REG - Tasty PLC - Half-year Report
19/09/2022 07:00
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RNS Number : 8399Z Tasty PLC 19 September 2022
19 September 2022
Tasty plc
("Tasty", the "Group" or the "Company")
Unaudited Interim Results for the 26 weeks ended 26 June 2022
Key Points:
· Revenue of £21.5m (H1 2021: £11.6m); increase of 85%
· Adjusted EBITDA(1) of £2.7m (H1 2021: £0.8m)
· Impairment charge of £1.6m (H1 2021: £nil)
· Loss after tax for the period of £2.7m (H1 2021: loss £2.7m)
· Outstanding loan of £1.1m repaid in full in June 2022 (H1 2021:
£1.25m)
· Net cash after allowing for deferred creditors of £7.0m (H1 2021:
net cash after allowing for repayment of bank loan and deferred creditors of
£4.2m)
· 51 of 54 restaurants traded through the period
· Staff shortage challenges remain
· Cost of living pressures beginning to impact on revenue in H2 2022
· Inflationary pressure on labour, food and utilities has impacted the
business considerably
· Despite staffing and inflationary challenges like-for-like sales
compared with pre Covid-19 position was encouraging
(1 ) Adjusted for depreciation,
amortisation and share based payments.
Chairman's statement
Introduction
Following the difficult period of the pandemic, we started 2022 expecting the
year to be less challenging. Sales performance compared to 2019 was strong but
has been marred by labour shortages and inflationary pressures impacting the
hospitality industry. These cost pressures became more acute towards the end
of the first half of 2022.
Like many of our competitors and the economy in general, we are facing severe
headwinds. Inflationary pressures on food, labour and utility costs and
the cost-of-living crisis will inevitably impact the performance of the
Company for at least the remainder of the year.
Having navigated our way successfully through the difficult periods in the
recent past, we are in a good position to manage these challenges once again;
through a tight focus on cost controls and ensuring that we are delivering an
excellent experience for our customers.
We have agreed heads of terms for a new Wildwood site in Oxfordshire. Our dim
t brand has experienced a resurgence, and we are converting the former
underperforming Wildwood in Loughton to a dim t, which is due to open in the
Autumn. Whilst there is a strong pipeline of sites identified, due to current
uncertainties, we have slowed our previously announced expansion plans and
will cautiously approach any new openings as we brace ourselves for an even
more challenging economic environment, which is beginning to adversely impact
our profitability in the second half of 2022.
We continue to build solid teams and have invested at a central level to
overcome these challenges, streamline processes and enhance our offering.
In June 2022, we repaid the amount outstanding under our Barclays Bank
facility of £1.1m and subsequently cancelled the facility. Based on the base
rate at the time, there will be an annualised interest saving of approximately
£57,000. The Board made the decision that repaying the loan was the best
course of action given the Company's healthy cash balance and the base rates
rise.
People
In a tight labour market, we are pleased to say that the number of people we
employ is back to over 1,000 following the requisite redundancies during the
pandemic. However, with a competitive labour market, we continue to work hard
to engage our teams and ensure that we are competitive through continuously
reviewing training, progression and pay.
In June 2022, Harald Samúelsson, stepped up to become an Executive Director
with responsibility for food and operational support and, at the same time,
Wendy Dixon was appointed as an independent Non-Executive Director.
Wendy has spent two decades working with global brands, in a variety of
leadership roles in multiple markets. More recently she was appointed as
M&C Saatchi Group's first Chief Growth Officer in 2019 with responsibility
for leading internal collaboration, building the brand of the company
externally and bringing together both capabilities and talent for new and
existing clients to grow.
To focus and improve our food offering a new Head of Food joined the Company
in May 2022 with the initial focus being the development of our Christmas
menu.
Inflationary costs
To reduce the impact of food and labour challenges, our menu is constantly
being reviewed. We are working with existing and new suppliers to minimise
disruption and continue to re-tender. The well documented utility pressures
are unprecedented, and the hospitality industry is particularly badly
affected. The Government unveiled an energy support plan on 8 September 2022
to support businesses for six months, but the details have yet to be
announced. In the meantime, we are looking at ways of minimising our energy
usage and improving efficiencies.
Environmental, social and governance
The wellbeing and safety of our employees and customers is at the centre of
all that we do. We have also retained our focus on sustainability and the
environmental impact of the business, and we are an equal opportunities
employer.
