TIDMTEG
RNS Number : 0615A
Ten Entertainment Group PLC
21 September 2022
21 September 2022
Ten Entertainment Group plc
Half-Year Results 26 weeks ended 26 June 2022
Value for money entertainment driving sustainable growth in
sales and profit
Ten Entertainment Group plc ("Ten Entertainment" or "The
Group"), a leading UK based operator of 48 bowling and family
entertainment centres, today announces its half-year results for
the 26 weeks to 26 June 2022. H1 19 has been used in some selected
comparisons because it is the last H1 that traded for a full
26-week period.
26 weeks 26 weeks 26 weeks
to 26 June to 27 June to 30 June
2022 2021 2019 (H1
19)
(H1 22) (H1 21)
Total sales GBP63.2m GBP10.6m GBP41.4m
Trading weeks 26 6 26
Like-for-like sales growth vs
2019(1) 46.0% 22.5% n/a
Group adjusted EBITDA(2) GBP28.8m GBP0.6m GBP17.1m
Group adjusted EBITDA less property GBP22.5m (GBP5.5m) GBP11.2m
rental costs(3)
Group adjusted profit / (loss) GBP15.7m (GBP10.8m) GBP7.1m
before tax(1)
Group Adjusted PBT margin 24.8% (101.9%) 17.1%
------------------------------------- ------------ ------------ ------------
Profit/ (loss) after tax GBP18.3m (GBP8.8m) GBP4.7m
------------------------------------- ------------ ------------ ------------
Cash inflow after investments GBP3.2m GBP1.7m GBP1.0m
Bank net cash /(debt) GBP0.7m (GBP10.9m) (GBP3.2m)
Value for money and customer service resets the baseline to a
new and sustainable high level
-- +52.6% total sales growth compared to 2019
-- +36.0% like-for-like footfall growth compared to 2019
-- Bowling prices frozen at 2019 levels to maintain value for money and drive footfall
-- +0.5% like-for-like sales growth compared to 2021 in the 11 weeks since 27 June
Excellent progress in strategic investment programme
-- GBP3.1m invested in four refurbishments expected to drive
over 30% ROI; three further refurbishments planned in H2
-- New centre in Harlow acquired and refurbished; new-build centre in Walsall opens next week
-- Three more new centres to come over the next six months with strong pipeline in place
-- GBP1.9m invested in renewing the bowling product creating
significant improvements to customer experience
Business model continues to generate sustainable growth even in
challenging economic landscape
-- PBT operating margins extended to a record 24.8% benefiting
from the operational gearing of footfall growth
-- CLBILS fully repaid and Group returned to a net cash position
with an interim dividend of 3p per share to be paid
-- Over 90% of energy needs are fixed to September 2024 at 2020 prices
-- Launch of carbon neutral menu and investment in zero carbon energy schemes
Consistent sales growth resets the baseline
6 weeks to 26 weeks 26 weeks 11 weeks
27 June 2021 to to to
26 Dec 2021 26 June 11 Sept 2022
2022
Like-for-like
growth vs 2019(4) 22.5% 30.3% 46.0% 42.1%
Like-for-like
growth vs 2021(5) n/a n/a 19.0% 0.5%
---------
Sales growth in the first half of FY22 has been extremely strong
compared to H1 19, the last full H1 of undisrupted trading,
accelerating the trend already shown in H2 21. Like-for-like sales
compared to 2019 were +46.0%. This was principally driven by
footfall growth of 36.0% and boosted further by increased revenue
per head (RPH) of 7.4%. All the RPH increase resulted from
additional customer spend on food, drink, and other games, with
bowling revenue per head remaining flat to 2019, demonstrating the
successful strategy of holding prices at 2019 levels and maximising
the customer value proposition.
The first half benefited from record breaking February and May
half-term trading as well as an exceptional Easter. However, the
underlying trend of sales growth compared to 2019 has been broadly
consistent throughout the half. It is clear that our great value
competitive socialising model resonates with our customers in a
post-pandemic leisure landscape. We believe that a new sustainable
baseline has been set. This baseline is around 30% higher than that
seen in 2019, with our ongoing programme of capital investment,
digital marketing and customer service delivery generating
incremental growth over and above that new base.
This positive sales trend has continued since the end of the
first half despite the very dry and hot summer which traditionally
does not favour bowling and other indoor activities. We are
delighted to report modest growth in the 11 weeks since 27 June
compared to 2021 because we know that last year benefited
significantly from exceptional sales as a function of UK
Staycations and the initial pent-up demand from the release of
Covid restrictions. Total sales for the 11 weeks since 27 June are
+46.7% compared to 2019 and +1.1% higher than 2021. On a
like-for-like basis sales are +42.1% vs 2019 and +0.5% compared to
last year. This is clear evidence that the new baseline established
post Covid has now been embedded in the underlying business.
Outlook
-- The sales baseline puts the Group on trajectory for a strong
full year performance in line with expectations
-- The Group is mindful of the impacts of the macro-economic
climate, but confident that the model is resilient
o Low entry price point
o Market leading value for money offering well-placed to
maintain footfall
o Multi activity centres and off-peak promotions allow customers
to carefully manage their spend
-- Inflationary pressures are manageable without compromising value or quality of experience
o Operating efficiencies from volume growth sufficient to offset
cost rises
o Over 90% of energy needs are fixed to September 2024 at 2020
prices
o Management and staff salaries supplemented with self-funding
performance related bonuses
o Expect 2023 inflation to be managed through footfall growth
with limited need for price increases
-- Net cash position at the end of H1 with CLBILS now repaid in full in July 2022
-- Interim dividend of 3p to be paid in October balancing
shareholder returns with strategic investments
-- Cash generation remains strong, with continued investment in
high-returning strategic initiatives
-- 3 further centres in development, with strong pipeline of future sites
Graham Blackwell, Chief Executive Officer, commented:
"Our teams have once again raised the bar in the first half of
this year and have worked even harder to deliver this impressive
result. We have accelerated our growth and redefined the baseline,
putting the business in the best possible shape to support our
people and our customers through the challenges of the next 12
months.
Our sales growth is, and remains, very strong against 2019 and
we have consolidated and built upon the gains we made last year. We
now have net cash and have resumed our dividend payments while
maintaining our focus on investing in the customer experience to
continue our growth. We have bucked the trend of many other
businesses in hospitality and leisure and our value for money
customer proposition is well positioned to continue to deliver
strong returns for our shareholders."
Enquiries:
Ten Entertainment Group plc via Instinctif Partners
Graham Blackwell, Chief Executive Officer
Antony Smith, Chief Financial Officer and
Company Secretary
Instinctif Partners Tel: 020 7457 2020
Matthew Smallwood
Penny Bainbridge
There will be a presentation today at 9.30 am to analysts via a
Webcast. The supporting slides and audio will also be available on
the Group's website, www.tegplc.co.uk, later in the day.
Forward-looking statements
This announcement contains forward-looking statements regarding
the Group. These forward-looking statements are based on current
information and expectations and are subject to risks and
uncertainties, including market conditions and other factors
outside of the Group's control. Readers are cautioned not to place
undue reliance on the forward-looking statements contained herein,
which speak only as of the date hereof. The Group undertakes no
obligations to publicly update any forward-looking statement
contained in this release, whether as a result of new information,
future developments or otherwise, except as may be required by law
and regulation.
1. These are non-IFRS measures used by the Group in
understanding its underlying earnings. Group adjusted profit before
tax is defined as profit before tax adjusted for exceptional items
and impairment reversals. Like-for-like sales compare sales while
the business is trading and adjusted for new centres.
2. Group adjusted EBITDA consists of earnings before interest,
taxation, depreciation, amortisation costs, exceptional items,
impairment reversal, loss on joint venture and profit or loss on
disposal of assets
3. EBITDA less property rental costs for FY22 and FY21 is the
Group adjusted EBITDA less the cash rent paid for rental of the
long-term leasehold properties which are held on the balance sheet
as Right of Use Property assets. For 2019 this measure is the IAS17
EBITDA as reported in FY19 when the Group was not reporting on an
IFRS16 basis.
4. Like-for-like sales growth and spend per head growth compared
to 2019 figures using only centres that were open and trading in
both periods.
5. Like-for-like sales growth and spend per head growth compared
to 2021 figures using only centres that were open and trading in
both periods.
Chief Executive's Statement and Operating Review
The first half of 2022 has seen accelerated growth vs 2019 over
and above the high benchmark set in H2 21. Like-for-like sales
growth of 46.0% is a record for a 6-month period. Group Adjusted
PBT of GBP15.7m for H1 is not only +12.9% higher than the second
half of last year but is also higher than any other full year PBT
delivered in the Group's history. The record sales have helped the
business benefit from operational efficiencies in the cost base
which have been more than sufficient to offset the impact of cost
inflation and have allowed the business to grow without raising
prices.
We remain mindful of the wider economic environment but are
confident that by continuing to invest in the customer experience;
maintaining our value-for-money approach in the experiential
leisure and hospitality space; and rewarding our people for
delivering great customer service; we are well set to continue to
achieve strong results and generate high investment returns for our
shareholders.
It's all about that base
It has now been 70 weeks since 17(th) May 2021 when businesses
reopened from the last Covid Lockdown. We have remained cautious
that some of the exceptional growth experienced since that date may
have been of a temporary nature and would start to temper. However,
the table below shows that not only has sales growth against a 2019
baseline remained robust, but we have also been able to grow
against our 2021 comparative too.
Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 11 weeks
to 11
Sep 22
Sales growth
vs FY19 27.4% 43.9% 23.8% 52.8% 52.3% 46.7%
------------ -------------- ------------ ------------ ------------ ------------
Sales growth vs FY21 19.5% 1.1%
------------ ------------
Over the past 12 months we have invested in and refurbished 8
centres, significantly upweighted our digital footprint, augmented
our bowling product and enhanced the customer experience. We have
maintained the price of our games and activities at 2019 levels
which means that relative to other hospitality and leisure
activities we are now better value for money than ever before.
These improvements have helped cement our sales at a renewed base
level that is over 30% higher than pre Covid.
We continue to invest in making the customer experience better
than ever. In the short to medium term, we anticipate that this
will result in single-digit like-for-like growth above our new
baseline in addition to the benefits from the pipeline of new
centres that we are building.
First Class Customer Experience
At the heart of our customer offer is great entertainment at
excellent value for money. The average realised price of a game of
bowling in the first half of 2022 was GBP5.19 including VAT which
is 2.1% lower than in the first half of 2019. Our strategy to hold
our bowling prices has been rewarded with customers spending more
with us on each visit. Our average revenue per head in H1 22 has
increased by 7.4% to GBP15.98. This inflation-busting approach
means that against the trend of most other hospitality and leisure
operators, we have been able to bring down our relative prices and
significantly increase the value of the experience for our
customers at every visit. We are continually monitoring our value
proposition to ensure that we cover our costs, drive underlying
growth, and maximise our yield.
We have invested over GBP2m in H1 in ensuring that our bowling
experience remains sector-leading. By the end of 2022, all our
centres will be on the state-of-the-art multimedia scoring
platforms. Our Pins & Strings pinsetter roll out is complete
and we are now focusing on improving the quality and reliability of
our other bowling equipment such as ball returns and lane surfaces.
This ensures that our customers have a great bowling experience. We
will continue to ensure that bowling at Tenpin remains the best in
the UK.
Digitally Enabled
Our contactable customer database continues to grow, and we have
been able to target our customers with the best deals and
promotions to suit their lifestyle and budget.
Online bookings remain at 62%, which is significantly higher
than the pre-covid levels of 38% in H1 19. We believe this reflects
a permanent shift in customer behaviour since Covid and has been
enabled by ongoing investment in our website to optimise
conversion. Bowling bookings are rarely made more than a few days
in advance, and often on the day, therefore mobile optimisation,
and introduction of widely used payment methods such as ApplePay
and GooglePay has helped customers book their lanes with ease. We
have widened the range of activities that can be booked online
driving like-for-like sales of laser tag by over 66% compared to
2019 as well as raising awareness and participation of our new
karaoke and escape rooms.
Digitalisation will continue, and our ongoing investment
programme will consistently raise the bar to give our customers a
seamless digital experience.
High Quality Centres
GBP3.1m has been invested in the first half of the year on 4
major refurbishments. Each of these refurbishments has had a
transformational impact on the centres, providing the next
generation of customer experience. We are delighted to already be
benefiting from significant sales uplifts.
Our focus on these major refurbishments is to refresh and
modernise the centre to ensure it continues to be well-invested and
add new activities and revenue streams to enhance the sales
density. Since 2019 we have reconfigured our layouts and added
additional customer trading space equivalent to a new entertainment
centre. This has allowed the introduction of 16 extra bowling
lanes, 21 karaoke rooms; 19 new escape rooms; and two additional
laser tag arenas all within the existing estate. The new activities
have contributed over GBP2m of additional annual sales without any
ongoing increase in rent or property costs. Overall, we have grown
our sales density from GBP64 per square foot in 2019 to an
annualised run rate of over GBP90 per square foot, an increase of
41%.
Coventry and Northampton are large destination entertainment
centres in out-of-town mixed leisure and retail parks serving a
significant local population. Our refurbishments of these centres
have focused on expanding the variety of activities on offer and
increasing the sales density. We have added karaoke and escape
rooms by repurposing some redundant space and we have significantly
improved the laser tag arena. These enhancements have been combined
with a modernised bar, high quality atmospheric LED lighting and
improvements to the bowling experience. The combination of these
changes has delivered strong sales uplifts already.
Our Bexleyheath and Croydon entertainment centres are busy
London locations that benefit from high footfall from the local
area. Both needed investment to modernise and refresh the bar,
dining and machines areas and to update the bowling experience to
ensure our customers continue to enjoy the best in bowling and
entertainment with better equipment and enhanced LED lighting and
sound systems. Although there is less scope in these centres to add
additional ancillary activities, we have been pleased to see
significant sales growth since the refurbishments have been
completed.
Our refurbishment strategy will continue to optimise sales
density and modernise the estate to ensure that we maintain our
strong sales performance. In addition to the major refurbishments,
we have concentrated on ensuring that the infrastructure across the
estate is modern and well maintained. In the first half of this
year, we have invested GBP1.9m in the bowling equipment to ensure
that our bowling experience remains the best available in the UK
today.
Global supply chains have been challenged in recent times and in
order to maintain our momentum of continuous improvement across the
estate, we have invested a further GBP2.1m in the first half to
forward purchase assets and equipment which will be utilised in our
refurbishments and maintenance in the second half of the year.
Increasing UK Coverage
We were delighted to have opened a new bowling centre in Harlow
in May. This was a well-established bowl in the town centre that
needed reinvestment. Since the acquisition we have enhanced the
bowling, introduced new lighting, bar and seating areas and have
transformed the customer experience. We have already seen the
benefits of increased footfall and sales as a result. Our Harlow
entertainment centre is located in the town centre and offers 14
lanes of bowling, karaoke and our usual mix of machines, pool and
great value food and drink. It has now been redeveloped into a
great place to go out and have fun in the town.
We are about to open a brand-new centre in Walsall at the Crown
Wharf retail and leisure park. This 20-lane centre features
state-of-the-art lighting and bowling equipment as well as karaoke,
laser tag, escape rooms and much more. The centre occupies two
units previously occupied by Mothercare and Peacocks and
demonstrates how our growing experiential leisure offering adds
value to a landlord's development by replacing unsuccessful
large-box retailers.
We have three further agreements for new centres in Crewe,
Dundee and Milton Keynes which are all in the process of planning
or licensing applications. As soon as the appropriate licensing has
been granted, we will begin construction. We expect to open these
in H1 2023.
Our total cash investment in new centres in H1 22 was GBP8.7m.
This included forward purchase of essential equipment for new
developments, a deposit for the acquisition of the freehold of one
of our existing centres, the acquisition and refurbishment cost of
Harlow and a proportion of the work in Progress for the development
in Walsall.
We continue to explore further opportunities for development
across the UK and have a strong pipeline of exciting new centres
that we expect to be able to open in 2023 and beyond.
Engaged People
We employ almost 1,500 people who work hard to ensure that our
customers have a great experience each time that they visit. Our
strong team of experienced managers have been instrumental in
delivering this remarkable period of sales growth. We continue to
recognise our management teams through a quarterly bonus structure
that rewards sales and profit performance and customer service.
These bonuses are essential for management continuity and ensure
that our teams are focused on looking after our people and our
customers.
We also rely on a large team of hourly paid colleagues. We use
the latest digital tools to ensure that our teams are recruited,
onboarded and trained in the best way possible so that they can
give high quality customer service from the moment that they join
the business. The current labour market has been challenging, but
we have maintained our staffing levels throughout 2022. We are a
fun place to work and we give our teams access to great benefits as
well as opportunities for development and promotion.
We are bringing forward by 6 months the planned Living Wage
increase for our hourly paid colleagues. This means that we are
increasing pay rates in October to ensure that our teams are better
equipped to manage the cost of living pressures over the winter
period. We are funding this increase in costs through the
efficiency gains made through staff retention, which reduces
training and onboarding costs, and through the incremental footfall
and volume that the business enjoys. Overall, our labour as a % of
sales remains at 18% which is flat to 2019.
Sustainable delivery
During the first half of the year, we have continued to develop
our sustainability strategy, building our plan to reach Net Zero.
Our three principal priorities to reduce our footprint are energy
management; food and drink sourcing; and waste reduction.
We continue to source our electricity from 100% renewable
supplies. Gas represents only 4% of our energy and we are actively
updating our infrastructure to remove gas consumption from our
business altogether. We are replacing gas boilers with more carbon
efficient electrical heating systems and using electrical rather
than gas appliances in our kitchens. We have started the planning
process to install micro generation solar facilities on the roofs
of some of our buildings to as part of our commitment to truly
renewable and zero carbon energy.
We are actively engaged with our suppliers to reduce the carbon
footprint of the food and drink we serve to our customers. However,
we recognise that as a relatively small buyer in the UK hospitality
market, we are not always in direct control of the entire carbon
chain and it may take some time for change to happen. As a
short-term measure while we address the route to Net Zero, we have
moved our entire food and drink menu onto a Carbon Neutral basis in
line with guidance developed by the United Nations Framework
Convention on Climate Change (UNFCCC).
We have been working with our suppliers to reduce the waste in
our business and to increase our levels of recycling. All of our
food packaging is now 100% recyclable and we are improving waste
segregation with an aim to significantly increase the level of
recycling. Our used cooking oil is now recycled for use in
bio-fuels and we are working with our suppliers to manage our food
waste for use in power generation.
