For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230927:nRSa7382Na&default-theme=true
RNS Number : 7382N Tasty PLC 27 September 2023
27 September 2023
Tasty plc
("Tasty", the "Group" or the "Company")
Unaudited Interim Results for the 26 weeks ended 25 June 2023
Tasty (AIM: TAST), the owner and operator of restaurants in the casual dining
sector, announces its interim results for the 26 week period ended 25 June
2023.
Key Points:
· Revenue of £21.7m (H1 2022: £21.5m); increase of 0.9%
· Adjusted EBITDA(1) of £1.1m (H1 2022: £2.7m)
· Impairment charge of £4.0m (H1 2022: £1.6m)
· Loss after tax for the period of £6.2m (H1 2022: loss £2.7m)
· Cash balance of £2.8m (H1 2022: £8.0m)
· 52 of 54 restaurants traded through the period
· Like-for-like sales compared with 2022 up 1.4%
· Staff retention improving despite challenges
· Cost of living crisis and interest rate increases expected to further
impact revenue in H2 2023
· Inflationary pressure on labour, food and utilities continues to
adversely affect profitability
(1 ) Adjusted for depreciation,
amortisation and share based payments.
Chairman's statement
Introduction
2023 traded ahead of 2022 for the corresponding period with like-for-like
sales up 1.4% against the first half of 2022. The first quarter performed
strongly, with like-for-like sales up 3.1% against the previous year which was
impacted by Omicron, which unfortunately was not matched by the second quarter
which disappointed with like for like sales down 0.3%. However, summer trading
exceeded the Board's expectations.
Nonetheless, the casual dining market continues to face inflationary pressures
on food, labour and utility costs. The cost-of-living crisis and interest
rates are at their worst for many years, directly reducing the discretionary
spend of our customers. We continue to navigate through challenging times
and although this is expected to continue through H2 2023 we are continuing to
adapt the business to mitigate the cost increases and reduced trading
performance.
We have focused on optimising the current estate by selling or surrendering
leases in the tail of the estate and seeking to turn around the
underperforming sites. One under-performing restaurant was returned to the
landlord after the period end in August 2023.
The Board was pleased to welcome Gordon Browne as Finance Director (currently
a non-Board appointment) in May 2023. Gordon formerly held senior finance
roles at Oakman Group plc, Chopstix Group and Park Chinois.
People
Labour costs have continued to increase; however, staff shortages have been
alleviated to a certain extent as the hospitality sector has shrunk and our
recruitment, training and people engagement has significantly improved. As a
result, staff retention and labour shortages are not as challenging as
previously experienced. However, with a competitive labour market, we
continue to motivate and develop our teams and ensure that we are competitive
through regular training, progression and pay reviews.
Inflationary costs
Despite food inflation continuing to rise we have improved our food margin by
1.5% compared to H2 2022 by constantly refreshing our offer and menu choice,
whilst still delivering good value through close analysis of market trends and
competitive pricing including, a set price two and three course lunch offer.
Environmental, social and governance
The wellbeing and safety of our employees and customers is at the centre of
everything we do. We have also retained our focus on sustainability and the
environmental impact of the business, and we remain an equal opportunity
employer.
Results
Revenue increased by 0.9% to £21.7m (H1 2022: £21.5m). Q1 performed ahead of
the Board's expectations, however, the second quarter slowed and was flat
against 2022. Delivery sales continue to decline as expected, in line with
the market as customer habits swing back to dine-in.
The adjusted EBITDA for the period was £1.1m (H1 2022: £2.7m).
The main reasons for the reduction in EBITDA are due to Covid related support
falling away in terms of VAT reductions, rent and rate concessions as well as
utility price increases.
Operating loss before highlighted items was £1.0m (H1 2022: profit £0.4m).
We have reviewed the impairment provision across the right-of-use-assets and
fixed assets and have made a net provision of £4.0m allowing for a number of
poorly performing sites (H1 2022: £1.6m).
After taking into account of all non-trade adjustments, the Group reports a
loss after tax for the period of £6.2m (H1 2022: loss £2.7m).
Cash flows and financing
Cash outflow from operations was £1.5m (H1 2022: inflow £0.9m). Our bank
loan of £1.25m was fully repaid in H1 2022 and the Company remains debt free.
