REG - Tasty PLC - Final Results
23/03/2022 07:00
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RNS Number : 6745F Tasty PLC 23 March 2022
23 March 2022
Tasty plc
("Tasty" or the "Company")
Final results for the 52 weeks ended 26 December 2021
Tasty (AIM: TAST), the owner and operator of restaurants in the casual dining
sector, announces its annual results for the 52 week period ended 26 December
2021.
Key Highlights
· Revenue £34.9m (2020: £24.2m); an increase of 44% year-on-year
with 33 weeks dine-in trading, driven by strong sales post re-opening despite
weaker trading for the peak December period than anticipated, due to the onset
of the Omicron variant
· Adjusted EBITDA(1) (post IFRS 16) of £8.0m (2020: £2.7m)
· Adjusted EBITDA(1) (pre IFRS 16) of £3.9m (2020: loss £1.5m)
· Profit after tax for the period of £1.2m (2020: loss of £12.7m)
· Bank loan as at 26 December 2021 of £1.3m (27 December 2020: £nil)
· Cash at the year-end was £11.0m. After allowing for deferred HMRC
payments, creditors and bank loan the Group's net cash position was
approximately £6.8m
· Currently trading from 50 of 54 restaurants
(( 1 )) Adjusted for depreciation, amortisation and highlighted items
including share-based payments and impairments. Adjusted EBITDA figure
includes £1.9m of exceptional Government grant income
The report and accounts for the 52 week period ended 26 December 2021 will be
available on the Company's website at https://dimt.co.uk/investor-relations/
(https://dimt.co.uk/investor-relations/) shortly.
For further information, please contact:
Tasty plc Tel: 020 7637 1166
Jonny Plant, Chief Executive
Cenkos Securities plc (Nominated adviser and broker)
Mark Connelly / Katy Birkin Tel: 020 7397 8900
Chairman's statement
I am pleased to be reporting on the Group's annual results for the 52 week
period ended 26 December 2021 and the comparative 52 week period ended 27
December 2020. The Group currently comprises 54 restaurants: five dim t and
49 Wildwood restaurants.
We are currently trading from 50 of those restaurants out of a total estate of
54. The four restaurants that remain closed due to predicted poor trading
conditions in their locality or labour shortages but are at different stages
of re-opening planning. However, the Group will continue to consider selling
two or three of those restaurants or re-gearing their leases to reflect
current market conditions.
During the two years of the Covid-19 pandemic we have had to deal with and
adapt to unexpected challenges. It has been a test of endurance, strength and
resilience and our success has been testament to our dedicated teams and
management, and our customers. The Board would like to thank our much valued
loyal staff, suppliers, customers, landlords and other trade creditors who
have assisted and supported us throughout this unprecedented period.
The support we have received from creditors, landlords, and the Government has
seen us through the difficulties we have faced. In addition, the bank facility
of £1.25m drawn in January 2021 and not yet utilised, has provided additional
headroom and confidence to our creditors of sufficient liquidity. At
year-end, our cash balance reflects our cash preservation strategy and a
deferral of payments due to creditors and HMRC. When these outstanding
payments and bank debt are deducted, our net cash at year-end was
approximately £6.8m.
Trading was highly encouraging when dine-in was permitted from May 2021, but
impacted in December 2021 as the Omicron variant took hold and spread amongst
the UK population. Subsequent Government advice meant that Christmas trade,
traditionally our most profitable period, and specifically December 2021, was
much weaker than we had anticipated.
In response to the experience of the last two years we have strengthened our
operating model. We have increased our delivery offering and avenues of
delivery. Having survived the pandemic and, now that the restrictions have
been lifted, we are cautiously optimistic that we will be able to expand the
estate and are rebuilding our operational and head-office structure to support
this anticipated growth and property pipeline. During 2022 we expect to
facilitate a measured expansion plan for a pipeline of five to six new units,
however, any expansion will be at a steady pace as 2022 will not be without
its challenges with labour shortages, food inflation, the ending of Government
support in terms of reduced VAT and business rates and utility price
volatility, impacting profitability.
Dividend
The Board does not propose to recommend a dividend (2020: £nil).
Future Trading
Trading prior to Christmas was strong and the start of 2021 is encouraging,
but this must be tempered by the challenges which the Group expects following
the end of Government support including VAT and business rates, the risk of a
reduction in pent-up demand, disposable income and staycations as well as a
steep rise in inflation in relation to wages, utilities and input supplier
costs as the UK adjusts to Brexit, the aftermath of the pandemic and the
current war in Ukraine. Accordingly, the Board views the future with cautious
optimism.
Keith Lassman
Chairman
22 March 2022
Strategic report for the 52 weeks ended 26 December 2021
Tasty operates two concepts in the casual dining market: Wildwood and dim t.
Wildwood
Aimed at a broad market, our 'Pizza, Pasta, Grill' restaurant remains the
Group's main focus. Our sites are primarily based on the high street. However,
our estate comprises a number of leisure, retail and tourist locations that
have historically traded well, highlighting the broad appeal of the offering.
Located nationally, mainly outside of London, Wildwood is currently open for
business from 45 of the 49 Wildwood branded restaurants.
dim t
Our pan-Asian restaurant now trades from five sites, serving a wide range of
dishes, including dim sum, noodles, soup and curry. This cuisine has fared
particularly well over the last two years due to a rise in its popularity and
increased demand for takeaway.
Introduction
The second half pre-Omicron was better than we anticipated. With staycation,
pent-up demand, and increased disposable income, which was to be spent in the
UK, the majority of our restaurants benefited from changing eating habits and
working patterns. However, some of the sites, mainly those in city centres,
that historically performed well and benefitted from work commuters, tourists
and theatregoers have not performed as well. Fortunately, most of Tasty's
estate is located in residential areas, and outside of the larger cities which
has meant we have benefitted from this change in consumer habits.
We are conscious that performance was assisted by VAT and business rate
support, staycations, pent-up demand and unusually high level of disposable
income. We are expecting that most of the support and peaks in consumer
trends will follow a more normalised path during 2022 and we have planned for
rising costs and labour shortages. However, we are cautiously optimistic
about 2022 and our ability to expand.
With an increased appetite for delivery and takeaway, we have seen strong
sales growth. We plan to capitalise on this by expanding our virtual brands
and different formats in new locations to optimise growth. Dim t has been
rejuvenated through its successful takeaway and delivery sales growth.
Customers
It was great to welcome customers back in for dine-in, and our focus remains
that we offer better value and an improved experience. We are constantly
reviewing our menu and increasing the choice of vegetarian, vegan, gluten-free
and lighter options. We use our guest feedback system to improve the menu and
the offering. Our customer engagement has significantly improved due to the
segmentation of our database into relevant and specific groups.
People
We are pleased to report that on 26 December 2021, we employed just under
1,000 people across the business: an increase of 330 from the previous year.
Like many competitors and other industries, we have been impacted by labour
shortages and are currently 5% short of the full employment levels required.
Targeted wage increases have been applied, which should help us retain our
teams in the long-run. Since Brexit and the pandemic, we found that flexible
working has helped to attract a different demographic. This change provides
us with new opportunities as we grow our talent pool. Whilst 2021 was
challenging in retention levels due to the pandemic and Brexit, more recent
data suggests our team is more stable, and there are encouraging signs that
the length of service is growing.
Even though we are operating with a shortfall in staff numbers, overall we
have managed to keep the "open" sites trading. Occasionally, positive Covid
cases have resulted in short-term closures but overall those instances have
been kept to a minimum. We understand that at times this has stretched the
existing teams and we thank and appreciate all of them for their hard work.
With the increase in National Insurance of 1.25%, National Living Wage and
wage increases, there will inevitably be wage inflation, which will be
impossible to completely absorb.
We believe in rewarding our loyal staff and nurturing talent and we remain
committed to training and this continued last year despite the challenging
environment. Ten apprentices completed their training programme, six with
distinction and 18 functional skill exams were passed.
In anticipation of expansion, we are strengthening our management structure
and senior teams across all areas but our initial focus is on food, marketing,
people and the learning and development team.
An in-depth review into the people aspects of Tasty has been completed and a
two-year strategy developed with the focus on becoming a market-leading
employer with a diverse and inclusive team, creating a learning culture, using
data to support decision making and growing our apprenticeship programmes. New
HR and recruitment systems have been established and proposed to provide
consistent and swift support to all colleagues.
Government support
The Government initiatives, including the Job Retention Scheme ("CJRS"),
business rates relief, deferral of HMRC payments, Eat Out To Help Out
("EOTHO") and VAT reduction, have proved invaluable in supporting the Group
over the last two years. With business rates and VAT reductions ending at
the end of March 2022 and an additional National Insurance contribution of
1.25% we expect greater pressure on business performance and cash generation,
but with the planned improvements to operations and the structural changes
proposed, we should be able to adapt our business model to these additional
costs.
Suppliers
Our suppliers have suffered from rising fuel costs, lack of drivers, workers
and general shortages. This inevitably has impacted our costs, and while
there have been some shortages, on the whole, these have been manageable. We
are thankful to our suppliers that continue to work through the challenges and
support us.
Rent negotiations
The Group has successfully achieved consensual lease concessions and rent
reductions for the lockdown period for most of the estate. There remain a few
sites for which negotiations are ongoing. Through the pragmatic approach and
support of our landlords we have managed to avoid a formal procedure such as a
company voluntary arrangement ("CVA"). We are extremely grateful for all the
assistance received.
Financial stability
Over the last few years, we have focussed on cost reduction and reduced
outgoings, including salary reductions, reduced services, and ensuring only
necessary expenditure was incurred. As we come out of the pandemic, we are
gearing towards investment in our existing sites, new sites, people and
development.
The Group drew down a bank loan of £1.25m in January 2021 which is unutilised
and is currently reviewing options to refinance or repay this loan.
Board Changes
As previously announced, Sam Kaye stepped down from the Board on 14 May 2021
to allow him to focus on his other commercial interests. The Board would once
again like to thank Sam for the enormous support and invaluable experience
that he has provided to the Group from inception. Sam remains a supportive
shareholder.
Harald Samúelsson was appointed as a Non-Executive Director in May 2021.
Harald has over 20 years of experience in the UK restaurant industry,
including as joint managing director of Côte Restaurants, and we are
delighted to have him on our Board.
