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FUL - Fulham Shore News Story

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Sector
Consumer Cyclicals
Size
Small Cap
Market Cap £96.0m
Enterprise Value £169.1m
Revenue £52.4m
Position in Universe 1062nd / 1805

Fulham Shore PLC - Half-year Report

Fri 18th December, 2020 7:00am
RNS Number : 0913J
Fulham Shore PLC (The)
18 December 2020
 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").

 

The Fulham Shore PLC

 

Unaudited interim results for the six months ended 27 September 2020

 

 

The Directors of The Fulham Shore PLC ("Fulham Shore", the "Company" or the "Group") are pleased to announce unaudited interim results for the six months ended 27 September 2020.

 

Financial Highlights

·      Revenues decreased 44.9% to £19.9m (2019: £36.0m) as a result of national lockdown restrictions

·      Headline EBITDA* of £3.7m (2019: £8.4m)

·      Operating loss of £3.0m (2019: profit of £2.1m)

·      Loss after tax of £3.9m (2019: profit of £0.4m)

·      Operating cash inflow of £6.3m (2019: £9.4m)

·      Raised further funds of £2.25m (before expenses) from an equity placing and subscription

·      Agreed a new loan facility of £10.75m under the UK Government's CLIBIL scheme

·      Extended the maturity date of the existing RCF loan facility by 12 months to March 2022

·      Net debt (excluding lease liabilities) of £3.3m (2019: £8.8m); down from £9.5m as at 29 March 2020

 

* Definition of Headline EBITDA can be found in note 3 to the unaudited interim financial information.

 

Operational Highlights

·      Restaurants across UK closed by UK Government for dine-in customers from 23 March 2020 to 4 July 2020

·      Delivery and takeaway operations partially mitigated losses in the first quarter

·      Opened 1 new Franco Manca pizzeria on The Cut, Waterloo, London

·      Post the period end:

1 further Franco Manca (to 53 operated) opened located at Borough Market, London

1 further The Real Greek (to 19 operated) opened in The Lexicon, Bracknell

Restaurants in England closed by UK Government for dine in customers from 5 November 2020 to 2 December 2020

As at 17 December 2020, the Group had net debt (excluding lease liabilities) of £3.7m with undrawn debt facility of £11.5m out of total facilities of £25.75m

 

David Page, Chairman of Fulham Shore, said:

"We are pleased to have delivered a creditable performance during the first half of the current financial year despite all Franco Manca and The Real Greek restaurants being closed to dine-in customers for more than half the period. The Group generated positive Headline EBITDA during the second quarter (July to September) reflecting the popularity of our businesses and their great value proposition.

 

This performance was driven by the ability of our teams at both Franco Manca and The Real Greek to adapt quickly to the continuing changes implemented by the UK Government in their response to COVID-19.  We continue to explore new opportunities and are encouraged by the positive customer response to our recently launched Franco Manca and The Real Greek "Meal at Home" kits and new e-gift cards, both of which were launched during the November lockdown.

 

The ongoing damage to the property and restaurant sectors will allow us to prospect for new sites at much reduced rents and lower capital costs per site. As such, over the next few years and once normal trading conditions return, we will target a higher return on capital than we have historically achieved.

 

Following the period end, on 5 November 2020 most of our restaurants closed again to dine-in customers following the UK Government's second national lockdown. These restaurants were then permitted to re-open on 2 December 2020 to dine-in customers, with certain restrictions. However, as at the date of this report and from 16 December 2020, the majority of our estate is once again closed to dine-in customers as London entered Tier 3 restrictions, while Surrey and Berkshire will enter Tier 3 restrictions from 19 December 2020. The situation is fluid and changes frequently and with little notice.

 

Despite the near-term uncertainty, the Board remains confident in the long-term strength of the Group and believes it is well positioned to both deliver strategic growth and capitalise on opportunities as a sense of normality resumes."

 

Contacts:

 

The Fulham Shore PLC

www.fulhamshore.com

David Page / Nick Wong

 

Via Hudson Sandler

Allenby Capital Limited (Nominated Adviser and Broker)

Nick Naylor / Jeremy Porter / James Reeve (Corporate Finance)

Tony Quirke / Jos Pinnington (Sales)

 

 

Tel: 020 3328 5656

 

Hudson Sandler (Financial PR)

Alex Brennan / Lucy Wollam

fulhamshore@hudsonsandler.com

Telephone: 020 7796 4133

 

 

Notes for editors

 

Information on The Fulham Shore PLC

 

Fulham Shore was incorporated in March 2012. The Directors believed that there were attractive investment opportunities within the restaurant sector in the UK and that, given their collective experience in the restaurant sector, they could take advantage of the opportunities which existed.

 

The ordinary shares of the Company were admitted to trading on AIM in October 2014 in order to capitalise on such opportunities and to give the company's employees, customers and public the ability to share in the enterprise.

