QUIZ PLC
ANNUAL REPORT AND
FINANCIAL STATEMENTS 2019
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CONTINUED
ONLINE EXPANSION 17
18
19
UK STORE AND
CONCESSION
GROWTH
INTERNATIONAL
EXPANSION
STRATEGIC REPORT
2019 highlights
At a glance
Chairman’s statement
Our customers
Chief Executive’s strategic report
Financial and business review
Principal risks and uncertainties
Social responsibility
CORPORATE GOVERNANCE
Board of Directors
Governance framework
Audit Committee report
Nomination Committee report
Directors’ remuneration report
Directors’ report
Directors’ responsibilities statement
FINANCIAL STATEMENTS
Independent auditors’ report
Consolidated statement
of comprehensive income
02
04
08
10
12
24
28
32
34
36
39
41
42
46
48
49
53
Consolidated statement of financial position 54
Consolidated statement of changes in equity 55
Consolidated cash flow statement
Notes to the Group financial statements
Company statement of
comprehensive income
Company statement of financial position
Company statement of changes in equity
56
57
75
76
77
Notes to the Company financial statements 78
81
Company information
Stay up to date
WWW.QUIZGROUP.CO.UK
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
STAND
OUT
FROM
THE
CROWD
FURTHER EXPANSION
QUIZ is focused on delivering great products
at outstanding value. We continue to strengthen
our brand reputation and grow our customer
base. This is reflected in the sales growth
achieved across our omni-channel model
in the UK and internationally.
ONLINE GROWTH
Online sales is our strongest area of growth
driven by in-demand products and collections
and effective marketing. This has contributed
to the generation of increased online traffic
and improved conversion rates. We continue
to invest in our customer proposition to
continue to grow online sales.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
01
2019
H I G H L I G H T S
OPERATIONAL HIGHLIGHTS
• Online sales represented 31.4% of Group revenue
(2018: 26.3%)
• Active1 online customer base increased 56% to 576,000
(2018: 370,000)
• During the year, QUIZ opened three new standalone stores
and 25 new concessions, and closed two standalone stores
and one concession
• Continued investment in online propositions with launch
of QUIZ VIP delivery pass, partnership with Klarna and
investment in an Emarsys platform to improve payment
options and enhance customer personalisation
• Continued expansion of the range with successful
launches of QUIZMAN, Swimwear and Petite ranges
• Gross cost savings of £2–3 million targeted
in the medium term
Note: The basis of preparation of the consolidated financial statements for the
current and previous year is set out in the Financial Review on page 24.
1. An active customer is a customer registered on our database who has
transacted in the last twelve months.
2. Underlying EBITDA and profit before tax exclude: the costs of non-recurring
expenses relating to written off bad debt in relation to the House of Fraser
administration in the current year; and the costs of Admission to AIM and
the Group reorganisation undertaken prior to Admission in the prior year.
A reconciliation to reported IFRS results is included in the Financial and
Business Review on pages 24 to 27.
3. Underlying EPS: underlying PBT less tax at statutory rate divided by the
number of shares on a pro forma basis, i.e. assuming that the number of
shares in issue immediately post-IPO were in issue through the entire
comparative year.
4. Capital expenditure comprises spend on intangible assets and property,
plant and equipment.
5. International sales comprise the results from QUIZ standalone stores and
concessions in the Republic of Ireland, standalone stores in Spain and
franchises in 20 countries.
02
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
STRATEGIC REPORT FINANCIAL HIGHLIGHTS
GROUP REVENUE
£130.9m +12%
19
18
17
130.9
116.4
89.8
EBITDA
£4.2m -63%
4.2
19
18
17
PROFIT BEFORE TAX 2
£0.2m -97%
19 0.2
18
17
CAPITAL EXPENDITURE4
£6.1m -£0.2m
19
18
17
3.6
11.5
10.3
8.5
8.1
6.1
6.3
UNDERLYING EBITDA 2
£4.6m -63%
4.6
19
18
17
12.5
10.3
UNDERLYING PROFIT BEFORE TAX 2
£0.6m -94%
19
19 0.6
18
17
9.6
8.1
UNDERLYING BASIC EPS3
0.33p -95%
19 0.33
18
17
6.33
5.33
NET CASH/(BORROWINGS) AT YEAR END
£7.5m -18%
19
18
17 (2.0)
7.5
9.2
• Group revenue increased 12% year on year driven by strong growth across all channels:
• Online revenue increased 34% to £41.0 million (2018: £30.6 million)
• Underlying International sales5 increased 8% to £23.0 million (2018: £21.2 million)
• Revenue from UK Stores and concessions increased 4% to £66.9 million (2018: £64.6 million)
• Underlying EBITDA2 decreased 63% year on year to £4.6 million (2018: £12.5 million)
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
03
AT A GL A NC E
OMNI-CHANNEL
FAST FASHION
QUIZ is an omni-channel fast-fashion brand, specialising in occasion wear
and dressy casual wear. QUIZ delivers a distinct proposition that empowers
its fashion-forward customers to stand out from the crowd
QUIZ operates through an omni-channel, fast-fashion business model, which encompasses online
sales, standalone stores, concessions, international franchises and wholesale arrangements.
CORE STRENGTHS
B R AND
We have an established and distinctive brand proposition
enabling QUIZ to expand across product categories
and distribution channels.
SU PPLY CHAIN
Our infrastructure and “test and repeat” fast-fashion
supply chain are proven.
HE ALTHY ONLINE G ROW TH
Sales growth through QUIZ’s online channels remains very healthy
reflecting: increased awareness of our brand driven by effective
marketing; the strength of our products and collections; increased
online traffic; and improved online conversion rates.
INTE RNATIONAL POTE NTIAL
QUIZ continues to see positive reactions to the brand across
international markets. QUIZ’s mix of casual and occasion wear can
be tailored for each market and the Group’s flexible approach
to its route to market remains beneficial.
OUR BRAND
6
Read more
QUIZ’s buying and design teams constantly develop their own product lines, ensuring the latest glamorous looks
at value prices. This fast, flexible supply chain, together with the winning formula of style, quality, value and
speed to market has enabled QUIZ to grow rapidly into an international brand with more than 300 standalone
stores, concessions, franchise stores, wholesale partners and international online partners in 22 countries.
• We were founded in 1993 and now employ more than 1,600 people
• We have a very broad customer demographic; our customers are 16 to 35-year-old fashion-forward females
• We are a destination brand for fashion-conscious women looking to dress for some of the most memorable occasions of their lives
• Our fast-fashion supply chain means we can respond quickly to changing styles and trends
• We market the QUIZ brand creatively and have substantially increased our social media following as a result
• We have seen the brand establish itself in different markets with the core QUIZ offering being complemented by country-specific products
where appropriate
04
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
STRATEGIC REPORT OUR EXISTING GLOBAL PRESENCE
Our flexible business model allows us to adopt the most appropriate approach in each market.
UK
EUROPE
AMEA 1
USA
• 71 standalone stores
• 7 standalone stores in Ireland
• 125 points of sale through
• Wholesale to department stores
• 168 concessions
• Own website
• 5 online partners
• 20 concessions in Ireland
• 3 standalone stores in Spain
franchise stores and
wholesale partners
• Operate in 19 countries
• QUIZ country-specific website
launched 2018
FUTURE DEVELOPMENTS
• Expansion of current website through
new ranges and increased options
• Expansion in North American market
• Multi-channel expansion in new markets
17
Read more
1. Asia, Middle East and Africa.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
05
AT A GL A NC E CONTINUED
FAST
FAB RIC SOU RCING
AND SAMPLING
PROCE SS
Samples are transported by
air to the design and product
teams to increase efficiency
during the product
development phase, to allow
the design and product process
to be finalised promptly.
This process normally takes
between one and five days.
FASHION
PRODUC T
MANUFAC TURING
We work with 60 core
domestic and international
manufacturers to source
clothes, shoes and
accessories. It can take as
little as seven to ten days in
the UK and seven to 21 days
in the Far East to manufacture
the products.
CAT WALK INSPIR ATION
“TEST AND REPEAT” MODEL
STORE FE E DBACK
2
SUPPLY
1
ST YLE S AND TRE NDS
IDE NTIFIE D AND
DEVE LOPE D
In-house product buying and
merchandising teams work
closely together to monitor
emerging trends and identify
and develop new trends
inspired by the latest fashion
catwalks and changing
celebrity styles.
3
CHAIN
06
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
STRATEGIC REPORT RIG HT
PRODUC TS
RIG HT
TIME
RIG HT
PRICE
SOCIAL ME DIA FE E DBACK AND E NGAG E ME NT
4
5 6
TR ANSPORT PRODUC T
TO QU IZ
Transportation can take one
to two days from the UK, up
to five days from the Far East
by air and up to 21 days from
the Far East by sea.
DISTRIBUTION
CE NTRE ALLOCATE S
PRODUC TS TO
STORE S AND ONLINE
The DC has the capability of
being able to distribute items
to stores each day and fulfil
online orders, with delivery
times between one and
two days.
PRODUC TS AVAIL AB LE
FOR SALE IN STORE S
AND ONLINE FOR
NE X T DAY DE LIVE RY
New products and styles are
made available online and
delivered to store every day.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
07
CHAIRMAN’S
STATEMENT
INTRODUC TION
During the year, the UK retail sector continued to
be impacted by an accumulation of widely reported
macro-economic and structural factors. QUIZ has not
been immune to the exceptionally challenging retail
environment, which has had an impact on the Group’s
financial performance for the year.
Despite the trading challenges, QUIZ achieved sales
growth across each of the Group’s distribution channels:
Online, International, and Stores and concessions.
However, as previously reported in March 2019, this sales
growth was behind the Board’s initial expectations for the
year. As a result, there was a requirement to apply increased
discounts to clear excess stock, particularly during the
second half of the year, resulting in a greater proportion
of lower margin sales than previously anticipated. These
factors, coupled with the impact of investments made over
the past 18 months in our team and infrastructure to support
anticipated revenue growth as well as increased costs
associated with obtaining and servicing online customers,
resulted in a disappointing decline in full year profits.
FINANCIAL RE SU LTS AND DIVIDE ND
Group revenue of £130.9 million was 12% higher than
the previous year’s £116.4 million. However, a decline in
the gross margin generated in combination with increased
operating costs resulted in underlying Group profit before
tax of £0.6 million (2018: £9.6 million). Profit before tax
reflecting non-recurring costs was £0.2 million
(2018: £8.5 million).
The Group retains a solid balance sheet with cash less
borrowings at the year end amounting to £7.5 million
(2018: net cash of £9.2 million). Net cash flow before
dividend payments of £1.5 million and repayment of
borrowings of £0.3 million are essentially neutral.
Given the decline in profits in the current year and further
to the business review undertaken in recent months, the
Board considers that it is appropriate to suspend dividend
payments in order to restore profitability and support the
growth of the business. As a result, the Board does not
recommend the payment of a final dividend.
BUSINE SS REVIEW
The retail environment in the UK is continuing to experience
an unprecedented pace of change with a combination of
consumers continuing to spend more online and lower
high street footfall creating structural challenges for retailers
across the UK high street. At the same time, the UK consumer
has faced – and continues to face – extreme levels of
macro-economic and political uncertainty which is impacting
on consumer confidence.
As announced during March 2019, in light of the challenges
faced by the Group and the lower than previously anticipated
profit outcome for the year, the Board embarked upon a
review of all aspects of the business to ensure that QUIZ
remains well positioned to achieve its potential.
08
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
PETER COWGILL
NON - E XECUTIVE CHAIRMAN
As a Board and senior management team we have reflected
honestly on what has and has not worked well for the
business over the past twelve months; what changes we
need to make to ensure that we return to profitable growth;
and how to best position the Group for long-term success.
In the longer term the rapidly changing retail environment
requires the business to be flexible and to maximise sales
where profitable growth can be achieved. Our omni-channel
distribution model provides the necessary flexibility;
however, moving forward, this will have an even sharper
focus on capturing the significant online opportunities
available to QUIZ. This will be complemented by the
active management of stores, which have an average
lease length of 26 months, and concessions, which can
be exited at short notice.
The Board has agreed that, whilst the business, brand
and strategy remain fundamentally robust, some changes
need to be made to the way we operate.
In terms of restoring profitability actions have been
identified to eliminate, where practical, loss-making
activities and to target cost reductions across the business.
Short-term measures identified include:
• the termination of some third-party online contracts
which, whilst contributing to sales growth, negatively
impacted the profitability of the business;
• a reduction in our exposure to UK department stores;
• active management of the store estate as leases come
up for renewal;
• realigning the product offering to our core
customer demographic; and
• a greater focus on cost control with targeted cost
savings having been implemented or identified.
The Board continues to believe that the Group’s growth
strategy remains valid and relevant and our aim remains
to continue to develop sales and expand the QUIZ brand
across the Group’s omni-channel distribution model.
STRATEGIC REPORT With these changes, as well as a meticulous and
unwavering focus on operational execution, we are
confident that profitable growth will be restored.
OUTLOOK AND CU RRE NT TR ADING
We firmly believe that the QUIZ brand continues to have
strong customer appeal and that the Group’s omni-channel
business model remains relevant and key to our long-term
success. As a business, we are highly responsive to new
trends and our proven, fast supply chain remains a major
asset to ensure that QUIZ can succeed in a competitive
market and deliver sustainable growth.
The foremost priority for the Group is to restore
profitability. Going forward, a major focus will be on
stabilising the UK’s trading performance in what will
remain – during the foreseeable future at least –
a difficult and dynamic retail environment.
As has been widely reported, the trading conditions on
the UK high street have remained challenging since we
issued our trading update in March. In the two months
to 31 May, sales were consistent year on year. Excluding
sales from trading relationships that have terminated in
the year sales increased by 4%. Encouragingly, we have
continued to see online sales growing on our QUIZ
websites, albeit at more modest levels than experienced
in the previous year. In this period, the growth through
our Online and International businesses was offset by a
weaker performance through our UK Stores and concessions,
where we continue to see suppressed consumer spending.
The QUIZ brand has strong appeal, we have a clear customer
focus and our collections remain highly relevant for shoppers
today. This is evidenced by our increasing active customer
numbers and social media engagement. Underpinned by
these attributes, as well as the flexibility of our model and
the passion and dedication of our teams, we remain confident
that QUIZ can mitigate and manage the near-term challenges
and achieve its long-term potential as a leading
international fashion brand.
PETER COWGILL NON-EXECUTIVE CHAIRMAN
30 July 2019
We firmly believe that
the QUIZ brand continues
to have strong customer
appeal and that the
Group’s omni-channel
business model remains
relevant and key to our
long-term success
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
09
S TR ATE G I C R E P O RT
OUR CUSTOMERS
QUIZ is increasingly recognised by a broad
customer demographic as an international
fast-fashion brand that empowers fashion-
forward women and men looking for the
latest styles, footwear and accessories to
help them look their very best and stand
out from the crowd.
Understanding our customers, their lifestyles
and their product needs remains a core element
of our business. Our clear customer strategy
– coupled with our customer-first approach
to everything we do – continues to help
significantly increase awareness of the brand.
The QUIZ brand continues to have strong
customer appeal. This is evident in our
increasing number of active customers as
well as social media engagement. We are
highly responsive to what customers want,
and our flexible omni-channel business model
enables us to quickly respond to new trends.
Our customers know that with QUIZ they
can shop a wide selection of exclusive and
quality styles at value-for-money prices.
Research has shown us that our brand appeals
across a broad age range. This customer insight
continues to drive our marketing investment,
social media content and product design and
buying, including more targeted collections
such as our recent, successful partnership
with “Mummy Diaries” star Samantha Faiers.
A s seen on Instagram,
consumers wearing QUIZ
10
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
We are highly responsive to
what customers want, and
our flexible omni-channel
business model enables
us to quickly respond
to new trends
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
11
CHIEF EXECUTIVE’S
STRATEGIC REPORT
INTRODUC TION
Despite the challenges faced by the Group during the
year, QUIZ’s focus has remained as strong as ever on
delivering great products at outstanding value, thereby
strengthening our brand’s positive reputation amongst
a growing customer base. As a result, we have continued
to achieve sales growth across our omni-channel model
both in the UK and internationally.
24
Read more in our Financial and Business Review
Despite this, as described in the Chairman’s Statement,
the Group’s profit outcome for the year has fallen below
our expectations. As a result, since March, the Board and
senior management team have carefully reflected on our
business, strategy and prospects to ensure that we are
able to navigate what remains a volatile and dynamic UK
trading environment and restore profitable growth. We
have examined and analysed in detail QUIZ’s strengths
and unique attributes, the challenges we face, and the
areas where we need to adapt and improve to ensure
the brand continues to succeed and grow profitably.
ADDRE SSING FOU R
PRE SSING CHALLE NG E S
The business review process identified four pressing
challenges for the Group to manage and overcome:
A decline in footfall and spend in our UK
Store and concession estate
Volatile spending and suppressed consumer confidence
in combination with a rapidly growing proportion of
overall retail spend online have contributed to several
high-profile casualties on the UK high street, including
some of QUIZ’s trading partners. The performance of
QUIZ’s store estate has also been impacted by lower
customer footfall.
Whilst the QUIZ Board continues to believe that Stores
and concessions will play an important role in the Group’s
strategy moving forward, we have taken the strategic
decision to reduce exposure to UK department stores.
At 31 March 2019, the brand operated 168 concessions
across the UK. We anticipate this reducing by approximately
TARAK RAMZAN
CHIE F E XECUTIVE
20 in the year ahead. A number of these closures have
been executed and they will continue during the year.
Further to a decline in sales in the current year the
concessions which we have identified for closure are
generating little return or operating at a loss and can be
exited on providing the appropriate notice.
At the same time, the Group intends to actively manage
its portfolio of 73 stores as leases come up for renewal.
The average lease length across our estate is currently
26 months, with 33 stores’ leases due to expire over the
next 24 months. We are focused on ensuring returns can
be generated from each store and if rental costs are at a
level where this is at risk we will exit stores as their
leases expire.
In addition, with increasing online activity and omni-channel
investment we can further utilise our store network for
online collections, returns and improving stock availability
across the estate. The Group also intends to undertake
initiatives to promote footfall into stores including trialling
the introduction of new product categories in store.
12
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
STRATEGIC REPORT The decline in gross margin
As a result of lower than anticipated sales during the year,
the business undertook additional promotional activity in
order to clear stock, resulting in lower gross margins.
Improvements in this area will come through a
combination of improved sourcing, targeted price
increases and managing stock allocations and purchases
to reduce the amount of stock subject to markdowns.
Right-sizing our cost base
Since the Group’s IPO in July 2017, we have invested
meaningfully in our infrastructure and team to support
our anticipated growth. Our revenue has not grown
sufficiently to compensate for these increased costs and
operating costs as a proportion of revenue have increased
by 5.5% from 54.7% to 60.2% in the last twelve months.
This level of costs is too high and inhibits our return to
profitability. We have systematically reviewed costs and
have targeted reductions across the business.
Optimising the omni- channel model
Whilst our Online revenues have grown in the last year
the costs required to serve this customer base have come
under pressure. As the online market has increased the
costs associated with customer acquisition have risen. In
addition, the return rates from customers have gradually
increased over time creating additional handling and
delivery costs that need to be recovered.
In addressing the cost of customer acquisition, we
are introducing a number of actions to maximise the
value of our existing customer business. These include
the introduction of the QVIP delivery pass to improve
order frequency, the introduction of a buy now pay later
option to increase the average transaction value and
an increased focus on targeting and re-engaging
previous customers.
After testing different media formats last year, we are
now refining marketing activities to concentrate on those
with the highest return on investment.
We have identified various cost saving opportunities
which will reduce distribution costs as a proportion
of online sales in the year ahead.
Further to the initiatives regarding the right-sizing of our
cost base and the optimisation of the omni-channel model
the Board has targeted gross cost savings of between
£2–3 million in the medium term.
LEVE R AG ING OU R KEY STRE NGTHS
The business review process provided an important
opportunity to reflect on the Group’s unique attributes
that have made QUIZ the strong, international brand it
is today. These strengths underpin the Board’s strong
confidence in QUIZ’s ability to compete and succeed
in the dynamic retail environment.
We have a strong and growing brand
QUIZ is a distinctive fashion brand which, over many
years, has developed a specialisation in occasion wear
and dressy casual wear for women. QUIZ’s core business
continues to deliver a distinct proposition that empowers
fashion-forward females to stand out from the crowd.
We firmly believe that the QUIZ brand has a clear,
differentiated position in the market and continues
to resonate with a broad age range of customers.
