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BOOHOO GROUP PLC
12 CASTLE STREET
ST HELIER
JERSEY JE2 3RT UK
BOOHOO
GROUP
PLC
stock code: BOO
2
0
2
2
Founded in Manchester in
2006, boohoo is an inclusive
and innovative global brand
targeting young, value-orientated
customers, pushing boundaries
to bring its customers up-to-date
and inspirational fashion, 24/7.
C O N T E N T S
STRATEGIC REPORT
Building on strong foundations
02
Group financial and operational highlights 04
At a glance
Growing our group
Our strategy
How we plan to leverage our strengths
to exploit our opportunities
Business model
Agenda for Change
Chairman’s statement
Our 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
Section 172
Directors' remuneration report
Annual report on remuneration
Statement of directors' responsibilities
in respect of the annual report and
financial statements
FINANCIAL STATEMENTS
Independent auditor's report to the
members of boohoo group plc
Consolidated statement of
comprehensive income
Consolidated statement of
financial position
Consolidated statement
of changes in equity
Consolidated cash flow statement
Notes to the financial statements
Five-year financial summary
06
08
12
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16
18
20
21
22
26
32
41
60
62
71
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77
89
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100
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134
VISIT US ONLINE AT BOOHOOPLC.COM
ANNUAL REPORT AND ACCOUNTS 2022
What started as one brand, growing
extensively in the UK and internationally,
is today a platform of multiple brands
servicing customers globally, generating
sales in excess of £1.9 billion.
OUR INVESTMENT CASE
boohoo group is a highly successful
business, delivering innovative
fashion brands, targeting style and
quality-conscious consumers with
up-to-date and inspirational fashion.
FOR MORE INFORMATION ABOUT OUR
BRANDS GO TO PAGES 08 TO 11
FOR MORE INFORMATION ABOUT OUR
GROUP GO TO PAGES 16 TO 17
We now have 20 million customers
globally with the potential to reach
500 million as a group.
FOR MORE INFORMATION ABOUT OUR
GLOBAL SCALE GO TO PAGES 12 TO 15
We are a sustainability-conscious
business with a clear focus on our new
sustainability plan. To develop this plan,
we’ve identified our priority issues: better
materials; textile waste; carbon and supply
chain management; we have interviewed
colleagues and consumers; and we have
developed clear goals and targets.
FOR MORE INFORMATION ABOUT OUR
UP.FRONT PLAN AND ESG PROGRESS
GO TO PAGES 41 TO 53
01
STRATEGIC REPORT STRATEGIC REPORT BUILDING ON STRONG FOUNDATIONS
CAPTURING MARKET SHARE
Our diverse brand portfolio has enabled us to
increase our market share. Gross sales before
returns grew by 28% and our customer base
increased from 18 million to 20 million.
We have relaunched and integrated four new
brands, Wallis, Burton, Dorothy Perkins and
Debenhams into our strong portfolio,
adding to our reach and market share.
Our womenswear brands target a wider age
range than ever before, from 16–45-year-
olds, while covering diverse styles and price
points. Our menswear range continues its
rapid growth and reach with the addition
of Burton menswear. We are building
Debenhams into a digital department store
with a significant beauty offering, adding
greatly to our product diversity and market
share potential.
... CONTROLLING THE CHALLENGES
OF A VOLATILE MARKET
The impact of the pandemic has had far-
reaching and some unexpected consequences
for businesses: customer demand has been
dampened by continued and unpredictable
lockdowns in different parts of the world;
and sudden price inflation and restricted
availability in the transportation of goods
have both impacted service levels and
reduced profitability. Nevertheless, we have
remained profitable at EBITDA level across
all geographies, albeit at a reduced level
compared to previous years. We begin the
next financial year with renewed optimism for
the beginning of a return to normality as we
proactively adjust our operations to respond
to global economic and logistical challenges.
We have invested significantly in our
infrastructure, in preparation for the return to
higher growth rates in our businesses globally.
... CONTINUING OUR
SUSTAINABLE JOURNEY
Our Agenda for Change programme has seen
us publish our full global product supplier list,
open a state-of-the-art factory in Leicester,
establish a vibrant sustainability team, and
highlight our vision for the future. We have
appointed an independent non-executive
director to oversee the environment, social
and governance functions and to accelerate
us along our sustainability journey.
FACING UP TO THE FUTURE
We are facing up to the future,
doing more for our customers, our
suppliers, their communities and
our impact on the environment.
We have looked hard both inside and outside
our business, and developed a plan that will
help us be ready for the future.
There is work to be done, and we are going
to be open and upfront on the progress we
are making. Our next chapter is still in the
making.
WE HAVE DEVELOPED OUR GROUP’S
SUSTAINABILITY PLAN...
Clothes made smarter
Our business taking action
Suppliers on better terms
…TO KEEP OUR BUSINESS
TRANSPARENT AND UPFRONT…
Publication of our global supplier lists
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New responsible sourcing team
delivering enhanced supplier audits
and compliance
Appointment of an independent
non-executive director to oversee
Environmental, Social and
Governance (“ESG”)
…TO FACE UP TO THE FUTURE
OF FASHION.
Launching the READY FOR THE
FUTURE initiatives across our brands
We have joined groups such as the
Sustainable Apparel Coalition,
Sustainable Clothing Action Plan, Fast
Forward and the Microfibre Consortium
Developing a new resale marketplace
with PrettyLittleThing (“PLT”) to
launch in 2022
02
03
ANNUAL REPORT AND ACCOUNTS 2022 STRATEGIC REPORTBOOHOO GROUP PLC
GROUP FINANCIAL, OPERATIONAL,
SUSTAINABILITY AND GOVERNANCE HIGHLIGHTS
OUR PERFORMANCE
Revenue
£1,983 MILLION
m
3
8
9
,
1
£
m
5
4
7
,
1
£
m
5
3
2
,
1
£
Adjusted EBITDA
£125 MILLION
m
4
7
1
£
m
7
2
1
£
m
5
2
1
£
Profit before tax
£8 MILLION
m
5
2
1
£
m
2
9
£
m
8
£
2020
2021
2022
2020
2021
2022
2020
2021
2022
YEAR TO FEBRUARY
Revenue
Gross profit
Gross margin
Profit before tax
Diluted (loss)/earnings per share
Net cash2 at year-end
Adjusted measures3:
Adjusted EBITDA4
% of revenue
Adjusted EBIT5
% of revenue
Adjusted profit before tax6
Adjusted diluted earnings per share7
2022
£ million
1,982.8
1,041.1
52.5%
7.8
(0.32)p
1.3
125.1
6.3%
84.1
4.2%
82.5
4.39p
2022
change on
2021
2021
£ million
+14%
1,745.3
+10%
945.2
-170bps
54.2%
-94%
124.7
-104%
7.25p
276.0 -£275 million
2022
change on
2020
20201
£ million
+61%
1,234.9
+56%
666.3
-150bps
54.0%
-92%
92.2
-106%
5.35p
240.6 -£239 million
173.6
10.0%
149.3
8.6%
149.9
8.67p
-28%
-370bps
-44%
-440bps
-45%
-49%
126.6
10.2%
107.0
8.7%
108.3
5.88p
-1%
-390bps
-21%
-450bps
-24%
-25%
1 2022 change on 2020, two years ago, compares current trading to the pre-pandemic period to give a better understanding of performance when
compared to the unusual growth and characteristics of trade in 2021.
2 Net cash is cash less borrowings, excluding lease liabilities.
3 Adjusted items, which are not statutory measures, show the underlying performance of the group excluding large, non-cash and exceptional items.
4 Adjusted EBITDA is calculated as profit before tax, interest, depreciation, amortisation, share-based payment charges and exceptional items.
5 Adjusted EBIT is calculated as profit before tax, interest, amortisation of acquired intangible assets, share-based payment charges and exceptional items.
6 Adjusted profit before tax is calculated as profit before tax, excluding amortisation of acquired intangible assets, share-based payment charges and
exceptional items.
7 Adjusted diluted earnings per share is calculated as diluted earnings per share, adding back amortisation of acquired intangible assets, share-based payment
charges and exceptional items.
Financial highlights
• Revenue £1.983 billion, up 14% (14%
CER1), and up 61% on 2020
• UK growth at 27% emphasises good
brand positioning and strength of brand
portfolio
• International performance impacted by
COVID-19 challenges, down 3%
• Growth of 14% achieved while set against
exacerbated comparative year, highlighting
very strong two-year performance: UK up
77%; international up 40%
• International revenue is now 39% of total
(2021: 46%), reflecting strong organic
UK growth and mix impact from brands
acquired in the last two years
• Gross margin 52.5%, down 170bps from
54.2% (2020: down 150bps)
• Adjusted EBITDA £125.1 million down
28%, with Adjusted EBITDA margin
of 6.3% (2021: 10.0%; 2020: 10.2%),
after £60 million of pandemic-related
shipping cost headwinds and investment in
launching our new brands
• £261.5 million capital expenditure
investment, building infrastructure for
growth, including freehold properties and
significant expansion and automation of
distribution network
• Strong balance sheet with net cash of
£1.3 million (2021: £276.0 million; 2020:
£240.6 million). Operating cash flow of
£10.3 million (2021: £201.1 million; 2020:
£127.3 million). New £325 million RCF
agreed in March 2022, underpinning the
group’s investment programme
Operational highlights
• Significant investment into broadening
our operational and warehouse capacity,
ensuring global infrastructure is fit for the
future and ready for sustained growth and
to support over £4 billion of net sales
• 20 million active customers, up 10%, and
up 43% on 2020
• Two new UK distribution centres, Daventry
and Wellingborough, launched and now
fully operational
• Automation fit-out of a warehouse
commenced with expected completion
in September 2022, unlocking additional
operational efficiencies and multiple service
enhancements
• Announcement of plans for US distribution
centre in 2023, supporting the group’s
next phase of growth
• Relaunch of Debenhams, adding a new
dimension of a digital department store
to the group’s portfolio and extending the
group’s target addressable market
• Integration and relaunch of the newly
acquired Dorothy Perkins, Wallis and
Burton brands, complementary additions to
the group’s scalable, multi-brand platform
• Purchase of new offices in the heart of
London’s West End, housing the group’s
London-based brands and their employees
Sustainability and governance highlights
• Agenda for Change process completed,
with action items established into business
as usual operations, following publication of
fifth Leveson report in March 2022
• Economic Impact Assessment conducted.
Commitment to investing over £500
million and creating over 5,000 jobs over
five years, highlighting the group’s significant
ongoing contribution to the UK economy
• Board strengthened with appointment of
two non-executive directors, including
one to chair the newly constituted ESG
Committee
• Publication of the group’s sustainability
strategy, further establishing ongoing
commitment to transparency. Significant
progress made against our 2021 goals
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.
04
05
ANNUAL REPORT AND ACCOUNTS 2022 STRATEGIC REPORT STRATEGIC REPORTBOOHOO GROUP PLC BOOHOO GROUP PLC
ANNUAL REPORT AND ACCOUNTS 2022
AT A GLANCE
Founded in the heart of
Manchester’s historic textile
district in 2006 by Mahmud
Kamani and Carol Kane as
boohoo, the group today is
home to a portfolio of innovative
fashion brands targeting style
and quality-conscious consumers
with up-to-date and inspirational
fashion. What started as one
brand, growing extensively in the
UK and internationally, is today
a platform of multiple brands
servicing customers globally,
generating sales in excess of
£1.9 billion.
We want to operate a business that is fair to
all, and kind to the environment, and we are
working hard to live up to these ambitions.
We know that there is a lot to fix in the
fashion industry and we are keen, willing and
able to play our part.
OUR SUSTAINABILITY STRATEGY
• Clothes made smarter
• Suppliers on better terms
• Our business taking action
OUR BUSINESS PRINCIPLES
• Challenging the fashion market
• Responsible
• Inspired
• Global
• Connected
• Fast
OUR STRATEGIC PILLARS
• Platform
• Product
• People
• Planet
• Performance
OUR BUSINESS MODEL
We draw upon our formidable network of
relationships and resources and expertise in design,
sourcing, marketing and customer services to
deliver value to all our stakeholders.
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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.
OUR VISION
To be leading the e-commerce fashion
market for 16–45-year-old.
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.
T W E N T Y
Our vision is at the very core of our business.
R VALUES
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Our Business Model, Values and Strategy are all working towards
achieving this vision to the best of our ability. Our Business Principles
underpin how we are making our decisions for the forward focus of the
business. As of this year, we are ensuring everything in our business
aligns with our Sustainability Strategy, so that we grow our business in a
sustainable way.
FOR MORE INFORMATION ABOUT OUR
BUSINESS MODEL GO TO PAGES 16 TO 17
OF THE REPORT
FOR MORE INFORMATION ABOUT
OUR SUSTAINABILITY STRATEGY GO TO
PAGES 41 TO 53 OF THE REPORT
FOR MORE INFORMATION ABOUT OUR
STRATEGY GO TO PAGES 12 TO 15 OF
THE REPORT
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
We operate with responsibility towards
all our stakeholders – including
our customers, employees and
partners – and in a sustainable way
to reduce environmental impact.
INSPIRED
With a finger on the pulse of
fashion, we spot the latest trends
from all over the world.
GLOBAL
We operate in a global market,
unhindered by borders, languages
and physical presence.
CONNECTED
Through a large social media
following, we connect with
millions globally.
FAST
Our ‘test and repeat’ model means
more efficiency, less waste and more
speed. We make to demand, with top
sellers re-bought within days, and
hundreds of new products added daily.
T W E N T Y T W O
07
06
010204030506 STRATEGIC REPORT
GROWING OUR GROUP
In the year ended 28 February
2022, we developed a broader
portfolio of brands and a
significantly larger target
addressable market with 500
million potential customers in
key markets.
Each brand is able to increase the group’s
share in each of our markets and is chosen
specifically to increase the density of our
portfolio. Our group incorporates clothing,
shoes, accessories and beauty products
targeted at 16–45-year-old
consumers globally.
BOOHOO GROUP PLC
2006
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.
DEVELOPMENTS
This iconic brand continues its solid growth
and increasing its market share.
2019
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.
DEVELOPMENTS
This high-growth brand now has a strong
wedding and occasion wear range to capitalise
on the return to normal life.
Our new sustainability strategy, UP.FRONT,
has been embedded into all of our brands
through a number of key developments over
the past year. We have launched Ready for
the Future in many of our brands which are
our sustainable clothing ranges.
2013
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.
2017
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.
2017
2019
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.
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.
DEVELOPMENTS
DEVELOPMENTS
DEVELOPMENTS
DEVELOPMENTS
Strong international growth with gathering
momentum as the brand increases
market share.
A hugely popular brand that has performed
well in the year, increasing its market share
and has exciting plans to open an online
clothes exchange shop in 2022.
This iconic US brand has established a strong
following in the UK. Fabulous LA style finds.
Exceptional growth in the USA is adding to
an already highly successful relaunch of this
iconic brand.
08
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ANNUAL REPORT AND ACCOUNTS 2022 STRATEGIC REPORT STRATEGIC REPORT ANNUAL REPORT AND ACCOUNTS 2022
GROWING OUR GROUP
CONTINUED
2019 2020 2020
MISSPAP
MissPap is aimed at fashion-conscious young
women who love fashion and want to create
looks that are worth sharing with friends.
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.
DEVELOPMENTS
DEVELOPMENTS
DEVELOPMENTS
MissPap continues to provide statement
pieces with an affordable price tag.
Growing rapidly, this renowned British
brand focuses on lifestyle dressing for every
occasion.
Building the product range with nearly 60%
more options online.
2021
DEBENHAMS
An online retail market place offering
everything from fashion, beauty, sport,
and homeware, Debenhams provides its
customers with a unique, differentiated and
exclusive mix of brands.
DEVELOPMENTS
Beauty, lingerie, homeware, electricals, and
jewellery – everything you loved about the
great department store, now online.
2021
2021 2021
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.
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.
DEVELOPMENTS
DEVELOPMENTS
DEVELOPMENTS
Aiming to be the leading pure-play brand for
the 25–45 year-old modern man.
This iconic British brand is delighting us with
its relaunch success and targets 25–45
year-olds.
Continuing to establish itself as the go-to
destination for the forever 40 woman looking
for stylish outfits for all occasions.
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STRATEGIC REPORT STRATEGIC REPORTBOOHOO GROUP PLC OUR STRATEGY
DELIVERING GROWTH
AND INCREASING
MARKET SHARE
02
01
Our focus is to maintain
an outstanding customer
proposition, with the latest
fashion at great prices, combined
with excellent customer service.
PLATFORM
PRODUCT
STRATEGIC FOCUS
STRATEGIC FOCUS
PEOPLE
03
STRATEGIC FOCUS
PLANET
04
STRATEGIC FOCUS
PERFORMANCE
05
STRATEGIC FOCUS
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 as we
look to build for the future and further
cement our position as a leader in global
fashion e-commerce. This strategy rests on
developing our Five Strategic Pillars:
Our Strategy is underpinned by
our Business Principles:
• CHALLENGING THE
FASHION MARKET
• RESPONSIBLE
• INSPIRED
• GLOBAL
• CONNECTED
• FAST
We have developed a unique platform,
through years of investment in technology
and processes, supply chain relationships and
with the expertise of a great team of people.
This platform enables us to penetrate markets
and expand rapidly, operating multiple brands
as we progress with our ambition to lead the
online fashion market.
Product is at the heart of what we do. Our
teams take inspiration from the latest trends
from around the world, launching hundreds
of new products daily. We operate with
responsibility towards all stakeholders and
take many steps to ensure our supply chain
operates in a responsible and sustainable way.
Our people are the fabric of our business. We
want everyone who works with us, directly
or indirectly, to be treated fairly, to have the
opportunity to realise their full potential and
to be proud to be part of the boohoo family.
We will continue to deliver outstanding
growth, while working to reduce our impact
on the planet. We will not be able to solve all
the challenges we face immediately, but we
have set ourselves challenging and material
environmental goals. We will focus on areas
where we can have the biggest impact first
and we will report our actions and results in
an open and transparent way.
We will continue to add appeal and excitement
by investing in the areas that our customers,
our people, our suppliers and our stakeholders
care about to deliver growth in a sustainable
manner through organic and acquisitive
means, which will be driven by our relentless
focus on product, our brands, markets that we
operate in and our customers.
PROGRESS IN THE YEAR
PROGRESS IN THE YEAR
PROGRESS IN THE YEAR
PROGRESS IN THE YEAR
PROGRESS IN THE YEAR
Integration of four new brands in the year,
including the set-up of a marketplace solution
for Debenhams. Additional warehouses
opened in Daventry and Wellingborough.
Automation of Sheffield warehouse
underway. New offices in London for newly
acquired brands.
Recommendations from the Agenda for
Change fully implemented with independent
oversight. Strengthened supply chain
functions, ESG Committee established.
International supplier list published.
ESG Committee, with board oversight,
established. Award of free shares to all
employees.
Publication of sustainability strategy, driving
change throughout our business operations.
More products with recycled or sustainable
fabric content, less waste, tighter supply
chain monitoring.
UNDERPINNING
PLATFORM
• Challenging the fashion market
• Fast
• Inspired
12
UNDERPINNING PRODUCT
UNDERPINNING PEOPLE
UNDERPINNING PLANET
• Responsible
• Fast
• Inspired
• Connected
• Responsible
• Responsible
• Connected
• Global
13
Integration of four new brands, Dorothy
Perkins, Wallis, Burton and Debenhams, into
our ever-growing portfolio. International
wholesale operations commenced, boosting
revenue. Planning commenced for a
distribution centre in the USA in 2023.
Further gains in market share across key
regions such as the UK and US, building on
strong growth achieved in the previous year.
UNDERPINNING
PERFORMANCE
• Challenging the fashion market
• Inspired
• Global
ANNUAL REPORT AND ACCOUNTS 2022 STRATEGIC REPORT STRATEGIC REPORTBOOHOO GROUP PLC HOW WE PLAN TO LEVERAGE OUR
STRENGTHS TO EXPLOIT OUR
OPPORTUNITIES
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Market growth through tried-
and-tested fashion-first
customer proposition
Rapid extension of target
addressable market from 100
million potential customers
to 500 million via selective
acquisitions
Scaling wholesale business
globally with key strategic
partners
Opening of US distribution
centre to accelerate
US growth
Investment in and
growth of under-
penetrated, newly-
acquired brands
OPPORTUNITIES
LEVERAGE
Proven success in
acquiring, integrating and
rejuvenating brands
Leading customer proposition
servicing customers from
16–45-year-olds
Thirteen independently-run
fashion destinations with
breadth of price and choice
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Leverage automation
investment, driving
gains to reinvest
in growth
Successful penetration
of US market
Further penetration into US
and Europe markets, where
online market share is less
than 0.5% compared to
approximately 5% in the UK
Highly experienced
management team with
entrepreneurial founders
STRENGTH S
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Digitally native vertical
brand platform shared
across brands
Rapidly growing online
market circa 10% p.a.
Proven track record of
high growth and market
share gains
14
Efficient and ethical supply
model with test and repeat
strategy, fast response times,
minimal waste
15
Maximise Debenhams online
marketplace platform with
scale across fashion, home
and beauty, capturing greater
share of wallet
Further acquisition
opportunities
EFHDG01100208050903070604ABCANNUAL REPORT AND ACCOUNTS 2022 STRATEGIC REPORTBOOHOO GROUP PLC
BUSINESS MODEL
L DELIVERING VALUE FOR ALL
OUR STAKEHOLDERS
We have created a formidable suite of relationships and resources and
combined this with our insight and understanding of changing consumer
demands to build a business platform that delivers value to all our stakeholders.
E
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Customers and partners
RELATIONSHIPS AND RESOURCES
RELATIONSHIPS
Employees
Our employees are our greatest asset, delivering a
truly awesome package of skills 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
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 business with the capacity for investment and
acquisitions
HOW WE OPERATE
We design, source, market and sell fashion clothing, shoes,
accessories and beauty products to 16–45-year-old
consumers globally. We implement a ’test and repeat’ model
that brings the latest trends and fashion inspiration in a matter
of days or weeks 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
ENGAGEMENT AND REPEAT
Sophisticated monitoring of marketing
and product success enables us to respond
rapidly to consumer demand and optimise
customer reach
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
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
OUR BUSINESS MODEL IS UNDERPINNED BY OUR BUSINESS PRINCIPLES AS WE
ARE CHALLENGING THE FASHION MARKET, WHILST REMAINING RESPONSIBLE,
INSPIRED, CONNECTED AND FAST ON A GLOBAL SCALE.
16
17
VALUE GENERATED FOR STAKEHOLDERS
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,
enabling suppliers to participate in our success as we grow
and working to improve factory standards. We have invested
in building a more visible, more sustainable supply chain of
approved partners
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 and our suppliers
INVESTORS
Investors have the opportunity for capital growth from
the enlarged group and potential 500 million addressable
customer base
PLANET
We are determined to play our part in reducing the
environmental impact of clothing and our operations through
our increased focus on sustainability and with the ambitious
environmental targets we have set for ourselves
FOR MORE INFORMATION ABOUT OUR
STAKEHOLDER GROUPS GO TO PAGES
73 TO 76 OF THE STRATEGIC REPORT
0102030405ANNUAL REPORT AND ACCOUNTS 2022 STRATEGIC REPORT STRATEGIC REPORTBOOHOO GROUP PLC
AGENDA FOR
CHANGE
Worked with slave-free
alliance to create
whistleblowing training
Opened up our supply chain to the public,
media and stakeholders
Established our
Agenda for Change
programme
Grown with great suppliers
Mapped, monitored
and consolidated our
supply chain
Mandated all suppliers
to cease
subcontracting CMT
work
Created an ongoing dialogue
with key government
enforcement agencies
Built in-country sourcing
teams to support our
international suppliers
Published our
international
supplier list
Appointed Sir Brian
Leveson to provide
oversight
Appointed 2 new
non-exec directors
Conducted over
1,000 audits
Mandated that all UK
suppliers move to fast
forward
Worked with local training
providers to deliver NVQ
training to garment workers
Launched speak up:
a new compliance hub
Created a new governance
and ethical compliance
committee that reports to
the board
Significantly Grown our
responsible and ethical
sourcing team
Established the
garment and textile
workers trust and
donated £1.1m
Delivered ethical
sourcing, whistleblowing
and modern slavery
training
Published a brand new
sustainability strategy
Created a brand new
supplier hub, order
app and portal
Gifted £85,000 of our
apprenticeship levy to
Fashion enter
Opened a brand new
manufacturing site
in Leicester
A STRONGER MORE
SUSTAINABLE FUTURE
In September 2020, the group announced
its Agenda for Change programme: a series
of commitments designed to strengthen
corporate governance, purchasing practices
and entrench the group’s support for the UK
garment manufacturing sector more broadly.
The programme encompassed 17
commitments recommended by Alison
Levitt QC in her independent report, with
the commitments broken down into the 34
deliverables that formed the Agenda for
Change.
Progress and the validity of completion
against each of the commitments was
overseen, scrutinised and examined by two
independent parties: Sir Brian Leveson,
whose reports the group made available
publicly in line with its transparency; and
experts at KPMG.
We have faced into these issues and are
proud of the significant progress that we have
made, which in turn is influencing sustainable
change in British apparel manufacturing,
impacting the people who make the products
that we sell and the wider garment sector.
In March 2022, KPMG formally recognised
the completion of all aspects of the group’s
Agenda for Change programme. However,
the group remains focused on driving
continual improvement and has embedded
future actions within the various streams
of its board-led committees, including the
Risk Committee, Supply Chain Compliance
Committee and the new ESG Committee.
We have implemented both procedural and
cultural change, driven internally by our
own teams and informed by the extensive
work that we have done through working in
partnership with multiple external stakeholder
and NGO groups.
After 18 months of dedicated and hard work
by our talented teams, the boohoo group is a
stronger and more sustainable business that
is looking to the future. We are working side
by side with approved suppliers who share our
values to support our aim of backing British
manufacturing.
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ANNUAL REPORT AND ACCOUNTS 2022 STRATEGIC REPORT STRATEGIC REPORTBOOHOO GROUP PLC CHAIRMAN’S STATEMENT
OUR COVID-19 RESPONSE
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last two years."“
We continue to gain market
share, having grown the
group significantly over the
The group continues to
monitor and implement the
government’s 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 were subject to change
throughout the pandemic. There were periods
during the last two years when all office staff
worked from home, periods with limited
rotational workplace visits and periods when
all but essential workers worked at home.
Throughout this and the prior year, we
broadcasted frequent reminders and
updates to colleagues on safety procedures
and practices and monitored and tracked
COVID-19 cases. The business provided
rapid lateral flow testing in all locations to
keep our colleagues, their families and their
communities as safe as possible. At the time a
writing, we are relieved that life and business
operations are returning to normality, and
our hope is that this trend continues both at
home and abroad.
INCREASING OUR MARKET
SHARE AND INVESTING
IN OUR PEOPLE AND OUR
INFRASTRUCTURE
GROUP ACTIVITIES AND
PERFORMANCE
Set against extreme comparatives, we are
proud to have grown revenue by 14% on
2021 and by 61% on two years ago. Our UK
performance, up 27%, highlights the strength
of our brand portfolio and gives us confidence
in our business strategy. Overall, the
customer base has risen by 10% to 20 million.
We continue to gain market share, having
grown the group significantly over the course
of the last two years, when apparel markets
globally remain below pre-pandemic levels.
The financial performance this year is
subdued, especially when compared to the
excellent results of the prior years that
included the extraordinary events brought
on by the global COVID-19 pandemic. A
unique confluence of factors has reduced
profitability this year: overseas customer
demand has been subdued by lockdowns;
rising household costs and the effect
of extended delivery times; outbound
carriage costs have risen exponentially due
to lack of freight capacity; and inbound
shipping costs have risen equally as steeply,
together with extended in-transit times.
