RETAIL
IS OUR
WORLD.
Briscoe Group Limited
Annual Report 2023
04
At a glance
06
Board of Directors’ Review
08
Managing Director’s Review
12
Financial Performance
14
Sustainability
20
Strategic Plan
24
Consolidated Financial Statements
65
Independent Auditor’s Report
70
Corporate Governance Statement
85
General Disclosures
88
Top 20 Shareholders
89
Directory
Contents
3
Briscoe Group Limited Annual Report 2023
At a glance
We are a leading New Zealand retailer
with a blend of bricks-and-mortar and
online shopping channels, offering
our customers the best range of
international brands at great prices.
47
BRISCOES
HOMEWARE STORES
43
REBEL SPORT
STORES
Includes Rebel Sport Ashburton
01
DISTRIBUTION
CENTRE
01
AUCKLAND
BASED SUPPORT
CENTRE
Briscoe Group Limited Annual Report 2023 | At a glance
4
More than 2,300
Team Members
Over 500,000 units
sold per week
$1.05 million
raised for
Cure Kids
10 stores fully
refurbished
Over 53.6 million
website visits
Customer
database now
over 1.63 million
Briscoe Group Limited Annual Report 2023 | At a glance
5
Board of
Directors’
Review
Briscoe Group’s long-term programme of strategic and
operational development continued during the year,
enabling further growth at a time when the retail sector was
tested by a range of challenges arising from the Covid-19
pandemic and declining economic conditions.
Year-on-year developments occur within a larger evolution
of the retail sector, from traditional bricks-and-mortar
shopping to a broader and more diverse range of platforms
that create options for the customer to have the shopping
experience that they choose.
Our ability to adapt quickly to the ever-changing retail
environment and continue to differentiate from other
retailers has again been a critical factor in results for the
latest year.
The three-year strategy programme discussed in earlier
communications has played an important role in building
a range of attributes that support this ability. This work has
been focused in three key areas – enhancing customer
experience, improving our supply chain and developing
new revenue streams.
Many initiatives arising from this programme are now
embedded as ‘business as usual,’ contributing to sales, gross
profit and the Group’s bottom line.
Our long-running programme of store refurbishment
continued, with 10 projects completed in the latest
year; and we continued to invest in development of our
online trading platform, with improvements at both the
customer-facing end and the administration and fulfilment
focused back-end. Refurbishment of stores and website
enhancements will continue to drive the business forward.
The Group’s ability to absorb short-term pressures and
produce another record year for sales and earnings speaks
well of the continued agility and performance of our senior
leadership team, and of teams at all levels and in all parts of
our operations.
The wellbeing of our team members continues to be our
highest priority. The pressures that come with operating
in times of change and uncertainty such as we have all
experienced in recent years must be acknowledged and
managed. The Group has programmes and initiatives in
place to ensure the safety and security of team members,
along with opportunities for education and training designed
to help them to reach career and life goals.
We wish to record the Board’s appreciation of the role
played by all team members across the Group in achieving
the latest year’s results.
Dividend
The directors resolved to pay a final dividend of 16.0 cents
per share (cps). The dividend was fully imputed and, when
added to the interim dividend of 12.0cps, brings the total
dividend for the year to 28.0cps. The share register closed
to determine entitlements to the final dividend at 5pm on 23
March 2023 and was paid on 30 March 2023.
We were delighted to be in a position to increase both the
interim and final dividends for the year.
Corporate Governance
Briscoe Group is committed to the highest standards of
governance and management, based on implementing
best practice structures and policies. It has always been a
strong feature of the Company that the Board and Executive
team work effectively together and are aligned around the
business objectives.
The Board recently made its annual determination in respect
of independence of directors. It was determined that all
directors other than the Managing Director continue to be
independent. As part of that determination, the tenure of the
Chair was considered carefully.
While the Board acknowledged that the tenure was
significant, it agreed unanimously that it did not compromise
in any way the Chair’s ability to bring an independent view,
act in the best interests of the issuer and represent the best
interests of all shareholders.
Briscoe Group Limited Annual Report 2023 | Board of Directors’ Review
6
“Our ability to adapt quickly to the ever-changing retail environment and
continue to differentiate from other retailers has again been a critical
factor in results for the latest year.”
7
Briscoe Group Limited Annual Report 2023
As noted previously, the Group is committed to understand
and deliver on its obligations to stakeholders in regard to
Environmental, Social and Governance practices, which
the Company has embraced as part of its overall business
Sustainability programme. Significant progress has been
made during the year across a broad spectrum of initiatives
established as part of this Sustainability framework.
More detailed information on this work is in the
Sustainability section of this Annual Report (pages 14 -19).
Equity-Based Remuneration Scheme
The Board is of the view that all shareholders benefit from
the participation of key senior executives in long-term,
appropriately-priced, equity-based remuneration that
crystallises only on delivery of increased shareholder value.
In March 2019, the Senior Executive Incentive Plan was
introduced. Under this plan, selected senior employees can
be granted Performance Rights which, upon vesting, will
reward the employees with ordinary shares in the Company.
Performance Rights vest after three years subject to the
Company’s achievement against Total Shareholder Return
and Earnings Per Share growth targets.
We continue to be of the view that this is an appropriate
long-term incentive scheme, and to date five tranches of
Performance Rights have been issued under it.
At the time of writing this report, there are two tranches still
to vest, with a maximum of 200,539 performance rights able
to be converted to ordinary shares subject to the
Company’s performance.
Further details in relation to equity-based remuneration can
be found in Note 6.2 (page 62) of the financial statements
within this Annual Report.
Conclusion
The Group has a proven track record of navigating highs and
lows in the retail environment and is well-positioned to do
so again despite the challenges and uncertainties facing the
retail industry.
Your Board is confident that the talent and focus of our
people, the strength of our brands and the shopping
experiences customers can enjoy on our integrated trading
platform will enable continued strong performance.
On behalf of the Board
Dame Rosanne Meo
Rod Duke
Andy Coupe
Tony Batterton
Mark Callaghan
From left: Andy Coupe, Rod Duke, Mark Callaghan, Dame Rosanne Meo (Chair) and Tony Batterton.
Briscoe Group Limited Annual Report 2023 | Board of Directors’ Review
7
It was a remarkable year, in which the lockdowns and other
disruptions of the Covid-19 trading environment receded,
only for a newer set of challenges to appear.
The Covid-19 pandemic extended into the year, with the
outbreak of the Omicron variant in late 2021 having a
dampening effect on foot traffic to bricks-and-mortar stores
during our first quarter. Economic factors including cost of
living increases, higher interest rates, a weaker New Zealand
dollar and falling house prices affected consumer sentiment
from the second quarter onward. At the same time, we faced
the need to manage increases in operational costs and the
cost of goods sold, with the resulting stress on margins.
The Group’s trading numbers improved strongly in the third
quarter, albeit the prior year comparison had been affected by
store shutdowns in Auckland.
The achievement of record annual earnings against a
backdrop of growing pressure on both revenues and costs
was very noteworthy.
As indicated in the Board of Directors’ Review, it reflected our
ability to adapt quickly in the retail environment, and to ensure
that we present the strengths in our product offering and trading
platform in a way that continues to appeal to our customers.
The financial results for the year are set out in detail in the
Financial Performance section of this report (see page 12).
We are delighted to have produced a second half
performance that not only made up the narrow deficit in
profit in the first half, but also enabled us to surpass the
previous year’s records in both sales and profit.
The second half performance is particularly strong when the
deterioration through the year in economic factors affecting
consumer confidence, and subsequently retail spending, are
taken in to account.
We have a very strong core business which continues to
prove its resilience amidst the varied conditions faced by the
Group in recent years. Our incredibly talented team continues
to exceed expectations to allow these results to be produced.
Margin pressure has increased as the impacts of an economic
downturn are felt and the retail sector squeezes its margins to
remain competitive.
As previously reported, the Group is working to protect as
much as possible of the 633 basis points gained in gross
profit margin across the two years to January 2022. We
continue to see benefits from this effort, and to close this year
just 174 basis points below the previous annual gross margin
percentage is a very creditable result.
Margin pressure is ongoing, and we do not underestimate the
continuing challenge of protecting these gains.
Managing
Director’s
Review
Briscoe Group Limited Annual Report 2023 | Managing Director’s Review
8
Store network
Despite the difficult trading conditions and constraints in
relation to team availability the Group progressed a significant
number of store development projects.
As reported at the half-year, five full-store refurbishments
were completed during the first half. Five more were
completed during the second half – at Briscoes Homeware
Te Rapa and both the Briscoes Homeware and Rebel Sport
stores at Dunedin and Whangarei. Upgrades to both brands’
stores at Manukau have started and are on track to be
completed during the third quarter of 2023.
We are very excited about the opening of a new Rebel Sport
store in Ashburton in conjunction with the relocation of the
existing Briscoes Homeware store. These stores will be open
for Easter 2023.
All the upgrades result in a dramatic difference to the look
and feel of the stores. They include the latest ideas from
the new store design concepts, including LED lighting,
redesigned fixtures, personalised counters, click & collect
storage zones and dramatic new in-store signage.
Online
The Group’s online business again performed exceptionally well.
We continue to invest in developing both the front and back-
end platforms.
We see signs of a global trend in which the balance between
store and online trading is shifting back slightly to store
trading – not surprisingly, when the Covid-19 era of lockdowns
and personal caution appears to be unwinding. No doubt
this balance will shift over time as retail trends, customer
circumstances and other factors evolve.
The online team implemented a number of developments to
enhance performance:
• The implementation of a new product embellishment
system to ensure there is great product content
displayed online
• The implementation of the global tool
Fit Analytics to ensure customers can be assured of
selecting the right garment size across all our sports
apparel brands
• The introduction of same-day click & collect
• Enhanced fulfilment processes, increasing the speed of
picking online orders
• Improved order routing logic, optimising the speed of
orders to customers.
Briscoe Group Senior Leadership Team (from left): Aston Moss, Geoff Scowcroft, Rod Duke, Nick Turner, Isabel Campbell,
Andrew Scott, Fraser Collins, Darren Porteous.
Briscoe Group Limited Annual Report 2023 | Managing Director’s Review
9
Strategy programme
The Group continues to focus on progressing its strategic
initiatives, which we see as critical to protecting the
foundations for future growth.
An important piece of work undertaken during the second
half, with external assistance, was to complete a review of the
Groups distribution and supply chain requirements across
the next decade. This included:
• Current and future state scenarios
• Automation suitability
• Warehouse management system requirements
• Distribution centre design.
These have all been assessed in order to produce a business
case for board approval. Once finalised this will represent a
significant strategic project across the next two-to-three years.
A number of other initiatives also continue to benefit
profitability. These include:
• The ongoing introduction of new products online and
shipped direct from suppliers to customers – the ‘drop
ship’ model
• Continued development of our personalised database
communication tool, Emarsys
• The introduction of Tableau business intelligence
dashboards throughout our network
• The creation of a new on-shelf-availability tool for use
across the store network
• Stock processing efficiencies in-store and at our
distribution centre
• e-Receipts at all stores
• In-store trials in relation to electronic shelf labelling.
The year ahead
We expect New Zealand retail in general to remain highly
sensitive to ongoing uncertainty in relation to deteriorating
economic conditions, customer sentiment, cost pressures,
higher interest rates and political uncertainty given the
upcoming general election.
Measures to limit the impact of cost increases will be a
feature of the year and we certainly do not underestimate
how challenging trading could be.
The Group maintains a set of highly positive fundamentals
including the strength and resilience of its business model,
the strong fit of a ‘big box’ trading platform within the modern
retail environment, its market profile in Homewares and
Sporting Goods, and its ability to offer customers a wide
range of trusted international brands at great value.
These attributes are backed by strengths including a very
strong balance sheet and a strategic focus that continues to
deliver operational improvement and growth opportunities.
Above all, we can trust the talent and dedication across
our entire team to offer New Zealanders the best shopping
experience possible and to deliver continued
strong performance.
Rod Duke
Group Managing Director
We also launched our omnichannel VIP club proposition for
both brands – Briscoes Club and Club Rebel. All customers,
whether they purchase online or in-store, can sign up to the
applicable club and receive a range of benefits including
Welcome and Birthday offers, exclusive access to sale events,
‘New in’ updates and more.
“We have a very strong core
business which continues to prove
its resilience amidst the varied
conditions faced by the Group in
recent years.”
Briscoe Group Limited Annual Report 2023 | Managing Director’s Review
10
Briscoe Group Limited Annual Report 2023 | Managing Director’s Review
11
Revenue
Total Group sales increased by 5.56% to a record $785.9
million. This growth reflects a strong year of trading and
although there were no impacts from store closures, unlike
the previous two years, there were certainly a number of other
challenges faced by the business, including the Omicron
outbreak and deteriorating economic sentiment.
Online sales now represent 18.97% of total Group sales and
have grown by 102.78% in only three years when they made
up just 11.26% of Group sales. As well as benefiting from the
obvious step-change due to Covid, there have been clear
gains from the continued investment in both front and
back-end online process and system developments.
We continue to see brand-wide growth across our categories in
both homeware and sporting goods with both the luggage and
footwear categories delivering exceptional growth for the year.
The growth from the introduction of new online products
which are shipped direct from suppliers to customers is also
very exciting and will continue to be an important long-term
focus for our merchandise team.
Gross Margin
Gross margin dollars increased by $5.3 million, +1.55%, for the
period with gross margin percentage decreasing from 45.76%
to 44.02%.
We continue to invest considerable resource in working
closely with our committed suppliers to mitigate cost
price pressures and minimise retail price increases, whilst
maintaining our commitment to offering customers great
value across all our categories.
Margin pressures from the impacts of the economic
downturn are evident as the retail sector squeezes margins
to be more competitive. Established initiatives continue to
produce benefits in our efforts to protect as much as possible
of the 633 basis points gained in gross profit margin across
the previous 2 years ended January 2021 and January 2022.
To close only 174 basis points below last year is a very solid
result. Margin pressure is however ongoing, and we certainly
do not underestimate the challenge ahead.
Operating Costs
Our focus on costs is as critical as ever with cost pressures evident
across all areas of the business. Shipping, distribution, labour
and security are just a few examples of areas under significant
cost pressure. However, we continue to make excellent progress
in introducing efficiencies throughout the business to mitigate
and control costs. Online fulfilment productivity and in-store
processing projects are examples of this.
Net Profit After Tax (NPAT)
NPAT of $88.4 million was achieved for the year, ahead of the
$87.9 million recorded for the previous year. To achieve an
increase on last year’s record profit considering the deterioration
in economic factors impacting consumer confidence and retail
spending is an outstanding achievement.
Balance Sheet
The Group’s balance sheet remains very strong, with cash and
bank balances of $149.9 million as at 29 January 2023 and
no term debt. Approximately $26 million of creditor payments
included in the trade payables balance were subsequently paid
on or before 31 January 2023.
Inventory remains a key area of relentless focus closing at
$117.8 million, $1.7 million lower than last year. Widely reported
cost pressures including foreign exchange weakness, shipping
and storage costs and labour supply have all presented
challenges for managing stock throughout the period. While
the value of inventory has decreased around 1%, the volume of
inventory we are holding has actually decreased by around 11%.
This lower level of inventory is a significant advantage for our
business as we enter a more subdued retail cycle than we have
seen for a number of years.
Initiatives in relation to our inventory ordering processes –
refining how, when and what we purchase, as well as improving
other inventory measures such as in-store availability, slow
moving items and stock obsolescence are all critical to
optimising our inventory management as well as helping to
protect the gross profit margin.
During the year $16.5 million of capital investment was made by the
Group of which $9.0 million represents expenditure on the fit-out
of refurbished stores. The balance of the capital investment was for
online platform improvements, security system initiatives, lighting
upgrades and enhancements to system software and hardware.
Financial
Performance
“In a year which saw the continuation of
existing as well as the introduction of new
challenges, the Group delivered a very
strong set of results; growth in sales, gross
profit and bottom-line profit; continued
balance sheet strength and increased
dividend to shareholders.”
Geoff Scowcroft
Chief Financial Officer
Briscoe Group Limited Annual Report 2023 | Financial Performance
12
2016
2020
2021
2019
2018
2017
2022
Online mix now at expected normalised
annualised levels post impact of store
lockdown closures. Step-change in mix
from pre-Covid very evident.
Online mix of sales
%
21.5%
19.0%
18.8%
10.0%
6.1%
11.3%
8.2%
4.5%
2023
2016
2020
2021
2019
2018
2017
2022
Significant margin gains (+633 basis
points) made across 2021 and 2022
reduced by only 174 basis points in
2023.
Gross profit margin
%
45.8%
44.0%
43.8%
40.1%
40.6%
39.4%
40.0%
40.1%
2023
2020
2021
2019
2018
2017
2022
* Approximately $26 million of creditor payments made immediately
after balance date in 2023
Solid positive free cash flow (defined as
net cash from operating activities less
capital expenditure) helps to maintain
the Group’s strong balance sheet.
Free cash flow*
$M
2016
55.5
26.7
75.0
49.0
60.3
81.1
76.6
128.0
2023
2020
2021
2019
2018
2017
2022
* NZ IFRS16 adopted from 2020
Record profit maintains strong earnings
per share.
Earnings per share*
cents
2016
27.8
21.7
27.2
28.7
28.2
32.9
39.5
39.7
2023
Consistently solid growth achieved
across a number of years.
*2021 includes 53 weeks of trading
Total revenue*
$M and growth %
2020
2021
2019
2018
2017
2016
605.1
555.5
585.9
631.9
653.0
701.8
744.4
785.9
2022
2023
6.1%
5.6%
7.5%
4.4%
5.5%
3.3%
3.3%
9.2%
2020
2021
2019
2018
2017
2022
* NZ IFRS16 adopted from 2020
Record NPAT despite ongoing
challenges in relation to public health
and deteriorating economic factors.
Net profit after tax*
$M and sales %
2016
61.3
47.1
59.4
63.4
62.6
73.2
87.9
88.4
11.8%
11.3%
10.4%
10.0%
10.1%
9.6%
10.1%
8.5%
2023
Key performance indicators (KPIs) are used by
the Board and management to monitor business
performance.
Briscoe Group Limited Annual Report 2023 | Financial Performance
13
Sustainability
Our “Steps to a Better Tomorrow”
New Zealanders have a genuine
commitment to protecting the
environment and are also very
aware of the big issues such as
climate change, waste, social
injustice and equity. They want
to make sure that the products
they purchase are not only good
quality and value for money but
also have a positive impact on the
environment and our community.
Our “Steps to a Better Tomorrow” program aims to
support New Zealanders’ growing commitment
to sustainability.
We want New Zealanders to happily spend their money
with us because of our commitment to continuously
becoming a more sustainable organisation. We recognise
sustainability is good business practice, enabling us to
meet regulatory and customer expectations, mitigating
future risks, reducing costs, enhancing our brand and
reputation, and building ourselves into a more resilient
and adaptable business.
Since launching our “Steps to a Better Tomorrow”
programme 12 months ago, we have made consistent
progress across all our sustainability pillars. This year we
had a record of $1.05m raised for Cure Kids and donated
10,500 balls through our partnership Pass It Forward.
In our operational side we are conducting a full carbon
footprint assessment including across our supply chain
(scope 3) with a view of setting our first climate targets
in the coming months. We continue to make progress
towards reducing our waste and emissions and we are
rolling out a new ethical supplier programme using
expertise from the UK.