Current trading and outlook for the coming year
As we are coming out of the pandemic we are optimistic about sales performance
compared to 2019 though this is tempered by rising costs. In particular the
end of the rates relief, reduced VAT rates and the introduction of 1.25%
additional National Insurance will all impact profitability.
Having built strong foundations over lockdown we are quietly confident about
our prudent expansion plans and we expect to take on another five to six units
in the current year.
Financial review
Highlighted Items
The Group recognises a number of charges in the financial statements which
arise under accounting rules and have no cash impact. These charges include
share-based payments and impairments to fixed assets. The above items are
included under 'highlighted items' in the statement of comprehensive income
and further detailed in Note 5. These items, due to their nature, will
fluctuate significantly year on year and are, therefore, highlighted to give
more detail on the Group's trading performance.
Full year results and key performance indicators
The Directors continue to use a number of performance metrics to manage the
business but, as with most businesses, the focus on the income statement at
the top level is on sales, EBITDA before highlighted items and operating
profit before highlighted items compared to the previous year. All key
performance indicators that adjust for highlighted items do not constitute
Statutory or GAAP measures.
The table below shows key performance indicators both before and after IFRS
16:
Post IFRS 16 Pre IFRS 16 Post IFRS 16
52 weeks ended 52 weeks ended 52 weeks ended
26 December 26 December 27 December
2021 2021 2020
£'000 £'000 £'000
Sites at year end 54 54 54
Open sites 50 50 42
Sales 34,909 34,909 24,228
EBITDA before highlighted items 7,991 3,943 2,702
Depreciation of PP&E and amortisation (1,300) (1,351) (1,345)
Depreciation of right-of-use assets (IFRS 16) (3,142) - (3,592)
Operating profit\(loss) before highlighted items 3,549 2,592 (2,235)
Sales were up 44% on the corresponding period to £34.9m (2020: £24.2m).
Since dine-in reopened in May 2021, trading until December 2021 sales were
higher than management expectations and EBITDA was £8.0m (2020: £2.7m). The
adjusted EBITDA profit before IFRS 16 adjustments was £3.9m (2020: loss
£1.5m).
Operating profit before highlighted items was £3.5m (pre-IFRS 16 equivalent:
profit £2.6m, 2020: loss £2.2m).
The impact of the implementation of IFRS 16 "Leases" in the prior year, has
resulted in depreciation on Right-of-use (ROU) assets for leases and the
interest charge on lease liabilities being greater than the charge for rent
that would have been reported pre-IFRS 16; net impact on reported loss is
£1.5m (2020: £1.8m). The interest charge on the lease liabilities is higher
in the earlier years of a lease. We have reviewed the impairment provision
across the ROU assets, fixed assets and goodwill and have made a net provision
of £nil (2020: £8.1m).
After taking into account all non-trade adjustments, the Group reports a
profit after tax for the period of £1.2m (2020: loss of £12.7m). Net cash
inflow for the period before financing was £7.3m (2020 - inflow £9.4m). This
is generated from operations and proceeds from the sale of property. Net cash
flows generated from operations were £7.8m and impacted by IFRS 16 (2020 -
£7.5m).
As at 26 December 2021, the Group had an outstanding bank loan of £1.25m
(2020 - £nil). At 26 December 2021 cash at bank was £11.0m (2020: £8.0m).
Net cash after outstanding bank loan at the balance sheet date was £9.8m
(2020 - net cash £8.0m). The cash balance at year-end reflects our cash
preservation strategy and deferring payments due to landlords, HMRC, and other
trade creditors. After reflecting these outstanding payments, our net cash at
year-end was approximately £6.8m. The Group drew down the £1.25m, four-year
term loan from its existing bankers, Barclays Bank plc in January 2021.
Principal risks and uncertainties
The Directors have the primary responsibility for identifying the principal
risks the business faces and for developing appropriate policies to manage
those risks.
Risks and uncertainties Mitigation
Covid-19 Management have become adept at managing cost and revenue through lockdowns
and restrictions and flexible at localised closures due to Covid outbreaks
Uncertainty and impact of Covid-19 impacting staff, restaurants and supply. and/or shortages of staff.
Government guidelines have been followed at all times and often to a higher
standard than required e.g. cleaning, mask wearing, etc.
Outbreak protocols established for staff, restaurants, and suppliers and
implemented where necessary.
Cash preservation has been a key focus over the last few years. This has
been successfully achieved with the help of our suppliers, creditors, and
landlords and Government assistance.
The Group has successfully achieved consensual lease concessions, rent
reductions and lease amendments for the lockdown period for most of the
estate. There remain a few sites for which the negotiation is ongoing. We
have avoided a more formal procedure such as a CVA as a result of the support
of our landlords.
The Government support for employees' pay, VAT reduction, business rate relief
and grants has been invaluable to the Group.
The bank facility of £1.25m secured to strengthen the Group's balance sheet
and provide additional working capital, was drawn down in full in January 2021
but remains unutilised.
Market Conditions and "Brexit" Brexit has impacted food and drink primarily in the form of inflation and
shortages.
Economic uncertainty and impact of the UK leaving the European Union
("Brexit") could reduce customer confidence / spending. We work closely with our suppliers on assured supply and regularly retender
prices. To minimise the impact of food cost increases we consider menu
engineering and review recipes.
Competition To mitigate this risk, we continue to invest in and renew our offering whilst
maintaining accessibility without compromising quality or the customer
The casual dining market faces new competition on a regular basis. experience.
We constantly review marketing initiatives to ensure that we remain relevant
to our consumers and ahead of the competition.
We review performance and success whilst exploring new opportunities.
People We have continued to focus on selection, induction, training and retention of
our employees. The Group has made significant improvements in its selection
Loss of key staff and inability to hire the right people in competitive labour process, onboarding training programmes and career development paths. New HR
market. and recruitment systems have been established and proposed to provide
consistent and swift support to all colleagues. We have also strengthened our
teams.
The Group offers competitive remuneration and is reviewing its overall
benefits package.
Food standards and safety The Group engages in regular internal and external compliance audits to ensure
all sites are complying with regulations. Job-specific training that covers
Failing to meet safety standards relevant regulations is provided to all staff on induction and whenever else
necessary. Online reporting systems are utilised on a daily basis to gather
relevant information on compliance.
Regular review of latest Government guidelines and best practice regarding
allergens.
The Group's activities are subject to a wide range of laws and regulations and
we seek to comply with legislation and best practice at all times.
Supply Chain The Group monitors suppliers closely and if there was a failure of a key
supplier we have contingency plans in place to minimise disruption and where
A major failure of key supplier or distributor could cause significant possible we maintain buffer stock of high-risk products.
business interruption.
On behalf of the Board.
Daniel Jonathan Plant
Chief Executive Officer
22 March 2022
Report of the directors for the 52 weeks ended 26 December 2021
The Directors present their report together with the audited financial
statements for the 52 week period ended 26 December 2021 (comparative period
52 weeks to 27 December 2020).
Throughout the year, in performance of its duties, and in compliance with
Section 172 of the Companies Act, the Board has had regard to the interests of
the Group's key stakeholders and taken account of the potential impact on
these stakeholders of the decisions it has made. In order to comply with
Section 172, the Board is required to include a statement setting out the way
in which Directors have discharged these duties during the year. Details
of how the Board had regard to the following S172 Matters are as follows:
S172 Matters Specific examples
1. The likely consequences of any decision in the long term · Our corporate governance framework as described in this annual report
· Communications with our shareholders through our website, circulars,
AGM and post results investor meetings
2. The interests of the Group's employees · Employee engagement through newsletters, communication tools, surveys
and career development opportunities including apprenticeship
· Established whistleblowing and safeguarding procedures
3. The need to foster the Group's business relationships with suppliers, · Building long-term relationships with suppliers
customers and others
· Encouraging and responding to customer feedback through websites,
social media and our feedback system
4. The impact of the Group's operations on the community and the · Local community involvement with the NHS
environment
· Working with the local community
5. The desirability of the Group maintaining a reputation for high · Regular staff training and communication
standards of business conduct
· Restaurant visits and audit processes
6. The need to act fairly between members of the Group · Maintaining an open dialogue with our shareholders
· Stakeholder engagement
Results and dividends
The consolidated statement of comprehensive income is set out below and shows
the profit for the period.
The Directors do not recommend the payment of a dividend (2020 - £nil).
Post balance sheet events
Post balance sheet events are set out in Note 31.
Future developments
The outlook and future developments are set out in the Chairman's statement
and the Strategic Report.
Principal activities
The Group's principal activity is the operation of restaurants.
Directors
The Directors of the Group during the period were as follows:
Executive
Daniel Jonathan Plant
Mayuri Vachhani
Non-Executive
Keith Lassman
Samuel Kaye (resigned 14 May 2021)
Harald Samúelsson (appointed 19 May 2021)
Directors' interest in shares
As at 26 December 2021 As at 27 December 2020
Director Ordinary shares of 0.1p each Ordinary shares of 0.1p each %
%
Daniel Jonathan Plant 7,091,902 5.0% 7,091,902 5.0%
Samuel Kaye (resigned 14 May 2021) 20,882,197 14.8% 20,882,197 14.8%
Keith Lassman 1,421.983 1.0% 806,599 0.6%
Mayuri Vachhani - - - -
Harald Samúelsson - - - -
Share options
Director Grant Expiry date
Number Exercise price date Vesting period
Mayuri Vachhani 750,000 £0.03 17/10/2019
3 years 17/10/2029
B ordinary shares
Director Grant Expiry date
Number Exercise price date Vesting period
Daniel Jonathan Plant 15,676,640 £0.00 15/1/2021 1,2 4 years
15/1/2026
In January 2021 Daniel Jonathan Plant was awarded 15,676,640 'B' shares in
Tasty plc which can be converted to ordinary shares subject to achievement of
hurdle rates relating to the Company's share price.
Employees
Applications from disabled persons are given full consideration providing the
disability does not seriously affect the performance of their duties. Such
persons, once employed, are given appropriate training and equal
opportunities.
The Group takes a positive view toward employee communication and has
established systems for ensuring employees are informed of developments and
that they are consulted regularly.
Environment
We continue to maintain an average of 45% recycling across both brands with a
negligible amount of waste going to landfill.
As part of our ongoing energy efficiency programme there has been a focus on
energy saving. This includes a rigorous check list for branches which have
been and may be required to close during the pandemic.
Our waste oil is collected and converted into Bio Diesel and Bio Gas to ensure
that none is wasted.
