TIDMCOM
RNS Number : 4818V
Comptoir Group PLC
09 April 2019
9 April 2018
Comptoir Group plc
("Comptoir", the "Group" or the "Company")
Full Year audited results for the financial year ended 31
December 2018
Financial Highlights
-- Group revenue increased 16.1% to GBP34.3m (2017 - GBP29.6m).
-- Gross profit increased 16.0% to GBP24.7m (2017 - GBP21.3m).
-- IFRS loss before tax of GBP0.21m (2017 - GBP0.46m profit).
-- Adjusted EBITDA* of GBP2.1m (2017 - GBP1.1m).
-- Net cash and cash equivalents at the period end of GBP4.6m (2017: GBP5.4m).
-- Loss per share of 0.26p (2017 - 0.39p positive earnings per share).
-- Three new restaurants, two 'owned' and one franchised opened
in the year (2017 - four 'owned' restaurant openings). One 'pop up'
site closed at the end of a short-term lease.
-- 31 restaurants (27 owned and 4 franchise) trading as at 31
December 2018 (2017 - 29 restaurants; 26 owned and 3
franchise).
Chaker Hanna, Chief Executive Officer, commented:
"Trading for the year to date has continued to be in line with
Board expectations, and we anticipate this momentum will continue
into the second quarter of 2019.
Like for like sales growth has continued each month as newer
restaurants reach anticipated maturity levels and the Company is
continuing to take a cautious approach to selecting new site
openings, enabling focus on the existing estate and further
development of the brand whilst ensuring the most efficient
operating model is maintained.
The Directors believe the Group's current Comptoir Libanais
restaurant estate continues to have significant potential for
organic growth and will continue to explore further franchise
opportunities, alongside the already agreed terms reported at the
half-year results to open three additional franchised sites with
HMS Host in the second half of 2019; in Ashford (Kent) and our
second and third international franchised operations in Dubai and
Abu Dhabi Airports."
*Adjusted EBITDA is calculated excluding the impact of a
GBP0.03m share-based payment charge (2017 - GBP0.16m credit);
depreciation, amortisation and impairment of assets of GBP1.8m
(2017 - GBP1.5m); GBPnil profit on the sale of freehold property
(2017 - GBP1.3m); and GBP0.4m restaurant pre and post opening costs
(2017 - GBP0.5m).
Enquiries:
Comptoir Group plc
Chaker Hanna, CEO Tel: +44 (0)20 7486 1111
Mark Carrick, CFO Tel: +44 (0)20 7317 0409
Canaccord Genuity (NOMAD and Broker) Tel: +44 (0)20 7523 8000
Bobbie Hilliam
Georgina McCooke
Chairman's Statement
For the year ended 31 December 2018
Overview
The Board is pleased to announce that despite the challenging
trading conditions, the financial outcome for 2018 was in line with
expectations and the Group has demonstrated its resilience to
deliver during the uncertain retail environment.
Revenue for 2018 showed strong growth on last year, profit was
in line with expectations and the Company ended the year with a
healthy cash balance. This was achieved despite cost pressures
within the industry.
The Board does not recommend the payment of any dividend at this
time, as it is anticipated that all available funds will be
required for investment in new restaurants or the existing estate
for the foreseeable future.
Growth in operations
The Group has continued to deliver on its plan for expansion,
opening 3 new restaurants in the year ended 31 December 2018 and
closing just one site, which came to the end of its short lease.
The Group now has 31 restaurants, including four franchise
sites.
In line with the continued challenging trading conditions, the
Board continues its prudent approach to new openings and only
currently has plans to open one more owned restaurant and three new
franchise sites in 2019.
This will enable continual investment and focus on the existing
sites and further development of the Group's brands.
People
We continue to appreciate that our people are key to the success
of our business. We have further strengthened the Board with the
appointment of Mark Carrick as Chief Financial Officer and our
highly experienced and motivated Executive Team have enabled
execution of a sustained focus and delivery on performance during
the year.
To develop and protect our business further we maintain strong
corporate governance standards through the Board, which meets on a
regular basis and it has already made substantial progress in
fulfilling its corporate governance aims.
We continue to rely on the commitment and dedication of our
fantastic support and operational teams, in our restaurants around
the country, whose ultimate aim is to consistently deliver a
fantastic experience for all our customers in an environment with a
genuine feel of family hospitality.
On that note I would like to personally thank all of our teams
and colleagues across the Company; they are a remarkable group of
people and we are privileged to witness their efforts and enjoyment
in working for Comptoir.
Looking ahead
The Group intends to focus heavily on ensuring that all sites
are operating effectively, with a particular focus on the newer
restaurants.
We continue to see the cautiousness of consumers and coupled
with the uncertainties surrounding the UK's exit from the European
Union. The Directors remain confident in the restaurant brands of
the Group and its relevance within the eating-out market as
consumers seek a differentiated food and service experience.
Richard Kleiner
Chairman
8 April 2019
Chief Executive's review
For the year ended 31 December 2018
I am pleased to present the Group's results for the year ended
31 December 2018, together with an update on the Group's progress
in respect of its growth strategy. We have continued our expansion
plan and opened two new owned restaurants as well as adding an
additional franchise site to the Group's portfolio.
During the year revenue has grown by 16% to GBP34.3m (2017 -
GBP29.6m), with adjusted EBITDA (excluding one-off costs incurred
in opening new restaurants and other highlighted items) increasing
by 83% to GBP2.1m (2017 - GBP1.1m). The significant increase in
adjusted EBITDA demonstrates the strong performance of our
established restaurants.
The adjusted EBITDA takes into consideration increases in
administrative costs, which were incurred following the opening of
new restaurants during 2017 and 2018. While the Directors are
pleased with the progress of the new restaurants, these sites are
still establishing themselves with time required to reach maturity.
In view of the number of new restaurants the group has opened in
recent years that are still in their growth stages, as well as the
challenging economic conditions that continued throughout 2018, we
are pleased with our results and are positive on our future
performance.
The Consolidated Statement of Comprehensive Income for the year
shows a pre-tax loss of GBP0.21m (2017 - GBP0.46m profit). After
adding back non-trading items, including opening costs totalling
GBP0.4m (2017 - GBP0.5m), the adjusted EBITDA for the group
totalled GBP2.1m (2017 - GBP1.1m).
Our strong balance sheet is currently de-levered specifically to
protect against any downside risk on future covenants and give us
scope for assurance and flexibility to sensibly use free cash for
selective new site acquisitions or re-investment in the current
estate.
Review of operations
We continued to feel the cost pressures in the supply chain
throughout the year, including the ongoing effect of the National
Living Wage and Apprenticeship Levy. Despite this, costs were
controlled carefully by management meaning that restaurants perform
well financially once they have reached maturity of trading, as
demonstrated by the strength of the Group's adjusted results.
Economic conditions have remained challenging in 2018 and
confidence levels have remained subdued due to continued
uncertainty around Brexit and the economic outlook as a whole. The
general retail sector has witnessed a continued decline in high
street footfall which has directly impacted the dining-out sector,
however, we are still able to report like for like sales growth
each month throughout the year. Further pressures include continued
rising costs (particularly labour), input food costs and property
related charges.
Despite these pressures, we have continued to convert our top
line growth into EBITDA in line with our full year expectations as
a result of the focus on operating efficiencies and the increasing
yield from the maturing site acquisitions made in 2017 and early
2018.
The investment in our people has been further enhanced in 2018
with development programmes now being made available to our
employees through a partnership with Evolve Training. This is
supported by funding from the Apprenticeship Levy
contributions.
Estate development
During the year, we opened two new Comptoir Libanais
restaurants; Birmingham located in Grand Central (March 2018) and
London Bridge (November 2018) located in a prime redevelopment of
this key central mainline train station, adjacent to an entrance
into the station concourse. Both of these new site locations
benefit from high city footfall. We are also pleased to report an
addition to our franchise sites with a new site opening in Cheshire
Oaks (November 2018), operated by HMS Host.
In 2018 we took the opportunity to invest in refurbishing some
of our existing matured restaurants to give a fresh look and
innovation with new designs. This included refurbishment of Yalla
Yalla Soho, South Kensington and the extension of the trading area
in our Yalla Yalla Winsley Street site into an adjoining space,
with a resulting significant increase in available covers at the
restaurant.
During 2019 we will continue to selectively invest on a return
focused basis, in our sites, with six sites earmarked for some
capital investment over the year. These sites are Levant, Kenza,
Chelsea, Stratford, Kingston and Wigmore Street. In addition to
this, following the closure of our Comptoir site in Westfield,
Shepherd's Bush in January 2019 due to the extensive redevelopment
of the centre, we are excited to announce that we will be opening a
brand new re-positioned Comptoir site on completion of the centre's
development works in May 2019.
In line with our approach in 2018, we continue to develop our
property pipeline with some caution. One further owned site is
currently planned to open in 2019. As reported at the half-year, we
continue to work closely with our franchise partners and have
already agreed terms to open three additional franchised sites with
HMS Host in the second half of 2019; in Ashford (Kent) and our
second and third international franchised operations in Dubai and
Abu Dhabi Airports.
Cashflows and financing
Cash generated from operations was GBP2.1m (2017 - GBP1.5m),
demonstrating the continued management focus and effectiveness of
tightened working capital management initiatives.
Capital expenditure for the year, which was principally incurred
on the fitting-out of the two new restaurants in Birmingham and
London Bridge, as well as selective investment in refurbishment in
a number of sites, totalled GBP2.3m (2017 - GBP2.8m).
Loan and finance lease repayments continued as planned
throughout the year, resulting in total cash outflows of GBP0.6m
(2017 - GBP0.6m). The Group realised an overall cash outflow of
GBP0.8m (2017 - GBP4.6m cash inflow); however, 2017 included the
cash inflow from an equity placing raising GBP4.0m (before costs).
At the end of the year, the Group had cash and cash equivalents of
GBP4.6m (2017 - GBP5.4m).
The Group is in a strong position to fund the additional further
owned restaurant opening in 2019 and to continue to further develop
the Group's brand and identity.
Outlook
The Group has had an encouraging start to 2019 and we hope to
continue benefiting from this momentum during the first half of
2019, with like for like sales growth continuing in each month of
the first quarter of 2019.
We are in a time of unprecedented political and general
uncertainty across the UK economy. Whilst we cannot be immune to
the impact that this uncertainty may have on the economy as a
whole, the Group has proven its resilience and is in a strong
financial and cash position, taking a cautious approach to
selecting new site openings, enabling focus on the existing estate
and further development of the brand whilst ensuring the most
efficient operating model is maintained.
The Directors believe the Group's current Comptoir Libanais
restaurant estate continues to have significant potential for
organic growth and will continue to explore further franchise
opportunities.
I strongly believe our business is well positioned in the
restaurant sector and can continue to provide our customers with a
unique experience, offering excellent quality, well-priced, healthy
food, with welcoming family hospitality, differentiated to many
other restaurant operations.
Chaker Hanna
Chief Executive Officer
8 April 2019
Strategic Report
For the year ended 31 December 2018
The Directors present their strategic report for the year ended
31 December 2018.
Business model
The Group's principal brand is Comptoir Libanais, which operates
Lebanese and Eastern Mediterranean focused restaurants. The
restaurants seek to offer an all-day dining experience based around
healthy and fresh food in a friendly, colourful and vibrant
environment, which presents value for money. Lebanese and Eastern
Mediterranean food is, in our opinion, a popular current food trend
due to its flavoursome, healthy, low fat and vegetarian-friendly
ingredients as well as the ability to easily share the food with
friends.
We seek to design each Comptoir Libanais restaurant with a bold
and fresh design that is welcoming to all age groups and types of
consumer. Each Comptoir Libanais restaurant has posters and menus
showing an artist's impression of Sirine Jamal al Dine, an iconic
Arabian actress, providing a Middle Eastern café-culture feel. The
design of each restaurant is complemented by Comptoir Libanais'
retail offering that seeks to sell in-store a range of Middle
Eastern products, including embroidered bags, harissa tins,
pastries and sweets which are unique to Comptoir.
Shawa is a Lebanese grill-serving lean, grilled meats,
rotisserie chicken, homemade falafel, halloumi and fresh salad,
through a service counter offering, located in high footfall
locations, such as shopping centres.
The estimated average 'eat in' spend per head at Comptoir
Libanais is c. GBP15 and the average spend at Shawa is lower at
c.GBP10, so our offering is positioned in the affordable or 'value
for money' segment of the UK casual dining market. In addition, our
offering is well-differentiated and faces limited direct
competition, in marked contrast to other areas of the market.
Strategy for growth
Our strategy is to grow our owned-site operations under both the
Comptoir Libanais and Shawa brands. While Comptoir Libanais is
likely to remain the principal focus of our operations, Shawa
provides the opportunity to offer our Lebanese food from a smaller
footprint and therefore create greater flexibility to our roll-out
plans.
We also believe that there is considerable potential to grow the
Group's franchised operations and we see this as a complimentary
and relatively low-risk route to extend the presence of our brands,
both within the UK and in overseas territories. This momentum will
continue into 2019 with three new sites due to open in the second
half of the year with our franchise partner HMS Host; one site in
Ashford and our second and third international sites in Dubai and
Abu Dhabi Airports. The Group have recently appointed a Franchise
Manager to facilitate further growth in this important area.
