S U P E R R E TA I L G R O U P L I M I T E D
20
20
ANNUAL
REPORT
Inspiring you to
live your passion
ABN: 81 108 676 204 2
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CONTENTS
Chair’s Message
CEO’s Message
About Us
Performance Highlights
Our Strategy
2020 Events: Testing the Strength of Super Retail Group
Our Brands
Supercheap Auto
rebel
BCF
Macpac
Board of Directors
Executive Leadership Team
Our Team
Directors’ Report
Remuneration Report (Audited)
Financial Statements
4
6
8
10
12
14
16
16
18
20
22
24
26
28
30
49
79
142
Shareholder Information
144
Corporate Directory and Financial Calendar
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DEAR SHAREHOLDER
The 2020 financial year stands out as the most challenging
in our 16 years as a public company.
For our team members, customers, suppliers and the wider community, the
past 12 months have been extremely testing. A prolonged drought in many
parts of Australia, floods and tragic bushfires devastated many communities.
The ongoing COVID-19 pandemic ignited a health and economic crisis that has
changed the way we live, work and shop.
As with the broader retail sector, Super Retail Group has not been immune
from the repercussions of coronavirus and its economic impact.
However, the Group’s strong fundamentals combined with the extraordinary
commitment and dedication of both our team members and the executive
team in working collaboratively with our partners helped the business navigate
the initial crisis and deliver a resilient financial performance for the year.
The performance of the Group during this difficult period has reinforced
the Board’s confidence in our strategy and demonstrated the importance of
continuing to enhance our omni-retail capabilities.
A sustained focus on executing our strategy and decisive action in response
to the unfolding COVID-19 crisis and material changes in consumer behaviour
were crucial contributors to delivering sustainable outcomes for all of
our stakeholders.
The Group’s financial position and operational performance has supported the
Board’s decision to determine a fully franked final dividend of 19.5 cents per
share. This represents a payout ratio of 55 per cent of underlying net profit
after tax for the second half, in line with the Group’s policy.
In its deliberations on shareholder returns, the Board considered a number
of factors, including its earlier decision to cancel the interim dividend, the
performance of the business in the second half and the net cash position
on the balance sheet following a successful equity raising in July 2020.
We completed the $203 million equity raising with strong support from retail
and institutional shareholders, including our founder and major shareholder
Reg Rowe.
Complementing our focus on shareholder returns, the Board takes great pride
in how the issues faced across Australia and New Zealand during the year
unquestionably reinforce the Group’s role in the community.
Our purpose is to provide solutions and engaging experiences that inspire our
customers to make the most of their leisure time.
During the year, our purpose has come to the fore for many of our customers.
Our team showed immense initiative and embraced innovative practices
to ensure we did everything possible to continue to meet the needs of the
community. In a COVID world, with the lines increasingly blurred between
work and leisure time, and growing focus on health, safety and wellbeing,
the Group’s four core brands played an increasingly important role for
our customers.
The indefatigable efforts of our team members in delivering for customers,
suppliers and our partners reflect the Group’s purpose and are crucial to the
underlying strength of the business. In his first full year in the role of Group
Managing Director and Chief Executive Officer, Anthony Heraghty ensured
his executive team remain focused on optimising our capabilities and driving
team member engagement during this extraordinary period.
Chair’s
Message
In line with good governance and our Board succession planning,
during the year we welcomed to the Board two highly credentialled
directors, Annabelle Chaplain AM and Gary Dunne. After a career
in investment banking with global financial institutions, Annabelle
has diverse board experience with a range of ASX-listed companies
while Gary brings to the board more than 25 years’ experience in
operations and strategy with Coles, ALDI and Woolworths.
On behalf of the Board, I would also like to thank Launa Inman, who
retired as a director in October 2019, for her many contributions
as a committed and engaged director during her four-year tenure.
I thank my Board colleagues for their commitment to the Group
and sound counsel over the tumultuous past 12 months. The
decisions taken by the Board leave the Group in a stronger position
and well placed to create shareholder value over the long term.
but the Group has a track record of not only surviving but thriving
in tough conditions.
With a strong balance sheet and no net debt, we are ideally placed
to deliver on our omni-retail strategy, enhance our footprint and
capitalise on organic opportunities to grow market share as we
pursue long-term value for our shareholders. Despite the immense
challenges, we have not been distracted from this task.
Thank you for your continuing support of Super Retail Group.
Looking ahead, there is no question we will continue to face fresh
challenges in a period marked by ongoing volatility and uncertainty
Sally Pitkin
Chair
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DEAR SHAREHOLDER
The past 12 months will be remembered as a year like no other for
Super Retail Group. As outlined by the Chair, natural disasters and the
COVID-19 pandemic have tested the limits of your company’s resilience.
I am pleased to report, however, that thanks to the remarkable efforts of the Super
Retail Group team and the flexibility of our omni-retail strategy we weathered
these crises by adapting quickly to the volatile operating environment.
As the COVID-19 crisis began to unfold in February 2020, our primary focus
remained the health, safety and wellbeing of our team members and customers.
We strictly adhered to the advice and guidance of governments and health
authorities across Australian and New Zealand while striving to remain open for
business where possible. Continuing to operate helped support our team members
with meaningful employment and provided our loyal customers with the essential
products they need.
This approach played a fundamental role in shaping Super Retail Group’s
performance for FY20.
Despite some of the toughest operating conditions ever faced by the retail sector,
the Group delivered a strong trading outcome. The parallel efforts of keeping
stores open where possible during COVID-19 lockdowns, while successfully
pivoting to meet increased demand in our online sales channels bolstered the
Group’s financial results.
STRONG FINANCIAL PERFORMANCE
Given the context for FY20, we were very pleased with the Group’s financial
performance. Our omni-retail strategy has provided flexibility for our businesses
to adapt quickly to the wholesale changes in customer behaviour triggered by the
COVID-19 restrictions. Key features of the full year financial performance for the
52 weeks to 27 June 2020 included:
•
Total Group sales of $2.83 billion, an increase of 4.2 per cent on the previous
comparative period (pcp)
• Online sales of $290.5 million, an increase of 44.4 per cent on pcp
•
•
•
Group like-for-like sales growth of 3.6 per cent
Group segment earnings before interest, tax, depreciation and amortization
(EBITDA) of $328.1 million, an increase of 4.3 per cent on pcp
Group segment earnings before interest and tax (EBIT) of $236.1 million, an
increase of 3.5 per cent on pcp
• Normalised net profit after tax (NPAT) of $154.1 million, an increase of
1 per cent on pcp.
FOUR POWERFUL BRANDS
Our four core brands maintain leading positions in attractive and growing
lifestyle categories.
In FY20, Supercheap Auto, rebel and BCF recorded sales growth, with Macpac
recording a decline largely due to Australia’s summer bushfires and COVID-19
affecting Easter trading.
FY20 sales
($m)
Sales
growth
Like-for-like
sales growth
Online sales
growth
Supercheap Auto
rebel
BCF
Macpac
1,119.7
1,038.6
535.0
131.9
7.6%
3.3%(1)
4.0%
(5.0%)
6.3%
2.7%(1)
3.0%
(9.1%)
37%
49%
33%
83%
(1) Excluding Infinite Retail business which has been permanently discontinued. Total rebel sales growth
including Infinite Retail was 2.2%
ONLINE SALES MEETING CUSTOMER DEMAND
The channel shift to online accelerated dramatically in the second half of the past
year as COVID-19 restrictions prevented many customers from accessing our
stores.
Group online sales increased by 44 per cent to $291 million, representing 10 per
cent of Group sales. Click & Collect, which leverages the strength of our 697 stores,
represented 43 per cent of Group online sales.
In responding to coronavirus restrictions, the Group successfully re-
allocated store-based resources to supporting our online business,
rapidly introducing contact-free Click & Collect across all four brands
and replacing catalogue campaigns with digital advertising.
More than one million customers made their first online purchase
with the Group during the year.
OUR STRATEGY IS ON TRACK
Our corporate strategy helped guide the Group though this period.
The Group’s strategic focus remains on:
Growing the four core brands: focusing on our four core brands, key
categories and leveraging scale.
Leveraging closeness to our customer: building a personalised
relationship with our customers, leveraging data and insights.
Connecting our omni-retail supply chain: continuing to build a fit-for-
purpose integrated supply chain.
Simplifying the business: becoming a more efficient and effective
omni-retailer through optimising overheads and
focusing on
customer-facing investment
Excelling in omni-retail: enhancing our customer experience through
all touchpoints along the customer journey.
We are well positioned to benefit from consumer trends emerging
from the COVID-19 pandemic, including an even greater channel shift
to online, uptake in DIY auto repairs and household projects, increased
focus on personal health and wellbeing, and greater demand for
domestic travel and outdoor leisure activities.
CUSTOMER LOYALTY IS KEY
Our large, growing and loyal customer base continues to underpin our
performance and provides us with a competitive advantage.
We now have 6.6 million active club members across our four core
brands and, together, these club members contributed 59 per cent
of total sales.
The Group’s active membership base has grown almost five times
faster than store numbers over the past four years. Scalable growth is
critical to our success and our ability to expand the Group’s customer
base multiple times faster than our physical store network reinforces
our conviction in an omni-retail business strategy.
Pleasingly, during a period of accelerated online sales growth
characterised by concentrated demand for specific products,
customer satisfaction levels have improved with average club member
NPS increasing to 60.7.
AN ENGAGED AND CAPABLE TEAM
In such a challenging year, our capable and passionate team members
have been more important to the business than ever before. They
met every challenge thrown at them and thrived. On behalf of the
executive team, I offer my sincere gratitude for their dedication and
commitment. In recognition of their extraordinary efforts, the Group
made the decision to reward our permanent frontline team members
with a one-off payment of between $250 and $1,000.
To support team members in our stores, offices and distribution
centres, we implemented a sweeping series of measures to protect
our team from COVID-19. This included new protocols around
personal hygiene, physical distancing, incident responses, corporate
travel and enhanced facilities cleaning.
Our team member safety performance continues to improve. Our
focus on safety reporting, early intervention, incident investigations,
line accountability and initiatives such as the ‘back of house’ rest
program delivered improved injury rates. We achieved a Total
Recordable Injury Frequency Rate (TRIFR) of 10.58 in FY20, a 25 per
cent reduction on the previous year.
In February 2020, Super Retail Group was awarded the Workplace
Gender Equality Agency’s (WGEA) Employer of Choice for Gender
Equality citation. This is a significant achievement. We were the
first retail organisation to achieve this citation under the Agency’s
new criteria.
Acknowledgement from the WGEA is the culmination of sustained
commitment to a diverse and inclusive workforce and confirmation
of the progress we are making towards gender equality. We know the
task is far from complete however and continue to explore ways to
improve.
Female representation on our Board is at 38 per cent, 27 per cent
at the executive leadership level and 39 per cent for women in
senior leadership. A previously-set target of 40 per cent female
representation at Board and senior leadership levels by 2020 was
disappointingly missed, indicating where some of our priorities sit in
the period ahead.
We are also methodically resolving the underpayment issues identified
and proactively reported to the Fair Work Ombudsman. In FY20, 6,478
individual investigations were completed with $27 million, including
interest and superannuation, paid to 2,490 former and current team
members. As at the end of FY20, this brought the total amount paid
to $31.5 million, including interest and superannuation, to 3,458 team
members. We expect to conclude the remediation program, including
all relevant back payments, in FY21.
A SUSTAINABLE FUTURE
In FY20, we continued to make progress towards adopting a sustainable
approach to our business operations.
We completed energy efficiency upgrades for 62 stores and our
recycling rate increased by 2 per cent to 65 per cent.
Our brands continue to support our sustainability journey: SCA
recycled more than 1.3 million litres of oil and 79,000 car batteries
(returned to stores by customers); rebel started an in-store sports
shoe recycling initiative and continued to champion women’s sport;
BCF contributed $280,000 to OzFish with a further $250,000 raised by
customers; and Macpac completed their move to Fairtrade certified
cotton for its T-shirt production.
Super Retail Group has the right strategy in place to create long-
term value for our shareholders and a dedicated team committed to
ensuring continued success.
Despite ongoing challenges around COVID-19, the Group is in a strong
position to inspire our customers to live their passion, grow our
market share and create value for our shareholders.
Anthony Heraghty
Group Managing Director and
Chief Executive Officer
CEO’s
Message
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ABOUT US
13,000
TEAM MEMBERS
697
STORES
4
SUPPORT
OFFICES
7
Super Retail Group (ASX: SUL) is the proud owner of four iconic brands: Supercheap Auto, rebel, BCF
and Macpac, and is one of Australia and New Zealand’s largest retailers.
OUR VALUES
Our culture is underpinned by five values that guide the way we operate and behave.
Our powerful brands have established, leading positions in growing high-involvement lifestyle
categories of auto, sports and outdoor leisure. We provide our customers and highly engaged
6.6 million active loyalty club members with the option to experience our brands whenever
and however they choose – whether that’s through our network of 697 stores or via our digital
capabilities, which we continue to enhance.
OUR PURPOSE
OUR BRANDS
To inspire our customers to live their leisure passions – whether that’s proudly looking after their
car, running a marathon, catching a ‘barra’ or reaching a mountain summit.
CORPORATE GOVERNANCE
Super Retail Group is committed to sound corporate governance standards that protect and
enhance the long-term performance of the Group, taking into account the interests of our
stakeholders.
The Group has fully followed the recommendations of the ASX Corporate Governance
Council’s Principles and Recommendations (3rd Edition) throughout the reporting period.
Further details are set out in the Group’s Appendix 4G and Corporate Governance Statement,
authorised for issue by the Directors on 3 September 2020, which are available on the Australian
Securities Exchange (ASX) website at www.asx.com.au and the Group’s website at:
https://www.superretailgroup.com.au/investors-and-media/corporate-governance/
Supercheap Auto is Australia and New
Zealand’s largest specialty automotive
parts and accessories retail business.
We leverage our market leadership
to provide a wide range of tools and
accessories for the DIY home handyman,
as well as products for travel, touring,
outdoors, garage and the shed.
BCF is a leading outdoor retailer in the country,
with stores in every Australian state and territory.
With expert knowledge and service, we provide
everything you could possibly need for your next
boating, camping or fishing adventure, all under
the one roof.
DISTRIBUTION
CENTRES
ABOUT THIS REPORT
3
COUNTRIES OF
OPERATION
Australia, New Zealand and China
These financial statements are the consolidated financial statements of the consolidated entity
consisting of Super Retail Group Limited and its subsidiaries. The financial report is presented
in Australian dollars. Super Retail Group Limited is a company limited by shares, incorporated
and domiciled in Australia. Its principal registered office and principal place of business
is 6 Coulthards Avenue, Strathpine, Queensland, 4500. A description of the nature of the
consolidated entity’s operations and its principal activities is included in the Directors’ Report
and Remuneration Report on pages 30 to 78. The financial report was authorised for issue
by the Directors on 24 August 2020. The Directors have the power to amend and reissue the
financial report. Through the use of the internet, we have ensured that our corporate reporting
is timely, complete, and available globally at minimum cost to the Company. All press releases,
financial reports and other information are available on our Investors and Media page on our
website: https://www.superretailgroup.com.au/investors-and-media/
Macpac has designed apparel and equipment
that has inspired a life outdoors since 1973.
Designed, tested and proven in the ultimate
outdoor test lab – New Zealand – Macpac’s
wide range of products are made by
adventurers for adventurers.
rebel helps our customers dream big.
We are Australia’s leading sporting
goods specialist retailer, bringing the
best of global brands direct to our
customers. We inspire all Australians
to live their sporting passion, by
providing the right service, right
advice, right brands and right products
to help them ‘start right’ and chase
their dreams.
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PERFORMANCE
HIGHLIGHTS
CUSTOMER LOYALTY
AND OMNI-RETAIL
EXECUTION
ONLINE SALES GROWTH
SUPERCHEAP AUTO
SALES
$2.83b
GROUP SALES UP 4.2%
GROUP LFL
SALES GROWTH
3.6%
EARNINGS
PROFIT
$328.1m
SEGMENT EBITDA
UP 4.3%
$236.1m
SEGMENT EBIT
UP 3.5%
$154.1m
NORMALISED
NET PROFIT
AFTER TAX
BALANCE SHEET
DIVIDEND
EQUITY RAISING
COMPLETED IN JULY
$203m
PER SHARE,
FULLY FRANKED
19.5¢
44%TOTAL GROUP ONLINE SALES GROWTH %
NEW ONLINE
CUSTOMERS
CLICK & COLLECT
SALES GROWTH %
HOME DELIVERY
SALES GROWTH %
>1m
41%
46%
CUSTOMER LOYALTY
AVERAGE
CUSTOMER NPS
ACTIVE CLUB
MEMBERS
60.7
6.6m
ACTIVE CLUB
MEMBER % OF
GROUP SALES
59%
37%
REBEL
49%
BCF
33%
MACPAC
83%
CHANNEL
90% IN-STORE
SALES
HOME
DELIVERY
6%
CLICK &
COLLECT
4%
% OF TOTAL SALES
CLICK & COLLECT
% OF TOTAL
ONLINE SALES
HOME DELIVERY
% OF TOTAL
ONLINE SALES
43%
57%
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OUR STRATEGY
STRATEGIC DRIVERS
01
GROWING ANNUAL
CUSTOMER VALUE
BEING AN EFFICIENT
OMNI-RETAILER
ENSURING ORGANIC
GROWTH AND CAPITAL
DISCIPLINE
02
04
03
05
Image 1: Introduced Macpac range
in BCF stores
Image 2: Improving conversion with
Salesforce Einstein analytics and
personalised product experiences
Image 3: Distribution centre
optimisation, including rebel
consolidation and Macpac Australia
Image 4: Accelerated migration to
cloud-based solutions
Image 5: Digital investment enabled
significant online growth during the
height of COVID-19
Online sales to total sales
1H19
2H19
7.4%
7.6%
1H20
8.8%
2H20
11.9%
GROW THE FOUR CORE BRANDS: Focus on four core brands, key categories and
leveraging scale.
FOCUS AREAS
• Align capital investment to grow our four
core brands
• Develop organic brand strategies,
leveraging consolidated competitive
advantage
• Refresh private brand strategy
FY20 OUTCOMES
• New concept rebel Doncaster store
• Five-year organic brand strategies in train
• Relationships with global partners
strengthened
• Private brand review commenced
• Introduced Macpac range in BCF stores
LEVERAGE CLOSENESS TO OUR CUSTOMER: Building a personalised relationship with
our customers, capitalising on data and insights.
FOCUS AREAS
• Deepen understanding of the customer
through more sophisticated analytics and
insights
• Develop structured customer relationship
management (CRM) program to drive
visitation and transaction growth
• Align marketing, merchandising and
pricing strategies to customer
FY20 OUTCOMES
• Campaign activity that’s built from
customer behavioural analytics
and insights
• Investment in analytical insight and
customer strategy leadership
• Execution of pricing strategy delivering
positive results
CONNECTED OMNI-RETAIL SUPPLY CHAIN: Continuing to build a fit-for-purpose
integrated supply chain.
FOCUS AREAS
• Optimise Australian and New Zealand
distribution centre networks, planning
and product flows
• Orchestration of customer online orders
• Maximise benefits of group sourcing
capability
FY20 OUTCOMES
• Five-year supply chain strategy in train
• Order Management System (OMS), phase
one, implementation complete
• Overseas sourcing project implementation
in progress
SIMPLIFY THE BUSINESS: Becoming a more efficient and effective omni-retailer through
optimising overhead and focusing on customer-facing investment.
FOCUS AREAS
• Remove duplication and leverage scale
• KPI alignment and value mindset
• Modernise technology infrastructure to
be fit for purpose
FY20 OUTCOMES
• Workforce planning program commenced
• Senior Leadership Team KPIs aligned to
Group strategy
• Team engagement and communication
•
tools in place
Information Services’ five-year strategy
implementation commenced
• Closed Infinite Retail and Autocrew
EXCEL IN OMNI-RETAIL: Enhancing our customer experience through all touchpoints
along the customer journey.
FOCUS AREAS
• Build expertise for our customer-facing
FY20 OUTCOMES
• Improved conversion rates across all
teams, underpinned by team members as
industry experts
brands
• Introduced Click & Collect in all Macpac
• Deliver a seamless ‘Super Retailer’
Australian stores
experience
• Evolve the store experience
• Click & Collect rollout complete
across NZ; contact-free Click & Collect
implemented across all stand-alone
Australian stores
• Key range and assortment alignment to
customer need commenced
PRIMARY VALUE LEVERS
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2020 events:
testing the strength of
Super Retail Group
Our team from BCF Batemans Bay who
continued to serve their community at the
height of the bushfire crisis
$250,000
TO RED CROSS
UNLIMITED PAID LEAVE FOR
VOLUNTEER FIREFIGHTERS
$159,000
LOCAL FUNDRAISING
Two significant events
in 2020 tested
the strength of Super Retail Group. The
devastating summer bushfire season and
the global impact of the coronavirus brought
unique challenges and
required both
strategic and compassionate responses.
Against the ongoing backdrop of drought in
rural and regional Australia, these events
showed how our four core brands support
the communities in which they operate;
in both the good times as well as times of
greatest need.
They also
source of
reinforced our
advantage – engaged team, loyal customers
and powerful brands – as the features
underpinning the strength of our response
in crisis, as well as our ability to quickly
recover.
SUPPORTING THE COMMUNITIES IN
WHICH WE OPERATE
It was a tough start to the new year for
many Australians. Major bushfires resulted
in loss of life, property and razed millions
of hectares.
As an employer operating in many of those
fire-ravaged communities, we sought to
help our loyal customers, team members
and their communities.
Super Retail Group contributed $250,000 to
the Red Cross Disaster Relief and Recovery
program to help deal with the aftermath of
the summer’s disastrous bushfires.
In addition to the financial contribution,
we offered paid leave to our permanent
team members who were active volunteer
firefighters so they could continue their
efforts to contain the fires throughout the
summer. We will never be able to match
the generosity of spirit of the volunteer
firefighters in our team, but we wanted to
ensure they did not suffer financially for
battling the fires on our behalf.
Across our support offices and stores, a
further $159,000 was raised for the Red
Cross, WIRES, BlazeAid, Wildlife Victoria
and the NSW Rural Fire Service from local
fundraising activities and a point-of-sale
‘round up’ initiative.
thank
the firefighters,
Above all, we
Australian Defence
Force personnel,
Police, State Emergency Services and other
agencies that were involved in fighting the
fires. It was at the worst of times that we
saw the best in people.
NAVIGATING THE COVID-19 CRISIS
The impact of COVID-19 across the entire
retail industry was significant. As well as
having an impact on overall sales, COVID-19
has changed the way people shop.
Super Retail Group’s first response to the
crisis was anchored to three core principles:
to keep everyone safe; keep the business
running and keep people in jobs.
In New Zealand, we followed the directive
of the New Zealand government and closed
our Supercheap Auto and Macpac stores
during the nationwide lockdown.
In Australia, retail remained open and
we continued to trade in our Supercheap
Auto, rebel, BCF and Macpac Australian
stores.* We were able to remain open in
a way that protected the health and safety
of team members and customers, while
supporting the ongoing employment of
our people.
to
the
advice
adhered
We
and
recommendation of governments and
health authorities and embraced a number
of measures to achieve social distancing
and enhance safety,
installing
hand sanitisers at store entrances, health
screens at registers, limits on customer
numbers in stores and a contact-free Click
& Collect offer.
including
The essential nature of many of our products
meant demand for some categories was
significantly higher than the prior period.
At Supercheap Auto and BCF, for example,
in demand for
increase
there was an
self-sufficiency products
essential and
including portable gas and fuels, camping
stoves, batteries, refrigeration equipment
and generators.
At rebel, we saw heightened demand for
exercise and personal fitness products. With
more Australians turning to home workouts
and appreciating the link between physical
health and mental health, the increased
sales of weights and yoga and pilates
accessories and equipment was particularly
pronounced.
The traditional Easter long weekend was
anything but traditional, and our marketing
campaigns at the time quickly pivoted to
DIY car care at home, biggest backyard
campouts, at-home workouts and bringing
the outdoors in.
Online sales experienced strong growth,
both for home delivery and Click & Collect,
as customers looked to minimise people-
to-people contact to halt the spread of
the virus.
COVID-19 has challenged our traditional
assumptions and changed the retailing
landscape. The digitisation of retail has
always been expected, however COVID-19
has accelerated that change faster than
anyone anticipated. Super Retail Group’s
investment in our digital offer placed us in a
strong position to meet customer demand.
While the Group has weathered the initial
storm, and traded throughout, conditions
will continue to be challenging. As nations
move to a state of recovery, the ongoing
strength of our organisation lies in our ability
to meet demand and serve our customers
with a seamless omni-retail offer.
Contact-free Click & Collect and health screens to help
protect our team and customers in all our stores.
>1m
CUSTOMERS WHO
MADE THEIR FIRST
ONLINE PURCHASE
IN FY20
28,000
SEARCHES ON REBEL
WEBSITE IN APRIL FOR
“WEIGHTS”
20
STORE TEAM MEMBERS
UPSKILLED INTO OUR
CUSTOMER CONTACT
CENTRE
* Three stores in Tasmania
closed for several weeks due
to government restrictions.
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‘My Garage’:
helping car enthusiasts find
the right car parts
OUR
BRANDS
Supercheap Auto is Australia and New Zealand’s largest specialty automotive parts and accessories
retail business. We leverage our market leadership to bring a wide range of tools and accessories for
the DIY home handyman, as well as products for travel, touring, outdoors, garage and the shed.
STORES
326
BRAND AWARENESS
86%
Data: Stellar Market Research;
Australia FY20
AVERAGE ACTIVE
CLUB MEMBER NPS
63
SALES GROWTH YOY
EBIT MARGIN
ONLINE SALES GROWTH
7.6%
12.0%
37%
ACTIVE CLUB MEMBERS
ACTIVE CLUB MEMBERS
% OF TOTAL SALES
ACTIVE CLUB MEMBER
GROWTH YOY
1.71m
40%
4%
IN–STORE
% OF TOTAL SALES
CLICK & COLLECT
% OF TOTAL SALES
HOME DELIVERY
% OF TOTAL SALES
93%
5%
2%
technology
delivering
for our
a
At
Supercheap Auto,
personalised experience
loyal
1.71 million Club Plus members is critical.
Leveraging
car
enthusiasts shop for the right car parts and
accessories to suit their vehicle, with greater
confidence, is one way the Supercheap Auto
team is tailoring that shopping experience
for our customers.
to help
Recalling a specific car model can be a
challenge for many customers, however this
information is an essential first-step when
shopping for car parts.
To help solve this challenge, Supercheap
Auto launched ‘My Garage’, an online self-
service and in-store technology solution
that allows customers to save the details of
five vehicles to their Club Plus membership
or Trade account and search a database
of 39,000 vehicles for specific parts and
accessories.
The process integrates into a seamless
shopping experience by allowing customers
shopping online to quickly identify their car
model through their vehicle registration
number. Once they have entered their
registration number into My Garage, a large
range of car parts and accessories specific to
their car model is displayed.
To access the information in store, our team
scans the customer’s Club Plus membership
card (or finds their membership via their
phone number or email), which brings
up the vehicles saved in their garage. Our
store team can then help members find the
right parts and accessories specific to their
car model.
Having this technology capability both
online and in store enables us to better
support customer needs, provides expert
advice on the right products for the vehicles
and ensures customers
leave with the
products they need.
have
searches
Since launching My Garage, the details
of more than 550,000 vehicles have
been stored and more than 4.8 million
registration
been
conducted. In turn, this improves conversion
twice as
(customers are more
likely to purchase a product if using the
My Garage registration search) and improves
the shopping experience by reducing the
likelihood of the customer having to return
for an alternative product.
than
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Creating a new
shopping experience
with rebel Doncaster
OUR
BRANDS
rebel helps our customers dream big. We are Australia’s leading sporting goods specialist retailer,
bringing the best of global brands direct to our customers. We inspire all Australians to live their
sporting passion, by providing the right service, right advice, right brands and right products to help
them start right and chase their dreams.
STORES
160
BRAND AWARENESS
93%
Data: Stellar Market Research;
Australia FY20
AVERAGE ACTIVE
CLUB MEMBER NPS
55
SALES GROWTH YOY
EBIT MARGIN
ONLINE SALES GROWTH
3.3%
Excludes Infinite Retail business which
has been permanently discontinued
9.3%
49%
ACTIVE CLUB MEMBERS
ACTIVE CLUB MEMBERS
% OF TOTAL SALES
ACTIVE CLUB MEMBER
GROWTH YOY
2.88m
66%
12%
IN–STORE
% OF TOTAL SALES
CLICK & COLLECT
% OF TOTAL SALES
HOME DELIVERY
% OF TOTAL SALES
86%
4%
10%
With a footprint of more than 1,700
square metres, rebel customers can be
the first to check out the latest in limited
edition or exclusive products as well as an
expanded range of men’s, women’s and
kids’ performance and lifestyle apparel and
footwear. Sports fanatics can touch, feel
and try the product before they buy, shoot
hoops on the mini basketball court and play
a game of soccer in the FIFA games room.
Our team of rebel experts are dedicated
to delivering the best customer experience
and providing great advice by relaying their
own passion for sports, with a major focus
on running, football, basketball and training.
The store’s design concept was developed
in partnership with Nike and in conjunction
with a number of other key trade partners
including adidas, Under Armour, Speedo,
Garmin and Icon.
just before COVID-19
Despite opening
restrictions were
introduced, the store
has performed exceptionally well with
NPS up 21 points in comparison to the
previous year and the ‘average transaction
value’ increasing 20 per cent after the
refurbishment. This success shows the
importance of providing a personalised
shopping experience and has established a
proof-of-concept for future investment.
The rebel team are all about inspiring
Australians to chase their sporting dreams
and passions. The opening of the first
rebel Customer Experience (rCX) store
in Doncaster in March 2020, providing
a personalised and seamless shopping
experience, is one way the team is bringing
that commitment to life.
rCX Doncaster
is rebel’s first Customer
Experience store to roll out as part of
the team’s strategy to improve the omni
the store network
experience across
and provide multiple dimensions to the
customer’s shopping journey. The store is
purpose-built with a new design inspiring
sport and performance. It offers more
storytelling and engaging experiences,
exclusive products and a team of rebel
experts to help customers every step of
the way.
The store’s design is informed by extensive
customer and trade partner research,
including consumer surveys, best practice
trends and
industry research on the
evolution of retail and the need to create
meaningful, in-store experiences.
It also leverages the power of the Super
Retail Group network by utilising insights
successful
from
Customer Experience store in Penrith, NSW.
Supercheap
Auto’s
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Australia’s biggest
backyard campout
OUR
BRANDS
BCF is a leading outdoor retailer in the country, with stores in every Australian state and territory. With
expert knowledge and service, we provide everything you could possibly need for your next boating,
camping or fishing adventure, all under the one roof.
STORES
139
BRAND AWARENESS
76%
Data: Stellar Market Research;
Australia FY20
AVERAGE ACTIVE
CLUB MEMBER NPS
64
SALES GROWTH YOY
EBIT MARGIN
ONLINE SALES GROWTH
4.0%
2.9%
33%
ACTIVE CLUB MEMBERS
ACTIVE CLUB MEMBERS
% OF TOTAL SALES
ACTIVE CLUB MEMBER
GROWTH YOY
1.54m
83%
6%
IN–STORE
% OF TOTAL SALES
CLICK & COLLECT
% OF TOTAL SALES
HOME DELIVERY
% OF TOTAL SALES
91%
6%
3%
The traditional Easter holiday for many Australians was a different experience in 2020.
With significant lockdown restrictions in place across the country, the true ingenuity and
spirit of the nation created a great opportunity for BCF to bring Australians together in a
different way.
Instead of travelling, families across the country headed to their backyards with their
camping gear, inspired by BCF’s biggest backyard campout.
Over a traditional Easter weekend, BCF customers would ordinarily invest in fridges, tents,
chairs, showers and fire pits and travel to national parks, beaches and caravan sites. Despite
having limited travel options over the Easter period, the BCF team didn’t want to see our
customers’ passion for the outdoors go to waste.
To capture the camping experience at home, the idea to set up a campsite in
the backyard or lay out the swags below the balcony for a night under the stars quickly
grew traction.
Australians were encouraged to capture the fun and win prizes by sharing their creative
backyard camping setups using the hashtag #BCFbackyard on social media. The campaign
created extremely high engagement with extensive national, metropolitan and regional
media stories, 4,000-plus entries to #BCFbackyard and a Facebook event page that was
joined by more than 889,000 people. Online traffic increased by 30 per cent and the social
media campaign reached more than three million Australians.
In addition to the high engagement from team members and customers, NPS over the
Easter period increased seven per cent when compared to the LFL period for the previous
year, in what was an otherwise challenging time.
Australia’s biggest backyard campout brought people together as a community. It highlighted
the importance of family, personal wellbeing and making the most of what we have, at a
time when Australia needed it most.
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Macpac’s commitment
to Fairtrade organic cotton
OUR
BRANDS
Macpac has designed apparel and equipment that has inspired a life outdoors since 1973. Designed,
tested and proven in the ultimate outdoor test lab – New Zealand – Macpac’s wide range of products
are made by adventurers for adventurers.
STORES
72
BRAND AWARENESS
82%
Data: Stellar Market Research;
Australia FY20
AVERAGE ACTIVE
CLUB MEMBER NPS
67
SALES GROWTH YOY
EBIT MARGIN
ONLINE SALES GROWTH
-5.0%
5.5%
83%
ACTIVE CLUB MEMBERS
ACTIVE CLUB MEMBERS
% OF TOTAL SALES
ACTIVE CLUB MEMBER
GROWTH YOY
0.45m
64%
10%
IN–STORE
% OF TOTAL SALES
CLICK & COLLECT
% OF TOTAL SALES
HOME DELIVERY
% OF TOTAL SALES
83%
1%
16%
It’s been more than a decade since Macpac switched to organic cotton in their Australian-
made Aztec® backpack canvas, providing the catalyst for an ongoing journey. Macpac made
a commitment in 2017 to use only organic cotton in its T-shirt and hoody range, which
represents more than 95 per cent of the brand’s cotton usage.
In 2019, Macpac partnered with Fairtrade Australia to enhance the transparency and social
responsibility in its cotton value chain.
Under Fairtrade’s oversight, cotton growers are guaranteed a minimum price for what
they farm, helping establish financial security and making them less vulnerable to poverty.
Additionally, Fairtrade encourages producers to prioritise community projects that are
important to them, such as education or healthcare for their children, improving their
businesses or building vital infrastructure such as roads and bridges.
As consumer knowledge of the Fairtrade label grows, the success of Macpac’s Fairtrade
organic cotton is evident. In 2019, Macpac purchased 6,600 kg of Fairtrade organic cotton
for their T-shirts. With the transition to Fairtrade cotton complete, and in order to meet
growing demand in 2020, this purchase was increased to more than 31,000 kg.
Macpac’s manufacturing Trade Partner has achieved ‘carbon neutrality’ under the United
Nations ‘Climate Neutral Now’ program and was awarded the ‘Carbon Neutral Gold
Standard’ by One Carbon World. Both of Macpac’s Yarn Spinning Trade Partners are certified
to the Oeko-Tex Standard 100® for responsible chemicals management. In addition, one
partner reports annually to the Sustainable Apparel Coalition’s Higg Index® on their
environmental and social impact.
From 2020, Macpac’s Fairtrade organic cotton range will also be shipped with landfill
biodegradable polybags that have 30 per cent recycled content.
As part of Macpac’s commitment to driving transparency in the cotton supply chain, the team
is a signatory to the Responsible Sourcing Network’s (RSN) Uzbekistan and Turkmenistan
Cotton Pledges to end slavery. This Responsible Sourcing Code prohibits sourcing from
Uzbekistan, Turkmenistan and the Xinjiang region of China.
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BOARD OF
DIRECTORS
SALLY PITKIN
Independent
Non-Executive Chair
ANTHONY HERAGHTY
Group Managing Director
and Chief Executive Officer
REG ROWE
Non-Executive Director
DIANA EILERT
Independent
Non-Executive Director
HOWARD MOWLEM
Independent
Non-Executive Director
PETER EVERINGHAM
Independent
Non-Executive Director
ANNABELLE CHAPLAIN AM
Independent
Non-Executive Director
GARY DUNNE
Independent
Non-Executive Director
Appointed
Chair – 23 October 2017
Board – 1 July 2010
Committees
Chair of the Nomination
Committee, Member (ex-officio)
of the Human Resources and
Remuneration Committee
Experience
Other Roles
Sally has more than 20 years’
experience as a Non-Executive
Director in the listed, private,
public and non-profit sectors,
including experience in
international markets, and more
than 15 years’ experience as a
non-executive director of ASX200
companies. Sally served as an
Independent Non-Executive
Director for Super Retail Group
(1 July 2010 – 23 Oct 2017) prior
to her appointment as Chair
and is an ex-officio member
of the Human Resources and
Remuneration Committee. She is
a lawyer and former partner of
a national law firm with banking
law, corporate law and corporate
governance expertise. Sally
holds a Doctor of Philosophy
(Governance), a Master of Laws
and Bachelor of Laws.
Director of ASX listed companies
The Star Entertainment Group
Limited and Link Administration
Holdings Limited, Fellow of the
Australian Institute of Company
Directors and Chair of the
Institute’s Corporate Governance
Committee.
20 February 2019
8 April 2004
21 October 2015
13 June 2017
19 December 2017
31 March 2020
31 March 2020
Member of the Nomination
Committee
Chair of the Human Resources
and Remuneration Committee
Chair of the Audit and Risk
Committee, Member of
the Human Resources and
Remuneration Committee
Member of the Audit and Risk
Committee, Human Resources
and Remuneration Committee
and Nomination Committee
Member of the Audit and
Risk Committee
Member of the Audit and
Risk Committee
Anthony has more than 20 years’
leadership experience across
the retail, apparel, FMCG and
marketing services industries.
Prior to his appointment as
Group Managing Director and
Chief Executive Officer, Anthony
was Managing Director – Outdoor
Retailing (2015 – 2019) where he
was responsible for the BCF, Rays
and Macpac businesses. Anthony
has served in a variety of senior
roles including Group General
Manager of Underwear for Pacific
Brands Limited, where he led the
overhaul of the Bonds business
from a wholesale operation to an
omni-retailer, Global Marketing
Director for Foster’s Group
Limited and Managing Director
for George Patterson and
McCann Erickson.
Reg and Hazel Rowe founded
an automotive accessories mail
order business in 1972, which
they ran from their Queensland
home. In 1974 they commenced
retail operations of the business
that evolved into the thriving
specialty retail business –
Supercheap Auto.
Reg served as Managing
Director until 1996 and then
Chairman from 1996 to 2004.
Prior to this, Reg had 13 years’
experience in various retail
and merchandise roles at Myer
department stores.
Reg brings to the Board
extensive retail industry
and general management
expertise and skills in retail
and merchandise operations,
property and strategy.
Director of a number of private
family companies.
Independent Non-Executive
Director of Domain Holdings
Australia Limited and Elders
Limited. Member (part-time)
of the Australian Competition
Tribunal and Member of the
Advisory Group for AT Kearney.
Howard is experienced in many
segments of the Australian and
international retail industry and
brings extensive experience
in corporate finance, mergers
and acquisitions, financial
reporting, treasury, tax, audit and
governance. From 2001 – 2010,
he was Chief Financial Officer
and board member of Dairy
Farm International Holdings,
a Hong Kong-based pan-Asian
retailer. Prior to that, he held
the position of Finance Director
for Coles Supermarkets for 12
years. Howard was formerly
a Non-Executive Director of
Billabong International Ltd. He
holds a Bachelor of Economics
(Hons), a Master of Business
Administration and Securities
Industry Diploma, and is a Fellow
of CPA Australia.
Peter is an experienced executive
with more than 25 years’
corporate experience, including 18
years in senior executive roles in
the digital sector. He was formerly
Managing Director of SEEK
Limited’s International Division,
and served as a Non-Executive
Director of the education
businesses, IDP Education, Online
Education Services and THINK
Education, as well as Chairman of
Seek’s China subsidiary, Zhaopin
Limited. His previous executive
roles include Director of Strategy
for Yahoo! in Australia and
Southeast Asia. Peter holds a
Master of Business Administration
from IESE, a Bachelor of
Economics from The University of
Sydney, and is a graduate member
of the Australian Institute of
Company Directors.
Annabelle brings broad-ranging
experience in financial services,
industrial and infrastructure
services. Previously, Annabelle
was a director of Downer EDI
Ltd, Credible Labs Inc and EFIC
(Australia’s export credit agency).
Annabelle holds an MBA
(University of Melbourne), a
BA majoring in Economics and
Mandarin (Griffith University),
a diploma from the Securities
Institute of Australia and is a
Fellow of the Australian Institute
of Company Directors. In 2016,
Griffith University conferred on
her an honorary doctorate for
her service to banking, finance
and the community.
Gary has deep retail sector
experience with extensive careers
at Woolworths, Coles, and ALDI.
He has executive experience with
private equity, and, most recently,
held the Chief Operations role
at Sigma Healthcare. Gary was
formerly Chair of NostraData (a
market- leading pharmacy data
provider) and a former director of
National Pharmaceutical Services
Australia and Members Benefits
Australia. He holds a Graduate
Certificate of Management from
Adelaide University, Master of
Enterprise from Melbourne
University and is a graduate of the
Advanced Management Program
from Harvard Business School in
Boston. Gary is a recipient of the
Joe Berry Memorial Award.
Non-Executive Director of ME
Bank, iCar Asia Limited and
Member of the WWF-Australia,
Australia’s largest conservation
organisation.
Chair of Canstar Pty Ltd and MFF
Capital Investments Limited,
Director of Seven Group Holdings
Ltd and Member of the Australian
Ballet board of directors.
Member of the Australian
Institute of Company Directors.
Leisure Passion
Bush walking and skiing
Fishing, camping, hiking, cycling,
running and cars
Enjoying time with family, walking
and gardening
Skiing, cycling, hiking, swimming
and jazz
Golf
Hiking, travel and reading
Diana is an experienced Non-Executive Director with strong strategic and operational experience. As a former Suncorp Group executive and as a CEO, she has broad experience running large businesses. Combined with her Strategy Partner and executive experience, Diana brings to the Board particular skills in strategy, with an emphasis on customer and data, technology, digital disruption and business models. Diana’s non-executive focus is mid-cap companies, with previous board roles including realestate.com, Veda and Navitas. Diana holds a Bachelor of Science (Pure Mathematics) (University of Sydney) and a Master of Commerce (UNSW).Golf, AFL and walkingOcean swimming 26 S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
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EXECUTIVE
LEADERSHIP
TEAM
PAUL BRADSHAW
Managing Director –
BCF
ALEX BRANDON
Chief Executive Officer –
Macpac
DAVID BURNS
Chief Financial Officer
REBECCA FARRELL
Chief Legal Officer and
Company Secretary
PAUL HAYES
Chief Information Officer
Paul joined Super Retail Group in
December 2019 as Managing Director
for BCF and brings deep retail expertise
from more than 30 years in executive
and management leadership roles at
successful retailers in both Australia and
internationally. After working in various
managerial roles at Safeway in the
United Kingdom, Paul joined ASDA Stores
working in regional and headquarters
planning and strategy positions. Paul
worked for nearly a decade with the
Coles Group, holding a number of
leadership positions including Group
General Manager, Store Development
and Chief Store Operations Officer where
he was responsible for creating and
driving the operations strategy.
Alex was appointed as Macpac’s Chief
Executive Officer in July 2012 and
continues to serve in this role after
Super Retail Group acquired the outdoor
adventure specialist retailer in April 2018.
Originally from England, Alex holds a
Bachelor of Economics and Marketing
degree from the London Guildhall
University. Alex has more than 20 years’
of retailing experience across the US,
Australia and New Zealand with companies
including Bath and Body Works, Express,
Surf Dive ‘n’ Ski, Rip Curl and Just Kids. He
is based in Christchurch, New Zealand.
David joined Super Retail Group in
December 2012 in the role of Chief
Financial Officer. David has overall
responsibility for the finance, investor
relations, and property and store
improvement portfolios. David holds a
degree in Economics from the University
of Sydney and is a FCPA. He has more
than 30 years of finance experience
in a number of industry sectors, and
previously held senior management
positions at Qantas, Spotless and
Lend Lease.
Rebecca joined Super Retail Group in
February 2020 as Chief Legal Officer and
Company Secretary, and is responsible
for leading our legal, risk, compliance
and group secretariat functions. She has
extensive executive experience in legal
and corporate governance, gained through
roles in top tier law firms and blue chip
corporates throughout the US, Europe,
Asia and Australia including IAG, Amcor
and Westpac. Rebecca holds a Bachelor
of Laws (first class honours) from Monash
University and a Bachelor of Arts.
Since joining Super Retail Group in
December 2015 as Chief Information
Officer, Paul has focused on the digital
transformation of the Group’s technology
capability. He has implemented innovative
and cost-effective technologies that
drive real business value and support the
Group’s continued growth to be a leading
omni-retailer. Paul has an extensive
retailing background that include Head of
Information Systems Delivery at UK retailer
John Lewis, IBM managing consultant
positions leading projects for premier
retailers including Tesco, Argos and
Woolworths and a variety of other roles
including Head of Merchandising at British
Home Stores.
JANE KELLY
Chief Human
Resources Officer
KATIE McNAMARA
Chief Strategy and
Customer Officer
BENJAMIN WARD
Managing Director –
Supercheap Auto
DARREN WEDDING
Chief Supply Chain Officer
GARY WILLIAMS
Managing Director –
rebel
Jane joined Super Retail Group in July 2016
as Chief Human Resources Officer and is
responsible for advancing Super Retail
Group’s strong focus on team engagement,
culture and capability development. Jane is
also responsible for the Group’s corporate
affairs function. She holds a Master of
Commerce and Employee Relations with
Honours from the University of Melbourne
and a Bachelor of Commerce from the
University of New South Wales. Jane was
previously the Human Resources and
Corporate Affairs Director at BT Financial
Group and also held senior roles as Head
of Reward for St. George Bank and Head
of Human Resources - Australian Financial
Services at Westpac.
Katie joined Super Retail Group in April
2019 as Chief Strategy and Customer
Officer, where she has responsibility
for corporate strategy integration and
execution, analytics, marketing and
customer strategy. Katie holds a Bachelor
of Pharmacy degree and a Master of
Business Administration from Melbourne
Business School and Cornell University.
She has completed executive programs
in Digital Marketing at INSEAD and both
Digital Transformation and Marketing at
Harvard Business School. Katie brings
more than 20 years’ experience in top-tier
consulting, retail and FMCG businesses.
She was previously Vice President Asia-
Pacific for IBM, leading Digital Strategy
and iX.
Benjamin joined Super Retail Group in July
2019 as Managing Director – Supercheap
Auto. Benjamin holds a Bachelor of
Business (Marketing) from the University
of Newcastle, and is an experienced retail
executive with almost 25 years in senior
management roles across Australia, UK,
US and Europe, including two decades
with international supermarket giant ALDI.
Previously, he was Managing Director,
Global Business Coordination for ALDI
Supermarkets based in Germany. Benjamin
also held various senior leadership roles
at ALDI in Operations, Merchandising,
Transformation and Change Management.
Darren joined Super Retail Group in
January 2019 as Chief Supply Chain
Officer. Darren has more than 30
years’ experience in supply chain and
logistics having served in a broad array
of industries including military, steel
manufacturing, FMCG, retail and third
party logistics, with nine of his past
eleven years based in Asia. Darren holds
a Bachelor of Business Degree, Graduate
Diploma of Business and a Master
of Business Administration from the
University of Southern Queensland. Prior
to joining Super Retail Group, Darren
worked in a regional operations role
for Zuellig Pharma serving their Asian
operations.
Gary joined Super Retail Group in April
2019 as Managing Director – rebel. Gary
has more than 30 years’ of global retail,
brand and property experience, including
senior executive roles in Australia - where
he has served for the past 20 years – the
US, UK, Asia Pacific and South Africa.
Previously Gary was the Chief Operating
Officer for the Alceon Retail Group and has
also held executive, board and senior retail
leadership roles with brands including
David Jones/Country Road Group, Myer,
OK Bazaars, Puma, Reebok, Coca-Cola,
Westfield and Topshop.
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OUR TEAM
70%
TEAM MEMBER
ENGAGEMENT
48%
FEMALE
PARTICIPATION
39%
WOMEN IN SENIOR
LEADERSHIP
35%
WOMEN IN
LEADERSHIP
At Super Retail Group, everything starts
with our team. Having healthy, happy,
capable and passionate team members is
essential to providing inspiring solutions
and experiences for our customers.
CONTINUED FOCUS ON LEARNING
AND DEVELOPMENT
A commitment to the ongoing learning
and development of our team is critical
to our success and sustainability as
an organisation.
invest
We provide a number of development
programs that
in the skills and
knowledge of our team members. This
investment helps our team meet and
anticipate the needs of our customers and
unlocks their potential for a rewarding and
valuable career.
One offer for our retail team members
is a partnership with registered training
accredited
organisations
learning programs, allowing our retail team
members to obtain nationally-recognised,
relevant qualifications.
facilitate
to
Over the last three years, this program has
paved the way for retail team members to
pursue a successful career in retail, with
approximately 20 per cent progressing to
more senior positions within the Group.
Within our Australian program, we are proud
to have grown the program to just over 320
retail team members currently completing
either a Certificate III in Retail Operations
or a Certificate IV in Retail Management.
In FY20, 108 team members successfully
completed the training program and gained
their qualification.
launched
the opportunity
In February 2019 we
the
Accredited Learning NZ program, offering
our New Zealand Store and Assistant
Store Managers
to
enrol in a Level Four Retail Management
qualification. Partnering with the industry
leader in retail training, Service IQ, this
qualification provides competency-based
learning, mentorship and coaching to
develop valuable and lasting skills. During
FY20, 30 managers successfully completed
this program.
Also launched in February 2019, our school-
based trainee program continues to roll out
across the retail stores, providing students
aged 16 years or older with valuable
industry skills while they complete their
secondary school qualifications.
There are six school-based trainees in the
current program, further enabling the stores
to connect with their local community and
inspire the next generation of retailers.
in
late FY19 we
To support the ongoing development of
our team,
launched
voluntary, on-demand, bite-sized and
mobile accessible learning. This program
allows the entire Super Retail Group team
to
improve their skills and knowledge
when, where and how it suits them. In FY20
there have been more than 7,000 hours
spent learning with more than 30 per cent
of our team ‘opting-in’ to this additional
development.
COMMITTED TO HEALTH
AND SAFETY
We are committed to the physical and
psychological health and safety of our
customers, team members, contractors,
business partners and communities. We
care about health, safety and wellbeing and
treat it seriously.
initiatives
Our
focus on safety reporting, early
intervention, incident investigations, line
accountability and
including
a
‘back of house’ program, delivered
improved injury rates. We achieved a Total
Recordable Injury Frequency Rate (TRIFR)
of 10.58 in FY20, a 25 per cent reduction
on the previous year. We also recorded a
Lost Time Injury Frequency Rate (LTIFR)
of 5.4, a 27 per cent improvement on the
previous year.
As a result of data maturity, the FY19 TRIFR
changed from 14.34 to 14.07 and the FY18
TRIFR adjusted from 15.95 to 15.86. The
LTIFR changed from 7.36 to 7.38 in FY19 and
from 6.52 to 6.57 in FY18.
safe
during
partners
An ongoing health and safety
focus
is keeping our teams, customers and
business
the
coronavirus pandemic. We implemented
measures relating to personal hygiene,
social distancing (provided health screens),
enhanced cleaning, mental wellbeing,
remote working, restricted travel and
incident response procedures.
