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Annual Report
2023
Inspiring you to
live your passion
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 2
Acknowledgement of Country
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. These statements 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. There are inherent limitations with
respect to scenario analysis, and it is difficult
to predict which, if any, of the scenarios might
eventuate. Scenarios do not constitute definitive
outcomes or probabilities, and scenario analysis
relies on assumptions that may or may not be,
or prove to be, correct and may or may not
eventuate. Scenarios may also be impacted by
additional factors to the assumptions disclosed.
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
laws or regulations,
required by applicable
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.
There are references to ‘IFRS’ and ‘non-IFRS’
financial information in this report. Non-IFRS
financial measures are financial measures
other than those defined or specified under
any relevant accounting standard and may not
be directly comparable with other companies’
information. Non-IFRS financial measures
are used to enhance the comparability of
information between reporting periods. Non-
IFRS financial information should be considered
in addition to, and is not intended to be a
substitute for, IFRS financial information and
measures. Non-IFRS financial measures are not
subject to audit or review.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23Super 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.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
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Chair’s message
CEO’s message
About us
FY23 performance highlights
Our strategy
Our communities
FY23 ESG highlights
Review of operations and FY23 performance
Group
Supercheap Auto
rebel
BCF
Macpac
Risk
Climate
Our team
Board of Directors
Executive Leadership Team
Directors’ Report
Remuneration Report
Financial Statements
Shareholder information
Glossary
Corporate Directory
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 3
Chair’s
message
Dear Shareholders
I’m pleased to report another strong
year for Super Retail Group.
Capitalising on the strength of
our four core brands, our growing
connection with customers and
the expertise and passion of our
team members, Super Retail Group
confirmed its status as one of the
nation’s leading retail businesses.
Despite a testing 2023 financial year,
the Group showed its resilience,
navigating the tougher conditions
confronting the retail sector to post
record sales and higher profits.
A challenging external environment -
headlined by cost-of-living pressures
on the back of 10 successive
interest rate increases during the
year to manage escalating inflation
- reinforced the importance of the
Group’s strategy, adaptability and
sound financial position.
The Group reported a record sales
outcome for FY23, up nine per
cent for the year adjusted for the
additional week of trading in FY22.
Operating in what have proven to be
resilient segments in a fragmented
retail sector, we reinforced the
market-leading position of our four
core brands. I want to acknowledge
each and every one of our 15,000-
plus team members for their
dedication and commitment in
achieving this outcome.
An important contributor to the
robust revenue growth was the
performance of our store network,
with new stores, refurbishments and
innovative formats seeing the Group
ideally positioned to take advantage
of momentum from the return of
traditional shopping patterns after
the pandemic.
The Group’s commitment to
our omni-retail strategy and
strengthening the business by
investing in our store network, team
members and relationship with our
customers helped drive a strong
financial performance during the
reporting period.
In line with our strategy, we remain
relentless in our efforts to nurture
closer relationships with our loyal
customers. As flagged last year,
we are investing significantly in
personalisation and loyalty over
the next 12 months, including the
relaunch of the rebel loyalty
program. With 10 million-plus active
members, we are excited about the
potential for further growth from
engaging our customer loyalty base.
Super Retail Group continued to
work hard to improve the health,
safety and wellbeing of our people.
Although the Group recorded
progress in some areas, the Board
and leadership team recognise
there is more work to do. Our
commitment to addressing critical
risks remains at the forefront of our
health and safety agenda. We are
focused on ongoing improvements
through active leadership and
ownership of our commitments
from all levels of the business.
With a robust operational and
financial performance backed up by
strong and improving team member
engagement, it is appropriate to
acknowledge the leadership of the
Group Managing Director and Chief
Executive Officer Anthony Heraghty
and his experienced management
team. The business has benefited
from the successful execution of a
well-considered strategy to further
strengthen the business.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 4
Capital management
The Board has determined to pay a
fully franked final ordinary dividend
of 44 cents per share, which is at the
upper end of the Group’s dividend
payout policy. In addition to the final
ordinary dividend, shareholders
will receive a fully franked special
dividend of 25 cents per share.
Together with the interim ordinary
dividend of 34 cents per share, this
represents an aggregate dividend
payment to shareholders in FY23 of
103 cents per share.
Board and governance
In taking this opportunity to thank
all Directors for their sound counsel
and support during the year, it is
fitting to acknowledge company
founder Reg Rowe. During the
year, Super Retail Group marked a
milestone in our corporate history,
with Reg’s retirement from the
Board. Shareholders are deeply
familiar with his contribution to this
company, not just to its retailing
and financial success but its strong
values and focus on the customer.
Along with his late wife Hazel, Reg
started Super Retail Group more
than half a century ago and has
shaped the culture of the business.
Today Reg is rightfully recognised as
a legend of Australian retailing.
Since 1972, Reg has served in
various leadership roles, including as
Managing Director, Chair and Non-
Executive Director of the company
and remains the largest shareholder
in the Group. Reg is a committed
long-term shareholder and has
promised to remain a familiar
face to team members across our
network of stores.
The 2024 financial year marks
Super Retail Group’s 20th year as
a company listed on the Australian
Securities Exchange.
As Reg’s vision for the business
evolved into what is unarguably
one of Australia’s most impressive
corporate growth stories, the benefit
of public ownership has allowed
tens of thousands of shareholders to
share in its success.
to improving every day to help
meet our targets and build a more
sustainable business.
In April, we welcomed Mark O’Hare
as Reg’s replacement on the Board.
Mark, who will stand for formal
election at the Annual General
Meeting on 25 October 2023, is the
chairman of the advisory group of
Reg’s private investment vehicle. As
an experienced corporate adviser
with a strong understanding of the
business, Mark has enthusiastically
embraced his Board duties and
responsibilities.
As shareholders would expect, we
continue to evaluate our governance
arrangements and the mix of
expertise and experience among
Directors to ensure the Board
remains well equipped to govern
and support Anthony and the
leadership team. This remains an
ongoing priority.
After reviewing the Board standing
committees and their respective
charters and responsibilities,
Directors resolved to establish
a Board Risk and Sustainability
Committee from September 2023.
At that time the Audit and Risk
Committee will become the Board
Audit Committee. The changes
reflect the growing significance
in the Board’s responsibilities of
sustainability considerations and the
increasing audit-related workload in
relation to sustainability and climate.
The Board has maintained its
focus on providing ethical and
sustainable stewardship of our
operations through greater
transparency and adopting more
responsible choices for our
communities. Having strengthened
our sustainability framework around
our commitment to our people,
community, responsible sourcing,
the circular economy and limiting
the impact of climate change, the
Group continued to report progress
towards our goals in FY23. We
recognise however that we have
more to do and are committed
Looking ahead
Given global economic uncertainty
and the ongoing cost-of-living
pressures, we can expect the 2024
financial year to present challenging
conditions for the retail sector.
As we look to the future, the Board
remains focused on positioning
Super Retail Group for shareholder
returns over the long term and
creating a positive impact on the
communities in which we operate.
Whilst retaining the strength of the
balance sheet, we are continuing to
invest in the business to enhance
our competitive position and
generate long-term value for our
shareholders. Investments during
FY24 spanning store openings and
refurbishments, loyalty programs,
and data analytics will help us
maximise the opportunities
presented by our relationships
with our loyal club customers that
together represent one of the
largest active club memberships in
Australia and New Zealand.
Against this backdrop, the strength
of our brands, our experienced
leadership team and customer
value proposition instils me with
confidence in the prospects for
Super Retail Group over the medium
and long term.
Thank you to all our customers,
shareholders, partners and team
members for your ongoing support.
Sally Pitkin AO
Chair
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 5
CEO’s
message
Dear Shareholders
Despite a challenging
macroeconomic environment, I
am pleased to report another year
of record sales for Super Retail
Group as our four core brands
strengthened their market position
and our active club member base
surpassed 10 million customers.
Sales increased by seven per cent to
$3.8 billion in the 2023 financial year
driven by the ongoing investment in
our store network and the success
of the rebel rCX and BCF superstore
formats, and the ongoing growth
of our club membership to a record
10.3 million active customers.
The Super Retail Group team was
also instrumental in delivering a
record sales year as we experienced
a significant rebound in customer
visits to our stores following the
end of the COVID-19 pandemic.
Our dedicated and passionate team
members continue to help our loyal
customers live their passion every
day and on behalf of the executive
team I would like to thank them
for their efforts over the past 12
months.
With consumer spending
moderating following multiple
interest rate rises in both Australia
and New Zealand to curb inflation,
and a surge in the cost of living
in both countries, sales growth
moderated in the second half
of FY23.
Reflecting a post-pandemic channel
shift to in-store customer visits,
online sales declined to $445
million. Online remains a significant
channel, representing 12 per cent
of total Group sales, with Click &
Collect accounting for about half of
those sales.
Despite this, key performance
measures improved on the prior
year including:
•
•
Like-for-like sales up eight
per cent
Earnings before interest
and tax up 10 per cent to
$438 million
The Board has determined to pay a
fully franked final ordinary dividend
of 44 cents per share, which is at the
upper end of the company’s target
payout range, and a fully franked
special dividend of 25 cents per
share. Together with the interim
dividend of 34 cents per share, this
represents aggregate annual FY23
dividends to shareholders of 103
cents per share.
• Normalised profit before tax up
12 per cent to $391 million
Reg Rowe
•
Statutory net profit after tax up
nine per cent to $263 million
• Normalised net profit after tax
up 12 per cent to $274 million
•
Statutory Earnings Per Share
(EPS) of 117 cents and
normalised EPS of 121 cents.
During the year, we marked a
momentous change in the history
of the Group, with the retirement
of company founder Reg Rowe from
the Board. Reg started Super Retail
Group with his late wife Hazel from
their kitchen table more than 50
years ago and has been part of the
fabric of the Group ever since.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 6
He has served as Managing Director,
Chair and Non-Executive Director
of the company over his journey
with the business and remains the
biggest shareholder in the Group.
During my tenure, as a Non-
Executive Director Reg has helped to
provide a common-sense ballast to
our decision-making and his insights
on retailing are as sharp as they
were when he started the business.
While Reg concluded his Board
tenure with the company during the
year he intends to remain connected
to the business – with regular store
visits and catch-ups with team
members.
On behalf of the entire Super Retail
Group family, I would like to thank
Reg for his service to the company
and his dedication to the business.
Large and loyal
customer base
Our growing, active customer base
remains a key driver of our strong
financial performance. Active
club membership increased by 12
per cent as we added more than
one million participants in FY23,
breaking through the 10 million club
members mark for the first time.
Our active club members are our
highest spending and most loyal
customers, comprising 73 per
cent of total sales for the year,
and represent some of our most
satisfied consumers. Club member
Net Promoter Scores have steadily
increased from 60 in FY19 to 67
in FY23.
We are leveraging our significant
club member data to increasingly
personalise our communications
with these customers, enhancing
their shopping experience and
generating additional value for
the Group.
members to better target active
customers with products and deals
that are tailored to their needs.
Corporate strategy
An engaged and active customer
base is a key plank of our corporate
strategy, which is focused on
delivering organic growth in our
four core brands and excellence in
execution across our store network
and online retailing.
At an investor day during the year,
we set out the key elements of
Super Retail Group’s investment
proposition:
• A unique portfolio of powerful
brands in attractive leisure and
lifestyle categories
• A large and growing customer
loyalty base
• An engaged and passionate
team
• A national network of stores
in Australia and New Zealand,
which gives us extensive
customer reach
• An efficient omni-retail model
• A highly cash generative
business
• A conglomerate model creating
operating synergies.
Our strategic investments during the
pandemic have helped us emerge
as a better business after the
pandemic. We have invested over
$380 million over the past four years
in our four core brands, enhancing
the Group’s omni-capability,
improving customer loyalty and
updating the store network to
capitalise on the growth in our
leisure and lifestyle categories.
In the first half of the new financial
year, we will re-energise our rebel
loyalty program with new member
propositions and branding and will
also commence a personalisation
pilot with Supercheap Auto club
With a robust balance sheet
and ongoing sales and customer
growth, our decision to invest has
set up the business for continued
success despite the macroeconomic
environment remaining challenging
in the period ahead. Given the
uncertainty, the Group intends
to maintain a conservative debt
position over the next 12 months.
We had no drawn bank debt and a
$192 million cash balance at the end
of FY23.
During FY23, the Group has
prudently managed its inventory
levels and our supply chain has
continued to normalise after the
disruption of COVID-19.
While the cost of doing business
was impacted by growing
inflationary pressures, the Group
successfully implemented cost
saving initiatives in sourcing and
workforce management to help
manage its cost base.
Four core brands
Our four core brands continued
to lead their categories and grow
market share with record sales in
FY23. During the year we opened
24 new stores.
Supercheap Auto capitalised on
record active club members and an
extensive refurbishment program
that saw 37 stores upgraded to
our next generation format, and
recorded its best NPS score at the
end of the year.
Supercheap Auto undertook a
record 769,000 in-store fitments
as we continued to assist our
customers with basic car care
services and added more than
550,000 active club members
through the year.
Australia’s favourite sports store
rebel opened four new stores in
regional areas and its 15th rCX store
during the year as the popularity of
the new format continued to attract
strong customer interest. Our three
best performing rCX stores each
achieved sales in excess of
$20 million.
During the year we successfully
launched the BCF superstore
format in Townsville and Kawana in
Queensland. In a great result for the
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 7
business, the Townsville superstore
is on track to achieve $20 million in
sales in its first year.
BCF recorded ten per cent sales
growth in the fishing category
as Australia’s love affair with
recreational angling continued to
grow and the business strengthened
ties with leading brands and key
partners.
There are now 89 stores in the
Macpac network across Australia
and New Zealand, with six new
stores opening during the year.
Macpac products are also now
stocked in 200 rebel and BCF stores
across Australia, which has helped
grow brand awareness and sales.
In FY23, Macpac achieved record full
year sales in excess of $200 million
on the back of 20 per cent-plus
growth in customer transactions.
We have a strong pipeline of 24
additional stores in FY24 as our
network continues to be the
backbone of our omni strategy.
Passionate and
engaged team
I am delighted to report that our
team members – the heart and soul
of our business – continue to be
highly engaged with the business.
We recorded engagement scores
of 81 and 80, both above the
Achievers® benchmark for team
members.
An engaged and effective team is
critical to sales growth and customer
satisfaction, so these scores in our
two team member surveys during
the year were particularly pleasing.
We have devoted considerable time
and resources to improving our
workforce planning and rostering
systems so that our team members
can focus on serving customers and
less time on paperwork. Our new
systems make it easier for our team
members to do their jobs and get
the right number of team members
in stores at the right time.
We are proud to be recognised as
one of the three retailers awarded
the WGEA Employer of Choice for
Gender Equality citation, reflecting
our unwavering commitment to
gender equality. Embracing diversity
is vital for the success of our
business and reflects our dedication
towards a more equal future.
Sustainability
We are making solid progress on
our sustainability agenda, which is
focused on supporting our people
and limiting the impact of our
operations and products on the
environment.
We were again included in the S&P
Global Sustainability Yearbook 2023
and performed in the top quartile in
the Retail industry in the S&P Global
Corporate Sustainability Assessment.
As a Group, we have set a
decarbonisation target of zero Scope
1 and Scope 2 greenhouse gas
emissions by 2030, which includes
the emissions generated by our
operations and from the energy
we use.
We reduced both emission types
against our FY17 base year by 26
per cent through initiatives including
the LED lighting upgrades in our
stores, offices and distribution
centres, expanding behind-the-
meter solar programs and an energy
efficiency program for new and
refurbished stores.
With an increasing focus on
climate-related disclosures, we
are pleased this year to disclose
our increasing alignment to
the Task Force on Climate-
related Financial Disclosures
recommendations for the first
time. These recommendations
cover governance, strategy, risk
management, metrics and targets.
Over the next 12 months, we also
plan to develop our inaugural Reflect
Reconciliation Action Plan to help
guide the business as we seek to
advance the cause of reconciliation
and deliver meaningful initiatives
for our Aboriginal and Torres
Strait Islander team members and
stakeholders.
The year ahead
With cost-of-living pressures
continuing to impact both Australia
and New Zealand, the outlook
for the next 12 months remains
challenging.
We remain confident in our ability
to execute the Group’s strategy and
to perform through the peaks and
troughs of the economic cycle, but
we recognise the potential for rising
interest rates and increased cost of
living pressures to impact consumer
demand.
As a Group we are confident
we are well positioned to manage
the economic turbulence ahead
through an excellent value
proposition for our loyal and
growing customer base.
Our ongoing investment in our store
network, further refurbishments
and enhancements to customer
loyalty programs will support Group
revenue in FY24. While inflation has
slightly moderated in recent times,
it remains high and will flow through
to wages, rent, energy and other
costs and ultimately will result in a
higher cost of doing business.
We have strong brands in resilient
categories such as auto and sports
and a strong balance sheet that
will enable us to support the
organic growth of the business. I
am confident we will continue to
inspire our customers to live their
passion and deliver value for our
shareholders in the year ahead.
Anthony Heraghty
Group Managing Director and
Chief Executive Officer
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 8
CONGRATULATIONS
REG
For Super Retail Group, the
retirement of company founder Reg
Rowe from the Board during the
financial year marked a momentous
chapter in the evolution of the
business.
With his late wife Hazel, Reg founded
Super Retail Group’s original business
in 1972 and served as Managing
Director until 1996.
He was Chairman from 1996 to
2004 and a Non-Executive Director
since the Company’s listing on the
Australian Securities Exchange
in 2004.
Given Reg has held formal roles with
the business for more than 50 years,
his retirement from the Board was
significant. However, Reg intends
to remain a Super Retail Group
shareholder and will continue to be
a familiar face to our team members
through his regular visits to our stores
and offices.
Everyone at Super Retail Group
congratulates Reg on his achievement
in building one of Australia’s most
successful retail businesses and
wishes him all the best for the next
phase of his life.
4 April 2023
Hi Team,
Today I’m writing to let you know that I have decided to retire from the Board of
Super Retail Group.
While I’ll continue to be around the business, after 50 years in formal roles with the
company, it’s time to take more of a back seat. You’ll probably still see me in stores
making sure you’ve got enough stock and signage, and I’ll continue to be a committed
long‐term shareholder, I just won’t be at the Board table from today.
This wasn’t an easy call to make but deep down I know it’s the right decision. I’m sure
everyone would agree that 50 years is a good innings.
It’s been an amazing ride. When Hazel and I were packing and posting boxes at our dinner
table 50 years ago, we never thought our small mail‐order business would become one of
Australia and New Zealand’s most successful retail companies. But here we are, a billion‐
dollar business with more than 700 stores. Wow.
I’m also very confident that we’re in safe hands for continued success over the long term.
Sally and the Board have the right strategy in place to grow the business and deliver for
shareholders. Anthony is an outstanding Chief Executive and he has assembled a highly
capable executive team. I am certain the Board will continue to provide Anthony and his team
with the guidance and support necessary for the company to keep kicking goals.
On days like today when I stop to reflect on what Super Retail Group has become, I’m truly
humbled. It’s a wonderful Australian story, built on hard work, an incredibly dedicated team
and a passion to deliver for our customers. I am so proud that the customer‐first approach we
had when we first started the business remains at the core of the way we work.
I would like to thank the three Chairs who have stewarded the company so well since I
handed over the reins – Dick, Robert and Sally. I also want to thank the CEOs I have worked
alongside – Bob, Peter and Anthony – who have grown the business over three decades.
But most importantly, I would like to thank you, the dedicated team members of Super Retail
Group who have been with me side‐by‐side as we have built this great company. I personally
know many of you who’ve been with us for decades, sharing in our success. Thank you
so much.
As I sign off for the final time as a Board member, I can assure you I will continue to be a part
of the business. I’ll always be popping in to stores to fill up my shed or plan my next trip.
Thank you again for everything. It’s been magic.
Reg
Reg Rowe, 1993
In November 2022, the Large Format Retail
Association recognised Reg as the inaugural
winner of the Lifetime Achievement Award
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 9
ABOUT
US
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
ten million active loyalty club members with the option to
experience our brands whenever and however they choose –
whether that’s through our network of 736 stores or via
Click & Collect or home delivery.
15,599
TEAM MEMBERS
736
STORES
4
SUPPORT
OFFICES
7
DISTRIBUTION
CENTRES
3
COUNTRIES OF
OPERATION
Supercheap Auto is Australia
and New Zealand’s favourite
specialty automotive parts
and accessories retail
business. With 331 stores,
we provide a wide range
of service parts, tools,
and accessories, as well as
products for the garage,
travel, touring and outdoors.
rebel is Australia’s leading
sporting goods retailer with
159 stores across Australia.
Through rich digital and
in-store experiences,
customers from all walks
of life can harness the
transformative power of
sport. With a broad range of
quality product and expert
knowledge, rebel inspires all
Australians to achieve their
sporting dreams and passions.
BCF is a leading outdoor
retailer with 157 stores
across Australia.
With expert knowledge
and service, we provide
everything you need for your
next boating, camping, or
fishing adventure, all under
the one roof.
Macpac is New Zealand’s
original, technical outdoor
brand, delivering quality
gear, made responsibly,
and trusted to last. Tested
and proven in the ultimate
outdoor test lab – New
Zealand – our gear is
designed to equip outdoor
enthusiasts to adventure
better. Launched in 1973,
Macpac has 89 stores
across Australia and New
Zealand and is committed to
delivering a great customer
experience with expert
advice.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 10
Our vision, mission and values
About this report
Corporate governance
Sustainability
Our FY23 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 FY23 Sustainability Report is
available on the Company’s website at
https://www.superretailgroup.com.au.
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 1 July 2023. The
financial year for FY23 represents a
52-week period.
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 FY23 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/.
In this Annual Report, references
to ‘we’, ‘us’, ‘our’ and ‘Group’ refer
to the Company and its subsidiaries.
References in this report to ‘the year’,
‘the period’ or ‘the reporting period’
are to the financial year ended 1 July
2023 (FY23), and comparisons of
FY23 performance are by reference to
the financial year ended 2 July 2022,
unless otherwise stated.
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 11
FY23 PERFORMANCE
HIGHLIGHTS
$3.8bGroup sales
7%
SALES GROWTH
$438m
NORMALISED EBIT
$391m
NORMALISED PBT
$274m
NORMALISED NET
PROFIT AFTER TAX
$263m
STATUTORY NET
PROFIT AFTER TAX
103¢
DIVIDENDS PER
SHARE, FULLY
FRANKED
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 12
CUSTOMER LOYALTY AND
OMNI-RETAIL EXECUTION
Online sales growth
(4-YR CAGR to FY23)
22%
Total Group online
18%
Supercheap
Auto
20%
rebel
25%
Click & Collect
29%
BCF
32%
Macpac
19%
Home delivery
Customer loyalty (FY23)
10.3m
Active club members
67
Average
customer NPS
73%
Active club
member % of
Group sales
Sales by channel (FY23)
88%
In-store sales
Click &
Collect
Home
delivery
6%
6%
48%
Click & Collect
% of total
online sales
52%
Home delivery
% of total
online sales
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 13
OUR
STRATEGY
Growing
annual
customer
value
PRIMARY
VALUE
LEVERS
Ensuring
organic
growth and
capital
discipline
Being an
efficient
omni-retailer
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 14
Five strategic drivers
1
GROW THE FOUR
CORE BRANDS
Focus on four core brands,
key categories and
leveraging scale.
Progress (since 2019):
• Opened 66 new stores
• Over 70 store refurbishments
• Successfully introduced multiple new store formats:
― rebel rCX flagship stores
― Supercheap Auto next generation
― BCF superstore and small formats
• Rolling out rebel and BCF regional store expansion
• Introduced Macpac product into BCF and rebel stores
• Extended range by leveraging key brands
• Solidified relationships with global trade partners
2
LEVERAGE CLOSENESS TO
OUR CUSTOMER
Building a personalised
relationship with our
customers, capitalising on
data and insights.
Progress (since 2019):
• Grown active club membership to more than 10m members
• Club member sales have grown faster than total sales
• Completed customer value propositions for all brands
• Developed data science capability
• Commenced a personalisation trial in BCF which continues
• On track to launch new rebel loyalty program in H1 FY24
• Successfully completed loyalty test-and-learns in
Supercheap Auto and rebel
• Improved pricing and promotional execution through
analytical insights
3
CONNECTED OMNI-RETAIL
SUPPLY CHAIN
Continuing to build a
fit-for-purpose integrated
supply chain.
Progress (since 2019):
• Consolidated distribution centres
• Implemented a single warehouse management system
• Established order management system to orchestrate
online orders and improve customer experience
• Opened online high fulfilment stores to improve splits
and on-time delivery
• Implemented international freight system with
new partners
• Continuously enhancing our proactive safety approach
and driving Total Recordable Injury Frequency Rate
(TRIFR) improvement
4
SIMPLIFY THE BUSINESS
Becoming a more efficient
and effective omni-retailer
through optimising
overhead and focusing on
customer-facing investment.
Progress (since 2019):
• Implemented workforce planning solution to underpin right
rostering and enable optimisation of our workforce
• Established quantitative pricing capability to improve pricing,
markdown and clearance outcomes
• Re-platformed gift cards
• Fully migrated IT services to public cloud
• Closed or exited non-core businesses (Rays, Infinite Retail,
AutoGuru, AutoCrew)
• Centralised operating capability in marketing, loyalty,
planning, digital and technology
5
EXCEL IN OMNI-RETAIL
Enhancing our customer
experience through all
touchpoints along the
customer journey.
Progress (since 2019):
• Leveraged our store network to grow Click & Collect sales
faster than home delivery
• Elevated the look and feel of our brand websites
• Utilised AI to provide online product recommendations
• Harmonised online and in-store gross margin contribution –
agnostic as to which channels customers choose to shop
• Developed team expertise both in-store and online through
training and education
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 15
OUR
COMMUNITIES
BE A HERO FOR
HEARTKIDS!
13 - 19
12 - 18
JUNE ‘23
JUNE ‘23
Register for Hero
for HeartKids at
heartkids.org.au
DONATE TODAY AT THE FRONT COUNTER
Supercheap Auto is a Major Partner of HeartKids
Lifeline and the positive
impact of sport on mental
health
In the financial year, rebel
continued its support of Lifeline
with a highly successful campaign
to raise awareness of the benefits
of physical activity for mental health
and wellbeing.
The partnership, originally launched
in 2021, harnesses the powerful,
positive impact of physical activity
on mental health and suicide
prevention.
Studies have also found that
participation in physical activity
is linked to higher self-esteem,
better social skills, fewer depressive
symptoms, and higher confidence.
The social nature of team sport is
associated with better mental health
outcomes, through connection and
collaboration with others.
Since 2021, rebel has donated
$1.2 million to Lifeline and this year
the business became a Principal
Partner of the mental health support
service, joining three other major
Australian companies.
rebel sponsors the ‘Be Active’
fundraising portal on Lifeline
Australia’s website, which allows
the public to fundraise through
Supercheap Auto’s
charitable partners
The Supercheap Auto team not
only inspires customers to live their
passion but supports the community
through charity fundraising,
partnerships and education and
awareness programs in conjunction
with leading Australian and New
Zealand charities and community
organisations.
During FY23, Supercheap Auto
donated $50,000 to each of its
Australian charity partners, Beyond
Blue, HeartKids and the Australian
Road Safety Foundation. Across the
Supercheap Auto store network
in Australia, customers and team
members donated $326,000, with
the business matching customer
donations for each charity to
contribute a total of $114,000.
The Australian stores that raised
the most amount of money for
any of the three charities, also
contributed another $10,000 to
the organisations, on behalf of
Supercheap Auto.
As a multi-year partner of Beyond
Blue, Supercheap Auto also made a
significant contribution to Beyond
Blue’s 24/7 support service, and at
selected stores, facilitates customer
donations for the mental health
organisation.
Supercheap Auto is also a major
partner of HeartKids Limited, an
Australian charity that aims to
raise awareness, funding, and
support for children, teenagers and
adults living with congenital heart
disease nationally. Supercheap Auto
directly supports HeartKids and
provides donation opportunities for
customers at selected stores.
In New Zealand, Supercheap
Auto has had an association with
HeartKids for more than a decade,
with customers and team members
helping raise NZD$228,000, with a
matched donation by Supercheap
Auto New Zealand of NZD$50,000.
Customers make in-store donations
for HeartKids New Zealand, with
selected stores also participating
in additional activities to raise
awareness for kids, teens, adults,
and families affected by childhood
heart conditions.
Enabling customers to be safe
on the roads is also a priority for
Supercheap Auto. During the year,
Supercheap Auto made a significant
donation to long-term partner, the
Australian Road Safety Foundation,
and also facilitated customer
donations in selected stores. All
donations made by customers and
team members go directly to the
Foundation to further develop its
road safety awareness programs,
driver education, advocacy, and
community engagement campaigns.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 16
challenger events and sports. In
October each year, the business also
runs a major fundraising event, which
promotes the benefits of sport for
mental health.
considered functionally extinct.
Reduced or at-risk habitat results in
fewer fish surviving, thriving, and
breeding and that impacts every
fishing trip.
Insights from Super Retail Group’s
engagement surveys and feedback on
the Group’s internal communications
platform, Workplace, shows that
rebel team members are proud of
the partnership and the important
contribution it is making to the
mental health and wellbeing of many
Australians.