The UK food delivery market continues to grow at pace, aided by
increasing technology enabling ease of ordering and quick access to
a wide offering of menus through apps such as UberEats. Comptoir
entered into a new agreement with UberEats in February 2019 and we
feel confident that this will help drive further growth across this
channel through direct delivery to our customers.
Review of the business and key performance indicators (KPIs)
Group revenue increased by 16% to GBP34.3m (2017 - GBP29.6m) and
the Consolidated Statement of Comprehensive Income shows a pre-tax
loss of GBP0.21m (2017 - GBP0.46m). However, as stated above, at
this stage in the development of the business the Board believes
that it is more helpful to focus on adjusted EBITDA, which excludes
non-recurring items and costs incurred in connection with the
opening of new restaurants and on this measure, the underlying
earnings of the group were GBP2.1m (2017 - GBP1.1m).
The Board and management team use a range of performance
indicators to monitor and measure the performance of the business.
However, in common with most businesses, the critical KPI's are
focused on growth in sales and EBITDA and these are appraised
against budgeted, forecast and last year's achieved levels.
Adjusted EBITDA during the year was 83% higher than that of 2017;
this included two significant high-profile site openings in 2018
and the Group will benefit from the full-year impact of these
openings in 2019 as the sites travel through their early growth
phase towards maturity. This will also offset the impact from the
closure of our Comptoir Westfield site during the first half of the
year, due to the relaunch of the food court scheme and the
consequent relocation of this unit within the centre in May 2019,
and the closure of the Westfield Shawa site when the lease expires
towards the end of May 2019.
In terms of non-financial KPIs, the standard of service provided
to customers is monitored via the scores from a programme of
regular monthly "mystery diner" visits to our restaurants carried
out by HGem and we are pleased to report an increase of 3% in
average visitor scores in 2018. This is a clear indication of our
very special family culture, which is focused on delivering
consistently great experiences for our customers. We also use
feedback from health and safety audits conducted by an
external-company (Food Alert) to ensure that critical operating
procedures are being adhered to.
Further explanation of the performance of the business over the
year is provided in the Chairman's Statement and the Chief
Executive's Review.
Principal risks and uncertainties
The Board of Directors ("the Board") has overall responsibility
for identifying the most significant risks faced by the business
and for developing appropriate policies to ensure that those risks
are adequately managed.
The following have been identified as the most significant risks
faced by the Group, however, it should be noted that this is not an
exhaustive list and the Company has policies and procedures to
address other risks facing the business.
Consumer demand
Frequent or regular participation in the eating-out market is
afforded by the consumer out of household disposable income.
Macroeconomic factors such as employment levels, interest rates and
inflation can impact disposable income and consumer confidence can
dictate their willingness to spend. Any weakness in consumer
confidence could have an adverse effect on footfall and customer
spend in our restaurants.
As indicated above, the core brands which the Group is rolling
out are positioned in the affordable segment of the casual dining
market. A strong focus on superior and attentive service together
with value added marketing initiatives can help to drive sales when
customer footfall is more subdued. This, together with the
strategic location of each of our restaurants helps to mitigate the
risk of consumer demand to the business.
Input cost inflation
The Group's key input variables are the cost of food and drink
and associated ingredients and the progressive increases in the UK
National Living Wage and Minimum Wage rates present a challenge we
must face up to alongside our peers and competitors.
We aim to maintain an appropriate level of flexibility in our
supplier base so we can work to mitigate the impact of input cost
inflation. Our teams work hard on predictive and responsive labour
scheduling so that our costs are well controlled.
Economic conditions
The results of the Brexit referendum and other macro-economic
issues have created a high level of uncertainty across a range of
issues that impact consumer spending. Deterioration in consumer
confidence due to future economic conditions could have a
detrimental impact on the Group in terms of footfall and sales.
This risk is mitigated by the positioning of the Group's brands,
which is within the affordable segment of the casual dining market.
Continued focus on customer relations and targeted and adaptable
marketing initiatives help the Group retain and drive sales where
footfall declines.
Labour cost inflation
Labour cost pressures which are outside of the control of the
Group, such as auto enrolment pension costs, minimum wage / Living
wage increases and the apprenticeship levy, are suffered by the
Group and its competitors. Labour costs are regularly monitored and
on-going initiatives are used to reduce the impact of such
pressures.
Strategy and execution
The Group's central strategy is to open additional new outlets
under its core Comptoir Libanais and Shawa brands. Despite making
every effort, there is no guarantee that the Group will be able to
secure a sufficient number of appropriate sites to meet its growth
and financial targets and it is possible that new openings may take
time to reach the anticipated levels of mature profitability or to
match historical financial returns.
The Group utilises the services of external property consultants
and having raised its profile as a consequence of its successful
AIM flotation, is developing stronger contacts with potential
landlords as well as their agents and advisers. However, there will
always be competition for the best sites and the Board will
continue to be highly selective in its evaluation of new sites to
ensure that target levels of return on investment are achieved.
Future developments
The Group will continue with its plans to roll out its Comptoir
Libanais and Shawa brands to further new sites across the UK and to
explore further opportunities to grow the Comptoir Libanais brand
via franchising with suitable partners.
On behalf of the Board
Chaker Hanna
Chief Executive Officer
8 April 2019
Statement of Corporate Governance
The Board have elected to adopt the Quoted Companies Alliance
(QCA) Corporate Governance Code in line with the changes under the
new rule 26 of the AIM Rules for Companies requiring all companies
that are traded on AIM to adopt and comply with a recognised
corporate governance code. Full details of our adoption to the code
can be found at
https://investors.comptoirlibanais.com/corporate-governance/.
The Board
The Board of Comptoir Group plc is the body responsible for the
Group's objectives, its policies and the stewardship of its
resources. At the balance sheet date, the Board comprised four
directors being Chaker Hanna, Ahmed Kitous and Mark Carrick as
executive directors and Richard Kleiner as non-executive
director.
Richard Kleiner is considered by the Board to be independent.
Each Director demonstrates a range of experience and sufficient
calibre to bring independent judgment on issues of strategy, risk
management, performance, resources and standards of conduct which
are vital for the success of the Group.
The Board has eleven board meetings during the year. Richard
Kleiner is Chairman of both the Audit and the Remuneration
Committees. The terms of reference of both these committees have
been approved by the Board.
Remuneration Committee
The Remuneration Committee's responsibilities include the
determination of the remuneration and options of Directors and
senior executives of the Group and the administration of the
Company's option schemes and arrangements. The Committee takes
appropriate advice, where necessary, to fulfil this remit.
Audit Committee
The Audit Committee meets twice a year including a meeting with
the auditors shortly before the signing of the accounts. The terms
of reference of the Audit Committee include: any matters relating
to the appointment, resignation or dismissal of the external
auditors and their fees; discussion with the auditors on the
nature, scope and findings of the audit; consideration of issues of
accounting policy and presentation; monitoring. The work of the
review function carried out to ensure the adequacy of accounting
controls and procedures.
Nomination Committee
The Company does not have a Nomination Committee. Any Board
appointments are dealt with by the Board itself.
Internal Control
The Board is responsible for the Group's system of internal
control and for reviewing the effectiveness of the system of
internal control. Internal control systems are designed to meet the
particular needs of a business and manage the risks but not to
eliminate the risk of failure to achieve the business objectives.
By its nature, any system of internal control can only provide
reasonable, and not absolute, assurance against material
misstatement or loss.
Internal Audit
Given the size of the Group, the Board does not believe it is
appropriate to have a separate internal audit function. The Group's
systems are designed to provide the Directors with reasonable
assurance that problems are identified on a timely basis and are
dealt with appropriately.
Relations with shareholders
There is a regular dialogue with institutional investors
including presentations after the Company's year-end and half year
results announcements. Feedback from major institutional
shareholders is provided to the Board on a regular basis and, where
appropriate, the Board will take steps to address their concerns
and recommendations. Aside from announcements that the Company
makes periodically to the market, the Board uses the annual general
meeting to communicate with shareholders and welcomes their
participation.
Going concern
On the basis of the current financial projections, the Directors
have a reasonable expectation that the Company and the Group have
adequate financial resources to continue in operational existence
for the foreseeable future. The Directors accordingly have adopted
the going concern basis in the preparation of the Group's accounts.
See below for further details on going concern.
The Group's focus on working capital management, particularly
around labour efficiency and gross margin controls around food and
drinks, coupled with the focus on investment in the continuing core
estate and further promoting brand awareness, will effect
continuing cash generation and EBITDA growth.
Report of the directors
The Directors present their report together with the audited
financial statements for the year ended 31 December 2018.
Results and dividends
The consolidated statement of comprehensive income is set out
below and shows the loss for the year.
The Directors do not recommend the payment of a dividend for the
year (2017: GBPnil).
Principal activities
The Company's and Group's principal activity continues to be
that of the operating of restaurants with Lebanese/Middle Eastern
offering in the UK casual dining sector.
Directors
The Directors of the Group, during the year, and their
shareholding, at the year-end date, were as follows:
Number of ordinary Percentage
shares shareholding
(%)
Executive
A Kitous 58,412,503 47.6%
C Hanna 17,835,833 14.5%
M Carrick - -
Non-Executive
R Kleiner 360,000 0.3%
J Kaye* 3,999,999 3.3%
*J Kaye resigned as a Director on 16(th) July 2018.
Substantial shareholders
Besides the Directors, the only other substantial shareholder at
the year-end date is Schroders plc, whom have a 9.5% shareholding
(11,666,667 ordinary shares).
Directors' remuneration
The remuneration of the Directors for the year ended 31 December
2018 was as follows:
Year ended 31 December 2018 Year ended
31 December
2017
Remuneration Pension Total Total
GBP GBP GBP GBP
A Kitous 187,500 1,708 189,208 187,756
C Hanna 187,500 1,708 189,208 187,756
R Kleiner 30,000 - 30,000 30,000
M Carrick* 85,238 1,008 86,246 -
J Kaye** 13,540 360 13,900 25,000
-------------- -------------- --------- --------- --------------
503,778 4,784 508,562 430,512
------------- -------------- --------- --------- --------------
* M Carrick was appointed on 16 July 2018.
** J Kaye resigned as a Director on 16 July 2018.
Creditor payment policy
The Group has a standard code and also agrees specific
individual terms with certain suppliers. Payment is normally made
in accordance with those terms, subject to the suppliers' own
performance.
Employees
Applications from disabled persons are given full consideration
providing the disability does not seriously affect the performance
of their duties. Such persons, once employed, are given appropriate
training and equal opportunities.
The Group takes a positive view toward employee communication
and has established systems for ensuring employees are informed of
developments and that they are consulted regularly.
Donations
The Group made charitable donations of GBPnil (2017: GBPnil) in
the year.
Financial Instruments
Details of the use of financial instruments and the principal
risks faced by the Group are contained in note 25 to the financial
statements.
Future developments
Details of future developments are contained in the Strategic
Report
Auditors
All the current Directors have taken all reasonable steps
necessary to make themselves aware of any information needed by the
Group's auditors for the purposes of their audit and to establish
that the auditors are aware of that information. The Directors are
not aware of any relevant audit information of which the auditors
are unaware.
UHY Hacker Young have expressed their willingness to continue in
office and a resolution to re-appoint them will be proposed at the
annual general meeting.
On behalf of the board
Chaker Hanna
Chief Executive Officer
8 April 2019
Statement of directors' responsibilities
The Directors are responsible for preparing the Annual Reports
and the Group and Parent Company financial statements in accordance
with applicable United Kingdom law and regulations. Company law
requires the Directors to prepare Group and Parent Company
financial statements for each financial year. Under that law, and
as required by the AIM rules, the Directors have elected to prepare
Group financial statements under International Financial Reporting
Standards (IFRSs), as adopted by the European Union, and the Parent
Company financial statements under United Kingdom Accounting
Standards.
Under Company Law the Directors must not approve the Group and
Parent Company financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the Group
and Parent Company and of the profit or loss of the Group for that
period. In preparing the Group and Parent Company financial
statements the Directors are required to:
-- present fairly the financial position, financial performance
and cash flows of the Group and Parent Company;
-- select suitable accounting policies in accordance with IAS 8:
'Accounting Policies, Changes in Accounting Estimates and Errors'
and then apply them consistently;
-- present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
-- make judgments and estimates that are reasonable;
-- provide additional disclosures when compliance with the
specific requirements in IFRSs as adopted by the European Union is
insufficient to enable users to understand the impact of particular
transactions, other events and conditions on the Group's and the
Company's financial position and financial performance; and
-- the Group and Parent Company financial statements have been
prepared in accordance with IFRSs as adopted by the European Union
or United Kingdom Accounting Standards, subject to any material
departures disclosed and explained in the financial statements.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group's and
Parent Company's transactions and disclose with reasonable accuracy
at any time the financial position of the Group and Parent Company
and enable them to ensure that the Group and Parent Company
financial statements comply with the Companies Act 2006. They are
also responsible for safeguarding the assets of the Group and
Parent Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Independent auditors' report
To the members of Comptoir Group Plc
Opinion
We have audited the financial statements of Comptoir Group Plc
(the 'Parent Company') and its subsidiaries (the 'Group') for the
year ended 31 December 2018 which comprise the Consolidated
Statement of Comprehensive Income, the Consolidated and Parent
Company Balance Sheet, the Consolidated and Parent Company
Statements of Changes in Equity, the Consolidated Statement of Cash
Flows and the related notes, including a summary of significant
accounting policies.
