REG - Various Eateries PLC - Interim Results
24/06/2021 07:00
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RNS Number : 9217C Various Eateries PLC 24 June 2021
24 June 2021
VARIOUS EATERIES PLC
("Various Eateries" or "the Company"
and with its subsidiaries "the Group")
Unaudited Interim Results
Very strong performance since reopening - well-positioned to execute against
strategy
Various Eateries PLC, the owner, developer and operator of restaurant,
clubhouse and hotel sites in the United Kingdom, announces its results for the
27 weeks ended 4 April 2021.
First Half Summary
· All sites closed for the majority of the period with trading under a
variety of government restrictions limited to a maximum of seven weeks in the
period
o Positive like-for-like performance of +10.1% at our Coppa Club sites
outside of London during October 2020, the only complete month of trading
· Outstanding early performance of Coppa Club Cobham following opening
in December 2020
· Received business interruption insurance interim payment of £2.5m in
December 2020
· Appointed Property Director, Raj Manek (non-board position), in order
to accelerate site acquisition programme
Post-Period Highlights
· Very strong trading since reopening facilitated by large outdoor
spaces
o Better than anticipated sales across Coppa Club estate with like-for-like
revenue up 11.3% in the first five weeks (12 April to 16 May) of exclusively
outdoor trading versus the same period in 2019
o Further significant uptick in sales in the five subsequent weeks (17 May
to 20 June) where Coppa Club sites have been able to open indoors with
like-for-life revenue up 28.3% versus the same period in 2019
o Several Coppa Club sites have seen record levels of weekly trading despite
restrictions
o Solid performance at Tavolino Tower Bridge and Strada Southbank, despite
continued absence of office workers and tourists
· First weddings of the year in hotels and room bookings benefitting
from "staycation" trend - hotels set to benefit from new rules allowing
outdoor wedding ceremonies
· Strong pipeline: large, prominent new sites for Coppa Club signed in
Clifton (Bristol) and Putney, with several others in advanced stage of
negotiation
· Healthy liquidity and balance sheet puts the Group in a strong
position to deliver against its growth strategy with conditions normalising
Half year results resilient despite impact of lengthy closure periods
· Total Group revenue of £3.3m (H1 2020: £11.2m)
· Adjusted EBITDA* of £0.0m (H1 2020: loss of £0.3m)
· Loss after tax of £3.2m (H1 2020: loss of £3.3m)
· Gross cash at period end of £19.3m (H1 2020: £1.3m). As of 22 June
2021, cash in the bank was £20.8m.
*Adjusted EBITDA is explained in the Appendix at the end of the Financials
Andy Bassadone, Executive Chairman of Various Eateries, said:
"Our business is primed for growth: we have used lockdown to hone our existing
sites, secure new ones and ensure we have the right systems and processes in
place behind the scenes to enable us to scale effectively.
"After prolonged periods of closures and disruption, it is heartening to see
the public returning so enthusiastically to eating and drinking out. It is
still early days but the response to our re-openings has been good and trading
has been ramping up as we have moved through the government's roadmap.
"As we emerge from the crisis, we do so a well-funded operator, led by an
experienced management team with an exceptional track record of building
hospitality groups. Our variety of clubhouses and hospitality venues is
excellently suited for the post-Covid world and our strategy is unchanged - to
take advantage of the unprecedented opportunities the current environment
presents."
Yishay Malkov, Chief Executive of Various Eateries, said:
"We have been delighted by the enthusiastic return of our customers over the
last few weeks since reopening on April 12. Thankfully, we managed to retain
most of our staff through lockdown and they have coped admirably with the
incredible levels of business that we have seen recently. Although the labour
market is currently difficult in terms of new hirings, we are set up and
prepared to train new employees from scratch and do not believe that it will
impede our ambitious expansion plans."
