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