REG - Tasty PLC - Final Results
28/06/2024 07:00
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RNS Number : 3234U Tasty PLC 28 June 2024
28 June 2024
Tasty plc
("Tasty" or the "Company")
Final results for the 53 weeks ended 31 December 2023
Tasty (AIM: TAST), the owner and operator of restaurants in the casual dining
sector, announces its annual results for the 53 week period ended 31 December
2023.
Key Highlights
· Revenue of £46.9m (2022: £44.0m); an increase of 6.5% year-on-year
· Adjusted EBITDA(1) (post IFRS 16) of £4.4m (2022: £2.6m); an
increase of £1.8m
· Cost of living crisis and interest rate rises continued to
significantly impact FY23 revenue and inflationary pressure on labour, food
and utilities continue to adversely affect profitability
· Post-year end decisive action taken to stabilise and transform the
business through a Restructuring Plan sanctioned by the High Court on 4 June
2024
· Post-year end operational and head office savings realised and
additional £750,000 working capital for the Group provided by secured loan
· Post Restructuring Plan - 37 sites trading (including 7 renegotiated
rent agreements) - tail of the estate cut significantly and 19 loss-making
sites/onerous leases exited
· The Group is now on a secure footing for potential future growth
(( 1 )) Adjusted for depreciation, amortisation and highlighted items
including share-based payments and impairments.
The report and accounts for the 53 week period ended 31 December 2023 will be
available on the Company's website at https://dimt.co.uk/investor-relations/
(https://dimt.co.uk/investor-relations/) today.
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
Cavendish Capital Markets Limited
(Nominated adviser and broker)
Katy Birkin/George Lawson Tel: 020 7220 0500
Chairman's statement
I am pleased to be reporting on the Group's annual results for the 53 week
period ended 31 December 2023 and the comparative 52 week period ended 25
December 2022.
Post year-end, the Board took considered action to reshape the Group's estate
and correct the trading decline and the projected EBITDA loss trajectory. The
Board believes that the decisions taken have placed the Group on a firm
footing to enable growth in the future. In arriving at the best course of
action to take, the Board evaluated the Group's strategic and restructuring
options, given its performance both during 2023 and since the beginning of the
calendar year, and assessed what was in the best interests of shareholders and
creditors as a whole. This culminated in the post year-end Court and creditor
sanctioned restructuring plan (the "Restructuring Plan").
Under the Restructuring Plan, 1 dim t, 10 Wildwood, 2 non-trading and 3
sub-let sites have closed and the liabilities compromised (by way of a
compromise with the Group's creditors binding secured creditors, unsecured
creditors and compromising members' rights), further site leases have been
renegotiated and a £750,000 convertible loan was injected into the Group. The
Board is confident that these corrective steps will position the Group for a
positive future with a profitable estate and the right cost base for future
growth and expansion. Further details of the Restructuring Plan are set out
below in the Strategic Report. As at the period end, the Group comprised 53
restaurants: 6 dim t and 47 Wildwood restaurants. Despite the Group delivering
4.1% like for like sales growth, the continuing increased utility, food and
labour costs hampered the Group's performance. Footfall continued to be
affected by the work from home culture post Covid, transportation strikes and
bad weather occurring during important trading periods of the year, as well as
the pressure on consumer spend as living costs continue to increase.
Delivery and takeaway weakened during the year, without a corresponding move
towards a dine-in experience. Performance for the start of 2024 was
disappointing with year to date like for like sales only 0.2% positive.
The Board expects the Group's performance to continue to be impacted by energy
costs, labour costs and increasing food costs, pressure on consumer spend as
well as the negative impact on sales of events including the Euros 2024, the
Olympics and the upcoming General Election. However, an uplift is expected
towards the end of the year when a new Government will be in place and the
Group will have a reached a period of stability post restructuring plan with
the all the benefits of the smaller, more profitable estate the cost
efficiencies will be apparent.
We regret that we had to make the difficult decision to make redundancies as a
result of the Restructuring Plan. It is especially upsetting to lose loyal and
dedicated employees at every level but we believe this action will protect the
long-term security of the Group and the remaining employees. We wish everyone
who we were unable to retain, good luck for the future and we are extremely
grateful for all their hard work and support over the years.
Dividend
The Board does not propose to recommend a dividend (2022: £nil).
Outlook
The Board believes that the Restructuring Plan will allow the Group to
stabilise towards the end of the year, with a significant improvement in
EBITDA performance expected over the next two years through site
rationalisation and other tangible cost savings. We are hopeful that the
Restructuring Plan will allow the Group to meet new opportunities in the
sector in 2025 beyond its existing operations, including exploring new
concepts, attracting new audiences and considering potential partnerships.