Outlook
We are encouraged that we have established a new baseline for
our business. This higher level of sales creates operational
gearing benefits that mean that the business is more profitable
from an operating margin basis even though there has been some
significant cost inflation.
We are mindful of the impact that increases in the cost of
living may have on our customers and welcome the assistance the
Government is giving consumers and business. However, bowling and
entertainment at our centres is an affordable treat and offers
excellent value for money. We will continue to focus on offering
great value for money, and our pricing strategy will focus on
maintaining that value and maximising our yield. Our ongoing
investment programme continues to make the customer experience
better, with a wider range of activities to enjoy and with packages
and deals to suit every budget. As a result, we are targeting some
like-for-like growth from this new baseline and are confident that
the excellent business model economics will continue to generate
strong cashflows.
We believe our business is well set and positioned to match
current expectations for this year. We will continue to monitor and
scrutinise the fluctuations of the broader economic environment.
Our focus on great customer service, value-for-money, and our
efficient business model means that modest sales growth in 2023,
combined with our pipeline of new centres will continue to deliver
profitable growth.
Graham Blackwell
Chief Executive Officer
21 September 2022
Financial Review
26 weeks 26 weeks Change 26 weeks
to 26 June to 27 June 2022 vs to 29 June
GBP000 2022 2021 2021 2019
---------------------------------------- --------------- --------------- --------------- ---------------
Revenue 63,238 10,610 52,628 41,444
Cost of goods sold (8,865) (1,234) (7,631) (4,999)
---------------------------------------- --------------- --------------- --------------- ---------------
Gross Margin 54,373 9,376 44,997 36,445
GP% 86.0% 88.4% (2.4%) 87.9%
Total operating costs (18,982) (5,544) (13,438) (14,332)
Central and support overheads (6,616) (3,201) (3,415) (4,984)
Group adjusted EBITDA 28,775 631 28,144 17,129
Less property rent costs (6,269) (6,117) (152) (5,909)
---------------------------------------- --------------- --------------- --------------- ---------------
Group adjusted EBITDA after rental
costs (2) 22,506 (5,486) 27,992 11,220
Add back property rental costs 6,269 6,117 152 n/a
Depreciation and interest on Right
of Use Property Assets (8,109) (7,945) (164) n/a
Depreciation and amortisation (4,368) (3,165) (1,203) (3,520)
Loss on Joint Venture (310) - (310) -
Net interest (274) (222) (52) (401)
Profit/(loss) on disposal of assets 15 - 15 (57)
Amortisation of acquisition intangibles (62) (68) 6 (151)
---------------------------------------- --------------- --------------- --------------- ---------------
Group adjusted profit/(loss) before
tax(2) 15,667 (10,769) 26,436 7,091
Reversal of impairment 747 - 747 12
Exceptional items 4,601 - 4,601 (1,169)
---------------------------------------- --------------- --------------- --------------- ---------------
Profit/(loss) before tax 21,015 (10,769) 31,784 5,934
Taxation (2,721) 1,970 (4,691) (1,261)
Of which: taxation attributable to
Group adjusted (loss)/profit (1,847) 1,970 (3,817) (1,443)
---------------------------------------- --------------- --------------- --------------- ---------------
Profit/(loss) after tax 18,294 (8,799) 27,093 4,673
---------------------------------------- --------------- --------------- --------------- ---------------
Earnings/(loss) per share
Basic earnings/(loss) per share 26.8p (12.9)p 39.7p 7.19p
Adjusted basic earnings/(loss) per
share 20.2p (12.9)p 33.1p 9.01p
---------------------------------------- --------------- --------------- --------------- ---------------
Sales and Gross Margin
Total sales were GBP63.2m which was +GBP52.6m ahead of HY 21 due
to the business being closed for 20 of the 26 weeks in HY 21.
Compared to the last full trading period of H1 19 sales were
GBP21.8m higher, which is a growth of +52.6%. This significant
sales growth represents a reset in the business trading post Covid.
Increased customer demand for family based experiential leisure,
combined with a more effective digital strategy and a significantly
improved customer experience have all helped reset the trading base
to a new level.
Gross Margin of GBP54.4m is at 86.0% of sales. This is a
function of the nature of our business model. Bowling, which
represents 44.7% of sales, carries no Cost of Goods sold because it
relies solely on the fixed asset base of the business. Machine
sales, which are 22.2% of the business are a blend of owned
machines, which have zero Cost of Sales, and machines which operate
on a finance lease from our suppliers which do have and associated
a cost of sales. The remaining sales from food and beverage also
attract direct costs from the supply of the products sold. The
result of this significant proportion of sales from fixed assets is
a very high blended average margin of 86.0%. Gross margin is
(1.9%pts) lower than the 87.9% in HY19 principally a function of a
shifting sales mix as a result of better cross sell of ancillary
products. Bowling represented 48.0% of sales in H1 19. This 3.3%pt
shift in bowling mix, while margin dilutive at a GP% level is cash
positive at a Gross margin level as we have successfully increased
the revenue per head from our customers without increasing prices.
LFL revenue per head in HY 19 was GBP14.88 and this has increased
by 7.4% to GBP15.98. All this revenue per head increase is from
additional sales of food, drink and machines, with a static spend
per head on bowling.
Costs and overheads
Total Operating costs of GBP19.0m. This is a significant
increase compared to H1 21 which was GBP5.5m of cost. However,
during this period the business was closed for 20 weeks with
associated benefits in reduced staffing and other variable costs
and so the numbers are not truly comparable. Compared to a full 26
weeks of trading in HY19, where total costs were GBP14.3m, there
has been an increase of GBP4.7m +32.4% and has been subject to
three years of inflationary pressures. The operational gearing of
the variable cost base means that this inflationary and volume
impact has been absorbed by labour and fixed cost efficiencies. H1
19 costs as a % of sales were 34.6% and this ratio has fallen to
30.0% for H1 22. Had costs stayed at the H1 19 ratio, operating
costs would have been GBP21.9m which demonstrates an implied cost
saving of GBP2.9m as a function of these efficiencies.
Central and support overheads in H1 22 were GBP6.6m, (GBP3.4m)
higher than in H1 21. H1 19 is a more suitable trading comparative
due to the Covid disruption in H1 21. Since 2019 these central
costs have grown by 32.7% or GBP1.6m. There are three principal
drivers of this increase: inflationary pressures in the central
fixed cost base; an increased level of marketing and digital
investment to drive sales growth; and an investment in specific
strategic programmes to deliver long term sustainable growth. In
terms of inflation, the central costs have seen around 9% wage
inflation. In addition, there has been significant inflation in
certain professional fees; the audit fee has more than doubled
since 2019. The Group has increased its digital and marketing
expenditure to maintain and extend its customer engagement. This
has been rewarded with doubling of the customer database and a
sustained improvement in click-through and conversion rates on our
customer communications. Finally, we have been very active in
increasing our pipeline of new centres. We have acquired one centre
in H1 22; almost completed the new build at Walsall and have three
further centres pending licensing or planning as well as more than
five other centres nearing legal completion. This not only
increases the professional fees but has also resulted in a growth
in our property and operational teams as we plan and execute these
new centre builds. We expect our central and support costs to
remain at this new higher level as the business continues its
strong growth agenda.
EBITDA
We continue to highlight our total property rent costs even
though this is no longer an IFRS16 measure. This Alternative
Performance Measure (APM) helps with a comparison of costs against
2019 when the business was reporting on an IAS17 basis. These costs
in H1 22 were GBP6.3m which is (GBP0.4m) 6.1% higher than in H1 19.
The principal reason for the growth is the addition of four new
centres. Absent this, the long-term nature of our lease deals has
proven very effective at mitigating any inflationary pressures, and
we expect it to continue to be so.
EBITDA after property rental costs is another APM that helps
illustrate the long-term trends in the performance of our business
and its cash generation potential. In H1 22 the profit was GBP22.5m
which is just over double that generated in the last unaffected
trading period of H1 19. This exceptionally high growth in profit
illustrates the impact of strong sales growth in a relatively fixed
cost high margin operating model.
Depreciation, Amortisation, interest and other costs
Depreciation and interest on the Right of Use property assets in
H1 22 is GBP8.1m, which is GBP1.8m higher (29.4%) than the cost of
the rent in the period. Partly this is due to the compression on
PBT that results from having leases that are early in their tenure
which attract a higher cost of interest. In addition, some
properties may benefit from a rent-free period on inception of a
new lease, which is amortised for the full lease period when
calculating interest and depreciation but is omitted from the
property rental cost.
Other depreciation and amortisation was GBP4.4m in H1 22. This
was GBP1.2m higher than in H1 21 where the depreciation was only
GBP3.2m. That lower figure was a function of the halting of the
capital investment programme from March 2020 until it was restarted
in the second half of 2021. This temporarily reduced the
depreciation charge as assets came to the end of their useful
economic life and new replacement assets were not added. Over the
12 months to 26 June 2022, since the capital investment programme
was restarted, the business has invested GBP22.0m of capital
expenditure. This investment has increased the depreciation
charge.
Loss on Joint Venture
At the end of FY19, the Group invested GBP310k in a 50:50 Joint
Venture with Houdini's Escape Room Experience limited. Since that
date, as a result of Covid-19 closures and a rapid expansion
programme, the company has made a trading loss. This loss of
GBP0.3m represents TEG's 50% share of that loss on Joint Venture
and brings the investment value to zero.
