REG - Nightcap PLC - Interim Results
13/03/2023 07:00
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RNS Number : 6527S Nightcap PLC 13 March 2023
This announcement contains Inside Information for the purposes of Article 7 of
EU Regulation 596/2014 (which forms part of domestic UK law pursuant to the
European Union (Withdrawal) Act 2018). Upon the publication of this
announcement this Inside Information is now considered to be within the public
domain.
NIGHTCAP
13 March 2023
Nightcap plc
("Nightcap", the "Company" or the "Group")
Interim results for the 26-week period ended 1 January 2023
"Strong trading results despite significant rail strike disruptions"
Key highlights for unaudited results for the 26-week period ended 1 January
2023:
26 weeks ended 1 January 2023 26 weeks ended 53 weeks ended
(Unaudited) 26 December 2021 3 July 2022
(Unaudited) (Audited)
Revenue (£m) 23.5 15.8 35.9
Adjusted EBITDA (£m) 4.1 2.5 6.0
Adjusted EBITDA (IAS17) (£m) 2.0 1.6 3.3
(Loss)/profit from operations (£m) (0.1) (0.0) 1.4
(Loss)/profit before tax (£m) (0.9) (0.5) 0.2
Basic (loss) / earnings per share (pence) (0.50)p (0.39)p 0.06p
Cash generated from operations (£m) 4.1 1.1 2.3
· Revenue growth of 48.7% to £23.5 million as the
Company's strategy to build the leading UK premium bar group continues
successfully.
· Like-for-like* revenue increase of 4.7% for Q2 FY2023
against Q2 FY2022 and 10.1% increase for H1 FY2023 against equivalent period
in FY2019, however, a 5.8% like-for-like*decrease occurred in H1 FY2023
against H1 FY2022, largely due to the ongoing rail strikes.
· IAS17 Adjusted EBITDA increased by 25% to £2.0 million,
despite significant rail strikes held across the UK. Management estimates
that the 13 rail strike days over the period have cost the Company
approximately £1.2 million in EBITDA.
· 30 bars traded throughout the half year period, with 36
bars being operated at the end of the half year period, reflecting the
openings of six new sites - two The Cocktail Club bars, two Tonight Josephine
venues and two Barrio bars during September and October 2022.
· Christmas trading period exceeded expectations with record
amount of corporate Christmas parties, pre-sold events and New Year's Eve
almost entirely sold out across all bars.
· The six additions to the estate during the half year
period along with maturity of the 13 new bars opened since November 2021, will
have a significant impact on both the Group's expected revenue and EBITDA as
the sites reach maturity.
· 13 new sites have traded on average just over six months
at the end of the period, with an early trading and maturity profile that puts
them on track to deliver the Group's target of 75% annual return on investment
(ROI) on total capital invested in new bars in their third year of operation.
Several sites are on track to beat the 75% ROI target in their first year of
operation.
· Cash generated from operations increased by 273% to £4.1
million during the period as the business focussed on maximising returns from
existing and recently opened bars.
· As at 1 January 2023, the Group's net debt was £4.1
million with £0.75 million of the Group's total bank debt scheduled for
repayment during FY2023.
· Management continues to see extremely attractive
opportunities within the property market and look forward to the ongoing
roll-out of all of its key brands.
· Integrated subsidiary operations into one Group structure from
January 2023 resulting in £1.4 million in anticipated annualised efficiency
savings.
· The millennial and Gen Z crowd remain resilient
consumers, with high disposable income, as they continue to enjoy great nights
out.
· Trading has remained resilient since the start of 2023. The
Group continues to trade in line with market expectations and the outlook is
encouraging. Board welcomes potential resolution regarding rail strikes,
although is conscious of the impact that further rail strikes could have.
Sarah Willingham, CEO of Nightcap, commented:
"Nightcap has had a fantastic half year. Our incredible team opened six bars
in six weeks across the country, whilst also delivering a Christmas that
exceeded expectations and records in terms of corporate parties, pre-sold
events and a nearly sold out New Year's Eve across all 36 sites. This was
followed by a significant business integration and streamlining process,
resulting in expected Group savings of £1.4 million annually, whilst
preserving the much loved individual identities of our brands. The new sites
have opened well with trading continuing to build week-on-week all the way
through to the end of February 2023.
"Whilst rapidly building the leading premium bar group in the UK in a very
attractive market for property deals, we continue our focus on strong cost
controls, proven by our impressive cash generation of £4.1 million from
operations during the period thanks to the unwavering dedication of our
talented and highly motivated team.
"We look forward to the second half of the year with confidence and once again
we thank our customers for coming to our sites and enjoying themselves with
friends in a fun, relaxed party atmosphere and leaving knowing they have had a
night to remember."
Investor presentation
Sarah Willingham, Michael Toxvaerd and Toby Rolph will provide a live
presentation relating to the interim results via the Investor Meet Company
platform on 15 March 2023 at 3:00pm GMT.
