REG - Tasty PLC - Final Results
30/03/2023 07:00
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RNS Number : 6846U Tasty PLC 30 March 2023
30 March 2023
Tasty plc
("Tasty" or the "Company")
Final results for the 52 weeks ended 25 December 2022
Tasty (AIM: TAST), the owner and operator of restaurants in the casual dining
sector, announces its annual results for the 52 week period ended 25 December
2022.
Key Highlights
· Revenue £44.0m (2021: £34.9m); an increase of
26% year-on-year
· Adjusted EBITDA(1) (post IFRS 16) of £2.6m
(2021: £8.0m)
· Loss after tax for the period of £6.4m (post IFRS 16) (2021: £1.2m
profit)
· Group repaid and cancelled its unutilised Barclays Bank facility of
£1.1m and is now debt free
· Cash at bank of £7.0m as at 25 December 2022 (2021: £11.0m)
· Currently trading from 52 of 54 restaurants
· Inflationary pressure on labour, food and utilities has impacted the
business considerably but now beginning to stabilise
· Staff shortages remained a challenge in 2022 but are returning to
more normal levels
· Despite staffing and inflationary challenges, like-for-like sales
compared with pre Covid-19
levels were encouraging
(( 1 )) Adjusted for depreciation, amortisation and highlighted items
including share-based payments and impairments. Adjusted EBITDA 2021 figure
includes £1.9m of exceptional Government grant income
The report and accounts for the 52 week period ended 25 December 2022 will be
available on the Company's website at https://dimt.co.uk/investor-relations/
(https://dimt.co.uk/investor-relations/) shortly.
Certain of the information contained within this announcement is deemed by the
Company to constitute inside information as stipulated under the UK version of
the EU Market Abuse Regulation (596/2014). Upon publication of this
announcement via a regulatory information service, this information is
considered to be in the public domain.
For further information, please contact:
Tasty plc Tel: 020 7637 1166
Jonny Plant, Chief Executive
Cenkos Securities plc (Nominated adviser and broker)
Katy Birkin/George Lawson Tel: 020 7397 8900
Chairman's statement
I am pleased to be reporting on the Group's annual results for the 52 weeks
period ended 25 December 2022 and the comparative 52 weeks period ended 26
December 2021.
The Group comprises 54 restaurants: six dim t and 48 Wildwood restaurants.
It was hard to predict the challenges that we faced in 2022 would immediately
follow what had already been extraordinarily difficult years during the
pandemic. The Group delivered strong sales growth, despite the severe
impediments of transportation strikes, the World Cup, and bad weather all
coinciding with the most important trading period of the year. We have
estimated the adverse sales impact of all these factors to be in excess of
£0.65m. As reported in our Interim Results, the energy crisis and
unprecedented inflationary costs suppressed the results further, significantly
increasing our running costs.
We reopened two Wildwood restaurants which were closed during the pandemic,
and we are now trading from 52 restaurants out of a total estate of 54. We
also converted Wildwood Loughton into a dim t in November 2022 with results
which have exceeded expectations. Dim t has proved to be a robust brand over
the last few years due to both a rise in popularity for Asian food and also an
increased demand for takeaway and delivery of this cuisine. Given the initial
solid performance of this converted unit we are currently considering other
opportunities to rebrand within our estate. We have started a process to
sell the two restaurants that remain closed, and we will also consider the
sale or surrender of other underperforming sites.
Delivery and takeaway have remained strong throughout the year but there has
been a marginal shift towards dine-in. The sales performance for the start of
2023 has been better than initially expected, but it is still challenging. We
believe that this is partially due to customers drawing upon personal savings
built up during the pandemic and a resilience to conservative menu price
increases however, whether this resilience continues, remains to be seen in
the coming months. The Board expects the Group's profitability to continue to
be impacted by both energy costs, which remain significantly higher than
pre-pandemic levels, and also increasing food costs. The Group's expansion
plan of opening additional sites will be reviewed once inflation and the
economy have stabilised.
The Group repaid and cancelled its outstanding Barclays Bank facility of
£1.1m as it was unutilised, and it was considered prudent given the
increasing interest rate charges. Based on the Bank of England base rate at
the time of cancellation, there will be an annualised interest saving of
approximately £57,000. The Group still has a £250,000 overdraft facility.
As with previous challenges, the Group is confident it has a structure that
can navigate the current macroeconomic headwinds.
Dividend
The Board does not propose to recommend a dividend (2021: £nil).
Future Trading
Performance to date is ahead of management expectations although, at this
stage, it is difficult to predict the full extent of the cost of living crisis
and input cost inflation and shortages. When the current energy cap reduces at
the end of March 2023, with advice from our newly appointed energy brokers, we
are adopting a revised strategy to reduce our energy costs. We expect our
customers to continue to enjoy eating out and relish the social occasion at
Wildwood and dim t but we will continue to focus on managing our cost base and
increasing efficiencies within the business. We are living in very
unpredictable times, both politically and economically, and these no doubt
will continue to be factors in the performance of the Group for the coming
year.
Keith Lassman
Chairman
29 March 2023
Strategic report for the 52 weeks ended 25 December 2022
Business Review
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 46 of the 48 Wildwood branded restaurants.
dim t
Our pan-Asian restaurant now trades from six sites, serving a wide range of
dishes, including dim sum, noodles, soup and curry. This includes dim t
Loughton, which was converted from a Wildwood and re-opened in November
2022. The brand has fared particularly well over the last few years due to a
rise in its popularity and increased demand for takeaway. Given the success of
Loughton we believe there are some opportunities to grow this brand within our
existing estate.
Introduction
Recent years have been characterised by continuing uncertainty, and it has
been difficult to accurately predict the extent or duration of disruptions.
Against this turmoil, we have been reassured by the enduring demand for eating
out and our focus remains on offering a great dining experience with
significant time spent improving food quality and customer experience. Other
than December 2022, when sales were impacted negatively by the World Cup and
transportation strikes, overall sales performance of the re-opened estate has
been ahead of 2019, which has been used as a fair comparison as both 2020 and
2021 were impacted by the pandemic.
We are conscious that demand may be favourable due to the savings built up
over the pandemic and the real impact of the cost-of-living crisis may still
materialise, however year-to-date performance in 2023 has been slightly better
than expected. There has been a discernible shift from the early weekday trade
to the weekend and we have avoided aggressive discounting and promotions,
maintaining a competitive advantage through pricing and a value proposition.
