Blacks Leisure Group plc
440/450 Cob Drive, Swan Valley
Northampton  NN4 9BB 
T: +44 (0)1604 597000  F: +44 (0)1604 597171
Shareholder helpline: 0871 664 0300
Email: info@blacksleisure.co.uk
www.blacksleisure.co.uk
Annual Report and Accounts
for the year ended 26 February 2011
Stock Exchange Code: BSLA
Focused 
on the future
Blacks Leisure Group plc Annual Report and Accounts for the year ended 26 February 2011
20321.04   10/06/2011   Proof 5 20321.04   10/06/2011   Proof 5 www.blacks.co.uk www.millets.co.uk
With a heritage dating back to 1861, Blacks 
Leisure Group plc (‘Blacks Leisure’) operates in 
the retail of Outdoor and Boardwear clothing and 
equipment in the United Kingdom, Channel Isles 
and Ireland.
Welcome to 
Blacks Leisure Group plc
Blacks Leisure Group plc  Annual Report and Accounts 2011
Exit from non-core Boardwear segment to be 
completed by half year
New banking facilities agreed up to  
November 2012
Julia Reynolds to join as new Chief Executive
Significant reduction in loss before tax to £5.3m 
(2010: £43.6m) and in loss before tax and 
exceptional items to £6.6m (2010: £14.4m)
New stores performing strongly
Focused on the Outdoors
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01 Stock Exchange Code: BSLA
Group at a Glance 02
Chairman’s Statement 04
Chief Executive’s Review 08
Financial Review 10
Corporate Social Responsibility 14
Directors and Advisors  16
Corporate Governance Statement  18
Directors’ Remuneration Report 22
Directors’ Report and Business Review 26
Independent Auditors’ Report 32
Consolidated Statement of Comprehensive Income 33
Consolidated Balance Sheet 34
Consolidated Cash Flow Statement 35
Consolidated Statement of Changes in Equity  36
Notes to the Financial Statements 37
Company Balance Sheet 74
Notes to the Company Financial Statements 75
Five Year Summary 79
Contents 00 00 www.blacks.co.uk www.millets.co.uk 02
Blacks Leisure Group plc  Annual Report and Accounts 2011
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Group at a Glance 
Outdoor segment Store fascias
“For the first time in many years, we were 
able to open new stores and these have 
performed strongly”
Neil Gillis, Chief Executive
The heritage of Blacks can be traced back 
to 1861. Today, and as one of the leading 
Outdoor retailers in the UK, Blacks offers 
some of the most prominent and high-
quality Outdoor proprietary brands as well as 
developing and selling its own-label specialist 
brands such as Technicals and ALS. 
Blacks
Number of stores at 26 February 2011
Total revenue for the year ended 26 February 2011
Revenue: £194.8m
■	 Blacks (31.8%)
 98
■	 Millets (65.3%)
 201
■	 Freespirit (2.9%) 
 9
■	 Blacks (42.2%)
 £85.2m
■	 Millets (49.3%)
 £99.6m
■	 Freespirit (3.5%)
 £7.1m
■	 Other (including 
internet) (5.0%)
 £10.0m
PANTONE REFERENCE 4 COLOUR REFERENCE
PANTONE 871 u C = 39    M = 42    Y = 100    K = 11
  00 00 03
Our Business Our Governance Our Financials
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Boardwear segment
Diverse geographical 
presence
The Group has a strong coverage of stores in 
major towns and cities across the British Isles, with 
257 stores in England, 21 in Scotland, 19 in Wales, 
5 in Northern Ireland and 3 in Ireland, in addition 
to a store on the Isle of Man and 2 stores in the 
Channel Islands.
Freespirit Millets
Revenue: £7.1m
Millets offers a range of branded goods though has 
a focus on key own-label brands, including Peter 
Storm and Eurohike which are amongst the UK’s 
most popular Outdoor clothing and equipment 
brands.
Focused upon customers with a passion for 
adrenaline sports, Freespirit offers a range of 
iconic casual lifestyle brands. Owing to the 
continuing decline in this Boardwear market, 
the Group has taken the decision to exit fully 
from this segment over the coming months. 00 00 www.blacks.co.uk www.millets.co.uk 04
Blacks Leisure Group plc  Annual Report and Accounts 2011
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Chairman’s Statement
David Bernstein
“Trading conditions continued to be very 
challenging throughout the period”
David Bernstein, Chairman
Overview
This has been another difficult year for both the Group and the UK 
retail sector generally, with consumer confidence remaining fragile. 
Despite this, action taken by the Group has resulted in the delivery 
of a much reduced loss for the year.
Company Voluntary Arrangements (‘CVAs’) for the Company and 
its main trading subsidiary, The Outdoor Group Limited, were 
implemented in December 2009. This enabled the Group to 
compromise 101 leases, including 88 trading stores which had 
not been trading profitably for some time, and accordingly we 
entered the financial year under review with a smaller but higher 
quality store estate. This, alongside the placing of its Boardwear 
subsidiary, Sandcity Limited (‘Sandcity’), into administration in 
September 2009, enabled the Group to rationalise its business 
and removed a tail of poorly performing stores which had, for 
some years, depressed overall results.
A subsequent issue of new Ordinary Shares in May 2010, through 
a Placing and Open Offer and Firm Placing, enabled the Group to 
cancel its most expensive tranche of debt and to invest significant 
capital, for the first time in a number of years, in the store estate. 
During the financial year the Group opened 13 new or rebranded 
stores, for which trading to date has been very encouraging.
The above restructuring actions reduced significantly the Group’s 
presence in the Boardwear segment which has been in decline for 
several years. As at the end of the financial year, the Group traded 
from only 9 such stores, under the Freespirit brand. Since the end 
of the year, the Group has begun to implement a plan to exit fully 
from this segment and focus on the core Outdoor market. It is 
intended that all remaining Freespirit stores will either be converted 
to the Blacks or Millets fascias or will otherwise be closed by the 
half year end.
Group results and key performance indicators
Total revenue from continuing activities of £201.9m represented 
a decrease of 16.0% from the £240.5m recorded in the prior 
year. Whilst the number of trading stores open as at the end of 
the financial year was only slightly lower, with 308 stores at 26 
February 2011 (2010: 313), the sales in the previous year 
included 88 stores which closed in October and November 2009 
in relation to the CVAs. After excluding the results of these 88 
stores from the comparative figures, the reduction in revenue is 
£8.8m or 4.2%.
Despite the net reduction in store numbers, which reflected the 
closing of a number of mainly small and weakly performing sites 
which were coming to the end of their lease term, the Group 
opened 13 new or rebranded stores during the year. These stores 
are already making a positive overall contribution to the Group 
and are generally trading ahead of expectations and together now 
account for around 10% of total Group revenues. These stores 
are principally larger units, with the trading space to offer our 
ranges more effectively, and which are benefitting from the capital 
investment that has been made in ensuring these stores are fitted 
out to a standard which is appropriate for our brand propositions.
In order to understand the underlying trend in trading, the Group 
measures like-for-like sales which eliminates the effects of store 
openings, refurbishments or closings. Like-for-like sales declined 
during the year by 6.1% as commented on below.
Trading conditions continued to be very challenging throughout 
the period, particularly in the first half during which adverse 
economic conditions contributed to a decline in the key Outdoor 
segment by 6.0%. Whilst the retail environment generally 
continued to be tough throughout the second half, the business 
took advantage of the particularly cold and snowy weather 
conditions over the key Christmas trading period, during which 
Outdoor like-for-like sales grew by some 10.2% despite being 
measured against what was also a strong comparative period. 
  00 00 05
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Key Performance Indicators
Gross margin %
Performance:
48.7% 2011
2010 51.6%
Like-for-like sales %
Performance:
-6.1% 2011
2010 +5.4% 00 00 www.blacks.co.uk www.millets.co.uk 06
Blacks Leisure Group plc  Annual Report and Accounts 2011
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Chairman’s Statement 
continued
Despite being impacted by weak consumer spending in the early 
part of 2011 particularly, in common with other retailers, the strong 
Winter trading performance meant that the second half recovered 
some of the first half decline and the outturn for the Outdoor 
segment for the full year was a reduction of 4.9%. Boardwear, 
which is planned for closure in the coming months, declined by 
28.5% on a like-for-like basis across the period.
     
The internet channel, within Outdoor, continued to grow strongly 
at 44.2%. We have recently launched a new and improved web 
platform for both www.blacks.co.uk and www.millets.co.uk, along 
with an expanded product range. Internet sales accounted for 
4.8% (2010: 2.7%) of total Group sales during the year and we are 
targeting further growth in this channel during the coming year.
 
A gross margin of 48.7%, or 49.6% excluding the effect of 
exceptional items, was achieved in the year (2010: 51.6%). Whilst 
impacted by the competitive and economic climate, including the 
strengthening of the US dollar, much of the loss in margin occurred 
as a result of a discounting of stocks in the first half year. Many 
stock orders for Spring/Summer 2010 had been placed prior to the 
CVAs and order volumes were determined on the basis of a larger 
store portfolio. This issue was compounded by the poor sales in the 
first half and, accordingly, the business had to act decisively to clear 
excess stocks and minimise the stock overhang, at the detriment of 
margin, as we moved into the Autumn.
Store-related overheads have been reduced alongside the 
reduction in stores. Efficiency and other cost savings have also 
been driven within head office and the logistics function. These 
factors have contributed to the Group recording a significant 
reduction in loss before tax and exceptional items from £14.4m  
to £6.6m.
Exceptional items during the year, which are discussed in more 
detail in the Financial Review and within note 8, resulted in 
a net credit of £1.3m (2010: net charge £29.2m). This credit 
included the effect of a £5.4m release from the provision for 
CVA related rates obligations owing to new tenants being found 
for the associated properties, and therefore extinguishing the 
ongoing liabilities, more quickly than had been anticipated. Other 
exceptional charges, which largely offset this release, and a further 
credit of £0.5m for proceeds accrued from the administration of 
Sandcity Limited, related mainly to restructuring activity and in 
particular the planned exit from the Boardwear segment.
Dividends
The Board has decided not to declare a final dividend for the year, 
believing that the performance of the business does not warrant 
the resultant cash outlay. We plan to resume dividend payments, 
if considered appropriate, only when the business returns to a 
suitable level of profitability.
“I am delighted to announce that Julia 
Reynolds has accepted our offer to join 
Blacks Leisure as Chief Executive”
David Bernstein, Chairman 00 00 07
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Store numbers
Board changes and appointment of Chief Executive 
It was with great sadness that the Board announced the death of 
Nick Samuel on 29 June 2010. Nick was a valued colleague who 
made a significant contribution since joining the business as Non-
Executive Director in August 2008.
T om Knight was appointed to the Board as a Non-Executive 
Director on 1 August 2010. T om is a former Executive Director of 
the Company, having worked for the Group from 1987 to 2002 
before leaving to subsequently join JJB Sports plc where he held 
the position of Chief Executive from 2002 to 2007. The Board also 
announced the appointment of Mark Hammersley as Non-Executive 
Director on 20 September 2010. Mark has been Chief Executive of 
Zoggs International Limited since 2003 and brings with him a strong 
track record in managing major sports clothing brands.
   
On 10 February 2011 the Group announced that Neil Gillis 
had given notice of his intention to resign from his role as Chief 
Executive upon serving his six month notice period. I would like to 
thank Neil for his significant contribution to the business over the 
past three years and I wish him every success for the future. 
Following a thorough search for a suitable successor, I am 
delighted to announce that Julia Reynolds has accepted our offer 
to join Blacks Leisure as Chief Executive towards the end of the 
Summer. Julia is a very experienced buyer and retailer who will 
join us from Figleaves.com where, as CEO, she drove a period of 
significant growth and improvement in results. Prior to that, Julia 
was Category Director at Tesco plc where she was responsible for 
the introduction and subsequent success of the Florence & Fred 
clothing range.
Corporate activity
The Company announced on 19 October 2010 that it had been 
approached by several parties regarding a possible offer for the 
Company or an offer to acquire certain of the trading activities 
and related assets of the Group. A number of indicative proposals 
were received and reviewed however, as the Board announced on 
26 January 2011, none of these were considered to be sufficiently 
compelling at that time to be pursued further and all these 
discussions were therefore terminated.
Banking facilities
The Group has been working alongside its bankers, Bank of 
Scotland plc, to extend its banking facilities which were due to 
expire in December 2011. The Group today announces that it has 
been successful in agreeing new revolving credit facilities with its 
bankers which will now run until July 2012. The facilities will be 
automatically extended to November 2012 upon the new Chief 
Executive commencing employment with the Group by no later 
than 30 September 2011. The extended facilities comprise a core 
facility of up to £35.0m and a further new facility of £3.0m being 
available during certain seasonal peaks (subject to the satisfaction 
of certain conditions precedent).
Current trading and future outlook
During the new financial year so far, the Group has continued to 
trade in extremely tough economic conditions. As a result, and in 
common with the experiences of many other UK retailers, sales levels 
in the period since the end of the financial year have been below our 
expectations. Although margins have largely been preserved, there 
has been an adverse impact on trading since the year end.
The Group faces a challenging year ahead in this uncertain retail 
climate. Nevertheless, the Directors believe that the restructuring 
activity that has been undertaken over the past few years has 
given the Group a real opportunity to deliver a return to profitability 
over the short to medium term. With much of this restructuring 
activity now completed, the appointment of a new Chief Executive 
with a specialist retail background is a significant step towards 
completing this turnaround.
Finally, I would also like to recognise our hard-working and 
talented staff who, despite the uncertainties of the significant 
restructuring and operational changes that have taken place over 
the past years, remain committed to continuing and delivering the 
turnaround in the Group’s performance.
David Bernstein
Chairman
4 May 2011
    26 February 27 February 28 February
    2011 2010 2009
Millets   201 208  258
Blacks   98 92  115
Outdoor segment   299 300  373 
Freespirit   9  13 35 
O’Neill   — —  12 
Boardwear segment  9 13 47
Total   308 313 420 00 00 www.blacks.co.uk www.millets.co.uk 08
Blacks Leisure Group plc  Annual Report and Accounts 2011
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Chief Executive’s Review
Neil Gillis 
This was the third year of the Blacks Leisure turnaround 
programme, which has been conducted against a backdrop of 
sharp consumer recession and intense competitive pressure.
Importantly, for the first time in many years, we were able to 
open new stores in the financial year under review and these 
have performed strongly. One of the principal issues the Group 
has faced, and one of the driving factors behind the historic 
underperformance, was the fact that the store estate had been 
significantly underinvested over a number of years and many 
of the stores were old sites which lacked the necessary space 
to retail our full range effectively. For the first two years of the 
turnaround, the Group had to withstand the rapid openings of 
brand new and larger stores by our competitors, often located 
close or even adjacent to our own underinvested sites, without 
being able to respond with capital investment of our own.
Following the CVAs and the subsequent equity fundraising 
we were able to invest in our store estate and we opened or 
converted 13 new stores during this period. These now account 
for around 10% of the turnover in a business with 308 stores. 
Being able to choose strong sites with the required amount 
of trading space, on competitive rents, has driven exceptional 
performances from these new stores. These new 
“Much of the significant corporate 
restructuring that the business required 
has now been completed”
Neil Gillis, Chief Executive 00 00 09
Our Business Our Governance Our Financials
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New approaches 
to marketing
We have continued to make improvements to the way 
we present and market our fascias. This has included 
new point-of-sale devices and presentations within 
some of our stores as well as a number of successful 
direct marketing campaigns. We were proud to 
be awarded a Gold Award by the Direct Marketing 
Association during the year as an endorsement of the 
quality of our promotional leaflets.
stores have given us further confidence that the proposition is 
effective, that the formats work and that the business can take 
on any of its competitors when it is trading on equal terms. It 
has also highlighted the opportunity, should cash facilities allow, 
for the business in the future as many of the leases on the old, 
underinvested stores approach their expiry and we could therefore 
potentially replace these stores with larger, higher returning new 
stores. In the first couple of months of the new financial year we 
have continued with this strategy with the conversion of three of 
our remaining Freespirit stores in Plymouth, Exeter and Cardiff 
to the new Blacks format and these businesses have made an 
encouraging start.
Following the reduction of our overhead base, the planned full 
exit from the loss-making Boardwear business, the reduction in 
our debt requirement over the past three years, the CVAs and the 
equity fundraising, much of the significant corporate restructuring 
that the business required has now been completed as part of the 
turnaround plan. The next phase of the programme now needs to 
be focussed on further enhancing the retail proposition across our 
stores and driving improvement in margin and product 
performance. For this reason I believe it is right for me to hand 
over the management of the Group to an experienced retailer 
who has the background and skills to complete the final phase 
of the turnaround and to develop the long term prospects for the 
business.
After three intense years with Blacks Leisure, I am proud of what 
we have been able to achieve, in particular the fact that we have 
been able to preserve a business which provides the livelihoods of 
around 4,000 dedicated staff across the British Isles.
Neil Gillis
Chief Executive
4 May 2011 00 00 www.blacks.co.uk www.millets.co.uk 10
Blacks Leisure Group plc  Annual Report and Accounts 2011
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Financial Review
Marc Lombardo
Trading results 
The Group loss before tax and exceptional items, from continuing 
operations, was £6.6m (2010: £14.4m). Whilst this reflects a 
disappointing period of trading, particularly in the first half year, 
it does represent a significant underlying improvement in results 
following the restructuring action taken in the prior year, including the 
CVAs.
The CVAs, which were effective in December 2009, removed 88 
poorly performing sites from the estate. A number of additional 
stores that, despite trading weakly, were not included in the CVAs 
due to short remaining lease terms or other contractual reasons, 
have either closed during the past year or are planned for closure 
over the coming months. The closures in the current year have been 
substantially mitigated by the opening of 13 new stores, which are 
generally trading ahead of expectations. These actions will leave a 
smaller but much improved store portfolio from which to trade going 
forward. As at the end of the financial year, the Group was trading 
from 308 (2010: 313) retail stores.
Further action is now planned for the coming months which will see 
the Group fully exit from the Boardwear segment which has traded 
at substantial losses for some time. This will be achieved through 
a combination of store conversions and negotiated lease exits and 
will enable the Group to focus on its core Outdoor segment. Actions 
taken over the past two years, including the CVAs, have already 
significantly reduced the Group’s presence in the Boardwear market 
and, as at the end of the financial year, the remaining stores in this 
segment comprise only 9 of the total estate of 308 stores.
Some costs of the planned exit from Boardwear have been 
reflected in these financial statements, as set out in note 8, mainly 
in relation to provisions for impairment of property, plant 
and equipment plus net realisable value provisions 
against the carrying value of Boardwear specific 
inventories. Given the restructuring plan for the exit 
from Boardwear was not fully committed at the 
end of the financial year, in the context of IAS37 
recognition criteria, provision for further costs of 
this exit, such as redundancy costs 
and costs of exiting leases, has 
not been included within these 
financial statements.
Exceptional operating items
Exceptional operating items (see note 8) amounting to a net 
credit of £1.3m (2010: £26.2m net charge) were recorded in 
connection with continuing operations, relating to the following 
main components:
h h release of £5.4m of provisions for ongoing business rates 
obligations on properties exited during the CVAs, as a result 
of new tenants having been found for these sites more quickly 
than anticipated, and therefore extinguishing the obligations of 
the Group more quickly than had been forecast;
h h professional fees of £0.2m incurred in connection with aborted 
discussions surrounding a possible offer for all or part of the 
business, following the Group having received approaches 
from several parties as announced on 19 October 2010;  
h h restructuring related costs of £4.3m, including redundancy 
costs (mainly relating to head office functions), onerous lease 
provisions in respect of properties vacated, impairment of 
property, plant and equipment and provisions against certain 
Boardwear specific inventories; and 
h h proceeds accrued of £0.5m from the administration of 
Sandcity Limited, a former wholly-owned subsidiary which 
operated in the Boardwear segment and which was placed 
into administration in September 2009. 
“Further action is planned for the coming 
months which will see the Group exit fully 
from the Boardwear segment”
Marc Lombardo, Finance Director 00 00 11
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New brands introduced 
The product ranges have recently been improved 
with the introduction of a number of new high-
quality brands to the Blacks portfolio. Our 
credentials as a retailer of expert apparel and 
equipment are enhanced through the new ranges 
offered by Lowe Alpine, Mammut, Marmot and 
Scarpa. We have also added to our lifestyle 
offering, most recently with the introduction of 
Animal and Weird Fish. 00 00 www.blacks.co.uk www.millets.co.uk 12
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“The Group has been successful in 
agreeing to extend its facilities with 
its bankers”
Marc Lombardo, Finance Director
Financial Review
continued
Goodwill
Goodwill has been subject to an impairment review and the Board 
is satisfied that the carrying value is not impaired as at the balance 
sheet date. 
     
Cash flow
The net cash outflow in the year was £1.7m (2010: £8.7m). Cash 
used in operations of £12.9m (2010: £2.7m) was predominantly 
the result of the £13.2m movement in respect of provisions, which 
included the payment of £7.3m to the compensation fund for 
landlords compromised as a result of the CVAs and the settlement 
of other CVA related obligations, including the ongoing rates 
obligations on properties closed during the CVAs. 
Working capital continues to be a focus and, whilst trade and 
other payables have decreased by £6.6m, this is due in part to 
timing differences around the year end. Total inventories were 
£36.1m (2010: £39.0m) with stock cover at the year end being 
129 days (2010: 120 days). The stock holding around the year 
end is always relatively high owing to the seasonality in the 
business and, in particular, the receipt of ranges ahead of the 
launch of the Spring/Summer season. The timing of stock intake 
over the coming year has been planned so as to reduce the 
average stock holding and, consequently, to improve the efficiency 
of working capital throughout the period.
The Company successfully raised a net £19.5m of new equity in 
May 2010 through a Placing and Open Offer and a Firm Placing, 
during which the Company issued 39,281,011 new Ordinary 
Shares. This provided cash which enabled the Group to cancel 
the more expensive tranche of its borrowing facility as well as to 
help facilitate an acceleration in its turnaround plan, particularly 
with regard to the opening of new stores.
Aided by this cash, the Group was able to open 13 new or 
rebranded stores during the year, 10 of which trade as Blacks 
and 3 under the Millets fascia. Since opening, sales from these 
new stores have exceeded expectations and, already, these new 
stores are making a strong overall contribution to the Group. In 
total, £4.2m of the total capital expenditure incurred of £5.4m 
(2010: £2.9m) has been in respect of the store estate, with the 
balance of £1.2m relating to central systems and projects.
Financial risks and treasury policy
The key financial risks faced by the Group relate to the availability 
of funds to meet the business needs and the fluctuations in 
interest rates. The Group manages borrowing, liquidity, interest 
rate, foreign exchange and banking relationships in accordance 
with Board approved policies designed to minimise exposures.
The Group finances its operations by a combination of internally 
generated cash flow and bank borrowings. Risk is controlled 
by careful forecasting and monitoring to ensure the Group has 
sufficient undrawn bank facilities to meet increases in projected 
borrowings, and remain within financial covenants, over the  00 00 13
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20321.04   10/06/2011   Proof 5
forthcoming period of at least 12 months. As set out below, the 
Group has been able to agree with its bankers an extension of its 
existing revolving credit facility and a new revolving credit facility 
which is available during certain seasonal peaks.
Foreign currencies
Transaction exposure resulting from stock purchases 
denominated in foreign currencies may be hedged by forward 
foreign currency contracts and currency options. The Group policy 
aims to minimise exposure with the intention of protecting the 
buying margin from fluctuations in the underlying value of foreign 
currency.
At the year end, the Group was committed to forward exchange 
contracts to buy US$17.0m (2010: US$20.5m) of currency, at an 
average exchange rate of 1.575. The value of the US dollar relative 
to sterling has traded during the financial year at an average rate 
of 1.545 and has been as strong as 1.434. The Group has used 
forward contracts successfully in managing its exchange risk over 
the financial year, achieving an average effective exchange rate on 
its dollar denominated stock purchases of 1.601 despite what has 
been a volatile period in the currency markets.
Financial position and banking facilities
At the year end the Group’s net bank borrowings amounted to 
£14.4m (2010: £12.6m), which included a drawn loan of £20.0m. 
After deductions of guarantees and other ancillary facilities, an 
amount of £17.2m of the banking facility was undrawn as at the 
year end. The availability of cash is nonetheless a critical factor in 
determining the speed at which the Directors are able to invest in 
the growth of the business. Since the end of the year, the Group 
has however been successful in agreeing to extend its facilities 
with its bankers. This agreement provides a continued core 
revolving credit facility of up to £35.0m, with a further new facility 
of £3.0m available during certain seasonal peaks. This agreement, 
which runs until July 2012 (and is automatically extended to 
November 2012 upon the new Chief Executive commencing 
employment with the Group prior to 30 September 2011), gives 
the Group the stability of a longer-term financing platform from 
which to embark upon the next stages in its turnaround.
    