Online active customers increased by 56% in the year
to 576,000, reflecting the appeal and growing awareness
of the brand. The brand’s social media engagement
continues to increase significantly from the prior year
with 44% and 18% increases in our Instagram and
Facebook audiences respectively.
The strengths of our brand continue to enable QUIZ
to expand into new product categories. At the end of the
financial year, we launched our first ever Swimwear range,
which has been received well by customers. In addition,
subsequent to the end of the financial year we have
launched our Petite range, which has received a positive
initial reaction.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
13
C H I E F E X EC U T I V E’ S ST R AT EGIC R E P ORT CONTINUED
PETITE
We launched our first ever petite range,
QUIZ Petite, in May 2019. The new range
features a 60-piece collection, spanning
occasion wear, holiday wear and casual wear,
and is available to shop online and in store.
We recognised a growing appetite for a
petite range and launched QUIZ Petite to
cater for fashion-forward females. QUIZ Petite
is designed for our petite QUIZ Queens who
are after the latest styles and trends. The new
range is carefully tailored by our in-house
design team to ensure our customers can
shop from collections that fit and flatter
their frames.
We are pleased with the initial reaction
and excited to add more casual staples
and catwalk inspired and glamorous pieces
to this growing range.
View more online
quizclothing.co.uk
14
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
STRATEGIC REPORT LEVE R AG ING OU R KEY
STRE NGTHS continued
Our fast and f lexible
supply chain remains a key
competitive advantage
The business has a well invested
infrastructure and a proven successful supply
chain. In an environment where customers
seek to quickly replicate the latest looks seen
on social media, the catwalk or television, our
supply chain’s ability to offer products for
sale in store and online in as little as two to
three weeks from the point of order is a key
strength for QUIZ.
QUIZ continues to introduce new products
each week as trends emerge throughout the
season. We have the ability to rapidly react to
customer demand as trends emerge in season
in order to give the customer more of what
they want. The Board believes this will be an
increasingly important ingredient for success
as customers have ever greater choice
of where, when and how to shop.
QUIZ ’s online sales continue to
experience ver y healthy grow th
Sales growth through QUIZ’s online channels
remains very healthy reflecting: increased
awareness of our brand driven by effective
marketing; the strength of our products and
collections; increased online traffic; and
improved online conversion rates. The continued
good growth in online sales – in particular
through QUIZ’s own websites – remains
central to the Board’s confidence in the
Group’s long-term growth prospects.
In 2019, online sales increased by 34% year
on year and now represent 31% of QUIZ’s
Group revenue (2018: 26%). This was
supported by very strong sales growth of
58% through QUIZ’s own online channels.
The brand continues to have
signif icant international potential
We continue to see a positive reaction to
the QUIZ brand across international markets.
Our mix of casual and occasion wear can be
tailored for each market and our flexible
approach as to our route to market has
been beneficial.
Whilst each of these markets has its own
challenges, we have grown revenue by 8%
in the last year and these sales represent 18%
of QUIZ’s Group revenue (2018: 18%).
We continue to identify opportunities to
extend our sales through low-risk, low-cost
international expansion.
We continue to be recognised
as an industr y leader
We were delighted to be named International
Fashion Retailer of the Year at the Drapers
Awards 2018. The judges awarded QUIZ the
accolade due to its successful international
financial performance, robust omni-channel
business model, clear international growth
strategy and understanding
of its markets, coupled with
a strong product offer that
clearly resonates with our
customers. During the year,
we were also shortlisted for
Fashion Retailer of the Year
at the Evening Express
Retailer Awards 2018,
International Growth
Retailer of the Year at the
Retail Week Awards 2019
and Fashion Retail Business
of the Year (£101 million to
£500 million turnover) and
Best Use of Influencer
Campaign at the Drapers
Awards 2018.
We continue to introduce new
products each week as trends
emerge throughout the season
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
15
C H I E F E X EC U T I V E’ S ST R AT EGIC R E P ORT CONTINUED
STR ATEGY TO DE LIVE R LONG -TE RM
PROFITAB LE G ROW TH
Business model
QUIZ distributes its brand through three main channels:
Stores and concessions; Online; and International (which
includes wholesale and franchise agreements). We operate
stores and concessions across the UK, Europe, North America
and Asia, and localised ecommerce sites in the UK, Spain
and the USA. We also have an ecommerce business with
some of our concession partners.
own product lines ensuring that the Company delivers
the latest glamorous looks at value-for-money prices. As a
result of this reactive model and the Company’s flexible
and fast supply chain, QUIZ is able to adapt quickly to
new trends and, on average, can have its products in its
stores and concessions and online within four weeks from
the point of order. Focusing on very short lead times, QUIZ’s
“test and repeat” supply chain is able to introduce new
products within weeks of identifying trends and promptly
reorder successful lines to meet customer demands.
QUIZ’s buying, design and merchandising teams work
closely together and routinely monitor emerging trends
each season. Together, they constantly develop QUIZ’s
The Group’s omni-channel growth strategy remains
focused on delivering progress across each of the
following three pillars.
F A S T FASHIO
N
B R AND
AND MARKETING
Broad target
audience
Unique glamorous
product range
“
T
E
ST AND R E P E
T ”
A
OMNI-CHANNEL
MEASURED ROUTES TO MARKET
ONLINE
INTE RNATIONAL
U K STORE S AND
CONCE SSIONS
THE RIGHT APPROACH
OU R INTEG RIT Y
We pride ourselves
on being a responsible
company whether in our
supplier relationships or
in our engagement
with employees and
the wider community.
OU R SYSTE MS AND
INFR ASTRUC TU RE
We can efficiently service
our customers and have
a solid platform for
substantial future growth.
OU R PEOPLE
With our experienced
employees and the
continual inflow of fresh
talent we can adapt to
changing trends and
demands across all our
routes to market.
OUR VALUE S
Our focus on giving
customers what they
want when they want
it at great value is
complemented by all
stakeholders in the process
being treated equitably.
16
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
STRATEGIC REPORT CONTINUED ONLINE EXPANSION
Accelerating growth in our online channel is the priority
for the Group. The Group’s areas of focus to achieve
further online growth include: launching further websites
in targeted international markets; and expanding the
brand’s online presence through carefully selected third
parties. In addition, the Group intends to continue to
extend the product offering online to drive sales growth,
with recent successful examples including the introduction
of a Petite collection and Swimwear range as well as
numerous celebrity collaborations throughout the year.
Sales through selected third-party websites remain an
important pillar for generating revenues and expanding
the awareness of the QUIZ brand. During the year,
we terminated arrangements with two of our third-party
website partners which, whilst contributing to sales growth,
were negatively impacting the business and our resources.
During the year, the Group introduced two new third-party
online partners in the United Kingdom which are sourcing
products from the Group on a wholesale basis.
During the year, we invested in a new CRM system which
uses artificial intelligence to drive better personalisation,
content and incentives to each customer which in turn
maximises conversions and margins.
Post-year end, we have launched our new exclusive delivery
pass, QVIP, which offers customers unlimited free delivery
and the option to collect online orders in store for a small
annual fee. We believe that this is an important step in our
journey to help better serve our customers and increase
customer engagement.
We have also launched a trial for the use of Klarna, a
“buy now, pay later” payment platform technology to
make it even easier for our customers to pay for goods.
ONLINE SALES AS
A % OF TURNOVER
31.4% +5.1%
ACTIVE CUSTOMERS
576,000 +56%
19
18
17
31.4
26.3
19
18
576,000
370,000
13.2
17 198,000
Definition
Definition
How we are diversifying our
revenues through growth
in online sales.
How we are growing the reach
of the QUIZ brand.
Performance
Online sales, which comprise
sales through QUIZ websites as
well as third-party sites, increased
by 34%. With growth in revenues
of 58% the QUIZ websites are
driving the expansion of the
QUIZ brand.
Performance
The broadening of the available
range of products and increased
marketing spend drove the increase
in active customers. This uplift
is reflected in the increased
revenues generated from
the QUIZ website.
We invested in a new CRM system to
drive better personalisation, content
and incentives to each customer
31%
ONLINE REVENUE
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
17
C H I E F E X EC U T I V E’ S ST R AT EGIC R E P ORT CONTINUED
INTERNATIONAL EXPANSION
We continue to review opportunities for further international growth by
expanding in existing markets as well as extending into new territories.
QUIZ’s international footprint currently extends across 125 locations in
22 countries on four continents. The Board believes that international
expansion continues to offer a significant opportunity for the QUIZ
brand with our omni-channel model allowing a flexible approach to
market entry dependent on the dynamics of that market.
Awareness of QUIZ internationally continued to strengthen during
FY 2019. This resulted in an 8% increase in International revenue to
£23.0 million (2018: £21.2 million), which represented 18% of Group
revenue (2018: 18%).
Our stores and concessions in Ireland and Spain performed in line with
expectations during the year with revenues increasing by £0.9 million.
Our performance in Spain has steadily strengthened during the year and
we will continue to assess QUIZ’s growth opportunities in the Spanish
market as we move forward. Sales in the USA increased during the year
and contributed to the £0.9 million uplift in franchise sales. We continue
to review the potential for QUIZ in the North American market.
The Board believes
that international
expansion continues
to offer a significant
opportunity for the
QUIZ brand
INTERNATIONAL
OUTLETS SERVICED
125 +47%
19
18
17
125
78
66
Definition
How we are extending the international
footprint of the QUIZ brand.
Performance
The increased points of sale in the year,
the majority of which were in the USA,
indicates the appeal of the QUIZ brand
in different markets.
18%
INTERNATIONAL REVENUE
18
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
STRATEGIC REPORT UK STORE AND CONCESSION GROWTH
During the year the Group opened three new standalone stores
and 25 new concessions, and average total retail square footage
increased by 9% to 210,000 sq. ft.
Whilst acknowledging the challenging and dynamic retail
environment in the UK, we continue to believe UK Stores
and concessions will continue to make a profitable
contribution for QUIZ going forward. Sales from UK
Stores and concessions were up 4% during the year,
demonstrating the quality of our store estate, the strength
of our product range and growing awareness and appeal of
the QUIZ brand.
During the year the Group opened three new standalone
stores and 25 new concessions. As part of the Group’s
active management of its retail portfolio, we closed two
standalone stores and one concession. Average total retail
square footage increased by 9% to 210,000 sq. ft. during
the year (2018: 193,000 sq. ft.).
51%
STORES AND CONCESSIONS REVENUE
Further to opening new stores in Romford and Arndale
subsequent to the year end, QUIZ currently operates
73 stores in the UK and the Board believes that there is
the potential for further stores in high footfall locations.
The Group will continue to prioritise the opening of stores
to accommodate a broader product range with every new
store being carefully evaluated against strict return on
investment criteria.
At the end of the financial year, QUIZ operated 168
concessions in the UK. As outlined earlier in this Strategic
Review, the Board has taken the strategic decision to
reduce exposure to UK department stores reflecting the
trading challenges faced by some of our trading partners.
We anticipate this reducing QUIZ’s concession presence
by approximately 20 concessions during the current year.
Post-period end, Debenhams, one of QUIZ’s concession
partners, named 22 of the 50 stores it has earmarked for
closure. QUIZ is present in ten of the affected stores.
The annual turnover from these concessions is less than
£2 million per annum. We note that these stores are
likely to be open for most, if not all, of the year ended
31 March 2020.
UK RETAIL SPACE –
SQUARE FOOTAGE
210,000
sq. ft. +9%
19
18
17
210,000
193,000
185,000
Definition
How we are developing
the UK retail estate.
Performance
We continue to apply our standard
return on investment criteria
for new stores of a two-year
payback and concessions of
a one-year payback.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
19
C H I E F E X EC U T I V E’ S ST R AT EGIC R E P ORT CONTINUED
quizclothing 4h
730,000
FAC E B O O K
L I K E S
+18%
ONE-YEAR GROWTH
quizclothing
2h
576,000
ACTIVE
CUSTOMERS
ONE-YEAR GROWTH
+56%
20
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
Looking ahead we will be
unwavering in our focus to
ensure all campaigns provide
return on investment and that
we are continually refreshing
our offering and brand relevance
STRATEGIC REPORT quizclothing
7h
4 8 0 , 0 0 0
I N S TA G R A M
F O L L O W E R S
O N E -Y E A R G R O W T H
+ 4 4 %
MARKETING INVE STME NT
Underpinning the growth and expansion of the QUIZ
brand is the Group’s approach to targeted and returns-driven
marketing investment. During the year, total marketing
investment increased by 83% to £4.6 million (2018:
£2.5 million) supporting growth in brand awareness.
This increase in investment was focused on digital and
social media marketing to generate new customers for all
sales channels, as well as increasing shopping frequencies
and basket sizes. Marketing investment as a proportion
of Group sales remained relatively modest at 3.6%.
During the year, QUIZ launched numerous targeted
marketing campaigns. We partnered twice with The Only
Way Is Essex (“TOWIE”) to create our first ever male and
female capsule collections in collaboration with TOWIE’s
very own Chloe Lewis, Lauren Pope and Dan Edgar.
The partnership saw a number of the cast wearing QUIZ
fashion pieces in scenes for broadcast along with outfits
promoted across the cast’s and show’s social channels.
In the summer, we launched a special honeymoon capsule
collection with Love Island’s soon-to-be newlyweds
Olivia Buckland and Alex Bowen.
These campaigns blend offline and online advertising
targeted towards our key customer demographics.
Looking ahead we will be unwavering in our focus
to ensure all campaigns provide return on investment
and that we are continually refreshing our offering
and brand relevance.
Post-year end, we launched our first collaboration
with TV star Samantha Faiers, which has yielded a
positive initial reaction. The 37-piece seasonal collection
channels Samantha’s glamorous style with a selection of
on-trend outfits that are fitting for any summer occasion.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
21
C H I E F E X EC U T I V E’ S ST R AT EGIC R E P ORT CONTINUED
22
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
STRATEGIC REPORT OMNI - CHANNE L DEVE LOPME NTS
Whilst our Stores and concessions generate the
highest revenue of our sales channels our QUIZ
website has been the fastest growing revenue
channel in the last year.
Consumers will continue to shop where is most
convenient for them and expect the same user
experience, products and service regardless of
which sales channel they engage with.
To achieve this, we will progressively move to
merge our sales channels to gain a single view
of all customer activity.
In the last year we have introduced a new CRM
system which allows us to better understand
our online customers and their preferences.
This combined with the use of e-receipts in
store will allow us to build an understanding
of our customers and how they shop across our
different sales channels. This information will
progressively allow for targeted communications
to frequent customers and help us to re-engage
with customers who have not shopped for a
period of time.
We have recently introduced our QVIP delivery
pass which provides unlimited next day deliveries
for a year for an annual subscription and a buy
now pay later option for customers. These
initiatives target an increased number of
purchases during the year along with an
increased transaction value.
Future initiatives include providing customers
the opportunity to return online purchases
to store and dispatching products from store
to fulfil online sales.
We will continue to develop our offering
to ensure customers have the same positive
experience of shopping with QUIZ regardless
of the sales channel.
QUIZ’s focus has
remained firmly on
delivering great products
at outstanding value,
which has continued to
strengthen our brand’s
positive reputation
amongst a growing
customer base
OU R TE AM
I would like to take this opportunity to
thank each of my colleagues, who have
worked extremely hard during what has
been a challenging year. They have retained
an unwavering focus on customers despite
the difficult trading environment and I am
very thankful for their outstanding
dedication, skill and passion.
TARAK RAMZAN CHIEF EXECUTIVE
30 July 2019
32
34
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ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
23
FINANCIAL
AND BUSINESS
REVIEW
GERARD SWEENEY
CHIE F FINANCIAL OFFICE R
BASIS OF PRE PAR ATION
To provide comparability across reporting years, the
results within this Financial Review are presented on an
“underlying” basis, adjusting for the £0.4 million bad debt
provision arising from the House of Fraser administration
and the £1.0 million cost of Admission to AIM and the
Group reorganisation prior to Admission (“non-underlying
costs”). A reconciliation between underlying and reported
results is provided at the end of this Financial Review.
G ROU P OVE RVIEW
Group revenue of £130.9 million was 12% higher than
the previous year’s £116.4 million.
Further to a decline in the gross margin generated
and increased operating costs, underlying operating
profits were restricted to £0.6 million (2018: £9.6 million).
Including the non-recurring costs, operating profits were
£0.2 million (2018: £8.6 million).
FINANCIAL KPIs
Underlying EBITDA generated declined by 63% to
£4.6 million (2018: £12.5 million) which represented
an EBITDA margin of 3.5% (2018: 10.7%). Including
the non-recurring costs, EBITDA was £4.2 million
(2018: £11.5 million).
Underlying Group profit before tax (“PBT”) was
£0.6 million (2018: £9.6 million). Profit before
tax reflecting non-recurring costs was £0.2 million
(2018: £8.5 million).
Further to this, the underlying earnings per share
declined 95% to 0.33 pence (2018: 6.33 pence).
Earnings per share reflecting non-underlying costs
was 0.09 pence (2018: 5.49 pence).
Cash less borrowings at the year end amounted to
£7.5 million (2018: net cash of £9.2 million). The most
significant cash flows in the year related to the £6.8 million
of operating cash flow generated in the year and £6.1 million
of capital expenditure incurred during the year.
ONLINE REVENUE
£41.0m +34%
INTERNATIONAL REVENUE
£23.0m +8%
UK STORES AND
CONCESSIONS REVENUE
£66.9m +4%
24
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
STRATEGIC REPORT The 34% growth in Online revenues to
£41.0 million was primarily driven by
strong growth on the QUIZ websites
REVENUE
£130.9m +12.4%
GROSS MARGIN
60.7% -2.3%
19
18
17
130.9
116.4
85.4
19
18
17
60.7
63.0
62.7
Definition
Online, UK Stores and concessions
and International revenue.
Definition
Maintaining overall product profitability whilst executing
the Group’s growth strategy.
Performance
Revenue growth was achieved in each area with
the strongest growth achieved in online sales.
Performance
Gross margin % declined further to a slow down in
demand in the second half of the year which resulted
in an increased level of discounting being applied.
ADJUSTED EBITDA %1
CASH FROM OPERATING ACTIVITIES2
3.5% -7.2%
3.5
19
18
17
£7.2m -20.9%
19
18
17
3.2
7.2
9.1
10.7
11.4
Definition
How we are controlling profitability and operating hosts
across the business.
Definition
The conversion of profits into cash available
to the business.
Performance
Increased operating costs were not supported by sufficient
growth in revenues which, along with the lower gross
margin, impacted EBITDA generated.
Performance
Cash from operating activities was broadly maintained
with an improved working capital position mitigating
the drop in profits generated.
1. Excludes the £0.4 million bad debt provision arising from the House of Fraser administration in the current year and the £1.0 million
cost of Admission to AIM and the Group reorganisation prior to Admission.
2. Excludes the items referred to in Note 1 and the prior year excludes the settlement of £1.3 million owed from related parties
subsequent to the IPO.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
25
F I NA NC I A L A N D BUSI N E S S R E V I E W CONTINUED
REVE NU E
Group revenue increased by 12% to £130.9 million from £116.4 million in 2018, with growth being recorded across all
three of our revenue channels, as shown below:
Online
International
UK Stores and concessions
Total
Online
The 34% growth in Online revenues to £41.0 million was
primarily driven by strong growth on the QUIZ websites,
which recorded a revenue increase of 58% in the year.
This growth reflects a 56% uplift in the number of active
customers at 31 March 2019 to 576,000 (2018: 370,000).
Our increased marketing activity in the year helped drive
website traffic up 43% year on year, primarily driven
by mobile.
Growth recorded through third-party websites was lower
than sales achieved through our own websites which is
partially reflective of our decision to exit two of the five
third-party websites we previously engaged with.
International
International sales include revenue from QUIZ standalone
stores and concessions in the Republic of Ireland, standalone
stores in Spain and franchises in 20 countries.
We have continued to see a positive response to the QUIZ
brand across different markets with revenues increasing
8% to £23.0 million (2018: £21.2 million). Of the £1.8 million
uplift in sales, £0.9 million was generated from our
international franchise partners and the balance reflects
increased revenues from our stores and concessions in
Ireland and Spain.
UK Stores and concessions
Sales in the Group’s UK standalone Stores and concessions
increased 4% to £66.9 million (2018: £64.6 million).
During the year three new stores were opened and
two stores were closed. In addition, 25 new concessions
were opened with one being closed. The majority of the
concessions opened were in Outfit stores and typically
generate lower revenues than our average concession
and are not staffed by QUIZ employees. Further to these
changes, total selling space across the stores and concessions
increased by 9% from 193,000 sq. ft. to 210,000 sq. ft.
over the year.