Our response to the COVID-19 crisis has
been informed by the relevant government
and health authorities, as well as through
our partnership with International SOS.
FY20, we
In
our
also
LPG decanting processes and piloted
Move4Life, a manual handling training
program in our distribution centres.
improved
In addition to managing the ongoing
COVID-19 crisis, a key focus for FY21 will
be on
leadership development, mental
health, customer abuse, health and safety
management systems, governance and
analytics.
RECOGNISED FOR GENDER
EQUALITY
In February 2020, Super Retail Group was
awarded the Workplace Gender Equality
Agency’s (WGEA) Employer of Choice for
Gender Equality citation. We were the first
retail organisation to achieve this citation
under the agency’s new criteria.
Acknowledgement from the WGEA is the
culmination of sustained commitment
over many years to a diverse and inclusive
workforce and confirmation of the progress
we are making towards gender equality.
Female representation on our Board is at
38 per cent, 27 per cent at the executive
leadership level and 39 per cent for women
in senior leadership. A previously-set target
of 40 per cent female representation at
Board and senior leadership levels by 2020
was disappointingly missed.
We still have a way to go on our journey,
but Super Retail Group is committed to
achieving gender equality in our Board,
executive and senior
leadership teams
within three to five years. Super Retail
Group’s 2020 Workplace Gender Equality
is available at:
Agency WGEA report
https://www.wgea.gov.au
10.58
TRIFR - 137 INCIDENTS
PER MILLION HOURS
WORKED
down 25% YOY
83%
TEAM RETENTION
12,994
AVG TEAM MEMBER
RECOGNITIONS
PER MONTH
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2019 – 2020
Directors’ Report
Remuneration Report
Financial Report
F O R T H E Y E A R E N D E D 2 7 J U N E 2 0 2 0
Super Retail Group Limited
ABN: 81 108 676 204
ASX Code: SUL
DIRECTORS’ REPORT
The Directors present their report together with the consolidated financial statements of the Group comprising Super Retail Group
Limited (SUL) (the Company) and its subsidiaries for the period ended 27 June 2020.
1.
The Directors of the Company at any time during or since the end of the period, up to the date of this report are:
Directors
Directors:
S A Pitkin
(Independent Non-Executive Chair)
A M Heraghty
(Group Managing Director and Chief Executive Officer)
R A Rowe
(Non-Executive Director)
D J Eilert
(Independent Non-Executive)
H L Mowlem
(Independent Non-Executive)
P D Everingham
(Independent Non-Executive)
S A Chaplain
(Independent Non-Executive) (appointed 31 March 2020)
G T Dunne
(Independent Non-Executive) (appointed 31 March 2020)
Former:
L K Inman
(Independent Non-Executive) (retired 22 October 2019)
Details of the qualifications, experience and responsibilities of the Directors can be found in the Group’s annual report.
Special Responsibilities of Directors:
Director
S A Pitkin
A M Heraghty
R A Rowe
D J Eilert
H L Mowlem
P D Everingham
S A Chaplain
G T Dunne
L K Inman
Audit & Risk Committee
Nomination Committee
n/a
n/a
n/a
(4)
(1)
(3)
(3)
n/a
(1)
(2)
(2)
(4)
n/a
n/a
(2)
(1) Denotes Chair of Committee.
(2) Ceased as a member on 22 July 2019.
(3) Appointed as a member on 1 July 2020.
(4) Ceased as a member on 1 July 2020.
(5) Appointed as Chair on 22 October 2019.
(6) Ceased as Chair on 22 October 2019.
1.1
Directorships of listed companies held by members of the Board
Human Resources &
Remuneration Committee
Member (Ex-Officio)
n/a
n/a
(1)(5)
(3)
n/a
n/a
(6)
Current Directors:
Director
S A Pitkin
Listed Company
Directorship
Key Dates
Super Retail Group
Limited
The Star Entertainment
Group Limited
Link Administration
Holdings Limited
Former directorships:
Independent Non-Executive Chair
Independent Non-Executive Director
Current, appointed 01 July 2010
Appointed as Chair 23 October 2017
Current, appointed 31 July 2014
Independent Non-Executive Director
Current, appointed 23 September
2015
IPH Limited
Independent Non-Executive Director
Former, appointed 23 September
2014 and ceased 20 November 2017
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DIRECTORS’ REPORT (continued)
1.
1.
1.1
1.1
Directors (continued)
Directors (continued)
Directorships of listed companies held by members of the Board (continued)
Directorships of listed companies held by members of the Board (continued)
Current Directors:
Current Directors:
Director
Director
Listed Company
Listed Company
Directorship
Directorship
Key Dates
Key Dates
A M Heraghty
A M Heraghty
Super Retail Group
Super Retail Group
Limited
Limited
Group Managing Director and Chief
Group Managing Director and Chief
Executive Officer
Executive Officer
Current, appointed 20 February 2019
Current, appointed 20 February 2019
R A Rowe
R A Rowe
D J Eilert
D J Eilert
Super Retail Group
Super Retail Group
Limited
Limited
Super Retail Group
Super Retail Group
Limited
Limited
Elders Limited
Elders Limited
Domain Holdings
Domain Holdings
Australia Limited
Australia Limited
Former directorships:
Former directorships:
Non-Executive Director
Non-Executive Director
Current, appointed 08 April 2004
Current, appointed 08 April 2004
Independent Non-Executive Director
Independent Non-Executive Director
Current, appointed 21 October 2015
Current, appointed 21 October 2015
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Current appointed 14 November 2017
Current appointed 14 November 2017
Current appointed 16 November 2017
Current appointed 16 November 2017
Navitas Limited
Navitas Limited
Independent Non-Executive Director
Independent Non-Executive Director
Former, appointed 28 July 2014 and
Former, appointed 28 July 2014 and
delisted 5 July 2019
delisted 5 July 2019
Super Retail Group
Super Retail Group
Limited
Limited
Former directorships:
Former directorships:
Billabong International
Billabong International
Limited
Limited
Super Retail Group
Super Retail Group
Limited
Limited
iCar Asia Limited
iCar Asia Limited
Super Retail Group
Super Retail Group
Limited
Limited
MFF Capital
MFF Capital
Investments Limited
Investments Limited
Seven Group Holdings
Seven Group Holdings
Limited
Limited
Super Retail Group
Super Retail Group
Limited
Limited
H L Mowlem
H L Mowlem
P D Everingham
P D Everingham
S A Chaplain
S A Chaplain
G T Dunne
G T Dunne
Former Director:
Former Director:
Independent Non-Executive Director Current, appointed 13 June 2017
Independent Non-Executive Director Current, appointed 13 June 2017
Independent Non-Executive Director
Independent Non-Executive Director
Former, appointed 24 October 2012
Former, appointed 24 October 2012
and delisted 26 April 2018
and delisted 26 April 2018
Independent Non-Executive Director
Independent Non-Executive Director
Current, appointed 19 December 2017
Current, appointed 19 December 2017
Independent Non-Executive Director
Independent Non-Executive Director
Current, appointed 1 July 2017
Current, appointed 1 July 2017
Independent Non-Executive Director
Independent Non-Executive Director
Current, appointed 31 March 2020
Current, appointed 31 March 2020
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Current, appointed 21 May 2019 (Chair
Current, appointed 21 May 2019 (Chair
from 1 August 2019)
from 1 August 2019)
Current, appointed 24 November 2015
Current, appointed 24 November 2015
Independent Non-Executive Director
Independent Non-Executive Director
Current, appointed 31 March 2020
Current, appointed 31 March 2020
Director
Director
Listed Company
Listed Company
Directorship
Directorship
Key Dates
Key Dates
L K Inman
L K Inman
Precinct Properties
Precinct Properties
New Zealand Limited
New Zealand Limited
The PAS Group Limited
The PAS Group Limited
Former directorships:
Former directorships:
Super Retail Group
Super Retail Group
Limited
Limited
Commonwealth Bank
Commonwealth Bank
of Australia
of Australia
Bellamy’s Australia
Bellamy’s Australia
Limited
Limited
Jaxsta Limited
Jaxsta Limited
Independent Non-Executive Director
Independent Non-Executive Director
Current, appointed 28 October 2015
Current, appointed 28 October 2015
Independent Non-Executive Chair
Independent Non-Executive Chair
Current, appointed Chair on 1
Current, appointed Chair on 1
February 2020
February 2020
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Former, appointed 21 October 2015
Former, appointed 21 October 2015
and ceased 22 October 2019
and ceased 22 October 2019
Former, appointed 16 March 2011 and
Former, appointed 16 March 2011 and
ceased 16 November 2017
ceased 16 November 2017
Former, appointed 15 February 2015
Former, appointed 15 February 2015
and ceased 28 February 2017
and ceased 28 February 2017
Former, appointed 28 December 2018
Former, appointed 28 December 2018
and ceased 28 February 2019
and ceased 28 February 2019
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DIRECTORS’ REPORT (continued)
1.
1.2
Directors (continued)
Directors’ Meetings
All Directors may attend Board Committee meetings even if they are not a member of the relevant Committee. The number of
meetings of the Company’s Board of Directors and each Board Committee held during the period ended 27 June 2020 is set out
below:
Board Meetings
Audit and Risk
Nomination
Human Resources and
Remuneration
Meetings of Committees
20
4
2
4
Attended
Eligible(1)
Attended
Eligible (1)
Attended
Eligible(1)
Attended
Eligible(1)
20
20
19
20
20
20
8
8
4
20
20
20
20
20
20
8
8
4
4
4
4
4
4
4
-
1
1
-
-
-
4
4
4
-
-
-
2
1
2
1
2
2
-
-
1
2
1
2
1
2
2
-
-
1
4
4
4
4
4
4
-
-
3
2
-
-
4
-
4
-
-
3
Total number of
meetings held
S A Pitkin
A M Heraghty
R A Rowe
D J Eilert
H L Mowlem
P D Everingham
S A Chaplain(2)
G T Dunne(2)
L K Inman(3)
(1)Number of meetings the Director was eligible to attend during the time the Director held office in the year.
(2)Commenced as a Director on 31 March 2020.
(3)Ceased as a Director on 22 October 2019.
1.3
Directors’ Interests
The relevant interest of each Director in shares and options over such instruments issued by the companies within the Group and other
related bodies corporate, as notified by the Directors to the Australian Securities Exchange (ASX) in accordance with section 205G(1)
of the Corporations Act 2001, at the date of this report is as follows:
Director
S A Pitkin
A M Heraghty
R A Rowe
D J Eilert
H L Mowlem
P D Everingham
S A Chaplain
G T Dunne
Number of Ordinary Shares
Options over Ordinary Shares
59,605
59,720
68,270,557
17,715
34,286
40,000
-
-
-
-
-
-
-
-
-
-
2.
Company Secretary
The Company Secretary (and Chief Legal Officer) is Ms Rebecca Farrell, B.A. LLB (Hons) (MU). Ms Farrell was appointed and
commenced with Super Retail Group Limited on 10 February 2020.
Prior to 10 February 2020, the Interim Company Secretary (and Group Legal Counsel) position was held by Mr Justin Coss, BA and B
Laws (LLB) (UQ). Mr Coss commenced with Super Retail Group Limited in an interim capacity on 30 September 2019 following the
resignation of Mr Peter Lim from the role.
3.
3.1
Operating and Financial Review
Overview of the Group
The Group is a for-profit entity and is primarily involved in the retail industry. Founded in 1972, as an automotive accessories mail order
business which evolved into Supercheap Auto, the Group has grown through both organic growth and mergers and acquisitions
evolving its principal activities to include:
Supercheap Auto (SCA): retailing of auto parts and accessories, tools and equipment;
rebel: retailing of sporting equipment and apparel;
BCF: retailing of boating, camping, outdoor equipment, fishing equipment and apparel; and
Macpac: retailing of apparel, camping and outdoor equipment.
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DIRECTORS’ REPORT (continued)
3.
3.2
Operating and Financial Review (continued)
Review of Financial Condition
A number of factors are influencing the financial results of the Group which will need to be considered when reviewing the financial
performance of the business. The key factors to be considered are:
COVID-19
Equity Raising
Implementation of AASB 16 Leases
(a)
Group Results
Revenue from continuing operations
Segment earnings before interest, taxes, depreciation and amortisation (EBITDA)
Segment earnings before interest and taxes (EBIT)
Normalised net profit after tax (NPAT)
Profit for the period attributable to owners(1)
Profit for the period(1)
Operating cash flow(1)
Earnings per share (EPS) – basic (cents)
Dividends per share (cents)
(1) Impacted by AASB 16
2020
$m
2,825.2
328.1
236.1
154.1
110.2
110.2
610.7
55.8
19.5
2019
$m
2,710.4
314.7
228.1
152.5
139.3
139.2
240.9
70.6
50.0
The Group achieved total sales growth of 4.2 per cent which included like-for-like sales growth across the three largest divisions of
SCA, rebel and BCF. Macpac experienced a sales decline of 5.0 per cent and negative like-for-like sales of 9.1 per cent. The 4.2 per
cent sales growth for the Group translated into a 4.3 per cent increase in Segment EBITDA, a 3.5 per cent increase in Segment EBIT
and a 1.0 per cent increase in normalised net profit after tax.
Net profit after tax (NPAT) attributable to owners was $110.2 million compared to $139.3 million in the prior period representing a
decrease of 20.9 per cent. Normalised NPAT was $154.1 million compared to $152.5 million in the prior period, an increase of 1.0 per
cent. The table below provides the reconciliation to the statutory profit.
Impacts of COVID-19
COVID-19 has had a significant impact on the Group since March 2020. There have been major shifts in customer purchasing
behaviour from March, when restrictions were first put in place. Pre-emptive actions were initiated to protect team members, liquidity
and profit. These actions have positioned the Group to trade through an extremely volatile period.
The Group traded all stores through this period, with the exception of stores that were government mandated for closure including
New Zealand stores for seven weeks and three stores in Tasmania for two weeks. The Group was therefore able to provide permanent
store-based team members with continuity of wages through this period whilst implementing appropriate safety procedures to
protect team members. In July 2020, government mandated restrictions in Victoria have increased with stage four restrictions
impacting 94 stores in Melbourne (35 Supercheap Auto; 32 rebel; 14 Macpac; 13 BCF) from week six, all stores continue to operate
contact-free Click & Collect. From 12 August, New Zealand government level three restrictions have impacted 21 stores in Auckland
(12 Supercheap Auto; 9 Macpac), all stores continue to operate contact-free Click & Collect.
Specific actions taken to improve liquidity were announced on 26 March 2020, including the cancelation of the interim dividend of
$42.5 million. The Group secured an additional $100.0 million debt funding facility. Project activity was suspended and all
discretionary expenditure was curtailed. The Group was well supported by its trade partners who re-scheduled committed inventory
purchases and provided extended payment terms. As a result, the trade payables balance at June 2020 is $60.4 million or 22.0 per
cent higher than the comparative period. Additionally, rental relief was negotiated with a number of landlords, and approximately
$18.0 million of rent remains in arrears at balance date. Rent abatement of $2.4 million was agreed representing approximately 0.9
per cent of the pre AASB 16 Leases expense, which was realised in the profit and loss results.
Following a 26.2 per cent decline in Group like-for-like sales in April 2020, like-for-like sales increased by 26.5 per cent in May and 27.7
per cent in June. Through this period customer purchasing patterns have shifted significantly between categories and channels
(stores and online). In the fourth quarter of the year, Group online sales increased 102.7 per cent to represent approximately 15 per
cent of Group sales. This acceleration of online has tested the omni-retailing strategy, validated its importance and provided the
Group with flexibility to quickly respond to customer needs.
As a result of a significant decline in sales in April, Macpac Australia qualified for the Australian Government JobKeeper payment.
The New Zealand operations of SCA and Macpac were impacted by government mandated store closures for seven weeks. The
total of government wage support received in the 2020 financial year was $6.5 million. The New Zealand government wage subsidy
covered a 12 week period and ended in June 2020. Jobkeeper subsidy for Macpac Australia is expected to end in September 2020.
Equity Raising
On 15 June 2020, the Group announced an underwritten one for seven accelerated pro rata non-renounceable entitlement offer to
raise equity of approximately $203 million at a fixed price of $7.19 per share. The equity raising comprised an institutional entitlement
offer which settled on 24 June 2020 and a retail entitlement offer which settled on 9 July 2020, subsequent to the end of the financial
year. The institutional entitlement resulted in cash proceeds net of transaction costs of $157.0 million being received in June. The
retail entitlement settled post year end with $43.6 million being received in July 2020. The equity raising has reduced the Group’s
leverage and provides flexibility for the business to continue to execute its strategy in a more uncertain period.
DIRECTORS’ REPORT (continued)
3.
3.2
(a)
Operating and Financial Review (continued)
Review of Financial Condition (continued)
Group results (continued)
At the time of the equity raising the Group identified that there was approximately $58.0 million of pre-tax costs to be included in the
result for the year that will not be included in the normalised net profit after tax due to their size or nature. The finalised value is $54.1
pre-tax ($38.0 million post-tax). A schedule of these items is outlined below.
Profit for the period
Loss for the period attributable to non-controlling interests
Profit for the period attributable to owners of Super Retail Group Limited
Lease Accounting Standard – AASB 16 Leases adjustment
Pre-AASB 16
Wages underpayment and remediation costs(1)
Accelerated asset amortisation(1)
Business restructuring costs(1)
Break costs on interest rate swaps(1)
Loss on divestment of investments/Closure of non-core businesses(1)
Losses from associates accounted for using the equity method
Reversals of provisions previously excluded from normalised NPAT(1)
Total of items not included in total segment NPAT
Normalised net profit after tax
(1) Net of tax
2020
$m
110.2
-
110.2
5.9
116.1
17.1
9.6
5.5
4.2
2.0
0.6
(1.0)
38.0
154.1
2019
$m
139.2
0.1
139.3
-
139.3
6.2
-
3.1
-
1.7
2.2
-
13.2
152.5
While the impact of COVID-19 demonstrated the benefits of the Group’s strategy of building omni-channel capability, it also required
actions to be undertaken to ensure agile strategy execution. As a result, there was an acceleration of the amortisation reflecting the
revision of useful lives of selected technology assets reflecting the shift to digital strategies. The business restructuring costs relate to a
reduction in support office team members. As a result of the equity raising, interest rate swaps were terminated as the underlying
debt was repaid. As part of the implementation of the Group’s four core brands business strategy, closure activities were undertaken
for Autocrew (in which the Group had a 50 per cent investment) and Infinite Retail businesses. These businesses made a small loss in
the 2020 financial year.
There was an increase in the estimate for team member underpayments. The movement in this estimate has two elements. The total
amount of retail manager and set-up team member underpayments is lower than initially estimated. Offsetting this decrease is the
identification of additional team members also impacted by overtime underpayments.
(b)
Impact of AASB 16 Leases
Given the significance of the impact that the new accounting standard AASB 16 Leases has on the financial year and balance sheet
at 27 June 2020, the following tables are included to assist with comparison with the prior period. This is non-IFRS information. In
accordance with the standard the Group is not required to restate the prior year comparative.
AASB 16 Leases impact on Consolidated Income Statement (Non-IFRS)
Revenue from continuing operations
Other income from continuing operations
Total revenues and other income
Expenses
Cost of sales of goods
Other expenses from ordinary activities
- selling and distribution
- marketing
- occupancy(1)
- administration(1)
Net finance costs
Share of net loss of associates and joint ventures
Total expenses
Profit before income tax
Income tax expense
27-Jun-20
Statutory
$m
2,825.2
0.2
2,825.4
(1,555.1)
(371.2)
(79.1)
(204.9)
(403.6)
(55.1)
(0.6)
(2,669.6)
155.8
(45.6)
27-Jun-20
AASB 16
Adjustment
$m
-
-
-
-
-
-
(28.3)
(0.6)
37.3
-
8.4
8.4
(2.5)
27-Jun-20
Pre-AASB 16
$m
2,825.2
0.2
2,825.4
29-Jun-19
Pre-AASB 16
Statutory
$m
2,710.4
2.8
2,713.2
(1,555.1)
(1,488.2)
(371.2)
(79.1)
(233.2)
(404.2)
(17.8)
(0.6)
(347.8)
(81.9)
(215.5)
(366.4)
(21.3)
(2.6)
(2,661.2)
(2,523.7)
164.2
(48.1)
189.5
(50.3)
Profit for the period
(1) Occupancy expense movement is a reduction in depreciation and amortisation of $176.2m and an increase in rental expense of $204.5m.
110.2
116.1
139.2
5.9
Administration expense movement is an increase in loss on sale of property, plant and equipment of $0.6m.
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DIRECTORS’ REPORT (continued)
3.
3.2
(b)
Operating and Financial Review (continued)
Review of Financial Condition (continued)
Impact of AASB 16 Leases (continued)
AASB 16 Leases impact on Consolidated Balance Sheet (Non IFRS)
27-Jun-20
Statutory
$m
27-Jun-20
AASB 16
Adjustment
$m
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax asset
Derivative financial instruments
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Deferred tax assets
Other financial assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Current tax liabilities
Provisions
Derivative financial instruments
Total current liabilities
Non-current liabilities
Trade and other payables
Borrowings
Lease liabilities
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
285.1
26.3
502.4
-
-
813.8
227.8
848.0
874.3
4.9
6.3
1,961.3
2,775.1
442.3
-
178.4
17.1
111.1
1.9
750.8
-
247.8
760.9
-
24.3
1,033.0
1,783.8
-
1.6
-
-
-
1.6
22.8
(848.0)
0.7
(4.9)
-
(829.4)
(827.8)
3.1
3.8
(178.4)
-
(0.5)
-
(172.0)
51.0
0.9
(760.9)
12.0
1.1
(695.9)
(867.9)
27-Jun-20
Pre-AASB 16
$m
285.1
27.9
502.4
-
-
815.4
250.6
-
875.0
-
6.3
1,131.9
1,947.3
445.4
3.8
-
17.1
110.6
1.9
578.8
51.0
248.7
-
12.0
25.4
377.1
915.9
29-Jun-19
Pre-AASB 16
Statutory
$m
7.5
37.6
560.2
1.9
2.8
610.0
267.9
-
894.2
-
6.9
1,169.0
1,779.0
362.7
3.4
-
-
107.3
6.2
479.6
49.5
390.8
-
23.4
19.7
483.4
963.0
NET ASSETS
991.3
40.1
1,031.4
816.0
EQUITY
Contributed equity
Reserves
Retained earnings
Capital and reserves attributable to owners of
Super Retail Group Limited
Non-controlling interests
TOTAL EQUITY
698.1
7.5
285.7
991.3
-
991.3
-
-
40.1
40.1
-
40.1
698.1
7.5
325.8
1,031.4
-
1,031.4
542.3
8.2
265.9
816.4
(0.4)
816.0
DIRECTORS’ REPORT (continued)
3.
3.2
(b)
Operating and Financial Review (continued)
Review of Financial Condition (continued)
Impact of AASB 16 Leases (continued)
AASB 16 Leases impact on Consolidated Statement of Cash Flows (Non IFRS)
27-Jun-20
Statutory
$m
27-Jun-20
AASB 16
Adjustment
$m
27-Jun-20
Pre-AASB 16
$m
29-Jun-19
Pre-AASB 16
Statutory
$m
Cash flows from operating activities
Receipts from customers (inclusive of goods and
services tax)
Payments to suppliers and employees (inclusive of
goods and services tax)
Rental payments
Income taxes paid
Net cash inflow from operating activities
Cash flows from investing activities
Payments for property, plant and equipment and
software
Proceeds from sale of property, plant and
equipment
Payments for acquisitions of investments in
associates/joint ventures
Acquisition of subsidiary, net of cash acquired
Net cash (outflow) from investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Lease principal payments
Borrowing costs paid
Interest paid
Proceeds from issue of shares, net of transaction
costs
Dividend paid to Company’s shareholders
Net cash (outflow) from financing activities
Net increase/(decrease) in cash and cash
equivalents
Cash and cash equivalents at the beginning of
the period
Effects of exchange rate changes on cash and
cash equivalents
Cash and cash equivalents at the end of the
interim period
3,139.0
(2,436.6)
(51.1)
(40.6)
610.7
(68.4)
0.6
-
(0.1)
(67.9)
963.0
(1,103.0)
(171.8)
(0.2)
(53.6)
157.0
(56.2)
(264.8)
278.0
7.5
(0.4)
285.1
-
-
(205.8)
-
(205.8)
3,139.0
2,995.8
(2,436.6)
(256.9)
(40.6)
404.9
(2,438.0)
(262.7)
(54.2)
240.9
-
-
-
-
-
-
-
168.5
-
37.3
-
-
205.8
-
-
-
-
(68.4)
(89.8)
0.6
-
(0.1)
(67.9)
963.0
(1,103.0)
(3.3)
(0.2)
(16.3)
157.0
(56.2)
(59.0)
-
(0.7)
-
(90.5)
946.0
(986.0)
(3.3)
(2.4)
(16.0)
-
(96.7)
(158.4)
278.0
(8.0)
7.5
(0.4)
285.1
15.2
0.3
7.5
38 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
38 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
38 S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0 39
S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
39
DIRECTORS’ REPORT (continued)
DIRECTORS’ REPORT (continued)
3.
3.
3.2
3.2
(b)
(b)
Operating and Financial Review (continued)
Operating and Financial Review (continued)
Review of Financial Condition (continued)
Review of Financial Condition (continued)
Impact of AASB 16 Leases (continued)
Impact of AASB 16 Leases (continued)
AASB 16 Leases impact on Segment Note
AASB 16 Leases impact on Segment Note
For the period ended 27 June 2020
For the period ended 27 June 2020
SCA
SCA
$m
$m
rebel
rebel
$m
$m
BCF
BCF
$m
$m
Macpac
Macpac
$m
$m
Total
Total
continuing
continuing
operations
operations
$m
$m
Inter-segment
Inter-segment
eliminations/
eliminations/
unallocated
unallocated
$m
$m
Consolidated
Consolidated
$m
$m
Segment Revenue and Other Income
Segment Revenue and Other Income
External segment revenue
External segment revenue
Other income
Other income
Total segment revenue and other
Total segment revenue and other
income
income
Segment EBITDA
Segment EBITDA
1,119.7
1,119.7
-
-
1,038.6
1,038.6
0.1
0.1
1,119.7
1,119.7
242.0
242.0
1,038.7
1,038.7
205.1
205.1
(94.5)
(94.5)
110.6
110.6
(14.6)
(14.6)
96.0
96.0
(100.4)
(100.4)
141.6
141.6
(12.4)
(12.4)
129.2
129.2
Segment depreciation and amortisation
Segment depreciation and amortisation
Segment EBIT result
Segment EBIT result
Net finance costs
Net finance costs
Total segment NPBT
Total segment NPBT
Segment income tax expense
Segment income tax expense
Normalised NPAT
Normalised NPAT
Other items not included in the total segment NPAT
Other items not included in the total segment NPAT
Profit for the period attributable to:
Profit for the period attributable to:
Owners of Super Retail Group Limited
Owners of Super Retail Group Limited
Non-controlling interests
Non-controlling interests
Profit for the period
Profit for the period
535.0
535.0
0.1
0.1
535.1
535.1
79.3
79.3
(55.9)
(55.9)
23.4
23.4
(8.4)
(8.4)
15.0
15.0
131.9
131.9
-
-
131.9
131.9
25.0
25.0
(17.3)
(17.3)
7.7
7.7
(1.9)
(1.9)
5.8
5.8
2,825.2
2,825.2
0.2
0.2
2,825.4
2,825.4
551.4
551.4
(268.1)
(268.1)
283.3
283.3
(37.3)
(37.3)
246.0
246.0
-
-
-
-
-
-
(18.2)
(18.2)
(0.1)
(0.1)
(18.3)
(18.3)
(17.8)
(17.8)
(36.1)
(36.1)
2,825.2
2,825.2
0.2
0.2
2,825.4
2,825.4
533.2
533.2
(268.2)
(268.2)
265.0
265.0
(55.1)
(55.1)
209.9
209.9
(61.7)
(61.7)
148.2
148.2
(38.0)
(38.0)
110.2
110.2
-
-
110.2
110.2
Management do not review the operating segments or make strategic decisions utilising this information. It is shown here to provide
Management do not review the operating segments or make strategic decisions utilising this information. It is shown here to provide
additional information on the impact of the new lease accounting standard.
additional information on the impact of the new lease accounting standard.
The implementation of AASB 16 Leases has required operating leases to be recognised as right-of-use assets and lease liabilities, and
The implementation of AASB 16 Leases has required operating leases to be recognised as right-of-use assets and lease liabilities, and
for lease expenses to be treated as depreciation and interest. Cash lease payments are classified as lease principal payments and
for lease expenses to be treated as depreciation and interest. Cash lease payments are classified as lease principal payments and
interest paid.
interest paid.
The impact of the implementation of the standard has a net negative impact on Net Profit After Tax of $5.9m in the year.
The impact of the implementation of the standard has a net negative impact on Net Profit After Tax of $5.9m in the year.
(c)
(c)
Division Results
Division Results
Supercheap Auto
Supercheap Auto
rebel
rebel
BCF
BCF
Macpac
Macpac
Unallocated
Unallocated
Supercheap Auto
Supercheap Auto
Sales
Sales
EBITDA
EBITDA
EBIT
EBIT
2020
2020
$m
$m
1,119.7
1,119.7
1,038.6
1,038.6
535.0
535.0
131.9
131.9
-
-
2,825.2
2,825.2
2019
2019
$m
$m
1,040.6
1,040.6
1,016.4
1,016.4
514.6
514.6
138.8
138.8
-
-
2,710.4
2,710.4
2020
2020
$m
$m
174.7
174.7
126.6
126.6
34.9
34.9
10.1
10.1
(18.2)
(18.2)
328.1
328.1
2019
2019
$m
$m
156.1
156.1
122.6
122.6
40.2
40.2
15.6
15.6
(19.8)
(19.8)
314.7
314.7
2020
2020
$m
$m
134.9
134.9
96.6
96.6
15.7
15.7
7.2
7.2
(18.3)
(18.3)
236.1
236.1
2019
2019
$m
$m
120.6
120.6
93.8
93.8
20.8
20.8
13.0
13.0
(20.1)
(20.1)
228.1
228.1
Sales increased by 7.6 per cent to $1,119.7 million. Like-for-like sales growth of 6.3 per cent reflected both transaction growth and
Sales increased by 7.6 per cent to $1,119.7 million. Like-for-like sales growth of 6.3 per cent reflected both transaction growth and
increased units per sale driving higher average transaction value. Sales declined in April due to government restrictions, but
increased units per sale driving higher average transaction value. Sales declined in April due to government restrictions, but
rebounded during the fourth quarter off the back of 33.6 per cent like-for-like sales growth in May and June.
rebounded during the fourth quarter off the back of 33.6 per cent like-for-like sales growth in May and June.
Sales growth was strongest in Queensland, Western Australia and South Australia. All Australian States delivered positive like-for-like
Sales growth was strongest in Queensland, Western Australia and South Australia. All Australian States delivered positive like-for-like
sales growth. Trading in New Zealand was impacted by the closure of 45 stores for approximately seven weeks due to a government
sales growth. Trading in New Zealand was impacted by the closure of 45 stores for approximately seven weeks due to a government
mandated shutdown for COVID-19.
mandated shutdown for COVID-19.
DIRECTORS’ REPORT (continued)
3.
3.2
(c)
Operating and Financial Review (continued)
Review of Financial Condition (continued)
Division Results (continued)
Supercheap Auto (continued)
Auto accessories and auto maintenance, which represent approximately three quarters of divisional revenue, were the strongest
performing categories. Like-for-like sales growth was achieved in all categories including tools and outdoors. Sales in Supercheap
Auto reflected a shift towards essential, DIY auto and household project products during the peak COVID-19 restriction period.
Online sales increased by 37 per cent to $82.0 million. Online sales represented seven per cent of Supercheap Auto’s total sales and
Click & Collect accounted for over 60 per cent of these online sales.
Supercheap Auto active Club Plus membership increased by approximately four per cent during the financial year to 1.71 million
members. Sales attributable to club members increased to 40 per cent of total sales. Average club member net promotor score
(NPS) increased to 63 from 61 in the prior comparative period.
During the 2020 financial year, the business opened four new stores and closed one store. As at the end of the financial year, the
business had a total of 281 stores in Australia and 45 stores in New Zealand.
rebel
Sales increased by 3.3 per cent to $1,038.6 million (excluding Infinite Retail) with like-for-like growth of 2.7 per cent. Like-for-like growth
was driven by higher average transaction value. Sales declined in April due to government restrictions, but rebounded during the
fourth quarter following 9.1 per cent like-for-like sales growth in May and June. Sales growth in June was impacted by the annual
June clearance sale being deferred to July due to a lower in-stock position.
Queensland and Western Australia achieved the strongest like-for-like sales growth.
Gross margin increased due to lower promotional activity. Operating expenses increased in rebel mostly due to an increased share
of group infrastructure as the business fully migrated into group distribution centres and expanded online. The operating expense
increase partially offsetting gross margin expansion.
Segment EBITDA increased by 3.3 per cent to $126.6 million and EBITDA margin of 12.2 per cent was 0.1 per cent higher than the prior
comparative period.
Segment EBIT increased by 3.0 per cent to $96.6 million and EBIT margin of 9.3 per cent was 0.1 per cent higher than the prior
comparative period.
Fitness and hardgoods were the best performing categories as COVID-19 restrictions led to strong demand for home fitness products.
Apparel and footwear sales were impacted by lower foot traffic in stores due to COVID-19 but recovered during the fourth quarter
as restrictions eased.
Online sales increased by 49 per cent to $141.2 million reflecting the strong channel shift during COVID-19. Online sales represented
14 per cent of total rebel sales and Click & Collect accounted for approximately 30 per cent of these online sales.
Rebel active club membership increased by approximately 12 per cent during the financial year to 2.88 million members. Sales to
club members increased to 66 per cent of rebel sales. Average club member NPS was 55.
During the 2020 financial year, rebel closed one store. As at the end of the financial year, rebel had 160 stores.
The Infinite Retail business has been permanently discontinued. Infinite Retail reported $15.9 million of sales in the financial year
representing a decline of $10.8 million to the prior comparative period.
BCF
Sales increased by 4.0 per cent to $535.0 million. Like-for-like grew 3.0 per cent driven by both increased transactions and higher
average transaction value. Sales declined in April due to government restrictions particularly impacting the Easter holiday period, but
rebounded during the fourth quarter following 68.1 per cent like-for-like sales growth in May and June.
Western Australia and Queensland were the strongest performing States.
Gross margin was slightly lower than prior comparative period and operating expenses as a percentage of sales were lower benefiting
Gross margin was slightly lower than prior comparative period and operating expenses as a percentage of sales were lower benefiting
from operating leverage due to strong sales.
from operating leverage due to strong sales.
Fishing was the strongest performing category. Fishing, camping and apparel all delivered positive like-for-like sales growth while
boating sales declined modestly.
Segment EBITDA increased by 11.9 per cent to $174.7 million and EBITDA margin of 15.6 per cent was 0.6 per cent higher than the
Segment EBITDA increased by 11.9 per cent to $174.7 million and EBITDA margin of 15.6 per cent was 0.6 per cent higher than the
prior comparative period.
prior comparative period.
Gross margin declined compared to the previous period due to competitive intensity, while operating expenses as a percentage of
total sales were consistent with the prior year.
Segment EBIT increased by 11.9 per cent to $134.9 million and EBIT margin of 12.0 per cent was 0.4 per cent higher than the prior
Segment EBIT increased by 11.9 per cent to $134.9 million and EBIT margin of 12.0 per cent was 0.4 per cent higher than the prior
comparative period.
comparative period.
Segment EBITDA decreased to $34.9 million and EBITDA margin of 6.5 per cent was 1.3 per cent lower than the prior comparative
period.
40 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
40 S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0 41
S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
41
DIRECTORS’ REPORT (continued)
3.
3.2
(c)
Operating and Financial Review (continued)
Review of Financial Condition (continued)
Division Results (continued)
BCF (continued)
Segment EBIT decreased to $15.7 million and overall EBIT margin declined from 4.0 per cent in the prior comparative period to 2.9 per
cent.
The BCF club loyalty program experienced strong growth with active memberships increasing by approximately 6 per cent to 1.54
million. BCF club members increased to 83 per cent of total BCF sales. Average club member NPS increased to 64 from 61 in the
prior comparative period.
Online sales grew by 33 per cent to $45.3 million reflecting a shift to the online channel due to COVID-19. Online sales represented 9
per cent of total BCF sales and Click & Collect accounted for just over two thirds of these online sales.
BCF opened four stores and closed one store during the financial year. As at the end of the financial year, BCF had 139 stores.
Macpac
Sales fell by 5.0 per cent to $131.9 million and like-for-like sales decreased by 9.1 per cent.
In Australia, like-for-like sales decreased by 9.7 per cent as a result of the impact of summer bushfires on peak Christmas trading and
the impact of COVID-19 on store foot traffic during the key Easter trading period. In New Zealand, like-for-like sales decreased by 8.2
per cent mainly due to a government mandated seven week store shutdown relating to COVID-19. Sales in both Australia and New
Zealand rebounded during the fourth quarter with 7.8 per cent like-for-like sales growth in May and June.
Segment EBIT decreased to $7.2 million and segment EBIT margin decreased to 5.5 per cent. The majority of this decline was recorded
in the first half of the financial year.
Online sales increased by 83 per cent to $22.0 million and represented 17 per cent of Macpac sales. Click & Collect, which was only
recently introduced in New Zealand stores, represented approximately 5 per cent of online sales.
Macpac club membership increased by approximately 10 per cent to 0.45 million and these club members represented 64 per cent
of total Macpac sales. Average club membership NPS was 67 per cent.
During the 2020 financial year, Macpac opened three stores and closed one store. As at the end of the financial year, Macpac had
72 stores comprising 62 small format stores and ten Adventure Hub stores.
The weaker financial performance of Macpac this year has reduced the amount of headroom when assessing the carrying value of
brand name and goodwill intangibles. The value-in-use cash flow analysis is based on the business improving financial performance
consistent with the 2019 financial year by financial year 2022 and delivering growth levels consistent with historical levels. Refer to
Note 10(b) of the financial statements for details of these assumptions.
Group Costs
Group costs for the period were $18.3 million, which was $1.8 million lower than the prior comparative period. Group costs included
corporate costs of $12.1 million, $3.4 million of un-allocated distribution centre costs and $2.8 million relating to omni-retail
development and digital investment.
DIRECTORS’ REPORT (continued)
3.
3.2
(d)
Operating and Financial Review (continued)
Review of Financial Condition (continued)
Financial Position and Cash Flow
BALANCE SHEET
Trade and other receivables
Inventories
Trade and other payables
Current tax assets / (liabilities)
Total working capital
Cash and cash equivalents
Borrowings
Lease liabilities
Net debt
Property, plant and equipment
Right-of-use assets
Intangible assets
Other financial assets
Derivatives
Provisions
Deferred taxes
NET ASSETS
CASH FLOW
Net cash inflow from operations
Net cash (outflow) from investing
Net cash (outflow) from financing
Net increase / (decrease) in cash
Cash at the beginning of the period
Effects of exchange rates on cash
Cash at the end of the period
2020
$m
26.3
502.4
(442.3)
(17.1)
69.3
285.1
(247.8)
(939.3)
(902.0)
227.8
848.0
874.3
6.3
(1.9)
(135.4)
4.9
991.3
610.7
(67.9)
(264.8)
278.0
7.5
(0.4)
285.1
2019
$m
37.6
560.2
(412.2)
1.9
187.5
7.5
(394.2)
-
(386.7)
267.9
-
894.2
6.9
(3.4)
(127.0)
(23.4)
816.0
240.9
(90.5)
(158.4)
(8.0)
15.2
0.3
7.5
Net cash inflow from operations has increased by $205.8 million due to the change in treatment of rental expenses under AASB 16
Leases and an improvement in working capital. Excluding the impact of AASB 16 Leases, operating cash flow improved by $164.0
million. This improvement was mainly driven by a lower net inventory investment, lease payment deferrals and a shift in tax payments,
the benefits of which are expected to reverse in the next financial year.
Working capital investment declined $118.2 million due to the significant decline in inventory of $57.8 million which was impacted by
both COVID-19 liquidity management measures and the strong increase in sales in May and June. Trade and other payables
increased by $79.6 million due a shift in purchases and improved trading terms agreed with major trading partners, rent deferral of
$18.0 million on certain leases and reduced tax payments of $13.6 million.
Net debt of $902.0 million included $939.3 million of lease liabilities. Excluding lease liabilities, the Group was in a net cash position of
$37.3 million an improvement of $424.0 million compared to the prior year. All borrowings were repaid in July 2020. The $100 million
ANZ bilateral facility was cancelled in August 2020. The Group has sufficient facilities in place to fund its strategy and remains
comfortably within banking covenants.
The impact of the implementation of AASB 16 Leases this financial year has reduced net assets by $40.1 million. Net assets for the
Group increased by $175.3 million primarily due to the proceeds of the institutional component of the equity raising.
Capital expenditure reduced from $90.5 million in 2019 to $67.9 million as liquidity measures were implemented during the COVID-19
trading period. Expenditure included $28.0 million in new and refurbished store fitout and $39.8 million in building omni-retail
capabilities, data and analytics, and other information technology projects.
(e)
Dividends
The interim dividend of 22.0 cents was cancelled on 26 March 2020 to preserve cash in view of the uncertain economic outlook at
the onset of COVID-19. The Group has declared a 19.5 cents per share fully franked final dividend for the financial year. The amount
of the final dividend represents a dividend payout ratio of 55 per cent of second half underlying NPAT totalling a cash payment of
$44.0 million.
42 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
42 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
42 S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0 43
S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
43
DIRECTORS’ REPORT (continued)
DIRECTORS’ REPORT (continued)
3.
3.
3.2
3.2
(f)
(f)
Operating and Financial Review (continued)
Operating and Financial Review (continued)
Review of Financial Condition (continued)
Review of Financial Condition (continued)
Material Business Risks
Material Business Risks
The Group recognises that all of its businesses operate in an environment of change and uncertainty and is committed to managing
The Group recognises that all of its businesses operate in an environment of change and uncertainty and is committed to managing
the potential risks associated with this uncertainty in a continuous, active and systematic way. The Group regularly reviews the possible
the potential risks associated with this uncertainty in a continuous, active and systematic way. The Group regularly reviews the possible
impact of these risks and seeks to minimise this impact through a commitment to its corporate governance principles and its risk
impact of these risks and seeks to minimise this impact through a commitment to its corporate governance principles and its risk
management functions.
management functions.
The business risks faced by the Group that are likely to have a material effect on its financial prospects are listed below, including an
The business risks faced by the Group that are likely to have a material effect on its financial prospects are listed below, including an
overview of the Group’s mitigating actions:
overview of the Group’s mitigating actions:
Risks
Risks
1. Pandemic (Impact of COVID-19)
1. Pandemic (Impact of COVID-19)
There is continuing uncertainty as to the duration and further
There is continuing uncertainty as to the duration and further
impact of the COVID-19 pandemic, including in relation to the
impact of the COVID-19 pandemic, including in relation to the
timing and nature of government approaches to easing
timing and nature of government approaches to easing
containment measures (including travel restrictions) and the
containment measures (including travel restrictions) and the
depth and length of the negative impacts on domestic and
depth and length of the negative impacts on domestic and
global economic activity.
global economic activity.
The COVID-19 pandemic has altered and may further alter
The COVID-19 pandemic has altered and may further alter
consumer behaviour (for example, it may cause a long-term
consumer behaviour (for example, it may cause a long-term
shift toward online shopping or cause consumers to reduce
shift toward online shopping or cause consumers to reduce
household spending) and such changes may adversely affect
household spending) and such changes may adversely affect
the Group’s financial performance.
the Group’s financial performance.
2. Health and Safety
2. Health and Safety
The Group is committed to the health and safety of its team
The Group is committed to the health and safety of its team
members, customers and contractors. While a strong emphasis
members, customers and contractors. While a strong emphasis
is placed on the implementation of work health and safety
is placed on the implementation of work health and safety
standards, the risk of a serious injury or fatality remains possible.
standards, the risk of a serious injury or fatality remains possible.
The occurrence of such events may have an adverse effect
The occurrence of such events may have an adverse effect
on the productivity, operations and reputation of the Group.
on the productivity, operations and reputation of the Group.
3. Omni-Retail Transformation
3. Omni-Retail Transformation
The markets in which the Group competes (being automotive
The markets in which the Group competes (being automotive
parts and accessories and outdoor, sporting and leisure
parts and accessories and outdoor, sporting and leisure
goods) are subject to changing consumer preferences and
goods) are subject to changing consumer preferences and
buying patterns, including as a result of new technologies and
buying patterns, including as a result of new technologies and
offerings from competitors (including online retail
offerings from competitors (including online retail
experiences), macroeconomic conditions and the impact of
experiences), macroeconomic conditions and the impact of
events such as COVID-19.
events such as COVID-19.
If the Group is not able to develop or access new
If the Group is not able to develop or access new
technologies and anticipate or respond to disruptions in the
technologies and anticipate or respond to disruptions in the
markets in which it competes, including if there are new or
markets in which it competes, including if there are new or
improved products or retail experiences (including online retail
improved products or retail experiences (including online retail
experiences) that are, or are perceived to be, superior to
experiences) that are, or are perceived to be, superior to
those offered by the Group, then the Group may suffer a
those offered by the Group, then the Group may suffer a
decrease in the demand for its products, which may have a
decrease in the demand for its products, which may have a
material adverse impact on the Group’s financial position,
material adverse impact on the Group’s financial position,
performance and prospects.
performance and prospects.
Mitigating Actions (including but not limited to)
Mitigating Actions (including but not limited to)
The stand-up of the Incident Management Team and
The stand-up of the Incident Management Team and
Crisis Management Teams;
Crisis Management Teams;
The pandemic response plan was activated with the help
The pandemic response plan was activated with the help
of International SOS;
of International SOS;
COVID-19 Safety Plans have been implemented to
COVID-19 Safety Plans have been implemented to
promote personal hygiene, physical distancing and
promote personal hygiene, physical distancing and
mental health;
mental health;
Incident response procedures have been developed to
Incident response procedures have been developed to
trace ‘close and casual’ contact, for deep cleaning and
trace ‘close and casual’ contact, for deep cleaning and
regulatory reporting;
regulatory reporting;
The securing of an additional $100 million bilateral facility
The securing of an additional $100 million bilateral facility
from ANZ which was fully drawn down (this was
from ANZ which was fully drawn down (this was
subsequently repaid on 1 June 2020 as was surplus to
subsequently repaid on 1 June 2020 as was surplus to
requirements and then cancelled on 7 August 2020);
requirements and then cancelled on 7 August 2020);
Implementation of a range of countermeasures to ensure
Implementation of a range of countermeasures to ensure
ongoing liquidity of the Group including rent abatement
ongoing liquidity of the Group including rent abatement
and deferral and revised trading terms with larger stock
and deferral and revised trading terms with larger stock
and non-stock suppliers;
and non-stock suppliers;
Identification and implementation of a range of measures
Identification and implementation of a range of measures
relating to profit protection including the request for team
relating to profit protection including the request for team
members to utilise existing leave liabilities;
members to utilise existing leave liabilities;
Implementation of contact-free Click & Collect;
Implementation of contact-free Click & Collect;
Shifting merchandising activity to match demand profile;
Shifting merchandising activity to match demand profile;
Shifting to digital marketing;
Shifting to digital marketing;
Re-aligning marketing investment to demand profile; and
Re-aligning marketing investment to demand profile; and
Adjusting marketing plans to support online trading.
Adjusting marketing plans to support online trading.
The Group has an established Health and Safety
The Group has an established Health and Safety
Management System including resources, training and
Management System including resources, training and
procedures, and this is supported through active reporting of
procedures, and this is supported through active reporting of
incidents, regular monitoring and assurance activities such as:
incidents, regular monitoring and assurance activities such as:
Group Health and Safety Governance Framework;
Group Health and Safety Governance Framework;
Continued investment to address health and safety risks,
Continued investment to address health and safety risks,
Health and safety management systems;
Health and safety management systems;
including mental health;
including mental health;
Performance reporting and monitoring; and
Performance reporting and monitoring; and
Health and safety training.
Health and safety training.
Investment in analytical insight and customer strategy
Investment in analytical insight and customer strategy
leadership;
leadership;
Customer behavioural analytics and insights leveraged to
Customer behavioural analytics and insights leveraged to
inform campaign activity;
inform campaign activity;
Execution of pricing strategy delivering positive results;
Execution of pricing strategy delivering positive results;
IS five year strategy, acceleration of migration to cloud
IS five year strategy, acceleration of migration to cloud
based services;
based services;
Click & Collect roll out for Macpac; and
Click & Collect roll out for Macpac; and
Contact-free Click & Collect implementation across all
Contact-free Click & Collect implementation across all
Australian standalone stores.
Australian standalone stores.
DIRECTORS’ REPORT (continued)
3.
3.2
(f)
Operating and Financial Review (continued)
Review of Financial Condition (continued)
Material Business Risks (continued)
Risks
4. Competition Intensity
The Group operates in a competitive retail market exhibiting
low barriers to entry. The growth and intensity of competition in
the increasingly globalised retail market continues which
means that the Group faces increased competition from
existing competitors and new entrants, particularly into the
Australian and New Zealand retail markets. The Group’s
performance and profitability could be adversely affected if
the actions of competitors or potential competitors become
more effective, new competitors enter the market or current
economic conditions (including as a result of COVID-19) lead
to significant promotional or clearance activity by competitors
in financial distress, particularly if the Group is unable to
respond effectively to such activity or its response is delayed.
5.
Industrial Relations
Failure by an employer to comply with relevant employment
laws, awards or enterprise agreements can lead to potential
regulatory investigations or enforcement actions or other civil
or criminal fines or penalties. As disclosed on 12 February 2019,
the Group identified underpayments of overtime and some
allowances to retail managers and other staff members, in
breach of the applicable award and enterprise agreement,
and self-reported the underpayments to the Fair Work
Ombudsman. This followed an earlier self-disclosure to the Fair
Work Ombudsman of the underpayment of overtime and
some allowances to the Group's new store set up employees.
Although a significant proportion of the remediation work
necessitated by these underpayments has been completed,
there are ongoing efforts to contact former team members
and liaise with current team members in relation to their
entitlements and the Group continues to liaise with the Fair
Work Ombudsman in relation to the oversight and
investigation of these issues.
6.
Supply Chain and Inventory Agility for Omni-Retail
Any disruptions, adverse changes or inefficiencies in the
Group’s supply chain (including as a result of COVID-19,
geopolitical tensions or instability or changes in
macroeconomic conditions) could have an adverse impact
on the Group’s ability to supply products to its customers. The
supply and distribution of the Group’s products (including
delivery of products direct to consumers) is reliant on the
effective and continued operation of third party logistics
providers.
Mitigating Actions (including but not limited to)
There are a number of initiatives in progress to mitigate this
risk including pricing and promotion, supply chain
efficiency, e-commerce experience, programmatic
marketing and the order management system.
Mandatory training for retail managers;
Team member management and monitoring processes;
Segregation of duties;
Supervision and oversight;
System access and controls;
System validation controls;
Formal grievance response tracking;
Group remuneration oversight committee;
Mutual agreements and approval process; and
Rostering principles;
Register of awards;
Automated retail award audits;
Reconfiguration of status adjustments;
Implementation of a new time and attendance system.