“I am especially pleased with the work we are doing in
our communities. We continue to invest in our long
term relationships with Cure Kids and Pass It Forward.
I am so impressed with their work in supporting our
future generation of kids. We are making good progress
operationally, and as a member of the Retail Working
Group, are working collaboratively with our sector as we
move toward our first climate related disclosure in 2024.”
Rod Duke
Group Managing Director
Briscoe Group Limited Annual Report 2023 | Sustainability
14
Electrification
of our forklifts
Completed field testing of electric
forklifts across our sites and have
now brought our electrification
target forward to have a full electric
fleet by 2025.
Engaged with
the Sustainability
Community
Joined the Sustainable Business
Council and are a member of the New
Zealand Retail Climate Scenario Sector
Group facilitated by KPMG.
Pass it
Forward
Donated over 10,500 balls to
schools across New Zealand this
year, with nearly 60,000 balls
donated since the launch of our
Pass It Forward partnership in 2017.
Engaged with
experts
We have engaged with several
external experts to help in setting
our Sustainability and ESG strategy,
understanding our emissions profile
and how best to engage with all our
suppliers across the world.
Cure
Kids
Had our biggest ever fundraising
year and raised $1.05 million for
New Zealand kids, accumulating in
over $10 million raised over the last
17 years.
Our
team
Provided mental health training
for our team and our Employee
Assistance Program is used primarily
for non-work-related support to our
staff and families.
2022–2025
2025–2030
By 2050
Setting the policies, targets,
governance and reporting.
Defining our climate and waste
targets with programs of work to
support their achievement.
More deliberate with our social and
community programs ensuring we
maximise positive impact.
Embedding internal
governance including Climate
Related Disclosures.
Delivering on our commitments
towards zero waste and emissions.
Maximising our social impact for a
better New Zealand.
Improving our status as an
employer of choice for our people.
Zero emissions and waste across
our operations.
Positive contributor to thriving
communities across all of
New Zealand.
Briscoe Group Limited Annual Report 2023 | Sustainability
15
Last year we conducted a
materiality assessment which
gave us the foundation for our first
Sustainability Policy. We continue
to focus on the key areas that
matter most, which are climate
change, waste, our people and our
community. Each area is led by a
member of the senior management
team, and Sustainability is a
standard board agenda item for
each meeting.
We have already made progress in governance across
our supply chain, climate related disclosures and in
the coming months will be assessing being a part of
voluntary certifications such as CDP and Science Based
Target Initiative.
Partnership with Verisio
We recently signed a partnership agreement with
Verisio to help us conduct ethical and environmental
assessments across our supply chain.
Verisio provide specialist end-to-end supply chain risk
management and the initial work includes using their
specialist software to help us conduct
a full audit of our suppliers.
“We are excited to be working with Briscoe Group on the
important area of ethical supply chain management and
look forward to sharing our experience from working
with similar retailers from around the world.”
Leon Reed
CEO Verisio
Climate related risks
Work has already begun on our assessment of the
Aotearoa New Zealand Climate Standards released on 15
December 2022 by the External Review Board. Briscoe
Group will be reporting under this standard for the next
financial year ending January 2024. We have also joined
several industry peers in the New Zealand Retail Climate
Scenario Sector Group facilitated by KPMG. Through our
participation in this group, we hope to improve our own
capability and build a set of industry consistent scenarios
which we will adapt to our own specific situation as per
the recommended guidance.
Future focus areas:
•
Setting future climate and waste targets in line with
Science-Based and Net Zero expectations
•
Conducting an immediate flood risk assessment of
all store and building locations across the country
•
Working with our suppliers ensuring we have
an ethical supply chain and also exploring more
sustainable product offerings
•
Improving our internal sustainability capability
through engaging experts and training
“By engaging proactively with
our suppliers, we hope to
increase our future range of
sustainable options such as the
Dri Glo Repreve Duvet Inner
which is made from recycled
plastic bottles.”
Fraser Collins
Group General Manager,
Merchandise
Governance
Briscoe Group Limited Annual Report 2023 | Sustainability
16
Community
Across New Zealand Briscoe
Group is active in numerous
community programs.
From supplying valuable sporting equipment to schools
through our Pass It Forward partnership to raising much
needed funds for our main charity Cure Kids you’ll see our
team, customers and communities coming together on a
regular basis bonded by the common goal of creating a
better tomorrow.
Pass It forward fundraising through Rebel Sport
amounted to $266,725 which equated to 10,699
balls being donated to schools enabling over 40,000
students to have access to sport. Since its inception in
2017 Pass It Forward has donated nearly 60,000 Balls
equating to $1,498,500 in fundraising.
“There isn’t a day that goes by where the Cure Kids team
aren’t deeply, deeply grateful for the wonderful partnership
we have with Briscoe Group.
In 2022 the passionate team at Briscoe Group stores
up and down the country asked New Zealanders if they
could support Cure Kids. This and many other ‘fun’
raising activities raised a phenomenal $1,050,000 - a
record breaking year for our partnership! Over the past
17 years this remarkable team raised over $10,000,000
to support health research on the big health issues that
affect the lives of our tamariki.
We love being part of the Briscoe Group Whānau,
inspiring, passionate, everyday New Zealanders who go
the extra mile to support Cure Kids every day – helping us
fulfil our dream for healthier children with brighter futures.”
Frances Benge
Chief Executive Officer, Cure Kids
“We are so grateful for the donation of the balls and look
forward to seeing the children using them to increase their
ball skills and generally having fun with them. The Tania
Dalton Foundation, Silver Fern Sports and their Pass It
Forward incentive scheme are worthy initiatives. We have a
very excited school basketball team who were very proud
to have been chosen to accept the balls on behalf of our
school. Thank you and your foundation once again.”
Gavin Oliver
Principal, Pukete Primary School
Future focus areas
•
Exploring ways of how we can effectively engage more
staff in community programs
•
Investigating how we can provide more meaningful
support to our local communities and expand on the
good work already taking place
Briscoe Group Limited Annual Report 2023 | Sustainability
17
Our People
We know that supporting our team
is critical to success and providing
high standards of customer service.
We continue to focus on safe
working conditions with continued
health and safety training including
wellbeing and mental health.
Our twice yearly team member engagement surveys,
continue to gain greater participation (aggregate participation
in FY23 was over 80%) and increased engagement scores
(up by 0.4 between February and September). Our approach
to health, safety and wellbeing includes mental health as well
as learning from our team what wellbeing means to them and
how we best work to strengthen our impact in this area. Since
the release and promotion of our mental health series, over
850 team members across the company have completed
all six of our training modules. A number of our team have
also completed additional external education and training on
mental health and our intention is to integrate this important
topic into our core management and leadership
development programme.
Diversity, equity and inclusivity are areas in which we
continue to invest. We pay particular attention to nurturing
and supporting the growth and progression of female leaders
in our business. At the end of FY23 our leadership team
across retail operations and support office was comprised
of 56% female leaders. We are particularly focused on lifting
the proportion of females in senior leadership roles in retail
operations. In conjunction with this, our FY22 assessment of
gender pay equity for our retail leadership team identified less
than a 1% gap. We are confident our systems and processes
will assist in ensuring equitable rewards, irrespective of
gender. Looking forward we plan to perform a similar analysis
for ethnicity with the objective of enhancing both our
diversity and inclusiveness.
Just under 2,000 hours have been invested in the formal
components of our management and leadership programme
with many additional hours of pre and post event work
contributing to the success of this programme to fuel retail
careers.
Briscoe Group has partnered with First Foundation for the
past 13 years, and over this period has offered 34 scholarships.
We are extremely proud of the individuals we have supported
and their positive contributions back into the community.
Future focus areas:
•
Continued growth of the proportion of female
leaders across the organisation and particularly
within retail operations
• Maintaining and growing our pool of capability
with particular focus on high potential team
members
•
Progressing our wellbeing initiatives with team
member participation and ensuring mental health
and wellbeing is valued and treated in a similar
manner to physical injury and illness
“Learning and development
is critical to attracting,
developing and retaining
team members with
benefits of both enhanced
performance and increased
job satisfaction.”
Aston Moss
Chief People Officer
Briscoe Group Limited Annual Report 2023 | Sustainability
18
We continue to focus on our two major impact areas of
our own Greenhouse Gas Emissions (GHG) and Waste
to Landfill from our own operations. We have seen some
modest reductions in our emissions this year as we continue
to roll out energy efficiency programs through our stores
and as we electrify our forklift fleet. Our waste to landfill has
increased by about 200 tonnes which is mainly due to the
post-covid lag with customers being able to conveniently
drop in product returns to our stores. We have however made
some good gains in our distribution centre with technology
improvements reducing plastic wrap and paper use.
With every store refit we have a key focus on sustainability.
This includes:
• Working with our suppliers to sustainably and ethically
source materials utilised in our store refit environments
from fixtures to flooring.
• Focusing on lighting energy efficiency and transitioning
to LEDs.
• Refurbishing, recycling or where possible repurposing
store fixtures for alternative use across our store network
instead of going to landfill.
Reducing our Scope one emissions:
A large portion of our scope one emissions come from the
operation of our forklift fleet both in our stores and at our
distribution centre. Following a successful trial of electric
forklifts, Briscoe Group has committed to an accelerated
phase out programme of LPG forklifts, replacing them
with electric units within the current national fleet. This
programme will replace on average 10 units per year and
target completion by 2025.
Our GHG and waste data is unaudited and currently we are undertaking a third-party review
of our baseline including our scope 3 boundary and calculation methodology which we will
make public later on in 2023.
Emission figures for years 2020 and 2021 have been revised slightly from previous reports
due to more accurate reporting and data analysis.
Greenhouse Gas Emissions (tCO2e)
2020
2021
2022
9,413
10,293
8,806
Waste to Landfill
2020
2021
2022
1,023
1,099
1,309
Environment
Climate and Waste
Future focus areas:
•
Have our emission baseline verified by a third party
including a suitable methodology for measuring
scope three emissions
• Set emission reduction and waste targets supported
by detailed roadmaps
• Adopt and integrate appropriate frameworks that
support our sustainability program
“I really enjoy the electric forklift. They are much smoother
to operate, quieter, and better for the environment.”
Megan Black
Store person, Silverdale
Briscoe Group Limited Annual Report 2023 | Sustainability
19
Strategic Plan
Delivering significant incremental profit
“As we enter the final year of our
three year strategic plan great
progress has been made in all
three areas. Our relentless focus on
improving customer experience is
now embedded within our culture.
The ability of our team to deliver a
transformational program whilst
navigating COVID is credit to the
depth and quality of our team.”
2022
Future Supply Chain
New Revenues
Attract
Retain
Grow
Customer
Step-change in online user experience
enhancements
Future supply chain network design
completed
50 drop ship suppliers live – including
new product categories
VIP Club for Briscoes Homeware and
Rebel Sport launched successfully
Same-day Click and Collect now live in all
Briscoes Homeware and Rebel Sport stores
Automated personalisation platform driving
increased customer life-time value
In-store digital price and promotion
labelling pilot live in 8 stores
Significantly increased North and South
Island distribution capability
Andrew Scott
Chief Operating
Officer
Briscoe Group Limited Annual Report 2023 | Strategic Plan
20
New Product Information Management suite launch
Warehouse management system implementation
Accelerated new store concept refurbishment plan
Customer data platform implementation
North Island Distribution capacity further enhanced
Target over 100 drop ship suppliers live – including new
international suppliers
Roll out of digital price and promotion labelling to all stores
Premium delivery options embedded for online deliveries and
returns
2023 and Beyond
a deeper understanding of our most
loyal customers’ behaviour. This,
coupled with our personalisation tool
Emarsys, enables us to increase the
frequency of purchase from different
groups of customers based on
understanding their buying habits.
In-store we have launched an eight
store pilot of electronic prices and
promotion labelling. Whilst the pilot is
in the early stages we have received
very positive team and customer
feedback from the project.
Our Supply Chain review is
well advanced. Our capability
requirements scope is completed
and the Auckland Distribution
Centre design will be completed by
the middle of 2023.
This new facility will be one of the
biggest projects delivered in recent
years. The state-of-the-art facility
will step-change our capability
and deliver significant
performance benefits.
The facility will be the final enabler
to increase our on-shelf product
availability. This will complement
the initiatives delivered during 2021
& 2022.
New Revenues
Our drive to increase new
revenues is now gaining significant
momentum. It is delivering not only
new incremental sales but also
helping to cost-effectively acquire
new customers.
Our Direct-To-Customer (dropship)
programme has grown from 15
suppliers to 50 suppliers. This is
opening up both extended product
range in existing categories such as
exercise equipment in Rebel Sport
and also offering new categories
like garden accessories and sheds
in Briscoes Homeware.
This initiative will be a major focus
for the Group in the coming year
and will become one of our biggest
drivers of incremental sales growth.
The strategic program has now
fully implemented over 40 projects
across the Group. Many of these
deliver digital tools to drive efficiency
improvements in store processes and
online fulfilment to e-Receipting.
During the past year we have
progressed a number of large-scale
projects that will provide a step
change in our customers’ experience.
The launch of our VIP loyalty clubs
for both Briscoes Homeware and
Rebel Sport will now provide us with
Customer Experience
Supply Chain
Briscoe Group Limited Annual Report 2023 | Strategic Plan
21
For the period ended 29 January 2023
Introduction
These financial statements have been presented in a style which attempts to make them less complex and more relevant to
shareholders.
We have grouped the note disclosures into six sections:
1. Basis of Preparation
2. Performance
3. Operating Assets and Liabilities
4. Investments
5. Financing and Capital Structure
6. Other Notes
Each section sets out the accounting policies applied to the relevant notes.
The purpose of this format is to provide readers with a clearer understanding of the financial affairs of the Group.
Accounting policies have been shown in blue font for easier identification.
For the 52 week period ended 29 January 2023
Consolidated
Financial
Statements
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
24
Table of Contents
Consolidated Financial Statements
Directors’ Approval of Consolidated Financial Statements
27
Consolidated Income Statement
28
Consolidated Statement of Comprehensive Income
29
Consolidated Balance Sheet
30
Consolidated Statement of Cash Flows
31
Consolidated Statement of Changes in Equity
33
Notes to the Consolidated Financial Statements:
1. Basis of Preparation
34
1.1 General Information
34
1.2 General Accounting Policies
34
2. Performance
36
2.1 Segment Information
36
2.2 Income and Expenses
38
2.3 Taxation
39
2.3.1 Taxation – Income statement
39
2.3.2 Taxation – Balance sheet
40
2.3.3 Imputation credits
41
2.4 Earnings Per Share
42
3. Operating Assets and Liabilities
43
3.1 Working Capital
43
3.1.1 Cash and cash equivalents
43
3.1.2 Trade and other receivables
43
3.1.3 Inventories
44
3.1.4 Trade and other payables
44
3.2 Property, Plant and Equipment
46
3.3 Intangible Assets
48
3.4 Leases
48
3.4.1 Right-of-use assets
49
3.4.2 Lease liabilities
49
3.4.3 Lease liabilities maturity analysis
50
3.4.4 Lease related expenses included in the income statement
50
3.4.5 Lease payments included in the cashflow statement
50
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
25
4. Investments
51
4.1 Investment in Equity Securities
51
5. Financing and Capital Structure
52
5.1 Interest Bearing Liabilities
52
5.2 Financial Risk Management
52
5.2.1 Derivative financial instruments
52
5.2.2 Credit risk
53
5.2.3 Interest rate risk
53
5.2.4 Liquidity risk
53
5.2.5 Market risk
55
5.2.6 Sensitivity analysis
56
5.3 Equity
58
5.3.1 Capital risk management
58
5.3.2 Share capital
58
5.3.3 Dividends
59
5.3.4 Reserves and retained earnings
59
6. Other Notes
60
6.1 Related Party Transactions
60
6.1.1 Parent and ultimate controlling company
60
6.1.2 Key management personnel
60
6.1.3 Directors’ fees and dividends
61
6.2 Employee Equity-Based Remuneration
62
6.2.1 Equity-settled performance rights
62
6.2.2 Equity-based remuneration reserve
64
6.3 Contingent Liabilities
64
6.4 Climate Related Risks
64
6.5 Events After Balance Date
64
6.6 New Accounting Standards
64
Independent Auditor’s Report
65
For the 52 week period ended 29 January 2023
Table of Contents
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
26
Authorisation for Issue
The Board of Directors authorised the issue of these Consolidated Financial Statements on 14 March 2023.
Approval by Directors
The Directors are pleased to present the Consolidated Financial Statements for Briscoe Group Limited for the 52
week period ended 29 January 2023. (Comparative period is for the 52 week period ended 30 January 2022).
14 March 2023
For and on behalf of the Board of Directors
Dame Rosanne Meo
CHAIRMAN
Rod Duke
GROUP MANAGING DIRECTOR
Directors’ Approval of Consolidated Financial Statements
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
27
Notes
Period ended
29 January 2023
$000
Period ended
30 January 2022
$000
Sales revenue
785,854
744,450
Cost of goods sold
(439,932)
(403,808)
Gross profit
345,922
340,642
Other operating income
2.2
3,292
3,571
Store expenses
(122,594)
(116,366)
Administration expenses
(91,126)
(91,379)
Earnings before interest and tax
135,494
136,468
Finance income
2,495
399
Finance cost
(14,908)
(14,495)
Net finance cost
5.1
(12,413)
(14,096)
Profit before income tax
123,081
122,372
Income tax expense
2.3.1
(34,644)
(34,463)
Net profit attributable to shareholders
88,437
87,909
Earnings per share for profit attributable to shareholders:
Basic earnings per share (cents)
2.4
39.7
39.5
Diluted earnings per share (cents)
2.4
39.7
39.4
The above consolidated income statement should be read in conjunction with the accompanying notes.