The presentation is open to all existing and potential shareholders. Investors
can sign up to Investor Meet Company for free and add to meet Nightcap via:
https://www.investormeetcompany.com/nightcap-plc/register-investor
(https://www.investormeetcompany.com/nightcap-plc/register-investor)
Investors who already follow Nightcap on the Investor Meet Company platform
will automatically be invited.
For further enquiries:
Nightcap plc
Sarah Willingham / Toby Rolph / Gareth Edwards email@nightcapplc.com (mailto:email@nightcapplc.com)
Allenby Capital Limited (Nominated Adviser and Broker)
Nick Naylor / Alex Brearley / Piers Shimwell (Corporate Finance) +44 (0) 20 3328 5656
Jos Pinnington / Amrit Nahal / Tony Quirke (Sales and Corporate Broking) www.allenbycapital.com (http://www.allenbycapital.com/)
Bright Star Digital (PR) https://www.brightstardigital.co.uk/ (https://www.brightstardigital.co.uk/)
Pam Lyddon +44 (0) 7534 500 829
pamlyddon@brightstardigital.co.uk (mailto:pamlyddon@brightstardigital.co.uk)
* Like-for-like revenue is same site revenue defined as revenue at only those
venues that traded in the same week in both the current period and comparative
reporting periods.
CHIEF EXECUTIVE OFFICER'S STATEMENT
I am pleased to present Nightcap's unaudited interim results for the 26-week
period from 4 July 2022 to 1 January 2023 (the "Half Year").
TRADING
During the Half Year, the Group's reported revenues increased by 48.7% to
£23.5 million. This represents a like-for-like* revenue increase of 4.7% for
Q2 FY2023 against Q2 FY2022 and a 10.1% increase for H1 FY2023 against the
equivalent period in FY2019, however, it resulted in a 5.8% like-for-like*
decrease for H1 FY2023 against H1 FY2022 largely due to the ongoing train
strikes.
The Board considers that the 10.1% increase in like-for-like* trading against
FY2019, across the businesses acquired since 2021, demonstrates the successful
implementation of the Company's strategy to acquire drinks-led hospitality
groups that are considered to have significant potential for additional value
creation through roll-out and efficiency savings.
As well as rapid, sustainable growth, we continue to focus on our profit
conversion, and in this respect, we are delighted to report a strong Adjusted
EBITDA of £4.1 million (IAS17 Adjusted EBITDA: £2.0 million) for the Half
Year. Whilst this is an increase of over 25% on the comparable period in 2021,
we estimate that the rail strikes had an impact of approximately £1.2 million
on the business at the EBITDA level during the Half Year.
Through very strong Q2 FY2023 trading, led by Christmas, we saw, for the first
time, the underlying long-term potential of the Group's portfolio of 36 bars.
We achieved a 60.9% increase in revenue compared to Q2 FY2022 and a 4.7%
increase on a like-for-like* basis and delivered a Christmas trading period
exceeding expectations with a record amount of corporate Christmas parties,
pre-sold events and New Year's Eve almost entirely sold out across all bars.
FINANCIAL POSITION
As at 1 January 2023, the Group had unaudited cash resources of approximately
£5.5 million (including cash in transit). As at 1 January 2023, the Group had
total bank debt of approximately £9.6 million giving a net debt position of
£4.1 million (excluding lease liabilities). Only £0.75 million of the
Group's total bank debt is scheduled for repayment during FY2023 and the Group
put in place an interest rate cap on the reference base rate (SONIA) fixed at
3% on £7.8 million out of £9.6 million of its total HSBC bank facility.
The Group generated £4.1 million of cash from operations during the Half Year
period, which is an increase of 273% versus the comparative period. Since we
took the decision to slow the rollout and focus on maximising returns from
existing and recently opened bars, the business has enjoyed a significant
improvement in cash generation.
BRANDS
Since the inception of Nightcap in January 2021, we have delivered on our
strategy to acquire strong brands, aimed at the resilient Millennial and Gen Z
market, with simple, replicable business models and nationwide appeal.
As a Group, the recent operational focus has been the integration of
subsidiaries into one Group structure from January 2023, resulting in £1.4
million in anticipated annualised efficiency savings. The focus of the
integration has been to maximise synergies and efficiencies across the three
businesses we had acquired and we now operate as one, much more streamlined
and capable organisation under the Nightcap umbrella. The new structure allows
Nightcap to better manage the continued roll-out, share areas of excellence
across the brands whilst maintaining their individual identities, as well as
simplifying the integration of any potential future acquisitions. We are
confident about the new integrated senior management structure and excited to
see how the positive energy and team dynamic will impact the business through
increased clarity, focus, collaboration and leadership.