The Group continues to pursue opportunities to reduce
the cost of the supply chain and working cost of capital
through improved delivery models with major trade
partners;
The Group has made substantial investments in an
updated supply chain network and supporting
information systems to improve agility and meet changing
customer expectations;
Monitor last mile fulfilment capacity to meet customer
demand;
Monitor supplier impacts;
Review local supply options for key lines;
Contracts in place with critical vendors;
Monitoring and regular contact with critical suppliers;
Confirmation of critical supplier;
Monitor supplier impacts.
Alternative suppliers;
Business continuity plans; and
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DIRECTORS’ REPORT (continued)
DIRECTORS’ REPORT (continued)
Operating and Financial Review (continued)
Operating and Financial Review (continued)
Review of Financial Condition (continued)
Review of Financial Condition (continued)
Material Business Risks (continued)
Material Business Risks (continued)
3.
3.
3.2
3.2
(f)
(f)
Risks
Risks
7. Cyber Security and Information Technology
7. Cyber Security and Information Technology
A significant breach of customer, employee, third party or
A significant breach of customer, employee, third party or
company data could attract media attention, damage the
company data could attract media attention, damage the
Group’s team members, customer or supplier relationships and
Group’s team members, customer or supplier relationships and
reputation and result in lost sales, penalties or litigation.
reputation and result in lost sales, penalties or litigation.
The Group relies on various information technology systems for
The Group relies on various information technology systems for
its business operations and to maximise efficiency, including
its business operations and to maximise efficiency, including
through inventory management software, payment systems
through inventory management software, payment systems
and online sales platforms. Any sustained and unplanned
and online sales platforms. Any sustained and unplanned
downtime of these systems, including as a result of
downtime of these systems, including as a result of
cybersecurity attacks, system failures, network disruptions and
cybersecurity attacks, system failures, network disruptions and
other malicious or non-malicious incidents, could have a
other malicious or non-malicious incidents, could have a
material adverse impact on the Group’s ability to operate its
material adverse impact on the Group’s ability to operate its
business and consequently its reputation and financial
business and consequently its reputation and financial
performance.
performance.
8. Business Continuity
8. Business Continuity
Inadequate business continuity capability across the Group
Inadequate business continuity capability across the Group
could lead to significant business disruption which may have a
could lead to significant business disruption which may have a
material adverse impact on the Group’s financial
material adverse impact on the Group’s financial
performance and profitability.
performance and profitability.
9. Natural Disasters
9. Natural Disasters
The Group’s operations (including its ability to open stores),
The Group’s operations (including its ability to open stores),
supply chain and profitability could be materially impacted by
supply chain and profitability could be materially impacted by
natural disasters, extreme weather events (such as floods,
natural disasters, extreme weather events (such as floods,
drought and bushfires), and other catastrophic events outside
drought and bushfires), and other catastrophic events outside
of the Group’s control. In addition, demand for certain
of the Group’s control. In addition, demand for certain
products supplied by the Group could be impacted by levels
products supplied by the Group could be impacted by levels
of consumer participation in activities that may be affected
of consumer participation in activities that may be affected
by catastrophic or extreme weather events. There is also a risk
by catastrophic or extreme weather events. There is also a risk
that, with time, the frequency and intensity of natural disasters
that, with time, the frequency and intensity of natural disasters
and extreme weather events may increase if climate change
and extreme weather events may increase if climate change
accelerates or worsens.
accelerates or worsens.
10. Sustainability
10. Sustainability
The sustainability of the Group’s business involves maintaining
The sustainability of the Group’s business involves maintaining
and improving a number of practices including identifying
and improving a number of practices including identifying
issues in the Group’s supply chain (including modern slavery
issues in the Group’s supply chain (including modern slavery
practices), sourcing sustainable materials and packaging,
practices), sourcing sustainable materials and packaging,
fostering product compliance systems that improve product
fostering product compliance systems that improve product
safety, promoting gender equality and reducing carbon
safety, promoting gender equality and reducing carbon
emissions. An actual or perceived failure to adequately
emissions. An actual or perceived failure to adequately
address sustainability-related issues may have an adverse
address sustainability-related issues may have an adverse
impact on the Group’s financial performance, reputation and
impact on the Group’s financial performance, reputation and
operations.
operations.
11. Legal, Regulatory and Compliance
11. Legal, Regulatory and Compliance
The Group is required to maintain compliance with all
The Group is required to maintain compliance with all
applicable laws and regulations, including those relating to
applicable laws and regulations, including those relating to
consumer protection, product quality, ethical sourcing and
consumer protection, product quality, ethical sourcing and
transport. Failure to comply with these laws and regulations
transport. Failure to comply with these laws and regulations
could result in regulatory enforcement action and other
could result in regulatory enforcement action and other
claims which could have a material adverse impact on the
claims which could have a material adverse impact on the
Group’s reputation, financial performance and profitability.
Group’s reputation, financial performance and profitability.
Refer also to the separate risk factor outlined above under
Refer also to the separate risk factor outlined above under
‘Industrial relations’.
‘Industrial relations’.
Mitigating Actions (including but not limited to)
Mitigating Actions (including but not limited to)
As a retailer, the protection of customer, team, third party and
As a retailer, the protection of customer, team, third party and
company data is critical to Super Retail Group’s operations.
company data is critical to Super Retail Group’s operations.
Controls include:
Controls include:
Cyber policy;
Cyber policy;
Cyber Security training;
Cyber Security training;
Incident response procedures;
Incident response procedures;
Antivirus scanning;
Antivirus scanning;
Intrusion detection;
Intrusion detection;
Security Operations Centre;
Security Operations Centre;
Hardening of devices;
Hardening of devices;
Disaster recovery plan; and
Disaster recovery plan; and
Business continuity plan.
Business continuity plan.
Additional controls implemented to mitigate the impacts of
Additional controls implemented to mitigate the impacts of
COVID-19 include:
COVID-19 include:
Refresher for enhanced security awareness training
Refresher for enhanced security awareness training
(phishing); and
(phishing); and
Active monitoring by Information Security.
Active monitoring by Information Security.
Business continuity policy;
Business continuity policy;
Brand and Divisional business continuity plans;
Brand and Divisional business continuity plans;
Disaster recovery plan;
Disaster recovery plan;
Training and awareness program;
Training and awareness program;
Enhanced bandwidth to support work from home; and
Enhanced bandwidth to support work from home; and
Review IT disaster recovery plans to enhance our offsite
Review IT disaster recovery plans to enhance our offsite
backup and recovery capabilities.
backup and recovery capabilities.
Local store emergency plans;
Local store emergency plans;
The Group Incident Management Plan; and
The Group Incident Management Plan; and
Monitor weather conditions.
Monitor weather conditions.
The Group’s Sustainability Strategy sets out the
The Group’s Sustainability Strategy sets out the
commitments we aim to achieve by 2030, with key
commitments we aim to achieve by 2030, with key
sustainability indicators such as safety, product,
sustainability indicators such as safety, product,
compliance with safety standards and responsible
compliance with safety standards and responsible
sourcing practices monitored and reported monthly to the
sourcing practices monitored and reported monthly to the
Executive Leadership Team and the Board of Directors;
Executive Leadership Team and the Board of Directors;
Commitment to reduce our carbon emissions by 20 per
Commitment to reduce our carbon emissions by 20 per
cent by 2030 and the Group continues to invest in a range
cent by 2030 and the Group continues to invest in a range
of energy efficiency initiatives across the Brands and
of energy efficiency initiatives across the Brands and
supply chain;
supply chain;
Monitoring and managing energy consumption in support
Monitoring and managing energy consumption in support
offices, distribution centres and the store retail network;
offices, distribution centres and the store retail network;
Commitment for gender equality in leadership roles;
Commitment for gender equality in leadership roles;
Product compliance system; and
Product compliance system; and
Responsible sourcing framework.
Responsible sourcing framework.
Policies, procedures and compliance systems;
Policies, procedures and compliance systems;
Group Compliance Framework;
Group Compliance Framework;
Code of Conduct;
Code of Conduct;
Whistle-blower hotline;
Whistle-blower hotline;
Monitor changes to regulations and laws;
Monitor changes to regulations and laws;
Compliance training modules; and
Compliance training modules; and
house legal team;
house legal team;
Dedicated in
Dedicated in
‑
‑
Evaluate any litigation claims and legal proceedings to
Evaluate any litigation claims and legal proceedings to
assess our risks on a principled basis and endeavour to
assess our risks on a principled basis and endeavour to
manage our exposure to such litigation or other legal
manage our exposure to such litigation or other legal
proceedings effectively.
proceedings effectively.
DIRECTORS’ REPORT (continued)
3.
3.2
(f)
Operating and Financial Review (continued)
Review of Financial Condition (continued)
Material Business Risks (continued)
Risks
12. Financial Risk
The Group’s activities expose it to a number of financial
risks. The Group adopts a financial risk management program
which seeks to minimise potential adverse impacts on the
financial performance of the Group.
Mitigating Actions (including but not limited to)
Financial risks and specific risk management approaches
are reported in more detail in the Notes to the
Consolidated Financial Statements.
There are also other changes in the domestic and global
macroeconomic environment associated with the events
relating to COVID-19 that are beyond the control of the Group
and may be exacerbated in an economic recession or
downturn. These include, but are not limited to:
•
changes in inflation, interest rates and foreign currency
exchange rates;
changes in employment levels and labour costs;
changes in aggregate investment and economic output;
and
other changes in economic conditions which may affect
the revenue or costs of the Group.
•
•
•
3.3
Dividends
Dividends paid or declared by the Group to members since the end of the previous financial year were:
Declared and paid during the year:
2019 final fully franked dividend
2020 interim fully franked dividend – cancelled
Declared after end of year:
2020 final fully franked dividend
3.4
Significant Changes in the State of Affairs
Cents per share
Total amount
$m
Payment date
28.5
-
56.2
-
26 September 2019
n/a
19.5
44.0
2 October 2020
There were no significant changes in the Group’s state of affairs during the period other than that described in section 3.5 below.
3.5
Matters Subsequent to the End of the Financial Year
On 15 June 2020, the Group announced an underwritten 1 for 7 accelerated pro rata non-renounceable entitlement offer to raise
equity of approximately $202.9 million at a fixed price of $7.19 per share. The equity raising comprised an institutional entitlement
offer which settled on 24 June 2020 and a retail entitlement offer which settled on 9 July 2020. As a result of the retail entitlement
6,073,995 new shares were issued on 10 July 2020 for proceeds of $43.6 million. The total number of ordinary shares after the equity
raising was 225,771,702.
On 7 August 2020, the Group cancelled its bilateral liquidity facility with ANZ for $100 million as it had been fully repaid on 1 June 2020
and was surplus to requirements.
3.6
Likely Developments and Future Prospects
Information on likely developments in the operations of the Group is set out in this report under the section Review of Financial
Condition. Further information on the expected results of operations has not been included in this report because the Directors
believe it would be likely to result in unreasonable prejudice to the Group.
3.7
Environmental Regulation
The Group’s environmental obligations are regulated under State, Territory, Federal and International Law. The Group has an
Environmental Management System in place and a policy of complying with its environmental performance obligations. All material
environmental performance obligations are monitored by the Board. No environmental breaches have been notified to the Group
during the period ended 27 June 2020.
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DIRECTORS’ REPORT (continued)
9.
Rounding of amounts
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, issued by
the Australian Securities and Investments Commission, relating to the ‘rounding off’ of amounts in the Directors’ Report. Amounts in
the Directors’ Report have been rounded off in accordance with that instrument to the nearest hundred thousand dollars or in certain
cases to the nearest dollar.
This report is made in accordance with a resolution of the Directors.
S A Pitkin
Chair
Brisbane
24 August 2020
A M Heraghty
Group Managing Director and
Chief Executive Officer
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DIRECTORS’ REPORT (continued)
DIRECTORS’ REPORT (continued)
4.
4.
Non-Audit Services
Non-Audit Services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s
expertise and experience with the Company and/or the Group are important.
expertise and experience with the Company and/or the Group are important.
The Board of Directors has considered the position and, in accordance with the advice received from the Audit and Risk Committee,
The Board of Directors has considered the position and, in accordance with the advice received from the Audit and Risk Committee,
is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed
is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed
by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the auditor, as set out below, did
by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the auditor, as set out below, did
not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:
not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:
all non-audit services have been reviewed by the Audit and Risk Committee to ensure they do not impact the impartiality and
all non-audit services have been reviewed by the Audit and Risk Committee to ensure they do not impact the impartiality and
objectivity of the auditor;
objectivity of the auditor;
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for
Professional Accountants, including reviewing or auditing the auditor’s own work, acting in a management or a decision-making
Professional Accountants, including reviewing or auditing the auditor’s own work, acting in a management or a decision-making
capacity for the Company, acting as advocate for the Company or jointly sharing economic risk and rewards.
capacity for the Company, acting as advocate for the Company or jointly sharing economic risk and rewards.
During the period the following fees were paid or payable for services provided by the auditor PricewaterhouseCoopers and its
During the period the following fees were paid or payable for services provided by the auditor PricewaterhouseCoopers and its
network firms for audit and non-audit services provided during the year:
network firms for audit and non-audit services provided during the year:
Audit Services
Audit Services
PricewaterhouseCoopers Australian firm:
PricewaterhouseCoopers Australian firm:
Remuneration for audit and review services
Remuneration for audit and review services
Other assurance(1)
Other assurance(1)
Total remuneration for audit and review services
Total remuneration for audit and review services
Taxation and Other Services
Taxation and Other Services
PricewaterhouseCoopers Australian firm:
PricewaterhouseCoopers Australian firm:
Taxation Services
Taxation Services
Equity raise procedures
Equity raise procedures
Network firms of PricewaterhouseCoopers Australia:
Network firms of PricewaterhouseCoopers Australia:
Taxation Services
Taxation Services
Total remuneration for non-audit services
Total remuneration for non-audit services
(1) Cyber security review.
(1) Cyber security review.
5.
5.
Corporate Governance Statement
Corporate Governance Statement
2020
2020
$
$
2019
2019
$
$
855,736
855,736
-
-
855,736
855,736
258,577
258,577
45,900
45,900
80,380
80,380
384,857
384,857
807,976
807,976
13,407
13,407
821,383
821,383
295,484
295,484
-
-
56,283
56,283
351,767
351,767
The Group’s Corporate Governance Statement sets out the corporate governance framework adopted by the Board of Super Retail
The Group’s Corporate Governance Statement sets out the corporate governance framework adopted by the Board of Super Retail
Group Limited. This statement is available on the Super Retail Group external website:
Group Limited. This statement is available on the Super Retail Group external website:
http://superretailgroup.com.au
http://superretailgroup.com.au
6.
6.
Proceedings on behalf of the Company
Proceedings on behalf of the Company
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the
Corporations Act 2001.
Corporations Act 2001.
7.
7.
Auditors Independence Declaration
Auditors Independence Declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page
48.
48.
8.
8.
Remuneration Report (Audited)
Remuneration Report (Audited)
The audited remuneration report is set out on pages 50 to 78.
The audited remuneration report is set out on pages 50 to 78.
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2019 – 2020
Remuneration Report
Audited
F O R T H E Y E A R E N D E D 2 7 J U N E 2 0 2 0
Super Retail Group Limited
ABN: 81 108 676 204
ASX Code: SUL
Auditor’s Independence Declaration
Auditor’s Independence Declaration
As lead auditor for the audit of Super Retail Group Limited for the year ended 27 June 2020, I declare
As lead auditor for the audit of Super Retail Group Limited for the year ended 27 June 2020, I declare
that to the best of my knowledge and belief, there have been:
that to the best of my knowledge and belief, there have been:
(a)
(a)
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
relation to the audit; and
(b)
(b)
no contraventions of any applicable code of professional conduct in relation to the audit.
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Super Retail Group Limited and the entities it controlled during the
This declaration is in respect of Super Retail Group Limited and the entities it controlled during the
period.
period.
Paddy Carney
Paddy Carney
Partner
Partner
PricewaterhouseCoopers
PricewaterhouseCoopers
Brisbane
Brisbane
24 August 2020
24 August 2020
PricewaterhouseCoopers, ABN 52 780 433 757
PricewaterhouseCoopers, ABN 52 780 433 757
480 Queen Street, BRISBANE QLD 4000, GPO Box 150, BRISBANE QLD 4001
480 Queen Street, BRISBANE QLD 4000, GPO Box 150, BRISBANE QLD 4001
T: +61 7 3257 5000, F: +61 7 3257 5999, www.pwc.com.au
T: +61 7 3257 5000, F: +61 7 3257 5999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
Liability limited by a scheme approved under Professional Standards Legislation.
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FOR THE YEAR
FOR THE YEAR
ENDED 27 JUNE 2020
ENDED 27 JUNE 2020
Remuneration
Report (Audited)
Remuneration
Remuneration
Report (Audited)
Report (Audited)
CONTENTS
CONTENTS
Section 1
Section 1
Section 2
Section 2
Section 3
Section 3
Section 4
Section 4
Section 5
Section 5
Section 6
Section 6
Section 7
Section 7
Section 8
Section 8
Section 9
Section 9
Summary
Summary
Key Management Personnel
Key Management Personnel
FY20 Executive Remuneration Overview
FY20 Executive Remuneration Overview
FY20 Performance and Remuneration Outcomes
FY20 Performance and Remuneration Outcomes
Detail of the FY20 Executive Total Reward Framework
Detail of the FY20 Executive Total Reward Framework
Executive Remuneration Changes for FY21
Executive Remuneration Changes for FY21
Non-Executive Directors’ Remuneration Arrangements
Non-Executive Directors’ Remuneration Arrangements
Executive KMP Remuneration Outcomes for FY20
Executive KMP Remuneration Outcomes for FY20
Remuneration Governance
Remuneration Governance
Introduction
Introduction
The Directors of Super Retail Group present this Remuneration Report for the 52-week period ended 27 June 2020. The
The Directors of Super Retail Group present this Remuneration Report for the 52-week period ended 27 June 2020. The
Remuneration Report outlines the Group’s remuneration philosophy and practices, explains how the Group’s 2020
Remuneration Report outlines the Group’s remuneration philosophy and practices, explains how the Group’s 2020
performance has driven executive remuneration outcomes, and provides the details of specific remuneration
performance has driven executive remuneration outcomes, and provides the details of specific remuneration
arrangements that apply to Key Management Personnel (KMP) in accordance with section 300A of the Corporations Act
arrangements that apply to Key Management Personnel (KMP) in accordance with section 300A of the Corporations Act
2001 (Cth) (Corporations Act) and applicable accounting standards.
2001 (Cth) (Corporations Act) and applicable accounting standards.
REMUNERATION REPORT APPROVAL AT 2019 ANNUAL GENERAL MEETING (AGM)
REMUNERATION REPORT APPROVAL AT 2019 ANNUAL GENERAL MEETING (AGM)
Our Remuneration Report for the 2019 financial year received positive shareholder support at the 2019 AGM, with 95.3 per
Our Remuneration Report for the 2019 financial year received positive shareholder support at the 2019 AGM, with 95.3 per
cent of votes in favour of adoption.
cent of votes in favour of adoption.
SECTION 1
SECTION 1
Summary
Summary
GROUP FINANCIAL PERFORMANCE
GROUP FINANCIAL PERFORMANCE
Overall, the Group delivered a
Overall, the Group delivered a
solid trading performance,
solid trading performance,
particularly in light of the
particularly in light of the
impact of the COVID-19
impact of the COVID-19
pandemic. After a challenging
pandemic. After a challenging
first half, the Group’s omni-retail
first half, the Group’s omni-retail
strategy has enabled the
strategy has enabled the
business to adapt quickly to
business to adapt quickly to
changing consumer behaviour
changing consumer behaviour
and deliver a strong second-
and deliver a strong second-
half performance. This has
half performance. This has
resulted in a full-year result that
resulted in a full-year result that
includes:
includes:
Total Group sales of $2.83
Total Group sales of $2.83
billion - an increase of 4.2
billion - an increase of 4.2
per cent
per cent
Segment EBITDA of $328.1
Segment EBITDA of $328.1
million - an increase of 4.3
million - an increase of 4.3
per cent
per cent
Segment EBIT of $236.1
Segment EBIT of $236.1
million - an increase of 3.5
million - an increase of 3.5
per cent
per cent
Normalised NPAT of $154.1
Normalised NPAT of $154.1
million - an increase of 1 per
million - an increase of 1 per
cent
cent
Cash flow from operating
Cash flow from operating
activities increased $164.0
activities increased $164.0
million compared to prior
million compared to prior
corresponding period.
corresponding period.
Segment results exclude pre-tax
Segment results exclude pre-tax
abnormal items of $54.1 million that
abnormal items of $54.1 million that
include remediation of prior years’
include remediation of prior years’
team member underpayments, the
team member underpayments, the
exit of certain non-core businesses,
exit of certain non-core businesses,
support office restructure costs,
support office restructure costs,
accelerated amortisation of certain
accelerated amortisation of certain
assets and termination of interest
assets and termination of interest
rate swaps.
rate swaps.
Segment results exclude the impact
Segment results exclude the impact
of AASB 16 Leases to enable a
of AASB 16 Leases to enable a
meaningful comparison with the prior
meaningful comparison with the prior
corresponding period.
corresponding period.
IMPACT OF COVID-19
IMPACT OF COVID-19
The Group continued to trade
The Group continued to trade
throughout the period of
throughout the period of
government restrictions, with the
government restrictions, with the
exception of stores that were
exception of stores that were
mandated for closure by
mandated for closure by
government including New Zealand
government including New Zealand
and three stores in Tasmania.
and three stores in Tasmania.
COVID-19 has had a significant
COVID-19 has had a significant
impact on the Group. Pre-emptive
impact on the Group. Pre-emptive
actions were initiated to protect the
actions were initiated to protect the
health and safety of team members
health and safety of team members
and customers.
and customers.
In addition, a number of
In addition, a number of
measures were taken to
measures were taken to
protect liquidity and profit,
protect liquidity and profit,
including the cancellation of
including the cancellation of
the interim dividend of $42.5
the interim dividend of $42.5
million and the securing of an
million and the securing of an
additional $100 million liquidity
additional $100 million liquidity
facility. The Group was also well
facility. The Group was also well
supported by trade partners
supported by trade partners
who rescheduled committed
who rescheduled committed
inventory purchases and
inventory purchases and
extended payment terms.
extended payment terms.
These actions have positioned
These actions have positioned
the Group to trade through an
the Group to trade through an
extremely volatile period.
extremely volatile period.
The Group’s omni-retail
The Group’s omni-retail
capability enabled it to
capability enabled it to
respond quickly to the
respond quickly to the
changing environment, which
changing environment, which
led to elevated levels of online
led to elevated levels of online
demand.
demand.
Keeping stores open while pivoting
Keeping stores open while pivoting
to meet increased demand in online
to meet increased demand in online
sales channels enabled the Group
sales channels enabled the Group
to successfully navigate an
to successfully navigate an
extremely challenging period and
extremely challenging period and
deliver 44 per cent annual online
deliver 44 per cent annual online
sales growth.
sales growth.
FOR THE YEAR
ENDED 27 JUNE 2020
deferred into performance rights for a
12-month period. The quantum of the
adjustment was determined by the
Board, using a sliding scale based on
the performance of the PBT measures’
distance from target. An above
target result for PBT resulted in the
adjustment of 14.8 percentage
points.
Additionally, as communicated in
2019, in FY20 the STI award for all
Executive KMP will be paid 80 per cent
cash and 20 per cent equity, which
will vest 10 per cent in September
2021, and 10 per cent in September
2022. This supports an increase in
executive shareholding, enhances risk
management, executive retention,
and reflects broader market practice.
FRONTLINE TEAM THANK YOU
Super Retail Group’s long-held belief
that our frontline leaders and their
teams are a significant business
advantage has been strengthened
during the year. We have asked a lot
from teams in stores and distribution
centres during the bushfire and
COVID-19 events. For many, this has
been a stressful and challenging
period. Nevertheless, they have
maintained a strong focus on team
wellbeing and delivered for our
customers.
In recognition of this significant
contribution the Group will pay these
frontline leaders and their teams a
one-off thank you payment of up to
$1,000.
LONG-TERM INCENTIVE (LTI)
The FY18 LTI grant reached the end
of its three-year performance period
on 27 June 2020. Only the threshold
Return on Capital (ROC) hurdle was
achieved. As a result 38.3 per cent
of the total FY18 grant will vest.
For further detail, refer to Section 4.
Following approval at the 2019 AGM,
a one-off co-investment grant of
Performance Rights was awarded to
Mr Heraghty, to the value of $400,000
(vesting over a three to five-year
period).
Group sales rebounded strongly
during the fourth quarter as the
easing of COVID-19 restrictions
led to a significant uplift in
domestic tourism and travel,
personal fitness and outdoor
leisure activities. Following a 26.2
per cent decline in monthly like-
for-like sales in April (versus prior
corresponding period) during
peak COVID-19 lockdown,
monthly like-for like sales
increased by 26.5 per cent in
May and 27.7 per cent in June.
Following a successful $203 million
equity raising that was
completed in July, the Group has
a strong balance sheet, with no
net debt (excluding lease
liabilities) and is well positioned to
execute its omni-retail strategy
and pursue organic market share
growth opportunities.
Remuneration outcomes recognise
the impact of COVID-19 on the
business and the interests of
stakeholders.
EXECUTIVE SHORT-TERM INCENTIVE (STI)
The Group’s financial performance
has resulted in the opening of the
normalised PBT performance gate to
the STI Scheme. The Executive KMP STI
achievement, as detailed in Section 4
of this report, was commensurate with
the performance of the Company
during the FY20 year. The Board
considered the application of
discretion as a result of the COVID-19
pandemic, with reference to the
guidance issued by ASIC.(1)
Recognising the impact of COVID-19
on a range of the Group’s
stakeholders, the Board applied a
COVID-19 adjustment and moderated
the in-year STI outcomes downward
for Executive KMP.
In considering COVID-19’s impact on
performance, the Board sought to
moderate and contextualise the
strong Group performance by
considering adverse impacts on
stakeholders, and in particular:
The cancellation of the interim
dividend of $42.5 million on
26 March 2020.
The Group had two businesses
qualify for government wage
support during March to June of
$6.5 million. Both Supercheap Auto
and Macpac qualified for the
‘wage subsidy’ in New Zealand and
Macpac qualified for the
JobKeeper allowance in Australia.
The effect of the government
support was that $1.5 million
subsidised store wages and $5.0
million paid team members who
were impacted by government
mandated restrictions.
The impact on team members with
a 13 per cent reduction of Support
Office team members, and
temporary reduction in available
hours for casual team members
during April and May.
Further, the Board took into account the
unprecedented challenge and
complexity faced by management in
achieving many positive outcomes,
including in particular:
During FY20 Total Shareholder
Return for the Group for the 52-
week period ended 27 June 2020 of
+2.9 per cent outperformed peers
in the index (+1.7 per cent
Consumer Discretionary sector).
Normalised EPS at 78.0 cents was
an increase of one per cent on the
prior year of 77.3 cents. EPS was
slightly diluted (by 0.1 cents) due to
the capital raising.
No reductions in permanent store-
based team member employment,
together with the full payment of
any team member earned
incentive during the period.
Accordingly, the Board determined
management’s STI outcomes be
partially reduced and deferred. The
Board followed a rigorous process to
assess impacts to stakeholders and the
approach was externally reviewed. This
outcome is a fair recognition of both
the adverse impacts on stakeholders
and the positive impacts of good
management execution delivering
strong company performance in the
period.
The COVID-19 adjustment moderates
the STI outcomes by applying a 7.4
percentage point reduction to the raw
STI score and requiring a further 7.4
percentage points of STI outcome to be
(1) 12 June 2020, ASIC Guidance Note: Board oversight of executive variable pay decisions during the COVID-19 pandemic.
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Remuneration
Remuneration
Report (Audited)
Report (Audited)
EXECUTIVE REMUNERATION FRAMEWORK
EXECUTIVE REMUNERATION FRAMEWORK
CHANGES FOR FY21
CHANGES FOR FY21
GROUP MANAGING DIRECTOR
GROUP MANAGING DIRECTOR
AND CHIEF EXECUTIVE OFFICER
AND CHIEF EXECUTIVE OFFICER
The Group will revise the Executive
The Group will revise the Executive
total reward framework and
total reward framework and
opportunity in response to the two-
opportunity in response to the two-
year business plan formulated in the
year business plan formulated in the
context of the COVID-19 pandemic.
context of the COVID-19 pandemic.
The revisions seek to align the reward
The revisions seek to align the reward
structure with the measurements of
structure with the measurements of
performance set by the Board for the
performance set by the Board for the
medium term.
medium term.
It is planned to issue one grant of
It is planned to issue one grant of
performance share rights for FY21 and
performance share rights for FY21 and
FY22 and set the metrics by reference
FY22 and set the metrics by reference
to the two-year business plan.
to the two-year business plan.
It is expected that the metrics setting
It is expected that the metrics setting
for the LTI plan and timing of grants will
for the LTI plan and timing of grants will
revert to prior practice in FY23.
revert to prior practice in FY23.
Mr Heraghty’s remuneration was
Mr Heraghty’s remuneration was
set by the Board in accordance with the
set by the Board in accordance with the
Group’s Remuneration Framework upon
Group’s Remuneration Framework upon
his commencement on 20 February
his commencement on 20 February
2019.
2019.
There will be a moderate increase to Mr
There will be a moderate increase to Mr
Heraghty’s base salary in FY21.
Heraghty’s base salary in FY21.
Mr Heraghty will be eligible to
Mr Heraghty will be eligible to
participate in the Group’s revised STI
participate in the Group’s revised STI
and LTI schemes for FY21 and FY22.
and LTI schemes for FY21 and FY22.
The LTI grant will be subject to
The LTI grant will be subject to
shareholder approval at the 2020 AGM.
shareholder approval at the 2020 AGM.
For further detail refer to Section 6.
For further detail refer to Section 6.
FOR THE YEAR
FOR THE YEAR
ENDED 27 JUNE 2020
ENDED 27 JUNE 2020
NON-EXECUTIVE DIRECTOR (NED) FEES
NON-EXECUTIVE DIRECTOR (NED) FEES
There was no change to NED fees
There was no change to NED fees
(including Committee fees) in FY20.
(including Committee fees) in FY20.
Subject to shareholder approval at
Subject to shareholder approval at
the 2020 AGM, an increase to the
the 2020 AGM, an increase to the
NED fee pool is proposed for FY21 to
NED fee pool is proposed for FY21 to
accommodate the addition of a
accommodate the addition of a
seventh NED as well as future NED fee
seventh NED as well as future NED fee
and Committee fee increases.
and Committee fee increases.
There will be no change to the base
There will be no change to the base
fees for NEDs in FY21.
fees for NEDs in FY21.
Remuneration
Report (Audited)
SECTION 2
Key Management Personnel
FOR THE YEAR
ENDED 27 JUNE 2020
The names and titles of the Group’s KMP, being those persons having authority and responsibility for
planning, directing and controlling the activities of the entity, are set out below.
Name
Chair
Position
Term as KMP
S A Pitkin
Chair and Independent Non-Executive Director
1 July 2010
Non-Executive Directors
R A Rowe
D J Eilert
Non-Executive Director
Independent Non-Executive Director
H L Mowlem
Independent Non-Executive Director
8 April 2004
21 October 2015
13 June 2017
P D Everingham
Independent Non-Executive Director
19 December 2017
S A Chaplain
Independent Non-Executive Director
G T Dunne
Independent Non-Executive Director
31 March 2020
31 March 2020
Former Non-Executive Directors
L K Inman
Independent Non-Executive Director
21 October 2015 to
22 October 2019
Managing Director and CEO
A M Heraghty(1)
Group Managing Director and
Chief Executive Officer (Group MD and CEO)
27 April 2015
Executives
D J Burns
Chief Financial Officer
G S Williams
Managing Director - rebel
A Brandon
Chief Executive Officer - Macpac
B L Ward(2)
Managing Director - Supercheap Auto
P A Bradshaw
Managing Director - BCF
Former Executives
C D Wilesmith
Managing Director - Supercheap Auto
(1) A M Heraghty commenced in the role of Group MD & CEO on 20 February 2019.
(2) B L Ward commenced with the Group on 29 July 2019.
3 December 2012
2 April 2019
1 May 2019
1 August 2019
25 November 2019
29 June 2014 to
31 July 2019
B L Ward, Managing Director - Supercheap Auto, joined the business in August 2019. Mr Ward is an
experienced retail executive with almost 25 years’ experience and was previously Managing Director,
Global Business Coordination for ALDI Supermarkets based in Germany.
P A Bradshaw, Managing Director - BCF, joined the business in November 2019. Mr Bradshaw was
previously Chief Store Operations Officer at Coles Group and brings more than 30 years of global
retailing experience to the Group.
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Report (Audited)
SECTION 3
SECTION 3
FY20 Executive Remuneration Overview
FY20 Executive Remuneration Overview
FOR THE YEAR
FOR THE YEAR
ENDED 27 JUNE 2020
ENDED 27 JUNE 2020
Remuneration
Report (Audited)
Our Remuneration
Objectives
Attract, motivate and
retain executive talent.
Differentiate reward to
drive performance,
including values and
behaviours.
FOR THE YEAR
ENDED 27 JUNE 2020
An appropriate balance
of fixed and ‘at-risk’
components focused on
long-term strategy and
short-term milestones.
Alignment to
shareholder interests
and value creation
through equity
components granted as
part of long-term
incentives or through the
deferral of cash based
short-term incentives into
equity.
ALIGNMENT OF OBJECTIVES TO OUR REMUNERATION FRAMEWORK
Strategic Intent
and Market
Positioning
Base Salary Package
Short Term Incentive (STI)
Long Term Incentive (LTI)
Remuneration Mix
Positioned at the
median compared to
relevant market-based
data (similarly sized S&P/
ASX200 companies),
taking into consideration
expertise and
performance in
the role.
To achieve Board
approved targets, in
support of the execution
of the Group’s strategy.
Total target cash, (base
salary package and STI
combined) is intended
to be positioned within
the third quartile of
relevant benchmark
comparisons.
To reward Executive
KMP for sustainable
long-term growth
aligned to shareholders
interests.
Combined, base salary
package, STI and LTI are
intended to be
positioned within the
third quartile of relevant
benchmark
comparisons.
‘At-risk’ remuneration
consistent with the
broader market.
Deferral of STI into equity
extends the timeframe
for receipt of variable
reward outcomes.
Our philosophy is to provide flexible and market competitive remuneration arrangements that reflect the
Our philosophy is to provide flexible and market competitive remuneration arrangements that reflect the
performance of the Group and its businesses.
performance of the Group and its businesses.
The key elements are:
The key elements are:
Market
Market
competitive
competitive
Aligned to
Aligned to
shareholders’
shareholders’
sustainable
sustainable
value
value
Pay-for-
Pay-for-
performance
performance
environment -
environment -
specific and
specific and
measurable
measurable
Equitable and
Equitable and
consistent
consistent
across the
across the
group
group
Recognise
Recognise
performance
performance
and
and
experience
experience
Aligned to
Aligned to
values and
values and
prudent risk
prudent risk
management
management
FY20 EXECUTIVE REMUNERATION FRAMEWORK
FY20 EXECUTIVE REMUNERATION FRAMEWORK
The Group MD and CEO, together with the other Executive KMP, are remunerated under a Total Reward
The Group MD and CEO, together with the other Executive KMP, are remunerated under a Total Reward
Framework. The diagram below summarises the FY20 remuneration framework over the period for which FY20
Framework. The diagram below summarises the FY20 remuneration framework over the period for which FY20
remuneration is delivered and when the awards may vest.
remuneration is delivered and when the awards may vest.
YEAR 1
YEAR 1
YEAR 2
YEAR 2
YEAR 3
YEAR 3
YEAR 4
YEAR 4
FIXED REMUNERATION
FIXED REMUNERATION
Base pay, superannuation, non-
Base pay, superannuation, non-
monetary benefits
monetary benefits
STI
STI
Received as 80 per cent cash,
Received as 80 per cent cash,
20 per cent deferral; Measured
20 per cent deferral; Measured
across a Balanced Scorecard
across a Balanced Scorecard
including Group PBT; Divisional
including Group PBT; Divisional
EBIT; Working Capital efficiency;
EBIT; Working Capital efficiency;
individual performance targets
individual performance targets
50 per cent
50 per cent
of deferred
of deferred
STI award
STI award
to vest
to vest
50 per cent
50 per cent
of deferred
of deferred
STI award
STI award
to vest
to vest
LTI
LTI
Performance Rights, granted in year one and subject to service and
Performance Rights, granted in year one and subject to service and
performance conditions for three and four years from grant date.
performance conditions for three and four years from grant date.
Earnings per share (EPS); Return on Capital (ROC).
Earnings per share (EPS); Return on Capital (ROC).
50 per cent
50 per cent
of rights
of rights
vest
vest
50 per cent
50 per cent
of rights
of rights
vest
vest
FY20 EXECUTIVE REMUNERATION OBJECTIVES
FY20 EXECUTIVE REMUNERATION OBJECTIVES
The Total Reward Framework is designed to appropriately reward executives for their contribution to the
The Total Reward Framework is designed to appropriately reward executives for their contribution to the
success of the Group by aligning all remuneration elements to the delivery of both short-term milestones
success of the Group by aligning all remuneration elements to the delivery of both short-term milestones
and long-term sustainable value to the Group’s shareholders. Further detail about the FY20 Executive Total
and long-term sustainable value to the Group’s shareholders. Further detail about the FY20 Executive Total
Reward Framework is provided in Section 5 of this report.
Reward Framework is provided in Section 5 of this report.
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Report (Audited)
FOR THE YEAR
FOR THE YEAR
ENDED 27 JUNE 2020
ENDED 27 JUNE 2020
Remuneration
Report (Audited)
FOR THE YEAR
ENDED 27 JUNE 2020
SECTION 4
SECTION 4
FY20 Performance and Remuneration Outcomes
FY20 Performance and Remuneration Outcomes
Significant events/ items are
Significant events/ items are
considered unusual by their nature
considered unusual by their nature
and size and/or not in the ordinary
and size and/or not in the ordinary
course of the business.
course of the business.
In FY20, the principal adjustments
In FY20, the principal adjustments
were in relation to:
were in relation to:
Costs incurred for historical
Costs incurred for historical
matters over multiple periods in
matters over multiple periods in
relation to team member
relation to team member
wage underpayments.
wage underpayments.
Business closure costs of Infinite
Business closure costs of Infinite
Retail and Autocrew. The
Retail and Autocrew. The
equity accounted results for
equity accounted results for
Autoguru are also excluded
Autoguru are also excluded
consistent with prior years as
consistent with prior years as
they are not part of the
they are not part of the
business strategy.
business strategy.
RELATIONSHIP OF REMUNERATION TO
RELATIONSHIP OF REMUNERATION TO
GROUP PERFORMANCE
GROUP PERFORMANCE
The STI Scheme and LTI Plan operate
The STI Scheme and LTI Plan operate
to create a clear link between
to create a clear link between
Executive remuneration and the
Executive remuneration and the
Group’s performance, motivating
Group’s performance, motivating
and rewarding the Group MD and
and rewarding the Group MD and
CEO and Executive KMP.
CEO and Executive KMP.
The performance of the
The performance of the
Group over the past five
Group over the past five
years is summarised in Table
years is summarised in Table
1.
1.
UNDERLYING PERFORMANCE
UNDERLYING PERFORMANCE
Each year, the Board reviews any
Each year, the Board reviews any
significant items, positive and
significant items, positive and
negative, and considers their
negative, and considers their
relevance for the PBT results. The
relevance for the PBT results. The
Board may adjust for any significant
Board may adjust for any significant
events/items to give a clearer
events/items to give a clearer
reflection of financial performance
reflection of financial performance
from one period to the next.
from one period to the next.
Table 1:
Table 1:
The Group’s incentive awards
are designed to align Executive
KMP remuneration with business
performance. This alignment is
demonstrated in Table 2 and
shows the variability in the history
of incentive plan outcomes for
participants. This table shows LTI
vesting percentages and
average STI outcome as a
percentage of maximum
opportunity.
The figures in Table 2 include the
adjustments made for the
underpayment of retail
management and Set Up team
members. This impact is detailed
in Tables 5 and 6.
Table 2:
Re-organisation costs: Support
Re-organisation costs: Support
office restructure costs and
office restructure costs and
asset accelerated amortisation
asset accelerated amortisation
that are significant due to their
that are significant due to their
size and not in the ordinary
size and not in the ordinary
course of operations (digital
course of operations (digital
acceleration driving write-
acceleration driving write-
down of software intangibles).
down of software intangibles).
The Board has reviewed the
The Board has reviewed the
adjustments on the normalised PBT
adjustments on the normalised PBT
for the purposes of determining
for the purposes of determining
remuneration outcomes in FY20. As
remuneration outcomes in FY20. As
a result of these adjustments, the
a result of these adjustments, the
PBT result for the purposes of
PBT result for the purposes of
determining remuneration
determining remuneration
outcomes was assessed at $217.4
outcomes was assessed at $217.4
million. The normalised PBT was
million. The normalised PBT was
$218.3 million and the statutory PBT
$218.3 million and the statutory PBT
was $155.8 million.
was $155.8 million.
LTI vesting
outcomes
Executive KMP
average STI
outcome as a
percentage of
the Executive STI
maximum
opportunity
2016(1)
2016(1)
Financial performance
Financial performance
Sales ($m)
Sales ($m)
Normalised profit before tax ($m)
Normalised profit before tax ($m)
Normalised post Tax ROC (%)
Normalised post Tax ROC (%)
Shareholder value created
Shareholder value created
Normalised earnings per share(¢)
Normalised earnings per share(¢)
Dividends per share (¢)
Dividends per share (¢)
Closing June share price ($)
Closing June share price ($)
(1) 2016 is a 53-week reporting period compared to 52 weeks for the other five years.
(1) 2016 is a 53-week reporting period compared to 52 weeks for the other five years.
2,422.2
2,422.2
155.9
155.9
10.7
10.7
55.1
55.1
41.5
41.5
8.77
8.77
2017
2017
2018
2018
2019
2019
2020
2020
2,465.8
2,465.8
190.5
190.5
13.0
13.0
68.9
68.9
46.5
46.5
8.20
8.20
2,570.4
2,570.4
201.9
201.9
13.1
13.1
73.7
73.7
49.0
49.0
8.10
8.10
2,710.4
2,710.4
206.8
206.8
13.3
13.3
77.3
77.3
50.0
50.0
8.23
8.23
2,825.2
2,825.2
218.3
218.3
14.5
14.5
78.0
78.0
19.5
19.5
8.14
8.14
FY20 REMUNERATION OUTCOMES
Short-Term Incentive Scorecard
Outcomes for FY20
For the year to 27 June 2020, the
normalised PBT target was set at
$215.3 million, 4.1 per cent higher
than the normalised PBT
achieved in the period to
29 June 2019 of $206.8 million.
The financial gateway for the STI
Scheme of $193.8 million (90 per
cent of target) was exceeded
and therefore, as per scheme
rules, Executive KMP scorecards
were activated.
Divisional profit is measured by
segment EBIT performance
against budget. In the year to
27 June 2020, both Supercheap
Auto and rebel divisions
achieved their EBIT budget.
The individual KPI and FY20
achievements, as determined by
the Board for the Group MD and
CEO and other Executive KMP,
are detailed in Table 3a and 3b.
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Report (Audited)
FOR THE YEAR
ENDED 27 JUNE 2020
Remuneration
Report (Audited)
FOR THE YEAR
ENDED 27 JUNE 2020
Table 3a: Group Managing Director and Chief Executive Officer Performance
The table below outlines the individual KPIs and FY20 achievements as determined by the Board for the
Group Managing Director and Chief Executive Officer – Mr Heraghty.
Table 3b outlines the individual KPIs and FY20 achievements as determined by the Board for other Executive
KMP. The impact of both the COVID-19 adjustment and the equity deferral for Executive KMP is detailed in
Table 4.
Measure
Weighting Actual
Commentary on Performance
Table 3b: Other Executive KMP Performance
Delivery of FY20
portfolio benefits
in accordance
with plan
Remediation and
stabilisation of
current workforce
planning
practices
Balanced
Scorecard
Group
Financial
Performance
Business
Improvement
Performance
range
PBT attributable
to members
35%
Target to
Stretch
Working Capital
Efficiency
15%
Stretch
30%
Stretch
The PBT result for the Group is $218.3 million.
This has been reduced to $217.4 million,
reflecting adjustments not included in
segment PBT.
The Group 12-month rolling average monthly
net inventory (excluding Group unallocated
inventory and creditors) result was $249.3
million.
Restructuring of FY20 Portfolio plan resulted in
significant reduction of spend while
maintaining delivery of benefits.
Stretch
Reflects marked improvement of current and
future practice, including the progress
toward the implementation of a new
workforce planning system.
Customer
Customer-
centricity
10%
Threshold to
target
Group Net Promoter Score (NPS) result of
60.7%
Organic growth
through existing
customers
Stretch
Solid full year performance with continued
focus on customer value saw growth in
active club members.
People/Risk
Safety
10%
Stretch
Total reportable injury frequency rate result of
10.58. This represents a 25 per cent
improvement year on year, with
improvements across all brands.
Risk
management
Target to
stretch
Measured by the reduction of control risk as
assessed by internal audit.
GROUP MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER – A HERAGHTY
The overall outcome of Mr Heraghty as the Group MD and CEO was assessed by the Board to be a performance
level of 135.4 per cent of target, driven by strong performance across the balanced scorecard.
A COVID-19 adjustment was subsequently applied to the scorecard outcome, resulting in an adjusted scorecard
outcome of 128 per cent.
This adjusted scorecard outcome results in an STI outcome payable to Mr Heraghty of $800,000, delivered as
follows:
$46,250 deferred over a one-year period (deferral to equity for a 12-month period under the COVID-19
adjustment);
$603,000 paid as cash; and
$150,750 deferred over a two-year period (deferral to equity under STI Scheme rules), with 50 per cent payable in
one year, 50 per cent payable in two years.
Name
Role
Financial
(50%)
Business
Improvement
(20–30%)
Customer
(10–15%)
People
(10–20%)
STI
scorecard
outcome
P A Bradshaw
MD - BCF
A Brandon
CEO - Macpac
Threshold
to target
Threshold
to target
Stretch
Target
Target
Target to stretch
to stretch
to stretch
Below threshold
Stretch
Stretch
Threshold
to target
D J Burns
B L Ward
Chief Financial
Officer
Target
to Stretch
Target
-
Target
Target to stretch
to Stretch
to Stretch
MD -
Supercheap
Auto
Target
to Stretch
Threshold
to target
Stretch
Target
Target to stretch
to Stretch
G S Williams
MD - rebel
Target
to Stretch
Stretch
Threshold
to target
Target
Target to stretch
to stretch
OTHER EXECUTIVE KMP
All Executive Leadership Team
members, including Executive
KMP, have had the same
COVID-19 adjustment applied to
their STI outcomes. The following
assessments for the other
Executive KMP were made.
Mr Brandon was assessed at 57.4
per cent of target as a result of
the disappointing performance
of Macpac in the first half.
Mr Burns’ performance was
assessed at 136.1 per cent of
target driven by
outperformance of PBT and
strong below-the-line metrics.
Mr Williams was assessed at 126.4
per cent of target driven by
strong group financial
performance and earning
performance of rebel.
Mr Ward and Mr Bradshaw were
KMP for a partial period of the
year (eleven months and seven
months, respectively). The
scheme applies but payment is
pro-rated.
Mr Ward was assessed at 127.5
per cent of target as a result of
strong group financial
performance and earning
performance of Supercheap
Auto.
Mr Bradshaw was assessed at
108.7 per cent of target as a
result of strong below-the-line
metrics, with some discretion
due to the uncontrollable
impact of the bushfires on the
business performance.
SUMMARY
The STI outcomes for
Executive KMP are reflected
in Table 12.
The FY20 STI payment was
determined on 20 July 2020.
The COVID-19 adjustment
moderates the STI outcomes by
applying a 7.4 percentage point
reduction to the raw STI score and
requiring a further 7.4 percentage
points of STI
outcome to be deferred into
performance rights for a 12-
month period.
Additionally, as communicated
in 2019, in FY20 the STI award for
all Executive KMP will be paid 80
per cent cash and 20 per cent
equity, which will vest 10 per
cent in September 2021, and 10
per cent in September 2022. This
supports an increase in
executive shareholding,
enhances risk management and
executive retention, and reflects
broader market practice.
The impact of both the COVID-
19 adjustment and the equity
deferral for Executive KMP are
reflected in Table 4.
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Remuneration
Remuneration
Report (Audited)
Report (Audited)
FOR THE YEAR
FOR THE YEAR
ENDED 27 JUNE 2020
ENDED 27 JUNE 2020
Remuneration
Report (Audited)
FOR THE YEAR
ENDED 27 JUNE 2020
STI Scorecard Outcomes
STI Scorecard Outcomes
Executive Director
Executive Director
A M Heraghty
A M Heraghty
Other Executive
Other Executive
KMP
KMP
P A Bradshaw
P A Bradshaw
A Brandon
A Brandon
D J Burns
D J Burns
B L Ward
B L Ward
G S Williams
G S Williams
Table 4: Impact of COVID-19 adjustment and equity deferral to STI for Executive KMP
Table 4: Impact of COVID-19 adjustment and equity deferral to STI for Executive KMP
STI Assessment
STI Assessment
Pre-Adjustment
Pre-Adjustment
STI Reduction
STI Reduction
(percentage
(percentage
points
points
foregone)
foregone)
STI
STI
Assessment
Assessment
Post
Post
Adjustment
Adjustment
Deferral into
Deferral into
Equity for 12
Equity for 12
Months Due to
Months Due to
COVID-19
COVID-19
Adjustment
Adjustment
STI for
STI for
Standard
Standard
Payment
Payment
135.4
135.4
7.4
7.4
128.0
128.0
7.4
7.4
120.6
120.6
108.7
108.7
57.4
57.4
136.1
136.1
127.5
127.5
126.4
126.4
7.4
7.4
7.4
7.4
7.4
7.4
7.4
7.4
7.4
7.4
$
$
Deferred
Deferred
into
into
Equity
Equity
for 12
for 12
months
months
101.3
101.3
50.0
50.0
128.7
128.7
120.1
120.1
119.0
119.0
7.4
7.4
7.4
7.4
7.4
7.4
7.4
7.4
7.4
7.4
93.9
93.9
42.6
42.6
121.3
121.3
112.7
112.7
111.6
111.6
STI for
STI for
Standard
Standard
Payment
Payment
STI Cash
STI Cash
Compon-
Compon-
ent 80%
ent 80%
STI
STI
Deferred
Deferred
Equity
Equity
20%
20%
Total STI
Total STI
Deferred
Deferred
into Equity
into Equity
STI
STI
Assessment
Assessment
Pre-
Pre-
Adjustment
Adjustment
COVID-19
COVID-19
Adjustment
Adjustment
Reduction
Reduction
STI Post
STI Post
Adjustme-
Adjustme-
nt
nt
(1)
(1)
(2)
(2)
(1)-(2)=(3)
(1)-(2)=(3)
(4)
(4)
(3)-(4)=(5)
(3)-(4)=(5)
(6)
(6)
(7)
(7)
(4)+(7)=(8)
(4)+(7)=(8)
846,250
846,250
46,250
46,250
800,000
800,000
46,250
46,250
753,750
753,750
603,000
603,000
150,750
150,750
197,000
197,000
205,443
205,443
13,986
13,986
191,457
191,457
13,986
13,986
177,471
177,471
141,977
141,977
35,494
35,494
49,480
49,480
71,750
71,750
9,250
9,250
62,500
62,500
9,250
9,250
53,250
53,250
42,600
42,600
10,650
10,650
19,900
19,900
595,438
595,438
32,375
32,375
563,063
563,063
32,375
32,375
530,688
530,688
424,550
424,550
106,138
106,138
138,513
138,513
513,188
513,188
29,785
29,785
483,403
483,403
29,785
29,785
453,618
453,618
362,894
362,894
90,724
90,724
120,509
120,509
553,000
553,000
32,375
32,375
520,625
520,625
32,375
32,375
488,250
488,250
390,600
390,600
97,650
97,650
130,025
130,025
2,785,068
2,785,068
164,021
164,021
2,621,047
2,621,047
164,021
164,021
2,457,026
2,457,026
1,965,621
1,965,621
491,405
491,405
655,426
655,426
STI Payment
STI Payment
Outcomes
Outcomes
Executive
Executive
Director
Director
A M
A M
Heraghty
Heraghty
Other
Other
Executive
Executive
KMP
KMP
P A
P A
Bradshaw(1)
Bradshaw(1)
A Brandon
A Brandon
D J Burns
D J Burns
B L Ward(1)
B L Ward(1)
G S Williams
G S Williams
Total
Total
LTI OUTCOMES FOR FY20
The FY18 LTI grant reached the end
of its three-year performance
period on 27 June 2020 and 38.3
per cent will vest as a result of
performance against the LTI
hurdles. The hurdle for the Return
on Capital (ROC) metric was
achieved while the hurdle for the
Earnings Per Share (EPS) metric was
not met. Percentage vesting is
determined on a sliding scale. For
further detail, refer to Table 8.
