REG - Comptoir Group PLC - Half-year Report
22/09/2022 07:00
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RNS Number : 2800A Comptoir Group PLC 22 September 2022
22 September 2022
Comptoir Group plc
("Comptoir", the "Company" or the "Group")
Interim Results
Comptoir Group Plc (AIM: COM), the owner and/or operator of Lebanese and
Eastern Mediterranean restaurants, is pleased to announce its interim results
for the six-month period ended 3 July 2022.
Financial Highlights:
· Group revenue of £14.5m, an increase of 158.9% (Restated H1
2021: £5.6m)
· Gross profit of £11.5m, an increase of 150.0% (Restated H1 2021:
£4.6m)
· Adjusted EBITDA* before highlighted items of £3.4m, up by 112.5%
(Restated H1 2021: £1.6m)
· IFRS profit after tax pf £946k (H1 2021: £1.2m loss)
· Net cash and cash equivalents at the period end of £8.2m (H1
2021: £ 6.2m; 2 January 2022: £7.1m)
· The basic earnings per share for the period was 0.77 pence (H1
2021: basic loss per share 0.98 pence)
· Currently own and operate 21 restaurants, with a further 5
franchise restaurants.
Note that these results are impacted by Covid-19-related closures affecting
all restaurants in the Group.
*Adjusted EBITDA was calculated from the profit/(loss) before taxation adding
back interest, depreciation, share-based payments, and non-recurring costs
(note 11).
Beatrice Lafon, Non-Executive Chair, commented: "I am pleased to announce that
the first half of 2022 continued 2021's positive trajectory, with strong sales
and profit across the estate. The results highlight the Group's resilience
against the backdrop of challenges faced by the hospitality sector over the
last few years, including the cumulative and ongoing effects of Brexit, Covid,
and the war in Ukraine, which continue to weigh on costs, labour availability
and consumer footfall.
"Comptoir Group has a strong balance sheet, good cash reserves, a tight cost
control culture, a stable of strong brands, a growing digital channel and a
new board. Added to this is our unique position in the sector, celebrating
Middle Eastern Cuisine and Hospitality. The family ethos that pervades the
Comptoir team ensures we consistently deliver that Comptoir hospitality, all
of which will enable the Group to innovate and return to growth as
opportunities present themselves.
"We are cautious about the immediate-term outlook as we expect the
macroeconomic environment to worsen in the months ahead. Rising energy costs
and general inflationary pressures are likely to further impact both our costs
and our customers' disposable income, however we are optimistic about the
longer-term prospects for the business."
Enquiries:
Comptoir Group Plc
Jean Michel Orieux
Tel: 0207 486 1111
finnCap Ltd (NOMAD and broker)
Simon
Hicks
Tel: 0207 220 0500
Camarco (Media enquiries)
Jennifer Renwick Tel: 0203 757 4994
Notes to Editors
Comptoir Group PLC owns and operates 26 Lebanese restaurants, six of which are
franchised, based predominately in the UK. The flagship brand of the group,
Comptoir Libanais, is a collection of restaurants located across London and
nationwide, including cities such as Manchester, Bath, Leeds, Birmingham,
Oxford and Exeter.
The name Comptoir Libanais means Lebanese Counter and is a place where guests
can eat casually and enjoy Middle Eastern food, served with warm and friendly
hospitality, just like back home.
The Group also operates Shawa, serving traditional shawarmas through a counter
service model in Westfield and Bluewater shopping centers, Yalla-Yalla with
branches near Oxford Circus and in Soho, and entertainment venue Kenza,
located in Devonshire Square, London.
The group has expanded internationally with its franchise partners HMSHOST,
with restaurants in the Netherlands, Dubai.
Chief Executive's review
I am pleased to report a strong set of results for the six-month period to 3
July 2022. The performance of the Group's various brands and restaurants in
the first half is pleasing, despite once again being impacted by government
restrictions imposed due to the Covid-19 pandemic. "Plan B" was enforced from
the 10 December 2021 and work from home was recommended where possible from 13
December 2022. This measure was not relaxed until 26 January 2022. At this
point, our loyal customers began to return for the family hospitality that
makes Comptoir unique.