Consolidated Income Statement
For the 52 week period ended 29 January 2023
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
28
Notes
Period ended
29 January 2023
$000
Period ended
30 January 2022
$000
Net Profit attributable to shareholders
88,437
87,909
Other comprehensive income:
Items that will not be subsequently reclassified
to profit or loss:
Change in value of investment in equity securities
4.1
(13,922)
2,880
Items that may be subsequently reclassified to
profit or loss:
Fair value (gain)/loss recycled to income statement
from cashflow hedge reserve
(8,983)
2,912
Fair value gain taken to the cashflow hedge reserve
3,077
3,812
Deferred tax on fair value gain/(loss) taken to income
statement from cashflow hedge reserve
2.3.2
2,515
(816)
Deferred tax on fair value gain taken to cashflow
hedge reserve
2.3.2
(862)
(1,067)
Total other comprehensive income/(loss)
(18,175)
7,721
Total comprehensive income/(loss) attributable
to shareholders
70,262
95,630
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
Consolidated Statement of Comprehensive Income
For the 52 week period ended 29 January 2023
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
29
As at 29 January 2023
Notes
29 January 2023
$000
30 January 2022
$000
ASSETS
Current assets
Cash and cash equivalents
3.1.1
149,874
102,481
Trade and other receivables
3.1.2
6,184
5,082
Inventories
3.1.3
117,792
119,514
Derivative financial instruments
5.2.5
40
3,137
Total current assets
273,890
230,214
Non-current assets
Property, plant and equipment
3.2
130,292
125,897
Intangible assets
3.3
1,994
2,563
Right-of-use assets
3.4.1
243,701
250,789
Deferred tax
2.3.2
16,622
14,184
Investment in equity securities
4.1
50,888
64,810
Total non-current assets
443,497
458,243
TOTAL ASSETS
717,387
688,457
LIABILITIES
Current liabilities
Trade and other payables
3.1.4
109,181
80,785
Lease liabilities
3.4.3
19,791
19,025
Taxation payable
2.3.2
11,308
18,266
Derivative financial instruments
5.2.5
2,513
-
Total current liabilities
142,793
118,076
Non-current liabilities
Trade and other payables
3.1.4
892
875
Lease liabilities
3.4.3
265,178
270,193
Total non-current liabilities
266,070
271,068
TOTAL LIABILITIES
408,863
389,144
NET ASSETS
308,524
299,313
EQUITY
Share capital
5.3.2
62,136
61,992
Cashflow hedge reserve
5.2.5
(1,869)
2,384
Equity-based remuneration reserve
6.2.2
575
566
Other reserves
5.3.4
(36,965)
(23,043)
Retained earnings
284,647
257,414
TOTAL EQUITY
308,524
299,313
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
Consolidated Balance Sheet
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
30
Notes
Period ended
29 January 2023
$000
Period ended
30 January 2022
$000
OPERATING ACTIVITIES
Cash was provided from
Receipts from customers
784,747
744,320
Rent received
28
25
Dividends received
2,884
2,407
Interest received
1,833
342
Insurance recovery
154
135
789,646
747,229
Cash was applied to
Payments to suppliers
(457,553)
(487,274)
Payments to employees
(98,366)
(90,413)
Interest paid
(14,893)
(14,495)
Net GST paid
(31,932)
(28,683)
Income tax paid
(42,486)
(29,868)
(645,230)
(650,733)
Net cash inflows from operating activities
144,416
96,496
INVESTING ACTIVITIES
Cash was provided from
Proceeds from sale of property, plant and equipment
23
22
23
22
Cash was applied to
Purchase of property, plant and equipment
3.2
(15,357)
(18,157)
Purchase of intangible assets
(1,098)
(1,740)
Investment in equity securities
4.1
-
-
(16,455)
(19,897)
Net cash outflows from investing activities
(16,432)
(19,875)
FINANCING ACTIVITIES
Cash was provided from
Issue of new shares
5.3.2
-
-
Net proceeds from borrowings
-
-
-
-
Cash was applied to
Dividends paid
5.3.3
(61,228)
(55,639)
Lease liability payments
(19,065)
(19,159)
(80,293)
(74,798)
Net cash outflows from financing activities
(80,293)
(74,798)
Net increase in cash and cash equivalents
47,691
1,823
Cash and cash equivalents at beginning of period
102,481
100,417
Effect of exchange rate changes on cash and cash equivalents
(298)
241
Cash and cash equivalents at period end
3.1.1
149,874
102,481
Consolidated Statement of Cash Flows
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
31
Consolidated Statement of Cash Flows (continued)
RECONCILIATION OF NET CASH FLOWS FROM
OPERATING ACTIVITIES TO REPORTED NET PROFIT
Period ended
29 January 2023
$000
Period ended
30 January 2022
$000
Reported net profit attributable to shareholders
88,437
87,909
Items not involving cash flows
Depreciation and amortisation expense
34,292
32,904
Bad debts and movement in doubtful debts
(91)
(69)
Inventory adjustments
16
4,857
Amortisation of equity-based remuneration
276
217
Loss/(gain) on disposal/surrender of assets
669
(768)
35,162
37,141
Impact of changes in working capital items
Increase in trade and other receivables
(1,011)
(1,479)
Decrease (increase) in inventories
1,706
(32,898)
(Decrease) increase in taxation payable
(6,958)
5,853
Increase (decrease) in trade payables
27,124
(6,875)
(Decrease) increase in other payables and accruals
(44)
6,845
20,817
(28,554)
Net cash inflow from operating activities
144,416
96,496
NET DEBT RECONCILIATION
Period ended
29 January 2023
$000
Period ended
30 January 2022
$000
Cash and cash equivalents
Cash and cash equivalents at beginning of period
102,481
100,417
Net increase in cash and cash equivalents
47,691
1,823
Effect of exchange rate changes
(298)
241
Cash and cash equivalents at period end
149,874
102,481
Lease liabilities
Opening value
(289,218)
(292,271)
Cash flows
19,065
19,159
Lease acquisitions
(16,139)
(19,350)
Lease surrenders
1,323
3,244
Total lease liabilities at period end
(284,969)
(289,218)
Net debt reconciliation
(135,095)
(186,737)
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
32
Notes
Share
Capital
$000
Cashflow
Hedge
Reserve
Equity-Based
Remuneration
Reserve
Other
Reserves
$000
Retained
Earnings
$000
Total
Equity
$000
$000
$000
Balance at 31 January 2021
61,839
(2,457)
444
(25,923)
225,144
259,047
Net profit attributable to shareholders for the period
-
-
-
-
87,909
87,909
Other comprehensive income:
Change in value of investment in equity
securities
4.1
-
-
-
2,880
-
2,880
Net fair value gain taken through cashflow
hedge reserve
-
4,841
-
-
-
4,841
Total comprehensive income for the period
-
4,841
-
2,880
87,909
95,630
Transactions with owners:
Dividends paid
5.3.3
-
-
-
-
(55,639)
(55,639)
Performance rights charged to income
statement
6.2.1
-
-
217
-
-
217
Performance rights vested
5.3.2/6.2
153
-
(153)
-
-
-
Deferred tax on equity-based remuneration
2.3.2/6.2.2
-
-
58
-
-
58
Balance at 30 January 2022
61,992
2,384
566
(23,043)
257,414
299,313
Net profit attributable to shareholders for the period
-
-
-
-
88,437
88,437
Other comprehensive income:
Change in value of investment in equity
securities
4.1
-
-
-
(13,922)
-
(13,922)
Net fair value loss taken through cashflow
hedge reserve
-
(4,253)
-
-
-
(4,253)
Total comprehensive (loss)/income for the period
-
(4,253)
-
(13,922)
88,437
70,262
Transactions with owners:
Dividends paid
5.3.3
-
-
-
-
(61,228)
(61,228)
Performance rights charged to income
statement
6.2.1
-
-
276
-
-
276
Performance rights vested
5.3.2/6.2
144
-
(144)
-
-
-
Performance rights forfeited
6.2.2
-
-
(24)
-
24
-
Deferred tax on equity-based remuneration
2.3.2/6.2.2
-
-
(99)
-
-
(99)
Balance at 29 January 2023
62,136
(1,869)
575
(36,965)
284,647
308,524
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Consolidated Statement of Changes in Equity
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
33
1. Basis of Preparation
This section presents a summary of information considered relevant and material to assist the reader in understanding
the foundations on which the financial statements as a whole have been compiled. Accounting policies specific to
notes shown in other sections are included as part of that particular note.
1.1 General Information
Briscoe Group Limited (the Company) and its subsidiaries (together the Group) is a retailer of homeware and sporting goods. The
Company is a limited liability company incorporated and domiciled in New Zealand and is listed on the New Zealand Stock Exchange
(NZX). Briscoe Group Limited is registered under the Companies Act 1993 and is an FMC Reporting Entity under Part 7 of the Financial
Markets Conduct Act 2013. The address of its registered office is 1 Taylors Road, Morningside, Auckland. The Company is registered in
Australia as a foreign company under the name Briscoe Group Australasia Limited and is listed on the Australian Securities Exchange
as a foreign exempt entity. (NZX / ASX code: BGP).
The financial statements of the Group have been prepared in accordance with the requirements of Part 7 of the Financial Markets
Conduct Act 2013 and the NZX Main Board Listing Rules.
These audited consolidated financial statements have been approved for issue by the Board of Directors on 14 March 2023.
1.2 General Accounting Policies
These consolidated financial statements have been prepared in accordance with Generally Accepted Accounting Practice (GAAP).
They comply with New Zealand equivalents to International Financial Reporting Standards (NZ IFRS) and other applicable Financial
Reporting Standards, as appropriate for for-profit entities. The consolidated financial statements also comply with International
Financial Reporting Standards (IFRS).
The consolidated financial statements are presented in New Zealand dollars which is the Company’s functional currency and the
Group’s presentation currency. All financial information has been presented in thousands, unless otherwise stated.
The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been
consistently applied to all the periods presented, unless otherwise stated.
Entities reporting
The consolidated financial statements reported are for the consolidated Group which is the economic entity comprising Briscoe
Group Limited and its subsidiaries. The Group is designated as a for-profit entity for the purposes of complying with GAAP.
Reporting period
These consolidated financial statements are in respect of the 52-week period 31 January 2022 to 29 January 2023 and provide a
balance sheet as at 29 January 2023. The comparative period is in respect of the 52-week period 1 February 2021 to 30 January 2022.
The Group operates on a weekly trading and reporting cycle resulting in 52 weeks for most years with a 53-week period occurring
once every 5-6 years.
Principles of consolidation
Subsidiaries are all entities over which the Company has control. The Company controls an entity when the Company 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. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are deconsolidated from
the date that control ceases.
Intercompany transactions, balances and unrealised gains or losses on transactions between Group companies are eliminated.
Accounting policies of subsidiaries are changed when necessary to ensure consistency with the policies adopted by the Company.
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
34
Subsidiaries
Activity
2023 Interest
2022 Interest
Briscoes (New Zealand) Limited
Homeware retail
100%
100%
The Sports Authority Limited (trading as Rebel Sport)
Sporting goods retail
100%
100%
Rebel Sport Limited
Name protection
100%
100%
Living and Giving Limited
Name protection
100%
100%
All companies above are incorporated in New Zealand and have a balance date consistent with that of the Company as outlined in the
accounting policies.
Historical cost convention
These financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain assets as
identified in specific accounting policies detailed throughout these financial statements.
Critical accounting judgements and estimates
In the process of applying the Group’s accounting policies and the application of accounting standards, a number of estimates
and judgements have been made. The estimates and underlying assumptions are based on historical experience and adjusted for
current market conditions and other factors, including expectations of future events that are considered to be reasonable under the
circumstances. If outcomes within the next financial period are significantly different from assumptions, this could result in adjustments
to carrying amounts of the asset or liability affected. Further explanation as to estimates and assumptions made by the Group can be
found in the notes to the financial statements:
Areas of judgement and estimation
Note
Inventories
3.1.3
Leases
3.4
Foreign currency translation
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period-
end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement,
except when deferred in which case they are recognised in other comprehensive income as qualifying cash flow hedges.
1. Basis of Preparation
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
35
2. Performance
This section reports on the results and performance of the Group, providing additional information about individual
items, including performance by operating segment, revenue, expenses, taxation and earnings per share.
2.1 Segment Information
An operating segment is a component of an entity that engages in business activities which earns revenue and incurs expenses and for
which the chief operating decision maker (CODM) reviews the operating results on a regular basis and makes decisions on resource
allocation. The Group has determined its CODM to be the group of executives comprising the Managing Director, Chief Operating
Officer, Chief Financial Officer and the Chief People Officer.
The Group is organised into two reportable operating segments, namely homeware and sporting goods, reflecting the different retail
sectors within which the Group operates. The Company is considered not to be a reportable operating segment. Eliminations and
unallocated amounts as shown below are primarily attributable to the Company. There were no inter-segment sales in the period
(2022: Nil).
Information regarding the operations of each reportable operating segment is included below. Segment profit represents the profit
earned by each segment and is extracted from the income statements associated with the two trading subsidiary companies, Briscoes
(New Zealand) Limited and The Sports Authority Limited (trading as Rebel Sport). Earnings before interest and tax (EBIT) is a non-
GAAP measure and used by CODM to assess the performance of the operating segments. This measure should not be viewed in
isolation, nor considered as a substitute for measures reported in accordance with NZ IFRS. This non-GAAP financial measure may not
be comparable to similarly titled amounts reported by other companies.
For the period ended 29 January 2023
Homeware
Sporting
goods
Eliminations/
Unallocated
Total Group
$000
$000
$000
$000
INCOME STATEMENT
Total sales revenue
487,501
298,353
-
785,854
Gross profit
214,861
131,061
-
345,922
Earnings before interest and tax
75,652
54,032
5,810
135,494
Finance income
482
1,895
118
2,495
Finance costs
(9,913)
(4,945)
(50)
(14,908)
Net finance cost
(9,431)
(3,050)
68
(12,413)
Income tax expense
(18,772)
(14,280)
(1,592)
(34,644)
Net profit after tax
47,449
36,702
4,286
88,437
BALANCE SHEET ITEMS:
Assets
372,788
276,147
68,4521.
717,387
Liabilities
254,474
151,254
3,135
408,863
OTHER SEGMENTAL ITEMS:
Acquisitions of property, plant and
equipment, intangibles and investments
9,474
6,981
-
16,455
Depreciation and amortisation expense
22,352
11,940
-
34,292
$000
1. Investment in equity securities
53,671
Intercompany eliminations
(7,523)
Other balances
22,304
68,452
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
36
2. Performance
For the period ended 30 January 2022
Homeware
Sporting
goods
Eliminations/
Unallocated
Total Group
$000
$000
$000
$000
INCOME STATEMENT
Total sales revenue
460,887
283,563
-
744,450
Gross profit
208,440
132,202
-
340,642
Earnings before interest and tax
73,771
57,687
5,010
136,468
Finance income
96
281
22
399
Finance cost
(9,569)
(4,804)
(122)
(14,495)
Net finance costs
(9,473)
(4,523)
(100)
(14,096)
Income tax expense
(18,171)
(14,889)
(1,403)
(34,463)
Net profit after tax
46,127
38,275
3,507
87,909
BALANCE SHEET ITEMS:
Assets
385,205
246,514
56,7381.
688,457
Liabilities
266,122
141,074
(18,052)
389,144
OTHER SEGMENTAL ITEMS:
Acquisitions of property, plant and
equipment, intangibles and investments
15,019
4,878
-
19,897
Depreciation and amortisation expense
21,170
11,734
-
32,904
$000
1. Investment in equity securities
67,593
Intercompany eliminations
(27,524)
Other balances
16,669
56,738
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
37
2.2 Income and Expenses
Revenue recognition
Revenue comprises the fair value of consideration received or receivable for the sale of goods and services, net of Goods and Services
Tax (GST), and discounts and after eliminating sales within the Group. Revenue is recognised as follows:
Sales of goods - retail
For all sales, control is considered to pass to the customer at the point when the customer can use or otherwise benefit from the
goods and services. For in-store sales, control passes to the customer at point of sale. For online sales, the order along with delivery to
the customer are considered to comprise a single performance obligation, therefore control is considered to pass to the customer on
delivery of the goods. Retail sales are predominantly by credit card, debit card or in cash.
Rental income
Rental income (net of any incentives given to lessees) is recognised on a straightline basis over the period of the lease.
Interest income
Interest income is recognised on a time-proportionate basis using the effective interest method.
Dividend income
Dividend income is recognised when the right to receive the dividend is established.
Profit before income tax includes the following specific income and expenses:
Period ended
29 January 2023
Period ended
30 January 2022
$000
$000
Income
Rental income
28
25
Dividends received
2,884
2,407
Insurance recovery
154
135
Gain on lease surrender
226
1,005
Expenses
Depreciation of property, plant and equipment
10,540
9,398
Amortisation of software costs
1,622
1,334
Depreciation of right-of-use assets
22,130
22,172
Interest on leases
14,859
14,218
Operating lease rental expense
190
129
Wages, salaries and other short-term benefits
94,828
93,069
Equity-based remuneration (refer also Note 6.2)
276
217
Amounts paid to auditors:
Statutory Audit
143
134
Half year review
47
33
Other services
-
-
2. Performance
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
38
2.3 Taxation
Current and deferred income tax
The income tax expense for the period is the tax payable on the current period’s taxable income based on the income tax rate
adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and
liabilities and their carrying amounts in the financial statements.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in
New Zealand, being the country where the Group operates and generates taxable income. The Group periodically evaluates positions
taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions
where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between tax bases of assets and
liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred
income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the
temporary differences can be utilised.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when
the deferred tax balances relate to the same taxation authority. Current tax assets and liabilities are offset when the entity has a legal
enforceable right to offset and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
Goods and Services Tax (GST)
The income statement, statement of comprehensive income and statement of cash flows have been prepared so that all components
are stated exclusive of GST. All items in the balance sheet are stated net of GST, with the exception of trade receivables and trade
payables, which include GST invoiced.
2.3.1 Taxation – Income statement
The total taxation charge in the income statement is analysed as follows:
Period ended
29 January 2023
Period ended
30 January 2022
$000
$000
(a) Income tax expense
Current tax expense:
Current tax
34,585
34,669
Adjustments for prior periods
943
1,052
35,528
35,721
Deferred tax expense:
Decrease in future tax benefit current period
67
(205)
Adjustments for prior periods
(951)
(1,053)
(884)
(1,258)
Total income tax expense
34,644
34,463
2. Performance
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
39
2. Performance
For the 52 week period ended 29 January 2023
Period ended
29 January 2023
Period ended
30 January 2022
$000
$000
(b) Reconciliation of income tax expense to tax rate
applicable to profits
Profit before income tax expense
123,081
122,372
Tax at the corporate rate of 28% (2022: 28%)
34,463
34,264
Tax effect of amounts which are either non-deductible
or non-assessable in calculating taxable income
189
200
Prior period adjustments
(8)
(1)
Total income tax expense
34,644
34,463
The Group has no tax losses (2022: Nil) and no unrecognised temporary differences (2022: Nil).
2.3.2 Taxation – Balance sheet
(a) Deferred Taxation
The following are the major deferred taxation liabilities and assets recognised by the Group and movements thereon during the current
and prior period:
Depreciation
Provisions
Derivative
financial
instruments
Net lease
liability
Total
$000
$000
$000
$000
$000
At 31 January 2021
90
3,506
956
10,198
14,750
Recognised in the income statement
94
602
-
562
1,258
Recognised in equity
-
58
-
-
58
Recognised in other comprehensive income
-
-
(1,882)
-
(1,882)
At 30 January 2022
184
4,166
(926)
10,760
14,184
Credited to the income statement
7
82
-
795
884
Credited to equity
-
(99)
-
-
(99)
Net credited to other comprehensive income
-
-
1,653
-
1,653
At 29 January 2023
191
4,149
727
11,555
16,622
1. Net credited to other comprehensive income comprises deferred tax on fair value gain taken to income statement of $2,515,053 (2022: deferred
tax on fair value loss of $815,392) and deferred tax on fair value gain taken to cash flow hedge reserve of $861,599 (2022: deferred tax on fair value
gain of $1,067,056).
1.
1.
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
40
(b) Taxation payable
The following is the analysis of the movements in the taxation payable balance during the current and prior period:
Period ended
29 January 2023
Period ended
30 January 2022
$000
$000
Movements:
Balance at beginning of period
(18,266)
(12,413)
Current tax
(35,528)
(35,721)
Tax paid
42,072
29,488
Foreign investor tax credit (FITC)
414
380
Balance at end of period
(11,308)
(18,266)
2.3.3 Imputation credits
Period ended
29 January 2023
Period ended
30 January 2022
$000
$000
Imputation credits available for use in
subsequent accounting periods:
138,029
123,557
The above amounts represent the balance of the imputation account as at the end of the reporting period, adjusted for:
• Imputation credits that will arise from the payment of the provision for income tax,
• Imputation debits that will arise from the payment of dividends recognised as liabilities at the reporting date, and
• Imputation credits that will arise from the receipt of dividends recognised as receivables at the reporting date.