OzFish - better habitat,
better fishing
BCF is committed to supporting
and increasing fish populations
and five years ago partnered with
OzFish Unlimited, a not-for-profit
organisation dedicated to the
protection and restoration of
Australian waterways. BCF and OzFish
work together to improve the health
of fish and wildlife resources for
generations to come. The partnership
has restored habitats, helping to
create healthy rivers, lakes, and
oceans, with programs that have
increased wildlife populations for
many native species.
Fish habitats have experienced more
than 200 years of habitat destruction,
jeopardising the future of recreational
fishing. Many of these vital habitats
are not just threatened but are
BCF’s annual Small Change 4 Big
Change donation drive weekend
was another record-breaking event,
raising $81,000 for OzFish. During
FY23, in-store donations by customers
raised $634,000 in total.
In October 2022, BCF launched an
online donations tool to raise further
funds for OzFish and their mission
to improve fishing outcomes around
the country. As well as supporting
OzFish through donations, many BCF
team members are dedicated OzFish
volunteers contributing valuable
hours to projects including shellfish
reef restoration in Moreton Bay and
removal of invasive flora and litter
from local waterways.
Fund for Good - Te Ahu Pātiki
The Macpac Fund for Good actively
involves its team members and
customers in strengthening local
communities by providing financial
and gear grants (apparel and
equipment). The fund supports
non-profit organisations that focus
on issues such as the preservation
and restoration of native plants and
animals, adventure-based education
and outdoor therapy, as well as
Indigenous community initiatives.
In August 2022, Macpac announced
its support for the Te Ahu Pātiki
Charitable Trust, through a three-
year Fund for Good grant. The
Trust safeguards Te Ahu Pātiki,
500-hectares of land on Te Pātaka-o-
Rākaihautū Banks Peninsula, located
close to Macpac’s support office in
Ōtautahi Christchurch. This newly
established public conservation park
includes the highest peaks in the
wider Christchurch area, Te Ahu Pātiki
Mt Herbert and Mt Bradley.
The Trust’s mission is to preserve
biodiversity and support enduring
public access to these summits. The
Fund for Good grant will support
predator control, fencing, track
maintenance, and other projects
that enable the land to return
to native forest over the coming
decades, as well as securing access
for recreational use for future
generations.
Images
Lifeline and rebel’s partnership.
Supercheap Auto’s “Be a Hero for HeartKids”
campaign.
‘Small change 4 Big Change’ campaign for
OzFish weekend.
BCF team member, volunteering for OzFish
creating oyster shell habitats.
The summits of Te Ahu Pātiki Mt Herbert and Mt
Bradley across the harbour. Image credit: Sam
Barrow
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
17
FY23 ESG
HIGHLIGHTS
Achievements
Holder of the WGEA’s Employer
of Choice for Gender Equality
citation for the second
consecutive period
Dow Jones Sustainability Index
score of 57, placing the Group
in the top quartile within the
DJSI retail sector
‘AA’ rating from the MSCI
Rated as Advanced under the
Australian Packaging Covenant
Organisation (APCO)
Macpac achieved Toitū
carbonreduce certification
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 18
People
81 and 80
Engagement survey scores
for September 2022 and
February 2023 above
Achievers* benchmark
11.0
Total Recordable Injury
Frequency Rate (TRIFR)
A 3.5% per cent increase
from prior year (10.7)**
>3,300
Number of team members
participating in the “I Am
Here” program
38%
43%
38%
Female representation at
senior leadership level
Female representation at
Board level
Female representation at
executive leadership level
3 years
Partnership established
between BCF and Clontarf
Foundation and Stars
Foundation, to help young
First Nations people
$578,000
$350,000
NZD $50,000
rebel donated to Lifeline
and helped customers
raise a further $60,355, as
part of our commitment to
mental health support
Supercheap Auto donated
to Beyond Blue, HeartKids
Australia, HeartKids New
Zealand and the Australian
Road Safety Foundation
Macpac and Supercheap Auto
NZ donation to Red Cross
NZ Disaster Fund to support
North Island flood victims.
Macpac helped customers
raise a further NZD$5,512
*Achievers is a global expert
in employee recognition and
engagement
**This is attributed mainly to
higher team member turnover
due in part to the competitive
labour market and increased
volumes, and therefore, manual
handling of product
Planet
26%
11%
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 FY22
Diversion rate across our
stores, support offices, and
distribution centres
1,494,200L
Recycled litres of oil through
Supercheap Auto
125,027
Recycled car batteries
through Supercheap Auto
81,643
Recycled pairs of shoes
through rebel and Macpac’s
in-store collection
>1.6m
Bags refused through
Macpac’s “Refuse a Bag”
program reaching a major
milestone since the program
began in 2018
3%
Percentage reduction of total
electricity use to 78,357 MWh
100 stores
Received new LED lighting
(13% of our Group fleet)
$166,000
Grants and gear provided
through Macpac Fund
for Good
$350,000
Contributed to OzFish and
helped customers raise a
further $634,000 through
BCF for OzFish’s restoration
projects
BEST
PARTNERSHIP
OzFish and BCF were awarded
the Best Partnership Award at
the 10th World Recreational
Fishing Conference for this
continued collaboration
As at 1 July 2023
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 19
REVIEW OF
OPERATIONS
AND FY23
PERFORMANCE
Year in review
Background
The intention is to provide the user
of the financial information with
meaningful comparatives for analysis.
When reviewing the financial results
of the Group, the following factors
require consideration:
- FY23 comprised a 52-week trading
period as compared to 53-weeks
for FY22. An unaudited non-IFRS
comparative (“Adjusted”) has been
provided, which adjusts FY22 down
to 52 weeks and compares against
the FY23 result;
- This annual report references
like-for-like sales growth, which
compares sales for weeks 1 to 52
in FY23 with sales for weeks 2 to
53 in FY22 for stores that were
open for more than one year;
- COVID-19 lockdowns affected the
first half of FY22; and
- An unaudited non-IFRS
reconciliation of statutory profit
after tax to normalised net profit
after tax (“Normalised”) has been
provided.
Overview
Super Retail Group delivered another year of record sales in the period, up
7 per cent on FY22 (up 9 per cent Adjusted) as we continued the successful
execution of the Group strategy. We grew our core brands with new store
openings and refurbishments; we leveraged our closeness to our customers
with strong growth in our club memberships to 10.3 million active members;
and we maintained strong investment in our online sales capabilities and
leveraged our store networks to support digital sales. Following a strong first
half performance cycling a COVID‐19 impacted first half in FY22, sales growth
moderated in the second half as higher interest rates and increased cost of
living expenses began to impact consumer spending.
Pleasingly, despite growing
inflationary pressure, the Group
delivered a normalised profit before
tax margin of 10.3 per cent, higher
than FY22, with Normalised profit
before tax (PBT) of $390.6 million.
This was up $41.0 million or 11.7 per
cent on FY22, with the following key
drivers:
•
Some easing in global
supply chain disruption saw
normalisation of offshore freight
rates. Domestic supply chain
conditions however remained
challenging due to high labour
costs, limited availability of
transport and constraints on
pallet supply.
• While cost of doing business
was impacted by growing
inflationary pressure on wages,
electricity and rent, particularly
in the second half, the Group
successfully implemented cost
saving initiatives in sourcing and
workforce management to help
manage its cost base.
•
The Group expanded its store
network, with 24 new stores
opened during the period.
•
The Board has determined to pay
a special dividend of 25 cents
per share in addition to a final
ordinary dividend of 44 cents per
share, both fully franked.
Omni-retail strategy and
cycling the impact of
COVID-19
The strength of the omni-retail
strategy allows the Group to leverage
the convenience and accessibility of
a national store network to provide
customers with the flexibility to
purchase in-store or online. This was
evident in the first half of the year
as the business experienced a strong
recovery in store traffic and a shift
from online sales back to in-store
sales. Second-half sales growth
moderated as the business cycled a
more normal trading period in FY22.
Sales growth was achieved in all
brands for the year.
Group costs
Group and Unallocated costs of $34.6
million decreased by $3.9 million
compared with FY22. Consistent with
Group strategy, significant expenses
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 20
SALES ($m)
$3,803m
FY23
FY222
FY21
FY20
FY19
$3,803m
$3,551m
$3,453m
$2,825m
$2,710m
ACTIVE CLUB MEMBERS (m)
10.3m
FY23
FY222
FY21
FY20
FY19
10.3m
9.2m
8.0m
6.6m
6.1m
ACTIVE CLUB MEMBERS
% OF TOTAL SALES
73%
FY23
FY222
FY21
FY20
FY19
73%
70%
63%
59%
57%
NORMALISED PBT MARGIN (%)
10.3%
FY23
FY222
FY21
FY20
FY193
10.3%
9.8%
12.6%
7.4%
7.6%
ONLINE SALES ($m)
$445m
FY23
FY222
FY21
FY20
FY19
$445m
$601m
$416m
$291m
$201m
STORES
736
NORMALISED
PROFIT BEFORE
TAX (PBT)
$391m
IN–STORE % OF
TOTAL SALES
88%
CLICK & COLLECT
% OF TOTAL SALES
HOME DELIVERY
% OF TOTAL SALES
6%
6%
Group results
$m
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)
FY23
(52 weeks)
FY22
(53 weeks)
Change Adjusted
change (1)
3,802.6
3,550.9
7.1%
9.1%
263.0
241.2
9.0%
10.7%
438.0
396.6
10.4%
12.0%
11.5%
390.6
10.3%
273.5
716.4
116.5
11.2%
349.6
9.8%
244.1
11.7%
13.4%
12.0%
13.7%
340.4
110.5%
83.8%
106.8
9.1%
n/a
n/a
103.0
70.0
47.1%
(1) Adjusted change is an unaudited non-IFRS measure adjusting FY22 down to
52 weeks to provide a more meaningful comparative to FY23.
(2) FY22 was a 53-week period.
(3) Pre AASB16.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 21
were incurred on customer loyalty.
Increased loyalty costs represent
the investment in the lead-up to the
relaunch of brand loyalty programs,
beginning with rebel in
the first half of FY24.
An adjustment of $1.8 million for
Autoguru Australia Pty Ltd reflected
the proceeds received from the sale
of all the Group’s shares in Autoguru
Australia Pty Ltd following the write
down of the Group’s investment in
that business in the second half of
FY22. Interest received in the period
totalled $3.7 million, due to the
strong cash position and the higher
interest rate environment.
Cash flow
The Group finished the year in a
net cash position of $192.3 million
compared with $13.4 million in FY22.
The increase in net cash was due to
strong operating cash flows of $716.4
million, up $376.0 million on FY22.
Cash conversion represented 88 per
cent of EBITDA adjusted for tax.
Cash outflows from investing
decreased by $16.2 million to $108.5
million, with a further $19.4 million
of capital expenditure incurred in
June 2023 but paid for in FY24.
Capital expenditure included new
store openings and investment in
alternative store formats including
rebel rCX stores and BCF superstores,
which are expected to be important
drivers of future growth.
Balance sheet
Total inventory was $788.6 million,
an improvement of $11.0 million on
FY22. A reduction in inventory units
was partially offset by inflationary
impacts on inventory values. Total
inventory as a percentage of sales
equated to 21 per cent, consistent
with pre-COVID-19 levels. Trade and
other payables were $38.7 million
higher than FY22, due to underlying
trade creditor movements as the
timing and volume of inventory
movements moderated. The net
working capital position moderated
to $326.3 million, down $55.7 million
compared with FY22.
The Group had no drawn bank debt
at the end of the year.
Debt management and
financing
During the reporting period, the
Group refinanced its bank debt
funding facility, extending tenor
and reducing the value of the
overall facility to $550 million. The
combination of the net cash position
and committed debt facilities
provides substantial liquidity capacity
for the Group.
Capital management and
dividends
Having regard to the Group’s strong
balance sheet position, in addition
to payment of a final dividend, the
Board considered it appropriate
to reward shareholders by way of
a special dividend. The Board has
determined to pay a fully franked
final dividend of 44 cents per share
and a fully franked special dividend
of 25 cents per share. Together
with the interim dividend of 34
cents per share, this represents
aggregate annual FY23 dividends to
shareholders of 103 cents per share.
The final dividend and the special
dividend will be paid on 18 October
2023. These dividends have not been
provided for in the consolidated
financial statements and will be
recognised in the FY24 financial
statements.
The amount of the final dividend,
together with the interim dividend,
represents an ordinary dividend
payout ratio of 64 per cent of the full
year underlying NPAT.
The Group is continuing to target a
long-term bank debt gearing position
of between zero and 0.5 times net
debt / EBITDA position (pre AASB-16).
Outlook
The Group is preparing for a more
challenging macro environment to
affect consumer spending in FY24.
Inflation and higher interest rates
are putting pressure on household
budgets and household savings are
being depleted, despite continuing
low unemployment. Increased cost
of living pressures are expected to
reduce discretionary spending and
sharpen customer focus on value.
Super Retail Group has a sound
track record of resilient performance
throughout the economic cycle. The
strength of the brands, our customer
value proposition and the low
average ticket price mean the Group
is well positioned for a more value
conscious retail customer.
The Group remains focused on
our strategy for long-term value
creation through organic growth;
increasing the market share of our
four core brands by investing in new
stores and alternative store formats;
and leveraging our active club
membership base through enhanced
loyalty offers and more personalised
communication with our customers.
NORMALISED NET PROFIT AFTER TAX
Statutory profit for the period after tax
- Wages underpayment and remediation costs
- FWO proceedings
- Losses from associates accounted for using the equity method
- Reversals of provisions previously excluded from normalised NPAT
Total of items not included in NPAT
Normalised net profit after tax
2023
$m
263.0
1.7
8.8
-
-
10.5
273.5
2022
$m
241.2
2.7
-
0.4
(0.2)
2.9
244.1
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 22
2022
$m
340.4
(124.7)
(444.8)
(229.1)
242.3
0.2
13.4
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
2023
$m
716.4
(108.5)
(429.1)
178.8
13.4
0.1
192.3
2023
$m
58.1
788.6
(490.1)
(30.3)
326.3
192.3
-
(1,035.0)
(842.7)
270.4
944.4
846.4
2.7
(147.0)
(32.9)
1,367.6
CASH FLOW
Net cash inflow from operations
Net cash (outflow) from investing
Net cash (outflow) from financing
Net increase / (decrease) in cash
Cash at the beginning of the period
Effects of exchange rates on cash
Cash at the end of the period
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
- Derivatives
- Provisions
- Deferred taxes
Net assets
DIVIDENDS PAID DURING FY23
FY22 final dividend (fully franked)
FY23 interim dividend (fully franked)
Cents per share
Total amount
$m
Payment date
43.0
34.0
97.1
76.8
17 October 2022
14 April 2023
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 23
SUPERCHEAP AUTO
PERFORMANCE
Year in review
Our business
Supercheap Auto is Australia and
New Zealand’s largest retail specialty
automotive parts and accessories
business, part of the growing auto
category. It sells a wide range of
auto products, tools and accessories,
including products for travel, touring,
outdoors, the garage and the shed.
Established in 1972, Supercheap Auto
now has 331 retail stores operating
across Australia and New Zealand.
Key drivers of growth in the auto
category include a steady increase
in the number of registered vehicles
in Australia and New Zealand and
the growing popularity of four-wheel
drive and sports utility vehicles,
domestic road trips and outdoor
adventure.
Financial performance
Supercheap Auto delivered a record
year of sales in the period.
Total sales increased by 8 per cent
(or 10 per cent Adjusted) to $1,448
million, driven by new store openings
and like-for-like sales growth of 10
per cent. The increase in like-for-like
sales reflected higher transaction
volumes and a higher average
transaction value. A key driver was
the Group’s ongoing investment in
the refurbishment of the Supercheap
Auto store network, including the
upgrade of 37 Supercheap Auto
stores to the next generation format.
Auto maintenance was the strongest
performing category, reflecting a
growing shift to do-it-yourself
as customers increasingly service
and maintain their own vehicles
in response to higher cost of living
pressures.
Segment PBT margin improved
by 100 bps, with lower operating
expenses offsetting a decline in gross
margin as industry-wide promotional
activity continued to normalise.
Supercheap Auto delivered online
sales of $115 million, representing
8 per cent of total sales. This was a
decline of 35 per cent compared to
FY22, reflecting an ongoing channel
shift from online to in-store sales
as customers reverted to pre-
pandemic shopping behaviour.
Click & Collect represented 74 per
cent of online sales.
Stores and store network
In the period, Supercheap Auto
opened three stores and closed one,
resulting in 331 stores at period end.
Supercheap Auto is planning to have
a total of 362 stores by the end of
FY26.
Supercheap Auto’s comprehensive
refurbishment and new store
program is aiming to reach over 200
next generation stores by the end
of FY26. These stores will include
increased dedicated floorspace for
growth categories including tools and
four-wheel drive; designated service
zones for “do it for me” fitment
services; improved visibility of Click
& Collect; and better signage and
lighting. Modernised branding in
the next generation stores has been
designed to enable Supercheap Auto
to appeal to a more diverse range of
customers including new entrants
to the category. The Group has been
delighted with the results of the new
store program and the uplift in sales
which has followed the conversion of
existing Supercheap Auto stores to
the next generation format.
Supercheap Auto invested a total of
$24 million of capital expenditure in
its store network in this period.
Customer
Supercheap Auto is a category leader
in the retail auto space, with 90 per
cent brand awareness. More than
49 per cent of customers recognise
Supercheap Auto as their preferred
brand in the auto category.
We have more than 3.7 million active
club members in our club loyalty
program following the addition of
more than 550,000 new members
in this period. These members
represent 64 per cent of Supercheap
Auto’s total sales.
Supercheap Auto made several
enhancements to its club loyalty
program in the period, including
a program relaunch with new
modernised branding, simpler
benefits messaging, removal of the
club membership fee and successful
campaigns focused on member
acquisition.
Supercheap Auto achieved a
customer NPS score of 67 in the
period, up from 65 in FY22.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 24
SALES ($m)
$1,448m
FY23
FY222
FY21
FY20
FY19
$1,448m
$1,340m
$1,309m
$1,120m
$1,041m
ACTIVE CLUB MEMBERS (m)
3.7m
FY23
FY222
FY21
FY20
FY19
3.7m
3.2m
2.3m
1.7m
1.6m
ACTIVE CLUB MEMBERS
% OF TOTAL SALES
64%
FY23
FY222
FY21
FY20
FY19
64%
59%
46%
40%
39%
SEGMENT PBT MARGIN (%)
14.1%
FY23
FY222
FY21
FY20
FY193
14.1%
13.1%
14.7%
11.5%
11.5%
ONLINE SALES ($m)
$115m
FY23
FY222
FY21
FY20
FY19
$115m
$175m
$107m
$82m
$60m
STORES
331
IN–STORE %
OF TOTAL SALES
92%
CLICK & COLLECT
% OF TOTAL SALES
6%
HOME DELIVERY
% OF TOTAL SALES
2%
BRAND
AWARENESS
90%
Stellar Market Research
Australia FY23
AVERAGE ACTIVE
CLUB MEMBER NPS
ACTIVE CLUB
MEMBER GROWTH
67
18%
Supercheap Auto
$m
Sales
Segment EBIT
Segment PBT
PBT margin
FY23
(52 weeks)
FY22
(53 weeks)
Change
Adjusted
change (1)
1,447.9
1,339.8
8.1%
219.4
204.0
14.1%
190.6
176.1
15.1%
15.8%
10.1%
17.6%
18.5%
13.1% 100bps
100bps
(1) Adjusted change is an unaudited non‐IFRS measure adjusting FY22 down to
52 weeks to provide a more meaningful comparative to FY23.
(2) FY22 was a 53-week period
(3) Pre AASB16
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 25
Strategy and outlook
Strategic priorities and key
opportunities for growth
While growing cost of living
pressures are expected to impact
consumer spending in FY24, the
Group expects demand in the auto
category will remain resilient as
customers increasingly adopt a do-
it-yourself approach to servicing and
maintaining their vehicles.
FY24 sales are also expected to
benefit from eight planned new
store openings and the ongoing
refurbishment of the store network.
In response to changing auto and
demographic trends, Supercheap
Auto is offering a range of products
and services that cater for a more
diversified customer base and a
changing mix of cars on Australian
and New Zealand roads.
Supercheap Auto remains focused
on delivering customers an excellent
omni experience across the retail
store, online and fitment service
offerings.
Key near-term growth opportunities
include:
• Growing core auto product
categories exposed to a growing
and ageing carparc(1);
• Developing emerging product
categories arising from the
adoption of electric vehicles;
•
•
•
Extending our core auto offering
into adjacent categories;
Focusing on widening brand
appeal to grow our addressable
market and customer base; and
Increased demand for “do it for
me” fitment services (including
bulbs, wiper blades and
batteries).
Transition to electric vehicles
A key area of strategic planning for
Supercheap Auto is preparing to
adapt to the increased uptake of
electric vehicles in Australia and New
Zealand. Electric vehicles currently
comprise only one per cent of the
Australian carparc, however this is
expected to increase dramatically
in coming years, and Supercheap
Auto is focussing on opportunities to
leverage demand for new products
arising out of increased EV sales.
Approximately 70 per cent of
Supercheap Auto’s revenue
comes from categories which are
independent of vehicle engine
type. While demand for some of
the products Supercheap Auto
currently sells will be impacted by
electric vehicle take up, Supercheap
Auto believes there is a significant
opportunity to benefit from the
transition to electric vehicles by
capturing share in emerging profit
pools such as charging cables, service
parts and accessories.
Separately, the continued growth
of the Australian and New Zealand
carparc remains a tailwind for the
auto category. There are now more
than 25 million registered vehicles in
Australia and New Zealand and the
average age of a vehicle in Australia
has increased to more than 10
years. Supercheap Auto remains
well-positioned to deliver growth in
its core auto categories as a result of
this growing and ageing carparc.
Even with the predicted uplift in
electric vehicle penetration, we
still expect the number of internal
combustion engine vehicles in
Australia over five years old to be a
significant driver of demand. This will
continue to support do-it-yourself
service and maintenance categories
as customers spend more on
maintaining older vehicles.
(1) carparc means the number
of registered vehicles
Supercheap Auto fitment services (including
bulbs, wiper blades and batteries).
Supercheap Auto Redcliffe
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 26
Supercheap
Auto boosts
participation
of young
women in
motor sport
FIA Girls on Track
February 2023.
Image credit: Turn 7 Media
Supercheap Auto is passionate about
increasing female participation in
the automotive and motorsport
sectors and is proud to partner with
Motorsport Australia to support the
FIA Girls On Track program.
Part of Supercheap Auto’s grassroots-
driven partnership with Motorsport
Australia, the Girls On Track program
is a global, not-for-profit initiative
sponsored by the FIA, the governing
body for world motorsport.
Supercheap Auto supports the Inspire
program for girls aged 8-15 and the
Pathways program for young women
aged 15-22.
The Inspire program is designed
to encourage an interest in STEM
subjects and industries amongst
schoolgirls. Motorsport activities
and workshops help the girls gain
exposure to the various career
pathways in the sport. The Pathways
program is aimed at young women
who are passionate about the sport
and want to learn more about
the various roles in the industry.
Pathways events are an opportunity
to hear from women currently
involved in the sport and connect
them with others in the industry.
Girls on Track events offer a positive
first experience of the motorsport
world to inspire and provide
pathways for the next generation
of girls and young women as well
as future STEM leaders, covering
all careers from engineering to
journalism. The objective is to
help defy stereotypes by instilling
confidence in young women about
what they can achieve to grow
the number of females involved in
motorsport over the longer term.
From team owners, to engineers, to
physiotherapists and officials, the
ambassadors have a deep knowledge
about the sport and their areas of
expertise, and act as role models to
support the younger generation into
the industry.
Supercheap Auto supported 15
events all over Australia during
the year, with more than 1,500
participants involved in workshops
and Q&A sessions to learn about
motorsport and the automotive
industry; networking events with key
industry leaders; race team garage
tours; meet-and-greets with racing
teams; pitstop practice; fitness
drills and one-on-one time with the
program mentors. Supercheap Auto
also provides the tools used by the
students in the hands-on activities.
The program is already delivering
results, with FIA Girls On Track
participants moving into roles within
motorsport, including engineering,
mechanic, logistics, event
management and media.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 27
REBEL
PERFORMANCE
Year in review
Our business
rebel is Australia’s leading sporting
goods and apparel retailer.
Since acquisition by Super Retail
Group in 2011, rebel now has 159
retail stores across Australia. It has
longstanding partnerships with
some of the world’s leading global
sports brands including Nike, adidas,
Under Armour, Puma, ASICS and New
Balance thanks to its pre-eminent
position in the Australian sports retail
market.
The brand’s aspiration is to inspire
all Australians to live their sporting
dreams and passion.
As a retailer in the growing sports
category, rebel’s key structural
growth drivers include personal
fitness, health and wellbeing trends,
increased personal leisure time
resulting from flexible workplace
arrangements, and growing female
participation in sport.
Financial performance
rebel delivered a record year of sales
in this period.
Total sales increased by 8 per cent
(or 10 per cent Adjusted) to $1,309
million, driven by like-for-like sales
growth of 9 per cent, reflecting
higher transaction volumes.
A key driver was rebel’s investment
in its new rebel customer experience
(rCX) flagship stores and the
cascading of “homes of sport” zones
for football and basketball into
its next tier stores. The three top
performing rCX stores each achieved
annual sales in excess of $20 million
in the period.
Basketball and football were the
strongest performing categories,
reflecting the successful roll out of
the “homes of sport” format, the
positive impact of the FIFA World Cup
on football sales and a rebound in
participation in grassroots sport.
Segment PBT margin declined by
40 bps, reflecting lower operating
expenses offset by an 80 bps decline
in gross margin due to a shift in
category mix.
Online sales of $198 million
represented 15 per cent of total
sales. Online sales declined by
26 per cent in the period compared
to FY22, reflecting an ongoing
channel shift from online to in-store
sales as customers reverted to pre-
pandemic shopping behaviour. Click
& Collect represented 33 per cent
of online sales.
Stores and store network
In the period, rebel opened a total
of four new stores, resulting in 159
stores at the end of the period. rebel
is aiming to have 165 stores by the
end of FY26.
Additionally, a comprehensive
refurbishment and store upgrade
program is underway at rebel, with
an aim of reaching 27 rCX stores and
20 rCX Elevate stores by the end of
FY26.
rCX stores are large format stores
of more than 2,000 sqm which
showcase an expanded range of
products across high-involvement
sports, with additional emphasis
on the display of products in “must
win” running, gym & fitness, football,
basketball and kids categories. These
stores incorporate experience zones
- including indoor basketball and
football pitches and Sony gaming
consoles - to provide our customers
with a differentiated in-store
experience. The format has received
strong support from some of the
world’s leading global sports brands
and has enabled rebel to gain access
to high-end and marquee products
(e.g. Nike Airmax 270, adidas
originals) and to extended ranges and
exclusive products. rCX Elevate stores
are a smaller (~2,000 sqm) store
format with a single experience zone.
The Group is delighted with the
performance of the new rCX format
stores, which are currently delivering
higher sales than the remainder of
the store network.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 28
SALES ($m)
$1,309m
FY23
FY222
FY21
FY20
FY19
$1,309m
$1,212m
$1,197m
$1,039m
$1,016m
ACTIVE CLUB MEMBERS (m)
3.7m
FY23
FY222
FY21
FY20
FY19
3.7m
3.3m
3.2m
2.9m
2.6m
ACTIVE CLUB MEMBERS
% OF TOTAL SALES
73%
FY23
FY222
FY21
FY20
FY19
73%
69%
68%
66%
61%
SEGMENT PBT MARGIN (%)
11.2%
FY23
FY222
FY21
FY20
FY193
11.2%
11.6%
13.9%
9.2%
9.1%
ONLINE SALES ($m)
$198m
FY23
FY222
FY21
FY20
FY19
$198m
$268m
$193m
$141m
$95m
STORES
159
IN–STORE %
OF TOTAL SALES
85%
CLICK & COLLECT
% OF TOTAL SALES
5%
HOME DELIVERY
% OF TOTAL SALES
10%
BRAND
AWARENESS
92%
Stellar Market Research
Australia FY23
AVERAGE ACTIVE
CLUB MEMBER NPS
ACTIVE CLUB
MEMBER GROWTH
65
13%
rebel
$m
Sales
Segment EBIT
Segment PBT
PBT margin
FY23
(52 weeks)
FY22
(53 weeks)
Change
Adjusted
change (1)
1,309.1
1,212.0
161.8
146.0
11.2%
8.0%
4.0%
3.5%
10.0%
5.1%
4.7%
155.6
141.0
11.6% (40bps)
(60bps)
(1) Adjusted change is an unaudited non‐IFRS measure adjusting FY22 down to
52 weeks to provide a more meaningful comparative to FY23.
(2) FY22 was a 53-week period
(3) FY19 pre AASB16
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 29
Following the opening of four
rCX stores in the period at Erina,
Joondalup, Knox and Warringah,
rebel now has a total of 15 rCX stores
and six rCX Elevate stores.
In addition to the rCX store roll out,
in this period rebel commenced a
regional store roll out by opening
four new stores in Ballina, Dubbo,
Nowra and Tamworth. The Group
is pleased with the performance of
these stores and sees further near-
term opportunities for regional store
openings.
rebel invested a total of $23 million
of capital expenditure in its store
network in the period.
