REG - Various Eateries PLC - Final Results
07/03/2022 07:00
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RNS Number : 7776D Various Eateries PLC 07 March 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET
ABUSE REGULATION (EU No. 596/2014) ("MAR"). THIS INSIDE INFORMATION IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN
7 March 2022
VARIOUS EATERIES PLC
("Various Eateries" or "the Company"
and with its subsidiaries "the Group")
Final Results
53-week period ended 3 October 2021
A year of solid progress and well-positioned for the future
Various Eateries PLC, the owner, developer and operator of all day club,
restaurant and hotel sites in the United Kingdom, announces its results for
the 53 weeks ended 3 October 2021.
Highlights
· Very strong trading post-reopening facilitated by large outdoor
spaces
o Better than expected Coppa Club estate like-for-like growth of +21% from
full reopening on 17 May 2021 to period end (compared to 2019)
o Several Coppa Club sites delivered multiple record weekly and monthly
sales performances in the period
o Encouraging reopening performance from Tavolino site in central London,
building to positive monthly like-for-like trading in September 2021 (compared
to 2019)
o Continued mitigation of well-publicised industry issues
· Resumption of premium site roll-out programme
o Opened two new prime location sites in the period - Coppa Club Cobham
(December 2020) and Coppa Club Clifton Village (July 2021) - with both
performing ahead of internal budgets
o Appointed Property Director, Raj Manek (non-board position) to accelerate
site acquisition programme
· Encouraging post-period trading performance and momentum building
o Notwithstanding the impact of 'Plan B' measures introduced over the
festive period
o In the 4 full weeks since the measures were lifted, sales from Coppa Club
sites outside of London were up 25% (compared to 2020)
· Poised to capitalise on unprecedented site opportunity in terms
of both availability and terms
o Opening of Coppa Club Putney (November 2021) with Coppa Club Haslemere and
Coppa Club Bath expected to open in the first half of calendar year 2022
o Pipeline of high-quality prime sites continues to grow, with several
agreed or in advanced negotiation
o Management experience coupled with healthy liquidity and a robust balance
sheet puts the Group in a strong position to accelerate growth as the effects
of the pandemic subside
Financials
· Total Group Revenue for the year up 36% to £22.3m (2020:
£16.5m)
· Adjusted EBITDA* of £1.2m (2020: loss of £0.8m)
· Total Loss of £3.7m (2020: £14.4m)
· Cash at Bank of £19.7m as at 3 October 2021 (2020: £0.9m)
· Net Cash of £7.3m (Excluding lease liabilities) (2020: £11.5m
liability)
*see Financial Review
Andy Bassadone, Executive Chairman of Various Eateries, said:
"I am incredibly proud of all our people, and all the resilience they've shown
through another volatile and challenging year. It is thanks to them that we
have been able to bounce back from periods of closure, delivering exceptional
results in times of unrestricted trading.
What is clear is that the appeal of our brands holds strong. While open, Coppa
Clubs have been in high demand, breakfast through to evening drinks, while
Tavolino continues to be popular with City-dwellers. Our hotels, similarly,
saw great wedding and staycation trade in the Summer. Our newest Coppa
openings, Cobham and Clifton Village, have performed ahead of internal budgets
and are fast becoming community favourites.
Post-period, notwithstanding the impact the introduction of 'Plan B' had on
our estate over the Christmas period and through much of January this year,
recent trading has been encouraging with momentum building as consumer
confidence increases.
This trend underpins our positive expectations for the future, and with more
new site openings on the horizon, together with solid consumer demand and a
management team at the helm with a track record of success, we look forward
with confidence."
A video overview of the results is available here:
https://bit.ly/VARE_FY21_results_overview
(https://bit.ly/VARE_FY21_results_overview)
Annual General Meeting and Posting of Results
The Company confirms that it intends to dispatch its Annual Report and
Accounts; and notice of Annual General Meeting to shareholders later this
week. A further announcement will be made at that time. A copy of the annual
report and accounts will also be available from the Company's website from
today (www.variouseateries.co.uk (http://www.variouseateries.co.uk) ).
Enquiries
Various Eateries plc
Andy Bassadone Executive Chairman Via Alma PR
Yishay Malkov Chief Executive Officer
Oli Williams Chief Financial Officer
WH Ireland Limited Broker and Nominated Adviser Tel: +44 (0)20 7220 1666
Broking
Harry Ansell
Nominated Adviser
Katy Mitchell
Alma PR Financial PR Tel: +44 (0)20 3405 0205
Rebecca Sanders-Hewett variouseateries@almapr.co.uk
David Ison
Susie Hudson
About Various Eateries
Various Eateries owns, develops and operates restaurant and hotel sites in the
United Kingdom. The Group's stated mission is "great people delivering unique
experiences through continuous innovation".
The Group is led by a highly experienced senior team including Andy Bassadone
(Executive Chairman), Hugh Osmond (Founder), Yishay Malkov (CEO), Oliver
Williams (CFO) and Matt Fanthorpe (Chef Director, a non-board position).
The Group operates two core brands across 13 locations:
· Coppa Club, a multi-use, all day concept that combines restaurant, terrace,
café, lounge, bar and work spaces
· Tavolino, a restaurant aiming to address a gap in the market for high-quality
Italian food at mid-market prices
For more information visit www.variouseateries.co.uk
CHAIRMAN'S & CHIEF EXECUTIVE'S STATEMENT
In the year to 3 October 2021, our first full financial year as a listed
company, we have achieved a great deal despite the volatile trading conditions
and well-publicised operational issues driven by the Covid pandemic.
We saw very strong performances when able to trade throughout the period, with
pent-up demand and the ongoing appeal of our two key brands, Coppa Club and
Tavolino, leading to strong performance compared to the market from the time
of re-opening of hospitality in April until the end of the reporting period.
In addition, we were delighted to open two new premium sites in the period,
both of which have performed very well since opening. At the same time, we
further developed our menus, fortified our supply chain, integrated the hotel
sites into the business and successfully mitigated staff availability
challenges while navigating a competitive labour market.
The experience of our management team, our strong financial position, and our
ability to take advantage of opportunities as and when they arise at a pace
that makes good business sense have been crucial in navigating the period
under review and we are confident these strengths will stand us in similarly
good stead going forward.
As we move through the new financial year, and boosted by the latest easing of
restrictions, we are more confident than ever that we have the right strategy
in place and the expertise and resources necessary to execute it successfully.
OUR STRATEGY
Poised to capitalise on unprecedented opportunity
Our strategy remains focused and unchanged, and while the exact timings and
patterns of restrictions have been difficult to predict, things are panning
out very much as we anticipated. We believe that there is an opportunity for a
well-funded operator with high quality brands, reinforced by an experienced
management team, to create a significant leisure group as normality resumes.
Covid and the associated restrictions continue to put the hospitality industry
under immense pressure. In January 2022, the Office for National Statistics
published research saying that 40% of all hospitality businesses say they have
less than three months of cash reserves, including 11% with none at all. Of
those, 17% said they have low or no confidence of surviving the next three
months. While over the last year we have seen government support and other
factors delaying the impact, we continue to believe a significant reduction in
competition and premium site availability - the likes of which the industry
has never seen - is inevitable. The opportunities for Various Eateries to
expand will therefore be very considerable.
Coppa Club is a multi-use, all-day concept that combines restaurant, terrace,
café, lounge, bar and remote working spaces under one roof. Tavolino aims to
address a gap in the market for high-quality Italian food at mid-market
prices. Both Coppa and Tavolino are prepared to scale up once normality
resumes and the economic challenges facing the sector subside.
TRADING & COVID IMPACT
Market outperformance during trading periods
In the period under review, we were able to welcome people into our sites for
33 weeks in total due to government restrictions designed to contain the
spread of Covid. Several of these trading weeks were under various other
restrictions, such as the three-tier system, the 'Rule of Six' and curfews. A
full breakdown of trading across the duration of the period is detailed in the
Financial Review.
Pleasingly, the Group's trading performance from the recommencement of
outdoor only trading on 12 April 2021 to period end was very encouraging.
Like-for-like revenue across the Coppa Club estate was up 21% from full
reopening on 17 May through to 3 October 2021 against the same period in 2019
(pre-Covid), with several Coppa Club sites delivering record sales months.
Our Tavolino site, despite being in the centre of London's office
district, delivered a strong reopening performance, building to positive
monthly like-for-like sales versus 2019 in September 2021.
Our hotels at our Coppa Clubs in Sonning and Streatley were subject to even
greater restrictions, only able to open post-lockdown in June 2021.
Encouragingly for the future, though, from opening to year end, occupancy and
average room rates for both hotels were above the same period in 2019.
DEVELOPING OUR ESTATE
Roll-out continues across multiple brands and site formats
At present, the Group has 13 sites, all in prime locations and without
restrictive lease agreements. The sites themselves are spacious and most have
significant outdoor spaces.
During the reporting period, we opened Coppa Club Cobham and Coppa Club
Clifton Village, both of which have performed ahead of internal budgets, with
the 'all-day' clubhouse concept being embraced by the community and guests
using the venue for breakfast, for coffee, as a study/workspace and of course
for lunch, supper and drinks.
Post-period end in November 2021, we also opened Coppa Club Putney. Our Putney
site is a prime location on the river Thames featuring extensive outdoor
terraced seating. It traded extremely well before introduction of Plan B
measures and is now once again building excellent sales momentum as these
measures are relaxed.
Coppa Club Haslemere and Coppa Club Bath are both expected to open in the
first half of calendar year 2022. Offering the full clubhouse experience, our
Haslemere site is a beautiful Grade II listed building featuring Georgian and
Tudor architecture. Coppa Club Bath, the Group's second foray into the
Southwest of England, is a spectacular Georgian townhouse - also Grade II
listed - set across four floors in the heart of the city.
Across our brands, several further premium sites have terms agreed or are in
advanced negotiations, with many others under consideration. While the
pipeline is extremely healthy, we will continue to be prudent in our roll-out,
accelerating when appropriate.
OUR PEOPLE
Communicating with, supporting and providing a first-rate working environment
for our people has - as always - been a key priority during the period.
Despite the widely reported increasing competition for good people, we are
proud to have recorded a high retention rate and maintained a low level of
vacancies, reflecting positively on our brands as places to work and enabling
us to continue delivering an uninterrupted service to visitors.
Our ethos at Various Eateries always has been to focus not just on
remuneration, although of course this is important, but also on creating a
positive working atmosphere where there are genuine, exciting opportunities to
progress. We have promoted internally often during the last year, as well as
adapting our offering to be more attractive to all ages and demographics to
ensure we keep a great team of people.