We previously reported that the pandemic negatively impacted our city centre
sites due to fewer commuters, tourists and theatregoers. The London sites are
now performing better with the return of tourists and the theatre shows, and
there has also been an uplift in lunch trade as people slowly increase the
frequency that they attend the office.
Energy costs
In 2022, our energy costs rose substantially in line with many in the
hospitality industry and often resulted in four times more cost than the 2019
equivalent. When the current energy cap reduces at the end of March 2023 with
advice from our newly appointed energy brokers, we are adopting a revised
hedging strategy to reduce our energy costs. While we hope that pressures on
energy costs have peaked, we expect prices to remain higher than pre-pandemic
levels and estimate this to be at least double that of historical costs. We
are working on unit level energy efficiency improvements and selective Monday
closures to reduce costs.
Offering
We are constantly reviewing our menu and increasing the choice of options,
including lunch and light options. With our newly appointed Head of Food and
our central kitchen production we have significantly improved our food quality
and consistency which is borne out by customer survey reports. With
approximately three menu changes a year, we can adapt products to suit
availability and changing tastes and we always review ways to offer vegan and
gluten-free options. To ensure we are accessible to a broader consumer group,
we have maintained a very low entry price point for both pizza and pasta for
Wildwood and noodles for dim t - dishes which continue to be very popular with
our customers.
People
We are pleased to report that as at 25 December 2022, we employed just under
1,100 people across the business, an increase of 100 from the previous year
and a sign that the labour shortage seems to have stabilised. However,
competition is still considerable for good-quality candidates, and we remain
committed to ensuring the Group is a competitive, attractive and supportive
environment in which to work.
Whilst we welcome the removal of the temporary increase of National Insurance
of 1.25% introduced in November 2022, the increases in April 2023 of the
National Living Wage and general inflationary wage pressures will inevitably
result in higher labour costs, which will be impossible to absorb completely.
We continue to be committed to improving labour efficiency through a focus on
the trading day-parts, forecasting and scheduling.
A new recruitment system has been rolled out across the Group which will
improve candidate selection and retention. We have undertaken a comprehensive
review of our employee training and engagement which will both produce a
better customer experience and also improve employee satisfaction and
development. The full implementation of this project is expected to be
completed in early Q2 2023.
We have strengthened our management structure and senior teams across all
areas with particular investment in food, marketing and the learning and
development team.
Suppliers
With the energy crisis impacting the whole economy we have seen inflationary
increases across the board from food costs through to third party service
providers. Thankfully, supply has been more consistent, although there have
been some unplanned disruptions which have affected our major supply lines.
However, Covid-19 taught us how to be agile and resourceful and we have
suffered very little outages during the difficult periods.
Property
The Group has successfully regeared one lease and will continue to review
current lease terms and also consider disposing of poorer performing sites.
There are a few leases with termination provisions effective this year, which
will allow us to either renegotiate terms or surrender the lease. The Group
will consider expansion once the economy and energy market stabilise.
Unfortunately, we expect some businesses will struggle to survive with their
current estate, and there will be many opportunities to acquire good sites.
There are some rolling restaurant refresh programmes which are ongoing but
expansion and major refurbishments will not be considered until the second
half of the year.
Board Changes
As previously announced, Mayuri Vachhani will be stepping down from her
position as Chief Finance Officer and leave the Group on 31 March 2023, to
pursue other opportunities. The Board would once again like to thank Mayuri
for her hard work and the contribution she has made to the business over the
last five years.
Wendy Dixon was appointed as an independent Non-executive Director in June
2022. She also holds the role of Chief Growth Officer for M&C Saatchi
Group, and we are delighted to have her on our Board. In addition, Harald
Samúelsson, who joined the Board in May 2021, is permanently relocating to
Spain from 1 April 2023 and will revert to his previous position as an
independent non-executive Director. Harald Samúelsson has over 20 years of
experience in the UK restaurant industry.
Current trading and outlook for the coming year
Performance to date is ahead of management expectations, although at this
stage, it is difficult to predict the full extent of the cost of living crisis
and input cost inflation and shortages given the level of uncertainty that
still exists in the industry and economy in general. We expect our customers
to continue to show their loyalty towards our brands and we believe that our
new marketing initiatives and websites will help grow a wider customer base.
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 each of 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
25 December 25 December 26 December
2022 2022 2021
£'000 £'000 £'000
Non-financial
Sites at year end 54 54 54
Open sites 52 52 50
Sales 44,027 44,027 34,909
EBITDA before highlighted items
2,621 (2,633) 7,991
Depreciation of PP&E and amortisation
(1,667) (1,726) (1,300)
Depreciation of right-of-use assets (IFRS 16)
(2,641) - (2,579)
Operating (loss)/profit before highlighted items
(1,687) (4,359) 4,112
Sales were up 26% on the corresponding period which was impacted by restricted
trading to £44.0m (2021: £34.9m) and EBITDA was £2.6m (2021: £8.0m). The
EBITDA loss before highlighted items and IFRS 16 adjustments was £2.6m (2021:
£3.9m profit).
Operating loss before highlighted items (see Note 5) was £1.7m (pre-IFRS 16
equivalent: £4.4m loss, 2021: £4.1m profit).
The impact of the implementation of IFRS 16 "Leases" from 2020 has resulted in
both depreciation on Right-of-use ("ROU") assets for leases and also the
interest charge on lease liabilities being greater than the charge for rent
that would have been reported pre-IFRS 16; the net impact on the reported loss
for 2022 is £0.3m (2021: £0.9m). We have reviewed the impairment provision
across the ROU assets and fixed assets and have made a net provision of £2.3m
(2021: £0.6m).
After considering all of the non-trade adjustments, the Group reports a loss
after tax for the period of £6.4m (2021: £1.2m profit after tax). Net cash
inflow for the period before financing was £2.8m (2021: £7.3m inflow) and is
driven by a net cash inflow from operating activities of £4.4m (2021:
£7.8m).
As at 25 December 2022, the Group had an outstanding bank loan of £nil (2021:
£1.25m) after repaying the Barclays Bank facility in full in June 2022. Cash
at bank at the end of the period was £7.0m (2021: £11.0m). Net cash after
outstanding bank loan at the balance sheet date was £7.0m (2021 - net cash
£9.8m). Capital investment increased to £1.6m (2021: £0.5m).
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 While the impact of Covid-19 does not appear to be impacting day to day
business we continue to be vigilant and will follow guidelines where
New strain of Covid-19 impacting staff, restaurants and supply. relevant.