Keith Lassman
Chairman
27 June 2024
Strategic report for the 53 weeks ended 31 December 2023
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 trading
from 33 branded restaurants.
dim t
Our pan-Asian restaurant now trades from 4 sites, serving a wide range of
dishes, including dim sum, noodles, soup and curry.
Introduction
The hospitality industry continues to navigate a landscape marked with
significant challenges and uncertainty. Customer numbers continue to be
affected by rail strikes, a continuation of working from home culture post
Covid and cost of living crisis. Despite these struggles, sales revenue
growth in 2023 was positive. Summer traded particularly well as people enjoyed
"staycations" and Christmas performance surpassed management expectations. A
competitively priced Christmas set menu proved popular and like for like sales
improved.
There has been a continuation of shift from the early weekday trade to the
weekend. Using our extensive customer database we have been able to
strategically target specific sites on these quieter days and have avoided
blanket aggressive discounting and promotions.
Delivery and takeaway have slowed as customers look to cut back on
non-essential spend and without a corresponding shift to a dine-in
experience. We believe value, well-targeted promotions and quality of
product and service are the focus to improve demand.
Energy costs
Seasonal prices shifted from high volatility in 2022 to relative stability in
2023. With the energy price cap falling in 2023 we entered a fixed price
contract for both electricity and gas at the start of September 2023 and
ending in June 2024 and have reset the new contracts at a further reduced
rate.
Offering
We are constantly reviewing our menu and increasing the choice of options,
including set price two and three course menus. The Head of Food and our
central kitchen production have significantly improved our food quality and
consistency, and this is evident by the customer feedback surveys. 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 a greater choice. 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
The business continues to concentrate on creating an environment to retain the
best talent. The training and development of our kitchen and front of house
teams is a key part of our people strategy.
A new recruitment system has been rolled out across the Group which has
improved 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 improve employee satisfaction and
development. The full implementation of this project is now complete and we
expect to see the benefits in terms of enhanced customer service and
improvements in staff retention.
Increases in April 2024 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, and where possible, simplifying the menu.
We strengthened and rationalised our management structure and senior teams
across all areas with some investment in food, marketing and the learning and
development team.
We regret that we had to make the difficult decision to make a number of
redundancies as a result of the necessary Restructuring Plan. It is especially
upsetting to lose loyal and dedicated employees at every level, but we believe
this action will protect the long-term security of the Group and the remaining
employees. We wish everyone who we were unable to retain, good luck for the
future and we are extremely grateful for all their hard work and support over
the years.
Suppliers
Supply has been relatively consistent with minor disruptions and prices have
been generally stable. We are thankful to suppliers that continue to work
with us and have supported us through our restructuring.
Property
The Group has successfully sold and surrendered two underperforming
restaurants and compromised 23 other leases in the tail of the estate. The
Group is currently trading out of 37 units with 7 of those leases compromised
through the Restructuring Plan. The Group will consider expansion or other
opportunities over the next few months. There are restaurant refresh
programmes as well as some overdue capital expenditure which will be
considered in the second half of the year.
Events since the year end
Following a period of external challenges which have impacted the Group's
business and trading performance, the Board concluded that it was in the best
interests of the Group, to enter a restructuring plan under 26A of the
Company's Act 2006 to return the business to profitability and secure its
long-term future. The Restructuring Plan was sanctioned by the High Court on 4
June 2024.
In order to fund the Restructuring Plan and provide additional working
capital, the Group entered a loan agreement with a secured creditor for
£750,000. The loan is required to be discharged by 31 December 2024, or
later if agreed by both the Group and the lender, by either:
• Payment, purchase, redemption or discharge in any
other form agreed in writing between the Group and the Lender (including,
subject to shareholder approval, conversion of the loan into equity); or if
not
• Payment in cash in an amount equal to £2.6m
The Group has entered into a side agreement in relation to the loan to enable
conversion of the principal amount of the loan to ordinary shares of £0.001
each in the capital of the Company at a conversion price of £0.0146, subject
to and conditional on shareholder approval.
The Group has received irrevocable undertakings to vote in favour of the
necessary share allotment authority resolutions in relation to the conversion,
representing approximately 35 per cent of the current issued share capital of
the Company.
On 9 April 2024 the Group closed nine trading sites, three sub-lets and two
non-trading sites with a further two trading sites closing in May 2024. An
additional seven sites are trading on a new flexible basis under significantly
reduced rent terms.
The Group has entered a Time to Pay arrangement with HMRC in relation to PAYE
and VAT arrears of £2.1m which are expected to be paid in full by April
2025. HMRC is excluded from the Restructuring Plan and continues to be paid
in the normal course of business.
In accordance with the terms of the Restructuring Plan payments to local
authorities in respect of business rates and council tax were not paid in
April and May 2024.