Marc Lombardo
Finance Director
4 May 2011 
New store openings
The Group has opened 13 new or rebranded stores 
during the year, each designed to more effectively offer 
our ranges in a significantly improved retail environment 
for the customer. These have been successfully supported 
by launch events attended by the likes of Sir Chris 
Bonnington. Results from these new stores are very 
encouraging with trading levels ahead of expectations. 00 00 www.blacks.co.uk www.millets.co.uk 14
Blacks Leisure Group plc  Annual Report and Accounts 2011
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The Board recognises the importance of balancing the interests 
of all its key stakeholders, including employees, Shareholders, 
customers, suppliers and the communities in which it operates, 
and believes that the long-term success of the Group is greatly 
enhanced by valuing and developing relationships with key 
stakeholders. 
Employees
People are key to achieving the Group’s business objectives. 
The Group has established policies for recruiting, training and 
development and is committed to achieving excellent health, 
safety, welfare and protection of employees and their working 
environment.
The Group ensures, as far as is reasonably practicable, that a safe 
and healthy workplace and working environment is provided for 
all its employees to a standard which is at least as high as that 
required by law. The Group’s employment policies are designed 
to produce a framework within which all staff are treated in a fair 
and consistent manner. They have been developed to ensure that 
staff are aware of what is expected of them and what the Group, 
for its part, offers in return. All employees are expected to observe 
and abide by the Group’s policies and procedures which are 
clearly set out in a manual available to staff in stores and also on 
the Group intranet. The Group policy is one of equal opportunity in 
the selection, career progression and promotion of all employees. 
There are clear grievance and disciplinary procedures in place.
The Group maintains close consultation with its employees 
regarding matters likely to affect their interests and is committed to 
involving them in the performance and development of the Group.
It is the policy of the Group to support the employment of disabled 
persons wherever practicable and to ensure as far as possible 
that they participate in all career opportunities available to staff.
Suppliers
The Group purchases goods for resale from suppliers based in the 
UK and direct from manufacturers around the world. The Group 
endeavours to ensure that the suppliers of our goods provide 
reasonable working standards for their employees and do not 
contravene the employment laws of their country.
Customers
The Group aims to provide a high quality of service to all its 
customers and ensure that all products are safe and fit for purpose. 
The Group endeavours to provide accessibility to its different 
shopping channels for all customers. The Group employs a 
customer service department which is actively engaged in dealing 
promptly and efficiently with customer issues and enquiries.
Health and safety
The Group recognises the importance of health and safety in the 
workplace and its management is designed to improve business 
performance. Practical measures, such as risk assessments, are 
undertaken to ensure that the Group’s activities and products 
do not pose a risk to customers, employees, contractors, 
sites or equipment. Procedures are in place to enable effective 
communication and consultation about health, safety and welfare 
issues in order to achieve a high level of safety awareness.
Environment
The Group believes that businesses have a responsibility to 
achieve good environmental practice and to continue to strive 
for improvement in its environmental impact. The efficient and 
effective use of resources makes sound commercial sense. In 
view of this, the Group has appropriate environmental policies 
and sets objectives taking due account of the business risks and 
opportunities.
Community
As a multi-site retail operator, the Group’s community involvement 
is generated by its stores, which contribute to their local areas 
in a variety of ways. The Group supports and encourages these 
activities and welcomes the opportunities they present for team-
building within the business and relationship-building with the 
communities in which we operate.
Corporate Social Responsibility
“The Board believes that the long-
term success of the Group is greatly 
enhanced by valuing and developing 
relationships with key stakeholders” 00 00 15
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Our Business Our Governance Our Financials
www.blacks.co.uk
www.millets.co.uk 
Trading from the web channels has continued to show 
consistent growth and recorded an increase of 44.2% in the 
year, accounting for 4.8% (2010: 2.7%) of the total sales of 
the Group. During the year, both www.blacks.co.uk and www.
millets.co.uk launched new web platforms in order to provide 
an improved customer experience. The Directors have targeted 
these sales channels with achieving continued strong growth 
during the coming year as a result of these new platforms, the 
offering of a wider product range and the planned development 
of a more integrated approach to web trading, including a 
‘reserve and collect’ service through the stores.
Improved web platforms 00 00 www.blacks.co.uk www.millets.co.uk 16
Blacks Leisure Group plc  Annual Report and Accounts 2011
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Directors and Advisors
David A. Bernstein FCA 
Non-Executive Chairman
David (67) joined the Board in 1995 and 
was appointed Non-Executive Chairman in 
June 2001. He has extensive experience in 
the sports and leisure industry, having spent 
six years as Joint Managing Director of 
Pentland Group plc, five years as Chairman 
of Manchester City plc, and in January 
2011 was appointed to the position of 
Chairman of The Football Association. He is 
also Chairman of Sports and Leisure Group 
Limited and Orchid Group Limited, and 
Non-Executive Director of Ted Baker plc 
and Wembley National Stadium Limited.
Neil D. Gillis 
Chief Executive
Neil (46) joined the Board in November 
2007 as Chief Executive. Prior to this 
he held a number of senior positions in 
consumer-facing businesses including 
Chief Executive of Esporta Health Clubs 
Limited from 2003 to 2007, Chairman of 
Duchy Originals, Managing Director of 
the Greene King plc Pub Company and 
Managing Director of Linda McCartney 
Foods. Neil gave notice on 10 February 
2011 of his intention to resign from his 
position in six months’ time under the 
terms of his service contract.
Marcello A. Lombardo BA, ACMA 
Finance Director
Marc (52) was appointed to the Board as 
Finance Director in August 2008. Prior to this 
he was Financial Planning Director of Greene 
King plc where he spent ten years. Marc 
has also held senior finance positions with 
Scottish & Newcastle and the Daily Mail.
Mark A. Hammersley
Non-Executive Director
 
Mark (54) joined the Board as a Non-
Executive Director in September 2010. 
He has been Chief Executive of Zoggs 
International Limited (the swimwear brand 
that is part of the Kendal Group) since  
2003 and has a strong track record in 
managing major sports clothing brands, 
having run the Lowe Alpine and Tenson 
brands, Speedo and Rockport.
Thomas W. Knight BA
Non-Executive Director
 
Tom (58) joined the Board as a Non-
Executive Director in August 2010. He is a 
former Executive Director of the Company, 
having worked for the Group from 1987 to 
2002. Tom subsequently joined JJB Sports 
plc as Chief Executive from 2002 to 2007. 
He was also a Non-Executive Director of 
Ultimate Leisure plc until 2006. 
 
  00 00 17
20321.04   10/06/2011   Proof 5
Our Business Our Governance Our Financials
Registered office
440/450 Cob Drive
Swan Valley
Northampton NN4 9BB
Auditors
BDO LLP
Emerald House
East Street
Epsom
Surrey KT17 1HS
Registrars
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Financial public relations
Citigate Dewe Rogerson
3 London Wall Buildings
London Wall
London EC2M 5SY
Company Secretary
Mark D. Beacham, BSc, FCA
Company Number
582190
Stockbrokers
Singer Capital Markets Limited 
One Hanover Street
London W1S 1YZ
Solicitors
DLA Piper UK LLP
Victoria Square House
Victoria Square
Birmingham B2 4DL
Travers Smith LLP
10 Snow Hill
London EC1A 2AL
Principal bankers
Bank of Scotland plc
PO Box 17235
Edinburgh EH11 1YH 00 00 www.blacks.co.uk www.millets.co.uk 18
Blacks Leisure Group plc  Annual Report and Accounts 2011
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Corporate Governance Statement
There is a commitment to high standards of corporate governance 
throughout the Group. The Board endorses the general principles 
set out in the Combined Code on Corporate Governance issued 
by the Financial Reporting Council in 2008 (‘the 2008 Code’) and 
is accountable to the Group’s Shareholders for good governance. 
In view of the size of the Group and its management structure, 
not all of the detailed provisions set out in the 2008 Code have 
been applied during the year. Those elements that have not 
been applied are disclosed below. Following the appointment 
of additional Non-Executive Directors during the year, the Board 
is reviewing its corporate governance procedures, taking into 
account the publication of the new UK Corporate Governance 
Code which will apply to the Company for the financial year 
ending 3 March 2012.
The Listing Rules require the Board to explain how corporate 
governance is conducted within the Company and to report on 
compliance with the provisions of the 2008 Code, the guiding 
principle of which is “comply or explain”. This Corporate Governance 
Statement, together with the Directors’ Remuneration Report, 
explains key features of the Company’ s corporate governance 
structure, how the Company applies the principles of the 2008 
Code and the extent to which the Company has complied with the 
provisions of the 2008 Code during the period under review. 
The Board considers that the Company has complied with  
the provisions of the 2008 Code throughout the year ended  
26 February 2011 except as set out below.
2008 Code provision A3.2 recommends that a company outside 
the FTSE 350 index should have at least two independent Non-
Executive Directors. As explained below, the Company did not 
comply with this provision until 20 September 2010.
2008 Code provision A3.3 recommends that one of the independent 
Non-Executive Directors should be appointed as Senior Independent 
Director. As explained below, there was no such appointment 
between 29 June 2010 and 29 September 2010. 
2008 Code provisions A4.1, B2.1 and C3.1 recommend that 
the Nominations, Remuneration and Audit Committees be 
comprised solely of or have a majority of independent Non-
Executive Directors as members and that the Remuneration and 
Audit Committees be chaired by an independent Non-Executive 
Director. Due to its composition, the Board was unable to comply 
with this recommendation until 29 September 2010. 
 
The Board of Directors
The present Board consists of a Non-Executive Chairman 
(David Bernstein), two Executive Directors (Neil Gillis and Marc 
Lombardo) and two further Non-Executive Directors (Tom Knight 
and Mark Hammersley). Mr Knight was appointed on 1 August 
2010 and Mr Hammersley was appointed on 20 September 
2010. Nick Samuel was a Non-Executive Director until his death 
on 29 June 2010. The names and biographical details of the 
current Board members appear within the Directors and Advisors 
section of this Annual Report. These indicate the high calibre and 
experience which these individuals bring to enable the Group to 
be managed effectively. 
Mr Bernstein has served on the Board for over nine years and 
therefore does not satisfy the definition of independence set out in 
the 2008 Code. Notwithstanding this, Mr Bernstein is considered 
by the Board to exercise independent judgement in performing his 
role. Mr Knight and Mr Hammersley are considered by the Board 
to be independent of management and free of any relationship or 
circumstances which could materially interfere with the exercise of 
their independent judgement and to fully satisfy the 2008 Code’s 
definition of independence. Mr Samuel was also considered to 
fully satisfy this definition. 
The Non-Executive Directors’ interests in the shares of the 
Company are set out in the Directors’ Report and Business 
Review. They receive a fixed fee for their services.
The Board meets ten times each year and more frequently 
where business needs require. The Board has a schedule of 
matters reserved for its decision which includes material capital 
commitments, commencing or settling major litigation, business 
acquisitions and disposals and appointments to the Board and 
of the Company Secretary. All matters of an operational nature 
are delegated to the Executive Directors. All Directors are given 
appropriate and timely information for each Board meeting, 
including reports on the current financial and trading position of 
each business.     
 
Mr Samuel was Senior Independent Director until 29 June 2010 
and Mr Knight was appointed Senior Independent Director on 
29 September 2010. There was no appointment between these 
dates. During the year, the Chairman and Non-Executive Directors 
met without the Executive Directors present and also the Non-
Executive Directors met separately without the Chairman present. 
      
Any Director appointed is required to retire and seek election by 
Shareholders at the next Annual General Meeting. Additionally, 
one-third of the Directors retire by rotation each year and seek 
re-election at the Annual General Meeting. The Directors required 
to retire are those in office longest since their previous re-election. 
Each Director is also required to retire at least every three years. 
Non-Executive Directors who have served on the Board for more 
than nine years are subject to annual re-election.   
  
All Directors have access to independent professional advice if 
required and at the Company’s expense. This is in addition to 
the access which every Director has to the Company Secretary. 
The Secretary is charged by the Board with ensuring that Board 
procedures are followed.     
  
Chairman and Chief Executive
There is a clear division of responsibilities between the roles of the 
Chairman and the Chief Executive and these have been approved 
by the Board. 00 00 19
20321.04   10/06/2011   Proof 5
Our Business Our Governance Our Financials
The role of the Chairman is to conduct Board meetings and 
meetings of Shareholders and to ensure that all Directors are 
properly briefed in order to take a full and constructive part 
in Board discussions. He is responsible for evaluating the 
performance of the Board, its Committees and each of the 
other Directors. This includes addressing the development 
needs of the Board as a whole with the view to enhancing its 
overall effectiveness, and covers capability, time commitment 
and individual contribution. The Non-Executive Directors are 
responsible for evaluating the performance of the Chairman. 
     
The role of the Chief Executive is to develop and lead business 
strategies and processes to enable the Group to meet 
Shareholder requirements. He is also responsible for dealing with 
investors, Group public relations and external communications. 
The role involves leading the Executive team and evaluating the 
performance of the Executive Management.
Board Committees
The Board has delegated authority to three standing committees, 
as set out in written terms of reference for each committee which 
are available from the Company Secretary. The composition of the 
Board did not permit the membership of the three committees to 
comply with the provisions of the 2008 Code until 29 September 
2010. Mr Samuel was a member of each of the three committees 
until 29 June 2010 and Mr Knight and Mr Hammersley were 
appointed to each of the three committees on 29 September 
2010. The current members of each of the committees are Mr 
Knight, Mr Hammersley and Mr Bernstein.
Audit Committee
The Audit Committee is chaired by Mr Knight, the previous 
Chairman having been Mr Samuel. The membership of the 
Committee includes Mr Bernstein, a Chartered Accountant with 
relevant financial experience. The Committee meets at least three 
times a year and its main duties are as follows:
h h monitoring the integrity of and reviewing the financial 
statements;
h h recommending the appointment of and reviewing the 
effectiveness and independence of the external Auditors;
h h reviewing the Group’s internal controls and risk management 
systems;
h h reviewing the operation and effectiveness of the internal audit 
function; and
h h overseeing the establishment and maintenance of good 
business practices throughout the Group.
The Chief Executive, Finance Director, Head of Internal Audit 
and the Group’s external Auditors were invited to and attended 
meetings of the Audit Committee.
The Audit Committee keeps the scope and cost-effectiveness of 
the external audit under review. The independence and objectivity 
of the external Auditors are also considered on a regular basis, 
with particular regard to the level of non-audit fees. The provision 
of non-audit services is reviewed on a case by case basis. The 
split between audit and non-audit fees appears in note 6 to the 
financial statements. The non-audit fees were paid in respect 
of tax advice and reports required for Shareholder information 
and are not considered by the Committee to affect the Auditors’ 
independence or objectivity.
The Group’s external Auditors, BDO LLP , have reported to the 
Audit Committee that, in their professional judgement, they are 
independent within the meaning of regulatory and professional 
requirements and the objectivity of the audit partner and audit staff 
is not impaired. The Audit Committee has reviewed this statement 
and concurs with its conclusion.
Remuneration Committee    
The Remuneration Committee is chaired by Mr Hammersley, 
the previous Chairman having been Mr Samuel. The Committee 
meets at least twice a year to review the remuneration of the 
Executive Directors. Full details of the Directors’ remuneration and 
a statement of the Company’s remuneration policy are set out 
in the Directors’ Remuneration Report. The Chief Executive may 
attend meetings of the Committee to discuss the performance of 
other Executive Directors and make proposals as necessary, but 
takes no part in deliberations when his own position is discussed.
Each Executive Director abstains from any discussion or 
voting at full Board meetings on Remuneration Committee 
recommendations where the recommendations have a direct 
bearing on their own remuneration package. The details of each 
Executive Director’s individual package are set by the Committee 
in line with the policy adopted by the full Board.
Nominations Committee    
The Nominations Committee is chaired by Mr Bernstein. 
Appointments to the Board of both Executive and Non-Executive 
Directors are normally considered by this Committee, although 
the recruitment of Mr Knight and Mr Hammersley were dealt with 
by the Board as a whole given the Committee’s composition at 
that time. When considering appointments for Non-Executive 
Directors, external search consultants are used as appropriate, 
together with a review of other candidates known to be available, 
to ensure that a wide range of candidates are considered. The 
Committee prepares a description of the role and capabilities 
required for an appointment based on an evaluation of the 
balance of existing skills, knowledge and experience on the 
Board. This is followed by an interview process. An induction to 
the Group’s business and training is provided for all Directors upon 
appointment. 00 00 www.blacks.co.uk www.millets.co.uk 20
Blacks Leisure Group plc  Annual Report and Accounts 2011
20321.04   10/06/2011   Proof 5
Corporate Governance Statement
continued
Board and Committee attendance chart
Attendance at meetings during the financial year is shown below:
   Audit Remuneration Nominations
  Board Committee Committee Committee
D.A. Bernstein  11 (11)  3 (3)  4 (4)  1 (1)
N.D. Gillis  11 (11)  2 (2)* 0 (0)  0 (0)
M.A. Lombardo  11 (11)  3 (3)* 0 (0)  0 (0)
T.W. Knight  5 (5)  2 (2)  2 (2)  1 (1)
M.A. Hammersley  5 (5)  2 (2)  2 (2)  1 (1)
N.M. Samuel  0 (4)  0 (1)  0 (1)  0 (0)
Internal control and risk management
The Board of Directors is responsible for the Group’s system of 
internal control that is designed to facilitate effective and efficient 
operations and to ensure the quality of internal and external 
reporting and compliance with applicable laws and regulations. In 
devising internal controls, the Directors have regard to the nature 
and extent of the risk, the likelihood of it crystallising and the cost 
of controls. A system of internal controls is designed to manage 
but not eliminate the risk of failure to achieve business objectives 
and can only provide reasonable and not absolute assurance 
against the risk of material misstatement, fraud or loss.
The Board reviews the Group’s procedures in respect of internal 
control with a view to complying with ‘Internal Control: Guidance 
for Directors on the Combined Code’ issued by the Institute of 
Chartered Accountants in England and Wales and established 
procedures to ensure compliance with the guidance. The Board 
considers that there has been an ongoing process for the 
identification, evaluation and management of the significant risks 
faced by the Group. This process is regularly reviewed by the 
Board and meets the requirements of the guidance.
The key procedures that the Directors have established to provide 
effective internal controls are as follows:
Internal Audit function
The Internal Audit function carries out a programme of audits 
covering the management of significant corporate and operational 
risks and reports directly to the Audit Committee and works with 
the Board on the effectiveness of key internal controls.
Whistle-blowing
The Group has a ‘Whistle-blowing’ procedure whereby employees 
can make (on an anonymous basis if preferred) confidential 
disclosures about suspected impropriety and wrong-doing. Any 
matters so reported are investigated and escalated to the Audit 
Committee as appropriate. Statistics on the volume and general 
nature of all disclosures made are reported to the Committee on 
an annual basis.
Control environment
Operational management groups meet regularly to monitor all 
operational matters. Clearly defined lines of responsibility and 
delegation of authority have been established in the organisational 
structure. The Executive Directors participate at least monthly in 
management meetings and regularly review activities.
Risk management
Management has responsibility for identifying risks to the business 
and for establishing procedures to mitigate and monitor such 
risks. The risk register documents the Group’s appetite for risk 
and the significant risks and control strategies in each area. This is 
reviewed annually and approved by the Board.
Figures in brackets denote the maximum number of meetings that each Director could have attended. Mr Samuels’ non-attendance 
was due to illness. The work of the Nominations Committee was performed by the Board as a whole for part of the year.
* Attended by invitation. 00 00 21
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Our Business Our Governance Our Financials
Financial reporting
A detailed formal budgeting process for all businesses culminates 
in an annual Group budget which is approved by the Board. 
Results are reported monthly against this budget and revised 
forecasts for the year are prepared when appropriate.
The Board is mindful of its responsibility to present a balanced 
and understandable assessment of the financial position 
and prospects, both to investors and regulatory authorities. 
The Annual Report, Interim Report and Interim Management 
Statements are the principal means of achieving this objective. An 
explanation of the responsibilities of the Directors in connection 
with the financial statements is set out in the Directors’ Report and 
Business Review.
Capital investment
The Group has clearly defined guidelines for capital expenditure. 
These include annual budgets, detailed appraisal and review 
procedures, defined levels of authority and due diligence 
requirements where businesses are being acquired. Post-
investment appraisals are performed for major investments.
Internal controls assurance
The Audit Committee, on behalf of the Board, has reviewed during 
the year the effectiveness of the system of internal control from 
information provided by management, Internal Audit and the 
Group’s external Auditors. Any system of internal control can only 
provide reasonable and not absolute assurance of meeting the 
internal control objectives.
This review included an assessment by the Board of the key risks 
affecting the Group in the delivery of its long-term strategies.
Going concern
The Directors, having taken account of the Group’s net cash 
resources and bank facilities and having made appropriate 
enquiries, consider that the Company and the Group have 
adequate resources to continue operations for the foreseeable 
future and for this reason they continue to adopt the going 
concern basis in preparing the financial statements.
Communication
The Company places a great deal of importance on 
communication with its Shareholders. Shareholders have direct 
access to the Company via its website and the Company 
responds to numerous letters and emails from Shareholders, 
suppliers and customers on a wide range of issues.
There is regular dialogue with individual institutional Shareholders 
as well as general presentations after the interim and final results 
announcements. All Shareholders have the opportunity to raise 
questions at the Annual General Meeting when the Company also 
highlights the latest key business developments. At the meeting, 
the Company complies with the 2008 Code as it relates to notice, 
voting, the separation of resolutions and the attendance of 
committee chairmen. In line with the 2008 Code, details of proxy 
voting by Shareholders are made available following the meeting. 00 00 www.blacks.co.uk www.millets.co.uk 22
Blacks Leisure Group plc  Annual Report and Accounts 2011
20321.04   10/06/2011   Proof 5
Directors’ Remuneration Report
UNAUDITED INFORMATION
The Remuneration Committee
The Remuneration Committee is composed of M.A. Hammersley (Chairman), D.A. Bernstein and T.W. Knight. The Remuneration 
Committee, on behalf of the Board, makes recommendations regarding Executive Directors’ remuneration packages including bonuses, 
share options and other incentive schemes.         
 
Directors’ service contracts
Executive Directors
         Compensation
      Start Unexpired Notice for early
      date term period termination
N.D. Gillis*     20 Nov 2007 Under notice Under notice None
M.A. Lombardo*     03 Aug 2008 Rolling 12 months None
* These are permanent rolling contracts. 
        
N.D. Gillis gave notice on 10 February 2011 of his intention to resign from his position in six months’ time under the terms of his service 
contract and, accordingly, is under notice as at the date of this report.      
 
Non-Executive Directors
         Compensation
      Start Unexpired Notice for early
      date term period termination
D.A. Bernstein     01 Jun 2009 1 month 6 months None
T.W. Knight     01 Aug 2010 15 months 6 months None
M.A. Hammersley     20 Sep 2010 16 months 6 months None
Group policy on Executive Directors’ remuneration
The objective of the Group’s remuneration policy is to provide 
a level of remuneration which will attract, retain and motivate 
Executive Directors and senior management of high quality. 
Share options and longer term incentives are used as part of 
the Group’s remuneration policy. The amounts involved and the 
frequency of issue endeavour to keep pace with current market 
practice and conditions.
 