The Board would like to thank our teams for their hard work and dedication in
what has been another difficult year for them and their families. The way they
have risen to the challenge - particularly when it comes to availability
issues linked to Covid - has been exceptional and we're grateful to everyone
associated with the Group for their efforts.
MARKET DEVELOPMENTS
While many well documented industry-wide challenges persist, there remains
ample opportunity for well-managed hospitality businesses with compelling
offerings to succeed and grow. We have demonstrated our ability to navigate
supply chain and labour shortage challenges to date - continuing to provide a
high-quality, uninterrupted service to customers - and will look to manage
ongoing headwinds in the same way.
As Covid-related restrictions ease, we believe consumer confidence will
continue to grow steadily. This is evident in the progressive improvement we
have seen in trading since 'Plan B' measures were lifted. In addition, we
should see the number of inbound tourists increase as international travel
becomes easier, which will be beneficial to all our sites, but particularly
those in London.
At the same time, the number of people working remotely at least a few days a
week is expected to continue to rise, with a recent Gartner study showing 39%
of knowledge workers could look to find new work if a 'hard return' to working
on-site is forced. This bodes well for Coppa Club, which provides a relaxed
workspace for this demographic throughout the day.
As we move towards the end of government support initiatives, we continue to
believe a correction in the market is inevitable. Competition in the
hospitality sector is likely to reduce considerably in the
short-to-medium-term, paving the way for fresh, forward-facing and well-funded
firms such as ours to expand.
CURRENT TRADING AND OUTLOOK
Our performance in the period under review is testament to the strength of our
brands, relevance of our strategy and quality of our people. While we have
been subject to the same pandemic-related disruptions as the rest of the
industry, we have performed very well versus the market when able to trade,
which bodes very well for the Group's prospects.
Post-period, sales across our new and existing sites were encouraging prior to
the introduction of 'Plan B' measures in December 2021. Since they were lifted
in January 2022, we have seen a progressive improvement in trading which
underpins our optimism for the current financial year. Pleasingly, in the 4
weeks since 'Plan B' measures were lifted, sales from Coppa Club sites outside
of London grew 25% (compared to 2020).
Overall, it is clear that the continuing tendency for more "working from home"
is favouring our large all-day out of town Coppa Club venues but still
reducing customer numbers at our city centre sites. With our focus on making
all our sites attractive venues to work in and spend the day in a sociable,
comfortable environment, we believe we are very well positioned regardless how
this trend develops in the future.
Looking ahead, the opportunity before us continues to grow, and we're excited
by the prospect of ramping up our expansion plans. That said, management will
continue to use its experience and industry knowledge accumulated over decades
of successful rollouts to ensure it only does so at a pace is conducive to the
long-term success of the Group.
The Board continues to believe that the impact of the pandemic and a
saturation of outdated offerings will see competition decrease and the
availability of premium sites increase. With a fine-tuned strategy designed to
be future-proof, the financial firepower to execute it, and a management team
with a track record of success, we are confident of another year of strong and
sustainable progress.
Andy Bassadone
Executive Chairman
Yishay Malkov
Chief Executive Officer
financial review
OVERVIEW
The financial results for FY21, as with FY20, have been materially impacted by
Covid-19 resulting in zero revenue in lockdown periods and disruptions to
trading at all other times.
The KPI's of the Group's performance are summarised in the table below:
53 weeks ended 3 October 2021 52 weeks ended 27 September 2020 Change
£ 000 £ 000 %
Revenue 22,348 16,469 36%
Adjusted EBITDA (before impact of IFRS 16) (1,177) (2,348) 50%
Adjusted EBITDA (IFRS 16) 1,204 (804) 250%
Operating Loss* (2,098) (12,440) 83%
Total loss for the year* (3,740) (14,442) 74%
Basic and diluted earnings per share (pence)* (4.6) (116.4) 96%
Cashflow from operating activities* 3,292 639 415%
Net debt 17,691 35,375 50%
Net (cash) / debt (excluding lease liability) (7,278) 11,509 163%
Number of sites 12 10 20%
* Audited number
Summary of financial performance for the 53 weeks ended 3 October 2021
Reconciliation of loss before tax to Adjusted EBITDA 53 weeks ended 3 October 2021 52 weeks ended 27 September 2020
£ 000 £ 000
Revenue 22,348 16,469
Loss before tax (3,740) (14,442)
Net financing costs 1,642 2,002
Impairment 610 5,392
Depreciation and amortisation 3,971 2,833
Insurance claim (2,500) -
Loss on disposal of property, plant and equipment 335 1,632
Authorised Guarantee Agreements provision (104) 461
Initial Public Offering costs / restructuring costs - 452
EBITDA 214 (1,670)
Pre-opening costs 295 564
Share based payments 844 -
Non-trading site costs (149) 302
Adjusted EBITDA (IFRS 16) (not audited) 1,204 (804)
Adjustment for rent expense (2,382) (1,544)
Adjusted EBITDA before impact of IFRS 16 (not audited) (1,177) (2,348)
*The Group's hotel and event operations at Sonning and Streatley were acquired
during the final weeks of the previous financial period and thus are not
included in the comparative figures.
FINANCIAL PERFORMANCE
Overall Group Revenue increased by 36% (FY21: £22.3m, FY20: £16.5m),
resulting in an adjusted EBITDA of £1.2m (FY20: £0.8m loss) and a loss
before tax of £3.7m (FY20: £14.4m loss). Whilst the Group traded strongly
when restrictions were lifted and sites were able to trade, there were 19
weeks in the year where sites were forced to fully close subsequently
impacting the Group's profitability. The Group undertook various actions to
minimise the impact of the forced closures however there were other factors
which could not be wholly mitigated. The current year was split into periods
of restricted trading or full lockdowns detailed below.
Restricted Trading* Lockdown Takeout / outside only Restricted Trading
Oct 20 Nov 20 - Apr 21 Apr' 21 - May 21 June 21 - Sept' 21
Coppa Club London (1 Site) -46% - 7% 11%
Coppa Club Regional (5 Sites) 2% - 16% 27%
5 full weeks to 4 November 2020
Following on from the strong performance in the summer of 2020, the group
started the new financial year strongly in 2020, despite being faced with
increasingly challenging restrictions over the period. These included the
'rule of 6' when indoor dining was limited to groups of 6 guests, affecting
large bookings and group events. The 10pm curfew and the substantial meal
requirement meaning a wet lead offer was not possible when guests had finished
eating also impaired evening trading. Tourism numbers were still heavily
impacted, with international travel restrictions in place and in many cases
businesses had yet to enforce office workers returning to the office.
5 November 2020 to 12 April 2021
Following the second national lockdown (a four-week circuit breaker in
November 2020 ending on the 2 December 2020), the group was able to reopen
sites in December in line with the rules of the tier system. Most of our sites
were impacted with the higher tiers of the system which included rules such as
only 2 households mixing for indoor dining. Given the short period, and the
nature of sites hopping between tiers, it is difficult to gauge any meaningful
insight into the 6-week period before the third national lockdown began on the
6 January 2021. All of our sites were in Tier 4 by the middle of December (21
December), which required hospitality businesses to be closed. With no
delivery trade, this meant the group generated no income during this period.
This third national lockdown continued until the 12 April 2021.
12 April 2021 to 17 May 2021
Following the end of the third national lockdown on 12(th) April 2021, the
Group was able to start trading outside which meant all sites with outdoor
space and terraces could operate. All non-essential retail was also able to
re-open which helped to drive footfall. All but one of the Coppa Club estate
were able to open and, driven by a combination of large outdoor spaces, pent
up demand and the lower VAT rates produced some record sales weeks and
significant LFL growth over the 5 weeks.
17 May 2021 to 3 October 2021
Full trading resumed from the 17(th) May, although this was coupled with
restrictions on the number of guests allowed at any one time. The 'rule of 6'
still applied to those missing different households indoors, where outdoors
the limit was increased to 30 guests which drove outdoor events and large
outdoor bookings. Whilst these restrictions remained in place, sales at the
Coppa Clubs, both inside and outside London, continued in significant double
digit LFL growth, outperforming the market.
Covid-19 mitigating actions
The Group continued to implement significant actions to mitigate the impact of
Covid-19. Actions included:
• Including all site employees and a majority of head office employees
on to the Coronavirus Job Retention Schemes when in full lockdowns.
• All those not furloughed including at management and executive team
level agreed to temporary salary reductions.
• Taking advantage of various UK Government initiatives including
Business Rates relief and various Support Grants.
• Agreements with suppliers and partners to extend credit terms, amend
contracts and arrange payment plans where necessary.
• Continued dialogue with all landlords to agree a combination of rent
waivers and deferrals, as well as benefitting from Covid cesser clauses to
previously amended leases.
FINANCING costs
Financing costs of £1.6m (2020: £2.0m) have reduced by £0.4m in the year.
Whilst the IFRS lease liability interest has risen by £0.5m, driven both by
the new hotel acquisitions, as well as the new openings over the 2 years, the
FY20 reorganisation resulted in a significant reduction in financing costs of
£1.3m down to £0.5m.
FY21 FY20
£ 000 £ 000
537 1,349
Financing costs on bank overdrafts and borrowings
Lease liability interest 1,108 654
Financing costs 1,645 2,003
Impairments
A detailed review of each individual site has resulted in an impairment charge
of £0.6m (2020: £5.4m), all against right-of-use assets. Detail of the
methodology is included in notes 14 and 15 to the financial statements.
Loss on disposal of assets & leases
There were no disposals of any significant assets or leases in the year. In
FY20, the Group disposed of the remaining non-trading Strada leases and
associated assets.
IPO & restructuring costs
There were no IPO or restructuring costs in the year. In FY20, these costs
were incurred in the restructuring and execution of the Group's IPO, with
further costs of £1.9m were charged directly to equity as they relate to the
raising of equity.
Dividend
The Directors do not recommend the payment of a dividend believing it more
beneficial to use cash resources to invest in the Group in line with our
strategy.
Cashflow & balance sheet
The Group undertook significant actions to mitigate the impact of the pandemic
on its financial position in FY20 and in FY21, and the group was able to
generate £3.4m from operations. Having received the cash during the period
relating to the listing in the prior year, which was previously shown in other
receivables, the Group finished the year with cash of £19.7m.
During the period, the Group invested £5.1m (2020: £5.1m) in capital
expenditure in support of future growth. New Coppa Club sites were opened in
Cobham, Clifton and a further site in Putney, a large proportion of which was
completed in the period, as well as undertaking light refurbishments to
Brighton and Maidenhead.
