koovs plc report and financial statements

71 Pages·2017·1.1 MB·English

K
O
O
V
S

P
L
C

R
E
P
O
R
T

A
N
D

F
IN
A
N
C
IA
L

S
T
A
T
E
M
E
N
T
S

2
0
1
7
KOOVS PLC
REPORT AND FINANCIAL STATEMENTS
2 0 1 7
CONT ENTS

1 CORPORATE INFORMATION
2 CHAIRMAN’S STATEMENT
5 STRATEGIC REPORT
16 BOARD OF DIRECTORS
17 CORPORATE GOVERNANCE REPORT
19 DIRECTORS’ REPORT
22 DIRECTORS’ REMUNERATION REPORT
27 STATEMENT OF DIRECTORS’ RESPONSIBILITIES
28 INDEPENDENT AUDITOR’S REPORT
30 CONSOLIDATED INCOME STATEMENT
31 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
32 CONSOLIDATED STATEMENT OF FINANCIAL POSITION
33 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
34 CONSOLIDATED STATEMENT OF CASH FLOWS
35 COMPANY STATEMENT OF FINANCIAL POSITION
36 COMPANY STATEMENT OF CHANGES IN EQUITY
37 COMPANY STATEMENT OF CASH FLOWS
38 NOTES TO THE FINANCIAL STATEMENTS
KOOVS PLC REPORT AND FINANCIAL STATEMENTS 2017
CORPORATE INFORMATION

1
CORPORATE INFORMATION

Directors
Lord Waheed Alli Chairman
Mary Turner Chief Executive Officer
Robert Bready Chief Creative Officer
Robert Pursell Chief Financial Officer
Anant Nahata Non-executive Director
Baroness Gail Rebuck DBE Non-executive Director
Emily Sheffield Non-executive Director
Nominated advisor
Peel Hunt LLP
Moor House
120 London Wall
London EC2Y 5ET
Auditors
BDO LLP
55 Baker Street
London W1U 7EU
Bankers
Barclays Bank PLC
27 Soho Square
London W1D 3QR
Solicitors
Foot Anstey LLP
Salt Quay House
4 North East Quay
Sutton Harbour
Plymouth PL4 0BN
Registered office
York House
23 Kingsway
London WC2B 6UJ
Registered in England number: 08166410
Corporate information
Further information, including the AIM Admission document, is available on the Koovs plc corporate website at:
www.KOOVS.COM/corporate
KOOVS PLC REPORT AND FINANCIAL STATEMENTS 2017
CHAIRMAN’S STATEMENT

22
CHAIRMAN’S STATEMENT

satisfaction in our sector (Redseer Net Promoter
Score). In addition, we have completed the deployment
of a new microservices technology platform which is
spearheading our ‘mobile first’ strategy and is already
providing innovative operational benefits, enabling
the business to tap into new technology tools such
as automated visual merchandising and
promotions engine.
This has been a year of significant progress towards
our objectives to increase our share of the youth
fashion market in India from 4% to over 10% and to
Dear Shareholders,
build Koovs into India's number one Western fashion
destination by 2020.
I am pleased to report that the financial year ended
31 March 2017 has been a year of significant growth I am extremely excited about the Group’s prospects for
and continued strategic progress towards our goals. the new financial year, remaining resolutely focused on
our strategic objectives. We recognise that our growth
FY17 has delivered gross order value growth of 87% to
must be sustainable, and have set targets for continued
INR 1616m (£18.6m) and a year-on-year increase of
improvement in gross margin and a reduction in
100% in both units shipped and repeat customers. This
operational costs in FY18, leading to our goal of
growth is also underlined by a continued and
profitability and positive cash flow in FY20.
consistent improvement in our gross margin position.
I would like to take this opportunity to thank all our
Importantly, we have delivered these strong results
colleagues in the UK and India for their continuing hard
during a challenging period in the Indian market
work, dedication and enthusiasm.
following demonetisation, announced on 8 November
2016. This impacted the whole Indian economy Waheed Alli
including e-commerce and Koovs rapid response and Chairman
proactive approach to mitigate the initial impact of
6 September 2017
demonetisation, along with a strong Christmas trading
period, has meant that the Company has been able to
deliver growth significantly above (more than 5x) the
Indian e-commerce market as a whole.
The market for online western fashion is forecast to
grow rapidly to $3.5 billion by 2020 and with the
continued growth of India’s digitally connected,
aspirational middle class, Koovs is extremely well
positioned to benefit from this impetus.
In FY17 Koovs successfully raised capital of £39.1m and
added two new strategic investors, The Times of India
Group and The Hindustan Times, two of the largest
media Groups in India.
This funding has enabled Koovs to continue to build
the brand efficiently through hyper-targeted marketing
that is connecting and resonating with the young,
urban and style-conscious customer and has
established Koovs as the leading brand in its category
for customer engagement across social media.
Furthermore, our continued focus on customer
operations has also delivered rewards, with Koovs now
independently rated as number one for customer
KKOOOOVVSS PPLLCC RREEPPOORRTT AANNDD FFIINNAANNCCIIAALL SSTTAATTEEMMEENNTTSS 22001177
3

PLACE HOLDER
OUR AMBITION IS TO BE THE
NUMBER ONE WESTERN FASHION
DESTINATION IN INDIA BY 2020
KOOVS PLC REPORT AND FINANCIAL STATEMENTS 2017
4