Property negotiations
The Group has been successful in achieving rent reductions and lease
concessions across most of the estate for the period impacted by Covid-19 with
the final few agreements completed during H1 2022. We are continuing to review
all our leases with a view to disposing or re-gearing low performing sites.
Results
Revenue increased by 85% to £21.5m (H1 2021: £11.6m). In the period under
review, we have benefited from unrestricted dine-in sales and also grown our
takeaway and delivery business. However, we have seen a slowdown in the
second half due to our focus on dine-in and changing consumer habits. Revenue
for the comparative period in 2021 was severely impacted by the lockdown
restrictions.
The adjusted EBITDA for the period was £2.7m (H1 2021: £0.8m).
Operating profit before highlighted items was £0.4m (H1 2021: loss £1.4m).
We have reviewed the impairment provision across the right-of-use-assets and
fixed assets and have made a net provision of £1.6m (H1 2021: £nil).
After taking into account all non-trade adjustments, the Group has a stated
loss after tax for the period of £2.7m (H1 2021: loss £2.7m).
Cash flows and financing
Cash inflow from operations was £0.9m (H1 2021: £2.4m). Repayment of the
bank loan amounted to £1.25m during the period (H1 2021: drawn down of
£1.25m).
Overall, the net cash outflow for the period was £3m (H1 2021: inflow
£1.8m). As at 26 June 2022, the Group had net cash after the bank loan of
£8.0m (H1 2021: net cash of £8.6m). After allowing for deferred payments due
to creditors, net cash was £7.0m (H1 2021: net cash of £4.2m).
Going concern
The Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future. In
reaching this conclusion the Directors have considered the financial position
of the Group, together with its forecasts for the next 12 months from the date
of approval of these interim accounts and taking into account possible changes
in trading performance. The going concern basis of accounting has, therefore,
been adopted in preparing the interim financial report.
Outlook
Utility cost management and pressure on revenue as living costs continue to
rise will be our biggest challenges over the coming months, although we await
details of the Government's support package. We will endeavour to mitigate
all pressures carefully by continuing to focus on savings and customer
experience. Despite these uncertainties the Board remains confident of
managing current challenges and the Group will cautiously consider future
expansion opportunities for growth.
Finally thank you once again to all our people, shareholders, suppliers and
other stakeholders who continue to support us.
K Lassman
Chairman
Tasty plc
19 September 2022
Enquiries:
Tasty
plc
Tel: 020 7637 1166
Jonny Plant, Chief Executive
Cenkos Securities
Tel:
020 7397 8900
Katy Birkin/Mark Connelly
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.
Consolidated statement of comprehensive income
for the 26 weeks ended 26 June 2022 (unaudited)
Restated
26 weeks 26 weeks to 52 weeks
to Ended
26 June 27 June 26 December
2022 2021 2021
£'000 £'000 £'000
Revenue 21,522 11,629 34,909
Cost of sales (20,375) (14,526) (33,567)
Gross profit/(loss) 1,147 (2,897) 1,342
Other income 213 2,050 4,208
Total operating expenses (2,778) (628) 555
Operating profit/(loss) before highlighted items 445 (1,410) 4,112
Highlighted items (1,863) (65) 1,993
Operating (loss)/profit (1,418) (1,475) 6,105
Finance income 3 - -
Finance expense (1,249) (1,263) (2,497)
(Loss)/profit before tax (2,664) (2,738) 3,608
Income tax - - -
(Loss)/profit and total comprehensive income for period and attributable to (2,664) (2,738) 3,608
owners of the parent
(Loss)/profit per share attributable to the ordinary equity owners of the
parent
Basic (1.89p) (1.94p) 2.56p
Diluted (1.66p) (1.85p) 2.27p
The table below gives additional information to shareholders on key
performance indicators:
Post IFRS 16 Pre IFRS 16 Post IFRS 16 Pre IFRS 16
26 weeks 26 weeks to 26 weeks 26 weeks
to to to
26 June 26 June 27 June 27 June
2022 2022 2021 2021
£'000 £'000 £'000 £'000
EBITDA before highlighted items 2,733 101 824 (1,207)
Depreciation of PP&E and amortisation (958) (980) (663) (689)
Depreciation of right-of-use assets (IFRS16) (1,330) - (1,571) -
Operating profit/(loss) before highlighted items 445 (879) (1,410) (1,896)
Analysis of highlighted items Restated
26 weeks 26 weeks to 52 weeks ended
to
26 June 27 June 26 December
2022 2021 2021
£'000 £'000 £'000
Profit on disposal of property plant and equipment - - 3
Restructuring costs - - (7)
Impairment of right-of-use assets (1,258) - (1,347)
Impairment (charge)/release of property, plant and equipment
(304) - 3,207
Share based payments (31) (65) (120)
(Loss)/gain on lease modifications (270) - 257
Total highlighted items (1,863) (65) 1,993
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.
