REG - Comptoir Group PLC - Interim Results
17/09/2024 07:00
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RNS Number : 4056E Comptoir Group PLC 17 September 2024
Comptoir Group Plc
("Comptoir", the "Group" or the "Company")
Interim Results
Comptoir Group Plc (AIM: COM), the owner and operator of Lebanese, Middle
Eastern and North African inspired restaurants is pleased to announce its
interim results for the six months ending 30 June 2024.
Financial Highlights:
· Group revenue of £15.9m, an increase of 7.4% on the same period
last year (H1 2023: £14.8m)
· System sales of £20.2m, an increase of 7.4% on the same period
last year (H1 2023 £18.8m)
· Gross profit of £12.7m, an increase of 10.4% on the same period
last year (H1 2023: £11.5m)
· Adjusted EBITDA* loss before highlighted items of £0.6m (H1
2023: £0.3m loss)
· IFRS loss after tax of £1.7m (H1 2023: £0.8m loss)
· Net cash and cash equivalents at the period end of £4.9m (H1
2023: £7.6m, 31 December 2023: £7.0m)
· The basic loss per share for the period was 1.42 pence (H1 2023:
basic loss per share 0.64 pence)
Operational Highlights:
· The Group opened a new flagship restaurant in Southbank London
and brought Cheshire Oaks Outlet Centre back into the managed portfolio from
its franchisee. Yalla Yalla Soho closed in February 2024 and subsequent to the
half year Ashford Outlet Centre franchise restaurant closed.
· During the half year the Group has also opened two new franchised
restaurants in major international airports, Shawa in Abu Dhabi and Comptoir
Libanais, with a new partner, in Milan.
· At the half year the Group owns and operates 22 equity
restaurants, with a further 7 franchise restaurants across two partners.
· Subsequent to the half year the Group welcomed James Fisher as
Finance Director and member of the Board. This followed the appointment of Ali
Aneizi as Non-Executive Director and Jean-Michel Orieux to Non-Executive Chair
in June 2024.
Current trading and Outlook:
Despite economic challenges and rising costs, the Group is seeing positive
results from its strategic initiatives. The Group is confident that its
proactive measures will lead to improved performance in the second half of the
year and beyond, with trading since the half year in line with expectations.
There does however remain an element of uncertainty with regard to the impact
of the new government, particularly with respect to planned future National
Minimum Wage increases and business rates reform. The upcoming Budget in
October will hopefully provide some further clarity.
The Group aims to leverage the investments it has made to deliver enhanced
EBITDA and cashflows. With a full leadership team now in place, the Board has
confidence in the prospects for the longer term.
*Adjusted EBITDA was calculated from the pre-IFRS 16 loss after taxation
adding back interest, tax, depreciation, share-based payments, and other
non-cash and non-recurring costs.
Enquiries:
Comptoir Group plc 0207 486 1111
Jean-Michel Orieux, Non-Executive Chair
Nick Ayerst, CEO
Cavendish Capital Markets Limited (Nominated Adviser and Broker) 020 7220 0500
Corporate Finance: Carl Holmes, Abigail Kelly
Corporate Broking: Charlie Combe
About Comptoir Group
Comptoir Group PLC owns and operates 28 Lebanese restaurants, six of which are
franchised, based predominately in the UK. The flagship brand of the group,
Comptoir Libanais, is a collection of 22 restaurants located across London,
nationwide and international Travel Hubs, including cities such as Manchester,
Bath, Birmingham, Oxford, Dubai and Milan.
The name Comptoir Libanais means Lebanese Counter and is a place where guests
can eat casually and enjoy Middle Eastern and North African food, served with
warm and friendly hospitality and a bright vibrant environment.
The Group also operates Shawa, serving traditional shawarma through a counter
service model in Westfield and Bluewater shopping centres and Abu Dhabi,
Yalla-Yalla with a branch near Oxford Circus, and entertainment venue Kenza,
located in Devonshire Square, London.
