Year to 31 March
Net Cash Flow 2011
£m 2012
£m 2013
£m 2014
£m 2015
£m
Adjusted operating profit1 301.1 376.9 428.1 460.3 455.2
Discontinued operations (2.1) 2.5 – – –
Restructuring spend (20.3) (8.6) (1.0) (0.7) –
Depreciation and amortisation 62.6 87.6 111.2 123.7 123.7
Employee share scheme costs 28.3 31.8 24.9 25.4 21.0
Proceeds/(payment) on equity swap contracts – – – 15.7 (0.2)
Increase in inventories (58.0) (61.8) (39.2) (68.2) (15.1)
Increase in receivables (8.1) (17.4) (32.0) (73.8) (43.8)
Increase in payables 68.0 70.1 17.6 42.3 19.7
Other non-cash items (5.1) 1.4 13.4 10.8 7.6
Cash flow from operations 366.4 482.5 523.0 535.5 568.1
Capital expenditure (108.4) (153.1) (175.9) (154.0) (155.7)
Payment to terminate licence relationship – – (144.1) – –
Proceeds from sale of assets held for sale – – 0.1 – –
Capital contributions from JV partners 7.0 4.9 0.4 0.7 0.4
Acquisitions (51.9) (23.5) (1.0) (2.6) (3.4)
Net interest (3.2) (0.6) 0.9 0.8 1.2
Tax paid (98.1) (108.2) (99.0) (111.1) (114.4)
Free cash flow 111.8 202.0 104.4 269.3 296.2
Dividends (68.7) (99.2) (113.5) (130.7) (145.3)
ESOP trust purchases/other (5.6) (60.0) (45.4) (18.8) (15.1)
Exchange difference (1.6) (2.4) 12.8 (13.9) 13.9
Total movement in net cash 35.9 40.4 (41.7) 105.9 149.7
Net cash 297.9 338.3 296.6 402.5 552.2
As at 31 March
Balance Sheet 2011
£m 2012
£m 2013
£m 2014
£m 2015
£m
Intangible assets 114.7 133.1 210.2 195.4 193.5
Property, plant and equipment 281.8 328.8 409.1 398.4 436.5
Inventories 247.9 311.1 351.0 419.8 436.6
Trade and other receivables 147.7 167.5 199.5 273.7 320.8
Trade and other payables (367.8) (429.3) (447.8) (507.2) (523.1)
Taxation (including deferred taxation) 16.9 39.1 45.3 47.4 68.6
Net cash 297.9 338.3 296.6 402.5 552.2
Other net assets (5.4) 2.8 (11.1) (22.0) (33.6)
Net assets 733.7 891.4 1,052.8 1,208.0 1,451.5
Reconciliation of Adjusted Retail/Wholesale ROIC 2011
£m 2012
£m 2013
£m 2014
£m 2015
£m Retail/Wholesale adjusted operating profit1 219.5 286.9 335.6 393.5 399.2
Adjusted effective tax rate1 27.9% 26.7% 25.8% 24.7% 23.4%
Retail/Wholesale adjusted operating profit after tax1 158.3 210.3 249.0 296.3 305.8 Net assets excluding licensing segment assets 725.7 884.4 1,048.6 1,202.2 1,448.9
Net cash (297.9) (338.3) (296.6) (402.5) (552.2)
Assumed lease assets2 442.5 560.0 713.0 782.5 954.5
Exclude adjusting items:
Licence intangible asset – – (70.9) (56.0) (41.1)