Management became adept at managing cost and revenue through lockdowns and
restrictions and are flexible at localised closures due to Covid-19 outbreaks
and/or shortages of staff.
Outbreak protocols have been established for staff, restaurants, and suppliers
and will be implemented where necessary.
Cashflow and liquidity Cash preservation has been a key focus over the last few years. The Group
monitors cash balances and prepares regular forecasts which are reviewed by
The impact of cost-of-living crisis and other trading conditions on cashflow the Board. These forecasts include our best estimates and judgements based
and liquidity on currently available information and the current environment. In addition,
management will apply sensitivities to assess the impact of actual results or
events impacting on future cash flows.
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 remained unutilised and was repaid in full in June 2022. The Group also
has an unutilised £250,000 overdraft facility.
Utilities and Cost of Living Crisis The biggest challenge faced by the Group, and many other businesses, is the
increase in utility prices. We have endeavoured to reduce usage by focusing
on consumption and efficiency; however, this does not offset the increases
over the last 12 months. We will work with our energy broker to fix contracts
as appropriate and have recently agreed new gas and electricity contracts.
The impact of this and the cost-of-living crisis will impact the economy and
while we have reviewed our menu prices to counteract the impact of some
inflationary pressures, we have maintained our entry level of pizza and pasta
at Wildwood and noodles at dim t.
Market Conditions and "Brexit" Brexit has impacted food and drink primarily in the form of cost inflation and
shortages of certain products.
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 re-tender
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, staying committed to quality and the overall
The casual dining market faces new competition on a regular basis. customer 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 a competitive process, onboarding training programmes and career development. New HR and
labour market. 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.
The Group regularly reviews the 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. In the event of a failure by a key
supplier we have contingency plans in place to minimise disruption and where
A major failure of a 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
29 March 2023
Report of the directors for the 52 weeks ended 25 December 2022
The Directors present their report together with the audited financial
statements for the 52 week period ended 25 December 2022 (comparative period
52 weeks to 26 December 2021).
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 (such as employees and customers) 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 the 2022 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
· Recycling where possible
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 loss for the period.
The Directors do not recommend the payment of a dividend (2021 - £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 *
Harald Samúelsson
Non-Executive
Keith Lassman
Wendy Dixon (appointed 22 June 2022)
*Mayuri Vachhani is stepping down from the Board and leaving the Company on 31
March 2023
Directors' interest in shares
As at 25 December 2022 As at 26 December 2021
Director Ordinary shares of 0.1p each Ordinary shares of 0.1p each %
%
Daniel Jonathan Plant 12,317,448 8.4% 7,091,902 5.0%
Samuel Kaye (resigned 14 May 2021) 20,882,197 14.3% 20,882,197 14.8%
Keith Lassman 1,421,983 1.0% 1,421,983 1.0%
Mayuri Vachhani - - - -
Harald Samúelsson - - - -
Wendy Dixon - - - -
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 Date Expiry date
Number Exercise price Vesting period
Daniel Jonathan Plant
'B' shares issued 15,676,640 £0.00 15/1/2021 1,2 4 years
15/1/2026
Conversion to ordinary shares (5,225,546) £0.00 27/06/2022
'B' shares balance 10,451,094 £0.00 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 'A' shares subject to achievement
of hurdle rates relating to the Company's share price. Following achievement
of the first hurdle on 27 June 2022, 5,225,546 'B' shares converted to
ordinary shares.
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
Our recycling has dropped to an average of 35% (2021: 45%) due to producing
less glass waste at points which made up the majority of our recycling weight
previously. This was in part due to the bottle shortage and the period where
we used canned drinks (weighing a lot less) and partly by moving more branches
to draft beer. Our refuse provider has confirmed that none of our waste goes
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 biogas to ensure
that none is wasted. A percentage of this is added to regular petrol and
diesel reducing the carbon from burning 100% petrol or diesel. In the last 12
months we had 76 tonnes of used cooking oil collected and turned into bio
diesel/gas, which saved 176 tonnes of carbon being released into the
atmosphere. This equates to an average of 150 family cars worth of CO(2) being
removed from the atmosphere on a monthly basis.
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 are 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 52-week period
ended 25 December 2022:
tCO2e tCO2e
52 weeks ended 52 weeks ended
25 December 2022 26 December 2021
Scope 1 - Natural Gas 987 1,061
Scope 2 - Electricity 1,461 1,431
Scope 3 - Grey Fleet Mileage 165 83
Total 2,613 2,575
An energy intensity ratio of 0.134 (2021: 0.142) has been measured using the
metric of tonnes CO(2)e per m(2) floor area ("tCO(2)e").
The Group's total energy consumption for the 52-week period ended 25 December
2022 was 13,638,208 kWh (2021:12,872,041 kWh) the increase reflecting a
greater number of our sites trading in 2022, with no Covid-19 related
restrictions.
Donations
The Group made no charitable or political donations in the period (2021:
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 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 the current
environment. Judgement is particularly required as to the impact on trade of
cost-of-living crisis and inflation.
Given the ability of the Group to manage costs, cash position and the
unutilised overdraft, the Directors believe that it remains appropriate to
prepare the financial statements on a going concern basis. The going concern
basis of accounting has, therefore, been adopted in preparing the financial
statements.
Disclosure of information to auditors
Each of the persons who are directors at the time when this Directors' Report
is approved confirm that:
· so far as he/she is aware there is no relevant audit information of
which the Company's auditor is unaware and
· that he/she has taken all the steps that he/she ought to have taken
as a director to make himself/herself aware of any relevant audit information
and to establish that the Company's auditor is aware of that information.
Auditors
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
29 March 2023
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 United Kingdom. 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 United Kingdom, subject to any material departures disclosed
and explained in the financial statements; and
· 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 25 December 2022
Note 52 weeks ended 25 December 2022 Restated
52 weeks ended 26 December 2021
£'000 £'000
Revenue 3 44,027 34,909
Cost of sales (44,123) (33,567)
Gross (loss)/ profit (96) 1,342
Other income 3 414 4,208
Operating expenses (4,370) (1,902)
Operating (loss)/ profit before highlighted items (1,687) 4,112
Highlighted items 5 (2,365) (464)
Operating (loss)/ profit 4 (4,052) 3,648
Finance income 6 41 -
Finance expense 6 (2,421) (2,497)
(Loss)/ profit before income tax (6,432) 1,151
Income tax 9 - -
(Loss)/ profit and total comprehensive (loss)/ income for the period (6,432) 1,151
Earnings per share for (loss)/ profit attributable to the ordinary equity
holders of the company
Basic earnings per share 10 (4.40p) 0.82p
Diluted earnings per share 10 (4.03p) 0.72p
The notes below form part of these financial statements.
