REG - Various Eateries PLC - Final Results
28/02/2023 07:00
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RNS Number : 2179R Various Eateries PLC 28 February 2023
VARIOUS EATERIES PLC
("Various Eateries" or "the Company"
and with its subsidiaries "the Group")
Final Results
52-week period ending 2 October 2022
Good strategic progress and continued commercial resilience
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 52 weeks ended 2 October 2022.
Financials
· Revenue growth of 82% to £40.7m (2021: £22.3m)
· Adjusted EBITDA* growth of 193% to £3.5m (2021: £1.2m)
· Total loss before tax of £7.2m (2021: loss of £3.7m)
· Cash at bank of £9.4m (2021: £19.7m)
· Net debt of £3.3m (2021: net cash of £7.3m)
*see Financial Review
Highlights
· Positive trading performance against a challenging backdrop
· Coppa Club estate grew 1% LFL in H2 (a period of relatively normal trading)
compared with 2019 (the most recent year with uninterrupted comparable
trading)
· Encouraging Tavolino performance (meaningful comparisons not yet available
following July 2020 opening)
· Sales of first Noci in Islington surpassed management expectations since March
2022 opening
· Continued steady delivery against growth strategy
· Opening of four new venues: Coppa Club Putney, Coppa Club Haslemere, Coppa
Club Bath and Noci Islington (2021: two new venues)
· Coppa Club Cardiff, Coppa Club Guildford, Coppa Club Farnham and Noci
Battersea Power Station due to open in 2023
· Appointment of Lyndsay Anderson as Marketing Director and, post-period, Sharon
Badalek announced as new CFO (starting 1 April 2023)
· Ongoing mitigation of the inflationary environment
· Energy costs hedged materially from a volume perspective through to summer
2025
· Steps taken to manage margin pressures including comprehensive menu
re-engineering exercise at period end
· Confident of delivering another year of continued progress in FY 2023
· Uncertain outlook for inflationary pressures and ongoing threat of negative
impact of train strikes
· Growing pipeline of high-quality sites; intention to pursue expansion plans at
a measured pace
· Diverse mix of brands aligned to modern consumer needs and chosen pricing
points leave us well-positioned to navigate a recessionary environment
Andy Bassadone, Executive Chairman of Various Eateries, said:
"To have made the progress we have despite the widespread challenges we and
many others in the sector have faced is testament to the hard work of our
teams and the enduring appeal of our brands, even in times of economic
uncertainty.
"There continues to be a complex picture of industry-wide pressures that make
it difficult to predict exactly how the coming months will unfold.
Nonetheless, we remain focused on executing our strategy, and are confident
that we will emerge strongly once conditions improve."
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 later this week
(www.variouseateries.co.uk (http://www.variouseateries.co.uk) ).
Enquiries
Various Eateries plc Via Alma PR
Andy Bassadone Executive Chairman
Yishay Malkov Chief Executive Officer
James Darwent Interim Chief Financial Officer
WH Ireland Limited Sole Broker and NOMAD Tel: +44 (0)20 7220 1666
Broking
Harry Ansell
Nominated Adviser
Katy Mitchell
Megan Liddell
Alma PR Financial PR Tel: +44 (0)20 3405 0205
David Ison variouseateries@almapr.co.uk
Pippa Crabtree
About Various Eateries
Various Eateries owns, develops and operates restaurant, clubhouse 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) and Matt
Fanthorpe (Chef Director, a non-board position).
The Group operates three core brands across 15 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
· Noci, a modern, neighbourhood pasta-only concept which serves very
high-quality dishes at reasonable prices
For more information visit www.variouseateries.co.uk
(http://www.variouseateries.co.uk)
CHAIRMAN'S AND CHIEF EXECUTIVE'S STATEMENT
The 52 weeks ending 2 October 2022 was another period of good strategic
progress and commercial resilience against a backdrop characterised by
industry-wide challenges.
As previously announced, sales were slightly ahead of market expectations,
demonstrating the lasting appeal of our proposition despite the
well-publicised headwinds. While profitability was impacted by our decision to
resist passing price increases onto customers in full until there was more
certainty around the trajectory of inflation, post-period end, we have taken
action to enhance margins.
We were delighted to open four new venues in the year - our busiest in terms
of site acquisition yet - including our first Noci restaurant in Islington,
which has been a success.
Looking ahead, while macroeconomic uncertainty is set to persist in the short
term, we believe Various Eateries continues to be in a favourable position,
relative to many. It is our view that we have three strong brands aligned with
modern consumer trends that are set to endure for many years to come, a proven
rollout strategy with enough flexibility to ensure we keep moving forward, and
a motivated leadership team with complementary skills and experience to
deliver it.
There will no doubt be challenges to overcome in FY23, but we are
well-prepared and confident of another year of steady, continued progress.
Ambition to create a significant player in UK leisure
Various Eateries is a modern, high-quality hospitality group that is focused
on creating concepts with a solid value-proposition. The Group has several
different but complementary brands that are aligned to the needs of the modern
consumer, from single-product venues like Noci, that speak to the consumers'
desire for high-quality, artisan products delivered at an excellent price, to
the Coppa Club concept, with its all-day ethos; that meets consumers' needs
for a flexible out-of-home space to work and socialise from. This variety of
offer was consciously designed to ensure resilience during difficult economic
conditions.
Various Eateries has a highly experienced management team, that over several
decades have together and independently played leading roles in building some
of the most successful brands in UK hospitality. We have seen market
conditions at both ends of the spectrum and everything in between and, as a
result, are well versed in not only navigating adversity but recognising
opportunities within it.
Various Eateries was conceived as one such opportunity. Although recent years
have been characterised by continued uncertainty, and the timings and severity
of challenges have at times been difficult to predict, the overall direction
of travel of the industry remains the same, and our confidence in and
enthusiasm for our strategy is as high as it has ever been.
In Coppa Club, we have a multi-use, all-day concept that combines restaurant,
terrace, café, lounge, bar and remote-working spaces under one roof. We
operate several formats but are extremely selective in the sites we take. As a
result, we have developed a highly desirable estate of prime locations
designed to capture the growing demand for this kind of offering and, as an
operator with long-term growth ambitions, will continue in a similar vein.
Tavolino addresses the gap in the market for high-quality Italian food at
mid-market prices. Located on the river by London Bridge, with year-on-year
sales growth, the restaurant has shown real promise and we continue to harbour
plans to open new sites when conditions are right.
The first restaurant of our newest brand, Noci, opened in Islington, London,
in March 2022. Noci, a modern, neighbourhood pasta restaurant, has been
received positively in the local community and beyond and we are excited by
the brand's potential. Although early in its existence, we are confident it
will go on to form an important part of the Group.
