REG - Loungers PLC - Audited results for the 52 weeks ended 17 April 22
13/07/2022 07:00
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RNS Number : 2453S Loungers PLC 13 July 2022
13 July 2022
Loungers plc
("Loungers" or the "Group")
Audited results for the 52 weeks ended 17 April 2022
A record year of financial and operational progress
Recently opened our 200(th) site, with ambitious roll-out plans now expanding
to 30 sites per year
Loungers, a leading operator of all day café/bar/restaurants across the UK
under the Lounge and Cosy Club brands, is pleased to announce its audited
results for the 52 weeks ended 17 April 2022 ("FY22").
Finance Summary
52 weeks ended 17 April 2022 52 weeks ended 18 April 2021 52 weeks ended 19 April 2020
£'000 £'000 £'000
Revenue 237,291 78,346 166,502
Adjusted EBITDA 53,639 13,913 28,767
Adjusted EBITDA margin (%) 22.6% 17.8% 17.3%
Adjusted EBITDA (IAS17) 42,319 3,530 18,813
Adjusted EBITDA (IAS17) margin (%) 17.8% 4.5% 11.3%
Operating profit / (loss) 28,437 (7,728) (6,716)
Adjusted operating profit / (loss) 34,001 (3,946) 11,965
Adjusted operating profit margin (%) 14.3% (5.0%) 7.2%
Profit / (loss) before tax 21,605 (14,722) (14,781)
Diluted earnings / (losses) per share (p) 17.0 (10.9) (14.0)
Cash generated from operating activities 69,626 12,031 24,397
17 April 2022 18 April 2021 19 April 2020
£'000 £'000 £'000
Non-property net debt 1,025 34,245 34,956
Financial and Operational Highlights
· Achieved record revenue of £237.3m (up 203% from FY21) and
Adjusted EBITDA of £53.6m (up 286% from FY21)
· Consistent out-performance of the wider sector by more than 15%
over the year, according to the Peach Tracker (the established industry sales
monitor for the UK pub, bar and restaurant sectors)
· A record 27 new sites opened in the year, with our 200(th) site
just opened
· Balance sheet strength significantly enhanced, with non-property
net debt reduced by £33.2m to £1.0m
· Increased to five build teams and now have the capacity to open
around 32 new sites per year
· Very strong operational performance facing down the challenges of
the "pingdemic", recruitment, and Omicron
· Continuous evolution: re-working of the Cosy Club menu and
elevation of the Cosy Club proposition, ongoing kitchen investment and
completion of the kitchen management system roll-out
· App ordering now accounts for over 40% of Lounge sales and is
leading to higher average spend and faster service
· Further investment in the leadership team and operational
structure to ensure we can continue to deliver operational intensity and
growth
· Continued investment in and focus on our employer proposition
Current Trading and Outlook
Since the year end our LFL sales have been +17.9% on a three year basis,
representing a 15% out-performance of the Peach Tracker. We are delighted
with how the business is trading and, despite the well-documented
macroeconomic challenges, have not yet seen any shift in how our customers are
behaving.
Whilst the short-term outlook is of course uncertain, we remain confident in
the future prospects for Loungers given the quality and value of our all-day
offering. In addition, our pipeline of new openings is well-developed and we
continue to see a wealth of excellent opportunities to occupy prime pitches on
the high street. This, combined with our recently expanded fit-out teams,
means that we now have the capacity to roll-out over 30 sites a year and
expect to have at least 500 sites in the UK across both of our brands in the
future.
Nick Collins, Chief Executive Officer of Loungers said:
"These results demonstrate the extent to which Loungers has thrived over the
past year, achieving a record number of openings, record underlying like for
like sales growth and a record level of profits. We are benefitting from
changes in consumer behaviour, with more people staying local, working from
home, and supporting their local community and high street. We are delighted
to have just opened our 200(th) site, and to be announcing today that we are
increasing our roll-out target for site openings to 30 for this year.
Whilst the short-term economic outlook is challenging, we are in an excellent
position to weather the storm and to take advantage of growth opportunities
coming out of it. We have a strong balance sheet, a very capable and highly
motivated team and an affordable, value for money all-day offer with enormous
scope for further expansion across the UK."
Analyst Presentation Webcast
An analyst presentation will be held today, Wednesday 13 July 2022, at 9:30am
(BST). Participants wishing to join the webcast should contact
loungers@powerscourt-group.com (mailto:loungers@powerscourt-group.com) to
request details.
(1) Adjusted EBITDA is calculated as operating profit before depreciation,
pre-opening costs, exceptional costs, and share-based payment charges.
For further information please contact:
Loungers plc Via Powerscourt
Nick Collins, Chief Executive Officer
Gregor Grant, Chief Financial Officer
Houlihan Lokey UK Limited (Financial Adviser and NOMAD) Tel: +44 (0) 20 7484 4040
Sam Fuller / Tim Richardson
Liberum Capital Limited (Joint Broker) Tel: +44 (0) 20 3100 2000
Andrew Godber / John Fishley
Peel Hunt LLP (Joint Broker) Tel: +44 (0)20 7418 8900
Dan Webster / George Sellar
Powerscourt (Financial Public Relations) Tel: +44 (0) 207 250 1446
Rob Greening / Nick Hayns / Elizabeth Kittle
Notes to Editors
Loungers operates through its two complementary brands - Lounge and Cosy Club
- in the UK hospitality sector. A Lounge is a neighbourhood café/bar
combining elements of coffee shop culture, the British pub and dining. There
are 169 Lounges nationwide. Lounges are principally located in secondary
suburban high streets and small town centres. The sites are characterised by
informal, unique interiors with an emphasis on a warm, comfortable atmosphere,
often described as a "home from home". Cosy Clubs are more formal
bars/restaurants offering reservations and table service but share many
similarities with the Lounges in terms of their broad, all-day offering and
their focus on hospitality and culture. Cosy Clubs are typically located in
city centres and large market towns. Interiors tend to be larger and more
theatrical than for a Lounge, and heritage buildings or first-floor spaces are
often employed to create a sense of occasion. There are 32 Cosy Clubs
nationwide.
Chairman's Statement
Overview
A record year of financial and operational progress
FY22 was a record year for Loungers, with sales of £237.3m, Adjusted EBITDA
of £53.6m (IFRS16), and 27 new sites opened. We have come through the
challenges of the Covid period with flying colours, and we are a stronger,
more resilient and indeed more ambitious business than ever before. All in
all, our performance during the year was a truly outstanding achievement
against an extraordinarily challenging and changeable backdrop.
