1Basis of preparation

The company

Swift & Hale plc (the company) is a public company limited by shares, incorporated and domiciled in England and Wales under company number 01234567. Its registered office is Hale House, Fordington Fields, Dorchester, Dorset DT1 9SH. Its ordinary shares are admitted to the equity shares (commercial companies) category of the Official List and traded on the Main Market of the London Stock Exchange.

The company and its subsidiaries (together the group; the subsidiaries are listed in note C6) sell walking and camping clothing, footwear and equipment, and services such as boot fitting, repairs, hire and led walks, through 128 stores in the United Kingdom and the Republic of Ireland and online.

Accounting framework

The consolidated financial statements are prepared in accordance with UK-adopted international accounting standards and the Companies Act 2006 as it applies to companies reporting under those standards. They use the historical cost basis, except for derivatives, which are measured at fair value.

The financial year ends on the Saturday nearest to 31 January. FY26 is the 52 weeks ended 31 January 2026 and FY25 the 52 weeks ended 1 February 2025, so the periods are directly comparable. Amounts are in pounds sterling, the company’s functional currency, in millions to one decimal place unless stated otherwise. The policies in note 2 have been applied consistently to both periods, and the comparatives have not been restated.

Adjusted measures on the face of the income statement are alternative performance measures. They are not defined by IFRS and are explained and reconciled on page 124.

Going concern

The directors have assessed whether the group and the company can continue in operation to 30 April 2027, more than 12 months after these financial statements were approved, using the forecasts behind the viability statement on page 52.

At 31 January 2026 the group had cash of £36.4m, no borrowings and a £40m revolving credit facility, undrawn and committed to September 2028 with an option to extend (note 22). Cash moves with the stock bought for each season and is lowest in the autumn, once stock has been built for winter and Christmas.

The base case comes from the FY27 budget approved by the board and the plan for the two years after. It includes six store openings in FY27, capital expenditure of £24m to £26m and dividends in line with the existing policy, and the group holds cash at every month end without drawing on the facility.

The severe but plausible downside combines two wet summers in a row, with sales 8% below plan in both years; a cyber attack that shuts online sales for four weeks, losing £12m of sales and adding £3m of costs; and a consumer downturn that takes like-for-like sales down 6%. Before any mitigating action, liquidity headroom stays above £25m and the facility is not needed. A reverse stress test shows that sales would have to be more than 20% below plan for the whole period, with no mitigating action, before the group drew on the facility, which the directors consider remote. If trading fell further, they could slow openings and refits, buy less stock for later seasons, and reduce or suspend dividends.

The directors therefore have a reasonable expectation that the group and the company have adequate resources to continue in operation to 30 April 2027, and have prepared the financial statements on the going concern basis. They have not identified any material uncertainty about the ability of the group or the company to continue as a going concern.

Climate change

The directors have considered the risks and opportunities set out in the climate-related financial disclosures on page 40, and the group’s targets of a 90% cut in Scope 1 and 2 market-based emissions by FY30 against FY22 and net zero across the value chain by 2045.

The store impairment forecasts (note 16) include the planned cost of carbon reduction projects such as heat pumps and electric delivery vans. The transition plan does not shorten the useful lives of store fixtures or distribution centre equipment. Nine stores and the distribution centre have some exposure to flooding, and the risk at the distribution centre is low. No carrying amount needed adjusting. The emissions targets do not create a present obligation, so the costs of meeting them are recognised as capital expenditure or operating costs when incurred.

Basis of consolidation

The consolidated financial statements include the company and the entities it controls. All subsidiaries are wholly owned and prepare accounts to the same date under the group’s accounting policies. Intra-group balances, transactions and unrealised profits are eliminated in full. The company controls the Swift & Hale Employee Benefit Trust (the EBT), so the EBT is consolidated and the shares it holds are deducted from equity (note 26).

Foreign currency

Foreign currency transactions are recorded at the rate on the date of the transaction, and monetary balances are retranslated at the closing rate, with differences taken to the income statement. The functional currency of Swift & Hale (Ireland) Limited is the euro. Its income and expenses are translated at average rates and its assets and liabilities at the closing rate, with the differences recognised in other comprehensive income.

New standards applied in the year

The amendments to IAS 21 on lack of exchangeability applied for the first time in FY26. They had no effect, because sterling, the euro and the US dollar are freely exchangeable. No other new standard, amendment or interpretation had a material effect.

