TIDMCOM
RNS Number : 2898N
Comptoir Group PLC
29 September 2021
29 September 2021
Comptoir Group Plc
("Comptoir", the "Group" or the "Company")
Interim Results
Highlights:
-- Group revenue of GBP5.7m down by 6.9% (H1 2020: GBP 6.1m)
-- Gross profit of GBP4.3m down by 4.8% (H1 2020: GBP 4.5 m).
-- Adjusted EBITDA* before highlighted items of GBP1.6m up by 262.8% (H1 2020: GBP0.45m).
-- IFRS loss after tax of GBP1.2.m (H1 2020: GBP4.97m loss).
-- Net cash and cash equivalents** at the period end of GBP9.2m
(H1 2020: GBP5.0m; 31 December 2020: GBP7.8m).
-- The basic loss per share for the period was 0.98 pence (H1
2020: basic loss per share 4.05 pence).
-- Currently own and operate 21 restaurants, with a further 4 franchise restaurants.
Note that these results are impacted by COVID-19 related
closures affecting all restaurants in the Group. In 2020 periods
were affected from 19 March onwards. In 2021 the periods affected
were between 1 January and 19 July
*Adjusted EBITDA was calculated from the profit/(loss) before
taxation adding back interest, depreciation, share-based payments,
and non-recurring costs (note 12).
Richard Kleiner, Non-Executive Chairman, said: "We have made
strong progress over the past six months. Whilst we have been
focusing on the re-opening of the sites and welcoming back dine-in
customers as the Government restrictions were lifted; we have also
been transforming the business through investment in systems and
technology.
The unique family ethos that pervades throughout the Comptoir
team has made me extremely proud, as everyone pulled together in
adversity to support not just their team but every member of the
Group to ensure we delivered that unique Comptoir hospitality.
The sector is still under extreme pressure from well-documented
challenges such as the availability of labour as well as the
pressure on the supply chain, but we recognise we are fortunate to
be in a better position relative to many of our peers.
As ever, we monitor and respond to these challenges as and when
they occur. However, with strong sales since the phased reopening
began in April, a relatively strong balance sheet and the potential
for new openings, we are optimistic for the future and the
long-term prospects for the business looks extremely positive."
Enquiries:
Comptoir Group plc
Chaker Hanna Tel: 0207 486 1111
Canaccord Genuity Limited (NOMAD and broker)
Adam James Tel: 020 7523 8000
Georgina McCooke
Chief executive's review
Once again, the first half of this financial year was hugely
disrupted by the restrictions placed on the sector by the
Government due to the ongoing Covid-19 pandemic. The first fifteen
weeks of the year found the country in a third full lockdown with
trade limited to takeaway and delivery only. For five weeks from 12
April, we opened for trade however this was restricted to outside
areas only. From 17 June, sites were fully reopened but with social
distancing restrictions kept in place. All restrictions were
finally lifted 19 July, therefore in the six-month period ending 4
July there were zero weeks of no restrictions and just seven weeks
of full trading, albeit with distancing restrictions still in
place.
Since reopening, the trading performance has been very strong
with the group comfortably outperforming forecasts. I can only
reiterate our Chairman's statement of how proud I am personally of
the way the teams have consistently pulled together to help
everyone through what is a uniquely difficult period in the
sector's history. This wouldn't have been possible without the
unwavering commitment of the Comptoir family and for that I am and
remain extremely proud.
However, we have some exceptional challenges to face in the next
trading period as we navigate the upcoming short-term issues. These
include the end of the Government support such as the furlough
scheme, rates holiday, normalisation of VAT as well as the
availability of labour and the inflationary pressures on the supply
chain. The labour and inflationary pressures will continue through
2021 and into 2022 with the National Living Wage (NLW), as well as
the recently announced 1.25% increase in Employers NI (both April
2022) only exacerbating this. However, we fully expect to navigate
these issues successfully as we always have done. These issues
won't be solved without strong relationships with our key
stakeholders and at this point I would like to thank all our
suppliers and landlords who we have worked so closely with over the
last 18 months. Their support has been paramount, and with all
concessions agreed we look to expanding on these relationships in
the future.
