20
22
Annual
Report
Inspiring you to
live your passion
1
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
Acknowledgement of Country
Super Retail Group acknowledges the Traditional
Custodians of Country throughout Australia and
recognises their continuing connection to land,
waters and communities. We pay our respect to
Aboriginal and Torres Strait Islander cultures; and
to Elders past and present.
We also operate in Aotearoa New Zealand,
and we acknowledge ngā
iwi Māori as
Tangata Whenau (First People) of Aotearoa.
Super Retail Group is committed to upholding
the Treaty of Waitangi principles, developing
relationships with, and supporting local iwi.
We are committed to reconciliation and, in FY23,
aim to publish our first Reflect Reconciliation
Action Plan, setting out how we can come together
with First Nations communities in meaningful
partnership and with greater impact for all.
Manaaki whenua,
Manaaki tāngata,
Haere whakamua.
If we care for the land,
If we care for the people,
We can move forward into the future.
Māori proverb
2
Contents
3
5
7
9
11
13
15
17
17
19
21
23
25
27
29
32
47
78
138
141
142
Chair’s message
CEO’s message
About us
Performance highlights
Our strategy
Our communities
ESG highlights
Our brands
Supercheap Auto
rebel
BCF
Macpac
Our team
Board of Directors
Executive Leadership Team
Directors’ Report
Remuneration Report
Financial Statements
Shareholder information
Glossary
Corporate Directory
Important notice
This report contains forward-looking statements. While these forward-looking statements reflect
Super Retail Group’s expectations at the date of this report, they are not guarantees or predictions of
future performance or statements of fact. They involve known and unknown risks and uncertainties,
which may cause actual results to differ materially from those expressed in the statements contained in
this report. Super Retail Group makes no representation, assurance or guarantee as to the accuracy or
likelihood or fulfilment of any forward-looking statement or any outcomes expressed or implied in any
forward-looking statement. Except as required by applicable laws or regulations, neither Super Retail
Group nor any other person undertakes to publicly update or review any forward-looking statements,
whether as a result of new information or future events. Past performance cannot be relied on as
a guide to future performance. Super Retail Group cautions against reliance on any forward-looking
statements or guidance, particularly in light of the current economic climate and the significant
volatility, uncertainty and disruption arising in connection with the COVID-19 pandemic.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22 3
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
Chair’s
message
Dear shareholders
The 2022 financial year represented another significant milestone for
Super Retail Group, marking 50 years since our company’s humble
beginnings in Brisbane. Five decades on from its formation as an
automotive accessories mail-order business based in the home of our
founders, Reg and the late Hazel Rowe, Super Retail Group has grown
remarkably.
Today we are recognised as a successful omni-retailer with four core
brands that are household names across Australia and New Zealand,
and Super Retail Group is approaching 20 years as a public company
listed on the Australian Securities Exchange.
While Super Retail Group continued its evolution over the past 12
months in the face of ongoing volatility in the domestic and global
environment, the Board remains conscious of retaining the DNA of
the business established in 1972 that was founded on an unwavering
commitment to customers.
We added a new chapter to our growth story in FY22. Despite the
enduring economic and social impact of the COVID-19 pandemic during
the year, I’m pleased to report a strong financial performance, including
another year of record sales.
The Board also recognises that the Group’s performance across social
and environmental aspects is more important than ever in continuing
to deliver sustainable growth.
We kept this front of mind over the past 12 months in our review and
refresh of our vision, mission and values. Given the rapid and dramatic
changes to society since our values were first articulated, we wanted
to ensure they remained relevant to our increasingly diverse team
members and the community.
The Board and Senior Leadership Team understood the importance of
getting it right. Our vision, mission and values help us communicate
our intentions as an organisation, and provide a reference point for our
decisions and actions. Appropriately these principles were developed
organically, created by team members for our 14,000-strong team.
The Board continues to prioritise ethical and sustainable stewardship
of the Group’s operations. Building a successful company over half a
century can only be achieved if the business strategy is underpinned
by a commitment to ethical and sustainable practices and we look to
continue that ethos with a contemporary approach, driven by best
practice.
At all levels of the organisation, we are continuing to embed
environmental, social and governance standards and practices to
position the business for the long term.
Within this domain, we are determined to play our role in mitigating the
impact of climate change, and actively managing our carbon footprint
to ensure we remain aligned with community sentiment.
Following clear feedback from team members, customers and other
valued stakeholders, the Board reviewed and strengthened our
Sustainability Framework. The Framework provides guidance for our
people, customers, investors and stakeholders on the standards we are
setting for the future as a benchmark for our operations.
In practical terms, this means we have reset our carbon emissions
targets, with a new and ambitious goal for the business of zero
emissions for Scope 1 and 2 by 2030. We’ve also strengthened our
commitment to climate governance, enhancing transparency around
our climate-related financial disclosures.
In reviewing other business-critical calls made in FY22, arguably there
were none more influential on the Group’s strong financial performance
than the strategic decision to invest in inventory in response to
disrupted global supply chains. This pre-emptive management of the
supply chain challenges positioned our four core brands to capture
consumer demand when retail spending rebounded following the end
of COVID-19-lockdowns.
The Group’s effective execution of our omni-retail strategy, an improved
digital capability, and another year of dedicated commitment from our
team members were also crucial to a strong financial performance.
Despite the challenges of the pandemic, we continued to invest in the
business to strengthen our competitive position and generate long-
term value for our shareholders. This investment will continue, with a
particular focus over the next two years on our loyalty programs and
4
CommBank Matildas player and rebel ambassador
Mary Fowler, enjoying the new football experience zone
at the refurbished rebel Penrith store.
data analytics to capitalise on the strategic opportunities presented
by one of the largest active club memberships in Australia and
New Zealand.
The response by governments and health authorities to the COVID-19
pandemic inevitably impacted the trading performance of Super Retail
Group and activity across the wider economy in FY22. Looking ahead,
we expect economic uncertainty to endure given the global volatility
and high inflationary environment, as well as the continuing impact of
the pandemic.
Against that backdrop, it remains prudent to maintain a continual
review over capital management.
The Group’s strong financial performance and balance sheet has
supported the Board’s decision to determine a fully franked final
dividend of 43.0 cents per share. The total dividend for the FY22 is
70.0 cents per share. The total dividend represents a full year payout
ratio of 65 per cent, in line with the Group’s policy.
The Board is continually evaluating the pool of skills, knowledge and
experience among directors to ensure it retains the appropriate mix of
capabilities to provide strategic leadership for the Group. Judith Swales
joined the board during the year, bringing to our Board discussions
significant director and executive management experience from a range
of global businesses. We also farewelled Gary Dunne, who retired as a
Non-Executive Director when he was appointed as the Chief Executive
Officer of Melbourne-based RPM Property Group. We thank Gary for
his contribution to the business and wish him well. I am appreciative
of the counsel and support from my fellow Board members during
the year.
Given the strong FY22 performance and another year of high team
member engagement, I would like to acknowledge the leadership of
the Group Managing Director and Chief Executive Officer Anthony
Heraghty and his management team. Their strategic planning and
successful execution of the business plan has positioned the Group for
continued success.
Of course, the delivery of the business plan requires a committed and
engaged team and once again our team members have gone above and
beyond in delivering for our customers. We have seen this in the face
of the greatest challenges, in particular during the floods that ravaged
communities during the year. As demonstrated over many years, the
support from our team members was greatest in the communities
facing the most testing of times.
I thank all our team members for the dedication and commitment
they’ve shown throughout the year.
As we look to the future, I remain confident the Group can navigate
what we can expect to be a challenging environment for the broader
retail sector, fortified by the strength of our brands and customer value
proposition, the resilience of our auto and sports businesses and sales
momentum in our leisure and outdoor categories. This reinforces our
reputation for playing the long game – creating a positive impact on the
communities in which we operate and positioning Super Retail Group
for shareholder returns over the long term.
On behalf of the Board and management, I thank all our customers,
shareholders, and team members for their continuing support.
Sally Pitkin AO
Chair
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22 5
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
CEO’s
message
Dear shareholders
I am pleased to report a strong performance by Super Retail Group in
the 2022 financial year. Your company again exceeded performance
targets in FY22, with a second successive year of record sales despite
the ongoing challenges of the COVID-19 pandemic and the devastating
impact of natural disasters in many of the communities in which we
operate.
With an unrelenting focus on executing our omni-retail strategy,
our enhanced digital capacity, proactive supply chain and inventory
management, and the peerless efforts of our team members, Group
sales increased by 2.8 per cent to $3.55 billion in FY22.
Through targeted and effective pricing and promotions, we were able
to offset higher supply chain costs and deliver a strong gross margin
outcome, while the strategic decision to invest in inventory in response
to anticipated global supply chain issues, enabled us to capture
consumer demand when retail spending rebounded following the
lifting of COVID-19 lockdowns.
Our investment in developing our digital capability also delivered a
compelling return, with the Group recording online sales of $601
million, a 44 per cent increase on the previous year.
The dedicated Super Retail Group team not only had to contend with
the ongoing challenges of the pandemic but were also tested by record-
breaking floods across the eastern seaboard of Australia. These tragic
events had immense impact, both at a local community level but
also across Australia and New Zealand more broadly. As they did so
successfully in recent years, the team demonstrated their resilience and
determination to support our customers no matter the challenges. On
behalf of the executive team, I extend my deep gratitude to all 14,883
team members in the Super Retail Group family.
Launch of the 2022 Triple Eight Race
Engineering and Supercheap Auto-backed
Bathurst Wildcard entry with drivers
Craig Lowndes and Declan Fraser.
Strong financial performance
The Group’s financial performance in FY22 demonstrated the strength
of our business and omni-retail strategy in the face of a deteriorating
external operating environment. Key features of the FY22 financial
performance for the 53 weeks to 2 July 2022 included:
•
•
•
•
•
•
•
Total Group sales up 2.8 per cent to $3.55 billion driven by a strong
second half performance
Online sales up 44 per cent to $601 million
Group gross margin 46.8 per cent
Normalised earnings before interest and tax of $396.6 million
Statutory net profit after tax $241.2 million
Normalised net profit after tax $244.1 million
Statutory EPS of 106.8 cents and normalised EPS of 108.1 cents
The Board has resolved to pay a fully franked final dividend of
43.0 cents per share, bringing the full year dividend to 70.0 cents
per share.
The Group has a strong balance sheet with a positive net cash position
at the end of the financial year.
Building a better business
The business continues to attract and retain new and long-term
customers, with more than one million new members added to our
loyalty programs in FY22. This takes our loyalty program membership to
a record 9.2 million active customers. These club members contributed
70 per cent of Group sales, up from 63 per cent in FY21.
We have more customers than ever and I am pleased to report they
are also increasingly satisfied with our brands, products and service.
Our Group Net Promoter Score, measuring customer satisfaction for
our four core brands, increased to 64.6, with all brands recording an
improved performance during FY22.
Our increased focus on closeness to our customers underpinned our
record sales performance and is a great credit to the Group’s leadership
team and our in-store team members.
Over the next two years, the Group will undertake significant capital
investment to better leverage our customer data. We are launching our
loyalty programs and building our customer analytics to allow all our
businesses to make increasingly personalised offers to our customers
utilising analytically driven data and insights.
Given our large active club member base of 9.2 million customers, the
potential to better leverage our customer data represents an exciting
strategic opportunity for the Group.
Our valuable store network
The value of our store network was further demonstrated in FY22,
even as online sales increased to a record 17 per cent of sales. Our
store network remains fundamental to the shopping preferences of our
customers. More than nine in every ten transactions involved our store
network, through either over-the-counter sales or Click & Collect.
The Group opened 21 new stores in the past 12 months, a net addition
of 18, taking our total number of stores to 716 across Australia and
New Zealand.
Our new store formats including the next generation Supercheap Auto
stores, rebel rCX and BCF small-format regional stores performed well
from both a sales and Net Promoter Score perspective. These outcomes
provide a reminder of the value of continuing to invest in the right kind
of bricks and mortar retail.
The small-format regional BCF stores delivered a rent-to-sales savings
of 25 per cent while the continued rollout of Macpac stores and the
extended sales of Macpac products in rebel and BCF helped to expand
awareness of the brand.
Our network plan for FY23 includes five additional rebel rCX stores,
up to ten new Macpac stores and the opening of our BCF Townsville
superstore.
Four segment-leading brands
Our four core brands maintained their leading positions in the lifestyle
categories that matter to our loyal customers, with each business
delivering record sales results.
Macpac delivered double-digit sales growth due to record June winter
sales while Supercheap Auto, rebel and BCF delivered strong sales
results despite the challenges of COVID-19 and growing concerns about
the economic outlook in the second half of FY22.
Our brand recognition continues to grow across Australia and New
Zealand. Our four core brands are attracting strong brand awareness
scores and we strengthened our portfolio of private and strategic
brands in Supercheap Auto and BCF.
Sustainable omni-retail model
The record sales results in both in-store and online transactions
reinforces our confidence that we have the right omni-retail model to
survive and thrive in the years ahead. Our record online sales growth
of 44 per cent and total online sales of $601 million show that our
omni execution is continuing to improve and that we are capturing an
expanded digital market share.
Since FY19, online sales have increased by a factor of three and
increased as a proportion of overall sales from seven to 17 per cent.
Click & Collect, which leverages the strength of our store network,
continues to outgrow and outpace home delivery. In FY22, Click &
Collect represented 55 per cent of total online sales and nine per cent
of total sales. To add context, there was a 73 per cent increase in sales
growth for Click & Collect versus 20 per cent for home delivery.
While in-store sales continue to dominate our transactions, it is clear
that over the long term the online sales growth trend will continue.
Importantly, we are now well positioned to capitalise on this ongoing
channel shift thanks to our sustained investment in our digital capability.
Our passionate team
Of course, our continued strong performance is only made possible by
our highly capable and passionate team members, who remain deeply
engaged with the business. They share the passion of our customers.
We know that more engaged team members mean better service and
more satisfied customers.
While we recognise there is always more to do to ensure our team
members remain engaged with the business, our team engagement
scores remain high and above the benchmarks we have set for ourselves.
In recognition of our commitment to gender equality across our
organisation, we were awarded the Workplace Gender Equality Agency
(WGEA) Employer of Choice for Gender Equality Citation for the
second consecutive period. We are one of only two Australian retailers
to have achieved this recognition in FY22. We also strengthened our
commitment to diversity in leadership by resetting our gender equality
goal to achieving 40:40:20 in Board, executive and senior leadership
positions by 2025.
6
During the year we continued to explore initiatives to promote diversity,
inclusion and equality across the business, including enhanced Parental
Leave and Secondary Carers’ Leave policies and the establishment of
a Super Retail Group Diversity Committee drawing 20 representatives
from across the organisation.
During the reporting period, we updated our vision, mission and values.
This process began, in late 2020, with team member focus groups and
describes who we are and what we stand for at Super Retail Group.
Sustainability
In FY22, we strengthened our Sustainability Framework (2030) to deliver
better outcomes for our people and planet. The enhanced framework
outlines a commitment to five focus areas: Team, Community,
Responsible Sourcing, Circular Economy and Climate.
During the year we reset our greenhouse gas emissions targets after
feedback from our team, customers and business stakeholders, with a
new goal of zero emissions for Scopes 1 and 2 from our operations and
the energy we consume by 2030.
As a Group, we see decarbonisation as an opportunity to improve the
way we operate and innovate the services we offer our customers. It
will mean using less energy and investing in renewable energy. It will
mean coming together with our industry, landlords, team members and
other stakeholders to achieve our shared goal of reducing our climate
impact.
I am pleased to report that our greenhouse gas emissions (Scopes 1
and 2) across the Group declined by 2.4 per cent and our recycling rates
for waste material in our Australian and New Zealand stores, support
offices and distribution centres was 58 per cent.
The Group improved its Dow Jones Sustainability Index score from 60
to 62 in FY22, placing us in the top quartile of DJSI retail sector. We also
received a leading rating from the Australian Council of Superannuation
Investors for Environmental, Social and Governance (ESG) reporting
relative to peers in the ASX200.
Fit-for-purpose strategy
With new stores, updated formats and a more expansive network
delivering strong results across all brands, we continue to provide more
of what our customers want and make them available in the formats
that suit their preferences.
Our active customer growth and record 9.2 million loyalty club members
demonstrate that we are maintaining a strong position in sought-after
and expanding lifestyle categories. Our plan to better target our loyal
customers through new, personalised, analytics-driven promotions will
ensure we maximise the benefits of our large and active customer base.
The decision to proactively manage our inventory position in response
to the supply chain challenges created by COVID-19 allowed us to be
well stocked to meet rebounding consumer demand. We expect to see
these inventory levels normalise as the impact of the pandemic wanes.
Despite a tightening economic environment, we remain well positioned
for the future. With tight supply limiting new car sales, Supercheap
Auto will have a central role in keeping the older car fleet on the road.
The rise in flexible working, with a greater focus on personal leisure
time, connecting with the outdoors and the uninterrupted resumption
of grassroots sport, allows rebel, BCF and Macpac to be well placed to
continue performing well.
Our conservative balance sheet and net cash position ensures we
are in robust financial health as we navigate the uncertain economic
environment ahead.
During the pandemic we have built a better, stronger business, with an
enhanced customer value proposition and more formidable brands in
the lifestyle categories that matter. Despite a more challenging retail
environment ahead, I am confident we will continue to inspire our
customers to live their passion and deliver value for our shareholders.
Anthony Heraghty
Group Managing Director and
Chief Executive Officer
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22 7
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
About us
14,883
TEAM
MEMBERS
716
STORES
Super Retail Group Limited (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 leading positions in growing high-
involvement lifestyle categories of auto, sports and outdoor leisure.
We provide our customers and highly engaged nine million active
loyalty club members with the option to experience our brands
whenever and however they choose – whether that’s through
our network of 716 stores or via our digital capabilities, which we
continue to enhance.
Our brands
Supercheap Auto is
Australia and
New Zealand’s favourite
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, the
garage and 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. Macpac
operates in both Australia
and New Zealand.
rebel empowers customers
to achieve their sporting
dreams and passions. We are
Australia’s leading sporting
goods retailer, and through
rich digital and in-store
experiences, customers from
all walks of life can harness
the transformative power of
sport. This can have a positive
impact on many levels,
from general well-being to
improved confidence and
self-esteem. rebel helps all
Australians answer the call
of sport.
BCF is a leading outdoor
retailer, 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
7
DISTRIBUTION
CENTRES
3
COUNTRIES OF
OPERATION
Our vision, mission and values
8
About this report
This Annual Report is a summary of the operations, activities and performance of Super Retail Group Limited (ABN 81 108 676 204)
(the Company or Super Retail Group) and its subsidiaries (the Group) for the financial year ended 2 July 2022. The financial year
for FY22 represents a 53-week period.
In this Annual Report, references to ‘we’, ‘us’, ‘our’ and ‘Group’ refer to the Company and its subsidiaries. All dollar figures are
expressed in Australian dollars, unless otherwise stated.
Super Retail Group is conscious of reducing the environmental footprint associated with the production of the Annual Report, and
printed copies are only posted to shareholders who have elected to receive a printed copy.
Corporate governance
Super Retail Group is committed to establishing and maintaining 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 we operate.
Our FY22 Corporate Governance Statement discloses how we have complied with the ASX Corporate Governance Council’s
Corporate Governance Principles and Recommendations (4th edition) for the reporting period. This statement has been lodged
with ASX and is available in the Corporate Governance section of our website at https://www.superretailgroup.com.au/investors-
and-media/corporate-governance/.
Sustainability
Our FY22 Sustainability Report provides stakeholders with information regarding our approach to environmental, social and
governance (ESG)-related risks and progress against our sustainability goals.
In 2022, we refreshed our Sustainability Framework (2030). Informed by a materiality assessment, our new framework has a
greater focus on our people and our planet, is driven by our vision and connected to our stakeholders. It has five priority areas:
Team, Community, Responsible Sourcing, Circular Economy and Climate.
The FY22 Sustainability Report is available on the Company’s website at https://www.superretailgroup.com.au.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22 9
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
Performance
highlights
$3.55b
GROUP SALES
2.8%
SALES GROWTH
$396.6m
NORMALISED EBIT
$349.6m
NORMALISED PBT
$241.2m
STATUTORY
NPAT
$244.1m
NORMALISED
NPAT
70.0¢
DIVIDENDS PER
SHARE, FULLY
FRANKED
10
Customer loyalty and
omni-retail execution
Online sales growth
44%
TOTAL GROUP
ONLINE SALES
GROWTH
64%
SUPERCHEAP
AUTO
36%
BCF
39%
REBEL
35%
MACPAC
73%
CLICK & COLLECT
SALES GROWTH
20%
HOME DELIVERY
SALES GROWTH
Customer loyalty
Sales by channel
9.2m
ACTIVE CLUB
MEMBERS
64.6
AVERAGE
CUSTOMER
NPS
70%
ACTIVE CLUB
MEMBER % OF
GROUP SALES
83%
IN-STORE
SALES
CLICK &
COLLECT
HOME
DELIVERY
9%
8%
55%
CLICK & COLLECT % OF
TOTAL ONLINE SALES
45%
HOME DELIVERY % OF
TOTAL ONLINE SALES
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22 11
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
Our strategy
Growing
annual
customer
value
PRIMARY
VALUE
LEVERS
Being an
efficient
omni-retailer
Ensuring
organic
growth and
capital
discipline
Five strategic drivers
12
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
FY22 outcomes
• Continuing to deliver five-year brand strategy
• Eleven rCX stores now open; BCF opened five small
• Develop organic brand strategies, leveraging
format regional stores
consolidated competitive advantage
• Refresh private brand strategy
• Ongoing store network optimisation
• Continued BCF winter strategy, with increasing
investment in Macpac product
• Range development focused on category extension,
localisation and innovative product options
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
FY22 outcomes
• Developed a data science capability to deliver
business analytics
• Commenced building a personalisation and loyalty
capability through key technology engines and
necessary capabilities
Initiated personalisation trial for BCF
•
• Developed omni-digital operating model; mid delivery
strategies to customer
for new customer engagement capabilities
• Expanded 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
FY22 outcomes
• Agile management of international supply chain
volume and cost management pressures
• Managed record volume flows and negotiated limited
• Orchestrate customer online orders
• Maximise benefits of Group sourcing
cost growth through volatile environment
• Developed matrix of store hubs and distribution
capability
centres to optimise online fulfilment
• Went live with new Warehouse Management System
• Supply chain TRIFR reduction of 19 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
• Align KPIs and value mindset
• Modernise technology infrastructure to be
fit-for-purpose
FY22 outcomes
• Developed and rolled out new digital and
•
technology operating model
Implemented workforce planning capability in all
four brands
• Developed common KPIs for teams across multiple
functions and brands
EXCEL IN OMNI-RETAIL: Enhancing our customer experience through all touchpoints
along the customer journey.
5
Focus areas
• Build expertise for our customer-facing
FY22 outcomes
• Continued investment in store experience across
teams, underpinned by team members as
industry experts
• Deliver a seamless ‘Super Retailer’
experience
• Evolve the store experience
all four brands
• Extended in-store expertise to digital delivery
• Extended fitment capability in Supercheap Auto and BCF
• Ongoing use of artificial intelligence for merchandising
• Enhanced websites with improved navigation
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
13
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
Supporting our communities
Being there for our communities is one of the key reasons we do
what we do.
Through the reporting period, the Group mobilised around
important community causes, charities and benevolence
programs. Not only do these endeavours contribute to the
communities in which we operate, they also reflect the passions
of our team members and customers.
Targeted flood relief
In early 2022, we all watched in disbelief
as flood waters swept away homes and
livelihoods in south-east Queensland and
northern New South Wales.
the
As a company with a strong Queensland
heritage, we
immense
recognised
impact the floods had on local communities.
the communities devastated
Rebuilding
by these floods would require enormous
commitment and determination, as was the
case with the communities ravaged by the
2019-2020 ‘Black Summer’ bushfires.
The Group supported our loyal customers
and team members directly involved in the
clean-up and recovery effort by contributing $100,000 to the
Red Cross Flood Appeal and $50,000 to Lismore City Council. Our
rebel stores also donated sporting goods to local sporting clubs
including Coomera Soccer Club, Redcliffe Tigers AFL Club and
Murwillumbah Colts Junior Rugby League, to replace damaged
equipment.
Super-sized giving program
During the reporting period, Supercheap Auto launched its charity
fundraising program by announcing three official community
partners: Beyond Blue, HeartKids and the Australian Road Safety
Foundation.
The multi-year partnerships will help raise awareness, funds and
support for Australians across three core causes: mental health;
congenital heart disease; and the physical and mental illness,
death and disability that arise from road incidents.
The charity partners each received an initial $50,000 donation
from Supercheap Auto. Every Supercheap Auto store in Australia
then selected one partner to rally around with customers offered
the option of donating at the checkout, either through a register
round-up amount or a fixed donation. Supercheap Auto matched
customer fundraising efforts up to a further $50,000 per charity.
Mental health is a team sport
In support of Mental Health Week, rebel and its trade partners
donated $500,000 to Lifeline to help meet the needs of the
growing number of Australians seeking mental health support.
In addition, rebel and Lifeline Australia entered into a three-year
partnership, which recognises the transformative power of sport
and its positive impact on mental health and suicide prevention.
The organisations will work together to inspire every Australian
to be active and participate in physical activity to help manage
their mental health, while raising funds for Lifeline to continue its
critical work.
Small change for big change
BCF is the major partner of OzFish and is passionate about the
shared commitment to restore and protect fish habitats and the
future of recreational fishing in Australia.
The two organisations paired up in June 2022 to raise funds to
improve the future of fishing in Australia with the Small Change
4 Big Change weekend. The weekend was created by BCF and
OzFish to help habitat protection and restoration in our rivers,
estuaries, and reefs.
All donations made in store were matched by BCF and will support
the 90 vital fish habitat restoration projects managed by OzFish.
Every donation, big and small, helps improve the future of fishing
in Australia and more than $69,000 was raised over the weekend.
Giving back for long-term change
Our Macpac team are passionate about creating long-term
positive change for the good of people and planet. Since 2018,
the Macpac Fund for Good has strengthened local communities
14
across Australia and New Zealand with financial aid (cash grants),
or the provision of Macpac apparel and equipment.
The fund supports not-for-profit organisations focused on the
protection, regeneration or monitoring of native flora or fauna;
providing adventure-based learning, therapy or environmental
in
education, and Indigenous community projects working
these areas.
Macpac customers can support the Fund for Good by purchasing
Fund for Good products or by refusing an in-store retail bag.
Every time a bag is refused, Macpac contributes $0.20 to the
Fund for Good.
During FY22, the fund awarded grants to more than 20 charitable
organisations committed to doing good in the world, including
Save the Kiwi, Youth Inc, and WAI Wanaka.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22 15
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
ESG highlights
Achievements
Macpac recognised as
Sustainability Champion of the year (2021)
by the National Retail Association (AU)
Monash University recognition:
one of only twelve ASX300
companies awarded a B grade for
Modern Slavery statement, putting
the Group in the top 18 ASX300
companies representing effective
reporting and best practice.
Awarded the WGEA’s Employer
of Choice for Gender Equality
citation for the second
consecutive period.
A member of the S&P Global
Sustainability Yearbook 2022.
Dow Jones Sustainability Index
score of 62, placing the Group
in the top quartile within the
DJSI retail sector.
Rated as Advanced under the
Australian Packaging Covenant
Organisation (APCO).
L EA D I N G
Rated as leading by the Australian
Council of Superannuation
Investors (ACSI) for the quality of
our ESG reporting relative to our
ASX200 peer group.
16
People
Planet
10.7
Total Recordable Injury
Frequency Rate (TRIFR)
A 13 per cent increase on
the prior year
>2,500
82 and 80
Number of team members
participating in the “I Am Here”
program
Engagement score October 2021,
June 2022. Above the Achievers*
benchmark (77)
37.5%
45.5%
37.3%
Female representation at
Board level
Female representation at
executive leadership level
Female representation at senior
leadership level
$100,000
$500,000
$50,000
each
Super Retail Group donation
to the Australian Red Cross
Flood Appeal
rebel donation to Lifeline as part
of its commitment to mental
health support
Supercheap Auto donation to
Beyond Blue, Heartkids Australia
and Australian Road Safety
Foundation
* Achievers is a global expert in employee recognition and engagement
16.9%
2.4%
58%
Reduction in greenhouse
gas emissions (Scopes 1 and 2)
from the FY17 base year
Reduction in greenhouse
gas emissions (Scopes 1 and 2)
from FY21
Recycling rate for waste material
in stores, offices and distribution
centres
1,101,200L
91,167
56,751
Recycled litres of oil through
Supercheap Auto
Recycled car batteries through
Supercheap Auto
Recycled pairs of shoes through
rebel and Macpac’s in-store
collection
>1m
1%
87
Bags refused through Macpac’s
‘Refuse a Bag’ program reaching
a major milestone since the
program began in 2018
Percentage reduction of total
electricity use to 80,723 MWh
Store lighting upgrades with
expected energy saving of
549 MWh
$350,000
$253,452
Contributed to OzFish and
helped customers raise a further
$488,673 through BCF
Grants and gear provided
through Macpac Fund for Good
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22 17
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
50 years of making
it super
From humble beginnings in 1972, Supercheap Auto
has grown to become Australia and New Zealand’s
favourite specialty automotive parts and accessories
retail businesses with more than 325 stores and
record sales in FY22.
In 2022, Supercheap Auto proudly commemorated 50
years of operation. In celebration of this achievement,
Supercheap Auto acknowledged those who have
been part of the business across the decades, shared
important milestones, and celebrated the milestone
with customers and the car-loving community who
made it possible.
In order to meet the changing needs of Supercheap
Auto’s customers and modernise the brand, a new
brand platform was created to showcase that …
“whoever you are, whatever you drive, Supercheap
Auto can help you Make It Super”. The platform
brought to life the diversity of the Supercheap Auto
customer, their love for their vehicles, and included
an extensive marketing campaign across television,
digital, social, outdoor, radio and in-store.
The launch of the brand platform coincided with a
reimagination of the brand’s visual identity, the first
revision in more than 15 years. Updates included
a subtle logo change to improve the legibility and
application, a simplified colour palette and the
introduction of new fonts,
icons, graphics, and
imagery. Uniforms were also updated to help our
team continue to be customer-focused.
The Redcliffe store in Queensland was used as a
test-and-learn for the new visual design before
changes were implemented more widely through the
Supercheap Auto ‘Store Improvements’ program. For
example, the new internal and external store signage
was designed to be more welcoming to Supercheap
Auto’s diverse range of customers and create cohesion
across various store touchpoints.
For more than 50 years now, Supercheap Auto has
empowered journeys and the team look forward to
making it “Super” for customers, their peers, and the
community for many more years to come.
18
Supercheap Auto is Australia and New Zealand’s favourite 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, the garage and shed.
329
STORES
3.2m
ACTIVE CLUB
MEMBERS
65
AVERAGE ACTIVE
CLUB MEMBER NPS
$1.34b
SALES
64%ONLINE SALES
GROWTH
$176mSEGMENT PBT
36%ACTIVE CLUB
MEMBER GROWTH
59%ACTIVE CLUB
MEMBERS % OF
TOTAL SALES
88%BRAND
AWARENESS
Stellar Market Research;
Australia FY22
87%IN–STORE
% OF TOTAL
SALES
10%CLICK & COLLECT
% OF TOTAL SALES
3%HOME DELIVERY
% OF TOTAL
SALES
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22 19
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
Innovative rebel
customer experience
stores inspire
sporting passions
The first rebel Customer Experience (rCX) store
opened to sports enthusiasts at Doncaster, Melbourne
in March 2020. This store was quickly followed by
the expansion and refurbishment of sites including
Miranda and Parramatta
in New South Wales,
Chermside in Queensland, and Chadstone in Victoria.
A further six stores joined the fleet in the last two
years, and, in June 2022, rebel launched its eleventh
rCX concept store in Penrith, New South Wales.
innovative
The
layout of the rCX retail space
encourages customers to test products and equipment
in physical experience zones including half-court
basketball, indoor football pitches and sports gaming
consoles. The rCX stores showcase the expanded
range of products across high-involvement sports,
with additional emphasis on the display of products in
Running, Gym & Fitness, Football, Basketball and
Kids categories.
Longstanding partnerships with key trade partners
including Nike, adidas, Under Armour, Puma, ASICS
and New Balance, strengthen the concept, allowing
access to high-end and marquee products as well as
extended ranges and styles that are exclusive to rebel.
The rCX concept was designed to shake up the sporting
landscape and emphasise rebel’s brand promise.
Since launching, it has delivered strong growth across
its eleven rCX stores. For example, in March 2022,
rebel Highpoint (eighth rCX store) became the largest
rCX store with more than 2,700 sqm of space. Since
its launch, the store has shown strong year-on-year
growth with sales increasing by more than 40 per cent
compared to the same period last year.
Another example is the launch of rebel’s first flagship
rCX store in a central business district (Adelaide) in
April 2022. The heritage-listed building in Adelaide’s
Rundle Mall shows how the cutting-edge retail
concept adapted to a more traditional architectural
format, while still reflecting rebel’s sporting heritage.
Since its launch, and in comparison to the same period
in the prior year, the store has recorded significant
sales growth of more than 80 per cent.
20
rebel empowers customers to achieve their sporting dreams and passions. We are Australia’s leading
sporting goods retailer, and through rich digital and in-store experiences, customers from all walks of life
can harness the transformative power of sport. This can have a positive impact on many levels, from general
well-being to improved confidence and self-esteem. rebel helps all Australians answer the call of sport.
155
STORES
3.3m
ACTIVE CLUB
MEMBERS
62
AVERAGE ACTIVE
CLUB MEMBER NPS
$1.21b
SALES
39%ONLINE SALES
GROWTH
$141mSEGMENT PBT
2%ACTIVE CLUB
MEMBER GROWTH
69%ACTIVE CLUB
MEMBERS % OF
TOTAL SALES
92%BRAND
AWARENESS
Stellar Market Research;
Australia FY22
78%IN–STORE
% OF TOTAL
SALES
9%CLICK & COLLECT
% OF TOTAL SALES
13%HOME DELIVERY
% OF TOTAL
SALES
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22 21
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
Regionally-relevant
brand expansion
for BCF
In response to the changing retail landscape, BCF
has been trialling new brand and category initiatives,
including new regional formats and store locations.
In FY22, BCF furthered its expansion strategy into
regional
locations and continued expanding the
brand range in stores and online. The objective of this
strategy was two-fold: to reach more customers, and
to be more relevant to the local community in each
location.
In the reporting period, BCF opened five small-format
stores in regional locations including Sale, Victoria
and Margaret River, Western Australia. These stores
deliver a localised and tailored range to customers,
while allowing for a smaller store size at an average of
838 square metres. While these smaller stores hold key
products and brands, they hold about 24 per cent less
range than a standard BCF store and are performing
above business case expectations by an average of
20 per cent.
In addition to new regional formats, BCF launched
its first Tackle Store concept in Mackay in December
2021. The tackle ‘store-in-a-store’ concept delivers
regionally-relevant fishing and boating offers. This
has been successful with an NPS improvement of
1.8 points and sales 6 per cent higher than fleet since
its launch.
While fishing’s popularity continued to dominate in the
north of Australia, BCF’s winter product amplification
rolled out to the southern store network. A successful
trial of select Macpac ranges in four Tasmanian BCF
stores during winter 2020 led to the successful FY22
roll-out of Macpac into 44 southern stores, supported
by expansion in hiking, bushwalking and cold climate
camping ranges.
The accelerated demand for the 4WD and caravan
categories, experienced in FY21, continued throughout
the reporting period. To meet the demand, BCF
expanded these categories to an additional 25 stores
in FY22, accompanied by purpose-built fixtures,
improved signage and displays for customers.
BCF also added a number of key brands to the range
in FY22, including Yeti (in 30 stores) and Zempire
(in 101 stores). These brands emphasise BCF as
a destination for quality, outdoor big brands that
support customer participation in everything boating,
camping, and fishing.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
22
22
BCF is a leading outdoor retailer, 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.
147
STORES
2.1m
ACTIVE CLUB
MEMBERS
66
AVERAGE ACTIVE
CLUB MEMBER NPS
$830mSALES
36%ONLINE SALES
GROWTH
$60mSEGMENT PBT
7%ACTIVE CLUB
MEMBER GROWTH
87%ACTIVE CLUB
MEMBERS % OF
TOTAL SALES
80%BRAND
AWARENESS
Stellar Market Research;
Australia FY22
86%IN–STORE
% OF TOTAL
SALES
9%CLICK & COLLECT
% OF TOTAL SALES
5%HOME DELIVERY
% OF TOTAL
SALES
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22 23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
Macpac’s in-house repairs service
Care, repair, and
community at
Macpac
The Macpac team believe that sustainability begins
with quality gear that is designed and built to last.
They know there is a need to help customers keep
their gear going, for years to come. As evidence of this,
Macpac has offered an in-house repairs department
as a core part of the Macpac offer since it first opened.
The Macpac team have also since recognised that
there is a need for a more comprehensive approach
to address its impact; an approach that involves the
entire Macpac team and supports local charities and
strengthens our communities.
The Resource Recovery Program was developed to
provide responsible solutions for a wide range of
materials regularly encountered in stores.
The Resource Recovery Program has three pillars:
Empower and educate the retail team
Macpac’s retail team are trained to follow in-house
Resource Recovery guides for product, along with
location-specific recycling guides for all other store
materials. Key metrics of waste diversion are shared
with teams, so they are empowered to divert as much
from landfill as possible.
Provide simple, visual, and easy-to-use guides
Macpac created its own guides for resource recovery
and waste diversion, in the absence of a suitable
existing approach with an appropriate level of detail,
and also proactively sought partners who could
provide suitable solutions.
Collaborate with industry partners
Macpac has donated quality used gear to charitable
organisations in its communities for a number of
years. For gear that is faulty or unable to be donated,
Macpac partners with two organisations in Australia
that provide responsible repurposing and recycling
solutions:
• Offtrack’s 2nd Life Project – Macpac donates
used gear to the 2nd Life Project who lend to
learning institutions. Product beyond use, in its
current form, is also donated and the 2nd Life
Project team repurpose them into new products
for the outdoor industry.
• Upparel - Macpac partners with Australian
circular brand, Upparel, for product that cannot
be re-used or re-purposed. Upparel is a Certified
B-Corporation (B Corp), who recycles donated
products turning them into something new.
In August 2021, Macpac was recognised as the National
Retail Association’s 2021 Sustainability Champion of
the Year for its commitment to positive corporate
citizenship. The award celebrates businesses who
lead the way in improving environmental awareness
to employees and customers, sustainable forward
thinking, and reduction of waste.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
24
24
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. Macpac operates in both Australia and New Zealand.
85
STORES
0.6m
ACTIVE CLUB
MEMBERS
69
AVERAGE ACTIVE
CLUB MEMBER NPS
$177mSALES
35%ONLINE SALES
GROWTH
$19mSEGMENT PBT
22%ACTIVE CLUB
MEMBER GROWTH
72%ACTIVE CLUB
MEMBERS % OF
TOTAL SALES
86%BRAND
AWARENESS
Stellar Market Research;
New Zealand FY22
77%IN–STORE
% OF TOTAL
SALES
4%CLICK & COLLECT
% OF TOTAL SALES
19%HOME DELIVERY
% OF TOTAL
SALES
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22 25
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
Passionately supporting
our team
Vision, mission and values
The vision, mission and values that guide our team at Super
Retail Group are a powerful tool. They help us communicate
our intentions as an organisation, and they inspire our team
by guiding action and driving behaviour.
Since first articulating Super Retail Group’s vision and values
in the early 2000s, we have grown our brands, we have a
significantly larger and much more diverse group of team
members, we have transitioned to an omni-retailer, and
the retail industry in which we operate has evolved quite
dramatically.
In early 2022, we launched a new and defining set of
vision, mission and values for Super Retail Group. These were
developed from the ground up and started with team member
focus groups in late 2020. They have come from our team, and
are for our team.