Consolidated statement of changes in equity
for the 26 weeks ended 26 June 2022 (unaudited)
Share Share Merger Retained Total
Capital Premium Reserve Deficit Equity
£'000 £'000 £'000 £'000 £'000
Balance at 26 December 2021 (restated) 6,061 24,254 992 (26,980) 4,327
Total comprehensive income for the period - - - (2,664) (2,664)
Share based payments - credit to equity - - - 31 31
Balance at 26 June 2022 6,061 24,254 992 (29,613) 1,694
Balance at 27 December 2020 6,061 24,251 992 (30,708) 596
Issue of ordinary shares - 3 - - 3
Total comprehensive income for the period - - - (2,738) (2,738)
Share based payments - credit to equity - - - 65 65
Balance at 27 June 2021 6,061 24,254 992 (33,381) (2,074)
Balance at 27 December 2020 6,061 24,251 992 (30,708) 596
Issue of ordinary shares - 3 - - 3
Total comprehensive income for the period - - - 3,608 3,608
Share based payments - credit to equity - - - 120 120
Balance at 26 December 2021 (restated) 6,061 24,254 992 (26,980) 4,327
In January 2021, Daniel Jonathan ("Jonny") Plant was awarded 15,676,640 'B'
shares in Tasty plc which can be converted to 'A' shares subject to
achievement of certain hurdle rates. These 'B' shares were issued at nominal
value of 0.00001 pence. The first hurdle was achieved, and 5,225,546 B
Ordinary Shares were converted into 5,225,546 new Ordinary Shares on 27 June
2022.
Consolidated balance sheet
At 26 June 2022 (unaudited)
Restated
26 weeks to 26 weeks 52 weeks ended
to
26 June 27 June 26 December
2022 2021 2021
£'000 £'000 £'000
Non-current assets
Intangible assets 28 30 28
Property, plant and equipment 17,282 15,098 18,026
Right-of-use- assets 34,639 38,337 36,006
Other non-current assets 65 129 105
Total non-current assets 52,014 53,594 54,165
Current assets
Inventories 1,995 1,834 2,103
Trade and other receivables 2,949 1,397 1,355
Cash and cash equivalents 8,010 9,884 11,005
Total current assets 12,954 13,115 14,463
Total assets 64,968 66,709 68,628
Current liabilities
Trade and other payables (10,336) (12,210) (10,493)
Lease liabilities (2,202) (3,620) (2,024)
Borrowings - (104) (313)
Total current liabilities (12,538) (15,934) (12,830)
Non-current liabilities
Provisions (335) (335) (297)
Lease liabilities (50,273) (51,288) (50,157)
Long-term borrowings - (1,146) (937)
Other payables (128) (80) (80)
Total non-current liabilities (50,736) (52,849) (51,471)
Total liabilities (63,274) (68,783) (64,301)
Total net assets/(liabilities) 1,694 (2,074) 4,327
Equity
Share capital 6,061 6,061 6,061
Share premium 24,254 24,254 24,254
Merger reserve 992 992 992
Retained deficit (29,613) (33,381) (26,980)
Total equity 1,694 (2,074) 4,327
Consolidated cash flow statement
for the 26 weeks ended 26 June 2022 (unaudited)
26 26 52
weeks to weeks to weeks ended
26 June 27 June 26 December
2022 2021 2021
£'000 £'000 £'000
Operating activities
Cash generated from operations 945 2,365 7,826
Net cash inflow from operating activities 945 2,365 7,826
Investing activities
Proceeds from sale of property, plant and equipment - - 3
Purchase of property, plant and equipment (516) (192) (544)
Interest received 3 - -
Net cash flows used in investing activities (513) (192) (541)
Financing activities
Net proceeds from issue of ordinary shares - 3 3
Bank loan receipts - 1,250 1,250
Bank loan repayment (1,250) - -
Finance expense (30) (26) (59)
Finance expense (IFRS 16) (1,219) (1,237) (2,438)
Principal paid on lease liabilities (928) (307) (3,064)
Net cash flows used in financing activities (3,427) (317) (4,308)
Net increase in cash and cash equivalents (2,995) 1,856 2,977
Cash and cash equivalents at beginning of the period 11,005 8,028 8,028
Cash and cash equivalents as at 26 June 2022 8,010 9,884 11,005
Notes to the condensed financial statements
for the 26 weeks ended 26 June 2022 (unaudited)
1 General information
Tasty plc is a public limited company incorporated in the United Kingdom under
the Companies Act (registration number 05826464). 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 AIM Market of the
London Stock Exchange ("AIM"). Copies of this Interim Report and 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
(http://www.dimt.co.uk) .