Standards issued but not yet effective

IFRS 18 Presentation and Disclosure in Financial Statements replaces IAS 1 for periods beginning on or after 1 January 2027. The group will first apply it in the 52 weeks ending 29 January 2028 (FY28), with FY27 restated as the comparative. IFRS 18 does not change recognition or measurement, so reported profit, net assets and cash flows will not change. For the group, the main effects on presentation and disclosure will be:

• income and expenses will be classified as operating, investing, financing, income tax or discontinued, with new subtotals for operating profit and for profit before financing and income taxes. Interest on lease liabilities (£5.9m in FY26) will be financing and interest on cash deposits (£1.1m) investing, and the group expects operating profit to stay close to the figure it reports today;
• adjusted operating profit and adjusted profit before tax are expected to be management-defined performance measures, disclosed in a single audited note with a reconciliation to the nearest IFRS subtotal and the tax effect of each adjusting item;
• because the income statement presents costs by function, the notes will show the depreciation, amortisation, employee benefits, impairment and inventory write-downs within each line; and
• the cash flow statement will start from operating profit. The group already presents interest paid as financing and interest received as investing, as IFRS 18 requires.

The Chief Financial Officer leads the work to map income and expenses to the new categories and prepare the systems and data for the new disclosures, overseen by the Audit and Risk Committee.

From FY27 the group will also apply the amendments to IFRS 9 and IFRS 7 on the classification and measurement of financial instruments and on contracts referencing nature-dependent electricity, and the Annual Improvements to IFRS Accounting Standards (Volume 11). None is expected to have a material effect, and the electricity amendments do not affect the group because it has no power purchase agreements.

2Material accounting policy information

These are the policies the directors consider material. Policies for particular balances are also described in the relevant notes.

Revenue

Revenue is the amount the group expects to receive for goods and services, net of VAT, discounts, members’ prices and expected returns. Store sales are recognised at the till. Online sales, including catalogue orders placed online or by telephone, are recognised when the goods are delivered or collected from a store, and delivery charges on the same basis.

Customers may return unused goods within 60 days. The group holds a refund liability in accruals for sales it expects to refund, and an asset in inventories for its right to recover the goods, both based on recent return rates for each channel.

Service revenue comes from paid fitting services such as custom footbeds, repairs, hire, and led walk fees paid by non-members. Repair revenue is recognised when the repaired item is returned to the customer, hire revenue (including reduced-rate hire to schools and youth groups) over the hire period, and led walk fees on the day of the walk. The cost of free repairs for Club members, and of the lifetime repair promise on Hale waterproofs and packs, is charged when the work is done (note 3).

Club repair credits and gift cards

Club members earn repair credits worth 2% of qualifying purchases. They can spend them on repairs outside the free repair promise, such as repairs to other brands’ kit, on hire and on new kit. Credits issued from 1 May 2025 expire 18 months after issue; earlier credits expired after 12 months.

The credits give members a material right. The group allocates part of each qualifying sale to the credits earned, based on their relative stand-alone selling price after allowing for credits expected not to be used. That amount is held as a contract liability (note 21) until the credits are used. Gift cards are valid for 24 months, and the cash received is held as a contract liability until the card is used.

Expected breakage, the value expected never to be used, is recognised as revenue in proportion to redemptions, and any remaining balance is released when a credit or card expires. The breakage rate is estimated from redemption history by month of issue and reviewed every six months.

Supplier income

Volume rebates from third-party brands reduce the cost of inventories once it is highly probable they have been earned, and reach the income statement as the stock is sold. Amounts due at the year end are in other receivables. Marketing contributions that reimburse specific costs are deducted from those costs. Supplier income is not material.

Classification of operating costs

Cost of sales includes the cost of goods sold, inbound freight and duty, inventory write-downs and stock losses, and the direct costs of repairs, hire and led walks. Selling and distribution costs include store and distribution centre colleagues, property costs, depreciation of store and distribution assets, online fulfilment and delivery, card fees and marketing. Administrative expenses are head office costs.

Leases

The group leases most of its stores, the distribution centre at Huntworth, delivery vans and some equipment, and recognises a right-of-use asset and a lease liability at the start of each lease. Payments are discounted at an incremental borrowing rate set for each lease by its length, currency and type of asset, because the rate implicit in a property lease cannot readily be determined. The lease term includes periods after a break the group is reasonably certain not to use (note 3).

Right-of-use assets are depreciated on a straight-line basis over the lease term and tested for impairment with the other assets of the store. The liability is remeasured when the term changes, a rent review changes the payments or the lease is modified, with a matching adjustment to the asset. When a lease is surrendered, the asset and liability are derecognised and the difference, with any premium paid, is taken to the income statement. Rents that vary with store sales, and leases of 12 months or less or of low-value assets, are expensed as incurred.

Property, plant and equipment

Property, plant and equipment is stated at cost, including the fit-out of new stores, less depreciation and impairment. Freehold land and assets under construction are not depreciated. Other assets are depreciated on a straight-line basis to their residual value over:

• freehold buildings: 50 years;
• leasehold improvements: the shorter of the lease term and 10 years;
• store fixtures and fittings: 5 to 10 years;
• distribution centre automation and equipment: 7 to 10 years;
• computer hardware: 3 to 5 years.