 

Today, Fulham Shore owns and operates "The Real Greek" (www.therealgreek.com) and "Franco Manca" (www.francomanca.co.uk) restaurants.

 

The Real Greek

 

Since its foundation in London in 1999, The Real Greek business has grown steadily, now offering modern Greek cuisine in 19 restaurants across London and Southern England.

 

The Real Greek food centres on the delicious, healthy diet of the Eastern Mediterranean, staying true to the Greek ethos of food, family and friends. Dishes are created using premium ingredients sourced from Greece and Cyprus whenever possible, and developed by Tonia Buxton, the face of Greek food in the UK.

 

The Real Greek's menu and atmosphere retain the spirit of eating in Greece, encouraging diners to take their time eating amongst friends and family, be it a relaxed dinner, family get-together, or a fully catered party.

 

Franco Manca

 

Franco Manca opened its first restaurant in 2008 and now has 53 restaurants, primarily in London, but also with restaurants across the UK (e.g. Edinburgh, Manchester, Leeds, Cambridge, Birmingham, Brighton, Bristol and Exeter). Franco Manca also has a franchised pizzeria on the island of Salina in Italy.

 

Franco Manca's pizza is made from slow-rising sourdough and is baked in an oven that produces high heat. The slow levitation and blast cooking process lock in the flour's natural aroma and moisture, giving a soft and easily digestible crust. Where possible, locally sourced and organic ingredients are used. Pizza prices start from £5.20.

 

Franco Manca has received the following accolades:

 

-       Winner of the Casual Dining Best Family Dining Experience Award 2020

-       Winner of the R200 Best Value Restaurant Operator- Over 20 Sites Award 2019 and 2017

-       Winner of the CGA Peach Hero and Icon Awards Best Concept award 2016

 



 

 

Chairman's statement

 

Introduction

 

I am pleased to announce the unaudited interim results for the six months ended 27 September 2020 (the "Half Year") for Fulham Shore.

 

The Group has had an eventful first half of the financial year.

 

During the Half Year, revenue decreased by 44.9% to £19.9m (2019: £36.0m) as the Group's restaurants closed completely for a month during lockdown and subsequently only traded in a limited number of locations through takeaway and delivery services.

 

Trading performance

 

Headline EBITDA* decreased to £3.7m (2019: £8.4m). Our Headline EBITDA** for the Half Year under IAS 17 rather than IFRS 16 would have been £0.0m (2019: £5.0m). During the Half Year, we opened 1 new restaurant (2019: 7) in The Cut, Waterloo, London, leading to pre-opening costs of £0.1m (2019: £0.5m). As a result of the ongoing financial difficulties at Debenhams, we have prudently recognised an impairment charge of £0.5m (2019: £Nil) against property, plant and equipment of the one remaining Franco Manca located as a concession within a Debenhams store.

 

Strategic progress

 

In light of the global pandemic, we are pleased to have delivered a creditable performance during the first half of the current financial year. Our second quarter (July to September) generated Headline EBITDA mitigating much of the losses made in the first quarter, when our restaurants were either fully closed or closed to dine-in customers.

 

This performance and recovery were driven by the ability of our teams at both Franco Manca and The Real Greek to adapt quickly to the continuing instructions directed towards us by the UK Government in their response to COVID-19. We continue to explore new opportunities and are encouraged by the positive customer response to our recently launched Franco Manca and The Real Greek "Meal at Home" kits and new e-gift cards, both of which were launched during the November lockdown.

 

The safety of all customers and staff has been our top priority since the onset of COVID-19, and to that end we have invested heavily in PPE, screens, outside seating areas and other public safety procedures, which we believe our customers have appreciated.  Whenever allowed to by the UK Government, our customers have returned to us in great numbers, demonstrating the strength of our brand and loyalty of our expanding customer base.

 

We have, during the Half Year, benefited from certain UK Government support schemes including, amongst others, the Coronavirus Job Retention Scheme ("CJRS"), Coronavirus Large Business Interruption Loan Scheme ("CLBILS"), VAT deferral, hospitality business rates relief at applicable locations and the Eat Out to Help Out Scheme.

 

Cash flow

 

During the period, the Group generated positive cash inflow from operating activities of £6.3m (2019: £9.4m).

 

The Group reduced its capital expenditure during the national lockdown, investing £0.6m (2019: £4.6m), the majority of which was utilised for one new restaurant opening.

 

During the Half Year, the Group increased its banking facilities with HSBC by agreeing a £10.75m additional facility issued under the Coronavirus Large Business Interruption Loan Scheme. Fulham Shore further raised £2.25m (before expenses) from the issue of 36,000,000 new ordinary shares. These new funds, together with the new banking facilities, have given the Group substantial headroom over its net debt at a time of uncertainty of the ongoing impact from COVID-19.