Consolidated statement of changes in equity
for the 52 weeks ended 25 December 2022
Share capital Share premium Merger reserve Retained earnings Total
£'000 £'000 £'000 £'000 £'000
Balance at 27 December 2020 (as previously stated) 6,061 24,251 992 (30,708) 596
Prior year adjustment (See Note 13) - - - 2,456 2,456
Balance at 27 December 2020 (restated) 6,061 24,251 992 (28,252) 3,052
Cost of placing of ordinary shares - 3 - - 3
Total comprehensive loss for the period (as restated - See Note 13) - - - 1,151 1,151
Transactions with owners in their capacity as owners:
Share based payments - - - 120 120
Balance at 26 December 2021 (restated) 6,061 24,254 992 (26,981) 4,326
Total comprehensive income for the period - - - (6,432) (6,432)
Transactions with owners in their capacity as owners:
Share based payments - - - 58 58
Balance at 25 December 2022 6,061 24,254 992 (33,355) (2,048)
The notes below form part of these financial statements.
Company statement of changes in equity
for the 52 weeks ended 25 December 2022
Share capital Share premium Retained profit Total
£'000 £'000 £'000 £'000
Balance at 27 December 2020 6,061 24,251 (23,120) 7,192
Cost of placing of ordinary shares - 3 - 3
Total comprehensive loss for the period - - (145) (145)
Transactions with owners in their capacity as owners:
Share based payments - - 120 120
Balance at 26 December 2021 6,061 24,254 (23,145) 7,170
Issue of ordinary shares - - - -
Total comprehensive loss for the period - - (674) (674)
Transactions with owners in their capacity as owners:
Share based payments - - 58 58
Balance at 25 December 2022 6,061 24,254 (23,761) 6,554
The notes below form part of these financial statements.
Consolidated balance sheet
At 25 December 2022
Restated
25 December 2022 26 December 2021
Note £'000 £'000
Non-current assets
Intangible assets 12 25 28
Property, plant and equipment 13 17,694 18,026
Right-of-use assets 13 32,513 36,005
Other non-current assets 17 65 105
50,297 54,164
Current assets
Inventories 16 2,191 2,103
Trade and other receivables 17 1,633 1,355
Cash and cash equivalents 7,002 11,005
10,826 14,463
Total assets 61,123 68,627
Current liabilities
Trade and other payables 18 (12,393) (10,493)
Lease liabilities 14 (1,953) (2,024)
Borrowings 21 - (313)
(14,346) (12,830)
Non-current liabilities
Provisions 19 (339) (297)
Lease liabilities 14 (48,358) (50,157)
Long-term borrowings 21 - (937)
Other Payables 18 (128) (80)
(48,825) (51,471)
Total liabilities (63,171) (64,301)
Total net (liabilities)/ assets (2,048) 4,326
Equity
Share capital 22 6,061 6,061
Share premium 23 24,254 24,254
Merger reserve 23 992 992
Retained deficit 23 (33,355) (26,981)
Total equity (2,048) 4,326
The financial statements were approved by the Board of Directors of the
Company and authorised for issue on 29 March 2023 and signed on their behalf
by Daniel Jonathan Plant.
The notes below form part of these financial statements.
Company balance sheet
At 25 December 2022
Company number: 5826464
25 December 2022 26 December 2021
Note
£'000 £'000
Non-current assets
Investments 15 3,392 3,334
Other non-current assets 17 3,162 3,836
Total net assets 6,554 7,170
Equity
Share capital 22 6,061 6,061
Share premium 23 24,254 24,254
Retained deficit 23 (23,761) (23,145)
Total equity 6,554 7,170
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 £0.7m (2021 - loss of £0.14m) 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 29 March 2023 and signed on their behalf
by Daniel Jonathan Plant.
The notes below form part of these financial statements.
Consolidated statement of cash flows
For the 52 weeks ended 25 December 2022
52 weeks ended 25 December 2022 52 weeks ended 26 December 2021
Note
£'000 £'000
Operating activities
Cash generated from operations 29 4,444 7,826
Net cash inflow from operating activities 4,444 7,826
Investing activities
Proceeds from sale of property, plant and equipment
- 3
Purchase of property, plant and equipment 13 (1,645) (544)
Interest received 41 -
Net cash inflow from investing activities (1,604) (541)
Financing activities
Net proceeds from issues of ordinary shares - 3
Bank loan receipt 30 - 1,250
Bank loan repayment 30 (1,250) -
Finance expense 6 (2,421) (2,497)
Principal paid on lease liabilities 30 (3,172) (3,064)
Net cash used in from financing activities (6,843)
(4,308)
Net increase in cash and cash equivalents (4,003) 2,977
Cash and cash equivalents brought forward 11,005 8,028
Cash and cash equivalents as at the end of the period 7,002 11,005
The notes below form part of these financial statements.
Company statement of cash flows
For the 52 weeks ended 25 December 2022
52 weeks ended 25 December 2022 52 weeks ended 26 December 2021
Note
£'000 £'000
Operating activities
Cash generated from operations - (3)
Net cash outflow from operating activities - (3)
Financing activities
Net proceeds from issues of ordinary shares - 3
Net cash flows used in financing activities - 3
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.
Notes
forming part of the financial statements for the 52 weeks ended 25 December
2022
1 Accounting policies
Tasty plc ("Tasty") is a publicly listed company incorporated and domiciled in
England and Wales. The Company's ordinary shares are quoted on AIM. Tasty's
registered address is 32 Charlotte Street, London, WC1T 2NQ. The Group's
principal activity is the operation of restaurants.
(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 25 December 2022, with
a comparative period of the 52-week period ended 26 December 2021. 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 25 December 2022, the Group had net liabilities of £2.0m (2021: net
assets of £4.3m). 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.
· Bank debt when required - The Group repaid and cancelled the
outstanding Barclays Bank facility of £1.1m as it was unutilised, and it was
considered prudent given the increasing interest rate charges. Based on the
base rate at the time, there will be an annualised interest saving of
approximately £57,000 which would be considerably more at today's rate.