During the Half Year, we opened six new sites across The Cocktail Club,
Tonight Josephine and Barrio brands.
Tonight Josephine has now grown to six venues, following the openings of new
sites in Bristol during September 2022 and in Liverpool during October 2022.
In Bristol, Tonight Josephine was the Group's fourth site in the city and
trading has been positive since launch, further proving the success of the
Company's cluster model of trading several different concepts within a very
short walk of each other, increasing footfall to the areas, cross selling our
brunches and nights out - without cannibalizing trade.
Barrio opened two sites during October 2022. These included our Tequila and
Tacos bar in Covent Garden which is now one of the world's largest
Tequila-focused bars with a capacity of 600 guests, as well as a venue in
Watford spread across two-floors. These were the first openings since Barrio
was acquired in November 2021. As at the end of the Half Year period, both
bars had each traded for less than three months with trading building well in
both sites.
The Cocktail Club opened two new bars during the Half Year, an incredible
venue designed by world-famous Matthew Williamson in Birmingham during
September 2022, and our first bar located in the heart of Canary Wharf during
October 2022. Both sites have been trading well ahead of expectations since
opening.
The six additions to the estate during the reporting period along with
maturity of the 13 new bars opened since November 2021, will provide an
increase in expected run rate revenues for the second half of this financial
year.
RAIL STRIKES
Management estimates that the 13 rail strike days over the Half Year will have
cost the Company approximately £1.2 million in EBITDA as a consequence of the
deliberate targeting of mainly Thursdays and Saturdays as strike days, two of
the three most lucrative weekly trading days for the Company and the
hospitality industry as a whole.
PROPERTY
Management continues to see very attractive opportunities within the property
market having opened bars in some of the best placed sites in its target
cities. We have received a number of significant financial contributions
from landlords and believe that this property landscape will continue for a
lot longer. With the strong financial performance of the Half Year,
alongside a more granular understanding of the short-term impact of rail
strikes, we look forward to the ongoing roll-out of all our key brands.
As a result of the maturity profile associated with the opening of new bars,
the Group's management is expecting to achieve the Group's target of 75% ROI
on total capital invested in new bars in their third year of operation.
The Group has opened a total of 13 new sites since listing in January 2021,
investing £10.3 million in new site openings. On average these sites had been
open for just over six months at the end of the period. Early trading has been
positive, with several being on track to beat the 75% third year ROI target
already in their first year of operation.
COSTS
As previously reported, we continue to be exposed to ongoing macro-economic
pressures which are mitigated against as follows:
· Energy - The Group is on fixed electricity rates on the majority of
the estate with very low gas consumption. Electricity prices have been
reducing in recent months and in recent weeks we are now able to fix new
contracts below our forecasted rates as sites come out of fixed contracts.
· Supply chain price pressures - The Group has fixed supplier contracts
entered into during 2022 protecting profit margins which remain stable. The
significant increase in revenue continues to improve the Group's negotiating
position with key suppliers.
· Wage inflation - Labour shortages have reduced along with upward
wage pressures as we are already paying National Living Wage across the
Company.
· Rail Strikes - These continue to have the most significant
short-term impact on our sales. Rail strikes have been ongoing since the
beginning of the period. Whilst these may continue throughout H2 FY2023 the
Company is now better positioned to manage labour costs on strike days with
the hope and expectation that a resolution will be found over the coming
period.
CURRENT TRADING AND MARKET OUTLOOK
Trading has remained resilient since the start of 2023. The Group continues to
trade in line with market expectations and the outlook is encouraging. Whilst
the Board welcomes a potential resolution regarding rail strikes, we are
conscious of the impact that further rail strikes or other major interruptions
could have.
The challenges facing the economy persist, but the outlook for the industry is
stabilising with only the potential for further rail strikes currently
providing significant disruptions to trading. Whilst our teams are working
tirelessly to mitigate cost pressures, we are pleased that our core market of
Millennial and Generation Z customers are still showing strong demand.