Tents, packs, boots and other hire kit are held in fixtures, fittings and equipment and depreciated over two to three years, because hire kit wears out quickly. Retired hire kit is scrapped or refurbished and sold through Hale Again, with any proceeds taken to cost of sales. Costs before a store opens, such as recruitment, training and rent during fit-out, are expensed unless they form part of the fit-out.

Goodwill and other intangible assets

Goodwill is not amortised and is tested for impairment every year. Software, including the external and internal costs of developing systems the group controls, is amortised on a straight-line basis over 3 to 7 years from when it is ready for use. Software not yet in use is tested for impairment every year. The cost of configuring or customising software-as-a-service arrangements is expensed as the service is received, unless it creates a separate asset that the group controls.

Impairment of non-financial assets

Each store is a separate cash-generating unit. Where a store shows signs of impairment, or that an earlier impairment should be reversed, its recoverable amount is estimated as the higher of value in use and fair value less costs of disposal. A reversal cannot take the assets above the carrying amount they would have had with no impairment. Goodwill impairment is never reversed.

Inventories

Inventories are finished goods for resale, stated at the lower of weighted average cost and net realisable value. Cost includes the purchase price, inbound freight, duty and other costs of bringing stock to its present location, less supplier rebates.

The provision for slow-moving, discontinued and obsolete stock is based on each line’s age, its rate of sale and the margin achieved when similar stock was cleared before. Inventories are also reduced for expected stock losses since the last count. Hale Again kit is held at the cost of buying and refurbishing it. Spare parts for the repair benches, such as zips, buckles and tent pole sections, are held in inventories and expensed when used.

Financial instruments

Trade and other receivables are measured at amortised cost less expected credit losses, using the simplified approach for trade receivables. Trade and other payables are measured at amortised cost. Cash and cash equivalents are cash at bank and in hand and deposits available on demand.

The group buys US dollars forward to fix the sterling cost of stock bought in dollars. It does not apply hedge accounting, so the contracts are measured at fair value from forward exchange rates (level 2), with changes taken to cost of sales. It does not hold or issue derivatives for trading.

Taxation

Current tax uses rates enacted or substantively enacted at the balance sheet date. Deferred tax is provided on temporary differences at the rates expected when they reverse. For each lease, deferred tax is recognised separately on the right-of-use asset and the lease liability, and the balances are offset because they relate to the same tax authority.

Share-based payments

The Long Term Incentive Plan (LTIP), the deferred bonus share plan and Sharesave are all equity-settled. The fair value of each award at grant is charged on a straight-line basis over the vesting period, with a matching credit to retained earnings. The charge is adjusted for the number of awards expected to vest against conditions not linked to the share price. For the relative total shareholder return condition, the likelihood of vesting is built into the fair value at grant and the charge is not adjusted. Employer’s National Insurance on awards is accrued over the vesting period at the year-end share price.

Pensions

The group has defined contribution pension arrangements only. Contributions are charged to the income statement as they fall due.

Provisions

The group’s provisions are for property. The dilapidations provision covers the cost of returning leased properties to their original condition. It builds up over the life of each lease, based on surveyors’ estimates of the cost per square foot. The group also provides for rates, service charges and other costs on vacated property. Provisions due after more than one year are discounted where the effect is material.

Adjusting items

The group reports adjusted operating profit, adjusted profit before tax and adjusted earnings per share alongside the statutory measures. Adjusting items are income or costs that the directors present separately because of their size or nature, so that readers can follow trading from one period to the next. They include:

• store impairment and reversals of earlier impairment, which are always presented together;
• the costs of major restructuring, including opening new distribution facilities and leaving old ones;
• profits and losses on the sale of property; and
• other one-off items above £1.0m, such as the settlement of a significant legal claim.

The tax effect of each item is also an adjusting item. Recurring costs, such as store pre-opening and refit costs and the cost of closing a store when its lease ends, are not. The Audit and Risk Committee reviews the classification at each half year and year end. Note 7 analyses the items, and page 124 explains the alternative performance measures.

Cash flow statement

The cash flow statement uses the indirect method, starting from cash generated from operations (note 29). Interest received is an investing cash flow. Lease payments (principal and interest) and other interest and facility fees are financing cash flows. Payments for short-term and low-value leases and variable rents are operating cash flows.

Own shares and dividends

Shares held by the EBT are deducted from equity at cost, and the cost is transferred to retained earnings when awards vest and the shares are released. Final dividends are recognised when approved by shareholders, and interim dividends when paid.

3Critical judgements and estimates

The directors make judgements in applying the accounting policies and estimates about the future. Estimates are based on past experience and other factors the directors consider reasonable, and are reviewed regularly. Actual results may differ.

