REG - Cooks Coffee Company - Results for the six months ended 30 September 2022
29/11/2022 07:00
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RNS Number : 9012H Cooks Coffee Company Limited 29 November 2022
29 November 2022
Cooks Coffee Company Limited
("Cooks Coffee", the "Company" or the "Group")
Unaudited financial results for the six months ended 30 September 2022
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 2022.
Period Highlights
· Revenue from operational trading increased by 37% to $1.93m versus H1 FY22
$1.41m
· Overall revenue declined to $3.1m (H1 FY22 $3.66 million) as a result of the
timing of recognizing capital revenues on store openings. This revenue is
expected to be recognized in the second half of the financial year as planned
new stores open up.
· Profit from continuing operations increased by 14% to $146,00 versus H1 FY22
$128,000
· Full year revenue and profit on track to meet expectations
Post Period Highlights
· Pipeline of store openings robust and underpinned by strong
consumer demand
· Dual Listing on London based AQUIS Growth Market completed on 2 November 2022
· Approximately $1m raised through a rights issue, with fund raising process
ongoing, including through a convertible note issue of up to $2m
· Elena Garside appointed as a UK based Non-executive Director
· Craig Brown appointed as Chief Financial Officer, a non-board position
Note: The Company's reporting currency is New Zealand Dollars ("$")
Chairman's Statement
The period was one of significant development for the Group as we continued to
build a group of ethical coffee chains with community spirit. Our Esquires and
Triple Two brands continue to perform well, and I am delighted with our
consistent outperformance of the market, thanks to the efforts of our staff,
franchisees and their teams.
Revenue from trading operations grew by 37% in the first half of the year
("FY23") compared to last year, driven by new store openings and like for like
sales improvements in the existing stores.
Overall store numbers at the end of September 2022 were 111, a net gain of
four stores during the six-month period, with the number of stores in the UK
and Ireland growing to 85 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 three to the franchised network in
the UK and Ireland during the period, under both the Esquires and Triple Two
brands. The number of stores is expected to grow in the second half of the
year, with nine store openings planned in the UK and two in Ireland which we
anticipate will take the store numbers to 96 in the UK and Ireland by the end
of March 2023.
Revenue from new store openings reduced to $1.17m in the period (H1 FY22
$2.25m) as the opening of a number of planned new stores shifted into the
second half of the financial year. The targeted overall new store openings for
the full financial year remains on track and capital revenue from new store
openings recognised in the second half is expected to recover the first half
shortfall.
Profit from continuing operations grew 14% to $146,000 for the period.
Business Performance
United Kingdom
Esquires
UK store numbers were 50 at the end of September 2022, up from 47 as at 31
March 2022. Sales from the Esquires outlets for the six months were up 35% on
the pre covid period from April to September 2019 and up 20% on the same
period in FY22. Record sales per store per day have been recorded in September
and again, post period end, in October.
Triple Two
Triple Two joined the Group on 19 June 2020. At the end of September 2022
there were 20 stores operating. The brand expects to have more than 25 stores
open by the end of March 2023. Comparative sales with 2019 are not available,
however sales for the six-month period to September 2022 were 60% ahead of the
FY22 first six months. Triple Two achieved record sales per store per day in
August and this was exceeded in October.
Ireland
Store sales in Ireland for the period were at a similar level to the same
period in 2019 and 104% up on the same period in FY22. This shows a resilient
recovery after the Covid restrictions were lifted in Ireland in February 2022.
Sadly, the excellent Longford café suffered a devastating fire in September
2022 when a fryer caught fire. The building and café were totally destroyed
but will be rebuilt. However, in the short term the franchisees and staff
after just six weeks have established a temporary container outlet on the site
and leased a vacant warehouse to enable seating for customers.
Rest of the World
Sales in all markets have been showing recovery following the Covid period
with Saudi Arabia leading the way with store sales up 86% for the period
compared to FY22.