The group has expanded internationally with its franchise partners Avolta and
Areas, with restaurants in the Netherlands, Qatar and UAE and Italy.
Chairman's review
In my first statement as Chair, I am able to report on the continued evolution
and rebuilding of the Group. Our core estate performed in line with our
expectations delivering a like for like revenue growth of 0.9% and an improved
gross profit. During this period, we strategically invested in our business to
strengthen our competitive position. This included:
· Our Teams: Enhancing our teams' capabilities to deliver
exceptional guest experiences.
· Our Products: Reintroducing beloved classics while introducing
exciting new flavours to cater to evolving customer preferences.
· Brand Experience: Refreshing our physical presence through estate
refurbishments and expanding our network with new locations.
The Group maintains a cash balance of £4.9m at the half year after our
significant investments, which provides us with a platform from which we can
continue our ongoing work to solidify the foundations of the business before
moving on to revisiting our growth plans. Following these investments we
remain focussed on protecting and growing our cash position through improved
profitability from our restaurants and careful cost management.
The half year outturn is set against a backdrop of wider uncontrollable and
adverse factors, which continued through the first half year of 2024, namely
the ongoing macroeconomic uncertainty caused by the cost-of-living crisis, its
impact on people's disposable income and the recent years of National Minimum
Wage growth. We continue to address underperforming restaurants and will take
the appropriate action with these, and our cost base overall.
We remain optimistic about the longer-term prospects of the Group, given our
unique offering, our teams, the balance of our portfolio, our brands, the mix
of equity and franchised stores and obsession with creating a casual relaxed
family orientated dining experience. However, we must solidify our business
and ensure we have the right platform in place before we can accelerate our
growth.
Chief executive's review
I am pleased to report a solid H1 against a backdrop of sector volatility.
This is a testament to the hard work of our staff across the business and I
would like to thank them for their efforts during the period.
Financial Performance Half-Year:
The total revenue for the Group for the half-year was £15.9m (H1 2023:
£14.8m) and the adjusted EBITDA loss was £0.6m (H1 2023: £0.3m loss). The
Group controls remained strong but a combination of ongoing cost pressures and
a conscious decision to invest in the labour of our new sites post opening has
impacted profitability. Group EBITDA fell marginally compared to the same
period last year, largely due to favourable delayed rent reviews and lease
extensions creating artificially low fixed costs in the prior year. The IFRS
loss after tax was £1.7m (H1 2023: £0.8m loss). The Group cash balance at
the half-year was £4.9m (H1 2023: £7.6m) after investment in new sites and
refurbishments during the period and continued repayment of our CBIL loan. The
outstanding balance on the CBIL at the half year was £1.3m (H1 2023: £1.9m).
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
30 June 30 June 2 July 2 July 31 December 2023 31 December 2023
2024
2024
2023
2023
£ £ £ £ £ £
Revenue 15,907,238 15,907,238 14,801,949 14,801,949 31,480,609 31,480,609
Adjusted EBITDA:
Loss after tax (1,738,054) (1,318,045) (780,460) (545,243) (1,599,431) (1,365,090)
Add back:
Finance costs 678,955 58,550 497,567 67,731 1,019,154 136,551
Finance income (76,654) (76,654) - - (94,147) (94,147)
Taxation (469,594) (469,594) (496,100) (496,100) (45,674) (45,674)
Depreciation 1,928,133 686,468 1,655,805 561,532 3,328,567 1,124,210
Impairment of assets - - - - 107,316 -
EBITDA 322,786 (1,119,275) 876,812 (412,080) 2,715,785 (244,150)
Share-based payments (credit) / expense (12,510) (12,510) 10,006 10,006 30,541 30,541
Loss on disposal of fixed assets 123,479 123,479 - - 8,940 8,940
Exceptional legal fees 103,357 103,357 23,045 23,045 101,145 101,145
Restaurant opening costs 331,996 331,996 - - 88,886 88,886
Restaurant closing costs 5,196 5,196 75,657 75,657 76,649 76,649
Dilapidations 15,723 15,723 16,493 16,493 - -
Adjusted EBITDA 890,027 (552,034) 1,002,013 (286,879) 3,021,946 62,011
The trading performance of our core estate has seen like for like revenue
growth on our equity sites of 0.9% and an increase in Gross profit. Despite
the backdrop of a weak economic environment and continuing cost pressures we
remain confident in our strategy to grow sales and EBITDA together with
maintaining a healthy cash position.