The Group remains committed to continuing to expand this
successful experiential leisure concept. Escape rooms typically
have a 12-month maturity curve and as expansion accelerates there
is an inevitable delay in translating that growth into the profit.
However, the underlying model is strong and delivering some
excellent results and strong customer feedback. TEG has an option
to purchase the remaining 50% of share capital at the end of 2024
and we remain confident that the business will be earnings
enhancing in the medium term.
Exceptional items
The Group confirmed with HMRC in April that the Reduced Rate of
VAT implemented by the Government in July 2020 to support
hospitality business should apply to sales of Tenpin bowling. This
resulted in a backdated claim for overpaid output tax of GBP4.4m
relating to 2020 and 2021. This cash has now been received in full
and the GBP4.4m of income has been treated as an exceptional item
as it relates to sales that were made in previous years. A further
GBP0.2m is the release of an historic VAT provision which is deemed
no longer necessary based on current VAT guidance.
Reversal of impairment
The strong sales and profit performance in the first half of the
year has created a trigger event to review the impairment modelling
for our sites and in particular the right of use property assets.
Stronger cashflows have led management to revise their future
models and have resulted in a GBP0.7m release of the 2020
impairment charge.
Financing
26 weeks 26 weeks
to to
GBP000 26 June 2022 27 June 2021
---------------------------------------------- -------------- --------------
Interest on bank debt (216) (207)
Amortisation of bank financing costs (40) (15)
Finance lease interest charges (3,276) (2,444)
Net interest excluding shareholder loan note
interest (3,532) (2,666)
-------------- --------------
Finance costs increased to GBP3.5m in H1 22 (H1 21: GBP2.7m)
comprising the implied interest relating to the lease liability
under IFRS 16 of GBP3.3m (H1 21: GBP2.4m) and GBP0.2m (H1 21:
GBP0.2m) associated with our bank borrowing facilities. The finance
lease interest charges have increased by GBP0.9m due to the lease
regears completed in the second half of 2021 and the recognition of
the Walsall and Harlow leases in 2022.
The interest on the bank debt is flat year on year and relates
to interest on the CLBILS term loan facility and a commitment fee
for the GBP25m RCF. GBP7.0m of the CLBILS term loan facility was
repaid in April 2022 the balancing GBP7.0m repaid in July 2022.
This has fully repaid the CLBILS and means the Group no longer has
any constraints on declaring a dividend. The GBP25m RCF remains in
place until 2024 and is currently undrawn.
Taxation
A tax charge of GBP2.7m has been recognised for H1 22 (H1 21:
GBP2.0m credit) arising on the profit before tax generated in the
period. The effective tax rate of 12.9% is lower than the actual
tax rate of 19% arising from the benefit of the super deduction of
130% on capital allowances.
Net debt
As at 26 June 26 December Movement 27 June
GBP000 2022 2021 2021
Closing cash
and cash equivalents 7,734 11,511 (3,777) 17,103
Bank loans (7,000) (14,000) 7,000 (28,000)
Bank net debt 734 (2,489) 3,223 (10,897)
Finance leases
- Machines and
other (4,556) (5,613) 1,057 (5,781)
Finance leases
- Property (196,523) (190,049) (6,474) (181,339)
Total net debt (200,345) (198,151) (2,194) (198,017)
The Group ended the first half with a net cash position of
GBP0.7m, with GBP7.0m drawn on the CLBILS term facility and GBP7.7m
of cash and cash equivalents. This represents a very significant
recovery in the financial indebtedness as a result of the strong
profit generation over the past 12 months.
The bank loans consist of the GBP14.0m CLBILs facility which was
drawn in 2021 and the GBP25.0m RCF of which none was drawn at the
period end. GBP7.0m of the CLBILs facility was repaid in April 2022
leaving the balance as GBP7.0m at H1 22. This remaining GBP7m
CLBILS has since been repaid during July 2022.
The GBP1.1m decrease in machines finance leases is from capital
repayments made to the supplier, net of additions and accrued
interest in the interim period. The GBP6.5m increase in the
property leases arose from the addition of two new leases and
modification of one lease totalling GBP10.1m, accrued interest less
repayments to landlords.
Cash flow
26 weeks to 26 weeks to
GBP000 26 June 2022 27 June 2021 Movement
---------------------------------- -------------------- -------------------- ---------------
Cash flows from operating
activities
Group adjusted EBITDA 28,775 631 28,144
Maintenance capital (1,291) (205) (1,086)
Movement in working capital 2,812 7,962 (5,150)
Lease and taxation payments (11,528) (6,785) (4,743)
---------------------------------- -------------------- -------------------- ---------------
Free cash flow 18,768 1,603 17,165
Strategic investments :
Existing estate (7,044) - (7,044)
Estate expansion (8,749) - (8,749)
Exceptionals and share-based
payments 248 106 142
Cash flow after investment 3,223 1,709 1,514
(Repayment)/draw down of
debt (7,000) 8000 (15,000)
Opening cash and cash equivalents 11,511 7,394 4,117
---------------------------------- -------------------- -------------------- ---------------
Cash and cash equivalents
- end of period 7,734 17,103 (9,369)
---------------------------------- -------------------- -------------------- ---------------
The Group generated significant free cash flow of GBP18.8m in
the first half of the year. The strategic investment programme was
paused in March 2020 and only resumed in the second half of
2021
In H1 22 GBP7.0m has been invested in the existing estate
through refurbishments and enhancements to the bowling equipment.
This includes GBP2.1m of advance payments to suppliers for forward
orders of critical equipment that have long lead times.
GBP8.7m was invested in invested in estate expansion, with the
acquisition and refurbishment of Harlow and the building of
Walsall, which will open at the end of September. GBP7.6m of this
expansion capital is in respect of advance purchases of equipment
needed for our development pipeline and includes a payment in
respect of monies held in escrow for a freehold acquisition that
completed in July. This is the purchase of the freehold of an
existing highly profitable centre which was at risk of
redevelopment.
The advance payments for deposits to suppliers and the monies
for the freehold acquisition have contributed to a significantly
higher Trade Receivables value on the balance sheet, which has
increased from GBP5.4m at the end of FY 21 to GBP14.8m at the end
of H1 22.
Cash flow after investment costs were GBP3.2m which gives the
board confidence to declare an interim dividend of 3p, a payment of
GBP2.1m which will be paid in the second half of the year.
Dividends
The Board have declared an interim dividend of 3.0p per share
(HY21 interim: nil). The interim ex-dividend date is 06 October
2022, the record date 07 October 2022 and the interim dividend
payment date is 28 October 2022.
Accounting standards and use of non-GAAP measures
The Group has prepared its consolidated financial statements
based on International Financial Reporting Standards for the 26
weeks ended 26 June 2022. The basis for preparation is outlined in
note 2 to the financial statements.
The Group uses certain measures that it believes provide
additional useful information on its underlying performance. These
measures are applied consistently but as they are not defined under
GAAP they may not be directly comparable with other companies'
adjusted measures. The non-GAAP measures are outlined in note 4 to
the financial statements.
Although the effects of Covid-19 are no longer affecting the
current trading, there remains a significant impact on the prior
year comparatives. The Group will continue to provide transparency
of reporting across a range of comparative periods, using
equivalent open centres where appropriate to get a like-for-like
comparative.
The trading periods for 2020 and 2021 were significantly
disrupted due to Covid restrictions and Lockdowns. 2019 remains a
useful baseline when comparing sales performance, because this is
the last time the business traded a full first half of the year. We
are now also able to compare FY22 results against FY21 results but
on a more restricted basis. For the first half, there are six weeks
of comparator in relation to the reopening trading from 17 May 2021
and the business has been fully trading since that date. The
trading periods are set out in the table below:
26 weeks to 26 weeks to 26 weeks to 26 weeks to
26 June 2022 27 June 2021 28 June 2020 29 June 2019
-------------------- -------------------- -------------------- -------------------- --------------------
Number of centres 47 46 45 44
All centres open Weeks 1-26 Weeks 21-26 Weeks 1-12 Weeks 1-26
All centres closed n/a Weeks 1-20 Weeks 13 - n/a
26
% open 100% 23% 49% 100%
-------------------- -------------------- -------------------- -------------------- --------------------
Going Concern
Having assessed the Group's going concern position and taking
the principal risks faced by the Group into consideration, the
Directors are satisfied that the Group has adequate resources to
continue in operation for the foreseeable future, a period of at
least 12 months from the date of these statements. Accordingly, the
Group continues to adopt the going concern basis in preparing these
condensed consolidated interim financial statements.