 

Overall, net cash inflow for the period was a positive £13.0m (2019: net cash inflow of: £0.1m) due primarily to the drawdown of new bank loan facilities and the proceeds of the equity fundraise in August 2020. As at 27 September 2020, Group net debt (excluding lease liabilities recognised under IFRS 16) was £3.3m (2019: £8.8m), down from £9.5m as at 29 March 2020.

 

Dividends

 

No dividends are being proposed by the Board in line with its policy that, subject to the availability of distributable reserves, dividends will be paid to shareholders when the Directors believe it is appropriate and prudent to do so.

 

Current trading and outlook

 

Following the Half Year, on 5 November 2020 most of our restaurants closed again to dine-in customers following the UK Government's second national lockdown, although takeaway and delivery services continued in most of our restaurants. Most of our restaurants were then permitted to re-open on 2 December 2020 to dine-in customers, with certain restrictions. However, as at the date of this report and from 16 December 2020, the majority of our estate is once again closed to dine-in customers as London entered Tier 3 restrictions, while Surrey and Berkshire will enter Tier 3 restrictions from 19 December 2020. The situation is fluid and changes frequently and with little notice.

 

In Tier 3, we are continuing to offer delivery and takeaway services in the majority of our affected restaurants. From tomorrow, Fulham Shore will have: Tier 3 - 58 restaurants (of which 7 are temporarily fully closed); Tier 2 (or equivalent) - 12 restaurants; Tier 1 - 0 restaurants; and closed possibly until Spring 2021 - 2 restaurants.

 

As at 17 December 2020, the Group had net debt (excluding lease liabilities) of £3.7m with undrawn debt facility of £11.5m (increased from £7.5m as at 27 September 2020) out of total facilities of £25.75m. Our post Half Year trading, despite a second lockdown, and our significant debt headroom continue to demonstrate the Group's ability to emerge from this period as a successful survivor in an albeit reduced UK restaurant sector.

 

Since the end of the Half Year, we have taken advantage of the current property market and opened two new restaurants: a Franco Manca next to Borough Market, London, and a further The Real Greek in the Lexicon shopping centre in Bracknell, Berkshire.

 

This brings the current group total to 72 restaurants in the UK, comprising 53 Franco Manca (49 currently trading) and 19 The Real Greek (14 currently trading). We hope to reopen 7 of our restaurants when Central London comes out of Tier 3 restrictions and our Franco Manca in Aldwych and The Real Greek on the Strand as footfall in the London's West End improves in the new year.

 

The ongoing damage to the property and restaurant sectors will allow us to prospect for new sites at much reduced rents and with lower capital costs per site. The two restaurants we have recently opened cost us less than half of the typical outlay of a year ago.

 

As such, over the next few years and once normal trading conditions return, we will target a higher return on capital than we have historically achieved.

 

We are close to agreeing terms on further sites due to open in calendar year 2021 in London and around the UK for both of our businesses, and look forward to welcoming new customers through our doors when we are able to do so.

 

Despite the near-term uncertainty, the Board remains confident in the long-term strength of the Group and believes it is well-positioned to both deliver strategic growth and capitalise on opportunities as a sense of normality resumes.

 

 

David Page

Chairman

 

18 December 2020

 

* Definition of Headline EBITDA can be found in note 3 to the unaudited interim financial information.

** Headline EBITDA calculated before application of IFRS 16 can be found in note 3 to the unaudited interim financial information



 

.

 

The Fulham Shore PLC

Unaudited Consolidated Statement of Comprehensive Income

for the six months ended 27 September 2020

 



Six months 

ended 

27 September 

2020 

Six months 

ended 

29 September 

2019 

Year 

ended 

29 March 

2020


Notes

Unaudited 

£'000 

Unaudited 

£'000 

Audited 

£'000 






Revenue


19,869 

36,034 

68,565 

Cost of sales


(12,854)

(21,035)

(40,628)



             

             

             

Gross profit


7,015 

14,999 

27,937 

Administrative expenses


(8,828)

(11,905)

(23,500)



             

             

             

Headline operating (loss)/profit


(1,813)

3,094 

4,437 

Share based payments


(75)

(82)

(157)

Pre-opening costs


(61)

(532)

(683)

Amortisation of brand


(411)

(411)

(821)

Exceptional costs

- cost of acquisition


 

 

(14)

 

(3)

- impairment of property, plant and equipment


(461)

(260)

- change in fair value of investment


(248)

- COVID-19 costs


(4,550)

(718)

- COVID-19 grants received against costs


4,366 

285 



             

             

             

Operating (loss)/profit


(3,005)

2,055 

1,832 

Finance income


10 

Finance costs

4

(1,323)

(1,318)

(2,596)



             

             

             

(Loss)/profit before taxation


(4,327)

743 

(754)

Income tax

5

389 

(357)

(421)



             

             

             

(Loss)/profit for the period


(3,938)

386 

(1,175)



             

             

             






Profit for the period attributable to:





Owners of the company


(3,938)

369 

(1,193)

Non-controlling interests


17 

18 



             

             

             



(3,938)

386 

(1,175)



             

             

             

Earnings per share










Basic

6

(0.7p)

0.1p 

(0.2p)

Diluted

6

(0.7p)

0.1p 

(0.2p)






Headline Basic

6

(0.5p)

0.2p 

0.2p 

Headline Diluted

6

(0.5p)

0.2p 

0.2p 

 

There were no other comprehensive income items.