Enquiries
Various Eateries plc
Andy Bassadone Executive Chairman Via Alma PR
Yishay Malkov Chief Executive Officer
Oli Williams Chief Financial Officer
WH Ireland Limited Sole Broker and Nominated Adviser Tel: +44 (0)20 7220 1666
Broking
Harry Ansell, Adam Pollock
Nominated Adviser
Katy Mitchell, Lydia Zychowska
Alma PR Financial PR Tel: +44 (0)20 3405 0205
David Ison variouseateries@almapr.co.uk (mailto:variouseateries@almapr.co.uk)
Susie Hudson
Molly Gretton
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), Oliver
Williams (CFO) and Matt Fanthorpe (Chef Director, a non-board position).
The Group operates two core brands across 11 locations:
· Coppa Club, a collection of clubhouses which combine restaurant,
terrace, café, lounge, bar and work spaces, some with bedrooms and other club
facilities
· Tavolino, a restaurant aiming to address a gap in the market for high
quality Italian food at mid-market prices
For more information visit www.variouseateries.co.uk
(http://www.variouseateries.co.uk)
Chairman and Chief Executive's Review
While Covid-related government restrictions meant we were unable to trade for
most of the period under review, in the short windows we were open, sales
trends were very positive. When we were closed, management and the wider
operations team continued to work tirelessly behind the scenes to hone our
existing estate, refine our offering, explore expansion opportunities and
ensure we were prepared for reopening while continuing to support the
wellbeing of our people.
On behalf of the Board, I would like to take this opportunity to thank
everyone at Various Eateries for their continued commitment and patience. We
are now emerging strongly from the crisis, and are delighted to have been able
to welcome many of those who had been on furlough back into the workplace.
It has been another unusual period for the Group - as it has been for the
entire industry - but we have responded well and recognise we are in a
fortunate position relative to many others. We will continue to monitor and
respond to new challenges as and when they emerge, but with very strong early
sales since the phased reopening began in April, a robust balance sheet and
clear path forward to expand the estate, we are optimistic about the future
and the role we can play in the recovery.
Poised to capitalise on unprecedented opportunity
Our strategy remains unchanged since IPO and is based on the Board's belief
that the current environment presents an unprecedented opportunity for the
Group, as a well-funded operator with contemporary brands, future-proof
formats and an experienced management team, to create a major hospitality
group beyond the pandemic. Initially this will be based on our two core brands
of Coppa Club and Tavolino.
Coppa Club is a multi-use, all-day concept that combines restaurant, terrace,
café, lounge, bar and remote working spaces under one roof. Tavolino aims to
address a gap in the market for high-quality Italian food at mid-market
prices.
Both Coppa and Tavolino are immediately ready to scale up given the economic
challenges facing the sector. This is particularly as a consequence of Covid,
which has led to a significant reduction in competition and premium site
availability the likes of which, we believe, the industry has never seen. The
current shortage of staff across the industry has been well-publicised in
recent weeks but we are managing the situation, are set up and prepared to
train new employees from scratch, and do not believe that it will impede our
ambitious expansion plans.
We remain of the opinion that the impact of Covid, combined with the
experience of our management team, represents an unprecedented opportunity to
build a major hospitality group. Accordingly, we intend to invest in the
expansion of the Coppa Club and Tavolino brands by targeting distressed sites
in prime locations and to identify potential, complementary, bolt-on
acquisitions of other restaurant brands to accelerate growth across the Group.
Strong site expansion progress to date and confident in execution of the site
strategy
At present, the Group has 11 sites - 13 including those that are yet to open -
all in prime locations.
In December 2020, we opened our seventh Coppa Club site in Cobham, Surrey.
Adopting the larger club & brasserie format, the site was originally open
for a matter of days before lockdown restrictions were enforced and it had to
close. Despite this, the initial response from the local community was
amazing, the site has now reopened fully and trading has been exceptional,
comfortably exceeding internal expectations.
Post-period end, we signed a lease for Coppa Club Clifton Village, Bristol.
Like Cobham, it will be spread over two floors as a relaxed space with
something for everyone. From breakfast to dinner, coffee to cocktails, work to
play, our first venture into the South West will be available for the local
community to enjoy from early until late. The fit out of the site is almost
complete with the site set to open in summer 2021.