Critical judgements

Classifying adjusting items is a judgement. The directors consider whether an item falls outside normal trading and whether including it would distort the trend in results. In FY26 they presented the net store impairment of £1.5m and the £0.8m cost of leaving the former distribution centre at Poundbury as adjusting items (note 7). Because impairments and reversals are always presented together, a reversal reduces the total of adjusting items and cannot increase adjusted profit.

For leases with break or extension options, the directors judge whether the group is reasonably certain to stay, taking account of the store’s profitability, recent investment in it and the cost of moving. Most store leases run for ten years with a tenant break after five. Where a store is profitable and was refitted recently, the lease is measured to its full term; otherwise the term runs to the break. Each of the 41 lease events (expiries, breaks and rent reviews) due in the next two years is reassessed as it approaches.

Each store is a separate cash-generating unit because its cash inflows are largely independent of other stores. Online orders collected in a store are included in its cash flows, and other online sales are not allocated to stores. The distribution centre, website and app, and head office are corporate assets: their running costs are allocated to stores in proportion to sales, and the assets themselves are tested at group level.

Club repair credits give members a material right, because a member earns them only by making a purchase. Part of the transaction price is therefore deferred until the credits are used or expire. Members’ prices are a discount on the sale in which they are given and are deducted from revenue at that point.

The free repair promise on own-brand kit for Club members and the lifetime repair promise on Hale waterproofs and packs go beyond repairing manufacturing defects. The directors have judged that the stand-alone value of the expected repairs for each item sold is small, and that the revenue deferred if the promises were treated as separate performance obligations would not be material, so repair costs are expensed as incurred. The group completed 48,000 repairs in FY26 (FY25 39,000), including paid repairs, and the directors will revisit this judgement each year as volumes grow.

Key sources of estimation uncertainty

Store value in use depends on forecast sales, gross margin, store costs and the discount rate. A reasonably possible change in store sales or gross margin could materially change the carrying amount of store assets within the next financial year: store sales 10% below plan would add £2.4m to the impairment charge (note 16).

The provision for slow-moving and obsolete stock was £4.1m (FY25 £3.6m) (note 17). The main uncertainty is how much stock left at the end of a season will sell at full price in the next, which depends partly on the weather, and how deep the discounts need to be on the rest. Provision rates 10% higher would add £0.4m.

Other estimates

These estimates involve judgement but are not expected to cause a material adjustment within the next year:

• breakage on Club repair credits and gift cards, at a weighted average expected rate of 4.4% (FY25 4.6%), with limited history for credits issued under the 18-month rule. A one percentage point change in the rate would change revenue by about £0.1m (note 21);
• dilapidations, based on surveyors’ estimates of the cost of restoring each property. A 10% change in those estimates would change the provision by about £0.5m (note 23);
• the incremental borrowing rate for each new lease, estimated from market rates for the lease term adjusted for the group’s credit standing and the property. A rate half a percentage point higher on leases starting in FY26 would have cut the lease liabilities and right-of-use assets recognised by about £0.4m; and
• the share-based payment charge, which depends on how many awards are expected to vest against adjusted EPS and strategic targets (note 27).

4Segment information

The Executive Committee, led by the Chief Executive, is the chief operating decision maker. It reviews sales, gross margin and adjusted operating profit for the group as a whole and allocates resources across the whole business.

Stores and online share one stock pool, one distribution centre, the Club and the same customers, many of whom use both channels for one purchase. The group therefore has one operating segment, whose results, assets and liabilities are those in the primary statements. Revenue is analysed in note 5, and no single customer accounts for 10% or more of it. Non-current assets other than deferred tax are located as follows:

Non-current assets in the Republic of Ireland rose with the opening of the Westport store, Co. Mayo, in FY26.

5Revenue

All revenue comes from contracts with customers. Sales of goods, repairs, fitting services and led walks are recognised at a point in time, and hire over the hire period, which is usually a few days.

Online revenue covers orders through the website, the app and the catalogue, including the 41% of online orders collected in store. Revenue by destination is based on where the customer receives the goods or service.

Of the contract liability of £3.2m at 1 February 2025, £2.9m was recognised as revenue in FY26. The group expects to recognise the balance at 31 January 2026 within two years, most of it within twelve months. Note 21 shows redemptions and breakage for the year.

6Operating profit

Operating profit is stated after charging:

Auditor’s remuneration

Fees payable to Penrose Lyle LLP and its associates for services to the group were:

The only non-audit service was the review of the interim results, an audit-related assurance service. Its fee was 10.5% of the audit fee (FY25 10.9%). The Audit and Risk Committee’s policy on non-audit services is on page 70.

7Adjusting items

The policy is in note 2 and the judgement in note 3. All adjusting items are within operating profit.

Net store impairment

The annual review of store assets (note 16) found four stores that could not support their carrying amounts, and two stores, impaired in FY23, where trading has improved for more than a year. The net charge of £1.5m is £0.9m against right-of-use assets and £0.6m against property, plant and equipment, and has no effect on cash.