Our vision is the reason we show up. Inspiring you to live
your passion.
Our mission is the flag on the hill, our collective ambition. To
inspire 10 million active customers to live their passion by
2025.
Our values act as our guardrails, and they are the way we will
hold ourselves and each other accountable. They guide us in
our decisions, our actions and our behaviours.
As a team, we will use our updated vision, mission and values
framework as a positive force for change.
A safe and healthy team
10.7
TRIFR - 138 INCIDENTS
PER MILLION HOURS
WORKED
Total Recordable Injury Frequency Rate (TRIFR) increased by 13 per cent in FY22 to
10.7. Seventy-six per cent of recorded injuries were caused by manual handling, with
COVID-19 being a contributing factor in raising the risk of this type of injury.
Assurance is achieved through monthly verification of controls by leaders at every
site. The Health and Safety and Asset Protection teams find further opportunities for
improvement via field verification.
Key areas of focus were critical risks and general housekeeping controls (given
the predominant cause of TRIFR incidents relate to manual handling incidents).
Standardisation of ladders and safety steps reduced exposure to work-at-height risks.
We continue to develop leadership capability about safety to improve safety maturity,
with ten learning modules delivered to leaders across six topics.
26
An engaged and passionate team
An engaged and passionate team is a core ingredient to achieving our
vision. The passion and knowledge of our people underpins our strategy
for operating in high-involvement categories.
The average of our two engagement surveys undertaken in FY22 was 81,
which is four points above the Achievers global benchmark.
In the second survey, we introduced a People Leader Index that provides
insight about individual leadership capability across five drivers: care,
context, clarity, communication and coaching. The inaugural score for
Super Retail Group leaders was 84, which now provides an internal
baseline to build on for the Group’s leadership.
Our team’s passion is further seen in their engagement with our key
internal platforms: SOULmoments (recognition) and Workplace (internal
communication). These platforms are core to communicating our
strategy and sharing our success. Every month, on average, 83 per cent
are active on Workplace and there are 15,199 recognitions, both of which
are above benchmark.
Diversity in leadership
Super Retail Group’s citation as an ‘Employer of Choice’ was renewed
with the Workplace Gender Equality Agency in FY22. We were one of only
two retailers to receive the citation, which re-affirms our commitment
leadership and achieving gender equality across
in
to diversity
our organisation.
In the reporting period we reset our gender equality goal to achieving
40:40:20 in Board, executive and senior leadership positions by 2025 (40
per cent identifying as female, 40 per cent identifying as male, and 20
per cent identifying as any gender). Female representation on our Board
is 37.5 per cent, 45.5 per cent at the executive level and 37.3 per cent for
women in senior leadership.
Continuous learning and development
We continued our targeted investment in team member and leadership
learning and development. Our two key learning platforms (SOULexperts
and SOULlibrary) delivered more than 135,000 hours of learning,
equipping our team with the knowledge to meet our customers’ needs
and to grow in their roles.
Our three leadership development programs (senior leader, extended
leader and women in leadership) expanded to include a targeted program
for Area Managers. These 61 leaders are critical leaders of our 750 store
management roles and 12,500 retail team members.
Furthermore, more than 90 team members completed their Accredited
Learning journeys and now hold a Certificate III in Retail Operations or
Certificate IV in Retail Management qualification. In New Zealand, 11
team members completed their Certificate in Retail – Level 4.
82 and 80
TEAM MEMBER
ENGAGEMENT
October 2021,
June 2022
15,199
AVG TEAM MEMBER
RECOGNITIONS
PER MONTH
37.3%
WOMEN IN SENIOR
LEADERSHIP
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22 27
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
Board of Directors
Appointed
Committees
Qualifications and experience
SALLY PITKIN AO
Independent
Non-Executive Chair
ANTHONY HERAGHTY
Group Managing Director
and Chief Executive Officer
REG ROWE
Non-Executive Director
Director since 1 July 2010
Chair since 23 October 2017
20 February 2019
8 April 2004
Chair of the Nomination
Committee
Member of the Human Resources
and Remuneration Committee
Member of the Nomination
Committee
Sally has more than 25 years’
experience as a Non–Executive
Director in the listed, private,
public and non-profit sectors,
including in international
markets, and 18 years’
experience as a non-executive
director of ASX200 companies.
Sally is a Fellow of the Australian
Institute of Company Directors
and Chair of the Institute’s
Corporate Governance
Committee. She is a former
lawyer and senior corporate
partner of a national law firm.
Sally holds a Doctor of Philosophy
(Governance), a Master of
Laws and Bachelor or Laws.
In 2021, Sally was recognised
with an Order of Australia
for her “distinguished service
to business, to corporate
governance standards and
performance, to the arts, and to
the advancement of women”.
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. Anthony
holds a Bachelor of Business
from the Queensland University
of Technology and is a graduate
member of the Australian
Institute of Company Directors.
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
speciality 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 Waltons and 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.
Directorships of listed
companies within past
three years
Director of Link Administration
Holdings Limited (since
September 2015)
Director of The Star
Entertainment Group Limited
(December 2014 – June 2022)
Leisure passion
Bush walking and skiing
Fishing, camping, hiking, cycling,
walking and cars
Enjoying time with family, walking
and gardening
28
HOWARD MOWLEM
Independent
Non-Executive Director
PETER EVERINGHAM
Independent
Non-Executive Director
ANNABELLE CHAPLAIN AM
Independent
Non-Executive Director
JUDITH SWALES
Independent
Non-Executive Director
13 June 2017
19 December 2017
31 March 2020
1 November 2021
Chair of the Audit and Risk
Committee
Member of the Human Resources
and Remuneration Committee
Chair of the Human Resources
and Remuneration Committee
Member of the Audit and Risk
Committee
Member of the Nomination
Committee (until 30 June 2022)
Member of the Audit and Risk
Committee
Member of the Nomination
Committee (since 1 July 2022)
Member of the Audit and
Risk 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 2003 to 2010,
he was Chief Financial Officer
and board member of Dairy Farm
International Holdings, a Hong
Kong-based pan-Asian retailer.
Prior to that, for 12 years he
held various finance positions at
Coles Myer Ltd, including Finance
Director for Coles Supermarkets.
Howard was formerly a Non-
Executive Director and Audit
Committee Chair of Billabong
International Limited. He
holds a Bachelor of Economics
(Hons), a Master of Business
Administration and Securities
Industry Diploma, and is a Fellow
of CPA Australia.
Peter in 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 iCar Asia Limited,
ME Bank and the education
businesses, IDP Education, Online
Education Services and THINK
Education, as well as Chairman of
SEEK’s China subsidiary, Zhaopin
Limited. Prior to SEEK, Peter was
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 Australia
Institute of Company Directors.
Peter is also a Director of WWF-
Australia.
Annabelle brings broad-ranging
experience in financial services,
industrial and infrastructure
services. Her previous roles
include Chair of Queensland
Airports Ltd and Director of
Downer EDI Limited, Credible Labs
Inc and EFIC (Australia’s export
credit agency).
Annabelle is a member of
the Australian Ballet Board of
Directors.
She 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 Gold Coast community.
Director of Medibank Private
Limited (since March 2022)
Director of iCar Asia Limited
(July 2017 – May 2022) (delisted
from ASX on 11 February 2022)
Director of Seven Group Holdings
Limited (since November 2015)
Chairman of MFF Capital
Investments Limited (Director
since May 2019 and Chairman
since August 2019)
Judith is a retail, sales, marketing
and manufacturing professional
who has more than 20 years’
experience in high profile, global,
consumer facing companies.
Judith is currently the Chief
Executive Officer Global Markets
at Fonterra.
Her previous roles include
Managing Director of Heinz
Australia, Chief Executive Officer
and Managing Director of
Goodyear Dunlop Tyres Australia
and New Zealand, and Managing
Director of Angus & Roberston/
WH Smith Australia. She also
previously served as a Non-
Executive Director of Fosters,
Virgin Australia and DuluxGroup.
Judith holds a Bachelor of Science
(Honours) in Microbiology and
Virology (University of Warwick)
and is a graduate member of the
Australian Institute of Company
Directors.
Director of Virgin Australia
Holdings Limited (May 2019 –
October 2020) (delisted from ASX
on 17 November 2020)
Director of DuluxGroup Limited
(April 2011 – August 2019)
(delisted from ASX on 22 August
2019)
Golf
Hiking, travel and reading
Golf and squash
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22Ocean swimming 29
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
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.
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.
SU DUFFEY | Chief of Business Operations and Chief of Staff
Su joined Super Retail Group in July 2022 as Chief of Business Operations and Chief of Staff
following a 30-year career spanning a range of leadership and executive roles in Australia and
New Zealand. Her experience covers strategy, operating model and organisation design, Human
Resources, marketing, retail customer experience, and ways of working and digital transformation.
Su holds a Master of Business Administration and a Bachelor of Arts (Politics and History), both
from Victoria University of Wellington in New Zealand.
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 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.
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.
30
MANDY ROSS | Chief Information and Digital Officer
Mandy is an experienced IT and digital executive with expertise across technology delivery,
digital, transformation and IT operating models. She joined Super Retail Group in October
2021 from Griffith University where she was Chief Digital Officer. Prior to her role with Griffith
University, Mandy held CIO roles with ASX-listed Tabcorp, LiteracyPlanet and Wotif Group. In
these roles, Mandy has traversed traditional organisations that need to accelerate their digital
maturity as well as high-growth digital-native companies.
RORY SCOTT | Chief Strategy and Customer Officer
Rory has been with Super Retail Group since October 2010 in a variety of roles covering
merchandising, marketing and strategy. In July 2022, Rory was appointed as Chief Strategy and
Customer Officer with responsibility for corporate strategy development, analytics, marketing and
customer strategy. He holds a Bachelor of Economics degree from Trinity College, Dublin. Rory has
extensive international retail experience including leadership roles with Marks and Spencer, Jigsaw
and Australian Geographic and has worked in a number of countries throughout Asia and Europe.
CATHY SEAHOLME | Managing Director – Macpac
Cathy is an experienced retail executive, holding senior leadership roles with high-profile
businesses during a retail career in Australia of more than 30 years. Cathy was previously
General Manager Retail Operations for Priceline Pharmacy, part of the ASX-listed Australian
Pharmaceutical Industries Limited, one of Australia’s leading health and beauty companies. Prior
to Priceline, Cathy was General Manager for The Body Shop Australia, and has previously held
senior leadership roles with retail brands including Meredith, French Connection and the Country
Road Group’s Witchery and Mimco.
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 25 years in senior management roles across Australia, UK, US
and Europe, including two decades with international supermarket giant ALDI. Previously, he
was Managing Director, Global Business Coordination for ALDI Supermarkets based in Germany.
Benjamin also held various senior leadership roles at ALDI in Operations, Merchandising,
Transformation and Change Management.
DARREN 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.
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 FY22 31
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
Directors’ Report
Remuneration Report
Financial Statements
For the financial
year ended
2 July 2022
2022 SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
DIRECTORS’ REPORT
32
32
The Directors present their report together with the consolidated financial statements of the Group comprising Super Retail Group and its
subsidiaries for the financial year ended 2 July 2022.
The Company has adopted a 53-week financial year, for financial reporting purposes, which ended on 2 July 2022. The prior financial year
was a 52-week period ended on 26 June 2021.
1.
Directors
The following persons were Directors of the Company at any time during the financial year and up to the date of this report:
-
-
-
-
-
-
-
-
Sally Pitkin AO - Independent Non-Executive Chair
Anthony Heraghty - Group Managing Director and Chief Executive Officer (Group MD and CEO)
Annabelle Chaplain AM - Independent Non-Executive Director
Peter Everingham - Independent Non-Executive Director
Howard Mowlem - Independent Non-Executive Director
Reg Rowe - Non-Executive Director
Judith Swales - Independent Non-Executive Director (appointed 1 November 2021)
Gary Dunne - Independent Non-Executive Director (retired effective 31 December 2021)
Those Directors listed as Independent Non-Executive Directors have been independent throughout the period of their appointment.
Details of the qualifications, experience, special responsibilities and other details of the Directors are set out on pages 27 to 28.
2.
Board and Board Committee meetings and attendance
The number of meetings of the Board and each Committee and the individual attendance by Directors at those meetings which they were
eligible to attend, during the financial year, is summarised below:
Total number of
meetings held
Sally Pitkin AO
Anthony Heraghty
Annabelle Chaplain AM (2)
Peter Everingham (3)
Howard Mowlem
Reg Rowe
Judith Swales (4)
Gary Dunne (5)
A
11
11
11
11
11
11
6
5
Board
11
Nomination
Committee
Audit and Risk
Committee
Human Resources
and Remuneration
Committee
Board Sub-
Committee
3
4
5
2
B
11
11
11
11
11
11
6
5
A
3
1(1)
-
3
-
3
-
-
B
3
-
-
3
-
3
-
-
A
3(1)
4(1)
4
4
4
4(1)
2
2
B
-
-
4
4
4
-
2
2
A
5
5(1)
4(1)
5
5
5(1)
-
3(1)
B
5
-
-
5
5
-
-
-
A
2
2
-
-
2
-
-
-
B
2
2
-
-
2
-
-
-
(1) Indicates that a Director is not a member of a specific Committee and attended by invitation.
(2) Ms Chaplain was appointed a member of the Nomination Committee on 1 July 2022.
(3) Mr Everingham retired as a member of the Nomination Committee on 30 June 2022.
(4) Ms Swales was appointed as an Independent Non-Executive Director, and as a member of the Audit and Risk Committee, on 1 November 2021.
(5) Mr Dunne retired from the Board as an Independent Non-Executive Director on 31 December 2021.
A Number of meetings attended.
B Total number of meetings eligible to attend as a member.
All Board members may attend any Committee meeting even if they are not a member of the relevant Committee.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
33
33
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
DIRECTORS’ REPORT (continued)
3.
Directors’ interests
As at the date of this report, the Directors have relevant interests in ordinary shares of the Company and other relevant disclosable interests,
as notified by the Directors to the ASX in accordance with the Corporations Act, in the following:
Director
Sally Pitkin AO
Anthony Heraghty
Annabelle Chaplain AM
Peter Everingham
Howard Mowlem
Reg Rowe
Judith Swales
Number of ordinary shares
Number of performance rights
68,405
159,101(1)
11,865
40,000
34,286
65,890,431
5,925
-
334,308
-
-
-
-
-
(1) Includes 32,023 restricted shares held under the Super Retail Group Employee Equity Incentive Plan.
Further details regarding the performance rights and restricted shares held by the Group MD and CEO are set out in the Remuneration Report
on pages 60 to 63.
4.
Company Secretary
Ms Rebecca Farrell is the Company Secretary of the Company. Ms Farrell was appointed to the position of Chief Legal Officer and Company
Secretary on 10 February 2020. Details of Ms Farrell's qualifications and experience are set out on page 29.
5.
5.1
Operating and Financial Review
Overview of the Group
The Group is a for-profit entity and is primarily involved in the retail industry. Founded in 1972 as an automotive accessories mail order
business that evolved into Supercheap Auto, the Group has grown through both organic growth and mergers and acquisitions evolving its
principal activities to include:
-
-
-
- Macpac: retailing of apparel, camping and outdoor equipment.
Supercheap Auto (SCA): retailing of auto parts and accessories, tools and equipment;
rebel: retailing of sporting equipment and apparel;
BCF: retailing of boating, camping and outdoor equipment, fishing equipment and apparel; and
For further details about the Group’s strategy refer to pages 11 to 12.
5.2
Review of financial condition
When reviewing the financial results of the Group, the following factors require consideration:
-
FY22 comprised a 53-week trading period as compared to 52-weeks for FY21. An unaudited non-IFRS comparative (“Adjusted”) has
been provided, which adjusts FY22 down to 52 weeks and compares against the FY21 result. The intention is to provide the user of the
financial information with a more meaningful comparative;
Like-for-like sales growth compares our unaudited estimated 52-week FY22 results against FY21 for stores that were open for more
than one year; and
COVID-19 lockdowns affected the first half of FY22.
-
-
(a)
Group results
Revenue from continuing operations
Statutory profit for the period after tax
Segment earnings before interest and taxes (EBIT)
% to sales
Segment normalised profit before taxes (PBT)
% to sales
Normalised net profit after tax (NPAT)
Operating cash flow
Earnings per share (EPS) – basic (cents)
Dividends per share (cents)
FY22
(53 weeks)
$m
3,550.9
241.2
396.6
11.2%
349.6
9.8%
244.1
340.4
106.8
70.0
FY21
(52 weeks)
$m
3,453.1
301.0
476.8
13.8%
435.8
12.6%
306.8
600.0
133.4
88.0
Change
Adjusted
%
2.8%
(19.9%)
(16.8%)
%(1)
1.0%
(21.1%)
(18.0%)
(19.8%)
(21.0%)
(20.4%)
(43.3%)
(19.9%)
(20.5%)
(21.6%)
(35.0%)
n/a
n/a
(1) Adjusted change is an unaudited non-IFRS measure adjusting FY22 down to 52 weeks to provide a more meaningful comparative to FY21.
The Group delivered a record sales result that was up 2.8 per cent on FY21 (or up 1.0 per cent adjusted), with digital sales growing 44 per
cent to a record $601 million and active club memberships growing by 14 per cent to a record 9.2 million members. The impact of COVID-19
resulted in lockdowns during the first half of FY22 that disrupted in-store revenues, however the second half sales grew strongly as foot
traffic recovered.
33
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
34
34
DIRECTORS’ REPORT (continued)
3.
Directors’ interests
As at the date of this report, the Directors have relevant interests in ordinary shares of the Company and other relevant disclosable interests,
as notified by the Directors to the ASX in accordance with the Corporations Act, in the following:
Number of ordinary shares
Number of performance rights
DIRECTORS’ REPORT (continued)
5.
5.2
(a)
Operating and Financial Review (continued)
Review of financial condition (continued)
Group results (continued)
68,405
159,101(1)
11,865
40,000
34,286
65,890,431
5,925
334,308
-
-
-
-
-
-
Our segment normalised Profit Before Tax (PBT) fell $86.2 million (19.8 per cent) to $349.6 million, with the following being the key drivers:
-
Ongoing global supply chain disruption has seen our supply chain costs increase, whilst we have also increased promotional activity,
particularly in BCF. These factors have seen our gross profit trading margins decrease from the record FY21 result by 1.1 percentage
points to 46.8 per cent.
- We have continued to execute our store development and strategic portfolio programs. Expenditures on strategic programs include
customer loyalty, digital experience, workforce planning, warehouse management, endless-aisle and gift card platforms. These are
important initiatives intended to provide long-term growth capability to the Group.
The result also includes a $5.9 million write-down in our investment in Autoguru (including loans) as well as expenditures associated
with building our customer loyalty and personalisation capability.
-
(1) Includes 32,023 restricted shares held under the Super Retail Group Employee Equity Incentive Plan.
Further details regarding the performance rights and restricted shares held by the Group MD and CEO are set out in the Remuneration Report
Omni-retail strategy and impact of COVID-19
The success of our omni-retail strategy continues to provide customers with a seamless transition from online to in-store experiences and
we have again seen a strong increase in online revenues of 44 per cent to $601 million. This growth is built on ongoing expenditures in digital
capability, which span sourcing, distribution and technology centres of excellence. Our ability to provide ‘Click & Collect’ and home delivery,
combined with after-sales service both in-store or online, has enabled the Group to prepare for long-term success as the impacts of COVID-
19 subside. Unfortunately, COVID-19 impacted the Group, with lockdowns affecting a number of key markets in the first half of FY22.
Normalised net profit after tax
As with prior years, we have provided a reconciliation of statutory profit after tax to normalised net profit after tax below. As with prior
years, the main adjustment relates to costs in relation to executing the wage underpayment remediation program.
Statutory profit for the period after tax
- Wages underpayment and remediation costs(1)
-
-
Total of items not included in total segment NPAT
Normalised net profit after tax
Losses from associates accounted for using the equity method
Reversals of provisions previously excluded from normalised NPAT(1)
(1) Net of tax
2022
$m
241.2
2.7
0.4
(0.2)
2.9
244.1
2021
$m
301.0
6.2
0.2
(0.6)
5.8
306.8
When reviewing the financial results of the Group, the following factors require consideration:
(b)
Division results
FY22 comprised a 53-week trading period as compared to 52-weeks for FY21. An unaudited non-IFRS comparative (“Adjusted”) has
been provided, which adjusts FY22 down to 52 weeks and compares against the FY21 result. The intention is to provide the user of the
Supercheap Auto
rebel
BCF
Macpac
Unallocated/intersegment
Supercheap Auto
$m
Sales
Segment EBITDA
Segment EBIT
Segment normalised PBT
Normalised PBT margin
Sales
Segment EBITDA
2022
$m
1,339.8
1,212.0
829.7
176.8
(7.4)
3,550.9
2021
$m
1,308.8
1,197.0
797.7
153.4
(3.8)
3,453.1
2022
$m
301.5
264.6
133.4
40.5
(38.2)
701.8
2021
$m
315.7
285.9
167.1
35.7
(28.2)
776.2
Segment EBIT
2022
$m
190.6
155.6
68.9
20.0
(38.5)
396.6
2021
$m
204.2
180.0
105.2
18.1
(30.7)
476.8
Segment PBT
2022
$m
176.1
141.0
59.6
18.6
(45.7)
349.6
2021
$m
192.3
166.7
96.4
16.9
(36.5)
435.8
FY22
(53 weeks)
1,339.8
301.5
190.6
176.1
13.1%
FY21
(52 weeks)
1,308.8
315.7
204.2
192.3
14.7%
Change
Adjusted change(1)
2.4%
(4.5%)
(6.7%)
(8.4%)
(1.6%)
0.5%
(6.0%)
(8.7%)
(10.5%)
(1.6%)
(1) Adjusted change is an unaudited non-IFRS measure adjusting FY22 down to 52 weeks to provide a more meaningful comparative to FY21.
Director
Sally Pitkin AO
Anthony Heraghty
Annabelle Chaplain AM
Peter Everingham
Howard Mowlem
Reg Rowe
Judith Swales
on pages 60 to 63.
4.
Company Secretary
5.
5.1
-
-
-
-
-
-
Ms Rebecca Farrell is the Company Secretary of the Company. Ms Farrell was appointed to the position of Chief Legal Officer and Company
Secretary on 10 February 2020. Details of Ms Farrell's qualifications and experience are set out on page 29.
Operating and Financial Review
Overview of the Group
The Group is a for-profit entity and is primarily involved in the retail industry. Founded in 1972 as an automotive accessories mail order
business that 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 and outdoor equipment, fishing equipment and apparel; and
- Macpac: retailing of apparel, camping and outdoor equipment.
For further details about the Group’s strategy refer to pages 11 to 12.
5.2
Review of financial condition
Like-for-like sales growth compares our unaudited estimated 52-week FY22 results against FY21 for stores that were open for more
financial information with a more meaningful comparative;
than one year; and
COVID-19 lockdowns affected the first half of FY22.
(a)
Group results
FY22
FY21
Change
Adjusted
(53 weeks)
(52 weeks)
Revenue from continuing operations
Statutory profit for the period after tax
Segment earnings before interest and taxes (EBIT)
% to sales
% to sales
Normalised net profit after tax (NPAT)
Operating cash flow
Earnings per share (EPS) – basic (cents)
Dividends per share (cents)
$m
3,550.9
241.2
396.6
11.2%
349.6
9.8%
244.1
340.4
106.8
70.0
$m
3,453.1
301.0
476.8
13.8%
435.8
12.6%
306.8
600.0
133.4
88.0
%
2.8%
(19.9%)
(16.8%)
(20.4%)
(43.3%)
(19.9%)
(20.5%)
%(1)
1.0%
(21.1%)
(18.0%)
(21.6%)
(35.0%)
n/a
n/a
Segment normalised profit before taxes (PBT)
(19.8%)
(21.0%)
(1) Adjusted change is an unaudited non-IFRS measure adjusting FY22 down to 52 weeks to provide a more meaningful comparative to FY21.
The Group delivered a record sales result that was up 2.8 per cent on FY21 (or up 1.0 per cent adjusted), with digital sales growing 44 per
cent to a record $601 million and active club memberships growing by 14 per cent to a record 9.2 million members. The impact of COVID-19
resulted in lockdowns during the first half of FY22 that disrupted in-store revenues, however the second half sales grew strongly as foot
traffic recovered.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
35
35
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
DIRECTORS’ REPORT (continued)
5.
5.2
(b)
Operating and Financial Review (continued)
Review of financial condition (continued)
Division results (continued)
Supercheap Auto (continued)
Sales increased by 2.4 per cent to $1.3 billion (or up 0.5 per cent adjusted to 52 weeks), which was a record sales performance as the rollout
of our new store format (Gen-4) continued across our store network.
COVID-19 lockdowns adversely impacted the first half sales (down 7.7 per cent), however the second half rebounded strongly as lockdowns
eased, driven by the lubricant, auto maintenance and tool product categories.
Online sales grew 64 per cent to $175.3 million with ‘Click & Collect’ comprising 79 per cent of total online revenues.
Segment normalised PBT fell 8.4 per cent to $176.1 million, driven by higher supply chain costs, normalisation of promotion activity and full
year investment in strategic programs that were suspended in the first quarter of FY21.
Supercheap Auto opened three new stores and closed one store in FY22, bringing the total number of stores to 329 store at period end.
rebel
$m
Sales
Segment EBITDA
Segment EBIT
Segment normalised PBT
Normalised PBT margin
FY22
(53 weeks)
1,212.0
264.6
155.6
141.0
11.6%
FY21
(52 weeks)
1,197.0
285.9
180.0
166.7
13.9%
Change
1.3%
(7.5%)
(13.6%)
(15.4%)
(2.3%)
Adjusted change(1)
(0.6%)
(8.3%)
(14.4%)
(16.3%)
(2.2%)
(1) Adjusted change is an unaudited non-IFRS measure adjusting FY22 down to 52 weeks to provide a more meaningful comparative to FY21.
Sales increased by 1.3 per cent to $1.2 billion (or down 0.6 per cent adjusted to 52 weeks). Increased contributions were recorded by our
new rCX format stores whilst strong sales growth was achieved in the basketball and licenced product categories.
COVID-19 lockdowns adversely affected first half foot traffic within stores located in central business districts and larger shopping malls.
Furthermore, delays in inbound shipping reduced the availability of key product lines. First half sales were down 5.9 per cent as a result. As
restrictions eased, foot traffic recovered supporting like-for-like sales growth of 0.5 per cent in the second half of the year. Inventory
deliveries from major trade partners were disrupted during the year, only beginning to recover in the fourth quarter of the year.
Online sales grew 39 per cent to $267.7 million with ‘Click & Collect’ comprising 41 per cent of total online revenues.
Segment normalised PBT was down 15.4 per cent to $141.0 million driven by higher supply chain costs, increased promotional activity,
ongoing stock availability issues and full year investment in strategic programs that were suspended in the first quarter of FY21.
Rebel opened three stores and closed one store in FY22, bringing the total number of stores to 155 at period end.
BCF
$m
Sales
Segment EBITDA
Segment EBIT
Segment normalised PBT
Normalised PBT margin
FY22
(53 weeks)
FY21
(52 weeks)
829.7
133.4
68.9
59.6
7.2%
797.7
167.1
105.2
96.4
12.1%
Change
4.0%
(20.2%)
(34.5%)
(38.2%)
(4.9%)
Adjusted change(1)
2.7%
(20.1%)
(34.1%)
(37.5%)
(4.7%)
(1) Adjusted change is an unaudited non-IFRS measure adjusting FY22 down to 52 weeks to provide a more meaningful comparative to FY21.
BCF delivered a record sales result of $829.7 million increasing 4.0 per cent in FY22 (or up 2.7 per cent adjusted to 52 weeks) driven by like-
for-like growth and contribution from five new stores.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
36
36
DIRECTORS’ REPORT (continued)
Operating and Financial Review (continued)
Review of financial condition (continued)
Division results (continued)
Supercheap Auto (continued)
DIRECTORS’ REPORT (continued)
5.
5.2
(b)
Operating and Financial Review (continued)
Review of financial condition (continued)
Division results (continued)
BCF (continued)
Sales increased by 2.4 per cent to $1.3 billion (or up 0.5 per cent adjusted to 52 weeks), which was a record sales performance as the rollout
of our new store format (Gen-4) continued across our store network.
COVID-19 lockdowns adversely impacted the first half sales (down 7.7 per cent), however the second half rebounded strongly as lockdowns
eased, driven by the lubricant, auto maintenance and tool product categories.
Online sales grew 64 per cent to $175.3 million with ‘Click & Collect’ comprising 79 per cent of total online revenues.
Like-for-like sales in the first half were down 3.7 per cent as BCF cycled a record prior comparative period, however sales grew strongly in
the second half, increasing 6.7 per cent, driven by strong trading over the summer and Easter holiday periods with boating and camping
categories being particularly strong.
Online sales grew 36 per cent to $116.7m with ‘Click & Collect’ comprising 66 per cent of total online revenues.
Segment normalised PBT was down 38.2 per cent to $59.6m driven by increased promotional sales activity, higher supply chain costs and full
year investment in strategic programs that were suspended in the first quarter of FY21.
Segment normalised PBT fell 8.4 per cent to $176.1 million, driven by higher supply chain costs, normalisation of promotion activity and full
year investment in strategic programs that were suspended in the first quarter of FY21.
BCF opened five new stores in FY22 to bring the total store network to 147 stores at period end.
Macpac
$m
Sales
Segment EBITDA
Segment EBIT
Segment normalised PBT
Normalised PBT margin
FY22
(53 weeks)
FY21
(52 weeks)
Change
Adjusted change(1)
176.8
40.5
20.0
18.6
10.5%
153.4
35.7
18.1
16.9
11.0%
15.3%
13.4%
10.5%
10.1%
(0.5%)
11.4%
7.8%
(0.1%)
(1.9%)
(1.3%)
(1) Adjusted change is an unaudited non-IFRS measure adjusting FY22 down to 52 weeks to provide a more meaningful comparative to FY21.
Sales increased 15.3 per cent to $176.8 million (or up 11.4 per cent adjusted to 52 weeks) driven by record winter sales in 2022.
Like-for-like sales were up 4.4 per cent overall and 8.5 per cent in the second half driven by a 12.4 per cent increase in Australian sales where
colder and wetter than usual weather patterns saw strong growth in rainwear and insulation apparel. New Zealand operations saw a
reduction in like-for-like sales of 6.5 per cent due to COVID-19 lockdowns, reduced activity in the tourism and travel sectors and a more
subdued macro-economic environment. Macpac product that is wholesaled to rebel and BCF grew by 95 per cent in FY22, contributing to
stronger brand awareness in Australia and the stronger sales result.
Online sales grew 35 per cent to $40.8 million with ‘Click & Collect’ comprising 17 per cent of total online sales.
Segment normalised PBT was up 10.1 per cent to $18.6m (down 1.9 per cent adjusted to 52 weeks). Trading margins were lower in the first
half as a result of the lower sales intensity. Margins improved in the second half due to a lift in sales intensity and higher mix of Australian
sales which operate at a higher margin contribution.
Macpac opened ten new stores during the year with one closure, bringing the total store network to 85 at period end.
Rebel opened three stores and closed one store in FY22, bringing the total number of stores to 155 at period end.
Group costs
The Group continued to incur significant expenses in relation to its ongoing strategic programs relating to customer loyalty, digital experience,
workforce planning, warehouse management, endless-aisle and gift card platforms. These important initiatives are intended to provide long-
term growth capability to the Group. FY22 Unallocated Group costs included $5.9 million relating to the write down of our Autoguru
investment (including loans) and expenditures to develop the customer loyalty and personalisation platforms. The prior year included a $5.4
million one-off software asset write-down, resulting in a net increase of $7.8 million for the year.
35
5.
5.2
(b)
rebel
$m
Sales
BCF
$m
Sales
Supercheap Auto opened three new stores and closed one store in FY22, bringing the total number of stores to 329 store at period end.
FY22
(53 weeks)
1,212.0
264.6
155.6
141.0
11.6%
FY21
(52 weeks)
1,197.0
285.9
180.0
166.7
13.9%
Change
1.3%
(7.5%)
(13.6%)
(15.4%)
(2.3%)
Adjusted change(1)
(0.6%)
(8.3%)
(14.4%)
(16.3%)
(2.2%)
Segment EBITDA
Segment EBIT
Segment normalised PBT
Normalised PBT margin
(1) Adjusted change is an unaudited non-IFRS measure adjusting FY22 down to 52 weeks to provide a more meaningful comparative to FY21.
Sales increased by 1.3 per cent to $1.2 billion (or down 0.6 per cent adjusted to 52 weeks). Increased contributions were recorded by our
new rCX format stores whilst strong sales growth was achieved in the basketball and licenced product categories.
COVID-19 lockdowns adversely affected first half foot traffic within stores located in central business districts and larger shopping malls.
Furthermore, delays in inbound shipping reduced the availability of key product lines. First half sales were down 5.9 per cent as a result. As
restrictions eased, foot traffic recovered supporting like-for-like sales growth of 0.5 per cent in the second half of the year. Inventory
deliveries from major trade partners were disrupted during the year, only beginning to recover in the fourth quarter of the year.
Online sales grew 39 per cent to $267.7 million with ‘Click & Collect’ comprising 41 per cent of total online revenues.
Segment normalised PBT was down 15.4 per cent to $141.0 million driven by higher supply chain costs, increased promotional activity,
ongoing stock availability issues and full year investment in strategic programs that were suspended in the first quarter of FY21.
FY22
(53 weeks)
FY21
(52 weeks)
Adjusted change(1)
Segment EBITDA
Segment EBIT
Segment normalised PBT
Normalised PBT margin
829.7
133.4
68.9
59.6
7.2%
797.7
167.1
105.2
96.4
12.1%
Change
4.0%
(20.2%)
(34.5%)
(38.2%)
(4.9%)
2.7%
(20.1%)
(34.1%)
(37.5%)
(4.7%)
(1) Adjusted change is an unaudited non-IFRS measure adjusting FY22 down to 52 weeks to provide a more meaningful comparative to FY21.
BCF delivered a record sales result of $829.7 million increasing 4.0 per cent in FY22 (or up 2.7 per cent adjusted to 52 weeks) driven by like-
for-like growth and contribution from five new stores.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
37
37
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
DIRECTORS’ REPORT (continued)
5.
5.2
(c)
Operating and Financial Review (continued)
Review of financial condition (continued)
Financial position and cash flow
BALANCE SHEET
-
-
-
-
Total working capital
Trade and other receivables
Inventories
Trade and other payables
Current tax (liabilities)
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 (decrease) in cash
Cash at the beginning of the period
Effects of exchange rates on cash
Cash at the end of the period
Working capital
2022
$m
53.6
799.6
(451.4)
(19.8)
382.0
13.4
-
(1,010.7)
(997.3)
235.7
923.7
866.0
-
11.9
(138.3)
5.3
1,289.0
340.4
(124.7)
(444.8)
(229.1)
242.3
0.2
13.4
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
Working capital increased by $280.1 million driven predominantly by higher inventory investment and lower trade payables. Trade receivable
increases and lower tax payable liabilities also contributed. The key drivers of the increased investment include:
-
-
-
Supply chain disruptions were again evident throughout the year, whilst the Group saw strong sales demand with minimal levels of
bank debt. The Group therefore determined that it was appropriate to increase its inventory holdings with a view to minimising
disruptions and out-of-stock events. Inventory weeks cover has increased by 3.9 weeks since FY20 to mitigate supply chain disruption
risks.
Trade payables were lower at balance date because of the longer order lead times for inventory, timing of inventory arrivals and the
lag effect of associated payments. Furthermore, the 53-week trading period included an additional payment cycle, which also lowered
trade payables.
Trade and other receivables increased due to timing, whilst tax liabilities reduced as a result of a higher instalment rate being applied
to current year profits following the FY21 record profit result and a $67 million tax payment related to the prior year.
The Group was in a net cash position of $13.4 million (cash less overdraft) compared to $242.3 million in the prior year. The lower cash was
driven by the increases in working capital discussed above, which in turn has driven a significant reduction in operating cash flow to $340.4
million (down $259.6 million).
Cash outflows from investing increased $40.2 million to $124.7 million, reflecting ongoing capital expenditures on new stores and strategic
programs related to building omni-retail capabilities.
Cash outflows from financing fell by $113.4 million to $444.8 million due to a combination of factors. Dividend, interest and lease interest
payments were all higher (up $95.2 million) but were offset by the prior capital raise and debt payment initiative (down $208.6 million).
DIRECTORS’ REPORT (continued)
Operating and Financial Review (continued)
Review of financial condition (continued)
Financial position and cash flow
37
5.
5.2
(c)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
BALANCE SHEET
Trade and other receivables
Inventories
Trade and other payables
Current tax (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 (decrease) in cash
Cash at the beginning of the period
Effects of exchange rates on cash
Cash at the end of the period
Working capital
2022
$m
53.6
799.6
(451.4)
(19.8)
382.0
13.4
-
(1,010.7)
(997.3)
235.7
923.7
866.0
-
11.9
(138.3)
5.3
1,289.0
340.4
(124.7)
(444.8)
(229.1)
242.3
0.2
13.4
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
4.7
(123.6)
1,226.5
600.0
(84.5)
(558.2)
(42.7)
285.1
(0.1)
242.3
Working capital increased by $280.1 million driven predominantly by higher inventory investment and lower trade payables. Trade receivable
increases and lower tax payable liabilities also contributed. The key drivers of the increased investment include:
-
Supply chain disruptions were again evident throughout the year, whilst the Group saw strong sales demand with minimal levels of
bank debt. The Group therefore determined that it was appropriate to increase its inventory holdings with a view to minimising
disruptions and out-of-stock events. Inventory weeks cover has increased by 3.9 weeks since FY20 to mitigate supply chain disruption
risks.
-
-
trade payables.
Trade payables were lower at balance date because of the longer order lead times for inventory, timing of inventory arrivals and the
lag effect of associated payments. Furthermore, the 53-week trading period included an additional payment cycle, which also lowered
Trade and other receivables increased due to timing, whilst tax liabilities reduced as a result of a higher instalment rate being applied
to current year profits following the FY21 record profit result and a $67 million tax payment related to the prior year.
The Group was in a net cash position of $13.4 million (cash less overdraft) compared to $242.3 million in the prior year. The lower cash was
driven by the increases in working capital discussed above, which in turn has driven a significant reduction in operating cash flow to $340.4
million (down $259.6 million).
Cash outflows from investing increased $40.2 million to $124.7 million, reflecting ongoing capital expenditures on new stores and strategic
programs related to building omni-retail capabilities.
Cash outflows from financing fell by $113.4 million to $444.8 million due to a combination of factors. Dividend, interest and lease interest
payments were all higher (up $95.2 million) but were offset by the prior capital raise and debt payment initiative (down $208.6 million).
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
38
38
DIRECTORS’ REPORT (continued)
5.
5.2
(d)
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. Divisional results fell against the prior year for the reasons outlined above.
For the 53 week period ended 2 July 2022
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
1,339.8
-
-
1,339.8
219.9
(40.3)
179.6
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
1,212.0
-
0.1
1,212.1
177.6
(35.2)
142.4
829.7
-
-
829.7
81.6
(19.8)
61.8
169.4
7.4
-
176.8
22.4
(3.7)
18.7
3,550.9
7.4
0.1
3,558.4
501.5
(99.0)
402.5
-
(7.4)
-
(7.4)
(37.2)
(0.3)
(37.5)
3,550.9
-
0.1
3,551.0
464.3
(99.3)
365.0
(8.1)
356.9
(107.7)
249.2
(5.1)
(2.9)
241.2
241.2
For the 52 week 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
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
39
39
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
DIRECTORS’ REPORT (continued)
5.
5.2
(e)
Operating and Financial Review (continued)
Review of financial condition (continued)
Material business risks
The Group operates in a dynamic and rapidly evolving environment across three geographies (Australia, New Zealand and China). Material
risks that could adversely affect our operations, performance and delivery of our strategy are outlined in this section. Further financial risks
are detailed in Note 22 – Financial risk management in the notes to the consolidated financial statements.