As the cost headwinds subside, we will
see a return to more normal profitability
levels, driven by the growth potential in our
larger and more diverse portfolio of brands,
an improved service proposition, a more
efficient infrastructure and the far greater
demographic and number of customers
that we now serve. In addition, we are at
an inflection point in our growth strategy:
we have acquired and relaunched four new
brands that are undergoing a continued
rebuilding process and have set up operations
for them in new warehouses and offices in
London. This investment comes at a short-
term impact on profitability, as the overheads
to revenue ratio is greater for the new brands.
Work to scale the new brands continues
at pace.
INVESTMENT FOR THE
FUTURE
Our strong balance sheet has enabled us to
continue to invest in our infrastructure and
our new brands. These investments will allow
us to capture a greater market share from our
brand diversity, keep ahead of technology to
continue to deliver an outstanding customer
proposition and improve efficiency in the
distribution centres. We have acquired new
offices in London and continued to improve
and renovate our offices in Manchester city
centre, all of which give our colleagues vibrant
workplaces. Our distribution centre capacity
has been extended through the acquisition
of two new facilities in Wellingborough
and Daventry and the automation project
in Sheffield continues at pace, which is
expected to yield significant cost savings. We
have also announced our intention to open a
distribution centre in the USA to improve our
customer proposition in the Americas. This
warehouse will be key in improving lead times
to the surrounding geographies, which should
in turn enhance our international customer
proposition.
SUSTAINABILITY
I feel especially proud of the achievements of
our sourcing, compliance and sustainability
teams, who have worked hard to deliver the
Agenda for Change. As Sir Brian Leveson
mentioned in his final report, supplier
compliance monitoring is a continuous
programme, and one we are committed to in
full, but we have completed the initial goals
we set ourselves in establishing rapid change
necessary to our business operations. We
have to be a sustainable business if we are
to continue to prosper and our sustainability
section in this report lays out our strategy in
this regard.
OUR TEAM
As always, on behalf of the board, I extend
our thanks and appreciation to all our
colleagues and partners who have contributed
to our success and who are a foundation of
our business ambition.
Mahmud Kamani
GROUP EXECUTIVE CHAIRMAN
3 May 2022
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ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLC
REVIEW OF THE BUSINESS
PERFORMANCE
DURING THE YEAR
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GROUP OVERVIEW
Group revenue for the year increased by 14% (14% CER) to £1.983
billion from £1.745 billion in 2021 and over the two-year period
increased by 61% from £1.235 billion in 2020, at a time when apparel
markets globally remain below pre-pandemic levels. International
revenue growth was dampened by the continued impacts of the
pandemic, due to extended delivery times and weaker consumer
demand. Growth in the UK, however, was very strong, supported by
organic growth in the existing brands and augmented by the newer
acquisitions. Return rates climbed to pre-pandemic levels, following
the exceptionally low levels in the previous year, which impacted net
sales growth in the second half of the financial year.
Adjusted EBITDA was £125.1 million (2021: £173.6 million; 2020:
£126.6 million), a decrease of 28% on the previous year and 1%
on 2020. Gross product margin was maintained at a level only
170bps lower than in the prior year at 52.5%, despite inbound
shipping expenses rising substantially due to the shortage of shipping
containers and lack of airfreight capacity, which, after mitigation,
presented approximately £22 million of headwind. Relative to 2020
rates, volume-adjusted marketing costs have been higher by £22
million in the face of weaker demand and investment in the newer
brands. Outbound carriage expenses continued to be elevated, and
represented a £38 million increase above pre-pandemic rates.
These headwinds together have reduced profitability and resulted in
Adjusted EBITDA margin of 6.3% (2021: 10.0%; 2020: 10.2%).
Profit before tax was £7.8 million (2021: £124.7 million;
2020: £92.2 million), a decrease of 94% on 2021 and 92% on 2020.
+61%
two-year growth
£125M
Adjusted EBITDA
6.3%
Adjusted EBITDA margin
Adjusted diluted earnings per share was
4.39p, down 49% on the prior year and 25%
on 2020. Diluted (loss)/earnings per share
was (0.32)p, a decrease of 104% (2021:
7.25p; 2020: 5.35p).
During the year, the group incurred a
number of significant, non-recurring costs,
which have been shown as exceptional items
in the financial statements and have not
been included in the adjusted performance
measures. These items relate to: dual running
and inefficiency costs within warehouses;
legal expenses and redundancy costs
associated with the acquisition of the new
brands in February 2021; additional costs
of working at the Sheffield warehouse
during the automation installation; and
irrecoverable sales taxes on customer returns
from the EU during the period after Brexit
and before simplified procedures in the EU
became operational. These exceptional items
amounted to £35.8 million and are detailed in
note 1 of the financial statements.
Cash generation was lower than prior years
due to the inventory build to service the
brand portfolio and to the longer product lead
times caused by the global issue of lengthy
shipping times and the expansion of the
supplier base that included a larger overseas
element, reflecting the group’s larger
portfolio of brands.
OVERVIEW
Revenue
Gross profit
Gross margin
Profit before tax
Diluted (loss)/
earnings per share
Net cash2 at year-
end
Adjusted
measures3:
Adjusted EBITDA4
% of revenue
Adjusted EBIT5
% of revenue
Adjusted profit
before tax6
Adjusted diluted
earnings per share7
2022
£ million
1,982.8
1,041.1
52.5%
7.8
2021
£ million
1,745.3
945.2
54.2%
124.7
2022
change on
2021
+14%
+10%
-170bps
-94%
2020
£ million
1,234.9
666.3
54.0%
92.2
2022
change on
20201
+61%
+56%
-150bps
-92%
(0.32)p
7.25p
-104%
5.35p
-106%
1.3
276.0 -£275 million
240.6 -£239 million
125.1
6.3%
84.1
4.2%
82.5
173.6
10.0%
149.3
8.6%
-28%
-370bps
-44%
-440bps
126.6
10.2%
107.0
8.7%
149.9
-45%
108.3
4.39p
8.67p
-49%
5.88p
-1%
-390bps
-21%
-450bps
-24%
-25%
1 Change on 2020, two years ago, compares current trading to the pre-pandemic period to give a better understanding of
performance when compared to the unusual growth and characteristics of trade in 2021.
2 Net cash is cash less borrowings, excluding lease liabilities.
3 Adjusted items, which are not statutory measures, show the underlying performance of the group excluding large,
non-cash and exceptional items (note 1).
4 Adjusted EBITDA is calculated as profit before tax, interest, depreciation, amortisation, share-based payment charges and
exceptional items.
5 Adjusted EBIT is calculated as profit before tax, interest, amortisation of acquired intangible assets, share-based payment
charges and exceptional items.
6 Adjusted profit before tax is calculated as profit before tax, excluding amortisation of acquired intangible assets,
share-based payment charges and exceptional items.
7 Adjusted diluted earnings per share is calculated as diluted earnings per share, adding back amortisation of acquired
intangible assets, share-based payment charges and exceptional items.
22
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ANNUAL REPORT AND ACCOUNTS 2022 STRATEGIC REPORTBOOHOO GROUP PLC
GEOGRAPHIC REVENUE
GROWTH (£m)
.
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2018
2019
2020
2021
2022
UK
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4
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2018
2019
2020
2021
2022
RO EUROPE
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1
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2018
2019
2020
2021
2022
USA
.
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4
0
2
1
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2
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0
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3
7
8
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2
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2018
2019
2020
2021
2022
RO WORLD
ACTIVE CUSTOMER
GROWTH (m)
m
9
9
1
.
m
0
8
1
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m
9
3
1
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m
4
6
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.
2018
2019
2020
2021
2022
Operating cash flow was £10.3 million (2021:
£201.1 million; 2020: £127.3 million). Net
cash flow was down £174.7 million (2021:
£30.6 million; 2020: £47.6 million),
following significant infrastructure capital
expenditure of £261.5 million. Our net cash
balance at the year-end reduced to £1.3
million (net cash, 2021: £276.0 million;
2020: £240.6 million), with total liquidity of
£101.3 million. After the year-end, the group
secured a new £325 million rolling capital
facility, increasing from the previous £100
million facility, which was fully drawn at the
year-end.
The group has invested heavily in preparation
for growth from both its existing brands
and more recent acquisitions. Two new
distribution centres have been opened and
become operational in Wellingborough
and Daventry and the automation of the
Sheffield distribution centre has commenced,
with an estimated completion date of
September 2022. Capital expenditure on
these facilities has amounted to £120.3
million. The acquisition of our London office
was completed in April 2021 and additional
studio facilities in London were acquired in
September 2021 for a combined £88 million.
We have also invested in our IT systems, with
£32.0 million of expenditure that enhances
both platform stability and additional
operating abilities, such as marketplace.
Active customer numbers in the last 12
months increased by 10% to 19.9 million and
have increased 43% over the last two years,
as a result of organic growth from our brands
and extension of our target addressable
market through brand acquisitions. Order
frequency increased marginally from 3.03
to 3.14 times p.a. and average order value
increased by 8% to £48.16. The number of
items per basket decreased from 3.34 to
3.04, driven partly by the addition of the new
brands with lower basket sizes and partly to a
return to closer to pre-pandemic basket sizes
in our established brands.
PERFORMANCE BY
MARKET
UK
The UK market continues to be the largest
for the group, accounting for 61% of revenue
(2021: 54%). Overall growth across all brands
was strong, up 27% on 2021 and up 77% on
2020, driven by the success of our multi-
brand strategy. Return rates have increased
back to pre-pandemic levels, being 9.8%pts
above the prior year at 33.7%. This is partly
attributable to the change in the product mix
from more casual items to occasion wear
and to the introduction of the newer, higher
price point brands, which all have higher
return rates.
Gross margin reduced slightly from 50.9%
to 49.4%, despite the substantial increases in
inbound shipping. Prices were raised across
some product lines to offset the increased
logistics costs, where we were unable to
change sourcing to alternative geographic
regions to reduce the impact of these cost
increases. Nevertheless, we are greatly
encouraged by the progress we are making in
growing our market share in the UK.
Rest of Europe
Our revenue in the rest of Europe decreased
by 10% over 2021, although increased by
16% on 2020, as the effect of continued
lockdowns has hampered the recovery of
demand together with the longer delivery
times. Return rates were only marginally
higher than in the prior year. Gross margin
remained healthy at 54.5%, down 1.7%pts on
the prior year.
USA
Growth in the USA was 4% up on 2021 and
up 71% on 2020. Return rates increased
marginally, but the continued extended
delivery times, driven by reduced airfreight
capacity, have subdued demand on the
group’s established brands. Menswear has
grown strongly as it gains market share and
gathers momentum, as have the newer
brands, albeit from a low base. Gross margin
decreased slightly by 0.1%pts to 59.8%.
24
Rest of World
Revenue in the rest of the world has
decreased by 10% on the prior year to £109.2
million (increased by 5% on 2020), impacted
undoubtedly by the delays in the distribution
network caused by greatly reduced airfreight
capacity. Gross margin declined slightly from
54.9% to 52.5%, a relatively small reduction
given the challenging conditions in overseas
territories brought about by the pandemic.
Airfreight capacity constraints, caused by
the pandemic, also kept distribution costs to
the more distant markets high and these are
expected to continue for some time to come.
Nevertheless, the region delivered growth in
the fourth quarter as a result of the positive
contribution from wholesale.
Agenda for Change
Progress continued at pace in the Agenda
for Change, with the publication of the full
UK manufacturer list in March 2021 and the
international manufacturer list in September
2021. Sir Brian Leveson’s fifth and final
report on Agenda for Change was published
in March 2022 and highlighted, in particular,
the strengthening of the product compliance,
sourcing, sustainability and quality assurance
teams and completion of the actionable items
contained in the Levitt Review. Further details
of the progress of the Agenda for Change are
contained in a separate section in this report
on page 18.
Corporate Governance
The group has delivered on its commitment
to strengthen its corporate governance with
the appointment of two new and independent
non-executive directors. Tim Morris joined
the board in May 2021 and brings a wealth
of experience built on his career in legal
services and in business entrepreneurship,
which will be invaluable as he focuses on the
oversight of risk and corporate governance.
Additionally, Kirsty Britz joined the board in
October 2021. Kirsty has spent a large part of
her career on sustainability and professional
standards and brings expertise that will
assist the group in defining and executing
its sustainability practices. The group has
recently constituted an ESG Committee,
which will oversee its ESG strategy and
provide recommendations to the Executive
ESG group. These enhancements ensure
that key ESG matters are considered by
leaders and decision-makers, who are
appraised of the relevant information, at the
appropriate time.
With the completion of the Agenda for
Change programme, we are embedding the
core themes of the programme – corporate
governance, purchasing practices and our
support for the garment sector – into
sustainability KPIs across our business that we
monitor monthly.
Sustainability
We recognise the environmental impact
of fashion and our responsibility to reduce
the negative aspects of production, waste
and poor longevity of apparel. We have built
a sustainability function in our business
and have developed a strategy to target
three material areas of focus: clothes made
smarter; suppliers on better terms; and our
business taking action. The ESG function is
overseen by a non-executive director with
expertise in the subject. Full details on our
sustainability strategy and our results to date
can be found on pages 46-66 and within
our published documents on our corporate
website.
In the last year, the group published its
sustainability strategy, UP.FRONT, with
three pillars:
1. Clothes made smarter;
2. Suppliers on better terms; and
3. Our business taking action.
25
Clothes made smarter: the group is
targeting increases in products made from
more sustainable materials (targeting all
polyester and cotton to be more recycled or
sustainably sourced by 2025); improvements
in sustainably-designed products; the
introduction of resale and recycling offers
across our brands by 2023 (with the
PLT resale marketplace due to launch in
FY2023); and increases in recycled content
in our labelling and packaging.
Suppliers on better terms: focuses on
transparency, standards and programmes.
Global supplier and factory lists have
been published, as well as our responsible
purchasing practices. More robust supplier
standards and a rigorous management
programme have been implemented by our
sourcing teams, supported by improved
systems to order, monitor and track products
ordered from our suppliers. The group also
became a member of Fast Forward, and by
September 2022 will have completed the
Fast Forward audit programme in its UK
supply chain. In the last year, the group has
also set up and donated £1 million to the
Garment and Textile Works Trust in Leicester
and recently opened its manufacturing centre
of excellence in Thurmaston Lane.
Our business taking action: the group has
made progress in the last year under its third
sustainability pillar; embedding sustainability
risks and opportunities into decision-making
and KPIs (and the constitution of a dedicated
ESG Risk Committee). The group has set out
climate change targets based on the Science-
Based Targets Initiative, with the goal of
achieving carbon reductions across our value
chain that are equivalent to 52% reduction in
emissions relative to our growth by 2030.
ANNUAL REPORT AND ACCOUNTS 2022 STRATEGIC REPORT STRATEGIC REPORTBOOHOO GROUP PLC KEY PERFORMANCE INDICATORS
CONTINUED PROFITABLE GROWTH
FINANCIAL REVIEW
Revenue
£1,983 MILLION
Active Customers
19.9 MILLION
Number of Orders
62.4 MILLION
m
3
8
9
,
1
£
m
5
4
7
,
1
£
m
9
9
1
.
m
0
8
1
.
m
4
2
6
.
m
7
4
5
.
2021
2022
2021
2022
2021
2022
Order Frequency
Conversion Rate to Sale
3.14
4
1
.
3
3
0
3
.
2.76%
2
7
2
.
6
7
2
.
Average Order Value
£48.16
6
1
.
8
4
£
.
9
5
4
4
£
2021
2022
2021
2022
2021
2022
Number of Items per Basket
3.04
4
3
3
.
4
0
3
.
2021
2022
REVENUE BY
GEOGRAPHICAL MARKET
UK
Rest of Europe
USA
Rest of world
2022
£ million
1,202.8
219.2
451.6
109.2
1,982.8
2021
£ million
945.1
244.7
435.1
120.4
1,745.3
2022
change on
2021
+27%
-10%
+4%
-9%
+14%
2022
change on
2021
CER
+27%
-9%
+4%
-10%
+14%
2020
£ million
679.4
188.4
263.6
103.5
1,234.9
KPIS
Active customers1
Number of orders
Order frequency2
Conversion rate to sale3
Average order value4
Number of items per basket
1 Defined as having shopped in the last 12 months on the website and app, including marketplace.
2 Defined as number of website and app orders in last 12 months divided by number of active customers.
3 Defined as the percentage of website and app orders taken to internet sessions.
4 Calculated as gross sales including sales tax divided by the number of orders.
Note: 2020 data not available due to improved data gathering introduced in 2021 and 2022.
2022
19.9 million
62.4 million
3.14
2.76%
£48.16
3.04
2021
18.0 million
54.7 million
3.03
2.72%
£44.59
3.34
2022
change on
2020
+77%
+16%
+71%
+6%
+61%
2022
change on
2021
+10%
+14%
+4%
+4bps
+8%
-9%
26
27
ANNUAL REPORT AND ACCOUNTS 2022 STRATEGIC REPORT STRATEGIC REPORTBOOHOO GROUP PLC FINANCIAL REVIEW
CONTINUED
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
Exceptional items
Operating profit
Finance income
Finance expense
Profit before tax
Tax
(Loss)/profit after tax for the year
2022
£ million
1,982.8
(941.7)
1,041.1
52.5%
(916.1)
0.1
125.1
6.3%
(32.0)
(9.0)
84.1
4.2%
(12.8)
(26.1)
(35.8)
9.4
–
(1.6)
7.8
(11.8)
(4.0)
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
2022
change on
2021
+14%
+18%
+10%
-170bps
-28%
-360bps
-44%
-440bps
-92%
-94%
-104%
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
2022
change on
2020
+61%
+66%
+56%
-150bps
-1%
-400bps
-21%
-450bps
-90%
-92%
-105%
Diluted (loss)/earnings per share
(0.32)p
7.25p
-104%
5.35p
-106%
Adjusted profit after tax for the year
Amortisation of acquired intangible assets
Share-based payment charges
Exceptional items
Adjustment for tax
(Loss)/profit after tax for the year
Adjusted profit for the year attributable to shareholders of the
company
Adjusted diluted earnings per share
56.3
(12.8)
(26.1)
(35.8)
14.4
(4.0)
56.3
4.39p
113.8
(5.5)
(19.7)
–
4.8
93.4
108.5
8.67p
-51%
-48%
-49%
86.0
(5.1)
(11.0)
–
3.0
72.9
69.9
5.88p
-35%
-19%
-25%
Revenue in the financial year grew 14% (up 61% on a two-year basis), with strong growth in the UK partly offset by weaker demand in overseas
markets due largely to extended delivery timeframes, which negatively impacted the group’s international proposition to customers. Gross margin
declined 170bps year-on-year, as a consequence of elevated inbound shipping costs arising from the pandemic.
Operating costs, comprising distribution costs and administrative expenses excluding depreciation and amortisation, have increased by 190bps to
46.2% of revenue, driven by higher marketing costs and continued high levels of 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 decreased by
28% from £173.6 million to £125.1 million and, as a percentage of revenue, decreased from 10.0% to 6.3%.
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.
Exceptional items relate to: dual running and inefficiency costs of the warehouses; legal expenses and redundancy costs of some employees
associated with the acquisition of the new brands in February 2021; additional costs of working at the Sheffield warehouse during the automation
installation; and irrecoverable sales taxes on customer returns from the EU during the period after Brexit and before simplified procedures in the
EU became operational. These exceptional items amounted to £35.8 million. Exceptional items are shown in more detail in note 1 of the financial
statements on page 113.
TAXATION
The effective rate of tax for the year was 151.3% (2021: 25.1%), which is higher (2021: higher) than the UK statutory rate of tax for the year of
19.0% (2021: 19.0%), due to the revaluation of deferred tax liabilities in line with the increase in corporation tax rates to 25%, 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
2022
£ million
128.5
349.2
49.7
2.8
7.5
537.7
(12.7)
(51.9)
7.4
101.3
(100.0)
(25.3)
7.8
464.3
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
There has been a substantial investment in property and distribution centres to facilitate our next growth phase, which has been partly funded out
of cash resources and partly from the fully drawn rolling capital facility of £100 million. Working capital has increased largely because of the build in
inventory to service the new brands along with the growth of the business in general.
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
2022
£ million
2021
£ million
2020
£ million
–
32.0
32.0
120.3
109.0
0.2
229.5
261.5
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 £10.3 million compared to £201.1 million in the previous year and free cash outflow after tax was £251.2 million compared
to an outflow of £121.8 million in the previous financial year. Capital expenditure and intangible asset purchases were £261.5 million, which includes
a £120.3 million investment in our distribution centres to support projected growth in the business. The closing cash balance for the group was
£101.3 million and the net cash balance £1.3 million. In March 2022, a new £325 million rolling capital facility was secured.
28
29
ANNUAL REPORT AND ACCOUNTS 2022 STRATEGIC REPORT STRATEGIC REPORTBOOHOO GROUP PLC FINANCIAL REVIEW
CONTINUED
CONSOLIDATED CASH FLOW STATEMENT
(Loss)/profit after tax for the year
2022
£ million
(4.0)
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 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
Increase in/(repayment) of borrowings
Net cash (out)flow
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
26.1
53.8
–
1.6
–
11.8
(134.5)
(17.7)
73.2
10.3
(261.5)
–
–
–
(251.2)
6.8
(19.2)
–
(0.9)
–
(10.2)
100.0
(174.7)
276.0
101.3
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
TRENDS AND FACTORS LIKELY TO AFFECT FUTURE PERFORMANCE
The global market for online fashion is forecast to continue to grow, which provides a favourable backdrop for the group with much opportunity for
further growth. Customers throughout the world are seeking a wide choice of quality fashion forward products at value prices, generally 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 has proven to be quite resilient to external macroeconomic factors.
The pandemic has impacted our business and is most significantly seen in the unpredictability of customer demand, the rate of customer returns,
the increase in shipping times and the cost of shipping on both inbound and outbound products. Some of these factors, such as the rate of
customer returns, have already reverted from the low rates during the pandemic to rates seen before the pandemic, while other factors such as
the shipping cost increases are taking longer to move towards pre-pandemic levels. We expect shipping costs to continue at elevated levels during
FY2023. Wage costs have also risen, given heightened levels of inflation, and in the UK the group will incur a 1.25% increase in National Insurance
and a 6.6% increase in the National Living Wage expected from April 2022. Higher levels of inflation have also been seen in materials and the group
will work to mitigate these costs across labour and materials where possible.
OUTLOOK
Heading into the new financial year, the group
is planning the business on the basis that the
pandemic-related external factors impacting
performance in FY2022 will continue for the
year ahead. The group’s priorities therefore
are focussing on optimising its operations,
including:
LONGER-TERM COMPETITIVE POSITIONING AND
OPPORTUNITY TO TAKE MARKET SHARE UNCHANGED
The group expects to emerge from the pandemic in a far stronger position compared to two
years ago. Reflecting significant and ongoing investments in its platform, brands, distribution and
people, the group has:
• A broader portfolio of brands and a significantly larger target addressable market with 500
million potential customers across key markets
• Greater infrastructure capacity capable of supporting in excess of £4 billion of net sales, with
automation investments driving future efficiencies
• Sourcing and freight
• Committed to opening a new distribution centre in the USA, significantly strengthening the
customer proposition
• 20 million customers globally
• Numerous growth opportunities through the group’s direct to consumer proposition,
Debenhams and strategic partnerships with select partners globally.
We remain extremely confident in the group’s future growth prospects, and as short-term
demand uncertainty and material cost headwinds as a result of the pandemic unwind, the group’s
belief that it continues to be capable of executing its strategy aimed at leading the fashion
e-commerce market remains unchanged.
S
T
R
A
T
E
G
I
C
R
E
P
O
R
T
Targeting increased sourcing from near-
shore markets, leveraging the flexibility
that exists in the group’s diverse supplier
base to reduce lead times that have been
negatively impacted through global supply
chain challenges in FY2022 and exposure
to fluctuating inbound freight costs that
remain elevated.
• Stock management and returns
Operating with lower levels of inventory
through tighter stock management and
increased levels of open to buy, giving
greater flexibility to react to changes in
demand mid-season. Whilst returns rates
are expected to remain around current
levels during FY2023, the group will
annualise material increases in return rates
in the first half of the new financial year.
• Cost management
The group has commenced a cost
efficiency programme, and by scaling
recent acquisitions that have already
received significant investment, overheads
across the group can be leveraged.
• Unlocking strategic enablers
Focusing resources and capital investment
into key projects to support strategic
growth, including: onboarding new
wholesale partnerships; upgrading the
Debenhams technology platform; going
live with automation in our Sheffield
distribution centre; and progressing our
US distribution centre ahead of go-live
in 2023
By focusing on these areas, the group will
be in a position of greater financial and
operational strength, and well-positioned
to rebound strongly as pandemic-related
headwinds ease, allowing it to capitalise on
its significantly expanded target addressable
market, returning towards normalised growth
rates of 25% per annum post-pandemic and
adjusted EBITDA margin rebuilding back
to 10%.
30
31
ANNUAL REPORT AND ACCOUNTS 2022 STRATEGIC REPORTBOOHOO GROUP PLC
RISK MANAGEMENT
HOW WE MANAGE RISK
A MESSAGE FROM SHAUN
MCCABE
Dear Shareholders,
The board recognises that a robust risk
management framework is a fundamentally
important part of our ability to maintain
stakeholder confidence. Since the
establishment of the Risk Committee
in December 2020, we have dedicated
focus to the evolution of our internal risk
controls, policies and procedures as part of
our commitment to deliver the Agenda for
Change programme. I believe such has been
integral to achieving our aim of entrenching
effective risk management throughout the
business.
As the Agenda for Change shifts to being
embedded as part of business as usual,
the board has given clear indications of its
appetite for dealing with risk and willingness
to introduce enhanced audit where required.
The board is alive to the need to ensure that
the high level of oversight achieved during the
past 18 months is not lost in this transition.
The Risk and Audit Committees will have an
important role to play in this area, alongside
the newly established ESG Committee.
I am personally delighted of the progress we
have made but it is important to highlight
that our journey is ongoing. As part of our
commitment to shareholders, we will closely
monitor independent assurance from the
internal audit function as to the adequacy and
effectiveness of the group’s internal controls
and risk management systems, particularly
as they relate to key Agenda for Change
programme risks.
The board remains vigilant to significant risks
faced by the group, including unprecedented
and fluctuating supply chain costs and
the increasing likelihood of complex data
breaches and ransomware attacks from
external threats. In the year ahead, we
will renew our focus on the continued
development of our cybersecurity strategies
and internal controls, and spend time
understanding, managing, controlling, and
mitigating key strategic risks across the
business.
Shaun McCabe
NON-EXECUTIVE DIRECTOR AND CHAIR
OF THE RISK AND AUDIT COMMITTEES
3 May 2022
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 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 ongoing improvements to the risk
management framework at boohoo group plc
and the way we manage risk, this includes but
is not limited to:
• The evolution of the risk management
policy, approved annually by the board;
• The establishment of additional risk
focused governance structures;
• The provision of risk management training
to senior executives;
• Continued assessment of risk appetite at
board level;
• Dedicated risk management resource
within the internal audit and risk team;
• The introduction of a leading risk
management and audit software
system; and
• Liaising with external partners, including
KPMG, on ensuring the Agenda for
Change programme is comprehensively
transitioned within the risk management
framework.
T
R
O
P
E
R
C
I
G
E
T
A
R
T
S
“
I am personally delighted
of the progress we have
made but it is important to
highlight that our journey
is ongoing."
RISK GOVERNANCE
In the year ended 28 February 2021, the
group had 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 had established functional risk
groups across the business to identify,
assess, monitor and manage risks held at a
functional level.
In the year to February 2022, further
governance structures have been
embedded into the group. The Treasury
Review Committee and Health and Safety
Committee report functional risks to the
Executive Risk Group and Risk Committee.