The Fulham Shore PLC

Unaudited Consolidated Balance Sheet

as at 27 September 2020

 


 

 

 

 

Notes

As at 

27 September 

2020 

Unaudited 

£'000 

As at 

29 September 

2019 

Unaudited 

£'000 

As at 

29 March 

2020 

Audited 

£'000 

Non-current assets





Intangible assets


24,583 

25,401 

25,017 

Property, plant and equipment


97,177 

102,937 

100,606 

Investments


203 

Trade and other receivables


1,081 

1,116 

1,081 

Deferred tax assets


325 

319 



             

             

             



123,166 

129,976 

126,713 

Current assets





Inventories


2,013 

1,932 

1,906 

Trade and other receivables


5,541 

5,055 

2,342 

Cash and cash equivalents

7

15,039 

1,709 

2,056 



             

             

             



22,593 

8,696 

6,304 



             

             

             

Total assets


145,759 

138,672 

133,017 



             

             

             

Current liabilities





Trade and other payables


(18,603)

(15,656)

(12,480)

Borrowings

8

(8,909)

(5,215)

(5,163)

Income tax payables


(135)

(474)

(135)



             

             

             



(27,647)

(21,345)

(17,778)



             

             

             

Net current liabilities


(5,054)

(12,649)

(11,474)






Non-current liabilities





Borrowings

8

(79,312)

(74,961)

(74,591)

Deferred tax liabilities


(1,768)

(1,676)

(1,888)



             

             

             



(81,080)

(76,637)

(76,479)



             

             

             

Total liabilities


(108,727)

(97,982)

(94,257)



             

             

             

Net assets


37,032 

40,690 

38,760 



             

             

             

Equity





Share capital


6,096 

5,736 

5,736 

Share premium account


8,639 

6,911 

6,911 

Merger relief reserve


30,459 

30,459 

30,459 

Reverse acquisition reserve


(9,469)

(9,469)

(9,469)

Retained earnings


1,307 

7,053 

5,123 



             

             

             

Total equity attributable to owners of the company


37,032 

40,690 

38,760 

Non-controlling interest




             

             

             

Total equity


37,032 

40,690 

38,760 



             

             

             



The Fulham Shore PLC

Unaudited Consolidated Statement of Changes in Equity

for the six months ended 27 September 2020

 

Six months ended 27 September 2020

Unaudited

 


Attributable to owners of the Company 




 

 

Share 

capital 

£'000 

 

 

Share 

premium 

£'000 

 

Merger 

Relief 

Reserve 

£'000 

Reverse 

Acq-uisition 

Reserve 

£'000 

 

 

Retained 

earnings 

£'000 

Equity 

Share-

holders '

Funds 

£'000 

Non- 

Control-ling 

Interests 

£'000 

 

 

Total 

equity 

£'000 










At 29 March 2020

5,736 

6,911 

30,459 

(9,469)

5,123 

38,760 

38,760 










Loss for the period

(3,938)

(3,938)

(3,938)


             

             

             

             

             

             

             

             

Total comprehensive income for the period

 

 

 

 

 

(3,938)

 

(3,938)

 

 

(3,938)










Transactions with owners:








  Share based payments

 

 

 

 

 

75 

 

75 

 

 

75 

  Deferred tax on share based payments

 

 

 

 

 

47 

 

47 

 

 

47 

  Issue of new ordinary shares

 

360 

 

1,728 

 

 

 

 

2,088 

 

 

2,088 


             

             

             

             

             

             

             

             

Total transactions with owners

 

360 

 

1,728 

 

 

 

122 

 

2,210 

 

 

2,210 


             

             

             

             

             

             

             

             

At 27 September 2020

 

6,096 

 

8,639 

 

30,459 

 

(9,469)

 

1,307 

 

37,032

 

 

37,032 


             

             

             

             

             

             

             

             

 



 

 

Six months ended 29 September 2019

Unaudited

 


Attributable to owners of the Company 




 

 

Share 

capital 

£'000 

 

 

Share 

premium 

£'000 

 

Merger 

Relief 

Reserve 

£'000 

Reverse 

Acq-uisition 

Reserve 

£'000 

 

 

Retained 

earnings 

£'000 

Equity 

Share-

holders '

Funds 

£'000 

Non- 

Control-ling 

Interests 

£'000 

 