While the pace of the rollout of our brands has been impacted by Covid and the
elevated industry-wide cost pressures that have materialised subsequently, the
rate at which we open new sites will continue to be dictated by the number of
opportunities we see that meet our strict criteria rather than the need to
grow at a particular rate.
Solid trading performance
Prior year performance comparisons remain difficult given the extended periods
of Covid-related restrictions between March 2020 and January 2022. However,
for the last six months of the financial year (4 April to 2 October 2022), a
period of relatively normal trading, the Coppa estate achieved an LFL growth
of 1% compared with 2019 (2019 being the most recent year with uninterrupted
comparable trading).
New sites opened in the year have, overall, performed encouragingly under the
circumstances. The performance of our Townhouse Coppa Club in central Bath
since opening in August 2022 has been particularly noteworthy, attracting city
centre workers and residents through the day and night. In 2023, the Cardiff,
Farnham and Guildford sites will take similar formats, and enjoy similarly
healthy footfall, giving us a high degree of confidence in their prospects.
Our hotels delivered a steady performance with high occupancy and room rates.
Against an exceptional prior year that benefitted from high levels of pent-up
demand post Covid and the rise in popularity of the 'staycation', we are
pleased with their contribution.
The performance of Tavolino has also been in line with expectation, with
central London footfall increasing as workers returned to the office. Opening
in July 2020, meaningful performance comparisons are particularly difficult
given there have been no reporting periods of uninterrupted trading.
Nonetheless, we have been satisfied with the steady improvement we have seen
over time and remain optimistic about the brand's prospects.
Since opening in March, Noci has surpassed expectations both in terms of
performance and profile across the capital.
Given challenges such as the impact of the Covid escalation on our ability to
trade and consumer sentiment in the winter, the cost-of-living crisis in the
months since and ongoing train strikes, the Board believes the trading
performance in the year to be a positive result.
Ongoing mitigation of industry-wide challenges
We had considerable success in mitigating many of the well-publicised
challenges affecting the industry during the year.
While we are not completely immune to energy price rises, we have taken steps
to hedge ourselves materially from a volume perspective, which we expect to
protect us for at least the next 18 months.
At the end of the period, and moving into the new financial year, we carried
out a comprehensive menu re-engineering exercise across the Group. The
exercise comprised both food and beverage, enhancing margins with only modest
price increases and without sacrificing quality.
Continued delivery of our expansion strategy
During the period, we opened four new venues: Coppa Clubs in Putney, Haslemere
and Bath as well as the Group's first Noci in Islington, taking the total
number of sites in the group to 15.
In November 2021, Coppa Club Putney opened on the River Thames, benefitting
from a wraparound terrace looking onto the water. This generous all-day space
has been cleverly designed with different corners for work, socialising and
private dining.
In May 2022, Coppa Club Haslemere opened and brought fresh energy and design
to an old hotel property. A destination venue, this site benefits from
overnight stays, private dining, work and socialising spaces and indoor and
outdoor eating and drinking.
August 2022 saw the opening of Coppa Club Bath, the first of the Townhouse
venues. The Townhouse concept allows Coppa Club to capitalise on former retail
sites and create multi-floor venues that are buzzy from day-to-night; these
generous spaces offer both informal and destination-led eating and drinking
under one roof. The Bath Townhouse, located on Old Bond Street in the centre
of the city's shopping district, was an innovative redesign of a former Gap
site. Busy from early to late, locals and tourists visit the venue for morning
coffees through to late night dinner and drinks.
In March 2022, we opened the first Noci site overlooking Islington Green, a
perennially popular neighbourhood. A fresh pasta and relaxed cocktail concept,
the Noci site quickly settled into its first location and became known for its
quality and atmosphere, the site has performed strongly since opening.
We remain on track to open Coppa Club sites in Cardiff, Guildford and Farnham
in 2023. A second site for Noci will also open during the year at the iconic
Battersea Power Station.
Coppa Club Guildford will be the second of the Townhouse variety of Coppa
Clubs. A three-storey, all-day venue on the busy High Street, it will boast
cafe-work space on the ground floor and a bold mural leading the guests' eye
up the stairwell to the first-floor dining space and destinational bar on the
top floor.
Coppa Club Farnham opens in Brightwells Yard, a buzzy new neighbourhood in
central Farnham. Benefitting from a generous outdoor terrace, this will be a
unique, all-day offering for locals in a Grade II Listed building.
Coppa Club Cardiff opens in the Welsh capital's prime shopping district. With
a prominent cafe-bar space on the ground floor and a cosy outdoor terrace,
guests will then journey up the first floor to the centrepiece bar, private
dining room and flexible spaces for eating, drinking, and socialising.
Building on the popularity of the original Islington Green site, the newest
Noci will have the same laid- back, friendly vibe of the original, set in the
iconic Battersea Power Station. Benefitting from both a strong corporate and
tourist market on its doorstep, the latest Noci site will maintain a focus on
artisan pasta and cocktails on tap to ensure we can deliver a high-quality
product, at high-volume.
While there is an increasing number of good sites available on increasingly
advantageous terms, build costs have increased significantly and the economic
picture remains uncertain. We will therefore continue to exercise caution in
our expansion plans as we move through the new financial year, only proceeding
with prospective sites that meet our strict criteria for long-term,
sustainable success.
The backbone of our business: our people
Our venue and head office teams once again demonstrated an exceptional
commitment to providing outstanding customer service and memorable experiences
for customers. It was another year of
testing circumstances caused by challenging market conditions, but our
colleagues rose to the challenge. On behalf of the Board, we would like to
thank all our colleagues across the Group.
During the period, we continued to recruit and train large numbers of often
young and inexperienced staff. While one of the biggest cost increases in the
year, we continue to believe it to be the right strategy to ensure we maintain
our opening hours, that our service remains to the high standards we expect,
and to equip people with skills that will benefit them and society for life.
Alongside significant investment in our venue teams, our senior team has gone
from strength to strength. In August 2022 we appointed Lyndsay Anderson as
Marketing Director. In the months Lyndsay has been at the business, she has
been instrumental in taking our brand and marketing strategies to the next
level and asserted herself as a pivotal member of the senior leadership team.
Post period end, on 9 February 2023, we announced the appointment of Sharon
Badelek as Chief Financial Officer and board member with effect from 1 April
2023. Sharon has an established track record of driving growth in businesses
in our sector, with an impressive CV that includes senior financial positions
at RedCat Pub Company, Vue Entertainment and Novus Leisure Limited. To have
attracted someone of Sharon's calibre demonstrates the strength of our
proposition and ambition and we look forward to benefitting from her counsel.
Sharon replaces Oliver Williams, who left the Company on 11 November 2022.