Put option liability 47.3 57.8 55.0 51.3 54.4
Restructuring provisions 13.6 3.5 1.9 1.5 0.8
Adjusted operating assets 931.2 1,167.4 1,451.0 1,579.0 1,865.3
Average operating assets 824.2 1,049.3 1,309.2 1,515.0 1,722.2
Adjusted Retail/Wholesale ROIC 19.2% 20.0% 19.0% 19.6% 17.8%
1 Excludes the impact of adjusting items.
2 Assumed leased assets are calculated as a factor of five times lease payments.
162 162
Five Year Summary
Year to 31 March
Net Cash Flow 2011
£m 2012
£m 2013
£m 2014
£m 2015
£m
Adjusted operating profit1 301.1 376.9 428.1 460.3 455.2
Discontinued operations (2.1) 2.5 – – –
Restructuring spend (20.3) (8.6) (1.0) (0.7) –
Depreciation and amortisation 62.6 87.6 111.2 123.7 123.7
Employee share scheme costs 28.3 31.8 24.9 25.4 21.0
Proceeds/(payment) on equity swap contracts – – – 15.7 (0.2)
Increase in inventories (58.0) (61.8) (39.2) (68.2) (15.1)
Increase in receivables (8.1) (17.4) (32.0) (73.8) (43.8)
Increase in payables 68.0 70.1 17.6 42.3 19.7
Other non-cash items (5.1) 1.4 13.4 10.8 7.6
Cash flow from operations 366.4 482.5 523.0 535.5 568.1
Capital expenditure (108.4) (153.1) (175.9) (154.0) (155.7)
Payment to terminate licence relationship – – (144.1) – –
Proceeds from sale of assets held for sale – – 0.1 – –
Capital contributions from JV partners 7.0 4.9 0.4 0.7 0.4
Acquisitions (51.9) (23.5) (1.0) (2.6) (3.4)
Net interest (3.2) (0.6) 0.9 0.8 1.2
Tax paid (98.1) (108.2) (99.0) (111.1) (114.4)
Free cash flow 111.8 202.0 104.4 269.3 296.2
Dividends (68.7) (99.2) (113.5) (130.7) (145.3)
ESOP trust purchases/other (5.6) (60.0) (45.4) (18.8) (15.1)
Exchange difference (1.6) (2.4) 12.8 (13.9) 13.9
Total movement in net cash 35.9 40.4 (41.7) 105.9 149.7
Net cash 297.9 338.3 296.6 402.5 552.2
As at 31 March
Intangible assets 114.7 133.1 210.2 195.4 193.5
Property, plant and equipment 281.8 328.8 409.1 398.4 436.5
Inventories 247.9 311.1 351.0 419.8 436.6
Trade and other receivables 147.7 167.5 199.5 273.7 320.8
Trade and other payables (367.8) (429.3) (447.8) (507.2) (523.1)
Taxation (including deferred taxation) 16.9 39.1 45.3 47.4 68.6
Net cash 297.9 338.3 296.6 402.5 552.2
Other net assets (5.4) 2.8 (11.1) (22.0) (33.6)
Net assets 733.7 891.4 1,052.8 1,208.0 1,451.5
Reconciliation of Adjusted Retail/Wholesale ROIC 2011
£m 2012
£m 2013
£m 2014
£m 2015
£m Retail/Wholesale adjusted operating profit1 219.5 286.9 335.6 393.5 399.2
Adjusted effective tax rate1 27.9% 26.7% 25.8% 24.7% 23.4%
Retail/Wholesale adjusted operating profit after tax1 158.3 210.3 249.0 296.3 305.8 Net assets excluding licensing segment assets 725.7 884.4 1,048.6 1,202.2 1,448.9
Net cash (297.9) (338.3) (296.6) (402.5) (552.2)
Assumed lease assets2 442.5 560.0 713.0 782.5 954.5
Exclude adjusting items:
Licence intangible asset – – (70.9) (56.0) (41.1)
Put option liability 47.3 57.8 55.0 51.3 54.4
Restructuring provisions 13.6 3.5 1.9 1.5 0.8
Adjusted operating assets 931.2 1,167.4 1,451.0 1,579.0 1,865.3
Average operating assets 824.2 1,049.3 1,309.2 1,515.0 1,722.2
Adjusted Retail/Wholesale ROIC 19.2% 20.0% 19.0% 19.6% 17.8%
1 Excludes the impact of adjusting items.
2 Assumed leased assets are calculated as a factor of five times lease payments.
Report on the parent Company financial statements Our opinion
In our opinion, Burberry Group plc’s Company financial statements (the “financial statements”):
·
give a true and fair view of the state of the Company’s affairs as at 31 March 2015;·
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and·
have been prepared in accordance with the requirements of the Companies Act 2006.What we have audited
Burberry Group plc’s financial statements comprise:
·
the Company Balance Sheet as at 31 March 2015; and·
the notes to the financial statements, which include a summary of significant accounting policies and other explanatory information.Certain required disclosures have been presented elsewhere in the Annual Report, rather than in the notes to the financial statements. These are cross-referenced from the financial statements and are identified as audited.
The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
Other required reporting Consistency of other information Companies Act 2006 opinion
In our opinion, the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements.