Sales growth in UK Stores and concessions was
driven by the additional sales space introduced in
the current and prior year which compensated for
the like-for-like performance.
G ROSS MARG IN
Gross margin at 60.7% was 2.3% lower than the prior
year. Whilst the decline was partially attributable to the
change in the revenue mix experienced during the year it
was primarily driven by the increased level of discounting
undertaken during the year.
We remain focused on efficient sourcing and product
selection to minimise the need for discounted prices
to improve the gross margin recorded.
Year to
31 March
2019
Year to
31 March Year-on-year
growth
2018
£41.0m
£30.6m
+34%
£23.0m
£21.2m
£66.9m
£64.6m
+8%
+4%
£130.9m £116.4m
+12%
Share of
revenue
2019
31.4%
17.5%
51.1%
Share of
revenue
2018
26.3%
18.2%
55.5%
U NDE RLYING OPE R ATING COSTS
Underlying operating costs increased by 24% in 2019
from £63.7 million to £78.8 million. These costs
represented 60.2% of revenue (2018: 54.7%).
Underlying administrative costs increased by 29%
to £54.8 million (2018: £42.4 million).
Total employment costs, including agency costs, have risen
by £4.2 million or 22% to £24.3 million (2018: £19.9 million)
which reflects the increased resource to service the
additional revenue as well as the continued investment in
our central functions to support future growth.
The increase in administrative costs also reflects the
increase in marketing spend in the year to £4.6 million
(2018: £2.5 million). This spend was focused on digital and
social media marketing to generate new customers for all
sales channels, as well as increasing shopping frequencies
and basket sizes. This is complemented by offline advertising
activity such as Tube and bus campaigns.
Distribution costs increased 13% to £24.1 million
(2018: £21.4 million). This increase reflects (i) the cost
of carriage to stores, concessions and franchises as well as
online customers and (ii) commission paid to third parties
which sell products on behalf of QUIZ. The uplift in these
costs primarily reflects higher carriage costs being incurred
to service the additional Online revenues.
Depreciation and amortisation increased by 39% from
£2.9 million to £4.0 million. This reflects the continued
investment in the business including spend in our
distribution centre in the current and previous year,
continued spend on IT and software and the continued
rollout of new stores. In addition, the charge reflects the
write-down of assets in concessions which have been
identified for closure in the current year.
NON - RECU RRING OPE R ATING COSTS
Non-recurring operating expenses totalled £0.4 million
(2018: £1.2 million). In the current year, the cost relates
to the bad debt provision arising from the administration
of House of Fraser. The prior year £1.0 million cost related
to that year’s IPO transaction and the Group restructuring
undertaken prior to it.
FINANCE COSTS
There are limited finance costs incurred by the Group.
Interest costs are largely limited to the costs relating to
the remaining term loans which were drawn down prior
to the IPO to fund capital projects.
26
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
STRATEGIC REPORT TA X ATION
The reported tax rate in the current year is 48.1% (2018:
20.2%). Given the small level of profitability recorded the
limited amount of expenses which are disallowable for tax
purposes has a larger impact on the effective rate recorded.
The Group’s effective tax rate in future years is expected
to be broadly in line with the statutory rate.
E ARNINGS PE R SHARE
Basic earnings per share for 2019 was 0.09 pence per
share (2018: 5.49 pence).
The underlying basic earnings per share for 2019, which
is calculated using the underlying profit before tax less
tax at the effective statutory rate, was 0.33 pence
(2018: 6.33 pence).
DIVIDE NDS
During the financial year a dividend of 0.8 pence per
share was paid in September 2018 and 0.4 pence per
share was paid in March 2019.
Given the decline in profits in the current year and further
to the business review undertaken in recent months the
Board considers that it is appropriate to suspend dividend
payments to preserve cash whilst it restores its profitability
and to support the growth of the business. As a result, the
Board does not recommend the payment of a final dividend.
CASH FLOW AND CASH POSITION
Net cash at the year end amounted to £7.5 million
(2018: net cash of £9.2 million).
Net cash flow from operating activities was £6.8 million
(2018: £9.4 million), a reduction of £2.6 million.
Whilst EBITDA generated in the year declined by
£7.9 million, working capital movements improved
by £4.4 million relative to the previous year.
Receivables increased by £2.8 million in the year. However,
this was offset by a £0.3 million reduction to inventory
and a £5.0 million increase in trade and other payables.
We have continued to invest in the business with
£1.2 million spent on intangible assets and £5.0 million on
property, plant and equipment. The increase in intangible
assets reflects additions to computer software as we invest
in our IT systems and websites. The spend on property,
plant and equipment includes £2.4 million on new stores
in the UK and £1.1 million on extending our distribution
facility. Investment in computer equipment of £0.5 million
was consistent with the prior year.
There were £0.3 million of borrowings repaid in 2019
(2018: £1.2 million). This reflects the repayment of term
loans previously drawn down to fund capital expenditure.
The continued strong cash position provides a solid base
to support our plans for future growth and to improve
the performance of the business.
RECONCILIATION OF U NDE RLYING AND RE PORTE D IFRS RE SU LTS
In establishing the underlying operating profit, the costs were adjusted to exclude the £0.4 million bad debt provision arising
from the administration of House of Fraser and, in the prior year, a £1.0 million cost related to that year’s IPO transaction and the
Group restructuring undertaken prior to it.
A reconciliation between underlying and reported results is provided below:
Revenue
Gross profit
Other operating costs
Operating profit
Finance costs (net)
Profit before tax
Operating profit
Depreciation and amortisation
EBITDA
Notes
4
6
11,12
Underlying
£000
130,898
79,400
(78,820)
580
5
585
580
4,012
4,592
GERARD SWEENEY CHIEF FINANCIAL OFFICER
30 July 2019
2019
Bad debt
£000
Reported
£000
Underlying
£000
2018
IPO costs
£000
Reported
£000
—
130,898
116,430
—
116,430
79,400
(79,189)
73,329
(63,720)
—
(369)
(369)
—
(369)
(369)
—
(369)
211
5
216
211
4,012
4,223
—
(1,037)
(1,037)
—
(1,037)
(1,037)
—
73,329
(64,757)
8,572
(23)
8,549
8,572
2,891
9,609
(23)
9,586
9,609
2,891
12,500
(1,037)
11,463
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
27
PRINCIPAL RISKS
AND UNCERTAINTIES
RISK MANAGEMENT PROCESS
In order to help manage the
Group’s risks and uncertainties, the
Board has delegated responsibility
for monitoring the effectiveness
of the Group’s systems of internal
control and risk management
to the Audit Committee.
In addition, the Group has established a Risk
Committee that includes the Chief Financial
Officer and other senior management. The Risk
Committee helps the Executive Board review
the risk management and control process in
each key business area on an ongoing basis
and provides a platform for management
to drive improvement across the business.
The Risk Committee considers:
• the identification, assessment and
management of significant risks faced
by the Group;
• the response to the significant risks which
have been identified by management
and others;
• the maintenance of a controlled environment
directed towards the proper management
of risk; and
• the annual reporting procedures.
An overview of the Group’s risk management
process is set out below:
PLC BOARD
AUDIT COMMITTEE
EXECUTIVE BOARD
Ultimately responsible for
risk management
Monitors the effectiveness of risk
management and internal controls
Oversees the risk management
process and monitors
mitigating actions
RISK COMMITTEE
RISK FR AMEWORK
WIDER BUSINESS
Reviews and challenges key risk,
associated controls and
management action plans
Ensures consistent approach across
the Group
Contributes to assessment of actual
and potential risks and how they
should be managed
On an annual basis the Board reviews the
principal risks and uncertainties facing the
Group and assesses the controls in place to
mitigate any potential adverse impacts. This
assessment is also undertaken whenever
there is a perceived major change in the
principal risks and uncertainties.
Accepting an appropriate level of risk is an
integral part of realising any opportunity and
reward, and it is only through effective internal
management and controls that risk can truly
form part of our decision-making process.
Failure to identify and appropriately manage
risk could prevent us from achieving our
day-to-day objectives. Risk management is
therefore critical to our day-to-day activities.
The following are considered to be the
principal risks and uncertainties. The Board
recognises that the nature and scope of risks
can change and that there may be other risks
to which the Group is exposed and so the list
is not intended to be exhaustive.
The Corporate Governance Report includes
an overview of our approach to risk
management and internal control systems
and processes.
28
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
STRATEGIC REPORT Risk and impact
Mitigation
Links to strategy
BRAND AND REPUTATIONAL RISK
The Group’s performance is influenced by the
image, perception and recognition of the QUIZ
brand. Failure to ensure that the brand continues to
be innovative, relevant and respected would impact
the business. Not only could our brand be undermined
or damaged by our actions but also by those of our
franchise partners or issues connected with
product sourcing.
DEVELOPMENT OF
OVERSEAS MARKETS
Failure to identify and maximise opportunities for
international growth either through our franchise
operations or ecommerce could have an adverse
impact. Failure to identify appropriate franchise
partners or failure to support these markets with
systems and supply chain capability could result
in not establishing the brand effectively in new
markets. The failure of a franchise partner could
impact the business through lost revenue and
the failure to recover balances owed.
FASHION AND DESIGN
As with all fashion brands there is a risk that our
offer will not satisfy the needs of our customers or
we fail to correctly identify trends. If new product
ranges or styles fail to meet sales expectations,
lower sales and market share could occur.
CHANGING ECONOMIC
ENVIRONMENT
Broad changes to consumer expenditure or a
deterioration in the economy could materially
and adversely affect the Group’s financial condition,
operations and business prospects. In the UK, where
the majority of the Group’s revenues are generated,
the expected exit from the EU has increased the
likelihood and potential impact of this risk.
LINKS TO STRATEGY
We carefully monitor the brand and its reputation with
feedback closely monitored, with particular reference
made to feedback provided through social media
channels. New partners are carefully vetted prior
to engaging with the business and our contractual
arrangements help protect the brand’s reputation.
We perform extensive due diligence on all potential
partners and territories to assess our appropriate
routes to market. We are progressively operating in a
range of international markets, which helps to mitigate
over-reliance on and exposure to any one territory.
Our team of experienced buyers, merchandisers
and designers allows for products to be tailored for
each market as appropriate. Zonal pricing is adopted
which allows the business to be competitive in each
key market according to its circumstances. The credit
risk associated with franchise partners is addressed
through the provision of Standby Letters of Credit
or the application of appropriate credit terms.
The QUIZ business model is based upon being
reactive to customer demand with a “test and repeat”
supply model that is able to introduce new products
within weeks of identifying trends and reorder
successful lines quickly. We have an experienced team
of buyers, merchandisers and designers which closely
follows changes in the market, consumer trends and
fashion to ensure that we remain able to respond
to changes in consumer preference. We have also
invested in modern systems which provide detailed
information on how consumers are responding to
products which allows us to react accordingly.
In the short term the brand’s focus on providing a
quality and value-for-money product ensures QUIZ
appears as a viable option in the event of reduced
overall expenditure. In the longer term the flexible
business model, such as stores having short lease
terms, provides the ability to direct resources to
where is most relevant for the QUIZ customer.
ONLINE
17
Read more
INTERNATIONAL
18
Read more
UK STORES AND CONCESSIONS
19
Read more
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
29
PR I NC I PA L R I SK S A N D U NC E RTA I N T I E S CONTINUED
Risk and impact
Mitigation
Links to strategy
BREXIT RISK
The anticipated exit of the UK from the EU in
October 2019 adds complexity and uncertainty
across many areas of the Group’s operations that
could impact on our ability to get products to
customers in a timely manner and on product
profit margins.
PRODUCT SOURCING
We source product from a wide range of suppliers
including a significant proportion from overseas.
Failure to carry out sufficient due diligence on
our suppliers, and to act in the event of any
negative findings, especially in relation to ethical
or quality-related issues, could adversely impact
our brand and reputation.
LOSS OF KEY TRADING PARTNER
There is a high dependency on a small number of
third-party partners in relation to online, franchise
and concession revenues. The loss of one of these
partners would impact upon the business.
The Executive Directors along with appropriate
senior management, together with external advisers,
continue to carefully monitor the potential impact
of Brexit.
Options to mitigate potential supply chain disruption
and adverse duty impacts have been considered
and will be adapted dependent upon the nature
and timing of the post Brexit arrangements.
It should be noted that, at this stage, the lack of
clarity with regards to these arrangements makes it
challenging to plan mitigation strategies effectively.
The Group has a policy and process for undertaking due
diligence on existing and new suppliers. This includes
a review of compliance with laws and regulations and
that suppliers meet generally accepted standards of
good practice. In addition, suppliers are required to sign
up to the QUIZ code of conduct. This process includes
steps to ensure transparency of where products
are produced and under what conditions.
Ethical audits are undertaken across the product
supply base supported by a third-party agency. The
wide range of suppliers reduces any dependency on
any one producer, minimising the impact of any need
to terminate arrangements.
Trading relationships with all our partners are monitored
on a regular basis to ensure they are profitable for
both parties. If relationships are unprofitable they
are terminated. We have regular contact with our key
partners to ensure our relationships continue to evolve.
The continued growth and diversification of the business
reduces the existing dependency and allows for new
partners to be identified. Credit risk is managed through
the use of a Standby Letter of Credit for a number
of international customers.
PHYSICAL INFRASTRUCTURE
Damage to or the loss of our distribution facility
could have a material impact upon the business
and its ability to effectively service our customers.
A similar event at the head office could impact the
ability of the business to operate effectively.
Preventative measures are taken to minimise
the risk associated with damage to or the loss
of our distribution facility or head office. Business
continuity of the head office functions would be
preserved through working from an alternative
facility. In addition, the Group maintains insurance
cover at an appropriate level to protect against the
impact of such an interruption.
LINKS TO STRATEGY
ONLINE
17
Read more
INTERNATIONAL
18
Read more
UK STORES AND CONCESSIONS
19
Read more
30
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
STRATEGIC REPORT Risk and impact
Mitigation
Links to strategy
IT INFRASTRUCTURE
AND CYBER SECURITY
The Group’s IT infrastructure is key to the operation
of its business. Non-availability of the Group’s IT
systems, including the website, for a prolonged
period or malicious attacks, data breaches or viruses
could result in business disruption, loss of sales and
reputational damage.
Arrangements are in place with regards to
key systems to allow for issues to be promptly
addressed. For prolonged issues disaster recovery
procedures minimise the risk of lost information.
Access to systems is restricted to minimise the
possibility of malicious attacks, data breaches or
viruses. A regular assessment of vulnerability to
malicious attacks is performed and any weaknesses
rectified. The storage of personal data is tightly
controlled in line with data protection guidelines
and PCI requirements and to ensure compliance with
GDPR. Employees are made aware of the Group’s
IT security policies and we deploy a suite of tools
to protect against such events.
INFRASTRUCTURE FOR
ECOMMERCE SALES
The business has rapidly grown its online sales
and this is a key pillar for future growth. Failure
to continue to develop personnel, systems and the
product offering in this area could impact upon
the existing business and the potential for growth.
The team associated with ecommerce sales has
grown with the increase in sales and we regularly
identify what resource will be required to facilitate
future growth. A budget is allocated to provide for
capital investment in software and other initiatives
to ensure the infrastructure supports future growth.
PEOPLE
Our success to date has been linked to the
performance of our people, particularly in relation
to key individuals. The failure to develop the
capability and capacity of our people would impact
upon the future development of the business.
We look to ensure that key individuals are
retained through long-term incentive schemes
and by providing competitive remuneration.
We have developed each team within the business
by appropriate recruitment and by looking to provide
a structure that allows for future development.
LOSS OF KEY STAFF
The existing management team has contributed
significantly to our growth and performance.
The loss of a key individual could have a detrimental
effect on our business.
The existing shareholdings of a number of the key
management provide a clear incentive to contribute
to the long-term development of the business. Other
members of the management team are attracted
and retained through share-based awards and
performance-related pay. In addition, a team-based
approach is adopted across the business which
reduces dependence and contributes to
succession planning.
REGULATORY AND
LEGAL FRAMEWORK
We operate in a range of international markets and
must comply with various regulatory requirements.
Failure to do so could lead to financial penalties
and/or reputational damage.
The Group closely monitors changes in the legal
and regulatory framework within the markets in
which it operates. We work closely with advisers
in each market to ensure compliance with local
laws and regulations.
FOREIGN EXCHANGE
The Group is exposed to fluctuations
in the exchange rates of key currencies.
The Group has adopted a hedging policy
to mitigate short-term foreign exchange risk.
We currently seek to hedge a material proportion
of forecasted currency requirements ahead through
the use of forward contracts.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
31
SOCIAL
RESPONSIBILITY
At QUIZ, we pride ourselves on acting as a
responsible company in everything that we do.
Our social responsibilities are focused on two key
strands: our supply chain and partnering with our
suppliers to create distinctive products made with
care, consideration and respect; and creating and
nurturing an exciting environment for both our
employees and the local communities in which
we reside.
We call these strands Fast Fashion with Integrity
and Our QUIZ Community.
32
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
Building long-term relationships with our suppliers has
created a sustainable supply for our fast-fashion model
to grow. We work with our suppliers to ensure that
our expectations with regards to ethical compliance
are reflected throughout the global supply chain.
FAST FASHION WITH INTEG RIT Y
As a fast-growing brand, we are aware of the sensitivities
of sourcing responsibly and the challenges posed by having
a global supply chain focused on fast fashion. Our customers
expect the latest looks from us, but with this comes a duty
to ensure our products are sourced and manufactured
responsibly. The responsibility for meeting these expectations
is led from the Board and is integral to our core values
and permeates all departments.
As a business, we are committed to providing good
quality products to our customers and a vital part of
this commitment relies on our suppliers ensuring that all
goods are produced in a safe working environment where
workers’ rights are respected. We expect our suppliers
to sign the QUIZ Ethical Code of Practice, which adheres
to the core principles of the Ethical Trading Initiative
Base Code, which sets worldwide standards on labour
practices, to protect our own workers as well as those
throughout our supply chain.
QUIZ suppliers must comply with this practice to ensure
their workforces, working conditions, management and
production processes are not just legally compliant but
are also fair, responsible and sustainable.
We have worked with many of our suppliers for a number
of years, developing long-lasting relationships which are
based on mutual trust and expertise. These relationships
allow for a joint commitment to becoming fully transparent
and accountable to enable change where necessary.
Much of our product is sourced from China, with
a significant percentage manufactured in the UK.
We understand that supply chain and ethical compliance
transparency is a challenging area and are committed to
continuously driving improvements through non-compliance
remediation, factory visits and supporting suppliers in
their ethical evolution.
Our public statement with regards to the Modern Slavery
Act, detailing our progress and commitment, is available
at www.quizgroup.co.uk.
STRATEGIC REPORT OU R QU IZ COMM U NIT Y
The talent, creativity and passion of our people are at
the heart of the QUIZ culture. Everything we do is with
the customer in mind. Our customer-first mentality is
embedded at our head office, in our stores and concessions,
and throughout the markets where our teams operate.
The value we place in our people is shown in the way
we motivate them. We encourage new learnings and
development as well as reward their valuable contribution.
We encourage new talent and cultivate creative ideas
and, as a team, we are always looking to push boundaries
and explore opportunities. Many of our employees have
been with QUIZ for much of their working years and, as
the QUIZ community grows and we welcome new talent
and new ways of doing things, this team-based approach
will always remain at our core.
We care about the local communities in which we work
and make sure we positively contribute to those local
communities in which we reside. Our dedicated teams,
at head offices and across our stores, hold numerous
fundraising events throughout the year and sample sales
on behalf of local charities and donate stock to The Sun
newspaper for its charity pop-up shops. In addition, in the
last year our employees have chosen Coppafeel!, which
is focused on surviving breast cancer, as their designated
charity. The business is supporting its fundraising
activities and increasing awareness of this organisation.
We are committed to ensuring that all our team members,
regardless of gender, receive the same support and
opportunities to progress, develop and enjoy a rewarding
career with us. Our latest gender pay gap information
(gender pay gap is the difference between our male
and female mean and median salaries across the whole
organisation) reported a 7.6% median pay gap, which is
lower than the 18.4% difference reported in the previous
year and below the UK national average of 18.4%.
The fact that a gender pay gap exists at QUIZ is, we
believe, due to the structure of our business rather than
any inequality in how we pay men and women for doing
the same role. We continue to look at ways that we can
evolve and improve these results.
