20
21
ANNUAL
REPORT
Inspiring you to
live your passion
ABN: 81 108 676 204
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C O N T E N T S
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Chair’s message
CEO’s message
About us
Performance highlights
Our strategy
Helping our communities in challenging times
Our brands
Supercheap Auto
rebel
BCF
Macpac
Board of Directors
Executive Leadership Team
Our team
Directors’ Report
Remuneration Report (Audited)
Financial Statements
Shareholder Information
Corporate Directory and Financial Calendar
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21 4
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
5
CHAIR’S
MESSAGE
DEAR SHAREHOLDERS
The 2021 financial year was a demonstration of Super
Retail Group at its best, underlining the benefits of a
sustainable business strategy that remains robust in a
volatile world.
This past year was a difficult and challenging time
for everyone, but in Super Retail Group’s ongoing
response to the COVID-19 pandemic we displayed the
agility, innovation and resilience required to operate
successfully in an uncertain external environment.
When I wrote to shareholders in last year’s annual
report, the health and economic crisis was still
unfolding. While uncertainty remains and the impact
of the pandemic will play out for some time yet,
Super Retail Group has continued to perform strongly
thanks to our resilient omni-retail strategy, strong
leadership and engaged team members.
The $203 million equity raising in July 2020, completed
with strong support from retail and institutional
including our founder and major
shareholders,
shareholder Reg Rowe, helped position the Group for
success. It allowed us to invest in both our people and
the infrastructure needed to continue delivering our
omni-retail strategy despite the uncertainty created
by COVID-19. The Group entered the 2022 financial
year with a conservative balance sheet and no
bank debt.
As consumer trends accelerated the shift towards
online and became embedded in customer behaviour
across Australia and New Zealand, our supply chain
and distribution networks were bolstered and
enhanced, flowing through to a strong operational
performance and a record financial result.
The Group’s result and robust financial position
has supported the Board’s decision to determine a
fully franked final dividend of 55.0 cents per share.
The total dividend for the 2021 financial year is
88.0 cents per share. The total dividend represents a
full year payout ratio of 65 per cent, in line with the
Group’s policy.
On behalf of shareholders, the Board also remains
focused on the ethical and sustainable stewardship
of all aspects of the Group’s activities. At Super Retail
Group we are determined to make a constructive
contribution to society and have a positive impact in
the communities in which we operate.
With a rapidly evolving external environment, the
Group is reviewing its Vision, Mission and Values to
ensure they remain relevant to team members and
other stakeholders. In the time since our Values were
first articulated, the Company has transitioned to an
omni-retailer with four core brands and employs a
larger and more diverse group of team members. The
Board wants to be satisfied that these statements of
intent remain firmly aligned with the ambition of the
organisation.
Robust environmental, social and governance
practices continue to be an area of focus for the
Board and leadership team.
As a Group, our business activities are increasingly
conducted in a manner that aligns with the transition
to a lower carbon footprint and ESG risk management
is now entrenched as a routine component of the
Board’s accountabilities.
Any review of the past 12 months must call out the
passion and dedication of our team members. Their
commitment and capability is the open secret behind
this organisation’s success. I am constantly impressed
by our team members, with frequent accounts of
their determination, innovation and ingenuity in
getting the job done, confirming the depth of our
talented and engaged workforce. We will continue to
invest in our team members because we understand
how integral they are to our growth.
Given the strong corporate performance during
one of the most challenging external environments
in our time as a listed company, the leadership of
our Managing Director and Chief Executive Officer
Anthony Heraghty can only be described as first-
class. Despite the external uncertainty, Anthony has
ensured the business continues to focus on executing
our strategy, creating a culture of high performance,
creativity and engagement. Strong leadership from
Anthony and his leadership team, and an emphasis
on more deeply understanding our customers has
delivered enviable sales growth.
The stewardship of the Board has helped strengthen
the Group and positioned it to create long-term
value. The Board is diligent and dedicated in fulfilling
its responsibilities guiding the business on behalf of
shareholders and I take this opportunity to thank my
fellow directors for their sound advice and counsel.
Over the course of the financial year, Diana Eilert
announced her retirement as a Non-Executive Director
after six years on the Board. The Board thanks Diana for
her contribution and service to shareholders, particularly
as Chair of the Human Resources and Remuneration
Committee. We are well advanced on a process to
replace Diana with an experienced director who will
complement the diversity of expertise on the Board.
Although the year ahead will be marked by continuing
uncertainty, the Board and leadership team have a clear
strategy to ensure the Group is positioned to deliver
sustainable success. With the energy and commitment
of our team members underpinning the business, I am
confident Super Retail Group will continue to create
value for our shareholders.
Thank you for your continued support.
Sally Pitkin AO
Chair
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21 6
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
7
CEO’S
MESSAGE
DEAR SHAREHOLDERS
Despite continuing aftershocks
the COVID-19
pandemic over the past 12 months, I am pleased to report
that your company exceeded performance targets and
delivered a record sales result in FY21.
from
Our omni-retail strategy and operational flexibility combined
with the commitment of the company’s dedicated team
members helped Super Retail Group deliver more than
$3.45 billion in sales for the first time. This is a significant
achievement given Australia and New Zealand continued to
face lockdowns and movement restrictions as governments
sought to contain COVID-19 outbreaks.
On behalf of the executive team, I offer my sincere thanks to
the 14,305 team members in the Super Retail Group family.
They have risen above every challenge thrown at them
over the past 12 months and worked tirelessly to meet our
customers’ needs.
The foundation of our strong performance was built around
a strategy of boosting inventories to meet anticipated
increases in customer demand and re-directing our efforts
to meet elevated demand in our online sales channels.
On inventories, we shipped 54 per cent more containers
(TEUs) compared to the previous year to guarantee supplies
and overcome global logistical challenges related to the
pandemic. We also reduced costs and complexity within
our supply chain and information technology infrastructure.
Our strategy enabled us to capitalise on the rapid growth
in online sales and the expanded appetite of customers
for DIY, outdoors and health and wellbeing products. The
results - delivered against the backdrop of economy-wide
COVID-19 impacts across Australia and New Zealand -
confirm that our business strategy is resilient and delivering
a real competitive advantage for the Group.
STRONG FINANCIAL PERFORMANCE
Given the ongoing challenges of COVID-19, we were very
pleased with the Group’s financial performance. Key
features of the full-year financial performance for the
52 weeks to 26 June 2021 included:
• Total Group sales of $3.45 billion – up 22 per cent
• Group like-for-like sales growth of 23 per cent
• Online sales of $415.6 million – up 43 per cent
Segment EBIT of $476.8 million – up 80 per cent
•
Segment PBT of $435.8 million – up 108 per cent
•
•
Statutory NPAT of $301.0 million – up 173 per cent
• Normalised NPAT of $306.8 million – up 107 per cent
• Basic EPS of 133.4 cents – up 139 per cent
•
Fully franked final dividend of 55.0 cents per share.
At the end of FY21, the Group had no bank debt and more
than $242 million in cash on the balance sheet.
FOUR POWERFUL BRANDS
Our four core brands continue to maintain strong,
established positions in attractive and growing lifestyle
categories.
In FY21, Supercheap Auto, rebel, BCF and Macpac all recorded
significant sales growth as Australians and New Zealanders
embraced domestic tourism, DIY vehicle maintenance and
FY21 sales
($m)
Sales
growth
Like-for-
like sales
growth
Online
sales
growth
Supercheap Auto
$1,308.8
16.9%
16.4%
rebel
BCF
Macpac
$1,197.0
15.3%
17.5%
$797.7
49.1%
48.0%
$153.4
16.3%
14.2%
31%
36%
90%
38%
more outdoor physical activity. The introduction of Macpac
products to our rebel and BCF stores exceeded expectations,
driving sales growth and raising the profile of the brand.
ONLINE SALES MEETING CUSTOMER DEMAND
The channel shift to online sales, which accelerated during
the COVID-19 lockdowns in FY20, continued over the past
12 months.
Group online sales
increased by 43 per cent to
$415.6 million, representing 12 per cent of Group sales
compared to 10 per cent in the previous financial year.
Click & Collect, which leverages the strength of our 698
stores and constitutes our most profitable online channel,
represented 46 per cent of Group online sales.
While the overwhelming majority of our loyal customers
continue to use stores to engage with the business, it is
clear that the channel shift to online is now a permanent
feature of the retail landscape in Australia and New Zealand.
Our continued evolution from a bricks and mortar retailer to
an omni-retailer means we are well placed to successfully
navigate the transition to increased digital sales.
A STRONG STORE NETWORK
Our network of 698 stores continued to be the backbone
of the business.
Despite the impact of COVID-19 on foot traffic, 94 per cent
of sales during the year involved a store visit.
We continue to invest in our store network, with upgrades
and refurbishments delivering robust sales increases.
The new rebel rCX format with a focus on key categories
of basketball, football, fitness and kids proved highly
attractive to customers while improvements to Supercheap
Auto stores, including the expansion of ‘do-it-for-me’
service spaces, boosted revenue. Favourable dynamics in
the commercial property sector also enabled us to secure
improved terms on many of our lease renewals during
the year.
OUR STRATEGY IS ON TRACK
sales performance during
the financial year
The
demonstrates that our strategy is resilient and delivering a
significant dividend for the business. The Group’s strategic
focus remains on:
• Growing the four core brands
Leveraging closeness to our customer
•
• Connecting our omni-retail supply chain
•
Simplifying the business
• Excelling in omni-retail.
The current uncertain outlook for retail trading conditions
underscores the importance of our clear business plan.
The strategy has enabled us to take advantage of changing
consumer trends and invest further in our omni-retail
execution to position the business for future success.
CUSTOMER LOYALTY IS KEY
Our large and loyal customer base continued to grow
over the past 12 months, in line with our strategic goal of
building stronger and closer personal relationships with our
customers.
We are very pleased with the growth in this area. We now
have eight million active club members across our four core
brands, an increase of 22 per cent on the previous financial
year. Combined, our club members contributed 63 per cent
of total sales and provide the Group with a key competitive
advantage.
With significant migration to online, customer satisfaction
levels have improved with average club member NPS
increasing to 62.6, up 1.9 per cent on pcp.
AN ENGAGED AND CAPABLE TEAM
This year’s record result is a credit to our capable and
passionate team members. Their dedication to the business
and our customers is a key driver of our sales performance
and strong customer satisfaction levels in FY21.
Health, safety and wellbeing remains a priority for the
business and we are committed to a zero-harm workplace
for our team members. Our focus on manager-led safety
conversations, mental health, identifying and assessing key
risks, line accountability and implementing initiatives to
reduce risks, including those related to mobile plant and
manual handling, helped reduce injury rates.
We achieved a Total Recordable Injury Frequency Rate
(TRIFR) of 9.43 in FY21, a 24 per cent reduction on the
previous year. While this is an improvement, there is no
sense of complacency and we continue to look at how we
can work together to improve outcomes for team members
and the wider community.
We also continue to focus on gender balance across the
organisation as part of our commitment to gender equality
and a diverse and inclusive workforce. In FY21, female
representation on our Board was 29 per cent, 27 per cent
at the executive leadership level and 39 per cent for women
in senior leadership. Recent appointments have further
improved this balance and while we still have work to do
to reach our goal of gender equality by 2025, we are firmly
on the right path to building a more representative and
stronger business.
The remediation program for the historical underpayment
issues identified and proactively reported to the Fair Work
Ombudsman is substantially complete with $52.4 million
in back payments paid to more than 26,488 current and
former team members. Super Retail Group continues
to engage with the Fair Work Ombudsman in relation to
these matters.
A SUSTAINABLE FUTURE
Sustainability is at the core of our business decision-
making and in FY21 we made progress across the Group on
implementing more sustainable practices.
Our carbon emissions (scopes one and two) across the
Group declined by seven per cent and our recycling
rates (for all waste material in stores, support offices and
distribution centres) remained at 65 per cent, in line with
FY20 levels. Our brands continued to help customers reduce
their impact on the environment with Supercheap Auto
recycling a record 1,068,200 million litres of oil and 85,967
car batteries, and rebel recycling more than 37,000 pairs of
shoes through its in-store collection.
BCF contributed $300,000 and customers raised a further
$392,850 to support OzFish in protecting and restoring
waterways and fish habitats. Through its Fund for Good,
Macpac gave grants worth more than $376,000 to over 40
organisations.
The Group was included in the SAM Sustainability Yearbook
2021 as a Sustainability leader in the retail sector and
increased its Dow Jones Sustainability Index score to 60,
placing it in the top quartile within the retail sector.
The Group’s performance in FY21, despite one of the most
challenging retail environments in our history, underscores
that our business strategy is working, fit-for-purpose and
delivering significant long-term value for our shareholders.
The Group’s four core brands have established market
positions in the fast-growing auto, sports, leisure and
outdoor categories and our
is
underpinned by eight million active club members. While
the outlook for retail trading conditions remains uncertain,
we are confident that demand in our lifestyle categories
will continued to be supported by growing trends towards
fitness, wellbeing and enjoying the great outdoors.
loyal customer base
We are in a very strong position to continue inspiring our
customers to live their passion, and we remain focused
on growing our market share to help deliver value for our
shareholders.
Anthony Heraghty
Group Managing Director and
Chief Executive Officer
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21 8
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
9
ABOUT
US
14,305
TEAM
MEMBERS
698
STORES
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 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 eight million active loyalty club members with the option to experience our brands whenever
and however they choose – whether that’s through our network of 698 stores or via our digital capabilities, which we continue to enhance.
OUR BRANDS
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,
as well as products for travel,
touring, outdoors, garage and
the shed.
Macpac’s apparel and
equipment has inspired a
life outdoors since 1973.
Designed, tested and
proven in the ultimate
outdoor test lab – New
Zealand – our wide
range of products are
made by adventurers, for
adventurers.
rebel helps our customers
chase their sporting dreams.
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, with the
best service and products
empowering every customer
to answer the call of sport.
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.
4
SUPPORT
OFFICES
8
DISTRIBUTION
CENTRES
3
COUNTRIES OF
OPERATION
Australia, New Zealand and China
OUR VISION
Inspiring you to live your passion – whether that’s proudly looking after your 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 sustainable performance of the Group, taking into account the interests of our
stakeholders, as well as the communities and environments in which the Group operates.
The Group has complied with the ASX Corporate Governance Council’s Principles and
Recommendations (4th Edition) for the entire reporting period. Further details are set out
in the Group’s Appendix 4G and Corporate Governance Statement, authorised for issue
by the Directors, 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/
ABOUT THIS REPORT
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 31 to 67. All press releases, reports and
other information are available on our Investors and Media menu on our website:
https://www.superretailgroup.com.au/.
This report may contain forward-looking statements, including statements of current
intention, opinion and expectation regarding the Group’s present and future operations,
possible future events and future financial prospects (including statements related to the
ongoing impact of the COVID-19 pandemic). These forward-looking statements are based
on the information available as at the date of this report and they are, by their nature,
subject to significant uncertainties, many of which are outside of the control of the Group.
Actual results, circumstances and developments may differ materially from those expressed
or implied, and the Group cautions against reliance on any forward-looking statements in
this report.
OUR VALUES
Our culture is underpinned by five values that guide the way we operate and behave.
PASSION
OPENNESS
INTEGRITY
CARE
DISCIPLINE
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SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
11
PERFORMANCE
HIGHLIGHTS
$3.45b
GROUP SALES UP 22%
23%
GROUP LFL
SALES GROWTH
$476.8m
SEGMENT EBIT
UP 80%
$435.8m
SEGMENT PBT
UP 108%
$306.8m
NORMALISED
NET PROFIT
AFTER TAX
$301.0m
STATUTORY
NPAT
88.0¢
DIVIDEND PER
SHARE, FULLY
FRANKED
CUSTOMER LOYALTY AND
OMNI-RETAIL EXECUTION
ONLINE SALES GROWTH
43%TOTAL GROUP ONLINE SALES GROWTH
31%
SUPERCHEAP AUTO
>1.6m
NEW ONLINE CUSTOMERS
56%
CLICK & COLLECT SALES
GROWTH
34%
HOME DELIVERY SALES
GROWTH
36%
REBEL
90%
BCF
38%
MACPAC
CHANNEL
88% IN-STORE
SALES
HOME
DELIVERY
6%
CLICK &
COLLECT
6%
% OF TOTAL SALES
CUSTOMER LOYALTY
8.0m
ACTIVE CLUB MEMBERS
62.6
AVERAGE CUSTOMER
NPS
63.2%
ACTIVE CLUB MEMBER
% OF GROUP SALES
54%
HOME DELIVERY % OF
TOTAL ONLINE SALES
46%
CLICK & COLLECT % OF
TOTAL ONLINE SALES
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SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
13
OUR
STRATEGY
STRATEGIC DRIVERS
GROWING
ANNUAL
CUSTOMER
VALUE
PRIMARY
VALUE
LEVERS
BEING AN
EFFICIENT
OMNI-RETAILER
ENSURING
ORGANIC
GROWTH AND
CAPITAL
DISCIPLINE
GROW THE FOUR CORE BRANDS: Focus on four core brands, key categories and
leveraging scale.
1
FOCUS AREAS
• Align capital investment to grow our four
core brands
• Develop organic brand strategies,
leveraging consolidated competitive
advantage
• Refresh private brand strategy
FY21 OUTCOMES
• Expansion of successful rCX concept in Doncaster
to Parramatta, Miranda, Chermside and Chadstone
• Progressed five-year brand strategy
• Ongoing store network optimisation
• Macpac range expanded successfully to BCF
and rebel
• New and refreshed ranges across the private
brand portfolio and improved brand execution
in BCF
LEVERAGE CLOSENESS TO OUR CUSTOMER: Building a personalised relationship
with our customers, capitalising on data and insights.
2
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
FY21 OUTCOMES
• Embedding behavioural segmentation across the
value chain in all brands
• Completion of customer research and loyalty club
reviews, leading to the updated Customer Value
Propositions for all brands
• Expansion of pricing strategy
CONNECTED OMNI-RETAIL SUPPLY CHAIN: Continuing to build a fit-for-purpose
integrated supply chain.
3
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
FY21 OUTCOMES
• Progressed Group sourcing optimisation and
five-year supply chain strategy
• Commenced upgrade of the Warehouse
Management System
• Order Management System (OMS) phase one and
International Freight System (IFS) implemented
• Enhanced omni fulfilment network
• Supply chain TRIFR reduced by 62 per cent
SIMPLIFY THE BUSINESS: Becoming a more efficient and effective omni-retailer
through optimising overhead and focusing on customer-facing investment.
4
FOCUS AREAS
• Remove duplication and leverage scale
• KPI alignment and value mindset
• Modernise technology infrastructure to
be fit-for-purpose
FY21 OUTCOMES
• Senior Leadership Team KPIs aligned to Group
strategy and cascaded through the business
Information Services’ five-year strategy in train
including migration to Amazon Web Services
• Team engagement and communication tools
•
in use (Workplace by Facebook)
• Ongoing workforce planning program
EXCEL IN OMNI-RETAIL: Enhancing our customer experience through all touchpoints
along the customer journey.
5
FOCUS AREAS
• Build expertise for our customer-facing
teams, underpinned by team members
as industry experts
FY21 OUTCOMES
• Omni-retail execution continuing including key digital
acceleration elements:
• Web chat: positive conversion rate and average
• Deliver a seamless ‘Super Retailer’
order value impact
experience
• Evolve the store experience
• Fit-finder: delivering sustained Conversion Rate uplift
• Overhauled checkout flow: easier to transact
• Search engine optimisation: increasing source
of revenue
• Further development of Artificial Intelligence for
merchandising
• Enhanced websites with improved navigation
• Continued investment in store experience, particularly
across Supercheap Auto and rebel
14
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
15
Helping our
communities in
challenging times
As customer demand soared during the past 12 months due
to increased participation in DIY maintenance, outdoor
pursuits and health and wellbeing activities, Super Retail
Group went to significant lengths to ensure its customer’s
needs were fulfilled.
Whether it was generators and gas refills for bushfire and
flood-affected customers, meeting the huge demand for
exercise equipment during protracted COVID-19 lockdowns
or assisting a family buying their first tent for a holiday-at-
home, the Group supported its customers throughout a
challenging year.
Meeting this record level of demand required a step-change
in how we managed inventories and serviced our customers.
Our distribution centres moved more than 408,000 pallets -
a 25 per cent increase on the prior year - enabling the four
core brands to have the right products in the right stores for
our customers at the right time.
Our store team members fulfilled Click & Collect orders
at a rapid pace, with sales up 56 per cent on last year.
Our home delivery offer also stepped up, with more
than 1.5 million deliveries completed in the reporting
period. Our dedicated team
in the customer care
centre also stepped up to meet the increased demand
and solved more than 400,000 calls while introducing
new technology such as webchat in November 2020,
which facilitated more than 71,000 interactions in the
financial year.
With the ongoing challenges faced by many communities,
our products and our team helped tens of thousands of
Australians and New Zealanders to continue to live their
passions while staying safe and active.
The Group delivered a record $3.45 billion in sales as our
customers built home gyms, kept their cars on the road and
re-embraced the great Australian road-trip holiday.
We imported more than 15,000 containers (TEUs) - a
54 per cent increase on the previous year - to provide
sufficient stock that would meet demand, and we were able
to circumvent delays in COVID-19 affected supply chains.
Our customers took to the great outdoors in droves in
response to restrictions around interstate and international
travel. As an example, sales of BCF’s tents grew more than
55 per cent.
With the continuing turmoil of natural disasters and the
pandemic, the Group acknowledged the critical role played
by emergency services personnel in responding to natural
disasters and the COVID-19 pandemic.
Our four core brands joined other retailers in supporting the
second First Responders Day – offering discount privileges
for healthcare and emergency services personnel who went
above and beyond during the pandemic and the natural
disasters that caused so much devastation in Australia and
New Zealand.
Super Retail Group recognises that sustainable value
creation is only possible if we play a positive role in the
communities we serve.
During FY21, Macpac’s ‘Fund for Good’ program awarded
grants worth over $376,000 to more than 40 Australian
and New Zealand-based organisations. BCF’s support of
OzFish continued with $300,000 being contributed to the
protection and restoration of waterways and fish habitats
and a further $392,850 being raised by customers.
To ensure Super Retail Group continues to create value, the
business encourages all team members to act in a manner
that benefits the communities in which we operate.
An awareness of community expectations, and how and
they are constantly evolving, is necessary to continually
readjust the way we work. Society is demanding more of the
corporate sector, raising the bar on what is the right way of
going about business.
Super Retail Group understands that the best way to
understand the communities in which it operates is to be
embedded and active in the community. Drawing our team
members from our communities, using local partners and
suppliers, participating in community programs, all help us
build a deep understanding of our customers needs.
And it assists the business in responding swiftly at times
of need.
When our customers are facing serious challenges, Super
Retail Group has established a track record of working hard
to be there for them. It’s a reputation we are determined to
retain. It requires commitment and enormous reservoirs of
energy and enthusiasm to take that extra step, make that
extra call to ensure the customer is satisfied.
We acknowledge this would be impossible to achieve
without the dedication and commitment of our indefatigable
team members. Without their support and drive, the Group
would have been unable to deliver such achievements
across such a challenging year.
$300,000
BCF SUPPORT FOR OZFISH
408,000+
PALLETS DELIVERED
$376,000
MACPAC ‘FUND FOR
GOOD’ GRANTS
400,000+
CALLS VIA OUR
CUSTOMER CARE CENTRE
16
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
17
OUR
BRANDS
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, as well as
products for travel, touring, outdoors, garage and the shed.
327
STORES
2.3m
64
ACTIVE CLUB MEMBERS
AVERAGE ACTIVE
CLUB MEMBER NPS
IN-STORE SERVICES
Helping our customers
enjoy their drive
The Supercheap Auto Services program provides high-
value fitments and services to complement a wide
range of common automotive products sold in store.
These services include checks and replacement of
batteries, wiper blades, bulbs, protectors and covers.
Our team are trained to help the customer choose the
correct product and, in many cases, fit or apply the
product for the customer. The program is available
in 318 stores, with 100 of those stores offering
an extended range of fitments and services, such as
roof racks.
In FY21, the team increased its focus on this offer,
delivering almost 725,000 service solutions to
our Supercheap Auto customers. The services
included fitting 340,000 wiper blades and arms,
replacing 107,000 bulbs, replacing and recycling
32,000 batteries, and facilitating 206,000 automotive
paint requests.
Market data has provided us with a clear picture
of the two distinct customer segments most likely
to participate and benefit from this offer. The first
segment is the ‘do-it-for-me’ customer, who see the
service as a low-cost alternative to solving problems
usually handled by their mechanic. The second
segment is the traditional ‘do-it-yourself’ customer,
who could do it themselves but instead choose the no-
fuss convenience of getting it done while they shop.
A key priority of the program is the safety of our team
and customers. Dedicated Service Areas (DSAs) are
in nearly a third of all Supercheap Auto stores and
provide a safe and secure location for fitments and
services to be undertaken. These areas provide space
for a broader range of fitments that would not be
possible in a traditional carpark environment.
Continued expansion of the DSA network is key to
offering the extended range of services in-store, to
meet the needs of local customers and their vehicles.
During the pandemic, we also implemented a contact-
free fitment solution, so our team could continue to
provide this service while keeping a safe distance from
each other and the customer.
