Governance & regulatory information Board leadership and company purpose continued >>Decision to repay UK Again, a wide range of stakeholderinterests were considered, including the strong financial performance of the Government support business, that sales and market sharehad been lost during periods of forced provided through the Covid-19 crisisstore closures, that the Company had operated a self-funded furlough scheme for colleages during FY21,u any potential impact on suppliers and colleagues as noted above, the fact The financial and not to claim further amounts under the that repayment would reduce the operational performance of JRS, and in December 2020 the Board potential returns to shareholders who considered and decided to repay the had not received a dividend in FY20 the Group was severely £14.5m received under the JRS. A key (although dividend payments have impacted by the Covid-19 trade-off discussed was the potential been reinstated in FY21), the stated impact on FY21 profit and shareholder policies of shareholders and their pandemic in both FY20 returns in the event of potential further representatives in relation to and FY21. lockdowns and store closures. However, repayment of Covid-related relief, the it was noted that were these to happen, potential competitive imbalances as a and if Click & Collect would be permitted result of the boundaries between In both years we had to close our (unlike the first lockdown in March and essential and non-essential retail, and stores for extended periods and April 2020), then ourbusiness would still the potential reputational impact of a therefore lost sales, profit and market likely break even and be profitable and decision not to repay. After carefully share to stores who were permitted to cash generative in FY21, even after balancing the respective stakeholder stay open. Once wweeabletoe r repayment. From a colleague perspective, interests, the Board decided that for re-open our stores, our sales the Board agreed that the repayment the same reasons noted above in performed strongly owing to would have little bearing on our relation to the JRS, the Covid-related investments in our customer colleagues’ wellbeing; many colleagues grants should be repaid. However, the proposition, our focus on making our would be employed in store to support Board considered that the balance was stores, deliveries and workplaces safe our Click & Collect operations and to in favour of not repaying business rates for colleagues and customers, our prepare for store re-openings and the relief in addition to the JRS and accelerated digital innovation and the time could also be used constructively Covid-related grants. dedication of our colleagues. During to train our colleagues and keep them this time we proved the strength and motivated. Additionally, any colleague not RISKS TO DUNELM resilience of our business model. required or unable to work would receive Short-term impact on profit and at least 80% of their contractual pay under shareholder returns/colleague In making decisions around UK our own Company-funded furlough incentives. Government Covid support, the Board equivalent scheme. There would, however, has carefully considered both the be some potential disadvantage for those OPPORTUNITIES FOR DUNELM respective interests of all of our colleagues in a performance-related Enhanced reputation for adhering stakeholders and a range of other bonus or share incentive scheme. The to shared values; potential to pay factors, including the strong recovery Board also discussed that the ability of the dividends and colleague bonus of the business, the fact that our stores Group to pay suppliers, landlords and without damaging reputation; were closed to customers for a third of HMRC in full and in accordance with long-term benefit to shareholders, the financial year and the competitive agreed terms would not be adversely customers, colleagues and imbalances arising from the impacted by repayment. Having taken communities. boundaries between essential and the above stakeholder matters into non-essential retail. consideration, it was agreed that in the long-term interests of the Company, its KEY STAKEHOLDER From March to June 2020, Dunelm reputation and its adherence to its shared TRADE-OFFS received support of £14.5m under the values, the repayment of the JRS received Reputation v Shareholders UK Government’s Job Retention in FY20 outweighed other considerations. Scheme (JRS) to help fund the pay of our colleagues who were unable to work as In June 2021, the Board considered a result of our stores being closed, and/ whether to repay support received by way or because they were vulnerable or a of business rates relief to all retailers in carer for a vulnerable individual. In June FY20 and FY21, and Covid-related grants 2020, having proved the resilience of received inFY21 targeted at retailers who the Group’s business model we decided had been forced to close their stores. 110 DUNELM GROUP PLC ANNUAL REPORT & ACCOUNTS 2021