The Group continues to work with its delivery partners in converting all our
delivery packaging to biodegradable and recyclable materials.
We have stopped using plastic straws, committed to a policy recommended by the
Humane League and currently looking at ways to reduce our carbon footprint.
The Group presents its greenhouse gases ("GHG") emissions and energy use data
under Streamlined Energy and Carbon Reporting ("SECR") for the year ended 26
December 2021:
tCO2e tCO2e
52 weeks ended 52 weeks ended
26 December 2021 27 December 2020
Scope 1 - Natural Gas 1,061 1,141
Scope 2 - Electricity 1,431 1,328
Scope 3 - Grey Fleet Mileage 83 78
Total 2,575 2,547
Energy Intensity ratio of 0.142 (2020: 0.131) has been measured using the
metric of Tonnes CO2e per m2 floor area ("tCO2e").
The Group's total energy consumption for the year ended 26 December 2021 was
12,872,041 kWh (2020 - 12,216,634 kWh).
Donations
The Group made no charitable or political donations in the period (2020 -
none)
Financial Instruments
Details of the use of financial instruments and the principal risks faced by
the Group are contained in Note 27 to the financial statements.
Going concern
At the time of approving the financial statements, the Directors have a
reasonable expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future. In reaching this conclusion
the Directors have considered the financial position of the Group, together
with its forecasts for the next 12 months and taking into account possible
changes in trading performance. The going concern basis of accounting has,
therefore, been adopted in preparing the financial statements.
Auditors
All of the current Directors have taken all reasonable steps necessary to make
themselves aware of any information needed by the Group's auditors for the
purposes of their audit and to establish that the auditors are aware of that
information. The Directors are not aware of any relevant audit information of
which the auditors are unaware.
Haysmacintyre LLP were appointed as the auditors and have expressed their
willingness to continue in office and a resolution to re-appoint them will be
proposed at the annual general meeting.
On behalf of the Board.
Daniel Jonathan Plant
Chief Executive Officer
22 March 2022
Statement of directors' responsibilities
The Directors are responsible for preparing the strategic report, the annual
report and the financial statements in accordance with applicable law and
regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have elected to prepare the Group
and Company financial statements in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European Union. Under company
law the Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the
Group and the Company and of the profit or loss of the Group for that period.
The Directors are also required to prepare financial statements in accordance
with the AIM Rules for Companies issued by the London Stock Exchange.
In preparing these financial statements, the Directors are required to:
· select suitable accounting policies and then apply them consistently;
· make judgements and accounting estimates that are reasonable and
prudent;
· state whether they have been prepared in accordance with IFRSs as
adopted by the European Union, subject to any material departures disclosed
and explained in the financial statements;
· prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the Group will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group's transactions and disclose with
reasonable accuracy at any time the financial position of the Group and enable
them to ensure that the financial statements comply with the requirements of
the Companies Act 2006. They are also responsible for safeguarding the assets
of the Group and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring the annual report and the financial
statements are made available on a website. Financial statements are published
on the Company's website (www.dimt.co.uk (http://www.dimt.co.uk) ) in
accordance with legislation in the United Kingdom governing the preparation
and dissemination of financial statements, which may vary from legislation in
other jurisdictions. The maintenance and integrity of the Company's website is
the responsibility of the Directors. The Directors' responsibility also
extends to the ongoing integrity of the financial statements contained
therein.
Consolidated statement of comprehensive income
for the 52 weeks ended 26 December 2021
Note 52 weeks ended 26 December 2021 52 weeks ended 27 December 2020
£'000 £'000
Revenue 3 34,909 24,228
Cost of sales (34,130) (30,330)
Gross profit\(loss) 779 (6,102)
Other income 3 4,208 5,413
Operating expenses (1,305) (9,328)
Operating profit\(loss) before highlighted items 3,549 (2,235)
Highlighted items 5 133 (7,782)
Operating profit\(loss) 4 3,682 (10,017)
Finance income 6 - 4
Finance expense 6 (2,497) (2,548)
Profit\(loss) before income tax 1,185 (12,561)
Income tax 9 - (105)
Profit\(loss) and total comprehensive income\(loss) for the period 1,185 (12,666)
Earnings per share for profit\(loss) attributable to the ordinary equity
holders of the company
Basic earnings per share 10 0.84p (8.98p)
Diluted earnings per share 10 0.74p (8.98p)
The notes below form part of these financial statements.
Consolidated statement of changes in equity
for the 52 weeks ended 26 December 2021
Share capital Share premium Merger reserve Retained earnings Total
£'000 £'000 £'000 £'000 £'000
Balance at 29 December 2019 6,061 24,251 992 (18,018) 13,286
Cost of placing of ordinary shares - - - (68) (68)
Total comprehensive loss for the period - - - (12,666) (12,666)
Share based payments - - - 44 44
Balance at 27 December 2020 6,061 24,251 992 (30,708) 596
Issue of ordinary shares - 3 - - 3
Total comprehensive income for the period - - - 1,185 1,185
Share based payments - - - 120 120
Balance at 26 December 2021 6,061 24,254 992 (29,403) 1,904
The notes below form part of these financial statements.
Company statement of changes in equity
for the 52 weeks ended 26 December 2021
Share capital Share premium Retained profit Total
£'000 £'000 £'000 £'000
Balance at 29 December 2019 6,061 24,251 (19,842) 10,470
Cost of placing of ordinary shares - - (68) (68)
Total comprehensive loss for the period - - (3,254) (3,254)
Share based payments - - 44 44
Balance at 27 December 2020 6,061 24,251 (23,120) 7,192
Issue of ordinary shares - 3 - 3
Total comprehensive loss for the period - - (145) (145)
Share based payments - - 120 120
Balance at 26 December 2021 6,061 24,254 (23,145) 7,170
The notes below form part of these financial statements.
Consolidated balance sheet
At 26 December 2021
26 December 2021 27 December 2020
Note £'000 £'000
Non-current assets
Intangible assets 12 28 26
Property, plant and equipment 13 14,562 15,572
Right-of-use assets 13 37,047 39,811
Other non-current assets 17 105 129
51,742 55,538
Current assets
Inventories 16 2,103 1,822
Trade and other receivables 17 1,355 1,363
Cash and cash equivalents 11,005 8,028
14,463 11,213
Total assets 66,205 66,751
Current liabilities
Trade and other payables 18 (10,493) (10,617)
Lease liabilities 14 (2,024) (2,904)
Borrowings 21 (313) -
(12,830) (13,521)
Non-current liabilities
Provisions 19 (297) (335)
Lease liabilities 14 (50,157) (52,219)
Long-term borrowings 21 (937) -
Other Payables 18 (80) (80)
(51,471) (52,634)
Total liabilities (64,301) (66,155)
Total net assets 1,904 596
Equity
Share capital 22 6,061 6,061
Share premium 23 24,254 24,251
Merger reserve 23 992 992
Retained deficit 23 (29,403) (30,708)
Total equity 1,904 596
The financial statements were approved by the Board of Directors of the
Company and authorised for issue on 22 March 2022 and signed on their behalf
by Daniel Jonathan Plant.
The notes below form part of these financial statements.
Company balance sheet
At 26 December 2021
26 December 2021 27 December 2020
Note
£'000 £'000
Non-current assets
Investments 15 3,334 3,214
Other non-current assets 17 3,836 3,978
Total net assets 7,170 7,192
Equity
Share capital 22 6,061 6,061
Share premium 23 24,254 24,251
Retained deficit 23 (23,145) (23,120)
Total equity 7,170 7,192
The Parent Company, Tasty plc, has taken advantage of the exemption in s408 of
the Companies Act 2006 not to publish its own income statement. The Parent
Company made a loss of £0.14m (2020 - loss of £3.2m) for the period. The
Parent Company has not recognised leases under IFRS 16 in its balance sheet as
management have concluded that the substance of the leases is held by the
subsidiary, Took Us A Long Time Ltd ("TUALT") and recognised within its
Company accounts.
The financial statements were approved by the board of directors of the
Company and authorised for issue on 22 March 2022 and signed on their behalf
by Daniel Jonathan Plant.
The notes below form part of these financial statements.
Consolidated cash flow statement
For the 52 weeks ended 26 December 2021
52 weeks ended 26 December 2021 52 weeks ended 27 December 2020
Note
£'000 £'000
Operating activities
Cash generated from operations 29 7,826 7,575
Corporation tax received 9 - (105)
Net cash inflow from operating activities 7,826 7,470
Investing activities
Proceeds from sale of property, plant and equipment
3 2,039
Purchase of property, plant and equipment 13 (544) (120)
Interest received - 4
Net cash inflow from investing activities (541) 1,923
Financing activities
Net proceeds from issues of ordinary shares 3 -
Bank loan receipt 30 1,250 -
Bank loan repayment 30 - (1,652)
Finance expense 6 (59) (34)
Finance expense (IFRS 16) 6 (2,438) (2,514)
Principal paid on lease liabilities 30 (3,064) (1,735)
Net cash used in from financing activities (4,308)
(5,935)
Net increase in cash and cash equivalents 2,977 3,458
Cash and cash equivalents brought forward 8,028 4,570
Cash and cash equivalents as at the end of the period 11,005 8,028
The notes below form part of these financial statements.
Company cash flow statement
For the 52 weeks ended 26 December 2021
52 weeks ended 26 December 2021 52 weeks ended 27 December 2020
Note
£'000 £'000
Operating activities
Cash generated from operations (3) 68
Corporation tax paid - -
Net cash outflow from operating activities (3) 68
Investing activities - -
Purchase of property, plant and equipment - -
Net cash in flow / (used in) investing activities - -
Financing activities
Net proceeds from issues of ordinary shares 3 (68)
Net cash flows used in financing activities 3 (68)
Net increase in cash and cash equivalents - -
Cash and cash equivalents brought forward - -
Cash and cash equivalents as at the end of the period - -
The notes below form part of these financial statements
1 Accounting policies
Tasty plc is a public listed company incorporated and domiciled in England and
Wales. The Company's ordinary shares are listed on AIM. Its registered address
is 32 Charlotte Street, London, WC1T 2NQ.
(a) Statement of compliance
These financial statements of the Group and Company have been prepared in
accordance with International Financial Reporting Standards, International
Accounting Standards and Interpretations (collectively IFRS) issued by the
International Accounting Standards Board (IASB) as adopted by the United
Kingdom ("adopted IFRSs"). These financial statements have also been prepared
in accordance with those parts of the Companies Act 2006 that are relevant to
companies that prepare their financial statements in accordance with IFRS.