The financial reporting framework that has been applied in the
preparation of the Group's financial statements is applicable law
and International Financial Reporting Standards (IFRSs) as adopted
by the European Union. The financial reporting framework that has
been applied in the preparation of the Parent Company's financial
statements is FRS 102 'The Financial Reporting Standard applicable
in the UK and Republic of Ireland' ("FRS 102" or "UK GAAP") and in
accordance with the provisions of the Companies Act 2006.
In our opinion:
-- the financial statements give a true and fair view of the
state of the Group and Parent Company's affairs as at 31 December
2018 and of the Group's loss and cash flows for the year then
ended;
-- the Group financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union;
-- the Parent Company financial statements have been properly
prepared in accordance with FRS 102 and as applied in accordance
with the provisions of the Companies Act 2006; and
-- the Group financial statements have been prepared in
accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We are independent of the Group
and Parent Company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK,
including the FRC's Ethical Standard as applied to listed entities,
and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in
relation to which the ISAs (UK) require us to report to you
where:
-- the directors' use of the going concern basis of accounting
in the preparation of the financial statements is not appropriate;
or
-- the directors have not disclosed in the financial statements
any identified material uncertainties that may cast significant
doubt about the Group's or the Parent Company's ability to continue
to adopt the going concern basis of accounting for a period of at
least twelve months from the date when the financial statements are
authorised for issue.
Key audit matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified during our
audit.
Key audit matter How our audit addressed the key
audit matter
---------------------------------------- -------------------------------------------------------------------
Revenue recognition
The Group recognises revenue We have tested the existence
for services and goods provided of sales and the correct treatment
in the Group's restaurants (excluding of the service charges and the
value added tax and gratuities Tronc system.
left by customers for the benefit
of employees) and is recognised We have audited revenue for completeness
at the point of sales. It should by undertaking cut-off testing
be ensured that any gratuities to ensure that sales are accounted
left by customers, which are for in the correct period.
due to the staff, are not recognised
as revenue. We have also completed sales
walkthrough tests to test the
Service charges/tips are distributed operations of controls over the
between those who are eligible sales system and processes.
via the Tronc system and through
wages. Those eligible for service We have not found any issues
charges include all employees or errors involving sales and
who have any contact with a customer are therefore satisfied we have
or any form of influence over assurance over sales recognition
revenue growth. Therefore some and treatment.
head office staff also receive
a share of service charges.
There is a rebuttable risk of
fraudulent revenue recognition
and our audit procedures consider
that this risk should be treated
as a significant risk.
In this regard, we consider that
there is a risk over the existence
and completeness assertions relating
to revenue recognition.
---------------------------------------- -------------------------------------------------------------------
Impairment of property, plant
and equipment We assessed Management's process
Property, plant and equipment for identifying sites with a
is a significant asset on the potential impairment and the
Group's balance sheet with a impairment review process and
net book value of GBP11.7m (2017 performed analysis to challenge
- GBP11.1m). The balance is primarily their assumptions on impairments.
comprised of leasehold buildings Our audit work included, but
and fixtures, fittings and equipment was not restricted to, the following:
to support the group's restaurants. * We reviewed Management's assessment of forecasted
cash flows and challenged significant movements in
At each reporting date the Group forecasted cash flows on a restaurant by restaurant
considers any indication of impairment basis compared to historic performance.
to the carrying value of its
property, plant and equipment,
and other assets, such as lease
premiums and goodwill. * We reviewed the 2018 forecasts against the actuals to
determine Management's historic forecasting accuracy.
The assessment is based on expected
future cash flows and is carried
out on each restaurant as these
are separate 'cash generating * We held discussions with Management to challenge the
units'. impairments on those restaurants where: the headroom
before impairment was low and the forecasted growth
This area has been recognised in cash flows was high.
by the Board as a critical accounting
judgement and estimate. There
is also a risk that Management
may unduly influence the significant
judgements and estimates in respect
of the requirement for an impairment
provision.
---------------------------------------- -------------------------------------------------------------------
Onerous contracts
The Group recognises provisions Our audit work included, but
for onerous contracts when the was not restricted to, the following:
expected benefits to be derived * We reviewed the leases for onerous leases and
by the Group from a contract obtained evidence to support assumptions on the
are lower than the unavoidable leases and the quantum of income.
costs of meeting its obligation
under the contract.
We challenged Management on all
restaurants where there is negative
Earnings Before Interest Taxation
and Depreciation as to if an
onerous contract provision was
required.
---------------------------------------- -------------------------------------------------------------------
Our application of materiality
The scope and focus of our audit was influenced by our
assessment and application of materiality. We apply the concept of
materiality both in planning and performing our audit, and in
evaluating the effect of misstatements on our audit and on the
financial statements.
We define financial statement materiality as the magnitude by
which misstatements, including omissions, could reasonably be
expected to influence the economic decisions taken on the basis of
the financial statements by reasonable users.
In order to reduce to an appropriately low level the probability
that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent
of testing needed. Importantly, misstatements below these levels
will not necessarily be evaluated as immaterial as we also take
account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their
effect on the financial statements as a whole.
Overall materiality We determined materiality for the financial
statements as a whole to be GBP102,000.
How we determine it Based on a benchmark of 5% of Adjusted
EBITDA.
Rationale for benchmarks applied We believe Adjusted EBITDA to
be the most appropriate benchmark due to the size, growth stage,
reduction in profitability and the nature of the Company and
Group.
Performance materiality On the basis of our risk assessment,
together with our assessment of the Group's control environment,
our judgement is that performance materiality for the financial
statements should be 75% of materiality, and was set at
GBP77,000.
Reporting threshold
We agreed with the Audit Committee that we would report to them
all misstatements over GBP10,000 identified during the audit, as
well as differences below that threshold that, in our view, warrant
reporting on qualitative grounds. We also report to the Audit
Committee on disclosure matters that we identified when assessing
the overall presentation of the financial statements.
An overview of the scope of our audit
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the directors made
subjective judgements, for example in respect of significant
accounting estimates that involved making assumptions and
considering future events that are inherently uncertain.
We tailored the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the financial
statements as a whole, taking into account an understanding of the
structure of the Company and the Group, their activities, the
accounting processes and controls, and the industry in which they
operate. Our planned audit testing was directed accordingly and was
focused on areas where we assessed there to be the highest risk of
material misstatement.
Our Group audit scope includes all of the group companies. At
the Parent Company level, we also tested the consolidation
procedures. The audit team met and communicated regularly
throughout the audit with the CFO in order to ensure we had a good
knowledge of the business of the Group. During the audit we
reassessed and re-evaluated audit risks and tailored our approach
accordingly.
The audit testing included substantive testing on significant
transactions, balances and disclosures, the extent of which was
based on various factors such as our overall assessment of the
control environment, the effectiveness of controls and the
management of specific risk.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit and
significant findings, including any significant deficiencies in
internal control that we identify during the audit.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report, other than the financial statements and our auditors'
report thereon. Our opinion on the financial statements does not
cover the other information and, except to the extent otherwise
explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information.
If, based on the work we have performed, we conclude that there
is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this
regard.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion, based on the work undertaken in the course of
the audit:
-- the information given in the strategic report and the
directors' report for the financial year for which the financial
statements are prepared is consistent with the financial
statements; and
-- the strategic report and the directors' report have been
prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and
Parent Company and its environment obtained in the course of the
audit, we have not identified material misstatements in the
strategic report or the directors' report.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
-- adequate accounting records have not been kept by the Parent
Company, or returns adequate for our audit have not been received
from branches not visited by us; or
-- the Parent Company financial statements are not in agreement
with the accounting records and returns; or
-- certain disclosures of directors' remuneration specified by law are not made; or
-- we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the statement of directors'
responsibilities, the directors are responsible for the preparation
of the financial statements and for being satisfied that they give
a true and fair view, and for such internal control as the
directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the Group's and the Parent Company's
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the
group or Parent Company or to cease operations, or have no
realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of
these financial statements.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council's website at www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor's report.
Use of our report
This report is made solely to the Parent Company's members, as a
body, in accordance with part 3 of Chapter 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to
the Parent Company's members those matters we are required to state
to them in an auditor's report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Parent Company and the
Parent Company's members as a body, for our audit work, for this
report, or for the opinions we have formed.
Colin Wright (Senior Statutory Auditor)
For and on behalf of UHY Hacker Young
Chartered Accountants and Statutory Auditor
UHY Hacker Young
4 Thomas More Square
London E1W 1YW
8 April 2019
Consolidated statement of comprehensive income
For the year ended 31 December 2018
Year ended
Year ended 31 31 December
December 2018 2017
Notes GBP GBP
Revenue 2 34,331,309 29,581,696
Cost of sales (9,630,294) (8,275,701)
----------------------------------------- ------- --------------- -------------
Gross profit 24,701,015 21,305,995
Distribution expenses (9,108,884) (8,424,399)
Administrative expenses (15,757,252) (13,636,697)
Other income 2 - 6,293
Profit from sale of freehold
property 2 - 1,266,086
Operating (loss)/profit 3 (165,121) 517,278
Finance costs 6 (41,758) (60,420)
----------------------------------------- ------- --------------- -------------
(Loss)/profit before tax (206,879) 456,858
Taxation charge 7 (108,427) (57,746)
----------------------------------------- ------- --------------- -------------
(Loss)/profit for the year (315,306) 399,112
Other comprehensive income - -
----------------------------------------- ------- --------------- -------------
Total comprehensive (loss)/income
for the year (315,306) 399,122
-------------------------------------------------- --------------- -------------
Basic (loss)/earnings per
share (pence) 8 (0.26) 0.39
Diluted (loss)/earnings per
share (pence) 8 (0.26) 0.39
----------------------------------------- ------- --------------- -------------
Adjusted EBITDA:
Operating (loss)/profit -
as above (165,121) 517,278
Add back:
Depreciation and amortisation 10, 11 1,496,891 1,521,586
Profit from sale of freehold
property 2 - (1,266,086)
Impairment of assets 10, 11 259,205 1,825
Share-based payments - expense/(credit) 22 28,745 (162,620)
--------------- -------------
EBITDA 1,619,720 611,983
Restaurant opening costs 3 433,506 509,704
--------------- -------------
Adjusted EBITDA 2,053,226 1,121,687
All of the above results are derived from continuing operations.
(Loss)/profit for the year and total comprehensive (loss)/income
for the year is entirely attributable to the equity shareholders of
the Company.