Table 5 outlines the performance
outcomes for LTI performance
rights granted between the FY16
to FY18 financial periods.
Table 6 outlines the subsequent
vesting and forfeiture adjusting for
the retail management and Set Up
team member underpayment
consistent with the outline in the
FY19 Remuneration Report. Each
grant is subject to equally weighted
performance measures (EPS and
ROC).
TEAM MEMBER REMEDIATION
During the year, the Group
updated its total estimate for team
member back payments from $53.2
million as at 29 December 2018 to
$62.4 million as at 27 June 2020,
excluding execution costs.
The estimate increase of $9.2 million
since December 2018 has resulted
in a $10.3 million after tax expense
in FY20. The movement in this
estimate has two elements. The
total amount of retail manager and
Set Up team member
underpayments is lower than
initially estimated. Offsetting this
decrease is the identification of
additional team members also
impacted by overtime
underpayments. Costs to execute
the remediation of $6.8 million after
tax have been incurred in the
period. Ongoing remediation
execution costs will be expensed as
incurred.
Table 5: Before adjustment for impact of underpayment of retail management and Set Up team members
Grant Date
September 2015
September 2016
Financial
Results
determining
vesting
June 2018
June 2019
Performance
outcome
10.9%
11.9%
September 2017
June 2020
4.2%
EPS three-year CAGR (50%)
ROC Averaged (50%)
Vested
Forfeited
29.5%
34.5%
nil
20.5%
15.5%
50.0%
Performance
outcome
12.2%
13.1%
13.7%
Vested
Forfeited
26.7%
34.2%
39.2%
23.3%
15.8%
10.8%
Table 6: After adjustment for impact of underpayment of retail management and Set Up team members
Grant Date
September 2015
September 2016
Financial
Results
determining
vesting
June 2018
June 2019
Performance
outcome
11.7%
13.8%
September 2017
June 2020
5.3%
EPS three-year CAGR (50%)
ROC Averaged (50%)
Vested
Forfeited
33.5%
44.0%
nil
16.5%
6.0%
50.0%
Performance
outcome
11.9%
13.0%
13.6%
Vested
Forfeited
nil
33.3%
38.3%
50.0%
16.7%
11.7%
(1) Pro-rated value for length of service.
(1) Pro-rated value for length of service.
• ROC vesting reduces for all years due to lower returns. FY18 ROC drops below the vesting hurdle threshold of 12 per cent.
• EPS increases in FY18 to FY20. This is due to the lower base EPS years in FY15 to FY17 which results in higher growth in later
years.
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Remuneration
Report (Audited)
SECTION 5
Detail of the FY20 Executive Total Reward Framework
FOR THE YEAR
ENDED 27 JUNE 2020
Remuneration
Report (Audited)
Table 7: Key aspects of the FY20 Scheme
FOR THE YEAR
ENDED 27 JUNE 2020
The Group is committed to creating
a high-performance culture.
Remuneration and benefits are
set in the context of an overall
policy to provide
market-competitive remuneration
arrangements that support
the attraction, development,
engagement and retention of
passionate team members. These
are also aligned with the interests
of shareholders.
For FY20, remuneration
benchmarking for all Executive KMP
was sourced from Ernst & Young. The
Board referenced two sets of
comparator groups to benchmark
remuneration:
Market Capitalisation
comparator group: S&P/ASX
200 companies within 50 per
cent to 200 per cent of Super
Retail Group’s 12-month
average market capitalisation;
and
Market Capitalisation and GICS
comparator group: S&P/ASX 200
companies within the
‘Consumer Discretionary Sector’
Global Industry Classification
Standard (GICS).
TARGET REMUNERATION MIX
The mix of remuneration between
fixed and variable components
is determined with regard to the
seniority of the role, the
responsibilities of the role for
driving business performance,
developing and implementing
business strategy, and external
remuneration practices.
Figure 1 shows the remuneration
mix based on the base salary
package (as at 27 June 2020) and
the incentives payable, assuming
maximum STI is received and full
vesting of the LTI Plan for:
•
the Group MD and CEO; and
VARIABLE OR ‘AT-RISK’ REMUNERATION
• other Executive KMP’s.
Figure 1:
GROUP MANAGING DIRECTOR AND CHIEF
EXECUTIVE OFFICER
37%
33%
30%
CHIEF FINANCIAL OFFICER
39%
37%
24%
DIVISIONAL MANAGING DIRECTORS
(rebel and Supercheap Auto)
39%
37%
24%
DIVISIONAL MANAGING DIRECTOR (BCF)
26%
43%
31%
Base
Salary
Package
STI
LTI
The remuneration mix for the Group
MD and CEO and for CFO has
moved from the prior year as a
result of the increase in STI target
with the introduction of deferral.
This has resulted in a greater
proportion of reward being at risk.
The Chief Executive Officer –
Macpac currently participates in
a cash-based retention scheme,
agreed at the time of acquisition,
with vesting dependent on the
performance of the Macpac
business.
BASE SALARY
Base salary comprises base pay and
superannuation, and may include
prescribed non-financial benefits at
the discretion of the individual
executive on a salary-sacrifice basis.
The Group provides superannuation
contributions in line with statutory
obligations.
No guaranteed base salary
increases are included in any
Executive KMP’s service contract.
Approved amendments to base
salary packages are effective from
the commencement of the new
financial year.
Variable or ‘at-risk’ remuneration
forms a significant portion of the
Executive KMP remuneration
opportunity. The purpose of variable
remuneration is to focus executives
on the execution of the Group’s
strategy and delivery of long-term
sustainable value.
The information below provides
detail of the Group’s short-term and
long-term incentives.
SHORT TERM INCENTIVE REWARD
Consistent with the prior year, the
FY20 STI Scheme (the scheme) for
Executive Leadership Team,
including Executive KMP, is based
on a balanced scorecard. Taking a
scorecard approach allows
Executive performance to be
assessed in a holistic way for four
key drivers of performance, which is
outlined in Table 7. The Human
Resources and Remuneration
Committee (the Committee)
governs the design of the STI
Scheme, KPI and target setting, and
the Board holds approval and
discretion over the outcomes.
MINIMUM SECURITIES HOLDING POLICY
Commencing FY15, the Board
introduced a minimum shareholding
requirement for NEDs valued at a
minimum of 100 per cent of one
year’s pre-tax base fees. The Group
MD and CEO is to be 150 per cent
of one year’s pre-tax base salary
and other Executive KMP are to be
100 per cent of one year’s pre-tax
base salary. This is to be achieved
within five years of the
commencement of employment.
This requirement may be extended
due to reduced vesting. This is to
further align the interest of NEDs and
Executive KMP with those of
shareholders (referenced in Tables
14 and 16).
Scheme
Participation
Purpose
STI awards are made under the Super Retail Group Short-Term Incentive Scheme
(the scheme).
The scheme allows for the invitation to participate to Executive KMP and other
executives.
The scheme rewards a combination of Board approved financial and non-
financial performance measures that articulate performance expectations at
both target and over-achievement that are aligned to the execution of the
Group’s strategy.
Performance Period
The performance period is for 12 months ending 27 June 2020.
Financial Gateway
A minimum Group PBT of at least 90 per cent of target must be met before any
short-term incentives are payable. If this level is not reached, the scheme is
deemed to be discretionary and any payment made to Executive KMP will be at
the Board’s discretion.
Performance Targets
The achievement of individual KPI targets (once the financial gateway has been
achieved) shall determine the proportion of the potential bonus entitlement that
will be granted.
For FY20, the following primary performance goals and weightings were selected.
These goals are aligned to the Group’s strategic plan.
Measures
Category
Weighting
(% of STI)
Performance Goals
Financial
Financial
50
Net Profit Before Tax (PBT)
Divisional Earnings Before
Interest and Tax (EBIT)
Working Capital
Efficiency
Non-Financial
Business
Improvement
20 - 30
Division business plan
delivery
Customer
10 - 15
Net Promotor Score (NPS)
People
10 - 20
• Total Recordable Injury
Frequency Rate (TRIFR)
The significant weighting of financial outcomes, at a minimum of 50 per cent,
maintains a strong link between actual financial performance and incentive
paid.
FY20 Target and Maximum
Stretch Opportunity
For the Group MD and CEO and other Executives, the target STI opportunity is 100
per cent, and the maximum stretch STI opportunity is 150 per cent of target. For
each measure, a threshold level of performance is set. This level must be met to
achieve a score. In setting this threshold, consideration is given to prior year
performance and target.
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Use of Discretion
The Committee, in its advisory role, reviews proposed adjustments to STI
outcomes and makes recommendations for any changes to performance
measures, which may only be approved by the Board. The Committee also
reviews the nature of the adjustments to earnings to assess the impacts (if any)
on remuneration.
Governance and Approval
Process
The Group MD and CEO’s STI is recommended by the Committee based on his
balanced scorecard performance and is approved by the Board.
The amount of STI paid to other Executive KMP is recommended by the Group
MD and CEO to the Committee based on each executive’s balanced scorecard
performance and is recommended by the Committee for approval by the
Board.
The Board may apply discretion in determining the STI outcomes to ensure they
are appropriate. By way of illustration, the Board may take into consideration the
Executive KMP’s alignment to Company values, prudent risk management and
the Company’s long-term financial soundness.
Payment Vehicle
FY20 STI awards are delivered as 80 per cent cash and 20 per cent deferral to
equity, with 50 per cent to vest in year two and 50 per cent to vest in year three.
For FY20, there is a higher deferral due to the COVID-19 adjustment.
Payment Frequency
STI awards are paid annually. Payments are made in September following the
end of the performance period.
LONG-TERM INCENTIVE REWARD
The Group’s remuneration structure aims to align long-term incentives for Executive KMPs and other executives
with the delivery of sustainable value to shareholders. The alignment of interests is important in ensuring that
Executive KMPs and other executives are focused on delivering sustainable returns to shareholders, whilst
allowing the Group to attract and retain high-calibre executives. The Board has determined that the
combination of EPS and ROC are appropriate measures of sustainable shareholder returns.
Table 8: Key aspects of the LTI Plan
Plan
Participation
LTI Instrument
LTI awards are granted under the Super Retail Group Employee Performance
Rights Plan (the plan).
The plan allows for the annual grant of Performance Rights to Executive KMP and
other executives.
Performance rights are granted by the Group for nil consideration. Each
performance right is a right to receive a fully-paid ordinary share at no cost if
service-based and performance-based vesting conditions are met.
Allocation Methodology
The number of performance rights granted to each Executive KMP is determined
in accordance with the Executive Remuneration Framework and have a value of
between 50 per cent and 100 per cent of their base salary package. The
notional value of performance rights granted to Executive KMP and other
executives is determined on a face value basis using the volume-weighted
average price for Super Retail Group shares traded on the ASX over the first five
trading days from the day following the release of the Group’s results for the
preceding reporting period. The value of performance rights for grant purposes
may differ from the accounting valuation shown in the financial statements,
which considers probability of vesting and other factors.
Performance Period
The performance period is three years commencing 1 July in the year the award
is made. For the FY20 awards, this is the three-year period from 1 July 2019 to 2
July 2022.
Performance Hurdles and
Vesting Schedules
Equity grants to Executive KMP and other executives are in two equal tranches of
50 per cent for the three-year compound annual growth rate in normalised EPS
and 50 per cent for normalised three-year averaged ROC.
Performance Hurdles and
Vesting Schedules
(continued)
The performance conditions for performance rights granted in September 2019
are:
Measures
Normalised EPS CAGR
Averaged ROC
Weight
Nature
Performance Zone
(Threshold to
Maximum)
Payout
Performance Period
50%
50%
Growth of Group
Group Absolute
8% to 13% compound
annual growth
10% to 15% annual
average
Below threshold (<8%):
0% of elements vested
Threshold (8%):
30% of elements vested
Target (10%):
50% of elements vested
Maximum (13%):
100% of elements vested
Straight-line vesting:
Between threshold (8%)
and target (10%) and
then target and
maximum (13%)
Below threshold (<10%):
0% of elements vested
Threshold (10%):
30% of elements vested
Target (12%):
50% of elements vested
Maximum (15%):
100% of elements vested
Straight-line vesting:
Between threshold (10%)
and target (12%) and
then target and
maximum (15%)
If the performance conditions are satisfied within the
performance period, the performance rights will vest
over the subsequent years in accordance with the
following schedule:
Time after grant of
performance
rights:
3 years
4 years
Percentage of
performance rights
that vest:
50%
50%
Under these performance hurdles, for the plan to achieve 100 per cent vesting,
the compound EPS growth must be at least 13 per cent and ROC must average
at least 15 per cent. The normalised EPS measure excludes the value of franking
credits being generated, which are transferred to shareholders through the
Group’s fully franked dividend.
For performance rights granted in September 2017 and prior, the normalised
earnings performance hurdle was as follows:
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employee’s departure the performance rights would only be available to vest to
the extent that the performance conditions are met. In the event the Board has
not exercised discretion, when an employee leaves due to resignation or
termination with cause, all unvested performance rights will lapse.
Change of Control
Provisions
Any unvested performance rights may vest at the Board’s discretion, having
regard to pro-rated performance.
Any unvested cash LTI as applicable to the Chief Executive Officer – Macpac,
outlined in Table 9, may vest at the Board’s discretion, having regard to pro-rated
performance.
The Super Retail Group Employee Performance Rights Plan rules are available on the Group’s website:
https://www.superretailgroup.com.au/investors-and-media/corporate-governance/
PERFORMANCE-BASED RETENTION ARRANGEMENTS FOR CHIEF EXECUTIVE OFFICER – MACPAC
As part of the acquisition of Macpac, an executive retention scheme was established for the Chief Executive
Officer – Macpac, Mr Brandon. The performance hurdles of the retention scheme align to the five-year business
strategy disclosed to the market in May 2018. Note, Mr Brandon does not currently participate in the SRG LTI Plan.
The retention scheme arrangements for Chief Executive Officer – Macpac are outlined in Table 9.
Table 9: Retention Scheme arrangements for Chief Executive Officer - Macpac
Vehicle
Incentive Opportunity
Performance Period
Performance Conditions
Cash
NZ$1,500,000
Five years (2018 – 2023)
Vesting is tied to the EBIT (CAGR over five years) measured
at three intervals (30 June 2021, 30 June 2022 and
30 June 2023) against the consolidated
Macpac business plan as approved by the Board.
Payment schedule
Eligibility
On the basis that the performance conditions are met at
each interval, the retention payment will be made in the
following manner:
1 July 2021: NZ$500,000
1 July 2022: NZ$500,000
1 July 2023: NZ$500,000
The executive is eligible to receive payment if EBIT
achieves plan and he remains employed on 1 July
immediately following each testing date.
Normalised EPS CAGR
% vesting of Performance Rights
10% (threshold)
15% (maximum)
50%
100%
The Performance rights for this period will vest on a pro rata basis between these
compound annual growth ranges.
Performance Period
If the performance conditions are satisfied within the
performance period, the performance rights will vest
over the subsequent years in accordance with the
following schedule:
Time after grant of
performance
rights:
3 years
4 years
5 years
Percentage of
performance rights
that vest:
50%
25%
25%
For the performance rights granted in September 2018, the plan details are the
same as the performance rights granted in September 2017 with the exception of
the normalised EPS CAGR performance hurdle which has an 8 per cent threshold
and a 13 per cent maximum.
Each year, the Board reviews any significant items, positive and negative, and
considers their relevance for the PBT, ROC and EPS results. The Board may include
or exclude any significant events/items to give a clearer reflection of normalised
financial performance from one period to the next. Significant events/items are
considered unusual by their nature and size and/or not in the ordinary course of
the business, (including prior period store underpayment and remediation costs,
business restructuring costs and equity accounted losses – refer to note 4b in the
financial statements for the details). In addition, the impact of the accounting
standard AASB16 Leases, which has been applied for the first year in FY20, has
been excluded as it was not included in the financial targets established for FY20.
Testing and Time
Restrictions
At the end of three financial years, equity grants are tested against the
performance hurdles set. Awards will only vest once the Board, in its discretion,
determines that relevant conditions have been satisfied. If the performance
hurdles are not met at the vesting date, the performance rights will lapse. There is
no retesting of performance hurdles under the plan. The Board has discretion to
determine that an Award vests prior to the end of the relevant period and retains
a discretion to adjust performance related outcomes.
Dividends and Voting Rights
Performance rights do not carry voting or dividend rights.
Hedging Arrangements
Participating executives are prohibited from entering into any hedging
arrangements in relation to performance rights.
Clawback Policy
Termination Provisions
There is a Clawback Policy within the plan. The Board may determine any
treatment in relation to an Award, both vested and unvested, without limitation,
in certain circumstances such as fraud, dishonesty, or breach of obligations
(including, without limitation, a material misstatement of financial information).
The plan document is available on the Group’s website.
Executive KMP must be employed at the time of vesting to receive the allotment
of shares. The Board has discretion to amend the employment requirement
based on the circumstances associated with the Executive KMP and other
executives leaving. The Board has previously exercised its discretion where an
employee left due to retirement, retrenchment or redundancy, or termination by
mutual consent. The employee may, in these circumstances, retain entitlement
to a portion of the performance rights pro-rated to reflect the period of service
from the start of the performance period to the date of departure. After the
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FOR THE YEAR
FOR THE YEAR
ENDED 27 JUNE 2020
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Remuneration
Report (Audited)
FOR THE YEAR
ENDED 27 JUNE 2020
SECTION 6
SECTION 6
Executive Remuneration Changes for FY21
Executive Remuneration Changes for FY21
BASE SALARY CHANGES
BASE SALARY CHANGES
The Group MD and CEO base
The Group MD and CEO base
salary for FY21 will increase by
salary for FY21 will increase by
$60,000 (5.5 per cent) to
$60,000 (5.5 per cent) to
$1,150,000, positioning base pay
$1,150,000, positioning base pay
at the 64th percentile against the
at the 64th percentile against the
market capitilisation comparator
market capitilisation comparator
group, inclusive of an allowance
group, inclusive of an allowance
for car and home office usage.
for car and home office usage.
The comparator benchmarks
The comparator benchmarks
show that overall Executive KMP
show that overall Executive KMP
base salary package and short-
base salary package and short-
term incentive packages for FY21
term incentive packages for FY21
year will be in the range of the
year will be in the range of the
50th and 75th percentile of the
50th and 75th percentile of the
respective market comparator
respective market comparator
group.
group.
The base salary for Mr Ward for
The base salary for Mr Ward for
FY21 will increase by $25,000 (four
FY21 will increase by $25,000 (four
per cent) to $725,000, positioning
per cent) to $725,000, positioning
base pay between the 62.5 and
base pay between the 62.5 and
75th percentile against the All ASX
75th percentile against the All ASX
Retail comparator group.
Retail comparator group.
The base salary for Mr Williams for
The base salary for Mr Williams for
FY21 will increase by $25,000 (four
FY21 will increase by $25,000 (four
per cent) to $725,000, positioning
per cent) to $725,000, positioning
base pay between the 62.5 and
base pay between the 62.5 and
75th percentile against the All ASX
75th percentile against the All ASX
Retail comparator group.
Retail comparator group.
Other Executive KMP are not
Other Executive KMP are not
receiving a base salary increase
receiving a base salary increase
for FY21.
for FY21.
CONTINUED IMPLEMENTATION OF
CONTINUED IMPLEMENTATION OF
DEFERRED SHORT TERM INCENTIVE
DEFERRED SHORT TERM INCENTIVE
As indicated in FY19, the
As indicated in FY19, the
Executive KMP are transitioning
Executive KMP are transitioning
towards a 30 per cent deferral
towards a 30 per cent deferral
over two years. FY21 is the
over two years. FY21 is the
second year of the transition and,
second year of the transition and,
as such, STI outcomes in FY21 will
as such, STI outcomes in FY21 will
be subjected to an increased
be subjected to an increased
deferral from 20 per cent to 30 per
deferral from 20 per cent to 30 per
cent. Accordingly, there is a
cent. Accordingly, there is a
further increase to the target STI
further increase to the target STI
for each KMP of 14.8 per cent.
for each KMP of 14.8 per cent.
Vesting of the deferred STI will occur
Vesting of the deferred STI will occur
in two, equal tranches (i.e. 50 per
in two, equal tranches (i.e. 50 per
cent of rights vest one year after
cent of rights vest one year after
grant and the remaining 50 per
grant and the remaining 50 per
cent will vest two years after grant).
cent will vest two years after grant).
Accumulated dividend equivalent
Accumulated dividend equivalent
payments will be received when
payments will be received when
awards are fully vested.
awards are fully vested.
The deferred STI awards will be
The deferred STI awards will be
subject to the same clawback
subject to the same clawback
provisions as the LTI (for further detail
provisions as the LTI (for further detail
on the LTI Clawback Policy, refer to
on the LTI Clawback Policy, refer to
Table 8).
Table 8).
VARIABLE REWARD FRAMEWORK
VARIABLE REWARD FRAMEWORK
The Group will revise the Executive
The Group will revise the Executive
total reward framework and
total reward framework and
opportunity in response to a two-
opportunity in response to a two-
year business plan formulated for
year business plan formulated for
the context of the COVID-19
the context of the COVID-19
pandemic.
pandemic.
This will apply to all Executive
This will apply to all Executive
Leadership Team members
Leadership Team members
(inclusive of KMP).
(inclusive of KMP).
The revisions seek to align the
The revisions seek to align the
reward structure with the
reward structure with the
measurements of performance set
measurements of performance set
by the Board for the medium term.
by the Board for the medium term.
In considering these revisions, the
In considering these revisions, the
Board plans to replace elements of
Board plans to replace elements of
the current LTI arrangement for FY21
the current LTI arrangement for FY21
and FY22 for all Executive
and FY22 for all Executive
Leadership Team members
Leadership Team members
(inclusive of KMP).
(inclusive of KMP).
The Board is focused on revisions
The Board is focused on revisions
that:
that:
Are aligned to shareholder
Are aligned to shareholder
interests;
interests;
Allow for flexibility in the face of
Allow for flexibility in the face of
unprecedented times;
unprecedented times;
Maintain total target variable
Maintain total target variable
reward over FY21 and FY22.
reward over FY21 and FY22.
The Board anticipates issuing one
The Board anticipates issuing one
grant covering FY21 and FY22 and
grant covering FY21 and FY22 and
aligning the metrics to the two-year
aligning the metrics to the two-year
business plan.
business plan.
APPLICATION OF DISCRETION FOR
APPLICATION OF DISCRETION FOR
EQUITY BASED INCENTIVES
EQUITY BASED INCENTIVES
The Board has approved the
The Board has approved the
following principles to guide Board
following principles to guide Board
discretion (if any), in relation to the
discretion (if any), in relation to the
outcomes for awards under existing
outcomes for awards under existing
equity-based incentive plans:
equity-based incentive plans:
Preserve the purpose and
Preserve the purpose and
integrity of the LTI Plan;
integrity of the LTI Plan;
Maintain the integrity of each
Maintain the integrity of each
year’s remuneration as
year’s remuneration as
awarded;
awarded;
Maintain the level of
Maintain the level of
performance expected when
performance expected when
the original targets were set;
the original targets were set;
Be consistent with general
Be consistent with general
market/security-holder
market/security-holder
expectations, particularly for
expectations, particularly for
the alignment of performance-
the alignment of performance-
based remuneration with the
based remuneration with the
interests of shareholders;
interests of shareholders;
Be able to be implemented
Be able to be implemented
without requiring special
without requiring special
approvals, for example from the
approvals, for example from the
ASX or security-holders;
ASX or security-holders;
Not hinder the success of any
Not hinder the success of any
transaction (such as a
transaction (such as a
significant acquisition) given
significant acquisition) given
that executives do not
that executives do not
otherwise receive incentive
otherwise receive incentive
type payments for merger and
type payments for merger and
acquisition activity;
acquisition activity;
Discretion should only be
Discretion should only be
exercised for events or items
exercised for events or items
over the performance period
over the performance period
that have a material impact on
that have a material impact on
the outcome; and
the outcome; and
Adjustments (positive and
Adjustments (positive and
negative) are made at the time
negative) are made at the time
of vesting (there may be more
of vesting (there may be more
than one relevant event during
than one relevant event during
the performance period).
the performance period).
SECTION 7
Non-Executive Directors’ Remuneration Arrangements
NON-EXECUTIVE DIRECTORS’
REMUNERATION STRUCTURE
The Group’s remuneration strategy
is designed to attract and retain
experienced, qualified Non-
Executive Directors and to
remunerate appropriately to
reflect the responsibilities of the
position. Non-Executive Directors
receive fees to recognise their
contribution to the work of the
Board and the associated
Committees on which they serve.
The Nominations Committee
reviews the level of fees annually.
Under the current fee framework,
Non-Executive Directors are
remunerated by way of a base
fee, with additional fees paid
to the Chairs and members
of Committees; namely, the
Audit and Risk, and the
Human Resources and
Remuneration committees.
This reflects the additional
time commitment required
by the Chairs and members
of these committees.
Table 10a: FY20
There has not been an increase to
the base fee for Non-Executive
Directors since 2018.
The Board Chair receives an all-
inclusive fee and no other fees (e.g.
Committee fees) are paid. Fees are
inclusive of superannuation
contributions required by the
Superannuation Guarantee
legislation.
Non-Executive Directors do not
receive any performance-related
remuneration. Non-Executive
Directors may opt each year to
receive a proportion of their
remuneration in Super Retail Group
Limited shares, which would be
acquired on market. Non-Executive
Directors are not eligible for
termination payments or to receive
retirement benefits other than
superannuation on resignation or
retirement from the Board.
Non-Executive Directors’ fees are
determined within an aggregate
directors’ fee pool approved by
shareholders. The fee pool of $1.2
million per annum was approved at
the AGM on 23 October 2013.
NON-EXECUTIVE DIRECTORS’ FEES
The fees paid to Non-Executive
Directors are set out in Table 10a
and are annual fees, inclusive
of superannuation, unless
otherwise stated.
NON-EXECUTIVE DIRECTORS’ POOL
AND COMMITTEE CHANGES- FY21
Subject to shareholder approval at
the 2020 AGM, the fee pool will
increase to $1.5 million to
accommodate a new director,
taking the number of Non-Executive
Directors from six to seven and to
support a modest increase in
Committee Chair and Committee
member fees commensurate with
market benchmarking. If approved,
the increases will be effective from
the date of the AGM. For further
detail, refer to Table 10b. There will
be no increase to base fees for
NEDs in FY21.
Annual Fees
Board
Audit and Risk
Committee
Human Resources and
Remuneration Committee
Nomination
Committee
Chair(1)
$313,650
Members
$141,143
$25,000
$10,000
$25,000
$10,000
Nil
Nil
(1) Committee fees are not paid to the Chair.
There was no change to Non–Executive Directors’ fees (including Committee fees) in FY20.
Table 10b: FY21
Annual Fees
Board
Audit and Risk
Committee
Human Resources and
Remuneration Committee
Nomination
Committee
Chair(1)
$313,650
Members
$141,143
$35,000
$15,000
$35,000
$15,000
Nil
Nil
(1) Committee fees are not paid to the Chair of the Board.
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Report (Audited)
FOR THE YEAR
ENDED 27 JUNE 2020
Details of the remuneration of the Non-Executive Directors of the Group are set out in Table 11.
Table 11:
FY20
Short-term Benefits
Post-
employment
Share based
Cash
salary
and fees
$
Cash
bonus
$
Non-
monetary
benefits
$
Super-
annuation
$
Performance
Rights
$
Other
$
Total
$
Name
Non-Executive
S A Pitkin
S A Chaplain(1)
G T Dunne(1)
D J Eilert (2)
P D Everingham
H L Mowlem
R A Rowe
L K Inman(3)
313,650
32,720
32,720
156,716
147,163
151,729
128,898
51,550
Total
1,015,146
–
–
–
–
–
–
–
–
–
FY19
Short-term Benefits
Cash
salary
and fees
$
Cash
bonus
$
Non-
monetary
benefits
$
313,650
147,163
147,163
151,729
121,371
166,143
1,047,219
–
–
–
–
–
–
–
Name
Non-Executive
S A Pitkin
D J Eilert
P D Everingham
H L Mowlem
R A Rowe
L K Inman
Total
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
3,108
3,108
14,888
13,980
14,414
12,245
–
61,743
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
313,650
35,828
35,828
171,604
161,143
166,143
141,143
51,550
1,076,889
Post-
employment
Share based
Super-
annuation
$
Performance
Rights
$
Other
$
Total
$
–
13,980
13,980
14,414
19,771
–
62,145
–
–
–
–
–
–
–
–
–
–
–
–
–
–
313,650
161,143
161,143
166,143
141,142
166,143
1,109,364
SECTION 8
Executive KMP Remuneration Outcomes for FY20
Details of the remuneration of the Executive KMP of the Group are set out in Table 12:
Table 12:
FY20
Short-term Benefits
Post- employment
Share
based
Cash salary
and fees
$
Cash
bonus
$
Non-
monetary
benefits
$
Annual
Leave
$
Super-
annuation
$
Termin-
ation
Benefits
$
Performance
Rights
$
Other long
term
benefits(1)
$
Total
$
Name
Executive
Director
A M Heraghty(2)
1,025,648
603,000
43,349
84,019
21,003
Other Executive
KMP
P A Bradshaw(3)
372,560
141,977
-
18,170
15,752
A Brandon
D J Burns
B L Ward(4)
379,877
42,600
2,384
61,040
11,396
651,297
424,550
2,700
5,563
21,003
593,141
612,894
33,625
17,895
21,003
G S Williams(5)
676,297
503,614
2,700
-
21,003
C D Wilesmith(6)
50,077
-
3,692
5,122
5,251
Total
3,748,897
2,328,635
88,450
191,809
116,411
-
-
-
-
-
-
-
-
205,288
11,148
1,993,455
51,017
599
600,075
9,063
48,801
555,161
238,172
9,362
1,352,647
96,676
993
1,376,227
106,644
1,736
1,311,994
4,882
1,165
70,189
711,742
73,804
7,259,748
FY19
Short-term Benefits
Post- employment
Share
based
Cash
salary and
fees
$
Cash
bonus
$
Non-
monetary
benefits
$
Annual
Leave
$
Super-
annuation
$
Termin-
ation
Benefits
$
Performance
Rights
$
Other long
term
benefits(1)
$
Total
$
Name
Executive
Director
A M Heraghty(2,9)
838,014
317,400
25,916
32,303
20,531
-
336,949
6,971
1,578,084
P A Birtles(7)
790,582
-
2,380
41,079
15,399
132,952
(339,972)
17,366
659,786
(1) S A Chaplain and G T Dunne commenced as Directors on 31 March 2020.
(2) D J Eilert commenced as Chair of the Human Resources & Remuneration Committee from 22 October 2019.
(3) L K Inman ceased to be a Director with effect from 22 October 2019.
Other Executive
KMP
A Brandon(8)
54,825
15,454
2,952
7
3,550
D J Burns(9)
654,468
249,375
G S Williams(5)
167,254
136,986
E A Berchtold(10)
203,841
-
-
-
-
(2,779)
20,531
14,215
5,133
30,956
15,231
188,160
(248,965)
6,999
196,222
-
-
-
-
61,764
138,552
37,228
8,245
967,068
-
270
323,858
C D Wilesmith(6,9)
651,469
276,000
48,000
40,905
20,531
445,469
45,525
13,228
1,541,127
Total
3,360,453
995,215
79,248
156,686
100,906
766,581
(169,235)
114,843
5,404,697
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Remuneration
Remuneration
Report (Audited)
Report (Audited)
FOR THE YEAR
FOR THE YEAR
ENDED 27 JUNE 2020
ENDED 27 JUNE 2020
Remuneration
Report (Audited)
FOR THE YEAR
ENDED 27 JUNE 2020
(1)
(1)
Includes accruals for long service leave entitlements and accrued long term retention bonus for A Brandon of $48,801 ($61,764 in 2019).
Includes accruals for long service leave entitlements and accrued long term retention bonus for A Brandon of $48,801 ($61,764 in 2019).
(2) A M Heraghty was Managing Director of Outdoor from 1 July 2018 to 19 February 2019 and commenced as Group Managing Director and Chief Executive Officer
(2) A M Heraghty was Managing Director of Outdoor from 1 July 2018 to 19 February 2019 and commenced as Group Managing Director and Chief Executive Officer
from 20 February 2019. As approved at the Annual General Meeting held on 22 October 2019, A M Heraghty received a Long-Term Incentive grant of 86,294
from 20 February 2019. As approved at the Annual General Meeting held on 22 October 2019, A M Heraghty received a Long-Term Incentive grant of 86,294
performance rights and 53,262 performance rights in relation to a one-off co-investment grant. The Long-Term Incentive grant was valued in 2019 based on the Long-
performance rights and 53,262 performance rights in relation to a one-off co-investment grant. The Long-Term Incentive grant was valued in 2019 based on the Long-
Term Incentive Plan in place at the date of commencement as Group Managing Director and Chief Executive Officer. This has been revised to be based on the
Term Incentive Plan in place at the date of commencement as Group Managing Director and Chief Executive Officer. This has been revised to be based on the
share price at the date of the Annual General Meeting and reflecting the Long-Term Incentive Plan conditions that commenced in FY20. The co-investment grant is
share price at the date of the Annual General Meeting and reflecting the Long-Term Incentive Plan conditions that commenced in FY20. The co-investment grant is
valued using the VWAP of the Company’s shares traded on the ASX over the first five trading days of the first trading window following commencement as Group
valued using the VWAP of the Company’s shares traded on the ASX over the first five trading days of the first trading window following commencement as Group
Managing Director and Chief Executive Officer being 21 February 2019 to 27 February 2019, inclusive.
Managing Director and Chief Executive Officer being 21 February 2019 to 27 February 2019, inclusive.
(3) P A Bradshaw commenced as KMP on 25 November 2019. Outcome pro-rated for length of service.
(3) P A Bradshaw commenced as KMP on 25 November 2019. Outcome pro-rated for length of service.
(4) B L Ward commenced as KMP on 1 August 2019. Included in the cash bonus total is a sign on bonus of $250,000. Outcome pro-rated for length of service.
(4) B L Ward commenced as KMP on 1 August 2019. Included in the cash bonus total is a sign on bonus of $250,000. Outcome pro-rated for length of service.
(5) G S Williams commenced on 2 April 2019. Included in the cash bonus is a sign on bonus for G S Williams of $113,014 ($136,986 in 2019).
(5) G S Williams commenced on 2 April 2019. Included in the cash bonus is a sign on bonus for G S Williams of $113,014 ($136,986 in 2019).
(6) C D Wilesmith resignation effective 9 August 2019. Termination benefits are accrued obligations as at 29 June 2019. Mr Wilesmith ceased as KMP on 31 July 2019.
(6) C D Wilesmith resignation effective 9 August 2019. Termination benefits are accrued obligations as at 29 June 2019. Mr Wilesmith ceased as KMP on 31 July 2019.
(7) P A Birtles retired as Group Managing Director and Chief Executive Officer on 19 February 2019.
(7) P A Birtles retired as Group Managing Director and Chief Executive Officer on 19 February 2019.
(8) A Brandon commenced as a KMP effective 1 May 2019.
(8) A Brandon commenced as a KMP effective 1 May 2019.
(9) Cash bonus for FY19 is reflective of a 25 per cent reduction to recognise the impact of the underpayment of retail management.
(9) Cash bonus for FY19 is reflective of a 25 per cent reduction to recognise the impact of the underpayment of retail management.
(10) E A Berchtold resigned 11 January 2019.
(10) E A Berchtold resigned 11 January 2019.
PERFORMANCE RIGHTS OVER EQUITY INSTRUMENTS OF SUPER RETAIL GROUP LIMITED
The movement during the reporting period in the number of performance rights over ordinary shares in the
Company held (directly, indirectly or beneficially) by each Executive KMP, including their related parties, is
detailed in Table 13.
Table 13:
Held at
30 June
2019
Granted
(1)
Vested
Lapsed or
Forfeited
Other
Changes(2)
Value of
performance
rights
granted
in year(3)
Held at
27 June
2020
Financial year
in which grant
vests
2020
Number
Number Number
Number
Number
Number
$
Year
A M Heraghty
2016
2017
2018(4)
2019
2020(6)
P A Bradshaw
2020
D J Burns
2016
2017
2018(4)
2019
2020
B L Ward
2020
G S Williams
2019
2020
C D Wilesmith
2016
2017
2018
2019
2020(2)
14,685
45,586
59,526
50,200
-
-
-
-
-
139,556
(1,411)
(17,618)
-
-
-
(11,863)
(10,349)
-
-
-
-
40,913
-
-
-
-
-
-
44,060
44,060
-
44,060
(945)
(11,859)
-
-
-
(7,945)
(6,966)
-
-
-
-
-
-
-
-
-
9,834
30,685
50,860
44,006
-
-
-
-
12,335
39,666
54,114
46,940
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,411
17,619
59,526
50,200
139,556
n/a
n/a
n/a
n/a
1,006,644
2019, 2020, 2021
2020, 2021, 2022
2021, 2022, 2023
2022, 2023, 2024
2023, 2024
40,913
315,848
2023, 2024
944
11,860
50,860
44,006
44,060
n/a
n/a
n/a
n/a
340,143
2019, 2020, 2021
2020, 2021, 2022
2021, 2022, 2023
2022, 2023, 2024
2023, 2024
44,060
340,143
2023, 2024
-
44,060
-
340,143
n/a
2023, 2024
-
-
-
-
-
(1,185)
(15,330)
-
-
-
(9,965)
(9,005)
(16,096)
(46,940)
-
(1,185)
(15,331)
(38,018)
-
-
-
-
-
-
-
n/a
n/a
n/a
n/a
n/a
2019, 2020, 2021
2020, 2021, 2022
2021, 2022, 2023
2022, 2023, 2024
2023, 2024
(1) Performance rights provided as remuneration to each of the Executive KMP of the Group during the financial year.
(2) Ceased as Executive KMP on 31 July therefore Performance Rights disclosed as being Executive KMP become nil.
(3) The maximum possible total financial value in future years is dependent on the Group share price at exercise date, the minimum possible total value is nil.
(4) These performance rights will partially vest with the announcement of the FY20 results.
(5) All vested performance rights are exercisable.
(6) As approved at the Annual General Meeting held on 22 October 2019, A M Heraghty received a Long-Term Incentive grant of 86,294 performance rights and
53,262 performance rights in relation to a one-off co-investment grant.
(7) A Brandon has not received any performance rights.
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Remuneration
Remuneration
Report (Audited)
Report (Audited)
FOR THE YEAR
FOR THE YEAR
ENDED 27 JUNE 2020
ENDED 27 JUNE 2020
The performance rights granted in the current reporting period were valued for the purpose of the financial
The performance rights granted in the current reporting period were valued for the purpose of the financial
statements using a fair value of $7.72 (with the exception of A M Heraghty – refer Table 13 and Table 17), which is
statements using a fair value of $7.72 (with the exception of A M Heraghty – refer Table 13 and Table 17), which is
the share price at the grant date of 1 September 2019.
the share price at the grant date of 1 September 2019.
The performance rights are expensed over their vesting period in line with the vesting conditions of the
The performance rights are expensed over their vesting period in line with the vesting conditions of the
performance rights. Refer to Section 5 for details of these vesting conditions.
performance rights. Refer to Section 5 for details of these vesting conditions.
The value at exercise date for performance rights is the Group share price.
The value at exercise date for performance rights is the Group share price.
There are no amounts unpaid on the shares issued as a result of the exercise of the options in the 2020 financial
There are no amounts unpaid on the shares issued as a result of the exercise of the options in the 2020 financial
year.
year.
OPTION OVER EQUITY INSTRUMENTS OF SUPER RETAIL GROUP LIMITED
OPTION OVER EQUITY INSTRUMENTS OF SUPER RETAIL GROUP LIMITED
No options were granted or vested during the financial year.
No options were granted or vested during the financial year.
REMUNERATION EXPENSE OF DIRECTORS AND EXECUTIVE KEY MANAGEMENT PERSONNEL
REMUNERATION EXPENSE OF DIRECTORS AND EXECUTIVE KEY MANAGEMENT PERSONNEL
Table 14:
Table 14:
Base Salary Package
Base Salary Package
Short-Term Incentive
Short-Term Incentive
Long-Term Incentive
Long-Term Incentive
Total
Total
2016(1)
2016(1)
$m
$m
5.4
5.4
0.8
0.8
0.5
0.5
6.7
6.7
2017(2)
2017(2)
$m
$m
5.1
5.1
2.1
2.1
1.1
1.1
8.3
8.3
2018(3)
2018(3)
$m
$m
5.2
5.2
0.8
0.8
0.5
0.5
6.5
6.5
2019(4)
2019(4)
$m
$m
5.6
5.6
1.1
1.1
(0.2)
(0.2)
6.5
6.5
2020
2020
$m
$m
5.2
5.2
2.3
2.3
0.8
0.8
8.3
8.3
(1) 2016 is a 53-week reporting period compared to 52 weeks for the other five years and excludes “Other” remuneration.
(1) 2016 is a 53-week reporting period compared to 52 weeks for the other five years and excludes “Other” remuneration.
(2) During 2017 the number of Executive KMP decreased from six to five which impacts year-on-year comparisons.
(2) During 2017 the number of Executive KMP decreased from six to five which impacts year-on-year comparisons.
(3) The 2018 remuneration expense attributable to Executive KMP accounts for the impact of the underpayment of Set Up team members.
(3) The 2018 remuneration expense attributable to Executive KMP accounts for the impact of the underpayment of Set Up team members.
(4) The 2019 remuneration expense attributable to Executive KMP accounts for the impact of the underpayment of retail management.
(4) The 2019 remuneration expense attributable to Executive KMP accounts for the impact of the underpayment of retail management.
Total remuneration paid to KMP as a proportion of normalised profit before tax was 4.3 per cent in FY16, reaching 4.4
Total remuneration paid to KMP as a proportion of normalised profit before tax was 4.3 per cent in FY16, reaching 4.4
per cent in FY17.
per cent in FY17.
The FY18 and FY19 outcomes for Executive KMP were reduced for the team member underpayments and a period
The FY18 and FY19 outcomes for Executive KMP were reduced for the team member underpayments and a period
of transition across the Executive KMP, with a transition to a new Group MD and CEO and temporary reduction in the
of transition across the Executive KMP, with a transition to a new Group MD and CEO and temporary reduction in the
number of Executive KMP.
number of Executive KMP.
In FY20 remuneration paid to KMP was 3.8 per cent of normalised profit before tax (refer to Table 1 and Table 14).
In FY20 remuneration paid to KMP was 3.8 per cent of normalised profit before tax (refer to Table 1 and Table 14).
(A) EQUITY INSTRUMENTS HELD BY KMP
(A) EQUITY INSTRUMENTS HELD BY KMP
(i)
(i)
Shares provided on exercise of performance rights and options
Shares provided on exercise of performance rights and options
The table below lists the ordinary shares in the Company issued during the year as a result of the exercise of
The table below lists the ordinary shares in the Company issued during the year as a result of the exercise of
performance rights. There were no shares issued during the year ended 27 June 2020 on the exercise of options.
performance rights. There were no shares issued during the year ended 27 June 2020 on the exercise of options.
Table 15:
Table 15:
Name
Name
Incentive Scheme(1)
Incentive Scheme(1)
Number of Ordinary Shares
Number of Ordinary Shares
Issued on Exercise of Share
Issued on Exercise of Share
Plans During the Year(2)
Plans During the Year(2)
Market Value at Exercise
Market Value at Exercise
Date(3)
Date(3)
A M Heraghty
A M Heraghty
P A Bradshaw
P A Bradshaw
A Brandon
A Brandon
D J Burns
D J Burns
B L Ward
B L Ward
G S Williams
G S Williams
C D Wilesmith
C D Wilesmith
Total
Total
Performance Rights Plan
Performance Rights Plan
n/a
n/a
n/a
n/a
Performance Rights Plan
Performance Rights Plan
n/a
n/a
n/a
n/a
n/a
n/a
(1) Refer to Section 4 – Performance Rights Plan.
(1) Refer to Section 4 – Performance Rights Plan.
(2) The FY16 and FY17 grants vesting due to hurdles being met.
(2) The FY16 and FY17 grants vesting due to hurdles being met.
(3) The value at exercise date for performance rights is determined using the Company share price.
(3) The value at exercise date for performance rights is determined using the Company share price.
19,029
19,029
n/a
n/a
n/a
n/a
12,804
12,804
n/a
n/a
n/a
n/a
16,515
16,515
48,348
48,348
187,436
187,436
n/a
n/a
n/a
n/a
126,119
126,119
n/a
n/a
n/a
n/a
162,673
162,673
476,228
476,228
Remuneration
Report (Audited)
(ii) Movement in shares
FOR THE YEAR
ENDED 27 JUNE 2020
The movement during the year in the number of ordinary shares in the company held directly or indirectly or
beneficially, by each KMP, including their related parties is detailed in Table 16.
Table 16:
2020
Non-Executive
Directors
S A Pitkin
R A Rowe
D J Eilert
H L Mowlem
P D Everingham
S A Chaplain
G T Dunne
L K Inman(2,4)
Executive Director
A M Heraghty
Other Executive
KMP
P A Bradshaw
A Brandon
D J Burns
B L Ward
G S Williams
C D Wilesmith(3,4)
Held at
30 June
2019
Exercise of
performance
rights
Purchases
Entitlement
offer
In lieu of
dividends (1)
Other
changes
42,153
59,936,866
15,500
30,000
17,000
-
-
22,175
-
-
-
-
-
-
-
-
10,000
-
-
-
23,000
-
-
-
-
8,236,305
-
-
-
-
-
-
-
6,098
-
-
-
-
-
-
-
-
-
-
-
-
-
(22,175)
Held at
27 June
2020
52,153
68,179,269
15,550
30,000
40,000
-
-
-
40,691
19,029
-
-
20,833
-
-
4,347
-
-
12,804
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
59,720
-
-
-
-
-
(4,347)
-
-
33,637
-
-
-
(1) Shareholders are eligible to receive dividends in cash or choose to participate in the dividend reinvestment plan.
(2) L K Inman ceased to be a KMP on 22 October 2019.
(3) C D Wilesmith ceased to be a KMP on 31 July 2019.
(4) Ceased as KMP therefore shares disclosed as KMP become nil.
(iii) Unissued shares under performance rights and options plans
Unissued ordinary shares of Super Retail Group Limited under the Performance Rights Plan at the date of this
report is detailed in Table 17.
Table 17:
Grant date
Value per performance right
at grant date
Number of
performance rights
1 September 2015
1 September 2016
1 September 2017
1 September 2018
1 September 2019
Total
$8.17
$7.99
$6.38
$7.65
$7.72(1)
9,952
147,054
465,885
339,700
674,154
1,636,745
(1) The performance rights value for the 1 September 2019 grant was $7.72 with the exception of A M Heraghty who received a long-term incentive Grant
of 86,294 performance rights and 53,262 performance rights in relation to a one-off co-investment grant with these grants averaging a value of $7.21.
(2) Refer to Section 5 for details of vesting conditions.
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Remuneration
Report (Audited)
FOR THE YEAR
ENDED 27 JUNE 2020
Plan participants may not enter into
any transaction designed to
remove the ‘at risk’ aspect of
performance rights. As at the date
of this report, there are no
remaining unissued ordinary shares
of Super Retail Group Limited under
Option.
(B) LOANS TO KMP AND THEIR RELATED
PARTIES
There are no loans to Executive KMP
and their related parties as at 27
June 2020 and no loans were made
during the financial year.
(C) OTHER TRANSACTIONS WITH KMP
No Executive KMP held positions in
other companies that transacted
with the Group in the reporting
period. Dividends paid to KMP
as shareholders in the reporting
period amounted to $17,135,677
(FY19: $30,133,125). Other payments
made to Director R A Rowe in the
form of store lease payments during
the reporting period amounted to
$9,611,168 (FY19: $12,087,041). Rent
payable at year-end was $750,802
(FY19: nil). Rent on properties are
deemed to be on an arm’s length
basis. There were no other
transactions with KMP during the
reporting period.
(D) INSURANCE OF OFFICERS
During the financial year, the Group
has paid premiums to insure the
directors, officers, and certain
managers of the Group as
permitted by its Constitution and the
Corporations Act 2001. The policy
prohibits disclosure of details of the
insurance cover and the premiums
paid.
The liabilities insured are legal costs
that may be incurred in defending
civil or criminal proceedings that
may be brought against the officers
in their capacity as officers of
entities in the Group, and any other
payments arising from liabilities
incurred by the officers in
connection with such proceedings,
other than where such liabilities arise
out of conduct involving a willful
breach of duty by the officers or the
improper use by the officers of their
position or of information to gain
advantage for themselves or
someone else or to cause detriment
to the Group. It is not possible to
apportion the premium between
amounts relating to the insurance
against legal costs and those
relating to other liabilities.
Remuneration
Report (Audited)
SECTION 9
Remuneration Governance
FOR THE YEAR
ENDED 27 JUNE 2020
The Board’s role, as set out in the Board Charter, includes responsibility to approve and oversee the strategic
direction of the Group, to appoint the Group MD and CEO and to oversee the governance, management and
performance of the Group.
The Board is supported through three standing Board Committees, specifically the Audit and Risk Committee;
Nomination Committee; and Human Resources and Remuneration Committee.
Each Committee has its own Charter setting out its role and responsibilities, composition, and how it will operate.
The Audit and Risk Committee will liaise with the Human Resources and Remuneration Committee, as necessary,
relating to risk, policies and framework relating to KMP remuneration.
Figure 2:
Board
The Board approves company-wide
remuneration strategy, policy and
framework to ensure alignment with
the Group’s business strategy and
objectives.
The Board reviews and approves (as
appropriate) the Human Resources
and Remuneration Committee
recommendations. The Board is
responsible for evaluating the
performance and determining the
remuneration of the Group MD and
CEO and senior executives.