Exit costs for the former distribution centre

All stores and online orders have been served from Huntworth since March 2025. The group left the former warehouse at Poundbury, Dorchester, in September 2025 and surrendered the lease. The £0.8m covers the premium paid to the landlord, dilapidations and clearing the building, less the gain on derecognising the remaining lease liability and right-of-use asset.

Distribution centre dual running in FY25

In FY25 the group spent £1.7m running Huntworth and Poundbury side by side while stock and stores moved across, on temporary labour, property costs for both sites and transport between them.

Tax on adjusting items

The tax credit is less than 25% of the pre-tax amount because most of the impairment of right-of-use assets, and of fit-out costs that did not qualify for capital allowances, attracts no tax relief.

8Employees and directors

Staff costs, including the executive directors, were:

Wages and salaries rose by 6.1%, with a full year of colleagues at Huntworth, six new stores and the 6.7% increase in the National Living Wage in April 2025. Every colleague is paid at least the real Living Wage. Note 27 analyses the share-based payment charge and note 28 covers pensions.

The average monthly number of colleagues, including the executive directors, was as follows. Many store colleagues work part time, so the full-time equivalent number is lower.

Directors’ remuneration

Amounts are in thousands of pounds. The FY26 gains on long-term incentive awards relate to the 2023 LTIP award, whose performance period ended in the year, valued at 312p per share, the three-month average share price used in the directors’ remuneration report. Two directors (FY25 two) received pension contributions or cash in lieu. Full details are on page 74.

9Finance income and costs

Finance income is interest on bank deposits, which rose with higher average cash balances. Lease interest rose because the Huntworth lease ran for a full year and new store leases started. Facility costs are commitment fees on the undrawn revolving credit facility and amortised arrangement fees (note 22).

10Taxation

The effective tax rate is above the UK rate of 25% mainly because most of the store impairment attracts no tax relief. On adjusted profit before tax the rate is 24.7% (FY25 25.8%), slightly below 25% because profits in the Republic of Ireland are taxed at 12.5%.

Tax paid was £6.9m (FY25 £6.3m). No tax was recognised in other comprehensive income or directly in equity in either period. The group’s revenue is well below the €750m threshold for the OECD Pillar Two minimum tax rules, so they do not apply. Deferred tax is measured at 25% in the UK, where the main rate is not expected to change, and at 12.5% in the Republic of Ireland.

11Earnings per share

Basic earnings per share uses the weighted average number of shares in issue, excluding shares held by the EBT. Diluted earnings per share adds the shares expected to be issued or released under the LTIP, the deferred bonus share plan and Sharesave. Adjusted earnings per share excludes adjusting items and their tax effect (note 7) and is an alternative performance measure.

There were 91,600,000 shares in issue throughout both periods. The weighted average fell because the EBT bought shares in the year (note 26).

12Dividends

The proposed final dividend of 6.2p per share would bring the total for FY26 to 9.2p (FY25 8.4p). If shareholders approve it at the AGM on 18 June 2026, it will be paid on 3 July 2026 to shareholders on the register on 29 May 2026. The EBT has waived its right to dividends.

The company pays dividends from its distributable reserves (£57.9m at 31 January 2026, note C5), which are replenished by dividends from Swift & Hale Retail Limited. The FY26 dividend is covered 2.8 times by adjusted basic earnings per share, within the board’s policy of 2.5 to 3 times.

13Goodwill and other intangible assets

Goodwill

Goodwill of £6.2m arose in 2011 on the acquisition of Bothy Outdoor Limited, which had nine stores in Scotland. Its trade moved into Swift & Hale Retail Limited and Bothy is now dormant. Management monitors the goodwill across the group’s 15 Scottish stores, and it is tested at that level.

The value in use of the Scottish stores was calculated with the same forecasts, pre-tax discount rate of 11.8% and long-term growth rate of 2% as the store review in note 16. It exceeded their carrying amount, including goodwill, by a wide margin, and no reasonably possible change in the assumptions would lead to an impairment.

Software

Additions include £2.9m for the new merchandise planning system, which goes live in FY27, and further work on the website and app. Software not yet in use, and so not yet amortised, was £4.0m at 31 January 2026 (FY25 £1.1m). Disposals are fully amortised systems the group no longer uses.

14Property, plant and equipment

Additions cover the fit-out of six new stores, 14 refits, eight new repair benches and further automation at Huntworth.

Freehold land and buildings are the head office at Hale House and the Dorchester store, and include £2.4m of land that is not depreciated. Fixtures, fittings and equipment include assets under construction of £1.2m (FY25 £0.9m).

Disposals are mainly fixtures replaced in refits and the fittings of the Swindon and Reading stores, which closed when their leases ended. The impairment is the net charge from the store review in note 16.