Under the Restructuring Plan, the sum of £525,000 will be paid to compromise
creditors in three equal tranches in August 2024, March 2025 and June 2025.
Based on the current claim values this will result in a dividend of 4.17p/£
to Plan Creditors. In addition, such creditors will benefit from the
participation in the Restructuring Plan Surplus Fund which will also allow
them to share in the upside of the Group achieving its EBITDA in 2024.
Current trading and outlook
Performance for the year to-date is behind management expectations, due
largely to the cost of living crisis and the initial impact of the
Restructuring Plan. However, the outlook post restructuring is positive. With
underlying labour issues easing, inflation tailing off and the expected
positive impact of the Restructuring Plan, as previously announced, the Group
should see an uplift in profitability towards the end of the year.
The rationalisation of loss-making restaurants and a reduced central overhead
will enable significant EBITDA and efficiency improvements between 2024 to
2025 to counter the disruption caused by the restructuring in the first half
of 2024.
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
53 weeks ended 53 weeks ended 52 weeks ended
31 December 31 December 25 December
2023 2023 2022
Non-financial
Sites at year end 53 53 54
Open sites 51 51 52
Financial £'000 £'000 £'000
Sales 46,910 46,910 44,027
EBITDA before highlighted items
4,377 (922) 2,621
Depreciation of PP&E and amortisation
(1,589) (1,658) (1,667)
Depreciation of right-of-use assets (IFRS 16)
(2,524) - (2,641)
Operating profit/(loss) before highlighted items
264 (2,580) (1,687)
Sales were £46.9m, up 6.5% on the corresponding period which was impacted by
restricted trading (2022: £44.0m) and EBITDA before highlighted items was
£4.4m (2022: £2.6m). The EBITDA loss before highlighted items and IFRS 16
adjustments was £0.9m (2022: £2.6m loss).
Operating profit before highlighted items (see Note 5) was £0.3m (pre-IFRS 16
equivalent: £2.6m loss, 2022: £4.4m loss).
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 2023 is £0.5m (2022: £0.3m). We have reviewed the impairment provision
across the ROU assets and fixed assets and have made a net provision of
£12.3m (2022: £2.3m).
After considering all of the non-trade adjustments, the Group reports a loss
after tax for the period of £14.5m (2022: £6.4m loss after tax). Net cash
inflow for the period before financing was £2.4m (2022: £2.8m inflow) and is
driven by a net cash inflow from operating activities of £2.5m (2022:
£4.4m).
As at 31 December 2023, the Group had no outstanding bank loan (2022: nil)
after repaying the Barclays Bank facility in full in June 2022. Cash at bank
at the end of the period was £4.2m (2022: £7.0m). Capital investment
decreased to £0.3m (2022: £1.6m). Prior year capital investment included
Loughton dim t new opening of £0.5m, mini refurbishments of £0.4m and
capital expenditure catch up post Covid.
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
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 Group also has an unutilised £250,000 overdraft facility.
Post year end the Group received a loan of £750,000 to fund the Restructuring
Plan and provide working capital.
Utilities and Cost of Living Crisis The biggest challenge faced by the Group, and many other businesses, has been
the increase in utility prices. We continue to work with our energy broker to
mitigate costs by focusing on reducing consumption and increasing
efficiency. The Group's energy contracts have been fixed to September 2025
benefitting from an approximate 10% reduction on the previous contract.
The increased energy prices and the cost-of-living crisis have impacted the
economy and we have reviewed our menu prices to mitigate some inflationary
pressures.
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 and as a
labour market. consequence staff retention (outside of the necessary redundancies made as a
result of the Restructuring Plan) is the highest since pre Covid. New HR and
recruitment systems have been established and proposed to provide consistent
and swift support to all colleagues. We have also strengthened our teams.
The Group offers competitive remuneration and is reviewing its overall
benefits package.
Food standards and safety The Group engages in regular internal and external compliance audits to ensure
all sites are complying with regulations. Job-specific training that covers
Failing to meet safety standards relevant regulations is provided to all staff on induction and whenever else
necessary. Online reporting systems are utilised on a daily basis to gather
relevant information on compliance.
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
27 June 2024
Consolidated statement of comprehensive income
for the 53 weeks ended 31 December 2023
Note 53 weeks ended 31 December 2023 52 weeks ended 25 December 2022
£'000 £'000
Revenue 3 46,910 44,027
Cost of sales (44,754) (44,123)
Gross profit/ (loss) 2,156 (96)
Other income 3 374 414
Operating expenses (14,840) (4,370)
Operating profit/ (loss) before highlighted items 264 (1,687)
Highlighted items 5 (12,574) (2,365)
Operating loss 4 (12,310) (4,052)
Finance income 6 140 41
Finance expense 6 (2,303) (2,421)
Loss before income tax (14,473) (6,432)
Income tax 9 - -
Loss and total comprehensive loss for the period (14,473) (6,432)
Earnings per share for loss attributable to the ordinary equity holders of the
company
Basic earnings per share 10 (9.89p) (4.40p)
Diluted earnings per share 10 (8.89p) (4.03p)
The notes below form part of these financial statements.