We are also delighted to have agreed plans for a similar format of Coppa Club
in Putney, South West London. The fit out is expected to begin imminently with
a view to opening in autumn 2021.
In addition, we are currently putting in place legal arrangements with several
new sites following agreement of heads of terms and look forward to providing
the market with an update in due course.
Looking ahead, the pipeline of premium new site opportunities is very healthy
with supply continuing to outstrip demand. We are constantly appraising
prospective properties, including potential hotel partnerships, on a selective
basis and are confident that we can continue to expand our estate in line with
our strategy.
Encouraging sales during trading windows
In the period under review, we were able trade for a maximum of seven weeks in
total because of government restrictions designed to contain the spread of
Covid. October was the only complete month of trading, with windows through
November and December varying by site depending on where they fell under the
three-tier system. Throughout these trading windows, we were subjected to a
variety of measures that significantly reduced the number of covers we were
able to turn over, including the 'Rule of Six', curfews and the three-tier
system.
Pleasingly, in October 2020, the same trading patterns we saw during July and
September were evident, with positive like-for-like performance at our sites
outside of London. In the short periods we were open in November and December,
while trading was encouraging, we were not open long enough for any useful
conclusions to be drawn.
Half year results resilient despite impact of lengthy closure periods
Half year results were severely impacted by prolonged periods of closure
because of Covid restrictions. As a result, total Group revenue for the half
was £3.3m (H1 2020: £11.2m).
The Group reported an adjusted EBITDA of £0.0m (H1 2020: loss of £0.3m), an
operating loss of £2.4m (H1 2020: loss of £2.3m) and a loss after tax of
£3.2m (H1 2020: loss of £3.3m).
The Group also received a business interruption insurance interim payment of
£2.5m in December 2020, which is included in the results above, with
negotiations regarding outstanding claims ongoing.
During the period, the Group extended the maturity date of a £2.4m short term
loan by 12 months to January 2022, with option to extend for a further 12
months.
Gross cash at period end was £19.3m (H1 2020: £1.3m). As of 22 June 2021,
cash in the bank was £20.8m.
Recruiting to accelerate growth and welcoming staff back
Raj Manek joined as property director (a non-board position) in the period
with a view to accelerating the site acquisition programme. Raj has a strong
track record of successfully rolling out high-quality restaurants at pace and
has already made a substantial contribution to the Group.
Our staff continued to be impacted by Covid throughout the period, with most
remaining on furlough. We have continued to prioritise their wellbeing,
maintaining contact through the company intranet and continuing to encourage
engagement through various initiatives. It has again been a difficult time for
our staff and their families and the management team would like to thank them
for their patience and resolve.
Post-period, since our first reopening in April, we have continued to welcome
our staff back in phases subject to capacity increases in line with the easing
of restrictions.
Exceptional current trading and confident outlook
The Group began the phased re-opening of its restaurants from 12 April,
initially for outdoor trading only in line with government restrictions, and
then for indoor and outdoor dining from 17 May. Trading has been extremely
strong throughout both phases, with Coppa Club like-for-like sales up 11.3%
and 28.3% on the corresponding periods in 2019 respectively despite ongoing
restrictions. Several Coppa Club sites have set weekly trading records - some
on more than one occasion - and Tavolino Tower Bridge and Strada Southbank
have delivered a solid performance despite the continued absence of office
workers and tourists.
While there will naturally be high levels of pent-up demand post-lockdown and
VAT has had an underlying benefit, the outperformance of management
expectations across our estate in the weeks we have been open is encouraging
and gives the Board confidence in the Group's prospects in the second half and
beyond.
Our business is primed for growth and our strategy unchanged - to take
advantage of the unprecedented opportunities the current environment presents.
We look forward to the lifting of restrictions on 19 July and to reporting on
further progress in due course.
