The directors present the strategic report for the period ended 3 February 2024.
Principal activity
The principal activity of the group is the sale of footwear through its chain of retail stores and via on-line activities.
The principal companies within the Schuh Limited group ("Schuh group") were Schuh Limited and Schuh (ROI) Limited. At 3 February 2024, Schuh group operated 121 stores (2022: 122) across all territories, averaging approximately 5,041 square feet (2022: 5,041 square feet) for a main chain store and 2,826 square feet (2023: 2,826 square feet) for a standalone kids unit. These stores include both street-level, retail parks and mall locations in the United Kingdom, Channel Islands and the Republic of Ireland. The Schuh group closed three stores (2023: four) and opened two new stores (2023: four). The Schuh group also sells footwear through e-commerce operations with specific UK, EU, Irish and German website domains.
The financial statements cover a 53 week period with the comparative financial results covering a 52 week period. The group's key performance indicators are:
| 3 February 2024 | 28 January 2023 | Change |
| £000 | £000 | % |
Turnover | 380,807 | 354,491 | 7.4 |
EBITDA | 28,039 | 20,645 | 35.8 |
Profit before tax | 21,043 | 13,422 | 56.8 |
Profit after tax | 16,082 | 10,389 | 54.8 |
Equity shareholders’ funds | 34,507 | 18,220 | 89.4 |
Tangible asset investment | 9,152 | 7,898 | 15.9 |
Current assets as a % of current liabilities | 258% | 236% | 9.3 |
Average number of employees | 4,371 | 3,977 | 9.9 |
Customer footfall | 49.373m | 47.585m | 3.8 |
Turnover increased by 7.4% and footfall increased by 3.8% in our stores. E-commerce performance continues to be strong, growing 10% like for like.
The asset investment is made up of UK fixed asset additions (£8,753k) plus the Schuh (ROI) fixed asset additions of (€470k) converted at an exchange rate of 1.18 to give total Schuh (ROI) additions of (£399k) and total group additions of £9,152k.
The carrying values of stores have been compared to their recoverable amounts, represented by their value in use to the group. No impairment was recognised in the current and prior periods.
While the retail environment continues to pose difficult trading conditions we will continue to review our store portfolio so to ensure we are best placed to adapt to this changing environment. We believe our continued investment in driving efficiency and operational improvements through technology will serve us well.
The balance sheet includes a figure within long term debt of £44m (2023: £50m) and represents an intercompany loan from Genesco Jersey Ltd. The loan expiry is April 2025, with an annual interest rate of 3.4% charged to Schuh Limited. This debt is listed on The International Stock Exchange.
More detailed analysis of performance can be found at www.genesco.com as part of our parent company's quarterly and annual U.S. SEC filings.
The Board considers the following to be the main risks which could materially affect the business:
profitability risk: total revenues can be affected by economic factors influencing the overall amount of consumer spend on clothing and footwear and also by fashion trends that can, to some extent, dictate average unit selling prices. The group continually seeks to maintain and improve its revenues through differentiation in its delivery of high standards of customer service. Costs are carefully controlled through commercially sound authorisation procedures and regular, sophisticated management reporting;
product risk: the group maintains a wide network of suppliers and invests in building long-term relationships with them. Through the buying, stock management and accounts payable teams, regular contact is maintained with every active supplier to ensure continuity of supply. The group also invests heavily in personnel with specialist expertise in footwear construction who maintain the group’s high quality standards through a programme of regular visits to manufacturers (pandemic restrictions allowing) and extensive product testing. Systems continually monitor and report quantities on order and in stock at item level to ensure the optimum flow of product into the business;
fraud risk: there are internal control procedures to ensure that detailed checking is carried out in all areas of the business. The company’s management reporting systems are designed, in part, to highlight irregularities at all stages of the cycle of cash and stock whilst moving through the business, during the process of disbursement of company funds and as regards the safety and security of company assets;
operational gearing risk: in line with most retailers, the business has a largely inflexible cost base. In particular, since all our stores are leased, we are subject to increases in rental costs which have, in many cases, outstripped general inflation;
treasury risk: the main treasury risks arise from exchange rate and interest rate fluctuations. The Board manages these risks by matching currency inflows and outflows;
IT risk: the group is dependent on reliable IT systems for managing and controlling the business. The group’s IT function oversees all systems and has policies and procedures to protect software, hardware and data and to prevent unauthorised access to systems;
credit risk: The credit risk on liquid funds is limited because the counter parties are banks with high credit ratings assigned by international credit rating agencies;
liquidity risk: The group obtains funding for its operations via the group’s bank facilities. The group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts and bank loans;
interest rate risk: The group has cash at bank which is subject to variable rates of interest. Interest rate risk is regularly monitored and is not considered to be material;
cyber risk: Cyber security continues to be an area that we treat seriously. For our head office infrastructure we have firewall protection at the border, as well as antivirus and anti malware systems installed. Before email traffic even reaches us, it passes through Mimecast’s systems to filter out malicious content. Our systems are backed up in the cloud, so that we could even recover from a cryptoware attack. For our website, systems including firewalls are in place that restrict incoming traffic, ensuring that secure access is limited and that botnet and DDOS attacks are mitigated against. Credit card companies require that we demonstrate our compliance to PCI Standards.
The Directors are well aware of their duty under s172 of the Companies Act 2006 to act in the way which they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole and, in doing so, to have regards (amongst other matters) to:
The likely consequences of any decision in the long term;
The interest of the Company’s employees;
The need to foster the Company’s business relationships with suppliers, customers and others;
The impact of the Company’s operation on the community and the environment;
The desirability of the Company maintaining a reputation for high standards of business conduct; and
The need to act fairly as between members of the Company.