15Leases

The group leases all its stores except Dorchester, as well as the Huntworth distribution centre, delivery vans and some equipment. Store leases usually run for ten years with a tenant break after five, with rent reviews every five years, mostly to open market value. The Huntworth lease runs to 2044.

Right-of-use assets

Additions and remeasurements include the leases for the six new stores and lease renewals and rent reviews at existing stores, net of the reduction from surrendering the Poundbury lease (note 7). The weighted average incremental borrowing rate on leases starting in FY26 was 6.1% (FY25 5.8%).

Lease liabilities

The contractual maturity of the undiscounted lease payments was:

Other lease amounts

Some store leases include rent linked to the store’s sales above a set level. These payments are not in lease liabilities and are charged with short-term and low-value lease payments (note 6). The group does not sublet any property and received no rent concessions in either period.

Total cash paid for leases was £27.9m (FY25 £22.0m), of which £26.7m (FY25 £21.0m) was paid against lease liabilities: £20.8m of principal and £5.9m of interest. Leases signed but not yet started are described in note 31.

16Impairment of store assets

At each balance sheet date the group reviews every store for signs of impairment, such as falling store contribution, trading below budget or a lease nearing its end, and for signs that an earlier impairment should be reversed. In FY26 there were indications at 19 stores (FY25 14), and the value in use of each was estimated.

Approach

The carrying amount of each store includes its right-of-use asset, leasehold improvements, and fixtures and fittings. Lease liabilities are excluded from the carrying amount, and lease payments from the cash flows.

Cash flows for the first three years come from the FY27 budget and the board-approved plans for FY28 and FY29. They cover store sales, gross margin, colleague and other store costs, and an allocation of distribution and central costs. After FY29, cash flows grow at a long-term rate of 2% a year (FY25 2%) to the end of the lease, with no renewal assumed.

Main assumptions

• Store sales come from each store’s recent trading, local factors such as new competition or roadworks, and the group’s plan. Most stores are forecast to grow like-for-like sales by 2% to 4% a year.
• Gross margin starts from each store’s actual margin, adjusted for planned growth in own-brand sales.
• Colleague costs reflect planned increases in the National Living Wage and the real Living Wage. Other costs rise by 2% to 3% a year.
• The pre-tax discount rate is 11.8% (FY25 12.4%), derived from the group’s weighted average cost of capital and adjusted for the risks of a single store. It fell because of lower market interest rates and a lower equity beta for the group.

Results

Four stores were impaired by £2.1m in total, £1.3m against right-of-use assets and £0.8m against property, plant and equipment, to a recoverable amount of £3.4m. At two stores impaired in FY23, trading has improved for more than a year and the forecasts now support a higher value, so £0.6m of the earlier impairment was reversed: £0.4m to right-of-use assets and £0.2m to property, plant and equipment. There was no impairment or reversal in FY25.

Sensitivity

The directors consider the following changes reasonably possible. Each figure is the additional impairment across all stores if that assumption changed on its own:

The four stores impaired this year are carried at their recoverable amount, so any adverse change in their forecasts would add to their impairment. The goodwill test is described in note 13.

At 31 January 2026 the group’s market capitalisation of about £286m comfortably exceeded its net assets of £131.4m, so there is no sign of impairment of the group’s assets as a whole, including corporate assets not allocated to stores.

17Inventories

The cost of inventories expensed and the write-down to net realisable value are shown in note 6. The provision for slow-moving and obsolete stock was 4.4% of gross stock (FY25 4.1%). It rose mainly for summer camping lines left over after the wet August, and £1.1m of it was used in the year against stock cleared or written off.

Inventories grew by 5.7%, less than the 6.8% growth in revenue. Holding stock for stores and online in one pool at Huntworth has cut the stock each store needs, which offset the stock bought for the six new stores.

Inventories include the group’s right to recover goods that customers are expected to return, and Hale Again stock. No inventory is pledged as security.

18Trade and other receivables

Trade receivables are mainly amounts due from card acquirers for recent sales, and invoices to schools, youth groups and outdoor centres for hire. Other receivables include supplier rebates and amounts recoverable from landlords. Prepayments are mainly rates, service charges and software licences paid in advance. The allowance for expected credit losses is below £0.1m in both years, amounts more than 90 days past due are not material, and carrying amounts approximate fair value.

19Cash and cash equivalents

Cash is held in current accounts and instant-access deposits with the group’s principal banks, Wessex Mutual Bank and Northgate Bank, and none is restricted. With no borrowings (note 22), net cash, an alternative performance measure, equals cash and cash equivalents.

20Trade and other payables

Trade payables are mainly for stock. Other taxation and social security is mainly VAT and payroll taxes. Accruals include the refund liability for expected returns, holiday pay, bonuses and goods received but not yet invoiced. Contract liabilities are analysed in note 21. Carrying amounts approximate fair value. The group does not use supplier finance arrangements.