Corporate
Dual Listing on AQUIS Growth Market
Cooks Coffee was delighted to complete a dual listing on the AQUIS Growth
Market, post period end, on 2 November 2022, as the hundredth company to list
on this market. The Directors believe that this will be positive for
shareholders and build liquidity and value over time, in particular, as the
growth ambitions and values of Cooks and AQUIS are aligned. Cooks was provided
with fast-track access to AQUIS, based on the existing New Zealand listing,
saving both time and cost. The company is listed under the ticker code COOK on
AQUIS.
Capital Raising
The Company undertook a rights Issue, post period end, in October 2022 at 36
cents per share and raised approximately $1.0m via cash and debt
conversions. The Company is currently seeking to place the shortfall.
In addition, the Company received an unsolicited approach to market a
convertible note of up to $2.0m and this process will conclude on 22 December
2022.
People
Appointment of new UK based Non-executive Director - Elena Garside
The Board are delighted to welcome Elena as the Company's first UK based
Director. Elena "rang the gong" to signify the official admission on Aquis and
the commencement of trading. Elena has significant experience in financial and
ESG communications with a focus on advising on current and emerging trends
within these fields, including responsible investing, and sustainable finance.
Her clients have included FTSE 100 and FTSE 250 companies, as well as
privately owned businesses and global corporations.
Chief Financial Officer
The Company appointed Craig Brown as CFO from 1 October 2022. Craig had been
CFO of the Group previously and has an excellent knowledge and understanding
of the Company, its people and business model. In the first step toward
consolidating the Group's finance functions in the UK we have additionally
appointed Abby Haran as a UK based financial controller to work with Craig and
streamline the Group's finance activities in the UK and Ireland.
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 and there is a solid pipeline of new stores.
With both the Esquires and Triple Two brands achieving record daily sales per
store in October 2022, following strong performances in the first six months,
the Directors are confident that the business models are well suited to the
current consumer market and these results are being achieved despite the
concerns being expressed regarding the general economic outlook. The Cooks
Coffee model is based on a 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.
We are continuing to seek to raise further capital in order to accelerate our
growth and we believe that we can achieve growing profitability in a
sustainable manner. We look forward to providing further updates in due
course.
Keith Jackson
Executive Chairman
Enquiries:
Cooks Coffee Company Limited +64 21 702 509 (New Zealand)
Keith Jackson (Executive Chairman) keith.jackson@cookscoffeecompany.com
+44 (0) 20 3814 5627 (UK)
ukinvestorrelations@cookscoffeecompany.com
(mailto:ukinvestorrelations@cookscoffeecompany.com)
VSA Capital Limited +44 (0) 20 3005 5000
(Aquis Corporate Adviser & Broker)
Andrew Raca, Simba Khatai, Alex Cabral
(Corporate Finance)
David Scriven, Peter Mattsson (Corporate Broking)
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)
Unaudited Condensed Interim Statement of Comprehensive Income
For the six months ended 30 September 2022
30 September 30 September
2022 2021
Notes $'000 $'000
Continuing operations
Revenue 3,099 3,665
Grant and other income 122 337
Raw materials and consumables used (318) (857)
Depreciation and amortisation (38) (30)
Impairment loss on receivables - -
Net foreign exchange (losses)/gains (131) (48)
Employee costs (1,238) (1,328)
Other expenses (1,008) (1,113)
Operating profit 488 626
Finance costs (342) (498)
Profit before income tax 146 128
Income tax (expense)/credit - -
Profit for the period from continuing operations 146 128
Net profit/(loss) for the period from discontinued operations (60) (69)
Net profit for the period attributable to shareholders 86 59
Other comprehensive income
Items that may be subsequently reclassified to profit or loss
Change in foreign currency translation reserve (24) (48)
Total comprehensive profit/(loss) for the period attributable to shareholders 62 11
Total comprehensive income/(loss) for the period attributable to Shareholders