The Supply Chain Compliance Committee
was formed as part of the Agenda for Change
programme as the stand-alone governance
committee overseeing supply chain risks and
issues and reporting to the board. Over the
last financial year, this has formed a key part
of our supply chain governance processes.
With the conclusion of the Agenda for Change
programme, the reporting and governance for
supply chain compliance moves into the risk
management framework with a Governance
and Ethical Compliance Committee, reporting
to the Executive Risk Group, Risk Committee
and board.
As noted in the Corporate Governance section
on page 69 there are a number of other
governance improvements that have been
made in the last financial year that all directly,
or indirectly, report risk-related matters into
the Executive Risk Group and Risk Committee.
There are also new governance structures
being embedded into the group in the financial
year 2023.
32
33
ANNUAL REPORT AND ACCOUNTS 2022 STRATEGIC REPORTBOOHOO GROUP PLC
RISK MANAGEMENT
HOW WE MANAGE RISK
CONTINUED
OUR RISK MANAGEMENT APPROACH
KEY (movement in year)
➞
➞
N
INCREASED
LEVEL
DECREASED NEW
The following are considered to be the principal risks and uncertainties as at the year ending 28 February 2022.
Introduced in financial year 2022/23
Governance and Ethical
Compliance Committee
At least quarterly monitoring of
FUNCTIONAL RISK
PLC Board
Twice yearly monitoring of STRATEGIC RISK
Strategic risk reporting
Risk appetite
Risk Committee
Quarterly monitoring of STRATEGIC RISK
Strategic risk reporting
Functional risk reporting
Executive Risk Management Group
Quarterly monitoring of STRATEGIC RISK
and escalated FUNCTIONAL RISK
Functional risk reporting
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
Introduced in the last financial year
Treasury Review Comittee
At least quarterly monitoring of
FUNCTIONAL RISK
Health and Safety Committee
At least quarterly monitoring of
FUNCTIONAL RISK
•
Identify – Top down and bottom up identification methods including workshops, interviews, committees, focus groups and ad hoc.
• Assess - Prioritisation and measurement of risks using consistent risk assessment methods and against risk appetites agreed with the board.
• Manage – Identifying, improving, reviewing and auditing 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, control measures 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 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, control
measures and any actions related to that risk
are updated.
Functional, strategic and project risk
registers are prepared using a consistent
risk management methodology approved
annually by the board. The registers are used
to evaluate business impact and likelihood
ratings, both before (inherent) and after
(residual) the effect of any mitigating
activities or controls.
Where there are projects that will have, or
could have, a material impact on any strategic
risk, or where a project could introduce new
material risk into the business, specific project
level risk registers are maintained following
the same risk management methodology as
functional and strategic risks.
The risk management process is underpinned
and documented across the group using a
leading risk management software system
introduced in the last financial year. The
software enables the Internal Audit and Risk
team, risk and control owners, accountable
directors and senior leadership real time
access to up-to-date and accurate risk
information at a strategic and functional
level, as well as ensuring appropriate
documentation and trend analysis.
Internal Audit planning is strongly aligned
to the key strategic and operational risks
defined by the board via the Risk Committee
and Executive Risk Group and the results
of internal and external audits are factored
into the regular review of strategic and
functional risks.
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 Executive Risk Group and Risk
Committee perform a full review of the
strategic risks, on a line-by-line basis twice
a year in congruence with the financial
reporting timetable. Considered in this review
are the addition or removal of strategic risks,
the risk rating of each risk and impact of
current mitigating factors and actions. The
Executive Risk Group meets every six weeks
formally, with direct lines of communication
established for real-time consideration,
should there be material changes to the risks
faced by the business between meetings.
STRATEGIC RISKS
Risk heading and risk owner
SUPPLY CHAIN
ETHICS
Director of Responsible
Sourcing and Group Product
Operations
➞
Risk factors
Mitigation
As a result of complexity inherent
within the supply chain and non-
compliance with required supply
chain standards, there is a risk that
inappropriate, unethical or illegal
practices go undetected which could
lead to investigations from regulatory
bodies and may cause reputational
damage.
COMPETITION RISK
CEO and CFO
➞
The business operates in a broad and
open market, with many competitors.
There are many factors that influence
customers' choices, 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.
SUSTAINABILITY
Director of Responsible
Sourcing and 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.
• UK and EMEA (Turkey, Italy, Paris) sourcing and compliance
teams now in place
• UK supply chain published March 2021, ROW published
September 2021, both lists have been updated twice, in
December 2021 and February 2022
• Bureau Veritas nominated audit partner and auditing programme
in place, non-compliance correction process managed through
UK ethical compliance team. UK manufacturing supply chain
under-going Fast Forward audit programme
• Supplier hourly production outputs programme underway
• Responsible Purchasing Practices built by brands and part of
brand buying practices. Modern slavery, anti-bribery and ethical
compliance training programmes and plans in place in all areas of
boohoo business
• During the financial year, this risk has been primarily managed
through the Agenda for Change programme. As agreed and
supported by the Agenda for Change external advisers, we
have transitioned the day-to-day management of this risk and
relevant controls into business as usual, this activity is monitored
via the Governance and Ethical Sourcing Committee
• Operating a differentiated business model, across brand and
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 Strategy published 2021 with ambitious targets,
product sustainability targets updated and published fortnightly
via dedicated governance committee
• Dedicated and experienced Sustainability Team in place
• Partnership with Cotton Connect and a Pakistan-based
NGO to grow sustainable cotton in Rajanpur, Pakistan. Styles
containing more sustainably grown cotton published on brand
websites
• Members of Sustainable Apparel Coalition, top 50 and all UK
suppliers currently completing Facilities Environmental Module
• Fabric waste collection programme being rolled-out across all
UK manufacturers
• New ESG Committee and 'E' 'S' and 'G' sub-committees
established
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ANNUAL REPORT AND ACCOUNTS 2022 STRATEGIC REPORT STRATEGIC REPORTBOOHOO GROUP PLC KEY (movement in year)
➞
➞
N
INCREASED
LEVEL
DECREASED NEW
STRATEGIC RISKS
Risk heading and risk owner
TAXATION AND
DUTIES
CFO
Risk factors
Mitigation
Governments may impose additional
corporation taxes on online
businesses.
Governments are increasingly
reducing duty and tax-free
thresholds on imports and imposing
tax collection responsibility on
sellers, thereby increasing prices to
consumers.
• Impact of potential future corporation tax rates is considered in
future plans
• 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
SUPPLY CHAIN
COSTS AND DELAYS
CEO
N
As a result of increased freight
and distribution costs seen across
industries around the world, there is
a risk that products do not achieve
an acceptable margin or that
supply chain delays have an impact
on speed.
• Dedicated sourcing team and inbound team, which looks to
identify market opportunities for keeping costs down
• Differentiated supply chain mechanisms so as to not be wholly
reliant on one form of transport
• Approximately 25% of products are sourced from the UK, which
limits macro exposure
• Work ongoing to establish US distribution centre to improve
market offering in US
RISK MANAGEMENT
HOW WE MANAGE RISK
CONTINUED
STRATEGIC RISKS
Risk heading and risk owner
GOVERNANCE
CFO
➞
Risk factors
Mitigation
As a result of historical governance
issues there is a risk of the business
not meeting the best interests of its
stakeholders.
• Sustainable change has been driven by A4C and embedded
within business practices
• New non-executive directors have been recruited to improve
governance
• New committee structure established including new standalone
governance committees relating to supplier compliance,
treasury, health and safety and ESG
• See Corporate Governance section on page 58 for further
details
• Board commitment to positive change, led from within the
business and increased communications from senior leadership
• Investment in colleague engagement, including regular town
halls, listening sessions and improved on-boarding processes
• Investment in colleague training to support change
• New starter breakfast breakfast and focus group sessions
• Group personal behaviour values developed for all levels
• Team building sessions and away days
• Comprehensive and refreshed training of colleagues on the
importance of GDPR and data security
• Advice sought and acted upon from experts in data privacy
to provide guidance on mitigating the risk to the group – with
regular updates on progress presented to the Executive Risk
Group, Risk Committee and board
• Privacy policies and procedures reviewed and updated regularly
• Understanding and compliance to key laws and compliance
thereto
• Impact reduced by skilled legal team in house and utilising
specific expert advice from external lawyers in territories
concerned
• Corporate Affairs team in place, which monitors emerging
regulations to ensure the business is best placed for any new
compliance requirements – e.g. buy-now-pay-later
• Expert counsel taken to fully understand M&A risks prior to
acquisitions
ETHOS AND CULTURE
Chief People Officer
➞
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.
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, which could lead to
financial penalties and reputational
damage.
As a result of emerging regulations,
there is a risk that additional
compliance costs are incurred in the
future.
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.
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ANNUAL REPORT AND ACCOUNTS 2022 STRATEGIC REPORT STRATEGIC REPORTBOOHOO GROUP PLC RISK MANAGEMENT
HOW WE MANAGE RISK
CONTINUED
OPERATIONAL RISKS
Risk heading
IT AND
CYBERSECURITY
CIO
CHANGE
CIO
THIRD PARTIES
CIO
BUSINESS
CONTINUITY/
DISASTER RECOVERY
CFO/CIO/Supply Chain
director
Risk factors
Mitigation
There is a risk of a cyber-attack,
which could lead to application,
system and operational downtime
and may impact trading and
operations across the group.
As a result of a high number of
critical projects running in parallel,
including upgrading key IT systems,
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.
• Board engagement in cyber risks, mitigations and plans. Regular
updates at Executive Risk Group and Risk Committee
• 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 tools and
security teams
• Training of both technical and non-technical teams regarding
cybersecurity
• Growth of projects capability including head of delivery and
project function, business analysts and project managers
• Investment in replacing the Enterprise Resource Planning
(“ERP”) system and connective infrastructure
• The Change Advisory Board (“CAB”), consisting of senior
leadership and executive directors, ensures that approvals are
obtained in advance of changes being implemented
• Established project methodology including the right level of
governance for each project
• Resourcing managed and reviewed to ensure key projects are
prioritised
• Material projects go through full boohoo risk management
methodology
As a result of reliance placed on
third parties, there is a risk that key
third parties are not performing in
line with expectations, which could
lead to operational and technological
disruption.
• 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
• Technology suppliers managed through regular cadence of
meetings
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 or
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
business continuity incident occurs at one site
• Business Continuity Plans are in place for all sites
• IT disaster recovery covers critical applications and third-party
contracts with appropriate service level agreements
• Investment on monitoring and alerting governance and change
management
• Tech colleagues can work 24/7 from anywhere
KEY (movement in year)
➞
➞
N
INCREASED
LEVEL
DECREASED NEW
OPERATIONAL RISKS
Risk heading
PEOPLE RISK
Chief People Officer
➞
PRODUCT RISK
Director of Responsible
Sourcing and Group Product
Operations
FINANCIAL RISKS
Risk heading
FINANCIAL RISK
CFO
Risk factors
Mitigation
Competitors are inclined to poach
key staff and talented individuals.
Employees may leave the company
for better pay and prospects
elsewhere.
Macro-environmental changes
resulting in increased staff turnover
across industries.
As a result of these risk factors,
there is a risk that the group’s ability
to recruit and retain staff affects its
ability to operate as a market leader.
As a result of health and safety
regulations in relation to products,
there is a risk of product liability costs
and potential legal implications.
As a result of product quality issues,
there is a risk of a decline in customer
satisfaction.
• Smarter Working Policy introduced
• Evolved and redesigned appraisal process
• Employee listening groups held across sites
• Renewed exit interview process and learning from feedback
• Review of employee benefits packages
• Improved benchmarking against industry standards
• ‘Thank you’ scheme launched across sites
• Improved communication and explanation of the share incentive
schemes in place
• Product Compliance Team in place in the UK and Turkey
• boohoo product performance lab opened, programme to test
suppliers’ products and educate suppliers and buying teams
• Product performance manuals in place, continuous training
seminars underway on categories such as cosmetics, kids and
footwear, with buyers and suppliers
• All brands bar boohoo and MissPap now operating on a 2.4 AQL
(previously 4.0), next steps – boohoo and MissPap
• Product compliance checks have commenced in Turkey and due
to begin in Italy
Risk factors
Mitigation
Poor business performance, or
lack of appetite for the sector, may
impede raising of capital.
• Regular budgeting and forecasting ensures working capital
is sufficient for business requirements and rapid reaction to
adverse business performance
Exchange rate fluctuations may
erode margins.
The increase in supply chain costs
also negatively impacts available
working capital.
• Uncertainty due to fluctuating exchange rates is reduced by
appropriate forward-looking hedging policies
• Significant improvements have been made to the treasury
function
• New Treasury Committee established to oversee treasury
matters
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ANNUAL REPORT AND ACCOUNTS 2022 STRATEGIC REPORT STRATEGIC REPORTBOOHOO GROUP PLC RISK MANAGEMENT
WHAT’S ON OUR RADAR
Through the ongoing work of risk owners and the Internal Audit and Risk Team, such as regular workshops,
interviews and risk and control update sessions, the business continues actively to identify emerging risks and
issues that could impact the group’s activities across the world.
PLC Board
Sets strategic direction, ensures compliance and
provides counsel and oversight
ESG Committee
Sets and oversees ESG strategy and provides
recommendations to Executive ESG Group
Executive ESG Group
At least quarterly monitoring of strategic risk
and making recommendations to the Board and
its Committees
Environmental and Climate Change
Committee
At least quarterly monitoring of functional risks
CLIMATE CHANGE
Ahead of the requirement to disclose in line
with the Task Force on Climate-Related
Financial Disclosures (“TCFD”) guidelines in
future annual reports, this financial year has
seen us take action with regards to analysing
our physical and transitional risks associated
with climate change.
Governance
As can be seen in the Corporate Governance
section on page 69, the group has established
a dedicated Environment and Climate
Change Committee, consisting of leaders
across different functions of the business and
chaired by our Head of Sustainability. This
group reports directly into the new Executive
ESG Group in order to be accountable for
our efforts in managing our physical and
transitional risks related to climate change.
Strategy
This year saw us enlist the help of external
experts in mapping both physical risks,
those related to both our physical estate
(distribution centres/offices) and our global
supply chain, as well as our transitional
risks, such as government policy, taxation,
customer sentiment and reputation under a
range of different climate scenarios.
Over the course of the next financial year,
we will look to ensure the results of this risk
analysis and evaluation exercise is aligned with
the group’s strategic ambitions and plans.
Risk management and metrics and
targets
Now that the initial risk identification process
has been completed, we will take action on
ensuring the recommendations outlined in
the external report are addressed and bring
the climate change risk management process
into the wider group risk management
framework, with medium and long-term
actionable targets and a constant re-
evaluation of the risks facing the group.
The metrics, targets, actions and goals of
this process will be actively managed by
the Environment and Climate Change
Committee and overseen by the Executive
ESG Group.
INCREASED LEVEL OF RETURNS
As a result of changing buying behaviours since the COVID-19 pandemic, we have
experienced an increased level of returns. We have dedicated returns processes within the
distribution centres and are constantly reviewing the processing of returns to ensure, where
possible, product can be returned to the supply chain or processed for resale.
MACROECONOMIC FACTORS
The group continues to monitor macroeconomic conditions and geopolitical situations across
the markets in which it operates.
In the UK, the group is conscious of material increases in the cost of living impacting its
customers. Through our differentiated brand model, we ensure our product offering and our
position in the market is continuously managed, so as to continue to grow our market share to
mitigate the impact of this risk
Globally, geopolitical unrest is monitored continuously to ensure the group’s exposure to the
markets, distribution or supply base affected is managed appropriately.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
Dear Shareholders,
The group has direct experience of how ESG
performance impacts people, communities,
its reputation, and its ability to create value
and profitability. It is 15 months since the
group published the Alison Levitt QC
independent report and committed to
implementing all of the recommendations.
The group established its ‘Agenda for Change’
programme, resolving to take urgent action
to meet all 17 of the recommendations. In
February this year, all 17 of these actions were
signed off as complete by Sir Brian Leveson
and independently assured as such by KPMG.
See page 18 to learn more.
Over the last 12 months, the group has
broadened its attention beyond the supply
chain to the wider management of ESG. The
group has grown significantly over the last
two years and the board and the leadership
team recognise the need to learn from
the Agenda for Change programme and
undertake a commitment to embed ESG into
the operations, culture and governance of
the group. It is in this context that last year
the group announced UP.FRONT, its first
sustainability plan, and the first step towards
embedding a comprehensive ESG strategy,
one which reflects the size and breadth of the
business of today.
This plan tackles three material areas; more
sustainable design and manufacturing of
clothes, stronger standards and relationships
with suppliers and taking action in responsible
business practices. Last year saw progress in
all three areas:
• The group has started its journey to
improve transparency of product
composition through the READY FOR
THE FUTURE initiative. The intention
is to continue to invest to provide more
sustainable products that our customers
will continue to buy, wear and love in years
to come.
• Work is underway to source centrally
more sustainable fabrics, with a focus
on recycled materials and alternatives to
conventional cotton. boohoo group plc is
a member of the Better Cotton Initiative
(“BCI”) and has made progress in sourcing
of BCI cotton. I am particularly pleased
that, in partnership with Cotton Connect,
we are supporting farmers in Pakistan to
grow responsible environment-enhanced,
livelihood (“REEL”) cotton and look
forward to the opportunities this presents.
• A critical part of the group’s ESG strategy
will be to develop its understanding,
strategy and management of climate
change risks. This year, the group has
again calculated and published its carbon
emissions across its value chain, had its
science-based targets approved by the
Science-Based Targets Initiative and
started to the lay the foundations for its
carbon programme. As a clothing retailer,
the group’s carbon emissions are primarily
driven by the manufacturing of products
sold and distribution of those products.
The group is aware it has a challenging
journey ahead in achieving its science-
based targets. This year its progress in
emissions reductions has been affected by
global freight challenges. The introduction
of logistics and transportation efficiency
measures combined with the group’s
product sustainability programmes, will help
set the group in the direction of achieving
its climate change goals.
• Finally, the group has a proud history
of supporting the communities where it
operates and this has been taken a step
further this year:
• The recent announcement to donate 1%
of the group’s pre-tax profits to good
causes as part of its new social impact
strategy
• As a business that has given hundreds
of young people the first step on
their careers, the group will have
a particular focus on inspiring and
championing young people whose path
into the fashion industry may not be
straightforward
• The commitment to use the group’s size
and scale to help make the social media
space kinder, more transparent and
real, to ensure that young people can
recognise what’s real and what’s not
The decision to establish a board sub-
committee dedicated to ESG is an important
next step to oversee progress over the
coming years. I am pleased to chair this
committee, which will support the next phase
of growth and the group’s path to building a
sustainable future.
Kirsty Britz
NON-EXECUTIVE DIRECTOR AND CHAIR OF
THE ESG COMMITTEE
3 May 2022
“
The decision to establish
a board sub-committee
dedicated to ESG is an
important next step to
oversee progress over the
coming years."
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ANNUAL REPORT AND ACCOUNTS 2022 STRATEGIC REPORT STRATEGIC REPORTBOOHOO GROUP PLC ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
CONTINUED
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We published our sustainability strategy in March 2021. In developing the strategy, we went through a comprehensive
process. 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 further insight from our business and customer research teams, 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 designed to make progress on the sustainability issues,
where we can and should make a real difference to work in an open, collaborative way in order to get there.
There are three focus areas in our UP.FRONT strategy. This year, we have focused on laying the foundations to deliver our
strategy and making progress in each of our priority areas.
CLOTHES MADE
SMARTER
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.
SUPPLIERS ON
BETTER TERMS
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.
FOR MORE INFORMATION ABOUT
OUR APPROACH GO TO PAGE 44 OF
THE REPORT
FOR MORE INFORMATION ABOUT
OUR APPROACH GO TO PAGE 45 OF
THE REPORT
OUR BUSINESS
TAKING ACTION
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.
FOR MORE INFORMATION ABOUT
OUR APPROACH GO TO PAGES
46 TO 47 OF THE REPORT
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ANNUAL REPORT AND ACCOUNTS 2022 STRATEGIC REPORT STRATEGIC REPORTBOOHOO GROUP PLC
ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
PROGRESS IN THE YEAR TO 28 FEBRUARY 2022
FOCUS AREA 1: CLOTHES
MADE SMARTER
BETTER MATERIALS
2025 All our polyester and cotton will be
more recycled or more sustainably
sourced
2030 All our clothes will be made with more
sustainable materials
Working closely with our supply chain to
forecast required metres of materials, our
fabric manager identifies opportunities for
consolidation each season by looking at
materials in use across the group. This allows
us to transition to more sustainability sourced
materials at affordable prices for our brands
and customers. We have a robust compliance
process in place for evidencing our product
level sustainability communications.
We have calculated our materials mix. By
volume, around 85% of the materials we
use are polyester and cotton. We use better
cotton and REEL cotton as alternatives to
conventional cotton and recycled polyester as
an alternative to virgin polyester.
Our READY FOR THE FUTURE strapline
is used on garments made of more than 20%
of our stated ‘better materials’. This is an
absolute minimum and our buying teams aim
to achieve over 50%. As of year-end 2022,
one in five of our products on order across
the group contained one or more of our more
sustainably sourced materials. We have held
training sessions for our buying teams on
more sustainable fabrics and communication
guidelines.
We have a long way to go before we reach our
better material targets. We have made a good
start and are committed to continuing to
make progress with the support of our teams.
SUSTAINABLE DESIGN
2025 Design innovation to reduce waste,
increase durability and improve
recyclability
Our product sustainability specialists have
conducted sustainable design and circularity
training with our design and buying teams
across four brands. Putting our knowledge
of circular principles into practice, we have
launched upcycled, repurposed and more
sustainable collections. We will continue to
explore opportunities for collections that
minimise waste.
To improve the durability and quality of our
product, we conduct quality and compliance
testing. With the launch of the boohoo lab,
we now have an in-house textile and apparel
laboratory, which is working with our suppliers
to conduct these tests in-house.
TEXTILE WASTE
2023 Launch resale and recycling offers
across our brands
2025 No textile waste direct to landfill in
our UK supply chain.
We use a test and repeat approach. This
means that our production runs are small
and we only order more of the products our
customers like. This helps to reduce waste. To
help extend the lifetime of garments, we are
launching a branded marketplace for re-sale
of used garments and piloting a take back
solution with Thrift+ to help keep clothes in
use for longer.
In May 2021, we launched a supplier waste
pilot with waste management provider,
Reconomy, and 11 of our key manufacturers
in Leicester. Reconomy provided training in
best practices in waste management to each
facility. Fabric offcuts, cardboard and plastic
film were collected.
Of the total waste collected ~85% was textile
waste, followed by cardboard (9–10%), and
plastic (<5%). Diverting the high volume
of textile waste from landfill significantly
improves factory sustainability, reducing
waste in the supply chain. Building off the
success of our waste pilot, we will expand the
programme across our Tier 1 manufacturing
suppliers in Leicester and identify suitable
recycling partners.
PACKAGING
2030 All customer garment packaging will
be reusable, recyclable or compostable,
and any plastic used will contain over
50% recycled content.
This year, across all our brands, we have
implemented measures to increase the use
of recycled content in our labelling. We
have reduced the size of our swing tickets
and removed non-recyclable finishes. We
are helping our suppliers transition to using
swing tickets made from 100% recycled card
and care labels made from 100% recycled
polyester.
In setting consistent standards across our
brands, we have introduced labelling options
that our garment suppliers can refer to for
more sustainable packaging and labelling. We
have also developed brand specific labelling
and supplier manuals.
FUTURE FOCUS
2023 Publish our position on water,
chemicals, biodiversity and microfibres
In our Manchester HQ, we launched the
Boohoo Lab, our in-house textile and apparel
laboratory, with capabilities ranging from data
collection, testing, due diligence and training.
Our testing methodology is in line with
Global Restricted Substance Laws: REACH
(UK and EU) and Cal Prop 65 (USA).
As members of the Microfibre Consortium,
we are conducting tests on select key
recycled fabrics that our UK suppliers use in
our garments. The test results will contribute
to the Microfibre Consortium’s database.
Compared to our value chain, our direct
operations are not a major user of water.
Much of our water footprint lies in our
broader value chain in supplier and
customer usage. As part of our supply chain
environmental programme, our top suppliers
are collecting data on their water use. Our
Sustainability Hub launched in February
2022. Here customers can find information
on product care to help reduce the impact
of garments during the use phase and extend
product lifetime.
We are aware that many of the materials we
use come from nature. Cotton is a natural
fibre that is 31% of our fibre mix. Through
our partnership with Cotton Connect, we
are growing traceable, REEL cotton over
12,000 acres in Pakistan and training the
farmers in agricultural management practices
that help to reduce environmental impact.
The cotton produced is responsibly sourced
and traceable – tracked through our supply
chain, from village to garment, with chain of
custody using Cotton Connect’s proprietary
traceability software TraceBale.
In the upcoming year we will publish our
restricted substance list (“RSL”) and define
our positions on water stewardship and
biodiversity.
PROGRAMMES
2021 Set up and donate £1 million to the
Garment Workers’ Trust in Leicester
2021 Launch manufacturing centre
of excellence
Last year we set up the Garment and Textile
Workers Trust in Leicester. The purpose of
the trust is to help champion workers’ rights
and provide support for vulnerable garment
workers in Leicester. The Trust is overseen
and managed by an independent board of six
trustees, which bring a wealth of knowledge
and expertise of Leicester and garment
manufacturing. Working with Nottingham
University’s Rights Lab, the Trust is
conducting a piece of research that examines
the challenges the Leicester textile sector
faces from the perspective of the people
employed in the sector and those working
closely with them.
Thurmaston Lane, our manufacturing centre
of excellence, is an 85,000 square feet
site located in Leicester. Thurmaston Lane
offers end-to-end garment production
and digital printing for our brands. We
started production on 26 January 2022.
Thurmaston Lane will set the standard for
UK garment industry and champion strong
workplace standards. The facility will be used
for supplier learning and development. The
site is creating 170 jobs for on-site workers,
part of our extended boohoo family. It is now
home to the boohoo UK Leicester-based
compliance team.
STANDARDS
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
Our sourcing team has implemented a more
robust set of supplier standards and a rigorous
management programme. We have internal
compliance teams on the ground conducting
factory visits and spot checks in key sourcing
countries.
We have also improved the systems we use
to order, monitor and track products with the
following:
• Site Selection Requirement – An order
can only be placed with a known, audited
and approved supplier.
• Staged Approval Process – A supplier must
provide confirmation of audit verification
and commercial considerations before
production can start.
Whistleblowing in the boohoo group is
managed independently through the Unseen
Portal. Working with Unseen ensures that
workers within our supply chain are able to
speak out in confidence and with anonymity.
We became members of Fast Forward in
May 2021. Fast Forward is a leading UK
auditing and improvement programme. All
UK manufacturing sites will be subject to Fast
Forward audits in 2022 and will join the Fast
Forward Supplier Engagement Programme
to access labour standards training, online
guidance and resources, and a collaborative
network. Currently 20.3% of the boohoo
group’s UK supply chain has already been
through a Fast Forward audit and all Leicester
suppliers are signed up for the Supplier
Engagement Programme. The Fast Forward
audit programme will first start in our UK
supply chain in March 2022. We intend
on completing the Fast Forward audits by
September 2022.
We are signatories to the International
Accord, which is committed to improving
health and safety within the garment and
textile industry in Bangladesh. We are also
members of the Slave Free Alliance (“SFA”).
SFA will be supporting our overseas offices
with advice and Guidance on NGO’s, which
can support with salient human rights issues.
