TIDMCOOK
RNS Number : 1340V
Cooks Coffee Company Limited
30 November 2023
30 November 2023
Cooks Coffee Company Limited
("Cooks Coffee", or the "Company" or the "Group")
Interim Results
Cooks Coffee Company (NZX:CCC; AQUIS:COOK), the international
coffee focused café chain, is pleased to announce its interim
results for the six months ended 30 September 2023.
Period Highlights
-- Store sales in the UK increased by 22% to NZ$17.8m compared
to last year and by 58% compared to 2019 pre Covid trading
as the development in suburban areas and smaller market
towns rather than the larger cities gained further momentum.
-- Store sales in Ireland increased 12% to $9.9m. Sales were
impacted by a devastating fire in the Longford store in
September 2022. The store will fully re-open in early 2024
and in the interim the store operates from a temporary
site that was opened six weeks after the fire.
-- Profit from continuing operations for UK & Ireland at $0.8m
were up 40% on H1 FY23 of $0.6m.
-- Net positive cash generation provided from operating activities
of $0.3m for the six months compared to a cash outflow
from operating activities of $0.5m for the same period
last year.
Post Period Events
-- Pipeline of store openings robust and underpinned by strong
consumer demand
-- The Company has entered into an agreement to establish a Regional
Developer ("RD") in the UK for the Southwest, South Wales
& West Midlands. The RD will focus on store growth and build
on the success of this model in the Southeast, London, East
England & East Midlands regions, which has proved very successful
to date.
-- Further discussions are underway to secure agreements for
the remaining regions, and we are confident of securing suitable
partners before the end of the financial year.
-- New store locations have focused on suburban areas and market
towns where the ongoing impact of the permanent post Covid
changes in consumer behaviour have led to positive store performance.
-- The Company appointed RSM UK Restructuring Advisory LLP as
liquidators to its Triple Two coffee franchise business, comprising
Triple Two Holdings Limited and its subsidiaries. The Esquires
business is not affected by the Triple Two process however
the company has fully impaired the investment in the September
group accounts.
Chairman's Statement
We are delighted by the strong trading performance in the first
half with store revenues up in the core markets of UK & Ireland
up 18% compared to last year and overall store numbers at the end
of September 2023 were 68 (not including Triple Two), a net gain of
six stores (10% for the 6 months).
The Directors believe the prospects for the business for the
remainder of the financial year and beyond are strong. The Company
is committed to building the business based on ethical principles
and community values. Store sales trends have been very positive in
recent times, with the Company benefiting from the 'working from
home' trend, which we are confident will remain in one form or
another as a permanent change in consumer behaviour in the post
Covid environment. There is a solid pipeline of new stores in both
core markets of UK & Ireland that will build upon the growth
for FY24 to date. As a result, the Board is confident about the
prospects of the business.
Overall store numbers at the end of September 2023 were 94, a
net gain of six stores during the six-month period, with the number
of stores in the UK and Ireland growing to 68 and the total of 26
stores in the franchised regions outside of the UK and Ireland
remaining unchanged.
The Company added seven outlets and closed one to the franchised
network in the UK and Ireland during the period. The number of
stores is expected to grow in the second half of the year, with
eight store openings planned in the UK and two in Ireland which we
anticipate will take the store numbers to 78 in the UK and Ireland
by the end of March 2023 with the total store numbers expected to
reach 105 across the system internationally.
The positive operating cash flow of $0.330m compared to an
operating cash outflow of $0.484m in the same period last year
confirms the positive direction of travel for the Company.
Business Performance
Esquires United Kingdom
UK store numbers were 53 at the end of September 2023, up from
49 as of 31 March 2023. Sales from the Esquires outlets for the six
months were up 58% on the pre covid period from April to September
2019 and up 22% on the same period in FY23. Record sales per store
have been recorded in September and again, post period end, in
October.
The average store sales for the first six months rose 16%
compared to FY23 and 25% compared to FY20 as the strategy of
enhancing store locations is being implemented.
With a new Regional Developer joining the group after acquiring
the Franchise rights to the Southwest, South Wales & West
Midlands, the company expects the rate of store sales growth to
accelerate.
The UK branded café market as of January 2023 is reported by
Allegra to have 9,885 stores and is projected to grow at 3.4% CAGR
to 2028 when the numbers are branded stores are estimated to be
11,696. The Esquires current share of stores is 0.5% and the
company is planning to grow this to at least 1.0% by 2028.
Esquires Ireland
Store sales in Ireland for the period were up 12% compared to
2022. The excellent Longford café suffered a devastating fire in
September 2022. The building and café were destroyed but are being
rebuilt and are planned to reopen in early 2024. However, in the
short term, the franchisees and staff after just six weeks
established a temporary outlet on the site and leased a vacant
warehouse to enable seating for customers to continue to be served
during the rebuilding phase.