(b) Basis of preparation
The financial statements cover the 52-week period ended 26 December 2021, with
a comparative period of the 52-week period ended 27 December 2020. The
financial statements are presented in sterling, rounded to the nearest
thousand and are prepared on the historical cost basis. The accounting
policies of the Company are consistent with the policies adopted by the Group.
(c) Going concern
As at 26 December 2021, the Group had net assets of £1.9m (2020: £0.6m). The
Group meets its day-to-day working capital requirements through the generation
of operating cashflow, equity raise and bank finance. The Group's principal
sources of funding are:
· Issues of ordinary share capital in the Company on AIM.
· a £1.25m, four-year term loan from its existing bankers, Barclays
Bank plc (the "Facility"), in order to strengthen its balance sheet and
provide additional working capital support. The Facility was drawn down in
January 2021. The Facility has a capital repayment holiday of 12 months and
carries interest at a rate of 4.5% per annum over the Bank of England Base
Rate, following drawdown. The Group has also secured a £250,000 overdraft
facility. The facility is currently unutilised.
The pandemic led to a high level of uncertainty and disruption in the economy
and hospitality industry. During this period costs were minimised and cash
outflows reduced.
Since dine-in reopened in May 2021, trading until December 2021 was highly
encouraging. Following the Government's advice in December and the spread of
the Omicron variant impacted Christmas sales, December was weaker than we
anticipated. Trade for the start of 2022 is encouraging.
The Group monitors cash balances and prepares regular forecasts, which are
reviewed by the Board. These forecasts include our best estimates and
judgements based on currently available information and current environment.
Judgement is particularly required as to the impact on trade of the
restrictions being eased as this will also mean that many more people will be
holidaying abroad.
Having reviewed the updated forecast and given the ability of the Group to
manage costs, cash position and the untilised bank loan, the Directors believe
that it remains appropriate to prepare the financial statements on a going
concern basis.
(d) Leases
Group's accounting policies for leases are as follows:
Lessee accounting
Effective for periods starting on or after 1 January 2019, IFRS 16 has
replaced IAS 17 and IFRIC4 (Determining whether an arrangement contains a
lease).
The change in definition of a lease mainly relates to the concept of control.
IFRS 16 distinguishes between leases and service contracts on the basis of
whether the use of an identified asset is controlled by the customer. Control
is considered to exist if the customer has:
• The right to obtain substantially all of the economic benefits
from the use of an identified asset; and
• The right to direct the use of that asset in exchange for
consideration.
The Group adopted IFRS 16 for its period starting 30 December 2019 using the
modified retrospective approach on transition, recognising leases at the
carried forward value had they been treated as such from inception, without
restatement of comparative figures. On adoption of IFRS 16, the Group
recognised right-of-use assets and lease liabilities in relation to the
restaurant sites it leases for its
business.
All leases are accounted for by recognising a right-of-use asset and a lease
liability except for:
• Leases of low value assets, and
• Leases with a duration of 12 months or less.
Subsequent to initial measurement lease liabilities increase as a result of
interest charged at a constant rate on the balance outstanding and are reduced
for lease payments made. Right-of-use assets are amortised on a straight-line
basis over the remaining term of the lease.
The Group's leases are held across Tasty plc or Took Us Long Time Ltd
("TUALT"). In determining where the assets and liabilities should be
accounted for, we have reviewed which entity derives the benefit and rights to
use the asset. In assessing this we have reviewed where the trade occurs,
where staff are employed and where day to day activity is managed from. We
have concluded that the substance of the lease is that it is held by TUALT and
accordingly recognised the lease liabilities within the TUALT company
financial statements.
The lease liabilities recognised in TUALT but in the name of Tasty plc
totalled £43m at 26 December 2021 (£44m at 27 December 2020). Accordingly,
this balance represents a contingent liability for the Company only.
Lessor accounting
Under IFRS 16, a lessor continues to classify leases as either finance leases
or operating leases and account for those two types of leases differently.
Based on an analysis of the Group's operating leases as at 26 December 2021 on
the basis of the facts and circumstances that exist at that date, the
Directors of the Group have assessed that the impact of this change has not
had any impact on the amounts recognised in the Group's consolidated financial
statements.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease
liabilities for short-term leases that have a lease term of 12 months or less
and leases of low value assets. The Group recognises these payments as an
expense on a straight-line basis over the lease term. Currently the Group has
no low value assets or short term leases.
Covid-19 related rent concessions
IFRS 16 defines a lease modification as a change in the scope of a lease, or
the consideration for a lease, that was not part of the original terms and
conditions of the lease. The Group has considered the Covid-19 related rent
concessions and applied the lease modifications accounting.
(e) Changes in accounting policies and disclosures
New standards, amendments to standards or interpretations adopted by the Group
Amendments to accounting standards applied in the year ended 26 December 2021
were as follows:
• Definition of Material - amendments to IAS 1 and IAS 8; and
• Revised Conceptual Framework for Financial Reporting; and
The application of these did not have a material impact on the group's
accounting treatment and has therefore not resulted in any material changes.
New standards, amendments to standards or interpretations not yet adopted by
the Group
The following new standards, amendments to standards or interpretations are
mandatory for the first time for the financial years beginning on or after 1
January 2021. No standards have been early adopted by the Group.
• Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 -
Interest Rate Benchmark Reform Phase 2
• Amendment to IFRS 16 - Covid-19-Related Rent Concessions beyond 30
June 2021
• Annual Improvements to IFRS Standards 2018-2020 Cycle
• Amendment to IAS 37 - Onerous Contracts: Cost of Fulfilling a
Contract
• Amendment to IAS 1 - Classification of Liabilities as Current or
Non-current
• Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of
Accounting Policies
• Amendments to IAS 8 - Definition of Accounting Estimates
We are currently assessing the impact of these new accounting standards and
amendments. The amendments will not have any significant impact on the Group.
(f) Basis of consolidation
The consolidated financial statements incorporate the results of the Company
and its subsidiary, Took Us A Long Time Limited. The accounting period of the
subsidiary is co-terminous with that of the parent undertaking.
(g) Revenue
The Group's revenue is derived from goods and services provided to the
customers from dine-in and delivery and takeaway. With revenue recognised at
the point in time when control of the goods has transferred to the customer.
Control passes to the customers at the point at which food and drinks are
provided and the Group has a present right for payment.
(h) Other income
Included in Other income is the rental income from operating leases. Rental
income is recognised in the period to which it relates, and rent free periods
would be spread over the terms of the lease. The cost of these leases is
included within the cost of sales. The Group has received Government grants in
relation to the Coronavirus Job Retention Scheme ("CJRS") and "Retail and
Hospitality Business Grants", provided by the Government in response to
Covid-19's impact on the business. In accordance with the IAS 20 (Accounting
for Government Grants and Disclosure of Government Assistance) guidelines, the
Group has recognised the salary expense as normal and recognised the CJRS
grant income in profit and loss as the Group becomes entitled to the grant.
"Retail and Hospitality Business Grants" are recognised when there is
reasonable assurance that the Group has met the conditions attaching to these
grants.
(i) Retirement benefits: Defined contribution schemes
Contributions to defined contribution pension schemes are charged to the
consolidated income statement in the period to which they relate.
(j) Share based payments
Certain employees (including Directors and senior executives) of the Group
receive remuneration in the form of share-based payment transactions, whereby
employees render services as consideration for equity instruments (e.g.
options, shares etc).
The cost of this is measured by reference to the fair value at the date on
which they are granted. The fair value is determined by using an appropriate
pricing model (e.g. binomial or Monte Carlo model).
The cost of equity-settled transactions is recognised, together with a
corresponding increase in equity, over the period in which the performance
and/or service conditions are fulfilled, ending on the date on which the
relevant employees become fully entitled to the award (the vesting date). The
cumulative expense recognised for equity-settled transactions at each
reporting date until the vesting date reflects the extent to which the vesting
period has expired and the Group's best estimate of the number of equity
instruments that will ultimately vest. The profit or loss charge or credit for
a period represents the movement in cumulative expense recognised as at the
beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for
awards where vesting is conditional upon a market condition, which are treated
as vesting irrespective of whether or not the market condition is satisfied,
provided that all other performance and/or service conditions are satisfied.
The dilutive effect of outstanding options is reflected as additional share
dilution in the computation of earnings per share.
(k) Borrowing costs
Borrowing costs are recognised in the income statement in the period in which
they are incurred.
(l) Externally acquired intangible assets
Externally acquired intangible assets are initially recognised at cost and
subsequently amortised on a straight-line basis over their useful economic
lives. The amortisation expense is included within the cost of sales line in
the consolidated income statement.
The significant intangibles recognised by the Group and their useful economic
lives are as follows:
Intangible asset Useful economic life
Trade marks 10 years
(m) Property, plant and equipment
Items of property, plant and equipment are stated at cost less accumulated
depreciation (see below) and impairment losses.
Depreciation is provided to write off the cost or valuation, less estimated
residual values, of all fixed assets, evenly over their expected useful lives
and it is calculated at the following rates:
Leasehold improvements over the period of the lease
Fixtures, fittings and equipment 10% per annum straight line
Computers 20% per annum straight line
Right-of-use assets over the period of the lease
Property, plant and equipment are reviewed for impairment in accordance with
IAS 36 Impairment of Assets, when there are indications that the carrying
value may not be recoverable. Impairment charges are recognised in the
statement of comprehensive income. See note 2(d) for further details.
(n) Non-current assets held for sale
Non-current assets are classified as held for sale when the Board plans to
sell the assets and no significant changes to this plan are expected. The
assets must be available for immediate sale, an active programme to find a
buyer must be underway and be expected to be concluded within 12 months with
the asset being marketed at a reasonable price in relation to the fair value
of the asset.
Non-current assets classified as held for sale are measured at the lower of
their carrying amount immediately prior to being classified as held for sale
and fair value less costs of disposal. Following their classification as held
for sale, non-current assets are not depreciated.
(o) Provisions
In the period to 26 December 2021, the Group has recognised a provision for
dilapidations for a number of sites, where the need to carry out the work has
been identified but a full survey and commission has not been undertaken and
therefore management has applied their judgment in determining the provision.