Conversely, it must also be noted that there is an opportunity
for Comptoir to add to its site pipeline with the reduction in
competition for premium sites. This coupled with our excellent
relationships with our current landlords allows us to some extent
pick and choose where we may wish to increase our estate where we
feel there is value in doing so. Accordingly, we intend to invest
in not only Comptoir Libanais but also expand our QSR Shawa brand.
This strategy has already commenced with the opening of our latest
Shawa in Westfield Shepherds Bush in September.
Financial Performance Half Year
As already noted, the period was hugely impacted by nationwide
lockdowns, however the half year results are resilient despite the
elongated closure periods.
As a consequence of the lockdown periods, the revenue for the
total Group for the half year was GBP5.7m (H1 2020: GBP6.1m).
However, I'm pleased to report an adjusted EBITDA profit of
GBP1.6m (H1 2020: GBP0.5m) driven by the Government assistance
received but also through exceptional cost control across the
business. Since reopening in April, the Group has reported positive
EBITDA every period at a level ahead of expectations.
The Board carried out a full impairment review at the half year
and as a result, impairment of GBP0.34m has been charged, based on
judgement of future cash flow generation from each restaurant. The
Board will revisit these assumptions at the year end and adjust the
impairment provision according to the forecast at that time.
This impairment charge contributed towards the reported IFRS
loss after tax of GBP1.2m (H1 2020: GBP5.0m loss).
The Group has also taken account of the amendment to IFRS16
COVID-19 related rent concessions. Where the rent concession is a
direct consequence of COVID-19, and the reduction does not involve
substantive changes to the lease then the concessions are able to
be credited to the profit and loss. This has resulted in a one-off
credit of GBP0.71m in the period.
We envisage exiting two more leases over the next 12 months, as
we continue to discuss with our landlords and assess the trading
conditions. We will make these final decisions at the appropriate
time and only if it is in the best interest of the Group.
Team
Our staff continued to be impacted by Covid-19 throughout the
period, with most remaining on furlough. We have continued to
prioritise their wellbeing, maintaining contact throughout this
period as well as offering financial support to all members. It has
again been a difficult time for not only our team but also their
families and the management team would like to thank them for their
attitude and resolve. Since reopening in April, we have continued
to welcome our staff back in in line with the restrictions being
removed. We now have all staff back in the business with no
furlough being utilised since the end of July.
Leanne Galer-Reick joined as Head of Marketing during the
period. Leanne has a fantastic track record having worked in the
industry at the highest level and has already made a substantial
contribution, as we add to the Group's expertise and plan for
future opportunities.
Current and future outlook
Whilst there is the argument for pent up demand post lockdown,
we have found trading has continued to improve week to week and the
overall outperformance of the group is hugely encouraging and gives
the board every confidence in the prospects for the remainder of
the year and into 2022.
We have seen solid performance in our London sites, which
naturally remain impacted by the lower number of office workers and
tourists. The regional sites have outperformed pre-pandemic 2019
levels and we have seen record levels of trading in a selection of
sites. Importantly, all 21 sites are making a positive contribution
at the profit level since reopening, highlighting the quality of
the existing estate.
The Group has an excellent base to continue to operate from as
we return to normality, and the future looks to be one of growth
and success.