Antony Smith
Chief Financial Officer
21 September 2022
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the 26 week period ended 26 June 2022
52 weeks to
26 weeks 26 weeks 26 December
to 26 June to 27 June 2021
2022 Unaudited 2021 Unaudited Audited
Notes GBP000 GBP000 GBP000
---------------------------------------- ------ ---------------- ---------------- -------------
Revenue 5 63,238 10,610 67,521
Cost of sales (19,707) (4,154) (22,511)
Gross profit 43,531 6,456 45,010
Administrative expenses (24,022) (14,559) (35,711)
Loss on Joint Venture (310) - -
Reversal of impairment 747 - 1,124
Exceptional income 4,601 - -
Operating profit 24,547 (8,103) 10,423
---------------------------------------- ------ ---------------- ---------------- -------------
Finance costs (3,532) (2,666) (5,986)
Profit/(loss) before taxation 21,015 (10,769) 4,437
Taxation (2,721) 1,970 (432)
Profit/(loss) for the period
and total comprehensive profit/(loss)
attributable to owners of the
parent 18,294 (8,799) 4,005
---------------------------------------- ------ ---------------- ---------------- -------------
Earnings per share
Basic earnings per share 6 26.75p (12.87p) 5.86p
Diluted earnings per share 6 26.62p (12.87p) 8.84p
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 26 June 2022
26 weeks 52 weeks to
to 26 June 26 weeks to 26 December
2022 27 June 2021 2021
Unaudited Unaudited Audited
Notes GBP000 GBP000 GBP000
------------------------------ ----- ----------- ------------- ------------
Assets
Non-current assets
Goodwill 7 29,740 29,350 29,350
Intangible assets 7 195 355 279
Investments in joint venture - 310 310
Property, plant and equipment 8 42,151 38,566 39,530
Right of use assets 9 173,009 156,559 167,324
Deferred tax asset 4,232 6,088 4,374
249,327 231,228 241,167
Current assets
Inventories 1,250 1,050 1,226
Trade and other receivables 14,777 1,194 5,426
Cash and cash equivalents 7,734 17,103 11,511
Corporation tax receivable 314 10 10
----------- ------------- ------------
24,075 19,357 18,173
Liabilities
Current liabilities
Bank borrowings and lease
liabilities 11 (17,964) (43,871) (16,661)
Trade and other payables (10,568) (12,833) (13,513)
(28,532) (56,704) (30,174)
----------- ------------- ------------
Net current liabilities (4,457) (37,347) (12,001)
Non-current liabilities
Bank borrowings and lease
liabilities 11 (189,987) (171,182) (192,833)
Deferred tax liabilities (2,274) (1,582) (2,270)
(192,261) (172,764) (195,103)
Net assets 52,609 21,117 34,063
Equity
Share capital 685 684 684
Share premium 4,844 4,844 4,844
Share based payments reserve 749 356 498
Merger reserve 6,171 6,171 6,171
Retained earnings 40,160 9,062 21,866
Total equity 52,609 21,117 34,063
------------------------------ ----- ----------- ------------- ------------
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
for the 26 week period ended 26 June 2022
26 weeks 26 weeks 52 weeks
to 26 June to 27 June to 26 December
Notes 2022 Unaudited 2021 Unaudited 2021 Audited
GBP000 GBP000 GBP000
--------------------------------------- ------ ---------------- ---------------- ----------------
Cash flows generated from operating
activities
Cash generated from operations 10 31,851 5,208 30,827
Corporation tax (paid)/received (2,878) 2,292 2,292
Finance costs paid (3,474) (2,651) (5,868)
---------------- ---------------- ----------------
Net cash generated from operating
activities 25,499 4,849 27,251
Cash flows used in investing
activities
Acquisitions of sites by Tenpin
Limited (454) - -
Purchase of property, plant and
equipment (16,632) (205) (7,108)
Purchase of software (13) - (24)
Net cash used in investing activities (17,099) (205) (7,132)
Cash flows (used in)/ from financing
activities
Lease principal payments (5,177) (2,935) (10,002)
Drawdown of bank borrowings - 18,000 22,000
Repayment of borrowings (7,000) (10,000) (28,000)
Net cash (used in)/from financing
activities (12,177) 5,065 (16,002)
Net (decrease)/increase in cash
and cash equivalents (3,777) 9,709 4,117
Cash and cash equivalents - beginning
of period 11,511 7,394 7,394
Cash and cash equivalents - end
of period 7,734 17,103 11,511
--------------------------------------- ---------------- ---------------- ----------------
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
as at 26 June 2022
Share
based
Share Share payment Merger Retained Total
capital premium reserve reserve earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------------------------- --------- --------- --------- --------- ---------- ---------
Unaudited 26 weeks to 26
June 2022
Balance at 26 December 2021 684 4,844 498 6,171 21,866 34,063
Share based payment charge - - 251 - - 251
Issue of shares 1 - - - - 1
Profit for the period and
total comprehensive income
attributable to owners of
the parent - - - - 18,294 18,294
Balance at 26 June 2022 685 4,844 749 6,171 40,160 52,609
Unaudited 26 weeks to 27
June 2021
Balance at 27 December 2020 683 4,844 250 6,171 17,861 29,809
Share based payment charge - - 106 - - 106
Issue of shares 1 - - - - 1
Loss for the period and total
comprehensive loss attributable
to owners of the parent - - - - (8,799) (8,799)
Balance at 27 June 2021 684 4,844 356 6,171 9,062 21,117
52 weeks to 26 December 2021
Balance at 28 December 2020 683 4,844 250 6,171 17,861 29,809
Share based payment charge - - 248 - - 248
Issue of shares 1 - - - - 1
Profit for the period and
total comprehensive income
attributable to owners of
the parent - - - - 4,005 4,005
Balance at 26 December 2021 684 4,844 498 6,171 21,866 34,063
NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS
For the 26 week period ended 26 June 2022
1 General information
Ten Entertainment Group plc (the "Company") is a public limited
company incorporated and domiciled in England, United Kingdom under
company registration number 10672501. The address of the registered
office is Aragon House, University Way, Cranfield Technology Park,
Cranfield, MK43 0EQ.
The condensed consolidated interim financial statements for the
26 week period ended 26 June 2022 ("interim financial statements")
comprise the Company and its subsidiaries (together referred to as
the "Group"). The principal activity of the Group comprises the
operation of tenpin bowling centres.
The financial information for the 26 week period ended 26 June
2022 has been reviewed by the Company's auditors. Their report is
included within this announcement.
The financial information does not constitute statutory
financial statements within the meaning of Section 434 of the
Companies Act 2006. The condensed consolidated interim financial
information should be read in conjunction with the annual financial
statements of the Group for the 52 week period to 26 December 2021
which were approved by the board of directors on 29 March 2022 and
have been filed with the Registrar of Companies. The report of the
auditors on those financial statements was unqualified, did not
contain an emphasis of matter paragraph and did not contain any
statement under section 498 of the Companies Act 2006.
The interim financial statements were approved by the directors
on 21 September 2022.
2 Basis of preparation
The condensed consolidated interim financial statements have
been prepared in accordance with IAS 34 "Interim financial
reporting" as endorsed by the European Union and the Disclosures
and Transparency Rules of the United Kingdom's Financial Conduct
Authority, and incorporate the consolidated results of the Company
and all its subsidiaries for the 26 week period ended 26 June 2022.
They do not include all of the information required for a complete
set of IFRS financial statements. However, selected explanatory
notes are included to explain events and transactions that are
significant to an understanding of the changes in the Group's
financial position and performance since the last financial
statements. The comparative financial information is for the 26
week period ended 27 June 2021.
The interim financial statements are presented in Pounds
Sterling, rounded to the nearest thousand pounds, except where
otherwise indicated; and under the historical cost convention as
modified by the recognition of certain financial assets/liabilities
at fair value through profit or loss.
The accounting policies adopted in the preparation of the
interim financial statements are consistent with those applied in
the presentation of the Group's consolidated financial statements
for the year ended 26 December 2021. A number of other amendments
to existing standards are also effective for periods beginning on
or after 27 December 2021.
At the date of authorisation of this financial information,
certain new standards, amendments and interpretations to existing
standards applicable to the Group have been published but are not
yet effective and have not been adopted early by the Group. The
impact of these standards is not expected to be material.
Going Concern
Having assessed the Group's going concern position and taking
the principal risks faced by the Group into consideration, the
Directors are satisfied that the Group has adequate resources to
continue in operation for the foreseeable future, a period of at
least 12 months from the date of these statements. Accordingly, the
Group continues to adopt the going concern basis in preparing these
condensed consolidated interim financial statements.
3 Accounting estimates, judgements and non GAAP measures
The preparation of condensed consolidated interim financial
statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and
the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these estimates. In preparing these
condensed consolidated interim financial statements, the
significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty
were the same as those that applied to the consolidated financial
statements for the 52 week period ended 26 December 2021.
The Company has identified certain measures that it believes
will assist in the understanding of the performance of the
business. The measures are not defined under IFRS and they may not
be directly comparable with other companies adjusted measures. The
non-IFRS measures are not intended to be a substitute for an IFRS
performance measure but the business has included them as it
considers them to be important comparators and key measures used
within the business for assessing performance. These condensed
interim financial statements make reference to the following
non-IFRS measures:
Group adjusted EBITDA - This measurement is earnings before
interest, taxation, depreciation, amortisation, exceptional items,
impairment and profit or loss on disposal of assets. This has been
done to show the underlying trading performance of the Group which
these other costs or income can distort.
Group adjusted EBITDA after rental costs - This measurement is
earnings before interest, taxation, depreciation, amortisation,
exceptional items, impairment and profit or loss on disposal of
assets, less a deduction for the cash cost of rent.