The trading performance has been strong thanks to the hard work of our teams,
with the Group comfortably outperforming forecasts and the whole estate has
contributed to the half-year performance. London has continued to improve week
on week and it is particularly pleasing to see those sites in office or
tourist areas returning close to 2019 sales levels.
During the period a number of exceptional challenges were presented to the
business. In April, government support in respect of business rates and the
reduced VAT rate ended. At the same time, the National Living Wage (NLW)
increased from £8.91 to £9.50, as did employers' National Insurance which
rose by 1.25%. In February, Russia entered a war with Ukraine which has had
a significant impact on utility and food prices, resulting in the current cost
of living crisis. These inflationary pressures will remain throughout the
remainder of the year and the business will work to mitigate them. These
issues will not be solved without strong relationships with our key
stakeholders whose support over the last two years has been paramount.
There is an opportunity for the Group to add to its site pipeline thanks to
the reduction in competition for premium sites, coupled with our strong
relationships with our current landlords. Accordingly, we intend to invest in
not only Comptoir Libanais but also expand our QSR Shawa brand. As well as
managed site growth, we continue to expand our footprint with our franchise
partners and during the period we reopened our Dubai restaurant as well as a
new site in Stansted Airport.
Financial Performance
As already noted, the period was impacted once again by external factors,
albeit to a lesser extent than the previous two years. The impact of Covid-19
"Plan B" notwithstanding, the half-year results remained strong.
The total revenue for the Group for the half-year was £14.5m (Restated H1
2021 £5.6m) and the adjusted EBITDA profit of £3.4m (H1 2021 £1.6m) driven
by strong trading and strong cost control across the business. The IFRS profit
after tax was £946k (H1 2019: £1.2m loss).
The Group has also taken account of the amendment to IFRS 16 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 £0.15m in the period.
During the period, we closed one site, but we envisage there will be no more
closures across the Group this year. We will make these final decisions at the
appropriate time and only if it is in the best interest of the Group.
A summary of the financial performance for the half year is shown in the table
below:
Post IFRS 16 Pre IFRS 16 Post IFRS 16 Pre IFRS 16 Post IFRS 16 Pre IFRS 16
3 July 3 July Restated Restated 2 January 2022 2 January 2022
2022
2022
4 July 2021
4 July 2021
£ £ £ £ £ £
Revenue 14,501,725 14,501,725 5,588,822 5,588,822 20,711,257 20,711,257
Adjusted EBITDA:
Profit/(loss) before tax 1,306,906 1,098,348 (1,202,268) (1,246,555) 1,525,167 1,259,709
Add back:
Depreciation 1,628,502 540,612 1,610,395 701,898 3,659,196 1,372,645
Finance costs 409,860 41,319 399,414 - 822,094 21,057
Impairment of assets - - 336,356 266,255 336,356 266,255
EBITDA 3,345,268 1,680,279 1,143,897 (278,402) 6,342,813 2,919,666
Share-based payments expense 14,450 14,450 25,046 25,046 32,436 32,436
Restaurant opening costs 20,040 20,040 3,489 3,489 10,489 10,489
Loss on disposal of fixed assets - - 461,185 461,185 38,098 38,098
Adjusted EBITDA 3,379,758 1,714,769 1,633,617 211,318 6,423,836 3,000,689
Team
We continue to prioritise our team's well-being. Whilst the impact of Covid
has lessened, the Group has improved the benefits available to the staff to
ensure a healthy balance in respect of work and home where possible.
Victoria Gunter joined as Head of Procurement during the period. Victoria
has a strong 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.
Outlook
Trading has continued to improve week to week and the overall outperformance
of the Group is encouraging. The board has confidence in the prospects for the
remainder of the year and into 2023.
We have seen performance improve in our London sites, which naturally remained
impacted by the lower number of office workers and tourists. The regional
sites continue to perform well. More importantly, all 21 sites are making a
positive contribution at the profit level since reopening.
The Group has a strong base to continue to operate from as we return to a new
normal, and we look to grow faster in the near future.