Chaker Hanna
Chief Executive Officer
28 September 2021
Consolidated statement of comprehensive income
For the half-year ended 4 July 2021
Notes Half-year Half-year Year ended
ended 4 ended 30 31 December
July 2021 June 2020 2020
GBP GBP GBP
Revenue 5,670,300 6,090,758 12,492,506
Cost of sales (1,393,582) (1,597,547) (3,179,944)
Gross profit 4,276,718 4,493,211 9,312,562
Distribution expenses (1,228,118) (1,785,442) (7,463,177)
Administrative
expenses (7,339,366) (4,604,293) (10,276,882)
Other income 3,109,446 - 4,579,201
Rent concessions 714,822 302,413 982,209
Impairment costs 8 (336,356) (2,572,443) (4,019,871)
Payroll provision 3 - (353,012) (353,012)
Operating loss 3 (802,854) (4,519,566) (7,238,970)
Finance costs (399,414) (482,589) (910,885)
Loss before tax (1,202,268) (5,002,155) (8,149,855)
Taxation charge - 30,695 48,326
Loss for the year (1,202,268) (4,971,460) (8,101,529)
Other comprehensive
income - - -
Total comprehensive
loss for
the year (1,202,268) (4,971,460) (8,101,529)
---------------------- ------ ---------------------------- ---------------------------- --------------------------
Basic loss per share
(pence) 6 (0.98) (4.05) (6.60)
Diluted loss per
share (pence) 6 (0.98) (4.05) (6.60)
---------------------- ------ ---------------------------- ---------------------------- --------------------------
Notes Half-year Half-year Year ended
ended 4 ended 30 31 December
July 2021 June 2020 2020
Adjusted EBITDA:
Loss before tax - as
above (1,202,268) (5,002,155) (8,149,855)
Add back:
Depreciation 8 1,610,395 2,011,000 4,020,265
Finance costs 399,414 482,589 910,885
Impairment of assets 8 336,356 2,572,443 4,019,871
EBITDA 1,143,897 63,877 801,166
Share-based payments
expense 3 25,046 26,394 14,578
Restaurant opening
costs 3 3,489 7,032 53,378
Payroll provision 3 - 353,012 353,012
Loss on disposal of
fixed assets 461,185 - 171,617
Adjusted EBITDA 1,633,617 450,315 1,393,751
---------------------- ------ ---------------------------- ----------------------------
All the above results are derived from continuing
operations.
Consolidated balance sheet
At 4 July 2021
Notes 4 July 2021 30 June 31 December
2020 2020
GBP GBP GBP
Assets
Non-current assets
Intangible assets 7 55,267 55,267 55,267
Property, plant and equipment 8 7,425,908 9,688,797 8,473,596
Right-of-use assets 8 16,098,264 19,558,261 17,596,744
Deferred tax asset 292,409 262,137 -
-------------------------------- ------ ------------------------ ------------------------ ----------------------------
23,871,848 29,564,462 26,125,607
Current asset
Inventories 441,364 494,878 424,673
Trade and other receivables 837,619 1,388,244 1,100,922
Cash and cash equivalents 9,174,260 5,009,864 7,833,676
-------------------------------- ------ ------------------------ ------------------------ ----------------------------
10,453,243 6,892,986 9,359,271
Total assets 34,325,091 36,457,448 35,484,878
-------------------------------- ------ ------------------------ ------------------------ ----------------------------
Liabilities
Current liabilities
Borrowings (555,000) (181,490) (250,000)
Trade and other payables (8,209,594) (5,439,441) (6,527,668)
Lease liabilities (2,331,800) (2,113,151) (2,443,198)
Current tax liabilities (45,817) (183,518) (45,817)
-------------------------------- ------ ------------------------ ------------------------ ----------------------------
(11,142,211) (7,917,600) (9,266,683)
Non-current liabilities
Borrowings (2,445,000) (15,817) (2,750,000)
Provisions for liabilities (841,663) (808,452) (832,455)
Lease liabilities (18,306,833) (21,837,360) (20,161,543)
Deferred tax liability (292,409) (262,137) -
-------------------------------- ------ ------------------------ ------------------------ ----------------------------
(21,885,905) (22,923,766) (23,743,998)
Total liabilities (33,028,116) (30,841,366) (33,010,681)
-------------------------------- ------ ------------------------ ------------------------ ----------------------------
Net assets 1,296,975 5,616,082 2,474,197
-------------------------------- ------ ------------------------ ------------------------ ----------------------------
Equity
Share capital 10 1,226,667 1,226,667 1,226,667
Share premium 10,050,313 10,050,313 10,050,313
Other reserves 122,332 109,102 97,286
Retained losses (10,102,337) (5,770,000) (8,900,069)
-------------------------------- ------ ------------------------ ------------------------ ----------------------------
Total equity - attributable
to equity shareholders of the
company 1,296,975 5,616,082 2,474,197
-------------------------------- ------ ------------------------ ------------------------ ----------------------------