Customer
rebel is a category leader in the
Australian sporting goods and
apparel market, with 92 per cent
brand awareness. More than 26 per
cent of customers recognise rebel as
their preferred brand in the sports
category.
More than 3.7 million active club
members participate in the rebel
active loyalty program following
the addition of more than 400,000
members in this period, and these
customers represent 73 per cent of
rebel’s total sales.
The rebel active loyalty program
is targeting a relaunch by the end
of 2023, which will include a new
member value proposition and
updated branding. The new program
customer offering through both
unique products and an enhanced
in-store experience. Its national store
footprint, leading market share and
the quality and location of rebel’s
unique store formats makes rebel
a natural choice for leading global
sports brands to showcase their
products.
Key near-term growth opportunities
include:
•
•
•
•
Extending rebel’s national omni-
retail footprint including rollout
of flagship rCX stores, “homes of
sport” and new regional stores;
Leveraging and growing rebel’s
relationships with international
and local trade partners;
Expanding our market share in
key growth categories including
basketball, football, womens
and kids;
Leveraging the planned relaunch
of rebel’s loyalty program in H1
FY24; and
• Growing digital sales and online
market share.
is designed to incentivise additional
visitation and spending by rewarding
our most loyal customers.
rebel achieved a customer NPS
score of 65 in this period, up from
62 in FY22.
Strategy and outlook
While growing cost of living
pressures are expected to impact
consumer spending in FY24, the
Group expects demand in the sports
category will remain resilient given
trends promoting the importance
of personal fitness, health and
wellbeing. The continued rebound
in participation in grassroots sport
following the disruption created by
the COVID-19 pandemic is expected
to support ongoing demand for
sports apparel and equipment.
Australia is co-hosting the FIFA
Women’s World Cup, culminating
in the final in late August 2023. As
a proud partner of the CommBank
Matildas, rebel believes this event
will deliver an increase in sales in the
football category as well as providing
long-term benefits for female
participation in sport.
FY24 sales are also expected to
benefit from two planned new store
openings and the conversion of a
further four stores to the rCX format.
Ongoing investment in rCX stores is
continuing to strengthen rebel’s deep
relationships with the global sports
brands and differentiate rebel’s
Mary Fowler, rebel ambassador and
Australian national player
Mary Fowler speaking with team
members in Penrith
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 30
Evolving the
rebel store
format and
offering
New rebel regional
store in Dubbo
The rebel store network continued to
grow and evolve in FY23, extending
our national omni-retail footprint
with four additional rebel Customer
Experience (rCX) stores and four new
regional stores.
rebel now has 15 rCX flagship stores
to showcase a comprehensive
range across key global brands,
with Warringah and Erina (New
South Wales), Joondalup (Western
Australia) and Knox (Victoria) added
this financial year. The rCX format,
designed in partnership with Nike
and other key trade partners in 2019,
continues to provide innovative
displays and differentiated experiences
for customers in the core categories
of running, gym and fitness, football,
basketball and kids. The format has
strong support from global brand
partners and key landlords.
The largest rCX to date opened in
Joondalup in May 2023. Boasting
2,907 sqm of space, the store contains
rebel’s first outdoor and adventure
concept area alongside other new
layouts in the yoga and cricket
categories, building on the successfully
established Home of Football and
Home of Basketball experiences in
other rCX stores. These state-of-
the-art retail experiences cater to all
sporting needs in one place.
The most recent rCX store to open is
Knox, with zones dedicated to virtual
gaming, a front of store Energy Zone
showcasing new products from global
sporting and technology brands, and
a full-size basketball court adjoining
the store. The court operates in
partnership with Westfield and local
sporting organisation Knox Basketball.
The first phase of rebel’s regional
expansion strategy saw the rollout
of four new stores in New South
Wales – Ballina, Dubbo, Nowra
and Tamworth – following the new
Bunbury store in Western Australia in
FY22. These stores offer the best of
rebel in a regional format, bringing the
Home of Football, Home of Basketball,
and Health and Wellbeing concepts
to locations where a similar retail
experience is not currently available.
Each store opening was supported by
several professional sporting identities
alongside rebel Rookie community
sport sessions aimed at inspiring
young children to get involved in
playing football, AFL, and rugby
league. This level of engagement helps
build deep community connection
with our customers.
Both network and rCX stores improved
on last year’s customer net promoter
score, supporting the continued
investment in the store experience
and our aim to deliver on a well-
defined customer value proposition.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 31
BCF
PERFORMANCE
Year in review
Our business
BCF is a leading outdoor retailer, with
stores in every Australian state and
territory.
BCF provides its customers with
everything they need for their
next boating, camping or fishing
adventure, all under the one roof.
BCF’s goal is to provide Australians
with an outdoor store that they trust
to deliver range, quality, value and
great service.
It has 157 retail stores across
Australia, including two new large
format superstores in Townsville and
Kawana.
BCF operates in the growing outdoor
leisure category, where increasing
participation in outdoor activities
including camping, caravanning,
hiking and off-road adventure is
driving growth.
Financial performance
Total sales increased by 1 per cent (or
3 per cent Adjusted) to $840 million,
driven by new store openings and
the strong performance of partner
brands including Yeti, Weber, Darche,
Dometic and Lowrance.
Like-for-like sales were flat as higher
transaction volumes were offset
by a modest decline in average
transaction value.
Fishing delivered the strongest
category growth in the period while
camping sales were in line with the
record performance in FY22.
Segment PBT margin decreased by
110 bps, reflecting lower operating
expenses offset by a 180 bps decline
in gross margin as BCF responded to
increased promotional activity from
key competitors.
BCF delivered online sales of $94
million, representing 11 per cent of
total sales. Online sales in the period
declined by 20 per cent compared
to FY22, reflecting an ongoing shift
from online to in-store sales as
customers reverted to pre-pandemic
shopping behaviour. Click & Collect
represented 60 per cent of online
sales.
Stores and store network
In the period, BCF opened 11 new
stores and closed one store, resulting
in 157 stores at the end of the year.
BCF is targeting to reach 170 stores
by the end of FY26.
BCF is currently reshaping its store
network and tailoring its in-store
offering to ensure that it has the
right stores in the right location with
the right range. Key activities in the
store network optimisation program
include:
• Rolling out the new superstore
format to grow share in key
markets;
• Opening small format stores
in new regional locations,
expanding customer reach;
• Developing a tailored range
for each region by format to
increase sales per square metre;
• Amplifying the 4X4 range and
expanding the apparel offering
(including Macpac) to address
seasonality in the business; and
• Relocating weaker performing
stores to more optimal locations
and on more favourable lease
terms.
In November 2022 BCF opened its
first new superstore in Townsville, a
5,000+ sqm store with an expanded
range of more than 29,000 stock
keeping units (SKUs). BCF’s trade
partners have embraced the
opportunity to showcase their
products in this large store format
and the customer response to the
breadth and depth of the product
offering across categories including
fishing, boating, four wheel drive,
camping, caravan, barbeque,
power and refrigeration has been
overwhelmingly positive.
The Townsville BCF superstore is on
track to deliver $20 million in sales in
its first 12 months since opening and
is targeting a payback period of less
than two years. Following the success
at Townsville, BCF has now opened a
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 STORES
157
IN–STORE %
OF TOTAL SALES
89%
CLICK & COLLECT
% OF TOTAL SALES
7%
HOME DELIVERY
% OF TOTAL SALES
4%
BRAND
AWARENESS
75%
Stellar Market Research
Australia FY23
AVERAGE ACTIVE
CLUB MEMBER NPS
ACTIVE CLUB
MEMBER GROWTH
71
6%
BCF
$m
Sales
Segment EBIT
Segment PBT
PBT margin
FY23
(52 weeks)
FY22
(53 weeks)
Change
Adjusted
change (1)
839.9
61.0
51.0
6.1%
829.7
1.2%
2.6%
68.9
59.6
(11.5%)
(12.1%)
(14.4%)
(15.4%)
7.2% (110bps)
(130bps)
(1) Adjusted change is an unaudited non‐IFRS measure adjusting FY22 down to
52 weeks to provide a more meaningful comparative to FY23.
32
SALES ($m)
$840m
FY23
FY222
FY21
FY20
FY19
$840m
$830m
$798m
$535m
$515m
ACTIVE CLUB MEMBERS (m)
2.2m
FY23
FY222
FY21
FY20
FY19
2.2m
2.1m
2.0m
1.5m
1.5m
ACTIVE CLUB MEMBERS
% OF TOTAL SALES
89%
FY23
FY222
FY21
FY20
FY19
89%
87%
84%
83%
81%
SEGMENT PBT MARGIN (%)
6.1%
FY23
FY222
FY21
FY20
FY193
6.1%
7.2%
12.1%
2.8%
3.9%
ONLINE SALES ($m)
$94m
FY23
FY222
FY21
FY20
FY19
$94m
$117m
$86m
$45m
$34m
(2) FY22 was a 53-week period
(3) Pre AASB16
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 33
second superstore on the Sunshine
Coast at Kawana and aims to open
eight superstores by the end of FY26.
BCF invested a total of $15 million
of capital expenditure in its store
network in the period.
Customer
BCF is one of the leading participants
in the Australian outdoor market,
with 75 per cent brand awareness.
More than 25 per cent of customers
recognise BCF as their preferred
brand in the outdoor leisure category.
BCF added 100,000 club members in
the period and now has more than
2.2 million active club members who
participate in its club loyalty program,
representing 89 per cent of total
sales.
BCF achieved a customer NPS
score of 71 in the period, up from
66 in FY22.
Strategy and outlook
The outdoor category was a key
beneficiary of the COVID-19
pandemic and sales in this category
can be expected to continue to
normalise as spending on services,
entertainment and offshore travel
increases. In the near-term however,
rising cost of living pressures in
Australia are likely to support ongoing
participation in low-cost domestic
leisure activities such as camping and
caravanning.
BCF’s FY24 sales are expected to
benefit from the planned opening
of seven new stores and a full year
contribution from the recently
opened superstores in Townsville and
Kawana.
Promotional intensity in the outdoor
category is expected to remain high,
with key competitors continuing to
engage in regular discounting.
In response to this competitive
market landscape, BCF is focused
on developing a portfolio of private
and strategic brands to differentiate
its offering from its competitors’
offerings and to provide customers
with access to exclusive products.
BCF has entered trade partnerships
with a growing number of leading
outdoor specialty brands including
Yeti, Lowrance, Weber, Dometic,
Darche, Samaki and Zempire. Sales
from strategic and private brands
now represent more than 50 per cent
of BCF’s total sales.
Key near-term growth opportunities
include:
• Right-sizing stores in better
locations across Australia;
• Growing share in key markets
through an extended range in
the new superstore format;
• Maximising sales density by
addressing seasonality with
an apparel offering (including
Macpac);
•
Focusing on new and exclusive
product ranges tailored by
region;
• Growing digital sales and online
market share; and
• Maintaining a strong active club
member base and increasing
frequency of visit for active
club members via loyalty and
personalisation initiatives.
YETI display at the BCF Townsville
superstore
Providing customers with exclusive
products, expert knowledge and service,
for their next outdoor adventure
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 34
A new breed
of BCF store
Top: BCF Townsville superstore.
Internal images: BCF Kawana
superstore
As part of the strategy to be the
number one outdoor store in
Australia, BCF launched its first
superstore in Townsville, Queensland,
in November 2022, followed by a
second superstore in Kawana on
Queensland’s Sunshine Coast in
June 2023.
The new superstores are an entry
point for people who love outdoor
leisure, from those who want to
make the most of their camping gear
or caravan, to off-road enthusiasts
and fishers who spend their leisure
time on the water.
The superstore design is modular,
with aspects of the new format
easily replicated in other BCF stores
across the network, depending on
the customer demand and regional
location. For example, the ‘Tackle
Store’ and spearfishing fixtures,
imagery and signage will be relevant
for other key coastal markets.
The superstores also provide a
customer service model that allows
more time with the customer, to
help them select the right product
for their needs. The wide range
of products offers customers the
chance to touch, see and understand
more about how each product will
enhance their boating, camping and
fishing experience. Also incorporated
in the superstore design is a
customer experience zone where
demonstrations and workshops
are held, as well as rod repairs,
reel servicing and a comprehensive
fitment service.
The Townsville superstore grew from
2,500 sqm to 5,450 sqm and holds
more than 29,000 SKUs. The store
draws customers from across the
Townsville community because of its
relevant assortment of products for
that region. The store also won Store
Design/Concept of the Year at Inside
Retail’s Retailer Awards (2023). Since
the Townsville superstore launch,
the customer NPS for the store has
increased nine points to
72 points.
The Kawana superstore is the largest
BCF store in southeast Queensland
at 3,360 sqm and the second largest
BCF store in Australia. With expanded
ranges across fishing, boating,
spearfishing, power solutions,
caravanning and 4WD, Kawana also
features a boat and 4WD fitted out
with gear for customers to see the
products in use.
Both superstores also supply the
wider BCF range to customers
across Australia via online orders.
Most of the products available in
the Townsville and Kawana stores
can be purchased via Click & Collect
from other regional BCF stores,
allowing more customers to enjoy the
products and brands on offer.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 35
MACPAC
PERFORMANCE
Year in review
Our business
Founded in Christchurch on the
South Island of New Zealand in 1973,
Macpac is an outdoor adventure
brand which sells apparel and
equipment designed for mountain
climbers, campers, hikers and
adventure travellers. Macpac
products are made by adventurers for
adventurers. We design functional,
technical and robust products to
help equip outdoor enthusiasts to
adventure better.
Macpac was acquired by Super
Retail Group in 2018 and now has
89 stores across Australia and New
Zealand. It operates in the growing
outdoor adventure category, whose
key drivers of growth include
international travel and the growing
popularity of hiking, camping and
adventuring in the great outdoors.
Financial performance
Macpac delivered a record year
of sales in the period, driven by
new store openings (particularly
in Australia) and like-for-like sales
growth. Total sales of $216 million
were up by 22 per cent (or 27 per
cent Adjusted).
Like-for-like sales of 24 per cent
reflected strong transaction growth
and a higher average transaction
value. In Australia, like-for-like sales
increased by 26 per cent and in
New Zealand they increased by
20 per cent.
Segment PBT margin improved
by 280 bps, reflecting improved
operating leverage and a 140 bps
improvement in gross margin.
Online sales of $39 million in the
period fell 4 per cent compared to
FY22, reflecting an ongoing channel
shift from online to in-store sales as
customers reverted to pre-pandemic
shopping behaviour. Online sales
made up 18 per cent of total sales
and Click & Collect represented 16
per cent of online sales.
Stores and store network
Macpac has made further progress
towards its target of more than 100
stores by the end of FY26. In the
period, it opened six new stores and
closed two, resulting in 89 stores at
the end of the financial year.
Macpac’s store network comprises
two core formats:
• Macpac Explorer: 300 to 400
sqm stores located in key
shopping centres which stock
a full range of Macpac branded
product and a rationalised offer
of other brands; and
• Macpac Adventurer Hub: 600
to 800 sqm stores located in
established outdoor precincts
which stock a full range of
Macpac branded product and an
extended offer of other brands.
Macpac invested a total of $6 million
of capital expenditure in its store
network in the period.
Customer
Macpac is well-recognised in its
homeland of New Zealand where it
has 89 per cent brand awareness.
Brand awareness in Australia of
36 per cent continues to improve
as the store network expands and
has benefitted from the recent
introduction of Macpac product in
rebel and BCF stores.
Macpac added 100,000 members
to its member program and now
has more than 700,000 active club
members who participate in its club
program. These customers represent
74 per cent of Macpac total sales.
Macpac achieved a customer NPS
score of 67 in the period, down from
69 in FY22.
Strategy and outlook
Demand for Macpac’s outdoor
adventure products is expected to
benefit from an ongoing recovery
in international tourism and travel
following the COVID-19 pandemic,
despite a challenging macro
environment in Australia and New
Zealand.
In the period Macpac sales benefitted
from cold and wet weather
conditions, particularly in the key
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 STORES
89
IN–STORE %
OF TOTAL SALES
82%
CLICK & COLLECT
% OF TOTAL SALES
3%
HOME DELIVERY
% OF TOTAL SALES
15%
BRAND
AWARENESS
89%
Stellar Market Research
Australia FY23
AVERAGE ACTIVE
CLUB MEMBER NPS
ACTIVE CLUB
MEMBER GROWTH
67
28%
Macpac
$m
Sales
Segment EBIT
Segment PBT
PBT margin
FY23
(52 weeks)
FY22
(53 weeks)
Change Adjusted
change (1)
216.4
30.4
28.7
176.8
20.0
18.6
22.4%
52.0%
54.3%
26.6%
68.0%
72.9%
13.3%
10.5%
280bps
360bps
(1) Adjusted change is an unaudited non‐IFRS measure adjusting FY22 down to
52 weeks to provide a more meaningful comparative to FY23.
36
SALES ($m)
$216m
FY23
FY222
FY21
FY20
FY19
$216m
$177m
$153m
$132m
$139m
ACTIVE CLUB MEMBERS (m)
0.7m
FY23
FY222
FY21
FY20
FY19
0.7m
0.6m
0.5m
0.5m
0.4m
ACTIVE CLUB MEMBERS
% OF TOTAL SALES
74%
FY23
FY222
FY21
FY20
FY19
74%
72%
66%
64%
65%
SEGMENT PBT MARGIN (%)
13.3%
FY23
FY222
FY21
FY20
FY193
13.3%
10.5%
11.0%
4.4%
9.2%
ONLINE SALES ($m)
$39m
FY23
FY222
FY21
FY20
FY19
$39m
$41m
$30m
$22m
$13m
(2) FY22 was a 53-week period
(3) Pre AASB16
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 37
winter sales period. Current
forecasts are pointing to milder
weather conditions in Australia and
New Zealand in FY24.
Macpac’s FY24 sales are expected to
benefit from the planned opening
of seven new stores in Australia
and New Zealand and a full year
contribution from the six stores
opened in the current period.
Macpac’s strategic focus remains
centred around technical excellence
and delivering differentiated product
with an unwavering commitment
to quality.
Key near-term growth opportunities
include:
• Continuing the store roll out
program in Australia;
•
Lifting brand awareness in
Australia;
• Rationalising product range and
decreasing Macpac’s reliance
on winter-related product with
enhanced seasonal ranging;
• Growing digital sales and online
market share; and
•
Improving our in-store
experience.
Environmental responsibility is
important to Macpac, our customers
and our team members. Preservation
of the natural world is also integral
to the outdoor adventure category in
which we operate. A strategic focus
for Macpac is to be a force for good
and continue on its better business
journey with a sustainability focus.
Weathering Anything in
Macpac gear.
Macpac Penrith.
Comfortably handling rugged terrain,
trusted to last in any environment.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 38
50 years of
adventure,
a lifetime
to go
Macpac’s new brand platform,
Weather Anything, showcases
Macpac gear in a distinctive
and memorable way.
Insert: Macpac founder
Bruce McIntyre
Founded in a Christchurch garage
by Bruce McIntyre in 1973, Macpac
is New Zealand’s original, technical,
outdoor brand. Bruce’s goal was
to create products of the highest
quality that would last and could
comfortably handle New Zealand’s
rugged and unforgiving terrain. This
innovative, adventurous spirit lives
on in everything Macpac does today.
The brand promise is much the
same as it was at the start – Macpac
creates quality outdoor gear, made
responsibly, trusted to last in any
environment.
This year, Macpac celebrated its 50th
anniversary with team members from
89 stores across New Zealand and
Australia, the Macpac support office
team and an adventure community
who take their outdoor fun seriously.
Celebrations included the launch
of a new brand platform, Weather
Anything, to build relevance with
adventurers of all types. The multi-
channel, award-winning campaign
included television, outdoor, social,
online and in-store advertising,
balancing a solid platform with
the aspirational story to which all
outdoor enthusiasts can relate.
Continuing its evolution over the past
five decades, the Macpac logo was
also refreshed to the stacked design
of today. The logo is inspired by the
silhouette of New Zealand’s highest
mountain, Aoraki Mount Cook. The
curve represents a Nor‘west Arch, a
high white cloud in a clear blue sky,
particular to the east coast of the
South Island of New Zealand. Papaya
orange is Macpac’s hero colour,
favoured by mountaineers due to its
high visibility in any weather, while
also being the colour of optimism
and energy.
The Macpac support office, where
the concept for every Macpac
product is designed, remains proudly
located in Ōtautahi Christchurch.
From here, our highly skilled
manufacturing partners bring the
Macpac design team’s visions to life.
Macpac will continue to build on
everything learned over the years,
with a healthy dose of Kiwi ingenuity
and the belief that when our
customers put on “a Macpac”, they
have the confidence and spirit to
take on anything – whatever
their adventure.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 39
RISK
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 continues to evolve its approach to risk management to ensure it is fit for purpose, meets 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, not all relevant risks are within the control
of the Group and additional risks not currently known or detailed below may also adversely affect our operations,
performance or delivery of our strategy. Further details on the Company’s approach to risk management are contained
in the Company’s FY23 Corporate Governance Statement.
Risk context
Risk management
Risk
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.
While we are committed to the physical and
psychological wellbeing, health and safety of our
team members, customers, suppliers, visitors,
and contractors across our operations, these
risks remain.
– Investing in the ongoing maturity of the Group’s Health &
Safety program.
– Focus on critical risks with integration of control assessment
through assurance activities.
– Focus on hazard elimination and risk reduction, supported by
a robust health and safety management system.
– Enhancing health and safety compliance and leadership
training.
– Implementation of Health and Safety by Design requirements
for fixtures and fittings.
– Focus on Psychological Safety aligned to new Codes of
Practice.
– Development of electronic induction, training record keeping
and equipment maintenance in the Group Supply Chain.
– Implementing our planned preventative site and equipment
maintenance program.
– Using information technology to reduce the chance of error.
– Maturing the Group’s Employee Relations approach.
– Leveraging an Industrial Relations Framework including
detective and preventive controls, supported by ongoing
training on correct rostering practices.
– Conducting periodic external compliance reviews as part of
our ongoing controls assurance program.
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 40
Risk
Conduct
Inappropriate,
unethical or unlawful
conduct by the
Group’s Officers or
Team Members
Risk context
With more than 15,000 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 events such
as severe weather, 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 financial loss.
Risk management
– Maintaining a strong culture that engenders doing the right
thing, guided by our 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, Anti-Corrupt Practices Policy and
brand and group Respect@Work councils.
– 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 largescale
shift in the competitive landscape for the
Group’s brands.
– Investing in growing our active club loyalty membership
base, personalising our services and retaining our loyal
customers through loyalty platforms and structured customer
relationship management activities.
Increased competition can arise as a result of new
entrants to the market, increased investment by
existing competitors and aggressive competitor
pricing and/or 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.
– Growing our four core brands and improving the customer
experience in-store and online.
– Improving brand awareness.
– Optimising our store network.
– Regularly monitoring key competitor market share.
– Working closely with trade partners to maximise
opportunities.
Strategy execution
Critical shortfall in
capability and/or
capacity to execute
the Group’s strategy
Execution of 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 vision, mission and values.
– Leveraging our 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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 41
Risk
Risk context
Risk management
Climate change
transition
Global transition to a
low carbon economy(1)
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 and social
sustainability commitments.
Consumer and regulatory 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 help
us achieve our climate change transition goals.
– Progressing delivery of our 2030 Sustainability Framework,
which includes emissions reduction goals, recycling
and waste reduction programs, as well as support for
environmental 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
Protracted economic
downturn
Geopolitical conflicts, ongoing COVID-19
pandemic impacts, rising commodity prices, rising
interest rates, wage growth pressures and global
inflation levels have added further uncertainty
in an already complex macro-economic
environment.
There is a risk of further decline in the macro-
economic environment, including economic
conditions in which our major suppliers operate,
the continued constraints within the Australian
and New Zealand labour markets, and freight
price increases, which may adversely impact the
Group’s trading and non-trading environment.
– Seeking to maintain 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 strategic initiatives, if necessary.
– Controlling inventory investment through robust inventory
management processes.
– Maintaining an effective cyber security approach including
ongoing training and awareness.
– Actively monitoring cyber threats and vulnerabilities.
– Maturing our cyber security practices, policies, controls and
response framework.
– Investing in cyber processes and tools.
Information and technology
Cyber security, data
management and
privacy
Unauthorised access
to the Group’s systems
and data
The privacy, integrity and security of customer
and team member data and information and the
reliability of IT systems is of utmost importance to
the Group and is critical to day-to-day operations
and strategic direction.
It is critical that we seek to keep our commercially
sensitive information safe and that we seek to
protect our customers through digital channels
and e-commerce.
Any unauthorised access to systems and/or data
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.
(1) Further detail on our climate risks is provided on page 44.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 Risk context
Risk management
42
Risk
Operational
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.
Product safety
A product sold by
the Group’s brands
is unsafe and/or
non-compliant with
required standards
While we are committed to providing safe
products for our customers and complying
with requisite standards, there are risks to the
Group relating to product safety. 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. There may also
be financial impacts associated with product
recalls and any regulatory impacts.
Supply chain
disruption
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 can result in damage to
supply lines.
Shipping volatility including pallet and container
shortages, port capacity issues, geopolitical
tensions and conflicts, 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.
– Maintaining a Responsible Sourcing Program, Policy and
Code which includes monitoring, verification, audit and
remediation processes.
– Maintaining new supplier due diligence processes.
– Reviewing 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.
– Enhancing product safety assurance activities.
– 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.
– 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, where possible.
– Building resilience and agility into our supply chain.
– Modernising the technology supporting our supply chain,
including upgrading our Warehouse Management System.
– Maintaining inventory buffers to increase tolerance
to disruption.
– Maintaining freight and trade alliance membership and
strategic partnerships.
– Actively engaging multiple vendors on forecasting resources
to manage constraints (e.g. casual labour).
Supply chain capacity
Operations exceed the
effective capacity of
the supply chain
Maintaining inventory buffers to minimise
protracted supply chain risk increases the
risk that stock levels or mix are misaligned to
demand. Increasing resilience in our supply chain
can also increase cost and add to complexity.
– Improving governance of process and flow management.
– Maintaining a high level of engagement on, and active
oversight of, forward capacity requirements via our cross-
functional Sales & Operations Planning forums.
– Actively identifying, managing and exiting slow and obsolete
inventory from our network.
– Optimising the use of offsite storage.
– Investing in a new automated distribution centre.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 43
Risk
Risk context
Risk management
Climate change
Physical impacts of
climate change(1)
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.
– Having in place emergency response and business continuity
management plans and related exercise programs, which
support business resilience.
– Maintaining a robust health and safety management system.
The health and safety of our team and customers
may be impacted.
– Implementing our planned site inspection and preventative
maintenance program.
Our trade and operations 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.
– Identifying sites susceptible to increased risk of
natural hazards.
– Complying with building codes and requirements.
– Forecasting and monitoring weather-related influences on
customer demand for key product categories.
Business disruption
Trade is severely
restricted or
disrupted for an
extended period
Operational challenges may arise in connection
with unexpected events, pandemics or epidemics,
severe weather events and other natural hazards,
and the ongoing threat of cyber-attack, including
ransomware. Such events can cause sudden
cessation of day-to-day operations.
– 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.
– Maintaining an effective cyber security approach including
ongoing training and awareness.
– Actively monitoring and aiming to prevent and protect
against cyber threats.
– Maturing our cyber security practices, policies, standards and
controls.
– Investing in cyber security processes and tools.
– 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 maintaining technology systems.
– Having in place health and safety policies, procedures,
engineering controls, training, PPE and maintenance
requirements.
– Promoting a culture of accountability, compliance and
transparency.
– 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.
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 implement its
strategy.
(1) Further detail on our climate risks is provided on page 44.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 44
CLIMATE
Super Retail Group recognises the importance of climate change and that it may present strategic and operational risks as
well as opportunities for our business, including our four core brands. We are improving our understanding of climate risk
and our overall alignment with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
This is the first year we disclose our alignment to the TCFD recommendations in our Annual Report across the four key
pillars of Governance; Strategy; Risk Management; and Metrics and targets. These foundations prepare the Group to
respond to evolving guidance from standard setters such as the International Sustainability Standards Board (ISSB),
including IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-
related Disclosures issued in June 2023.
Governance
Board oversight
The Board is responsible for
overseeing the Company’s
strategy and approach to
managing sustainability issues,
including climate-related risks
and opportunities for the Group.
The Board is assisted by the Audit
and Risk Committee (ARC) in the
discharge of its sustainability, risk,
audit and corporate governance
responsibilities.
In FY22, the Board endorsed the
Company’s new Sustainability
Framework 2030, which includes
climate-related goals and targets. The
Board, assisted by the ARC, monitors
the Group’s progress towards
the goals and targets under the
framework, including those related
to climate change. Progress made
during FY23 has been reported in our
FY23 Sustainability Report, which is
available on our website.