2 Basis of accounting
The condensed set of financial statements included in this interim financial
report has been prepared in accordance with IAS 34 'Interim Financial
Reporting', as adopted by the United Kingdom and accounting policies
consistent with International Financial Reporting Standards (IFRS) and
International Financial Reporting Interpretations Committee (IFRIC)
interpretations as endorsed by the United Kingdom. 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 26 June 2022 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 Financial Reporting
Council.
The financial information for the period ended 26 December 2021 does not
constitute the full statutory accounts for that period. The Annual Report and
Financial Statements for 2021 have been filed with the Registrar of Companies.
The Independent Auditors' Report on the Annual Report and Financial Statements
for 2021 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.
Use of judgements and estimates
In preparing these interim financial statements management has made judgements
and estimates that affect the application of accounting policies and
measurement of assets and liabilities, income and expense provisions. Actual
results may differ from these estimates.
Going concern
The Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future. In
reaching this conclusion the Directors have considered the financial position
of the Group, together with its forecasts for the next 12 months from the date
of approval of these interim accounts and taking into account possible changes
in trading performance. The Group monitors cash balances and impact of
inflation closely to ensure there is sufficient liquidity. Accordingly, the
Directors believe that it remains appropriate to prepare the financial
statements on a going concern basis.
IFRS 16 '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.
The Group first adopted IFRS 16 for its period starting 30 December 2019 using
the modified retrospective approach on transition, recognising leases at the
carried forward value had they been treated as such from inception, without
restatement of comparative figures. On adoption of IFRS 16, the Group
recognised right-of-use assets and lease liabilities in relation to the
restaurant sites it leases for its business.
All leases are accounted for by recognising a right-of-use asset and a lease
liability except for:
• Leases of low value assets, and
• Leases with a duration of 12 months or less.
Subsequent to initial measurement lease liabilities increase as a result of
interest charged at a constant rate on the balance outstanding and are reduced
for lease payments made. Right-of-use assets are amortised on a straight-line
basis over the remaining term of the lease.
Lessor accounting
Under IFRS 16, a lessor continues to classify leases as either finance leases
or operating leases and account for those two types of leases differently.
Based on an analysis of the Group's operating leases as at 26 June 2022 on the
basis of the facts and circumstances that exist at that date, the Directors of
the Group have assessed that the impact of this change has not had any impact
on the amounts recognised in the Group's consolidated financial statements.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease
liabilities for short-term leases that have a lease term of 12 months or less
and leases of low value assets. The Group recognises these payments as an
expense on a straight-line basis over the lease term. Currently the Group has
no low value assets or short-term leases.
Covid-19 related rent concessions
IFRS 16 defines a lease modification as a change in the scope of a lease, or
the consideration for a lease, that was not part of the original terms and
conditions of the lease. The Group has considered the Covid-19 related rent
concessions and applied the lease modifications accounting treatment, rather
than the practical expedient.
Impairments
All assets (ROU and fixed assets) are reviewed for impairment in accordance
with IAS 36 Impairment of Assets, when there are indications that the carrying
value may not be recoverable.
Assets are subject to impairment tests whenever events or changes in
circumstances indicate that their carrying amount may not be recoverable.