The business has a premium and well invested portfolio of bars which is well
positioned in the market to see continued trading growth and weather any
challenges it faces.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE 26 WEEKS ENDED 1 JANUARY 2023
26 weeks ended 26 weeks ended 53 weeks ended
01 January 2023 26 December 2021 03 July 2022
(Unaudited) (Unaudited) (Audited)
Note £'000 £'000 £'000
Revenue 23,513 15,786 35,943
Cost of sales (4,736) (3,294) (7,297)
Gross profit 18,777 12,492 28,646
Administrative expenses (19,102) (12,521) (27,404)
Other income 231 12 165
Adjusted EBITDA 4,094 2,527 6,036
Share based payments (102) (198) (345)
Profit / loss on disposal of right of use asset 1 - -
Depreciation (2,541) (1,654) (3,931)
Amortisation of intangible assets (313) (207) (549)
Exceptional items 3 (314) (353) (84)
Acquisition related transaction costs - - 866
Pre opening costs (919) (131) (442)
Impairment - - (143)
(Loss) / profit from operations (94) (17) 1,407
Net finance expense 4 (835) (473) (1,169)
(Loss) / profit before taxation (930) (490) 238
Tax credit on profit / (loss) 5 169 33 262
(Loss) / profit and total comprehensive (loss) / profit for the period (761) (457) 500
(Loss) / profit for the period attributable to:
- Owners of the parent (991) (737) 114
- Non-controlling interest 230 280 386
(761) (457) 500
26 weeks ended 26 weeks ended 53 weeks ended
01 January 2023 26 December 2021 03 July 2022
Note pence pence pence
Earnings per share attributable to the ordinary equity holders of the parent
(Loss) / earnings per share
- Basic 6 (0.50) (0.39) 0.06
- Diluted 6 n/a n/a 0.06
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 1 JANUARY 2023
01 January 2023 26 December 2021 03 July 2022
(Unaudited) (Unaudited) (Audited)
Note £'000 £'000 £'000
Non-current assets
Goodwill 9,751 9,280 9,751
Intangible assets 4,318 4,928 4,604
Property, plant and equipment 7 13,755 6,806 9,109
Right of use assets 37,684 21,065 26,462
Derivative financial asset 249 - -
Other receivable 876 417 699
Total non-current assets 66,633 42,496 50,625
Current assets
Inventories 1,019 611 554
Trade and other receivables 2,433 1,675 2,005
Cash and cash equivalents 4,930 9,449 5,353
Total current assets 8,381 11,735 7,911
Total assets 75,015 54,231 58,537
Current liabilities
Loans and borrowings 9 (750) (1,604) (800)
Trade and other payables 8 (9,765) (10,109) (7,889)
Lease liabilities due less than one year (3,396) (1,968) (2,374)
Total current liabilities (13,910) (13,681) (11,062)
Non-current liabilities
Borrowings 9 (8,358) (4,408) (4,723)
Lease liabilities due more than one year (36,076) (20,684) (25,254)
Provisions (366) (150) (366)
Deferred tax provision (803) (1,263) (891)
Total non-current liabilities (45,603) (26,506) (31,233)
Total liabilities (59,513) (40,187) (42,295)
Net assets 15,501 14,044 16,241
Called up share capital 10 1,983 1,912 1,983
Share premium 21,372 20,319 21,372
Share based payment reserve 564 427 543
Reverse acquisition reserve (2,513) (2,513) (2,513)
Retained earnings (6,630) (6,490) (5,639)
14,777 13,655 15,746
Non-controlling interest 725 389 495
Total equity 15,501 14,044 16,241
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE 26 WEEKS ENDED 1 JANUARY 2023
Total
Share attributable
Called based Reverse to equity Non-
up share Share payment acquisition Retained holders of controlling Total
capital premium reserve reserve earnings parent interest equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 27 June 2021 1,855 19,267 216 (2,513) (5,753) 13,073 109 13,181
Issue of shares on acquisition - Barrio Bar 57 1,051 - - - 1,108 - 1,108
Group
Share based payments and related deferred - - 211 - - 211 - 211
tax recognised directly in equity
Total transactions with owners recognised directly in equity 1,912 20,319 427 (2,513) (5,753) 14,392 109 14,501
Total comprehensive expense for the (737) (737) 280 (457)
26 week
At 26 December 2021 1,912 20,319 427 (2,513) (6,490) 13,655 389 14,044
Issue of shares - Adventure Bar Group 71 1,054 - - - 1,125 - 1,125
contingent consideration
Share based payments and related deferred - - 115 - - 115 - 115
tax recognised directly in equity
Total transactions with owners recognised directly in equity 1,983 21,372 543 (2,513) (6,490) 14,895 389 15,284
Total comprehensive income for the 26 week period - - - - 851 851 106 957
At 3 July 2022 1,983 21,372 543 (2,513) (5,639) 15,746 495 16,241
Share based payments and related deferred - - 21 - - 21 - 21
tax recognised directly in equity
Total transactions with owners recognised directly in equity 1,983 21,372 564 (2,513) (5,639) 15,768 495 16,262
Total comprehensive expense for the 26 week period - - - - (991) (991) 230 (761)
At 1 January 2023 1,983 21,372 564 (2,513) (6,630) 14,777 725 15,501
CONSOLIDATED STATEMENT OF CASH FLOW
FOR THE 26 WEEKS ENDED 1 JANUARY 2023
26 weeks ended 26 weeks ended 53 weeks ended
01 January 2023 26 December 2021 03 July 2022
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Cash flows from operating activities
(Loss) / profit for the period (761) (457) 500
Adjustments for:
Depreciation 2,541 1,654 3,931
Amortisation 313 207 549
Profit / loss on disposal of right of use asset (1) - -
Share based payments 102 198 345
Interest on lease liabilities 829 371 917
Interest on borrowings 256 102 252
Net change in fair value of hedging instrument in a fair value hedge (249) - -