21Contract liabilities

Contract liabilities are Club repair credits and gift cards that customers have not yet used, and are included in trade and other payables (note 20).

The balance rose because the Club grew to 2.1 million members (FY25 1.8 million) and because credits issued since 1 May 2025 stay valid for 18 months instead of 12.

Breakage uses a weighted average expected rate of 4.4% (FY25 4.6%), based on redemption history by month of issue. There is less history for credits issued under the 18-month rule, so the directors will review the rate again at the half year. Note 3 gives the sensitivity.

22Borrowings and facilities

The group had no borrowings at 31 January 2026 or 1 February 2025.

The £40m multi-currency facility has an option to extend and was undrawn throughout FY26 and FY25. Drawings would bear interest at SONIA, or the equivalent euro rate, plus a margin that varies with leverage. A commitment fee is payable on the undrawn amount (note 9).

Two financial covenants are tested every six months on figures that exclude the effect of IFRS 16: net debt to EBITDA of no more than 2.5 times, and fixed charge cover of at least 1.75 times. With net cash of £36.4m, the group met both with wide headroom at every test date.

Swift & Hale Retail Limited is the borrower and the company guarantees its obligations. The facility is unsecured.

23Provisions

Property provisions are dilapidations of £4.7m (FY25 £4.6m) and rates, service charges and other costs on vacated property of £0.6m (FY25 £0.7m).

Amounts used in FY26 include settlements at the closed Swindon and Reading stores and the former Poundbury warehouse. Releases arose where landlords settled for less than the amounts provided. The current portion is expected to be used within a year, and the non-current portion as the relevant leases end, mostly within ten years.

24Deferred tax

The £0.3m fall in the net deferred tax asset is the deferred tax charge in note 10. Lease timing differences are the net of the liability on right-of-use assets and the asset on lease liabilities.

The directors expect the group to make enough taxable profit to recover the asset. Most of the lease and share-based payment differences will reverse over more than one year as leases run their course and awards vest. There are no material unrecognised deferred tax balances.

25Financial instruments and risk

Categories of financial instruments

Carrying amounts approximate fair value. Prepayments, contract liabilities and tax balances are not financial instruments and are excluded. The only instruments measured at fair value are forward foreign exchange contracts, which are level 2 because their value comes from observable forward rates. Their fair value was below £0.1m at both balance sheet dates, so they are not shown, and there were no transfers between levels.

Lease liabilities are the only liabilities arising from financing activities. Their movements, including cash flows and non-cash changes, are in notes 15 and 30.

Financial risk management

The board sets the treasury policy and the Chief Financial Officer runs it day to day. The policy does not allow speculative transactions. The main financial risks are foreign currency, liquidity and credit risk. With no borrowings, interest rate exposure is limited to the interest earned on cash.

Foreign currency risk

About 38% of cost of goods is bought in US dollars, mainly own-brand products. The group buys dollars forward up to 12 months ahead to fix the sterling cost of each season’s range before it sets selling prices. Policy is to cover 75% to 90% of forecast dollar purchases for the next six months and 25% to 50% for the six months after. About 80% of FY26 dollar purchases were covered. At 31 January 2026 the group held contracts to buy US$61m (FY25 US$55m), all maturing within 12 months.

If the dollar had been 10% stronger against sterling throughout FY26, the higher cost of purchases not covered by forward contracts would have cut profit before tax by about £1.4m before any change in selling prices. A 10% weaker dollar would have raised it by a similar amount. Year-end dollar balances, mainly trade payables, are small.

The group earns euro revenue in the Republic of Ireland (£37.6m in FY26) and pays most Irish store costs in euro. The net exposure is small and is not hedged.

Interest rate risk

Cash earns floating rates, and a one percentage point change in rates would change finance income by about £0.3m a year at the average cash balance. Lease liabilities carry fixed rates set at the start of each lease. Drawings under the revolving credit facility would bear floating rates.

Liquidity risk

The group forecasts cash daily for the next 13 weeks and monthly for three years, and keeps enough cash and committed facilities for its needs at the seasonal low point in the autumn. Trade payables, accruals and other payables all fall due within one year at their carrying amounts, and the maturity of lease liabilities is in note 15. Going concern is covered in note 1.

Credit risk

Most sales are paid for at the time of purchase, so credit risk from customers is low. The main exposures are to the banks holding the group’s cash and to card acquirers. The group deposits cash only with banks rated A- or better and limits the amount held with any one bank. The maximum exposure is the carrying amount of financial assets in the table above.

Capital management

The group’s capital is its equity of £131.4m (FY25 £117.8m) and its net cash. The board aims to keep net cash through the year, so that the group can fund its plans without borrowing. Its priorities, in order, are investment in stores, repair and systems; a progressive dividend covered 2.5 to 3 times by adjusted earnings; and returning surplus cash to shareholders. It will consider buying back shares if net cash stays above about £30m through the seasonal low point. The facility covenants (note 22) are the only externally imposed capital requirements.

