exchange rates
The key currency exchange rates used in the financial statements are:
USD closing rate
USD year average rate
EUR closing rate
EUR year average rate
AUD closing rate
AUD year average rate
2021
1.39269
1.29532
1.15361
1.11678
1.80693
1.83878
2020
1.28198
1.27834
1.16257
1.14792
1.96778
1.85513
The impact of any reasonable fluctuations in the exchange rates used to translate assets and liabilities at the year end is not considered to be
material and has therefore not been disclosed.
Fair values
Financial assets
Cash and cash equivalents
Cash flow hedges
Trade and other receivables
Financial liabilities
Cash flow hedges
Trade and other payables
Interest-bearing loans and borrowings
2021
£ million
276.0
30.2
30.2
336.4
2021
£ million
4.5
268.2
-
272.7
2020
£ million
245.4
11.1
24.5
281.0
2020
£ million
15.6
184.1
4.8
204.5
(B) CREDIT RISK
Financial risk management
Credit risk is the risk of financial loss to the group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and
arises principally from the group’s receivables from customers and hedging and other financial activities.
The group faces minimal credit risk from trade receivables as customers pay for their orders in full at the time of purchase and third-party sales are
to a small number of large established corporations. The risk of default from related party undertakings is considered low.
(C) LIQUIDITY RISK
Financial risk management
Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due.
The group’s approach to managing liquidity is to use both short-term and long-term cash forecasts to assist in monitoring cash flow requirements.
(D) CAPITAL RISK
Financial risk management
Capital risk is the risk that the group will not be able to continue as a going concern.
The group’s approach to managing capital risk is to safeguard the group’s ability to continue as a going concern by securing an appropriate mix of
debt and equity funding, a strong credit rating and sufficient headroom. The capital structure is regularly reviewed to ensure it is appropriate to the
group’s strategic objectives. The funding requirements of the group are ascertained by regular cash flow forecasts and projections. At 28 February
2021, the group had capital of £748.5 million (2020: £568.5 million), comprising equity of £472.5 million (2020: £327.9 million) and net cash of
£276.0 million (2020: £240.6 million).
(E) FOREIGN CURRENCY RISK
Financial risk management
The group trades internationally and is exposed to exchange rate risk on purchases and sales, primarily in Australian dollars, euros and US dollars.
The group’s results are presented in sterling and are exposed to exchange rate risk on translation of foreign currency assets and liabilities.
The group’s approach to managing foreign currency risk is to use financial instruments in the form of forward foreign exchange contracts to hedge
foreign currency cash flows.
The fair value of forward foreign exchange contracts recognised in the statement of financial position within financial assets at 28 February 2021
was £30.2 million (2020: £11.1 million) and within financial liabilities was £4.5 million (2020: £15.6 million). The non-current element of the financial
assets is £13.1 million (2020: £4.5 million) and of financial liabilities is £1.9 million (2020: £6.9 million). Cash flows related to these contracts will
occur during the three years to 29 February 2024 and gains or losses will be recognised in the statement of comprehensive income during those
periods. The amount recognised in other comprehensive income during the year is a gain of £21.2 million (2020: £13.6 million loss) and the amount
reclassified from other comprehensive income to profit and loss in revenue during the year is a loss of £9.0 million (2020: £1.3 million loss).