Consolidated balance sheet
At 31 December 2018
31 December 31 December
2018 2017
Notes GBP GBP
Assets
Non-current assets
Property, plant and equipment 11 11,747,036 11,104,026
Intangible assets 10 889,828 1,009,892
Deferred tax asset 18 168,176 148,822
----------------------------------------------------------------------------------------------------- ------ -------------------------------------------- -------------
Current
asset 12,805,040 12,262,740
Inventories 13 706,741 606,652
Trade and other receivables 14 2,550,223 2,380,619
Cash and cash equivalents 4,624,673 5,627,341
----------------------------------------------------------------------------------------------------- ------ -------------------------------------------- -------------
7,881,637 8,614,612
Total assets 20,686,677 20,877,352
----------------------------------------------------------------------------------------------------- ------ -------------------------------------------- -------------
Liabilities
Current liabilities
Borrowings 16 (427,179) (669,778)
Trade and other payables 15 (5,706,116) (5,053,198)
Current tax liabilities (158,024) (148,163)
(6,291,319) (5,871,139)
Non-current liabilities
Borrowings 16 (315,953) (706,711)
Provisions for liabilities 17 (60,892) (48,036)
Deferred tax liability 18 (172,380) (118,772)
(549,225) (873,519)
Total liabilities (6,840,544) (6,744,658)
----------------------------------------------------------------------------------------------------- ------ -------------------------------------------- -------------
Net assets 13,846,133 14,132,694
----------------------------------------------------------------------------------------------------- ------ -------------------------------------------- -------------
Equity
Share capital 19 1,226,667 1,226,667
Share premium 10,050,313 10,050,313
Other reserves 20 28,745 316,590
Retained earnings 2,540,408 2,539,124
----------------------------------------------------------------------------------------------------- ------ -------------------------------------------- -------------
Total equity - attributable
to equity shareholders
of the company 13,846,133 14,132,694
----------------------------------------------------------------------------------------------------- ------ -------------------------------------------- -------------
The financial statements of Comptoir Group PLC (company
registration number 07741283) were approved by the Board of
Directors and authorised for issue on 8 April 2019 and were signed
on its behalf by:
Chaker Hanna
Chief Executive Officer
Consolidated statement of changes in equity
For the year ended 31 December 2018
Share Share Other Retained Total
capital premium reserves earnings equity
Notes GBP GBP GBP GBP GBP
Year ended 31 December
2017
At 1 January 2017 960,000 6,465,687 479,210 2,140,012 10,044,909
Profit for the year - - - 399,112 399,112
Total comprehensive
income - - - 399,112 399,112
-------------------------- ------ ---------- ----------- ------------ ---------- -----------
Transactions with
owners
Share-based payments 22 - - (162,620) - (162,620)
Issue of shares 19 266,667 3,733,333 - - 4,000,000
Share issue costs 19 - (148,707) - - (148,707)
-------------------------- ------ ---------- ----------- ------------ ---------- -----------
Total transactions
with owners 266,667 3,584,626 (162,620) - 3,688,673
-------------------------- ------ ---------- ----------- ------------ ---------- -----------
At 31 December 2017 1,226,667 10,050,313 316,590 2,539,124 14,132,694
-------------------------- ------ ---------- ----------- ------------ ---------- -----------
Year ended 31 December
2018
At 1 January 2018 1,226,667 10,050,313 316,590 2,539,124 14,132,694
Loss for the year - - - (315,306) (315,306)
-------------------------- ------ ---------- ----------- ------------ ---------- -----------
Total comprehensive
loss - - - (315,306) (315,306)
-------------------------- ------ ---------- ----------- ------------ ---------- -----------
Transactions with
owners
Share-based payments 22 - - 28,745 - 28,745
Cancellation of existing
EMI share option scheme 22 - - (316,590) 316,590 -
-------------------------- ------ ---------- ----------- ------------ ---------- -----------
Total transactions
with owners - - (287,845) 316,590 28,745
-------------------------- ------ ---------- ----------- ------------ ---------- -----------
At 31 December 2018 1,226,667 10,050,313 28,745 2,540,408 13,846,133
-------------------------- ------ ---------- ----------- ------------ ---------- -----------
Consolidated statement of cash flows
For the year ended 31 December 2018
Year ended Year ended
31 December 31 December
2018 2017
Notes GBP GBP
Operating activities
Cash inflow from operations 23 2,200,163 1,626,031
Interest paid (41,758) (60,420)
Tax paid (64,312) (15,950)
Net cash from operating activities 2,094,093 1,549,661
--------------------------------------- ------ ------------- --------------
Investing activities
Purchase of property, plant &
equipment 11 (2,279,042) (2,772,518)
Payments for lease premiums 10 - (14,982)
Proceeds from sale of property 2 - 2,652,278
Net cash used in investing activities (2,279,042) (135,222)
--------------------------------------- ------ ------------- --------------
Financing activities
Proceeds from issue of shares,
net of issue costs - 3,851,293
Capital element of finance leases
paid - (21,921)
Bank loan repayments (633,357) (614,039)
Net cash (outflow)/inflow from
financing activities (633,357) 3,215,333
--------------------------------------- ------ ------------- --------------
(Decrease)/Increase in cash and
cash equivalents (818,306) 4,629,772
Cash and cash equivalents at
beginning of year 5,442,979 813,207
Cash and cash equivalents at
end of year 4,624,673 5,442,979
--------------------------------------- ------ ------------- --------------
Cash and cash equivalents:
Cash at bank and in hand 4,624,673 5,627,341
Bank overdraft (note 15) 15 - (184,362)
--------------------------------------- ------ ------------- --------------
Principal accounting policies for the consolidated financial
statements
For the year ended 31 December 2018
Reporting entity
Comptoir Group Plc (the "Company") is a company incorporated and
registered in England and Wales, with a company registration number
of 07741283. The Company was formerly called Levant Restaurants
Group Limited and on 8 June 2016 it re-registered as a public
limited company and changed its name to Comptoir Group Plc. The
address of the Company's registered office is 717B North Circular
Road, London, England, NW2 7AH.
The consolidated financial statements of the Company for the
year ended 31 December 2018 comprise of the Company and its
subsidiaries (together referred to as the "Group").
Statement of compliance
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards and its
interpretations adopted by the International Accounting Standards
Board (IASB), as adopted by the European Union (IFRSs). The parent
company financial statements have been prepared using United
Kingdom Accounting Standards including FRS 102 'The financial
reporting standard applicable in the UK and Republic of Ireland'
and are set out below.
Going concern basis
The consolidated financial statements have been prepared on the
going concern basis as, after making appropriate enquires, the
Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future, a period of not less than 12 months from the date of
approving these financial statements. The principal risks and
uncertainties facing the Group and further comments on going
concern are set out in the report of the Directors.
Basis of preparation
These consolidated financial statements for the year ended 31
December 2018 are prepared in accordance with IFRS.
The financial statements are presented in Pound Sterling (GBP),
which is both the functional and presentational currency of the
Group and Company. All amounts are rounded to the nearest pound,
except where otherwise indicated.
The Group and Parent Company financial statements have been
prepared on the historical cost convention as modified for certain
financial instruments, which are stated at fair value. Non-current
assets are stated at the lower of carrying amount and fair value
less costs to sell.
Significant accounting judgements and estimates
The preparation of financial statements in conformity with IFRS
requires management to make judgments, estimates and assumptions
that affect the application of policies and reported amounts of
assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the
judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. The resulting accounting
estimates may differ from the related actual results.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future
periods if the revision affects both current and future
periods.
In the process of applying the Group's accounting policies,
management has made a number of judgments and estimations of which
the following are the most significant.
The estimates and assumptions that have a risk of causing
material adjustment to the carrying amounts of assets and
liabilities within the future financial years are as follows:
Depreciation, useful lives and residual values of property,
plant & equipment
The Directors estimate the useful lives and residual values of
property, plant & equipment in order to calculate the
depreciation charges. Changes in these estimates could result in
changes being required to the annual depreciation charges in the
statement of comprehensive incomes and the carrying values of the
property, plant & equipment in the balance sheet.
Impairment of assets
The Group assesses at each reporting date whether there is an
indication that an asset may be impaired. If any such indication
exists, or when annual impairment testing for an asset is required,
the Group makes an estimate of the asset's recoverable amount. An
asset's recoverable amount is the higher of an asset's or
cash-generating unit's fair value less costs to sell and its value
in use and is determined for an individual asset, unless the asset
does not generate cash inflows that are largely independent of
those from other assets or groups of assets.
Where the carrying amount of an asset exceeds its recoverable
amount, the asset is considered impaired and is written down to its
recoverable amount. In assessing value in use, the estimated future
cash flows are discounted to their present value of money and the
risks specific to the asset. Impairment losses of continuing
operations are recognized in the profit or loss in those expense
categories consistent with the function of the impaired asset.
An impairment of assets of GBP259,205 (2017: GBP1,825) was
required in the year ended 31 December 2018.
Lease classification
The Group has a substantial amount of property leases and
therefore their classification as either finance or operating
leases is critical to the financial statements. The accounting for
leases involves the exercise of judgment, particularly in
determining whether the leases meet the definition of an operating
or a finance lease.
Leases are classified as finance leases whenever the terms of
the lease transfer substantially all the risks and rewards of the
ownership to the lessee. All other leases are classified as
operating lease.
Future accounting policies
At the date of authorisation of these financial statements, the
following new and revised IFRS Standards and Interpretations have
been adopted in the current year, where applicable to the Group.
Their adoption has not had any significant impact on the amounts
reported in the financial statements.
IAS 7 (Amended) Disclosure Initiative
IAS 12 (Amended) Recognition of Deferred Tax Assets for
Unrealised Losses
IFRS 2014-2016 Cycle Annual improvements
At the date of authorisation of these financial statements, the
following IFRS Standards and Interpretations, which have not been
applied in these financial statements, were in issue but not yet
effective:
IFRS 9 (Amended) Financial Instruments
IFRS 16 (Amended) Leases
IFRS 17 (Revised) Insurance Contracts
IFRS 2 (Amended) Classification and Measurement of Share-based
Payment Transactions
IAS 40 (Amended) Transfers of Investment Property
IFRIC 22 (Revised) Foreign Currency Transactions and Advance
Consideration
IFRS 2015 - 2017 Cycle Annual improvements
Beyond the information above, it is not practicable to provide a
reasonable estimate of the effect of these standards until a
detailed review has been completed.
IFRS 16 'Leases' supersedes IAS 17 'Leases' and will be
effective for the Group from 1 January 2019. The standard requires
lessees to recognise a right of use asset and corresponding
liability for all leases unless the lease term is 12 months or
less, or the underlying asset is of low value.
From the work performed to date and based on the undiscounted
lease commitments presented in note 27, it is anticipated that
implementation of the new standard will have a significant impact
on the reported assets and liabilities of the Group. In addition,
the implementation of the standard will impact the income statement
and classification of cash flows. A reliable estimate of the
financial impact on the Group's results is dependent on a number of
unresolved areas, including; choice of transition option,
refinement of approach to discount rates, estimates of lease-term
for leases with options to break and renew and conclusion of data
collection.
Significant accounting policies
The accounting policies set out below have been applied
consistently to all periods presented in the historical
consolidated financial statements, unless otherwise indicated.
(a) Basis of consolidation
These financial statements consolidate the financial statements
of the Company and all of its subsidiary undertakings drawn up to
31 December 2018.
Subsidiaries are entities controlled by the Company. Control
exists when the Company has the power, directly or indirectly, to
govern the financial and operating policies of an entity so as to
obtain benefits from its activities. In assessing control,
potential voting rights that presently are exercisable or
convertible are taken into account, regardless of management's
intention to exercise that option or warrant. The financial
statements of subsidiaries are included in the consolidated
financial statements from the date that control commences until the
date the control ceases.
The cost of an acquisition is measured as the fair value of the
assets given, equity instruments issued and liabilities incurred or
assumed at the date of exchange, plus costs directly attributable
to the acquisition. Identifiable assets acquired and liabilities
and contingent liabilities assumed are measured initially at their
fair values at the acquisition date, irrespective of the extent of
any minority interest. The excess of the cost of acquisition over
the fair value of the identifiable net assets acquired is recorded
as goodwill.
All intra-group balances, transactions, income and expenses and
profits and losses resulting from intra-group transactions are
eliminated fully on consolidation. The gain or loss on disposal of
a subsidiary company is the difference between net disposals
proceeds and the Group's share of its net assets together with any
goodwill and exchange differences.
(b) Foreign currency translation
Functional and presentational currency
Items included in the financial results of each of the Group
entities are measured using the currency of the primary economic
environment in which the entities operate (the functional
currency). The consolidated financial statements are presented in
Pounds Sterling ("GBP") which is the Company's functional and
operational currency.
Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year
end exchange rates of monetary assets and financial liabilities
denominated in foreign currencies are recognised in the statement
of comprehensive income.
(c) Financial instruments
Financial assets and financial liabilities are measured
initially at fair value plus transactions costs. Financial assets
and financial liabilities are measured subsequently as described
below.
Financial assets
The Group classifies its financial assets as 'loans and
receivables'. The Group assesses at each balance sheet date whether
there is objective evidence that a financial asset or a group of
financial assets is impaired.
Loans and receivables are non-derivative financial assets with
fixed and determinable payments that are not quoted in an active
market. They are included in current assets, except for maturities
greater than 12 months after the statement of financial position
date, which are classified as non-current assets. Receivables are
classified as 'trade and other receivables' and loans are
classified as 'borrowings' in the statement of financial
position.
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method, less provision for impairment. After initial
recognition loans and receivables are carried at amortised cost
using the effective interest rate method less any allowance for
impairment. Gains and losses are recognised in the income statement
when the loans and receivables are derecognised or impaired, as
well as through the amortisation process.
A provision for impairment of trade receivables is established
when there is objective evidence that the Group will not be able to
collect all amounts due according to the original terms of the
receivables. Significant financial difficulty, high probability of
bankruptcy or a financial reorganisation and default are considered
indicators that the trade receivable is impaired. The amount of the
provision is the difference between the asset's carrying amount and
the present value of the estimated future cash flows discounted at
the original effective interest rate.
The loss is recognised in the income statement. When a trade
receivable is uncollectable, it is written off against the
allowance account for trade receivables. Subsequent recoveries of
amounts previously written off are credited to the statement of
comprehensive income.
Financial assets are derecognised when the contractual rights to
the cash flows from the financial asset expire, or when the
financial asset and all substantial risks and rewards are
transferred.
Financial liabilities
The Group's financial liabilities include trade and other
payables.
Trade payables are recognised initially at fair value less
transaction costs and subsequently measured at amortised cost using
the effective interest method ("EIR" method).
Amortised cost is calculated by taking into account any discount
or premium on acquisition and fees or costs that are an integral
part of the EIR. The EIR amortisation is included in finance costs
in the statement of comprehensive Income.
A financial liability is derecognised when it is extinguished,
discharged, cancelled or expires.
(d) Property, plant and equipment
Items of property, plant and equipment are stated at cost less
accumulated depreciation and impairment losses.