In setting the Executive Directors’ remuneration the Committee 
takes into account the pay and employment conditions applicable 
across the Group in the reported period. In common with the fact 
that there were no general pay increases for employees elsewhere 
in the Group, no increases were made in the period to Directors’ 
remuneration terms since the prior year.  00 00 23
20321.04   10/06/2011   Proof 5
Our Business Our Governance Our Financials
Variable Rewards 
Executive Directors’ bonus scheme
Executive Directors are entitled to performance related bonuses 
that are payable based, in the main, upon the profit before interest 
and tax improvement of the Group, consistent with corporate 
financial targets as determined by the Remuneration Committee. 
The Remuneration Committee reviews performance against 
targets at the end of the year and may use its discretion to adjust 
measures and payments in view of operating circumstances 
during the year. Bonus payments are non-pensionable and are 
subject to approval by the Committee.
 
The achievement of the highest performance targets would entitle 
the Director to the maximum bonus payable of 100% of basic 
salary. The Executive Directors received no bonuses from these 
arrangements in either the current or the previous financial year.
Pension
The Group made pension contributions of up to 15% of basic 
salary for the Executive Directors. These contributions are paid 
into the equivalent of money purchase pension schemes.
Non-Executive Directors 
The remuneration of Non-Executive Directors is set by the 
Executive Directors and consists of fees for their services in 
connection with Board and Committee meetings and other 
relevant matters.
   
Other matters    
The fees shown in respect of D.A. Bernstein and T.W. Knight are 
paid to third parties.
Share price performance
The mid-market price of each Ordinary Share on 26 February 2011 was 22.40 pence. The lowest and highest prices during the year 
were 22.00 pence and 70.50 pence respectively. 
The following graph shows the Company’s performance, measured by total Shareholder return, compared with the performance of the 
‘FTSE Small Cap — General Retailers’ index over the last five years: 
           
            
            
            
            
          
  
            
            
            
The Remuneration Committee has selected the above index as they consider it to be the most relevant for a company of Blacks’ size 
and nature. This is consistent with prior years. 
0
20
40
60
80
100
120
140
Feb
11
Dec
10
Oct
10
Aug
10
Jun
10
Apr
10
Feb
10
Dec
09
Oct
09
Aug
09
Jun
09
Apr
09
Jan
09
Nov
08
Sep
08
Jul
08
May
08
Mar
08
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08
Nov
07
Sep
07
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07
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07
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07
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07
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Blacks Leisure FTSE UK Small Cap General Retailers 00 00 www.blacks.co.uk www.millets.co.uk 24
Blacks Leisure Group plc  Annual Report and Accounts 2011
20321.04   10/06/2011   Proof 5
AUDITED INFORMATION 
  
Directors’ remuneration
An analysis of the Directors’ remuneration, excluding gains on the exercise of share options, is set out below:
   Basic Variable Benefits
   salary/fees rewards in kind Total Total Pension Pension
   2011 2011 2011 2011 2010 2011 2010
   £’000 £’000 £’000 £’000 £’000 £’000 £’000
N.D. Gillis  300  —  20  320  349  45  45
M.A. Lombardo  170  —  9  179  198  17  17
D.A. Bernstein  85  —  —  85  85  —  —
T.W. Knight  20  —  —  20  —  —  —
M.A. Hammersley  16  —  —  16  —  —  —
N.M. Samuel  9  —  —  9  35  —  —
C.M. Littner  —  —  —  —  15  —  —
A.H. Mallett  —  —  —  —  13  —  —
2011  600  —  29  629   62 
2010  640  50  5   695   62
         
An equity-settled share-based payment charge of £275,000 (2010: £242,000) has been recorded in the statement of comprehensive 
income for the year in connection with the above Directors’ share options. No Directors exercised share options during either year.
Benefits in kind relate solely to car, fuel and healthcare provisions.
  
C.M. Littner and A.H. Mallett resigned from the Board on 14 July 2009.
N.M. Samuel died on 29 June 2010.         
T.W. Knight was appointed to the Board on 1 August 2010.
M.A. Hammersley was appointed to the Board on 20 September 2010.
  
Pension contributions were made in respect of two Directors (2010: two).
Turnaround Incentive Plan    
On 24 November 2009, during the prior financial year, a new 
performance related incentive plan, the ‘Turnaround Incentive 
Plan’ was approved at a General Meeting of Shareholders. This 
Scheme comprised a new share option scheme that was subject 
to performance conditions regarding profitability and share price 
and accordingly aligned the interests of certain Directors and 
senior management with those of Shareholders. 
      
Options were granted on 18 January 2010 under the Turnaround 
Incentive Plan to certain Directors and other senior individuals 
within the Group. Any options already held by those individuals as 
part of other share incentive plans were surrendered and replaced 
with these new options. Further options under this Scheme were 
granted on 10 June 2010 to certain senior individuals within the 
Group, none of which were Directors of the Company. 
    
Directors’ Remuneration Report
continued 00 00 25
20321.04   10/06/2011   Proof 5
Our Business Our Governance Our Financials
Share options granted under the Turnaround Incentive Plan are subject to market-related performance conditions based upon the 
profitability of the Group (defined as earnings before interest and tax, ‘EBIT’) and the share price of Ordinary Shares. Profitability is 
measured cumulatively across the two complete financial years to 3 March 2012 and the share price is to be taken as the average 
closing price across July, August and September 2012. Both parameters must be satisfied for any options to vest, as set out below:
        Ordinary Share % of award
Cumulative EBIT       price (each)  vesting
 £10,000,000       60 pence 60%
 £10,000,000       80 pence 80%
 £10,000,000       100 pence 100%
 £9,000,000       60 pence 40%
 £9,000,000       80 pence 60%
 £9,000,000       100 pence 80%
 £8,000,000       60 pence 20%
 £8,000,000       80 pence 40%
 £8,000,000       100 pence 60%
  
On the further condition that the individual continues to be 
employed by the Group (unless a ‘good leaver’) on the vesting 
date, on the third anniversary of the date of grant, options will 
vest to the extent that performance criteria as above are satisfied. 
Vested options may then be exercised, at nil cost, from that date 
up to the tenth anniversary of the date of grant and these options 
will be satisfied by the transfer of shares held by an Employee 
Benefit Trust. 
The options vest in full and are exercisable in full if there is a 
change of control of the Company which occurs at a price of 100 
pence or more per Ordinary Share. If such a change of control 
occurs at a price of less than 100 pence per share then the 
Remuneration Committee will determine whether and to what 
extent these awards will vest and become exercisable.
In the event of any variation in the share capital of the Company 
(arising from any reduction of capital or sub-division or 
consolidation of capital or issue of shares by way of capitalisation 
of profits or reserves or by way of rights), the number of shares 
subject to the options may be adjusted in such manner as the 
Remuneration Committee considers fair and reasonable so as not 
to disadvantage the participants under the plan as a result of such 
action. 
 
No benefits under the scheme are pensionable.
The Directors who served during the year had the following interests in the Turnaround Incentive Plan at 26 February 2011: 
        Dates Dates 
     Date of Maximum Price exercisable exercisable
     grant number exercisable from to
N.D. Gillis    18 Jan 2010 971,659 0.00p 18 Jan 2013 18 Jan 2020 
M.A. Lombardo    18 Jan 2010 550,607 0.00p 18 Jan 2013 18 Jan 2020
All the above options were granted during the prior financial year, 
on 18 January 2010. All options previously held under other share 
incentive schemes were surrendered as part of the grant of these 
options under the Turnaround Incentive Plan and, accordingly, no 
Directors retained any interests in any other share option schemes. 
No share options, from any scheme, were exercised by Directors 
during either the current or the prior financial year. 
   
Shares granted under option schemes are granted by the 
Remuneration Committee to attract, retain and motivate 
participants to achieve corporate financial targets. The value of 
share options granted during the year is up to 100% of basic salary 
and the value of shares that will vest is subject to the achievement 
of certain performance criteria as set out above. 
   
No share options lapsed during the year, under any share 
incentive schemes, in respect of Directors who held office in the 
period.
Mark Hammersley
Remuneration Committee Chairman
4 May 2011 00 00 www.blacks.co.uk www.millets.co.uk 26
Blacks Leisure Group plc  Annual Report and Accounts 2011
20321.04   10/06/2011   Proof 5
The Directors present their Annual Report for the year ended  
26 February 2011.
      
Principal activities
The Company is the Parent Company of a wholly owned 
subsidiary primarily engaged in the retail of Outdoor clothing, 
footwear and equipment.
The Group comprises two market segments; Outdoor and 
Boardwear. The Outdoor segment trades under the Blacks 
and Millets fascias, and Boardwear trades under the Freespirit 
fascia. The trade is principally from retail stores in the British Isles 
(including three stores operating through a Republic of Ireland 
branch) and associated direct sale internet sites.
 
Products and services
The products sold by the Group are categorised as leisure goods.
      
The Outdoor market is typically divided into specialist products 
designed to protect and perform in a specific environment and 
leisure based products which are generally more widely available. 
The market revolves around walking (from rambling to mountain 
climbing) and camping (from family breaks to expeditions). 
The Group provides merchandise for participation in running, 
climbing, camping, walking, rambling, skiing, snowboarding, 
mountaineering, cycling, trekking and general travel and its 
products include general, outdoor inspired clothing, multi 
functional footwear, rucksacks, tents and accessories.
Blacks and Millets are established retailers of Outdoor clothing, 
footwear and equipment. Blacks stocks a high proportion of 
proprietary branded merchandise, such as The North Face, 
Berghaus, Craghoppers, Deuter, Osprey, Helly Hansen, Mammut, 
Marmot, Merrell, Brasher and most recently Lowe Alpine. We have 
also recently introduced Weird Fish and Animal for the start of the 
forthcoming summer season.
The Millets fascia also stocks a range of branded goods such as 
Hi-Tec and Regatta though has a focus on key own-label brands, 
including Peter Storm and Eurohike which are amongst the UK’s 
most popular Outdoor clothing and equipment brands. We also 
have an extensive own-label childrens range, ‘Adventurers’.
The Freespirit stores are aimed at customers with a passion for 
high adrenaline sports including water and winter sports, offering 
a range of iconic brands such as Mambo, Prospect, Jack Jones, 
RipCurl, Vans and Oakley. Owing to the continuing decline in this 
Boardwear market, the Group has taken the decision to exit from 
this segment fully over the coming months.
  
Results and dividends
The Group results for the year are shown in the Consolidated 
Statement of Comprehensive Income.
  
The Directors do not recommend the payment of any dividend on 
the Ordinary Shares this year (2010: £nil). 
Review of the business
The review of the Group’s activities, trading results, financial 
position at the year end and likely future developments, is 
contained in the Chairman’s Statement, Chief Executive’s Review 
and Financial Review. Other information required to be included 
in the business review, including identification of key performance 
indicators, principal risks and uncertainties affecting the business, 
is set out below. The Group demonstrates Corporate Social 
Responsibility as detailed earlier in this Annual Report.
Financial key performance indicators
The Directors and management monitor the Group’s progress against its strategic objectives and the financial performance of the 
Group’s operations on a regular basis. Performance is assessed against budgets and forecasts using financial and non-financial 
measures. The key performance indicators which are monitored are set out below: 
Like-for-like sales growth %  The traditional retail measurement of the ability to grow sales year on year. The Group measures like-for-
like sales by the comparison of sales from individual stores that were trading in both the period under 
review and the previous comparative period and that had no material change that would affect the trade.
Gross margin %   The Group defines gross margin % as the direct profit earned from the sale of an item, expressed as a 
percentage of sales. The profit earned is after charging the cost of the goods and any related costs such 
as freight charges and duty fees. It does not include the operational costs of the business.
Discussion of the above key performance indicators and the review of the business is detailed in the Chairman’s Statement within this 
Annual Report.
Directors’ Report and Business Review 00 00 27
20321.04   10/06/2011   Proof 5
Our Business Our Governance Our Financials
Principal risks and uncertainties
Risk is inherent in all businesses and the Board is continually 
identifying and evaluating the key business risks. Executive 
Directors and operational management are responsible for the 
implementation of robust processes to manage the risk to the 
business. The Board takes an active role in reviewing operational 
activities to ensure risk is being addressed effectively.
 
The key risks identified by the Board include:
 
Economic conditions 
The economic environment has a clear impact on consumer 
spending. Unemployment levels, interest rates, consumer debt 
levels, availability of credit and many other factors can influence 
customers’ spending decisions. This is particularly so during the 
current economic environment.
   
The Board recognises the need to monitor economic changes in 
order to react in the best interest of the Group by managing stock 
orders and realigning forecasts.
   
Financing
The Group has been successful in agreeing banking arrangements 
which provide the stability of facilities up to July 2012, with an 
automatic extension to November 2012 upon the commencement 
of employment of the new Chief Executive no later than  
30 September 2011. The Directors, nonetheless, continue to 
monitor the cash position of the Group on an ongoing basis to 
ensure that the Group is operating within facilities available.
     
Products and services     
The customer expects quality products at competitive prices. The 
Group is continually developing its product ranges to strive to 
meet customer expectations. The success of the Group depends 
particularly upon the ability to react to the environment where 
normal weather patterns are changing. Product development 
and supply chain management is key in this area to ensure that, 
whatever the weather, the expectations of the customer for 
suitable quality products at competitive prices are met.
 
Competition     
The Group operates in a highly competitive market. Recent 
entrants are growing within the Outdoor market and competitors 
continue to improve their standards. Certain sections of the 
Outdoor market has also become more attractive to the very large 
retailers, including supermarkets, which gives the Group a greater 
challenge in terms of pricing, whilst not compromising on quality.
The Group monitors the activities of its competitors, both current 
and potential, and takes appropriate action to ensure it remains 
competitive on price, quality and value for money.
Suppliers and supply chain management   
The Group is dependent on its supplier base to deliver quality 
products, on time. The Group continually reviews the supplier 
base to ensure suppliers have the ability to meet demand and 
remain price competitive.
   
Other performance indicators used by management internally include:
Share price   The market value of each Ordinary Share is taken as an indication of the ability of the Group to deliver 
Shareholder returns through equity growth.
Stock availability  This provides a quantified value for levels of stock availability in the business, over a specific period.
Stock cover  Monitoring of the number of days of stock held at a point in time is used as a measure of working capital 
efficiency.    
Store openings  The Group measures the number of store openings in a period, which includes both new properties and re-
openings of existing stores which have had a substantial refurbishment such as a change of trading fascia.
Return on investment The Group monitors return on investment for new developments and store refurbishments.
Customer satisfaction  Results of mystery shopper and other direct customer surveys.
Staff turnover  Number of employees leaving as a % of the total workforce. 00 00 www.blacks.co.uk www.millets.co.uk 28
Blacks Leisure Group plc  Annual Report and Accounts 2011
20321.04   10/06/2011   Proof 5
Warehousing and distribution
The Group regularly reviews its warehousing and related logistics 
operations. The key risks identified are those in relation to 
business interruption caused by physical property damage, 
warehouse system breakdowns, inefficient processes and  
delivery failures.
IT systems and business continuity   
The Group is dependent upon the availability and integrity of key 
computer systems which must record and process substantial 
volumes of data in a timely and accurate manner. The Group 
recognises that key systems, in particular the EPOS/till systems 
and the stock management systems, will require continual 
upgrades and ongoing investment, to ensure they meet the 
current and future operational needs of the business.
Key personnel   
The success of the Group is enhanced by the retention of key 
management and personnel and on its ability to attract, motivate 
and retain employees of a high calibre. Share options and longer 
term incentives are used as part of their remuneration packages.
Treasury and risk management   
The main financial risks to the Group relate to the availability of 
funds to meet the business needs.
Foreign exchange rates are monitored and forward contracts are 
used to minimise the risk of currency fluctuations. The Group’s 
treasury policy allows the use of derivative financial instruments 
provided they are not entered into for speculative purposes.
Capital risk management   
The Group manages its capital to ensure that entities in the Group 
will be able to continue as a going concern whilst seeking to 
maximise the return to stakeholders through the optimisation of 
the debt and equity balance.
In managing its capital, the Group’s primary objective is to 
provide a consistent return for its equity Shareholders through 
a combination of capital growth and, where appropriate, 
distributions. In order to achieve this objective, the Group seeks 
to maintain a gearing ratio that balances risks and returns at an 
acceptable level and also to maintain a sufficient funding base 
to enable the Group to meet its working capital and strategic 
investment needs. In making decisions to adjust its capital 
structure to achieve these aims, either through altering its dividend 
policy, new share issues, or the reduction of debt, the Group 
considers not only its short-term position but also its long-term 
operational and strategic objectives.
Financial instruments   
The Group’s policy on financial assets and liabilities and its interest 
in financial instruments is reported in the notes to these accounts.
Contractual arrangements
There are no persons with whom the Group has contractual 
arrangements which are essential to the Group’s business.
Payment policy    
The Group seeks to ensure that terms of payment specified and 
agreed with suppliers are not exceeded. Creditor days based on 
year end trade creditors were 53 days (2010: 62 days).
The Company does not have any trade creditors and accordingly 
no creditor days figure has been disclosed.
Donations   
During the year the Group made charitable donations of £1,200 
(2010: £nil). No political donations were made in either year.
Directors   
The names of the current Directors of the Company and their 
biographical details, including roles, responsibilities and significant 
external commitments, are given in the Directors and Advisors 
section of this Annual Report. T.W. Knight was appointed to the 
Board on 1 August 2010 and M.A. Hammersley was appointed 
to the Board on 20 September 2010. N.M. Samuel served on the 
Board until his death on 29 June 2010. The other Directors served 
on the Board throughout the year.
Details of the terms of appointment and notice period of each 
of the current Directors appear in the Directors’ Remuneration 
Report. The provisions of the Company’s Articles of Association 
and of the Combined Code in respect of the retirement and 
re-election of Directors are set out in the Corporate Governance 
Statement. The Directors standing for re-election to the Board 
are set out in the Notice of Annual General Meeting which will 
be mailed separately to Shareholders in due course. Following 
performance evaluation, the Board considers that each of the 
Non-Executive Directors standing for re-election continues to 
perform effectively and to demonstrate commitment to his role. 
The Board is satisfied that the Chairman has sufficient time 
to commit to the Company’s affairs notwithstanding his other 
business commitments.
Directors’ interests in transactions
There were no material transactions in the year in which any 
Director had an interest.
 
Indemnification of Directors
Qualifying third party indemnity provisions (as defined in Section 
234 of the Companies Act 2006) are in force for Directors who 
held office during the year.
 
Share capital    
The following information is given pursuant to Section 992 of the 
Companies Act 2006.
  
Directors’ Report and Business Review
continued 00 00 29
20321.04   10/06/2011   Proof 5
Our Business Our Governance Our Financials
Movements in share capital during the year are disclosed in note 
20 to the financial statements.
The Company’s share capital comprises Ordinary Shares of 
1p each, Deferred Shares of 49p each and 10% cumulative 
Preference Shares of £1 each. The rights and obligations 
attaching to the Company’s shares are summarised below and 
are set out in the Company’s Articles of Association which can be 
obtained from Companies House or by writing to the Company 
Secretary.
   
Holders of the Ordinary Shares have all the rights normally 
attaching to Ordinary Shares, including rights to receive the 
Company’s Annual Report, to attend and speak at General 
Meetings and to appoint proxies and exercise voting rights. The 
Company’s Ordinary Shares do not carry any special rights with 
regard to control of the Company. There are no restrictions on 
share transfers or voting. Ordinary Shares acquired through the 
Company’s share schemes rank pari passu with the Company’s 
Ordinary Shares in issue and have no special rights. Unless the 
Board decides otherwise, an Ordinary Shareholder may not vote 
at any General Meeting or class meeting or exercise any rights in 
relation to shares while any amount of money relating to his shares 
is outstanding.
The Deferred Shares confer no voting rights nor any rights to 
participate in the profits of the Company except in very limited 
circumstances. The Deferred Shares are not redeemable and are 
only transferable in limited circumstances. The Company may 
at any time arrange for Deferred Shares to be transferred to the 
Company for an aggregate consideration of 1p and may cancel 
the Deferred Shares so purchased.
The Preference Shares carry the right to receive a fixed dividend 
of 10% per annum paid in priority to a dividend on any other 
class of share, payable half-yearly on 30 April and 31 October. 
The Preference Shares are non-redeemable. In the event of a 
return of capital or on a winding-up of the Company, Preference 
Shareholders are entitled to repayment of the nominal capital 
paid up on their shares, a premium of 5 pence per share and any 
arrears of dividend to the date of repayment in priority to any other 
class of share. Preference Shares do not carry any voting rights 
unless either the preference dividends are in arrears for at least six 
months or there is a resolution altering the rights of the holders of 
the Preference Shares, for the winding-up of the Company or for a 
return of capital. In such instances, a Preference Shareholder shall 
have one vote on a show of hands or, in the event of a poll, ten 
votes for every Preference Share held.
There are no restrictions on the transfer of the Company’s Ordinary 
and Preference Shares other than certain restrictions which may 
be imposed pursuant to the Company’s Articles of Association, 
certain restrictions which may from time to time be imposed by 
laws and regulations (for example in relation to insider dealing), 
restrictions pursuant to share dealing codes whereby Directors and 
certain employees of the Company require prior approval to deal in 
the Company’s shares, and where a person has been served with 
a disclosure notice and has failed to provide the Company with 
information concerning the interests in those shares.
   
Purchase of own shares    
At the Company’s Annual General Meeting held on 21 July 2010 
the Company was authorised to make market purchases of up to 
8,405,102 Ordinary Shares (representing approximately 10% of 
its issued Ordinary Share capital at that date). No such purchases 
were made during the year and no shares are held in treasury as 
at 26 February 2011.
Blacks Leisure Group Employee Benefit Trust 
The Executive Directors of the Company, together with certain 
other employees of the Group, are potential beneficiaries of the 
Blacks Leisure Group plc Employee Benefit Trust (‘the Trust’) and, 
as such, are deemed to be interested in any Ordinary Shares held 
by the Trust. At 26 February 2011 the Trust held 344,578 (2010: 
344,578) Ordinary Shares.
Power of Directors 
The rules for appointment and replacement of Directors are 
detailed in the Company’s Articles of Association.
Any changes to the Company’s Articles of Association must be 
approved by Shareholders in accordance with legislation in force 
from time to time.
The Directors have authority to issue and allot Ordinary Shares, 
such authority being renewed annually at the Annual General 
Meeting.
Change of control 
None of the Ordinary Shares, including those held by the Trust, 
carries any special voting rights with regard to control of the 
Company.
The Company is not party to any significant agreements that 
would take effect, alter or terminate upon a change of control of 
the Company following a takeover bid.
Except as shown below, the Company does not have 
any agreements with any Director or employee providing 
compensation for loss of office or employment that occurs 
because of a takeover bid, except for provisions in the rules of the 
Company’s share schemes which may result in options granted to 
employees to vest on a takeover.
An arrangement was in place whereby N.D. Gillis would receive 
a payment of £500,000 in the event of a change of control of 
the Company prior to 19 November 2011. This entitlement 
ceased when he gave notice of his resignation from his role, as 
announced on 10 February 2011. 00 00 www.blacks.co.uk www.millets.co.uk 30
Blacks Leisure Group plc  Annual Report and Accounts 2011
20321.04   10/06/2011   Proof 5
Going concern 
After making due enquiries, and following the agreement of 
banking facilities as detailed in the Financial Review, the Directors 
have a reasonable expectation that the Group has adequate 
facilities in place in order to continue operational existence for 
the foreseeable future and, accordingly, they continue to adopt 
the going concern basis in the preparation of these financial 
statements.
Directors’ responsibilities 
The Directors are responsible for preparing the Annual Report and 
the financial statements in accordance with applicable law and 
regulations. 
Company law requires the Directors to prepare financial 
statements for each financial year. Under that law the Directors 
are required to prepare the Group financial statements in 
accordance with International Financial Reporting Standards 
(IFRSs) as adopted by the European Union and have elected 
to prepare the Company financial statements in accordance 
with United Kingdom Generally Accepted Accounting Practice 
(United Kingdom Accounting Standards and applicable law). 
Under company law the Directors must not approve the financial 
statements unless they are satisfied that they give a true and fair 
view of the state of affairs of the Group and Company and of the 
profit or loss for the Group for that period. 
In preparing these financial statements, the Directors are required to:
h h select suitable accounting policies and then apply them 
consistently;
h h make judgements and accounting estimates that are 
reasonable and prudent;
h h state whether they have been prepared in accordance with 
IFRSs as adopted by the European Union, subject to any 
material departures disclosed and explained in the financial 
statements; 
h h prepare the financial statements on the going concern basis 
unless it is inappropriate to presume that the Company will 
continue in business; 
h h prepare a Directors’ Report and Directors’ Remuneration 
Report which comply with the requirements of the Companies 
Act 2006; and
h h provide additional disclosures when compliance with the specific 
requirements of IFRSs is insufficient to enable users to understand 
the impact of particular transactions, other events and conditions 
on the entity’ s financial position and financial performance.
The Directors are responsible for keeping adequate accounting 
records that are sufficient to show and explain the Company’s 
transactions and disclose with reasonable accuracy at any time 
the financial position of the Company and enable them to ensure 
that the financial statements comply with the Companies Act 
2006 and, as regards the Group financial statements, Article 4 of 
the IAS Regulation. They are also responsible for safeguarding the 
assets of the Company and hence for taking reasonable steps for 
the prevention and detection of fraud and other irregularities.
Website publication   
The Directors are responsible for ensuring the Annual Report 
and the financial statements are made available on a website. 
Financial statements are published on the Company’s website 
in accordance with legislation in the United Kingdom governing 
the preparation and dissemination of financial statements, which 
may vary from legislation in other jurisdictions. The maintenance 
and integrity of the Company’s website is the responsibility of the 
Directors. The Directors’ responsibility also extends to the ongoing 
integrity of the financial statements contained therein.
 
