ANNUAL
REPORT
AND
ACCOUNTS
For the year ended
31 March 2013
Mulberry Annual Report and Accounts
Year ended 31 March 2013
Financial HigHligHts
●●
Total revenue of £165.1 million (2012: £168.5 million)
●— Retail revenue up 8% to £107.2 million, up 6% like-for-like
●— Wholesale revenue down 16% to £57.9 million, reflecting European account rationalisation and destocking
by Asian partners
Profit before tax of £26.0 million (2012: £36.0 million), reflecting an investment in directly operated international
stores and a contraction in gross margin
Basic earnings per share of 32.2p (2012: 43.9p)
Proposed dividend of 5.0p per share (2012: 5.0p per share)
●●
●●
●●
OPERating HigHligHts
●●
17 new international stores opened, in line with plan
●● Construction of second UK factory completed on 3 June 2013
●●
●●
Enhanced product range including bags, small leather goods and men’s accessories
Established regional structure and invested in talent across the business
10 YEaR REvEnuE
180
160
140
120
100
80
60
40
20
0
£m
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
1
1
Mulberry-Annual Report 2013.indd 1
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:48
Mulberry Group plc Contents
Chairman’s statement
Business review
Directors, secretary and advisers
Corporate governance
Directors’ remuneration report
Directors’ report
Directors’ responsibilities statement
Independent auditor’s report
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated statement of changes in equity
Consolidated cash flow statement
Notes to the consolidated financial statements
Independent auditor’s report
Company balance sheet
Notes to the company financial statements
Notice of Annual General Meeting
Group five-year summary
Page
3
4
7
8
10
14
19
20
21
21
22
23
24
25
54
55
56
62
66
2
3
Mulberry-Annual Report 2013.indd 2
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:48
Mulberry Group plc Chairman’s statement
Year ended 31 March 2013
The 2012/13 financial year has been one of consolidation following three years of extremely rapid sales growth. Our
own retail business, which is focused on the UK, Europe and the USA, has continued to grow in a challenging economic
environment.
Our wholesale business has taken a step backwards due to the necessary rationalisation of our wholesale customer
base, and a slow down of sales growth in Asia following very strong growth last year. Although this has resulted
in a wholesale sales decline in the current year, the consolidation of our wholesale channel is an important step in
preparing the foundations for future growth.
Total sales were 2% below last year, however Mulberry has achieved compound annual sales growth of 32% over the
last three years. We continue to concentrate on taking the steps which we believe will deliver sales and profit growth
over the longer term. The strong cash position and positive cashflow of the Group enable us to continue making the
investments which will deliver this.
Earlier in the year, the Board approved management’s strategy to continue to develop the brand globally. This was
outlined in our interim results announcement. The management team has made progress on implementing this
strategy which, due to the seasonal nature of our business, will make an impact progressively during the 2013/14
financial year.
British craftsmanship, another key strategic theme, is something that we are immensely proud of at Mulberry and we
are delighted to confirm the completion of our second factory in Somerset which will create 300 new jobs over the next
year and double our UK production capacity. The intake of new employees started on 10 June.
We anticipate a challenging year ahead, but are confident that we have the right strategy for the Mulberry brand and
are focused upon executing the strategy as effectively as possible and for the medium term benefit of shareholders.
I would like to thank Robin Gibson, who retired from the Group Board last month, for his significant contribution to
Mulberry over 17 years as Non-Executive Director. We are pleased to welcome Christophe Cornu, Chief Commercial
Officer of Nespresso, who joined the Board in May 2013 as a Non-Executive Director, bringing extensive luxury brand
building experience.
Also, I would like to thank Emma Hill for her significant contribution to Mulberry. Emma will leave the Company in
the autumn after five years as Creative Director. During the time that Emma has been the figurehead of the creative
side of our business, she has worked with the rest of her management colleagues to build exceptional design and
development teams who are capable of taking the brand forward.
We are committed to delivering consistent returns to our shareholders and we propose a final dividend of 5.0p per
share, which is the same as last year.
2
3
Mulberry-Annual Report 2013.indd 3
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:48
Mulberry Group plc Business review
Year ended 31 March 2013
Total revenue for the year to 31 March 2013 was £165.1 million, down 2% from £168.5 million in 2012, reflecting growth
in retail sales offset by a decline in wholesale sales.
REtail
Our own stores and concessions saw continued growth with revenues up 8% to £107.2 million (2012: £99.7 million) and
up 6% like-for-like. This was achieved against a backdrop of very strong growth last year of 36% and a challenging
economic climate in the UK and Europe as well as a reduction in tourist spending in the London stores.
●● UK retail sales were up 6% to £91.8 million (2012: £86.9 million);
●●
International retail sales were up 20% to £15.4 million (2012: £12.8 million). During the period we opened seven
new directly operated stores in the USA, Germany and Switzerland;
●● Online sales, which are included in the segments above, were up 21% to £17.6 million, accounting for 11% of
Group sales (2012: 9%).
WHOlEsalE
Wholesale revenue was down 16% to £57.9 million (2012: £68.8 million), reflecting two key factors:
●●
The quality of the European wholesale channel was improved through rationalisation of accounts; and
●● A slowdown of demand in Asia following very strong sales over the last two years driven by certain key products.
This resulted in a period of destocking and cautious re-ordering by our Asian franchise partners during the year
to 31 March 2013.
Although these factors have resulted in lower wholesale sales this year, the steps that we are taking to improve the
quality of the wholesale distribution network are expected to have a positive impact on both the retail and wholesale
businesses in the future.
During the year we opened ten partner stores: a flagship store in Singapore, five stores in Korea, and one store in each
of Shanghai, Beijing, Nagoya and Bahrain.
Financial
Gross margin was 63.3% for the year to 31 March 2013 (2012: 66.2%) due largely to a catch-up in product related overheads
relative to sales which have normalised this year after rapid sales growth in the previous two years. In addition, gross
margin was affected by higher raw materials costs which were not reflected in prices until November 2012.
Net operating expenses for the period increased by £2.9 million to £79.0 million (2012: £76.1 million). This includes
£6.3 million additional costs related to new directly operated international stores offset by cost savings in other areas.
The Group had an effective tax rate of 28.2% for the year (2012: 29.7%) resulting in a tax charge of £7.3 million
(2012: £10.7 million). We expect to see a decrease in the effective tax rate over the next two years in line with the
announced reduction in UK corporation tax rates.
Due to the reduction in gross margin and the investment in directly operated international stores, profit before tax fell
28% to £26.0 million (2012: £36.0 million).
Capital expenditure for the period was £16.9 million, of which £8.8 million related to new stores, £4.4 million to factories
and £2.9 million to investment in IT systems.
Inventories have increased to £35.7 million from £32.5 million at the start of the period partly reflecting new store
openings but also lower sales than originally anticipated. Overall, the Group balance sheet remains strong with cash
of £21.9 million at 31 March 2013 (2012: £27.3 million) and no debt.
4
5
Mulberry-Annual Report 2013.indd 4
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:48
Mulberry Group plc The cash generated from operations for the year amounted to an inflow of £24.4 million (2012: inflow of £30.1 million).
Basic earnings per share for the year decreased by 27% to 32.2p (2012: 43.9p).
The Board is recommending the payment of a dividend on the ordinary shares of 5.0p per ordinary share (2012: 5.0p)
which will be paid on 9 September 2013 to shareholders on the register on 16 August 2013.
stRatEgY
We have previously outlined Mulberry’s four long term strategic themes and over the last 12 months we have taken
the following steps:
1. Reinforce luxury positioning:
●● Made in England: our second factory in Somerset, UK, was completed during June 2013, and it will double our UK
production capacity; and
●● Distribution: we opened retail stores in prime locations with an updated store concept and rationalised the
wholesale distribution network in Europe.
international expansion:
2.
We continue to focus on prime retail locations complemented by high quality wholesale accounts. During the year we:
●●
Improved our retail and franchise store network:
●— Opened seven directly operated stores and ten partner stores in prime retail locations, in line with our target
of 15 to 20 stores per annum. This brings our global store footprint to 115 stores, including directly operated
and partner stores;
●— Consolidated our Middle East franchise operations, appointing Chalhoub Group to operate our business in
the region (excluding Qatar) and accelerating the store opening plans over the next two to three years; and
Increased the quality of our multi-brand distribution network through a European account rationalisation,
continuing to build and maintain strategic partnerships with key department store accounts.
●●
3. Product development
A number of product development initiatives have been completed during the year which will launch with the AW13
collection in stores from June to September 2013. For example:
●●
In the women’s bags category we have reinforced our core and entry level offerings under £1,000 with additional
leather, colour and component offerings and the continued introduction of new styles. The price architecture of
the offering has also been extended at the higher end of the Mulberry range, with the introduction of handbags
priced between £1,000 and £1,700;
●● We have increased the colour and style options for small leather goods, belts and fashion accessories; and
●●
The men’s accessories category has been significantly reinforced, with a 50% increase in product lines for AW13
compared to AW12. Growth of this category is an area of opportunity for the brand, particularly in Asian markets.
4. leverage operations to support growth
One of our key strategies is to maintain a balanced investment programme including new stores, factory facilities and
IT systems. During the year to 31 March 2013 we invested in all three areas with £8.8 million in capital expenditure
spent on stores, £4.4 million on our UK factories and £2.9 million on IT systems.
We have also enhanced the organisation structure with an investment in talent throughout the organisation and a move
to regional reporting lines from 1 April 2013. Regional heads have been appointed for Europe and North America and
the new structure is designed to bring consistency and co-ordination between the retail and wholesale channels and
drive international growth through regional focus and accountability.
4
5
Mulberry-Annual Report 2013.indd 5
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:49
Mulberry Group plc Business review
(continued)
stRatEgY (continued)
During the year we completed a review of our supply chain. We have already implemented an improved wholesale
ordering timetable and are now commencing a project for the implementation of a new integrated supply chain
system which is expected to be completed during the financial year ending 31 March 2015.
While investing for future growth, we continue to carefully manage investments and costs throughout the business.
cREativE DiREctOR
As previously announced, Emma Hill, our Creative Director, has informed the Company that she wishes to leave after
a very successful period at Mulberry during which she has built a strong and talented creative team working for her.
The main SS14 collection has been completed and Emma continues to work in the business finalising the SS catwalk
collection which will be launched on 15 September 2013 during London Fashion Week. The timing of her departure is
currently under discussion and has yet to be finalised.
cuRREnt tRaDing anD OutlOOK
The outlook for both the retail and wholesale businesses for the year to 31 March 2014 remains challenging given
Mulberry’s heavy reliance upon the UK and European markets where the economic climate continues to be difficult.
The trading conditions in Mulberry’s more developed domestic market highlight the importance of our international
growth strategy. We continue to take the necessary steps to build our businesses in the USA and Asia, opening stores
in prime retail locations and investing in marketing initiatives that highlight the brand’s heritage and craftsmanship.
The Asian customer is important globally as tourism continues to be a critical component of luxury sales, and we are
particularly focused on raising our brand awareness in this market.
During the 10 weeks to 8 June 2013, total retail sales were 9% above the same period last year (like-for-like sales
up 6%).
The wholesale order book for SS14 is building satisfactorily and we expect modest growth in wholesale sales for the
year to 31 March 2014.
Since the year end we have opened directly operated stores in Berlin and Vienna and a partner store in Palma de
Mallorca. We continue to target 15 to 20 new international store openings per annum, being a combination of both
directly operated and partner stores.
Capital expenditure for the year to 31 March 2014 is expected to be in the order of £20.0 million, subject to the timing
of new store openings and other investments. This continues to be funded from internally generated cashflow.
During the year to 31 March 2014 we will continue with our global expansion strategy, focusing on the transition of
Mulberry from a UK success story into a global luxury brand.
Bruno Guillon
Chief Executive
12 June 2013
6
7
Mulberry-Annual Report 2013.indd 6
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:49
Mulberry Group plc Directors:
Directors, secretary and advisers
Year ended 31 March 2013
Godfrey Pawle Davis FCA
Bruno Daniel Thierry Guillon
Roger Thomas Mather FCA
Robert (Robin) Edward Graeme Gibson
Andrew Christopher (Chris) Roberts FCCA
Steven Grapstein CPA
Bernard Lam Kong Heng
Melissa Ong
Christophe Olivier Cornu
Registered Office:
The Rookery
Chilcompton
Bath
Somerset
BA3 4EH
company secretary:
Kate Anthony Wilkinson LLB
nominated adviser:
Altium Capital Limited
London
nominated Broker:
Registered auditor:
solicitors:
Principal Bankers:
Registrars:
Barclays Capital
London
Deloitte LLP
Bristol
Osborne Clarke
Bristol
HSBC Bank plc
Bristol
Computershare Investor Services plc
PO Box 82
The Pavilions
Bridgwater Road
Bristol
BS99 7NH
6
7
Mulberry-Annual Report 2013.indd 7
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:49
Mulberry Group plc Corporate governance
Year ended 31 March 2013
The Company is listed on the Alternative Investment Market and is not required to comply with the provisions set out
in the UK Combined Code. However, the Directors support the principles contained in these requirements and apply
these where they consider they are appropriate to Mulberry Group plc.
tHE BOaRD OF DiREctORs
At the start of the year the Board comprised of two Executive Directors and five Non-Executive Directors. On 25 April
2012, Bruno Gullion was appointed to the Board and on 30 June 2012, Godfrey Davis ceased to be an Executive
Director and became the Board’s Non-Executive Chairman. Post year end, Robin Gibson retired as Non-Executive
Director and Christophe Cornu was appointed; as a result the Board currently comprises of two Executive Directors
and six Non-Executive Directors. Further details of the Directors and the changes are set out in the Directors’ report.
Following the appointment of Bruno Guillon on 25 April 2012, the roles of Chairman and Chief Executive are separate
as recommended by the Combined Code. The Directors consider it important that the Board should include
Non-Executive Directors who bring considerable knowledge and experience to the Board’s deliberations.
The Board meets formally on a bi-monthly basis and is responsible inter alia for overall Group strategy, investments
and capital projects and for ensuring that an appropriate framework of internal control is in place throughout the
Group.
The Executive Directors are each employed under a contract of employment which can be terminated with one year’s
notice. The Non-Executive Directors provide their services under twelve month agreements renewed annually on
1 April. The Chairman’s service agreement runs annually from June.
nOMinatiOns anD REMunERatiOn cOMMittEE
Details of the composition and role of the Nominations and Remuneration Committee are provided in the separate
Directors’ remuneration report.
auDit cOMMittEE
The Audit Committee was chaired throughout the year by a Non-Executive Director, Chris Roberts, and the members
of the Committee were Steven Grapstein, Bernard Heng, Melissa Ong and Robin Gibson. Post year end, Chris
relinquished the role of Chairman and Steven Grapstein was appointed Chairman on 7 May 2013. The members of the
Committee from 7 May 2013 were Chris Roberts and Christophe Cornu.
During the year all Directors have been encouraged to attend Audit Committee meetings where possible as part of
the programme to maintain the Group’s systems of internal control. The Committee may examine any matters relating
to the financial affairs of the Group. This includes the review of the annual financial statements, the interim financial
statements and other financial announcements, prior to their approval by the Board, together with accounting policies
and compliance with accounting standards, and of internal control procedures and monthly financial reporting, and
other related functions as the Committee may require. The Non-Executive Directors have access to the Group’s auditor
and legal advisers at any time without the Executive Directors being present.
8
9
Mulberry-Annual Report 2013.indd 8
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:49
Mulberry Group plc intERnal Financial cOntROl
The Board has overall responsibility for the Group’s systems of internal financial control and for monitoring their
effectiveness.
The Directors place considerable importance on maintaining full control and direction over appropriate strategic,
financial, organisational and compliance issues, and have put in place an organisational structure with formally
defined lines of responsibility and delegation of authority. There are established procedures for planning and capital
expenditure, for information and reporting systems and for monitoring the Group’s business and its performance.
