REG - Tasty PLC - Preliminary Results <Origin Href="QuoteRef">TAST.L</Origin> - Part 2
28/03/2017 07:06
- Part 2: For the preceding part double click ID:nRSb6744Aa
2016 2015
Number '000 Number '000
Earnings per share have been calculated using the numbers shown below:
Weighted average ordinary shares (basic) 54,314 53,189
Dilutive shares to be issued in respect of option granted 1,333 697
Weighted average ordinary shares (diluted) 55,647 53,886
2016 2015
£'000 £'000
Profit for the financial period (848) 2,467
Due to the loss created by the impairment of PPE, all share options are
considered anti-dilutive. 3,063,635 share options would otherwise be
considered dilutive (2015 - 1,263,785). In the previous period 2,900,000
share options were excluded when calculating the adjusted diluted EPS as they
were anti-dilutive.
11 Dividend
No final dividend has been proposed by the Directors (2015 - nil).
12 Intangibles
Trademarks Goodwill Total
£'000 £'000 £'000
At 28 December 2014 3 441 444
Additions 28 - 28
Amortisation of trademarks (2) - (2)
At 27 December 2015 29 441 470
Additions 5 - 5
Amortisation of trademarks (2) - (2)
At 1 January 2017 32 441 473
The recoverable amount of goodwill has been determined on a value in use
basis. This has been based on the performance of the units since they were
acquired and management's forecasts, which assume the sites will perform at
least as well as the market generally. The forecast cash flows cover a period
of 5 years, assuming a growth rate of 2% and are discounted at a rate of 10%.
Management has performed sensitivity testing on all inputs to the model and
noted no highly sensitive variables. Goodwill has been allocated to CGUs as
follows;
1 January 2017 27 December 2015
£'000 £'000
Shaftesbury Avenue 196 196
Cambridge 130 130
Stratford-upon-avon 65 65
Loughton 25 25
Billiericay 25 25
441 441
13 Property, plant and equipment
Leasehold improvements Furniture fixtures and computer equipment Assets in the course of construction Total
£'000 £'000 £'000 £'000
Cost
At 28 December 2014 19,941 6,965 196 27,102
Additions 7,442 2,134 239 9,815
Disposals - - - -
Transfers 115 49 (164) -
At 27 December 2015 27,498 9,148 271 36,917
Additions 9,510 1,626 187 11,323
Disposals - - - -
Transfers 237 - (237) -
At 1 January 2017 37,245 10,774 221 48,240
Depreciation
At 28 December 2014 4,154 2,557 - 6,711
Provided for the period 958 752 - 1,710
Disposals - - -
Impairment reversal - - -
At 27 December 2015 5,112 3,309 - 8,421
Provided for the period 1,159 884 - 2,043
Impairments 3,322 254 - 3,576
At 1 January 2017 9,593 4,447 - 14,040
Net book value
At 1 January 2017 27,652 6,327 221 34,200
At 27 December 2015 22,386 5,839 271 28,496
14 Prepaid operating leases
1 January 2017 27 December 2015
£'000 £'000
Held within current assets 124 140
Held within non-current assets 1,861 1,936
1,985 2,076
Prepaid operating leases represent lease premiums paid on the acquisition of
sites, amortised evenly over the lease term.
15 Investments
£'000
Company
At 28 December 2014 2,652
Share based payment in respect of subsidiary 133
At 27 December 2015 2,785
Share based payment in respect of subsidiary 100
At 1 January 2017 2,885
The Company's investments are wholly related to a 100% ordinary shareholding
in Took Us a Long Time Limited, a company registered in England and Wales with
registered offices at 32 Charlotte Street, London. Took Us a Long Time
Limited is primarily engaged with the operation of restaurants.
16 Inventories
1 January 2017 27 December 2015
£'000 £'000
Raw materials and consumables 927 774
Crockery and utensils 1,538 1,038
2,465 1,812
In the Directors' opinion there is no material difference between the
replacement cost of stocks and the amounts stated above. Inventory purchased
and recognised as an expense in the period is £10,560,000 (2015 -
£8,410,000).
17 Trade and other receivables
1 January 2017 27 December 2015
£'000 £'000
Trade receivables 350 179
Prepayments and other receivables 4,318 2,498
Total trade and other receivables 4,668 2,677
Less non-current portion (278) (148)
4,390 2,529
Company
Amounts due from subsidiary 25,043 16,420
Total trade and other receivables 25,043 16,420
Classified as non-current 25,043 16,420
During the year the Company issued shares and passed the net proceeds of
£8,630,000 (2015 - £52,000) to its subsidiary.