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
Transparency is a key priority for our
business, as reflected by the commitments
and changes we have made through our
Agenda for Change programme. See page
18 to learn more about the Agenda for
Change programme. We published our UK
supply chain list in March 2021. Our global
factory list was published in September
2021 with updates in December 2021 and
January 2022. We have registered with
the Open Apparel Registry (“OAR”) and
shared our global Tier 1 manufacturing
list. In collaboration with the OAR, we
now have an interactive map of our global
facilities on our website. We published our
responsible purchasing practice guidelines in
September 2021.
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ANNUAL REPORT AND ACCOUNTS 2022 STRATEGIC REPORT STRATEGIC REPORTBOOHOO GROUP PLC ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT
PROGRESS IN THE YEAR TO 28 FEBRUARY 2022
CONTINUED
FOCUS AREA 3: OUR
BUSINESS TAKING ACTION
GOVERNANCE
2021 Embed sustainability risks and
opportunities in business decisions
and KPIs
We have strengthened our approach to
governance with the appointment of Kirsty
Britz, our new non-executive director, with
a background in ESG. To ensure there is
adequate oversight of ESG-related issues,
the board has also established an ESG
Committee chaired by Kirsty Britz, an
Executive ESG Group chaired by the Group
CEO, and standalone ‘E’ ‘S’ and ‘G’ sub-
committees chaired by senior leaders across
the business.
The ESG committee will comprise three non-
executive directors (“NEDs”) to oversee the
ESG strategy and provide recommendations
to the Executive ESG group. These
enhancements will help ensure that key
ESG matters are considered by leaders and
decision-makers, who are appraised of the
relevant information, at the appropriate time.
With the completion of the Agenda for
Change programme, we are embedding the
core themes of the programme – corporate
governance, purchasing practices and our
support for the garment sector – into
sustainability KPIs across our business that we
monitor monthly.
OUR PEOPLE
To receive independent external recognition
via an award, accreditation or kitemark for:
• Being an organisation that cares about
doing things right and values it’s people; or
• Being an organisation that has a genuine
and authentic commitment to driving
diversity and inclusion change in the
workplace and wider society
It is our aim to create a sense of belonging in
the boohoo family for all of our employees,
creating a workplace where people grow, love
what they do and feel valued. We cultivate
employee wellness through workshops,
webinars and onsite gym and yoga studios.
We also have mental health first aiders
throughout the business. See the people
section on page 54 to learn more.
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.
Our science-based targets have been
validated by the Science-Based Targets
Initiative (“SBTi”).
We have completed the installation of 5,818
solar panels at our distribution centre in
Burnley, which are now operational. These will
provide up to 2.7 MW of power to the facility.
With our streamlined sea freight booking
system, we are reducing our reliance on
airfreight.
As part of our membership with the
Sustainable Apparel Coalition (“SAC”) we
are asking all UK suppliers to complete the
Facilities Environment Module (“FEM”). This
gives us a view of suppliers’ environmental
management and performance, which means
we can understand where we can work with
suppliers to lower their carbon emissions.
See page 48 to see our carbon footprint
for 2022.
MARKETING
2021 Publish responsible marketing
principles
Make it easier for customers to make
sustainable choices with us
Following the guidance of the Competition
Markets Authority (“CMA”) Green Claims
Code, we are ensuring that when we use
the READY FOR THE FUTURE strapline
that we are explicitly stating the product
composition. We want our claims to be
accurate and understood by all.
This past year we worked to understand
customer insights about sustainability. We
conducted a sustainability specific customer
survey in April 2021. From the results of
the survey, we gained new insights in our
customers’ views about sustainability and the
role it plays in their fashion choices.
We launched the #boohoofilterfree campaign
to reduce comparison culture, eradicate
filter abuse and empower our customers
to feel confident in their own skin. The
#boohoofilterfree campaign is a powerful
reminder of what life is like beyond the
filter, bringing images that are more real and
relatable to the forefront.
COMMUNITY
2021 Publish our social impact commitment
to support local communities
We have announced our Social Impact
Strategy. We are committing to spend at
least 1% of pre-tax profit to empower
individuals to be who they want to be,
both now and in the future.
We will empower our colleagues to continue
with the great work they have already been
doing and continue to support local charities.
Supporting local charities through fundraising
activities and product donations.
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ANNUAL REPORT AND ACCOUNTS 2022 STRATEGIC REPORT STRATEGIC REPORTBOOHOO GROUP PLC ANNUAL REPORT AND ACCOUNTS 2022
OPERATIONAL MARKET-
BASED EMISSIONS SCOPE 1
AND 2
Operational location-based emissions (Scope
1 and 2) have increased by 29% from 3,173
to 4,086 tCO2e. This has been driven by two
main factors:
• 64% increase of gas consumption across
existing and new properties; including
an 87% increase at the Manchester
headquarters (49–51 Dale Street)
as colleagues returned to work after
covid; and
• 41% increase of electricity consumption
driven primarily of the inclusion of a
new distribution centre in Daventry and
opening of our London office.
As a result of these changes, and in
conjunction with renewable electricity
purchases, operational market-based
emissions have increased from 498 tCO2e
to 1,016 tCO2e. We remain committed to
having 100% renewable electricity, however,
our newly acquired London office and Burnley
warehouse were on historical non-renewable
contracts. As a result, it has not been possible
to maintain 100% renewable energy in our
Scope 2. Our newly acquired facilities will
soon be transitioning to renewable energy
contracts.
SCOPE 3
In 2021, we increased the scope of emissions
reported in Scope 3 by including water and
hotel stays accounting for 5 and 89 tCO2e
respectively.
Product
This year there has been a 27% increase
in tonnes of materials procured. Polyester
and cotton are still the largest proportion
of emissions accounting for 53% and 28%
respectively. However, this year recycled
polyester has been introduced, which is 15%
less carbon intensive than non-recycled
polyester.
We have also started to introduce more
sustainable fabric sources, such as BCI
Cotton, to continue to reduce the
environmental impact of our products.
Transportation
This year within our transportation of
goods, both tonnage of product shipped
and, therefore, emissions produced, have
increased. This is to be expected alongside
our increase in sales. Total Upstream
Transportation and Distribution emissions
have increased by 21% versus the previous
reporting year 2020, from 157,551 tCO2e
to 190,018 tCO2e. Primarily, this increase
has come from our inbound freight where we
have had to use more airfreight as a result of
global freight challenges.
Our outbound tonnage has increased as a
result of selling more product. However, the
majority of this increase has been through
road freight, which has a much lower carbon
intensity than air transport, and, therefore,
has not caused a significant increase in
emissions. Furthermore, distance shipped
for road shipments has decreased in 2021,
further reducing emissions.
Downstream Transportation and Distribution
emissions are estimated based on the
carbon intensity per unit of outbound road
shipments. As a result, the total emissions for
this category have decreased.
Business Travel
We also saw an increase in business travel as
COVID-19 restrictions eased. In particular,
flights have increased 54% year-on-year,
from 476 tCO2e to 736 tCO2e. Prior to the
pandemic, emissions from business travel in
2019 were 2,436 tCO2e.
Emissions associated with employee
commuting have increased from 1,030
tCO2e to 1,682 tCO2e, as a result of the
growth of number of employees in the period.
CARBON REPORTING
In the calendar year 2021, the group’s
market-based carbon footprint has
increased from 791,252 tCO2e to
1,018,964 tCO2e since the previous
reporting year. This 29% increase in
emissions is largely due to business
growth, industry-wide international freight
challenges and response to the COVID-19
pandemic.
(Energy and Carbon Report) Regulations
2018. As such, we will continue to
calculate and publish our energy and
carbon reporting transparently to our
stakeholders in line with these guidelines.
We have calculated our emissions across all
three scopes for every calendar reporting
year from 2019 onwards and have made
the results publicly available.
The focus for this year has been laying the
foundations for our carbon management
programme, improving data quality,
having our targets validated by the SBTi,
identifying the hotspot emissions areas
and kick starting our product sustainability
programme. Achieving our targets will be
very challenging, but we recognise the
importance of understanding, managing
and disclosing our carbon impact.
We are aware of the reporting obligations
under The Companies (Directors’
Report) and Limited Liability Partnerships
SUMMARY
The market-based emissions increase
we have seen in 2021 is attributed to
an increase in the number of products
sold, freight emissions and procurement
associated with business growth. In our
own operations (Scopes 1 and 2) there
has been an emissions increase of 29%
due to additional office space, distribution
centre expansions, and our newly acquired
facilities that were on historical non-
renewable energy contracts.
We have committed to bringing our carbon
footprint down in line with the requirements
set out by the Paris Agreement by setting a
science-based target that has been approved
by the SBTi. As a result, the group is now
working to reduce its emissions across Scope
1, 2, and 3 by 52%, relative to our growth in
line with a 1.5-degree reduction pathway.
The 2020/2021 29% emissions increase is a
similar trajectory to the 2019/2020 increase
of 33%. To achieve our goal of reducing
emissions across Scope 1, 2, and 3 by 52%,
relative to our growth, we have identified the
following priorities:
• Work towards eliminating fossil fuels from
our direct operations
• Transition our London office and Burnley
warehouse to renewable electricity
• Increasing our use of recycled and more
See page 44 for further information.
sustainable materials to reduce our
product footprint
• Improve airfreight efficiency measures and
give priority to sea, road and rail freight
• Investigate and increase renewable energy
use in our supply chain
PERFORMANCE
Since the previous reporting year, market-
based emissions have increased by 29% from
791,252 tCO2e to 1,018,964 tCO2e; this
increase is largely driven by a 27% increase
in tonnes of material produced, COVID-19-
related transport and distribution impacts.
To reduce our product footprint, we will
increase our use of recycled and more
sustainable materials.
In addressing transportation and distribution
impacts we have streamlined the way we
receive products from suppliers to reduce
sea freight lead times. This means more
items can travel via sea freight, a less
carbon intensive method. In addition, we
have introduced a more stringent sign-off
processes to reduce air freight.
Currently, we are working on an internal
project dedicated to the launch of our US
distribution centre (“DC”). The launch of
this DC will allow us to reduce our inbound
and outbound carbon emissions. Stock will be
shipped directly from our suppliers to the US
DC rather than going through our UK DC.
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STRATEGIC REPORT STRATEGIC REPORTBOOHOO GROUP PLC CARBON REPORTING
CONTINUED
ENERGY EFFICIENCY ACTION
In 2021, the group has carried out several initiatives to drive energy efficiency across our own operations, these include:
• 2.7 MW capacity of solar panels installed at the Burnley distribution centre;
• Continued rolling programme of installing LED lights across the facilities; and
• Energy Management System installed across our Manchester offices to monitor energy usage.
CARBON EMISSIONS TCO2E
Scope 1
Company Cars
Fleet
Natural Gas
Other Fuels
Refrigerant
Scope 2
Electricity (market-based)
Electricity (location-based)
Company Cars (Battery Electric)
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 reporting2: total energy usage (kWh)
Current
reporting year
2021: UK and
offshore1
Current
reporting year
2020: UK
and offshore
Comparison
reporting year
2019: UK and
offshore
30
24
447
13
146
356
3,426
<1
769,768
39,870
1,368
190,018
161
878
1,682
18
3,176
11,009
66
–
273
13
146
–
2,674
–
613,877
4,188
686
157,551
91
526
1,030
20
4,104
8,681
111
–
240
15
146
2,608
2,928
–
436,700
–
310
139,120
63
2,436
459
22
2,730
3,023
1,018,964
791,252
587,983
1,022,034
18,946,547
793,926
12,717,546
588,303
13,065,849
INTENSITY METRICS (UK AND OFFSHORE)3
Total revenue (£ million)
All scopes (1, 2 and 3) emissions (tCO2e)/ total revenue (£ million)
1 Boohoo Group report on UK and offshore emissions only. All assets within the group’s operational control boundary that are reported under Scope 1 and 2 are based in the UK and,
1,674
473
1,983
514
1,172
502
18%
9%
therefore, have no associated global emissions. For Scope 3, it is currently impractical to split these emissions by UK and global-based emissions and have thus all been included under UK
and offshore emissions.
2 Energy reporting includes kWh from Scope 1, Scope 2 and Scope 3 employee cars only (as required by the SECR regulation).
3 Energy intensity metrics have not been split by UK, offshore, and global as the group does not have global Scope 1 and 2 emissions and it is currently impractical to split these out for Scope
3. Intensity metrics are calculated using Scopes 1, 2, and 3 emission scopes as most of the group’s emissions are in Scope 3.
• 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 resale, and distribution
and transportation of goods. It also includes
non-company cars as per the SECR
regulations
The group’s carbon emissions calculations
used three 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 goods not for resale
(a subcategory of purchased goods and
services and capital goods)
S
T
R
A
T
E
G
I
C
R
E
P
O
R
T
METHODOLOGY
This report has been prepared in line with
HM Government’s guidance: Environmental
Reporting Guidelines: Including streamlined
energy and carbon reporting.
Our carbon footprint has been calculated
in accordance with the internationally
recognised corporate accounting and
reporting standard, the Greenhouse Gas
Protocol, developed by the World Resources
institute (“WRI”) and the World Business
Council for Sustainable Development
(“WBCSD”). It adheres to the best practice
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
2021 to 31 December 2021. This is offset
from the business’s financial reporting period
1 March 2021 to 28 February 2022 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
and 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 over, including company cars, fleet,
natural gas and other fuels used in our
operations and any refrigerant gas leakages
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ANNUAL REPORT AND ACCOUNTS 2022 STRATEGIC REPORTBOOHOO GROUP PLC
CLIMATE RISK
It is critical that we understand the range of physical and transitional climate risks faced by our business and how our exposure varies by geography, time
horizon and future warming projection.
In 2021, we collaborated with advisers, Marsh Ltd., to gain a better, quantitative understanding of how climate-related risks and opportunities may
impact the boohoo group. As outlined in the table below, our analysis assesses five different potential future emissions pathways ranging from a ’Paris
Aspiration’ scenario (1.5°C warming) through to ’No Policy’ (>4°C warming) scenario. This analysis is principally aimed at supporting both internal risk
management decision-making and external sustainability disclosures such as TCFD, and we are currently finalising how the analysis will develop and
inform our UP.FRONT sustainability strategy.
Our climate scenario analysis assesses both physical and transition risk impacts, as shown in the table below. To model physical risks, we examine
how key perils such as flooding, wind and drought could impact both our own facilities and raw material supply chain today and under future warming
scenarios by 2040. To assess climate-related transition risks, we examine how key scenarios such as global policy change or market preference change,
may impact our business and consumers as global society moves through the different warming scenarios described above.
PHYSICAL AND TRANSITION RISK SCENARIOS TESTED
Physical risk
Transition risk
OVERVIEW OF FUTURE EMISSIONS PATHWAYS COVERED BY SCENARIO ANALYSIS
SUMMARY
Warming projection by 2100
Description
Scenario name
NO POLICY
CURRENT
POLICY
>4°C
3°C
STATED POLICY
2.5°C
PARIS
AGREEMENT
PARIS
ASPIRATION
2°C
1.5°C
A no policy scenario represents a slow-down on current emissions
reductions targets, with a global emissions reduction target of -50%
by 2100.
A current policy scenario is a continuation of current emissions
reductions targets, with a global emissions reduction target of -50%
by 2100.
A stated policy scenario reflects the government polices already in
place, with a global emissions reduction target of -75% by 2100.
The Paris Agreement scenario is the binding international treaty on
climate change, looking at achieving Net Zero emissions by 2070.
The Paris aspiration scenario is the agreement to keep within 1.5°C of
temperature increase, by achieving global Net Zero emissions by 2050.
Physical risks refer to climate-related
hazards, which are influenced by future
increases in global warming. We consider
both acute perils (such as flood, wind and
extreme rainfall) and chronic perils (such
as drought, heat stress and water stress).
• Transition risks refer to risks that arise from the gradual transition
to a lower-carbon economy. The rate of global transition (i.e. how
quickly society reduces emissions) may control the relative impact of
transition risks.
SCENARIO
OVERVIEW
We have identified three physical risk
scenarios to be tested within our scenario
analysis;
We have identified several principal transition risks that may impact our
business, including:
• Market risk – changes in consumer preference towards more
• Physical asset damage (e.g. flooding)
sustainable fabric types
• Operational disruption (losses incurred
from (in)direct impacts of a given peril)
• Raw material impacts to the supply
chain (e.g. availability of cotton
affecting purchasing, sourcing and/or
quality of product)
• Policy risk – increases in carbon taxation affecting energy/raw
material costs
• Reputational risk – potential changes in consumer demands
• Technology risk – knock-on impacts of value chain
decarbonisation costs
• Liability risk – increased litigation due to environmental impacts
While we are still working to finalise outputs, the outcome of the climate scenario analysis will provide critical information on the most material
risks and opportunities for boohoo. Importantly, the results will support the development of a robust approach for tackling climate-related risks,
identifying actionable recommendations to build into our UP.FRONT strategy. See page 40 of our Risk Report.
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ANNUAL REPORT AND ACCOUNTS 2022 STRATEGIC REPORT STRATEGIC REPORTBOOHOO GROUP PLC PEOPLE
INTRODUCTION
People are at the very heart of
everything we do here at the boohoo
group. The culture at boohoo is our
greatest unique selling point as an
employer and makes the boohoo
group what it is today.
Our vision is ’To be the best employer within
the e-commerce fashion market’ and it is
our aim to create a sense of belonging to
the boohoo family for all of our colleagues,
creating a workplace where people grow, love
what they do and feel valued.
Our people strategy is based on the following
six pillars:
• Listening and engaging with our colleagues
• Improving our ways of working
• A better place to work
• Your career
• Recognising and rewarding your
achievements
• Operating at our best
These pillars enable our colleagues to continue to
grow, innovate and deliver world-class customer
service across the globe. In addition, the pillars
all support the business to drive a more diverse
and inclusive workplace and provide greater job
enrichment and increased engagement.
Our boohoo family culture enables our people
to learn from the best and be empowered to
take on challenges and learn new things. We
celebrate diversity and our mission is clear – ’A
workplace where everyone is respected, their
individual differences are valued, and they can
be themselves at work, without exception’.
Our values are at the heart of everything we
do and our 6000+ colleagues demonstrate
them in abundance on a daily basis.
PACT Values
Our PACT values that seal the deal for the
boohoo group...
Passionate
Believing in the boohoo family and
believing in ourselves. Loving what we do
and being inspired to be the best we can
be. Focused and committed to giving our
customers the experience they want.
Creative
Being unique, aspirational and always
boohoo. Doing it our way, not being afraid
to be different. Creative in thinking and
design.
Team
Listening and responding to create a
place where everyone’s contribution is
important and valued. Building success
through people and sharing in it together.
Remembering to have fun along the way.
We recognise it is a continuous journey; there
is always so much more that can be done
and we are always listening to our employees
through our variety of listening and
engagement forums. As a result of feedback
through these forums, we have introduced a
suite of boohoo people awards to recognise
loyalty and key achievements across the
group, championed hybrid working to provide
greater flexibility and offered incentives to
encourage physical activity and improved
mental wellbeing.
Our message to our colleagues is simple, they
are the fabric of our business and make the
boohoo group the amazing business that it
is today.
LISTENING AND ENGAGING
WITH OUR COLLEAGUES
We wanted to reshape our colleague
feedback mechanism in 2022 and make
it feel a ’bit more boohoo’. Our previous
annual survey felt outdated and slow for
our ‘pacey’ team and we knew we needed
to make changes. Although we are still at
the start of redeveloping our new listening
system, we feel we have made a solid start
to understanding what our colleagues really
want in this area. Through our new ‘instant
insights’ framework we have already found a
formula that works to communicate with our
colleagues and crucially take action on the
feedback and insights gained, reinforcing the
value of employee listening. Our distribution
centres have a structured ’Your Voice’
colleague forum with quarterly meetings and
actions that ensure they own their people
agenda. In addition, our Breakfast with the
Boss, new starter focus groups, monthly
Town Halls and Stay/Leave forums continue
to provide us with invaluable feedback. Our
‘boohoo for you’ and ‘Club PLT’ employee
intranets, alongside our boohoo family emails,
also enable daily interaction with our teams.
IMPROVING OUR WAYS OF
WORKING
Things have changed significantly within
boohoo in the last 12 months. We are now
13 brands with global operations, 6,000+
employees and we have welcomed over 1,500
new head office colleagues in 2022 alone.
We have opened up two distribution centres,
a retail Debenhams beauty store, and a new
garment factory in Leicester. Thurmaston
Lane opened as part of our Agenda for
Change commitment with our colleagues
recruited locally through an engaging and
robust recruitment drive. We have also
opened an office in Soho and are undergoing
renovations in both our Dale Street and PLT
offices in Manchester. This is to provide our
teams with a great working environment with
a brand new reception area, restaurant and
seating area, agile working space including
desks, booths, pods and flexible meeting
space and on-site gyms with classes such as
yoga to help with wellbeing.
We launched our SMART working policy and
framework, which empowers our leaders to do
what’s best for them and their teams and have
provided tools for colleagues and managers
to support each other in hybrid and remote
working environments.
This year we took the opportunity to focus
on our performance review process to help
give our colleagues better development, have
a richer conversation with and build more
of a connection with their line managers.
This was something our colleagues told us
they had missed while working remotely. The
new process, which includes implementing a
distribution curve to enable a fair distribution
of appraisal grades, has insured equity and
fairness across our departments and locations
and allowed us to highlight our exceptional
performers. Our colleagues and teams
have received training on the new end-to-
end process including how to set inspiring
and meaningful goals for the year ahead.
Other new additions to the Annual Review
Conversation include a focus on careers and
questions on how our colleagues embody our
PACT values. Moving forwards we intend to
adopt a more regular check in/looking forward
approach to ensure our colleagues feel
listened to, supported and that their career is
managed in the best possible way.
In our post pandemic world, we have taken
a step back and reconsidered our induction
process. More than ever, we have needed to
build a connection for our new starters from
day one and our induction process is now
designed to celebrate and share our boohoo
culture from the very first day. Our colleague
feedback has led us to add more touch points
with our new starters following their first week
in order to further strengthen their boohoo
connection, whether that be in person or
virtually. The new induction now features
updates on our sustainability agenda, charity
work in the community and celebrates the
great news stories from within our brands.
With our continuous growth, it is imperative
that we invest in and evolve our talent
attraction and acquisition strategies. We are
both building and evolving a hiring culture at
boohoo that encourages the diversity and
inclusivity that we’re aspiring to achieve in
our workplace, and we’ve invested this year
in a new recruitment system that enhances
our candidate experience, encourages a
collaborative approach to hiring across the
business and gives us robust data to ensure we
are continually able to improve how we hire.
With the help of our colleagues, we have
developed our boohoo Employee Value
Proposition, defining who we are (and
who we are not) and what really makes the
boohoo group unique. We have interviewed
and profiled many of our people across the
group and listened to their stories so that we
can share these with future candidates. Our
new careers site aims to give our candidates
as much knowledge and insight as possible
before applying to join us and is the first place
to showcase our new boohoo group employer
branding, which will be rolled out across our
entire employee experience.
The focus for the year ahead will continue to
be on consolidating our employer branding
via our internal and external social media
channels, our colleague referral scheme and
most importantly optimising our exceptional
talent with movement opportunities around
our boohoo group.
A BETTER PLACE TO WORK
DEVELOPING OUR
INTERNAL TALENT AND
PROVIDING A CLEAR
CAREER PATHWAY
We are always investing in people at the start
of their career journey and love spotting early
talent. We have over 100 people engaged
in apprentice programmes right across our
business, partnering with 15+ outstanding
providers. Our apprentices not only have the
chance to grow with us but get unrivalled
progression opportunities in their chosen
industry. Our apprenticeship programmes
are open to our entire business and continue
to be a key part of our learning strategy.
From management skills to an MBA, the
opportunities are endless.
In addition, the group has gifted over £85k
of its apprenticeship levy to support young
people within the wider supply chain outside
of the boohoo group who might otherwise
not have had access to apprenticeship
opportunities. We have partnered with
Fashion Enter, who will provide training and
arrange placements for the students on
behalf of the boohoo group, with a focus
on candidates from underrepresented
communities within the Leicestershire area.
Our well-established intern programme allows
university students to get real life experience
in the fashion industry and build a network
that will last a lifetime. Our interns make an
impact at the heart of the business by getting
exposure to all our key business areas. We
give our interns a true taste of life in the fast
fashion world that really shapes their career
choices in the future. We also like to stay
connected with our ambitious students and
we keep them updated on all our new career
opportunities.
Our colleagues expect and desire
development in their roles that will help them
keep pace with others in the industry by
continuously shaping their skills, mind-set
and behaviours. As a result, our brand new
’Learning Lab’ development offer has been
developed to support people to future-proof
themselves in their industry and engage
them to stay with boohoo for a career worth
sticking around for. For our career-driven
work force, an offer that develops people both
personally and professionally is crucial and our
new targeted webinars, IRL training sessions
and bite-size learning initiatives hit the mark
for our people.
It is critical to our ongoing boohoo success
that our leaders are engaged and stretched
in their roles and the wider business and that
our leaders have a ‘kit bag’ of behaviours and
experience to deliver our future growth. As
a result, 2022 saw the introduction of the
following for our senior leaders:
• The introduction of a boohoo leadership
programme – leading self, leading others,
leading business. The start of a future
legacy for director and head of level
• Individual strengths-based assessments
• The introduction of a coaching and
mentoring framework, working with both
internal and external coaches and mentors
• A 360 feedback process with a
development plan to support
• Insights personality profiling for both
individuals and teams
• Strategy team builds and development
COLLEAGUE ENGAGEMENT
With a business as young as ours, we enjoy
the opportunity to get together as the
‘boohoo family’. We have an unrivalled social
calendar with something for everyone to
enjoy and we know how to throw a legendary
party. Our teams regularly enjoy payday
drinks, where they can socialise with other
departments and there are loads of other
events throughout the year too, from
Valentine’s Day to summer BBQs.
With up to a 40% discount on all our boohoo
group brands, this is much enjoyed by our
colleagues along with our regular sample sales
where the proceeds go to charity.
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ANNUAL REPORT AND ACCOUNTS 2022 STRATEGIC REPORT STRATEGIC REPORTBOOHOO GROUP PLC PEOPLE
CONTINUED
RECOGNISING AND REWARDING YOUR ACHIEVEMENTS
We offer an outstanding reward and benefits framework where, irrespective of role, all our
colleagues can share in the success of boohoo’s incredible growth.
SHARE AWARDS
We want all colleagues in the boohoo family to feel that they are part of the business, and there
is no better way to do that than by ensuring they share in our future success. We have gifted free
shares to colleagues through our Share Incentive Plan (“SIP”) scheme and we offer an annual
Save As You Earn (“SAYE”) scheme, where colleagues have the option to buy boohoo shares at
a discounted price.
OTHER BENEFITS
We offer a wide range of benefits for our colleagues to enjoy, such as amazing staff discount
across all 13 of our brands, annual bonus and incentive schemes, life assurance and various health
and wellbeing benefits. Where possible, we try to do this in the most cost-effective manner and,
from April 2022, we will be moving to a pension salary sacrifice arrangement, enabling colleagues
to keep more of their salary each month.
OPERATING AT OUR BEST
Across our boohoo family, we celebrate our diversity. Our teams are as individual as our
customers are and by bringing everyone’s talents together our products come to life and keep
setting trends.
Who we are, how we think, and the different backgrounds we come from mean we can share our
views and life experiences.
It is a continuous journey; there is always so much more that can be done – we are on a mission
towards being the best we can be for everyone.
GENDER PAY AND DIVERSITY
At boohoo, we have always encouraged diversity in the workplace. As at the end of February
2022, female colleagues accounted for 54% of our workforce. This is the same proportion
as in 2021. Female colleagues now hold 50% of our most senior management positions, an
improvement from 41% a year ago.