26Share capital and reserves

The company has one class of share, ordinary shares of 1p each, each carrying one vote and an equal right to dividends. No shares were issued or cancelled in FY26 or FY25. Share premium of £12.4m is the amount received for shares above their nominal value.

Own shares

The EBT bought 425,000 shares in FY26 for £1.3m (FY25 £0.6m) and released 195,000 (FY25 95,000) to satisfy long-term incentive and deferred bonus awards that vested. Its holding at 31 January 2026, 0.9% of the issued share capital, cost £2.6m and was worth £2.7m at the year-end share price of 312p. The EBT has waived its right to dividends.

Other reserves

The merger reserve arose in 2014, when the company became the holding company of the group ahead of its listing, and the capital redemption reserve on the redemption of preference shares at the same time. Neither is distributable.

27Share-based payments

The share-based payment charge was £1.3m (FY25 £1.1m): £0.9m for the LTIP (FY25 £0.8m), £0.3m for Sharesave (FY25 £0.2m) and £0.1m for the deferred bonus share plan (FY25 £0.1m). All awards are equity-settled and satisfied with shares the EBT buys in the market.

Long Term Incentive Plan

LTIP awards are conditional share awards to the executive directors and senior managers. They vest after three years, subject to continued employment and performance. For awards granted in FY26, 50% depends on growth in adjusted earnings per share, 30% on total shareholder return against the FTSE SmallCap Index excluding investment trusts, and 20% on strategic measures for repairs and carbon reduction. Executive directors must hold vested shares for a further two years. Participants receive the value of dividends paid during the vesting period on shares that vest.

Awards granted in FY26 had a weighted average fair value of 250p per share (FY25 228p). Because participants receive dividend equivalents, the parts subject to earnings and strategic conditions are valued at the share price at grant. The total shareholder return part was valued with a Monte Carlo model using these inputs:

Expected volatility is based on the company’s share price over the three years before grant. Most awards that lapsed in FY26 were the part of the 2022 award that missed its performance conditions, and the rest were held by leavers. The weighted average remaining contractual life of outstanding awards is 1.2 years (FY25 1.2 years).

Sharesave

UK colleagues can save up to £500 a month for three years and then buy shares at a discount of up to 20% to the market price when the contract started. In FY26, 34% of eligible colleagues took part. At 31 January 2026 there were options outstanding over 560,000 shares (FY25 510,000) at a weighted average exercise price of 238p (FY25 226p). Options are valued with the Black-Scholes model.

Deferred bonus share plan

One third of any annual bonus earned by the executive directors is deferred into shares for three years. The awards have no further performance conditions and are valued at the share price at grant.

28Retirement benefits

The group provides defined contribution pensions for its UK and Irish colleagues, including an auto-enrolment scheme through an independent master trust. It contributes up to 5% of salary, and the executive directors receive the same rate, as a contribution or as cash in lieu. The pension charge is in note 8. Contributions of £0.3m (FY25 £0.3m) were unpaid at the year end and are in accruals. The group has no defined benefit obligations.

29Cash generated from operations

Higher operating profit and the rise in payables, which reflects the timing of spring stock deliveries, more than covered the increase in inventories.

30Analysis of net debt

Net cash, an alternative performance measure, is cash and cash equivalents less borrowings and excludes lease liabilities. Lease cash flows are principal of £20.8m and interest of £5.9m. New leases and interest are non-cash movements.

31Commitments and contingent liabilities

Capital expenditure contracted but not provided for at 31 January 2026 was £2.4m (FY25 £1.9m), mainly for the fit-out of stores opening in FY27 and further automation at Huntworth.

At 31 January 2026 the group had signed agreements for leases at four of the six stores it plans to open in FY27. These leases had not started, so they are not in lease liabilities. Their undiscounted payments total £5.9m over ten-year terms.

The company guarantees the obligations of Swift & Hale Retail Limited under the undrawn revolving credit facility. The group had no contingent liabilities at 31 January 2026 or 1 February 2025.

32Related party transactions

Transactions between group companies are eliminated on consolidation and are not disclosed here. Key management personnel are the members of the board and the Executive Committee. Their compensation was:

Directors’ remuneration is set out in note 8 and on page 74. Directors and Executive Committee members may buy goods on the same terms as other colleagues, including the colleague discount, and the amounts were not material. The group funded the EBT’s share purchases in the year. There were no other related party transactions in FY26 or FY25.

33Events after the reporting period

The board proposes a final dividend for FY26 of 6.2p per share, about £5.6m, subject to approval at the AGM on 18 June 2026. It is not recognised as a liability at 31 January 2026 (note 12). There have been no other events since the balance sheet date that require adjustment or disclosure.