Maturity of forward currency hedging instruments – notional amount £ million
Currency
USD
EUR
AUD
CAD
SEK
NZD
DKK
1-6
months
113.2
69.7
28.4
4.6
5.3
5.1
2.7
229.0
7-12
months
121.3
65.7
23.6
4.9
4.0
4.5
1.3
225.3
13-18
months
79.3
52.1
19.9
4.3
4.4
3.1
2.1
165.2
13-18
months
1.2951
1.1190
1.8794
1.8372
11.8182
2.0323
8.2381
19-24
months
60.7
35.8
13.7
2.3
1.7
1.6
0.8
116.6
19-24
months
1.3015
1.0978
1.8248
1.8696
11.7647
2.0000
7.8750
More than
2 years
3.7
8.1
1.8
0.3
-
0.3
-
14.2
More than
2 years
1.3514
1.1111
1.8333
2.6667
-
1.6667
-
Total
378.2
231.4
87.4
16.4
15.4
14.6
6.9
750.3
Average
1.3067
1.1210
1.8570
1.7988
11.8831
1.9795
8.3478
Fair value hierarchy
Financial instruments carried at fair value are required to be measured by reference to the following levels under IFRS 13 Fair Value Measurement:
Average rate of forward currency hedging instruments – GBP: currency
Hierarchy
level
Inputs
Financial
instruments
Valuation
methodology
Level 2
Inputs other than quoted prices
included within Level 1 that are
observable for the asset or liability,
either directly (i.e. as prices) or
indirectly (i.e. derived from prices)
Derivative
financial
instruments
– cash flow
hedges
Valuation techniques include forward pricing and swap models using net
present value calculation of future cash flows. The model inputs include
the foreign exchange spot and forward rates, yield curves of the respective
currencies, currency basis spreads between the respective currencies and
interest rate curves
Currency
USD
EUR
AUD
CAD
SEK
NZD
DKK
112
1-6
months
1.3154
1.1277
1.8521
1.7391
11.8868
1.9608
8.5185
7-12
months
1.3075
1.1294
1.8644
1.7347
12.0000
1.9778
8.4615
113
NOTES TO THE FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC/// FINANCIAL STATEMENTS 28 SHARE-BASED PAYMENTS
SUMMARY OF MOVEMENTS IN AWARDS
Number of shares
Outstanding at 28 February 2019
Granted during the year
Lapsed during the year
Exercised during the year
Outstanding at 29 February 2020
Exercisable at 29 February 2020
Granted during the year
Lapsed during the year
Exercised during the year
Outstanding at 28 February 2021
Exercisable at 28 February 2021
ESOP
16,662,625
10,890,334
(1,107,247)
(2,294,250)
24,151,462
2,195,821
14,737,824
(3,289,819)
(2,787,501)
32,811,966
2,808,871
LTIP
3,448,959
2,288,000
(44,565)
(845,465)
4,846,929
434,971
2,541,635
(435,406)
(583,942)
6,369,216
716,151
SIP
2,919,338
2,074,748
(84,855)
(413,251)
4,495,980
654,910
3,136,280
(596,247)
(324,943)
6,711,070
478,580
SAYE
4,643,169
2,018,980
(545,710)
(1,556,512)
4,559,927
525,535
Total
27,674,091
17,272,062
(1,782,377)
(5,109,478)
38,054,298
3,811,237
1,970,215
(645,931)
(1,140,645)
4,743,566
345,078
22,385,954
(4,967,403)
(4,837,031)
50,635,818
4,348,680
Weighted
average
exercise price
pence
123.25
165.43
183.06
46.22
150.52
35.97
201.87
170.49
137.27
171.50
98.77
The group recognised a total expense of £19.7 million during the year (2020: £11.0 million) relating to equity-settled share-based payment
transactions.
EMPLOYEE STOCK OWNERSHIP PLAN (‘ESOP’)
The 2014 ESOP allows the grant of options to selected employees and executive directors of the group, based on a predetermined aggregate
EBITDA target for the three financial years 2015 to 2017. The 2015 ESOP allows the grant of options to selected employees and executive
directors of the group. With the exception of Neil Catto (CFO), there are no performance criteria. Neil Catto’s options are subject to achieving
performance criteria based on a predetermined aggregate EBITDA target and a measure of Total Shareholder Return for the four financial years
ending 2016 to 2020. The 2016 to 2020 ESOPs allow the grant of options to selected employees of the group, without any performance criteria.
Options may be granted by either the board or the trustees of the Employee Benefit Trust.