NUMBER OF COLLEAGUES BY
GENDER
Executive directors/non-executive directors
Senior managers
Other employees
Male
7
81
2,542
2,630
Female
2
81
3,007
3,090
The gender pay gap data for the boohoo group, prepared using the data from April 2021, showed
females were paid more than males irrespective of whether this is calculated using the mean or
median result. The mean gender pay gap is 3.1% in favour of females; this increases to 6.2% when
we look at the median gender pay gap. Both figures are significantly better the national average
as reported by ONS, where males typically earn 15% more than females.
As an organisation that loves to nurture talent from an early age, it is no surprise to see that we
have a predominantly young workforce. The average age of a boohoo colleague is just 31.
OTHER D&I ACTIVITY
• We have developed a D&I strategy for the
group with three clear pillars of focus:
Attracting and on-boarding – Create a
workforce broadly reflective of the larger
community
Engaging and developing – Support our
colleagues in building the skills to work in an
inclusive manner with one another and with
the communities we serve
Building the culture – Build a welcoming
workplace in which our colleagues
recognise that their unique characteristics,
skills and experiences are respected, valued
and celebrated
• We have formulated a D&I steering group
with clear business sponsorship. Carol
Kane, Co-founder and Group Executive
Director being our executive sponsor
• We have a clear view of our generational
and gender split across our business –
millennials make up 54% of our workforce
• Beginning with our distribution centres, we
have started to collect demographic data
in the group across gender identity, sexual
orientation, ethnicity, religion and disability
• We have been recognised as committed
to D&I in the Inclusive Employers
Standard 2021
• We have embraced external partnerships
with both Diversity in Retail (“WHITL”) and
Inclusive Employers to help support us in
driving D&I change across the business
• We actively support, engage and run
colleagues initiatives that support, to name
but a few:
• National Inclusion Week
• Mental Health Awareness
• International Men’s and Women’s Day
• EID
• Black History Month
• Pride
EMPLOYEE WELLBEING
We take the wellbeing of our boohoo
colleagues seriously. We cultivate colleague
wellbeing by:
• Having an employee assistance programme
and healthcare cash plan in place
• Having mental health first aiders in all
of our office locations to support our
colleagues with their mental health and
wellbeing
• Onsite gyms and exercise classes
• A development offer that includes
wellbeing and resilience workshops and
encouraging colleagues to operate at
their best
• Engaging with external experts to bring the
very best learning to the business
• Recognition and support of Mental Health
awareness week
• Partnerships with external partners such as
Calm, British Heart Foundation and Mind
• Our boohoo for you and Club PLT
communication sites making all of the
above accessible to all
It is our priority to continue to make the
workplace more inclusive for everyone, where
our boohoo family feels comfortable showing
up as themselves. We aim to drive culture
change throughout our business and embrace
the diverse and ethnic social backgrounds
represented in our boohoo family.
In the year ahead, we will be implementing
diversity improvement targets and measures.
We will educate our senior leadership team
on driving D&I change throughout the
group, continue to collect demographic
data across our business, establish employee
representative groups and celebrate the
diversity across our business through
employee events.
The year ahead is an exciting one for our
boohoo family. We will deliver our people
strategy for 2022/23 and aligned with
our PACT values, we will foster our talent,
continue to engage and grow our employees
and identify opportunities for support, all
while continuing to deliver amazing customer
service.
On behalf of the board
John Lyttle
3 May 2022
Neil Catto
S
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P
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ANNUAL REPORT AND ACCOUNTS 2022 STRATEGIC REPORTBOOHOO GROUP PLC
BOOHOO GROUP PLC
ANNUAL REPORT AND ACCOUNTS 2022
GOVERNANCE
Board of directors
Corporate governance report
Directors' report
Section 172
Directors' remuneration report
Annual report on remuneration
Statement of directors' responsibilities
in respect of the annual report and
financial statements
60
62
71
73
77
89
97
G O V E R N A N C E
E
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V
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GOVERNANCE BOARD OF DIRECTORS
Committee Key
A AUDIT
COMMITTEE
E ESG
COMMITTEE
N NOMINATION
COMMITTEE
R REMUNERATION
COMMITTEE
RI RISK
COMMITTEE —
CHAIRMAN
MAHMUD KAMANI
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.
CAROL KANE
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.
JOHN LYTTLE
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 £7 billion.
Prior to joining Primark, John
held senior roles at Matalan and
Arcadia group.
NEIL CATTO
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.
COMMITTEE KEY
A
E
N
R
RI
AUDIT
COMMITTEE
ESG
COMMITTEE
NOMINATION
COMMITTEE
REMUNERATION
COMMITTEE
RISK
COMMITTEE
—
CHAIRMAN
BRIAN SMALL
KIRSTY BRITZ
SHAUN MCCABE
IAIN MCDONALD
TIM MORRIS
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 CFO of JD
Sports plc from 2004 to
2018. 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
E A RI
Kirsty joined the board
in October 2021. Kirsty
is Chair of the ESG
Committee and a member
of the Risk and Audit
Committees.
Kirsty has extensive
ESG and sustainability
experience across
financial services,
telecommunications and
technology sectors. She
is currently serving as the
Director of Sustainable
Banking at Natwest
Group plc and as an
independent member
of the Professional
Standards Committee at
HMRC. Prior to joining
Natwest Group, she held
the role of Director of
Citizenship at Barclays.
Prior to this Kirsty held
various sustainability,
brand strategy and
marketing roles in retail,
telecommunications and
advertising sectors.
NON-
EXECUTIVE
DIRECTOR
A RI E R N
Shaun is Chair of the Audit
and Risk Committees and
sits on the Remuneration,
ESG 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 N
Iain is Chair of the
Remuneration Committee
and sits on the Audit and
Nomination Committees.
Iain is the founder of
Belerion Capital, a
specialist technology &
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.
NON-
EXECUTIVE
DIRECTOR
A E R RI N
Tim Morris joined the
board in May 2021.
Tim is a member of the
Audit, Nomination,
Remuneration, Risk and
ESG Committees.
Tim is currently Group
General Counsel &
Company Secretary at
TalkTalk Telecom Group
Limited, which was on the
main list of the London
Stock Exchange until
March 2021, joining prior
to its IPO in 2010. He
held similar positions at
Carphone Warehouse
Group PLC prior to its IPO
in 2000 until 2015. He
is also a founding Partner
of Freston Ventures
Investments LLP. Tim is
a solicitor who worked in
private practice before
2000, specialising in
corporate finance.
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ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLCGOVERNANCEGOVERNANCE CORPORATE GOVERNANCE REPORT
STRENGTHENING GOVERNANCE WITH KEY
APPOINTMENTS
In this unprecedented economic climate, it is imperative the board
possesses a wide range of skills to guide us through this difficult period so
that we emerge well placed to take advantage of new opportunities. A key
focus has been to develop our leadership capabilities and we have made
significant progress in enhancing the composition of the board.
I was delighted to welcome Tim Morris and Kirsty Britz who joined as non-
executive directors on 5 May 2021 and 4 October 2021 respectively. Tim
is a highly experienced professional who brings legal, business and corporate
governance expertise to the board. Kirsty’s extensive ESG experience will
help ensure the board remains focused on making balanced and sustainable
decisions that factor the impact of our strategy on multiple stakeholder
groups. I look forward to both of them making significant contributions to
the board in the years ahead.
I am particularly proud of the strong and diverse board we have now
assembled, which is equipped with a compelling mix of skills and experience
relevant to boohoo and the challenges and opportunities it faces.
ESG GOVERNANCE
Solid governance and appropriate oversight of risks remains at the core of
the board’s list of priorities. During the year, the board implemented a new
governance framework as set out on page 69. To ensure there is adequate
oversight of ESG-related issues, the board established an ESG Committee
chaired by Kirsty Britz, an Executive ESG Group chaired by the Group
CEO, and standalone ‘E’ ‘S’ and ‘G’ sub-committees chaired by senior
leaders across the business. These enhancements ensure that key ESG
matters are considered by effective leaders and decision-makers, who are
appraised of the relevant information at the appropriate time.
The group’s sustainability strategy, UP.FRONT, is an integral part of this
new governance framework and key to our responsible growth strategy.
We have worked hard to develop product sourced with more sustainable
materials that will help us achieve our sustainability goals and raise customer
awareness on sustainability more generally. We have also taken active steps
to anticipate how climate change will affect our business. It is with this in
mind that we look forward to working with the government to support its
efforts to decarbonise all sectors of the UK economy and meet net zero
targets by 2050.
Further information on the sustainability strategy is on pages 41 to 47 and
our carbon report and climate risk assessment are on pages 48 to 53.
“
This financial year was one
of important progress as we
delivered the Agenda for Change
programme and embedded a new
governance framework across
the business."
Mahmud Kamani
EXECUTIVE CHAIRMAN
A MESSAGE FROM THE CHAIRMAN
Dear Shareholders,
EXECUTIVE REMUNERATION
This financial year was one of important progress as we
delivered the Agenda for Change programme and embedded
a new governance framework across the business. The board
took decisive action to make the necessary changes with pace
and we enter the next financial year confident that we have
built strong foundations required for the board to execute its
growth strategy and achieve long-term sustainable growth for
all stakeholders.
We were pleased that the remuneration policy received a significantly
improved level of shareholder support at our AGM in 2021. During the year,
the Remuneration Committee undertook a further review of the policy and
consulted extensively with major shareholders on proposed changes. We
recognised that there are significant commercial benefits derived from a
reward package for the executive team determined in part by performance-
related ESG criteria, and introduced specific and measurable ESG-related
targets into the executive bonus and LTIP schemes. The revised policy,
which is tailored to boohoo’s specific challenges, is set out on pages 77 to
88 and will be put to an advisory vote at our AGM in June 2022.
BOARD EVALUATION
Korn Ferry ran our board evaluation externally again
this year. It was encouraging to see real progress
has been made on key issues such as succession
planning, particularly since the appointment of
our new Chief People Officer in March 2021, and
increased representation by independent non-
executive directors, who now represent a majority
of the board.
Key themes that emerged from the latest review include board
appetite for increased focus on strategy and succession planning, and
opportunities for direct engagement by board members across the
business as we emerge from COVID-19. Further detail can be found
on page 67 of this report.
BOARD EFFECTIVENESS AND
DEVELOPMENT
The board recognises that improving board effectiveness forms an
important part of the development and execution of the group’s
strategy and will ultimately contribute to the continued success of the
group for years to come. To mark the opening of Thurmaston Lane, the
board visited suppliers and garment workers in Leicester to gain first-
hand insight into the opportunities and challenges facing the garment
industry and its workers.
Further, as part of the board’s commitment to ensuring the highest
standards of governance for the group, each board member attended
training on:
• the issues raised in the Korn Ferry independent effectiveness review,
including how to increase the operational effectiveness of the board;
• latest trends and developments in ESG-related matters and the
importance of these issues to investors and on the long-term
performance of the company;
• sector-related climate risks and the requirement to report in
line with the Taskforce on Climate-related Financial Disclosures
(“TCFD”) framework; and
• directors’ duties and managing health and safety risks.
READY FOR THE FUTURE
Finally, on behalf of the board, I would like to extend my thanks to all of
our shareholders for your continued support as we navigate our course
during these unusual and challenging times. Looking ahead, the board
will continue to lead the business in a way that is honest, transparent
and accountable. This transparency is key to the delivery of the
group’s strategy and value creation for our shareholders. In 2022, we
will continue to focus on our growth agenda and in further improving
our financial performance and strength, all underpinned by a robust
governance framework.
Mahmud Kamani
GROUP EXECUTIVE CHAIRMAN
A MESSAGE FROM
THE CHAIRMAN
OF THE NOMINATION
COMMITTEE
G
O
V
E
R
N
A
N
C
E
Dear Shareholders,
During the year, as part of our commitment under the Agenda
for Change programme to providing an appropriate balance of
independent directors on the group’s board, the Committee led
the selection process for the appointment of Tim Morris and
Kirsty Britz. I am satisfied that the board now has a good blend
of skills and experience to ensure our board and committees
continue to operate effectively for the benefit of all of our
stakeholders. The directors’ biographies appear on pages 60 to 61.
The complex and fast-moving nature of the business is such
that succession planning poses a significant challenge across the
organisation. While there has been a significant improvement
since the appointment of the Chief People Officer in March
2021, the expectation is that the work of the Committee will
continue to develop in the year ahead, particularly in relation
to clearer succession planning at board and management level
across our brands. Crucially, as the business continues to scale,
we will ensure management has appropriate bandwidth and review
key roles in the context of our structure to ensure they remain
appropriate. The Chief People Officer will be a key facilitator of
this review process.
In recognition that the board and its committees must have
appropriate ESG oversight, the Committee updated the terms of
reference to ensure that ESG skills and experience are taken into
account in relation to board composition, appointments, succession
planning, performance and training. A copy of the updated terms of
reference can be located on the company’s website.
A further evaluation of the board was carried out to build upon
the progress made by the 2021 evaluation, which was externally
facilitated by Korn Ferry. While the size of the board has increased
as part of the review process in the past 12 months, the general
sense is that this is a well-rounded and effective board with a
strong team dynamic. An area of focus for the Committee this
year will be to ensure the independent directors gain greater
exposure to management that sits below the executive team
to obtain a deeper understanding of the talent pool within the
business. Further details on the board evaluation are on page 67.
The Committee will review the aggregate competencies required
by the board and wider management, adding skills and background
as appropriate, as the external environment evolves and the
business continues to pursue its growth agenda.
Brian Small
DEPUTY CHAIRMAN, SID AND CHAIRMAN
OF THE NOMINATION COMMITTEE
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ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLCGOVERNANCE CORPORATE GOVERNANCE REPORT
CONTINUED
ANNUAL REPORT AND ACCOUNTS 2022
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.
E
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DELIVER GROWTH
Establish a strategy and business model,
which promotes long-term value for
shareholders
01
The group owns the brands boohoo,
boohooMAN, PrettyLittleThing, Nasty Gal,
Miss Pap, 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 focused
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 12 to 17.
Seek to understand and meet
shareholder needs and expectations
02
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.
Take into account wider stakeholder
and social responsibilities and their
implications for long-term success
03
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 73.
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 or is available on
request from the Company Secretary.
Embed effective risk management,
considering both opportunities and
threats, throughout the organisation
04
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 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 an internal risk
management framework 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 Executive Risk Group reports on its
review of the risks and how they are managed
to both the board and Risk Committee,
64
65
BOOHOO GROUP PLCGOVERNANCE CORPORATE GOVERNANCE REPORT
CONTINUED
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 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.
In a move to adopt a more structured
approach to managing ESG risks and
opportunities, the board have established a
new governance framework to ensure there
is adequate board oversight and monitoring
of significant ESG issues. The Executive ESG
Group is chaired by the Group CEO and
reports to the ESG Committee chaired by
Kirsty Britz, Non-Executive Director. The
primary purpose of the ESG Committee is
to independently review, on behalf of the
66
Board, the actions of the Executive ESG
Group and its ‘E’ ‘S’ and ‘G’ sub-committees
to run the group as an environmentally and
socially sustainable, responsible business,
capable of generating long-term value for its
stakeholders.
Further details of the governance structure
are set out at Principle 9.
MAINTAIN A DYNAMIC
MANAGEMENT
FRAMEWORK
Maintain the board as a well-
functioning, balanced team led by the
chair
05
The board currently comprises of four
executive directors and five non-executive
directors. The board has an Executive
Chairman and a Non-Executive Deputy
Chairman who also acts as the Senior
Independent Director.
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 and ESG Committees four
times per year.
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.
Board
Audit
Committee
Risk
Committee
Remuneration
Committee
Nomination
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
Kirsty Britz
Shaun McCabe
Iain McDonald
Tim Morris
Brian Small
Pierre Cuilleret
10
10
10
10
4
10
10
8
10
2
10
10
10
10
4
10
10
8
10
1
–
–
–
–
1
3
3
2
3
1
–
–
–
3 by
invitation
1
3
3
2
3
1
–
–
–
–
2
4
4
4
4
–
–
–
4 by
invitation
4 by
invitation
2
4
4
4
4
–
–
–
–
–
–
4
4
3
4
1
–
–
2 by
invitation
3 by
invitation
–
4
4
3
4
1
–
–
–
–
–
1
1
1
1
–
–
–
1 by
invitation
–
–
1
1
1
1
–
As at 3 May 2022, the board has met twice since the end of the financial year. As the ESG Committee meetings started in April 2022, they are
not included in the above table.
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.
Ensure that between them, the
directors have the necessary up-to-date
experience, skills and capabilities
Evaluate board performance based on
clear and relevant objectives, seeking
continuous improvement
06
The directors’ biographies appear on pages
60 and 61.
The board has a blend of different experience
and backgrounds. Each of Brian Small, Iain
McDonald, Shaun McCabe, Tim Morris
and Kirsty Britz 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 Korn Ferry.
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.
07
Korn Ferry completed the most recent
external evaluation of the board in February
2022. 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. the need to review the appropriate level
of oversight of A4C as it moves to being
part of business as usual– including in the
context of the ESG Committee;
b. further sessions (facilitated through
the Nomination Committee) to review
succession and development plans for key
executive roles across the business;
67
c. increase the time spent on strategy – with
the view that a full strategy away day
becomes a fixture as part of the board
calendar moving forward;
d. Improve the structure of board papers with
clearer sign-posting of key information
and items for debate, reviewing the format
of financial information to facilitate
decision-making and the potential benefit
of including external perspectives on key
trends in board discussions;
e. Increase opportunities for board members
to gain first-hand exposure to the business
and make use of virtual tools to support the
non-executives’ engagement across the
business;
f. 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
ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLCGOVERNANCEGOVERNANCE CORPORATE GOVERNANCE REPORT
CONTINUED
g. Consideration of the structures necessary
to support the company’s ambitious growth
targets and implement changes ahead of
time to ensure that the growth plan can be
achieved.
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
with support from the Chief People Officer.
boohoo continues to look at how best to
improve its corporate governance; and as a
fast-growing company, boohoo is constantly
looking for ways to strengthen its board,
while ensuring that the business is led by
people with the right experience, passion
and enthusiasm. During the year, the board
appointed two new independent directors to
ensure the balance of the board is in favour of
non-executive directors.
The enlarged and strengthened board
structure has substantially enhanced the
bandwidth to execute our multi-brand
strategy and provide oversight of key ESG
risks and opportunities. 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.
In summary, this structure enables the
retention of key skill-sets within the company
while 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.
08
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
continually strives to 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
54 to 57 of this report.
Maintain governance structures and
processes that are fit for purpose and
support good decision-making by the
board
09
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.
Governance Framework
During the year, the board established a new governance framework to provide increased oversight of key risks and strategic matters, with a
particular focus on ESG oversight. The aim is to ensure that the full board is focusing on the most significant strategic matters while still maintaining
broad oversight of ESG opportunities and risks. The Executive ESG committee and sub-committees undertake key ESG activities to drive and
execute the group’s sustainability strategy.
The board is cognisant of the need to maintain an appropriate level of oversight of Agenda for Change as it moves to being part of business as usual,
including in the context of the newly established ESG Committee. Recognising the new framework is in its early stages, the Governance and Ethical
Compliance Committee (which replaces the Supply Chain Compliance Committee) will continue to report into the Executive Risk Group and Risk
Committee to ensure there is continuity of an appropriate level of board oversight of Agenda for Change assurance and management.
The audit, nomination, risk and remuneration committees have each been assigned respective responsibilities for oversight of discrete ESG matters
that are most consistent with their current responsibilities and area of expertise.
The terms of reference for each committee are published on the company website or are available on request from the Company Secretary. The
roles and responsibilities of each committee are detailed below.
New structure for FY23
PLC Board
Sets strategic direction, ensures
compliance and provides counsel
and oversight
Risk
appetite
ESG Committee
Sets and oversees ESG
Strategy and provides
recommendations to Exec
ESG Group
Strategic risk
reporting
Risk
Committee
Sets and
oversees Risk
Strategy and
provides
recommenda-
tions to Exec
Risk Group
Audit
Committee
Oversight of
internal and
external audit
activities
Remuneration
Committee
Assist and advise
the Board on
matters relating
to the remunera-
tion of the Board
and senior
management
Nomination
Committee
Lead the process
for Board
appointments and
make recommen-
dations to the
Board to achieve
the optimal
composition of
the Board and
senior manage-
ment
Executive ESG Group
As least quarterly monitoring
of Strategic Risks and making
recommendations to the
Board and its committees
Executive Risk Group
At least quarterly monitoring
of Strategic Risks and making
recommendations to the
Board and its committees
Social
Committee
At least
quarterly
monitoring of
Functional
Risks
Environment
and Climate
Change
Committee
At least
quarterly
monitoring of
Functional Risks
Governance &
Ethical
Compliance
Committee*
At least quarterly
monitoring of
Functional Risks
Executive
Focus
Groups
At least
quarterly
monitoring of
Functional
Risks
Treasury
Review
Committee
At least
quarterly
monitoring of
Functional
Risks
H&S
Committee
At least
quarterly
monitoring of
Functional Risks
Risk Owners
Continuous
identification
and management
of Functional
Risks
New committees for FY22
* (previously Supply Chain Compliance Committee)
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ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLCGOVERNANCEGOVERNANCE CORPORATE GOVERNANCE REPORT
CONTINUED
AUDIT COMMITTEE
RISK COMMITTEE
ESG COMMITTEE
Shaun McCabe is 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,
Tim Morris and Kirsty Britz are the other
members of the Audit Committee.
The Audit Committee meets three times
a year and 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 Chair 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.
The Chair 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,
Tim Morris and Kirsty Britz 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 32.
NOMINATION COMMITTEE
Brian Small is the Chair 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. Iain McDonald, Shaun
McCabe and Tim Morris are the other
members of the Nomination Committee.
REMUNERATION
COMMITTEE
The Chair 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. Shaun McCabe, Brian Small
and Tim Morris 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 77.
The Chair of the ESG Committee is Kirsty
Britz. The ESG Committee advises the board
on the effectiveness of the company’s ESG
strategy and management of ESG risks and
opportunities. The ESG Committee meets
at least four times a year. Shaun McCabe,
Tim Morris and Carol Kane are the other
members of the ESG Committee.
Matters considered at these meetings
include:
• considering updates on the company’s
progress towards achieving its targets
regarding climate change, raw materials
sourcing, waste management, circularity
and other environmental impacts such
as biodiversity, water, chemicals and
microplastics;
• receiving updates on the group’s social
impact strategy and actions, ensuring focus
on issues of most material impact and
opportunity; and
• reviewing the governance and effectiveness
of the integration of environmental
and social impact into the company’s
operations, policies, practices and product
development.
The company’s ESG Report can be found on
page 41.
BUILD TRUST
Communicate how the company
is governed and is performing by
maintaining a dialogue with shareholders
and other relevant stakeholders
10
The AGM is an important opportunity for
communication with both institutional and
private shareholders and 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, Risk and
ESG 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.
DIRECTORS’ REPORT
The directors present their directors’ report
and annual report and financial statements
for the year ended 28 February 2022.
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 UK.
The review of the business on pages 58 to 70
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 58 to 71 should
be read as forming part of the Directors’
Report.
RESULTS AND DIVIDENDS
Group loss after tax for the year to
28 February 2022 was £4.0 million
(2021: profit £93.4 million). The audited
financial statements for the year for the
group and company are set out on pages 104
to 107.
The directors do not recommend the
payment of a dividend (2021: 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 and capital expenditure.
DIRECTORS AND
COMPANY SECRETARY
The biographies of the directors who held
office throughout the year and subsequently
are set out on pages 60 and 61. 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 78.
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
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 2022 was
1,267,634,949 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
32.3 million shares as at 28 February 2022.
The trustees may vote on the beneficiaries’
shares in accordance with the beneficiaries’
instructions.
70
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ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLCGOVERNANCEGOVERNANCE DIRECTORS’ REPORT
CONTINUED
SUBSTANTIAL SHAREHOLDERS
Shareholders holding more than 3% of the company’s shares as at 31 March 2022:
Shareholder
Number of ordinary shares held
Percentage held
Mahmud Kamani*
T Rowe Price Associates
Norges Bank Investment Mgmt
Hargreaves Lansdown
Rabia Kamani*
Interactive Investor
157,979,880
103,542,235
80,247,061
74,879,670
51,240,509
41,287,406
Shareholders marked as * are considered to be a concert party.
12.5%
10.9%
6.3%
5.9%
4.0%
3.3%
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 35 to 40.
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
and its variants continue to be effective.
Trading during the year to February 2022 has
shown that online sales have some resilience
during lockdowns in many countries. The
group has cash resources and credit facilities
sufficient to continue solvent trading in the
face of an unforeseen downturn in demand.
The credit facility has been increased from
£100 million to £325 million after the year-
end and additional facilities are expected to
be brought into use later in 2022 to support
capital expenditure.
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.
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.
Twice a year, five-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 five-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 five-year plan is the
appropriate period to project financial plans
with a reasonable level of certainty in line with
their current strategic objectives.
A sensitivity analysis was performed on the
five-year plan in which revenue was assumed
to grow at 20% less than the most reasonable
base case. The results of this test showed
that the facilities and cash generation were
sufficient for the group to continue trading
with a comfortable margin of error.
Based on their assessment of prospects and
viability, 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 five-year
period ending February 2027.
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.
SECTION 172
HOW THE BOARD PROMOTES THE SUCCESS OF THE COMPANY
“
The board recognises that
effective engagement with
key stakeholders is a key
component of long-term
sustainability and success.”
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. The board exercises skill and judgment 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.
It is essential to running a successful business that we speak to our
investors, suppliers, customers and colleagues. 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.
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
consider appropriately the impact and views of key stakeholder groups
while 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 page 68.
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. More information is set out
in our ESG Report on page 41.
Consideration of the impact that the group and its operations have on
all stakeholders is central to the culture and values of boohoo – more
information about our values and culture can be found on page 54.
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
whistleblowing, bribery and corruption, employee and supplier conduct
and human rights.
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 64 to 70.
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.
Below we have mapped out our seven key stakeholder groups, the
material issues that they have raised throughout the year and how the
board has responded.
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ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLCGOVERNANCEGOVERNANCE SECTION 172
HOW THE BOARD PROMOTES THE SUCCESS OF THE COMPANY
What they care about How the board engaged during the year
Read more
Working environment
• Held regular employee Townhalls and Q&A sessions throughout the
Page 54
CONTINUED
Stakeholders
EMPLOYEES
Culture
Learning and
development
Pay and benefits
Wellbeing
SUPPLIERS
Payment
Transparency
Human rights
Material sourcing
Sustainability
Future business growth
year with the Founders, CEO and CFO
• Launched a colleague engagement steering group across our supply
chain providing opportunities for colleagues to make a real tangible
difference to boohoo working practices
• Engaged and upskilled colleagues in delivering on our sustainability
strategy through our supply chain forum called ‘sustain2gain’
• Developed and implemented targeted engagement plans in
response to survey results listening forum feedback, exit interviews
and general feedback
• Introduced a suite of people awards to recognise loyalty and key
achievements across the group, hybrid working as a permanent
benefit to provide greater flexibility and incentives to encourage
physical activity and time away from desks
• Launched an updated L&D programme ‘Learn It’ which provides a
development offer for all levels across the business and a group-wide
leadership programme amongst our directors consisting of insights,
modules, executive coaching and internal mentoring
Sustainability
• Educated our suppliers on sustainability, product accreditation and
Page 45
traceability within supply chains
• Environmental team launched UK sustainability strategy to
encourage boohoo suppliers to use renewable energy and to focus
on reducing their carbon footprint
Product Quality
• Provided training seminars for suppliers to educate and support their
understanding in product safety
• Opened boohoo product performance lab to test our products and
educate both brand teams and suppliers alike in product and fabric
testing and performance
Ethical Trade
• Hosted supplier country specific webinars on boohoo code of
conduct and importance of traceability within their supply chains
• Adopted the Fast Forward audit methodology approach for all
boohoo UK manufacturing suppliers
Sourcing
• Launched boohoo group responsible purchasing practices to train
and educate boohoo brand teams and to promote supplier on good
terms approach
CUSTOMERS
Product quality, design
and safety
Affordable on-trend
fashion
Sustainability
Customer service
• Used NPS and Trust Pilot feedback and reviews to formulate and
confirm product development and improvements to our customer
journey
Page 44
• Held regular ‘Voice of the Customer’ sessions, across multiple
stakeholder groups including supply chain, product and finance.