However, the Group has a modest £250,000 overdraft facility.
The pandemic led to high uncertainty and disruption in the economy and
hospitality industry; the energy and cost-of-living crisis followed this.
Throughout this period costs were controlled carefully, and cash outflows
reduced. Over the last 12 months we have seen inflationary increases
directly due to utility increases and shortages caused by the war in
Ukraine. These increases appear to have stabilised.
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 cost-of-living
crisis and inflation.
Given the ability of the Group to manage costs, cash position and the
availability of the unutilised overdraft 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
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.
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 £41m at 25 December 2022 (£43m at 26 December 2021). 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 25 December 2022 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 52 weeks ended 25 December
2022 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 2022. 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 are not expected to have any significant impact on
the Group.
(f) Basis of consolidation
The consolidated financial statements consolidate the results of the Company
and its subsidiary, Took Us A Long Time Limited. The accounting period of the
subsidiary is coterminous with that of the Company.
The accounting policies of the subsidiary are consistent with those of the
Group. Inter-company transactions, balances and unrealised gains on
transactions between group companies are eliminated.
(g) Revenue
The Group's revenue is derived from goods and services provided to the
customers from dine-in, delivery and takeaway. Revenue is recognised at the
point in time when control of the goods has transferred or service provided 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 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 received Government grants in 2021 under the Coronavirus Job
Retention Scheme ("CJRS") and "Retail and Hospitality Business Grants" schemes
provided by the Government in response to Covid-19's impact on the business.
In accordance with IAS 20, the Group recognised the salary expense and
recognised the CJRS grant income in profit and loss as the Group became
entitled to the grant. "Retail and Hospitality Business Grants" were
recognised when there was 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, principally interest charges, are recognised in the income
statement in the period in which they are incurred. Borrowings are
recognised initially at fair value, net of transaction costs incurred.
Borrowings are subsequently carried at amortised cost; any difference between
the proceeds (net of transaction costs) and the redemption value is recognised
in the income statement over the period of the borrowings using the effective
interest method.
Fees paid on the establishment of loan facilities are recognised as
transaction costs of the loan to the extent that it is probable that some or
all of the facility will be drawn down. This is also applicable to fees for
amendments to the loan facilities. In this case, the fee is deferred until the
drawdown occurs. To the extent there is no evidence that it is probable that
some or all of the facility will be drawn down, the fee is capitalised as a
pre-payment for liquidity services and amortised over the period of the
facility to which it relates.
(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
Trademarks 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
Electric Vehicle 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. There are currently no assets held for sale as at 25 December
2022.
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
The Group has recognised 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
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. 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 the company's subsidiary recognised
based on a forward-looking expected credit loss model which uses the forecast
results of the subsidiary as a key input. 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.
(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 were initially recognised at fair value and subsequently
measured at amortised cost 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 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 judgements, estimates and 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) Impairment reviews (Note 13)
In performing 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"). 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 fair values were calculated
based on cash flows discounted using a current lending rate. They are
classified as level 3 fair values in the fair value hierarchy due to the
inclusion of unobservable inputs. The cashflow projections are influenced by
factors which are inherently uncertain to forecast such as footfall and
inflation and non-controllable costs such as rates and license costs.
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 8% (2021: 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") and an allowance for risk which is used
across all CGUs due to their similar characteristics.
The cost-of-living crisis has resulted in increased uncertainty in the
performance across CGUs over the short-term future and the cashflow over the
next 12 months may not always be indicative of the future cashflows.
Historically a combination of past performance and future trading forecast is
often used as a guide in estimating future cashflow, or comparison with
similar sites. In assessing the current impairment provision there has been
a greater reliance on longer term future forecasts as short-term forecasts are
impacted by the "cost of living crisis" and inflation. The cashflow of each
CGU has been determined based on management's judgement of performance, impact
of the utility costs and expected recovery in future years and therefore each
CGU's cashflow has been selected based on an individual criterion.
Management's 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 0.75% growth rate (2021 - 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. The carrying amount of Fixed Assets and ROU assets and the
sensitivity of the carrying amounts to the assumptions and estimates are
outlined in Note 13.
(d) 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.
(e) 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.
(f) 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.
(g) 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 25 December 2022, 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 £3.0m and decrease the right-of-use
asset pre-impairment by £2.6m.
(h) 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. In arriving at the dilapidation provision for
these sites management have reviewed the leases and have used their judgement
and experience gained from years of working in hospitality and property
industry.
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.
(i) 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 the one geographical segment (United Kingdom) that the Group
is located and operates in. All the Group's revenue is recognised at a point
in time being when control of the goods has transferred to the customer.
An analysis of the Group's total revenue is as follows:
52 weeks ended 25 December 2022 52 weeks ended 26 December
2021
£'000 £'000
Sale of goods and services: dine-in 39,004 26,319
Sale of goods and services: delivery and takeaway 5,023 8,590
44,027 34,909
An analysis of the Group's other income is as follows:
52 weeks ended 25 December 2022 52 weeks ended 26 December 2021
£'000 £'000
Sub-let site rental income 362 295
Coronavirus Job Retention Scheme (CJRS) and Business Grants 3,913
-
Other 52 -
414 4,208
In the period to 26 December 2021, the Group 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. These were recognised in accordance with IAS 20 (Accounting
for Government Grants and Disclosure of Government Assistance) when the group
was entitled to, or there was reasonable assurance that the Group has met the
conditions attaching to these grants.
No such grants were available in the 52 weeks ended 25 December 2022.
4 Operating loss
52 weeks ended 25 December 2022 Restated
52 weeks ended 26 December 2021
This has been arrived at after charging £'000 £'000
Staff costs 19,240 15,257
Share based payments 58 120
Pre-opening costs 51 -
Amortisation of intangible assets 3 3
Depreciation of right-of-use assets (IFRS16) 2,641 2,579
Depreciation property, plant and equipment 1,664 1,297
Dilapidations provision charge 42 -
Dilapidations provision utilisation - (38)
Restructure and consultancy 14 7
Impairment/ (Impairment reversal) of property, plant and equipment
180 (2,346)
Impairment of right-of-use assets 2,153 2,943
Loss/(profit) on disposal of property, plant and equipment 154 (3)
Auditor remuneration:
Audit fee - Parent Company 11 10
- Group financial statements 46 45
- Subsidiary undertaking 11 10
Audit related assurance services - 3
Taxation advisory services - 2
Other advisory services 5 -
5 Highlighted items - charged to operating expenses
52 weeks ended 25 December 2022 Restated
52 weeks ended 26 December 2021
£'000 £'000
(Loss)/profit on disposal of property, plant and equipment
(154) 3
Restructure and consultancy (14) (7)
(Impairment)/Release of impairment of property, plant and equipment
(180) 2,346
Impairment of right-of-use assets (2,153) (2,943)
Share based payments (58) (120)
Pre-opening costs (51) -
Gain on lease modifications 245 257
(2,365) (464)
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.