Super Retail Group is evolving in its approach to risk management to meet the demands of the operating environment and the expectations
of our customers, the communities we operate in, our team members and investors.
The Group actively manages a range of financial and non-financial business risks and uncertainties which can potentially have a material
impact on the Group and its ability to achieve its stated objectives. While the Group’s approach to risk management seeks to identify and
manage material risks and emerging risks, additional risks not currently known or detailed below may also adversely affect future
performance.
Risk description
Risk management
People
Health & Safety - Exposure to hazards at a level that causes harm (arising from the Group’s operations)
With operations in three countries and more than 700 stores, there
are certain hazards that have the potential to cause significant
harm.
We are committed to the physical and psychological wellbeing,
health and safety of our team members, customers, suppliers,
visitors, and contractors across all our operations.
Investing in the ongoing maturity of the Group’s Health &
Safety program.
Focus on hazard elimination and risk reduction, supported by
a robust health and safety management system.
Implementing our planned preventative site and equipment
maintenance program.
Enhancing compliance and leadership training.
-
-
-
-
Employment law compliance - Serious or systemic breach of employment law
A variety of employment instruments across Australia, New
Zealand and China create complexities particularly with respect to
the payment of employee entitlements, where errors could occur.
Any breach has the potential to cause financial detriment to our
team members, reputational damage to the Group and to erode
the trust and confidence of our team, customers, shareholders and
regulators. We may also be liable for fines or other penalties.
-
Using information technology to reduce the chance of error,
including smart rostering.
- Maturing the Group’s Employee Relations Strategy.
-
Leveraging an Industrial Relations Framework including a
wage review schedule, supported by training on correct
rostering practices.
Conducting external wage reviews as part of our ongoing
controls assurance program.
Structural consolidation of payroll functions within Human
Resources.
-
-
Conduct - Inappropriate, unethical or unlawful conduct by the Group’s Officers or Team Members
With more than 14,000 team members, it is possible that not all
team members will conduct themselves in a manner consistent
with the Group’s Code of Conduct or Values.
Officer or Team Member wellbeing may also be impacted by
disruption arising from COVID-19, severe weather events,
geopolitical conflicts and/or cost of living pressures, which may
influence conduct. As a result, it is possible that other team
members or customers could be harmed, a significant issue or
event could cause significant damage to one or all of the Group’s
brands, or that the Group incurs a financial loss.
-
- Maintaining a strong culture that engenders doing the right
thing, guided by our recently refreshed Group Values and
Code of Conduct.
- Maturing our management of conduct risk.
-
Providing mechanisms for reporting wrongdoing and prompt
action on misconduct, including a Whistleblower Policy,
dedicated reporting line and Anti-Corrupt Practices Policy.
Investing in online fraud protection tools and resources across
our brands.
Establishing relevant forums to oversee and actively engage
on strategies to create a harassment free workplace.
Improving analytics to assist in the early identification of
conduct risk and issues.
-
-
Strategy
Competition and new entrants - Large scale shift in competitive landscape
The risk of rapidly increasing competition (both online and in
offline markets), or a large-scale shift in the Group’s brands’
competitive landscape.
Increased competition can arise as a result of new entrants to the
market, increased investment by existing competitors, aggressive
competitor pricing and marketing strategies.
Accelerated movement towards Direct-to-Consumer sales channels
by trade partners, has the potential to alter competitive advantage
and expose the Group to a loss of market share across our brands.
-
-
Investing heavily in growing our active club loyalty
membership base, personalising our services and retaining
our loyal customers through new loyalty platforms and
structured customer relationship management activities.
Growing our four core brands with an improved customer
experience instore and online.
Improving brand awareness.
Optimising our store network.
Regularly monitoring key competitor market share.
-
-
-
- Working closely with Trade partners to maximise
opportunities.
39
5.
5.2
(e)
DIRECTORS’ REPORT (continued)
Operating and Financial Review (continued)
Review of financial condition (continued)
Material business risks
The Group operates in a dynamic and rapidly evolving environment across three geographies (Australia, New Zealand and China). Material
risks that could adversely affect our operations, performance and delivery of our strategy are outlined in this section. Further financial risks
are detailed in Note 22 – Financial risk management in the notes to the consolidated financial statements.
Super Retail Group is evolving in its approach to risk management to meet the demands of the operating environment and the expectations
of our customers, the communities we operate in, our team members and investors.
The Group actively manages a range of financial and non-financial business risks and uncertainties which can potentially have a material
impact on the Group and its ability to achieve its stated objectives. While the Group’s approach to risk management seeks to identify and
manage material risks and emerging risks, additional risks not currently known or detailed below may also adversely affect future
performance.
Risk description
Risk management
People
Health & Safety - Exposure to hazards at a level that causes harm (arising from the Group’s operations)
With operations in three countries and more than 700 stores, there
Investing in the ongoing maturity of the Group’s Health &
are certain hazards that have the potential to cause significant
Safety program.
harm.
Focus on hazard elimination and risk reduction, supported by
We are committed to the physical and psychological wellbeing,
a robust health and safety management system.
health and safety of our team members, customers, suppliers,
Implementing our planned preventative site and equipment
visitors, and contractors across all our operations.
maintenance program.
Enhancing compliance and leadership training.
Employment law compliance - Serious or systemic breach of employment law
A variety of employment instruments across Australia, New
Using information technology to reduce the chance of error,
Zealand and China create complexities particularly with respect to
including smart rostering.
the payment of employee entitlements, where errors could occur.
- Maturing the Group’s Employee Relations Strategy.
Any breach has the potential to cause financial detriment to our
Leveraging an Industrial Relations Framework including a
team members, reputational damage to the Group and to erode
wage review schedule, supported by training on correct
the trust and confidence of our team, customers, shareholders and
rostering practices.
regulators. We may also be liable for fines or other penalties.
Conducting external wage reviews as part of our ongoing
controls assurance program.
Structural consolidation of payroll functions within Human
Resources.
Conduct - Inappropriate, unethical or unlawful conduct by the Group’s Officers or Team Members
With more than 14,000 team members, it is possible that not all
- Maintaining a strong culture that engenders doing the right
team members will conduct themselves in a manner consistent
thing, guided by our recently refreshed Group Values and
with the Group’s Code of Conduct or Values.
Code of Conduct.
Officer or Team Member wellbeing may also be impacted by
disruption arising from COVID-19, severe weather events,
- Maturing our management of conduct risk.
Providing mechanisms for reporting wrongdoing and prompt
geopolitical conflicts and/or cost of living pressures, which may
action on misconduct, including a Whistleblower Policy,
influence conduct. As a result, it is possible that other team
members or customers could be harmed, a significant issue or
event could cause significant damage to one or all of the Group’s
brands, or that the Group incurs a financial loss.
dedicated reporting line and Anti-Corrupt Practices Policy.
Investing in online fraud protection tools and resources across
our brands.
Establishing relevant forums to oversee and actively engage
on strategies to create a harassment free workplace.
Improving analytics to assist in the early identification of
conduct risk and issues.
Competition and new entrants - Large scale shift in competitive landscape
Strategy
The risk of rapidly increasing competition (both online and in
-
Investing heavily in growing our active club loyalty
offline markets), or a large-scale shift in the Group’s brands’
membership base, personalising our services and retaining
competitive landscape.
Increased competition can arise as a result of new entrants to the
market, increased investment by existing competitors, aggressive
competitor pricing and marketing strategies.
Accelerated movement towards Direct-to-Consumer sales channels
by trade partners, has the potential to alter competitive advantage
our loyal customers through new loyalty platforms and
structured customer relationship management activities.
Growing our four core brands with an improved customer
experience instore and online.
Improving brand awareness.
Optimising our store network.
and expose the Group to a loss of market share across our brands.
Regularly monitoring key competitor market share.
- Working closely with Trade partners to maximise
opportunities.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
40
40
DIRECTORS’ REPORT (continued)
5.
5.2
(e)
Operating and Financial Review (continued)
Review of financial condition (continued)
Material business risks (continued)
Risk description
Strategy (continued)
Risk management
-
Strategy execution - Critical shortfall in capability and/or capacity to execute on the Group’s strategy
Execution on the Group’s strategic agenda is highly dependent on
developing capabilities for the future of retail, attracting and
retaining talent, minimising technical debt and optimising the use
of technology and our data assets.
Retailers are faced with additional challenges to attract and retain
talent. We need to compete for talent with other sectors that have
experienced a contraction in labour supply, such as hospitality, and
contend with damage to ‘retail as a career’ post-COVID-19.
Inability to deliver the expected benefits and outcomes from the
Group’s strategy could impact our Brands’ ability to compete in a
dynamic and evolving market.
-
-
-
-
Investing in portfolio management capability and program
governance.
Investing in talent attraction and retention programs.
Embedding our updated vision, mission and values.
Leveraging a new Digital and Technology operating model to
maximise the use of technology and data.
- Maintaining a clear separation of duties between strategy
development, strategy execution and project/portfolio
execution and assurance.
Delivering our people strategy while keeping our tactical
initiatives responsive to the external environment.
Climate change transition - Transition to a low carbon economy
As the world transitions to a low carbon economy, legal,
technological, market, brand and reputational issues could arise
from emissions reduction activities (or a failure to take such
activities) and expectations.
Investors expect companies to deliver their climate change,
environmental, social and sustainability commitments.
Consumer concerns around greenwashing and transparency are
growing as are market norms on sustainability.
The transition is likely to bring legislative changes, technological
advancements, shifts in consumer preferences, expectations and
discretionary income.
-
-
Investing in the capabilities and resourcing required to deliver
our climate change transition goals.
Delivering on our refreshed 2030 Sustainability Framework,
which includes emissions reduction goals, recycling and waste
reduction programs, as well as support for environmental
protection and restoration programs.
Benchmarking our practices against industry.
Keeping abreast of the market norms on sustainability,
investor expectations and evolving consumer expectations.
- Monitoring forthcoming regulatory and legislative changes.
-
-
Financial
Economic disruption - Unexpected changes in macro-economic conditions
Geopolitical conflicts, COVID-19 pandemic impacts, rising
commodity prices, rising interest rates, wage growth pressures and
global inflation levels have added further volatility to an already
complex macro-economic environment.
There is a risk of further unexpected changes in the macro-
economic environment, including economic conditions in which
our major suppliers operate, the tightening Australian and New
Zealand labour markets, freight price increases and global shipping
volatility, resulting in volatility to the Group’s trading and non-
trading environment.
-
- Maintaining a strong financial position backed by a well-
executed omni-retail strategy and effective operating model.
Actively monitoring external indicators, macro-economic
conditions and understanding potential impact through
scenario modelling.
- Managing financial risks within a disciplined policy framework.
-
Having in place strategic planning processes, including
adjusting or reprioritising of strategic initiatives, if necessary.
Controlling inventory investment through robust inventory
management processes.
-
Information and technology
Cyber security, data management and privacy - Unauthorised access to the Group’s systems
The privacy, integrity, reliability and security of customer and team
member data and information is of utmost importance to the
Group and is critical to day-to-day operations and strategic
direction.
It is critical that we keep our commercially sensitive information
safe and that we protect our customers through digital channels
and e-commerce.
Any unauthorised access can erode customer, team member, trade
partner and shareholder trust in the Group and can have adverse
regulatory and financial impacts.
The interconnectedness and complexity of our information and
technology, along with our heavy reliance on it, means we need to
remain diligent to the increasing threat of cyber-attack.
-
-
- Maintaining a comprehensive cyber security approach
including ongoing training and awareness.
Actively monitoring cyber threats.
-
- Maturing our cyber security practices, policies, standards and
controls.
Investing in cyber processes and tools.
Undertaking external IT risk and cyber maturity assessments.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
41
41
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
DIRECTORS’ REPORT (continued)
5.
5.2
(e)
Operating and Financial Review (continued)
Review of financial condition (continued)
Material business risks (continued)
Risk description
Operational
Risk management
Responsible sourcing - Unethical or dangerous working conditions in the Group’s supply chain, including modern slavery
Forced labour, debt bondage, deceptive recruitment and child
labour have been associated with geographies, sectors and
industries in which we operate.
There is the potential for serious harm to people who work in our
supply chain. Any failure to act as a responsible business through
how we source our products can erode customer, team member,
trade partner and shareholder trust in the Group and can have
adverse regulatory and financial impacts.
- Maintaining new supplier due diligence processes.
-
- Maintaining a Responsible Sourcing Program, Policy and Code
which includes monitoring, verification, audit and remediation
processes.
Reviewing in detail factory audit results provided by third
parties and actively managing corrective action plans.
- Monitoring service providers’ due diligence processes,
including self-assessment declarations, certifications,
examinations and interviews.
Requiring relevant team members to complete responsible
sourcing training programs.
Providing in our contracts, where relevant, that our trade
partners must comply with our Responsible Sourcing Policy.
-
-
Product safety - A product sold by the Group’s brands is unsafe and/or non-compliant with required standards
We are committed to providing safe products for our customers
and complying with requisite standards. Product safety is a critical
part of our trading operations. If compromised, it can result in
serious illness or injury, detrimental regulatory impacts and
significant reputational damage.
-
- Maintaining a comprehensive and robust product compliance
program and management systems including training, testing
and review.
Designing and sourcing quality products that minimise the
likelihood of products being unsafe or non-compliant.
Refreshing our product safety framework.
Actioning and managing product recall processes.
Standardising new line processes including risk-based product
testing.
Conducting compliance checks for high-risk products.
Seeking trade partner guarantees.
-
-
-
-
-
‑
-
19 may lead to further government
Focusing on hazard elimination and risk reduction, supported
by public health advice.
COVID-19 - The pandemic impacts team members, retail operations, the Group’s supply chain and/or financial performance
Pandemic events can have a significant impact on business
operations, health and wellbeing and social disruption, leading to
adverse impacts on the Group. Further variants and the increase in
the spread of COVID
restrictions and border closures and may also adversely impact the
Group’s suppliers, partners and broader supply chain, as well as the
Group’s customers, including customer preferences and online
purchasing trends.
Such events can cause significant economic, operational and social
disruption which can adversely affect the operation and financial
position of our businesses.
The longer-term impact of COVID-19 on consumer behaviour,
suppliers, team members and the Group is not fully known and, in
some cases, could be materially adverse to the Group’s financial
and/or operational performance.
- 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.
Implementing supply chain optimisation initiatives to
maintain agility, resilience and prioritisation processes.
- Maintaining inventory buffers to increase tolerance to
- Maintaining and updating COVID-19 Safe Plans.
- Managing the Group’s planning, response and recovery from
operational COVID-19 impacts through an Incident
Management Team.
disruption.
-
Demand volatility - Demand volatility exceeds the Group’s adaptive capacity
Consumer demand can shift rapidly, and the Group needs to cater
to the change to optimise earnings. Seasonality, rising inflation,
increasing commodity prices, customer preferences and online
purchasing trends, COVID-19 impacts such as the easing of
restrictions, natural disasters, and higher interest rates may impact
consumer demand for discretionary products.
Inability to respond to rapid shifts in consumer demand in the
current economic conditions may result in decreased market share
and earnings and increased liquidity risk.
-
-
-
Reducing the impact of seasonality in product range and
expanding our offering to cater for domestic recreation.
Implementing supply chain optimisation initiatives to
maintain agility, including a strategic planning cycle that
includes review of category performance and participation
rates.
Focusing on inventory planning and management processes
across the network.
- Maintaining agility in pricing, promotion and stock planning
and investment.
- Maintaining a strong financial position including liquidity
position.
Diversifying our private label sourcing options.
-
- Monitoring for shifts in consumer demand against regular
forecasted expectations.
41
5.
5.2
(e)
DIRECTORS’ REPORT (continued)
Operating and Financial Review (continued)
Review of financial condition (continued)
Material business risks (continued)
Risk description
Responsible sourcing - Unethical or dangerous working conditions in the Group’s supply chain, including modern slavery
Forced labour, debt bondage, deceptive recruitment and child
- Maintaining a Responsible Sourcing Program, Policy and Code
labour have been associated with geographies, sectors and
which includes monitoring, verification, audit and remediation
industries in which we operate.
processes.
Operational
Risk management
There is the potential for serious harm to people who work in our
supply chain. Any failure to act as a responsible business through
how we source our products can erode customer, team member,
trade partner and shareholder trust in the Group and can have
adverse regulatory and financial impacts.
- Maintaining new supplier due diligence processes.
-
Reviewing in detail factory audit results provided by third
parties and actively managing corrective action plans.
- Monitoring service providers’ due diligence processes,
including self-assessment declarations, certifications,
examinations and interviews.
Requiring relevant team members to complete responsible
sourcing training programs.
Providing in our contracts, where relevant, that our trade
partners must comply with our Responsible Sourcing Policy.
Product safety - A product sold by the Group’s brands is unsafe and/or non-compliant with required standards
We are committed to providing safe products for our customers
- Maintaining a comprehensive and robust product compliance
and complying with requisite standards. Product safety is a critical
program and management systems including training, testing
part of our trading operations. If compromised, it can result in
and review.
serious illness or injury, detrimental regulatory impacts and
significant reputational damage.
Designing and sourcing quality products that minimise the
likelihood of products being unsafe or non-compliant.
Refreshing our product safety framework.
Actioning and managing product recall processes.
Standardising new line processes including risk-based product
testing.
Conducting compliance checks for high-risk products.
Seeking trade partner guarantees.
COVID-19 - The pandemic impacts team members, retail operations, the Group’s supply chain and/or financial performance
Pandemic events can have a significant impact on business
Focusing on hazard elimination and risk reduction, supported
operations, health and wellbeing and social disruption, leading to
by public health advice.
adverse impacts on the Group. Further variants and the increase in
- Maintaining and updating COVID-19 Safe Plans.
the spread of COVID
19 may lead to further government
restrictions and border closures and may also adversely impact the
Group’s suppliers, partners and broader supply chain, as well as the
‑
Group’s customers, including customer preferences and online
purchasing trends.
Such events can cause significant economic, operational and social
disruption which can adversely affect the operation and financial
position of our businesses.
- Managing the Group’s planning, response and recovery from
operational COVID-19 impacts through an Incident
Management Team.
- 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.
-
Implementing supply chain optimisation initiatives to
The longer-term impact of COVID-19 on consumer behaviour,
maintain agility, resilience and prioritisation processes.
suppliers, team members and the Group is not fully known and, in
some cases, could be materially adverse to the Group’s financial
disruption.
- Maintaining inventory buffers to increase tolerance to
and/or operational performance.
Demand volatility - Demand volatility exceeds the Group’s adaptive capacity
Consumer demand can shift rapidly, and the Group needs to cater
Reducing the impact of seasonality in product range and
to the change to optimise earnings. Seasonality, rising inflation,
expanding our offering to cater for domestic recreation.
increasing commodity prices, customer preferences and online
Implementing supply chain optimisation initiatives to
purchasing trends, COVID-19 impacts such as the easing of
maintain agility, including a strategic planning cycle that
restrictions, natural disasters, and higher interest rates may impact
includes review of category performance and participation
consumer demand for discretionary products.
rates.
Inability to respond to rapid shifts in consumer demand in the
current economic conditions may result in decreased market share
and earnings and increased liquidity risk.
-
Focusing on inventory planning and management processes
- Maintaining agility in pricing, promotion and stock planning
across the network.
and investment.
position.
- Maintaining a strong financial position including liquidity
-
Diversifying our private label sourcing options.
- Monitoring for shifts in consumer demand against regular
forecasted expectations.
-
-
-
-
-
-
-
-
-
-
-
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
42
42
DIRECTORS’ REPORT (continued)
5.
5.2
(e)
Operating and Financial Review (continued)
Review of financial condition (continued)
Material business risks (continued)
Risk description
Operational (continued)
Risk management
Supply chain - Protracted supply chain disruption
Global and domestic supply chain disruption is a highly dynamic
risk with complex drivers, many outside our control or influence.
Regular supply shocks can impact the ability to maintain service
and product levels.
Severe weather events and damage to supply lines.
Shipping volatility including pallet and container shortages, port
capacity issues, further lockdowns or economic impacts in China
that impact supply chain manufacturing, production, transport,
port and shipping, geopolitical tensions and conflicts, COVID-19
impacts including potential new variants, labour shortages and
transport reliability issues each have potential to contribute to
extended lead times and/or the unavailability of products to meet
customer demand, which may impact customer loyalty and reduce
revenue.
Climate change adaptation - Physical impacts of climate change
The climate is changing, affecting natural weather variability and
leading to increased frequency and/or severity of weather events,
such as extreme heatwaves, drought and intense rainfall causing
flooding.
The health and safety of our team and customers may be
impacted.
Our trade may be disrupted and assets damaged, the cost of
industrial special risk insurance and the cost and availability of raw
materials could be impacted, product demand affected and
customer purchasing power reduced.
Business disruption - Trade is severely restricted or disrupted for an extended period
While the easing and lifting of government restrictions in
connection with COVID-19 has allowed normal trading to resume,
operational challenges may exist in connection with unexpected
events, severe weather events and other natural hazards, further
COVID-19 impacts including potential new variants and the ongoing
threat of ransomware and cyber-attack. Such events can cause
sudden or cessation of day-to-day operations.
-
-
-
-
Building resilience and agility in our supply chain.
-
- Modernising the technology supporting our supply chain,
including upgrading our Warehouse Management System.
- Maintaining inventory buffers to increase tolerance to
- Maintaining freight and trade alliance membership and
disruption.
strategic partnerships.
Having in place emergency response and business continuity
management plans, which support business resilience.
- Maintaining a robust health and safety management system.
-
Implementing our planned site inspection and preventative
maintenance program.
Identifying sites susceptible to increased risk of flooding in
store network optimisation.
Complying with building codes and requirements.
Forecasting and monitoring changes in demand for key
categories.
-
-
-
- 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.
Evolving cyber security controls.
Adjusting COVID-19 Safe Plans to the evolving risk.
Building robust planning in the supply chain in concert with
trade partners.
Having in place a property management and site maintenance
services program.
Investing in upgrading technology systems.
-
-
-
-
Legal & regulatory compliance and change - Material breach of law or regulation
With operations in three jurisdictions, the Group is subject to a
wide range of legal and regulatory requirements relating to
employment, product quality and safety, health and safety, privacy
and data, competition and consumer protection, anti-bribery and
corruption and anti-money laundering amongst others.
Any material breach of law or regulation would impact our
standing with our team members, shareholders, customers and
trade partners, as well as regulators. It may also attract fines or
other penalties.
To maintain our “licence to operate” we must also remain
compliant with changing and existing law and regulations requiring
ongoing monitoring by the business.
Adverse changes to existing law or regulation or regulator
investigation or intervention may change or restrict the Group’s
ability to operate the way it does today, or to fully realise its
strategy.
-
Having in place health and safety policies, procedures,
engineering controls, training, PPE and maintenance
requirements.
Promoting accountability and investing in corporate
governance and legal capability.
- Maturing and investing in compliance risk management
practices.
- Maintaining comprehensive and tailored training and
awareness programs, including team member compliance and
code of conduct training programs that focus on key
legislative and/or regulatory requirements.
- Maintaining currency of employment agreements and
disciplinary processes.
Updating relevant policies and procedures, including in
relation to disclosure, discipline and whistleblowers.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
43
43
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
DIRECTORS’ REPORT (continued)
5.
5.3
Operating and Financial Review (continued)
Climate
The Group is committed to its Emissions Reduction Strategy including our new target of zero carbon emissions for Scope 1 and Scope 2 by
2030 for all wholly-owned and operated assets. During FY22, we have worked with our energy service provider to review the pathway to
achieving this target with a particular focus on energy efficiency and green energy procurement. In addition, we continue to expand our
recycling and waste reduction programs, and to support our environmental protection and restoration programs.
Super Retail Group recognises the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures
(TCFD) and the associated framework. We are working to incrementally improve alignment with the TCFD recommendations whilst being
prepared to respond to evolving guidance from the TCFD and other standard setters such as the International Sustainability Standards Board.
During FY23 the Group will undertake a detailed qualitative review of the risks and opportunities facing us and determine which climate
scenarios and time horizons to be used to test the resilience of the business. The aim of this approach is to develop and disclose our strategic
response to the high priority risks and opportunities. In keeping with the TCFD approach, a detailed quantification of these risks and
opportunities will commence during FY24 with the aim of assessing material financial impacts and preparing for future alignment with TCFD
and other guidance as it emerges.
5.4
Environmental regulation and reporting
The Group's operations are subject to a range of environmental regulations under the laws of the Commonwealth of Australia and its States
and Territories. We report our Scope 1 and Scope 2 emissions from our Australian operations to the Clean Energy Regulator annually, under
the National Greenhouse and Energy Reporting scheme, established by the National Greenhouse and Energy Reporting Act 2007 (Cth). The
Company's FY22 Sustainability Report provides disclosure around the material ESG-related issues for the Group's businesses. The Group did
not incur any significant liabilities under any environmental legislation during the reporting period.
5.5
Dividends and distributions
Dividends paid or resolved to be paid to members subsequent to the financial year ended 26 June 2021 were:
Paid during FY22:
FY21 final dividend (fully franked)
FY22 interim dividend (fully franked)
Determined to be paid after end of FY22:
FY22 final dividend (fully franked)
Cents per share
Total amount
$m
Payment date
55.0
27.0
43.0
124.3
61.0
7 October 2021
14 April 2022
97.1
17 October 2022(1)
(1) The Board has determined that the FY22 final dividend will be paid on 17 October 2022. Any change to this payment date will be notified to the ASX as
required.
The amount of the FY22 final dividend represents a dividend payout ratio of 65 per cent of the full year underlying NPAT totalling a cash
payment of $97.1 million.
No other dividends or distributions were declared or paid during the financial year by the Company.
5.6
Significant changes in the state of affairs
There were no other significant changes in the state of affairs of the Group that occurred during the financial year under review that are not
otherwise described in this report.
5.7
Matters subsequent to the end of the financial year
At the date of this report, the Directors are not aware of any matter or circumstance, other than transactions or matters disclosed in the
financial statements, that has arisen and has significantly affected or may significantly affect the operations of the Group, the results of those
operations or the state of affairs of the Group in the financial years subsequent to 2 July 2022.
5.8
Likely developments and future prospects
Information about likely developments in and expected results of the operations of the Group are set out within section 5.2 of this Directors’
Report (‘Review of financial condition’). In respect of likely developments, business strategies and prospects for future financial years,
material which if included would be likely to result in unreasonable prejudice to the Group, has been omitted.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
44
44
DIRECTORS’ REPORT (continued)
6.
Non-audit services
The Group has, from time to time, employed the external auditor, PricewaterhouseCoopers, on assignments additional to their statutory
audit duties where the auditor’s expertise and experience with the Group are important.
The Board has considered 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 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; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for
Professional Accountants.
Fees paid or payable during the financial year for audit and non-audit services provided by the auditor, PricewaterhouseCoopers and its
network firms are set out in Note 31 – Remuneration of auditors in the notes to the consolidated financial statements.
7.
Corporate Governance Statement
The Company’s Corporate Governance Statement for the financial year ended 2 July 2022 can be accessed in the Corporate Governance
section of the Company’s website.
8.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act for leave to bring proceedings on behalf of the Company, or
to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or
part of those proceedings.
9.
Auditor’s independence declaration
Cents per share
Total amount
Payment date
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act is set out on page 46.
$m
124.3
61.0
7 October 2021
14 April 2022
10.
Remuneration Report
The audited Remuneration Report is set out on pages 48 to 77.
11.
Options over unissued shares
(1) The Board has determined that the FY22 final dividend will be paid on 17 October 2022. Any change to this payment date will be notified to the ASX as
97.1
17 October 2022(1)
No options over unissued shares in the Company were in existence at the beginning of the financial year or granted during, or since the end
of, the financial year.
12.
Directors’ and Officers’ indemnification and insurance
Under the Company's Constitution, the Company may indemnify any current or former director, secretary or senior manager of the Company
or of a related body corporate of the Company against:
-
-
every liability incurred by the person in that capacity (except a liability for legal costs); and
all legal costs incurred in defending or resisting (or otherwise in connection with) proceedings, whether civil or criminal or of an
administrative or investigatory nature, in which the person becomes involved because of that capacity, except, to the extent that the
Company is forbidden by law to indemnify the person against the liability or legal costs, or an indemnity by the Company of the person
against the liability or legal costs would, if given, be made void by law.
Consistent with the provisions of the Constitution, the Company has entered into deeds of access, indemnity and insurance with all directors,
secretaries and senior managers of the Group, or otherwise made a deed poll in favour of such persons, under which the Company
indemnifies the director, officer or senior manager against the full amount of any liabilities, costs and expenses (including legal fees) incurred
by them in their respective capacities, subject to certain exclusions, including to the extent that the indemnity by the Company of any such
person is prohibited by the Corporations Act or other applicable law.
During the financial year, the Company has paid premiums for directors' and officers' insurance in respect of directors, officers, and certain
senior managers of the Group pursuant to the deeds and deed polls of indemnity and insurance referred to above and as permitted by the
Company's Constitution. The insurance policy prohibits disclosure of the nature of the liabilities insured and the premiums payable under
the policy.
43
5.
5.3
DIRECTORS’ REPORT (continued)
Operating and Financial Review (continued)
Climate
The Group is committed to its Emissions Reduction Strategy including our new target of zero carbon emissions for Scope 1 and Scope 2 by
2030 for all wholly-owned and operated assets. During FY22, we have worked with our energy service provider to review the pathway to
achieving this target with a particular focus on energy efficiency and green energy procurement. In addition, we continue to expand our
recycling and waste reduction programs, and to support our environmental protection and restoration programs.
Super Retail Group recognises the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures
(TCFD) and the associated framework. We are working to incrementally improve alignment with the TCFD recommendations whilst being
prepared to respond to evolving guidance from the TCFD and other standard setters such as the International Sustainability Standards Board.
During FY23 the Group will undertake a detailed qualitative review of the risks and opportunities facing us and determine which climate
scenarios and time horizons to be used to test the resilience of the business. The aim of this approach is to develop and disclose our strategic
response to the high priority risks and opportunities. In keeping with the TCFD approach, a detailed quantification of these risks and
opportunities will commence during FY24 with the aim of assessing material financial impacts and preparing for future alignment with TCFD
and other guidance as it emerges.
5.4
Environmental regulation and reporting
The Group's operations are subject to a range of environmental regulations under the laws of the Commonwealth of Australia and its States
and Territories. We report our Scope 1 and Scope 2 emissions from our Australian operations to the Clean Energy Regulator annually, under
the National Greenhouse and Energy Reporting scheme, established by the National Greenhouse and Energy Reporting Act 2007 (Cth). The
Company's FY22 Sustainability Report provides disclosure around the material ESG-related issues for the Group's businesses. The Group did
not incur any significant liabilities under any environmental legislation during the reporting period.
5.5
Dividends and distributions
Dividends paid or resolved to be paid to members subsequent to the financial year ended 26 June 2021 were:
Paid during FY22:
FY21 final dividend (fully franked)
FY22 interim dividend (fully franked)
Determined to be paid after end of FY22:
FY22 final dividend (fully franked)
required.
payment of $97.1 million.
55.0
27.0
43.0
The amount of the FY22 final dividend represents a dividend payout ratio of 65 per cent of the full year underlying NPAT totalling a cash
No other dividends or distributions were declared or paid during the financial year by the Company.
There were no other significant changes in the state of affairs of the Group that occurred during the financial year under review that are not
5.6
Significant changes in the state of affairs
otherwise described in this report.
5.7
Matters subsequent to the end of the financial year
At the date of this report, the Directors are not aware of any matter or circumstance, other than transactions or matters disclosed in the
financial statements, that has arisen and has significantly affected or may significantly affect the operations of the Group, the results of those
operations or the state of affairs of the Group in the financial years subsequent to 2 July 2022.
5.8
Likely developments and future prospects
Information about likely developments in and expected results of the operations of the Group are set out within section 5.2 of this Directors’
Report (‘Review of financial condition’). In respect of likely developments, business strategies and prospects for future financial years,
material which if included would be likely to result in unreasonable prejudice to the Group, has been omitted.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
45
45
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
DIRECTORS’ REPORT (continued)
13.
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.
Sally Pitkin AO
Chair
Brisbane
17 August 2022
Anthony Heraghty
Group Managing Director and
Chief Executive Officer
45
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
46
46
DIRECTORS’ REPORT (continued)
13.
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.
Sally Pitkin AO
Chair
Brisbane
17 August 2022
Anthony Heraghty
Group Managing Director and
Chief Executive Officer
Auditor’s Independence Declaration
As lead auditor for the audit of Super Retail Group Limited for the 53 week period ending 2 July 2022,
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.
Paddy Carney
Partner
PricewaterhouseCoopers
Brisbane
17 August 2022
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 FY22
47
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
Remuneration Report
For the financial
year ended
2 July 2022
2022 SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
48
48
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 2 JULY 2022
CONTENTS
Section 1
Section 2
Section 3
Letter from the Chair of the Human Resources and Remuneration Committee
Key Management Personnel
FY22 Performance and Executive Remuneration Outcomes, including:
Executive Remuneration table calculated in accordance with accounting standards
Remuneration received
Remuneration granted
FY23 Remuneration Matters
Executive Interests in Super Retail Group Securities
Executive Remuneration Framework
Section 4
Section 5
Section 6
Section 7 Non-Executive Director Remuneration Arrangements
Section 8
Section 9
Transactions with KMP
Remuneration Governance
Introduction
The Directors of Super Retail Group present this Remuneration Report for the financial year ended 2 July 2022. 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 the Corporations Act 2001 (Cth) (Corporations Act), the
Corporations Regulations 2001 (Cth) and applicable Australian 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
Dear Shareholders,
On behalf of the Board, I present the Remuneration Report for the financial year ended 2 July 2022. The first portion of the report focuses
on FY22 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 FY21 received shareholder support at the 2021 Annual General Meeting (AGM), with 97.2 per cent of votes
in favour of adoption. In presenting the FY22 remuneration outcomes and considering changes for FY23, we have taken into account
feedback from shareholders.
The Group remains focussed on growing the scale and profitability of our digital offering, continuing our transformation to an omni-retail
business. The Group’s investment for future growth is delivering business improvements which will provide a platform to sustainably
generate value for shareholders. The Group produced a strong set of financial results in FY22, delivering another year of record sales. The
Group’s digital capability, successful execution of its omni-retail strategy and proactive supply chain and inventory management to ensure
stock availability were all key to this performance. Key non-financial metrics of organic customer growth and net promoter score also
improved year on year.
The Group’s financial performance has resulted in the opening of the performance gate to the STI Scheme. The Executive KMP STI
achievement, as detailed in Section 3 of this report, was commensurate with the performance of the Company during the FY22 year. The
overall result for the Group Managing Director and Chief Executive Officer (Group MD and CEO) Anthony Heraghty was between target and
stretch, a performance score of 130.5 (compared to target at 100 and stretch at 150). The FY20 Long-Term Incentive (LTI) grant was assessed
against the Earnings Per Share (EPS) and Return on Capital (ROC) targets for the three financial years ending 2 July 2022. The EPS result was
just below the target for 100 per cent vesting and reflects the strong growth achieved over the testing period. ROC outcomes were also
strong and achieved target reflecting higher profitability and prudent capital management. The combination of the two measures resulted
in 96.7 per cent of the FY20 LTI grant qualifying for vesting. The vesting of this grant occurs 50 per cent in September 2022 and 50 per cent
in September 2023.
As disclosed in the FY21 Remuneration Report, the Board made the decision in FY21 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. The LTI grant for FY21 also included reward for FY22 and there was no separate LTI grant in FY22 for Executives including KMP.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
49
49
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 2 JULY 2022
This one-off change in approach means that there are two LTI grants tested and qualifying for vesting after the end of FY22 (being the FY20
grant mentioned above and the FY21 grant). Performance against the Net Profit Before Tax (NPBT) and ROC metrics for the FY21 grant was
assessed for the two financial years ending 2 July 2022. Both the NPBT and ROC maximum performance levels were set above performance
in the prior years, despite market uncertainty at the time. Performance significantly exceeded the maximum levels set by the Board. On
this basis, 100 per cent of the grant qualified for vesting with, one third of the vested award to vest to participants in November 2022, one
third in November 2023 and one third in November 2024. Detail of the plan is shown in Section 6.
Following a review, the Board approved amendments to the Minimum Securities Holding Policy (which is available on the Company’s
website). In broad terms, the period in which the Non-Executive Directors are required to acquire the minimum number of shares
(equivalent to one times annual base fees) was adjusted from five years to three years. For Executive KMP the period remains at five years,
but the manner of calculation has been simplified, and includes all equity to the extent that the performance hurdle has been achieved
(regardless of whether the time-vesting requirement has been met).
The transition in the executive leadership of the Macpac business saw the appointment of Cathy Seaholme as Managing Director Macpac
on 25 October 2021. The former Chief Executive Officer Macpac, Alex Brandon ceased to be a KMP on 24 October 2021. The termination
benefits provided to Mr Brandon are outlined in Section 6. The Board thanks Mr Brandon for his decade of leadership at Macpac, and the
successful integration of the Macpac business into the Group.
Looking ahead to FY23, in the context of market data for similar-sized ASX-listed companies and industry peers and continued strong
performance, the Board approved changes to Executive KMP remuneration. The Board considered feedback from shareholders regarding
the determination of the relevant benchmark for remuneration levels. Market data provides one input to the Board’s decision-making on
remuneration levels. The benchmarking approach allows the Board to consider a broad range of comparable roles in companies or, where
relevant, business units, of similar size and scale, as well as industry peers. This dual lens provides both a large enough sample to form a
view on remuneration levels across the broader market for talent as well as sector specific insights.
The intent of the changes to Executive KMP remuneration in FY23 is to align Total Target Remuneration and mix towards the 75th percentile
of the relevant peer group in market. As such, changes in quantum are largely driven by changes in the LTI opportunity and remuneration
mix, increasing the equity component and further aligning executives’ interests with shareholders. Other than the Group MD and CEO
(discussed below), the reward targets for STI remain the same as FY22 for Executive KMP. Fixed remuneration increases are proposed for
Executive KMP of on average, 3.0 per cent compared to FY22 in line with market compensation ratios.
As indicated in the FY21 Remuneration Report, the Board has taken a view in terms of the target positioning and pay mix for the Group MD
and CEO and has continued to implement changes to the target remuneration mix and remuneration opportunity for FY22 and FY23. In
establishing the approach, the Board took into account market data for similar sized ASX-listed companies (based on market capitalisation),
industry peers, the sustained performance of the Group over Mr Heraghty’s tenure and his personal performance, contribution and value
to the organisation during a particularly challenging time. Based on this assessment of performance and future expectations, the Board
approved a phased remuneration increase across FY22 and FY23 targeting a Fixed Remuneration and Total Target Remuneration position
towards the 75th percentile of the relevant peer group by FY23. Mr Heraghty’s remuneration opportunity is increasingly skewed toward
long-term variable pay, with a significant portion provided in equity via deferred STI and LTI (approximately 36 per cent equity in FY22 and
44 per cent in FY23). The Board considers this approach appropriate to reward and retain a high calibre CEO, while aligning the interests of
management with shareholders’ interests via a high proportion of variable pay with significant equity exposure. Details are outlined in
Sections 3 (FY22) and 4 (FY23).
On behalf of the Board, I would like to thank and congratulate the entire Super Retail Group team on the strong results, both financial and
non-financial. We welcome your feedback on our FY22 Remuneration Report.
Yours sincerely,
Peter Everingham
Chair of the Human Resources and Remuneration Committee
49
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 2 JULY 2022
REMUNERATION REPORT
(AUDITED)
50
50
REPORTING PERIOD
ENDED 2 JULY 2022
SECTION 2
Key Management Personnel
The names and titles of the Group’s KMP for FY22, being those persons having authority and responsibility for planning, directing and
controlling the activities of the Group, are set out below.