Two new stores opened during the period, with 15 trading stores
operating at the end of September 2023. During the period the Irish
company achieved its record sales week in August and growth in the
second quarter (July to September) averaged 14% compared to 4% for
the first quarter of FY24.
Our Galway store was nominated for inclusion in the Top 10 best
breakfasts in Ireland and it has received a further accolade by
recently being awarded the number three spot in the 'Top 10 coffee
spots in Ireland'. In addition, the Company is proud of the fact
that the Galway store, for the last seven years, has also been the
number one for cafes on Trip Advisor for best loved coffee shop in
Galway.
The Irish branded café market is reported by Allegra to have 680
as at March 2023 stores and is projected to grow at 3.9% CAGR to
2028 when the numbers are branded stores are estimated to be 821.
The Esquires current share of stores is 2.2% and the company is
confident of increasing this in the future.
International
A recent Allegra Project Café Middle East report concluded that
the Saudi Arabian coffee shop market was driving wider Middle East
growth and that Saudi Arabia had invested heavily in coffee
production, developing local brands, and encouraging foreign
investment to elevate international out-of-home coffee culture. The
country has added 556 outlets in the last year to reach 3,556 in
total, representing growth of 18.5% over the period.
Consumers are becoming more knowledgeable and more willing to
embrace the specialty coffee experience and are highly receptive to
out-of-home Western coffee concepts. Optimism across the Middle
East for the future of the branded coffee shop market is high, with
long-term growth anticipated. Allegra predicts the total Middle
Eastern branded coffee shop industry will grow at 5.9% CAGR for the
period to 2027.
The Company is well positioned via our Middle Eastern Master
Franchise partners in Saudi Arabia, Bahrain, Kuwait & Jordan to
share in this projected growth.
In Pakistan the Esquires business is growing under a new Master
Franchisee with store sales for the 6 months to September at double
the levels of 12 months ago.
ESG
-- The Company's contract coffee roastery is believed to be the
first roastery in the world to be certified carbon neutral
and has achieved the carbon neutral Gold Standard.
-- The Company's coffee is 100% Fairtrade and organic.
-- Eco friendly thermal mugs & Keep Cups on sale with reduction
in menu pricing when refilling.
-- 100% recyclable disposable take out cups, paper bags and serviettes.
-- Still water introduction of paper-based bottles to replace
plastic.
-- Bio Ferma plant-based cleaning products with a view to replacing
toxic chemicals.
-- Biodegradable paper-based straws to replace plastic.
-- Wooden cutlery and paper-based plates to replace plastic in
certain locations.
-- Digital menu screens to save on having to change paper-based
menus.
The Company's Directors and management appreciate the importance
of environmental issues and the way its business can contribute to
reducing its carbon footprint. As a result, it will continue to
prioritise its environmental focus highlighted by the Company's
contract coffee roastery believed to be the first roastery in the
world to be certified carbon neutral and has achieved the carbon
neutral Gold Standard.
Esquires is committed to maintaining its premier coffee quality
status and is at the forefront of technology adoption to enhance
the quality of its drinks. To achieve this, Esquires is installing
the BIBE Coffee IoT devices inside the coffee machines across its
network. These world leading devices pair with the coffee machines,
connect to the Cloud in order and provide analytics on the quality
of each coffee cup. This enables the Company and franchisees to
standardise the quality of espresso beverages, reduce coffee waste
and streamline coffee machine maintenance.
Furthermore, to better recognise the importance of loyalty and
repeat custom Esquires has developed and recently introduced an APP
and loyalty scheme which has received very encouraging customer
responses.
Corporate - Transition to UK
The Company is continuing its planned transition to relocate the
business to the UK where most of the business operates. This will
enable efficient working practices and focus the business on its
growth strategy in the UK and Ireland.
Triple Two
The Triple Two business, which consisted of 11 operating
franchised stores at the end of September 2023, was placed into
voluntary administration on 23 October 2023. The growth potential
of this business was evident prior to the Covid pandemic; however,
this could not be maintained and it was unable to recover from the
store closures and changing market dynamic that followed. The
resulting market conditions did not assist the Triple Two business
model because of the very different trading environment. Whilst
growth had been evident in the first half of FY23 the factors
referred to above led to store closures in the second half and
reduced overall sales. The Directors were left with no option than
to place this business into voluntary administration to protect the
position of the Cooks Coffee business.
As a result of this action the company fully impaired the Triple
Two investment of $4.8m and this has led to reporting a negative
equity position for the group of $3.6m at the end of September
2023. The investment into Triple Two was made in shares issued in
June 2020. Directors note that the remaining write down as per
above was in addition to the impairment of Goodwill reported in the
March 2023 full year report of $2.5m.