At the start of the financial year, we only had roughly a third of our estate
open - and even then those sites were only able to trade outside. On 17 May
2021 the entire estate recommenced trading, which for some of our sites was
the first time that they had been able to welcome customers since early
November 2020. We had planned meticulously to ensure that we hit the ground
running as quickly as possible, and as a result our sites were busy straight
from the off.
However, as we went into a very busy summer, the 'pingdemic', rising Covid
cases, and significant recruitment challenges caused severe disruption to our
ability to trade normally. We found ourselves having to take extremely
difficult decisions and to make compromises about how we operated. Throughout
this time, the commitment, professionalism and dedication of our teams never
wavered, and it was humbling to witness the way in which they helped to
navigate the business through the unprecedented challenges of that summer.
As we went into autumn, a certain amount of stability returned and we
regrouped with a sense of optimism that the pandemic and its consequences
might finally be behind us. However, we could already see then the warning
signs of economic trouble ahead as inflation started to soar, and we began to
plan accordingly.
As it transpired, Covid was far from over and the Omicron variant wreaked
havoc throughout the Christmas season, which is of course a critically
important time for the hospitality sector. Whilst sales at Lounge held up well
during December, we saw widespread Christmas party cancellations at our 31
Cosy Clubs. Although some of those parties rebooked with us in the new year,
it clearly wasn't enough to compensate for the momentum that was lost in
December. We are hopeful that, given the pent-up consumer demand after two
years of lost Christmas party celebrations, December 2022 should be a bumper
month.
As we entered 2022, we found ourselves up against a new set of challenges, and
the short-term outlook is looking exceptionally uncertain for many businesses.
However, in the case of Loungers, our consistent outperformance relative to
the wider hospitality sector is evidence of a team and a business that knows
how to deliver on its strategic objectives whilst having to deal with all
manner of challenges and distractions. Our performance in FY22 is clear
evidence of that ability, and I see absolutely no reason why this will be any
different in FY23 and beyond - especially as we have emerged from Covid as a
more resilient, agile and adaptive business than ever before.
Looking ahead
Further challenges on the horizon, but well placed to take advantage given
previous experience of trading successfully through a downturn
The next few months will undoubtedly be challenging, albeit at the time of
writing we are not seeing much in our trading performance to suggest that
there has been any change to consumer sentiment.
However, we have been planning for these headwinds for months now and I
believe we are not only positioned to weather a significant decline in
consumer spending - or even a recession - but that we can actually take
advantage of the circumstances.
The reason for this confidence is that as a business we have experience of
dealing with a seismic economic shock before, having traded successfully
through the 2008 financial crisis. In 2005/06 the economy was buoyant and
consumer spending was elastic, which was exploited by the sector, and
specifically by casual dining operators who confidently increased their
prices. As a small management team at the time, we took the view then that we
should minimise any price increases and hold on to our value for money
credentials. We resisted making short-term gains in exchange for being fully
prepared should a recession happen. Ultimately this approach paid dividends,
and when recession hit in the autumn of 2008 we didn't need to alter our
proposition or change our pricing as the consumer recognised that we already
offered great value for money.
By contrast, many of our peers found they had driven price increases too
strongly and resorted to discounting in a desperate attempt to drive volume,
which ultimately ended up undermining their offer for years afterwards.
By early 2009 we were confident that we would not only continue to trade well
- and ahead of our peers - but also that we should continue to accelerate our
rate of growth. As our peers retrenched we expanded, taking advantage of an
uncompetitive landscape for new sites and attracting talent to a business that
was recognised to be winning. In September 2008 we had nine sites and by the
end of 2011 we had 20 sites, with a further nine new sites planned for
2012. We were brave, ambitious, creative, and believed that we could build
something special, and these same attributes have never been more alive in the
business as they are today.
In my view, there are similar trends at play as we sit here 14 years on.
Following the end of the third lockdown in 2021 we have seen prices in the
hospitality sector surge. While some of these increases have been driven by a
degree of necessity as supplier prices increased, some have also been driven
by businesses trying to make up for months of lockdown. We have had to
increase our prices in a targeted way, but by nowhere near as much as our
peers. We have deliberately held back from doing so because we remember our
experience in 2008 and how offering great value for money in an environment
where the consumer is squeezed puts you at a distinct advantage. We are also
extremely well placed to meet the challenges of incoming cost pressures to the
business, as detailed in the CEO report.
We have just opened our 200(th) site - a Cosy Club in Chester - and on 27
August the business will celebrate 20 years since we opened our first tiny
10-table café/bar called Lounge on North Street in Bedminster, Bristol. After
two decades of sustained growth, we now employ over 6,000 people and we have a
remarkably talented team lead by CEO Nick Collins and supported by a really
engaged Board. Despite the near-term challenges, we remain hugely optimistic
and ambitious for the future - particularly as it genuinely feels as if we are
still just getting started.
Alex Reilley
Chairman
13 July 2022
Chief Executive's Statement
Introduction
I am pleased to report on a very successful year for Loungers. One in which
we, on the whole, had the opportunity to put Covid behind us and begin to
truly demonstrate the strength of the Loungers offer, the quality of both our
brands, and the expertise of our people. To pick just a few highlights from
what was a record year, we:
· Delivered a sector leading three year LFL sales performance of
22.1% (including VAT benefit)
· Opened a record 27 new sites
· Reduced net debt (excluding IFRS16 lease liabilities) to £1.03m
· Delivered IFRS16 Adjusted EBITDA of £53.6m, a record for the
business
Whilst we continue to face a number of well-publicised headwinds, Loungers is
uniquely well-placed within the leisure sector to thrive through a period of
economic uncertainty and emerge stronger on the other side. Our key strengths
include:
· Broad appeal across all parts of the day
· Value for money offer benefits from trading down
· Community driven offer benefitting from working from home and
staying local
· Scale purchasing opportunities and operational gearing mitigating
margin pressure
· Excellent property opportunities driving roll-out
· Self-financing roll-out
· Best in class management team, and outstanding talent across the
entire business
Record sales performance
Throughout the year the business consistently out-performed the sector by in
excess of 15%, delivering robust like for like sales growth in both our Lounge
and Cosy Club brands. This out-performance shouldn't be a surprise - Loungers
has consistently out-performed the market for more than seven years. The table
below shows our LFL sales performance for the 48 weeks from full re-opening on
17 May 2021 to 17 April 2022 on both a net (including the benefit of the VAT
reduction) and gross (excluding the one-off benefit of the VAT reduction)
basis.
Three year LFL
48 weeks to
17 April 2022
Net - including VAT benefit +22.1%
Gross - excluding VAT benefit +14.2%
The reasons for this out-performance are simple, we are serving more customers
than we were pre-Covid and our customers are on average spending more. This
isn't a post-Covid blip; it is the product of our relentless focus on our
strategic priorities, combined with shifts in consumer behaviour.