Adherence to specified procedures is required at all times and the Board actively promotes a culture of quality and
integrity. Compliance is monitored by the Directors.
The Board is also responsible for the Group’s system of internal control and for reviewing its effectiveness. Such a
system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only
provide reasonable and not absolute assurance against material misstatement or loss. This includes comprehensive
budgeting systems with an annual budget approved by the Board, monthly consideration of actual operational results
compared with budgets, forecasts and regular reviews by the Board of year end forecasts. The Board reports to
shareholders half-yearly.
The Group’s control systems address key business and financial risks. Matters arising are reviewed on a regular basis.
Performance indicators are reviewed at least monthly to assess progress towards objectives. Variances from approved
plans are followed up vigorously.
8
9
Mulberry-Annual Report 2013.indd 9
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:49
Mulberry Group plc
Directors’ remuneration report
Year ended 31 March 2013
Mulberry Group plc is listed on the Alternative Investment Market and therefore is not required to prepare a Directors’
remuneration report. The following narrative disclosures are prepared on a voluntary basis and are not subject to audit.
During the year, the Nominations and Remuneration Committee comprised:
●●
Robin Gibson (Chairman and Non-Executive Director)
●● Chris Roberts (Non-Executive Director)
●●
●●
Steven Grapstein (Non-Executive Director)
Bernard Heng (Non-Executive Director)
●● Melissa Ong (Non-Executive Director)
●● Godfrey Davis (Non-Executive Director)
Godfrey Davis was appointed to the Committee on 1 July 2012. Subsequent to the year end on 7 May 2013 Robin
Gibson resigned as a Director and Chairman of this Committee. Chris Roberts was appointed as Chairman on
7 May 2013.
The Committee is responsible for nominating Directors to the Board and then determining the remuneration and
terms and conditions of employment of Directors and senior employees of the Group. During the year the Committee
used an Executive Search company to identify the replacement for Robin Gibson.
The Committee meets at least once a year in order to consider and set the annual salaries for Executive Directors.
Executive Directors’ salaries are reviewed on 31 March each year, along with the remuneration of all other Group
employees.
REMunERatiOn OF nOn‑EXEcutivE DiREctORs
The Non-Executive Directors each receive a fee for their services, which is agreed by the Board taking into account
the role to be undertaken. They do not receive any pension or other benefits from the Company apart from a small
allowance of Mulberry products, nor do they participate in any of the share option or bonus schemes. As an exception,
on becoming Non-Executive Chairman in June 2012, Godfrey Davis retained his vested and unvested options and
share awards as they were granted to him whilst he was Chief Executive. No new options or share awards will be issued
to him. In the previous year, due to the additional time spent on the recruitment of the new Chief Executive, additional
fees were awarded to the Non-Executive Directors as a one off.
The Non-Executive Directors are appointed for a twelve month term.
REMunERatiOn POlicY FOR EXEcutivE DiREctORs
The Company’s remuneration policy for Executive Directors considers a number of factors and is designed to:
●●
●●
●●
●●
●●
have regard to the Director’s experience and the nature and complexity of their work in order to pay a competitive
salary, consistent to comparable companies, that attracts and retains Directors of the highest quality;
reflect the Director’s personal performance;
link individual remuneration packages to the Group’s long term performance and continued success of the Group
through the award of annual bonuses and share-based incentive schemes;
provide post-retirement benefits through contributions to individual’s pension schemes; and
provide employment-related benefits including the provision of a company car or cash alternative, life assurance,
insurance relating to the Director’s duties, housing allowance, medical insurance and permanent health insurance.
10
11
Mulberry-Annual Report 2013.indd 10
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:49
Mulberry Group plc salaRiEs, BOnusEs anD OtHER incEntivE scHEMEs
Each Executive Director receives a base salary, an annual bonus and a long term incentive. Typically, the annual bonus
will not exceed 100% of the annual salary. During 2012, the Nominations and Remuneration Committee has reviewed
the bonus and long term incentive schemes to ensure that these continue to align the interests of management
and shareholders, reflect job responsibility, the level of individual performance against objectives, overall Group
performance and are in line with the market. As a result a Long Term Incentive Plan (‘LTIP’) was introduced in December
2012. The LTIP is designed to align management and shareholders’ interests through rewarding participants for growth
in Mulberry’s revenue and earnings before interest and tax (‘EBIT’) above specified thresholds over the vesting period.
The performance conditions will be based 50% on revenue growth and 50% on EBIT growth, in comparison to targets
set in the Group’s 5 Year Strategic plan, which is updated annually. The vesting period is typically three years from date
of grant with a further five years post vesting in which to exercise. This will be the primary long term incentive scheme
going forward. The Committee will supervise the scheme and make awards under its terms, ensuring that these are in
line with the market.
There are three earlier long term incentive arrangements which were superseded by the LTIP described above. These
were as follows:
●●
●●
●●
an unapproved share option scheme which was introduced in April 2008. Options granted in this scheme vest
after three years.
a Deferred Bonus Plan which represents a long term award scheme where participants receive all or part of their
annual bonus in shares. These shares are held as deferred shares in the Mulberry Group Plc Employee Share Trust
for a vesting period of two years. Matching shares are then granted and vest after a period of two years conditional
upon the participant remaining an employee of the Group and the original deferred shares remaining in the Trust.
a Co-ownership Equity Incentive Plan where participants are granted an interest in shares which are co-owned by the
Mulberry Group Plc Employee Share Trust and participate in the value to the extent that the Mulberry share price
exceeds 20% above the market price at the date of grant. The vesting period is generally three years, after which the
employee has the right to sell the beneficial interest in the shares. This plan was established in August 2009.
The following information is required by the Companies Act and is subject to audit.
Executive Directors
Bruno Guillon(1)
Roger Mather(2)
Non-Executive Directors
Godfrey Davis
Chris Roberts
Steven Grapstein
Bernard Heng
Melissa Ong
Previous Directors
Robin Gibson(3)
Basic
salary/
fees
£’000
570
275
241
50
50
50
40
50
Bonus
£’000
125
68
–
–
–
–
–
–
taxable
benefits
£’000
Pension
contribu‑
tions
£’000
2013
total
£’000
2012
total
£’000
62
24
30
1
–
1
–
1
50
39
–
–
–
–
–
–
807
406
271
51
50
51
40
51
890
472
657
76
75
76
35
76
Total
1,326
193
119
89
1,727
2,357
Notes:
(1) During March 2012, a bonus of £836,000 was awarded to Bruno Guillon in order to enable him to purchase his share
of the jointly owned shares held under the Co-ownership Equity Incentive Plan (see Section c below for details of
the grant made on joining the Group in 2012).
10
11
Mulberry-Annual Report 2013.indd 11
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:49
Mulberry Group plc Directors’ remuneration report
(continued)
salaRiEs, BOnusEs anD OtHER incEntivE scHEMEs (continued)
(2) During 2012, half of the bonus awarded to Roger Mather (£100,000) has been awarded in deferred shares under
the Deferred Bonus Plan. The post-tax element of this cost is being charged to the Income Statement over a three
year period (being the length of service to which the award relates). An expense of £16,000 has been recognised
for this half of his bonus in respect of the year ended 31 March 2013 (2012: £67,000).
(3) Robin Gibson resigned from the Board on 7 May 2013.
The emoluments disclosed above do not include any amounts for the value of share options or share awards granted
to or held by the Directors. These are detailed as follows:
a) Options granted under the 2008 unapproved share option scheme
31 March
2012
granted
Exercised
31 March
2013
Exercise
price (£)
Date of
exercise
Market
price on
exercise
(£)
Godfrey Davis
90,000
–
–
90,000
1.445
–
–
The outstanding options are exercisable between 25 July 2011 and 25 July 2018. The market price of the shares on the
date of the award was £1.44½.
b) Matching shares granted under the Deferred Bonus Plan
31 March
2012
granted
Exercised
31 March
2013
Exercise
price (£)
Date of
exercise
Market
price on
exercise
(£)
Godfrey Davis
Roger Mather
29,367
26,964
–
3,253
–
–
29,367
30,217
Nil
Nil
–
–
–
–
The matching shares vest between 30 June 2012 and 30 June 2014. Each of the matching shares relates to vested and
unvested shares held in the Mulberry Group Plc Employee Share Trust.
c) Jointly owned shares under the co‑ownership Equity incentive Plan
Godfrey Davis
Roger Mather
Bruno Guillon
31 March
2012
300,000
250,000
200,670
granted
Exercised
Forfeited
31 March
2013
Exercise
price (£)
–
–
–
–
–
–
–
–
–
300,000
250,000
200,670
1.458
1.458
23.02
For the awards held by Godfrey Davis and Roger Mather, the right to exercise their interest in the shares vested on
9 October 2012 and remain exercisable until 9 October 2019. The market price of these shares at the date of the award
was £1.21½.
For Bruno Guillon, the beneficial interest will vest in three equal tranches on 6 March 2014, 6 March 2015 and 6 March
2016 respectively and remain exercisable for ten years from the date of grant. The market price of the shares on the
date of the award was £18.89½.
12
13
Mulberry-Annual Report 2013.indd 12
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:49
Mulberry Group plc d) Options granted under the long term incentive Plan
31 March
2012
granted
Exercised
31 March
2013
Exercise
price (£)
Market
price on
grant (£)
Bruno Guillon
Roger Mather
–
–
83,964
23,090
–
–
83,964
23,090
Nil
Nil
11.63
11.63
The options granted to Bruno Guillon are exercisable between 1 July 2014 and 1 July 2019. The options will vest based
upon the performance of the Group during the year ended 31 March 2014. 50% of the shares will vest if the revenue
target is met and 50% if the EBIT target is met.
The options granted to Roger Mather are exercisable between 1 July 2015 and 1 July 2020. The options will vest based
upon the performance of the Group during the year ended 31 March 2015. 20% of the options will vest if a minimum
threshold is met and then this increases on a straight-line pro rata basis until the maximum threshold is met. 50% of
the shares will vest if the revenue target is met and 50% if the EBIT target is met.
share price information
The market price of Mulberry Group plc ordinary shares at 31 March 2013 was £9.81 (2012: £20.04) and the range
during the year was £9.70 to £24.72 (2012: £12.95 to £20.04).
12
13
Mulberry-Annual Report 2013.indd 13
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:49
Mulberry Group plc Directors’ report
Year ended 31 March 2013
The Directors present their report on the affairs of the Group, together with the financial statements and independent
auditor’s report, for the year ended 31 March 2013.
BusinEss REviEW anD PRinciPal activitiEs
The Group’s principal activities are the design and manufacture or sourcing of luxury accessories, clothing and footwear
and their subsequent sale through wholesale channels or the Group’s own stores and concessions in home and export
markets. There have not been any significant changes in these activities during the year under review. The Directors
are not aware, at the date of this report, of any likely major changes in the Group’s activities during the next year.
The Company’s principal activity is that of a holding company.
The Group continues to invest in design and development in order to develop and market accessory, clothing and
footwear collections for Spring/Summer and Autumn/Winter each year. This results in the continuous introduction
of new products and updates to existing products. The Directors regard this investment in design and product
development as necessary for continuing success in the medium to long term.
The Chairman’s statement and Business review provide a review of the business for the year and future developments.
PRinciPal RisKs anD uncERtaintiEs
The management of the business and the execution of the Group’s growth strategies are subject to a number of risks
which could adversely affect the Group’s future development. The principal risks are listed below:
●●
Economic climate. During the current year, the Group has shown continued resilience to the wider global economic
climate but any further deterioration could affect sales both in the UK and internationally. A significant amount
of Mulberry sales are generated in the UK. As a result, a decline in the UK economy that reduced consumer
spending on luxury goods could materially affect trading results. The Group’s continuing strategy to increase the
penetration of international markets is expected to reduce the impact of this risk over time. The impact on current
trading is discussed further in the Business review.
●● currency risk. The Group’s sales and purchases are made in Sterling, Euros and US Dollars and so it is
exposed to the movement in the Euro and the US Dollar to Sterling exchange rates. The Group manages
this risk by, wherever possible, building a natural hedge of Euro and US Dollar denominated sales and
purchases whereby the inflows and outflows of Euros and US Dollars are roughly equal. If significant currency
positions were to develop, forward foreign exchange contracts would be used to mitigate the exposure.
In particular, with the current uncertainty in Europe and the potential impact on the Euro, possible risk of sovereign
default and banking instability, the Group is continuing to monitor the situation closely and ensure that risk is
mitigated where possible. This includes only depositing funds with large financial institutions and minimising any
Euro exposures. A very small part of the business is in the countries at the centre of the Euro crises.
●● competition. Competitive pressures, changes in luxury fashion and hence consumer demand are continuing
risks which could result in the loss of sales. The Group manages this risk by the continuous investment in the
design of new products and marketing to stimulate customer interest and by maintaining strong relationships
with customers.
●●
●●
loss of people. The risk of the loss of key personnel is mitigated by regular reviews of remuneration packages
(including long term incentive schemes) and succession planning within the management team.
trademarks. As with all brands, the Group is exposed to risk from unauthorised use of the Group’s trademarks and
other intellectual property. These are not included on the balance sheet but any infringement could lead to a loss
in profits and have a negative impact on image and continued success. Trademarks are registered and where any
infringements are identified, appropriate legal action is taken.
●● new production facilities. With the new UK factory opening in the summer of 2013, and the potential for more
factories being identified in the future, there is a risk that if the Group is not able to train the staff and establish
‘normal’ operating efficiency as quickly as possible that the gross margin will be diluted. This is being managed
through the preparation of a detailed training plan, phased recruitment of new joiners and the transfer of some
highly experienced operatives and management to the new site.
14
15
Mulberry-Annual Report 2013.indd 14
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:49
Mulberry Group plc ●●
●●
terrorist activity. A major terrorist attack, particularly in central London, could seriously affect the Group’s
operations, as would a fire or significant disruption to the Group’s warehouse. The Group has developed a business
continuity plan to mitigate the impact, as well as making sure that adequate insurance is in place.
systems. The Group continues to engage in a substantial programme of change. Over the next year, the Group
plans to complete the implementation of a new internet platform and introduction of a Retail EPOS system
throughout its stores. If these projects were to be unsuccessful, it could have an impact on operations. Senior
management involvement and significant pre-implementation testing are part of the carefully designed project to
minimise the risks of the roll-out.
●● cash. The management of cash is of fundamental importance. The decrease in cash in the year reflects the
capital expenditure programme being undertaken to open new international stores and the investment in the
new factory. At the year end the Group had a cash balance of £21.9 million (2012: £27.3 million). As discussed
in the Business review, the Group has agreed various capital expenditure plans for the coming year which will
be financed by the Group’s operating cash flow. The Group currently has no debt but nonetheless has arranged
facilities of £2.0 million (including £2.0 million of a multi-currency overdraft facility). These banking facilities are in
place until 31 May 2014. As such, the Group is on a firm financial footing and confident of its ability to continue
as a going concern.
gOing cOncERn
The Group’s business activities, together with the factors likely to affect its future development, performance and
financial position are given in the Chairman’s statement, Business review and Directors’ report. In addition, the notes
to the consolidated financial statements include details on the Company’s borrowing facilities and the Company’s
objectives, policies and processes for managing its capital; its financial risk management objectives; and its exposures
to credit risk and liquidity risk.
The Group has considerable financial resources together with a customer base split across different geographic areas
and between directly operated stores, partner stores and wholesale accounts. The Group’s forecasts and projections,
taking account of reasonably possible changes in trading performance, show that the Group should be able to operate
within the level of its current facility. As a consequence, the Directors believe that the Group is well placed to manage
its business risks successfully despite the uncertain economic outlook.