Leases in which the Group assumes substantially all the risks
and rewards of ownership are classified as finance leases. The
owner-occupied properties (excluding land element) acquired by way
of finance lease are stated at an amount equal to the lower of
their fair value and the present value of the minimum lease
payments at inception of the lease, less accumulated depreciation
and impairment. Lease payments are accounted for as described in
accounting policy (n).
Depreciation
Depreciation is charged to the income statement on a reducing
balance basis and on a straight-line basis over the estimated
useful lives of corresponding items of property, plant and
equipment:
Land and buildings Leasehold Over the length of the lease
Land and buildings Freehold 4% straight line basis
Plant and machinery 15% on reducing balance
Fixture, fittings and equipment 10% on reducing balance
The carrying values of plant and equipment are reviewed at each
reporting date to determine whether there are any indications of
impairment. If any such indication exists, the assets are tested
for impairment to estimate the assets' recoverable amounts. Any
impairment losses are recognized in the statement of comprehensive
income.
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at each statement of financial position
date. Gains and losses on disposals are determined by comparing the
proceeds with the carrying amount and are recognised within the
Statement of Comprehensive Income.
(e) Intangible assets - Goodwill
All business combinations are accounted for by applying the
acquisition method. Goodwill represents amounts arising on
acquisition of subsidiaries, associates and joint ventures.
Goodwill represents the difference between the cost of the
acquisition and the fair value of the net identifiable assets
acquired.
Goodwill is stated at cost less any accumulated impairment
losses. Goodwill is allocated to cash generating units and is
formally tested for impairment annually, thus is not amortised. Any
excess of fair value of net assets over consideration on
acquisition are recognised directly in the income statement.
(f) Intangible assets - lease premiums
Lease premiums paid to previous tenants are recognised within
the Balance Sheet as an intangible asset and amortised over the
length of the lease. The amortisation is charged to the statement
of comprehensive income on a straight-line basis.
(g) Inventories
Inventories are stated at the lower of costs and net realisable
value. Cost comprises direct materials, and those direct overheads
that have been incurred in bringing the inventories to their
present location and condition.
Net realisable value is the estimated selling price less all
estimated costs of completion and costs to be incurred in
marketing, selling and distribution.
(h) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, cash at bank,
deposits held at call with banks and other short-term highly liquid
investments with original maturities of three months or less. Bank
overdrafts that are repayable on demand are included within
borrowings in current liabilities on the balance sheet.
For the purpose of the statement of cash flows, cash and cash
equivalents consist of cash and cash equivalents as defined above,
net of outstanding bank overdrafts.
(i) Share-based payments
The Group's share option programme allows Group employees to
acquire shares of the Company and all options are equity-settled.
The fair value of options granted is recognised as an employee
expense with a corresponding increase in equity. The fair value is
measured at grant date and spread over the period during which the
employees become unconditionally entitled to the options. The fair
value of the options granted is measured using the Black-Scholes
model, taking into account the terms and conditions upon which the
options were granted. The amount recognised as an expense is
adjusted to reflect the actual number of share options that
vest.
(j) Provisions for liabilities
A provision is recognised in the balance sheet when the Group
has a present legal or constructive obligation as a result of a
past event, and it is probable that an outflow of economic benefits
will be required to settle the obligation.
The amount recognised as a provision is the best estimate of the
consideration required to settle the present obligation at the end
of the reporting period, taking into account the risks and
uncertainties surrounding the obligation. Where the effect of the
time value of money is material, the amount expected to be required
to settle the obligation is recognised at present value using a
pre-tax discount rate. The unwinding of the discount is recognised
as a finance cost in the income statement in the period it
arises.
Provisions for leasehold property dilapidation repairs are
recognised when the Group has a present obligation to carry out
dilapidation work on the leasehold premises before the property is
vacated. The amount recognised as a provision is the best estimate
of the costs required to carry out the dilapidations work and is
spread over the expected period of the tenancy.
(k) Deferred tax and current tax
Current income tax assets and liabilities for the current period
are measured at the amount expected to be recovered or paid to the
taxation authorities. A provision is made for corporation tax for
the reporting period using the tax rates that have been
substantially enacted for the company at the reporting date.
Current income tax relating to items recognised directly in
equity is recognised in equity and not in the Statement of
Comprehensive Income.
Deferred income tax is provided in full on a non-discounted
basis, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying
amounts in the consolidated financial statements. Deferred income
tax is determined using tax rates (and laws) that have been enacted
or substantially enacted by the statement of financial position
date and are expected to apply when the related deferred income tax
asset is realised or the deferred income tax liability is
settled.
Deferred income tax assets are recognised to the extent that it
is probable that future taxable profit will be available against
which the temporary differences can be utilised.
(l) Employee benefits
Short term employee benefits
Wages, salaries, paid annual leave, paid sick leave and bonuses
are recognised as an expense in the period in which the associated
services are rendered by employees.
The Group recognises an accrual for annual holiday pay accrued
by employees as a result of services rendered in the current
period, and which employees are entitled to carry forward and use
within 12 months. The accrual is measured at the salary cost
payable for the period of absence.
Pensions and other post-employment benefits
The Group pays monthly contributions to defined contribution
pension plans. The legal or constructive obligation of the Group is
limited to the amount that they agree to contribute to the plan.
The contributions to the plan are charged to the Statement of
Comprehensive Income in the period to which they relate.
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.
(m) Revenue
Revenue represents amounts received and receivable for services
and goods provided (excluding value added tax) and is recognised at
the point of sale. Revenue is recognised to the extent that it is
probable that the economic benefits will flow to the Group and the
reserve can be reliably measured.
(n) Expenses
Operating lease payments
Leases in which a significant portion of the risks and rewards
of ownership are retained by the lessor are classified as operating
leases. Payments made under operating leases are recognised in the
comprehensive income statement on a straight-line basis over the
term of the lease. Incentives to enter into an operating lease are
also spread on a straight-line basis over the lease term as a
reduction in rental expense.
Finance lease payments
Leases are classified as finance leases whenever the terms of
the lease transfer substantially all the risks and rewards of
ownership of the leased asset to the Group. All other leases are
classified as operating leases. Assets held under finance leases
are recognised initially at the fair value of the leased asset (or,
if lower, the present value of minimum lease payments) at the
inception of the lease. The corresponding liability to the lessor
is included in the statement of financial position as a finance
lease obligation.
Minimum lease payments are apportioned between the finance
charge and the reduction of the outstanding liability. The finance
charge is allocated to each period during the lease term so as to
produce a constant periodic rate of interest on the remaining
balance of the liability. Finance charges are deducted in measuring
profit or loss.
Assets held under finance leases are included in property, plant
& equipment and depreciated and assessed for impairment losses
in the same way as owned assets.
Opening expenses
Property rentals and related costs incurred up to the date of
opening of a new restaurant are written off to the income statement
in the period in which they are incurred. Promotional and training
costs are written off to the income statement in the period in
which they are incurred.
Financial expenses
Financial expenses comprise of interest payable on bank loans,
hire purchase liabilities and other financial costs and charges.
Interest payable is recognised on an accrual basis.
(o) Ordinary share capital
Ordinary shares are classified as equity. Costs directly
attributable to the increase of new shares or options are shown in
equity as a deduction from the proceeds.
(p) Dividend policy
In accordance with IAS 10 'Events after the Balance Sheet Date',
dividends declared after the balance sheet date are not recognised
as a liability at that balance sheet date, and are recognised in
the financial statements when they have received approval by
shareholders. Unpaid dividends that are not approved are disclosed
in the notes to the consolidated financial statements.
(q) Commercial discount policy
Commercial discounts represent a reduction in cost of goods and
services in accordance with negotiated supplier contracts, the
majority of which are based on purchase volumes. Commercial
discounts are recognised in the period in which they are earned and
to the extent that any variable targets have been achieved in that
financial period. Costs associated with commercial discounts are
recognised in the period in which they are incurred.
(r) Operating segments
An operating segment is a component of an entity that engages in
business activities from which it may earn revenues and incur
expenses (including revenue and expenses related to transactions
with other components of the same entity), whose operating results
are regularly reviewed by the entity's Chief Operating Decision
Maker to make decisions about resources to be allocated to the
segment and assess its performance, and for which discrete
financial information is available. The Chief Operating Decision
Maker has been identified as the Board of Executive Directors, at
which level strategic decisions are made.
Notes to the consolidated financial statements
For the year ended 31 December 2018
1. Segmental analysis
The Group has only one operating segment being: the operation of
restaurants with Lebanese and Middle Eastern Offerings and one
geographical segment being the United Kingdom. The Group's brands
meet the aggregation criteria set out in paragraph 22 of IFRS 8
'Operating Segments' and as such the Group reports the business as
one reportable segment.
None of the Group's customers individually contribute over 10%
of the total revenues.
2. Revenue
Year ended Year ended
31 December 31 December
2018 2017
GBP GBP
Income for the year consists of the following:
Revenue from continuing operations 34,331,309 29,581,696
Other income not included within revenue
in the income statement:
Profit from sale of freehold property - 1,266,086
Other income - 6,293
------------------------------------------------ ------------- -------------
Total income for the year 34,331,309 30,854,075
------------------------------------------------ ------------- -------------
3. Group operating loss
Year ended Year ended
31 December 31 December
2018 2017
GBP GBP
This is stated after charging/(crediting):
Operating lease charges
Share-based payments expense/(credit) (see
note 22)
Profit from sale of freehold property 4,051,904 3,417,211
Restaurant opening costs 28,745 (162,620)
Amortisation of intangible assets (see note - (1,266,086)
10) 433,506 509,704
Depreciation of property, plant and equipment 117,778 126,111
(see note 11) 1,379,113 1,395,475
Impairment of assets (see note 11) 259,205 1,825
Exchange gain - (412)
Auditors' remuneration (see note 4) 50,000 50,000
------------------------------------------------ ------------- --------------
For the initial trading period following opening of a new
restaurant, the performance of that restaurant will be lower than
that achieved by other, similar mature restaurants. The difference
in this performance, which is calculated by reference to gross
profit margins amongst other key metrics is quantified and included
within opening costs. The breakdown of opening costs, between
pre-opening costs and certain post-opening costs for 3 months is
shown below:
Year ended Year ended
31 December 31 December
2018 2017
GBP GBP
Pre-opening costs 139,858 179,152
Post-opening costs 293,648 330,552
-------------------- ------------- -------------
433,506 509,704
-------------------- ------------- -------------
4. Auditors' remuneration
Year ended Year ended
31 December 31 December
2018 2017
GBP GBP
Auditors' remuneration:
Fees payable to Company's auditor for the
audit of its annual accounts 15,000 15,000
Other fees to the Company's auditors
The audit of the Company's subsidiaries 20,000 20,000
-------------------------------------------- ------------- ------------------------
Total audit fees 35,000 35,000
-------------------------------------------- ------------- ------------------------
Review of the half-year accounts 15,000 15,000
-------------------------------------------- ------------- ------------------------
Total non-audit fees 15,000 15,000
-------------------------------------------- ------------- ------------------------
Total auditors' remuneration 50,000 50,000
-------------------------------------------- ------------- ------------------------
5. Staff costs and numbers
Year ended Year ended
31 December 31 December
2018 2017
GBP GBP
(a) Staff costs (including directors):
Wages and salaries:
Kitchen, floor and management wages 11,288,001 10,636,242
Apprentice Levy 41,589 27,662
Other costs:
Social security costs 627,336 803,950
Share-based payments (note 22) 28,745 (162,620)
Pension costs 169,974 99,266
---------------------------------------------------- ------------- ---------------
Total staff costs 12,155,645 11,404,500
---------------------------------------------------- ------------- ---------------
(b) Staff numbers (including directors): Number Number
Kitchen and floor staff 591 576
Managements staff 123 87
---------------------------------------------------- ------------- ---------------
Total number of staff 714 663
---------------------------------------------------- ------------- ---------------
(c) Directors' remuneration:
Emoluments 460,238 374,615
Money purchase (and other) pension contributions 4,423 897
Non-Executive directors' fees 43,901 55,000
---------------------------------------------------- ------------- ---------------
Total directors' costs 508,562 430,512
---------------------------------------------------- ------------- ---------------
Directors' remuneration disclosed above include the following amounts
paid to the highest paid director:
Emoluments 187,500 187,308
Money purchase (and other) pension contributions 1,708 448
---------------------------------------------------- ------------- ---------------
Further details on Directors' emoluments and the executive
pension schemes are given in the Directors' report.
