FY Results Show Impact of Pandemic and New Accounting Standard

  • Shoe Zone expects to report a £14.6m loss before tax for FY 2020
  • Revenues expected at £122.6m, down from £162m in 2019
  • New accounting standard IFRS 16 impacted the financial statements
  • No dividend will be paid for FY20 due to debt repayment prioritization
  • 460 stores at end of period, 10 Big Box stores opened and 40 closed
  • CEO Anthony Smith: ‘future survival of the business is ensured’
  • Uncertainty in wider economy makes predicting future outlook difficult

Shoe Zone has announced that it expects to report a statutory loss before tax of approximately £14.6 million for the financial year ending October 3, 2020, an increase from £11.3 million in 2019. Revenues are anticipated at around £122.6 million, down from £162 million the previous year. The increased loss before tax is due to the adoption of the new accounting standard IFRS 16 (Leases) and not a result of trading guidance changes. No dividend will be paid for FY20 as debt repayment takes priority. Shoe Zone ended with 460 stores, opening ten Big Box stores and closing 40 due to pandemic restrictions. CEO Anthony Smith states the business’s future is ensured but predicting the outlook remains challenging due to economic uncertainty.

Factuality Level: 9
Factuality Justification: The article provides accurate and objective information about Shoe Zone’s financial performance and future plans. It cites specific numbers and explains the reason for the increase in loss before tax, discusses store openings and closures during the pandemic, and mentions the lack of dividend payment. The CEO’s statement acknowledges uncertainty in the wider economy.
Noise Level: 3
Noise Justification: The article provides relevant information about Shoe Zone’s financial performance and its impact from the pandemic. It also mentions the company’s plans for the future. However, it lacks in-depth analysis or exploration of long-term trends or possibilities.
Financial Relevance: Yes
Financial Markets Impacted: Shoe Zone’s stock price and retail sector
Financial Rating Justification: The article discusses Shoe Zone’s financial performance, including a significant increase in loss before tax and changes in revenue due to the adoption of a new accounting standard. It also mentions the company’s plans for debt repayment and future uncertainty in the economy.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article.

Reported publicly: www.retailsector.co.uk