6 Finance income and expense
52 weeks ended 25 December 2022 52 weeks ended 26 December 2021
£'000 £'000
Interest receivable 41 -
Finance income 41 -
Interest payable 30 59
Finance expense (IFRS 16) 2,391 2,438
Finance expense 2,421 2,497
7 Employees
52 weeks ended 25 December 2022 52 weeks ended 26 December 2021
Staff costs (including Directors) consist of: £'000 £'000
Wages and salaries 17,464 13,933
Social security costs 1,489 1,101
Other pension costs 287 223
Equity settled share-based payment expense 58 120
19,298 15,377
The average number of persons, including Directors, employed by the Group
during the period was 1,020 of which 998 were restaurant staff and 22 were
head-office (2021: 821 of which 805 were restaurant staff and 16 were
head-office staff).
No staff are employed by the Company (2021: no staff).
Of the total staff costs £17.8m was classified as cost of sales (2021:
£14.3m) and £1.5m as operating expenses (2021: £1.1m). Redundancy costs of
£0.014m (2021: £0.007m) have been included as a cost of Restructure and
Consultancy in Note 4.
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 25 December 2022 is as
follows:
Emoluments Bonus Share based payments Pensions Benefits Social security costs
2022 Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
J Plant 150 - 48 - - 19 217
K Lassman 40 - - - - 4 44
M Vachhani 150 - 3 6 2 19 180
Harald Samúelsson 80 - - 2 - 9 91
Wendy Dixon (appointed 22 June 2022) 18 - - -
- 1 19
Total 438 - 51 8 2 52 551
Emoluments Bonus Share based payments Pensions Benefits Social security costs
2021 Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
J Plant 135 - 101 - - 17 253
S Kaye (resigned 14 May 2021) 12 - - -
- 1 13
A Kaye (resigned 15 September 2020) - - - -
- - -
K Lassman 36 - - - - 4 40
M Vachhani 135 - 4 5 2 17 163
Harald Samúelsson (appointed 19 May 2021) 33 - - 1
- 3 37
Total 351 - 105 6 2 42 506
Company
The Company paid no director emoluments during the year (2021 - none).
9 Income tax expense
52 weeks ended 25 December 2022 52 weeks ended 26 December 2021
£'000 £'000
UK Corporation tax
Adjustment in respect to previous years - -
Total current tax - -
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 (2021 - lower
than) corporation tax in the UK. The differences are explained below:
52 weeks ended 25 December 2022 Restated
52 weeks ended 26 December 2021
£'000 £'000
(Loss)/profit before tax (6,432) 1,151
Tax on (loss)/profit at the ordinary rate of corporation
tax in UK of 19% (2021 - 19%) (1,222) 219
Effects of
Fixed assets differences 335 -
Expenses not deductible for tax 102 22
Remeasurement of deferred tax for changes in tax rates -
(1,055)
Movement in deferred tax not recognised 791 820
Adjustment in respect of previous years - -
Other movements (6) (6)
Total tax charge - -
Factors affecting future tax charges
In March 2021 it was announced the UK corporation tax rate would increase to
25% in April 2023. This plan was substantively enacted in May 2021 and the
disclosed but unrecognised deferred tax disclosed in Note 20 is calculated at
the future tax rate of 25%.
10 Earnings per share
Restated
25 December 26 December
2022 2021
Pence Pence
Basic (loss)/ profit per ordinary share (4.40p) 0.82
Diluted (loss)/ profit per ordinary share (4.03p) 0.72
2022 2021
Number '000 Number '000
(Loss)/ profit per share has been calculated using the numbers shown below:
Weighted average number of ordinary shares used as the denominator in 146,315 141,090
calculating basic earnings per share
Adjustments for calculation of diluted earnings per share:
Ordinary B shares 10,451 14,815
Options 2,975 3,265
Weighted average number of ordinary shares and potential ordinary shares used 159,741 159,170
as the denominator in calculating diluted earnings per share
2022 2021
£'000 £'000
(Loss)/ profit for the financial period (6,432) 1,151
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.
11 Dividend
No final dividend has been proposed by the Directors (2021 - £nil).
12 Intangibles
Trademarks Total
£'000 £'000
At 27 December 2020 26 26
Additions 5 5
Amortisation of trademarks (3) (3)
At 26 December 2021 28 28
Additions - -
Amortisation of trademarks (3) (3)
At 25 December 2022 25 25
13 Property, plant and equipment and right-of-use assets
Leasehold improvements Furniture and fixtures computer equipment & vehicle Total fixed assets Total
Right-of-use assets
£'000 £'000 £'000 £'000 £'000
Cost
At 27 December 2020 37,176 9,892 47,068 53,446 100,514
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
Additions 709 936 1,645 - 1,645
Lease modifications - - - 1,301 1301
Disposals (181) (334) (515) (50) (565)
At 25 December 2022 37,849 10,893 48,742 103,560
54,818
Depreciation
At 27 December 2020 (as previously stated)
23,834 7,662 31,496 13,635 45,131
Prior year adjustment (see below)
(729) (132) (861) (1,595) (2,456)
At 27 December 2020 (as restated)
23,105 7,530 30,635 12,040 42,675
Provided for the period 743 554 1,297 4,439
3,142
Impairment / (reversal of impairment) 157 100 257 -
(257)
Prior year adjustment (see below) (1,948) (655) (2,603) 34
2,637
At 26 December 2021 (as restated) 22,057 7,529 29,586 47,148
17,562
Provided for the period 981 683 1,664 2,641 4,305
Impairment 232 (52) 180 2,153 2,333
Disposals (75) (307) (382) (51) (433)
23,195 7,853 31,048 53,353
At 25 December 2022 22,305
Net book value
At 25 December 2022 14,654 3,040 17,694 32,513 50,207
At 26 December 2021 (as restated) 15,264 2,762 18,026 36,005 54,031
During the 52 weeks ended 25 December 2022, the Group recognised an impairment
charge of £2.3m (2021: restated impairment charge of £0.6m) due to
impairment of ROU assets £2.1m (2021: £2.9m) and impairment of fixed assets
£0.2m (2021: release of £2.3m). 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 in the underlying forecasts of future
performance and cash flows.