KOOVS PLC REPORT AND FINANCIAL STATEMENTS 2017
STRATEGIC REPORT

5
STRATEGIC REPORT

OPERATING REVIEW
KOOVS is the leading online western fashion destination for 20-somethings in India,
the world’s fastest-growing major economy.
The Market
India - the right place at the right time
Demographic Dividend
With a 1.3bn population and 65% under the age of Middle Class Doubling by 2020
35, India’s demographics position is compelling.
160m to 325m 100%
A growing middle class with spending power and the
Urban Middle Class
increasing concentration in urban areas are fuelling a
forecast growth in GDP of 6-7% a year. 35% of Urban Population
Young Population
43% Aged 15-39

Digital investment
India is undergoing a digital transformation with Networks
$3bn government investment in fibre, $34bn in 4G
$3bn Fibre Networks
mobile networks. In addition, the $16bn Digital India
programme will transform the economy, with the Mobile
aim to create a digital identity for every citizen.
$34bn 4G
India is also adopting technology at a significant
Digital India
pace with 385 million people connected on
broadband and over 250 million smartphone users $16bn Transformation
in 2016 and predicted to rise by 40% and 60%
Internet Users
respectively by 2020.
430m 600m 40% by 2020
"India is on the cusp of a massive digital transformation"
ARUN JATLEY, FINANCE MINISTER
KOOVS PLC REPORT AND FINANCIAL STATEMENTS 2017
STRATEGIC REPORT
CONTINUED
6
STRATEGIC REPORT
CONTINUED

E-commerce E-tail acceleration
With this as a backdrop, e-commerce, lifestyle and
$15bn $60bn 300%
online western fashion are sectors that are gathering
significant pace with e-tail forecast to grow 300% to Retail market
$60bn by 2020, online Lifestyle up 400% to $15bn and
$0.6tn $1.1tn 85%
Online Western Fashion up 500% to $3bn in the
Lifestyle share of e-tail
same time frame.
$3bn $15bn 400%
(2016) (2020)
Retail & E-tail Growth Lifestyle & Western Fashion Online Growth
$1.1tn $15bn
Etail $60bn
Retail $0.6tn $3.5bn
E-Western
E-Lifestyle
$15bn
$0.6bn
2014 2015 2016 2017 2018 2019 2020
2014 2015 2016 2017 2018 2019 2020

Koovs Customers FEMALE 61%
For KOOVS customers this means providing affordable
20% 62%
and aspirational, design-led online western fashion,
SETTLED IN JOB STUDENT &
curated for the style-conscious 18-34 Indian customer EARLY JOBBERS
from an authentic fashion authority they respect, with
extensive credentials in the western and global 27-30 15-26
Years Years
fashion markets.
SETTLED IN JOB
>30
18%
Years
MALE 39%
17% 70%
SETTLED IN JOB STUDENT &
EARLY JOBBERS
27-30 15-26
Years Years
SETTLED IN JOB
>30
13%
Years
KOOVS PLC REPORT AND FINANCIAL STATEMENTS 2017
7

OBJECTIVES & STRATEGY
KOOVS strategy is focused on four pillars to achieve scalable growth. During FY17 we have already attained
significant milestones against these objectives:
EXPAND > PRODUCT RANGE
• 40% of sales is currently Koovs Private Label and
together with selected edits from famous brands
that are exclusive to Koovs, 70% of lines are now
unique to Koovs across the site.
• Koovs continues to demonstrate our fashion
credentials and leadership with high-profile designer
collaborations. Four exclusive collections were
launched during FY17 with Manish Arora, Hattie
Stewart, Gauri & Nainika and Masaba. These highly
successful, standout collections have further
amplified Koovs clear position as the affordable
fashion authority in India.
MANISH ARORA HATTIE STEWART GAURI & NAINIKA MASABA
ENGAGE> CONTENT

• Content browsing sessions are 25% more likely to
convert to sales, and KOOVS.COM now generates
approximately 1.5 million content browsing sessions a
year. Our exclusive reports from the top fashion
catwalks, street style picks from key cities and global
events, how to wear videos, celebrity ‘in the style of’
guides and user generated content, have established
Koovs as the leading brand in our peer group for
social customer engagement with over two million
followers and over one million logging in to participate
in a single campaign.
• Investment in the customer experience and care
means Koovs is now rated No.1 for customer
satisfaction in our peer group, with the leading
average Net Promoter Score in our category
(RedSeer).
UGC CUSTOMER POST
KOOVS INSTAGRAM TEAM BOLLYWOOD – NEMA SHARMA
KOOVS PLC REPORT AND FINANCIAL STATEMENTS 2017
STRATEGIC REPORT
CONTINUED
8
STRATEGIC REPORT
CONTINUED
AMPLIFY> BRAND

• Koovs brand awareness among its core 18 to
34-year-olds in India has increased from less than
1% in 2015 to 15% in FY17. In March 2017 phase three
of the ‘Step Into Koovs’ brand campaign
commenced, lifting web traffic by 50% and peaking
for the first time at two million in a single week.
• KOOVS.COM was also named 'The Most Popular
Fashion Portal with Youth' by the Global Youth
Marketing Forum in February 2017.
• Koovs now has over two million social followers,
including 400,000 on Instagram and industry-
leading engagement of more than 3x the nearest
competitor in our category. We are innovating and
leading in the use of social media, such as Koovs
pioneering use of platforms like Facebook Live.
EXTEND> TERRITORY

• Our focus remains on the considerable growth
opportunity in our home market India. However,
we have identified a number of territories with
significant growth potential and these include the
Middle East and Asia-Pacific. Koovs will be piloting
projects to cost-effectively enter these markets
leveraging local partners and expertise. The first
international distribution agreement is with Amazon-
owned SOUQ.com to launch the Koovs Private Label
Collection in the Middle East during the Summer 2017.
KOOVS PLC REPORT AND FINANCIAL STATEMENTS 2017