Two of the Directors have operational roles within the Company itself, who join their Director-designate colleagues in setting, approving and overseeing of the business strategy and related policies. Board meetings are held regularly involving all operational management where the Company’s activities are considered and decisions made. The non-operational Directors (of the Schuh entity), being Genesco Inc. board members (the parent Company) delegate authority for the day-to-day management to the Schuh operational team. All directors receive information to ensure that they have regard to section 172 when making relevant decisions.
In pursuant of the above duty the directors have put in place the following measures to engage with the wider stakeholder group to enable a decision making process that promotes the success of the Company for the benefit of its members as a whole.
Customers
We believe our first responsibility is to our customers who support the business by selecting Schuh as their destination of choice for fashion footwear. In return, we aim to offer the highest levels of customer service and care, whether our customers choose to buy in a store or online. Our commitment to service extends throughout the business and it is the duty of all employees, at any work location, to assist their colleagues in delivering the highest levels of service to our customers. Employees are empowered to take decisions which benefit service levels.
The following principal decisions made by the directors were made only after considering the input from engaging with customers;
To adhere to our Core Service Values.
To be at the forefront of the Customer Experience and to differentiate ourselves from our competition.
Workforce
We recruit those with an enthusiasm for our products and our customers. We develop them through individual coaching and personal encouragement. We provide opportunities for training and development to those who wish to progress their career. We encourage loyalty and commitment to the business by ensuring that all employees treat each other with honesty and respect. We offer fair rewards, promote from within wherever possible and encourage teamwork.
The Company has maintained its policy of consulting with or informing employees on all matters of concern to them and of information relevant to the general performance of the company Company’s performance. For further information, please refer to the Employees section of the Directors’ Report on page 6.
Employees also participated in an approved Share Incentive Plan in the year to 3 February 2024 - see the note 24 on page 48.
In the year to 3 February 2024 the Company has continued to commit substantial resource to developing its employees, aiming to encourage every employee to achieve their full potential, which in turn helps the company to achieve its own objectives.
Workforce (continued)
The following principal decisions made by the directors were made only after considering the input from engaging with employees:
After many years of in-house systems development for all HR, ancillary payroll, employee communication & engagement systems, Management have decided to replace these with a more technologically advanced all-encompassing external solution. The vendor has been chosen, with a large-scale implementation project taking place during FY25.
Suppliers
The Company seeks to act ethically, fairly and transparently and to create effective long standing relationships with suppliers that are mutually beneficial. The Company has continued to engage with key suppliers through regular contact with both the Buying and Quality Control teams and this has served to strengthen relationships and promote good business practice.
The following principal decisions made by the directors were made only after considering the input from engaging with suppliers;
To fully engage and adopt the Company’s Ethical Supplier Policy.
To fully engage and adopt the Company’s Modern Slavery Statement. The most recent statement can be found on the main Schuh website. (www.schuh.co.uk).
Environment
The Company is committed to preventing pollution and minimising the impact of its operations on the environment.
We regard the conservation of energy, raw materials and water and reducing waste to be a high priority in our business. Through employee co-operation and efficient management procedures, the company undertakes to encourage sound environmental practices throughout the business.
The following principal decisions made by the directors were made only after considering the input from engaging with environmental agencies, suppliers and purpose groups;
To include Sustainability as a key purpose pillar - see next section, Purpose.
To be a carbon neutral company which was achieved during the last financial year and continued throughout the year to 3 February 2024.
Purpose
As a business we are committed to diversity and inclusion which is channelled through our Purpose Pillars (Mental Wellness, Sustainability, LGBT+, Racial Equality, Disability Equality), both with our charity partners as well as with our employees and suppliers.
The following principal decisions made by the directors were made only after considering the input from engaging with our internal and external purpose groups;
Charity Partnership: We have partnered with Blueprint for All Trust where we not only provide an annual charitable donation but we will also be working together to support and promote their community projects throughout the UK.
Website: Our website has been updated to communicate our commitment to diversity and inclusivity (see Purpose within the main navigation).
Volunteer Work Groups: Internally, we have formed work stream groups to support each of our Purpose Pillars, comprising of staff volunteers from both head office and our stores. The team meet on a monthly basis to discuss the issues raised by the community/charity with their chosen pillar and put forward recommendations to the business for further initiatives.
Learning: We are currently receiving training on our all of our Purpose Pillars ranging from LGBT+, disability inclusion and racial equality training from the Blueprint for All. Our aim is to ensure we continue to learn from each community, our staff and charity partners.
Diversity & Inclusion in the work place: See commentary under the Employees section of the Directors’ Report on page 6.
On behalf of the board
The directors present their annual report and financial statements for the period from 29 January 2023 to 3 February 2024.
The Company has 100% ownership of an Irish entity Schuh (ROI) Limited, registered in the Republic of Ireland. This subsidiary controls ten stores and a distribution centre within Ireland.
The results for the period are set out on page 18.
No ordinary dividends were paid (2023: Nil). The directors do not recommend payment of a further dividend (2023: Nil).
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
Any research and development work would usually only be carried out by the IT function within the Company, the Notes to the Financial Accounts details a section under Accounting Policies which considers this IT development expenditure.
