ProCook : Annual Report and Accounts

Bringingjoy toeveryday cooking

Annual Report and Accounts 2024

Introduction

Equipping everyone with the tools to bring joy to everyday cooking

ProCook is the UK's leading direct- to-consumer specialist kitchenware brand, providing customers a distinctive multichannel shopping experience with our high-quality range of direct-sourced kitchenware at unbeatable value. We're a responsible retailer committed to being a force for good for all stakeholders.

Our mission

To be the customers' first choice for kitchenware

Read more about our 4 strategic priorities:

	1			2
Accelerate profitable		Improve operating
sales growth		efficiency
Read more on pages 12 to 16		Read more on page 17

	3			4
Create an even better		Being a force for good
place to work		Read more on pages 19 to 21
Read more on page 18

Group plc Annual Report and Accounts 2024

Group overview

Revenue	Gross profit margin %	Underlying PBT
£62.6m	APM	APM	1.0m FY24
65.7%FY24	£
FY24	61.5% FY23	(£0.2m) FY23
£62.3m FY23
Free cash flow	LFL Revenue %	Number of new
					customers ('000)
	APM	APM
	£	2.0mFY24	(2.0%)FY24	687 FY24
(£0.5m) FY23	(10.7%) FY23	692 FY23
Number of active	Trustpilot	Number of
customers in the last	score	retail stores
12 months ('000)	4.8 FY24	57 FY24
1,047 FY24
991 FY23	4.7 FY23	58 FY23
Colleagues employed		This report contains Alternative Performance Measures,
APM
at reporting date	which	may not be defined in accordance with Statutory
measures
578 FY24	Read more on pages 166 to 169.
624 FY23

Operational overview

We operate from our Store Support Centre located in Gloucester which is home to our logistics, customer services and all central functions.

We currently have 58 stores spread geographically throughout the UK located in leisure-based retail centres. Our stores offer customers outstanding service providing convenience, the opportunity

to test products, and helpful service from knowledgeable colleagues.

Customers can also shop online for home delivery at www.procook.co.uk

Store locations

Store Support Centre

Visit our website at:www.procookgroup.co.uk

Overview

Contents

Strategic Report

1. Chair's introduction

1. CEO's review

1. Business model

1. Engaging with stakeholders

1. Strategy for growth

1. Accelerate profitable sales growth

1. Improve operating efficiency
2. Create an even better place to work
3. Being a force for good

1. Sustainability

1. Task Force on Climate-Related Financial Disclosures

1. Progressing towards net zero

1. Climate-relatedrisk register

1. Non-financialinformation and sustainability statement
2. Key Performance Indicators

1. CFO's review

1. Risk management

1. Principal risks and uncertainties

1. Assessing long-term viability

Governance Report

1. Chair's governance letter

1. Governance framework

1. Board of Directors

1. Division of Directors' responsibilities

1. Board activities

1. S.172 statement

1. Making the right decisions for our stakeholders

1. Nomination Committee report

1. Audit and Risk Committee report

1. Remuneration Committee report

1. Directors' Remuneration Policy

1. Annual Report on Remuneration

1. Directors' report

1. Statement of Directors' Responsibilities

Financial Statements

1. Independent auditor's report

1. Consolidated Financial Statements

1. Consolidated Financial Statements Accounting Policies

1. Notes to the Consolidated Financial Statements

1. Parent Company Financial Statements

1. Parent Company Financial Statements Accounting Policies

1. Notes to the Parent Company Financial Statements

1. Alternative Performance Measures

Group plc Annual Report and Accounts 2024

01

Chair's introduction

Our refreshed strategy is focused on accelerating profitable growth, the pace of change and urgency of delivery has been renewed, and we have greater clarity around strategic priorities and direction."

Greg Hodder

Chair

Since I joined ProCook shortly before the IPO in November 2021, we have been through a period of significant change as the Group became a larger and a publicly-listed business. We have navigated extremely challenging trading conditions which have affected consumers disposable income and inflated our cost base, whilst making the right investment decisions for continued long term growth. The journey has not been easy, but we are beginning to see momentum build in the Group's trading performance, returning ProCook to growth, profitability and positive cash generation.

In September last year our new CEO Lee Tappenden succeeded Daniel O'Neill, the Group's founder who has now transitioned to a Non-Executive role. Lee has brought energy, vision and different perspectives. In the months since Lee's arrival, the pace of change and urgency of delivery has been renewed, and we have greater clarity around strategic priorities and direction. The open and ambitious culture built by Daniel over the years, has been a galvanising force with our colleagues working together to build a better business and to better serve our customers.