Consolidated statement of changes in equity
For the half-year ended 4 July 2021
Notes Share capital Share premium Other reserves Retained Total equity
losses
GBP GBP GBP GBP GBP
At 1 January 2021 1,226,667 10,050,313 97,286 (8,900,069) 2,474,197
Total
comprehensive
loss
Loss for the period - - - (1,202,268) (1,202,268)
Transactions
with owners
Share-based payments - - 25,046 - 25,046
At 4 July 2021 1,226,667 10,050,313 122,332 (10,102,337) 1,296,975
------------------------ ----------------------- ----------------------- ----------------------- ----------------------- ------------------
At 1 January 2020 1,226,667 10,050,313 82,708 (798,540) 10,561,148
Total
comprehensive
loss
Loss for the period - - - (4,971,460) (4,971,460)
Transactions
with owners
Share-based payments - - 26,394 - 26,394
At 30 June 2020 1,226,667 10,050,313 109,102 (5,770,000) 5,616,082
------------------------ ----------------------- ----------------------- ----------------------- ----------------------- ------------------
At 1 January 2020 1,226,667 10,050,313 82,708 (798,540) 10,561,148
Total
comprehensive
loss
Loss for the year - - - (8,101,529) (8,101,529)
Transactions
with owners
Share-based payments - - 14,578 - 14,578
At 31 December 2020 1,226,667 10,050,313 97,286 (8,900,069) 2,474,197
------------------------ ----------------------- ----------------------- ----------------------- ----------------------- ------------------
Consolidated statement of cash flows
For the half-year ended 4 July 2021
Notes Half-year Half-year Year ended
ended 4 ended 30 31 December
July 2021 June 2020 2020
GBP GBP GBP
Operating activities
Cash inflow from
operations 11 2,405,268 1,613,637 2,842,394
Interest paid - (4,723) (6,253)
Tax paid - (606) (120,677)
Net cash from
operating activities 2,405,268 1,608,308 2,715,464
----------------------- ------ ---------------------------- ---------------------------- -------------------------
Investing activities
Purchase of property,
plant &
equipment 8 (163,949) (97,494) (182,578)
Net cash used from
investing
activities (163,949) (97,494) (182,578)
----------------------- ------ ---------------------------- ---------------------------- -------------------------
Financing activities
Payment of lease
liabilities (900,735) (1,457,522) (2,458,474)
Bank loan proceeds - - 3,000,000
Bank loan repayments - (120,038) (317,346)
Net cash
(used)/received from
financing activities (900,735) (1,577,560) 224,180
----------------------- ------ ---------------------------- ---------------------------- -------------------------
Increase/(decrease) in
cash and
cash equivalents 1,340,584 (66,746) 2,757,066
Cash and cash
equivalents at
beginning of year 7,833,676 5,076,610 5,076,610
Cash and cash
equivalents at
end of year 9,174,260 5,009,864 7,833,676
----------------------- ------ ---------------------------- ---------------------------- -------------------------
Notes to the financial information
For the half-year ended 4 July 2021
1. Basis of preparation
The Group changed to a weekly accounting calendar during the
period, consequently, the consolidated financial information has
been prepared for the 26 weeks ending 4 July 2021 rather than for 6
months ending 30 June 2021.
The consolidated financial information for the half-year ended 4
July 2021, has been prepared in accordance with the accounting
policies the Group applied in the Company's latest annual audited
financial statements and are expected to be applied in the annual
financial statements for the year ending 31 December 2021. These
accounting policies are based on the EU-adopted International
Financial Reporting Standards ("IFRS") and International Financial
Reporting Interpretation Committee ("IFRIC") interpretations. The
consolidated financial information for the half-year ended 4 July
2021 has been prepared in accordance with IAS 34: 'Interim
Financial Reporting', as adopted by the EU, and under the
historical cost convention.
The financial information relating to the half-year ended 4 July
2021 is unaudited and does not constitute statutory financial
statements as defined in section 434 of the Companies Act 2006. The
comparative figures for the year ended 31 December 2020 have been
extracted from the consolidated financial statements, on which the
auditors gave an unqualified audit opinion and did not include a
statement under section 498 (2) or (3) of the Companies Act 2006.
The annual report and accounts for the year ended 31 December 2020
has been filed with the Registrar of Companies.
The Group's financial risk management objectives and policies
are consistent with those disclosed in the 2020 annual report and
accounts.