Andy Bassadone (Chairman) and Yishay Malkov (Chief Executive Officer)
24 June 2021
Various Eateries PLC
Consolidated Statement of Comprehensive Income
for the 27 weeks ended 4 April 2021
27 weeks ended 4 April 2021 26 weeks ended 29 March 2020 52 weeks ended 27 September 2020
Unaudited Unaudited Audited
Note £ 000 £ 000 £ 000
Revenue 3,260 11,216 16,469
Cost of sales (3,905) (11,414) (17,516)
Gross loss (645) (198) (1,047)
Central staff costs (827) (1,051) (1,901)
Share-based payments 10 (427) - -
Impairment of intangible assets - - (3,640)
Impairment of property, plant and equipment - - (1,751)
Loss on disposal of assets and leases - (38) (1,632)
Other expenses (485) (981) (2,469)
Operating loss (2,384) (2,268) (12,440)
Finance income 3 2 1
Finance costs 3 (847) (992) (2,003)
Loss before tax (3,228) (3,258) (14,442)
Tax - - -
Loss for the period (3,228) (3,258) (14,442)
Earnings per share
Basic loss per share (pence) 4 (3.6) (29.3) (116.4)
Diluted loss per share (pence) 4 (3.6) (29.3) (116.4)
Various Eateries PLC
Consolidated Statement of Financial Position
As at 4 April 2021
4 April 2021 29 March 2020 27 September 2020
Unaudited Unaudited Audited
Note £ 000 £ 000 £ 000
Non-current assets
Intangible assets 5 12,872 7,265 12,903
Right-of-use assets 6 20,689 13,488 21,049
Other property, plant and equipment 6 13,525 12,528 12,390
47,086 33,280 46,342
Current assets
Inventories 416 395 401
Trade receivables 7 449 691 248
Other receivables 7 742 1,406 24,682
Cash and bank balances 19,286 1,292 893
20,893 3,784 26,224
Total assets 67,979 37,064 72,566
Current liabilities
Trade and other payables 8 (6,411) (5,450) (10,992)
Borrowings 9 (5,213) (1,574) (2,402)
Net current assets / (liabilities) 9,269 (3,240) 12,830
Total assets less current liabilities 56,355 30,040 59,172
Non-current liabilities
Borrowings 9 (31,466) (39,678) (31,482)
Provisions (461) - (461)
Total non-current liabilities (31,927) (39,678) (31,943)
Total liabilities (43,551) (46,702) (45,337)
Net assets / (liabilities) 24,428 (9,638) 27,229
Equity
Share capital 890 111 890
Share premium 52,284 64,736 52,284
Merger reserve 64,736 - 64,736
Other reserves ` (5,012) - (5,012)
Retained losses (88,470) (74,485) (85,669)
Total shareholder funds / (deficit) 24,428 (9,638) 27,229
Various Eateries PLC
Consolidated Statement of Changes in Equity
for the 27 weeks ended 4 April 2021
Called-up share capital Share premium account Merger reserve Employee benefit trust reserve Retained losses Total
£ 000 £ 000 £ 000 £ 000 £ 000 £ 000
At 30 September 2019 111 64,736 - - (71,227) (6,380)
Loss for the period - - - - (3,258) (3,258)
At 29 March 2020 111 64,736 - - (74,485) (9,638)
At 29 March 2020 111 64,736 - - (74,485) (9,638)
Share-for-share exchange - (64,736) 64,736 - - -
Debt for equity swap 238 15,250 - - - 15,488
Shares issued on IPO 342 24,658 - - - 25,000
Other shares issued 199 14,285 - (5,012) - 9,472
Share issue costs - (1,909) - - - (1,909)
Loss for the period - - - - (11,184) (11,184)
At 27 September 2020 890 52,284 64,736 (5,012) (85,669) 27,229
At 27 September 2020 890 52,284 64,736 (5,012) (85,669) 27,229
Share-based payments - - - - 427 427
Loss for the period - - - - (3,228) (3,228)
At 4 April 2021 890 52,284 64,736 (5,012) (88,470) 24,428
Various Eateries PLC
Consolidated Statement of Cash Flows
for the 27 weeks ended 4 April 2021
27 weeks ended 4 April 2021 26 weeks ended 29 March 2020 52 weeks ended 27 September 2020
Unaudited Unaudited Audited
Note £ 000 £ 000 £ 000
Cash flows from operating activities
Loss for the year (3,228) (3,258) (14,442)
Adjustments to cash flows from non-cash items:
Depreciation and amortisation 1,947 1,536 2,832