26 weeks to 26 weeks to
26 June 27 June
2022 2021
Reconciliation of operating profit to Group adjusted EBITDA and Group adjusted EBITDA after
rental costs GBP000 GBP000
Group adjusted EBITDA 28,775 631
Rental cost (6,269) (6,117)
-------------------------------------------------------------------------------------------- ----------- -----------
Group adjusted EBITDA after rental costs 22,506 (5,486)
Add back rental cost 6,269 6,117
Amortisation of fair valued items on acquisition (62) (68)
Amortisation of software (55) (76)
Loss on Joint Venture (310) -
(Loss)/profit on disposals 15 -
Depreciation of property, plant and equipment and right-of-use assets (9,164) (8,590)
-------------------------------------------------------------------------------------------- ----------- -----------
Operating profit/(loss) before exceptional items 19,199 (8,103)
Impairment reversal 747 -
Exceptional items - other 4,601 -
-------------------------------------------------------------------------------------------- ----------- -----------
Operating profit/(loss) 24,547 (8,103)
-------------------------------------------------------------------------------------------- ----------- -----------
Cost of goods sold and gross margin - The cost of sales as
reflected in the statement of comprehensive income consists of
direct bar, food, vending, amusements, gaming machine related
costs, PDQ machine costs and staff costs. Cost of goods sold
excludes staff costs but security and machine licence costs
incurred by the centres are included. Deducting cost of goods sold
from revenue gives the gross margin. This is how cost of goods sold
and gross margin are reported by the business monthly and at centre
level as labour costs are judged as material and thus reported
separately with operating costs.
26 weeks to 26 weeks to
26 June 27 June
2022 2021
Reconciliation of costs of sales GBP000 GBP000
-------------------------------------------------------------- ----------- -----------
Cost of goods sold per the financial review (8,865) (1,234)
-------------------------------------------------------------- ----------- -----------
Site labour costs (11,313) (3,111)
Machine licence and security costs in administrative expenses 471 191
-------------------------------------------------------------- ----------- -----------
Costs of sales per the statement of comprehensive income (19,707) (4,154)
-------------------------------------------------------------- ----------- -----------
Group adjusted profit/(loss) before tax - This consists of the
profit before tax adjusted for items judged as exceptional and
relating to impairment reversals and VAT claims from prior
periods.
Adjusted underlying profit after tax and adjusted earnings per
share - This consists of the profit after tax adjusted for
exceptional items and impairment provisions and reversals and is
used to determine the adjusted earnings per share. The
reconciliation of this number to profit after tax is included under
Note 6.
Exceptional items - These items are those significant cost or
income items which management judges to be one-off in nature and
are not excepted to continue to be incurred as part of the regular
trading performance of the business. The separate reporting of
these items helps to provide a better indication of underlying
performance.
26 weeks to 26 weeks to
26 June 27 June
2022 2021
Exceptional income GBP000 GBP000
--------------------------------------------------- ----------- -----------
Claim for reduced rate of VAT on bowling 4,375 -
Release of provision for updated HMRC VAT guidance 226 -
--------------------------------------------------- ----------- -----------
Total exceptional income 4,601 -
--------------------------------------------------- ----------- -----------
Like-for-like sales - these are a measure of growth of sales
adjusted for new or divested sites over a comparable trading
period.
Bank net debt - This measure is made up of bank borrowings less
cash and cash equivalents as per the statement of financial
position.
Free cash flow - This is cash generated from operations less
maintenance capital as reflected in the financial review, advances
to suppliers for capital projects, finance lease payments, taxation
payments or receipts and non-cash share based payments.
26 weeks to 26 weeks to
26 June 27 June
2022 2021
Reconciliation of free cash flow GBP000 GBP000
---------------------------------------- ----------- -----------
Cash generated from operations 31,851 5,208
Maintenance capital (1,307) (205)
Finance lease and taxation payments (11,528) (3,294)
Non-cash share-based payments charge (248) (106)
---------------------------------------- ----------- -----------
Free cash flow per the financial review 18,768 1,603
---------------------------------------- ----------- -----------
Maintenance capital, existing estate and estate expansion
outflow - This is cash used in investing activities plus cash
advances to suppliers for capital projects. This is reconciled
below:
26 weeks to 26 weeks to
26 June 27 June
2022 2021
Reconciliation of capital investment outflows to cash used in investing activities GBP000 GBP000
----------------------------------------------------------------------------------- ----------- -----------
Cash used in investing activities (17,100) (205)
Analysed as follows:
Maintenance capital (1,307) (205)
Existing estate (9,562) -
Estate expansion (6,231) -
----------------------------------------------------------------------------------- ----------- -----------
Cash outflows for capital projects (17,100) (205)
----------------------------------------------------------------------------------- ----------- -----------
4 Performance share plan awards
The Company operates a Performance Share Plan (PSP) for its
executive directors. In accordance with IFRS 2 Share Based
Payments, the value of the awards is measured at fair value at the
date of the grant. The fair value is written off on a straight-line
basis over the vesting period, based on management's estimate of
the number of shares that will eventually vest. The Company
currently has four active schemes in place that arose in prior
years as detailed as follows:
-- 2019 Share Scheme - This scheme was announced on 20 May 2019
and vested on 18 May 2022 when Graham Blackwell and Antony Smith
exercised their options and were awarded 123,333 and 133,333 shares
respectively . The Earnings Per Share ("EPS") performance condition
which contributed to 50% of the award was not met but the full 50%
of the Total Shareholder Return ("TSR") condition was met with the
Company's performance being in the upper quartile.
-- 2020 Share Scheme - This scheme was announced on 30 November
2020 when 428,572 awards were granted to the two executive
directors. The vesting of these awards is conditional upon the
achievement of two performance conditions and a share price
underpin which will be measured following the announcement of
results for the year to 1 January 2023 ("FY2022"). The first
performance condition applying to the awards will be based on EPS
of the Company and will apply to 50 per cent. of the total number
of Share Awards granted. The second performance condition will be
based on TSR of the Company over the period from the date of grant
to the announcement of results for FY2022 relative to a comparator
group of companies and will apply to the remaining 50 per cent. of
Share Awards granted. No award or part of an award may vest unless
the average share price of the Company calculated over a
three-month period ending on the vesting date exceeds the share
price on the date of grant. During the 26 week period ended 26 June
2022 the Group recognised a net charge of GBP64k (27 June 2021:
GBP64k, 26 December 2021: GBP126k) to administration costs related
to these awards.
-- 2021 Share Scheme - This scheme was announced on 14 October
2021 when 317,843awards were granted to the two executive
directors. The vesting of these awards is conditional upon the
achievement of two performance conditions which will be measured
following the announcement of results for the year to 31 December
2023 ("FY2023"). The first performance condition applying to the
awards will be based on EPS of the Company and will apply to 50 per
cent. of the total number of Share Awards granted. The second
performance condition will be based on TSR of the Company over the
period from the date of grant to the announcement of results for
FY2023 relative to a comparator group of companies and will apply
to the remaining 50 per cent. of Share Awards granted. During the
26 week period ended 26 June 2022 the Group recognised a net charge
of GBP113k (27 June 2021: GBPnil, 26 December 2021: GBP45k) to
administration costs related to these awards.
-- 2022 Share Scheme - This scheme was announced on 30 March
2022 when 327,586 awards were granted to the two executive
directors. The vesting of these awards is conditional upon the
achievement of two performance conditions which will be measured
following the announcement of results for the year to 29 December
2024 ("FY2024"). The first performance condition applying to the
awards will be based on EPS of the Company and will apply to 50 per
cent. of the total number of Share Awards granted. The second
performance condition will be based on TSR of the Company over the
period from the date of grant to the announcement of results for
FY2024 relative to a comparator group of companies and will apply
to the remaining 50 per cent. of Share Awards granted. During the
26 week period ended 26 June 2022 the Group recognised a net charge
of GBP51k to administration costs related to these awards.
5 Segment reporting
Segmental information is presented in respect of the Group's
business segments. Strategic decisions are made by the Board based
on information presented in respect of these segments. The Group
comprises the following segments:
Tenpin (Bowls) - Tenpin is a leading tenpin bowling operator in
the UK. All revenue is derived from activities conducted in the
UK.
Central - Comprises central management including company
secretarial work, the board of directors and general head office
assets and costs. The segment results are used by the Board for
strategic decision making, and a reconciliation of those results to
the reported profit/(loss) in the consolidated statement of
comprehensive income, and the segment assets are as follows:
Tenpin Central Group
GBP000 GBP000 GBP000
For the 26 week period ended 26 June 2022:
Segment revenue - external 63,238 - 63,238
Adjusted EBITDA 23,648 (1,142) 22,506
Segment total assets as at 26
June 2022 269,566 3,836 273,402
Segment total liabilities as at
26 June 2022 (217,605) (3,188) (220,793)
Reconciliation of adjusted EBITDA to reported
operating profit:
Group adjusted EBITDA after rental
costs 23,648 (1,142) 22,506
Amortisation and depreciation
of intangibles, property, plant
and equipment and right of use
assets (9,262) - (9,262)
Loss on Joint Venture - (310) (310)
Profit on disposals 15 - 15
Amortisation of fair valued intangibles (19) - (19)
Impairment reversal 747 - 747
Exceptional income 4,601 - 4,601
Add back rental costs 6,269 - 6,269
---------- -------- ----------
Operating profit/(loss) 25,999 (1,452) 24,547
Finance (costs)/income (3,277) (255) (3,532)
---------- -------- ----------
Profit/(loss) before taxation 22,722 (1,707) 21,015
Tenpin Central Group
GBP000 GBP000 GBP000
For the 26 week period ended 27 June 2021:
Segment revenue - external 10,610 - 10,610
Adjusted EBITDA 1,648 (1,017) 631
Segment total assets as at 27
June 2021 235,100 15,485 250,585
Segment total liabilities as at
27 June 2021 (216,519) (12,949) (229,468)
Reconciliation of adjusted EBITDA to reported
operating profit:
Adjusted EBITDA 1,648 (1,017) 631
Amortisation and depreciation
of intangibles and property, plant
and equipment (8,666) - (8,666)
Amortisation of fair valued intangibles (48) (20) (68)
---------- --------- ----------
Operating loss (7,066) (1,037) (8,103)
Finance (costs)/income (2,438) (228) (2,666)
---------- --------- ----------
Loss before taxation (9,504) (1,265) (10,769)
Disaggregation of revenue
In addition to the breakdown of revenue into the above segments
we have analysed revenue further as following:
26 week period 26 week period 52 week period
ended 26 June ended 27 June ended 26 December
2022 2021 2021
Unaudited Unaudited Audited
GBP000 GBP000 GBP000
--------------- --------------- -------------------
Bowling 28,267 4,833 29,776
Food and drink 17,276 2,875 19,094
Machines and amusements 15,143 2,579 16,280
Other 2,552 323 2,371
63,328 10,610 67,521
6 Earnings per share
Basic earnings per share for each period is calculated by
dividing the earnings attributable to ordinary shareholders by the
weighted average number of ordinary shares in issue during the
period. Earnings per share is based on the capital structure of the
Company and includes the weighted average of the 68,381,496
ordinary shares in issue. The total shares in issue at the end of
the 26 weeks to 26 June 2022 was 68,496,118.