Consolidated statement of changes in equity
for the 53 weeks ended 31 December 2023
Share capital Share premium Merger reserve Retained earnings Total
£'000 £'000 £'000 £'000 £'000
Balance at 26 December 2021 6,061 24,254 992 (26,981) 4,326
Total comprehensive loss 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)
Total comprehensive income for the period - - - (14,473) (14,473)
Transactions with owners in their capacity as owners:
Share based payments - - - 11 11
Balance at 31 December 2023 6,061 24,254 992 (47,817) (16,510)
The notes below form part of these financial statements.
Company statement of changes in equity
for the 53 weeks ended 31 December 2023
Share capital Share premium Retained profit Total
£'000 £'000 £'000 £'000
Balance at 26 December 2021 6,061 24,254 (23,145) 7,170
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
Total comprehensive loss for the period - - (1,176) (1,176)
Transactions with owners in their capacity as owners:
Share based payments - - 11 11
Balance at 31 December 2023 6,061 24,254 (24,926) 5,389
The notes below form part of these financial statements.
Consolidated balance sheet
At 31 December 2023
31 December 2023 25 December 2022
Note £'000 £'000
Non-current assets
Intangible assets 12 31 25
Property, plant and equipment 13 12,248 17,694
Right-of-use assets 13 23,289 32,513
Other non-current assets 17 65 65
35,633 50,297
Current assets
Inventories 16 1,921 2,191
Trade and other receivables 17 1,541 1,633
Cash and cash equivalents 4,177 7,002
7,639 10,826
Total assets 43,272 61,123
Current liabilities
Trade and other payables 18 (10,403) (12,393)
Lease liabilities 14 (2,186) (1,953)
(12,589) (14,346)
Non-current liabilities
Provisions 19 (342) (339)
Lease liabilities 14 (46,745) (48,358)
Other Payables 18 (106) (128)
(47,193) (48,825)
Total liabilities (59,782) (63,171)
Total net (liabilities)/ assets (16,510) (2,048)
Equity
Share capital 22 6,061 6,061
Share premium 23 24,254 24,254
Merger reserve 23 992 992
Retained deficit 23 (47,817) (33,355)
Total equity (16,510) (2,048)
The financial statements were approved by the Board of Directors of the
Company and authorised for issue on 27 June 2024 and signed on their behalf by
Daniel Jonathan Plant.
The notes below form part of these financial statements.
Company balance sheet
At 31 December 2023
Company number: 5826464
31 December 2023 25 December 2022
Note
£'000 £'000
Non-current assets
Investments 15 3,403 3,392
Other non-current assets 17 1,986 3,162
Total net assets 5,389 6,554
Equity
Share capital 22 6,061 6,061
Share premium 23 24,254 24,254
Retained deficit 23 (24,926) (23,761)
Total equity 5,389 6,554
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 £1.2m (2022 - loss of £0.7m) 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 27 June 2024 and signed on their behalf by
Daniel Jonathan Plant.
Consolidated statement of cash flows
For the 53 weeks ended 31 December 2023
53 weeks ended 31 December 2023 52 weeks ended 25 December 2022
Note
£'000 £'000
Operating activities
Cash generated from operations 28 2,532 4,444
Net cash inflow from operating activities 2,532 4,444
Investing activities
Costs due to sale of property, plant and equipment
(50) -
Purchase of intangible assets (9) -
Purchase of property, plant and equipment 13
(250) (1,645)
Interest received 140 41
Net cash outflow from investing activities (169) (1,604)
Financing activities
Bank loan repayment 31 - (1,250)
Finance expense 6 (2,303) (2,421)
Principal paid on lease liabilities 31 (2,885) (3,172)
Net cash used in financing activities (5,188)
(6,843)
Net increase in cash and cash equivalents (2,825) (4,003)
Cash and cash equivalents brought forward 7,002 11,055
Cash and cash equivalents as at the end of the period 4,177 7,002
The notes below form part of these financial statements.