Oliver joined Various Eateries in 2018 and in the years since played an
integral role in the Company's successful listing on AIM and was instrumental
in navigating the pandemic while strengthening the finance function of the
business. We are thankful for his contribution and wish him well.
James Darwent is currently interim CFO and will remain with the Group and on
the Board until Sharon's appointment in April 2023.
Market conditions present opportunity
In January 2023, in its coverage of the restructuring of a well-known
restaurant group, the BBC provided the results of its analysis of corporate
insolvency notices, finding that 320 businesses in the food service industry
in the UK - restaurants, pubs, cafés and catering firms - were forced to
initiate insolvency procedures in December 2022. This, according to the BBC,
was an increase of 41% compared to the same month in 2019, before the
pandemic. In total, the BBC said, 6,613 hospitality firms in the UK have
started insolvency proceedings since 2020.
Issue 37 of the AlixPartners/CGA HospitalityMarketMonitor included some stark
statistics regarding closures in the UK in the fourth quarter of calendar year
2022, with a net decline of 1,611 licensed premises. The report states: This
represents a 1.6% contraction between September and December and is equivalent
to nearly 18 closures every day. It means the sector saw a net decline of more
than 4,800 premises, or 4.5% of its total, across the whole of 2022. More than
three quarters of these closures - 3,841 premises - occurred in the second
half of the year as business pressures intensified. This is an even worse
performance than in 2021, when the COVID-19 pandemic was wrecking trade.
As we have maintained since IPO in September 2020, while it is sad to see our
industry peers fall by the wayside, the increasing number of high-quality
sites becoming available at extremely attractive rates presents us with a
growing opportunity.
Our three new publicly confirmed Coppa Club venues are a good illustration of
this. It is very unlikely they would have become available had it not been for
the pandemic, and certainly not with the lease terms and at the rates we have
been able to secure them on. Similarly, we are seeing an influx of fully
fitted restaurants coming to the market that fit the criteria for Noci at no
premium, giving us excellent strategic flexibility over the rollout.
As hospitality businesses struggle to contend with food and utility costs, we
are observing that consumers are reducing spending in response to the
cost-of-living crisis, and with the knowledge government support won't last
forever, it is hard to imagine a future where things don't get worse before
they get better. It is an unfortunate outlook for many, but an inevitable one,
and we believe we are ideally positioned to take on the best of those empty
sites and bring them back into the community as thriving all-day hubs and
restaurants.
Regarding reduced consumer spending, while obviously not immune to economic
downturn, we expect the Group to be a beneficiary of the emerging
premiumisation trend. As disposable income reduces, we are seeing more and
more people choosing quality over quantity and memorable experiences over the
everyday. Our brands and venues, engineered around first-class food and
destination venues at affordable prices, should continue to prove a popular
choice.
Current trading and outlook
Sales in the first quarter of FY23 were in line with management expectations.
As we move through the second quarter, it remains difficult to predict with
any certainty how this financial year will pan out. A mixed picture in October
and November followed by a strong festive period didn't offer a great deal in
terms of themes and patterns, and it is still too early to draw any meaningful
conclusions.
Beyond Various Eateries, there doesn't yet seem to be any real consensus in
the industry about what to expect, with opinion divided as to whether
inflation and interest rates will continue to rise, or whether the solid
Christmas many retail businesses enjoyed represented something of a turning
point.
One thing that is certain is the negative impact of the ongoing train strikes
on trading, particularly at our London sites. We saw evidence of this during
the year under review and post-period end, and expect them to be detrimental
as long as they continue.
We shouldn't let the current economic climate and prospect of further train
strikes overshadow the progress we continue to make, and the potential of the
Group. Our focus for FY23 will be on continued delivery of our strategy.
Regardless of what happens to inflation and demand in the short-term, we are
building the Group for the long-term, and will continue to make decisions, and
take actions we believe will ensure sustainable, profitable growth and value
creation for shareholders long into the future.
FINANCIAL REVIEW
Overview
The financial results for FY22 benefitted from all sites being open to trade
throughout the year compared to periods of closure in the preceding two years
due to the impact of Covid-19 restrictions, albeit trade was impacted in
December 2021 through to early 2022 from the Government's advice to stay at
home.
The KPI's of the Group's performance are summarised in the table below:
52 weeks ended 53 weeks ended Change
2 October 2022 3 October 2021
£ 000 £ 000 %
Revenue 40,667 22,348 82%
Adjusted EBITDA (before impact of IFRS 16)* 437 (1,178) 137%
Adjusted EBITDA* 3,531 1,204 193%
Operating Loss (5,209) (2,098) 148%
Total loss for the year after tax (7,215) (3,740) 93%
Basic and diluted earnings per share (pence) (8.8) (4.6) 93%
Cashflow from operating activities 1,861 3,292 (43)%
Net debt/ (cash) excluding lease liabilities 3,317 (7,278) 146%
Number of sites 15 12 25%
* not audited
Summary of financial performance for the 52 weeks ended 2 October 2022
52 weeks ended 53 weeks ended
2 October 2022 3 October 2021
£ 000 £ 000
Reconciliation of loss before tax to Adjusted EBITDA
Revenue 40,667 22,348
Loss before tax (7,215) (3,740)
Impairment 2,543 610
Net financing costs 2,006 1,642
Depreciation and amortisation 4,702 3,971
Insurance claim - (2,500)
Loss on disposal of property, plant and equipment 54 335
Authorised Guarantee Agreements provision - (104)
EBITDA 2,090 214
Pre-opening costs 755 295
Share-based payments 830 844
Non-trading site costs (144) (149)
Adjusted EBITDA* 3,531 1,204
Adjustment for rent expense (3,094) (2,382)
Adjusted EBITDA (before impact of IFRS 16)* 437 (1,178)
* not audited
FINANCIAL PERFORMANCE
Overall Group revenue increased by 82% (FY22: £40.7m, FY21: £22.3m),
resulting in an increase in adjusted EBITDA of £2.3m, from £1.2m in FY21 to
£3.5m in FY22. The Group benefitted from all sites being able to trade
throughout the period compared to FY21 in which there were significant
restrictions to trade at various times during the year.
The loss before tax has increased from £3.7m in FY21 to £7.2m in FY22. In
FY21 the Group benefitted from insurance claim proceeds in the amount of
£2.5m that related to the original Covid-19 restrictions in FY20. In FY22 the
Group incurred impairments to goodwill and right-of-use assets of £2.5m
(FY21: £0.6m). Furthermore, the Group's depreciation charge has increased by
£0.7m (from £4.0m in FY21 to £4.7m in FY22) and pre-opening costs have
increased by £0.5m (from £0.3m in FY21 to £0.8m in FY22), as we have
continued to invest in new sites.