In the first half of the year we continued to improve the quality of our food
whilst also improving margins and maintaining strong value for money scores.
This sits alongside our highest NPS ratings at over 75, a testament to our
teams in each restaurant. These improvements were alongside a busy period of
new openings and I thank the team for everything they have done in the half
year. Our full focus is on our like for like estate and ensuring all
investments realise returns at the expected rate.
With a full senior leadership team now in place we are focussed on delivery
against our 5 strategic pillars
· Culture: Fostering a high-performance culture that empowers our
team and aligns with our values.
· Customer Experience: Enhancing guest satisfaction through digital
innovations and personalised offerings.
· Efficiency: Optimising operations and costs while maintaining our
value proposition.
· Financial Health: Ensuring strong returns on investments and
aligning future expenditures with cash generation.
· Growth: Expanding our footprint through organic growth and
strategic acquisitions.
Current trading and Outlook:
Despite economic challenges and rising costs, the Group is seeing positive
results from its strategic initiatives. The Group is confident that its
proactive measures will lead to improved performance in the second half of the
year and beyond, with trading since the half year in line with expectations.
There does however remain an element of uncertainty with regard to the impact
of the new government, particularly with respect to planned future National
Minimum Wage increases and business rates reform. The upcoming Budget in
October will hopefully provide some further clarity.
The Group aims to leverage the investments it has made to deliver enhanced
EBITDA and cashflows. With a full leadership team now in place, the Board has
confidence in the prospects for the longer term.
Nick Ayerst
Chief Executive Officer
17 September 2024
Consolidated statement of comprehensive income
For the half-year ended 30 June 2024
Notes Half-year ended 30 June 2024 Half-year ended 2 July 2023 Period ended 31 December 2023
£ £ £
Revenue 15,907,238 14,801,949 31,480,609
Cost of sales (3,183,004) (3,264,510) (6,760,622)
Gross profit 12,724,234 11,537,439 24,719,987
Distribution expenses (6,931,378) (6,077,722) (12,624,578)
Administrative expenses (7,423,787) (6,246,967) (12,866,121)
Other income 25,584 8,257 50,614
Operating loss 3 (1,605,347) (778,993) (720,098)
Finance costs (678,955) (497,567) (1,019,154)
Finance income 76,654 - 94,147
Loss before tax (2,207,648) (1,276,560) (1,645,105)
Taxation credit 469,594 496,100 45,674
Loss for the year (1,738,054) (780,460) (1,599,431)
Other comprehensive income - - -
Total comprehensive loss for the year (1,738,054) (780,460) (1,599,431)
Basic loss per share (pence) 6 (1.42) (0.64) (1.30)
Diluted loss per share (pence) 6 (1.41) (0.64) (1.30)
All the above results are derived from continuing operations.