In accordance with the above, under IFRS5 the Triple Two
subsidiaries have been included under discontinued operations in
September 2023 and the September 2022 results have been restated
accordingly. The Group results have been consolidated Under IFRS10
which means that the Triple Two entities have not been included as
at 30 September 2023 due to loss of control on 29(th) September
2023.
The Directors recognise that the full impairment of the Triple
Two investment has resulted in the balance sheet showing a negative
equity position. The company is confident that the operational
profit and cash generation projections for the balance of FY24 and
into FY25 and beyond that will build on the positive cash
generation in the 6 months to September 2023 will provide adequate
cash for the company as it continues its growth based on the core
Esquires businesses in UK & Ireland that both have more than 20
years of experience in the markets.
Summary and Outlook
The Directors believe the prospects for the business in the
balance of the financial year and beyond are strong. The Company is
committed to building the business based on ethical principles and
community values. Store sales trends have been very positive in
recent times, with the Company benefiting from the 'working from
home' trend, which we are confident will remain in one form or
another as a permanent change in consumer behaviour in the post
covid environment. There is a solid pipeline of new stores in both
core markets of UK & Ireland.
Esquires UK achieved record daily sales per store in October
2023 and following a strong performance in the first six months,
the Directors are confident that the business models are well
suited to the current consumer market and these positive results
are being achieved despite the concerns being expressed regarding
the general economic outlook. The expansion of the successful
Regional Development model will assist in accelerating growth in
the network.
The Cooks Coffee model is based on a locally focused franchised
network and is very scalable in a capital light manner. With the
focus on core markets, we believe that we have critical mass with
an ability to grow rapidly in an exciting growth market.
In Ireland the Longford store will reopen in the early part of
2024 and there is a solid pipeline of new store opportunities
despite the cost of funding.
The Company expects to have up to 80 Esquires outlets operating
in UK & Ireland by the end of March 2024 with more than 100
operating in total internationally and is confident of the growth
potential for all markets in the future.
Keith Jackson
Executive Chairman
Note: The Company's reporting currency is New Zealand Dollars
("$")
Enquiries:
Cooks Coffee Company Limited +64 21 702 509 (New Zealand)
Keith Jackson (Executive Chairman) keith.jackson@cookscoffeecompany.com
+44 (0) 20 3934 6630 (UK)
ukinvestorrelations@cookscoffeecompany.com
IFC Advisory Limited (Financial PR
& IR) +44 (0) 20 3934 6630
Tim Metcalfe, Graham Herring, Florence cookscoffee@investor-focus.co.uk
Chandler
Oberon Capital + 44 (0) 20 3179 5300
Nick Lovering, Adam Pollock, Mike Seabrook
Unaudited Condensed Interim Statement of Change in Equity
For the six months ended 30 September 2023
Restated Previously
reported
30 September 30 September 30 September
2023 2022 2022
Notes $'000 $'000 $'000
Continuing operations
Revenue 2,040 2,062 3,099
Grant and other income 119 110 122
Raw materials and consumables
used (13) (53) (318)
Depreciation and amortisation (32) (30) (38)
Net foreign exchange (losses)/gains (9) (132) (131)
Employee costs (960) (792) (1,238)
Other expenses (1,197) (699) (1,008)
--------------- -------------- --------------
Operating profit / (loss) (52) 466 488
Interest Income 657 581 581
Finance costs (924) (922) (923)
--------------- -------------- --------------
Profit / (Loss) before income
tax (319) 125 146
Income tax (expense)/credit - - -
--------------- -------------- --------------
Profit / (Loss) for the period
from continuing operations (319) 125 146
Net profit/(loss) for the period
from discontinued operations (5,272) (39) (60)
--------------- -------------- --------------
Net profit / (Loss) for the
period attributable to shareholders (5,591) 86 86
Other comprehensive income
Items that may be subsequently
reclassified to profit or loss
Change in foreign currency translation
reserve 435 (24) (24)
--------------- -------------- --------------
Total comprehensive profit/(loss)
for the period attributable to
shareholders (5,156) 62 62
--------------- -------------- --------------
Total comprehensive income/(loss)
for the period attributable to
Shareholders of the parent arises
from:
* Continuing operations 190 101 122
* Discontinued operations (5,346) (39) (60)
--------------- -------------- --------------
(5,156) 62 62
--------------- -------------- --------------
Profit/(loss) per share:
Basic and diluted profit/(loss)
per share (New Zealand Cents)
from continuing and discontinued
operations: 2 (9.46) 0.12 0.16
Basic and diluted profit/(loss)
per share (New Zealand Cents)
from continuing operations: 2 (0.54) 0.19 0.28
Basic and diluted profit/(loss)
per share (New Zealand Cents)
from discontinued operations: 2 (8.92) (0.07) (0.12)
The attached notes form part of and are to be read in
conjunction with these financial statements.