 

Total 

equity 

£'000 










At 31 March 2019

5,714 

6,889 

30,459 

(9,469)

5,025 

38,618 

125 

38,743 










Profit for the period

369 

369 

17 

386 


             

             

             

             

             

             

             

             

Total comprehensive income for the period

 

 

 

 

 

369 

 

369 

 

17 

 

386 










Transactions with owners:








  Share based payments

 

 

 

 

 

82 

 

82 

 

 

82 

- Lease incentives on adoption of IFRS 16

 

 

 

 

 

2,062 

 

2,062 

 

 

2,062 

  Acquisition of non-controlling interests

 

 

 

 

 

(485)

 

(485)

 

(142)

 

(627)

  Exercise of share options

 

22 

 

22 

 

 

 

 

44 

 

 

44 


             

             

             

             

             

             

             

             

Total transactions with owners

 

22 

 

22 

 

 

 

1,659 

 

1,703 

 

(142)

 

1,561 


             

             

             

             

             

             

             

             

At 29 September 2019

 

5,736 

 

6,911 

 

30,459 

 

(9,469)

 

7,053 

 

40,690

 

 

40,690 


             

             

             

             

             

             

             

             

 



 

 

Year ended 29 March 2020

Audited

 


Attributable to owners of the Company



 


 

 

Share 

Capital 

£'000 

 

 

Share 

Premium 

£'000 

 

Merger 

Relief 

Reserve 

£'000 

Reverse 

Acq- 

uisition 

Reserve 

£'000 

 

 

Retained 

Earnings 

£'000 

Equity 

Share-

holders '

Funds 

£'000 

Non- 

Control- 

ling 

Interests 

£'000

 

 

Total 

Equity 

£'000 

 










 

At 31 March 2019

5,714 

6,889 

30,459 

(9,469)

5,025 

38,618 

125 

38,743 

 










 

Adjustment on adoption of IFRS 16

 

 

 

 

 

1,872 

 

1,872 

 

 

1,872 

 


             

             

             

             

             

             

             

             

 

At 1 April 2019

6,897 

40,490 

125 

40,615 

 










 

Loss for the year

(1,193)

(1,193)

18 

(1,175)

 


             

             

             

             

             

             

             

             

 

Total comprehensive income

 

 

 

 

 

 

 

 

 

 

(1,193)

 

 

(1,193)

 

 

18 

 

 

(1,175)

 










 

Transactions with owners:









Share based payments

 

 

 

 

 

157 

 

157 

 

 

157 

 

Deferred tax on share based payments

 

 

 

 

 

(253)

 

(253)

 

 

(253)

 

Acquisition of non-controlling interests

 

 

 

 

 

(485)

 

(485)

 

(143)

 

(628)

 

Exercise of share options

 

22 

 

22 

 

 

 

 

44 

 

 

44 

 


             

             

             

             

             

             

             

             

 

Total transactions with owners

 

22 

 

22 

 

 

 

(581)

 

(537)

 

(143)

 

(680)

 










 


             

             

             

             

             

             

             

             

 

At 29 March 2020

5,736 

6,911 

30,459 

(9,469)

5,123 

38,760 

38,760 

 


             

             

             

             

             

             

             

             

 

 



The Fulham Shore PLC

Unaudited Consolidated Cash Flow Statement

for the six months ended 27 September 2020

 


 

 

 

 

 

Notes

Six months 

ended 

27 September 

2020 

Unaudited 

£'000 

Six months 

ended 

29 September 

2019 

Unaudited 

£'000 

Year 

ended 

29 March 

2020 

Audited 

£'000 






Net cash from operating activities

9

6,284 

9,356 

14,842 






Investing activities





Acquisition of property, plant and equipment


(554)

(4,615)

(7,214)

Acquisition of intangible assets


(25)

(75)

(145)

Acquisition of investments


(2)

(47)

Acquisition of non-controlling interest


(642)

(641)



             

             

             

Net cash flow used in investing activities


(579)

(5,334)

(8,047)



             

             

             

Financing activities





Proceeds from issuance of new ordinary shares (net of expenses)


 

2,088 

 

44 

 

44 

Capital received from bank borrowings


6,750 

1,000 

Capital repaid on bank borrowings


(700)

(700)

Principal element for lease payments


(238)

(2,180)

(4,332)

Interest received


10 

Interest paid


(1,323)

(1,318)

(2,596)



             

             

             

Net cash used in financing activities


7,278 

(4,148)

(6,574)



             

             

             

Net increase/(decrease)in cash and cash equivalents


12,983 

(126)

221 






Cash and cash equivalents at beginning of the period


2,056 

1,835 

1,835 



             

             

             

Cash and cash equivalents at end of period

7

15,039 

1,709 

2,056 



             

             

             

 



The Fulham Shore PLC

Notes to the Unaudited Interim Financial Information

for the six months ended 27 September 2020

 

1.             General information

 

The Fulham Shore PLC is a public limited company incorporated and domiciled in England and Wales. The address of the registered office is 1st Floor, 50-51 Berwick Street, London, W1F 8SJ, United Kingdom. Copies of this Interim Statement may be obtained from the above address or the investor section of the Group's website at http://www.fulhamshore.com.