The Directors have, at the time of approving the financial statements, a reasonable expectation that the Company
and the Group have adequate resources to continue in operational existence for the foreseeable future. Thus they
continue to adopt the going concern basis of accounting in preparing the Annual Report and financial statements.
REsults anD DiviDEnDs
The results for the year are set out in the Consolidated income statement. The Directors are recommending the
payment of a final dividend of 5.0p per ordinary share (2012: 5.0p), to be paid on 9 September 2013 to ordinary
shareholders on the register on 16 August 2013.
tREasuRY anD FOREign EXcHangE
The Group has continued a policy of balancing its currency exchange exposures which arise through normal trading.
This is achieved through the natural hedge which exists, in which the total inflows and outflows generated from normal
trading, principally in the Euro and US Dollar, are balanced to similar levels. This minimises the potential impact on the
Group of movements in exchange rates.
Where necessary the Group would enter into forward foreign exchange contracts to manage the currency risks arising
from the Group’s operations and its sources of finance not covered by the natural hedge. There were no open forward
foreign exchange contracts at the year end and none were undertaken during the year.
The Group’s financial instruments, other than derivatives, comprise cash and liquid resources and items such as trade
receivables and trade payables that arise directly from its operations.
14
15
Mulberry-Annual Report 2013.indd 15
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:49
Mulberry Group plc Directors’ report
(continued)
DiREctORs anD tHEiR intEREsts
The Directors who served during the year and subsequently are shown below.
Executive Directors
Bruno guillon, 47, joined the Group as Chief Executive on 1 March 2012 and was appointed to the Board on 25 April
2012. Bruno joined Mulberry from Hermès Sellier SARL where he was Managing Director of French subsidiary Hermès
France, a position he held for four years. He joined Hermès in 2001, having previously worked at LVMH and Nina Ricci.
Roger Mather Fca, 48, is the Group Finance Director. He is a fellow of the Institute of Chartered Accountants in
England and Wales having trained professionally with Price Waterhouse. He joined Mulberry during November 2007
after spending the previous 10 years in senior finance and commercial roles within the multi-national Otto Group
based both in Hong Kong and the UK. He was appointed as a Director on 7 May 2008.
Non-Executive Directors
godfrey Davis Fca, 64, is Non-Executive Chairman, having relinquished his executive position on 30 June 2012. He
is a fellow of the Institute of Chartered Accountants in England and Wales and joined Mulberry as Group Finance
Director in 1987 after 15 years at Arthur Andersen, where he was an international partner. He became Chairman and
Chief Executive in November 2002. He is also a director of Hestercombe Gardens Limited, a Trustee of Hestercombe
Gardens Trust and a director of Woodard Schools (Taunton) Limited.
andrew christopher Roberts Fcca, 49, was Chairman of the Audit Committee until 7 May 2013 when he then became
Chairman of the Nominations and Remuneration Committee. He was appointed to the Board on 6 June 2002. He is
a fellow of the Chartered Association of Certified Accountants. He is a director of Como Holdings (UK) Ltd, which has
retail, hotel and real estate operations in the UK and was formerly finance director of an AIM listed financial services
group. Como Holdings (UK) Ltd is a company ultimately owned by Mr Ong Beng Seng and Mrs Christina Ong.
steven grapstein cPa, 55, was appointed on 17 November 2003 and was appointed as Chairman of the Audit
Committee on 7 May 2013. He is presently the Chief Executive Officer of Como Holdings USA Inc., an international
investment group with extensive interests in the retail and hotel industries; Chairman of Presidio International dba A/X
Armani Exchange, a fashion retail company, and serves as Chairman of the Board of Directors of Tesoro Petroleum
Corporation, a US publicly held Fortune150 company engaged in the oil and gas industry. Como Holdings USA Inc. is
ultimately owned by, and Presidio International is 50% owned by, Mr Ong Beng Seng.
Bernard lam Kong Heng, 67, was appointed on 17 November 2003. He is presently the Chief Executive of Como
Holdings (UK) Ltd, a company which has extensive retail, hotel and real estate operations in the UK and internationally
and is a director of various Como UK related companies. Como Holdings (UK) Ltd is a company ultimately owned by
Mr Ong Beng Seng and Mrs Christina Ong.
Melissa Ong, 39, was appointed on 7 September 2010. She is also a director of Club 21 (Singapore) Pte Ltd, which is
ultimately owned by Mr Ong Beng Seng and Mrs Christina Ong, and a director of Will Focus Ltd.
Robin gibson, 71, was Chairman of the Nominations and Remuneration Committee. He was appointed on 1 May 1996
and retired as a Director on 7 May 2013.
christophe cornu, 49, was appointed on 7 May 2013 and is an independent director. He is Chief Commercial Officer
for Nestle Nespresso SA, a specialist in high quality portioned premium coffee and is a director of Nespresso France
SARL, Nespresso Italiana SPA and Nestle Nespresso Beijing Ltd.
16
17
Mulberry-Annual Report 2013.indd 16
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:50
Mulberry Group plc
Directors’ beneficial interests in the shares of the Company at year end were as follows:
Godfrey Davis
Roger Mather
Robin Gibson
5p Ordinary
shares
2013
5p Ordinary
shares
2012
713,490
32,166
7,029
689,160
13,538
7,029
Subsequent to year end, Steven Grapstein acquired 10,000 ordinary shares of 5p each: 5,000 on 5 April 2013 and a
further 5,000 on 8 April 2013. Melissa Ong acquired 10,000 ordinary shares of 5p each on 11 April 2013. Melissa Ong is
the daughter of Mr Ong Beng Seng and Mrs Christina Ong, who together are beneficially interested in 56.14% of the
Company’s total voting rights.
On 1 October 2012 Godfrey Davis entered into a loan agreement whereby 125,000 ordinary shares held by him were
pledged as security in favour of Barclays Bank PLC. This pledge was released on 22 May 2013.
The other Directors had no interests in the shares of the Company. Details of Directors’ share options, share awards
(including jointly owned shares issued under the Co-ownership Equity Incentive Plan) and other interests in shares are
disclosed in the Directors’ remuneration report.
suBstantial sHaREHOlDings
At 12 June 2013 the Company had been notified of the following interests of 3% or more of the share capital of the
Company, other than those of the Directors above:
●● Challice Limited – 56.14%
●●
Banque Havilland SA – 24.38%
suPPliER PaYMEnt POlicY
The Company’s current policy concerning the payment of its suppliers is to:
●●
●●
●●
settle the terms of payment with those suppliers when agreeing the terms of each transaction;
ensure that those suppliers are made aware of the terms of payment; and
abide by the terms of payment, subject to the terms and conditions being met by the supplier.
The Group uses its cash resources to take advantage of early payment terms with suppliers. As such, for Mulberry
Company (Design) Limited, the main purchasing subsidiary, its average payment time was 15 days (2012: 20 days). As
the Company does not trade, at the year end trade creditors expressed as a number of days purchases outstanding
was nil (2012: nil).
cORPORatE sOcial REsPOnsiBilitY
The Group’s approach is to make a positive difference to the people, environment and communities in which it
works. For example, it ensures that suppliers adhere to the Global Sourcing Principles and therefore create the right
environment for their workers. All packaging has been revised and this is a continuous process to identify other ways
to reduce waste and the impact on the environment. In 2006 an apprenticeship programme started in the main factory
which has been extremely successful and is complemented by the investment in graduate internships and training for
NVQ qualifications within the retail and production sites.
16
17
Mulberry-Annual Report 2013.indd 17
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:50
Mulberry Group plc Directors’ report
(continued)
EQual OPPORtunitiEs
The Group is committed to an active equal opportunities policy. It is the Group’s policy to promote an environment
free from discrimination, harassment and victimisation, where everyone will receive equal treatment regardless of
gender, colour, ethnic or national origin, disability, age, marital status, sexual orientation or religion. Employment
practices are applied which are fair, equitable and consistent with the skills and abilities of our employees and the
needs of the business.
DisaBlED EMPlOYEEs
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the
applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their
employment with the Group continues and that appropriate training is arranged. It is the policy of the Group that the
training, career development and promotion of disabled persons should, as far as possible, be identical with that of
other employees.
EMPlOYEE cOnsultatiOn
The Group places considerable value on the involvement of its employees and has continued its previous practice of
keeping them informed on matters affecting them as employees and on the various factors affecting the performance
of the Group, which is achieved through formal and informal meetings. Employee representatives are consulted
regularly on a wide range of matters affecting their current and future interests. Employee Committees have been
established at each of our main sites.
cHaRitaBlE anD POlitical DOnatiOns
The Group made charitable donations of £23,000 (2012: £30,000) during the year. The Group made no political
donations.
auDitOR
In the case of each of the persons who are Directors of the Company at the date when this report was approved:
●●
●●
so far as each of the Directors is aware, there is no relevant audit information of which the Company’s auditor is
unaware; and
each of the Directors has taken all the steps that he/she ought to have taken as a Director to make himself/herself
aware of any relevant audit information and to establish that the Company’s auditor is aware of that information.
This confirmation is given and should be interpreted in accordance with the provisions of Section 418 of the Companies
Act 2006.
Deloitte LLP have expressed their willingness to continue as auditor and a resolution to re-appoint them will be
proposed at the forthcoming Annual General Meeting.
By order of the Board.
Roger Mather
Director
12 June 2013
18
19
Mulberry-Annual Report 2013.indd 18
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:50
Mulberry Group plc Directors’ responsibilities statement
Year ended 31 March 2013
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors
are required to prepare the Group financial statements in accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union and Article 4 of the IAS Regulation and have elected to prepare the parent
company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United
Kingdom Accounting Standards and applicable law). Under company law the Directors must not approve the accounts
unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or
loss of the Company for that period.
In preparing the parent company financial statements, the Directors are required to:
●●
select suitable accounting policies and then apply them consistently;
●● make judgements and accounting estimates that are reasonable and prudent;
●●
●●
state whether applicable UK Accounting Standards have been followed, subject to any material departures
disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Company will continue in business.
In preparing the Group financial statements, International Accounting Standard 1 requires that Directors:
●●
●●
●●
properly select and apply accounting policies;
present information, including accounting policies, in a manner that provides relevant, reliable, comparable and
understandable information;
provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable
users to understand the impact of particular transactions, other events and conditions on the entity’s financial
position and financial performance; and
●● make an assessment of the Company’s ability to continue as a going concern.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible
for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on
the Company’s website. Legislation in the United Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
18
19
Mulberry-Annual Report 2013.indd 19
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:50
Mulberry Group plc Independent auditor’s report
To the members of Mulberry Group plc
We have audited the Group financial statements of Mulberry Group plc for the year ended 31 March 2013 which
comprise the consolidated income statement, the consolidated statement of comprehensive income, the consolidated
balance sheet, the consolidated statement of changes in equity, the consolidated cash flow statement and the related
notes 1 to 33. The financial reporting framework that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by the European Union.
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as
a body, for our audit work, for this report, or for the opinions we have formed.
REsPEctivE REsPOnsiBilitiEs OF DiREctORs anD auDitOR
As explained more fully in the Directors’ responsibilities statement, the Directors are responsible for the preparation
of the Group financial statements and for being satisfied that they give a true and fair view. Our responsibility is to
audit and express an opinion on the Group financial statements in accordance with applicable law and International
Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s
Ethical Standards for Auditors.
scOPE OF tHE auDit OF tHE Financial statEMEnts
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error.
This includes an assessment of: whether the accounting policies are appropriate to the Group’s circumstances and have
been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the
Directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial
information in the Annual Report to identify material inconsistencies with the audited financial statements. If we become
aware of any apparent misstatements or inconsistencies we consider the implications for our report.
OPiniOn On Financial statEMEnts
In our opinion the Group financial statements:
●● give a true and fair view of the state of the Group’s affairs as at 31 March 2013 and of its profit for the year then
ended;
●● have been properly prepared in accordance with IFRSs as adopted by the European Union; and
●● have been prepared in accordance with the requirements of the Companies Act 2006.
OPiniOn On OtHER MattER PREscRiBED BY tHE cOMPaniEs act 2006
In our opinion the information given in the Directors’ report for the financial year for which the Group financial
statements are prepared is consistent with the Group financial statements.
MattERs On WHicH WE aRE REQuiRED tO REPORt BY EXcEPtiOn
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to
you if, in our opinion:
●● certain disclosures of Directors’ remuneration specified by law are not made; or
●● we have not received all the information and explanations we require for our audit.
OtHER MattERs
We have reported separately on the parent company financial statements of Mulberry Group plc for the year ended
31 March 2013.
In our opinion the part of the Directors’ remuneration report to be audited has been properly prepared in accordance
with the provisions of the Companies Act 2006 that would have applied were the Company a quoted company.
David Hedditch (Senior statutory auditor)
for and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor
Bristol, United Kingdom
12 June 2013
20
21
Mulberry-Annual Report 2013.indd 20
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:50
Mulberry Group plc Consolidated income statement
Year ended 31 March 2013
Revenue
Cost of sales
gross profit
Administrative expenses
Other operating income
Operating profit
Share of results of associate
Finance income
Finance expense
Profit before tax
Tax
Profit for the year
attributable to:
Equity holders of the parent
Basic earnings per share
Diluted earnings per share
All activities arise from continuing operations.
note
5
5
19
11
12
13
8
15
15
2013
£’000
165,130
(60,623)
104,507
(79,413)
437
25,531
477
48
(30)
26,026
(7,333)
18,693
2012
£’000
168,451
(56,964)
111,487
(76,565)
495
35,417
562
72
(50)
36,001
(10,700)
25,301
18,693
25,301
pence
pence
32.2
32.0
43.9
43.4
Consolidated statement of comprehensive income
Year ended 31 March 2013
Profit for the year
Exchange differences on translation of foreign operations
total comprehensive income for the year
attributable to:
Equity holders of the parent
2013
£’000
18,693
45
18,738
2012
£’000
25,301
(207)
25,094
18,738
25,094
20
21
Mulberry-Annual Report 2013.indd 21
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:50
Mulberry Group plc Consolidated balance sheet
At 31 March 2013
note
16
17
19
23
20
21
21
24
23
25
26
2013
£’000
5,740
33,494
281
201
39,716
35,698
14,233
21,858
71,789
2012
£’000
3,984
24,212
357
–
28,553
32,546
14,912
27,293
74,751
111,505
103,304
(29,800)
(2,996)
(32,796)
(34,627)
(6,188)
(40,815)
–
(26)
(32,796)
(40,841)
78,709
62,463
2,992
11,835
(2,937)
154
1,467
224
64,974
78,709
2,982
11,578
(3,966)
154
1,467
179
50,069
62,463
non‑current assets
Intangible assets
Property, plant and equipment
Interests in associates
Deferred tax asset
current assets
Inventories
Trade and other receivables
Cash and cash equivalents
total assets
current liabilities
Trade and other payables
Current tax liabilities
non‑current liabilities
Deferred tax liability
total liabilities
net assets
Equity
Share capital
Share premium account
Own share reserve
Capital redemption reserve
Special reserve
Foreign exchange reserve
Retained earnings
total equity
The financial statements of Mulberry Group plc (company number 01180514) were approved by the Board of Directors
and authorised for issue on 12 June 2013. They were signed on its behalf by:
Bruno Guillon
Director
Roger Mather
Director
22
23
Mulberry-Annual Report 2013.indd 22
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:50
Mulberry Group plc Consolidated statement of changes in equity
Year ended 31 March 2013
share
capital
£’000
share
premium
account
£’000
Own
share
reserve
£’000
capital
redemption
reserve
£’000
special
reserve*
£’000
Foreign
exchange
reserve
£’000
Retained
earnings
£’000
total
£’000
Balance at
1 april 2011
Total comprehensive
(expense)/income
for the year
Issue of share capital
Charge for employee
share-based
payments
Exercise of share
options
Own shares
Ordinary dividends
paid
Balance at
31 March 2012
Total comprehensive
income for the
year
Issue of share capital
Charge for employee
share-based
payments
Exercise of share
options
Own shares
Ordinary dividends
paid
Balance at
31 March 2013
2,943
7,007
(621)
154
1,467
386
30,696
42,032
–
10
–
29
–
–
–
3,782
–
789
–
–
–
–
–
–
(3,345)
–
–
–
–
–
–
–
–
–
–
–
–
–
(207)
–
25,301
–
25,094
3,792
–
–
–
–
701
701
(4,319)
–
(3,501)
(3,345)
(2,310)
(2,310)
2,982
11,578
(3,966)
154
1,467
179
50,069
62,463
–
1
–
9
–
–
–
–
–
257
–
–
–
–
–
–
1,029
–
–
–
–
–
–
–
–
–
–
–
–
–
45
–
18,693
–
18,738
1
–
–
–
–
888
888
(1,770)
–
(1,504)
1,029
(2,906)
(2,906)
2,992
11,835
(2,937)
154
1,467
224
64,974
78,709
* The special reserve was created as part of a capital restructuring of the Group in 2004.