Impairment - - 5,391
Loss on disposal and surrender of leases 6 38 1,632
Share-based payments 427 - -
Finance income (3) (2) (1)
Finance costs 847 991 2,003
(4) (695) (2,585)
Working capital adjustments:
(Increase) / decrease in inventories (15) 156 149
Decrease in trade and other receivables 367 133 958
(Decrease) / increase in accruals, trade and other payables (2,399) (985) 1,656
Increase in provisions - - 461
Net cash flow from operating activities (2,050) (1,391) 639
Cash flows from investing activities
Interest received 3 2 1
Purchases of property plant and equipment (2,027) (3,366) (5,086)
Purchase of intangible assets - (1) (2)
Proceeds / (Costs) on disposal of property plant and equipment 3 108 (109)
Costs on issue of shares - - (432)
Net cash flows from investing activities (2,022) (3,257) (5,628)
Cash flows from financing activities
Interest paid - (528) (841)
Proceeds from borrowings - 5,300 5,700
Proceeds on issue of shares 23,373 - 79
Principal elements of lease payments (908) (665) (890)
Net cash flows from financing activities 22,465 4,107 4,048
Increase / (decrease) in cash 18,393 (542) (941)
Opening cash at bank and in hand 893 1,834 1,834
Closing cash at bank and in hand 19,286 1,292 893
Various Eateries PLC
Notes to the Financial Statements
for the 52 weeks ended 27 September 2020
1 General information
Various Eateries PLC is a public limited company incorporated in the United
Kingdom under the Companies Act 2006 and is registered in England and Wales.
The address of the registered office is 20 St Thomas Street, London, SE1 9RS.
The Group is engaged in the operation of non-members clubs, restaurants,
hotels, bars and lounge areas in London and the South East of England.
2 Basis of preparation
The unaudited interim financial information for the 27 weeks ended 4 April
2021 has been prepared under the recognition and measurement principles of
International Financial Reporting Standards as adopted by the EU ("IFRS")
based on the accounting policies consistent with those used in the financial
statements for the period ended 27 September 2020, but does not contain all
the information necessary for full compliance with IFRS.
The unaudited interim financial information was approved and authorised for
issue by the Board on 23 June 2021. The unaudited interim financial
information for the 26 weeks ended 29 March 2020 does not constitute statutory
accounts within the meaning of section 434 of the Companies Act 2006 and
should be read in conjunction with the statutory accounts for the period ended
27 September 2020. The information for the 52 weeks ended 27 September 2020
has been extracted from the statutory accounts for that year which have been
delivered to the Registrar of Companies. The audit report on these statutory
accounts was unqualified, did not contain an emphasis of matter paragraph, and
did not contain a statement under sections 498(2)-(3) of the Companies Act
2006.
The interim financial statements are presented in Pounds Sterling because that
is the currency of the primary economic environment in which the company
operates. All values are rounded to the nearest one thousand Pounds (£'000)
except when otherwise indicated.
Changes in accounting policies and disclosures:
There were no changes in accounting policies and disclosures during the
period.
3 Financing costs
27 weeks ended 4 April 2021 26 weeks ended 29 March 2020 52 weeks ended 27 September 2020
Unaudited Unaudited Audited
£ 000 £ 000 £ 000
Interest payable on borrowings 577 650 1,349
Lease liability interest 270 342 654
847 992 2,003
4 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 reporting date.