Unaudited Condensed Interim Statement of Change in Equity
For the six months ended 30 September 2023
Attributable to Equity holders of the Company
Share Capital Foreign Share Based Accumulated Total Equity
Currency Payment Profit/(Loss)
Translation Reserve
Reserve
Notes $'000 $'000 $'000 $'000 $'000
Balance at 1 April 2022 56,897 88 2,401 (56,988) 2,398
Comprehensive income/(loss) for
the year
Gain/(Loss) for the year - - - (3,316) (3,316)
Other comprehensive income
Items that may be subsequently
reclassified
to profit or loss:
Change in foreign currency translation
reserve - 883 - - 883
-------------- ------------- ------------ --------------- -------------
Total comprehensive income/(loss) for
the
year - 883 - (3,316) (2,433)
-------------- ------------- ------------ --------------- -------------
Transactions with owners of the
Company
Issue of ordinary shares 1,448 - - - 1,448
-------------- ------------- ------------ --------------- -------------
Total contributions by owners of the
Company 1,448 - - - 1,448
-------------- ------------- ------------ --------------- -------------
Balance at 31 March 2023 58,345 971 2,401 (60,304) 1,413
-------------- ------------- ------------ --------------- -------------
Balance at 1 April 2023
Comprehensive income/(loss) for
the period
Gain/(Loss) for the period - - - (5,591) (5,591)
Other comprehensive income
Items that may be subsequently
reclassified
to profit or loss:
Change in foreign currency translations
reserve - 435 - - 435
-------------- ------------- ------------ --------------- -------------
Total comprehensive income/(loss) for
the
period - 435 (5,591) (5,156)
-------------- ------------- ------------ --------------- -------------
Transactions with owners of the
Company
Issue of ordinary shares 150 - - - 150
-------------- ------------- ------------ --------------- -------------
Total contributions by owners of the
Company 150 - - - 150
-------------- ------------- ------------ --------------- -------------
Balance at 30 September 2023 58,495 1,406 2,401 (65,895) (3,593)
-------------- ------------- ------------ --------------- -------------
The attached notes form part of, and are to be read in conjunction with these financial statements.
Unaudited Condensed Interim Statement of Financial Position
For the six months ended 30 September 2023
30 September 31 March
2023 2023
Notes $'000 $'000
Assets
Current Assets
Cash and cash equivalents 381 445
Trade and other receivables 1,248 1,323
Lease receivables 2,320 2,155
Other current assets 622 795
Assets classified as held-for-sale 16 16
------------- ---------
Current Assets 4,587 4,734
------------- ---------
Non-Current Assets
Property, plant and equipment 114 142
Right-of-use assets 164 1,604
Lease receivables 17,693 17,427
Goodwill - 3,072
Intangible assets 2,831 6,881
Other non-current financial
assets 15 15
------------- ---------
Non-Current Assets 20,817 29,141
------------- ---------
Total Assets 25,404 33,875
------------- ---------
Liabilities
Current Liabilities
Trade and other payables 4,717 4,440
Deferred Revenue 178 1,507
Lease liabilities 2,368 2,382
Borrowings and other liabilities 2,137 2,668
------------- ---------
Current Liabilities 9,400 10,997
------------- ---------
Non-Current Liabilities
Deferred Revenue 520 114
Lease liabilities 17,856 18,932
Deferred tax liabilities - 1,036
Borrowings and other liabilities 1,221 1,383
------------- ---------
Non-Current Liabilities 19,597 21,465
------------- ---------
Total Liabilities 28,997 32,462
------------- ---------
Net Assets/(Liabilities) (3,593) 1,413
------------- ---------
Equity
Share capital 4 58,495 58,345
Accumulated losses (65,895) (60,304)
Foreign currency translation
reserve 1,406 971
Share based equity reserve 2,401 2,401
------------- ---------
Total Equity (3,593) 1,413
------------- ---------
Net tangible assets per share
(New Zealand Cents) (10.86) (12.36)
------------- ---------
The attached notes form part of and are to be read in
conjunction with these financial statements.
Unaudited Condensed Interim Statement of
Cash Flows
For the six months ended 30 September 2023
30 September 31 March
2023 2023
Notes $'000 $'000
Operating activities
Cash we provided from:
Receipts from customers 3,729 7,070
Cash was applied to:
Interest cost (269) (526)
Payments to suppliers & employees (3,130) (7,028)
------------- ---------
Net cash provided from/(applied to)
operating activities 330 (484)
------------- ---------
Investing activities
Cash was applied to:
Purchase of property, plant and equipment (9) (56)
Net cash provided from/(applied to)
investing activities (9) (56)
------------- ---------
Financing activities
Cash was provided from:
Proceeds from borrowings 660 100
Proceeds from share issue - 587
Cash was applied to:
Principal elements of lease payments (181) (175)
Repayment of borrowings (657) (683)
UK Listing & Professional costs (207) -
------------- ---------
Net cash provided from/(applied to)
financing activities (385) (171)
------------- ---------
Net increase/(decrease) in cash and
cash equivalents held (64) (711)
Cash & cash equivalents at beginning
of the year 445 1,156
Cash & cash equivalents at end of the
year 381 445
Composition of cash and cash equivalents:
------------- ---------
Bank balances 381 445
------------- ---------
The attached notes form part of and are to be read in
conjunction with these financial statements.