The Board receives annual training
and deep dives on ESG and climate-
related issues which, in FY23,
included a session focused on TCFD
financial reporting and disclosure
matters. Climate-related risks and
opportunities are also considered
as part of the Board’s biannual
strategy sessions with the Executive
Leadership Team (ELT).
new committee will commence from
1 September 2023, at which time the
existing Audit and Risk Committee
will become the Board Audit
Committee. Once these changes take
effect, it is expected that there will
be close collaboration across these
two Committees due to the role
that both will play in ESG reporting,
disclosure and assurance. Further
details on the Company’s corporate
governance framework, including the
new Board Committee structure that
will take effect in FY24, are contained
in the Company’s FY23 Corporate
Governance Statement.
During FY23, the Board approved
the establishment of a new Board
Committee – the Board Risk and
Sustainability Committee (BRSC). The
Management’s role
At a management level, the Group
MD and CEO is responsible for the
overall execution of the Group’s
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 45
strategy, which includes sustainability
as a key enabler of value. Climate
is one of the five focus areas of the
Sustainability Framework 2030 which
sets out our goals, commitments
and targets. The Group MD and CEO
reports sustainability progress to the
Board, including the progress toward
the Group’s climate-related goals
and targets.
The Group MD and CEO has
delegated specific responsibilities
related to climate-related risks and
opportunities to members of the ELT
as follows:
•
•
•
the General Manager, Health
Safety and Sustainability has
responsibility for reporting
on climate-related risks and
opportunities;
the Chief Financial Officer (CFO)
has responsibility for material
climate transition and physical
risks and direct responsibility
for Scope 1 and 2 emissions
management; and
the Brand Managing Directors
have accountability for
managing climate-related risks
and opportunities as they relate
to the relevant brand strategy
and operations.
Sustainability, including climate, is
discussed in quarterly ELT meetings.
Various working groups have been
established across the business
(including at a brand level) focused
on the implementation and delivery
of the Company’s sustainability goals.
Working groups meet regularly and
matters that require decision or
approval are escalated to the ELT as
appropriate. The ELT and working
groups receive advice and support
from the Head of Sustainability and
wider sustainability team.
Risk management
The Board sets the risk appetite
for the Group, monitors material
risks faced by the Company (both
positive and negative), and reviews
how these are managed. The
Group’s risks, including climate,
are identified, assessed and
managed in accordance with our
Risk Management Policy and Risk
and Compliance Management
Framework (RCMF) for which the
Board is accountable.
The Board is assisted by the ARC
in its oversight of the RCMF. The
ARC conducts an annual review
and makes recommendations to
the Board on the RCMF to satisfy
itself that the framework continues
to be sound and that the Group
is operating with due regard to
the Board-approved Risk Appetite
Statement. From 1 September 2023,
the BRSC will assume responsibility
for this annual review.
Material risks are reported twice a
year to the ARC and the ELT. Climate
change transition and physical risks
are identified as material risks. The
ELT are individually responsible for
the implementation of the RCMF
in their brand or division. The ELT
meets quarterly to collectively
evaluate and prioritise material and
Group-wide risks, including climate-
related risks and opportunities, as
well as to champion risk (positive
and negative) as a key input into
decision making. Further information
is provided in the Risk section of this
Annual Report.
Strategy
Identifying climate-related risks and
opportunities has been an important
part of the Group’s material risk
reporting, noting both the physical
risks and transitional risks of climate
change and the potential impacts on
our businesses over time. In FY23,
the Group extended its assessment
of climate risk and completed a
qualitative climate-related scenario
analysis to evaluate the likelihood
and consequence of climate-
related risks and opportunities, in
accordance with our RCMF, over
different time horizons.
Three emissions scenarios (high
– approximate warming range at
2100 >40C, moderate – approximate
warming range at 2100 of 2-30C,
and low – approximate warming
range at 2100 of 1.50C) underpinned
by scientific data over three time
horizons were used to consider
potential impacts of both physical
and transition risks and opportunities
related to climate change. Three
time horizons, short (2025), medium
(2030) and long (2050), were
selected to align to Super Retail
Group’s short-term planning cycle,
mid-term ESG targets and allow for
longer term resilience planning.
Qualitative analysis of climate
scenarios is used to test the potential
impacts of climate change on our
business and to inform of potential
risks and opportunities. Climate
scenarios are hypothetical and are
not intended to represent a full and
definite description of the future,
but rather highlight the key
factors that could drive future
developments. The qualitative
process did not identify any new
material climate risks.
The outcomes of the qualitative
scenario analysis allow us to
identify and target priority risks and
opportunities for further quantitative
analysis in FY24. Quantitative
scenario analysis will expand our
understanding of the potential
impact of climate change on our
business and the resilience of our
strategy in the short, medium and
long term. Our strategic responses to
the priority risks and opportunities
are guided by the outcomes of
our climate analysis as well as our
Sustainability Framework 2030,
our emissions reduction plan, and
the Group’s strategy. Other risk
management activities in relation
to climate-related risks are set out
in the Risk section of this Annual
Report.
Physical risk
The climate scenario analysis
provided qualitative insights into the
priority risks and opportunities for
the Group associated with physical
impacts, both acute and chronic.
Physical risks include increased
severity and/or frequency of extreme
weather events such as floods,
storms and bushfires, an increase
in extreme heat days or change in
precipitation levels and the potential
for water scarcity or other ecological
crises.
Physical impacts on the Group
are the highest in terms of both
likelihood and consequence under
the High Emissions scenario
(approximate warming range at 2100
>40C) and over the long-term (2050).
Based on the outcomes of the FY23
qualitative assessment, the physical
risks that merit further investigation
includes the potential disruption to
operations and trade.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 46
The Group is responding to the
physical impacts of climate change
by improving the resiliency of
critical assets (retail stores and
distribution centres) by having
regard to where they are located
and adopting emerging technologies
into these assets. The Group’s leased
property profile and inventory
management approach assist with
adaptation to the physical impacts
of climate change.
Transition risk
Transition risks and opportunities
were also qualitatively assessed
through our scenario analysis to
provide insight into the potential
impacts on the Group arising from
the transition to a low carbon
economy. Transitional climate-related
risk themes identified from our
scenario analysis included changes
in technology, changes in consumer
preferences and spending behaviours
and change to government policy
(such as accelerated emissions
reductions policy) and legal
requirements.
Transition impacts will be most
acutely felt in the medium-term
(2030) where policy, market and
consumer changes are predicted
to heighten. Transition impacts are
expected to be most likely under a
Low Emissions scenario (approximate
warming range at 2100 of 1.50C).
Based on the outcomes of the
qualitative assessment, the climate-
related impacts of transition risk that
merit further investigation include
faster than expected growth in the
electric vehicle (EV) market and
unplanned energy price rises and
grid instability.
As a Group, we are adapting to
mitigate potential transitional
impacts and see opportunities
in having a business model with
flexibility to respond to market
changes, including changes
in consumer demand and the
regulatory environment. The Group
has identified EV transition as
both a risk and opportunity within
Supercheap Auto. The brand is
developing strategies to mitigate
the medium-term risk exposure
and capture the opportunity. One
of the ways the Group mitigates
the potential impacts associated
with transition risk is through our
emissions reduction plan which
includes targets for zero carbon
emissions for Scope 1 and Scope 2
by 2030.
Metrics and targets
Super Retail Group is committed to
its Sustainability Framework 2030,
including our emissions reduction
plan, with a target of zero carbon
emissions for Scope 1 and Scope 2
by 2030 for all wholly-owned and
operated assets. In FY22, we set
new targets on packaging, waste
and emissions and in FY23 we began
implementing our plans to achieve
them by prioritising those targets
that require the greatest effort to
succeed. Progress towards emissions
reduction during FY23 compared to
our FY17 base year include 26.3 per
cent reduction in greenhouse gas
emissions (Scopes 1 and 2) and 2.9
per cent reduction in total electricity
use to 78,357 MWh. Further
commentary on our climate goals
and actions can be found in our FY23
Sustainability Report.
Emissions from our Australian
operations are reported 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).
Sustainability goals and targets
which include climate-related
targets and performance metrics are
incorporated into business planning
at a brand and divisional level. This
includes target setting, measurement
and assessment linked to employee
remuneration outcomes as it relates
to our ELT and Senior Leadership
Team (SLT) short-term incentive
plans. Performance against the
Sustainability Framework is reviewed
each six months with ELT and SLT
performance outcomes evaluated
annually. More information on the
Sustainability (ESG) performance
outcomes for FY23 relating to the
Group MD and CEO and other
Executive KMP is shown in Tables 3
and 4 of the Remuneration Report.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 47
OUR
TEAM
Our team’s engagement at
work matters to us
An engaged team inspires our
customers to live their passion and
helps deliver Super Retail Group’s
vision. We are always keen to listen
and act on the drivers of our teams’
passion, and we have a continuous
engagement building and feedback
cycle designed to make Super Retail
Group the best possible place
to work.
In FY23, our team participated in two
engagement surveys and a diversity
and inclusion survey. Across the two
engagement surveys, we recorded a
score of 81 and 80 for team member
engagement - a strong outcome and
marginally higher than the Achievers®
global benchmark.
Within this result, the People Leader
Index, which measures team member
perspectives of their leaders with
a focus on care, context, clarity,
communication and coaching,
increased to 85 - a one point increase
on FY22.
Committed to gender equality
Super Retail Group remains
committed to achieving diversity in
leadership and gender equality across
the organisation. In recognition of
this commitment, the Workplace
Gender Equality Agency has
confirmed our status as an Employer
of Choice. The Group has a goal of
40:40:20 representation 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).
At the end of FY23, female
representation on our Board was 43
per cent, 38 per cent at the executive
level and 38 per cent for women in
senior leadership.
Our Equality in Leadership plan is
focused on accountability through
regular reporting, developing a
diverse talent pipeline, building
future capability through targeted
programs and coaching, and
increasing access to supporting
policies and benefits.
During the year we progressed
leadership development, targeted
coaching and mentor programs for
our senior leadership, extended
leadership team and future women
leaders. The extended leadership
and future women alumni grew to a
network of 459 leaders in FY23.
In addition, our people leaders
undertook two mandatory training
modules on diversity and inclusion.
Leadership and learning for
the future
Super Retail Group continued to
expand learning and leadership
development programs in FY23.
Team members strongly supported
a suite of development programs
during the year, including more than
78,000 hours of voluntary learning
completed through the anytime-
learning SOULlibrary program and
almost 72,000 hours through the
SOULexperts program, which helps
team members establish the
technical knowledge required to
meet customer needs.
The leadership development program
suite reached an additional 172
leaders and our accredited learning
programs helped 83 team members
complete a Certificate III in Retail
Operations or Certificate IV in Retail
Management qualification.
To further expand leadership
development and drive team
member engagement, we introduced
a new voluntary learning program,
‘Moments that Matter’. Designed as
foundation learning for some 1,600
people leaders across the business,
the program has a particular focus
on engaging and supporting our
retail leaders.
Through bite-sized learning and
an engaging live-event series, the
program targets ten ‘Moments
that Matter’ in the everyday team
member experience. The program
brings to life our values, supports
a safe working environment,
and delivers insights into leading
leadership practices.
Supporting a healthy and safe
work environment
We are committed to the health
and safety of our team members,
customers and business partners, and
continuously strive to improve our
performance in this area.
Our Total Recordable Injury
Frequency Rate (TRIFR), which
increased slightly by 3.5 per cent to
11.0, was impacted by higher team
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 48
TRIFR
11.0
WOMEN IN SENIOR
LEADERSHIP
38%
TEAM MEMBER
ENGAGEMENT
81 &
September 2022
80
February 2023
member turnover and increased
trade volume. Manual handling and
stock movement contributed to
more than 70 per cent of injuries
during the year. Our Supply Chain
division improved its TRIFR by 17
per cent compared to the prior year.
Pleasingly, our Safety Effort (a leading
indicator) measure exceeded our
target, and we remain committed to
improving our injury performance
across the Group.
Our commitment to addressing
critical risks remained at the forefront
of our health and safety agenda.
FY23 marked the second year of
our Health and Safety Assurance
program, which focuses on critical
controls across our network.
Recognising the significance of
fixtures and fittings in our stores, our
health and safety function developed
guidance to reduce risks through
base design criteria, prototyping new
items, and construction procedures
for new fixtures and fittings.
A harassment-free workplace
We are always looking to improve
and refine our people policies with a
goal of creating a workplace free of
harassment.
After reflecting on legislative changes
introduced in the Respect@Work Act
in 2022, and the Australian Human
Rights Commission’s Framework, we
strengthened the Group’s policies
to enhance our approach to any
cases of sexual harassment, bullying,
discrimination, and other serious
misconduct in the workplace.
Our changes included enhancements
to the Code of Conduct and the
introduction of a Harassment-
Free Workplace Policy and Guide.
In addition, Super Retail Group
maintains a risk assessment register
to identify potential causes of sexual
harassment and provide access to
policy, training and other prevention
levers if required. Within the annual
mandatory training calendar,
communication and training remains
a key focus to prevent unacceptable
conduct in the business.
Continued improvements in
reporting and monitoring help
us refine our risk settings and
disciplinary consequences.
The accountability and responsibility
for meeting our obligations and
caring for our team sits with both
first and second-line leaders. To help
facilitate this, we have introduced
quarterly Respect@Work councils for
our brands to discuss observational
and fact-based trends as they arise,
maintain momentum on key actions
and support leaders in creating safe
workplaces for our diverse workforce.
Improving employment
outcomes
Over the last three years, Super Retail
Group has made sweeping changes
to our rostering, time and attendance
system and practices.
A new system – Dimensions – is
helping us work smarter and faster.
Our store managers can build, update
and post rosters, from anywhere, at
any time, on any device, which hands
them back more time in their day.
Their valuable minutes are now spent
optimising their store for improved
sales performance and coaching
their team.
In addition, improved data insight
and workforce planning practices
has enabled the Group to increase
the proportion of permanent team
members in store by 25 per cent
since 2021. This is a key value
proposition for our team in a tight
labour market. It provides our team
with employment certainty, annual
and carers leave and opportunities
for development - all of which
create a sustainable employment
contribution to the communities
we serve.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 49
BOARD OF
DIRECTORS
Appointed
Committees
Qualifications and experience
SALLY PITKIN AO
Independent
Non-Executive Chair
ANTHONY HERAGHTY
Group Managing Director
and Chief Executive Officer
HOWARD MOWLEM
Independent
Non-Executive Director
Director since 1 July 2010
Chair since 23 October 2017
20 February 2019
13 June 2017
Chair of the Nomination
Committee
Member of the Human Resources
and Remuneration Committee
Chair of the Audit and Risk
Committee
Member of the Human Resources
and Remuneration 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 19 years’
experience as a non-executive
director of ASX200 companies in
the retail, leisure and hospitality,
and services sectors.
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 of
Laws.
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.
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.
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)
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 50
PETER EVERINGHAM
Independent
Non-Executive Director
ANNABELLE CHAPLAIN AM
Independent
Non-Executive Director
JUDITH SWALES
Independent
Non-Executive Director
MARK O’HARE
Non-Executive Director
19 December 2017
31 March 2020
1 November 2021
4 April 2023
Chair of the Human Resources
and Remuneration Committee
Member of the Audit and Risk
Committee
Member of the Nomination
Committee (since 4 April 2023)
Peter is an experienced executive
with more than 25 years’
corporate experience, including 18
years in senior executive roles in
the digital sector. He was formerly
Managing Director of SEEK
Limited’s International Division,
and served as a Non-Executive
Director of 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.
Member of the Audit and Risk
Committee
Member of the Nomination
Committee
Member of the Audit and
Risk Committee
Member of the Nomination
Committee (since 4 April 2023)
Member of the Audit and
Risk Committee
(since 4 April 2023)
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.
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.
Mark O’Hare is an experienced
strategic business adviser with
a long-standing advisory role
supporting Super Retail Group co-
founder Reg Rowe stretching back
more than 35 years.
As a former partner with Grant
Thornton, Mark has established
expertise in the areas of business
services and taxation. Having
previously worked as a chartered
accountant at Ernst & Young, Mark
had three decades with Grant
Thornton in the private business
tax and advisory practice. Mark
is the Chairman of the Re-Grow
Capital Group Advisory Group.
Mark completed a Bachelor of
Commerce at the University of
Queensland and is member of the
Australian Institute of Company
Directors.
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)
Director of Virgin Australia
Holdings Limited (May 2019 –
October 2020) (delisted from ASX
on 17 November 2020)
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 51
EXECUTIVE
LEADERSHIP TEAM
PAUL BRADSHAW
Managing Director – BCF
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.
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.
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
KEVIN FIGUEIREDO
General Manager - Health, Safety
and Sustainability
JANE KELLY
Chief Human Resources Officer
Rebecca joined Super Retail Group in
February 2020 as Chief Legal Officer and
Company Secretary, and is responsible for
leading our legal, risk, compliance and group
secretariat functions. She has extensive
executive experience in legal and corporate
governance, gained through roles in top
tier law firms and blue-chip corporates
throughout the US, Europe, Asia and
Australia including IAG, Amcor and Westpac.
Rebecca holds a Bachelor of Laws (first class
honours) from Monash University and a
Bachelor of Arts.
Kevin joined Super Retail Group in February
2020 as General Manager of Health, Safety,
Risk and Sustainability. In January 2023, he
joined the Executive Leadership Team and
is responsible for leading our health, safety,
sustainability and insurance functions,
including the Group’s wellbeing program
and flagship mental health initiative, I Am
Here. Kevin has previously held executive
positions at Woolworths Group, Westpac
and Goodman Fielder. He holds a Bachelor
of Chemistry and a Masters in Safety from
West Virginia University and is a Graduate
of the Australian Institute of Company
Directors. Kevin is a passionate advocate for
the inclusion of people living with disability
and has served on the Australian National
Disability Board since 2006.
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23 52
MANDY ROSS
Chief Information and Digital Officer
RORY SCOTT
Chief Strategy and Customer Officer
CATHY SEAHOLME
Managing Director – Macpac
Mandy is an experienced IT and digital
executive with expertise in technology
delivery, digital transformation, IT and
cyber governance, and contemporary IT
operating models. She joined Super Retail
Group in October 2021. For the 15 years
prior, Mandy held CIO roles with some of
Australia’s largest ASX-listed organisations
including Tabcorp, Tatts Group and Wotif
Group. In these roles Mandy traversed
customer centric strategy delivery, digital
maturity acceleration, IT and cyber
resilience programs, M&A integrations,
and value optimisation.
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 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
DARREN WEDDING
Chief Supply Chain Officer
GARY WILLIAMS
Managing Director – rebel
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 joined Super Retail Group in January
2019 as Chief Supply Chain Officer. Darren’s
role encompasses sourcing, international
shipping, inbound and outbound logistics,
distribution centre operations and omni-
fulfilment. Darren has more than 30 years’
experience in supply chain and logistics
having served in a broad array of industries
including military, steel manufacturing,
FMCG, retail and third-party logistics, with
ten of these years operating in Asia. Darren
has completed an MBA, holds a Master of
Business Administration, is a Graduate of
the Australian Institute of Company
Directors and currently Chairs the Australian
Retailers Association Supply Chain Sub
Committee.
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 FY23 53
Re m uneration Report
Directors’ Report
Financial State m ents
For the financial
year ended
1 July 2023
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY232023 SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
54
54
DIRECTORS’ REPORT
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 1 July 2023.
The Company has adopted a 52-week financial year, for financial reporting purposes, which ended on 1 July 2023. The prior financial year
was a 53-week period ended on 2 July 2022.
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
Judith Swales - Independent Non-Executive Director
- Mark O’Hare - Non-Executive Director (appointed 4 April 2023)
-
Reg Rowe - Non-Executive Director (retired effective 4 April 2023)
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 49 to 50.
2.
Board and Board Committee meetings and attendance
The number of meetings of the Board and each Board Committee and the individual attendance by Directors at those meetings which they
were eligible to attend as members, during the financial year, is summarised in the table below. The table excludes the attendance of those
Directors who attended Board Committee meetings of which they were not a member.
Number of meetings
Sally Pitkin AO
Anthony Heraghty
Annabelle Chaplain AM
Peter Everingham (2)
Howard Mowlem
Judith Swales (3)
Mark O’Hare (4)
Reg Rowe (5)
Board
10
Nomination Committee
Audit and Risk
Committee
Human Resources and
Remuneration Committee
2
4
5
Held(1)
Attended
Held(1)
Attended
Held(1)
Attended
Held(1)
Attended
10
10
10
10
10
10
2
8
10
10
10
10
10
10
2
8
2
-
2
2
-
2
-
-
2
-
2
2
-
2
-
-
-
-
4
4
4
4
1
-
-
-
3
4
4
4
1
-
5
-
-
5
5
-
-
-
5
-
-
5
5
-
-
-
(1) Total number of meetings held during the time the Director was a member of the Board or the relevant Committee.
(2) Mr Everingham became a member of the Nomination Committee on 4 April 2023.
(3) Ms Swales became a member of the Nomination Committee on 4 April 2023.
(4) Mr O’Hare was appointed as a Non-Executive Director, and as a member of the Audit and Risk Committee, on 4 April 2023.
(5) Mr Rowe ceased to be a Director of the Company on 4 April 2023. He also ceased to be a member of the Nomination Committee on that date.
All Board members may attend any Committee meeting even if they are not a member of the relevant Committee.
In addition to the meetings of the Board and its Committees reflected in the table above, a further 13 special purpose Board
sub
committee meetings were held during FY23.
‑
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
55
55
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
DIRECTORS’ REPORT (continued)
3.
Directors’ interests
As at the date of this report, the Directors have the following 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:
Director
Sally Pitkin AO
Anthony Heraghty
Annabelle Chaplain AM
Peter Everingham
Howard Mowlem
Judith Swales
Mark O’Hare
Number of ordinary shares
Number of performance rights
68,405
252,840(1)
17,871
60,000
34,286
5,925
66,002,154(2)
-
340,986
-
-
-
-
-
(1) Includes 55,711 restricted shares held under the Super Retail Group Employee Equity Incentive Plan.
(2) Includes 65,918,556 ordinary shares held under powers of attorney noted in Mr O’Hare’s Appendix 3Y dated 15 June 2023.
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 72 to 75.
4.
Company Secretaries
Rebecca Farrell and Amelia Berczelly are the Company Secretaries of the Company.
Ms Farrell joined Super Retail Group as Chief Legal Officer and Company Secretary on 10 February 2020. Details of Ms Farrell's qualifications
and experience are set out on page 51.
Ms Berczelly is General Manager, Group Secretariat and Corporate Legal at Super Retail Group, and was appointed as an additional Company
Secretary of the Company on 22 March 2023. Ms Berczelly has responsibility for Super Retail Group’s company secretarial requirements and
provides advice on corporate law, governance and head office advisory matters. She has over 15 years’ experience as a corporate lawyer at
Super Retail Group and in private practice at leading international law firms. Ms Berczelly holds a Bachelor of Laws (First Class Honours) from
The University of Sydney, in addition to a Bachelor of Business Administration and Bachelor of Arts in Japanese Studies.
5.
Principal activities
The Company 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 13 to 14.
There were no significant changes to the principal activities of the Group during the financial year under review that are not otherwise
disclosed in this report.
6.
Operating and financial review
Refer to pages 3 to 48 of this Annual Report for the following in respect of the Group:
-
-
-
-
-
-
a review of operations during the year and the results of those operations;
likely developments in the operations in future financial years and the expected results of those operations;
comments on the financial position;
comments on business strategies and prospects for future financial years;
details of any dividends or distributions determined, declared or paid during the financial year by the Company; and
an outline of the material business risks that may affect the Group.
Information on the Group’s business strategies and future prospects and the likely developments in the Group’s operations for future
financial years and the expected results of those operations that could result in unreasonable prejudice to the Group (for example,
information that is commercially sensitive, confidential or could give a third party a commercial advantage) has not been included in this
report.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
DIRECTORS’ REPORT (continued)
7.
Segment results prior to AASB 16 Leases
56
56
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.
For the 52 week period ended 1 July 2023
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
1,447.9
-
0.3
1,448.2
252.0
(45.0)
207.0
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
1,309.1
-
0.2
1,309.3
186.2
(39.3)
146.9
839.9
-
-
839.9
73.5
(21.5)
52.0
205.7
10.7
0.2
216.6
33.5
(4.4)
29.1
3,802.6
10.7
0.7
3,814.0
545.2
(110.2)
435.0
-
(10.7)
3.7
(7.0)
(28.6)
(5.9)
(34.5)
3,802.6
-
4.4
3,807.0
516.6
(116.1)
400.5
(5.5)
395.0
(118.4)
276.6
(3.1)
(10.5)
263.0
263.0
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
8.
Environmental regulation and reporting
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
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 FY23 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.
9.
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
57
57
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
DIRECTORS’ REPORT (continued)
10.
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 this
report, 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 1 July 2023.
11.
Non-audit services
Details of fees paid or payable to the Company’s auditor, PricewaterhouseCoopers, and its network firms for non-audit services provided
during the financial year are set out on page 144 in Note 31 – Remuneration of auditors in the notes to the consolidated financial statements.
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 during the financial year 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.
12.
Corporate Governance Statement
The Company’s Corporate Governance Statement for the financial year ended 1 July 2023 can be accessed in the Corporate Governance
section of the Company’s website.
13.
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.
14.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act is set out on page 59.
15.
Remuneration Report
The audited Remuneration Report is set out on pages 61 to 91.
16.
Options over unissued shares
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
DIRECTORS’ REPORT (continued)
17.
Directors’ and Officers’ indemnification and insurance
58
58
The Company's Constitution permits the Company to indemnify any current or former director, secretary or senior manager of the Company
or of a related body corporate of the Company out of the property 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.
The Company has entered into a Deed of Indemnity, Insurance and Access (Deed) with each of the Directors. Under the Deed, the Company
agrees to, among other things, indemnify the Director on terms consistent with the Constitution. The Deed also entitles the Director to access
to company documents and records, subject to undertakings as to confidentiality, and to receive directors’ and officers’ insurance cover paid
for by the Company.
In addition, the Company has entered into individual deeds of indemnity and insurance with each other director, secretary and officer of the
Group on terms broadly consistent with the Deed, except that certain of these deeds do not provide for access to company documents and
records.
The Company has, during the financial year, paid premiums for Directors' and Officers' insurance for the benefit of directors, secretaries and
officers of the Group against certain liabilities incurred in that capacity. The Directors’ and Officers’ insurance policy prohibits disclosure of
the nature of the liabilities insured and the premiums payable under the policy.
18.
Incorporation of other content into this report
Where this report refers to other sections and pages of the Annual Report, that content forms part of this report.
19.
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 and the accompanying Financial Report have been rounded off in accordance with that instrument to the nearest hundred
thousand dollars, unless otherwise stated.
This report is made in accordance with a resolution of the Directors.
Sally Pitkin AO
Chair
Brisbane
17 August 2023
Anthony Heraghty
Group Managing Director and
Chief Executive Officer
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
5959
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
Auditor’s Independence Declaration
As lead auditor for the audit of Super Retail Group Limited for the period 3 July 2022 to 1 July 2023, 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 2023
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 FY23
59
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
60
Auditor’s Independence Declaration
As lead auditor for the audit of Super Retail Group Limited for the period 3 July 2022 to 1 July 2023, 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 2023
Re m uneration
Report
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.
For the financial
year ended
1 July 2023
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY232023
6161
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 1 JULY 2023
CONTENTS
Section 1
Section 2
Section 3
Letter from the Chair of the Human Resources and Remuneration Committee
Key Management Personnel
FY23 Performance and Executive Remuneration Outcomes, including:
Executive Remuneration table calculated in accordance with accounting standards
Remuneration received
Remuneration granted
FY24 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 1 July 2023. 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 am pleased to present the Remuneration Report for financial year ended 1 July 2023 which describes how Non-
Executive Directors and Executive KMP are paid. Included in this report are the fixed and variable remuneration outcomes for Executive
KMP, which were determined after considering the Company’s results and their individual performance. Our remuneration strategy has
been developed to ensure remuneration is fair and competitive. During FY23 the Board continued to focus on a framework that aligns
remuneration with performance outcomes and has regard for the experience of our customers and the expectations of our shareholders
and the community. The first portion of the report focuses on FY23 performance and the link to remuneration outcomes. Statutory tables
are incorporated in Section 3 (Executive KMP) and Section 7 (Non-Executive Directors). Detail of the remuneration policies and framework
for Executive KMP is presented in Section 6.
Our Remuneration Report for FY22 received shareholder support at the 2022 Annual General Meeting (AGM), with 97.5 per cent of votes
in favour of adoption. In presenting the FY23 remuneration outcomes and considering changes for FY24, we have taken into account
feedback from shareholders.
Super Retail Group delivered another year of record sales in FY23, as we continued the successful execution of the Group strategy.
Pleasingly, despite growing inflationary pressure on costs, the group delivered a strong profit result, and a higher net profit before tax
margin compared with FY22.
We met stretch targets with the ongoing investment in the Group’s store network through new store openings, store refurbishments and
the roll out of new store formats. This was a key driver of revenue growth.
We executed on our ambition to continue growing our active club membership base, with the addition of 1.1 million active club members
in FY23, taking the Group to more than ten million active club members across its loyalty programs.
While the cost of doing business was impacted by increasing inflationary pressures, leveraging the benefits from the FY23 portfolio program
helped the Group manage its cost base.