The services program is continuing to expand in range
and volume as we incorporate the latest customer
insights and market data into the offer. In FY21, the
core services (bulbs, blades and batteries) achieved
an NPS result of 80, which is 15 points higher than
our average active club member. Given the critical
role services play in the overall shopping experience
for our customer, we are committed to continuing to
grow the services program as our customers’ needs
and vehicles change.
16.9%SALES GROWTH
14.7%PBT MARGIN
46%
ACTIVE CLUB MEMBERS
% OF TOTAL SALES
6%
CLICK & COLLECT
% OF TOTAL SALES
85%
BRAND AWARENESS
Data: Stellar Market Research;
Australia FY21
31%
ONLINE SALES GROWTH
37%
ACTIVE CLUB
MEMBER GROWTH
92%IN–STORE
% OF TOTAL SALES
2%HOME DELIVERY
% OF TOTAL SALES
18
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
19
OUR
BRANDS
rebel helps our customers chase their sporting dreams. 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, with the best service and products empowering every customer to answer
the call of sport.
153
STORES
3.2m
59
ACTIVE CLUB MEMBERS
AVERAGE ACTIVE
CLUB MEMBER NPS
15.3%SALES GROWTH
13.9%PBT MARGIN
68%
ACTIVE CLUB MEMBERS
% OF TOTAL SALES
5%
CLICK & COLLECT
% OF TOTAL SALES
94%
BRAND AWARENESS
Data: Stellar Market Research;
Australia FY21
36%
ONLINE SALES GROWTH
13%
ACTIVE CLUB
MEMBER GROWTH
84%IN–STORE
% OF TOTAL SALES
11%HOME DELIVERY
% OF TOTAL SALES
Bringing the
rebel brand
promise to life
The rebel team continues to inspire Australians to
chase their sporting dreams and passions through the
rebel customer experience (rCX) store program and
roll-out.
Following the opening of the first rCX store in
Doncaster in March 2020, the team further progressed
the personalised concept with the expansion and
refurbishment of key sites including Miranda and
Parramatta
in
Queensland, and Chadstone in Victoria.
in New South Wales, Chermside
Despite ongoing volatility with
the COVID-19
pandemic, the new concept stores are showing strong
sales growth with almost 50 per cent increase in
sales compared to the previous year. The key focus
categories of women’s apparel, senior footwear, kids,
football, basketball, and fitness are all performing
strongly, providing confidence for future roll-outs.
The rCX stores offer customers an innovative and
immersive shopping experience, using a combination
of technology and personalised interactions to create
a truly unique experience. From shooting hoops and
playing virtual interactive games, to getting a fellow
athlete’s advice about the perfect running shoe,
the rCX concept positions rebel as a frontrunner in
sporting expertise and experiences.
The introduction of a football experience space, a
basketball court and a showcase of LeBron James’
products is providing customers a memorable retail
experience and a chance for sporting fanatics to
have fun with friends. The passion and expertise
from the team on the floor, combined with the range
and presentation of products on offer in rCX stores,
creates a unique connection with the customer. Each
store includes bespoke features to cater to the local
community and is designed to provide a balance
between retail and experience, to maximise the
customer journey and return on floorspace.
The concept, designed in partnership with Nike and
other key trade partners, was recognised at Inside
Retail’s 2021 Retailer Awards with rebel winning the
Best Store Design/Concept of the Year category, as
well as the Customer Experience of the Year (Medium
to Large Business) award.
The next step for rebel is to continue to innovate,
listen and respond to customer feedback and expand
the rCX strategy across key stores around the country.
20
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
21
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.
142
STORES
2.0m
63
ACTIVE CLUB MEMBERS
AVERAGE ACTIVE
CLUB MEMBER NPS
49.1%SALES GROWTH
12.1%
PBT MARGIN
84%
ACTIVE CLUB MEMBERS
% OF TOTAL SALES
6%
CLICK & COLLECT
% OF TOTAL SALES
76%
BRAND AWARENESS
Data: Stellar Market Research;
Australia FY21
90%
ONLINE SALES GROWTH
29%
ACTIVE CLUB
MEMBER GROWTH
89%
IN–STORE
% OF TOTAL SALES
5%
HOME DELIVERY
% OF TOTAL SALES
Better for our
customers –
new formats,
new locations
The changing retail
landscape for the outdoor
category continued in FY21, with an increase in
customer participation in everything boating, camping
and fishing. In response to significantly increased
participation in these recreational activities, BCF
began trialling a series of new brand and category
initiatives, regional formats and store locations.
A core initiative catering to this customer growth is the
expansion of the BCF store network to include new
store formats (high-fulfilment stores) and regional
locations (smaller format stores).
The purpose of this expansion is to reach more
customers and become even more relevant to our
loyal customers in each location.
There are now six high-fulfilment stores in the
BCF network, such as Everton Park in south-east
Queensland, that cater to both the local and online
customers with an active range that is over 45 per
cent greater than a standard store.
Smaller format stores in key locations such as Echuca
in Victoria, Ayr in north Queensland and Victor
Harbor in South Australia are also proving to be a
successful format, delivering sales intensity well above
fleet average.
The Echuca store is about 35 per cent smaller than the
traditional BCF store with a localised range catering
for customers with a tailored freshwater fishing
range and reduced offer on saltwater gear. Trading
since November 2020, BCF Echuca has upper quartile
performance in sales density and profit contribution.
The 4WD and caravan categories have been showing
accelerated demand for a period of time. In response
to this growth, significant in-store improvements were
made in the financial year to cater for this burgeoning
demand. The overhaul of the in-store offer for these
two categories included new purpose-built fixtures,
improved signage, changed positions in store and eye-
catching display samples for customers. Amplification
of these categories in a trial store in FY21 delivered
substantial growth, and plans for a further 25 stores
to join the rollout are well progressed.
BCF Glendale in New South Wales has one of the
largest showrooms in the BCF network with a 1680
sqm showroom and is one of the first stores to
showcase the new 4x4 amplification. The site is a
replacement store and an example of BCF’s property
plan to relocate key stores to a superior site with
improved car parking and customer access.
BCF will continue to progress these new initiatives,
which are designed to accelerate the growth of key
categories, highlight key in-store brands, and meet
growing customer participation through tailored, local
offers as well as online demand.
22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
23
OUR
BRANDS
Macpac’s apparel and equipment has inspired a life outdoors since 1973. Designed, tested and proven
in the ultimate outdoor test lab – New Zealand – our wide range of products are made by adventurers,
for adventurers.
76
STORES
0.5m
68
ACTIVE CLUB MEMBERS
AVERAGE ACTIVE
CLUB MEMBER NPS
Macpac range
extended to BCF
and rebel
Macpac is New Zealand’s original technical outdoor
brand. The apparel and equipment we design has
inspired a life outdoors since 1973, and our journey
has been one of creation and innovation since day
one. Macpac has a proud heritage rooted in adventure
and a devoted following that spans generations. Our
products are built to stand the test of time, and they
continue to support explorers in some of the world’s
harshest environments.
Starting out as a wholesale company, Macpac initially
served domestic and international markets across
New Zealand, Australia, Japan and Europe using third-
party retailers. In 2008, Macpac expanded into retail
with its first flagship store.
In FY21, we embraced a new concept to grow brand
awareness and introduce our wide range of products
to a different type of customer. Looking beyond the
classic adventurer – and those who love travel and
the outdoors – Macpac extended its range to new
customers who wear the outdoor look casually, with
a trial of select Macpac apparel in four Tasmanian
BCF stores during winter 2020. The trial showed early
signs of success for the BCF stores as well as the two
Tasmanian Macpac stores, with 33 per cent like-for-like
sales growth in the Macpac stores attributed to the
growth in brand awareness. The trial also improved
Macpac online sales in Tasmania.
The trial showed that brand awareness and sales
could be driven by using Super Retail Group’s existing
brands instead of relying on third-party partners. As
a result, two select winter ranges were rolled out
to 53 Australian BCF stores in April, followed by 99
Australian rebel stores in May.
Virtual training was undertaken by the brand teams
and Macpac fixtures were installed in BCF to display
the new stock. The Macpac apparel range delivered
more than 35 per cent of total apparel sales in those
BCF stores in FY21. BCF has also ordered a select
Macpac range for the upcoming summer season.
As a result of these changes, Macpac recorded
significant sales growth as
its products were
introduced to new customers experiencing the quality
and comfort of our apparel for the first time. We are
confident the increased exposure of the brand will
help to attract and retain a new generation of devoted
supporters, and adventurers.
16.3%SALES GROWTH
11.0%
PBT MARGIN
66%
ACTIVE CLUB MEMBERS
% OF TOTAL SALES
2%
CLICK & COLLECT
% OF TOTAL SALES
86%
BRAND AWARENESS
Data: Stellar Market Research;
New Zealand FY21
38%
ONLINE SALES GROWTH
6%
ACTIVE CLUB
MEMBER GROWTH
79%
IN–STORE
% OF TOTAL SALES
19%HOME DELIVERY
% OF TOTAL SALES
24
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
25
BOARD OF
DIRECTORS1
Appointed
Committees
Experience
Other Roles
SALLY PITKIN AO
Independent
Non-Executive Chair
ANTHONY HERAGHTY
Group Managing Director
and Chief Executive Officer
REG ROWE
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
Chair – 23 October 2017
Board – 1 July 2010
Chair of the Nomination
Committee, Member (ex-officio)
of the Human Resources and
Remuneration Committee
Sally has 25 years’ experience
as a Non-Executive Director in
the listed, private, public and
non-profit sectors, including
experience in international
markets, and 17 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 former 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
13 June 2017
19 December 2017
31 March 2020
31 March 2020
Member of the Nomination
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.
Chair of the Audit and Risk
Committee, Member of
the Human Resources and
Remuneration Committee
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.
Chair of the Human Resources
and Remuneration Committee,
Member of the Audit and Risk
Committee and Nomination
Committee
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.
Member of the Audit and
Risk Committee
Member of the Audit and
Risk Committee
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 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
Golf
Hiking, travel and reading
(1) Diana Eilert retired from the Board on 31 January, 2021. A search is underway to identify a new non-executive director.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21Golf, AFL and walkingOcean swimming 26
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
27
EXECUTIVE
LEADERSHIP
TEAM
PAUL BRADSHAW | Managing Director – BCF
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.
JANE KELLY | Chief Human Resources Officer
Jane joined Super Retail Group in July 2016 as Chief Human Resources Officer and is responsible
for the company’s workforce strategy, leadership and capability development, employee relations
and corporate affairs. Through the Group people strategy, she delivers sustainable business
outcomes, with a focus on quality stakeholder engagement. Jane 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. She 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.
ALEX BRANDON | Chief Executive Officer – Macpac
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 25 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.
KATIE McNAMARA | Chief Strategy and Customer Officer
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.
DAVID BURNS | Chief Financial Officer
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.
BENJAMIN WARD | Managing Director – Supercheap Auto
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.
REBECCA FARRELL | Chief Legal Officer and Company Secretary
Rebecca joined Super Retail Group in February 2020 as Chief Legal Officer and Company Secretary,
and is responsible for leading our legal, risk, health and safety, compliance, sustainability,
sustainability 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.
DARREN WEDDING | Chief Supply Chain Officer
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, including nine years based in Asia, working
in a broad array of industries including military, steel manufacturing, FMCG, retail and third party
logistics. 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.
PAUL HAYES | Chief Information Officer1
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.
(1) Mandy Ross will commence in the Chief Information and Digital Officer role on 25 October 2021, following Paul Hayes’ decision to retire.
GARY WILLIAMS | Managing Director – rebel
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21 28
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
29
OUR
TEAM
With more than 14,000 team members across Australia,
New Zealand and China, an engaged, passionate and
capable team is critical to inspiring our customers to live
their passion.
In FY21, we shifted from an annual engagement survey
to a continuous listening, pulse survey that measures
engagement three times a year and focuses on micro-
actions. This shorter, sharper cycle enables our people
leaders to listen more, to learn more and to act with
greater speed. Our first pulse had a participation rate
of 71 per cent with 10,014 responses, and the Group’s
engagement score was 82, which is 5 points above the
Achievers (a global expert in employee recognition and
engagement) industry benchmark.
We continue to invest in two key, digital engagement
platforms – SOULmoments (recognition) and Workplace
(communication). Each month, our team averages 14,351
recognitions and 89 per cent are active on Workplace.
CONSISTENT INVESTMENT IN LEARNING
AND DEVELOPMENT
We are focused on providing consistent learning and
development opportunities to attract, grow and retain
the talent needed to execute our strategy and deliver our
customer promise.
Our SOULlibrary platform underpins a suite of learning
tools, available to all team members, based on a
continuous learning philosophy. Team members can
82%
TEAM MEMBER
ENGAGEMENT
39%
WOMEN IN SENIOR
LEADERSHIP
improve their skills and knowledge when, where and how
it suits them. More than 18,000 hours of learning were
undertaken via this platform in FY21.
Our ‘experts’ program for Supercheap Auto, rebel, BCF
and Macpac retail team members equip our team with
the product and technical expertise required to meet
the needs of our customers. In FY21, there were 22
campaigns rolled out to 11,525 retail team members
delivering more than 40,000 hours of learning.
development
learning programs
experience
is another
Access to accredited
to
important
In the financial year,
our retail team members.
there were 119 Australian
team members who
completed their Certificate III in Retail Operations or
Certificate IV in Retail Management and five New Zealand
team members who gained their Level Four Retail
Management qualification.
offered
FOCUSED ON A SAFE WORK ENVIRONMENT
We care about the physical and psychological health and
safety of our team members, customers, contractors,
business partners and visitors including our heavy vehicle
operations.
This year’s focus has been on mental health, COVID-19,
identifying and assessing key risks, line accountability and
implementing initiatives to reduce risks involved with
mobile plant and manual handling.
We achieved a Total Recordable
Injury Frequency
Rate (TRIFR) of 9.43 in FY21, a 24 per cent reduction
on the previous year. We also recorded a Lost Time
Injury Frequency Rate (LTIFR) of 4.51, a 22 per cent
improvement on the previous year. These results include
both team members and labour hire.
Our response to the COVID-19 crisis remains a closely
monitored risk. An SRG COVID-19 Operations Guide,
containing
information about government controls,
risk assessment, enhanced cleaning methods, mental
wellbeing, remote working,
incident response and
government travel restrictions, has been a critical control
through the period.
In response to the growing awareness about mental
wellbeing, our ‘I Am Here’ program encourages the team
to look out for themselves and others and to create a
supportive work environment for every team member,
every day. More than 1,800 team members have been
actively involved in the initiative.
To further lift our safety maturity the Health and Safety
Governance Framework and Health and Safety Standards
were implemented. To meet our Chain of Responsibility
(CoR) obligations, more than 11,000 team members were
engaged in online training.
DIMENSIONS – MODERN AND
FLEXIBLE ROSTERING
A significant investment in the financial year has been
our new rostering, time, and attendance system. This
system (Dimensions) makes it easier for store managers
to change, build and publish rosters and gives team
members more control to manage their availability
and shifts.
To help prepare for full deployment in FY22, 49 stores
were engaged as pilot stores in FY21, allowing for
improvements to be made prior to
implementing
this change across our network. To support retail
management, comprehensive leadership and system
training was delivered with more than 3,700 hours of
training completed to support managers in all aspects of
rostering their team.
COMMITTED TO DIVERSITY AND FLEXIBILITY
Our commitment to providing an environment that
includes people with diverse values, backgrounds, skills,
experience and needs is a critical component to reflecting
the communities in which we operate.
Our goal remains to achieve gender equality in our Board,
executive and senior leadership teams by 2025.
In the financial year, we initiated a Group Diversity and
Inclusion Committee and launched a Gender Affirmation
policy and plan. We continue to celebrate various diversity
events
International
including Wear
Women’s Day and NAIDOC week.
it Purple Day,
(WGEA) Employer of Choice
(EOCGE) Citation.
We proudly hold the Workplace Gender Equality
for Gender
Agency
In September 2021,
Equality
we will be renewing our application for citation.
Female
at
29 per cent, 27 per cent at the executive leadership level
and 39 per cent for women in senior leadership. Our
2021 Workplace Gender Equality Agency (WGEA) report
is available via the Group’s website.
representation
our Board
on
is
9.43
TRIFR - 138 INCIDENTS
PER MILLION HOURS
WORKED
down 24% YOY
14,351
AVG TEAM MEMBER
RECOGNITIONS
PER MONTH
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21 30
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
31
31
Directors’ Report
Remuneration Report
Financial Report
F O R T H E Y E A R E N D E D
2 6 J U N E 2 0 2 1
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 26 June 2021.
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 AO
(Independent Non-Executive Chair)
A M Heraghty
(Group Managing Director and Chief Executive Officer)
R A Rowe
(Non-Executive Director)
H L Mowlem
(Independent Non-Executive)
P D Everingham
(Independent Non-Executive)
S A Chaplain AM
(Independent Non-Executive)
G T Dunne
(Independent Non-Executive)
Former:
D J Eilert
(Independent Non-Executive) (retired 31 January 2021)
Details of the qualifications, experience and responsibilities of the Directors can be found in the Group’s annual report on pages 24 and 25.
Special Responsibilities of Directors:
Director
Audit & Risk Committee
Nomination Committee
S A Pitkin AO
A M Heraghty
R A Rowe
H L Mowlem
P D Everingham
S A Chaplain AM
G T Dunne
D J Eilert
-
-
-
Chair
Member
Member
Member
-
Chair
-
Member
-
Member
-
-
-
(1) Appointed as Chair on 28 October 2020.
(2) Ceased as Chair on 28 October 2020.
(3) Ceased as a member on 31 January 2021.
1.1
Directorships of listed companies held by members of the Board
Human Resources &
Remuneration Committee
Member (Ex-Officio)
-
-
Member
Chair(1)
-
-
Member(2)(3)
Current Directors:
Director
Listed Company
Directorship
Key Dates
S A Pitkin AO
Super Retail Group Limited
Independent Non-Executive Chair
The Star Entertainment
Group Limited
Link Administration Holdings
Limited
Independent Non-Executive Director
Independent Non-Executive Director
A M Heraghty
Super Retail Group Limited
Group Managing Director and Chief
Executive Officer
Current, appointed 01 July 2010
Appointed as Chair 23 October 2017
Current, appointed 31 July 2014
Current, appointed 23 September
2015
Current, appointed 20 February 2019
R A Rowe
Super Retail Group Limited
Non-Executive Director
Current, appointed 08 April 2004
H L Mowlem
Super Retail Group Limited
Independent Non-Executive Director
Current, appointed 13 June 2017
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
32
32
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
33
33
DIRECTORS’ REPORT (continued)
1.
1.1
Directors (continued)
Directorships of listed companies held by members of the Board (continued)
Current Directors:
Director
Listed Company
Directorship
Key Dates
P D Everingham
Super Retail Group Limited
iCar Asia Limited
Independent Non-Executive Director
Independent Non-Executive Director
Current, appointed 19 December 2017
Current, appointed 1 July 2017
S A Chaplain AM
Super Retail Group Limited
MFF Capital Investments
Limited
Seven Group Holdings
Limited
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Current, appointed 31 March 2020
Current, appointed 21 May 2019
(Chair from 1 August 2019)
Current, appointed 24 November 2015
G T Dunne
Super Retail Group Limited
Independent Non-Executive Director
Current, appointed 31 March 2020
DIRECTORS’ REPORT (continued)
1.
1.3
Directors (continued)
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 AO
A M Heraghty
R A Rowe
H L Mowlem
P D Everingham
S A Chaplain AM
G T Dunne
Number of Ordinary Shares
59,605
66,238
68,517,723
34,286
40,000
5,000
8
2.
Company Secretary
Number of Restricted Shares
Options over Ordinary Shares
-
22,084
-
-
-
-
-
-
-
-
-
-
-
-
Former Director:
Director
D J Eilert
Elders Limited
Domain Holdings Australia
Limited
Former directorships:
Super Retail Group Limited
Listed Company
Directorship
Key Dates
Independent Non-Executive Director
Independent Non-Executive Director
Current appointed 14 November 2017
Current appointed 16 November 2017
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. Details of Ms Farrell’s experience can be found in the Group’s annual report on page 26.
Ms Kelly Head, LLB (Hons) was appointed as additional Company Secretary on 31 May 2021. Ms Head is an experienced Corporate lawyer
with 17 years post qualification experience, including at King & Wood Mallesons, an international bank and Commonwealth Bank of Australia.
Independent Non-Executive Director
Navitas Limited
Independent Non-Executive Director
Former, appointed 21 October 2015
and resigned 31 January 2021
Former, appointed 28 July 2014 and
delisted 5 July 2019
3.
3.1
Operating and Financial Review
Overview of the Group
1.2
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 26 June 2021 is set out below:
Board Meetings
Audit and Risk
Human Resources
and Remuneration
Nomination
Board Sub-
Committee
Meetings of Committees
Total number of
meetings held
S A Pitkin AO
A M Heraghty
R A Rowe
H L Mowlem
P D Everingham
S A Chaplain AM
G T Dunne
D J Eilert(2)
12
4
4
1
Attended
Eligible(1)
Attended
Eligible(1)
Attended
Eligible(1)
Attended
Eligible(1)
Attended
2
Eligible(1
)
12
12
12
12
12
12
12
8
12
12
12
12
12
12
12
8
4
4
4
4
3
3
4
2
-
-
-
4
4
4
4
-
4
4
4
4
4
2
4
3
4
-
-
4
4
-
-
3
1
-
1
-
1
-
-
-
1
-
1
-
1
-
-
-
2
2
-
2
-
-
-
-
2
2
-
2
-
-
-
-
(1) Number of meetings the Director was eligible to attend during the time the Director held office in the year.
(2) Ceased as a Director on 31 January 2021.
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.
For further details on strategy refer to pages 12 to 13 of the Group’s annual report.
3.2
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 and online growth
Strength of the balance sheet
(a)
Group Results – Post AASB16 Leases
Revenue from continuing operations
Statutory profit for the period after tax
Segment earnings before interest and taxes (EBIT)
Segment earnings before taxes (PBT)
Normalised net profit after tax (NPAT)
Operating cash flow
Earnings per share (EPS) – basic (cents)
Dividends per share (cents)
2021
$m
3,453.1
301.0
476.8
435.8
306.8
600.0
133.4
88.0
2020
$m
2,825.2
110.2
265.0
209.9
148.2
610.7
55.8
19.5
The Group delivered a record full year result driven by sales, higher gross margin and disciplined cost management. The Group achieved
total sales growth of 22.2 per cent which included significant like-for-like sales growth across all divisions. The 22.2 per cent sales growth for
the Group translated into a 45.6 per cent increase in Segment EBITDA, a 79.9 per cent increase in Segment EBIT and a 107.0 per cent increase
in normalised net profit after tax.
Profit for the period was $301.0 million compared to $110.2 million in the prior period representing an increase of 173.1 per cent. The table
below provides the reconciliation to the statutory profit.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
34
34
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
35
35
DIRECTORS’ REPORT (continued)
3.
3.2
(a)
Operating and Financial Review (continued)
Review of Financial Condition (continued)
Group Results – Post AASB16 Leases (continued)
Impacts of COVID-19 and Online Growth
COVID-19 has had a significant impact on the Group during the year as customer spending increased. While total sales grew by 22.2%, online
sales grew by 43.3% and represented 12.0% of total sales as customers moved increasingly online. Click & Collect represented 46.2% of
Group online sales. The importance of the Group’s investment in its digital capability was underscored by the impact of intermittent COVID-
19 lockdowns on store trading and foot traffic. The Group’s omni-retail capability enabled it to pivot to online channels to meet consumer
demand through both click & collect and home delivery. COVID-19 restrictions varied by geography throughout the year.
Strength of the Balance Sheet
On 15 June 2020, the Group announced an underwritten one for seven accelerated pro rata non-renounceable entitlement offer which
generated net cash proceeds of $198.4 million. This allowed the Group to invest in inventory to support the elevated sales demand and
protect against supply chain delays. The June 2021 inventory balance is 38.6% higher than the prior period.
Statutory profit for the period after tax
Wages underpayment and remediation costs(1)
Losses from associates accounted for using the equity method
Reversals of provisions previously excluded from normalised NPAT(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)
Total of items not included in total segment NPAT
Normalised net profit after tax
(1) Net of tax
2021
$m
301.0
6.2
0.2
(0.6)
-
-
-
-
5.8
306.8
2020
$m
110.2
17.1
0.6
(1.0)
9.6
5.5
4.2
2.0
38.0
148.2
Adjustments relating to normalised net profit for the current year remain consistent with prior years with the main adjustment relating to
costs in relation to executing the wage underpayment remediation programme.
(b)
Division Results – Post AASB16 Leases
Sales
2021
$m
1,308.8
1,197.0
797.7
153.4
(3.8)
3,453.1
2020
$m
1,119.7
1,038.6
535.0
131.9
-
2,825.2
Segment EBIT
2021
$m
204.2
180.0
105.2
18.1
(30.7)
476.8
2020
$m
141.6
110.6
23.4
7.7
(18.3)
265.0
Segment PBT
2021
$m
192.3
166.7
96.4
16.9
(36.5)
435.8
2020
$m
129.2
96.0
15.0
5.8
(36.1)
209.9
Supercheap Auto
rebel
BCF
Macpac
Unallocated/intersegment
Supercheap Auto
Sales increased by 16.9 per cent to $1,308.8 million. Like-for-like sales growth of 16.4 per cent reflected both transaction growth and higher
average transaction value driven by increase units per transaction and average unit value.