Applications for employment are considered based on the aptitude of prospective applicants, whether disabled or not. The group's policy is to, as far as possible, provide continued training and support to any member of staff who should become disabled but is still able to perform their job. Training and promotion opportunities for individuals will be unaffected by disability, provided they demonstrate the appropriate aptitude and ability. Schuh is an equal opportunities employer and has a Dignity at Work policy in place, which seeks to prevent any discrimination on the grounds of age; race; disability; gender reassignment; marriage or civil partnership; pregnancy and maternity; religion or belief; sex; or sexual orientation. The group consults with its employees on an annual basis at all locations and provides information to all employees on the financial and economic factors affecting the group's performance.
Political contributions
Neither the company nor any of its subsidiaries made any political donations or incurred any political expenditure during the period.
In line with the implementation of the European Directive regarding packaging waste regulations, Schuh (ROI) Limited is fully compliant through its membership of a Department of Environment approved collective compliance scheme.
The company’s directors have assessed the group’s ability to continue as a going concern for the period to January 2026. The assessment period considered by the directors’ is 12 months from the date of signing the accounts. A longer-term assessment to January 2028 has also been carried out by the directors.
Using prudent projections the group has sufficient headroom in its cash and bank facilities to continue to operate as a going concern and can meet its banking covenants.
The group has a facility with Lloyds Bank of £19 million available to November 2025 with the option to extend for a further 12 months under the terms of the facility, with discussions underway to extend these for a further 3 years. This facility is backed by a guarantee provided by the group’s parent, Genesco Inc, to the bank. This facility will be used to manage working capital throughout the going concern period. The bank requires the group to comply with the following covenants every quarter:
Net leverage: the ratio of net borrowings as at the test dates to EBITDA shall not be less than 1.75 until maturity; and
Interest cover: the ratio of EBITDA to interest for each test period shall not be less than 4.50:1.
In arriving at their conclusion on going concern management have considered the group’s ability to meet these covenants and are satisfied that all are met throughout the going concern period.
The directors have also taken the following factors into account in arriving at their conclusion:
At 3 February 2024 the group had net current assets of £59.5 million and cash of £17.2 million. At 24 October 2024 the group had cash of £13.6 million.
During the assessment period the maximum drawdown on the Lloyds facility is £6m in September 2025 being subsequently repaid after 60 days.
For the year ended 3 February 2024 the group made a profit before tax of £21.0 million and is forecast to continue to be profitable during the next financial year to 1 February 2025.
At the balance sheet date, the group had net assets of £34.5 million. An amount of £43.8 million is owed to Genesco Jersey, a fellow subsidiary. This loan is due for repayment in April 2025 and the directors have obtained a letter of support from the group's parent entity confirming funds will be made available to the company to settle the liability in April 2025.
Other than some short-term timing fluctuations in cash flow where the bank facility may be utilised, the directors believe the company will be able to operate sufficiently on self-generated cash. It is anticipated that the facility will remain undrawn at 2 February 2025.
Based on the above considerations the directors have concluded that it is appropriate to adopt the going basis in preparing the financial statements.
In accordance with the company's articles, a resolution proposing that Johnston Carmichael LLP be reappointed as auditor of the group will be put at a General Meeting.
Corporate governance statement
Schuh Limited, as part of the US-listed group Genesco Inc., places a high regard for effective corporate governance in all areas. Under The Companies (Miscellaneous Reporting) Regulations 2018, Schuh has applied the Wates Corporate Governance Principles for large private companies as its framework for disclosure regarding its corporate governance arrangements.
Details of how the Company has applied the Wates Principles throughout the year are outlined below.
Principle 1 - Purpose and Leadership
Our culture and business principles - we have adopted a range of beliefs and values that underpin the culture at Schuh and form the basis of the business principles on which the organisation is built. These are found throughout the entire organisation and focus on all areas. We have also included some of the particular Customer and Workforce examples within the Section 172 statement within the Strategic Report.
We aim to over-deliver against expectations and try not to make a promise or give an undertaking unless it is achievable. This applies equally to customers, suppliers, colleagues and other stakeholders in the business.
We encourage leadership by example. We prefer discussion and explanation rather than the issuing of orders. We respect action more than words. Everyone is encouraged to succeed, rather than being afraid to fail.
Decisions are based only on what is right for the business. No individuals or groups benefit at the expense of their colleagues or the Company. We want to achieve success but not at the expense of our integrity.
When we operate according to these values and beliefs we instinctively know that we give our business the best chance to grow and prosper.
Principle 2 - Board Composition
Our formal board of Directors is made up of both Schuh Operating Directors and those of our ultimate parent company, Genesco Inc., a US-listed company. We also have an operational board of seven Directors and Director-designates who are collectively responsible for the management and effective oversight of the Company’s business. The Leadership Team has a range of skills across the board, from relevant business degrees and professional qualifications to time-served in both the Schuh business and similar organisations in the past. We regularly review the make-up of this Leadership Team to ensure that all relevant skills are present, equally that we have a diverse and representative range of views on all operational matters, and that where a particular knowledge or experience gap may be identified this is remedied by either supplementing with advice from a group company or a skilled and relevant appointed third party.
The Managing Director leads this operational board and is responsible for ensuring that those making decisions on behalf of the company have access to all relevant information in order to inform decision-making. The operational board also has full unrestricted access to other senior management who may attend regular board meetings to update on specific areas of their expertise. They also have regular contact with the parent company operational management board, as well as access to all professional advice and services of third parties pertinent to their respective areas or to inform on best practice on general board decisions.