of the parent arises from:
- Continuing operations 122 80
- Discontinued operations (60) (69)
62 11
Profit/(loss) per share:
Basic and diluted profit/(loss) per share (New Zealand Cents) from continuing 2 0.16 0.01
and discontinued operations:
Basic and diluted profit/(loss) per share (New Zealand Cents) from continuing 2 0.28 0.02
operations:
Basic and diluted profit/(loss) per share (New Zealand Cents) from 2 (0.12) (0.01)
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 2022
Attributable to Equity holders of the Company
Share Capital Foreign Currency Translation Reserve Share Based Payment Reserve Accumulated Total
Profit /(Loss)
Equity
Notes $'000 $'000 $'000 $'000 $'000
Balance at 1 April 2021 52,220 208 2,401 (56,550) (1,721)
Comprehensive income/(loss) for the year
Loss for the year - - - (438) (438)
Other comprehensive income
Items that may be subsequently reclassified to profit or loss:
Change in foreign currency translation reserve - (120) - - (120)
Total comprehensive income/(loss) for the year - (120) - (438) (558)
Transactions with owners of the Company
Issue of ordinary shares 4,677 - - - 4,677
Total contributions by owners of the Company 4,677 - - - 4,677
Balance at 31 March 2022 56,897 88 2,401 (56,988) 2,398
Balance at 1 April 2022 56,897 88 2,401 (56,988) 2,398
Comprehensive income/(loss) for the period
Gain/(Loss) for the period - - - 86 86
Other comprehensive income
Items that may be subsequently reclassified to profit or loss:
Change in foreign currency translation reserve - (24) - - (24)
Total comprehensive income/(loss) for the period - (24) - 86 62
Transactions with owners of the Company
Total contributions by owners of the Company - - - - -
Balance at 30 September 2022 56,897 64 2,401 (56,902) 2,460
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 2022
30 September 31 March
2022 2022
Notes $'000 $'000
Assets
Current Assets
Cash and cash equivalents 782 1,156
Trade and other receivables 1,375 1,244
Lease receivables 2,147 2,755
Other current assets 1,104 588
Assets classified as held-for-sale 18 18
Current Assets 5,426 5,761
Non-Current Assets
Property, plant and equipment 152 150
Right-of-use assets 1,686 1,642
Lease receivables 16,920 16,488
Goodwill 5,457 5,457
Intangible assets 7,262 7,262
Other non-current financial assets 15 15
Non-Current Assets 31,492 31,014
Total Assets 36,918 36,775
Liabilities
Current Liabilities
Trade and other payables 5,365 4,518
Deferred Revenue 867 1,119
Lease liabilities 2,386 2,920
Borrowings and other liabilities 3,140 3,457
Current Liabilities 11,758 12,014
Non-Current Liabilities
Deferred Revenue 1,694 1,473
Lease liabilities 18,425 18,226
Deferred tax liabilities 1,182 1,143
Borrowings and other liabilities 1,399 1,521
Non-Current Liabilities 22,700 22,363
Total Liabilities 34,458 34,377
Net Assets 2,460 2,398
Equity
Share capital 4 56,897 56,897
Accumulated losses (56,902) (56,988)
Foreign currency translation reserve 64 88
Share based equity reserve 2,401 2,401
Total Equity 2,460 2,398
Net tangible assets per share (New Zealand Cents) (19.33) (19.45)
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 2022
30-Sep 31-Mar
2022 2022
Notes $'000 $'000
Operating activities
Cash was provided from:
Receipts from customers 2,937 6,363
Cash was applied to:
Interest cost (283) (381)
Payments to suppliers & employees (2,680) (6,614)
Net cash provided from/(applied to) operating activities (26) (632)
Investing activities
Cash was applied to:
Purchase of property, plant and equipment (2) (124)
Acquisition of intangible assets - (91)
Net cash provided from/(applied to) investing activities (2) (215)
Financing activities
Cash was provided from:
Proceeds from borrowings - 981
Proceeds from share issue - 902
Cash was applied to:
Principal elements of lease payments (60) (165)
Repayment of borrowings (235) (608)
Capital raising costs (52) -
Net cash provided from/(applied to) financing activities (347) 1,110
Net increase/(decrease) in cash and cash equivalents held (375) 263
Cash & cash equivalents at beginning of the year 1,156 886
Effect of exchange rate changes on foreign currency balances 1 7
Cash & cash equivalents at end of the year 782 1,156
Composition of cash and cash equivalents:
Bank balances 782 1,156
The attached notes form part of and are to be read in conjunction with these
financial statements.