Overall, the net cash outflow for the period was £4.2m (H1 2022: outflow
£3m). As at 25 June 2023, the Group had net cash of £2.8m (H1 2022: net cash
of £8.0m).
Going concern
The Directors have a reasonable expectation that the Group has sufficient
resources to continue in 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 coming 12 months and taking into
account possible changes in its trading performance. The going concern basis
of accounting has, therefore, been adopted in preparing this interim financial
report.
Outlook
In these uncertain times we continue to remain cautious in our approach.
Retention of staff and cost control is a key priority, and the Board remains
cautiously confident of managing current challenges.
Finally, and most importantly, we would like to thank all our people,
shareholders, suppliers and other stakeholders for their continued support
throughout these difficult times.
Change of Name of Nominated Adviser and Broker
The Company also announces that its nominated adviser and broker has changed
its name to Cavendish Securities plc (formerly Cenkos Securities plc)
following completion of its own corporate merger.
K Lassman
Chairman
Tasty plc
26 September 2023
Enquiries:
Tasty
plc
Tel: 020 7637 1166
Jonny Plant, Chief Executive
Cavendish Securities
Tel:
020 7220 0500
Katy Birkin/George Lawson
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 25 June 2023 (unaudited)
26 weeks 26 weeks to 52 weeks
to Ended
25 June 26 June 25 December
2023 2022 2022
£'000 £'000 £'000
Revenue 21,724 21,522 44,027
Cost of sales (21,843) (20,375) (44,123)
Gross (loss)/profit (119) 1,147 (96)
Other income 159 213 414
Total operating expenses (5,184) (2,778) (4,370)
Operating (loss)/profit before highlighted items (1,018) 445 (1,687)
Highlighted items (4,126) (1,863) (2,365)
Operating loss (5,144) (1,418) (4,052)
Finance income 62 3 41
Finance expense (1,157) (1,249) (2,421)
Loss before tax (6,239) (2,664) (6,432)
Loss and total comprehensive income for period and attributable to owners of (6,239) (2,664) (6,432)
the parent
Loss per share attributable to the ordinary equity owners of the parent
Basic (4.26p) (1.89p) (4.40p)
Diluted (3.82p) (1.66p) (4.03p)
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
25 June 25 June 26 June 26 June
2023 2023 2022 2022
£'000 £'000 £'000 £'000
EBITDA before highlighted items 1,133 (1,510) 2,733 101
Depreciation of PP&E and amortisation (875) (908) (958) (980)
Depreciation of right-of-use assets (IFRS16) (1,276) - (1,330) -
Operating (loss)/profit before highlighted items (1,018) (2,418) 445 (879)
Analysis of highlighted items
26 weeks 26 weeks to 52 weeks ended
to
25 June 26 June 25 December
2023 2022 2022
£'000 £'000 £'000
Loss on disposal of property plant and equipment - - (154)
Exceptional cost - restructuring (56) - (14)
Impairment of right-of-use assets
(2,584) (1,258) (2,153)
Impairment charge of property, plant and equipment
(1,376) (304) (180)
Share based payments (12) (31) (58)
Pre-opening costs - - (51)
(Loss)/gain on lease modifications (98) (270) 245
Total highlighted items (4,126) (1,863) (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.