The board considers that its size and composition is appropriate to its function to oversee and manage the Company. There are three Directors who are also employees of the business and have operational management roles in the Company as well as an equal number of Directors who are employees in operational management roles within the parent entity. This team is then supplemented by another five Director-designates all in operational roles which between them covers all operational and business functions and areas.
Corporate governance statement (continued)
Principle 3 - Director Responsibilities
The Directors assume ultimate responsibility for all matters, and along with the senior Management Team are committed to maintaining a robust control framework as the foundation for the delivery of good governance, including the effective management of delegation through the Corporate Governance Framework.
The Board and Management Team are supported by both its parent company in all Corporate Governance matters (including an internal audit team) and other Senior Managers to make recommendations on various matters delegated to them under the Corporate Governance Framework. Management team/Board meetings are managed and controlled by the Managing Director and occur at least every four weeks if not more frequently, have formal agendas but also allow for open debate and for adequate time for all participants to consider any proposals put forward. The Finance Director and each Management Team member are collectively responsible for the provision of accurate and timely information for each and every meeting. Every meeting also allows for any other matters to be raised by all participants. Formal notes are taken at each meeting and circulated afterwards for everyone’s approval, with any key decisions being recorded.
Principle 4 - Opportunity and Risk
The Schuh operational board will regularly focus on what opportunities are being presented to the business and also regularly undertake risk reviews. There is an also an annual risk exercise undertaken as part of the internal audit process with its parent company; looking at risk for the entire group and on a global basis. We will regularly engage with relevant third parties both on exploring additional and relevant business opportunities but also to assess any unidentified risks and evaluate appropriate mitigation protocol. What we believe are the currently identifiable principal risks and uncertainties are detailed previously in the Strategic Report on page 2.
Principle 5 - Remuneration
The Company will always ensure that remuneration is reviewed on a regular basis and is commensurate with all applicable laws regarding national minimum and national living wages within each of the territories within which the business operates. The remuneration of the management team will be set in conjunction with the parent company, Genesco Inc. As well as a market view, this will also factor in Company performance and profitability.
Principle 6 - Stakeholder Relationships and Engagement
Within the Section 172 statement above as part of the overall Strategic Report, we have detailed there the business perspective on key stakeholders and areas of engagement; these being Customers, Workforce, Suppliers, Environment and Purpose.
Other stakeholder engagement
A statement on engagement with suppliers, customers and others in a business relationship with the company is included as part of the Section 172 statement; please see pages 3 and 4.
Schuh Limited has continued the appointment with Carbon Footprint Ltd, a leading carbon and energy management company, to independently assess its Greenhouse Gas (GHG) emissions in accordance with the UK Government’s ‘Environmental Reporting Guidelines: Including Streamlined Energy and Carbon Reporting Guidance’.
The GHG emissions have been assessed following the ISO 14064-1:2018 standard and have used the 2020 emission conversion factors published by Department for Environment, Food and Rural Affairs (Defra) and the Department for Business, Energy & Industrial Strategy (BEIS). The assessment follows the location-based approach for assessing Scope 2 emissions from electricity usage. The operational control approach has been used.
The table below summarises the GHG Market-Based emissions for reporting years: 1st February 2023 to 31st January 2024 and comparative 30th January 2022 to 28th January 2023.
Scope | Activity | 2023/2024 Location-Based (tCO2e) | 2023/2024 Market-Based (tCO2e) |
Scope 1 | Natural Gas | 255.36 | 255.36 |
| Site Diesel | 1.57 | 1.57 |
| Petrol | 106.00 | 106.00 |
| Diesel | 54.90 | 54.90 |
| Refrigerants | 165.21 | 165.21 |
| Scope 1 Sub Total | 583.04 | 583.04 |
Scope 2 | Electricity generation | 1,963.97 | 0.00 |
| Off-site EV charging Scope 2 Sub Total | 0.17 1,964.14 | 0.30 0.30 |
Scope 3.3 | Scopes 1 and 2 WTT | 520.92 | 85.30 |
| Transmission & Distribution | 208.24 | 0.00 |
| Off-site EV charging Upstream lorry freight | 0.02 223.43 | 0.02 223.43 |
| Upstream sea freight | 215.92 | 215.92 |
| Upstream air freight | 0.42 | 0.42 |
Scope 3.6 | Flights | 599.09 | 599.09 |
| Hotel stays | 41.67 | 41.67 |
| Rail | 25.25 | 25.25 |
| Taxi | 15.54 | 15.54 |
| Hire cars | 11.07 | 11.07 |
| Ferry Bus | 0.19 0.11 | 0.19 0.11 |
Scope 3.7 | Home-working | 72.62 | 72.62 |
| Scope 3 Sub Total | 1,934.49 | 1,290.62 |
| Total tonnes of CO2e | 4,481.67 (-9.8%) | 1,873.96 (+14.5%) |
| Total tonnes of CO2e per employee | 1.06 (-15.9%) | 0.44 (+4.8%) |
| Total tonnes of CO2e per £m turnover | 11.66 (-19.4%) | 4.88 (+2.5%) |
|
|
|
|
| Prior period |
|
|
| Total tonnes of CO2e | 4,971.05 | 1,636 |
| Total tonnes of CO2e per employee | 1.26 | 0.42 |
| Total tonnes of CO2e per £m turnover | 14.47 | 4.76 |
Energy Efficiency Actions
We have been able to decrease our overall greenhouse gas emissions again by 3.8% compared to 22/23. Although this a relatively small reduction compared with last year when we switched to a renewable energy provider, our electricity supply is now from 100% renewable sources across the estate.