18 Trade and other payables
1 January 2017 27 December 2015
£'000 £'000
Trade payables 5,376 3,309
Taxations and social security 1,640 1,142
Accruals and deferred income 1,718 2,810
Other payables 429 482
9,163 7,743
19 Provisions
1 January 2017 27 December 2015
£'000 £'000
At 27 December 2015 45 55
Utilisation in period (10) (10)
At 1 January 2017 35 45
20 Deferred tax
1 January 2017 27 December 2015
£'000 £'000
At 27 December 2015 (882) (615)
Profit and loss charge (84) (267)
(966) (882)
Accelerated capital allowances (966) (882)
Tax losses carried forward - -
At 1 January 2017 (966) (882)
21 Borrowings
1 January 2017 27 December 2015
£'000 £'000
Current
Secured bank borrowings - 750
- 750
Non-current
Secured bank borrowings 7,000 5,000
7,000 5,000
7,000 5,750
Maturity of secured bank borrowings
Due within one year - 881
Due In more than one year but less than two years 738 530
Due In more than two years but less than five years 6,629 4,741
7,367 6,152
Future interest payments (367) (402)
7,000 5,750
Bank borrowings comprise of a term loan of £7,000,000 (2015 - £5,000,000) and
an additional committed facility of £5,000,000 (2015 - £3,000,000) of which
£nil was drawn down at the balance sheet date. There were no instances of
default, including covenant terms, in either the current or prior period. The
bank loan is secured by a charge on Group assets and a cross guarantee from
the parent and subsidiary company. The Company's maximum exposure to this
loan is shown above.
22 Share capital
Number £'000
Authorised, issued, called up and fully paid:
At 28 December 2014 53,048,436 5,305
Exercise of share options 166,888 17
At 27 December 2015 53,215,324 5,322
Exercise of share options 320,172 32,017
Share placing 6,210,000 621,000
At 1 January 2017 59,745,496 5,975
23 Reserves
Share capital comprises of the nominal value of the issued shares.
Share premium reserve is the amount subscribed in excess of the nominal value
of shares net of issue costs.
Cumulative gains and losses recognised in the income statement are shown in
the Retained deficit reserves, together with other items taken direct to
equity.
The merger reserve is the difference between the nominal value of shares
issued and the nominal value of shares acquired on merger.
24 Capital commitments
At the balance sheet date the Group and the Company had no capital commitments
which were contracted but not provided for (2015 - £nil). Capital commitments
relate to committed expenditure in respect of restaurants under construction.
25 Operating lease commitments
The total future value of minimum lease payments under non-cancellable
operating leases are shown below. The receipts are from sub-tenants on
contractual sub-leases, the net position represents the cash liability of the
Group.
1 January 2017 27 December 2015
£'000 £'000
Within one year: payments 5,624 4,465
Within one year: receipts (230) (230)
5,394 4,235
Within two to five years: payments 22,170 17,679
Within two to five years: receipts (920) (920)
21,250 16,759
Over five years: payments 70,644 57,161
Over five years: receipts (3,417) (3,647)
67,227 53,514
93,871 74,508
26 Pensions
The Group, last year, made contributions of £nil to the personal pension plan
of the Directors. The total amount paid during the period was £nil. During
the year the Group made contributions to employee pensions of £64,000 (2015 -
£52,000).
27 Share based payments
Weighted average exercise price Number
(pence) '000
At 28 December 2014 80.6 3,114
Exercised 31.3 (167)
Cancelled 112.0 (20)
Granted 114.0 1,237
At 27 December 2015 92.4 4,164
Exercised 84.7 (665)
Cancelled 126.1 (45)
Granted 146.7 210
At 1 January 2017 96.5 3,664
The exercise price of options outstanding at the end of the period ranged
between 31.5p and 147p (2015 - 31.5p and 139p) and their weighted average
remaining contractual life was 7 years (2015 - 8 years).
Of the total number of options outstanding at the end of period 2,240,000
(2015 - 2,505,000) had vested and were exercisable at the end of the period
with a weighted average exercise price of 81p.
The market price of the Company's ordinary shares as at 1 January 2017 was
144p and the range during the financial year was from 136.5p to 195p.