Name
Position
Non-Executive Directors
Sally Pitkin AO
Chair and Independent Non-Executive Director
Reg Rowe
Non-Executive Director
Howard Mowlem
Independent Non-Executive Director
Peter Everingham
Independent Non-Executive Director
Annabelle Chaplain AM
Independent Non-Executive Director
Judith Swales
Independent Non-Executive Director
Former Non-Executive Directors
Gary Dunne
Former Independent Non-Executive Director
Executives
Anthony Heraghty
David Burns
Gary Williams
Benjamin Ward
Paul Bradshaw
Group Managing Director and
Chief Executive Officer
Chief Financial Officer
Managing Director - rebel
Managing Director - Supercheap Auto
Managing Director - BCF
Cathy Seaholme
Managing Director - Macpac
Former Executive KMP
Term as KMP(1)
Director since 1 July 2010
(Chair from 23 October 2017)
8 April 2004
13 June 2017
19 December 2017
31 March 2020
1 November 2021
31 March 2020 to
31 December 2021
KMP since 27 April 2015
(Group MD and CEO from
20 February 2019)
3 December 2012
2 April 2019
1 August 2019
25 November 2019
25 October 2021
On behalf of the Board, I would like to thank and congratulate the entire Super Retail Group team on the strong results, both financial and
Alex Brandon
Former Chief Executive Officer - Macpac
1 May 2019 to 24 October 2021
non-financial. We welcome your feedback on our FY22 Remuneration Report.
(1)
Indicates date of commencement as a KMP and, where applicable, the date of cessation as a KMP. Except where otherwise indicated, all KMP were in office for the entire reporting period
and at the date of this report.
This one-off change in approach means that there are two LTI grants tested and qualifying for vesting after the end of FY22 (being the FY20
grant mentioned above and the FY21 grant). Performance against the Net Profit Before Tax (NPBT) and ROC metrics for the FY21 grant was
assessed for the two financial years ending 2 July 2022. Both the NPBT and ROC maximum performance levels were set above performance
in the prior years, despite market uncertainty at the time. Performance significantly exceeded the maximum levels set by the Board. On
this basis, 100 per cent of the grant qualified for vesting with, one third of the vested award to vest to participants in November 2022, one
third in November 2023 and one third in November 2024. Detail of the plan is shown in Section 6.
Following a review, the Board approved amendments to the Minimum Securities Holding Policy (which is available on the Company’s
website). In broad terms, the period in which the Non-Executive Directors are required to acquire the minimum number of shares
(equivalent to one times annual base fees) was adjusted from five years to three years. For Executive KMP the period remains at five years,
but the manner of calculation has been simplified, and includes all equity to the extent that the performance hurdle has been achieved
(regardless of whether the time-vesting requirement has been met).
The transition in the executive leadership of the Macpac business saw the appointment of Cathy Seaholme as Managing Director Macpac
on 25 October 2021. The former Chief Executive Officer Macpac, Alex Brandon ceased to be a KMP on 24 October 2021. The termination
benefits provided to Mr Brandon are outlined in Section 6. The Board thanks Mr Brandon for his decade of leadership at Macpac, and the
successful integration of the Macpac business into the Group.
Looking ahead to FY23, in the context of market data for similar-sized ASX-listed companies and industry peers and continued strong
performance, the Board approved changes to Executive KMP remuneration. The Board considered feedback from shareholders regarding
the determination of the relevant benchmark for remuneration levels. Market data provides one input to the Board’s decision-making on
remuneration levels. The benchmarking approach allows the Board to consider a broad range of comparable roles in companies or, where
relevant, business units, of similar size and scale, as well as industry peers. This dual lens provides both a large enough sample to form a
view on remuneration levels across the broader market for talent as well as sector specific insights.
The intent of the changes to Executive KMP remuneration in FY23 is to align Total Target Remuneration and mix towards the 75th percentile
of the relevant peer group in market. As such, changes in quantum are largely driven by changes in the LTI opportunity and remuneration
mix, increasing the equity component and further aligning executives’ interests with shareholders. Other than the Group MD and CEO
(discussed below), the reward targets for STI remain the same as FY22 for Executive KMP. Fixed remuneration increases are proposed for
Executive KMP of on average, 3.0 per cent compared to FY22 in line with market compensation ratios.
As indicated in the FY21 Remuneration Report, the Board has taken a view in terms of the target positioning and pay mix for the Group MD
and CEO and has continued to implement changes to the target remuneration mix and remuneration opportunity for FY22 and FY23. In
establishing the approach, the Board took into account market data for similar sized ASX-listed companies (based on market capitalisation),
industry peers, the sustained performance of the Group over Mr Heraghty’s tenure and his personal performance, contribution and value
to the organisation during a particularly challenging time. Based on this assessment of performance and future expectations, the Board
approved a phased remuneration increase across FY22 and FY23 targeting a Fixed Remuneration and Total Target Remuneration position
towards the 75th percentile of the relevant peer group by FY23. Mr Heraghty’s remuneration opportunity is increasingly skewed toward
long-term variable pay, with a significant portion provided in equity via deferred STI and LTI (approximately 36 per cent equity in FY22 and
44 per cent in FY23). The Board considers this approach appropriate to reward and retain a high calibre CEO, while aligning the interests of
management with shareholders’ interests via a high proportion of variable pay with significant equity exposure. Details are outlined in
Sections 3 (FY22) and 4 (FY23).
Yours sincerely,
Peter Everingham
Chair of the Human Resources and Remuneration Committee
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
51
51
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 2 JULY 2022
SECTION 3
FY22 Performance and Executive Remuneration Outcomes
RELATIONSHIP OF REMUNERATION TO GROUP PERFORMANCE
All elements of the remuneration framework are set by reference to market context and benchmarks. The overarching performance
management framework aims to align executive performance and conduct to sustainable profitable performance. The Short-Term
Incentive (STI) scheme and Long-Term Incentive (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 other Executive KMP.
The performance of the Group over the past five years is summarised in Table 1a.
FINANCIAL PERFORMANCE
The Group produced a strong financial performance in FY22, delivering another year of record sales.
Key contributors to the Group’s performance were the successful execution of its omni-retail strategy, the Group’s digital capability, and
proactive supply chain and inventory management to ensure stock availability.
Record online sales enabled the Group to achieve a strong first half result despite the ongoing challenges of the COVID-19 pandemic,
including restrictions on store trading. In addition, the Group’s strategic decision to invest in inventory in response to a disrupted global
supply chain enabled it to capture consumer demand when spending rebounded in the second quarter following the end of COVID-19
lockdowns.
Sales momentum continued to build in the second half as pandemic restrictions eased and customers returned to stores. The Group
delivered a robust second half result, with like-for-like sales increasing by 5.0 per cent. This result reflected a growing contribution from
successful new store formats, positive like-for-like sales across all four core brands and record winter sales for Macpac.
Price discipline enabled the Group to achieve a gross margin of 48.6 per cent as effective promotions and pricing helped offset higher supply
chain costs.
The Group also added more than one million customers to its loyalty programs, as the number of active club members reached 9.2 million.
These customers represented 70 per cent of Group sales.
Table 1a: Company performance - key metrics used in reward framework
Financial performance
Sales ($m)
Normalised net profit before tax (NPBT) ($m)
Normalised post tax return on capital (ROC) (%)
Normalised earnings per share (EPS) (¢)
Dividends per share (¢)
Share price at the close of the financial year ($)
(1) pre AASB16 – Leases.
FY18
FY19
FY20
FY21
FY22
2,570.4
2,710.4
2,825.2
3,453.1
3,550.9
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
437.5(1)
356.9(1)
28.8(1)
20.5(1)
136.5(1)
110.4(1)
88.0
12.95
70.0
8.49
The Board may adjust for any significant events or items to give financial statement users additional insight into financial performance.
These adjustments are for events or items considered unusual by their nature or size and/or not being in the ordinary course of business.
For FY22, such adjustments related only to the in-year effect of items disclosed in prior years (see below and Note 4b). There were no
other discretionary adjustments made in FY22 for the purpose of determining profit-based incentive remuneration.
51
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 2 JULY 2022
REMUNERATION REPORT
(AUDITED)
52
52
REPORTING PERIOD
ENDED 2 JULY 2022
Table 1b: Company performance – adjustments for significant items
$m
Profit for the period before tax
Adjustments for wages underpayment, losses from associate and reversal of provisions previously excluded
Segment normalised profit before taxes (PBT)
AASB 16 Accounting for leases impact
Normalised net profit before tax (NPBT) (1)
(1) pre AASB16 – Leases.
FY22
FY21
345.7
3.9
349.6
7.3
356.9
427.6
8.2
435.8
1.7
437.5
The Group’s incentive awards are designed to align Executive KMP remuneration with business performance. This alignment is
demonstrated through the choice of metrics, annual target setting process and the variation in STI and LTI payment outcomes year-on-
year. Over the past four years (i.e., current MD and CEO tenure), Executive KMP STI outcomes have ranged from 50 per cent to 141 per
cent of target (33 per cent to 94 per cent of maximum), averaging 117 per cent of target (78 per cent of maximum). Over the same period,
the LTI has vested between 38 per cent and 100 per cent, averaging 78 per cent. Further detail on FY22 STI outcomes and LTI vesting is
included on the following pages.
STI OUTCOMES FOR FY22
For the financial year ended 2 July 2022, the target for normalised NPBT was set at $295.2 million, 35.2 per cent higher than the NPBT
achieved in FY20 of $218.3 million. This target was lower than the actual NPBT achieved in FY21 of $437.5 million because FY21 was
considered to be anomalous in the context of the COVID-19 pandemic, which led to elevated levels of retail spending. The financial gateway
for the FY22 STI scheme of $265.7 million (90 per cent of target) was exceeded and therefore Executive KMP scorecards were activated.
The individual Key Performance Indicator (KPI) categories to determine STI awards and the FY22 achievements, referenced by the Board
for the Group MD and CEO and other Executive KMP, are detailed in Tables 2 and 3.
After reviewing the FY22 STI outcome for the Group MD and CEO, the Board applied both upward and downward adjustments. The net
result was a weighted score outcome of 130.5 per cent of target (87 per cent of maximum). This outcome was driven by a strong result for
Group financial performance, and both customer measures of active customer revenue and net promoter score (NPS). Table 2 outlines
elements of the balanced scorecard that contributed to this result.
SECTION 3
FY22 Performance and Executive Remuneration Outcomes
RELATIONSHIP OF REMUNERATION TO GROUP PERFORMANCE
All elements of the remuneration framework are set by reference to market context and benchmarks. The overarching performance
management framework aims to align executive performance and conduct to sustainable profitable performance. The Short-Term
Incentive (STI) scheme and Long-Term Incentive (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 other Executive KMP.
The performance of the Group over the past five years is summarised in Table 1a.
FINANCIAL PERFORMANCE
The Group produced a strong financial performance in FY22, delivering another year of record sales.
Key contributors to the Group’s performance were the successful execution of its omni-retail strategy, the Group’s digital capability, and
proactive supply chain and inventory management to ensure stock availability.
Record online sales enabled the Group to achieve a strong first half result despite the ongoing challenges of the COVID-19 pandemic,
including restrictions on store trading. In addition, the Group’s strategic decision to invest in inventory in response to a disrupted global
supply chain enabled it to capture consumer demand when spending rebounded in the second quarter following the end of COVID-19
lockdowns.
chain costs.
Sales momentum continued to build in the second half as pandemic restrictions eased and customers returned to stores. The Group
delivered a robust second half result, with like-for-like sales increasing by 5.0 per cent. This result reflected a growing contribution from
successful new store formats, positive like-for-like sales across all four core brands and record winter sales for Macpac.
Price discipline enabled the Group to achieve a gross margin of 48.6 per cent as effective promotions and pricing helped offset higher supply
The Group also added more than one million customers to its loyalty programs, as the number of active club members reached 9.2 million.
These customers represented 70 per cent of Group sales.
Table 1a: Company performance - key metrics used in reward framework
Financial performance
Sales ($m)
Normalised net profit before tax (NPBT) ($m)
Normalised post tax return on capital (ROC) (%)
Normalised earnings per share (EPS) (¢)
Dividends per share (¢)
Share price at the close of the financial year ($)
(1) pre AASB16 – Leases.
FY18
FY19
FY20
FY21
FY22
2,570.4
2,710.4
2,825.2
3,453.1
3,550.9
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
437.5(1)
356.9(1)
28.8(1)
20.5(1)
136.5(1)
110.4(1)
88.0
12.95
70.0
8.49
The Board may adjust for any significant events or items to give financial statement users additional insight into financial performance.
These adjustments are for events or items considered unusual by their nature or size and/or not being in the ordinary course of business.
For FY22, such adjustments related only to the in-year effect of items disclosed in prior years (see below and Note 4b). There were no
other discretionary adjustments made in FY22 for the purpose of determining profit-based incentive remuneration.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
53
53
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
Table 2: Group MD and CEO performance
REPORTING PERIOD
ENDED 2 JULY 2022
Balanced
Scorecard
Measure
Weighting
Actual
Performance
range
Commentary on Performance
Normalised Net
Profit Before Tax
attributable to
members
Group Financial
Performance
35%
Stretch
The NPBT result for the Group is $356.9m which is above the
stretch target set for FY22.
The Normalised NPBT result is a strong result that reflects omni-
retail capability and execution which enabled the Group to
successfully navigate extended periods of store lockdowns and
generate record online sales, investment in inventory. This also
enabled the Group to mitigate supply chain disruption and
capture strong consumer demand and promotional discipline and
effectiveness which supported gross margin.
Working Capital
Efficiency
Delivery of FY22
portfolio benefits
in accordance
with plan
Revenue from
‘active customers’
Business
Improvement
Customer
15%
20%
Between
Threshold and
Target
The Group 13-month rolling average monthly net inventory
(excluding Group unallocated inventory and creditors) result was
$416.4m.
Between Target
and Stretch
Successfully delivered FY22 portfolio benefits in accordance with
plan.
Property portfolio delivery in line with stretch targets.
10%
Stretch
The target for organic growth through existing customers target
was exceeded with active customer revenue up 6 percentage
points from the prior year.
Customer
Satisfaction
10%
Stretch
Net Promoter Score (NPS) exceeded the stretch target with all
four brands improving year on year.
Safety
Target
People/Risk
10%
Total recordable injuries plus customer incidents of 290 represent
a 26 per cent improvement on the baseline, with improvements
across all brands.
Risk management
Between Target
and Stretch
Risk management at Group delivered between target and stretch
against risk profile, control and remediation plan assessments.
Table 3: Other Executive KMP performance outcome
Name
Role
Paul Bradshaw
Managing Director - BCF
David Burns
Chief Financial Officer
Cathy Seaholme
Benjamin Ward
Managing Director -
Macpac
Managing Director -
Supercheap Auto
Financial
Performance
(50%)
Business
Improvement
(20%)
Target to
Stretch
Target to
Stretch
Target to
Stretch
Target
Target to
Stretch
Target to
Stretch
Target to
Stretch
Target to
Stretch
Gary Williams
Managing Director - rebel
Stretch
Target
Stretch
Customer
(20%)
People / Risk
(10%)
Stretch
Target to
Stretch
Stretch
Target
Stretch
Threshold to
Target
Target to
Stretch
Target to
Stretch
Target to
Stretch
STI
scorecard
outcome
Target to
Stretch
Target to
Stretch
Target to
Stretch
Target to
Stretch
Target to
Stretch
53
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 2 JULY 2022
REMUNERATION REPORT
(AUDITED)
Table 2: Group MD and CEO performance
The STI outcomes for Executive KMP are reflected in Table 4.
54
54
REPORTING PERIOD
ENDED 2 JULY 2022
The STI award for all Executive KMP will be delivered as 70 per cent cash and 30 per cent restricted shares. The restricted share deferral is
released 50 per cent in August 2023 and 50 per cent in August 2024, on the condition of continued service or at the Board’s discretion. This
deferral supports an increase in executive shareholding, enhances risk management and executive retention, and reflects broader market
practice.
Table 4: STI outcomes
Name
Group MD and CEO
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
Anthony Heraghty
130.5
1,500,750
450,225
1,050,525
87.0%
13.0%
Other Executive KMP
Paul Bradshaw
David Burns
Cathy Seaholme(1)
Benjamin Ward
Gary Williams
132.5
128.3
132.8
112.5
135.0
530,000
641,692
190,122
562,669
675,203
159,000
192,508
57,037
168,801
202,561
371,000
449,184
133,085
393,868
472,642
88.3%
85.5%
88.5%
75.0%
90.0%
11.7%
14.5%
11.5%
25.0%
10.0%
(1) Ms Seaholme commenced as an Executive KMP on 25 October 2021 and as such her outcome is pro-rated for time in the role.
Customer
Satisfaction
10%
Stretch
Net Promoter Score (NPS) exceeded the stretch target with all
four brands improving year on year.
LTI OUTCOMES FOR FY22
The FY20 grant performance hurdles related to normalised EPS and ROC for the three financial years ending 2 July 2022. The performance
hurdles for the FY20 grant were partially met, with 96.7 per cent of the grant qualifying for vesting over the relevant vesting period. The
capital raising in July 2020 had an initial negative effect on EPS as the dilutive effect of the additional shares outweighed the short-term
benefit to earnings. The Board decided that no adjustment should be made to the reported result. Under the LTI plan, 50 per cent of the
vested FY20 grant will vest to participants in September 2022, the remaining 50 per cent to vest in September 2023. Details of the LTI plan
are shown in Section 6.
As disclosed in the FY21 Remuneration Report, 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. The
LTI grant for FY21 included reward for FY22 as there was no separate LTI grant in FY22 for Executives including KMP. This one-off change
in approach resulted in two LTI grants being tested and qualifying for vesting after the end of FY22 (being the FY20 grant and the FY21
grant).
The performance hurdles for the FY21 grant, as approved by shareholders in 2020 in respect of the grant of rights to the Group MD and
CEO, related to NPBT and ROC over the two financial years FY21 and FY22. The same terms applied to other Executive KMP grants. At the
time, the Board indicated the hurdles would be published at the end of the performance period and these are shown in Table 17. Table 1
shows Group NPBT and ROC over the last five years. In the three financial years immediately prior to the performance period, the Group
delivered average NPBT of approximately $209 million a year. The Board established a target of $517.3 million for NPBT over the two-year
performance period.
In the three financial years immediately prior to the performance period, the Group delivered average ROC of approximately 13.6 per cent.
The Board approved a target of 15.9 per cent a year over the two-year performance period (in excess of the 15 per cent previously required
for maximum vesting under the LTI).
The Board considered the outcomes in the context of the principles used for discretion (detailed in Table 17) and approved 100 per cent
vesting for the FY21 grant. In particular, the first year’s performance significantly exceeded expectations and therefore, the Board reviewed
performance in the context of actual FY21 NPBT in conjunction with the budget for FY22. That result also exceeded that required for
maximum vesting. The Board determined that due to the significant and sustained outperformance across the two-year period, no
adjustment was to be applied. Under the LTI plan, one third of the vested award will vest to participants in November 2022, one third in
November 2023 and one third in November 2024. Details of the LTI plan are set out in Section 6.
Balanced
Scorecard
Measure
Weighting
range
Commentary on Performance
Actual
Performance
Group Financial
Performance
Normalised Net
Profit Before Tax
attributable to
members
Working Capital
Efficiency
Business
Delivery of FY22
portfolio benefits
Improvement
in accordance
with plan
Revenue from
‘active customers’
Customer
35%
Stretch
The NPBT result for the Group is $356.9m which is above the
stretch target set for FY22.
The Normalised NPBT result is a strong result that reflects omni-
retail capability and execution which enabled the Group to
successfully navigate extended periods of store lockdowns and
generate record online sales, investment in inventory. This also
enabled the Group to mitigate supply chain disruption and
capture strong consumer demand and promotional discipline and
effectiveness which supported gross margin.
Between
The Group 13-month rolling average monthly net inventory
15%
Threshold and
(excluding Group unallocated inventory and creditors) result was
Target
$416.4m.
20%
Between Target
and Stretch
plan.
Property portfolio delivery in line with stretch targets.
Successfully delivered FY22 portfolio benefits in accordance with
10%
Stretch
was exceeded with active customer revenue up 6 percentage
The target for organic growth through existing customers target
points from the prior year.
Safety
Target
a 26 per cent improvement on the baseline, with improvements
Total recordable injuries plus customer incidents of 290 represent
People/Risk
10%
across all brands.
Risk management
Between Target
Risk management at Group delivered between target and stretch
and Stretch
against risk profile, control and remediation plan assessments.
Table 3: Other Executive KMP performance outcome
Name
Role
Paul Bradshaw
Managing Director - BCF
David Burns
Chief Financial Officer
Cathy Seaholme
Benjamin Ward
Managing Director -
Macpac
Managing Director -
Supercheap Auto
Target to
Stretch
Target to
Stretch
Target to
Stretch
Target
Target to
Stretch
Target to
Stretch
Target to
Stretch
Target to
Stretch
Financial
Business
Performance
Improvement
Customer
People / Risk
(50%)
(20%)
(20%)
(10%)
Stretch
Target to
Stretch
Stretch
Target
Stretch
Threshold to
Target
Target to
Stretch
Target to
Stretch
Target to
Stretch
STI
scorecard
outcome
Target to
Stretch
Target to
Stretch
Target to
Stretch
Target to
Stretch
Target to
Stretch
Gary Williams
Managing Director - rebel
Stretch
Target
Stretch
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
55
55
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 2 JULY 2022
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 FY17 grant and all subsequent grants. Table 5 outlines the performance outcomes and the subsequent vesting for each of
the LTI performance rights granted and performance tested since FY17. Each grant except the FY21 grant is subject to equally weighted
performance measures being compound average growth rate of normalised EPS over three financial years and normalised ROC averaged
over three financial years. The hurdles for the FY21 grant are detailed in Table 17 and are measured over the two years of the MTBP
established in the uncertainty of the COVID-19 pandemic.
Table 5: Proportion of LTI vesting over the past four years
Grant
name
Grant date
Financial
results
determining
vesting (1)
FY17
FY18
FY19
FY20
September
2016
FY17, FY18,
FY19
September
2017
FY18, FY19,
FY20
September
2018
FY19, FY20,
FY21
September
2019
FY20, FY21,
FY22
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
%
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
12.6
46.7
Nil
3.3
19.0
50.0
21.3
50.0
Nil
Nil
Grant
name
Grant date
FY21
November
2020
Financial
results
determining
vesting
Normalised Net Profit Before Tax
two-year aggregate
(50% weight)
Qualifying
for vesting
%
Performance
outcome
$m
Forfeited
%
Normalised Return On Capital (ROC)
two-year average
(50% weight)
Qualifying
for vesting
%
Performance
outcome
%
Forfeited
%
FY21, FY22
794.4
50.0
Nil
24.6
50.0
Nil
(1) Results are after adjustments for impact of underpayments as previously disclosed.
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 FY17 grant and all subsequent grants. Table 5 outlines the performance outcomes and the subsequent vesting for each of
the LTI performance rights granted and performance tested since FY17. Each grant except the FY21 grant is subject to equally weighted
performance measures being compound average growth rate of normalised EPS over three financial years and normalised ROC averaged
over three financial years. The hurdles for the FY21 grant are detailed in Table 17 and are measured over the two years of the MTBP
established in the uncertainty of the COVID-19 pandemic.
Table 5: Proportion of LTI vesting over the past four years
Grant
name
Grant date
Financial
results
determining
vesting (1)
Normalised Earnings Per Share (EPS)
Normalised Return On Capital (ROC)
three-year compound average
growth rate (50% weight)
three-year average
(50% weight)
Performance
outcome
Qualifying
for vesting
Performance
Forfeited
outcome
Qualifying
for vesting
%
13.8
%
44.0
%
13.0
%
33.3
Forfeited
%
16.7
FY17
FY18
FY19
FY20
September
FY17, FY18,
2016
FY19
September
FY18, FY19,
2017
FY20
September
FY19, FY20,
2018
FY21
September
FY20, FY21,
2019
FY22
Grant
name
Grant date
Financial
results
vesting
5.3
Nil
50.0
13.6
38.3
11.7
23.8
50.0
19.0
50.0
12.6
46.7
21.3
50.0
Normalised Net Profit Before Tax
Normalised Return On Capital (ROC)
determining
Performance
Performance
Forfeited
outcome
Forfeited
two-year aggregate
(50% weight)
Qualifying
for vesting
%
50.0
outcome
$m
two-year average
(50% weight)
Qualifying
for vesting
%
24.6
%
50.0
Nil
Nil
%
Nil
%
6.0
Nil
3.3
%
Nil
FY21
November
2020
FY21, FY22
794.4
(1) Results are after adjustments for impact of underpayments as previously disclosed.
55
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 2 JULY 2022
REMUNERATION REPORT
(AUDITED)
56
56
REPORTING PERIOD
ENDED 2 JULY 2022
Executive KMP remuneration outcomes for FY22
Table 6 details remuneration elements prepared and calculated in accordance with Australian Accounting Standards. Restricted shares and
performance rights are the fair value, accrued over the performance period and vesting period, and cash bonus (STI) for FY22 is the amount
earned for FY22 and to be paid in September 2022 (i.e. in FY23). The fair value of restricted shares is the market value at the grant date.
The fair value of performance rights is determined using a Black-Scholes option pricing model.
Table 6: Remuneration for Executive KMP calculated in accordance with Australian Accounting Standards
Year
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
Name
Anthony Heraghty
(4)
Paul Bradshaw
David Burns
Cathy Seaholme
(5)
Benjamin Ward
Gary Williams
Former Executive KMP
Alex Brandon
(6)
(7)
Total
Total
(1)
(2)
(3)
Short-term benefits
Post-employment
Share-based
Other
Total
Non-
monetary
benefits(1)
$
Annual
leave
$
Super-
annuation
$
Termination
Benefits
$
Performance
Rights(2)
$
Restricted
Shares
$
Other long-
term
benefit(3)
$
Total
$
Cash
salary
$
Cash
bonus
$
1,351,907
1,050,525
1,128,305
689,207
674,119
371,000
622,957
394,240
663,026
449,184
653,306
471,241
-
-
-
-
900
-
(32,911)
(44,701)
13,916
8,183
30,480
16,317
26,243
21,694
24,900
21,694
24,880
21,694
349,992
191,458
49,975
17,361
12,955
-
-
-
-
-
729,132
393,868
7,305
18,284
655,207
484,195
44,793
8,208
28,963
25,000
25,031
21,694
46,181
22,667
739,469
472,642
900
703,306
473,692
122,918
-
379,232
101,187
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,043,528
335,791
25,525
3,800,608
1,303,359
209,010
11,227
3,318,101
421,796
142,566
4,935
1,653,232
442,542
92,182
3,521
1,585,319
466,154
182,052
12,699
1,829,375
701,407
144,562
12,515
2,021,042
-
-
71,238
1,512
694,491
-
-
-
453,759
171,918
5,403
1,808,632
494,848
139,157
3,791
1,855,199
447,972
185,263
5,376
1,922,834
497,741
141,463
3,829
1,864,392
757
27,971
379,640
279,224
27,072
-
837,582
12,172
11,575
-
212,053
27,132
(110,565)
632,786
4,630,563
2,928,677
59,080
94,068
170,943
379,640
3,112,433
1,115,900
55,450
12,546,754
4,142,313
2,613,762
44,793
22,846
123,351
-
3,651,950
753,506
(75,682)
11,276,839
Includes salary-sacrificed items such as novated leases, and car parking, including any FBT payable, and KMP relocation and accommodation.
FY22 includes a dividend equivalent payment due in respect of Mr Heraghty’s one-off co-investment award of performance rights for the period from his appointment as CEO on 20 February
2019 until the date of vesting on 20 February 2022, consistent with Mr Heraghty’s contract terms.
Includes accruals for long service leave entitlements. During FY21 this also included the reversal of accrued long-term retention bonus for Mr Brandon of $110,565 ($48,801 in 2020 and
$61,764 in 2019) when this was withdrawn by the Board and Mr Brandon joined the same LTI plan as other Executive KMP.
The annual leave accrual in FY21 has been adjusted to reflect the leave that was taken in FY21.
(4)
(5) Ms Seaholme commenced as an Executive KMP on 25 October 2021. Ms Seaholme received an initial incentive, dependent on performance, which is payable partially in cash and partially in
equity. This incentive is described in Section 6. Included in cash bonus and restricted shares is accrued initial incentive of $58,373 and $47,473 respectively.
(6) Mr Brandon ceased being a KMP on 24 October 2021. The termination arrangements are described in Section 6.
(7)
The reporting period of 27 June 2021 to 2 July 2022 is a period of 53 weeks, compared to the comparative reporting period of 28 June 2020 to 26 June 2021 representing 52 weeks, which
has resulted in a $0.1 million increase in expense for the period.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
57
57
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 2 JULY 2022
Table 7 details the remuneration received by Executive KMP during FY22. As with Table 6, the cash STI amount is that earned in FY22 and
to be paid in FY23. The amount shown for value of deferred STI (restricted shares) represents the number of shares on which the restrictions
were lifted multiplied by the closing price of ordinary shares of the Company on the ASX on the date restrictions were lifted ($13.20 on 19
August 2021). This value for Deferred STI contrasts with Table 6 that shows the FY22 portion of the Deferred STI amortised over the relevant
period.
The amount shown for value of LTI (performance rights) vesting represents the number of ordinary shares in the Company received on
vesting of performance rights during FY22 multiplied by the closing price of ordinary shares of the Company on the ASX on the date of
vesting ($12.42 on 3 September 2021 and $10.91 on 25 February 2022). The ordinary shares received on vesting of performance rights
derive from grants since FY17 as detailed in Table 12. This value for LTI contrasts with Table 6, which shows the FY22 portion of the fair
value of equity grants amortised over the relevant performance measurement and vesting periods.
Table 7: Remuneration received
FY22
Name
Cash and non-monetary
Equity
Total
Cash salary
$
Other
$
Cash
bonus
$
Non-monetary
benefits and
superannuation(1)
$
Value of deferred
STI (restricted
shares)
restrictions
expired(2)
$
Value of LTI
(performance
rights) vesting
$
Total
$
Anthony Heraghty
1,351,907
59,920(3)
1,050,525
Paul Bradshaw
David Burns
Cathy Seaholme(4)
Benjamin Ward
Gary Williams
674,119
663,026
349,992
729,132
739,469
-
-
-
-
-
371,000
449,184
133,085
393,868
472,642
26,243
24,900
25,780
62,930
36,268
25,931
179,969
782,488
3,451,052
46,939
-
1,116,958
126,430
407,413
1,671,833
-
111,197
120,146
-
-
-
546,007
1,270,465
1,358,188
(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 lifted in August 2021.
(3) Represents a dividend equivalent payment paid in respect of Mr Heraghty’s one-off co-investment grant of performance rights for the period from his appointment as CEO on 20 February
2019 until the date of vesting on 20 February 2022, consistent with Mr Heraghty’s contract terms.
(4) Ms Seaholme commenced as executive KMP on 25 October 2021.
period.
FY22
Name
The amount shown for value of LTI (performance rights) vesting represents the number of ordinary shares in the Company received on
vesting of performance rights during FY22 multiplied by the closing price of ordinary shares of the Company on the ASX on the date of
vesting ($12.42 on 3 September 2021 and $10.91 on 25 February 2022). The ordinary shares received on vesting of performance rights
derive from grants since FY17 as detailed in Table 12. This value for LTI contrasts with Table 6, which shows the FY22 portion of the fair
value of equity grants amortised over the relevant performance measurement and vesting periods.
Table 7: Remuneration received
Cash and non-monetary
Equity
Total
Cash salary
$
Other
$
Cash
bonus
$
Non-monetary
benefits and
superannuation(1)
$
Value of deferred
STI (restricted
shares)
restrictions
expired(2)
$
Value of LTI
(performance
rights) vesting
$
Total
$
Paul Bradshaw
David Burns
Cathy Seaholme(4)
Benjamin Ward
Gary Williams
674,119
663,026
349,992
729,132
739,469
-
-
-
-
-
371,000
449,184
133,085
393,868
472,642
26,243
24,900
25,780
62,930
36,268
25,931
46,939
1,116,958
126,430
407,413
1,671,833
-
-
-
-
546,007
1,270,465
1,358,188
-
111,197
120,146
(3) Represents a dividend equivalent payment paid in respect of Mr Heraghty’s one-off co-investment grant of performance rights for the period from his appointment as CEO on 20 February
(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 lifted in August 2021.
2019 until the date of vesting on 20 February 2022, consistent with Mr Heraghty’s contract terms.
(4) Ms Seaholme commenced as executive KMP on 25 October 2021.
57
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 2 JULY 2022
REMUNERATION REPORT
(AUDITED)
Table 7 details the remuneration received by Executive KMP during FY22. As with Table 6, the cash STI amount is that earned in FY22 and
to be paid in FY23. The amount shown for value of deferred STI (restricted shares) represents the number of shares on which the restrictions
were lifted multiplied by the closing price of ordinary shares of the Company on the ASX on the date restrictions were lifted ($13.20 on 19
August 2021). This value for Deferred STI contrasts with Table 6 that shows the FY22 portion of the Deferred STI amortised over the relevant
SECTION 4
FY23 Remuneration Matters
58
58
REPORTING PERIOD
ENDED 2 JULY 2022
Looking ahead to FY23, the following changes to remuneration quantum and approach have been approved by the Board.
In line with Mr Heraghty’s demonstrated experience and value delivered to shareholders, the Group MD and CEO’s fixed remuneration will
increase from $1,350,000 in FY22 to $1,500,000 in FY23 and total target remuneration opportunity will increase to $4,200,000 for FY23.
In determining this change, the Board considered market data for similar-sized ASX-listed companies and industry peers along with the
Group’s sustained financial performance and Mr Heraghty’s personal contribution and value to the Group. Based on this assessment of
performance, the Board approved a phased remuneration increase across FY22 and FY23 targeting a Fixed Remuneration and Total Target
Remuneration position towards the 75th percentile of the relevant peer group by FY23. During his tenure, Mr Heraghty has added
considerable value for shareholders, overseeing increases in EPS of 42.8 per cent while maintaining ROC above target ranges (FY19
compared to FY22).
Table 8 shows the remuneration mix as a percentage of total target reward for FY22 and FY23. The Group MD and CEO’s remuneration
opportunity is increasingly skewed toward long-term variable pay, with a significant portion provided in equity and the majority of the
increase in total target remuneration delivered via the LTI opportunity. The Board considers this approach appropriate to reward and retain
a high calibre CEO, while aligning the interests of management and shareholders via a high proportion of variable pay with significant equity
exposure.
Anthony Heraghty
1,351,907
59,920(3)
1,050,525
179,969
782,488
3,451,052
Table 8: Changes in remuneration mix for Group MD and CEO
Group MD and CEO
Remuneration Mix FY22
Group MD and CEO
Remuneration Mix FY23
40.3%
24.0%
10.3%
35.7%
20.0%
8.6%
25.4%
35.7%
Fixed pay
Cash STI at target
Deferred STI at target
Fixed pay
Cash STI at target
Deferred STI at target
LTI (50% of the face value of the FY21 grant)
LTI face value
In the context of market data for similar-sized ASX-listed companies and industry peers, and continued strong business and personal
performance, the Board approved changes to other Executive KMP remuneration levels for FY23. The intent of the changes is to align Total
Target Remuneration and mix towards the 75th percentile of the relevant peer group in market. As such, changes in quantum were largely
driven by changes in the LTI opportunity and remuneration mix, increasing the equity focus and further aligning executives’ interests with
shareholders. For the CFO and Brand Managing Directors, this translates to an increased LTI opportunity with LTI equating to between 30
per cent and 34 per cent of target total remuneration. Combined with the existing deferred STI component, this change to the remuneration
mix increases the focus on equity and alignment of Executive KMP with shareholder interests. Other than the Group MD and CEO, the
reward targets for STI remain the same as FY22 for Executive KMP. Executive KMP (other than the Group MD and CEO) FY23 fixed
remuneration will increase 3.0 per cent compared to FY22, in line with market compensation ratios. The FY23 target remuneration mix is
shown in Table 9.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
59
59
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 2 JULY 2022
Table 9: Remuneration mix of Executive KMP FY23 at Target
Anthony Heraghty
35.7%
20.0%
8.6%
35.7%
Paul Bradshaw
David Burns
43.1%
40.9%
17.2%
7.4%
32.3%
19.9%
8.5%
30.7%
Cathy Seaholme(1)
Cathy Seaholme(1)
44.6%
15.3%
6.6%
33.5%
Benjamin Ward
Gary Williams
41.7%
41.7%
18.9%
8.1%
31.3%
18.9%
8.1%
31.3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Fixed pay
Cash STI at target
Deferred STI at target
LTI face value
(1)
The target mix for Cathy Seaholme does not include her initial incentive described in Section 6.
The FY23 grant, as it relates to the Group MD and CEO, will be outlined in the 2022 Notice of Meeting for approval by shareholders. The
same terms will apply to grants made to other Executive KMP. The grant will be disclosed in next year’s Remuneration Report.
59
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 2 JULY 2022
REMUNERATION REPORT
(AUDITED)
60
60
REPORTING PERIOD
ENDED 2 JULY 2022
Table 9: Remuneration mix of Executive KMP FY23 at Target
Anthony Heraghty
35.7%
20.0%
8.6%
35.7%
Cathy Seaholme(1)
Cathy Seaholme(1)
44.6%
15.3%
6.6%
33.5%
Paul Bradshaw
David Burns
Benjamin Ward
Gary Williams
43.1%
40.9%
41.7%
41.7%
17.2%
7.4%
32.3%
19.9%
8.5%
30.7%
18.9%
8.1%
31.3%
18.9%
8.1%
31.3%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Fixed pay
Cash STI at target
Deferred STI at target
LTI face value
(1)
The target mix for Cathy Seaholme does not include her initial incentive described in Section 6.
The FY23 grant, as it relates to the Group MD and CEO, will be outlined in the 2022 Notice of Meeting for approval by shareholders. The
same terms will apply to grants made to other Executive KMP. The grant will be disclosed in next year’s Remuneration Report.
SECTION 5
Executive Interests in Super Retail Group Securities
The remuneration framework aligns executives’ interests to those of shareholders by utilising equity-based awards in the form of restricted
shares and performance rights. Executive KMP are also required to hold a minimum number of securities for alignment with other
shareholders.
Restricted shares are awarded as the deferral component of STI awards for executives and are ordinary shares in the Company that are
subject to certain time-based restrictions on disposal and vesting. Performance rights are awarded under the LTI plan at no cost to the
executive and provide the right to receive ordinary shares in the Company, subject to meeting performance and service-based vesting
conditions.
Restricted shares and performance rights are delivered to Executive KMP and other eligible executives subject to the rules of the Super
Retail Group Employee Equity Incentive Plan (the EIP). Further details of the equity plan structures are outlined in Section 6. The EIP rules
are available in the Corporate Governance section of the Company’s website.
This Section provides further information regarding the various equity interests in the Company held by executives, including details of
(and movements in) securities held by Executive KMP during the financial year.
EQUITY INTERESTS IN THE COMPANY HELD BY EXECUTIVE KMP
Table 10 summarises the movement in the number of ordinary shares in the Company and the number of performance rights held during
the financial year by each Executive KMP including their related parties. The table sets out the number of ordinary shares in the Company
acquired by Executive KMP during the financial year on vesting of performance rights (see also Table 12) and on granting of restricted
shares (see also Table 11).
Table 10: Movement in equity interests held by Executive KMP and their related parties(1)
Type of equity
Anthony Heraghty
Ordinary shares
Performance rights(4) (5)
Paul Bradshaw
Ordinary shares
Performance rights(4) (5)
David Burns
Ordinary shares
Performance rights(4) (5)
Cathy Seaholme(6)
Ordinary shares
Performance rights(4) (5)
Benjamin Ward
Ordinary shares
Performance rights(4) (5)
Gary Williams
Ordinary shares
Former KMP
Alex Brandon
Performance rights(4) (5)
Ordinary shares
Performance rights(4) (5)
Held at
27 June
2021(2)
88,322
400,548
5,546
131,271
70,583
197,570
-
-
13,509
144,844
21,533
144,844
2,229
57,273
Restricted
shares granted
Performance
rights vested
Performance
rights lapsed
(Sales)/
Purchases
Held at
2 July 2022(3)
23,573
-
13,484
-
16,118
-
-
-
16,561
-
16,201
-
3,562
-
66,240
(66,240)
-
-
32,803
(32,803)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(5,414)
(19,034)
-
-
-
(21,190)
-
-
-
10,277
-
-
-
-
-
159,101
334,308
19,030
131,271
98,314
164,767
-
-
40,347
144,844
37,734
144,844
5,791
51,859
Includes the Executive KMP's close family members or any entity they or their close family members control, jointly control or significantly influence.