Segment PBT increased by 48.8 per cent to $192.3 million and PBT margin of 14.7 per cent was 3.2 per cent higher than the prior comparative
period. Gross margin expansion was driven by lower promotional sales, reduced promotional and clearance depth and a favourable net
recovery of supply cost inflation.
DIRECTORS’ REPORT (continued)
Operating and Financial Review (continued)
Review of Financial Condition (continued)
Division Results – Post AASB16 Leases (continued)
3.
3.2
(b)
rebel
Sales increased by 15.3 per cent to $1,197.0 million with like-for-like sales growth of 17.5 per cent. Like-for-like growth reflected increased
transaction and higher average transaction value, due to increased items per transaction and higher average item value.
Segment PBT increased by 73.6 per cent to $166.7 million and PBT margin of 13.9 per cent was 4.7 per cent higher than the prior comparative
period. Gross margins increased due to lower promotional activity, sales mix changes to higher margin products and favourable net recovery
of supply cost inflation.
Online sales increased by 36.3 per cent to $192.6 million reflecting the strong channel shift during COVID-19. Online sales represented 16
per cent of total rebel sales and Click & Collect accounted for approximately 32 per cent of these online sales.
Rebel active club membership increased by approximately 13 per cent during the financial year to 3.2 million members. Sales to club
members increased to 68 per cent of rebel sales. Average club member net promotor score (NPS) increased to 59 from 55 in the prior
comparative period.
During the 2021 financial year, rebel opened one store and closed eight stores. As at the end of the financial year, rebel had 153 stores.
BCF
Sales increased by 49.1 per cent to $797.7 million. Like-for-like sales grew 48.0 per cent driven by both increased transactions and higher
average transaction value.
Segment PBT increased by 542.6 per cent to $96.4 million and PBT margin of 12.1 per cent was 9.3 per cent higher than the prior comparative
period. Gross Margins increased due to lower promotional sales, reduced promotional and clearance depth and a favourable net recovery
of supply cost inflation.
The BCF club loyalty program experienced strong growth with active memberships increasing by approximately 29 per cent to 2.0 million.
Sales to club members increased to 84 per cent of total BCF sales. Average club member net promotor score (NPS) decreased to 63 from 64
in the prior comparative period.
Online sales grew by 90.2 per cent to $86.1 million reflecting a shift to the online channel due to COVID-19. Online sales represented 11 per
cent of total BCF sales and Click & Collect accounted for approximately 60 per cent of these online sales.
BCF opened three stores during the financial year. As at the end of the financial year, BCF had 142 stores.
Macpac
Sales increased by 16.3 per cent to $153.4 million with like-for-like sales growth of 14.2 per cent.
Segment PBT increased by 191.4 per cent to $16.9 million and PBT margin of 11.0 per cent was 6.6 per cent higher than the prior comparative
period. Gross margins recovered to 2019 levels due to increased average selling prices, improvements in product sourcing costs and
favourable foreign exchange.
Online sales increased by 38.1 per cent to $30.2 million. Online sales represented 21 per cent of total Macpac sales and Click & Collect
accounted for less than ten per cent of online sales.
Macpac active club membership increased by approximately 6 per cent during the financial year to 0.5 million members. Sales to club
members increased to 66 per cent of Macpac sales. Average club member net promotor score (NPS) increased to 68 from 67 in the prior
comparative period.
During the 2021 financial year, Macpac opened four stores. As at the end of the financial year, Macpac had 76 stores.
Online sales increased by 30.6 per cent to $106.8 million. Online sales represented eight per cent of Supercheap Auto’s total sales and Click
& Collect accounted for over 70 per cent of these online sales.
Group Costs
Supercheap Auto active Club Plus membership increased by approximately 37 per cent during the financial year to 2.3 million members.
Sales to club members increased to 46 per cent of total sales. Average club member net promotor score (NPS) increased to 64 from 63 in
the prior comparative period.
During the 2021 financial year, the business opened two new stores and closed one store. As at the end of the financial year, the business
had a total of 283 stores in Australia and 44 stores in New Zealand.
Group costs for the period were $36.5 million (PBT), which was $0.4 million higher than the prior comparative period. A favourable reduction
in interest expense of $12.0 million due to lower debt was offset by increased corporate costs. Corporate costs were $7.0 million higher than
the prior comparative period reflecting performance rights expenses for both Group and brand participating management, increased
investment in corporate areas such as legal, risk & compliance, higher insurance costs and increased professional fees.
The Group recognised an additional $5.4 million of costs in the period due to updated guidance from the International Reporting
Interpretations Committee (IFRIC) regarding the treatment of Software as a Service (Saas) costs. Approximately $4.0m of the additional costs
related to prior periods.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
36
36
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
37
37
DIRECTORS’ REPORT (continued)
3.
3.2
(c)
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
2021
$m
38.4
696.4
(563.4)
(69.5)
101.9
242.3
-
(989.6)
(747.3)
219.9
894.3
866.9
6.1
3.6
(123.6)
4.7
1,226.5
600.0
(84.5)
(558.2)
(42.7)
285.1
(0.1)
242.3
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
Working capital investment increased by $32.6 million due to the significant increase in inventory of $194.0 million. The increased investment
in inventory is to support the elevated sales demand and protect against supply chain delays. Trade and other payables increased by $121.1
reflecting the increased inventory payable position. The tax liability has increased by $52.4 million reflecting the amount payable on the
higher profit for the year.
Excluding lease liabilities, the Group was in a net cash position of $242.3 million compared to $37.3 million in the prior year. This position
reflects profitable trading.
Net cash inflow from operations has decreased by $10.7 million due to payment terms normalising. Tax payments increased by $34.7 million.
The increase in the net cash outflow from financing activities reflects the repayment of borrowings and increased dividend payments of $62.3
million.
Capital expenditure increased by $16.6 million as the liquidity measures relating to capital expenditure investments levels returned to
normal.
(d)
Dividends
An interim dividend of 33.0 cents was paid. The Directors have resolved to pay a 55.0 cents per share fully franked final dividend for the
financial year. The amount of the final dividend represents a dividend payout ratio of 65 per cent of the full year underlying NPAT totalling
a cash payment of $124.2 million.
DIRECTORS’ REPORT (continued)
3.
3.2
(e)
Operating and Financial Review (continued)
Review of Financial Condition (continued)
Segment results prior to AASB 16 Leases
The segment results below show results by division excluding the impact of AASB16 Leases. The segment results on a post AASB16 Leases
basis are in Financial Statements - Note 4 Segment Information. Every division improved EBIT margin during the period.
For the period ended 26 June 2021
SCA
$m
rebel
$m
BCF
$m
Macpac
$m
Total
continuing
operations
$m
Inter-segment
eliminations/
unallocated
$m
Consolidated
$m
Segment Revenue and Other Income
External segment revenue
Inter segment sales
Other income
Total segment revenue and other income
Segment EBITDA
1,308.8
-
-
1,308.8
241.3
(48.6)
192.7
Segment depreciation and amortisation
Segment EBIT result
Net finance costs
Total segment NPBT
Segment income tax expense
Normalised NPAT
AASB16 Leases adjustment
Other items not included in the total segment NPAT
Profit for the period attributable to:
Owners of Super Retail Group Limited
Profit for the period
1,197.0
-
0.1
1,197.1
206.1
(38.1)
168.0
797.7
-
-
797.7
116.8
(20.9)
95.9
149.6
3.8
0.2
153.6
21.4
(4.0)
17.4
3,453.1
3.8
0.3
3,457.2
585.6
(111.6)
474.0
-
(3.8)
0.1
(3.7)
(28.2)
(2.5)
(30.7)
3,453.1
-
0.4
3,453.5
557.4
(114.1)
443.3
(5.8)
437.5
(129.5)
308.0
(1.2)
(5.8)
301.0
301.0
For the period ended 27 June 2020
SCA
$m
rebel
$m
BCF
$m
Macpac
$m
Total
continuing
operations
$m
Inter-
segment
eliminations/
unallocated
$m
Consolidated
$m
1,038.6
0.1
1,038.7
126.6
(30.0)
96.6
535.0
0.1
535.1
34.9
(19.2)
15.7
131.9
-
131.9
10.1
(2.9)
7.2
2,825.2
0.2
2,825.4
346.3
(91.9)
254.4
-
-
-
(18.2)
(0.1)
(18.3)
Segment Revenue and Other Income
External segment revenue
Other income
Total segment revenue and other income
Segment EBITDA
1,119.7
-
1,119.7
174.7
(39.8)
134.9
Segment depreciation and amortisation
Segment EBIT result
Net finance costs
Total segment NPBT
Segment income tax expense
Normalised NPAT
AASB16 Leases adjustment
Other items not included in the total segment NPAT
Profit for the period attributable to:
Owners of Super Retail Group Limited
Profit for the period
2,825.2
0.2
2,825.4
328.1
(92.0)
236.1
(17.8)
218.3
(64.2)
154.1
(5.9)
(38.0)
110.2
110.2
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
38
38
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
39
39
DIRECTORS’ REPORT (continued)
3.
3.2
(f)
Operating and Financial Review (continued)
Review of Financial Condition (continued)
Material Business Risks
The Group is committed to maintaining effective risk management systems to address both financial and non-financial risks. Super Retail
Group continues to evolve its approach to risk management to meet the demands of the operating environment, and the expectations of
our stakeholders. As we manage the issues arising from the COVID-19 pandemic, we are watchful of the uncertainties ahead. We view the
pandemic as a driver of several material risks, including the health and safety of our people and our customers, supply chain risks and
economic disruption.
The business risks faced by the Group that may have a material effect on its financial prospects are listed below, including an overview of the
Group’s mitigating actions:
Risks
Strategy
Strategy execution
Critical shortfall in capability and/or capacity to transition to a new
retail business model.
Competition & new entrants
Large scale shift in competitive landscape.
Climate change transition
Transition to a low carbon economy.
People
Health & Safety
Exposure to hazards at a level that causes harm (arising from SRG
operations).
Employment law compliance
Serious or systemic breach of employment law.
Conduct
Inappropriate, unethical or unlawful conduct by Officers or Team
Members.
Financial
Economic disruption
Unexpected changes in macro-economic conditions.
Information and technology
Cyber security
Unauthorised access to SRG systems.
Operational
Responsible sourcing
SRG causes or contributes to unethical or dangerous working
conditions in its supply chain, including modern slavery.
Demand volatility
Demand volatility exceeds SRG’s adaptive capacity.
Mitigating Actions (including but not limited to)
Investing in portfolio management capability, and program
governance.
Investing in talent attraction and retention programs that
support our team.
Growing our active club loyalty membership base and
retaining our loyal customers through structured customer
relationship management.
Growing our four core brands with an improved customer
experience instore and online.
Continuing to deliver on our 2030 Sustainability Strategy
which includes emissions reduction goals, recycling and waste
reduction programs, as well as support for environmental
protection and restoration programs. This Strategy was put in
place a number of years ago and is expected to be refreshed
in FY22.
Focusing on hazard elimination and risk reduction, supported
by a robust health and safety management system.
Strengthening the use of information technology.
Establishing an Industrial Relations Framework including a
wage review schedule, supported by training on correct
rostering practices.
Maintaining a strong culture that engenders doing the right
thing, guided by our Group values and Code of Conduct.
Providing mechanisms for reporting wrongdoing and prompt
action on misconduct, including a Whistleblower Policy,
dedicated reporting line and Anti-Corrupt Practices Policy.
Maintaining a strong financial position backed by a well-
executed omni-retail strategy and effective operating model.
Maintaining an in-depth approach to security defence,
supported by training and awareness.
Actively monitoring cyber threats.
Maintaining a Responsible Sourcing Program which includes
monitoring, verification, and remediation processes.
Reporting our actions in our annual Modern Slavery
Statement.
Expanding our offering to cater for domestic recreation.
Implementing Supply Chain optimisation initiatives,
maintaining agility and maintaining a large network of stores.
DIRECTORS’ REPORT (continued)
3.
3.2
(f)
Operating and Financial Review (continued)
Review of Financial Condition (continued)
Material Business Risks (continued)
Risks
Operational (continued)
Supply Chain
Protracted supply chain disruption.
Product safety
A product sold by SRG Brands is unsafe and/or non-compliant with
required standards.
Climate change adaptation
Physical impacts of climate change.
Business disruption
Trade is severely restricted or disrupted for an extended period.
Legal & regulatory compliance
Material breach of law or regulation.
3.3
Dividends
Mitigating Actions (including but not limited to)
Building resilience into our supply chain through diversifying
transport suppliers.
Maintaining a comprehensive product compliance program
including training, testing and review.
Designing and sourcing quality products that minimise the
likelihood of products being unsafe or non-compliant.
Having in place emergency response and business continuity
plans which support business resilience, as well as supply
chain and business disruption.
Maintaining, monitoring and, where required, strengthening
internal controls designed to reduce the potential impact of
business disruption including resilience, response and
recovery controls such as business continuity plans.
Promoting accountability and investing in corporate
governance, and legal capability.
Dividends paid or resolved to be paid to members since the end of the previous financial year were:
Paid during the year:
2020 final fully franked dividend
2021 interim fully franked dividend
Determined after end of year:
2021 final fully franked dividend
3.4
Significant Changes in the State of Affairs
Cents per share
Total amount
$m
Payment date
19.5
33.0
55.0
44.0
74.5
2 October 2020
1 April 2021
124.2
7 October 2021
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
Since the end of the financial period the Group does not have any matters subsequent to the end of the financial period to be disclosed.
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. This includes information that is commercially sensitive, confidential, or that could
give a third party a commercial advantage such as our internal budgets and forecasts.
3.7
Environmental Regulation
The Group’s operations are subject to a range of environmental regulations under the law of the Commonwealth of Australia and its states
and territories. The Group’s Sustainability Report provides disclosure around the material sustainability-related issues for the Group’s
businesses. The Group has not incurred any significant liabilities under any environmental legislation during the financial year.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
40
40
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
41
41
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 AO
Chair
Brisbane
18 August 2021
A M Heraghty
Group Managing Director and
Chief Executive Officer
DIRECTORS’ REPORT (continued)
4.
Non-Audit Services
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.
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 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:
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;
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 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 network firms
for audit and non-audit services provided during the year:
Audit Services
PricewaterhouseCoopers Australian firm:
Remuneration for audit and review services
Other assurance
Total remuneration for audit and review services
Taxation and Other Services
PricewaterhouseCoopers Australian firm:
Taxation Services
Equity raise procedures
Network firms of PricewaterhouseCoopers Australia:
Taxation Services
Total remuneration for non-audit services
5.
Corporate Governance Statement
2021
$
879,240
-
879,240
163,537
-
47,011
210,548
2020
$
855,736
-
855,736
258,577
45,900
80,380
384,857
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:
http://superretailgroup.com.au
6.
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 Corporations
Act 2001.
7.
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 42.
8.
Remuneration Report (Audited)
The audited remuneration report is set out on pages 43 to 67.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
42
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
43
43
Auditor’s Independence Declaration
As lead auditor for the audit of Super Retail Group Limited for the year ended 26 June 2021, I declare
that to the best of my knowledge and belief, there have been:
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(b) 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
period.
Remuneration Report
Audited
F O R T H E Y E A R E N D E D
2 6 J U N E 2 0 2 1
Paddy Carney
Partner
PricewaterhouseCoopers
Brisbane
18 August 2021
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.
Super Retail Group Limited
ABN: 81 108 676 204
ASX Code: SUL
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
44
44
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 26 JUNE 2021
REMUNERATION REPORT
(AUDITED)
45
45
REPORTING PERIOD
ENDED 26 JUNE 2021
Contents
Section 1
Section 2
Section 3
Letter from the Chair of the Human Resources and Remuneration Committee
Key Management Personnel
FY21 Performance and Executive Remuneration Outcomes, including:
§ Executive Remuneration table calculated in accordance with accounting standards
§ Remuneration received
§ Remuneration granted
FY22 Remuneration Matters
Executive Interests in Super Retail Group Securities
Executive Remuneration Framework
Section 4
Section 5
Section 6
Section 7 Non-Executive Director Remuneration
Remuneration Governance
Section 8
Introduction
The Directors of Super Retail Group present this Remuneration Report for the 52-week period ended 26 June 2021. The Remuneration
Report explains how the Group’s 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
2001 (Cth) (Corporations Act) and applicable accounting standards. The report also outlines the Group’s remuneration philosophy and
governance.
SECTION 1
Letter from the Chair of the Human Resources and Remuneration Committee
The Board made the decision to amend the LTI grant for FY21 on a one-off basis, aligned to the Group’s Medium-Term Business
Plan (MTBP). At the 2020 AGM, shareholders approved the FY21 grant to the Group MD and CEO. As such, the LTI grant for FY21
also includes reward for FY22. There will be no separate LTI grant in FY22. For the FY21 award, the performance period is the two-
year period of the MTBP, being the combined FY21 and FY22 period. Detail of the plan is shown in Section 6.
There are no changes to the remuneration framework for FY22, noting the absence of the LTI grant.
Deferral of STI into equity was introduced in FY20 and restricted shares were used to deliver the deferred STI component.
Restricted shares were used because they are an effective instrument to deliver time-bound equity where performance outcomes
have been achieved.
In the context of the market data and continued strong performance, the Board approved Fixed Pay increases for three of the Key
Management Personnel (KMP). No adjustments were made to STI or LTI reward targets. The detail is provided in Section 4.
Given the Group’s continued strong financial performance, the Board is currently reviewing the Group MD and CEO’s remuneration
level and target remuneration mix for FY22 and beyond, with reference to external market benchmarks based on similar sized ASX-
listed companies and industry peers. The review will take into consideration the performance of both the Group and the Group
MD and CEO. The remuneration mix will continue to place significant emphasis on performance-based (or ‘at-risk’) remuneration
and alignment of remuneration opportunity to the Group’s business strategy and shareholder returns.
Finally, in terms of remuneration for the Group’s Non-Executive Directors, following a review of external market data, the Board
considers it appropriate to adjust fees for the Chair, Committee Chairs and Non-Executive Director base fees. Details are provided
in Section 4.
On behalf of the Board I’d like to thank and congratulate the entire Super Retail Group team on the strong results they’ve delivered,
both financial and non-financial, and during a particularly challenging year.
Dear Shareholders,
We welcome your feedback on our FY21 Remuneration Report.
On behalf of the Board, I present the Remuneration Report for the financial year ended 26 June 2021. We have changed the structure
of the Report this year to enhance readability. The first portion of the Report focuses on FY21 performance and the link to
remuneration outcomes. Detail of the remuneration policies and framework is presented in the second half of the report. Statutory
tables are incorporated in the relevant sections.
Our Remuneration Report for FY20 received shareholder support at the 2020 Annual General Meeting, with 82.8 per cent of votes in
favour of adoption. In presenting the FY21 remuneration outcomes and considering changes for FY22 we have taken into account
feedback from shareholders.
The Group’s financial results for FY21 were excellent (see Section 3) delivering record sales and earnings, driven by unprecedented
consumer demand in the lifestyle and leisure categories. Meeting these elevated volumes of demand in both in-store and online
channels required sound execution of omni-retail, investment in supply chain and focus on inventory management. In particular, the
Group’s omni-retail strategy and digital capability provided the flexibility to pivot to online channels to meet shifts in consumer
behaviour during COVID-19 lockdowns.
In light of the strong Group financial results, a decision was taken to repay $1.7 million received in the Australian Government’s
JobKeeper wage support.
The strong financial results have led to above target Short-Term Incentive (STI) outcomes, and both measures of the FY19 Long-
Term Incentive (LTI) exceeded the hurdles required for 100 per cent vesting.
During FY21, the Board established a set of principles to guide the use of discretion regarding the STI to complement the existing
principles used in relation to the LTI. These principles are published in this Report in Section 6. In assessing the results and considering
any discretion that might apply, the Board had specific regard to the impact of the COVID-19 pandemic. After careful consideration,
the Board decided that no significant adjustments to reward outcomes were warranted and that the level of payments appropriately
reflected the Group’s performance.
Yours sincerely,
Peter Everingham
Human Resources & Remuneration Committee Chair
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
REMUNERATION REPORT
(AUDITED)
SECTION 2
Key Management Personnel
46
46
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
REPORTING PERIOD
ENDED 26 JUNE 2021
REMUNERATION REPORT
(AUDITED)
47
47
REPORTING PERIOD
ENDED 26 JUNE 2021
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
SECTION 3
FY21 Performance and Remuneration Outcomes
RELATIONSHIP OF REMUNERATION TO GROUP PERFORMANCE
The STI scheme and LTI plan operate to create a clear link between executive remuneration and the Group’s performance, motivating and
rewarding the Group MD and CEO and Executive KMP.
The performance of the Group over the past five years is summarised in Table 1.
S A Pitkin AO
Chair and Independent Non-Executive Director
1 July 2010
FINANCIAL PERFORMANCE
Non-Executive Directors
R A Rowe
H L Mowlem
P D Everingham
S A Chaplain AM
G T Dunne
Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Managing Director and Chief Executive Officer
8 April 2004
13 June 2017
19 December 2017
31 March 2020
31 March 2020
Group Managing Director and
Chief Executive Officer (Group MD and CEO)
KMP since 27 April 2015
(Group MD and CEO from 20 Feb
2019)
Chief Financial Officer
Managing Director - rebel
Chief Executive Officer - Macpac
Managing Director - Supercheap Auto
P A Bradshaw
Managing Director - BCF
3 December 2012
2 April 2019
1 May 2019
1 August 2019
25 November 2019
A M Heraghty
Executives
D J Burns
G S Williams
A Brandon
B L Ward
Each year, the Board reviews any significant items, positive and negative, and considers their relevance for reward outcomes. The Board
may adjust for any significant events and/or items to give a clearer reflection of financial performance from one period to the next.
Significant events and/or items are considered unusual by their nature and size and/or not in the ordinary course of the business and have
been excluded from the definition of Normalised PBT as detailed in Note 4 in the financial statements. In FY21, there were no other
adjustments impacting remuneration. The principles used by the Board in exercising discretion for Short-Term Incentives and for equity-
based incentives are outlined in Section 6.
Table 1: Company performance - key metrics used in reward framework
Financial performance
Sales ($m)
Normalised profit before tax (NPBT) ($m)
Normalised post tax return on capital (ROC) (%)
Normalised earnings per share (EPS) (¢)
Dividends per share (¢)
Closing June share price ($)
(1) pre AASB16 – Leases.
FY17
FY18
FY19
FY20
2,465.8
2,570.4
2,710.4
2,825.2
190.5
13.0
68.9
46.5
8.20
201.9
13.1
73.7
49.0
8.10
206.8
13.3
77.3
50.0
8.23
218.3
14.5
78.0
19.5
8.14
FY21
3,453.1
437.5(1)
28.8(1)
136.5(1)
88.0
12.95
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.
Former KMP
D J Eilert
Former Independent Non-Executive Director
21 October 2015 to 31 January 2021
Table 2: Key performance metrics compared with variable reward outcomes over time
NPBT and average STI
Table 2a
)
m
$
(
T
B
P
N
500
400
300
200
100
0
FY17
FY18
FY19
FY20
FY21
NPBT ($m)
100%
80%
60%
40%
20%
0%
e
m
o
c
t
u
o
I
T
S
e
g
a
r
e
v
A
Table 2a shows the average STI outcomes as a percentage of
maximum opportunity compared to NPBT, which is the key
financial metric in the STI scorecard.
Executive KMP average STI outcome as a percentage of
the Executive STI maximum opportunity
The STI for FY20 was adjusted reflecting a year of floods, bushfires and the outbreak
of the COVID-19 pandemic
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
48
48
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 26 JUNE 2021
REMUNERATION REPORT
(AUDITED)
49
49
REPORTING PERIOD
ENDED 26 JUNE 2021
Table 2b
LTI vesting, and LTI metric outcomes over 3-years
25%
20%
15%
10%
5%
0%
s
e
m
o
c
t
u
o
c
i
r
t
e
M
100%
100%
80%
60%
40%
20%
0%
g
n
i
t
s
e
v
I
T
L
77%
34%
38%
0%
FY17
FY18
FY19
FY20
FY21
3 year average ROC %
3 year compound growth in EPS %
LTI vesting outcomes
STI OUTCOMES FOR FY21
Short-Term Incentive Scorecard Outcomes for FY21
Table 2b shows the LTI vesting outcome (or the percentage of
the LTI grant that qualified for vesting over the vesting period)
compared to average normalised ROC and normalised EPS
compound growth over the three financial years ending on 26
June 2021. The figures in Table 2b include the adjustments
made for the underpayment of retail management and Set Up
team members and Board discretion in FY20. This impact was
detailed in previous reports.
For the year to 26 June 2021, the target for Normalised Profit Before Tax (NPBT) was set at $260.3 million, 19.2 per cent higher than the
NPBT achieved in the period to 27 June 2020 of $218.3 million. The financial gateway for the STI scheme of $234.3 million (90 per cent
of target) was exceeded and therefore Executive KMP scorecards were activated.
