REG - Tasty PLC - Half-year Report <Origin Href="QuoteRef">TAST.L</Origin>

TastyAnnouncement

12/09/2017 07:06

RNS Number : 4318Q
Tasty PLC
12 September 2017
Tasty plc
("Tasty" or the "Group")
Interim Results (unaudited) for the 26 weeks ended 2 July 2017
Highlights:
 Revenue up 11.8% to 24.4m on the comparative period (H1 2016 - 21.8m)
 Successfully opened 4 new sites in the period and now operating sixty-five restaurants
Chairman's statement
Introduction
The Group is currently trading from sixty-five restaurants after successfully opening 4 new sites in the 26 week period to 2 July 2017. 
The Board believes that the sector as a whole has been suffering due to a slowdown in consumer spending since the beginning of 2017 and this is set to continue into 2018. This is not unique to the Group or any particular area but appears to be a nationwide problem particularly evident in London and has impacted turnover and profit.
Business review
As a result of the weak trading environment the Group is facing pressure on sales and margins. The Group is taking decisive action to improve its position;
Site disposals
A number of sites have been identified as underperforming and turnaround measures have been implemented which are producing encouraging results. We are currently in the process of disposing of some sites and are marketing others which have not shown significant signs of improvement.
Food offering
We have carried out a major review of our menus taking into account customer feedback to ensure, the offering remains current and in line with our customers' tastes and we are in the best position to maintain and increase our market share. We have reduced the number of dishes on the menu, along with improving the recipes of over a third of the items.
Promotions and pricing
The Board has noted that the level of promotional activity in the sector has increased significantly in 2017. The Group continues to match the activity of the competition with regard to promotions and is reviewing alternative strategies.
Cost base
The pace of the roll out has been scaled back in the current climate and The Group will be reviewing its functions to ensure cost savings.
Results
Sales increased by 11.8% on the corresponding period to 24,375,000 (2016 - 21,794,000) with like for like sales declining. Headline operating profit, before pre-opening costs, non-trade items and interest, was 544,000 (2016 - 1,925,000) and pre-tax profitbefore pre-opening costs and non-trade itemsdecreased to 210,000 (2016 - 1,615,000).
The Group has undertaken a comprehensive review of its estate during the period and has recognised an impairment charge of 9,492,000 in light of current trading conditions. After taking into account all non-trade adjustments the Group has a stated loss after tax for the period of 9,302,000 (2016 - loss 2,637,000).
Cash flows and financing
During the period capital expenditure of 4,414,000 (2016 - 5,044,000) was incurred. Four sites have been opened in the period, with a further two sites due to open imminently and no further sites planned for 2017. The Board has reviewed its property pipeline and is currently not committed to opening any sites in 2018.
Overall, the net cash outflow for the period was 3,425,000 (2016 - inflow 334,000). As at 2 July 2017, the Group had net borrowings of 5,421,000 (2016 - 7,445,000). The Group has an available banking facility of 12,000,000 and it is the Board's intention to reduce net debt by the year end.
Outlook
The Group recognises the challenging conditions ahead and is taking action to strengthen its position. The Directors are confident that the Group's restaurants remain appealing to customers and the Group will continue its growth in the future.
K Lassman
Chairman
Tasty plc