Jean Michel Orieux
Interim CEO
21 September 2022
Consolidated statement of comprehensive income
For the half-year ended 3 July 2022
Notes Half-year ended 3 July 2022 Restated* Period ended 2 January 2022
Half-year ended 4 July 2021
£ £ £
Revenue 14,501,725 5,588,822 20,711,257
Cost of sales (2,994,130) (960,365) (3,773,721)
Gross profit 11,507,595 4,628,457 16,937,536
Distribution expenses (5,308,893) (2,486,441) (9,318,203)
Administrative expenses (4,741,711) (6,731,091) (9,362,286)
Other income 259,775 3,786,221 4,090,214
Operating profit/(loss) 3 1,716,766 (802,854) 2,347,261
Finance costs (409,860) (399,414) (822,094)
Profit/(loss) before tax 1,306,906 (1,202,268) 1,525,167
Taxation (charge)/credit (361,081) - 118,288
Profit/(loss) for the year 945,825 (1,202,268) 1,643,455
Other comprehensive income - - -
Total comprehensive profit/(loss) for the year 945,825 (1,202,268) 1,643,455
Basic earnings/(loss) per share (pence) 6 0.77 (0.98) 1.34
Diluted earnings/(loss) per share (pence) 6 0.77 (0.98) 1.34
Notes Half-year ended 3 July 2022 Restated* Period ended 2 January 2022
Half-year ended 4 July 2021
Adjusted EBITDA:
Profit/(loss) before tax - as above 1,306,906 (1,202,268) 1,525,167
Add back:
Depreciation 8 1,628,502 1,610,395 3,659,196
Finance costs 409,860 399,414 822,094
Impairment of assets 8 - 336,356 336,356
EBITDA 3,345,268 1,143,897 6,342,813
Share-based payments expense 3 14,450 25,046 32,436
Restaurant opening costs 3 20,040 3,489 10,489
Loss on disposal of fixed assets - 461,185 38,098
Adjusted EBITDA 3,379,758 1,633,617 6,423,836
All the above results are derived from continuing operations.
Consolidated balance sheet
At 3 July 2022
Notes 3 July 2022 4 July 2021 2 January 2022
£ £ £
Non-current assets
Intangible assets 7 55,267 55,267 55,267
Property, plant and equipment 8 6,970,576 7,425,908 7,232,869
Right-of-use assets 8 14,872,490 16,098,264 15,960,380
Deferred tax asset - 292,409 106,659
21,898,333 23,871,848 23,355,175
Current asset
Inventories 517,775 441,364 465,890
Trade and other receivables 1,627,408 837,619 698,994
Cash and cash equivalents 10,738,261 9,174,260 9,867,799
12,883,444 10,453,243 11,032,683
Total assets 34,781,777 34,325,091 34,387,858
Current liabilities
Borrowings (600,000) (555,000) (600,000)
Trade and other payables (6,924,257) (8,209,594) (6,131,539)
Lease liabilities (2,380,659) (2,331,800) (2,387,104)
Current tax liabilities (104,839) (45,817) (64,480)
(10,009,755) (11,142,211) (9,183,123)
Non-current liabilities
Borrowings (1,900,000) (2,445,000) (2,200,000)
Provisions for liabilities (735,686) (841,663) (859,414)
Lease liabilities (16,811,910) (18,306,833) (17,995,233)
Deferred tax liability (214,063) (292,409) -
(19,661,659) (21,885,905) (21,054,647)
Total liabilities (29,671,414) (33,028,116) (30,237,770)
Net assets 5,110,363 1,296,975 4,150,088
Equity
Share capital 9 1,226,667 1,226,667 1,226,667
Share premium 10,050,313 10,050,313 10,050,313
Other reserves 144,172 122,332 129,722
Retained losses (6,310,789) (10,102,337) (7,256,614)
Total equity - attributable to equity shareholders of the company 5,110,363 1,296,975 4,150,088
Consolidated statement of changes in equity
For the half-year ended 3 July 2022
Notes Share capital Share premium Other reserves Retained losses Total equity
£ £ £ £ £
At 2 January 2022 1,226,667 10,050,313 129,722 (7,256,614) 4,150,088
Total comprehensive income
Profit for the period - - - 945,825 945,825
Transactions with owners
Share-based payments - - 14,450 - 14,450
At 3 July 2022 1,226,667 10,050,313 144,172 (6,310,789) 5,110,363
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 2021 1,226,667 10,050,313 97,286 (8,900,069) 2,474,197
Total comprehensive income
Profit for the year - - - 1,643,455 1,643,455
Transactions with owners
Share-based payments - - 32,436 - 32,436
At 2 January 2022 1,226,667 10,050,313 129,722 (7,256,614) 4,150,088
Consolidated statement of cash flows
For the half-year ended 3 July 2022
Notes Half-year ended 3 July 2022 Half-year ended 4 July 2021 Period ended 2 January 2022
£ £ £