As a responsible business,
we encourage diversity in the
workplace and we are committed
to treating everyone fairly and
ensuring that everyone – no
matter what their background,
race, ethnicity, gender or disability
– has the same opportunities to
progress, develop and enjoy a
rewarding career. If an employee
were to become disabled whilst
in employment and as a result
was unable to perform his or her
duties, every effort would be
made to offer suitable alternative
employment and assistance with
retraining. We continue to support
the development of all our
colleagues – in particular our
talented female colleagues into leadership roles. We will
continue to support all colleagues to ensure they have a
long and rewarding career with us.
We encourage new talent
and cultivate creative ideas
and, as a team, we are always
looking to push boundaries
and explore opportunities
The Strategic Report relates to the content
on pages 2 to 33.
TARAK RAMZAN CHIEF EXECUTIVE
30 July 2019
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
33
BOARD OF
DIRECTORS
A
N
R
PETER
COWGILL
INDE PE NDE NT
NON - E XECUTIVE
CHAIRMAN
TARAK
RAMZAN
CHIE F
E XECUTIVE
GERARD
SWEENEY
CHIE F
FINANCIAL
OFFICE R
Peter was appointed Executive Chairman
of JD Sports Fashion Plc in March 2004,
prior to which he was Finance Director.
Peter has been instrumental in driving the
strong performance of JD Sports Fashion
over the past decade. Peter is also the
Non-Executive Chairman of United Carpets
Plc and was appointed as a Non-Executive
Chairman of Roxor Group Limited on
3 December 2018.
Tarak opened his first QUIZ retail store in
Glasgow in 1993. After inheriting his father’s
manufacturing business aged 18, Tarak made
the decision to move into retail once UK
manufacturers began to move offshore.
With his passion for retail and a keen eye
for fashion and product, he has steered the
Company to success using a strategy that
is centred around QUIZ’s distinctive selling
proposition and ability to stay ahead of the
competition. Tarak has developed QUIZ’s
fast-fashion business model over the years
and is responsible for brand strategy,
buying and merchandising.
Gerard joined QUIZ in September 2016 as
Chief Financial Officer. He was previously the
Group Finance Director at Robert Wiseman
Dairies PLC, where he worked for 15 years.
Gerard is responsible for the finance function,
the development of systems and reporting to
support the continued growth of the business.
After completing an Accountancy degree
he qualified as a chartered accountant when
working with Arthur Andersen. Gerard is
also the Company Secretary.
34
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
CORPORATE GOVERNANCE SHERAZ
RAMZAN
CHIE F
COMME RCIAL
OFFICE R
N
R
A
N
R
CHARLOTTE
O'SULLIVAN
INDE PE NDE NT
NON - E XECUTIVE
DIREC TOR
ROGER
MATHER
INDE PE NDE NT
NON - E XECUTIVE
DIREC TOR
Sheraz joined QUIZ in 2003 after completing
a degree in Engineering and then a Master’s
in Business Management. Initially tasked
with raising the profile of the non-clothing
merchandise part of the business, he developed
a fast and flexible Far East supply chain,
supporting growth of the footwear and
accessories ranges. In his current role, Sheraz
is responsible for strategic planning, brand
marketing and facilitating Company growth
by engaging with new partners and territories.
He plays a role in overseeing the development
of the QUIZ domestic and international
online operations.
Charlotte has over 15 years’ experience in
luxury marketing and leading omni-channel
business transformation. She is currently the
Marketing and Digital Director at Mulberry
Group plc, where she is an executive board
member and is responsible for driving an
integrated, customer-centric business strategy
across the marketing, press and digital teams.
Charlotte previously held ecommerce and
marketing roles with decoration specialist
St Nicolas and luxury lingerie brand Myla,
before joining Mulberry in 2007. Charlotte
chairs the Nomination Committee of QUIZ.
Roger joined the QUIZ Board in May 2017.
Previously, he was the Group Finance Director
and a board member of Mulberry Group plc
for eight years, stepping down in May 2016.
Roger is a Fellow of the Institute of Chartered
Accountants in England and Wales having
trained professionally with Price Waterhouse.
He spent the previous ten years in senior
finance and commercial roles within the
multinational Otto Group based in both
Hong Kong and the United Kingdom.
Roger chairs the Audit Committee and
the Remuneration Committee of QUIZ.
A
N
R
Audit Committee
Nomination Committee
Remuneration Committee
Committee Chairman
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
35
PETER COWGILL
INDE PE NDE NT
NON - E XECUTIVE CHAIRMAN
GOVERNANCE
FRAMEWORK
I have pleasure in introducing the QUIZ plc
Corporate Governance Statement. The Board
is committed to supporting high standards
of corporate governance. In this section of
the Annual Report we set out our governance
framework and describe the work we have
done to ensure good corporate governance
throughout QUIZ plc and its subsidiaries.
BOARD GOVE RNANCE
The Company is listed on the Alternative Investment
Market of the London Stock Exchange. In the current year
the Company has adopted the Quoted Companies Alliance
Corporate Governance Code (“QCA Code”). The Directors
support the principles contained in these requirements and
apply these where they consider they are appropriate for
a company of QUIZ plc’s size and nature. The Directors
are committed to continuing to maintain high standards
of corporate governance.
Further details are set out on the Group’s Investor Relations
website at www.quizgroup.co.uk/governance.
THE BOARD OF DIREC TORS
The Board comprises three Executive Directors and three
Non-Executive Directors reflecting a blend of different
experience and backgrounds. Each of the Non-Executive
Directors are considered “independent”. Further details
regarding the Directors are set out on pages 34 and 35.
The experience and knowledge of each of the Directors
give them the ability to constructively challenge strategy
and to scrutinise performance.
ROLE OF THE BOARD
The Board is collectively responsible for the long-term
success of the Group. It provides entrepreneurial leadership,
sets Group strategy, upholds the Group’s culture and values,
reviews management performance and ensures that the
Group’s obligations to shareholders are understood
and met.
36
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
CORPORATE GOVERNANCE HOW THE BOARD OPE R ATE S
The Executive Directors are responsible for business
operations and for ensuring that the necessary financial
and human resources are in place to carry out the Group’s
strategic aims. The Non-Executive Directors’ role is to
provide an independent view of the Group’s business,
to constructively challenge management and to help
develop proposals on strategy. The Board as a whole
reviews all strategic issues and key strategic decisions
on a regular basis.
All Directors take decisions objectively in the interests
of the Group.
The Chairman, aided by the Company Secretary, takes
responsibility for ensuring that the Directors receive
accurate, timely and clear information.
Directors are aware of their right to have any concerns
recorded in the Board minutes.
MAT TE RS RE SE RVE D FOR THE BOARD
The Board has a formal schedule of matters reserved to
it for decision, including the approval of annual operating
and capital expenditure plans and the review of performance
against these plans and the Group’s strategy and objectives,
treasury and risk management policies.
BOARD ME ETINGS
The Board has met five times in the year. For all Board
meetings an agenda is established and a Board pack
is circulated at least 48 hours ahead of the meeting.
As a minimum, the items covered include the evaluation
of financial performance; the monitoring of performance
against key budgetary targets; updates on governance,
finance, legal and risk matters; health and safety; and
proposals for any major items of capital expenditure.
The Board receives reports from the Executive Directors
to enable it to be informed of and supervise the matters
within its remit. The Board considers at least annually
the Group’s strategic plan.
Where issues arise at Board meetings, the Chairman ensures
that all Directors are properly briefed and, when necessary,
appropriate further enquiries are made.
BOARD COMMIT TE E S
The Board has three separate Board Committees: Audit,
Remuneration and Nomination.
Each Committee has written terms of reference setting
out its duties, authority and reporting responsibilities, with
copies available on request from the Company Secretary.
The terms of reference of each Committee are kept under
review to ensure they remain appropriate and reflect any
changes in legislation, regulation or best practice. The
Company Secretary is the secretary of each Committee.
A report from each Committee follows this commentary
regarding the governance framework.
AT TE NDANCE AT BOARD
AND COMMIT TE E ME ETINGS
The table below shows the attendance of individual
Directors at Board and Committee meetings of which
they were members during the year.
TIME COMMITME NTS
The Board is satisfied that the Chairman and each of the
Non-Executive and Executive Directors continue to be
able to devote sufficient time to the Company’s business.
Board
Audit
Committee
Remuneration
Committee
Nomination
Committee
Eligible
to attend
Attended
to attend Attended
to attend Attended
to attend Attended
Eligible
Eligible
Eligible
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
Peter Cowgill
Tarak Ramzan
Sheraz Ramzan
Gerard Sweeney
Charlotte O’Sullivan
Roger Mather
As at 11 June 2019, the Board and the Remuneration and Nomination Committees have met once since the end of the
financial year. The Audit Committee has met twice this year. All applicable Directors attended these meetings other
than the initial Audit Committee meeting, which was not attended by Peter Cowgill.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
37
G OV E R NA NC E F R A M E WOR K CONTINUED
EVALUATION
The Chairman conducts an annual internal evaluation
of the Board (including sub-committees and individual
Board members). This involves anonymous questionnaires
formulated to enable the Board to confirm that its
performance, as well as the contribution of each of the
Executive and Non-Executive Directors, demonstrate
commitment to their respective roles and that the Board
members’ respective skills complement each other and
enhance the overall operation of the Board. The results
of this evaluation are confirmed to the Board and its
Committees to advise whether they are operating
to the satisfaction of the Chairman and achieving
their objectives.
The review conducted in the current year supported
the current structure, the skills available and the overall
operation of the Board.
DEVE LOPME NT
The Company Secretary ensures all Directors are kept abreast
of changes in relevant legislations and regulations, with the
assistance of the Group’s advisers where appropriate.
year end. The Board considers that the internal controls
in place are appropriate for the size, complexity and risk
profile of the Group. The principal elements of the
Group’s internal control system include:
• the day-to-day management of the activities
of the Group by the Executive Directors;
• a detailed annual budget is prepared including an
integrated profit and loss account, balance sheet and cash
flow statement. The budget is approved by the Board;
• monthly reporting of performance against the budget
is prepared and reviewed by the Board;
• a schedule of delegated authority is maintained which
defines levels of approval authority over such items
as capital expenditure, commercial contracts, litigation
and treasury matters; and
• the maintenance of a risk register which is reviewed
at least annually by the Board.
The Group continues to review its system of internal
control to ensure compliance with best practice, whilst
also having regard to its size and the resources available.
E X TE RNAL APPOINTME NTS
In the appropriate circumstances, the Board may
authorise Executive Directors to take non-executive
positions in other companies and organisations provided
the time commitment does not conflict with the Director’s
duties to the Company. The appointment to such
positions is subject to Board approval.
RE L ATIONS WITH SHARE HOLDE RS
The Group maintains communication with institutional
shareholders through individual meetings with Executive
Directors, particularly following publication of the Group’s
interim and full year preliminary results. The Board is
informed of shareholder views as part of the regular
reporting process and matters for discussion.
CONFLIC TS OF INTE RE ST
At each meeting the Board considers Directors’ conflicts of
interest. The Company’s Articles of Association (“Articles”)
provide for the Board to authorise any actual or potential
conflicts of interest.
INDE PE NDE NT PROFE SSIONAL ADVICE
Directors have access to independent professional advice
at the Company’s expense. In addition, they have access
to the advice and services of the Company Secretary,
who is responsible for advice on corporate governance
matters to the Board.
The annual general meeting is an important opportunity
for communication with both institutional and private
shareholders and also involves a short statement on the
Company’s latest trading position. Shareholders may ask
questions of the full Board, including the Chairs of the
Audit, Remuneration and Nomination Committees. The
result of the proxy votes submitted by shareholders in
respect of each resolution will be available on the Company’s
website or on request to the Company Secretary.
General information about the Group is also available on
the Group’s website: www.quizgroup.co.uk. This includes
an overview of activities of the Group and details of all
recent Group announcements.
DIREC TORS’ AND OFFICE RS’
LIABILIT Y INSU R ANCE
The Company has purchased directors’ and officers’
liability insurance during the year as allowed by the
Company’s Articles.
ANNUAL G E NE R AL ME ETING (“AG M ”)
The Company’s AGM will take place on 27 September
2018. The Annual Report and Accounts and Notice of the
AGM will be sent to shareholders at least 20 working days
prior to this date.
RISK MANAG E ME NT AND
INTE RNAL CONTROL S
The Board has ultimate responsibility for the
Group’s system of internal control and for reviewing
its effectiveness. However, any such system of internal
control can provide only reasonable, but not absolute,
assurance against material misstatement or loss.
The Board confirms that there are ongoing procedures
for identifying, evaluating and managing significant risks
faced by the Group and that it has reviewed these risks
and the procedures with management before the financial
AU DITORS’ INDE PE NDE NCE
The Audit Committee reports to the Board on the
effectiveness, value and independence of the auditors
on an annual basis. The Audit Committee also approves
the extent of non-audit work undertaken by the auditors
to ensure that it does not interfere with their independence
and has established guidelines for the value of non-audit
services permitted to be undertaken by the auditors. The
Board is satisfied with the independence and objectivity
of the auditors, RSM UK Audit LLP, and is recommending
their re-appointment at the AGM.
38
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
CORPORATE GOVERNANCE AUDIT COMMITTEE REPORT
CHAIRMAN
ROGER
MATHER
OTHE R ME MB E RS
PETER COWGILL
On behalf of the Board, I am pleased to present the Audit
Committee Report for the year ended 31 March 2019.
The Committee’s responsibilities include monitoring
the Group’s compliance with corporate governance and
financial reporting requirements. It reviews the output
of external audits, internal reports on risk management
and internal control systems as well as the content of the
Group’s annual financial statements. It is responsible for
monitoring the extent of non-audit services and advising
on the appointment of external auditors.
In addition, the Committee reviews the effectiveness of the
Group’s internal controls and risk management systems and
reports on these to the Board. The ultimate responsibility
for reviewing and approving the Annual Report and Accounts
and the half-yearly reports remains with the Board.
ME MB E RS OF THE AU DIT COMMIT TE E
The Audit Committee comprises two Non-Executive
Directors: me, as Chair of the Committee, and Peter Cowgill.
The external auditors (RSM UK Audit LLP), Chief
Executive Officer and Chief Financial Officer also attend
Committee meetings by invitation. The Committee has
met three times since 5 June 2018, being the date the
Group’s last Annual Report was approved.
The Board is satisfied that I, as Chairman of the Committee,
have recent and relevant financial experience. I am a
chartered accountant and was formerly Group Finance
Director at Mulberry Group plc.
The Committee has maintained dialogue with the auditors
outside of the scheduled meetings and meets with the
auditors without the presence of the Executive Directors
and members of the finance team.
DUTIE S
The duties of the Audit Committee are set out in its
terms of reference, which are available on request
from the Company Secretary.
Matters considered at these meetings included:
• reviewing and approving the Annual Report and Financial
Statements for the year ended 31 March 2019;
• discussion with the external auditors to confirm
their independence and scope for audit work;
• considering the reports from external auditors
identifying any accounting or judgemental issues
requiring the Board’s attention; and
• the auditors’ assessment of internal controls
and reviewing the Company’s risk.
The Committee meets a minimum of twice per year.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
39
AU DI T COM M I T T E E R E P ORT CONTINUED
WHISTLE B LOWING
The Group has in place a whistleblowing policy which
sets out the formal process by which an employee of the
Group may, in confidence, raise concerns about possible
improprieties in financial reporting or other matters. During
the period, there were no incidents for consideration.
GOING CONCE RN
The Directors have prepared a detailed financial
forecast with a supporting business plan covering the
medium-term future. The forecast indicates that the
Company and the Group have adequate resources to
continue in operational existence for the foreseeable
future. For this reason, they continue to adopt the
going concern basis in preparing financial statements.
ROGER MATHER AUDIT COMMITTEE CHAIRMAN
30 July 2019
ROLE OF THE E X TE RNAL AU DITORS
The Audit Committee reports to the Board on the
effectiveness, value and independence of the auditors
on an annual basis. The Audit Committee also approves
the extent of non-audit work undertaken by the auditors
to ensure that it does not interfere with their independence
and has established guidelines for the value of non-audit
services permitted to be undertaken by the auditors.
AU DIT PROCE SS
The external auditors prepare an audit plan that
sets out the scope of the audit, key areas of audit focus,
audit materiality and the audit timetable for audit work.
This plan is reviewed and agreed in advance by the Audit
Committee. Following the completion of its work, the
external auditors present their findings to the Audit
Committee for discussion.
INTE RNAL AU DIT
At present the Group does not have an internal audit
function. In view of the size and nature of the Group’s
business, the Committee believes that management
is able to derive assurance as to the adequacy and
effectiveness of internal controls and risk management
procedures without a formal internal audit function.
This will be kept under review as the business evolves.
RISK MANAG E ME NT AND
INTE RNAL CONTROL S
The Group has a framework of risk management
and internal control systems, policies and procedures.
The Audit Committee is responsible for reviewing the risk
management and internal control framework and ensuring
that it operates effectively. The Committee has reviewed
the framework and is satisfied that the internal control
systems in place are currently operating effectively.
40
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
CORPORATE GOVERNANCE NOMINATION COMMITTEE REPORT
CHAIRWOMAN
CHARLOTTE
O'SULLIVAN
OTHE R ME MB E RS
TARAK RAMZAN
ROGER MATHER
On behalf of the Board, I am pleased to present the
Nomination Committee Report for the year ended
31 March 2019.
MEMBERS OF THE NOMINATION COMMITTEE
The Nomination Committee comprises two Non-Executive
Directors: me, as Chair of the Committee, Roger Mather
and the Chief Executive, Tarak Ramzan.
DUTIE S
The duties of the Nomination Committee are set out
in its terms of reference, which are available on request from
the Company Secretary.
In carrying out its duties, the Nomination Committee
is primarily responsible for:
• reviewing the structure, size and composition of the Board;
• recommending to the Board any changes required
for succession planning;
•
identifying and nominating for approval of the Board
candidates to fill vacancies as and when they arise;
• reviewing the results of the Board performance
evaluation process; and
• making recommendations to the Board concerning
suitable candidates for the membership of the Board’s
Committees and the re-election of Directors at the
annual general meeting.
The Nomination Committee meets at least once a year
and otherwise as required and reports to the Board
on how it has discharged its responsibilities.
AC TIVIT Y DU RING THE YE AR
The Committee met once during the year. Given the
Board was constituted in July 2017 and there have been
no resignations since that date there was no requirement
for recruitment to the Board in the current year.
During the year the Committee has focused its work
on the following:
• The structure and composition of the Board and
its Committees. The Committee discussed the skills,
experience and diversity of the current Board and
Committee members taking into account the current
and future needs of the Group. The Committee believes
that the Board has the necessary balance of skills,
knowledge and experience for its current needs.
The Committee believes that the Directors are able
to devote sufficient time to the Group, taking into
account their other directorships.
• Succession planning: the Committee discussed
long-term succession planning and emergency cover,
and the need to identify and develop talent both within
the Group and from the wider market.
TE RMS OF RE FE RE NCE
The Committee will keep its terms of reference under review
with the main objective of ensuring that an appropriate
management framework and governance structure is in place.
CHARLOTTE O’SULLIVAN NOMINATION COMMITTEE CHAIRWOMAN
30 July 2019
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
41
DIRECTORS’ REMUNERATION REPORT
CHAIRMAN
ROGER
MATHER
OTHE R ME MB E RS
GERARD SWEENEY
CHARLOTTE O'SULLIVAN
On behalf of the Board, I am pleased to present the
Remuneration Committee Report for the year ended
31 March 2019.
The following narrative disclosures are prepared on
a voluntary basis, are not subject to audit and will not
be put to an advisory shareholder vote.
ME MB E RS OF THE
RE MU NE R ATION COMMIT TE E
The Remuneration Committee comprises two
Non-Executive Directors: me, as Chair of the Committee,
Charlotte O’Sullivan and the Chief Financial Officer,
Gerard Sweeney.
The Executive Chairman, CEO and external advisers may be
invited to attend meetings of the Remuneration Committee
but do not take part in the decision making. The Company
Secretary acts as secretary to the Committee.
DUTIE S
The duties of the Remuneration Committee are set out
in its terms of reference, which are available on request
from the Company Secretary. The terms of reference
have been approved for the Remuneration Committee
and are reviewed annually.
The Committee’s primary responsibility is to determine,
on behalf of the Board, the policy for the remuneration of
the Executive Directors, the Company Secretary and such
other members of the Executive Management Team of the
Group as is deemed appropriate. It is furthermore responsible
for determining the total individual remuneration packages
of each Director including, where appropriate, bonuses,
incentive payments and share options.