Directors’ responsibilities pursuant to DTR4  
The Directors confirm to the best of their knowledge:
   
h h the Group financial statements have been prepared in 
accordance with International Financial Reporting Standards as 
adopted by the European Union (IFRSs) and Article 4 of the IAS 
Regulation and give a true and fair view of the assets, liabilities, 
financial position and profit and loss of the Group; and
h h the Annual Report includes a fair review of the development and 
performance of the business and the financial position of the 
Group and the Parent Company, together with a description of 
the principal risks and uncertainties that they face.
Corporate Governance Statement
The Corporate Governance Statement is presented earlier and is 
incorporated in this Directors’ Report by reference.
Disclosure of information to Auditors
All the current Directors have taken all the steps that they ought to 
have taken to make themselves aware of any information needed 
by the Company’s Auditors for the purpose of their audit and 
to establish that the Auditors are aware of that information. The 
Directors are not aware of any relevant audit information of which 
the Auditors are unaware.
   
Annual General Meeting   
The Annual General Meeting of the Company will be held at 11.00 
am on 27 July 2011. The notice convening the meeting and the 
resolutions to be put to the meeting, together with explanatory 
notes, will be sent out in a separate circular to Shareholders in 
due course.
  
Auditors   
A resolution to reappoint BDO LLP as Auditors will be proposed at 
the next Annual General Meeting.
Directors’ Report and Business Review
continued 00 00 31
20321.04   10/06/2011   Proof 5
Our Business Our Governance Our Financials
Substantial interests in share capital
As at 3 May 2011, the Directors had been notified of the following persons who are interested, directly or indirectly, in 3% or more of the 
voting rights associated with the Ordinary Share capital of the Company:
    
        Holding  %
Gartmore Investment Limited      14,393,934 17.13
Sportsdirect.com Retail Limited      12,153,071 14.46 
Standard Life Investments Limited      8,321,051 9.90 
Schroders plc       8,295,328 9.87 
Aviva plc       5,672,967 6.75 
Pentland Group PLC      4,931,563 5.87 
VF Luxembourg S.A.R.L.      3,901,386 4.64 
F&C Asset Management plc      2,993,503 3.56 
Polar Capital European Forager Fund Limited     2,607,750 3.10
Other than disclosed above, the Directors are not aware of any person holding, or beneficially interested in, 3% or more of the voting 
rights associated with the Ordinary Share capital of the Company.
    
Directors’ interests            
The Directors who held office at the end of the financial year had the following interests in the Ordinary Shares of the Company:
        
      26 February 2011 27 February 2010*
      Under Under
      Issued option Issued option
D.A. Bernstein     300,000 — 200,000 —
N.D. Gillis     128,100 971,659 70,000 971,659
M.A. Lombardo     — 550,607 — 550,607
T.W. Knight     6,801 — 6,801 —
M.A. Hammersley     — — — —
* Or date of appointment if later.
        
The Company considers that the holding of shares by Non-Executive Directors, as shown above, aligns their interests to those of other 
Shareholders and does not impact on their independence in performing their duties.
  
No Directors hold any beneficial interest in the shares of any of the subsidiary undertakings.
  
Further details of Directors’ share options are set out within the Directors’ Remuneration Report.
 
By order of the Board
         
Mark Beacham
Company Secretary           
4 May 2011    00 00 www.blacks.co.uk www.millets.co.uk 32
Blacks Leisure Group plc  Annual Report and Accounts 2011
20321.04   10/06/2011   Proof 5
Independent Auditors’ Report to the Members of 
Blacks Leisure Group plc
We have audited the financial statements of Blacks Leisure Group 
plc for the year ended 26 February 2011 which comprise the 
Consolidated Statement of Comprehensive Income, Consolidated 
Balance Sheet, the Consolidated Statement of Cash Flows, 
the Consolidated Statement of Changes in Equity, the Parent 
Company Balance Sheet and the related notes. The financial 
reporting framework that has been applied in the preparation of 
the Group financial statements is applicable law and International 
Financial Reporting Standards (IFRSs) as adopted by the 
European Union. The financial reporting framework that has been 
applied in preparation of the Parent Company financial statements 
is applicable law and United Kingdom Accounting Standards 
(United Kingdom Generally Accepted Accounting Practice).
This report is made solely to the 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 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 Company and the 
Company’s members as a body, for our audit work, for this report, 
or for the opinions we have formed.
Respective responsibilities of Directors and Auditors
As explained more fully in the statement of Directors’ 
responsibilities, the Directors are responsible for the preparation 
of the financial statements and for being satisfied that they give 
a true and fair view. Our responsibility is to audit the financial 
statements in accordance with applicable law and International 
Standards on Auditing (UK and Ireland). Those standards require 
us to comply with the Auditing Practices Board’s (APB’s) Ethical 
Standards for Auditors. 
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is 
provided on the APB’s website at www.frc.org.uk/apb/scope/
private.cfm.
Opinion on financial statements
In our opinion:
h h the financial statements give a true and fair view of the state  
of the Group’s and the Parent Company’s affairs as at  
26 February 2011 and of the Group’s loss for the year then 
ended;
h h the Group financial statements have been properly prepared in 
accordance with IFRSs as adopted by the European Union;
h h the Parent Company financial statements have been properly 
prepared in accordance with United Kingdom Generally 
Accepted Accounting Practice; and
h h the financial statements have been prepared in accordance 
with the requirements of the Companies Act 2006; and, as 
regards the Group financial statements, Article 4 of the IAS 
Regulation.
Opinion on other matters prescribed by the Companies  
Act 2006
In our opinion:
h h the part of the Directors’ Remuneration Report to be 
audited has been properly prepared in accordance with the 
Companies Act 2006; and
h h the information given in the Directors’ Report for the financial 
year for which the financial statements are prepared is 
consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters 
where the Companies Act 2006 requires us to report to you if, in 
our opinion:
h h adequate accounting records have not been kept by the 
Parent Company, or returns adequate for our audit have not 
been received from branches not visited by us; or
h h the Parent Company financial statements and the part of 
the Directors’ Remuneration Report to be audited are not in 
agreement with the accounting records and returns; or
h h certain disclosures of Directors’ remuneration specified by law 
are not made; or
h h we have not received all the information and explanations we 
require for our audit.
Under the Listing Rules we are required to review:
h h the Directors’ statement, set out in the Corporate Governance 
Statement, in relation to going concern;
h h the part of the Corporate Governance Statement relating to 
the Company’s compliance with the nine provisions of the 
June 2008 Combined Code specified for our review; and
h h certain elements of the report to Shareholders by the Board 
on Directors’ remuneration.
David Eagle 
(senior statutory auditor)
For and on behalf of BDO LLP , statutory auditor
Epsom
United Kingdom
4 May 2011
BDO LLP is a limited liability partnership registered in England and 
Wales (with registered number OC305127). 00 00 33
20321.04   10/06/2011   Proof 5
Our Financials Our Governance Our Business
Consolidated Statement of Comprehensive Income
for the year ended 26 February 2011
        Year ended Year ended
        26 February 27 February
        2011  2010
        Total Total
       Note £’000 £’000
Continuing operations
Revenue      4 201,933  240,517
Cost of sales       (103,569) (116,440)
Gross profit       98,364  124,077
Other income      4 899 1,109
Distribution costs       (93,366) (154,359)
Administrative expenses      (8,390) (9,023)
Operating loss      6 (2,493) (38,196)
 Operating loss excluding exceptional items     (3,814) (12,037)
 Exceptional items     8 1,321  (26,159)
Finance costs      9 (2,831) (5,946)
 Finance costs excluding exceptional items     (2,831) (2,914)
 Exceptional items      —  (3,032)
Finance income      9 65  569 
Loss before tax        (5,259) (43,573)
Tax expense      10 (229) (2,486)
 Tax expense excluding exceptional items     (229) (190)
 Tax expense on exceptional items      —  (2,296)
Loss for the year from continuing operations     (5,488) (46,059)
Discontinued operations
Loss from discontinued operations (administration of Sandcity Limited)   35 —  (3,373)
Loss for the financial year      (5,488) (49,432)
Other comprehensive income/(expense)
Transferred to the carrying amount of hedged items     (720) (1,256)
Tax on items transferred from equity      202  352 
(Losses)/gains relating to designated cash flow hedges     (221) 720 
Tax on items taken directly to equity      60  (202)
Exchange differences on translation of foreign operations     (155) — 
Other comprehensive expense for the year, net of tax    (834) (386)
Total comprehensive expense for the year attributable to equity holders of the parent  (6,322) (49,818)
Loss per share (pence)
From continuing operations     11
— Basic       (6.56) (108.90)
— Diluted       (6.56) (108.90)
From continuing and discontinued operations    11
— Basic       (6.56) (116.88)
— Diluted       (6.56) (116.88) 00 00 www.blacks.co.uk www.millets.co.uk 34
Blacks Leisure Group plc  Annual Report and Accounts 2011
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Consolidated Balance Sheet
as at 26 February 2011
        26 February 27 February
        2011 2010
       Note £’000 £’000
ASSETS
Non-current assets
Property, plant and equipment     13 19,262  20,098
Goodwill      14 34,598  34,598
Other intangible assets     15 151  7
Deferred tax asset      10 485  414 
Total non-current assets      54,496  55,117 
Current assets
Inventories      17 36,122  38,954
Trade and other receivables     18 6,370  6,725
Derivative financial instruments     32 —  720
Cash and cash equivalents     19 655  1,010
Total current assets      43,147  47,409 
TOTAL ASSETS       97,643  102,526 
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Share capital      20 21,733  21,319
Share premium      21 43,395  24,333
Reserve for own shares     22 (773) (773)
Hedging reserve       (161) 518
Retained earnings       (30,206) (24,962)
TOTAL EQUITY       33,988  20,435 
Non-current liabilities
Preference shares      20 891 891
Other payables      26 5,581  3,802
Obligations under finance leases     25 577  1,186
Long-term provisions     27 3,170  5,060
Total non-current liabilities      10,219  10,939 
Current liabilities
Trade and other payables     26 33,491  41,662
Bank overdrafts      24 15,024  13,643
Obligations under finance leases     25 656  1,178
Short-term provisions     27 4,044  14,669
Derivative financial instruments     32 221  —
Total current liabilities      53,436  71,152 
TOTAL LIABILITIES      63,655  82,091 
TOTAL EQUITY AND LIABILITIES      97,643  102,526 
The financial statements were approved by the Board and authorised for issue on 4 May 2011 and were signed on its behalf by: 
Neil Gillis
Chief Executive
Marc Lombardo
Finance Director
Company Number: 582190 00 00 35
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Consolidated Cash Flow Statement
for the year ended 26 February 2011
        Year ended Year ended
        26 February  27 February
        2011 2010
       Note £’000 £’000
Cash flows from operating activities
 Net loss from continuing operations      (5,488) (46,059)
 Net loss from discontinued operations      — (3,373)
Net loss from operations      (5,488) (49,432)
Adjustments for:
 Net finance cost       2,766 5,499
 (Profit)/loss on disposal of property, plant and equipment    (209) 1,050
 Depreciation and amortisation       5,143  6,155 
 Impairment of property, plant and equipment     825  7,127
 Loss on disposal of intangible assets      — 54 
 Loss on deconsolidation of Sandcity Limited     — 159 
 Tax expense       229  2,491 
 Equity-settled share-based payments expense     399  250
 Release of capital receipts      (6) (130)
Operating profit/(loss) before working capital changes    3,659 (26,777)
Decrease in inventories      2,822 10,062
Decrease in trade and other receivables      408  2,309
(Decrease)/increase in trade and other payables     (6,569) 2,917
(Decrease)/increase in provisions      (13,235) 8,787
Cash used in operations      (12,915) (2,702)
Interest paid       (1,984) (3,087)
Tax (paid)/received       (32) 144
Net cash used in operating activities      (14,931) (5,645)
Cash flows from investing activities
Purchase of property, plant and equipment     (5,352) (2,945)
Purchase of intangible assets      (151) —
Proceeds from disposal of property, plant and equipment     326 —
Proceeds from disposal of intangible fixed assets     75  497 
Degrouping of subsidiary undertaking, net overdrafts     — 38 
Interest received       41  569
Net cash used in investing activities      (5,061) (1,841)
Cash flows from financing activities
Proceeds from issue of share capital (2011: net of issue costs of £1,757,000)   19,476 —
Dividends on shares classified as liabilities      (89) (89)
Payment of finance lease liabilities      (1,131) (1,118)
Net cash generated/(used) in financing activities     18,256  (1,207)
Net decrease in cash and cash equivalents     (1,736) (8,693)
Cash and cash equivalents at the beginning of the year     (12,633) (3,940)
Cash and cash equivalents at the end of the year    19 (14,369) (12,633) 00 00 www.blacks.co.uk www.millets.co.uk 36
Blacks Leisure Group plc  Annual Report and Accounts 2011
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   Share Share Reserve for Warrants Hedging Retained 
   capital premium own shares reserve reserve earnings Total equity
   £’000 £’000 £’000 £’000 £’000 £’000 £’000
At 1 March 2009  21,319  24,333  (773) —  904  23,188  68,971 
Gains relating to designated 
 cash flow hedges —  —  —  —  720  —  720
Tax on items taken directly to 
 equity relating to cash flow hedges —  —  —  —  (202) —  (202)
Transferred to carrying amount of 
 hedged items on cash flow hedges —  —  —  —  (1,256) —  (1,256)
Tax on items transferred from equity —  —  —  —  352  —  352 
Other comprehensive expense 
 for the year  —  —  —  —  (386) —  (386)
Loss for the year  —  —  —  —  —  (49,432) (49,432)
Total comprehensive expense 
 for the year  —  —  —  —  (386) (49,432) (49,818)
Accrued equity-settled
 share-based payments —  —  —  1,032  —  250  1,282
Transfer to retained earnings in 
 relation to share-based payments —  —  —  (1,032) —  1,032  —
At 27 February 2010 21,319  24,333  (773) —  518  (24,962) 20,435
At 28 February 2010 21,319  24,333  (773) —  518  (24,962) 20,435 
Losses relating to designated 
 cash flow hedges —  —  —  —  (221) —  (221)
Tax on items taken directly to 
 equity relating to cash flow hedges —  —  —  —  60  —  60 
Transferred to carrying amount of 
 hedged items on cash flow hedges —  —  —  —  (720) —  (720)
Tax on items transferred from equity —  —  —  —  202  —  202 
Exchange differences on 
 translation of foreign operations —  —  —  —  —  (155) (155)
Other comprehensive expense 
 for the year  —  —  —  —  (679) (155) (834)
Loss for the year  —  —  —  —  —  (5,488) (5,488)
Total comprehensive expense 
 for the year  —  —  —  —  (679) (5,643) (6,322)
Issue of share capital 414  19,062  —  —  —  —  19,476 
Accrued equity-settled 
 share-based payments —  —  —  —  —  399  399 
At 26 February 2011 21,733  43,395  (773) —  (161) (30,206) 33,988 
Consolidated Statement of Changes in Equity
for the year ended 26 February 2011 00 00 37
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Notes to the Financial Statements
for the year ended 26 February 2011
1 General information
Blacks Leisure Group plc is a Company incorporated in England and Wales with registered number 582190. The address of the 
registered office is 440-450 Cob Drive, Swan Valley, Northampton, NN4 9BB. The nature of the Group’s operations and its principal 
activities are set out in the Chairman’s Statement, the Chief Executive’s Review, the Financial Review and the Directors’ Report and 
Business Review.
New accounting standards
The following new accounting standards were adopted in the year. The adoption of these standards has not had a material impact 
upon the Group.
h IFRS3 Revised — Business Combinations (effective for annual periods beginning on or after 1 July 2009);
h IAS27 Amendment — Consolidated and separate financial statements (effective for annual periods beginning on or  
  after 1 July 2009);
h IAS39 Amendment — Financial instruments: Eligible hedged items (effective for annual periods beginning on or after  
  1 July 2009);
h IFRIC17 Distributions of non-cash assets to owners (effective for annual periods beginning on or after 1 July 2009);
h IFRIC18 Transfer of assets from customers (effective for annual periods beginning on or after 1 July 2009);
Improvements to IFRSs (2009)
  Amendments to various standards (generally effective for annual periods beginning on or after 1 January 2010);
h IFRS2 Amendment — IFRS2 Group cash-settled share-based payment transactions (effective for annual periods  
  beginning on or after 1 January 2010); and
h IAS32 Amendment — Classification of rights issues (effective for annual periods beginning on or after 1 February 2010).
As at the date of authorisation of these financial statements, the following standards and interpretations, issued by the International 
Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC), have not yet been 
adopted by the Group. Those indicated with an asterisk have not yet been endorsed for use in the EU.
h IFRIC19 Extinguishing financial liabilities with equity instruments (effective for annual periods beginning on or after  
  1 July 2010);
h IAS24 Revised — Related party disclosures (effective for annual periods beginning on or after 1 January 2011);
h IFRIC14 Amendment — IFRIC14 and IAS19 — Limit on a defined benefit asset, minimum funding requirements and their  
  interaction (effective for annual periods beginning on or after 1 January 2011);
Improvements to IFRSs (2010)
  Amendments to various standards (generally effective for annual periods beginning on or after 1 January 2011);
h IFRS7* Amendment — Disclosures — Transfers of financial assets (effective for annual periods beginning on or after  
  1 July 2011);
h IAS12* Amendment — Deferred tax: recovery of underlying assets (effective for annual periods beginning on or after  
  1 January 2012); and
h IFRS9* Amendment — Financial instruments (effective for annual periods beginning on or after 1 January 2013).
The Group does not anticipate that the adoption of these standards or interpretations will have a material impact on the 
consolidated results or financial position of the Group.
2 Accounting policies
 Basis of preparation
The consolidated financial statements for the 52 weeks ended 26 February 2011 have been prepared in accordance with the 
accounting policies and presentation required by International Financial Reporting Standards, incorporating International Accounting 
Standards (IAS) and Interpretations (collectively IFRS), as endorsed by the European Union, and therefore comply with Article 4 of 
the EU IAS Regulation.
The consolidated financial statements have been prepared on a historical cost basis except for derivative financial instruments and 
equity-settled share-based payments that have been measured at fair value. The consolidated financial statements are presented in 
pounds sterling and all values are rounded to the nearest thousand except when otherwise indicated.
The preparation of financial statements in accordance with generally accepted accounting principles requires the use of estimates and 
assumptions that affect the reported amount of assets and liabilities at the balance sheet date and the reported amounts of revenues 
and expenses during the reporting year. These key estimates and assumptions are set out in note 3. Although these estimates are 
based on management’s best knowledge of the amount, events or actions, actual results may differ from those estimates. 00 00 www.blacks.co.uk www.millets.co.uk 38
Blacks Leisure Group plc  Annual Report and Accounts 2011
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2 Accounting policies - continued
The principal accounting policies adopted are set out below.
 Basis of consolidation 
The consolidated financial statements incorporate the accounts of the Company and its subsidiaries as if they formed a single entity 
(‘the Group’). Intercompany transactions, balances, income and expenses between consolidated Group companies are therefore 
eliminated in full on consolidation. Subsidiaries are included in the consolidation up to the date at which they cease to be controlled 
by the Group, either by way of sale or other means.
 Intangible assets
Goodwill
Goodwill arising on acquisition is capitalised and represents the excess of the fair value of consideration over the Group’s interest in the 
fair value of the identifiable assets, liabilities and contingent liabilities of a subsidiary at the date of acquisition. Goodwill is reviewed for 
impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. 
Goodwill arising before the transition to IFRS has been retained at the previous UK GAAP amount subject to being tested for 
impairment at that date.
Internally generated intangible assets
An internally generated intangible asset arising from the Group’s development (from the development phase of an internal project) 
shall be recognised if, and only if, all the conditions below, from IAS38, can be demonstrated:
h  the technical feasibility of completing the intangible asset so that it will be available for use or sale;
h  the intention to complete the intangible asset and use or sell it;
h  the ability to use or sell the intangible asset;
h   how the intangible asset will generate probable future economic benefits. Amongst other things, the Group must demonstrate 
the existence of a market for the output of the intangible asset itself or, if it is to be used internally, the usefulness of the 
intangible asset;
h   the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible 
asset; and
h   the ability to measure reliably the expenditure attributable to the intangible asset during its development.
Internally generated intangible assets are amortised on a straight-line basis over their useful lives of three years. Where no asset can 
be recognised, expenditure is recognised as an expense in the period in which it occurred. 
Trademarks
Trademarks are measured initially at purchase cost and are amortised on a straight-line basis over their estimated useful lives of 
between five and ten years.
Website development costs
Website development costs are accounted for as intangible assets where the criteria of IAS38 have been met. Intangible assets 
are valued at cost and are amortised on a straight-line basis over three years unless the asset can be demonstrated to have an 
indefinite life. Intangible assets with finite lives are reviewed for impairment if there is any indication that the carrying value may not 
be recoverable. Intangible assets with an indefinite useful life are tested for impairment annually.
 Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any provision for impairment in value. 
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as follows:
h  freehold land is not depreciated;
h  freehold buildings are depreciated to their estimated residual values over periods up to fifty years;
h   leasehold improvements are depreciated to their estimated residual values over the period of the associated lease or over the 
asset life if shorter;
h  fixtures and equipment are depreciated over four to fifteen years; and
h  motor vehicles are depreciated over four to six years.
Notes to the Financial Statements
for the year ended 26 February 2011 00 00 39
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2 Accounting policies - continued
The carrying values of property, plant and equipment are reviewed for impairment if events or changes in circumstances indicate 
that their carrying value may not be recoverable. Any impairment in the value of property, plant and equipment is charged to the 
statement of comprehensive income.
Profits and losses on disposal of property, plant and equipment, which reflect the difference between net selling price and the 
carrying amount at the date of disposal, are recognised in the statement of comprehensive income.
 Impairment of non-financial assets
The carrying values of assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If 
any such indication exists, the recoverable amount of the asset is estimated. Where the asset does not generate cash flows which 
are independent from other assets, the recoverable amount of the cash-generating unit to which the asset belongs is estimated.
The recoverable amount of a non-financial asset is the higher of its fair value less costs to sell and its value-in-use. Value-in-use is 
the present value of the future cash flows expected to be derived from an asset or cash-generating unit.
An impairment loss is recognised in the statement of comprehensive income whenever the carrying amount of an asset or cash-
generating unit exceeds its recoverable amount.
Goodwill is tested for impairment annually and whenever there is an indication that the asset may be impaired. Any impairment 
recognised on goodwill is not reversed.
 Inventories 
Inventories are stated at the lower of cost and net realisable value. The cost includes all costs in bringing each product into the 
business. Inventories are valued on a weighted average basis and this is not deemed to be materially different to that which would 
be calculated on a ‘first in, first out’ basis. Net realisable value is defined as the estimated selling price less any direct costs of 
disposal. Provision is made for obsolete, slow-moving or damaged items where appropriate.
 Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of a past event; it is probable 
that an outflow of resources will be required to settle the obligation; and a reliable estimate can be made of the amount of the 
obligation.
Provisions for onerous leases are recognised for the expected lease or lease related payments that the Group will incur prior to any 
assignment, sub-lease or lease expiry plus any additional costs in relation to the disposal of or exit from the lease.
Minimal structural adaptations are generally made to properties during the lease term and they are kept in a good state of repair 
with general ongoing maintenance costs, including amounts to ‘make good’ wear and tear, being charged to the statement of 
comprehensive income as incurred. Dilapidations costs may however be incurred towards the end of a lease for remedial works 
required to bring a leased property back into the same condition as when the lease commenced. Provisions are recognised for 
dilapidations when the likelihood of an outflow of economic benefits relating to amounts expected to be payable under a legal 
obligation in a lease becomes more likely than not and a reliable estimate of the provision can be made. At each period end, the 
Group calculates its best estimate of the expenditure it expects to incur and revises its provisions, discounting where the effect is 
material. The provision is made for the likely cost of such works or a settlement with the landlord and may be determined based 
upon the Directors’ own assessment or by reference to the serving of a dilapidations schedule by the landlord.
Provisions for CVA related rates obligations are recognised for all ongoing rates liabilities in respect of properties vacated under the 
terms of the CVAs in the prior financial year. The provision is calculated as set out in note 3.
 Foreign currency
Transactions entered into by Group entities in a currency other than the currency of the primary economic environment in which they 
operate (their ‘functional currency’) are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets 
and liabilities are translated at the rates ruling at the reporting date. Exchange differences arising on the retranslation of unsettled 
monetary assets and liabilities are recognised immediately in the statement of comprehensive income, except for foreign currency 
borrowings qualifying as a hedge of a net investment in a foreign operation, in which case exchange differences are recognised in 
other comprehensive income and accumulated in reserves. 00 00 www.blacks.co.uk www.millets.co.uk 40
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2 Accounting policies - continued
When a gain or loss on a non-monetary item is recognised in other comprehensive income, any exchange component of that gain 
or loss shall be recognised in other comprehensive income. Conversely, when a gain or loss on a non-monetary item is recognised 
in the statement of comprehensive income, any exchange component of that gain or loss shall be recognised in the statement of 
comprehensive income.
On consolidation, the results of overseas operations are translated into sterling at rates approximating to those ruling when the 
transactions took place. All assets and liabilities of overseas operations, including goodwill arising on the acquisition of those 
operations, are translated at the rate ruling at the reporting date. Exchange differences arising on translating the opening net 
assets at opening rate and the results of overseas operations at actual rate are recognised in other comprehensive income and 
accumulated in the foreign exchange reserve.
Exchange differences recognised in the statement of comprehensive income of Group entities’ separate financial statements on 
the translation of long-term monetary items forming part of the Group’s net investment in the overseas operation concerned are 
reclassified to the foreign exchange reserve on consolidation.
On disposal of a foreign operation, the cumulative exchange differences recognised in the foreign exchange reserve relating to that 
operation up to the date of disposal are transferred to the consolidated statement of comprehensive income as part of the profit or 
loss on disposal.
 Revenue recognition 
Revenue represents goods sold to external customers, net of value added tax and less an allowance for expected returns. The 
revenue arises from the sale of Outdoor and Boardwear clothing, footwear and equipment. Revenue is recognised in the statement 
of comprehensive income when the significant risks and rewards of ownership have been transferred. This is generally deemed to 
be at the point-of-sale for in-store sales or at the time of delivery to the end customer in the case of internet sales. Revenue from 
gift vouchers and gift cards sold by the Group is only recognised upon the redemption of the gift voucher or gift card against the 
purchase of goods.
 Leases
Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. All 
other leases are classified as finance leases. Rental payments in respect of operating leases are charged against operating profit on 
a straight-line basis over the period of the lease. Lease incentives are also credited over the lease term on a straight-line basis.
Assets used by the Group which have been funded through finance leases are capitalised in property, plant and equipment and the 
resulting lease obligations are included in payables. The associated assets are depreciated over their useful lives and the interest 
element of the rental obligations is charged to the statement of comprehensive income over the period of the lease and represents a 
constant proportion of the balance of capital repayments outstanding.
 Capital receipts
Capital receipts are a form of lease inducement received in cash which are credited to operating profit on a straight-line basis over 
the full term of the lease.
 Exceptional items
These are material items which derive from events or transactions that fall within the ordinary activities of the Group but are not 
directly related to the delivery of the Group’s products to its customers and which individually or, if of a similar type, in aggregate, 
merit separate presentation by virtue of their size or incidence to allow Shareholders to understand better the elements of financial 
performance in the year, to facilitate comparison with prior periods and to assess underlying trends in financial performance. These 
items are usually derived from one-off events or a change in assumptions made in critical accounting estimates and judgements.
 Pensions and other post-employment benefits 
The Group operates defined contribution schemes. The assets of the schemes are held separately from those of the relevant 
companies.
Contributions to the defined contribution schemes are charged to the statement of comprehensive income in the year in which they 
become payable.
Notes to the Financial Statements
for the year ended 26 February 2011 00 00 41
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2 Accounting policies - continued
 Equity-settled share-based payment transactions
Certain employees and Directors of the Group receive equity-settled remuneration in the form of equity-settled share-based payment 
transactions, whereby employees render services in exchange for shares or rights over shares. The cost of equity-settled transactions 
with employees is measured by reference to the fair value, determined using the Black–Scholes option pricing model, the Monte 
Carlo model or the Binomial model as appropriate, at the date at which they are granted. The cost of equity-settled transactions 
is recognised, together with a corresponding increase in equity, over the period in which the non-market vesting conditions are 
expected to be fulfilled, ending on the relevant vesting date. The cumulative expense recognised for equity-settled transactions at 
each reporting date until the vesting date reflects the extent to which the vesting period has expired and is adjusted to reflect the 
Directors’ best available estimate of the number of equity instruments that will ultimately vest based upon non-market conditions.
Where the terms and conditions of options are modified before they vest, the movement in the fair value of the options, measured 
immediately before and after the modification, is also charged to the statement of comprehensive income over the remaining vesting 
period. New share options issued are treated as a replacement where, amongst other things, the new share options are with the 
same participants as the cancelled options, the new share options are issued at a fair value that is broadly consistent with the fair 
value of the cancelled options determined at the cancellation date, the issue and cancellation of the options are part of the same 
arrangement (and each will only take place upon the occurrence of the other) and the commercial substance of the cancellation of 
the options is that they are replaced by the issue of the new options.
The Group has taken advantage of the transitional provisions of IFRS2 in respect of equity-settled awards and has applied IFRS2 
only to equity-settled awards granted after 7 November 2002 that had not vested before 1 January 2005.
 Shares held by Blacks Leisure Group Employee Benefit Trusts
The Blacks Leisure Group Employee Benefit Trusts provide for the issue of shares to Group employees under certain of the share 
option schemes. Shares in the Company held by such trusts are included in the balance sheet, under ‘Reserve for own shares’, at 
cost as a deduction from equity.
 Tax
The tax charge represents both the income tax payable, based on profits for the year, and deferred tax. Deferred tax is recognised in 
full in respect of all temporary differences between the tax base of the Group’s assets and liabilities and their carrying amounts that 
have originated but not been reversed by the balance sheet date. No deferred tax is recognised if the temporary difference arises 
from goodwill or the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the 
transaction, affects neither the accounting profit nor taxable profit or loss. Deferred tax is recognised in respect of taxable temporary 
differences associated with investments in subsidiaries except where the timing of the reversal of the temporary differences can be 
controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which the deductible 
temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at each balance sheet date and 
reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax 
asset to be utilised in the near future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or 
the liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date.
Tax relating to items recognised directly in equity is itself recognised in equity and not in the statement of comprehensive income.
 