Lee has established his new Leadership Team for the next chapter, and we now have a majority of women around the Leadership Team table having welcomed Marta Navas as Ecommerce Director, Claire Tait

as Marketing Director and Laurie Haughton as Commercial Director. The right senior team is now in place to accelerate profitable growth over the medium term.

ProCook is a business which has a unique position in its sector, with our own-brand and direct-sourced specialist offer. Our customer proposition is excellent, providing customers high quality products at unbeatable value always with outstanding service both in-store and online. Once discovered, customers are great advocates, but our market share and brand awareness remain low providing significant opportunity for growth, while our strong business foundations provide a solid platform from which we can build on.

Our refreshed strategy is rightly focused on capturing this growth opportunity. Our store network today serves less than 40% of the UK population and by expanding our physical footprint we will not only drive profitable sales growth, but our increased physical presence will act as a beacon for the brand helping to raise awareness.

The launch of tableware in 2019 and electricals in 2023 give us confidence that we can continue to develop the product range, extending and adding new categories and adding more seasonal relevance and inspiration which we know our customers want. Whilst ProCook's customer service is already excellent-rated, this will be elevated to a new level by an even deeper focus on our customer which, accompanied by our brand building activities particularly through digital channels, will allow us to increase awareness, advocacy and loyalty.

02	Group plc Annual Report and Accounts 2024

Professional Steel cookware

Strategic Report

Being a force for good

ProCook is a responsible retailer, an ethos which is embedded in our proposition and cultural values. We remain focused on listening to our colleagues and creating an even better place to work. Our continued membership of the Real Living Wage Foundation reflects our commitment to support our people as best we can through the pressures of the cost-of- living crisis, providing fair pay for all.

We are taking the right steps to progress our ambition to achieve net zero by 2040 and, as a B Corp, we believe that we can be a force for good, encouraging customers and other organisations to make positive choices which help protect our planet and better serve the communities we operate in.

The support from all our people and suppliers to our mission has been outstanding and on behalf of the Board, I would like to express our sincere thanks.

Greg Hodder

Cost pressures remain high, and a relentless focus on cost-discipline and operational efficiency is critical. By improving supply chain effectiveness and use of technology, the Group will reduce costs to serve and become more nimble.

Dividend

In light of the continued macro uncertainty, and the Group's plans to continue to invest in areas which will support future performance and growth, the Board is not recommending a dividend payment for this financial year in order to preserve cash within the business during this period. The Board will continue to review dividend payments in future periods in line with the Group's Capital Allocation Policy.

Our Board

I am committed to ensuring that the Board remains focused on strategy development and execution whilst we continue to take our governance commitments very seriously.

These two parallel tracks are key to generating a sustainable business that delivers for all our stakeholders. The Non-Executive Directors continue to work very well with the Executives and wider Leadership Team, providing relevant sector experience and skills with pragmatic knowledge-sharing and insight, combined with appropriate challenge on strategic, operational and governance matters.

In June, we welcomed Meg Lustman to our Board as Non-Executive Director and Chair of the Remuneration Committee to replace Luke Kingsnorth. Meg brings over 35 years of retail experience to the Board which will

be invaluable as we continue to build on the growing momentum in our performance.

Luke, who has been with us since IPO and added tremendous value over the last three years, has now stood down from the Board to focus on other professional commitments and I would like to thank him for the consistent high quality of his contributions during his time with us.

Chair

25 June 2024

Group plc Annual Report and Accounts 2024

03

CEO's review

Bringing joy to everyday cooking

	Accelerate profitable		Create an even better
1	3
	sales growth		place to work
	Improve operating
2	4	Being a force for good
efficiency

Our refreshed strategy and strengthened customer focus is beginning to deliver improved performance and we have both the opportunity and a clear plan to accelerate this further."

Lee Tappenden

Chief Executive Officer

Read more: Further information about our strategic priorities is set out in the following sections:

Accelerate profitable sales growth - page 12

Improve operating efficiency - page 17

Create an even better place to work - page 18

Being a force for good - page 19

I am pleased to provide my first report as CEO of ProCook and I would like to take the opportunity to thank all ProCook colleagues for the very warm welcome and their continued commitment, passion and customer-focus during what has been an extremely challenging trading environment over the last two years.