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-Sep 31-Mar
2022 2022
$'000 $'000
Profit/(Loss) after tax 86 (438)
Add non-cash items:
Depreciation and amortisation 38 581
Impairment loss - 227
Net foreign exchange (losses)/gains 131 230
Revaluation of contingent consideration payable - (6,431)
Impairment of goodwill - 5,983
Add/(Less) movements in assets/liabilities:
Trade and other receivables 734 3,371
Other short-term assets (516) 696
Trade payables (847) (883)
Contract liabilities 31 (4,137)
Other liabilities 317 169
Net cash flow applied to operating activities (26) (632)
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 2022
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 2022 Global franchising & retail UK & IRE franchising New Zealand Total
Global operational splits $'000 $'000 $'000 $'000
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 UK retail Total
Global operational splits $'000 $'000
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)
Interest Income - -
Finance costs (4) (4)
Loss before income tax (60) (60)
Income tax (expense)/credit - -
Loss for the period from discontinued operations (60) (60)
Non-current assets
Intangible assets 6 6
Property, plant and equipment 18 18
Continuing operations
30 September 2021 Global franchising & retail UK & IRE franchising New Zealand Total
Global operational splits $'000 $'000 $'000 $'000
Revenue 120 3,522 23 3,665
Grant and other income - 257 80 337
Raw materials and consumables used (857) - (857)
Depreciation and amortisation (28) (2) (30)
Employee costs (1,128) (200) (1,328)
Other expenses (1) (816) (344) (1,161)
Operating profit/(loss) 119 950 (443) 626
Interest Income - -
Finance costs (9) (5) (484) (498)
Profit/(Loss) before income tax 110 945 (927) 128
Profit/(Loss) for the period from continuing operations 110 945 (927) 128
Non-current assets
Intangible assets 20 4,891 2,789 7,700
Property, plant and equipment 1 137 5 143
Goodwill - 11,715 - 11,715
Discontinued operations
30 September 2021 UK retail Total
Global operational splits $'000 $'000
Revenue 287 287
Other income 11 11
Raw materials and consumables used (79) (79)
Net foreign exchange (losses)/gains (154) (154)
Other expenses (133) (133)
Operating profit/(loss) (68) (68)
Finance costs - -
Loss before income tax (68) (68)
Loss for the period from discontinued operations (68) (68)
Non-current assets
Intangible assets - -
Property, plant and equipment 71 71
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 2022 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 2022. 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 2022. 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-Sep-22 31-Mar-22
Weighted average ordinary shares issued 53,059,493 631,060,729
Weighted average potentially dilutive options issued - -
Basic and diluted profit/(loss) per share (New Zealand Cents) from continuing 0.16 (0.07)
and discontinued operations:
Basic and diluted profit/(loss) per share (New Zealand Cents) from continuing 0.28 (0.01)
operations:
Basic and diluted profit/(loss) per share (New Zealand Cents) from (0.12) (0.06)
discontinued operations:
Net tangible assets per share (New Zealand Cents) (19.33) (1.64)
Due to the share consolidation, a retrospective adjustment to the loss per
share is outlined below based on the ordinary shares at 31 March 2022 being
53,059,493.
30-Sep-22 31-Mar-22
Weighted average ordinary shares issued 53,059,493 53,059,493
Basic and diluted profit/(loss) per share (New Zealand Cents) from continuing 0.16 (0.83)
and discontinued operations:
Basic and diluted profit/(loss) per share (New Zealand Cents) from continuing 0.28 (0.17)
operations:
Basic and diluted profit/(loss) per share (New Zealand Cents) from (0.12) (0.66)
discontinued operations:
Net tangible assets per share (New Zealand Cents) (19.33) (19.45)
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 (2022: nil). All shares are equally eligible to
receive dividends and the repayment of capital.