22
23
Mulberry-Annual Report 2013.indd 23
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:51
Mulberry Group plc
Consolidated cash flow statement
Year ended 31 March 2013
Operating profit for the year
adjustments for:
Depreciation and impairment of property, plant and equipment
Amortisation of intangible assets
Profit on disposal of property, plant and equipment
Effects of foreign exchange
Share-based payments charge
2013
£’000
2012
£’000
25,531
35,417
5,553
803
(26)
(270)
1,011
3,992
494
(8)
(109)
701
Operating cash flows before movements in working capital
32,602
40,487
Increase in inventories
Decrease/(increase) in receivables
(Decrease)/increase in payables
cash generated from operations
Corporation taxes paid
Interest paid
net cash inflow from operating activities
investing activities:
Interest received
Dividend received from associate
Purchases of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Acquisition of intangible fixed assets
net cash used in investing activities
Financing activities:
Dividends paid
Proceeds on issue of shares
Settlement of share awards
Disposal of own shares
net cash used in financing activities
(3,101)
533
(5,657)
24,377
(10,922)
(30)
13,425
49
518
(13,976)
37
(2,108)
(15,480)
(2,906)
1
(1,504)
1,029
(3,380)
(10,151)
(2,750)
2,530
30,116
(8,495)
(50)
21,571
96
408
(8,632)
33
(2,153)
(10,248)
(2,310)
818
(4,358)
447
(5,403)
net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
cash and cash equivalents at end of year
(5,435)
5,920
27,293
21,858
21,373
27,293
24
25
Mulberry-Annual Report 2013.indd 24
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:51
Mulberry Group plc Notes to the consolidated financial statements
Year ended 31 March 2013
1. gEnERal inFORMatiOn
Mulberry Group plc is a company incorporated in England and Wales. The address of the registered office is
given on page 7. The nature of the Group’s operations and its principal activities are set out in note 6 and in the
Directors’ report.
These financial statements are presented in pounds sterling because that is the currency of the primary economic
environment in which the Group operates. Foreign operations are included in accordance with the policies set
out in note 3.
2. aDOPtiOn OF nEW anD REvisED stanDaRDs
At the date of approval of these financial statements, the following Standards and Interpretations which have not
been applied in these financial statements were in issue but not yet effective:
●●
●●
●●
●●
●●
●●
●●
●●
●●
●●
●●
●●
IFRS 9: Financial instruments
IFRS 10: Consolidated Financial Statements
IFRS 11: Joint Arrangements
IFRS 12: Disclosure of Interests in Other Entities
Amendment to IAS 27: Separate Financial Statements
Amendment to IAS 28: Investments in Associates and Joint Ventures
IFRS 13: Fair Value Measurement
IAS 12: Deferred Tax
IAS 19: Employee Benefits
IFRS 7 (amended) and IAS 32 (amended): Disclosures – offsetting financial assets and financial liabilities
IFRS 1 (amended): Government Loans
IFRS 10, IFRS 12 and IAS 27 (amended): Investment Entities
The Directors do not expect that the adoption of the Standards listed above will have a material impact on the
financial statements of the Group in future periods, except IFRS 12 will impact the disclosure of interests the
Group has in other entities. Beyond the information above, it is not practicable to provide a reasonable estimate
of the effect of these Standards until a detailed review has been completed.
3. signiFicant accOunting POliciEs
Basis of accounting
The financial statements have been prepared in accordance with IFRSs adopted by the European Union.
For the year ended 31 March 2013, the financial year runs for the 52 weeks to 30 March 2013 (2012: 53 weeks
ended 31 March 2012).
The financial statements are prepared under the historical cost convention. The principal accounting policies
adopted are set out below.
going concern
The Directors have, at the time of approving the financial statements, a reasonable expectation that the Company
and the Group have adequate resources to continue in operational existence for the foreseeable future. Thus
they continue to adopt the going concern basis of accounting in preparing the financial statements. Further
detail is contained in the Directors’ report.
24
25
Mulberry-Annual Report 2013.indd 25
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:51
Mulberry Group plc Notes to the consolidated financial statements
(continued)
3. signiFicant accOunting POliciEs (continued)
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled
by the Company (its subsidiaries) made up to 31 March each year. Control is achieved where the Company has
the power to govern the financial and operating policies of each investee entity so as to obtain benefits from its
activities.
The results of subsidiaries acquired or disposed of in any year are included in the consolidated income statement
from the date of acquisition or up to the date of disposal.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting
policies used into line with those used by the Group.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
goodwill
Goodwill written off to reserves under UK GAAP prior to 1998 has not been reinstated and is not included in
determining any subsequent profit or loss on disposal.
intangible assets
Intangible assets that are acquired by the Group are stated at cost less accumulated amortisation and any
recognised impairment loss. Amortisation is charged to the income statement on a straight-line basis over the
estimated useful life of the asset. Assets in the course of construction are carried at cost less any recognised
impairment loss.
Lease costs comprise the lease premium and related costs associated with the Group’s store on Rue St Honoré in
Paris which are being amortised over the effective lease term of 27 years.
Computer software that is integral to a related item of hardware is included as property, plant and equipment.
All other computer software is recorded as an intangible asset and is amortised over the estimated useful life of
the asset (typically four to five years).
Property, plant and equipment
Items of property, plant and equipment are stated at cost or deemed cost less accumulated depreciation and
any recognised impairment loss. Assets in the course of construction are carried at cost less any recognised
impairment loss. Cost includes professional fees incurred directly in relation to construction of assets.
Depreciation is charged so as to write off the cost or valuation of assets less its residual value over their estimated
useful lives, using the straight-line method, on the following bases:
Freehold buildings
Short leasehold land and buildings
Fixtures, fittings and equipment
Plant and equipment
Motor vehicles
5%
over the term of the lease
10% to 33%
20%
25%
Freehold land and assets under the course of construction are not depreciated. Depreciation on assets
commences when the assets are ready for intended use.
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the
sales proceeds and the carrying amount of the asset and is recognised in income.
26
27
Mulberry-Annual Report 2013.indd 26
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:51
Mulberry Group plc 3. signiFicant accOunting POliciEs (continued)
impairment of tangible and intangible assets
At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to
determine whether there is any indication that those assets have suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss
(if any). Where the asset does not generate cash flows that are independent from other assets, the Group
estimates the recoverable amount of the cash-generating unit to which the asset belongs. An intangible asset
with an indefinite useful life is tested for impairment annually and whenever there is an indication that the asset
may be impaired.
The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which the estimates
of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount,
the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised as an expense immediately. Where an impairment loss subsequently reverses, the carrying amount
of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that
the increased carrying amount does not exceed the carrying amount that would have been determined had no
impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of an impairment
loss is recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which case
the reversal of the impairment loss is treated as a revaluation increase.
investments in associates
An associate is an entity over which the Group is in a position to exercise significant influence, but not control or
joint control, through the participation in the financial and operating policy decisions of the investee. Significant
influence is the power to participate in the financial and operating policy decisions of the investee but is not
control or joint control over these policies. The results and assets and liabilities of associates are incorporated
in these financial statements using the equity method of accounting. Investments in associates are carried in
the balance sheet at cost as adjusted by post-acquisition changes in the Group’s share of the net assets of
the associate, less any impairment in the value of individual investments. Losses of the associates in excess of
the Group’s interest in those associates are recognised only to the extent that the Group has incurred legal or
constructive obligations or made payments on behalf of the associate.
Any excess of the cost of acquisition over the Group’s share of the net fair values of the identifiable net assets of
the associate at the date of acquisition is recognised as goodwill. Any deficiency of the cost of acquisition below
the Group’s share of the fair values of the identifiable net assets of the associate at the date of acquisition (i.e.
discount on acquisition) is credited in profit or loss in the period of acquisition.
Where a Group entity transacts with an associate of the Group, profits and losses are eliminated to the extent of
the Group’s interest in the relevant associate.
inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises materials, direct labour
costs and those overheads incurred in bringing the inventories to their current location and condition. Cost is
calculated using the standard cost method. Net realisable value represents the estimated selling price less all
estimated costs of completion and costs to be incurred in marketing, selling and distribution.
26
27
Mulberry-Annual Report 2013.indd 27
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:51
Mulberry Group plc Notes to the consolidated financial statements
(continued)
3. signiFicant accOunting POliciEs (continued)
taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported
in the income statement because it excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is
calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax bases used in the computation of
taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible temporary differences can be utilised.
Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of
goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a
transaction that affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and
associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent
that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or
the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items
charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the
Group intends to settle its current tax assets and liabilities on a net basis.
leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and
rewards of ownership to the lessee. All other leases are classified as operating leases.
Rentals payable under operating leases are charged to income on a straight-line basis over the term of the
relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are also spread
on a straight-line basis over the lease term.
Provisions
A provision is recognised when the Group has a present legal or constructive obligation as a result of a past event,
and where it is probable that an outflow will be required to settle the obligation. Provisions are measured at the
Directors’ best estimate of the expenditure required to settle the obligation at the balance sheet date and are
discounted to present value where the effect is material.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a
third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and
the amount of the receivable can be measured reliably.
28
29
Mulberry-Annual Report 2013.indd 28
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:51
Mulberry Group plc 3. signiFicant accOunting POliciEs (continued)
Provisions (continued)
Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous
contract is considered to exist where the Group has a contract under which the unavoidable costs of meeting the
obligations under the contract exceed the economic benefits expected to be received under it.
share‑based payments
The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based
payments are measured at fair value (excluding the effect of non market-based vesting conditions) at the date
of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on
a straight-line basis over the vesting period, based on the Group’s estimate of the proportion of shares that will
eventually vest and adjusted for the effect of non market-based vesting conditions.
The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative
expense reflects the revised estimate, with a corresponding adjustment to equity reserves.
Fair value is measured by use of the Black-Scholes model. The expected life used in the model has been adjusted,
based on management’s best estimate, for the effects of non-transferability, performance conditions, exercise
restrictions and behavioural considerations.
Retirement benefit costs
Payments to employees’ personal pension plans are charged as an expense as they fall due. Payments made to
state-managed retirement benefit schemes are dealt with as payments to defined contribution schemes where
the Group’s obligations under the schemes are equivalent to those arising in a defined contribution retirement
benefit scheme.
Revenue recognition
Revenue represents amounts receivable for goods provided in the normal course of business, net of discounts,
VAT and other sales-related taxes and intra-group transactions. Sales of goods are recognised at the point of sale,
or for the wholesale business, when title has passed. Sales of gift vouchers are recognised on presentation of the
voucher for payment of goods.
Interest income is accrued on a time basis by reference to the principal outstanding and at the effective interest
rate applicable. This is the rate that exactly discounts estimated future cash receipts through the expected life of
the financial asset to that asset’s net carrying amount.
Royalty income is recognised on an accruals basis in accordance with the substance of the relevant agreement
and is disclosed as other operating income.
Operating profit
Operating profit is stated before the share of results of associates, finance income and finance expense.
grant income
Government grants are not recognised until there is reasonable assurance that the Company will comply with the
conditions attaching to them and that the grants will be received. The grant income is recognised as income over
the periods necessary to match with the related costs and is deducted in reporting the related expense.
Foreign currencies
The individual financial statements of each Group company are presented in the currency of the primary
economic environment in which it operates (its functional currency). For the purpose of the consolidated financial
statements, the results and financial position of each Group company are expressed in pounds sterling, which is
the functional currency of the Company, and the presentation currency for the consolidated financial statements.
28
29
Mulberry-Annual Report 2013.indd 29
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:51
Mulberry Group plc Notes to the consolidated financial statements
(continued)
3. signiFicant accOunting POliciEs (continued)
Foreign currencies (continued)
In preparing the financial statements of the individual companies, transactions in currencies other than the
entity’s functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates
of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign
currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair
value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair
value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are
not retranslated.
Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are
included in profit or loss for the period. Exchange differences arising on the retranslation of non-monetary items
carried at fair value are included in profit or loss for the period except for differences arising on the retranslation of
non-monetary items in respect of which gains and losses are recognised directly in equity. For such non-monetary
items, any exchange component of that gain or loss is also recognised directly in equity.
For the purposes of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign
operations are translated at exchange rates prevailing on the balance sheet date. Income and expense items are
translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that
period, in which case the exchange rates at the date of the transactions are used. Exchange differences arising, if
any, are classified as equity and transferred to the Group’s foreign exchange reserve. Such translation differences
are recognised as income or as expenses in the period in which the operation is disposed of.
Financial instruments
Financial assets and financial liabilities are recognised in the Group’s balance sheet when the Group becomes a
party to the contractual provisions of the instrument.
Trade receivables
Trade receivables do not carry any interest and are stated at their amortised cost as reduced by appropriate
allowances for estimated irrecoverable amounts.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid
investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of
changes in value.
Derecognition of financial assets
The Group derecognises financial assets when the contractual rights to the cash flows from the asset expire, or when
it transfers the financial asset and substantially all of the risks and rewards of ownership of the asset to another entity.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual
arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of
the Group after deducting all of its liabilities.
Equity instruments issued by the Group are recognised at the proceeds received, net of direct issue costs.
Bank borrowings
Interest-bearing bank loans and overdrafts are recorded at the fair value of the proceeds received, net of direct
issue costs. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are
accounted for on an accruals basis against profit or loss using the effective interest rate method and are added
to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.
30
31
Mulberry-Annual Report 2013.indd 30
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:51
Mulberry Group plc 3. signiFicant accOunting POliciEs (continued)
Financial instruments (continued)
Trade payables
Trade payables are not interest-bearing and are stated at their amortised cost.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged,
cancelled or they expire.
4. cRitical accOunting JuDgEMEnts anD KEY sOuRcEs OF EstiMatiOn uncERtaintY
In the application of the Group’s accounting policies the Directors are required to make judgements, estimates
and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on historical experience and other factors that are
considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is revised if the revision affects only that period, or in the
period of the revision and future periods if the revision affects both current and future periods.
The critical judgements undertaken by the Directors relate to the key sources of estimation uncertainty. The
following estimates that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year are discussed below.
impairment of property, plant and equipment
Property, plant and equipment are reviewed for impairment if events or changes in circumstances indicate that
the carrying amount may not be recoverable. When a review for impairment is conducted, the recoverable
amount is determined based on value in use calculations prepared on the basis of management’s assumptions
and estimates.
Depreciation of property, plant and equipment
Depreciation is charged so as to write off the cost of assets over their estimated useful lives. The selection of the
estimated lives requires the exercise of management judgement.