The half-yearly report was approved by the board of directors on
28 September 2021. The half-yearly report is available on the
Comptoir Libanais website, www.comptoirlibanais.com , and at
Comptoir Group's registered office, Unit 2, Plantain Place, Crosby
Row, London Bridge, SE1 1YN.
2. Changes in accounting policies
The accounting policies adopted in the preparation of the
consolidated financial information for the half-year ended 4 July
2021 are consistent with those followed in the preparation of the
Group's annual consolidated financial statements for the year ended
31 December 2020.
At the date of authorisation of the half-yearly report, the
following amendments to Standards and Interpretations issued by the
IASB that are effective for an annual period that begins on or
after 1 January 2021. These have not had any material impact on the
amounts reported for the current and prior years.
Standard or Interpretation Effective Date
Interest Rate Benchmark Reform Phase 2 1 January 2021
(Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)
New and revised Standards and Interpretations in issue but not
yet effective
At the date of authorisation of these financial statements, the
Group has not early adopted the following amendments to Standards
and Interpretations that have been issued but are not yet
effective:
Standard or Interpretation Effective Date
Narrow scope amendments to IFRS 3, IAS 16 and IAS 37 1 January
2022
Annual improvements to IFRS Standards 2018-2020 1 January
2022
Amendments to IAS 1: Classification of Liabilities as
Current or Non-Current 1 January 2022
As yet, none of these have been endorsed for use in the UK and
will not be adopted until such time as endorsement is confirmed.
The directors do not expect any material impact as a result of
adopting standards and amendments listed above in the financial
year they become effective.
Critical accounting judgements and key sources of estimation
uncertainty
The preparation of financial statements in conformity with IFRS
requires management to make judgments, estimates and assumptions
that affect the application of policies and reported amounts of
assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the
judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. The resulting accounting
estimates may differ from the related actual results.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future
periods if the revision affects both current and future
periods.
In the process of applying the Group's accounting policies,
management has made a number of judgments and estimations of which
the following are the most significant. The estimates and
assumptions that have a risk of causing material adjustment to the
carrying amounts of assets and liabilities within the future
financial years are as follows:
Depreciation, useful lives and residual values of property,
plant & equipment
The Directors estimate the useful lives and residual values of
property, plant & equipment in order to calculate the
depreciation charges. Changes in these estimates could result in
changes being required to the annual depreciation charges in the
statement of comprehensive incomes and the carrying values of the
property, plant & equipment in the balance sheet.
Impairment of assets
The Group assesses at each reporting date whether there is an
indication that an asset may be impaired. If any such indication
exists, or when annual impairment testing for an asset is required,
the Group makes an estimate of the asset's recoverable amount. An
asset's recoverable amount is the higher of an asset's or
cash-generating unit's fair value less costs to sell and its value
in use and is determined for an individual asset, unless the asset
does not generate cash inflows that are largely independent of
those from other assets or groups of assets.
Critical accounting judgements and key sources of estimation
uncertainty (continued)
Where the carrying amount of an asset exceeds its recoverable
amount, the asset is considered impaired and is written down to its
recoverable amount. In assessing value in use, the estimated future
cash flows are discounted to their present value of money and the
risks specific to the asset. Impairment losses of continuing
operations are recognised in the profit or loss in those expense
categories consistent with the function of the impaired asset.
An impairment of assets of GBP336,356 (H1 2020: GBP2,572,443, 31
December 2020: GBP4,019,871) was required for the half year ended 4
July 2021.
Leases
The Group has estimated the lease term of certain lease
contracts in which they are a lessee, including whether they are
reasonably certain to exercise lessee options. The incremental
borrowing rate used to discount lease liabilities has also been
estimated in the range of 2.6% to 4%. This is assessed as the rate
of interest that would be payable to borrow a similar about of
money for a similar length of time for a similar right-of-use
asset.
Deferred tax assets
Historically, deferred tax assets had been recognised in respect
of the total unutilised tax losses within the Group. A condition of
recognising this amount depended on the extent that it was probable
that future taxable profits will be available.