Human Resources and
Remuneration Committee
The Board has delegated responsibility
to the Human Resources and
Remuneration Committee to review
and make recommendations to the
Board in relation to the overall human
resources and remuneration practices
of the Group. This includes, but is not
limited to, supporting and advising the
Board in relation to the Group’s
human resources strategy including
human resource policies;
remuneration policies; health and
safety; talent management; and
otherwise assisting the Board to
comply with legal and statutory
requirements in respect of human
resources and remuneration matters.
Remuneration Advisors
The Committee operates
independently of senior executives
and engages directly with
remuneration advisors. The
requirements for external advisors’
services are assessed annually in the
context of remuneration matters that
the Committee is required to address.
During FY20, external advice was
received from Ernst & Young related to
items including market remuneration
benchmarking and market
remuneration practices for
remuneration structures.
The Corporate Governance Statement (available on the Group’s website at
https://www.superretailgroup.com.au/investors-and-media/corporate-governance/) provides further information
about the role of the Human Resources and Remuneration Committee. The membership of the Committee is
noted in Section 1 of the Directors’ report, as is the number of meetings and individual attendance during the
period ended 27 June 2020.
GENDER PAY EQUITY
The Group is committed to remunerating all team members fairly and equitably. In recognition of our commitment
to gender equality, the Group received the 2019-20 Employer of Choice for Gender Equality (EOCGE) citation from
the Workplace Gender Equality Agency (WGEA), the first and only retail business in Australia to be recognised for a
citation in the six-year history of EOCGE.
In support of gender pay equity, the Group conducts annual gender pay equity reviews. The 2020 review identified
a small gender pay gap at an organisation-wide level. This is being addressed at the divisional level. In addition, the
organisation is monitoring recruitment, performance and reward processes to ensure we deliver on our
commitment to provide equitable, fair and consistent pay arrangements to team members.
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Remuneration
Remuneration
Report (Audited)
Report (Audited)
SERVICE AGREEMENTS
SERVICE AGREEMENTS
FOR THE YEAR
FOR THE YEAR
ENDED 27 JUNE 2020
ENDED 27 JUNE 2020
Remuneration and other terms of employment for ongoing Executive KMP are formalised in service agreements.
Remuneration and other terms of employment for ongoing Executive KMP are formalised in service agreements.
Each of these agreements provide for the provision of performance related cash bonuses, other benefits and when
Each of these agreements provide for the provision of performance related cash bonuses, other benefits and when
eligible, participation in the Performance Rights Plans and Option Plans. Restraint provisions are detailed below.
eligible, participation in the Performance Rights Plans and Option Plans. Restraint provisions are detailed below.
All contracts with Executive KMP may be terminated early by either party as shown in Table 18.
All contracts with Executive KMP may be terminated early by either party as shown in Table 18.
Table 18:
Table 18:
Name
Name
A M Heraghty
A M Heraghty
P A Bradshaw
P A Bradshaw
A Brandon
A Brandon
D J Burns
D J Burns
B L Ward
B L Ward
G S Williams
G S Williams
Term of
Term of
Agreement
Agreement
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Agreement
Agreement
Commencement
Commencement
Date(1)
Date(1)
Termination
Termination
payment
payment
Commencement
Commencement
date with
date with
Super Retail Group
Super Retail Group
20 February 2019
20 February 2019
12 months(2)
12 months(2)
27 April 2015
27 April 2015
25 November 2019
25 November 2019
6 months(2)
6 months(2)
25 November 2019
25 November 2019
31 March 2018
31 March 2018
3 October 2018
3 October 2018
1 August 2019
1 August 2019
2 April 2019
2 April 2019
6 months(2)
6 months(2)
6 months(2)
6 months(2)
6 months(2)
6 months(2)
6 months(2)
6 months(2)
31 March 2018
31 March 2018
3 December 2012
3 December 2012
29 July 2019
29 July 2019
2 April 2019
2 April 2019
(1) Commencement date of service agreement.
(1) Commencement date of service agreement.
(2) Payment of a termination benefit on early termination by the Company, other than for cause, equal to the base salary for the period detailed.
(2) Payment of a termination benefit on early termination by the Company, other than for cause, equal to the base salary for the period detailed.
PERIOD OF RESTRAINT
PERIOD OF RESTRAINT
Executive KMP have post-employment restraints within their service contracts.
Executive KMP have post-employment restraints within their service contracts.
After cessation of employment for any reason, the employee must not compete with the company’s relevant
After cessation of employment for any reason, the employee must not compete with the company’s relevant
specialty retailing businesses (including direct or indirect involvement as a principal, agent, partner, employee,
specialty retailing businesses (including direct or indirect involvement as a principal, agent, partner, employee,
shareholder, unit holder, director, trustee, beneficiary, manager, contractor, adviser or financier), without first
shareholder, unit holder, director, trustee, beneficiary, manager, contractor, adviser or financier), without first
obtaining the consent of the company in writing. These restraints range from periods of 12 months for Group MD
obtaining the consent of the company in writing. These restraints range from periods of 12 months for Group MD
and CEO to 3 –12 months for other Executive KMP.
and CEO to 3 –12 months for other Executive KMP.
2019 – 2020
Financial
Report
F O R T H E Y E A R E N D E D 2 7 J U N E 2 0 2 0
Super Retail Group Limited
ABN: 81 108 676 204
ASX Code: SUL
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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period ended 27 June 2020
For the period ended 27 June 2020
CONSOLIDATED BALANCE SHEET
As at 27 June 2020
CONTINUING OPERATIONS
CONTINUING OPERATIONS
Revenue from continuing operations
Revenue from continuing operations
Other income from continuing operations
Other income from continuing operations
Total revenues and other income
Total revenues and other income
Expenses
Expenses
Cost of sales of goods
Cost of sales of goods
Other expenses from ordinary activities
Other expenses from ordinary activities
- selling and distribution
- selling and distribution
- marketing
- marketing
- occupancy
- occupancy
- administration
- administration
Net finance costs
Net finance costs
Share of net loss of associates and joint ventures
Share of net loss of associates and joint ventures
Total expenses
Total expenses
Profit before income tax
Profit before income tax
Income tax expense
Income tax expense
Profit for the period
Profit for the period
Profit for the period is attributable to:
Profit for the period is attributable to:
Owners of Super Retail Group Limited
Owners of Super Retail Group Limited
Non-controlling interests
Non-controlling interests
OTHER COMPREHENSIVE INCOME
OTHER COMPREHENSIVE INCOME
Items that may be reclassified to profit or loss
Items that may be reclassified to profit or loss
Changes in the fair value of cash flow hedges
Changes in the fair value of cash flow hedges
Exchange differences on translation of foreign operations
Exchange differences on translation of foreign operations
Other comprehensive income for the period, net of tax
Other comprehensive income for the period, net of tax
Total comprehensive income for the period
Total comprehensive income for the period
Total comprehensive income for the period is attributable to:
Total comprehensive income for the period is attributable to:
Owners of Super Retail Group Limited
Owners of Super Retail Group Limited
Non-controlling interests
Non-controlling interests
Earnings per share for profit attributable to the ordinary equity holders
Earnings per share for profit attributable to the ordinary equity holders
of the Company:
of the Company:
Basic earnings per share
Basic earnings per share
Diluted earnings per share
Diluted earnings per share
Notes
Notes
5
5
2020
2020
$m
$m
2,825.2
2,825.2
0.2
0.2
2,825.4
2,825.4
2019
2019
$m
$m
2,710.4
2,710.4
2.8
2.8
2,713.2
2,713.2
(1,555.1)
(1,555.1)
(1,488.2)
(1,488.2)
(371.2)
(371.2)
(79.1)
(79.1)
(204.9)
(204.9)
(403.6)
(403.6)
(55.1)
(55.1)
(0.6)
(0.6)
(347.8)
(347.8)
(81.9)
(81.9)
(215.5)
(215.5)
(366.4)
(366.4)
(21.3)
(21.3)
(2.6)
(2.6)
(2,669.6)
(2,669.6)
(2,523.7)
(2,523.7)
155.8
155.8
(45.6)
(45.6)
110.2
110.2
110.2
110.2
-
-
110.2
110.2
1.0
1.0
(1.5)
(1.5)
(0.5)
(0.5)
109.7
109.7
109.7
109.7
-
-
109.7
109.7
55.8
55.8
55.3
55.3
189.5
189.5
(50.3)
(50.3)
139.2
139.2
139.3
139.3
(0.1)
(0.1)
139.2
139.2
(6.3)
(6.3)
2.7
2.7
(3.6)
(3.6)
135.6
135.6
135.7
135.7
(0.1)
(0.1)
135.6
135.6
70.6
70.6
69.9
69.9
6
6
6
6
14
14
19
19
19
19
17
17
17
17
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Current tax asset
Derivative financial instruments
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Deferred tax assets
Other financial assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Current tax liabilities
Provisions
Derivative financial instruments
Total current liabilities
Non-current liabilities
Trade and other payables
Borrowings
Lease liabilities
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
NET ASSETS
EQUITY
Contributed equity
Reserves
Retained earnings
Notes
7
8
14
16
9
11
10
14
24(b)
12
13
11
14
15
16
12
13
11
14
15
18
19
19
Capital and reserves attributable to owners of Super Retail Group Limited
Non-controlling interests
TOTAL EQUITY
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
2020
$m
285.1
26.3
502.4
-
-
813.8
227.8
848.0
874.3
4.9
6.3
1,961.3
2,775.1
442.3
-
178.4
17.1
111.1
1.9
750.8
-
247.8
760.9
-
24.3
1,033.0
1,783.8
991.3
698.1
7.5
285.7
991.3
-
991.3
2019
$m
7.5
37.6
560.2
1.9
2.8
610.0
267.9
-
894.2
-
6.9
1,169.0
1,779.0
362.7
3.4
-
-
107.3
6.2
479.6
49.5
390.8
-
23.4
19.7
483.4
963.0
816.0
542.3
8.2
265.9
816.4
(0.4)
816.0
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 27 June 2020
For the period ended 27 June 2020
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended 27 June 2020
Contributed
Contributed
Equity
Equity
Reserves Retained
Reserves Retained
Earnings
Earnings
Restated
Restated
Notes
Notes
$m
$m
$m
$m
$m
$m
Total
Total
Restated
Restated
$m
$m
Non-
Non-
Controlling
Controlling
Interests
Interests
$m
$m
Total
Total
Equity
Equity
Restated
Restated
$m
$m
Balance at 30 June 2018
Balance at 30 June 2018
542.3
542.3
10.3
10.3
223.3
223.3
775.9
775.9
(0.7)
(0.7)
775.2
775.2
Profit for the period
Profit for the period
Other comprehensive loss for the period
Other comprehensive loss for the period
Total comprehensive income for the period
Total comprehensive income for the period
Transactions with owners in
Transactions with owners in
their capacity as owners
their capacity as owners
Dividends provided for or paid
Dividends provided for or paid
Employee performance rights
Employee performance rights
22
22
19
19
Change in ownership interest in controlled entities
Change in ownership interest in controlled entities
24(a)
24(a)
Balance at 29 June 2019
Balance at 29 June 2019
Change in accounting policy – AASB 16
Change in accounting policy – AASB 16
Restated total equity at 29 June 2019
Restated total equity at 29 June 2019
-
-
-
-
-
-
-
-
-
-
-
-
-
-
542.3
542.3
-
-
542.3
542.3
-
-
139.3
139.3
(3.6)
(3.6)
(3.6)
(3.6)
-
-
139.3
139.3
139.3
139.3
(3.6)
(3.6)
135.7
135.7
(96.7)
(96.7)
(96.7)
(96.7)
-
-
1.3
1.3
0.2
0.2
1.5
1.5
8.2
8.2
-
-
8.2
8.2
-
-
-
-
(96.7)
(96.7)
265.9
265.9
(34.2)
(34.2)
231.7
231.7
Profit for the period
Profit for the period
Other comprehensive loss for the period
Other comprehensive loss for the period
Total comprehensive income for the period
Total comprehensive income for the period
-
-
-
-
-
-
-
-
110.2
110.2
(0.5)
(0.5)
(0.5)
(0.5)
-
-
110.2
110.2
Transactions with owners in
Transactions with owners in
their capacity as owners
their capacity as owners
Contributions of equity, net of transaction costs
Contributions of equity, net of transaction costs
Dividends provided for or paid
Dividends provided for or paid
Employee performance rights
Employee performance rights
18
18
22
22
19
19
Change in ownership interest in controlled entities
Change in ownership interest in controlled entities
24(a)
24(a)
Balance at 27 June 2020
Balance at 27 June 2020
155.8
155.8
-
-
-
-
-
-
155.8
155.8
698.1
698.1
-
-
-
-
0.2
0.2
(0.4)
(0.4)
(0.2)
(0.2)
7.5
7.5
-
-
(56.2)
(56.2)
-
-
-
-
(56.2)
(56.2)
285.7
285.7
(0.1)
(0.1)
-
-
(0.1)
(0.1)
-
-
-
-
0.4
0.4
0.4
0.4
(0.4)
(0.4)
-
-
(0.4)
(0.4)
-
-
-
-
-
-
-
-
-
-
-
-
0.4
0.4
0.4
0.4
-
-
139.2
139.2
(3.6)
(3.6)
135.6
135.6
(96.7)
(96.7)
1.3
1.3
0.6
0.6
(94.8)
(94.8)
816.0
816.0
(34.2)
(34.2)
781.8
781.8
110.2
110.2
(0.5)
(0.5)
109.7
109.7
155.8
155.8
(56.2)
(56.2)
0.2
0.2
-
-
99.8
99.8
991.3
991.3
1.3
1.3
0.2
0.2
(95.2)
(95.2)
816.4
816.4
(34.2)
(34.2)
782.2
782.2
110.2
110.2
(0.5)
(0.5)
109.7
109.7
155.8
155.8
(56.2)
(56.2)
0.2
0.2
(0.4)
(0.4)
99.4
99.4
991.3
991.3
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)
Payments to suppliers and employees (inclusive of goods and services tax)
Notes
Rental payments
Income taxes paid
Net cash inflow from operating activities
20
Cash flows from investing activities
Payments for property, plant and equipment and computer software
Proceeds from sale of property, plant and equipment
Payments for acquisitions of investments in associates/joint ventures
Acquisition of subsidiary, net of cash acquired
Net cash (outflow) from investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Lease principal payments
Borrowing costs paid
Interest paid
Proceeds from issue of shares, net of transaction costs
Dividends paid to Company’s shareholders
Net cash (outflow) from financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of the period
24(b)
24(a)
22
2020
$m
3,139.0
(2,436.6)
(51.1)
(40.6)
610.7
(68.4)
0.6
-
(0.1)
(67.9)
963.0
(1,103.0)
(171.8)
(0.2)
(53.6)
157.0
(56.2)
(264.8)
278.0
7.5
(0.4)
285.1
2019
$m
2,995.8
(2,438.0)
(262.7)
(54.2)
240.9
(89.8)
-
(0.7)
-
(90.5)
946.0
(986.0)
(3.3)
(2.4)
(16.0)
-
(96.7)
(158.4)
(8.0)
15.2
0.3
7.5
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the period ended 27 June 2020
For the period ended 27 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
Segment information
Segment information
Revenue and other income from continuing operations
Revenue and other income from continuing operations
Expenses from continuing operations
Expenses from continuing operations
TABLE OF CONTENTS
TABLE OF CONTENTS
Reporting entity
Reporting entity
Summary of significant accounting policies
Summary of significant accounting policies
Critical accounting estimates and judgements
Critical accounting estimates and judgements
Basis of Preparation
Basis of Preparation
1.
1.
2.
2.
3.
3.
Group Performance
Group Performance
4.
4.
5.
5.
6.
6.
Assets and Liabilities
Assets and Liabilities
Trade and other receivables
7.
7.
Trade and other receivables
Inventories
8.
Inventories
8.
Property, plant and equipment
9.
Property, plant and equipment
9.
Intangible assets
10.
Intangible assets
10.
Leases
11.
11.
Leases
Trade and other payables
12.
Trade and other payables
12.
Borrowings
13.
Borrowings
13.
Income taxes
14.
Income taxes
14.
Provisions
15.
15.
Provisions
Financial assets and financial liabilities
16.
Financial assets and financial liabilities
16.
Capital Structure, Financing and Risk Management
Capital Structure, Financing and Risk Management
17.
Earnings per share
Earnings per share
17.
18. Contributed equity
18. Contributed equity
19.
19.
20.
20.
21.
21.
22. Capital management
22. Capital management
Group Structure
Group Structure
23.
23.
24.
24.
25. Deed of cross guarantee
25. Deed of cross guarantee
26.
26.
27.
27.
Other
Other
28.
28.
29.
29.
30.
30.
31. Contingencies
31. Contingencies
32. Commitments
32. Commitments
33. Net tangible asset backing
33. Net tangible asset backing
34. Changes in accounting policy
34. Changes in accounting policy
35.
35.
Key management personnel disclosures
Key management personnel disclosures
Share-based payments
Share-based payments
Remuneration of auditors
Remuneration of auditors
Parent entity financial information
Parent entity financial information
Investments in controlled entities
Investments in controlled entities
Related party transactions
Related party transactions
Business combinations
Business combinations
Events occurring after balance date
Events occurring after balance date
Reserves and retained earnings
Reserves and retained earnings
Reconciliation of profit from ordinary activities after income tax to net cash inflow from operating activities
Reconciliation of profit from ordinary activities after income tax to net cash inflow from operating activities
Financial risk management
Financial risk management
85
85
85
85
87
87
88
88
91
91
91
91
93
93
94
94
94
94
96
96
100
100
101
101
102
102
103
103
107
107
109
109
112
112
113
113
114
114
115
115
116
116
122
122
123
123
124
124
125
125
127
127
128
128
129
129
129
129
130
130
131
131
131
131
131
131
132
132
133
133
1.
Reporting entity
Super Retail Group Limited (the Company or parent entity) is a company domiciled in Australia. The address of the Company’s
registered office and principal place of business is 6 Coulthards Avenue, Strathpine, Queensland.
The consolidated annual financial report of the Company as at and for the period ended 27 June 2020 comprises: the Company and
its subsidiaries (together referred to as the Group, and individually as Group entities).
The Group is a for-profit entity and is primarily involved in the retail industry. Principal activities of the Group consist of:
retailing of auto parts and accessories, tools and equipment;
retailing of boating, camping, outdoor equipment, fishing equipment and apparel; and
retailing of sporting equipment and apparel.
2.
Summary of significant accounting policies
This section sets out the principal accounting policies upon which the Group’s consolidated financial statements are prepared as a
whole. Specific accounting policies are described in their respective Notes to the Consolidated Financial Statements. These policies
have been consistently applied to all the years presented, unless otherwise stated.
(a)
Basis of preparation
Statement of compliance
This general purpose financial report has been prepared in accordance with Australian Accounting Standards, other authoritative
pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001.
The consolidated financial statements and accompanying notes of Super Retail Group Limited comply with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board.
Basis of measurement
These financial statements have been prepared under the historical cost convention, unless otherwise stated.
(b)
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all entities controlled by Super Retail Group Limited as at
27 June 2020 and the results of its controlled entities for the period then ended. The effects of all transactions between entities in the
consolidated entity are fully eliminated.
Transactions eliminated on consolidation
(i)
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated
in preparing the consolidated financial statements. Unrealised losses are eliminated in the same way as unrealised gains, but only to
the extent that there is no evidence of impairment.
Subsidiaries
(ii)
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the
Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred
to the Group. These are deconsolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised
losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated income statement, statement
of comprehensive income, balance sheet and statement of changes in equity respectively.
Business combinations
(iii)
The acquisition method of accounting is used to account for all business combinations (refer Note 23 - Business combinations),
regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary
comprises the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration
transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest
in the subsidiary. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are, with limited exceptions, measured initially at their fair values as at the acquisition date. On an
acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-
controlling interest’s proportionate share of the acquiree’s net identifiable assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair
value of any previous equity interest in the acquiree over the fair value of the Group’s share of the net identifiable assets acquired is
recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired and the
measurement of all amounts has been reviewed, the difference is recognised directly in profit or loss as a bargain purchase.
86 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
86 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
86 S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0 87
S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
87
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
For the period ended 27 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
2.
2.
Summary of significant accounting policies (continued)
Summary of significant accounting policies (continued)
(b)
(b)
Principles of consolidation (continued)
Principles of consolidation (continued)
2.
(d)
Summary of significant accounting policies (continued)
Goods and Services Tax
Business combinations (continued)
Business combinations (continued)
(iii)
(iii)
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present
value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar
value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar
borrowing could be obtained from an independent financier under comparable terms and conditions.
borrowing could be obtained from an independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently
remeasured to fair value with changes in fair value recognised in profit or loss.
remeasured to fair value with changes in fair value recognised in profit or loss.
Investments in associates and joint ventures
Investments in associates and joint ventures
(iv)
(iv)
Associates and joint ventures are entities over which the Group has significant influence or joint control but not control. They are
Associates and joint ventures are entities over which the Group has significant influence or joint control but not control. They are
accounted for using the equity method (see (v) below), after initially being recognised at cost in the consolidated balance sheet.
accounted for using the equity method (see (v) below), after initially being recognised at cost in the consolidated balance sheet.
Equity method
Equity method
(v)
(v)
Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise the
Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise the
Group’s share of the post-acquisition profits or losses of the investee in profit or loss, and the Group’s share of movements in other
Group’s share of the post-acquisition profits or losses of the investee in profit or loss, and the Group’s share of movements in other
comprehensive income of the investee in other comprehensive income. Dividends received or receivable from associates and joint
comprehensive income of the investee in other comprehensive income. Dividends received or receivable from associates and joint
ventures are recognised as a reduction in the carrying amount of the investment.
ventures are recognised as a reduction in the carrying amount of the investment.
When the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any other
When the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any other
unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments
unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments
on behalf of the other entity.
on behalf of the other entity.
Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to the extent of the Group’s
Unrealised gains on transactions between the Group and its associates and joint ventures are eliminated to the extent of the Group’s
interest in these entities. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset
interest in these entities. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset
transferred. Accounting policies of equity accounted investees have been changed where necessary to ensure consistency with the
transferred. Accounting policies of equity accounted investees have been changed where necessary to ensure consistency with the
policies adopted by the Group.
policies adopted by the Group.
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of
the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-
the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-
controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-
controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-
controlling interests and any consideration paid or received is recognised in a separate reserve within equity attributable to the owners
controlling interests and any consideration paid or received is recognised in a separate reserve within equity attributable to the owners
of Super Retail Group Limited.
of Super Retail Group Limited.
Comparatives
Comparatives
(vi)
(vi)
Where applicable, various comparative balances have been reclassified to align with current period presentation. These
Where applicable, various comparative balances have been reclassified to align with current period presentation. These
amendments have no material impact on the consolidated financial statements.
amendments have no material impact on the consolidated financial statements.
(c)
(c)
Foreign currency translation
Foreign currency translation
Functional and presentation currency
Functional and presentation currency
(i)
(i)
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in
environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in
Australian dollars, which is Super Retail Group Limited’s functional and presentation currency.
Australian dollars, which is Super Retail Group Limited’s functional and presentation currency.
Transactions and balances
Transactions and balances
(ii)
(ii)
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-
end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement,
end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement,
except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.
except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.
Translation differences on non-monetary items such as equities held at fair value through profit or loss, are reported as part of the fair
Translation differences on non-monetary items such as equities held at fair value through profit or loss, are reported as part of the fair
value gain or loss. Translation differences on non-monetary items, such as equities classified as available-for-sale financial assets, are
value gain or loss. Translation differences on non-monetary items, such as equities classified as available-for-sale financial assets, are
included in the fair value reserve in equity.
included in the fair value reserve in equity.
Group companies
Group companies
(iii)
(iii)
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have
a functional currency different from the presentation currency are translated into the presentation currency as follows:
a functional currency different from the presentation currency are translated into the presentation currency as follows:
assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that
assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that
statement of financial position;
statement of financial position;
income and expenses for each income statement are translated at average exchange rates (unless this is not a reasonable
income and expenses for each income statement are translated at average exchange rates (unless this is not a reasonable
approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are
approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are
translated at the dates of the transactions); and
translated at the dates of the transactions); and
all resulting exchange differences are recognised as a separate component of equity.
all resulting exchange differences are recognised as a separate component of equity.
Revenues, expenses and assets are recognised net of the amount of goods and services tax, except where the amount of goods and
services tax incurred is not recoverable. In these circumstances the goods and services tax is recognised as part of the cost of
acquisition of the asset or as part of the item of expense. Receivables and payables in the consolidated statement of financial position
are shown inclusive of goods and services tax.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are
recoverable from, or payable to, the taxation authority, are presented as operating cash flow.
(e)
Rounding of amounts
The economic entity is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, issued
by the Australian Securities and Investments Commission, relating to the ‘rounding off’ of amounts in the financial report. Amounts in
the financial report have been rounded off in accordance with that instrument to the nearest hundred thousand dollars.
(f)
Financial year
As allowed under Section 323D(2) of the Corporations Act 2001, the Directors have determined the financial year to be a fixed period
of 52 calendar or 53 calendar weeks. For the period to 27 June 2020, the Group is reporting on the 52 week period that began 30
June 2019 and ended 27 June 2020. For the period to 29 June 2019, the Group is reporting on the 52 week period that began 1 July
2018 and ended 29 June 2019.
(g)
New and amended standards adopted by the Group
The following new accounting standards and amendments to accounting standards became applicable in the current reporting
period:
AASB 16 Leases
The Group had to change its accounting policies and make retrospective adjustments as at 29 June 2019 as a result of adopting AASB
16 Leases. The impact of adoption of the leasing standard and the new accounting policies are disclosed in Note 34 – Changes in
Accounting Policies.
(h)
Impact of standards issued but not yet applied by the Group
Certain new accounting standards and interpretations have been published that are not mandatory for 27 June 2020 reporting
periods and have not been early adopted by the Group and are listed below. These standards are not expected to have a material
impact on the entity in the current or future reporting periods and on foreseeable future transactions.
AASB 2018-7 Amendments to Australian Accounting Standards – Definition of Material [AASB 101 and AASB 108]
AASB 2018-6 Amendments to Australian Accounting Standards – Definition of a Business [AASB 3]
AASB 2019-1 Amendments to Australian Accounting Standards – References to the Conceptual Framework
3.
Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the
circumstances.
(a)
Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom
equal the related actual results. 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 included in the following Notes to the consolidated financial
statements:
Note 8 – Inventories;
Note 9 – Property, plant and equipment;
Note 10 – Intangible assets;
Note 11 – Leases;
Note 15 – Provisions;
Note 24 – Business combinations.
88 S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
88 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
88 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
88 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
88 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0 89
S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
89
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
For the period ended 27 June 2020
For the period ended 27 June 2020
For the period ended 27 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
Description of segments
Description of segments
Description of segments
Description of segments
Segment information
Segment information
Segment information
Segment information
4.
4.
4.
4.
(a)
(a)
(a)
(a)
Management have determined the operating segments based on the reports reviewed by the Group Managing Director and Chief
Management have determined the operating segments based on the reports reviewed by the Group Managing Director and Chief
Management have determined the operating segments based on the reports reviewed by the Group Managing Director and Chief
Management have determined the operating segments based on the reports reviewed by the Group Managing Director and Chief
Executive Officer that are used to make strategic decisions. No operating segments have been aggregated to form the below
Executive Officer that are used to make strategic decisions. No operating segments have been aggregated to form the below
Executive Officer that are used to make strategic decisions. No operating segments have been aggregated to form the below
Executive Officer that are used to make strategic decisions. No operating segments have been aggregated to form the below
reportable operating segments. This results in the following business segments:
reportable operating segments. This results in the following business segments:
reportable operating segments. This results in the following business segments:
reportable operating segments. This results in the following business segments:
Supercheap Auto (SCA): retailing of auto parts and accessories, tools and equipment;
Supercheap Auto (SCA): retailing of auto parts and accessories, tools and equipment;
Supercheap Auto (SCA): retailing of auto parts and accessories, tools and equipment;
Supercheap Auto (SCA): retailing of auto parts and accessories, tools and equipment;
rebel: retailing of sporting equipment and apparel;
rebel: retailing of sporting equipment and apparel;
rebel: retailing of sporting equipment and apparel;
rebel: retailing of sporting equipment and apparel;
BCF: retailing of boating, camping, outdoor equipment, fishing equipment and apparel; and
BCF: retailing of boating, camping, outdoor equipment, fishing equipment and apparel; and
BCF: retailing of boating, camping, outdoor equipment, fishing equipment and apparel; and
BCF: retailing of boating, camping, outdoor equipment, fishing equipment and apparel; and
Macpac: retailing of apparel, camping and outdoor equipment.
Macpac: retailing of apparel, camping and outdoor equipment.
Macpac: retailing of apparel, camping and outdoor equipment.
Macpac: retailing of apparel, camping and outdoor equipment.
(b)
(b)
(b)
(b)
Segment information provided to the Group Managing Director and Chief Executive Officer
Segment information provided to the Group Managing Director and Chief Executive Officer
Segment information provided to the Group Managing Director and Chief Executive Officer
Segment information provided to the Group Managing Director and Chief Executive Officer
Detailed below is the information provided to the Group Managing Director and Chief Executive Officer for reportable segments.
Detailed below is the information provided to the Group Managing Director and Chief Executive Officer for reportable segments.
Detailed below is the information provided to the Group Managing Director and Chief Executive Officer for reportable segments.
Detailed below is the information provided to the Group Managing Director and Chief Executive Officer for reportable segments.
Items not included in Normalised Net Profit After Tax (Normalised NPAT), and excluded from the calculation of Segment EBITDA and
Items not included in Normalised Net Profit After Tax (Normalised NPAT), and excluded from the calculation of Segment EBITDA and
Items not included in Normalised Net Profit After Tax (Normalised NPAT), and excluded from the calculation of Segment EBITDA and
Items not included in Normalised Net Profit After Tax (Normalised NPAT), and excluded from the calculation of Segment EBITDA and
Segment EBIT, are one-off charges relating to business restructuring, non-continuing operations and other costs not considered part
Segment EBIT, are one-off charges relating to business restructuring, non-continuing operations and other costs not considered part
Segment EBIT, are one-off charges relating to business restructuring, non-continuing operations and other costs not considered part
Segment EBIT, are one-off charges relating to business restructuring, non-continuing operations and other costs not considered part
of normal operations. Normalised NPAT also excludes the impact of the new leasing standard (AASB 16 Leases) applied for the first
of normal operations. Normalised NPAT also excludes the impact of the new leasing standard (AASB 16 Leases) applied for the first
of normal operations. Normalised NPAT also excludes the impact of the new leasing standard (AASB 16 Leases) applied for the first
of normal operations. Normalised NPAT also excludes the impact of the new leasing standard (AASB 16 Leases) applied for the first
time during the financial year.
time during the financial year.
time during the financial year.
time during the financial year.
Other items not included in total segment NPAT are determined by management based on their nature and size. They are items of
Other items not included in total segment NPAT are determined by management based on their nature and size. They are items of
Other items not included in total segment NPAT are determined by management based on their nature and size. They are items of
Other items not included in total segment NPAT are determined by management based on their nature and size. They are items of
income or expense which are, either individually or in aggregate, material to the Group or to the relevant business segment but are
income or expense which are, either individually or in aggregate, material to the Group or to the relevant business segment but are
income or expense which are, either individually or in aggregate, material to the Group or to the relevant business segment but are
income or expense which are, either individually or in aggregate, material to the Group or to the relevant business segment but are
not in the ordinary course of business (for example reorganisations), or are part of the ordinary activities of the business but are unusual
not in the ordinary course of business (for example reorganisations), or are part of the ordinary activities of the business but are unusual
not in the ordinary course of business (for example reorganisations), or are part of the ordinary activities of the business but are unusual
not in the ordinary course of business (for example reorganisations), or are part of the ordinary activities of the business but are unusual
due to their size and nature (for example professional fees in relation to remediation activities).
due to their size and nature (for example professional fees in relation to remediation activities).
due to their size and nature (for example professional fees in relation to remediation activities).
due to their size and nature (for example professional fees in relation to remediation activities).
For the period ended 27 June 2020
For the period ended 27 June 2020
For the period ended 27 June 2020
For the period ended 27 June 2020
SCA
SCA
SCA
SCA
$m
$m
$m
$m
rebel
rebel
rebel
rebel
$m
$m
$m
$m
BCF
BCF
BCF
BCF
$m
$m
$m
$m
Macpac
Macpac
Macpac
Macpac
$m
$m
$m
$m
Total
Total
Total
Total
continuing
continuing
continuing
continuing
operations
operations
operations
operations
$m
$m
$m
$m
Inter-segment
Inter-segment
Inter-segment
Inter-segment
eliminations/
eliminations/
eliminations/
eliminations/
unallocated
unallocated
unallocated
unallocated
$m
$m
$m
$m
Consolidated
Consolidated
Consolidated
Consolidated
$m
$m
$m
$m
4.
(b)
Segment information (continued)
Segment information provided to the Group Managing Director and Chief Executive Officer (continued)
For the period ended 29 June 2019
SCA
$m
rebel
$m
BCF
$m
Macpac
$m
Total
continuing
operations
$m
Inter-segment
eliminations/
unallocated
$m
Consolidated
$m
1,040.6
0.1
1,016.4
1.5
1,040.7
156.1
1,017.9
122.6
(28.8)
93.8
Segment Revenue and Other Income
External segment revenue(1)
Other income
Total segment revenue and other
income
Segment EBITDA(2)
(35.5)
120.6
Segment depreciation and amortisation
Segment EBIT result
Net finance costs
Total segment NPBT
Segment income tax expense(3)
Normalised NPAT
Other items not included in the total segment NPAT(4)
Profit for the period attributable to:
Owners of Super Retail Group Limited
Non-controlling interests
Profit for the period
514.6
0.2
514.8
40.2
(19.4)
20.8
138.8
0.1
138.9
15.6
(2.6)
13.0
2,710.4
1.9
2,712.3
334.5
(86.3)
248.2
-
0.9
0.9
(19.8)
(0.3)
(20.1)
2,710.4
2.8
2,713.2
314.7
(86.6)
228.1
(21.3)
206.8
(54.3)
152.5
(13.2)
139.3
(0.1)
139.2
1,119.7
1,119.7
1,119.7
1,119.7
-
-
-
-
1,119.7
1,119.7
1,119.7
1,119.7
174.7
174.7
174.7
174.7
Segment Revenue and Other Income
Segment Revenue and Other Income
Segment Revenue and Other Income
Segment Revenue and Other Income
External segment revenue
External segment revenue
External segment revenue
External segment revenue
Other income
Other income
Other income
Other income
Total segment revenue and other
Total segment revenue and other
Total segment revenue and other
Total segment revenue and other
income
income
income
income
Segment EBITDA(1)
Segment EBITDA(1)
Segment EBITDA(1)
Segment EBITDA(1)
Segment depreciation and
Segment depreciation and
Segment depreciation and
Segment depreciation and
amortisation(2)
amortisation(2)
amortisation(2)
amortisation(2)
Segment EBIT result
Segment EBIT result
Segment EBIT result
Segment EBIT result
Net finance costs(3)
Net finance costs(3)
Net finance costs(3)
Net finance costs(3)
Total segment NPBT
Total segment NPBT
Total segment NPBT
Total segment NPBT
Segment income tax expense(4)
Segment income tax expense(4)
Segment income tax expense(4)
Segment income tax expense(4)
Normalised NPAT
Normalised NPAT
Normalised NPAT
Normalised NPAT
AASB16 Leases adjustment(5)
AASB16 Leases adjustment(5)
AASB16 Leases adjustment(5)
AASB16 Leases adjustment(5)
Other items not included in the total segment NPAT(5)
Other items not included in the total segment NPAT(5)
Other items not included in the total segment NPAT(5)
Other items not included in the total segment NPAT(5)
Profit for the period attributable to:
Profit for the period attributable to:
Profit for the period attributable to:
Profit for the period attributable to:
Owners of Super Retail Group Limited
Owners of Super Retail Group Limited
Owners of Super Retail Group Limited
Owners of Super Retail Group Limited
Non-controlling interests
Non-controlling interests
Non-controlling interests
Non-controlling interests
Profit for the period
Profit for the period
Profit for the period
Profit for the period
(39.8)
(39.8)
(39.8)
(39.8)
134.9
134.9
134.9
134.9
1,038.6
1,038.6
1,038.6
1,038.6
0.1
0.1
0.1
0.1
1,038.7
1,038.7
1,038.7
1,038.7
126.6
126.6
126.6
126.6
(30.0)
(30.0)
(30.0)
(30.0)
96.6
96.6
96.6
96.6
535.0
535.0
535.0
535.0
0.1
0.1
0.1
0.1
535.1
535.1
535.1
535.1
34.9
34.9
34.9
34.9
(19.2)
(19.2)
(19.2)
(19.2)
15.7
15.7
15.7
15.7
131.9
131.9
131.9
131.9
-
-
-
-
131.9
131.9
131.9
131.9
10.1
10.1
10.1
10.1
(2.9)
(2.9)
(2.9)
(2.9)
7.2
7.2
7.2
7.2
2,825.2
2,825.2
2,825.2
2,825.2
0.2
0.2
0.2
0.2
2,825.4
2,825.4
2,825.4
2,825.4
346.3
346.3
346.3
346.3
(91.9)
(91.9)
(91.9)
(91.9)
254.4
254.4
254.4
254.4
-
-
-
-
-
-
-
-
-
-
-
-
(18.2)
(18.2)
(18.2)
(18.2)
(0.1)
(0.1)
(0.1)
(0.1)
(18.3)
(18.3)
(18.3)
(18.3)
2,825.2
2,825.2
2,825.2
2,825.2
0.2
0.2
0.2
0.2
2,825.4
2,825.4
2,825.4
2,825.4
328.1
328.1
328.1
328.1
(92.0)
(92.0)
(92.0)
(92.0)
236.1
236.1
236.1
236.1
(17.8)
(17.8)
(17.8)
(17.8)
218.3
218.3
218.3
218.3
(64.2)
(64.2)
(64.2)
(64.2)
154.1
154.1
154.1
154.1
(5.9)
(5.9)
(5.9)
(5.9)
(38.0)
(38.0)
(38.0)
(38.0)
110.2
110.2
110.2
110.2
-
-
-
-
110.2
110.2
110.2
110.2
Footnote item
Non-controlling interest (NCI)
Team member underpayment remediation and execution
costs
Organisational restructure costs
Loss on divestment of Youcamp
Loss on investment in Autocrew
Equity accounted losses – Autoguru
Provision reversals from previous years
(1) External
segment
revenue
includes
$m
1.3
-
-
-
-
-
-
1.3
(2) Segment
EBITDA
adjusted for
$m
(3) Segment
income tax
adjusted for
$m
(4) Other items
not included
in total
segment
NPAT
$m
0.1
8.9
6.1
0.6
1.1
2.2
(1.7)
17.3
-
2.7
1.8
-
-
-
(0.5)
4.0
-
6.2
4.3
0.6
1.1
2.2
(1.2)
13.2
Footnote item
Footnote item
Footnote item
Footnote item
Team member underpayment remediation
Team member underpayment remediation
Team member underpayment remediation
Team member underpayment remediation
Execution costs to complete remediation
Execution costs to complete remediation
Execution costs to complete remediation
Execution costs to complete remediation
Accelerated asset amortisation to support
Accelerated asset amortisation to support
Accelerated asset amortisation to support
Accelerated asset amortisation to support
information technology move to cloud
information technology move to cloud
information technology move to cloud
information technology move to cloud
Support office restructure costs
Support office restructure costs
Support office restructure costs
Support office restructure costs
Interest rate swaps early termination
Interest rate swaps early termination
Closure costs of non-core businesses –
Closure costs of non-core businesses –
Interest rate swaps early termination
Interest rate swaps early termination
Infinite Retail and Autocrew
Infinite Retail and Autocrew
Closure costs of non-core businesses –
Closure costs of non-core businesses –
Infinite Retail and Autocrew
Infinite Retail and Autocrew
Equity accounted losses – Autoguru
Equity accounted losses – Autoguru
Equity accounted losses – Autoguru
Equity accounted losses – Autoguru
Provision reversals from previous years
Provision reversals from previous years
Provision reversals from previous years
Provision reversals from previous years
Impact of AASB 16 Leases adjustment
Impact of AASB 16 Leases adjustment
Impact of AASB 16 Leases adjustment
Impact of AASB 16 Leases adjustment
(1) Segment
(1) Segment
(1) Segment
(1) Segment
EBITDA
EBITDA
EBITDA
EBITDA
adjusted for
adjusted for
adjusted for
adjusted for
$m
$m
$m
$m
14.7
14.7
14.7
14.7
9.7
9.7
9.7
9.7
13.7
13.7
13.7
13.7
7.9
7.9
7.9
7.9
6.0
6.0
6.0
6.0
2.8
2.8
2.8
2.8
0.6
0.6
0.6
0.6
(1.3)
(1.3)
(1.3)
(1.3)
205.1
205.1
205.1
205.1
259.2
259.2
(2) Segment
(2) Segment
(2) Segment
(2) Segment
D&A adjusted
D&A adjusted
D&A adjusted
D&A adjusted
for
for
for
for
$m
$m
$m
$m
-
-
-
-
-
-
-
-
13.7
13.7
13.7
13.7
-
-
-
-
-
-
-
-
0.3
0.3
0.3
0.3
-
-
-
-
-
-
-
-
176.2
176.2
176.2
176.2
190.2
190.2
(3) Net
(3) Net
(3) Net
(3) Net
finance
finance
finance
finance
costs
costs
costs
costs
adjusted for
adjusted for
adjusted for
adjusted for
$m
$m
$m
$m
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
37.3
37.3
37.3
37.3
37.3
37.3
(4) Segment
(4) Segment
(4) Segment
(4) Segment
income tax
income tax
income tax
income tax
adjusted for
adjusted for
adjusted for
adjusted for
$m
$m
$m
$m
4.4
4.4
4.4
4.4
2.9
2.9
2.9
2.9
4.1
4.1
4.1
4.1
2.4
2.4
2.4
2.4
1.8
1.8
1.8
1.8
0.8
0.8
0.8
0.8
-
-
-
-
(0.3)
(0.3)
(0.3)
(0.3)
2.5
2.5
2.5
2.5
18.6
18.6
(5) Other items
(5) Other items
(5) Other items
(5) Other items
not included
not included
not included
not included
in total
in total
in total
in total
segment
segment
segment
segment
NPAT
NPAT
NPAT
NPAT
$m
$m
$m
$m
10.3
10.3
10.3
10.3
6.8
6.8
6.8
6.8
9.6
9.6
9.6
9.6
5.5
5.5
5.5
5.5
4.2
4.2
4.2
4.2
2.0
2.0
2.0
2.0
0.6
0.6
0.6
0.6
(1.0)
(1.0)
(1.0)
(1.0)
5.9
5.9
5.9
5.9
43.9
43.9
259.2
259.2
190.2
190.2
37.3
37.3
18.6
18.6
43.9
43.9
90 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
90 S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0 91
S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
91
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
4.
Segment information (continued)
(c)
Other information
Revenue is attributable to the country where the sale of goods has transacted. The consolidated entity’s divisions are operated in
two main geographical areas with the following areas of operation:
Australia (the home country of the parent entity)
Supercheap Auto (SCA): retailing of auto parts and accessories, tools and equipment;
rebel: retailing of sporting equipment and apparel;
BCF: retailing of boating, camping, outdoor equipment, fishing equipment and apparel; and
Macpac: retailing of apparel, camping and outdoor equipment.
New Zealand
Supercheap Auto (SCA): retailing of auto parts and accessories, tools and equipment; and
Macpac: retailing of apparel, camping and outdoor equipment.
(i)
Total revenue and other income from continuing operations
Australia
New Zealand
(ii)
Total non-current assets
Australia
New Zealand
Significant Accounting Policies
5.
Revenue and other income from continuing operations
Revenue from the sale of goods
Other income
Insurance claims
Reversal of contingent consideration
Sundry
Total revenues and other income
Significant Accounting Policies
2020
$m
2,825.2
-
-
0.2
2019
$m
2,710.4
0.7
1.1
1.0
2,825.4
2,713.2
2020
$m
2,644.7
180.7
2,825.4
1,765.0
196.3
1,961.3
2019
$m
2,528.9
184.3
2,713.2
1,023.3
145.7
1,169.0
Revenue from the sale of goods is recognised when a group entity sells a product to the customer.
Sale of goods – retail
Payment of the transaction price is due immediately when the customer purchases products and takes delivery in store. It is the
Group’s policy to sell its products to the end customer with a right of return. Therefore, a refund liability (included in trade and
other payables) and a right to the returned goods (included in other current assets) are recognised for the products expected to
be returned. Accumulated experience is used to estimate such returns at the time of sale at a portfolio level (expected value
method). Because the number of products returned has been steady for years, it is highly probable that a significant reversal in
the cumulative revenue recognised will not occur. The validity of this assumption and the estimated amount of returns are
reassessed at each reporting date.
The group’s obligation to repair or replace faulty products under standard warranty terms is recognised as a provision.
Interest income
Interest income is recognised using the effective interest method. When a receivable is impaired, the Group reduces the carrying
amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the
instrument. Interest income on impaired loans is recognised using the original effective interest rate.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Group Managing Director
and Chief Executive Officer, who is responsible for allocating resources and assessing performance of the operating segments.
Unallocated items comprise mainly corporate assets (primarily the Support Office, Support Office expenses, and income tax assets
and liabilities).
6.
Expenses from continuing operations
Profit before income tax includes the following specific gains and expenses:
Expenses/(gains)
Net (gain) / loss on disposal of property, plant and equipment
Share of net loss from associates and joint ventures accounted for using the equity
method
Depreciation
Right-of-use assets
Plant and equipment
Motor vehicles
Computer equipment
Total depreciation(1)
(1) The impact of applying AASB 16 Leases was an increase of $176.2 million in depreciation to 27 June 2020.
Amortisation and impairment
Computer software amortisation
Total amortisation and impairment
Net finance costs
Interest and finance charges
Net finance costs(2)
(2) The impact of applying AASB 16 Leases was an increase of $37.3 million in net finance costs to 27 June 2020.
2020
$m
(0.6)
0.6
180.2
41.9
0.1
13.9
236.1
46.1
46.1
55.1
55.1
2019
$m
0.2
2.6
-
41.1
0.1
15.1
56.3
30.3
30.3
21.3
21.3
92 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
92 S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0 93
S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
93
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
6.
Expenses from continuing operations (continued)
7.
Trade and other receivables
2020
$m
39.3
544.4
583.7
(1.6)
(4.9)
(6.5)
47.3
3.2
50.5
2019
$m
38.0
502.2
540.2
-
-
-
232.8
3.3
236.1
Profit before income tax includes the following specific gains and expenses:
Employee benefits expense
Superannuation
Salaries and wages(3)
Total employee benefits expense
(3) Excludes impact of government grant received disclosed below.
Government grant received
Australian JobKeeper for Macpac Retail Pty Ltd(4)
New Zealand wage subsidy for Super Cheap Auto (New Zealand) Pty Limited and
Macpac New Zealand Limited
Total government grant revenue
(4) The amounts above have been offset against expenses.
Rental expense relating to leases
Lease expenses
Equipment hire
Total rental expense relating to leases(5)
(5) The impact of applying AASB 16 Leases was a decrease of $204.5 million in rental expense to 27 June 2020.
Foreign exchange gains and losses
Net foreign exchange (gain)
Significant Accounting Policies
Depreciation, amortisation and impairment
Refer to Notes 9 and 10 for details on depreciation, amortisation and impairment.
Finance costs
Finance costs are recognised in the period in which these are incurred and are expensed in the period to which the costs relate.
Generally costs such as discounts and premiums incurred in raising borrowings are amortised on an effective yield basis over the
period of the borrowing. Finance costs include:
amortisation of discounts or premiums relating to borrowings;
amortisation of ancillary costs incurred in connection with the arrangement of borrowings;
interest on bank overdrafts and short-term and long-term borrowings;
finance lease charges; and
interest revenue.
Employee benefits
Refer to Note 15 for details on employee provisions and superannuation.
Leases
As explained in Note 2(g), the Group has changed its accounting policy for leases where the Group is the lessee. The new policy
is described in Note 11 and the impact of the change in Note 34.
Until 29 June 2019, Leases in which a significant portion of the risks and rewards of ownership were retained by the lessor were
classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) were
charged to the income statement on a straight-line basis over the period of the lease term.
Foreign exchange gains and losses
Refer to Note 2 (c) for details on foreign exchange gains and losses.
Government grants
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them with
the costs that they are intended to compensate.
Current
Trade receivables
Loss allowance
Net trade receivables
Other receivables
Prepayments
Net current trade and other receivables
(a)
Impaired trade receivables
2020
$m
10.9
(0.5)
10.4
7.7
8.2
26.3
2019
$m
16.0
(0.3)
15.7
14.2
7.7
37.6
As at 27 June 2020 current trade receivables of the Group with a nominal value of $0.5 million (2019: $0.3 million) were impaired and
provided for. The individually impaired receivables mainly relate to wholesalers with whom the Group no longer trades.
(b)
Past due but not impaired
As at 27 June 2020, trade receivables of $4.4 million (2019: $3.5 million) were past due but not impaired. These relate to a number of
independent customers for whom there is no recent history of default. The ageing analysis of these trade receivables is as follows:
(7.7)
(3.4)
30 to 60 days
60 to 90 days
90 days and over
2020
2019
$m
1.6
0.2
2.6
4.4
$m
0.8
0.3
2.4
3.5
Significant Accounting Policies
Trade receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. They
are generally due for settlement within 30 days and therefore are all classified as current. Trade receivables are recognised initially
at the amount of consideration that is unconditional unless they contain significant financing components, when they are
recognised at fair value. The Group holds the trade receivables with the objective to collect the contractual cash flows and
therefore measures them subsequently at amortised cost using the effective interest method. Details about the Group’s
impairment policies and the calculation of the loss allowance are provided in Note 16.
The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss
allowance for all trade receivables and contract assets.
To measure the expected credit losses, trade receivables and contract assets have been grouped based on shared credit risk
characteristics and the days past due. The contract assets relate to unbilled work in progress and have substantially the same risk
characteristics as the trade receivables for the same types of contracts. The Group has therefore concluded that the expected
loss rates for trade receivables are a reasonable approximation of the loss rates for the contract assets.
The expected loss rates are based on the payment profiles of sales over a period of 24 months and the corresponding historical
credit losses experienced within this period. The historical loss rates are adjusted to reflect current and forward-looking information
on macroeconomic factors affecting the ability of the customers to settle the receivables. The Group has identified the GDP and
the unemployment rate of the countries in which it sells its goods and services to be the most relevant factors, and accordingly
adjusts the historical loss rates based on expected changes in these factors.
On that basis, the loss allowance as at period end was determined for trade receivables to be minor.
94 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
94 S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0 95
S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
95
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
8.
Inventories
9.
Property, plant and equipment (continued)
Finished goods, at lower of cost or net realisable value
(a)
Inventory expense
2020
$m
502.4
2019
$m
560.2
Inventories recognised as expense during the period ended 27 June 2020 amounted to $1,475.0 million (2019: $1,408.3 million).
Write-downs of inventories to net realisable value recognised as an expense during the period ended 27 June 2020 amounted to $10.2
million (2019: $1.0 million).