Consolidated balance sheet
At 30 June 2024
Notes 30 June 2024 2 July 2023 31 December 2023
£ £ £
Non-current assets
Intangible assets 7 7,284 29,134 7,284
Property, plant and equipment 8 8,216,648 6,536,519 6,771,722
Right-of-use assets 8 15,257,254 12,607,187 13,008,673
Deferred tax asset 197,651 224,133 -
23,678,837 19,396,973 19,787,679
Current asset
Inventories 471,182 526,071 521,488
Trade and other receivables 1,775,201 1,379,568 1,344,710
Cash and cash equivalents 4,850,040 7,640,868 7,048,757
7,096,423 9,546,507 8,914,955
Total assets 30,775,260 28,943,480 28,702,634
Current liabilities
Borrowings (600,000) (600,000) (600,000)
Trade and other payables (7,400,107) (5,793,557) (5,964,996)
Lease liabilities (2,653,367) (1,165,194) (2,159,265)
(10,653,474) (7,558,751) (8,724,261)
Non-current liabilities
Borrowings (700,000) (1,300,000) (1,000,000)
Provisions for liabilities (404,871) (373,347) (389,147)
Lease liabilities (17,582,600) (15,728,067) (15,178,055)
Deferred tax liability - - (226,292)
(18,687,471) (17,401,414) (16,793,494)
Total liabilities (29,340,945) (24,960,165) (25,517,755)
Net assets 1,434,315 3,983,315 3,184,879
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 163,130 155,105 175,640
Retained losses (10,005,795) (7,448,770) (8,267,741)
Total equity 1,434,315 3,983,315 3,184,879
Consolidated statement of changes in equity
For the half-year ended 30 June 2024
Notes Share capital Share premium Other reserves Retained losses Total equity
£ £ £ £ £
At 1 January 2024 1,226,667 10,050,313 175,640 (8,267,741) 3,184,879
Total comprehensive income
Loss for the period 3 - - - (1,738,054) (1,738,054)
Transactions with owners
Share-based payments 5 - - (12,510) - (12,510)
At 30 June 2024 1,226,667 10,050,313 163,130 (10,005,795) 1,434,315
At 2 January 2023 1,226,667 10,050,313 145,099 (6,668,310) 4,753,769
Total comprehensive loss
Loss for the period 3 - - - (780,460) (780,460)
Transactions with owners
Share-based payments 5 - - 10,006 - 10,006
At 2 July 2023 1,226,667 10,050,313 155,105 (7,448,770) 3,983,315
At 2 January 2023 1,226,667 10,050,313 145,099 (6,668,310) 4,753,769
Total comprehensive income
Loss for the period 3 - - - (1,599,431) (1,599,431)
Transactions with owners
Share-based payments 5 - - 30,541 - 30,541
At 31 December 2023 1,226,667 10,050,313 175,640 (8,267,741) 3,184,879
Consolidated statement of cash flows
For the half-year ended 30 June 2024
Notes Half-year ended 30 June 2024 Half-year ended 2 July 2023 Period ended 31 December 2023
£ £ £
Operating activities
Cash inflow from operations 10 2,029,406 81,028 2,287,882
Interest paid (58,550) (67,731) (136,551)
Interest received 76,654 - 94,146
Tax received 45,650 - -
Net cash from operating activities 2,093,160 13,297 2,245,477
Investing activities
Purchase of property, plant & equipment 8 (2,212,370) (386,701) (1,279,900)
Net cash used in investing activities (2,212,370) (386,701) (1,279,900)
Financing activities
Payment of lease liabilities (1,779,507) (1,616,051) (3,247,143)
Bank loan repayments (300,000) (300,000) (600,000)
Net cash used from financing activities (2,079,507) (1,916,051) (3,847,143)
Decrease in cash and cash equivalents (2,198,717) (2,289,455) (2,881,566)
Cash and cash equivalents at beginning of period 7,048,757 9,930,323 9,930,323
Cash and cash equivalents at end of period 4,850,040 7,640,868 7,048,757
Notes to the financial information
For the half-year ended 30 June 2024
1. Basis of preparation
The consolidated financial information for the half-year ended 30 June 2024,
has been prepared in accordance with the accounting policies the Group applied
in the Company's latest annual audited financial statements for the period
ended 31 December 2023. 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 30 June 2024 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 30 June 2024 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 31 December 2023 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 31 December 2023 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 31 December 2023 annual report and
accounts.