The consolidated amounts include imputation credits that would be available to the Company if subsidiaries paid dividends.
2. Performance
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
41
2.4 Earnings per share
Earnings per share (EPS) is the amount of post-tax profit attributable to each share.
Basic EPS is computed by dividing the net profit attributable to shareholders by the weighted average number of ordinary shares on
issue during the period.
Diluted EPS adjusts for any commitments the Group has to issue shares in the future that would decrease the Basic EPS. These
are in the form of performance rights. Diluted EPS is therefore computed by dividing the net profit attributable to shareholders by
the weighted average number of ordinary shares on issue during the period, adjusted to include the potentially dilutive effect if
performance rights to issue ordinary shares were exercised and converted into shares.
Period ended
29 January 2023
Period ended
30 January 2022
Net profit attributable to shareholders $000
88,437
87,909
Basic
Weighted average number of ordinary shares on issue (thousands)
222,638
222,549
Basic earnings per share
39.7 cents
39.5 cents
Diluted
Weighted average number of ordinary shares on issue adjusted for performance rights
issued but not exercised (thousands)
222,931
223,837
Diluted earnings per share
39.7 cents
39.4 cents
2. Performance
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
42
3. Operating Assets and Liabilities
This section reports the assets used to generate the Group’s trading performance and the liabilities incurred as a
result. Liabilities relating to the Group’s financing activities are addressed in note 5. Assets and liabilities in relation to
deferred taxation and taxation payable are shown in note 2.3. The carrying amounts of financial assets and liabilities are
equivalent to their fair value unless otherwise stated.
3.1 Working Capital
Working capital represents the assets and liabilities the Group generates through its trading activity. The Group
therefore defines working capital as cash, trade and other receivables, inventories and trade and other payables.
3.1.1 Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions and other short-term,
highly liquid investments with original maturities of three months or less, that are readily convertible to known amounts
of cash and that are subject to an insignificant risk of changes in value.
Period ended
29 January 2023
Period ended
30 January 2022
$000
$000
Cash at bank or on hand
149,874
102,481
As at 29 January 2023 the Group held foreign currency equivalent to NZ$1.692 million (2022: NZ$2.541 million) which is included in
the table above. The foreign currency in which the Group deals primarily is the US Dollar.
3.1.2 Trade and other receivables
Trade receivables arise from sales made to customers on credit or through the collection of purchasing rebates from
suppliers not otherwise deducted from suppliers’ payable accounts. Trade receivables are recognised initially at
the value of the invoice sent to the customer (fair value) and subsequently at the amounts considered recoverable
(amortised cost). Trade receivable balances are reviewed on an on-going basis.
Period ended
29 January 2023
Period ended
30 January 2022
$000
$000
Trade receivables
1,573
426
Prepayments
2,177
2,520
Other receivables
2,434
2,136
Total trade and other receivables
6,184
5,082
No interest is charged on trade receivables.
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
43
3. Operating Assets and Liabilities
3.1.3 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using a weighted average
method and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and
condition. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs
necessary to make the sale.
The Group assesses the likely residual value of inventory. Stock provisions are recognised for inventory which is
expected to sell for less than cost and also for the value of inventory likely to have been lost to the business through
shrinkage between the date of the last applicable stocktake and balance date. In recognising the provision for inventory,
judgement has been applied by considering a range of factors including historical results, current trends and specific
product information from buyers.
Period ended
29 January 2023
Period ended
30 January 2022
$000
$000
Finished goods
123,045
125,109
Inventory provisions and adjustments
(5,253)
(5,595)
Net inventories
117,792
119,514
During the period the Group recognised $431.0 million (2022: $394.4 million) of inventory as an expense within cost of goods sold.
3.1.4 Trade and other payables
Trade and other payable amounts represent liabilities for goods and services provided to the Group prior to the end of a financial
period, which are unpaid.
Trade payables
Trade payables are recognised at the value of the invoice received from a supplier (fair value). The carrying value of trade payables is
considered to approximate fair value as the amounts are unsecured and are usually paid within 60 days of recognition.
Employee entitlements
Wages and salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be settled
within 12 months of the reporting date are recognised in other payables in respect of employees’ services up to the reporting date
and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are
recognised when the leave is taken and measured at the rates paid or payable. The liability for employee entitlements is carried at the
present value of the estimated future cash flows.
Bonus plans
A liability is recognised for bonuses payable to employees where a contractual obligation arises for an agreed level of payment
dependent on both company and individual performance criteria.
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
44
3. Operating Assets and Liabilities
Long service leave
The liability for long service leave is recognised as a non-current liability and measured as the present value of expected future
payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method.
Consideration is given to expected future wage and salary levels, history of employee departure rates and periods of service. Expected
future payments are discounted using market yields at the reporting date on government bonds with terms to maturity that match, as
closely as possible, the estimated future cash outflows.
Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated
reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
Provisions relate to returns in relation to sales of goods directly imported by the Group and are expected to be fully utilised within the
next twelve months. Provisions relating to inventory, receivables and employee benefits have been treated as part of those specific
balances. There are no other provisions relating to these financial statements.
Period ended
29 January 2023
Period ended
30 January 2022
$000
$000
Trade payables
70,709
43,585
Employee entitlements
14,928
18,465
Other payables and accruals
24,326
19,458
Provisions
110
152
Total trade and other payables
110,073
81,660
Shown in balance sheet as:
Current liabilities
109,181
80,785
Non-current liabilities
892
875
Total trade and other payables
110,073
81,660
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
45
3.2 Property, Plant and Equipment
All property, plant and equipment is stated at historical cost less depreciation and any impairment adjustments. Historical cost
includes expenditure that is directly attributable to the acquisition of property, plant and equipment.
Costs are included in an asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with an item will flow to the Group and the cost of an item can be measured reliably.
Assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date.
An asset’s carrying amount is written down immediately to its recoverable amount if its carrying amount is greater than its estimated
recoverable amount.
Gains and losses on disposals of assets are determined by comparing proceeds with carrying amounts. These gains and losses are
included in the income statement.
Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost, net of their
estimated residual values, over their estimated useful lives, as follows:
- Freehold buildings 33 years
- Plant and equipment 3 - 15 years
Property, plant and equipment is reviewed whenever events or changes in circumstances indicate that the carrying amount may not
be recoverable. An impairment loss is recognised for the amount by which an asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs to sell, or value in use.
The Group assesses whether there are indications, for example loss-making stores, for certain trigger events which may indicate that an
impairment in property, plant and equipment values exist at balance date.
3. Operating Assets and Liabilities
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
46
Land and
buildings
Plant and
equipment
Total
$000
$000
$000
At 31 January 2021
Cost
96,010
89,175
185,185
Accumulated depreciation
(6,951)
(60,837)
(67,788)
Net book value
89,059
28,338
117,397
Period ended 30 January 2022
Opening net book value
89,059
28,338
117,397
Additions
9,658
8,499
18,157
Disposals
-
(259)
(259)
Depreciation charge
(2,324)
(7,074)
(9,398)
Closing net book value
96,393
29,504
125,897
At 30 January 2022
Cost
105,668
91,268
196,936
Accumulated depreciation
(9,275)
(61,764)
(71,039)
Net book value
96,393
29,504
125,897
Period ended 29 January 2023
Opening net book value
96,393
29,504
125,897
Additions
215
15,142
15,357
Disposals
-
(422)
(422)
Depreciation charge
(2,886)
(7,654)
(10,540)
Closing net book value
93,722
36,570
130,292
At 29 January 2023
Cost
105,883
97,515
203,398
Accumulated depreciation
(12,161)
(60,945)
(73,106)
Net book value
93,722
36,570
130,292
Capital commitments
Period ended
29 January 2023
Period ended
30 January 2022
$000
$000
Capital commitments in relation to property, plant and equipment
at balance date not provided for in the financial statements
2,370
3,913
3. Operating Assets and Liabilities
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
47
3.3 Intangible Assets
Intangible assets are non-physical assets used by the Group to operate the business. Software costs have a finite useful life. Software
costs which can be capitalised are amortised on a straight-line basis over the estimated useful economic life of 2 to 5 years. Software-
as-a-service costs are expensed when they are incurred.
Software is the only intangible asset recorded in the financial statements. All software has been acquired externally.
3.4 Leases
Right-of-use assets and lease liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the
net present value of the remaining lease payments. Lease payments to be made under reasonably certain extension options are also
included in the measurement of the liabilities.
Right-of-use assets are initially recognised on commencement of lease at cost, comprising the initial amount of the lease liabilities
less any lease incentives received. Right-of-use assets are subsequently depreciated using the straight-line method from the
commencement date to the end of the lease term. In considering the lease term, the Group applies judgement in determining whether
it is reasonably certain that an extension or termination option will be exercised.
Both right-of-use assets and lease liabilities are discounted applying interest rate implicit in the lease, or if this cannot be determined,
the incremental borrowing rate at the commencement of the lease. To determine the incremental borrowing rate the Group have
applied a blended secured and unsecured borrowing rate. For the secured rate the Group have utilised third party financing options
and adjusted for an appropriate credit spread.
Extension options are included in a number of property leases across the Group. These are used to maximise operational flexibility in
terms of managing the assets used in the Group’s operation. Extension options held are exercisable only by the Group and not by the
respective lessor. During the period the Group recognised all extension options (2022: all recognised).
3. Operating Assets and Liabilities
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
48
The following tables show the movements and analysis in relation to the right-of-use assets and lease liabilities, created on the
adoption of NZ IFRS 16:
3.4.1 Right-of-use assets:
Land and Buildings
$000
Period ended 30 January 2022
Opening carrying amount
255,850
Additions
19,350
Surrender
(2,239)
Depreciation for the period
(22,172)
Closing carrying amount
250,789
At 30 January 2022
Cost
313,602
Accumulated depreciation
(62,813)
Carrying amount
250,789
Period ended 29 January 2023
Opening carrying amount
250,789
Additions
16,139
Surrender
(1,097)
Depreciation for the period
(22,130)
Closing carrying amount
243,701
At 29 January 2023
Cost
328,643
Accumulated depreciation
(84,942)
Carrying amount
243,701
3.4.2 Lease liabilities:
As at
29 January 2023
As at
30 January 2022
$000
$000
Opening value
289,218
292,271
Additions
16,139
19,350
Surrender
(1,323)
(3,244)
Interest for the period
14,859
14,218
Lease payments made
(33,924)
(33,377)
Total lease liabilities
284,969
289,218
3. Operating Assets and Liabilities
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
49
3.4.3 Lease liabilities maturity analysis:
Minimum lease
payments
Interest
Present
Value
$000
$000
$000
Within one year
34,123
(14,332)
19,791
One to five years
128,614
(47,390)
81,224
Beyond five years
239,668
(55,714)
183,954
Total
402,405
(117,436)
284,969
Current
19,791
Non-current
265,178
Total
284,969
3.4.4 Lease related expenses included in the income statement:
Period ended
29 January 2023
Period ended
30 January 2022
$000
$000
Depreciation
22,130
22,172
Short-term leases
190
129
Interest on leases
14,859
14,218
Total
37,179
36,519
3.4.5 Lease payments included in the cashflow statement:
Period ended
29 January 2023
Period ended
30 January 2022
$000
$000
Total cash outflow in relation to leases
33,924
33,377
3. Operating Assets and Liabilities
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
50
4. Investments
This section explains how the Group records investments made in listed securities.
4.1 Investment in Equity Securities
During 2015, 2018 and 2019 Briscoe Group Limited acquired a total of 48,007,465 shares in KMD Brands Limited (formerly
Kathmandu Holdings Limited) for a cost of $87,853,048. This holding represented a 6.75% ownership in KMD Brands Limited as at
29 January 2023.
These shares are equity investments, quoted in the active market, which the Group has elected to designate as a financial asset at fair
value through other comprehensive income (FVOCI). An adjustment was made at period end to reflect the fair value of these shares as
at 29 January 20231..
$000
At 31 January 2021
61,930
Additions
-
Change in fair value credited to other reserves
2,880
At 30 January 2022
64,810
Additions
-
Change in fair value credited to other reserves
(13,922)
At 29 January 2023
50,888
1. Fair value determined to be $1.06 per share as per NZX closing price of KMD Brands Limited as at 27 January 2023 (2022: $1.35)
(Level 1 in the fair value hierarchy).
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
51
5. Financing and Capital Structure
This section reports on the Group’s funding sources and capital structure, including its balance sheet liquidity and
access to capital markets.
5.1 Interest Bearing Liabilities
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised
cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the income
statement over the period of the borrowings using the effective interest method. Borrowings are classified as current liabilities unless
the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.
There were no interest bearing liabilities as at 29 January 2023 (2022: Nil). The unsecured facility with the Bank of New Zealand for
$30 million in place at the last year-end balance date of 30 January 2022, was determined to be surplus to business requirements and
was terminated on 8 June 2022.
Net finance costs
Period ended
29 January 2023
Period ended
30 January 2022
$000
$000
Interest income
2,495
399
Interest expense - leases
(14,859)
(14,218)
Interest expense – other
-
(155)
Other finance costs
(49)
(122)
Net finance cost
(12,413)
(14,096)
5.2 Financial Risk Management
The Group’s activities expose it to various financial risks including credit risk, liquidity risk and market risk (such as currency risk and
equity price risk). The Group’s overall risk management programme seeks to minimise potential adverse effects on the Group’s financial
performance. The Group uses certain derivative financial instruments to hedge certain risk exposures.
5.2.1 Derivative financial instruments
Derivatives are recognised initially at fair value on the date a derivative contract is entered into and are subsequently re-measured to
their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging
instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as hedges of highly probable
forecast transactions (cash flow hedges).
At the inception of a transaction the economic relationship between hedging instruments and hedged items, and the risk management
objective and strategy for undertaking various hedge transactions, are documented. An assessment is also documented, both at hedge
inception and on an on-going basis, of whether the derivatives that are used in hedging transactions have been and will continue to be
effective in offsetting changes in fair values or cash flows of hedged items.
Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges, is recognised in
other comprehensive income. The gain or loss relating to the ineffective portion is recognised immediately in the income statement
within cost of goods sold.
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
52
5. Financing and Capital Structure
Amounts accumulated in other comprehensive income are recycled in the income statement in the periods when the hedged item
will affect profit or loss (for instance when the forecast purchase that is hedged takes place). However, when a forecast transaction
that is hedged results in the recognition of a non-financial asset (for example, inventory) or a non-financial liability, the gains and
losses previously deferred in other comprehensive income are transferred from other comprehensive income and included in the
measurement of the initial cost or carrying amount of the asset or liability.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any
cumulative gain or loss existing in other comprehensive income at that time remains in other comprehensive income and is recognised
when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer expected
to occur, the cumulative gain or loss that was reported in other comprehensive income is immediately transferred to the income
statement within cost of goods sold.
Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of these derivative instruments are
recognised immediately in the income statement within administration expenses.
5.2.2 Credit risk
Credit risk refers to the risk of a counterparty failing to discharge an obligation. In the normal course of its business, Briscoe Group
incurs credit risk from trade receivables and transactions with financial institutions. The Group places its cash, short-term investments
and derivative financial instruments with only high-credit-rated, Board-approved financial institutions. Sales to retail customers are
settled predominantly in cash or by using major credit cards. Less than 1% of reported sales give rise to trade receivables. The Group
holds no collateral over its trade receivables.
5.2.3 Interest rate risk
The Group has no long-term interest-bearing liabilities but does have interest rate risk exposure from periodic short-term drawdowns
of established funding facilities and placements of short-term deposits, as operating cash flows necessitate. The Group’s short to
medium term liquidity position is monitored daily and reported to the Board monthly.
5.2.4 Liquidity risk
Liquidity risk is the risk that an unforeseen event or miscalculation in the required liquidity level will result in the Group foregoing
investment opportunities or not being able to meet its obligations in a timely manner, and therefore gives rise to lower investment
income or to higher borrowing costs than otherwise. Prudent liquidity risk management includes maintaining sufficient cash, and
ensuring the availability of adequate amounts of funding from credit facilities.
The Group’s liquidity exposure is managed by ensuring sufficient levels of liquid assets and committed facilities are maintained based
on regular monitoring of a rolling 3-month daily cash requirement forecast. The Group’s liquidity position fluctuates throughout the
period, being strongest immediately after the end of the period. The months leading up to Christmas trading put the greatest strain on
Group cash flows due to the build-up of inventory as well as the interim dividend payment. The Group operates well within its available
funding facilities.
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
53
The table below analyses the Group’s financial liabilities and gross-settled forward foreign exchange contracts into relevant maturity
groupings based on the remaining period from the balance sheet date to the contractual maturity date. The cash flow hedge ‘outflow’
amounts disclosed in the table are the contractual undiscounted cash flows liable for payment by the Group in relation to all forward
foreign exchange contracts in place at balance date. The cash flow hedge ‘inflow’ amounts represent the corresponding injection of
foreign currency back to the Group as a result of the gross settlement on those contracts, converted using the forward rate at balance
date. The carrying value shown is the net amount of derivative financial liabilities and assets as shown in the balance sheet. Changes in
the carrying value affect profit when the underlying inventory to which the derivatives relate, is sold.
Trade and other payables are shown at carrying value in the table. No discounting has been applied as the impact of discounting is not
significant.
An analysis detailing remaining contractual maturities for lease liabilities is shown in Note 3.4.3.
As at 29 January 2023
3 months
or less
3 – 6
months
6 – 9
months
9 – 12
months
Total
Carrying
Value
$000
$000
$000
$000
$000
$000
Trade and other payables
(90,869)
-
-
-
(90,869)
(90,869)
Forward foreign exchange contracts
Cash flow hedges:
- outflow
(23,273)
(20,786)
(16,926)
(1,166)
(62,151)
- inflow
21,940
20,020
16,562
1,156
59,678
- Net
(1,333)
(766)
(364)
(10)
(2,473)
(2,473)
As at 30 January 2022
3 months
or less
3 – 6
months
6 – 9
months
9 - 12
months
Total
Carrying
Value
$000
$000
$000
$000
$000
$000
Trade and other payables
(60,085)
-
-
-
(60,085)
(60,085)
Forward foreign exchange contracts
Cash flow hedges:
- outflow
(16,564)
(14,507)
(9,165)
(760)
(40,996)
- inflow
17,855
15,601
9,912
765
44,133
- Net
1,291
1,094
747
5
3,137
3,137
The cash flow hedges inflow amounts use the forward rate at balance date.
5. Financing and Capital Structure
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
54
5.2.5 Market risk
Equity price risk
The Group is exposed to equity price risk arising from the investment held in KMD Brands Limited, classified in the balance sheet as
investment in equity securities. (Refer note 4.1).
Foreign exchange risk
The Group is exposed to foreign exchange risk arising from currency exposures primarily to the US dollar, in respect of purchases of
inventory directly from overseas suppliers.
The Group’s foreign exchange risk is managed in accordance with Board-approved Group Treasury Risk Management Policies. The
current policy requires hedging of both committed and forecasted foreign currency payment levels across the current and subsequent
three calendar quarters. The policy is to cover 100% of committed purchases and lower levels of forecasted purchases depending on
which quarter the forecasted exposure relates to. Hedging is reviewed regularly and reported to the Board monthly.