 Financial instruments
Trade and other receivables
Trade receivables are recognised and carried at original invoice value less an allowance for any expected uncollectable amounts. An 
estimate for doubtful debts is made when objective evidence of an impairment exists. Bad debts are written off when identified.
Cash and cash equivalents
Cash and short-term deposits recorded on the balance sheet comprise cash at bank and in hand and short-term deposits with 
an original maturity of three months or less. For the purposes of the consolidated cash flow statement, cash and cash equivalents 
consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. 00 00 www.blacks.co.uk www.millets.co.uk 42
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Other financial liabilities
Trade payables are recognised and carried at original invoice cost and are a short-term liability of the Group. 
Preference Shares are recognised at the amount advanced where this represents fair value. Preference Shares are subsequently 
accounted for at amortised cost.
Derivative financial instruments and hedge accounting
Derivative financial instruments used by the Group are stated at fair value. Hedges are classified as either fair value hedges when 
they hedge the exposure to changes in the fair value of a recognised asset or liability, or cash flow hedges where they hedge 
exposure to variability in cash flows that are either attributable to a particular risk associated with a recognised asset or liability or a 
forecast transaction.
Gains or losses from remeasuring fair value hedges, which meet the conditions for hedge accounting, are recorded in the statement 
of comprehensive income, together with the corresponding changes in the fair value of the hedged instruments attributable to the 
hedged risk. 
The portion of any gains or losses of cash flow hedges which meet the conditions for hedge accounting and are determined to be 
effective hedges are recognised directly in equity. The gains or losses relating to the ineffective portion are recognised immediately in 
the statement of comprehensive income. 
When the hedged firm commitment results in the recognition of an asset or a liability then, at the time the asset or liability is 
recognised, the associated gains or losses that had previously been recognised in equity are included in the initial measurement of 
the acquisition cost or other carrying amount of the non-financial asset or liability. For all other cash flow hedges, the gains or losses 
that are recognised in equity are transferred to the statement of comprehensive income in the same year in which the hedged firm 
commitment affects the net results. 
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer qualifies 
for hedge accounting. At that point in time, any cumulative gain or loss on the hedging instrument recognised in equity is kept in 
equity until the forecasted transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss 
recognised in equity is transferred to the statement of comprehensive income.
For derivatives that do not qualify for hedge accounting, any gains or losses arising from changes in fair value are recognised 
immediately in the statement of comprehensive income.
De-recognition of financial liabilities
Where the terms of an existing financial liability that is carried at amortised cost are renegotiated, the accounting will be determined by 
the extent to which the terms of the original liability have been modified. The modified terms are deemed to be substantially different if 
there has been either a substantial qualitative change in the loan terms or if the net present value of the cash flows under the modified 
terms of the liability (including any fees paid and received) is at least 10% different from the net present value of the remaining cash 
flows of the liability prior to the modification, both discounted at the original effective interest rate of the original liability. 
If the cash flows and other terms are not substantially different, the original liability continues to be recognised and the difference 
between the amortised cost of the debt instrument at the date of the modification and the present value of the new debt instrument, 
discounted by the original effective interest rate, is recognised in the statement of comprehensive income in future periods through 
the revised effective interest rate. 
Where either the cash flow or other terms are substantially different, the exchange with the lender is accounted for as an 
extinguishment of the original liability and the recognition of a new liability. Any costs or fees incurred are recognised as part of the 
gain or loss on that extinguishment and do not adjust the carrying amount of the new liability.
Notes to the Financial Statements
for the year ended 26 February 2011 00 00 43
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Our Financials Our Governance Our Business
3 Critical accounting estimates and judgements
The preparation of consolidated financial statements under IFRS requires the Group to make estimates and assumptions that affect 
the application of policies and reported amounts. Estimates and judgements are continually evaluated and are based on historical 
experience and other factors including expectations of future events that are believed to be reasonable under the circumstances. 
Actual results may differ from these estimates. The estimates and assumptions which have a significant risk of causing a material 
adjustment to the carrying amount of assets and liabilities are outlined below.
 Impairment of goodwill
The Group is required to test, at least annually, whether goodwill has suffered any impairment. The recoverable amount is 
determined based on value-in-use calculations. The use of this method requires the estimation of future cash flows and the choice 
of a suitable discount rate in order to calculate the present value of these cash flows. Actual outcomes could vary.
 Impairment of property, plant and equipment
Property, plant and equipment are reviewed for impairment if events or changes in circumstances indicate that the carrying amount 
may not be recoverable. When a review for impairment is conducted, the recoverable amount is determined based on value-in-use 
calculations prepared on the basis of management’s assumptions and estimates.
 Depreciation of property, plant and equipment
Depreciation is provided so as to write down the assets to their residual values over their estimated useful lives as set out in note 2. 
The selection of these estimated lives requires the exercise of management judgement.
 Inventory valuation
Inventories are valued at the lower of weighted average cost and net realisable value. Net realisable value includes, where necessary, 
provisions for slow-moving and damaged stocks. The provision represents the difference between the cost of stock and its 
estimated recoverable value, based on ageing. Calculation of these provisions requires judgements to be made, which include 
forecast consumer demand, the promotional, competitive and economic environment, and inventory loss trends.
 Equity-settled share-based payments
The charge for equity-settled share-based payments is calculated in accordance with estimates and assumptions which are 
described in note 29. The option valuation models used require highly subjective assumptions to be made including the future 
volatility of the Company’s share price, expected dividend yields, risk-free interest rates and expected staff turnover. The Directors 
draw upon a variety of external sources to aid them in the determination of the appropriate data to use in such calculations. 
The option pricing models used are the Black–Scholes option pricing model, the Monte Carlo model and the Binomial model. These 
are chosen to reflect the nature of the specific share schemes.
During the vesting period of the share options, an assessment is required of the likelihood of whether non-market performance 
conditions will be met, which affects the estimate of the number of share options that will vest and hence the amount charged to the 
statement of comprehensive income.
 Provisions for onerous leases
If the Group vacates or plans to vacate a store or other property prior to the expiry of the related lease, it records a provision for the 
expected lease or lease related payments that the Group will incur prior to any assignment or sub-lease of the property plus any 
inducement that may be required, and for any expected shortfall in amounts that are anticipated to be receivable from a sub-lease. 
Such a calculation requires a judgement as to the timing and duration of the expected vacancy periods and the amount and timing 
of future potential sub-lease income. When making these judgements, the Directors consider a number of factors, including the 
landlord, the location and condition of the property, the terms of the lease, the specific local marketplace demand and the economic 
environment.
  00 00 www.blacks.co.uk www.millets.co.uk 44
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3 Critical accounting estimates and judgements - continued
 Provisions for rates obligations
In line with the terms of the CVAs, the Group has a legal commitment to pay business rates on properties that it vacated under these 
arrangements up until such a time as the landlord is able to re-let the site. Provision is made for the expected discounted value of 
this obligation. Such a calculation requires a judgement as to the duration of the expected vacancy period. When making these 
judgements the Directors consider a number of factors, including the rental value, the location and condition of the property, the 
terms of the lease, the specific local marketplace demand and the economic environment.
 Dilapidations
The requirement for dilapidation provisions is assessed by management on an ongoing basis following property reviews using all 
the information available. Typically, dilapidation provisions are not required in the early years of a lease but may be necessary later, 
when a probable outflow of economic benefits can be identified and that outflow can be reliably estimated. This may occur when the 
lease is shortly due for renewal, where the Group has no intention to renew the lease or where the Group has an indication that the 
landlord will not be renewing the lease. A provision will be recognised earlier if the Directors consider an obligation to have arisen.
 Exceptional items
Further details on matters considered critical in relation to items presented as exceptional are given above and in note 8.
4 Revenue and other operating income
    Continuing  Continuing Discontinued
    operations Total operations operations Total
    2011 2011 2010 2010 2010
    £’000 £’000 £’000 £’000 £’000
Sale of goods    201,933  201,933  240,517  8,531  249,048
Other operating income   899  899  1,109  —  1,109
Other operating income consists mainly of sub-let property income.
5 Segment information
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. 
The chief operating decision maker has been identified as the Board of Directors, as a collective.
The Group’s two core areas of operation are described as below:
Operation Nature of operation
Outdoor Retail of Outdoor clothing, footwear and equipment
Boardwear Retail of Boardwear clothing, footwear and equipment
Inter-segment sales between business segments are entered into on an arm’s length basis in a manner similar to transactions with 
third parties.
The segmental analysis is presented including both continuing and discontinued operations. Results in the prior year which arose from 
discontinued operations, which are summarised in note 35, are included within the Boardwear segment in the comparative period.
Notes to the Financial Statements
for the year ended 26 February 2011 00 00 45
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5 Segment information - continued
      Continuing  Continuing
      operations Total operations Total
      2011 2011 2010 2010
OUTDOOR     £’000 £’000 £’000 £’000
Revenue
Total revenue     194,792  194,792  223,412  223,412 
Sales to external customers    194,792  194,792  223,412  223,412 
Profit
Segment loss     (188) (188) (6,218) (6,218)
Exceptional items:
— Impairment of property, plant and equipment   (433) (433) (5,879) (5,879)
— Other exceptional operating items    3,977  3,977  (9,860) (9,860)
Operating profit/(loss)    3,356  3,356  (21,957) (21,957)
Assets and liabilities
Segment assets    94,629  94,629  96,959  96,959 
Segment liabilities    (44,084) (44,084) (59,024) (59,024)
Total net assets    50,545  50,545  37,935  37,935 
     Continuing  Continuing Discontinued
     operations Total operations operations Total
     2011 2011 2010 2010 2010
BOARDWEAR    £’000 £’000 £’000 £’000 £’000
Revenue
Total revenue    7,141  7,141  17,105  10,616  27,721 
Inter-segment sales   —  —  —  (2,085) (2,085)
Sales to external customers   7,141  7,141  17,105  8,531  25,636 
Profit
Segment loss    (1,911) (1,911) (3,697) (2,601) (6,298)
Inter-segment profit on stock   —  —  —  312  312 
Exceptional items:
— Impairment of property, plant and equipment  (392) (392) (450) (798) (1,248)
— Other exceptional operating items   (1,222) (1,222) (3,119) (159) (3,278)
Operating loss   (3,525) (3,525) (7,266) (3,246) (10,512)
Assets and liabilities
Segment assets   1,360  1,360  4,124  —  4,124 
Segment liabilities   (2,947) (2,947) (7,334) —  (7,334)
Total net liabilities   (1,587) (1,587) (3,210) —  (3,210) 00 00 www.blacks.co.uk www.millets.co.uk 46
Blacks Leisure Group plc  Annual Report and Accounts 2011
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5 Segment information - continued
     Continuing  Continuing Discontinued
     operations Total operations operations Total
     2011 2011 2010 2010 2010
UNALLOCATED   £’000 £’000 £’000 £’000 £’000
Profit
Segment loss    (1,715) (1,715) (2,122) —  (2,122)
Exceptional items:
— Other exceptional operating items   (609) (609) (6,851) —  (6,851)
Operating loss   (2,324) (2,324) (8,973) —  (8,973)
Net finance costs  
 (2010: including exceptional finance charges)  (2,766) (2,766) (5,377) (122) (5,499)
Loss before tax   (5,090) (5,090) (14,350) (122) (14,472)
Tax expense    (229) (229) (2,486) (5) (2,491)
Loss for the financial year   (5,319) (5,319) (16,836) (127) (16,963)
Assets and liabilities
Segment assets   1,654  1,654  1,443  —  1,443 
Segment liabilities   (16,624) (16,624) (15,733) —  (15,733)
Total net liabilities   (14,970) (14,970) (14,290) —  (14,290)
     Continuing  Continuing Discontinued
     operations Total operations operations Total
     2011 2011 2010 2010 2010
GROUP    £’000 £’000 £’000 £’000 £’000
Revenue
Total revenue    201,933  201,933  240,517  10,616  251,133 
Inter-segment sales   —  —  —  (2,085) (2,085)
Sales to external customers   201,933  201,933  240,517  8,531  249,048
Profit
Segment loss    (3,814) (3,814) (12,037) (2,601) (14,638)
Inter-segment profit on stock   —  —  —  312  312 
Exceptional items:
— Impairment of property, plant and equipment  (825) (825) (6,329) (798) (7,127)
— Other exceptional operating items   2,146  2,146  (19,830) (159) (19,989)
Operating loss   (2,493) (2,493) (38,196) (3,246) (41,442)
Net finance costs 
 (2010: including exceptional finance charges)  (2,766) (2,766) (5,377) (122) (5,499)
Loss before tax   (5,259) (5,259) (43,573) (3,368) (46,941)
Tax expense    (229) (229) (2,486) (5) (2,491)
Loss for the financial year   (5,488) (5,488) (46,059) (3,373) (49,432)
Assets and liabilities
Segment assets   97,643  97,643  102,526  —  102,526 
Segment liabilities   (63,655) (63,655) (82,091) —  (82,091)
Total net assets   33,988  33,988  20,435  —  20,435 
Notes to the Financial Statements
for the year ended 26 February 2011 00 00 47
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6 Operating loss
Operating loss has been arrived at after charging/(crediting):
     Continuing  Continuing Discontinued 
     operations Total operations operations Total
     2011 2011 2010 2010 2010
    £’000 £’000 £’000 £’000 £’000
Employee benefits expense (note 7)   39,091  39,091  47,187  989  48,176
Net foreign exchange gains   (485) (485) (1,233) —  (1,233)
Cost of inventories recognised as an expense  97,864  97,864  113,541  6,271  119,812
Write-downs of inventories recognised as an expense  6,190  6,190  4,132  —  4,132
Depreciation of property, plant and equipment:
— Owned    4,456  4,456  5,108  157  5,265 
— Leased    680  680  680  —  680 
Impairment of property, plant and equipment  825  825  6,329  798  7,127
(Profit)/loss on disposal of property, plant and 
 equipment    (201) (201) 1,050  —  1,050
Amortisation of intangible assets (note 15)  7  7  210  —  210 
Loss on disposal of other intangible assets  —  —  54  —  54 
Operating lease expense:
— Plant and equipment   349  349  443  11  454
— Property (2010: excluding post closure costs  
 charged as exceptional items)   28,235  28,235  36,115  1,580  37,695
Auditors’ fees
Fees payable to the Company’s Auditors for the audit 
 of the Company’s annual accounts    54    54 
Fees payable in relation to the audit of the 
 Company’s subsidiaries    77    81 
Other services relating to tax    75    57 
Other advisory and regulatory services   163    392
Total     369    584 
7 Employee benefits expense
     Continuing  Continuing Discontinued 
     operations Total operations operations Total
     2011 2011 2010 2010 2010
    £’000 £’000 £’000 £’000 £’000
Wages and salaries   36,043  36,043  43,503  922  44,425
Social security costs   2,372  2,372  3,038  67  3,105
Pension costs (note 29)   277  277  396  —  396
     38,692  38,692  46,937  989  47,926 
Equity-settled share-based payments expense 
 (note 29)    399  399  250  —  250
Total    39,091  39,091  47,187  989  48,176  00 00 www.blacks.co.uk www.millets.co.uk 48
Blacks Leisure Group plc  Annual Report and Accounts 2011
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7 Employee benefits expense - continued
The average number of employees in the various business sectors, including Directors, was as follows:
       2011  2010
     Full-time Part-time Full-time Part-time
Outdoor     1,035  2,740  1,224  3,019
Boardwear     34  68  98  190 
Central services    6  2  3  2
Total     1,075  2,810  1,325  3,211 
        2011 2010
       Number Number
Full-time
— Management and administration      128  152
— Selling and distribution      947  1,173
Part-time       2,810  3,211
Total       3,885  4,536 
8 Exceptional operating items
The Group has recorded a net exceptional operating credit in relation to continuing operations in the year of £1,321,000 (2010: 
£26,159,000 net charge) as set out below:
        2011 2010
       £’000 £’000
CVA related rates obligations      (5,376) 10,755 
Restructuring and impairment costs      4,337  6,329 
Other CVA related items      —  18,420 
Release of onerous lease provision      —  (10,153)
Professional fees      243  808 
Proceeds from Sandcity administration     (525) — 
Total net (credit)/charge      (1,321) 26,159 
Year ended 27 February 2010
In anticipation of the CVAs, the carrying value of property, plant and equipment at the closing stores was impaired in full to the 
extent that they would not be utilised elsewhere within the Group. This resulted in a charge in the period of £7,127,000, of which 
£6,329,000 as presented above related to continuing operations. Under the terms of the CVAs, whilst certain property rentals were 
passed back to landlords, the Group remained liable for certain property related obligations. Landlords of such properties were able 
to claim during May and July 2010 against a compromise fund, capped at £7,250,000, which approximated to around 6 months 
of rent. This was provided for in the year to 27 February 2010 and was subsequently settled in cash during the year to 26 February 
2011. Further, the Group remained liable for business rates on these properties until such a time as the landlord was able to re-let 
them. This resulted in a provision of £10,755,000 being created, reflecting the Directors’ best estimate at 27 February 2010 of the 
likely value of this obligation. 
The complex nature of the CVAs and related refinancing of the business resulted in significant levels of professional fees being 
incurred or, in the case of the administering of the CVA compromise fund, being provided for. The total professional fees of 
£5,930,000 were presented as exceptional operating items in respect of this.
The CVAs resulted in the closure of 88 retail stores. Costs directly associated with this included the costs of redundancies, clearing 
of the premises and a write-off of certain stocks. These store closure costs totalled £3,458,000 and were presented as exceptional 
operating items.
Notes to the Financial Statements
for the year ended 26 February 2011 00 00 49
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8 Exceptional operating items - continued
Further costs in connection with the CVAs, which totalled £1,782,000, were also presented as exceptional operating items. These 
included the write off of rent, rates and other prepayments (relating to the period post closure), and other store costs relating to the 
period since the stores ceased trading. 
As a result of the CVAs, the properties against which onerous lease provisions had previously been made were passed back to 
the landlords and, accordingly, the onerous lease provision held as at that time of £10,153,000 was released and credited to 
the statement of comprehensive income. Owing to the unusual nature and significant value, this, and other CVA related costs as 
described below, were presented on the face of the statement of comprehensive income as exceptional items within the operating 
result.
A general meeting to approve a Placing and Open Offer of Ordinary Shares was adjourned indefinitely on 24 February 2010 and 
accordingly, professional fees in connection with this transaction were expensed in full at the year end, resulting in an exceptional 
charge of £808,000. A new Firm Placing and Open Offer was subsequently successful in the year to 26 February 2011 and the 
direct costs of which were included within share premium. The previously charged costs of £808,000 were not reversed to share 
premium given they arose from a separate and aborted share issue.
Year ended 26 February 2011
As described above, a charge was recorded during the year to 27 February 2010 relating to a provision in respect of ongoing rates 
obligations at properties which were closed during October and November 2009 under the CVAs. Whilst the Group was no longer 
liable for rent in respect of these leases, it remained obligated to pay business rates until such a time as the landlord is able to re-let 
the site. The provision at 27 February 2010 was calculated based on a store-by-store review of the expected period to re-let which 
included seeking and considering advice from third parties where appropriate. The Board considers that the provision recognised at 
that date was robust in that its estimation was the result of a detailed exercise that took into account all significant known factors, 
including the economic environment, that were relevant at that time. During the year, the Group has been assisting landlords in 
finding new tenants for these properties and the sites have been able to be re-let more quickly than had been anticipated when the 
provision was initially determined. Indeed, at the end of the financial year, only 38 of the initial 101 leases remain with the Group. The 
provision has therefore been reassessed and, accordingly, an amount of £5,376,000 has been released from the provision at  
26 February 2011 and is recorded within exceptional operating items.
The Directors have commenced a plan to restructure certain operations, including a plan to exit fully from the Boardwear segment 
during the coming months. Provisions in relation to this have only been made within these financial statements to the extent that 
the criteria of IAS37 and other relevant accounting standards have been met. The exceptional charge of £4,337,000 during the year 
in respect of this restructuring includes the following items; redundancy costs of £395,000 relating mainly to head office functions 
where IAS37 criteria had been met, a provision of £1,107,000 for onerous lease obligations at three properties, impairment of 
property, plant and equipment of £825,000, dilapidations costs of £305,000 and provisions against the carrying values of specific 
Boardwear inventories of £1,705,000. Given the restructuring plan for the exit from Boardwear was not fully committed at the end 
of the financial year, in the context of IAS37 recognition criteria, provision for further costs of this exit, such as redundancy and costs 
of exiting leases, has not been included within these financial statements. Given the significant value of these charges, and their 
nature being strategic and one-off rather than incurred in the normal course of business, these have been presented as exceptional 
operating items within the statement of comprehensive income.
The Company announced on 19 October 2010 that it had been approached by several parties regarding a possible offer for the 
Company or an offer to acquire certain of the trading activities and related assets of the Group. A number of indicative proposals 
were received and, whilst the Board announced on 26 January 2011 that these discussions had been terminated, professional fees 
were necessarily incurred relating to this process. These costs, which amount to £243,000, have been presented as exceptional 
operating charges as above.
During the year, the Company has received an amount of £25,000 as part proceeds from the administration of Sandcity Limited,  
a former wholly-owned subsidiary which formerly traded within the Boardwear segment and was placed into administration on  
23 September 2009. All intercompany and other receivables relating to Sandcity Limited were provided for in full at 27 February 
2010 as part of the loss recorded on the deconsolidation of that company, reflecting the uncertainty over any recovery. Further to 
this, and based on discussions with the administrators of that company, the Directors have accrued at the year end an additional 
amount of £500,000 of proceeds from this administration, reflecting the further minimum amount which they believe they can 
confidently and reasonably expect to receive over the coming period. 00 00 www.blacks.co.uk www.millets.co.uk 50
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9 Finance income and costs
     Continuing  Continuing Discontinued
     operations Total operations operations Total
     2011 2011 2010 2010 2010
    £’000 £’000 £’000 £’000 £’000
Bank loans and overdrafts   1,935  1,935  5,051  122  5,173
Interest on obligations under finance leases  87  87  164  —  164
Unwinding of discount on provisions   720  720  642  —  642 
Dividend on Preference Shares   89  89  89  —  89
Total finance cost   2,831  2,831  5,946  122  6,068 
Bank interest receivable   (41) (41) (569) —  (569)
Unwinding of discount on deferred receivables  (24) (24) —  —  —
Total finance income   (65) (65) (569) —  (569)
Net finance cost   2,766  2,766  5,377  122  5,499
Finance costs on bank loans and overdrafts in the prior period included £3,032,000 which related to the value of bank fees and 
warrants upon the agreement of a new banking facility as part of the CVAs. These were presented in the prior year as exceptional 
charges, within finance costs.
10 Tax expense
A reconciliation of tax expense, recognised in the consolidated statement of comprehensive income, applicable to loss before tax at 
the statutory tax rate to the tax expense at the Group’s effective tax rate for the year was as follows:
       2011 2010 
       £’000 £’000
Loss before tax from continuing operations     (5,259) (43,573)
Loss before tax from discontinued operations     —  (3,368)
Loss before tax      (5,259) (46,941)
Tax at current UK tax rate of 28% (2010: 28%)     (1,473) (13,143)
Permanent differences      137  4,792
Provision not allowable for tax purposes     —  (2,321)
Depreciation in excess of capital allowances     1,247  3,096
Other temporary differences      1  8
Tax losses       126  7,568 
Total current tax      38  — 
Deferred tax
Relating to origination and reversal of temporary differences    191  2,491
Total tax expense      229  2,491 
Tax relating to Sandcity Limited (discontinued operation, see note 35)    —  (5)
Tax expense in respect of continuing operations     229  2,486 
Notes to the Financial Statements
for the year ended 26 February 2011 00 00 51
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10 Tax expense - continued
Tax on each component of other comprehensive income is as follows:
       2011 2010 
       £’000 £’000
Current tax
Current tax       —  — 
Total current tax      —  — 
Deferred tax
Tax on items transferred from equity relating to cash flow hedges    60  (202)
Tax on items taken directly to equity relating to cash flow hedges    202  352 
Total deferred tax      262  150 
Total income tax recognised directly in other comprehensive income   262  150 
Deferred tax asset
The deferred tax asset relates to the following:
     Consolidated Consolidated statement of 
     balance sheet comprehensive income
      2011 2010 2011 2010
     £’000 £’000 £’000 £’000
Short-term temporary differences    425  616  191  2,491
Revaluations of foreign exchange contracts  
 (cash flow hedges) to fair value    60  (202)
Net deferred tax asset    485  414 
Deferred tax expense      191  2,491
The movement in the deferred tax asset is analysed as follows:
        £’000
Deferred tax asset at 27 February 2010      414 
Charged to the consolidated statement of comprehensive income     (191)
Movement charged directly to equity in respect of foreign currency forward contracts    262 
Deferred tax asset at 26 February 2011      485 
The Group has capital losses arising in the UK of £6,640,000 (2010: £7,140,000) that are available indefinitely for offset against future 
chargeable gains. Deferred tax assets have not been recognised in respect of these losses as they may not be used to offset taxable 
trading profits elsewhere in the Group and they have arisen in subsidiaries that have been loss-making for some time.
Deferred tax on revaluations of foreign exchange contracts (cash flow hedges) to fair value is taken directly to equity.
The Directors expect to recover the recognised deferred tax asset over the foreseeable future. There are no other recognised 
deferred tax assets or liabilities in the year (2010: £nil). Potential deferred tax assets in respect of tax losses, which at 26 February 
2011 amount to approximately £33 million (2010: £32 million), have not been recognised. 00 00 www.blacks.co.uk www.millets.co.uk 52
Blacks Leisure Group plc  Annual Report and Accounts 2011
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11 Loss per share
Basic loss per share is calculated by dividing the net loss for the year attributable to Ordinary Shareholders by the weighted average 
number of Ordinary Shares in issue during the year.
Since the Group was loss-making in the current year there is no dilution effect of share options and warrants. The Group has 
3,805,841 share options (2010: 3,982,140 and 2,131,905 warrants) over Ordinary Shares outstanding at the end of the year, that 
may become dilutive.
       2011 2010
Weighted average number of Ordinary Shares of 1p each for basic loss per share   83,706,441  42,293,525
Effect of dilution - share options (2010: and warrants)     —  — 
Adjusted weighted average number of Ordinary Shares for diluted loss per share   83,706,441  42,293,525 
      Loss  Loss per share
      2011 2010 2011 2010
Continuing operations    £’000 £’000 pence pence
Loss and basic loss per share    (5,488) (46,059) (6.56) (108.90)
Exceptional items    (1,321) 29,191  (1.58) 69.02 
Tax expense/(credit) on exceptional items   —  2,296  —  5.43 
Loss and basic loss per share excluding exceptional items  (6,809) (14,572) (8.14) (34.45)
      Loss  Loss per share
      2011 2010 2011 2010
Discontinued operations    £’000 £’000 pence pence
Loss and basic loss per share    —  (3,373) —  (7.98)
Exceptional items    —  957  —  2.26 
Loss and basic loss per share excluding exceptional items  —  (2,416) —  (5.72)
      Loss  Loss per share
      2011 2010 2011 2010
Continuing and discontinued operations   £’000 £’000 pence pence
Loss and basic loss per share    (5,488) (49,432) (6.56) (116.88)
Exceptional items    (1,321) 30,148  (1.58) 71.28 
Tax (expense)/credit on exceptional items   —  2,296  —  5.43 
Loss and basic loss per share excluding exceptional items  (6,809) (16,988) (8.14) (40.17)
The additional loss per share information is disclosed as the Board believes that loss per share excluding exceptional items better reflects 
the underlying performance of the business and assists in providing a clearer view of the fundamental performance of the Group.
There have been no other transactions involving Ordinary Shares or potential Ordinary Shares since the reporting date and before the 
completion of these financial statements.
12 Dividends paid and proposed
No dividends have been declared or paid on Ordinary Shares in respect of either the current or prior year.
Preference dividends are charged to the statement of comprehensive income as finance costs, as set out in note 9. 
Notes to the Financial Statements
for the year ended 26 February 2011 00 00 53
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13 Property, plant and equipment
     Freehold land Leasehold Fixtures and Motor 
     and buildings improvements equipment vehicles T otal
    £’000 £’000 £’000 £’000 £’000
At 1 March 2009, net of accumulated depreciation  1,300  2,620  28,616  20  32,556
Additions    —  (82) 3,027  —  2,945
Disposals    (2,355) (3,852) (30,617) (66) (36,890)
Impairment losses   —  (1,172) (5,955) —  (7,127)
Depreciation charge for the year   (19) (1,090) (4,831) (5) (5,945)
Depreciation eliminated on disposal   2,355  3,794  29,625  66  35,840 
Eliminated upon degrouping of subsidiary undertaking (1,281) —  —  —  (1,281)
At 27 February 2010, net of accumulated depreciation —  218  19,865  15  20,098
 