Unaudited Condensed Interim Statement of Cash Flows
For the six months ended 30 September 2023
The following is a reconciliation between loss after taxation
for the period shown in the statement of comprehensive income and
net cash flows from operating activities.
30 September 31 March
2023 2023
$'000 $'000
Profit/(Loss) after tax (5,591) (3,316)
Add non-cash items:
Depreciation and amortisation 32 850
Impairment loss 82 448
Net foreign exchange (losses)/gains 9 110
Impairment of goodwill - 2,497
Release of liabilities (337)
Disposal of subsidiary 4,788 -
Add/(Less) movements in assets/liabilities: 1,010 (736)
Net cash flow applied to operating
activities 330 (484)
------------- ---------
The attached notes form part of and are to be read in
conjunction with these financial statements.
Notes to and forming part of the Unaudited Interim Financial
Statements
For the six months ended 30 September 2023
The Group's reportable segments are business units deriving
Royalties, Product Sales, Franchise Fees and New Store Construction
Revenue from Franchisees in geographical locations.
The New Zealand segment represents the head office operation for
the Group. The franchise coffee store business, operating under the
Esquires and Triple Two brands, covers the New Zealand Global
Franchise trading entity and all regions owned by third party
Master Franchisees; and the UK and Ireland franchising business
segment owned directly by the Group.
The Group has also separated operating segments for the business
activities intended to be sold (now relating to one owned Esquires
store in the UK).
Segment information for the reporting period is as follows:
Continuing Operations
30 September 2023 Global UK & IRE New Zealand Total
franchising franchising
& retail
$'000 $'000 $'000 $'000
Global operational splits
Revenue 36 2,006 (2) 2,040
Grant and other income - 119 - 119
Raw materials and consumables
used - (13) - (13)
Depreciation and amortisation - (31) (1) (32)
Net foreign exchange (losses)/gains 4 5 (18) (9)
Employee costs - (873) (87) (960)
Other expenses (88) (411) (698) (1,197)
------------- ------------- ------------ --------
Operating profit/(loss) (48) 802 (806) (52)
Finance costs - (18) (249) (267)
------------- ------------- ------------ --------
Profit/(loss) before income
tax (48) 784 (1,055) (319)
Income tax (expense)/credit - - - -
------------- ------------- ------------ --------
Profit/(loss) for the
period from continuing
operations (48) 784 (1,055) (319)
------------- ------------- ------------ --------
Non-current assets
Intangible assets 42 1,308 1,481 2,831
Property, plant and equipment - 98 2 100
Discontinued
operations
30 September 2023 UK Franchising Total
& retail
$'000 $'000
Global operational splits
Revenue 1,074 1,074
Raw materials and consumables used (258) (258)
Depreciation and amortisation (6) (6)
Employee costs (494) (494)
Other expenses (791) (791)
--------------- ------------------
Operating profit/(loss) (475) (475)
Finance costs (9) (9)
Loss on disposal of subsidiary (4,788) (4,788)
--------------- ------------------
Profit/(loss) before income tax (5,272) (5,272)
Income tax (expense)/credit - -
--------------- ------------------
Profit/)loss) for the period from
continuing operations (5,272) (5,272)
--------------- ------------------
Non-current assets
Property, plant and equipment 144 14
Continuing Operations
30 September 2022 - Restated Global UK & IRE New Zealand Total
franchising franchising
& retail
$'000 $'000 $'000 $'000
Global operational splits
Revenue 106 1,956 - 2,062
Grant and other income - 110 - 110
Raw materials and consumables
used - (53) - (53)
Depreciation and amortisation - (29) (1) (30)
Net foreign exchange (losses)/gains 48 - (179) (131)
Employee costs - (609) (183) (792)
Other expenses 508 (807) (401) (700)
------------- ------------- ------------ ------
Operating profit/(loss) 662 568 (764) 466
Finance costs (1) (6) (334) (341)
------------- ------------- ------------ ------
Profit/(loss) before income
tax 661 562 (1,098) 125
Income tax (expense)/credit - - - -
------------- ------------- ------------ ------
Profit/)loss) for the
period from continuing
operations 661 562 (1,098) 125
------------- ------------- ------------ ------
Non-current assets
Intangible assets 42 1,308 1,481 2,831
Property, plant and equipment - 83 4 87
Goodwill - - - -
Discontinued operations
30 September 2022 - Restated UK retail Total
$'000 $'000
Global operational splits
Revenue 1,197 1,197
Grant and other income 12 12
Raw materials and consumables
used (323) (323)