Impairment - - 143
Tax expense (169) (33) (262)
(Increase) / decrease in trade and other receivables (605) (256) (1,214)
Increase / (decrease) in trade and other payables 2,308 (518) (2,785)
(Increase) / decrease in inventories (465) (170) (113)
Cash generated from operations 4,097 1,098 2,264
Corporation taxes (paid) / repaid (130) (59) (72)
Net cash flows from operating activities 3,967 1,039 2,192
Investing activities
Acquisition of Barrio Bar Group, net of cash - (462) (991)
Purchase of property, plant and equipment (6,067) (2,729) (6,008)
Purchase of intangible assets (27) (30) (48)
Net cash used in investing activities (6,093) (3,221) (7,048)
Financing activities
Proceeds from borrowings 9,847 - -
Issue costs in connection with borrowings (479) - -
Repayment of loans and borrowings (5,847) (526) (941)
Principal paid on lease liabilities (829) (570) (906)
Interest paid on lease liabilities (829) (371) (917)
Interest paid on loans and borrowings (159) (90) (215)
Net cash inflow / (outflow) from financing activities 1,703 (1,557) (2,979)
Net (decrease) / increase in cash and cash equivalents (423) (3,739) (7,835)
Cash and cash equivalents at beginning of the period 5,353 13,187 13,187
Cash and cash equivalents at end of the period 4,930 9,449 5,353
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL INFORMATION
The Directors of Nightcap plc (the "Company") and its subsidiaries (the
"Group") present their interim report and the unaudited condensed consolidated
financial statements for the 26 weeks ended 1 January 2023 ("Interim Financial
Statements").
The Company is a public limited company whose shares are publicly traded on
the AIM market of the London Stock Exchange and is incorporated and registered
in England and Wales. The registered office address of the Company is c/o
Locke Lord (UK) LLP, 201 Bishopsgate, London, EC2M 3AB.
The Interim Financial Statements were approved by the Board of Directors on 10
March 2023.
2. ACCOUNTING POLICIES
2.1. Basis of preparation
The Interim Financial Statements have been prepared in accordance with IAS34,
'Interim Financial Reporting'. They do not include all of the information
required for a complete set of IFRS financial statements. However, selected
explanatory notes are included to explain events and transactions that are
significant to an understanding of the changes in the Group's financial
position and performance since the last financial statements.
The Interim Financial Statements are presented in Pounds Sterling (£'000),
except where otherwise indicated; and under the historical cost convention.
Due to rounding, numbers presented in the Interim Financial Statements may not
add up precisely to the totals provided and percentages may not precisely
reflect the presented figures as the underlying calculations are referenced
from absolute values, whereas numbers presented have been rounded to
thousands.
The Directors consider that the principal risks and uncertainties faced by the
Group are as set out in the Group's Annual Report and Financial Statements for
the period ended 3 July 2022.
The accounting policies adopted in the preparation of the Interim Financial
Statements are consistent with those applied in the preparation of the Group's
consolidated financial statements for the period ended 3 July 2022. The Group
has not early adopted any other standard, interpretation or amendment that has
been issued but is not yet effective.
2.2. Going concern
In concluding that it is appropriate to prepare these Interim Financial
Statements for the 26 weeks ended 1 January 2023 on the going concern basis,
the Directors have considered the Group's cash flows, liquidity and business
activities.
As at 1 January 2023 the Group had cash balances of £5.5m including cash in
transit. During the period the Group refinanced its legacy debt with an
amortising term loan (£3m) and a Revolving Credit Facility (up to £7m)
repayable in August 2025.
Based on the Group's forecasts, the Directors have adopted the going concern
basis in preparing the Financial Statements. In making the assessment the
Directors have made a current consideration of the current economic and
inflationary cost pressures facing consumers. The Directors have considered
the impact of these on the cash flows and liquidity of the Group over the next
12-month period and has sensitised these forecasts accordingly.
Based on these assessments the Group forecasts to comply with its banking
covenant obligations, and accordingly the Directors have concluded that it is
appropriate to prepare the financial statements on the going concern basis.
2.3. Alternative Performance Measures
The Interim Financial Statements include both statutory and alternative
performance measures ("APMs"). Further background to the use of APMs and
reconciliations between statutory measures and APMs are presented in Note 13.
2.4. Accounting estimates and judgements
In preparing these interim financial statements, management has made
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expense. Actual results may differ from these estimates.
The significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty were the
same as those applied to the Group's consolidated financial statements for the
period ended 3 July 2022 and are set out in the Group's Annual Report and
Financial Statements for that period.