Company statement of cash flows
For the 53 weeks ended 31 December 2023
53 weeks ended 31 December 2023 52 weeks ended 25 December 2022
Note
£'000 £'000
Operating activities
Cash generated from operations - -
Net cash outflow from operating activities - -
Financing activities
Net proceeds from issues of ordinary shares - -
Net cash flows used in financing activities - -
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 53 weeks ended 31 December
2023
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 53-week period ended 31 December 2023, with
a comparative period of the 52-week period ended 25 December 2022. 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 31 December 2023, the Group had net liabilities of £16.5m (2022: net
liabilities of £2.0m). The Group meets its day-to-day working capital
requirements through the generation of operating cashflow, equity raises 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 has a modest £250,000 overdraft
facility.
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 prepared cash flows to the end of December 2025 to include
the positive impact of the Restructuring Plan. The cash flows have included,
amongst other things, sensitivity analysis to model the effect of changing
economic assumptions in relation to cost increases and the associated cost of
living crisis. The Group's energy contracts have been fixed to September
2025 benefitting from an approximate 10% reduction, food costs have been
somewhat mitigated through menu changes and the Bank of England has forecasted
inflation to fall further in 2024. Nevertheless, the Directors expect the
trading environment to remain challenging for the remainder of 2024.
The £750,000 loan is intended to be converted to equity at the earliest
opportunity contingent on shareholder approval. The Group has received
irrevocable undertakings to vote in favour of the necessary share allotment
authority resolutions in relation to the conversion, representing
approximately 35 per cent of the current issued share capital of the
Company. Given the terms of the loan, the Directors are very confident
shareholders will approve the conversion at a General Meeting to be convened
shortly.
However, it is recognised that there is material uncertainty around the loan
note converting to equity until shareholder approval to the required
resolutions has been received which may cast doubt on the Group's ability to
continue as a going concern.
(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 £39m at 31 December 2023 (25 December 2022: £41m). 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 31 December 2023 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 53 weeks ended 31 December
2023 were as follows:
• 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
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.
· IFRS 7 and IAS 7: Supplier Finance Arrangements (effective for
periods commencing on or after 1 January 2024)
· IAS 1: Non-current liabilities with covenants (effective for periods
commencing on or after 1 January 2024)
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.
(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 31 December
2023.
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 25)
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 9.75% (2022: 8%), 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 discount rate in
2023 has increased in line with the Bank of England base rate. The lease
length used in the value in use calculations is management's best estimate of
the expected life at the impairment review date.
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 2.0% growth rate (2022 - 0.75%) 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 31 December 2023, 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 £2.8m and decrease the right-of-use
asset pre-impairment by £2.2m.
(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:
53 weeks ended 31 December 2023 52 weeks ended 25 December
2022
£'000 £'000
Sale of goods and services: dine-in 42,342 39,004
Sale of goods and services: delivery and takeaway 4,568 5,023
46,910 44,027
An analysis of the Group's other income is as follows:
53 weeks ended 31 December 2023 52 weeks ended 25 December 2022
£'000 £'000
Sub-let site rental income 328 362
Other 46 52
374 414
4 Operating loss
53 weeks ended 31 December 2023 52 weeks ended 25 December 2022
This has been arrived at after charging £'000 £'000
Staff costs 20,275 19,240
Share based payments 11 58
Pre-opening costs 48 51
Amortisation of intangible assets 3 3
Depreciation of right-of-use assets (IFRS16) 2,524 2,641
Depreciation property, plant and equipment 1,589 1,664
Dilapidations provision charge 3 42
Restructure and consultancy 69 14
Impairment of property, plant and equipment 4,086 180
Impairment of right-of-use assets 8,192 2,153
Loss on disposal of property, plant and equipment
84 154
Auditor remuneration:
Audit fee - Parent Company 13 11
- Group financial statements 59 46
- Subsidiary undertaking 13 11
Audit related assurance services - -
Taxation advisory services - -
Other advisory services - 5
5 Highlighted items - charged to operating expenses
53 weeks ended 31 December 2023 52 weeks ended 25 December 2022
£'000 £'000
(Loss)/profit on disposal of property, plant and equipment
(84) (154)
Restructure and consultancy (69) (14)
(Impairment)/Release of impairment of property, plant and equipment
(4,086) (180)
Impairment of right-of-use assets (8,192) (2,153)
Share based payments (11) (58)
Pre-opening costs (48) (51)
Gain on lease modifications (84) 245
(12,574) (2,365)
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
53 weeks ended 31 December 2023 52 weeks ended 25 December 2022
£'000 £'000
Interest receivable 140 41
Finance income 140 41
Interest payable - 30
Finance expense (IFRS 16) 2,303 2,391
Finance expense 2,303 2,421
7 Employees
53 weeks ended 31 December 2023 52 weeks ended 25 December 2022
Staff costs (including Directors) consist of: £'000 £'000
Wages and salaries 18,489 17,464
Social security costs 1,468 1,489
Other pension costs 318 287
Equity settled share-based payment expense 11 58
20,286 19,298
The average number of persons, including Directors, employed by the Group
during the period was 1,035 of which 1,011 were restaurant staff and 25 were
head-office (2022: 1,020 of which 998 were restaurant staff and 22 were
head-office staff).