The remuneration of the Non-Executive Directors
is a matter for the Board.
No Director or senior manager may be involved in any
decision as to his/her own remuneration.
The Remuneration Committee meets at least twice a year.
42
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
CORPORATE GOVERNANCE • provides post-retirement benefits through contributions
to an individual’s pension schemes or an equivalent cash
alternative; and
• provides employment-related benefits including
the provision of a company car or cash alternative,
life assurance, insurance relating to the Director’s
duties, and medical insurance.
Each of the Executive Directors has a service contract
with the Company that is terminable on twelve months’
notice by either party.
SAL ARIE S , BONUSE S AND OTHE R
INCE NTIVE SCHE ME S
Each Executive Director receives a base salary and the
opportunity to earn an annual bonus that is linked to the
achievement of targeted levels of profit before tax in the
relevant financial year. Annual bonuses will not normally
exceed 100% of an individual’s salary.
Long-term incentives are provided through the operation
of the following arrangements that were first introduced
in July 2017:
• the QUIZ Company Share Option Plan (“CSOP”),
which allows tax advantaged options to be granted
over the Company’s shares to selected employees
of the Group (including Executive Directors); and
• the QUIZ Employee Share Option Plan (“ESOP”),
which enables non-tax advantaged options to be
granted to the same category of individuals.
Options granted under the CSOP and ESOP generally
vest after three years. The price per share payable on
their exercise will normally be equal to the market value
of a share on the date they were originally granted.
Further detail of the options granted are provided
in Note 21.
Given the existing size of their shareholdings, neither
Tarak Ramzan nor Sheraz Ramzan have been granted
awards under the CSOP or the ESOP.
PRINCIPLE S APPLIE D
The Remuneration Committee is committed to complying
with the principles of good corporate governance in
relation to the design of its remuneration policy and,
as such, our policy takes account of the UK Corporate
Governance Code and other best practice guidance
(for example, the QCA Remuneration Guidance and
the Investment Association’s Principles of Remuneration),
as far as is appropriate to the Company’s management
structure, size and listing.
The Non-Executive Directors of the Committee have
no personal financial interest, other than as shareholders,
in the matters to be decided. They have no conflicts of
interest arising from cross-directorships or from being
involved in the day-to-day business of the Group.
RE M U NE R ATION OF
NON ‑ E XECUTIVE DIREC TORS
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 are entitled to participate
in the Company pension arrangements but do not participate
in any of the equity or bonus schemes other than in relation
to a Warrant Instrument entered into with Peter Cowgill
on 18 July 2017 as described below.
Each Non-Executive Director who was in office during
the year was appointed for an initial 36-month term from
28 July 2017 unless terminated earlier by either party
giving the other two months’ written notice.
RE M U NE R ATION POLICY FOR
E XECUTIVE DIREC TORS
The Committee’s overarching aim is to attract and
retain the highest calibre Directors and ensure reward
for performance is competitive and appropriate for the
results delivered. The remuneration package for each
Executive Director incorporates performance and
non-performance-related elements and:
•
includes a market competitive salary, the level of
which reflects the particular Director’s experience
and the nature and complexity of their work;
• rewards the Director’s personal performance
(through the award of annual bonuses) and provides
an appropriate link to the Company’s long-term
performance and continued success (through the
operation of share-based incentive schemes);
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
43
DI R EC T OR S’ R E M U N E R AT ION R E P ORT CONTINUED
SAL ARIE S , BONUSE S AND OTHE R INCE NTIVE SCHE ME S continued
The following information is required by the AIM Rules:
Basic
salary/fees
£000
Bonus
£000
Taxable
benefits
£000
Pension
contributions
£000
2019
Total
£000
Basic
salary/fees
£000
Taxable
benefits
£000
Pension
contributions
£000
2018
Total
£000
Executive Directors
Tarak Ramzan
Gerard Sweeney
Sheraz Ramzan
Non-Executive
Directors
Peter Cowgill
Charlotte O’Sullivan
Roger Mather
180
130
130
75
35
40
590
—
19
—
—
—
—
19
15
10
9
—
—
—
34
22
13
13
1
1
—
50
217
172
152
76
36
40
139
117
102
50
23
27
693
458
8
8
5
—
—
—
21
15
11
9
—
—
—
35
163
136
116
50
23
27
515
Further to the Company’s Admission to AIM each of the Executive Directors entered into service agreements which
reflected salaries and benefits commensurate with their roles and responsibilities.
Each of the Executive Directors receive a car allowance which is included under taxable benefits along with the cost
of providing healthcare benefits and life assurance.
Pension contributions are paid into defined contribution schemes with the exception of Gerard Sweeney, who receives
a cash payment in lieu of pension contributions.
The above table does not include the value of share options or share awards to or held by the Directors.
WARR ANT INSTRU ME NT
Peter Cowgill
31 March
2018
186,355
Granted
Exercised
31 March
2019
Exercise
price
(pence)
—
— 186,355
80.50
The warrants are exercisable from 28 July 2017 to the earlier of their full exercise, Peter Cowgill ceasing to be a Director
or the takeover of the Company.
OPTIONS G R ANTE D U NDE R THE CSOP AND THE E SOP
Gerard Sweeney
Gerard Sweeney
Gerard Sweeney
Scheme
31 March
2018
CSOP
18,633
ESOP
142,857
ESOP
—
34,528
Granted
Exercised
31 March
2019
Exercise
price
(pence)
—
—
—
—
—
18,633
161.00
142,857
161.00
34,528
188.25
The above options vest after three years and have no performance conditions.
44
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
CORPORATE GOVERNANCE
E X TE RNAL NON - E XECUTIVE DIREC TOR POSITIONS
The Company allows Executive Directors to hold external directorships subject to agreement by the Chairman
on a case-by-case basis and, at the discretion of the Committee, to retain the fees received from those roles.
SHARE PRICE INFORMATION
The market price of the QUIZ plc ordinary shares at 31 March 2019 was 16.55 pence and the range during the year
was 15.83–201.50 pence.
STATE ME NT OF DIREC TORS’ SHARE HOLDINGS AND SHARE INTE RE STS
The interests of the Directors and their immediate families in the Group’s ordinary shares as at 31 March 2019
were as follows:
Executive Directors
Tarak Ramzan
Gerard Sweeney
Sheraz Ramzan
Non-Executive Directors
Peter Cowgill
Charlotte O’Sullivan
Roger Mather
ROGER MATHER REMUNERATION COMMITTEE CHAIRMAN
30 July 2019
Beneficially owned
Unvested outstanding
share awards
2019
2018
2019
2018
25,313,539 25,313,539
12,422
6,579,334 6,579,334
12,422
—
196,018
—
—
161,490
—
93,168
6,213
12,422
93,168
6,213
12,422
186,335
—
—
186,335
—
—
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
45
DIRECTORS’ REPORT
The Directors present their Annual Report on the affairs
of the Group, together with the financial statements and
Auditors’ Report, for the year ended 31 March 2019.
At 31 March 2019 the Company had been notified of the
following substantial shareholders comprising 3% or more
of the issued ordinary share capital of the Company:
PRINCIPAL AC TIVITIE S
The principal activity of the Company is that of a holding
company. The principal activity of its subsidiary undertakings
is that of retailing clothes.
BUSINE SS REVIEW
The Directors are required to prepare the financial
statements in accordance with applicable law and
International Financial Reporting Standards (“IFRS”).
These set out the requirement for a fair review of the
business, its position at the year end and a description
of the principal risks and uncertainties facing the Group.
The Strategic Report on pages 2 to 33 provides this
commentary and these are incorporated by cross-reference
and form part of this report.
RE SU LTS AND DIVIDE NDS
Results for the year ended 31 March 2019 are set out
in the consolidated statement of comprehensive income
on page 53. The Directors have suspended dividend
payments in the current year and no final dividend
is recommended.
DIREC TORS
The biographies of the Directors in office at the date
of this report are set out on pages 34 and 35.
Tarak Ramzan
Schroder Investment Management Limited
Omar Aziz
Kasim Akram
Nusrat Ramzan
Sheraz Ramzan
Mussarat Ramzan
Haris Ramzan
Hargreaves Lansdown Asset Management
Artemis Investment Management
Cavendish Asset Management
Brooks MacDonald Asset Management
% of
issued share
capital held
14.3
10.6
6.4
6.3
6.1
5.3
5.2
5.0
4.8
4.2
4.1
4.1
FINANCIAL RISK MANAG E ME NT
Details of financial risk management are detailed
in Note 24 to the financial statements.
GOING CONCE RN
The Company’s going concern statement can be found
in the basis of preparation section in Note 1 to the
financial statements.
Details of the Directors’ beneficial interests are set out
in the Remuneration Report on page 45.
POST- BAL ANCE SHE ET EVE NTS
There have been no material post-balance sheet events.
The Company has purchased directors’ and officers’
liability insurance during the year as allowed by the
Company’s Articles.
SHARE CAPITAL AND
SU BSTANTIAL SHARE HOLDE RS
Details of the issued share capital, together with details
of the movements during the year, are shown in Note 20
to the financial statements. The Company has one class
of ordinary share and each ordinary share carries the
right to one vote at general meetings of the Company.
FUTU RE DEVE LOPME NTS
The Strategic Report on pages 2 to 33 sets out the likely
future developments of the Company and Group.
POLITICAL DONATIONS
No political donations were made during the year
under review.
46
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
CORPORATE GOVERNANCE
E MPLOYE E INVOLVE ME NT
The Directors recognise that communication
with the Group’s employees is essential and the Group
places importance on the contributions and views of its
employees. Details of employee involvement are set out
in the Social Responsibility Report on pages 32 and 33.
DISAB LE D E MPLOYE E S
Details of the Group’s policy in relation to disabled
employees is set out in the Social Responsibility Report
on pages 32 and 33.
DISCLOSU RE OF INFORMATION
TO THE AU DITORS
In the case of each Director in office at the date the
Directors’ Report is approved, the following applies:
• the Director knows of no information, which would be
relevant to the auditors for the purpose of their Auditors’
Report, of which the auditors are not aware; and
• the Director has taken all steps that he/she ought to
have taken as a Director to make him/herself aware of
any such information and to establish that the auditors
are aware of it.
AU DITORS
The auditors, RSM UK Audit LLP, have indicated
their willingness to continue in office and a resolution
seeking to re-appoint them will be proposed at the AGM.
This Directors’ Report was approved by the Board of
Directors and authorised for issue on 11 June 2019.
ANNUAL G E NE R AL ME ETING
The Company’s AGM will be held on 4 September 2019.
GERARD SWEENEY COMPANY SECRETARY
30 July 2019
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
47
DIRECTORS’ RESPONSIBILITIES STATEMENT
The Directors are responsible for preparing the Directors’
Report and the financial statements in accordance with
applicable Jersey Law and regulations.
The Directors are required by the AIM Rules of the
London Stock Exchange to prepare Group financial
statements in accordance with International Financial
Reporting Standards (“IFRS”) as adopted by the European
Union (“EU”) and have elected under Jersey company law
to prepare the Company financial statements in accordance
with United Kingdom Generally Accepted Accounting
Practice (“UK GAAP”).
The financial statements of the Group and the Company are
required by law to give a true and fair view of the state of
the Group’s and the Company’s affairs at the end of the
financial year and of the profit or loss of the Group and
the Company for that year and are required to present
fairly the financial position and performance of the Group
and the Company.
In preparing the Group and the Company financial
statements, the Directors should:
• select suitable accounting policies and then apply
them consistently;
The Directors are responsible for keeping accounting
records which are sufficient to show and explain the
Group’s and the Company’s transactions and are such
as to disclose with reasonable accuracy at any time the
financial position of the Group and the Company and
enable them to ensure that the financial statements
comply with the requirements of the Companies (Jersey)
Law 1991. They are also responsible for safeguarding
the assets of the Group and 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 QUIZ plc website. Legislation in Jersey
governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
So far as the Directors are aware, there is no relevant
audit information of which the Company’s auditors are
unaware, and each Director has taken all the steps that
he or she ought to have taken as a Director in order
to make himself or herself aware of any relevant audit
information and to establish that the Company’s
auditors are aware of that information.
• make judgements and estimates that are reasonable
On behalf of the Board
and prudent;
• state whether they have been prepared in accordance
with IFRS as adopted by the EU for the Group and in
accordance with UK GAAP for the Company; and
TARAK RAMZAN CHIEF EXECUTIVE
GERARD SWEENEY CHIEF FINANCIAL OFFICER
30 July 2019
• prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Group and the Company will continue in business.
48
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
CORPORATE GOVERNANCE I N DE PE N DE N T AU DI T OR S’ R E P ORT
TO THE MEMBERS OF QUIZ PLC
OPINION
We have audited the financial statements of QUIZ plc (the “parent company”) and its subsidiaries (the “Group”) for
the year ended 31 March 2019 which comprise the consolidated and Company statements of comprehensive income,
consolidated and Company statements of financial position, consolidated and Company statements of changes in
equity, consolidated cash flow statements and notes to the financial statements, including a summary of significant
accounting policies. The financial reporting framework that has been applied in the preparation of the Group financial
statements is applicable law and International Financial Reporting Standards (“IFRS”) as adopted by the European
Union. The financial reporting framework that has been applied in the preparation of the parent company financial
statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101
Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the parent company’s affairs
as at 31 March 2019 and of the Group’s profit and the parent company’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
• the parent company financial statements have been properly prepared in accordance with United Kingdom Generally
Accepted Accounting Practice; and
• the financial statements have been properly prepared in accordance with the requirements of the Companies
(Jersey) Law 1991.
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the
financial statements section of our report. We are independent of the Group and parent company in accordance with
the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical
Standard as applied to SME listed entities, and we have fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
CONCLUSIONS RE L ATING TO GOING CONCE RN
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report
to you where:
• the Directors’ use of the going concern basis of accounting in the preparation of the financial statements is not
appropriate; or
• the Directors have not disclosed in the financial statements any identified material uncertainties that may cast significant
doubt about the Group’s or the parent company’s ability to continue to adopt the going concern basis of accounting
for a period of at least 12 months from the date when the financial statements are authorised for issue.
KEY AU DIT MAT TE RS
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Group
and parent company financial statements of the current year and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on the overall
audit strategy, the allocation of resources in the audit and directing the efforts of the engagement team. These matters
were addressed in the context of our audit of the Group and parent company financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
G ROU P KEY AU DIT MAT TE RS
Revenue recognition in omni- channel sales environment
Risk
As described in the accounting policies, income is recognised on the transfer of ownership of products to customers.
The Group income is derived through an omni-channel sales model, collecting sales through retail outlets, concession
arrangements, franchise arrangements, online sales through their own and third-party websites and wholesaling.
Consequently, there is a risk that controls over these sources of income do not adequately capture and record accurate
sales information. Cut-off procedures on sales through third-party sites create the greatest risk of misstatement due to
reliance on third-party information.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
49
I N DE PE N DE N T AU DI T OR S’ R E P ORT CONTINUED
TO THE MEMBERS OF QUIZ PLC
G ROU P KEY AU DIT MAT TE RS continued
Revenue recognition in omni- channel sales environment continued
Our response
We documented the processes and tested key management controls around recognition and measurement of revenue
and performed analytical audit procedures and substantive sampling procedures to test whether revenue data was
being collected and recorded appropriately. We reviewed a sample of franchise and concession agreements to test
whether revenue was recognised in line with the substance of these agreements.
We also performed year-end cut-off testing on revenue.
E xistence and valuation of stock
Risk
As described in the accounting policies, stock is carried at the lower of cost or net realisable value and is assessed at
each reporting date for impairment. The Group holds stock in multiple locations, some of which is physically controlled
by third parties, creating a risk of misstatement in the reported year-end stock. The Group has a trading model based
on fast turnover in product lines, creating some risk that seasonal stock held becomes obsolete or unsaleable.
Our response
We documented the processes and tested key management controls around stock recording. In addition, we attended
stock counts to test the accuracy of physical stock records. We tested pricing methodology and sell-through of year-end
stock to ensure stock was held at lower of cost and ultimate net realisable value. We reviewed management’s policy on
providing against stock lines and tested whether this was appropriate and consistently applied.
OU R APPLICATION OF MATE RIALIT Y
When establishing our overall audit strategy, we set certain thresholds which help us to determine the nature, timing
and extent of our audit procedures. When evaluating whether the effects of misstatements, both individually and on
the financial statements as a whole, could reasonably influence the economic decisions of users we take into account
the qualitative nature and the size of the misstatements. During planning materiality for the Group financial statements
as a whole was calculated as £840,000, which was not changed significantly during the course of our audit. Materiality
for the parent company financial statements as a whole was calculated as £90,000, which has not changed significantly
during the course of our audit. We agreed with the Audit Committee that we would report to them all unadjusted
differences in excess of £40,000, as well as differences below that threshold that, in our view, warranted reporting
on qualitative grounds.
AN OVE RVIEW OF THE SCOPE OF OU R AU DIT
Our audit was scoped by obtaining an understanding of the Group and its control environment, including Group-wide
controls, and assessing the risk of material misstatement. Our Group audit scope included the full scope audit of all
components requiring a statutory audit. These were performed at a materiality level determined by reference to the
scale of the business concerned. The financial statements were audited on a consolidated basis using Group materiality.
The scope of our audit covered 100% of both consolidated profit after tax and consolidated net assets.
OTHE R INFORMATION
The Directors are responsible for the other information. The other information comprises the information included in
the Annual Report, other than the financial statements and our Auditors’ Report thereon. Our opinion on the financial
statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained
in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether there is a material misstatement in the financial statements
or a material misstatement of the other information. If, based on the work we have performed, we conclude that there
is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
50
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
FINANCIAL STATEMENTS MAT TE RS ON WHICH WE ARE REQU IRE D TO RE PORT BY E XCE PTION
We have nothing to report in respect of the following matters where the Companies (Jersey) Law 1991 requires
us to report to you if, in our opinion:
• proper accounting records have not been kept by the parent company or proper 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
• we have failed to obtain any information or explanation that, to the best of our knowledge and belief, was necessary
for our audit.
RE SPONSIBILITIE S OF DIREC TORS
As explained more fully in the Directors’ Responsibilities Statement set out on page 48, the Directors are responsible
for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such
internal control as the Directors determine is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the parent company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the Directors either intend to liquidate the Group or the parent company or to
cease operations, or have no realistic alternative but to do so.
AU DITORS’ RE SPONSIBILITIE S FOR THE AU DIT OF THE FINANCIAL STATE ME NTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an Auditors’ Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is included in appendix 1 of this
Auditors’ Report. This description, which is located at page 52, forms part of our Auditors’ Report.
USE OF OU R RE PORT
This report is made solely to the Company’s members, as a body, in accordance with Article 113A of the Companies
(Jersey) Law 1991. Our audit work has been undertaken so that we might state to the Company’s members those matters
we are required to state to them in an Auditors’ 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.
ALAN AITCHISON FOR AND ON BEHALF OF RSM UK AUDIT LLP, AUDITORS
THIRD FLOOR
CENTENARY HOUSE
69 WELLINGTON STREET
GLASGOW
G2 6HG
30 July 2019
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
51
I N DE PE N DE N T AU DI T OR S’ R E P ORT CONTINUED
TO THE MEMBERS OF QUIZ PLC
APPENDIX 1: AUDITORS’ RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
As part of an audit in accordance with ISAs (UK), we exercise professional judgement and maintain professional
scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the Directors.
• Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Group’s or the parent company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our Auditors’ Report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our Auditors’ Report. However, future events or conditions may cause the
Group or the parent company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events in a manner that achieves
fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction,
supervision and performance of the Group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, including the FRC’s Ethical Standard as applied to SME listed entities, and communicate with
them all relationships and other matters that may reasonably be thought to bear on our independence, and where
applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the Group and parent company financial statements of the current year and are therefore the
key audit matters. We describe these matters in our Auditors’ Report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in
our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
52
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
FINANCIAL STATEMENTS CONSOL I DAT E D STAT E M E N T OF COM PR E H E NSI V E I NCOM E
YEAR ENDED 31 MARCH 2019
Continuing operations
Revenue
Cost of sales
Gross profit
Recurring administrative costs
Non-recurring administrative costs
Total administrative costs
Distribution costs
Other operating income
Total operating costs
Operating profit
Finance income
Finance costs
Profit before income tax
Income tax charge
Profit for the year
Other comprehensive income
Foreign currency translation differences – foreign operations
Profit and total comprehensive income for the year attributable to owners
of the parent
Profit per share
Basic earnings per share
Diluted earnings per share
All of the above income is attributable to the shareholders of the Company.