The individual Key Performance Indicator (KPI) to determine STI awards and the FY21 achievements, referenced by the Board for the
Group MD and CEO and other Executive KMP, are detailed in Tables 3 and 4.
Table 3: Group Managing Director and Chief Executive Officer performance
Balanced
Scorecard
Measure
Weighting
Actual
Performance
range
Commentary on Performance
Group Financial
Performance
Business
Improvement
Customer
People/Risk
Normalised Profit
Before Tax
attributable to
members
Working Capital
Efficiency
Delivery of FY21
portfolio benefits
in accordance
with plan
Corporate
Governance Focus
Organic growth
through existing
customers
Safety
Risk Management
35%
Stretch
The pre-AASB16 NPBT result for the Group is
$437.5 million.
The Normalised PBT result is an excellent result that
captures the benefit of the more sustained COVID-19
related demand than was expected in October when the
measure was approved.
15%
20%
10%
10%
10%
Stretch
Working capital efficiency target was exceeded.
Target to
Stretch
Delivery of FY21 portfolio benefits in accordance with plan
was achieved.
Target
Deliverables agreed for the Risk Transformation Program
and the Health & Safety Maturity Program were met.
Stretch
Organic growth through existing customers target was
exceeded.
Stretch
Total recordable injuries represent a 27% improvement on
the baseline, with improvements across all brands.
Target to
stretch
Measured as the increase in risk maturity across the Group,
as assessed by the Board.
Table 4: Other Executive KMP performance
Name
Role
Financial
(50%)
Business
Improvement
(30%)
Customer
(10%)
People / Risk
(10%)
STI
Scorecard
Outcome
P A Bradshaw
Managing Director - BCF
Stretch
A Brandon
Chief Executive Officer -
Macpac
Target to
Stretch
Target to
Stretch
Target to
Stretch
Target to
Stretch
Target to
Stretch
Stretch
Target to Stretch
Target
Target to Stretch
D J Burns
Chief Financial Officer
Stretch
Target
Stretch
Stretch
Target to Stretch
B L Ward
Managing Director -
Supercheap Auto
Stretch
G S Williams
Managing Director - rebel
Stretch
Target to
Stretch
Target to
Stretch
Stretch
Stretch
Target to Stretch
Target to
Stretch
Stretch
Target to Stretch
SUMMARY
The STI outcomes for Executive KMP are reflected in Table 5.
The STI award for all Executive KMP will be paid 70 per cent cash and 30 per cent restricted shares, of which one half will become
unrestricted in September 2022, and the remainder in September 2023. This deferral supports an increase in executive shareholding,
enhances risk management and executive retention, and reflects broader market practice.
Table 5: STI outcomes
STI scorecard outcomes
Executive Director
A M Heraghty
Other Executive KMP
P A Bradshaw
A Brandon
D J Burns
B L Ward
G S Williams
STI assessment
per cent of
target
Total STI
payment
$
30%
deferral
into equity
$
STI cash
payment
$
STI earned
per cent of
maximum
(maximum = 150%
of target)
STI unearned
(forfeited)
per cent of
maximum
payable
137.8
984,581
295,374
689,207
91.9%
8.1%
140.8
124.2
134.6
138.3
135.3
563,200
144,553
673,202
691,707
168,960
43,366
201,961
207,512
676,703
203,011
394,240
101,187
471,241
484,195
473,692
93.9%
82.8%
89.7%
92.2%
90.2%
6.1%
17.2%
10.3%
7.8%
9.8%
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
50
50
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
REPORTING PERIOD
ENDED 26 JUNE 2021
REMUNERATION REPORT
(AUDITED)
51
51
REPORTING PERIOD
ENDED 26 JUNE 2021
REMUNERATION REPORT
(AUDITED)
LTI OUTCOMES FOR FY21
Long-Term Incentive Outcomes for FY21
The FY19 grant was dependent on performance for the three years ending 26 June 2021.
The performance hurdles for the FY19 LTI grant were met, with 100 per cent of the grant qualifying for vesting over the relevant vesting
period. The impact of the capital raising has unfavourably impacted normalised earnings per share, as the net impact of increased shares
was only partially offset by lower interest costs. The net effect still exceeded the level required for 100 per cent vesting. The Board
approved 100 per cent vesting for the FY19 grant.
In FY20, the Board established a set of principles to be used in exercising discretion. These are outlined in Section 6, along with a detailed
outline of the LTI Plan.
As the LTI vests over a period, after the performance hurdle has been tested, the value of LTI shown in the remuneration tables includes a
portion of the FY16 grant and all subsequent grants. Table 6 outlines the performance outcomes and the subsequent vesting for each of
the LTI performance rights granted and performance tested since FY16. Each grant is subject to equally weighted performance measures
being compound average growth rate of normalised earnings per share over three financial years and normalised return on capital
averaged over three financial years.
Table 6: Proportion of LTI vesting over the last four years
Grant
name
Grant date
FY16
FY17
FY18
FY19
September
2015
September
2016
September
2017
September
2018
Financial
results
determining
vesting (1)
FY16, FY17,
FY18
FY17, FY18,
FY19
FY18, FY19,
FY20
FY19, FY20,
FY21
Normalised Earnings Per Share (EPS)
three-year compound average
growth rate (50% weight)
Normalised Return On Capital (ROC)
three-year average
(50% weight)
Performance
outcome
%
Qualifying
for vesting
%
Forfeited
%
Performance
outcome
%
Qualifying
for vesting
%
Forfeited
%
11.7
33.5
16.5
11.9
Nil
50.0
13.8
44.0
6.0
13.0
33.3
16.7
5.3
Nil
50.0
13.6
38.3
11.7
23.8
50.0
Nil
19.0
50.0
Nil
(1) Results are after adjustments for impact of team member underpayments as previously disclosed.
Executive KMP Remuneration Outcomes for FY21
Table 7 details remuneration elements calculated in accordance with accounting standards as required by the Corporations Act 2001
Regulations 2M.3.03. LTI is the fair value, accrued over the performance period, and STI for FY21 is the amount earned for FY21 and to
be paid in September 2021 (in FY22).
Table 7: Remuneration for Executive KMP calculated in accordance with accounting standards
Year
Short-term benefits
Post-
employment
Share-based
Other
Total
Cash salary
$
Cash
bonus
$
Non-
monetary
benefits(1)
$
Annual
leave
$
Super-
annuation
$
Performance
Rights
(LTI)
$
Restricted
Shares
(Deferred
STI)
$
Other long-
term
benefit(2)
$
Total
$
1,128,305
689,207
-
(9,328)
21,694 1,303,359
209,010
11,227
3,353,474
1,065,648
603,000
3,349
(30,943)
21,003
119,350
85,938
11,148
1,878,493
622,957
394,240
372,560
141,977
379,232
101,187
-
-
-
379,877
42,600
2,384
653,306
471,241
-
8,183
21,694
442,542
92,182
3,521
1,585,319
18,170
12,172
61,040
16,317
15,752
29,235
21,782
599
600,075
11,575
212,053
27,132
(110,565)
632,786
11,396
-
9,063
48,801
555,161
21,694
701,407
144,562
12,515
2,021,042
651,297
424,550
2,700
5,563
21,003
177,760
60,412
9,362
1,352,647
655,207
484,195
44,793
8,208
25,000
494,848
139,157
3,791
1,855,199
593,141
612,894
33,625
17,895
21,003
43,982
52,694
993
1,376,227
703,306
473,692
-
22,667
21,694
497,741
141,463
3,829
1,864,392
676,297
503,614
2,700
-
21,003
49,769
56,875
1,736
1,311,994
50,077
-
3,692
5,122
5,251
4,882
-
1,165
70,189
4,142,313
2,613,762
44,793
58,219
123,351 3,651,950
753,506
(75,682) 11,312,212
3,788,897
2,328,635
48,450
76,847
116,411
424,978
286,764
73,804
7,144,786
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
FY20
FY21
FY20
Name
A M Heraghty
(3) (4)
P A Bradshaw
(5)
A Brandon
D J Burns
B L Ward
(6)
G S Williams
(7)
Former Executive KMP
C D Wilesmith
(8)
Total
Total
(1)
Includes salary-sacrificed items such as novated leases, and car parking, including any FBT payable.
(2)
Includes accruals for long service leave entitlements and reversal of accrued long-term retention bonus for A Brandon of $110,565 ($48,801 in 2020 and $61,764 in 2019). During FY21 the
Board withdrew the retention bonus, and A Brandon now participates in the same LTI plan as other Executive KMP.
(3)
The annual leave accrual in FY20 has been adjusted to reflect the leave that was taken in FY20. A $40,000 car allowance has been classified as cash salary.
(4) A M Heraghty 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 an LTI grant of 86,294 performance rights and 53,262 performance rights in relation to a one-off co-investment grant.
(5) P A Bradshaw commenced as KMP on 25 November 2019. FY20 STI outcome is pro-rated for length of service.
(6) B L Ward commenced as KMP on 1 August 2019. Included in the FY20 cash bonus total is a sign-on bonus of $250,000 and the FY20 STI outcome is pro-rated for length of service.
(7) G S Williams commenced as KMP on 2 April 2019. Included in the cash bonus is a sign-on bonus for G S Williams of $113,014 in FY20.
(8) C D Wilesmith ceased as KMP on 31 July 2019.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
52
52
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 26 JUNE 2021
REMUNERATION REPORT
(AUDITED)
53
53
REPORTING PERIOD
ENDED 26 JUNE 2021
Table 8 details the remuneration actually received during FY21. As with Table 7, the cash STI amount is that earned in FY21 and to
be paid in FY22. The amount shown for value of LTI vesting represents the number of rights converted to ordinary shares during
FY21 multiplied by the share price on the date of vesting ($10.85 in the five trading days following results announcement in August
2020). The rights converting to ordinary shares derive from FY16, FY17 and FY18 grants as detailed in Table 13. This value for LTI
contrasts with Table 7 that shows the FY21 portion of the fair value of equity grants which are amortised over the relevant
performance measurement and vesting periods.
Table 8: Remuneration received
FY21
Cash and non-monetary
Equity
Total
Name
A M Heraghty
P A Bradshaw
A Brandon
D J Burns
B L Ward
Cash salary
$
Cash
bonus
$
1,128,305
689,207
622,957
394,240
379,232
101,187
653,306
471,241
655,207
484,195
G S Williams
703,306
473,692
Non-monetary
benefits and
superannuation(1)
$
Value of deferred
STI (restricted
shares) restrictions
expired(2)
$
Value of LTI
(performance
rights) vesting
$
Total
$
21,694
21,694
11,575
21,694
69,793
21,694
-
-
-
-
-
-
234,566
2,073,772
-
-
1,038,891
491,994
180,251
1,326,492
-
-
1,209,195
1,198,692
(1) Changes in accruals are not included in this table as they do not affect the amounts received by the individual.
(2) Deferral of STI was introduced in FY20. The first restrictions lift in September 2021, which is FY22.
Table 9 details each of the remuneration elements given to Executive KMP during FY21. This table shows STI at target, LTI at face
value, half of the FY21 LTI grant (as the other half relates to FY22) and illustrates the target mix of fixed, short-term and long-term
reward.
Table 9: Remuneration granted
A M Heraghty
P A Bradshaw
A Brandon
D J Burns
B L Ward
G S Williams
Fixed Pay
Cash STI
Deferred STI
LTI
42.4%
Fixed Pay: $1,150,000
44.7%
Fixed Pay: $650,000
18.4%
7.9%
Target STI: $714,500
31.3%
LTI Face Value: $850,000
19.3%
8.3%
Target STI: $400,000
27.7%
LTI Face Value: $403,000
50.9%
Fixed Pay: $385,047
10.8%
4.6%
Target STI: $116,822
33.7%
LTI Face Value: $255,440
Total
$2,714,500
$1,453,000
$757,309
42.3%
Fixed Pay: $675,000
43.3%
Fixed Pay: $725,000
43.3%
Fixed Pay: $725,000
22.0%
Target STI: $500,150
9.4%
26.3%
$1,593,650
LTI Face Value: $418,500
20.9%
9.0%
Target STI: $500,150
26.8%
LTI Face Value: $449,500
$1,674,650
20.9%
9.0%
Target STI: $500,150
26.8%
LTI Face Value: $449,500
$1,674,650
0%
20%
40%
60%
80%
100%
(1)
(2)
The components of the remuneration framework are described in Section 6.
The Maximum STI is 150 per cent of the target STI.
SECTION 4
FY22 Remuneration Matters
The Board does not anticipate any policy changes in relation to remuneration in FY22.
In the context of continuing strong Group financial performance and Super Retail Group’s market capitalisation increase from $1.5
billion in 2018 to $2.9 billion at financial year end, the Board initiated a review of the remuneration of the Group MD and CEO for
FY22, including the remuneration level and target remuneration mix. The review draws on external benchmarking data from similar
sized ASX-listed companies and industry peers. The review will also take into consideration the performance of the Group MD and
CEO since his appointment in 2019.
The benchmarking data indicate that Mr Heraghty’s fixed remuneration and total target reward, in respect of FY21, significantly lags
the external comparator market benchmark. The data also indicate that the remuneration mix reflects a higher weighting of fixed
remuneration versus performance-based remuneration, as compared to the comparator groups.
The Board’s aim, consistent with the Company’s remuneration policy, is to position the Group MD and CEO’s Total Target
Remuneration in the 75th percentile, and for the remuneration mix to place significant emphasis on performance-based (or ‘at-risk’)
remuneration and alignment of remuneration opportunity to the Group’s business strategy and shareholder returns.
For other KMP, based on the market data, there will be fixed pay increases for the MDs of SCA, Rebel and BCF. No other changes are
proposed for any element of remuneration for Executive KMP for FY22.
In relation to LTI, a grant will not be made to Executive KMP in FY22, as a combined grant covering FY21 and FY22 was made in FY21.
No increase in the Non-Executive Director fee pool will be sought in FY22.
In relation to Non-Executive Directors, the last increase in base fees was in FY18. The Board has reviewed external benchmarking
data, consistent with the comparator groups used for the review of the role of Group MD and CEO, and considered a range of factors,
including the time commitment required, effectiveness of the Board and the scale and complexity of the business. There will be an
increase in fees in FY22.
Table 10: Non-Executive Director fees FY22
Annual Fees
Chair(1)
Members
Board
$360,000
$145,000
(1) Committee fees are not paid to the Chair of the Board.
Audit and Risk
Committee
Human Resources and
Remuneration Committee
Nomination
Committee
$45,000
$15,000
$45,000
$15,000
Nil
Nil
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
54
54
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 26 JUNE 2021
REMUNERATION REPORT
(AUDITED)
55
55
REPORTING PERIOD
ENDED 26 JUNE 2021
SECTION 5
Executive Interests in Super Retail Group Securities
MINIMUM SECURITIES HOLDING POLICY
In 2015, to further align the interests of KMP with those of shareholders, the Board introduced a minimum shareholding requirement
to be achieved within five years of commencing as a KMP, or within five years of the policy commencing FY15. The requirement is
summarised below:
Group MD and CEO
Other Executive KMP
150% x base salary
100% x base salary
KMP HOLDINGS OF EQUITY IN SUPER RETAIL GROUP
The remuneration framework results in three different types of Super Retail Group securities: a) ordinary shares, b) restricted shares
and c) performance rights. The plans are outlined in Section 6. Restricted shares were used for the first time in FY21 to deliver the
deferred STI.
ORDINARY SHARES OF SUPER RETAIL GROUP HELD BY KMP
Table 11 details the movement during the year in the number of ordinary shares in the Company held directly, indirectly or beneficially,
by each Executive KMP, including their related parties is detailed below. The table details the number of ordinary shares in the
Company received by KMP during the year on exercise of performance rights (see also Table 13) and on lifting of restrictions imposed
on deferred STI (see also Table 12).
Table 11: Movement in ordinary shares(1)
FY21
A M Heraghty
P A Bradshaw
A Brandon
D J Burns
B L Ward
G S Williams
Held at
27 June 2020
Vesting of
LTI
Purchases
Entitlement
offer
59,720
-
-
33,637
-
-
21,619
-
-
16,613
-
-
-
-
-
-
-
6,957
-
-
-
4,806
-
-
Sales
(15,101)
-
-
-
-
-
Held at
26 June 2021
66,238
-
-
55,056
-
6,957
(1)
Excluding restricted shares – refer Table 12.
Performance rights for KMP and non-KMP were fulfilled through a combination of on-market share purchases and new share issues.
Total performance rights vested were 172,653 (117,855 purchased on market and 54,798 new share issues). Shares were purchased
on-market for the dividend re-investment program for the interim dividend for FY20, which was subsequently cancelled. Those shares
were used to satisfy shares required for performance rights. The balance of the requirements were satisfied through the issue of new
shares. More detail of the relevant tranches vesting in FY21 for KMP is provided in Table 13.
RESTRICTED SHARES HELD BY KMP
Table 12 details the movement during the year in the number of restricted shares in the Company granted to Executive KMP as part
of their STI. This is the first year that restricted shares have been used within the remuneration framework. They were introduced
to deliver the deferred component of STI because they are an effective instrument to deliver time-bound equity where performance
outcomes have been achieved. Restrictions on deferred STI will be lifted by 50 per cent in September 2021, and the remainder in
September 2022. Participants are eligible to receive dividends on restricted equity before the restriction is lifted.
As previously disclosed, in relation to FY20 performance the Board determined that a portion of the FY20 STI was forgone and an
equal proportion deferred for 12 months into restricted shares, for which the restrictions lift on the whole award in September 2021
(Discretionary deferral of FY20 STI).
Table 12: Movement in restricted shares
FY21
A M Heraghty
P A Bradshaw
A Brandon
D J Burns
B L Ward
G S Williams
Held at
27 June 2020
Discretionary
deferral of
FY20 STI
Deferred STI
granted during
FY21
Restrictions
expired during
FY21
Held at
26 June 2021
Financial year in
which grant is
exercisable
-
-
-
-
-
-
5,184
1,567
1,036
3,629
3,339
3,629
16,900
3,979
1,193
11,898
10,170
10,947
-
-
-
-
-
-
22,084
5,546
2,229
15,527
13,509
14,576
FY22, FY23
FY22, FY23
FY22, FY23
FY22, FY23
FY22, FY23
FY22, FY23
PERFORMANCE RIGHTS OVER EQUITY INSTRUMENTS OF SUPER RETAIL GROUP
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. The grant made in FY21
was an award for two financial years FY21 and FY22. Performance rights do not carry voting or dividend rights.
Table 13: Movement in performance rights
Held at
27 June 2020
Granted(1)
Vested
Lapsed or
forfeited
Held at
26 June 2021
Financial year in
which grant is
exercisable
A M Heraghty
2016
2017
2018
2019(2)
2020(3)
2021
P A Bradshaw
2020
2021
A Brandon
2021
D J Burns
2016
2017
2018
2019(2)
2020
2021
B L Ward
2020
2021
G S Williams
2020
2021
1,411
17,619
59,526
50,200
139,556
-
40,913
-
-
-
-
-
-
190,583
-
90,358
-
57,273
944
11,860
50,860
44,006
44,060
-
44,060
-
44,060
-
-
-
-
-
-
93,834
-
100,784
-
100,784
(1,411)
(8,809)
(11,399)
-
-
-
-
-
-
(944)
(5,930)
(9,739)
-
-
-
-
-
-
-
-
-
(36,728)
-
-
-
-
-
-
-
-
(31,381)
-
-
-
-
-
-
-
-
FY19, FY20, FY21
8,810
11,399
50,200
139,556
190,583
FY20, FY21, FY22
FY21, FY22, FY23
FY22, FY23, FY24
FY23, FY24
FY23, FY24, FY25
40,913
90,358
FY23, FY24
FY23, FY24, FY25
57,273
FY23, FY24, FY25
-
5,930
9,740
44,006
44,060
93,834
FY19, FY20, FY21
FY20, FY21, FY22
FY21, FY22, FY23
FY22, FY23, FY24
FY23, FY24
FY23, FY24, FY25
44,060
100,784
FY23, FY24
FY23, FY24, FY25
44,060
100,784
FY23, FY24
FY23, FY24, FY25
(1) Performance rights provided as remuneration to each of the Executive KMP of the Group during the financial year. The grant made in FY21 was an award for two financial years
FY21 and FY22 and is described in more detail in Section 6.
(2) These performance rights will partially vest with the announcement of the FY21 results.
(3) 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 co-investment grant vests 50 per cent in February 2022, 25 per cent in February 2023 and 25 per cent in February 2024.
(4) The maximum possible total financial value in future years is dependent on the Group share price at any time after the exercise date, the minimum possible total value is nil.
(5) All vested performance rights are exercisable.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
56
56
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 26 JUNE 2021
REMUNERATION REPORT
(AUDITED)
57
57
REPORTING PERIOD
ENDED 26 JUNE 2021
The performance rights granted in FY21 were valued for the purpose of the financial statements using a fair value of $9.47 (refer
Table 14), which is based on the share price at the accounting grant date of 30 December 2020. In February 2021, the Board withdrew
the retention arrangement that had previously been reported for A Brandon, and he was granted performance rights under the
Performance Rights Plan. As they were granted at a later date, the fair value of Mr Brandon’s performance rights was determined to
be $10.15.
The performance rights are expensed over their vesting period in line with the vesting conditions. Refer to Section 6 for details of
these vesting conditions.
OPTIONS
There are no option plans in operation and hence no options were granted or vested during the financial year and no amounts unpaid
on shares issued as a result of the exercise of the options in FY21.
UNISSUED SHARES UNDER PERFORMANCE RIGHTS PLANS
Unissued ordinary shares of Super Retail Group Limited under the Performance Rights Plan at the date of this report are detailed in
Table 14.
Table 14: Number of performance rights
Grant
Grant date
VWAP used for
grant
FY16
FY17
FY18
FY19
FY20
1 September 2015
1 September 2016
1 September 2017
1 September 2018
1 September 2019
FY21 & FY22
1 November 2020
Total
$8.93
$10.51
$8.02
$9.51
$9.85
$8.92(2)
Fair value per
performance
right
at grant date
$8.17
$7.99
$6.38
$7.65
$7.72(1)
$9.47(3)
Financial year in
which grant is
exercisable
Number of
performance rights at
26 June 2021
2019, 2020, 2021
2020, 2021, 2022
2021, 2022, 2023
2022, 2023, 2024
2023, 2024
2023, 2024, 2025
-
73,546
89,240
336,944
656,963
1,116,783
2,273,476
(1)
(2)
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.
The number of performance rights granted in FY21 (and covering FY22) is based on the average volume-weighted share price in the five days following the announcement of 31
July 2020 ($8.92).
(3) Performance rights were granted to Mr Brandon in February 2021. Although the terms and conditions are the same as for other executives, the later grant date results in a fair
value of $10.15.
(4) Refer to Section 6 for details of vesting conditions.
(5) Performance rights lapse seven years after the grant date.
SECTION 6
Executive Remuneration Framework
Our philosophy is to provide flexible and market competitive remuneration arrangements that reflect the performance of the Group and
its businesses.
The key elements are:
Market
competitive
Aligned to
shareholders’
sustainable
value
Pay-for-
performance
environment -
specific and
measurable
Equitable and
consistent across
the Group
Recognise
performance and
experience
Aligned to values
and prudent risk
management
EXECUTIVE REMUNERATION OBJECTIVES
The Group MD and CEO, together with other Executive KMP, are remunerated under a Total Reward Framework. 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 and long-term sustainable value to the Group’s shareholders. The target pay mix
is set out in Table 9.
Our Remuneration
Objectives
Attract, motivate and
retain executive talent.
Differentiate reward to
drive performance,
including values and
behaviours.
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
Fixed Pay / Base Salary
Package
Short-Term Incentive
(STI)
Long-Term Incentive
(LTI)
Remuneration Mix
Strategic Intent
and Market Positioning
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.
‘At-risk’ remuneration
consistent with the
broader market.
Deferral of STI into equity
extends the timeframe
for receipt of variable
reward outcomes.
Combined, base salary
package, STI and LTI are
intended to be
positioned within the
third quartile of relevant
benchmark comparisons.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
58
58
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 26 JUNE 2021
REMUNERATION REPORT
(AUDITED)
59
59
REPORTING PERIOD
ENDED 26 JUNE 2021
FIXED PAY/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 KMP’s service agreement.
VARIABLE OR ‘AT-RISK’ REMUNERATION
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 prior years, the FY21 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 against four key
drivers of performance, outlined in Table 15. Deferral of a portion of STI into equity was introduced in FY20 using restricted shares to
meet the deferred STI component.
Table 15: Key aspects of the FY21 STI scheme
Scheme
STI awards are made under the Super Retail Group Short-Term Incentive scheme (the scheme).
FY21 Target, Maximum
(Stretch) Opportunity,
and Minimum
For KMP, 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 any payment; hence the minimum is zero. In setting this threshold, consideration is
given to prior year performance and target.
Payment Vehicle:
Restricted Shares
FY21 STI awards are delivered as 70 per cent cash and 30 per cent deferral to equity, with half
becoming unrestricted in year two and the remainder becoming unrestricted in year three. To
meet this delivery, the Board determined that restricted shares were the most efficient vehicle.