ISAs (UK & Ireland) reporting
Under International Standards on Auditing (UK and Ireland) (“ISAs (UK & Ireland)”) we are required to report to you if, in our opinion, information in the Annual Report is:
·
materially inconsistent with the information in the audited financial statements; or·
apparently materially incorrect based on, or materially inconsistent with, our knowledge of the Company acquired in the course of performing our audit; or·
otherwise misleading.We have no exceptions to report arising from this responsibility.
Adequacy of accounting records and information and explanations received Under the Companies Act 2006 we are required to report to you if, in our opinion:
·
we have not received all the information and explanations we require for our audit; or·
adequate accounting records have not been kept by the Company, or returns adequate for our audit have not been received from branches not visited by us; or·
the financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the accounting records and returns.We have no exceptions to report arising from this responsibility.
Directors’ remuneration
Directors’ remuneration report – Companies Act 2006 opinion
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the
Independent Auditors’ Report to the Members of Burberry Group plc
Other Companies Act 2006 reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion, certain disclosures of directors’ remuneration specified by law are not made. We have no exceptions to report arising from this responsibility.
Responsibilities for the financial statements and the audit Our responsibilities and those of the directors
As explained more fully in the Statement of Directors’ Responsibilities set out on page 110, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and ISAs (UK & Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
What an audit of financial statements involves
We conducted our audit in accordance with ISAs (UK & Ireland). An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of:
·
whether the accounting policies are appropriate to the Company’s circumstances and have been consistently applied and adequately disclosed;·
the reasonableness of significant accounting estimates made by the directors; and·
the overall presentation of the financial statements.We primarily focus our work in these areas by assessing the directors’ judgements against available evidence, forming our own judgements, and evaluating the disclosures in the financial statements.
We test and examine information, using sampling and other auditing techniques, to the extent we consider necessary to provide a reasonable basis for us to draw conclusions. We obtain audit evidence through testing the effectiveness of controls, substantive procedures or a combination of both.
In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Other matter
We have reported separately on the Group financial statements of Burberry Group plc for the year ended 31 March 2015.
Andrew Kemp
Senior Statutory Auditor,
for and on behalf of PricewaterhouseCoopers LLP, Chartered Accountants and Statutory Auditors, London, 19 May 2015
164 164
Independent Auditors’ Report to the Members of Burberry Group plc
Other Companies Act 2006 reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion, certain disclosures of directors’ remuneration specified by law are not made. We have no exceptions to report arising from this responsibility.
Responsibilities for the financial statements and the audit Our responsibilities and those of the directors
As explained more fully in the Statement of Directors’ Responsibilities set out on page 110, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and ISAs (UK & Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
What an audit of financial statements involves
We conducted our audit in accordance with ISAs (UK & Ireland). An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of:
·
whether the accounting policies are appropriate to the Company’s circumstances and have been consistently applied and adequately disclosed;·
the reasonableness of significant accounting estimates made by the directors; and·
the overall presentation of the financial statements.We primarily focus our work in these areas by assessing the directors’ judgements against available evidence, forming our own judgements, and evaluating the disclosures in the financial statements.
We test and examine information, using sampling and other auditing techniques, to the extent we consider necessary to provide a reasonable basis for us to draw conclusions. We obtain audit evidence through testing the effectiveness of controls, substantive procedures or a combination of both.
In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Other matter
We have reported separately on the Group financial statements of Burberry Group plc for the year ended 31 March 2015.
Andrew Kemp
Senior Statutory Auditor,
for and on behalf of PricewaterhouseCoopers LLP, Chartered Accountants and Statutory Auditors, London, 19 May 2015
Note
Debtors – amounts falling due after more than one year D 303.6 395.5
Derivative assets maturing within one year 1.3 –
Derivative assets maturing after more than one year 1.5 0.5
Cash at bank and in hand 0.8 1.2
470.5 397.6
Creditors – amounts falling due within one year E (58.8) (198.5)
Derivative liabilities maturing within one year – (0.4)
Net current assets 411.7 198.7
Total assets less current liabilities 2,649.0 2,418.0
Creditors – amounts falling due after more than one year E (1,536.0) (1,424.6)
Derivative liabilities maturing after more than one year – (0.9)
Provisions for liabilities (1.4) (1.4)
Net assets 1,111.6 991.1
Total shareholders’ funds F 1,111.6 991.1
The financial statements on pages 165 to 170 were approved by the Board on 19 May 2015 and signed on its behalf by:
Sir John Peace Carol Fairweather
Chairman Chief Financial Officer