Like for like sales performance (v calendar year 2019)
Oct 21 to Nov 21 Dec 21 to Jan 22 Feb 22 to Mar 22 Apr 22 to Sep 22
London (3 sites)* 8% -19% -3% 0%
Regional (5 sites)* 18% -7% 2% 7%
Total (8 sites)* 12% -14% -1% 3%
*not audited
Prior year comparisons remain difficult due to the impact of Covid-19 related
restrictions during FY21. In addition the period from December 2021 to January
2022 was impacted by the Government's advice to stay at home.
The Government's advice to stay at home in December 2021 had a significant
impact on all sites, particularly our three sites in London which would
traditionally benefit from significant Christmas trade. From April 2022
onwards, a period of relatively normal trading, our five regional sites
benefitted from a 7% uplift in like-for-like sales and this contributed to an
overall growth of 3% for the eight sites in that period. Trading in London saw
a slower recovery as tourism and office-based working had not yet recovered to
their pre-pandemic levels.
FINANCING COSTS
Financing costs of £2.0m (2021: £1.6m) have increased by £0.4m in the year.
This arises from increases in lease liability interest as we have invested in
new sites, together with slight increases in costs on the renewal of the deep
discounted bonds.
52 weeks ended 2 October 2022 53 weeks ended 3 October 2021
£ 000 £ 000
Financing costs on bank overdraft and borrowings 662 537
Lease liability interest 1,344 1,108
Financing costs 2,006 1,645
IMPAIRMENTS
A detailed review of each individual site has resulted an impairment charge of
£1.6m against goodwill (2021: nil), and of £1.0m (2021: £0.6m) against
right-of-use assets. Detail of the methodology is included in notes 13 and 14.
DIVIDENDS
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 AND BALANCE SHEET
Net cashflow from operations declined from £3.3m in FY21 to £1.9m in FY22.
In FY21 the Group benefitted from £2.5m relating to its Covid-19 Business
Interruption claim and therefore the underlying improvement in net cashflow
from operations was £1.1m.
During the period the Group invested £8.9m (2021: £5.1m) in capital
expenditure in support of future growth. New Coppa Club sites were opened in
Putney, Haslemere and Bath, and our first Noci was opened in Islington.
Furthermore some light refurbishment was undertaken across other locations.
As a result of the investment undertaken during the year the Group ended the
period with cash at bank of £9.4m (2021: £19.7m).
KEY PERFORMANCE INDICATORS ("KPIS")
The Group's indicators of performance are reviewed on a monthly and annual
basis. However with the prior period severely impacted by the conditions
faced by the Group arising from the Covid-19 pandemic, the total loss and EPS
figures are hard to assess in comparison to the prior year.
Consolidated Statement of Comprehensive Income
For the 52 weeks ended 2 October 2022
52 weeks ended 53 weeks ended
2 October 2022 3 October 2021
Note £ 000 £ 000
Revenue 4 40,667 22,348
Cost of sales (36,992) (20,729)
Gross profit 3,675 1,619
Central staff costs (2,617) (2,076)
Share-based payments 26 (830) (844)
Insurance claim proceeds - 2,500
Impairment of goodwill 13 (1,563) -
Impairment of property, plant and equipment 14 (980) (610)
Loss on disposal of property, plant and equipment (54) (335)
Other expenses 11 (2,840) (2,352)
Operating loss (5,209) (2,098)
Finance income 6 - 3
Financing costs 6 (2,006) (1,645)
Loss before tax (7,215) (3,740)
Tax 10 - -
Loss for the period (7,215) (3,740)
Earnings per share
Basic loss per share (pence) 12 (8.8) (4.6)
Diluted loss per share (pence) 12 (8.8) (4.6)
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 other comprehensive income is presented.
Consolidated Statement of Financial Position
As at 2 October 2022
2 October 2022 3 October 2021
Note £ 000 £ 000
Non-current assets
Intangible assets 13 11,214 12,841
Right-of-use assets 14 26,109 20,724
Other property, plant and equipment 14 21,592 15,168
58,915 48,733
Current assets
Inventories 16 808 546
Trade receivables 17 204 137
Other receivables 17 2,359 1,367
Cash and bank balances 18 9,390 19,716
12,761 21,766
Total assets 71,676 70,499
Current liabilities
Trade and other payables 19 (11,420) (11,243)
Borrowings 20 (12,707) (12,438)
Net current liabilities (11,366) (1,915)
Total assets less current liabilities 47,549 46,818
Non-current liabilities
Borrowings 21 (29,244) (22,128)
Provisions 22 (357) (357)
Total non-current liabilities (29,601) (22,485)
Total liabilities (53,728) (46,166)
Net assets 17,948 24,333
Equity
Share capital 23 890 890
Share premium 52,284 52,284
Merger reserve 64,736 64,736
Employee benefit trust shares reserve (5,012) (5,012)
Retained earnings (94,950) (88,565)
Total funds attributable to the equity shareholders of the Company 17,948 24,333
Consolidated Statement of Changes in Equity
for the 52 weeks ended 2 October 2022
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 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
Share-based payments - - - - 830 830
Total transactions with owners - - - - 830 830
Loss for the period - - - - (7,215) (7,215)
Total comprehensive loss - - - - (7,215) (7,215)
At 2 October 2022 890 52,284 64,736 (5,012) (94,950) 17,948
Consolidated Statement of Cash Flows
for the 52 weeks ended 2 October 2022
52 weeks ended 53 weeks ended
2 October 2022 3 October 2021
£ 000 £ 000
Cash flows from operating activities
Loss for the period (7,215) (3,740)
Adjustments to cash flows from non-cash items:
Depreciation and amortisation 4,702 3,971
Impairment 2,543 610
Loss on disposal of assets and leases 54 335
Share-based payments 830 844
Finance income - (3)
Financing costs 2,006 1,645
2,920 3,662
Working capital adjustments:
Increase in inventories (262) (145)
(Increase) / decrease in trade and other receivables (1,059) 54
Increase / (decrease) in accruals, trade and other payables 262 (175)
Decrease in provisions - (104)
Net cash flow from operating activities 1,861 3,292
Cash flows from investing activities
Interest received - 3
Purchases of property plant and equipment (8,852) (5,059)
Proceeds from disposal of property, plant and equipment - 59
Costs on issue of shares - (46)
Net cash flows from investing activities (8,852) (5,043)
Cash flows from financing activities
Interest paid (1,345) (1,525)
Proceeds on issue of shares - 23,373
Repayment of borrowings (431) -
Principal elements of lease payments (1,559) (1,274)
Net cash flows from financing activities (3,335) 20,574
(Decrease) / increase in cash (10,326) 18,823
Opening cash at bank and in hand 19,716 893
Closing cash at bank and in hand 9,390 19,716
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 East 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 address of the registered office 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.