The Group uses forward foreign exchange contracts and maintains short-term holdings of foreign currencies in foreign denominated
currency bank accounts, with major financial institutions only, to hedge its foreign exchange risk in anticipation of future purchases.
The following table shows the fair value of forward foreign exchange contracts held by the Group as derivative financial instruments at
balance date:
Period ended
29 January 2023
Period ended
30 January 2022
$000
$000
Current assets
Forward foreign exchange contracts
40
3,137
Total current derivative financial instrument assets
40
3,137
Current liabilities
Forward foreign exchange contracts
2,513
-
Total current derivative financial instrument liabilities
2,513
-
The contracts are subject to an enforceable master netting arrangement, which allows for net settlement of the relevant assets and
liabilities. For financial reporting purposes these are not offset.
Forward foreign exchange contracts – cash flow hedges
Where forward foreign exchange contracts have been designated and tested as an effective hedge the portion of the gain or loss on
the hedging instrument that is determined to be an effective hedge is recognised directly in other comprehensive income. These gains
or losses are released to the income statement at various dates over the subsequent financial period as the inventory for which the
hedge exists, is sold.
The fair value of these contracts is determined by using valuation techniques as they are not traded in an active market. The valuation
techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates.
The fair value is determined by mark-to-market valuations using forward exchange. These derivatives have been determined to be
within level 2 of the fair value hierarchy as all significant inputs required to ascertain their fair value are observable.
Forward foreign exchange contracts are used for hedging committed or highly probable forecast purchases of inventory for the
ensuing financial period. The contracts are timed to mature when major shipments of inventory are scheduled to be dispatched and
the liability settled. The cash flows are expected to occur at various dates within one year from balance date.
5. Financing and Capital Structure
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
55
At balance date these contracts are represented by assets of $40,140 (2022: $3,137,409) and liabilities of $2,513,078 (2022: $429)
and together are included in equity as part of the cash flow hedge reserve, net of deferred tax, as a net loss of $1,780,515 (2022: net
gain $2,258,626). The cash flow hedge reserve also consists of gains and losses, net of deferred tax, from foreign currencies used
as hedges, as a net loss of $88,964 (2022: net gain of $125,434). The total of these net gains and losses amount to a net loss of
$1,869,479 (2022: net gain $2,384,060).
When forward foreign exchange contracts are not designated and tested as an effective hedge, the gain or loss on the forward foreign
exchange contract is recognised in the income statement.
At balance date there are no such contracts in place (2022: Nil).
5.2.6 Sensitivity analysis
Based on historical movements and volatilities and review of current economic commentary the following movements are considered
reasonably possible over the next 12 month period:
• A shift of -10% / +10% (2022: -10% / +10%) in the NZD against the USD, from the period-end rate of 0.6506 (2022: 0.6576),
• A shift of -0.25% / +0.75% (2022: -0.25% / +1.25%) in market interest rates from the period-end weighted average deposit rate of
4.54% (2022: 1.13%),
• A shift of -10% / +20% (2022: -10% / +20%) in the NZX share price of KMD Brands Limited (formerly Kathmandu Holdings Ltd)
from the period-end closing share price of $1.06 (2022: $1.35).
If these movements were to occur, the positive / (negative) impact on consolidated profit after tax and consolidated equity for each
category of financial instrument held at balance date is presented below:
As at 29 January 2023
Interest
rate
Foreign
exchange rate
Equity
price
Carrying
-0.25%
+0.75%
-10%
+10%
-10%
+20%
amount
Profit
Equity
Profit
Equity
Equity
Equity
Equity
Equity
$000
$000
$000
$000
$000
$000
$000
$000
$000
Financial Assets:
Cash and cash equivalents1.
149,874
(267)
(267)
800
800
135
(111)
-
-
Derivatives – designated as
cashflow hedges (Forward
foreign exchange contracts)2.
40
-
-
-
-
162
(121)
-
-
Investment in equity securities3.
50,888
-
-
-
-
-
-
(5,089)
10,178
Financial Liabilities:
Derivatives – designated as
cashflow hedges (Forward
foreign exchange contracts)2.
2,513
-
-
-
-
4,619
(3,786)
-
-
Total increase / (decrease)
(267)
(267)
800
800
4,916
(4,018)
(5,089)
10,178
Receivables and payables have not been included above as they are denominated in NZD and are non-interest bearing and
therefore not subject to market risk.
5. Financing and Capital Structure
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
56
As at 30 January 2022
Interest
rate
Foreign
exchange rate
Equity
price
Carrying
-0.25%
+1.25%
-10%
+10%
-10%
+20%
amount
Profit
Equity
Profit
Equity
Equity
Equity
Equity
Equity
$000
$000
$000
$000
$000
$000
$000
$000
$000
Financial Assets:
Cash and cash equivalents1.
102,481
(180)
(180)
899
899
203
(166)
-
-
Derivatives – designated as
cashflow hedges (Forward
foreign exchange contracts)2.
3,137
-
-
-
-
3,486
(2,842)
-
-
Investment in equity securities3.
64,810
-
-
-
-
-
-
(6,481)
12,962
Financial Liabilities:
Derivatives – designated as
cashflow hedges (Forward
foreign exchange contracts)2.
-
-
-
-
-
31
(25)
-
-
Total increase / (decrease)
(180)
(180)
899
899
3,720
(3,033)
(6,481)
12,962
Receivables and payables have not been included above as they are denominated in NZD and are non-interest bearing and therefore
not subject to market risk.
1. Cash and cash equivalents include deposits at call which are at floating interest rates.
2. Derivatives designated as cashflow hedges are foreign exchange contracts used to hedge against the NZD:USD foreign exchange risk arising from
foreign denominated future purchases. There is no profit or loss sensitivity as the hedges are 100% effective.
3. Investment in equity securities represents shares held in KMD Brands Limited. There is no profit or loss sensitivity as impacts from changes in KMD
Brands Limited’s share price are accounted for through equity.
5. Financing and Capital Structure
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
57
5.3 Equity
5.3.1 Capital risk management
The Group’s capital comprises contributed equity, reserves and retained earnings.
The Group’s objective when managing capital is to achieve a balance between maximising shareholder wealth and ensuring the Group
is able to operate competitively with the flexibility to take advantage of growth opportunities as they arise. In order to meet these
objectives the Group may adjust the amount of dividend payments made to shareholders and/or seek to raise capital through debt
and/or equity. There are no specific banking or other arrangements which require the Group to maintain specified equity levels.
5.3.2 Share capital
Share capital comprises ordinary shares only. Incremental costs directly attributable to the issue of new shares or options are shown in
equity as a deduction, net of tax, from the proceeds.
All shares on issue are fully paid. All ordinary shares rank equally with one vote attached to each fully paid ordinary share and have
equal dividend rights and no par value.
Contributed equity – ordinary shares
No. of authorised shares
Share capital
Period ended
29 January 2023
Period ended
30 January 2022
Period ended
29 January 2023
Period ended
30 January 2022
Shares
Shares
$000
$000
Opening ordinary shares
222,556,300
222,466,000
61,992
61,839
Issue of ordinary shares arising from the vesting of
performance rights
89,286
90,300
1441.
1531.
Balance at end of period
222,645,586
222,556,300
62,136
61,992
1. When performance rights vest, the amount in the equity-based remuneration reserve relating to those performance rights vested is transferred to
share capital. The amount transferred for the 89,286 shares issued during the period ended 29 January 2023 was $143,969 (2022: $153,376 for
the 90,300 shares issued).
5. Financing and Capital Structure
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
58
5.3.3 Dividends
Provision is made for the amount of any dividend declared on or before the balance date but not distributed at balance date.
Period ended
29 January 2023
Cents per share
Period ended
30 January 2022
Cents per share
Period ended
29 January 2023
$000
Period ended
30 January 2022
$000
Interim dividend for the period ended
29 January 2023
12.00
-
26,718
-
Final dividend for the period ended
30 January 2022
15.50
-
34,510
-
Interim dividend for the period ended
30 January 2022
-
11.50
-
25,594
Final dividend for the period ended
31 January 2021
-
13.50
-
30,045
27.50
25.00
61,228
55,639
All dividends paid were fully imputed (refer also to Note 2.3.3 for imputation credits available for use in subsequent periods).
Supplementary dividends of $413,716 (2022: $380,308) were provided to shareholders not tax resident in New Zealand, for
which the Group received a Foreign Investor Tax Credit entitlement.
On 14 March 2023 the Directors resolved to provide for a final dividend to be paid in respect of the period ended 29 January
2023. The dividend will be paid at a rate of 16.0 cents per share for all shares on issue as at 23 March 2023, with full imputation
credits attached.
5.3.4 Reserves and retained earnings
Cashflow hedge reserve
The hedging reserve is used to record gains and losses on a hedging instrument in a cash flow hedge that are recognised
directly in other comprehensive income, as described in the accounting policy in section 5.2. The amounts are recognised as
profit or loss when the associated hedged transaction affects profit or loss. (Refer also to the consolidated statement of changes
in equity).
Equity-based remuneration reserve
The equity-based remuneration reserve is used to recognise the fair value of performance rights granted but not exercised,
lapsed or forfeited. Amounts are transferred to share capital when vested performance rights are exercised. (Refer also to the
consolidated statement of changes in equity and note 6.2).
Other reserves
Other reserves represents the adjustment made at balance date to reflect the fair value of the investment in KMD Brands
Limited. (Refer also to the consolidated statement of changes in equity and note 4.1).
5. Financing and Capital Structure
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
59
6. Other Notes
6.1 Related Party Transactions
6.1.1 Parent and ultimate controlling party
Briscoe Group Limited is the immediate parent, ultimate parent and controlling party for all companies in the Group.
During the period the Company advanced and repaid loans to its subsidiaries by way of internal current accounts. In presenting the
financial statements of the Group, the effect of transactions and balances between fellow subsidiaries and those with the Company
have been eliminated. No interest is charged on internal current accounts.
The Group undertook transactions with the following related parties as detailed below:
• The RA Duke Trust, of which RA Duke is a trustee, as owner of the Rebel Sport premises at Panmure, Auckland, received rental
payments (net of rental relief) of $674,884 (2022: $597,226) from the Group, under an agreement to lease premises to The Sports
Authority Limited (trading as Rebel Sport). The remaining non-cancellable term of this lease is 0.2 years (2022: 1.2 years) with a
payment commitment of $112,481 (2022: $787,365).
• Kein Geld (NZ) Limited, an entity associated with RA Duke, received rental payments (net of rental relief) of $596,803 (2022:
$501,999) as owner of the Briscoes Homeware premises at Wairau Park, Auckland, under an agreement to lease premises to
Briscoes (NZ) Limited. The remaining non-cancellable term of this lease is 9.6 years (2022: 0.1 years) with a payment commitment
of $6,234,564 (2022: $47,273).
• The RA Duke Trust (including RA Duke Limited) received dividends of $47,180,755 (2022: $42,891,596).
• P Duke, spouse of RA Duke, received payments of $65,000 (2022: $65,000) in relation to her employment as an overseas buying
specialist with Briscoe Group Limited, and rental payments (net of rental relief) of $956,982 (2022: $816,254) as owner of the
Briscoes Homeware premises at Panmure, Auckland under an agreement to lease premises to Briscoes (NZ) Limited.
The remaining non-cancellable term of this lease is 8.3 years (2022: 9.3 years) with a payment commitment of $8,280,775
(2022: $9,237,756).
6.1.2 Key management personnel
Key management includes the Directors of the Company and those employees who the Company has deemed to have disclosure
obligations under subpart 6 of the Financial Markets Conduct Act 2013, namely the Chief Financial Officer, the Chief Operating Officer
and the Chief People Officer.
Key management compensation was as follows:
Period ended
29 January 2023
Period ended
30 January 2022
$000
$000
Salaries and other short-term employee benefits
3,810
4,199
Equity-based remuneration
183
128
Directors’ fees
400
391
Total benefits
4,393
4,718
Key management did not receive any termination benefits during the period (2022: Nil).
Key management did not receive and are not entitled to receive any post-employment or long-term benefits (2022: Nil).
Executives (excluding directors) included in key management received dividends of $282,486 (2022: $250,195) in relation to
Briscoe Group shares held.
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
60
6.1.3 Directors’ fees and dividends
Directors received directors’ fees and dividends in relation to their personally held shares as detailed below:
Period ended
29 January 2023
Period ended
30 January 2022
Directors’ fees
Dividends
Directors’ fees
Dividends
$000
$000
$000
$000
Executive Director
RA Duke
-
-
-
-
Non-Executive Directors
RPO’L Meo
154
-
148
-
AD Batterton
82
-
82
-
RAB Coupe
87
3
85
3
HJM Callaghan
77
-
76
-
400
3
391
3
The following Directors received dividends in relation to their non-beneficially held shares as detailed below:
Period ended
29 January 2023
Period ended
30 January 2022
$000
$000
Executive Director
RA Duke
47,181
42,892
Non-Executive Directors
RPO’L Meo
28
25
AD Batterton
6
5
RAB Coupe
-
-
HJM Callaghan
-
-
6. Other Notes
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
61
6.2 Employee Equity-Based Remuneration
6.2.1 Equity settled performance rights
The Senior Executive Incentive Plan grants Group employees performance rights subject to performance hurdles being met. The fair
value of rights granted is recognised as an employee expense in the income statement with a corresponding increase in the employee
share-based payment reserve. The fair value is measured at grant date and amortised over the vesting periods. When performance
rights vest, the amount in the share-based payments reserve relating to those rights is transferred to share capital. There is no exercise
price for these performance rights and there is no right to dividends during the vesting periods.
On 26 March 2019 the Board approved the Briscoe Group Senior Executive Incentive Plan to grant performance rights to key
senior management personnel as a long-term incentive programme. The fifth tranche of performance rights were issued under this
programme during the period.
Performance rights granted are summarised below:
Tranche
Grant Date
Balance at
start of period
(number)
Granted during
the period
(number)
Vested during
the period
(number)
Lapsed/forfeited
during the period
(number)
Balance at the
end of period
(number)
1
15 Apr 2019
-
-
-
-
-
2
26 Jun 2019
89,286
-
(89,286)
-
-
3
30 Jul 2020
136,218
-
-
(16,026)
120,192
4
15 Jun 2021
83,334
-
-
(8,772)
74,562
5
5 Aug 2022
-
137,842
-
(11,865)
125,977
308,838
137,842
(89,286)
(36,663)
320,731
In each tranche the performance rights are subject to a combination of an absolute Total Shareholder Return (TSR) growth hurdle and/
or an EPS growth hurdle. EPS growth hurdle is considered a non-market condition. The relative hurdle weighting for unvested tranches
is shown in the table below:
Tranche
Grant Date
TSR Weighting
EPS Weighting
3
30 Jul 2020
50%
50%
4
15 Jun 2021
50%
50%
5
5 Aug 2022
50%
50%
The proportion of performance rights subject to the absolute TSR growth hurdle which may vest is dependent on Briscoe Group
Limited’s TSR compound annual growth rate (CAGR) across a 3-year measurement period. For each tranche that vests the rights
are awarded on a straight-line basis dependent on the TSR CAGR achieved. The percentage of TSR related performance rights vest
according to the following performance criteria for each unvested tranche:
% Vesting
Tranche 3
Tranche 4
Tranche 5
0%
< 12.4% CAGR
< 5.0% CAGR
< 5.7% CAGR
50%
= 12.4% CAGR
= 5.0% CAGR
= 5.7% CAGR
51% - 99% (Straight-line prorata)
> 12.4%, < 16.0% CAGR
> 5.0%, < 5.5% CAGR
> 5.7%, < 6.7% CAGR
100%
=> 16.0% CAGR
=> 5.5% CAGR
=> 6.7% CAGR
6. Other Notes
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
62
The TSR performance is calculated across the following periods:
Tranche
Performance Period
3
Announcement date of FY 2019/20 Result to announcement date of FY 2022/23 Result
4
Announcement date of FY 2020/21 Result to announcement date of FY 2023/24 Result
5
Announcement date of FY 2021/22 Result to announcement date of FY 2024/25 Result
The fair value of the TSR performance rights have been valued under a variant of the dividend adjusted Binomial Options Pricing
Model (BOPM). The fair value of TSR performance rights, along with the assumptions used to simulate the future share prices are
shown below:
Tranche 3
Tranche 4
Tranche 5
Fair value of TSR performance rights
$47,200
$97,501
$143,287
Current price at grant date
$3.37
$5.75
$5.56
Risk free interest rate
0.30%
0.60%
3.54%
Expected life (years)
2.63
2.75
2.75
Expected share volatility1.
24%1.
24%2.
24%3.
1. Volatility represents the volatility of the Briscoe Group (BGP) NZD share price over a five-year period to July 2020.
2. Volatility represents the volatility of the Briscoe Group (BGP) NZD share price based on the average 90 day volatility for the past 3 years
(measured on a daily basis).
3. Volatility represents the volatility of the Briscoe Group (BGP) NZD share price based on the average weekly volatility over the last year
(weekly data).
The estimated fair value for each tranche of performance rights issued is amortised over the vesting period from the grant date.
The proportion of performance rights subject to the EPS growth hurdle which may vest is dependent on Briscoe Group Limited’s EPS
compound annual growth rate (CAGR) across a 3-year measurement period. For each tranche that vests the rights are awarded on a
straight-line basis dependent on the EPS CAGR achieved. The percentage of EPS related performance rights vest according to the
following performance criteria:
% Vesting
Tranche 3
Tranche 4
Tranche 5
0%
< 1.8% CAGR
< 2.5% CAGR
< 1.1% CAGR
50%
= 1.8% CAGR
= 2.5% CAGR
= 1.1% CAGR
51% - 99% (Straight-line prorata)
> 1.8%, < 4.6% CAGR
> 2.5%, < 4.6% CAGR
> 1.1%, < 2.6% CAGR
100%
=> 4.6% CAGR
=> 4.6% CAGR
=> 2.6% CAGR
The EPS performance is calculated across the following periods:
Tranche
Performance Period
3
FY 2022/23 EPS relative to FY 2019/20 EPS
4
FY 2023/24 EPS relative to FY 2020/21 EPS
5
FY 2024/25 EPS relative to FY 2021/22 EPS
The fair value of the EPS performance rights have been assessed as the Briscoe Group Limited’s share price as at grant date less the
present value of the dividends forecast to be paid prior to each vesting date. The fair value of each EPS unvested performance right
has been calculated to be $2.76, $5.17 and $4.89 for tranche 3, tranche 4 and tranche 5, respectively.
The estimated fair value for each tranche of performance rights issued is amortised over the vesting period from grant date.
Vesting of performance rights also requires the employee to remain in employment with the Company during the performance period.
The Company has expensed in the income statement $275,642 (2022: $217,148) in relation to performance rights.
6. Other Notes
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
63
6.2.2 Equity-based remuneration reserve
Period ended
29 January 2023
Period ended
30 January 2022
$000
$000
Balance at beginning of period
566
444
Current period amortisation
276
217
Performance rights vested transferred to share capital
(144)
(153)
Performance rights forfeited and amortised in previous years
(24)
-
Deferred tax on performance rights
(99)
58
Balance at end of period
575
566
6.3 Contingent Liabilities
A proceeding for unspecified damages by a former supplier against Briscoes (New Zealand) Limited and Briscoe Group Limited was
served on 10 February 2023. It relates to representations allegedly made by the Group concerning their trading relationship, which the
supplier claims contravened the Fair Trading Act and the Contracts and Commercial Law Act. The Group firmly denies the allegations
and is actively defending the claim. It is not practical to estimate the potential effect or the timing of the claim as the proceeding is at
an early stage and the damages sought are currently unquantified. (2022: Nil).