The group also received an interim insurance payment in the year of £2.5m
relating to its Business Interruption insurance claim. The Group is
collaborating with Allianz, it's insurer, to seek judicial determination over
a number of issues affecting the claim for Covid-19-related losses under a
Marsh Resilience policy which were left unresolved by the court following the
FCA test case.
KEY PERFORMANCE INDICATORS ('KPIs')
As summarised, the Group reviews numerous indicators of performance on a
monthly and annual basis. However, with the period severely impacted by the
conditions faced by the group, as detailed throughout the Annual Report, the
total loss and EPS figures are hard to assess on a comparable basis.
Various Eateries PLC
Consolidated Statement of Comprehensive Income
For the 53 weeks ended 3 October 2021
53 weeks ended 3 October 2021 52 weeks ended 27 September 2020
Note £ 000 £ 000
Revenue 4 22,348 16,469
Cost of sales (20,729) (17,516)
Gross profit / (loss) 1,619 (1,047)
Central staff costs (2,076) (1,901)
Share-based payments 27 (844) -
Insurance claim proceeds 2,500 -
Impairment of intangible assets 14 - (3,640)
Impairment of property, plant and equipment 15 (610) (1,751)
Loss on disposal of property, plant and equipment (335) (1,632)
Other expenses 12 (2,352) (2,469)
Operating loss (2,098) (12,440)
Finance income 7 3 1
Financing costs 7 (1,645) (2,003)
Loss before tax (3,740) (14,442)
Tax 11 - -
Loss for the period (3,740) (14,442)
Earnings per share
Basic loss per share (pence) 13 (4.6) (116.4)
Diluted loss per share (pence) 13 (4.6) (116.4)
The above results were derived from continuing operations.
There are no items of comprehensive income other than the loss for the period
and therefore, no statement of comprehensive income is presented.
Various Eateries PLC
Consolidated Statement of Financial Position
as at 3 October 2021
3 October 27 September 2020
2021
Note £ 000 £ 000
Non-current assets
Intangible assets 14 12,841 12,903
Right-of-use assets 15 20,724 21,049
Other property, plant and equipment 15 15,168 12,390
48,733 46,342
Current assets
Inventories 17 546 401
Trade receivables 18 137 248
Other receivables 18 1,367 24,682
Cash and bank balances 19 19,716 893
21,766 26,224
Total assets 70,499 72,566
Current liabilities
Trade and other payables 20 (11,243) (10,992)
Borrowings 21 (12,438) (2,402)
Net current (liabilities) / assets (1,915) 12,830
Total assets less current liabilities 46,818 59,172
Non-current liabilities
Borrowings 22 (22,128) (31,482)
Provisions 23 (357) (461)
Total non-current liabilities (22,485) (31,943)
Total liabilities (46,166) (45,337)
Net assets 24,333 27,229
Equity
Share capital 24 890 890
Share premium 24 52,284 52,284
Merger reserve 64,736 64,736
Employee benefit trust shares reserve (5,012) (5,012)
Retained earnings (88,565) (85,669)
Total funds attributable to the equity shareholders of the Company 24,333 27,229
Various Eateries PLC
Consolidated Statement of Changes in Equity
for the 53 weeks ended 3 October 2021
Called-up share capital Share premium account Merger reserve Employee benefit trust shares reserve Retained earnings Total
Attributable to equity shareholders of the Company £ 000 £ 000 £ 000 £ 000 £ 000 £ 000
At 29 September 2019 111 64,736 - - (71,227) (6,380)
Share-for-share exchange - (64,736) 64,736 - - -
Debt for equity swap 238 15,250 - - - 15,488
Shares issued on Initial Public Offering 342 24,658 - - - 25,000
Other shares issued 199 14,285 - (5,012) - 9,472
Share issue costs - (1,909) - - - (1,909)
Total transactions with owners 779 (12,452) 64,736 (5,012) - 48,051
Loss for the period - - - - (14,442) (14,442)
Total comprehensive loss - - - - (14,442) (14,442)
At 27 September 2020 890 52,284 64,736 (5,012) (85,669) 27,229
Share-based payments - - - - 844 844
Total transactions with owners - - - - 844 844
Loss for the period - - - - (3,740) (3,740)
Total comprehensive loss - - - - (3,740) (3,740)
At 3 October 2021 890 52,284 64,736 (5,012) (88,565) 24,333
Various Eateries PLC
Consolidated Statement of Cash Flows
for the 53 weeks ended 3 October 2021
53 weeks ended 52 weeks ended
3 October 2021 27 September 2020
Note £ 000 £ 000
Cash flows from operating activities
Loss for the year (3,740) (14,442)
Adjustments to cash flows from non-cash items:
Depreciation and amortisation 14,15 3,971 2,832
Impairment 14,15 610 5,391
Loss on disposal of assets and leases 335 1,632
Share-based payments 844 -
Finance income 7 (3) (1)
Financing costs 7 1,645 2,003
3,662 (2,585)
Working capital adjustments:
(Increase) / decrease in inventories 17 (145) 149
Decrease in trade and other receivables 18 54 958
(Decrease) / increase in accruals, trade and other payables 20 (175) 1,656
(Decrease) / increase in provisions 23 (104) 461
Net cash flow from operating activities 3,292 639
Cash flows from investing activities
Interest received 7 3 1
Purchases of property plant and equipment 15 (5,059) (5,086)
Purchase of intangible assets 14 - (2)
Proceeds / (Cost) from disposal of property, plant and equipment 59 (109)
Costs on issue of shares (46) (432)
Net cash flows from investing activities (5,043) (5,628)
Cash flows from financing activities
Interest paid (1,525) (841)
Proceeds on issue of shares 24 23,373 79
Proceeds from borrowings 21,22 - 5,700
Principal elements of lease payments (1,274) (890)
Net cash flows from financing activities 20,574 4,048
Increase / (decrease) in cash 18,823 (941)
Opening cash at bank and in hand 893 1,834
Closing cash at bank and in hand 19,716 893
1 General information
Various Eateries PLC, 'the Company', and its subsidiaries (together 'the
Group') are engaged in the operation of restaurants and hotels in London and
the South of England
The Company is a public company limited by shares whose shares are publicly
traded on the AiM Market of the London Stock Exchange and is incorporated and
domiciled in the United Kingdom under the Companies Act 2006 and are
registered in England and Wales.
The registered address of the Company is 20 St Thomas Street, London, SE1 9RS.
2 Accounting policies
Basis of preparation
The principal accounting policies adopted in the preparation of the financials
statements of the Group which have been applied consistently to all periods
presented, are set out below.
The directors (the 'Directors') of Various Eateries PLC are responsible for
the financial statements. Judgements made by the Directors, in the application
of these accounting policies that have a significant effect on the financial
statements and estimates with a significant risk of material adjustments in
the next period are disclosed in note 3 on page 22.
The consolidated financial statements of the Group have been prepared in
accordance with International Financial Reporting Standards in conformity with
the requirements of the Companies Act 2006 applicable to companies reporting
under IFRS and IFRIC interpretations.
The financial statements have been prepared on an historical cost basis.
Monetary amounts in these financial statements are rounded to the nearest
whole £1,000, except where otherwise indicated.
Basis of consolidation
The consolidated financial statements incorporate those of Various Eateries
PLC and all of its subsidiaries (i.e. entities that the Group controls through
its power to govern the financial and operating policies so as to obtain
economic benefits). All financial statements are made up to 3 October 2021.
All intra-group transactions, balances and unrealised gains on transactions
between group companies are eliminated on consolidation. Unrealised losses are
also eliminated unless the transaction provides evidence of an impairment of
the asset transferred.
Going concern
In adopting the going concern basis for preparing the financial statements for
the year ended 3 October 2021, the Directors have considered the business
model, the Group's principal risks and uncertainties as well as taking into
account the current cash position and potential facilities.
2 Accounting policies (continued)
Going concern (continued)
Based on the Group's cash flow forecasts and projections, the Board is
satisfied that the Group will be able to operate within the level of its
facilities for the foreseeable future. In making this assessment, the
directors have made a specific analysis of the impact of both Covid-19 and
Brexit, whilst taking into account the renewal of the Deep Discounted Bond
post year end (as detailed in note 29, post balance sheet events). Even
allowing for a full period of closure for twelve months from when the
financial statements are authorised for issue, the Board are comfortable the
Group would have the required cash to continue trading. For this reason, the
Board considers it appropriate for the Group to adopt the going concern basis
in preparing its financial statements.
Revenue
Revenue represents net invoiced sales of food and beverages, hotel
accommodation and room hire excluding value added tax. Revenue is recognised
when the goods have been provided.
Rental income
Rental income from subletting right-of-use assets is recognised on a straight
line basis over the term of the relevant lease. It is netted off against
rental costs and is recognised within cost of sales.
Goodwill
Goodwill relates to acquired sites and is initially measured at cost (being
the excess of the aggregate of the consideration transferred and the amount
recognised for non-controlling interests) and any previous interest held over
the net identifiable assets acquired and liabilities assumed. The company is
taking the option to not restate any balances prior to the opening balance
sheet for the purpose of the financial statements. If the fair value of the
net assets acquired is in excess of the aggregate consideration transferred,
the Group re-assesses whether it has correctly identified all of the assets
acquired and all of the liabilities assumed and reviews the procedures used to
measure the amounts to be recognised at the acquisition date. If the
reassessment still results in an excess of the fair value of net assets
acquired over the aggregate consideration transferred, then the gain is
recognised in the income statement.
After initial recognition, goodwill is measured at cost less any accumulated
impairment losses. The goodwill is tested annually for impairment.
Intangible assets (other than goodwill)
Intangible assets acquired separately from a business combination are
recognised at cost and are subsequently measured at cost less accumulated
amortisation and accumulated impairment losses. Intangible assets acquired on
business combinations are recognised separately from goodwill at the
acquisition date if the fair value can be measured reliably.
Amortisation is recognised so as to write off the cost or valuation of assets
less their residual values over their useful lives of 4 years on a straight
line basis.
Property, plant and equipment
Property, plant and equipment are stated at cost net of accumulated
depreciation and accumulated impairment losses. Cost comprises of purchase
cost together with any incidental costs of acquisition.