Using contact (customer) and refund data to drive business change
and performance
• Proactively communicated to circa 2.6million customers throughout
the year
• Protected our acquisition brands through transition by putting our
impacted customers first
Stakeholders
COMMUNITY
AND
ENVIRONMENT
What they care about How the board engaged during the year
Sustainability
• Establishment of the ESG Committee
Read more
Page 46
Climate change
Charity
support
• Formation of the climate change steering group to focus efforts on
emissions reductions and addressing climate risks
• Cotton Connect programme to improve cotton farming practices in
Pakistan, benefiting the environment and workers
• Continued our engagement with Textiles 2030, microfibre
consortium and sustainable apparel coalition
• Installed a significant solar project at the Burnley distribution centre
• Had our science-based targets signed off and validated
• Begin our journey of using TCFD as a tool to measure climate risk
and opportunities
GARMENT
WORKERS
Working conditions
Safety
• The Garment and Textile Workers’ Trust commissioned the experts
at Nottingham Universities Rights Lab to conduct and in-depth
piece of research to inform the Trust’s purpose and scope
Page 45
Communication
• This work involved academics speaking to a broad range of
SHAREHOLDERS
Living wage
stakeholders including but not limited to: government officials,
NGO’s, Union representatives, community leaders, manufacturers
and employees from the garment industry
• Convened a meeting with senior representatives from the following
government agencies: GLAA, HSE, DWP to discuss the findings of
our Agenda for Change programme
• Proactively communicated with an extended group of stakeholders
on the progress of Agenda for Change programme. Subsequent
meetings were held with various stakeholders including: Dame Sara
Thornton, Baroness Young of Hornsey, APPG groups, Fashion
Roundtable and many others
Transparency
• As part of the board’s commitment to operating transparently,
Page 65
Open communication
ESG management
Financial Performance
published all five of Sir Brian Leveson’s reports
• The management team conducted investor roadshows in May and
October coinciding with publication of the group’s annual and half
year results
• A comprehensive all-year investor relations programme, involving
regular attendance at investor conferences through a series of 1:1
and group meetings
• Ongoing regular engagement with shareholders, non-shareholders
and investment analysts to discuss latest results, strategy
and themes
• The board reviewed shareholder feedback following publication
of results and ongoing regular Investor Relations feedback from
investors on key topics
• The board undertook a consultation with shareholders with regard
to executive remuneration for FY2023; the consultation resulted
in direct engagement with approximately 40% of the shareholder
register and over 50% of independent shareholders
• Incorporated ESG targets into executive remuneration awards and
incentive plans
• The board received training on ESG in the context of impact on the
share price and importance to investors
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HOW THE BOARD PROMOTES THE SUCCESS OF THE COMPANY
DIRECTORS’ REMUNERATION REPORT
CONTINUED
Stakeholders
GOVERNMENT
AND NGOs
Read more
Page 45
What they care about How the board engaged during the year
Compliance with laws
and workers’ rights
• This year, due to the relaxation in COVID-19 restrictions, we
have significantly increased our engagement with government
departments and Senior NGO representatives for example: BEIS
and DiT
• We are active members of the AGM PPP
• We became a signatory of the International Accord for Health and
Safety, a binding agreement designed to protect those working in
the garment industry
• We engaged with the Living Wage Commission and the Real Living
Wage Foundation
• We provide regular briefings to government ministers and the
Shadow Cabinet
Our impacts on, and engagement with, our stakeholder groups is considered further within the group’s Sustainability Strategy on pages 41 to 47.
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 48 to
53 is incorporated into this report by cross-
reference.
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
they ought to have taken as a director to
make themselves 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.
On behalf of the board
John Lyttle
Neil Catto
3 May 2022
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.
PERFORMANCE AND
REWARD FOR THE YEAR
ENDED 28 FEBRUARY 2022
For the year ended 28 February 2022, the
business made considerable progress against
its strategic objectives but also faced a
number of pandemic-related headwinds. The
annual bonus plan set up at the start of the
year was based on satisfying various financial
and non-financial targets, the non-financial
element having been introduced to ensure
management were focused on addressing
some of the wider strategic issues, which
arose during the course of the previous year.
These non-financial objectives were based
on successfully completing Agenda for
Change (15% of the overall bonus) and the
successful integration of the newly acquired
brands (10%). Management performance
against these objectives was exceptional: as
Sir Brian Leveson noted in his final report,
the group completed the Agenda for Change
workstreams during the year and has now
subsumed Agenda for Change within business
as usual. All of the new brands have been
integrated seamlessly within boohoo. As a
result, the Committee was comfortable all of
the related objectives had been achieved and,
therefore, a bonus of 25% of the maximum
was payable.
Unfortunately, the group did not achieve
either of the very stretching revenue growth
or Adjusted EBITDA growth targets set at the
start of the financial year, which required very
significant year-on-year growth in each case.
Although revenue increased, EBITDA was
impacted by disruption to the international
delivery proposition and significant and
unforeseen pandemic-related cost inflation.
The Committee reflected at length on
the overall achievements during the year
and decided that a bonus outturn of 25%
of maximum would fail to reflect the
tremendous progress made by management
over the year in laying the foundation for
the next stage of sustainable growth for
the business. This is demonstrated by the
significant gains in market share and the
robust level of performance in the UK, which
clearly validates the boohoo model and
positions the business well for the next stage
of the strategy, which is focused on improving
the international proposition, with continued
investment in the global distribution network
to generate incremental sales potentially in
excess of £5 billion.
As a result, the Committee decided that
an annual bonus of 75% of the maximum
opportunity should be payable to John
Lyttle, the CEO, and Neil Catto, the CFO.
Although this is higher than the formulaic
outcome of the performance assessment,
for the reasons set out above it is viewed
as fully consistent with the performance of
the business as a whole over the financial
year and in the best long-term interests
of shareholders. Reflecting that in some
respects this is a payment for performance
that positions the business well for the future,
the directors are required to invest two-thirds
of the bonus in shares, which must be held
for at least two years. This level of deferral is
higher than the one-third expectation set out
in the directors’ remuneration policy.
The bonuses for the CEO and CFO are
consistent with pay out levels under incentive
schemes for other high performing senior
managers in the organisation.
The founders of the company, Mahmud
Kamani and Carol Kane, indicated to the
Committee that they did not wish to be
considered for a bonus payment for the
year. They are both material shareholders
in boohoo and their preference is that the
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
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CONTINUED
rewards for performance over the year
are focused on the CEO, CFO and other
senior managers in the interests of ongoing
retention and motivation for this group.
To date, Neil Catto has been the only director
to participate in the Long-Term Incentive
Plan (“LTIP”). His LTIP award granted in
2019 was based on performance measured
to the end of the year ending 28 February
2022. Two-thirds of the award was subject
to the achievement of challenging Aggregate
Adjusted Earnings per Share targets, with the
other third dependent on Total Shareholder
Return targets being met. EPS performance
over the period resulted in vesting at a level
of 100%, for the two-thirds element based
on EPS, with TSR not vesting. Combined, the
overall level of vesting was, therefore, 67%.
REMUNERATION FOR
THE YEAR ENDING 28
FEBRUARY 2023
Having made substantial changes to the
remuneration policy last year to take into
account the events that occurred during the
prior year and the views of major boohoo
shareholders, remuneration for the financial
year ending 28 February 2023 will be based
on the following elements:
• Basic salaries for the executive directors
will increase by 3% with effect from May
2022, 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
and up to 200% for Mahmud Kamani
and Carol Kane. We have also decided
that the bonus opportunity for John
Lyttle will increase to 200% of salary,
to ensure he has a market-competitive
overall remuneration package and to
align his incentive opportunity with that
of the founder directors. A bonus limit
at this level is also considered to reflect
more accurately his responsibilities and
contribution as group CEO.
• There will continue to be 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 continue to supplement the
financial performance conditions for
the annual bonus with a mix of ESG
and strategic non-financial targets. As
a result, 30% of the 2023 bonus will
be based on revenue, 45% on EBITDA,
15% on targets linked to our UP.FRONT
sustainability strategy and 10% based
on UK manufacturing and international
supply chain milestones. This will ensure
that a maximum bonus pay out will depend
on the achievement of an exceptionally
strong level of performance across multiple
key areas of focus. Full details of the
performance targets will be disclosed in
next year’s report.
• As trailed in last year’s Directors’
Remuneration Report, the Committee has
reviewed long-term incentive provision for
the executive directors in order to ensure
that appropriate arrangements are in place.
Following this review, we have decided that
all of the executive directors should receive
an award under the LTIP in the 2023
financial year. This is to ensure ongoing
incentivisation over the longer term and
beyond the timeframe of the long-term
incentive plans put in place in 2019 and
2020. The LTIP offers a conventional
long-term incentive with a three-year
performance period which we feel will work
well for the next stage of the evolution of
the business, and our expectation going
forward is that we will offer a new LTIP
grant to the directors each year.
• For 2023, we intend to grant awards to all
four executive directors at a level of 200%
of basic salary. An award at 200% of salary
will provide an incentive opportunity, which
is competitive and provides a real incentive
to drive outperformance over the next
period of growth. A grant level of 150% of
salary would not be considered to provide
the necessary level of incentivisation for a
company of boohoo’s size and complexity.
Furthermore, a grant at 200% will act
as a powerful retention tool as we face
the reality that the Growth Share Plan
for John Lyttle (introduced in 2019) and
the Management Incentive Plan (“MIP”,
introduced in 2020) may not vest at the
levels originally hoped for.
• Having reviewed the existing LTIP,
which was introduced in 2016, we have
concluded that a new set of plan rules
should be approved by shareholders at
the forthcoming AGM. This will ensure
that the plan can accommodate the
award levels at the 200% of salary level
(in all circumstances - the previous limit
was 150% of salary barring exceptional
circumstances where there was no limit)
and allows all executive directors to
participate. The new plan also provides
updated provisions in line with investor
expectations, for example in relation to
clawback and malus.
G
O
V
E
R
N
A
N
C
E
• Vesting of the FY2023 award will be
subject to the achievement of stretching
performance targets. We will use a suite
of four measures, with the following
weightings: TSR (40%), EPS (20%),
revenue (20%), and ESG (20%). EPS and
revenue are key financial performance
indicators and measures, which are closely
tracked internally and by investors and
analysts. We will assess TSR on a relative
basis by comparing boohoo’s performance
with the companies comprising the
FTSE 250 Index. Although boohoo is
not a member of this index, it is a widely
recognised broad market benchmark,
which contains companies of a similar
size and complexity. The ESG measures
we have chosen are all closely linked to
the goals we have set in the UP.FRONT
strategy. Full details of the specific targets
for all of these measures are set out on
page 96.
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 January 2022. 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,
2020 and 2021 financial years.
Options were issued under an HMRC-
approved Save As You Earn ("SAYE") plan
in each of the financial years ended 2016
to 2022. 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. Shortly after the end
of the 2022 financial year, we consulted
with shareholders on our plans for 2023
and explained the decisions we had taken in
respect of remuneration in 2022. 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 and the
separate resolution approving the new LTIP
rules, as the directors will do in respect of
their own beneficial shareholdings.
Iain McDonald
CHAIRMAN OF THE REMUNERATION
COMMITTEE
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ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLCGOVERNANCE DIRECTORS’ REMUNERATION REPORT
CONTINUED
UK CORPORATE GOVERNANCE
CODE
CLARITY
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 was enhanced through
changes to the policy made last year, such as
the alignment of directors’ pension provision
with the wider workforce with effect from
January 2023 and the introduction of post-
employment shareholding requirements.
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 awards made 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,
as noted above, also 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 opposite:
SIMPLICITY
RISK
PREDICTABILITY
PROPORTIONALITY
ALIGNMENT TO
CULTURE
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 reflects 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 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. While additional
measures are being introduced to the LTIP awards which will
be granted in 2023, these are designed to be fully aligned
with key business priorities for the group.
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. Changes to the incentive
schemes introduced by the Committee last year provided
additional reassurance that executives would be directly
focused on resolving the supply chain issues that emerged and
not focused solely on growth without due recognition of wider
stakeholder interests. This has been given further impetus for
2023 with the new ESG performance measures, which have
been introduced for the annual bonus scheme and LTIP.
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 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.
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
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.
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.
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.
G
O
V
E
R
N
A
N
C
E
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
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 to 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.
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CONTINUED
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 had discussions with major
shareholders on the remuneration decisions taken in respect of FY2022 and the plans for FY2023.
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 the incentive approach for FY2023 to improve the
alignment with shareholders and key stakeholders in the business.
SUMMARY OF OUR REMUNERATION POLICY
The table below provides a summary of the key aspects of the group’s remuneration policy for executive directors.
Element
Base salary
Purpose and
link to strategy Operation
Maximum
opportunity
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
• To aid
recruitment
and retention
• To reflect
experience
and expertise
• To provide an
appropriate
level of fixed
basic income
• Normally reviewed annually, with
any increase usually becoming
effective 1 May
• Set initially at a level required
to recruit suitable executives
reflecting their experience and
expertise
• Any subsequent increase
influenced by:
• 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
• 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
Element
Annual bonus
Purpose and
link to strategy Operation
• To reward
the annual
delivery of
short to
medium-
term
objectives
relating to
the business
strategy
• All bonus payments are at the
discretion 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
• 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)
Maximum
opportunity
Framework used to assess
performance
• Up to 200% of
• Bonuses are based on
salary for Mahmud
Kamani, Carol Kane
and John Lyttle
and up to 100%
of salary for other
executive directors,
dependent on
performance
performance measures with
appropriate targets set and
assessed by the Committee
at its discretion
• Those financial measures
that are identified as 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
Long-Term
Incentive Plan
(“LTIP”)
• Intended
• Awards are normally granted in the
• Subject to
• Award vest based on
to align the
long-term
interests
of senior
executives
with those of
shareholders
• To incentivise
the delivery
of key
strategic
objectives
over the
longer term
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)
shareholder
approval at the
forthcoming AGM,
the maximum
annual limit
contained within
the plan rules will be
200% of salary for
executive directors
• Awards are at
the discretion of
the Committee
and may be made
at lower levels
than this
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, revenue 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
82
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ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLCGOVERNANCEGOVERNANCE DIRECTORS’ REMUNERATION REPORT
CONTINUED
Element
Purpose and
link to strategy Operation
Growth Share Plan
• 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
• To aid
recruitment
and retention
• To provide an
appropriate
level of fixed
income
Management
Incentive Plan
(“MIP”)
Pension
• 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)
• Executive directors may receive an
employer’s pension contribution or
cash allowance
Maximum
opportunity
• 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)
Framework used to assess
performance
• 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, 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, vesting of any part
of the award will require the
successful implementation
of the Agenda for Change
programme
N/A
• 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
• 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%)
Maximum
opportunity
Framework used to assess
performance
• The value of
N/A
benefits may vary
from year-to-
year depending
on the cost to the
company
None
• 200% of salary for
executive directors,
rising to 400% of
salary on maturity
of the Growth
Share Plan/MIP
Element
Other benefits
Shareholding
requirement
Purpose and
link to strategy Operation
• To provide a
competitive
benefits
package
• To support
long-term
commitment
to the
company and
the alignment
of executive
director
interests
with those of
shareholders
• 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
• 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) -
Mahmud Kamani and Carol Kane
have chosen not to participate in
these schemes
• 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
84
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ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLCGOVERNANCEGOVERNANCE DIRECTORS’ REMUNERATION REPORT
CONTINUED
ANNUAL REPORT AND ACCOUNTS 2022
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, while 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.
CHOICE OF
PERFORMANCE MEASURES
AND APPROACH TO
TARGET SETTING
The performance metrics and targets that are
set for the executive directors via the various
incentive arrangements are carefully selected
to align closely with the group’s strategic plan
and key performance indicators.
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. Vesting of any awards also
requires successful implementation of the
Agenda for Change programme, thus tying
management reward more closely to this
critical priority for the business.
Annual bonus
Annual bonuses are 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 were introduced to the bonus
scheme, and this will continue for the year
ending 28 February 2023. 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
or TSR, 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.
In summary, the contractual provisions are as follows:
Provision
Notice period
Termination payment
Change of control
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
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 their departure and, in the event of this determination being made,
will set out its rationale in the following Annual Report on Remuneration.
86
87
BOOHOO GROUP PLCGOVERNANCEGOVERNANCE DIRECTORS’ REMUNERATION REPORT
CONTINUED
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
Fees
Purpose and
link to strategy
• To recruit and
retain high
calibre non-
executives
Operation
Maximum
opportunity
• Fees are determined by the board,
• 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
with 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 that
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
This section of the Remuneration Report contains details as to how the group’s remuneration policy was
implemented during the year ended 28 February 2022.
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 2022 is set out below:
Base salary
and fees
£
Fixed remuneration
Benefits
£
Pension
equivalent
£
Executive directors
Mahmud Kamani
Carol Kane
John Lyttle
Neil Catto
Total executive
directors
Non-executive directors
Kirsty Britz
Pierre Cuilleret
Shaun McCabe
Iain McDonald
Tim Morris
Brian Small
Total non-executive
directors
Total
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
461,250
450,000
465,900
450,000
636,730
615,000
310,600
300,000
1,874,480
1,815,000
24,615
–
15,692
60,000
70,000
20,192
70,000
70,000
49,384
–
120,000
126,859
349,691
277,051
2,224,171
2,092,051
63,298
42,747
5,851
5,331
3,649
3,777
2,686
2,959
75,483
54,814
–
–
–
–
–
–
–
–
–
–
–
–
–
–
23,947
27,900
32,728
33,388
15,965
18,600
72,640
79,888
–
–
–
–
–
–
–
–
–
–
–
–
–
–
75,483
54,814
–
–
72,640
79,888
Variable remuneration
Long-term
Annual
incentives
bonus
£
£
–
900,000
–
900,000
712,631
922,500
231,750
300,000
–
–
–
–
–
–
120,170
435,155
Total
£
524,548
1,392,747
495,698
1,383,231
1,388,738
1,578,264
684,171
1,060,313
944,381
3,022,500
120,170
435,155
3,093,154
5,414,555
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
34,615
–
15,692
70,000
80,000
30,192
80,000
80,000
59,384
–
140,000
146,859
–
–
944,381
3,022,500
–
–
120,170
435,155
409,691
327,051
3,502,845
5,741,606
Other
£
–
–
–
–
3,000
3,599
3,000
3,599
6,000
7,198
10,000
–
–
10,000
10,000
10,000
10,000
10,000
10,000
–
20,000
20,000
60,000
50,000
66,000
57,198
Figures in the single total figure remuneration include the following for the financial year:
Base salary and fees
Pension and pension equivalent Where an executive has elected to forego company pension contributions, due to pension cap restrictions, an
The amount of salary or non-executive directors’ fees.
Other
Annual bonus
Long-term incentives
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.
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 2019 and vesting on 21 April 2022 based on performance measured to 28 February
2022 can be found below. A share price of 106p (the three-month average share price to 28 February 2022) has
been used for the purposes of valuing the gain. Of the amount stated in the table, £nil is attributable to share price
appreciation.
88
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ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLCGOVERNANCEGOVERNANCE The value of private medical insurance, income protection, life assurance, company car and fuel costs based on the
taxable value and driver services
LONG-TERM SHARE INCENTIVES
Neil Catto holds options under the LTIP subject to the achievement of performance conditions as follows:
ANNUAL REPORT ON REMUNERATION
CONTINUED
Benefits
ANNUAL BONUS
For the year ended 28 February 2022, Mahmud Kamani’s and Carol Kane’s maximum potential bonus was 200% of basic salary, John Lyttle’s 150%
and Neil Catto’s 100%. The 2022 bonus targets were: 30% based on revenue; 45% on Adjusted EBITDA; 15% on continued progress on the 2022
Agenda for Change milestones; and 10% on the successful integration of the newly acquired brands. Bonus entitlement targets were as follows:
Financial target range
Financial target range
Revenue target:
Threshold £2,200 million
Upper limit £2,350 million or more
Adjusted EBITDA target:
Threshold £210 million
Upper limit £227 million or more
Non-financial targets
Progress on Agenda for Change
Successful integration of new brands
Bonus entitlement %
9%
30%
13.5%
45%
15%
10%
For the financial targets set out above, the amount of bonus payable varies on a sliding scale between the threshold and upper limit shown. For the
financial year ended 28 February 2022, revenue was £1,983 million and adjusted EBITDA £125 million, with neither target being reached. The
non-financial objectives were based on successfully completing Agenda for Change (15% of the overall bonus) and the successful integration of the
newly acquired brands (10%). Management performance against these objectives was exceptional: as Sir Brian Leveson noted in his final report, the
group completed the Agenda for Change workstreams during the year and has now subsumed Agenda for Change within business as usual. All of
the new brands have been integrated seamlessly within the group. As a result, the Committee was comfortable all of the related objectives had been
achieved and, therefore, the bonus of 25% of the maximum for this element was payable.
As a result of the formula-driven assessment of performance, the executive directors were entitled to bonus payments equivalent to 25% of
the maximum. The Committee reflected at length on this outturn and considered that it would fail to reflect the tremendous progress made by
management over the year in laying the foundation for the next stage of sustainable growth for the business. As explained further in the statement
from the Chairman of the Remuneration Committee, the Committee therefore exercised its discretion to permit bonuses at a level of 75% of the
maximum opportunity to be payable. The Committee further required that two-thirds of this amount be invested in shares, with the shares held for
at least two years. This is significantly greater than the minimum one-third deferral required under the directors’ remuneration policy.
Bonuses were subsequently payable as follows:
Name
Mahmud Kamani
Carol Kane
John Lyttle
Neil Catto
Bonus % of salary
-
-
112.5%
75%
Mahmud Kamani and Carol Kane indicated to the Committee that they did not wish to be considered for a bonus payment for the year under
review.
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
Exercise
price pence
404,822
120,546
119,088
168,570
164,865
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
The awards in respect of the years 2016 to 2018 have vested and the shares under option reflect the position after assessment of the performance
conditions. For the 2019 and 2020 awards, the awards are the number granted before the assessment of the performance conditions,
summarised below.
2019 grant
The performance targets for the shares granted on 11/12/19 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 FY2022. Minimum ‘threshold’ and ‘stretch’
targets have been established by the Committee against these criteria. The EPS element vested on a straight-line basis between target intervals
from 16p for a 20% vesting to 19p for 100% vesting. The actual vesting was 100%. 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. The actual vesting was nil. The combined vesting
was, therefore, 67%.
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.
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
Neil Catto
John Lyttle
John Lyttle
John Lyttle
No. of ordinary
shares held in trust
Purchase
price pence
6,000
3,571
938
884
974
3,136
884
974
3,136
50
28
213
226
370
115
226
370
115
Date of
grant
14/03/14
19/06/15
27/09/18
23/08/19
19/02/21
13/01/22
23/08/19
19/02/21
13/01/22
Maturity
date
14/03/17
19/06/18
27/09/21
23/08/22
19/02/24
13/01/25
23/08/22
19/02/24
13/01/25
90
91
ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLCGOVERNANCEGOVERNANCE ANNUAL REPORT ON REMUNERATION
CONTINUED
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
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
3.5%
6.0%
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:
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
Year
2022
2021
2020
25th
percentile
ratio
63:1
76:1
151:1
50th
percentile
ratio
53:1
65:1
130:1
75th
percentile
ratio
39:1
49:1
95:1
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
28/02/22
Boohoo
FTSE 250
FTSE AIM 100
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 was a significant reduction in the pay ratio reported for 2021 when compared to that reported for 2020.
This was 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
2022
Total pay and
benefits
1,389
22
26
36
2021
Total pay and
benefits
1,578
21
24
32
Base salary
(annualised)
615
18
19
26
2020
Total pay and
benefits
2,702
18
21
29
Base salary
615
19
21
29
Base salary
637
20
23
32
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
2022
Mahmud
Kamani
Carol
Kane
Mahmud
Kamani
Carol
Kane
Mahmud
Kamani
Carol
Kane
Mahmud
Kamani
Carol
Kane
Mahmud
Kamani
Carol
Kane
John
Lyttle
John
Lyttle
John
Lyttle
217
235
379
390
396
410
893
914
1,062
1,072
2,702
1,578
1,389
0%
0%
90%
90%
100%
100%
100%
100%
100%
100%
100%
100%
75%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Total Single
Figure
(£000)
Annual
bonus
payment (%
of maximum)
LTIP vesting
level (% of
maximum)1
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, FY2021 or FY2022. 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 the 2020 Directors’ Remuneration Report.
Beneficially
owned at
28 February
2021
Free share
award
under NED
remuneration
policy
Name
Mahmud Kamani
Carol Kane
John Lyttle
Neil Catto
157,979,880
33,330,421
–
79,735
Kirsty Britz
Iain McDonald
Shaun McCabe
Tim Morris
Brian Small
–
621,336
102,855
–
62,481
–
–
–
–
10,627
10,627
10,627
10,627
21,253
Shares
acquired
during the
year
Shares
disposed of
during the
year
Beneficially
owned at
28 February
2022
–
–
357,446
–
–
100,000
–
15,670
15,000
– 157,979,880
33,330,421
–
188,172
(169,274)
79,735
–
–
–
–
–
–
10,627
731,963
113,482
26,297
98,734
As a % of
share capital
Outstanding
share options
Shares held
under SIP
12.46%
2.63%
0.02%
0.01%
0.00%
0.06%
0.01%
0.00%
0.01%
–
–
–
995,382
–
–
–
–
–
–
–
4,994
15,503
–
–
–
–
–
SAYE
options
granted
Total
interests in
shares at 28
February
2022
– 157,979,880
–
33,330,421
8,297
201,463
8,297
1,178,652
–
–
–
–
–
10,627
731,963
113,482
26,297
98,734
92
93
ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLCGOVERNANCEGOVERNANCE
ANNUAL REPORT ON REMUNERATION
CONTINUED
GROWTH SHARE PLAN
As explained in the 2020 report, John Lyttle, Chief Executive, has subscribed for 1,950 A ordinary shares of 0.1p 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.
• John Lyttle 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 0.1p each ("B Ordinary Shares"), respectively, in boohoo Holdings Limited, an intermediary holding company of the group,
as part of a Management Incentive Plan (“MIP").
IMPLEMENTATION OF REMUNERATION POLICY FOR THE YEAR ENDING 28 FEBRUARY 2023 –
UNAUDITED
BASE SALARY
The annual base salaries of the executive directors are as follows. The Committee has agreed salary increases of 3% with effect from 1 May 2022, 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
PENSION AND OTHER BENEFITS
From 1 May
2022
From 1 May
2021
£477,405
£477,405
£652,450
£318,270
£463,500
£463,500
£633,450
£309,000
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 reduced with effect from 1 January 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.
The value of the award under the MIP is directly linked to the creation of significant growth in shareholder value as set out below:
ANNUAL BONUS
• 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.
• The executive directors 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.
COMPOSITION OF THE REMUNERATION COMMITTEE
The members of the Committee are Iain McDonald, Shaun McCabe, Tim Morris 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.
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 2023 as a percentage of
salary will be as follows: Mahmud Kamani, Carol Kane and John Lyttle 200%, and Neil Catto 100%. The maximum bonus will be payable based on
performance measured over the single financial year ending 28 February 2023. 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 targets related to
the UP.FRONT sustainability strategy and 10% on UK manufacturing and international supply chain milestones.