6.4 Climate Related Risks
As part of its risk management framework the Group continues to monitor its exposure to risk, including climate related risk and
related regulatory reporting requirements. Briscoe Group is reviewing and will report on exposure to climate related risk in line with
the Aotearoa New Zealand Climate Standards released 15 December 2022. Assessment of the financial impacts of climate related
risks and opportunities has not yet been completed but as at the date of these financial statements we have not identified any material
impacts to disclose. The Group is exposed to physical risks such as damage to store network and disruption to supply and distribution
channels, caused by extreme weather events. The Group’s monitoring of these risks has not identified anything material to date.
Emissions measurement systems are currently being implemented with a view to commence reporting for the financial year ended
January 2024.
6.5 Events After Balance Date
On 14 March 2023 the Directors resolved to provide for a final dividend to be paid in respect of the period ended 29 January 2023.
The dividend will be paid at a rate of 16.0 cents per share for all shares on issue as at 23 March 2023, with full imputation credits
attached (Note 5.3.3).
6.6 New Accounting Standards
There were no new standards applied during the period.
Certain new accounting standards, amendments to accounting standards and interpretations have been published that are not
mandatory for the 29 January 2023 reporting period and have not been early adopted by the Group. These standards, amendments or
interpretations are not expected to have a material impact on the entity in the current or future reporting periods and on foreseeable
future transactions.
6. Other Notes
For the 52 week period ended 29 January 2023
Briscoe Group Limited Annual Report 2023 | Consolidated Financial Statements
64
Independent auditor’s report
To the shareholders of Briscoe Group Limited
Our opinion
In our opinion, the accompanying consolidated financial statements of Briscoe Group Limited (the
Company), including its subsidiaries (the Group), present fairly, in all material respects, the financial position
of the Group as at 29 January 2023, its financial performance and its cash flows for the 52-week period then
ended in accordance with New Zealand Equivalents to International Financial Reporting Standards (NZ
IFRS) and International Financial Reporting Standards (IFRS).
What we have audited
The Group's consolidated financial statements comprise:
the consolidated balance sheet as at 29 January 2023;
the consolidated income statement for the 52-week period then ended;
the consolidated statement of comprehensive income for the 52-week period then ended;
the consolidated statement of changes in equity for the 52-week period then ended;
the consolidated statement of cash flows for the 52-week period then ended; and
the notes to the consolidated financial statements, which include significant accounting policies and
other explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs (NZ))
and International Standards on Auditing (ISAs). Our responsibilities under those standards are further
described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the Group in accordance with Professional and Ethical Standard 1 International
Code of Ethics for Assurance Practitioners (including International Independence Standards) (New Zealand)
(PES 1) issued by the New Zealand Auditing and Assurance Standards Board and the International Code of
Ethics for Professional Accountants (including International Independence Standards) issued by the
International Ethics Standards Board for Accountants (IESBA Code), and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
Other than in our capacity as auditor we have no relationship with, or interests in, the Group.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the consolidated financial statements of the current period. These matters were addressed in the
context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
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65
Description of the key audit matter
How our audit addressed the key audit matter
Inventory existence and valuation
At 29 January 2023, the Group held
inventories of $117.8 million. Given the
value of inventories relative to the total
assets of the Group, and the judgments
applied in provisioning against inventory
shrinkage, slow moving and obsolete
inventory, this has been considered a key
audit matter.
As described in note 3.1.3 to the
consolidated financial statements,
inventories are stated at the lower of cost
and net realisable value.
The Group has sophisticated inventory
systems in place to accurately record and
report inventory movements and the value of
inventory on hand. Cyclical counts of
inventories are performed at various times
throughout the period which includes an
assessment of slow moving and obsolete
stock. The cyclical counts provide
management with evidence over quantity
and quality of inventory on hand.
Management applies judgement in
determining inventory valuation, in particular
the level of provisions for inventory which is
expected to sell for less than cost due to
obsolescence, and adjustments for
unearned rebate income and inventory
shrinkage since the last stock count.
Our audit procedures included:
gaining an understanding of inventory processes
and assessing the design of certain inventory
controls, particularly controls over the cyclical
counting process;
observing management’s stocktake process at
selected locations and undertaking our own test
counts. For those locations not visited, on a
sample basis, inspecting the results of stock
counts and confirming stock count variances
were appropriately adjusted;
on a sample basis, testing the cost of inventory
to supplier invoices or contracts providing
evidence to support the accuracy of inventory
costing;
corroborating specific elements of our
understanding of the inventory provisioning
process with merchandising personnel outside of
the finance function;
testing that period-end inventory is carried at
lower of cost and net realisable value by testing
a sample of inventory items to the most recent
retail price less costs to sell;
on a sample basis, testing unearned rebate
income to supplier contracts;
assessing the shrinkage provision by testing the
shrinkage rate used to calculate the provision
since the last store stock counts. This includes
comparing the rate used to the actual shrinkage
rates previously observed and reviewing the
level of actual inventory shrinkage recorded
during the current period; and
performing analytical procedures over material
inventory provisions to assess adequacy.
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66
Description of the key audit matter
How our audit addressed the key audit matter
Contingent liabilities
As disclosed in Note 6.3 of the consolidated
financial statements, proceedings were
served on 10 February 2023 against the
Group by a former supplier in relation to
representations allegedly made by the
Group concerning their trading relationship,
which the supplier claims contravened the
Fair Trading Act 1986 and the Contract and
Commercial Law Act 2017. The outcome of
the matter remains uncertain and the
damages sought by the former supplier have
not been quantified.
The Group has considered the claim and
disclosed the matter as a contingent liability
in the consolidated financial statements.
Due to the proceedings being at an early
stage and therefore, the judgements and
uncertainties involved, we have determined
that this is a key audit matter.
Our audit procedures included:
reading the statement of claim that has been
served against the Group;
discussing the matter with key management and
those charged with governance;
reading the management paper on the matter;
discussing the matter with the Group’s external
legal advisors;
evaluating the Group’s assessment of the matter
as a contingent liability against the criteria
outlined in NZ IAS 37 Provisions, contingent
liabilities and contingent assets; and
assessing the appropriateness of the associated
disclosure in the consolidated financial
statements.
Our audit approach
Overview
Overall group materiality: $6,150,000, which represents approximately
5% of profit before tax.
We chose profit before tax as the benchmark because, in our view, it is
the benchmark against which the performance of the Group is most
commonly measured by users, and is a generally accepted benchmark.
We selected transactions and balances to audit based on the overall
group materiality to Briscoe Group Limited at a consolidated level rather
than determining the scope of procedures to perform by auditing only
specific subsidiaries or entities.
As reported above, we have two key audit matters, being:
Inventory existence and valuation
Contingent liabilities
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in
the consolidated financial statements. In particular, we considered where management made subjective
judgements; for example, in respect of significant accounting estimates that involved making assumptions
and considering future events that are inherently uncertain. As in all of our audits, we also addressed the
Briscoe Group Limited Annual Report 2023 | Independent Auditor’s Report
67
risk of management override of internal controls, including among other matters, consideration of whether
there was evidence of bias that represented a risk of material misstatement due to fraud.
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain
reasonable assurance about whether the consolidated financial statements are free from material
misstatement. Misstatements may arise due to fraud or error. They are considered material if, individually or
in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of the consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Group materiality for the consolidated financial statements as a whole as set out
above. These, together with qualitative considerations, helped us to determine the scope of our audit, the
nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and in aggregate, on the consolidated financial statements as a whole.
How we tailored our group audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on
the consolidated financial statements as a whole, taking into account the structure of the Group, the
accounting processes and controls, and the industry in which the Group operates.
Other information
The Directors are responsible for the other information. The other information comprises the information
included in the Annual report and the final NZX announcement, but does not include the consolidated
financial statements and our auditor's report thereon. The Annual report and the final NZX announcement is
expected to be made available to us after the date of this auditor's report.
Our opinion on the consolidated financial statements does not cover the other information and we do not
and will not express any form of audit opinion or assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be
materially misstated.
When we read the other information not yet received, if we conclude that there is a material misstatement
therein, we are required to communicate the matter to the Directors and use our professional judgement to
determine the appropriate action to take.
Responsibilities of the Directors for the consolidated financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of the
consolidated financial statements in accordance with NZ IFRS and IFRS, and for such internal control as
the Directors determine is necessary to enable the preparation of consolidated financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Directors are responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated 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 (NZ) and ISAs 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 consolidated financial statements.
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68
A further description of our responsibilities for the audit of the consolidated financial statements is located at
the External Reporting Board’s website at:
https://www.xrb.govt.nz/assurance-standards/auditors-responsibilities/audit-report-1/
This description forms part of our auditor’s report.
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our audit work has been undertaken
so that we might state those matters which 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 shareholders, as a body, for our audit work, for this report or
for the opinions we have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Indumin Senaratne
(Indy Sena).
For and on behalf of:
Chartered Accountants
14 March 2023
Auckland
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69
Corporate Governance
Briscoe Group is committed to maintaining the highest standards of governance by implementing best practice structures and
policies. This Corporate Governance Statement sets out the corporate governance policies, practices, and processes adopted or
followed by Briscoe Group (including the guiding principles, authority, responsibilities, membership and operation of the Board
of Directors) and has been approved by the Board.
The best practice principles (and underlying recommendations) which Briscoe Group has had regard to in determining its
governance approach, are the principles set out in the NZX Corporate Governance Code (‘NZX Code’). The Board’s view is that
Briscoe Group’s corporate governance policies, practices and processes generally follow the recommendations set by the NZX
Code. This Corporate Governance Statement includes disclosure of the extent to which Briscoe Group has followed each of
the recommendations in the NZX Code (or, if applicable, an explanation of why a recommendation was not followed and any
alternative practices followed in lieu of the recommendation).
Briscoe Group Limited is a company incorporated in New Zealand and is also registered in Australia as a foreign company
under the name Briscoe Group Australasia Limited. It is listed on the NZX and also, as a foreign exempt entity, on the Australian
Securities Exchange (ASX). As such Briscoe Group is exempt from complying with most of the ASX’s Listing Rules and must
undertake to comply with the listing rules of its home exchange (NZX).
Further information about Briscoe Group’s corporate governance framework (including the Board and Board committee
charters, codes and selected policies referred to in this section) is available to view at www.briscoegroup.co.nz.
Corporate
Governance
Statement
Briscoe Group Limited Annual Report 2023 | Corporate Governance Statement
70
Principle 1 – Code of Ethical Behaviour
Directors should set high standards of ethical behaviour, model this behaviour and hold
management accountable for these standards being followed throughout the organisation.
Code of Values and Conduct and Related Policies
Recommendation 1.1: “The Board should document minimum standards of ethical behaviour to which the issuer’s Directors and
employees are expected to adhere (a code of ethics) and comply with the other requirements of Recommendation 1.1 of the
NZX Code.”
Briscoe Group requires its Directors, senior management and employees to maintain the highest standards of honesty,
integrity and ethical conduct in day-to-day behaviour and decision making. The Board has adopted a Code of Conduct which
incorporates the requirements set out in Recommendation 1.1, forms part of the induction process for all new employees and
is available on Briscoe Group’s website. The Code of Conduct is reviewed annually and was last reviewed in May 2022. All
Directors and employees must provide acknowledgement that they have read and understood the content. To ensure that our
expectations are known and understood, both training and reinforcement are delivered via our online learning platform as part of
initial and ongoing training.
Trading in Company Securities Policy
Recommendation 1.2: “An issuer should have a financial product dealing policy which applies to employees and Directors.”
The Trading in Company Securities Policy sets out Briscoe Group’s requirements and expectations for all Directors and
employees in relation to trading Briscoe Group shares. The policy is available on Briscoe Group’s website. In general, Directors
and employees are allowed to trade in Briscoe Group shares during two ‘trading windows’. Trading windows commence on
the day after the half-year and full-year results are announced to the market and run for a period of 60 days. Trading outside
these windows is generally prohibited. Proposed transactions by Directors and employees during the trading windows require
approval. The policy also provides that no Directors, employees or independent contractors can trade shares if they are in
possession of price sensitive information that is not publicly available. The policy was updated during the year to include
provision for the use of fixed trading plans by certain executives upon application and approval by the Board.
Principle 2 – Board Composition and Performance
To ensure an effective Board, there should be a balance of independence, skills, knowledge,
experience and perspectives.
Board Charter
Recommendation 2.1: “The Board of an issuer should operate under a written charter which sets out the roles and
responsibilities of the Board. The Board charter should clearly distinguish and disclose the respective roles and responsibilities of
the Board and management.”
The Board has adopted a formal Board Charter which sets out the respective roles, responsibilities, composition and structure of
the Board and senior management, and this is available on Briscoe Group’s website. The Board is responsible for overseeing the
management of the Company and its subsidiaries and for directing performance by optimising the short-term and long-term
best interests of the Company and its Shareholders. This includes approving the Company’s objectives, reviewing the major
strategies for achieving them and monitoring the Company’s performance. The focus of the Board is the creation of company
and shareholder value and ensuring the Company is committed to best practice. Responsibility for the day-to-day management
of Briscoe Group has been delegated to the Managing Director and other senior management. Management are responsible
for implementing the objectives and strategies approved by the Board, within the ambit of risk set by the Board. Management
provides regular updates to the Board to enable the Board to perform its responsibilities. The Company Secretary provides
company secretarial services to the Board and is accountable to the Board through the Chair.
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71
Nomination and Appointment of Directors
Recommendation 2.2 and 2.3: “Every issuer should have a procedure for the nomination and appointment of Directors to
the Board. An issuer should enter into written agreements with each newly appointed Director establishing the terms of their
appointment.”
The Board collectively considers the nomination of Directors. In doing this, the Board’s procedure involves careful
consideration of the composition of the Board in relation to the Company’s needs and operating environment to ensure
relevant skills and experience. This also applies to the consideration of additional or replacement Directors, subject to the
constitutional limitation of the number of Directors. In so doing, as noted above, the priority must be on ensuring the skills,
experience and diversity of the Board, and the skills that are necessary or desirable for the Board to fulfil its governance role
and to contribute to the long-term strategic direction of the company. The Board may engage consultants to assist in the
identification, recruitment and appointment of suitable candidates.
When appointing new Directors, the Board ensures that the requirements under the Company’s constitution and NZX
Listing Rules in respect of Directors will continue to be satisfied. There must be at least three and no more than five Directors,
at least two of whom are resident in New Zealand and also at least two Directors must be determined by the Board to be
independent (as defined in the NZX Listing Rules). The Board also takes into consideration recommendation 2.8 - a majority
of the Board should be independent Directors. The current composition of the Board of Directors meets these requirements.
The constitution provides that Directors may be appointed by the Board (to fill vacancies) or by Shareholders. Directors who
are appointed by the Board are subject to re-election at the next annual Shareholder meeting. Directors are required (under
the constitution and NZX Listing Rules) to retire by rotation, but they may be eligible for re-election with nominations to be
made by Shareholders. All new Directors enter into a written agreement with Briscoe Group setting out the terms of their
appointment.
Directors
Recommendation 2.4: “Every issuer should disclose information about each Director in its Annual Report or on its website,
including a profile of experience, length of service, independence and ownership interests and director attendance at board
meetings.”
The Board currently comprises five Directors; four independent and one Executive Director. The Board has considered which
of its Directors are deemed to be independent for the purposes of the NZX Listing Rules and has determined that as at 29
January 2023, four Directors are independent Directors, including the Chair (Dame Rosanne Meo) and the Chair of the Audit
and Risk Committee (Tony Batterton). As at the date of this Annual Report, the Directors are:
Dame Rosanne Meo
Chair, Independent
Appointed May 2001
Rod Duke
Executive Director
Appointed March 1992
Tony Batterton
Independent
Appointed June 2016
Andy Coupe
Independent
Appointed October 2016
Mark Callaghan
Independent
Appointed January 2021
The Directors (other than Dame Rosanne Meo) have carefully considered Dame Rosanne Meo’s long tenure as a Director and
as Chair, and whether it leads to any influence or perceived influence, in a material way, affecting her capacity to bring an
independent view, to act in the best interests of Briscoe Group, or to represent shareholders. They have observed the robust
and critical approach that she brings in challenging management and strategic priorities, while clearly facilitating open and
constructive dialogue both between members of the Board, and also between the management and the other members of the
Board. As such, they have determined that Dame Rosanne Meo continues to qualify as an independent Director.
A profile of the qualifications and experience for each Director is available on Briscoe Group’s website.
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72
Director
Number of shares in which a relevant interest is held
Dame Rosanne Meo
100,000 shares
Rod Duke
171,566,383 shares
Tony Batterton
20,000 shares
Andy Coupe
10,000 shares
Director attendance at Board meetings is set out in the disclosures relating to recommendation 3.5 below.
Directors disclosed the following relevant interests in shares as at 29 January 2023:
Diversity
Recommendation 2.5: “An issuer should have a written Diversity Policy which includes requirements for the Board or a relevant
committee of the Board to set measurable objectives for achieving diversity (which, at a minimum, should address gender
diversity) and to assess annually both the objectives and the entity’s progress in achieving them. The issuer should disclose the
policy or a summary of it.”
We appreciate that our workforce, including potential employees, comes from all walks of life. Every individual is unique, having
different skills and experiences including but not limited to educational opportunity and achievement. People come from many
cultures and backgrounds, along with a wide range of other personal attributes including gender, age, disability (mental, learning
or physical), economic background, language(s) spoken, marital/partnered status, physical appearance, race, religious beliefs
and gender identity or orientation. Briscoe Group has a commitment to attracting, selecting, developing and retaining the most
suitable employees from this diverse range of attributes. The Group’s Diversity and Inclusiveness Policy is available on Briscoe
Group’s website.
Historically, information gathered through our recruitment processes was limited in terms of data collected for purposes of
assessing diversity and progress in this area. We recognise that although it is critical to prevent bias in selection and hiring
practices through presentation of candidate information this must be balanced with having access to this data to ensure we
monitor and champion practices and decisions which enhance diversity. To that end, in 2022 we worked with an external project
team to identify good practice around gathering and using ethnicity information both for potential candidates and existing
employees. The information itself is available for use in reporting but is protected so as to avoid bias in appointment decisions.
In 2023 the last stage of this project – to collect this information from existing employees, with their knowledge and consent,
will be managed through our Employee Self-Service platform. As a consequence of the work we have performed we now have
ethnicity information for 46.9% of our team. Expansion of gender identification options has enabled a number of our team to
communicate that they identify as a different gender than they previously nominated.
We have previously acknowledged the retail sector has had high representation of women in its operations and yet has seen
underrepresentation in senior management roles. Last year we noted that 37% of our high potential talent in our organisation
were female. We have seen a continued trend for changes in the gender mix of this critical pool of people with an increasing
proportion of leaders within our business being female. The ongoing restrictions on new migrants being able to enter New
Zealand for employment opportunities has meant little change in the past couple of years and with government policy settings
we see this as unlikely to change in the near future.