We are continuing to operate a vehicle fleet made up of electric, hybrid and low emission vehicles and to conduct an ongoing program of further improvements to lighting, air-conditioning and heating to further improve our overall energy efficiency.
In addition, we are also working to improve the accuracy of our reporting system in areas such as business flights and accommodation, this process should allow us to move away from estimations towards verifiable data calculations in future.
As previously, following DEFRA guidelines, this year’s carbon assessment methodology includes scope 1, 2, and the following scope 3 categories: 3.3, 3.4, 3.6 and 3.7 (partially). The offset for our market-based emissions of 1,873.97 tonnes of carbon dioxide again includes well-to-tank emissions and an offset for the lifetime emissions associated with the manufacture, distribution and end-of-life recycling for our eCommerce mailbags, assessed using ISO 14047 methodology. Offsets will be carried out in FY25 via investment in two projects, which both focus on carbon removal:
1767 tCO2e offset through a reforestation of degraded forest project in Ghana (VC2410)
142 tCO2e offset through the Guanare forest plantation project in Uruguay (VC959)
As in previous years, we have been able to plant more trees; through our work with the World Land Trust Plant a Tree Programme we have planted another 7,750 trees and an additional 7,950 trees via Ecologi reforestation projects, to further help in the continuing process of removing more CO2 from the atmosphere.
Schuh has also raised significant funds that have been directed to the World Land Trusts Buy an Acre scheme; initial sales of a WLT branded tote bag have been used to protect 375 acres of threatened habitat.
With ongoing improvement in the measurement, reduction and offsetting of carbon emissions our business has maintained its Carbon Neutral Organisation status for the period to 3 February 2024.
Activity | 2023/2024 | 2022/2023 |
Total energy consumed (kWh) | 11,524,567 | 13,481,967 |
Total Gross Market-Based Emissions (tCO2e) | 591 | 1,636 |
Carbon offsets (tCO2e) | 591 | 1,636 |
Total Net Market-Based Emissions (tCO2e) | 0.00 | 0.00 |
We have audited the financial statements of Schuh Limited (the 'parent company') and its subsidiaries (the 'group') for the period ended 3 February 2024 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
We assessed whether the engagement team collectively had the appropriate competence and capabilities to identify or recognise non-compliance with laws and regulations by considering their experience, past performance and support available.
All engagement team members were briefed on relevant identified laws and regulations and potential fraud risks at the planning stage of the audit. Engagement team members were reminded to remain alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
We obtained an understanding of the legal and regulatory frameworks that are applicable to the group and the parent company and the sector in which they operate, focusing on those provisions that had a direct effect on the determination of material amounts and disclosures in the financial statements. The most relevant frameworks we identified include:
UK Generally Accepted Accounting Practice
Companies Act 2006
Corporation Tax Legislation (UK and ROI)
VAT Legislation
National Minimum Wage Act 1998
We gained an understanding of how the group and the parent company are complying with these laws and regulations by making enquiries of management and those charged with governance including management and those charged with governance of component entities where necessary. We corroborated these enquiries through our review of submitted returns, external inspections, relevant correspondence with regulatory bodies and board meeting minutes.
We assessed the susceptibility of the group’s and parent company’s financial statements to material misstatement, including how fraud might occur, by meeting with management and those charged with governance to understand where it was considered there was susceptibility to fraud. This evaluation also considered how management and those charged with governance were remunerated and whether this provided an incentive for fraudulent activity. We considered the overall control environment and how management and those charged with governance oversee the implementation and operation of controls. In areas of the financial statements where the risks were considered to be higher, we performed procedures to address each identified risk. We identified a heightened fraud risk in relation to:
Management override of controls
Revenue recognition
In addition to the above, the following procedures were performed to provide reasonable assurance that the financial statements were free of material fraud or error:
Reviewing minutes of meetings of those charged with governance for reference to: breaches of laws and regulation or for any indication of any potential litigation and claims; and events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud;
Reviewing the level of and reasoning behind the group’s and parent company’s procurement of legal and professional services
Performing audit procedures over the risk of management override of controls, including testing of journal entries and other adjustments for appropriateness, evaluating the business rationale of significant transactions outside the normal course of business and assessing judgements made by management in their calculation of accounting estimates for potential management bias;
Performing audit procedures over the recognition of revenue including testing a sample of key controls, performing data analytics procedures and testing the assumptions used by management in their calculation of cut off in relation to sales returns and internet sales goods-in-transit estimates;
Completion of appropriate checklists and use of our experience to assess the group’s and parent company’s compliance with the Companies Act 2006; and
Agreement of the financial statement disclosures to supporting documentation.
Extent to which the audit is considered capable of detecting irregularities, including fraud (continued)
Our audit procedures were designed to respond to the risk of material misstatements in the financial statements, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve intentional concealment, forgery, collusion, omission or misrepresentation. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.
Use of our report
This report is made solely to the parent company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the parent company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the parent company and the parent company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s profit for the year was £20,871k (2023 - £12,208k profit).
Schuh Limited (“the company”) is a private limited company domiciled and incorporated in Scotland. The registered office is 1 Neilson Square Deans Industrial Estate Deans, Livingston West Lothian EH54 8RQ, Scotland.
The group consists of Schuh Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £'000.
The financial statements have been prepared under the historical cost convention, modified to include certain tangible fixed assets carried at deemed cost. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102 and has taken advantage of the exemption available from the requirement to present a company only cash flow statement and related notes and disclosures.