· We continue to innovate and evolve our food and drink menus, with
our focus on value for money remaining at the forefront of our thinking.
· We continue to benefit from our focus on hospitality, atmosphere
and community at a time when other operators are finding it more difficult to
maintain standards in the face of recruitment difficulties.
· We continue to benefit from an increase in average spend as a
result of the introduction of our order at table app, which now accounts for
40% of all Lounge sales.
· We are serving our customers more quickly and more consistently
as a result of our focus on kitchen systems, processes and training, and
· We are benefitting from changes in consumer behaviour, with more
people staying local, working from home, and supporting their local community
and local high street.
While there is little doubt we are entering into a period in which consumer
discretionary spending will come under pressure we remain confident that we
are well-placed to continue to grow our sales within this environment:
· We remain excellent value for money. Over the past 12 months we
have taken considerably less price than the sector in general as we recognise
value is a key differentiator.
· We have a broad, all-day offer in both Lounge and Cosy Club, with
customers enjoying both venues for a variety of occasions across the day and
evening. We are not overly reliant on any specific day-part or celebration
spend.
· We know from the 2008 recession that we benefit from people being
more discerning about their leisure spend, and people staying local.
Scale and operational flexibility
Along with the rest of the sector, we are experiencing significant input cost
inflation. We aren't immune to this pressure, but we believe we are better
placed than most to mitigate it.
Our continued growth means we are attractive to suppliers and can benefit from
increasing scale. During FY23 we will tender some of our food purchasing as we
seek to consolidate our supply chain and take logistics costs out of the
business. This is an ongoing process as we move over the medium-term towards a
fully consolidated model. In addition, our food development teams continue to
evolve the menu in the face of ingredient shortages and price increases. We
don't have a reliance on any single cuisine, we can sell whatever we want, and
this allows us to move with trends and be very fleet of foot. We have
significant expertise in both food and drink development and can engineer our
menus away from ingredients that have seen short-term cost increases and use
stretch to protect our margin whilst maintaining value for money. Added to
this, we continue to see the benefit from our investment in our 'kitchen
Resets' and the margin upside from increased uniformity across the estate.
Our utility costs were hedged in May 2020 until September 2024, giving us
protection from price rises in the medium term. Elsewhere on the P&L we
expect to benefit from operational gearing as our central costs are spread
over an increasing number of sites.
Loungers has a fantastic track record of delivering consistent like for like
sales growth across the whole estate, in both older and newer sites. We have
achieved this via an unwavering focus on the customer, our product and our
hospitality. This will remain unchanged in FY23, and I anticipate that any
resulting margin impacts will be modest, short-term and compensated for by our
sales performance.
Investing in our team
It has been an important year in the evolution of our People strategy. Covid
and the various lockdowns (and to a lesser degree Brexit) have resulted in a
shift in attitudes towards working in hospitality. As a result of this
Loungers, along with the rest of the hospitality sector, had to re-evaluate
both our role as an employer and how we make ourselves more attractive as an
employer, in particular to the younger generations. During the year it became
apparent that there was a real recruitment and retention challenge in our
sector, varying in impact across England and Wales. It rarely impacted our
ability to trade at full capacity, and it did not impact our roll-out and the
opening of new sites.
During the year we launched 'the Commitments' setting out very publicly to our
team (and prospective employees) the values that we want to represent as an
employer. Included within these were commitments to (i) respect everyone's
time off, (ii) to pay fairly, (iii) to rota fairly, (iv) to focus on
everyone's development and progression and (v) to ensure everyone is made
welcome. These weren't new values to Loungers, but we wanted to make sure
everyone in the business knew what we stood for and to be held to account.
There are no easy wins here - the sense we get from our team is that it is not
about pay. It is about flexibility, working hours, team environment,
progression and development, fairness and respect. By setting out our values,
we want our team to hold us to account, which will allow us to become an even
better employer.
Towards the end of the year we significantly restructured the operations team
within the Lounge business. With the continued growth of the business, this is
necessary every two to four years. The restructure saw us add one Operations
Director, two Regional Operations Managers and five Operations Managers/Chefs.
It also saw us reduce the 'site to ops team ratio' at every level. At the
Operations Managers/Chefs level we now have a ratio of 5:1, which is
unprecedented in our sector. This consistently low ratio has allowed for our
intensity of operation and our focus on detail. Pleasingly all of the new
roles were filled with internal promotion candidates. We continue to lead the
way in providing outstanding career progression opportunities within our
sector.
New site openings and roll-out
During the year we opened 27 sites, a record number of new openings, and after
an enforced pause due to Covid, our roll-out programme is very much back on
track. We are opening high-performing sites, achieving above average levels of
sales and EBITDA. This reflects the market for new sites and we continue to
see really strong opportunities for prime pitch Lounges and Cosy Clubs in
target high street locations where we know we will trade well. The year saw a
bias towards Lounge openings - of which there were 26 vs one Cosy Club - which
is a reflection of how Lounges can thrive in different location types.
Highlights include openings in:
· Smaller towns such as Matlock (Ostello Lounge) and Pontypridd
(Gatto Lounge)
· Larger towns such as Basildon (Orleto Lounge) and Shrewsbury
(Floro Lounge)
· Greater London locations such as Ealing (Castano Lounge)
· Retail centres such as Fosse Park in Leicester (Volpo Lounge)
· Coastal locations benefiting from staycations such as Aberystwyth
(Athro Lounge) and Bognor Regis (Bonito Lounge)
The pipeline is well-developed and we continue to see a wealth of excellent
opportunities, whilst maintaining our sector-leading sub 6% rent to revenue
ratio. It remains the case that we typically convert former retail units or
bank units, occupying prime pitches on the high street. As a result of our
confidence in both our operational performance in opening sites and the range
of opportunities we are seeing, we have decided to increase the rate of
roll-out. We have recently been opening at a rate of around 25 sites per year,
using four in-house site fit-out teams. In the coming weeks we will be
increasing to five fit-out teams and this will give us annual capacity of
around 32 sites a year. For this year (FY23) we expect to open around 30 sites
given the mid-year introduction of the additional team. We continue to have
real confidence over the potential scale of the business, with the capacity to
open at least 500 sites across both brands in the UK.
In the current year we anticipate opening at least four Cosy Clubs (including
Chester, Milton Keynes, Harrogate and Canterbury). Operating in city centres
and larger market towns, there are fewer Cosy Club opportunities overall than
Lounge and as a result, the number of Cosy Club openings each year can vary.