The consolidated financial statements of the Group have been prepared in
accordance with UK adopted International Accounting Standards. The Company has
elected to prepare its parent company financial statements in accordance with
FRS 101.
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.
As permitted under s408 of the Companies Act 2006, the Company has taken
advantage of the disclosure exemption in relation to the presentation of a
company statement of profit or loss. As permitted by FRS 101, the Company has
taken advantage of the disclosure exemptions available under that standard in
relation to presentation of a cash flow statement, standards not yet
effective, impairment of assets, related party transactions and remuneration
of key management personnel.
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 2 October 2022.
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 period ended 2 October 2022, 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.
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 the economic
uncertainty arising from the rise in inflation, along with the continuing
impact of both Covid-19 and Brexit, together with the events in Ukraine. We
have also taken into account the renewal of the deep discounted bond post year
end (as detailed in note 29, post balance sheet events). For this reason, the
Board considers it appropriate for the Group to adopt the going concern basis
in preparing its financial statements.
Revenue
Restaurant revenue represents net invoiced sales of food and beverage
excluding value added tax. Hotel revenue represents net invoiced sales of
accommodation and room hire excluding value added tax. Revenue is recognised
when the goods or services have been provided.
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. 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 irrespective
of whether there is an indication of impairment.
Intangible fixed 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 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:
Asset
class
Depreciation method and rate
Right-of-use
assets
Life of lease
Freehold
buildings
2% per annum
Freehold
land
Not depreciated
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.
Assets under construction 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 the 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 as subsequently measured 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.
Impairments of tangible and intangible fixed assets
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 periods. 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, and is accounted for using the balance sheet liability method.
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.
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% (2021: 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 revenue, 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 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.
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 costs 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.
Finance 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.
Investments
In the separate accounts of the Company, interests in subsidiaries are
initially measured at cost and subsequently measured at cost less any
accumulated impairment losses. Interests in subsidiaries are assessed for
impairment at each reporting date. Any impairments losses or reversals of
impairment losses are recognised immediately in profit or loss.
Government grants
During the period, the Group has received business rates relief. The income
from this has been offset against the expense to which it relates.
Standards issued but not yet effective:
The following standards 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.
IFRS 3 (Amendment) Reference to the conceptual framework
IAS 16 (Amendment) Property, plant and equipment: proceeds before intended use
IAS 37 (Amendment) Cost of fulfilling a contract
IAS 1 (Amendment) Classification of liabilities as current or non-current
IAS 1 (Amendment) Disclosure of accounting policies
IAS 8 (Amendment) Definition of accounting estimates
IAS 12 (Amendment) Deferred tax related to assets and liabilities arising from a single
transaction
IFRS 17 (Amendment) Insurance contracts
The Group has not yet assessed the impact of these amended Accounting
Standards.
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 estimate - 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 £1,012,000 in 2022 (2021: £648,000). A 0.5% decrease in
discount rate to 4% results in increase in the net present value of the total
lease liability of £1,067,000 in 2022 (2021: £683,000).
Key estimate - determining the AGA provision
The Group has historically entered into AGA provisions for 8 sites (2021: 9)
which have been disposed of via assignment of lease. Should the assignees
default on their payments, the Group would become liable. Judgement is
required to determine the probable outflow of resources that arise from these
guarantees. A provision of £357,000 (2021: £357,000) has been made for one
year of rent at 3 sites (2021: 3), with other sites considered a contingent
liability (as detailed in note 30). This reflects an assessment of the trading
status of the assignees, and the expected cost to dispose of the lease should
those assignees default.
Key estimate - assessment of recoverable amounts for assets tested for
impairment
The Group performs impairment assessments on goodwill, other intangibles, and
property plant and equipment as required by IAS 36 Impairment of assets. The
Company also performs impairment assessments on investments in subsidiaries
under IAS 36 and receivables from subsidiaries under IFRS 9 Financial
instruments.
Determining whether assets are impaired under IAS 36 requires an estimation of
the recoverable amount of the cash-generating units ('CGUs') to which those
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, carrying values of goodwill, other intangibles and property,
plant and equipment as well as further information about the assumptions made
are disclosed in notes 13 and 14 to the financial statements.
Determining whether assets are impaired under IFRS 9 requires application of
the 'expected credit loss' approach, which involves estimation of how current
and future economic conditions will impact on the amount of any such loss.
The carrying value of receivables from subsidiaries is set out in note 17 to
the financial statements.
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:
52 weeks ended 53 weeks ended
2 October 2022 3 October 2021
£ 000 £ 000
Sale of goods 36,523 20,212
Accommodation and room hire 4,086 2,111
Sub-let rental income 58 25
40,667 22,348
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.
52 weeks ended 2 October 2022 Restaurant Segment Hotel Segment Other Unallocated Total
£ 000 £ 000 £ 000 £ 000
Revenue 36,523 4,086 58 40,667
Adjusted EBITDA (before impact of IFRS 16) 4,548 1,050 (5,161) 437
Pre-opening costs (734) - (21) (755)
Non-trading sites income 144 - - 144
Impact of IFRS 16 1,819 1,275 - 3,094
Share based payments - - (830) (830)
EBITDA 5,777 2,325 (6,012) 2,090
Depreciation and amortisation - - (4,702) (4,702)
Loss on disposal of assets and leases - - (54) (54)
Impairments - - (2,543) (2,543)
Financing costs - - (2,006) (2,006)
Profit / (loss) before tax 5,777 2,325 (15,317) (7,215)
Tax - - - -
Profit / (loss) for the period 5,777 2,325 (15,317) (7,215)
53 weeks ended 3 October 2021 Restaurant Segment Hotel Segment Other Unallocated Total
£ 000 £ 000 £ 000 £ 000
Revenue 20,212 2,111 25 22,348
Adjusted EBITDA (before impact of IFRS 16) 2,748 (18) (3,908) (1,178)
Pre-opening costs (295) - - (295)
Non-trading sites income 149 - - 149
Impact of IFRS 16 1,182 1,200 - 2,382
Share based payments - - (844) (844)
EBITDA 3,784 1,182 (4,752) 214
Depreciation and amortisation - - (3,971) (3,971)
Loss on disposal of assets and leases - - (335) (335)
Impairments - - (610) (610)
Financing costs - - (1,642) (1,642)
Movement in AGA provision - - 104 104
Insurance claim proceeds 2,500 - - 2,500
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 Finance income / financing costs
52 weeks ended 53 weeks ended
2 October 2022 3 October 2021
£ 000 £ 000
Interest income on bank deposits - 3
Total finance income - 3
Interest on bank overdrafts and borrowings (661) (537)
Lease liability interest (1,344) (1,108)
Foreign exchange loss (1) -
Total financing costs (2,006) (1,645)
Net financing costs (2,006) (1,642)
7 Auditor's remuneration
52 weeks ended 53 weeks ended
2 October 2022 3 October 2021
£ 000 £ 000
Audit of the financial statements 199 138
Audit fees for the 52 weeks ended 2 October 2022 includes £36,000 in respect
of the 2021 audit. Audit fees for the 53 weeks ended 3 October 2021 includes
£13,000 in respect of the 2020 audit.
