IAS 1 paras 134,135, capital management including facilities and covenant disclosures

Dunelm Group plc – Annual report – 2 July 2022

Industry: retail

17. Financial risk management (extract)


The Group considers equity plus debt as capital. There are no externally imposed capital requirements on the Group.

The Board’s objective with respect to capital management is to ensure the Group continues as a going concern in order to optimise returns to shareholders. The Board regularly monitors the level of capital in the Group to ensure that this can be achieved.

The Company has a syndicated RCF of £185m which is committed until 9 December 2025, which may be extended by a maximum of a further two years at Dunelm Group plc’s request, subject to lender consent. There is also an optional accordion facility of £75m. The terms of the RCF are consistent with normal practice and include covenants in respect of leverage (Group net debt to be no greater than 2.5x Group EBITDA before exceptional items) and fixed charge cover (Group EBITDAR before exceptional items to be no less than 1.75x Group fixed charges), both of which were met comfortably as at 2 July 2022 as shown below. In addition, the Company maintains £10m of uncommitted overdraft facilities with one syndicate partner bank.

The gearing ratio and banking covenants were as follows:

* Adjusted EBITDA for 2022 definitions is EBITDA excluding Right of Use Asset Depreciation.