The consolidated group financial statements consist of the financial statements of the parent company Schuh Limited together with all entities controlled by the parent company (its subsidiaries).
All financial statements are made up to 3 February 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
The company’s directors have assessed the group’s ability to continue as a going concern for the period to January 2026. The assessment period considered by the directors’ is 12 months from the date of signing the accounts. A longer-term assessment to January 2028 has also been carried out by the directors.
Using prudent projections the group has sufficient headroom in its cash and bank facilities to continue to operate as a going concern and can meet its banking covenants.
The group has a facility with Lloyds Bank of £19 million available to November 2025 with the option to extend for a further 12 months under the terms of the facility, with discussions underway to extend these for a further 3 years. This facility is backed by a guarantee provided by the group’s parent, Genesco Inc, to the bank. This facility will be used to manage working capital throughout the going concern period. The bank requires the group to comply with the following covenants every quarter:
Net leverage: the ratio of net borrowings as at the test dates to EBITDA shall not be less than 1.75 until maturity; and
Interest cover: the ratio of EBITDA to interest for each test period shall not be less than 4.50:1.
In arriving at their conclusion on going concern management have considered the group’s ability to meet these covenants and are satisfied that all are met throughout the going concern period.
The directors have also taken the following factors into account in arriving at their conclusion:
At 3 February 2024 the group had net current assets of £59.5 million and cash of £17.2 million. At 24 October 2024 the group had cash of £13.6 million.
During the assessment period the maximum drawdown on the Lloyds facility is £6m in September 2025 being subsequently repaid after 60 days.
For the year ended 3 February 2024 the group made a profit before tax of £21.0 million and is forecast to continue to be profitable during the next financial year to 1 February 2025.
At the balance sheet date, the group had net assets of £34.5 million. An amount of £43.8 million is owed to Genesco Jersey, a fellow subsidiary. This loan is due for repayment in April 2025 and the directors have obtained a letter of support from the group's parent entity confirming funds will be made available to the company to settle the liability in April 2025.
Other than some short-term timing fluctuations in cash flow where the bank facility may be utilised, the directors believe the company will be able to operate sufficiently on self-generated cash. It is anticipated that the facility will remain undrawn at 2 February 2025.
Based on the above considerations the directors have concluded that it is appropriate to adopt the going basis in preparing the financial statements.
The company prepares its financial year end to the Saturday closest to 31 January. For the current reporting period this has resulted in the financial statements being prepared for the period from 29 January 2023 to 3 February 2024. The comparative financial statements, prepared on the same basis, cover the period from 30 January 2022 to 28 January 2023 and as a result the comparative results (including related notes) are not directly comparable. The current period represents 53 week (2023: 52 week) trading period.
Turnover represents the fair value of the consideration received or receivable for goods supplied in the ordinary course of the group’s activities. Turnover is shown net of sales/value added tax, returns, rebates and discounts.
Revenue recognition
Revenue is recognised to the extent that the group obtains the right to consideration in exchange for its performance. Revenue is measured at the fair value of the consideration received, excluding discounts, rebates, VAT and other sales taxes or duty. The following criteria must also be met before revenue is recognised.
the significant risks and rewards of ownership of the goods have passed to the buyer, usually on receipt of the goods;
the amount of revenue can be measured reliably;
it is probable that the economic benefits associated with the transaction will flow to the entity; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from interest income is recognised as interest accrues using the effective interest method. Revenue from dividends is recognised when the group's right to receive payment is established.
Revenue represents the amounts (excluding value added tax) derived from the sale of goods to customers, net of discounts, during the period.
All turnover revenue relates to the sale of goods.
Other operating income - rental income
Leases in which the Group does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms and is included in other income. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
The carrying amounts of the entity's non-financial assets, other than stocks and deferred tax assets, are reviewed at each reporting date to determine whether there is an indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generate cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the "cash-generating unit"). The goodwill acquired in business combination, for the purpose of impairment testing is allocated to cash-generating units, or ("CGU") that are expected to benefit from the synergies of the combination. For the purpose of goodwill impairment testing, if goodwill cannot be allocated to individual CGU's or groups of CGU's on a non-arbitrary basis the impairment of goodwill is determined using the recoverable amount of the acquired entity, or if it has been integrated then the entire group of entities into which it has been integrated.
An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGU's are allocated first to reduce the carrying amount of any goodwill allocated to the units, and then to reduce the carrying amounts of the other assets in the unit (group of units) on a pro rata basis.
An impairment loss is reversed if and only if the reasons for the impairment have ceased to apply. Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include certain debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Financial assets are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including certain creditors, bank loans, and loans from fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs.
Dividend distribution to the company’s shareholders is recognised as a liability in the financial statements in the reporting period in which the dividends are declared.
Tax on the profit or loss for the period comprises current and deferred tax. Tax is recognised in the profit and loss account except to the extent that it relates to items recognised directly in equity or other comprehensive income, in which case it is recognised directly in equity or other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the period, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustments to tax payable in respect of previous periods.
Deferred tax is provided on timing differences which arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in the financial statements. The following timing differences are not provided for: differences between accumulated depreciation an d tax allowances for the cost of a fixed asset if and when all conditions for retaining the tax allowances have been met; and differences relating to investments in subsidiaries, to the extent that it is not probable that they will reverse in the foreseeable future and the reporting entity is able to control the reversal of the timing difference. Deferred tax is not recognised on permanent differences arising because certain types of income or expense are non-taxable or are dis-allowable for tax or because certain tax charges or allowances are greater or smaller than the corresponding income or expense.