For FY20, the Board exercised discretion to reduce the amount of STI. The reduction resulted in a
portion foregone. The Board also determined a portion would be deferred into restricted shares
for one year.
Restricted shares receive dividends and have voting rights. They may not be traded until the
restriction is lifted.
Payment Frequency
STI awards are paid annually. Payments are made in September following the end of the
performance period.
The Human Resources and Remuneration Committee recommends the design of the STI scheme, KPI and target setting, and the
Board holds approval and discretion over the outcomes. During the year the Board established principles for use in considering
discretion for STI reward.
Participation
The scheme allows for the invitation to participate to Executive KMP and other executives.
PRINCIPLES FOR BOARD DISCRETION ON STI
Purpose
The scheme rewards a combination of Board-approved financial and non-financial performance
measures that are aligned to the execution of the Group’s strategy, and which articulate
performance expectations at both target and over-achievement levels.
Performance Period
The performance period is the 12 months ending 26 June 2021.
Financial Gateway
A minimum Group NPBT of at least 90 per cent of target must be met before any Short-Term
Incentives are payable. If this level is not reached, 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)
determines the proportion of the potential bonus entitlement that will be granted.
For FY21, the following primary performance goals and weightings were selected. These goals
are aligned to the Group’s strategic plan. The significant weighting of financial outcomes, at 50
per cent, maintains a strong link between financial performance and incentive paid.
Measures
Category
Weighting
(% of STI)
Financial
Financial
Non-Financial
Business
Improvement
Customer
People and Risk
50
20
20
10
Performance Goals
• Normalised Profit Before Tax
(NPBT)
• Working Capital Efficiency
• Delivery of Strategic Potfolio
• Active Customer Revenue
• Net Promotor Score (NPS)
• Total Recorded Injuries
• Risk Management
The Board has discretion to moderate outcomes under the STI scheme. At the conclusion of each performance
period, and informed by the audited financial results and other relevant information, the Board will review the
reward outcomes arising from the assessment against the performance metrics, and consider whether any
adjustments to outcomes are appropriate, having regard to the following principles:
•
•
•
Preserving the purpose and integrity of the remuneration framework and short-term
remuneration target.
Consistency with general market/security-holder expectations, particularly for the
alignment of performance-based remuneration with the interests of shareholders.
Exercising discretion only for events or items over the performance period that have a
material impact on the outcome.
• Maintaining affordability of the STI scheme.
•
•
Sustaining desired impact against subsequent year strategic and business objectives.
Exercising any discretion fairly and consistently, considering:
•
any actions taken which have optimised long and/or short-term value
creation at the expense of an “in year” outcome measured in the scorecard;
• whether performance measures capture the impacts of unforeseen events
on the business and creation of sustainable shareholder value; and
•
the impacts of a team member’s actions on the outcome as assessed against
the performance metric.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
60
60
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 26 JUNE 2021
REMUNERATION REPORT
(AUDITED)
61
61
REPORTING PERIOD
ENDED 26 JUNE 2021
LONG-TERM INCENTIVE REWARD
Significant Items
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 normalised Earnings Per Share (EPS) and normalised Return On Capital (ROC) are
appropriate measures of sustainable shareholder returns.
Historically the LTI plan has used a combination of two metrics being compound average growth in normalised earnings per share over
three financial years and normalised return on capital (ROC) average over three financial years, which the Board determined are
appropriate measures of sustainable shareholder returns. In the context of COVID-19 and the challenges of forecasting the impact on
the business, the Board established a two-year Medium-Term Business Plan (MTBP), with targets for normalised ROC and Normalised
Profit Before Tax (NPBT). The grant in FY21 covered LTI reward for both FY21 and FY22, and is based on performance over the two-year
period of the MTBP. It is intended that grants from FY23 revert to the previous plan structure with a three-year performance period.
Table 16: Key aspects of the LTI plan
Plan
Participation
LTI Instrument
Allocation Methodology
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.
The grant for FY21 includes the FY22 opportunity. There will be no grant in FY22. The FY21 grant is
outlined in Table 18.
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.
The number of performance rights granted to each Executive KMP is determined in accordance with
the Executive Remuneration Framework and has 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 a volume-weighted average price for
Super Retail Group shares traded on the ASX over a period of five trading days 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
Three financial years commencing July in the year the award is made.
Performance Hurdles
Equity grants to Executive KMP and other executives are in two equal tranches, half relating to the
compound annual growth rate in normalised EPS over the performance period and the remainder
relating to normalised ROC averaged over the performance period.
Vesting Schedule
The performance conditions for performance rights granted in FY20 were:
Measures
Normalised earnings per share
compound average growth rate over
the performance period
Normalised return on capital
average over the performance
period
Weight
50%
50%
Proportion that
qualifies for
delivery in
accordance
with the vesting
period outlined
below
Below threshold:
0% of this portion
Threshold:
30% of this portion
Midpoint:
50% of this portion
Maximum:
100% of this portion
Straight-line vesting: Between
threshold and target and then
between target and maximum
Below threshold:
0% of this portion
Threshold:
30% of this portion
Midpoint:
50% of this portion
Maximum:
100% of this portion
Straight-line vesting: Between
threshold and target and then
between target and maximum
The Threshold, Target and Maximum for the grants since FY17 are shown in Table 17
Each year, the Board reviews any significant items, positive and negative, and considers their
relevance for reward outcomes. The Board may adjust for any significant events/items to give a
clearer reflection of 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 and have been excluded from the definition of Normalised PBT as detailed in
Note 4 in the financial statements. In FY21, there were no other adjustments impacting
remuneration.
Vesting 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:
Three years
Four years
Percentage of
performance rights that vest:
50
50
Note that for grants prior to FY20, qualified performance rights vest 50 per cent after three years, 25
per cent after four years and 25 per cent after five years.
At the end of the performance period, 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.
Testing and Time
Restrictions
Dividends and Voting Rights
Performance rights do not carry voting or dividend rights.
Termination Provisions
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.
Change of Control
Provisions
Any unvested performance rights may vest at the Board’s discretion, having regard to pro-rated
performance.
Principles for Board
discretion on equity-based
incentive plans
Preserve the purpose and integrity of the LTI plan.
•
• Maintain the integrity of each year’s remuneration as awarded.
• Maintain the level of performance expected when the original targets were set.
•
Be consistent with general market/security-holder expectations, particularly for the alignment of
performance-based remuneration with the interests of shareholders.
Be able to be implemented without requiring special approvals, for example from the ASX or
security-holders.
Not hinder the success of any transaction (such as a significant acquisition) given that executives
do not otherwise receive incentive type payments for merger and acquisition activity.
Discretion should only be exercised for events or items over the performance period that have a
material impact on the outcome.
Adjustments (positive and negative) are made at the time of vesting (there may be more
than one relevant event during the performance period).
•
•
•
•
Table 17: Threshold, Target and Maximum for LTI Plans FY17 to FY20
Performance Condition for
Normalised Earnings Per Share compound average
growthover the performance period
Performance Condition for
Normalised Return On Capital
average over the performance period
Grant
FY17
FY18
FY19
FY20
Threshold (zero
below this, 30% at
this point)
Nil below 10%
Nil below 10%
8%
8%
Midpoint (50%
reward achieved)
Maximum
(100%)
Threshold (zero
below this, 30% at
this point)
Midpoint (50% reward
achieved)
Maximum
(100%)
10%
10%
10%
10%
15%
15%
13%
13%
10%
10%
10%
10%
12%
12%
12%
12%
15%
15%
15%
15%
The Super Retail Group Employee Performance Rights Plan rules are available on the Group’s website. The Human Resources and
Remuneration Committee recommends the design of the LTI plan, metrics and target setting, and the Board holds approval and
discretion over the outcomes.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
62
62
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 26 JUNE 2021
REMUNERATION REPORT
(AUDITED)
63
63
REPORTING PERIOD
ENDED 26 JUNE 2021
Table 18: Key aspects of the LTI plan modifications for the FY21 grant
Financial Years Applicable
The grant for FY21 includes the FY22 opportunity. There will be no grant in FY22.
Allocation Methodology
The notional value of performance rights granted to Executive KMP and other executives is
determined on a face value basis using a volume-weighted average price for Super Retail Group
shares traded on the ASX over a period of five trading days. Usually, the five-day period starts
from the day following the release of the Group’s results for the preceding reporting period.
Following discussions with shareholders, the Board determined that the FY21 grant, should be
based on the average over the five trading days following the trading update on 31 July 2020.
Performance Period
For the FY21 grant, the performance period is the two-year period of the Medium-Term Business
Plan i.e. the combined FY21 and FY22 period.
Performance Hurdles
The FY21 LTI grants are in two equal tranches, half measured against Normalised Profit Before Tax
(NPBT) over the performance period and the remainder measured against normalised Return on
Capital (ROC) averaged over the performance period.
Due to the market sensitive nature of the targets, the Board will disclose the minimum and
maximum performance targets at the end of the performance period, once the outcome has been
finalised.
For the FY21 grant, 50 per cent of rights vest at the minimum (target) performance level and 100
per cent of rights vest at the maximum performance target, with vesting between these points on
a pro-rata basis.
Vesting Schedule
a) NPBT (50 per cent of the Performance Rights)
The percentage of Performance Rights attributed to the NPBT hurdle that is available to vest, if
any, will be determined with reference to the Company’s NPBT performance over the
performance period (from 1 July 2020 to 30 June 2022) as set out in the table below.
NPBT
Percentage of Performance Rights attributed to NPBT
hurdle that become ‘Qualified Performance Rights’ and
are available to vest
Below minimum performance
At minimum performance
Between minimum and
maximum performance
At maximum performance
0%
50%
On a pro-rata basis
100%
b) ROC (50 per cent of the Performance Rights)
The percentage of Performance Rights attributed to the ROC hurdle that is available to vest, if any,
will be determined with reference to the Company’s ROC performance over the performance
period (from 1 July 2020 to 30 June 2022) as set out in the table below.
ROC
Percentage of Performance Rights attributed to ROC
hurdle that become ‘Qualified Performance Rights’ and
are available to vest
Below minimum performance
At minimum performance
Between minimum and
maximum performance
At maximum performance
0%
50%
On a pro-rata basis
100%
Vesting Period
For the FY21 grant, 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:
Two years
Three years
Four years
Proportion of performance rights that vest:
1/3rd of performance rights
1/3rd of performance rights
1/3rd of performance rights
Testing
There is no retesting of performance hurdles under the plan.
Dividends and Voting Rights
Performance rights do not carry voting or dividend rights.
RETENTION ARRANGEMENTS
There are no retention arrangements in place for KMP other than the normal operation of the remuneration framework outlined above.
SERVICE AGREEMENTS
Remuneration and other terms of employment for ongoing Executive KMP are formalised in service agreements. Each of these
agreements provides for participation in STI and LTI arrangements. All service agreements with Executive KMP may be terminated by
either party as shown in Table 19.
Table 19: Key terms of Executive KMP Service Agreements
Name
A M Heraghty
P A Bradshaw
A Brandon
D J Burns
B L Ward
G S Williams
Term of
agreement
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
(1) Commencement date of KMP service agreement.
Agreement
commencement
date(1)
Notice period if
Company terminates
Notice period
if executive
terminates
Commencement
date with
Super Retail Group
20 February 2019
12 months
25 November 2019
31 March 2018
3 October 2018
1 August 2019
2 April 2019
6 months
6 months
6 months
6 months
6 months
9 months
6 months
6 months
3 months
3 months
3 months
27 April 2015
25 November 2019
31 March 2018
3 December 2012
29 July 2019
2 April 2019
Service agreements do not provide for termination payments. However, service agreements specify the notice period required and
notes that the executive may be required to work some or all of the notice period, and the Company reserves the right to pay in lieu of
notice. Hence maximum termination benefit, other than for cause, is equal to the base salary for the Company notice period detailed
in Table 19.
PERIOD OF RESTRAINT
Executive KMP have post-employment restraints within their service agreements. 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, shareholder, unit holder, director, trustee, beneficiary, manager, contractor, adviser or financier),
without first obtaining the consent of the Company in writing. The restraint period is 12 months for all Executive KMP.
SECURITIES TRADING POLICY/HEDGING
Plan participants may not enter into any transaction designed to remove the ‘at risk’ aspect of performance rights.
CLAWBACK POLICY
There is a Clawback Policy within all Executive Incentive plans. 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.
GENDER PAY EQUITY
The Group is committed to remunerating all team members fairly and equitably.
In support of gender pay equity, the Group conducts annual gender pay equity reviews. As a result of this review, we are satisfied no
systemic issues exist regarding gender pay equity. 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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
64
64
64
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
REMUNERATION REPORT
REMUNERATION REPORT
(AUDITED)
(AUDITED)
REPORTING PERIOD
REPORTING PERIOD
ENDED 26 JUNE 2021
ENDED 26 JUNE 2021
REMUNERATION REPORT
(AUDITED)
65
65
REPORTING PERIOD
ENDED 26 JUNE 2021
SECTION 7
SECTION 7
Non-Executive Director Remuneration
Non-Executive Director Remuneration
Arrangements
Arrangements
NON-EXECUTIVE DIRECTOR REMUNERATION STRUCTURE
NON-EXECUTIVE DIRECTOR REMUNERATION STRUCTURE
The Group remuneration strategy is designed to attract and retain experienced, qualified Non-Executive Directors and to remunerate
The Group 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
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.
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
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,
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
and the Human Resources and Remuneration Committees. This reflects the additional time commitment required by the Chairs and
members of these Committees.
members of these Committees.
The Board Chair receives an all-inclusive fee and no other fees (e.g. Committee fees) are received.
The Board Chair receives an all-inclusive fee and no other fees (e.g. Committee fees) are received.
Fees are inclusive of superannuation contributions required by the Superannuation Guarantee legislation.
Fees are inclusive of superannuation contributions required by the Superannuation Guarantee legislation.
Non-Executive Directors may opt each year to receive a proportion of their remuneration in Super Retail Group shares, which would
Non-Executive Directors may opt each year to receive a proportion of their remuneration in Super Retail Group shares, which would
be acquired on market.
be acquired on market.
NON-EXECUTIVE DIRECTOR FEES
NON-EXECUTIVE DIRECTOR FEES
The fees paid to Non-Executive Directors are set out in Table 20 and are annual fees, inclusive of superannuation, unless otherwise
The fees paid to Non-Executive Directors are set out in Table 20 and are annual fees, inclusive of superannuation, unless otherwise
stated.
stated.
NON-EXECUTIVE DIRECTOR REMUNERATION CHANGES IN FY21
NON-EXECUTIVE DIRECTOR REMUNERATION CHANGES IN FY21
There has not been an increase to the base fee for Non-Executive Directors since 2018. At the 2020 AGM, shareholders approved an
There has not been an increase to the base fee for Non-Executive Directors since 2018. At the 2020 AGM, shareholders approved an
increase in the fee pool from $1.2 million to $1.5 million. The Board determined that an increase in Committee fees was appropriate
increase in the fee pool from $1.2 million to $1.5 million. The Board determined that an increase in Committee fees was appropriate
effective 28 October 2020 in line with independent market data.
effective 28 October 2020 in line with independent market data.
Table 20: Effective 28 October 2020
Table 20: Effective 28 October 2020
Annual Fees
Annual Fees
Board
Board
Audit and Risk
Audit and Risk
Committee
Committee
Human Resources and
Human Resources and
Remuneration Committee
Remuneration Committee
Nomination
Nomination
Committee
Committee
Chair(1)
Chair(1)
Members
Members
$313,650
$313,650
$141,143
$141,143
$35,000
$35,000
$15,000
$15,000
$35,000
$35,000
$15,000
$15,000
Nil
Nil
Nil
Nil
(1) Committee fees are not paid to the Chair of the Board.
(1) Committee fees are not paid to the Chair of the Board.
Details of the remuneration of the Non-Executive Directors of the Group are set out in Table 21.
Table 21: Non-Executive Directors Remuneration calculated in accordance with accounting standards
Name
S A Pitkin
S A Chaplain(1)
G T Dunne(1)
P D Everingham(2)
H L Mowlem
R A Rowe
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
Former Non-Executive Directors
D J Eilert (3)
L K Inman(4)
Total
Total
FY21
FY20
FY20
FY21
FY20
Short-term benefits
Post- employment
Total
Cash salary
and fees
$
Cash
bonus
$
Non- monetary
benefits
$
Superannuation
$
Total
$
313,650
313,650
141,127
32,720
141,127
32,720
165,744
147,163
170,152
151,729
128,898
128,898
86,120
156,716
51,550
1,146,818
1,015,146
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
13,407
3,108
13,407
3,108
15,746
13,980
16,164
14,414
12,245
12,245
8,181
14,888
-
79,150
61,743
313,650
313,650
154,534
35,828
154,534
35,828
181,490
161,143
186,316
166,143
141,143
141,143
94,301
171,604
51,550
1,225,968
1,076,889
S A Chaplain and G T Dunne commenced as KMP on 31 March 2020.
(1)
(2) P D Everingham commenced as Chair of the Human Resources & Remuneration Committee from 28 October 2020.
(3) D J Eilert commenced as Chair of the Human Resources & Remuneration Committee from 22 October 2019, ceased in the role as Chair of the Human Resources and Remuneration
Committee with effect from 28 October 2020 and ceased to be a KMP with effect from 31 January 2021.
L K Inman ceased to be a KMP with effect from 22 October 2019.
(4)
Table 22: Non-Executive Director share holding
FY21
Non-Executive Directors
S A Pitkin
R A Rowe
H L Mowlem
P D Everingham
S A Chaplain
G T Dunne
D J Eilert(2)
Held at
27 June 2020
Purchases
Entitlement
Offer
In lieu of
dividends (1)
Other
changes
Held at
26 June 2021
52,153
68,179,269
30,000
40,000
-
-
15,500
-
-
-
-
5,000
8
-
7,452
326,980
4,286
-
-
-
2,215
-
11,474
-
-
-
-
-
-
-
-
-
-
-
(17,715)
59,605
68,517,723
34,286
40,000
5,000
8
-
Shareholders are eligible to receive dividends in cash or choose to participate in the dividend reinvestment plan.
(1)
(2) D J Eilert ceased as KMP therefore shares disclosed as KMP become nil.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
66
66
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 26 JUNE 2021
REMUNERATION REPORT
(AUDITED)
67
67
REPORTING PERIOD
ENDED 26 JUNE 2021
MINIMUM SECURITIES HOLDING POLICY
The Minimum Securities Holding Policy is available on the Group’s website. Non-Executive Directors are required to acquire within
five years of their appointment, and hold thereafter, securities to the value of their base fee.
SECTION 8
Remuneration Governance
NO PERFORMANCE BASED FEES
Non-Executive Directors do not receive performance-related remuneration.
NO TERMINATION PAYMENTS
Non-Executive Directors are not eligible for termination payments on resignation or retirement from the Board or to receive
retirement benefits other than legislated requirements such as the Superannuation Guarantee in Australia.
RETIREMENT BENEFITS
Retirement benefits for Non-Executive Directors are provided only to the extent required by legislation.
LOANS TO KMP AND THEIR RELATED PARTIES
There are no loans to KMP and their related parties as at 26 June 2021 and no loans were made during the financial year.
OTHER TRANSACTIONS WITH KMP
Dividends paid to KMP as shareholders in the reporting period amounted to $36,125,381 (FY20: $17,135,677). Other payments made
to Non-Executive Director R A Rowe in the form of store lease payments during the reporting period amounted to $9,553,918 (FY20:
$9,611,168). Rent payable at year-end was nil (FY20: $750,802). Rent on properties is negotiated on an arm’s length basis. There were
no other transactions with KMP during the reporting period. No other KMP held positions in other companies that transacted with
the Group in the reporting period.
INSURANCE OF OFFICERS
During the financial year, the Group has paid premiums to ensure 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.
Consistent with the provisions of the Constitution, the Group has also entered into deeds of access, indemnity and insurance with all
directors, officers, and certain managers of the Group which provide indemnities against the full amount of any liabilities, costs and
expenses (including legal fees) incurred in their roles, subject to certain exclusions, including to the extent that such indemnity is
prohibited by the Corporates Act 2001 or other applicable law.
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 monitor the governance, management and performance of the Group.
The Board is supported through three standing Board Committees, specifically the Audit and Risk Committee, the Nomination
Committee and the 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.
The Corporate Governance Statement (available on the Group’s website) provides further information about the role of the Human
Resources and Remuneration Committee (the 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 26 June 2021.
The Board Charter, and the Charters for each Board Committee are also available in the Corporate Governance section of the Group’s
website. The Charter for the Human Resources and Remuneration Committee includes the objectives of the Remuneration
framework.
Table 23: Governance framework
Board
Human Resources and
Remuneration Committee
Remuneration Advisors
The Board approves the company-wide
remuneration strategy, policy and
framework. The Board must satisfy
itself that these arrangements are
consistent with the Company’s
purpose, statement of values, code of
conduct, strategic objectives and
Board’s Risk Appetite Statement.
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.
The Human Resources and
Remuneration Committee reviews and
makes 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
resources 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.
The Human Resources and
Remuneraiton 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 FY21, the Board received
market benchmark data from external
remuneration advisers but did not
receive remuneration
recommendations as defined in the
Corporations Act.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
68
68
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period ended 26 June 2021
69
69
2020
$m
2,825.2
0.2
2,825.4
Notes
5
2021
$m
3,453.1
0.4
3,453.5
(1,797.2)
(1,555.1)
(438.7)
(102.5)
(213.3)
(433.0)
(41.0)
(0.2)
(371.2)
(79.1)
(204.9)
(403.6)
(55.1)
(0.6)
(3,025.9)
(2,669.6)
427.6
(126.6)
301.0
301.0
2.5
1.3
(0.3)
3.5
304.5
155.8
(45.6)
110.2
110.2
(1.3)
2.3
(1.5)
(0.5)
109.7
6
6
14
19
19
19
CONTINUING OPERATIONS
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
- administration
Net finance costs
Share of net loss of associates and joint ventures
Total expenses
Profit before income tax
Income tax expense
Profit for the period
Profit for the period is attributable to:
Owners of Super Retail Group Limited
OTHER COMPREHENSIVE INCOME
Items that may be reclassified to profit or loss
Gains / (losses) on cash flow hedges
Hedging losses reclassified to profit or loss
Exchange differences on translation of foreign operations
Other comprehensive income for the period, net of tax
Total comprehensive income for the period
Total comprehensive income for the period is attributable to:
Owners of Super Retail Group Limited
304.5
109.7
Earnings per share for profit attributable to the ordinary equity holders of
the Company:
Basic earnings per share
Diluted earnings per share
17
17
133.4
132.1
55.8
55.3
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
Financial
Report
F O R T H E Y E A R E N D E D
2 6 J U N E 2 0 2 1
Super Retail Group Limited
ABN: 81 108 676 204
ASX Code: SUL
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
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SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
71
71
CONSOLIDATED BALANCE SHEET
As at 26 June 2021
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 26 June 2021
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Derivative financial instruments
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Right-of-use assets
Deferred tax assets
Other financial assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Lease liabilities
Current tax liabilities
Provisions
Derivative financial instruments
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Provisions
Total non-current liabilities
Total liabilities
NET ASSETS
EQUITY
Contributed equity
Reserves
Retained earnings
TOTAL EQUITY
Notes
7
8
16
9
10
11
14
24(b)
12
11
14
15
16
13
11
15
18
19
19
2021
$m
242.3
38.4
696.4
3.6
980.7
219.9
866.9
894.3
4.7
6.1
1,991.9
2,972.6
563.4
193.9
69.5
97.0
-
923.8
-
795.7
26.6
822.3
1,746.1
1,226.5
740.7
17.6
468.2
1,226.5
2020
$m
285.1
26.3
502.4
-
813.8
227.8
874.3
848.0
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
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
Contributed
Equity
Reserves
Retained
Earnings
Total
Non-
Controlling
Interests
Total
Equity
$m
$m
$m
$m
Notes
$m
Balance at 29 June 2019
Change in accounting policy – AASB 16
Restated total equity at 29 June 2019
Profit for the period
Other comprehensive loss for the period
Total comprehensive income for the period
Transactions with owners in
their capacity as owners
Contributions of equity, net of transaction costs
Dividends provided for or paid
Employee performance rights
Change in ownership interest in controlled entities
18
22
19
24(a)
Balance at 27 June 2020
Profit for the period
Other comprehensive loss for the period
Total comprehensive income for the period
Transactions with owners in
their capacity as owners
Contributions of equity, net of transaction costs
Dividends provided for or paid
Employee performance rights
18
22
19
542.3
-
542.3
-
-
-
155.8
-
-
-
155.8
698.1
-
-
-
42.6
-
-
42.6
$m
8.2
-
8.2
-
(0.5)
(0.5)
-
-
0.2
(0.4)
(0.2)
7.5
-
3.5
3.5
265.9
(34.2)
231.7
110.2
-
110.2
-
(56.2)
-
-
(56.2)
285.7
301.0
-
301.0
816.4
(34.2)
782.2
110.2
(0.5)
109.7
155.8
(56.2)
0.2
(0.4)
99.4
991.3
301.0
3.5
304.5
-
-
6.6
6.6
-
(118.5)
-
(118.5)
42.6
(118.5)
6.6
(69.3)
Balance at 26 June 2021
740.7
17.6
468.2
1,226.5
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
(0.4)
-
(0.4)
-
-
-
-
-
-
0.4
0.4
-
-
-
-
-
-
-
-
-
816.0
(34.2)
781.8
110.2
(0.5)
109.7
155.8
(56.2)
0.2
-
99.8
991.3
301.0
3.5
304.5
42.6
(118.5)
6.6
(69.3)
1,226.5
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
72
72
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended 26 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the period ended 26 June 2021
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 computer software
Proceeds from sale of property, plant and equipment
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
Notes
20
24(a)
22
2021
$m
3,823.9
(3,101.8)
(46.8)
(75.3)
600.0
(85.0)
0.5
-
(84.5)
-
(250.0)
(188.1)
(1.1)
(41.9)
41.4
(118.5)
(558.2)
(42.7)
285.1
(0.1)
242.3
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
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Segment information
Revenue and other income from continuing operations
Expenses from continuing operations
TABLE OF CONTENTS
Reporting entity
Summary of significant accounting policies
Critical accounting estimates and judgements
Basis of Preparation
1.