2.5. Seasonality
The Group has a variety of brands and concepts within its business. The demand
across our sites is well spread throughout the financial year. Historically
the lead up to Christmas has always been a busy period for hospitality
businesses but with our well diversified range of brands, the seasonal impact
of Christmas is balanced with strong summer periods due to the outdoor venues
in the Group, particularly Luna Springs and Bar Elba which provide large
outdoor bar and event space.
3. EXCEPTIONAL ITEMS
26 weeks ended 26 weeks ended 53 weeks ended
01 January 2023 26 December 2021 03 July 2022
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Included in administrative expenses:
Site closure costs 43 - -
Reorganisation costs 271 - 84
Acquisition related transaction costs - 353 -
314 353 84
4. NET FINANCE EXPENSE
26 weeks ended 26 weeks ended 53 weeks ended
01 January 2023 26 December 2021 03 July 2022
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Interest on bank overdrafts and loans 256 102 252
Interest on lease liabilities 829 371 917
Net change in fair value of hedging instrument (249) - -
835 473 1,169
5. TAX (CREDIT) / CHARGE ON LOSS
The following income tax (credit)/charge is applicable on the Group's
operations.
26 weeks ended 26 weeks ended 53 weeks ended
01 January 2023 26 December 2021 03 July 2022
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Taxation (credited) to the income statement
Current income taxation - - 131
Adjustments for current taxation of prior periods - - (54)
Total current income taxation - - 77
Deferred Taxation
Origination and reversal of temporary timing differences
Current period (169) 19 (372)
Adjustments in respect of prior periods - - 56
Adjustment in respect of change of rate of corporation tax - (52) (23)
Total deferred tax (169) (33) (339)
Total taxation credit in the consolidated income statement (169) (33) (262)
The above is disclosed as:
Income tax (credit) - current period (169) (33) (264)
Income tax charge / (credit) - prior period - - 2
(169) (33) (262)
The taxation credit on loss for the interim period is £169,000 (26 weeks
ended 26 December 2021 - credit £33,000). The effective tax rate of 18.1%
(26 weeks ended 26 December 2021 - 6.8%) differs from the UK corporation tax
rate (19%) as a result of permanent disallowable costs (depreciation of
non-qualifying fixed assets, exceptional items, accounting share based payment
charges) and the differential between the rate at which items impact current
tax compared with deferred tax, all reducing the effective tax rate for the
year. The rate reduction is partially offset by the 23% permanent element of
the 130% capital allowances 'super deduction' on new qualifying plant and
machinery additions
The full year effective tax rate is expected to be c.18.1%. The full year
effective tax rate at 26 December 2021 was expected to be 5.7%
6. EARNINGS PER SHARE
Basic earnings / (loss) per share is calculated by dividing the profit/(loss)
attributable to equity shareholders by the weighted average number of shares
outstanding during the year, excluding unvested share options granted pursuant
to The Nightcap plc Share Option Plan.
Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares outstanding to assume conversion of all dilutive
potential ordinary shares. During the 26 weeks ended 1 January 2023 the Group
had potentially dilutive shares in the form of unvested share options pursuant
to the above long-term incentive plan.
During a period where the Group or Company makes a loss, accounting standards
require that 'dilutive' shares for the Group be excluded in the earnings per
share calculation, because they will reduce the reported loss per share;
consequently, all per-share measures in the current period are based on the
weighted number of ordinary shares in issue.
26 weeks ended 26 weeks ended 53 weeks ended
01 January 2023 26 December 2021 03 July 2022
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
(Loss) / profit for the period after tax for the purposes of basic and diluted (991) (737) 114
earnings per share
Non-controlling interest 230 280 386
Taxation credit (169) (33) (262)
Finance cost 835 473 1,169
Exceptional items 314 353 84
Acquisition related costs - - (866)
Pre-opening costs 919 131 442
Share based payment charge 102 198 345