 

2.             Basis of preparation

 

The unaudited interim financial information for the six months ended 27 September 2020 has been prepared under the recognition and measurement principles of International Financial Reporting Standards as adopted by the EU ("IFRS") based on the accounting policies consistent with those used in the financial statements for the period ended 29 March 2020, but does not contain all the information necessary for full compliance with IFRS.

 

The unaudited interim financial information was approved and authorised for issue by the Board on 18 December 2020.

 

The unaudited interim financial information for the six months ended 27 September 2020 does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006 and should be read in conjunction with the statutory accounts for the period ended 29 March 2020. The information for the year ended 29 March 2020 has been extracted from the statutory accounts for that year which have been delivered to the Registrar of Companies. The audit report on these statutory accounts was unqualified, did not contain an emphasis of matter paragraph, and did not contain a statement under sections 498(2)-(3) of the Companies Act 2006.

 

The interim financial statements are presented in Pounds Sterling because that is the currency of the primary economic environment in which the company operates. All values are rounded to the nearest one thousand Pounds (£'000) except when otherwise indicated.

 

Changes in accounting policies and disclosures:

 

There were no changes in accounting policies and disclosures during the period.



 

3.             Segment information

 

For management purposes, the Group was organised into two operating divisions during the 6 months ended 27 September 2020. These divisions, The Real Greek and Franco Manca, are the basis on which the Group reports its primary segment information as identified by the chief operating decision maker which is the Group's board of directors.

 

For the six months ended 27 September 2020 (Unaudited)

 


The Real 

Greek 

segment 

£'000 

Franco 

Manca 

segment 

£'000 

 

Other 

unallocated 

£'000 

 

 

Total 

£'000 






External revenue

5,080 

14,599 

190 

19,869 






Headline EBITDA*

789 

3,380 

(459)

3,710 

Depreciation and amortisation

(1,520)

(3,989)

(14)

(5,523)


             

             

             

             

Headline operating loss

(731)

(609)

(473)

(1,813)






Pre-opening costs

(49)

(483)

(532)











Operating loss

(873)

(1,653)

(479)

(3,005)

Finance income

Finance costs

(347)

(781)

(195)

(1,323)


             

             

             

             

Segment loss before taxation

(1,220)

(2,434)

(673)

(4,327)

Income tax credit




389 





             

Loss for the period




(3,938)





             






Assets

34,946 

103,782 

7,031 

145,759 

Liabilities

(26,762)

(61,122)

(20,843)

(108,727)


             

             

             

             

Net assets

8,184 

42,660 

(13,812)

37,032 


             

             

             

             






Capital expenditure excluding right of use assets

 

23 

 

531 

 

 

554 


             

             

             

             

 



 

 

For the six months ended 29 September 2019 (Unaudited)

 


The Real 

Greek 

segment 

£'000 

Franco 

Manca 

segment 

£'000 

 

Other 

unallocated 

£'000 

 

 

Total 

£'000 






External revenue

10,951 

25,083 

36,034 






Headline EBITDA*

2,245 

6,791 

(606)

8,430 

Depreciation and amortisation

(1,429)

(3,891)

(16)

(5,336)


             

             

             

             

Headline operating profit/(loss)

816 

2,900 

(622)

3,094 






Pre-opening costs

(49)

(483)

(532)











Operating profit/(loss)

733 

1,956 

(634)

2,055 

Finance income

Finance costs

(371)

(786)

(161)

(1,318)


             

             

             

             

Segment profit/(loss) before taxation

363 

1,175 

(795)

743 

Income tax expense




(357)





             

Profit for the period




386 





             






Assets

34,792 

103,193 

687 

138,672 

Liabilities

(26,722)

(59,154)

(12,106)

(97,982)


             

             

             

             

Net assets

8,070 

44,039 

(11,419)

40,690 


             

             

             

             






Capital expenditure excluding right of use assets

 

461 

 

4,149 

 

 

4,615 


             

             

             

             

 

 

 



 

 

For the year ended 29 March 2020 (Audited)

 


The Real 

Greek 

segment 

£'000 

Franco 

Manca 

segment 

£'000 

 

Other 

unallocated 

£'000 

 

 

Total  

£'000 






Revenue from external customers

20,004 

48,525 

36 

68,565 






Headline EBITDA*

3,655 

12,229 

(690)

15,194 

Depreciation and amortisation

(2,898)

(7,828)

(31)

(10,757)


             

             

             

             

Headline operating profit/(loss)

757 

4,401 

(721)