26 weeks ended 4 April 2021 26 weeks ended 29 March 2020 52 weeks ended 27 September 2020
Unaudited Unaudited Audited
Loss for the year after tax (£ 000) (3,228) (3,258) (14,442)
Basic and diluted weighted average number of shares 89,008,477 11,111,011 12,403,859
Basic loss per share (pence) (3.6) (29.3) (116.4)
Diluted loss per share (pence) (3.6) (29.3) (116.4)
5 Intangible assets
Brand Goodwill Trademarks, patents & licenses Total
£ 000 £ 000 £ 000 £ 000
Cost or valuation
At 29 September 2019 2,662 16,992 23 19,677
Additions - - 1 1
At 29 March 2020 2,662 16,992 24 19,678
Additions - - 1 1
Acquired through business combination 250 9,027 - 9,277
At 27 September 2020 2,912 26,019 25 28,956
Additions - - - -
At 4 April 2021 2,912 26,019 25 28,956
Amortisation
At 29 September 2019 and At 29 March 2020 2,662 9,751 - 12,413
Impairment - 3,640 - 3,640
At 27 September 2020 2,662 13,391 - 16,053
Amortisation 31 - - 31
At 4 April 2021 2,693 13,391 - 16,084
Carrying amount
At 29 March 2020 - 7,241 24 7,265
At 27 September 2020 250 12,628 25 12,903
At 4 April 2021 219 12,628 25 12,872
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 CGU's fair
value less costs of disposal and its value-in-use.
6 Property, plant and equipment
Right of use assets Freehold property Leasehold improve- ments Furniture, fittings and equipment Work in progress IT equipment Total
£ 000 £ 000 £ 000 £ 000 £ 000 £ 000 £ 000
Cost or valuation
At 29 September 2019 19,038 - 8,499 4,972 105 1,311 33,925
Additions - 1,795 13 391 1,024 44 3,266
Disposals (1,098) - (714) (160) (11) (33) (2,016)
Transfers - - - - - - -
At 29 March 2020 17,941 1,795 7,798 5,203 1,118 1,322 35,176
Additions 707 - 59 157 1,582 22 2,526
Acquired through business combination 11,532 - - 403 - 90 12,025
Disposals (3,272) - (1,669) (1,749) (91) (105) (6,887)
Transfers - - 871 537 (1,437) 29 -
At 27 September 2020 26,907 1,795 7,059 4,550 1,172 1,357 42,841
Additions 1,082 - 1,028 627 315 58 3,110
Disposals (409) - - - (9) - (419)
Transfers - - 567 51 (620) 1 -
At 4 April 2021 27,580 1,795 8,654 5,229 858 1,417 45,532
Depreciation
At 29 September 2019 4,832 - 1,607 2,552 - 604 9,595
Charge for the period 718 - 249 453 - 116 1,536
Eliminated on disposal (1,098) - (709) (50) - (13) (1,870)
At 29 March 2020 4,453 - 1,147 2,955 - 706 9,261
Charge for the period 554 - 183 448.82 - 111 1,297
Eliminated on disposal (764) - (801) (1,271) - (70) (2,906)
Impairment loss 1,616 - 135 - - - 1,751
At 27 September 2020 5,859 - 664 2,133 - 747 9,403
Charge for the period 1,032 - 154 612 - 118 1,915
Eliminated on disposal - - - - - - -
Impairment loss - - - - - - -
At 4 April 2021 6,891 - 818 2,745 - 865 11,318
Carrying amount
At 29 March 2020 13,488 1,795 6,652 2,248 1,118 615 25,916
At 27 September 2020 21,048 1,795 6,395 2,417 1,172 610 33,438
At 4 April 2021 20,689 1,795 7,836 2,484 858 552 34,214
7 Trade and other receivables
4 April 2021 29 March 2020 27 September 2020
Unaudited Unaudited Audited
£ 000 £ 000 £ 000
Trade receivables 449 691 248
Prepayments 166 497 317
Other debtors 576 907 24,365
1,191 2,095 24,930
All of the trade receivables were non-interest bearing, receivable under
normal commercial terms, and the Directors do not consider there to be any
material expected credit loss. The Directors consider that the carrying value
of trade and other receivables approximates to their fair value.