In the months since I joined, my initial impressions of the business have been reinforced. The Group has real strength in its own-brand, direct sourced model, providing a specialist retail offer with a high quality product range. The service delivered by our passionate colleagues in our retail stores is outstanding, and this helps build strong loyalty once customers find us.

I am pleased that the team under Daniel O'Neill's leadership have invested wisely in capability and infrastructure, building solid foundations to support future growth.

These strong foundations and our unique specialist proposition, combined with low brand awareness and a fragmented marketplace, provide a significant opportunity for us to accelerate profitable growth.

Building momentum and improving performance

Trading momentum has improved throughout the last financial year and ProCook has returned to profit and generated positive cash flows in FY24.

Market conditions have remained challenging with the macro backdrop impacting customers' disposable incomes and spending decisions. Total revenue of £62.6m was up 0.4% year on year, and when excluding the impact of discontinued Amazon EU channels that were exited last year, revenue increased by 1.7% reflecting modest market share gains.

Gross margins recovered to 65.7% (FY23: 61.5%) following the impact of heightened shipping costs in last year's results, and with continued cost discipline the Group has delivered an improved underlying profit before tax of £1.0m (FY23: loss of £0.2m). Statutory reported profit before tax increased to £0.7m (FY23: loss of £6.5m, including £4.4m of impairment expenses).

Retail performance has remained resilient with revenue increasing by 8.7% including like for like growth of 2.8% and the impact of two new and one upsized stores. We took the opportunity to close three smaller, less profitable, garden centre stores in quarter four as lease break points became available. Like for like growth was driven by product innovation including the launch of new Electricals ranges, pricing improvements for customers, and continued focus on delivering outstanding customer service.

Ecommerce revenue declined by

11.5% including a 2.8% point impact of the discontinued Amazon channels, and lower sales on our own website which reduced by 8.7% year on year. Performance was impacted by disruption from the transition to a new platform which began in early Summer and had lasting effects through to Black Friday, and has since improved, delivering stronger conversion rates and reduced time to develop new customer features.

The Group ended the financial year with net debt of £0.7m (FY23: £2.8m) reflecting free cash flow generation of £2.0m (FY23: outflow of £0.5m) and available liquidity of £15.3m.

Read more: CFO's review - pages 46 to 49

04	Group plc Annual Report and Accounts 2024

Strategic Report

Our strategy for growth

Over the last 28 years ProCook has developed its business model to offer customers high quality products at unbeatable value, delivered with outstanding multichannel service. During the year the Group further improved its excellent-rating

from Trustpilot with over 110,000 5-star reviews received and was again recognised by Which? as a Recommended Provider ranking joint second in the UK by customer review score.

Following a period of significant growth before and during Covid-19, the Group has gone through a period of significant change in the last two years, consolidating operations, investing for future growth, and we have now established our new Leadership Team for the next chapter after welcoming our new Ecommerce, Marketing and Commercial Directors to the team.

During the months since I joined the Group, I have worked with the Board and Leadership Team to develop a refreshed strategy to drive forward our specialist proposition and unique business model with the focus, energy and pace needed to accelerate our mission to become the customers' first choice for kitchenware. Our plan will deliver sustainable and profitable growth for all of our stakeholders and we are targetting 100 retail stores, £100m, revenue and 10% operating profit margin over the medium term. This Annual Report sets out the strategic progress we've made in the last year and the activities which we will be pursuing in the years ahead, namely:

	Accelerate profitable
1
sales growth

Expand our store network: Enabling more customers to shop in our stores by increasing physical retail coverage towards 100 profitable stores across the UK.

Strengthen our product offer: Creating more reasons to shop with us by adding extended ranges and improving our seasonal and promotional campaigns, adding more inspiration and broadening our appeal.

Deliver best in class omnichannel customer service: Putting the customer first to deliver even better service and a seamless experience across in-storeand online, however our customers want to shop with us.

Grow brand awareness and customer engagement: Helping more customers discover ProCook for the first time, and encouraging more existing customers to shop with us again by adding more personality and personalisation.

	Improve operating
2
	efficiency

Supply Chain Transformation: Transforming our supply chain to better serve our retail stores and customers, by increasing delivery frequency, reducing out of stocks and improving availability whilst operating at a lower cost.

Resilient and scalable Technology solutions: Developing and evolving our technology solutions and capabilities to support greater operational efficiency while improving ease of use for our customers and colleagues.

	Create an even better
3
	place to work

Developing our teams and our leadership capabilities: Enhancing

our service and product training for all customer-facing colleagues to further improve customer experience and focusing on our leadership development to ensure we deliver on our accelerated growth ambition.