We also saw progress against the execution of our Environmental, Social and Governance (ESG) framework, where we delivered sound
progress against our 2030 ESG goals and targets.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
62
62
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 1 JULY 2023
The Group’s financial performance has resulted in the opening of the performance gate for the Short-Term Incentive (STI) Scheme. The
Executive KMP STI achievement, as detailed in Section 3 of this report, was commensurate with the performance of the Company during
FY23. 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 113.2 (compared to target at 100 and stretch at 150).
As disclosed in the FY21 Remuneration Report, the Board made the decision in FY21 to make one-off changes to the approach to the Long-
Term Incentive (LTI) arrangements for FY21, aligned to the Group’s Medium-Term Business Plan (MTBP) formulated in the context of the
COVID-19 pandemic. At the 2020 AGM, shareholders approved the FY21 LTI grant for the Group MD and CEO. The FY21 LTI grant had a
two-year performance period ending in FY22, and also included the FY22 LTI reward. This one-off change in approach means that there
were no LTI grants eligible for vesting in FY23. Detail of the plan is shown in Section 6.
Bringing forward the FY22 LTI reward into the FY21 LTI grant also created a gap in the testing of LTI outcomes in FY24, resulting in a lower
amount of LTI to potentially vest in 2024 and 2025 when compared to the steady state, which was raised as a concern by some investors.
To address the gap in potential equity vesting in FY24 and to support retention of executives and incentivise outperformance, the Board
determined that it was appropriate to make a restricted equity-based award on a one-off basis for FY23, dependent on significant
outperformance of Normalised Net Profit Before Tax (NPBT). Refer to Section 6 for further detail.
The transition in the executive leadership of the Macpac business saw the appointment of Cathy Seaholme as Managing Director - Macpac
(MD Macpac) on 25 October 2021. As there was no LTI grant for KMP in FY22, Ms Seaholme received an initial incentive related to the
results of the Macpac business unit. This arrangement comprising both cash and equity components is detailed in Section 6.
In the context of market data for similarly sized ASX-listed companies and industry peers and continued strong performance in FY23, the
Board approved remuneration changes for some Executive KMP. 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 FY24 is to maintain alignment of Total Target Remuneration and mix towards
the 75th percentile of the relevant peer group in the market. Other than for the MD Macpac, the FY24 reward targets for STI remain the
same as FY23 reward targets for Executive KMP. Executive KMP Fixed remuneration will increase by, on average, 3.8 per cent compared
to FY23 in line with market compensation ratios. Fixed remuneration for the Group MD and CEO remains the same for FY24 as for FY23, as
does the STI target, with a 3.6 per cent increase in total target reward to be delivered in equity via an increased LTI grant (subject to
shareholder approval at the 2023 AGM). Remuneration mix is set out in Section 4.
As approved by shareholders at the 2022 AGM for the Group CEO and MD FY23 LTI award, in FY23 the Board determined that the EPS
hurdle for the LTI grant should be a cumulative measure over three years instead of the Compound Average Growth Rate previously used.
Cumulative normalised EPS was chosen as an appropriate measure given market volatility and the need to set meaningful and stretching
performance measures taking into account both headwinds and economic uncertainty. For the FY23 grant, cumulative EPS is measured
over FY23, FY24 and FY25. The Board noted in the FY22 Notice of Meeting that the hurdle would be disclosed retrospectively. The Board
considered feedback and to provide transparency has decided it is now appropriate to disclose the detail of the FY23 hurdles. Our ongoing
practice will be to retrospectively disclose these hurdles. These are now set out in Table 16.
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 FY23 Remuneration Report.
Yours sincerely,
Peter Everingham
Chair of the Human Resources and Remuneration Committee
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
6363
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
REMUNERATION REPORT
(AUDITED)
SECTION 2
Key Management Personnel
REPORTING PERIOD
ENDED 1 JULY 2023
The names and titles of the Group’s KMP for FY23, being those persons having authority and responsibility for planning, directing and
controlling the activities of the Group, are set out below.
Name
Non-Executive Directors
Sally Pitkin AO
Position
Term as KMP(1)
Chair and Independent Non-Executive
Director
Director since 1 July 2010
(Chair from 23 October 2017)
Howard Mowlem
Peter Everingham
Independent Non-Executive Director
Independent Non-Executive Director
Annabelle Chaplain AM
Independent Non-Executive Director
Judith Swales
Mark O’Hare
Former Non-Executive Directors
Independent Non-Executive Director
Non-Executive Director
13 June 2017
19 December 2017
31 March 2020
1 November 2021
4 April 2023
Reg Rowe
Executives
Anthony Heraghty
David Burns
Gary Williams
Benjamin Ward
Paul Bradshaw
Cathy Seaholme
Non-Executive Director
8 April 2004 to 4 April 2023
Group Managing Director and
Chief Executive Officer
Chief Financial Officer
Managing Director - rebel
Managing Director - Supercheap Auto
Managing Director - BCF
Managing Director - Macpac
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
(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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
REMUNERATION REPORT
(AUDITED)
SECTION 2
Key Management Personnel
controlling the activities of the Group, are set out below.
Name
Non-Executive Directors
Position
Director
Sally Pitkin AO
Chair and Independent Non-Executive
Annabelle Chaplain AM
Independent Non-Executive Director
Howard Mowlem
Peter Everingham
Judith Swales
Mark O’Hare
Reg Rowe
Executives
Anthony Heraghty
David Burns
Gary Williams
Benjamin Ward
Paul Bradshaw
Cathy Seaholme
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Non-Executive Director
Group Managing Director and
Chief Executive Officer
Chief Financial Officer
Managing Director - rebel
Managing Director - Supercheap Auto
Managing Director - BCF
Managing Director - Macpac
Term as KMP(1)
Director since 1 July 2010
(Chair from 23 October 2017)
13 June 2017
19 December 2017
31 March 2020
1 November 2021
4 April 2023
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
Former Non-Executive Directors
Non-Executive Director
8 April 2004 to 4 April 2023
(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.
63
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
64
64
REPORTING PERIOD
ENDED 1 JULY 2023
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 1 JULY 2023
SECTION 3
FY23 Performance and Executive Remuneration Outcomes
The names and titles of the Group’s KMP for FY23, being those persons having authority and responsibility for planning, directing and
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 STI Scheme and LTI
Plan operate to create a clear link between executive remuneration and the Group’s performance, motivating and rewarding the Group
MD and CEO and other Executive KMP.
The performance of the Group over the past five financial years is summarised in Table 1.
FINANCIAL PERFORMANCE
The Group produced a strong financial performance in FY23, delivering record sales of $3.8 billion and an increased Normalised Profit
Before Tax of $391 million.
Following a strong first half performance cycling a COVID-19 impacted first half in FY22, sales growth moderated in the second half as higher
interest rates and increased cost of living expenses began to impact consumer spending. For the full year, sales growth was achieved in all
brands.
A key contributor to FY23 sales growth was the enhancements to the store network including refurbishments into new formats and the
delivery of 24 new stores. The new store formats have provided a platform for range extension initiatives with key trade partners, best
represented by the rebel rCX and BCF superstore formats.
Active club customers increased to 10.3 million in the year. These customers represent 73 per cent of Group sales. This growth has been
delivered by building capability in personalisation and loyalty solutions that will be leveraged in future years.
While cost of doing business was impacted by growing inflationary pressures, the Group successfully implemented cost saving initiatives in
sourcing, supply chain & logistics, and workforce management to help manage its cost base. As a result, the Group delivered an improved
NPBT margin of 10.3 per cent, an increase of 0.5 per cent on FY22.
Table 1: Group performance
Sales ($m)
Normalised net profit before tax (NPBT) ($m)
Normalised return on capital (ROC) (%)
Normalised earnings per share (EPS) (¢)
Dividends per share (¢)
Share price at the close of the financial year ($)
(1) pre AASB16 – Leases.
(2)
The opening share price in FY19 was $8.10.
FY19
FY20
FY21
FY22
FY23
2,710.4
206.8
13.3
77.3
50.0
8.23(2)
2,825.2
218.3
14.5
78.0
19.5
8.14
3,453.1
437.5(1)
28.8(1)
136.5(1)
88.0
12.95
3,550.9
3,802.6
356.9(1)
20.5(1)
110.4(1)
70.0
8.49
390.6
20.7(1)
121.1
103.0
11.43
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
6565
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 1 JULY 2023
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 FY23, such adjustments related only to the in-year effect of items disclosed in prior years (see Table 2 below and Note 4b – Segment
information in the notes to the consolidated financial statements). There were no other discretionary adjustments made in FY23 for the
purpose of determining profit-based incentive remuneration.
Table 2: Group performance – adjustments for significant items
$m
Profit before tax
Adjustments for wages underpayment, losses from associate and reversal of provisions previously excluded
Adjustment for AASB 16 Accounting for leases impact(1)
Normalised net profit before tax (Normalised NPBT)
(1)
Targets linked to Normalised NPBT were on a pre-AASB16 Leases basis prior to FY23.
FY23
FY22
379.4
11.2
-
345.7
3.9
7.3
390.6
356.9
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 five financial years, 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). Similarly, over the past five years, the LTI has vested
between 38 per cent and 100 per cent, averaging 82 per cent. Further detail on FY23 STI outcomes and LTI vesting is included on the
following pages.
STI OUTCOMES FOR FY23
For the financial year ended 1 July 2023, the target for Normalised NPBT was set at $279.7 million, 20 per cent below the NPBT achieved in
FY22 reflecting the anticipated dampening of demand post COVID-19. The target was 28 per cent higher than the NPBT achieved in FY20
of $218.3 million. The financial gateway for the FY23 STI scheme (being 90 per cent of target) was exceeded.
The individual Key Performance Indicator (KPI) categories to determine STI awards and the FY23 achievements, referenced by the Board
for the Group MD and CEO and other Executive KMP, are detailed in Tables 3 and 4.
After reviewing the FY23 STI outcome for the Group MD and CEO, the Board made no discretionary adjustments for the purpose of profit-
based incentive remuneration. The result was a weighted score outcome of 113.2 per cent of target (75.5 per cent of maximum). This
outcome was driven by a strong result for Group financial performance, and progress on key strategic business initiatives. Notwithstanding
the strong performance in safety leadership as measured by safety effort, the underlying safety performance in terms of Total Recordable
Injuries (TRI) failed to meet expectations. Table 3 outlines the elements of the balanced scorecard.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
66
66
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 1 JULY 2023
Table 3: Group MD and CEO performance
Balanced
Scorecard
Measure
Weighting
Actual
Performance
range
Normalised Net
Profit Before Tax
35%
Stretch
Group Financial
Performance
Working Capital
Efficiency
15%
Below
Threshold
Commentary on Performance
The Normalised NPBT result for the Group was $390.6 million
which was above the stretch target for FY23.
The Normalised NPBT result is a strong result that reflects the
execution of the Group’s omni-retailing strategy, benefits from
range extension, store development and loyalty program
enhancements. These initiatives supported NPBT margin
expansion in the year.
The Group 13 month rolling average monthly net working capital
result did not meet the threshold due to elevated net working
capital levels in BCF and rebel. Total inventory as a percentage of
sales was 20.8 per cent, in line with pre-COVID-19 levels.
Business
Improvement
Delivery of FY22
portfolio benefits
in accordance
with plan
20%
Stretch
The FY23 portfolio was successfully delivered in accordance with
plan and the achievement of the FY22 benefits.
The property portfolio delivery was in line with stretch targets set.
Customer
Revenue from
‘active customers’
15%
Stretch
The target for organic growth through existing customers was
exceeded with active customer revenue up 4.9 per cent from the
prior year.
Non-financial/
Environment,
Social and
Governance
(ESG)
Safety
15%
Below
Threshold
The Safety Effort (leading indicator) measure exceeded the target;
however, this did not translate into the required reduction in TRI
and customer incidents.
Execution of ESG
framework
Target
Execution delivered against the FY23 objectives with solid
progress against 2030 goals.
Table 4: Other Executive KMP performance outcome
Name
Role
Financial
Performance
Business
Improvement
Paul Bradshaw
Managing Director - BCF
Target
Target to
Stretch
David Burns
Chief Financial Officer
Target
Stretch
Customer
Stretch
Target to
Stretch
Non-
financial/ESG
Threshold to
Target
Threshold to
Target
Cathy Seaholme
Benjamin Ward
Managing Director -
Macpac
Managing Director -
Supercheap Auto
Stretch
Threshold to
target
Threshold to
Target
Threshold to
Target
Stretch
Stretch
Stretch
Gary Williams
Managing Director - rebel
Target
Stretch
Stretch
Below
Threshold
Threshold to
Target
STI
scorecard
outcome
Target to
Stretch
Target to
Stretch
Target to
Stretch
Target to
Stretch
Target to
Stretch
The STI outcomes for Executive KMP are reflected in Table 5.
The STI award for all Executive KMP will be delivered 70 per cent as cash and 30 per cent as restricted shares. The restricted share deferral
is released 50 per cent in August 2024 and 50 per cent in August 2025. This deferral supports an increase in executive shareholding,
enhances risk management and executive retention, and reflects broader market practice.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
6767
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 1 JULY 2023
Table 5: 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
113.2
1,358,400
407,520
950,880
75.5%
24.5%
Other Executive KMP
Paul Bradshaw
David Burns
Cathy Seaholme
Benjamin Ward
Gary Williams
LTI OUTCOMES FOR FY23
112.3
111.5
117.7
133.9
114.8
449,200
557,667
290,538
669,701
574,172
134,760
167,300
87,162
200,910
172,252
314,440
390,367
203,376
468,791
401,920
74.9%
74.3%
78.5%
89.3%
76.5%
25.1%
25.7%
21.5%
10.7%
23.5%
As disclosed in the FY21 Remuneration Report, the Board made the decision to make one-off changes to the approach to the LTI
arrangements for FY21, aligned to the Group’s Medium-Term Business Plan (MTBP), which was formulated in the context of the COVID-19
pandemic. At the 2020 AGM, shareholders approved the FY21 LTI grant to the Group MD and CEO. The FY21 LTI grant included the LTI
reward for FY22. This one-off change in approach resulted in no testing of LTI grants in FY23 for Executive KMP and other members of the
ELT.
There were a number of other prior year LTI grants that had tranches vest in FY23, due to the staggered approach to vesting of different
tranches of the performance rights. As the LTI vests over a period after the performance hurdles have been tested, the value of LTI shown
in the remuneration tables includes a portion of the FY18 grant and all subsequent grants.
Table 6 outlines the performance outcomes and the subsequent vesting for each of the LTI performance rights granted and performance
tested since FY17. Each grant (other than the FY21 LTI grant) is subject to equally weighted performance measures based on earnings per
share (EPS) and return on capital (ROC). Grants up to and including the FY20 grant used an EPS measure being compound average growth
rate of Normalised EPS over three financial years. The hurdles for the FY21 LTI grant are detailed in Table 18 and were measured over the
two years of the MTBP established in the uncertainty of the COVID-19 pandemic.
Table 6: Proportion of LTI vesting over the past five years
Grant
name
Grant date
FY17
FY18
FY19
FY20
September
2016
September
2017
September
2018
September
2019
Grant
name
Grant date
FY21
November
2020
Financial
results
determining
vesting (1)
FY17, FY18,
FY19
FY18, FY19,
FY20
FY19, FY20,
FY21
FY20, FY21,
FY22
Financial
results
determining
vesting
Normalised EPS
three-year compound average
growth rate (50% weight)
Normalised ROC
three-year average
(50% weight)
Performance
outcome
%
Qualifying
for vesting
%
Forfeited
%
Performance
outcome
%
Qualifying
for vesting
%
Forfeited
%
13.8
44.0
6.0
5.3
23.8
12.6
Nil
50.0
50.0
46.7
Nil
3.3
13.0
13.6
19.0
21.3
33.3
16.7
38.3
11.7
50.0
50.0
Nil
Nil
Normalised NPBT
two-year aggregate
(50% weight)
Normalised ROC
two-year average
(50% weight)
Performance
outcome
$m
Qualifying
for vesting
%
Forfeited
%
Performance
outcome
%
Qualifying
for vesting
%
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
68
68
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 1 JULY 2023
Beginning in FY23, cumulative Normalised EPS over three financial years has been used as the EPS measure. For the FY23 grant, cumulative
Normalised EPS is measured over the three financial years FY23, FY24 and FY25. The ROC measure is the Normalised ROC averaged over
three financial years. An outline of how these measures are calculated is included in Table 16.
OTHER FY23 OUTCOMES – OUTSIDE OF THE REWARD FRAMEWORK
MD Macpac - Initial Incentive
As disclosed in the FY22 Remuneration Report, 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 for FY22 and FY23. The Board determined that the stretch
target was exceeded, noting that EBIT for FY23 was more than double that for FY19 (pre-COVID-19). As a result, 100 per cent of this
incentive is payable partially in cash and partially in equity in accordance with the terms detailed in Section 6 of this report.
One-off Outperformance Award
Bringing forward the FY22 LTI reward into the FY21 LTI grant also created a gap in the testing of LTI outcomes in FY24, resulting in a lower
amount of LTI to potentially vest in 2024 and 2025 when compared to the steady state. To address the gap in potential equity vesting in
FY24, the Board determined that it was appropriate to make a restricted equity-based award on a one-off basis for FY23, dependent on
significant outperformance of NPBT. The maximum level of this award is considered met when Normalised NPBT exceeds the stretch target
by more than 7.5 per cent. Super Retail Group achieved an FY23 Normalised NPBT of $390.6 million, which exceeded the stretch target by
more than 7.5 per cent. As a result, the Board approved 100 per cent of this award. The resulting awards will be delivered in the form of
restricted shares in September 2023, with restrictions lifting in August 2024. Refer to Section 6 for further detail.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
6969
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 1 JULY 2023
Executive KMP remuneration outcomes for FY23
Table 7 details remuneration elements prepared in accordance with Australian Accounting Standards. Restricted shares and performance
rights are valued at fair value, accrued over the performance period and vesting period, and cash bonus (STI) for FY23 is the amount earned
for FY23 and to be paid in September 2023. 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 7: Remuneration for Executive KMP calculated in accordance with Australian Accounting Standards
Year
Short-term benefits
Cash
salary
$
Cash
bonus
$
Non-
monetary
(1)
benefits
$
Long-term
benefits
Annual and
long service
(2)
leave
$
Name
Post-
employment
benefits
Termination
benefits
Share-based
payments
Super-
annuation
$
Termination
benefits
$
Performance
(3)
Rights
$
Restricted
Shares
$
Total
Total
$
Anthony Heraghty FY23
1,468,738
950,880
5,929
FY22
1,351,907
1,050,525
Paul Bradshaw
David Burns
Cathy Seaholme
(4)
FY23
FY22
FY23
FY22
FY23
FY22
674,667
314,440
674,119
371,000
690,767
663,026
508,592
349,992
390,367
449,184
302,557
191,458
Benjamin Ward
FY23
743,672
468,791
Gary Williams
FY22
FY23
FY22
729,132
393,868
740,767
739,469
401,920
472,642
Former Executive KMP
Alex Brandon
(5)
(6)
Total
Total
FY23
FY22
FY23
FY22
-
122,918
-
-
-
-
-
3,900
900
-
49,975
995
7,305
3,900
900
-
-
9,609
(7,386)
6,023
18,851
(4,300)
43,179
21,745
18,873
13,126
23,687
(1,025)
51,557
-
757
25,733
26,243
25,383
24,900
25,446
24,880
-
12,955
25,400
28,963
25,400
25,031
-
-
-
-
-
-
-
-
-
-
-
-
-
-
760,638
706,623
3,928,150
1,043,528
335,791
3,800,608
297,978
421,796
325,175
466,154
250,560
1,569,051
142,566
1,653,232
308,618
1,739,973
182,052
1,829,375
75,256
202,454
1,110,604
-
71,238
694,491
329,641
453,759
329,641
447,972
313,669
1,895,294
171,918
1,808,632
315,045
1,815,648
185,263
1,922,834
-
-
-
27,971
379,640
279,224
27,072
837,582
4,827,203
2,828,955
14,724
45,178
127,362
-
2,118,329
2,096,969
12,058,720
4,630,563
2,928,677
59,080
149,518
170,943
379,640
3,112,433
1,115,900
12,546,754
(1)
(2)
(3)
Includes salary-sacrificed items such as novated leases, and car parking, including any FBT payable, and KMP relocation and accommodation.
Long-term benefits include the accounting expense of annual and long-service leave accrued.
FY22 and FY23 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 Group
MD and CEO on 20 February 2019 until the date of vesting on 20 February 2022 (tranche 1) and 20 February 2023 (tranche 2), consistent with Mr Heraghty’s contract terms.
(4) 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 (restricted shares). 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 in FY22, and
$99,181 and $80,660 respectively in FY23.
(5) Alex Brandon ceased being a KMP on 24 October 2021.
(6)
The reporting period of 3 July 2022 to 1 July 2023 is a period of 52 weeks, compared to the comparative reporting period of 27 June 2021 to 2 July 2022 representing 53 weeks. The impact
of the 53rd week in the prior period was an increase in expense of $0.1 million.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
70
70
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 1 JULY 2023
Table 8 details the remuneration received by Executive KMP during FY23. As with Table 7, the cash STI amount is the amount earned in
FY23 and that will be paid in September 2023. The amount shown for the value of 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 ($10.07 on 18 August 2022). This value for restricted shares contrasts with Table 7, which shows the FY23 portion of the fair
value of restricted shares amortised over the relevant performance measurement and vesting period.
The amount shown for the value of performance rights (LTI) vesting represents the number of ordinary shares in the Company received on
vesting of performance rights during FY23 multiplied by the closing price of ordinary shares of the Company on the ASX on the date of
vesting ($10.24 on 1 September 2022 (FY18, FY19 and FY20 grants), $10.42 on 1 November 2022 (FY21 grant) and $13.53 on 24 February
2023 (co-investment)). The ordinary shares received on vesting of performance rights derive from grants since FY18, which have staggered
vesting dates after the end of the performance period, as detailed in Table 14. This value for LTI contrasts with Table 7, which shows the
FY23 portion of the fair value of equity grants amortised over the relevant performance measurement and vesting periods.
Table 8: Actual remuneration received
Cash and non-monetary
Equity
Total
FY23
Name
Fixed Pay(1)
$
Other
$
Anthony Heraghty
1,500,400
43,275(2)
Paul Bradshaw
David Burns
Cathy Seaholme
Benjamin Ward
Gary Williams
700,050
720,113
508,592
770,067
770,067
-
-
-
-
-
Value of
restricted shares
on which
restrictions
ceased
$
Value of LTI
(performance
rights) vesting
$
Total
$
203,777
87,931
141,061
-
134,586
136,690
1,456,227
4,154,559
516,397
706,579
1,618,818
1,958,120
-
869,522
568,192
568,192
1,941,636
1,876,869
Cash
bonus
$
950,880
314,440
390,367
360,930
468,791
401,920
Fixed Pay is defined in Section 6. Changes in accruals are not included in this table as they do not affect the amounts received by the individual.
(1)
(2) 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 Group MD and CEO on
20 February 2019 until the date of vesting on 20 February 2023, consistent with Mr Heraghty’s contract terms.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
7171
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
REMUNERATION REPORT
(AUDITED)
SECTION 4
FY24 Remuneration Matters
REPORTING PERIOD
ENDED 1 JULY 2023
Looking ahead to FY24, the following changes to remuneration quantum and approach have been approved by the Board.
The Group MD and CEO’s fixed remuneration and STI will remain unchanged for FY24. Mr Heraghty’s target LTI will increase to $1,650,000
(face value) which will increase his total target remuneration opportunity to $4,350,000 for FY24, an increase of 3.6 per cent.
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. This continues the Board’s
strategy to increase the weight of equity within the pay mix. Mr Heraghty’s fixed remuneration and total target remuneration are
positioned towards the 75th percentile of the relevant peer group. During his tenure, Mr Heraghty has led the team to add considerable
value for shareholders, overseeing increases in Normalised EPS of 56.7 per cent (FY19 compared to FY23) while consistently maintaining
ROC above target ranges.
Table 9 shows the remuneration mix as a percentage of total target reward with LTI weighted at 38 per cent for FY24 compared to 36 per
cent for FY23. The Group MD and CEO’s remuneration opportunity is increasingly skewed toward long-term variable pay, with a significant
portion provided in equity. The Board considers this approach appropriate to reward and retain a high-calibre executive, while aligning the
interests of management and shareholders via a high proportion of variable pay with significant equity exposure.
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 FY24. The intent of the changes is to align Total
Target Remuneration and mix towards the 75th percentile of the relevant peer group in market. Other than the MD Macpac, the reward
targets for STI remain the same as FY23 for Executive KMP. The reward changes for the MD Macpac for FY24 increases the weight of
variable reward. Executive KMP FY24 fixed remuneration will increase by 3.8 per cent on average compared to FY23, in line with market
compensation ratios. The FY24 target remuneration mix is shown in Table 9.
Table 9: Remuneration mix of Executive KMP at Target(1)
Anthony Heraghty
Paul Bradshaw
David Burns
Cathy Seaholme2
Benjamin Ward
Gary Williams
FY24
FY23
FY24
FY23
FY24
FY23
FY24
FY23
FY24
FY23
FY24
FY23
0%
34.5%
35.7%
19.3%
20.0%
8.3%
8.6%
37.9%
35.7%
43.8%
43.1%
40.9%
40.9%
43.5%
44.1%
42.1%
41.7%
42.1%
41.7%
20%
16.4%
17.2%
7.0%
7.4%
19.9%
19.9%
8.5%
8.5%
16.7%
16.0%
7.2%
6.9%
18.4%
18.9%
18.4%
18.9%
7.9%
8.1%
7.9%
8.1%
32.8%
32.3%
30.7%
30.7%
32.6%
33.1%
31.6%
31.3%
31.6%
31.3%
40%
60%
80%
100%
Fixed pay
Cash STI at target
Deferred STI at target
LTI Face Value
(1)
(2)
The target mix does not include the one-off outperformance grant approved by the Board for FY23.
The target mix for Cathy Seaholme does not include her initial incentive described in Section 6.
The FY24 LTI grant, as it relates to the Group MD and CEO, will be outlined in the 2023 Notice of AGM for approval by shareholders.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
72
72
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 1 JULY 2023
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 deferred component of STI awards and certain other 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.
EQUITY INTERESTS IN THE COMPANY HELD BY EXECUTIVE KMP
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.
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. Table 10 also 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 14) and on allocation of
restricted shares (see also Table 12).
Table 10: Movement in equity interests held by Executive KMP and their related parties during FY23(1)
Restricted
shares /
Performance
rights granted
as
remuneration
43,924
146,341(5)
15,512
51,219
18,781
52,682
5,305
36,060
16,468
56,341
19,762
56,341
Performance
rights vested
/ shares
received on
vesting of
performance
rights
136,815
(136,815)
49,900
(49,900)
68,452
(68,452)
-
-
54,897
(54,897)
54,897
(54,897)
Held at
3 July 2022
159,101
334,308
19,030
131,271
98,314
164,767
-
-
40,347
144,844
37,734
144,844
Performance
rights lapsed
Other net
change(2)
Held at
1 July 2023
-
(87,000)
(2,848)
-
(1,351)
-
-
-
-
(51,182)
(1,454)
-
-
-
(1,454)
-
-
-
90
-
-
(28,000)
(1,454)
-
252,840
340,986
84,442
131,239
134,365
147,543
5,305
36,060
111,802
144,834
84,393
144,834
Anthony Heraghty
Paul Bradshaw
David Burns
Cathy Seaholme
Benjamin Ward
Gary Williams
Type of equity
Ordinary shares(3)
Performance rights(4)
Ordinary shares(3)
Performance rights(4)
Ordinary shares(3)
Performance rights(4)
Ordinary shares(3)
Performance rights(4)
Ordinary shares(3)
Performance rights(4)
Ordinary shares(3)
Performance rights(4)
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) Other net change includes the purchases and sales of shares.
(3)
(4)
(5)
There are no ordinary shares held nominally at the end of the reporting period.
There are no performance rights at the end of the reporting period which are vested and unexercised.
Shareholders approved (under ASX Listing Rule 10.14) the grant of these performance rights (relating to Mr Heraghty’s FY23 LTI) at the AGM on 27 October 2022. See Section 6 for details on
the terms of this award.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
7373
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 1 JULY 2023
RESTRICTED SHARES HELD BY EXECUTIVE KMP
Each grant of restricted shares affecting remuneration in the current or a future reporting period is set out in Table 11.
Table 11: Terms and conditions of restricted shares
Grant
Grant date
Vesting dates
FY20 Deferred STI
8 September 2020
19 August 2021, 18 August 2022
FY21 Deferred STI
31 August 2021
18 August 2022, 18 August 2023
FY22 Deferred STI
30 August 2022
18 August 2023, (on or around) 23 August 2024
Fair value per
restricted share at
grant date
$8.92
$12.53
$10.25
Table 12 summarises the movement in the number of restricted shares held during the financial year by Executive KMP including their
related parties.
The proportion of FY23 STI achieved (percentage of the maximum achievable), and the proportion forfeited as a result of not meeting
performance hurdles is set out by individual in Table 5 and was similarly disclosed in previous reports for earlier deferred STI grants. As set
out in Table 15, FY23 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 2024 and 50 per cent in August 2025.
The fair value of restricted shares is the market value at the grant date and is calculated as 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.