Previously we had identified an inadequate focus on retail specific tertiary education along with a tendency for fewer career
retailers to engage in tertiary education. We continue to provide support for team members studying towards Master of Business
Administration degrees albeit their studies being disrupted due to the ongoing impacts of Covid. Briscoe Group recognises that
support for these studies is vital. We assist our managers with a combination of contribution to fees as well as paid time out of
the workplace for study and exam purposes.
The Board and management recognise that diversity without inclusiveness does not result in the balanced workforce desired
in the business. Briscoe Group has in place policies and procedures to encourage and support equitable treatment for all
employees and includes consideration of internal applicants for jobs with the Group. We do however agree with a recent
Institute of Directors commentary which stated that diversity should be approached through the lens of demonstrated
competence.
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73
Director Training
Recommendation 2.6: “Directors should undertake appropriate training to remain current on how to best perform their duties as
Directors of an issuer.”
The Board expects all Directors to undertake continuous education to remain current on how to best perform their
responsibilities and keep abreast of changes and trends in economic, political, social, financial and legal climates and
governance practices. The Board also ensures that new Directors are appropriately introduced to management and the
business, that all Directors are updated on relevant industry and company issues and receive copies of appropriate company
documents to enable them to perform their roles. The expectation that Directors undergo ongoing training (informal or formal)
and education is reinforced in the Board Charter.
Board Evaluation
Recommendation 2.7: “The Board should have a procedure to regularly assess Director, Board and committee performance.”
The Chair of the Board leads regular internal performance reviews in addition to engaging a bi-annual external evaluation of
the performance of Directors, the Board as a whole, and of the Board committees against the Board and committee charters,
including seeking Directors’ views relating to Board and committee process, efficiency and effectiveness. The Chair of the Board
also engages with individual Directors to evaluate and discuss performance and professional development.
Independent Directors
Recommendation 2.8: “A majority of the Board should be independent Directors.”
The Board currently comprises five Directors; four independent and one executive Director. Further details of the Board
composition are above at Recommendation 2.4.
Briscoe Group has partnered with a number of external organisations to develop and deliver educational materials in this area, all
of which are available through our online training platform. Our LEAP programme, developed in conjunction with expert external
partners, is available to all employees and continues to be a foundation to diversity and inclusiveness awareness.
We acknowledge that any narrowness in diversity is not sustainable and believe that an increased emphasis on a collaborative
and inclusive culture and focus on developing talent will secure this realignment. Ensuring that all employees at all levels and in
all workplace environments feel secure and safe, confident and appreciated through understanding the importance of diversity
is most important to us.
A breakdown of the gender composition of Directors and officers as at the Company’s balance date, including comparative
figures, is shown below:
29 January 2023
30 January 2022
Female
Male
Female
Male
Directors
1
4
1
4
Officers1.,2.
-
3
-
3
Other Senior Management3.
1
3
2
2
1. Excludes Managing Director (included in breakdown of Directors).
2. Officers is defined as the members of the senior management team, who report either directly to the Board or to the Group
Managing Director.
3. General Manager positions not reporting directly to the Group Managing Director.
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74
Separation of Board Chair and CEO
Recommendation 2.9: “An issuer should have an independent chair of the board. If the chair is not independent, the chair and
the CEO should be different people.”
The Chair of the Board is responsible for leading the Board, facilitating the effective contribution of all Directors, representing
the Board to Shareholders, and promoting constructive and respectful relations between Directors and between the Board
and management. The role of the Chair of the Board is further documented in the Board Charter, which is available on Briscoe
Group’s website.
The Board Charter makes explicit that the Chair of the Board and the Managing Director roles are separate. (i.e. a Director must
not simultaneously hold both positions). This requirement recognises the importance of the separation between management of
the company and the Chair’s governance role, in enabling the Board to effectively challenge management.
Principle 3 – Board Committees
The Board should use committees where this will enhance its effectiveness in key areas,
while still retaining Board responsibility.
Audit and Risk Committee
Recommendation 3.1: “An issuer’s audit committee should operate under a written charter. Membership on the audit committee
should be majority independent and comprise solely of non-executive directors of the issuer. The chair of the audit committee
should be an independent director and not the Chair of the Board.”
The Audit and Risk Committee operates under a written Charter, and this is available on Briscoe Group’s website. The Audit
and Risk Committee currently comprises Tony Batterton (Chair), Dame Rosanne Meo and Andy Coupe, whose qualifications
and experience are available on the Briscoe Group website. The Audit and Risk Committee met two times during the year. In
addition to these two meetings the Management Risk Committee met four times during the year to review, assess and update
the Company’s risk matrix. The changes made to risk matrix were shared with the Board at the half year and full year Board
meetings. The Audit and Risk Committee advises and assists the Board in discharging its responsibilities with respect to financial
reporting, compliance and risk management practices of Briscoe Group.
Recommendation 3.2: “Employees should only attend Audit Committee meetings at the invitation of the Audit Committee.”
The Managing Director, Chief Financial Officer, Chief Operating Officer, Finance Manager and Internal Audit Manager attend
Audit and Risk Committee meetings at the invitation of the Audit and Risk Committee. Briscoe Group’s external auditor also
attends meetings at the committee’s invitation. The Audit and Risk Committee receives reports from the external auditor
without management present, concerning any matters that arise in connection with the performance of management’s role and
otherwise as necessary to protect the independence of the Audit and Risk Committee from undue influence.
Remuneration Committee
Recommendation 3.3: “An issuer should have a Remuneration Committee which operates under a written charter (unless
this is carried out by the whole Board). At least a majority of the Remuneration Committee should be independent directors.
Management should only attend Remuneration Committee meetings at the invitation of the Remuneration Committee.”
The Board operates a Human Resources Committee which incorporates remuneration. The Human Resources Committee
currently comprises Andy Coupe (Chair), Dame Rosanne Meo and Mark Callaghan. It met five times during the year. It assists
the Board in discharging its responsibilities with respect to the remuneration and performance of the Group Managing Director
and other senior executives, remuneration of Directors and human resources policy and strategy. The Human Resources
Committee operates under the Human Resources Committee Charter, and this is available on Briscoe Group’s website. Selected
management only attend Human Resource Committee meetings at the invitation of the Human Resources Committee.
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Takeover Protocols
Recommendation 3.6: “The Board should establish appropriate protocols that set out the procedure to be followed if there is a
takeover offer for the issuer (amongst other matters).”
Given Briscoe Group’s shareholding structure, with the largest Shareholder being a member of the Board, the Board considers
the likelihood of an unanticipated takeover to be low, and so the Board does not consider this recommendation to be necessary.
However, in the event of a takeover offer, the Board has already agreed that a Takeover Response Committee would be convened,
comprised of Independent Directors. That committee would consider the Company’s actions in relation to the takeover offer,
including seeking appropriate legal, financial and strategic advice, complying with takeover regulation (including the appointment
of an independent advisor under the Takeovers Code and the preparation of a Target Company Statement) and determining what
additional information (if any) would be provided by the Company to the bidder.
Nomination Committee
Recommendation 3.4: “An issuer should establish a nomination Committee to recommend Director appointments to the
Board (unless this is carried out by the whole Board), which should operate under a written charter. At least a majority of the
Nomination Committee should be independent Directors.”
The Board does not operate a separate Nomination Committee, as Director appointments are considered by the Board as a
whole. The Board’s procedure for the nomination and appointment of Directors is summarised under Principle 2 above (under
the heading “Nomination and Appointment of Directors”).
Overview of Board Committees
Recommendation 3.5: “An issuer should consider whether it is appropriate to have any other Board committees as standing
Board committees. All committees should operate under written charters. An issuer should identify the members of each of its
committees, and periodically report member attendance.”
The Board does not operate any other committees apart from the Audit and Risk Committee and the Human Resources
Committee. Briscoe Group has considered whether any other standing Board committees are appropriate and has determined
they are not.
Each committee operates under a charter which is available on Briscoe Group’s website. Committee members are appointed
from members of the Board and membership is reviewed on an annual basis. Any recommendations made by the committees are
submitted to the full Board for formal approval.
Attendance at Board and Committee Meetings
for the Year Ended 29 January 2023
Board
Audit and Risk
Human Resources
Number of meetings held
141.
2
5
Attended
Attended
Attended
Dame Rosanne Meo
14
2
5
Rod Duke
14
2
5
Tony Batterton
14
2
-
Andy Coupe
13
2
5
Mark Callaghan
14
2
5
1. Includes two meetings of the Board held immediately after the half and full-year Audit and Risk Committee meetings, to approve
Group resolutions associated with releases to NZX and ASX, financial statements and dividends.
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Principle 4 – Reporting and Disclosure
The Board should demand integrity in financial and non-financial reporting, and in the
timeliness and balance of corporate disclosures.
Continuous Disclosure
Recommendation 4.1: “An issuer’s Board should have a written Continuous Disclosure Policy.”
As a listed company, there is an imperative to ensure the market is informed, and the listed securities are being fairly valued by the
market. In addition to statutory disclosures, the company provides ongoing updates of its operations. This material is made publicly
available through releases to the NZX and ASX, in accordance with the relevant Listing Rules. Briscoe Group has a Continuous
Disclosure Policy, and this is available on Briscoe Group’s website. The purpose of this policy is to: ensure Briscoe Group complies
with its continuous disclosure obligations; ensure timely, accurate and complete information is provided to all Shareholders and
market participants; and outline the responsibilities in relation to the identification, reporting, review and disclosure of material
information relevant to Briscoe Group.
Charters and Policies
Recommendation 4.2: “An issuer should make its code of ethics, Board and committee charters and the policies recommended
by NZX Code, together with any other key governance documents, available on its website.”
Information about Briscoe Group’s corporate governance framework (including Code of Conduct, Board and Board committee
charters, and other selected key governance codes and policies) is available to view on Briscoe Group’s website.
Financial and Non-Financial Reporting
Recommendation 4.3: “Financial reporting should be balanced, clear and objective. An issuer should provide non-financial
disclosure at least annually, including considering environmental, economic and social sustainability factors and practices. It
should explain how operational or non-financial targets are measured. Non-financial reporting should be informative, include
forward looking assessments, and align with key strategies and metrics monitored by the Board.”
Financial Reporting
The Audit and Risk Committee oversees the quality and integrity of external financial reporting including the accuracy,
completeness and timeliness of financial statements, and ensuring that financial reporting is balanced, clear and objective.
It reviews annual and half year financial statements and makes recommendations to the Board concerning the application
of accounting policies and practice, areas of judgement, compliance with accounting standards, stock exchange and legal
requirements, and the results of the external audit.
Management’s accountability for Briscoe Group’s financial reporting is reinforced by the written confirmation from the
Managing Director and Chief Financial Officer that, in their opinion, financial records have been properly maintained and that the
financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and
performance of Briscoe Group. Such representations are given on the basis of a sound system of risk management and internal
control approved by the Audit and Risk Committee, which is operating effectively in all material respects in relation to financial
reporting risk.
Non-Financial Reporting - Sustainability
Briscoe Group regularly assesses its exposure to environmental, economic and social sustainability as part of the overall
framework for managing risk (see Principle 6 – Risk Management).
Being one of New Zealand’s leading retailers we are committed to improving sustainability performance across our key impact
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77
areas of Community, Our People, Environment and Ethical Sourcing and Supply Chain.
Briscoe Group is a Climate Reporting Entity and will be publicly reporting for its period ending 28 January 2024, the Group’s
climate related risks and opportunities in accordance with Aotearoa New Zealand Climate Standards released on 15 December
2022.
For more details refer to pages 14-19 of this report.
Principle 5 – Remuneration
The remuneration of Directors and executives should be transparent, fair and reasonable.
Directors’ Remuneration
Recommendation 5.1: “An issuer should recommend director remuneration to shareholders for approval in a transparent manner.
Actual director remuneration should be clearly disclosed in the issuer’s Annual Report.”
In accordance with the Constitution, Shareholder approval is sought for any increase in the pool available to pay Directors’ fees.
Approval was last sought in 2021, when the pool limit was set at $400,000 per annum. No additional increase to the pool will be
sought during 2023.
The Board has determined the following allocation from the current pool:
Position
Fees (per annum)
Board of Directors
Chair
$140,000
Member
$70,000
Audit and Risk Committee
Chair
$12,000
Member
$7,000
Human Resources Committee
Chair
$10,000
Member
$7,000
Remuneration of Directors in the reporting period is tabulated below:
Board
Fee
Audit and Risk
Committee
Human
Resources
Committee
Total
Fees
Other
Payments/
Benefits
Total
Remuneration
Dame Rosanne Meo
$140,000
$7,000
$7,000
$154,000
-
$154,000
Rod Duke1.
-
-
-
-
$1,817,368
$1,817,368
Tony Batterton
$70,000
$12,000
-
$82,000
-
$82,000
Andy Coupe
$70,000
$7,000
$10,000
$87,000
-
$87,000
Mark Callaghan
$70,000
-
$7,000
$77,000
$77,000
Total
$350,000
$26,000
$24,000
$400,000
$1,817,368
$2,217,368
1. No Directors’ fees are paid to Executive Directors. For more information in relation to Executive Director remuneration refer to
“Managing Director Remuneration” below.
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Remuneration Policy
Recommendation 5.2: “An issuer should have a Remuneration Policy for remuneration of directors and officers, which outlines
the relative weightings of remuneration components and relevant performance criteria.”
Briscoe Group has adopted a Remuneration Policy which sets out the remuneration principles that apply to all Directors and
employees including senior executives, to ensure that remuneration practices are fair and appropriate, and that there is a clear link
between remuneration and performance. A copy of the Remuneration Policy, which is reviewed annually, is available on Briscoe
Group’s website. Briscoe Group is committed to applying fair and equitable remuneration and reward practices in the workplace,
taking into account internal and external relativity, the commercial environment, the ability to achieve Briscoe Group’s business
objectives and the creation of Shareholder value. Under Briscoe Group’s remuneration framework, job size relative to the relevant
competitive market for talent as well as individual performance against defined key performance objectives are key considerations
in all remuneration-based decisions, balanced by the organisational context. Remuneration for senior management includes a mix
of fixed and variable components. Criteria for performance payments which comprise short, medium and long-term incentives are
regularly appraised to ensure they incorporate changing market conditions as well as the Company’s performance in relation to
strategic initiatives that are deemed by the Board to be most relevant in driving Shareholder value.
Non-Executive Directors are paid fees in accordance with the table provided under 5.1. The levels at which fees are set reflects
the time commitment and responsibilities of the roles of Non-Executive Directors and the figures shown under 5.1 do not
include any performance-based payments. The Board uses various sources to inform its decision making on fees and consults
with expert independent advisors where appropriate.
In 2019, the Board introduced the Briscoe Group Senior Executive Incentive Plan to grant performance rights to key senior
management personnel as a long-term incentive (LTI) programme. Vesting is dependent upon achievement of Earnings per Share
(EPS) and Absolute Total Shareholder Return (aTSR) growth targets at the end of a three-year term. Five tranches of performance
rights have been issued under this programme.
A medium-term incentive (MTI) scheme was also introduced for other selected senior management. This plan vests in cash
rather than equity over a two-year period, using the same measures of EPS and aTSR as the LTI.
Periodically the Human Resources Committee, on behalf of the Board, seeks independent external advice to ensure that
remuneration for senior executives is appropriate and fulfils the objectives of attraction, retention and motivation. This exercise
was repeated in 2022 for the roles included as part of the senior management team. The scope of this exercise incorporated
structures, proportions and quantums on a role-by-role basis.
In this manner, the various components of remuneration maintain alignment with the interests of Shareholders, the Company
and the individual.
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Managing Director Remuneration
Recommendation 5.3: “An issuer should disclose the remuneration arrangements in place for the CEO in its Annual Report. This
should include disclosure of the base salary, short-term incentives and long-term incentives and the performance criteria used
to determine performance-based payments.”
The remuneration of the Managing Director for the year ended 29 January 2023 was:
Period Ended
29 January 2023
Base Salary
$1,235,243
Other Benefits
$136,960
STI
$445,165
Subtotal
$1,817,368
LTI (refer below)
-
Total Remuneration
$1,817,368
The remuneration of the Managing Director comprises fixed and performance payments. Fixed remuneration includes a base
salary and other benefits comprising; contributions to superannuation, life insurance, health insurance and a fuel card. The
Managing Director received a short-term incentive (STI) of $445,165 for the year ended 29 January 2023. The target value of
a STI payment is recommended by the Human Resources Committee, approved by the Board and linked strongly to company
financial performance and performance against strategic initiatives. The Managing Director does not participate in the MTI
Scheme and given his shareholding in the Company, nor does he participate in any equity-based Long Term Incentive Scheme.
In accordance with the externally conducted review of the remuneration packages of the roles in the senior management team,
the structure and quantums of the remuneration package of the Group Managing Director was considered appropriate.
Remuneration
Number of Employees
$100,000 - $109,999
17
$110,000 - $119,999
6
$120,000 - $129,999
5
$130,000 - $139,999
5
$140,000 - $149,999
8
$150,000 - $159,999
4
$160,000 - $169,999
7
$170,000 - $179,999
5
$180,000 - $189,999
3
$190,000 - $199,999
7
$200,000 - $209,999
3
$210,000 - $219,999
1
$220,000 - $229,999
2
Remuneration
Number of Employees
$250,000 - $259,999
2
$260,000 - $269,999
1
$270,000 - $279,999
1
$290,000 - $299,999
1
$300,000 - $309,999
1
$330,000 - $339,999
1
$390,000 - $399,999
1
$500,000 - $509,999
1
$520,000 - $529,999
1
$530,000 - $539,999
1
$770,000 - $779,999
1
$860,000 - $869,999
1
$1,810,000 - $1,819,999
1
Employee Remuneration
The number of employees and former employees within Briscoe Group (including the Managing Director but excluding any
other Director) receiving remuneration and benefits above $100,000, relating to the 52-week period ending 29 January 2023 is
set out in the table below:
The table above includes individuals who were employees during the 52-week period ending 29 January 2023 and who received
remuneration and benefits above $100,000 during that period.
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Senior Management
Briscoe Group’s senior management are appointed by the Managing Director and their key performance indicators (‘KPIs’) are
comprised of specific Briscoe Group financial objectives along with business related individual objectives. Establishing and
monitoring these KPIs is done annually by the Managing Director recommending the KPIs to the Human Resources Committee,
which in turn, makes recommendations to the Board for approval. The performance of the senior management against these
KPIs is evaluated annually and serves as a key determinant of any short-term incentive scheme values and payments. The
quantums available to be earned by each participant were reviewed as part of the independent external review conducted in
2022. The Managing Director made recommendations to the Human Resources Committee and these were confirmed by the
full Board.
Short Term Incentive Payments
Short term incentive (STI) payments are at risk cash payments designed to motivate and reward for short term (within each
financial year) performance. The target value of a STI payment is set by the Managing Director with a specified dollar potential
available to each participant in the scheme. The target areas for all employees who are entitled to a STI payment are set
based on a combination of company financial performance, specific financial performance relative to the employee’s areas of
responsibility and individual goals. The weightings applied to each of the target areas will be largely consistent throughout the
company for roles entitled to a STI payment but may vary depending on specific areas of focus as determined by the Managing
Director. The Board approves the STI payments to be made to senior management at the end of the financial year and approves
the senior management targets for the following year.