(p) Loans and receivables
These assets arise principally from the provision of goods and services to
customers (e.g. trade receivables), but also incorporate other types of
financial assets where the objective is to hold these assets in order to
collect contractual cash flows and the contractual cash flows are solely
payments of principal and interest. They are initially recognised at fair
value plus transaction costs that are directly attributable to their
acquisition or issue, and are subsequently carried at amortised cost using the
effective interest rate method, less provision for impairment.
Impairment provisions for trade receivables are recognised based on the
simplified approach within IFRS 9 using a provision matrix in the
determination of the lifetime expected credit losses. During this process the
probability of the non-payment of the trade receivables is assessed. This
probability is then multiplied by the amount of the expected loss arising from
default to determine the lifetime expected credit loss for the trade
receivables. For trade receivables, which are reported net, such provisions
are recorded in a separate provision account with the loss being recognised in
the consolidated statement of comprehensive income. On confirmation that the
trade receivable will not be collectable, the gross carrying value of the
asset is written off against the associated provision.
Impairment provisions for receivables from related parties and loans to
related parties are recognised based on a forward-looking expected credit loss
model. The methodology used to determine the amount of the provision is based
on whether there has been a significant increase in credit risk since initial
recognition of the financial asset. For those where the credit risk has not
increased significantly since initial recognition of the financial asset,
twelve month expected credit losses along with gross interest income are
recognised. For those for which credit risk has increased significantly,
lifetime expected credit losses along with the gross interest income are
recognised. For those that are determined to be credit impaired, lifetime
expected credit losses along with interest income on a net basis are
recognised.
The Group's loans and receivables comprise trade and other receivables and
cash and cash equivalents in the balance sheet. The Company's loans and
receivables comprise only inter-Company receivables. Cash and cash equivalents
include cash in hand and deposits held with banks.
(q) Apprenticeship funding and levy
The payments made under the levy represent a prepayment for training services
expected to be received and is recognised as an asset until the receipt of the
service. When the training service is received, an appropriate expense is
recognised. The apprenticeship grant income is deferred until apprentices
receive training under the rule of the scheme and we are satisfied that we
have fully complied with the scheme. We have applied an element of judgement
until a full inspection is carried out.
(r) Financial liabilities
Financial liabilities include trade payables, and other short-term monetary
liabilities, which are initially recognised at fair value and subsequently
carried at amortised cost.
Bank borrowings are initially recognised at fair value and are subsequently
measured at amortised costs using the effective interest method. Interest
expense includes initial transaction costs and any premium payable on
redemption as well as any interest payable while the liability is outstanding.
(s) Inventories
Raw materials and consumables
Inventories are stated at the lower of cost and net realisable value. Cost
comprises all costs of purchase and other costs incurred in bringing the
inventories to their present location and condition. Net realisable value is
based on estimated selling price less costs incurred up to the point of sale.
Crockery and utensils (Smallwares)
Smallware inventories are held at cost which is determined by reference to the
quantity in issue to each restaurant. Smallware inventory relates to small
value items which have short life spans relating to kitchen and bar equipment.
These items are recorded under inventory as they are utilised in providing
food and beverage to customers.
(t) Taxation
Tax on the profit and loss for the year comprises current and deferred tax.
Tax is recognised in the profit and loss except to the extent that it relates
to items recognised directly in equity, in which case it is recognised in
equity. Current tax is the expected tax payable or receivable on the taxable
income or loss for the year, using tax rates enacted or substantively enacted
at the balance sheet date, and any adjustment to tax payable in respect of
previous years.
Deferred tax assets and liabilities are recognised where the carrying amount
of an asset or liability in the balance sheet differs from its tax base,
except for differences arising on:
· The initial recognition of goodwill
· The initial recognition of an asset or liability in a transaction
which is not a business combination and at the time of the transaction affects
neither accounting or taxable profit.
Recognition of deferred tax assets is restricted to those instances where it
is probable that taxable profit will be available against which the difference
can be utilised.
Deferred tax is provided using the balance sheet liability method, providing
for all temporary differences between the carrying amounts of assets and
liabilities recorded for reporting purposes and the amounts used for tax
purposes.
The amount of the asset or liability is determined using tax rates that have
been enacted or substantively enacted by the reporting date and are expected
to apply when the deferred tax liabilities or assets are settled or recovered.
Deferred tax balances are not discounted.
(u) Goodwill
Goodwill represents the difference between the fair value of consideration
paid and the carrying value of the assets and liabilities acquired. Goodwill
arose on acquisition of a group of leases.
Goodwill is stated as originally calculated less any accumulated provision for
impairment. Goodwill is allocated to individual CGUs, where each CGU is a
restaurant, and is subject to an impairment review at each reporting date.
(v) Investments
Investments in subsidiaries are included in the Company's Statement of
Financial Position at cost less provision for impairment.
(w) Share capital
The Company's ordinary shares are classified as equity instruments.
(x) Operating profit
Operating profit is stated after all expenses, but before financial income or
expenses. Highlighted items are items of income or expense which because of
their nature and the events giving rise to them, are not directly related to
the delivery of the Group's restaurant service to its patrons and merit
separate presentation to allow shareholders to understand better the elements
of financial performance in the year, so as to facilitate comparison with
prior periods and to assess better trends in financial performance.
(y) Earnings per share
Basic earnings per share values are calculated by dividing net profit/(loss)
for the year attributable to Ordinary equity holders of the parent by the
weighted average number of Ordinary shares outstanding during the year.
2 Critical accounting estimates and judgements
The preparation of the Group's financial statements requires management to
make certain estimates, judgements and assumptions that affect the reported
amount of assets and liabilities, and the disclosure of contingent liabilities
at the statement of financial position date and amounts reported for revenues
and expenses during the year. However, uncertainty about these assumptions and
estimates could result in outcomes that could require a material adjustment to
the carrying amount of the assets or liability affected in the future.
Estimates and judgements are continually evaluated based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. In the future, actual
experience may differ from these estimates and assumptions. The estimates and
assumptions that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next financial
period are discussed below.
(a) Share based payments (Note 26)
The Group operates equity share-based remuneration schemes for employees.
Employee services received and the corresponding increase in equity are
measured by reference to the fair value of the equity instruments at the date
of grant, excluding the impact of any non-market vesting conditions. The fair
value of share options is estimated by using valuation models, such as
binomial or the Monte Carlo model on the date of grant based on certain
assumptions. Those assumptions are described in note 26 and include, among
others, the dividend growth rate, expected volatility, expected life of the
options (for options with market conditions) and number of options expected to
vest.
(b) Accruals (Note 18)
In order to provide for all valid liabilities which exist at the balance sheet
date, the Group is required to accrue for certain costs or expenses which have
not been invoiced and therefore the amount of which cannot be known with
certainty. Such accruals are based on management's best estimate and past
experience. Delayed billing in some significant expense categories
such as utility costs can lead to sizeable levels of accruals. The total value
of accruals as at the balance sheet date is set out in note 18.
(c) Useful lives of Right-of-use assets, property, plant and equipment
(Note 13)
Property, plant and equipment are amortised or depreciated over their useful
lives. Useful lives are based on management estimates of the period that the
assets will generate revenue, which are periodically reviewed for continued
appropriateness. Right-of-use assets are depreciated over the life of the
lease. The life of the lease is the minimum committed lease period.
(d) Impairment reviews (Note 13)
In carrying out an impairment review in accordance with IAS 36 it has been
necessary to make estimates and judgements regarding the future performance
and cash flows generated by individual trading units which cannot be known
with certainty. The Group views each restaurant as a separate cash generating
unit ("CGU"). Past performance is often used as a guide in estimating future
performance, or comparison with similar sites. Where the circumstances
surrounding a particular trading unit have changed then forecasting future
performance becomes extremely judgemental and for these reasons the actual
impairment required in the future may differ from the charge made in the
financial statements. When assessing a CGU recoverable amount, the value in
use calculation uses a discounted cash flow model which is sensitive to the
discount rate and the growth rate used after taking into account potential
sale value. The cashflow projections are influenced by factors which are
inherently uncertain such as footfall and non-controllable costs such as rates
and license costs. The future cashflows are harder to predict due to the
pandemic.
All assets (ROU, fixed assets and goodwill) are reviewed for impairment in
accordance with IAS 36 Impairment of Assets, when there are indications that
the carrying value may not be recoverable. Impairment charges are recognised
in the statement of comprehensive income.
All assets are subject to impairment tests whenever events or changes in
circumstances indicate that their carrying amount may not be recoverable.
Where the recoverable amount is higher than the carrying amount of the CGU, no
further assessment is required. Where the carrying value of an asset or a
CGU exceeds its recoverable amount (i.e. the higher of value in use and fair
value less costs to dispose of the asset), the asset is written down
accordingly. In the absence of any information about the fair value of a
CGU, the recoverable amount is deemed to be its value in use. Value in use is
calculated using cash flows over the remaining life of the lease for the CGU
discounted at 6% (2020: 6%), being the rate considered to reflect the risks
associated with the CGUs. The discount rate is based on the Group's weighted
average cost of capital ("WACC") which is used across all CGUs due to their
similar characteristics.
The Covid-19 pandemic has resulted in an increased uncertainty and greater
difference in performance across CGUs depending on whether it is located in a
residential, city centre, high street or tourist location. The location also
impacts when site can resume normal trading. Due to lockdowns in 2021, the
cashflow in 2021 is not always indicative of the future cashflows. The
cashflow of each CGU has been determined based on management's judgement of
future performance based on a combination of historical performance, impact of
the pandemic and expected recovery in future years and therefore each CGU's
cashflow has been selected on an individual criterion. Management's
conservative judgement has been applied in selecting this criterion due to the
uncertainty arising from amongst other conditions, cost of living increases
and utility cost pressures and therefore a 0.5% growth rate (2020 - 0.5%) has
been applied. Included within the cashflow is management's estimate of the
capital expenditure required to maintain performance of the sites in the
future years.
(e) Goodwill impairment reviews (Note 12)
The Group determines whether goodwill is impaired on an annual basis and this
requires an estimation of the value in use of the cash-generating units to
which the goodwill is allocated. This involves estimation of future cash flows
and choosing a suitable discount rate. Full details are supplied in note 12,
together with an analysis of the key assumptions.
(f) Intercompany provision (Note 17)
In carrying out a review of intercompany loan in accordance with IFRS 9 it has
been necessary to make estimates and judgements regarding the repayment of the
loan by its subsidiary to the Company. A sensitivity analysis has been
performed on the repayment of loan value.