A 1% decrease in the discount rate would reduce the net impairment charge by
£1.2m, an increase of 1% would increase the impairment charge by £1.2m and a
1% increase in the growth rate would reduce the impairment charge by £1.1m.
The total carrying value of the CGUs that have been impaired in the period is
£15.6m (2021: £15.4m). These have been impaired to their value in use of
£8.9m (2021: £9.2m). The total carrying value of the CGUs that have been
released in the period is £16.4m (2021: £11.3m).
The key judgements and estimates in the inputs in calculating the impairments
are outlined in note 2(c).
Company
The Company holds no property, plant and equipment.
Prior year adjustment
During the preparation of the interim accounts, management identified a
calculation error within the impairment workings for the prior year, whereby
the depreciation that would have been charged had there been no impairment was
not being correctly considered as per IAS 36. At this stage £1.9m was
adjusted against 2021 reserves. However, on further review of the complex
adjustment it was identified that the adjustment needed to be recognised in
both 2020 and 2021. This resulted in an impairment release of £2.46m in 2020
and an impairment charge of £0.6m in 2021. The cumulative impact of this was
£1.9m in line with the adjustment identified in the interim.
In addition, a related prior year adjustment arising from the same issue has
been recognised in 2021, whereby the depreciation charge on ROU assets should
have been reduced for the impairment to allow depreciation to run to the end
of the life of the lease.
Restated balance sheet at 27 December 2020 At 27 December 2020
(as restated)
At 27 December 2020
Adjustment (as previously stated)
£'000 £'000 £'000
Non-current assets
Intangible assets 26 - 26
Property, plant and equipment 16,433 861 15,572
Right-of-use assets 41,406 1,595 39,811
Other non-current assets 129 - 129
57,994 2,456 55,538
Current assets
Inventories 1,822 - 1,822
Trade and other receivables 1,363 - 1,363
Cash and cash equivalents 8,028 - 8,028
11,213 - 11,213
Total assets 69,207 2,456 66,751
Current liabilities
Trade and other payables (10,617) - (10,617)
Lease liabilities (2,904) - (2,904)
(13,521) - (13,521)
Non-current liabilities
Provisions (335) - (335)
Lease liabilities (52,219) - (52,219)
Other Payables (80) - (80)
(52,634) - (52,634)
Total liabilities (66,155) - (66,155)
Total net assets 3,052 2,456 596
Equity
Share capital 6,061 - 6,061
Share premium 24,251 - 24,251
Merger reserve 992 - 992
Retained deficit (28,252) 2,456 (30,708)
Total equity 3,052 2,456 596
Impact on Income Statement for the 52 weeks ended 26 December 2021
52 weeks 52 weeks
Ended 26 December (as restated) Ended 26 December (as previously stated)
Adjustment
2021 2021 2021
£'000 £'000 £'000
Cost of sales - Depreciation release (33,567) 563 (34,130)
Operating expenses - Impairment charge (1,902) (597) (1,305)
Highlighted items (included within Operating expenses) (464) (597) 133
Profit and total comprehensive income for the period
1,151 (34) 1,185
Earnings per share for profit attributable to the ordinary equity holders of
the company
Basic earnings per share 0.82p (0.02p) 0.84p
Diluted earnings per share 0.72p (0.02p) 0.74p
Impact on the Balance Sheet as at 26 December 2021
At 26 December 2021
(as restated)
At 26 December 2021
Adjustment (as previously stated)
2021 2021 2021
£'000 £'000 £'000
Non-current assets
Property, plant and equipment 18,026 3,464 14,562
Right-of-use assets 36,005 (1,042) 37,047
Equity
Retained deficit (26,981) 2,422 (29,403)
Total equity 4,326 2,422 1,904
14 Leases
25 December 2022 26 December 2021
£'000 £'000
Current
Lease liabilities 1,953 2,024
1,953 2,024
Non-current
Lease liabilities 48,358 50,157
48,358 50,157
50,311 52,181
Due within one year 1,953 2,024
Due two to five years 11,386 12,371
Due over five years 36,972 37,786
50,311 52,181
Lease liabilities are measured at the present value of the remaining lease
payments, discounted using the Group's incremental borrowing rate of 4.5% and
the Bank of England (BoE) base rate at the time of any lease modification or a
new lease. The average rate used for modification in 2022 was 5.9% (2021:
4.6%). The lease liabilities as at 25 December 2022 were £50.3m (2021:
£52.1m).
The right-of-use assets all relate to property leases. The right-of-use assets
as at 25 December 2022 were £32.5m (2021: £36.0m). During the period ended
25 December 2022 the Group made a provision for impairment of the right-of-use
assets against a number of sites totalling £2.2m (2021: restated impairment
of £2.9m).
15 Investments
£'000
Company
At 27 December 2020 3,214
Share based payment in respect of subsidiary 120
At 26 December 2021 3,334
Share based payment in respect of subsidiary 58
At 25 December 2022 3,392
The Company's investments are wholly related to a 100% ordinary shareholding
in Took Us a Long Time Limited (2021: 100% holding), a company registered in
England and Wales with registered offices at 32 Charlotte Street, London W1T
2NQ. Took Us a Long Time Limited is primarily engaged with the operation of
restaurants.
16 Inventories
25 December 2022 26 December 2021
£'000 £'000
Raw materials and consumables 922 855
Smallware inventories 1,269 1,248
2,191 2,103
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
£12.0m (2021: £8.6m).
17 Trade and other receivables
25 December 2022 26 December 2021
£'000 £'000
Trade receivables 121 211
Prepayments and other receivables 1,577 1,249
Total trade and other receivables 1,698 1,460
Less non-current portion (Deposits) (65) (105)
1,633 1,355
Company
Amounts due from subsidiary 3,162 3,836
Total trade and other receivables 3,162 3,836
Classified as non-current 3,162 3,836
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 (2021: £28.2m).
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
£25.0m (2021: £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
25 December 2022 26 December 2021
£'000 £'000
Trade payables 5,142 3,952
Taxations and social security 1,638 1,506
Accruals and deferred income 3,499 3,314
Other payables 2,242 1,801
Total trade and other payables 12,521 10,573
Less non-current portion (Deposits) (128) (80)
12,393 10,493
Included within trade payables are £nil (2021: £0.01m) due to related
parties (note 28).