Building a high performance culture: Adding greater pace and urgency into our ways of working to ensure our people are focused on the right priorities and deliver effectively together as one team.

4 Being a force for good

Reducing our environmental footprint: Continuing the great work that has already been achieved to help

protect our planet, by progressing our action-plan to deliver on our commitment of Net Zero by 2040.

Caring for our communities: Increasing our support for the local communities in which we operate, acting as a force for good for society as a whole.

Outlook for the year ahead

The Group has had a strong start to the new financial year with trading momentum continuing to build on the trend established during the last financial year. During the first quarter of FY25, we delivered like for like sales growth of 3.5% with positive year on year performance in both Retail (+2.4% LFL) and Ecommerce (+5.5% LFL). Including the effect of new stores (net of store closures last year) our total revenue increased by 5.6%.

Whilst mindful of the uncertain macro backdrop, we are confident in our unique specialist proposition and encouraged by the improving momentum we have been delivering over the last year.

In FY25 we expect to deliver modest revenue growth, primarily driven by a recovery in Ecommerce sales, following the website transition disruption last financial year, and the planned opening of ten new stores in the current year. We anticipate maintaining gross margins, whilst delivering products at unbeatable value. Our continued focus on cost discipline across our business is expected to deliver further operating efficiencies which will allow us to reinvest carefully to accelerate future profitable growth.

Despite the continued macroeconomic and geo-political challenges, our refreshed strategy and strengthened customer focus is beginning to deliver improved performance and we have both the opportunity and a clear plan to accelerate this further.

Lee Tappenden

Chief Executive Officer

25 June 2024

Group plc Annual Report and Accounts 2024

05

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How we bring joy to everyday cooking

Quality products

At every price point, we offer high quality, thoughtfully designed products, that are built to last

Our products are designed, sourced, and refined by our in-house design and buying teams, who focus on quality, functionality, durability, sustainability, and style to ensure our customers enjoy using them in everyday cooking for many years. We are obsessed with quality and committed to working in a transparent and fair way with our suppliers to improve manufacturing standards and promote responsible sourcing.

Unbeatable value

Our own-brand products and direct sourced model enables us to offer lower prices for our customers

Our business model allows us to offer unbeatable value for our customers as we design and source products direct from the manufacturers. We target savings for our customers of at least 30% against comparable products from competitor brands. Additionally, we serve up great offers and promotional ranges through the year to provide value to our loyal customer base.

Distinctive multichannel customer service

We delight our customers with outstanding service, both in-store and online, making it easy to shop with us

Our 58 retail stores are spread throughout the UK and provide customers a convenient and inspirational shopping experience. Our knowledgeable and friendly colleagues offer best-in-class customer service levels and help customers to trial products in store and select the right products for their needs.

Our proprietary website is designed to be easy to use and inspirational, with convenient home delivery and payment options for customers. We merchandise products using high- quality imagery and video content produced in our own studio to inspire our customers.

A responsible retailer

We're a B-Corp. We pay all colleagues the Real Living Wage, while protecting our planet and serving our communities

As a certified Great Place to WorkTM company, we are committed to treating our people well. We employ over 600 colleagues across our stores, logistics, customer service and central support functions. Our culture reflects our family heritage, and our teams are agile, collaborative, and passionate in delivering for our customers.

We care for our communities too, raising funds for Life's a Beach and our colleague-nominated charity of the year as well as supporting Young Gloucestershire. With substantial progress already made in reducing our impact on the environment we have a clear target of achieving Net Zero by 2040.

Our new Store Support Centre, which is home to central support teams including our logistics operations, is BREEAM "Excellent" rated with strong sustainability credentials.

06	Group plc Annual Report and Accounts 2024

Strategic Report

How we create value for all our stakeholders

As a B Corp we are committed to being a force for good for the benefit of all of our stakeholders and to have a material positive impact on society and the environment.

Customers

Our mission is to become the customers' first choice for kitchenware. In order to achieve our strategic ambitions, it's essential we attract new customers to shop with us and grow engagement and loyalty with our existing customer base. We constantly strive to improve our proposition for our customers

to offer even greater value, broader choice and an exceptional service experience every time they shop with us.

Which? Recommended Provider December 2023 with a Customer score of 82%

Colleagues

We're committed to creating an even better place to work for our people who are key to the long-term development of our brand. Colleague engagement and motivation is vital to us fulfilling our purpose, protecting our culture, and delivering on our strategy so we pay all colleagues at least the Real Living Wage, and are committed to supporting their personal development and well-being.