(g) Crockery and utensils (Smallwares) inventory
The cost of replenishing smallwares is expensed directly through the income
statement. Smallwares is recognised at historic cost and tested for impairment
on an annual basis.
(h) Lease liabilities (Note 1(d))
The calculation of lease liabilities requires the Group to determine an
incremental borrowing rate ("IBR") to discount future minimum lease payments.
The IBR is the rate of interest that the Group would have to pay to borrow
over a similar term, and with a similar security, the funds necessary to
obtain an asset of a similar value to the right-of-use asset in a similar
economic environment. The IBR rate of 4.6% therefore reflects what the Group
'would have to pay', which requires estimation when no observable rates are
available or when they need to be adjusted to reflect the terms and conditions
of the lease. As at 26 December 2021, a sensitivity analysis has been
conducted on the lease liabilities which shows that increasing the IBR rate by
1% will decrease the lease liability by £3.3m and decrease the right-of-use
asset pre-impairment by £3.3m.
(i) Provision
A dilapidation provision is made for a number of sites, where the need to
carry out the work has been identified but a full survey and commission has
not been undertaken and therefore management has applied their judgment in
determining the provision. The Group has not made a provision for the costs
of restoring the condition of sites at the end of the leases. This is based on
management experience and judgement.
The apprenticeship grant income is deferred until apprentices receive training
under the rule of the scheme and we are satisfied that we have fully complied
with the scheme. We have applied an element of judgement until a full
inspection is carried out.
(j) Lease recognition
The Group's leases are held across Tasty plc or Took Us Long Time Ltd
("TUALT"). In determining where the assets and liabilities should be
accounted for, we have reviewed which entity derives the benefit and rights to
use the asset. In assessing this we have reviewed where the trade occurs,
where staff are employed and where day to day activity is managed from. We
have adjudged that the substance of the lease is that it is held by TUALT and
accordingly recognised the lease liabilities within the TUALT company
accounts.
3 Revenue, other income and segmental analysis
The Group's activities, comprehensive income, assets and liabilities are
wholly attributable to one operating segment (operating restaurants) and
arises solely in one geographical segment (United Kingdom). All the Group's
revenue is recognised at a point in time.
An analysis of the Group's total revenue is as follows:
52 weeks ended 26 December 2021 52 weeks ended 27 December
2020
£'000 £'000
Sale of goods and services: dine-in 26,319 21,662
Sale of goods and services: delivery and takeaway 8,590 2,566
34,909 24,228
An analysis of the Group's other income is as follows:
52 weeks ended 26 December 2021 52 weeks ended 27 December 2020
£'000 £'000
Sub-let site rental income 295 267
Coronavirus Job Retention Scheme (CJRS) and Business Grants 5,146
3,913
4,208 5,413
The Group has received Government grants in relation to the Coronavirus Job
Retention Scheme ("CJRS") and Covid-19 Business Grants, provided by the
Government in response to Covid-19's impact on the business.
In accordance with IAS 20 (Accounting for Government Grants and Disclosure of
Government Assistance) guidelines, the Group has recognised the salary expense
as normal and recognised the grant income in profit and loss as the Group
becomes entitled to the grant. The CJRS grant and business grants of £3.9m
have been recognised within other income. "Retail and Hospitality Business
Grants" are recognised when there is reasonable assurance that the Group has
met the conditions attaching to these grants.
4 Operating loss
52 weeks ended 26 December 2021 52 weeks ended 27 December 2020
This has been arrived at after charging £'000 £'000
Staff costs 15,257 14,841
Share based payments 120 44
Amortisation of intangible assets 3 3
Depreciation of right-of-use assets (IFRS16) 3,142 3,592
Depreciation property, plant and equipment 1,297 1,342
Dilapidations provision charge - 335
Dilapidations provision utilisation (38) -
Restructure and consultancy 7 408
Impairment of smallware inventory due to Covid-19 - 400
Impairment of Goodwill - 326
Impairment release of property, plant and equipment - (2,255)
Impairment of right-of-use assets - 10,043
Profit on disposal of property, plant and equipment (3) (1,184)
Auditor remuneration:
Audit fee - Parent Company 10 8
- Group financial statements 45 31
- Subsidiary undertaking 10 8
Audit related assurance services 3 5
Taxation advisory services 2 2
5 Highlighted items - charged to operating expenses
52 weeks ended 26 December 2021 52 weeks ended 27 December 2020
£'000 £'000
Profit on disposal of property, plant and equipment
3 1,184
Restructure and consultancy (7) (408)
Impairment of Goodwill - (326)
Impairment release of tangible assets 6,171 2,255
Impairment of tangible assets (6,171) (10,043)
Share based payments (120) (44)
Impairment of smallware inventory due to Covid-19 - (400)
Gain on lease modifications 257 -
133 (7,782)
The above items have been highlighted to give more detail on items that are
included in the consolidated statement of comprehensive income and which when
adjusted shows a profit or loss that reflects the ongoing trade of the
business.
This net impairment movement is £nil, however for some sites there was an
impairment charge of £6.2m and for other sites a release of £6.2m.
6 Finance income and expense
52 weeks ended 26 December 2021 52 weeks ended 27 December 2020
£'000 £'000
Interest receivable - (4)
Interest payable 2,497 2,548
2,497 2,544
7 Employees
52 weeks ended 26 December 2021 52 weeks ended 27 December 2020
Staff costs (including Directors) consist of: £'000 £'000
Wages and salaries 13,933 13,668
Social security costs 1,101 951
Other pension costs 223 222
Equity settled share based payment expense 120 44
15,377 14,885
The average number of persons, including Directors, employed by the Group
during the period was 821 of which 805 were restaurant staff and 16 were
head-office (2020 - 810 of which 796 were restaurant staff and 14 were
head-office staff). The second-half of 2021 the average number of staff was
934.
No staff are employed by the Company (2020 - no staff).
Of the total staff costs £14.3m was classified as cost of sales (2020 -
£13.8m) and £1.1m as operating expenses (2020 - £1.0m). Redundancy costs of
£0.0m (2020 - £0.09m) have been included as a cost of Restructure and
Consultancy in Note 5.
8 Directors and key management personnel remuneration
Key management personnel identified as the Directors are those persons having
authority and responsibility for planning, directing and controlling the
activities of the Group, and represent the Directors of the Group. The
remuneration of the Directors for the period ended 26 December 2021 is as
follows:
Emoluments Bonus Share based payments Pensions Benefits Social security costs
2021 Total 2020
Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
J Plant 135 - 101 - - 17 253 143
S Kaye (resigned 14 May 2021) 12 - - -
- 1 13 100
A Kaye (resigned 15 September 2020) - - - -
24
- - -
K Lassman 36 - - - - 4 40 17
M Vachhani 135 - 4 5 2 17 163 156
Harald Samúelsson (appointed 19 May 2021) 33 - - 1
- 3 37 -
Total 351 - 105 6 2 42 506 440
Company
The Company paid no director emoluments during the year (2020 - none).
9 Income tax expense
52 weeks ended 26 December 2021 52 weeks ended 27 December 2020
£'000 £'000
UK Corporation tax
Adjustment in respect to previous years - 105
Total current tax - 105
Deferred tax
Origination and reversal of temporary differences - -
Total deferred tax - -
Total income tax credit - -
The tax charge for the period is lower than the standard rate of (2020 - lower
than) corporation tax in the UK. The differences are explained below:
52 weeks ended 26 December 2021 52 weeks ended 27 December 2020
£'000 £'000
Profit\ (loss) before tax 1,185 (12,561)
Tax on loss at the ordinary rate of corporation
tax in UK of 19% (2020 - 19%) 225 (2,387)
Effects of
Fixed assets differences 101 -
Expenses not deductible for tax 22 283
Income not taxable for tax purposes - (448)
Remeasurement of deferred tax for changes in tax rates (1,055)
(98)
Movement in deferred tax not recognised 713 2,462
Adjustment in respect of previous years - 105
Other movements (6) 188
Total tax charge - 105
Factors affecting future tax charges
Deferred taxes at the balance sheet date have been measured using the enacted
tax rates at each date. These rates are 19% at 26 December 2021 (19% at 27
December 2020).
In March 2021 it was announced the UK corporation tax rate would increase to
25% in April 2023. This announcement does not constitute substantive
enactment, however, the disclosed but unrecognised deferred tax disclosed in
Note 20 is calculated at the future tax rate of 25%.
10 Earnings per share
26 December 27 December
2021 2020
Pence Pence
Basic profit\ (loss) per ordinary share 0.84 (8.98)
Diluted profit\ (loss) per ordinary share 0.74 (8.98)
2021 2020
Number '000 Number '000
Profit\ (loss) per share has been calculated using the numbers shown below:
Weighted average number of ordinary shares used as the denominator in 141,090 141,090
calculating basic earnings per share
Adjustments for calculation of diluted earnings per share:
Ordinary B shares 14,815 141,090
Options 3,265 -
Weighted average number of ordinary shares and potential ordinary shares used 159,170 141,090
as the denominator in calculating diluted earnings per share
2021 2020
£'000 £'000
Profit\ (loss) for the financial period 1,185 (12,666)
The weighted average number of ordinary shares outstanding is increased by the
weighted average number of additional ordinary shares that would have been
outstanding assuming the conversion of all dilutive potential ordinary
shares. Due to the profit made in the year; all share options are considered
dilutive.
11 Dividend
No final dividend has been proposed by the Directors (2020 - £nil).