Depreciation is provided to write down the cost less the estimated residual
value of all tangible fixed assets by equal instalments over their estimated
useful economic lives on a straight-line basis. The following rates are
applied:
2 Accounting policies (continued)
Property, plant and equipment (continued)
Asset
class
Depreciation method and rate
Right of use
assets
Life of lease
Freehold property -
Land
Not depreciated
Freehold property -
Buildings
Over 50 years
Leasehold
improvements
Life of lease
Furniture, fittings and
equipment
14.29% - 33.33% per annum
Assets under
construction
Not depreciated
IT
equipment
20% - 33.33% per annum
The estimated useful lives, residual values and depreciation method are
reviewed at the end of each reporting period, with the effect of any changes
in estimate accounted for on a prospective basis. Property, plant and
equipment are tested for impairment if indications of impairment are present.
Work-in-progress relates to capital expenditure on sites that have not started
trading.
Inventories
Raw materials and consumables are valued at the lower of cost and net
realisable value. Cost is based on latest contracted purchase cost.
Financial instruments
The Group classifies financial instruments, or their component parts, on
initial recognition as a financial asset, a financial liability or an equity
instrument in accordance with the substance of the contractual arrangement.
Financial instruments are recognised on trade date when the Group becomes a
party to the contractual provisions of the instrument. Financial instruments
are recognised initially at fair value plus, in the case of a financial
instrument not at fair value through profit and loss, transaction costs that
are directly attributable to the acquisition or issue of the financial
instrument. Financial instruments are derecognised on the trade date when the
Group is no longer a party to the contractual provisions of the instrument.
Non-derivative financial instruments
Non-derivative financial instruments comprise trade and other receivables,
cash and cash equivalents, loans and borrowings and trade and other payables.
All financial instruments held are classified at amortised cost.
Trade and other receivables and trade and other payables
Trade and other receivables are recognised initially at transaction price less
attributable transaction costs. Trade and other payables are recognised
initially at transaction price plus attributable transaction costs. Subsequent
to initial recognition they are measured at amortised cost using the effective
interest method, less any expected credit losses in the case of trade
receivables. If the arrangement constitutes a financing transaction, for
example if payment is deferred beyond normal business terms, then it is
measured at the present value of future payments discounted at a market rate
of interest for a similar debt instrument.
Interest bearing borrowings
Interest-bearing borrowings are recognised initially at the present value of
future payments discounted at a market rate of interest. Subsequent to initial
recognition, interest-bearing borrowings are stated at amortised cost using
the effective interest method, less any impairment losses.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances held at bank, call deposits,
cash on hand and cash in transit.
2 Accounting policies (continued)
Impairment of intangible assets and property, plant and equipment
At each reporting end date, the Group reviews the carrying amounts of its
tangible and intangible assets to determine whether there is any indication
that those assets have suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to determine
the extent of the impairment loss (if any). Where it is not possible to
estimate the recoverable amount of an individual asset, the Group estimates
the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated
to be less than its carrying amount, the carrying amount of the asset (or
cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (or cash-generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss
been recognised for the asset (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognised immediately in profit or loss.
Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax.
Tax payable is based on taxable profit. Taxable profit differs from net profit
as reported in the statement of profit or loss because it excludes items of
income or expense that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. Any liability for current
tax is calculated using tax rates that have been enacted at the balance sheet
date.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit. Deferred tax liabilities are generally recognised for all taxable
temporary differences and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and liabilities
are not recognised if the temporary difference arises from the initial
recognition of goodwill or from the initial recognition (other than in a
business combination) of other assets and liabilities in a transaction that
affects neither the taxable profit nor the accounting profit. The carrying
amount of deferred tax assets is reviewed at each balance sheet date and
reduced to the extent that it is no longer probable that sufficient taxable
profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised based on tax
laws and rates that have been enacted or substantively enacted at the balance
sheet date. Deferred tax is charged or credited in the consolidated profit and
loss account, except when it relates to items charged or credited in other
comprehensive income, in which case the deferred tax is also dealt with in
other comprehensive income.
The measurement of deferred tax liabilities and assets reflects the tax
consequences that would follow from the manner in which the Company expects,
at the end of the reporting period, to recover or settle the carrying amount
of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Company intends to settle its current tax assets and
liabilities on a net basis.
Current and deferred tax are recognised in the consolidated profit or loss,
except when they relate to items that are recognised in other comprehensive
income or directly in equity, in which case, the current and deferred tax are
also recognised in other comprehensive income or directly in equity
respectively.
2 Accounting policies (continued)
Employee benefits
Post-retirement benefits
The Group operates defined contribution plans for its employees. A defined
contribution plan is a post-employment benefit plan under which the Group pays
fixed contributions into a separate entity and will have no legal or
constructive obligation to pay further amounts. Obligations for contributions
to defined contribution pension plans are recognised as an expense in the
periods during which services are rendered by employees.
Termination benefits
Termination benefits are recognised immediately as an expense when the Group
is demonstrably committed to terminate the employment of an employee or to
provide termination benefits.
Leases
The Group leases a number of properties in various locations around the UK
from which it operates.
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 twelve months or less.
Lease liabilities are measured at the present value of the contractual
payments due to the lessor over the lease term, with the discount rate
determined by reference to the rate inherent in the lease unless (as is
typically the case) this is not readily determinable, in which case the
Group's incremental borrowing rate on commencement of the lease is used. This
is 4.5% (2020: 4.5%). Variable lease payments are only included in the
measurement of the lease liability if they depend on an index or rate. In such
cases, the initial measurement of the lease liability assumes the variable
element will remain unchanged throughout the lease term. Other variable lease
payments, such as those linked to turnover, are expensed in the period to
which they relate.
On initial recognition, the carrying value of the lease liability also
includes:
· Amounts expected to be payable under any residual value
guarantee;
· The exercise price of any purchase option granted in favour of
the Group if it is reasonably certain to exercise that option; and
· Any penalties payable for terminating the lease, if the term of
the lease has been estimated on the basis of the termination option being
exercised.
Right-of-use assets are initially measured at the amount of the lease
liability, reduced for any lease incentives received, and increased for:
· Lease payments made at or before commencement of the lease;
· Initial direct costs incurred; and
· The amount of any provision recognised where the Group is
contractually required to dismantle, remove or restore the leased asset
(typically leasehold dilapidations).
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 depreciated on a
straight-line basis over the remaining term of the lease or over the remaining
economic life of the asset if, rarely, this is judged to be shorter than the
lease term. Right-of-use assets are tested for impairment if indications of
impairment are present.
When the Group revises its estimate of the term of any lease (because, for
example, it re-assesses the probability of a lessee extension or termination
option being exercised), it adjusts the carrying amount of the lease liability
to reflect the payments to be made over the revised term, which are discounted
at the same discount rate that applied on lease commencement. The carrying
value of lease liabilities is similarly revised when the variable element of
future lease payments dependent on a rate or index is revised. In both cases
an equivalent adjustment is made to the carrying value of the right-of-use
asset, with the revised carrying amount being depreciated over the remaining
(revised) lease term.
Lease modifications change the scope of the lease or change the consideration
for the lease by comparison with that detailed in the original terms and
conditions of the contract. If the modifications, in substance, mean that the
original lease has been terminated and a new lease created, then the revised
terms are accounted for as a new lease.
2 Accounting policies (continued)
Leases (continued)
Where modifications do not need to be accounted for as a separate lease, the
amount recognised for the lease liability and the right-of-use asset is
revisited to reflect the updated terms and conditions of the contract.
Finance income and financing costs
Financing expenses comprise interest payable, finance charges on shares
classified as liabilities and finance leases recognised in profit or loss
using the effective interest method, and net foreign exchange losses that are
recognised in the Statement of Comprehensive Income.
Financing income includes interest receivable on funds invested.
Interest income and interest payable are recognised in the Statement of
Comprehensive Income as they accrue, using the effective interest method.
Government grants
During the period, the Group has received grants from the UK Government in
relation to the Coronavirus Job Retention Scheme and business rates relief.
The income from these grants has been offset against the expense to which they
relate.
Standards issued but not yet effective:
The following standards and interpretations relevant to the Group are in issue
but are not yet effective and have not been applied in the financial
statements. In some cases these standards and guidance have not been endorsed
for use in the United Kingdom.
2 Accounting policies (continued)
Standards issued but not yet effective: (continued)
Standard / interpretation Content Applicable for financial years beginning on / after
IAS 1 Classification of liabilities as current or non-current In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to 2 October 2023
specify the requirements for classifying liabilities as current or
non-current.
IAS 1 Presentation of financial statements and IFRS Practice Statement 2 The amendments change the requirements in IAS 1 with regard to disclosure of 2 October 2023
making materiality judgements-disclosure of accounting policies accounting policies. The amendments replace all instances of the term
'significant accounting policies' with 'material accounting policy
information'.
IAS 8 Definition of accounting estimates The amendments replace the definition of a change in accounting estimates with 2 October 2023
a definition of accounting estimates. Under the new definition, accounting
estimates are "monetary amounts in financial statements that are subject to
measurement uncertainty".
IAS 12 Deferred tax related to assets and liabilities arising from a single The amendments introduce a further exception from the initial recognition 2 October 2023
transaction exemption. Under the amendments, an entity does not apply the initial
recognition exemption for transactions that give rise to equal taxable and
deductible temporary differences. Following the amendments to IAS 12, an
entity is required to recognise the related deferred tax asset and liability.
Annual improvements to IFRS Standards 2018-2020 The annual improvements include amendments to four Standards: IFRS 1 3 October 2022
First-time adoption of International Financial Reporting Standards, IFRS 9
Financial Instruments, IFRS 16 Leases, and IAS 41 Agriculture.
IFRS 3 Reference to the conceptual framework In May 2020, the IASB issued amendments to IFRS 3 Business Combinations - 3 October 2022
Reference to the Conceptual Framework.
IAS 16 Property, plant and In May 2020, the IASB issued property, plant and equipment: proceeds before 3 October 2022
intended use, which prohibits entities deducting from the cost of an item of
equipment: proceeds property, plant and equipment any proceeds from selling items produced while
bringing that asset to the location and condition necessary for it to be
before intended use capable of operating in the manner intended by management.
Interest rate benchmark reform: Phase 2 The amendments address issues that might affect IFRS 9, IAS 39, IFRS 7, IFRS 4 4 October 2021
and IFRS 16 as a result of the reform of an interest rate benchmark
The Group has not yet assessed the impact of these new or amended Accounting
Standards and Interpretations.
3 Critical accounting judgements and key sources of estimation uncertainty
The preparation of the financial statements requires the Directors to make
estimates and judgements that affect the reported amounts of assets,
liabilities, costs and revenue. Actual results could differ from these
estimates. Information about such judgements and estimates is contained in
individual accounting policies. The judgements, estimates and associated
assumptions are based on historical experience and other factors that are
considered to be relevant.