8 Staff numbers and costs
52 weeks ended 53 weeks ended
2 October 2022 3 October 2021
£ 000 £ 000
Their aggregate remuneration comprised:
Wages and salaries 15,339 11,824
Social security costs 1,215 898
Other pension costs (see note 24) 220 179
Share-based payments 830 844
Other employee costs 91 94
Grant income - CJRS - (3,091)
17,695 10,748
52 weeks ended 53 weeks ended
2 October 2022 3 October 2021
The average monthly number of employees (including Directors) was:
Restaurants 759 521
Hotels 56 46
Management 43 32
858 599
The average monthly number of employees (being directors) of the Company was 7
(2021:7)
9 Directors' remuneration
52 weeks ended 53 weeks ended
2 October 2022 3 October 2021
The Directors' remuneration for the period in respect of services to the £ 000 £ 000
Group, was as follows:
Remuneration 483 444
Employer pension contribution 9 8
492 452
52 weeks ended 53 weeks ended
2 October 2022 3 October 2021
In respect of the highest paid director: £ 000 £ 000
Remuneration 202 181
Employer pension contribution 5 5
207 186
10 Tax
Tax charged in the statement of comprehensive income
52 weeks ended 53 weeks ended
2 October 2022 3 October 2021
£ 000 £ 000
Tax expense
Corporation tax - -
Total current income tax - -
Tax expense in the statement of comprehensive income - -
Corporation tax is calculated at 19% (2021: 19%) of the estimated taxable loss
for the period.
The charge for the period can be reconciled to the loss in the consolidated
statement of comprehensive income as follows:
52 weeks ended 53 weeks ended
2 October 2022 3 October 2021
£ 000 £ 000
Loss before tax (7,215) (3,740)
Corporation tax at standard rate 19.0% (2021: 19.0%) (1,371) (711)
Fixed asset differences 527 236
Expenses not deductible 1,792 311
Income not taxable (1,409) -
Remeasurement of deferred tax for changes in tax rates 1 (3,049)
Movement in deferred tax not recognised 529 3,213
Other movements (69) -
Total tax charge - -
No account has been taken of the potential deferred tax asset of £13,528,000
(2021: £12,705,000) calculated at 25% (2021: 25%) and representing losses
carried forward and short-term timing differences, owing to the uncertainty
over the utilisation of the losses available.
11 Other expenses
52 weeks ended 53 weeks ended
2 October 2022 3 October 2021
£ 000 £ 000
Depreciation and amortisation 244 389
AGA release of provision (note 22) - (104)
Other central costs 2,596 2,067
2,840 2,352
12 Earnings per share
Basic loss per share is calculated by dividing the profit 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 2 October 2022 and 3 October 2021.
2 October 2022 3 October 2021
£ 000 £ 000
Loss for the year after tax (7,215) (3,740)
Basic and diluted weighted average number of shares 82,143,398 82,143,398
Basic loss per share (pence) (8.8) (4.6)
Diluted loss per share (pence) (8.8) (4.6)
13 Intangible assets
Group Brand Goodwill Trademarks, patents & licenses Total
£ 000 £ 000 £ 000 £ 000
Cost or valuation
At 3 October 2021 2,912 26,019 25 28,956
Additions - - - -
At 2 October 2022 2,912 26,019 25 28,956
Amortisation
At 3 October 2021 2,724 13,391 - 16,115
Charge for the period 64 - - 64
Impairment - 1,563 - 1,563
At 2 October 2022 2,788 14,954 - 17,742
Carrying amount 2 October 2022 124 11,065 25 11,214
Brand Goodwill Total
Trademarks, patents & licenses
£ 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 relates to registered brand names and is amortised over an estimated
useful economic life of four years.
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 cash
generating units (CGU's) fair value less costs of disposal and its
value-in-use.
The goodwill balance relates to two sites in the restaurant segment
(£2,038,000) and two sites in the hotel segment (£9,027,000).
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
14.9% was used (2021: 12.0%), based on the Group's WACC and comparable
businesses in the sector. Cash flows in line with forecasts were used. Cash
flows beyond the forecast period are extended out to the end of the lease
terms at a 2% growth rate.
Impairment testing at 2 October 2022 resulted in the impairment of goodwill
relating to Restaurant 1 for £1,563,000, leaving a recoverable amount of
£1,046,000. This is due to the recoverable amount, being value-in-use, being
lower than the goodwill recognised.
Given the ongoing global economic uncertainty and its impact on the UK
hospitality sector there is particular sensitivity to the forecasts prepared
in connection with the impairment review as at 2 October 2022. 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 future EBITDA is reduced by 10% and the terminal
growth rate reduced by 1%, a further impairment loss of £991,000 for the
period ended 2 October 2022 would have to be recognised against goodwill
(2021: £220,000). 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
14.9% was used (2021: 12.0%), based on the Group's WACC and comparable
businesses in the sector. Cash flows in line with forecasts were used. Cash
flows beyond the forecast period are extended at a terminal growth rate of 2%.
Impairment testing at 2 October 2022 resulted in no requirement to reduce the
carrying value of goodwill at 2 October 2022, as the recoverable amounts of
the CGUs, based on value-in-use estimates, were greater than the carrying
values.
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 future EBITDA is reduced
by 10% and the terminal growth rate reduced by 1%, no impairment would be
required (2021: nil). 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.
Company
The Company has no intangible assets.
14 Property, plant and equipment
Group
Right-of-use Freehold property Leasehold improvements Furniture, fittings and equipment Assets under construction IT equipment Total
assets
£ 000 £ 000 £ 000 £ 000 £ 000 £ 000 £ 000
Cost or valuation
At 3 October 2021 29,215 2,294 9,814 6,003 1,336 1,583 50,245
Additions 6,531 - 5,481 2,291 585 495 15,383
Lease modifications 2,127 - - - - - 2,127
Disposals (285) - - (3) (74) (2) (364)
Transfers - - 998 244 (1,274) 32 -
At 2 October 2022 37,588 2,294 16,293 8,535 573 2,108 67,391
Depreciation
At 3 October 2021 8,491 - 1,756 3,091 - 1,015 14,353
Charge for the period 2,286 - 733 1,351 - 268 4,638
Eliminated on disposal (278) - - (2) - (1) (281)
Impairment loss 980 - - - - - 980
At 2 October 2022 11,479 - 2,489 4,440 - 1,282 19,690
Carrying amount 26,109 2,294 13,804 4,095 573 826
At 2 October 2022 47,701
Right-of-use Freehold property Leasehold improvements Furniture, fittings and equipment Assets under construction IT equipment Total
assets
£ 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 3,908
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 20,724 2,294 8,058 2,912 1,336 568
3 October 2021 35,892
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. Assets under construction 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.