6. Finance costs
Year ended Year ended
31 December 31 December
2018 2017
GBP GBP
Interest payable and similar charges:
Interest on finance leases and hire purchase
contracts - 251
Interest on bank loans and overdraft 41,758 60,169
----------------------------------------------- ------------- -------------
Total finance costs for the year 41,758 60,420
----------------------------------------------- ------------- -------------
7. Taxation
The major components of income tax for the years ended 31
December 2018 and 2017 are:
(a) Analysis of charge in the year:
Year ended Year ended
31 December 31 December
2018 2017
GBP GBP
Current tax:
UK corporation tax on the profit/(loss) for
the year 93,543 70,087
Adjustments in respect of previous years (19,370) -
Deferred tax:
Origination and reversal of temporary differences 34,369 (24,498)
Tax losses carried forward (115) 12,157
---------------------------------------------------- ------------- -------------
Total tax charge/(credit) for the year 108,427 57,746
---------------------------------------------------- ------------- -------------
(b) Factors affecting the tax charge for the year:
The tax charged for the year varies from the standard rate of corporation
tax in the UK due to the following factors:
Year ended Year ended
31 December 31 December
2018 2017
GBP GBP
Profit/(loss) on ordinary activities before
tax
Expected tax charge/(credit) based on the
standard rate of corporation tax in the UK (206,879) 456,858
of 19% (2017: 19.25%) (39,307) 87,945
Effects of:
Depreciation on non-qualifying assets
(Income)/expenses not deductible for tax 112,091 (59,958)
purposes 81,187 41,850
Effect of change in corporation tax - (4,114)
Adjustments in respect of previous tax years (19,370) -
Other miscellaneous items - (552)
Losses utilised in the year (26,174) (7,425)
---------------------------------------------------- ------------- -------------
Total tax charge/(credit) for the year 108,427 57,746
---------------------------------------------------- ------------- -------------
8. (Loss)/earnings per share
On 1 January 2017 the company had 96,000,000 shares in issue. On
28 September 2017 the Company raised GBP4 million (before costs)
through the issuance of 26,666,667 new shares by way of a placing
at a price of GBP0.15 per share.
On 4 July 2018 the company granted 4,890,000 approved options to
key employees under a new Company Share Option Plan ("CSOP"). For
further details see note 22.
The basic and diluted (loss)/earnings per share figures, is
based on the weighted average number of shares in issue during the
period.
The basic and diluted (loss)/earnings per share figures are set
out below:
Year ended Year ended
31 December 31 December
2018 2017
GBP GBP
(Loss)/profit attributable
to shareholders (315,306) 399,112
2018 2017
Number Number
Weighted average number
of shares
For basic earnings per
share 122,666,667 102,940,639
Adjustment for options 116,429 -
outstanding
---------------------------- ---------------- ----------------- -----------------
For diluted earnings per
share 122,783,096 102,940,639
---------------------------------------------- ----------------- -----------------
2018 2017
Pence per share Pence per share
(Loss)/earnings per share:
Basic (pence)
From (loss)/profit for
the year (0.26) 0.39
Diluted (pence)
From (loss)/profit for
the year (0.26) 0.39
Diluted (loss)/earnings per share is calculated by dividing the
profit or loss attributable to ordinary shareholders by the
weighted average number of shares and 'in the money' share options
in issue. Share options are classified as 'in the money' if their
exercise price is lower than the average share price for the
period. As required by IAS 33 'Earnings Per Share', this
calculation assumes that the proceeds receivable from the exercise
of 'in the money' options would be used to purchase share options
in the open market in order to reduce the number of new shares that
would need to be issued.
9. Dividends
No dividends were paid or declared in the year ended 31 December
2018 (2017: GBPnil).
10. Intangible assets
Group
Lease premiums Goodwill Total
GBP GBP GBP
Cost
At 1 January 2018 1,075,000 89,961 1,164,961
Additions - - -
---------------------------- ----------------- --------- ------------
At 31 December 2018 1,075,000 89,961 1,164,961
---------------------------- ----------------- --------- ------------
Accumulated amortisation
At 1 January 2018 155,069 - 155,069
Amortised during the year 117,778 - 117,778
Impairments - 2,286 2,286
---------------------------- ----------------- --------- ------------
At 31 December 2018 272,847 2,286 275,133
---------------------------- ----------------- --------- ------------
Net Book Value as at
31 December 2017 919,931 89,961 1,009,892
---------------------------- ----------------- --------- ------------
Net Book Value as at
31 December 2018 802,153 87,675 889,828
---------------------------- ----------------- --------- ------------
Goodwill arising on business combinations is not amortised but
is subject to an impairment test annually which compares the
goodwill's 'value in use' to its carrying value. During the year,
100% of the goodwill allocated to Yalla Yalla Greenwich was
impaired due to the closing of the pop-up store. The remaining
goodwill related to Yalla Yalla Soho and Yalla Yalla Winsley
Street. No impairment of goodwill was considered necessary in
relation to either of these sites.
11. Property, plant and equipment
Group Freehold Leasehold Fixture, Motor
land and Land and Plant fittings Vehicles
buildings buildings and machinery & equipment Total
GBP GBP GBP GBP GBP GBP
Cost
At 1 January 2017 1,562,015 8,385,944 3,973,629 2,139,835 - 16,061,423
Additions - 1,576,517 670,561 510,320 15,120 2,772,518
Disposals (1,562,015) - - - - (1,562,015)
-------------------------- -------------- ------------ --------------- ------------- ---------- --------------
At 31 December 2017 - 9,962,461 4,644,190 2,650,155 15,120 17,271,926
-------------------------- -------------- ------------ --------------- ------------- ---------- --------------
Accumulated depreciation
and impairment
At 1 January 2017
Depreciation during
the year 118,550 2,798,137 1,294,841 734,896 - 4,946,424
Eliminated on disposal 57,274 694,286 480,717 160,174 3,024 1,395,475
Impairment during
the year (175,824) - - - (175,824)
- - 1,457 368 - 1,825
-------------------------- -------------- ------------ --------------- ------------- ---------- --------------
At 31 December 2017 - 3,492,423 1,777,015 895,438 3,024 6,167,900
-------------------------- -------------- ------------ --------------- ------------- ---------- --------------
Cost
At 1 January 2018 - 9,962,461 4,644,190 2,650,155 15,120 17,271,926
Additions - 1,527,866 305,327 445,849 - 2,279,042
Disposals - - - - - -
-------------------------- -------------- ------------ --------------- ------------- ---------- --------------
At 31 December 2018 - 11,490,327 4,949,517 3,096,004 15,120 19,550,968
-------------------------- -------------- ------------ --------------- ------------- ---------- --------------
Accumulated depreciation
and impairment
At 1 January 2018
Depreciation during
the year - 3,492,423 1,777,015 895,438 3,024 6,167,900
Impairment during
the year - 702,274 465,321 209,099 2,419 1,379,113
140,536 15,563 100,820 - 256,919
-------------------------- -------------- ------------ --------------- ------------- ---------- --------------
At 31 December 2018 - 4,335,233 2,257,899 1,205,357 5,443 7,803,932
-------------------------- -------------- ------------ --------------- ------------- ---------- --------------
Net Book Value as
at
31 December 2017 - 6,470,038 2,867,175 1,754,717 12,096 11,104,026
-------------------------- -------------- ------------ --------------- ------------- ---------- --------------
Net Book Value as
at
31 December 2018 - 7,155,094 2,691,618 1,890,647 9,677 11,747,036
-------------------------- -------------- ------------ --------------- ------------- ---------- --------------
Assets held under finance Group
leases
31 December 31 December
2018 2017
GBP GBP
Cost
At 1 January - 315,618
Additions - -
Legal ownership transferred - (315,618)
----------------------------------- ----------- ------------
Cost as at 31 December - -
------------------------------ ------------- ------------
Accumulated depreciation
At 1 January
Depreciation during the
year - 203,608
Impairment during the - -
year - -
Legal ownership transferred - (203,608)
----------------------------------- ----------- ------------
Accumulated depreciation
as at 31 December - -
----------------------------------- ----------- ------------
Net book value at the - -
year end
----------------------------------- ----------- ------------
Legal ownership transferred relates to plant and machinery and
fixtures, fittings and equipment held under finance lease that has
subsequently been purchased outright during the year ended 31
December 2017.
12. Subsidiaries
The subsidiaries of Comptoir Group Plc, all of which have been
included in these consolidated financial statements, are as
follows:
Name Country of Proportion Non-Controlling
incorporation of ownership interests Ownership/voting
and principal interest as interest at 31
place of business at 31 December December
2018 2017 2018 2017
-------------------------------- -------------------- -------- -------- -------------- --------------
Timerest Limited
Chabane Limited*
Comptoir Franchise Limited
Shawa Group Limited*
Shawa Bluewater Limited* England &
Shawa Limited Wales 100% 100% - -
Shawa Rupert Street Limited* England & Wales 100% 100% - -
Comptoir Stratford Limited* England & Wales 100% 100% - -
Comptoir South Ken Limited* England & Wales 100% 100% - -
Comptoir Soho Limited* England & Wales 100% 100% - -
Comptoir Central Production England & Wales 100% 100% - -
Limited* England & Wales 100% 100% - -
Comptoir Westfield London England & Wales 100% 100% - -
Limited* England & Wales 100% 100% - -
Levant Restaurants Group England & Wales 100% 100% - -
Limited* England & Wales 100% 100% - -
Comptoir Chelsea Limited* England & Wales 100% 100% - -
Comptoir Bluewater Limited* England & Wales 100% 100% - -
Comptoir Wigmore Limited* England & Wales 100% 100% - -
Comptoir Kingston Limited* England & Wales 100% 100% - -
Comptoir Broadgate Limited* England & Wales 100% 100% - -
Comptoir Manchester Limited* England & Wales 100% 100% - -
Comptoir Restaurants Limited England & Wales 100% 100% - -
Comptoir Leeds Limited* England & Wales 100% 100% - -
Comptoir Oxford Street England & Wales 100% 100% - -
Limited* England & Wales 100% 100% - -
Comptoir I.P. Limited* England & Wales 100% 100% - -
Comptoir Reading Limited* England & Wales 100% 100% - -
TKCH Limited* England & Wales 100% 100% - -
Comptoir Bath Limited* England & Wales 100% 100% - -
Comptoir Exeter Limited* England & Wales 100% 100% - -
Yalla Yalla Restaurants England & Wales 100% 100% - -
Limited England & Wales 100% 100% - -
Comptoir Haymarket Ltd* England & Wales 100% 100% - -
Comptoir Oxford Limited* England & Wales 100% 100% - -
-------------------------------- -------------------- -------- -------- -------------- --------------
13. Inventories
Group
31 December 31 December
2018 2017
GBP GBP
Finished goods and goods
for resale 706,741 606,652
--------------------------------- ------------ ------------
14. Trade and other receivables
Group
31 December 31 December
2018 2017
GBP GBP
Trade receivables 884,130 699,506
Other receivables 426,163 499,046
Prepayments and accrued
income 1,239,930 1,182,067
----------------------------------------------------------- -------------- ------------
Total trade and other receivables 2,550,223 2,380,619
----------------------------------------------------------- -------------- ------------
15. Trade and other payables
Group
31 December 31 December
2018 2017
GBP GBP
Trade payables 1,864,398 1,729,877
Bank overdraft - 184,362
Accruals 2,753,070 2,234,435
Other taxation and social
security 1,045,439 877,185
Other payables 43,209 27,339
------------------------------------------ ------------ ------------
Total trade and other payables 5,706,116 5,053,198
------------------------------------------ ------------ ------------
16. Borrowings
Group
31 December 31 December
2018 2017
GBP GBP
Bank loans (see below) 743,132 1,376,489
------------------------------ ------------ ------------
Total borrowings 743,132 1,376,489
------------------------------ ------------ ------------
The long-term bank loans are secured by way of fixed charges
over the assets of various Group companies. Some of the bank loans
are secured by a personal guarantee given by A Kitous, director,
amounting to GBP6,925,000. Bank loans of GBP743,132 represent
amounts repayable within one year of GBP427,179 and amounts
totalling GBP315,953 which are repayable in more than one year but
less than five years. All bank loans have a five-year term with
maturity dates of between 2019 and 2020. All loans attract a rate
of interest of 3.25% over the Bank base rate.
17. Provisions for liabilities
Group
31 December 31 December
2018 2017
GBP GBP
Provisions for leasehold property
dilapidations 60,892 48,036
-------------------------------------- --- -------------- ------------
Total provisions 60,892 48,036
------------------------------------------- -------------- ------------
Movements on provisions: GBP GBP
At 1 January 2018 48,036 35,050
Provision in the year 12,856 12,986
(net of releases)
-------------------------------- ---- --- -------------- ------------
Total at 31 December 2018 60,892 48,036
------------------------------------------- -------------- ------------
Provisions for leasehold property dilapidation repairs are
recognised when the Group has a present obligation to carry out
dilapidation repair work on the leasehold premises before the
property is vacated. The amount recognised as a provision is the
best estimate of the costs required to carry out the dilapidations
work and is spread over the expected period of the tenancy.
18. Deferred taxation
Deferred tax assets and liabilities are offset where the Group
or Company has a legally enforceable right to do so. The following
is the analysis of the deferred tax balances (after offset) for
financial reporting purposes:
Group
Liabilities Liabilities Assets Assets
2018 2017 2018 2017
GBP GBP GBP GBP
Accelerated capital allowances 172,380 118,772 - -
Tax losses - - 162,714 148,822
Share-based payments - - 5,462 -
-------------- ------------ ---------- ----------
172,380 118,772 168,176 148,822
-------------- ------------ ---------- ----------
Movements in the year: Group Group
2018 2017
GBP GBP
Net asset/(liability) at 1 January 30,050 17,708
Charge to Statement of Comprehensive Income
(note 7) (34,253) 12,342
----------- ---------
Net (liability)/asset
at year end (4,203) 30,050
----------- ---------
The deferred tax liability set out above is related to
accelerated capital allowances and will reverse over the period
that the fixed assets to which it relates are depreciated.