The Company has 326,632 potentially issuable shares (H1 21:
199,553) all of which relate to share options issued to Directors
of the Company. Diluted earnings per share amounts are calculated
by dividing profit for the year and total comprehensive income
attributable to equity holders of the parent Company by the
weighted average number of ordinary shares outstanding during the
year together with the dilutive number of ordinary shares.
Adjusted basic earnings per share have been calculated in order
to compare earnings per share year on year and to aid future
comparisons. Earnings have been adjusted to exclude impairment,
exceptional income and other one-off costs (and any associated
impact on the taxation charge). Adjusted diluted earnings per share
is calculated by applying the same adjustments to earnings as
described in relation to adjusted earnings per share divided by the
weighted average number of ordinary shares outstanding during the
year adjusted by the effect of the outstanding share options.
Basic and diluted 26 weeks 26 weeks to 52 weeks to
to 26 June 27 June 2021 26 December
2022 Unaudited Unaudited 2021 Audited
GBP000 GBP000 GBP000
--------------- ------------- -------------
Profit/(loss) after tax 18,294 (8,799) 4,005
Weighted average number of shares
in issue 68,381,496 68,348,800 68,358,261
Adjustment for share awards 326,632 199,553 274,005
Diluted weighted average number
of shares in issue 68,708,128 68,548,353 68,632,266
Basic earnings per share (pence) 26.75p (12.87p) 5.86p
Diluted earnings per share (pence) 26.62p (12.87p) 5.84p
Below is the calculation of the adjusted earnings per share.
Adjusted earnings per share 26 weeks
to 26 June 26 weeks to 52 weeks to
2022 27 June 2021 26 December
Unaudited Unaudited 2021 Audited
GBP000 GBP000 GBP000
---------------- ----------------- -----------------
Profit/(loss) after tax 18,294 (8,799) 4,005
Exceptional Income (4,601) (238)
Impairment reversal (747) - (1,124)
Tax impact on above adjustments 874 - 45
Adjusted underlying earnings after
tax 13,820 (8,799) 2,688
Adjusted profit/(loss) after tax 13,820 (8,799) 2,688
Weighted average number of shares
in issue 68,381,496 68,348,800 68,358,261
Adjusted basic earnings per share 20.21p (12.87p) 3.93p
Adjusted diluted earnings per share 20.11p (12.87p) 3.92p
7 Goodwill and intangible assets
Fair valued
intangibles
on acquisition Goodwill Software Total
GBP000 GBP000 GBP000 GBP000
-------------------------------------- ---------------- --------- --------- -------
Cost
At 27 December 2020 2,938 29,350 1,301 33,589
Disposal - - (9) (9)
At 27 June 2021 2,938 29,350 1,292 33,580
Additions - - 33 33
At 26 December 2021 2,938 29,350 1,325 33,613
Additions - 390 13 403
At 26 June 2022 2,938 29,740 1,338 34,016
Accumulated amortisation and impairment
losses
At 27 December 2020 2,677 - 1,086 3,763
Charge for the period - amortisation 48 - 64 112
At 27 June 2021 2,725 - 1,150 3,875
Charge for the period - amortisation 42 67 109
At 26 December 2021 2,767 - 1,217 3,984
Charge for the period - amortisation 42 - 55 97
At 26 June 2022 2,809 - 1,272 4,081
Net book value
At 26 June 2022 129 29,740 66 29,935
At 27 June 2021 213 29,350 142 29,705
At 27 December 2020 261 29,350 215 29,826
8 Property, plant and equipment
Amusement
Fixtures,
Fixed fittings
furnishings machines and equipment Total
GBP000 GBP000 GBP000 GBP000
---------------------------- ------------- ------------ --------------- ----------
Cost
At 27 December 2020 11,368 1,401 49,099 61,868
Additions - - 205 205
At 27 June 2021 11,368 1,401 49,304 62,073
Additions - 35 4,065 4,100
Disposals (263) - (1,282) (1,545)
At 26 December 2021 11,105 1,436 52,087 64,628
Additions - 235 5,933 6,168
Disposals - - (74) (74)
At 26 June 2022 11,105 1,671 57,946 70,722
Accumulated depreciation
and impairment
At 27 December 2020 3,806 1,159 15,450 20,415
Charge for the period 508 54 2,530 3,092
At 27 June 2021 4,314 1,213 17,980 23,507
Charge for the period 508 47 2,483 3,038
Impairment reversal - - (264) (264)
Disposals - Depreciation (114) - (1,069) (1,183)
At 26 December 2021 4,708 1,260 19,130 25,098
Charge for the period 502 358 2,765 3625
Impairment reversal - - (149) (149)
Disposals - Depreciation - - (3) (3)
At 26 June 2022 5,210 1,618 21,743 28,571
Net book value
At 26 June 2022 5,895 53 36,203 42,151
At 27 June 2021 7,054 188 31,324 38,566
At 27 December 2020 7,562 242 33,649 41,453
9 Right of use assets
Amusement
machines
& other Total
GBP000 GBP000 GBP000
----------------------------------------- ---------- ---------- ----------
Cost
At 27 December 2020 163,514 10,823 174,337
Lease additions - 15 15
Modification of leases 4,906 - 4,906
Lease disposals - (8) (8)
At 27 June 2021 168,420 10,830 179,250
Lease additions - 427 427
Modification of leases 15,161 - 15,161
Lease disposals - (158) (158)
At 26 December 2021 183,581 11,099 194,680
Lease additions 6,308 569 6,877
Modification of leases 3,793 - 3,793
Lease disposals - (100) (100)
At 26 June 2022 193,682 11,568 205,250
Accumulated depreciation and impairment
At transition on 27 December 2020 10,720 6,472 17,192
Charge for the period 4,410 1,091 5,501
Disposals - Depreciation - (2) (2)
At 27 June 2021 15,130 7,561 22,691
Charge for the period 4,603 1,062 5,665
Disposals - depreciation - (140) (140)
Impairment reversal (860) - (860)
At 26 December 2021 18,873 8,483 27,356
Charge for the period 4,851 730 5,581
Impairment reversal (598) - (598)
Impairment charge - (98) (98)
At 26 June 2022 23,126 9,115 32,241
Net book value
At 26 June 2022 170,556 2,453 173,009
At 27 June 2021 153,290 3,269 156,559
At 27 December 2020 152,794 4,351 157,145
The lease modification relates to the regear of one site where
the term of the lease has been extended. The lease additions are
from the entering of two new leases, with the first for the new
build at Walsall and the second for the Harlow site that was
acquired as explained further in note 12.
10 Cashflow from operations
26 weeks 26 weeks to 52 weeks to
to 26 June 27 June 2021 26 December
2022 Unaudited Unaudited 2021 Audited
Cash flows from operating activities GBP000 GBP000 GBP000
-------------------------------------- ---------------- -------------- --------------
Profit/(loss) for the period 18,294 (8,799) 4,005
Adjustments for:
Tax 2,721 (1,970) 432
Finance costs, net 3,532 2,666 5986
Non-cash exceptionals (4,601) - (2 38)
Non-cash share based payments
charge 248 106 248
Loss on Joint Venture 310 - -
Profit on disposal of assets (15) - 442
Amortisation of intangible assets 97 121 221
Depreciation of property, plant
and equipment 3,625 3,092 6,130
Depreciation of right to use
assets 5,581 5,501 11,166
Impairment reversal (747) - (1,124)
Changes in working capital:
Increase in inventories (24) (542) (720)
Decrease/(increase) in trade
and other receivables 1,173 478 (955)
Increase in trade and other
payables 1,657 4,555 5,234
Cash generated from operations 31,851 5,208 30,827
11 Bank borrowings and leases
26 weeks 26 weeks 52 weeks
to 26 June to 27 June to 26 December
2022 Unaudited 2021 Unaudited 2021 Audited
Current liabilities GBP000 GBP000 GBP000
----------------------------- ---------------- ---------------- ----------------
Bank loans 7,000 28,000 4,666
Leases - Machines/other 2,792 2,730 3,223
Leases - Property 8,300 13,208 8,941
Capitalised financing costs (128) (67) (169)
17,964 43,871 16,661
Non - c urrent liabilities
----------------------------- ---------------- ---------------- ----------------
Bank loans - - 9,334
Leases - Machines/other 1,764 3,051 2,390
Leases - Property 188,223 168,131 181,108
189,987 171,182 192,832
----------------------------- ---------------- ---------------- ----------------
The bank loans with the Royal Bank of Scotland plc consist of a
GBP25.0m committed Revolving Credit Facility (RCF) and GBP14.0m
CLBILS term loan facility. The loans incur interest at SONIA plus a
margin of 1.80%. The Group drew GBP14.0m of the CLBILS facility and
repaid GBP7.0m in April 2022, with another GBP7.0m repaid in July
2022 to fully repay this facility. This leaves just the GBP25m RCF
facility available to the Group
The increase in property leases arose from the modification to
one lease and the entering into of two further leases.