At 28 February 2010, net of accumulated depreciation —  218  19,865  15  20,098
Additions    —  335  5,017  —  5,352 
Disposals    —  (1,943) (11,387) (53) (13,383)
Impairment losses   —  (2) (823) —  (825)
Depreciation charge for the year   —  (230) (4,899) (7) (5,136)
Depreciation eliminated on disposal   —  2,090  11,013  53  13,156 
At 26 February 2011, net of accumulated depreciation —  468  18,786  8  19,262
At 1 March 2009
Cost    3,636  13,070  80,551  159  97,416 
Accumulated depreciation   (2,336)  (10,450)  (51,935)  (139)  (64,860) 
Net carrying amount   1,300  2,620  28,616  20  32,556 
At 27 February 2010
Cost    —  9,136  52,961  93  62,190 
Accumulated depreciation   —  (8,918)  (33,096)  (78)  (42,092)
Net carrying amount   —  218  19,865  15  20,098
At 26 February 2011
Cost    —  2,777  51,342  40  54,159
Accumulated depreciation   —  (2,309)  (32,556)  (32)  (34,897)
Net carrying amount   —  468  18,786  8  19,262
Capital expenditure commitments for property, plant and equipment for which no provision has been made are £775,000  
(2010: £981,000).
Impairment reviews of trading stores are based upon a value-in-use model being used to evaluate the expected future cash flows, 
discounted at 12%, based on actual results in the past 12 months, versus their carrying values in order to determine where there 
might be an indicator of impairment. Further, specific stores which are planned for closure are considered by the Directors for 
impairment. The impairment charge recorded in the year amounted to £825,000 (2010: £7,127,000, of which £6,329,000 was in 
respect of continuing operations). Impairment charges are presented in the consolidated statement of comprehensive income as 
exceptional items within distribution costs (see note 8).
The net carrying amount includes the following assets held under hire purchase and finance leases (note 25):
        2011 2010
       £’000 £’000
Plant and equipment      3,392  4,072
Net carrying amount of assets held under hire purchase and finance leases    3,392  4,072  00 00 www.blacks.co.uk www.millets.co.uk 54
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14 Goodwill
Goodwill acquired through business combinations is allocated to cash-generating units (‘CGU’) identified according to business 
segment.
The carrying amount of goodwill allocated by CGU is presented below:
       Outdoor Boardwear 
       segment segment Total
Cost      £’000 £’000 £’000
At 1 March 2009     34,598  1,754  36,352 
At 27 February 2010     34,598  1,754  36,352 
At 26 February 2011     34,598  1,754  36,352 
       Outdoor Boardwear 
       segment segment Total
Accumulated impairment losses     £’000 £’000 £’000
At 1 March 2009     —  (1,754) (1,754)
At 27 February 2010     —  (1,754) (1,754)
At 26 February 2011     —  (1,754) (1,754)
       Outdoor Boardwear 
       segment segment Total
Net carrying amount     £’000 £’000 £’000
At 1 March 2009     34,598  —  34,598 
At 27 February 2010     34,598  —  34,598 
At 26 February 2011     34,598  —  34,598 
The Group performs an annual review of its goodwill to ensure that its carrying amount is not less than its recoverable amount. The 
recoverable amount is determined with reference to the value-in-use. To estimate this, cash flow projections are based on financial 
budgets prepared by management for a period of three years and extrapolated cash flow projections up to a total of 10 years, with 
an estimated terminal value being applied thereafter. The Directors believe this to be justifiable given the nature of the business and 
the actions and plans both in place and in progress to turnaround the performance of the business. 
The discount rate applied to cash flow projections is 12% (2010: 12%), based on the Group’s weighted average cost of capital. 
The projected growth rate used in extrapolation of cash flow forecasts is 3% (2010: 3%) reflecting the strategic plan of the Group to 
recover negative growth rates of recent years. 
Expected future cash flows are based on reasonable and supportable assumptions and represent management’s best estimate of 
economic conditions existing over the projected period and reflect assumptions that are consistent with the way the discount rate 
has been determined. The strategic plans of the business, in addition to strategic actions already undertaken, have been considered 
when making these assumptions.
Notes to the Financial Statements
for the year ended 26 February 2011 00 00 55
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14 Goodwill - continued
A sensitivity analysis was performed on the key assumptions used for assessing the goodwill arising in relation to the Outdoor 
division as shown in the table below:
Sensitivity of forecast net cash flows:
Reduction in annual forecast net cash flows    Current –10.0% –20.0%
Recoverable value (£’000)     67,791  58,876  49,962 
Carrying value (£’000)     34,598  34,598  34,598 
Excess of recoverable value over carrying value (£’000)   33,193  24,278  15,364 
Sensitivity to discount factor, at current levels of forecast net cash flows:
Discount factor      10% 12% 14%
Recoverable value (£’000)     76,069  67,791  60,650 
Carrying value (£’000)     34,598  34,598  34,598 
Excess of recoverable value over carrying value (£’000)   41,471  33,193  26,052 
15 Other intangible assets
The carrying amount of intangible assets by category is presented below:
        Website
        Trademarks development Total
      £’000 £’000 £’000
At 1 March 2009     871  117  988 
Additions      (771) —  (771)
Amortisation      (100) (110) (210)
At 27 February 2010     —  7  7 
Additions      —  151  151 
Amortisation      —  (7) (7)
At 26 February 2011     —  151  151 
16 Principal subsidiary undertakings
        Proportion of
       Country of  ownership 
  Nature of business    incorporation interest
Blacks Outdoor Division Limited Holding company for The Outdoor Group Limited  England 100%
The Outdoor Group Limited Outdoor and Boardwear clothing, footwear and equipment retailer England 100%
The Company holds its interest in The Outdoor Group Limited indirectly.
17 Inventories
        2011 2010
       £’000 £’000
Finished goods       36,122  38,954 00 00 www.blacks.co.uk www.millets.co.uk 56
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18 Trade and other receivables
        2011 2010
       £’000 £’000
Trade receivables      487  529
Less: allowance for doubtful debts      (125) (125)
        362  404
Other debtors       1,578  1,871 
Corporation tax recoverable      —  6
Prepayments and accrued income      4,430  4,444 
Trade and other receivables      6,370  6,725 
Trade receivables above are all due within one year. No interest is charged on trade receivables. Expected irrecoverable amounts are 
provided for based on past default experience.
The other classes within trade and other receivables do not include impaired assets. 
The Directors consider that the carrying amounts of trade and other receivables approximate to their fair values. As credit risk has 
been addressed as part of impairment provisioning and, due to the short-term nature of the receivables, they are not subject to 
ongoing fluctuations in market rates.
The maximum exposure to credit risk at the reporting date is represented by the carrying value of the financial assets in the  
balance sheet.
Included in the Group’s trade receivable balances are receivables with a carrying amount of £87,000 (2010: £125,000) which are 
past due at the reporting date but for which the Group has not provided as the amounts are still considered recoverable. The Group 
does not hold any collateral over these balances. 
Ageing of trade receivables:
        2011 2010
       £’000 £’000
Current       275  279 
0–60 days past due (not impaired)      21  97 
60–120 days past due (not impaired)      66  28 
Over 120 days past due (impaired)      125  125 
        487  529 
Movement in allowance for doubtful debts:
        2011 2010
       £’000 £’000
At beginning of year      125  1,256 
Amounts charged to the statement of comprehensive income    —  (26)
Movement upon deconsolidation of Sandcity Limited     —  (1,105)
At end of year       125  125 
Notes to the Financial Statements
for the year ended 26 February 2011 00 00 57
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19 Cash and cash equivalents
        2011 2010
       £’000 £’000
Cash at bank and in hand      655  1,010
Cash at bank and in hand may earn interest at floating rates based on daily bank deposit rates. Short-term deposits are made for 
varying periods of between one day and one month depending on the immediate cash requirements of the Group and earn interest 
at the respective short-term deposit rates. The fair value of cash and cash equivalents does not materially differ from their book 
values.
For the purposes of the consolidated cash flow statement, cash and cash equivalents comprise the following: 
        2011 2010
       £’000 £’000
Cash at bank and in hand      655  1,010
Bank overdrafts (note 24)      (15,024) (13,643)
        (14,369) (12,633)
At 26 February 2011, the Group had available £17,184,000 (2010: £21,415,000) of undrawn committed borrowing facilities with a 
floating security charge over the Group’s assets; all conditions precedent had been met. 
20 Share capital
Ordinary Shares      Number £’000
Allotted and fully paid:
Ordinary Shares of 1p each at 27 February 2010     42,638,103  426 
Issue of share capital      41,412,916  414 
Ordinary Shares of 1p each at 26 February 2011     84,051,019  840 
Deferred Shares      Number £’000
Allotted and fully paid:
Deferred Shares of 49p each at 27 February 2010     42,638,103  20,893 
Deferred Shares of 49p each at 26 February 2011    42,638,103  20,893 
Preference Shares (presented within non-current liabilities)    Number £’000
10% cumulative, irredeemable, Preference Shares of £1 each, allotted and fully paid:
Preference Shares of £1 each at 27 February 2010     891,429  891 
Preference Shares of £1 each at 26 February 2011    891,429  891 
 Ordinary Shares and Deferred Shares
On 23 April 2010, 2,131,905 warrants to acquire Ordinary Shares were exercised at nominal value and, accordingly, the Company 
issued 2,131,905 Ordinary Shares. In addition to this, the Company issued a further 39,281,011 Ordinary Shares, at a subscription 
price of 54p each (before deducting issue costs of £1,757,000), on 24 May 2010 under a Placing and Open Offer and a Firm 
Placing.
At the end of the financial year there were outstanding options to receive allotments of 3,805,841 (2010: 3,982,140) Ordinary Shares 
under the share option schemes as set out in note 29. There were no outstanding warrants (2010: 2,131,905). 00 00 www.blacks.co.uk www.millets.co.uk 58
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20 Share capital - continued
At 26 February 2011, the middle market quotation of the Ordinary Shares, as derived from the Stock Exchange Official List, was 
22.40p. The highest price attained by the Ordinary Shares during the period was 70.50p and the lowest level was 22.00p.
Holders of the Ordinary Shares have all the rights normally attaching to Ordinary Shares, including rights to receive the Company’s 
Annual Report, to attend and speak at general meetings and to appoint proxies and exercise voting rights. The Company’s Ordinary 
Shares do not carry any special rights with regard to control of the Company. There are no restrictions on share transfers or voting. 
Ordinary Shares acquired through the Company’s share schemes rank pari passu with the Company’s Ordinary Shares in issue and 
have no special rights. Unless the Board decides otherwise, an Ordinary Shareholder may not vote at any general meeting or class 
meeting or exercise any rights in relation to shares while any amount of money relating to his shares is outstanding.
The Deferred Shares confer no voting rights nor any rights to participate in the profits of the Company except in very limited 
circumstances. The Deferred Shares are not redeemable and are only transferable in limited circumstances. The Company may at 
any time arrange for Deferred Shares to be transferred to the Company for an aggregate consideration of 1p and may cancel the 
Deferred Shares so purchased.
 Preference Shares
The 10% cumulative non-redeemable Preference Shares confer the right to receive a fixed dividend of 10% per annum paid  
in priority to any payment to any other class of share. The dividend is payable in two equal amounts on 30 April and 31 October of  
each year.
In the event of a return of capital, or on a winding up of the Company, Preference Shareholders are entitled to repayment of the 
nominal capital paid up on their shares, a premium of 5 pence per share and any arrears of dividends to the date of repayment in 
priority to any other class of share. Preference Shares do not carry any voting rights, unless the preference dividends are in arrears 
for at least six months, or there is a resolution altering the rights of the holders of Preference Shares, for the winding-up of the 
Company or for a return of capital. In such instances, a Preference Shareholder shall have one vote on a show of hands, or in the 
event of a poll, ten votes for every Preference Share held.
21 Share premium
        £’000
At 28 February 2009       24,333 
At 27 February 2010       24,333 
Premium arising on issue of equity shares (note 20)      19,062 
At 26 February 2011       43,395 
22 Reserve for own shares
        £’000
At 28 February 2009, 27 February 2010 and 26 February 2011     (773)
This reserve represents Ordinary Shares held by the Blacks Leisure Group plc Employee Benefit Trust that provides for the issue of 
shares to Group employees under share incentive schemes. The number of Ordinary Shares in the Trust amounts to 344,578 (2010: 
344,578) with a market value at the year end of £77,000 (2010: £177,000).
Notes to the Financial Statements
for the year ended 26 February 2011 00 00 59
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23 Reserves
The following describes the nature and purpose of each reserve within owners’ equity:
Reserve Description and purpose
Share premium Amount subscribed for share capital in excess of nominal value.
Reserve for own shares The cost of own shares held.
Warrants reserve Fair value of Ordinary Shares to be issued under warrants.
Hedging reserve Gains and losses arising on recognising hedging instruments at fair value in a qualifying cash flow hedge.
Retained earnings Cumulative net gains and losses recognised in the statement of comprehensive income.
24 Bank overdrafts
      Effective   2011 2010
     interest rate % Maturity £’000 £’000
Bank overdrafts    Variable On demand 15,024  13,643 
Bank overdrafts are repayable on demand and are secured by fixed and floating charges over the assets of Group companies. The 
average effective interest rate on bank overdrafts approximates to 4.356% (2010: 3.954%) per annum. The carrying value of the 
bank overdraft is a reasonable approximation of fair value given its short-term maturity and the variable interest rates that apply.
25 Obligations under hire purchase and finance leases
      Present value of 
     Minimum lease payments minimum lease payments
      2011 2010 2011 2010
     £’000 £’000 £’000 £’000
Amounts payable under hire purchase and finance leases: 
— within one year    712  1,282  656  1,178 
— in the second to fifth years inclusive   596  1,254  577  1,186 
— after five years    —  —  —  — 
      1,308  2,536  1,233  2,364 
Less: future finance charges    (75) (172) N/A N/A
Present value of lease obligations    1,233  2,364  1,233  2,364 
The present value of future payments is analysed as: 
        2011 2010
       £’000 £’000
Current liabilities      656  1,178 
Non-current liabilities      577  1,186 
        1,233  2,364 
It is the Group’s policy to lease certain plant and equipment under hire purchase and finance leases and the Group entered into 
several such lease commitments for plant and equipment relating to its premises at Swan Valley, Northampton. The weighted 
average remaining term is 1.9 years with an effective borrowing rate of 5.3%. Interest rates are fixed at the contract date and the 
leases are agreed on a fixed repayment basis. No material arrangements have been entered into for contingent rental payments.
The fair value of the Group’s lease obligations approximates to their present value.
The Group’s obligations under hire purchase and finance leases are secured by the lessors’ rights over the leased assets. 00 00 www.blacks.co.uk www.millets.co.uk 60
Blacks Leisure Group plc  Annual Report and Accounts 2011
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26 Trade and other payables
        2011 2010
       £’000 £’000
Current liabilities
Trade payables       17,279  23,428
Other taxes and social security      5,420  1,507
Accruals       10,770  16,618
Other payables       22  109
Current trade and other payables      33,491  41,662 
Non-current liabilities
Accruals       5,581  3,802 
Non-current other payables      5,581  3,802 
Trade payables and accruals are non-interest bearing and principally comprise amounts outstanding for trade purchases and 
ongoing costs. The average credit period taken for trade purchases is 53 days (2010: 62 days). 
The Directors consider that the carrying amount of trade payables approximates to their fair value as they are short-term in nature 
and are therefore not subject to ongoing fluctuations in market rates.
27 Provisions
     Onerous  Closed Other CVA
     lease Dilapidation store rates related
     provision provision provision provision Total
    £’000 £’000 £’000 £’000 £’000
At 1 March 2009   12,113  943  —  —   13,056 
Additional provision in the year   —  1,045  10,755  8,000  19,800 
Unwinding of discount   642  —  —  —  642 
Utilised    (386) (68) (617) —  (1,071)
Released    (10,153) (329) —  —  (10,482)
Deconsolidation of Sandcity (note 35)   (2,216) —  —  —  (2,216)
At 27 February 2010   —  1,591  10,138  8,000  19,729 
At 28 February 2010   —  1,591  10,138  8,000  19,729 
Additional provision in the year   1,107  842  —  —  1,949 
Unwinding of discount   —  —  720  —  720 
Utilised    —  (309) (1,743) (7,436) (9,488)
Released    —  (320) (5,376) —  (5,696)
At 26 February 2011   1,107  1,804  3,739  564  7,214 
Current    —  1,591  5,078  8,000  14,669 
Non-current    —  —  5,060  —  5,060 
At 27 February 2010   —  1,591  10,138  8,000  19,729 
Current    266  1,804  1,410  564  4,044 
Non-current    841  —  2,329  —  3,170 
At 26 February 2011   1,107  1,804  3,739  564  7,214 
Notes to the Financial Statements
for the year ended 26 February 2011 00 00 61
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27 Provisions - continued
Ageing of non-current provisions (years in which the provision is expected to unwind):
        2011 2010
       £’000 £’000
In the second to fifth years inclusive      3,170  5,060 
In the sixth to tenth years inclusive      —  — 
After ten years       —  — 
        3,170  5,060
The carrying value of provisions approximates to fair value since the cash flows have, where appropriate, been discounted at an 
appropriate cost of capital.
Onerous lease provision
The previously carried provision for onerous leases and other store closures at 1 March 2009 related to properties, some of which 
were vacant, for which obligations were removed as part of the CVAs that were effective in December 2009 and, accordingly, the 
remaining balance was released at that time given the Group was no longer obligated to rentals for those properties. Subsequently, 
an additional provision has been made at 26 February 2011 for ongoing rental obligations at three additional properties, which were 
not included within the CVAs, but which are now either vacant or soon to be vacant. This charge of £1,107,000 has been presented 
within exceptional operating items (see note 8) on the face of the statement of comprehensive income. 
Dilapidation provision
Dilapidations are provided for remedial works required to bring a leased property back into the same condition as when the lease 
commenced. The Group’s accounting policy for recognising dilapidations provisions is to recognise amounts expected to be payable 
under a legal obligation when the likelihood of an outflow of economic benefits becomes more likely than not and a reliable estimate 
can be made. The provision is determined by reference to the serving of a dilapidations schedule upon the Group by the landlord 
or based upon the Directors’ own assessment of the likely cost of such works or settlement with the landlord. During the year, an 
additional £842,000 was provided, of which £305,000 relates to the Group’s planned exit from the Boardwear segment and has 
accordingly been presented within exceptional operating items (see note 8).
Closed store rates provision
Under the terms of the CVAs, the Group has a commitment to pay business rates on properties that were compromised under these 
arrangements up until such a time as the landlord is able to re-let the site. Provision is made for the expected value of this obligation, 
discounted at a rate of 12% per annum, estimated based on the earlier of lease expiry and anticipated period to re-let. An amount of 
£5,376,000 has been released from the provision during the year on account of new tenants being found for many properties, and 
accordingly the Group no longer holding a liability to pay rates, more quickly than was anticipated. This release has been recorded 
within exceptional operating items (see note 8).
Other CVA related provision
A provision was created during the prior year in respect of other additional costs associated with the CVAs. This included the 
provision of £7,250,000 for a compromise fund for affected landlords and this amount was settled in cash during May and  
July 2010.
28 Commitments and contingencies
        2011 2010
Operating lease commitments      £’000 £’000
Amounts charged for the year include:
— minimum lease payments recognised as an operating lease expense   28,217  37,674 
— contingent rents      18  21 
Contingent rents are in respect of turnover-based rent clauses, the majority ranging between 8% and 12% of turnover above a  
base amount. 00 00 www.blacks.co.uk www.millets.co.uk 62
Blacks Leisure Group plc  Annual Report and Accounts 2011
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28 Commitments and contingencies - continued
The Group leases various buildings which operate within the Outdoor and Boardwear segments. The leases are non-cancellable 
operating agreements with varying terms, escalation clauses and renewal rights. The Group also has motor vehicles under non-
cancellable operating lease agreements.
Future minimum rentals payable under non-cancellable operating leases as at 26 February 2011 are as follows:
        