19 Provisions
25 December 2022 26 December 2021
£'000 £'000
At 26 December 2021 297 335
Dilapidations provision utilisation in the period - (38)
Dilapidations provision charge in the period 42 -
At 25 December 2022 339 297
The Group has historically recognised a provision of £0.3m for dilapidations
for a number of sites, where the need to carry out restoration 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
25 December 2022 26 December 2021
£'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 £5.3m
(2021: £4.6m) is not recognised in these financial statements.
21 Borrowings
25 December 2022 26 December
2021
£'000 £'000
Current
Secured bank borrowings - 313
- 313
Non-current
Secured bank borrowings - 937
- 937
Total - 1,250
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)
Total - 1,250
The bank loan was repaid in June 2022. While held it attracted interest at a
margin of 4.5% over the Bank of England base rate. The borrowing was secured
by legal charges over assets of the group.
22 Share capital
Number Number Number £'000
Ordinary A 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
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
Ordinary B shares at 0.00001 pence converted to ordinary A shares 5,225,546 - 0
(5,225,546)
At 25 December 2022 146,315,304 10,451,094 59,795,496 6,061
Share Capital Reorganisation
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. Following achievement of the first hurdle on 27 June 2022,
5,225,546 'B' shares converted to ordinary shares.
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 values of minimum operating lease receipts are shown below.
The receipts are from sub-tenants on contractual sub-leases.
25 December 2022 26 December
2021
£'000 £'000
Within one year: receipts 290 290
Within two to five years: receipts 1,158 1,158
Over five years: receipts 1,555 1,845
3,003 3,293
25 Pensions
The Group made contributions of £8,000 (2021: £6,000) to the personal
pension plan of the Directors. During the year the Group made contributions to
employee pensions of £0.3m (2021: £0.2m). As at 25 December 2022,
contributions of £120,000 due in respect of the current reporting period had
not been paid over to the schemes (2021: £99,000).
26 Share based payments
Weighted average exercise price Number
(pence) '000
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
Exercised 0.0 (5,225)
Lapsed 4.4
(290)
Cancelled - -
Issued - -
At 25 December 2022 0.9 13,427
The exercise price of options outstanding at the end of the period ranged
between 0p and 4p (2021: 0p and 4p) and their weighted average remaining
contractual life was 3.1 years (2021: 3.9 years).
Of the total number of options outstanding at the end of period 2.97 million
have vested and are exercisable at the end of the period (2021: none)
The market price of the Company's ordinary shares as at 25 December 2022 was
3.8p and the range during the financial year was from 3.3p to 6.3p (as at 26
December 2021 was 4.9p and the range during the financial year was from 2.9p
to 7.9p).
No option was exercised or granted in 2022 (2021: £nil). Shares of 5.2m 'B'
shares converted to 'A' ordinary shares (2021 £nil) and no further 'B' shares
granted (2021: 15.7m).
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
£60,000 was 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 was 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 15.7m '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.
Following achievement of the first hurdle on 27 June 2022, 5,225,546 'B'
shares converted to 'A' ordinary shares.
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 13.4m share outstanding as at 25 December 2022 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 25 December 2022 26 December
2021
£'000 £'000
Cash and cash equivalents 7,002 11,005
Trade and other receivables 186 316
Total financial assets 7,188 11,321
Financial liabilities (amortised cost)
Trade and other payables 7,384 5,753
Loans and borrowings - 1,250
Finance leases 50,311 52,181
Total financial liabilities 57,695 59,184
Company - Financial assets (amortised cost) 25 December 2022 26 December
2021
£'000 £'000
Intercompany loan 3,162 3,836
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:
25 December 2022 26 December
2021
Ageing of receivables £'000 £'000
<30 days 75 60
31-60 days 11 15
61-120 days 17 33
>120 days 127 194
Provision for doubtful debt (109) (91)
121 211
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. Accordingly, the Company does not consider there to be any risk
arising from concentration of receivables due from any counterparty.
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 7,256 24 - - 104
Finance leases 645 1,214 3,134 9,617 35,701
As at 25 December 2022 7,901 1,238 3,134 9,617 35,805
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
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 £2.0m
(2021: Retained earnings £4.3m).
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 is not
subject to any externally imposed capital requirements. There have been no
changes in the Group's objectives for maintaining capital nor what it manages
in its capital structure.
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. Following changes to the Board in 2021, the entities
below are no longer considered to be related parties.
52 weeks ended 25 December 2022 52 weeks ended 26 December 2021
£'000 £'000
Rent, insurance and legal services charged to the group:
- Kropifko Properties Ltd - (32)
- KLP Partnership - (28)
- ECH Properties Ltd - (25)
- Proper Proper T Ltd - (33)
Balance due to related parties: - 11
The rent paid to related parties is considered to be a reasonable reflection
of the market rate for the properties.
29 Reconciliation of (loss)/profit before tax to net cash inflow from
operating activities
52 weeks ended 25 December 2022 Restated
52 weeks ended 26 December 2021
£'000 £'000
Group
(Loss)/ profit before tax (6,432) 1,151
Finance income (41) -
Finance expense 30 59
Finance expense (IFRS 16) 2,391 2,438
Share based payment charge 58 120
Depreciation of right-of-use assets (IFRS 16) 2,641 2,579
Depreciation of property plant and equipment 1,664 1,297
Impairment of property, plant and equipment 180 (2,346)
Impairment of Right-of-use assets 2,153 2,943
Profit from sale of property plant and equipment 154 (3)
Amortisation of intangible assets 3 3
Dilapidations provision charge 42 -
Dilapidations provision utilisation - (38)
Other non cash (21) -
Decrease / (increase) in inventories (88) (282)
Decrease / (increase) in trade and other receivables (238) 32
(Decrease)/ Increase in trade and other payables 1,948 (127)
4,444 7,826
52 weeks ended 25 December 2022 52 weeks ended 26 December 2021
£'000 £'000
Company
Loss before tax (674) (145)
Decrease in trade and other receivables
674 142
- (3)
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 28 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
Cashflow (3,172) - (313) (937) (4,422)
Addition / (decrease) to lease liability
3,101 (1,799) - - 1,302
Net debt as at 25 December 2022 1,953 48,358 - - 50,311
31 Post Balance Sheet Events
There are none to report.
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