The resulting accounting estimates will, by definition, seldom equal the
related actual results. 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 year are addressed below:
Key judgement - determining the rate used to discount lease payments
At the commencement date of property leases the lease liability is calculated
by discounting the lease payments. The discount rate used should be the
interest rate implicit in the lease. However, if that rate cannot be readily
determined, which is generally the case for property leases, the lessee's
incremental borrowing rate is used, being the rate that the individual lessee
would have to pay to borrow the funds necessary to obtain an asset of similar
value to the right of use asset in a similar economic environment with similar
terms, security and conditions. The discount rate applied to the Group's
leases under the portfolio approach is 4.5%. A 0.5% increase in the discount
rate to 5% will result in a decrease in net present value of the total lease
liability of £648,000 in 2021 (2020: £731,000). A 0.5% decrease in discount
rate to 4% results in increase in the net present value of the total lease
liability of £683,000 in 2021 (2020: £771,000).
Key estimate - impairment of goodwill, other intangibles and property, plant
and equipment
Determining whether goodwill, other intangibles and plant, property and
equipment are impaired requires an estimation of the recoverable amount of the
cash-generating units ('CGUs') to which goodwill, other intangibles and
tangible fixed assets have been allocated. The value in use calculation
requires estimation of future cash flows expected to arise from the cash
generating unit and a suitable discount rate in order to calculate present
value. Details of cash generating units as well as further information about
the assumptions made are disclosed in notes 14 and 15.
4 Revenue
An analysis of the Group's total revenue (including sublease rental income
shown within cost of sales) which all originates in the UK is as follows:
53 weeks ended 3 October 2021 52 weeks ended 27 September 2020
£ 000 £ 000
Sale of goods 20,212 16,469
Accommodation and room hire 2,111 -
Sub-let rental income 25 55
22,348 16,524
5 Segmental Reporting
IFRS 8 'Operating Segments' requires operating segments to be based on the
Group's internal reporting to its Chief Operating Decision Maker ('CODM'). The
CODM is regarded as the Chief Executive Officer together with other Board
Members who receive financial information at a site-by-site level. During the
period ended 27 September 2020, the Group traded in one business segment
(operating non-members clubs and restaurants, the "Restaurant Segment") and
these sites met the aggregation criteria set out in paragraph 12 of IFRS 8.
Economic indicators assessed in determining that the aggregated operating
segments share similar economic characteristics include expected future
financial performance, operating and competitive risks and return on
investment.
Following the acquisition of two hotel entities in September 2020 (see note 6)
these have been deemed to represent a separate operating segment ("Hotel
Segment") and hence the table below shows these for the 53 weeks ended 3
October 2021 (2020: n/a) where the group now operates in two segments.
Restaurant segment Hotel segment Other unallocated Total
£ 000 £ 000 £ 000 £ 000
Revenue 20,212 2,111 25 22,348
Trading sites EBITDA (before impact of IFRS 16) 2,897 (18) (3,804) (925)
Pre-opening costs (295) - - (295)
Impact of IFRS 16 1,182 1,200 - 2,382
Total EBITDA (IFRS 16) 3,784 1,182 (3,804) 1,162
Depreciation and amortisation - - (3,971) (3,971)
Loss on disposal property, plant and equipment - - (335) (335)
Impairment of right of use assets - - (610) (610)
Financing costs - - (1,642) (1,642)
Insurance claim proceeds 2,500 - - 2,500
Share-based payments - - (844) (844)
Profit / (loss) before tax 6,284 1,182 (11,206) (3,740)
Tax - - - -
Profit / (loss) for the period 6,284 1,182 (11,206) (3,740)
6 Business Combinations
In the 53 weeks ended 3 October 2021, the group undertook no acquisitions.
In the prior period, on 15 September 2020, the Group acquired 100% of the
equity instruments of Rare Bird Hotels at Sonning Limited ('RBH Sonning') and
Rare Bird Hotels at Streatley Limited ('RBH Streatley'), thereby obtaining
control of both companies. The companies were incorporated in 2020 for the
purpose of acquiring the trade and certain assets of The Great House at
Sonning Limited and Rare Bird Hotels Limited respectively, which are related
parties of the Group (see note 28). The acquisitions were made to bring the
full operations of each of the hotel locations, where Coppa Club sites are
based, into the Group prior to the Initial Public Offering.
6 Business Combinations (continued)
RBH Sonning RBH Streatley
£ 000 £ 000
Fair value of consideration transferred
Amount settled via equity issue from the Company 2,329 6,987
Recognised amounts of identifiable net assets
Right of use assets (note 15) 5,285 6,246
Property, plant and equipment (note 15) 169 325
Intangible assets (note 14) 125 125
Total non-current assets 5,579 6,696
Inventories 1 16
Trade and other receivables 212 420
Cash and bank balances 110 79
Trade and other payables (626) (615)
Lease liabilities (5,309) (6,274)
Identifiable net (liabilities) / assets (33) 322
Goodwill on acquisition 2,362 6,665
The acquisitions were settled via issue of equity from the Company, 3,174,603
and 9,523,809 ordinary shares for RBH Sonning and RBH Streatley respectively
(see also note 24).
The Group assessed the fair value of identifiable intangible assets as
£250,000 relating to the Rare Bird Hotels brand name, split evenly between
the acquired businesses. The goodwill of £9,027,000 arising from the
acquisitions consists primarily of growth expectations, expected future
profitability, and expected cost synergies. Goodwill has been allocated to the
hotel segment.
Results for the acquired businesses were not consolidated into the Group
results for the period ended 27 September 2020 due to the proximity of
acquisition date to the reporting date, though assets and liabilities were
consolidated into the consolidated statement of financial position as at 27
September 2020.
7 Finance income / financing costs
53 weeks ended 3 October 2021 52 weeks ended 27 September 2020
£ 000 £ 000
Interest income on bank deposits 3 1
Total finance income 3 1
Financing costs on bank overdraft and borrowings (537) (1,348)
Lease liability interest (1,108) (654)
Foreign exchange loss - (1)
Total financing costs (1,645) (2,003)
Net financing costs (1,642) (2,002)
8 Auditor's remuneration
53 weeks ended 3 October 52 weeks ended 27 September 2020
2021
£ 000 £ 000
Audit of the financial statements 138 100
Other fees to auditor
Services in relation to Initial Public Offering - 115
- 115
Audit fees for the 53 weeks ended 3 October 2021 includes £13,000 in respect
of the 2020 audit. Audit fees for the 52 weeks ended 27 September 2020
includes £23,000 in respect of the 2019 audit.
9 Staff numbers and costs
53 weeks ended 3 October 52 weeks ended 27 September 2020
2021
The average monthly number of employees (including directors) was:
Operational staff 599 506
The average monthly number of employees (being directors) of the Company was 7
(2020:7)
53 weeks ended 3 October 52 weeks ended 27 September 2020
2021
Their aggregate remuneration comprised:
Wages and salaries 11,824 10,080
Social security costs 898 777
Other pension costs (see note 25) 179 178
Share-based payments 844 -
Other employee costs 94 83
Grant income - CJRS (3,091) (2,846)
10,748 8,272
10 Directors' remuneration
53 weeks ended 3 October 52 weeks ended 27 September 2020
2021
The Directors' remuneration for the period in respect of services to the £ 000 £ 000
Group, was as follows:
Remuneration 444 324
Employer pension contribution 8 7
452 331
53 weeks ended 3 October 52 weeks ended 27 September 2020
2021
In respect of the highest paid director: £ 000 £ 000
Remuneration 181 150
Employer pension contribution 5 4
186 154
11 Tax
Tax expense
53 weeks ended 3 October 52 weeks ended 27 September 2020
2021
Tax expense £ 000 £ 000
Corporation tax - -
Total current income tax - -
Tax expense in the statement of profit or loss - -
Corporation tax is calculated at 19% (2020: 19%) of the estimated taxable loss
for the period.
11 Tax (continued)
The charge for the period can be reconciled to the Group's loss as follows:
53 weeks ended 3 October 52 weeks ended 27 September 2020
2021
£ 000 £ 000
Loss before tax (3,740) (14,442)
Corporation tax at standard rate 19.0% (2020: 19.0%) (711) (2,744)
Fixed asset differences 236 992
Expenses not deductible 311 405
Remeasurement of deferred tax for changes in tax rate (3,049) (676)
Movement in deferred tax not recognised 3,213 2.023
Total tax charge - -
No account has been taken of the potential deferred tax asset of £12,705,000
(2020: £9,885,000) calculated at 25% (2020: 19%) and representing losses
carried forward and short term timing differences, owing to the uncertainty
over the utilisation of the losses available.
12 Other expenses
53 weeks ended 3 October 52 weeks ended 27 September 2020
2021
£ 000 £ 000
Depreciation and amortisation 389 235
AGA (release of provision) / provision (note 23) (104) 461
IPO related costs - 285
Restructuring costs - 167
Other central costs 2,067 1,321
2,352 2,469
13 Earnings per share
Basic loss per share is calculated by dividing the loss attributable to equity
shareholders by the weighted average number of shares outstanding during the
year. There were no potentially dilutive ordinary shares outstanding as at the
periods ended 3 October 2021 and 27 September 2020.
3 October 2021 27 September 2020
£ 000 £ 000
Loss for the year after tax (3,740) (14,442)
Basic and diluted weighted average number of shares 82,143,398 12,403,859
Basic loss per share (pence) (4.6) (116.4)
Diluted loss per share (pence) (4.6) (116.4)
14 Intangible assets
Group Brand Goodwill Trademarks, patents & licenses Total
£ 000 £ 000 £ 000 £ 000
Cost or valuation
At 27 September 2020 2,912 26,019 25 28,956
Additions - - - -
At 3 October 2021 2,912 26,019 25 28,956
Amortisation
At 27 September 2020 2,662 13,391 - 16,053
Charge for the period 62 - - 62
At 3 October 2021 2,724 13,391 - 16,115
Carrying amount 3 October 2021 188 12,628 25 12,841
Brand Goodwill Trademarks, patents & licenses Total
£ 000 £ 000 £ 000 £ 000
Cost or valuation
At 29 September 2019 2,662 16,992 23 19,677
Additions - - 2 2
Acquired through business combination 250 9,027 - 9,277
At 27 September 2020 2,912 26,019 25 28,956
Amortisation
At 29 September 2019 2,662 9,751 - 12,413
Impairment - 3,640 - 3,640
At 27 September 2020 2,662 13,391 - 16,053
Carrying amount 27 September 2020 250 12,628 25 12,903
Brand relates to registered brand names and is amortised over an estimated
useful economic life of 4 years. The brand names that were acquired through
business combinations were not amortised during the period ended 27 September
2020 due to the proximity of acquisition date to the reporting date.