On 11 November 2016 the Company issued 179,850 options in the Company Share
Option Plan ("CSOP"). These options have an exercise price of 147p, a vesting
period of 3 years and a contractual life of 10 years. On 6 December 2016 the
Company issued a further 30,000 options in the CSOP with an exercise price of
145p, a vesting period of 3 years and a contractual life of 10 years.
In the current period 665,000 (2015 - 166,888) options were exercised. The
weighted average share price at the date of exercise was 84.7p (2015 -
31.3p).
The following information is relevant in the determination of the fair value
of options granted during the period under the equity settled shared based
remuneration schemes operated by the Group.
CSOP CSOP
Option pricing model used Binomial Binomial
Weighted average share price at grant date (pence) 147.0 145.0
Exercise price 147.0 145.0
Vesting period 3 years 3 years
Contractual life 10 years 10 years
Expected volatility 23% 23%
Expected dividend growth rate 0% 0%
Staff turnover 12% 12%
The volatility assumption, measured at the standard deviation of expected
share price returns, is based on a statistical analysis of daily share prices
over the last three periods.
28 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
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
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.
Trade and other receivables, which are neither past due nor impaired, are
disclosed in note 17 and represent the maximum credit exposure for the Group.
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.
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.
The Group seeks to manage its financial risk to ensure that sufficient
liquidity is available to meet foreseeable needs both in the short and long
term (note 21). The Board consider detailed cash flow forecasts together with
future obligations from capital projects in progress and the resulting impact
on its cash balances.
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 financial
instruments. This is the risk that the future cash flows of the financial
instrument will fluctuate because of changes in the interest rates.
The Group is exposed to cash flow interest rate risk from long term borrowings
at variable rate. The Group does not seek to fix interest rates on these
borrowings because the Board considers the exposure to the interest rate risk
to be acceptable.
Surplus funds are invested in interest bearing, instant access bank accounts.
The Group also holds short term deposit accounts in relation to tenant
deposits received on sublet sites.
Loans and borrowings
The Group has a loan facility with Barclays Bank Plc. Under the terms of the
facility the Group may borrow up to a maximum of £5.0m on flexible loan terms
and £7.0m on a 5 year fixed term. Interest on this facility is charged at
1.7% above LIBOR plus a variable charge for mandatory associated costs of the
lender for all amounts drawn down, with a 0.68% charge on any amounts of the
facility that is not drawn down.
At 1 January 2017 if the Bank of England base rate had been 1% higher / lower
with all other variables held constant this would not have resulted in any
significant variance in the profit or loss or net assets of the Group.
The bank loans are secured by a legal charge over the issued share capital of
the Group companies, a legal charge over all the Group's trading sites, and a
cross guarantee between Group companies.
Capital disclosures
The Group considers its capital to comprise the ordinary share capital, share
premium and retained earnings.
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 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.
29 Related party transactions
The Directors are considered to be the key management personnel. Details of
directors remuneration is shown in note 8.
The Group pays rent and associated insurance to a number of companies
considered related parties by virtue of the interests held by the directors in
such companies. The Group also reimburses expenses incurred by such companies
on behalf of the Group. The Group receives income from related parties for
fees in relation to consultancy services offered.
53 weeks ended 1 January 2017 52 weeks ended 27 December 2015
£'000 £'000
Rent and insurance
- Kropifko Properties Ltd (380) (371)
- KLP Partnership (152) (336)
- ECH Properties Ltd (68) (69)
- Proper Proper T Ltd (105) -
Expenses reimbursed (8) (6)
Income - -
Balance due to related parties - 4
Balance due from related parties - -
The rent paid to related parties are considered to be a reasonable reflection
of the market rate for the properties.
30 Reconciliation of profit before tax to net cash inflow from operating
activities
53 weeks ended 1 January 2017 52 weeks ended 27 December 2015
£'000 £'000
Group
Profit before tax (88) 3,067
Finance income (1) (9)
Finance expense 214 116
Share based payment charge 100 133
Depreciation and impairment 6,034 1,710
Amortisation of intangible assets 2 2
Onerous lease provision movement (10) (10)
(Increase) / decrease in inventories (653) (761)
(Increase) / decrease in trade and other receivables (1,330) (535)
Increase / (decrease) in trade and other payables 1,100 1,363
5,368 5,076
This information is provided by RNS
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