Recoverability of intangible asset
The carrying value of the lease premium and related costs for the shop in Rue St Honoré, Paris, is reassessed each
year based on the ongoing performance of the store and the realisable value of the lease.
inventory provisions
The Group designs, produces and sells luxury goods and as such is at risk that the net realisable value of stock will
be less than the carrying value. Provisions for raw materials are calculated based upon expected future usage and
for finished goods upon the saleability of finished goods and age and condition of the items.
share‑based payments – long term incentive Plan
The fair value is determined at grant date and expensed over the vesting period based on the estimate of
the proportion of the shares which will vest. The new Long Term Incentive Plan includes non market-based
performance conditions, including achieving targets for the Group’s future revenue and EBIT. The probability of
whether these performance targets will be met based on the latest Group forecasts is reassessed on a six monthly
basis.
30
31
Mulberry-Annual Report 2013.indd 31
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:51
Mulberry Group plc Notes to the consolidated financial statements
(continued)
5. REvEnuE
Sale of goods
Royalty income
Other income
Finance income
Total revenue
2013
£’000
165,130
180
257
48
165,615
2012
£’000
168,451
200
295
72
169,018
6. BusinEss anD gEOgRaPHical sEgMEnts
IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the
Group that are regularly reviewed by the Chief Operating decision maker, defined as the Chief Executive, to
allocate resources to the segments and to assess their performance.
(a) Business segments
For management purposes, the Group is currently organised into two operating divisions – the Retail business
and Design business. These divisions are the basis upon which the Group reports its primary segment information.
The principal activities are as follows:
Retail – sale of Mulberry branded fashion accessories, clothing and footwear through a number of shops and
department store concessions.
Design – brand management, marketing, product design, manufacture, sourcing and wholesale distribution for
the Mulberry brand.
Inter-segment sales for both years are charged at market prices in line with our third party wholesale customers.
Segment information about these businesses is presented below.
Revenue
External sales
Inter-segment sales
total revenue
segment result
Central administration costs
Share of results of associate
Net finance income
Profit before tax
Design
2013
£’000
57,902
51,379
109,281
Retail
2013
£’000
Eliminations
2013
£’000
107,228
–
107,228
–
(51,379)
(51,379)
165,130
group
2013
£’000
165,130
–
11,613
14,357
–
25,970
(439)
477
18
26,026
32
33
Mulberry-Annual Report 2013.indd 32
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:51
Mulberry Group plc 6. BusinEss anD gEOgRaPHical sEgMEnts (continued)
Revenue
External sales
Inter-segment sales
total revenue
segment result
Central administration costs
Share of results of associate
Net finance income
Profit before tax
Design
2012
£’000
68,845
39,770
108,615
Retail
2012
£’000
99,606
–
99,606
Eliminations
2012
£’000
–
(39,770)
(39,770)
group
2012
£’000
168,451
–
168,451
17,834
18,606
–
36,440
(1,023)
562
22
36,001
2012
total
£’000
2013
Design
£’000
2013
Retail
£’000
2013
total
£’000
2012
Design
£’000
2012
Retail
£’000
Other information
Capital expenditure
Depreciation and
amortisation
6,154
10,238
16,392
2,629
8,062
10,691
1,569
3,381
4,950
1,254
1,968
3,222
In addition, £543,000 (2012: £1,752,000) of capital expenditure and £1,405,000 (2012: £1,263,000) of depreciation
was incurred by the parent company which is not included in the segments above.
2013
Design
£’000
2013
Retail
£’000
2013
total
£’000
2012
Design
£’000
2012
Retail
£’000
2012
total
£’000
26,564
74,235
100,799
43,437
48,644
92,081
281
10,425
111,505
357
10,866
103,304
Balance sheet
Segment assets
Interests in
associates
Unallocated
corporate assets
consolidated assets
Segment liabilities
15,106
10,458
25,564
16,782
10,052
26,834
Unallocated
corporate liabilities
consolidated liabilities
14,007
40,841
7,232
32,796
33
Mulberry-Annual Report 2013.indd 33
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:52
32
Mulberry Group plc Notes to the consolidated financial statements
(continued)
6. BusinEss anD gEOgRaPHical sEgMEnts (continued)
(B) geographical segments
The following table provides an analysis of the Group’s sales and non-current assets by geographical market,
irrespective of the origin of the goods:
UK
Rest of Europe
Asia
North America
Rest of world
sales revenue by
geographical market
2012
2013
£’000
£’000
108,025
27,739
19,605
8,142
1,619
165,130
103,285
27,628
26,042
8,367
3,129
168,451
non‑current assets
by geographical
market
2013
£’000
26,331
5,119
–
8,266
–
39,716
2012
£’000
21,620
2,313
–
4,620
–
28,553
7. EXcEPtiOnal incOME anD EXPEnsEs
There was no exceptional income or expenses in the current or prior year.
8. PROFit FOR tHE YEaR
Profit for the year has been arrived at after charging/(crediting):
Net foreign exchange (gain)/loss
Depreciation and impairment of property, plant and equipment:
Owned assets
Amortisation of intangible assets
Government grants
Write-downs of inventories recognised as an expense
Cost of inventories recognised as an expense
Staff costs (see note 10)
Impairment of trade receivables
Profit on disposal of property, plant and equipment
2013
£’000
2012
£’000
(442)
77
5,553
803
(662)
775
58,101
30,151
(230)
(26)
3,992
494
–
823
56,642
28,053
295
(8)
34
35
Mulberry-Annual Report 2013.indd 34
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:52
Mulberry Group plc 9. auDitOR REMunERatiOn
the analysis of auditor’s remuneration is as follows:
Fees payable to the Company’s auditor for the audit of the Company’s
annual accounts
The audit of the Company’s subsidiaries
total audit fees
Other taxation advisory services
Audit related assurance services
Corporate finance services
Other services
total non‑audit fees
2013
£’000
2012
£’000
19
42
61
19
40
59
£’000
£’000
44
6
3
3
56
51
–
30
3
84
Tax services in both years include advice in relation to international structuring and company share schemes. The
audit related assurance services relate to the review of grant claims submitted to the Regional Growth Fund. The
corporate finance services relate to work in connection with the original Regional Growth Fund submission for
the new Somerset factory.
10. staFF cOsts
The average monthly number of employees (including Executive Directors and those on a part-time basis) was:
Production
Sales and distribution
Administration
Their aggregate remuneration comprised:
Wages and salaries
Social security costs
Other pension costs (see note 30)
Share-based payments (see note 29)
2013
number
2012
number
413
536
138
1,087
362
465
116
943
£’000
£’000
25,787
2,634
719
1,011
30,151
24,634
2,197
521
701
28,053
Details of Directors’ remuneration and interests are provided in the audited section of the Directors’ remuneration
report and should be regarded as part of these financial statements.
34
35
Mulberry-Annual Report 2013.indd 35
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:52
Mulberry Group plc Notes to the consolidated financial statements
(continued)
11. FinancE incOME
Interest income on cash balances
12. FinancE EXPEnsE
Interest on bank overdraft
13. taX
Current tax
Adjustment to prior year corporation tax
Deferred tax (note 23)
Adjustment to prior year deferred tax
2013
£’000
48
2013
£’000
30
2013
£’000
7,560
–
(169)
(58)
7,333
2012
£’000
72
2012
£’000
50
2012
£’000
9,915
690
123
(28)
10,700
The charge for the year can be reconciled to the profit per the consolidated income statement as follows:
Profit before tax
Tax at the UK corporation tax rate of 24% (2012: 26%)
Tax effect of items that are not deductible in determining taxable profit
Tax effect of expenses not deductible for tax purposes – fixed assets
Overseas losses not carried forward
Profits offset against prior year losses
Chargeable gain on disposal of lease
Effect of change in corporation tax rate
Prior year adjustments
Tax expense for the year
2013
£’000
2012
£’000
26,026
36,001
6,246
321
387
436
–
–
1
(58)
7,333
9,360
316
343
67
(56)
13
(5)
662
10,700
Current tax of £170,000 has been recognised directly in equity in relation to foreign currency movements
(2012: nil).
In the Budget on 21 March 2012 the UK Government announced that legislation will be introduced in the Finance
Bill 2012 to reduce the main rate of corporation tax from 24% to 23% from 1 April 2013. On 3 July 2012 a resolution
approving the rate change to 23% was passed and therefore 23% has been used to calculate the position on
deferred tax at 31 March 2013 (2012: 24%). The further phased reductions discussed in the Budget on 20 March
2013, reducing the corporation tax rate to 20% from 1 April 2015, have not yet been enacted. The Directors are
not aware of any other factors that will materially affect the future tax charge.
36
37
Mulberry-Annual Report 2013.indd 36
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:52
Mulberry Group plc 14. DiviDEnDs
The dividends approved and paid during the year are as follows:
Dividend for the year ended 31 March 2012 of 5p (2011: 4p) per share
paid in September 2012
Proposed dividend for the year ended 31 March 2013
of 5p per share (2012: 5p)
2013
£’000
2,906
2012
£’000
2,310
2,992
2,982
This proposed dividend is subject to approval by shareholders at the Annual General Meeting and has not been
included as a liability in these financial statements.
15. EaRnings PER sHaRE (‘EPs’)
Basic earnings per share
Diluted earnings per share
Earnings per share is calculated based on the following data:
Weighted average number of ordinary shares for the purpose of basic EPS
Effect of dilutive potential ordinary shares: share options
Weighted average number of ordinary shares for the purpose of diluted EPS
2013
pence
32.2
32.0
2012
pence
43.9
43.4
2013
million
2012
million
58.1
0.4
58.5
57.6
0.7
58.3
The weighted average number of ordinary shares in issue during the year excludes those held by the Mulberry
Group Plc Employee Share Trust.
36
37
Mulberry-Annual Report 2013.indd 37
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:52
Mulberry Group plc Notes to the consolidated financial statements
(continued)
16. intangiBlE assEts
cost
At 1 April 2011
Additions
Disposals
Exchange differences
At 1 April 2012
Additions
Exchange differences
At 31 March 2013
amortisation
At 1 April 2011
Charge for the year
Disposals
Exchange differences
At 1 April 2012
Charge for the year
Exchange differences
At 31 March 2013
carrying amount
At 31 March 2013
At 31 March 2012
At 31 March 2011
software
£’000
1,695
2,425
(48)
–
4,072
2,536
–
6,608
1,208
422
(48)
–
1,582
735
–
2,317
4,291
2,490
487
lease
costs
£’000
1,957
–
–
(98)
1,859
–
32
1,891
310
72
–
(17)
365
68
9
442
1,449
1,494
1,647
total
£’000
3,652
2,425
(48)
(98)
5,931
2,536
32
8,499
1,518
494
(48)
(17)
1,947
803
9
2,759
5,740
3,984
2,134
At 31 March 2013, the Group had entered into contractual commitments for the acquisition of software of £262,000
(2012: £467,000). Included within software is £2,007,000 of projects still in development and where depreciation
will not commence until the projects are complete and the assets come into use (2012: £1,074,000).
38
39
Mulberry-Annual Report 2013.indd 38
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:52
Mulberry Group plc 17. PROPERtY, Plant anD EQuiPMEnt
Freehold
land and
buildings
£’000
short
leasehold
land and
buildings
£’000
Plant and
equipment
£’000
Fixtures,
fittings and
equipment
£’000
Motor
vehicles
£’000
cost
At 1 April 2011
Additions
Disposals
Exchange differences
At 1 April 2012
Additions
Disposals
Reclassification
Exchange differences
At 31 March 2013
accumulated depreciation
At 1 April 2011
Charge for the year
Disposals
Exchange differences
At 1 April 2012
Charge for the year
Disposals
Reclassification
Exchange differences
At 31 March 2013
carrying amount
At 31 March 2013
4,600
1,362
–
–
5,962
3,717
–
137
–
9,816
1,404
178
–
–
1,582
236
–
–
–
1,818
9,103
4,978
–
11
14,092
3,167
–
(137)
303
17,425
178
1,432
–
1
1,611
2,097
–
–
37
3,745
5,202
2,256
(1,873)
–
5,585
1,294
(772)
(1,220)
15
9,636
1,312
(2,302)
(30)
8,616
6,221
(1,054)
1,220
224
4,902
15,227
3,766
801
(1,873)
–
2,694
779
(766)
(63)
4
2,648
5,022
1,555
(2,288)
(23)
4,266
2,408
(1,049)
63
54
5,742
7,998
13,680
2,254
9,485
At 31 March 2012
4,380
12,481
2,891
4,350
At 31 March 2011
3,196
8,925
1,436
4,614
100
111
(72)
–
139
–
–
–
–
139
64
26
(61)
–
29
33
–
–
–
62
77
110
36
total
£’000
28,641
10,019
(4,247)
(19)
34,394
14,399
(1,826)
–
542
47,509
10,434
3,992
(4,222)
(22)
10,182
5,553
(1,815)
–
95
14,015
33,494
24,212
18,207
Included within the table above, are the following assets under the course of construction which are not being
depreciated:
At 31 March 2013
3,550
678
At 31 March 2012
–
1,219
The Group has the following contractual commitments:
At 31 March 2013
1,739
2,429
At 31 March 2012
50
2,653
183
13
306
–
1,107
1,018
1,351
190
–
–
–
–
5,518
2,250
5,825
2,893
38
Freehold land of £2,029,000 (2012: £997,000) has not been depreciated.
39
Mulberry-Annual Report 2013.indd 39
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:53
Mulberry Group plc
Notes to the consolidated financial statements
(continued)
18. suBsiDiaRiEs
A list of the significant investments in subsidiaries, including the name, country of incorporation and proportion
of ownership interest is given in note 36 to the Company’s separate financial statements.
19. intEREsts in assOciatEs
Total assets
Total liabilities
Total net assets
Total revenue
Profit for the year
Group’s share of profit of associate
2013
£’000
3,255
(2,417)
838
3,913
955
477
2012
£’000
2,031
(1,961)
70
3,884
1,125
562
A list of the significant investments in associates, including the name, country of incorporation and proportion of
ownership interest is given in note 36 to the Company’s separate financial statements.
20. invEntORiEs
Raw materials
Work-in-progress
Finished goods
21. OtHER Financial assEts
trade and other receivables
Amount receivable for the sale of goods
Allowance for doubtful debts
Amounts owed by associate undertakings
Other debtors
Prepayments and accrued income
2013
£’000
2,940
723
32,035
35,698
2013
£’000
9,233
(468)
8,765
230
1,712
3,526
14,233
2012
£’000
2,475
758
29,313
32,546
2012
£’000
11,047
(698)
10,349
155
998
3,410
14,912
40
41
Mulberry-Annual Report 2013.indd 40
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:53
Mulberry Group plc 21. OtHER Financial assEts (continued)
trade receivables
The average credit period taken on the sale of goods is 49 days (2012: 42 days). No interest is charged on the
outstanding receivables. The carrying amount of receivables approximates to their fair value.
The Group has provided for the estimated irrecoverable amount from the sale of goods, where there is doubt
as to the recoverability of the receivables balance. Before accepting any new customer, the Group assesses the
potential customer’s credit quality and defines individual credit limits by customer.
The Group’s receivables comprise primarily department stores, franchise partners and associates, and wholesale
customers. Those customers who represented more than 10% of the total balance of trade receivables at the year
end were Club 21, House of Fraser (Stores) Limited and SHK Holdings (franchise partner in Korea).
Included in the Group’s trade receivables balance are debtors with a carrying amount of £1,417,000
(2012: £1,804,000) which are past due at the reporting date for which the Group has not provided as there has not
been a significant change in credit quality and the amounts are still considered recoverable.
Ageing of past due but not impaired receivables
0 to 30 days overdue
31 to 60 days overdue
2013
£’000
1,319
98
1,417
2012
£’000
1,804
–
1,804
Given the relatively small nature of the provision for receivables, no further analysis is provided.
cash and cash equivalents
Cash and cash equivalents
2013
£’000
2012
£’000
21,858
27,293
Cash and cash equivalents comprise cash held by the Group and short-term bank deposits with an original
maturity of three months or less. The carrying amount of these assets approximates to their fair value.