Operating activities
Cash inflow from operations 10 2,897,522 2,405,268 4,675,786
Interest paid (41,319) - (21,057)
Tax paid - - 30,292
Net cash from operating activities 2,856,203 2,405,268 4,685,021
Investing activities
Purchase of property, plant & equipment 8 (278,319) (163,949) (436,272)
Net cash used in investing activities (278,319) (163,949) (436,272)
Financing activities
Payment of lease liabilities (1,407,422) (900,735) (2,014,626)
Bank loan repayments (300,000) - (200,000)
Net cash used from financing activities (1,707,422) (900,735) (2,214,626)
Increase in cash and cash equivalents 870,462 1,340,584 2,034,123
Cash and cash equivalents at beginning of year 9,867,799 7,833,676 7,833,676
Cash and cash equivalents at end of year 10,738,261 9,174,260 9,867,799
Notes to the financial information
For the half-year ended 3 July 2022
1. Basis of preparation
The consolidated financial information for the half-year ended 3 July 2022,
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 period ending 2
January 2022. These accounting policies are based on the UK-adopted
International Financial Reporting Standards ("IFRS") and International
Financial Reporting Interpretation Committee ("IFRIC") interpretations. The
consolidated financial information for the half-year ended 3 July 2022 has
been prepared in accordance with IAS 34: 'Interim Financial Reporting', as
adopted by the UK, and under the historical cost convention.
The financial information relating to the half-year ended 3 July 2022 is
unaudited and does not constitute statutory financial statements as defined in
section 434 of the Companies Act 2006. The comparative figures for the period
ended 2 January 2022 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 period ended 2 January 2022 has
been filed with the Registrar of Companies.
The Group's financial risk management objectives and policies are consistent
with those disclosed in the period ended 2 January 2022 annual report and
accounts.
The half-yearly report was approved by the board of directors on 16 September
2022. The half-yearly report is available on the Comptoir Libanais website,
www.comptoirlibanais.com (http://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 3 July 2022 are consistent with
those followed in the preparation of the Group's annual consolidated financial
statements for the year ended 2 January 2022.
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 2 January 2022. These
amendments have not had any material impact on the amounts reported for the
current and prior years.
Standard or
Interpretation
Effective Date
IAS 37 Onerous Contracts - Cost of Fulfilling a Contract
1 January 2022
Annual improvements to IFRS Standards
2018-2020
1 January 2022
IAS 16 Property, Plant and Equipment: Proceeds before Intended Use
1 January 2022
IFRS 3 Reference to the Conceptual
Framework
1 January 2022
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
IFRS 17 Insurance Contracts
1 January 2023
IAS 1 Classification of liabilities as current or
non-current
1 January 2023
IAS 1 Disclosure of Accounting Policies
1 January 2023
IAS 8 Definition of Accounting Estimate
1January 2023
IAS 12 Deferred Tax Related to Assets and Liabilities Arising from a Single
Transaction 1 January 2023
Initial Application of IFRS 17 and IFRS 9 - Comparative Information
1 January 2023
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. Please
refer to note 8 for further details on impairments.
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.
Restatement of prior year allocation of expenses
During the period ended 2 January 2022, the directors reclassified a number of
expense items in order to ensure that the nature of the costs were included in
the most appropriate profit or loss heading. The reclassifications were
incorporated in the Group consolidated financial statements for the period
ending 2 January 2022 and therefore the prior period statement of
comprehensive income for the half-year ended 4 July 2021 has been restated to
reflect this and ensure amounts are comparable.