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 (2022: £42,000,
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 14.9%
was used (2021: 12.0%), based on the Group's WACC and comparable businesses in
the sector. Cash flows in line with forecasts were used. Cash flows beyond the
forecast period are extended out to the end of the lease terms at a 2% growth
rate.
Impairment testing resulted in the reduction of carrying amount to recoverable
amount, being value-in-use, for three CGUs in 2022, with the full charge
recognised against the restaurant segment. This charge was for the lease on
restaurant 2 (impairment of £495,000 leaving a recoverable amount in the CGU
of £1,970,000), restaurant 3 (impairment of £278,000 leaving a recoverable
amount in the CGU of £471,000) and restaurant 4 (impairment of £207,000
leaving a recoverable amount in the CGU of £nil). The CGUs with the least
headroom are Restaurant 5 with £160,000, Restaurant 6 with £318,000 and
Restaurant 7 with £534,000. The charge in 2021 was for £610,000 against
right of use assets at restaurant 4.
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 EBITDA is reduced by 10%, and the terminal
growth rate reduced by 1%, a further impairment loss of £569,000 for the
period ended 2 October 2022 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 13), no impairment charge is required
in respect of the hotel segment.
Company
The Company has no property, plant and equipment.
15 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
2022 2021
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 Property management services 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 Property management services United Kingdom 100% 100%
20 St Thomas Street, London, SE1 9RS
Coppa Club (Haslemere) Limited Property management services United Kingdom 100% 100%
20 St Thomas Street, London, SE1 9RS
Coppa Club Limited Property management services United Kingdom 100% 100%
20 St Thomas Street, London, SE1 9RS
Coppa (Bath) Limited Property management services United Kingdom 100% -
20 St Thomas Street, London, SE1 9RS
Coppa Club Cardiff Limited Property management services United Kingdom 100% -
20 St Thomas Street, London, SE1 9RS
Tavolino Limited Dormant United Kingdom 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
✝ The two subsidiary companies set out above, Rare Bird Hotels at Sonning
Limited (Registered Company Number 12764418) and Rare Bird Hotels at Streatley
Limited (Registered Company Number 12764529) are exempt from the requirement
for an audit for the period ended 2 October 2022 under section 479A of the
Companies Act 2006 in respect of that period, as the ultimate parent company,
Various Eateries Plc, which has prepared audited consolidated financial
statements, is providing a guarantee under section 479C of the Companies Act
2006 in respect of that period, and all members of the companies above agree
to the exemption of an audit for the period ended 2 October 2022.
2 October 2022 3 October 2021
£ 000 £ 000
Summary of investments in subsidiaries
At start and end of financial period 9,325 9,325
There were no additions by the Company in the period.
16 Inventories
Group Company
2 October 2022 3 October 2021 2 October 2022 3 October 2021
£ 000 £ 000 £ 000 £ 000
Food and beverage 285 234 - -
Consumables 523 312 - -
808 546 - -
Inventories recognised as an expense in the period totalled £9,828,000 (2021:
£5,078,000).
17 Trade and other receivables
Group Company
2 October 2022 3 October 2021 2 October 2022 3 October 2021
£ 000 £ 000 £ 000 £ 000
Trade receivables 204 137 - -
Receivables from subsidiaries - - 42,632 40,872
Prepayments 907 579 - -
Other receivables 1,452 788 - -
2,563 1,504 42,632 40,872
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.
18 Cash and bank balances
Group Company
2 October 2022 3 October 2021 2 October 2022 3 October 2021
£ 000 £ 000 £ 000 £ 000
Cash and bank balances 9,390 19,716 - -
19 Trade and other payables
Group Company
2 October 2022 3 October 2021 2 October 2022 3 October 2021
£ 000 £ 000 £ 000 £ 000
Trade payables 2,232 1,544 - -
Payables to subsidiaries - - 1,863 1,146
Accrued expenses 3,805 5,028 - -
Social security and other taxes 1,363 923 - -
Other payables 1,194 906 - -
Lease liabilities due in less than one year 2,826 2,842 - -
11,420 11,243 1,863 1,146
20 Current borrowings
Group Company
2 October 2022 3 October 2021 2 October 2022 3 October 2021
£ 000 £ 000 £ 000 £ 000
Borrowings from related parties 12,707 12,438 - -
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 2022, the subscription amount was £2,584,000, the
nominal value £2,791,000, the final redemption date being 14 January 2023.
The discount is recognised between subscription and redemption date, resulting
in £147,000 of accrued financing costs as at the reporting date.
The deep discounted bond instrument issued by Various Eateries Trading Limited
was in April 2022, with a subscription price of £9,515,000, a nominal value
of £10,001,000, and a term of 12 months. The discount is recognised between
subscription and redemption date resulting in £226,000 of accrued financing
costs at the reporting date. The balance of £608,000 (2021: £1,038,000)
under the August 2019 loan agreement matures in April 2023, bears cash settled
interest at 3.75% above SONIA (2021: cash settled interest at 3.75% above
LIBOR.
21 Non-current borrowings
Group Company
2 October 2022 3 October 2021 2 October 2022 3 October 2021
£ 000 £ 000 £ 000 £ 000
Lease liabilities due after more than one year 29,244 22,128 - -
The loans and borrowings classified as financial instruments are disclosed in
note 25.
The Group's exposure to market and liquidity risk in respect of loans and
borrowings is disclosed in the financial instruments note.
22 Provisions for liabilities
Group 52 weeks ended
2 October 2022
Authorised Guarantee Agreements ('AGAs') £ 000
At start and end of financial period 357
53 weeks ended
3 October 2021
Authorised Guarantee Agreements ("AGAs") £ 000
At start of previous financial period 461
Release of provision in the prior year (104)
At end of previous and current financial period 357
The provision relates to the annual rental cost of three (2021: three)
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).
23 Share capital and share premium
Authorised, allotted, called-up and fully paid shares
2 October 2022 3 October 2021
No. 000 £ 000 No. 000 £ 000
Ordinary shares of £0.01 each 89,008 890 89,008 890
There were no movements in ordinary share capital in the period ended 2
October 2022
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.