Notes
2019
£000
2018
£000
3
4
6
7
7
8
9
9
130,898
(51,498)
116,430
(43,101)
79,400
73,329
(54,760)
(369)
(55,129)
(24,066)
6
(42,366)
(1,037)
(43,403)
(21,369)
15
(79,189)
(64,757)
211
36
(31)
216
(104)
112
8,572
30
(53)
8,549
(1,724)
6,825
(46)
47
66
6,872
0.09p
0.09p
5.49p
5.49p
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
53
CONSOL I DAT E D STAT E M E N T OF F I NA NC I A L P OSI T ION
AS AT 31 MARCH 2019
Assets
Non-current assets
Property, plant and equipment
Intangible assets
Total non-current assets
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Loans and borrowings
Derivative financial liabilities
Corporation tax payable
Total current liabilities
Non-current liabilities
Loans and borrowings
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Called-up share capital
Share premium
Merger reserve
Retained earnings
Total equity
31 March
2019
£000
31 March
2018
£000
Notes
11
12
13
14
22
15
16
17
16
18
20
20
20
20
15,983
8,230
14,793
7,289
24,213
22,082
14,453
12,552
7,555
14,717
9,774
9,883
34,560
34,374
58,773
56,456
(17,099)
(40)
(5)
(452)
(12,090)
(641)
(5)
(1,127)
(17,596)
(13,863)
—
(378)
(378)
(41)
(412)
(453)
(17,974)
(14,316)
40,799
42,140
373
10,315
915
29,196
373
10,315
915
30,537
40,799
42,140
These financial statements of QUIZ plc, registered number 123460, on pages 53 to 74 were approved by
the Board of Directors and authorised for issue on 30 July 2019 and were signed on its behalf by:
TARAK RAMZAN CHIEF EXECUTIVE
GERARD SWEENEY CHIEF FINANCIAL OFFICER
30 July 2019
54
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
FINANCIAL STATEMENTS
CONSOL I DAT E D STAT E M E N T OF C H A NGE S I N EQU I T Y
YEAR ENDED 31 MARCH 2019
At 1 April 2017
Impact of Group reconstruction
New shares issued (net of expenses)
Shares cancelled on conversion of shares
Credit arising on conversion of shares
Profit and total comprehensive income for the year
Share-based payments charge
At 31 March 2018
Profit and total comprehensive income for the year
Share-based payments charge
Dividends paid
At 31 March 2019
All equity is attributable to the owners of the parent.
Notes
20
10
Share
capital
£000
1,454
(1,095)
20
(6)
—
—
—
373
—
—
—
373
Share
premium
£000
—
—
10,315
—
—
—
—
10,315
—
—
—
10,315
Merger
reserve
£000
—
915
—
—
—
—
—
915
—
—
—
915
Retained
earnings
£000
23,471
—
—
—
6
6,872
188
30,537
66
84
(1,491)
Total
£000
24,925
(180)
10,335
(6)
6
6,872
188
42,140
66
84
(1,491)
29,196
40,799
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
55
CONSOL I DAT E D C A SH F L OW STAT E M E N T
YEAR ENDED 31 MARCH 2019
Cash flows from operating activities
Cash generated by operations
Operating profit
Depreciation of tangible assets
Amortisation of intangible assets
Share-based payment charges
Exchange movement
Decrease/(increase) in inventories
(Increase)/decrease in receivables
Increase in payables
Decrease in provisions
Net cash from operating activities
Interest paid
Income taxes paid
Net cash generated by operating activities
Cash flows from investing activities
Payments to acquire intangible assets
Payments to acquire property, plant and equipment
Payments to facilitate Group reconstruction
Interest received
Net cash used in investing activities
Cash flows from financing activities
Repayment of borrowings
Net proceeds from share issue
Dividends paid
Net cash (used in)/generated by financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effect of foreign exchange rates
Cash and cash equivalents at end of year
56
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
Year ended
31 March
2019
£000
Year ended
31 March
2018
£000
Notes
211
3,767
245
84
(29)
264
(2,779)
5,030
—
6,793
(31)
(832)
5,930
(1,186)
(4,957)
—
36
8,572
2,761
130
188
37
(5,405)
959
2,358
(162)
9,438
(63)
(2,023)
7,352
(903)
(5,435)
(180)
30
(6,107)
(6,488)
(254)
—
(1,491)
(1,231)
10,335
—
(1,745)
9,104
(1,922)
9,495
(18)
22
7,555
9,968
(484)
11
9,495
FINANCIAL STATEMENTS
NO T E S T O T H E GROU P F I NA NC I A L STAT E M E N T S
YEAR ENDED 31 MARCH 2019
1 SIG NIFICANT ACCOU NTING POLICIE S
Basis of preparation
QUIZ plc (the “parent company”) is a public limited company, incorporated and domiciled in Jersey. It is listed on AIM.
The registered office of the Company is 22 Grenville Street, St Helier, Jersey, Channel Islands JE4 8PX, and the principal
activities and nature of the Group’s operations are set out in the Strategic Report on pages 2 to 33.
These financial statements for the year ended 31 March 2019 have been prepared in accordance with International
Financial Reporting Standards as adopted by the European Union (“Adopted IFRS”), IFRS IC interpretations and the
Companies (Jersey) Law 1991.
These are presented in Pounds Sterling because that is the currency of the primary economic environment in which the
Group operates. Monetary amounts in these financial statements are rounded to the nearest thousand. Foreign operations
are included in accordance with the policies set out below.
The annual financial statements have been prepared on the historical cost basis, except for certain financial assets
and liabilities which are carried at fair value.
The preparation of financial statements in conformity with International Financial Reporting Standards adopted by the
European Union requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reported year. Although these estimates are based on management’s best knowledge
of current events and actions, actual results ultimately may differ from those estimates.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by
the Company (its subsidiaries, the “Group”) made up to 31 March each year. Control is achieved where the Company
is exposed or has the right to variable returns from its involvement with the investee and has the ability to affect those
returns through its power over the investee.
Initial application of IFRS 9 Financial Instrument s
The Group has applied IFRS 9 Financial Instruments for the first time in the year ended 31 March 2019. IFRS 9 replaces
IAS 39 Financial Instruments: Recognition and Measurement.
As a result of the adoption of IFRS 9 the Group has adopted consequential changes to IAS 1 Presentation of Financial
Statements. In addition, the Group has applied the consequential amendments to IFRS 7 Financial Instruments: Disclosure
to the current year only.
The classification of financial assets under IFRS 9 is based on whether the contractual cash flows of the instrument
are solely payments of principal and interest, and whether the business model is to collect those contractual cash flows
and/or sell the financial assets. All the Group’s financial assets were previously classified as loans and receivables under
IAS 39 and are classified as assets at amortised cost under IFRS 9.
The only change in measurement of financial assets on application of IFRS 9 arises from impairment of financial assets.
IFRS 9 requires impairments of financial assets to be assessed using an “expected loss” model.
Currently the Group has recognised impairment loss on an individual basis, based on various indicators, such as significant
financial difficulty or expected bankruptcy. The amount of the provision as at 31 March 2019 is £506,000.
Using the expected loss model the Group calculated a provision of £77,000. As a result, the adjustment required on
transition to IFRS 9 is not considered to be material for the current year financial statements.
The application of IFRS 9 has not changed the measurement of the Group’s financial liabilities or the Group’s accounting
policies for the recognition or derecognition of financial instruments.
Initial application of IFRS 15 Revenue from Contract s with Customers
The Group has applied IFRS 15 Revenue from Contracts with Customers for the first time in the year ended
31 March 2019.
In accordance with the transition provisions in IFRS 15, the Group has adopted the new rules retrospectively with the
cumulative effect of initially applying the standard recognised at the date of the initial application. The impact of the
adoption as at 1 April 2018 was to recognise and record a refund liability in relation to online sales. The amount of provision
calculated as at 31 March 2018 was £200,000. No adjustment is required as at 1 April 2018. As at 31 March 2019,
the amount of provision calculated is £280,000 with a revenue element deemed not to be material.
Therefore, the impact on the transition to IFRS 15 on QUIZ’s revenue recognised at 1 April 2018 and 31 March 2019
is deemed not material and a transition adjustment is not required.
There has been no material impact on earnings per share due to reflecting the impact of the new standard as at
1 April 2018. There has been no impact on accounting for costs and the Group statement of cash flows.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
57
NO T E S T O T H E GROU P F I NA NC I A L STAT E M E N T S CONTINUED
YEAR ENDED 31 MARCH 2019
1 SIG NIFICANT ACCOU NTING POLICIE S continued
G oing concern
The Directors have prepared trading and cash flow forecasts for a period of three years from the date of approval
of these financial statements. The Directors have a reasonable expectation that the Group has adequate cash headroom.
Accordingly, the financial statements of the Group have been prepared on a going concern basis in accordance with
International Financial Reporting Standards as adopted by the European Union (“Adopted IFRS”), IFRS IC interpretations
and the Companies (Jersey) Law 1991.
Intangible asset s
G oodwill
The goodwill arose when Shoar (Holdings) Limited acquired the entire share capital of Tarak Retail Limited in 2012 and
reflects the difference between the fair value of the consideration transferred and the fair value of assets and liabilities
purchased. Goodwill is not amortised. Instead, goodwill is tested annually for impairment or if events or changes in
circumstances indicate that it might be impaired and is carried at cost less accumulated impairment losses.
Other intangible asset s
Intangible assets purchased are recognised when future economic benefits are probable and are initially recognised
at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets are amortised to profit or loss on a straight-line basis over their useful lives, as follows:
Computer software
between 7 and 10 years
Trademarks
10 years
Amortisation is revised prospectively for any significant change in useful life or residual value. On disposal, the difference
between the net disposal proceeds and the carrying amount of the intangible asset is recognised in profit or loss.
All amortisation has been charged to administrative expenses in the statement of comprehensive income.
Proper ty, pl ant and equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost, net of depreciation
and any impairment losses. Depreciation is provided on all property, plant and equipment, at rates calculated to write
off the cost or valuation of each asset to its estimated residual value on a straight-line basis over its expected useful
life, as follows:
Property leasehold
straight line over the life of the lease
Computer equipment
between 5 and 15 years
Fixtures, fittings and equipment
between 5 and 15 years
Motor vehicles
between 4 and 5 years
All depreciation has been charged to administrative expenses in the statement of comprehensive income.
Revenue recognition
Revenue is recognised at fair value of the consideration received or receivable for the sale net of staff discounts
and value added tax.
Sale of goods – retail
The Group operates a chain of retail outlets for selling clothing products. Sales of goods are recognised when the
customer obtains control of the product after payment is made.
Internet revenue
Revenue from the provision of the sale of goods on the internet is recognised at the point that the product is delivered
to a customer or point of collection. Transactions are settled by credit or payment card.
Wholesale revenue
Wholesale revenue is recognised when title has passed in accordance with the individual terms of trade.
Returns
A provision for returns, based on historical customer return rates, is deducted from revenue.
Ta xation
The tax expense represents the sum of the current tax expense and deferred tax expense. Current tax assets are
recognised when tax paid exceeds the tax payable.
Current tax is based on taxable profit for the year. Taxable profit differs from total comprehensive income because it
excludes items of income or expense that are taxable or deductible in other years. Current tax assets and liabilities are
measured using the tax rates that have been enacted or substantively enacted by the reporting date.
58
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
FINANCIAL STATEMENTS
1 SIG NIFICANT ACCOU NTING POLICIE S continued
Ta xation continued
Deferred tax is recognised using the balance sheet liability method, on temporary differences arising between the tax
base of assets and liabilities and their carrying amount in the historical financial information. Deferred tax is calculated
at the tax rates that have been enacted or substantively enacted by the reporting date and are expected to apply when
the related deferred tax asset is realised or the deferred tax liability is settled.
Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available
against which the temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at
each reporting date.
Deferred tax assets and liabilities are offset against each other when there is a legally enforceable right to set off current
tax assets against current tax liabilities and it is the intention to settle these on a net basis.
Current and deferred tax is charged or credited in the profit or loss, except when it relates to items charged or credited
to other comprehensive income or equity, when the tax follows the transaction for the event it relates to and is also
charged or credited to other comprehensive income or equity.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on a first in, first out basis. At each
reporting date, the impairment of stock is assessed. Any excess of the carrying amount of stocks over its estimated selling
price is recognised as an impairment loss in profit or loss.
Finance income and f inance cost s
Finance income and finance costs include interest income and expense. Interest income is accrued on a time-apportioned basis,
by reference to the principal outstanding at the effective interest rate.
Leasing
All leases are operating leases and the annual rentals are charged to profit or loss on a straight-line basis over the lease
term. Rent-free years or other incentives received for entering an operating lease are accounted for as a reduction to the
expense and are recognised on a straight-line basis over the lease term.
Employee benef it s
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to
be recognised as part of the cost of stock or are capitalised as an intangible fixed asset or property, plant and equipment.
Retirement benef it s
The subsidiaries operate defined contribution pension schemes. For defined contribution schemes the amount charged to
profit or loss is the contributions payable in the year. Differences between contributions payable in the year and contributions
paid are shown as either accruals or prepayments.
Foreign currency transactions
Functional and presentation currency
The individual financial statements of each subsidiary are presented in the currency of the primary economic environment
in which it operates (its functional currency). For the consolidated financial statements, the results and financial position
of each subsidiary are expressed in Pounds Sterling, which is the functional currency of the Company and the presentation
currency for the consolidated statements.
Transactions and bal ances
Transactions in currencies other than the functional currency (foreign currencies) are initially recorded at the exchange
rate prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated
at the rate of exchange ruling at the reporting date. Non-monetary assets and liabilities denominated in opening currencies
are translated at the rate ruling at the date of the transaction or, if the asset or liability is measured at fair value, the rate
when that fair value was determined.
All translation differences are taken to profit or loss, except to the extent that they relate to gains or losses on
non-monetary items recognised in other comprehensive income, when the related translation gain or loss is also
recognised in other comprehensive income.
Provisions
Provisions are recognised when there is an obligation at the reporting date arising from a past event from which it is
considered probable that a transfer of economic benefits will occur and that obligation can be reasonably estimated.
Provisions are measured at the best estimate of the amounts required to settle the obligation. When the effect of the time
value of money is material, the provision is based on the present value of those amounts, discounted at the pre-tax discount
rate that reflects the risk specific to the liability. The unwinding of the discount is recognised within finance costs.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
59
NO T E S T O T H E GROU P F I NA NC I A L STAT E M E N T S CONTINUED
YEAR ENDED 31 MARCH 2019
1 SIG NIFICANT ACCOU NTING POLICIE S continued
Segment repor ting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker, being the Board of Directors. The chief operating decision maker is responsible for allocating resources
and assessing performance of operating segments.
The Directors consider that there are no identifiable business segments that are subject to risks and returns different
to the core business. The information reported to the Directors, for the purposes of resource allocation and assessment
of performance, is based wholly on the overall activities of the subsidiaries.
The Directors have therefore determined that there is only one reportable segment under IFRS 8. The results and
assets for this segment can be determined by reference to the statement of comprehensive income and statement
of financial position.
Financial instrument s
Recognition of f inancial instrument s
Financial assets and financial liabilities are recognised when the Group becomes party to the contractual provisions
of the instrument.
Financial asset s
Initial and subsequent measurement of f inancial asset s
Trade receivables are initially measured at their transaction price. Group and other receivables are initially measured at
fair value plus transaction costs. Receivables are held to collect the contractual cash flows which are solely payments of
principal and interest. Therefore, these receivables are subsequently measured at amortised cost using the effective
interest rate method.
Impairment of f inancial asset s
An impairment loss is recognised for the expected credit losses on financial assets when there is an increased probability
that the counterparty will be unable to settle an instrument’s contractual cash flows on the contractual due dates,
a reduction in the amounts expected to be recovered, or both.
The probability of default and expected amounts recoverable are assessed using reasonable and supportable
past and forward-looking information that is available without undue cost or effort. The expected credit loss is a
probability-weighted amount determined from a range of outcomes and takes into account the time value of money.
C ash and c ash equivalent s
Cash and cash equivalents comprise cash at bank and in hand and short-term deposits with an original maturity
of three months or less.
Trade receivables
For trade receivables, expected credit losses are measured by applying an expected loss rate to the gross carrying
amount. The expected loss rate comprises the risk of a default occurring and the expected cash flows on default based
on the ageing of the receivable. The risk of a default occurring always takes into consideration all possible default
events over the expected life of those receivables. Different provision rates are used based on groupings of historical
credit loss experience by product type, customer type and location. Trade receivables are considered to be in default
on an individual basis, based on various indicators, such as significant financial difficulty or expected bankruptcy.
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 Company after
deducting all of its liabilities.
Initial and subsequent measurement of f inancial liabilities
Trade, Group and other payables are initially measured at fair value, net of direct transaction costs and subsequently
measured at amortised cost.
Bank borrowings and bank overdraf t s
Interest-bearing bank loans and bank overdrafts are initially measured at fair value, net of direct transaction costs,
and are subsequently measured at amortised cost. Finance charges, including premiums payable on settlement or
redemption, are recognised in profit or loss over the term of the loan using an effective rate of interest.
Equity instrument s
Equity instruments issued by the Company are recorded at fair value on initial recognition net of transaction costs.
60
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
FINANCIAL STATEMENTS 1 SIG NIFICANT ACCOU NTING POLICIE S continued
Derecognition of f inancial asset s (including write - of fs) and f inancial liabilities
A financial asset (or part thereof) is derecognised when the contractual rights to cash flows expire or are settled, or when
the contractual rights to receive the cash flows of the financial asset and substantially all the risks and rewards of ownership
are transferred to another party.
When there is no reasonable expectation of recovering a financial asset it is derecognised (“written off”). The gain or
loss on derecognition of financial assets measured at amortised cost is recognised in profit or loss. A financial liability
(or part thereof) is derecognised when the obligation specified in the contract is discharged, cancelled or expires.
Any difference between the carrying amount of a financial liability (or part thereof) that is derecognised and the
consideration paid is recognised in profit or loss.
Derivative f inancial instrument s
The Group holds derivative financial instruments to hedge its foreign currency exposures. The Directors do not follow
hedge accounting principles. Derivative financial instruments are recorded at fair value at the end of each reporting year.
Share -based payment s
Equity-settled share-based payments to employees are measured at the fair value of the equity instruments at the grant
date. The fair value excludes the effect of non-market-based vesting conditions. Details regarding the determination of
the fair value of equity-settled share-based transactions are set out in Note 21.
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 year, based on the Group’s estimate of equity instruments that will eventually vest. At each balance
sheet date, the Group revises its estimate of the number of equity instruments expected to vest as a result of 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.
For cash-settled share-based payments, a liability is recognised for the goods or services acquired, measured initially at
the fair value of the liability. At each balance sheet date until the liability is settled, and at the date of settlement, the fair
value of the liability is remeasured, with any changes in fair value recognised in profit or loss for the year.
Critical accounting estimates and judgement s
In the application of the Company’s accounting policies, the Directors are required to make judgements, estimates
and assumptions about the carrying value 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 year in which the estimate is revised where the revision affects only that year, or in the year of the
revision and future years where the revision affects both current and future years.
Information about such estimations and judgements are contained in individual accounting policies. The estimates and
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year are:
Impairment of goodwill
The Directors are required to test, where indicators of impairment exist, whether goodwill has suffered an impairment.
Details of this assessment are provided in Note 12. Based on the assessment and sensitivity test carried out, the Directors
have concluded that goodwill of £6.2 million is not impaired.
Impairment of asset s
An assessment is made at each reporting date of whether there are indications that an asset may be impaired or that an
impairment loss previously recognised has fully or partially reversed. If such indications exist, the recoverable amount is
estimated or, for goodwill, the recoverable amount of the cash-generating unit to which the goodwill belongs is estimated.
Shortfalls between the carrying value of an asset and its recoverable amount, being the higher of fair value less costs
to sell and value in use, are recognised as impairment losses. Impairment of revalued assets is treated as a revaluation
loss. All other impairment losses are recognised in profit or loss.
Recognised impairment losses, other than goodwill, are reversed if, and only if, the reasons for the impairment loss have
ceased to apply. Reversal of impairment losses is recognised in profit or loss for revalued assets as a revaluation gain.
