RNS Number:0433I
Mezzanine Group PLC
27 February 2003
Mezzanine Group plc
Interim Results for the Six Months Ended 1 December 2002
Mezzanine Group plc ("Mezzanine" or the "Company"), the owner and operator of
Smollensky's restaurants, announce interim results for the 6 months ended 1
December 2002.
Financial Review
* Turnover on continuing operations increased by 6.5% to #6.1 million
(2001: #5.7m)
* Gross margin remains strong at 73% (2001: 75%)
* Operating loss increased to #1.7 million (2001: #0.8m)
* Implementation over the coming months of a group wide cost reduction
programme that, once completed, will generate on-going savings of over
#1 million
The inclusion of Smollensky's at Canary Wharf for the first time boosted the
Company's turnover compared to the same period last year. However, in-line with
the general downturn in the London restaurant market the performance of
Mezzanine's other businesses weakened compared to the same period in 2001.
Mezzanine's core businesses continued to deliver strong gross margins providing
the building blocks to drive the Company through to profitability.
The operating loss arose due to an increase in both head office and other
administration costs. The escalation in administrative expenses throughout the
group has led the Directors to undertake a review of working practices in its
restaurants and look closely at head office overheads. As a consequence of this
review the Company is currently implementing a cost reduction programme that
will generate on-going savings of over #1 million. The cost reductions are being
implemented strategically and gradually over the coming months to minimise any
potential impact on the continuing operations of the Company, consequently the
Directors do not expect any adverse impact on either revenues or gross margins.
The Company remains committed to its strategy of disposing of non-core assets to
reduce indebtedness and to fund further expansion of Smollensky's. Since the
release of the 2002 Report and Accounts, good progress has been made with the
disposal programme and the Directors expect to be able to make further
announcements in the coming months.
Section 142 Companies Act 1985
During the period, the Company has become aware that the net assets of Mezzanine
are less than half of its called-up share capital. Under such circumstances,
section 142 of the Companies Act 1985 requires the Directors to convene an
Extraordinary General Meeting ("EGM") of the Company for the purpose of
considering what action, if any, should be taken to deal with this situation.
Mezzanine will despatch a circular to shareholders in due course convening this
EGM.
Enquiries:
Roddy Sutherland Mezzanine Group 020 7680 0400
Ben Brewerton Brunswick 020 7404 5959
Mezzanine Group Plc
Unaudited Group Profit & Loss Account
6 months to 1 December 2002
6 Months to 6 Months to 12 Months to 2
1 December 2 December June
2002 2001 2002
Unaudited Unaudited Audited
Notes # # #
Sales 6,095,643 5,723,674 11,831,388
Cost of sales (1,656,644) (1,407,499) (2,894,081)
Gross Profit 4,438,999 4,316,175 8,937,307
Administrative expenses
Other administrative costs (5,534,845) (4,587,606) (12,901,950)
Depreciation (594,919) (534,707) (1,529,376)
Operating loss (1,690,765) (806,138) (5,494,019)
Loss on disposal of fixed assets - - (29,503)
(1,690,765) (806,138) (5,523,522)
Interest payable (621,285) (421,471) (925,680)
Interest receivable 118,294 3,603 50,582
Loss on ordinary activities (2,193,756) (1,224,006) (6,398,620)
before taxation
Taxation (2) - - -
Loss for the period (2,193,756) (1,224,006) (6,398,620)
Statement of losses
Loss for the period (2,193,756) (1,224,006) (6,398,620)
Transfer from revaluation reserve 84,733 88,004 192,190
Balance brought forward (14,397,860) (8,191,430) (8,191,430)
(16,506,883) (9,327,432) (14,397,860)
Loss per share-basic and diluted (3) (4.06)p (2.26)p (11.83p)
Note 1
The unaudited interim results do not constitute statutory accounts. Statutory
accounts for the year ended 2nd June 2002 have been delivered to the Registrar
of Companies. The auditor's report on those accounts was unqualified and did not
include a statement under Section 237(2) or (3) of the Companies Act 1985. The
interim report has been prepared on the basis of the accounting policies
disclosed in those accounts, which were approved by the Directors on 29 November
2002. A copy of this report will be sent to shareholders and further copies are
available from the Company's office at 5 King Charles Terrace, Sovereign Court,
The Highway, London E1W 3HL.
Note 2
There is no charge to taxation due to the availability of losses.
Note 3
The loss per share is based on the loss for the period and the weighted average
number of shares in issue of 54,094,560 (2002 year - 54,094,560, 2001 interim -
54,094,560). There is no potential dilution.
Note 4
There were no recognized gains or losses in the period other than as stated in
the profit and loss account.
Mezzanine Group Plc
Unaudited Group Balance Sheet
As at 1 December 2002
6 Months to 1 6 Months to 2 12 Months to 2
December December June
2002 2001 2002
Unaudited Unaudited Audited
# # #
Fixed Assets
Negative goodwill (452,459) (1,358,594) (505,734)
Tangible assets 15,158,304 16,458,399 15,156,608
Intangible assets 52,940 64,704 58,822
14,758,785 15,164,509 14,709,696
Current Assets
Stock 206,109 210,806 204,502
Debtors 1,189,039 898,576 1,108,092
Cash at bank and in hand 5,836,138 269,716 3,007,783
7,231,286 1,379,098 4,320,377
Creditors : Amounts falling due within one year (18,668,242) (6,360,216) (13,447,896)
Net current liabilities (11,436,956) (4,981,118) (9,127,519)
Total assets less current liabilities 3,321,829 10,183,391 5,582,177
Creditors: Amounts falling due after more than (9,504,278) (9,015,728) (9,570,870)
one year
Net (liabilites)/assets (6,182,449) 1,167,663 (3,988,693)
Capital and Reserves
Called up share capital 2,631,649 2,631,649 2,631,649
Share premium account 2,811,419 2,811,419 2,811,419
Revaluation reserve 4,759,013 4,929,674 4,843,746
Merger reserve 122,353 122,353 122,353
Profit and loss account - deficit (16,506,883) (9,327,432) (14,397,860)
Equity shareholders' funds (6,182,449) 1,167,663 (3,988,693)
Reconciliation of movement in shareholders' funds
1 December 2002 2 December 2 June
2002 2001 2002
Unaudited Unaudited Audited
Loss for the period (2,193,756) (1,224,006) (6,398,620)
Surplus arising on revaluation of properties - - 18,258
Net decrease in shareholders' funds (2,193,756) (1,224,006) (6,380,362)
Opening shareholders' funds (3,988,693) 2,391,669 2,391,669
Closing shareholders' funds (6,182,449) 1,167,663 (3,988,693)
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