Employee benefit trust shares reserve
The Group presents these shares as an adjustment to own equity at the period
end date through the employee benefit trust shares reserve, until the point
that the shares are awarded, and cease to be conditional awards of shares. The
award of shares is conditional upon certain vesting criteria, as outlined in
note 26.
24 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 £220,000 (2021: £179,000) represents
contributions payable to these schemes by the Group at rates specified in the
rules of the schemes. As at 2 October 2022, contributions of £30,000 (2021:
£26,000) due in respect of the current reporting period had not been paid
over to the schemes.
25 Financial instruments
Group
Financial assets at amortised cost
2 October 2022 3 October 2021
£ 000 £ 000
Cash at bank and in hand 9,390 19,716
Trade and other receivables 1,656 925
11,046 20,641
Reconciliation of liabilities arising from financing activities
Lease Liabilities Other Borrowings Total
£ 000 £ 000 £ 000
At start of financial period 24,970 12,438 37,408
New borrowings 7,315 7,315
DDB renewal - 700 700
Interest charge 1,344 - 1,344
Repayments during the period (1,559) (431) (1,990)
At end of financial period 32,070 12,707 44,777
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
2 October 2022 3 October 2021
£ 000 £ 000
Trade and other payables 39,190 32,447
Borrowings from related parties 12,707 12,438
51,897 44,885
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 Group'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 Group'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 SONIA.
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.
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
2022 % £ 000 £ 000 £ 000 £ 000 £ 000
Non-derivatives
Trade payables - 2,232 - - - 2,232
Other payables - 4,999 - - - 4,999
Borrowings - Deep Discount Bond - 12,792 - - - 12,792
Borrowings - loan 3.75% + SONIA 608 - - - 608
Lease liability 4.5% 3,157 3,669 11,178 26,451 44,455
23,788 3,669 11,178 26,451 65,086
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
Trade payables - 1,544 - - - 1,544
Other payables - 5,934 - - - 5,934
Borrowings - Deep Discounted Bond - 12,099 - - - 12,099
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.
26 Share based payments
As at 2 October 2022, the Group maintained three separate share based payment
scheme for employee remuneration (2021: three):
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
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 £713,000
(2021: £818,000) has been recognised in profit and loss by the Group in the
period ended 2 October 2022.
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
Granted Exercisable Total
At 3 October 2021 5,809,523 - 5,809,523
Granted - - -
Vesting (5,809,523) 5,809,523 -
At 2 October 2022 - 5,809,523 5,809,523
At 27 September 2020 5,809,523 - 5,809,523
Granted - - -
At 3 October 2021 5,809,523 - 5,809,523
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 nil
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 that was
recognised in expenses over the vesting period is £1,513,000.
JSOP Scheme 2
A charge of £35,000 (2021: £20,000) has been recognised in profit and loss
by the Group in the period ended 2 October 2022.
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 (£)
At 3 October 2021 360,000 1.09
Granted - -
Lapsed 29 June 2022 (360,000) 1.09
At 2 October 2022 - -
At 27 September 2020 - -
Granted 11 May 2021 360,000 1.09
At 3 October 2021 360,000 1.09
26 Share based payments
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 2.50 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 was £193,000. All options under the scheme
as at 2 October 2022 have lapsed.
CSOP
A charge of £82,000 (2021: £6,000) has been recognised in profit and loss by
the Group in the period ended 2 October 2022.
CSOP
Number of shares Exercise price per share (£)
At 3 October 2021 92,402 1.09
Granted 17 January 2022 990,441 0.69
Lapsed 11 May 2022 (92,402) 1.09
Granted 25 August 2022 250,000 0.42
At 2 October 2022 1,240,441 various
At 27 September 2020 - -
Granted 92,402 1.09
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 to be recognised over the vesting period is £340,000.
CSOP CSOP CSOP
Grant date 11 May 2021 17 January 2022 25 August 2022
Vesting period ends 11 May 2024 17 January 2025 25 August 2025
Share price at date of grant £1.08 £0.69 £0.42
Volatility 65.66% 65.66% 65.66%
Option life at grant 3 years 3 years 3 years
Dividend yield 0.00% 0.00% 0.00%
Risk-free investment rate 0.87 % 0.87 % 0.87 %
Fair value per option at grant date £0.49 £0.30 £0.19
Exercise price at date of grant £1.08 £0.69 £0.42
Exercisable from / to 11 May 2024 / 11 May 2031 17 January 2025 / 17 January 2032 25 August 2025 / 25 August 2032
Remaining contractual life 1.6 years 2.3 years 2.9 years
27 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 £198,000 (2021: £200,000). In
addition, H E M Osmond is the principal lender of the £12,099,000 borrowings
(2021: £10,000,000) and a shareholder with controlling influence of Xercise2
Ltd which is a significant shareholder of the Company.
As at 2 October 2022, there was £9,000 (2021: £20,275) of accrued cash
interest payable on borrowings from related parties.
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".
52 weeks ended 2 October 2022 53 weeks ended 3 October 2021
£ 000 £ 000
Salaries and other short term employee benefits 641 716
Employers national insurance contributions 83 88
Post-employment benefits 11 15
735 819
During the period, the Company entered the following trading transactions with
related parties
52 weeks ended 53 weeks ended
2 October 2022
3 October 2021
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 - 15 -
Osmond Capital Limited 198 - 200 -
The Great House at Sonning Limited 774 - -
657
CCO Cygnet Limited 888 - 748 -
1,875 - 1,620 -
The following amounts were outstanding at the statement of financial position
date:
2 October 2022 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 207 - - -
Mudlark Hotels Limited - 396 - -
207 396 1 172
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 Company because they have common
shareholders with controlling influence with the Company.
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.
28 Controlling party
The ultimate controlling party of the Company is H E M Osmond.
29 Post balance sheet events
VEL Property Holdings Limited funding
Within current liabilities (note 20) is a deep discounted bond instrument with
a nominal value of £2,791,000 and a final redemption date of 14 January 2023.
In January 2023, this was replaced by a new deep discounted bond instrument
with a nominal value of £2,902,000 and a final redemption date of 14 July
2023.
Various Eateries Trading Limited funding
Within current liabilities (note 20) is a deep discounted bond instrument with
a nominal value of £10,001,000 and a final redemption date of 15 April 2023.
In February 2023, this was replaced by a new deep discounted bond instrument
with a nominal value of £10,802,000 and a final redemption date of 15 April
2024.
30 Contingent liabilities
Authorised Guarantee Agreements
There are 8 (2021: 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 was heightened
as a result of the coronavirus (Covid-19) outbreak. The total annual rental
cost for these sites is £559,000, of which £357,000 (2021: £357,000) has
been provided for (see note 22). The average remaining lease length is 6
years.
CJRS claim
The Group made material claims under the CJRS schemes in order 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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