Table 12: Summary of Executive KMP restricted shares granted, vested or lapsed
Granted
but not
vested
3 July 2022
Granted in
FY23
Vested in
FY23(1)
% vested
Lapsed or
forfeited in
FY23
% lapsed or
forfeited
Granted
but not
vested
1 July 2023
$ value of
restricted
shares
granted in
the year(2)
Anthony Heraghty
FY20 Deferred STI
FY21 Deferred STI
FY22 Deferred STI
Paul Bradshaw
FY20 Deferred STI
FY21 Deferred STI
FY22 Deferred STI
David Burns
FY20 Deferred STI
FY21 Deferred STI
FY22 Deferred STI
Cathy Seaholme
FY22 Deferred STI
Benjamin Ward
FY20 Deferred STI
FY21 Deferred STI
FY22 Deferred STI
Gary Williams
FY20 Deferred STI
FY21 Deferred STI
FY22 Deferred STI
8,450
23,573
-
1,990
13,484
-
5,949
16,118
-
-
-
43,924
-
-
15,512
-
-
18,781
(8,450)
(11,786)
-
(1,990)
(6,742)
-
(5,949)
(8,059)
-
100%
50%
0%
100%
50%
0%
100%
50%
0%
-
5,305
-
0%
5,085
16,561
-
5,474
16,201
-
-
-
16,468
-
-
19,762
(5,085)
(8,280)
-
(5,474)
(8,100)
-
100%
50%
0%
100%
50%
0%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
-
11,787
43,924
-
6,742
15,512
-
8,059
18,781
n/a
n/a
450,225
n/a
n/a
159,000
n/a
n/a
192,508
5,305
57,037
-
8,281
16,468
-
8,101
19,762
n/a
n/a
168,801
n/a
n/a
202,561
(1) Vesting of restricted shares refers to restrictions being lifted.
(2)
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 and will
be determined by multiplying the number of vested shares by the share price. The minimum total value of grants for future financial years is nil if relevant vesting conditions are not met.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
74
74
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 1 JULY 2023
PERFORMANCE RIGHTS HELD BY EXECUTIVE KMP
Each grant of performance rights affecting remuneration in the current or a future reporting period is set out in Table 13.
Table 13: Terms and conditions of performance rights
Grant
Grant date
Vesting dates(1)
FY18
FY19
FY20
FY21(3)
FY23
1 September 2017
1 September 2020, 1 September 2021, 1 September 2022
1 September 2018
1 September 2021, 1 September 2022, 1 September 2023
1 September 2019
1 September 2022, 1 September 2023
1 November 2020
1 November 2022, 1 November 2023, 1 November 2024
4 November 2022
4 November 2025, 4 November 2026
Fair value per performance right at grant
date
$6.38
$7.65
$7.72(2)
$9.47
$7.88
(1)
(2)
(3)
Refer to Section 6 for details of vesting conditions. Performance rights expire up to eight years from grant date.
The performance rights value for the 1 September 2019 grant was $7.72, with the exception of 53,262 performance rights in relation to a one-off co-investment grant to Mr Heraghty 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, 25 per cent in
February 2023 and the remainder vesting in February 2024 subject to their terms.
The grant for FY21 was inclusive of the FY22 opportunity for Executive KMP. There was no grant to Executive KMP in FY22. Grants were made to other selected employees.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
7575
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 1 JULY 2023
Table 14 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 LTI grants to Executive KMP in FY22.
Table 14: Summary of Executive KMP performance rights granted, vested or lapsed
Granted but
not vested
3 July 2022
Granted in
FY23
Vested in
FY23
% vested(1)
Lapsed or
forfeited in
FY23
% lapsed or
forfeited
Granted but
not vested
1 July 2023
Estimated
value yet to
vest $(2) (3)
Anthony Heraghty
FY18
FY19
FY20
FY20(4)
FY21
FY23
Paul Bradshaw
FY20
FY21
FY23
David Burns
FY18
FY19
FY20
FY21
FY23
Cathy Seaholme
FY23
Benjamin Ward
FY20
FY21
FY23
Gary Williams
FY20
FY21
FY23
5,700
25,100
86,294
26,631
190,583
-
40,913
90,358
-
4,870
22,003
44,060
93,834
-
-
-
-
-
-
146,341
-
-
51,219
-
-
-
-
52,682
(5,700)
(12,550)
(41,723)
(13,315)
(63,527)
-
(19,781)
(30,119)
-
(4,870)
(11,001)
(21,303)
(31,278)
-
-
36,060
-
44,060
100,784
-
44,060
100,784
-
-
-
56,341
-
-
56,341
(21,303)
(33,594)
-
(21,303)
(33,594)
-
100%
50%
48%
50%
33%
-
48%
33%
0%
100%
50%
48%
33%
0%
0%
48%
33%
0%
48%
33%
0%
-
-
(2,848)
-
-
-
(1,351)
-
-
-
-
(1,454)
-
-
-
(1,454)
-
-
(1,454)
-
-
0%
0%
3%
0%
0%
-
3%
0%
0%
0%
0%
3%
0%
0%
0%
3%
0%
0%
3%
0%
0%
-
12,550
41,723
13,316
127,056
146,341
19,781
60,239
51,219
-
11,002
21,303
62,556
52,682
-
-
-
15,361
143,573
847,028
-
68,070
296,458
-
-
-
70,688
304,926
36,060
208,717
21,303
67,190
56,341
21,303
67,190
56,341
-
75,924
326,104
-
75,924
326,104
(1)
(2)
(3)
(4)
(5)
For details of the proportion of LTI vesting and the performance outcomes of each grant refer to Table 6.
The value yet to vest is the unamortised share-based payments expense as at 1 July 2023.
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
dependent on the share price at that time (by multiplying the share price at the time of vesting by the number of performance rights that vest).
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, 25 per cent in February 2023 and the remainder will vest in February 2024, subject to the terms of the grant.
Except for the FY23 award to the Group MD and CEO, ordinary shares are automatically allocated on vesting of performance rights. The Group MD and CEO may exercise his vested FY23
Performance rights up to eight years following date of grant. At the end of the reporting period there are no performance rights which are vested and unexercised.
Performance rights are expensed over their vesting period in line with the vesting conditions. Refer to Section 6 for details of these vesting
conditions.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
76
76
REMUNERATION REPORT
(AUDITED)
MINIMUM SECURITIES HOLDING POLICY
REPORTING PERIOD
ENDED 1 JULY 2023
The Company’s Minimum Securities Holding Policy sets out the minimum shareholding requirements that apply to KMP. The purpose of
the Policy is to strengthen alignment between the interests of KMP and the interests of shareholders.
The Group MD and CEO and other Executive KMP are required to acquire ordinary shares in the Company equivalent in value to the amounts
shown below by a specified date:
Group MD and CEO
Other Executive KMP
* Before tax and superannuation
150 per cent of annual fixed remuneration*
100 per cent of annual fixed remuneration*
The Group MD and CEO and other Executive KMP must meet the minimum shareholding target within five years of their
appointment. Unvested equity awards, including performance rights, are counted towards the target in circumstances where the equity
awards are no longer subject to performance hurdles.
As at the date of this report, all Executive KMP except for Ms Seaholme have met the minimum shareholding requirement, based on the
Company’s closing share price on 30 June 2023. Ms Seaholme has five years from the date of her appointment in October 2021 to meet
the requirement.
The Minimum Securities Holding Policy is available in the Corporate Governance section of the Company’s website.
SHARES ISSUED ON VESTING OR EXERCISE OF PERFORMANCE RIGHTS
Entitlements to receive ordinary shares upon the vesting of performance rights during FY23 were fulfilled through on-market share
purchases.
There were no new ordinary shares of the Company issued on the vesting of performance rights during FY23, or since the end of the
financial year and up to the date of this report.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
7777
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 1 JULY 2023
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 9.
Our Remuneration
Objectives
Attract, motivate and
retain executive talent.
Differentiate reward to
drive performance,
including values and
behaviours.
An appropriate balance
of fixed and ‘at-risk’
components focused on
long-term strategy and
short-term milestones.
Alignment to shareholder
interests and value
creation through equity
components granted as
part of long-term
incentives or through the
partial deferral of 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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
78
78
REMUNERATION REPORT
(AUDITED)
REMUNERATION BENCHMARKS
REPORTING PERIOD
ENDED 1 JULY 2023
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 S&P/ASX 200 Global Industry Classification Standard Consumer Discretionary sector; and
for Brand MDs, S&P/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
Fixed Pay 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 Fixed Pay 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 FY23 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 15.
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 15: Key aspects of the FY23 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 1 July 2023.
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 FY23
7979
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 1 JULY 2023
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 FY23, 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
Non-financial/ESG
50
20
15
15
Normalised NPBT
Working Capital Efficiency
Delivery of Strategic Portfolio
Active Customer Revenue
Safety Effort
ESG goals
FY23 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
Restricted shares
FY23 STI awards are delivered as 70 per cent cash and 30 per cent restricted shares.
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 FY23 deferred STI will lift in
August 2024 and the restrictions on 50 per cent will lift in August 2025. There are no further
performance conditions.
Restricted shares are retained by exiting executives, unless the Board determines otherwise,
subject to the original vesting timeline.
A restricted share is a fully paid ordinary share in the Company awarded to and held by an 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 is held in trust and 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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
80
80
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 1 JULY 2023
The Human Resources and Remuneration Committee (HRRC) makes recommendations to the Board in relation to the design of the STI
scheme, KPIs 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 19.
LONG-TERM INCENTIVE REWARD
The Group’s remuneration structure aims to align LTIs 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, in each case over a three year period, are appropriate measures of sustainable
shareholder returns.
Table 16: Key aspects of the FY23 LTI Plan
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 Board has the absolute discretion to grant the Executive any incentive award under the LTI
Plan and to determine the quantum of any such award.
LTI instrument
Performance rights are granted by the Company at no cost to the participant. 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 Board retains the discretion to settle the rights in cash.
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 75 per cent and 100 per
cent of their Fixed Pay. 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 on or around 1 July 2025.
Performance hurdles
Equity grants to Executive KMP and other executives are in two equal tranches, 50 per cent
relating to the Normalised EPS over the performance period and 50 per cent relating to average
Normalised ROC over the performance period.
Normalised EPS
Normalised ROC
Normalised earnings per share as presented in the financial statements in note 18(c). Performance
is cumulative over the performance period.
Pre-AASB16 Normalised NPAT adjusted for interest after tax divided by the average of pre-AASB16
Net Assets normalised for adjustments for brand name impairment, at the beginning and the end
of the financial year, less cash plus borrowings.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
8181
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 1 JULY 2023
Vesting schedule
The performance conditions for performance rights granted in FY23 were:
Measures
Normalised EPS over the
performance period
Normalised ROC over the
performance period
Proportion that
qualifies for
delivery in
accordance with
the vesting
period outlined
below
Below $2.45:
0% of this portion
At $2.45:
50% of this portion
At $3.00:
100% of this portion
Straight-line vesting: Between
$2.45 and $3.00
Below 10%:
0% of this portion
At 10%:
30% of this portion
At 12%:
50% of this portion
At 15%:
100% of this portion
Straight-line vesting: Between 10%
and 12% and between 12% and 15%
The various vesting points (Threshold, Midpoint and Maximum) for the grants since FY17 are
shown in Table 17.
Significant items
The Board may adjust for any significant events or items considered unusual by their nature or size
and/or not being in the ordinary course of business.
Qualifying/qualified
performance rights
Performance rights which have become eligible for vesting, having met the performance hurdle
but not yet met the service condition.
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:
Testing and time restrictions
Exercise terms
Time after grant of
performance rights:
Three years
Four years
Percentage of
performance rights that vest:
50
50
Note that for grants prior to FY20, qualified performance rights vest 50 per cent after three years,
25 per cent after four years and 25 per cent after five years.
At the end of the performance period, equity grants are tested against the performance hurdles
set. Awards will only vest once the Board, in its discretion, determines that relevant conditions
have been satisfied following the end of the applicable vesting period. If the performance hurdles
are not met at the testing date, the performance rights will lapse. Qualifying performance rights
may also lapse prior to vesting at the Board’s discretion. 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.
For the Group MD and CEO, performance rights which vest may be exercised (at no cost to the
executive) at any time up to the date that is eight years after the grant date. Any performance
rights which are not exercised before that date will lapse.
For other executives, shares are automatically allocated on vesting of performance rights and no
exercise mechanism applies.
Dividends and voting rights
Performance Rights do not carry voting or dividend rights.
For the Group MD and CEO, for Performance Rights that vest, the Board has determined that a
dividend equivalent payment will be paid by the Company for the period between vesting and
exercise of those rights. The dividend equivalent payment (if any) will be paid once performance
rights are exercised and will be paid in cash (unless the Board determines otherwise), equal to the
value of the dividends inclusive of an allowance for imputation credits that attach to the dividends.
Unless the Board determines otherwise, no dividend equivalent payment will be made in respect
of any vested performance rights that have lapsed for any reason.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
82
82
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 1 JULY 2023
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/securityholder 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
securityholders.
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 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 19.
Table 17: Vesting schedule (Threshold, Midpoint 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% of this
portion at this
point)
N/A
N/A
8%
8%
Midpoint
(50% of this
portion)
Maximum
(100% of this
portion)
10%
10%
10%
10%
15%
15%
13%
13%
Threshold
(zero below this,
30% of this
portion at this
point)
10%
10%
10%
10%
Midpoint
(50% of this
portion)
Maximum
(100% of this
portion)
12%
12%
12%
12%
15%
15%
15%
15%
Grant
FY17
FY18
FY19
FY20
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
8383
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 1 JULY 2023
Table 18: Key aspects of the LTI plan modifications for the FY21 grant
Financial years applicable
The grant for FY21 included both the FY21 and the FY22 opportunity for Executive KMP. There was
no LTI 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 MTBP 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.
Vesting schedule
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
as set out in the table below.
Normalised NPBT
Percentage of performance rights attributed to Normalised
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)
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 as
set out in the table below.
Normalised ROC
Below 12%
At 12%
Between 12% and 15.9%
At 15.9%
Percentage of performance rights attributed to Normalised
ROC hurdle that become ‘Qualified performance rights’ and
are available to vest
0%
50%
On a pro-rata basis
100%
Qualifying/qualified
performance rights
Performance rights which have become eligible for vesting, having met the performance hurdle
but not yet met the service condition.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
84
84
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 1 JULY 2023
Vesting period
For the FY21 grant, once the performance conditions were satisfied (within the performance
period), the performance rights 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
One third
One third
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/securityholder 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
securityholders.
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 19.
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 LTI Plan, as well as the
other equity awards described in this report (see ‘Other Equity’ section below). Table 19 outlines further key provisions under the EIP rules
that apply to the restricted shares (deferred STI), performance rights (LTI) and other equity awards described in this report. The EIP rules
are available in the Corporate Governance section of the Company’s website.
Table 19: Key terms of the EIP rules
Prohibition on hedging
Claw-back provisions
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. 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 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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
8585
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 1 JULY 2023
Treatment on cessation of
employment
Change of control provisions
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.
Should a change of control event occur, the Board has discretion to determine how unvested
awards 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.
All equity awarded under the EIP has a maximum value dependent on future share price and the minimum value of nil.
OTHER EQUITY
CEO Co-investment award
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
the requirement for Mr Heraghty to acquire shares of an equivalent value 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 (50 per cent), fourth (25 per cent)
and fifth (25 per cent) anniversaries of the date of the contract. The first two tranches (50 per cent and 25 per cent) of the co-investment
award vested in February 2022 and February 2023 as shown in Section 5. The remainder will vest in February 2024 subject to the terms of
the grant. A dividend equivalent payment is also payable as described in Table 7.
MD Macpac - initial incentive award
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
segment against the budget for FY22 and FY23, 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, 25 per cent will be delivered in shares in September 2023 and 25 per cent will be delivered in
restricted shares in September 2023 on which restrictions will lift in August 2024. The Board considered this was an appropriate
performance-related mechanism to build share ownership in the period before any reward is received from Ms Seaholme’s first LTI grant.
The first LTI grant was made to Ms Seaholme in FY23 and will be eligible to vest in FY26 subject to achievement of performance hurdles.
One-off outperformance award
The Board made the decision in FY21 to make one-off changes to the approach to the LTI arrangements. The FY21 LTI had a two-year
performance period ending in FY22, and also included the FY22 LTI reward. There was no LTI grant in FY22 for Executive KMP. Bringing
forward the FY22 LTI reward into the FY21 LTI grant created a gap in the testing of LTI outcomes in FY24 resulting in a lower amount of LTI
to potentially vest in 2024 and 2025 when compared to the steady state. To address this gap in potential equity vesting in FY24 and to
support retention of executives and incentivise outperformance, the Board determined that a restricted equity-based award on a one-off
basis was appropriate for FY23 dependent on significant outperformance of NPBT.
The one-off outperformance award was based on outperformance of the NPBT stretch target. The maximum level of this award is
considered met when Normalised NPBT exceeds the stretch target by more than 7.5 per cent. The FY23 Normalised NPBT result of $390.6
million was such that the Board approved 100 per cent of this award. Once the stretch target is met, an individual must also achieve a
scorecard result of at least 100 per cent of target before they are eligible to receive the one-off outperformance award. The additional
reward to Executives under this one-off outperformance award represents three per cent of the additional profit generated. Following
discussions with the Board’s independent remuneration advisers, the Board was satisfied that this is well within market practice. The value
of the award determined by the Board will be delivered in the form of restricted shares in September 2023 with restrictions lifting in August
2024. Delivery of the reward in the form of equity continues to build the Executives’ holdings towards the Minimum Securities Holding,
strengthening alignment to shareholders’ interests. Deferral of the reward also allows the Board to apply claw-back in the unlikely event
that should be warranted.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
86
86
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 1 JULY 2023
TERMINATION ARRANGEMENTS
No Executive KMP ceased employment with Super Retail Group during FY23.
SERVICE AGREEMENTS
Remuneration and other terms of employment for ongoing Executive KMP are formalised in service agreements. Each of these agreements
provide for, but do not guarantee, participation in STI and LTI arrangements. All service agreements with Executive KMP may be terminated
by either party as shown in Table 20.
Table 20: Key terms of Executive KMP Service Agreements
Name
Anthony Heraghty
Paul Bradshaw
David Burns
Cathy Seaholme
Benjamin Ward
Gary Williams
Term of
agreement
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
(1) Commencement date of KMP service agreement.
Agreement
commencement
date(1)
Notice period if
Company
terminates
Notice period if
executive
terminates
Commencement
date with
Super Retail Group
20 February 2019
12 months
25 November 2019
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
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.
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
Under the Company's Securities Trading Policy, Company securities cannot be hedged prior to their vesting or while they are subject to a
holding lock or restriction on dealing under the terms of an employee, executive or director equity plan operated by the Company.
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
8787
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 1 JULY 2023
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 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 21 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 21: Non-Executive Director fees
Chair(1)
Members
Board
$360,000
$145,000
(1) Committee fees are not paid to the Chair of the Board.
Audit and Risk
Committee
Human Resources and
Remuneration Committee
Nomination Committee
$45,000
$15,000
$45,000
$15,000
Nil
Nil
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
88
88
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 1 JULY 2023
Details of the remuneration of the Non-Executive Directors of the Company are set out in Table 22.
Table 22: Non-Executive Directors Remuneration calculated in accordance with Australian accounting standards
Year
Short-term benefits
Post-
employment
benefits
Total
Cash salary and
fees
$
Cash
bonus
$
Non- monetary
benefits
$
Superannuation
$
Total
$
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
360,000
360,000
144,796
145,455
185,520
186,364
185,520
186,364
35,596
-
144,796
96,970
99,510
131,818
-
72,727
1,155,738
1,179,698
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15,204
14,545
19,480
18,636
19,480
18,636
3,738
-
15,204
9,697
10,449
13,182
-
360,000
360,000
160,000
160,000
205,000
205,000
205,000
205,000
39,334
-
160,000
106,667
109,959
145,000
-
7,273
80,000
83,555
1,239,293
81,969
1,261,667
Name
Sally Pitkin AO
Annabelle Chaplain
Peter Everingham(1)
Howard Mowlem
Mark O’Hare(2)
Judith Swales(3)
Former Non-Executive Directors
Reg Rowe(4)
Gary Dunne(5)
Total
Total
(1) Mr Everingham commenced as Chair of the HRRC from 28 October 2020.
(2) Mr O’Hare commenced as KMP on 4 April 2023 and remuneration disclosed in the table for FY23 is from this date.
(3) Ms Swales commenced as KMP on 1 November 2021 and remuneration disclosed in the table for FY22 is from this date.
(4) Mr Rowe ceased to be a KMP on 4 April 2023 and remuneration disclosed in the table for FY23 is until this date.
(5) Mr Dunne ceased to be a KMP on 31 December 2021 and remuneration disclosed in the table for FY22 is until this date.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
8989
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
REMUNERATION REPORT
(AUDITED)
REPORTING PERIOD
ENDED 1 JULY 2023
SHAREHOLDINGS OF NON-EXECUTIVE DIRECTORS AND THEIR RELATED PARTIES
Table 23 sets out details of ordinary shares in the Company held during the financial year by Non-Executive Directors and their
related parties.
Table 23: Shareholdings of Non-Executive Directors and their related parties(1)
Held at
3 July 2022(2)
Shares acquired
under DRP
Shares purchased/
(disposed)
Sally Pitkin AO
Annabelle Chaplain AM
Peter Everingham
Howard Mowlem
Mark O’Hare
Judith Swales
Former Director
Reg Rowe
68,405
11,865
40,000
34,286
65,999,133
5,925
-
1,006
-
-
3,021
-
68,529,190(5)
10,774(6)
-
5,000
20,000
-
-
-
-
Held at
1 July 2023(3)
68,405
17,871
60,000
34,286
66,002,154(4)
5,925
68,539,964
(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. Mr O’Hare was appointed as a Non-Executive Director on 4 April 2023.
(3) Or date of ceasing to be a KMP if earlier. Mr Rowe ceased to be a Director on 4 April 2023.
(4) Includes 65,918,556 shares held under powers of attorney noted in Mr O’Hare’s Appendix 3Y dated 15 June 2023.
(5) Includes 2,612,549 shares held by close family members of Mr Rowe, in which Mr Rowe has no relevant interest or voting power.
(6) Includes 9,619 shares held by a close family member of Mr Rowe, in which Mr Rowe has no relevant interest or voting power.
MINIMUM SECURITIES HOLDING POLICY
Under the Company's Minimum Securities Holding Policy, Non-Executive Directors are required to acquire ordinary shares in the Company
equivalent in value to 100 per cent of their annual base fee (before tax and superannuation and excluding Committee fees). The minimum
shareholding target must be met by Non-Executive Directors within three years of the later of the date the Policy commenced and their
appointment.
As at the date of this report, Dr Pitkin, Ms Chaplain, Mr Everingham, Mr Mowlem and Mr O’Hare have met the minimum shareholding
requirement based on the Company’s closing share price on 30 June 2023 (being the last ASX trading day for FY23).
The Minimum Securities Holding Policy is available in the Corporate Governance section of the Company's website.
NO PERFORMANCE BASED FEES
To ensure the independence of our Non-Executive Directors, they 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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
90
90
REMUNERATION REPORT
(AUDITED)
SECTION 8
Transactions with KMP
REPORTING PERIOD
ENDED 1 JULY 2023
This section applies to Non-Executive Directors 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
During FY23, the Group paid rental fees to various entities ultimately owned and controlled by former Non-Executive Director, Mr Rowe
under store lease agreements. These agreements are on normal commercial terms and rent on the relevant properties is negotiated on an
arm’s length basis.
The aggregate rental fees payable by the Group under these lease agreements during FY23 amounted to $9,357,875 (FY22:
$10,477,402). The current reporting period represents 52 weeks, whereas the comparative period represented 53 weeks.
There were no other transactions during the reporting period between the Group and members of KMP or their close family members or
controlled entities than those disclosed in this report.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
9191
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
REMUNERATION REPORT
(AUDITED)
SECTION 9
Remuneration Governance
REPORTING PERIOD
ENDED 1 JULY 2023
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 54. 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 and Compliance Management Framework and remuneration outcomes.
The following diagram outlines the Company's remuneration governance framework.
Table 24: 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, there is consultation 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 FY23, 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 and Compliance
Management Framework.
External remuneration consultants
Where appropriate, HRRC seeks information and advice
regarding remuneration directly from external
remuneration consultants
During FY23, the HRRC engaged EY as an independent
remuneration adviser to provide remuneration
benchmarking information and market data. No
remuneration recommendations, as defined in the
Corporations Act, were provided by remuneration
consultants during FY23.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
91
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
92
REMUNERATION REPORT
(AUDITED)
SECTION 9
Remuneration Governance
REPORTING PERIOD
ENDED 1 JULY 2023
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 54. 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 and Compliance Management Framework and remuneration outcomes.
The following diagram outlines the Company's remuneration governance framework.
Table 24: 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, there is consultation 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 FY23, 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 and Compliance
Management Framework.
External remuneration consultants
Where appropriate, HRRC seeks information and advice
regarding remuneration directly from external
remuneration consultants
During FY23, the HRRC engaged EY as an independent
remuneration adviser to provide remuneration
benchmarking information and market data. No
remuneration recommendations, as defined in the
Corporations Act, were provided by remuneration
consultants during FY23.
Financial
State m ents
For the financial
year ended
1 July 2023
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY232023
93
93
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the period ended 1 July 2023
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
2023
$m
3,802.6
4.4
3,807.0
2022
$m
3,550.9
0.1
3,551.0
(2,044.9)
(1,890.3)
(480.0)
(103.9)
(236.1)
(515.3)
(47.4)
-
(459.3)
(98.8)
(238.1)
(471.4)
(47.0)
(0.4)
(3,427.6)
(3,205.3)
379.4
(116.4)
263.0
345.7
(104.5)
241.2
263.0
241.2
1.8
(8.3)
1.0
(5.5)
8.3
(2.5)
(1.7)
4.1
257.5
245.3
116.5
115.4
106.8
105.8
6
6
15
20
20
20
18
18
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
CONSOLIDATED BALANCE SHEET
As at 1 July 2023
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
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
Other equity
Reserves
Retained earnings
TOTAL EQUITY
94
94
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
740.7
-
24.1
524.2
1,289.0
Notes
2023
$m
7
8
9
17
10
11
12
15
13
12
15
16
14
12
15
16
19
19
20
20
192.3
58.1
788.6
2.7
1,041.7
270.4
846.4
944.4
-
2,061.2
3,102.9
490.1
175.8
30.3
106.3
802.5
-
859.2
32.9
40.7
932.8
1,735.3
1,367.6
740.7
(3.8)
17.4
613.3
1,367.6
The above consolidated balance sheet should be read in conjunction with the accompanying notes.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
95
95
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 1 July 2023
Contributed
Equity
Other Equity
Reserves
Notes
$m
$m
$m
Retained
Earnings
$m
Total
Equity
$m
Balance at 26 June 2021
740.7
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 share schemes
Balance at 2 July 2022
Profit for the period
Other comprehensive loss for the period
Total comprehensive income for the period
Transactions with owners in
their capacity as owners
Dividends paid
Acquisition of treasury shares
Employee share schemes
23
20
23
19
20
-
-
-
-
-
-
740.7
-
-
-
-
-
-
-
Balance at 1 July 2023
740.7
-
-
-
-
-
-
-
-
-
-
-
-
(3.8)
-
(3.8)
(3.8)
17.6
468.2
1,226.5
-
4.1
4.1
-
2.4
2.4
24.1
-
(5.5)
(5.5)
-
-
(1.2)
(1.2)
17.4
241.2
-
241.2
241.2
4.1
245.3
(185.2)
-
(185.2)
524.2
263.0
-
263.0
(173.9)
-
-
(173.9)
613.3
(185.2)
2.4
(182.8)
1,289.0
263.0
(5.5)
257.5
(173.9)
(3.8)
(1.2)
(178.9)
1,367.6
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended 1 July 2023
Cash flows from operating activities
Receipts from customers (inclusive of goods and services tax)
Payments to suppliers and employees (inclusive of goods and services tax)
Rental payments
Income taxes paid
Net cash inflow from operating activities
Cash flows from investing activities
Payments for property, plant and equipment and computer software
Proceeds from sale of property, plant and equipment
Payments for businesses acquired
Proceeds from sale of investment in associate
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
Interest received
Dividends paid to Company’s shareholders
Net cash (outflow) from financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of the period
Notes
21
25(c)
25(b)
22(d)
22(d)
23
7
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
96
96
2022
$m
3,914.5
(3,372.3)
(44.8)
(157.0)
340.4
2023
$m
4,222.4
(3,397.8)
(43.8)
(64.4)
716.4
(109.6)
(125.0)
0.1
(0.8)
1.8
0.3
-
-
(108.5)
(124.7)
122.0
(122.0)
(210.7)
(2.2)
(45.9)
3.6
(173.9)
(429.1)
178.8
13.4
0.1
192.3
483.0
(483.0)
(216.0)
-
(43.6)
-
(185.2)
(444.8)
(229.1)
242.3
0.2
13.4
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
97
97
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the period ended 1 July 2023
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
98
98
101
102
105
105
107
107
108
108
110
113
115
115
116
120
122
125
126
127
128
129
135
137
137
138
140
141
142
142
144
145
145
145
145
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
98
98
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
1.