4,437 






Pre-opening costs

(120)

(563)

(683)

Change in fair value of investments

(248)

(248)











Operating profit/(loss)

275 

2,292 

(735)

1,832 

Finance income

10 

Finance costs

(724)

(1,564)

(308)

(2,596)


             

             

             

             

Segment profit/(loss) before taxation

(445)

743 

(1,043)

(754)

Income tax expense




(421)





             

Loss for the year from continuing operations




 

(1,175)





             






Assets

32,712 

98,972 

1,333 

133,017 

Liabilities

(25,254)

(55,982)

(12,021)

(94,257)


             

             

             

             

Net assets

7,458 

42,990 

(10,688)

38,760 


             

             

             

             






Capital expenditure excluding right of use assets

 

1,650 

 

5,555 

 

 

7,214 


             

             

             

             

 

In addition to the revenues generated from external customers, The Real Greek segment also generated internal revenues from another segment to the value of £643,000 (2019: £1,250.000).

 

Head office and PLC costs are not related to the Group's two business segments and are therefore included in other unallocated and are not part of a business segment.

 

The Group's two business segments primarily operate in one geographical area which is the United Kingdom.



 

 

*Headline EBITDA is a key measure for the Group as well as industry analysts as it is indicative of ongoing EBITDA generation of the businesses. Headline EBITDA is defined as EBITDA before share based payments and pre-opening costs, where EBITDA is defined as operating profit before depreciation and amortisation, amortisation of brand, impairment of property, plant and equipment, impairment of goodwill and intangible assets, impairment and changes in fair value of investments, temporary closure costs and associated grants received relating to COVID-19, restructuring costs, costs of reverse acquisition, cost of acquisition and loss on disposal of property, plant and equipment.

 


Six months 

ended 

20 September 

2020 

Six months 

ended 

29 September 

2019 

Year 

ended 

29 March 

2020 


Unaudited 

£'000 

Unaudited 

£'000 

Audited 

£'000 





(Loss)/profit before taxation

(4,327)

743 

(754)

Finance costs

1,323 

1,318 

2,596 

Finance income

(1)

(6)

(10)


             

             

             

Operating (loss)/profit

(3,005)

2,055 

1,832 





Depreciation and amortisation

5,523 

5,336 

10,757 

Amortisation of brand

411 

411 

821 

Exceptional costs:

- impairment of property, plant and equipment

 

461 

 

 

260 

- change in fair value of investments

248 

- cost of acquisition

14 

- COVID-19 costs

4,550 

718 

- COVID-19 grants received against costs

(4,366)

(285)


             

             

             

EBITDA

3,574 

7,816 

14,354 





Share based payments

75 

82 

157 

Pre-opening costs

61 

532 

683 


             

             

             

Headline EBITDA

3,710 

8,430 

15,194 





Rent

(3,691)

(3,408)

(6,909)


             

             

             

Headline EBITDA (under IAS17)

19 

5,022 

8,285 


             

             

             

 



 

 

4.             Finance costs

 


Six months 

ended 

27 September 

2020 

Unaudited 

£'000 

Six months 

ended 

29 September 

2019 

Unaudited 

£'000 

Year 

ended 

29 March 

2020 

Audited 

£'000 





Interest expenses on bank loans and overdrafts

196 

162 

309 

Interest on lease liabilities recognised under IFRS16

1,127 

1,156 

2,287 


             

             

              


1,323 

1,318 

2,596 


             

             

             

 

5.             Income Tax Expense

 


Six months 

ended 

27 September 

2020 

Unaudited 

£'000 

Six months 

ended 

29 September 

2019 

Unaudited 

£'000 

Year 

ended 

29 March 

2020 

Audited 

£'000 





Income tax expense on continuing operations




Based on the result for the period:




UK Corporation tax at 19% (2019: 19%)

431 

446 

Adjustment in respect of prior periods

(28)


             

             

              

Total current tax

431 

418 





Deferred taxation:




Current year

(389)

(74)


             

             

              

Total deferred tax

(389)

(74)


             

             

             

Total taxation (credit)/expense on profit from continuing operations

 

(389)

 

357 

 

421 


             

             

             





The above is disclosed as:




Income tax (credit)/expense - current year

(389)

357 

421 


             

             

             


(389)

357 

421 


             

             

             

 



 

6.             Earnings per share

 


Six months 

ended 

27 September 

2020 

Unaudited 

£'000 

Six months 

ended 

29 September 

2019 

Unaudited 

£'000 

Year 

ended 

29 March 

2020 

Audited 

£'000 





(Loss)/profit for the purposes of basic and diluted earnings per share (continuing operations):

 

(3,938)

 

369 

 

(1,193)





Share based payments

75 

82 

157 

Deferred tax on share based payments

(11)

(18)

39 

Pre-opening costs

61 

532 

683 

Amortisation of brand

411 

411 

821 

Deferred tax on amortisation of brand

(68)