22. BORROWings
The Group’s borrowing facilities comprise bank overdrafts which would be repayable on demand. The multi-
currency overdraft facilities of £2,000,000 (2012: £2,000,000) have been secured by a charge over the Group’s
assets. The interest rates are determined based on 1% over the bank base rate. In addition, the Group has
available trade facilities of £2,000,000 (2012: £2,500,000).
No borrowings were outstanding at the year end (2012: nil).
40
41
Mulberry-Annual Report 2013.indd 41
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:53
Mulberry Group plc Notes to the consolidated financial statements
(continued)
23. DEFERRED taX
The following are the major deferred tax liabilities and assets recognised by the Group and movements thereon
during the current and prior reporting periods.
At 1 April 2011
Charge to income
At 1 April 2012
Credit to income
Net deferred tax liability/(asset) as at 31 March 2013
accelerated
tax
depreciation
£’000
short‑term
timing
differences
£’000
184
20
204
(187)
17
(253)
75
(178)
(40)
(218)
total
£’000
(69)
95
26
(227)
(201)
Certain deferred tax assets and liabilities have been offset. The following is the analysis of the deferred tax
balances (after offset) for financial reporting purposes:
Deferred tax liability
Deferred tax asset
24. OtHER Financial liaBilitiEs
trade and other payables
Trade payables
Accruals and deferred income
Other payables
2013
£’000
17
(218)
(201)
2013
£’000
11,760
13,364
4,676
29,800
2012
£’000
204
(178)
26
2012
£’000
12,696
18,644
3,287
34,627
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs.
The average credit period taken for trade purchases is 15 days (2012: 20 days). For most suppliers, no interest is
charged on the trade payables for the first 60 days from the date of the invoice. Thereafter, interest is charged on
the outstanding balances at various interest rates. The Group has financial risk management policies in place to
ensure that all payables are paid within the credit timeframe.
The Directors consider that the carrying amount of trade payables approximates to their fair value.
42
43
Mulberry-Annual Report 2013.indd 42
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:53
Mulberry Group plc 25. sHaRE caPital
authorised
65,000,000 ordinary shares of 5p each (2012: 65,000,000)
issued and fully paid
59,830,175 ordinary shares of 5p each (2012: 59,635,175)
The following share issues have been made during the year:
2013
£’000
3,250
2012
£’000
3,250
£’000
£’000
2,992
2,982
●●
●●
On 5 July 2012, 20,000 5p ordinary shares were issued at nominal value to the Mulberry Group Plc
Employee Share Trust for future share awards; and
On 11 December 2012, 175,000 5p ordinary shares were issued at a premium of £1.47 per share for the
exercise of share options.
The Company has granted 209,234 options in respect of 5p ordinary shares during the year (2012: nil).
26. REsERvEs
The own share reserve represents 1,286,243 5p ordinary shares (2012: 1,715,893) at a cost of £2,937,548
(2012: £3,966,000). The shares have been purchased in the market or issued as new shares by the Company, and
are held by the Mulberry Group Plc Employee Share Trust to satisfy the deferred and matching shares under the
Deferred Bonus Plan and Co-ownership Equity Incentive Plan.
During the year, the reserve increased due to the purchase of 20,000 5p ordinary shares following an issue of
share capital by the Company at the nominal value of £1,000 and reduced by the vesting of 449,650 shares with
a value of £1,029,297.
27. OPERating lEasE aRRangEMEnts
Minimum lease payments under operating leases recognised as an
expense in the year
2013
£’000
9,938
2012
£’000
8,339
At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under
non-cancellable operating leases, which fall due as follows:
Within one year
In the second to fifth years inclusive
After five years
£’000
£’000
12,210
43,676
47,168
103,054
9,937
41,575
46,481
97,993
Operating lease payments represent rentals payable by the Group for certain of its retail stores, warehouses
and offices. The leases are for a varied length of time with the longest lease running until 2035. Leases are
typically subject to rent reviews at specified intervals and some payments are contingent upon levels of revenue
above minimum thresholds. The amount paid under this contingent element in the year was £2,328,000
(2012: £2,098,000).
42
43
Mulberry-Annual Report 2013.indd 43
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:53
Mulberry Group plc Notes to the consolidated financial statements
(continued)
28. cOntingEnt liaBilitiEs
Mulberry Group plc has acted as a guarantor on various property leases entered into between its subsidiaries
and third-party lessors. No amounts were outstanding at the year end in respect of such guarantees (2012: nil).
29. sHaRE‑BasED PaYMEnts
The Group operated the following schemes during the year.
Mulberry group plc 2008 unapproved share Option scheme
The scheme was established on 14 April 2008 and is open to all employees of Mulberry Group plc and its
subsidiaries. The exercise price is equal to the market value of the shares on the date of grant. The vesting period
is three years. If the options remain unexercised for a period of ten years from the date of grant they expire.
Options may be forfeited if the employee leaves the Group.
Details of the share options movements during the year are as follows:
2013
2012
number
of share
options
441,000
(10,000)
(221,000)
210,000
140,000
Weighted
average
exercise
price (in £)
3.40
–
1.51
4.98
1.45
number
of share
options
1,361,000
–
(920,000)
441,000
186,000
Weighted
average
exercise
price (in £)
2.13
–
1.45
3.40
1.45
Outstanding at beginning of the year
Forfeited during the year
Exercised during the year
Outstanding at the end of the year
Exercisable at the end of the year
The weighted average share price at the date of exercise for share options exercised during the period was
£11.70 (2012: £13.77). The options outstanding at 31 March 2013 had a weighted average remaining contractual
life of 0.8 years (2012: 0.6 years).
The inputs into the Black-Scholes model are as follows:
Share price
Exercise price
Expected volatility
Expected life
Risk-free rate
Expected dividend yields
2013
2012
£1.52 to £12.05
£1.52 to £12.05
50.21% to 62.41%
3.25 years
1.88% to 1.99%
0.3% to 1.6%
£1.44½ to £12.05
£1.44½ to £12.05
50.21% to 62.41%
3.25 years
1.88% to 4.93%
0.3% to 1.6%
Expected volatility was based on historical volatility over the expected life of the scheme. The expected life
is based upon historical data and has been adjusted based on management’s best estimate for the effects of
non-transferability, exercise restrictions, and behavioural considerations.
44
45
Mulberry-Annual Report 2013.indd 44
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:53
Mulberry Group plc 29. sHaRE‑BasED PaYMEnts (continued)
Mulberry group plc 2008 Deferred Bonus Plan
The plan was established on 8 August 2008 and is open to all employees of Mulberry Group plc and its subsidiaries.
The share-based payments charge relates to the cost of matching shares awarded to employees participating in
this plan. The vesting period is two years. If the matching shares remain unexercised after a period of ten years
from the date of grant, the award expires. The matching shares may be forfeited if the employee leaves the
Group.
Details of the share options outstanding during the year are as follows:
Outstanding at beginning of the year
Granted during the year
Exercised during the year
Outstanding at the end of the year
Exercisable at the end of the year
2013
number of
matching
shares
2012
number of
matching
shares
180,123
25,115
(37,082)
238,717
–
(58,594)
168,156
180,123
109,771
18,210
The options outstanding at 31 March 2013 had a weighted average remaining contractual life of 0.4 years
(2012: 0.4 years) and have an exercise price of nil. The weighted average fair value of options granted during the
year was nil (2012: nil).
The inputs into the Black-Scholes model are as follows:
Share price
Exercise price
Expected volatility
Expected life
Risk-free rate
Expected dividend yields
2013
2012
£1.94 to £14.75
nil
42% to 76.07%
2.5 years to 2 years
0.27% to 1.96%
0.2% to 1.6%
£1.21½ to £13.72
nil
65% to 76.07%
2.5 years
1.59% to 1.96%
0.3% to 1.6%
Expected volatility was based on historical volatility over the expected life of the scheme. The expected life
is based upon historical data and has been adjusted based on management’s best estimate for the effects of
non-transferability, exercise restrictions and behavioural considerations.
44
45
Mulberry-Annual Report 2013.indd 45
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:53
Mulberry Group plc Notes to the consolidated financial statements
(continued)
29. sHaRE‑BasED PaYMEnts (continued)
Mulberry group plc 2009 co‑ownership Equity incentive Plan
The plan was established on 20 August 2009. The vesting period is generally three years. The jointly owned shares
may be forfeited if the employee leaves the Group prior to vesting and the rights of the participants lapse if the
award has not been exercised after a period of seven years from the date of vesting.
Details of the share awards outstanding during the year are as follows:
2013
2012
number
of share
awards
1,525,670
–
(375,000)
1,150,670
950,000
Weighted
average
exercise
price (in £)
1.46
–
1.46
5.22
1.46
number
of share
awards
1,325,000
200,670
–
1,525,670
–
Weighted
average
exercise
price (in £)
1.46
23.02
–
4.29
–
Outstanding at beginning of the year
Granted during the year
Exercised during the year
Outstanding at the end of the year
Exercisable at the end of the year
The co-owned share rights outstanding at 31 March 2013 had a weighted average remaining contractual life of
1.9 years (2012: 0.8 years). The weighted average fair value of awards granted during the prior year was £4.57.
The inputs into the Black-Scholes model are as follows:
Share price
Exercise price
Expected volatility
Expected life
Risk-free rate
Expected dividend yields
2013
2012
£1.21½ to £18.89½
£1.46 to £23.02
47.96% to 53.79%
2.25 years to 4 years
0.41% to 2.16%
0.4% to 1.6%
£1.21½ to £18.89½
£1.46 to £23.02
47.96% to 53.79%
2.25 years to 4 years
0.41% to 2.16%
0.4% to 1.6%
Expected volatility was based on historical volatility over the expected life of the scheme. The expected life
is based upon historical data and has been adjusted based on management’s best estimate for the effects of
non-transferability, exercise restrictions and behavioural considerations.
46
47
Mulberry-Annual Report 2013.indd 46
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:53
Mulberry Group plc 29. sHaRE‑BasED PaYMEnts (continued)
Mulberry group plc long term incentive Plan
The plan was established on 19 December 2012. The vesting period is generally three years and is dependent
upon attainment of certain performance conditions, including achievement of Group revenue and EBIT growth.
The options may be forfeited if the employee leaves the Group and the rights of the participants’ lapse if the
award has not been exercised after a period of five years from the date of vesting.
Details of the share awards outstanding during the year are as follows:
Granted during the year
Forfeited during the year
Outstanding at the end of the year
Exercisable at the end of the year
2013
Weighted
average
exercise
price
(in £)
nil
–
nil
–
number
of share
options
209,234
(18,892)
190,342
–
The options outstanding at 31 March 2013 had a weighted average remaining contractual life of 0.93 years and
have an exercise price of nil. The weighted average fair value of options granted during the year was £1.51.
The inputs into the Black-Scholes model are as follows:
Share price
Exercise price
Expected volatility
Expected life
Risk-free rate
Expected dividend yields
2013
£11.63
nil
53%
1.5 years to 2.5 years
0.27% to 0.32%
0.2%
Expected volatility was based on historical volatility over the expected life of the scheme. The expected life
is based upon historical data and has been adjusted based on management’s best estimate for the effects of
non-transferability, exercise restrictions and behavioural considerations.
46
47
Mulberry-Annual Report 2013.indd 47
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:53
Mulberry Group plc Notes to the consolidated financial statements
(continued)
29. sHaRE‑BasED PaYMEnts (continued)
The Group recognised the following expenses related to share-based payments:
Mulberry Group plc 2008 Unapproved Share Option Scheme
Mulberry Group plc 2008 Deferred Bonus Plan
Mulberry Group plc 2009 Co-ownership Equity Incentive Plan
Mulberry Group plc Long Term Incentive Plan
2013
£’000
93
392
429
97
1,011
2012
£’000
187
348
166
–
701
30. REtiREMEnt BEnEFit scHEMEs
The Group contributes to personal pension plans for all qualifying employees. The total cost charged to income
of £719,000 (2012: £521,000) represents contributions payable to these personal plans by the Group at rates
contractually agreed. As at 31 March 2013, contributions due in respect of the current reporting period which had
not been paid over to the plans were £106,000 (2012: £65,000).
31. Financial instRuMEnts
capital risk management
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns
while maximising the return to shareholders through the optimisation of the debt and equity balance. The capital
structure of the Group consists of cash and cash equivalents and equity attributable to equity holders of the
parent, comprising issued capital, reserves and retained earnings as disclosed in the consolidated statement of
changes in equity and notes 25 and 26.
Externally imposed capital requirement
The Group is not subject to externally imposed capital requirements.
significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the
basis of measurement and the basis on which income and expenses are recognised, in respect of each class of
financial asset, financial liability and equity instrument are disclosed in note 3 to the financial statements.
categories of financial instruments
Financial assets
Loans and receivables (including cash and cash equivalents)
Financial liabilities
Amortised cost
carrying values
2013
£’000
2012
£’000
30,853
37,797
11,760
12,696
48
49
Mulberry-Annual Report 2013.indd 48
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:54
Mulberry Group plc 31. Financial instRuMEnts (continued)
Financial risk management objectives
The Group’s Finance Director is responsible to the Board for the Group’s financial risk management. This includes
analysing the Group’s exposure by degree and magnitude of risks. These risks include market risk (including
currency risk and interest rate risk), credit risk and liquidity risk.
The Group seeks to minimise the effects of these risks where possible. It does this by maintaining bank accounts
in all of the major currencies in which it trades and it operates its own internal hedging by offsetting currency
receipts on sales against purchases in related currencies. Where there is significant risk remaining, and the Group
deems it necessary, it uses derivative financial instruments to hedge these risk exposures. The Group does not
enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.
Market risk
The Group’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates
and interest rates. The Group reviews the need to enter into financial instruments on a regular basis but has not
entered into any during the current or previous periods. As the Group has no debt, it is not significantly exposed
to interest rate risk on its financial liabilities and continues to seek to maximise the returns from its bank deposits.
Foreign currency risk management
The Group undertakes certain transactions denominated in foreign currencies. Hence, exposures to exchange
rate fluctuations arise. The carrying amounts of the Group’s foreign currency denominated monetary assets and
monetary liabilities at the reporting date are as follows:
Euro
US Dollar
liabilities
assets
2013
£’000
2,272
2,953
2012
£’000
2,972
506
2013
£’000
4,283
3,864
2012
£’000
5,947
5,745
Foreign currency sensitivity analysis
The Group is mainly exposed to the US Dollar and Euro currencies.
The following table details the Group’s sensitivity to a 10% increase or decrease in Sterling against the relevant
foreign currencies. 10% is the sensitivity rate which represents management’s assessment of the reasonably
possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency
denominated monetary items and adjusts their translation at the period-end for a 10% change in foreign currency
rates. A positive number below indicates an increase in profit and other equity where Sterling strengthens 10%
against the relevant currency. For a 10% weakening of Sterling against the relevant currency, there would be an
equal and opposite impact on the profit and other equity, and the balances below would be negative or positive.
Profit or loss
Euro currency
impact
2013
£’000
183
2012
£’000
270
us Dollar currency
impact
2013
£’000
2012
£’000
83
476
48
49
Mulberry-Annual Report 2013.indd 49
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:54
Mulberry Group plc Notes to the consolidated financial statements
(continued)
31. Financial instRuMEnts (continued)
interest rate risk management and sensitivity analysis
The Group’s exposure to interest rate risk on borrowings is limited as there is no outstanding debt within the
Group. The Group’s exposures to interest rates on financial assets and financial liabilities are detailed in the
liquidity risk management section of this note.
The Group’s sensitivity to changes in interest rates has been illustrated based on a 1% increase or decrease in
interest rates. For floating rate deposits and liabilities, the analysis is prepared assuming the amount of liability
outstanding at the balance sheet date was outstanding for the whole year. A 1% increase or decrease has been
applied to represent management’s assessment of the reasonably possible change in interest rates.