No staff are employed by the Company (2022: no staff).
Of the total staff costs £18.7m was classified as cost of sales (2022:
£17.8m) and £1.6m as operating expenses (2022: £1.5m). Redundancy costs of
£0.06m (2022: £0.014m) 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 31 December 2023 is as
follows:
Emoluments Bonus Share based payments Pensions Benefits Social security costs
Other Payments 2023 Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Directors
J Plant 160 - 16 - - 21 - 197
K Lassman 40 - - - - 4 - 44
M Vachhani (resigned 31 March 2023) 49 - - 3
2 9 30 93
Harald Samúelsson 46 - - - - 5 - 51
Wendy Dixon (appointed 22 June 2022) 35 - - -
- 4 - 39
Key Management
Gordon Browne (appointed 04 May 2023) 79 - - -
- 10 - 89
Total 409 - 16 3 2 53 30 513
Emoluments Bonus Share based payments Pensions Benefits Social security costs
Other Payments 2022 Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Directors
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
Company
The Company paid no director emoluments during the year (2022 - none).
9 Income tax expense
53 weeks ended 31 December 2023 52 weeks ended 25 December 2022
£'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 (2022 - lower
than) corporation tax in the UK. The differences are explained below:
52 weeks ended 25 December 2022 52 weeks ended 26 December 2021
£'000 £'000
Loss before tax (14,473) (6,432)
Tax on (loss)/profit at the ordinary rate of corporation
tax in UK of 25% (2022 - 19%) (3,397) (1,222)
Effects of
Fixed assets differences 732 335
Expenses not deductible for tax 36 102
Remeasurement of deferred tax for changes in tax rates (171)
-
Movement in deferred tax not recognised 2,806 791
Adjustment in respect of previous years - -
Other movements (6) (6)
Total tax charge - -
Factors affecting future tax charges
The corporation tax rate has increased from 19% to 25% from 1 April 2023 for
companies with taxable profits in excess of £250,000.
10 Earnings per share
31 December 25 December
2023 2022
Pence Pence
Basic loss per ordinary share (9.89p) (4.40p)
Diluted loss per ordinary share (8.89p) (4.03p)
2023 2022
Number '000 Number '000
Loss per share has been calculated using the numbers shown below:
Weighted average number of ordinary shares used as the denominator in 146,315 146,315
calculating basic earnings per share
Adjustments for calculation of diluted earnings per share:
Ordinary B shares 10,451 10,451
Options 6,085 2,975
Weighted average number of ordinary shares and potential ordinary shares used 162,851 159,741
as the denominator in calculating diluted earnings per share
2023 2022
£'000 £'000
Loss for the financial period (14,473) (6,432)
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 (2022 - £nil).
12 Intangibles
Trademarks Total
£'000 £'000
At 26 December 2021 28 28
Additions - -
Amortisation of trademarks (3) (3)
At 25 December 2022 25 25
Additions 9 9
Amortisation of trademarks (3) (3)
At 31 December 2023 31 31
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 26 December 2021 37,321 10,291 47,612 53,567 101,179
Additions 709 936 1,645 - 1,645
Lease modifications - - - 1,301 1,301
Disposals (181) (334) (515) (50) (565)
At 25 December 2022 37,849 10,893 48,742 103,560
54,818
Additions (14) 264 250 1,173 1,423
Lease modifications - - - 333 333
Disposals (521) (193) (714) (405) (1,119)
At 31 December 2023 37,314 10,964 48,278 104,197
55,919
Depreciation
At 26 December 2021
22,057 7,529 29,586 17,562 47,148
Provided for the period 981 683 1,664 4,305
2,641
Impairment / (reversal of impairment) 232 (52) 180 2,333
2,153
Disposal (75) (307) (382) (433)
(51)
At 25 December 2022 23,195 7,853 31,048 53,353
22,305
Provided for the period 871 718 1,589 2,524 4,113
Impairment 3,518 568 4,086 8,192 12,278
Disposals (526) (167) (693) (391) (1,084)
27,058 8,972 36,030 68,660
At 31 December 2023 32,630
Net book value
At 31 December 2023 10,256 1,992 12,248 23,289 35,537
At 25 December 2022 14,654 3,040 17,694 32,513 50,207
During the 53 weeks ended 31 December 2023, the Group recognised an impairment
charge of £12.3m (2022: impairment charge of £2.3m) due to impairment of ROU
assets £8.2m (2022: £2.2m) and impairment of fixed assets £4.1m (2022:
impairment charge of £0.2m). The impairment movement is due to the
reassessment by each individual CGU following a change in performance and/or
change in assets. The impairment calculation is sensitive to changes in the
assumptions and estimates used in the underlying forecasts of future
performance and cash flows.