12 Intangibles
Trademarks Goodwill Total
£'000 £'000 £'000
At 29 December 2019 26 326 352
Additions 3 - 3
Amortisation of trademarks (3) - (3)
Impairments - (326) (326)
At 27 December 2020 26 - 26
Additions 5 - 5
Amortisation of trademarks (3) - (3)
Impairments - - -
At 26 December 2021 28 - 28
The recoverable amount of goodwill has been determined on a value in use
basis. This has been based on the performance of the units since they were
acquired and management's forecasts, which assume the sites will perform at
least as well as the market generally. The forecast cash flows cover a period
of the committed lease length, assuming a growth rate of 0.5% (2020 - 0.5%)
and are discounted at a rate of 6% (2020 - 6%). During the 52 weeks ended 26
December 2021, the Group recognised an impairment loss of £nil (2020 -
£0.3m) in relation to previously acquired goodwill recognised on acquisition
of the restaurants noted in the table below. The impairment charge reflects
the forecast cashflow following the pandemic. Goodwill had been allocated to
CGUs as follows;
Goodwill £'000
Shaftesbury Avenue 196
Cambridge 130
At 29 December 2019 326
Impairments (326)
At 27 December 2020 -
13 Property, plant and equipment and right-of-use assets
Leasehold improvements Furniture fixtures and computer equipment Total fixed assets Total
Right-of-use assets
£'000 £'000 £'000 £'000 £'000
Cost
At 30 December 2019 38,661 10,107 48,768 55,119 103,887
Additions 2 118 120 - 120
Lease modifications - - - (814) (814)
Disposals (1,487) (333) (1,820) (859) (2,679)
At 27 December 2020 37,176 9,892 47,068 100,514
53,446
Additions 145 399 544 951 1,495
Lease modifications
- - - (830) (830)
At 26 December 2021 37,321 10,291 47,612 101,179
53,567
Depreciation
At 29 December 2019 26,674 7,524 34,198 - 34,198
Provided for the period 757 585 1,342 4,934
3,592
Impairment (2,133) (122) (2,255) 10,043 7,788
Disposals (1,464) (325) (1,789) - (1,789)
At 27 December 2020 23,834 7,662 31,496 45,131
13,635
Provided for the period 743 554 1,297 4,439
3,142
Impairment 157 100 257 (257) -
At 26 December 2021 24,734 8,316 33,050 49,570
16,520
Net book value
At 26 December 2021 12,587 1,975 14,562 51,609
37,047
At 27 December 2020 13,342 2,230 15,572 39,811 55,383
During the 52 weeks ended 26 December 2021, the Group recognised an impairment
charge of £nil (2020: £7.8m) due to impairment of ROU assets £0.26m (2020:
£10.0m) and release on fixed assets £0.26m (2020: £2.2m). The impairment
movement is due to the reassessment by each individual CGU following a change
in performance and/or change in assets. The impairment calculation is
sensitive to changes in the assumptions and estimates used. For example a 1%
decrease in the discount rate would result in a release of the net impairment
by £1.2m, an increase of 1% would result in an impairment charge of £1.2m
and a 1% growth rate would result in a release of the impairment charge by
£0.5m.
The total carrying value of the CGUs that have been impaired in the period is
£15.4m (2020: £21.8m). These have been impaired to their value in use of
£9.2m (£2020: £10.9m). The total carrying value of the CGUs that have been
released in the period is £11.3m (2020: £nil).
The key judgements and estimates in the inputs in calculating the impairments
are outlined in note 2(d).
Assets held for sale accounted for a carrying value of £nil (2020 - £nil).
Company
The Company holds no property, plant and equipment.
14 Leases
26 December 2021 27 December 2020
£'000 £'000
Current
Lease liabilities 2,024 2,904
2,024 2,904
Non-current
Lease liabilities 50,157 52,219
50,157 52,219
52,181 55,123
Due within one year 2,024 2,904
Due two to five years 12,371 11,908
Due over five years 37,786 40,311
52,181 55,123
Lease liabilities are measured at present value of the remaining lease
payments discounted using the Group's incremental borrowing rate of 4.5%
associated with the lease plus the Bank of England base rate of 0.1% (2020:
4.6%). The lease liabilities as at 26 December 2021 were £52.1m (2020:
£55.1m).
In the period to 27 December 2020, right-of-use assets were measured on
transition at an amount equal to the minimum lease liability at the date of
initial application and adjusted for an onerous lease provision of £2.8m and
a lease incentive of £1.3m. In addition, £0.6m was reclassified from
prepaid operating lease to ROU.
15 Investments
£'000
Company
At 29 December 2019 3,170
Share based payment in respect of subsidiary 44
At 27 December 2020 3,214
Share based payment in respect of subsidiary 120
At 26 December 2021 3,334
The Company's investments are wholly related to a 100% ordinary shareholding
in Took Us a Long Time Limited (2020 - 100% holding), a company registered in
England and Wales with registered offices at 32 Charlotte Street, London. Took
Us a Long Time Limited is primarily engaged with the operation of restaurants.
16 Inventories
26 December 2021 27 December 2020
£'000 £'000
Raw materials and consumables 855 591
Smallware inventories 1,248 1,231
2,103 1,822
In the Directors' opinion there is no material difference between the
replacement cost of inventories and the amounts stated above. Raw material and
consumable inventory purchased and recognised as an expense in the period was
£8.6m (2020 - £6.1m).
17 Trade and other receivables
26 December 2021 27 December 2020
£'000 £'000
Trade receivables 211 245
Prepayments and other receivables 1,249 1,247
Total trade and other receivables 1,460 1,492
Less non-current portion (Deposits) (105) (129)
1,355 1,363
Company
Amounts due from subsidiary 3,836 3,978
Total trade and other receivables 3,836 3,978
Classified as non-current 3,836 3,978
There has been an increase in the credit risk of this loan since it was
advanced due to the deterioration in the market and the resulting impact on
the performance of the trading company. The Company has previously made loans
to the trading subsidiary of £28.2m (2020 - £28.4m).
The Directors of the Company consider this loan to be classed as Stage 2 under
the General Approach set out in IFRS 9. The Company has made provisions of
£24.4m (2020 - £24.4m) which represents the lifetime expected credit losses.
In assessing the lifetime expected credit losses consideration has been given
to a number of factors including internal forecasts of EBITDA, cashflow and
the consolidated net asset value of the Group at the balance sheet date.
18 Trade and other payables
26 December 2021 27 December 2020
£'000 £'000
Trade payables 3,952 3,865
Taxations and social security 1,506 3,154
Accruals and deferred income 3,314 2,451
Other payables 1,801 1,227
Total trade and other payables 10,573 10,697
Less non-current portion (Deposits) (80) (80)
10,493 10,617
Included within trade payables are £0.01m (2020 - £0.20m) due to related
parties (note 28).
19 Provisions
26 December 2021 27 December 2020
£'000 £'000
At 29 December 2019 2,783
IFRS 16 adjustment - (2,783)
At 27 December 2020 335 -
Dilapidations provision utilisation in the period (38) -
Dilapidations provision charge in the period - 335
At 26 December 2021 297 335
On transition to IFRS 16, the right-of-use assets was adjusted for an onerous
provision of £2.7m. This provision had been made against sites where
projected future trading income was insufficient to cover the unavoidable
costs under the lease. The provision was based on the expected cash out flows
of these sites and the associated costs of exiting these leases and the time
expected to sell.
In the period to 26 December 2021, the Group has recognised a provision of
£0.3m for dilapidations for a number of sites, where the need to carry out
the work has been identified but a full survey and commission has not been
undertaken and therefore management has applied their judgment in determining
the provision.
20 Deferred tax
26 December 2021 27 December 2020
£'000 £'000
At the beginning of the period - -
Profit and loss credit/(charge) - -
- -
Accelerated capital allowances - -
Tax losses carried forward - -
At the end of the period - -
Due to the uncertainty of future profits, a deferred tax asset of £4.5m (2020
- £3.4m) is not recognised in these financial statements.
21 Borrowings
26 December 2021 27 December 2020
£'000 £'000
Current
Secured bank borrowings 313 -
313 -
Non-current
Secured bank borrowings 937 -
937 -
1,250 -
The bank loan attracts interest at a margin of 4.5% over the Bank of England
base rate and repayable in 12 instalments with a final repayment on 15 January
2024.
Maturity of secured bank borrowings
Due within one year 369 -
Due In more than one year but less than two years 455 -
Due In more than two years but less than five years 542 -
1,366 -
Future interest payments (116) -
1,250 -
The bank borrowings are secured by legal charges over assets of the group's
subsidiary Took Us A Long Time Limited, and Tasty Plc, as an individual
company, has provided a cross guarantee and debenture in favour of the lender.
22 Share capital
Number Number Number £'000
Ordinary Ordinary B Deferred
Called up and fully paid:
Ordinary shares at 0.1 pence 59,795,496 - - 60
Deferred shares at 9.9 pence (as a result of sub-division - 59,795,496 5,920
-
Ordinary shares issued at 0.1 pence 81,294,262 - - 81
At 27 December 2020 141,089,758 - 59,795,496 6,061
Ordinary B shares at 0.00001 pence - 15,676,640 - 0
At 26 December 2021 141,089,758 15,676,640 59,795,496 6,061
Share Capital Reorganisation, placing and open offer
On 1 May 2019 the Group sub-divided each existing ordinary share into one
ordinary share of 0.1 pence each and one deferred share of 9.9 pence each.
Following this, the Group issued 81,294,262 Ordinary Shares through a placing
and open offer at 4 pence, each at nominal value of 0.1 pence.
In January 2021 Daniel Jonathan Plant was awarded 15,676,640 'B' shares in
Tasty plc which can be converted to 'A' shares subject to achievement of
hurdle rates.
23 Reserves
Share capital comprises of the nominal value of the issued shares.
Share premium reserve is the amount subscribed in excess of the nominal value
of shares net of issue costs.
Cumulative gains and losses recognised in the income statement are shown in
the Retained deficit reserves, together with other items taken direct to
equity.
The merger reserve arose in 2006 on the creation of the Group.
24 Leases
Operating leases where the Group is the lessor
The total future value of minimum operating lease receipts are shown below.
The receipts are from sub-tenants on contractual sub-leases.
26 December 2021 27 December
2020
£'000 £'000
Within one year: receipts 290 253
Within two to five years: receipts 1,158 1,158
Over five years: receipts 1,845 2,135
3,293 3,546
25 Pensions
The Group made contributions of £6,000 (2020 - £5,000) to the personal
pension plan of the Directors. During the year the Group made contributions to
employee pensions of £0.2m (2020 - £0.2m). As at 26 December 2021,
contributions of £99,000 due in respect of the current reporting period had
not been paid over to the schemes (2020 - £99,000).
26 Share based payments
Weighted average exercise price Number
(pence) '000
At 29 December 2019 39.5 6,925
Lapsed 4.4
(745)
Cancelled 105.0 (2,400)
At 27 December 2020 4.1 3,780
Lapsed 4.4 (515)
Cancelled - -
Issued 0.0 15,677
At 26 December 2021 0.7 18,942
The exercise price of options outstanding at the end of the period ranged
between 0p and 4p (2020 - 3p and 4p) and their weighted average remaining
contractual life was 3.9 years (2020 - 9 years).