Significant Accounting Policies
Inventories
Inventories are measured at the lower of cost and net realisable value. Costs comprise direct purchase costs and an appropriate
proportion of supply chain variable and fixed overhead expenditure in bringing them to their existing location and condition.
Costs are assigned to individual items of stock on the basis of weighted average costs.
Critical accounting estimates and assumptions
Net realisable value
Net realisable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the
estimated costs necessary to make the sale.
9.
Property, plant and equipment
Plant and equipment, at cost
Less accumulated depreciation
Net plant and equipment
Motor vehicles, at cost
Less accumulated depreciation
Net motor vehicles
Computer equipment, at cost
Less accumulated depreciation
Net computer equipment
2020
$m
421.0
(223.9)
197.1
0.5
(0.4)
0.1
100.6
(70.0)
30.6
2019
$m
435.2
(208.0)
227.2
0.6
(0.5)
0.1
106.8
(66.2)
40.6
Total net property, plant and equipment
227.8
267.9
(a)
Reconciliations
Reconciliations of the carrying amounts for each class of property, plant and equipment are set out below:
2020
Carrying amounts at 29 June 2019
Additions
Depreciation
Disposals
Change in accounting policy (Note 34)
Foreign currency exchange differences
Carrying amounts at 27 June 2020
Plant and
equipment
$m
Motor
vehicles
$m
Computer
equipment
$m
227.2
29.6
(41.9)
(0.6)
(17.4)
0.2
197.1
0.1
0.1
(0.1)
-
-
-
0.1
40.6
10.9
(13.9)
(0.3)
(6.7)
-
30.6
Total
$m
267.9
40.6
(55.9)
(0.9)
(24.1)
0.2
227.8
2019
Carrying amounts at 30 June 2018
Additions
Depreciation
Disposals
Foreign currency exchange differences
Carrying amounts at 29 June 2019
Leased assets
Plant and
equipment
$m
Motor
vehicles
$m
Computer
equipment
$m
226.9
41.0
(41.1)
-
0.4
227.2
0.2
-
(0.1)
-
-
0.1
43.3
12.4
(15.1)
(0.2)
0.2
40.6
Total
$m
270.4
53.4
(56.3)
(0.2)
0.6
267.9
As at 29 June 2019, the carrying value of computer equipment held under finance lease was $6.7 million. From 30 June 2019, leased
assets are presented as a separate line item in the balance sheet – refer Note 11 – Leases. Refer to Note 34 for details about the
change in accounting policy.
Make-good assets
As at 29 June 2019, the carrying value of make-good assets was $4.3 million. From 30 June 2019, make-good assets are presented as
part of the right-of-use asset under the new lease accounting standard AASB 16 Leases. Refer to Note 34 for details about the change
in accounting policy.
Fitout contributions
As at 30 June 2019, $13.1 million of fitout contributions have been presented as part of Property, Plant and Equipment on adoption of
the new lease accounting standard.
Significant Accounting Policies
Carrying value
Property, plant and equipment are stated at historical cost, less any accumulated depreciation or amortisation. Historical costs
include expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. All repairs and maintenance are charged to the income statement during the financial year in which they are incurred.
Depreciation and amortisation of property, plant and equipment
Depreciation and amortisation are calculated on a straight line basis for accounting and on a diminishing value basis for tax.
Depreciation and amortisation allocates the cost of an item of property, plant and equipment net of residual values over the
expected useful life of each asset to the consolidated entity. Estimates of remaining useful lives and residual values are reviewed
and adjusted, if appropriate, at each statement of financial position date.
The depreciation rates used for each class of assets are:
Plant and equipment
7.5% – 37.5%
Capitalised leased plant and equipment
10% – 37.5%
Motor vehicles
Computer equipment
25%
20% – 37.5%
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than
its estimated recoverable amount.
Gains and losses
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the income
statement. When revalued assets are sold, it is Group policy to transfer the amounts included in other reserves in respect of those
assets to retained earnings.
Make-good requirements in relation to leased premises
Make-good costs arising from contractual obligations in lease agreements are recognised as provisions at the inception of the
agreement. Until 29 June 2019, a corresponding asset was taken up in property, plant and equipment at that time. Expected
future payments are discounted using appropriate market yields at reporting date.
96 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
96 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
96 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
96 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
96 S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
For the period ended 27 June 2020
For the period ended 27 June 2020
For the period ended 27 June 2020
9.
9.
9.
9.
Property, plant and equipment (continued)
Property, plant and equipment (continued)
Property, plant and equipment (continued)
Property, plant and equipment (continued)
Significant Accounting Policies (continued)
Significant Accounting Policies (continued)
Significant Accounting Policies (continued)
Significant Accounting Policies (continued)
Leases
Leases
Until 29 June 2019, Leases of property, plant and equipment where the Group had substantially all the risks and rewards of
Until 29 June 2019, Leases of property, plant and equipment where the Group had substantially all the risks and rewards of
Leases
Leases
ownership, were classified as finance leases. Finance leases were capitalised at the lease’s inception at the lower of the fair
ownership, were classified as finance leases. Finance leases were capitalised at the lease’s inception at the lower of the fair
Until 29 June 2019, Leases of property, plant and equipment where the Group had substantially all the risks and rewards of
Until 29 June 2019, Leases of property, plant and equipment where the Group had substantially all the risks and rewards of
value of the leased property and the present value of the minimum lease payments. The corresponding rental obligations, net
value of the leased property and the present value of the minimum lease payments. The corresponding rental obligations, net
ownership, were classified as finance leases. Finance leases were capitalised at the lease’s inception at the lower of the fair
ownership, were classified as finance leases. Finance leases were capitalised at the lease’s inception at the lower of the fair
of finance charges, were included in other long term payables. Each lease payment was allocated between the liability and
of finance charges, were included in other long term payables. Each lease payment was allocated between the liability and
value of the leased property and the present value of the minimum lease payments. The corresponding rental obligations, net
value of the leased property and the present value of the minimum lease payments. The corresponding rental obligations, net
finance charges so as to achieve a constant rate on the finance balance outstanding. The interest element of the finance cost
finance charges so as to achieve a constant rate on the finance balance outstanding. The interest element of the finance cost
of finance charges, were included in other long term payables. Each lease payment was allocated between the liability and
of finance charges, were included in other long term payables. Each lease payment was allocated between the liability and
was charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the
was charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the
finance charges so as to achieve a constant rate on the finance balance outstanding. The interest element of the finance cost
finance charges so as to achieve a constant rate on the finance balance outstanding. The interest element of the finance cost
remaining balance of the liability for each period. The property, plant and equipment acquired under finance lease was
remaining balance of the liability for each period. The property, plant and equipment acquired under finance lease was
was charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the
was charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the
depreciated over the shorter of the asset’s useful life and the lease term.
depreciated over the shorter of the asset’s useful life and the lease term.
remaining balance of the liability for each period. The property, plant and equipment acquired under finance lease was
remaining balance of the liability for each period. The property, plant and equipment acquired under finance lease was
depreciated over the shorter of the asset’s useful life and the lease term.
depreciated over the shorter of the asset’s useful life and the lease term.
Critical accounting estimates and assumptions
Critical accounting estimates and assumptions
Critical accounting estimates and assumptions
Critical accounting estimates and assumptions
Impairment
Impairment
Assets that are subject to depreciation are reviewed for impairment whenever events or changes in circumstances indicate that
Assets that are subject to depreciation are reviewed for impairment whenever events or changes in circumstances indicate that
Impairment
Impairment
the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying
the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying
Assets that are subject to depreciation are reviewed for impairment whenever events or changes in circumstances indicate that
Assets that are subject to depreciation are reviewed for impairment whenever events or changes in circumstances indicate that
amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value-
amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value-
the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying
the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying
in-use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable
in-use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable
amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value-
amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value-
cash flows (cash-generating units).
cash flows (cash-generating units).
in-use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable
in-use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable
cash flows (cash-generating units).
cash flows (cash-generating units).
10.
10.
10.
10.
Intangible assets
Intangible assets
Intangible assets
Intangible assets
Goodwill, at cost
Goodwill, at cost
Goodwill, at cost
Goodwill, at cost
Less accumulated impairment charge
Less accumulated impairment charge
Less accumulated impairment charge
Less accumulated impairment charge
Net goodwill
Net goodwill
Net goodwill
Net goodwill
Computer software, at cost
Computer software, at cost
Computer software, at cost
Computer software, at cost
Less accumulated amortisation
Less accumulated amortisation
Less accumulated amortisation
Less accumulated amortisation
Net computer software
Net computer software
Net computer software
Net computer software
Brand names, at cost
Brand names, at cost
Brand names, at cost
Brand names, at cost
Less accumulated amortisation and impairment charge
Less accumulated amortisation and impairment charge
Less accumulated amortisation and impairment charge
Less accumulated amortisation and impairment charge
Net brand names
Net brand names
Net brand names
Net brand names
Reconciliations
Reconciliations
Reconciliations
Reconciliations
Total net intangible assets
Total net intangible assets
Total net intangible assets
Total net intangible assets
(a)
(a)
(a)
(a)
Reconciliations of the carrying amounts for each class of intangible asset are set out below:
Reconciliations of the carrying amounts for each class of intangible asset are set out below:
Reconciliations of the carrying amounts for each class of intangible asset are set out below:
Reconciliations of the carrying amounts for each class of intangible asset are set out below:
Computer
Computer
Software
Software
Computer
Computer
$m
$m
Software
Software
$m
$m
Goodwill
Goodwill
$m
$m
Goodwill
Goodwill
$m
$m
2020
2020
2020
2020
Carrying amounts at 29 June 2019
Carrying amounts at 29 June 2019
Carrying amounts at 29 June 2019
Carrying amounts at 29 June 2019
Additions
Additions
Additions
Additions
Amortisation charge(1)
Amortisation charge(1)
Amortisation charge(1)
Amortisation charge(1)
Change in accounting policy (Note 34)
Change in accounting policy (Note 34)
Change in accounting policy (Note 34)
Change in accounting policy (Note 34)
Carrying amounts at 27 June 2020
Carrying amounts at 27 June 2020
Carrying amounts at 27 June 2020
Carrying amounts at 27 June 2020
526.5
526.5
526.5
526.5
0.1
0.1
0.1
0.1
-
-
-
-
-
-
-
-
526.6
526.6
526.6
526.6
114.4
114.4
114.4
114.4
27.5
27.5
27.5
27.5
(46.1)
(46.1)
(46.1)
(46.1)
(1.4)
(1.4)
(1.4)
(1.4)
94.4
94.4
94.4
94.4
2020
2020
2020
2020
$m
$m
$m
$m
528.7
528.7
528.7
528.7
(2.1)
(2.1)
(2.1)
(2.1)
526.6
526.6
526.6
526.6
262.8
262.8
262.8
262.8
(168.4)
(168.4)
(168.4)
(168.4)
94.4
94.4
94.4
94.4
311.8
311.8
311.8
311.8
(58.5)
(58.5)
(58.5)
(58.5)
253.3
253.3
253.3
253.3
874.3
874.3
874.3
874.3
Brand
Brand
Name
Name
Brand
Brand
$m
$m
Name
Name
$m
$m
253.3
253.3
253.3
253.3
-
-
-
-
-
-
-
-
-
-
-
-
253.3
253.3
253.3
253.3
2019
2019
2019
2019
Carrying amounts at 30 June 2018
Carrying amounts at 30 June 2018
Carrying amounts at 30 June 2018
Carrying amounts at 30 June 2018
Additions
Additions
Additions
Additions
Adjustment to provisional accounting (Note 23(a))
Adjustment to provisional accounting (Note 23(a))
Adjustment to provisional accounting (Note 23(a))
Adjustment to provisional accounting (Note 23(a))
Amortisation charge
Amortisation charge
Amortisation charge
Amortisation charge
Carrying amounts at 29 June 2019
Carrying amounts at 29 June 2019
Carrying amounts at 29 June 2019
Carrying amounts at 29 June 2019
(1) Includes $13.7m of accelerated amortisation on software intangibles as a result of change in useful life assumptions.
(1) Includes $13.7m of accelerated amortisation on software intangibles as a result of change in useful life assumptions.
(1) Includes $13.7m of accelerated amortisation on software intangibles as a result of change in useful life assumptions.
(1) Includes $13.7m of accelerated amortisation on software intangibles as a result of change in useful life assumptions.
112.4
112.4
112.4
112.4
32.3
32.3
32.3
32.3
-
-
-
-
(30.3)
(30.3)
(30.3)
(30.3)
114.4
114.4
114.4
114.4
525.9
525.9
525.9
525.9
-
-
-
-
0.6
0.6
0.6
0.6
-
-
-
-
526.5
526.5
526.5
526.5
253.3
253.3
253.3
253.3
-
-
-
-
-
-
-
-
-
-
-
-
253.3
253.3
253.3
253.3
2019
2019
2019
2019
$m
$m
$m
$m
528.6
528.6
528.6
528.6
(2.1)
(2.1)
(2.1)
(2.1)
526.5
526.5
526.5
526.5
240.7
240.7
240.7
240.7
(126.3)
(126.3)
(126.3)
(126.3)
114.4
114.4
114.4
114.4
311.8
311.8
311.8
311.8
(58.5)
(58.5)
(58.5)
(58.5)
253.3
253.3
253.3
253.3
894.2
894.2
894.2
894.2
Total
Total
$m
$m
Total
Total
$m
$m
894.2
894.2
894.2
894.2
27.6
27.6
27.6
27.6
(46.1)
(46.1)
(46.1)
(46.1)
(1.4)
(1.4)
(1.4)
(1.4)
874.3
874.3
874.3
874.3
891.6
891.6
891.6
891.6
32.3
32.3
32.3
32.3
0.6
0.6
0.6
0.6
(30.3)
(30.3)
(30.3)
(30.3)
894.2
894.2
894.2
894.2
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
For the period ended 27 June 2020
S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0 97
S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0 97
S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
97
10.
10.
Intangible assets (continued)
Intangible assets (continued)
(a)
(a)
Reconciliations (continued)
Reconciliations (continued)
Leased assets
Leased assets
As at 29 June 2019, the carrying value of computer software held under finance lease was $1.4 million. From 30 June 2019, leased
As at 29 June 2019, the carrying value of computer software held under finance lease was $1.4 million. From 30 June 2019, leased
assets are presented as a separate line item in the balance sheet – refer Note 11 – Leases. Refer to Note 34 for details about the
assets are presented as a separate line item in the balance sheet – refer Note 11 – Leases. Refer to Note 34 for details about the
change in accounting policy.
change in accounting policy.
(b)
(b)
Impairment tests for goodwill
Impairment tests for goodwill
Goodwill is allocated to the Group’s cash-generating units (CGUs) identified according to the group of assets at the time of
Goodwill is allocated to the Group’s cash-generating units (CGUs) identified according to the group of assets at the time of
acquisition. A CGU level summary of the goodwill allocation is presented below:
acquisition. A CGU level summary of the goodwill allocation is presented below:
CGU
CGU
Supercheap Auto
Supercheap Auto
rebel
rebel
BCF
BCF
Macpac
Macpac
Total
Total
2020
2020
$m
$m
45.3
45.3
376.6
376.6
25.1
25.1
79.6
79.6
526.6
526.6
2019
2019
$m
$m
45.3
45.3
376.5
376.5
25.1
25.1
79.6
79.6
526.5
526.5
The Group tests for goodwill impairment on an annual basis. The recoverable amount of a CGU is determined based on value-in-use
The Group tests for goodwill impairment on an annual basis. The recoverable amount of a CGU is determined based on value-in-use
(VIU) calculations which require the use of assumptions. These calculations use cash flow projections based on business plans covering
(VIU) calculations which require the use of assumptions. These calculations use cash flow projections based on business plans covering
a five-year period. Several scenarios have been assessed in relation to the economic uncertainty which may occur and recovery
a five-year period. Several scenarios have been assessed in relation to the economic uncertainty which may occur and recovery
timeframes. The assumptions within the VIU calculations assume an economic downturn in the 2021 financial year (with limited
timeframes. The assumptions within the VIU calculations assume an economic downturn in the 2021 financial year (with limited
lockdown periods in Australia and New Zealand) and a return to normal trading conditions with previously experienced growth during
lockdown periods in Australia and New Zealand) and a return to normal trading conditions with previously experienced growth during
the 2022 financial year. Growth expectations beyond the 2022 financial year are expected to return to normal.
the 2022 financial year. Growth expectations beyond the 2022 financial year are expected to return to normal.
Cash flows beyond the five-year period are extrapolated using the estimated growth rates stated below. The terminal growth rate
Cash flows beyond the five-year period are extrapolated using the estimated growth rates stated below. The terminal growth rate
does not exceed the historical long-term average growth rate for the business in which the CGU operates.
does not exceed the historical long-term average growth rate for the business in which the CGU operates.
Key assumptions used for value-in-use calculations
Key assumptions used for value-in-use calculations
The key assumptions used in the VIU calculations across each business segment CGU include sales growth, EBITDA margin, long-term
The key assumptions used in the VIU calculations across each business segment CGU include sales growth, EBITDA margin, long-term
growth rate and the discount rate. A pre-tax discount rate of 11.7 per cent (2019: 12.4 per cent) and terminal growth rate of 2.5 per
growth rate and the discount rate. A pre-tax discount rate of 11.7 per cent (2019: 12.4 per cent) and terminal growth rate of 2.5 per
cent (2019: 3.0 per cent) have been assumed. Projected sales are based on the assumed economic recovery as described above.
cent (2019: 3.0 per cent) have been assumed. Projected sales are based on the assumed economic recovery as described above.
Budgeted EBITDA margin is determined based on past performance and expectations for the future.
Budgeted EBITDA margin is determined based on past performance and expectations for the future.
The VIU model assumes an economic downturn in the 2021 financial year (with limited lockdown periods in Australia and New Zealand)
The VIU model assumes an economic downturn in the 2021 financial year (with limited lockdown periods in Australia and New Zealand)
and a return to normal trading conditions with previously experienced growth occurring during the 2022 financial year. Growth
and a return to normal trading conditions with previously experienced growth occurring during the 2022 financial year. Growth
expectations beyond the 2022 financial year are expected to return to normal.
expectations beyond the 2022 financial year are expected to return to normal.
The Group believes that the assumptions used in the VIU model reflect a combination of the Group’s past experience and the trading
The Group believes that the assumptions used in the VIU model reflect a combination of the Group’s past experience and the trading
performance uncertainty associated with COVID-19. While temporary store closures may impact short term results, these are not
performance uncertainty associated with COVID-19. While temporary store closures may impact short term results, these are not
expected to impact the long-term performance of the Group’s businesses.
expected to impact the long-term performance of the Group’s businesses.
The recoverable amounts of each CGU are estimated to exceed their carrying amounts as at 27 June 2020. The Macpac CGU is the
The recoverable amounts of each CGU are estimated to exceed their carrying amounts as at 27 June 2020. The Macpac CGU is the
most sensitive to changes in assumptions. The recoverable amount of the Macpac CGU is estimated to exceed its carrying amount
most sensitive to changes in assumptions. The recoverable amount of the Macpac CGU is estimated to exceed its carrying amount
as at 27 June 2020 by $3.3 million (2019: $31.2 million). The recoverable amount of this CGU could equal or fall below its carrying
as at 27 June 2020 by $3.3 million (2019: $31.2 million). The recoverable amount of this CGU could equal or fall below its carrying
amount if key assumptions were to change.
amount if key assumptions were to change.
Management do not consider that a reasonably possible change in any of the key assumptions for any of the CGU’s, other than
Management do not consider that a reasonably possible change in any of the key assumptions for any of the CGU’s, other than
Macpac, would cause their carrying amounts to exceed their recoverable amounts.
Macpac, would cause their carrying amounts to exceed their recoverable amounts.
Macpac
Macpac
Macpac had a challenging financial performance in 2020 with a 44.6 per cent decline in Segment EBITDA. This was due to the impact
Macpac had a challenging financial performance in 2020 with a 44.6 per cent decline in Segment EBITDA. This was due to the impact
of summer bushfires on peak trading, a change in promotional strategy generating a delay in price increases and the impact of
of summer bushfires on peak trading, a change in promotional strategy generating a delay in price increases and the impact of
COVID-19. The New Zealand mandatory store closures drove a 17.5 per cent like-for-like sales decline in the last 14 weeks of the
COVID-19. The New Zealand mandatory store closures drove a 17.5 per cent like-for-like sales decline in the last 14 weeks of the
financial year.
financial year.
The key assumptions where the VIU calculations are most sensitive for the Macpac CGU are included below:
The key assumptions where the VIU calculations are most sensitive for the Macpac CGU are included below:
Sales (% compound annual growth rate)
Sales (% compound annual growth rate)
EBITDA margin increase (% points)
EBITDA margin increase (% points)
2020
2020
7.4
7.4
5.6
5.6
2019
2019
6.3
6.3
2.6
2.6
98 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
98 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
98 S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0 99
S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
99
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
For the period ended 27 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
10.
10.
Intangible assets (continued)
Intangible assets (continued)
(b)
(b)
Impairment tests for goodwill (continued)
Impairment tests for goodwill (continued)
Management have determined the values assigned to each of the above key assumptions as follows:
Management have determined the values assigned to each of the above key assumptions as follows:
Sales
Sales
Compound average annual growth rate over the five-year period projection period of 7.4 per cent, based on past performance and
Compound average annual growth rate over the five-year period projection period of 7.4 per cent, based on past performance and
management’s expectations of market development. In the 2020 financial year, sales declined by 5.0 per cent and like-for-like sales
management’s expectations of market development. In the 2020 financial year, sales declined by 5.0 per cent and like-for-like sales
declined 9.1 per cent. The VIU model assumes that the 2021 financial year will deliver the same revenue per store as achieved in
declined 9.1 per cent. The VIU model assumes that the 2021 financial year will deliver the same revenue per store as achieved in
2019. From 2022, revenue is projected to increase by average annual growth rates which are typical of those achieved in the past.
2019. From 2022, revenue is projected to increase by average annual growth rates which are typical of those achieved in the past.
The pilot of the sale of Macpac products in BCF was successful and its expansion will support future revenue growth. The VIU
The pilot of the sale of Macpac products in BCF was successful and its expansion will support future revenue growth. The VIU
compound growth rate of 7.4 per cent is impacted by the low base in 2020. If the compound growth rate declines to 7.0 per cent
compound growth rate of 7.4 per cent is impacted by the low base in 2020. If the compound growth rate declines to 7.0 per cent
this would cause the carrying amount of the Macpac CGU to exceed its recoverable amount.
this would cause the carrying amount of the Macpac CGU to exceed its recoverable amount.
EBITDA margin increase – percentage points
EBITDA margin increase – percentage points
In the 2020 financial year, EBITDA declined by 35.3 per cent with the EBITDA margin reducing from 11.2 per cent in 2019 to 7.7 per cent.
In the 2020 financial year, EBITDA declined by 35.3 per cent with the EBITDA margin reducing from 11.2 per cent in 2019 to 7.7 per cent.
The VIU model assumes that the 2021 financial year will deliver constrained EBITDA margins in line with 2020. From 2022, the EBITDA
The VIU model assumes that the 2021 financial year will deliver constrained EBITDA margins in line with 2020. From 2022, the EBITDA
margin will return to levels achieved in 2019. EBITDA margin will grow from 2023 to 2025 based on initiatives already in place to lower
margin will return to levels achieved in 2019. EBITDA margin will grow from 2023 to 2025 based on initiatives already in place to lower
the cost of sales and fractionalise fixed costs over growing revenue. The EBITDA margin expansion of 5.6 percentage points over five
the cost of sales and fractionalise fixed costs over growing revenue. The EBITDA margin expansion of 5.6 percentage points over five
years is impacted by the low base in 2020. If the EBITDA margin rate expansion only achieves 5.5 percentage points this would cause
years is impacted by the low base in 2020. If the EBITDA margin rate expansion only achieves 5.5 percentage points this would cause
the carrying amount of the Macpac CGU to exceed its recoverable amount.
the carrying amount of the Macpac CGU to exceed its recoverable amount.
Long-term growth rate
Long-term growth rate
This is the weighted average growth rate used to extrapolate cash flows beyond the five year period.
This is the weighted average growth rate used to extrapolate cash flows beyond the five year period.
10.
Intangible assets (continued)
Significant Accounting Policies
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets
of the acquired subsidiary or business at the date of the acquisition. Goodwill on acquisitions of subsidiaries is included in
intangible assets. Goodwill is not amortised. Instead, it is tested for impairment annually, or more frequently if events or changes
in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Any impairment
is recognised as an expense and is not subsequently reversed.
Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-
generating units or groups of cash-generating units that are expected to benefit from the business combination in which the
goodwill arose, identified according to operating segments.
Intangible assets with indefinite useful lives
Separately acquired trademarks and licences are shown at historical cost. Trademarks and licences acquired in a business
combination are recognised at fair value at the acquisition date. Trademarks are amortised over their useful lives.
Other intangible assets
Amortisation is calculated on a straight line basis. Estimates of remaining useful lives and residual values are reviewed and
adjusted, if appropriate, at each statement of financial position date. The amortisation rates used for each class of intangible
assets are as follows:
A terminal growth rate decrease from 2.5 per cent to 2.3 per cent would could cause the carrying amount of the Macpac CGU to
A terminal growth rate decrease from 2.5 per cent to 2.3 per cent would could cause the carrying amount of the Macpac CGU to
exceed its recoverable amount.
exceed its recoverable amount.
Computer software
Brand names
10% – 33.3%
Nil
Pre-tax discount rates
Pre-tax discount rates
A pre-tax discount rate increase from 11.7 per cent to 11.8 per cent would cause the carrying amount of the Macpac CGU to exceed
A pre-tax discount rate increase from 11.7 per cent to 11.8 per cent would cause the carrying amount of the Macpac CGU to exceed
its recoverable amount.
its recoverable amount.
Management have considered and assessed the reasonably possible changes for other key assumptions and have not identified any
Management have considered and assessed the reasonably possible changes for other key assumptions and have not identified any
instances that could cause the carrying amount of the Macpac CGU to exceed its recoverable amount.
instances that could cause the carrying amount of the Macpac CGU to exceed its recoverable amount.
(c)
(c)
Impairment tests for the useful life for brands
Impairment tests for the useful life for brands
No amortisation is provided against the carrying value of purchased brand names on the basis that they are considered to have
No amortisation is provided against the carrying value of purchased brand names on the basis that they are considered to have
indefinite useful lives.
indefinite useful lives.
Key factors taken into account in assessing the useful life of brands were:
Key factors taken into account in assessing the useful life of brands were:
the strong recognition of brands; and
the strong recognition of brands; and
there is an absence of legal, technical or commercial factors indicating that the life should be considered limited.
there is an absence of legal, technical or commercial factors indicating that the life should be considered limited.
The carrying values of the purchased brand names are:
The carrying values of the purchased brand names are:
Brand
Brand
rebel
rebel
Macpac
Macpac
Total
Total
2020
2020
$m
$m
209.0
209.0
44.3
44.3
253.3
253.3
2019
2019
$m
$m
209.0
209.0
44.3
44.3
253.3
253.3
Key assumptions used for value-in-use calculations
Key assumptions used for value-in-use calculations
Management have consistently applied two key assumptions in the VIU analysis across each business segment CGU, a pre-tax
Management have consistently applied two key assumptions in the VIU analysis across each business segment CGU, a pre-tax
discount rate of 11.7 per cent (2019: 12.4 per cent) and terminal growth rate of 2.5 per cent (2019: 3.0 per cent). Budgeted gross
discount rate of 11.7 per cent (2019: 12.4 per cent) and terminal growth rate of 2.5 per cent (2019: 3.0 per cent). Budgeted gross
margin is determined based on past performance and expectations for the future.
margin is determined based on past performance and expectations for the future.
The recoverable amount of the brand names currently exceeds their carrying values. Management do not consider that a reasonably
The recoverable amount of the brand names currently exceeds their carrying values. Management do not consider that a reasonably
possible change in any of the key assumptions would cause the carrying value of any of the brand names to exceed their recoverable
possible change in any of the key assumptions would cause the carrying value of any of the brand names to exceed their recoverable
amounts.
amounts.
Computer software
Costs incurred in developing products or systems and costs incurred in acquiring software and licences that will contribute to
future period financial benefits through revenue generation and/or cost reduction are capitalised to software and systems. Costs
capitalised include external direct costs of materials and service, employee costs and an appropriate portion of relevant
overheads. IT development costs include only those costs directly attributable to the development phase and are only
recognised following completion of technical feasibility and where the Group has an intention and ability to use the asset.
Brand names
Brand names that are acquired as part of a business combination are recognised separately from goodwill. These assets are
carried at their fair value at the date of acquisition less impairment losses. Brand names are valued using the relief from royalty
method. Brand names are determined to have indefinite useful lives and therefore do not attract amortisation.
Research and development
Research expenditure is recognised as an expense as incurred. Costs incurred on development projects (relating to the design
and testing of new or improved products) are recognised as intangible assets when it is probable that the project will, after
considering its commercial and technical feasibility, be completed and generate future economic benefits and its costs can be
measured reliably. The expenditure capitalised comprises all directly attributable costs, including costs of materials, services,
direct labour and an appropriate proportion of overheads. Other development expenditures that do not meet these criteria are
recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset
in a subsequent period. Capitalised development costs are recorded as intangible assets and amortised from the point at which
the asset is ready for use.
Other items of expenditure
Significant items of expenditure, such as costs incurred in store set-ups, are expensed in the financial year in which these costs are
incurred.
Critical accounting estimates and assumptions
Capitalised software costs and useful lives
The Group has undertaken significant development of software in relation to the multi-channel customer programme and mutli-
channel supply chain and inventory programme. The useful lives have been determined based on the intended period of use
of this software.
Estimated impairment of indefinite useful life non-financial assets
The Group tests annually whether indefinite useful life non-financial assets have suffered any impairment, in accordance with the
accounting policy stated above. The recoverable amounts of cash-generating units have been determined based on
value-in-use calculations. These calculations require the use of assumptions. Refer above for details of these assumptions.
100 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
100 S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0 101
S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
101
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
11.
Leases
Right-of-use assets
Properties
Computer equipment
Total right-of-use assets
Lease liabilities
Current
Non-current
2020
$m
842.0
6.0
848.0
178.4
760.9
30 June
2019(1)
$m
835.3
8.1
843.4
184.3
745.8
Total lease liabilities
(1) In the previous year, the Group only recognised lease assets and lease liabilities in relation to leases that were classified as ‘finance leases’ under
AASB 117 Leases. The assets were presented in property, plant and equipment and the liabilities as part of the Group’s borrowings. For
adjustments recognised on adoption of AASB 16 Leases on 30 June 2019, refer to Note 34 – Changes in accounting policy.
939.3
930.1
Additions to the right-of-use assets during the year were $194.0 million.
Depreciation charge on right-of-use assets
Properties
Computer equipment
Total depreciation charge on right-of-use assets
Interest expenses (included in Net finance costs)
Expense relating to short-term leases (included in Occupancy expenses)
Expense relating to leases of low-value assets (included in Cost of Goods Sold and
Administrative expenses)
Expense relating to variable lease payments not included in lease liabilities (included in
Occupancy expenses)
The total cash outflow for leases during the year were $209.1 million.
Impact of COVID-19
2020
$m
177.3
2.9
180.2
37.3
20.0
3.2
28.4
2019
$m
-
-
-
-
-
-
-
The Group has adopted the practical expedient in paragraph 46A of AASB 16 Leases and elected not to account for any rent
concessions granted as a result of the COVID-19 pandemic as a lease modification. The amount recognised in profit or loss due to
changes in lease payments arising from such concessions was $2.4 million.
Significant Accounting Policies
Leases
The Group leases various offices, warehouses, retail stores, equipment and cars. Rental contracts are typically made for fixed
periods of 1 to 20 years but may have extension options as described below. Lease terms are negotiated on an individual basis
and contain a wide range of different terms and conditions. The lease agreements do not impose any covenants, but leased
assets may not be used as security for borrowing purposes.
Until 29 June 2019, leases of property, plant and equipment were classified as either finance or operating leases. Payments made
under operating leases (net of any incentives received from the lessor) were charged to profit or loss on a straight-line basis over
the period of the lease.
From 30 June 2019, leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased
asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost
is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance
of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term
on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present
value of the following lease payments:
fixed payments (including in-substance fixed payments), less any lease incentives receivable
variable lease payments that are based on an index or a rate
amounts expected to be payable by the lessee under residual value guarantees
the exercise price of a purchase option if the lessee is reasonably certain to exercise that option, and
payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
11.
Leases (continued)
Significant Accounting Policies (continued)
Leases (continued)
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the lessee’s
incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an
asset of similar value in a similar economic environment with similar terms and conditions.
Right-of-use assets are measured at cost comprising the following:
the amount of the initial measurement of lease liability
any lease payments made at or before the commencement date less any lease incentives received
any initial direct costs, and
restoration costs.
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense
in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise small items of office
equipment and furniture, and other immaterial assets.
Extension and termination options are included in a number of property leases across the Group. These terms are used to
maximise operational flexibility in terms of managing contracts. The majority of extension and termination options held are
exercisable only by the Group and not by the respective lessor.
Critical accounting estimates and assumptions
Variable lease payments
Some property leases contain variable payment terms that are linked to sales generated from a store. For individual stores, up
to 100% of lease payments are on the basis of variable payment terms and there is a wide range of sales percentages applied.
Variable payment terms are used for a variety of reasons, including minimising the fixed costs base for newly established stores.
Variable lease payments that depend on sales are recognised in profit or loss in the period in which the condition that triggers
those payments occurs.
Extension and termination options
In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise
an extension option, or not exercise a termination option. Extension options (or periods after termination options) are included in
the lease term only if the lease is reasonably certain to be extended (or not terminated).
Given the uncertainties that exist within the retail market, management considers leases with more than 2 years to expiry as not
reasonably certain to be extended. Of the Group’s lease portfolio 65% of leases contain option renewals. The lease liability
currently includes extension options in the calculation of lease term for 14% of leases with those options.
The assessment is reviewed if a significant event or a significant change in circumstances occurs which affects this assessment
and that is within the control of the lessee.
12.
Trade and other payables
Current
Trade payables
Other payables
Straight line lease adjustment(1)
Total current trade and other payables
Non-current
Straight line lease adjustment(1)
Total non-current trade and other payables
(1) The impact of applying AASB 16 Leases was to adjust straight line lease balances to nil as at 30 June 2019.
2020
$m
335.2
107.1
-
442.3
-
-
2019
$m
274.8
82.5
5.4
362.7
49.5
49.5
Significant Accounting Policies
Trade and other payables
Trade and other payables are payables for goods and services provided to the consolidated entity prior to the end of the financial
year and which are unpaid at that date. The amounts are unsecured and are normally paid within 60 days of recognition. Trade
and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date.
102 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
102 S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0 103
S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
103
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
13.
Borrowings
Current
Finance leases - secured by leased asset
Total current borrowings
Non-current
Finance leases - secured by leased asset
Bank debt funding facility - unsecured(1)
Total non-current borrowings
(1)Net of borrowing costs capitalised of $2.2 million (2019: $3.0 million).
(a)
Finance leases
2020
$m
-
-
-
247.8
247.8
2019
$m
3.4
3.4
3.8
387.0
390.8
As at 29 June 2019, the Group leased various plant and equipment with a carrying amount of $8.1 million under finance leases expiring
within five years. Finance lease liabilities were included in borrowings until 29 June 2019, but were reclassified to lease liabilities on 30
June 2019 in the process of adopting the new leasing standard – refer Note 34 – Changes in accounting policy.
Commitments in relation to finance leases are payable as follows:
Within one year
Later than one year but not later than five years
Minimum lease payments
Future finance charges
Total lease liabilities
(b)
Reconciliation of liabilities arising from financing activities
2020
$m
-
-
-
-
-
2019
$m
3.6
3.9
7.5
(0.3)
7.2
29 June 2019
$m
Cash flows
$m
387.0
387.0
(140.2)
(140.2)
30 June 2018
$m
Cash flows
$m
9.5
428.6
438.1
(3.3)
(42.4)
(45.7)
Non-cash
Amortisation
$m
1.0
1.0
Non-cash
Amortisation
and additions
$m
1.0
0.8
1.8
27 June 2020
$m
247.8
247.8
29 June 2019
$m
7.2
387.0
394.2
Bank debt funding facility(1)
Total
Finance leases
Bank debt funding facility(1)
Total
(1)Net of borrowing costs paid
Significant Accounting Policies
Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at
amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the
income statement over the period of the borrowings using the effective interest method.
14.
Income taxes
(a)
Income tax expense
Current tax expense
Deferred tax (benefit) / expense
Adjustments to tax expense of prior periods
Deferred income tax expense/ (revenue) included in income tax expense comprises:
(Increase) / decrease in deferred tax assets (Note 14(e))
(Decrease) / Increase in deferred tax liabilities (Note 14(e))
(b)
Numerical reconciliation between tax expense and pre-tax profit
Profit before income tax from continuing operations
Tax at the Australian tax rate of 30% (2019: 30%)
Tax effect of amounts not deductible / (taxable) in calculating taxable income:
Sundry items
Difference in overseas tax rates
Derecognition of tax losses and deferred tax assets
Previously unrecognised tax losses and deferred tax assets
Adjustments to tax expense of prior periods
Income tax expense
Effective tax rate:
Australia
Consolidated group
(c)
Numerical reconciliation of income tax expense to income tax payable
Income tax (expense)
Tax effect of timing differences:
Depreciation
Provisions
Accruals and prepayments
Leased assets
Lease liabilities
Tax losses
Sundry temporary differences
Current tax payable
Income tax instalments paid during the year
Income tax (payable) / receivable
(d)
Amounts recognised directly in equity
Aggregate current and deferred tax arising in the reporting period and not recognised
in net profit or loss but directly debited or credited to equity:
Net deferred tax (credited) directly to equity (Note 14(e))
Tax expense relating to items of other comprehensive income
Lease accounting on adoption of AASB 16 Leases
Provisions – change in accounting policy AASB 16 Leases
Cash flow hedges
2020
$m
60.9
(14.2)
(1.1)
45.6
(13.7)
(0.5)
(14.2)
155.8
46.7
0.2
46.9
(0.3)
0.3
(0.2)
(1.1)
45.6
29.4%
29.3%
2019
$m
45.1
6.0
(0.8)
50.3
5.9
0.1
6.0
189.5
56.9
2.9
59.8
(2.6)
1.0
(7.1)
(0.8)
50.3
30.8%
26.5%
(45.6)
(50.3)
(9.2)
(1.3)
(3.7)
0.3
(2.9)
0.7
2.2
(59.5)
42.4
(17.1)
(14.1)
(14.1)
(25.9)
11.4
0.4
(14.1)
(2.1)
11.9
(0.7)
-
-
(4.4)
0.8
(44.8)
46.7
1.9
(2.7)
(2.7)
-
-
(2.7)
(2.7)
104 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
104 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
104 S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0 105
S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
For the period ended 27 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
14.
14.
Income taxes (continued)
Income taxes (continued)
(e)
(e)
Deferred tax assets and liabilities
Deferred tax assets and liabilities
Assets
Assets
Provisions
Provisions
Accruals and prepayments
Accruals and prepayments
Depreciation
Depreciation
Lease liabilities
Lease liabilities
Cash flow hedges
Cash flow hedges
Tax losses
Tax losses
Sundry temporary differences
Sundry temporary differences
Set off with deferred tax liabilities
Set off with deferred tax liabilities
Net deferred tax assets
Net deferred tax assets
Liabilities
Liabilities
Brand values
Brand values
Depreciation
Depreciation
Leased assets
Leased assets
Sundry temporary differences
Sundry temporary differences
Set-off of deferred tax assets
Set-off of deferred tax assets
Net deferred tax liabilities
Net deferred tax liabilities
Net deferred tax assets / (liabilities)
Net deferred tax assets / (liabilities)
Movements in deferred tax assets:
Movements in deferred tax assets:
Opening balance
Opening balance
Credited / (charged) to the income statement
Credited / (charged) to the income statement
Credited to equity
Credited to equity
Closing balance
Closing balance
Deferred tax assets to be recovered after more than 12 months
Deferred tax assets to be recovered after more than 12 months
Deferred tax assets to be recovered within 12 months
Deferred tax assets to be recovered within 12 months
Movements in deferred tax liabilities:
Movements in deferred tax liabilities:
Opening balance
Opening balance
(Credited) / charged to the income statement
(Credited) / charged to the income statement
Charged / (credited) to equity
Charged / (credited) to equity
Closing balance
Closing balance
Deferred tax liabilities to be settled after more than 12 months
Deferred tax liabilities to be settled after more than 12 months
Deferred tax liabilities to be settled within 12 months
Deferred tax liabilities to be settled within 12 months
(f)
(f)
Unrecognised deferred tax assets
Unrecognised deferred tax assets
2020
2020
$m
$m
26.5
26.5
13.0
13.0
21.2
21.2
278.1
278.1
0.6
0.6
3.1
3.1
1.6
1.6
344.1
344.1
(339.2)
(339.2)
4.9
4.9
75.3
75.3
14.0
14.0
248.7
248.7
1.2
1.2
339.2
339.2
(339.2)
(339.2)
-
-
4.9
4.9
67.1
67.1
13.7
13.7
263.3
263.3
344.1
344.1
32.8
32.8
311.3
311.3
344.1
344.1
90.5
90.5
(0.5)
(0.5)
249.2
249.2
339.2
339.2
339.2
339.2
-
-
339.2
339.2
2019
2019
$m
$m
40.1
40.1
5.4
5.4
15.0
15.0
-
-
1.1
1.1
4.4
4.4
1.1
1.1
67.1
67.1
(67.1)
(67.1)
-
-
75.3
75.3
15.2
15.2
-
-
-
-
90.5
90.5
(67.1)
(67.1)
23.4
23.4
(23.4)
(23.4)
71.9
71.9
(5.9)
(5.9)
1.1
1.1
67.1
67.1
40.7
40.7
26.4
26.4
67.1
67.1
92.0
92.0
0.1
0.1
(1.6)
(1.6)
90.5
90.5
90.5
90.5
-
-
90.5
90.5
14.
(g)
Income taxes (continued)
Tax transparency report
In May 2016, the government announced the release of the Board of Taxation’s final report on the voluntary Tax Transparency Code.
The aim of the Code is to provide a mechanism by which medium and large companies can be held accountable for their Australian
tax affairs, and to give stakeholders confidence that companies are compliant with their statutory obligations.
Currently the Code is voluntary. Super Retail Group supports the concept of voluntary tax transparency as an important measure for
all large companies to provide assurance to the Australian community that their tax obligations are being met. We know that Super
Retail Group’s success is dependent on the wellbeing of the economies and communities where our businesses operate and our
conservative approach to tax strategy is one of the many ways we act to ensure sustainability of our operations. We are pleased to
disclose our taxes paid in Australia and to detail our approach to tax planning for the first time.
The requirements of the Code are broken into Part A which forms part of the tax note as referenced below and Part B as disclosed
below. The make-up of the respective parts is as follows:
(i)
(ii)
Part A:
Effective company tax rates for our Australian and global operations (Note 14 (b))
A reconciliation of accounting profit to tax expense and to income tax payable (Note 14 (c))
Identification of material temporary (Note 14 (c)) and non-temporary differences (Note 14 (b))
Part B:
Tax policy, tax strategy and governance
Information about international related party dealings
A tax contribution summary of income tax paid
Part B discloses the Australian income tax paid by the Group in the 2020 and 2019 financial years and provides qualitative information
about our approach to tax risk and international related party dealings.
Tax policy, tax strategy and governance
Super Retail Group is committed to full compliance with its statutory obligations and takes a conservative approach to tax risk. The
Group’s Tax Policy includes an internal escalation process for referring tax matters to the corporate Group Tax function. The CFO must
report any material tax issues to the Board. Tax strategy is implemented through Super Retail Group’s Tax Governance Policy. The
Group’s approach to tax planning is to operate and pay tax in accordance with the tax law in each relevant jurisdiction. The Group
aims for certainty on all tax positions it adopts. Where the tax law is unclear or subject to interpretation, advice is obtained, and when
necessary the Australian Taxation Office (ATO) (or other relevant tax authority) is consulted for clarity.
International related party dealings
Super Retail Group is an Australian based group, with some trading operations in other countries, including New Zealand (Supercheap
Auto (SCA) and Macpac) and China (Sourcing assistance). Given its current profile, the Group has very limited international related
party dealings. Super Retail Group always seeks to price international related party dealings on an arm’s length basis to meet the
regulatory requirements of the relevant jurisdictions.
The Group’s international related party dealings are summarised below:
The Group’s Australian retail businesses source material amounts of trading stock from overseas, particularly through Asian based
third-party suppliers. To facilitate this, the Group has a Chinese based subsidiary that co-ordinates these supplies. Super Retail
Group’s Australian businesses pay the overseas subsidiaries for these services.
The Group SCA and Macpac retail businesses operate across Australia and New Zealand. To meet customer demand and
manage stock levels, trading stock is occasionally transferred between jurisdictions, for which arm’s length consideration is paid
by the recipient of the trading stock.
Certain Group businesses operating outside of Australia are utilising intellectual property developed by Super Retail Group
businesses in Australia. Where appropriate, and as required by international cross border tax rules, a royalty payment is made
by the off-shore subsidiary to the relevant Group business in Australia.
Various administrative and support services are provided by Group head office and divisional parent entities to offshore
subsidiary businesses. As required by international cross border tax rules, arm’s length consideration is paid for these services.
Tax losses
Tax losses
7.5
7.5
7.3
7.3
Deferred tax assets have not been recognised in respect of these tax losses because it is not considered probable that future
Deferred tax assets have not been recognised in respect of these tax losses because it is not considered probable that future
taxable profit will be available against which they can be realised.
taxable profit will be available against which they can be realised.
106 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
106 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
106 S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0 107
S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0 107
S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
107
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
For the period ended 27 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
For the period ended 27 June 2020
14.
14.
(g)
(g)
Income taxes (continued)
Income taxes (continued)
Tax transparency report (continued)
Tax transparency report (continued)
Other jurisdictions
Other jurisdictions
The Group includes subsidiary companies that are incorporated in jurisdictions outside Australia as summarised in the table below:
The Group includes subsidiary companies that are incorporated in jurisdictions outside Australia as summarised in the table below:
Country
Country
China(1)
China(1)
New Zealand
New Zealand
Nature of activities
Nature of activities
Co-ordinating the sourcing of trading stock for SCA, rebel and BCF
Co-ordinating the sourcing of trading stock for SCA, rebel and BCF
Active trading operations (SCA and Macpac) and dormant entities
Active trading operations (SCA and Macpac) and dormant entities
(1) These companies are subject to the Australian Controlled Foreign Company rules. Under these rules profits generated by these subsidiaries from trading
(1) These companies are subject to the Australian Controlled Foreign Company rules. Under these rules profits generated by these subsidiaries from trading
with Super Retail Group are taxable in Australia at the 30 per cent Australian corporate tax rate. For the 2020 year, the gross value of international related
with Super Retail Group are taxable in Australia at the 30 per cent Australian corporate tax rate. For the 2020 year, the gross value of international related
party transactions in and out of Australia represented less than 2.0 per cent of revenue.
party transactions in and out of Australia represented less than 2.0 per cent of revenue.
Australian income taxes paid
Australian income taxes paid
Super Retail Group is a large taxpayer and paid corporate income tax of $42.3 million in 2020 and $46.7 million in 2019.
Super Retail Group is a large taxpayer and paid corporate income tax of $42.3 million in 2020 and $46.7 million in 2019.
Significant Accounting Policies
Significant Accounting Policies
Current and deferred tax
Current and deferred tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the national
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the national
income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences
income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences
between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.
between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities
Deferred tax assets and liabilities
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are
recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The
recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The
relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the
relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the
deferred tax asset or liability.
deferred tax asset or liability.
An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred
An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred
tax asset or liability is recognised in relation to these temporary differences if they arise in a transaction, other than a business
tax asset or liability is recognised in relation to these temporary differences if they arise in a transaction, other than a business
combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.
combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future
taxable amounts will be available to utilise those temporary differences and losses.
taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of
investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences
investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences
and it is probable that the differences will not reverse in the foreseeable future.
and it is probable that the differences will not reverse in the foreseeable future.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and
when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the
when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the
entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability
entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability
simultaneously.
simultaneously.
15.
15.
Provisions
Provisions
Current
Current
Employee benefits(a)
Employee benefits(a)
Onerous contracts(b)
Onerous contracts(b)
Make-good provision(c)
Make-good provision(c)
Other provisions(d)
Other provisions(d)
Total current provisions
Total current provisions
Non-current
Non-current
Employee benefits(a)
Employee benefits(a)
Onerous contracts(b)
Onerous contracts(b)
Make-good provision(c)
Make-good provision(c)
Total non-current provisions
Total non-current provisions
(a)
(a)
Employee benefits
Employee benefits
2020
2020
$m
$m
103.3
103.3
2.6
2.6
3.0
3.0
2.2
2.2
111.1
111.1
9.6
9.6
-
-
14.7
14.7
24.3
24.3
2019
2019
$m
$m
97.8
97.8
2.5
2.5
5.8
5.8
1.2
1.2
107.3
107.3
9.5
9.5
1.1
1.1
9.1
9.1
19.7
19.7
Provisions for employee benefits includes accrued annual leave, long service leave and accrued bonuses. It also includes $6.7 million
Provisions for employee benefits includes accrued annual leave, long service leave and accrued bonuses. It also includes $6.7 million
provided as redundancy costs relating to a support office restructure announced to team members just prior to the end of the financial
provided as redundancy costs relating to a support office restructure announced to team members just prior to the end of the financial
year. In addition the Group has identified that certain salaried team members should have received additional amounts to the
year. In addition the Group has identified that certain salaried team members should have received additional amounts to the
amounts paid. A remediation program continues. At 27 June 2020 there is a provision to recognise payments for additional overtime
amounts paid. A remediation program continues. At 27 June 2020 there is a provision to recognise payments for additional overtime
and allowances to current and former team members of an estimated $32.4 million (2019: $44.3 million).
and allowances to current and former team members of an estimated $32.4 million (2019: $44.3 million).
(b)
(b)
Onerous contracts
Onerous contracts
Onerous contracts includes the provision for loss making contracts which represents the present value of the forecast loss. The Group
Onerous contracts includes the provision for loss making contracts which represents the present value of the forecast loss. The Group
performs a review of key contracts relating to Infinite Retail that are loss making. As at 27 June 2020 $0.8 million is provided for loss
performs a review of key contracts relating to Infinite Retail that are loss making. As at 27 June 2020 $0.8 million is provided for loss
making contracts related to Infinite Retail (2019: $0.8 million).
making contracts related to Infinite Retail (2019: $0.8 million).
Onerous contracts also includes the provision for certain obligations related to some lease arrangements. As at 27 June 2020 $1.8m is
Onerous contracts also includes the provision for certain obligations related to some lease arrangements. As at 27 June 2020 $1.8m is
provided for these obligations (2019: $2.8 million).
provided for these obligations (2019: $2.8 million).
(c)
(c)
Make-good provision
Make-good provision
Provision is made for costs arising from contractual obligations in lease agreements at the inception of the agreement. A provision
Provision is made for costs arising from contractual obligations in lease agreements at the inception of the agreement. A provision
has been recognised for the present value of the estimated expenditure required to remove any leasehold improvements. These
has been recognised for the present value of the estimated expenditure required to remove any leasehold improvements. These
costs have been capitalised as part of the cost of the leasehold improvements and are amortised over the shorter of the term of the
costs have been capitalised as part of the cost of the leasehold improvements and are amortised over the shorter of the term of the
lease or the useful life of the assets.
lease or the useful life of the assets.
