Financial Statements

4. Segment information

The Group's operating segments under IFRS 8 have been determined based on the reports reviewed by the Group's Chief Operating Decision-Maker (the 'Board'). The Board assesses the performance of the operating segments based on profit before tax, before inter-segment royalties. The Board considers the business from a customer perspective only, being Retail and Wholesale.

The Board receives information, reviews the performance of the business, allocates resources and approves budgets for two operating segments, and therefore information is disclosed in respect of the following two segments:

  • Retail – principal activities comprise the operation of UK and Republic of Ireland stores, concessions and internet sites. Revenue is derived from the sale to individual consumers of own brand and third party clothing, shoes and accessories; and
  • Wholesale – principal activities comprise the design and ownership of brands, and wholesale distribution of own brand products (clothes, shoes and accessories) worldwide.

Segment results and assets include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Capital expenditure comprises additions to property, plant and equipment and intangible assets. The Group reports and manages central functions as part of Retail operations, which includes the goodwill and intangibles arising on consolidation.

Sales between segments are carried out on an arm's length basis. The revenue from external parties reported to the Board is measured in a manner consistent with that of the IFRS financial statements.

Royalties charged between segments have been reflected in the performance of each business segment. Inter-segment transfers or transactions entered into under a cost plus pricing structure are not reflected in the performance of each business segment.

Segmental information for the main reportable business segments of the Group for the 52 weeks ended 1 May 2011 and 2 May 2010 is set out below:

May 2011 Segmental analysis Retail
£m
Wholesale
£m
Group
£m
Total segment revenue 147.4 91.6 239.0
Inter-segment revenue (1.1) (1.1)
Revenue from external customers 147.4 90.5 237.9
Exceptional items (0.7) (0.7)
Finance income 0.1 0.1
Profit before tax before inter-segment royalties 29.3 18.0 47.3
Inter-segment royalties (11.3) 11.3
Profit before tax 18.0 29.3 47.3
Total assets 119.3 113.1 232.4
Total liabilities 63.4 18.2 81.6
Capital expenditure 17.9 2.6 20.5
Depreciation and amortisation 6.9 1.0 7.9
Net impact of lease incentives (0.2) (0.2)
Income tax expense excluding exceptional items 5.2 8.6 13.8
Exceptional income tax expense 3.4 3.4

The following additional information is considered useful to the reader.


Reported 52
weeks ended
1 May 2011
£m
Impact of
IFRS 3
on inventory
acquired at
date of
acquisition
£m
Impact
of new
accounting
policy
relating to
prior periods
£m
Exceptional
items
£m
Loss
recognised
on fair
value of
deferred
consideration
£m
Financial
derivatives
£m
Underlying1
52 weeks
ended
1 May 2011
£m
Revenue






Retail 147.4 147.4
Wholesale 90.5 90.5
Total revenue 237.9 237.9
Gross profit 132.8 1.9 (1.6) 133.1
Operating profit






Retail 38.3 (1.4) 0.4 0.5 37.8
Wholesale 18.0 1.9 (0.2) 0.7 1.0 21.4
Total operating profit 56.3 1.9 (1.6) 0.7 0.4 1.5 59.2
Group overheads (9.1) (9.1)
Operating profit before royalties






Retail 29.2 (1.4) 0.4 0.5 28.7
Wholesale 18.0 1.9 (0.2) 0.7 1.0 21.4
Total operating profit before royalties 47.2 1.9 (1.6) 0.7 0.4 1.5 50.1
Net finance income — Retail 0.1 0.1
Profit before tax before royalties 47.3 1.9 (1.6) 0.7 0.4 1.5 50.2
Retail 29.3 (1.4) 0.4 0.5 28.8
Wholesale 18.0 1.9 (0.2) 0.7 1.0 21.4

1 Underlying results have been adjusted to reflect the impact of revaluation of inventory within SuperGroup Europe BVBA at acquisition (IFRS 3 revised requirement), the impact of including the prior years' freight and duty costs into inventory, exceptional items, the loss recognised on fair valuing of deferred consideration and financial derivatives. All references to underlying in this statement are after making these adjustments. Retail and Wholesale are presented before Group overheads and royalties unless stated otherwise.

May 2010 Segmental analysis Retail
£m
Wholesale
£m
Group
£m
Total segment revenue 86.4 58.1 144.5
Inter-segment revenue (5.1) (5.1)
Revenue from external customers 86.4 53.0 139.4
Exceptional items (3.8) (3.8)
Finance costs (0.1) (0.1) (0.2)
Profit before tax before inter-segment royalties 11.9 10.6 22.5
Inter-segment royalties* (1.0) 1.0
Profit before tax 10.9 11.6 22.5
Total assets 71.2 69.9 141.1
Total liabilities 31.6 9.0 40.6
Capital expenditure 15.3 0.5 15.8
Depreciation and amortisation 3.9 0.3 4.2
Net impact of lease incentives 0.4 0.4
Income tax expense/(credit) excluding exceptional items (0.6) 0.8 0.2
Exceptional income tax expense/(credit) 1.5 (51.4) (49.9)

* Inter-segmental royalties commenced from 8 March 2010.

The following additional information is considered useful to the reader.


Reported
52 weeks ended
2 May 2010
£m
Exceptional
items
£m
Financial
derivatives
£m
Underlying1
52 weeks ended
2 May 2010
£m
Revenue



Retail 86.4 86.4
Wholesale 53.0 53.0
Total revenue 139.4 139.4
Gross profit 73.3 73.3
Operating profit



Retail 14.1 3.8 0.1 18.0
Wholesale 10.7 0.1 10.8
Total operating profit 24.8 3.8 0.2 28.8
Group overheads (2.1) (2.1)
Operating profit before royalties



Retail 12.0 3.8 0.1 15.9
Wholesale 10.7 0.1 10.8
Total operating profit before royalties 22.7 3.8 0.2 26.7
Net finance costs (0.2) (0.2)
Profit before tax before royalties 22.5 3.8 0.2 26.5
Retail 11.9 3.8 0.1 15.8
Wholesale 10.6 0.1 10.7

Revenues of £17.6m (2010: £16.7m) in the Retail segment are derived from concessions within department stores which are all under common ownership.

The Group has subsidiaries which are incorporated and resident in the UK and overseas. Revenue from external customers in the UK and the total revenue from external customers from other countries are:



Group

52 weeks ended
1 May 2011
52 weeks ended
2 May 2010

£m £m
External revenue — UK 179.5 110.5
External revenue — overseas 58.4 28.9
Total external revenue 237.9 139.4

Included within external revenue overseas is revenue of £15.3m (2010: £0.5m) generated by our overseas subsidiaries.

The total of non-current assets, other than deferred tax assets, located in the UK is £35.3m (2010: £23.4m), and the total of non-current assets located in other countries is £32.7m (2010: £1.0m).