19. Share capital
Authorised, issued and Number of 1p shares
fully paid
--------------------------------
Year ended 31 Year ended 31
December 2018 December 2017
Brought forward 122,666,667 96,000,000
Issues in the period - 26,666,667
----------------------------- --------------- ---------------
At 31 December 122,666,667 122,666,667
----------------------------- --------------- ---------------
Nominal value
--------------------------------
Year ended 31 Year ended 31
December 2018 December 2017
GBP GBP
1,226,667 960,000
Brought forward - 266,667
Issues in the period
----------------------------- --------------- ---------------
At 31 December 1,226,667 1,226,667
----------------------------- --------------- ---------------
The Company had 96,000,000 ordinary shares of GBP0.01 each in
issue as 1 January 2017. On 28 September 2017 the Company raised
GBP4 million (before costs of GBP148,707) through the issuance of
26,666,667 new shares by way of a placing at a price of GBP0.15 per
share.
20. Other reserves
The other reserves amount of GBP28,745 (2017 - GBP 316,590) in
the balance sheet reflects the credit to equity made in respect of
the charge for share-based payments made through the income
statement and the purchase of shares in the market in order to
satisfy the vesting of existing and future share awards under the
Long-Term Incentive Plan.
21. Retirement benefit schemes
Defined contribution schemes 31 December 31 December
2018 2017
GBP GBP
Charge to profit and loss 169,974 99,266
------------------------------- ------------ ------------
A defined contribution scheme is operated for all qualifying
employees. The assets of the scheme are held separately from those
of the Group in an independently administered fund.
22. Share-based payments scheme
Equity-settled share-based payments
On 4 July 2018, the Group established a Company Share Option
Plan ("CSOP") under which 4,890,000 share options were granted to
key employees. On the same day, the options which had been granted
under the Group's existing EMI share option scheme were
cancelled.
The new CSOP scheme includes all subsidiary companies headed by
Comptoir Group PLC. The exercise price of all of the options is
GBP0.1025 and the term to expiration is 3 years from the date of
grant, being 4 July 2018. All of the options have the same vesting
conditions attached to them.
A share-based payment charge of GBP28,745 was recognised during
the year in relation to the new scheme and this amount is included
within administrative expenses and added back in calculating
adjusted EBITDA. A credit of GBP316,590 was recognised directly in
equity in respect of the cancellation of the old scheme.
Year ended Year ended
31 December 31 December
2018 2017
Average Exercise Average Exercise
price price
No. of shares GBP No. of shares GBP
EMI options
Options outstanding, beginning
of year 1,830,000 0.50 2,770,000 0.50
Granted - - - -
Cancelled (1,830,000) 0.50 (940,000) 0.50
-------------------------------- ---------------- ------------------ ---------------- ------------------
Options outstanding, end
of year - - 1,830,000 0.50
-------------------------------- ---------------- ------------------ ---------------- ------------------
Options exercisable, end
of year - - 1,830,000 0.50
-------------------------------- ---------------- ------------------ ---------------- ------------------
CSOP options
Options outstanding, beginning
of year - - - -
Granted 4,890,000 0.1025 - -
Cancelled - - - -
-------------------------------- ---------------- ------------------ ---------------- ------------------
Options outstanding, end
of year 4,890,000 0.1025 - -
-------------------------------- ---------------- ------------------ ---------------- ------------------
Options exercisable, end - - - -
of year
-------------------------------- ---------------- ------------------ ---------------- ------------------
The Black-Scholes option pricing model is used to estimate the
fair value of options granted under the Group's share-based
compensation plan. The range of assumptions used and the resulting
weighted average fair value of options granted at the date of grant
for the Group were as follows:
On grant date
Risk free rate of return 0.1%
Expected term 3 years
Estimated volatility 51.3%
Expected dividend yield 0%
Weighted average fair value of GBP0.03527
options granted
-------------------------------- --------------
Risk free interest rate
The risk-free interest rate is based on the UK 10-year Gilt
yield.
Expected term
The expected term represents the maximum term that the Group's
share options in relation to employees of the Group are expected to
be outstanding. The expected term is based on expectations using
information available.
Estimated volatility
The estimated volatility is the amount by which the price is
expected to fluctuate during the period. No share options were
granted during the current year, the estimated volatility for the
share options issued in the prior year was determined based on the
standard deviation of share price fluctuations of similar
businesses.
Expected dividends
Comptoir's board of directors may from time to time declare
dividends on its outstanding shares. Any determination to declare
and pay dividends will be made by Comptoir Group PLC's board of
directors and will depend upon the Group's results, earnings,
capital requirements, financial condition, business prospects,
contractual restrictions and other factors deemed relevant by the
board of directors. In the event that a dividend is declared, there
is no assurance with respect to the amount, timing or frequency of
any such dividends. Based on this uncertainty and unknown
frequency, no dividend rate was used in the assumptions to
calculate the share based compensation expense.
23. Reconciliation of (loss)/profit to cash generated from
operations
Year ended 31 Year ended 31
December 2018 December 2017
GBP GBP
(Loss)/profit for the
year
Income tax expense/(credit)
Finance costs
Depreciation (315,306) 399,112
Amortisation of intangible
assets 108,427 57,746
Impairment of assets 41,758 60,420
Share-based payment charge/(credit) 1,379,113 1,395,475
Profit on disposal of 117,778 126,111
property 259,205 1,825
28,745 (162,620)
Movements in working capital - (1,266,086)
Increase in inventories
Increase in trade and
other receivables (100,089) (126,822)
Increase in payables and (169,604) (183,303)
provisions 850,136 1,324,173
--------------------------------------- --------------- ---------------
Cash from operations 2,200,163 1,626,031
--------------------------------------- --------------- ---------------
24. Reconciliation of changes in cash to the movement in net cash/(debt)
Net cash/(debt): Year ended 31 Year ended 31
December 2018 December 2017
GBP GBP
At the beginning of the
year 4,066,490 (1,199,242)
Movements in the year:
Repayment of loan borrowings 675,115 674,207
Hire purchase lease payments - 22,172
Non-cash movements in
the year (41,758) (60,420)
Cash (outflow)/inflow (818,306) 4,629,773
------------------------------------ --------------- ---------------
At the end of the year 3,881,541 4,066,490
------------------------------------ --------------- ---------------
Represented by: At 1 January Cash flow Non- cash At 31 December
2017 movements flow movements 2017
in the year in the year GBP
GBP GBP GBP
Cash and cash equivalents 813,206 4,814,135 - 5,627,341
Overdraft - (184,362) - (184,362)
Bank loans (1,990,527) 674,207 (60,169) (1,376,489)
Hire purchase liabilities (21,921) 22,172 (251) -
---------------------------- ------------- ------------- ---------------- ---------------
(1,199,242) 5,326,152 (60,420) 4,066,490
---------------------------- ------------- ------------- ---------------- ---------------
At 1 January Cash flow Non- cash At 31 December
2018 movements flow movements 2018
in the year in the year GBP
GBP GBP GBP
Cash and cash equivalents 5,627,341 (1,002,668) - 4,624,673
Overdraft (184,362) 184,362 - -
Bank loans (1,376,489) 675,115 (41,758) (743,132)
---------------------------- ------------- ------------- ---------------- ---------------
4,066,490 (143,191) (41,758) 3,881,541
---------------------------- ------------- ------------- ---------------- ---------------
25. Financial instruments
The Group finances its operations through equity and borrowings,
with the borrowing interest typically subject to 3.25% per annum
over base rate.
Management pay rigorous attention to treasury management
requirements and continue to:
-- ensure sufficient committed loan facilities are in place to
support anticipated business requirements;
-- ensure the Group's debt service will be supported by
anticipated cash flows and that covenants will be complied with;
and
-- manage interest rate exposure with a combination of floating
rate debt and interest rate swaps when deemed appropriate.
The Board closely monitors the Group's treasury strategy and the
management of treasury risk. Further details of the Group's capital
risk management can be found in the report of the Directors.
Further details on the business risk factors that are considered
to affect the Group are included in the strategic report and more
specific financial risk management (including sensitivity to
increases in interest rates) are included in the Report of the
Directors. Further details on market and economic risk and headroom
against covenants are included in the Strategic Report.
Financial assets and liabilities
Group financial assets:
31 December 31 December
2018 2017
GBP GBP
Cash and cash equivalents 4,624,672 5,627,341
Trade and other receivables 2,550,223 2,380,619
----------------------------------- ------------ ------------
Total financial assets 7,174,895 8,007,960
----------------------------------- ------------ ------------
Group financial liabilities: 31 December 31 December
2018 2017
GBP GBP
Trade and other payables excl. corporation
tax 5,706,116 5,053,198
Bank loan 427,179 669,778
--------------------------------------------- ------------ ------------
Short -term financial
liabilities 6,133,295 5,722,976
--------------------------------------------- ------------ ------------
Bank loan 315,953 706,711
--------------------------------------------- ------------ ------------
Long-term financial liabilities 315,953 706,711
--------------------------------------------- ------------ ------------
Total financial liabilities 6,449,248 6,429,687
--------------------------------------------- ------------ ------------
*The loans held in the subsidiaries typically have the interest
rate of 3.25% per annum over base rate.
The maturity profile of anticipated gross future cash flows,
including interest, relating to the Group's non-derivative
financial liabilities, on an undiscounted basis, are set out
below:
Trade and Bank
Overdraft other payables Loans
GBP * GBP
GBP
As at 31 December
2018
Within one year - 5,706,116 447,400
Within two to five
years - - 323,048
After five years - - -
Less future interest
payments - - (27,315)
---------------------------- ------------ ----------------- -----------
Total - 5,706,116 743,133
---------------------------- ------------ ----------------- -----------
As at 31 December
2017
Within one year 184,362 5,053,198 709,906
Within two to five
years - - 733,163
After five years - - -
Less future interest
payments - - (66,580)
---------------------------- ------------ ----------------- -----------
Total 184,362 5,053,198 1,376,489
---------------------------- ------------ ----------------- -----------
*excluding corporation tax
Fair value of financial assets and liabilities
All financial assets and liabilities are accounted for at cost
and the Directors consider the carrying value to approximate their
fair value.
26. Financial risk management
The Group's and Company's financial instruments comprise
investments, cash and liquid resources, and various items, such as
trade receivables and trade payables that arise directly from its
operations. The vast majority of the Group's and Company's
financial investments are denominated in sterling.
Neither the Group nor the Company enter into derivatives or
hedging transactions. It is, and has been throughout the period
under review, the Group's and Company's policy that no trading in
financial instruments shall be undertaken.
The main risks arising from the Group's and Company's financial
instruments are credit risk, liquidity risk, foreign currency risk,
interest rate risk and investment risk. The Group does not have a
material exposure to foreign currency risk. The board reviews
policies for managing each of these risks, and they are summarised
as follows:
Credit Risk
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial losses to the
Group. Counterparties for cash balances are with large established
financial institutions. The Group is exposed to credit related
losses in the event of non-performance by the financial
institutions but does not expect them to fail to meet their
obligations.
As a retail business with trading receipts settled either by
cash or credit and debit cards, there is very limited exposure from
customer transactions. The Group is exposed to credit risk in
respect of commercial discounts receivable from suppliers but the
Directors believe adequate provision has been made in respect of
doubtful debts and there are no material amounts past due that have
not been provided against.
The carrying amount of financial assets recorded in the
financial statements, net of any allowances for losses, represents
the Group's maximum exposure to credit risk
Liquidity risk
The Group has built an appropriate mechanism to manage liquidity
risk of the short, medium and long-term funding and liquidity
management requirements. Liquidity risk is managed through the
maintenance of adequate cash reserves and bank facilities by
monitoring forecast and actual cash flows and matching the maturity
profiles of financial assets and liabilities. The Group's loan
facilities (as set out in note 16), ensure continuity of funding,
provided the Group continues to meet its covenant requirements (as
detailed in the report of the Directors).
Foreign currency risk
The Group is not materially exposed to changes in foreign
currency rates and does not use foreign exchange forward
contracts.
Interest rate risk
Exposure to interest rate movements has been controlled
historically through the use of floating rate debt to achieve a
balanced interest rate profile. The Group does not currently have
any interest rate swaps in place as the continued reduction in the
level of debt combined with current market conditions results in a
low level of exposure. The Group's exposure will continue to be
monitored and the use of interest rate swaps may be considered in
the future.
Investment risk
Investment risk includes investing in companies that may not
perform as expected. The Group's investment criteria focus on the
quality of the business and the management team of the target
company, market potential and the ability of the investment to
attain the returns required within the time horizon set for the
investment. Due diligence is undertaken on each investment. The
Group regularly reviews the investments in order to monitor the
level of risk and mitigate exposure where appropriate.
27. Lease commitments
Operating lease commitments
The Group has entered into a number of property leases on
standard commercial terms as lessee. There are no restrictions
imposed by the Group's operating lease arrangements, either in the
current or prior year.