The half-yearly report was approved by the board of directors on 17 September
2024. 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, 6th Floor, Winchester House, 259-269 Old Marylebone
Road, London, NW1 5RA.
2. Changes in accounting policies
The accounting policies adopted in the preparation of the consolidated
financial information for the half-year ended 30 June 2024 are consistent with
those followed in the preparation of the Group's annual consolidated financial
statements for the period ended 31 December 2023.
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 2024. These
amendments have not had any material impact on the amounts reported for the
current and prior years.
Standard or
Interpretation
Effective Date
IFRS 16 - Lease Liability in a Sale and
Leaseback
1 January 2024
IAS 1 - Non-current Liabilities with
Covenants
1 January 2024
IAS 1 - Classification of Liabilities as Current or
Non-current
1 January 2024
IAS 7 - Supplier Finance
Arrangements
1 January 2024
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
IAS 21 - Lack of
Exchangeability
1 January 2025
IFRS 18 - Presentation and Disclosure in Financial
Statements
1 January 2027
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 period 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 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 have 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.
3. Group operating loss
Half-year ended Half-year ended Period ended
30 June 2024 2 July 2023 31 December 2023
This is stated after (crediting)/charging: £ £ £
Variable lease charges 289,953 347,069 624,812
Share-based payments (credit) / expense (note 5) (12,510) 10,006 30,541
Depreciation of property, plant and equipment (note 8) 1,928,133 1,655,805 3,328,567
Exceptional legal and professional fees 103,357 23,045 101,145
Loss on disposal of fixed assets 123,479 - 8,940
Impairment of assets (note 7 & 8) - - 107,316
Rent concessions - - (21,062)
Lease term modifications - - 132,786
Auditors' remuneration - - 110,000
Half-year ended Half-year ended Period ended
30 June 2024 2 July 2023 31 December 2023
£ £ £
Restaurant opening costs 331,996 - 88,886
Restaurant closing costs 5,196 75,657 76,649
Dilapidations 15,723 16,493 32,835
352,915 92,150 198,370
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
exercise price of all options is £0.1025 and the term to expiration is 3
years from the date of grant. All options have the same vesting conditions
attached to them.
On 21 May 2021 under the existing CSOP, 3,245,000 share options were granted
to key employees. The exercise price of all options is £0.0723 and the term
to expiration is 3 years from the date of grant. All options have the same
vesting conditions attached to them.
On 17 April 2023 under the existing CSOP, 2,900,000 share options were granted
to key employees. The exercise price of all options is £0.0557 and the term
to expiration is 3 years from the date of grant. All options have the same
vesting conditions attached to them.
The total share-based payment credit for the period was £12,510 (H1 2023:
£10,006 charge, 31 December 2023: £30,541 charge).
6. Earnings/(loss) per share
The Company had 122,666,667 ordinary shares of £0.01 each in issue at 30 June
2024. 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 Half-year ended Period ended
30 June 2024 2 July 2023 31 December 2023
£ £ £
Loss attributable to shareholders (1,738,054) (780,460) (1,599,431)
Weighted average number of shares Number Number Number
For basic loss per share 122,666,667 122,666,667 122,666,667
Adjustment for options outstanding 449,740 - 267,293
For diluted loss per share 123,116,407 122,666,667 122,933,960
Earning/(loss) per share: Pence per share Pence per share Pence per share
Basic (pence)
From loss for the year (1.42) (0.64) (1.30)
Diluted (pence)
From loss for the year (1.41) (0.64) (1.30)
6. Earnings/(loss) per share (continued)
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. Any shares options that were not 'in the
money' as at the half-year ended 30 June 2024 would be considered antidilutive
and no adjustment would be made in respect of such share options.