Given the uncertainty of the current trading outlook, management
have decided to only recognise a deferred tax asset amount of
GBP292,409, being equal to the deferred tax liability amount and
therefore have an unprovided deferred tax asset amount of
GBP435,624.
3. Group operating loss
Half-year Half-year Year ended
ended 4 ended 30 31 December
July 2021 June 2020 2020
GBP GBP GBP
This is stated after
(crediting)/charging:
Operating lease charges 235,579 101,634 185,456
Rent concessions (714,822) (302,413) (982,209)
Lease term modifications (447,785) 117,800 (340,494)
Share-based payments
expense (see note
5) 25,046 26,394 14,578
Restaurant opening costs 3,489 7,032 53,378
Depreciation of property,
plant and equipment
(see note 8) 1,610,395 2,011,000 4,020,265
Impairment of assets (see
note 7 & 8) 336,356 2,572,443 4,019,871
Loss on disposal of fixed
assets 461,186 - 171,617
Payroll provision - 353,012 353,012
Auditors' remuneration - - 52,250
---------------------------- ---------------------------- ---------------------------- ----------------------------
Half-year Half-year Year ended
ended 4 ended 30 31 December
July 2021 June 2020 2020
GBP GBP GBP
Pre-opening costs 3,489 7,032 53,378
Post-opening costs - - -
3,489 7,032 53,378
---------------------------- ---------------------------- ---------------------------- ----------------------------
The payroll provision relates to a one-off provision as a result
of a review of the current pension scheme in place as part of a
planned transition to Payroll Bureau services.
For the initial trading period following opening of a new
restaurant, the performance of that restaurant will be lower than
that achieved by other, similar, mature restaurants. The difference
in this performance, which is calculated by reference to gross
profit margins amongst other key metrics, is quantified and
included within opening costs. The breakdown of opening costs,
between pre-opening costs and post-opening costs is shown
above.
4. Operating segments
The Group has only one operating segment: the operation of
restaurants with Lebanese and Middle Eastern offering and one
geographical segment (the United Kingdom). The Group's brands meet
the aggregation criteria set out in paragraph 22 of IFRS 8
"Operating Segments" and as such the Group reports the business as
one reportable segment. None of the Group's customers individually
contribute over 10% of the total revenue.
5. Share options and share-based payment charge
On 4 July 2018, the Group established a Company Share Option
Plan ("CSOP") under which 4,890,000 share options were granted to
key employees. The CSOP scheme includes all subsidiary companies
headed by Comptoir Group PLC. The exercise price of all of the
options is GBP0.1025 and the term to expiration is 3 years from the
date of grant, being 4 July 2018. All of the options have the same
vesting conditions attached to them.
5. Share options and share-based payment charge (continued)
On 21 May 2021, the Group established a new Company Share Option
Plan ("CSOP") under which 3,245,000 share options were granted to
key employees. The CSOP scheme includes all subsidiary companies
headed by Comptoir Group PLC. The exercise price of all of the
options is GBP0.0723 and the term to expiration is 3 years from the
date of grant, being 21 May 2021. All of the options have the same
vesting conditions attached to them.
The total share-based payment charge for the period was
GBP25,046 (H1 2020: GBP26,394, 31 December 2020: GBP14,578).
6. Loss per share
The Company had 122,666,667 ordinary shares of GBP0.01 each in
issue at 4 July 2021. The basic and diluted loss per share figures,
is based on the weighted average number of shares in issue during
the periods. The basic and diluted loss per share figures are set
out below.
Half-year Half-year Year ended
ended 4 ended 30 31 December
July 2021 June 2020 2020
GBP GBP GBP
Loss attributable to shareholders (1,202,268) (4,971,460) (8,101,529)
Number Number Number
Weighted average number of shares
For basic earnings per share 122,666,667 122,666,667 122,666,667
For diluted earnings per share 122,666,667 122,666,667 122,666,667
---------------------------------- -------------------------- -------------------------- --------------------------
Pence per Pence per Pence per
share share share
Loss per share:
Basic (pence)
From loss for the year (0.98) (4.05) (6.60)
Diluted (pence)
From loss for the year (0.98) (4.05) (6.60)
The loss per share and diluted loss per share is calculated by
dividing the profit or loss attributable to ordinary shareholders
by the weighted average number of shares and 'in the money' share
options in issue. Share options are classified as 'in the money' if
their exercise price is lower than the average share price for the
period. As required by 'IAS 33: Earnings per share', this
calculation assumes that the proceeds receivable from the exercise
of 'in the money' options would be used to purchase shares in the
open market in order to reduce the number of new shares that would
need to be issued. As the shares were not 'in the money' as at 4
July 2021 and consequently would be antidilutive, no adjustment was
made in respect of the share options outstanding to determine the
diluted number of options.