(68)

(137)

Exceptional costs

- change in fair value of investments

 

 

 

248 

- impairment of property, plant and equipment

461 

260 

- cost of acquisition

14 

- COVID-19 costs (net)

184 

433 


             

             

             

Headline (loss)/profit for the period for the purposes of Headline basic and diluted earnings per share

 

(2,825)

 

1,322 

 

1,314 


             

             

             

 


Six months 

ended 

27 September 

2020 

Unaudited 

No. '000 

Six months 

ended 

29 September 

2019 

Unaudited 

No. '000 

Year 

ended 

29 March 

2020 

Audited 

No. '000 





Weighted average number of ordinary shares in issue for the purposes of basic earnings per share

 

581,175 

 

572,150 

 

572,885 

Effect of dilutive potential ordinary shares:

- Share options

 

 

13,529 

 

1,030 


             

             

             

Weighted average number of shares for the purpose of diluted earnings per share

 

581,175 

 

585,679 

 

573,915 


             

             

             

 

As the Group reported a loss for the period ended 27 September 2020, under IAS33, the share options in issue during the period are not considered dilutive and basic and diluted earnings per share are, therefore, the same.

 


Six months 

ended 

27 September 

2020 

Unaudited 

Six months 

ended 

29 September 

2019 

Unaudited 

Year 

ended 

29 March 

2020 

Audited 

Earnings per share:




Basic earnings per share

(0.7p)

0.1p 

(0.2p)

Diluted earnings per share

(0.7p)

0.1p 

(0.2p)


             

             

             





Headline basic

(0.5p)

0.2p 

0.2p 

Headline diluted

(0.5p)

0.2p 

0.2p 


             

             

             

 

7.             Cash and cash equivalents

 


As at 

27 September 

2020 

Unaudited 

£'000 

As at 

29 September 

2019 

Unaudited 

£'000 

As at 

29 March 

2020 

Audited 

£'000 





Cash at bank and in hand

15,039 

1,709 

2,056 


             

             

             

 

Bank balances comprise cash held by the Group on a short term basis with maturity of three months or less. The carrying amount of these assets approximates their fair value.

 

8.             Borrowings

 


As at 

27 September 

2020 

Unaudited 

£'000 

As at 

29 September 

2019 

Unaudited 

£'000 

As at 

29 March 

2020 

Audited 

£'000 





Short term borrowings:




Bank loans

1,480 

Lease liabilities

7,429 

5,215 

5,163 


             

             

             


8,909 

5,215 

5,163 





Long term borrowings:

Bank loans

 

16,810 

 

10,540 

 

11,540 

Lease liabilities

62,502 

64,421 

63,051 


             

             

             


79,312 

74,961 

74,591 


             

             

             


88,221 

80,176 

79,754 


             

             

             

 

As at 27 September 2020, the Group's committed Sterling borrowing facilities comprised a revolving credit facility of £14,250,000, expiring within 2 years, a Coronavirus Large Business Interruption Loan facility ("CLBIL") of £10,750,000, expiring within 3 years and a bank overdraft facility of £750,000 repayable on demand, all of which are secured by a mortgage debenture in favour of HSBC Bank PLC representing fixed or floating charges over the assets of the Group. As at 27 September 2020, the Group had £7,460,000 undrawn headroom across its banking facilities.



 

 

9.             Reconciliation of net cash flows from operating activities

 

 

 

Six months 

ended 

27 September 

2020 

Unaudited 

£'000 

Six months 

ended 

29 September 

2019 

Unaudited 

£'000 

Year 

ended 

29 March 

2020 

Audited 

£'000 





(Loss)/profit for the period

(3,938)

386 

(1,175)





Adjustments:




Income tax (credit)/expense

(389)

357 

421 


             

             

             

(Loss)/profit before tax for the period

(4,327)

743 

(754)

Finance income

(1)

(6)

(10)

Finance costs

1,323 

1,318 

2,596 


             

             

             

Operating (loss)/profit for the period

(3,005)

2,055 

1,832 

Depreciation and amortisation

5,934 

5,746 

11,577 

Cost of acquisition

14 

14 

Impairment of property, plant and equipment

461 

263 

Change in fair value of investments

245 

Loss on disposal of property, plant and equipment

23 

Share based payments expense

75 

82 

157 


             

             

             

Operating cash flows before movement in working capital

 

3,465 

 

7,897 

 

14,111 

Increase in inventories

(107)

(168)

(142)

Increase in trade and other receivables

(3,198)

(2,806)

(59)

Increase in trade and other payables

6,124 

4,483 

1,307 


             

             

             

Cash generated from operations

6,284 

9,406 

15,217 

Income taxes paid

-  

(50)

(375)


             

             

             

Net cash from operating activities

6,284 

9,356 

14,842 


             

             

             

 

 

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