(1)
(2) Or date of appointment if later. Ms Seaholme was appointed as an Executive KMP on 25 October 2021.
(3) Or date of ceasing to be a KMP if earlier. Mr Brandon ceased being an Executive KMP on 24 October 2021.
(4)
There were no grants of performance rights made to Executive KMP in FY22. The grant made to Executive KMP in FY21 was an award for the two financial years FY21 and FY22 and is
described in more detail in Section 6.
There are no performance rights at the end of the reporting period which are vested and unexercised.
(5)
(6) Ms Seaholme does not currently hold any equity interests in the Company.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
61
61
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 2 JULY 2022
RESTRICTED SHARES HELD BY EXECUTIVE KMP
Table 11 summarises the movement in the number of restricted shares held during the financial year by Executive KMP including their
related parties.
The proportion of FY22 STI achieved (per cent of the maximum achievable), and the proportion forfeited as a result of not meeting
performance hurdles is set out by individual in Table 4 and was similarly disclosed in previous reports for earlier Deferred STI grants. As set
out in Table 14, FY22 STI awards are delivered as 70 per cent cash and 30 per cent deferral to equity, with restrictions lifting on 50 per cent
of the resulting grant in August 2023 and 50 per cent in August 2024.
As disclosed in the 2020 Remuneration Report, in relation to FY20 performance the Board determined that a portion of the FY20 STI was
forgone and a portion deferred for 12 months into restricted shares, for which all restrictions lifted on the whole award in August 2021.
The fair value of restricted shares is the market value at the grant date. For the restricted shares granted in FY20 (i.e. both the discretionary
deferral of FY20 STI and the FY20 Deferred STI the accounting fair value per share at grant was the weighted average price at which the
Company’s shares are traded on the ASX in the five days following the release of the Group’s financial results in August 2020 ($8.92). The
fair value at grant of the FY21 Deferred STI was $12.53.
Table 11: Summary of Executive KMP granted, vested or lapsed restricted shares
Granted
in 2022
Vested in
2022(1)
%
vested
Granted
but not
vested
2 July
2022(3)
$ value of
restricted
shares
granted in
the year(4)
Lapsed or
forfeited
in 2022(2)
Grant
date
Vesting dates
Sep-20
Sep-20
Sep-21
Aug-21
Aug-21, Aug-22
Aug-22, Aug-23
Sep-20
Sep-20
Sep-21
Aug-21
Aug-21, Aug-22
Aug-22, Aug-23
Sep-20
Sep-20
Sep-21
Aug-21
Aug-21, Aug-22
Aug-22, Aug-23
Sep-20
Sep-20
Sep-21
Sep-20
Sep-20
Sep-21
Aug-21
Aug-21, Aug-22
Aug-22, Aug-23
Aug-21
Aug-21, Aug-22
Aug-22, Aug-23
Granted
but not
vested
26 June
2021
5,184
16,900
-
1,567
3,979
-
3,629
11,898
-
3,339
10,170
-
3,629
10,947
-
-
-
23,573
-
-
13,484
-
-
16,118
-
-
16,561
-
-
16,201
(5,184)
(8,450)
-
(1,567)
(1,989)
-
(3,629)
(5,949)
-
(3,339)
(5,085)
-
(3,629)
(5,473)
-
100%
50%
-
100%
50%
-
100%
50%
-
100%
50%
-
100%
50%
-
Sep-20
Sep-20
Sep-21
Aug-21
Aug-21, Aug-22
Aug-22, Aug-23
1,036
1,193
-
-
-
3,562
(1,036)
(596)
-
100%
50%
-
Anthony Heraghty
FY20 Deferred STI(5)
FY20 Deferred STI
FY21 Deferred STI
Paul Bradshaw
FY20 Deferred STI(5)
FY20 Deferred STI
FY21 Deferred STI
David Burns
FY20 Deferred STI(5)
FY20 Deferred STI
FY21 Deferred STI
Benjamin Ward
FY20 Deferred STI(5)
FY20 Deferred STI
FY21 Deferred STI
Gary Williams
FY20 Deferred STI(5)
FY20 Deferred STI
FY21 Deferred STI
Former KMP
Alex Brandon
FY20 Deferred STI(5)
FY20 Deferred STI
FY21 Deferred STI
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,450
23,573
-
1,990
13,484
-
5,949
16,118
-
5,085
16,561
-
5,474
16,201
-
597
3,562
n/a
n/a
295,374
n/a
n/a
168,960
n/a
n/a
201,961
n/a
n/a
207,512
n/a
n/a
203,011
n/a
n/a
43,336
(1) Vesting of restricted shares refers to restrictions being lifted.
(2) No restricted shares lapsed or were forfeited in the reporting period therefore percentage of lapsed or forfeited is nil.
(3) Or date of ceasing to be a KMP if earlier. Mr Brandon ceased being an Executive KMP on 24 October 2021.
(4)
The value of restricted shares granted in the year represents the value of the deferred portion of the STI achieved in the prior year. Full details of the STI outcomes for all prior year awards
to KMP are included in the remuneration report for the relevant year. The maximum potential outcomes for unvested awards are subject to the Group share price at time of vesting.
(5) As disclosed in the FY20 Remuneration Report, 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 all restrictions lifted on the whole award on 19 August 2021.
(6) Ms Seaholme has not received any restricted shares.
61
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 2 JULY 2022
REMUNERATION REPORT
(AUDITED)
RESTRICTED SHARES HELD BY EXECUTIVE KMP
PERFORMANCE RIGHTS HELD BY EXECUTIVE KMP
62
62
REPORTING PERIOD
ENDED 2 JULY 2022
Table 12 summarises the movement in the number of performance rights held during the financial year by each Executive KMP including
their related parties. The grant made in FY21 was an award for two financial years FY21 and FY22 and is described in more detail in Section
6. There were no grants to Executive KMP in FY22.
Table 12: Summary of Executive KMP granted, vested or lapsed performance rights
Grant
date(1)
Vesting dates
Granted
but not
vested
26 June
2021
Granted
in 2022(2)
Vested in
2022
%
vested(3)
Lapsed
or
forfeited
in 2022
Granted
but not
vested
2 July
2022(4)
$ value of
performance
rights
granted in
year(2) (5)
Sep-16
Sep-17
Sep-18
Oct-19
Sep-19
Nov-20
Sep-19
Nov-20
Sep-16
Sep-17
Sep-18
Sep-19
Nov-20
Sep-19
Nov-20
Sep-19
Nov-20
Anthony Heraghty
FY17
FY18
FY19
FY20(6)
FY20 (7)
FY21(7)
Paul Bradshaw
FY20 (7)
FY21(7)
David Burns
FY17
FY18
FY19
FY20 (7)
FY21(7)
Benjamin Ward
FY20 (7)
FY21(7)
Gary Williams
FY20 (7)
FY21(7)
Former KMP
Alex Brandon
FY21(7)
Nov-20
Sep-19, Sep-20, Sep-21
Sep-20, Sep-21, Sep-22
Sep-21, Sep-22, Sep-23
Feb-22, Feb-23, Feb-24
Sep-22, Sep-23
Nov-22, Nov-23, Nov-24
8,810
11,399
50,200
53,262
86,294
190,583
Sep-22, Sep-23
Nov-22, Nov-23, Nov-24
40,913
90,358
Sep-19, Sep-20, Sep-21
Sep-20, Sep-21, Sep-22
Sep-21, Sep-22, Sep-23
Sep-22, Sep-23
Nov-22, Nov-23, Nov-24
5,930
9,740
44,006
44,060
93,834
Sep-22, Sep-23
Nov-22, Nov-23, Nov-24
44,060
100,784
Sep-22, Sep-23
44,060
Nov-22, Nov-23, Nov-24
100,784
Nov-22, Nov-23, Nov-24
57,273
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(8,810)
(5,699)
(25,100)
(26,631)
-
-
-
-
(5,930)
(4,870)
(22,003)
-
-
-
-
-
-
-
100%
50%
50%
50%
-
-
-
-
100%
50%
50%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,700
25,100
26,631
86,294
190,583
40,913
90,358
-
4,870
22,003
44,060
93,834
44,060
100,784
44,060
100,784
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
-
(5,414) (8)
51,859
n/a
Table 11 summarises the movement in the number of restricted shares held during the financial year by Executive KMP including their
related parties.
The proportion of FY22 STI achieved (per cent of the maximum achievable), and the proportion forfeited as a result of not meeting
performance hurdles is set out by individual in Table 4 and was similarly disclosed in previous reports for earlier Deferred STI grants. As set
out in Table 14, FY22 STI awards are delivered as 70 per cent cash and 30 per cent deferral to equity, with restrictions lifting on 50 per cent
of the resulting grant in August 2023 and 50 per cent in August 2024.
As disclosed in the 2020 Remuneration Report, in relation to FY20 performance the Board determined that a portion of the FY20 STI was
forgone and a portion deferred for 12 months into restricted shares, for which all restrictions lifted on the whole award in August 2021.
The fair value of restricted shares is the market value at the grant date. For the restricted shares granted in FY20 (i.e. both the discretionary
deferral of FY20 STI and the FY20 Deferred STI the accounting fair value per share at grant was the weighted average price at which the
Company’s shares are traded on the ASX in the five days following the release of the Group’s financial results in August 2020 ($8.92). The
fair value at grant of the FY21 Deferred STI was $12.53.
Table 11: Summary of Executive KMP granted, vested or lapsed restricted shares
Grant
date
Vesting dates
Granted
in 2022
Vested in
2022(1)
%
vested
Granted
but not
vested
26 June
2021
Granted
but not
vested
2 July
2022(3)
$ value of
restricted
shares
granted in
the year(4)
Lapsed or
forfeited
in 2022(2)
Anthony Heraghty
FY20 Deferred STI(5)
FY20 Deferred STI
FY21 Deferred STI
Paul Bradshaw
FY20 Deferred STI(5)
FY20 Deferred STI
FY21 Deferred STI
David Burns
FY20 Deferred STI(5)
FY20 Deferred STI
FY21 Deferred STI
Benjamin Ward
FY20 Deferred STI(5)
FY20 Deferred STI
FY21 Deferred STI
Gary Williams
FY20 Deferred STI(5)
FY20 Deferred STI
FY21 Deferred STI
Former KMP
Alex Brandon
Sep-20
Sep-20
Sep-21
Aug-21
Aug-21, Aug-22
Aug-22, Aug-23
Sep-20
Sep-20
Sep-21
Aug-21
Aug-21, Aug-22
Aug-22, Aug-23
Sep-20
Sep-20
Sep-21
Aug-21
Aug-21, Aug-22
Aug-22, Aug-23
Sep-20
Sep-20
Sep-21
Sep-20
Sep-20
Sep-21
Aug-21
Aug-21, Aug-22
Aug-22, Aug-23
Aug-21
Aug-21, Aug-22
Aug-22, Aug-23
5,184
16,900
1,567
3,979
3,629
11,898
3,339
10,170
3,629
10,947
-
23,573
-
13,484
-
16,118
-
16,561
-
16,201
-
-
-
-
-
-
-
-
-
-
-
-
(5,184)
(8,450)
100%
50%
(1,567)
(1,989)
100%
50%
(3,629)
(5,949)
100%
50%
(3,339)
(5,085)
100%
50%
(3,629)
(5,473)
100%
50%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,450
23,573
1,990
13,484
5,949
16,118
5,085
16,561
5,474
16,201
-
597
3,562
n/a
n/a
295,374
n/a
n/a
168,960
n/a
n/a
201,961
n/a
n/a
207,512
n/a
n/a
203,011
n/a
n/a
43,336
FY20 Deferred STI(5)
FY20 Deferred STI
FY21 Deferred STI
Sep-20
Sep-20
Sep-21
Aug-21
Aug-21, Aug-22
Aug-22, Aug-23
1,036
1,193
-
3,562
(1,036)
(596)
100%
50%
-
(1) Vesting of restricted shares refers to restrictions being lifted.
(2) No restricted shares lapsed or were forfeited in the reporting period therefore percentage of lapsed or forfeited is nil.
(3) Or date of ceasing to be a KMP if earlier. Mr Brandon ceased being an Executive KMP on 24 October 2021.
(4)
The value of restricted shares granted in the year represents the value of the deferred portion of the STI achieved in the prior year. Full details of the STI outcomes for all prior year awards
to KMP are included in the remuneration report for the relevant year. The maximum potential outcomes for unvested awards are subject to the Group share price at time of vesting.
(5) As disclosed in the FY20 Remuneration Report, 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 all restrictions lifted on the whole award on 19 August 2021.
(6) Ms Seaholme has not received any restricted shares.
(6)
The minimum total value of grants for future financial years is nil if relevant vesting conditions are not met. An estimate of the maximum possible total value in future financial years is the
fair value at grant date multiplied by the number of performance rights awarded.
As approved at the 2019 AGM Mr Heraghty received 53,262 performance rights in relation to a one-off co-investment grant. Fifty per cent of the co-investment grant vested in February
2022, and the remainder will vest in two equal portions in February 2023 and in February 2024.
These performance rights will partially vest with the announcement of the FY22 results.
Forfeited as a result of service conditions not being met. Percentage forfeited totals 9.5 per cent of awards held at the beginning of the period.
All vested performance rights are exercisable. There are no performance rights at the end of the reporting period which are vested and unexercised.
(7)
(8)
(9)
(10) Ms Seaholme has not received any performance rights.
(1)
(2)
Refer to Table 13 for fair value assumptions associated with performance rights.
There were no grants of performance rights made to Executive KMP in FY22. The grant made to Executive KMP in FY21 was an award for the two financial years FY21 and FY22 and is
described in more detail in Section 6.
For details of the proportion of LTI vesting and the performance outcomes of each grant refer to Table 5.
Performance rights are expensed over their vesting period in line with the vesting conditions. Refer to Section 6 for details of these vesting
conditions.
(3)
(4) Or date of ceasing to be a KMP if earlier. Mr Brandon ceased being an Executive KMP on 24 October 2021.
(5)
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
63
63
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 2 JULY 2022
Table 13: Summary of performance rights grants
Grant
Grant date
VWAP used for
grant
Fair value per
performance right
at grant date
FY17
FY18
FY19
FY20
FY21(2)
FY22(2)
1 September 2016
1 September 2017
1 September 2018
1 September 2019
1 November 2020
$10.51
$8.02
$9.51
$9.85
$8.92
Final vesting date(4)
1 September 2021
1 September 2022
1 September 2023
$7.99
$6.38
$7.65
$7.72(1)
1 September 2023
$9.47(3)
1 November 2024
3 November 2021
$12.53
$11.31
1 September 2024
Total
Number of
performance rights at 2
July 2022
11,308
46,323
158,478
598,765
1,067,355
176,250
2,058,479
(1)
(2)
(3)
(4)
The performance rights value for the 1 September 2019 grant was $7.72, with the exception of Mr 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 one-off co-investment grant vests over three financial years, with 50
per cent of the performance rights vesting in February 2022 and the remainder vesting in equal portions in February 2023 and February 2024.
The grant for FY21 was inclusive of the FY22 opportunity for Executive KMP. There was no grant to KMP in FY22. Grants were made to other selected employees.
The performance rights granted in FY21 were valued for the purpose of the financial statements using a fair value of $9.47, which is based on the share price at the accounting grant date of
30 December 2020. The only exception was for performance rights for Mr Brandon which were granted at a later date and had a fair value of $10.15.
Refer to Section 6 for details of vesting conditions. Performance rights expire no later than seven years from grant date.
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 an Executive KMP, or within five years of the policy commencing. The requirement is
summarised below:
Group MD and CEO
Other KMP
* Before taxation and superannuation
150% x base salary*
100% x base salary*
During FY22, the Board approved amendments to the Company’s Minimum Securities Holding Policy to simplify the calculation of the
number of securities held. Any unvested equity (such as unvested performance rights) is counted towards the target in circumstances
where the equity is no longer subject to performance hurdles.
Under the revised policy, the minimum securities holding target must be achieved by an Executive KMP within five years of appointment
(or, where applicable, within a five-year transition period set under the revised policy).
The Minimum Securities Holding Policy is available in the Corporate Governance section of the Company's website.
As at the date of this report, Mr Heraghty and Mr Burns have met the Minimum Securities Holding Requirement. Other Executive KMP
have been with the Company less than the five years in which they may build their holding. In September 2022, following testing of FY20
and FY21 LTI grants, and the grant of FY22 deferred STI, all but Ms Seaholme will have met the requirement, based on the closing share
price on 2 July 2022.
SHARES ISSUED ON VESTING OR EXERCISE OF PEFORMANCE RIGHTS
During the reporting period, a total of 293,907 performance rights vested. Entitlements to receive ordinary shares upon the vesting of
those performance rights were fulfilled through on-market share purchases. More detail of the relevant tranches vesting in FY22 for KMP
is provided in Table 12.
There were no new ordinary shares of the Company issued on the vesting of performance rights during FY22, or since the end of the
financial year and up to the date of this report.
63
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REPORTING PERIOD
ENDED 2 JULY 2022
REMUNERATION REPORT
(AUDITED)
64
64
REPORTING PERIOD
ENDED 2 JULY 2022
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 Company’s shareholders. The target pay
mix is set out in Table 8.
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 an Executive KMP, or within five years of the policy commencing. The requirement is
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
Strategic Intent
Fixed Pay
Short-Term Incentive (STI)
Long-Term Incentive (LTI)
To reflect the Executive’s role,
duties, responsibilities, strategic
value, experience and skills.
Quantum is set using external
market-based data of similarly
sized S&P/ ASX200 companies. The
position against market increases
over time to reflect performance in
the role.
To achieve Board approved targets,
in support of the execution of the
Group’s strategy.
To reward Executive KMP for
sustainable long-term growth
aligned to shareholders’ interests.
Deferral of STI into equity extends
the timeframe for receipt of
variable reward outcomes.
Total Target Reward & Remuneration Mix
Market Positioning
Reward quantum is set at a level to attract, motivate and retain talented executives. Compared to relevant
market-based data (similarly sized S&P/ ASX200 companies), fixed pay is positioned at the median, increasing to
the 75th percentile for sustained high performance. Total Target Reward is positioned at the 75th percentile where
there is sustained high performance taking into consideration expertise and performance in the role. The pay mix
philosophy favours “at-risk” pay over fixed pay, while remaining broadly consistent with the market.
REMUNERATION REPORT
(AUDITED)
Table 13: Summary of performance rights grants
FY17
FY18
FY19
FY20
FY21(2)
FY22(2)
grant
$10.51
$8.02
$9.51
$9.85
$8.92
1 September 2016
1 September 2017
1 September 2018
1 September 2019
1 November 2020
Total
Grant
Grant date
at grant date
Final vesting date(4)
July 2022
VWAP used for
performance right
Fair value per
Number of
performance rights at 2
3 November 2021
$12.53
$11.31
1 September 2024
$9.47(3)
1 November 2024
$7.99
$6.38
$7.65
1 September 2021
1 September 2022
1 September 2023
$7.72(1)
1 September 2023
11,308
46,323
158,478
598,765
1,067,355
176,250
2,058,479
(1)
The performance rights value for the 1 September 2019 grant was $7.72, with the exception of Mr 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 one-off co-investment grant vests over three financial years, with 50
per cent of the performance rights vesting in February 2022 and the remainder vesting in equal portions in February 2023 and February 2024.
The grant for FY21 was inclusive of the FY22 opportunity for Executive KMP. There was no grant to KMP in FY22. Grants were made to other selected employees.
The performance rights granted in FY21 were valued for the purpose of the financial statements using a fair value of $9.47, which is based on the share price at the accounting grant date of
30 December 2020. The only exception was for performance rights for Mr Brandon which were granted at a later date and had a fair value of $10.15.
Refer to Section 6 for details of vesting conditions. Performance rights expire no later than seven years from grant date.
(2)
(3)
(4)
MINIMUM SECURITIES HOLDING POLICY
summarised below:
Group MD and CEO
Other KMP
* Before taxation and superannuation
150% x base salary*
100% x base salary*
During FY22, the Board approved amendments to the Company’s Minimum Securities Holding Policy to simplify the calculation of the
number of securities held. Any unvested equity (such as unvested performance rights) is counted towards the target in circumstances
where the equity is no longer subject to performance hurdles.
Under the revised policy, the minimum securities holding target must be achieved by an Executive KMP within five years of appointment
(or, where applicable, within a five-year transition period set under the revised policy).
The Minimum Securities Holding Policy is available in the Corporate Governance section of the Company's website.
As at the date of this report, Mr Heraghty and Mr Burns have met the Minimum Securities Holding Requirement. Other Executive KMP
have been with the Company less than the five years in which they may build their holding. In September 2022, following testing of FY20
and FY21 LTI grants, and the grant of FY22 deferred STI, all but Ms Seaholme will have met the requirement, based on the closing share
price on 2 July 2022.
SHARES ISSUED ON VESTING OR EXERCISE OF PEFORMANCE RIGHTS
During the reporting period, a total of 293,907 performance rights vested. Entitlements to receive ordinary shares upon the vesting of
those performance rights were fulfilled through on-market share purchases. More detail of the relevant tranches vesting in FY22 for KMP
is provided in Table 12.
financial year and up to the date of this report.
There were no new ordinary shares of the Company issued on the vesting of performance rights during FY22, or since the end of the
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
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SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
REMUNERATION BENCHMARKS
REPORTING PERIOD
ENDED 2 JULY 2022
As an input to determining remuneration quantum for Executive KMP, the Board references benchmarks that are representative of the size
and scope of the Group and the specific accountabilities of the roles using multiple comparator groups. The comparator groups being:
companies within 50 per cent to 200 per cent of the Group’s 12-month average market capitalisation;
companies in the ASX200 Global Industry Classification Standard Consumer Discretionary sector; and
for Brand MDs, ASX200 Head of Business Units with similar revenue accountability.
The Board considers this combination appropriate to assess the market for similar-sized roles within a sufficiently sized market sample
across broader industry, with a view to any sector specific insights.
The benchmarking approach allows the Board to consider a broad range of comparable roles in companies or, where relevant, business
units, of similar size and scale, as well as industry peers. This dual lens provides both a large enough sample to form a view on remuneration
levels across the broader market for talent as well as sector specific insights. Market data provides one input to the Board’s decision-
making on remuneration levels. The Board also takes account of performance, internal relativities and the economic environment and
context.
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 FY22 STI scheme for the 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 14.
Deferral of a portion of STI into equity was introduced in FY20 using restricted shares to meet the deferred STI component. Using equity
to meet a portion of STI further aligns executive interests to those of shareholders. Restricted shares are delivered to Executive KMP and
other eligible executives under and subject to the rules of the Super Retail Group Employee Equity Incentive Plan (the EIP). The EIP rules
are available in the Corporate Governance section of the Company’s website.
Table 14: Key aspects of the FY22 STI scheme
Scheme
STI awards are made under the Super Retail Group Short-Term Incentive scheme (the STI
scheme).
Participation
The scheme allows for the invitation to participate to Executive KMP and other executives.
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 financial year ending 2 July 2022.
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.
65
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REPORTING PERIOD
ENDED 2 JULY 2022
REMUNERATION REPORT
(AUDITED)
66
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REPORTING PERIOD
ENDED 2 JULY 2022
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 FY22, 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)
Performance Goals
Financial
Financial
Non-Financial
Business
Improvement
Customer
People and Risk
50
20
20
10
Normalised NPBT
Working Capital Efficiency
Delivery of Strategic Portfolio
Active Customer Revenue
Net Promotor Score (NPS)
Total Recordable Injuries
Risk Management
FY22 Target, Maximum
(Stretch) Opportunity, and
Minimum
The reward target for STI opportunity is set with reference to market data, and the 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.
Payment frequency and
payment vehicle
FY22 STI awards are delivered as 70 per cent cash and 30 per cent deferral to equity.
STI awards are paid annually. Payments are made following the end of the performance period,
generally in August or September. Restrictions on 50 per cent of the FY22 deferred STI will lift in
August 2023 and the restrictions on 50 per cent will lift in August 2024.
Restricted shares
A restricted share is a fully paid ordinary share in the Company awarded to and held by a STI scheme
participant subject to the terms of grant and the EIP rules, which include restrictions on disposal,
vesting and forfeiture rules.
A restricted share may not be traded until all restrictions are lifted. No amount is payable by the
participant on the grant or vesting of a restricted share. Participants are entitled to receive dividends
on, and exercise the voting rights of, the restricted shares they hold.
Principles for Board
discretion on short-term
incentive plans
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:
o 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;
o whether performance measures capture the impacts of unforeseen events on the
business and creation of sustainable shareholder value; and
o
the impacts of a team member’s actions on the outcome as assessed against the
performance metric.
REMUNERATION REPORT
(AUDITED)
REMUNERATION BENCHMARKS
As an input to determining remuneration quantum for Executive KMP, the Board references benchmarks that are representative of the size
and scope of the Group and the specific accountabilities of the roles using multiple comparator groups. The comparator groups being:
companies within 50 per cent to 200 per cent of the Group’s 12-month average market capitalisation;
companies in the ASX200 Global Industry Classification Standard Consumer Discretionary sector; and
for Brand MDs, ASX200 Head of Business Units with similar revenue accountability.
The Board considers this combination appropriate to assess the market for similar-sized roles within a sufficiently sized market sample
across broader industry, with a view to any sector specific insights.
The benchmarking approach allows the Board to consider a broad range of comparable roles in companies or, where relevant, business
units, of similar size and scale, as well as industry peers. This dual lens provides both a large enough sample to form a view on remuneration
levels across the broader market for talent as well as sector specific insights. Market data provides one input to the Board’s decision-
making on remuneration levels. The Board also takes account of performance, internal relativities and the economic environment and
context.
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
performance, outlined in Table 14.
Consistent with prior years, the FY22 STI scheme for the 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
Deferral of a portion of STI into equity was introduced in FY20 using restricted shares to meet the deferred STI component. Using equity
to meet a portion of STI further aligns executive interests to those of shareholders. Restricted shares are delivered to Executive KMP and
other eligible executives under and subject to the rules of the Super Retail Group Employee Equity Incentive Plan (the EIP). The EIP rules
are available in the Corporate Governance section of the Company’s website.
Table 14: Key aspects of the FY22 STI scheme
Scheme
STI awards are made under the Super Retail Group Short-Term Incentive scheme (the STI
scheme).
Participation
The scheme allows for the invitation to participate to Executive KMP and other executives.
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 financial year ending 2 July 2022.
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
67
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SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 2 JULY 2022
The HRRC makes recommendations to the Board in relation to the design of the STI scheme, KPI and target setting. The Board has ultimate
approval and discretion over the outcomes.
The treatment on cessation of employment and change of control are common to all plans under the EIP and are outlined in Table 18.
LONG-TERM INCENTIVE REWARD
The Group’s remuneration structure aims to align long-term incentives (LTI) 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 EPS and normalised 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 EPS over three financial
years and normalised ROC average over three financial years. In the context of the COVID-19 pandemic and the challenges of forecasting
its impact on the business, the Board established a two-year Medium Term business Plan (MTBP), with targets for normalised ROC and
normalised 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. Grants from FY23 will be assessed over a three-year performance period.
Table 15: Key aspects of the LTI plan for the FY20 grant
Plan
Participation
LTI instrument
Allocation methodology
The Company's Long-Term Incentive Plan (the LTI plan) provides awards in the form of performance
rights which are granted under the rules of the EIP.
The plan allows for the annual grant of performance rights to Executive KMP and other executives.
The grant for FY21 includes the FY22 opportunity for Executive KMP. There was no grant in FY22 for
Executive KMP. The FY21 grant is outlined in Table 17.
Performance rights are granted by the Company for nil consideration. A performance right represents
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 ending 2 July 2022.
Performance hurdles
Equity grants to Executive KMP and other executives are in two equal tranches, 50 per cent relating to
the compound annual growth rate in normalised EPS over the performance period and 50 per cent
relating to normalised ROC averaged over the performance period.
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SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 2 JULY 2022
REMUNERATION REPORT
(AUDITED)
68
68
REPORTING PERIOD
ENDED 2 JULY 2022
The HRRC makes recommendations to the Board in relation to the design of the STI scheme, KPI and target setting. The Board has ultimate
approval and discretion over the outcomes.
The treatment on cessation of employment and change of control are common to all plans under the EIP and are outlined in Table 18.
LONG-TERM INCENTIVE REWARD
The Group’s remuneration structure aims to align long-term incentives (LTI) 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 EPS and normalised 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 EPS over three financial
years and normalised ROC average over three financial years. In the context of the COVID-19 pandemic and the challenges of forecasting
its impact on the business, the Board established a two-year Medium Term business Plan (MTBP), with targets for normalised ROC and
normalised 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. Grants from FY23 will be assessed over a three-year performance period.
Table 15: Key aspects of the LTI plan for the FY20 grant
Plan
The Company's Long-Term Incentive Plan (the LTI plan) provides awards in the form of performance
rights which are granted under the rules of the EIP.
Participation
The plan allows for the annual grant of performance rights to Executive KMP and other executives.
The grant for FY21 includes the FY22 opportunity for Executive KMP. There was no grant in FY22 for
Executive KMP. The FY21 grant is outlined in Table 17.
LTI instrument
Performance rights are granted by the Company for nil consideration. A performance right represents
a right to receive a fully paid ordinary share at no cost if service-based and performance-based vesting
conditions are met.
Allocation methodology
The number of performance rights granted to each Executive KMP is determined in accordance with
the Executive Remuneration Framework and 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 ending 2 July 2022.
Performance hurdles
Equity grants to Executive KMP and other executives are in two equal tranches, 50 per cent relating to
the compound annual growth rate in normalised EPS over the performance period and 50 per cent
relating to normalised ROC averaged over the performance period.
Vesting schedule
The performance conditions for performance rights granted in FY20 were:
Measures
Normalised EPS compound average
growth rate over the performance
period
Normalised ROC 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 16.
Significant items
The Board may adjust for any significant events or items to give financial statement users additional
insight into financial performance. These adjustments are for events or items considered unusual by
their nature or size and/or not being in the ordinary course of business.
Vesting period
If the performance conditions are satisfied within the performance period, the performance rights
will vest over 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.
Testing and time restrictions 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.
Dividends and voting rights
Performance rights do not carry voting or dividend rights.
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).
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
69
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SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 2 JULY 2022
The HRRC makes recommendations to the Board in relation to the design of the LTI plan, metrics and target setting. The Board has ultimate
approval and discretion over the outcomes.
The treatment on cessation of employment and change of control are common to all plans under the EIP and are outlined in Table 18.
Table 16: Threshold, Target and Maximum for LTI Plans from FY17 to FY20
Performance Condition for
Normalised EPS compound average growth over the
performance period
Performance Condition for
Normalised ROC
average over the performance period
Threshold (zero
below this, 30% at
this point)
Midpoint (50%
reward achieved)
Maximum
(100%)
Threshold (zero
below this, 30% at
this point)
Midpoint (50% reward
achieved)
Maximum
(100%)
N/A
N/A
8%
8%
10%
10%
10%
10%
15%
15%
13%
13%
10%
10%
10%
10%
12%
12%
12%
12%
15%
15%
15%
15%
Grant
FY17
FY18
FY19
FY20
Table 17: Key aspects of the LTI plan modifications for the FY21 grant
Financial years applicable
The grant for FY21 includes both the FY21 and the FY22 opportunity for Executive KMP. There was
no grant in FY22 made to Executive KMP.
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 ordinary shares of the
Company 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 Group’s trading update
announcement which was lodged with the ASX 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, the first tranche is measured against normalised
NPBT over the performance period. The remaining tranche is measured against normalised ROC
averaged over the performance period.
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.
Table 16: Threshold, Target and Maximum for LTI Plans from FY17 to FY20
Performance Condition for
Normalised EPS compound average growth over the
performance period
Performance Condition for
Normalised ROC
average over the performance period
Threshold (zero
Threshold (zero
below this, 30% at
Midpoint (50%
below this, 30% at
Midpoint (50% reward
Maximum
this point)
reward achieved)
(100%)
this point)
achieved)
Maximum
(100%)
N/A
N/A
8%
8%
10%
10%
10%
10%
15%
15%
13%
13%
10%
10%
10%
10%
12%
12%
12%
12%
15%
15%
15%
15%
Grant
FY17
FY18
FY19
FY20
Table 17: Key aspects of the LTI plan modifications for the FY21 grant
Financial years applicable
The grant for FY21 includes both the FY21 and the FY22 opportunity for Executive KMP. There was
no grant in FY22 made to Executive KMP.
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 ordinary shares of the
Company 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 Group’s trading update
announcement which was lodged with the ASX 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, the first tranche is measured against normalised
NPBT over the performance period. The remaining tranche is measured against normalised ROC
averaged over the performance period.
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.
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SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 2 JULY 2022
REMUNERATION REPORT
(AUDITED)
70
70
REPORTING PERIOD
ENDED 2 JULY 2022
The HRRC makes recommendations to the Board in relation to the design of the LTI plan, metrics and target setting. The Board has ultimate
approval and discretion over the outcomes.
Vesting schedule
The treatment on cessation of employment and change of control are common to all plans under the EIP and are outlined in Table 18.
a) Normalised NPBT (50 per cent of the performance rights)
The percentage of performance rights attributed to the normalised NPBT hurdle that is available to
vest, if any, will be determined with reference to the Company’s normalised NPBT performance
over the performance period FY21 and FY22 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 $413.8 million
At $413.8 million
Between $413.8 million and
$517.3 million
At maximum performance
($517.3 million in the two
financial years ending on 2 July
2022)
0%
50%
On a pro-rata basis
100%
b) Normalised ROC (50 per cent of the performance rights)
The percentage of performance rights attributed to the normalised ROC hurdle that is available to
vest, if any, will be determined with reference to the Company’s normalised ROC performance
over the performance period FY21 and FY22 as set out in the table below.
ROC
Below 12%
At 12%
Between 12% and 15.9%
At 15.9%
Percentage of Performance Rights attributed to ROC hurdle
that become ‘Qualified Performance Rights’ and are
available to vest
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:
One third of performance rights
One third of performance rights
One third 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.
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).
The treatment on cessation of employment and change of control are common to all plans under the EIP and are outlined in Table 18.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
71
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SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 2 JULY 2022
OTHER KEY TERMS OF THE EQUITY INCENTIVE PLAN RULES
The Super Retail Group Employee Equity Incentive Plan (EIP) Rules govern both the deferred STI scheme and the Long-Term Incentive Plan.
Table 18 outlines further key provisions under the EIP rules that apply to both restricted shares (deferred STI) and performance rights (LTI).
The EIP rules are available in the Corporate Governance section of the Company’s website.
Table 18: Key terms of the EIP rules
Prohibition on hedging
Claw back provisions
Treatment on cessation of
employment
The EIP rules specifically prohibit a participant from entering into any scheme, arrangement or
agreement (including options, securities lending, hedging or derivative products) under which the
participant may alter the economic benefit to be derived from any performance rights or restricted
shares, irrespective of future changes in the market price of ordinary shares of the Company. Where
a participant enters, or purports to enter, into any scheme, arrangement or agreement, the Board
may determine that the award immediately lapses or is forfeited (as the case may be).
The Board has a broad discretion under the EIP rules to determine any treatment in relation to
participants’ awards, both vested and unvested, as it sees fit, in certain circumstances such as fraud,
dishonesty, or breach of obligations (including, without limitation, a material misstatement of
financial information). Such treatment may include a decision by the Board to cause the lapse or
forfeiture of some or all of the participant's awards or, where shares allocated to the participant
under the EIP have been subsequently sold, require the participant to repay the net proceeds of
such a sale.
If a participant ceases to be an employee of the Group for any reason, the Board has a broad
discretion to determine that a different treatment applies in respect of any unvested awards. For
example, the Board could determine that a pro-rata number of the participant’s awards will vest at
the original time of vesting (subject to the satisfaction of original performance hurdles and any other
vesting conditions that are not service related).
Where the Board does not apply such discretion, some default treatments apply on cessation of
employment. For example, where an employee resigns or is terminated for cause (including gross
misconduct), their unvested rights will lapse immediately unless the Board determines otherwise. In
other situations, unvested performance rights may remain on foot and vest (or otherwise lapse) in
accordance with their terms.
Change of control provisions
Should a change of control event occur, the Board has discretion to determine how unvested
performance rights should be treated, having regard to factors such as the level of performance to
date, the length of time elapsed in the performance period and the circumstances of the change of
control. Where the Board does not exercise its discretion, there will be a pro-rated accelerated
vesting of unvested performance rights.
OTHER EQUITY
At the 2019 AGM, shareholders approved a one-off grant of performance rights to Group MD and CEO, Anthony Heraghty in the form of a
co-investment award on the condition that Mr Heraghty self-fund the acquisition of ordinary shares in the Company of an equivalent value.
The intent of this grant was to further align the Group MD and CEO’s interests with the interests of shareholders and to provide an
opportunity for Mr Heraghty to build his shareholding, and this was agreed in Mr Heraghty’s employment contract. Mr Heraghty satisfied
this condition in March 2019 and as such, the co-investment grant was made following receipt of shareholder approval at the 2019 AGM.
The performance rights vest on the third, fourth and fifth anniversaries of the date of the contract. The first tranche (50 per cent) of the
co-investment award vested in February 2022 as shown in Section 5. The remainder will vest in two equal portions in February 2023 and
February 2024.
Cathy Seaholme joined the Company as Managing Director - Macpac on 25 October 2021. Due to no LTI grant being made to Executive
KMP during FY22, Ms Seaholme’s initial terms included an incentive opportunity of NZ$341,000 based on the achievement of the Macpac
budget as assessed by the Board at the end of FY23. Under the incentive opportunity, 50 per cent will be payable in cash in September
2023, and the remainder in restricted shares on which restrictions will lift in two equal portions, 25 per cent in September 2023 and 25 per
cent in September 2024. The Board determined this was an appropriate performance-related mechanism to build share ownership in the
period before reward is received from her first LTI grant. The first LTI grant will be made in FY23 and will begin to vest in FY26 subject to
achievement of performance hurdles.
71
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 2 JULY 2022
REMUNERATION REPORT
(AUDITED)
72
72
REPORTING PERIOD
ENDED 2 JULY 2022
OTHER KEY TERMS OF THE EQUITY INCENTIVE PLAN RULES
TERMINATION ARRANGEMENTS
The Super Retail Group Employee Equity Incentive Plan (EIP) Rules govern both the deferred STI scheme and the Long-Term Incentive Plan.
Table 18 outlines further key provisions under the EIP rules that apply to both restricted shares (deferred STI) and performance rights (LTI).
The EIP rules are available in the Corporate Governance section of the Company’s website.
Table 18: Key terms of the EIP rules
Alex Brandon ceased being an Executive KMP on 24 October 2021. Upon his cessation as an employee of the Group, Mr Brandon received
a termination payment of NZ$403,899 (A$379,640). The Board, in its discretion, determined that Mr Brandon was a “good leaver” for the
purposes of the rules governing the Group's STI scheme and LTI plan. As a result, 51,859 performance rights remain on foot for the FY21
LTI grant in accordance with their original timeline and performance hurdles. Mr Brandon was also permitted to retain grants of deferred
STI, totalling 4,159 restricted shares, which will be held subject to their original time-based restrictions.
Prohibition on hedging
The EIP rules specifically prohibit a participant from entering into any scheme, arrangement or
SERVICE AGREEMENTS
Remuneration and other terms of employment for ongoing Executive KMP are formalised in service agreements. Each of these agreements
provide for, but not guarantee, participation in STI and LTI arrangements. All service agreements with Executive KMP may be terminated
by either party as shown in Table 19.