Where the carrying value of an asset or a cash generating unit (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. The
Group views each restaurant as a separate CGU. Value in use is calculated
using cash flows excluding outflows from financing costs over the remaining
life of the lease for the CGU discounted at 8% (2021: 6%), being the rate
considered to reflect the risks associated with the CGUs. A growth rate of 2%
has been applied (2021: 0.5%).
An impairment review was undertaken across the ROU assets and fixed assets
which resulted in a net impairment charge of £1.6m (2021: £nil). Where an
impairment reversal is recognised, the carrying amount of the asset will be
increased to its recoverable amount with the increase being recognised in the
income statement. This increased amount cannot exceed the carrying amount that
would have been determined, net of depreciation, had no impairment loss been
recognised for the asset in prior years.
The assumptions will be reviewed at year-end to ensure that the cashflow
expectations are in line with the latest outlook.
Other income
In accordance with IAS 20 (Accounting for Government Grants and Disclosure of
Government Assistance) guidelines, the Group has recognised the salary expense
as normal and recognised the grant income in profit and loss as the Group
becomes entitled to the grant.
Other income includes Government Coronavirus Job Retention Scheme ("CJRS") of
£nil (2021: £1.9m), sub-let property income of £0.2m (2021: £0.1m) and
Government Grants of £nil (2021: £1.8m).
3 Income tax
The income tax charge has been calculated by reference to the estimated
effective corporation tax and deferred tax rates of 19% (2021: 19%).
Tax charge £nil (2021: £nil).
4 Earnings per share
26 weeks to 26 weeks to Restated 52 weeks ended
26 June 27 June 26 December
2022 2021 2021
Pence Pence Pence
Basic (loss)/profit per ordinary share (1.89p) (1.94p) 2.56p
Diluted (loss)/profit per ordinary share (1.66p) (1.85p) 2.27p
26 June 2022 27 June 2021 26 December 2021
Number '000 Number '000 Number
'000
Profit/(loss) per share has been calculated using the numbers shown below:
Weighted average number of ordinary shares used as the denominator in
calculating basic earnings per share
141,090 141,090 141,090
Adjustments for calculation of diluted earnings per share:
Ordinary B shares 15,677 6,977 14,815
Options 3,265 - 3,265
Weighted average number of ordinary shares and potential ordinary shares used
as the denominator in calculating diluted earnings per share
160,032 148,067 159,170
Restated
26 June 2022 27 June 26 December 2021
2021
£'000 £'000 £'000
(Loss)/profit for the financial period
(2,664) (2,738) 3,608
The basic and diluted (loss)/profit per share figures are calculated by
dividing the net (loss)/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.
5 Reconciliation of result before tax to net cash generated from
operating activities
26 weeks to 26 weeks to Restated 52 weeks ended
26 June 27 June 26 December
2022 2021 2021
£'000 £'000 £'000
(Loss)/profit before tax (2,664) (2,738) 3,608
Finance income (3) - -
Finance expense 30 26 59
Finance expense (IFRS 16) 1,219 1,237 2,438
Share based payment charge 31 65 120
Depreciation of right-of-use assets (IFRS 16) 1,330 1,545 2,579
Depreciation of property, plant and equipment 956 687 1,297
Amortisation of intangible assets 2 2 3
Impairment charge/(release) of property, plant and equipment 304 - (3,207)
Impairment of Right-of-use assets 1,258 - 1,347
Profit from sale of property, plant and equipment - - (3)
Dilapidations provision charge 38 - -
Dilapidations provision utilisation - - (38)
(Increase)/decrease in inventories 108 (12) (282)
(Increase)/decrease in trade and other receivables (1,553) (34) 32
Increase/(decrease) in trade and other payables (111) 1,587 (127)
Net cash inflow from operating activities 945 2,365 7,826
6 Property, plant and equipment and right-of-use assets
Leasehold improvements Furniture fixtures and computer equipment Total fixed assets ROU assets Total
£'000 £'000 £'000 £'000 £'000
Cost
At 27 December 2020 37,176 9,892 47,068 53,446 100,514
Additions 145 399 544 951 1,495
Lease modification - - - (830) (830)
At 26 December 2021 37,321 10,291 47,612 53,567 101,179
Additions 249 267 516 - 516
Lease modification - - - 1,221 1,221
At 26 June 2022 37,570 10,558 48,128 54,788 102,916
Depreciation
At 27 December 2020 23,834 7,662 31,496 13,635 45,131
Provided for the period 743 554 1,297 3,142 4,439
Impairments 157 100 257 (257) -
At 26 December 2021 (as previously stated) 24,734 8,316 33,050 16,520 49,570
Prior year adjustment (2,677) (787) (3,464) 1,041 (2,423)
At 26 December 2021 (as restated) 22,057 7,529 29,586 17,561 47,147
Provided for the period 587 369 956 1,330 2,286
Impairments 295 9 304 1,258 1,562
At 26 June 2022 22,939 7,907 30,846 20,149 50,995
Net book value
At 26 June 2022 14,631 2,651 17,282 34,639 51,921
At 26 December 2021 (as restated) 15,264 2,762 18,026 36,006 54,032
Prior year adjustment
The prior year adjustment relates to the treatment of depreciation on impaired
assets and reversal of impairment.