Other receivables at 27 September 2020 included £23,523,000 in respect of net
IPO share issue proceeds.
8 Trade and other payables
4 April 2021 29 March 2020 27 September 2020
Unaudited Unaudited Audited
£ 000 £ 000 £ 000
Trade payables 1,419 2,049 2,621
Accrued expenses 3,715 2,257 3,813
Social security and other taxes 558 796 988
Other payables 719 346 1,186
6,411 5,448 8,608
9 Loans and borrowings
4 April 2021 29 March 2020 27 September 2020
Unaudited Unaudited Audited
£ 000 £ 000 £ 000
Current borrowings
Borrowings from related parties 2,470 2,334 2,402
Lease liabilities 2,743 1,574 2,384
5,213 3,908 4,786
4 April 2021 29 March 2020 27 September 2020
Unaudited Unaudited Audited
£ 000 £ 000 £ 000
Non-current interest bearing loans and borrowings
Borrowings from related parties 10,000 24,513 10,000
Lease liabilities 21,466 12,832 21,483
31,466 37,345 31,483
Borrowings from related parties classed as payable within 12 months represents
a deep discounted bond instrument issued by VEL Property Holdings Limited on
14 January 2021. The subscription amount was £2,438,000, the nominal value
£2,584,000, and the final redemption date is 14 January 2022. The discount is
recognised on a straight-line basis between subscription and redemption date,
resulting in £32,000 of accrued financing costs as at the reporting date.
The non-current borrowings from related parties is made up of a deep
discounted bond instrument and the existing August 2019 loan agreement. The
deep discounted bond was issued in September 2020 as part of a capital
restructure, with a subscription price of £8,962,000, a nominal value of
£9,515,000, and a term of 19 months. The balance of £1,038,000 under the
August 2019 loan agreement matures in August 2022, bears cash settled interest
at 3.75% above LIBOR, and contains an EBITDA multiple covenant that should
have been first tested in September 2020 under the original agreement and has
been waived until April 2022.
10 Share-based payments
As at 4 April 2021, the Group maintained one share-based payment scheme for
employee remuneration, the Joint Share Ownership Plan ('JSOP'), which will be
equity settled. The grants under the JSOP were made on 18 September 2020.
In accordance with IFRS 2 "Share-based Payment", the value of the awards is
measured at fair value at the date of the grant. The fair value is expensed on
a straight-line basis over the vesting period, based on management's estimate
of the number of shares that will eventually vest. A charge of £427,000 has
been recognised in profit and loss for the 27 weeks ended 4 April 2021 in
respect of this JSOP.
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
Number of shares Exercise price per share (£)
Outstanding at 29 September 2019 - -
Granted 5,809,523 0.73
Outstanding at 27 September 2020 and 4 April 2021 5,809,523 0.73
Exercisable at 27 September 2020 and 4 April 2021 - -
The fair values of options granted were 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 1.41 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
expected term of the options, i.e. a period of 1.95 years. The total estimated
fair value of the options granted on 18 September 2020 to be recognised as an
expense over the vesting period is £1,531,000.
Appendix: Loss before Tax to Adjusted EBITDA reconciliation (unaudited)
27 weeks ended 4 April 2021 26 weeks ended 29 March 2020 52 weeks ended 27 September 2020
Unaudited Unaudited Unaudited
£ 000 £ 000 £ 000
Revenue 3,260 11,216 16,469
Loss before tax (3,228) (3,258) (14,442)
Net financing costs 844 990 2,002
Depreciation and impairment 1,915 1,536 8,225
(Profit) / loss on disposal of assets and leases - 38 1,632
Authorised Guarantee Agreements provision - - 461
Initial Public Offering costs - - 285
Restructure costs - 135 167
Pre-opening costs 44 252 564
Share-based payments 427
Non-trading sites - 270 302
Adjusted EBITDA 2 (37) (804)
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