Claw back provisions
The Board has a broad discretion under the EIP rules to determine any treatment in relation to
Table 19: Key terms of Executive KMP Service Agreements
Name
Anthony Heraghty
Paul Bradshaw
David Burns
Cathy Seaholme
Benjamin Ward
Gary Williams
Former KMP
Alex Brandon
Term of
agreement
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Ceased as KMP
24 October 2021
(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
3 October 2018
25 October 2021
1 August 2019
2 April 2019
6 months
6 months
6 months
6 months
6 months
9 months
6 months
3 months
6 months
3 months
3 months
27 April 2015
25 November 2019
3 December 2012
25 October 2021
29 July 2019
2 April 2019
31 March 2018
6 months
6 months
31 March 2018
Service agreements do not provide for termination payments. However, service agreements specify the notice period required and note
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, the 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
Executives, including Executive KMP, are subject to post-employment restraints under their service agreements. Upon cessation of
employment for any reason, the employee must not compete with the Group’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
In addition to the EIP rules, the Company's Securities Trading Policy also prohibits designated persons (included KMP) and closely related
parties of KMP from hedging their equity-based awards that have not vested or remain subject to a holding lock.
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. No systemic issues regarding gender pay equity
were identified in the most recent review undertaken in the reporting period. In addition, the Group’s recruitment, performance and
reward processes are monitored to assist in delivering on our commitment to provide equitable, fair and consistent pay arrangements to
team members.
agreement (including options, securities lending, hedging or derivative products) under which the
participant may alter the economic benefit to be derived from any performance rights or restricted
shares, irrespective of future changes in the market price of ordinary shares of the Company. Where
a participant enters, or purports to enter, into any scheme, arrangement or agreement, the Board
may determine that the award immediately lapses or is forfeited (as the case may be).
participants’ awards, both vested and unvested, as it sees fit, in certain circumstances such as fraud,
dishonesty, or breach of obligations (including, without limitation, a material misstatement of
financial information). Such treatment may include a decision by the Board to cause the lapse or
forfeiture of some or all of the participant's awards or, where shares allocated to the participant
under the EIP have been subsequently sold, require the participant to repay the net proceeds of
such a sale.
Treatment on cessation of
If a participant ceases to be an employee of the Group for any reason, the Board has a broad
employment
discretion to determine that a different treatment applies in respect of any unvested awards. For
example, the Board could determine that a pro-rata number of the participant’s awards will vest at
the original time of vesting (subject to the satisfaction of original performance hurdles and any other
vesting conditions that are not service related).
Where the Board does not apply such discretion, some default treatments apply on cessation of
employment. For example, where an employee resigns or is terminated for cause (including gross
misconduct), their unvested rights will lapse immediately unless the Board determines otherwise. In
other situations, unvested performance rights may remain on foot and vest (or otherwise lapse) in
accordance with their terms.
Change of control provisions
Should a change of control event occur, the Board has discretion to determine how unvested
performance rights should be treated, having regard to factors such as the level of performance to
date, the length of time elapsed in the performance period and the circumstances of the change of
control. Where the Board does not exercise its discretion, there will be a pro-rated accelerated
vesting of unvested performance rights.
OTHER EQUITY
At the 2019 AGM, shareholders approved a one-off grant of performance rights to Group MD and CEO, Anthony Heraghty in the form of a
co-investment award on the condition that Mr Heraghty self-fund the acquisition of ordinary shares in the Company of an equivalent value.
The intent of this grant was to further align the Group MD and CEO’s interests with the interests of shareholders and to provide an
opportunity for Mr Heraghty to build his shareholding, and this was agreed in Mr Heraghty’s employment contract. Mr Heraghty satisfied
this condition in March 2019 and as such, the co-investment grant was made following receipt of shareholder approval at the 2019 AGM.
The performance rights vest on the third, fourth and fifth anniversaries of the date of the contract. The first tranche (50 per cent) of the
co-investment award vested in February 2022 as shown in Section 5. The remainder will vest in two equal portions in February 2023 and
February 2024.
Cathy Seaholme joined the Company as Managing Director - Macpac on 25 October 2021. Due to no LTI grant being made to Executive
KMP during FY22, Ms Seaholme’s initial terms included an incentive opportunity of NZ$341,000 based on the achievement of the Macpac
budget as assessed by the Board at the end of FY23. Under the incentive opportunity, 50 per cent will be payable in cash in September
2023, and the remainder in restricted shares on which restrictions will lift in two equal portions, 25 per cent in September 2023 and 25 per
cent in September 2024. The Board determined this was an appropriate performance-related mechanism to build share ownership in the
period before reward is received from her first LTI grant. The first LTI grant will be made in FY23 and will begin to vest in FY26 subject to
achievement of performance hurdles.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
73
73
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 2 JULY 2022
SECTION 7
Non-Executive Director Remuneration Arrangements
NON-EXECUTIVE DIRECTOR REMUNERATION STRUCTURE
The Company’s remuneration strategy is designed to attract and retain experienced, qualified Non-Executive Directors and to remunerate
appropriately to reflect the responsibilities of the position. Non-Executive Directors receive fees to recognise their contribution to the work
of the Board and the associated Committees on which they serve.
The HRRC annually reviews the level of fees payable to Non-Executive Directors. 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 ARC and the HRRC.
This reflects the additional time commitment required by the Chairs and members of these Committees.
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 under applicable legislation.
Non-Executive Directors may opt each year to receive a proportion of their remuneration in ordinary shares of the Company, which would
be acquired on market.
NON-EXECUTIVE DIRECTOR FEES
At the 2020 AGM, shareholders approved a maximum fee pool of $1.5 million a year. The fees paid to Non-Executive Directors are set out
in Table 20 and are annual fees, inclusive of superannuation, unless otherwise stated. The Board determined that an increase in base fees
was appropriate for FY22 in line with independent market data. The Board considered base and Committee fees for FY23 and made no
change from FY22.
Table 20: Non-Executive Director fees FY22 & FY23
Chair(1)
Members
Board
$360,000
$145,000
Audit and Risk
Committee
Human Resources and
Remuneration Committee
Nomination
Committee
$45,000
$15,000
$45,000
$15,000
Nil
Nil
(1) Committee fees are not paid to the Chair of the Board.
73
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 2 JULY 2022
REMUNERATION REPORT
(AUDITED)
74
74
REPORTING PERIOD
ENDED 2 JULY 2022
SECTION 7
Non-Executive Director Remuneration Arrangements
NON-EXECUTIVE DIRECTOR REMUNERATION STRUCTURE
The Company’s remuneration strategy is designed to attract and retain experienced, qualified Non-Executive Directors and to remunerate
appropriately to reflect the responsibilities of the position. Non-Executive Directors receive fees to recognise their contribution to the work
of the Board and the associated Committees on which they serve.
The HRRC annually reviews the level of fees payable to Non-Executive Directors. 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 ARC and the HRRC.
This reflects the additional time commitment required by the Chairs and members of these Committees.
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 under applicable legislation.
Non-Executive Directors may opt each year to receive a proportion of their remuneration in ordinary shares of the Company, which would
be acquired on market.
NON-EXECUTIVE DIRECTOR FEES
change from FY22.
Table 20: Non-Executive Director fees FY22 & FY23
At the 2020 AGM, shareholders approved a maximum fee pool of $1.5 million a year. The fees paid to Non-Executive Directors are set out
in Table 20 and are annual fees, inclusive of superannuation, unless otherwise stated. The Board determined that an increase in base fees
was appropriate for FY22 in line with independent market data. The Board considered base and Committee fees for FY23 and made no
Chair(1)
Members
Board
$360,000
$145,000
Audit and Risk
Committee
Human Resources and
Remuneration Committee
Nomination
Committee
$45,000
$15,000
$45,000
$15,000
Nil
Nil
(1) Committee fees are not paid to the Chair of the Board.
Details of the remuneration of the Non-Executive Directors of the Company are set out in Table 21.
Table 21: Non-Executive Directors Remuneration calculated in accordance with Australian accounting standards
Year
Short-term benefits
Post- employment
Total
Cash salary
and fees
$
Cash
bonus
$
Non- monetary
benefits
$
Superannuation
$
Total
$
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
360,000
313,650
145,455
141,127
186,364
165,744
186,364
170,152
131,818
128,898
96,970
-
72,727
141,127
-
86,120
1,179,698
1,146,818
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14,545
13,407
18,636
15,746
18,636
360,000
313,650
160,000
154,534
205,000
181,490
205,000
16,164
186,316
13,182
145,000
12,245
141,143
9,697
106,667
-
-
7,273
80,000
13,407
154,534
-
-
8,181
94,301
81,969
1,261,667
79,150
1,225,968
Name
Sally Pitkin
Annabelle Chaplain
Peter Everingham(1)
Howard Mowlem
Reg Rowe
Judith Swales(2)
Former Non-Executive Directors
Gary Dunne(3)
Diana Eilert(4)
Total
Total
(1) Mr Everingham commenced as Chair of the HRRC from 28 October 2020.
(2) Ms Swales commenced as KMP on 1 November 2021.
(3) Mr Dunne ceased to be a KMP on 31 December 2021.
(4) Ms Eilert ceased to be a KMP on 31 January 2021.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
75
75
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 2 JULY 2022
SHAREHOLDINGS OF NON-EXECUTIVE DIRECTORS AND THEIR RELATED PARTIES
Table 22 sets out details of ordinary shares in the Company held during the financial year by Non-Executive Directors and their
related parties.
Table 22: Shareholdings of Non-Executive Directors and their related parties(1)
Held at
27 June 2021(2)
Shares acquired
under DRP
Shares purchased/
(disposed)
Held at
2 July 2022(3)
Sally Pitkin AO
Annabelle Chaplain AM
Peter Everingham
Howard Mowlem
Reg Rowe(4)
Judith Swales
Former KMP
Gary Dunne
59,605
5,000
40,000
34,286
68,517,723
-
8
-
465
-
-
11,467(5)
-
-
8,800
6,400
-
-
-
5,925
6,000
68,405
11,865
40,000
34,286
68,529,190
5,925
6,008
Includes the Non-Executive Director's close family members or any entity they or their close family members control, jointly control or significantly influence.
(1)
(2) Or date of appointment if later. Ms Swales was appointed as an Independent Non-Executive Director on 1 November 2021.
(3) Or date of ceasing to be a KMP if earlier. Mr Dunne retired from the Board as an Independent Non-Executive Director on 31 December 2021, and ceased being a KMP at that time.
(4) Certain related parties of Mr Rowe hold ordinary shares, which at 2 July 2022, totalled 2,638,759 shares. Mr Rowe does not have a relevant interest or voting power in any of these shares.
(5) Represents shares acquired by related parties of Mr Rowe under the DRP during the financial year. Mr Rowe does not have a relevant interest or voting power in any of these shares.
MINIMUM SECURITIES HOLDING POLICY
Under the Company's Minimum Securities Holding Policy, Non-Executive Directors are required to acquire within a specified time period,
and hold thereafter, a minimum number of ordinary shares in the Company equal to the value of their annual base fee (before taxation
and superannuation). The minimum securities holding target must be achieved by a Non-Executive Director within three years of
appointment (or, where applicable, within a three-year transition period set under the revised policy). Dr Pitkin, Mr Everingham, Mr
Mowlem and Mr Rowe have met the requirement as at the end of the financial year.
The Minimum Securities Holding Policy is available on the Company’s website.
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 their retirement from office or to receive retirement benefits other
than superannuation contributions required under applicable legislation.
RETIREMENT BENEFITS
Retirement benefits for Non-Executive Directors are provided only to the extent required by legislation.
75
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 2 JULY 2022
REMUNERATION REPORT
(AUDITED)
SHAREHOLDINGS OF NON-EXECUTIVE DIRECTORS AND THEIR RELATED PARTIES
Table 22 sets out details of ordinary shares in the Company held during the financial year by Non-Executive Directors and their
related parties.
SECTION 8
Transactions with KMP
76
76
REPORTING PERIOD
ENDED 2 JULY 2022
The following sections apply to both Director KMP and Executive KMP.
LOANS TO KMP AND THEIR RELATED PARTIES
There are no loans made to KMP or their related parties during the reporting period, or that remain unsettled at the end of the reporting
period or the date of this report.
OTHER TRANSACTIONS WITH KMP
Dividends paid to KMP or their related parties in their capacity as shareholders of the Company in the reporting period amounted to
$56,509,512 (FY21: $36,125,381). Other payments made to Non-Executive Director Mr Rowe in the form of store lease payments during
the financial year amounted to $10,477,402 (FY21: $9,553,918). The financial year of 27 June 2021 to 2 July 2022 is a period of 53 weeks,
compared to the comparative financial year of 28 June 2020 to 26 June 2021 of 52 weeks. This has resulted in 13 monthly rent payments
in the current reporting period, compared to 12 monthly rent payments in the comparative reporting period. Rent payable at year-end was
nil (FY21: nil). 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 financial year.
Table 22: Shareholdings of Non-Executive Directors and their related parties(1)
Held at
27 June 2021(2)
Shares acquired
under DRP
Shares purchased/
(disposed)
Held at
2 July 2022(3)
Sally Pitkin AO
Annabelle Chaplain AM
Peter Everingham
Howard Mowlem
Reg Rowe(4)
Judith Swales
Former KMP
Gary Dunne
59,605
5,000
40,000
34,286
-
8
465
-
-
-
-
-
68,517,723
11,467(5)
8,800
6,400
-
-
-
5,925
6,000
68,405
11,865
40,000
34,286
68,529,190
5,925
6,008
(1)
Includes the Non-Executive Director's close family members or any entity they or their close family members control, jointly control or significantly influence.
(2) Or date of appointment if later. Ms Swales was appointed as an Independent Non-Executive Director on 1 November 2021.
(3) Or date of ceasing to be a KMP if earlier. Mr Dunne retired from the Board as an Independent Non-Executive Director on 31 December 2021, and ceased being a KMP at that time.
(4) Certain related parties of Mr Rowe hold ordinary shares, which at 2 July 2022, totalled 2,638,759 shares. Mr Rowe does not have a relevant interest or voting power in any of these shares.
(5) Represents shares acquired by related parties of Mr Rowe under the DRP during the financial year. Mr Rowe does not have a relevant interest or voting power in any of these shares.
MINIMUM SECURITIES HOLDING POLICY
Under the Company's Minimum Securities Holding Policy, Non-Executive Directors are required to acquire within a specified time period,
and hold thereafter, a minimum number of ordinary shares in the Company equal to the value of their annual base fee (before taxation
and superannuation). The minimum securities holding target must be achieved by a Non-Executive Director within three years of
appointment (or, where applicable, within a three-year transition period set under the revised policy). Dr Pitkin, Mr Everingham, Mr
Mowlem and Mr Rowe have met the requirement as at the end of the financial year.
The Minimum Securities Holding Policy is available on the Company’s website.
NO PERFORMANCE BASED FEES
Non-Executive Directors do not receive performance-related remuneration.
Non-Executive Directors are not eligible for termination payments on their retirement from office or to receive retirement benefits other
than superannuation contributions required under applicable legislation.
NO TERMINATION PAYMENTS
RETIREMENT BENEFITS
Retirement benefits for Non-Executive Directors are provided only to the extent required by legislation.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
77
77
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
REMUNERATION REPORT
(AUDITED)
SECTION 9
Remuneration Governance
REPORTING PERIOD
ENDED 2 JULY 2022
The Board is responsible for overseeing the Company’s remuneration framework and ensuring that it is aligned with the Company's vision,
mission, values, strategic objectives and risk appetite. The HRRC assists the Board in its oversight of the remuneration framework by
reviewing and making recommendations to the Board in relation to the overall human resources and remuneration practices of
the Group.
The HRRC currently comprises three Independent Non-Executive Directors: Peter Everingham (Chair), Howard Mowlem and Sally Pitkin.
Details of the number of times the HRRC met and attendance at those meetings during the reporting period is set out in the Directors’
Report on page 32. The responsibilities of the HRRC are outlined in its Charter, which is available in the Corporate Governance section of
the Company's website.
The Audit and Risk Committee (ARC) liaises with the HRRC, as necessary, to ensure there is effective coordination between the Committees
and an alignment between the Company's Risk Management and Compliance Framework and remuneration outcomes.
The following diagram outlines the Company's remuneration governance framework.
Table 23: Remuneration Governance Framework
Super Retail Group Limited Board
Human Resources and Remuneration Committee (HRRC)
Audit and Risk Committee (ARC)
Assists the Board in setting and overseeing the Group's
remuneration framework
Key responsibilities include reviewing and making
recommendations to the Board on:
-
-
-
-
-
the Company's remuneration policies, incentive and
equity plans and remuneration structure
the process for the Board's annual review of the
performance of the Group MD and CEO and direct
reports
the remuneration outcomes for the Group MD and CEO
and direct reports (having regard to the Group MD and
CEO's recommendations)
fees for Non-Executive Directors
the effectiveness of the remuneration framework and
its compliance with legislative and regulatory
requirements.
Shareholders and other stakeholders
From time to time, the HRRC may consult with shareholders,
proxy advisers and other relevant stakeholders to discuss
the Company's approach to remuneration and hear any
concerns raised by the investor community
During FY22, the Chair and the Chairs of the HRRC and the
ARC met with proxy advisers and investor bodies.
-
Assists the Board with oversight of the implementation
and operation of the Group's Risk and Compliance
Management Framework
The ARC makes recommendations and provides feedback to
the HRRC on relevant matters that may impact remuneration,
including with respect to remuneration outcomes,
adjustments to remuneration in light of relevant matters,
alignment of remuneration with the Risk Management and
Compliance Framework.
External remuneration consultants
Where appropriate, HRRC seeks information and advice
regarding remuneration directly from external
remuneration consultants
During FY22, the HRRC engaged EY as an independent
remuneration consultant to provide remuneration
benchmarking information and market data. No
remuneration recommendations, as defined in the
Corporations Act, were provided by remuneration
consultants.
77
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
78
REMUNERATION REPORT
(AUDITED)
SECTION 9
Remuneration Governance
REPORTING PERIOD
ENDED 2 JULY 2022
The Board is responsible for overseeing the Company’s remuneration framework and ensuring that it is aligned with the Company's vision,
mission, values, strategic objectives and risk appetite. The HRRC assists the Board in its oversight of the remuneration framework by
reviewing and making recommendations to the Board in relation to the overall human resources and remuneration practices of
the Group.
the Company's website.
The HRRC currently comprises three Independent Non-Executive Directors: Peter Everingham (Chair), Howard Mowlem and Sally Pitkin.
Details of the number of times the HRRC met and attendance at those meetings during the reporting period is set out in the Directors’
Report on page 32. The responsibilities of the HRRC are outlined in its Charter, which is available in the Corporate Governance section of
The Audit and Risk Committee (ARC) liaises with the HRRC, as necessary, to ensure there is effective coordination between the Committees
and an alignment between the Company's Risk Management and Compliance Framework and remuneration outcomes.
The following diagram outlines the Company's remuneration governance framework.
Table 23: Remuneration Governance Framework
Super Retail Group Limited Board
Human Resources and Remuneration Committee (HRRC)
Audit and Risk Committee (ARC)
Assists the Board in setting and overseeing the Group's
remuneration framework
Key responsibilities include reviewing and making
recommendations to the Board on:
-
-
-
-
-
the Company's remuneration policies, incentive and
equity plans and remuneration structure
the process for the Board's annual review of the
performance of the Group MD and CEO and direct
reports
the remuneration outcomes for the Group MD and CEO
and direct reports (having regard to the Group MD and
CEO's recommendations)
fees for Non-Executive Directors
the effectiveness of the remuneration framework and
its compliance with legislative and regulatory
requirements.
Shareholders and other stakeholders
From time to time, the HRRC may consult with shareholders,
proxy advisers and other relevant stakeholders to discuss
the Company's approach to remuneration and hear any
concerns raised by the investor community
During FY22, the Chair and the Chairs of the HRRC and the
ARC met with proxy advisers and investor bodies.
-
Assists the Board with oversight of the implementation
and operation of the Group's Risk and Compliance
Management Framework
The ARC makes recommendations and provides feedback to
the HRRC on relevant matters that may impact remuneration,
including with respect to remuneration outcomes,
adjustments to remuneration in light of relevant matters,
alignment of remuneration with the Risk Management and
Compliance Framework.
External remuneration consultants
Where appropriate, HRRC seeks information and advice
regarding remuneration directly from external
remuneration consultants
During FY22, the HRRC engaged EY as an independent
remuneration consultant to provide remuneration
benchmarking information and market data. No
remuneration recommendations, as defined in the
Corporations Act, were provided by remuneration
consultants.
Financial Statements
For the financial
year ended
2 July 2022
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY222022
79
79
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period ended 2 July 2022
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
OTHER COMPREHENSIVE INCOME
Items that may be reclassified to profit or loss
Gains / (losses) on cash flow hedges
Hedging (gains) / 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 is attributable to:
Owners of Super Retail Group
Earnings per share for profit attributable to the ordinary equity holders of
the Company:
Basic earnings per share
Diluted earnings per share
Notes
5
2022
$m
3,550.9
0.1
3,551.0
2021
$m
3,453.1
0.4
3,453.5
(1,890.3)
(1,797.2)
(459.3)
(98.8)
(238.1)
(471.4)
(47.0)
(0.4)
(438.7)
(102.5)
(213.3)
(433.0)
(41.0)
(0.2)
(3,205.3)
(3,025.9)
345.7
(104.5)
241.2
427.6
(126.6)
301.0
241.2
301.0
8.3
(2.5)
(1.7)
4.1
2.5
1.3
(0.3)
3.5
245.3
304.5
106.8
105.8
133.4
132.1
6
6
15
20
20
20
18
18
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
79
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period ended 2 July 2022
CONSOLIDATED BALANCE SHEET
As at 2 July 2022
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
Total expenses
Profit before income tax
Income tax expense
Profit for the period
Share of net loss of associates and joint ventures
Profit for the period is attributable to:
Owners of Super Retail Group
OTHER COMPREHENSIVE INCOME
Items that may be reclassified to profit or loss
Gains / (losses) on cash flow hedges
Hedging (gains) / losses reclassified to profit or loss
Exchange differences on translation of foreign operations
Other comprehensive income for the period, net of tax
(1,890.3)
(1,797.2)
(3,205.3)
(3,025.9)
241.2
301.0
2022
$m
3,550.9
0.1
3,551.0
(459.3)
(98.8)
(238.1)
(471.4)
(47.0)
(0.4)
345.7
(104.5)
241.2
8.3
(2.5)
(1.7)
4.1
2021
$m
3,453.1
0.4
3,453.5
(438.7)
(102.5)
(213.3)
(433.0)
(41.0)
(0.2)
427.6
(126.6)
301.0
2.5
1.3
(0.3)
3.5
Notes
5
6
6
15
20
20
20
18
18
Total comprehensive income for the period is attributable to:
Owners of Super Retail Group
245.3
304.5
Earnings per share for profit attributable to the ordinary equity holders of
the Company:
Basic earnings per share
Diluted earnings per share
106.8
105.8
133.4
132.1
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
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
Total current liabilities
Non-current liabilities
Borrowings
Lease liabilities
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
NET ASSETS
EQUITY
Contributed equity
Reserves
Retained earnings
TOTAL EQUITY
80
80
2021
$m
242.3
38.4
696.4
3.6
980.7
219.9
866.9
894.3
14.9
6.1
2,002.1
2,982.8
563.4
193.9
69.5
97.0
923.8
-
795.7
10.2
26.6
832.5
1,756.3
2022
$m
13.4
53.6
799.6
11.9
878.5
235.7
866.0
923.7
15.4
-
2,040.8
2,919.3
451.4
193.4
19.8
97.9
762.5
-
817.3
10.1
40.4
867.8
1,630.3
1,289.0
1,226.5
740.7
24.1
524.2
1,289.0
740.7
17.6
468.2
1,226.5
Notes
7
8
9
17
10
11
12
15
25(b)
13
12
15
16
14
12
15
16
19
20
20
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
81
81
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 2 July 2022
Contributed
Equity
Reserves
Balance at 27 June 2020
Profit for the period
Other comprehensive gain 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 paid
Employee performance rights
Balance at 26 June 2021
Profit for the period
Other comprehensive gain for the period
Total comprehensive income for the period
Transactions with owners in
their capacity as owners
Dividends paid
Employee performance rights
Notes
19
23
20
23
20
$m
698.1
-
-
-
42.6
-
-
42.6
740.7
-
-
-
-
-
-
Balance at 2 July 2022
740.7
$m
7.5
-
3.5
3.5
-
-
6.6
6.6
17.6
-
4.1
4.1
-
2.4
2.4
24.1
Retained
Earnings
$m
285.7
301.0
-
301.0
-
(118.5)
-
(118.5)
468.2
241.2
-
241.2
(185.2)
-
(185.2)
524.2
Total
Equity
$m
991.3
301.0
3.5
304.5
42.6
(118.5)
6.6
(69.3)
1,226.5
241.2
4.1
245.3
(185.2)
2.4
(182.8)
1,289.0
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
81
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 2 July 2022
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended 2 July 2022
Balance at 27 June 2020
Profit for the period
Other comprehensive gain for the period
Total comprehensive income for the period
Contributions of equity, net of transaction costs
Transactions with owners in
their capacity as owners
Dividends paid
Employee performance rights
Balance at 26 June 2021
Profit for the period
Other comprehensive gain for the period
Total comprehensive income for the period
Transactions with owners in
their capacity as owners
Dividends paid
Employee performance rights
19
23
20
23
20
Contributed
Reserves
Notes
Equity
$m
698.1
42.6
42.6
740.7
-
-
-
-
-
-
-
-
-
-
-
Retained
Earnings
$m
285.7
301.0
-
301.0
-
-
(118.5)
(118.5)
468.2
241.2
-
241.2
(185.2)
-
(185.2)
524.2
$m
7.5
-
3.5
3.5
-
-
6.6
6.6
17.6
-
4.1
4.1
-
2.4
2.4
24.1
Total
Equity
$m
991.3
301.0
3.5
304.5
42.6
(118.5)
6.6
(69.3)
1,226.5
241.2
4.1
245.3
(185.2)
2.4
(182.8)
1,289.0
Balance at 2 July 2022
740.7
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
21
Notes
Cash flows from investing activities
Payments for property, plant and equipment and computer software
Proceeds from sale of property, plant and equipment
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 (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
22(d)
22(d)
23
7
82
82
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
2022
$m
3,914.5
(3,372.3)
(44.8)
(157.0)
340.4
(125.0)
0.3
(124.7)
483.0
(483.0)
(216.0)
-
(43.6)
-
(185.2)
(444.8)
(229.1)
242.3
0.2
13.4
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
83
83
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the period ended 2 July 2022
TABLE OF CONTENTS
Segment information
Revenue and other income from continuing operations
Expenses from continuing operations
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
Cash and cash equivalents
7.
Trade and other receivables
8.
Inventories
9.
Property, plant and equipment
10.
Intangible assets
11.
Leases
12.
Trade and other payables
13.
Borrowings
14.
Income taxes
15.
Provisions
16.
17.
Financial assets and financial liabilities
Capital Structure, Financing and Risk Management
18.
19.
20.
21.
22.
23.
Group Structure
24.
25.
26.
27.
28.
Other
29.
30.
31.
32.
33.
34.
35.
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
84
84
87
88
91
91
93
93
94
94
96
99
101
101
102
106
108
111
112
113
114
115
121
123
123
124
126
127
128
128
130
131
131
131
131
83
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
TABLE OF CONTENTS
Basis of Preparation
Reporting entity
Summary of significant accounting policies
Critical accounting estimates and judgements
Group Performance
Segment information
Revenue and other income from continuing operations
Expenses from continuing operations
Assets and Liabilities
Cash and cash equivalents
Trade and other receivables
Inventories
Property, plant and equipment
Intangible assets
Leases
Trade and other payables
Borrowings
Income taxes
Provisions
Financial assets and financial liabilities
Capital Structure, Financing and Risk Management
Earnings per share
Contributed equity
Reserves and retained earnings
Financial risk management
Capital management
Group Structure
Related party transactions
Business combinations
Deed of cross guarantee
Parent entity financial information
Investments in controlled entities
Other
Key management personnel disclosures
Share-based payments
Remuneration of auditors
Contingencies
Commitments
Net tangible asset backing
Events occurring after balance date
Reconciliation of profit after income tax to net cash inflow from operating activities
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the period ended 2 July 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
84
84
84
84
87
88
91
91
93
93
94
94
96
99
101
101
102
106
108
111
112
113
114
115
121
123
123
124
126
127
128
128
130
131
131
131
131
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 2 July 2022 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.
The consolidated financial statements and accompanying notes of Super Retail Group 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 2 July
2022 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 and 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 25 - 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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
85
85
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
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.
The carrying amount of equity-accounted investments are tested 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 carrying amount exceeds the
recoverable amount. The recoverable amount is the higher of the investments fair value less costs of disposal and value in use.
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.
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 is 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’s functional and presentation currency.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
86
86
2.
(c)
Summary of significant accounting policies (continued)
Foreign currency translation (continued)
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.
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.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are
recoverable from, or payable to, the taxation authority, are presented as operating cash flow.
(e)
Rounding of amounts
The economic entity is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, issued by
the Australian Securities and Investments Commission, relating to the ‘rounding off’ of amounts in the financial report. Amounts in the
financial report have been rounded off in accordance with that instrument to the nearest hundred thousand dollars.
(f)
Financial year
As allowed under Section 323D(2) of the Corporations Act, the Directors have determined the financial year to be a fixed period of 52 calendar
or 53 calendar weeks. For the period to 2 July 2022, the Group is reporting on the 53 week period that began 27 June 2021 and ended 2 July
2022. 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.
(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 2020-4 Amendments to Australian Accounting Standards – Covid-19-Related Rent Concessions [AASB 16]
AASB 2020-8 Amendments to Australian Accounting Standards – Interest Rate Benchmark Reform – Phase 2 [AASB 4, AASB 7, AASB 9, AASB
16 & AASB 139]
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 estimate
During the reporting period, the IFRS Interpretation Committee (the Committee) considered whether an entity includes all costs necessary to
make a sale when determining the net realisable value (NRV) of inventories or only those costs that are incremental to the sale. In considering
this issue, the Committee concluded that, while the standard does not specify which costs to consider, an entity cannot limit the costs it
includes to those that are only incremental. As such the Group has made a change to how it estimates the costs necessary to make a sale in
its NRV calculations. This change in accounting estimate has not had a material impact on the Group in the current reporting period nor is it
expected to have a material impact in the foreseeable future.
85
2.
(b)
(iii)
Summary of significant accounting policies (continued)
Principles of consolidation (continued)
Business combinations (continued)
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.
(iv)
Investments in associates and joint ventures
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.
(v)
Equity method
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
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
other entity.
the Group.
The carrying amount of equity-accounted investments are tested 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 carrying amount exceeds the
recoverable amount. The recoverable amount is the higher of the investments fair value less costs of disposal and value in use.
(vi)
Changes in ownership interests
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.
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 is reclassified to profit or loss where appropriate.
(vii)
Comparatives
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)
(i)
Foreign currency translation
Functional and presentation currency
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’s functional and presentation currency.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
87
87
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
2.
(h)
Summary of significant accounting policies (continued)
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 2 July 2022 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.
(a)
Critical accounting estimates and assumptions
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the
related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year are included in the following Notes to the consolidated financial statements:
Note 8 – Trade and other receivables;
Note 9 – Inventories;
Note 10 – Property, plant and equipment;
Note 11 – Intangible assets;
Note 12 – Leases;
Note 13 – Trade and other payables;
Note 16 – Provisions;
Note 25 – Business combinations;
Note 30 – Share-based payments.
87
2.
(h)
Summary of significant accounting policies (continued)
Impact of standards issued but not yet applied by the Group
reporting periods or on foreseeable future transactions.
3.
Critical accounting estimates and judgements
Note 8 – Trade and other receivables;
Note 9 – Inventories;
Note 10 – Property, plant and equipment;
Note 11 – Intangible assets;
Note 12 – Leases;
Note 13 – Trade and other payables;
Note 16 – Provisions;
Note 25 – Business combinations;
Note 30 – Share-based payments.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
88
88
4.
(a)
Segment information
Description of segments
Certain new accounting standards and interpretations have been published that are not mandatory for the 2 July 2022 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
Management have determined the operating segments based on the reports reviewed by the Group Managing Director and Chief Executive
Officer (Group MD and CEO) that are used to make strategic decisions. No operating segments have been aggregated to form reportable
operating segments. This results in the following business segments:
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.
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.
(a)
Critical accounting estimates and assumptions
(b)
Segment information provided to the Group MD and CEO
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:
Detailed below is the information provided to the Group MD and CEO 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 2 July 2022
SCA
$m
rebel
$m
BCF
$m
Macpac
$m
Total
continuing
operations
$m
Inter-segment
eliminations/
unallocated
$m
Consolidated
$m
1,339.8
-
-
1,339.8
301.5
(110.9)
190.6
(14.5)
176.1
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
Segment EBIT result
Net finance costs*
Total segment NPBT
Segment income tax expense(2)
Normalised NPAT
Other items not included in the total segment NPAT(3)
Profit for the period attributable to:
Owners of Super Retail Group
Profit for the period
1,212.0
-
0.1
1,212.1
264.6
(109.0)
155.6
(14.6)
141.0
829.7
-
-
829.7
133.4
(64.5)
68.9
(9.3)
59.6
169.4
7.4
-
176.8
40.5
(20.5)
20.0
(1.4)
18.6
3,550.9
7.4
0.1
3,558.4
740.0
(304.9)
435.1
(39.8)
395.3
-
(7.4)
-
(7.4)
(38.2)
(0.3)
(38.5)
(7.2)
(45.7)
Segment Net Inventory
Inventory
Trade payables
Net inventory
* Net finance costs for the business segments represents interest component of lease payments.
300.0
(155.7)
144.3
230.6
(35.7)
194.9
214.1
(84.0)
130.1
56.1
(8.9)
47.2
800.8
(284.3)
516.5
(1.2)
(39.8)
(41.0)
Adjustment item
Execution costs to complete remediation
Equity accounted losses – Autoguru
Provision reversals from previous years
(1) Segment EBITDA
adjusted for
$m
(2) Segment income
tax adjusted for
$m
(3) Other items not
included in total
segment NPAT
$m
3.8
0.4
(0.3)
3.9
1.1
-
(0.1)
1.0
2.7
0.4
(0.2)
2.9
3,550.9
-
0.1
3,551.0
701.8
(305.2)
396.6
(47.0)
349.6
(105.5)
244.1
(2.9)
241.2
241.2
799.6
(324.1)
475.5
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
89
89
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
4.
(b)
Segment information (continued)
Segment information provided to the Group MD and CEO (continued)
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
1,308.8
-
-
1,308.8
315.7
(111.5)
204.2
(11.9)
192.3
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
Segment EBIT result
Net finance costs*
Total segment NPBT
Segment income tax expense(2)
Normalised NPAT
Other items not included in the total segment NPAT(3)
Profit for the period attributable to:
Owners of Super Retail Group
Profit for the period
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)
Segment Net Inventory
Inventory
Trade payables
Net inventory
* Net finance costs for the business segments represents interest component of lease payments.
276.2
(219.3)
56.9
186.9
(68.4)
118.5
191.4
(96.3)
95.1
42.4
(5.7)
36.7
696.9
(389.7)
307.2
(0.5)
(59.2)
(59.7)
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
Adjustment item
Execution costs to complete remediation
Equity accounted losses – Autoguru
Provision reversals from previous years
(1) Segment EBITDA
adjusted for
$m
(2) Segment income
tax adjusted for
$m
(3) Other items not
included in total
segment NPAT
$m
8.8
0.2
(0.8)
8.2
2.6
-
(0.2)
2.4
6.2
0.2
(0.6)
5.8
Unallocated costs are Group costs comprising $25.6 million of corporate costs (2021: $25.3 million), $7.2 million relating to digital investment
(2021: nil) and $5.7 million related to the loss on write down of investment in Autoguru (2021: nil). The prior comparative period also included
$5.4 million for the recognition of additional costs related to updated guidance from the International Reporting Interpretations Committee
(IFRIC) regarding the treatment of Software as a Service (SaaS) costs.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
90
90
4.
(c)
Segment information (continued)
Other information
Revenue is attributable to the country in 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
2022
$m
3,316.7
234.3
3,551.0
1,841.0
199.8
2,040.8
2021
$m
3,234.6
218.9
3,453.5
1,801.3
200.8
2,002.1
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Group MD and CEO, 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).
89
4.
(b)
For the period ended 2 July 2022
Segment information (continued)
Segment information provided to the Group MD and CEO (continued)
SCA
$m
rebel
$m
BCF
$m
$m
$m
Macpac
operations
unallocated
Consolidated
Total
Inter-segment
continuing
eliminations/
For the period ended 26 June 2021
Segment Revenue and Other Income
Inter-segment sales
Other income
Segment EBITDA(1)
Segment EBIT result
Net finance costs*
Total segment NPBT
Segment income tax expense(2)
Normalised NPAT
External segment revenue
1,308.8
1,197.0
797.7
149.6
3,453.1
Total segment revenue and other income
1,308.8
1,197.1
Segment depreciation and amortisation
(111.5)
(105.9)
-
-
-
0.1
315.7
285.9
204.2
(11.9)
192.3
180.0
(13.3)
166.7
-
-
797.7
167.1
(61.9)
105.2
(8.8)
96.4
3.8
0.2
153.6
35.7
(17.6)
18.1
(1.2)
16.9
3.8
0.3
3,457.2
804.4
(296.9)
507.5
(35.2)
472.3
Other items not included in the total segment NPAT(3)
Profit for the period attributable to:
Owners of Super Retail Group
Profit for the period
Segment Net Inventory
Inventory
Trade payables
Net inventory
* Net finance costs for the business segments represents interest component of lease payments.
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
(2) Segment income
adjusted for
tax adjusted for
(3) Other items not
included in total
segment NPAT
Adjustment item
Execution costs to complete remediation
Equity accounted losses – Autoguru
Provision reversals from previous years
$m
8.8
0.2
(0.8)
8.2
$m
2.6
-
(0.2)
2.4
$m
-
(3.8)
0.1
(3.7)
(28.2)
(2.5)
(30.7)
(5.8)
(36.5)
$m
6.2
0.2
(0.6)
5.8
3,453.1
$m
-
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
Unallocated costs are Group costs comprising $25.6 million of corporate costs (2021: $25.3 million), $7.2 million relating to digital investment
(2021: nil) and $5.7 million related to the loss on write down of investment in Autoguru (2021: nil). The prior comparative period also included
$5.4 million for the recognition of additional costs related to updated guidance from the International Reporting Interpretations Committee
(IFRIC) regarding the treatment of Software as a Service (SaaS) costs.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
91
91
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
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
2022
$m
3,550.9
0.1
3,551.0
2021
$m
3,453.1
0.4
3,453.5
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 un-probable that a significant reversal in the cumulative revenue
recognised will 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.
6.
Expenses from continuing operations
Profit before income tax includes the following specific gains and expenses:
Expenses/(gains)
Net (gain) on disposal of property, plant and equipment
Share of net loss from associates and joint ventures
Loss on write down of investment in associate
Depreciation
Right-of-use assets
Plant and equipment
Computer equipment
Total depreciation
Amortisation and impairment
Computer software amortisation
Right-of-use asset impairment
Total amortisation and impairment
Net finance costs
Interest and finance charges on bank facilities
Interest on lease liabilities and make-good provisions
Net finance costs
2022
$m
(0.3)
0.4
5.7
207.5
48.7
17.0
273.2
32.0
2.0
34.0
6.9
40.1
47.0
2021
$m
(0.2)
0.2
-
191.9
54.1
15.4
261.4
38.0
0.9
38.9
5.8
35.2
41.0
91
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
92
92
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
5.
Revenue and other income from continuing operations
6.