2.
3.
Group Performance
4.
5.
6.
Assets and Liabilities
Trade and other receivables
7.
Inventories
8.
Property, plant and equipment
9.
Intangible assets
10.
Leases
11.
Trade and other payables
12.
Borrowings
13.
Income taxes
14.
Provisions
15.
16.
Financial assets and financial liabilities
Capital Structure, Financing and Risk Management
17.
18.
19.
20.
21.
22.
Group Structure
23.
24.
25.
26.
27.
Other
28.
29.
30.
31.
32.
33.
34.
Key management personnel disclosures
Share-based payments
Remuneration of auditors
Contingencies
Commitments
Net tangible asset backing
Events occurring after balance date
Related party transactions
Business combinations
Deed of cross guarantee
Parent entity financial information
Investments in controlled entities
Earnings per share
Contributed equity
Reserves and retained earnings
Reconciliation of profit after income tax to net cash inflow from operating activities
Financial risk management
Capital management
73
73
74
74
77
78
81
81
83
84
84
86
89
91
91
92
96
98
101
102
103
104
105
111
112
113
114
116
117
118
118
120
120
120
121
121
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
74
74
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
75
75
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
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 26 June 2021 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 26 June
2021 and the results of its controlled entities for the period then ended. The effects of all transactions between entities in the consolidated
Group 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 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 24 - 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.
2.
(b)
Summary of significant accounting policies (continued)
Principles of consolidation (continued)
Business combinations (continued)
(iii)
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, the difference is recognised
directly in profit or loss as a bargain purchase.
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 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
remeasured to fair value with changes in fair value recognised in profit or loss.
Investments in associates and joint ventures
(iv)
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.
Equity method
(v)
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 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.
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 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 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 policies adopted by
the Group.
Changes in ownership interests
(vi)
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-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 of Super Retail Group Limited.
When the Group ceases to consolidate or equity account for an investment because of a loss of control, joint control or significant influence,
any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss. This fair value
becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or
financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as
if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other
comprehensive income are reclassified to profit or loss.
If the ownership interest in a joint venture or an associate is reduced but joint control or significant influence is retained, only a proportionate
share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate.
Comparatives
(vii)
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.
(c)
Foreign currency translation
Functional and presentation currency
(i)
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 Australian
dollars, which is Super Retail Group Limited’s functional and presentation currency.
Transactions and balances
(ii)
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-end exchange rates of
monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss, except when deferred in equity as qualifying
cash flow hedges and qualifying net investment hedges.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
76
76
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
77
77
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
2.
(c)
Summary of significant accounting policies (continued)
Foreign currency translation (continued)
Transactions and balances (continued)
(ii)
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 fair value through other comprehensive income,
are included in the fair value reserve in other comprehensive income.
Group companies
(iii)
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:
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;
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 translated at the dates
of the transactions); and
all resulting exchange differences are recognised as a separate component in other comprehensive income.
(d)
Goods and Services Tax
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.
2.
(g)
Summary of significant accounting policies (continued)
New and amended standards adopted by the Group (continued)
As a result of this change in accounting policy, the Group has determined that costs totalling $5.4 million relating to the implementation of
SaaS arrangements should have been expensed when they were incurred, as the amounts were paid to the suppliers of the SaaS
arrangements, other third parties, or employees who did not create separate intangible assets controlled by the Group, or were paid to the
suppliers of the SaaS arrangements who did not significantly customise the cloud-based software for the Group. In addition, the Group also
reclassified costs of $1.3 million paid to the suppliers of the SaaS arrangements to significantly customise the cloud-based software for the
Group, from intangible assets to prepayments.
The reclassification of costs has been recorded during the current period ended 26 June 2021 with $5.4 million recognised in the consolidated
statement of comprehensive income and $1.3 million reclassified to prepayments. Included in the costs totalling $5.4 million is an amount
of $4.0 million relating to prior years, the tax effect of which is $1.2 million. The costs in relation to the prior period were individually and in
aggregate not material from a quantitative and qualitative perspective.
(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 the 26 June 2021 reporting period
and have not been early adopted by the Group. These standards are not expected to have a material impact on the Group in the current or
future reporting periods or on foreseeable future transactions.
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 Group and that are believed to be reasonable under the circumstances.
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.
(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 7 – Trade and other receivables;
Note 8 – Inventories;
Note 9 – Property, plant and equipment;
Note 10 – Intangible assets;
Note 11 – Leases;
Note 12 – Trade and other payables;
Note 15 – Provisions;
Note 24 – Business combinations;
Note 29 – Share-based payments.
(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 26 June 2021, the Group is reporting on the 52 week period that began 28 June 2020 and
ended 26 June 2021. 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.
(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 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 2019-3 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform [AASB 9, AASB 139 and AASB 7]
AASB 2019-5 Amendments to Australian Accounting Standards – Disclosure of the Effect of New IFRS Standards Not Yet issued in Australia
[AASB 1054]
Conceptual Framework for Financial Reporting and AASB 2019-1 Amendments to Australian Accounting Standards – References to the
Conceptual Framework
The amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect
the current or future periods.
Change in accounting policy
The Group previously capitalised costs incurred in configuring or customising Software-as-a-Service (SaaS) arrangements as intangible assets,
as the Group considered that it would benefit from those costs to implement the SaaS arrangements over the renewable term of the
arrangements. Following the IFRS Interpretations Committee agenda decision on Configuration or Customisation Costs in a Cloud Computing
Arrangement in March 2021, the Group has reconsidered its accounting treatment and adopted the treatment set out in the IFRS IC agenda
decision, which is to recognise those costs as intangible assets only if the implementation activities create an intangible asset that the Group
controls and the intangible asset meets the recognition criteria. Costs that do not result in intangible assets are expensed as incurred, unless
they are paid to the suppliers of the SaaS arrangement to significantly customise the cloud-based software for the Group, in which case the
costs are recorded as a prepayment for services and amortised over the expected renewable term of the arrangement.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
78
78
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
79
79
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
4.
(a)
Segment information
Description of segments
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 reportable operating
segments. This results in the following business segments:
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.
(b)
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. 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 of normal operations.
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 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).
For the period ended 26 June 2021
SCA
$m
rebel
$m
BCF
$m
Macpac
$m
Total
continuing
operations
$m
Inter-segment
eliminations/
unallocated
$m
Consolidated
$m
Segment Revenue and Other Income
External segment revenue
Inter segment sales
Other income
Total segment revenue and other income
Segment EBITDA(1)
Segment depreciation and amortisation(2)
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
1,308.8
-
-
1,308.8
315.7
(111.5)
204.2
(11.9)
192.3
1,197.0
-
0.1
1,197.1
285.9
(105.9)
180.0
(13.3)
166.7
797.7
-
-
797.7
167.1
(61.9)
105.2
(8.8)
96.4
149.6
3.8
0.2
153.6
35.7
(17.6)
18.1
(1.2)
16.9
3,453.1
3.8
0.3
3,457.2
804.4
(296.9)
507.5
(35.2)
472.3
-
(3.8)
0.1
(3.7)
(28.2)
(2.5)
(30.7)
(5.8)
(36.5)
Profit for the period
Segment Assets and Liabilities
Inventory
Trade payables
Net inventory investment
Footnote item
Execution costs to complete remediation
Equity accounted losses – Autoguru
Provision reversals from previous years
276.2
(219.3)
56.9
191.4
(96.3)
95.1
186.9
(68.4)
118.5
42.4
(5.7)
36.7
696.9
(389.7)
307.2
(0.5)
(59.2)
(59.7)
(1) Segment EBITDA
adjusted for
(2) Segment D&A
adjusted for
$m
8.8
0.2
(0.8)
8.2
$m
-
-
-
-
(3) Segment
income tax
adjusted for
$m
(4) Other items not
included in total
segment NPAT
$m
2.6
-
(0.2)
2.4
6.2
0.2
(0.6)
5.8
3,453.1
-
0.4
3,453.5
776.2
(299.4)
476.8
(41.0)
435.8
(129.0)
306.8
(5.8)
301.0
301.0
696.4
(448.9)
247.5
4.
(b)
Segment information (continued)
Segment information provided to the Group Managing Director and Chief Executive Officer (continued)
For the period ended 27 June 2020
SCA
$m
rebel
$m
BCF
$m
Macpac
$m
Total
continuing
operations
$m
Inter-
segment
eliminations/
unallocated
$m
Consolidated
$m
1,119.7
-
1,119.7
242.0
(100.4)
141.6
(12.4)
129.2
Segment Revenue and Other Income
External segment revenue
Other income
Total segment revenue and other income
Segment EBITDA(1)
Segment depreciation and amortisation(2)
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
Profit for the period
1,038.6
0.1
1,038.7
205.1
(94.5)
110.6
(14.6)
96.0
535.0
0.1
535.1
79.3
(55.9)
23.4
(8.4)
15.0
131.9
-
131.9
25.0
(17.3)
7.7
(1.9)
5.8
2,825.2
0.2
2,825.4
551.4
(268.1)
283.3
(37.3)
246.0
-
-
-
(18.2)
(0.1)
(18.3)
(17.8)
(36.1)
Segment Assets and Liabilities
Inventory
Trade payables
Net inventory investment
189.8
(177.0)
12.8
140.1
(68.8)
71.3
128.9
(55.7)
73.2
43.6
(5.7)
37.9
502.4
(307.2)
195.2
-
(28.0)
(28.0)
2,825.2
0.2
2,825.4
533.2
(268.2)
265.0
(55.1)
209.9
(61.7)
148.2
(38.0)
110.2
110.2
502.4
(335.2)
167.2
Footnote item
Team member underpayment remediation
Execution costs to complete remediation
Accelerated asset amortisation to support
information technology move to cloud
Support office restructure costs
Interest rate swaps early termination
Closure costs of non-core businesses – Infinite
Retail and Autocrew
Equity accounted losses – Autoguru
Provision reversals from previous years
(1) Segment EBITDA
adjusted for
(2) Segment D&A
adjusted for
$m
14.7
9.7
13.7
7.9
6.0
2.8
0.6
(1.3)
54.1
$m
-
-
13.7
-
-
0.3
-
-
14.0
(3) Segment
income tax
adjusted for
$m
(4) Other items not
included in total
segment NPAT
$m
4.4
2.9
4.1
2.4
1.8
0.8
-
(0.3)
16.1
10.3
6.8
9.6
5.5
4.2
2.0
0.6
(1.0)
38.0
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
80
80
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
81
81
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
4.
(c)
Segment information (continued)
Other information
Revenue is attributable to the country on which the sale of goods has transacted. The Group’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.
Total revenue and other income from continuing operations
(i)
Australia
New Zealand
Total non-current assets
(ii)
Australia
New Zealand
Significant Accounting Policies
2021
$m
3,234.6
218.9
3,453.5
1,791.1
200.8
1,991.9
2020
$m
2,644.7
180.7
2,825.4
1,765.0
196.3
1,961.3
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).
5.
Revenue and other income from continuing operations
Revenue from the sale of goods
Other income
Sundry
Total revenues and other income
Significant Accounting Policies
2021
$m
3,453.1
0.4
3,453.5
2020
$m
2,825.2
0.2
2,825.4
Revenue from the sale of goods is recognised when a Group entity sells a product to the customer.
Sale of goods – retail
Revenue associated with the sale of goods is recognised when the performance obligation of the sale has been fulfilled and control of the
goods has transferred to the customer, which occurs at the point of sale when the goods are collected or delivered.
Gift cards are considered a prepayment for goods and services to be delivered in the future. The Group has an obligation to transfer the
goods or services in the future, creating a performance obligation. The Group recognises deferred revenue for the amount of the
prepayment and recognises revenue when the customer redeems the gift card and the Group fulfils the performance obligation related
to the transaction or likelihood of the gift card being redeemed by the customer is deemed remote.
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). As 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.
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
Depreciation
Right-of-use assets
Plant and equipment
Motor vehicles
Computer equipment
Total depreciation
Amortisation and impairment
Computer software amortisation
Right-of-use asset impairment
Total amortisation and impairment
2021
$m
(0.2)
0.2
191.9
54.1
0.0
15.4
261.4
38.0
0.9
38.9
2020
$m
(0.6)
0.6
180.2
41.9
0.1
13.9
236.1
46.1
-
46.1
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
82
82
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
83
83
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
6.
Expenses from continuing operations (continued)
7.
Trade and other receivables
Profit before income tax includes the following specific gains and expenses:
Net finance costs
Interest and finance charges on bank facilities
Interest on lease liabilities
Net finance costs
Employee benefits expense
Superannuation
Salaries and wages(1)
Total employee benefits expense
(1) Excludes impact of government grant received disclosed below.
Government grant received
Australian JobKeeper for Macpac Retail Pty Ltd
New Zealand wage subsidy for Super Cheap Auto (New Zealand) Pty Limited and Macpac New
Zealand Limited
Total government grant revenue
Rental expense relating to leases
Lease expenses
Equipment hire
Total rental expense relating to leases(2)
2021
$m
5.8
35.2
41.0
43.3
603.7
647.0
-
-
-
41.3
3.6
44.9
2020
$m
17.8
37.3
55.1
39.3
544.4
583.7
(1.6)
(4.9)
(6.5)
47.3
3.2
50.5
(2) The impact of applying AASB 16 Leases was a decrease of $218.5 million in rental expense to 26 June 2021 (2020: $204.5 million).
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.
(5.1)
(7.7)
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
Refer to Note 11 for details on leases.
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
2021
$m
15.0
(0.4)
14.6
9.9
13.9
38.4
2020
$m
10.9
(0.5)
10.4
7.7
8.2
26.3
As at 26 June 2021 current trade receivables of the Group with a nominal value of $0.4 million (2020: $0.5 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 26 June 2021, trade receivables of $3.9 million (2020: $4.4 million) were past their payment terms 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:
30 to 60 days
60 to 90 days
90 days and over
Significant Accounting Policies
2021
$m
2.2
0.8
0.9
3.9
2020
$m
1.6
0.2
2.6
4.4
Trade receivables
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. This is a minor
portion of the Group’s revenue. 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.
Prepayments
Costs paid to suppliers of SaaS arrangements to significantly customise cloud-based software are recorded as a prepayment for services
and are amortised over the expected renewable term of the arrangement.
Critical accounting estimates and assumptions
Prepayments
The Group uses judgement to determine whether costs paid to suppliers of SaaS arrangements relate to significant customisation of the
cloud-based software.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
84
84
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
85
85
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
8.
Inventories
9.
Property, plant and equipment (continued)
Finished goods, at lower of cost or net realisable value
(a)
Inventory expense
2021
$m
696.4
2020
$m
502.4
Inventories recognised as expense during the period ended 26 June 2021 amounted to $1,710.8 million (2020: $1,475.0 million).
Write-downs of inventories to net realisable value recognised as an expense during the period ended 26 June 2021 amounted to $1.3 million
(2020: $10.2 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
Computer equipment, at cost
Less accumulated depreciation
Net computer equipment
Total net property, plant and equipment
(a)
Reconciliations
2021
$m
444.4
(257.0)
187.4
87.4
(54.9)
32.5
219.9
Reconciliations of the carrying amounts for each class of property, plant and equipment are set out below:
2021
Carrying amounts at 27 June 2020
Additions
Depreciation
Disposals
Carrying amounts at 26 June 2021
Plant and equipment
$m
197.2
44.7
(54.1)
(0.4)
187.4
Computer
equipment
$m
30.6
17.3
(15.4)
-
32.5
2020
$m
421.5
(223.3)
197.2
100.6
(70.0)
30.6
227.8
Total
$m
227.8
62.0
(69.5)
(0.4)
219.9
2020
Carrying amounts at 29 June 2019
Additions
Depreciation
Disposals
Change in accounting policy – AASB 16
Foreign currency exchange differences
Carrying amounts at 27 June 2020
Significant Accounting Policies
Plant and equipment
$m
227.3
29.7
(42.0)
(0.6)
(17.4)
0.2
197.2
Computer
equipment
$m
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
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 profit or loss 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 Group. 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
Computer equipment
6.7% – 25%
20% – 33.3%
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 profit or loss. 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.
Critical accounting estimates and assumptions
Impairment
Assets that are subject to depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value-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).
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
86
86
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
87
87
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
10.
Intangible assets
Goodwill, at cost
Less accumulated impairment charge
Net goodwill
Computer software, at cost
Less accumulated amortisation
Net computer software
Brand names, at cost
Less accumulated amortisation and impairment charge
Net brand names
Total net intangible assets
Reconciliations
(a)
Reconciliations of the carrying amounts for each class of intangible asset are set out below:
2021
Carrying amounts at 27 June 2020
Additions
Disposals
Amortisation charge
Change in accounting policy – Cloud computing
arrangements
Carrying amounts at 26 June 2021
2020
Carrying amounts at 29 June 2019
Additions
Amortisation charge(1)
Change in accounting policy – AASB 16
Goodwill
$m
Computer
Software
$m
526.6
-
-
-
-
526.6
526.5
0.1
-
-
94.4
35.0
(0.1)
(38.0)
(4.3)
87.0
114.4
27.5
(46.1)
(1.4)
Carrying amounts at 27 June 2020
(1) Includes $13.7m of accelerated amortisation on software intangibles as a result of change in useful life assumptions.
526.6
94.4
2021
$m
528.7
(2.1)
526.6
221.4
(134.4)
87.0
311.8
(58.5)
253.3
866.9
Brand
Name
$m
253.3
-
-
-
-
253.3
253.3
-
-
-
253.3
2020
$m
528.7
(2.1)
526.6
262.8
(168.4)
94.4
311.8
(58.5)
253.3
874.3
Total
$m
874.3
35.0
(0.1)
(38.0)
(4.3)
866.9
894.2
27.6
(46.1)
(1.4)
874.3
10.
Intangible assets (continued)
(b)
Impairment tests for goodwill (continued)
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 a five-year
period. 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.
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 growth
rate and the discount rate. A pre-tax discount rate of 11.7 per cent (2020: 11.7 per cent) and terminal growth rate of 2.5 per cent (2020: 2.5
per cent) have been assumed. Projected sales are based on the business plans described above. Budgeted EBITDA margin is determined
based on past performance and expectations for the future.
The VIU model assumes that the positive COVID-19 trading impact experienced in 2021 will continue for a portion of 2022 and then previously
experienced revenue and growth will return.
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 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 26 June 2021. Management do not consider that
a reasonably possible change in any of the key assumptions for any of the CGUs, would cause their carrying amounts to exceed their
recoverable amounts.
Macpac
Macpac last year suffered a 35.3 per cent decline in Segment EBITDA (pre-AASB 16). 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 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 last financial year. While not impaired, Macpac was
sensitive to reasonably possible changes in key assumptions in the prior financial year.
During the current financial year, Macpac has achieved a 42.8 per cent increase in Segment EBITDA compared to the prior comparative period.
EBITDA margin has increased 4.2 percentage points to 23.2 per cent. This growth exceeds assumptions used in impairment calculations
performed last financial year. Key assumptions used in the VIU calculations this financial year include sales growth (% compound annual
growth rate over five years) of 7.3 per cent (2020: 7.4 per cent) and pre-AASB 16 Segment EBITDA margin increase of 1.9 percentage points
(2020: 5.6 percentage points). If the sales compound growth rate were to decline to 3.4 per cent this would cause the carrying amount of
the Macpac CGU to exceed its recoverable amount, and if the EBITDA margin rate expansion were to decline 0.6 percentage points, instead
of increase 1.9 percentage points, then this would also cause the carrying amount of the Macpac CGU to exceed its recoverable amount.
(c)
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 indefinite
useful lives.
Key factors taken into account in assessing the useful life of brands were:
the strong recognition of brands; and
the absence of legal, technical or commercial factors indicating that the life should be considered limited.
(b)
Impairment tests for goodwill
The carrying values of the purchased brand names are:
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:
CGU
Supercheap Auto
rebel
BCF
Macpac
Total
2021
$m
45.3
376.6
25.1
79.6
526.6
2020
$m
45.3
376.6
25.1
79.6
526.6
Brand
rebel
Macpac
Total
2021
$m
209.0
44.3
253.3
2020
$m
209.0
44.3
253.3
Key assumptions used for value-in-use calculations
Management have applied two key assumptions in the VIU analysis across each business segment CGU, a pre-tax discount rate of 11.7 per
cent (2020: 11.7 per cent) and terminal growth rate of 2.5 per cent (2020: 2.5 per cent). Budgeted gross margin is determined based on past
performance and expectations for the future.
The recoverable amount of the brand names currently exceed 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 amounts.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
88
88
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
89
89
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
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.
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:
Computer software
Brand names
10% – 33.3%
Nil
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, direct employee costs and an appropriate portion of relevant overheads. IT development
costs include only those costs directly attributable to the development phase and are recognised only following completion of technical
feasibility and where the Group has an intention and ability to use the asset.
Costs incurred in configuring or customising SaaS arrangements can be recognised only as intangible assets if the implementation activities
create an intangible asset that the Group controls and the intangible asset meets the recognition criteria. Those costs that do not result in
intangible assets are expensed as incurred, unless they are paid to the suppliers of the SaaS arrangements to significantly customise the
cloud-based software for the Group, in which case the costs are recorded as a prepayment for services and amortised over the expected
renewable term of the arrangement.
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.
Trademarks and licences
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.
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.
Capitalised software and SaaS arrangements
The Group uses judgement to determine whether implementation activities of SaaS arrangements create an intangible asset that the
Group controls.
10.
Intangible assets (continued)
Critical accounting estimates and assumptions (continued)
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.
11.
Leases
Right-of-use assets
Properties
Computer equipment
Total right-of-use assets
Lease liabilities
Current
Non-current
Total lease liabilities
2021
$m
893.8
0.5
894.3
193.9
795.7
989.6
2020
$m
842.0
6.0
848.0
178.4
760.9
939.3
Additions to the right-of-use assets during the year were $269.0 million (2020: $194.0 million).
At 26 June 2021, the Group had committed to leases that had not yet commenced. The Group has estimated that the potential future lease
payments would result in an increase in undiscounted lease liabilities of $80.5 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 sales of goods 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 $223.3 million (2020: $209.1 million).
2021
$m
186.4
5.5
191.9
35.2
12.8
3.6
29.7
2020
$m
177.3
2.9
180.2
37.3
20.0
3.2
28.4
Impact of COVID-19
In 2020 the Group adopted the practical expedient as permitted 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 nil during the current period (2020: $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.
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
90
90
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
91
91
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
11.
Leases (continued)
Significant Accounting Policies (continued)
Leases (continued)
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.
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.
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.
A corresponding asset is taken up as part of the right-of-use asset at that time. Expected future payments are discounted using appropriate
market yields at reporting date.
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 currently considers leases with more than three years to expiry
as not reasonably certain to be extended. A strategic store network review approved by the Board, was performed during the year,
delivering higher confidence over network plans covering the next three years, resulting in option assumptions being revised for 160
leases. This had the impact of increasing lease liabilities and the corresponding right-of-use assets by $135.7 million. Of the Group’s lease
portfolio 64% (2020: 65%) of leases contain option renewals. The lease liability currently includes extension options in the calculation of
lease term for 25% (2020: 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
Gift card deferred revenue
Other payables
Total current trade and other payables
Significant Accounting Policies
2021
$m
448.9
42.5
72.0
563.4
2020
$m
335.2
31.4
75.7
442.3
Trade and other payables
Trade and other payables are payables for goods and services provided to the Group 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. Refer Note 5 – Revenue and other
income from continuing operations for the Group’s policy on Gift Cards.
The Group participates in a supply chain finance program (SCF) under which its suppliers may elect to receive early payment of their invoice
from a bank by factoring their receivable from the Group. Under the arrangement, a bank agrees to pay amounts to a participating supplier
in respect of invoices owed by the Group and receives settlement from the Group at a later date. The supplier engages directly with the
bank. The principal purpose of this programme is to facilitate efficient payment processing and enable the willing suppliers to sell their
receivables due from the Group to a bank before their due date. The Group does not control which suppliers elect to enter into the
arrangement, as this is at the sole discretion of the supplier.