A 1% decrease in the discount rate would reduce the net impairment charge by
£0.6m, an increase of 1% would increase the impairment charge by £0.6m and a
1% increase in the growth rate would reduce the impairment charge by £0.5m.
The total carrying value of the CGUs that have been impaired in the period is
£30.8m (2022: £15.6m). These have been impaired to their value in use of
£16.4m (2022: £8.9m). The total carrying value of the CGUs that have been
released in the period is £15.5m (2022: £16.4m).
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.
14 Leases
31 December 2023 25 December 2022
£'000 £'000
Current
Lease liabilities 2,186 1,953
2,186 1,953
Non-current
Lease liabilities 46,745 48,358
46,745 48,358
48,931 50,311
Due within one year 2,186 1,953
Due two to five years 17,122 11,386
Due over five years 29,623 36,972
48,931 50,311
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 2023 was 4.67% (2022:
4.66%). The lease liabilities as at 31 December 2023 were £48.9m (2022:
£50.3m).
The right-of-use assets all relate to property leases. The right-of-use assets
as at 31 December 2023 were £23.3m (2022: £32.8m). During the period ended
31 December 2023 the Group made a provision for impairment of the right-of-use
assets against a number of sites totalling £8.2m (2022: impairment of
£2.2m).
15 Investments
£'000
Company
At 26 December 2021 3,334
Share based payment in respect of subsidiary 58
At 25 December 2022 3,392
Share based payment in respect of subsidiary 11
At 31 December 2023 3,403
The Company's investments are wholly related to a 100% ordinary shareholding
in Took Us a Long Time Limited (2022: 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
31 December 2023 25 December 2022
£'000 £'000
Raw materials and consumables 697 922
Smallware inventories 1,224 1,269
1,921 2,191
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 (2022: £12.0m).
17 Trade and other receivables
31 December 2023 25 December 2022
£'000 £'000
Trade receivables 149 121
Prepayments and other receivables 1,457 1,577
Total trade and other receivables 1,606 1,698
Less non-current portion (Deposits) (65) (65)
1,541 1,633
Company
Amounts due from subsidiary 1,986 3,162
Total trade and other receivables 1,986 3,162
Classified as non-current 1,986 3,162
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 £28.1m (2022: £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
£26.1m (2022: £25.0m) 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
31 December 2023 25 December 2022
£'000 £'000
Trade payables 4,359 5,142
Taxations and social security 1,947 1,638
Accruals and deferred income 3,648 3,499
Other payables 555 2,242
Total trade and other payables 10,509 12,521
Less non-current portion (Deposits) (106) (128)
10,403 12,393
Included within trade payables are £nil (2022: £nil) due to related parties
(note 28).
19 Provisions
31 December 2023 25 December 2022
£'000 £'000
At the beginning of the period 339 297
Dilapidations provision utilisation in the period 3 -
Dilapidations provision charge in the period - 42
At the end of the period 342 339
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
31 December 2023 25 December 2022
£'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 £8.4m
(2022: £5.3m) is not recognised in these financial statements.
21 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
At 31 December 2023 146,315,304 10,451,094 59,795,496 6,061
Share Capital
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.
22 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.
23 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.
31 December 2023 25 December
2022
£'000 £'000
Within one year: receipts 290 290
Within two to five years: receipts 1,131 1,158
Over five years: receipts 1,293 1,555
2,714 3,003
24 Pensions
The Group made contributions of £3,000 (2022: £6,000) to the personal
pension plan of the Directors. During the year the Group made contributions to
employee pensions of £0.3m (2022: £0.3m). As at 31 December 2023,
contributions of £134,000 due in respect of the current reporting period had
not been paid over to the schemes (2022: £120,000).
25 Share based payments
Weighted average exercise price Number
(pence) '000
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
Exercised - -
Lapsed 3.10 (1,065)
Cancelled -
Issued 2.75 4,175
At 31 December 2023 1.23 16,536
The exercise price of options outstanding at the end of the period ranged
between 0p and 4p (2022: 0p and 4p) and their weighted average remaining
contractual life was 1.41 years (2022: 3.1 years).
Of the total number of options outstanding at the end of period none have
vested and are exercisable at the end of the period (2022: 2.97m)
The market price of the Company's ordinary shares as at 31 December 2023 was
1.2p and the range during the financial year was from 0.03p to 3.75p (as at 25
December 2022 was 3.8p and the range during the financial year was from 3.3p
to 6.3p).