On reversal of an impairment loss, the depreciation or amortisation is adjusted to allocate the asset’s revised carrying
amounts (less any residual value) over its remaining useful life.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
61
NO T E S T O T H E GROU P F I NA NC I A L STAT E M E N T S CONTINUED
YEAR ENDED 31 MARCH 2019
1 SIG NIFICANT ACCOU NTING POLICIE S continued
Critical accounting estimates and judgement s continued
Depreciation and amor tisation
The Directors exercise judgement to determine useful lives and residual values of tangible and intangible assets.
The assets are depreciated or amortised over their estimated useful lives.
Inventor y provision
Provision is made for those items of inventory where the net realisable value is estimated to be lower than cost.
Net realisable value is based on both historical experience and assumptions regarding future selling prices and is
consequently a source of estimation uncertainty. The provision is determined based on the choice of an appropriate
percentage in accordance with the ageing of stock.
Returns provision
The accounting estimate related to the return of stocks sold online is susceptible to changes from period to period.
The value of expected returns of £0.3 million (2018: £0.2 million) is estimated using recent past experience.
Any variation from this estimate would result in either an increase or a reduction to the carrying value of stocks
and an increase or decrease in gross margins.
2 NEW ACCOU NTING PRONOU NCE ME NTS
The financial statements have been prepared in accordance with accounting policies that are consistent with those
applied above. The following new or revised standards or interpretations apply to accounting years beginning after
1 April 2018:
New or revised standards or interpretations
IFRS 16 Leases
Annual improvements to IFRS 2015–2017 cycle
Amendments to IFRS 3 Business Combinations (issued on 22 October 2018)
Amendments to IAS 1 and IAS 8: Definition of Material (issued on 31 October 2018)
Effective for accounting
years commencing on or after
1 January 2019
1 January 2019
1 January 2020
1 January 2020
Title of standard
Nature of change
Impact
Mandatory application date/
date of adoption by Group
IFRS 16 Leases
IFRS 16 was issued in January 2016. It will result in almost all leases being recognised
on the balance sheet by lessees, as the distinction between operating and finance leases
is removed. Under the new standard, an asset (the right to use the leased item) and a
financial liability to pay rentals are recognised. The only exceptions are short-term and
low-value leases.
The management has reviewed all of the Group’s leasing arrangements over the last year
in light of the new lease accounting rules in IFRS 16. The standard will affect primarily
the accounting for the Group’s operating leases.
The adoption of IFRS 16 has no effect on how the business is run, nor on the overall
cash flows for the Group.
As at the reporting date, the Group has non-cancellable operating lease commitments
of £23,248,000; see Note 23. Of these commitments, approximately £400,000 relate
to short-term leases which will be recognised on a straight-line basis as an expense
in profit or loss.
For the remaining lease commitments, the Group expects to recognise right-of-use assets
of approximately £23,100,000 on 1 April 2019 and lease liabilities of £23,200,000 (after
adjustments for prepayments and accrued lease payments recognised as at 31 March 2019).
Net current assets will be £5,000,000 lower due to the presentation of a portion of the
liability as a current liability.
The Group will apply the standard from 1 April 2019. The Group intends to apply the
simplified transition approach and will not restate comparative amounts for the year
prior to first adoption. Right-of-use assets for property leases will be measured on
transition as if the new rules had always been applied. All other right-of-use assets will
be measured at the amount of the lease liability on adoption (adjusted for any prepaid
or accrued lease expenses).
62
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
FINANCIAL STATEMENTS
3 REVE NU E
An analysis of revenue by source and geographical destination is as follows:
Online
International
UK Stores and concessions
United Kingdom
Rest of the world
2019
£000
41,018
22,978
66,902
2018
£000
30,641
21,218
64,571
130,898
116,430
2019
£000
105,486
25,412
2018
£000
92,894
23,536
130,898
116,430
Deducted from Online revenue generated for the year is an estimated returns liability of £280,000 (2018: £200,000).
As at 31 March 2019 non-current assets in the United Kingdom were £22,486,000 (2018: £19,959,000) with
£1,727,000 (2018: £2,123,000) located in the rest of the world.
4 NON - RECU RRING ADMINISTR ATIVE COSTS
The non-recurring costs of £0.4 million in the year ended 31 March 2019 related to the write-off of debt arising
from the administration of House of Fraser.
Non-recurring administrative costs in the year ended 31 March 2018 of £1.0 million related to the Placing and Admission
to AIM by the Company and the Group reorganisation undertaken in preparation of this process.
5 E MPLOYE E B E NE FIT E XPE NSE S
Employment costs and average monthly number of employees (including Directors) during the year were as follows:
Wages and salaries
Social security costs
Other pension costs
Agency costs
Retail
Distribution
Administration
2019
£000
18,786
1,360
254
3,887
2018
£000
16,045
1,155
128
2,552
24,287
19,880
No.
1,422
45
188
1,655
No.
1,305
30
140
1,475
Included above is £693,000 in respect of Directors’ remuneration (2018: £515,000). Further details on Directors’
remuneration can be found in the Directors’ Remuneration Report on pages 42 to 45.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
63
NO T E S T O T H E GROU P F I NA NC I A L STAT E M E N T S CONTINUED
YEAR ENDED 31 MARCH 2019
6 OPE R ATING PROFIT
Operating profit is stated after charging:
Cost of inventories recognised as an expense
Distribution costs
Employment costs
Depreciation
Amortisation
Operating lease payments
Non-recurring administrative costs
Share-based payment charges
Other expenses
2019
£000
51,498
24,066
24,287
3,767
245
6,982
369
84
19,389
2018
£000
43,101
21,369
19,880
2,761
130
5,831
1,037
188
13,561
130,687
107,858
Included in the above are the costs associated with the following services provided by the Company’s auditors:
Audit services
Audit of the Company and the consolidated financial statements
Audit of the Company’s subsidiaries
Total audit fees
Fees relating to the Admission to AIM
Fees relating to accounts preparation services
Fees relating to financial reporting advisory services
All other services
Total fees payable to the Company’s auditors
7 FINANCE INCOME AND E XPE NSE
Interest on cash deposits
Other interest
Finance income
Interest on loans and overdrafts
Other interest
Finance expense
2019
£000
11
39
50
—
5
4
18
77
2019
£000
36
—
36
2019
£000
18
13
31
2018
£000
10
35
45
140
—
—
11
196
2018
£000
13
17
30
2018
£000
37
16
53
64
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
FINANCIAL STATEMENTS
8 INCOME TA X
UK corporation tax – current year
UK corporation tax – prior year
Foreign tax
Deferred tax – current year
Deferred tax – effect of adjustment in tax rate
Deferred tax – prior year
Tax on profit on ordinary activities
Reconciliation of effective tax rate
Profit on ordinary activities before taxation
Profit on ordinary activities multiplied by standard rate of UK corporation tax of 19%
(2018: 19%)
Expenses not deductible for tax purposes
Effect of adjustment in tax rate
Adjustments to previous years
Foreign tax adjustments
2019
£000
219
(91)
29
(141)
—
88
104
2018
£000
1,814
(65)
137
(117)
(53)
8
1,724
216
8,549
41
68
14
(3)
(16)
104
1,624
287
(53)
(57)
(77)
1,724
The UK corporation tax rate will reduce to 17% (effective 1 April 2020), as enacted on 15 September 2016. This will
reduce the Group’s future current tax charge accordingly.
9 E ARNINGS PE R SHARE
Number of shares:
Weighted number of ordinary shares outstanding
Effect of dilutive options
2019
No.
124,230,905
39,002
2018
No.
124,230,905
93,127
Weighted number of ordinary shares outstanding – diluted
124,269,907
124,324,032
Earnings:
Profit basic and diluted
Profit adjusted
Earnings per share:
Basic earnings per share
Adjusted earnings per share
Diluted earnings per share
Adjusted diluted earnings per share
£000
112
412
Pence
0.09
0.33
0.09
0.33
£000
6,825
7,862
Pence
5.49
6.33
5.49
6.33
The adjusted profit after tax for 2019 and adjusted earnings per share are shown before non-recurring costs (net
of tax) of £0.3 million (2018: £1.0 million). The Directors believe that the adjusted profit after tax and the adjusted
earnings per share measures provide additional useful information for shareholders on the underlying performance
of the business. These measures are consistent with how underlying business performance is measured internally.
The adjusted profit after tax measure is not a recognised profit measure under IFRS and may not be directly
comparable with adjusted profit measures used by other companies.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
65
NO T E S T O T H E GROU P F I NA NC I A L STAT E M E N T S CONTINUED
YEAR ENDED 31 MARCH 2019
10 DIVIDE NDS
Dividends paid
2019
£000
1,491
2018
£000
—
In September 2018, a dividend of 0.8 pence per share was paid by the Group, amounting to a dividend paid of £994,000.
In March 2019, an interim dividend of 0.4 pence per share was paid by the Group, amounting to a dividend paid of £497,000.
No further dividends in respect of 2019 are proposed.
11 PROPE RT Y, PL ANT AND EQU IPME NT
Cost
At 1 April 2018
Additions
Disposals
At 31 March 2019
Depreciation
At 1 April 2018
Charge
Disposals
At 31 March 2019
Net book value
At 31 March 2019
At 31 March 2018
Cost
At 1 April 2017
Additions
Disposals
At 31 March 2018
Depreciation
At 1 April 2017
Charge
Disposals
At 31 March 2018
Net book value
At 31 March 2018
At 31 March 2017
Leasehold
property
£000
Motor
vehicles
£000
Computer
equipment
£000
Fixtures,
fittings and
equipment
£000
Total
£000
1,378
162
(40)
1,500
505
231
(40)
696
804
873
120
42
—
162
68
32
—
100
62
52
1,674
493
(279)
21,633
4,260
(3,364)
24,805
4,957
(3,683)
1,888
22,529
26,079
648
288
(279)
657
8,791
3,216
(3,364)
10,012
3,767
(3,683)
8,643
10,096
1,231
13,886
15,983
1,026
12,842
14,793
Leasehold
property
£000
Motor
vehicles
£000
Computer
equipment
£000
Fixtures,
fittings and
equipment
£000
Total
£000
649
729
—
1,378
411
94
—
505
873
238
166
36
(82)
120
118
32
(82)
68
52
48
1,119
555
—
17,622
4,115
(104)
19,556
5,435
(186)
1,674
21,633
24,805
458
190
—
648
6,450
2,445
(104)
7,437
2,761
(186)
8,791
10,012
1,026
12,842
14,793
661
11,772
12,118
66
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
FINANCIAL STATEMENTS
12 INTANG IB LE S
Cost
At 1 April 2018
Additions
At 31 March 2019
Amortisation
At 1 April 2018
Charge
At 31 March 2019
Net book value
At 31 March 2019
At 31 March 2018
Cost
At 1 April 2017
Additions
At 31 March 2018
Amortisation
At 1 April 2017
Charge
At 31 March 2018
Net book value
At 31 March 2018
At 31 March 2017
Goodwill
£000
Computer
software
£000
Trademarks
£000
Total
£000
6,175
—
6,175
—
—
—
1,371
1,186
2,557
410
229
639
6,175
6,175
1,918
961
165
—
165
12
16
28
137
153
7,711
1,186
8,897
422
245
667
8,230
7,289
Goodwill
£000
Computer
software
£000
Trademarks
£000
Total
£000
6,175
—
6,175
633
738
1,371
—
—
—
6,175
6,175
292
118
410
961
341
—
165
165
—
12
12
153
—
6,808
903
7,711
292
130
422
7,289
6,516
The goodwill arose when Shoar (Holdings) Limited acquired the entire share capital of Tarak Retail Limited in 2012 and
reflects the difference between the fair value of the consideration transferred and the fair value of assets and liabilities
purchased. Goodwill is assessed for impairment by comparing the carrying value to value-in-use calculations. Value in use
has been estimated using cash flow projections based on detailed budgets and forecasts over the period of three years,
with a decline rate of 4% (2018: growth rate of 2%) and a discount rate of 10% (2018: 10%) applied, being the Directors’
estimate of the Group’s cost of capital, with no terminal value. The budgets and forecasts are based on historical data and
the past experience of the Directors as well as the future plans of the business. The Directors do not consider goodwill
to be impaired.
13 INVE NTORIE S
Finished goods and goods for resale
2019
£000
2018
£000
14,453
14,717
There is no material difference between the balance sheet value of stocks and their replacement cost.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
67
NO T E S T O T H E GROU P F I NA NC I A L STAT E M E N T S CONTINUED
YEAR ENDED 31 MARCH 2019
14 TR ADE AND OTHE R RECE IVAB LE S
Trade receivables – gross
Allowance for doubtful debts
Trade receivables – net
Other receivables
Prepayments and accrued income
Amounts owed by related parties
2019
£000
7,366
(506)
6,860
1,884
3,806
2
12,552
2018
£000
6,701
(340)
6,361
584
2,829
—
9,774
The Directors consider that the fair value of trade and other receivables is not materially different from the carrying
value. Standard payment terms with customers are 28–30 days.
15 TR ADE AND OTHE R PAYAB LE S
Trade payables
Other taxes and social security costs
Accruals
Deferred income
Other payables
Amounts due to related parties
2019
£000
9,580
2,263
3,983
586
561
126
2018
£000
7,479
394
3,094
578
500
45
17,099
12,090
Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The Directors
consider that the fair value of trade and other payables is not materially different from the carrying value.
Included within other payables at the year-end date was a balance of £40,000 (2018: £Nil) owed to the Group’s
pension scheme.
16 LOANS AND BORROWINGS
Bank loans
Bank overdrafts
Current
Non-current
2019
£000
40
—
40
40
—
40
2018
£000
294
388
682
641
41
682
Bank loans, overdrafts and other credit facilities are secured by an unlimited multilateral and cross-company guarantee
given by Kast Retail Limited and Tarak International Limited and also by a limited guarantee given by, and by a floating
charge over the assets of, Kast Retail Limited and Tarak International Limited. The bank also holds a right of set-offs
between Kast Retail Limited and Tarak International Limited. All entities included in the guarantee are wholly owned
subsidiaries in the Group.
In addition, bank overdrafts and other credit facilities are secured by a bond and floating charge from Tarak Retail Limited
over the whole of its property and undertakings.
Bank overdrafts are annual facilities, subject to review at various dates during 2019 and 2020 and are repayable on demand.
Borrowings are denominated and repaid in Pounds Sterling, have contractual interest rates that are either fixed rates
or variable rates linked to LIBOR that are not leveraged, and do not contain conditional returns or repayment provisions
other than to protect the lender against credit deterioration or changes in relevant legislation or taxation.
68
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
FINANCIAL STATEMENTS 17 DE RIVATIVE FINANCIAL INSTRU ME NTS
Foreign currency options
2019
£000
5
2018
£000
5
Forward foreign exchange contracts are used to hedge exposure to fluctuations in foreign exchange rates that arise
in the normal course of the Group’s business.
As at 31 March 2019, the Group had commitments to buy the equivalent of £4,800,000 of Chinese Renminbi
(2018: £2,550,000) and sell the equivalent of £3,369,299 of Euros (2018: £1,140,000).
18 DE FE RRE D TA X
The following is an analysis of the deferred tax liabilities, net of deferred tax assets:
Accelerated capital allowances
Balance brought forward
Credit to income statement
Effect of foreign exchange rates
Balance at end of year
Other short-term timing differences
Balance brought forward
Charge to equity
Charge/(credit) to income statement
Balance at end of year
2019
£000
464
(88)
2
378
(52)
17
35
—
2018
£000
574
(112)
2
464
—
—
(52)
(52)
Total deferred tax liability at end of year
378
412
There is no unprovided deferred tax in the current year for the Group (2018: £Nil).
19 FINANCIAL INSTRU ME NTS
The following table shows the carrying amounts and fair values of financial assets and liabilities. All financial liabilities are
measured at amortised cost. The derivative liability, which is measured at fair value, is level 2 in the fair value hierarchy
as disclosed in Note 17.
Category of financial instruments
Carrying value of financial assets:
Cash and cash equivalents
Trade and other receivables
Total financial assets
Carrying value of financial liabilities:
Trade and other payables
Bank and other borrowings
Total financial liabilities
2019
£000
2018
£000
7,555
8,746
9,883
6,945
16,301
16,828
(14,250)
(40)
(11,118)
(682)
(14,290)
(11,800)
The fair value and carrying value of financial instruments have been assessed and there is deemed to be no material
differences between fair value and carrying value.
The cash and cash equivalents are held with bank and financial institution counterparties, which are rated P-1 and A-1,
based on Moody’s ratings.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
69
NO T E S T O T H E GROU P F I NA NC I A L STAT E M E N T S CONTINUED
YEAR ENDED 31 MARCH 2019
20 SHARE CAPITAL AND RE SE RVE S
Share capital – allotted, called up and fully paid
124,230,905 ordinary shares of 0.3 pence each (2018: 124,230,905)
Share premium
2019
£000
2018
£000
373
373
10,315
10,315
Share capital
On 28 July 2017 the Company was admitted to trading on AIM. On this date the Company issued 6,583,851 ordinary
shares of 0.3 pence each with a nominal value of £19,752.
Prior to this date the Company had issued 117,647,054 ordinary shares of 0.3 pence each with a nominal value of
£352,941 in relation to the incorporation of the Company and the purchase of its subsidiaries, Kast Retail Limited,
Tarak International Limited and Shoar (Holdings) Limited.
As a result of these transactions the issued share capital at 31 March 2018 comprised 124,230,905 ordinary shares
of 0.3 pence each with a nominal value of £372,693.
Share premium
The share premium reserve contains the premium arising on the issue of equity shares, net of issue expenses incurred
by the Company. The 6,583,851 ordinary shares of 0.3 pence each with a nominal value of £19,752 on 28 July 2017
were issued at a price of 161 pence per share giving rise to share premium of £10,315,248 (net of expenses).
Merger reser ve
The merger reserve arose on the purchase of the subsidiaries, Kast Retail Limited, Tarak International Limited and Shoar
(Holdings) Limited. The merger reserve represents the difference between the cost value of the shares acquired less the
cost value of the shares issued for the purchase of each company and the stamp duty payable in respect of these transactions.
Retained earnings
The movement on retained earnings is as set out in the statement of changes in equity. Retained earnings represent
cumulative profits or losses, net of dividends and other adjustments.
21 SHARE- BASE D PAYME NTS
The movement in awards during the year was:
Date of grant
CSOP
28/07/17
29/06/18
ESOP
28/07/17
29/06/18
Warrants
Opening
balance
Granted
during
the year
Lapsed
during
the year
Number of shares
Closing
balance
Exercise
price
Pence
Exercise
period
568,093
—
—
52,320
(24,210)
(14,873)
543,883
37,447
161.00
188.25
28/07/20–28/07/27
29/06/21–29/06/28
323,601
—
186,335
—
112,777
—
—
—
—
323,601
112,777
186,335
161.00
188.25
80.5
28/07/20–28/07/27
29/06/21–29/06/28
See overleaf
1,078,029
165,097
(39,083) 1,204,043
The weighted average life of the CSOP and ESOP options were 8.4 and 8.6 years respectively.
All share options were valued using the Black-Scholes model. Expected volatility was determined by management,
using comparator volatility as a basis. The expected life of the options was determined based on management’s best
estimate. The expected dividend yield was based on the anticipated dividend policy of the Company over the expected
life of the options. The risk-free rate of return input into the model was a zero-coupon government bond with a life in
line with the expected life of the options.
70
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
FINANCIAL STATEMENTS
21 SHARE- BASE D PAYME NTS continued
The inputs to the model were as follows:
Option plan
Grant date
Share price at grant date
Number of employees
Shares under option
Vesting period (years)
Expected volatility
Risk-free rate
Expected life (years)
CSOP
CSOP
ESOP
ESOP
Warrant
28/07/17 29/06/18 28/07/17 29/06/18 28/07/17
80.50
1
186,335
—
31.4%
0.5%
2
161.00
56
543,883
3
31.4%
0.5%
4
161.00
6
323,601
3
31.4%
0.5%
4
188.25
15
112,777
3
35.3%
0.5%
4
188.25
12
37,447
3
35.3%
0.5%
4
Expectations of meeting performance criteria
Expected dividend yield
100%
2.0%
100%
2.0%
100%
2.0%
100%
2.0%
100%
2.0%
The Group recognised a total expense of £84,000 during the year (2018: £188,000) relating to equity-settled
share-based payments, including employer’s National Insurance contributions of £13,000 (2018: £26,000).
Company Share Option Pl an (“CSOP ”)
The Group operated a share option scheme during the year for certain employees under the CSOP, which allows
tax advantaged options to be granted over the Company’s shares to selected employees of the Group. The different
options vest after three years and have an exercise life between three and ten years from grant date. The exercise
of the options is subject to continued employment over the vesting year.