The Group has not derecognised the original liabilities to which the arrangement applies because neither a legal release was obtained, nor
was the original liability substantially modified on entering into the arrangement. From the Group’s perspective, the arrangement does
not significantly extend payment terms beyond the normal terms agreed with other suppliers that are not participating. The Group does
not incur any additional interest towards the bank on the amounts due to the suppliers. The Group therefore discloses the amounts
factored by suppliers within trade payables because the nature and function of the financial liability remain the same as those of other
trade payables. The payments to the bank are included within operating cash flows.
13.
Borrowings
Non-current
Bank debt funding facility - unsecured(1)
2021
$m
-
2020
$m
247.8
Total non-current borrowings
247.8
(1)Net of borrowing costs capitalised of $2.2 million at 27 June 2020. Capitalised borrowing costs of $2.0 million as at 26 June 2021 are presented in Trade
-
and other receivables as a prepayment (refer note 7).
(a)
Reconciliation of liabilities arising from financing activities
27 June 2020
$m
Cash flows
$m
Non-cash
Amortisation
$m
Bank debt funding facility
Capitalised borrowing costs
Total
250.0
(2.2)
247.8
(250.0)
(1.1)
(251.1)
-
1.3
1.3
29 June 2019
$m
Cash flows
$m
Non-cash
Amortisation
$m
Bank debt funding facility
Capitalised borrowing costs
Total
390.0
(3.0)
387.0
(140.0)
(0.2)
(140.2)
-
1.0
1.0
Reclassed to
Trade and Other
Receivables
$m
-
2.0
2.0
Reclassed to
Trade and Other
Receivables
$m
-
-
-
26 June 2021
$m
-
-
-
27 June 2020
$m
250.0
(2.2)
247.8
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 profit or loss over the
period of the borrowings using the effective interest method.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
92
92
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
93
93
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
14.
Income taxes
Income tax expense
(a)
Current tax expense
Deferred tax (benefit)
Adjustments to tax expense of prior periods
Deferred income tax (revenue) included in income tax expense comprises:
(Increase) in deferred tax assets (Note 14(e))
Increase / (decrease) in deferred tax liabilities (Note 14(e))
Reconciliation between tax expense and pre-tax profit
(b)
Profit before income tax from continuing operations
Tax at the Australian tax rate of 30% (2020: 30%)
Tax effect of amounts not (taxable) / deductible 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
Reconciliation of income tax expense to income tax payable
(c)
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)
Amounts recognised directly in equity
(d)
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 charged / (credited) directly to equity (Note 14(e))
Tax expense relating to items of other comprehensive income
Cash flow hedges
Lease accounting on adoption of AASB 16 Leases
Provisions – change in accounting policy AASB 16 Leases
2021
$m
127.8
(1.4)
0.2
126.6
(14.5)
13.1
(1.4)
427.6
128.3
(1.2)
127.1
(0.3)
(0.1)
(0.3)
0.2
126.6
29.7%
29.6%
(126.6)
2.2
(2.3)
(0.8)
15.6
(16.1)
2.5
(2.7)
(128.2)
58.7
(69.5)
1.6
1.6
1.6
-
-
1.6
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%
(45.6)
(9.2)
(1.3)
(3.7)
0.3
(2.9)
0.7
2.2
(59.5)
42.4
(17.1)
(14.1)
(14.1)
0.4
(25.9)
11.4
(14.1)
14.
Income taxes (continued)
Deferred tax assets and liabilities
(e)
Assets
Provisions
Accruals and prepayments
Depreciation
Lease liabilities
Tax losses
Sundry temporary differences
Amounts recognised directly in equity
Cash flow hedges
Set off with deferred tax liabilities
Net deferred tax assets
Liabilities
Brand values
Depreciation
Right-of-use assets
Sundry temporary differences
Amounts recognised directly in equity
Cash flow hedges
Set-off of deferred tax assets
Net deferred tax liabilities
Net deferred tax assets
Movements in deferred tax assets:
Opening balance
Credited to the income statement
(Charged) / credited to equity
Closing balance
Deferred tax assets to be recovered after more than 12 months
Deferred tax assets to be recovered within 12 months
Movements in deferred tax liabilities:
Opening balance
Charged / (credited) to the income statement
Charged to equity
Closing balance
Deferred tax liabilities to be settled after more than 12 months
Deferred tax liabilities to be settled within 12 months
2021
$m
29.0
13.6
15.6
295.4
0.4
4.0
358.0
-
358.0
(353.3)
4.7
75.3
10.6
265.4
1.0
352.3
1.0
353.3
(353.3)
-
4.7
344.1
14.5
(0.6)
358.0
265.6
92.4
358.0
339.2
13.1
1.0
353.3
353.3
-
353.3
2020
$m
26.5
13.0
21.2
278.1
3.1
1.6
343.5
0.6
344.1
(339.2)
4.9
75.3
14.0
248.7
1.2
339.2
-
339.2
(339.2)
-
4.9
67.1
13.7
263.3
344.1
311.3
32.8
344.1
90.5
(0.5)
249.2
339.2
339.2
-
339.2
(f)
Tax losses
Unrecognised deferred tax assets
7.7
7.5
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
94
94
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
95
95
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
14.
(g)
Income taxes (continued)
Tax transparency report
14.
(g)
Income taxes (continued)
Tax transparency report (continued)
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. Super Retail Group’s success is
dependent on the wellbeing of the economies and communities where the businesses operate and our conservative approach to tax strategy
is one of the many ways the Group acts to ensure sustainability of our operations.
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 2021 and 2020 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 prices 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 Chinese-based subsidiaries that co-ordinates these supplies. Super Retail Group’s
Australian businesses pay the overseas subsidiaries for these services.
The 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.
Other jurisdictions
The Group includes subsidiary companies that are incorporated in jurisdictions outside Australia as summarised in the table below:
Country
China(1)
New Zealand
Nature of activities
Co-ordinating the sourcing of trading stock for SCA, rebel and BCF
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 with
Super Retail Group are taxable in Australia at the 30 per cent Australian corporate tax rate. For the 2021 year, the gross value of international related party
transactions in and out of Australia represented less than 1.0 per cent of revenue.
Australian income taxes paid
Super Retail Group is a large taxpayer and paid corporate income tax of $72.4 million in 2021 and $42.3 million in 2020.
Significant Accounting Policies
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 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.
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 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 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 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.
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.
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 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 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 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 simultaneously.
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.
Tax consolidation
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 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 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.
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
96
96
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
97
97
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
15.
Provisions
Current
Employee benefits(a)
Make-good provision(b)
Onerous contracts(c)
Other provisions(d)
Total current provisions
Non-current
Employee benefits(a)
Make-good provision(b)
Total non-current provisions
(a)
Employee benefits
2021
$m
88.6
4.5
0.3
3.6
97.0
9.9
16.7
26.6
2020
$m
103.3
3.0
2.6
2.2
111.1
9.6
14.7
24.3
Provisions for employee benefits includes accrued annual leave, long service leave and accrued bonuses. It also includes $0.6 million (2020:
$6.7 million) provided as redundancy costs relating to support office restructures.
A remediation program in relation to payments owed to team members as first identified in the 2018 financial period continues, with
substantial payments made during the current financial period. As at 26 June 2021 there is a provision to recognise payments for additional
overtime and allowances to current and former team members and associated taxes of $6.9 million (2020: $32.4 million).
(b)
Make-good 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 costs have been
capitalised as part of the cost of the right-of-use assets and are amortised over the shorter of the term of the lease or the useful life of the
assets.
(c)
Onerous contracts
Onerous contracts includes the provision for certain obligations related to some surrendered lease arrangements. As at 26 June 2021 $0.3
million is provided for these obligations (2020: $1.8 million).
In the prior year, onerous contracts also included the provision for loss-making contracts relating to Infinite Retail which represented the
present value of the forecast loss. As at 26 June 2021 there is Nil provided for loss-making contracts related to Infinite Retail (2020: $0.8
million).
(d)
Other provisions
The current provision for other items includes the provision for store refunds.
(e)
Movement in provisions
Movements in each class of provision during the period, except for other, are set out below:
2021
Opening balance as at 27 June 2020
Provisions made
Indexing of provisions
Provisions used
Closing balance as at 26 June 2021
Employee benefits
$m
112.9
78.7
-
(93.1)
98.5
Make-good
$m
17.7
0.8
3.7
(1.0)
21.2
Onerous contracts
$m
2.6
-
-
(2.3)
0.3
Total
$m
133.2
79.5
3.7
(96.4)
120.0
15.
Provisions (continued)
Significant Accounting Policies
Provisions
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 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 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.
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 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.
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 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 short-term employee
benefit obligations are presented as payables.
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 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 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 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 are recognised in profit or loss.
The obligations are presented as current liabilities in the balance sheet if the Group 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.
Retirement benefit obligations
Contributions are made by the Group to an employee superannuation fund and are charged as expenses when incurred.
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 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.
Make-good requirements in relation to leased premises
Refer to Note 11 for details on make-good requirements in relation to leased premises.
Critical accounting estimates and assumptions
Estimated value of make-good provision
The Group has estimated the present value of the expenditure required to remove any leasehold improvements and return leased
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
right-of-use asset.
Long service leave
Judgement is required in determining the following key assumptions used in the calculation of long service leave at balance date.
Future increase in salaries and wages;
Future on-cost rates; and
Experience of employee departures and period of service.
Onerous contracts
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.
Employee benefits
Judgements have been made in the calculations as to the number of overtime hours and allowance payments based on assumed work
patterns.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
98
98
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
99
99
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
16.
(a)
Financial assets and financial liabilities
Financial instruments
The Group holds the following financial instruments:
2021
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
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
Notes
7
21
12
13
11
21
Derivatives used
for hedging
$m
-
-
3.6
3.6
-
-
-
-
-
Financial assets and
liabilities at
amortised cost
$m
242.3
38.4
-
280.7
563.4
-
989.6
-
1,553.0
Derivatives used
for hedging
Notes
$m
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
Total
$m
242.3
38.4
3.6
284.3
563.4
-
989.6
-
1,553.0
Total
$m
285.1
26.3
-
311.4
442.3
247.8
939.3
1.9
1,631.3
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.
(b)
Recognised fair value measurements
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 of 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 below 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 is 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.
16.
Financial assets and financial liabilities (continued)
(b)
(i)
Recognised fair value measurements (continued)
Fair value hierarchy (continued)
The following tables present the Group’s assets and liabilities measured and recognised at fair value.
2021
Financial assets
Derivatives used for hedging – forward foreign
exchange contracts
Total
Financial liabilities
Derivatives used for hedging
Total
2020
Financial assets
Derivatives used for hedging
Total
Financial liabilities
Derivatives used for hedging – forward foreign
exchange contracts
Total
Level 1
$m
Level 2
$m
Level 3
$m
-
-
-
-
3.6
3.6
-
-
-
-
-
-
Level 1
$m
Level 2
$m
Level 3
$m
-
-
-
-
-
-
1.9
1.9
-
-
-
-
Total
$m
3.6
3.6
-
-
Total
$m
-
-
1.9
1.9
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.
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 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) 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.
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.
Valuation techniques used to determine fair value
(ii)
Specific valuation techniques used to value financial instruments include:
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 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 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 and
the discount rates used were adjusted for counterparty or own credit risk.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
100
100
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
101
101
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
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 Group’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 transaction costs (in the case of a financial asset not at fair
value through profit or loss (FVPL)) 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.
16.
Financial assets and financial liabilities (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 profit or loss.
Amounts accumulated in equity are recycled in profit or loss in the income periods when the hedged item will affect profit or loss (for
instance when the forecast payment that is hedged takes place). 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 profit or loss. As soon as a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported
in equity is transferred to profit or loss.
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 in profit or loss.
17.
Earnings per share
Basic earnings per share
(a)
Total basic earnings per share attributable to the ordinary equity holders of the company
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.
Diluted earnings per share
(b)
Total diluted earnings per share attributable to the ordinary equity holders of the company
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.
Normalised earnings per share (non-IFRS measure)(1)
(c)
From continuing operations attributable to the ordinary equity holders of the company
(1) Normalised profit attributable to ordinary equity holders is $306.8 million (2020: $148.2 million) – Note 4(b).
(d)
Weighted average number of shares used as the denominator
Weighted average number of shares used as the denominator in calculating basic EPS
Adjustments for calculation of diluted earnings per share – performance rights
Weighted average potential ordinary shares used as the denominator in
calculating diluted earnings per share
2021
Cents
133.4
132.1
136.0
2020
Cents
55.8
55.3
75.0
2021
Number
2020
Number
225,577,445
2,273,476
197,610,979
1,663,059
227,850,921
199,274,038
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
102
102
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
103
103
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
17.
Earnings per share (continued)
2021
2020
Reconciliations of earnings used in calculating earnings per share
(e)
Basic earnings and diluted earnings per share
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
301.0
110.2
$m
$m
Significant Accounting Policies
Basic earnings per share
Basic earnings per share is calculated by dividing:
by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary
the profit attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares;
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
Ordinary shares fully paid (225,826,500 ordinary shares as at 26 June 2021)
2021
$m
740.7
Movement in ordinary share capital
(i)
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
Shares issued under performance rights(1)
Shares issued from equity raise – Retail Entitlement
Less: Transaction costs arising on share issue
Number of Shares
Issue Price
197,383,751
160,968
22,152,988
-
219,697,707
54,798
6,073,995
-
-
$7.19
-
-
$7.19
-
2020
$m
698.1
$m
542.3
-
159.3
(3.5)
698.1
-
43.7
(1.1)
Balance 26 June 2021
(1) Performance rights were fulfilled through a combination of on-market share purchases and new share issues. Performance rights vested were 172,653
(117,855 purchased on market and 54,798 new share issues).
225,826,500
740.7
On 15 June 2020, the Group announced an underwritten one for seven 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. 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.
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.
18.
Contributed equity (continued)
(a)
Share capital (continued)
Performance rights over 1,121,283 (2020: 727,470) ordinary shares were issued during the period with 172,653 (2020: 160,968) performance
rights vesting during the period. Under the share option plan, no ordinary shares were issued during the period (2020: 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.
19.
Reserves and 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
Value of equity purchased for performance rights and restricted shares
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
2021
$m
3.4
19.7
2.5
(8.0)
17.6
3.7
(0.3)
3.4
13.1
(1.1)
7.7
19.7
(1.3)
5.4
(1.6)
2.5
(8.0)
-
(8.0)
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)
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
104
104
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
105
105
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
19.
Reserves and retained earnings (continued)
(a)
Reserves (continued)
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 or loss when the associated hedged
transaction affects profit or 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 or 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.
(b)
Retained earnings
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
2021
$m
285.7
-
285.7
301.0
(118.5)
468.2
20.
Reconciliation of profit after income tax to net cash inflow from operating activities
Profit from ordinary activities after related income tax
Depreciation and amortisation
Impairment of right-of-use assets
Change in accounting policy – Cloud computing arrangements
Net (gain) on disposal of non-current assets
Non-cash employee benefits expense/share-based payments
Equity accounting loss
Net finance costs
Change in operating assets and liabilities, net of effects from the purchase of
controlled entities
- (increase)/ decrease in receivables
- increase in net current tax liability
- (increase) / decrease in inventories
- increase in payables
- (decrease) / increase in provisions
- (increase) in deferred taxes
Net cash inflow from operating activities
Significant Accounting Policies
2021
$m
301.0
299.4
0.9
3.0
(0.2)
7.7
0.2
41.0
(8.8)
52.4
(194.0)
111.2
(12.3)
(1.5)
600.0
2020
$m
265.9
(34.2)
231.7
110.2
(56.2)
285.7
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
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.
21.
Financial risk management
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 or loss information has been included where relevant to add further context.
Market risk
Foreign exchange
Interest rate
Exposure
arising from
Measurement
Future commercial
transactions
Recognised financial assets
and liabilities not
denominated in AUD
Cash flow forecasting
Sensitivity analysis
Long-term borrowings at
variable rates
Sensitivity analysis
Management
Forward foreign exchange
contracts
Interest rate swaps
Credit risk
Liquidity risk
Cash and cash equivalents,
trade and other receivables
and derivative financial
instruments
Borrowings and other
liabilities
Ageing analysis
Credit ratings
Rolling cash flow
forecasts
Credit limits and retention
of title over goods sold
Availability of committed
credit lines and borrowing
facilities
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 co-operation with the Group’s operating units. The Board approves 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.
(a)
Derivative Financial Instruments
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:
Current assets
Forward foreign exchange contracts – cash flow hedges
Total current derivative financial instrument assets
Current liabilities
Forward foreign exchange contracts – cash flow hedges
Total current derivative financial instrument liabilities
2021
$m
3.6
3.6
-
-
2020
$m
-
-
1.9
1.9
Classification of derivatives
(i)
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 period.
The Group’s accounting policy for 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 and losses in the
initial measurement of the cost of the asset.
Fair value measurement
(ii)
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.
(b)
Market risk
(i)
Group companies are required to hedge their foreign exchange risk exposure using forward contracts transacted by the finance department.
Foreign exchange risk
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
106
106
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
107
107
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
21.
Financial risk management (continued)
(b)
Market risk (continued)
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 four months and up to 50 per cent of anticipated foreign currency purchases for the following five to 12 month period.
Instruments used by the Group
The Group retails products including some that have been imported, with contract pricing denominated in USD or CNY. In order to protect
against exchange rate movements, the Group 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 - notional amount in 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
2021
USD
$m
1.5
46.1
63.8
69.5
133.3
The weighted average hedge rate of the forward exchange contracts as at 26 June 2021 is 0.7671 (2020: 0.6753)
Trade receivables
Trade payables
2021
CNY
m
1.5
61.4
2020
USD
$m
3.5
30.2
55.3
30.7
86.0
2020
CNY
m
0.2
23.8
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 26 June 2021, no hedges were designated as ineffective (2020: 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 gains / (losses) on USD foreign exchange contracts
Total unrealised gains / (losses)
2021
$m
3.6
3.6
2020
$m
(1.9)
(1.9)
21.
Financial risk management (continued)
(b) Market risk (continued)
(i) Foreign exchange risk (continued)
Group sensitivity
Based on the financial instruments held at 26 June 2021, 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 not material.
Equity would have been $11.1 million lower/$13.5 million higher (2020: $8.1 million lower/$9.9 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 2020 financial year. No
new interest rate swap contracts have been entered into as core debt remains at nil. Therefore current interest expense is subject to variable
rates only.
Interest rate risk exposures
The Group’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
Non-
interest
bearing $m
Notes
Total
$m
242.3
38.4
280.7
989.6
563.4
-
98.5
1,651.5
240.6
-
240.6
0.00%
-
-
-
-
-
n/a
-
-
-
-
-
-
-
-
-
193.6
562.8
233.2
-
-
-
-
-
-
-
-
-
193.6
562.8
233.2
1.7
38.4
40.1
-
563.4
-
98.5
661.9
240.6
(193.6)
(562.8)
(233.2)
(621.8)
(1,370.8)
2021
Financial assets
Cash and cash equivalents
Trade and other receivables
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
Net financial (liabilities) / assets
7
11
12
13
15
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
108
108
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
109
109
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
21.
Financial risk management (continued)
(b) Market risk (continued)
(ii) Cashflow and fair value interest rate risk (continued)
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
2020
Financial assets
Cash and cash equivalents
Trade and other receivables
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
Net financial (liabilities) / assets
7
11
12
13
15
283.5
-
283.5
0.25%
-
-
247.8
-
247.8
2.15%
-
-
-
177.8
-
-
-
-
-
-
556.7
-
-
-
-
-
-
204.8
-
-
-
177.8
556.7
204.8
21.
Financial risk management (continued)
(c)
Credit risk (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 risk.
There are no significant concentrations of credit risk, whether through exposure to individual customers, specific industry sectors and/or
regions.
(ii) Security
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 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.
(d) Liquidity risk
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
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 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.
(i) Financing arrangements
Non-
interest
bearing
$m
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
35.7
(177.8)
(556.7)
(204.8)
(527.3)
(1,430.9)
Unrestricted access was available at balance date to the following lines of credit:
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 2021 and 2020 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 outstanding:
Bank overdrafts and bank loans
An analysis by maturities is provided in (d) below.
2021
$m
-
2020
$m
250.0
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 2020 financial year as core debt was significantly reduced.
As at 26 June 2021, 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 unchanged (2020: $1.7 million lower/higher), mainly as a result of no drawn debt.
(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 credit 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.
Total facilities
- bank debt funding facility
- bilateral liquidity facility with ANZ
- multi-option facility (including indemnity/guarantee)
Total
Facilities used at balance date
- bank debt funding facility(1)
- bilateral liquidity facility with ANZ
- multi-option facility (including indemnity/guarantee)
Total
Unused balance of facilities at balance date
- bank debt funding facility
- bilateral liquidity facility with ANZ
- multi-option facility (including indemnity/guarantee)
Total
2021
$m
635.0
-
16.0
651.0
-
-
3.5
3.5
635.0
-
12.5
647.5
2020
$m
635.0
100.0
20.0
755.0
250.0
-
3.5
253.5
385.0
100.0
16.5
501.5
(1) As at 26 June 2021, NIL (2020: nil) of the overdraft facility has been drawn and in accordance with financing arrangements this is offset by cash funds in
transit.
Bank debt funding is split as $200 million expiring December 2022, $200 million expiring December 2023 and $200 million expiring December
2024. Bank debt and multi-option funding facilities totalling $51 million expire December 2021. Drawdown of debt facilities can occur with
48 hours notice.
Current interest rates which would apply on bank loans of the Group if drawn down are 1.37% - 1.62% (2020: 2.13% - 2.16%).
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
110
110
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
111
111
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
21.
Financial risk management (continued)
(d) Liquidity risk (continued)
22.
Capital management
(a)
Risk management
Maturities of financial liabilities
(ii)
The following tables present the Group’s financial liabilities into relevant maturity groupings based on their contractual maturities for:
-
- net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the timing
all non-derivative financial liabilities; and
of the cash flows.
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 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.
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 interest rates
applicable at the end of the reporting period.
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 consolidated balance sheet
(including non-controlling interests) plus net debt.
2021
Non-derivatives
Trade and other payables
Borrowings
Lease liabilities
Total non-derivatives
Derivatives
Forward exchange contracts used
for hedging:
Gross settled
- (inflow)
- outflow
Total derivatives
2020
Non-derivatives
Trade and other payables
Borrowings
Lease liabilities
Total non-derivatives
Derivatives
Forward exchange contracts used
for hedging:
Gross settled
- (inflow)
- outflow
Total derivatives
Less than 6
months
$m
6-12
months
$m
Between 1
and 2
years
$m
Between 2
and 5
years
$m
563.4
-
108.3
671.7
-
-
103.7
103.7
-
-
198.1
198.1
-
-
458.3
458.3
Over 5
years
$m
-
-
255.2
255.2
Total
contractual
cash flows
$m
563.4
-
1,123.6
1,687.0
(121.6)
121.3
(0.3)
(54.0)
52.4
(1.6)
-
-
-
-
-
-
-
-
-
(175.6)
173.7
(1.9)
Less than 6
months
$m
6-12
months
$m
Between 1
and 2
years
$m
Between 2
and 5
years
$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
Over 5
years
$m
-
-
228.0
228.0
Total
contractual
cash flows
$m
442.3
263.4
1,077.3
1,783.0
Carrying
amount
(assets) /
liabilities
$m
563.4
-
989.6
1,553.0
(3.6)
-
(3.6)
Carrying
amount
(assets) /
liabilities
$m
442.3
250.0
939.3
1,631.6
During 2021 the Group’s strategy was to ensure that it held a strong liquidity position focused on net cash and committed debt facilities
sufficient to support a period disrupted by COVID-19. The gearing ratios at 26 June 2021 and 27 June 2020 were as follows:
Total borrowings
Total lease liabilities
Less: Cash & cash equivalents
Net Debt
Total Equity
Total Capital
Gearing Ratio
2021
$m
-
989.6
(242.3)
747.3
1,226.5
1,973.9
37.9%
2020
$m
247.8
939.3
(285.1)
902.0
991.3
1,893.3
47.6%
The Group also monitors ongoing capital on the basis of the fixed charge cover ratio (FCCR). The ratio is calculated as earnings before net
finance costs, income tax, depreciation, amortisation and rental expense (EBITDAR) divided by fixed charge obligations (being finance costs
rental expenses).
For the purposes of capital management FCCR is utilised on a pre-AASB 16 Leases basis. The FCCR and net debt to EBITDA ratios at 26 June
2021 and 27 June 2020 were as follows:
Normalised net profit after tax (pre-AASB 16 Leases)
Add: Taxation expense
Net finance costs
Depreciation and amortisation (excludes impairment)
EBITDA
Rental expense
EBITDAR
Net finance costs
Rental expense
Fixed charges
Fixed charge cover ratio
Net debt to EBITDA ratio(1)
(1) Normalised net debt (pre-AASB 16 Leases) is positive $241.4m (2020: positive $32.6m).
2021
$m
308.0
129.5
5.8
114.1
557.4
263.4
820.8
5.8
263.4
269.2
3.05
(0.43)
2020
$m
154.1
64.2
17.8
92.0
328.1
255.1
583.2
17.8
255.1
272.9
2.14
(0.10)
(99.6)
101.0
1.4
(25.5)
26.4
0.9
-
-
-
-
-
-
-
-
-
(125.1)
127.4
2.3
-
1.9
1.9
Loan Covenants
(i)
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 2021 and 2020 financial years. There are no
assets pledged as security in relation to the unsecured debt in the 2021 financial year (2020: nil).