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 continuing to ensure that the management team is focused on driving performance against the sustainability plan launched in 2021
as well as making continued progress against key supply chain objectives. 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 will continue to apply, 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 2023, 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.
ADVISERS TO THE REMUNERATION COMMITTEE
LONG-TERM INCENTIVE PLAN (“LTIP”)
During the year, the Committee received advice from Korn Ferry on remuneration matters and reporting. The total fees paid to Korn Ferry in
respect of its services during the year were £26,500 (2021: £23,200). 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.
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 2021:
Resolution
Approve the Directors’ Remuneration Report for the year ended 28 February 2021
For
676,353,555
(79.8%)
Against
171,182,158
(20.2%)
Withheld
106,902,245
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.
As explained in the annual statement from the Chairman of the Remuneration Committee, the Committee intends to make LTIP awards to all four
executive directors during the financial year ending 28 February 2023. This is subject to shareholder approval of the new LTIP rules at the AGM
taking place on 17 June 2022. Subject to shareholder approval, awards will be granted to the executive directors at a level of 200% of basic salary,
to provide a competitive reward opportunity and a real incentive to drive outperformance over the next period of growth for the business. This will
also act as a powerful retention tool given the possibility that the Growth Share Plan and the MIP will not pay out at the levels hoped for when they
were introduced (if at all).
The awards will vest subject to the achievement of challenging performance conditions over the three-year period to 28 February 2025.
Performance will be assessed against four different metrics, as set out below. For the Revenue, EPS and TSR targets there will be a straight-line
vesting profile between the threshold target (which results in vesting at a level of 25%) and the maximum target (which results in vesting at a level
of 100%).
The revenue and EPS targets are considered by the Committee to provide the right balance between achievability and stretch, in light of the
outlook for performance over the period.
94
95
ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLCGOVERNANCEGOVERNANCE STATEMENT OF DIRECTORS’
RESPONSIBILITIES IN
RESPECT OF THE ANNUAL
REPORT AND FINANCIAL
STATEMENTS
The directors are responsible for preparing
the Annual Report and the financial
statements in accordance with applicable
Jersey law and regulations. Company law
requires the directors to prepare financial
statements for each financial year. Under that
law, the directors have elected to prepare the
financial statements in accordance with UK-
adopted International Financial Reporting
Standards (“IFRS”). Under company law,
the directors must not approve the financial
statements unless they are satisfied that they
give a true and fair view of the state of affairs
of the company and of the profit or loss of
the company for that period.
In preparing those financial statements, the
directors are required to:
steps for the prevention and detection of
fraud and other irregularities.
• 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 are responsible for keeping
adequate accounting records that are
sufficient to show and explain the company’s
transactions and 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
The directors are responsible for the
maintenance and integrity of the corporate
and financial information included on the
company website. Legislation in the United
Kingdom governing the preparation and
dissemination of financial statements may
differ from legislation in other jurisdictions.
The directors confirm that, so far as they are
aware, there is no relevant audit information
of which the company’s auditors are unaware.
They have taken all the steps that they
ought to have taken as directors in order
to make themselves aware of any relevant
audit information and to establish that
the company's auditors are aware of that
information.
On behalf of the board
John Lyttle
Neil Catto
3 May 2022
ANNUAL REPORT ON REMUNERATION
CONTINUED
Performance metrics
Level of vesting (in respect of each
element of the award)
20% of the total award
25%
100%
20% of the total award
25%
100%
40% of the total award
25%
100%
20% of the total award
(i) Revenue target: CAGR from FY2022 revenue figure
12% CAGR from FY2022 revenue figure
17% CAGR from FY2022 revenue figure
(ii) Adjusted EPS target: Aggregate EPS over three years
18p
23p
(iii) Total Shareholder Return target: boohoo compared to the companies comprising the FTSE 250 Index
(excluding investment trusts) over three years
Median performance
Upper quartile performance or above
(iv) ESG targets
We have selected three Key Performance Indicators from our broader ESG agenda and have set a
framework for their assessment, in each case by the end of FY2025, as set out below
1. Clothes made smarter
• All our polyester and cotton products will contain recycled or more sustainably sourced materials
• Resale and/or end of life offers available across all brands
• All customer garment packaging will be reusable recyclable or compostable.
2. Suppliers on better terms
• All products from manufacturing units in the UK will come from suppliers that can demonstrate they are
sending zero waste to landfill
• Publicly demonstrate continued progress, post Agenda for Change, on ethical and sustainable supplier
management programme, resulting in improvements in worker standards and rights
3. Our business taking action
• Climate change embedded in risk management and board level commercial decisions to assess the impact
of commercial decisions on achieving SBTi targets. On track to achieve carbon reductions across value
chain aligned with SBTi equivalent to 52% emissions, relative to growth.
• To receive independent external recognition via an award, accreditation or kitemark for:
• Being an organisation that cares about doing things right and values it’s people; or
• Being an organisation that has a genuine and authentic commitment to driving diversity and inclusion
ALL-EMPLOYEE SHARE PLANS
The board granted free shares in the financial year ended 28 February 2022. The company offered HMRC-approved SAYE plans in each of the
financial years ended from 2016 to 2022 and it is intended that a further SAYE grant be offered for the financial year ending 28 February 2023.
The executive directors are eligible to participate in the schemes on the same basis as other employees.
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:
From 1 March 2022
From 1 March 2021
Share
awards
£10,000
£10,000
£10,000
£10,000
Fees
£70,000
£70,000
£70,000
£60,000
Share
awards
£10,000
£10,000
£10,000
£10,000
Fees
£60,000
£70,000
£70,000
£60,000
£20,000
£120,000
£20,000
£120,000
Kirsty Britz
Iain McDonald
Shaun McCabe
Tim Morris
Brian Small
NED and Chair of ESG Committee
NED and Chairman of Remuneration Committee
Chairman of Audit and Risk Committees
NED
Deputy Chairman, Senior Independent Director, Chairman of
Nomination Committee
The above remuneration will be reviewed annually by the board.
Iain McDonald
CHAIRMAN OF THE REMUNERATION COMMITTEE
3 May 2022
96
97
ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLCGOVERNANCEGOVERNANCE F I N A N C I A L S
FINANCIAL STATEMENTS
Independent auditor's report to the
members of boohoo group plc
Consolidated statement
of comprehensive income
Consolidated statement
of financial position
Consolidated statement
of changes in equity
Consolidated cash flow statement
Notes to the financial statements
Five-year financial summary
100
104
105
106
107
108
134
98
99
ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLC FINANCIAL STATEMENTS FINANCIAL STATEMENTS INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF BOOHOO GROUP PLC
OPINION
CONCLUSIONS RELATED TO
GOING CONCERN
We have audited the consolidated financial
statements of boohoo group plc and its
subsidiaries (the “group”) for the year ended
28 February 2022 which comprise the
Consolidated Statement of Comprehensive
Income, the Consolidated Statement
of Financial Position, 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”) (UK).
In our opinion, the group financial
statements:
• give a true and fair view of the state of the
group’s affairs as at 28 February 2022 and
of its loss for the year then ended;
• have been properly prepared in accordance
with IFRS (UK); and
• 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”) 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
s 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.
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 £6,000,000 (2021:
£6,200,000) for the group financial
statements. We deem the most important
metrics for users of the group’s financial
statements to be key profit and loss metrics.
While the group holds a significant amount of
gross assets, which support the commercial
activity of the business, the business is
primarily a trading entity which is advanced
in its life cycle. The users of the financial
statements will consider the result before tax
and exceptional costs to be important in their
decision-making, as well as revenue.
We have, therefore, used a blended rate of
0.5% of revenue and 5% of profit before
tax (and exceptional items) (2021: 5% of
profit before tax). The basis is different
from the prior year and is based on our
current understanding of the group: the
key factors being that the results were
distorted in the prior year as a result of the
COVID-19 pandemic. As the group returns
to a pre-pandemic trading environment,
which includes normalising returns rates, as
well as navigating higher distribution costs
and fluctuating foreign exchange rates due
to change in supplier location and currency
of billing and Brexit-related issues, revenue
growth continues to be seen while overall
profitability has declined. Therefore, a blend
between the two metrics is considered to
be more appropriate and sustainable in the
longer term.
While materiality for the financial statements
as a whole was set at £6.0 million, each
significant component of the group was
audited to an overall materiality ranging
between £5.9 million and £1.1 million, with
performance materiality set at 70% (2021:
70%). We applied the concept of materiality
both in planning and performing our audit,
and in evaluating the effect of misstatement.
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 the
inventory and returns provisions, valuation
of share-based payments, and recoverability
of intangible assets. 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 judgment, 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.
Key Audit Matter
How the scope of our audit responded to the key audit matter
Valuation of inventory (Note 16)
Inventory is carried at the lower of cost or net realisable value in
accordance with IAS 2. The provision in respect of inventory requires
an element of judgement. In the current year, this has been an area of
increased focus, and requiring an increased level of judgement, for the
following key reasons:
• Potential change to business model in terms of keeping some inventory
on hand for following season’s sales which has not previously been done;
• Changes in COVID19-related inputs to the provision following
consumer behaviours normalising;
• Changes in value and quantity of stock included within the ageing
element of the provision (> 4 months old), being the most significant
proportion of the inventory provision; and
• Additions of the new brands to the group (Debenhams & former
Arcadia brands) which have no previously established trends –
particularly in respect of Debenhams, which has a different product mix
and, therefore, needs additional consideration.
The value of inventory in the group as at 28 February 2022 is £279.4
million, after an impairment provision of £18.4 million.
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.
Returns provision (Note 20)
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
(including changes seen following the outbreak of the COVID-19
pandemic in FY2021, and trends towards consumer behaviour normalising
in FY2022), 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 increased judgement required
in this area in FY2022 due to the new brands (Debenhams, former
Arcadia brands), which have been integrated fully in to the group in the
year and had no well-established models from previous periods available
for analysis. In addition, returns rates have been inconsistent YOY due
to lower rates in FY2021 resulting from the COVID-19 pandemic, with
a return to higher (normalised) rates in FY2022. This will require careful
analysis and involves significant judgement and estimation.
The value of the returns provision in the group as at 28 February 2022 is
£32.0 million.
There is a risk that the returns provision is understated.
Our audit work in this area included the following:
• 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 from underlying data, using
our IT specialists to reproduce the relevant reports;
− Prior year lookback – review of utilisation of FY2021
provision in FY2022;
− Performing sensitivity analysis on the FY2022 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.
Our audit work in this area included the following:
• 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 management’s year-end returns provision calculation
and performed the following:
− Agreeing underlying data used to the accounting records
using our IT specialists to reproduce the relevant reports;
− Prior year lookback – review of utilisation of FY2021
provision in FY2022; review average PY monthly returns as
well as actual returns in March 2021 to assess reasonableness
of the provision model and its inputs;
− Post-year-end returns review – looked at actual returns in
March 2022;
− Performing sensitivity analysis on the calculation;
− Assessing completeness of the provision;
− Testing accuracy of inputs to the management’s model; and
− Testing the mathematical accuracy of the model.
100
101
ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLC FINANCIAL STATEMENTS FINANCIAL STATEMENTS INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
OF BOOHOO GROUP PLC CONTINUED
OTHER INFORMATION
RESPONSIBILITIES OF
DIRECTORS
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.
MATTERS ON WHICH WE ARE
REQUIRED TO REPORT BY
EXCEPTION
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
and returns.
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 financial statements, the
directors are responsible for assessing the
company’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
company or to cease operations, or have no
realistic alternative but to do so.
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
− Competition law
− Commercial law and consumer
protection legislation in relevant
jurisdictions where the group operates
• We designed our audit procedures to
ensure the audit team considered whether
there were any indications of non-
compliance by the company 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;
− Discussions with internal audit personnel
and review of key reports to the Audit
Committee;
− Review of internal and external reports
on key practices, including supply chain
and payroll reviews;
− Discussions with management and
the Audit Committee including
consideration of known or suspected
instances of non-compliance with laws
and regulations or fraud.
USE OF OUR REPORT
This report is made solely to the company’s
members, as a body, in accordance with our
engagement letter dated 11 April 2022. 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
3 May 2022
• 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.
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.
102
103
ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLC FINANCIAL STATEMENTS FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 28 FEBRUARY 2022
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 28 FEBRUARY 2022
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Amortisation of acquired intangibles
Other administrative expenses
Other income
Operating profit/(loss)
Finance income
Finance expense
Profit/(loss) before tax
Taxation
Profit/(loss) for the year
Profit/(loss) for the year attributable to:
Owners of the parent company
Non-controlling interests
Total other comprehensive income/(loss) for the year
(Gain)/loss reclassified to profit and loss during the year
Fair value (loss)/gain on cash flow hedges during the year3
Total comprehensive income/(loss) for the year
Total comprehensive income/(loss) attributable to:
Owners of the parent company
Non-controlling interests
Earnings/(loss) per share
Basic
Diluted
Note
2
2022 pre-
exceptional
items
£ million
1,982.8
(941.7)
1,041.1
2022
exceptional
items1
£ million
–
–
–
(488.1)
(507.9)
(12.8)
(495.1)
0.1
45.2
–
(1.6)
43.6
(18.6)
(28.4)
(7.4)
–
(7.4)
–
(35.8)
–
–
(35.8)
6.8
25.0
(29.0)
25.0
–
25.0
(14.8)
(0.7)
9.5
9.5
–
9.5
(29.0)
–
(29.0)
–
–
(29.0)
(29.0)
–
(29.0)
3
4
6
10
7
2022 total2
£ million
1,982.8
(941.7)
1,041.1
(516.5)
(515.3)
(12.8)
(502.5)
2021
£ million
1,745.3
(800.1)
945.2
(422.0)
(400.1)
(5.5)
(394.6)
0.1
9.4
–
(1.6)
7.8
(11.8)
(4.0)
(4.0)
–
(4.0)
(14.8)
(0.7)
(19.5)
(19.5)
–
(19.5)
(0.32)p
(0.32)p
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
1 See Note 1, exceptional items.
2 2022 total is the IFRS-compliant measure for the consolidated statement of comprehensive income.
3 Net fair value gains on cash flow hedges will be reclassified to profit or loss during the three years to 28 February 2025.
All activities relate to continuing operations. Notes 1 to 30 form part of these financial statements.
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
Total current liabilities
Non-current liabilities
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
Retained earnings
Total equity
Note
2022
£ million
2021
£ million
11
12
13
27
15
16
17
27
18
19
20
21
22
27
22
27
15
23
24
25
128.5
349.2
49.7
2.8
7.5
537.7
279.4
58.0
14.2
7.8
101.3
460.7
998.4
(296.6)
(53.5)
(100.0)
(7.9)
(3.7)
(461.7)
(44.0)
(3.1)
(25.3)
(534.1)
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)
464.3
472.5
12.7
31.9
922.8
10.2
(75.6)
(795.5)
357.8
464.3
12.6
31.9
916.2
25.7
(56.5)
(795.2)
337.8
472.5
Notes 1 to 30 form part of these financial statements.
These financial statements of boohoo group plc, registered number 114397, on pages 104 to 133 were approved by the board of directors on
3 May 2022 and were signed on its behalf by:
John Lyttle
DIRECTORS
Neil Catto
104
105
ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLC FINANCIAL STATEMENTS FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 28 FEBRUARY 2022
Share
capital
£ million
11.7
Shares to
be issued
£ million
–
Share
premium
£ million
608.4
Hedging
reserve
£ million
(4.5)
EBT
reserve
£ million
(17.1)
Other
reserves
£ million
(515.2)
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
Loss for the year
Other comprehensive income/
(expense):
Gain 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
Balance at 28 February 2022
–
–
–
–
0.6
–
–
0.3
–
12.6
–
–
–
–
0.1
–
–
–
12.7
–
–
–
–
–
–
–
31.9
–
31.9
–
–
–
–
–
–
–
–
–
–
–
169.8
–
–
138.0
–
916.2
–
–
–
–
6.6
–
–
–
31.9
–
922.8
–
9.0
21.2
30.2
–
–
–
–
–
25.7
–
(14.8)
(0.7)
(15.5)
–
–
–
–
10.2
Non-
controlling
interest
£ million
17.3
Retained
earnings
£ million
227.3
Total
equity
£ million
327.9
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
–
–
–
–
0.8
–
–
–
–
–
–
(39.4)
–
–
–
(281.3)
(20.4)
–
(131.5)
–
(56.5)
0.5
(795.2)
–
–
–
–
(19.1)
–
–
–
–
–
–
–
–
–
–
(75.6)
(0.3)
(795.5)
–
–
–
–
–
–
–
–
–
–
–
–
337.8
0.5
472.5
(4.0)
(4.0)
–
–
(4.0)
–
26.1
(14.8)
(0.7)
(19.5)
(12.4)
26.1
(2.1)
(2.1)
–
357.8
(0.3)
464.3
Cash flows from operating activities
(Loss)/profit for the year
Adjustments for:
Share-based payments charge
Depreciation charges and amortisation
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
Lease payments
Increase in/(repayment) of borrowings
Net cash generated from financing activities
(Decrease)/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
2022
£ million
2021
£ million
(4.0)
93.4
16
17
19
11
12
21
26.1
53.8
–
1.6
11.8
89.3
(134.5)
(17.7)
73.2
10.3
–
10.3
(32.0)
(229.5)
–
–
(261.5)
6.8
–
(19.2)
(0.9)
(10.2)
100.0
76.5
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
(174.7)
30.6
276.0
101.3
245.4
276.0
Notes 1 to 30 form part of these financial statements.
106
107
ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLC FINANCIAL STATEMENTS FINANCIAL STATEMENTS 1 ACCOUNTING POLICIES
General information
The 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
UK-adopted International Financial Reporting Standards (IFRS) 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 100.
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 and its variants continue to be effective. Trading during the year to February 2022 has shown that on-line sales have
some resilience during lockdowns in many countries. The group has cash resources and credit facilities sufficient to continue solvent trading in the
face of an unforeseen downturn in demand.
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 2021:
• Amendments to IFRS 3 business combinations
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 for accounting periods beginning after 1 March 2021 but have not been adopted by the UK and 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 16 property, plant and equipment
• Amendments to IAS 37 provisions, contingent liabilities and contingent assets
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 and excluding assets and liabilities acquired through acquisitions and held
at fair value. 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. If the cash flows
or profits from the use of the assets are negative over the expected useful life, the assets are impaired and charged to administration expenses.
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 and where assets are acquired through the
acquisition of an entity, they are accounted for at fair value. 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. Assets under
construction are held at cost until they are brought into use, whereupon depreciation is charged. 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.
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 are considered immaterial), 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.
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.
108
109
ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLC FINANCIAL STATEMENTS FINANCIAL STATEMENTSNOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
1 ACCOUNTING POLICIES CONTINUED
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.
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 2022 and 2021.
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 legal or constructive obligations, where it is probable
that an outflow of cash or other economic resource will be required to settle the provision. Certain provisions that require significant estimates and
judgements are discussed in the significant estimates and judgements section below.
Inventories
Inventories are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. Where provision
require estimates and judgement, these are discussed in the significant estimates and judgements section below. 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,
and commission income from marketplace sales, 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 and the proceeds
remitted to the company by payment service providers within a few days. Wholesale sales are paid in accordance with agreed credit terms with
business customers. Commission income on the sale of third-party products on marketplace websites is recognised when the order is placed and
paid by the customer. A provision for returns, based on historical customer return rates, is deducted from revenue and included in provisions within
trade and other payables. Returns provisions are discussed in the significant estimates and judgements section below.
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.
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 Group Personal Pension Schemes 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 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.
110
111
ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLC FINANCIAL STATEMENTS FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
1 ACCOUNTING POLICIES CONTINUED
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.
Significant estimates and judgements
The preparation of financial statements in conformity with IFRS, as adopted by the UK, 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 prior months’ historical returns and trends, including seasonal variations, on a country-by-
country basis and is allocated to the period in which the revenue is recorded. This is considered by management as the most appropriate method,
which is applied to every set of monthly management accounts and is constantly checked for accuracy and reliability. 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 +/- £3.6 million on reported revenue
and +/- £1.9 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 make 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, or from agreed settlements. 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. Where there are settlements involving class actions and compensation provided to beneficiaries through vouchers, the redemption rates are
based on the rates that have been observed in similar instances.
Inventory valuation
Inventory is carried at the lower of cost or net realisable value. Net realisable value is estimated by management on the basis of a number of factors:
the historic rate of sell through; the product size fragmentation; the continuing fashionability and likely continuing popularity with reference to
fashion and seasonal trends; and the volume of a particular style. 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 +/- £3.0 million 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.
Intangible assets – impairment testing
Acquired trademarks and customer list intangible assets are impaired if the projected cash flows over the expected lives are negative. Sensitivity
testing is performed on the cash flow calculations to verify that impairment is not required with a reasonable range of downside scenarios.
112
Exceptional items
Exceptional items are those of significant size and of a non-recurring nature that require disclosure in order that the underlying business
performance can be identified. The exceptional costs in these financial statements include: redundancy costs in temporary warehouse facilities
that were operated in the period between acquisition of the new brands and integration into new warehouses; the costs of moving inventory from
one warehouse to another; additional disruption costs associated with the installation of the automation in the Sheffield facility; legal expenses
associated with the acquisitions; irrecoverable sales taxes on customer returns from the EU during the period after Brexit and before simplified
procedures (IOSS) in the EU became operational; and additional costs of working during transitional administrative and warehousing operations
subsequent to the acquisitions of the brands in February 2021. The latter additional costs have been calculated as the difference between the
medium-term operating costs incurred in the new warehouse facilities and the set-up and initial operating costs. Such additional costs do require
estimation by management.
Exceptional costs
Selling and distribution costs
Sheffield automation disruption costs
Dual warehouse operating costs
Irrecoverable EU sales tax on returns pre IOSS
Redundancy costs
Administration expenses
Dual administrative costs during transition of new brands from sellers
Acquisition and restructuring costs
Redundancy costs
Total before tax
Tax
Total after tax
2 SEGMENTAL ANALYSIS
£ million
10.6
9.4
5.1
3.3
28.4
3.9
3.1
0.4
7.4
35.8
(6.8)
29.0
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 2022 is by geographic region. This is because the group is multi-brand and now focuses
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
Year ended 28 February 2022
UK
£ million
1,202.8
Rest of
Europe
£ million
219.2
USA
£ million
451.6
Rest of world
£ million
109.2
Total
£ million
1,982.8
(941.7)
1,041.1
(516.5)
(502.5)
(12.8)
0.1
9.4
–
(1.6)
7.8
(608.6)
594.2
(99.7)
119.5
(181.5)
270.1
(51.9)
57.3
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
113
ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLC FINANCIAL STATEMENTS FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
2 SEGMENTAL ANALYSIS CONTINUED
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
USA
£ million
435.1
Rest of world
£ million
120.4
Total
£ million
1,745.3
(107.1)
137.6
(174.5)
260.6
(54.3)
66.1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(800.1)
945.2
(422.0)
(394.6)
(5.5)
1.0
124.1
0.9
(0.3)
124.7
UK
£ million
945.1
(464.2)
480.9
–
–
–
–
–
–
–
–
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.
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 AUDITORS’ 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
2022
£ million
0.1
2021
£ million
1.0
2022
£ million
–
2021
£ million
0.9
(0.8)
(0.8)
(1.6)
(0.1)
(0.2)
(0.3)
2022
£ million
0.5
2021
£ million
0.4
–
0.5
–
0.4
6 PROFIT BEFORE TAX
Profit before tax is stated after charging:
Short-term operating lease rentals for buildings
Equity-settled share-based payment charges
Exceptional items (note 1)
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Amortisation of intangible assets
Amortisation of acquired intangible assets
7 EARNINGS PER SHARE
2022
£ million
0.6
26.1
35.8
22.0
10.0
9.0
12.8
2021
£ million
0.2
19.7
–
14.4
5.7
4.2
5.5
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, except when there is a loss, in which case the basic measure
is used.
Weighted average shares in issue for basic earnings per share
Dilutive share options
Weighted average shares in issue for diluted earnings per share
(Loss)/earnings (£ million)
Basic (loss)/earnings per share
Diluted (loss)/earnings per share
(Loss)/earnings (£ million)
Adjusting items:
Amortisation of intangible assets arising on acquisitions
Share-based payments charges
Share-based payment charge adjustment for non-controlling interests
Exceptional items
Adjustment for tax
Pro-forma non-controlling interest adjustment to 34%
Adjusted earnings
Adjusted basic earnings per share
Adjusted diluted earnings per share
2022
1,235.3
48.2
1,283.5
2021
1,220.7
31.4
1,252.1
(4.0)
(0.32)p
(0.32)p
(4.0)
12.8
26.1
–
35.8
(14.4)
–
56.3
4.56p
4.39p
90.7
7.43p
7.25p
90.7
5.5
19.7
(0.7)
–
(4.8)
(1.9)
108.5
8.89p
8.67p
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 and non-cash share-based payment charges.
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
Number of employees
2022
2,462
2,888
5,350
2021
1,767
1,275
3,042
114
115
ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLC FINANCIAL STATEMENTS FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
8 STAFF NUMBERS AND COSTS CONTINUED
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
9 DIRECTORS’ AND KEY MANAGEMENT COMPENSATION
Short-term employee benefits
Post-employment benefits
Equity-settled share-based payment charges
2022
£ million
174.8
14.3
3.8
26.1
219.0
2022
£ million
25.3
0.3
3.4
29.0
2021
£ million
106.6
9.2
2.5
19.7
138.0
2021
£ million
17.6
0.2
2.7
20.5
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 89.
10 TAXATION
Analysis of charge in year
Current tax on income for the year
Adjustments in respect of prior year taxes
Deferred taxation (note 15)
Tax on profit
2022
£ million
2021
£ million
(1.9)
(0.1)
13.8
11.8
27.0
1.1
3.2
31.3
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 (2021: 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% (2021: 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
R&D tax credits
Depreciation on ineligible assets
Tax on profit
Tax recognised in the statement of changes in equity
2022
£ million
7.8
1.5
2021
£ million
124.7
23.7
3.5
5.9
(0.1)
0.5
0.1
0.4
11.8
5.8
-
1.1
0.2
-
0.5
31.3
Deferred tax debit on movement in tax base of share options
(3.0)
(0.2)
No current tax was recognised in other comprehensive income (2021: £nil).
11 INTANGIBLE ASSETS
Cost
Balance at 29 February 2020
Additions
Disposals
Balance at 28 February 2021
Additions
Disposals
Balance at 28 February 2022
Accumulated amortisation
Balance at 29 February 2020
Amortisation for year
Disposals
Balance at 28 February 2021
Amortisation for year
Disposals
Balance at 28 February 2022
Net book value
At 29 February 2020
At 28 February 2021
At 28 February 2022
Patents and
licences
£ million
Trademarks
£ million
Customer lists
£ million
Computer
software
£ million
Total
£ million
0.6
–
–
0.6
–
–
0.6
0.4
0.1
–
0.5
0.1
–
0.6
0.2
0.1
–
44.2
71.4
–
115.6
–
–
115.6
8.6
5.3
–
13.9
12.1
–
26.0
35.6
101.7
89.6
6.1
2.0
–
8.1
–
–
8.1
5.9
0.2
–
6.1
0.7
–
6.8
0.2
2.0
1.3
14.6
12.3
(3.4)
23.5
32.0
(2.3)
53.2
8.3
4.1
(3.4)
9.0
8.9
(2.3)
15.6
6.3
14.5
37.6
65.5
85.7
(3.4)
147.8
32.0
(2.3)
177.5
23.2
9.7
(3.4)
29.5
21.8
(2.3)
49.0
42.3
118.3
128.5
Within the statement of comprehensive income, amortisation of acquired intangible assets (trademarks and customer lists) of £12.8 million (2021:
£5.5 million) is shown separately. The amount of amortisation of the other intangible assets included in distribution costs is £0.2 million (2021: £0.2
million) and in administrative expenses is £8.8 million (2021: £4.1 million).