The extract below summarises the total amounts that have been reclassified:
Half-year ended 4 July 2021 Restated amount Restated
Half-year ended 4 July 2021
£ £ £
Revenue 5,670,300 (81,478) 5,588,822
Cost of sales (1,393,582) 433,217 (960,365)
Gross profit 4,276,718 351,739 4,628,457
Distribution expenses (1,228,118) (1,258,323) (2,486,441)
Administrative expenses (7,675,722) 944,631 (6,731,091)
Other income 3,824,268 (38,047) 3,786,221
Operating loss (802,854) - (802,854)
Finance costs (399,414) - (399,414)
Profit/(loss) before tax (1,202,268) - (1,202,268)
Taxation charge - - -
Profit/(loss) for the period (1,202,268) - (1,202,268)
Other comprehensive income - - -
Total comprehensive income/(loss) for the period (1,202,268) - (1,202,268)
3. Group operating profit/(loss)
Half-year ended 3 July 2022 Half-year ended 4 July 2021 Period ended 2 January 2022
This is stated after (crediting)/charging: £ £ £
Variable lease charges 385,208 235,579 613,531
Rent concessions (150,887) (714,822) (1,284,744)
Lease term modifications - (447,785) (444,359)
Share-based payments expense (note 5) 14,450 25,046 32,436
Restaurant opening costs 20,040 3,489 10,489
Depreciation of property, plant and equipment (note 8) 1,628,502 1,610,395 3,659,196
Impairment of assets (note 7 & 8) - 336,356 336,356
Loss on disposal of fixed assets - 461,186 38,098
Auditors' remuneration - - 44,500
Half-year ended 3 July 2022 Half-year ended 4 July 2021 Period ended 2 January 2022
£ £ £
Pre-opening costs 20,040 3,489 10,489
20,040 3,489 10,489
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 £0.1025, which all carry a three-year
vesting period and the term to expiration is ten years from the date of grant
(4 July 2018).
On 21 May 2021, the Group established another 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 £0.0723, which all carry a
three-year vesting period and the term to expiration is ten years from the
date of grant (21 May 2021).
The total share-based payment charge for the period was £14,450 (H1 2021:
£25,046, 2 January 2022: £32,436).
6. Earnings/(loss) per share
The Company had 122,666,667 ordinary shares of £0.01 each in issue at 3 July
2022. The basic and diluted earnings/(loss) per share figures, is based on the
weighted average number of shares in issue during the periods. The basic and
diluted earnings/(loss) per share figures are set out below.
Half-year ended 3 July 2022 Half-year ended 4 July 2021 Period ended 2 January 2022
£ £ £
Profit/(loss) attributable to shareholders 945,825 (1,202,268) 1,643,455
Weighted average number of shares Number Number Number
For basic earnings/(loss) per share 122,666,667 122,666,667 122,666,667
Adjustment for options outstanding 558,126 - -
For diluted earnings/(loss) per share 123,224,793 122,666,667 122,666,667
Earning/(loss) per share: Pence per share Pence per share Pence per share
Basic (pence)
From profit/(loss) for the year 0.77 (0.98) 1.34
Diluted (pence)
From profit/(loss) for the year 0.77 (0.98) 1.34
The basic and diluted earnings/(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. The shares were not 'in the money' as at
the half-year ended 4 July 2021 or period ended 2 January 2022 and
consequently would be antidilutive. Therefore, no adjustment was made in
respect of the share options outstanding to determine the diluted number of
options for these periods.
7. Intangible assets
Goodwill Total
Cost £ £
At 2 January 2022 89,961 89,961
Additions - -
At 3 July 2022 89,961 89,961
Accumulated amortisation and impairment
At 2 January 2022 (34,694) (34,694)
Amortised during the year - -
Impairment during the year - -
At 3 July 2022 (34,694) (34,694)
Net Book Value as at 3 July 2022 55,267 55,267
Net Book Value as at 4 July 2021 55,267 55,267
Net Book Value as at 2 January 2022 55,267 55,267
Intangible fixed assets consist of goodwill from the acquisition of Agushia
Limited, which included the Yalla Yalla brand. 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 use assets Leasehold land and buildings Plant and machinery Fixture, fittings & equipment Motor vehicles Total
Cost £ £ £ £ £ £
At 2 January 2022 28,644,937 10,419,010 4,702,567 2,843,966 38,310 46,648,790
Additions - - 196,926 81,393 - 278,319
At 3 July 2022 28,644,937 10,419,010 4,899,493 2,925,359 38,310 46,927,109
Accumulated depreciation and impairment
At 2 January 2022 (12,684,557) (6,208,028) (3,008,896) (1,548,952) (5,108) (23,455,541)
Depreciation during the year (1,087,890) (304,032) (152,952) (83,628) - (1,628,502)
Impairment during the year - - - - - -
At 3 July 2022 (13,772,447) (6,512,060) (3,161,848) (1,632,580) (5,108) (25,084,043)
Net book value
At 3 July 2022 14,872,490 3,906,950 1,737,645 1,292,779 33,202 21,843,066
At 4 July 2021 16,098,264 4,482,614 1,601,704 1,298,912 42,678 23,524,172
At 2 January 2022 15,960,380 4,210,982 1,693,671 1,295,014 33,202 23,193,249
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.