(d)
(d)
Other provisions
Other provisions
The current provision for other items includes the provision for store refunds.
The current provision for other items includes the provision for store refunds.
A deferred tax liability is recognised in relation to some of the Group’s indefinite life intangibles. The tax base assumed in
A deferred tax liability is recognised in relation to some of the Group’s indefinite life intangibles. The tax base assumed in
determining the amount of the deferred tax liability is the capital cost base of the assets.
determining the amount of the deferred tax liability is the capital cost base of the assets.
(e)
(e)
Movement in provisions
Movement in provisions
Tax consolidation
Tax consolidation
Super Retail Group Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation
Super Retail Group Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation
as of 1 July 2003 and account for current and deferred tax amounts under the Separate taxpayer within Group approach in
as of 1 July 2003 and account for current and deferred tax amounts under the Separate taxpayer within Group approach in
accordance with AASB Interpretation 1052, Tax Consolidation Accounting.
accordance with AASB Interpretation 1052, Tax Consolidation Accounting.
On adoption of the tax consolidation legislation, the entities in the tax consolidated group entered into a tax sharing agreement
On adoption of the tax consolidation legislation, the entities in the tax consolidated group entered into a tax sharing agreement
which, in the opinion of the directors, limits the joint and several liability of the wholly-owned entities in the case of a default by the
which, in the opinion of the directors, limits the joint and several liability of the wholly-owned entities in the case of a default by the
head entity, Super Retail Group Limited.
head entity, Super Retail Group Limited.
The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate Super Retail
The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate Super Retail
Group Limited for any current tax payable assumed and are compensated by Super Retail Group Limited for any current tax
Group Limited for any current tax payable assumed and are compensated by Super Retail Group Limited for any current tax
receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to Super Retail Group
receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to Super Retail Group
Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in
Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in
the wholly-owned entities’ financial statements.
the wholly-owned entities’ financial statements.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head
entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of
entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of
interim funding amounts to assist with its obligations to pay tax instalments.
interim funding amounts to assist with its obligations to pay tax instalments.
Movements in each class of provision during the period, except for other, are set out below:
Movements in each class of provision during the period, except for other, are set out below:
2020
2020
Opening balance as at 29 June 2019
Opening balance as at 29 June 2019
Provisions made
Provisions made
Indexing of provisions
Indexing of provisions
Provisions transferred to Right of use assets
Provisions transferred to Right of use assets
Provisions used
Provisions used
Closing balance as at 27 June 2020
Closing balance as at 27 June 2020
Employee benefits
Employee benefits
$m
$m
107.3
107.3
81.6
81.6
-
-
-
-
(76.0)
(76.0)
112.9
112.9
Onerous contracts
Onerous contracts
$m
$m
Make-good
Make-good
$m
$m
3.6
3.6
1.8
1.8
-
-
(1.6)
(1.6)
(1.2)
(1.2)
2.6
2.6
14.9
14.9
2.9
2.9
3.6
3.6
-
-
(3.7)
(3.7)
17.7
17.7
Total
Total
$m
$m
125.8
125.8
86.3
86.3
3.6
3.6
(1.6)
(1.6)
(80.9)
(80.9)
133.2
133.2
108 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
108 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
108 S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0 109
S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
109
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
For the period ended 27 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
15.
15.
Provisions (continued)
Provisions (continued)
Significant Accounting Policies
Significant Accounting Policies
Provisions
Provisions
Provisions for legal claims, service warranties and make-good obligations are recognised when the Group has a present legal or
Provisions for legal claims, service warranties and make-good obligations are recognised when the Group has a present legal or
constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation
constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation
and the amount has been reliably estimated. Provisions are not recognised for future operating losses.
and the amount has been reliably estimated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any
considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any
one item included in the same class of obligations may be small.
one item included in the same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present
obligation at the statement of financial position date. The discount rate used to determine the present value reflects current
obligation at the statement of financial position date. The discount rate used to determine the present value reflects current
market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the
market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the
passage of time is recognised as interest expense.
passage of time is recognised as interest expense.
Employee benefits - short-term obligations
Employee benefits - short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after
the end of the period in which the employees render the related service are recognised in respect of employees’ services up to
the end of the period in which the employees render the related service are recognised in respect of employees’ services up to
the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. All other
the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. All other
short-term employee benefit obligations are presented as payables.
short-term employee benefit obligations are presented as payables.
Employee benefits – long term obligations
Employee benefits – long term obligations
The liabilities for long service leave and annual leave are not expected to be settled wholly within 12 months after the end of the
The liabilities for long service leave and annual leave are not expected to be settled wholly within 12 months after the end of the
period in which the employees render the related service. They are therefore recognised in the provision for employee benefits
period in which the employees render the related service. They are therefore recognised in the provision for employee benefits
and measured as the present value of expected future payments to be made in respect of services provided by employees up
and measured as the present value of expected future payments to be made in respect of services provided by employees up
to the end of the reporting period using the projected unit credit method. Consideration is given to expected future wage and
to the end of the reporting period using the projected unit credit method. Consideration is given to expected future wage and
salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market
salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market
yields at the end of the reporting period of government bonds with terms and currencies that match, as closely as possible, the
yields at the end of the reporting period of government bonds with terms and currencies that match, as closely as possible, the
estimated future cash outflows. Remeasurements as a result of experience adjustments and changes in actuarial assumptions
estimated future cash outflows. Remeasurements as a result of experience adjustments and changes in actuarial assumptions
are recognised in profit or loss.
are recognised in profit or loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer
settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
Retirement benefit obligations
Retirement benefit obligations
Contributions are made by the economic entity to an employee superannuation fund and are charged as expenses when
Contributions are made by the economic entity to an employee superannuation fund and are charged as expenses when
incurred.
incurred.
Profit-sharing and bonus plans
Profit-sharing and bonus plans
The Group recognises a liability and an expense for bonuses and profit-sharing based on a formula that takes into consideration
The Group recognises a liability and an expense for bonuses and profit-sharing based on a formula that takes into consideration
the profit attributable to the Company’s shareholders after certain adjustments. The Group recognises a provision where
the profit attributable to the Company’s shareholders after certain adjustments. The Group recognises a provision where
contractually obliged or where there is a past practice that has created a constructive obligation.
contractually obliged or where there is a past practice that has created a constructive obligation.
Make-good requirements in relation to leased premises
Make-good requirements in relation to leased premises
Make-good costs arising from contractual obligations in lease agreements are recognised as provisions at the inception of the
Make-good costs arising from contractual obligations in lease agreements are recognised as provisions at the inception of the
agreement. A corresponding asset is taken up in property, plant and equipment at that time. Expected future payments are
agreement. A corresponding asset is taken up in property, plant and equipment at that time. Expected future payments are
discounted using appropriate market yields at reporting date.
discounted using appropriate market yields at reporting date.
16.
(a)
Financial assets and financial liabilities
Financial instruments
The Group holds the following financial instruments:
2020
Financial assets
Cash and cash equivalents
Trade and other receivables
Derivative financial instruments
Total
Financial liabilities
Trade and other payables
Borrowings
Lease liabilities
Derivative financial instruments
Total
2019
Financial assets
Cash and cash equivalents
Trade and other receivables
Derivative financial instruments
Total
Financial liabilities
Trade and other payables
Borrowings
Derivative financial instruments
Total
Derivatives used for
hedging
$m
Notes
Financial assets and
liabilities at
amortised cost
$m
7
21
12
13
11
21
-
-
-
-
-
-
-
1.9
1.9
285.1
26.3
-
311.4
442.3
247.8
939.3
-
1,629.4
Derivatives used for
hedging
$m
Notes
Financial assets and
liabilities at
amortised cost
$m
7
21
12
13
21
-
-
2.8
2.8
-
-
6.2
6.2
7.5
37.6
-
45.1
412.2
394.2
-
806.4
Total
$m
285.1
26.3
-
311.4
442.3
247.8
939.3
1.9
1,631.3
Total
$m
7.5
37.6
2.8
47.9
412.2
394.2
6.2
812.6
The Group’s exposure to various risks associated with the financial instruments is discussed in Note 21 – Financial risk management. The
maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of financial assets mentioned
above.
Critical accounting estimates and assumptions
Critical accounting estimates and assumptions
(b)
Recognised fair value measurements
Estimated value of make-good provision
Estimated value of make-good provision
The Group has estimated the present value of the expenditure required to remove any leasehold improvements and return
The Group has estimated the present value of the expenditure required to remove any leasehold improvements and return
leasehold premises to their original state, in addition to the likelihood of this occurring. These costs have been capitalised as part
leasehold premises to their original state, in addition to the likelihood of this occurring. These costs have been capitalised as part
of the cost of the leasehold improvements.
of the cost of the leasehold improvements.
Long service leave
Long service leave
Judgement is required in determining the following key assumptions used in the calculation of long service leave at balance
Judgement is required in determining the following key assumptions used in the calculation of long service leave at balance
date.
date.
Future increase in salaries and wages;
Future increase in salaries and wages;
Future on-cost rates; and
Future on-cost rates; and
Experience of employee departures and period of service.
Experience of employee departures and period of service.
Onerous contracts
Onerous contracts
For loss-making revenue contracts, the Group estimates a range of potential financial outcomes for each contract based on
For loss-making revenue contracts, the Group estimates a range of potential financial outcomes for each contract based on
forecast scenarios. It then records a liability for the present value of the resulting forecasted loss of each contract.
forecast scenarios. It then records a liability for the present value of the resulting forecasted loss of each contract.
Employee benefits
Employee benefits
Judgements have been made in the calculations as to the number of overtime hours, allowance payments and the valuation
Judgements have been made in the calculations as to the number of overtime hours, allowance payments and the valuation
based on assumed work patterns.
based on assumed work patterns.
Fair value hierarchy
(i)
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are recognised
and measured at fair value in the financial statements. To provide an indication about the reliability of the inputs used in determining
fair value, the Group has classified its financial instruments into the three levels prescribed under the accounting standards. An
explanation of each level follows underneath the table.
The fair value of forward exchange contracts is determined using forward exchange market rates at the balance sheet date.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to
their short-term nature. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual
cash flows at the current market interest rate that is available to the Group for similar financial instruments.
110 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
110 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
110 S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0 111
S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
111
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
For the period ended 27 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
16.
16.
Financial assets and financial liabilities (continued)
Financial assets and financial liabilities (continued)
(b)
(b)
(i)
(i)
Recognised fair value measurements (continued)
Recognised fair value measurements (continued)
Fair value hierarchy (continued)
Fair value hierarchy (continued)
The following tables present the Group’s entity’s assets and liabilities measured and recognised at fair value.
The following tables present the Group’s entity’s assets and liabilities measured and recognised at fair value.
2020
2020
Financial assets
Financial assets
Derivatives used for hedging
Derivatives used for hedging
Total
Total
Financial liabilities
Financial liabilities
Derivatives used for hedging
Derivatives used for hedging
Total
Total
2019
2019
Financial assets
Financial assets
Derivatives used for hedging
Derivatives used for hedging
Total
Total
Financial liabilities
Financial liabilities
Derivatives used for hedging
Derivatives used for hedging
Total
Total
Level 1
Level 1
$m
$m
Level 2
Level 2
$m
$m
Level 3
Level 3
$m
$m
-
-
-
-
-
-
-
-
-
-
-
-
1.9
1.9
1.9
1.9
-
-
-
-
-
-
-
-
Level 1
Level 1
$m
$m
Level 2
Level 2
$m
$m
Level 3
Level 3
$m
$m
-
-
-
-
-
-
-
-
2.8
2.8
2.8
2.8
6.2
6.2
6.2
6.2
-
-
-
-
-
-
-
-
Total
Total
$m
$m
-
-
-
-
1.9
1.9
1.9
1.9
Total
Total
$m
$m
2.8
2.8
2.8
2.8
6.2
6.2
6.2
6.2
There were no transfers between any levels for recurring fair value measurements during the year. The Group’s policy is to recognise
There were no transfers between any levels for recurring fair value measurements during the year. The Group’s policy is to recognise
transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.
transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and
available-for-sale securities) is based on quoted market prices at the end of the reporting period. The quoted market price used
available-for-sale securities) is based on quoted market prices at the end of the reporting period. The quoted market price used
for financial assets held by the Group is the current bid price. These instruments are included in level 1.
for financial assets held by the Group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives)
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives)
is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-
is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-
specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is
the case for unlisted equity securities.
the case for unlisted equity securities.
Valuation techniques used to determine fair value
Valuation techniques used to determine fair value
(ii)
(ii)
Specific valuation techniques used to value financial instruments include:
Specific valuation techniques used to value financial instruments include:
the use of quoted market prices or dealer quotes for similar instruments;
the use of quoted market prices or dealer quotes for similar instruments;
the fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable
the fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable
yield curves;
yield curves;
the fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date;
the fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date;
the fair value of the remaining financial instruments is determined using discounted cash flow analysis.
the fair value of the remaining financial instruments is determined using discounted cash flow analysis.
All of the resulting fair value estimates are included in level 2, where the fair values have been determined based on present values
All of the resulting fair value estimates are included in level 2, where the fair values have been determined based on present values
and the discount rates used were adjusted for counterparty or own credit risk.
and the discount rates used were adjusted for counterparty or own credit risk.
16.
Financial assets and financial liabilities (continued)
Significant Accounting Policies
Financial assets classification
The Group classifies its financial assets in the following measurement categories:
those to be measured subsequently at fair value (either through Other Comprehensive Income (OCI) or through profit or
loss), and
those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash
flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments
that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial
recognition to account for the equity investment at fair value through other comprehensive income (FVOCI).
The Group reclassifies debt investments when and only when its business model for managing those assets changes.
Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the Group commits to
purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have
expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.
Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value
through profit or loss (FVPL), transaction costs that are directly attributable to the acquisition of the financial asset. Transaction
costs of financial assets carried at FVPL are expensed in profit or loss.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely
payment of principal and interest.
Debt instruments
Subsequent measurement of debt instruments depends on the Group’s business model for managing the asset and the cash flow
characteristics of the asset. There are three measurement categories into which the Group classifies its debt instruments:
Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of
principal and interest are measured at amortised cost. Interest income from these financial assets is included in finance income
using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and
presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as separate
line item in the statement of profit or loss.
FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets’ cash flows
represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through
OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses which are
recognised in profit or loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is
reclassified from equity to profit or loss and recognised in other gains/(losses). Interest income from these financial assets is included
in finance income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/(losses)
and impairment expenses are presented as separate line item in the statement of profit or loss.
FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt investment
that is subsequently measured at FVPL is recognised in profit or loss and presented net within other gains/(losses) in the period in
which it arises.
Equity instruments
The Group subsequently measures all equity investments at fair value. Where the Group’s management have elected to present
fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to
profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognised in profit or
loss as other income when the Group’s right to receive payments is established.
Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) in the statement of profit or loss as
applicable. Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported
separately from other changes in fair value.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
16.
Financial assets and financial liabilities (continued)
17.
Earnings per share (continued)
Significant Accounting Policies (continued)
Impairment
The Group assesses on a forward looking basis the expected credit losses associated with its debt instruments carried at amortised
cost and FVOCI. The impairment methodology applied depends on whether there has been a significant increase in credit risk.
For trade receivables, the Group applies the simplified approach permitted by AASB 9, which requires expected lifetime losses to
be recognised from initial recognition of the receivables.
Derivative financial instruments and hedging activities
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured
to their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a
hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as either: hedges
of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge); or hedges of highly probable forecast
transactions (cash flow hedges).
The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items as
well as its risk management objective and strategy for undertaking various hedge transactions. The Group also documents its
assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions
have been and will continue to be highly effective in offsetting changes in cash flows of hedged items.
Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised
in equity in the hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately in the income
statement.
Amounts accumulated in equity are recycled in the income statement in the income periods when the hedged item will affect
profit or loss (for instance when the forecast payment that is hedged takes place). However, when the forecast transaction that
is hedged results in the recognition of a non-financial asset (for example, inventory) or a non-financial liability, the gains and losses
previously deferred in equity are transferred from equity and included in the measurement of the initial cost or carrying amount
of the asset or liability.
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting,
any cumulative gain or loss existing in equity at the time remains in equity and is recognised when the forecast transaction is
ultimately recognised in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain
or loss that was reported in equity is immediately transferred to the income statement.
Net investment hedges
Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges.
Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in equity. The gain or loss
relating to the ineffective portion is recognised immediately in the income statement within other income or other expenses.
Derivatives that do not qualify for hedge accounting
Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that
does not qualify for hedge accounting are recognised immediately in the income statement.
17.
Earnings per share
Basic earnings per share
(a)
Total basic earnings per share attributable to the ordinary equity holders of the
company
Diluted earnings per share
(b)
Total diluted earnings per share attributable to the ordinary equity holders of the
company
2020
Cents
55.8
2019
Cents
70.6
55.3
69.9
(d)
Weighted average number of shares used as the denominator
2020
Number
2019
Number
Weighted average number of shares used as the denominator in calculating basic EPS
197,610,979
197,342,404
Adjustments for calculation of diluted earnings per share – performance rights
1,663,059
1,816,842
Weighted average potential ordinary shares used as the denominator in
calculating diluted earnings per share
199,274,038
199,159,246
Reconciliations of earnings used in calculating earnings per share
(e)
Basic earnings and diluted earnings per share
2020
$m
2019
$m
Profit attributable to the ordinary equity holders of the company used in EPS
calculating basic earnings per share:
(f)
Options and Performance Rights
Options and performance rights granted are considered to be potential ordinary shares and have been included in the determination
of diluted earnings per share to the extent to which they are dilutive.
Information concerning the classification of securities
110.2
139.3
Significant Accounting Policies
Basic earnings per share
Basic earnings per share is calculated by dividing:
the profit attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares;
by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in
ordinary shares issued during the year and excluding treasury shares.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after
income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average
number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
18.
Contributed equity
(a)
Share capital
2020
$m
698.1
2019
$m
542.3
$m
542.3
-
159.3
(3.5)
698.1
(i)
Movement in ordinary share capital
Balance 29 June 2019
Shares issued under performance rights
Shares issued from equity raise – Institutional Entitlement
Less: Transaction costs arising on share issue
Balance 27 June 2020
Number of Shares
Issue Price
197,383,751
160,968
22,152,988
-
219,697,707
-
$7.19
-
On 15 June 2020, the Group announced an underwritten 1 for 7 accelerated pro rata non-renounceable entitlement offer to raise
equity of approximately $202.9 million at a fixed price of $7.19 per share. The equity raising comprised an institutional entitlement offer
which settled on 24 June 2020 and a retail entitlement offer which settled on 9 July 2020, subsequent to the end of the financial year.
The issue of shares represent fully paid ordinary shares in Super Retail Group Limited.
Ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
The ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the parent entity in proportion to
the number of and amounts paid on the shares held.
Gains and losses accumulated in equity are included in the income statement when the foreign operation is partially disposed of
or sold.
Ordinary shares fully paid (219,697,707 ordinary shares as at 27 June 2020)
Normalised earnings per share(1)
(c)
From continuing operations attributable to the ordinary equity holders of the company
(1) Normalised profit attributable to ordinary equity holders is $154.1 million (2019: $152.5 million) – Note 4(b).
78.0
77.3
On a show of hands every holder of ordinary shares present, in person or by proxy, at a meeting of shareholders of the parent entity is
entitled to one vote and, upon a poll, each share is entitled to one vote.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
18.
Contributed equity (continued)
(a)
Share capital (continued)
19.
Reserves and retained earnings (continued)
(a)
Reserves (continued)
Performance rights over 727,470 (2019: 622,684) ordinary shares were issued during the period with 160,968 (2019: 143,731) performance
rights vesting during the period. Under the share option plan, no ordinary shares were issued during the period (2019: nil). Information
relating to performance rights and options outstanding at the end of the financial year are set out in Note 29 – Share-based payments.
Dividend reinvestment plan
The Company has established a dividend reinvestment plan under which holders of ordinary shares may elect to have all or part of
their dividend entitlements satisfied by shares purchased on market rather than by being paid in cash.
Significant Accounting Policies
Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in
equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options,
or for the acquisition of a business, are included in the cost of the acquisition as part of the purchase consideration.
Nature and purpose of reserves
(ii)
Hedging reserve - cash flow hedges
The hedging reserve is used to record gains or losses on a hedging instrument in a cash flow hedge that are recognised directly in
equity, as described in Note 16 – Financial assets and financial liabilities. Amounts are recognised in profit and loss when the associated
hedged transaction affects profit and loss.
Share-based payments reserve
The share-based payments reserve is used to recognise the grant date fair value of options and performance rights issued.
Foreign currency translation reserve
Exchange differences arising on translation of the foreign controlled entity are taken to the foreign currency translation reserve, as
described in Note 2(c). The reserve is recognised in profit and loss when the net investment is disposed of.
NCI equity reserve
The NCI equity reserve is used to recognise the change in ownership interest in controlled entities.
19.
Reserves and retained earnings
(b)
Retained earnings
Reserves
(a)
Foreign currency translation reserve
Share based payments reserve
Hedging reserve
NCI equity reserve
Total
Movements
(i)
Foreign currency translation reserve
Balance at the beginning of the financial period
Net exchange difference on translation of foreign controlled entities
Balance at the end of the financial period
Share-based payments reserve
Balance at the beginning of the financial period
Options and performance rights expense
Balance at the end of the financial period
Hedging reserve
Balance at the beginning of the financial period
Revaluation – gross
Deferred tax
Balance at the end of the financial period
NCI equity reserve
Balance at the beginning of the financial period
Change in ownership interest in controlled entities
Balance at the end of the financial period
2020
$m
3.7
13.1
(1.3)
(8.0)
7.5
5.2
(1.5)
3.7
12.9
0.2
13.1
(2.3)
1.4
(0.4)
(1.3)
(7.6)
(0.4)
(8.0)
2019
$m
5.2
12.9
(2.3)
(7.6)
8.2
2.5
2.7
5.2
11.6
1.3
12.9
4.0
(9.0)
2.7
(2.3)
(7.8)
0.2
(7.6)
Balance at the beginning of the financial period
Change in accounting policy – AASB 16 Leases
Restated balance at the beginning of the financial period
Net profit for the period attributable to owners of Super Retail Group Limited
Dividends paid
Retained profits at the end of the financial period
2020
$m
265.9
(34.2)
231.7
110.2
(56.2)
285.7
2019
$m
223.3
-
223.3
139.3
(96.7)
265.9
20.
Reconciliation of profit from ordinary activities after income tax to net cash inflow from operating
activities
Profit from ordinary activities after related income tax
Depreciation and amortisation
Net (gain) / loss on sale of non-current assets
Non-cash employee benefits expense/share based payments
Loss on divestment
Equity accounting loss
Profit for the period attributable to non-controlling interests
Net finance costs
Change in operating assets and liabilities, net of effects from the
purchase of controlled entities
- decrease / (increase) in receivables
- decrease / (increase) in net current tax liability
- decrease / (increase) in inventories
- increase in payables
- increase / (decrease) in provisions
- (decrease) / increase in deferred taxes
Net cash inflow from operating activities
Significant Accounting Policies
2020
$m
110.2
282.2
(0.6)
0.2
-
0.6
-
55.1
10.6
19.0
57.8
84.1
5.9
(14.4)
610.7
2019
$m
139.3
86.6
0.2
1.3
1.1
2.6
(0.1)
21.3
(13.8)
(11.5)
(14.7)
25.3
(4.1)
7.4
240.9
Cash and cash equivalents
For the purposes of the cash flow statement, cash includes cash on hand, cash at bank and at call deposits with banks or financial
institutions, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
For the period ended 27 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
21.
21.
Financial risk management
Financial risk management
21.
Financial risk management (continued)
This note explains the Group’s exposure to financial risks and how these risks could affect the Group’s future financial performance.
This note explains the Group’s exposure to financial risks and how these risks could affect the Group’s future financial performance.
Current year profit and loss information has been included where relevant to add further context.
Current year profit and loss information has been included where relevant to add further context.
(b) Market risk (continued)
Market risk
Market risk
Foreign exchange
Foreign exchange
Interest rate
Interest rate
Credit risk
Credit risk
Liquidity risk
Liquidity risk
Exposure
Exposure
arising from
arising from
Future commercial
Future commercial
transactions
transactions
Recognised financial
Recognised financial
assets and liabilities not
assets and liabilities not
denominated in AUD
denominated in AUD
Long-term borrowings at
Long-term borrowings at
variable rates
variable rates
Cash and cash
Cash and cash
equivalents, trade and
equivalents, trade and
other receivables and
other receivables and
derivative financial
derivative financial
instruments
instruments
Measurement
Measurement
Cash flow forecasting
Cash flow forecasting
Sensitivity analysis
Sensitivity analysis
Sensitivity analysis
Sensitivity analysis
Aging analysis
Aging analysis
Credit ratings
Credit ratings
Management
Management
Forward foreign
Forward foreign
exchange contracts
exchange contracts
and options
and options
Interest rate swaps
Interest rate swaps
Rolling cash flow
Rolling cash flow
forecasts
forecasts
Borrowings and other
Borrowings and other
liabilities
liabilities
Credit limits and
Credit limits and
retention of title over
retention of title over
goods sold
goods sold
Availability of
Availability of
committed
committed
credit lines and
credit lines and
borrowing facilities
borrowing facilities
The Group’s risk management is carried out by the finance department under policies approved by the Board. The finance
The Group’s risk management is carried out by the finance department under policies approved by the Board. The finance
department identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units. The Board provides
department identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units. The Board provides
a formal policy for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk,
a formal policy for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk,
credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
(a)
(a)
Derivative Financial Instruments
Derivative Financial Instruments
Derivative Financial Instruments are used only for economic hedging purposes and not as trading or speculative instruments. The
Derivative Financial Instruments are used only for economic hedging purposes and not as trading or speculative instruments. The
Group has the following derivative financial instruments:
Group has the following derivative financial instruments:
Current assets
Current assets
Forward foreign exchange contracts – cash flow hedges
Forward foreign exchange contracts – cash flow hedges
Total current derivative financial instrument assets
Total current derivative financial instrument assets
Current liabilities
Current liabilities
Forward foreign exchange contracts – cash flow hedges
Forward foreign exchange contracts – cash flow hedges
Interest rate swap contracts – cash flow hedges
Interest rate swap contracts – cash flow hedges
Total current derivative financial instrument liabilities
Total current derivative financial instrument liabilities
2020
2020
$m
$m
-
-
-
-
1.9
1.9
-
-
1.9
1.9
2019
2019
$m
$m
2.8
2.8
2.8
2.8
-
-
6.2
6.2
6.2
6.2
Classification of derivatives
Classification of derivatives
(i)
(i)
Derivatives are classified as held for trading and accounted for at fair value through profit or loss unless they are designated as hedges.
Derivatives are classified as held for trading and accounted for at fair value through profit or loss unless they are designated as hedges.
They are presented as current assets or liabilities if they are expected to be settled within 12 months after the end of the reporting
They are presented as current assets or liabilities if they are expected to be settled within 12 months after the end of the reporting
period.
period.
The Group’s accounting policy for its cash flow hedges is set out in Note 16 – Financial assets and financial liabilities. For hedged
The Group’s accounting policy for its cash flow hedges is set out in Note 16 – Financial assets and financial liabilities. For hedged
forecast transactions that result in the recognition of a non-financial asset, the Group has elected to include related hedging gains
forecast transactions that result in the recognition of a non-financial asset, the Group has elected to include related hedging gains
and losses in the initial measurement of the cost of the asset.
and losses in the initial measurement of the cost of the asset.
Fair value measurement
Fair value measurement
(ii)
(ii)
For information about the methods and assumptions used in determining the fair value of derivatives please refer to Note 16 – Financial
For information about the methods and assumptions used in determining the fair value of derivatives please refer to Note 16 – Financial
assets and financial liabilities.
assets and financial liabilities.
(b) Market risk
(b) Market risk
Foreign exchange risk
Foreign exchange risk
(i)
(i)
Group companies are required to hedge their foreign exchange risk exposure using forward contracts transacted by the finance
Group companies are required to hedge their foreign exchange risk exposure using forward contracts transacted by the finance
department.
department.
Foreign exchange risk (continued)
(i)
The Group operates internationally and is exposed to foreign exchange risk arising from currency exposures to the United States dollar
(USD) and Chinese Yuan (CNY).
Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency
that is not the entity’s functional currency.
The Group’s risk management policy is to hedge between 50 per cent and 75 per cent of anticipated foreign currency purchases for
the subsequent 4 months and up to 50 per cent of anticipated foreign currency purchases for the following 5 to 12 month period.
Instruments used by the Group
The economic entity retails products including some that have been imported from Asia, with contract pricing denominated in USD.
In order to protect against exchange rate movements, the economic entity has entered into forward exchange rate contracts to
purchase USD. The contracts are timed to mature in line with forecast payments for imports and cover forecast purchases for the
subsequent twelve months, on a rolling basis. The Group does not currently enter into forward exchange rate contracts to purchase
CNY.
Exposure
The Group’s exposure to foreign currency risk at the end of the reporting period was as follows:
Trade receivables
Trade payables
Forward exchange contract - foreign currency (cash flow hedges)
Buy United States dollars and sell Australian/New Zealand dollars with maturity
- 0 to 4 months
- 5 to 12 months
Trade receivables
Trade payables
2020
USD
$m
3.5
30.2
55.3
30.7
86.0
2020
CNY
$m
0.2
23.8
2019
USD
$m
1.8
27.8
46.0
48.0
94.0
2019
CNY
$m
0.2
29.7
The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognised directly in equity.
When the cash flows occur, the Group adjusts the initial measurement of the component recognised in the consolidated balance
sheet by the related amount deferred in equity. In the year ended 27 June 2020, no hedges were designated as ineffective (2019:
nil).
Gains and losses arising from hedging contracts terminated prior to maturity are also carried forward until the designated hedged
transaction occurs.
The following gains, losses and costs have been deferred as at the balance date:
- unrealised (losses) / gains on USD foreign exchange contracts
- unrealised (losses) on interest rate swaps
Total unrealised (losses)
2020
$m
(1.9)
-
(1.9)
2019
$m
2.8
(6.2)
(3.4)
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
21.
Financial risk management (continued)
(b) Market risk (continued)
(i) Foreign exchange risk (continued)
Group sensitivity
Based on the financial instruments held at 27 June 2020, had the Australian dollar weakened/strengthened by 10 per cent against
other currencies with all other variables held constant, the impact on the Group’s post-tax profit would have been nil, on the basis
that the financial instruments would have been designated as cash flow hedges and the impact upon the foreign exchange
movements of other financial assets and liabilities is negligible.
Equity would have been $8.1 million lower/$9.9 million higher (2019: $8.3 million lower/$10.2 million higher) had the Australian dollar
weakened/strengthened by 10 per cent against other currencies, arising mainly from forward foreign exchange contracts designated
as cash flow hedges. The impact on other Group assets and liabilities as a result of movements in exchange rates is not material.
A sensitivity of 10 per cent was selected following review of historic trends.
(ii) Cashflow and fair value interest rate risk
Instruments used by the Group - interest rate swap contracts
An assessment of the forecast core debt requirements subsequent to the equity raising announced on 15 June 2020 indicated that
core debt was minimal. In accordance with the treasury policy, all interest rate swaps were terminated prior to the end of the financial
year. Therefore future interest expense will be subject to variable rates.
At the prior period end, the Group was a party to multiple interest rate swaps for a total nominal value of $215.0 million. These swaps
on the prior debt balance covered approximately 55.1 per cent of the loan principal outstanding. The average fixed interest rate
was 2.36 per cent.
Interest rate risk exposures
The economic entity’s exposure to interest rate risk and the effective weighted average interest rate by maturity periods is set out in
the following table:
Fixed interest maturing in
Floating
interest rate
$m
1 year or
less
$m
Over 1 to 5
years
$m
More than
5 years
$m
Notes
Non-
interest
bearing
$m
2020
Financial assets
Cash and cash equivalents
Trade and other receivables
7
Total financial assets
Weighted average rate of
interest
Financial liabilities
Lease liabilities
Trade and other payables
Borrowings
Provisions (employee benefits)
Total financial liabilities
Weighted average rate of
interest
11
12
13
15
283.5
-
283.5
0.25%
-
-
247.8
-
-
-
-
-
-
-
-
-
-
177.8
556.7
204.8
-
-
-
-
-
-
-
-
-
247.8
177.8
556.7
204.8
2.15%
1.6
26.3
27.9
-
442.3
-
112.9
555.2
Total
$m
285.1
26.3
311.4
939.3
442.3
247.8
112.9
1,742.3
Net financial (liabilities) / assets
35.7
(177.8)
(556.7)
(204.8)
(527.3)
(1,430.9)
21.
Financial risk management (continued)
(b) Market risk (continued)
(ii) Cashflow and fair value interest rate risk (continued)
Fixed interest maturing in
Notes
Floating
interest rate
$m
1 year or
less
$m
Over 1 to
5 years
$m
More than
5 years
$m
Non-
interest
bearing
Restated
$m
Total
Restated
$m
2019
Financial assets
Cash and cash equivalents
Trade and other receivables
7
Total financial assets
Weighted average rate of
interest
Financial liabilities
Trade and other payables
Borrowings
Provisions (employee benefits)
Total financial liabilities
Weighted average rate of
interest
12
13
15
5.8
-
5.8
1.00%
-
387.0
-
387.0
3.18%
-
-
-
-
3.4
-
3.4
-
-
-
-
3.8
-
3.8
-
-
-
-
-
-
-
1.7
37.6
39.3
412.2
-
107.3
519.5
7.5
37.6
45.1
412.2
394.2
107.3
913.7
Net financial (liabilities) / assets
(381.2)
(3.4)
(3.8)
-
(480.2)
(868.6)
Group sensitivity
The Group’s main interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow
interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. During the 2020 and 2019 financial
years, the Group’s borrowings were at variable rates and were denominated in Australian dollars.
As at the reporting date, the Group had the following variable rate borrowings and interest rate swap contracts outstanding:
Bank overdrafts and bank loans
Interest rate swaps
An analysis by maturities is provided in (d) below.
2020
$m
250.0
-
2019
$m
390.0
215.0
The Group risk management policy is to maintain fixed interest rate hedges of approximately 40 per cent of anticipated core debt
levels over a 3 year period. The Group utilises interest rate swaps to hedge its interest rate exposure on borrowings but as disclosed
above all interest rate swaps were terminated prior to the end of the financial year as core debt was significantly reduced.
As at 27 June 2020, if interest rates had changed by +/- 100 basis points from the year-end rates with all other variables held constant,
post-tax profit and equity for the year would have been $1.7 million lower/higher (2019: $1.2 million lower/higher), mainly as a result of
higher/lower interest expense on bank loans.
(c) Credit risk
Credit risk arises from cash and cash equivalents, favourable derivative financial instruments and deposits with banks and financial
institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables and committed
transactions.
(i) Risk management
Credit risk is managed on a Group basis. For banks and financial institutions, only independently rated parties with a minimum rating
of ‘A’ are accepted.
If wholesale customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk control
assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk
limits are set based on internal or external ratings in accordance with limits set by the Board. The compliance with credit limits by
wholesale customers is regularly monitored by management.
120 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
120 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
120 S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0 121
S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
121
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
For the period ended 27 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
21.
21.
Financial risk management (continued)
Financial risk management (continued)
(c)
(c)
Credit risk (continued)
Credit risk (continued)
(i) Risk management (continued)
(i) Risk management (continued)
Sales to retail customers are required to be settled in cash, using major credit cards or buy-now-pay-later solutions, mitigating credit
Sales to retail customers are required to be settled in cash, using major credit cards or buy-now-pay-later solutions, mitigating credit
risk. There are no significant concentrations of credit risk, whether through exposure to individual customers, specific industry sectors
risk. There are no significant concentrations of credit risk, whether through exposure to individual customers, specific industry sectors
and/or regions.
and/or regions.
(ii) Security
(ii) Security
For wholesale customers without credit rating, the Group generally retains title over the goods sold until full payment is received, thus
For wholesale customers without credit rating, the Group generally retains title over the goods sold until full payment is received, thus
limiting the loss from a possible default to the profit margin made on the sale. For some trade receivables the Group may also obtain
limiting the loss from a possible default to the profit margin made on the sale. For some trade receivables the Group may also obtain
security in the form of guarantees, deeds of undertaking or letters of credit which can be called upon if the counterparty is in default
security in the form of guarantees, deeds of undertaking or letters of credit which can be called upon if the counterparty is in default
under the terms of the agreement.
under the terms of the agreement.
(d) Liquidity risk
(d) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of
Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of
committed credit facilities to meet obligations when due. As a result of the dynamic nature of the underlying businesses, the finance
committed credit facilities to meet obligations when due. As a result of the dynamic nature of the underlying businesses, the finance
department maintains flexibility in funding by maintaining availability under committed credit lines.
department maintains flexibility in funding by maintaining availability under committed credit lines.
Management monitors rolling forecasts of the Group’s liquidity reserve (comprising the undrawn borrowing facilities below) and cash
Management monitors rolling forecasts of the Group’s liquidity reserve (comprising the undrawn borrowing facilities below) and cash
and cash equivalents on the basis of expected cash flows. In addition, the Group’s liquidity management policy involves projecting
and cash equivalents on the basis of expected cash flows. In addition, the Group’s liquidity management policy involves projecting
cash flows in major currencies and considering the level of liquid assets necessary to meet these.
cash flows in major currencies and considering the level of liquid assets necessary to meet these.
(i) Financing arrangements
(i) Financing arrangements
Unrestricted access was available at balance date to the following lines of credit:
Unrestricted access was available at balance date to the following lines of credit:
Total facilities
Total facilities
- bank debt funding facility
- bank debt funding facility
- bilateral liquidity facility with ANZ(1)
- bilateral liquidity facility with ANZ(1)
- multi-option facility (including indemnity/guarantee)
- multi-option facility (including indemnity/guarantee)
Total
Total
Facilities used at balance date
Facilities used at balance date
- bank debt funding facility(2)
- bank debt funding facility(2)
- bilateral liquidity facility with ANZ
- bilateral liquidity facility with ANZ
- multi-option facility (including indemnity/guarantee)
- multi-option facility (including indemnity/guarantee)
Total
Total
Unused balance of facilities at balance date
Unused balance of facilities at balance date
- bank debt funding facility
- bank debt funding facility
- bilateral liquidity facility with ANZ
- bilateral liquidity facility with ANZ
- multi-option facility (including indemnity/guarantee)
- multi-option facility (including indemnity/guarantee)
Total
Total
2020
2020
$m
$m
635.0
635.0
100.0
100.0
20.0
20.0
755.0
755.0
250.0
250.0
-
-
3.5
3.5
253.5
253.5
385.0
385.0
100.0
100.0
16.5
16.5
501.5
501.5
2019
2019
$m
$m
635.0
635.0
-
-
20.0
20.0
655.0
655.0
390.0
390.0
-
-
3.2
3.2
393.2
393.2
245.0
245.0
-
-
16.8
16.8
261.8
261.8
(1) Subsequent to 27 June 2020, the Group cancelled its bilateral liquidity facility with ANZ on 7 August 2020.
(1) Subsequent to 27 June 2020, the Group cancelled its bilateral liquidity facility with ANZ on 7 August 2020.
(2) As at 27 June 2020, NIL (2019: $22.3 million) of the overdraft facility has been drawn and in accordance with financing arrangements this is
(2) As at 27 June 2020, NIL (2019: $22.3 million) of the overdraft facility has been drawn and in accordance with financing arrangements this is
offset by cash funds in transit.
offset by cash funds in transit.
Current interest rates on bank loans of the economic entity are 2.13% - 2.16% (2019: 2.79% - 3.55%).
Current interest rates on bank loans of the economic entity are 2.13% - 2.16% (2019: 2.79% - 3.55%).
Maturities of financial liabilities
Maturities of financial liabilities
(ii)
(ii)
The following tables analyse the Group’s financial liabilities into relevant maturity groupings based on their contractual maturities for:
The following tables analyse the Group’s financial liabilities into relevant maturity groupings based on their contractual maturities for:
- all non-derivative financial liabilities; and
- all non-derivative financial liabilities; and
- net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the
- net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the
timing of the cash flows.
timing of the cash flows.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying
balances as the impact of discounting is not significant. For interest rate swaps the cash flows have been estimated using forward
balances as the impact of discounting is not significant. For interest rate swaps the cash flows have been estimated using forward
interest rates applicable at the end of the reporting period.
interest rates applicable at the end of the reporting period.
21.
Financial risk management (continued)
(d) Liquidity risk (continued)
(ii)
Maturities of financial liabilities (continued)
Less than
6 months
$m
6-12
months
$m
Between
1 and 2
years
$m
Between
2 and 5
years
$m
Over 5
years
$m
Total
contractual
cash flows
$m
Carrying
amount
(assets) /
liabilities
$m
442.3
2.7
107.0
552.0
-
2.7
106.5
109.2
-
5.4
198.2
203.6
-
252.6
437.6
690.2
-
-
228.0
228.0
442.3
263.4
1,077.3
1,783.0
442.3
250.0
939.3
1,631.6
2020
Non-derivatives
Trade and other payables
Borrowings(1)
Lease liabilities
Total non-derivatives
Derivatives
Net settled (Interest Rate Swaps)
-
-
Forward exchange contracts used
for hedging:
Gross settled
- (inflow)
- outflow
Total derivatives
(1)Excludes finance leases.
(99.6)
101.0
1.4
(25.5)
26.4
0.9
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(125.1)
127.4
2.3
-
1.9
1.9
2019
Non-derivatives
Trade and other payables
Borrowings(1)
Finance lease liabilities
Total non-derivatives
Derivatives
Net settled (Interest Rate Swaps)
Forward exchange contracts used
for hedging:
Gross settled
- (inflow)
- outflow
Total derivatives
(1)Excludes finance leases.
Less than
6 months
$m
6-12
months
$m
Between
1 and 2
years
$m
Between
2 and 5
years
$m
Over 5
years
$m
Total
contractual
cash flows
$m
Carrying
amount
(assets) /
liabilities
$m
357.3
6.2
1.8
365.3
-
6.2
1.8
8.0
-
12.4
3.6
16.0
-
395.9
0.3
396.2
0.8
0.8
1.5
0.5
(88.2)
86.1
(1.3)
(45.5)
44.6
(0.1)
-
-
1.5
-
-
0.5
-
-
-
-
-
-
-
-
357.3
420.7
7.5
785.5
357.3
390.0
7.2
754.5
3.6
6.2
(133.7)
130.7
0.6
(2.8)
-
3.4
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S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0 123
S U P E R R E TA I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
123
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
For the period ended 27 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
For the period ended 27 June 2020
22.
22.
(a)
(a)
Capital management
Capital management
Risk management
Risk management
The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can continue to
The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can continue to
provide returns for shareholders and benefits for other stakeholders, and maintain an optimal capital structure to reduce the cost of
provide returns for shareholders and benefits for other stakeholders, and maintain an optimal capital structure to reduce the cost of
capital.
capital.
22.
22.
Capital management (continued)
Capital management (continued)
(b)
(b)
Dividends
Dividends
Ordinary shares
Ordinary shares
Dividends paid by Super Retail Group Limited during the financial year were as follows:
Dividends paid by Super Retail Group Limited during the financial year were as follows:
2020
2020
$m
$m
2019
2019
$m
$m
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital
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.
to shareholders, issue new shares or sell assets to reduce debt.
Final dividend for the period ended 29 June 2019 of 28.5 cents per share (2018: 27.5
Final dividend for the period ended 29 June 2019 of 28.5 cents per share (2018: 27.5
cents per share) paid on 26 September 2019. Fully franked based on tax paid at 30%
cents per share) paid on 26 September 2019. Fully franked based on tax paid at 30%
56.2
56.2
54.3
54.3
The Group monitors overall capital on the basis of the gearing ratio. The ratio is calculated as net debt divided by total capital. Net
The Group monitors overall capital on the basis of the gearing ratio. The ratio is calculated as net debt divided by total capital. Net
debt is calculated as total borrowings less cash and cash equivalents. Total capital is calculated as equity as shown in the
debt is calculated as total borrowings less cash and cash equivalents. Total capital is calculated as equity as shown in the
consolidated balance sheet (including non-controlling interests) plus net debt.
consolidated balance sheet (including non-controlling interests) plus net debt.
During 2020 the Group’s strategy, which was unchanged from 2019, was to ensure that the gearing ratio remained below 50 per cent.
During 2020 the Group’s strategy, which was unchanged from 2019, was to ensure that the gearing ratio remained below 50 per cent.
This target ratio range excludes the short-term impact of acquisitions. The gearing ratios at 27 June 2020 and 29 June 2019 were as
This target ratio range excludes the short-term impact of acquisitions. The gearing ratios at 27 June 2020 and 29 June 2019 were as
follows:
follows:
Total borrowings
Total borrowings
Total lease liabilities
Total lease liabilities
Less: Cash & cash equivalents
Less: Cash & cash equivalents
Net Debt
Net Debt
Total Equity
Total Equity
Total Capital
Total Capital
Gearing Ratio
Gearing Ratio
2020
2020
$m
$m
247.8
247.8
939.3
939.3
(285.1)
(285.1)
902.0
902.0
991.3
991.3
1,893.3
1,893.3
47.6%
47.6%
Pre-AASB 16
Pre-AASB 16
2020
2020
$m
$m
252.5
252.5
-
-
(285.1)
(285.1)
(32.6)
(32.6)
1,031.4
1,031.4
998.8
998.8
(3.3%)
(3.3%)
2019
2019
$m
$m
394.2
394.2
-
-
(7.5)
(7.5)
386.7
386.7
816.0
816.0
1,202.7
1,202.7
32.2%
32.2%
The Group monitors ongoing capital on the basis of the fixed charge cover ratio. The ratio is calculated as earnings before net finance
The Group monitors ongoing capital on the basis of the fixed charge cover ratio. The ratio is calculated as earnings before net finance
costs, income tax, depreciation, amortisation and store and rental expense divided by fixed charge obligations (being finance costs
costs, income tax, depreciation, amortisation and store and rental expense divided by fixed charge obligations (being finance costs
and store and distribution centre rental expenses). Rental expenses are calculated net of straight line lease adjustments, while finance
and store and distribution centre rental expenses). Rental expenses are calculated net of straight line lease adjustments, while finance
costs exclude non-cash mark-to-market losses or gains on interest rate swaps.
costs exclude non-cash mark-to-market losses or gains on interest rate swaps.
During financial year 2020 the Group’s strategy, which was unchanged from financial year 2019, was to maintain a fixed charge cover
During financial year 2020 the Group’s strategy, which was unchanged from financial year 2019, was to maintain a fixed charge cover
ratio of around 2.0 times and a net debt to EBITDA of below 2.5 times. The fixed charge cover and net debt to EBITDA ratios at 27
ratio of around 2.0 times and a net debt to EBITDA of below 2.5 times. The fixed charge cover and net debt to EBITDA ratios at 27
June 2020 and 29 June 2019 were as follows:
June 2020 and 29 June 2019 were as follows:
Profit attributable to Owners of Super Retail Group Limited
Profit attributable to Owners of Super Retail Group Limited
Add: Taxation expense
Add: Taxation expense
Net finance costs
Net finance costs
Depreciation and amortisation (excludes impairment)
Depreciation and amortisation (excludes impairment)
EBITDA
EBITDA
Rental expense
Rental expense
EBITDAR
EBITDAR
Net finance costs
Net finance costs
Rental expense
Rental expense
Fixed charges
Fixed charges
Fixed charge cover ratio
Fixed charge cover ratio
Net debt to EBITDA ratio
Net debt to EBITDA ratio
Fixed charge cover ratio from normalised net profit after tax(1)
Fixed charge cover ratio from normalised net profit after tax(1)
2020
2020
$m
$m
110.2
110.2
45.6
45.6
55.1
55.1
282.2
282.2
493.1
493.1
50.5
50.5
543.6
543.6
55.1
55.1
50.5
50.5
105.6
105.6
5.15
5.15
1.82
1.82
Pre-AASB 16
Pre-AASB 16
2020
2020
$m
$m
116.1
116.1
48.1
48.1
17.8
17.8
106.0
106.0
288.0
288.0
255.0
255.0
543.0
543.0
17.8
17.8
255.0
255.0
272.8
272.8
1.99
1.99
(0.11)
(0.11)
2.14
2.14
2019
2019
$m
$m
139.3
139.3
50.3
50.3
21.3
21.3
86.6
86.6
297.5
297.5
236.1
236.1
533.6
533.6
21.3
21.3
236.1
236.1
257.4
257.4
2.07
2.07
1.30
1.30
2.14
2.14
Net debt to EBITDA ratio from normalised net profit after tax(1)
Net debt to EBITDA ratio from normalised net profit after tax(1)
(1) Normalised EBITDAR is $583.0m (2019: $551.2m) and normalised EBITDA is $328.1m (2019: $314.7m). Normalised net debt is positive $32.6m.
(1) Normalised EBITDAR is $583.0m (2019: $551.2m) and normalised EBITDA is $328.1m (2019: $314.7m). Normalised net debt is positive $32.6m.
(0.10)
(0.10)
1.23
1.23
Loan Covenants
Loan Covenants
(i)
(i)
Financial covenants are provided by Super Retail Group Limited with respect to leverage, gearing, fixed charges coverage and
Financial covenants are provided by Super Retail Group Limited with respect to leverage, gearing, fixed charges coverage and
shareholder funds. The Group has complied with the financial covenants of its borrowing facilities during the 2020 and 2019 financial
shareholder funds. The Group has complied with the financial covenants of its borrowing facilities during the 2020 and 2019 financial
years. There are no assets pledged as security in relation to the unsecured debt in the 2020 financial year (2019: nil).
years. There are no assets pledged as security in relation to the unsecured debt in the 2020 financial year (2019: nil).
Interim dividend for the period ended 28 December 2019 of 21.5 cents (2019: 21.5 cents
Interim dividend for the period ended 28 December 2019 of 21.5 cents (2019: 21.5 cents
per share) declared but subsequently cancelled. Fully franked based on tax paid at
per share) declared but subsequently cancelled. Fully franked based on tax paid at
30%
30%
Total dividends provided and paid
Total dividends provided and paid
Dividends paid in cash or satisfied by the issue of shares under the dividend
Dividends paid in cash or satisfied by the issue of shares under the dividend
reinvestment plan were as follows:
reinvestment plan were as follows:
- paid in cash
- paid in cash
-
-
satisfied by issue of shares purchased on market
satisfied by issue of shares purchased on market
Dividends not recognised at year end
Dividends not recognised at year end
Subsequent to year end, the Directors have declared the payment of a final dividend of
Subsequent to year end, the Directors have declared the payment of a final dividend of
19.5 cents per ordinary share (2019: 28.5 cents per ordinary share), fully franked based on
19.5 cents per ordinary share (2019: 28.5 cents per ordinary share), fully franked based on
tax paid at 30%.
tax paid at 30%.
The aggregate amount of the dividend expected to be paid on 2 October 2020, out of
The aggregate amount of the dividend expected to be paid on 2 October 2020, out of
retained profits as at 27 June 2020, but not recognised as a liability at year end, is
retained profits as at 27 June 2020, but not recognised as a liability at year end, is
Franking credits
Franking credits
The franked portions of dividends paid after 27 June 2020 will be franked out of existing
The franked portions of dividends paid after 27 June 2020 will be franked out of existing
franking credits and out of franking credits arising from the payments of income tax in the
franking credits and out of franking credits arising from the payments of income tax in the
years ending after 27 June 2020.
years ending after 27 June 2020.