Impairment - - 143
Depreciation and amortisation 2,854 1,862 4,480
Profit / loss on disposal of right of use asset (1) - -
Profit for the period for the purposes of Adjusted EBITDA (IFRS 16) basic and 4,094 2,527 6,036
diluted earnings per share
IAS 17 Rent charge (2,051) (943) (2,727)
Profit for the period for the purposes of Adjusted EBITDA (IAS 17) basic and 2,043 1,584 3,309
diluted earnings per share
26 weeks ended 26 weeks ended 53 weeks ended
01 January 2023 26 December 2021 03 July 2022
(Unaudited) (Unaudited) (Audited)
Number Number Number
Weighted average number of ordinary shares in issue for the purposes of basic 198,300,657 186,593,082 189,008,260
earnings per share
Effect of dilutive potential ordinary shares from share options 1,888,689 6,665,383 6,529,509
Weighted average number of ordinary shares in issue for the purposes of 200,189,346 193,258,465 195,537,769
diluted earnings per share
26 weeks ended 26 weeks ended 53 weeks ended
01 January 2023 26 December 2021 03 July 2022
(Unaudited) (Unaudited) (Audited)
pence pence pence
Earnings per share:
Basic (0.50) (0.39) 0.06
Diluted n/a n/a 0.06
Adjusted EBITDA (IFRS 16) basic 2.06 1.35 3.19
Adjusted EBITDA (IFRS 16) diluted n/a n/a 3.09
Adjusted EBITDA (IAS 17) basic 1.03 0.85 1.75
Adjusted EBITDA (IAS 17) diluted n/a n/a 1.69
7. PROPERTY, PLANT AND EQUIPMENT
Plant and Furniture,
Leasehold computer fixtures Computer
improvements equipment and fittings equipment Total
£'000 £'000 £'000 £'000 £'000
Cost or valuation
At 28 June 2021 3,933 2,115 814 161 7,023
Additions 640 1,524 408 - 2,572
On acquisition - Barrio Familia Group 1,835 756 1,086 - 3,677
Reclassification - (181) 27 154 -
At 26 December 2021 6,408 4,214 2,335 315 13,272
At 27 December 2021 6,408 4,214 2,335 315 13,272
Additions 3,299 (118) 479 - 3,660
On acquisition - Barrio Familia Group - 19 (35) - (16)
Reclassification - 315 - (315) -
Impairment (27) (19) (0) - (47)
At 3 July 2022 9,680 4,411 2,778 - 16,869
At 4 July 2022 9,680 4,411 2,778 - 16,869
Additions 2,685 2,392 607 - 5,684
Reclassification - 274 (274) 0
At 1 January 2023 12,365 7,077 3,111 - 22,553
Amortisation
At 28 June 2021 1,728 1,263 395 90 3,476
Provided for the period 244 248 151 15 658
On acquisition - Barrio Familia Group 1,029 569 734 - 2,332
Reclassification - (161) 6 155 -
At 26 December 2021 3,000 1,919 1,286 260 6,466
At 27 December 2021 3,000 1,919 1,286 260 6,466
Provided for the period 329 494 241 (15) 1,048
On acquisition - Barrio Familia Group - 129 116 - 245
Reclassification - 246 (0) (245) -
At 3 July 2022 3,329 2,788 1,643 (0) 7,760
At 4 July 2022 3,329 2,788 1,643 (0) 7,760
Provided for the period 456 362 221 - 1,038
Reclassification - 194 (194) - -
At 1 January 2023 3,785 3,344 1,670 (0) 8,798
Net book value
At 26 December 2021 3,408 2,295 1,048 55 6,806
At 3 July 2022 6,351 1,623 1,136 0 9,109
At 1 January 2023 8,580 3,733 1,441 0 13,755
8. TRADE AND OTHER PAYABLES
01 January 2023 26 December 2021 03 July 2022
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Trade payables 4,283 2,777 2,841
Social security and other taxes 2,013 1,127 1,272
Corporation tax 293 359 423
Other payables 781 3,727 370
Accruals and deferred income 2,395 2,119 2,983
9,765 10,109 7,889
9. BORROWINGS
01 January 2023 26 December 2021 03 July 2022
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Short-term borrowing
Secured bank loans 750 1,583 793
Unsecured bank loan - 22 7
750 1,604 800
01 January 2023 26 December 2021 03 July 2022
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Long term borrowings
Secured bank loans 8,358 4,408 4,723
8,358 4,408 4,723
In August 2022, the Group refinanced its borrowings from three individual
lenders under multiple tranches with a new £10.0m debt facility from HSBC
Bank, comprised of a £3m term loan and a £7m Revolving Credit Facility, to
provide support to the business as it executes on its roll out strategy. The
new £10.0m HSBC facility, replaced £5.5m of legacy debt that was acquired
from acquisitions, which had a blended interest margin of 4%, with the new
facility bearing a margin of 3% above SONIA on the £3m term loan and 3.25%
above SONIA on the £7m Revolving Credit Facility. The Group has taken out an
interest rate cap on its reference base rate at 3% on £8m out of £10m of its
HSBC facility.