E xecutive Share Option Pl an (“ ESOP ”)
The Group operated a share option scheme during the year for certain employees under the ESOP, which allows non-tax
advantaged options to be granted over the Company’s shares to selected employees of the Group. The different options
vest after three years and have an exercise life between three and ten years from grant date. The exercise of the options
is subject to continued employment over the vesting year.
Warrant s
The Company entered into a Warrant Instrument with its Chairman, Peter Cowgill, dated 18 July 2017, pursuant to
which Peter Cowgill may subscribe for up to 186,335 ordinary shares exercisable in whole or in part at a subscription
price equal to 80.5 pence. The warrants are exercisable until the earlier of (i) their full exercise, (ii) Peter Cowgill ceasing
to be a Director, or (iii) a takeover of the Company. At the year end, no Warrant Instruments had yet been exercised.
22 CASH AND CASH EQU IVALE NTS
Cash
Bank overdraft
2019
£000
7,555
—
7,555
2018
£000
9,883
(388)
9,495
23 FINANCIAL COMMITME NTS
C apital commitment s
The Group has capital commitments of £250,000 at 31 March 2019 (2018: £391,000) which were not provided
for in the financial statements.
Operating leases
At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under
non-cancellable leases which fall due as follows:
Within one year
From two to five years
In more than five years
2019
£000
7,780
15,249
219
2018
£000
6,620
13,545
1,205
23,248
21,370
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
71
NO T E S T O T H E GROU P F I NA NC I A L STAT E M E N T S CONTINUED
YEAR ENDED 31 MARCH 2019
24 FINANCIAL RISK MANAG E ME NT
The Group has exposure to credit, liquidity, market and capital management risk from its operations.
Risk management framework
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk
management framework.
The Group, through its standards and procedures, aims to develop a disciplined and constructive control environment
in which all employees understand their roles and obligations.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet
its contractual obligations and arises principally from the Group’s receivables from customers and connected companies.
The carrying amount of financial assets represents the maximum credit exposure.
Trade and other receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer.
However, management also considers the factors that may influence the credit risk of its customer base, including the
default risk of the industry and country in which customers operate. The risk associated with receivables is mitigated
by obtaining Standby Letters of Credit relating to a number of outstanding balances.
The maximum exposure to credit risk for trade receivables by geographic region was as follows:
United Kingdom
Rest of the world
The ageing of trade receivables that were not impaired was as follows:
Not overdue
0 to 6 months overdue
3 to 6 months overdue
Over 6 months overdue
Closing balance
The movement in the provision for impairment of receivables in the year was as follows:
Opening provision
Release in the year
Provided for in the year
Closing provision
2019
£000
4,233
3,133
7,366
2018
£000
3,666
3,035
6,701
Carrying
amount
2019
£000
Allowance
for expected
credit losses
£000
5,582
1,060
119
605
7,366
2019
£000
340
(350)
516
506
17
84
—
405
506
2018
£000
50
(50)
340
340
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to
ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal
and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. Based on
current cash flow projections, the Group expects to have sufficient headroom against its borrowing facilities.
72
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
FINANCIAL STATEMENTS
24 FINANCIAL RISK MANAG E ME NT continued
Liquidity risk continued
E xposure to liquidity risk
The following are the remaining contractual maturities of financial liabilities. The amounts are gross and undiscounted
and include estimated interest repayments.
31 March 2019
Trade payables
Other payables
Loans and borrowings
31 March 2018
Trade payables
Other payables
Loans and borrowings
Contractual cash flows
2 months
or less
£000
2–12
months
£000
More than
1 year
£000
Total
£000
9,657
561
40
9,657
561
16
10,258
10,234
7,479
5,004
294
7,479
5,004
65
12,777
12,548
—
—
24
24
—
—
188
188
—
—
—
—
—
—
41
41
Interest rate risk
The loans and borrowings are sensitive to changes in interest rates. A 50-basis point change in the base rate would
have an impact of £5,000 on the profit for the year ended 31 March 2019 (2018: £10,000).
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, will affect the Group’s income
or the value of their holdings of financial instruments. The objective of foreign currency risk management is to manage
and control market risk exposures within acceptable parameters, while optimising the return. All such transactions are
carried out within the guidelines set by the Board of Directors.
The Group is exposed to currency risk to the extent that there is a fluctuation in the foreign exchange rate between
the date of the transaction and the date when amounts are paid. The functional currency of the Group is Sterling, but
it receives some revenues in Euros and makes some purchases in Chinese Renminbi. As at 31 March 2019, about 8%
(2018: 18%) of the Group’s trade receivables balances were denominated in Euros and 10% (2018: 5%) of the Group’s
trade payable balances were denominated in Chinese Renminbi.
The summary quantitative data about the Group’s exposure to currency risk is as follows:
31 March 2019
Euros
Chinese Renminbi
31 March 2018
Euros
Chinese Renminbi
Trade
receivables
£000
Trade
payables
£000
Net
exposure
£000
549
—
1,199
—
311
982
219
359
238
982
980
359
The following significant exchange rates have been applied during the year:
Euros
Chinese Renminbi
Average rate Year-end spot rate
2019
2019
Average rate Year-end spot rate
2018
2018
1.13
8.80
1.16
8.70
1.13
9.00
1.14
9.00
Sensitivity to market risk
If the Euro exchange rate, on average through the year, weakened/strengthened by 10% and all other variables were
held constant, the Group’s profit for the year ended 31 March 2019 would increase/decrease by £632,000 and £517,000
respectively (2018: £164,000 and £135,000). This has been calculated by applying the amended currency rate to the
value of Euro receipts during the year.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
73
NO T E S T O T H E GROU P F I NA NC I A L STAT E M E N T S CONTINUED
YEAR ENDED 31 MARCH 2019
24 FINANCIAL RISK MANAG E ME NT continued
Market risk continued
Sensitivity to market risk continued
If the Chinese Renminbi exchange rate, on average through the year, weakened/strengthened by 10% and all other
variables were held constant, the Group’s profit for the year ended 31 March 2019 would decrease/increase by
£455,000 and £556,000 respectively (2018: £455,000 and £556,000). This has been calculated by applying the
amended currency rate to the value of Chinese Renminbi payments during the year.
C apital risk management
The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can
provide returns for shareholders and benefits for other stakeholders, and to maintain an optimum capital structure to
reduce the cost of capital.
Capital is regarded as total equity, as recognised in the Group’s statement of financial position, plus net debt. Net debt
is calculated as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt.
The Group is subject to certain financial arrangements covenants and meeting these is given priority in all capital risk
management decisions. There have been no events of default on the financing arrangement during the financial year.
The Directors believe that the Group is well placed to manage its business risks successfully and do not foresee any
risks arising in the immediate future.
25 RE L ATE D PART Y TR ANSAC TIONS
The Group considers its Executive and Non-Executive Directors as key management and therefore has a related party
relationship with them.
Rel ated par ty transactions with connected companies
Two Directors, Tarak Ramzan and his son Sheraz Ramzan, and their relatives control 43.4% of the voting shares
of the Company.
The Group transacts with the companies in which Tarak and Sheraz Ramzan have an interest. The amounts of the
transactions and balances due to and from the related parties during the year and at the year end are:
Big Blue Concepts Limited
Tarak Manufacturing Limited
Big Blue Concepts Limited
Tarak Manufacturing Limited
Sales to
Purchased from
2019
£000
—
—
2018
£000
—
—
2019
£000
168
177
Balance owed to
Balance due from
2019
£000
37
89
2018
£000
—
36
2019
£000
1
1
2018
£000
168
199
2018
£000
—
—
Since 28 July 2018 the charges from Big Blue Concepts Limited and Tarak Manufacturing Limited solely relate to the
rental of the Group’s distribution centre and head office respectively. These leases were entered into further to the
Independent Non-Executive Directors of the Company having received independent legal advice and independent
commercial real estate advice and being satisfied that they reflect arm’s length legal and commercial terms.
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. The Directors’ Remuneration Report on pages
42 to 45 of this Annual Report provides further information regarding the remuneration of individual Directors.
Short-term employment benefits
Post-employment benefits
Employer National Insurance contributions
Share-based payments
74
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
2019
£000
643
50
81
20
794
2018
£000
479
35
61
139
714
FINANCIAL STATEMENTS COM PA N Y STAT E M E N T OF COM PR E H E NSI V E I NCOM E
YEAR ENDED 31 MARCH 2019
Recurring administrative costs
Non-recurring administrative costs
Total administrative costs
Other operating income
Total operating income/(costs)
Operating profit/(loss)
Dividend income from subsidiaries
Finance income
Profit before income tax
Income tax charge
Profit and total comprehensive income for the year
Notes
2
3
2019
£000
(975)
—
(975)
1,008
33
33
—
36
69
(21)
48
2018
£000
(261)
(1,037)
(1,298)
420
(878)
(878)
5,000
12
4,134
(30)
4,104
There were no items of other comprehensive income in the current or prior years in the Company. Accordingly, no
Statement of Other Comprehensive Income has been prepared.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
75
COM PA N Y STAT E M E N T OF F I NA NC I A L P OSI T ION
AS AT 31 MARCH 2019
Assets
Non-current assets
Investments
Total non-current assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Corporation tax payable
Total current liabilities
Total liabilities
Net assets
Equity
Called-up share capital
Share premium
Retained earnings
Total equity
Notes
2019
£000
2018
£000
4
5
6
7
7
7
539
539
539
539
6,053
7,605
5,189
9,341
13,658
14,530
14,197
15,069
(828)
(14)
(842)
(842)
(241)
(30)
(271)
(271)
13,355
14,798
373
10,315
2,667
373
10,315
4,110
13,355
14,798
These financial statements of QUIZ plc, registered number 123460, on pages 75 to 80 were approved by the Board
of Directors and authorised for issue on 30 July 2019 and were signed on its behalf by:
TARAK RAMZAN CHIEF EXECUTIVE
GERARD SWEENEY CHIEF FINANCIAL OFFICER
30 July 2019
76
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
FINANCIAL STATEMENTS
COM PA N Y STAT E M E N T OF C H A NGE S I N EQU I T Y
YEAR ENDED 31 MARCH 2019
At 1 April 2017
New shares issued (net of expenses)
Shares cancelled on conversion of shares
Credit arising on conversion of shares
Profit and total comprehensive income for the year
At 31 March 2018
Profit and total comprehensive income
Dividends
At 31 March 2019
Share
capital
£000
—
379
(6)
—
—
373
—
—
373
Share
premium
£000
—
10,315
—
—
—
10,315
—
—
Retained
earnings
£000
—
—
—
6
4,104
4,110
48
(1,491)
Total
£000
—
10,694
(6)
6
4,104
14,798
48
(1,491)
10,315
2,667
13,355
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
77
NO T E S T O T H E COM PA N Y F I NA NC I A L STAT E M E N T S
YEAR ENDED 31 MARCH 2019
1 SIG NIFICANT ACCOU NTING POLICIE S
Basis of preparation
QUIZ plc (the “Company”) is a public limited company, incorporated and domiciled in Jersey. It is listed on AIM.
The registered office of the Company is 22 Grenville Street, St Helier, Jersey, Channel Islands JE4 8PX. The main
activity of the Company is that of a holding company.
These financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced
Disclosure Framework (“FRS 101”). In preparing these financial statements, the Company applies the recognition
and measurement requirements of International Financial Reporting Standards as adopted by the EU (“IFRS”),
amended where necessary in order to comply with the Companies (Jersey) Law 1991.
The financial statements are presented in Pounds Sterling because that is the currency of the primary economic
environment in which the Company operates. Monetary amounts in these financial statements are rounded to the
nearest thousand.
The annual financial statements have been prepared on the historical cost basis. The principal accounting policies adopted
by the Company are the same as those set out in Note 1 to the Group financial statements except as set out below.
Transition to FRS 101
During the year, the Company transitioned to FRS 101 Reduced Disclosure Framework (“FRS 101”) from International
Financial Reporting Standards as adopted by the EU (“IFRS”) and has taken advantage of the disclosure exemptions allowed
under this standard. There was no material impact on transition for the year ended 31 March 2019 or 31 March 2018.
Reduced disclosures
The following exemptions from the requirements of IFRS have been applied in the preparation of these financial
statements and, where relevant, equivalent disclosures have been made in the Group accounts of the parent,
in accordance with FRS 101:
• presentation of a statement of cash flows and related notes;
• disclosure of the future impact of new International Financial Reporting Standards in issue but not yet effective
at the reporting date;
• financial instrument disclosures, including:
һ carrying amounts and fair values of financial instruments by category and information about the nature and extent
of risks arising on financial instruments: income, expenses, gains and losses on financial instruments; and
һ effects of initial application of IFRS 9;
• disclosure of key management personnel compensation;
• related party disclosures for transactions with wholly owned members of the Group; and
• disclosure of the objectives, policies and processes for managing capital.
Other operating income
Other operating income is recognised when it is received or when the right to receive payment is established.
Investment s
Fixed asset investments are stated at cost less provision for diminution in value.
G oing concern
Going concern for the Company has been considered along with the Group by the Directors. The consideration is set
out in Note 1 of the consolidated financial statements.
Financial instrument s
Recognition of f inancial instrument s
Financial assets and financial liabilities are recognised when the Company becomes party to the contractual provisions
of the instrument.
Initial and subsequent measurement of f inancial asset s
C ash and cash equivalent s
Cash and cash equivalents comprise cash at bank and in hand and other short-term deposits held by the Company
with maturities of less than three months.
78
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
FINANCIAL STATEMENTS 1 SIG NIFICANT ACCOU NTING POLICIE S continued
Initial and subsequent measurement of f inancial asset s continued
Amount s due from G roup under takings and other receivables
Amounts due from Group undertakings and other receivables are initially measured at fair value plus transaction costs.
Receivables that are held to collect the contractual cash flows which are solely payments of principal and interest.
Therefore, these receivables are subsequently measured at amortised cost using the effective interest rate method.
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 Company after
deducting all of its liabilities.
Initial and subsequent measurement of f inancial liabilities
Trade payables and amount s due to G roup under takings
Trade, intercompany and other payables are initially measured at fair value, net of direct transaction costs, and subsequently
measured at amortised cost.
Equity instrument s
Equity instruments issued by the Company are recorded at fair value on initial recognition net of transaction costs.
Derecognition of f inancial asset s (including write - of fs) and f inancial liabilities
A financial asset (or part thereof) is derecognised when the contractual rights to cash flows expire or are settled, or
when the contractual rights to receive the cash flows of the financial asset and substantially all the risks and rewards
of ownership are transferred to another party. When there is no reasonable expectation of recovering a financial asset
it is derecognised (“written off”). The gain or loss on derecognition of financial assets measured at amortised cost is
recognised in profit or loss.
A financial liability (or part thereof) is derecognised when the obligation specified in the contract is discharged, cancelled
or expires. Any difference between the carrying amount of a financial liability (or part thereof) that is derecognised
and the consideration paid is recognised in profit or loss.
2 NON - RECU RRING COSTS
Non-recurring costs incurred during the year were £Nil (2018: £1,037,000). The costs incurred in prior year related
to the successful Admission of the Company to the AIM of the London Stock Exchange in July 2017.
3 OPE R ATING INCOME
The Company generated operating income of £1,008,000 (2018: £420,000) in relation to management services
provided to other Group companies.
4 INVE STME NTS
Subsidiary undertakings
2019
£000
539
2018
£000
539
All of the subsidiaries have been included in the consolidated financial statements. The subsidiaries held during the
year are set out below:
Subsidiary
Principal activity
Country of
incorporation
Registered
office
% shares
Kast Retail Limited
Kast International Spain SL
Kast Services Limited
Shoar (Holdings) Limited
Tarak Retail Limited
Tarak International Limited
Operating standalone clothing stores in the UK
Operating standalone clothing stores in Spain
Holds intellectual property for the QUIZ Group
Holding company
Operating concessions on department stores in
the UK
Online sales, concessions and franchise stores
outside the UK
UK
Spain
UK
UK
UK
UK
a
b
a
a
a
a
100
100
100
100
100
100
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
79
NO T E S T O T H E COM PA N Y F I NA NC I A L STAT E M E N T S CONTINUED
YEAR ENDED 31 MARCH 2019
4 INVE STME NTS continued
The registered offices of the above subsidiaries are as follows:
a) 61 Hydepark Street, Glasgow, Strathclyde G3 8BW
b) Paseo Castellana, 141 5°, Edificio Cuzco, Madrid 28046
All shares held by the Company are ordinary equity shares.
5 TR ADE AND OTHE R RECE IVAB LE S
Other receivables
Amounts owed by Group companies
6 TR ADE AND OTHE R PAYAB LE S
Trade payables
Other taxes and social security costs
Deferred income
Amounts owed to Group companies
7 SHARE CAPITAL AND RE SE RVE S
Share capital – allotted, called up and fully paid
124,230,905 ordinary shares of 0.3 pence each (2018: 124,230,905)
Share premium
2019
£000
127
5,926
6,053
2019
£000
—
—
—
828
828
2018
£000
—
5,189
5,189
2018
£000
11
35
84
111
241
2019
£000
2018
£000
373
373
10,315
10,315
Share capital
On 28 July 2017 the Company was admitted to trading on AIM. On this date the Company issued 6,583,851 ordinary
shares of 0.3 pence each with a nominal value of £19,752.
Prior to this date the Company had issued 117,647,054 ordinary shares of 0.3 pence each with a nominal value of
£352,941 in relation to the incorporation of the Company and the purchase of its subsidiaries, Kast Retail Limited,
Tarak International Limited and Shoar (Holdings) Limited.
As a result of these transactions the issued share capital at 31 March 2018 comprised 124,230,905 ordinary shares
of 0.3 pence each with a nominal value of £372,693.
Share premium
The share premium reserve contains the premium arising on the issue of equity shares, net of issue expenses incurred
by the Company. The 6,583,851 ordinary shares of 0.3 pence each with a nominal value of £19,752 on 28 July 2017
were issued at a price of 161 pence per share giving rise to share premium of £10,315,248 (net of expenses).
Retained earnings
The movement on retained earnings is as set out in the statement of changes in equity. Retained earnings represent
cumulative profits or losses, net of dividends and other adjustments.
80
QUIZ PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2019
FINANCIAL STATEMENTS
COM PA N Y I N F OR M AT ION
PRINCIPAL BANKE RS
HSBC Bank plc
Glasgow
REG ISTR ARS
Capita Registrars (Jersey) Limited
12 Castle Street
St Helier
Jersey
Channel Islands
JE2 3RT
DIREC TORS
Peter Alan Cowgill
Tarak Ramzan
Sheraz Ramzan
Gerard Sweeney
Charlotte Rose O’Sullivan
Roger Thomas Mather
REG ISTE RE D OFFICE
22 Grenville Street
St Helier
Jersey
Channel Islands
JE4 8PX
PRINCIPAL PL ACE
OF BUSINE SS
61 Hydepark Street
Glasgow
G3 8BW
COMPANY SECRETARY
Gerard Sweeney
ASSISTANT COMPANY
SECRETARY
Mourant Ozannes Secretaries
(Jersey) Limited
22 Grenville Street
St Helier
Jersey
Channel Islands
JE4 8PX
NOMINATE D ADVISE R
AND B ROKE R
Panmure Gordon (UK) Limited
One New Change
London
EC4M 9AF
REG ISTE RE D AU DITORS
RSM UK Audit LLP
Third Floor
Centenary House
69 Wellington Street
Glasgow
G2 6HG
LEGAL COUNSE L
RE SCOT TISH AND
E NG LISH L AW
Dentons UK and Middle East LLP
Quartermile One
15 Lauriston Place
Edinburgh
EH3 9EP
LEGAL COUNSE L
RE J E RSEY L AW
Mourant Ozannes LP
22 Grenville Street
St Helier
Jersey
Channel Islands
JE4 8PX
QUIZ plc’s commitment to environmental issues is reflected in this
Annual Report which has been printed on Symbol Freelife Satin and
Arcoprint which are made from an FSC® certified and PCF (Process
Chlorine Free) material. Printed in the UK by Park Communications
using its environmental printing technology and vegetable inks
throughout. Both manufacturing mill and the printer are registered
to the Environmental Management System ISO 14001 and are
Forest Stewardship Council® (FSC) chain-of-custody certified.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2019 QUIZ PLC
81
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9
61 Hydepark Street
Glasgow
G3 8BW
www.quizgroup.co.uk