At the reporting date, the total future minimum rentals payable
under non-cancellable operating leases over the remaining lives of
the leases are:
31 December 31 December
2018 2017
GBP GBP
Within one year 3,689,182 3,465,376
Within two and five years 12,604,760 10,839,071
After five years 18,896,986 16,001,475
--------------------------------- ------------ ------------
Total 35,190,928 30,305,922
--------------------------------- ------------ ------------
In November 2017, the Group sold its freehold property and
leased the building back for 15 years on market terms. Under IAS
17, the Group classified the leaseback as an operating lease. As
this was a sale and operating leaseback under IAS 17, at the date
of initial application the Group accounts for the leaseback in the
same way as it accounts for its other operating leases.
28. Contingent liabilities
The Group had no contingent liabilities at 31 December 2018 or
31 December 2017.
29. Capital commitments
The Group had capital commitments of GBP0.6m at 31 December 2018
(2017 - GBP1.5m) in relation to one new site opening and the
re-positioned site in Westfield, West London.
30. Related party transactions
Remuneration in respect of key management personnel, defined as
the Directors for this purpose, is disclosed in note 5. Further
information concerning the Directors' remuneration is provided in
the Directors' remuneration report.
During the year, the Group paid fees to the following related
parties:
Remuneration Expenses Total
P Hanna 23,000 2,944 25,944
M Kitous 25,071 144 25,215
L Kitous 10,562 5,100 15,662
----------- ------------- --------- --------
58,633 8,188 66,821
----------- ------------- --------- --------
During the year, the Group also paid fees of GBP30,000 (2017:
GBP25,000) to Messrs Gerald Edelman, a firm in which director R
Kleiner is a partner, in respect of part of his non-executive
director fees. In addition, the Group paid further amounts
totalling GBP28,740 to Messrs Gerald Edelman, in respect of
accountancy and corporate finance services provided to the
Group.
Mark Carrick, Finance Director, was granted 1,000,000 share
options as part of the new CSOP share scheme on 4(th) July 2018.
The share options have a vesting period of three years from the
grant date and can be exercised at 10.25p.
31. Subsequent events
On 31 March 2019, operations ceased at Shawa Oxford and the
Group exited the lease. This led to an impairment charge of
GBP256,919 being recognised against the assets connected with this
site.
Parent Company accounts (under UK GAAP)
Company balance sheet as at 31 December 2018
31 December 31 December
2018 2017
Notes GBP GBP
Fixed assets
Property, plant and equipment iii 17,983 22,944
Investment property iv - -
Intangible assets v 69,098 80,380
Investments in subsidiaries vi 30,125 317,970
------------------------------- ------------- ------------- -------------
Current assets 117,206 421,294
Debtors vii 16,386,841 14,475,913
Cash and cash equivalents 127,997 1,214,011
---------------------------------------------- ------------- -------------
16,514,838 15,689,924
-------------------------------------------- ------------- -------------
Total assets 16,632,044 16,111,218
---------------------------------------------- ------------- -------------
Liabilities
Current liabilities
Creditors ix (3,360,831) (2,541,691)
(3,360,831) (2,541,691)
-------------------------------------------- ------------- -------------
Provisions for liabilities viii (912) (6,244)
Total liabilities (3,361,743) (2,547,935)
---------------------------------------------- ------------- -------------
Net assets 13,270,301 13,563,283
---------------------------------------------- ------------- -------------
Equity
Share capital x 1,226,667 1,226,667
Share premium x 10,050,313 10,050,313
Other reserves x 28,745 316,590
Retained earnings x 1,964,576 1,969,713
------------------------------- ------------- ------------- -------------
Total equity - attributable
to equity shareholders
of the company 13,270,301 13,563,283
---------------------------------------------- ------------- -------------
The financial statements of Comptoir Group Plc (company
registration number 07741283) were approved by the Board of
Directors and authorised for issue on 8 April 2019 and were signed
on its behalf by:
Chaker Hanna
Chief Executive Director
Company financial statements - under UK GAAP
Accounting policies and basis of preparation
Basis of accounting
The financial statements for the Company have been prepared
under FRS 102 'The Financial Reporting Standard applicable in the
UK and Republic of Ireland' (FRS 102") and the requirements of the
Companies Act 2006. The Group financial statements have been
prepared under IFRS and are shown separately. The Company financial
statements have been prepared under the historical cost convention
in accordance with applicable UK accounting standards and on the
going concern basis.
Going concern
The Board of Directors have, at the time of approving the
financial statements, a reasonable expectation that the Company has
adequate resources to continue in operational existence for the
foreseeable future. Thus the Board continues to adopt the going
concern basis of accounting in preparing the financial
statements.
Dividends
Equity dividends are recognised when they become legally
payable. Interim dividends are recognised when paid. Final equity
dividends are recognised when approved by the shareholders at an
annual general meeting.
Investments in subsidiaries
The consolidated financial statements incorporate the financial
statements of the Company and entities controlled by the Group (its
subsidiaries).
The results of subsidiaries acquired or disposed of during the
year are included in total comprehensive income from the effective
date of acquisition and up to the effective date of disposal, as
appropriate using accounting policies consistent with those of the
parent. All intra-group transactions, balances, income and expenses
are eliminated in full on consolidation.
Investments are valued at cost less any provision for
impairment.
Intangible assets - Goodwill
Goodwill is the difference between amounts paid on the
acquisition of a business and the fair value of the identifiable
assets and liabilities. It is amortised to the income statement
over its economic life, which is estimated to be ten years from the
date of acquisition.
Share-based payment transactions
The share options have been accounted for as an expense in the
Company in which the employees are employed, using a valuation
based on the Black-Scholes model.
An increase in the investment held by the Company in the
subsidiary in which the employees are employed, with a
corresponding increase in equity, is recognised in the accounts of
the Company. Information in respect of the Company's share-based
payment schemes is provided in note 22 to the consolidated
financial statements.
The value is accounted for as a capital contribution in relevant
Group subsidiaries that employ the staff members to whom awards of
share options have been made.
Reserves
The Company's reserves are as follows:
-- Called up share capital represents the nominal value of the shares issued.
-- Share premium represents amounts paid in excess of the nominal value of shares.
-- Other reserves represent share-based payment charges recognised in equity, and;
-- Retained earnings represents cumulative profits or losses,
net of dividends paid and other adjustments.
Investment property
In accordance with FRS 102, property leased to subsidiary
entities is classified as Investment Property. Investment property
is carried at fair value and revaluation surpluses or losses are
recognised in the Statement of Comprehensive Income. Deferred tax
is provided on the gains at the rate expected to apply when the
property is sold.
Company financial statements - under UK GAAP
Notes to the financial statements
i) Profit attributable to members of the holding company
As permitted by section 408 of the Companies Act 2006, a
separate profit and loss account has not been presented for the
holding company. During the year the Company recorded a loss of
GBP38,279. Remuneration of the auditor is borne by a subsidiary
undertaking, Timerest Limited.
ii) Employee costs and numbers
The Company has no employees. All Group employees and Directors'
remuneration are disclosed within the Group's consolidated
financial statements.
iii) Property, plant and equipment
Leasehold Fixture,
Land and Plant fittings
buildings and machinery & equipment Total
GBP GBP GBP GBP
Cost
At 1 January 2018 11,290 26,655 5,555 43,500
Additions - - - -
-------------------------------- ----------- --------------- ------------- ---------
At 31 December 2018 11,290 26,655 5,555 43,500
-------------------------------- ----------- --------------- ------------- ---------
Accumulated depreciation
and impairment
At 1 January 2018
Depreciation during
the year 7,642 11,194 1,720 20,556
2,258 2,319 384 4,961
------------------------------- ----------- --------------- ------------- ---------
At 31 December 2018 9,900 13,513 2,104 25,517
-------------------------------- ----------- --------------- ------------- ---------
Net Book Value as
at
31 December 2017 3,648 15,461 3,835 22,944
-------------------------------- ----------- --------------- ------------- ---------
Net Book Value as
at
31 December 2018 1,390 13,142 3,451 17,983
-------------------------------- ----------- --------------- ------------- ---------
iv) Investment property
GBP
Fair value at 1 January
2017 1,680,136
Additions -
Revaluations -
Disposals (see below) (1,680,136)
----------------------------- --------------
At 31 December 2017 -
----------------------------- --------------
GBP
Fair value at 1 January -
2018 -
Additions -
Revaluations -
Disposals (see below)
-------------------------- ----
At 31 December 2018 -
-------------------------- ----
The property was disposed of in November 2017 and subsequently
leased back. After reviewing facts, it was determined that the
terms of the new agreement more closely met the definition of an
operating lease than a finance lease and therefore the profit from
the sale of freehold property has been fully recognised within the
income statement.
v) Intangible assets
Goodwill Total
GBP
Cost
At 1 January 2018
Additions during the 89,961
year -
------------------------------------ ---------
At 31 December 2018 89,961
------------------------------------ ---------
Accumulated amortisation
and impairment
At 1 January 2018
Amortisation during
the year 9,581
Impairments 8,996
2,286
---------------------------------- ---------
At 31 December 2018 20,863
------------------------------------ ---------
Net Book Value as
at
31 December 2017 80,380
------------------------------------ ---------
Net Book Value as
at
31 December 2018 69,098
------------------------------------ ---------
In accordance with FRS 102, goodwill arising on business
combinations is amortised over the expected life of the asset and
is subject to an impairment review annually if the life of the
assets is indefinite or expected to be greater than 20 years, or
more frequently if events or changes in circumstances indicate that
it might be impaired. Therefore, goodwill arising on acquisition is
monitored to compare the value in use to its carrying value. The
intangible assets reported on the statement of financial position
consists of goodwill arising on the acquisition on 14 December 2016
of the trade and assets of Agushia Limited.
vi) Investments in subsidiary undertakings
Shares Loans and Total
other
GBP
GBP GBP
Cost 316,590
At 31 December 2017 1,380 (316,590) 317,970
Credit on cancellation of existing - 28,745 (316,590)
share scheme
Share-based payment charge on - 28,745
new share scheme
-------------------------------------- ------- ----------- -----------
At 31 December 2018 1,380 28,745 30,125
-------------------------------------- ------- ----------- -----------
Amounts written off
31 December 2017 - - -
31 December 2018 - - -
-------------------------------------- ------- ----------- -----------
Net book value at 31 December
2017 1,380 316,590 317,970
-------------------------------------- ------- ----------- -----------
Net book value at 31 December
2018 1,380 28,745 30,125
-------------------------------------- ------- ----------- -----------
vii) Debtors
Year ended Year ended
31 December 31 December
2018 2017
GBP GBP
Other debtors 286,278 294,610
Amounts receivable from group undertakings 16,099,285 14,328,732
-------------------------------------------------------- ------------- -------------
16,385,563 14,623,342
Amounts falling due after more
than one year:
Deferred tax asset 1,278 1,278
Total 16,386,841 14,624,620
-------------------------------------------------------- ------------- -------------
viii) Deferred tax liabilities
Deferred tax recognised in balance sheet: Total
GBP
Deferred tax liabilities:
Brought forward 6,244
Credit to profit or loss (5,332)
-------------------------------------------- ---- ----------
Total deferred tax liability 912
-------------------------------------------------- ----------
ix) Creditors
Year ended Year ended
31 December 31 December
2018 2017
GBP GBP
Trade creditors - 29,420
Amounts due to group undertakings 3,359,361 2,479,207
Other creditors 1,470 1,470
Corporation tax - 31,594
----------------------------------------------- ------------- -------------
Total 3,360,831 2,541,691
----------------------------------------------- ------------- -------------
x) Share capital and reserves
Retained
Share capital Share premium Other reserves earnings Total
GBP GBP GBP GBP GBP
1,226,667 10,050,313 316,590 1,969,713 13,563,283
At 1 January 2018 - - 28,745 - 28,745
Share-based payment
charge - - (316,590) - (316,590)
Cancellation of Existing
EMI share option scheme
Total comprehensive
loss for the year - - - (5,137) (5,137)
---------------------------- ---------------- -------------- --------------- ----------- ------------
At 31 December 2018 1,226,667 10,050,313 28,745 1,964,576 13,270,301
---------------------------- ---------------- -------------- --------------- ----------- ------------
Details of share issues during the year are given in note 20 of
the consolidated financial statements and details of the dividends
paid and proposed during the year are given in note 9 of the
consolidated financial statements.
xi) Contingent liabilities
The Company had no contingent liabilities at 31 December 2017 or
31 December 2018.
xii) Capital commitments
The Company had capital commitments of GBP0.6m at 31 December
2018 (2017 - GBP1.5m) in relation to one new site opening and the
re-positioned site in Westfield, West London.
xiii) Related party transactions
The Company has taken advantage of the exemption in FRS 102 and
has not disclosed transactions entered into between members of the
Group.
xiv) Ultimate controlling party
The Company has no ultimate controlling party.
xv) Subsequent events
There were no significant subsequent events affecting the Parent
Company which the Directors consider require disclosure within
these financial statements.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR ZVLFBKZFFBBZ
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