Expenses from continuing operations (continued)
Revenue from the sale of goods
Other income
Sundry
Total revenues and other income
Significant Accounting Policies
Sale of goods – retail
Revenue from the sale of goods is recognised when a Group entity sells a product to the customer.
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 un-probable that a significant reversal in the cumulative revenue
recognised will 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.
Profit before income tax includes the following specific gains and expenses:
Employee benefits expense
Superannuation
Salaries and wages(1)
Total employee benefits expense
(1) Excludes impact of government grant received disclosed below.
Government grant received
New Zealand wage subsidy for Super Cheap Auto (New Zealand) Pty Limited and Macpac New
Zealand Limited
Total government grant revenue(2)
(2) Government grant revenue is offset against expenses where applicable.
Rental expense relating to leases
Lease expenses
Equipment hire
Total rental expense relating to leases(3)
2022
$m
50.3
656.3
706.6
1.2
1.2
39.3
3.7
43.0
2021
$m
43.3
603.7
647.0
-
-
41.3
3.6
44.9
(3) The impact of applying AASB 16 Leases was a decrease of $237.4 million in rental expense to 2 July 2022 (2021: $218.5 million).
Foreign exchange gains and losses
Net foreign exchange loss / (gain)
Significant Accounting Policies
Depreciation, amortisation and impairment
Refer to Notes 10, 11 and 12 for details on depreciation, amortisation and impairment.
3.4
(5.1)
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 16 for details on employee provisions and superannuation.
Leases
Refer to Note 12 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.
2022
$m
3,550.9
0.1
3,551.0
2021
$m
3,453.1
0.4
3,453.5
2022
$m
(0.3)
0.4
5.7
207.5
48.7
17.0
273.2
32.0
2.0
34.0
6.9
40.1
47.0
2021
$m
(0.2)
0.2
-
191.9
54.1
15.4
261.4
38.0
0.9
38.9
5.8
35.2
41.0
6.
Expenses from continuing operations
Profit before income tax includes the following specific gains and expenses:
Expenses/(gains)
Net (gain) on disposal of property, plant and equipment
Share of net loss from associates and joint ventures
Loss on write down of investment in associate
Depreciation
Right-of-use assets
Plant and equipment
Computer equipment
Total depreciation
Amortisation and impairment
Computer software amortisation
Right-of-use asset impairment
Total amortisation and impairment
Net finance costs
Interest and finance charges on bank facilities
Interest on lease liabilities and make-good provisions
Net finance costs
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
93
93
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
7.
Cash and cash equivalents
Cash at bank and on hand
Bank overdraft
Total cash and cash equivalents
Significant Accounting Policies
2022
$m
32.7
(19.3)
13.4
2021
$m
242.3
-
242.3
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.
8.
Trade and other receivables
Current
Trade receivables
Loss allowance
Net trade receivables
Other receivables
Prepayments
Net current trade and other receivables
(a)
Impaired trade receivables
2022
$m
19.1
(1.0)
18.1
19.2
16.3
53.6
2021
$m
15.0
(0.4)
14.6
9.9
13.9
38.4
As at 2 July 2022 current trade receivables of the Group with a nominal value of $1.0 million (2021: $0.4 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 2 July 2022, trade receivables of $10.7 million (2021: $3.9 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
2022
$m
6.4
2.2
2.1
10.7
2021
$m
2.2
0.8
0.9
3.9
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 17.
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.
93
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
94
94
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
2022
$m
32.7
(19.3)
13.4
2022
$m
19.1
(1.0)
18.1
19.2
16.3
53.6
2022
$m
6.4
2.2
2.1
10.7
2021
$m
242.3
-
242.3
2021
$m
15.0
(0.4)
14.6
9.9
13.9
38.4
2021
$m
2.2
0.8
0.9
3.9
8.
Trade and other receivables (continued)
Significant Accounting Policies
Trade receivables (continued)
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.
The Group uses judgement to determine whether costs paid to suppliers of SaaS arrangements relate to significant customisation of the
cloud-based software.
9.
Inventories
Finished goods, at lower of cost or net realisable value
(a)
Inventory expense
2022
$m
799.6
2021
$m
696.4
Inventories recognised as expense during the period ended 2 July 2022 amounted to $1,797.5 million (2021: $1,710.8 million).
Write-downs of inventories to net realisable value recognised as an expense during the period ended 2 July 2022 amounted to $4.4 million
(2021: $1.3 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.
10.
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
2022
$m
482.3
(284.1)
198.2
98.4
(60.9)
37.5
235.7
2021
$m
444.4
(257.0)
187.4
87.4
(54.9)
32.5
219.9
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.
For the period ended 2 July 2022
7.
Cash and cash equivalents
Cash at bank and on hand
Bank overdraft
Total cash and cash equivalents
Significant Accounting Policies
Cash and cash equivalents
8.
Trade and other receivables
Current
Trade receivables
Loss allowance
Net trade receivables
Other receivables
Prepayments
Net current trade and other receivables
(a)
Impaired trade receivables
(b)
Past due but not impaired
30 to 60 days
60 to 90 days
90 days and over
Significant Accounting Policies
Trade receivables
As at 2 July 2022 current trade receivables of the Group with a nominal value of $1.0 million (2021: $0.4 million) were impaired and provided
for. The individually impaired receivables mainly relate to wholesalers with whom the Group no longer trades.
As at 2 July 2022, trade receivables of $10.7 million (2021: $3.9 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:
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 17.
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
95
95
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
10.
Property, plant and equipment (continued)
(a)
Reconciliations
Reconciliations of the carrying amounts for each class of property, plant and equipment are set out below:
2022
Carrying amounts at 26 June 2021
Additions
Depreciation
Disposals
Foreign currency exchange differences
Carrying amounts at 2 July 2022
2021
Carrying amounts at 27 June 2020
Additions
Depreciation
Disposals
Carrying amounts at 26 June 2021
Significant Accounting Policies
Plant and
equipment
$m
Computer
equipment
$m
187.4
59.8
(48.7)
-
(0.3)
198.2
197.2
44.7
(54.1)
(0.4)
187.4
32.5
22.2
(17.0)
(0.2)
-
37.5
30.6
17.3
(15.4)
-
32.5
Total
$m
219.9
82.0
(65.7)
(0.2)
(0.3)
235.7
227.8
62.0
(69.5)
(0.4)
219.9
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).
For the period ended 2 July 2022
10.
Property, plant and equipment (continued)
(a)
Reconciliations
Reconciliations of the carrying amounts for each class of property, plant and equipment are set out below:
Plant and
equipment
Computer
equipment
Carrying amounts at 26 June 2021
Foreign currency exchange differences
Carrying amounts at 2 July 2022
Carrying amounts at 27 June 2020
2022
Additions
Depreciation
Disposals
2021
Additions
Depreciation
Disposals
Carrying amounts at 26 June 2021
Significant Accounting Policies
Carrying value
$m
187.4
59.8
(48.7)
-
(0.3)
198.2
197.2
44.7
(54.1)
(0.4)
187.4
$m
32.5
22.2
(17.0)
(0.2)
-
37.5
30.6
17.3
(15.4)
-
32.5
Total
$m
219.9
82.0
(65.7)
(0.2)
(0.3)
235.7
227.8
62.0
(69.5)
(0.4)
219.9
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
The depreciation rates used for each class of assets are:
6.7% – 25%
20% – 33.3%
financial position date.
Plant and equipment
Computer equipment
recoverable amount.
Gains and losses
95
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
96
96
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
11.
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
(a)
Reconciliations
Reconciliations of the carrying amounts for each class of intangible asset are set out below:
2022
Carrying amounts at 26 June 2021
Additions
Disposals
Amortisation charge
Carrying amounts at 2 July 2022
2021
Carrying amounts at 27 June 2020
Additions
Disposals
Amortisation charge
Change in accounting policy – Cloud computing
arrangements
Carrying amounts at 26 June 2021
(b)
Impairment tests for goodwill
Goodwill
$m
Computer
Software
$m
526.6
-
-
-
526.6
526.6
-
-
-
-
526.6
87.0
31.3
(0.2)
(32.0)
86.1
94.4
35.0
(0.1)
(38.0)
(4.3)
87.0
2022
$m
528.7
(2.1)
526.6
240.6
(154.5)
86.1
311.8
(58.5)
253.3
866.0
Brand
Name
$m
253.3
-
-
-
253.3
253.3
-
-
-
-
253.3
2021
$m
528.7
(2.1)
526.6
221.4
(134.4)
87.0
311.8
(58.5)
253.3
866.9
Total
$m
866.9
31.3
(0.2)
(32.0)
866.0
874.3
35.0
(0.1)
(38.0)
(4.3)
866.9
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated
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:
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).
CGU
Supercheap Auto
rebel
BCF
Macpac
Total
2022
$m
45.3
376.6
25.1
79.6
526.6
2021
$m
45.3
376.6
25.1
79.6
526.6
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
97
97
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
11.
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 (2021: 11.7 per cent) and terminal growth rate of 2.5 per cent (2021: 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 FY21 and FY22 will continue for a portion of FY23 and then
begin to gradually subside. 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.
The recoverable amounts of each CGU are estimated to exceed their carrying amounts as at 2 July 2022. 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.
(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.
The carrying values of the purchased brand names are:
Brand
rebel
Macpac
Total
2022
$m
209.0
44.3
253.3
2021
$m
209.0
44.3
253.3
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 (2021: 11.7 per cent) and terminal growth rate of 2.5 per cent (2021: 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 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.
For the period ended 2 July 2022
11.
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 (2021: 11.7 per cent) and terminal growth rate of 2.5 per cent (2021: 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 FY21 and FY22 will continue for a portion of FY23 and then
begin to gradually subside. 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.
The recoverable amounts of each CGU are estimated to exceed their carrying amounts as at 2 July 2022. 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.
(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
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.
The carrying values of the purchased brand names are:
2022
$m
209.0
44.3
253.3
2021
$m
209.0
44.3
253.3
useful lives.
Brand
rebel
Macpac
Total
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 (2021: 11.7 per cent) and terminal growth rate of 2.5 per cent (2021: 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 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.
97
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
98
98
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
11.
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 Software as a Service (SaaS) arrangements can be recognised as intangible assets only 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.
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.
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
99
99
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
12.
Leases
(a)
Right-of-use assets
Properties
Computer equipment
Total right-of-use assets
2022
$m
923.4
0.3
923.7
Reconciliations of the carrying amounts for each class of right-of-use assets are set out below:
Properties
$m
Computer
equipment
$m
2022
Carrying amounts at 26 June 2021
Additions
Disposals
Depreciation
Impairment
Foreign currency exchange differences
Carrying amounts at 2 July 2022
2021
Carrying amounts at 27 June 2020
Additions
Disposals
Depreciation
Impairment
Foreign currency exchange differences
Carrying amounts at 26 June 2021
(b)
Lease liabilities
Current
Non-current
Total lease liabilities
Movements in lease liabilities during the period are set out below:
Balance at the beginning of the reporting period
Additions
Terminations
Rental payments
Interest on lease liabilities
Foreign currency exchange differences
Balance at the end of the reporting period
893.8
257.3
(17.4)
(207.3)
(2.0)
(1.0)
923.4
842.0
269.0
(29.8)
(186.4)
(0.9)
(0.1)
893.8
0.5
-
-
(0.2)
-
-
0.3
6.0
-
-
(5.5)
-
-
0.5
2022
$m
193.4
817.3
1,010.7
989.6
255.9
(17.5)
(254.9)
38.9
(1.3)
1,010.7
2021
$m
893.8
0.5
894.3
Total
$m
894.3
257.3
(17.4)
(207.5)
(2.0)
(1.0)
923.7
848.0
269.0
(29.8)
(191.9)
(0.9)
(0.1)
894.3
2021
$m
193.9
795.7
989.6
939.3
268.8
(30.3)
(223.3)
35.2
(0.1)
989.6
At 2 July 2022, the Group had committed to leases that had not yet commenced and estimates that the potential future lease payments
would result in an increase in undiscounted lease liabilities of $150.7 million (2021: $80.5 million).
(c)
Other
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)
2022
$m
8.7
3.7
31.4
2021
$m
12.8
3.6
29.7
99
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
100
100
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
Reconciliations of the carrying amounts for each class of right-of-use assets are set out below:
Properties
$m
Computer
equipment
12.
Leases
(a)
Right-of-use assets
Properties
Computer equipment
Total right-of-use assets
Carrying amounts at 26 June 2021
Foreign currency exchange differences
Carrying amounts at 2 July 2022
Carrying amounts at 27 June 2020
2022
Additions
Disposals
Depreciation
Impairment
2021
Additions
Disposals
Depreciation
Impairment
Foreign currency exchange differences
Carrying amounts at 26 June 2021
(b)
Lease liabilities
Current
Non-current
Total lease liabilities
893.8
257.3
(17.4)
(207.3)
(2.0)
(1.0)
923.4
842.0
269.0
(29.8)
(186.4)
(0.9)
(0.1)
893.8
2022
$m
923.4
0.3
923.7
$m
0.5
(0.2)
-
-
-
-
-
-
-
-
0.3
6.0
(5.5)
0.5
2022
$m
193.4
817.3
1,010.7
989.6
255.9
(17.5)
(254.9)
38.9
(1.3)
1,010.7
2022
$m
8.7
3.7
31.4
2021
$m
893.8
0.5
894.3
Total
$m
894.3
257.3
(17.4)
(207.5)
(2.0)
(1.0)
923.7
848.0
269.0
(29.8)
(191.9)
(0.9)
(0.1)
894.3
2021
$m
193.9
795.7
989.6
939.3
268.8
(30.3)
(223.3)
35.2
(0.1)
989.6
2021
$m
12.8
3.6
29.7
12.
Leases (continued)
Significant Accounting Policies
Leases
The Group leases various offices, warehouses, retail stores, equipment and cars. Rental contracts are typically made for fixed periods of
one 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.
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/make-good 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 consider leases with more than three years to expiry as
not reasonably certain to be extended. An annual strategic store network review as approved by the Board delivers confidence over
network plans covering the next three years. This has resulted in option assumptions being revised for 78 (2021: 160) leases during the
period. This had the impact of increasing lease liabilities and the corresponding right-of-use assets by $52.9 million (2021: $135.7 million).
Of the Group’s lease portfolio 63% (2021: 64%) of leases contain option renewals. The lease liability currently includes extension options
in the calculation of lease term for 23% (2021: 25%) 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 control of the lessee.
Movements in lease liabilities during the period are set out below:
Balance at the beginning of the reporting period
Additions
Terminations
Rental payments
Interest on lease liabilities
Foreign currency exchange differences
Balance at the end of the reporting period
At 2 July 2022, the Group had committed to leases that had not yet commenced and estimates that the potential future lease payments
would result in an increase in undiscounted lease liabilities of $150.7 million (2021: $80.5 million).
(c)
Other
Administrative expenses)
expenses)
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
Expense relating to variable lease payments not included in lease liabilities (included in Occupancy
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
101
101
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
13.
Trade and other payables
Current
Trade payables
Gift card deferred revenue
Other payables
Total current trade and other payables
Significant Accounting Policies
2022
$m
324.1
53.7
73.6
451.4
2021
$m
448.9
42.5
72.0
563.4
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.
14.
Borrowings
Non-current
Bank debt funding facility - unsecured(1)
Total non-current borrowings
2022
$m
-
-
2021
$m
-
-
(1) No drawn bank debt at period end. Refer to Note 22 - Financial risk management for details of financing arrangements.
(a)
Reconciliation of liabilities arising from financing activities
Bank debt funding facility
Capitalised borrowing costs(2)
26 June 2021
$m
-
-
Cash flows
$m
-
-
Non-cash
Amortisation
$m
-
Reclassed to
Trade and Other
Receivables
$m
-
2 July 2022
$m
-
-
-
-
Total
-
(2) Borrowing costs of $2.0 million were fully amortised during the reporting period and are recognised within net finance costs in the Group’s consolidated
-
-
-
-
income statement.
Bank debt funding facility
Capitalised borrowing costs
Total
Significant Accounting Policies
27 June 2020
$m
250.0
(2.2)
247.8
Cash flows
$m
(250.0)
(1.1)
(251.1)
Non-cash
Amortisation
$m
-
1.3
1.3
Reclassed to
Trade and Other
Receivables
$m
-
2.0
2.0
26 June 2021
$m
-
-
-
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.
101
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
102
102
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
2022
$m
324.1
53.7
73.6
451.4
2021
$m
448.9
42.5
72.0
563.4
15.
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 15(e))
Increase in deferred tax liabilities (Note 15(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% (2021: 30%)
Tax effect of amounts not deductible / (taxable) in calculating taxable income:
Sundry items
Difference in overseas tax rates
Derecognition of tax losses and deferred tax assets
Previously unrecognised tax losses and deferred tax assets
Adjustments to tax expense of prior periods
Income tax expense
Effective tax rate:
Australia
Consolidated group
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 directly to equity (Note 15(e))
Tax expense relating to items of other comprehensive income
Cash flow hedges
2022
$m
107.8
(3.2)
(0.1)
104.5
(13.0)
9.8
(3.2)
345.7
103.7
1.7
105.4
(0.4)
-
(0.4)
(0.1)
104.5
30.6%
30.2%
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%
(104.5)
(126.6)
(2.0)
(4.8)
0.6
8.9
(6.6)
0.4
0.6
(107.4)
87.6
(19.8)
2.6
2.6
2.6
2.6
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
For the period ended 2 July 2022
13.
Trade and other payables
Current
Trade payables
Gift card deferred revenue
Other payables
Total current trade and other payables
Significant Accounting Policies
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.
(1) No drawn bank debt at period end. Refer to Note 22 - Financial risk management for details of financing arrangements.
(a)
Reconciliation of liabilities arising from financing activities
26 June 2021
Cash flows
Reclassed to
Non-cash
Trade and Other
Amortisation
Receivables
2 July 2022
$m
(2) Borrowing costs of $2.0 million were fully amortised during the reporting period and are recognised within net finance costs in the Group’s consolidated
27 June 2020
Cash flows
Amortisation
Receivables
26 June 2021
Reclassed to
Non-cash
Trade and Other
$m
-
-
-
$m
250.0
(2.2)
247.8
$m
-
-
-
$m
(250.0)
(1.1)
(251.1)
$m
-
-
-
$m
-
1.3
1.3
2022
$m
-
-
2021
$m
-
-
$m
-
-
-
$m
-
2.0
2.0
-
-
-
-
-
-
$m
14.
Borrowings
Non-current
Bank debt funding facility - unsecured(1)
Total non-current borrowings
Bank debt funding facility
Capitalised borrowing costs(2)
Total
income statement.
Bank debt funding facility
Capitalised borrowing costs
Total
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 FY22
103
103
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
15.
Income taxes (continued)
Deferred tax assets and liabilities
(e)
Assets
Provisions
Accruals and prepayments
Depreciation
Lease liabilities
Tax losses
Sundry temporary differences
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
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
2022
$m
33.9
13.5
16.8
302.0
-
4.8
371.0
(355.6)
15.4
75.3
10.0
274.4
2.4
362.1
3.6
365.7
(355.6)
10.1
358.0
13.0
-
371.0
278.2
92.8
371.0
353.3
9.8
2.6
365.7
365.7
-
365.7
2021
$m
29.0
13.6
15.6
295.4
0.4
4.0
358.0
(343.1)
14.9
75.3
10.6
265.4
1.0
352.3
1.0
353.3
(343.1)
10.2
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
(f)
Tax losses
Unrecognised deferred tax assets
7.5
7.7
Deferred tax assets have not been recognised in respect of the above tax losses because it is not considered probable that future taxable
profit will be available against which they can be realised.
103
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
104
104
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
2022
$m
33.9
13.5
16.8
302.0
-
4.8
371.0
(355.6)
15.4
75.3
10.0
274.4
2.4
362.1
3.6
365.7
(355.6)
10.1
358.0
13.0
-
371.0
278.2
92.8
371.0
353.3
9.8
2.6
365.7
365.7
-
365.7
2021
$m
29.0
13.6
15.6
295.4
0.4
4.0
358.0
(343.1)
14.9
75.3
10.6
265.4
1.0
352.3
1.0
353.3
(343.1)
10.2
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
15.
(g)
Income taxes (continued)
Tax transparency report
In May 2016, the government announced the release of the Board of Taxation’s final report on the voluntary Tax Transparency Code (Code).
The Code is a set of principles and 'minimum standards' to guide the disclosure of tax information by businesses and to inform stakeholders
about their compliance with Australian taxation laws.
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 15 (b))
A reconciliation of accounting profit to tax expense and to income tax payable (Note 15 (c))
Identification of material temporary (Note 15 (c)) and non-temporary differences (Note 15 (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 2022 and 2021 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 and 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 China-based subsidiaries that co-ordinate 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.
For the period ended 2 July 2022
15.
Income taxes (continued)
Deferred tax assets and liabilities
Accruals and prepayments
(e)
Assets
Provisions
Depreciation
Lease liabilities
Tax losses
Sundry temporary differences
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
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:
Charged / (credited) to the income statement
Opening balance
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
(f)
Unrecognised deferred tax assets
Tax losses
7.5
7.7
Deferred tax assets have not been recognised in respect of the above 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 FY22
105
105
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
15.
(g)
Income taxes (continued)
Tax transparency report (continued)
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 FY22, the gross value of international related party transactions
in and out of Australia represented less than 2 per cent of revenue.
Australian income taxes paid
Super Retail Group is a large taxpayer and paid corporate income tax of $151.5 million in FY22 and $72.4 million in FY21.
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.
105
15.
(g)
For the period ended 2 July 2022
Income taxes (continued)
Tax transparency report (continued)
Other jurisdictions
The Group includes subsidiary companies that are incorporated in jurisdictions outside Australia as summarised in the table below:
Country
China(1)
Nature of activities
New Zealand
Active trading operations (SCA and Macpac) and dormant entities
Co-ordinating the sourcing of trading stock for SCA, rebel and BCF
(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 FY22, the gross value of international related party transactions
in and out of Australia represented less than 2 per cent of revenue.
Australian income taxes paid
Super Retail Group is a large taxpayer and paid corporate income tax of $151.5 million in FY22 and $72.4 million in FY21.
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
106
106
16.
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
2022
$m
90.8
3.9
-
3.2
97.9
9.6
30.8
40.4
2021
$m
88.6
4.5
0.3
3.6
97.0
9.9
16.7
26.6
Provisions for employee benefits includes accrued annual leave, long service leave, accrued bonuses and 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 2 July 2022 there is a provision to recognise payments for additional
overtime and allowances to current and former team members and associated taxes of $5.8 million (2021: $6.9 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.
During the reporting period, the Group recognised additional make-good provisions on new and existing leases to reflect increases in
construction costs.
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
(c)
Onerous contracts
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.
Onerous contracts includes the provision for certain obligations related to some surrendered lease arrangements. As at 2 July 2022 these
obligations were nil (2021: $0.3 million).
(d)
Other provisions
The current provision for other items includes the provision for store refunds.
A deferred tax liability is recognised in relation to some of the Group’s indefinite life intangibles. The tax base assumed in determining the
amount of the deferred tax liability is the capital cost base of the assets.
(e)
Movement in provisions
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.
Movements in each class of provision during the period, except for Other, are set out below:
2022
Opening balance as at 26 June 2021
Additional provisions recognised
Unwind of discount
Provisions used
Closing balance as at 2 July 2022
Employee benefits
$m
98.5
77.1
Make-good
$m
21.2
14.5
Onerous contracts
$m
0.3
-
-
(75.2)
100.4
1.2
(2.2)
34.7
-
(0.3)
-
Total
$m
120.0
91.6
1.2
(77.7)
135.1
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
107
107
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
16.
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.
Bonus plans
The Group recognises a liability and an expense for bonuses 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 12 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.
107
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
108
108
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
17.
(a)
Financial assets and financial liabilities
Financial instruments
The Group holds the following financial instruments:
2022
Financial assets
Cash and cash equivalents
Trade and other receivables
Derivative financial instruments
Total
Financial liabilities
Trade and other payables
Borrowings
Lease liabilities
Total
2021
Financial assets
Cash and cash equivalents
Trade and other receivables
Derivative financial instruments
Total
Financial liabilities
Trade and other payables
Borrowings
Lease liabilities
Total
Notes
8
22
13
14
12
Notes
8
22
13
14
12
Derivatives used
for hedging
$m
-
-
11.9
11.9
-
-
-
-
Derivatives used
for hedging
$m
-
-
3.6
3.6
-
-
-
-
Financial assets and
liabilities at
amortised cost
$m
13.4
53.6
-
67.0
451.4
-
1,010.7
1,462.1
Financial assets and
liabilities at
amortised cost
$m
242.3
38.4
-
280.7
563.4
-
989.6
1,553.0
Total
$m
13.4
53.6
11.9
78.9
451.4
-
1,010.7
1,462.1
Total
$m
242.3
38.4
3.6
284.3
563.4
-
989.6
1,553.0
The Group’s exposure to various risks associated with the financial instruments is discussed in Note 22 – 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.
For the period ended 2 July 2022
16.
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
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
interest expense.
Employee benefits – short-term obligations
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.
Contributions are made by the Group to an employee superannuation fund and are charged as expenses when incurred.
Retirement benefit obligations
Bonus plans
The Group recognises a liability and an expense for bonuses 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 12 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
Onerous contracts
Employee benefits
patterns.
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.
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.
Judgements have been made in the calculations as to the number of overtime hours and allowance payments based on assumed work
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
109
109
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
17.
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.
2022
Financial assets
Derivatives used for hedging – forward foreign
exchange contracts
Total
Financial liabilities
Derivatives used for hedging
Total
2021
Financial assets
Derivatives used for hedging – forward foreign
exchange contracts
Total
Financial liabilities
Derivatives used for hedging
Total
Level 1
$m
-
-
-
-
Level 1
$m
-
-
-
-
Level 2
$m
11.9
11.9
-
-
Level 2
$m
3.6
3.6
-
-
Level 3
$m
-
-
-
-
Level 3
$m
-
-
-
-
Total
$m
11.9
11.9
-
-
Total
$m
3.6
3.6
-
-
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.
109
(b)
(i)
Total
Total
Total
Total
For the period ended 2 July 2022
17.
Financial assets and financial liabilities (continued)
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.
2022
Financial assets
Derivatives used for hedging – forward foreign
exchange contracts
Financial liabilities
Derivatives used for hedging
2021
Financial assets
Derivatives used for hedging – forward foreign
exchange contracts
Financial liabilities
Derivatives used for hedging
Level 1
$m
Level 1
$m
-
-
-
-
-
-
-
-
Level 2
$m
11.9
11.9
-
-
Level 2
$m
3.6
3.6
-
-
Level 3
$m
Level 3
$m
-
-
-
-
-
-
-
-
Total
$m
11.9
11.9
-
-
Total
$m
3.6
3.6
-
-
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.
(ii)
Valuation techniques used to determine fair value
Specific valuation techniques used to value financial instruments include:
the use of quoted market prices or dealer quotes for similar instruments;
curves;
the fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield
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.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
110
110
17.
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 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.
FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or loss on a debt investment that is
subsequently measured at FVPL is recognised in profit or loss and presented net within other gains/(losses) in the period in which it arises.
Equity instruments
The Group subsequently measures all equity investments at fair value. Where the Group’s management have elected to present fair value
gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to profit or loss following
the derecognition of the investment. Dividends from such investments continue to be recognised in profit or loss as other income when
the Group’s right to receive payments is established.
Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) in the statement of profit or loss as applicable.
Impairment losses (and reversal of impairment losses) on equity investments measured at FVOCI are not reported separately from other
changes in fair value.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
111
111
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
17.
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.
18.
Earnings per share
Basic earnings per share
(a)
Total basic earnings per share attributable to the ordinary equity holders of the company
Diluted earnings per share
(b)
Total diluted earnings per share attributable to the ordinary equity holders of the company
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 $244.1 million (2021: $306.8 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
2022
Cents
106.8
2021
Cents
133.4
105.8
132.1
108.1
136.0
2022
Number
2021
Number
225,826,500
2,058,479
225,577,445
2,273,476
227,884,979
227,850,921
$m
$m
Information concerning the classification of securities
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.
111
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
112
112
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
18.
Earnings per share (continued)
2022
2021
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
17.
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.
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.
18.
Earnings per share
(a)
Basic earnings per share
(b)
Diluted earnings per share
Total basic earnings per share attributable to the ordinary equity holders of the company
2022
Cents
106.8
2021
Cents
133.4
Total diluted earnings per share attributable to the ordinary equity holders of the company
105.8
132.1
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.
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.
19.
Contributed equity
(a)
Share capital
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
Ordinary shares fully paid (225,826,500 ordinary shares as at 2 July 2022)
Movement in ordinary share capital
(i)
Balance 27 June 2020
Shares issued under performance rights(1)
Shares issued from equity raise – Retail Entitlement
Less: Transaction costs arising on share issue
Balance 26 June 2021
Shares issued under performance rights(2)
2022
$m
740.7
Number of Shares
Issue Price
219,697,707
54,798
6,073,995
-
225,826,500
-
-
$7.19
-
-
2021
$m
740.7
$m
698.1
-
43.7
(1.1)
740.7
-
Balance 2 July 2022
(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).
(2) Performance rights fulfilled through on-market share purchases.
225,826,500
740.7
241.2
301.0
(c)
Normalised earnings per share (non-IFRS measure)(1)
From continuing operations attributable to the ordinary equity holders of the company
108.1
136.0
(1) Normalised profit attributable to ordinary equity holders is $244.1 million (2021: $306.8 million) – Note 4(b).
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 a retail entitlement offer which settled
on 9 July 2020. The issue of shares represent fully paid ordinary shares in Super Retail Group Limited.
(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
2022
Number
2021
Number
225,826,500
2,058,479
225,577,445
2,273,476
227,884,979
227,850,921
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
113
113
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
19.
Contributed equity (continued)
(a)
Share capital (continued)
Performance rights over 185,997 (2021: 1,121,283) ordinary shares were issued during the period with 293,907 (2021: 172,653) performance
rights vesting during the period. Vesting of performance rights were fulfilled through on-market share purchases. Under the share option
plan, no ordinary shares were issued during the period (2021: nil). Information relating to performance rights and options outstanding at the
end of the financial year are set out in Note 30 – 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.
20.
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 and restricted shares 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
2022
$m
1.7
22.1
8.3
(8.0)
24.1
3.4
(1.7)
1.7
19.7
(4.5)
6.9
22.1
2.5
8.4
(2.6)
8.3
(8.0)
-
(8.0)
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)
113
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
114
114
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
20.
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 17 – 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
Net profit for the period attributable to owners of Super Retail Group
Dividends paid
Retained profits at the end of the financial period
2022
$m
468.2
241.2
(185.2)
524.2
21.
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
Loss on write down in investment in associate
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) in receivables
- (decrease) / increase in net current tax liability
- (increase) in inventories
- (decrease) / increase in payables
- increase / (decrease) in provisions
- (increase) in deferred taxes
Net cash inflow from operating activities
2022
$m
241.2
305.2
2.0
5.7
-
(0.3)
6.9
0.4
47.0
(17.2)
(49.7)
(103.2)
(107.2)
12.7
(3.1)
340.4
2021
$m
285.7
301.0
(118.5)
468.2
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
For the period ended 2 July 2022
19.
Contributed equity (continued)
(a)
Share capital (continued)
Performance rights over 185,997 (2021: 1,121,283) ordinary shares were issued during the period with 293,907 (2021: 172,653) performance
rights vesting during the period. Vesting of performance rights were fulfilled through on-market share purchases. Under the share option
plan, no ordinary shares were issued during the period (2021: nil). Information relating to performance rights and options outstanding at the
end of the financial year are set out in Note 30 – 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.
20.
Reserves and retained earnings
(a)
Reserves
Foreign currency translation reserve
Share-based payments reserve
Hedging reserve
NCI equity reserve
Total
(i)
Movements
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 and restricted shares expense
Balance at the end of the financial period
Balance at the beginning of the financial period
Hedging reserve
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
2022
$m
1.7
22.1
8.3
(8.0)
24.1
3.4
(1.7)
1.7
19.7
(4.5)
6.9
22.1
2.5
8.4
(2.6)
8.3
(8.0)
-
(8.0)
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)
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
115
115
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
22.
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
2022
$m
11.9
11.9
-
-
2021
$m
3.6
3.6
-
-
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 17 – 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 17 – 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
115
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
116
116
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
22.
Financial risk management
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
22.
Financial risk management (continued)
This note explains the Group’s exposure to financial risks and how these risks could affect the Group’s future financial performance. Current
(b)
Market risk (continued)
year profit or loss information has been included where relevant to add further context.
Market risk
Foreign exchange
Interest rate
Exposure
arising from
Future commercial
transactions
Recognised financial assets
and liabilities not
denominated in AUD
Cash flow forecasting
Sensitivity analysis
Measurement
Sensitivity analysis
Management
contracts
Forward foreign exchange
Interest rate swaps
Credit risk
Liquidity risk
Long-term borrowings at
trade and other receivables
Borrowings and other
variable rates
and derivative financial
liabilities
Cash and cash equivalents,
instruments
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.
Derivative Financial Instruments are used only for economic hedging purposes and not as trading or speculative instruments. The Group has
(a)
Derivative Financial Instruments
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
(i)
Classification of derivatives
2022
$m
11.9
11.9
-
-
2021
$m
3.6
3.6
-
-
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 17 – 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.
For information about the methods and assumptions used in determining the fair value of derivatives please refer to Note 17 – Financial
(ii)
Fair value measurement
assets and financial liabilities.
(b)
Market risk
(i)
Foreign exchange risk
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
The weighted average hedge rate of the forward exchange contracts as at 2 July 2022 is 0.7411 (2021: 0.7671)
Trade receivables
Trade payables
2022
USD
$m
2.3
26.0
68.9
44.4
113.3
2022
CNY
m
1.6
29.0
2021
USD
$m
1.5
46.1
63.8
69.5
133.3
2021
CNY
m
1.5
61.4
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 2 July 2022, no hedges were designated as ineffective (2021: 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:
Group companies are required to hedge their foreign exchange risk exposure using forward contracts transacted by the finance department.
Total unrealised gains
- unrealised gains on USD foreign exchange contracts
2022
$m
11.9
11.9
2021
$m
3.6
3.6
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
117
117
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
22.
Financial risk management (continued)
(b) Market risk (continued)
(i) Foreign exchange risk (continued)
Group sensitivity
Based on the financial instruments held at 2 July 2022, 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 $9.7 million lower/$11.9 million higher (2021: $11.1 million lower/$13.5 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 and all interest rate swaps were terminated. 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
Notes
2022
Financial assets
Cash and cash equivalents
Trade and other receivables
8
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
12
13
14
16
11.7
-
11.7
0.00%
-
-
-
-
-
n/a
11.7
-
-
-
193.4
-
-
-
193.4
-
-
-
571.9
-
-
-
571.9
-
-
-
245.4
-
-
-
245.4
Non-
interest
bearing
$m
1.7
53.6
55.3
-
451.4
-
100.4
551.8
Total
$m
13.4
53.6
67.0
1,010.7
451.4
-
100.4
1,562.5
(193.4)
(571.9)
(245.4)
(496.5)
(1,495.5)
For the period ended 2 July 2022
22.
Financial risk management (continued)
(b) Market risk (continued)
(i) Foreign exchange risk (continued)
Group sensitivity
Based on the financial instruments held at 2 July 2022, 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 $9.7 million lower/$11.9 million higher (2021: $11.1 million lower/$13.5 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 and all interest rate swaps were terminated. 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.
The Group’s exposure to interest rate risk and the effective weighted average interest rate by maturity periods is set out in the following
Interest rate risk exposures
table:
Fixed interest maturing in
Floating
1 year or
Over 1 to 5
More than
interest rate
Notes
$m
less
$m
years
$m
5 years
$m
Non-
interest
bearing
$m
1.7
53.6
55.3
-
-
451.4
100.4
551.8
-
-
-
-
-
-
Total
$m
13.4
53.6
67.0
1,010.7
451.4
-
100.4
1,562.5
-
-
-
-
-
-
-
-
-
-
-
-
193.4
571.9
245.4
193.4
571.9
245.4
(193.4)
(571.9)
(245.4)
(496.5)
(1,495.5)
2022
Financial assets
Cash and cash equivalents
Trade and other receivables
8
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
12
13
14
16
11.7
-
11.7
0.00%
-
-
-
-
-
n/a
11.7
117
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
118
118
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
22.
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
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
8
12
13
14
16
240.6
-
240.6
0.00%
-
-
-
-
-
n/a
-
-
-
-
-
-
-
-
-
193.9
562.5
233.2
-
-
-
-
-
-
-
-
-
193.9
562.5
233.2
Non-
interest
bearing
$m
1.7
38.4
40.1
-
563.4
-
98.5
661.9
Total
$m
242.3
38.4
280.7
989.6
563.4
-
98.5
1,651.5
240.6
(193.9)
(562.5)
(233.2)
(621.8)
(1,370.8)
Group sensitivity
The Group’s main interest rate risk typically 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 2022 and 2021 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 loans
An analysis by maturities is provided in (d) below.
2022
$m
-
2021
$m
-
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 no interest
rate swaps have been entered into as core debt remains nil.
As at 2 July 2022, 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 $0.2 million lower/higher (2021: unchanged), mainly as a result of higher/lower interest
expense on bank loans.
(c)
Credit risk
Credit risk arises from cash and cash equivalents, favourable derivative financial instruments and deposits with banks and financial
institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables and committed transactions.
(i) Risk management
Credit risk is managed on a Group basis. For banks and financial institutions, only independently rated parties with a minimum 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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
119
119
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
22.
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
Unrestricted access was available at balance date to the following lines of credit:
Total facilities
- bank debt funding facility
- bank overdraft facility
- multi-option facility (including indemnity/guarantee)
Total
Facilities used at balance date
- bank debt funding facility
- bank overdraft facility(1)
- multi-option facility (including indemnity/guarantee)
Total
Unused balance of facilities at balance date
- bank debt funding facility
- bank overdraft facility
- multi-option facility (including indemnity/guarantee)
Total
2022
$m
600.0
35.0
16.0
651.0
-
19.3
5.3
24.6
600.0
15.7
10.7
626.4
2021
$m
600.0
35.0
16.0
651.0
-
-
6.1
6.1
600.0
35.0
9.9
644.9
(1) As at 2 July 2022, $19.3 million (2021: nil) of the bank overdraft facility has been drawn. The bank overdraft is an integral part of the Group’s cash
management and in accordance with financing arrangements is included as part of cash and cash equivalents (refer Note 7).
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 2022. 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 2.93% - 3.33% (2021: 1.37% - 1.62%).
Maturities of financial liabilities
all non-derivative financial liabilities; and
(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
119
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
120
120
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
22.
Financial risk management (continued)
(d) Liquidity risk (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
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
Unrestricted access was available at balance date to the following lines of credit:
For the period ended 2 July 2022
22.
Financial risk management (continued)
(c)
Credit risk (continued)
(i) Risk management (continued)
regions.
(ii) Security
agreement.
(d) Liquidity risk
Total facilities
- bank debt funding facility
- bank overdraft facility
- multi-option facility (including indemnity/guarantee)
Total
Total
Total
Facilities used at balance date
- bank debt funding facility
- bank overdraft facility(1)
- multi-option facility (including indemnity/guarantee)
Unused balance of facilities at balance date
- bank debt funding facility
- bank overdraft facility
- multi-option facility (including indemnity/guarantee)
2022
$m
600.0
35.0
16.0
651.0
-
19.3
5.3
24.6
600.0
15.7
10.7
626.4
2021
$m
600.0
35.0
16.0
651.0
-
-
6.1
6.1
600.0
35.0
9.9
644.9
(1) As at 2 July 2022, $19.3 million (2021: nil) of the bank overdraft facility has been drawn. The bank overdraft is an integral part of the Group’s cash
management and in accordance with financing arrangements is included as part of cash and cash equivalents (refer Note 7).
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 2022. 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 2.93% - 3.33% (2021: 1.37% - 1.62%).
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
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.
of the cash flows.