Deferred tax is provided in respect of the additional tax that will be paid or avoided on differences between the amount at which an asset (other than goodwill) or liability is recognised in a business combination and the corresponding amount that can be deducted or assessed for tax. Goodwill is adjusted by the amount of such deferred tax.
Deferred tax is measured at the tax rate that is expected to apply to the reversal of the related difference, using tax rates enacted or substantively enacted at the balance sheet date. Deferred tax balances are not discounted.
A defined contribution plan is a post-employment benefit plan under which the group pays fixed contributions into a separate entity and will have no legal or constructive obligations to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an expense in the profit and loss account in the periods during which services are rendered by employees.
The group's parent issues equity settled share-based payments to certain employees which must be measured at fair value and recognised as an expense in the profit and loss account with a corresponding increase in equity (treated as a capital contribution from the parent company).
The fair values of these payments are measured at the dates of grant using pricing models, taking into account the terms and conditions upon which the awards are granted. The fair value is recognised over the period during which employees become unconditionally entitled to the awards subject to an estimate of the number of awards which will lapse, either due to employees leaving employment prior to vesting or due to non-market based performance conditions not being met.
Leases in which substantially all the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases are charged to profit or loss on a straight-line basis over the period of the lease.
In accordance with the requirements of FRS 102, lease incentives are recognised over the term of the lease.
Operating lease
Payments (excluding costs for services and insurance) made under operating leases are recognised in the profit and loss account on a straight-line basis over the term of the lease unless the payments to the lessor are structured to increase in line with expected general inflation; in which case the payments related to the structured increases are recognised as incurred. Lease incentives received are recognised in the profit and loss account over the term of the lease as an integral part of the total lease expense.
Finance lease
Minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability using the rate implicit in the lease. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent rents are charged as expenses in the periods in which they are incurred.
Company
Transactions in foreign currencies are initially recorded in the entity’s functional currency by applying the spot exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date. All differences are taken to the profit and loss account.
Group
Each entity in the group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.
The assets and liabilities of overseas subsidiary undertakings are translated into the presentational currency at the rate of exchange ruling at the balance sheet date. Income and expenses for each statement of comprehensive income are translated at exchange rates at the dates of transaction.
All resulting exchange differences are recognised in other comprehensive income, in retained earnings.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
IT development expenditure is capitalised in accordance with the accounting policy given below. Initial capitalisation of costs is based on management's judgement that development enhances the technical capabilities of the software and economic feasibility is confirmed, usually when a product development project has reached a defined milestone according to an established project management model. In determining the amounts to be capitalised management makes assumptions regarding the expected future cash generation of the assets and the expected period of benefits.
The directors consider in-house IT development expenditure more efficient and cost effective than outsourcing essential projects. The development of systems can be too time sensitive to risk competing for time and results with clients of an external IT development provider. The directors deem that this expenditure provides access to future economic benefits for three years, after which time they are considered obsolete as a stand-alone asset, or have been replaced by subsequent investment in improvements.
The carrying value included within these financial statements for IT developments which have been internally generated is £945k (2023: £874k).
IT developments costs which have been capitalised within the reporting period are in relation to the following key projects:
a) In store POS
Sales driven enhancements to the schuh EPOS system to incorporate a new payment provider, Web discount integration and improvements to user interface to allow more functionality.
b) Distribution Centre
During the year we installed an automated Mini Load Storage System at our primary warehouse. The integration of this system required significant development of our inventory management IT systems. This allows us not only to maximise the use of space at our warehouse but to benefit from improved efficiency of despatch and receipt of inventory.
c) Website Improvement - Checkout
In order to maximise checkout completion rate the user journey has been enhanced and refined delivering a more “on brand” experience. This project is expected to increase checkout completion and as a result sales.
d) Website Improvement - Navigation
Developed an introduced improved functionality to the existing website to drive better customer engagement and satisfaction. Improvements include category filtering of Kids product allowing customers the ability to view product by age category and a “postcode first” approach to present to customers only the appropriate delivery and collection options available for them.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
The group establishes a reliable estimate of the useful life of goodwill and intangible assets arising on business combinations. This estimate is based on a variety of factors such as the expected use of the acquired business, growth rate, discount rate, the expected usual life of the cash generating units to which the goodwill is attributed, any legal, regulatory or contractual provisions that can limit useful life and assumptions that market participants would consider in respect of similar businesses.
Where there are indicators of impairment of individual assets, the group performs impairment tests based on an value in use calculation. The value in use calculation is based on a discounted cash flow model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the group is not yet committed to or significant future investments that will enhance the asset's performance of the cash generating unit being tested. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as expected future cash flows and the growth rate used for extrapolation purposes. The discount rate used by the group in an impairment assessment is in line with that used by the wider Genesco group.The growth rates used for the stores in the model vary depending on store type (adult, kids etc) but these rates are in line with the assumptions made in long term (5 year planning) models.
The group has introduced a customer loyalty programme that allows customers to redeem points for discounts on future purchases. At the period end an estimate is made of the expected level of loyalty points that will be redeemed. Historical redemption rates are used in reaching this estimate. The redemption rate is most impacted by engagement with customers through the loyalty app and in-store customer service.
The group provides for returns on purchases for up to one year from the transaction date. At the period end an estimate is made of the expected returns from transactions in the period. Historic return rates, timescales and transactions data are used in reaching this estimate. The return estimate is most sensitive to changes in the timescale of customer returns. The sales return assumption is based on historical return rates from the prior financial year.