The Cosy Clubs continue to go from strength to strength and this year is an
opportune time to have several openings to capitalise on the momentum within
the brand. We are particularly pleased with the impact of the Project
Finesse roll-out, which incorporated a more elevated menu and guest experience
alongside more sophisticated design and furniture that is more fitting for the
Cosy Club surroundings.
Innovation and evolution
The most significant change during the year was the re-working of the Cosy
Club food menu. We saw the opportunity to elevate the proposition and take
even greater pride in the offer. The new menu launched across the business
last autumn, and saw the introduction of small plates on the menu, wider
stretch with more expensive dishes at one end whilst retaining our value for
money at the other. The menu launch was accompanied by an overhaul of our
steps of service and an investment in our furniture which has altogether
really pushed the brand on. We are delighted with the impact this is having
across the Cosy Club estate.
Right at the end of the year we saw a considerable menu change in Lounge with
some 40% of the dishes either being replaced or improved.
Our investment in the kitchens continues, with the final 60 Lounges now being
improved via our Reset programme, benefitting from the new equipment and
standardised layouts.
We have also more formally defined our ESG strategy. I believe it is important
that this is driven by our teams rather than purely in the boardroom and as
such it is based around four core pillars:
1. Looking after our teams well and being an inclusive employer
2. Bringing joy to local places across the country
3. Delivering our hospitality sustainably
4. Being proud of what we put on the plate
We already achieve a great deal within these categories, but importantly have
identified areas where we can improve and are building a framework to allow us
to deliver.
Management team
We remain very focused in evolving and building the strongest management team
in the sector to facilitate the successful roll-out of our brands. During the
year Tom Trenchard, Property Director, took over responsibility for the
construction side of the business, joining together the site acquisitions and
build businesses under one leader. I am also delighted to announce the
appointment of Guy Youll as Chief People Officer. Guy joins the business in
the autumn and will lead the people side of the business and build on the
important work we have done this year. We continue to focus a great deal on
developing our employees' careers and there continue to be many positive
internal success stories as we grow.
Nick Collins
Chief Executive Officer
13 July 2022
Financial Review
Overview
The year to 17 April 2022 represents the first year in our three years as a
public company where we have ended the year with all our sites open, trading,
and free of Covid restrictions. Indeed, if we exclude the first four weeks
of the year where we could trade external areas only, and excepting the impact
of Omicron on our Christmas trading, then the past year has very much seen a
return to normality.
The financial highlights below demonstrate the underlying resilience and
relevance of the Loungers business, and the positive benefits of that return
to normality.
IFRS 16
Year ended 17 April 2022 Year ended 18 April 2021
£000 £000
Revenue 237,291 78,346
Operating profit / (loss) 28,437 (7,728)
Operating margin (%) 12.0% (9.9%)
Profit / (loss) before tax 21,605 (14,722)
Fully diluted earnings / (losses) per share (p) 17.0 (10.9)
Net cash generated from operating activities 69,626 12,031
Net debt 120,627 144,823
Year on year revenue was up by £158.9m to a record £237.3m. Whilst Covid
restrictions meant our sites could only trade in 34% of the available weeks in
the comparative year, strong like for like ("LFL") sales growth and the
strength of our new site openings also played a significant role in delivering
the year on year sales uplift. Accompanying the sales growth, operating
profit increased to £28.4m from an operating loss of £7.7m in the prior
year, with operating margins growing to 12.0%. We continued to benefit from
various government support measures during the year (notably the VAT
reduction) and they played a part in delivering our strong operating margin
performance.
The strong trading and profit performance, allied to the recovery in the
Group's negative working capital position that the resumption of full trading
allowed, resulted in net cash generated from operations of £69.6m. Post
investing and financing outflows net cash balances increased by £26.3m and
were instrumental in the reduction in net debt of £24.2m.
Throughout this document we use a range of financial and non-financial
measures to assess our performance. A number of the financial measures, for
example Like for Like ("LFL") sales and Adjusted EBITDA are not defined under
IFRS and accordingly they are termed Alternative Performance Measures
("APMs"). The Group believes that these APMs provide stakeholders with
additional useful information on the underlying trends, performance and
position of the Group and are consistent with how business performance is
measured internally. Adjusted EBITDA is also the measure used by the Group's
banks for the purposes of assessing covenant compliance.
The table below summarises the key APM's under both IFRS16 and IAS17 and
covers the past three financial years. The negative impact of Covid
restrictions and the positive impact of government support continues to make
comparisons difficult. The year ended 19 April 2020 is arguably a more
sensible comparator in that its broadly five weeks of total lockdown and two
weeks of Covid impact is not wholly dissimilar to the four weeks of limited
external trading and the Omicron impacted December 2021 that was suffered in
the year to 17 April 2022.
Year ended 17 April 2022 Year ended 18 April 2021 Year ended 19 April 2020
£000 £000 £000
Sites at year end 195 168 165
New sites opened 27 3 21
Revenue 237,291 78,346 166,502
Adjusted EBITDA - IFRS16 53,639 13,913 28,767
Adjusted EBITDA margin (%) - IFRS16 22.6% 17.8% 17.3%
Adjusted EBITDA - IAS17 42,319 3,530 18,813
Adjusted EBITDA margin (%) - IAS17 17.8% 4.5% 11.3%
Net debt - IAS17 1,025 34,245 34,956
Revenue of £237.3m compares to £166.5m in the year to 19 April 2020 and
reflects the positive impacts of strong LFL sales performance, a record 27 new
sites opened during the financial year, and the reduced VAT rates on food and
non-alcoholic drinks that ran to 31 March 2022, and delivered a benefit of
£15.1m. The Group has delivered consistently strong LFL sales, whether
measured on a two year (40 weeks where trading not impacted by lockdown in the
current or comparative year) or three year basis (48 weeks where trading not
impacted by lockdown in the current year) and whether including or excluding
the benefit of the VAT reduction:
Two year LFL Three year LFL
40 weeks to 48 weeks to
20 February 2022 17 April 2022
Net - including VAT benefit +17.7% +22.1%
Gross - excluding VAT benefit +9.3% +14.2%
Adjusted EBITDA (IAS17) of £42.3m compares to £18.8m in the year to 19 April
2020, with a corresponding increase in Adjusted EBITDA margin from 11.3% to
17.8%. The reduction in the VAT rate on food and non-alcoholic drink was the
most substantial part of that margin expansion, contributing 5.6% to the
margin growth of 6.5%.
Non-property net debt reduced to £1.0m, a year on year reduction of
£33.2m. This reflects not only the strong trading and EBITDA performance
but also the rebuilding of the Group's negative working capital position.