Date of grant
14/03/14
22/05/15
09/06/16
13/06/17
28/06/18
30/04/19
23/07/19
03/11/20
29 February
2020
no. of shares
612,070
837,836
745,915
3,847,500
7,582,802
102,834
10,422,505
-
24,151,462
Granted
during
the year
no. of shares
-
-
-
-
-
-
-
14,737,824
14,737,824
Lapsed
during
the year
no. of shares
(16,840)
(10,000)
(45,000)
(487,877)
(1,112,093)
(17,150)
(1,425,859)
(175,000)
(3,289,819)
Exercised
during
the year
no. of shares
(88,240)
(374,900)
(272,038)
(1,939,555)
(61,480)
(5,326)
(45,962)
-
(2,787,501)
28 February
2021
no. of shares
506,990
452,936
428,877
1,420,068
6,409,229
80,358
8,950,684
14,562,824
32,811,966
Exercise price
pence
50.00
25.75
57.75
244.50
201.95
266.95
219.65
272.95
Exercise period
14/03/17 – 13/03/24
22/05/18 – 21/05/25
09/06/19 – 08/06/26
13/06/20 – 12/06/27
28/06/21 – 28/06/28
30/04/22 – 30/04/29
23/07/22 – 23/07/29
03/11/23 – 03/11/30
The ESOP options were valued using a Black-Scholes model. The inputs into the model were as follows:
Grant date
Share price at grant date
Exercise price
Number of employees
Shares under option
Vesting period (years)
Expected volatility
Option life (years)
Expected life (years)
Risk free rate
Expected dividends expressed as a dividend yield
Possibility of ceasing employment before vesting
Expectations of meeting performance criteria
Fair value per option (pence)
Grant date
Share price at grant date
Exercise price
Number of employees
Shares under option
Vesting period (years)
Expected volatility
Option life (years)
Expected life (years)
Risk free rate
Expected dividends expressed as a dividend yield
Possibility of ceasing employment before vesting
Expectations of meeting performance criteria
Fair value per option (pence)
14/03/14
50.00
50.00
14
506,990
3
33.33%
10
3
0.976%
0%
26%
78%
11.93
28/06/18
201.95
201.95
278
6,409,229
3
44.17%
10
3.5
0.723%
0%
30%
100%
66.47
22/05/15
25.75
25.75
25
452,936
3
36.33%
10
3
0.966%
0%
16%
100%
6.64
30/04/19
245.70
266.95
11
80,358
3
43.14%
10
3.5
0.787%
0%
35%
85%
72.39
09/06/16
57.75
57.75
28
428,877
3
36.75%
10
3
0.523%
0%
30%
100%
14.76
23/07/19
219.65
219.65
339
8,950,604
3
41.85%
10
3.5
0.434%
0%
30%
100%
68.06
13/06/17
244.50
244.50
74
1,420,068
3
40.85%
10
3.5
0.192%
0%
30%
100%
73.35
03/11/20
272.95
272.95
523
14,562,824
3
36.56%
10
3.5
0.075%
0%
30%
100%
73.31
Expected volatility was found using a historical volatility calculator with reference to the share price of competitors over a three-year period for
grant dates up to 2016 and from the company’s share price volatility from 2017.
LONG TERM INCENTIVE PLAN (‘LTIP’)
The LTIPs allow the grant of options to executive directors and senior management of the group, based on a predetermined aggregate Earnings per
Share and Total Shareholder Return targets for three financial years. Options may be granted by either the board or the trustees of the Employee
Benefit Trust.
Date of grant
30/06/16
13/06/17
28/06/18
03/10/18
11/12/19
03/11/20
29 February
2020
no. of shares
434,971
783,062
1,088,382
252,514
2,288,000
-
4,846,929
Granted
during
the year
no. of shares
-
-
-
-
-
2,541,635
2,541,635
Lapsed
during
the year
no. of shares
-
(99,456)
(13,409)
(68,061)
(254,480)
-
(435,406)
Exercised
during
the year
no. of shares
-
(402,426)
(55,915)
(47,778)
(77,813)
-
(583,942)
28 February
2021
no. of shares
434,971
281,180
1,019,058
136,665
1,955,707
2,541,635
6,369,216
Exercise price
pence
1.00
1.00
1.00
1.00
1.00
1.00
Exercise period
30/06/19 – 29/06/26
13/06/20 – 12/06/27
28/06/21 – 28/06/28
03/10/21 – 03/10/28
21/04/22 – 21/04/29
03/11/20 – 03/11/30
114
115
NOTES TO THE FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC/// FINANCIAL STATEMENTS 28 SHARE-BASED PAYMENTS CONTINUED
The LTIP options were valued using a Black-Scholes model. The inputs into the model were as follows:
Grant date
Share price at grant date
Exercise price
Number of employees
Shares under option
Vesting period (years)
Expected volatility
Option life (years)
Expected life (years)
Risk free rate
Expected dividends expressed as a dividend yield
Possibility of ceasing employment before vesting
Expectations of meeting performance criteria
Fair value per option (pence)
30/06/16
57.25
1.00
2
434,971
3
37.06%
10
3
0.173%
0%
42%
100%
56.26
13/06/17
244.50
1.00
5
281,180
3
40.85%
10
3.5
0.192%
0%
32%
67%
243.51
28/06/18
201.95
1.00
12
1,019,058
3
44.17%
10
3.5
0.723%
0%
33%
75%
200.97
03/10/18
239.00
1.00
5
136,665
3
43.37%
10
3.5
0.869%
0%
34%
75%
238.03
30/04/19
245.70
1.00
21
1,955,707
3
43.14%
10
3.5
0.787%
0%
35%
85%
244.73
03/11/20
272.95
1.00
29
2,541,635
3
36.56%
10
3.5
0.075%
0%
34%
75%
271.95
Expected volatility was found using a historical volatility calculator with reference to the share price of competitors over a three-year period for
grant dates up to 2016 and from the company’s share price volatility from 2017.