7. Intangible assets
Group Goodwill Total
GBP GBP
Cost
At 1 January 2021 89,961 89,961
Additions - -
------------------------------ ------------------------------
At 4 July 2021 89,961 89,961
----------------------------------------- ------------------------------ ------------------------------
Accumulated amortisation and impairment
At 1 January 2021 (34,694) (34,694)
Amortised during the year - -
Impairment during the year - -
------------------------------ ------------------------------
At 4 July 2021 (34,694) (34,694)
----------------------------------------- ------------------------------ ------------------------------
Net Book Value as at 4 July 2021 55,267 55,267
----------------------------------------- ------------------------------ ------------------------------
Net Book Value as at 30 June 2020 55,267 55,267
----------------------------------------- ------------------------------ ------------------------------
Net Book Value as at 31 December 2020 55,267 55,267
----------------------------------------- ------------------------------ ------------------------------
Intangible fixed assets consist of goodwill from the acquisition
of Agushia Limited.
Goodwill arising on business combinations is not amortised but
is subject to an impairment test annually which compares the
goodwill's 'value in use' to its carrying value. No impairment of
goodwill was considered necessary in the current period.
8. Property, plant and equipment
Right-of Leasehold Plant and Fixture, Motor Vehicles Total
use Assets Land and machinery fittings
buildings & equipment
GBP GBP GBP GBP GBP GBP
Cost
At 1 January
2021 27,924,649 11,016,023 4,800,774 2,858,547 53,430 46,653,423
Additions - 9,763 72,867 81,319 - 163,949
Disposals - (590,869) (286,494) (167,407) - (1,044,770)
Modifications (302,180) - - - - (302,180)
At 4 July 2021 27,622,469 10,434,917 4,587,147 2,772,459 53,430 45,470,422
--------------- ------------------------- ------------------------- ------------------------- ------------------------- ------------------------- -----------------
Accumulated
depreciation
and impairment
At 1 January
2021 (10,327,905) (5,878,170) (2,926,080) (1,441,993) (8,935) (20,583,083)
Depreciation
during
the year (1,126,199) (274,189) (139,802) (68,388) (1,817) (1,610,395)
Disposals
during the
year - 382,953 139,100 61,531 - 583,584
Impairment
during
the year (70,101) (182,897) (58,661) (24,697) - (336,356)
At 4 July 2021 (11,524,205) (5,952,303) (2,985,443) (1,473,547) (10,752) (21,946,250)
--------------- ------------------------- ------------------------- ------------------------- ------------------------- ------------------------- -----------------
Net book value
As at 4 July
2021 16,098,264 4,482,614 1,601,704 1,298,912 42,678 23,524,172
As at 30 June
2020 19,558,261 6,036,453 2,036,756 1,570,299 45,289 29,247,058
As at 31
December
2020 17,596,744 5,137,853 1,874,694 1,416,554 44,495 26,070,340
--------------- ------------------------- ------------------------- ------------------------- ------------------------- ------------------------- -----------------
8. Property, plant and equipment (continued)
At each reporting date the Group considers any indication of
impairment to the carrying value of its property, plant and
equipment. The assessment is based on expected future cash flows
and Value-in-Use calculations are performed annually and at each
reporting date and is carried out on each restaurant as these are
separate 'cash generating units' (CGU). Value-in-Use was calculated
as the net present value of the projected risk-adjusted post-tax
cash flows plus a terminal value of the CGU. A pre-tax discount
rate was applied to calculate the net present value of pre-tax cash
flows. The discount rate was calculated using a market participant
weighted average cost of capital. A single rate has been used for
all sites as management believe the risks to be the same for all
sites.