12 Business Combination - Harlow
On the 15 May 2022, Tenpin Limited entered an Asset Purchase
Agreement and acquired the assets and trade of the Harlow bowling
site from Harlow Bowl Limited for GBP454k.
The table below summarises the consideration paid for the
acquisition, the fair value of the assets acquired and the
liabilities assumed on the date of the acquisition:
The following analyses the purchase consideration
Consideration as at 15 May 2022 GBP000
Cash consideration paid 454
Identifiable assets acquired and liabilities assumed
Inventory 6
Property, plant and equipment 59
Intangible assets -
Cash and cash equivalents -
Deferred tax asset 1
Other assets and liabilities, net (2)
Total identifiable net assets 64
Goodwill 390
Total 454
Acquisition related costs of GBP0.1m have been charged to
administrative expenses in the consolidated statement of
comprehensive income for the interim period ended 26 June 2022.
Property, plant and equipment acquired did not include the
bowling lanes and equipment which is retained by the landlord,
which would normally make up the bulk of the cost of a site. The
acquired equipment, furniture and fittings on site is bespoke,
without a market place to easily attain fair values from. The fair
value of the acquired property, plant and equipment has thus been
based on the net book value of these assets at the time of sale to
the Group, being their cost when acquired less accumulated
depreciation up to the date of sale.
A deferred tax asset of GBP1k was recognised on the fair values
of assets acquired versus their tax basis. As part of the due
diligence, the sales and profit numbers prior to acquisition from
the seller's management accounts were reviewed. As not all of the
information was provided they are not disclosed here to provide a
guide to potential full-year performance. Since the date of the
business combination the site generated GBP58k of sales and made
EBITDA of GBPnil which has been included in the statement of
comprehensive income. The goodwill is made up of the expected
benefits to arise from Tenpinisation of the site's operations and
processes under the management of the Tenpin brand. None of the
goodwill is expected to be deductible for tax purposes.
13 Financial risk management
Cash flow and fair value interest rate risk
Cash flow interest rate risk derives from the Group's floating
rate financial liabilities, being its bank debt and overdraft
facility, which are linked to LIBOR plus a margin of 1.8%. The
Group has no fair value interest rate risk. In managing interest
rate risk the Group aims to reduce the impact of short-term
fluctuations on the Group's earnings. Over the longer term,
however, sustained changes in interest rates would have an impact
on the Group's earnings.
Credit risk
As almost all of the Group's sales are for cash, the Group is
exposed to minimal credit risk.
Liquidity risk
The Group's cash position and cash flow forecasts are reviewed
by management on a daily basis. The current bank facilities consist
of a GBP25.0m RCF and a GBP14.0m CLBILS term loan facility. Due to
the strong cash position of the Group, the decision was made to
fully repay the CLBILS facility, with the GBP7.0m balance being
repaid in July 2022.
14 Principal risks and uncertainties
Ultimate responsibility for the Group's risk management
framework sits with the Board who review the Group's risk appetite
on an annual basis. The Group's principal risks and uncertainties
are assessed in detail as set out in the full Annual Report for the
52 weeks ended 26 December 2021.
The growing uncertainty around the economic climate including
the possible impacts of a recession on consumers disposal income
and inflation on the Groups cost base, has increased since the risk
assessed at year end. The risk presented by the Covid-19 pandemic
around business closures and disruption to trade however, has
further decreased since the risk assessed at the year end.
The Group does not believe there have been any other significant
changes to its principal risks that will impact on the Group in the
remaining half of the year which in summary include:
-- Operational - ageing of estate, deterioration of assets and loss of key personnel
-- Operational - allergens related to food and bar services provided
-- Regulatory changes - new laws, re-interpreted laws and updates from case law
-- Business interruption - risk of cyber-attacks, terrorism,
failure or unavailability of IT infrastructure
15 Related Parties
Amounts
Income from Expenses Loans outstanding
transactions from transactions to with
Related with related with related related related
party party party party party
--------------------------------------------- ---------------------------------------------- -------- ------------
27 December
2020 - 12 166 237
------------ --------------------------------------------- ---------------------------------------------- -------- ------------
Houdini's
Escape
Room
Experience
Limited - - 102 339
Source
Bioscience - 1 - -
At 27 June
2021 - 1 102 339
Houdini's
Escape
Room
Experience
Limited 240 - 319 -
Source
Bioscience - 1 - -
At 26
December
2021 240 1 319 899
Houdini's
Escape
Room
Experience
Limited 164 - 511 1,574
At 26 June
2022 164 - 511 1,574
All intercompany transactions and balances have been eliminated
on consolidation. Other related party transactions consist of
compensation of key management personnel which was disclosed in the
Group's Annual Report and Accounts for the year ending 26 December
2021.
DIRECTORS' RESPONSIBILTY STATEMENT
The directors confirm that these condensed interim financial
statements have been prepared in accordance with International
Accounting Standard 34, 'Interim Financial Reporting', as adopted
by the European Union and that the interim management report
includes a fair review of the information required by DTR 4.2.7 and
DTR 4.2.8, namely:
-- an indication of important events that have occurred during the first six months and
-- their impact on the condensed set of financial statements,
and a description of the principal risks and uncertainties for the
remaining six months of the financial year; and
-- material related-party transactions in the first 26 weeks and
any material changes in the related-party transactions described in
the last annual report.
The directors confirm to the best of their knowledge that the
condensed interim financial statements have been prepared in
accordance with the Accounting Standards Board 2007 statement on
half yearly financial reports.
The directors are responsible for the maintenance and integrity
of the company 's website. Legislation in the United Kingdom
governing the preparation and dissemination of interim financial
statements may differ from legislation in other jurisdictions.
The responsibility statement was approved by the Board on 21
September 2022 and signed on its behalf by:
Graham Blackwell Antony Smith
CEO CFO
21 September 2022 21 September 2022
Independent review report to Ten Entertainment Group plc
Report on the condensed consolidated interim financial
statements
Our conclusion
We have reviewed Ten Entertainment Group plc's condensed
consolidated interim financial statements (the "interim financial
statements") in the Half-Year Results of Ten Entertainment Group
plc for the 26 week period ended 26 June 2022 (the "period").
Based on our review, nothing has come to our attention that
causes us to believe that the interim financial statements are not
prepared, in all material respects, in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial Reporting'
and the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority.
The interim financial statements comprise:
-- the condensed consolidated statement of financial position as at 26 June 2022;
-- the condensed consolidated statement of comprehensive income for the period then ended;
-- the condensed consolidated statement of cash flows for the period then ended;
-- the condensed consolidated statement of changes in equity for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the Half-Year
Results of Ten Entertainment Group plc have been prepared in
accordance with UK adopted International Accounting Standard 34,
'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority.
Basis for conclusion
We conducted our review in accordance with International
Standard on Review Engagements (UK) 2410, 'Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity' issued by the Financial Reporting Council for use in the
United Kingdom. A review of interim financial information consists
of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review
procedures.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and,
consequently, does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
We have read the other information contained in the Half-Year
Results and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than
those performed in an audit as described in the Basis for
conclusion section of this report, nothing has come to our
attention to suggest that the directors have inappropriately
adopted the going concern basis of accounting or that the directors
have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on
the review procedures performed in accordance with this ISRE.
However, future events or conditions may cause the group to cease
to continue as a going concern.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the directors
The Half-Year Results, including the interim financial
statements, is the responsibility of, and has been approved by the
directors. The directors are responsible for preparing the
Half-Year Results in accordance with the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority. In preparing the Half-Year Results, including
the interim financial statements, the directors are responsible for
assessing the group's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors
either intend to liquidate the group or to cease operations, or
have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim
financial statements in the Half-Year Results based on our review.
Our conclusion, including our Conclusions relating to going
concern, is based on procedures that are less extensive than audit
procedures, as described in the Basis for conclusion paragraph of
this report. This report, including the conclusion, has been
prepared for and only for the company for the purpose of complying
with the Disclosure Guidance and Transparency Rules sourcebook of
the United Kingdom's Financial Conduct Authority and for no other
purpose. We do not, in giving this conclusion, accept or assume
responsibility for any other purpose or to any other person to whom
this report is shown or into whose hands it may come save where
expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
21 September 2022
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END
IR FLFSAADIIFIF
(END) Dow Jones Newswires
September 21, 2022 02:02 ET (06:02 GMT)
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