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 (executive board members "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 all internet sites. Revenue is derived from the sale to individual consumers of own brand and third party clothing, footwear and accessories; and
  • Wholesale – principal activities comprise the design and ownership of brands, wholesale distribution of own brand products (clothing, footwear and accessories) worldwide and the operation of European stores.

Segment results and assets include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. 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 at arm's length. 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 29 April 2012 and 1 May 2011 is set out below:

Retail
2012
£m
Wholesale
2012
£m
Group
2012
£m
Total segment revenue191.0126.0317.0
Less: inter-segment revenue(3.2)(3.2)
Revenue from external customers191.0122.8313.8
Finance income0.10.1
Profit before tax before inter-segment royalties25.725.751.4
Inter-segment royalties(15.3)15.3
Profit before tax10.441.051.4
Total assets129.7141.8271.5
Total liabilities64.023.587.5
Capital expenditure47.94.352.2
Depreciation and amortisation12.01.213.2
Net impact of lease incentives (income)2.22.2
Underlying income tax expense2.89.412.2
Non-underlying and exceptional income tax expense3.13.1

The following additional information is considered useful to the reader.

Reported
2012
£m
Gain
recognised
on fair
value of
deferred
consideration
£m
Financial
derivatives
£m
Underlying1
2012
£m
Revenue
Retail191.0191.0
Wholesale122.8122.8
Total revenue313.8313.8
Gross profit178.8178.8
Operating profit
Retail31.60.131.7
Wholesale25.7(0.4)25.3
Total operating profit before Group overheads57.3(0.3)57.0
Group overheads(6.0)(8.3)(14.3)
Operating profit before royalties
Retail25.6(8.3)0.117.4
Wholesale25.7(0.4)25.3
Total operating profit before royalties51.3(8.3)(0.3)42.7
Net finance income – Retail0.10.1
Profit before tax before royalties51.4(8.3)(0.3)42.8
Retail25.7(8.3)0.117.5
Wholesale25.7(0.4)25.3
  1. Underlying results have been adjusted to reflect the impact of the gain/loss recognised on fair valuing deferred consideration, financial derivatives and exceptional items. In addition, the prior periods have been adjusted to reflect the impact of revaluation of inventory within SuperGroup Europe BVBA at acquisition (IFRS 3 revised requirement) and the impact of including the prior year's freight and duty costs into inventory. Further details of the adjustments are included in note 13. All references to underlying in this statement are after making these adjustments. Retail and Wholesale segments are presented before Group overheads and royalties unless stated otherwise.
Retail
2011
£m
Wholesale
2011
£m
Group
2011
£m
Total segment revenue147.491.6239.0
Less: inter-segment revenue(1.1)(1.1)
Revenue from external customers147.490.5237.9
Exceptional items(0.7)(0.7)
Finance income0.10.1
Profit before tax before inter-segment royalties29.318.047.3
Inter-segment royalties(11.3)11.3
Profit before tax18.029.347.3
Total assets119.3113.1232.4
Total liabilities63.418.281.6
Capital expenditure17.92.620.5
Depreciation and amortisation6.91.07.9
Net impact of lease incentives (income)0.20.2
Underlying income tax expense5.48.914.3
Non-underlying and exceptional income tax expense2.92.9

The following additional information is considered useful to the reader.

Reported
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
2011
£m
Revenue
Retail147.4147.4
Wholesale90.590.5
Total revenue237.9237.9
Gross profit132.81.9(1.6)133.1
Operating profit
Retail38.3(1.4)0.40.537.8
Wholesale18.01.9(0.2)0.71.021.4
Total operating profit before Group overheads56.31.9(1.6)0.70.41.559.2
Group overheads(9.1)(9.1)
Operating profit before royalties
Retail29.2(1.4)0.40.528.7
Wholesale18.01.9(0.2)0.71.021.4
Total operating profit before royalties47.21.9(1.6)0.70.41.550.1
Net finance income – Retail0.10.1
Profit before tax before royalties47.31.9(1.6)0.70.41.550.2
Retail29.3(1.4)0.40.528.8
Wholesale18.01.9(0.2)0.71.021.4

Revenues of £16.3m (2011: £17.6m) 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
20122011
£m£m
External revenue – UK213.9179.5
External revenue – overseas99.958.4
Total external revenue313.8237.9

Included within external revenue overseas is revenue of £48.0m (2011: £15.3m) generated by our overseas subsidiaries.

The total of non-current assets, other than deferred tax assets, located in the UK is £72.4m (2011: £35.3m), and the total of non-current assets located in other countries is £32.1m (2011: £32.7m).

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