    Land and Motor  Land and Motor  
    buildings vehicles Total buildings vehicles Total
    2011 2011 2011 2010 2010 2010
   £’000 £’000 £’000 £’000 £’000 £’000
Within one year   25,977  212  26,189  25,614  169  25,783
In the second to fifth years inclusive  88,460  443  88,903  87,957  43  88,000
After five years   75,301  —  75,301  84,644  —  84,644
    189,738  655  190,393  198,215  212  198,427 
The total future minimum sub-lease income under non-cancellable sub-leases as at 26 February 2011 is as follows: 
        
    Land and Motor  Land and Motor  
    buildings vehicles Total buildings vehicles Total
    2011 2011 2011 2010 2010 2010
   £’000 £’000 £’000 £’000 £’000 £’000
Within one year   488  —  488  563  —  563
In the second to fifth years inclusive  549  —  549  1,476  —  1,476
After five years   1,791  —  1,791  650  —  650 
    2,828  —  2,828  2,689  —  2,689 
29 Employee benefits
 Share options
The Group operates an Executive Share Option Scheme (ESOS), a Company Share Option Plan (CSOP), a Save As You Earn 
Scheme (SAYE), a Share Incentive Plan (SIP) and a Turnaround Incentive Plan (TIP). There is also a Performance Share Plan (PSP) 
which has no current members.
The ESOS is an unapproved discretionary employee share option scheme, with options having been granted to certain senior 
employees (including Directors). No Directors hold options under this scheme as at the end of the financial year.
The CSOP is a HM Revenue & Customs approved discretionary employee share option scheme.
The SAYE was open to employees with the required minimum period of service and provided for a purchase price equal to the 
market price on the date of grant, less a 20% discount. The shares can be purchased over the six-month period following the third 
or fifth anniversary of the commencement date, depending on the scheme to which the employee belongs.
The SIP is a scheme introduced as a performance related incentive award for certain Directors. All remaining options under the SIP 
scheme were surrendered on 18 January 2010 alongside the introduction of the TIP scheme.
The TIP scheme was approved at a meeting of Shareholders on 24 November 2009 and under this scheme a total of 3,864,465 
options were granted on 18 January 2010 and a further 805,221 on 10 June 2010. The grant on 18 January 2010, being in part 
a modification of existing schemes, resulted in 1,943,748 existing options from other schemes being surrendered, such that any 
recipient of awards under the TIP scheme ceased to have any interests in any other share option schemes other than the SAYE. 
Where these newly issued options have been deemed to be a modification of prior awards, the share-based payment charges from 
these earlier awards under the old share option schemes have continued to be charged within the statement of comprehensive 
income.
The TIP scheme includes options granted to certain Directors and performance criteria (which are identical for all grants under the 
TIP scheme) in respect of these options are set out in the Directors’ Remuneration Report. 
Notes to the Financial Statements
for the year ended 26 February 2011 00 00 63
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29 Employee benefits - continued
A reconciliation of option movements for each of the above schemes over the year to 26 February 2011 is as follows:
Executive Share Option Scheme
       2011  2010
       Weighted  Weighted 
       average  average 
      Number exercise Number exercise 
     of options price (£) of options price (£)
Outstanding at the beginning of the year    41,947  1.81  699,302  1.66 
Granted during the year     —  —  300,000  0.58 
Forfeited or surrendered during the year   —  —  (638,299) 1.46 
Lapsed during the year    (39,668) 1.70  (319,056) 0.99 
Outstanding at the end of the year     2,279  3.67  41,947  1.81 
Exercisable at the end of the year    2,279  3.67  3,799  3.67 
     2011    2010
  
Weighted
 Weighted average  
Weighted
 Weighted average
 
Range of
 
average
  remaining life  
average
 remaining life
 exercise exercise Number    exercise Number
 prices price of Expected Contractual price of Expected Contractual
 (£) (£) shares (years) (years) (£) shares (years) (years)
 3.67 3.67  2,279 0.0 2.7 1.81  41,947  1.6 2.6
There were no options exercised in the year, therefore there is no weighted average share price at the date of exercise for the options 
(2010: £nil). A total of 638,299 of the share options granted under this scheme were surrendered during the prior period as part of 
the grant of options under the Turnaround Incentive Plan on 18 January 2010. Since these new awards have been accounted for 
as modifications of the Executive Share Option Scheme, the statement of comprehensive income continues to record charges in 
respect of the options originally granted under this scheme. The total charge recognised for the year was £22,000 (2010: £34,000).
Company Share Option Plan
       2011  2010
       Weighted  Weighted 
       average  average 
      Number exercise Number exercise 
     of options price (£) of options price (£)
Outstanding at the beginning of the year    11,037  3.67  35,695  3.67 
Lapsed during the year    (5,673) 3.67  (24,658) 3.67 
Outstanding at the end of the year     5,364  3.67  11,037  3.67 
Exercisable at the end of the year    5,364  3.67  11,037  3.67 
     2011    2010
  
Weighted
 Weighted average  
Weighted
 Weighted average
 
Range of
 
average
  remaining life  
average
 remaining life
 exercise exercise Number    exercise Number
 prices price of Expected Contractual price of Expected Contractual
 (£) (£) shares (years) (years) (£) shares (years) (years)
 3.67 3.67  5,364 0.0 2.7 3.67  11,037  0.0 3.7
There were no options exercised in the year, therefore there is no weighted average share price at the date of exercise for the options 
(2010: £nil). There was no charge or credit taken to the statement of comprehensive income (2010: £nil) during the year. 00 00 www.blacks.co.uk www.millets.co.uk 64
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29 Employee benefits - continued
Save as You Earn Scheme
       2011  2010
       Weighted  Weighted 
       average  average 
      Number exercise Number exercise 
     of options price (£) of options price (£)
Outstanding at the beginning of the year    64,691  2.53  105,917  2.44 
Lapsed during the year    (12,045) 3.56  (41,226) 2.29 
Outstanding at the end of the year     52,646  2.29  64,691  2.53 
Exercisable at the end of the year    34,151  2.19  12,045  3.56 
     2011    2010
  
Weighted
 Weighted average  
Weighted
 Weighted average
 
Range of
 
average
  remaining life  
average
 remaining life
 exercise exercise Number    exercise Number
 prices price of Expected Contractual price of Expected Contractual
 (£) (£) shares (years) (years) (£) shares (years) (years)
 1.97-3.56 2.29  52,646 0.6 1.1 2.53  64,691  1.2 1.7
There were no options exercised in the year, therefore there is no weighted average share price at the date of exercise for the options 
(2010: £nil). A charge of £14,000 was recorded in the statement of comprehensive income (2010: £44,000 credit) during the year. 
Share Incentive Plan
       2011  2010
       Weighted  Weighted 
       average  average 
      Number exercise Number exercise 
     of options price (£) of options price (£)
Outstanding at the beginning of the year    —  —  1,300,000  2.15 
Granted during the year     —  —  —  — 
Forfeited or surrendered during the year   —  —  (1,300,000) 2.15 
Outstanding at the end of the year     —  —  —  — 
Exercisable at the end of the year    —  —  —  — 
     2011    2010
  
Weighted
 Weighted average  
Weighted
 Weighted average
 
Range of
 
average
  remaining life  
average
 remaining life
 exercise exercise Number    exercise Number
 prices price of Expected Contractual price of Expected Contractual
 (£) (£) shares (years) (years) (£) shares (years) (years)
 N/A —  —  N/A N/A —  —  N/A N/A
There were no options exercised in the year, therefore there is no weighted average share price at the date of exercise for the options 
(2010: £nil). All share options granted under this scheme were surrendered as part of the grant of options under the Turnaround 
Incentive Plan on 18 January 2010. Since these new awards have been accounted for as modifications of the Share Incentive Plan, 
the statement of comprehensive income continues to record charges in respect of the options originally granted under this scheme. 
The total charge for the year relating to the scheme was £233,000 (2010: £234,000).
Notes to the Financial Statements
for the year ended 26 February 2011 00 00 65
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29 Employee benefits - continued
Turnaround Incentive Plan
       2011  2010
       Weighted  Weighted 
       average  average 
      Number exercise Number exercise 
     of options price (£) of options price (£)
Outstanding at the beginning of the year    3,864,465  0.00 —  — 
Forfeited or surrendered during the year   (924,134) 0.00 —  — 
Granted during the year     805,221  0.00 3,864,465  0.00
Outstanding at the end of the year     3,745,552  0.00 3,864,465  0.00
Exercisable at the end of the year    —  —  —  — 
     2011    2010
  