10. CALLED UP SHARE CAPITAL
01 January 2023 26 December 2021 03 July 2022
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Allotted, called up and fully paid ordinary shares 1,983 1,912 1,983
01 January 2023 26 December 2021 03 July 2022
Number Number Number
Ordinary shares at £0.01 each 198,300,657 191,157,801 198,300,657
11. ANALYSIS OF CHANGES IN NET DEBT
At 27 June Reclass Non cash At
long term to
26 December
2021 Cash flows Acquisitions short term movement 2021
£'000 £'000 £'000 £'000 £'000 £'000
Cash at bank 13,187 (6,905) 3,166 - - 9,449
Bank loans falling due within 1 year (1,424) 513 - (672) - (1,583)
Bank loans falling due greater than 1 year (3,256) - (1,824) 672 - (4,408)
Other loans falling due within 1 year (35) 13 - - - (22)
Lease liabilities falling due within 1 year (1,441) 570 - (1,097) - (1,968)
Lease liabilities falling due greater than 1 year (12,463) - (5,265) 1,097 (3,349) (19,979)
Total debt (18,617) 1,096 (7,090) - (3,349) (27,960)
Net debt (5,430) (5,809) (3,924) - (3,349) (18,511)
Net cash - pre IFRS 16 leases 8,473 (6,379) 1,342 - - 3,436
Reclass
At 27 June long term to Non cash At 3 July
2021 Cash flows Acquisitions short term movement 2022
£'000 £'000 £'000 £'000 £'000 £'000
Cash at bank 13,187 (10,822) 2,988 - - 5,353
Bank loans falling due within 1 year (1,424) 914 (277) (73) 67 (793)
Bank loans falling due greater than 1 year (3,256) - (1,540) 73 - (4,723)
Other loans falling due within 1 year (35) 28 - - - (7)
Lease liabilities falling due within 1 year (1,441) 1,611 (421) (2,124) - (2,374)
Lease liabilities falling due greater than 1 year (12,463) - (4,845) 2,124 (10,070) (25,254)
Total debt (18,617) 2,553 (7,082) - (10,003) (33,150)
Net debt (5,430) (8,270) (4,094) - (10,003) (27,797)
Net (debt) / cash - pre IFRS 16 leases 8,473 (9,881) 1,171 - 67 (170)
Reclass
At 4 July long term to Non cash At 1 January
2022 Cash flows Acquisitions short term movement 2023
£'000 £'000 £'000 £'000 £'000 £'000
Cash at bank 5,353 (423) - - - 4,930
Bank loans falling due within 1 year (793) 794 - (750) (1) (750)
Bank loans falling due greater than 1 year (4,723) (4,322) - 750 (64) (8,358)
Other loans falling due within 1 year (7) 7 - - - -
Lease liabilities falling due within 1 year (2,374) 829 - (1,851) - (3,396)
Lease liabilities falling due greater than 1 year (25,254) - - 1,851 (12,674) (36,076)
Total debt (33,150) (2,691) - - (12,739) (48,580)
Net debt (27,797) (3,114) - - (12,739) (43,650)
Net (debt) / cash - pre IFRS 16 leases (170) (3,944) - - (65) (4,179)
12. RELATED PARTY TRANSACTIONS
Related parties are considered to be the directors of Nightcap plc, The
Cocktail Club, Adventure Bar Group and Barrio Familia. Transactions with them
are detailed below:
26 weeks ended 26 weeks ended 53 weeks ended
01 January 2023 26 December 2021 03 July 2022
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Purchase of inventories - D&H Spirits Limited 12 - 85
Purchase of inventories - CGCC Limited 31 - 41
Consultancy fees - Ferdose Ahmed 30 - 24
Consultancy fees - James Hopkins 41 - 24
114 - 174
The companies listed below are deemed to be related parties due to having
common shareholders with the Company. The people listed below are shareholders
of the Company and therefore deemed to be related parties. These transactions
are split by related party as follows:
26 weeks ended 26 weeks ended 53 weeks ended
01 January 2023 26 December 2021 03 July 2022
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
CGCC Limited - a company controlled by JJ Goodman 31 - 41
Ferdose Ahmed 30 - 24
James Hopkins 41 - 24
D&H Spirits Limited - a company co-controlled by James Hopkins 12 - 85
114 - 174
Amounts owed to related parties were as follows:
01 January 2023 26 December 2021 03 July 2022
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
CGCC Limited - a company controlled by JJ Goodman - - -
Ferdose Ahmed 24 - -
James Hopkins - - 2
D&H Spirits Limited - a company co-controlled by James Hopkins - - -
24 - 2
13. RECONCILIATION OF STATUTORY RESULTS TO ALTERNATIVE PERFORMANCE MEASURES
26 weeks ended 26 weeks ended 53 weeks ended
01 January 2023 26 December 2021 03 July 2022
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
(Loss) / profit from operations (94) (17) 1,407
Exceptional items (Note 3) 314 353 84
Acquisition related transaction costs - - (866)
Pre-opening costs 919 131 442
Share based payment charge 102 198 345
Impairment - - 143
Adjusted profit from operations 1,241 665 1,555
Depreciation and amortisation (pre IFRS 16 Right of use asset depreciation) 1,351 866 2,256
IFRS 16 Right of use asset depreciation 1,503 996 2,224
IFRS 16 Right of use asset disposal (1)
Adjusted EBITDA (IFRS 16) 4,094 2,527 6,036
IAS 17 Rent charge (2,051) (943) (2,727)
Adjusted EBITDA (IAS 17) 2,043 1,584 3,309
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