If interest rates had been 1% higher and all other variables were held constant, the Group’s profit for the year
ended 31 March 2013 would have increased by £123,000 (2012: increase by £87,500). This is mainly attributable to
the Group’s exposure to interest rates on its cash deposits.
The Group’s sensitivity to interest rates has increased during the current period mainly due to the net increase in
the funds on which interest is received.
credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss
to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining
letters of credit where deemed appropriate, as a means of mitigating the risk of financial loss from defaults.
Trade receivables consist of a large number of customers. Credit evaluation is performed on the financial condition
of accounts receivable and, where appropriate, credit insurance cover is purchased.
The Group does not have any significant credit risk exposure to any single counterparty or any group of
counterparties having similar characteristics, other than as disclosed in note 21. The Group defines counterparties
as having similar characteristics if they are connected entities.
liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an
appropriate liquidity risk management framework for the management of the Group’s short, medium and
long term funding and liquidity management requirements. The Group manages liquidity risk by maintaining
adequate reserves and banking facilities by continuously monitoring forecast and actual cash flows and matching
the maturity profiles of financial assets and liabilities. Included in note 22 is a description of additional undrawn
facilities that the Group has at its disposal to reduce further liquidity risk.
50
51
Mulberry-Annual Report 2013.indd 50
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:54
Mulberry Group plc 31. Financial instRuMEnts (continued)
liquidity and interest risk tables
The Group’s financial assets all contractually mature within the next year. Trade receivables do not accrue interest.
The weighted average interest rate on cash and cash equivalents was 0.3% (2012: 0.7%).
The following tables detail the Group’s remaining contractual maturity for its financial liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which
the Group can be required to pay. The table includes both interest and principal cash flows.
Weighted
average
interest
rate
2013
less than
1 year
£’000
1 to
2 years
£’000
2 to
3 years
£’000
3 to
4 years
£’000
4 to
5 years
£’000
total
£’000
Current liabilities
–
32,796
–
–
–
–
32,796
Weighted
average
interest
rate
2012
less than
1 year
£’000
1 to
2 years
£’000
2 to
3 years
£’000
3 to
4 years
£’000
4 to
5 years
£’000
total
£’000
Current liabilities
–
40,815
–
–
–
–
40,815
Fair value of financial instruments
The carrying amounts of financial assets and financial liabilities recorded at amortised cost in the financial
statements approximate to their fair values.
32. RElatED PaRtY tRansactiOns
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on
consolidation and are not disclosed in this note. Transactions between the Group and its associates are disclosed
below.
usa transaction
On 5 October 2009, a transaction to assume operational control of the two New York stores and the distribution
rights to the North American market previously held by the Group’s joint venture partner, Mulberry USA LLC, was
completed. As part of this agreement, deferred consideration of up to £1,000,000 became payable to Challice
Limited (the remaining shareholder of Mulberry USA LLC and the majority shareholder of Mulberry Group plc)
on a stepped basis if sales generated from the USA operations during the third year post completion exceeded
certain agreed thresholds. The consideration was to be payable in cash or, at Mulberry Group plc’s option, new
Mulberry shares, the number of shares being calculated at the then prevailing share price. Following the growth
in the USA operations, as at 31 March 2011 the Directors concluded that it was probable that the deferred
consideration would become payable and as such a provision for £1,000,000 was made and disclosed as an
exceptional cost. This has subsequently been paid in full during April 2012.
50
51
Mulberry-Annual Report 2013.indd 51
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:54
Mulberry Group plc Notes to the consolidated financial statements
(continued)
32. RElatED PaRtY tRansactiOns (continued)
trading transactions
During the year, Group companies entered into the following transactions with related parties which are not
members of the Group:
Mulberry Oslo AS
Club 21 Retail (Hong Kong) Limited*
Club 21 Shanghai Limited*
Club 21 Pte Limited*
Club 21 (Thailand) Co Limited*
Club 21 Pte Limited Taiwan Branch*
Club 21 Distribution (S) Pte Limited*
Club Twenty-One Retail (M) Sdn Bhd*
Club 21 Australia Pty Ltd*
Club 21 Japan Company Ltd*
sale of goods
2013
£’000
1,694
3,352
818
2,248
1,021
415
–
363
554
1,105
2012
£’000
1,744
5,688
–
1,521
921
474
–
415
578
872
amounts owed by
related parties
2013
£’000
2012
£’000
230
259
394
227
71
22
–
6
24
(32)
155
632
–
369
77
35
(9)
13
25
3
* These are related parties of the Group as they are all related companies of Challice Limited, the majority
shareholder of the Company.
All sales of goods have been made on an arm’s length basis. The amounts outstanding are unsecured and will be
settled in cash. No guarantees have been given or received. No provisions have been made for doubtful debts in
respect of the amounts owed by related parties.
During the year, Mulberry Company (Design) Limited paid £867,000 towards the refurbishment and new shop-fit
for Club 21 Pte Limited’s new store in the Mandarin Gallery, Singapore. No amounts were outstanding in relation
to this at the year end.
Remuneration of key management personnel
The remuneration of the Directors, who are the key management personnel of the Group, is set out below in
aggregate for each of the categories specified in IAS 24 ‘Related Party Disclosures’. Further information about
the remuneration of individual Directors is provided within the audited part of the Directors’ remuneration report.
Short-term employee benefits
Post-employment benefits
Share-based payments
2013
£’000
1,638
89
573
2,300
2012
£’000
2,326
31
215
2,572
33. cOntROlling PaRtY
At the year end, Challice Limited controlled 56.14% of the issued share capital of the Company. The ultimate
controlling parties of Challice Limited are Mr Ong Beng Seng and Mrs Christina Ong. As at the date of signing
the financial statements, Challice Limited controlled 56.14% of the issued share capital of the Company.
52
53
Mulberry-Annual Report 2013.indd 52
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:54
Mulberry Group plc Company financial statements
Contents
Independent auditor’s report
Company balance sheet
Notes to the company financial statements
Notice of Annual General Meeting
Group five-year summary
Page
54
55
56
62
66
52
53
Mulberry-Annual Report 2013.indd 53
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:54
Mulberry Group plc Independent auditor’s report
to the members of Mulberry Group plc
We have audited the parent company financial statements of Mulberry Group plc for the year ended 31 March 2013
which comprise the parent company balance sheet and the related notes 34 to 45. The financial reporting framework
that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United
Kingdom Generally Accepted Accounting Practice).
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as
a body, for our audit work, for this report, or for the opinions we have formed.
REsPEctivE REsPOnsiBilitiEs OF DiREctORs anD auDitOR
As explained more fully in the Directors’ responsibilities statement, the Directors are responsible for the preparation of
the parent company financial statements and for being satisfied that they give a true and fair view. Our responsibility
is to audit and express an opinion on the parent company financial statements in accordance with applicable law and
International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices
Board’s Ethical Standards for Auditors.
scOPE OF tHE auDit OF tHE Financial statEMEnts
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud
or error. This includes an assessment of: whether the accounting policies are appropriate to the parent company’s
circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant
accounting estimates made by the Directors; and the overall presentation of the financial statements. In addition,
we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with
the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we
consider the implications for our report.
OPiniOn On Financial statEMEnts
In our opinion the parent company financial statements:
●● give a true and fair view of the state of the parent company’s affairs as at 31 March 2013;
●● have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
●● have been prepared in accordance with the requirements of the Companies Act 2006.
OPiniOn On OtHER MattER PREscRiBED BY tHE cOMPaniEs act 2006
In our opinion the information given in the Directors’ report for the financial year for which the financial statements are
prepared is consistent with the parent company financial statements.
MattERs On WHicH WE aRE REQuiRED tO REPORt BY EXcEPtiOn
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to
you if, in our opinion:
●● adequate accounting records have not been kept by the parent company, or returns adequate for our audit have
not been received from branches not visited by us; or
●● the parent company financial statements are not in agreement with the accounting records and returns; or
●● certain disclosures of Directors’ remuneration specified by law are not made; or
●● we have not received all the information and explanations we require for our audit.
OtHER MattERs
We have reported separately on the Group financial statements of Mulberry Group plc for the year ended
31 March 2013.
David Hedditch (Senior statutory auditor)
for and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor
Bristol, United Kingdom
12 June 2013
54
55
Mulberry-Annual Report 2013.indd 54
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:54
Mulberry Group plc Company balance sheet
At 31 March 2013
Fixed assets
Tangible fixed assets
Investments
current assets
Debtors
creditors: amounts falling due within one year
net current assets
total assets less current liabilities
Provision for liabilities
net assets
capital and reserves
Called up share capital
Share premium account
Own share reserve
Capital redemption reserve
Special reserve
Profit and loss account
shareholders’ funds
note
37
36
38
39
40
43
44
44
44
44
44
45
2013
£’000
9,798
13,610
23,408
2012
£’000
10,660
13,242
23,902
42,252
17,087
(33,874)
(14,364)
8,378
2,723
31,786
(174)
31,612
2,992
11,835
(2,937)
154
4,187
15,381
31,612
26,625
(174)
26,451
2,982
11,578
(3,966)
154
4,187
11,516
26,451
The financial statements of Mulberry Group plc (company number 01180514) were approved by the Board of Directors
and authorised for issue on 12 June 2013. They were signed on its behalf by:
Bruno Guillon
Director
Roger Mather
Director
54
55
Mulberry-Annual Report 2013.indd 55
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:54
Mulberry Group plc Notes to the company financial statements
Year ended 31 March 2013
34. signiFicant accOunting POliciEs
Basis of accounting
The separate financial statements of the Company are presented as required by the Companies Act 2006 and
have been prepared in accordance with applicable United Kingdom Accounting Standards and law. They have
been prepared under the historical cost convention and under the going concern assumption. Further details of
the Directors’ considerations in relation to going concern are included in the Directors’ report.
The principal accounting policies are summarised below. These have been applied consistently throughout the
year and the preceding year.
tangible fixed assets
Fixed assets are shown at cost less accumulated depreciation and any provision for impairment.
Depreciation is provided at rates calculated to write off the cost, less estimated residual value, of each asset on a
straight-line basis over its expected useful life at the following rates per annum:
Freehold buildings
Short leasehold property
Fixtures and fittings
Freehold land is not depreciated.
investments
5% per annum
term of the lease
10% to 33% per annum
Fixed asset investments in subsidiaries and associates are shown at cost less provision for impairment.
Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual
arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of
the Group after deducting all of its liabilities.
Equity instruments
Equity instruments issued by the Company are recorded as the proceeds received, net of direct issue costs.
Foreign exchange
Transactions denominated in foreign currencies are translated into Sterling at the rates ruling at the dates of
the transactions. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date
are translated at the rates ruling at that date. These translation differences are dealt with in the profit and loss
account.
Pension costs
Payments to employees’ personal pension plans are charged as an expense as they fall due.
share‑based payments
The Company participates in a number of executive and employee share schemes. For all grants of share options,
the fair value as at the date of grant is calculated using the Black-Scholes model and the corresponding expense
is recognised on a straight-line basis over the vesting period based on the Company’s estimate of the proportion
of the shares that will actually vest.
56
57
Mulberry-Annual Report 2013.indd 56
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:54
Mulberry Group plc 34. signiFicant accOunting POliciEs (continued)
taxation
Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been
enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance
sheet date where transactions or events that result in an obligation to pay more tax in the future or a right to
pay less tax in the future have occurred at the balance sheet date. Timing differences are differences between
the Company’s taxable profits and its results as stated in the financial statements that arise from the inclusion of
gains and losses in tax assessments in periods different from those in which they are recognised in the financial
statements. A net deferred tax asset is regarded as recoverable and therefore recognised only when, on the
basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits
from which the future reversal of the underlying timing differences can be deducted. Deferred tax is measured at
the average tax rates that are expected to apply in the periods in which the timing differences are expected to
reverse, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is measured on a non-discounted basis. The taxation liabilities are reduced wholly or in part by the
surrender of tax losses by fellow Group undertakings for which payment is made.
cash flow statement
A cash flow statement has not been prepared as the consolidated financial statements include a consolidated
cash flow statement.
35. PROFit FOR tHE YEaR
As permitted by Section 408 of the Companies Act 2006 the Company has elected not to present its own profit
and loss account for the year. Mulberry Group plc reported a profit for the financial year ended 31 March 2013 of
£7,653,000 (2012: £6,944,000).
The auditor’s remuneration for audit and other services is disclosed within note 9 to the consolidated financial
statements. The only employees of the Company are the Directors whose emoluments are disclosed in the
Directors’ remuneration report.
36. FiXED assEt invEstMEnts
cost
At 1 April 2012
Additions
At 31 March 2013
Provision for impairment
At 1 April 2012
Charge for the year
At 31 March 2013
net book value
End of year
Beginning of year
subsidiaries
shares
£’000
subsidiaries
loans
£’000
2,898
368
3,266
1,460
–
1,460
1,806
1,438
11,804
–
11,804
–
–
–
11,804
11,804
total
£’000
14,702
368
15,070
1,460
–
1,460
13,610
13,242
56
57
During the year, the Company established subsidiaries in Austria and Canada.
Mulberry-Annual Report 2013.indd 57
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:54
Mulberry Group plc Notes to the company financial statements
(continued)
36. FiXED assEt invEstMEnts (continued)
The Company has investments in the following subsidiaries and associates which principally contributed to the
profits or net assets of the Group:
country of
incorporation
Principal activity
Holding
of
ordinary
shares
subsidiaries
Mulberry Company (Design) Limited
England and Wales Design and manufacture of
100%
Mulberry Company (France) SARL
France
clothing and fashion accessories
in the UK
Establishment and operation of
retail stores in France
100%
Mulberry Company (Sales) Limited
England and Wales Establishment and operation of
100%*
retail stores in the UK
Mulberry Company (Europe) Limited
England and Wales
Intermediary holding company
Mulberry Company (USA) Inc***
USA
Mulberry Group Plc Employee Share Trust Guernsey
Mulberry Company (Germany) GmbH
Germany
Mulberry Company (Switzerland) GmbH
Switzerland
Mulberry Company (Austria) GmbH
Austria
Mulberry Company (Canada) Inc
Canada
associates
Establishment and operation of
retail stores in the USA
Operation of an employee share
trust
Establishment and operation of
retail stores in Germany
Establishment and operation of
retail stores in Switzerland
Establishment and operation of
retail stores in Austria
Establishment and operation of
retail stores in Canada
100%
100%
100%
100%
100%
100%
100%
Mulberry Oslo AS**
Norway
Operation of a retail store in Oslo
50%*
Owned by Mulberry Company (Europe) Limited
*
** Accounting reference date of 30 September
*** Previously called Kilver Street Inc
58
59
Mulberry-Annual Report 2013.indd 58
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:55
Mulberry Group plc 37. tangiBlE FiXED assEts
cost
At 1 April 2012
Additions
Reclassification
At 31 March 2013
Depreciation
At 1 April 2012
Charge for the year
At 31 March 2013
net book value
End of year
Freehold
land and
buildings
£’000
short
leasehold
land and
buildings
£’000
Fixtures
and
fittings
£’000
5,909
219
137
6,265
1,582
236
1,818
6,696
277
(137)
6,836
1,072
1,037
2,109
4,447
4,727
total
£’000
13,445
543
–
13,988
2,785
1,405
4,190
9,798
10,660
840
47
–
887
131
132
263
624
709
Beginning of year
4,327
5,624
Freehold land of £997,000 (2012: £997,000) has not been depreciated.
At 31 March 2013, the Company had entered into contractual commitments for the acquisition of property of
£nil (2012: nil). There are no assets under the course of construction where depreciation has not yet commenced
(2012: nil).