Depreciation and amortisation (9) (9)
Employee costs (538) (538)
Other expenses (373) (373)
--------------- ---------
Operating profit/(loss) (34) (34)
Finance costs (5) (5)
--------------- ---------
Profit/(loss) before income
tax (39) (39)
Income tax (expense)/credit - -
--------------- ---------
Profit/(loss) for the
period from continuing
operations (39) (39)
--------------- ---------
Non-current assets
Intangible assets 4,438 4,438
Property, plant and equipment 83 83
Goodwill 5,457 5,457
Continuing Operations
30 September 2022 - Previously Global UK & IRE New Zealand Total
Reported franchising franchising
& retail
$'000 $'000 $'000 $'000
Global operational splits
Revenue 106 2,993 - 3,099
Grant and other income - 122 - 122
Raw materials and consumables
used - (318) - (318)
Depreciation and amortisation - (37) (1) (38)
Net foreign exchange (losses)/gains 48 - (179) (131)
Employee costs - (1,055) (183) (1,238)
Other expenses 508 (1,115) (401) (1,008)
------------- ------------- ------------ --------
Operating profit/(loss) 662 590 (764) 488
Finance costs (1) (7) (334) (342)
------------- ------------- ------------ --------
Profit/(loss) before income
tax 661 583 (1,098) 146
Income tax (expense)/credit - - - -
------------- ------------- ------------ --------
Profit/)loss) for the
period from continuing
operations 661 583 (1,098) 146
------------- ------------- ------------ --------
Non-current assets
Intangible assets 42 5,739 1,481 7,262
Property, plant and equipment - 148 4 152
Goodwill - 5,457 - 5,457
Discontinued operations
30 September 2022 - Previously UK retail Total
Reported
$'000 $'000
Global operational splits
Revenue 160 160
Raw materials and consumables
used (58) (58)
Depreciation and amortisation (1) (1)
Employee costs (92) (92)
Other expenses (65) (65)
--------------- ---------
Operating profit/(loss) (56) (56)
Finance costs (4) (4)
--------------- ---------
Profit/(loss) before income
tax (60) (60)
Income tax (expense)/credit - -
--------------- ---------
Profit/)loss) for the
period from continuing
operations (60) (60)
--------------- ---------
Non-current assets
Intangible assets 6 6
Property, plant and equipment 18 18
1. General information
Cooks Coffee Company Limited ("Company" or "Parent"), together
with its subsidiaries (the "Group") operate in the food and
beverage industry.
The Company is a limited liability company incorporated and
domiciled in New Zealand and is listed on the NZX Main Market board
of the New Zealand stock exchange.
Statutory base
The Company is registered under the Companies Act 1993 and is a
FMC reporting entity under part 7 of the Financial Markets Conduct
Act 2013.
Reporting framework
The unaudited interim financial statements have been prepared in
accordance with New Zealand Generally Accepted Accounting Practice
(NZ GAAP). They comply with New Zealand equivalents to
International Financial Reporting Standards ("IFRS") and other
applicable New Zealand Reporting Standards as appropriate for
profit-oriented entities. The financial statements comply with
IFRS. These policies have been consistently applied to all periods
presented, unless otherwise noted.
These financial statements for the six months ended 30 September
2023 have been prepared in accordance with NZ IAS 34, Interim
Financial Reporting and should be read in conjunction with the
financial statements published in the Annual Report for the year
ended 31 March 2023. They also comply with the International
Accounting Standard 34 interim Financial Reporting (IAS 34).
2. Changes in significant accounting policies
Except as described below, the accounting policies applied by
the Group in these consolidated interim financial statements are
the same as those applied by the Group in its consolidated
financial statements for the year ended 31 March 2023. The Group
has not applied any standards, amendments and interpretations that
are not yet effective.
3. Profit/(loss) per share
Basic profit/(loss) per share is calculated by dividing the
profit/(loss) attributable to ordinary shareholders of the Company
by the weighted average number of ordinary shares outstanding for
the period.
Diluted profit/(loss) per share is determined by dividing the
profit/(loss) attributable to ordinary shareholders and the
weighted average number of shares outstanding for the effects of
any dilutive potential ordinary shares.
Net tangible assets per share is determined by dividing the net
asset value of the Group, adjusted by the intangible assets, and
the number of shares issued at the end of the period.