Consolidated statement of changes in equity
for the 26 weeks ended 25 June 2023 (unaudited)
Share Share Merger Retained Total
Capital Premium Reserve Deficit Equity
£'000 £'000 £'000 £'000 £'000
Balance at 25 December 2022 6,061 24,254 992 (33,355) (2,048)
Total comprehensive income for the period
- - - (6,239) (6,239)
Share based payments - credit to equity - - - 12 12
Balance at 25 June 2023 6,061 24,254 992 (39,582) (8,275)
Balance at 26 December 2021 (restated) 6,061 24,254 992 (26,981) 4,326
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 (29,614) 1,693
Balance at 26 December 2021 (restated) 6,061 24,254 992 (26,981) 4,326
Total comprehensive income for the period - - - (6,432) (6,432)
Share based payments - credit to equity - - - 58 58
Balance at 25 December 2022 6,061 24,254 992 (33,355) (2,048)
Consolidated balance sheet
At 25 June 2023 (unaudited)
26 weeks to 26 weeks 52 weeks ended
to
25 June 26 June 25 December
2023 2022 2022
£'000 £'000 £'000
Non-current assets
Intangible assets 32 28 25
Property, plant and equipment 15,255 17,282 17,332
Right-of-use- assets 29,184 34,639 32,875
Other non-current assets 65 65 65
Total non-current assets 44,536 52,014 50,297
Current assets
Inventories 2,013 1,994 2,191
Trade and other receivables 2,499 2,949 1,633
Cash and cash equivalents 2,777 8,010 7,002
Total current assets 7,289 12,953 10,826
Total assets 51,825 64,967 61,123
Current liabilities
Trade and other payables (10,617) (10,336) (12,393)
Lease liabilities (1,993) (2,202) (1,953)
Total current liabilities (12,610) (12,538) (14,346)
Non-current liabilities
Provisions (342) (335) (339)
Lease liabilities (47,044) (50,273) (48,358)
Other payables (104) (128) (128)
Total non-current liabilities (47,490) (50,736) (48,825)
Total liabilities (60,100) (63,274) (63,171)
Total net (liabilities)/assets (8,275) 1,693 (2,048)
Equity
Share capital 6,061 6,061 6,061
Share premium 24,254 24,254 24,254
Merger reserve 992 992 992
Retained deficit (39,582) (29,614) (33,355)
Total equity (8,275) 1,693 (2,048)
Consolidated cash flow statement
for the 26 weeks ended 25 June 2023 (unaudited)
26 26 52
weeks to weeks to weeks ended
25 June 26 June 25 December
2023 2022 2022
£'000 £'000 £'000
Operating activities
Cash generated from operations (1,506) 945 4,444
Net cash inflow from operating activities (1,506) 945 4,444
Investing activities
Purchase of property, plant and equipment (181) (516) (1,645)
Interest received 62 3 41
Net cash flows used in investing activities (119) (513) (1,604)
Financing activities
Bank loan repayment - (1,250) (1,250)
Finance expense (1,157) (1,249) (2,421)
Principal paid on lease liabilities (1,443) (928) (3,172)
Net cash flows used in financing activities (2,600) (3,427) (6,843)
Net increase in cash and cash equivalents (4,225) (2,995) (4,003)
Cash and cash equivalents at beginning of the period 7,002 11,005 11,005
Cash and cash equivalents as at 25 June 2023 2,777 8,010 7,002
Notes to the condensed financial statements
for the 26 weeks ended 25 June 2023 (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 25 June 2023 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 25 December 2022 does not
constitute the full statutory accounts for that period. The Annual Report and
Financial Statements for 2022 have been filed with the Registrar of Companies.
The Independent Auditors' Report on the Annual Report and Financial Statements
for 2022 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 the 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.
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 25 June 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.
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 9% (2022: 8%), being the
rate considered to reflect the risks associated with the CGUs. A growth rate
of 1.0% has been applied (2022: 2%).
An impairment review was undertaken across the ROU assets and fixed assets
which resulted in a net impairment charge of £4.0m (2022: £1.6m). 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.
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:
26 weeks to 26 weeks to 52 weeks ended 25 December
25 June 26 June
2023 2022 2022
£'000 £'000 £'000
Sale of goods and services: dine-in 19,401 18,862 39,004
Sale of goods and services: delivery and takeaway 2,323 2,660 5,023
21,724 21,522 44,027
An analysis of the Group's other income is as follows:
26 weeks to 26 weeks to 52 weeks ended 25 December
25 June 26 June
2023 2022 2022
£'000 £'000 £'000
Sub-let site rental income 132 181 362
Other 27 32 52
159 213 414
4 Income tax
The income tax charge has been calculated by reference to the estimated
effective corporation tax and deferred tax rates of 19% (2022: 19%).
Tax charge £nil (2022: £nil).
5 Earnings per share
26 weeks to 26 weeks 52 weeks ended
to
25 June 26 June 25 December
2023 2022 2022
Pence Pence Pence
Basic loss per ordinary share (4.26p) (1.89p) (4.40p)
Diluted loss per ordinary share (3.82p) (1.66p) (4.03p)
25 June 2023 26 June 2022 25 December 2022
Number '000 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
calculating basic earnings per share
146,315 141,090 146,315
Adjustments for calculation of diluted earnings per share:
Ordinary B shares 10,451 15,677 10,451
Options 6,400 3,265 2,975
Weighted average number of ordinary shares and potential ordinary shares used
as the denominator in calculating diluted earnings per share
163,166 160,032 159,741
25 June 2023 26 June 25 December 2022
2022
£'000 £'000 £'000
Loss for the financial period
(6,239) (2,664) (6,432)
The basic and diluted Loss per share figures are calculated by dividing the
net loss 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.