We're a Great Place to WorkTM,	Real Living Wage Foundation
three years running	member since 2021

Suppliers

We believe in treating everyone fairly, including our suppliers. This has allowed us to build enduring supplier relationships, some for over 20 years, which ensures that we are always working towards a common goal. We work together with our suppliers to bring new products to market, driving up their production volume, while encouraging and supporting their sustainability programmes.

Working with Sedex and our suppliers to promote more sustainable manufacturing practices

Communities

We are committed to caring for our communities and planet and being a force for good in our communities. The positive impact we create reinforces ProCook as a great place to work, and a great place to shop.

Partnering with Life's a	New colleague-nominated
Beach since 2019	charity of the year for FY25

Shareholders

We recognise that the trust of our shareholders, through their ongoing engagement, ensures continued support and investment, in turn supporting ProCook's continued growth and development. We've begun a programme to improve direct communication and engagement with retail investors to ensure that everyone has the chance to learn about our Group.

Adopting IMC for expanded reach to all investor groups commencing with FY24

Group plc Annual Report and Accounts 2024

07

Engaging with stakeholders

Section 172(1)

Statement

Our decisions and actions have significant impacts on our stakeholders, and in delivering our strategy and fulfilling our purpose we are guided by our values to always do the right thing. We are committed to regular, open, and effective engagement with our stakeholders and recognise that this is essential to ensure that the impacts of important decisions we make are appropriately considered.

The Directors confirm that they have, during the year, acted in a way that they consider, in good faith, to be most likely to promote the success of the Company for the benefit of its members and stakeholders as a whole, and in doing so have had regard to the matters set out in s172(1) (a) to (f) of the Companies Act 2006.

Further information on how the Directors have fulfilled their s172(1) duties, as well as examples of decision-making is set out in the Governance Report.

Read more: Board activities - pages 74 to 77

Read more: S. 172 statement - pages 78 to 79

Customers

What matters most

• Product quality, design, choice, and value for money
• Ease of shopping experience across all touchpoints
• Inspiration and advice
• Sustainability

How we engaged

• This year we ran a series of customer listening groups at our Store Support Centre listening to their experiences of shopping with ProCook and learning how to improve. We also completed 1,200 non-purchasing customer exit surveys at our stores helping us to understand our strengths and points of friction
• During the year, we launched Net Promoter Score surveys on our website and at the end of the year this was implemented for customers in our stores. We have begun collecting and reviewing data at our Customer Focus Group
• We have scaled our activity on organic social media channels over the last 12 months, introducing our resident food expert to showcase "how-to guides" and recipe hints and tips for customers, which is building engagement

Priorities for the year ahead

• Embed NPS as a key performance indicator for internal reporting, adding surveys to more touchpoints including Customer Service and post-delivery. Ensure action, based on customer feedback, is taken promptly through the Customer Focus Group
• Undertake more customer listening groups to ensure we hear and learn from our customers experiences.
  Embed customer feedback and focus into our commercial, marketing and operational activities
• Continue to develop organic social media capability, developing a loyal and engaged customer community
• Improve our CRM programme to build customer loyalty and engagement

Read more: Strategy for growth

• pages 10 to 11

Colleagues

What matters most

• Our culture and values
• Wellbeing
• Community and the environment
• Regular communication on objectives, performance, and strategy
• Personal development and fair reward

How we engaged

• Every four weeks we hold a live online Company-wide Town Hall led by the Executive and Leadership Team, allowing us to improve communication and alignment, celebrate success, and share important messages. Each week we hold separate Retail and Store Support Centre "huddles" which bring our colleagues together, to share news and hear feedback
• Each year we run 2 managers conferences where we share strategy updates, deliver training and provide colleagues the opportunities to share experiences with each other
• We are committed to listening to our colleagues' feedback through engagement surveys. This year we were recognised as a Great Place to Work TM for the third year running. We heard that cost-of-living pressures were a significant concern and we acted to support colleagues through this difficult period
• Our Colleague Advisory Panel meets quarterly to discuss themes which are important to colleagues, with reps from across the business. Suggestions are presented to
  the Leadership Team who take responsibility for implementation

Priorities for the year ahead

• Extend our managers conferences to include all colleagues in the Store Support Centre to improve inclusivity in strategy communications and objective setting
• Progress with fundraising activities for our colleague-nominated charity of the year

Read more: Our People - pages 23 to 27

08	Group plc Annual Report and Accounts 2024