Impact of UK Government Support Initiatives
In addition to the VAT reduction referenced above the Group benefited over the
year from the continuation of a number of UK Government initiatives introduced
to mitigate the impact of Covid-19, notably:
· The Coronavirus Job Retention Scheme ("CJRS") - The Group
continued to benefit from the CJRS through to the ending of the scheme on 30
September 2021. During the year under review the Group received a total of
£4.1m of funding under the CJRS. A total of £2.1m was recognised in the
statement of comprehensive income in the year, offsetting site payroll costs
on the cost of sales line and head office payroll costs on the administrative
expenses line. Cash receipts included £2.0m that was recognised in the FY21
results.
· Business Rates Relief - The Group's sites have benefitted from
the business rates holiday that ran to 30 June 2021, and subsequently from the
66% reduction (capped at £2.0m) that ran to 31 March 2022. During the year
to 17 April 2022 the Group has benefitted by £3.3m.
· Support Grant Funding - In the year under review the Group has
recognised £2.5m of grant funding received under the Restart Grant scheme.
This income has been recognised under other income.
The Corporate Insolvency and Governance Bill provided a range of protections
for tenants and allowed the Group to continue to work collaboratively with all
of its landlords, seeking to reach agreement over an equitable share of the
pain of lockdowns and trading restrictions. The Group has recognised £0.8m
in the year in respect of rent waivers.
Long Term Employee Incentives
The focus on employee engagement and retention has been unstinting throughout
the year, and share awards continue to play a significant role in these
efforts. During the year the Group granted further share awards under the
employee share plan (574,000 shares) and the senior management restricted
share plan (435,334 shares). These awards were made to a total of 1,206
employees who work across the business, predominantly at site level, and in
hourly paid and salaried positions. In addition, awards covering 673
employees and in respect of 338,664 shares vested in the year.
The Group recognised a share based payment charge in the year of £3.2m (2021:
£2.0m), the charge covering the employee share plan, the senior management
restricted share plan and the value creation plan.
Finance Costs and Net Debt
Finance costs of £6.9m (2021: £7.0m) include IFRS 16 lease liability finance
costs of £5.7m (2021: £5.6m) and bank interest payable of £1.2m (2021:
£1.4m).
Net debt at the year end including property leases of £120.6m (2021:
£144.8m) represented a significant decrease over the prior year, with strong
trading and profitability, allied to the rebuilding of the Group's negative
working capital position, offsetting the impact of adding new lease
liabilities of £16.4m.
The Group's capital structure includes a £32.5m term loan due for repayment
in July 2024. The Group entered into an interest rate hedge to fix SONIA at
0.7% until July 2022. Whilst the Group's significant positive cash balances
provide an element of natural interest rate hedge the Board continues to
consider the options for hedging the interest rate risk on the outstanding
term loan.
In April 2020 the Group entered into an incremental £15m RCF facility to
provide additional liquidity should it be required during the Covid
lockdowns. It is envisaged that this facility, which has never been drawn
upon, will be allowed to expire at its term date in October 2022.
Taxation
The Group has reported a tax charge of £3.7m for the year to 17 April 2022
(2021: credit of £3.6m) and at year end carried a corporation tax receivable
of £0.1m (2021: £nil payable or receivable) and a deferred tax asset of
£1.4m (2021: £3.8m). The corporation tax payable in respect of the year of
£1.3m benefits from the introduction of the 130% capital allowance super
deduction. During the year corporation tax payments on account of £1.4m
were made.
Cash Flow and Capital Expenditure
Net cash generated from operating activities of £69.6m (2021: £12.0m)
reflects a working capital cash inflow of £19.7m (2021: cash outflow of
£1.3m). The working capital cash inflow has been achieved in spite of a
significant reduction in deferred Covid liabilities. At year end the Group
had settled all bar £1.4m of its deferred Covid liabilities in respect of
outstanding rents and all of its HMRC liabilities (2021: £12.9m outstanding).
Cash outflows in the year in respect of capital expenditure totalled £22.8m
(2021: £7.8m) and compare to the cost of fixed asset additions (excluding
right of use assets) recognised in the year of £26.2m. The lower cash
outflow reflects the rebuild of capital expenditure creditors as the new site
opening programme returned to its pre Covid pace during the year. Capital
expenditure in the year of £26.2m (2021: £5.1m) included £19.6m (2021:
£2.8m) in respect of new site openings.
Key Performance Indicators ("KPI's")
The KPI's, both financial and non-financial, that the Board reviews on a
regular basis in order to measure the progress of the Group are as follows:
Year ended 17 April 2022 Year ended 18 April 2021 Year ended 19 April 2020
£000 £000 £000
Growth Growth / (decline) Growth
New site openings 27 3 21
Capital expenditure (IAS 16 PPE excluding IFRS RoU assets) £26.2m £5.1m £22.8m
LFL sales growth (excluding lockdown periods) +22.1%((1)) +13.3% +4.4%
Total sales growth 302.9% (52.9%) 8.8%
Adjusted EBITDA margin (IFRS 16) 22.6% 17.8% 17.3%
((1) ) Three year LFL calculated over 48 weeks from 17 May 2021 and
including VAT benefit
Going Concern
In concluding that it is appropriate to prepare the financial statements for
the year to 17 April 2022 on the going concern basis attention has been paid
both to the potential impact of further Covid-19 outbreaks on the Group and
also to the current sector headwinds in terms of consumer confidence and
inflationary pressures.
The Group has very successfully navigated the Covid-19 challenges of the past
two years and has emerged with a significantly strengthened balance sheet,
with IAS17 net debt reduced to £1.0m at 17 April 2022 and total liquidity,
excluding the incremental £15m RCF which is assumed to expire in October
2022, of £41.3m.
In order to assess the Group's going concern position the Board has considered
three downside scenarios of the Group's business plan.
- The first scenario assumes a re-emergence of Covid-19 in similar
fashion to the Omicron outbreak of 2021. A sales decline of 20% relative to
the FY23 budget for 12 weeks across December 2022, January and February 2023
has been modelled. This is significantly worse than the impact felt from the
2021 Omicron variant.
- The second scenario looks to model a weakening in consumer
confidence, commencing in July 2022 and accelerating in October 2022 with
sales between 5% and 10% below budget, allied to continuing cost of goods sold
and labour inflation reducing gross margins by 1%.
- The third scenario combines both the above scenarios, resulting,
for example, in sales being 30% below budget across December 2022 to February
2023.
The impact of reflecting the third scenario is to reduce expectations of
Adjusted EBITDA by approximately 54% for FY23 relative to the Group's
budget. Under this scenario the Group is forecast to remain comfortably
within its borrowing facilities and to be in compliance with its covenant
obligations, and accordingly the Directors have concluded that it is
appropriate to prepare the financial statements for the year ending 17 April
2022 on the going concern basis.