The weighted average numbers of shares are calculated below:
30 September 31 March
2023 2023
Weighted average ordinary shares issued 59,126,837 55,526,579
Weighted average potentially dilutive - -
options issued
Basic and diluted profit/(loss) per
share (New Zealand Cents) from continuing
and discontinued operations: (9.46) (5.97)
Basic and diluted profit/(loss) per
share (New Zealand Cents) from continuing
operations: (0.54) (5.80)
Basic and diluted profit/(loss) per
share (New Zealand Cents) from discontinued
operations: (8.92) (0.17)
Net tangible assets per share (New
Zealand Cents) (10.86) (12.36)
4. Share Capital
The share capital of Cooks Global Foods Limited consists of
issued ordinary shares, each share representing one vote at the
company's shareholder meetings. The par value is nil (2023: nil).
All shares are equally eligible to receive dividends and the
repayment of capital.
Movement of share capital 30 September 31 March
2023 2023
Number of Shares issued: No. of Shares No. of Shares
Ordinary shares opening balance 60,726,348 53,059,494
Ordinary shares issued 569,444 7,666,854
Ordinary shares cancelled (3,388,837) -
-------------- --------------
Total ordinary shares authorised
at end of period 57,906,955 60,726,348
-------------- --------------
Movements of share capital 30 September 31 March
2023 2023
Value of Shares issued: $'000 $'000
Ordinary shares opening balance 58,345 56,897
Ordinary shares issued less share
issue expenses 150 1,448
-------------- --------------
Total ordinary shares authorised
at period end 58,495 58,345
-------------- --------------
The company now has 56,699,955 quoted shares and 1,207,000
non-voting shares on issue at 30 September 2023. During the year,
3,388,837 shares were cancelled at $nil value and 569,444 shares
were issued on 28 August 2023 at a value of $150,000.
At 30 September 2023, $nil of the ordinary share capital is
unpaid (31 March 2023: $nil).
5. Related party transactions
The Group's related parties include the directors and senior
management personnel of the Group and any associated parties as
described below.
Unless otherwise stated, none of the transactions incorporate
special terms and conditions and no guarantees were given or
received.
Keith Jackson is a director of Cooks Investment Holdings
Limited, Jackson & Associates Limited, Ascension Capital,
Weihai Station Limited, Triple Two Holdings Limited, Triple Two
Coffee Franchise Limited, TTC Contractors Limited, Triple Two
Coffee Property Limited and Triple Two Coffee London Limited and a
trustee of Nikau Trust.
Mike Hutcheson is a director of Image Centre Limited and
Lighthouse Ventures Holdings Limited.
Paul Elliott is a director of Elliott Capital Advisors
Limited.
Michael Ambrose is a director of Ashville Consultancy
Limited.
Peihuan Wang is a director of Jiajiayue Holding Group Limited
and Weihai Station Limited.
Elena Garside is a director of Garside & Garside Ltd
Tony McVerry is a director of Esquires Coffee Houses Ireland
Limited.
Aiden Keegan is a director of Esquires Coffee UK Limited, Triple
Two Coffee Holdings Limited, Triple Two Coffee Franchise Limited,
TTC Contractors Limited, Triple Two Coffee Property Limited and
Triple Two Coffee London Limited.
David Hodgetts was a director of Triple Two Coffee Holdings
Limited, Triple Two Coffee Franchise Limited, TTC Contractors
Limited, Triple Two Coffee Property Limited and Triple Two Coffee
London Limited until 31 July 2023.
Sezan Hodgetts was a director of Triple Two Coffee Holdings
Limited, Triple Two Coffee Franchise Limited, TTC Contractors
Limited, Triple Two Coffee Property Limited and Triple Two Coffee
London Limited until 31 July 2023.
Graham Hodgetts was a director of Triple Two Coffee Holdings
Limited, Triple Two Coffee Franchise Limited, TTC Contractors
Limited, Triple Two Coffee Property Limited and Triple Two Coffee
London Limited until 31 March 2023.
Alistair Tillen was a director of Triple Two Coffee Holdings
Limited, Triple Two Coffee Franchise Limited, TTC Contractors
Limited, Triple Two Coffee Property Limited and Triple Two Coffee
London Limited until 31 May 2023
Transactions with related parties
30 September 31 March
2023 2023
$'000 $'000
Purchases of goods and services
Purchase of management services 120 240
Interest paid to related parties 111 314
Other transactions
Related party receivables - 255
Subscriptions for new ordinary shares - 500
Funding loans advanced by related parties 60 39
Balances outstanding with related parties
30 September 31 March
2023 2023
$'000 $'000
Outstanding balances arising from purchases
of goods and services
Entities controlled by key management
personnel 661 441
Loans to related parties
Beginning of the year 1,842 1875
Loans advanced 60 39
Net foreign exchange effects 4 (1)
Interest charged 111 243
Interest paid (111) (314)
------------- ---------
Balance end of period 1,906 1,842
------------- ---------
Other receivables from related parties
------------- ---------
Issued capital not yet received - 255
------------- ---------
Director transactions
30 September 31 March
2023 2023
$'000 $'000
Directors' fees 137 144
Salaries, wages and contractor payments 745 1,010
Share based payments 30 29
------------- ---------
912 1,183
------------- ---------
6. Capital Commitments, Contingent Liabilities
There were no capital commitments as at 30 September 2023 (31
March 2023: $nil).