SHARE INCENTIVE PLAN (‘SIP’)
Under the terms of the SIP, the board or the trustees of the Employee Benefit Trust grant free shares to every employee under an HMRC-
approved SIP. Awards must be held in trust for a period of at least three years after grant date and become exercisable at this date. There are no
performance criteria.
Date of grant
14/03/14
02/04/14
19/06/15
27/09/18
25/07/19
18/02/21
29 February
2020
no. of shares
200,083
5,479
449,348
1,798,146
2,042,924
-
4,495,980
Granted
during
the year
no. of shares
-
-
-
-
-
3,136,280
3,136,280
Lapsed
during
the year
no. of shares
-
-
(3,571)
(283,276)
(309,400)
-
(596,247)
Exercised
during
the year
no. of shares
(57,150)
-
(115,609)
(63,784)
(88,400)
-
(324,943)
28 February
2021
no. of shares
142,933
5,479
330,168
1,451,086
1,645,124
3,136,280
6,711,070
Exercise price
pence
nil
nil
nil
nil
nil
nil
Exercise period
14/03/17 – 13/03/24
02/04/17 – 01/04/24
19/06/18 – 18/06/25
27/09/21 – 27/09/28
25/07/22 – 25/07/29
18/02/24 – 18/02/31
The SIP options were valued using a Black-Scholes model. The inputs into the model were as follows:
Grant date
Share price at grant date
Exercise price
Number of employees
Shares under option
Vesting period (years)
Expected volatility
Option life (years)
Expected life (years)
Risk free rate
Expected dividends expressed as a dividend yield
Possibility of ceasing employment before vesting
Expectations of meeting performance criteria
Fair value per option (pence)
14/03/14
50.00
nil
27
142,933
3
33.33%
10
3
0.976%
0%
44%
100%
50.00
02/04/14
54.75
nil
1
5,479
3
33.20%
10
3
1.143%
0%
37%
100%
54.75
19/06/15
28.00
nil
99
330,168
3
35.89%
10
3
0.979%
0%
31%
100%
28.00
27/09/18
213.10
nil
1,547
1,451,086
3
42.75%
10
3.5
0.883%
0%
35%
100%
213.10
25/07/19
226.00
nil
1,861
1,645,124
3
41.77%
10
3.5
0.462%
0%
35%
100%
226.00
18/02/21
369.4
nil
3,220
3,136,280
3
36.56%
10
3.5
0.004%
0%
35%
100%
369.40
Expected volatility was found using a historical volatility calculator with reference to the share price of competitors over a three-year period up to
2016 and from the company’s share price volatility from 2017.
SAVE AS YOU EARN (‘SAYE’) SCHEME
Under the terms of the SAYE scheme, the board or the trustees of the Employee Benefit Trust grants options to purchase ordinary shares in the
company to employees who enter into an HMRC-approved SAYE scheme for a term of three years. Options are granted at up to a 20% discount to the
market price of the shares on the day preceding the date of offer and are exercisable for a period of six months after completion of the SAYE contract.