Gregor Grant
Chief Financial Officer
13 July 2022
Consolidated Statement of Comprehensive Income
For the 52 Weeks Ended 17 April 2022
Year ended Year ended
Note 17 April 2022 18 April 2021
£000 £000
Revenue 237,291 78,346
Cost of sales (134,369) (46,178)
Gross profit 102,922 32,168
Gross profit before exceptional items 102,922 32,609
Exceptional items included in cost of sales 6 - (441)
Administrative expenses (76,975) (43,950)
Other income 4 2,490 4,054
Operating profit / (loss) 4 28,437 (7,728)
Operating profit / (loss) before exceptional items 28,437 (6,401)
Exceptional items included in cost of sales 6 - (441)
Exceptional items included in administrative expenses 6 - (886)
Finance income 44 46
Finance costs 5 (6,876) (7,040)
Profit / (loss) before taxation 21,605 (14,722)
Tax (charge) / credit on profit / (loss) 7 (3,727) 3,580
Profit / (loss) for the year 17,878 (11,142)
Other comprehensive income:
Items that may be reclassified to profit or loss
Cash flow hedge - change in value of hedging instrument 269 101
Other comprehensive income for the year 269 101
Total comprehensive income / (expense) for the year 18,147 (11,041)
Earnings / (losses) per share Year ended Year ended
Note 17 April 2022 18 April 2021
Pence Pence
Basic earnings / (losses) per share 8 17.4 (10.9)
Diluted earnings / (losses) per share 8 17.0 (10.9)
Consolidated Statement of Financial Position
As at 17 April 2022
Note At 17 April 2022 At 18 April 2021
£000 £000
Assets
Non-current
Intangible assets 113,227 113,227
Property, plant and equipment 9 188,363 165,443
Deferred tax assets 1,355 3,816
Finance lease receivable 579 668
Total non-current assets 303,524 283,154
Current
Inventories 1,919 774
Trade and other receivables 5,466 2,619
Derivative financial instruments 38 -
Cash and cash equivalents 31,250 4,912
Total current assets 38,673 8,305
Total assets 342,197 291,459
Liabilities
Current liabilities
Trade and other payables (56,214) (28,576)
Lease liabilities (8,475) (6,921)
Derivative financial instruments - (231)
Total current liabilities (64,689) (35,728)
Non-current liabilities
Borrowings 10 (32,275) (39,157)
Lease liabilities (111,127) (103,657)
Total liabilities (208,091) (178,542)
Net assets 134,106 112,917
Called up share capital 1,127 1,124
Share premium 8,066 8,066
Hedge reserve 38 (231)
Other reserve 14,278 14,278
Retained earnings 110,597 89,680
Total equity 134,106 112,917
Consolidated Statement of Changes in Equity
For the 52 Weeks Ended 17 April 2022
Called up share capital Share premium Hedge reserve Other reserve (Accumulated losses) / retained earnings Total equity
£000 £000 £000 £000 £000 £000
At 19 April 2020 1,025 - (332) 14,278 99,011 113,982
Ordinary shares issued 99 8,066 - - (6) 8,159
Share based payment charge - - - - 1,817 1,817
Total transactions with owners 99 8,066 - - 1,811 9,976
Loss for the year - - - - (11,142) (11,142)
Other comprehensive income - - 101 - - 101
Total comprehensive expense for the 52 week year - - 101 - (11,142) (11,041)
At 18 April 2021 1,124 8,066 (231) 14,278 89,680 112,917
Ordinary shares issued 3 - - - (3) -
Share based payment charge - - - - 3,042 3,042
Total transactions with owners 3 - - - 3,039 3,042
Profit for the year - - - - 17,878 17,878
Other comprehensive income - - 269 - - 269
Total comprehensive income for the 52 week year - - 269 - 17,878 18,147
At 17 April 2022 1,127 8,066 38 14,278 110,597 134,106
Consolidated Statement of Cash Flows
For the 52 Weeks Ended 17 April 2022
Year ended Year ended
17 April 2022 18 April 2021
£000 £000
Cash flows from operating activities
Profit / (loss) before tax 21,605 (14,722)
Adjustments for:
Depreciation of property, plant and equipment 11,187 10,288
Depreciation of right of use assets 8,451 7,567
Share based payment transactions 3,220 2,034
Loss on disposal of tangible assets - 4
Finance income (44) (46)
Finance costs 6,876 7,040
Changes in inventories (1,146) 41
Changes in trade and other receivables (2,698) 3,108
Changes in trade and other payables 23,593 (4,414)
Cash generated from operations 71,044 10,900
Tax (paid) / reclaimed (1,418) 1,131
Net cash generated from operating activities 69,626 12,031
Cash flows from investing activities
Purchase of property, plant and equipment (22,837) (7,808)
Net cash used in investing activities (22,837) (7,808)
Cash flows from financing activities
Issue of ordinary shares - 8,158
Shares issued on exercise of employee share awards (135) (79)
Bank loans repaid (7,000) -
Interest paid (1,101) (1,260)
Interest received 3 -
Principal element of lease payments (6,903) (5,303)
Interest paid on lease liabilities (5,315) (4,910)
Net cash used in financing activities (20,451) (3,394)
Net increase in cash and cash equivalents 26,338 829
Cash and cash equivalents at beginning of the year 4,912 4,083
Cash and cash equivalents at end of the year 31,250 4,912
NOTES TO THE PRELIMINARY FINANCIAL INFORMATION
1. General information
Loungers plc ("the company") and its subsidiaries ("the Group") operate café
bars and café restaurants through two complementary brands, Lounge and Cosy
Club.
The Company is a public company limited by shares whose shares are publicly
traded on the Alternative Investment Market ("AIM") of the London Stock
Exchange and is incorporated and domiciled in the United Kingdom and
registered in England and Wales.
The registered address of the Company is 26 Baldwin Street, Bristol, United
Kingdom, BS1 1SE.
2. Basis of preparation
The consolidated financial statements of the Loungers plc Group have been
prepared in accordance with UK adopted International Accounting Standards and
with the requirements of the Companies Act 2006 as applicable to companies
reporting under those standards.
The financial statements have been prepared under the historical cost
convention, as modified by the revaluation of financial assets and liabilities
(including derivatives) at fair value through profit and loss. The financial
statements are presented in thousands of pounds sterling ('£000') except
where otherwise indicated.
The accounting policies adopted in the preparation of the Financial Statements
are consistent with those applied in the preparation of the financial
statements of the Group for the year ended 18 April 2021.
The auditors' reports on the accounts for the 52 weeks ended 17 April 2022 and
18 April 2021 for Loungers plc were unqualified, did not draw attention to any
matters by way of emphasis, and did not contain a statement under section
498(2) or 498(3) of the Companies Act 2006.