12 September 2017
This announcement contains inside information.
Enquiries:
Tasty plc Tel: 020 7637 1166
Jonny Plant, Chief Executive
Cenkos Securities Tel: 020 7397 8900
Bobbie Hilliam
Consolidated statement of comprehensive income
for the 26 weeks ended 2 July 2017 (unaudited)
26 weeks to
27 weeks to
53 weeks to
2 July
3 July
1 January 
2017
2016
2017
'000
'000
'000
Revenue
24,375
21,794
45,847
Cost of sales
(23,482)
(19,542)
(40,570)
Gross profit
893
2,252
5,277
Administrative costs
(349)
(327)
(485)
Operating profit excluding pre-opening costs and non-trading items
544
1,925
4,792
Pre-opening costs
(165)
(197)
(644)
Share based payments
(50)
(50)
(100)
Exceptional Costs - rebranding
 - 
 - 
(55)
Exceptional Costs - impairment of lease premiums
(172)
(294)
(294)
Exceptional Costs - impairment of property, plant and equipment
(9,320)
(3,576)
(3,576)
Operating (loss) / profit
(9,163)
(2,192)
125
Finance income
(119)
(113)
1
Finance expense
(214)
Loss before tax
(9,282)
(2,305)
(88)
Income tax
(20)
(332)
(760)
Loss and total comprehensive income period
attributable to equity shareholders
(9,302)
(2,637)
 (848)
loss per share
Basic
(15.56p)
(4.95p)
(1.56p)
Consolidated statement of changes in equity
for the 26 weeks ended 2 July 2017 (unaudited)
Share capital
Share premium
Merger reserve
Retained deficit
Total
'000
'000
'000
'000
'000
Balance at 01 January 2017
5,975
21,348
992
1,851
30,166
Issue of ordinary shares
5
28
-
-
33
Total comprehensive income for the period
-
-
-
(9,302)
(9,302)
Share based payments - credit to equity
-
-
-
50
50
Balance at 02 July 2017
5,980
21,376
992
(7,401)
20,947
Balance at 27 December 2015
5,322
13,371
992
2,599
22,284
Issue of ordinary shares
14
32
-
-
46
Total comprehensive income for the period
-
-
-
(2,637)
(2,637)
Share based payments - credit to equity
-
-
-
50
50
Balance at 3 July 2016
5,336
13,403
992
12
19,743
Balance at 27 December 2015
5,322
13,371
992
2,599
22,284
Issue of ordinary shares
653
7,977
-
-
8,630
Total comprehensive income for the period
-
-
-
(848)
(848)
Share based payments - credit to equity
-
-
-
100
100
Balance at 01 January 2017
5,975
21,348
992
1,851
30,166
Consolidated balance sheet
At 2 July 2017 (unaudited)
2 July
3 July
01 January
2017
2016
2017
'000
'000
'000
Non-current assets
Intangible assets
444
469
473
Property, plant and equipment
27,844
28,944
34,200
Pre-paid operating lease charges
1,833
1,614
1,861
Other non-current assets
278
198
279
30,399
31,225
36,813
Current assets
Inventories
2,442
1,980
2,465
Trade and other receivables
4,195
3,270
4,390
Pre-paid operating lease charges
114
168
124
Cash and cash equivalents
1,579
2,555
5,004
8,330
7,973
11,983
Total assets
38,729
39,198
48,796
Current liabilities
Trade and other payables
(8,191)
(7,364)
(9,163)
Corporation tax liabilities
(407)
-
(407)
(8,598)
(7,364)
(9,570)
Non-current liabilities
Provisions
(30)
(45)
(35)
Lease incentives
(1,168)
(832)
(1,059)
Deferred tax liability
(986)
(1,214)
(966)
Long-term borrowings
(7,000)
(10,000)
(7,000)
(9,184)
(12,091)
(9,060)
Total liabilities
(17,782)
(19,455)
(18,630)
Total net assets
20,947
19,743
30,166
Equity
Share capital
5,980
5,336
5,975
Share premium
21,376
13,403
21,348
Merger reserve
992
992
992
Retained (deficit) / profit
(7,401)
12
1,851
Total equity
20,947
19,743
30,166
Consolidated cash flow statement
for the 26 weeks ended 2 July 2017 (unaudited)
26 weeks to
27 weeks to
53 weeks
2 July
3 July
1 January
2017
2016
2017
'000
'000
'000
Operating activities
Cash generated from operations
1,075
1,195
5,368
Corporation tax paid
-
-
(600)
Net cash inflow from operating activities
1,075
1,195
4,768
Investing activities
Purchase of property, plant and equipment
(4,414)
(5,044)
(11,652)
Interest received
-
-
1
Net cash flows used in investing activities
(4,414)
(5,044)
(11,651)
Financing activities
Net proceeds from issues of ordinary shares
33
46
8,630
Bank loan receipt
-
4,250
6,250
Bank loan repayment
-
-
(5,000)
Interest paid
(119)
(113)
(214)
Net cash flows generated / (used) in financing activities
(86)
4,183
9,555
Net decrease in cash and cash equivalents
(3,425)
334
2,783
Cash and cash equivalents at beginning of the period
5,004
2,221
2,221
Cash and cash equivalents as at 3 July 2016
1,579
2,555
5,004
Notes to the condensed financial statements
for the 26 weeks ended 2 July 2017 (unaudited)
1 General information
Tasty plc ("Tasty") is a public limited company incorporated in the United Kingdom under the Companies Act (registration number 5826464). The Company is domiciled in the United Kingdom and its registered address is 32 Charlotte Street, London, W1T 2NQ. The Company's ordinary shares are traded on the Alternative Investment Market of the London Stock Exchange ("AIM"). Copies of this Interim Report or the Annual Report and Financial Statements may be obtained from the above address or on the investor relations section of the Company's website at www.dimt.co.uk.
2 Basis of accounting
The condensed financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations as endorsed by the European Union. The same accounting policies, presentation and methods of computation have been followed in the preparation of these results as were applied in the Company's latest annual audited financial statements.
The financial information for the 26 weeks ended ended 2 July 2017 has not been subject to an audit nor a review in accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity, issued by the Auditing Practices Board.
The financial information for the period ended 1 January 2017 does not constitute the full statutory accounts for that period. The Annual Report and Financial Statements for 2016 have been filed with the Registrar of Companies. The Independent Auditors' Report on the Annual Report and Financial Statements for 2016 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.
The condensed financial statements are presented in sterling and all values are rounded to the nearest thousand pounds ('000).
Except when otherwise indicated, the consolidated accounts incorporate the financial statements of Tasty plc and its subsidiary, Took Us A Long Time Limited, made up to the relevant period end.
3 Income tax
The income tax charge has been calculated by reference to the estimated effective corporation tax and deferred tax rates of 20% (2016 - 20%).
4 Earnings per share
26 weeks to
27 weeks to
53 weeks
2 July
3 July
1 January
2017
2016
2017
Pence
Pence
Pence
Loss per ordinary share
(15.56)
(4.95)
(1.56)
Diluted Loss per ordinary share
(15.56)
(4.95)
(1.56)