There were no changes in capital commitments, contingent
liabilities and contingent assets that would require disclosure for
the six months ended 30 September 2023 (31 March 2023: $nil).
7. Going Concern
The Group reported a comprehensive loss of $5,156,000 (2022:
$62,000) for the six-month period to 30 September 2023. This
included the write down of $4,788,000 related to the impairment of
the Triple Two investment.
Operating net cash inflow for the six-month period to 30
September 2023 was $330,000. For the twelve-month period ended 31
March 2023 the net cash outflow was $484,000.
As at 30 September 2023 the Group has reported Net Liabilities
of $3,593,000 (at 31 March 2023: $1,413,000) and current
liabilities exceed current assets by an amount of $4,813,000 (at 31
March 2023: $6,263,000).
The ability of the Group to pay its debts as they fall due and
to realise their assets and extinguish their liabilities in the
normal course of business at the amounts stated in the consolidated
financial statements has been considered by the Directors in the
adoption of the going concern assumption during the preparation of
these financial statements.
The Directors forecast that the Group can manage its cash flow
requirements at levels appropriate to meet its cash commitments for
the foreseeable future being a period of at least 12 months from
the date of authorisation of these consolidated financial
statements. In reaching this conclusion, the Directors have
considered the achievability of the plans and assumptions
underlying those forecasts. The key assumptions include:
-- Opening multiple new stores in the United Kingdom in FY23,
with a net four new sites already opened in the first half of the
year, and in excess of a further six sites confirmed for the second
half of the year.
-- Group's ability to successfully conclude remaining
discussions regarding the roll-over of existing debt.
-- Group's ability to raise further debt or equity funds as a
strategy to re-gear the balance sheet as part of the overall
restructuring plan that is still in progress.
-- The ability of related parties of Keith Jackson to continue
to provide funding as required, and market conditions which the
Group operates in.
The Directors have reasonable expectation that the Group has
sufficient headroom in its cash resources and shareholder support
to allow the Group to continue to operate for the foreseeable
future or alternatively it can manage its working capital
requirements to create additional required headroom.
Any significant departure from the above assumptions may cast
significant doubt over the ability to continue as a going concern
for the foreseeable future.
Whilst the Directors acknowledge that there are capital raising,
credit, exchange and liquidity risks in the global economic market
in which the Group operates, they are confident that additional
capital or funding will be sourced by the Group. In particular, the
Directors have received a confirmation from related parties of
Keith Jackson, that they will continue to financially support the
Group for the foreseeable future. They note the Group has a track
record of obtaining financial support from cornerstone investors
and related parties and, where necessary, negotiating the deferment
of debt repayments.
The Directors are also confident that operating cash flows will
continue to improve as a result of the activities that are being
undertaken, and the disposal of remaining assets held for sale in
the UK, to reduce the extent of cash outflow and improve
profitability.
The Directors continue to consider other opportunities to
further improve the Group's cash position which include discussing
collaborations with partners overseas, negotiations with potential
strategic equity partners, investigating new facility lines,
ongoing discussions in the UK and Ireland relating to potential
acquisitions, and greater focus on improving existing core business
activities.
After considering all available information, the Directors have
concluded that there are reasonable grounds to believe that the
forecasts and plans are achievable, the Group will be able to pay
its debts as and when they become due and payable, there is
sufficient headroom in available cash resources, and the basis of
preparation of the financial report on a going concern basis is
appropriate.
Should the Group be unable to continue as a going concern it may
be required to realise its assets and discharge its liabilities
other than in the normal course of business and at amounts
different to those stated in the consolidated financial statements.
The consolidated financial statements do not include any
adjustments relating to the recoverability and classification of
asset carrying amounts or the amount of liabilities that might
result should the Group be unable to continue as a going concern
and meets its debts as and when they fall due.
8. Subsequent Events
In November 2023 Esquires UK concluded an agreement for the sale
to a Regional Developer for the Southwest UK, South Wales &
West Midlands regions. The company is confident that the new
business partners will accelerate growth within these regions and
build the company's market share over time.
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END
NEXKKLFLXFLZFBQ
(END) Dow Jones Newswires
November 30, 2023 02:00 ET (07:00 GMT)
Cooks Coffee (AQSE:COOK)
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