The financial statements for Loungers plc for the year to 17 April 2022 will
be delivered to the Registrar of Companies shortly. The financial
information contained within this preliminary announcement for the periods
ended 17 April 2022 and 18 April 2021 does not comprise the statutory
financial statements of Loungers plc.
In concluding that it is appropriate to prepare the financial statements for
the year to 17 April 2022 on the going concern basis attention has been paid
both to the potential impact of further Covid-19 outbreaks on the Group and
also to the current sector headwinds in terms of consumer confidence and
inflationary pressures.
The Group has very successfully navigated the Covid-19 challenges of the past
two years and has emerged with a significantly strengthened balance sheet,
with IAS17 net debt reduced to £1.0m at 17 April 2022 and total liquidity,
excluding the incremental £15m RCF which is assumed to expire in October
2022, of £41.3m.
In order to assess the Group's going concern position the Board have
considered three downside scenarios of the Group's business plan.
- The first scenario assumes a re-emergence of Covid-19 in similar
fashion to the Omicron outbreak of 2021. A sales decline of 20% relative to
the FY23 budget for 12 weeks across December 2022, January and February 2023
has been modelled. This is significantly worse than the impact felt from the
2021 Omicron variant.
- The second scenario looks to model a weakening in consumer
confidence, commencing in July 2022 and accelerating in October 2022 with
sales between 5% and 10% below budget, allied to continuing cost of goods sold
and labour inflation reducing gross margins by 1%.
- The third scenario combines both the above scenarios, resulting, for
example, in sales being 30% below budget across December 2022 to February
2023.
The impact of reflecting the third scenario is to reduce expectations of
Adjusted EBITDA by approximately 54% for FY23 relative to the Group's
budget. Under this scenario the Group is forecast to remain comfortably
within its borrowing facilities and to be in compliance with its covenant
obligations, and accordingly the Directors have concluded that it is
appropriate to prepare the financial statements for the year ending 17 April
2022 on the going concern basis.
3. New standards, amendments and interpretations adopted
Amendments to accounting standards applied from 19 April 2021 were as follows:
· Interest Rate Benchmark Reform - Phase 2 impacts on IFRS9, IAS39,
IFRS 7, IFRS4 and IFRS16 (effective 1 January 2021).
The application of the above did not have a material impact on the group's
accounting treatment and has therefore not resulted in any material changes.
4. Operating profit / (loss)
The operating profit / (loss) is stated after charging / (crediting):
Year ended Year ended
Note 17 April 2022 18 April 2021
£000 £000
Depreciation of tangible fixed assets 9 11,187 10,288
Depreciation of right of use assets 9 8,451 7,567
Inventories - amounts charged as an expense 53,815 16,804
Fees payable to the company's auditors and its associates:
- For statutory audit services (parent and consolidated accounts) 75 60
- for statutory audit services (subsidiary companies)
75 66
- for tax compliance services - 71
- for tax advisory services - 37
Staff costs (excluding share based payments) 95,779 69,599
CJRS Grant income (2,045) (33,157)
Government support grant income (2,490) (4,054)
Pre-opening costs 2,344 421
Exceptional costs 6 - 1,327
Government support grant income of £2,490,000 relates to income received
under the Re-Start Grant Scheme. The prior year total of £4,054,000 also
included income received under the Retail, Leisure and Hospitality Scheme, and
The Local Restrictions Support Grant Scheme.
5. Finance Costs
Year ended Year ended
17 April 2022 18 April 2021
£000 £000
Bank interest payable 1,190 1,398
Other interest payable 4 -
Finance cost on lease liabilities 5,682 5,642
6,876 7,040
6. Exceptional Items
Year ended Year ended
17 April 2022 18 April 2021
£000 £000
Included in cost of sales
Covid-19 related - 441
Included in administrative expenses
Covid-19 related - 886
- 1,327
The Covid-19 related costs included in cost of sales are in respect of the
write-off of food and drink inventories resulting from the forced closure of
all sites on 4 November 2020, and 30 December 2020.
The Covid-19 related costs included in administrative expenses include the
costs of the removal and storage of furniture and soft furnishings to enable
compliance with social distancing and professional fees incurred in respect of
the amendments made to the Group's banking facilities.
7. Tax credit on loss
The income tax credit is applicable on the Group's operations in the UK.
Year ended Year ended
17 April 2022 18 April 2021
£000 £000
Taxation charged / (credited) to the income statement
Current income taxation 1,266 -
Total current income taxation 1,266 -
Deferred Taxation
Origination and reversal of temporary timing differences 2,408 (2,600)
Adjustments to tax charge in respect of prior years 109 (980)
Adjustment in respect of change of rate of corporation tax (56) -
Total deferred tax 2,461 (3,580)
Total taxation charge / (credit) in the consolidated income statement
3,727 (3,580)
The above is disclosed as:
Income tax credit - current year 3,618 (2,600)
Income tax credit - prior year 109 (980)
3,727 (3,580)
Year ended Year ended
17 April 2022 18 April 2021
£000 £000
Profit / (loss) before tax 21,605 (14,722)
At UK standard rate of corporation taxation of 19% (2021: 19%). 4,105 (2,797)
Expenses not deductible for tax purposes 384 206
Fixed asset permanent differences (815) (9)
Adjustments to tax charge in respect of prior years 109 (980)
Adjustment in respect of change of rate of corporation tax (56) -
Total tax charge / (credit) for the year 3,727 (3,580)
8 Earnings / (losses) per share
Year ended Year ended
17 April 2022 18 April 2021
£000 £000
Profit / (loss) for the year after tax 17,878 (11,142)
Basic weighted average number of shares 102,728,430 102,291,621
Adjusted for share awards 2,464,588 2,076,783
Diluted weighted average number of shares 105,193,018 104,368,404
Basic earnings / (losses) per share (p) 17.4 (10.9)
Diluted earnings / (losses) per share (p) 17.0 (10.9)
The share awards are not considered to be dilutive in the year ended 18 April
2021 as they would have the impact of reducing the losses per share.