Medium Term Incentive Payments
Medium term incentive (MTI) payments are at risk cash payments designed to motivate and reward for medium term (crossing
two financial years) performance. A two-year term provides for evaluation of performance over a longer term than used for
purposes of STI and ensures a degree of impact or sustainability thereby avoiding or reducing the risk of “short-termism”. MTI
participants are members of the broader senior management team who significantly influence achievement of the Company’s
performance. The target value of an MTI payment is recommended by the Managing Director for approval by the Board, with a
specified dollar amount potentially available to each participant in the scheme. Performance is assessed at Company rather than
individual level with measures aligned to those of the Long Term Incentive Scheme (LTI), albeit over a slightly lesser timeframe.
The Board will review performance and approve any MTI payments to be made to participants at the end of the financial year
and approve objectives for the following year. Participants in the MTI do not participate in the LTI.
Long Term Incentive Payments
On 26 March 2019 the Board approved a Senior Executive Incentive Plan under which selected senior employees could be
granted Performance Rights which upon vesting would reward the employees with ordinary shares in the Company. Vesting of
the Performance Rights occurs after three years and is subject to the achievement of certain performance hurdles, relating to
the Company’s achievement against Total Shareholder Return and Earnings Per Share growth targets. The external independent
review of remuneration conducted in 2022 confirmed the appropriateness of the measures and that the use of Performance
Rights is aligned with the market. Participants in the LTI do not participate in the MTI.
Five tranches of Performance Rights have been issued under this Plan.
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Principle 6 – Risk Management
Directors should have a sound understanding of the material risks faced by the issuer and
how to manage them. The Board should regularly verify that the issuer has appropriate
processes that identify and manage potential and material risks.
Risk Management
Recommendation 6.1: “An issuer should have a risk management framework for its business and the issuer’s Board should
receive and review regular reports. An issuer should report the material risks facing the business and how these are being
managed.”
The Board is responsible for Briscoe Group’s risk assessment, management and internal control and it believes has carried
out a robust risk assessment process. Principally through the Audit and Risk Committee, the Board monitors policies and
processes that identify significant business risks and implements procedures to monitor these risks. A management risk
committee comprising the Managing Director, Chief Financial Officer, Chief Operating Officer and Internal Audit Manager
meets every quarter to identify and assess the major risks affecting the business by maintaining a risk matrix which is used to
develop strategies to monitor and mitigate these risks. Risks are assessed against the impact of the risk and the likelihood of it
eventuating. The risk matrix is provided to the Board six monthly. The management risk committee reports to the Audit and Risk
committee. Significant risks are discussed at Board meetings, or as required. Briscoe Group maintains insurance policies that it
considers adequate to meet insurable risks.
Health and Safety
Recommendation 6.2: “An issuer should disclose how it manages its health and safety risks and should report on their health
and safety risks, performance and management.”
The Human Resources Committee, the Chief People Officer and specialist team members in the Human Resource function
assist the Board in meeting its responsibilities under the Health and Safety at Work Act 2015, other regulations and policies.
The Human Resources Committee, along with management, is responsible for ensuring that Health and Safety has appropriate
focus and is sufficiently resourced to achieve its objectives within Briscoe Group.
Company performance across a range of measures of Health and Safety are a consistent and priority agenda item at all Board
meetings. The Board and senior management are apprised of all notifiable incidents and injuries and the actions taken to ensure
the health and wellbeing of injured persons. Actions taken to prevent incident recurrence are also advised.
Management operates and assesses the effectiveness of risk assessment and mitigation, safety processes and systems,
capability of staff and the general culture of the business in relation to safety.
Briscoe Group operates a Health and Safety Risk Matrix to identify specific hazards and risks, assess their severity of impact and
likelihood of occurrence, document mitigation strategies and determine the level of residual risk. The matrix incorporates mental
wellness in addition to physical safety. This matrix is reviewed at least annually by the Human Resources Committee and annual
Health and Safety objectives and KPIs are set for the business based on the significant risks identified.
The Company operates a continuous system of hazard identification and management along with monthly reviews of
performance to ensure that opportunities for improvement are identified and progressed. As our highest Health and Safety risk,
reviews of Traffic Management Plans (TMP’s), continue. Continuous vigilance in this area is vital to the safety and wellbeing of
our team and other visitors to our sites. Another key risk is injury due to manual handling, an area in which we are working with
expert external resource to identify ways to reduce or eliminate these types of injuries.
We have continued the extensive work already underway in the area of team member and customer safety due to anti-social
and violent behaviour by visitors to our sites. The work conducted by the Briscoe Group team was complemented by work with
and by external stakeholders including the New Zealand Police, other retailers and Retail New Zealand. We have recognised
this as a priority in order to protect both the physical and mental wellbeing of our team. The work in this area includes but is
not limited to the training provided to our team with consideration for different role types, equipment provided to our Loss
Prevention Specialists and management teams, systems and processes used to identify and monitor undesirable behaviour and
systems and tools used to protect both product and property. We are determined that our team know and believe that nothing,
including loss of product, is more important than the safety of them, their fellow team members and other visitors to our sites.
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82
The Covid pandemic continued to have an impact as new strains emerged in the community. In 2022 we also saw seasonal flu
have an impact, likely a result of diminished immune systems. As a company we maintained our commitment to income support
for team members affected by Covid, without deduction from their annual sick leave balances. This was paired with continued
communication and information activities as well as physical and mental health and wellbeing programmes. We use a range
of indicators including usage of our Employee Assistance Programme to ensure our actions are targeting known needs as well
as identifying new issues or concerns. Our Employee Engagement platform provides additional information from our team on
health and safety as well as other matters relating to general wellbeing.
Both senior management and the Board receive regular updates on our health and safety performance. Complementing
our regular reviews, our annual deep dive with the Board continues to ensure we challenge ourselves to improve on prior
performance through reductions in health and safety incidents, injury frequency and severity.
Despite the combination of a continuing Covid related workload and the increases in anti-social and violent behaviour, we are
pleased with the advances we have made in maintaining a healthy and safe place to work.
Principle 7 – Auditors
The Board should ensure the quality and independence of the external audit process.
External Audit
Recommendation 7.1 and 7.2: “The Board should establish a framework for the issuer’s relationship with its external auditors.
This should include procedures prescribed in the NZX Code. The external auditor should attend the issuer’s annual shareholders
meeting to answer questions from shareholders in relation to the audit.”
The Audit and Risk Committee is responsible for the oversight of Briscoe Group’s external audit arrangements. These arrange-
ments include procedures for the matters described in Recommendation 7.1 of the NZX Code.
The Audit and Risk Committee is committed to ensuring Briscoe Group’s external auditor is able to carry out its work
independently so that financial reporting is reliable and credible. Briscoe Group has an External Auditor Independence policy,
which is available on Briscoe Group’s website. The External Auditor Independence policy implements the procedures set out in
the NZX Code. Regular rotation of the Company’s external audit firm is not mandated however, the Engagement and Quality
Review partners of the Company’s external auditors are required to rotate every five years and are subject to a two-year cooling-
off period.
The policy sets out the work that the external auditor is required to do and specifies the services that the external auditor is not
permitted to do unless authorised by the both the Chair and Chair of the Audit and Risk Committee and so advised to the Board.
This is so the ability of the auditor to carry out its work is not impaired and could not reasonably be perceived to be impaired.
During 2021 a benchmarking exercise was undertaken by the Board which involved discussions with other external audit
companies capable of fulfilling the Group’s external audit requirements. As a result of this exercise the Board was satisfied that
the current external auditor remained the most appropriate choice for the Group’s external audit engagement.
The external auditor has historically attended the Annual Shareholders’ Meeting, and the lead audit partner is available to answer
relevant questions from Shareholders at that meeting.
Briscoe Group’s external auditor is PricewaterhouseCoopers. Total fees paid to PricewaterhouseCoopers in its capacity as
auditor for the period ended 29 January 2023 were $142,750 (2022: 134,000). Total fees paid to PricewaterhouseCoopers
for other professional services for the period ended 29 January 2023 were $47,500 (2022: $33,000). The other service fees
comprise a half yearly review.
Internal Audit
Recommendation 7.3: “Internal audit functions should be disclosed.”
Briscoe Group has an internal audit team that performs assurance and compliance reviews across company operations as part
of a risk-based programme of work approved by the Audit and Risk Committee. In scope are all aspects of the Group’s store
and non-store operations. In addition to the assurance and compliance work, the internal audit team provides advice to improve
both established systems and processes, and during the design and implementation phase of new systems and processes.
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83
The Internal Audit Manager reports functionally to the Audit and Risk Committee and administratively to the Chief Financial
Officer. The Internal Audit Manager provides regular reporting to management as well as directly to the Board and Audit and
Risk Committee.
Principle 8 – Shareholder Rights and Relations
The Board should respect the rights of shareholders and foster constructive relationships
with shareholders that encourage them to engage with the issuer.
Information for Shareholders
Recommendation 8.1: “An issuer should have a website where investors and interested stakeholders can access financial and
operational information and key corporate governance information about the issuer.”
Briscoe Group is committed to an open and transparent relationship with Shareholders. The Board aims to ensure that all
Shareholders are provided with all information necessary to assess Briscoe Group’s direction and performance.
This is done through a range of communication methods including periodic and continuous disclosures to NZX and ASX, half
year and annual reports and the Annual Shareholders’ Meeting. Briscoe Group’s website provides financial and operational
information, information about its Directors and senior management and copies of its governance documents, for investors and
interested stakeholders to access at any time.
Communicating with Shareholders
Recommendation 8.2: “An issuer should allow investors the ability to easily communicate with the issuer, including providing
the option to receive communications from the issuer electronically.”
Shareholders have the option of receiving their communications electronically, including by email or through Briscoe Group’s
investor centre. Briscoe Group’s website includes a section for Shareholder communications and the Board has always been
committed to having an open dialogue with Shareholders and welcomes investor enquiries.
Shareholder Voting Rights
Recommendation 8.3: “Shareholders should have the right to vote on major decisions which may change the nature of the
company in which they are invested.”
In accordance with the Companies Act 1993, the Company’s Constitution, and the NZX and ASX Listing Rules, Briscoe Group
refers any significant matters to Shareholders for approval at a Shareholder meeting.
Further Capital
Recommendation 8.4: “If seeking additional equity capital, an issuer should offer further equity securities to existing
shareholders of the same class on a pro rata basis, and on no less favourable terms, before further equity securities are offered to
other investors.”
If the Company seeks additional equity capital, the Board will ensure it considers the interests of existing shareholders and,
where that is reasonable and in the best interests of the Company, permit shareholders to participate on a pro-rata basis.
Notice of Annual Shareholders meeting
Recommendation 8.5: “The Board should ensure that the annual shareholders notice of meeting is posted on the issuer’s
website as soon as possible and at least 20 working days prior to the meeting.”
Briscoe Group posts any notices of Shareholder meetings on its website as soon as these are available. The general practice is to
make these available not less than four weeks prior to the Shareholder meeting.
Briscoe Group Limited Annual Report 2023 | Corporate Governance Statement
84
General
Disclosures
Board of Directors
Dame Rosanne Meo, DNZM, OBE, BA, Dip BIA: Chairman (Non-Executive)
Director of AMP Administration (NZ) Ltd and Rosanne Meo Consulting. Chartered Fellow of Institute of Directors.
Rod Duke: Group Managing Director and Deputy Chairman
Group Managing Director since 1991. Director of Kein Geld (NZ) Limited, RA Duke Limited, Briscoe Share Plan Trustee Limited
and RD Golf Investments Limited.
Tony Batterton, BCom, C.A: Director (Non-Executive)
Partner and Executive Director of Evergreen Partners Ltd. Non-Executive Director of Direct Capital Investments Ltd, Direct
Capital IV Investments Ltd, Direct Capital IV Management Ltd, Direct Capital IV Partners Ltd, Direct Capital IV GP Ltd, Siplow
Nominees Ltd, Direct Capital Partners Ltd, NZ Fine Touring Group and Evergreen Partners GP Ltd.
Andy Coupe, LLB: Director (Non-Executive)
Chairman of Television New Zealand Ltd, Kingfish Ltd, Barramundi Ltd and Marlin Global Ltd. Chartered Member of Institute of
Directors.
Mark Callaghan, BCA (Hons): Director (Non-Executive)
Chairman of OPD Holdings Ltd, Office Products Depot Ltd, Hepstone Ltd and Callaghan Associates Ltd. Member of Institute of
Directors.
Subsidiary Companies
No employee of the Group appointed as a Director of Briscoe Group Limited or its subsidiaries receives or retains any
remuneration or other benefits in their capacity as a Director.
The remuneration and other benefits of such employees (received as employees) totalling $100,000 or more during the year
ended 29 January 2023, are included in the relevant bandings for remuneration disclosed as part of the “Remuneration” section
of the Corporate Governance Statement included in this Annual Report (page 80).
The persons who held office as Directors of subsidiary companies at 29 January 2023 are as follows:
Briscoes (New Zealand) Limited
Rod Duke, Geoff Scowcroft
The Sports Authority Limited
Rod Duke, Geoff Scowcroft
Rebel Sport Limited
Rod Duke
Living & Giving Limited
Rod Duke
Briscoe Group Limited Annual Report 2023 | General Disclosures
85
Briscoe Group Limited Annual Report 2023 | Corporate Governance Statement
85
85
Briscoe Group Limited Annual Report 2023 | General Disclosures
Principal Activities of the Group
Briscoe Group Limited is a non-trading holding company but provides management services to its subsidiaries.
The principal trading subsidiaries are Briscoes (New Zealand) Limited, a specialist homeware retailer selling leading branded products,
and The Sports Authority Limited, (trading as Rebel Sport), New Zealand’s largest retailer of most leading brands of sporting goods. The
subsidiaries are 100% owned by Briscoe Group Limited.
During the period there were no changes to the nature of Briscoe Group Limited’s business or that of its subsidiaries. There were also
no changes to company structure.
Directors
A. Shareholdings
Beneficially Held
As at 17 March 2023
Number of shares
RAB Coupe
10,000
Non-Beneficially Held
As at 17 March 2023
Number of shares
RA Duke as Trustee of the RA Duke Trust
171,566,383
RPO’L Meo
100,000
AD Batterton
20,000
For further details refer to Substantial Product Holders information (page 87).
B. Share dealings
During the 52 week period ended 29 January 2023 no director acquired shares in the Company.
There were no other changes to Directors’ interests in Briscoe Group Limited during the period.
C. Directors’ Insurance
As provided by the Group’s Constitution and in accordance with Section 162 of the Companies Act 1993 the Group has arranged
Directors’ and Officers’ Liability Insurance which ensures Directors will incur no monetary loss as a result of actions undertaken by them
as Directors provided they act within the law.
Briscoe Group Limited Annual Report 2023 | General Disclosures
86
D. Interests in contracts
During the 52-week period ended 29 January 2023 the following Directors have declared pursuant to Section 140 (1) of the
Companies Act 1993 that they be regarded as having an interest in the following transactions:
• The RA Duke Trust, of which RA Duke is a trustee, as owner of the Rebel Sport premises at Panmure, Auckland, received rental
payments of $674,884 (2022: $597,226), under an agreement to lease premises to The Sports Authority Limited (trading as Rebel
Sport. Refer to Note 6.1.1 of the financial statements).
• Kein Geld (NZ) Limited, an entity associated with RA Duke, received rental payments of $596,803 (2022: $501,999), under an
agreement to lease premises to Briscoes (NZ) Limited. (Refer to Note 6.1.1 of the financial statements).
E. Directors’ and Officers’ use of Company Information
During the period the Board received no notices pursuant to Section 145 of the Companies Act 1993 relating to use of Company
information.
Shareholders Information
Holding Range at 17 March 2023
No. Investors
Total Holdings
%
1 – 1000
1,207
747,706
0.34
1,001 – 5,000
1,805
5,133,483
2.30
5,001 – 10,000
610
4,757,040
2.14
10,001 – 100,000
493
11,707,1 9 1
5.25
100,001 and over
32
200,420,358
89.97
Total
4,147
222,765,778
100%
Substantial Product Holders
The following information is given pursuant to section 293 of the Financial Markets Conduct Act 2013. As at 29 January 2023, details
of the Substantial Product Holders in the company and their relevant interests in the company’s shares are as follows:
Substantial
Product Holder
Holding as at
29 January 20231
R A Duke2.
171,566,383
1. This information reflects the company’s records and disclosures made under section 280(1)(b) of the Financial Markets Conduct
Act 2013.
2. R A Duke has a relevant interest as a trustee of the R A Duke Trust which was disclosed in the SSH notice dated 13 October 2016, in
respect of 170,081,138 ordinary shares. As at 29 January 2023 this interest was in respect of 171,566,383 ordinary shares.
The total number of ordinary shares on issue (being all of the voting shares of the company) as at 29 January 2023
was 222,645,586.
87
Briscoe Group Limited Annual Report 2023 | General Disclosures
Top 20
Shareholders
As at 17 March 2023
Rank
Holder’s Name*
Total
%
1
JB Were (NZ) Nominees Limited **
173,645,243
77.95
2=
Gerald Harvey
5,250,000
2.36
2=
Harvey Norman Properties (NZ) Ltd
5,250,000
2.36
4
Custodial Services Limited
2,009,593
0.90
5
Accident Compensation Corporation
1,728,217
0.78
6
FNZ Custodians Limited
1,259,656
0.57
7=
Alaister John Wall, Beverley Ann Wall and Benedict Dougles Tauber as
Trustees of Tunusa Trust established for the benefit of the family of AJ
and BA Wall
1,000,000
0.45
7=
Stuart Hamilton Johnstone and Lorraine Rose Johnstone
1,000,000
0.45
9
HSBC Nominees (New Zealand) Limited
919,262
0.41
10
New Zealand Depository Nominee
745,900
0.33
11
Public Trust
698,713
0.31
12
Forsyth Barr Custodians Limited
694,380
0.31
13
Manhattan Trustee Limited
683,000
0.31
14
Peter William Burilin
540,839
0.24
15
Shu Wen Chiang
534,861
0.24
16
Hobson Wealth Custodian Limited
377,342
0.17
17
Carla Ingrid Brockman
336,300
0.15
18
Gemscott Limited
335,000
0.15
19
Shih Ting Huang
306,719
0.14
20
Geoffrey Peter Scowcroft
302,107
0.14
* A number of the registered holders listed below hold shares as nominees for, or on behalf of, other parties.
** Includes 171,566,383 shares in relation to holdings associated with R A Duke.
88
Briscoe Group Limited Annual Report 2023 | Top 20 Shareholders
Directors
Dame Rosanne PO’L Meo (Chairman)
Rodney A. Duke
Anthony (Tony) D. Batterton
Richard A. (Andy) Coupe
Hugh J. M. (Mark) Callaghan
Registered Office
1 Taylors Road,
Morningside,
Auckland 1025
Telephone +64 9 815 3737
Postal Address
PO Box 884
Auckland Mail Centre
Auckland
Websites
www.briscoegroup.co.nz
www.briscoes.co.nz
www.rebelsport.co.nz
Solicitors
Simpson Grierson
Bankers
Bank of New Zealand
Auditors
PwC
Share Registrar
Link Market Services Limited
Level 30
PwC Tower
15 Customs Street West
Auckland 1010
Telephone +64 9 375 5998
Directory
89
Briscoe Group Limited Annual Report 2023 | Directory
briscoegroup.co.nz