6 Reconciliation of result before tax to net cash generated from
operating activities
26 weeks to 26 weeks to 52 weeks
ended
25 June 26 June 25 December
2023 2022 2022
£'000 £'000 £'000
Loss before tax (6,239) (2,664) (6,432)
Finance income (62) (3) (41)
Finance expense - 30 30
Finance expense (IFRS 16) 1,157 1,219 2,391
Share based payment charge 12 31 58
Depreciation of right-of-use assets (IFRS 16) 1,276 1,330 2,641
Depreciation of property, plant and equipment 874 956 1,664
Amortisation of intangible assets 2 2 3
Impairment charge of property, plant and equipment 1,376 304 542
Impairment of Right-of-use assets 2,584 1,258 1,791
Profit from sale of property, plant and equipment - - 154
Dilapidations provision charge 3 38 42
Other non cash - - (21)
Decrease/(Increase) in inventories 177 108 (88)
(Increase) in trade and other receivables (866) (1,553) (238)
Increase/(decrease) in trade and other payables (1,800) (111) 1,948
Net cash (outflow)/inflow from operating activities (1,506) 945 4,444
7 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 26 December 2021 37,321 10,291 47,612 53,567 101,179
Additions 709 936 1,645 - 1,645
Lease modification - - - 1,301 1,301
Disposals (181) (334) (515) (50) (565)
At 25 December 2022 37,849 10,893 48,742 54,818 103,560
Additions 46 127 173 - 173
Lease modification - - - 169 169
At 25 June 2023 37,895 11,020 48,915 54,987 103,902
Depreciation
At 26 December 2021 (as restated) 22,057 7,529 29,586 17,562 47,148
Provided for the period 981 683 1,664 2,641 4,305
Impairments 232 (52) 180 2,153 2,333
Disposals (75) (307) (382) (51) (433)
At 25 December 2022 (as previously stated) 23,195 7,853 31,048 22,305 53,353
Impairment reclassification 267 95 362 (362) -
At 25 December 2022 (as restated) 23,462 7,948 31,410 21,943 53,353
Provided for the period 507 367 874 1,276 2,150
Impairments 1,187 189 1,376 2,584 3,960
At 25 June 2023 25,156 8,504 33,660 25,803 59,463
Net book value
At 25 June 2023 12,739 2,516 15,255 29,184 44,439
At 25 December 2022 (as restated) 14,387 2,945 17,332 32,875 50,207
8 Leases
26 26 52
weeks to weeks to weeks ended
25 June 26 June 25 December
2023 2022 2022
£'000 £'000 £'000
Current
Lease liabilities 1,993 2,202 1,953
Non-current
Lease liabilities 47,044 50,273 48,358
Total 49,037 52,475 50,311
Due within one year 1,993 2,202 1,953
Due two to five years 9,586 12,792 11,386
Due over five years 37,458 37,481 36,972
Total 49,037 52,475 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 8.0% (2022:
5.1%).
The lease liabilities as at 25 June 2023 were £49.0m (2022: £52.5m).
The right-of-use assets all relate to property leases. The right-of-use assets
as at 25 June 2023 were £29.2m (2022: £34.6m). During the period ended 25
June 2023 the Group made a provision for impairment of the right-of-use assets
against a number of sites totalling £2.6m (2022: £1.3m).
Included in profit and loss for the period is £1.2m depreciation of
right-of-use assets and £1.2m financial expenses on lease liabilities.
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 27 December 2020 2,904 52,219 - - 55,123
Cashflow 313 937 (1,814)
(3,064) -
Addition/(decrease) to lease liability
2,184 (2,062) - - 122
Net debt as at 26 December 2021 2,024 50,157 313 937 53,431
Cashflow (3,172) - (313) (937) (4,422)
Addition/(decrease) to lease liability 3,101 (1,799) - - 1,302
Net debt as at 25 December 2022 1,953 48,358 - - 50,311
Cashflow (1,443) - - - (1,443)
Addition/(decrease) to lease liability 1,483 (1,314) - - 169
Net debt as at 25 June 2023 1,993 47,044 - - 49,037
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR QQLFLXKLXBBL