The basic earnings per share figures are calculated by dividing the net profit for the period attributable to shareholders by the weighted average number of ordinary shares in issue during the period. The diluted earnings per share figure allows for the dilutive effect of the conversion into ordinary shares of the weighted average number of options outstanding during the period. Options are only taken into account when their effect is to reduce basic earnings per share.
Earnings per share have been calculated using the numbers shown below:
26 weeks to
27 weeks to
53 weeks
2 July
3 July
1 January
2017
2016
2017
number '000
number '000
number
'000
Weighted average ordinary shares (basic)
59,763
53,243
54,314
Weighted average ordinary shares (diluted)
59,763
53,243
54,314
26 weeks to
27 weeks to
53 weeks
2 July
3 July
1 January
2017
2016
2017
'000
'000
'000
Loss for the financial period
(9,302)
(2,637)
(848)
5 Reconciliation of profit before tax to net cash inflow from operating activities
26 weeks to
27 weeks to
53 weeks
2 July
3 July
1 January
2017
2016
2017
'000
'000
'000
Loss before tax
(9,282)
(2,305)
(88)
Finance income
-
-
(1)
Finance expense
119
113
214
Write-off of rent premium
172
294
Share based payment charge
50
50
100
Depreciation 
1,345
1,020
6,034
Impairment
9,320
3,576
-
Amortisation of intangible assets
1
1
2
Onerous lease provision movement
(5)
-
(10)
Increase in inventories
23
(168)
(653)
Increase in trade and other receivables
196
(791)
(1,330)
Increase in trade and other payables
(864)
(595)
1,100
1,075
1,195
5,368


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The company news service from the London Stock Exchange
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