Date of grant
25/10/16
06/11/17
31/10/18
30/10/19
03/11/20
29 February
2020
no. of shares
525,535
993,805
1,106,225
1,934,362
-
4,559,927
Granted
during
the year
no. of shares
-
-
-
1,970,215
1,970,215
Lapsed
during
the year
no. of shares
(23,250)
(55,867)
(130,030)
(385,666)
(51,118)
(645,931)
Exercised
during
the year
no. of shares
(502,285)
(592,860)
(26,736)
(18,764)
-
(1,140,645)
28 February
2021
no. of shares
-
345,078
949,459
1,529,932
1,919,097
4,743,566
Exercise price
pence
78.80
169.00
189.88
216.92
268.96
Exercise period
25/10/19 – 24/04/20
06/11/20 - 06/05/21
31/10/21 – 30/04/22
30/10/22 – 30/04/23
03/11/23 – 03/05/24
The SAYE options were valued using a Black-Scholes model. The inputs into the model were as follows:
Grant date
Share price at grant date
Exercise price
Number of employees
Shares under option
Vesting period (years)
Expected volatility
Option life (years)
Expected life (years)
Risk free rate
Expected dividends expressed as a dividend yield
Possibility of ceasing employment before vesting
Expectations of meeting performance criteria
Fair value per option (pence)
25/10/16
119.25
78.80
-
-
3
38.40%
3.5
3
0.277%
0%
28%
100%
51.02
06/11/17
209.25
169.00
119
345,078
3
41.67%
3.5
3
0.513%
0%
44%
100%
76.86
31/10/18
212.90
189.88
380
949,459
3
43.36%
3.5
3
0.760%
0%
48%
100%
72.90
30/10/19
265.00
216.92
615
1,529,932
3
40.39%
3.5
3
0.463%
0%
49%
100%
93.94
03/11/20
272.95
268.96
847
1,919,097
3
36.56%
3.5
3
0.075%
0%
49%
100%
69.56
Expected volatility was found using a historical volatility calculator with reference to the share price of competitors over a three-year period for
grant dates up to 2016 and from the company’s share price volatility from 2017.
SHARE-BASED PAYMENT CHARGE FOR OPTION TO ACQUIRE SHARES IN PRETTYLITTLETHING
Under the terms of the Shareholders’ Agreement relating to 21Three Clothing Company Limited (company name now changed to PrettyLittleThing.
com Limited) ('PLT'), boohoo group plc had the option to acquire the remaining 34% of the share capital of PLT at any time after 28 February
2022. The company acquired the non-controlling interest ahead of the option period and so the unamortised balance of the share-based payment
charge of £2.1 million was accelerated and written off to the income statement.
The share-based payment charge was calculated using a discounted cash flow method using a discount rate of 40% and perpetuity growth rate of
2.1% on management’s four-year projections as at March 2017.
The option was valued using a Monte-Carlo simulation model. The inputs into the model were as follows:
Grant date
Share price at grant date, discounted for minority interest
Minority interest discount factor
Number of employees
Shares under option
Vesting period (years)
Expected volatility
Option life (years)
Expected life (years)
Risk free rate
Expected dividends expressed as a dividend yield
Possibility of ceasing employment before vesting
Expectations of meeting performance criteria
Total option fair value
01/03/17
£26,329
45%
2
340
5
60.00%
5
5
0.42%
0%
0%
Ranging from 15% to 90% depending on the year
£206,764
Expected volatility was found using a historical volatility calculator with reference to the share price of comparators over a five-year period.
116
117
NOTES TO THE FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC/// FINANCIAL STATEMENTS 29 CAPITAL COMMITMENTS
Capital expenditure contracted for at the end of the reporting year but not yet incurred is as follows:
Property, plant and equipment
30 CONTINGENT LIABILITIES
2021
£ million
5.5
2020
£ million
9.8
From time to time, the group can be subject to various legal proceedings and claims that arise in the ordinary course of business, which may include
cases relating to the group’s brand and trading name. All such cases brought against the group are robustly defended and a liability is recorded only
when it is probable that the case will result in a future economic outflow and that the outflow can be reliably measured.