The depreciation charge on ROU assets should have been reduced for the
impairment to allow depreciation to run to the end of the life of the lease.
In addition, when reversing an impairment that depreciation should be
recognised if the amount at which the asset would have been carried (net of
depreciation) had there been no impairment or the lower or the irrecoverable
amount.
52 weeks 52 weeks
Ended 26 December (as restated) Ended 26 December (as previously stated)
Adjustment
2021 2021 2021
£'000 £'000 £'000
Cost of sales (33,567) 563 (34,130)
Operating expenses 555 1,860 (1,305)
Highlighted items (included within Operating expenses) 1,993 1,860 133
Profit and total comprehensive income for the period 3,608 2,423 1,185
At 26 December 2021
(as restated)
At 26 December 2021
Adjustment (as previously stated)
2021 2021 2021
£'000 £'000 £'000
Non-current assets
Property, plant and equipment 18,026 3,464 14,562
Right-of-use assets 36,006 (1,041) 37,047
Equity
Retained deficit (26,980) 2,423 (29,403)
Total equity 4,327 2,423 1,904
7 Leases
26 26 52
weeks to weeks to weeks ended
26 June 27 June 26 December
2022 2021 2021
£'000 £'000 £'000
Current
Lease liabilities 2,202 3,620 2,024
Non-current
Lease liabilities 50,273 51,288 50,157
Total 52,475 54,908 52,181
Due within one year 2,202 3,620 2,024
Due two to five years 12,792 15,362 12,371
Due over five years 37,481 35,926 37,786
Total 52,475 54,908 52,181
Lease liabilities are measured at the present value of the remaining lease
payments, discounted using the Group's incremental borrowing rate of 4.5% and
the Bank of England (BoE) base rate at the time of any lease modification or a
new lease. The average rate used for modification in 2022 was 5.1% (2021:
4.6%).
The lease liabilities as at 26 June 2022 were £52.5m (2021: £54.9m).
The right-of-use assets all relate to property leases. The right-of-use assets
as at 26 June 2022 were £34.6m (2021: £38.3m). During the period ended 26
June 2022 the Group made a provision for impairment of the right-of-use assets
against a number of sites totalling £1.3m (2021: £nil).
Included in profit and loss for the period is £1.3m depreciation of
right-of-use assets and £1.2m financial expenses on lease liabilities.
8 Borrowings
26 weeks to 26 weeks to 52 weeks ended
26 June 2022 27 June 2021 26 December 2021
£'000 £'000 £'000
Current
Secured bank borrowings - 104 313
Non-current
Secured bank borrowings - 1,146 937
Total - 1,250 1,250
The £1.25m loan was a four-year term loan which had a capital repayment
holiday of 12 months and carried interest at a rate of 4.5% per annum over the
Bank of England Base Rate. The outstanding loan of £1.25m was repaid in full
during the period.
9 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 30 December 2019 1,647 55,761 800 852 59,060
Cashflow (800) (852) (3,387)
(1,735) -
Addition/(decrease) to lease liability
2,992 (3,542) - - (550)
Net debt as at 27 December 2020 2,904 52,219 - - 55,123
Cashflow (3,064) - 313 937 (1,814)
Addition/(decrease) to lease liability 2,184 (2,062) - - 122
Net debt as at 26 December 2021 2,024 50,157 313 937 53,431
Cashflow (927) - (313) (937) (2,177)
Addition/(decrease) to lease liability 1,105 116 - - 1,221
Net debt as at 26 June 2022 2,202 50,273 - - 52,475
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