MBA403 Assessment 3: Investor Report on Accent Group Limited

This report provides an in-depth analysis of Accent Group Limited's 2018 annual report, focusing on key financial aspects relevant to potential investors. It examines the company's income statement, cash flow statement, and financial position statement, highlighting changes in revenue and profit, and their economic drivers. The report explores the company's financial strategies, including its management of market risks and capital optimization, as well as its growth plans involving new store openings and e-commerce expansion. Non-financial factors, such as management strategies and product initiatives, are also discussed. The report concludes with recommendations for potential investors based on the company's financial performance and strategic outlook, emphasizing the company's potential for future profit and the security it offers for investments. The report references the Accent Group Limited annual report and other academic sources to support its findings and recommendations.

Accent Group Limited: Investor Report 1
Accent Group Limited: Investor Report
Executive Summary
This report interprets the 2018 annual report of Accent Group Limited. It specifically
addresses the relevant financial information which may be needed by the potential investor to
decide on whether to make investments in the company or not. The report analyzes the
company`s finacial position statement, income statement and cashflow statement. It then
explains the ecomic causes of the changes in the revenue and financial results of the company
and gives recommendations for potential investors. More so, it anayses the market risks for
potential investors.
Introduction
Accent Group Limited is one of the leading public companies in the distribution of
lifestyle and performance footwear. Out of over 2000 companies in Australia, the company is
ranked 620. Most of the compoay`s income is generated from Footwear retailing. In the preious
year, Accent Group obtained a total revenue of 703.183 million dollars. The company comprises
of over 420 stores established in ten retail banners. Additionally, the company owns distribution
rights for over 10 international brands in both Auastralia and New Zealand. The brands of the
company include Platpus shoes, Merrell, Skechers, Timberland, Stance, The Athlete`s Foot and
so mant others. A unique presence is delivered to the retail sector by every brand that is
distributed by Accent Group Limited. For example the Athlete`s foot is ranked the largest retailer
of athletic footwear in Australia, (Accent Group Limited, 2018).
Analysis
Income statement
As at July 2018

Accent Group Limited: Investor Report 2
The financial performance of Accent Group Limited is indicated by its income statement,
cash flow statement and financial position statement. The company comprises of several
expenses including costs incurred on employee benefits, finished goods, rent, promotion, and
advertising, freight ad warehouse expenses, finance costs and so many others. Compared to
2017, there has been an increase in the revenue of the company from 636.153 million dollars to

Accent Group Limited: Investor Report 3
703.181 million dollars in the year of 2018, (Odudu et al, 2018). The total comprehensive
income of the company increased from 30.826 million dollars in 2017 to 50.994 million dollars
in 2018. Generally, the company is experiencing rise in its revenue and profit level. More so, the
rise in the profits of the company is attributed to Accent Group owners. The company is highly
exposed to fluctuations in exchange rates since it undertakes some transactions, which are
denominated in foreign currencies. The company then uses currency contracts to manage the
market risks leading to inventory purchase exposure, which are denominated in United States
dollars. To ensure that all group entities continue operating, the company effectively manages its
capital while maximizing the stakeholders` returns. This is carried out through equity balance
and debt optimization, (Ajekwe & Ibiamke, 2018).
Interpretation
The changes in the profit level of the company are attributed to the owners of Accent
Group Limited and the strategy of the company, which entails delivering of the best customer
experience. According to the management of the company, the industry the company is operating
in is experiencing stiff competition from international companies and the consumer environment
is very challenging. Despite such challenging situations, the company has achieved good
progress as per its growth plans, which include establishment of new stores and rise in its digital
sales. The capital returns and EBITDA performance of the company increased due to the
excellent results obtained in the new stores established by the company. Following the excellent
results achieved in the new store openings, the company is looking forward to open over 30 new
stores and more 30-40 stores in the next 2 years. A 600 square meter megastore is also expected
to be opened in Melbourne. Additionally, a show case of Accent accessories and brands is also to
be implemented, (Halim & Soenamo, 2018).
Financial aspects
The company has also experienced a significant increase in its gross profits through reduction in
its discounts and vertical sales of its brand, (Osamor et al, and 2019). The digital sales increased
by 131% due to the establishment of four new sites of e-commerce by the company. The
company`s new store concepts for Platypus and Hype facilitated development of the in store
design which resulted into integrated world class elements of retail customer experience.
Non-Financial factors that have a direct impact on the performance of Accent Group
The company`s management is one of the factor attributed to the increase in the profit
margins of the company. The team has set up a professional dedicated team specifically to focus
on emerging and vertical brands. The company has also launched multiple new initiatives of
products in different brands of the group. Currently, the management of the company is
investigating whether there is any possibility of it expanding into foreign markets with a
preferred expansion method noted as direct organic entry through its brand of Platypus, (Herath,
& Albarqi, 2017).
Recommendations and conclusion
Following this progress as well as past performance of the company, potential stakeholders
can estimate future profits. The financial position statement of the company increases security of
the potential stakeholders` investments, (Yusuf & Sapura, 2019).

Accent Group Limited: Investor Report 4
The strategies and plans of the company are also very strategic for any potential shareholder
to make investments in Accent Group a company with such a financial performance and strategic
future plans.

Accent Group Limited: Investor Report 5
Reference List
Accent Group Limited. (2018). Accent Group Annual Report. Retrieved from
http://onlinereports.irmau.com/2018/AX1/51/#zoom=z
Ajekwe, C.M & Ibiamke, A. (2018). Finacial Statement analysis to Predict Stock returns of
Listed Consumer Goods Firms in Nigeria. Journal of Finance and Accounting.
Barth,M. (2018). The Future of Financial Reporting: Insights from Research. Retrieved from
https://onlinelibrary.wiley.com/doi/full/10.1111/abac.12124
Halim,S & Soenamo,Y.N.(2018). The Costs and Benefits of Reducing Complex Disclosures.
Journal of Finance and Accounting.
Herath, S & Albarqi, N. (2017). Financial Reporting Quality: A Literature Review. Retrieved
from
https://www.researchgate.net/publication/314236476_Financial_Reporting_Quality_A_L
iterature_Review
Odudu, AS., Terzungwe, N., and Joshua, O. (2018). Institutional and Block-holder Ownership
and Audit Quality of Listed Manufacturing Firms in Nigeria. Journal of Finance and
Accounting.
Osamor, IP., Anene, EC., and Saka, Q. (2019). Impact of Stock Market Liquidity on Herding
Behaviour: A comparative study of Conglomerate and Consumer Goods Sectors. Journal
of Finance and Accounting.
Yusuf,A & Saputra,I.A.G.(2019). The Role of Internal Audit in Corporate Governance and
Contribution to Determine Audit fees for external Audits. Journal of Finance and
Accounting.