38. DEBtORs
amounts falling due within one year:
Amounts owed by Group undertakings
Prepayments and accrued income
2013
£’000
41,893
359
42,252
2012
£’000
16,827
260
17,087
Included within amounts owed by Group undertakings is £14,195,000 due after one year.
58
59
Mulberry-Annual Report 2013.indd 59
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:55
Mulberry Group plc Notes to the company financial statements
(continued)
39. cREDitORs
amounts falling due within one year:
Amounts owed to Group undertakings
Accruals and deferred income
40. PROvisiOn FOR liaBilitiEs
Deferred tax - accelerated capital allowances
Deferred tax liability at 1 April 2012
Charge for the year
Deferred tax liability at 31 March 2013
41. RElatED PaRtY tRansactiOns
2012
£’000
6,877
7,487
14,364
2012
£’000
174
2013
£’000
29,296
4,578
33,874
2013
£’000
174
£’000
174
–
174
Details of related party transactions are provided in note 32 of the consolidated financial statements. The
Company has taken advantage of the exemption in FRS 8 not to disclose details of transactions with other wholly
owned Group companies.
42. cOntingEnt liaBilitiEs
Mulberry Group plc has acted as a guarantor on various property leases entered into between its subsidiaries
and third-party lessors. No amounts were outstanding at the year end in respect of such guarantees (2012: nil).
43. callED uP sHaRE caPital
authorised
65,000,000 ordinary shares of 5p each (2012: 65,000,000)
issued and fully paid
59,830,175 ordinary shares of 5p each (2012: 59,635,175)
The following share issues have been made during the year:
2013
£’000
3,250
2012
£’000
3,250
£’000
£’000
2,992
2,982
●●
●●
On 5 July 2012, 20,000 5p ordinary shares were issued at nominal value to the Mulberry Group Plc
Employee Share Trust for future share awards; and
On 11 December 2012, 175,000 5p ordinary shares were issued at a premium of £1.47 per share for the
exercise of share options.
The Company has granted 209,234 options in respect of 5p ordinary shares during the year (2012: nil).
60
61
Mulberry-Annual Report 2013.indd 60
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:55
Mulberry Group plc 44. REsERvEs
Balance at 1 April 2012
Profit for the year
Ordinary dividends paid
Charge for share-based
payments
Exercise of share options
Issued share capital
Own shares
share
capital
£’000
share
premium
£’000
Own
share
reserve
£’000
capital
redemption
reserve
£’000
2,982
–
–
–
9
1
–
11,578
–
–
–
257
–
–
(3,966)
–
–
–
–
–
1,029
154
–
–
–
–
–
–
special
reserve*
£’000
4,187
–
–
–
–
–
–
Profit
and loss
account
£’000
11,516
7,653
(2,906)
888
(1,770)
–
–
Balance at 31 March 2013
2,992
11,835
(2,937)
154
4,187
15,381
* Created as part of a capital restructuring of the Group in 2004.
The cumulative amount of goodwill resulting from acquisitions in earlier financial years which has been written off
is £165,000 (2012: £165,000).
The own share reserve represents 1,286,243 5p ordinary shares (2012: 1,715,893) at a cost of £2,938,000
(2012: £3,966,000). The shares have been purchased in the market or issued as new shares by the Company, and
are held by the Mulberry Group Plc Employee Share Trust to satisfy the deferred and matching shares under the
Deferred Bonus Plan and Co-ownership Equity Incentive Plan.
45. REcOnciliatiOn OF MOvEMEnts in sHaREHOlDERs’ FunDs
Balance at 1 April 2012
Profit for the year
Ordinary dividends paid
Charge for share-based payments
Exercise of share options
Issued share capital
Own shares
Balance at 31 March 2013
£’000
26,451
7,653
(2,906)
888
(1,504)
1
1,029
31,612
60
61
Mulberry-Annual Report 2013.indd 61
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:55
Mulberry Group plc Notice of Annual General Meeting
Year ended 31 March 2013
Notice is given that the Annual General Meeting of Mulberry Group plc will be held at Mulberry Group plc’s offices,
30 Kensington Church Street, London, W8 4HA on 4 September 2013 at 11 am for the following purposes:
ORDinaRY BusinEss:
To consider and, if thought fit, pass the following resolutions, which will be proposed as ordinary resolutions:
adoption of financial statements
1. That the report of the Directors and the financial statements for the year ended 31 March 2013 together with the
independent auditor’s report be received and adopted.
Dividend declaration
2. To declare a final dividend of 5.0 pence per ordinary share for the year ended 31 March 2013.
Election of Directors
3. To elect Mr C O Cornu as a Director who, having been appointed since the last Annual General Meeting, offers
himself for re-election in accordance with the Company’s Articles of Association.
Re‑election of retiring Directors
4. That Mr B L K Heng who retires as a Director by rotation in accordance with the Company’s Articles of Association
be re-elected as a Director.
5. That Mr S Grapstein who retires as a Director by rotation in accordance with the Company’s Articles of Association
be re-elected as a Director.
appointment of auditors
6. That Deloitte LLP be re-appointed as auditors of the Company until the conclusion of the next general meeting
before which accounts are laid and, that their remuneration be agreed by the Directors.
sPEcial BusinEss:
To consider and, if thought fit, pass the following resolutions, of which resolution 7 will be proposed as an ordinary
resolution, and resolutions 8 and 9 will be proposed as special resolutions:
Directors’ power to allot relevant securities
7. That, in substitution for any equivalent authorities and powers granted to the Directors prior to the passing of this
resolution, the Directors be and they are generally and unconditionally authorised pursuant to Section 551 of the
Companies Act 2006 (“the Act”) to exercise all powers of the Company to allot shares in the Company, and grant
rights to subscribe for or to convert any security into shares of the Company (such shares, and rights to subscribe
for or to convert any security into shares of the Company being “relevant securities”) up to an aggregate nominal
amount of £997,170, provided that, unless previously revoked, varied or extended, this authority shall expire on
the conclusion of the Annual General Meeting of the Company to be held in 2014, except that the Company may
at any time before such expiry make an offer or agreement which would or might require relevant securities to be
allotted after such expiry and the Directors may allot relevant securities in pursuance of such an offer or agreement
as if this authority had not expired.
62
63
Mulberry-Annual Report 2013.indd 62
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:55
Mulberry Group plc Waiver of statutory pre‑emption rights
8. That the Directors be and they are empowered pursuant to Section 570(1) of the Act to allot equity securities (as
defined in Section 560(1) of the Act) of the Company wholly for cash pursuant to the authority of the Directors
under Section 551 of the Act conferred by resolution 7 above, and/or by way of a sale of treasury shares (by virtue
of Section 573 of the Act), in each case as if Section 561(1) of the Act did not apply to such allotment, provided that:
(a) the power conferred by this resolution shall be limited to:
(i) the allotment of equity securities in connection with an offer of equity securities to the holders of ordinary
shares in the capital of the Company in proportion as nearly as practicable to their respective holdings of
such shares, but subject to such exclusions or other arrangements as the Directors may deem necessary
or expedient to deal with fractional entitlements or legal or practical problems arising under the laws or
requirements of any overseas territory or by virtue of shares being represented by depository receipts or the
requirements of any regulatory body or stock exchange or any other matter whatsoever; and
(ii) the allotment, otherwise than pursuant to sub-paragraph (i) above, of equity securities up to an aggregate
nominal value equal to £149,575; and
(b) unless previously revoked, varied or extended, this power shall expire on the conclusion of the Annual
General Meeting of the Company to be held in 2014 except that the Company may before the expiry of this
power make an offer or agreement which would or might require equity securities to be allotted after such
expiry and the Directors may allot equity securities in pursuance of such an offer or agreement as if this power
had not expired.
authority to purchase ordinary shares (market purchases)
9.
That the Company be and is hereby unconditionally and generally authorised for the purposes of Section 701 of
the Act to make market purchases (within the meaning of Section 693(4) of the Act) of its ordinary shares of 5p each
(“Ordinary Shares”) provided that:
(a) the maximum number of Ordinary Shares authorised to be purchased is 2,991,509;
(b) the minimum price which may be paid for any such Ordinary Share is 5p;
(c) the maximum price which may be paid for an Ordinary Share shall be an amount equal to 105% of the
average middle market prices for an Ordinary Share as derived from the London Stock Exchange Daily
Official List for the five business days immediately preceding the day on which the Ordinary Share is
contracted to be purchased; and
(d) this authority shall, unless previously renewed, revoked or varied, expire on the earlier of the date falling
18 months after the date of the passing of this resolution and the conclusion of the Annual General Meeting
of the Company to be held in 2014, but the Company may enter into a contract for the purchase of Ordinary
Shares before the expiry of this authority which would or might be completed (wholly or partly) after its expiry.
By order of the Board
Kate Anthony Wilkinson
Secretary
12 June 2013
Registered office: The Rookery, Chilcompton, Bath, Somerset, BA3 4EH
62
63
Mulberry-Annual Report 2013.indd 63
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:55
Mulberry Group plc
Notice of Annual General Meeting
(continued)
notes:
1. All members holding ordinary shares are entitled to attend, speak and vote at the meeting. Such members may
appoint a proxy to attend, speak and vote instead of them. A proxy need not also be a member of the Company
but must attend the AGM in order to represent his appointer. A member may appoint more than one proxy
provided each proxy is appointed to exercise rights attached to different shares (so a member must have more
than one share to be able to appoint more than one proxy). A form of proxy is enclosed. The notes to the form of
proxy include instructions on how to appoint the Chairman of the AGM or another person as proxy and how to
appoint a proxy electronically or by using the CREST proxy appointment service. To be effective the form must
reach the Company’s registrar, Computershare Investor Services PLC at The Pavilions, Bridgwater Road, Bristol
BS99 6ZY by 11 am on 2 September 2013.
2. Pursuant to regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that only those
persons registered in the register of members of the Company at 6.00 pm on 2 September 2013 (or if the AGM is
adjourned, 48 hours before the time fixed for the adjourned AGM) shall be entitled to attend and vote at the AGM
in respect of the number of shares registered in their name at that time. Any changes to the register of members
after such time shall be disregarded in determining the rights of any person to attend or vote at the AGM.
3. Please note that communications regarding the matters set out in this Notice of Annual General Meeting will not
be accepted in electronic form other than as specified in the enclosed form of proxy.
4. As at 12 June 2013 (being the last business day prior to the publication of this Notice) the Company’s issued share
capital consists of 59,830,175 ordinary shares, carrying one vote each. Therefore, the total voting rights in the
Company as at 12 June 2013 are 59,830,175.
5. The following documents are available for inspection at the registered office of the Company during the usual
business hours on any weekday (Saturday, Sunday or public holidays excluded) from the date of this Notice until
the conclusion of the AGM and will also be available for inspection at the place of the AGM from 10.45 am on the
day of the AGM until its conclusion:
(a) the register of Directors’ interests in the shares of the Company; and
(b) copies of the Executive Directors’ service contracts with the Company and letters of appointment of the Non-
Executive Directors.
64
65
Mulberry-Annual Report 2013.indd 64
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:55
Mulberry Group plc Explanatory notes to the Special Business to be transacted at the meeting
Resolution 7 – Directors’ power to allot relevant securities
Resolution 7, which will be proposed as an ordinary resolution, grants the Directors authority to allot shares in the
capital of the Company and other relevant securities up to an aggregate nominal value of £997,170, representing
approximately one-third of the nominal value of the issued ordinary share capital of the Company as at 12 June 2013,
being the latest practicable date before publication of this Notice. The Directors do not have any present intention
of exercising the authorities conferred by this resolution but they consider it desirable that the specified amount of
unissued share capital is available for issue so that they can more readily take advantage of possible opportunities in
the future.
Unless revoked, varied or extended, this authority will expire at the conclusion of the next Annual General Meeting of
the Company or the date falling 18 months from the passing of the resolution, whichever is the earlier.
Resolution 8 – waiver of statutory pre‑emption rights
Resolution 8, which will be proposed as a special resolution, authorises the Directors in certain circumstances to allot
equity securities for cash other than in accordance with statutory pre-emption rights (which require a company to
offer all allotments for cash first to existing shareholders in proportion to their holdings). The relevant circumstances
are either where the allotment takes place in connection with a rights issue or the allotment is limited to a maximum
nominal amount of £149,575, representing approximately 5% of the nominal value of the issued ordinary share capital
of the Company as at 12 June 2013, being the latest practicable date before publication of this Notice. Unless revoked,
varied or extended, this authority will expire at the conclusion of the next AGM of the Company or 18 months after the
passing of the resolution, whichever is the earlier.
The Company may hold any shares it buys back “in treasury” and then sell them at a later date for cash rather
than simply cancelling them. Any such sales are required to be made on a pre-emptive, pro-rata basis to existing
shareholders unless shareholders agree by special resolution to disapply such pre-emption rights. Accordingly, in
addition to giving the Directors power to allot unissued ordinary shares on a non pre-emptive basis, resolution 8 will
also give the Directors power to sell ordinary shares held in treasury on a non pre-emptive basis, subject always to the
limitations noted above.
The Directors consider that the power proposed to be granted by resolution 8 is necessary to retain flexibility in
relation to the management of the Company’s share capital, although they do not have any intention at the present
time of exercising such power.
Resolution 9 – authority to purchase ordinary shares (market purchases)
Resolution 9, which will be proposed as a special resolution, authorises the Directors to make market purchases of up
to 2,991,509 ordinary shares (representing approximately 5% of the Company’s issued ordinary shares as at 12 June
2013, being the latest practicable date before publication of this Notice). Shares so purchased may be cancelled or
held as treasury shares as noted above. The authority will expire at the end of the next Annual General Meeting of
the Company or 18 months from the passing of the resolution, whichever is the earlier. The Directors intend to seek
renewal of this authority at subsequent Annual General Meetings.
The minimum price that can be paid for an ordinary share is 5p, being the nominal value of an ordinary share. The
maximum price that can be paid is 5% over the average of the middle market prices for an ordinary share, derived from
the Daily Official List of the London Stock Exchange, for the five business days immediately before the day on which
the share is contracted to be purchased.
The Directors intend to exercise this right only when, in light of the market conditions prevailing at the time and taking
into account all relevant factors (for example, the effect on earnings per share), they believe that such purchases are in
the best interests of the Company and shareholders generally. The overall position of the Company will be taken into
account before deciding upon this course of action. The decision as to whether any such shares bought back will be
cancelled or held in treasury will be made by the Directors on the same basis at the time of the purchase.
64
65
Mulberry-Annual Report 2013.indd 65
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:55
Mulberry Group plc Group five-year summary
Year ended 31 March 2013
Results
Revenue
2009
£’000
2010
£’000
2011
£’000
2012
£’000
2013
£’000
58,585
72,052
121,645
168,451
165,130
Operating profit
3,930
4,856
23,010
35,417
25,531
Profit before tax
4,177
5,096
23,345
36,001
26,026
Profit attributable to equity holders
2,581
2,972
17,063
25,301
18,693
assets employed
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets
Key statistics
Earnings per share
Diluted earnings per share
11,694
24,572
(11,750)
(132)
__________
24,384
10,760
29,524
(13,819)
-
__________
26,465
20,620
55,967
(34,555)
-
__________
42,032
28,553
74,751
(40,815)
(26)
__________
62,463
39,716
71,789
(32,796)
–
__________
78,709
4.5p
4.5p
5.2p
5.2p
29.8p
29.1p
43.9p
43.4p
32.2p
32.0p
66
67
Mulberry-Annual Report 2013.indd 66
10 July 2013 12:22 PM-22726.04-proof 4
15/07/2013 07:14:55
Mulberry Group plc
Mulberry Group plc
The Rookery Chilcompton Somerset BA3 4EH
Tel +44 (0)1761 234 500 Fax +44 (0)1761 234 555 mulberry.com