The outbreak of COVID-19 and related global responses have
caused material disruptions to businesses around the world, leading
to an economic slowdown. Global equity markets have experienced
significant volatility and weakness. As at the date of this
half-yearly report, the fair value of the Group's assets and
investments has declined as a result of the virus outbreak and the
resulting temporary closure of the Group's restaurants. These
factors have been incorporated into our review.
The recoverable amount of each CGU has been calculated with
reference to its Value-in-Use. The key assumptions of this
calculation are shown below:
Sales and costs growth 3%
Discount rate 8.0%
Number of years projected over life of lease
The projected sales growth was based on the Group's latest
forecasts at the time of review. The key assumptions in the
cashflow pertain to revenue growth. Management have determined that
growth based on industry average growth rates and actuals achieved
historically are the best indication of growth going forward. The
Directors are confident that the Group is largely immune from the
effects of Brexit and forecasts have considered the impact of
COVID-19. Management has also performed sensitivity analysis on all
inputs to the model and noted no material sensitivities in the
model.
Based on the review, an impairment charge GBP336,356 (H1 2020:
GBP2,572,443, 31 December 2020: GBP4,019,871) was recorded for the
period.
9. Dividends
No dividends were distributable to equity holders during the
half-year ending 4 July 2021 (H1 2020: GBPnil and year ended 31
December 2020: GBPnil).
10. Share capital
Authorised, issued and Number of 1p shares
fully
paid
Half-year Half-year Year ended
ended 4 ended 30 31 December
July 2021 June 2020 2020
Brought forward 122,666,667 122,666,667 122,666,667
Issued in the period - - -
At 31 December 122,666,667 122,666,667 122,666,667
---------------------------- ---------------------------- ---------------------------- ----------------------------
Nominal value
Half-year Half-year Year ended
ended 4 ended 30 31 December
July 2021 June 2020 2020
GBP GBP GBP
Brought forward 1,226,667 1,226,667 1,226,667
Issues in the period - - -
At 31 December 1,226,667 1,226,667 1,226,667
---------------------------- ---------------------------- ---------------------------- ----------------------------
11. Cash flow from operations
Reconcilliation of (loss)/profit to cash generated
from operations
Half-year Half-year Year ended 31
ended 4 July ended 30 December 2020
2021 June 2020
GBP GBP GBP
Operating loss for the year (802,854) (4,519,566) (7,238,970)
Depreciation 1,610,395 2,011,000 4,020,265
Loss on disposal of fixed
assets 461,185 - 171,617
Impairment of assets 336,356 2,572,443 4,019,871
Share-based payment charge 25,046 26,394 14,578
Rent concessions (714,822) (302,413) (982,209)
Lease term adjustments (447,785) 117,800 (340,494)
Payroll provision - 353,012 -
Movements in working
capital
(Increase)/decrease in
inventories (16,693) 99,532 169,736
Decrease in trade and other
receivables 263,307 814,731 1,102,052
Increase in payables and
provisions 1,691,133 440,704 1,905,948
Cash from operations 2,405,268 1,613,637 2,842,394
---------------------------- ---------------------------- ---------------------------- ----------------------------
12. Adjusted EBITDA
Adjusted EBITDA was calculated from the profit/loss before
taxation adding back interest, depreciation, share-based payments
and non-recurring costs incurred in opening new sites, as
follows:
Half-year Half-year Year ended
ended 4 ended 30 31 December
July 2021 June 2020 2020
GBP GBP GBP
Operating loss (802,854) (4,519,566) (7,238,970)
Add back:
Depreciation 1,610,395 2,011,000 4,020,265
Impairment of assets 336,356 2,572,443 4,019,871
Share-based payments 25,046 26,394 14,578
Loss on disposal of fixed assets 461,185 - 171,617
Payroll provision - 353,012 353,012
EBITDA 1,630,128 443,283 1,340,373
Non-recurring costs incurred in
opening new sites 3,489 7,032 53,378
Adjusted EBITDA 1,633,617 450,315 1,393,751
---------------------------- ---------------------------- -----------------------
13. Subsequent events
In September, the Group opened a new site under the Shawa brand
name. The new site is located in Westfield shopping centre in
Shepherds Bush.
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