Movements of share capital 30-Sep-22 31-Mar-22
Number of Shares issued: No. of Shares No. of Shares
Ordinary shares opening balance 53,059,495 627,833,831
Ordinary shares issued - 103,317,794
Ordinary shares consolidation - (678,092,130)
Total ordinary shares authorised at end of period 53,059,495 53,059,495
Movements of share capital 30-Sep-22 31-Mar-22
Value of Shares issued: $'000 $'000
Ordinary shares opening balance 56,897 52,220
Ordinary shares issued less share issue expenses - 4,677
Total ordinary shares authorised at period end 56,897 56,897
During the year ended 31 March 2022, the company issued 103,317,794 new shares
(2021: 101,853,883) bringing the total issued shares to 775,890,965 which were
consolidated into 15:1 as at 30 March 2022. The company now has 51,726,160
quoted shares and 1,333,333 non-voting shares on issue at 30 September 2022.
There were no shares cancelled.
At 30 September 2022, $nil of the ordinary share capital is unpaid (31 March
2022: $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 and Weihai Station Limited and a
trustee of Nikau Trust.
Mike Hutcheson is a director of Image Centre Limited and Lighthouse Ventures
Holdings Limited.
Michael Ambrose is a director of Ashville Consultancy Limited.
Peihuan Wang is a director of Jiajiayue Holding Group Limited and Weihai
Station Limited.
Tony McVerry is a director of Esquires Coffee Houses Ireland Limited.
Aiden Keegan is a director of Esquires Coffee UK Limited.
Graham Hodgetts is a director of Triple Two Coffee Holdings Limited.
Sezan Walker is a director of Triple Two Coffee Holdings Limited.
David Hodgetts is a director of Triple Two Coffee Holdings Limited.
Alistair Tillen is a director of Triple Two Coffee Holdings Limited.
Transactions with related parties
30-Sep 31-Mar
2022 2022
$'000 $'000
Purchases of goods and services
Purchase of management services 90 180
Interest paid to related parties 118 300
Other transactions
Funding loans advanced by related parties - (662)
Balances outstanding with related parties
30-Sep 31-Mar
2022 2022
$'000 $'000
Outstanding balances arising from purchases of goods and services
Entities controlled by key management personnel 827 723
Loans and other payables to related parties
Beginning of the year 1,875 4,410
Loans advanced 3 (662)
Loans converted to equity - (2,000)
Net foreign exchange effects 3 (23)
Interest charged 118 450
Interest paid (156) (300)
End of period 1,842 1,875
Director transactions
30-Sep 31-Mar
2022 2022
$'000 $'000
Directors fees 60 92
Salaries, wages and contractor payments 296 515
356 607
6. Capital Commitments, Contingent Liabilities
There were no capital commitments as at 30 September 2022 (31 March 2022:
$nil).
There were no changes in capital commitments, contingent liabilities and
contingent assets that would require disclosure for the six months ended 30
September 2022 (31 March 2022: $nil).
7. Going Concern
The Group reported a comprehensive profit of $62,000 (2021: $11,000) for the
six-month period to 30 September 2022.
Operating net cash outflow for the six-month period to 30 September 2022 was
$26,000. For the twelve-month period ended 31 March 2022 the net cash outflow
was $632,000.
As at 30 September 2022 the Group has reported Net Assets of $2,460,000 (at 31
March 2022: $2,398,000) and current liabilities exceed current assets by an
amount of $6,332,000 (at 31 March 2022: $6,253,000).
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
ten 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, including any
further impact of Covid-19, existing recessionary pressures, and the economic
impact of the current Ukrainian/Russian conflict.
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 recovery from the various government imposed
restrictions related to Covid-19, restructuring activities that have been
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
As a result of a rights issue undertaken in October (and part allotment under
associated shortfall placement) the Group issued an additional 2,797,814 new
ordinary shares on the 2(nd) of November 2022. These shares were issued at a
price of NZ$0.36 (£0.18) per share. In addition, and to ensure compliance
with the Takeovers Code, the Trustees of the Nikau Trust agreed with the
company to reclassify 1,035,667 of their existing ordinary shares as
non-voting shares, reducing the number of ordinary shares on issue.
These shares were issued for cash and as a set off against debts owed by the
Group.
As previously forecast, the Group completed its dual listing on the Access
Segment of the Aquis Stock Exchange ("AQSE") Growth Market, with trading
commencing on 2(nd) November 2022. Ordinary shares now trade on AQSE under the
ticker "COOK".
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