Goodwill is not amortised, but an impairment test is performed annually by
comparing the carrying amount of the goodwill to its recoverable amount. The
recoverable amount is represented by the greater of the individual CGU's fair
value less costs of disposal and its value-in-use.
14 Intangible assets (continued)
Group goodwill Tavolino Riverside Strada Southbank Strada Dockside Rare Bird Hotels at Sonning Limited Rare Bird Hotels at Streatley Limited Total
£ 000 £ 000 £ 000 £ 000 £ 000 £ 000
Carrying amount
At 29 September 2019 4,033 3,146 62 - - 7,241
Acquired through business combinations - - - 2,418 6,609 9,027
Impairment (1,424) (2,154) (62) - - (3,640)
At 27 September 2020 and at 3 October 2021 2,609 992 - 2,418 6,609 12,628
Tavolino Riverside, Strada Southbank and Strada Dockside are included within
the restaurant operating segment. Rare Bird Hotels at Sonning Limited and Rare
Bird Hotels at Streatley Limited together make up the hotel operating segment.
Restaurant segment
The key assumptions for the value-in-use calculations are those regarding the
discount rate, trading forecasts and growth rates. A pre-tax discount rate of
12.0% was used (2020: 12.8%), based on the Group's WACC and comparable
businesses in the sector. Cash flows in line with 3 year forecasts were used,
which incorporate a reasonably foreseeable, as at 3 October 2021, future
impact of the Covid-19 pandemic and assumptions concerning the rate at which
site level cash flows will recover. Cash flows beyond the forecast period are
extended out to the end of the lease terms at a 2% growth rate. The key
assumption for the fair value calculations is the multiple applied to site
EBITDA. A multiple of 5 times site EBITDA was used (2020: 5 times) based on
expected market value if the sites were to be sold as individual trading
businesses.
Impairment testing resulted in no impairment of goodwill due to the
recoverable amount, being value-in-use, at 3 October 2021 being higher than
the goodwill recognized in the restaurant segment.
Given the global pandemic and its ongoing impact on the UK hospitality sector
there is particular sensitivity to the forecasts prepared in connection with
the impairment review as at 3 October 2021. The estimate of recoverable amount
for the restaurant segment is particularly sensitive to the discount rate and
trading forecast assumptions. If the discount rate used is increased by 2%,
the forecast 3 year total EBITDA is reduced by 10%, and the terminal growth
rate reduced by 1%, an impairment loss of £220,000 for the period ended 3
October 2021 would have to be recognised against goodwill (2020: £856,000).
Management is not currently aware of any other reasonably possible changes to
key assumptions that would cause a unit's carrying amount to exceed its
recoverable amount.
Hotel segment
The key assumptions for the value-in-use calculations are those regarding the
discount rate, trading forecasts and growth rates. A pre-tax discount rate of
12.0% was used (2020: 12.8%), based on the Group's WACC and comparable
businesses in the sector. Cash flows in line with 3 year forecasts were used,
which incorporate a reasonably foreseeable, as at 3 October 2021, future
impact of the Covid-19 pandemic and assumptions concerning the rate at which
site level cash flows will recover. Cash flows beyond the forecast period are
extended at a terminal growth rate of 2%. The key assumption for the fair
value calculations is the multiple applied to site EBITDA. A multiple of 9
times site EBITDA was used (2020: 9 times) based on expected market value if
the entities were to be sold as individual trading businesses.
14 Intangible assets (continued)
Hotel segment (continued)
Impairment testing resulted in no requirement to reduce the carrying value of
goodwill in 2021 as the recoverable amounts of the CGUs, based on value-in-use
estimates, were £12,464,000 for Rare Bird Hotels at Sonning Limited (2020:
£14,469,000) and £17,648,000 for Rare Bird Hotels at Streatley Limited
(2020: £24,184,000). The headroom of recoverable amount over goodwill is
£10,327,000 and £11,809,000 respectively (2020:
£12,328,000 and £18,345,000).
The estimate of recoverable amount for the hotel segment is sensitive to the
discount rate, trading forecast assumptions and terminal growth rate. If the
discount rate used is increased by 2%, the forecast 3 year total EBITDA is
reduced by 10%, and the terminal growth rate reduced by 1%, the headroom
reduces to £6,653,000 for Rare Bird Hotels at Sonning Limited (2020:
£8,505,000) and £6,607,000 for Rare Bird Hotels at Streatley Limited (2020:
£11,940,000). Management is not currently aware of any other reasonably
possible changes to key assumptions that would cause a unit's carrying amount
to exceed its recoverable amount.
15 Property, plant and equipment
Group
Right-of-use assets Freehold property Leasehold improvem-ents Furniture, fittings and equipmen-t Assets under constru-ction IT equipme-nt Total
£ 000 £ 000 £ 000 £ 000 £ 000 £ 000 £ 000
Cost or valuation
At 27 September 2020 26,907 1,795 7,860 5,942 1,171 1,432 45,107
Additions 2,308 17 2,088 1,404 1,336 215 7,368
Disposals - - (701) (1,404) (60) (65) (2,230)
Transfers - 482 567 61 (1,111) 1 -
At 3 October 2021 29,215 2,294 9,814 6,003 1,336 1,583 50,245
Depreciation
At 27 September 2020 5,858 - 1,436 3,551 - 823 11,668
Charge for the period 2,023 - 374 1,267 - 244 3,909
Eliminated on disposal - - (54) (1,727) - (52) (1,833)
Impairment loss 610 - - - - - 610
At 3 October 2021 8,491 - 1,756 3,091 - 1,015 14,353
Carrying amount 3 October 2021 20,724 2,294 8,058 2,912 1,336 568 35,892
15 Property, plant and equipment (continued)
Right-of-use assets Freehold property Leasehold improvem-ents Furniture, fittings and equipmen-t Assets under constru-ction IT equipme-nt Total
£ 000 £ 000 £ 000 £ 000 £ 000 £ 000 £ 000
Cost or valuation
At 29 September 2019 19,038 - 8,499 4,972 105 1,311 33,925
Adjustment relating to prior periods - - 801 1,391 - 74 2,266
Additions 707 1,795 72 548 2,605 66 5,793
Acquired through business combination 11,532 - - 403 - 90 12,025
Disposals (4,370) - (2,383) (1,909) (102) (138) (8,902)
Transfers - - 871 537 (1,437) 29 -
At 27 September 2020 26,907 1,795 7,860 5,942 1,171 1,432 45,107
Depreciation
At 29 September 2019 4,832 - 1,609 2,550 - 604 9,595
Adjustment relating to prior periods - - 771 1,420 - 75 2,272
Charge for the period 1,272 - 431 902 - 227 2,832
Eliminated on disposal (1,862) - (1,510) (1,321) - (83) (4,776)
Impairment loss 1,616 - 135 - - - 1,751
At 27 September 2020 5,858 - 1,436 3,551 - 823 11,668
Carrying amount 27 September 2020 21,049 1,795 6,424 2,391 1,171 609
33,439
The Group's leasehold premises and improvements are stated at cost, being the
fair value at the date of acquisition, plus any additions at cost less any
subsequent accumulated depreciation. Work in progress relates to capital
expenditure on sites that have not started trading.
Depreciation is charged to cost of sales in the Statement of Comprehensive
Income for property, plant and equipment in use at the trading leasehold
premises. Depreciation on property, plant and equipment used by central
functions is charged to other expenses in the Statement of Comprehensive
Income.
At the period end an exercise was undertaken to review and determine the
assets still in use by the group. An adjustment relating to prior periods was
made to the cost and accumulated depreciation brought forward to re-instate
the depreciated items that had been removed from the note previously. There
was no material impact on the income statement.
15 Property, plant and equipment (continued)
The assets acquired through business combination comprise the fair value of
the property, plant and equipment of Rare Bird Hotels at Sonning Limited and
Rare Bird Hotels at Streatley Limited, acquired by the Group in September
2020.
Rental income from subletting right-of-use assets is recognised on a straight
line basis over the term of the relevant lease. It is netted against rental
costs and is recognised within cost of sales (2020: £55,000, 2021: £41,000).
The Group has determined that each site in the restaurant operating segment,
and each of the companies in the hotel operating segment are separate CGUs for
impairment testing purposes. Each CGU is tested for impairment at the balance
sheet date if there exists at that date any indicators of impairment. Losses
incurred by the Group pre Covid-19 as well as the ongoing Covid-19 pandemic
are considered indicators of potential impairment, accordingly all CGUs have
been tested for impairment by comparing the carrying amount of the assets to
recoverable amount. The recoverable amount is represented by the greater of
the individual CGU's fair value less costs of disposal and its value-in-use.
Restaurant segment
The key assumptions for the value-in-use calculations are those regarding the
discount rate, trading forecasts and growth rates. A discount rate of 12.0%
was used (2020: 12.0%), based on the Group's WACC and comparable businesses in
the sector. Cash flows in line with 3 year forecasts were used, which
incorporate an impact of the Covid-19 pandemic and assumptions concerning the
rate at which site level cash flows will recover. Cash flows beyond the
forecast period are extended out to the end of the lease terms at a 2% growth
rate. The key assumption for the fair value calculations is the multiple
applied to site EBITDA. A multiple of 5 times site EBITDA was used (2020: 5
times) based on expected market value if the sites were to be sold as
individual trading businesses.
Impairment testing resulted in the reduction of carrying amount to recoverable
amount, being value-in-use, for one CGU - in 2021, with the full charge
recognised against the restaurant segment. The charge was £610,000 against
right-of-use asset at Strada Dockside.
The estimate of recoverable amount for the restaurant segment is particularly
sensitive to the trading forecast assumptions. If the discount rate used is
increased by 2%, the forecast 3 year total EBITDA is reduced by 10%, and the
terminal growth rate reduced by 1%, a further impairment loss of £63,000 for
the period ended 3 October 2021 would have to be recognized against right of
use assets. Management is not currently aware of any other reasonably possible
changes to key assumptions that would cause a unit's carrying amount to exceed
its recoverable amount.
Hotel segment
As a result of the headroom identified during the goodwill impairment testing
of the hotel operating segment (see note 14), no impairment charge is required
in respect of the hotel segment.