The average monthly number of persons (including directors) employed by the group and company during the period was:
Their aggregate remuneration comprised:
Wages and salaries costs include £219k (2023: £271k) in respect of share-based payment expenses.
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 1 (2023 - 2).
The number of directors who are entitled to receive shares under long term incentive schemes during the period was 2 (2023 - 2).
The actual charge for the period can be reconciled to the expected charge for the period based on the profit or loss and the standard rate of tax as follows:
A change in the UK Corporation tax rate from 19% to 25% took effect from 1 April 2023.
The group will be impacted by the new global Pillar Two 15% minimum tax rules. The management is currently reviewing their processes and assessing the impact that the rules will have on the amount of tax assets and liabilities recognised.
During the year, the company invested additional funds into Schuh (ROI) Limited. 1 Ordinary share of £1 (1.3 Euro) was issued by Schuh (ROI) Limited to the company for cash at a premium of £14.2m (16.6m Euro).
Details of the company's subsidiaries at 3 February 2024 are as follows:
Group
The stock provision loss included in profit and loss is £683k (2023: Loss of £696k). Included within the stock balance is a right of return asset of £360k (2023: £616k).
Company
The stock provision loss included in profit and loss is £594k (2023: Loss of £611k). Included within the stock balance is a right of return asset of £337k (2023: £571k).
The group has had a £19m Revolving Credit Facility (RCF) with Lloyds Banking Group from 2nd November 2022. The RCF is a 3 year facility with an option to extend for a further two, one year periods and discussion are already underway with Lloyds to formalise an extension. Interest is charged is 2.35% plus the Bank of England SONIA (Sterling Overnight Index Average) rate and charged on a monthly basis.
The company has no outstanding drawing on the Lloyds facility at the balance sheet date.
On 14th April 2020, Genesco UK Limited refinanced its loan notes listed on the International Stock Exchange. During the year to January 2021, Schuh Limited declared a dividend distribution of £50,000,000 to Genesco UK Limited and Genesco UK Limited issued a new £36,461,107 note payable to Genesco Jersey Limited with an interest rate of 3.4% and a maturity date of April 2025. At the period end, the amount outstanding by Schuh Limited to Genesco Jersey Limited was £43,728,493 (2023: £50,000,000) and interest is charged on a monthly basis. The debt is listed on The International Stock Exchange.
Onerous leases
The group recognises a provision for lease obligations where the trading income from the stores is not expected to fully cover the lease costs committed to.
The credit recognised in the income statement in respect of onerous lease provisions of £3,220k (2023: nil) represents a release of previously recognised losses following a projected improvement in the trading performance of impacted stores.
Retail returns
The group recognises a provision in relation to expected sales returns. The expected timing of outflow is within 3 months from the reporting date.
The following are the major deferred tax liabilities and assets recognised by the group and company, and movements thereon:
The group had estimated UK trade losses of £nil (2023: £nil) available for carry forward and offset against future trading profits.
Other deferred income is in respect of rent free period accruals. The deferred income is included in the financial statements as follows:
A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.
Scheme details and movements
Employee Restricted Stock
On 30 August 2016 certain employees were included within the Genesco Inc restricted stock plan. Restricted shares are allocated to Schuh employees as part of a long term incentive scheme. The shares can be exercised over a period between 3 to 4 years if the employee remains in service at each anniversary, with an equal amount exercised each year. The exercise price of the stock is equal to the average share price on the date of grant. There is no cash alternative.
Genesco Inc. set an average stock price (based on a 30-day period) in the run up to the annual vesting/granting date of the end of June each year. This share price (converted at the actual exchange rate as of that same date) is then used to value any grants, exercising and forfeitures/cancellations within that year. The outstanding value at the end of each year is therefore a weighted average of the opening position and a reflection of the movements within the year.
During the period, certain employees were included within the Genesco Inc performance share units plan. Performance share units are allocated to Schuh employees as part of a long term incentive scheme. The units can be exercised after a period of 3 years if the employee remains in service and divisional performance targets have been met. There is no cash alternative.
A reconciliation of the movement in share options during the period were as follows:
The expense recognised during the current and prior period relates to restricted shares. No share based payment expense was recognised during the period in relation to performance share units based on the projections for the performance targets.
The holders of Ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the company. Both classes of shares have the same rights.
Share premium reserve
The share premium account represents the difference between the par value of the shares issued and the subscription or issue price.
Capital redemption reserve
The capital redemption reserve arose on the buy-back purchase of shares by the company in previous periods.
Profit and loss reserves
Retained earnings represent accumulated profits and losses less distributions and transfers from other reserves.
Revaluation reserve
The revaluation reserve is the remaining balance of a revaluation of Neilson Square on 30th March 1997 using the open market value basis.
Contributed equity
The contributed equity reserve represents the future liability of Schuh employee share options maturing and the expected issue price of the Genesco Inc shares.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Group
The amount of non-cancellable operating lease payments recognised as an expense during the period was £24,580k (2023: £26,354k).
Company
The amount of non-cancellable operating lease payments recognised as an expense during the period was £21,539k (2023: £23,216k).
At the reporting end date the group had contracted with tenants for the following minimum lease payments:
Group and company
Total contingent rents recognised as income in the period are £108k (2023: £140k).
The remuneration of key management personnel is as follows.
The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party transactions or balances between two or more members of a group, provided that any subsidiary which is party to the transaction is wholly owned by such a member.