The group tests the carrying amount of trademarks and customer lists annually for impairment or more frequently if there are indications that
their carrying value might be impaired. The carrying amounts of other intangible assets are reviewed for impairment if there is an indication of
impairment.
Impairment is calculated by comparing the carrying amounts to the value in use derived from discounted cash flow projections for each cash
generating unit (“CGU”) to which the intangible assets are allocated. A CGU is deemed to be an individual brand.
Value in use calculations are based on ten-year management forecasts with a terminal growth rate applied thereafter, representing management’s
estimate of the long-term growth rate of the sector served by the CGUs The growth rate does not exceed the long-term average growth rate for
the business in which the CGU operates.
The key assumptions used in the value-in-use calculations are as follows:
Sales growth and forecast contribution margin
This is based on past performance and management’s expectations of market development over the ten-year forecast period plus perpetuity.
Other operating costs
These are the fixed costs of the CGU, which do not vary significantly with sales volumes or prices. Management forecasts these costs based on the
current structure of the business, adjusting for inflationary increases, and these do not reflect any future restructurings or cost-saving measures.
Long-term growth rate 2%
This growth rate is based on a prudent assessment of past experience and future estimations of market expectations.
116
117
ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLC FINANCIAL STATEMENTS FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
11 INTANGIBLE ASSETS CONTINUED
Discount rate 8.9%
The pre-tax discount rate applied to the cash flow forecasts for the CGU is derived from the estimated pre-tax weighted average cost of capital for
the CGU.
Sensitivity to changes in assumptions
There is sufficient headroom for each of the CGUs, such that management believes no reasonable change in any of the above assumptions would
cause the carrying value of the intangible asset to exceed its recoverable amount. If the long-term growth rate was reduced to zero, there would still
be sufficient headroom. If the discount rate was increased to 12%, there would still be sufficient headroom.
12 PROPERTY, PLANT AND EQUIPMENT
Cost
Balance at 29 February 2020
Additions
Exchange differences
Disposals
Balance at 28 February 2021
Additions
Exchange differences
Disposals
Balance at 28 February 2022
Accumulated depreciation
Balance at 29 February 2020
Depreciation charge for the year
Disposals
Balance at 28 February 2021
Depreciation charge for the year
Disposals
Balance at 28 February 2022
Net book value
At 29 February 2020
At 28 February 2021
At 28 February 2022
Short
leasehold
alterations
£ million
Fixtures and
fittings
£ million
Computer
equipment
£ million
Motor
vehicles
£ million
Land &
buildings
£ million
Total
£ million
9.1
10.2
–
–
19.3
7.3
–
(0.1)
26.5
2.7
2.0
–
4.7
2.1
(0.1)
6.7
6.4
14.6
19.8
86.9
16.1
–
(0.6)
102.4
129.0
–
(0.9)
230.5
16.0
9.1
(0.6)
24.5
14.4
(0.9)
38.0
70.9
77.9
192.5
6.3
3.6
–
(0.8)
9.1
4.4
–
(1.2)
12.3
3.5
2.1
(0.8)
4.8
2.9
(1.2)
6.5
2.8
4.3
5.8
0.9
0.1
–
–
1.0
0.2
–
(0.2)
1.0
0.3
0.3
–
0.6
0.2
(0.2)
0.6
0.6
0.4
0.4
40.8
7.0
(0.2)
–
47.6
88.6
0.1
–
136.3
2.3
0.9
–
3.2
2.4
–
5.6
144.0
37.0
(0.2)
(1.4)
179.4
229.5
0.1
(2.4)
406.6
24.8
14.4
(1.4)
37.8
22.0
(2.4)
57.4
38.5
44.4
130.7
119.2
141.6
349.2
The amounts of depreciation included in the statement of comprehensive income in distribution costs is £13.1 million (2021: £8.7 million) and in
administrative expenses is £8.9 million (2021: £5.7 million).
13 RIGHT-OF-USE ASSETS
Cost
Balance at 29 February 2020
Additions
Balance at 28 February 2021
Additions
Balance at 28 February 2022
Accumulated depreciation
Balance at 29 February 2020
Depreciation for year
Balance at 28 February 2021
Depreciation for year
Balance at 28 February 2022
Net book value
At 29 February 2020
At 28 February 2021
At 28 February 2022
Short
leasehold
properties
£ million
27.1
7.8
34.9
43.0
77.9
12.5
5.7
18.2
10.0
28.2
14.6
16.7
49.7
118
119
ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLC FINANCIAL STATEMENTS FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
14 INVESTMENTS
The subsidiaries held and consolidated in these financial statements are set out below:
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
Boohoo Property Holdings Limited
Boohoo Property Holdings 2 Limited
Boohoo Turkey
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
Holding
UK
49-51 Dale St, Manchester
Dormant
Dormant
Dormant
Dormant
Dormant
Marketing
office
Marketing
office
Admin office
Marketing
office
Trading
Marketing
office
Dormant
Property
Property
Sourcing
office
Trading
Trading
Trading
Trading
Trading
Trading
Trading
Marketing
office
Trading
Dormant
Marketing
office
Trading
Marketing
office
Trading
Trading
Trading
UK
UK
UK
UK
UK
France
Germany
Italy
Australia
UK
USA
UK
Jersey
UK
Turkey
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
44 Esplanade, St Helier, Jersey
49-51 Dale St, Manchester
20 Bahcelievler, Istanbul 34197
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
828-838 Zhangyang Rd., Shanghai, China
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%
100%
100%
100%
15 DEFERRED TAX
Assets
Asset at 29 February 2020
Recognised in statement of comprehensive income
Debit in equity
Asset at 28 February 2021
Recognised in statement of comprehensive income
Debit in equity
Asset at 28 February 2022
Liabilities
Liability at 29 February 2020
Recognised in statement of comprehensive income
Liability at 28 February 2021
Recognised in statement of comprehensive income
Debit in equity
Liability at 28 February 2022
Depreciation
in excess of
capital
allowances
£ million
0.3
0.3
–
0.6
(0.6)
–
–
Capital
allowances
in excess of
depreciation
£ million
(2.4)
(0.8)
(3.2)
(19.3)
–
(22.5)
Share-based
payments
£ million
5.7
(2.9)
(0.2)
2.6
(0.1)
(2.5)
–
Share-based
payments
£ million
–
–
–
(1.5)
(0.5)
(2.0)
Unused
tax losses
£ million
–
–
–
–
7.5
–
7.5
Business
combinations
£ million
(1.2)
0.2
(1.0)
0.2
–
(0.8)
Total
£ million
6.0
(2.6)
(0.2)
3.2
6.8
(2.5)
7.5
Total
£ million
(3.6)
(0.6)
(4.2)
(20.6)
(0.5)
(25.3)
Recognition of the deferred tax assets is based upon the expected generation of future taxable profits. The deferred tax liability will reverse in more
than one year’s time as the intangible assets are amortised. Deferred tax is calculated at 25% as enacted from April 2023 by the UK Government.
16 INVENTORIES
Finished goods
Finished goods – returns
2022
£ million
262.4
17.0
279.4
2021
£ million
133.5
11.4
144.9
The value of inventories included within cost of sales for the year was £939.1 million (2021: £791.7 million). The finished goods returns is the
estimated value of stock at customers but expected to be returned. An impairment provision of £18.4 million (2021: £15.8 million) was charged to
the statement of comprehensive income. There were no write-backs of prior period provisions during the year.
120
121
ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLC FINANCIAL STATEMENTS FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
17 TRADE AND OTHER RECEIVABLES
19 TRADE AND OTHER PAYABLES
Trade receivables
Prepayments
Accrued income
Taxes and social security receivable
2022
£ million
34.6
21.3
2.1
–
58.0
2021
£ million
18.3
10.4
0.3
11.6
40.6
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
2022
£ million
97.5
6.6
152.4
16.7
23.4
296.6
2021
£ million
47.9
6.4
144.0
10.2
14.4
222.9
Age of trade receivable
60–90 days past due
91–120 days past due
Over 121 days past due
2022
%
1
5
90
2021
%
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:
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
2022
£ million
25.1
(0.1)
2021
£ million
18.3
(2.4)
10.7
(2.4)
1.3
–
37.1
(2.5)
34.6
3.6
(1.4)
0.2
–
22.1
(3.8)
18.3
2022
£ million
276.0
(174.5)
(0.2)
101.3
2021
£ million
245.4
30.8
(0.2)
276.0
There is no material credit risk associated with the cash at bank due to the healthy credit ratings of the banks of BBB+ and higher.
Provision at 28 February 2021
Movements in provision charged/(credited) to income statement:
Prior year provision utilised
Increase in provision in current year
Provision at 28 February 2022
Dilapidations
£ million
5.9
Returns
£ million
24.2
Claims
£ million
23.4
Total
£ million
53.5
(2.2)
–
3.7
(24.2)
32.0
32.0
(5.6)
–
17.8
(32.0)
32.0
53.5
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.
Terms and debt repayment schedule
Revolving credit facility
Movement in interest-bearing loans and borrowings
Nominal
interest
rate
SONIA CIA
Currency
GB£
Year of
maturity
2022
Opening balance
Increase of borrowings
Interest accrued
Interest paid
Capital paid
Closing balance
2022
£ million
100.0
2022
£ million
–
100.0
0.8
(0.8)
–
100.0
2021
£ million
–
2021
£ million
4.8
–
0.1
(0.1)
(4.8)
–
A new revolving credit facility of £325 million with a three-year term was agreed after the year-end in March 2022 to support the group’s liquidity
requirements and provide a greater degree of headroom.
122
123
ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLC FINANCIAL STATEMENTS FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
21 INTEREST-BEARING LOANS AND BORROWINGS CONTINUED
Reconciliation of movements in cash flows from financing activities to movements in liabilities:
Equity
Leases
Bank borrowings
22 LEASE LIABILITIES
Minimum lease payments due
28 February 2022
Lease payments
Finance charges
Net present value
Current lease liability
Non-current lease liability
Total
Movement in lease liabilities:
Opening balance
Interest accrued
Cash flow lease payments
Additions
Closing balance
23 SHARE CAPITAL
Balance
28 February
2021
£ million
472.5
18.3
–
490.8
Cash
flow from
financing
activities
£ million
(12.4)
(10.2)
99.1
76.5
Statement of
comprehensive
income
£ million
(19.5)
0.8
0.9
(17.8)
Movement
in retained
earnings and
other reserves
£ million
23.7
–
–
23.7
Balance at
28 February
2022
£ million
464.3
51.9
100.0
616.2
Additions
£ million
–
43.0
–
43.0
Within 1 year
£ million
1-2 years
£ million
2-5 years
£ million
5-10 years
£ million
8.8
(0.9)
7.9
5.9
(0.7)
5.2
7.7
(2.0)
5.7
13.1
(2.5)
10.6
More than
10 years
£ million
24.4
(1.9)
22.5
2022
£ million
7.9
44.0
51.9
2022
£ million
18.3
0.8
(10.2)
43.0
51.9
Total
£ million
59.9
(8.0)
51.9
2021
£ million
6.7
11.6
18.3
2021
£ million
16.2
0.2
(5.9)
7.8
18.3
2022
£ million
12.7
2021
£ million
12.6
1,267,634,949 authorised and fully paid ordinary shares of 1p each (2021: 1,263,255,457)
During the year, a total of 4.4 million shares were issued under the share incentive plans (2021: 5.2 million). On 21 February 2022, 63,761 (2021:
14,276) 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 (2021: £nil).
24 SHARES TO BE ISSUED
2022
£ million
31.9
2021
£ million
31.9
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.
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
2022
£ million
0.2
0.1
(515.3)
(281.3)
0.8
(795.5)
2021
£ million
0.5
0.1
(515.3)
(281.3)
0.8
(795.2)
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
Related party
Amounts included in the
statement of financial position
Lease liabilities
Kamani Commercial Property Limited boohoo.com UK Limited
Common directors and shareholders
Kamani Commercial Property Limited PrettyLittleThing.com Limited Common directors and shareholders
Nature of relationship
Amounts included in the statement
of comprehensive income
Administrative expenses
The Pinstripe Property Investment Co.
Limited
Pinstripe Hong Kong Limited
boohoo.com UK Limited
Common directors and shareholders
boohoo.com UK Limited
Common directors and shareholders
Depreciation – right-of-use assets
Kamani Commercial Property Limited boohoo.com UK Limited
Common directors and shareholders
Kamani Commercial Property Limited PrettyLittleThing.com Limited Common directors and shareholders
2022
£ million
2021
£ million
1.4
0.5
0.1
0.1
0.7
0.2
2.2
–
0.1
0.1
0.7
0.1
Amounts included in equity
Umar Kamani
boohoo group plc
Umar is the son of Mahmud Kamani,
Chairman of boohoo group plc
–
301.7
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.
124
125
ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLC FINANCIAL STATEMENTS FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
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
2022
1.34182
1.37225
1.19563
1.17309
1.84808
1.84875
2021
1.39269
1.29532
1.15361
1.11678
1.80693
1.83878
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 receivables
Accrued income
Financial liabilities
Cash flow hedges
Trade payables
Other creditors
Accruals
Provisions
Interest-bearing loans and borrowings
Lease liabilities
2022
£ million
2021
£ million
101.3
17.0
34.6
2.1
155.0
276.0
30.2
18.3
0.3
324.8
2022
£ million
2021
£ million
6.8
97.5
6.6
152.4
53.5
100.0
51.9
468.7
4.5
47.9
6.4
144.0
53.5
–
18.3
274.6
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”:
Hierarchy level
Inputs
Financial instruments
Valuation methodology
Level 2
Derivative financial instruments
– cash flow hedges
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)
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
(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
2022, the group had capital of £465.6 million (2021: £748.5 million), comprising equity of £464.3 million (2021: £472.5 million) and net cash of
£1.3 million (2021: £276.0 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 2022
was £17.0 million (2021: £30.2 million) and within financial liabilities was £6.8 million (2021: £4.5 million). The non-current element of the financial
assets is £2.8 million (2021: £13.1 million) and of financial liabilities is £3.1 million (2021: £1.9 million). Cash flows related to these contracts will
occur during the three years to 28 February 2025 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 loss of £0.7 million (2021: £21.2 million gain) and the amount
reclassified from other comprehensive income to profit and loss in revenue during the year is a gain of £14.8 million (2021: £9.0 million loss).
126
127
ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLC FINANCIAL STATEMENTS FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
27 FINANCIAL INSTRUMENTS CONTINUED
Maturity of forward currency hedging instruments - notional amount £ million
Currency
USD
EUR
AUD
CAD
SEK
NZD
DKK
1-6
months
97.2
71.4
26.1
4.7
4.5
3.1
2.1
209.1
7-12
months
88.6
71.7
21.6
4.2
3.0
2.2
0.8
192.1
Average rate of forward currency hedging instruments - GBP: currency
7-12
months
1.3318
1.1199
1.8194
1.7381
11.6667
2.0000
7.8750
Currency
USD
EUR
AUD
CAD
SEK
NZD
DKK
1-6
months
1.3138
1.1261
1.8621
1.7447
11.7778
2.0323
8.2381
13-18
months
59.3
44.9
14.0
2.2
1.7
1.4
0.2
123.7
13-18
months
1.3828
1.1381
1.8214
1.7727
11.7647
2.0000
8.0000
19-24 months
38.5
25.3
7.6
1.5
0.7
0.9
0.2
74.7
More than
2 years
9.8
8.7
5.3
–
0.4
0.7
0.1
25.0
19-24
months
1.3766
1.1462
1.8421
1.7333
12.8571
2.0000
10.0000
More than 2
years
1.3265
1.1494
1.8868
–
12.5000
2.1429
10.0000
Total
293.4
222.0
74.6
12.6
10.3
8.3
3.4
624.6
Average
1.3419
1.1297
1.8418
1.7460
11.8447
2.0241
8.2941
28 SHARE-BASED PAYMENTS
Summary of movements in awards
Number of shares
Outstanding 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
Granted during the year
Lapsed during the year
Exercised during the year
Outstanding at 28 February 2022
Exercisable at 28 February 2022
LTIP
4,846,929
2,541,635
(435,406)
(583,942)
6,369,216
716,151
SIP
4,495,980
3,136,280
(596,247)
(324,943)
6,711,070
478,580
SAYE
4,559,927
1,970,215
(645,931)
(1,140,645)
4,743,566
345,078
Total
38,054,298
22,385,954
(4,967,403)
(4,837,031)
50,635,818
4,348,680
Weighted
average
exercise price
150.52
201.87
170.49
137.27
171.50
98.77
2,411,240
(416,870)
(652,329)
7,711,257
1,142,928
15,441,664
(494,182)
(528,546)
21,130,006
1,361,328
6,058,423
(2,407,895)
(306,225)
8,087,869
796,332
41,068,933
(6,716,966)
(4,495,859)
80,491,926
9,316,986
143.78
212.26
125.51
156.75
134.09
ESOP
24,151,462
14,737,824
(3,289,819)
(2,787,501)
32,811,966
2,808,871
17,157,606
(3,398,019)
(3,008,759)
43,562,794
6,016,398
The group recognised a total expense of £26.1 million during the year (2021: £19.7 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 2021 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
13/07/21
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
Granted
during the
year
no. of shares
–
–
–
–
–
–
–
–
17,157,606
17,157,606
Lapsed during
the year
no. of shares
–
–
–
(2,638)
(213,961)
(1,204)
(992,649)
(1,197,567)
(990,000)
(3,398,019)
Exercised
during the
year
no. of shares
(28,480)
(219,300)
(167,370)
(368,987)
(2,200,966)
–
(23,656)
–
–
28 February
2022
no. of shares
478,510
233,636
261,507
1,048,443
3,994,302
79,154
7,934,379
13,365,257
16,167,606
(3,008,759) 43,562,794
Exercise price
pence
50.00
25.75
57.75
244.50
201.95
266.95
219.65
272.95
289.45
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
13/07/24 – 13/07/31
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
11
478,510
3
33.33%
10
3
0.976%
0%
26%
78%
11.93
30/04/19
245.70
266.95
11
79,154
3
43.14%
10
3.5
0.787%
0%
35%
85%
72.39
22/05/15
25.75
25.75
13
233,636
3
36.33%
10
3
0.966%
0%
16%
100%
6.64
23/07/19
219.65
219.65
317
7,934,379
3
41.85%
10
3.5
0.434%
0%
33%
100%
68.06
09/06/16
57.75
57.75
19
261,507
3
36.75%
10
3
0.523%
0%
30%
100%
14.76
03/11/20
272.95
272.95
478
13,365,257
3
36.56%
10
3.5
0.075%
0%
34%
100%
73.31
13/06/17
244.50
244.50
55
1,048,443
3
40.85%
10
3.5
0.192%
0%
30%
100%
73.35
13/07/21
289.45
289.45
629
16,167,606
3
36.56%
10
3.5
0.175%
0%
34%
100%
78.11
28/06/18
201.95
201.95
181
3,994,302
3
44.17%
10
3.5
0.723%
0%
28%
100%
66.47
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.
128
129
ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLC FINANCIAL STATEMENTS FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
28 SHARE-BASED PAYMENTS CONTINUED
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. The vesting conditions are disclosed in the Directors Remuneration Report.
Date of grant
30/06/16
13/06/17
28/06/18
03/10/18
11/12/19
03/11/20
06/07/21
15/07/21
28 February
2021
no. of shares
434,971
281,180
1,019,058
136,665
1,955,707
2,541,635
–
–
6,369,216
Granted
during the
year
no. of shares
–
–
–
–
–
–
189,073
2,222,167
2,411,240
Lapsed during
the year
no. of shares
–
(48,202)
(113,587)
(10,251)
(171,798)
(73,032)
–
–
(416,870)
Exercised
during the
year
no. of shares
(20,000)
(42,846)
(461,913)
(32,147)
–
–
(95,423)
–
(652,329)
28 February
2022
no. of shares
414,971
190,132
443,558
94,267
1,783,909
2,468,603
93,650
2,222,167
7,711,257
Exercise price
pence
1.00
1.00
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
03/11/23 – 03/11/30
06/07/24 – 06/07/31
13/07/24 – 13/07/31
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
414,971
3
37.06%
10
3
0.173%
0%
42%
100%
56.26
13/06/17
244.50
1.00
3
190,132
3
40.85%
10
3.5
0.192%
0%
32%
28/06/18
201.95
1.00
6
443,558
3
44.17%
10
3.5
0.723%
0%
26%
03/10/18
239.00
1.00
2
94,267
3
43.37%
10
3.5
0.869%
0%
27%
30/04/19
245.70
1.00
20
1,783,909
3
43.14%
10
3.5
0.787%
03/11/20
272.95
1.00
29
2,468,603
3
36.56%
10
3.5
0.075%
06/07/21
317.10
1.00
1
93,650
3
36.56%
10
3.5
0.142%
13/07/21
289.45
1.00
36
2,222,167
3
36.56%
10
3.5
0.175%
0%
35%
0%
35%
0%
35%
0%
35%
67%
243.51
75%
200.97
75%
238.03
85%
244.73
75%
271.95
50%
316.10
50%
288.46
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
13/01/22
28 February
2021
no. of shares
142,933
5,479
330,168
1,451,086
1,645,124
3,136,280
–
6,711,070
Granted
during the
year
no. of shares
–
–
–
–
–
–
15,441,664
15,441,664
Lapsed during
the year
no. of shares
–
–
–
(85,358)
(155,584)
(253,240)
–
(494,182)
Exercised
during the
year
no. of shares
(45,608)
–
(95,191)
(342,181)
(21,216)
(24,350)
–
(528,546)
28 February
2022
no. of shares
97,325
5,479
234,977
1,023,547
1,468,324
2,858,690
15,441,664
21,130,006
Exercise price
Exercise period
pence
nil
14/03/17 – 13/03/24
nil 02/04/17 – 01/04/24
19/06/18 – 18/06/25
nil
nil
27/09/21 – 27/09/28
nil 25/07/22 – 25/07/29
18/02/24 – 18/02/31
nil
13/01/25 – 13/01/32
nil
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
0.00
18
97,325
3
33.33%
10
3
0.976%
02/04/14
54.75
0.00
1
5,479
3
33.20%
10
3
1.143%
19/06/15
28.00
0.00
73
234,977
3
35.89%
10
3
0.979%
27/09/18
213.10
0.00
1096
1,023,547
3
42.75%
10
3.5
0.883%
18/02/21
369.40
0.00
2935
25/07/19
226.00
0.00
1661
13/01/22
111.55
0.00
4,924
1,468,324 2,858,690 15,441,664
3
36.56%
10
3.5
0.896%
3
36.56%
10
3.5
0.004%
3
41.77%
10
3.5
0.462%
0%
0%
0%
0%
0%
0%
0%
44%
100%
50.00
37%
100%
54.75
31%
100%
28.00
29%
100%
213.10
34%
100%
226.00
34%
100%
369.40
35%
100%
111.55
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
06/11/17
31/10/18
30/10/19
03/11/20
01/12/21
28 February
2020
no. of shares
345,078
949,459
1,529,932
1,919,097
–
4,743,566
Granted during
the year
no. of shares
–
–
–
–
6,058,423
6,058,423
Lapsed during
the year
no. of shares
(28,182)
(166,333)
(624,508)
(1,146,750)
(442,122)
(2,407,895)
Exercised
during the year
no. of shares
(303,690)
–
(2,535)
–
–
(306,225)
28 February
2022
no. of shares
13,206
783,126
902,889
772,347
5,616,301
8,087,869
Exercise price
pence
169.00
189.88
216.92
268.96
154.58
Exercise period
06/11/20 – 06/05/21
31/10/21 – 30/04/22
30/10/22 – 30/04/23
03/11/23 – 03/05/24
01/12/24 – 01/06/25
130
131
ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLC FINANCIAL STATEMENTS FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS
CONTINUED
28 SHARE-BASED PAYMENTS CONTINUED
29 CAPITAL COMMITMENTS
The SAYE options were valued using a Black-Scholes model. The inputs into the model were as follows:
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
2022
£ million
21.8
2021
£ million
5.5
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.
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)
06/11/17
209.25
169.00
3
13,206
3
41.67%
3.5
3.0
0.513%
0.0%
44%
100%
76.86
31/10/18
212.90
189.88
307
783,126
3
43.36%
3.5
3.0
0.760%
0.0%
45%
100%
72.90
30/10/19
265.00
216.92
369
902,889
3
40.39%
3.5
3.0
0.463%
0.0%
59%
100%
93.94
03/11/20
272.95
268.96
407
772,347
3
36.56%
3.5
3.0
0.075%
0.0%
72%
100%
69.56
01/12/21
165.20
154.58
1299
5,616,301
3
36.56%
3.5
3.0
0.592%
0.0%
50%
100%
46.39
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 21 Three 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 in 2021 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.
132
133
ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLC FINANCIAL STATEMENTS FINANCIAL STATEMENTS FIVE-YEAR GROUP STATEMENT OF
COMPREHENSIVE INCOME – UNAUDITED
FIVE-YEAR GROUP STATEMENT OF
FINANCIAL POSITION – UNAUDITED
Revenue
Cost of sales
Gross profit
Distribution costs
Administrative expenses
Other income
Operating profit
Net finance income/(expense)
Profit before tax
2018
£ million
579.8
(273.4)
306.4
(126.8)
(137.1)
0.2
42.7
0.6
43.3
2019
£ million
856.9
(387.9)
469.0
(207.1)
(203.4)
0.2
58.7
1.2
59.9
2020
£ million
1,234.9
(568.6)
666.3
(278,3)
(297.3)
0.2
90.9
1.3
92.2
2021
£ million
1,745.3
(800.1)
945.2
(422.0)
(400.1)
1.0
124.1
0.6
124.7
Taxation
(7.3)
(12.4)
(19.3)
(31.3)
Profit/(loss) for the year
36.0
47.5
72.9
93.4
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/(loss) for the year
Total comprehensive income attributable to :
Owners of the parent
Non-controlling interests
Total comprehensive income/(loss)
Earnings per share
Basic
Diluted
–
19.5
55.5
54.6
0.9
55.5
–
(0.1)
47.4
43.5
3.9
47.4
(0.5)
(12.3)
60.1
50.9
9.2
60.1
3.09p
3.01p
3.78p
3.71p
5.48p
5.35p
–
30.2
123.6
120.9
2.7
123.6
7.43p
7.25p
2022
£ million
1,982.8
(941.7)
1,041.1
(516.5)
(515.3)
0.1
9.4
(1.6)
7.8
(11.8)
(4.0)
–
(15.5)
(19.5)
(19.5)
–
(19.5)
(0.32)p
(0.32)p
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
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
2022
£ million
537.7
460.7
998.4
464.3
–
461.7
72.4
998.4
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
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
2022
£ million
10.3
(261.5)
76.5
(174.7)
276.0
101.3
134
135
ANNUAL REPORT AND ACCOUNTS 2022BOOHOO GROUP PLC FINANCIAL STATEMENTS FINANCIAL STATEMENTS SHAREHOLDER INFORMATION
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
10 Old Burlington Street
London
W1S 3AG
JOINT BROKER
Jefferies International
100 Bishopsgate
London
EC2N 4JL
INDEPENDENT AUDITORS
PKF Littlejohn LLP
15 Westferry Circus
London
E14 4HD
SOLICITORS
Addelshaw Goddard LLP
One St Peter's Square
Manchester
M2 3DE
Eversheds Sutherland
6 Stanley St
Salford
M3 5GX
Ogier
Ogier House
The Esplanade
St Helier
Jersey
JE4 9WG
Pannone Corporate LLP
378–380 Deansgate
Manchester
M3 4LY
TLT LLP
3 Hardman Square
Manchester
M3 3EB
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
136
BOOHOO GROUP PLC FINANCIAL STATEMENTS