16 Investments
Group subsidiaries
Name of subsidiary Principal activity Country of incorporation and registered office Proportion of ownership interest and voting rights held by the Group
2021 2020
Various Eateries Holdings Limited* Holding company United Kingdom 100% 100%
20 St Thomas Street, London, SE1 9RS
Rare Bird Hotels at Sonning Limited* Hotels and similar accommodation United Kingdom 100% 100%
20 St Thomas Street, London, SE1 9RS
Rare Bird Hotels at Streatley Limited* Hotels and similar accommodation United Kingdom 100% 100%
20 St Thomas Street, London, SE1 9RS
VEL Property Holdings Limited Buying and selling of own real estate United Kingdom 100% 100%
20 St Thomas Street, London, SE1 9RS
SCP Sugar Limited Holding company United Kingdom 100% 100%
20 St Thomas Street, London, SE1 9RS
Various Eateries Trading Limited Licensed restaurants United Kingdom 100% 100%
20 St Thomas Street, London, SE1 9RS
Noci Islington Limited Dormant United Kingdom 100% -
20 St Thomas Street, London, SE1 9RS
Coppa Club (Haslemere) Limited Dormant United Kingdom 100% -
20 St Thomas Street, London, SE1 9RS
Coppa Club Limited Dormant United Kingdom 100% 100%
20 St Thomas Street, London, SE1 9RS
Coppa Limited Dormant United Kingdom 100% 100%
20 St Thomas Street, London, SE1 9RS
*indicates direct investment of the Company; other companies are held by
direct subsidiaries
17 Inventories
Group
3 October 2021 27 September 2020
£ 000 £ 000
Food and drink 234 178
Consumables 312 223
546 401
Inventories recognised as an expense in the period totalled £5,078,000 (2020:
£4,509,000).
18 Trade and other receivables
Group
3 October 2021 27 September 2020
£ 000 £ 000
Trade receivables 137 248
Prepayments 579 317
Other receivables 788 24,365
1,504 24,930
All of the trade receivables were non-interest bearing, receivable under
normal commercial terms, and the directors do not consider there to be any
material expected credit loss. The directors consider that the carrying value
of trade and other receivables approximates to their fair value.
Other receivables includes £nil (2020: £23,523,000 in respect of net IPO
share issue proceeds).
19 Cash and bank balances
Group
3 October 2021 27 September 2020
£ 000 £ 000
Cash and bank balances 19,716 893
20 Trade and other payables
Group
3 October 2021 27 September 2020
£ 000 £ 000
Trade payables 1,544 2,621
Accrued expenses 5,028 3,813
Social security and other taxes 923 988
Other payables 906 1,186
Lease liabilities due in less than one year 2,842 2,384
11,243 10,992
21 Current borrowings
Group
3 October 2021 27 September 2020
£ 000 £ 000
Borrowings from related parties 12,438 2,402
Borrowings from related parties classed as payable within 12 months includes
two deep discounted bond instruments issued by VEL Property Holdings Limited
and by Various Eateries Trading Limited.
The deep discounted bond instrument issued by VEL Property Holdings Limited
was issued in January 2021, the subscription amount was £2,438,000, the
nominal value £2,584,000, and the final redemption date is 14 January 2022.
The discount is recognised between subscription and redemption date, resulting
in £105,000 of accrued financing costs as at the reporting date.
The deep discounted bond instrument issued by Various Eateries Trading Limited
was in September 2020 as part of a capital restructure (see note 24), with a
subscription price of £8,962,000, a nominal value of £9,515,000, and a term
of 19 months. The discount is recognised between subscription and redemption
date resulting in £349,000 of accrued financing costs at the reporting date.
The balance of £1,038,000 (2020: £1,038,000) under the August 2019 loan
agreement matures in April 2022, bears cash settled interest at 3.75% above
LIBOR (2020: cash settled interest at 3.75% above LIBOR), and contains an
EBITDA multiple covenant first tested in September 2020 that has been waived
until April 2022.
22 Non-current borrowings
Group
3 October 2021 27 September 2020
£ 000 £ 000
Borrowings from related parties - 10,000
Lease liabilities due after more than one year 22,128 21,482
22,128 31,482
The loans and borrowings classified as financial instruments are disclosed in
note 26.
The Group's exposure to market and liquidity risk in respect of loans and
borrowings is disclosed in the financial instruments note.
23 Provisions for liabilities
Group 53 weeks ended 3 October 2021
Authorised Guarantee Agreements ('AGAs') £ 000
At start of financial period 461
Release of provision in the year (104)
At end of financial period 357
The provision relates to the annual rental cost of three (2020: four)
previously operated sites that have been disposed of via assignment of lease
and include Authorised Guarantee Agreements ('AGAs') as part of the assignment
arrangement (see also note 30).
The provision related to one site was released in the year following a new
lease resulting in the potential cost being removed.
24 Share capital and share premium
Authorised, allotted, called-up and fully paid shares
3 October 2021 27 September 2020
No. 000 £ 000 No. 000 £ 000
Ordinary shares of £0.01 each 89,008 890 89,008 890
24 Share capital and share premium (continued)
Movements in ordinary share capital
Date Shares Nominal value £ 000
At incorporation 26 June 2020 1 £1.00 -
Share subdivision 27 August 2020 99 £0.01 -
Share-for-share exchange 27 August 2020 11,111,011 £0.01 111
Share conversion 18 September 2020 23,809,522 £0.01 238
Issue of shares on IPO 25 September 2020 34,246,576 £0.01 342
Issue of other shares 18 September 2020 19,841,268 £0.01 198
Balance 3 October 2021 89,008,477 890
There were no movements in ordinary share capital in the period ended 3
October 2021
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the
proceeds on the winding up of the Company in proportion to the number of and
amounts paid on the shares held. The fully paid ordinary shares have a par
value of £0.01 and the company does not have a limited amount of authorised
capital.
Share-for-share exchange
The Company was incorporated on 26 June 2020 with one ordinary share of
£1.00. On 27 August 2020 the shareholders of Various Eateries Holdings
Limited ('VEHL') exchanged their ordinary shares in VEHL for ordinary shares
in the Company.
Share conversion
On 18 September 2020, the Group carried out a pre-AIM float capital
restructure in the form of a debt for equity swap whereby deep discounted bond
instruments issued by Various Eateries Trading Limited in 2020 and a
proportion of the balance under the August 2019 loan agreement were repaid via
equity issued by the Company. The reduction of debt was achieved by way of
issue of a new deep discounted bond instrument by Various Eateries Trading
Limited (see note 22) and successive novation of £15,488,000 of the balance
upwards through the Group. The intercompany balance created by this novation
makes up a proportion of the receivables from subsidiaries disclosed in note
18.
Issue of shares
The shares issued on 18 September 2020 includes 12,698,412 shares issued as
consideration for the purchase of the entire issued ordinary share capital of
Rare Bird Hotels at Sonning Limited and Rare Bird Hotels at Streatley Limited
(see note 6), and 5,809,523 shares issued under a share-based payment scheme
(see note 27).
25 Retirement benefit schemes
Group personal pension scheme
The Group operates group personal pension schemes for all qualifying
employees. The assets of the schemes are
held separately from those of the Group.
The total cost charged to income of £179,000 (2020: £178,000) represents
contributions payable to these schemes by the Group at rates specified in the
rules of the schemes. As at 3 October 2021, contributions of £26,000 (2020:
£23,000) due in respect of the current reporting period had not been paid
over to the schemes.
26 Financial instruments
Group
Financial assets - loans and receivables
3 October 2021 27 September 2020
£ 000 £ 000
Cash at bank and in hand 19,716 893
Trade and other receivables 925 24,613
20,641 25,506
Group
Reconciliation of liabilities arising from financing activities
Lease liabilities Other borrowings Total
£ 000 £ 000 £ 000
At start of financial period 23,866 12,402 36,268
New borrowings 2,307 36 2,343
Interest charge 1,108 - 1,108
Repayments during the period (2,311) - (2,311)
At end of financial period 24,970 12,438 37,408
Valuation methods and assumptions
Trade receivables are all due for settlement in less than one year. The
Directors consider that the carrying amount of trade and other receivables is
approximately equal to their fair value due to their short term nature.
Financial liabilities at amortised cost
3 October 2021 27 September 2020
£ 000 £ 000
Trade and other payables 32,447 31,486
Borrowings from related parties 12,438 12,402
44,885 43,888
26 Financial instruments (continued)
Valuation methods and assumptions
The Directors consider that the carrying amount of trade and other payables is
approximately equal to their fair value due to their short term nature. The
fair value of financial liabilities is estimated by discounting the remaining
contractual maturities at the current market interest rate that is available
for similar financial liabilities.
Fair value hierarchy
The tables above detail the company's assets and liabilities disclosed at fair
value. Using a three level hierarchy, based on the lowest level of input that
is significant to the entire fair value measurement, all assets and
liabilities shown above are considered to be level 3: 'Unobservable inputs for
the asset or liability'. There were no transfers between levels during the
financial period.
Financial risk management and impairment of financial assets
The Group's activities expose it to a variety of financial instrument risks.
The risk management policies employed by the Group to manage these risks are
discussed below. The primary objectives of the financial instrument risk
management function are to establish risk limits, and then ensure that
exposure to risks stay within these limits.
Capital risk management
The Company's objectives when managing capital is to safeguard its ability to
continue as a going concern, so that it can provide returns for shareholders
and benefits for other stakeholders and to maintain an optimum capital
structure to reduce the cost of capital.
Capital is regarded as total equity, as recognised in the statement of
financial position, plus net debt. Net debt is calculated as total borrowings
less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Company may adjust
the amount of dividends paid to shareholders, return capital to shareholders,
issue new shares or sell assets to reduce debt.
The Company is subject to certain financing arrangements covenants and meeting
these is given priority in all capital risk management decisions. There have
been no events of default on the financing arrangements during the financial
period.
Credit risk management
The Group's credit risk is attributable to trade and other receivables and
cash with the carrying amount best representing the maximum exposure to credit
risk. The Group places its cash with banks with high quality credit standings.
Trade and other receivables relate to day to day activities which are entered
into with creditworthy counterparties.
Market risk management
The Group's activities expose it economic factors, the Directors closely
monitor market conditions and consider any impact on the Group's existing
strategy.
Interest rate risk management
The Group is exposed to interest rate risk as the Group's borrowings have an
interest rate of 3.75% above LIBOR.