Of the total number of options outstanding at the end of period none (2020 -
none) had vested and were exercisable at the end of the period.
The market price of the Company's ordinary shares as at 26 December 2021 was
4.9p and the range during the financial year was from 2.9p to 7.9p (as at 27
December 2020 was 3.3p and the range during the financial year was from 1.3p
to 4.5p).
No option was exercised in 2021 (2020 £nil) and 15.7m shares granted in 2021
(2020 - nil).
On 29 July 2019 options of 3.5m were granted at a grant price of 4.4p
reflecting the opening share price. The options vest over three years and
expire in 10 years and no other conditions are attached. A charge of
£61,000 will be recognised over the three years based on a volatility of
63.5% and risk rate of 0.5% using the Binomial method. The volatility is
weighted on a four year basis and the risk free rate is based on risk free
rate on the mid point between the vesting date and expiry.
On 17 October 2019 options of 1m were granted at a grant price of 3.3p
reflecting the opening share price. The options vest over three years and
expire in 10 years and no other conditions are attached. A charge of
£12,000 will be recognised over the three years based on a volatility of
61.6% and risk rate of 0.5% using the Binomial method. The volatility is
weighted on a four year basis and the risk free rate is based on risk free
rate on the mid point between the vesting date and expiry.
In January 2021 Daniel Jonathan Plant was awarded 15,676,640 'B' shares in
Tasty plc which can be converted to 'A' shares subject to achievement of
certain hurdle rates. These 'B' shares were issued at nominal value of 0.00001
pence. The first hurdle has been achieved and 5,225,547 can be converted to
'A' shares from the first anniversary date. A charge of £181,000 will be
recognised over the four years based on a volatility of 85% and risk rate of
-0.05% using the Monte Carlo method. The volatility is weighted on a four
year basis and the risk free rate is based on yield on a 4-year zero coupon
government security at the grant date.
The 18.9m shares outstanding as at 26 December 2021 comprise of the options
issued in July 2019, October 2019 and January 2021. There are no other
outstanding options.
27 Financial instruments
In common with all other businesses, the Group is exposed to risks that arise
from its use of financial instruments. This note describes the Group's
objectives, policies and processes for managing those risks and the methods
used to measure them. Further quantitative information in respect of these
risks is presented throughout these financial statements.
The Group is exposed through its operations to the following financial risks:
· Credit risk
· Interest rate risk
· Liquidity risk
The Group does not have any material exposure to currency risk or other market
price risk.
There have been no substantive changes in the Group's exposure to financial
instrument risks, its objectives, policies and processes for managing those
risks or the methods used to measure them from previous periods unless
otherwise stated in this note.
Principal financial instruments
The principal financial instruments used by the Group, from which financial
instrument risk arises, are as follows:
· loans and borrowings
· trade receivables
· cash and cash equivalents
· trade and other payables
The Group's financial instruments apart from cash and cash equivalents are
measured on an amortised cost basis. Due to the short-term nature of trade
receivables and trade/ other payables, the carrying value approximates their
fair value.
Financial assets 26 December 2021 27 December
2020
£'000 £'000
Cash and cash equivalents 11,005 8,028
Trade and other receivables 316 374
Total financial assets 11,321 8,402
Financial liabilities (amortised cost)
Trade and other payables 5,753 5,091
Loans and borrowings 1,250 -
Finance leases 52,181 55,123
Total financial liabilities 59,184 60,214
Company - Financial assets (amortised cost) 26 December 2021 27 December
2020
£'000 £'000
Intercompany loan 3,836 3,978
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group's risk
management objectives and policies.
The overall objective of the Board is to set policies that seek to reduce risk
as far as possible without unduly affecting the Group's competitiveness and
flexibility. Further details regarding these policies are set out below:
Credit risk
The Group's assets and liabilities are wholly attributable to one operating
segment (operating restaurants) and arises solely in one geographical segment
(United Kingdom).
Credit risk is the risk of the financial loss to the Group if a customer or a
counterparty to a financial instrument fails to meet its contractual
obligations. The Group is mainly exposed to credit risk from rebates from
suppliers, sub-letting income and trade receivables.
Trade and other receivables are disclosed in note 17 and represent the maximum
credit exposure for the Group.
The following table sets out the ageing of trade receivables:
26 December 2021 27 December
2020
Ageing of receivables £'000 £'000
<30 days 60 58
31-60 days 15 (7)
61-120 days 33 83
>120 days 194 111
Provision for doubtful debt (91) -
211 245
The Group's principal financial assets are cash and trade receivables. There
is minimal credit risk associated with the Group's cash balances. Cash
balances are all held with recognised financial institutions. Trade
receivables arise in respect of rebates from a major supplier and therefore
they are largely offset by trade payables. As such the net amounts receivable
form an insignificant part of the Group's business model and therefore the
credit risk associated with them is also insignificant to the Group as a
whole.
The Company's principal financial assets are intercompany receivables. These
balances arise due to the funds flow from the listed Company to the trading
subsidiary and are repayable on demand. The credit risk arising from these
assets are linked to the underlying trading performance of the trading
subsidiary. See note 17 for further details on intercompany debt.
Liquidity risk
Liquidity risk arises from the Group's management of working capital. It is
the risk that the Group will encounter difficulty in meeting its financial
obligations as they fall due. The Group's policy is to ensure that it will
always have sufficient cash to allow it to meet its liabilities when they
become due. To achieve this aim, the Group seeks to maintain cash balances to
meet its expected cash requirements as determined by regular cash flow
forecasts prepared by management.
The following table sets out the contractual maturities (representing
undiscounted contractual cash-flows) of financial liabilities:
Up to 3 months Between 3 and 12 months Between 1 and 2 years Between 2 and 5 years Over 5 years
£'000 £'000 £'000 £'000 £'000
Trade & other payables 5,673 24 - - 56
Loan and other borrowings 134 235 455 542 -
Finance leases 760 1,263 2,976 9,395 37,787
As at 26 December 2021 6,567 1,522 3,431 9,937 37,843
Up to 3 months Between 3 and 12 months Between 1 and 2 years Between 2 and 5 years Over 5 years
£'000 £'000 £'000 £'000 £'000
Trade & other payables 5,012 - 24 - 56
Loan and other borrowings - - - - -
Finance leases 689 2,215 2,952 8,955 40,312
As at 27 December 2020 5,701 2,215 2,976 8,955 40,368
Non-current other payables are sub-let site rent deposits.
Interest rate risk
The Group seeks to minimise interest costs by regularly reviewing cash
balances.
Interest rate risk arises from the Group's use of interest bearing loans
linked to LIBOR. The Group is exposed to cash flow interest rate risk from
long term borrowings at variable rate. The Board considers the exposure to the
interest rate risk to be acceptable.
Surplus funds are invested in interest bearing, instant access bank accounts.
Loans and borrowings
During the year the Group had a loan facility with Barclays Bank Plc.
Capital disclosures
The Group's capital is made up of ordinary share capital, deferred share
capital, share premium, merger reserve and retained deficit totalling £1.9m
(2020 - £0.6m).
The Group's objective when maintaining capital is to safeguard the entity's
ability to continue as a going concern, so that it can continue to provide
returns for shareholders and benefits for other stakeholders.
The Group manages its capital structure and makes adjustments to it in the
light of strategic plans. In order to maintain or adjust the capital
structure, the Group may adjust the amount of dividends paid to shareholders,
return capital to shareholders or issue new shares.
28 Related party transactions
The Directors are considered to be the key management personnel. Details of
directors' remuneration are shown in Note 8.
The Group pays fees, rent and associated insurance to a number of companies
considered related parties by virtue of the interests held by the Directors in
such companies. The Group also reimburses expenses incurred by such companies
on behalf of the Group.
52 weeks ended 26 December 2021 52 weeks ended 27 December 2020
£'000 £'000
Rent, insurance and legal services charged to the group:
- Kropifko Properties Ltd (32) (78)
- KLP Partnership (28) (72)
- ECH Properties Ltd (25) (52)
- Proper Proper T Ltd (33) (80)
- Super Hero Properties - (68)
- Benja Properties Ltd - (76)
- Howard Kennedy LLP - (10)
Balance due to related parties: 11 198
The rent paid to related parties is considered to be a reasonable reflection
of the market rate for the properties.
29 Reconciliation of profit / (loss) before tax to net cash inflow from
operating activities
52 weeks ended 26 December 2021 52 weeks ended 27 December 2020
£'000 £'000
Group
Profit\ (loss) before tax 1,185 (12,561)
Finance income - (4)
Finance expense 59 34
Finance expense (IFRS 16) 2,438 2,514
Share based payment charge 120 44
Share issue costs - (68)
Depreciation of right-of-use assets (IFRS16) 3,142 3,592
Depreciation of property plant and equipment 1,297 1,342
Impairment of goodwill - 326
Impairment of property, plant and equipment - (2,255)
Impairment of Right-of-use assets - 10,043
Profit from sale of property plant and equipment (3) (1,184)
Amortisation of intangible assets 3 3
Dilapidations provision charge - 335
Dilapidations provision utilisation (38) -
Other non cash - 1
Decrease / (increase) in inventories (282) 827
Decrease / (increase) in trade and other receivables (59) 1,852
(Decrease)/ Increase in trade and other payables (36) 2,734
7,826 7,575
52 weeks ended 26 December 2021 52 weeks ended 27 December 2020
£'000 £'000
Company
Loss before tax (145) (3,254)
Decrease in trade and other receivables
142 3,322
(3) 68
30 Reconciliation of financing activity
Lease liabilities Lease liabilities Bank Loan Bank Loan Total
Due within 1 year Due after 1 year Due within 1 year Due after 1 year
£'000 £'000 £'000 £'000 £'000
Net debt as at 29 December 2019 - - 800 852 1,652
IFRS 16 transitional adjustment 1,647 55,761 - - 57,408
Net debt as at 30 December 2019 1,647 55,761 800 852 59,060
Cashflow (1,735) - (800) (852) (3,387)
Addition / (decrease) to lease liability
2,992 (3,542) - - (550)
Net debt as at 27 December 2020 2,904 52,219 - - 55,123
Cashflow (3,064) - 313 937 (1,814)
Addition / (decrease) to lease liability
2,184 (2,062) - - 122
Net debt as at 26 December 2021 2,024 50,157 313 937 53,431
31 Post Balance Sheet Events
There are none to report.
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