FIVE-YEAR GROUP STATEMENT OF COMPREHENSIVE INCOME
UNAUDITED
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Other income
Operating profit
Net finance income
Profit before tax
Taxation
Profit for the year
Other comprehensive income/(expense) for the year,
net of income tax
Impact of adoption of IFRS 16
Net fair value gain/(loss) on cash flow hedges
Total comprehensive income for the year
Total comprehensive income (restated) attributable to :
Owners of the parent
Non-controlling interests
Total comprehensive income
Earnings per share (restated)
Basic
Diluted
2017
£ million
294.6
(133.8)
160.8
(66.8)
(68.5)
4.9
30.4
0.6
31.0
(6.3)
24.7
-
(6.7)
18.0
17.9
0.1
18.0
2018
£ million
579.8
(273.4)
306.4
(126.8)
(137.1)
0.2
42.7
0.6
43.3
(7.3)
36.0
-
19.5
55.5
54.6
0.9
55.5
2019
£ million
856.9
(387.9)
469.0
(207.1)
(203.4)
0.2
58.7
1.2
59.9
(12.4)
47.5
-
(0.1)
47.4
43.5
3.9
47.4
2020
£ million
1,234.9
(568.6)
666.3
(278,3)
(297.3)
0.2
90.9
1.3
92.2
(19.3)
72.9
(0.5)
(12.3)
60.1
50.9
9.2
60.1
2.20p
2.17p
3.09p
3.01p
3.78p
3.71p
5.48p
5.35p
2021
£ million
1,745.3
(800.1)
945.2
(422.0)
(400.1)
1.0
124.1
0.6
124.7
(31.3)
93.4
-
30.2
123.6
120.9
2.7
123.6
7.43p
7.25p
118
119
NOTES TO THE FINANCIAL STATEMENTS(FORMING PART OF THE FINANCIAL STATEMENTS) CONTINUEDANNUAL REPORT AND ACCOUNTS 2021BOOHOO GROUP PLC/// FINANCIAL STATEMENTS FIVE-YEAR GROUP STATEMENT OF FINANCIAL POSITION
UNAUDITED
SHAREHOLDER INFORMATION
Non-current assets
Current assets
Total assets
Equity attributable to the owners of the parent
Non-controlling interest
Current liabilities
Non-current liabilities
Total liabilities, capital and reserves
2017
(restated)
£ million
72.2
116.9
189.1
96.7
3.8
74.4
14.2
189.1
2018
(restated)
£ million
111.8
215.1
326.9
208.8
4.0
104.4
9.7
326.9
2019
(restated)
£ million
143.5
296.3
439.8
262.0
8.4
162.1
7.3
439.8
2020
£ million
186.6
382.9
569.5
310.6
17.3
217.9
23.7
569.5
2021
£ million
292.9
483.0
775.9
472.5
-
285.7
17.7
775.9
FIVE-YEAR GROUP CASH FLOW STATEMENT
UNAUDITED
Net cash generated from operating activities
Net cash used in investing activities
Net cash generated from/(used in) financing activities
Net movement in cash and cash equivalents
Opening cash and cash equivalents
Closing cash and cash equivalents
2017
£ million
29.5
(29.4)
11.9
12.0
58.3
70.3
2018
£ million
69.0
(45.7)
49.0
72.3
70.3
142.6
2019
£ million
101.5
(45.7)
(0.6)
55.2
142.6
197.8
2020
£ million
115.7
(43.8)
(24.3)
47.6
197.8
245.4
2021
£ million
162.8
(283.4)
151.2
30.6
245.4
276.0
REGISTERED ADDRESS OF COMPANY
Registered in Jersey, number 114397
12 Castle Street
St Helier
Jersey
JE2 3RT
HEAD OFFICE
49-51 Dale Street
Manchester
M1 2HF
COMPANY SECRETARY
Thomas Kershaw
CORPORATE WEBSITE
www.boohooplc.com
NOMINATED ADVISER AND JOINT BROKER
ZEUS CAPITAL
82 King Street
Manchester
M2 4WQ
BERKELEY SQUARE
Mayfair
London
W1J 6HE
JOINT BROKER
JEFFERIES INTERNATIONAL
100 Bishopsgate
London
EC2N 4JL
INDEPENDENT AUDITORS
PKF LITTLEJOHN LLP
15 Westferry Circus
London
E14 4HD
SOLICITORS
TLT LLP
3 Hardman Square
Manchester
M3 3EB
PANNONE CORPORATE LLP
378-380 Deansgate
Manchester
M3 4LY
OGIER
Ogier House
The Esplanade
St Helier
Jersey
JE4 9WG
FINANCIAL PR
BUCHANAN
107 Cheapside
London
EC2V 6DN
COMPANY REGISTRARS
LINK ASSET SERVICES (JERSEY) LIMITED
12 Castle Street
St Helier
Jersey
JE2 3RT
PRINCIPAL BANKERS
HSBC BANK
4 Hardman Square
Spinningfields
Manchester
M3 3EB
120
BOOHOO GROUP PLC