2022
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
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
Less than 6
months
$m
6-12
months
$m
Between 1
and 2
years
$m
Between 2
and 5
years
$m
451.4
-
99.0
550.4
-
-
113.9
113.9
-
-
205.3
205.3
-
-
465.1
465.1
Over 5
years
$m
-
-
264.9
264.9
Total
contractual
cash flows
$m
451.4
-
1,148.2
1,599.6
Carrying
amount
(assets) /
liabilities
$m
451.4
-
1,010.7
1,462.1
(150.1)
138.2
(11.9)
(16.1)
14.7
(1.4)
-
-
-
-
-
-
-
-
-
(166.2)
152.9
(13.3)
(11.9)
-
(11.9)
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
Carrying
amount
(assets) /
liabilities
$m
563.4
-
989.6
1,553.0
(121.6)
121.3
(0.3)
(54.0)
52.4
(1.6)
-
-
-
-
-
-
-
-
-
(175.6)
173.7
(1.9)
(3.6)
-
(3.6)
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
121
121
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
23.
Capital management
(a)
Risk management
The Group’s objectives when managing capital, including cash, debt and equity, are to safeguard its ability to continue as a going concern and
to ensure that a flexible, secure and cost-effective supply of funds is available to meet the Group’s operating and investment requirements.
In order to maintain or adjust the optimal capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital
to shareholders, issue new shares or sell assets to reduce debt.
The Group monitors a range of financial metrics such as net debt to EBITDA ratio and 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 2 July
2022 and 26 June 2021 were as follows:
Non-IFRS measures
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 $13.1m (2021: positive $241.4m).
2022
$m
249.2
107.7
8.1
99.3
464.3
280.4
744.7
8.1
280.4
288.5
2.58
(0.03)
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)
Loan Covenants
(i)
Financial covenants are provided by Super Retail Group 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 2022 and 2021 financial years. There are no assets
pledged as security in relation to the unsecured debt in the 2022 financial year (2021: nil).
121
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
122
122
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
The Group’s objectives when managing capital, including cash, debt and equity, are to safeguard its ability to continue as a going concern and
to ensure that a flexible, secure and cost-effective supply of funds is available to meet the Group’s operating and investment requirements.
Ordinary shares
Dividends paid by Super Retail Group Limited during the financial year were as follows:
23.
Capital management (continued)
(b)
Dividends
2022
$m
2021
$m
For the period ended 2 July 2022
23.
Capital management
(a)
Risk management
In order to maintain or adjust the optimal capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital
to shareholders, issue new shares or sell assets to reduce debt.
The Group monitors a range of financial metrics such as net debt to EBITDA ratio and 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
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 2 July
(being finance costs rental expenses).
2022 and 26 June 2021 were as follows:
Normalised net profit after tax (pre-AASB 16 Leases)
Depreciation and amortisation (excludes impairment)
Non-IFRS measures
Add: Taxation expense
Net finance costs
EBITDA
EBITDAR
Rental expense
Net finance costs
Rental expense
Fixed charges
Fixed charge cover ratio
Net debt to EBITDA ratio(1)
(i)
Loan Covenants
(1) Normalised net debt (pre-AASB 16 Leases) is positive $13.1m (2021: positive $241.4m).
2022
$m
249.2
107.7
8.1
99.3
464.3
280.4
744.7
8.1
280.4
288.5
2.58
(0.03)
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)
Final dividend for the period ended 26 June 2021 of 55.0 cents per share (2020: 19.5 cents per
share) paid on 7 October 2021. Fully franked based on tax paid at 30%
124.2
44.0
Interim dividend for the period ended 25 December 2021 of 27.0 cents (2020: 33.0 cents per
share) paid on 14 April 2022. 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 43.0 cents per
ordinary share (2021: 55.0 cents per ordinary share), fully franked based on tax paid at 30%.
Aggregate amount of the dividend expected to be paid on 17 October 2022, out of retained profits
as at 2 July 2022, but not recognised as a liability at year end
Franking credits
The franked portions of dividends paid after 2 July 2022 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
2 July 2022.
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%
61.0
185.2
181.8
3.4
185.2
74.5
118.5
116.3
2.2
118.5
97.1
124.2
252.4
231.2
Financial covenants are provided by Super Retail Group 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 2022 and 2021 financial years. There are no assets
pledged as security in relation to the unsecured debt in the 2022 financial year (2021: nil).
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 $41.6 million (2021:
$53.2 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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
123
123
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
24.
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 28 – Investments in controlled entities. Details on associates and joint ventures can be found at
Note 25(b) – Business combinations.
(c)
Disclosures relating to key management personnel are set out in Note 29 – Key management personnel disclosures.
Key Management Personnel
Directors
(d)
The names of the persons who were Directors of Super Retail Group Limited during the financial year were Sally Pitkin AO, Reg Rowe,
Howard Mowlem, Peter Everingham, Annabelle Chaplain AM, Gary Dunne, Judith Swales and Anthony Heraghty.
(e)
There are no amounts due from Directors of the consolidated Group and their director-related entities (2021: 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:
2022
$
2021
$
Store lease payment(1)
10,477,402
9,553,918
(1) Rent on properties, with rates which are deemed to be on an arm's-length basis. Rent payable at year-end was Nil (2021: nil).
The financial year of 27 June 2021 to 2 July 2022 is a period of 53 weeks, compared to the comparative financial year of 28 June 2020 to 26
June 2021 of 52 weeks. This has resulted in 13 monthly rent payments in the current reporting period, compared to 12 monthly rent payments
in the comparative reporting period.
25.
Business combinations
(a)
Subsidiaries
2022
The Group’s subsidiaries at 2 July 2022 are as detailed in Note 28 - Investments in controlled entities. There were no changes to the Group’s
ownership interest in these entities.
2021
There were no changes to the Group’s subsidiaries during FY21.
(b)
Associates and joint ventures
2022
Autoguru Australia Pty Ltd
The Group currently holds a 38.29 per cent ownership interest in Autoguru Australia Pty Ltd. During the reporting period, the Group’s
investment was considered to be impaired and the investment was written down. A loss of $5.7 million has been recognised within
administration costs in the Group’s consolidated income statement.
Autocrew Australia Pty Ltd
On 15 August 2017 the Group acquired a 50% ownership interest in Autocrew Australia Pty Ltd in joint venture with Robert Bosch (Australia)
Pty Ltd. The joint venture was established to open full service auto workshops initially in the Greater Sydney area. Only two workshops were
ever opened. During the 2019 reporting period the Group’s investment in Autocrew was impaired to nil due to the result of its poor trading.
During the current period, the Group, in conjunction with Robert Bosch, wound up Autocrew Australia Pty Ltd.
2021
There were no changes to the Group’s associates or joint ventures during FY21.
123
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
124
124
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
24.
Related party transactions
Transactions with related parties are at arm’s length unless otherwise stated.
(a)
Parent entities
The parent entity within the Group is Super Retail Group Limited, which is the ultimate Australian parent.
(b)
Subsidiaries, associates and joint ventures
Interests in subsidiaries are set out in Note 28 – Investments in controlled entities. Details on associates and joint ventures can be found at
Note 25(b) – Business combinations.
(c)
Key Management Personnel
(d)
Directors
Disclosures relating to key management personnel are set out in Note 29 – Key management personnel disclosures.
The names of the persons who were Directors of Super Retail Group Limited during the financial year were Sally Pitkin AO, Reg Rowe,
Howard Mowlem, Peter Everingham, Annabelle Chaplain AM, Gary Dunne, Judith Swales and Anthony Heraghty.
(e)
Amounts due from related parties
There are no amounts due from Directors of the consolidated Group and their director-related entities (2021: nil).
(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:
2022
$
2021
$
Store lease payment(1)
10,477,402
9,553,918
(1) Rent on properties, with rates which are deemed to be on an arm's-length basis. Rent payable at year-end was Nil (2021: nil).
The financial year of 27 June 2021 to 2 July 2022 is a period of 53 weeks, compared to the comparative financial year of 28 June 2020 to 26
June 2021 of 52 weeks. This has resulted in 13 monthly rent payments in the current reporting period, compared to 12 monthly rent payments
The Group’s subsidiaries at 2 July 2022 are as detailed in Note 28 - Investments in controlled entities. There were no changes to the Group’s
ownership interest in these entities.
in the comparative reporting period.
25.
Business combinations
(a)
Subsidiaries
2022
2021
There were no changes to the Group’s subsidiaries during FY21.
(b)
Associates and joint ventures
2022
Autoguru Australia Pty Ltd
The Group currently holds a 38.29 per cent ownership interest in Autoguru Australia Pty Ltd. During the reporting period, the Group’s
investment was considered to be impaired and the investment was written down. A loss of $5.7 million has been recognised within
administration costs in the Group’s consolidated income statement.
Autocrew Australia Pty Ltd
On 15 August 2017 the Group acquired a 50% ownership interest in Autocrew Australia Pty Ltd in joint venture with Robert Bosch (Australia)
Pty Ltd. The joint venture was established to open full service auto workshops initially in the Greater Sydney area. Only two workshops were
ever opened. During the 2019 reporting period the Group’s investment in Autocrew was impaired to nil due to the result of its poor trading.
During the current period, the Group, in conjunction with Robert Bosch, wound up Autocrew Australia Pty Ltd.
2021
There were no changes to the Group’s associates or joint ventures during FY21.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
26.
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 2 July 2022 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 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
2022
$m
3,317.6
0.4
3,318.0
2021
$m
3,235.1
0.3
3,235.4
(1,768.6)
(1,686.2)
(434.1)
(91.7)
(223.2)
(430.3)
(45.0)
(0.4)
(2,993.3)
324.7
(99.5)
225.2
$m
225.2
5.8
5.8
231.0
$m
537.4
-
537.4
225.2
(185.2)
577.4
(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
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
125
125
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
26.
Deed of cross guarantee (continued)
(b)
Consolidated Balance Sheet
Set out below is a consolidated balance sheet as at 2 July 2022 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
Provisions
Total current liabilities
Non-current liabilities
Lease liabilities
Provisions
Total non-current liabilities
Total liabilities
NET ASSETS
EQUITY
Contributed equity
Reserves
Retained profits
TOTAL EQUITY
2022
$m
6.9
44.9
732.4
11.9
796.1
190.5
14.5
218.6
870.0
798.4
2,092.0
2,888.1
443.9
180.8
18.6
92.3
735.6
774.5
38.0
812.5
1,548.1
1,340.0
740.7
21.9
577.4
1,340.0
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
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
26.
Deed of cross guarantee (continued)
(b)
Consolidated Balance Sheet
Set out below is a consolidated balance sheet as at 2 July 2022 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
Provisions
Total current liabilities
Non-current liabilities
Lease liabilities
Provisions
Total non-current liabilities
Total liabilities
NET ASSETS
EQUITY
Contributed equity
Reserves
Retained profits
TOTAL EQUITY
125
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
126
126
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
27.
Parent entity financial information
The individual financial statements for the parent entity show the following aggregate amounts:
2022
$m
6.9
44.9
732.4
11.9
796.1
190.5
14.5
218.6
870.0
798.4
2,092.0
2,888.1
443.9
180.8
18.6
92.3
735.6
774.5
38.0
812.5
1,548.1
1,340.0
740.7
21.9
577.4
1,340.0
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
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
2022
$m
264.0
1,070.1
24.8
25.0
2021
$m
316.5
1,123.6
71.7
71.9
1,045.1
1,051.7
740.7
22.1
282.3
1,045.1
176.2
176.2
740.7
19.7
291.3
1,051.7
266.1
266.1
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
127
127
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
28.
Investments in controlled entities
The Group’s subsidiaries at 2 July 2022 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)
Macpac Holdings Pty Ltd(1)
Macpac Limited
Macpac New Zealand Limited
Macpac Retail Pty Ltd(1)
MP Finco Pty Limited(1)
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)
Infinite 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
2021
%
100
2022
%
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.
For the period ended 2 July 2022
28.
Investments in controlled entities
The Group’s subsidiaries at 2 July 2022 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.
Principal Activities
Equity Holding
2022
2021
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 Holdings Pty Ltd(1)
Macpac Limited
Macpac New Zealand Limited
Macpac Retail Pty Ltd(1)
MP Finco Pty Limited(1)
Mouton Noir IP Limited
Macpac Group Holdings Pty Limited(1)
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 Pty Ltd(1)
Super Retail Commercial Pty Ltd(1)
Super Retail Group Services Pty Ltd(1)
Super Retail Group Trading (Shanghai) Ltd
VBM Retail (HK) Limited(2)
Infinite 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
Australia
Australia
Australia
China
Hong Kong
New Zealand
Australia
Sports retail
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
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
100
100
Super Cheap Auto (New Zealand) Pty Limited
New Zealand
New Zealand
Product acquisition and distribution
Australia
Product acquisition and distribution
Super Retail Group Services (New Zealand) Limited
New Zealand
(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.
127
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
128
128
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
29.
Key Management Personnel disclosures
(a)
Key Management Personnel compensation
Short-term employee benefits
Long-term employee benefits
Post-employment benefits
Share-based payments
2022
$
8,925,373
1,171,349
632,552
3,079,147
2021
$
7,895,340
788,389
202,501
3,651,950
13,808,421
12,538,180
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:
Amounts paid to key management personnel as shareholders
Dividends
30.
(a)
Share-based payments
Executive Performance Rights
2022
$
56,509,512
2021
$
36,125,381
The Company has established the Super Retail Group Employee Equity Incentive Plan (“the EIP”) to assist in the retention and motivation of
executives of Super Retail Group (Participants). It is intended that 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 Long-Term Incentive (LTI) 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 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
FY21 covered LTI reward for both FY21 and FY22 and is based on performance over the two-year period of the MTBP. For the Performance
Rights granted on 1 September 2019, these have been tested based on the FY22 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 were also tested based on the FY22 results
and vest from the year of testing over three years at one-third per year.
Certain senior team members (excluding Executive KMP) were also granted Performance Rights during the current financial year as granted
on 3 November 2021. These Performance Rights include a target for Net Profit Before Tax with a 100 per cent weighting and are based on
the performance of FY23. These will vest from the year of testing over two years at 50 per cent per year.
The table below summarises Performance Rights granted under the plan.
Number of Performance Rights
Grant Date
2022
1 September 2016
1 September 2017
1 September 2018
1 September 2019
1 November 2020
3 November 2021
Balance at start
of the year
(Number)
73,546
89,240
336,944
656,963
1,116,783
-
2,273,476
Granted during
the year
(Number)
-
-
-
-
-
185,997
185,997
Exercised during
the year
(Number)
(61,271)
(40,035)
(165,970)
(26,631)
-
-
(293,907)
Forfeited during
the year
(Number)
(967)
(2,882)
(12,496)
(31,567)
(49,428)
(9,747)
(107,087)
Balance at the
end of the year
(Number) (1)
11,308
46,323
158,478
598,765
1,067,355
176,250
2,058,479
2021
1 September 2015
1 September 2016
1 September 2017
1 September 2018
1 September 2019
1 November 2020
9,952
147,054
465,885
344,698
695,470
-
1,663,059
-
-
-
-
-
1,121,283
1,121,283
(9,952)
(73,508)
(89,193)
-
-
-
(172,653)
-
-
(287,452)
(7,754)
(38,507)
(4,500)
(338,213)
-
73,546
89,240
336,944
656,963
1,116,783
2,273,476
(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 FY22
129
129
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
30.
Share-based payments (continued)
(a)
Executive Performance Rights (continued)
Performance Rights issued under the plan may not be transferred unless approved by the Board. There were no cancellations or modifications
to awards during the current or prior reporting period.
Subject to any adjustment in the event of a bonus issue, each Performance Right is an entitlement to subscribe for one share. Upon the
exercise of a Performance Right by a Participant, each share issued will rank equally with other shares of the Company.
The weighted average remaining contractual life of Performance Rights outstanding as at the end of the period was 1.1 years (2021: 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 (nil for rights), 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 expected volatility reflects historical data and current expectations and is not indicative of future trends or other
actual outcome. Non-market vesting conditions such as service are excluded from fair value. The fair values and model inputs for
Performance Rights granted during the period included:
Fair value of Performance Rights granted
Grant date
Expiry dates
Share price at grant date
Expected price volatility of the Group’s shares
Expected dividend yield
Risk-free interest rate
2022 Performance Rights
$11.31
3 November 2021
1 Sep 2023, 1 Sep 2024
$13.33
21.1%
6.6%
0.89%
(b)
Restricted shares – Executive short-term incentive scheme
Under the Group’s short-term incentive (STI) scheme, executives receive 70 per cent of their annual STI achieved in cash and 30 per cent in
the form of restricted shares in the Company. The restricted shares are granted in August of each year following the release of the Group’s
financial results by on-market purchase. Restricted shares are ordinary shares in the Company which are subject to certain time-based
restrictions on disposal and vesting. As the shares are ordinary shares the executives receive dividends and each share ranks equally with
other shares of the Company.
The number of shares to be granted is determined based on the value of the achieved STI divided by the weighted average price at which the
Company’s shares are traded on the ASX in the five days following the release of the Group’s financial results ($12.53 for the rights granted
during FY22 and $8.92 for the rights granted in FY21) and represents the accounting fair value. The expense is recognised over the period
during which the executives become unconditionally entitled to the shares.
The table below summarises restricted shares granted under the plan.
Balance at the beginning of the reporting period
Granted during the year
Vested during the year(1)
Balance at the end of the reporting period
(1) Vesting of restricted shares refers to restrictions being lifted.
2022
2021
Number of shares Number of shares
-
83,141
-
83,141
129,567
(55,596)
157,112
83,141
The weighted average remaining contractual life of restricted shares outstanding as at the end of the period was 0.6 years (2021: 0.5 years).
(c)
Expenses arising from equity-settled share-based payments transactions
Executive Performance Rights
Restricted shares
2022
$m
6.1
0.8
6.9
2021
$m
7.7
-
7.7
129
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
130
130
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
Performance Rights issued under the plan may not be transferred unless approved by the Board. There were no cancellations or modifications
to awards during the current or prior reporting period.
Share-based payments
Share-based compensation benefits are provided to certain employees via the Super Retail Group Employee Equity Incentive Plan.
30.
Share-based payments (continued)
Significant Accounting Policies
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.
31.
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.
PricewaterhouseCoopers Australia
Assurance services
(a)
(i)
Audit and review of financial statements(1)
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)
(i)
Network firms of PricewaterhouseCoopers Australia
Taxation services
Tax compliance services, including review of Company income tax returns
Total remuneration of network firms of PricewaterhouseCoopers Australia
2022
$
736,440
-
736,440
267,356
267,356
88,511
88,511
1,092,307
2021
$
734,840
-
734,840
163,537
163,537
-
-
900,377
25,237
25,237
47,011
47,011
For the period ended 2 July 2022
30.
Share-based payments (continued)
(a)
Executive Performance Rights (continued)
Subject to any adjustment in the event of a bonus issue, each Performance Right is an entitlement to subscribe for one share. Upon the
exercise of a Performance Right by a Participant, each share issued will rank equally with other shares of the Company.
The weighted average remaining contractual life of Performance Rights outstanding as at the end of the period was 1.1 years (2021: 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 (nil for rights), 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 expected volatility reflects historical data and current expectations and is not indicative of future trends or other
actual outcome. Non-market vesting conditions such as service are excluded from fair value. The fair values and model inputs for
Performance Rights granted during the period included:
Fair value of Performance Rights granted
Grant date
Expiry dates
Share price at grant date
Expected price volatility of the Group’s shares
Expected dividend yield
Risk-free interest rate
2022 Performance Rights
3 November 2021
1 Sep 2023, 1 Sep 2024
$11.31
$13.33
21.1%
6.6%
0.89%
(b)
Restricted shares – Executive short-term incentive scheme
Under the Group’s short-term incentive (STI) scheme, executives receive 70 per cent of their annual STI achieved in cash and 30 per cent in
the form of restricted shares in the Company. The restricted shares are granted in August of each year following the release of the Group’s
financial results by on-market purchase. Restricted shares are ordinary shares in the Company which are subject to certain time-based
restrictions on disposal and vesting. As the shares are ordinary shares the executives receive dividends and each share ranks equally with
other shares of the Company.
The number of shares to be granted is determined based on the value of the achieved STI divided by the weighted average price at which the
Company’s shares are traded on the ASX in the five days following the release of the Group’s financial results ($12.53 for the rights granted
during FY22 and $8.92 for the rights granted in FY21) and represents the accounting fair value. The expense is recognised over the period
during which the executives become unconditionally entitled to the shares.
The table below summarises restricted shares granted under the plan.
Balance at the beginning of the reporting period
Granted during the year
Vested during the year(1)
Balance at the end of the reporting period
(1) Vesting of restricted shares refers to restrictions being lifted.
Executive Performance Rights
Restricted shares
2022
2021
Number of shares Number of shares
83,141
129,567
(55,596)
157,112
2022
$m
6.1
0.8
6.9
-
-
83,141
83,141
2021
$m
7.7
-
7.7
The weighted average remaining contractual life of restricted shares outstanding as at the end of the period was 0.6 years (2021: 0.5 years).
(c)
Expenses arising from equity-settled share-based payments transactions
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.
Total auditors’ remuneration
(1) The fees in relation to the audit and review of the FY21 Financial Statements have been restated to reflect the total fees paid in relation to that period.
1,117,544
947,388
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
131
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SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 2 July 2022
32.
Contingencies
Guarantees
Guarantees issued by the bankers of the Group in support of various rental
and inventory arrangements.
The maximum future rental payments guaranteed amount to:
The maximum future inventory payments guaranteed amount to:
2022
$m
4.7
1.7
2021
$m
4.7
2.6
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. A contingent liability may exist for any exposure over and
above current provisioning levels.
33.
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 $4.7 million as at 2 July 2022 (26 June 2021: $5.4 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 12 - Leases for details of Property right-of-use assets and Note 22 – Financial risk management for details of the contractual
maturities of the lease liabilities.
34.
Net tangible asset backing
Net tangible asset per ordinary share
2022
Cents
$2.21
2021
Cents
$1.93
Net tangible asset per ordinary share (NTA) is calculated based on Net Assets of $1,289.0 million (2021: $1,226.5 million) less intangible assets
of $866.0 million (2021: $866.9 million) adjusted for the associated deferred tax liability of $75.3 million (2021: $75.3 million). The number
of shares used in the calculation was 225,826,500 (2021: 225,826,500).
The NTA calculation includes the right-of-use assets in respect of property, plant and equipment leases of $923.7 million (2021: $894.3
million), and the lease liabilities recognised under AASB 16 Leases of $1,010.7 million (2021: $989.6 million). If the right-of-use assets and
associated deferred tax liability were excluded from the calculation, the NTA would have been negative $0.67 per ordinary share (2021:
negative $0.86).
35.
Events occurring after balance date
No matters or circumstance have arisen since 2 July 2022 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.
131
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
132
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
DIRECTORS’ DECLARATION
In the Directors’ opinion:
2022
$m
4.7
1.7
2021
$m
4.7
2.6
(a)
(b)
(c)
the financial statements and notes set out on pages 79 to 131 are in accordance with the Corporations Act, 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 2 July 2022 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 26 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 26.
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. A contingent liability may exist for any exposure over and
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 Executive Officer and the Chief Financial Officer
required by section 295A of the Corporations Act.
This declaration is made in accordance with a resolution of the Directors.
2022
Cents
$2.21
2021
Cents
$1.93
Sally Pitkin AO
Chair
Brisbane
17 August 2022
Anthony Heraghty
Group Managing Director and Chief Executive Officer
For the period ended 2 July 2022
32.
Contingencies
Guarantees
Guarantees issued by the bankers of the Group in support of various rental
and inventory arrangements.
The maximum future rental payments guaranteed amount to:
The maximum future inventory payments guaranteed amount to:
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 $4.7 million as at 2 July 2022 (26 June 2021: $5.4 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 12 - Leases for details of Property right-of-use assets and Note 22 – Financial risk management for details of the contractual
above current provisioning levels.
33.
Commitments
maturities of the lease liabilities.
34.
Net tangible asset backing
Net tangible asset per ordinary share
Net tangible asset per ordinary share (NTA) is calculated based on Net Assets of $1,289.0 million (2021: $1,226.5 million) less intangible assets
of $866.0 million (2021: $866.9 million) adjusted for the associated deferred tax liability of $75.3 million (2021: $75.3 million). The number
of shares used in the calculation was 225,826,500 (2021: 225,826,500).
The NTA calculation includes the right-of-use assets in respect of property, plant and equipment leases of $923.7 million (2021: $894.3
million), and the lease liabilities recognised under AASB 16 Leases of $1,010.7 million (2021: $989.6 million). If the right-of-use assets and
associated deferred tax liability were excluded from the calculation, the NTA would have been negative $0.67 per ordinary share (2021:
negative $0.86).
35.
Events occurring after balance date
(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.
No matters or circumstance have arisen since 2 July 2022 that have significantly affected, or may significantly affect:
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
133
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SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
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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 2 July 2022 and of its financial
performance for the 53 week period ending 2 July 2022
(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 2 July 2022
the consolidated statement of comprehensive income for the 53 week period then ended
the consolidated statement of changes in equity for the 53 week period then ended
the consolidated statement of cash flows for the 53 week period 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
Liability limited by a scheme approved under Professional Standards Legislation.
133
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
134
134
Our audit approach
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 $17.2 million, which represents
approximately 5% 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 5% 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.
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 2 July 2022 and of its financial
performance for the 53 week period ending 2 July 2022
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
the consolidated balance sheet as at 2 July 2022
the consolidated statement of comprehensive income for the 53 week period then ended
the consolidated statement of changes in equity for the 53 week period then ended
the consolidated statement of cash flows for the 53 week period then ended
the notes to the consolidated financial statements, which include significant accounting policies
What we have audited
The Group financial report comprises:
●
●
●
●
●
●
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
Liability limited by a scheme approved under Professional Standards Legislation.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
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Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the key audit matters to the Audit
and Risk Committee.
Key audit matter
How our audit addressed the key audit matter
Carrying value of Goodwill and Brand names
(Refer to note 11) 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 rely 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 volatility in relation to
COVID-19.
Our audit procedures included the following:
Understanding and evaluating the Group’s
processes and controls related to annual
impairment assessments of goodwill and brands
in light of the requirements of Australian
Accounting Standards.
Comparing actual results with budgets 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
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.
Inventory valuation
(Refer to note 9) Inventory $799.6m
The valuation of inventory was a key audit matter
because of the judgements involved in estimating the
net realisable value (NRV) of inventory and adjusting
inventory cost for attributable overheads and rebates
received.
Our audit procedures included the following:
Developing an understanding of and evaluating
the Group’s processes and controls related to
inventory valuation in light of the requirements of
Australian Accounting Standards.
Testing the mathematical accuracy of the
inventory provision.
135
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136
136
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report for the current period. The key audit matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters. Further, any commentary on the outcomes of a
particular audit procedure is made in that context. We communicated the key audit matters to the Audit
and Risk Committee.
Key audit matter
How our audit addressed the key audit matter
Carrying value of Goodwill and Brand names
(Refer to note 11) 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 rely 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 volatility in relation to
COVID-19.
Our audit procedures included the following:
Understanding and evaluating the Group’s
processes and controls related to annual
impairment assessments of goodwill and brands
in light of the requirements of Australian
Accounting Standards.
Comparing actual results with budgets 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
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.
Inventory valuation
(Refer to note 9) Inventory $799.6m
Our audit procedures included the following:
Developing an understanding of and evaluating
The valuation of inventory was a key audit matter
the Group’s processes and controls related to
because of the judgements involved in estimating the
inventory valuation in light of the requirements of
net realisable value (NRV) of inventory and adjusting
inventory cost for attributable overheads and rebates
received.
Australian Accounting Standards.
Testing the mathematical accuracy of the
inventory provision.
Key audit matter
How our audit addressed the key audit matter
Assessing the inventory provision using data
analysis techniques to compare the carrying value
to the sales price for each item.
Assessing the reasonableness of the inventory
provision in light of the Group’s accounting policy.
Evaluating the Group's methodology for
capitalising overheads and rebates to inventory 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 53 week period ending 2 July 2022, 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.
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
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SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
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 48 to 77 of the annual report for the 53
week period ended 2 July 2022.
In our opinion, the remuneration report of Super Retail Group Limited for the 53 week period ended 2
July 2022 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
17 August 2022
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 48 to 77 of the annual report for the 53
week period ended 2 July 2022.
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
17 August 2022
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SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
138
138
SHAREHOLDER INFORMATION
For the period ended 2 July 2022
The information set out in this section is current as at 10 August 2022.
Securities exchange listing
The ordinary shares of the Company are listed on the Australian Securities Exchange under the ASX code SUL.
Shares on issue
The Company has 225,826,500 fully paid ordinary shares on issue, held by 22,001 shareholders.
Distribution of shareholders
The following table shows the distribution of the Company's shareholders by size of shareholding and number of shareholders and shares.
Holding
1-1,000
1,001 – 5,000
5,001 -10,000
10,001 – 100,000
100,001 and over
Total
Ordinary shares
Number of shareholders
Number of shares
% of shares on issue
12,717
7,674
1,058
511
41
22,001
5,012,902
18,008,455
7,600,733
10,179,198
185,025,212
225,826,500
2.22
7.97
3.37
4.51
81.93
100.00
There were 965 shareholders (representing 18,493 ordinary shares) holding less than a marketable parcel of shares.
In our opinion, the remuneration report of Super Retail Group Limited for the 53 week period ended 2
20 largest holders
July 2022 complies with section 300A of the Corporations Act 2001.
Details of the 20 largest holders of ordinary shares in the Company are as follows:
Registered holder
1.
SCA FT Pty Ltd
2.
3.
4.
5.
6.
7.
8.
9.
10
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
HSBC Custody Nominees (Australia) Limited
Citicorp Nominees Pty Limited
J P Morgan Nominees Australia Pty Limited
BNP Paribas Noms Pty Ltd
National Nominees Limited
Re-Grow Futures Pty Ltd
Citicorp Nominees Pty Limited
SCCASP Holdings Pty Ltd
Santos L Helper Pty Ltd
Mr Kenneth Joseph Hall
Ms Tracey Leanne Rowe
Ms Tanya Joeann Southam
Ms Jodi Maria Thomas
Ms Janene Julie Young
Pacific Custodians Pty Limited
HSBC Custody Nominees (Australia) Limited – A/C 2
Mr Robert Edward Thorn
BNP Paribas Nominees Pty Ltd HUB24 Custodial Serv Ltd
HSBC Custody Nominees (Australia) Limited <
Number of ordinary
shares
% of ordinary
shares
61,490,627
54,947,349
19,765,629
19,570,437
7,414,782
5,924,838
3,167,000
1,748,217
1,232,804
904,246
777,143
727,029
648,346
625,298
611,876
555,251
435,676
426,665
424,073
401,707
27.23
24.33
8.75
8.67
3.28
2.62
1.40
0.77
0.55
0.40
0.34
0.32
0.29
0.28
0.27
0.25
0.19
0.19
0.19
0.18
Total for Top 20
Total number of ordinary shares
181,798,993
225,826,500
80.50
100.00
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
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139
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SHAREHOLDER INFORMATION (continued)
For the period ended 2 July 2022
Substantial shareholders
The number of voting shares held by substantial shareholders and their associates, as disclosed in substantial holding notices given to the
Company in accordance with the Corporations Act, is set out below:
Name
SCA FT Pty Ltd
Challenger Limited
Unquoted securities
Number of ordinary shares in
notice
56,954,670
% of ordinary shares in
notice
28.99
Date notice received
2 August 2013
12,186,174
5.40
7 April 2022
There are 2,058,479 unlisted performance rights on issue under the Company's employee incentive plans, held by 98 holders.
Distribution of holders of performance rights
The following table shows the distribution of the Company's holders of performance rights and number of holders and performance rights.
Holding
1-1,000
1,001 – 5,000
5,001 -10,000
10,001 – 100,000
100,001 and over
Total
Voting rights
Performance rights
Number of holders
Number of performance
rights
% of performance
rights on issue
3
39
17
34
5
98
1,979
120,874
133,122
882,470
920,034
2,058,479
0.1%
5.9%
6.5%
42.8%
44.7%
100.00
At general meetings of the Company, each member holding ordinary shares may vote in person or by proxy, attorney or (if the member is a
body corporate) corporate representative. The voting rights attached to ordinary shares are as follows:
-
-
-
on a show of hands, every person present who is a member or a proxy, attorney or corporate representative of a member has one vote;
on a poll, every member present in person or by proxy, attorney or corporate representative has one vote for each fully paid ordinary
share held by the member; and
every member who duly lodges a valid direct vote in respect of a resolution has one vote for each fully paid ordinary share held by the
member.
Performance rights do not carry any voting rights.
On-market share acquisitions
During FY22, 423,474 ordinary shares in the Company were purchased on-market at an average price of $12.01 per share for the purposes of
satisfying employee entitlements under the Company's employee incentive plans.
On-market buy back
There is no current on-market buy-back of the Company’s shares.
Voluntary escrow
There are no securities or securities subject to voluntary escrow in the Company.
139
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
140
140
SHAREHOLDER INFORMATION (continued)
For the period ended 2 July 2022
Substantial shareholders
The number of voting shares held by substantial shareholders and their associates, as disclosed in substantial holding notices given to the
Company in accordance with the Corporations Act, is set out below:
Number of ordinary shares in
% of ordinary shares in
notice
56,954,670
12,186,174
notice
28.99
5.40
Date notice received
2 August 2013
7 April 2022
There are 2,058,479 unlisted performance rights on issue under the Company's employee incentive plans, held by 98 holders.
Distribution of holders of performance rights
The following table shows the distribution of the Company's holders of performance rights and number of holders and performance rights.
Performance rights
Number of holders
rights on issue
Number of performance
% of performance
3
39
17
34
5
98
rights
1,979
120,874
133,122
882,470
920,034
2,058,479
0.1%
5.9%
6.5%
42.8%
44.7%
100.00
Name
SCA FT Pty Ltd
Challenger Limited
Unquoted securities
Holding
1-1,000
1,001 – 5,000
5,001 -10,000
10,001 – 100,000
100,001 and over
Total
Voting rights
At general meetings of the Company, each member holding ordinary shares may vote in person or by proxy, attorney or (if the member is a
body corporate) corporate representative. The voting rights attached to ordinary shares are as follows:
on a show of hands, every person present who is a member or a proxy, attorney or corporate representative of a member has one vote;
on a poll, every member present in person or by proxy, attorney or corporate representative has one vote for each fully paid ordinary
every member who duly lodges a valid direct vote in respect of a resolution has one vote for each fully paid ordinary share held by the
-
-
-
share held by the member; and
member.
Performance rights do not carry any voting rights.
On-market share acquisitions
During FY22, 423,474 ordinary shares in the Company were purchased on-market at an average price of $12.01 per share for the purposes of
satisfying employee entitlements under the Company's employee incentive plans.
There is no current on-market buy-back of the Company’s shares.
On-market buy back
Voluntary escrow
There are no securities or securities subject to voluntary escrow in the Company.
SHAREHOLDER INFORMATION (continued)
For the period ended 2 July 2022
Shareholder calendar(1)
Event
Full-year results announcement
Ex-dividend date for final dividend
Record date for final dividend
DRP election date for final dividend
Payment date for final dividend
Annual General Meeting
Interim results announcement
Ex-dividend date for interim dividend
Record date for interim dividend
DRP election date for interim dividend
Payment date for interim dividend
Date
17 August 2022
6 September 2022
7 September 2022
8 September 2022
17 October 2022
27 October 2022
22 February 2023
8 March 2023
9 March 2023
10 March 2023
14 April 2023
(1) Dates are subject to change. Changes will be notified to the ASX as required.
2022 Annual General Meeting
The Company's 2022 AGM will be held at 11.30am (AEST) on Thursday, 27 October 2022. Details of the meeting will be sent to shareholders
separately.
Dividend details
The Company generally pays a dividend on its fully paid ordinary shares twice a year following the interim and final results announcements.
The proposed dates for FY23 are in the calendar above.
The Company's Dividend Reinvestment Plan (DRP) remains active. The DRP is optional and offers eligible shareholders the opportunity to
acquire fully paid ordinary shares in the Company rather than receiving dividends in cash. A shareholder can elect to participate in or terminate
their involvement in the DRP at any time.
Shareholder enquiries
Shareholders who wish to enquire about their shareholding in the Company may contact the Company’s share registry at:
Link Market Services Limited
Locked Bag A14
South Sydney NSW 1235 Australia
Telephone: 1800 170 502 (within Australia)
Facsimile:
Email:
Website:
+61 1800 170 502 (outside Australia)
+61 2 9287 0303
registrars@linkmarketservices.com.au
www.linkmarketservices.com.au
Shareholders can access their current holding details as well as their transaction history, view dividend statements and payments made,
download statements and documents, change their address, update their communication preferences and banking details, and check their
tax details online via portfolio login on Link Market Services' Investor Centre at www.linkmarketservices.com.au.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
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SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
Glossary
Defined term
Definition
Defined term
Definition
$
AASB
AGM
Australian dollars, unless
indicated otherwise
Australian Accounting
Standards Board
Annual General Meeting
Annual Report
the Company's FY22 Annual Report
ARC
ASIC
ASX
Board
CFO
Committee or Board
Committee
Company or Super
Retail Group
Corporations Act
Audit and Risk Committee
Australian Securities and
Investments Commission
Australian Securities Exchange or
ASX Limited ABN 98 008 624 691
and the market operated by ASX
Limited
the Board of Directors of the
Company
Chief Financial Officer
a committee of the Board
Super Retail Group Limited ABN
81 108 676 204
Corporations Act 2001 (Cth)
Directors
the directors of the Company
DRP
EIP
EPS
ESG
Executive KMP
FBT
FY22
Dividend Reinvestment Plan
the Super Retail Group Employee
Equity Incentive Plan
earnings per share
Environmental, Social and
Governance
Key Management Personnel of the
Company other than Non-Executive
Directors
Fringe Benefits Tax
the financial year ended 2 July 2022,
being the 53 week period from
27 June 2021 to 2 July 2022 (and
inclusive of those two dates)
Group
Group MD and CEO
the Company and its consolidated
subsidiaries
Group Managing Director and Chief
Executive Officer
HRRC
KMP
KPI
LTI
LTI plan
MTBP
NPBT
NPS
PBT
PwC
ROC
Scope 1 and 2
emissions
STI
STI scheme
TCFD
Human Resources and
Remuneration Committee
Key Management Personnel
Key Performance Indicator
Long-Term Incentive
the Company's Long-Term
Incentive plan, as described in
Section 6 of the Remuneration
Report
Medium-Term Business Plan
net profit before tax
Net Promoter Score
profit before tax
PricewaterhouseCoopers
return on capital
GHG Protocol Corporate Standard
classifies a company’s Greenhouse
Gas emissions into ‘scopes’.
Scope 1 emissions are direct
emissions from owned or controlled
sources. Scope 2 emissions are
indirect emissions from the
generation of purchased energy.
Short-Term Incentive
the Company's Short-Term Incentive
scheme, as described in Section 6 of
the Remuneration Report
Financial Stability Board's Task
Force on Climate-related Financial
Disclosures
Corporate Directory
142
SUPER RETAIL GROUP LIMITED
ABN 81 108 676 204
www.superretailgroup.com.au
Registered Office
6 Coulthards Avenue
STRATHPINE QLD 4500 Australia
Telephone:
Facsimile:
+61 7 3482 7900
+61 7 3205 8522
Company Secretary
Rebecca Farrell
Share Registry
Link Market Services
Level 12, 680 George Street
SYDNEY NSW 2000 Australia
Mail to:
Locked Bag A14
SOUTH SYDNEY NSW 1235 Australia
Telephone:
Facsimile:
Email:
1800 170 502 (within Australia)
+61 1800 170 502 (outside Australia)
+61 2 9287 0303
registrars@linkmarketservices.com.au
www.linkmarketservices.com.au
Auditors
PricewaterhouseCoopers
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
143
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
Notes
Notes
144
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22 145
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY22
Notes
www.superretailgroup.com.au