Liquidity risk management
Liquidity risk arises from the Group's management of working capital and the
finance charges and principal repayments on its debt instruments. It is the
risk that the Group will encounter difficulty in meeting its financial
obligations as they fall due.
Management review cashflow forecasts on a regular basis to determine whether
the Group has sufficient cash reserves to meet future working capital
requirements and to take advantage of business opportunities.
26 Financial instruments (continued)
Remaining contractual maturities
The following tables detail the company's remaining contractual maturity for
its financial instrument liabilities. The tables have been drawn up based on
the undiscounted cash flows of financial liabilities based on the earliest
date on which the financial liabilities are required to be paid. The tables
include both interest and principal cash flows disclosed as remaining
contractual maturities and therefore these totals may differ from their
carrying amount in the statement of financial position.
Weighted average interest rate 1 year or less Between 1 and 2 years Between 2 and 5 years Over 5 years Remaining contractual maturities
2020 % £ 000 £ 000 £ 000 £ 000 £ 000
Non-derivatives
Non-interest bearing
Trade payables - 2,621 - - - 2,621
Other payables - 4,999 - - - 4,999
Borrowings - Deep Discounted Bond - 2,438 9,515 - - 11,953
Interest-bearing
Borrowings - loan 3.75% + LIBOR - 1,038 - - 1,038
Lease liability 4.5% 2,526 2,666 8,015 19,487 32,694
12,584 13,219 8,015 19,487 53,305
Weighted average interest rate 1 year or less Between 1 and 2 years Between 2 and 5 years Over 5 years Remaining contractual maturities
2021 % £ 000 £ 000 £ 000 £ 000 £ 000
Non-derivatives
Non-interest bearing
Trade payables - 1,544 - - - 1,544
Other payables - 5,934 - - - 5,934
Borrowings - Deep Discounted Bond - 12,099 - - - 12,099
Interest-bearing
Borrowings - loan 3.75% + LIBOR 1,038 - - - 1,038
Lease liability 4.5% 2,970 2,999 8,627 18,387 32,983
23,585 2,999 8,627 18,387 53,598
The cash flows in the maturity analysis above are not expected to occur
significantly earlier than contractually disclosed above.
27 Share based payments
As at 3 October 2021, the Group maintained three separate share based payment
scheme for employee remuneration (2020: one):
· Various Eateries Joint Share Ownership Scheme ("JSOP Scheme 1")
· Various Eateries Joint Share Ownership Scheme ("JSOP Scheme 2")
· Various Eateries Company Share Option Plan ("CSOP")
JSOP Scheme 1 - Options granted on 18 September 2020.
In accordance with IFRS 2 "Share-based Payment", the value of the awards is
measured at fair value at the date of the grant. The fair value is expensed on
a straight-line basis over the vesting period, based on management's estimate
of the number of shares that will eventually vest. A charge of £818,000
(2020: £nil) has been recognised in the income statement by the Group in the
period ended 3 October 2021.
The JSOP is part of the remuneration package of the Group's senior management.
Participants in this scheme have to be employed until the end of the agreed
vesting period. Upon vesting, the holder is entitled to purchase ordinary
shares at the market price determined at grant date.
JSOP (Scheme 1)
Number of shares Exercise price per share (£)
Outstanding at 27 September 2020 5,809,523 0.73
Granted - -
Outstanding at 3 October 2021 5,809,523 0.73
Exercisable at 3 October 2021 - -
The fair value of these options granted was determined using a Black-Scholes
model. The following principal assumptions were used in the valuation:
JSOP
Grant date 18 September 2020
Vesting period ends 31 August 2022
Share price at date of grant £0.73
Volatility 66.98%
Option life 1.95 years
Dividend yield 0.00%
Risk-free investment rate (0.13)%
Fair value per option at grant date £0.26
Exercise price at date of grant £0.73
Exercisable from / to 31 August 2022 /
31 August 2030
Remaining contractual life 0.92 years
The historical volatility has been calculated based on the share returns of
four comparators for a period preceding the valuation date equal to the
initial expected term of the options, i.e. a period of 1.92 years. The total
estimated fair value of the options granted on 18 September 2020 to be
recognised over the vesting period is £1,531,000.
27 Share based payments (continued)
JSOP Scheme 2 - Options granted on 11 May 2021.
A charge of £20,000 (2020: £nil) has been recognised in the income statement
by the Group in the period ended 3 October 2021.
The JSOP is part of the remuneration package of the Group's senior management.
Participants in this scheme have to be employed until the end of the agreed
vesting period. Upon vesting, the holder is entitled to purchase ordinary
shares at the market price determined at grant date.
JSOP (scheme 2)
Number of shares Exercise price per share (£)
Outstanding at 27 September 2020 - -
Granted 360,000 1.09
Outstanding at 3 October 2021 360,000 1.09
Exercisable at 3 October 2021 - -
JSOP
Grant date 11 May 2021
Vesting period ends Various
Share price at date of grant £1.03
Volatility 64.17%
Option life 3.89
Dividend yield 0.00%
Risk-free investment rate 0.24%
Exercise price at date of grant £1.09
Exercisable from / to 31 March 2025 / 31 March 2026
Remaining contractual life 3.89 years
The historical volatility has been calculated based on the share returns of
four comparators for a period preceding the valuation date equal to the
initial expected term of the options, i.e. a period of 3.89 years. The total
estimated fair value of the options granted on 11 May 2021 to be recognised in
expenses over the vesting period is £192,685.
CSOP - Options granted on 11 May 2021.
A charge of £6,000 (2020: £nil) has been recognised in the income statement
by the Group in the period ended 3 October 2021.
27 Share based payments (continued)
CSOP
Number of shares Exercise price per share (£)
Outstanding at 27 September 2020 - -
Granted 92,402 1.09
Outstanding at 3 October 2021 92,402 1.09
The fair value of the options is estimated at the date of grant using a
Black-Scholes valuation method. The total estimated fair value of the options
granted during the year on 11 May 2021 to be recognised over the vesting
period is £44,999.
28 Related party transactions
Transactions with related parties include management charges for services
provided by Osmond Capital Limited, which has common shareholders with
controlling influence with the Company, of £200,000 (2020: £390,000). In
addition, H E M Osmond is the principal lender of the £10,000,000 borrowings
(2020: £10,000,000) and a shareholder with controlling influence of Xercise2
Ltd which is a significant shareholder of the Company.
As at 3 October 2021, there was £20,275 (2020: £397,000) of accrued cash
interest payable on borrowings from related parties, of which £nil was due to
Xercise2 Ltd (2020: £341,000).
Remuneration of key management personnel
The remuneration of the Directors of the Company and its subsidiaries and
other key management, who are the key management personnel of the Group, is
set out below in aggregate for each of the categories specified in IAS 24
"Related Party Disclosures".
53 weeks ended 3 October 2021 52 weeks ended 27 September 2020
£ 000 £ 000
Salaries and other short term employee benefits 716 600
Employers national insurance contributions 88 75
Post-employment benefits 15 12
819 687
28 Related party transactions (continued)
During the period, the Group entered into the following trading transactions
with related parties:
53 weeks ended 3 October 2021 52 weeks ended 27 September 2020
Purchase of goods / services Sale of goods / services Purchase of goods / services Sale of goods / services
£ 000 £ 000 £ 000 £ 000
SCP Newbury Manor Limited 15 - - -
Osmond Capital Limited 200 - - -
The Great House at Sonning Limited 657 - 364 351
Rare Bird Hotels Limited - - 491 281
CCO Cygnet Limited 748 - - -
Mudlark Hotels Limited - - - 29
1,620 - 855 661
The following amounts were outstanding at the reporting date:
27 September 2020
3 October 2021
Amounts owed to related parties Amounts owed by related parties Amounts owed to related parties Amounts owed by related parties
£ 000 £ 000 £ 000 £ 000
The Great House at Sonning Limited 1 53 - -
Rare Bird Hotels Limited - 119 - -
CCO Cygnet Limited - - - -
Mudlark Hotels Limited - - 2 38
1 172 2 38
SCP Newbury Manor Limited, Osmond Capital Limited, The Great House at Sonning
Limited, Rare Bird Hotels Limited, CCO Cygnet Limited and Mudlark Hotels
Limited are related parties of the Group because they have common shareholders
with controlling influence with the Group. The trade and certain assets of The
Great House at Sonning Limited and Rare Bird Hotels Limited were acquired by
newly incorporated operating companies in August 2020, Rare Bird Hotels at
Sonning Limited and Rare Bird Hotels at Streatley Limited respectively. The
entire issued share capital of these companies was subsequently acquired by
the Company in September 2020.
Sales and purchases of goods and services between the related parties were
made at market prices discounted to reflect the relationships between the
parties.
The amounts outstanding are unsecured and will be settled in cash. No
guarantees have been given or received. No provisions have been made for
doubtful debts in respect of the amounts owed by related parties.
29 Post balance sheet events
Coppa Club Putney
In November 2021, the Group opened its newest site at Putney.
VEL Property Holdings funding
Within current liabilities at the year end, there was a deep discounted bond
instrument with a nominal value of £2,584,000 and a final redemption date of
14 January 2022. In January 2022, this was replaced by a new deep discounted
bond instrument with a nominal value of £2,791,022 and a final redemption
date of 14 January 2023.
Various Eateries Trading Limited funding
Within current liabilities (note 21), is a deep discounted bond due to be
redeemed in April 2022. On 24 February 2022, a deep discounted bond
instrument, with a nominal value of £9,515,000 and a final redemption date of
April 2023, was issued to replace the existing deep discounted bond.
Grant of share options
On 17 January 2022, the company issued options over 990,440 shares to various
directors.
30 Contingent liabilities
Authorised Guarantee Agreements
There are 9 (2020: 9) previously operated sites that have been disposed of via
assignment of lease and include Authorised Guarantee Agreements ('AGAs') as
part of the assignment arrangement. There is a risk that the sites would be
returned if the assigned leaseholders were to default on their contractual
obligations with their respective landlords, the risk of which has been
heightened as a result of the coronavirus (Covid-19) outbreak. The total
annual rental cost for these sites is £663,000, of which £357,000 (2020:
£461,000) has been provided for (see note 23).
CJRS claim
The Group made material claims under the CJRS schemes during the period (and
prior period) to support the business through the pandemic. Given multiple
changes to the rules governing the schemes, as well as the degree of
complexity in the various rules, the Group undertook an external review of
past claims to confirm their validity. The directors are of the opinion that
claims made to date are valid and materially correct and so do not consider
the likelihood of material outflow as a result of this review to be probable.
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