On 20 June 2023 options of 4.175m were granted at a grant price of 2.75p per
share 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 £45,000 was recognised over the three years based on a volatility
of 61.3% and risk rate of 4.36% 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 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 16.8m share outstanding as at 25 December 2022 comprise of the options
issued in July 2019, October 2019, January 2021 and June 2023. There are no
other outstanding options.
26 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 31 December 2023 25 December
2022
£'000 £'000
Cash and cash equivalents 4,177 7,002
Trade and other receivables 214 186
Total financial assets 4,391 7,188
Financial liabilities (amortised cost)
Trade and other payables 4,914 7,384
Finance leases 48,931 50,311
Total financial liabilities 53,845 57,695
Company - Financial assets (amortised cost) 31 December 2023 25 December
2022
£'000 £'000
Intercompany loan 1,986 3,162
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:
31 December 2023 25 December
2022
Ageing of receivables £'000 £'000
<30 days 145 75
31-60 days 7 11
61-120 days 15 17
>120 days 2 127
Provision for doubtful debt (20) (109)
149 121
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 4,808 49 - - 57
Finance leases 404 1,404 3,332 10,240 33,552
As at 31 December 2023 5,212 1,453 3,332 10,240 33,609
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
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
The Group had no outstanding bank loan during the period .
Capital disclosures
The Group's capital is made up of ordinary share capital, deferred share
capital, share premium, merger reserve and retained deficit totalling £16.5m
(2022: Retained earnings £2.0m).
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.
27 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 a significant
shareholder in such companies.
53 weeks ended 31 December 2023 52 weeks ended 25 December 2022
£'000 £'000
Rent, insurance and legal services charged to the group:
- Kropifko Properties Ltd (114) (197)
- KLP Partnership (156) (157)
- ECH Properties Ltd (81) (81)
- Proper Proper T Ltd (106) (106)
Balance due to related parties: 147 145
The rent paid to related parties is considered to be a reasonable reflection
of the market rate for the properties.
28 Reconciliation of loss before tax to net cash inflow from operating
activities
53 weeks ended 31 December 2023 52 weeks ended 25 December
2022
£'000 £'000
Group
Loss before tax (14,473) (6,432)
Finance income (140) (41)
Finance expense - 30
Finance expense (IFRS 16) 2,303 2,391
Share based payment charge 11 58
Depreciation of right-of-use assets (IFRS 16) 2,524 2,641
Depreciation of property plant and equipment 1,589 1,664
Impairment of property, plant and equipment 4,086 180
Impairment of Right-of-use assets 8,192 2,153
Loss on disposal of property plant and equipment 84 154
Amortisation of intangible assets 3 3
Dilapidations provision charge 3 42
Other non cash - (21)
Decrease / (increase) in inventories 270 (88)
Decrease / (increase) in trade and other receivables 92 (238)
(Decrease)/ Increase in trade and other payables (2,012) 1,948
2,532 4,444
53 weeks ended 31 December 2023 52 weeks ended 25 December 2022
£'000 £'000
Company
Loss before tax (1,176) (674)
Decrease in trade and other receivables
1,176 674
- -
29 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 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
Cashflow (2,885) - - - (2,885)
Addition / (decrease) to lease liability
3,118 (1,613) - - 1,505
Net debt as at 31 December 2023 2,186 46,745 - - 48,931
30 Post Balance Sheet Events
Following a period of external challenges which have impacted the Group's
business and trading performance, the Board concluded, in the best interest of
the Group, to enter into a restructuring plan under 26A of the Company's Act
2006 to return the business to profitability and secure its long-term
future. The Restructuring Plan was sanctioned by the High Court on 4 June
2024.
On 9 April 2024 the Group closed nine trading sites, three sub-lets and two
non-trading sites with a further two trading sites closed in May 2024 and one
site lease assigned in June 2024. An additional seven sites are trading on a
short-term basis under different rent terms.
In order to fund the Restructuring Plan and provide additional working capital
the Group entered a loan agreement with a secured creditor for £750,000.
The loan is required to be discharged by 31 December 2024, or later if agreed
by the Group and the lender, by either:
• Payment, purchase, redemption or discharge in any
other form agreed in writing between the Company and the lender (including,
subject to shareholder approval, conversion of the loan into equity); or if
not
• Payment in cash in an amount equal to £2.6m
The Company has entered into a side agreement in relation to the loan to
enable conversion of the principal amount of the loan to ordinary shares of
£0.001 each in the capital of the Company at a conversion price of £0.0146,
subject to and conditional on shareholder approval.
The Company has received irrevocable undertakings to vote in favour of the
necessary share allotment authority resolutions in relation to the conversion,
representing approximately 35 per cent of the current issued share capital of
the Company.
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