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
112
112
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
113
113
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
2021
$m
2020
$m
Directors
(d)
The names of the persons who were Directors of Super Retail Group Limited during the financial year are S A Pitkin AO, R A Rowe, D J Eilert,
H L Mowlem, P D Everingham, S A Chaplain AM, G T Dunne and A M Heraghty.
23.
Related party transactions (continued)
(e)
There are no amounts due from Directors of the consolidated Group and their director-related entities (2020: 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:
2021
$
2020
$
Store lease payment(1)
9,553,918
9,611,168
(1) Rent on properties, with rates which are deemed to be on an arm's-length basis. Rent payable at year-end was Nil (2020: $750,802).
24.
Business combinations
(a)
Subsidiaries
2021
The Group’s subsidiaries at 26 June 2021 are as detailed in Note 27 - Investments in controlled entities. There were no changes to the Group’s
ownership interest in these entities.
2020
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.
(b)
Associates and joint ventures
2021
There were no changes to the Group’s associates or joint ventures during 2021.
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.
22.
Capital management (continued)
(b)
Dividends
Ordinary shares
Dividends paid by Super Retail Group Limited during the financial year were as follows:
Final dividend for the period ended 27 June 2020 of 19.5 cents per share (2019: 28.5 cents per
share) paid on 2 October 2020. Fully franked based on tax paid at 30%
Interim dividend for the period ended 26 December 2020 of 33.0 cents (2019: cancelled) paid on 1
April 2021. Fully franked based on tax paid at 30%
Total dividends provided and paid
Dividends paid in cash or satisfied by the issue of shares under the dividend reinvestment plan
were as follows:
- paid in cash
-
satisfied by issue of shares purchased on market
Dividends not recognised at year end
Subsequent to year end, the Directors have resolved to pay a final dividend of 55.0 cents per
ordinary share (2020: 19.5 cents per ordinary share), fully franked based on tax paid at 30%.
Aggregate amount of the dividend expected to be paid on 7 October 2021, out of retained profits
as at 26 June 2021, but not recognised as a liability at year end
Franking credits
The franked portions of dividends paid after 26 June 2021 will be franked out of existing franking
credits and out of franking credits arising from the payments of income tax in the years ending after
26 June 2021.
Franking credits remaining at balance date available for dividends resolved to be paid after the
current balance date based on a tax rate of 30%
44.0
74.5
118.5
116.3
2.2
118.5
56.2
-
56.2
54.5
1.7
56.2
124.2
44.0
231.2
157.2
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 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 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 of $53.2 million (2020:
$18.9 million). The recommended dividend has not been recognised as a liability at year end.
Significant Accounting Policies
Dividend distribution
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the Group,
on or before the end of the financial year but not distributed at balance date.
23.
Related party transactions
Transactions with related parties are at arm’s length unless otherwise stated.
(a)
The parent entity within the Group is Super Retail Group Limited, which is the ultimate Australian parent.
Parent entities
Subsidiaries, associates and joint ventures
(b)
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.
(c)
Disclosures relating to key management personnel are set out in Note 28 – Key management personnel disclosures.
Key Management Personnel
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
114
114
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
115
115
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
25.
Deed of cross guarantee
Super Retail Group Limited, A-Mart All Sports Pty Ltd, Auto Trade Direct Pty Ltd, Coyote Retail Pty Limited, Foghorn Holdings Pty Ltd, Goldcross
Cycles Pty Ltd, Infinite Retail Pty Ltd, Macpac Holdings Pty Ltd, Macpac Retail Pty Ltd, Mouton Noir Management Pty Ltd, MP Finco Pty Limited,
Macpac Group Holdings Pty Limited, Oceania Bicycles 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
Retail Pty Ltd, SRGS Pty Ltd, Supercheap Auto Pty Ltd, Super Retail Commercial Pty Ltd, Super Retail Group Services Pty Ltd and Workout
World 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 financial report and Directors’ report under ASIC
Corporations (Wholly-owned Companies) Instrument 2016/785 issued by the Australian Securities and Investments Commission.
(a)
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 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 for the
period ended 26 June 2021 of the Closed Group.
Consolidated Comprehensive Income Statement
Revenue from continuing operations
Other income from continuing operations
Total revenues and other income
Cost of sales of goods
Other expenses from ordinary activities
- selling and distribution
- marketing
- occupancy
- administration
Net finance costs
Share of net loss of associates and joint ventures
Total expenses
Profit before income tax
Income tax expense
Profit for the period
Statement of comprehensive income
Profit for the period
Other comprehensive income
Items that may be reclassified to profit or loss
Changes in the fair value of cash flow hedges
Other comprehensive income for the period, net of tax
Total comprehensive income for the period
Summary of movements in consolidated retained earnings
Retained profits at the beginning of the financial period
Change in accounting policy – AASB 16 Leases
Change in Closed Group
Restated balance at the beginning of the financial period
Profit for the period
Dividends paid
Retained profits at the end of the financial period
2021
$m
3,235.1
0.3
3,235.4
2020
$m
2,644.9
28.5
2,673.4
(1,686.2)
(1,458.4)
(415.0)
(95.2)
(199.0)
(392.0)
(39.4)
(0.2)
(2,827.0)
408.4
(120.8)
287.6
$m
287.6
3.8
3.8
291.4
$m
368.9
-
(0.6)
368.3
287.6
(118.5)
537.4
(352.4)
(74.4)
(191.5)
(369.2)
(53.5)
(0.6)
(2,500.0)
173.4
(42.6)
130.8
$m
130.8
1.0
1.0
131.8
$m
245.5
(33.4)
82.2
294.3
130.8
(56.2)
368.9
25.
Deed of cross guarantee (continued)
(b)
Consolidated Balance Sheet
Set out below is a consolidated balance sheet as at 26 June 2021 of the Closed Group.
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Derivative financial instruments
Total current assets
Non-current assets
Other financial assets
Deferred tax assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Lease liabilities
Current tax liabilities
Derivative financial instruments
Provisions
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Provisions
Total non-current liabilities
Total liabilities
NET ASSETS
EQUITY
Contributed equity
Reserves
Retained profits
TOTAL EQUITY
2021
$m
196.4
48.1
642.4
3.6
890.5
196.5
14.2
205.4
837.4
799.1
2,052.6
2,943.1
533.2
181.1
68.9
-
93.3
876.5
-
749.0
25.8
774.8
1,651.3
1,291.8
740.7
13.7
537.4
1,291.8
2020
$m
260.9
36.1
451.3
-
748.3
196.7
11.6
219.6
789.0
806.9
2,023.8
2,772.1
419.7
166.6
17.2
1.9
107.8
713.2
247.8
717.4
23.4
988.6
1,701.8
1,070.3
698.1
3.3
368.9
1,070.3
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
116
116
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
117
117
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
26.
Parent entity financial information
The individual financial statements for the parent entity show the following aggregate amounts:
Balance Sheet
Current assets
Total assets
Current liabilities
Total liabilities
NET ASSETS
Contributed equity
Reserves
- share-based payments
Retained earnings
Total Equity
Profit after tax for the period
Total comprehensive income
Significant Accounting Policies
2021
$m
316.5
1,123.6
71.7
71.9
1,051.7
740.7
19.7
291.3
1,051.7
266.1
266.1
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
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.
27.
Investments in controlled entities
The Group’s subsidiaries at 26 June 2021 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
Coyote Retail Pty Limited(1)
Foghorn Holdings Pty Ltd(1)
Goldcross Cycles Pty Ltd(1)
Infinite Retail Pty Ltd(1)
Infinite Retail UK Limited(2)
Macpac Enterprise
Macpac Group Holdings Pty Limited(1) (4)
Macpac Holdings Pty Ltd(1)
Macpac Limited
Macpac New Zealand Limited
Macpac Retail Pty Ltd(1)
MP Finco Pty Limited(1) (4)
Mouton NOIR IP Limited
Mouton Noir Management Pty Ltd(1)
Oceania Bicycles Pty Ltd(1)
Oceania Bicycles Limited(3)
Ray’s Outdoors New Zealand Limited
Ray’s Outdoors Pty Ltd(1)
Rebelsport.com Pty Limited(1)
Rebel Group Limited(1)
Rebel Management Services Pty Limited(1)
Rebel Pty Ltd(1)
Rebel Sport Limited(1)
Rebel Wholesale Pty Limited(1)
SRG Equity Plan Pty Ltd(1)
SRG Leisure Retail Pty Ltd(1)
SRGS (New Zealand) Limited
SRGS Pty Ltd(1)
Super Cheap Auto (New Zealand) Pty Limited
Super Cheap Auto Pty Ltd(1)
Super Retail Commercial Pty Ltd(1)
Super Retail Group Services (New Zealand) Limited
Super Retail Group Services Pty Ltd(1)
Super Retail Group Trading (Shanghai) Ltd
VBM Retail (HK) Limited(2)
VBM Retail NZ Limited(2)
Workout World Pty Limited(1)
Country of
Incorporation
Australia
New Zealand
Australia
New Zealand
Australia
Australia
Australia
Australia
United Kingdom
New Zealand
Australia
Australia
New Zealand
New Zealand
Australia
Australia
New Zealand
Australia
Australia
New Zealand
New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
New Zealand
Australia
New Zealand
Australia
Australia
New Zealand
Australia
China
Hong Kong
New Zealand
Australia
Principal Activities
Sports retail
Equity Holding
2020
%
100
2021
%
100
Auto retail
Auto retail
Outdoor 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
Product acquisition and distribution
Product acquisition and distribution
Auto retail
Auto retail
Auto retail
Support services
Support services
Product sourcing
Sports retail
Sports retail
Sports retail
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
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
(1) These controlled entities have been granted relief from the requirement 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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
118
118
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
119
119
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
29.
Share-based payments (continued)
(a)
Executive Performance Rights (continued)
The weighted average remaining contractual life of Performance Rights outstanding as at the end of the period was 1.8 years (2020: 1.8
years).
Fair value of Performance Rights granted
For Performance Rights, the fair value at grant date is determined using a Black-Scholes 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 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 values and model inputs for Performance Rights granted during the period included:
2021 Performance Rights
$9.47
30 December 2020
1 Nov 2022, 1 Nov 2023, 1 Nov 2024
$10.87
1.0%
4.6%
0.22%
(1) Grant date for accounting valuation is the date team members became aware of the terms and conditions of the offer which for the 2021 Performance Rights
Fair value of Performance Rights granted
Grant date (accounting valuation)(1)
Expiry dates
Share price at grant date
Expected price volatility of the Group’s shares
Expected dividend yield
Risk-free interest rate
was 30 December 2020. The grant date as outlined in the terms and conditions of the offer is 1 November 2020.
Expenses arising from share-based payments transactions:
Executive Performance Rights
Significant Accounting Policies
2021
$m
7.7
2020
$m
0.2
Share-based payments
Share-based compensation benefits are provided to certain employees via the Super Retail Group Performance Rights Plan.
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.
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 Group 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.
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.
28.
Key Management Personnel disclosures
(a)
Key Management Personnel compensation
Short-term employee benefits
Long-term employee benefits
Post-employment benefits
Share-based payments
2021
$
7,895,340
788,389
202,501
3,651,950
12,538,180
2020
$
7,257,972
360,570
178,154
424,979
8,221,675
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
Dividends(1)
(1) Dividends paid to KMP shareholders was lower in the prior year due to the cancellation of the 2020 interim dividend.
2021
$
36,125,381
2020
$
17,135,677
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 Plan, 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.
The vesting conditions are based on Board approved measures of sustainable shareholder returns such as Earnings Per Share (EPS) and Return
on Capital (ROC). Historically the Long-Term Incentive (LTI) Plan has used a combination of EPS and ROC which the Board determined are
appropriate measures of sustainable shareholder returns. In the context of COVID-19 and the challenges of forecasting the impact on the
business, the Board established a two-year Medium Term Business Plan (MTBP), with targets for ROC and Normalised Profit Before Tax (NPBT).
The grant in the 2021 financial year covered LTI reward for both the 2021 and 2022 financial years and is based on performance over the two-
year period of the MTBP. For the Performance Rights granted on 1 September 2019, these are tested based on the June 2022 results and will
vest over the two years from the year of testing at 50 per cent per year. For the Performance Rights granted on 1 November 2020, these are
also tested based on the June 2022 results and vest from the year of testing over three years at one-third per year.
Subject to any adjustment in the event of a bonus issue, each right is an entitlement 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
2021
1 September 2015
1 September 2016
1 September 2017
1 September 2018
1 September 2019
1 November 2020
2020
1 September 2015
1 September 2016
1 September 2017
1 September 2018
1 September 2019
Balance at start
of the year
(Number)
9,952
147,054
465,885
344,698
695,470
-
1,663,059
Granted during
the year
(Number)
-
-
-
-
-
1,121,283
1,121,283
Exercised during
the year
(Number)
(9,952)
(73,508)
(89,193)
-
-
-
(172,653)
Forfeited during
the year
(Number)
-
-
(287,452)
(7,754)
(38,507)
(4,500)
(338,213)
Balance at the
end of the year
(Number) (1)
-
73,546
89,240
336,944
656,963
1,116,783
2,273,476
136,707
453,535
633,916
592,684
-
1,816,842
-
-
-
-
727,470
727,470
(10,089)
(150,879)
-
-
-
(160,968)
(116,666)
(155,602)
(168,031)
(247,986)
(32,000)
(720,285)
9,952
147,054
465,885
344,698
695,470
1,663,059
(1) All Performance Rights as at the end of the year are unvested and the exercise price for all grants is nil.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
120
120
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
121
121
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 26 June 2021
33.
Net tangible asset backing
Net tangible asset per ordinary share
2021
Cents
$1.93
2020
Cents
$0.88
Net tangible asset per ordinary share (NTA) is calculated based on Net Assets of $1,226.5 million (2020: $991.3 million) less intangible assets
of $866.9 million (2020: $874.3 million) adjusted for the associated deferred tax liability of $75.3 million (2020: $75.3 million). The number
of shares used in the calculation was 225,826,500 (2020: 219,697,707).
The NTA calculation includes the right-of-use assets in respect of property, plant and equipment leases of $894.3 million (2020: $848.0
million), and the lease liabilities recognised under AASB 16 Leases of $989.6 million (2020: $939.3 million). If the right-of-use assets and
associated deferred tax liability were excluded from the calculation, the NTA would have been negative $0.86 per ordinary share (2020:
negative $1.85).
34.
Events occurring after balance date
No matters or circumstance have arisen since 26 June 2021 that have 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.
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
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
Total remuneration of PricewaterhouseCoopers Australia
(b) Network firms of PricewaterhouseCoopers Australia
(i)
Taxation services
Tax compliance services, including review of Company income tax returns
Total remuneration of network firms of PricewaterhouseCoopers Australia
Total auditors’ remuneration
2021
$
879,240
-
879,240
163,537
163,537
-
-
2020
$
855,736
-
855,736
258,577
258,577
45,900
45,900
1,042,777
1,160,213
47,011
47,011
80,380
80,380
1,089,788
1,240,593
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, 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.
31.
Contingencies
Guarantees
Guarantees issued by the bankers of the Group in support of various rental
arrangements.
The maximum future rental payments guaranteed amount to:
2021
$m
2020
$m
4.7
4.9
Other Contingencies
The Group continues to work with the Fair Work Ombudsman in relation to the underpayment of team members. This may result in
undertakings required by the regulator, or the commencement of legal proceedings. Further amounts may become payable at the direction
of the regulator or as a result of legal proceedings. Future professional advisory fees will be incurred to finalise remediation outcomes.
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.
32.
Commitments
Commitments payable for the acquisition of plant and equipment and computer software, contracted for at the reporting date but not
recognised as liabilities payable, total $5.4 million as at 26 June 2021 (27 June 2020: $2.6 million).
The Group leases various offices, warehouses and retail stores under non-cancellable operating leases. These leases have varying terms,
escalation clauses and renewal rights. The Group has recognised right-of-use assets for these leases, except for short-term and low-value
leases. Refer Note 11 - Leases for details of Property right-of-use assets and Note 21 – Financial risk management for details of the contractual
maturities of the lease liabilities.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
122
122
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
123
DIRECTORS’ DECLARATION
In the Directors’ opinion:
(a)
(b)
(c)
the financial statements and notes set out on pages 69 to 121 are in accordance with the Corporations Act 2001, including:
(i)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements; and
giving a true and fair view of the consolidated entity's financial position as at 26 June 2021 and of its performance for the
financial year ended on that date; and
(ii)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable;
and
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 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 International
Accounting Standards Board.
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.
This declaration is made in accordance with a resolution of the Directors.
S A Pitkin AO
Director
Brisbane
18 August 2021
A M Heraghty
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 26 June 2021 and of its
financial performance for the period 28 June 2020 to 26 June 2021 (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 26 June 2021
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 significant accounting policies
and other explanatory information
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 & 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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
124
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
125
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.
Materiality
● For the purpose of our audit we used overall Group materiality of $17.1 million, which represents
approximately 4% of the Group’s profit before tax.
● 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 Group profit before tax because, in our view, it is the benchmark against which the performance
of the Group is most commonly measured.
● We utilised a 4% threshold based on our professional judgement, noting it is within the range of
commonly acceptable thresholds.
Audit scope
● Our audit focused on where the Group made subjective judgements; for example, significant accounting
estimates involving assumptions and inherently uncertain future events.
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
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
(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.
How our audit addressed the key audit
matter
Our audit procedures included the following:
● Developing an understanding of and evaluating the
Group’s processes and controls related to annual
impairment assessments of the CGUs in light of the
requirements of Australian Accounting Standards.
● Comparing actual results with historical forecasts to
assess the reliability of the forecasts used in the cash
flow models.
● Evaluating how the Group considered the ongoing
impact of COVID-19 in the future cash flow forecasts.
● Together with PwC valuation experts, assessing the
valuation methodology and mathematical accuracy of
the models and comparing the discount rate and
growth rate assumptions to historical company data
and market observable inputs.
● Evaluating the Group’s assessment that the
indefinite life assumption for brand names remains
appropriate at period end.
● Evaluating the adequacy of the disclosures made in
the financial report, in light of the requirements of
Australian Accounting Standards.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
126
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
127
Key audit matter
Lease accounting
(Refer to note 11) Right of Use assets : $894.3m,
Lease Liabilities $989.6m
The Group adopted Australian Accounting Standard
AASB 16 Leases (AASB 16) in the prior period. As a
result, Right of Use assets and Lease Liabilities are
recognised on the balance sheet.
This was a key audit matter due to the:
● Financial significance of the balances included in
the financial report
● The critical judgements used in determining the
lease term assumptions in the lease calculations
How our audit addressed the key audit
matter
Our audit procedures included the following:
● Assessing the Group’s accounting policies against
the requirements of AASB 16.
● For a sample of lease agreements:
● Evaluating the lease calculations against the
terms of the lease agreement and the
requirements of Australian Accounting
Standards
● Testing the mathematical accuracy of the
lease calculations
● Evaluating the evidence for critical
judgements made over lease term
assumptions.
● Evaluating the adequacy of the disclosures made in
Note 11 in light of the requirements of Australian
Accounting Standards.
Computer software
(Refer to note 10) Net computer software $87.0m,
Note 2 (g)
During the period, the Group changed its accounting
policy on accounting for Configuration or
Customisation Costs for Software-as-a-Service (SaaS)
arrangements as intangible assets in line with the
accounting treatment set out in the IFRS
Interpretation Committee agenda decision in March
2021 and AASB 138 Intangible Assets (AASB 138).
Our audit procedures included the following:
● Assessing the Group’s accounting policies against
the requirements of AASB 138 and the IFRS
Interpretations Committee agenda decision on
Configuration or Customisation Costs for Software-
as-a-Service (SaaS) arrangements.
For a sample of intangible assets, we performed the
following procedures, amongst others:
This was a key audit matter due to the:
● Financial significance of the intangible assets
balance included in the financial report
● Judgement involved to determine whether
implementation activities of SaaS arrangements
create an intangible asset that the Group controls.
● Assessing the nature of the costs capitalised against
the requirements of Australian Accounting Standards.
● Obtaining evidence supporting the Group’s
classification of costs in relation to SaaS
arrangements.
● Evaluating the adequacy of the disclosures made in
the financial report, in light of the requirements of
Australian Accounting Standards.
Key audit matter
Inventory valuation
(Refer to note 8) $696.4m
How our audit addressed the key audit
matter
Our audit procedures included the following:
The valuation of inventory was a key audit matter
because of the judgements involved in:
● Estimating the net realisable value (NRV) of
inventory.
● Assessing the Group’s accounting policies against
the requirements of Australian Accounting Standards.
● For a sample of inventory items, agreeing
movements between stocktake date and year end to
supporting documentation.
● Capitalising attributable overheads and adjusting
inventory cost for rebates received.
● Testing the mathematical accuracy of the stock loss
provision.
● Assessing the NRV provision, using data analysis
techniques to compare the carrying value to the most
recent sales price for each item.
● Evaluating the Group's methodology for capitalising
overheads and rebates to inventory against the
requirements of the Australian Accounting Standards.
● Evaluating the nature of a sample of the costs
capitalised during the year, in light of the
requirements of the Australian Accounting Standards.
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the year ended 26 June 2021, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
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
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
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.
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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 43 to 67 of the directors’ report for the
year ended 26 June 2021.
In our opinion, the remuneration report of Super Retail Group Limited for the year ended 26 June
2021 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.
PricewaterhouseCoopers
Paddy Carney
Partner
Brisbane
18 August 2021
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131
SHAREHOLDER INFORMATION
For the period ended 26 June 2021
SHAREHOLDER INFORMATION (continued)
For the period ended 26 June 2021
The shareholder information set out below was applicable as at 11 August 2021.
C.
Substantial shareholdings
As at 11 August 2021, there are three substantial shareholders that the Company is aware of:
Name
REGINALD ALLEN ROWE
CHALLENGER LIMITED
ALPHINITY INVESTMENT MANAGEMENT PTY LTD
D.
Unquoted equity securities
Ordinary shares Number
held
Percentage of issued
shares
Date of most
Recent notice
65,890,431
16,421,526
11,362,765
29.18%
7.27%
5.03%
29/06/2020
12/07/2021
21/09/2020
As at 18 August 2021, there were 2,273,476 unlisted performance rights, granted to 93 holders, over unissued ordinary shares in the Company.
E.
Voting rights
The voting rights relating to each class of equity securities is as follows:
Ordinary Shares
a)
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.
Options and Performance Rights
b)
Performance Rights and Options do not have any voting rights.
F.
Market buy-back
There is currently no on market buy-back.
Number of Shareholders
There were 16,446 shareholders, holding 225,826,500 fully paid ordinary shares.
Distribution of equity securities
A.
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
9,578
5,635
805
380
48
16,446
58.2%
34.3%
4.9%
2.3%
0.3%
100.0%
1
22
27
43
5
93
1.0%
22.4%
27.6%
43.9%
5.1%
100.0%
There were 571 holders of less than a marketable parcel of ordinary shares.
Equity security holders
B.
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
RE-GROW FUTURES PTY LTD
CITICORP NOMINEES PTY LIMITED
SCCASP HOLDINGS PTY LTD
SANTOS L HELPER PTY LTD
MR KENNETH JOSEPH HALL
EQUITAS NOMINEES PTY LIMITED
EQUITAS NOMINEES PTY LIMITED
EQUITAS NOMINEES PTY LIMITED
EQUITAS NOMINEES PTY LIMITED
PACIFIC CUSTODIANS PTY LIMITED
AMP LIFE LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
Ordinary shares
Number held
Percentage of
issued shares
61,490,627
48,295,364
25,601,136
21,953,405
10,450,277
4,850,793
4,085,151
3,167,000
2,920,596
1,232,804
904,246
777,143
717,328
648,346
625,298
611,876
555,774
530,013
453,586
430,826
27.23%
21.39%
11.34%
9.72%
4.63%
2.15%
1.81%
1.40%
1.29%
0.55%
0.40%
0.34%
0.32%
0.29%
0.28%
0.27%
0.25%
0.23%
0.20%
0.19%
190,301,589
84.28%
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Corporate
Directory
Name of Entity
SUPER RETAIL GROUP LIMITED
ABN
81 108 676 204
Company Secretary
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
20 October 2021
23 August 2021
24 August 2021
Full Year DRP Election Date
Full Year Dividend
Payment Date
Interim Results
Announcement
25 August 2021
7 October 2021
21 February 2022
Interim Dividend Ex-Date
Interim Dividend
Record Date
Interim DRP Election Date
24 February 2022
25 February 2022
28 February 2022
Interim Dividend
Payment Date
4 April 2022
(1) All 2022 dates are subject to Board approval. If there are
changes to any other dates, the Australian Securities Exchange
will be notified as required.
(2) The 2021 Annual General Meeting of the Shareholders of
Super Retail Group Limited will be held as a hybrid meeting,
which will permit shareholders to attend in person or online.
Further details will be available on the ASX and our website.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
134
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21
Notes
Inspiring you to
live your passion
ABN: 81 108 676 204
www.superretailgroup.com.au