9 Property, plant and equipment
Leasehold Building Improvements Motor Vehicles Fixtures and Fittings Right of use asset Total
£000 £000 £000 £000 £000
Cost
At 20 April 2020 54,498 81 53,147 121,480 229,206
Additions 2,330 - 2,790 11,735 16,855
Disposals (160) - (147) (238) (545)
At 18 April 2021 56,668 81 55,790 132,977 245,516
Accumulated depreciation
At 20 April 2020 10,525 22 16,961 35,251 62,759
Provided for the year 3,553 31 6,704 7,567 17,855
Disposals (159) - (144) (238) (541)
At 18 April 2021 13,919 53 23,521 42,580 80,073
Net book value
At 18 April 2021 42,749 28 32,269 90,397 165,443
Cost
At 19 April 2021 56,668 81 55,790 132,977 245,516
Additions 11,190 148 14,816 16,404 42,558
Disposals - (19) - - (19)
At 17 April 2022 67,858 210 70,606 149,381 288,055
Accumulated depreciation
At 19 April 2021 13,919 53 23,521 42,580 80,073
Provided for the year 4,018 32 7,137 8,451 19,638
Disposals - (19) - - (19)
At 17 April 2022 17,937 66 30,658 51,031 99,692
Net book value
At 17 April 2022 49,921 144 39,948 98,350 188,363
Impairment of property, plant and equipment and right of use assets
The Group has determined that each site is a separate CGU for impairment
testing purposes. Each CGU is tested for impairment at the balance sheet
date if there exists at that date any indicators of impairment. All sites
were reviewed in FY20 following the first national lockdown and an impairment
of £9.8m was booked in the FY20 financial statements. All sites have been
tested for impairment in FY22, however following the successful reopening of
all sites in April and May 2021, no further impairment has been booked.
The value in use of each CGU is calculated based upon the Group's latest
three-year forecast. The site cash flows include an allocation of central
costs and ongoing capital expenditure to maintain the sites. The cash flows
exclude any growth capital. Cash flows beyond the three-year period are
extrapolated using the Group's estimate of the long-term growth rate,
currently 2.0% (2021: 2.0%).
The key assumptions in the value in use calculations are the like for like
sales projections for each site, changes in the operating cost base, the
long-term growth rate and the pre-tax discount rate. The post-tax discount
rate is derived from the Group's WACC and is currently 9.0% (2021: 8.0%).
On the basis of the impairment test undertaken the Group has not recognised
any impairment charge in the year to 17 April 2022 (2021: £nil). The cash
flows used within the impairment model are based upon assumptions which, while
prudent, are sources of estimation uncertainty. Management has performed
sensitivity analysis on the key assumptions in the impairment model using
reasonably possible changes in the key assumptions. A reduction in site cash
flows of 10% in each year would result in an impairment charge of
£2,984,000. A 100 basis point increase in the discount rate would result in
an impairment charge of £1,431,000 and a 50 basis point reduction in the
terminal growth rate would result in an impairment charge of £295,000.
10 Borrowings
17 April 2022 18 April 2021
£000 £000
Long term borrowings:
Secured bank loans 32,500 39,500
Loan arrangement fees (225) (343)
32,275 39,157
Secured bank loans
The Group's bank borrowings are secured by way of fixed and floating charges
over the Group's assets.
The facilities entered into at the time of the IPO provide for a term loan of
£32,500,000 and a revolving credit facility ("RCF") of £10,000,000. The term
loan is a five-year non-amortising facility with a margin of 2% above SONIA.
A three-year interest rate swap through to July 2022 was entered into that
fixes SONIA on the full term loan facility at 0.7%.
As a consequence of Covid-19, on 22 April 2020 the Group agreed an incremental
£15,000,000 RCF with its lenders, providing a total RCF of £25,000,000.
This incremental facility was originally due to expire in October 2021,
however, given the prolonged Covid-19 lockdowns on 16 April 2021 the facility
was extended for a further 12 months to October 2022. It is not anticipated
that this facility will be renewed in October 2022.
The term loan and RCF are subject to financial covenants relating to leverage
and interest cover. The agreement reached with lenders on 16 April 2021
included a waiver of the covenant tests due at 18 April 2021 and amendment of
the covenant tests scheduled for 11 July 2021, 3 October 2021 and 26 December
2021. There were no breaches of these tests in the year to 17 April 2022.
At 17 April 2022 the term loan was fully drawn while nothing was drawn on
either of the revolving facilities (2021: term loan fully drawn and
£7,000,000 drawn under the RCF).
11 Analysis of changes in net debt
20 April 2020 Cash flows Non-cash movement 18 April 2021
£000 £000 £000 £000
Cash in hand 4,083 829 - 4,912
Bank Loans - due after one year (39,039) - (118) (39,157)
Lease liabilities (104,939) 10,213 (15,852) (110,578)
Net debt (139,895) 11,042 (15,970) (144,823)
Derivatives
Interest-rate swaps liability (332) - 101 (231)
Total derivatives (332) - 101 (231)
Net debt after derivatives (140,227) 11,042 (15,869) (145,054)
19 April 2021 Cash flows Non-cash movement 17 April 2022
£000 £000 £000 £000
Cash in hand 4,912 26,338 - 31,250
Bank Loans - due after one year (39,157) 7,000 (118) (32,275)
Lease liabilities (110,578) 12,218 (21,242) (119,602)
Net debt (144,823) 45,556 (21,360) (120,627)
Derivatives
Interest-rate swaps liability (231) - 269 38
Total derivatives (231) - 269 38
Net debt after derivatives (145,054) 45,556 (21,091) (120,589)
Non-cash movements in bank loans due after one year relate to the amortisation
of bank loan issue costs.
12 Reconciliation of statutory results to alternative performance measures
Year ended Year ended
17 April 2022 18 April 2021
£000 £000
Operating profit / (loss) 28,437 (7,728)
Exceptional items - 1,327
Share based payment charge 3,220 2,034
Site pre-opening costs 2,344 421
Adjusted operating profit / (loss) 34,001 (3,946)
Depreciation (pre IFRS 16 right of use asset charge) 11,187 10,288
IFRS 16 Right of use asset depreciation 8,451 7,567
Loss / (profit) on disposal of fixed assets - 4
Adjusted EBITDA (IFRS 16) 53,639 13,913
Adjusted EBITDA Margin % (IFRS 16) 22.6% 17.8%
IAS 17 Rent charge (11,745) (10,889)
IAS 17 Rent charge included in IAS 17 pre-opening costs 425 506
Adjusted EBITDA (IAS 17) 42,319 3,530
Adjusted EBITDA Margin (IAS 17) 17.8% 4.5%
Profit / (loss) before tax (IFRS 16) 21,605 (14,722)
IAS 17 Rent charge (11,745) (10,889)
IAS 17 Leasehold depreciation (re landlord contributions) (675) (531)
IFRS 16 Right of use asset depreciation 8,451 7,567
IFRS 16 Lease interest charge 5,682 5,642
IFRS 16 Lease interest income (41) (46)
Loss before tax (IAS 17) 23,277 (12,979)
Net debt (IFRS16) 120.627 144,823
Property lease liability (119,602) (110,578)
Net debt (IAS17) 1,025 34,245
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