Franking credits remaining at balance date available for dividends declared after the
Franking credits remaining at balance date available for dividends declared after the
current balance date based on a tax rate of 30%
current balance date based on a tax rate of 30%
-
-
56.2
56.2
54.5
54.5
1.7
1.7
56.2
56.2
42.4
42.4
96.7
96.7
95.0
95.0
1.7
1.7
96.7
96.7
44.0
44.0
56.3
56.3
157.2
157.2
138.7
138.7
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
- franking credits that will arise from the payment of the current tax liability; and
- franking credits that will arise from the payment of the current tax liability; and
- franking debits that will arise from the payment of the dividend as a liability at the reporting date.
- franking debits that will arise from the payment of the dividend as a liability at the reporting date.
The amount recorded above as the franking credit amount is based on the amount of Australian income tax paid or to be paid
The amount recorded above as the franking credit amount is based on the amount of Australian income tax paid or to be paid
in respect of the liability for income tax at the balance date.
in respect of the liability for income tax at the balance date.
The impact on the franking account of the dividend recommended by the Directors since year end will be a reduction in the
The impact on the franking account of the dividend recommended by the Directors since year end will be a reduction in the
franking account of $18.9 million (2019: $24.1 million). The recommended dividend has not been recognised as a liability at year
franking account of $18.9 million (2019: $24.1 million). The recommended dividend has not been recognised as a liability at year
end.
end.
Significant Accounting Policies
Significant Accounting Policies
Dividend distribution
Dividend distribution
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of
the entity, on or before the end of the financial year but not distributed at balance date.
the entity, on or before the end of the financial year but not distributed at balance date.
23.
23.
Related party transactions
Related party transactions
Transactions with related parties are at arm’s length unless otherwise stated.
Transactions with related parties are at arm’s length unless otherwise stated.
(a)
(a)
The parent entity within the Group is Super Retail Group Limited, which is the ultimate Australian parent.
The parent entity within the Group is Super Retail Group Limited, which is the ultimate Australian parent.
Parent entities
Parent entities
Subsidiaries, associates and joint ventures
Subsidiaries, associates and joint ventures
(b)
(b)
Interests in subsidiaries are set out in Note 27 – Investments in controlled entities. Details on associates and joint ventures can be
Interests in subsidiaries are set out in Note 27 – Investments in controlled entities. Details on associates and joint ventures can be
found at Note 24(b) – Business combinations.
found at Note 24(b) – Business combinations.
(c)
(c)
Disclosures relating to key management personnel are set out in Note 28 – Key management personnel disclosures.
Disclosures relating to key management personnel are set out in Note 28 – Key management personnel disclosures.
Key Management Personnel
Key Management Personnel
124 S U P E R R E T A I L G R O U P L I M I T E D A N N U A L R E P O R T 2 0 2 0
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125
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
For the period ended 27 June 2020
23.
Related party transactions (continued)
25.
25.
Deed of cross guarantee
Deed of cross guarantee
Directors
(d)
The names of the persons who were Directors of Super Retail Group Limited during the financial year are S A Pitkin, R A Rowe, D J Eilert,
H L Mowlem, P D Everingham, S A Chaplain, G T Dunne, L K Inman and A M Heraghty.
(e)
There are no amounts due from Directors of the consolidated entity and their director-related entities (2019: nil).
Amounts due from related parties
(f)
Transactions with other related parties
Aggregate amounts included in the determination of profit from ordinary activities
before income tax that resulted from transactions with related parties:
Store lease payment(1)
Inventories(2)
2020
$
2019
$
9,611,168
3,266,427
12,087,041
3,034,241
(1) Rent on properties, with rates which are deemed to be on an arms-length basis. Rent payable at year-end was $750,802 (2019: nil).
(2) Purchases of inventories from Robert Bosch (Australia) Pty Ltd on an arms-length basis. Amounts payable at year-end are $513,389 (2019: $78,844).
Robert Bosch (Australia) Pty Ltd is a related party of the Group as it owns 50% of Autocrew Australia Pty Ltd in joint ownership with the Group.
24.
Business combinations
(a)
Subsidiaries
2020
The Group’s subsidiaries at 27 June 2020 are as detailed in Note 27 - Investments in controlled entities. With the exception of changes
to the Group’s ownership interest in Infinite Retail Pty Ltd, detailed below, there were no changes to the Group’s ownership interest in
these entities.
Infinite Retail Pty Ltd – October 2019
On the 23 October 2019, the Group entered into an agreement with Mulawa Pty Ltd to purchase the last 5 per cent ownership interest
in Infinite Retail Pty Ltd for $75,000. As a result Infinite Retail Pty Ltd is now a wholly-owned subsidiary of the Group.
2019
During the 2019 financial year the Group changed its ownership interest in Youcamp Pty Ltd as detailed below.
Youcamp Pty Ltd – December 2018
On 7 December 2018, the Group entered into an agreement with James Woodford Pty Ltd to sell all of its shares in Youcamp Pty Ltd
for a total consideration of $850,000. As a result the Group no longer has an ownership interest in Youcamp and the entity has been
deconsolidated from December 2018. On divestment the Group has deconsolidated Youcamp by derecognising the assets and
liabilities resulting in a loss on divestment of $0.6 million which has been recognised in the Group’s consolidated statement of
comprehensive income.
Total expenses
Total expenses
Profit before income tax
Profit before income tax
Income tax expense
Income tax expense
Profit for the period
Profit for the period
(b)
Associates and joint ventures
2020
Autoguru Australia Pty Ltd – February 2020
On 13 February 2020, shares in Autoguru Australia Pty Ltd were issued to the management of Autoguru. As a result. Super Retail
Group’s ownership interest in Autoguru reduced from 49.52 per cent to 38.29 per cent.
2019
Autocrew Australia Pty Ltd – June 2019
During the period the Group injected additional capital of $675,000 into Autocrew Australia Pty Ltd, a joint venture with Robert Bosch
(Australia) Pty Ltd where the Group has a 50 per cent ownership interest. Autocrew opened its second workshop in February 2019.
Equity accounted losses of $0.5 million are included in the Group’s consolidated statement of comprehensive income. Based on initial
trading results the value of the Groups investment in Autocrew has been impaired to nil resulting in a further loss of $0.6 million also
being recognised in the Group’s consolidated statement of comprehensive income.
Super Retail Group Limited, A-Mart All Sports Pty Ltd, Auto Trade Direct Pty Ltd, Workout World Pty Ltd, Coyote Retail Pty Limited,
Super Retail Group Limited, A-Mart All Sports Pty Ltd, Auto Trade Direct Pty Ltd, Workout World Pty Ltd, Coyote Retail Pty Limited,
Foghorn Holdings Pty Ltd, Goldcross Cycles Pty Ltd, Ray’s Outdoors Pty Ltd, Rebel Pty Ltd, Rebel Group Limited, Rebel Management
Foghorn Holdings Pty Ltd, Goldcross Cycles Pty Ltd, Ray’s Outdoors Pty Ltd, Rebel Pty Ltd, Rebel Group Limited, Rebel Management
Services Pty Limited, Rebel Sport Limited, Rebel Wholesale Pty Limited, Rebelsport.com Pty Limited, SRG Equity Plan Pty Ltd, SRG Leisure
Services Pty Limited, Rebel Sport Limited, Rebel Wholesale Pty Limited, Rebelsport.com Pty Limited, SRG Equity Plan Pty Ltd, SRG Leisure
Retail Pty Ltd, SRGS Pty Ltd, Supercheap Auto Pty Ltd, Super Retail Commercial Pty Ltd, Super Retail Group Services Pty Ltd, Macpac
Retail Pty Ltd, SRGS Pty Ltd, Supercheap Auto Pty Ltd, Super Retail Commercial Pty Ltd, Super Retail Group Services Pty Ltd, Macpac
Holdings Pty Ltd, Macpac Retail Pty Ltd, Mouton Noir Management Pty Ltd, MP Finco Pty Limited, Macpac Group Holdings Pty Limited,
Holdings Pty Ltd, Macpac Retail Pty Ltd, Mouton Noir Management Pty Ltd, MP Finco Pty Limited, Macpac Group Holdings Pty Limited,
Infinite Retail Pty Ltd and Oceania Bicycles Pty Ltd are parties to a Deed of Cross Guarantee under which each company guarantees
Infinite Retail Pty Ltd and Oceania Bicycles Pty Ltd are parties to a Deed of Cross Guarantee under which each company guarantees
the debts of the others. By entering into the Deed, the wholly-owned entities have been relieved from the requirement to prepare a
the debts of the others. By entering into the Deed, the wholly-owned entities have been relieved from the requirement to prepare a
financial report and directors’ report under ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 issued by the
financial report and directors’ report under ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 issued by the
Australian Securities and Investments Commission.
Australian Securities and Investments Commission.
(a)
(a)
Consolidated Comprehensive Income Statement and Summary of Movements in Consolidated Retained Earnings
Consolidated Comprehensive Income Statement and Summary of Movements in Consolidated Retained Earnings
The above companies represent a Closed Group for the purposes of the Class Order, and as there are no other parties to the Deed
The above companies represent a Closed Group for the purposes of the Class Order, and as there are no other parties to the Deed
of Cross Guarantee that are controlled by Super Retail Group Limited, they also represent the Extended Closed Group.
of Cross Guarantee that are controlled by Super Retail Group Limited, they also represent the Extended Closed Group.
Set out below is a consolidated comprehensive income statement and a summary of movements in consolidated retained earnings
Set out below is a consolidated comprehensive income statement and a summary of movements in consolidated retained earnings
for the period ended 27 June 2020 of the Closed Group.
for the period ended 27 June 2020 of the Closed Group.
Consolidated Comprehensive Income Statement
Consolidated Comprehensive Income Statement
Revenue from continuing operations
Revenue from continuing operations
Other income from continuing operations
Other income from continuing operations
Total revenues and other income
Total revenues and other income
Cost of sales of goods
Cost of sales of goods
Other expenses from ordinary activities
Other expenses from ordinary activities
- selling and distribution
- selling and distribution
- marketing
- marketing
- occupancy
- occupancy
- administration
- administration
Net finance costs
Net finance costs
Share of net loss of associates and joint ventures
Share of net loss of associates and joint ventures
Statement of comprehensive income
Statement of comprehensive income
Profit for the period
Profit for the period
Other comprehensive income
Other comprehensive income
Items that may be reclassified to profit or loss
Items that may be reclassified to profit or loss
Changes in the fair value of cash flow hedges
Changes in the fair value of cash flow hedges
Other comprehensive income for the period, net of tax
Other comprehensive income for the period, net of tax
Total comprehensive income for the period
Total comprehensive income for the period
2020
2020
$m
$m
2,644.9
2,644.9
28.5
28.5
2,673.4
2,673.4
2019
2019
$m
$m
2,441.4
2,441.4
1.6
1.6
2,443.0
2,443.0
(1,458.4)
(1,458.4)
(1,346.9)
(1,346.9)
(352.4)
(352.4)
(74.4)
(74.4)
(191.5)
(191.5)
(368.7)
(368.7)
(53.5)
(53.5)
(0.6)
(0.6)
(314.8)
(314.8)
(73.3)
(73.3)
(193.6)
(193.6)
(306.7)
(306.7)
(20.8)
(20.8)
(2.6)
(2.6)
(2,499.5)
(2,499.5)
(2,258.7)
(2,258.7)
173.9
173.9
(42.6)
(42.6)
131.3
131.3
$m
$m
131.3
131.3
1.0
1.0
1.0
1.0
132.3
132.3
184.3
184.3
(51.6)
(51.6)
132.7
132.7
$m
$m
132.7
132.7
(4.9)
(4.9)
(4.9)
(4.9)
127.8
127.8
(a)
(a)
Consolidated Comprehensive Income Statement and Summary of Movements in Consolidated Retained Earnings
Consolidated Comprehensive Income Statement and Summary of Movements in Consolidated Retained Earnings
(continued)
(continued)
Summary of movements in consolidated retained earnings
Summary of movements in consolidated retained earnings
Retained profits at the beginning of the financial period
Retained profits at the beginning of the financial period
Change in accounting policy – AASB 16 Leases
Change in accounting policy – AASB 16 Leases
Change in Closed Group
Change in Closed Group
Restated balance at the beginning of the financial period
Restated balance at the beginning of the financial period
Profit for the period
Profit for the period
Dividends paid
Dividends paid
Retained profits at the end of the financial period
Retained profits at the end of the financial period
2020
2020
$m
$m
245.5
245.5
(33.4)
(33.4)
82.2
82.2
294.3
294.3
131.3
131.3
(56.2)
(56.2)
369.4
369.4
2019
2019
$m
$m
209.5
209.5
-
-
-
-
209.5
209.5
132.7
132.7
(96.7)
(96.7)
245.5
245.5
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
For the period ended 27 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
25.
25.
Deed of cross guarantee (continued)
Deed of cross guarantee (continued)
(b)
(b)
Consolidated Balance Sheet
Consolidated Balance Sheet
Set out below is a consolidated balance sheet as at 27 June 2020 of the Closed Group.
Set out below is a consolidated balance sheet as at 27 June 2020 of the Closed Group.
26.
Parent entity financial information
The individual financial statements for the parent entity show the following aggregate amounts:
ASSETS
ASSETS
Current assets
Current assets
Cash and cash equivalents
Cash and cash equivalents
Trade and other receivables
Trade and other receivables
Inventories
Inventories
Current tax receivables
Current tax receivables
Derivative financial instruments
Derivative financial instruments
Total current assets
Total current assets
Non-current assets
Non-current assets
Other financial assets
Other financial assets
Deferred tax assets
Deferred tax assets
Property, plant and equipment
Property, plant and equipment
Right-of-use assets
Right-of-use assets
Intangible assets
Intangible assets
Total non-current assets
Total non-current assets
Total assets
Total assets
LIABILITIES
LIABILITIES
Current liabilities
Current liabilities
Trade and other payables
Trade and other payables
Borrowings
Borrowings
Lease liabilities
Lease liabilities
Current tax liabilities
Current tax liabilities
Derivative financial instruments
Derivative financial instruments
Provisions
Provisions
Total current liabilities
Total current liabilities
Non-current liabilities
Non-current liabilities
Trade and other payables
Trade and other payables
Borrowings
Borrowings
Lease liabilities
Lease liabilities
Deferred tax liabilities
Deferred tax liabilities
Provisions
Provisions
Total non-current liabilities
Total non-current liabilities
Total liabilities
Total liabilities
NET ASSETS
NET ASSETS
EQUITY
EQUITY
Contributed equity
Contributed equity
Reserves
Reserves
Retained profits
Retained profits
TOTAL EQUITY
TOTAL EQUITY
2020
2020
$m
$m
260.9
260.9
36.6
36.6
451.3
451.3
-
-
-
-
748.8
748.8
196.7
196.7
11.6
11.6
219.6
219.6
789.0
789.0
806.9
806.9
2,023.8
2,023.8
2,772.6
2,772.6
419.7
419.7
-
-
166.6
166.6
17.2
17.2
1.9
1.9
107.8
107.8
713.2
713.2
-
-
247.8
247.8
717.4
717.4
-
-
23.4
23.4
988.6
988.6
2019
2019
$m
$m
-
-
28.1
28.1
489.7
489.7
1.9
1.9
2.8
2.8
522.5
522.5
277.7
277.7
-
-
243.3
243.3
-
-
761.9
761.9
1,282.9
1,282.9
1,805.4
1,805.4
415.3
415.3
11.4
11.4
-
-
-
-
6.2
6.2
98.8
98.8
531.7
531.7
48.1
48.1
390.8
390.8
-
-
17.2
17.2
19.2
19.2
475.3
475.3
1,701.8
1,701.8
1,007.0
1,007.0
1,070.8
1,070.8
798.4
798.4
698.1
698.1
3.3
3.3
369.4
369.4
1,070.8
1,070.8
542.3
542.3
10.6
10.6
245.5
245.5
798.4
798.4
Balance Sheet
Current assets
Total assets
Current liabilities
Total liabilities
NET ASSETS
Contributed equity
Reserves
- share-based payments
- cash flow hedges
Retained earnings
Total Equity
Profit after tax for the period
Total comprehensive income
Significant Accounting Policies
2020
$m
325.9
1,134.3
30.6
279.4
854.9
698.1
13.1
-
143.7
854.9
102.2
106.5
2019
$m
265.8
1,072.1
35.9
423.5
648.6
542.3
12.9
(4.3)
97.7
648.6
111.8
108.5
Parent entity financial information
The financial information for the parent entity, Super Retail Group Limited has been prepared on the same basis as the
consolidated financial statements, except as set out below.
Investments in subsidiaries
Investments in subsidiaries are accounted for at cost in the financial statements of Super Retail Group Limited.
Tax consolidation legislation
Super Retail Group Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation.
The head entity, Super Retail Group Limited, and the controlled entities in the tax consolidated group account for current and
deferred tax amounts under the Separate taxpayer within Group approach in accordance with AASB Interpretation 1052, Tax
Consolidation Accounting.
In addition to its own current and deferred tax amounts, Super Retail Group Limited also recognises the current tax liabilities (or
assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the
tax consolidated group.
The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate Super Retail
Group Limited for any current tax payable assumed and are compensated by Super Retail Group Limited for any current tax
receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to Super Retail Group
Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in
the wholly-owned entities’ financial statements.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head
entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of
interim funding amounts to assist with its obligations to pay tax instalments.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as current amounts
receivable from or payable to other entities in the Group. Any difference between the amounts assumed and amounts receivable
or payable under the tax funding agreement are recognised as a contribution to (or distribution from) wholly-owned tax
consolidated entities.
Financial guarantees
Where the parent entity has provided financial guarantees in relation to loans and payables of subsidiaries for no compensation,
the fair values of these guarantees are accounted for as contributions and recognised as part of the cost of the investment.
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129
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
27.
Investments in controlled entities
The Group’s subsidiaries at 27 June 2020 are set out below. Unless otherwise stated, they have share capital consisting of ordinary
shares that are held directly by the Group, and the proportion of ownership interests held equals the voting rights held by the Group.
The country of incorporation is also their principal place of business.
Name of Entity
A-Mart All Sports Pty Ltd(1)
Auto Trade Direct (NZ) Limited
Auto Trade Direct Pty Ltd(1)
BCF New Zealand Limited
Workout World Pty Limited(1)
Coyote Retail Pty Limited(1)
Foghorn Holdings Pty Ltd(1)
Goldcross Cycles Pty Ltd(1)
Infinite Retail Pty Ltd(1)
VBM Retail (HK) Limited(2)
Infinite Retail UK Limited(2)
VBM Retail NZ Limited(2)
Macpac Holdings Pty Ltd(1)
Macpac Group Holdings Pty Limited(1) (4)
Macpac New Zealand Limited
Macpac Retail Pty Ltd(1)
Macpac Limited
Macpac Enterprise
MP Finco Pty Limited(1) (4)
Mouton Noir Management Pty Ltd(1)
Mouton NOIR IP Limited
Oceania Bicycles Pty Ltd(1)
Oceania Bicycles Limited(3)
Ray’s Outdoors New Zealand Limited
Ray’s Outdoors Pty Ltd(1)
Rebel Pty Ltd(1)
Rebel Group Limited(1)
Rebel Management Services Pty Limited(1)
Rebel Sport Limited(1)
Rebel Wholesale Pty Limited(1)
Rebelsport.com Pty Limited(1)
SRG Equity Plan Pty Ltd(1)
SRG Leisure Retail Pty Ltd(1)
SRGS (New Zealand) Limited
SRGS Pty Ltd(1)
Country of
Incorporation
Australia
New Zealand
Australia
New Zealand
Australia
Australia
Australia
Australia
Australia
Hong Kong
United Kingdom
New Zealand
Australia
Australia
New Zealand
Australia
New Zealand
New Zealand
Australia
Australia
New Zealand
Australia
New Zealand
New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Principal Activities
Sports retail
Auto retail
Auto retail
Outdoor retail
Sports retail
Sports retail
Sports retail
Sports retail
Sports retail
Sports retail
Sports retail
Sports retail
Outdoor retail
Outdoor retail
Outdoor retail
Outdoor retail
Outdoor retail
Outdoor retail
Outdoor retail
Outdoor retail
Outdoor retail
Sports retail
Sports retail
Outdoor retail
Outdoor retail
Sports retail
Sports retail
Sports retail
Sports retail
Sports retail
Sports retail
Investments
Outdoor retail
New Zealand
Product acquisition and distribution
Australia
Product acquisition and distribution
Super Cheap Auto (New Zealand) Pty Limited
New Zealand
Super Cheap Auto Pty Ltd(1)
Super Retail Commercial Pty Ltd(1)
Australia
Australia
Super Retail Group Services (New Zealand) Limited
New Zealand
Super Retail Group Services Pty Ltd(1)
Super Retail Group Trading (Shanghai) Ltd
Australia
China
Auto retail
Auto retail
Auto retail
Support services
Support services
Product sourcing
Equity Holding
2020
%
2019
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
95
95
95
95
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
(1) These controlled entities have been granted relief from the necessity to prepare financial reports in accordance with ASIC Corporations (Wholly-owned
Companies) Instrument 2016/785 issued by the Australian Securities and Investments Commission.
(2) Investment is held directly by Infinite Retail Pty Ltd.
(3) Investment is held directly by Oceania Bicycles Pty Ltd.
(4) Previously incorporated in New Zealand. Re-domiciled during the financial year ended 27 June 2020.
28.
Key Management Personnel disclosures
(a)
Key Management Personnel compensation
Short-term employee benefits
Long-term employee benefits
Post-employment benefits
Share-based payments
2020
$
2019
$
7,421,738
5,638,821
25,003
178,154
711,742
8,336,637
114,843
929,632
(169,235)
6,514,061
The key management personnel remuneration in some instances has been paid by a subsidiary.
Loans to key management personnel
There were no loans to individuals at any time.
Other transactions with key management personnel
Aggregate amounts of each of the above types of other transactions with key management personnel of Super Retail Group
Limited:
Amounts paid to key management personnel as shareholders
2020
$
Dividends(1)
(1) Dividends paid to KMP shareholders is down on the prior year due to the cancellation of the FY20 interim dividend.
17,135,677
2019
$
30,133,125
29.
Share-based payments
(a)
Executive Performance Rights
The Company has established the Super Retail Group Executive Performance Rights Plan (“the plan”) to assist in the retention and
motivation of executives of Super Retail Group (Participants). It is intended that the Performance Rights will enable the Company to
retain and attract skilled and experienced executives and provide them with the motivation to enhance the success of the Company.
Under the Performance Rights, rights may be offered to Participants selected by the Board. Unless otherwise determined by the Board,
no payment is required for the grant of rights under the plan.
Subject to any adjustment in the event of a bonus issue, each right is an option to subscribe for one share. Upon the exercise of a
right by a Participant, each Share issued will rank equally with other Shares of the Company.
Performance Rights issued under the plan may not be transferred unless approved by the Board. The table below summarises rights
granted under the plan.
Number of Rights Issued
Grant Date
2020
1 September 2015
1 September 2016
1 September 2017
1 September 2018
1 September 2019
2019
1 September 2015
1 September 2016
1 September 2017
1 September 2018
Balance at
start of the
year
(Number)
136,707
453,535
633,916
592,684
-
1,816,842
511,500
536,775
724,862
-
1,773,137
Granted
during the
year
(Number)
-
-
-
-
727,470
727,470
-
-
-
622,684
622,684
Exercised
during the
year
(Number)
(10,089)
(150,879)
-
-
-
(160,968)
(143,731)
-
-
-
(143,731)
Forfeited
during the
year
(Number)
(116,666)
(155,602)
(168,031)
(247,986)
(32,000)
(720,285)
(231,062)
(83,240)
(90,946)
(30,000)
(435,248)
Balance at
the end of
the year
(Number)
9,952
147,054
465,885
344,698
695,470
1,663,059
136,707
453,535
633,916
592,684
1,816,842
Unvested at
the end of
the year
(Number)
9,952
147,054
465,885
344,698
695,470
1,663,059
136,707
453,535
633,916
592,684
1,816,842
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131
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
29.
Share-based payments (continued)
Expenses arising from share based payments transactions:
Executive Performance Rights
Significant Accounting Policies
2020
$m
0.2
2019
$m
1.3
Share-based payments
Share-based compensation benefits are provided to certain employees via the Super Retail Group Performance Rights Plan.
30.
Remuneration of auditors (continued)
The Group’s auditor is PricewaterhouseCoopers. The Group may employ PricewaterhouseCoopers on assignments additional to their
statutory audit duties where PricewaterhouseCoopers’ expertise and experience with the Group are important. These assignments
are principally tax advice and due diligence reporting on acquisitions, or where the auditor is awarded assignments on a competitive
basis. It is the Group’s policy to seek competitive tenders for all major consulting projects. The Board has considered the non-audit
services provided during the year by the auditor, and in accordance with written advice provided by resolution of the Audit and Risk
Committee, is satisfied that the provision of those non-audit services during the year by the auditor is compatible with, and did not
compromise, the auditor independence requirements of the Corporations Act 2001.
The fair value of performance rights granted under the plan are recognised as an employee benefit expense with a corresponding
increase in equity. The fair value is measured at grant date and recognised over the period during which the employees become
unconditionally entitled to the performance rights.
31.
Contingencies
2020
$m
2019
$m
For performance rights, the fair value at grant date is determined using a binomial option pricing model that takes into account
the exercise price, the term of the performance rights, the vesting and performance criteria, the impact of dilution, the non-
tradeable nature of the performance rights, the share price at grant date and expected price volatility of the underlying share,
the expected dividend yield and the risk-free interest rate for the term of the performance rights.
The fair value of the performance rights granted excludes the impact of any non-market vesting conditions (for example,
profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of
performance rights that are expected to become exercisable. At each balance sheet date, the entity revises its estimate of the
number of performance rights that are expected to become exercisable. The employee benefit expense recognised each period
takes into account the most recent estimate.
Guarantees
Guarantees issued by the bankers of the Group in support of various rental
arrangements.
The maximum future rental payments guaranteed amount to:
4.9
5.2
Other Contingencies
The Group continues to work with the Fair Work Ombudsman as the underpayment of retail team members is remediated. This may
result in regulator undertakings and further amounts becoming payable at the direction of the regulator. Future professional advisory
fees will be incurred to finalise remediation outcomes.
Upon exercise of the performance rights, the balance of the share-based payments reserve relating to those performance rights
remains in the share-based payments reserve.
From time to time the Group is subject to legal claims as a result of its operations. An immaterial contingent liability may exist for any
exposure over and above current provisioning levels.
30.
Remuneration of auditors
During the period the following fees were paid or payable for services provided by the auditor of the parent entity, its related
practices and non-related audit firms.
(a)
(i)
PricewaterhouseCoopers Australia
Assurance services
Audit and review of financial statements
Other assurance(1)
Total remuneration for audit and other assurance services
(ii)
Taxation services
Tax compliance services, including review of Company income tax returns
Total remuneration for taxation services
(iii)
Other services
Advisory services
Total remuneration for advisory services
2020
$
2019
$
855,736
-
855,736
258,577
258,577
45,900
45,900
807,976
13,407
821,383
295,484
295,484
-
-
Total remuneration of PricewaterhouseCoopers Australia
1,160,213
1,116,867
(b) Network firms of PricewaterhouseCoopers Australia
(i)
Taxation services
Tax compliance services, including review of Company income tax returns
Total remuneration for taxation services
Total remuneration of network firms of PricewaterhouseCoopers Australia
Total auditors’ remuneration
(1) Cyber security review.
80,380
80,380
80,380
56,283
56,283
56,283
1,240,593
1,173,150
32.
Commitments
Capital commitments
Commitments for the acquisition of plant and equipment contracted for at the
reporting date but not recognised as liabilities payable:
Within one year
Total capital commitments
Lease commitments
Commitments in relation to operating lease payments for property and motor vehicles
under non-cancellable operating leases are payable as follows:
Within one year
Later than one year but not later than five years
Later than five years
Less lease straight lining adjustment (Note 12)
Total lease commitments
Future minimum lease payments expected to be received in relation to non-
cancellable sub-leases of operating leases
2020
$m
2019
$m
2.6
2.6
0.9
0.9
-
-
-
-
-
-
224.1
655.4
132.6
(54.9)
957.2
3.2
The Group leases various offices, warehouses and retail stores under non-cancellable operating leases. The leases have
varying terms, escalation clauses and renewal rights. On renewal the terms of the leases are renegotiated.
From 30 June 2019, the Group has recognised right-of-use assets for these leases, except for short-term and low-value leases -
refer Note 11 – Leases and Note 34 – Changes in accounting policy.
33.
Net tangible asset backing
Net tangible asset per ordinary share
2020
Cents
$0.88
2019
Cents
($0.01)
Net tangible asset per ordinary share is calculated based on Net Assets of $991.3 million (2019: $816.0 million) less intangible assets of
$874.3 million (2019: $894.2 million) adjusted for the associated deferred tax liability of $75.3 million (2019: $75.3 million). The number of
shares used in the calculation was 219,697,707 (2019: 197,383,751).
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 27 June 2020
35.
Events occurring after balance date
On 15 June 2020, the Group announced an underwritten 1 for 7 accelerated pro rata non-renounceable entitlement offer to raise
equity of approximately $202.9 million at a fixed price of $7.19 per share. The equity raising comprised an institutional entitlement offer
which settled on 24 June 2020 and a retail entitlement offer which settled on 9 July 2020. As a result of the retail entitlement 6,073,995
new shares were issued on 10 July 2020 for proceeds of $43.6 million. The total number of ordinary shares after the equity raising was
225,771,702.
On 7 August 2020, the Group cancelled its bilateral liquidity facility with ANZ for $100 million as it had been fully repaid on 1 June 2020
and was surplus to requirements (refer Note 21 (d) – Financial risk management).
Except as noted above, no matters or circumstance have arisen since 27 June 2020 that has significantly affected, or may significantly
affect:
(a)
(b)
(c)
the Group’s operations in future financial years; or
the results of those operations in future financial years; or
the Group’s state of affairs in future financial years.
34.
Changes in accounting policy
This note explains the impact of the adoption of AASB 16 Leases on the Group’s financial statements and discloses the new accounting
policies that have been applied from 30 June 2019.
The Group has adopted AASB 16 Leases retrospectively from 30 June 2019, but has not restated comparatives for the 29 June 2019
reporting period, as permitted under the specific transitional provisions in the standard. The reclassifications and the adjustments
arising from the new leasing rules are therefore recognised in the opening balance sheet on 30 June 2019.
(a)
Adjustments recognised on adoption of AASB 16 Leases
On adoption of AASB 16 Leases, the group recognised lease liabilities in relation to leases which had previously been classified as
operating leases’ under the principles of AASB 117 Leases. These liabilities were measured at the present value of the remaining lease
payments, discounted using the lessee’s incremental borrowing rate as at 30 June 2019. The weighted average lessee’s incremental
borrowing rate applied to the lease liabilities on 30 June 2019 was 4.2 per cent.
For leases previously classified as finance leases the entity recognised the carrying amount of the lease asset and lease liability
immediately before transition as the carrying amount of the right of use asset and the lease liability at the date of initial application.
The measurement principles of AASB 16 Leases are applied only after that date. No measurement adjustments were required
immediately after the date of initial application.
Operating lease commitments disclosed as at 29 June 2019
Less: leases not yet commenced
Less: discounting using the lessee’s incremental borrowing rate at the date of initial application
Less: short-term leases recognised on a straight-line basis as expense
Less: low-value leases recognised on a straight-line basis as expense
Add: fitout contributions presented in property, plant and equipment
Add: adjustments as a result of a different treatment of extension options
Add: finance lease liabilities recognised as at 29 June 2019
Lease liability recognised as at 30 June 2019
30 June
2019
$m
957.2
(21.1)
(120.9)
(21.8)
(1.1)
13.1
117.5
7.2
930.1
The associated right-of-use assets for certain property leases were measured on a retrospective basis as if the new rules had always
been applied. All other right-of use assets were measured at the amount equal to the lease liability, adjusted by the amount of any
prepaid or accrued lease payments relating to that lease recognised in the balance sheet as at 29 June 2019. The existence of some
onerous lease contracts resulted in an adjustment to the right-of-use assets at the date of initial application of $1.6 million.
Property, plant and equipment – decrease $24.1 million
Intangibles – decrease $1.4 million
Right-of-use assets – increase $843.5 million
Deferred tax assets – increase $14.4 million
Prepayments – decrease by $0.7 million
Straight-line lease adjustment – decrease by $55.4 million
The change in accounting policy affected the following items in the balance sheet on 30 June 2019:
Onerous lease provision – decrease by $1.6 million
Borrowings – decrease by $7.2 million
Lease liabilities – increase by $930.1 million
The net impact on retained earnings on 30 June 2019 was a decrease of $34.2 million.
Earnings per share decreased by 3.0c for the 52 weeks ended 27 June 2020 as a result of the adoption of AASB 16 Leases.
Applying AASB 16 Leases for the first time, the Group has used the following practical expedients permitted by the standard:
the use of a single discount rate to a portfolio of leases with reasonably similar characteristics
reliance on previous assessments as to whether leases are onerous
the accounting for operating leases with a remaining lease term of less than 12 months as at 29 June 2019 as short-term leases
the accounting for operating leases for which the underlying asset is of a low value as low-value leases
the exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application, and
the use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
The group has also elected not to reassess whether a contract is, or contains, a lease at the date of initial application. Instead, for
contracts entered into before the transition date the group relied on its assessment made applying AASB 117 and Interpretation 4
Determining whether an Arrangement contains a Lease.
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DIRECTORS’ DECLARATION
DIRECTORS’ DECLARATION
In the Directors’ opinion:
In the Directors’ opinion:
(a)
(a)
(b)
(b)
(c)
(c)
the financial statements and notes set out on pages 80 to 133 are in accordance with the Corporations Act 2001,
the financial statements and notes set out on pages 80 to 133 are in accordance with the Corporations Act 2001,
including:
including:
(i)
(i)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
reporting requirements; and
giving a true and fair view of the consolidated entity's financial position as at 27 June 2020 and of its
giving a true and fair view of the consolidated entity's financial position as at 27 June 2020 and of its
performance for the financial year ended on that date; and
performance for the financial year ended on that date; and
(ii)
(ii)
there are reasonable grounds to believe that the Compacny will be able to pay its debts as and when they become
there are reasonable grounds to believe that the Compacny will be able to pay its debts as and when they become
due and payable; and
due and payable; and
at the date of this declaration, there are reasonable grounds to believe that the members of the Extended Closed
at the date of this declaration, there are reasonable grounds to believe that the members of the Extended Closed
Group identified in Note 25 will be able to meet any obligations or liabilities to which they are, or may become, subject
Group identified in Note 25 will be able to meet any obligations or liabilities to which they are, or may become, subject
by virtue of the deed of cross guarantee described in Note 25.
by virtue of the deed of cross guarantee described in Note 25.
Note 2(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the
Note 2(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
International Accounting Standards Board.
The Directors have been given the declarations by the Group Managing Director and Chief Financial Officer required by
The Directors have been given the declarations by the Group Managing Director and Chief Financial Officer required by
section 295A of the Corporations Act 2001.
section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Directors.
This declaration is made in accordance with a resolution of the Directors.
S A Pitkin
S A Pitkin
Director
Director
Brisbane
Brisbane
24 August 2020
24 August 2020
A M Heraghty
A M Heraghty
Director
Director
Independent auditor’s report
To the members of Super Retail Group Limited
Report on the audit of the financial report
Our opinion
In our opinion:
The accompanying financial report of Super Retail Group Limited (the Company) and its controlled
entities (together the Group) is in accordance with the Corporations Act 2001, including:
(a) giving a true and fair view of the Group's financial position as at 27 June 2020 and of its financial
performance for the period from 30 June 2019 to 27 June 2020 (the year)
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
What we have audited
The Group financial report comprises:
●
●
●
●
●
●
the consolidated balance sheet as at 27 June 2020
the consolidated statement of comprehensive income for the year then ended
the consolidated statement of changes in equity for the year then ended
the consolidated statement of cash flows for the year then ended
the notes to the consolidated financial statements, which include a summary of significant
accounting policies
the directors’ declaration.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial report
section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
PricewaterhouseCoopers, ABN 52 780 433 757
480 Queen Street, BRISBANE QLD 4000, GPO Box 150, BRISBANE QLD 4001
T: +61 7 3257 5000, F: +61 7 3257 5999, www.pwc.com.au
Liability limited by a scheme approved under Professional Standards Legislation.
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Our audit approach
Key audit matters
An audit is designed to provide reasonable assurance about whether the financial report is free from
material misstatement. Misstatements may arise due to fraud or error. They are considered material if
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the financial report.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion
on the financial report as a whole, taking into account the geographic and management structure of the
Group, its accounting processes and controls and the industry in which it operates.
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report for the current period. The key audit matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. Further, any commentary on the outcomes of a particular audit
procedure is made in that context. We communicated the key audit matters to the Audit and Risk
Committee.
Key audit matter
How our audit addressed the key audit matter
Carrying value of Goodwill and Brand names
(Refer to note 10) Goodwill:$526.6m, Brand names:
$253.3m
Goodwill is allocated to the Group’s cash generating
units (CGUs) which are consistent with the Group’s
segments.
During the annual review for impairment, the Group
determined the recoverable amount for each CGU using
discounted cash flow valuation models which relied on
significant assumptions and estimates of future trading
performance.
The carrying value of goodwill and brand names was a
key audit matter due to its size and the judgements
involved in estimating the cash flow forecasts, including
consideration of the assumed economic recovery in
relation to COVID-19 applied to the forecasts.
Amongst other procedures, we assessed the valuation
models by:
● Developed an understanding of and
evaluated the Group’s processes and controls
relating to annual impairment tests of the
CGUs in light of the requirements of
Australian Accounting Standards.
● Compared actual results with historical
forecasts to assess the reliability of the
forecasts used in the cash flow models.
● Evaluated how the Group has considered the
ongoing impact of COVID-19 in the future
cash flow forecasts.
● Together with PwC valuation experts,
assessed the valuation methodology and
mathematical accuracy of the models and
compared the discount rate and growth rate
assumptions to historical company data and
market observable inputs.
● Evaluated the Group’s assessment that the
indefinite life assumption for brand names
remains appropriate at period end.
● Evaluated the adequacy of the disclosures
made in the financial report, in light of the
requirements of Australian Accounting
Standards.
Materiality
Audit scope
● For the purpose of our audit we used overall Group
materiality of $8.1 million, which represents
approximately 5% of the Group’s profit before tax
adjusted for the redundancy costs recorded in the
current year.
● We applied this threshold, together with
qualitative considerations, to determine the scope
of our audit and the nature, timing and extent of
our audit procedures and to evaluate the effect of
misstatements on the financial report as a whole.
● We chose the adjusted Group profit before tax
because, in our view, it is the benchmark against
which the performance of the Group is most
commonly measured. We adjusted for redundancy
costs as they are unusual or infrequently occurring
items impacting profit and loss.
● We utilised a 5% threshold based on our
professional judgement, noting it is within the
range of commonly acceptable thresholds.
● Our audit focused on where the Group made
subjective judgements; for example, significant
accounting estimates involving assumptions and
inherently uncertain future events.
● Our audit procedures in the current year were
performed at the Brisbane head office and
included site visits to stores and distribution
centres in Australia and New Zealand to perform
audit procedures over inventory. Our team
included specialists in information technology,
taxation, payroll and data and experts in
valuations.
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Provision for underpayment of employees
Provision for underpayment of employees
(Refer to note 15 and 31) Provision for underpayment :
(Refer to note 15 and 31) Provision for underpayment :
$32.4m
$32.4m
In assessing the provision, our procedures included
In assessing the provision, our procedures included
the following:
the following:
The provision for employee underpayments was a key
The provision for employee underpayments was a key
audit matter due to its size, nature and the complexity of
audit matter due to its size, nature and the complexity of
the model used to estimate the provision. Judgement
the model used to estimate the provision. Judgement
was required to determine relevant assumptions, such
was required to determine relevant assumptions, such
as the number of incurred overtime hours, allowance
as the number of incurred overtime hours, allowance
payments and assumed work patterns.
payments and assumed work patterns.
Implementation of new lease accounting
Implementation of new lease accounting
standard
standard
(Refer to note 11 and 34) Right-of-use Assets: $848.0m,
(Refer to note 11 and 34) Right-of-use Assets: $848.0m,
Lease Liabilities : $939.3m
Lease Liabilities : $939.3m
The Group’s adoption of Australian Accounting
The Group’s adoption of Australian Accounting
Standard AASB 16 Leases (AASB 16) was a key audit
Standard AASB 16 Leases (AASB 16) was a key audit
matter due to the significant impact transition to the
matter due to the significant impact transition to the
new standard had on the financial report, including the
new standard had on the financial report, including the
judgement required when determining lease option
judgement required when determining lease option
renewals.
renewals.
● Developed an understanding of the basis for
● Developed an understanding of the basis for
the Group’s estimate of the provision and the
the Group’s estimate of the provision and the
nature of the estimation uncertainty at
nature of the estimation uncertainty at
balance date.
balance date.
● Together with PwC data and payroll
● Together with PwC data and payroll
specialists, we evaluated the Group’s
specialists, we evaluated the Group’s
methodologies and assumptions used to
methodologies and assumptions used to
determine the underpayment provision,
determine the underpayment provision,
including developing an understanding of the
including developing an understanding of the
Group’s interpretation of the General Retail
Group’s interpretation of the General Retail
Industry Award (GRIA) and relevant
Industry Award (GRIA) and relevant
Enterprise Agreements applied.
Enterprise Agreements applied.
● Reperformed the calculation of the
● Reperformed the calculation of the
underpayment provision, and agreed inputs
underpayment provision, and agreed inputs
used to source data for a sample of
used to source data for a sample of
employees.
employees.
● Evaluated the Group’s accounting treatment
● Evaluated the Group’s accounting treatment
and the adequacy of the disclosures in light of
and the adequacy of the disclosures in light of
the requirements of Australian Accounting
the requirements of Australian Accounting
Standards.
Standards.
We performed the following audit procedures,
We performed the following audit procedures,
amongst others:
amongst others:
● Assessed the Group’s new accounting policies
● Assessed the Group’s new accounting policies
against the requirements of AASB 16.
against the requirements of AASB 16.
● Evaluated the adequacy of the disclosures in
● Evaluated the adequacy of the disclosures in
the financial statements, in light of the
the financial statements, in light of the
requirements of Australian Accounting
requirements of Australian Accounting
Standards.
Standards.
For a sample of lease agreements, we:
For a sample of lease agreements, we:
● Evaluated the lease calculations against the
● Evaluated the lease calculations against the
terms of the lease agreement and the
terms of the lease agreement and the
requirements of Australian Accounting
requirements of Australian Accounting
Standards.
Standards.
● Tested the mathematical accuracy of the
● Tested the mathematical accuracy of the
lease calculations.
lease calculations.
● Evaluated the evidence relating to variable
● Evaluated the evidence relating to variable
lease payments and option renewals.
lease payments and option renewals.
Inventory valuation
Inventory valuation
(Refer to note 8) Inventories : $502.4m
(Refer to note 8) Inventories : $502.4m
We performed the following audit procedures,
We performed the following audit procedures,
amongst others:
amongst others:
The valuation of inventory was a key audit matter
The valuation of inventory was a key audit matter
because of the judgements involved in:
because of the judgements involved in:
● Estimating the stock loss provision required at
● Estimating the stock loss provision required at
year end due to the performance of cycle
year end due to the performance of cycle
counts throughout the year.
counts throughout the year.
● Estimating the net realisable value (NRV) of
● Estimating the net realisable value (NRV) of
inventory.
inventory.
● Capitalising attributable overheads and rebates
● Capitalising attributable overheads and rebates
to inventory.
to inventory.
● Assessed the Group’s accounting policies
● Assessed the Group’s accounting policies
against the requirements of Australian
against the requirements of Australian
Accounting Standards.
Accounting Standards.
● For a sample of inventory items we agreed
● For a sample of inventory items we agreed
movements between stocktake date and year
movements between stocktake date and year
end to supporting documentation.
end to supporting documentation.
● We tested the mathematical accuracy of the
● We tested the mathematical accuracy of the
stock loss provision.
stock loss provision.
● We assessed the NRV provision, using data
● We assessed the NRV provision, using data
analysis techniques to compare the carrying
analysis techniques to compare the carrying
value to the most recent sales price across the
value to the most recent sales price across the
inventory balance.
inventory balance.
● We evaluated the Group's methodology for
● We evaluated the Group's methodology for
capitalising overheads and rebates to
capitalising overheads and rebates to
inventory, as well as considering the nature
inventory, as well as considering the nature
of a sample of the costs capitalised during the
of a sample of the costs capitalised during the
year, in light of the requirements of the
year, in light of the requirements of the
Australian Accounting Standards.
Australian Accounting Standards.
Other information
Other information
The directors are responsible for the other information. The other information comprises the information
The directors are responsible for the other information. The other information comprises the information
included in the annual report for the year ended 27 June 2020, but does not include the financial report
included in the annual report for the year ended 27 June 2020, but does not include the financial report
and our auditor’s report thereon. Prior to the date of this auditor's report, the other information we
and our auditor’s report thereon. Prior to the date of this auditor's report, the other information we
obtained included the Director’s report and the Shareholder information. We expect the remaining other
obtained included the Director’s report and the Shareholder information. We expect the remaining other
information to be made available to us after the date of this auditor's report.
information to be made available to us after the date of this auditor's report.
Our opinion on the financial report does not cover the other information and we do not and will not
Our opinion on the financial report does not cover the other information and we do not and will not
express an opinion or any form of assurance conclusion thereon.
express an opinion or any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of
If, based on the work we have performed on the other information that we obtained prior to the date of
this auditor’s report, we conclude that there is a material misstatement of this other information, we are
this auditor’s report, 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.
required to report that fact. We have nothing to report in this regard.
When we read the other information not yet received, if we conclude that there is a material misstatement
When we read the other information not yet received, if we conclude that there is a material misstatement
therein, we are required to communicate the matter to the directors and use our professional judgement
therein, we are required to communicate the matter to the directors and use our professional judgement
to determine the appropriate action to take.
to determine the appropriate action to take.
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Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards 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 the financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing
and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of
our auditor's report.
Report on the remuneration report
Our opinion on the remuneration report
We have audited the remuneration report included in pages 50 to 78 of the directors’ report for the year
ended 27 June 2020.
In our opinion, the remuneration report of Super Retail Group Limited for the year ended 27 June 2020
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the remuneration
report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the remuneration report, based on our audit conducted in accordance with Australian
Auditing Standards.
PricewaterhouseCooopers
Paddy Carney
Partner
Brisbane
24 August 2020
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SHAREHOLDER INFORMATION
For the period ended 27 June 2020
SHAREHOLDER INFORMATION (continued)
For the period ended 27 June 2020
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The shareholder information set out below was applicable as at 17 August 2020.
C.
Substantial shareholdings
Number of Shareholders
There were 13,287 shareholders, holding 225,771,702 fully paid ordinary shares.
A.
Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
Range
1-1000
1,001-5,000
5,001-10,000
10,001-100,000
100,001 and over
Total
Ordinary
Shareholders
Percentage of
Shareholders
Performance Rights
holders
Percentage of
Rights holders
7,141
4,911
782
413
40
13,287
53.7%
37.0%
5.9%
3.1%
0.3%
100.0%
-
3
37
43
2
85
-
3.5%
43.5%
50.6%
2.4%
100.0%
As at 17 August 2020, there are two substantial shareholders that the Company is aware of:
Name
REGINALD ALLEN ROWE
UBS GROUP AG
D.
Unquoted equity securities
Ordinary shares
Number held
Percentage of issued
shares
Date of most
Recent notice
65,890,431
11,295,902
29.18%
5.02%
29/06/2020
13/08/2020
As at 24 August 2020, there were 1,663,059 unlisted performance rights, granted to 85 holders, over unissued ordinary shares in the
Company.
E.
Voting rights
The voting rights relating to each class of equity securities is as follows:
a) Ordinary Shares
On a show of hands at a General Meeting of the Company, every member present in person or by proxy shall have one vote and
upon poll each person present in person or by proxy shall have one vote for each ordinary share held.
There were 624 holders of less than a marketable parcel of ordinary shares.
B.
Equity security holders
The names of the twenty largest holders of quoted equity securities are listed below:
Name
SCA FT PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
CITICORP NOMINEES PTY LIMITED
SCCASP HOLDINGS PTY LTD
SANTOS L HELPER PTY LTD
MR KENNETH JOSEPH HALL
BUTTONWOOD NOMINEES PTY LTD
EQUITAS NOMINEES PTY LIMITED
EQUITAS NOMINEES PTY LIMITED
EQUITAS NOMINEES PTY LIMITED
EQUITAS NOMINEES PTY LIMITED
PACIFIC CUSTODIANS PTY LIMITED
AMP LIFE LIMITED
MR ROBERT EDWARD THORN
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
Ordinary shares
Number held
Percentage of
issued shares
b) Options and Performance Rights
Performance Rights and Options do not have any voting rights.
F.
Market buy-back
There is currently no on market buy-back.
64,657,627
50,974,372
28,209,347
17,129,021
13,023,731
5,147,706
4,496,989
2,782,614
1,232,804
904,246
777,143
736,247
706,997
648,346
625,298
611,876
549,475
541,531
474,607
381,033
28.64%
22.58%
12.49%
7.59%
5.77%
2.28%
1.99%
1.23%
0.55%
0.40%
0.34%
0.33%
0.31%
0.29%
0.28%
0.27%
0.24%
0.24%
0.21%
0.17%
194,611,010
86.20%
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Corporate
Directory
Name of Entity
SUPER RETAIL GROUP LIMITED
ABN
81 108 676 204
Company Secretary
Ms Rebecca Farrell
Principal Registered Office
6 Coulthards Avenue
STRATHPINE QLD 4500 Australia
Telephone:
Facsimile:
+61 7 3482 7900
+61 7 3205 8522
Website Address
www.superretailgroup.com.au
Securities Exchange
Super Retail Group Limited (SUL) shares
are quoted on the Australian Securities
Exchange
Share Registry
Link Market Services
Level 12, 680 George Street
SYDNEY NSW 2000 Australia
Telephone:
1300 554 474
+61 2 8280 7100
www.linkmarketservices.com.au
Auditors
PricewaterhouseCoopers
Financial Calendar
Key dates for shareholders(1)
Annual General Meeting (2)
Final Dividend Ex-Date
Final Dividend Record Date
28 October 2020
1 September 2020
2 September 2020
Full Year DRP Election Date
Full Year Dividend
Payment Date
Interim Results
Announcement
3 September 2020
2 October 2020
17 February 2021
Interim Dividend Ex-Date
Interim Dividend
Record Date
Interim DRP Election Date
25 February 2021
26 February 2021
1 March 2021
Interim Dividend
Payment Date
2 April 2021
(1)
If there are any changes to these dates, the Australian Securities
Exchange will be notified accordingly.
(2) The 2020 Annual General Meeting of the Shareholders of
Super Retail Group Limited will be held virtually. Further details are
available on the ASX and our website at:
https://www.superretailgroup.com.au/investor-centre/AGM2020.aspx
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Notes
I N S P I R I N G Y O U T O L I V E
Y O U R P A S S I O N
ABN: 81 108 676 204
www.superretailgroup.com.au