8. Property, plant and equipment (continued)
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:
Growth rate 0%
Discount rate 5.3%
Number of years projected over life of lease
The value-in-use figure has been calculated using the expected annual
cashflows of the Group from the latest forecasts at the time of review. In
producing the forecasts, the Directors have considered the impact of current
inflation levels, rising wage costs as well as the potential risk of
recession.
The growth rate is based on a combination of industry average growth rates,
actual results achieved historically and the current economic conditions.
Sensitivity analysis was performed on the forecasted cashflows as well as the
growth rate and only a significant reduction in cashflows would result in a
material impairment charge. Therefore, based on the impairment review and
sensitivity analysis carried out, an impairment charge of £nil (H1 2021:
£336,356, 2 January 2022: £336,356) was recorded for the period.
9. Share capital
Authorised, issued and fully paid Number of shares
Half-year ended 3 July 2022 Half-year ended 4 July 2021 Period ended 2 January 2022
Brought forward 122,666,667 122,666,667 122,666,667
Issued in the period - - -
122,666,667 122,666,667 122,666,667
Nominal value
Half-year ended 3 July 2022 Half-year ended 4 July 2021 Period ended 2 January 2022
£ £ £
Brought forward 1,226,667 1,226,667 1,226,667
Issues in the period - - -
1,226,667 1,226,667 1,226,667
10. Cash flow from operations
Reconciliation of profit/(loss) to cash generated from operations:
Half-year ended 3 July 2022 Half-year ended 4 July 2021 Period ended 2 January 2022
£ £ £
Operating profit/(loss) for the year 1,716,766 (802,854) 2,347,261
Depreciation 1,628,502 1,610,395 3,659,196
Loss on disposal of fixed assets - 461,185 38,098
Impairment of assets - 336,356 336,356
Share-based payment charge 14,450 25,046 32,436
Rent concessions (150,887) (714,822) (1,284,744)
Lease term modifications - (447,785) (444,359)
Movements in working capital
Increase in inventories (51,885) (16,693) (41,219)
(Increase)/decrease in trade and other receivables (928,416) 263,307 401,934
Increase/(decrease) in payables and provisions 668,992 1,691,133 (369,173)
Cash generated from operations 2,897,522 2,405,268 4,675,786
11. 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 ended 3 July 2022 Half-year ended 4 July 2021 Period ended 2 January 2022
£ £ £
Operating profit/(loss) 1,716,766 (802,854) 2,347,261
Add back:
Depreciation 1,628,502 1,610,395 3,659,196
Impairment of assets - 336,356 336,356
Share-based payments 14,450 25,046 32,436
Loss on disposal of fixed assets - 461,185 38,098
EBITDA 3,359,718 1,630,128 6,413,347
Non-recurring costs incurred in opening new sites 20,040 3,489 10,489
Adjusted EBITDA 3,379,758 1,633,617 6,423,836
12. Subsequent events
On 1 August 2022, a new board was formed. The existing CEO and chairman having
served for over 10 years, resigned. They were replaced by a new
Non-Executive Chair, Dr Béatrice Lafon and a Non-Executive director, Mr Jean
Michel Orieux. Mr Orieux is acting as interim CEO whilst the Group conducts a
search for a permanent successor. The CFO and the Creative Director/Founder
continue to serve on the board.
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