Weighted
 Weighted average  
Weighted
 Weighted average
 
Range of
 
average
  remaining life  
average
 remaining life
 exercise exercise Number    exercise Number
 prices price of Expected Contractual price of Expected Contractual
 (£) (£) shares (years) (years) (£) shares (years) (years)
 0.00 0.00 3,745,552  2.0 9.0 —  3,864,465  2.9 9.9
There were no options exercised in the year, therefore there is no weighted average share price at the date of exercise for the options 
(2010: £nil). A charge of £130,000 (2010: £26,000) was recorded in the statement of comprehensive income during the year.
 Equity-settled share-based payments
The total charge for the year from all share option schemes was £399,000 (2010: £250,000).
The fair value of the share options is estimated as at the date of grant using the Monte Carlo model for TIP options and the Binomial 
model for SIP options and ESOS options granted after 28 February 2008. For all ESOS and CSOP options granted before 1 March 
2008 and all SAYE options the Black–Scholes model is used. The following table gives the assumptions used and the fair value per 
option granted during the year.
        2011 2010
       TIP TIP
Share price at grant date      £0.54 £0.60
Exercise price       £0.00 £0.00
Shares under option      805,221 3,864,465
Vesting period (years)      3.0 3.0
Expected volatility      85.0% 61.0%
Option life (years)      2.3 2.9
Expected life (years)      2.3 2.9
Risk-free rate       2.4% 1.7%
Expected dividends expressed as a dividend yield     0.0% 0.0%
Expectations of meeting performance criteria     100.0% 100.0%
Fair value per option      £0.193 £0.152
The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The 
expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily 
be the actual outcome. The risk-free rate of return is the yield on zero-coupon UK Government bonds of a term consistent with the 
assumed option life. No other features of options granted were incorporated into the measurement of fair value. 00 00 www.blacks.co.uk www.millets.co.uk 66
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Notes to the Financial Statements
for the year ended 26 February 2011
29 Employee benefits - continued
 Retirement benefits
The Group operates an ongoing pension scheme, the Blacks Leisure Group Stakeholder Pension Scheme. The assets of this 
scheme are held separately from those of the Group. Contributions to the scheme are charged to the statement of comprehensive 
income in the period in which they arise. The charge for the year was £277,000 (2010: £396,000). The Group also makes 
contributions into the Directors’ money purchase schemes as set out in the Directors’ Remuneration Report.
The Blacks Leisure Group plc Pension Scheme, an old scheme which had defined benefit members, has now effectively been 
wound up. In 2007 the Company received confirmation from the Trustees that all amounts due to the scheme had been paid and 
that it had no further exposure to any changes in the value of the scheme’s assets and liabilities. A full IAS19 disclosure has therefore 
not been presented.
30 Related party disclosures
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and 
accordingly are not disclosed in this note. 
The remuneration of all key personnel is set out below. The key personnel are all either main Board members, subsidiary Board 
members or regular attendees of the subsidiary Board meetings. Further information about the remuneration of individual Directors of 
the Company is provided in the audited part of the Directors’ Remuneration Report. 
        2011 2010
        £’000 £’000
Short-term employee benefits      1,703  1,743
Post-employment benefits      44  37
Termination benefits      —  82
Equity-settled share-based payments      259  270
        2,006  2,132 
There were no material transactions in which any key personnel had a material interest.
31 Financial risk management objectives and policies 
The Group’s principal financial instruments, other than derivatives, comprise bank loans and overdrafts, cash and short-term 
deposits, receivables and payables. The main risks arising from the Group’s financial instruments are interest rate risk, foreign 
currency risk, credit risk and liquidity risk. The Board reviews and agrees policies for managing each of these risks and they are 
summarised below.
The main financial risks faced by the Group relate to the availability of funds to meet business needs and the risk of default by a 
counterparty in a financial transaction. The Group manages borrowing, liquidity, foreign exchange and banking relationships in 
accordance with Board approved policies designed to minimise exposures. The undertaking of financial transactions of a speculative 
nature is not permitted. 
The Group finances its operations by a combination of internally-generated cash flow and bank borrowings. The Group aims to 
always have sufficient undrawn bank facilities to meet projected borrowing requirements over the coming periods. When interest 
rate risk is considered significant, the Group’s policy is to fix or cap a proportion of projected net debt in order to reduce the Group’s 
exposure to fluctuations in rates. The policy recognises that, in common with other UK retailers, the Group has significant liabilities 
through conditional obligations to pay rent under property leases. The implicit interest rate of these liabilities is fixed in the short-term. 
Transaction exposures resulting from purchases in foreign currencies may be hedged by forward foreign currency transactions. 
Group policy aims to minimise any exposure with the intention of protecting the buying margin from fluctuations in the value of the 
foreign currency. 00 00 67
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31 Financial risk management objectives and policies - continued
 Interest rate risk
The Group has a seasonal cash flow that moves significantly over the course of each year. The Group is exposed to cash flow 
interest rate risk on floating rate deposits, bank overdrafts and loans. Fixed interest rates are used for all finance lease borrowing.
 Foreign currency risk
The Group’s principal foreign currency exposures arise from the purchase of overseas sourced products. Group policy allows for 
but does not demand that these exposures are hedged for up to 12 months ahead in order to fix the cost in sterling. This hedging 
activity may involve the use of spot and forward contracts. There were forward contracts of this nature held at year end as detailed in 
note 32. The Group’s net exposure to foreign currencies is illustrated by the sensitivity analysis in note 33.
The market value of outstanding foreign exchange derivatives is reported regularly and reviewed in conjunction with percentage 
cover taken by season and current market conditions in order to assess and manage the Group’s ongoing exposure.
The Group does not consider the exposure to currency movements in relation to translation of overseas assets and liabilities to be 
material and, consequently, does not hedge any such exposure.
 Credit risk
The Group’s credit risk is primarily attributable to its trade and other receivables. The amounts included in the balance sheet are net 
of allowances for doubtful debts, which have been estimated by management based on prior experience and known factors at the 
balance sheet date which may indicate that a provision is required. All customers who wish to trade on credit terms are subject to 
credit verification procedures where considered appropriate.
The Group’s credit risk on liquid funds and derivatives is limited because the Group only maintains liquid funds, and only enters into 
derivative transactions, with banks and financial institutions with high credit ratings.
 Liquidity risk
The Group manages its cash and borrowing requirements centrally to maximise interest income and minimise interest expense, 
whilst ensuring that the Group has sufficient liquid resources to meet the operating needs of its businesses.
 Capital risk management
The Group monitors ‘adjusted capital’ which comprises all components of equity other than amounts recognised in equity relating 
to cash flow hedges. The Group manages this with the aim of ensuring that entities in the Group will be able to continue as a going 
concern while maximising the return to stakeholders through the optimisation of the debt and equity balance.
In managing its capital, the Group’s primary objective is to ensure its continued ability to provide a return for its equity Shareholders 
through a combination of capital growth and, when appropriate, distributions. In order to achieve this objective, the Group seeks to 
maintain a gearing ratio that balances risks and returns at an acceptable level and also to maintain a sufficient funding base to enable 
the Group to meet its working capital and strategic investment needs. In making decisions to adjust its capital structure to achieve 
these aims, either through altering its dividend policy, new share issues, or the reduction of debt, the Group considers not only its 
short-term position but also its long-term operational and strategic objectives. 00 00 www.blacks.co.uk www.millets.co.uk 68
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32 Derivatives
The Group uses currency derivatives to forward-buy and forward-sell foreign currency in order to hedge certain future transactions 
and cash flows, predominantly in relation to purchases of stocks from overseas suppliers. The Group is party to a variety of 
foreign currency forward contracts in the management of the exchange rate exposures. The instruments purchased are primarily 
denominated in the suppliers’ principal currency.
At the balance sheet date the total notional amount of outstanding forward foreign exchange contracts that the Group has 
committed to are:
     Exchange   2011 2010
    rate Currency Maturity US$’000 US$’000
Bank of Scotland   1.598 US Dollar 08 Mar 2010 —  3,000 
Bank of Scotland   1.597 US Dollar 12 Apr 2010 —  1,000 
Bank of Scotland   1.625 US Dollar 08 Mar 2010 —  1,500 
Bank of Scotland   1.625 US Dollar 07 May 2010 —  1,000 
Bank of Scotland   1.624 US Dollar 07 Jun 2010 —  1,000 
Bank of Scotland   1.624 US Dollar 07 Jul 2010 —  2,000 
Bank of Scotland   1.623 US Dollar 09 Aug 2010 —  2,000 
Bank of Scotland   1.600 US Dollar 08 Sep 2010 —  3,000 
Bank of Scotland   1.600 US Dollar 08 Oct 2010 —  3,000 
Bank of Scotland   1.600 US Dollar 08 Nov 2010 —  3,000 
Corporate FX    1.517 US Dollar 28 Feb 2011 2,000  —
Corporate FX    1.540 US Dollar 28 Feb 2011 2,000  — 
Bank of Scotland   1.584 US Dollar 01 Mar 2011 4,000  — 
Bank of Scotland   1.584 US Dollar 05 Apr 2011 2,000  — 
Bank of Scotland   1.583 US Dollar 03 May 2011 1,000  — 
Bank of Scotland   1.596 US Dollar 01 Jun 2011 2,000  — 
Bank of Scotland   1.595 US Dollar 05 Jul 2011 2,000  — 
Bank of Scotland   1.594 US Dollar 02 Aug 2011 2,000  — 
The fair values of level 2 currency derivatives, based on market prices at which these contracts are traded, are as follows:
        2011 2010
       £’000 £’000
Fair value of currency derivatives designated and effective as cash flow hedges   (221) 720
Notes to the Financial Statements
for the year ended 26 February 2011 00 00 69
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33 Financial instruments
Categories of financial instruments (excluding derivatives) comprise:
       Loans and receivables
        2011 2010
Financial assets      £’000 £’000
Current financial assets
Trade receivables (note 18)      362  404 
Cash at bank and in hand (note 19)      655  1,010 
Total financial assets      1,017  1,414 
As the majority of the Group’s trade receivables balance relates to customers that are public sector bodies, the risk of non-payment 
tends to be low although each customer’s debt is individually analysed for the likelihood of payment.
       Financial liabilities measured
       at amortised cost
        2011 2010
Financial liabilities      £’000 £’000
Current financial liabilities
Bank overdrafts (note 24)      15,024  13,643 
Obligations under hire purchase and finance leases (note 25)    656  1,178 
Trade and other payables (note 26)      33,491  41,662 
Short-term provisions (note 27)      4,044  14,669 
Total current financial liabilities      53,215  71,152 
Non-current financial liabilities
Preference Shares (note 20)      891  891 
Obligations under hire purchase and finance leases (note 25)    577  1,186 
Trade and other payables (note 26)      5,581  3,802 
Long-term provisions (note 27)      3,170  5,060 
Total non-current financial liabilities     10,219  10,939 
Total financial liabilities      63,434  82,091 
The fair value of hire purchase and finance leases liabilities is estimated as the present value of future cash flows, discounted 
at market interest rates for homogenous lease agreements. The fair value of such leases for the year have been estimated at 
£1,233,000 (2010: £2,364,000), corresponding to the balance sheet value as per note 25.
Preference Shares measured at amortised cost have a fair value of £490,000 (2010: £401,000) based upon the Preference Share 
market price at the end of the financial year of 55.0p (2010: 45.0p).
 Liquidity analysis
The table below analyses the Group’s financial liabilities based on the remaining period at the balance sheet date to the contractual 
maturity date. The amounts disclosed in the table are the contracted undiscounted cash flows:
       26 February 2011
       Within One to Greater than 
       one year five years five years
      £’000 £’000 £’000
Preference Shares     89  —  891 
Bank overdrafts     15,024  —  — 
Obligations under hire purchase and finance leases    712  596  — 
Trade and other payables     32,885  2,000  — 
Provisions      4,071  3,821  — 
       52,781  6,417  891  00 00 www.blacks.co.uk www.millets.co.uk 70
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33 Financial instruments - continued
       27 February 2010
       Within One to Greater than 
       one year five years five years
      £’000 £’000 £’000
Preference Shares     89  —  891 
Bank overdrafts     13,643  —  — 
Obligations under hire purchase and finance leases    1,282  1,254  — 
Trade and other payables     41,662  —  — 
Provisions      14,704  6,325  — 
       71,380  7,579  891 
 Interest rates and currency
The Directors review any requirement for interest rate hedging during the year dependent upon the level of borrowings and the 
expected volatility in rates. The Group is exposed to cash flow interest rate risk on floating rate deposits, bank overdrafts and loans 
which amounted to £15,024,000 (2010: £13,643,000) where interest rates are based on a fixed margin over the underlying UK 
LIBOR rate. Fixed interest rates are used for all hire purchase and finance lease borrowing which at the end of the year amounted to 
£1,233,000 (2010: £2,364,000).
As at the end of the year, the Group holds a committed revolving credit facility of £35.0 million (2010: £42.5 million), which is to be 
used for general corporate and working capital purposes. The Group had available £17,184,000 (2010: £21,415,000) of undrawn 
committed borrowing facilities with a floating security charge over the Group’s assets; all conditions precedent had been met. The 
interest rate on the committed and uncommitted facilities is based on the UK LIBOR rate.
The currency and interest rate exposure of the Group’s floating rate cash balances and bank overdrafts is shown below (overdrafts 
are shown as negative):
        2011 2010
        £’000 £’000
Cash at bank and in hand
Sterling       286  409 
Euro       369  601 
        655  1,010 
        2011 2010
        £’000 £’000
Bank overdrafts
Sterling       (14,714) (15,966)
Euro       406  254 
US dollar       (699) 2,087 
Hong Kong dollar      (17) (18)
        (15,024) (13,643)
The right of set-off within the banking facility enables certain accounts with overdrafts to be set off against accounts with a balance, 
and be recorded as a net balance or overdraft in the consolidated balance sheet. This has led to some foreign currency accounts 
with a positive balance to be classified as a financial liability as the above tables show.
The floating rate assets and liabilities comprise bank accounts bearing interest rates based upon the UK LIBOR rate. There are no 
fixed rate financial assets.
Notes to the Financial Statements
for the year ended 26 February 2011 00 00 71
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33 Financial instruments - continued
 Sensitivity analysis
Foreign currency sensitivity analysis
The Group’s principal foreign currency exposures are to US dollar and the Euro. The table below illustrates the hypothetical sensitivity 
of the Group’s reported profit and equity to a 10% increase and decrease in the US dollar and Euro exchange rates (relative to sterling) 
at the year end date, assuming all other variables remain unchanged. The sensitivity of 10% represents the Directors’ assessment of a 
reasonably possible change over the coming year. Positive figures represent an increase in profit or equity.
     Statement of
     comprehensive income Equity
      2011 2010 2011 2010
     £’000 £’000 £’000 £’000
Sterling strengthens by 10%
— US dollar     (64) 190  (756) (692)
— Euro     (265) (266) (265) (266)
Sterling weakens by 10%
— US dollar `    78  (232) 924  846 
— Euro     324  325  324  325 
Year end exchange rates applied in the above analysis are 1.6074 (2010: 1.5224) for US dollars and 1.1692 (2010: 1.1154) for 
Euros. Strengthening and weakening of sterling may not produce symmetrical results depending on the proportion and nature of 
foreign exchange derivatives which do not qualify for hedge accounting.
Interest rate sensitivity analysis
The table below illustrates the hypothetical sensitivity of the Group’s reported profit and equity to a 1% (percentage point) increase 
or decrease in interest rates, assuming all other variables were unchanged. The sensitivity rate of 1% represents the Directors’ 
assessment of a reasonably possible change over the coming year. Positive figures represent an increase in profit or equity.
The analysis has been prepared under the following assumptions: 
h For floating rate assets and liabilities, the amount of asset or liability outstanding at the balance sheet date is assumed to have  
 been outstanding for the whole year; and
h  Fixed rate financial instruments that are carried at amortised cost are not subject to interest rate risk for the purpose of this 
analysis.
     Statement of
     comprehensive income Equity
      2011 2010 2011 2010
     £’000 £’000 £’000 £’000
Interest rate increase of 1%    (144) (126) (144) (126)
Interest rate decrease of 1%    144  126  144  126  00 00 www.blacks.co.uk www.millets.co.uk 72
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34 Events after the balance sheet date 
As explained in note 8, the Group plans to exit from its Boardwear segment during the coming year. The future financial effect of this 
exit strategy on the Group’s financial results and position are indicated by the results of this segment for the year ended 26 February 
2011 and its net liabilities at that date, which are summarised in note 5.
35 Discontinued operations — Administration of Sandcity Limited
On 23 September 2009, Richard Fleming and David Costley-Wood of KPMG LLP were appointed as administrators in respect of the 
wholly owned subsidiary, Sandcity Limited. Sandcity Limited was part of the Boardwear segment and was a retailer, and previously a 
wholesaler, of lifestyle and Boardwear clothing and accessories. At the point of being placed into administration, it operated from 11 
stores and traded at a substantial loss.
The appointment of the administrators of Sandcity Limited resulted in an exit by the Group from approximately one-quarter of the 
Boardwear stores. Further Boardwear stores, operating within The Outdoor Group Limited under the Freespirit fascia, were also 
subsequently exited as part of the Company Voluntary Arrangements.
In line with the requirements of IFRS5, the results of Sandcity Limited were classified as discontinued operations. The statement of 
comprehensive income for the comparative period therefore included, as results from discontinued operations, the following:
         2010
         £’000
Revenue        8,531 
Cost of sales        (6,271)
Gross profit        2,260 
Distribution costs       (3,960)
Administrative expenses       (1,387)
Operating loss       (3,087)
 Operating loss excluding exceptional items      (2,289)
 Exceptional items       (798)
Finance costs        (122)
Loss on ordinary activities before tax      (3,209)
Loss attributable to disposal       (159)
Loss before tax       (3,368)
Tax expense        (5)
Loss for the period attributable to equity holders of the parent     (3,373)
Other comprehensive income       — 
Total comprehensive expense for the year attributable to equity holders of the parent   (3,373)
Notes to the Financial Statements
for the year ended 26 February 2011 00 00 73
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35 Discontinued operations — Administration of Sandcity Limited - continued
The effect of the degrouping on the individual assets and liabilities of the Group was as shown below:
         2010
         £’000
Non-current assets
Property, plant and equipment       1,281 
Deferred tax liability       (62)
Current assets
Inventories        1,124 
Trade and other receivables       1,632 
Current liabilities
Trade and other payables       (1,562)
Short-term provisions       (1,059)
Non-current liabilities
Long-term provisions       (1,157)
Net attributable assets disposed of      197
Bank overdrafts disposed of       (38)
Loss attributable to disposal       159 
At 26 February 2011, the Directors have recognised expected proceeds from the administration of Sandcity Limited as set out  
in note 8.
The net cash flows of Sandcity Limited up until the date of disposal from the Group were as follows:
         2010
        £’000
Net cash flow from operations       2,151 
Net cash flow from investing activities       — 
Net cash flow from financing activities       — 
Net cash flow from discontinued operations      2,151  00 00 www.blacks.co.uk www.millets.co.uk 74
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        2011 2010
       Note £’000 £’000
Fixed assets
Investments in subsidiary undertakings     5 54,190  54,190
Current assets
Debtors      6 25,971  20,124
Cash at bank and in hand      6  152
        25,977  20,276 
Creditors: amounts falling due within one year    7 (7,511) (19,684)
Net current assets      18,466  592 
Total assets less current liabilities      72,656  54,782 
Creditors: amounts falling due after more than one year    8 (891) (891)
Net assets       71,765  53,891 
Capital and reserves
Called up share capital     9 21,733  21,319
Share premium      10 43,395  24,333
Reserve for own shares     12 (773) (773)
Profit and loss account     13 7,410  9,012
Shareholders’ funds     14 71,765  53,891 
The financial statements were approved by the Board and authorised for issue on 4 May 2011 and were signed on its behalf by:
Neil Gillis
Chief Executive
Marc Lombardo
Finance Director
Company Number: 582190
Company Balance Sheet
as at 26 February 2011 00 00 75
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Notes to the Company Financial Statements
for the year ended 26 February 2011
1 Accounting policies
 Basis of accounting
The separate financial statements of the Company are presented as required by the Companies Act 2006. They have been prepared 
under the historical cost convention, except for the valuation of certain financial instruments, and in accordance with applicable 
United Kingdom Accounting Standards.
The Company has not disclosed the requirements under FRS29 ‘Financial instruments: Disclosures’ as it has taken advantage of the 
exemption to only disclose them with those of the Group in the consolidated financial statements.
The principal accounting policies are summarised below. They have all been applied consistently throughout the year and the 
preceding year.
 Investments
Investments in subsidiary undertakings are stated at cost less any provision for impairment.
 Equity-settled share-based payments
Certain employees and Directors of the Group receive equity-settled remuneration in the form of share-based payment transactions, 
whereby employees render services in exchange for shares or rights over shares. The cost of equity-settled transactions with 
employees is measured by reference to the fair value, determined using the Black–Scholes option pricing model, the Monte Carlo 
model or the Binomial model as appropriate, at the date at which they are granted. The cost of equity-settled transactions is 
recognised, together with a corresponding increase in equity, over the period in which the performance conditions are fulfilled, 
ending on the relevant vesting date. The cumulative expense recognised for equity-settled transactions at each reporting date until 
the vesting date reflects the extent to which the vesting period has expired, and is adjusted to reflect the Directors’ best available 
estimate of the number of equity instruments that will ultimately vest.
Where the terms and conditions of options are modified before they vest, the movement in the fair value of the options, measured 
immediately before and after the modification, is also charged to the profit and loss account over the remaining vesting period.
 Guarantee contracts
Where the Company enters into financial guarantee contracts and guarantees the indebtedness of other companies within the 
Group, the Company considers these to be insurance arrangements, and accounts for them as such. In this respect, the Company 
treats the guarantee contract as a contingent liability until such time that it becomes probable that the Company will be required to 
make a payment under the guarantee.
2 Profit and loss account
As permitted by Section 408 of the Companies Act 2006 the Company has elected not to present its own profit and loss account 
for the year. The loss after tax for the year recognised in the profit and loss account for the Company was £1,882,000 (2010: 
£14,010,000 profit, which included dividends received from investments in subsidiaries of £19,003,000).
The Company audit fee for the year amounted to £54,000 (2010: £54,000). 00 00 www.blacks.co.uk www.millets.co.uk 76
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3 Employee benefits expense
        2011 2010
        £’000 £’000
Wages and salaries       794   771 
Social security costs       83   85 
Pension costs        75   78 
         952   934 
Equity-settled shared-based payments expense      280   243 
Total       1,232  1,177 
The average number of persons, including Directors, employed by the Company was as follows:
        2011 2010
        Number Number
Full-time
— Management and administration      6  3 
Part-time       2  3 
Total       8  6 
4 Dividends paid and proposed
No dividends have been declared or paid on Ordinary Shares in respect of either the current or prior year.
Preference dividends are charged to the profit and loss account as finance costs.
5 Investments in subsidiary undertakings
        £’000
Cost
At 27 February 2010 and 26 February 2011      72,674 
Provisions for impairment
At 27 February 2010 and 26 February 2011      (18,484)
Net book value at 27 February 2010 and 26 February 2011     54,190 
The principal subsidiary undertakings are detailed in note 16 to the consolidated financial statements.
Notes to the Company Financial Statements
for the year ended 26 February 2011 00 00 77
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6 Debtors
        2011 2010
       £’000 £’000
Amounts owed by Group undertakings     25,757  20,111
Prepayments and accrued income      214  13
        25,971  20,124 
Amounts owed by Group undertakings are repayable upon demand and are non-interest bearing.
7 Creditors: amounts falling due within one year
        2011 2010
       £’000 £’000
Amounts owed to Group undertakings     7,262  18,485
Accruals and deferred income      249  1,135
Other creditors       —  64
        7,511  19,684 
Amounts owed to Group undertakings are repayable upon demand and are non-interest bearing.
8 Creditors: amounts falling due after more than one year
        2011 2010
       £’000 £’000
Preference Shares (see note 9)      891  891
9 Called up share capital
       2011  2010
     Number £’000 Number £’000
Ordinary Shares
Allotted and fully paid shares of 1p each   84,051,019 840 42,638,103 426
Deferred Shares
Allotted and fully paid shares of 49p each   42,638,103 20,893 42,638,103  20,893 
Preference Shares
Allotted and fully paid 10% cumulative shares of £1 each  891,429 891 891,429 891
On 23 April 2010, 2,131,905 warrants to acquire Ordinary Shares were exercised at nominal value and, accordingly, the Company 
issued 2,131,905 Ordinary Shares. In addition to this, the Company issued a further 39,281,011 Ordinary Shares, at a subscription 
price of 54p each (before deducting issue costs of £1,757,000), on 24 May 2010 under a Placing and Open Offer and a Firm Placing.
Preference Shares are presented within creditors falling due after more than one year, in accordance with the requirements  
of FRS25.
Rights attaching to each class of share are disclosed within the Directors’ Report and Business Review. 00 00 www.blacks.co.uk www.millets.co.uk 78
Blacks Leisure Group plc  Annual Report and Accounts 2011
20321.04   10/06/2011   Proof 5
10 Share premium
        £’000
At 27 February 2010       24,333
Premium arising on issue of share capital (note 9)      19,062
At 26 February 2011       43,395
11 Equity-settled share-based payments
The grants and related accounting treatment adopted by the Company under FRS20 ‘Share-based Payment’, in relation to share 
options, are identical to that adopted by the Group under IFRS2 ‘Share-based Payment’. For details please refer to note 29 in the 
consolidated financial statements.
12 Reserve for own shares
        £’000
At 27 February 2010 and 26 February 2011      (773)
This reserve represents Ordinary Shares held by the Blacks Leisure Group Employee Benefit Trust that provides for the issue of 
shares to Group employees under share incentive schemes. The number of shares in the Trust amounts to 344,578 (2010: 344,578) 
with a market value at the year end of £77,000 (2010: £177,000).
13 Profit and loss account
        £’000
At 27 February 2010       9,012 
Loss for the financial year       (1,882)
Equity-settled share-based payments credit      280 
At 26 February 2011       7,410
14 Shareholders’ funds
        2011 2010
        £’000 £’000
(Loss)/profit after taxation      (1,882) 14,010 
Dividends       —  —
Retained (loss)/profit      (1,882) 14,010 
Issue of share capital      19,476  —
Accrued equity-settled share-based payments     280  1,277 
Net movement in Shareholders’ funds      17,874  15,287 
Opening Shareholders’ funds      53,891  38,604 
Closing Shareholders’ funds      71,765  53,891
15 Commitments and contingencies
 Contingent liabilities
The Company guarantees the bank borrowings of subsidiary undertakings which at 26 February 2011 amounted to £15,411,000 
(2010: £15,310,000).
Notes to the Company Financial Statements
for the year ended 26 February 2011 00 00 79
20321.04   10/06/2011   Proof 5
Our Financials Our Governance Our Business
     2011 2010 2009 2008 2007
     £’000 £’000 £’000 £’000 £’000
Results (from continuing and  
discontinued operations)
Revenue    201,933  249,048  267,551  294,414  298,276 
Operating (loss)/profit excluding exceptional items  (3,814) (14,326) (4,465) 2,181  1,583
Exceptional items    1,321  (27,116) (7,577) (9,596) (13,936)
Operating loss    (2,493) (41,442) (12,042) (7,415) (12,353)
Net finance costs    (2,766) (5,499) (2,374) (1,845) (1,491)
Loss before tax    (5,259) (46,941) (14,416) (9,260) (13,844)
Loss attributable to equity holders   (5,488) (49,432) (14,761) (6,051) (12,624)
Assets employed
Non-current assets    54,496  55,117  70,835  78,452  79,950 
Current assets    43,147  47,409  63,344  71,466  80,637 
Non-current liabilities   (10,219) (10,939) (17,449) (18,514) (15,092) 
Current liabilities    (53,436) (71,152) (47,759) (47,972) (53,607)
Net assets    33,988  20,435  68,971  83,432  91,888
Financed by
Equity    33,988  20,435  68,971  83,432  91,888
Key statistics
     Pence Pence Pence Pence Pence
Loss per share — Basic   (6.56) (116.88) (34.91) (14.20) (29.69)
Loss per share — Diluted   (6.56) (116.88) (34.91) (14.20) (29.69)
Ordinary dividend per share   0.00  0.00  0.00  3.00  5.30 
Five Year Summary 00 00 www.blacks.co.uk www.millets.co.uk 80
Blacks Leisure Group plc  Annual Report and Accounts 2011
20321.04   10/06/2011   Proof 5
Shareholder Notes www.blacks.co.uk www.millets.co.uk
With a heritage dating back to 1861, Blacks 
Leisure Group plc (‘Blacks Leisure’) operates in 
the retail of Outdoor and Boardwear clothing and 
equipment in the United Kingdom, Channel Isles 
and Ireland.
Welcome to 
Blacks Leisure Group plc
Blacks Leisure Group plc  Annual Report and Accounts 2011
Exit from non-core Boardwear segment to be 
completed by half year
New banking facilities agreed up to  
November 2012
Julia Reynolds to join as new Chief Executive
Significant reduction in loss before tax to £5.3m 
(2010: £43.6m) and in loss before tax and 
exceptional items to £6.6m (2010: £14.4m)
New stores performing strongly
Focused on the Outdoors
20321.04   10/06/2011   Proof 5 20321.04   10/06/2011   Proof 5 Blacks Leisure Group plc
440/450 Cob Drive, Swan Valley
Northampton  NN4 9BB 
T: +44 (0)1604 597000  F: +44 (0)1604 597171
Shareholder helpline: 0871 664 0300
Email: info@blacksleisure.co.uk
www.blacksleisure.co.uk
Annual Report and Accounts
for the year ended 26 February 2011
Stock Exchange Code: BSLA
Focused 
on the future
Blacks Leisure Group plc Annual Report and Accounts for the year ended 26 February 2011
20321.04   10/06/2011   Proof 5 20321.04   10/06/2011   Proof 5