Reporting entity
Super Retail Group Limited (the Company or parent entity) is a for-profit company incorporated and 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 1 July 2023 comprises the Company and its
subsidiaries (together referred to as the Group, and individually as Group entities).
The Group 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 1 July
2023 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.
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.
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
99
99
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
2.
(b)
Summary of significant accounting policies (continued)
Principles of consolidation (continued)
Business combinations (continued)
(iii)
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.
Transactions and balances
(ii)
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of
monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss, except when deferred in equity as qualifying
cash flow hedges and qualifying net investment hedges.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
100
100
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
2.
(c)
Summary of significant accounting policies (continued)
Foreign currency translation (continued)
Transactions and balances (continued)
(ii)
Translation differences on non-monetary items such as equities held at fair value through profit or loss, are reported as part of the fair value
gain or loss. Translation differences on non-monetary items, such as equities classified as fair value through other comprehensive income,
are included in the fair value reserve in other comprehensive income.
Group companies
(iii)
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a
functional currency different from the presentation currency are translated into the presentation currency as follows:
assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of
financial position;
income and expenses for each income statement are translated at average exchange rates (unless this is not a reasonable approximation
of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates
of the transactions); and
all resulting exchange differences are recognised as a separate component in other comprehensive income.
(d)
Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax, except where the amount of goods and services
tax incurred is not recoverable. In these circumstances the goods and services tax is recognised as part of the cost of acquisition of the asset
or as part of the item of expense. Receivables and payables in the consolidated statement of financial position are shown inclusive of goods
and services tax.
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 1 July 2023, the Group is reporting on the 52 week period that began 3 July 2022 and ended 1 July
2023. 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.
(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 2020-3 Amendments to Australian Accounting Standards – Annual Improvements 2018–2020 and Other Amendments [AASB 1, AASB 3,
AASB 9, AASB 116, AASB 137 & AASB 141].
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.
(h)
Impact of standards issued but not yet applied by the Group
Certain new accounting standards and interpretations have been published that are not mandatory for the 1 July 2023 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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
101
101
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
102
102
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
4.
(a)
Segment information
Description of segments
Management have determined the operating segments based on the reports reviewed by the Group Managing Director and Chief Executive
Officer (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:
Supercheap Auto (SCA): retailing of auto parts and accessories, tools and equipment;
rebel: retailing of sporting equipment and apparel;
BCF: retailing of boating, camping, outdoor equipment, fishing equipment and apparel; and
Macpac: retailing of apparel, camping and outdoor equipment.
(b)
Segment information provided to the Group MD and CEO
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, other items not in the ordinary course of business, and items that are unusual due to their
size and nature. These are determined by management.
For the period ended 1 July 2023
SCA
$m
rebel
$m
BCF
$m
Macpac
$m
Total
continuing
operations
$m
Inter-segment
eliminations/
unallocated
$m
Consolidated
$m
Segment Revenue and Other Income
External segment revenue
Inter-segment sales
Other income
Total segment revenue and other income
Segment EBITDA(1)
Segment depreciation and amortisation
Segment EBIT result
Net finance costs*
Total segment PBT
Segment income tax expense(2)
Normalised NPAT
Other items not included in the total segment NPAT(3)
Profit for the period
1,447.9
-
0.3
1,448.2
334.3
(114.9)
219.4
(15.4)
204.0
1,309.1
-
0.2
1,309.3
282.8
(121.0)
161.8
(15.8)
146.0
839.9
-
-
839.9
128.5
(67.5)
61.0
(10.0)
51.0
205.7
10.7
0.2
216.6
50.7
(20.3)
30.4
(1.7)
28.7
3,802.6
10.7
0.7
3,814.0
796.3
(323.7)
472.6
(42.9)
429.7
-
(10.7)
3.7
(7.0)
(28.7)
(5.9)
(34.6)
(4.5)
(39.1)
Segment Net Inventory
Inventory
Trade payables
Net inventory
* Net finance costs for the business segments represents interest component of lease payments.
285.3
(160.4)
124.9
219.0
(42.2)
176.8
225.2
(69.5)
155.7
61.1
(7.6)
53.5
790.6
(279.7)
510.9
(2.0)
(77.5)
(79.5)
Other items not included in total segment NPAT
Execution costs for team member wage remediation
FWO proceedings
(1) Segment EBITDA
adjusted for
$m
(2) Segment income
tax adjusted for
$m
2.4
8.8
11.2
0.7
-
0.7
(3) Other items not
included in total
segment NPAT
$m
1.7
8.8
10.5
3,802.6
-
4.4
3,807.0
767.6
(329.6)
438.0
(47.4)
390.6
(117.1)
273.5
(10.5)
263.0
788.6
(357.2)
431.4
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
103
103
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
4.
(b)
Segment information (continued)
Segment information provided to the Group MD and CEO (continued)
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
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 PBT
Segment income tax expense(2)
Normalised NPAT
Other items not included in the total segment NPAT(3)
Profit for the period
1,339.8
-
-
1,339.8
301.5
(110.9)
190.6
(14.5)
176.1
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)
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
799.6
(324.1)
475.5
Other items not included in total segment NPAT
Execution costs for team member 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
Unallocated costs are Group costs comprising $22.0 million of corporate costs (2022: $25.6 million) and $18.1 million of costs relating to
digital investment (2022: $7.2). The result also includes $3.7 million of interest revenue earned on cash at bank balances during the period
as well as a gain of $1.8 million related to the sale of all of the Group’s shares in Autoguru Australia Pty Ltd. The prior comparative period
includes a loss of $5.7 million related to the write down of the Group’s investment in Autoguru Australia Pty Ltd.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
104
104
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
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
2023
$m
3,546.9
260.1
3,807.0
1,862.5
198.7
2,061.2
2022
$m
3,316.7
234.3
3,551.0
1,841.0
199.8
2,040.8
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).
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
105
105
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
5.
Revenue and other income from continuing operations
Revenue from the sale of goods
Other income
Interest earned on cash at bank
Sundry
Total revenues and other income
Significant Accounting Policies
2023
$m
3,802.6
4.2
0.2
2022
$m
3,550.9
-
0.1
3,807.0
3,551.0
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
(Gain) / 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
2023
$m
(0.5)
-
(1.8)
214.6
52.0
22.4
289.0
40.4
0.2
40.6
4.2
43.2
47.4
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
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
106
106
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
6.
Expenses from continuing operations (continued)
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)
2023
$m
56.6
690.0
746.6
-
-
38.4
4.3
42.7
2022
$m
50.3
656.3
706.6
1.2
1.2
39.3
3.7
43.0
(3) The impact of applying AASB 16 Leases was a decrease of $250.9 million in rental expense to 1 July 2023 (2022: $237.4 million).
Foreign exchange gains and losses
Net foreign exchange (gain) / loss
Significant Accounting Policies
Depreciation, amortisation and impairment
Refer to Notes 10, 11 and 12 for details on depreciation, amortisation and impairment.
(7.9)
3.4
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; and
interest on bank overdrafts and short-term and long-term borrowings;
finance lease charges.
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
107
107
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
7.
Cash and cash equivalents
Cash at bank and on hand
Bank overdraft
Total cash and cash equivalents
Significant Accounting Policies
2023
$m
192.3
-
192.3
2022
$m
32.7
(19.3)
13.4
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
2032
$m
19.0
(0.6)
18.4
16.7
23.0
58.1
2022
$m
19.1
(1.0)
18.1
19.2
16.3
53.6
As at 1 July 2023 current trade receivables of the Group with a nominal value of $0.6 million (2022: $1.0 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 1 July 2023, trade receivables of $11.9 million (2022: $10.7 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
2023
$m
9.3
1.2
1.4
11.9
2022
$m
6.4
2.2
2.1
10.7
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
108
108
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
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
2023
$m
788.6
2022
$m
799.6
Inventories recognised as expense during the period ended 1 July 2023 amounted to $1,945.8 million (2022: $1,797.5 million).
Write-downs of inventories to net realisable value recognised as an expense during the period ended 1 July 2023 amounted to $0.6 million
(2022: $4.4 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
2023
$m
546.0
(318.6)
227.4
113.8
(70.8)
43.0
270.4
2022
$m
482.3
(284.1)
198.2
98.4
(60.9)
37.5
235.7
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
109
109
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
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:
2023
Carrying amounts at 2 July 2022
Additions
Depreciation
Disposals
Foreign currency exchange differences
Carrying amounts at 1 July 2023
2022
Carrying amounts at 26 June 2021
Additions
Depreciation
Disposals
Foreign currency exchange differences
Carrying amounts at 2 July 2022
Significant Accounting Policies
Plant and
equipment
$m
Computer
equipment
$m
198.2
81.0
(52.0)
-
0.2
227.4
187.4
59.8
(48.7)
-
(0.3)
198.2
37.5
28.0
(22.4)
(0.1)
-
43.0
32.5
22.2
(17.0)
(0.2)
-
37.5
Total
$m
235.7
109.0
(74.4)
(0.1)
0.2
270.4
219.9
82.0
(65.7)
(0.2)
(0.3)
235.7
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 where applicable.
Depreciation and amortisation allocates the cost of an item of property, plant and equipment net of residual values over the expected useful
life of each asset to the Group. Estimates of remaining useful lives and residual values are reviewed and adjusted, if appropriate, at each
statement of financial position date.
The depreciation rates used for each class of assets are:
Plant and equipment
Computer equipment
6.7% – 25%
20% – 33.3%
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated
recoverable amount.
Gains and losses
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss. When
revalued assets are sold, it is Group policy to transfer the amounts included in other reserves in respect of those assets to retained earnings.
Critical accounting estimates and assumptions
Impairment
Assets that are subject to depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its
recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value-in-use. For the purposes of
assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
110
110
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
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:
2023
Carrying amounts at 2 July 2022
Additions
Amortisation charge
Carrying amounts at 1 July 2023
2022
Carrying amounts at 26 June 2021
Additions
Disposals
Amortisation charge
Carrying amounts at 2 July 2022
(b)
Impairment tests for goodwill
Goodwill
$m
Computer
Software
$m
526.6
0.8
-
527.4
526.6
-
-
-
526.6
86.1
20.0
(40.4)
65.7
87.0
31.3
(0.2)
(32.0)
86.1
2023
$m
529.5
(2.1)
527.4
253.3
(187.6)
65.7
311.8
(58.5)
253.3
846.4
Brand
Name
$m
253.3
-
-
253.3
253.3
-
-
-
253.3
2022
$m
528.7
(2.1)
526.6
240.6
(154.5)
86.1
311.8
(58.5)
253.3
866.0
Total
$m
866.0
20.8
(40.4)
846.4
866.9
31.3
(0.2)
(32.0)
866.0
Goodwill is allocated to the Group’s cash-generating units (CGUs) identified according to the group of assets at the time of acquisition. A
CGU level summary of the goodwill allocation is presented below:
CGU
Supercheap Auto
rebel
BCF
Macpac
Total
2023
$m
45.3
376.6
25.9
79.6
527.4
2022
$m
45.3
376.6
25.1
79.6
526.6
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
111
111
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
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 industry 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 13.4 per cent (2022: 11.7 per cent) and terminal growth rate of 2.5 per cent (2022: 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 amounts of each CGU are estimated to exceed their carrying amounts as at 1 July 2023. 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
2023
$m
209.0
44.3
253.3
2022
$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 13.4 per cent (2022: 11.7 per cent) and terminal growth rate of 2.5 per cent (2022: 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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
112
112
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
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 program and mutli-channel
supply chain and inventory program. 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 FY23
113
113
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
12.
Leases
(a)
Right-of-use assets
Properties
Computer equipment
Total right-of-use assets
2023
$m
944.4
-
944.4
Reconciliations of the carrying amounts for each class of right-of-use assets are set out below:
Properties
$m
Computer
equipment
$m
2022
$m
923.4
0.3
923.7
Total
$m
923.7
287.4
(51.9)
(214.6)
(0.2)
(0.6)
944.4
894.3
257.3
(17.4)
(207.5)
(2.0)
(1.0)
923.7
2022
$m
193.4
817.3
923.4
287.9
(51.8)
(214.3)
(0.2)
(0.6)
944.4
893.8
257.3
(17.4)
(207.3)
(2.0)
(1.0)
923.4
0.3
-
-
(0.3)
-
-
-
0.5
-
-
(0.2)
-
-
0.3
2023
$m
175.8
859.2
1,035.0
1,010.7
1,010.7
286.6
(52.2)
(252.5)
42.0
0.4
1,035.0
989.6
255.9
(17.5)
(254.9)
38.9
(1.3)
1,010.7
2023
Carrying amounts at 2 July 2022
Additions
Disposals
Depreciation
Impairment
Foreign currency exchange differences
Carrying amounts at 1 July 2023
2022
Carrying amounts at 26 June 2021
Additions
Disposals
Depreciation
Impairment
Foreign currency exchange differences
Carrying amounts at 2 July 2022
(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
At 1 July 2023, 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 $238.5 million (2022: $150.7 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)
2023
$m
4.2
4.3
34.8
2022
$m
8.7
3.7
31.4
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
114
114
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
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 on the same
basis as the associated lease liability.
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 80 (2022: 78) leases during the
period. This had the impact of increasing lease liabilities and the corresponding right-of-use assets by $52.3 million (2022: $52.9 million).
Of the Group’s lease portfolio 55% (2022: 63%) of leases contain option renewals. The lease liability currently includes extension options
in the calculation of lease term for 26% (2022: 23%) 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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
115
115
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
13.
Trade and other payables
Current
Trade payables
Gift card deferred revenue
Other payables
Total current trade and other payables
Significant Accounting Policies
2023
$m
357.2
60.8
72.1
490.1
2022
$m
324.1
53.7
73.6
451.4
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 program 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
2023
$m
-
-
2022
$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)
2 July 2022
$m
-
-
Cash flows
$m
-
(2.2)
Non-cash
Amortisation
$m
-
Reclassed to
Trade and Other
Receivables
$m
-
0.4
1.8
Total
(2) Net borrowing costs capitalised of $1.8 million at 1 July 2023 are presented in Trade and other receivables as a prepayment (refer note 8).
(2.2)
0.4
1.8
-
26 June 2021
$m
-
-
-
Cash flows
$m
-
-
-
Non-cash
Amortisation
$m
-
-
-
Reclassed to
Trade and Other
Receivables
$m
-
-
-
Bank debt funding facility
Capitalised borrowing costs
Total
Significant Accounting Policies
1 July 2023
$m
-
-
-
2 July 2022
$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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
116
116
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
15.
Income taxes
Income tax expense
(a)
Current tax expense
Deferred tax expense / (benefit)
Adjustments to tax expense of prior periods
Deferred income tax expense / (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% (2022: 30%)
Tax effect of amounts not deductible / (taxable) in calculating taxable income:
Sundry items
Difference in overseas tax rates
Previously unrecognised tax losses and deferred tax assets
Adjustments to tax expense of prior periods
Income tax expense
Effective tax rate:
Australia
Consolidated group
2023
$m
76.1
41.0
(0.7)
116.4
(26.4)
67.4
41.0
379.4
113.8
4.0
117.8
(0.6)
(0.1)
(0.7)
116.4
30.8%
30.7%
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%
Reconciliation of income tax expense to income tax payable
(c)
Income tax (expense)
(116.4)
(104.5)
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
36.4
(0.9)
3.6
6.3
(7.4)
(0.4)
3.7
(75.1)
44.8
(30.3)
(2.8)
(2.8)
(2.8)
(2.8)
(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
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
117
117
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
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
2023
$m
34.9
10.0
37.5
309.5
0.4
5.1
397.4
(397.4)
-
75.3
66.7
280.7
6.8
429.5
0.8
430.3
(397.4)
32.9
371.0
26.4
-
397.4
309.2
88.2
397.4
365.7
67.4
(2.8)
430.3
430.3
-
430.3
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
(f)
Tax losses
Unrecognised deferred tax assets
7.3
7.5
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 FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
118
118
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
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 2023 and 2022 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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
119
119
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
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 FY23, 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 $64.4 million in FY23 and $151.5 million in FY22.
Significant Accounting Policies
Current and deferred tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the national income
tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax
bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered
or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The relevant tax rates are
applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability.
An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or
liability is recognised in relation to these temporary differences if they arise in a transaction, other than a business combination, that at the
time of the transaction did not affect either accounting profit or taxable profit or loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable
amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments
in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that
the differences will not reverse in the foreseeable future.
Current and deferred tax balances attributable to amounts recognised directly in equity are recognised directly in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the
deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally
enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
A deferred tax liability is recognised in relation to some of the Group’s indefinite life intangibles. The tax base assumed in determining the
amount of the deferred tax liability is the capital cost base of the assets.
Tax consolidation
Super Retail Group Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation as of 1
July 2003 and account for current and deferred tax amounts under the “separate taxpayer within group” approach in accordance with AASB
Interpretation 1052, Tax Consolidation Accounting.
On adoption of the tax consolidation legislation, the entities in the tax consolidated group entered into a tax sharing agreement which, in the
opinion of the Directors, limits the joint and several liability of the wholly-owned entities in the case of a default by the head entity, Super
Retail Group Limited.
The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate Super Retail Group
Limited for any current tax payable assumed and are compensated by Super Retail Group Limited for any current tax receivable and deferred
tax assets relating to unused tax losses or unused tax credits that are transferred to Super Retail Group Limited under the tax consolidation
legislation. The funding amounts are determined by reference to the amounts recognised in the wholly-owned entities’ financial statements.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head entity, which is
issued as soon as practicable after the end of each financial year. The head entity may also require payment of interim funding amounts to
assist with its obligations to pay tax instalments.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
120
120
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
16.
Provisions
Current
Employee benefits(a)
Make-good provision(b)
Other provisions(c)
Total current provisions
Non-current
Employee benefits(a)
Make-good provision(b)
Total non-current provisions
(a)
Employee benefits
2023
$m
98.2
5.3
2.8
106.3
9.9
30.8
40.7
2022
$m
90.8
3.9
3.2
97.9
9.6
30.8
40.4
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 year, is now substantially
complete, with the Group having paid back $52.7 million in entitlements and interest to certain of its award-covered set-up and retail
management team members, and its enterprise agreement-covered team members.
On 19 January 2023, the Fair Work Ombudsman (FWO) filed proceedings in the Federal Court of Australia (as amended) against the Company
and certain of its subsidiaries, seeking orders in relation to alleged contraventions of the Fair Work Act 2009 (Cth) (Fair Work Act) and
payments of $1.2 million for 146 team members (less remediation amounts already paid to those team members).
The FWO has also sought orders for civil penalties against the Company and the named subsidiaries under the Fair Work Act. While the Group
has been assisted by expert external advisers, these proceedings are at an early stage and the outcome and total costs associated with the
proceedings are uncertain. The Group has increased the provision to recognise amounts potentially payable as a consequence of the FWO
proceedings by $8.8 million. The total provision as at 1 July 2023 is $14.3 million (2 July 2022: $5.8 million).
(b)
Make-good provision
Provision is made for costs arising from contractual obligations in lease agreements at the inception of the agreement. A provision has been
recognised for the present value of the estimated expenditure required to remove any leasehold improvements. These costs have been
capitalised as part of the cost of the right-of-use assets and are amortised over the shorter of the term of the lease or the useful life of the
assets.
(c)
Other provisions
The current provision for other items includes the provision for store refunds.
(d)
Movement in provisions
Movements in each class of provision during the period, except for Other, are set out below:
2022
Opening balance as at 2 July 2022
Additional provisions recognised
Unwind of discount
Provisions used
Closing balance as at 1 July 2023
Employee benefits
$m
100.4
88.3
-
(80.6)
108.1
Make-good
$m
34.7
1.2
1.3
(1.1)
36.1
Total
$m
135.1
89.5
1.3
(81.7)
144.2
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
121
121
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
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.
Employee benefits
Judgements have been made in the calculations as to the number of overtime hours and allowance payments based on assumed work
patterns.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
122
122
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
17.
(a)
Financial assets and financial liabilities
Financial instruments
The Group holds the following financial instruments:
2023
Financial assets
Cash and cash equivalents
Trade and other receivables
Derivative financial instruments
Total
Financial liabilities
Trade and other payables
Borrowings
Lease liabilities
Total
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
Notes
7
8
22
13
14
12
Notes
7
8
22
13
14
12
Derivatives used
for hedging
$m
-
-
2.7
2.7
-
-
-
-
Derivatives used
for hedging
$m
-
-
11.9
11.9
-
-
-
-
Financial assets and
liabilities at
amortised cost
$m
192.3
58.1
-
250.4
490.1
-
1,035.0
1,525.1
Financial assets and
liabilities at
amortised cost
$m
13.4
53.6
-
67.0
451.4
-
1,010.7
1,462.1
Total
$m
192.3
58.1
2.7
253.1
490.1
-
1,035.0
1,525.1
Total
$m
13.4
53.6
11.9
78.9
451.4
-
1,010.7
1,462.1
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
123
123
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
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.
2023
Financial assets
Derivatives used for hedging – forward foreign
exchange contracts
Total
Financial liabilities
Derivatives used for hedging
Total
2022
Financial assets
Derivatives used for hedging – forward foreign
exchange contracts
Total
Financial liabilities
Derivatives used for hedging
Total
Level 1
$m
Level 2
$m
Level 3
$m
-
-
-
-
2.7
2.7
-
-
-
-
-
-
Level 1
$m
Level 2
$m
Level 3
$m
-
-
-
-
11.9
11.9
-
-
-
-
-
-
Total
$m
2.7
2.7
-
-
Total
$m
11.9
11.9
-
-
There were no transfers between any levels for recurring fair value measurements during the year. The Group’s policy is to recognise
transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.
Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and available-for-
sale securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held
by the Group is the current bid price. These instruments are included in level 1.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is
determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific
estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the
case for unlisted equity securities.
Valuation techniques used to determine fair value
(ii)
Specific valuation techniques used to value financial instruments include:
the use of quoted market prices or dealer quotes for similar instruments;
the fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield
curves;
the fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date;
the fair value of the remaining financial instruments is determined using discounted cash flow analysis.
All of the resulting fair value estimates are included in level 2, where the fair values have been determined based on present values and
the discount rates used were adjusted for counterparty or own credit risk.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
124
124
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
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 FY23
125
125
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
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 $273.5 million (2022: $244.1 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
2023
Cents
116.5
2022
Cents
106.8
115.4
105.8
121.1
108.1
2023
Number
2022
Number
225,826,500
2,027,140
225,826,500
2,058,479
227,853,640
227,884,979
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
126
126
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
18.
Earnings per share (continued)
2023
2022
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)
Performance Rights
Performance rights granted are considered to be potential ordinary shares and have been included in the determination of diluted earnings
per share to the extent to which they are dilutive.
Information concerning the classification of securities
263.0
241.2
$m
$m
Significant Accounting Policies
Basic earnings per share
Basic earnings per share is calculated by dividing:
by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary
the profit attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares;
shares issued during the year and excluding treasury shares.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income
tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of
shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
19.
Contributed equity
(a)
Share capital
Ordinary shares fully paid (225,826,500 ordinary shares as at 1 July 2023)
Movement in ordinary share capital
(i)
Balance 26 June 2021
Movement in the period
Balance 2 July 2022
Movement in the period
Balance 1 July 2023
2023
$m
740.7
Number of shares
Issue price
225,826,500
-
225,826,500
-
225,826,500
-
-
2022
$m
740.7
$m
740.7
-
740.7
-
740.7
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.
Performance rights over 790,611 (2022: 185,997) ordinary shares were issued during the period with 763,059 (2022: 293,907) performance
rights vesting during the period. Vesting of performance rights was fulfilled through on-market share purchases. Information relating to
performance rights outstanding at the end of the financial year are set out in Note 30 – Share-based payments.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
127
127
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
19.
Contributed equity (continued)
(b)
Other equity
Treasury shares
Movement in treasury shares
(i)
Balance 26 June 2021
Movement in the period
Balance 2 July 2022
Acquisition of shares by the Trust
Balance 1 July 2023
2023
$m
(3.8)
Number of shares
Average price per
share
-
-
-
(300,000)
(300,000)
-
12.76
2022
$m
-
$m
-
-
-
(3.8)
(3.8)
Treasury shares are ordinary shares in Super Retail Group Limited that are held by the trust established to hold shares for the purposes of the
Super Retail Group Employee Equity Incentive Plan (the EIP) (refer to Note 30 – Share-based payments for further details). Shares issued or
allocated to employees will be on a first-in-first-out basis.
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
2023
$m
2.7
20.8
1.9
(8.0)
17.4
1.7
1.0
2.7
22.1
(8.9)
7.6
20.8
8.3
(9.2)
2.8
1.9
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
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
128
128
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
20.
Reserves and retained earnings (continued)
(a)
(i)
Reserves (continued)
Movements (continued)
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
2023
$m
(8.0)
-
(8.0)
2022
$m
(8.0)
-
(8.0)
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
2023
$m
524.2
263.0
(173.9)
613.3
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
(Gain) / loss on write down in investment in associate
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
- increase / (decrease) in net current tax liability
- decrease / (increase) in inventories
- increase / (decrease) in payables
- increase in provisions
- decrease / (increase) in deferred taxes
Net cash inflow from operating activities
2023
$m
263.0
329.4
0.2
(1.8)
(0.5)
7.6
-
43.2
(2.1)
10.5
11.0
7.9
7.0
41.0
716.4
2022
$m
468.2
241.2
(185.2)
524.2
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
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
129
129
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
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
2023
$m
2.7
2.7
-
-
2022
$m
11.9
11.9
-
-
Classification of derivatives
(i)
Derivatives are classified as held for trading and accounted for at fair value through profit or loss unless they are designated as hedges. They
are presented as current assets or liabilities if they are expected to be settled within 12 months after the end of the reporting period.
The Group’s accounting policy for cash flow hedges is set out in Note 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
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
130
130
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
22.
Financial risk management (continued)
(b) Market risk (continued)
(i) Foreign exchange risk (continued)
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 1 July 2023 is 0.6770 (2022: 0.7411)
Trade receivables
Trade payables
2023
USD
$m
2.2
21.4
53.5
18.0
71.5
2023
CNY
m
1.9
38.7
2022
USD
$m
2.3
26.0
68.9
44.4
113.3
2022
CNY
m
1.6
29.0
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 1 July 2023, no hedges were designated as ineffective (2022: nil).
Gains and losses arising from hedging contracts terminated prior to maturity are also carried forward until the designated hedged transaction
occurs.
The following gains, losses and costs have been deferred as at the balance date:
- unrealised gains on USD foreign exchange contracts
Total unrealised gains
2023
$m
2.7
2.7
2022
$m
11.9
11.9
Group sensitivity
Based on the financial instruments held at 1 July 2023, 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 $7.5 million lower/$14.2 million higher (2022: $9.7 million lower/$11.9 million higher) had the Australian dollar
weakened/strengthened by 10 per cent against other currencies, arising mainly from forward foreign exchange contracts designated as cash
flow hedges. The impact on other Group assets and liabilities as a result of movements in exchange rates is not material.
A sensitivity of 10 per cent was selected following review of historic trends.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
131
131
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
22.
Financial risk management (continued)
(b) Market risk (continued)
(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
Non-
interest
bearing
$m
2023
Financial assets
Cash and cash equivalents
Trade and other receivables
Total financial assets
Weighted average rate of interest
Financial liabilities
Lease liabilities
Trade and other payables
Borrowings
Provisions (employee benefits)
Total financial liabilities
Weighted average rate of interest
Net financial (liabilities) / assets
7
8
12
13
14
16
190.4
-
190.4
4.0%
-
-
-
-
-
n/a
-
-
-
-
-
-
-
-
-
1.9
58.1
60.0
175.8
610.9
248.3
-
1,035.0
-
-
-
-
-
-
-
-
-
175.8
610.9
248.3
490.1
-
108.1
598.2
490.1
-
108.1
1,633.2
190.4
(175.8)
(610.9)
(248.3)
(538.2)
(1,382.8)
Total
$m
192.3
58.1
250.4
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
Total financial assets
Weighted average rate of interest
Financial liabilities
Lease liabilities
Trade and other payables
Borrowings
Provisions (employee benefits)
Total financial liabilities
Weighted average rate of interest
Net financial (liabilities) / assets
7
8
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)
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
132
132
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
22.
Financial risk management (continued)
(b) Market risk (continued)
(ii)
Cashflow and fair value interest rate risk (continued)
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 2023 and 2022 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.
2023
$m
-
2022
$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 1 July 2023, if interest rates had changed by +/- 100 basis points from the year-end rates with all other variables held constant, post-tax
profit and equity for the year would have been unchanged (2022: $0.2 million lower/higher), mainly as a result of having low levels of debt
drawn during the reporting period.
(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.
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
133
133
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
22.
Financial risk management (continued)
(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
2023
$m
500.0
35.0
15.0
550.0
-
-
5.5
5.5
500.0
35.0
9.5
544.5
2022
$m
600.0
35.0
16.0
651.0
-
19.3
5.3
24.6
600.0
15.7
10.7
626.4
(1) As at 1 July 2023 the bank overdraft facility was undrawn (2022: $19.3 million utilised). 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).
During the reporting period, the Group re-financed its bank debt funding facility, extending tenor and reducing the value of the overall facility.