7. Intangible assets
Goodwill Total
Cost £ £
At 1 January 2024 and 30 June 2024 89,961 89,961
Accumulated amortisation and impairment
At 1 January 2024 (82,677) (82,677)
Impairment during the year - -
At 30 June 2024 (82,677) (82,677)
Net Book Value as at 30 June 2024 7,284 7,284
Net Book Value as at 2 July 2023 29,134 29,134
Net Book Value as at 31 December 2023 7,284 7,284
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 1 January 2024 30,107,068 10,351,996 5,548,323 3,752,077 38,310 49,797,774
Additions 3,532,749 - 254,628 1,957,742 - 5,745,119
Disposals - (216,296) (24,829) (64,345) - (305,470)
At 30 June 2024 33,639,817 10,135,700 5,778,122 5,645,474 38,310 55,237,423
Accumulated depreciation and impairment
At 1 January 2024 (17,098,395) (7,358,313) (3,604,056) (1,939,964) (16,651) (30,017,379)
Depreciation during the year (1,284,168) (300,001) (174,528) (167,147) (2,289) (1,928,133)
Eliminated on disposal - 164,265 1,401 16,325 - 181,991
At 30 June 2024 (18,382,563) (7,494,049) (3,777,183) (2,090,786) (18,940) (31,763,521)
Net book value
At 30 June 2024 15,257,254 2,641,651 2,000,939 3,554,688 19,370 23,473,902
At 2 July 2023 12,607,187 3,240,217 1,860,297 1,411,792 24,213 19,143,706
At 31 December 2023 13,008,673 2,993,683 1,944,267 1,812,113 21,659 19,780,395
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 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
3%
Discount
rate
5.0%
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 2023:
£nil, 31 December 2023: £85,466) was recorded for the period.
9. Share capital
Authorised, issued and fully paid Number of shares
30 June 2024 2 July 2023 31 December 2023
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
30 June 2024 2 July 2023 31 December 2023
£ £ £
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 loss to cash generated from operations:
Half-year ended Half-year ended Period ended
30 June 2024 2 July 2023 31 December 2023
£ £ £
Operating loss for the period (1,605,347) (778,993) (720,098)
Depreciation 1,928,133 1,655,805 3,328,567
Share-based payment (credit) / charge (12,510) 10,006 30,542
Loss on disposal of fixed assets 123,479 - 8,940
Provisions 15,723 - 27,059
Lease adjustments 525,000 - 132,786
Impairment of assets - - 107,316
Rent concessions - - (21,062)
Movements in working capital
Decrease / (increase) in inventories 50,306 (51,416) (46,833)
Increase in trade and other receivables (430,491) (159,506) (124,655)
Increase / (decrease) in payables and provisions 1,435,113 (594,868) (434,680)
Cash generated from operations 2,029,406 81,028 2,287,882
11. Adjusted EBITDA
Adjusted EBITDA was calculated from the profit/loss before taxation adding
back interest, depreciation, share-based payments and non-recurring/non-cash
costs incurred in relation to restaurant sites, as follows:
Half-year ended Half-year ended Period ended
30 June 2024 2 July 2023 31 December 2023
£ £ £
Loss after tax (1,738,054) (780,460) (1,599,431)
Add back:
Finance costs 678,955 497,567 1,019,154
Finance income (76,654) - (94,147)
Taxation credit (469,594) (496,100) (45,674)
Depreciation 1,928,133 1,655,805 3,328,567
Impairment of assets - - 107,316
EBITDA 322,786 876,812 2,715,785
Share-based payments (credit) / charge (12,510) 10,006 30,541
Loss on disposal of fixed assets 123,479 - 8,940
Exceptional legal and professional fees 103,357 23,045 101,145
Restaurant opening costs 331,996 - 88,886
Restaurant closing costs 5,196 75,657 76,649
Dilapidations 15,723 16,493 -
Adjusted EBITDA 890,027 1,002,013 3,021,946
12. Subsequent events
Subsequent to the half year the Ashford Outlet Centre franchise restaurant
closed.
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