Bank debt funding is split as $160 million expiring December 2025 (2022: $200 million expiring December 2022), $180 million expiring
December 2026 (2022 $200 million expiring December 2023 ) and $160 million expiring December 2027 ($200 million expiring December
2024). Bank debt and multi-option funding facilities totalling $50 million are reviewed and renewed annually. 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 5.65% - 5.85% (2022: 2.93% - 3.33%).
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
134
134
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
22.
Financial risk management (continued)
(d) Liquidity risk (continued)
Maturities of financial liabilities
(ii)
The following tables present the Group’s financial liabilities into relevant maturity groupings based on their contractual maturities for:
-
- net and gross settled derivative financial instruments for which the contractual maturities are essential for an understanding of the timing
all non-derivative financial liabilities; and
of the cash flows.
The 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.
2023
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
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
Less than 6
months
$m
6-12
months
$m
Between 1
and 2
years
$m
Between 2
and 5
years
$m
490.1
-
104.0
594.1
-
-
116.1
116.1
-
-
212.2
212.2
-
-
358.4
358.4
Over 5
years
$m
-
-
424.2
424.2
Total
contractual
cash flows
$m
490.1
-
1,214.9
1,705.0
Carrying
amount
(assets) /
liabilities
$m
490.1
-
1,035.0
1,525.1
(98.3)
96.2
(2.1)
(9.0)
8.8
(0.2)
-
-
-
-
-
-
-
-
-
(107.3)
105.0
(2.3)
(2.7)
-
(2.7)
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)
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
135
135
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
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 1 July
2023 and 2 July 2022 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 $192.3m (2022: positive $31.1m).
2023
$m
276.6
118.5
5.5
115.9
516.5
293.6
810.1
5.5
293.6
299.1
2.71
(0.37)
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)
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 2023 and 2022 financial years. There are no assets
pledged as security in relation to the unsecured debt in the 2023 financial year (2022: nil).
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
136
136
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
23.
Capital management (continued)
(b)
Dividends
Ordinary shares
Dividends paid by Super Retail Group Limited during the financial year were as follows:
2023
$m
2022
$m
Final dividend for the period ended 2 July 2022 of 43.0 cents per share (2021: 55.0 cents per
share) paid on 17 October 2022. Fully franked based on tax paid at 30%
97.1
124.2
Interim dividend for the period ended 31 December 2022 of 34.0 cents (2021: 27.0 cents per
share) paid on 14 April 2023. 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 allocation 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 44.0 cents per
ordinary share (2022: 43.0 cents per ordinary share) and a special dividend of 25.0 cents per
ordinary share, both fully franked based on tax paid at 30%.
Aggregate amount of the final and special dividend expected to be paid on 18 October 2023, out of
retained profits as at 1 July 2023, but not recognised as a liability at year end
Franking credits
The franked portions of dividends paid after 1 July 2023 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
1 July 2023.
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%
76.8
173.9
170.3
3.6
173.9
61.0
185.2
181.8
3.4
185.2
155.8
97.1
252.4
252.4
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
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 dividends determined by the Board since year end will be a reduction of $66.8 million (2022: $41.6
million). These dividends have not been recognised as a liability at year end.
Significant Accounting Policies
Dividend distribution
Provision is made for the amount of any dividend determined, 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 FY23
137
137
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
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, Anthony Heraghty,
Annabelle Chaplain AM, Peter Everingham, Howard Mowlem, Mark O’Hare, Reg Rowe and Judith Swales.
(e)
There are no amounts due from Directors of the consolidated Group and their director-related entities (2022: 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:
2023
$
2022
$
Store lease payment(1)
10,477,402
(1) Rent on properties, with rates which are deemed to be on an arm's-length basis. Rent payable at year-end, which has been included, was $636,283 (2022:
nil). The current reporting period represents 52 weeks, whereas the comparative period represented 53 weeks.
9,357,875
25.
Business combinations
(a)
Subsidiaries
2023
The Group’s subsidiaries at 1 July 2023 are as detailed in Note 28 - Investments in controlled entities. There have been no change to the
Group’s ownership interests in these entities during the current reporting period, other than Infinite Retail NZ Limited ceasing to be a Group
entity upon its deregistration on 21 December 2022.
2022
There were no changes to the Group’s subsidiaries during FY22.
(b)
Associates and joint ventures
Autoguru Australia Pty Ltd
On 30 December 2022, the Group completed the sale of all its shares in Autoguru Australia Pty Ltd, taking the Group’s ownership interest to
nil from 38.29 per cent (as at 2 July 2022). Net proceeds received from the sale totalled $1.8 million. During FY22, the Group considered the
investment in Autoguru to be impaired and as such a loss of $5.7 million was recognised within administration costs in the Group’s
consolidated income statement. The resulting gain in the current reporting period resulting from the sale of the Group’s ownership interest
has also been recognised within administration costs in the Group’s consolidated income statement.
Autocrew Australia Pty Ltd
During FY22, the Group, in conjunction with Robert Bosch Investment Nederland B.V., wound up the Group’s 50:50 joint venture, Autocrew
Australia Pty Ltd. Autocrew Australia Pty Ltd was deregistered on 14 August 2022, taking the Group’s ownership interest to nil from 50 per
cent (as at 2 July 2022).
(c)
Other transactions
On 16 December 2022, the Group completed the acquisition of the assets of two Tackleworld stores from iFish Pty Ltd and Reef Paw Pty Ltd
respectively. Total consideration paid for the assets of the two businesses totalled $0.8 million. On the date of acquisition, plant and
equipment acquired in the asset purchase had a fair value of nil. Total goodwill arising on acquisition was therefore $0.8 million. Cash outflow
as recognised in the Group’s consolidated statement of cashflows was $0.8 million.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
138
138
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
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 1 July 2023 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
Profit for the period
Dividends paid
Retained profits at the end of the financial period
2023
$m
3,543.7
17.9
3,561.6
2022
$m
3,317.6
0.4
3,318.0
(1,907.0)
(1,768.6)
(448.6)
(96.9)
(221.5)
(482.3)
(45.1)
-
(3,201.4)
360.2
(107.0)
253.2
$m
253.2
(6.5)
(6.5)
246.7
$m
577.4
253.2
(173.9)
656.7
(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
225.2
(185.2)
577.4
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
139
139
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
26.
Deed of cross guarantee (continued)
(b)
Consolidated Balance Sheet
Set out below is a consolidated balance sheet as at 1 July 2023 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
Deferred tax liabilities
Provisions
Total non-current liabilities
Total liabilities
NET ASSETS
EQUITY
Contributed equity
Other equity
Reserves
Retained profits
TOTAL EQUITY
2023
$m
175.8
52.0
722.5
2.7
953.0
190.5
-
250.6
894.2
779.0
2,114.3
3,067.3
490.3
165.0
24.5
99.8
779.6
816.9
24.7
38.3
879.9
1,659.5
1,407.8
740.7
(3.8)
14.2
656.7
1,407.8
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
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
140
140
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
27.
Parent entity financial information
The individual financial statements for the parent entity show the following aggregate amounts:
Balance Sheet
Current assets
Total assets
Current liabilities
Total liabilities
NET ASSETS
Contributed equity
Reserves
- share-based payments
Retained earnings
Total Equity
Profit after tax for the period
Total comprehensive income
Significant Accounting Policies
2023
$m
345.6
1,154.9
26.7
27.0
2022
$m
264.0
1,070.1
24.8
25.0
1,127.9
1,045.1
736.9
20.9
370.1
1,127.9
261.7
261.7
740.7
22.1
282.3
1,045.1
176.2
176.2
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 FY23
141
141
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
28.
Investments in controlled entities
The Group’s subsidiaries at 1 July 2023 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(4)
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
2022
%
100
2023
%
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
(1) These controlled entities have been granted relief from the requirement to prepare financial reports in accordance with ASIC Corporations (Wholly-owned
Companies) Instrument 2016/785 issued by the Australian Securities and Investments Commission.
(2) Investment is held directly by Infinite Retail Pty Ltd.
(3) Investment is held directly by Oceania Bicycles Pty Ltd.
(4) Ceased to be a Group entity upon deregistration on 21 December 2022.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
142
142
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
29.
(a)
Key Management Personnel disclosures
Key Management Personnel compensation
Short-term employee benefits
Long-term employee benefits
Post-employment benefits
Share-based payments
2023
$
8,814,960
56,838
210,917
4,215,298
2022
$
8,925,373
55,449
632,552
4,195,047
13,298,013
13,808,421
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
2023
$
30,120,988
2022
$
56,509,512
The Company has established the Super Retail Group Employee Equity Incentive Plan (the EIP) to assist in the retention and motivation of
executives of the Group (Participants). It is intended that performance rights will enable the Group to retain and attract skilled and
experienced executives and provide them with the motivation to enhance the success of the Group.
Under the Long-Term Incentive (LTI) Plan, performance 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 Normalised Earnings Per Share
(EPS) and Normalised Return on Capital (ROC). Historically the LTI Plan has used a combination of Normalised EPS and Normalised 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 Normalised
ROC and Normalised Net Profit Before Tax (NPBT) linked to the FY21 grant and covering LTI reward for both FY21 and FY22. Certain senior
team members (excluding the Executive Leadership Team) were granted performance rights during FY22 on 3 November 2021. These
performance rights included a target for Normalised Net Profit Before Tax with a 100 per cent weighting and are based on the performance
of FY23 at full achievement. These vest from the year of testing over two years at 50 per cent per year.
A total of 790,611 performance rights were granted in FY23 to plan participants on 4 November 2022. This grant reverts to historical
performance measures for testing using a combination of Normalised EPS and Normalised ROC as appropriate measures of sustainable
shareholder returns. This plan will be tested over the three-year period to the end of FY25 and 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
2023
1 September 2016
1 September 2017
1 September 2018
1 September 2019
1 November 2020
3 November 2021
4 November 2022
Balance at start
of the year
(Number)
11,308
46,323
158,478
598,765
1,067,355
176,250
-
2,058,479
Granted during
the year
(Number)
-
-
-
-
-
-
790,611
790,611
Exercised during
the year
(Number)
-
(38,123)
(79,235)
(289,931)
(355,770)
-
-
(763,059)
Forfeited during
the year
(Number)
(11,308)
(8,200)
(5,000)
(22,522)
(3,000)
(3,740)
(5,121)
(58,891)
Balance at the
end of the year
(Number) (1)
-
-
74,243
286,312
708,585
172,510
785,490
2,027,140
2022
1 September 2016
1 September 2017
1 September 2018
1 September 2019
1 November 2020
3 November 2021
73,546
89,240
336,944
656,963
1,116,783
-
2,273,476
-
-
-
-
-
185,997
185,997
(61,271)
(40,035)
(165,970)
(26,631)
-
-
(293,907)
(967)
(2,882)
(12,496)
(31,567)
(49,428)
(9,747)
(107,087)
11,308
46,323
158,478
598,765
1,067,355
176,250
2,058,479
(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 FY23
143
143
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
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 or allocated 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 1.5 years (2022: 1.1 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
2023 Performance Rights
$7.88
4 November 2022
4 Nov 2025, 4 Nov 2026
$10.04
7.5%
6.97%
3.43%
(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 September 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 ($10.25 for the rights granted
during FY23 and $12.53 for the rights granted in FY22) 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.
2023
2022
Number of shares Number of shares
83,141
129,567
157,112
161,290
(92,327)
226,075
(55,596)
157,112
The weighted average remaining contractual life of restricted shares outstanding as at the end of the period was 0.5 years (2022: 0.6 years).
(c)
Expenses arising from equity-settled share-based payments transactions
Executive performance rights
Restricted shares
2023
$m
4.4
3.2
7.6
2022
$m
6.1
0.8
6.9
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
144
144
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
30.
Share-based payments (continued)
Significant Accounting Policies
Share-based payments
Share-based compensation benefits are provided to certain employees via the Super Retail Group Employee Equity Incentive Plan.
The fair value of performance rights granted under the plan are recognised as an employee benefit expense with a corresponding increase
in equity. The fair value is measured at grant date and recognised over the period during which the employees become unconditionally
entitled to the performance rights.
The fair value of the performance rights granted excludes the impact of any non-market vesting conditions (for example, profitability and
sales growth targets). Non-market vesting conditions are included in assumptions about the number of performance rights that are
expected to become exercisable. At each balance sheet date, the Group revises its estimate of the number of performance rights that are
expected to become exercisable. The employee benefit expense recognised each period takes into account the most recent estimate.
Upon exercise of the performance rights, the balance of the share-based payments reserve relating to those performance rights remains
in the share-based payments reserve.
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
2023
$
803,000
-
803,000
236,525
236,525
500,854
500,854
1,540,379
2022
$
775,740
-
775,740
267,356
267,356
88,511
88,511
1,131,607
31,290
31,290
25,237
25,237
Total auditors’ remuneration
(1) The fees in relation to the audit and review of the FY22 Financial Statements have been restated to reflect the total fees paid in relation to that period.
1,571,669
1,156,844
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
145
145
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)
For the period ended 1 July 2023
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:
2023
$m
4.3
2.2
2022
$m
4.7
1.7
Other Contingencies
On 19 January 2023, the FWO filed proceedings in the Federal Court of Australia against the Company and certain of its subsidiaries, seeking
orders in relation to alleged contraventions of the Fair Work Act (refer Note 16 – Provisions). Further amounts may become payable as a
result of these legal proceedings. Future professional advisory fees will be incurred in connection with these proceedings.
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 $43.7 million as at 1 July 2023 (2022: $4.7 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
2023
Cents
$2.64
2022
Cents
$2.21
Net tangible asset per ordinary share (NTA) is calculated based on Net Assets of $1,367.6 million (2022: $1,289.0 million) less intangible assets
of $846.4 million (2022: $866.0 million) adjusted for the associated deferred tax liability of $75.3 million (2022: $75.3 million). The number
of shares used in the calculation was 225,826,500 (2022: 225,826,500).
The NTA calculation includes the right-of-use assets in respect of property, plant and equipment leases of $944.4 million (2022: $923.7
million), and the lease liabilities recognised under AASB 16 Leases of $1,035.0 million (2022: $1,010.7 million). If the right-of-use assets and
associated deferred tax liability were excluded from the calculation, the NTA would have been negative $0.30 per ordinary share (2022:
negative $0.67).
35.
Events occurring after balance date
There were no material events subsequent to 1 July 2023 and up to authorisation of the financial statements for issue, requiring a disclosure
in this Annual Report, other than those that have been disclosed elsewhere in this report.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
146
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
146
DIRECTORS’ DECLARATION
In the Directors’ opinion:
(a)
(b)
(c)
the financial statements and notes set out on pages 93 to 145 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 1 July 2023 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.
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.
Sally Pitkin AO
Chair
Brisbane
17 August 2023
Anthony Heraghty
Group Managing Director and Chief Executive Officer
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
147147
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
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 1 July 2023 and of its financial
performance for the period 3 July 2022 to 1 July 2023
(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 1 July 2023
the consolidated statement of comprehensive income for the period 3 July 2022 to 1 July 2023
the consolidated statement of changes in equity for the period 3 July 2022 to 1 July 2023
the consolidated statement of cash flows for the period 3 July 2022 to 1 July 2023
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
147
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
148
148
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.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
performance of the Group is most commonly measured.
Materiality
● For the purpose of our audit we used overall Group materiality of $19 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
● 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 1 July 2023 and of its financial
performance for the period 3 July 2022 to 1 July 2023
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
the consolidated balance sheet as at 1 July 2023
the consolidated statement of comprehensive income for the period 3 July 2022 to 1 July 2023
the consolidated statement of changes in equity for the period 3 July 2022 to 1 July 2023
the consolidated statement of cash flows for the period 3 July 2022 to 1 July 2023
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.
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 FY23
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SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
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.
Key audit matter
How our audit addressed the key audit matter
Carrying value of Goodwill ($527.4m) and Brand
names ($253.3m)
(Refer to note 11)
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 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.
Our audit procedures included the following:
● Developed an understanding of the key controls
associated with the preparation of the discounted
cash flow models used to assess the recoverable
amount of the Group’s cash generating units (the
impairment models)
● Tested the mathematical accuracy of the discounted
cash flow models
● Assessed whether the allocation of the Group’s
goodwill and brand assets into cash generating units
(CGUs) was consistent with our knowledge of the
Group’s operations and internal Group reporting
● Compared the significant assumptions used in the
discounted cash flow models to historical results,
economic and industry forecasts
● Compared the forecast cash flows used in the
discounted cash flow models to the most up-to-date
budgets and business plans formally approved by
the Board
● Evaluated the Group’s historical ability to forecast
future cash flows by comparing budgets with
reported actual results
● Together with PwC valuation experts, assessed
whether the discount rates appropriately reflected
the risks of the CGUs by comparing the discount
rate to market observable inputs
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
149
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
150
150
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.
Key audit matter
How our audit addressed the key audit matter
Carrying value of Goodwill ($527.4m) and Brand
Our audit procedures included the following:
names ($253.3m)
(Refer to note 11)
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 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.
● Developed an understanding of the key controls
associated with the preparation of the discounted
cash flow models used to assess the recoverable
amount of the Group’s cash generating units (the
impairment models)
● Tested the mathematical accuracy of the discounted
cash flow models
● Assessed whether the allocation of the Group’s
goodwill and brand assets into cash generating units
(CGUs) was consistent with our knowledge of the
Group’s operations and internal Group reporting
● Compared the significant assumptions used in the
discounted cash flow models to historical results,
economic and industry forecasts
● Compared the forecast cash flows used in the
discounted cash flow models to the most up-to-date
budgets and business plans formally approved by
the Board
● Evaluated the Group’s historical ability to forecast
future cash flows by comparing budgets with
reported actual results
● Together with PwC valuation experts, assessed
whether the discount rates appropriately reflected
the risks of the CGUs by comparing the discount
rate to market observable inputs
Key audit matter
How our audit addressed the key audit matter
● Assessed the Group’s consideration of the sensitivity
to a change in key assumptions that either
individually or collectively would be required for
assets to be impaired and considered the likelihood
of such a movement in those key assumptions
arising
● Evaluated the Group’s assessment that the indefinite
life assumption for brand names remains appropriate
at period end
● Evaluated the reasonableness of the disclosures
made in note 11, including those regarding the key
assumptions and sensitivities to changes in such
assumptions, in light of the requirements of
Australian Accounting Standards
Inventory valuation ($788.6m)
(Refer to note 9)
Our audit procedures included the following:
The valuation of inventory was a key audit matter
because of the judgments involved in estimating the
net realisable value of inventory and adjusting
inventory cost for attributable overheads and rebates
received.
● Developed an understanding of the key controls
associated with the costing and valuation of
inventory
● Tested the mathematical accuracy of the inventory
provision
● Assessed the inventory provision using data analysis
techniques to compare the carrying value to the
sales price for each item
● For a sample of inventory items, agreed the inputs
used in the calculation of the weighted average cost
to supplier invoices
● Tested the calculation of the weighted average cost
● Evaluated the Group's methodology for capitalising
overheads and rebates to inventory in light of the
requirements of the Australian Accounting Standards
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
151151
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the period 3 July 2022 to 1 July 2023, 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
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.
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
151
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
152
152
Other information
The directors are responsible for the other information. The other information comprises the
information included in the annual report for the period 3 July 2022 to 1 July 2023, 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
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 61 to 91 of the directors’ report for the
period 3 July 2022 to 1 July 2023.
In our opinion, the remuneration report of Super Retail Group Limited for the period 3 July 2022 to 1
July 2023 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 2023
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
153
153
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SHAREHOLDER INFORMATION
For the period ended 1 July 2023
The information set out in this section is current as at 10 August 2023.
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 19,285 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
11,438
6,443
920
445
39
19,285
4,376,537
15,046,686
6,611,564
8,890,275
190,901,438
225,826,500
1.94
6.66
2.93
3.94
84.53
100.00
There are 734 shareholders (representing 7,472 ordinary shares) holding less than a marketable parcel of shares.
20 largest holders
Details of the 20 largest holders of ordinary shares in the Company are as follows:
Registered holder
1.
HSBC Custody Nominees (Australia) Limited
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
SCA FT Pty Ltd
J P Morgan Nominees Australia Pty Limited
Citicorp Nominees Pty Limited
National Nominees Limited
BNP Paribas Noms Pty Ltd
Re-Grow Futures Pty Ltd
Citicorp Nominees Pty Limited
Santos L Helper Pty Ltd
Ms Tracey Leanne Rowe
Ms Tanya Joeann Southam
Mr Kenneth Joseph Hall
Ms Jodi Maria Thomas
SCCASP Holdings Pty Ltd
Ms Janene Julie Young
Pacific Custodians Pty Limited
Pacific Custodians Pty Limited
Pacific Custodians Pty Limited
Mr Robert Edward Thorn
BNP Paribas Noms Pty Ltd
Number of ordinary
shares
% of ordinary
shares
64,392,536
61,490,627
20,840,785
18,506,387
5,291,740
5,254,599
3,787,379
1,242,432
904,246
757,126
648,346
627,143
625,298
612,425
611,876
564,682
529,001
436,335
426,665
332,413
28.51
27.23
9.23
8.19
2.34
2.33
1.68
0.55
0.40
0.34
0.29
0.28
0.28
0.27
0.27
0.25
0.23
0.19
0.19
0.15
Total for Top 20
Total
187,882,041
225,826,500
83.20
100.00
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
153
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
154
154
SHAREHOLDER INFORMATION (continued)
For the period ended 1 July 2023
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, SCCASP Holdings Pty Ltd, Re-Grow
Futures Pty Ltd, Re-Grow Equities Pty Ltd, TLAR Pty
Ltd, Reginald Allen Rowe and Mark John O’Hare
Unquoted securities
Number of ordinary shares
in notice
65,918,556
% of ordinary shares
in notice Date notice received
16 June 2023
29.189
Number of shareholders
Number of shares
% of shares on issue
The following table shows the distribution of the Company's holders of performance rights and number of holders and performance rights.
There are 2,027,140 unlisted performance rights on issue under the Company's employee incentive plans, held by 105 holders.
Distribution of holders of 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
6
40
19
35
5
105
3,532
93,247
137,036
883,889
909,436
2,027,140
0.18
4.60
6.76
43.60
44.86
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 FY23, 1,227,275 ordinary shares in the Company were purchased on-market at an average price of $10.89 per share for the purposes
of the Company's employee incentive plans.
On-market buy back
There is no current on-market buy-back of the Company’s shares.
Restricted and escrowed securities
The Company does not have any restricted securities (as defined in the ASX Listing Rules) or securities subject to voluntary escrow on issue.
SHAREHOLDER INFORMATION
For the period ended 1 July 2023
The information set out in this section is current as at 10 August 2023.
The ordinary shares of the Company are listed on the Australian Securities Exchange under the ASX code SUL.
The Company has 225,826,500 fully paid ordinary shares on issue, held by 19,285 shareholders.
Securities exchange listing
Shares on issue
Distribution of shareholders
The following table shows the distribution of the Company's shareholders by size of shareholding and number of shareholders and shares.
There are 734 shareholders (representing 7,472 ordinary shares) holding less than a marketable parcel of shares.
Details of the 20 largest holders of ordinary shares in the Company are as follows:
Number of ordinary
% of ordinary
Ordinary shares
11,438
6,443
920
445
39
19,285
4,376,537
15,046,686
6,611,564
8,890,275
190,901,438
225,826,500
Holding
1-1,000
1,001 – 5,000
5,001 -10,000
10,001 – 100,000
100,001 and over
Total
20 largest holders
Registered holder
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
HSBC Custody Nominees (Australia) Limited
SCA FT Pty Ltd
J P Morgan Nominees Australia Pty Limited
Citicorp Nominees Pty Limited
National Nominees Limited
BNP Paribas Noms Pty Ltd
Re-Grow Futures Pty Ltd
Citicorp Nominees Pty Limited
Santos L Helper Pty Ltd
Ms Tracey Leanne Rowe
Ms Tanya Joeann Southam
Mr Kenneth Joseph Hall
Ms Jodi Maria Thomas
SCCASP Holdings Pty Ltd
Ms Janene Julie Young
Pacific Custodians Pty Limited
Pacific Custodians Pty Limited
Pacific Custodians Pty Limited
Mr Robert Edward Thorn
BNP Paribas Noms Pty Ltd
1.94
6.66
2.93
3.94
84.53
100.00
shares
28.51
27.23
9.23
8.19
2.34
2.33
1.68
0.55
0.40
0.34
0.29
0.28
0.28
0.27
0.27
0.25
0.23
0.19
0.19
0.15
shares
64,392,536
61,490,627
20,840,785
18,506,387
5,291,740
5,254,599
3,787,379
1,242,432
904,246
757,126
648,346
627,143
625,298
612,425
611,876
564,682
529,001
436,335
426,665
332,413
Total for Top 20
Total
187,882,041
225,826,500
83.20
100.00
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
155
155
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
SHAREHOLDER INFORMATION (continued)
For the period ended 1 July 2023
Shareholder calendar(1)
Event
Full-year results announcement
Date
17 August 2023
Ex-dividend date for final and special dividends
7 September 2023
Record date for final and special dividends
8 September 2023
DRP election date for final and special dividends
11 September 2023
Payment date for final and special dividends
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
18 October 2023
25 October 2023
22 February 2024
6 March 2024
7 March 2024
8 March 2024
12 April 2024
(1) Dates are subject to change. Changes will be notified to the ASX as required.
2023 Annual General Meeting
The Company's 2023 AGM will be held at 11.30am (AEST) on Wednesday, 25 October 2023. 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 Board has also resolved to pay a fully franked special dividend of 25.0 cents per share in respect of FY23. The proposed dividend dates
for FY24 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
sul@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 FY23
155
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
156
SHAREHOLDER INFORMATION (continued)
For the period ended 1 July 2023
Shareholder calendar(1)
Event
Full-year results announcement
Ex-dividend date for final and special dividends
7 September 2023
Record date for final and special dividends
8 September 2023
DRP election date for final and special dividends
11 September 2023
Payment date for final and special dividends
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
(1) Dates are subject to change. Changes will be notified to the ASX as required.
2023 Annual General Meeting
separately.
Dividend details
Date
17 August 2023
18 October 2023
25 October 2023
22 February 2024
6 March 2024
7 March 2024
8 March 2024
12 April 2024
The Company's 2023 AGM will be held at 11.30am (AEST) on Wednesday, 25 October 2023. Details of the meeting will be sent to shareholders
The Company generally pays a dividend on its fully paid ordinary shares twice a year following the interim and final results announcements.
The Board has also resolved to pay a fully franked special dividend of 25.0 cents per share in respect of FY23. The proposed dividend dates
for FY24 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
Shareholders who wish to enquire about their shareholding in the Company may contact the Company’s share registry at:
their involvement in the DRP at any time.
Shareholder enquiries
Link Market Services Limited
Locked Bag A14
South Sydney NSW 1235 Australia
Telephone: 1800 170 502 (within Australia)
+61 1800 170 502 (outside Australia)
Facsimile:
+61 2 9287 0303
Email:
Website:
sul@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.
Glossary
Defined term
Definition
Defined term
Definition
$
AASB
AGM
Australian dollars, unless
indicated otherwise
Australian Accounting
Standards Board
Annual General Meeting
FY23
Group
Annual Report
the Company's FY23 Annual Report
Group MD and CEO
ARC
ASIC
ASX
Board
bps
CAGR
carparc
CFO
Committee or Board
Committee
Company or Super
Retail Group
Corporations Act
Directors
DRP
EBITDA
EIP
ELT
EPS
ESG
EV
Executive KMP
FBT
FWO
FY22
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
basis points
HRRC
IFRS
ISSB
KMP
KPI
LTI
compound annual growth rate
LTI plan
the number of registered vehicles
Chief Financial Officer
a committee of the Board
Super Retail Group Limited ABN
81 108 676 204
Corporations Act 2001 (Cth)
the directors of the Company
MTBP
NPBT
NPS
PBT
PwC
Dividend Reinvestment Plan
RCMF
earnings before interest, taxes,
depreciation, and amortisation
the Super Retail Group Employee
Equity Incentive Plan
Executive Leadership Team
rCX
ROC
SCA
earnings per share
Environmental, Social and
Governance
Electric vehicle
Scope 1 and 2
emissions
Key Management Personnel of the
Company other than Non-Executive
Directors
Fringe Benefits Tax
Fair Work Ombudsman
STI
STI scheme
the financial year ending 2 July
2022, being the 53-week period
from 27 June 2021 to 2 July 2022
(and inclusive of those two dates)
TCFD
TRI
the financial year ended 1 July
2023, being the 52-week period
from 3 July 2022 to 1 July 2023 (and
inclusive of those two dates)
the Company and its consolidated
subsidiaries
Group Managing Director and Chief
Executive Officer
Human Resources and
Remuneration Committee
International Financial Reporting
Standards
International Sustainability
Standards Board
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
Risk and Compliance Management
Framework
rebel Customer Experience
return on capital
Supercheap Auto
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
Total Recordable Injury
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
157
Corporate Directory
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 Secretaries
Rebecca Farrell
Amelia Berczelly
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
sul@linkmarketservices.com.au
www.linkmarketservices.com.au
Auditors
PricewaterhouseCoopers
SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY23
www.superretailgroup.com.au