TIDMLTW
RNS Number : 6491Z
London Town PLC
25 September 2009
?
London Town plc
("London Town" or "the Company")
Interim Results for the six months ended 28 June 2009
The Board of London Town announces the results of the Company for the six months
ended 28 June 2009 and confirms that its Interim Results are available on its
website, at www.londontownplc.co.uk.
Enquiries:
Nicholas Wells/Max Hartley
Cenkos Securities plc 0207 397 8900
Business Review
Principal activities
The principal activities of London Town plc ("the Company") and its subsidiaries
("the Group") comprise the operation of pubs either under lease and tenancy
agreements or through the direct management of pubs, principally on a temporary
basis, as well as the direct management of certain freehold and leasehold pubs
owned by the Group. The Group's agreements with tenants in the leased estate
comprise both tied and free of tie arrangements and generate income from rents,
sales of beer and other drinks, and through profit share arrangements for income
from leisure machines. The direct management of pubs for other pub owners
generates income from a number of different management fees and profit shares.
The entitlement to revenues and the responsibility for costs varies by
agreement. The direct management of the Group's own freehold and leasehold pubs
generates income directly from beer and other drink sales as well as food sales.
The Group receives all revenues generated by the pubs and is responsible for
costs. At 28 June 2009 the Group operated 407 pubs of which 157 were leased
pubs, 241 were managed pubs and a further 9 were held for sale.
Results for the six months ended 28 June 2009
The consolidated income statement for the six months ended 28 June 2009 is set
out below. Revenues amounted to GBP13.6 million (2008 - GBP13.4 million), this
is relatively unchanged on the previous year but reflects a change in mix of pub
numbers that is now more weighted towards the managed division. EBITDA1 amounted
to GBP1.7 million (2008 - GBP0.7 million) showing an improving trend on the
prior year. After net finance costs of GBP4.0 million, the loss for the period
is GBP2.6 million (2008 - Loss of GBP5.2 million).
The Group balance sheet at 28 June 2009 showed net liabilities of GBP13.2
million as a result of accumulated losses to date in excess of total equity. The
Directors are engaged in discussions with both lenders and shareholders and
exploring all options with a view to securing the long term financing of the
business.
Adjusted EBITDA for the period to 28 June 2009 comprises the following:
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| | | | Unaudited | | Unaudited | | Audited | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| | | Six months | Six months | | Period | |
| | | to | to | | to | |
+---------------------------------------+----+--------------+---------------+---+---------+--+
| | | 28 June | | 30 June | 28 | |
| | | | | | December | |
+---------------------------------------+----+--------------+---+-----------+-------------+--+
| | | | 2009 | | 2008 | | 2008 | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| | | | GBP'000 | | GBP'000 | | GBP'000 | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| Revenue | | | | | | | | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| Leased pubs | | | 4,787 | | 5,277 | | 10,058 | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| Managed pubs | | | 8,773 | | 8,083 | | 15,884 | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| Total revenue | | | 13,560 | | 13,360 | | 25,942 | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| | | | | | | | | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| Gross profit | | | | | | | | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| Leased pubs | | | 2,933 | | 3,120 | | 6,299 | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| Managed pubs | | | 5,355 | | 4,431 | | 8,841 | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| | | | | | | | | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| Total gross profit | | | 8,288 | | 7,551 | | 15,140 | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| | | | | | | | | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| Adjusted operating expenses2 | | | | | | | | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| Leased pubs | | | 591 | | 1,008 | | 2,411 | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| Managed pubs | | | 5,454 | | 4,436 | | 9,315 | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| Unallocated costs | | | 549 | | 1,435 | | 1,900 | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| | | | | | | | | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| Total adjusted operating expenses2 | | | 6,594 | | 6,879 | | 13,626 | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| | | | | | | | | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| Adjusted EBITDA1 | | | | | | | | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| Leased pubs | | | 2,342 | | 2,112 | | 3,888 | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| Managed pubs | | | (99) | | (5) | | (474) | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| Unallocated costs | | | (549) | | (1,435) | | (1,900) | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| | | | | | | | | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| Total adjusted EBITDA1 | | | 1,694 | | 672 | | 1,514 | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
| | | | | | | | | |
+---------------------------------------+----+--+-----------+---+-----------+---+---------+--+
1. Adjusted earnings before interest, tax, depreciation and amortisation and
provisions for impairment and onerous leases, losses on disposal of properties
held for sale and share based payment expense("Adjusted EBITDA")
2.Adjusted operating expenses excluding depreciation and amortisation and
provisions for impairment and
onerous leases, losses on disposal of
properties held for sale and share based payment expenses ("Adjusted
operating expenses")
Adjusted EBITDA for the leased pubs at GBP2.3m (2008: GBP2.1m) reflects a
reduction in operating expenses principally as a result of the transition to
in-house management of this division, reduced closed pub costs and lower bad
debt provision. Rents at GBP1.7m (2008: GBP1.7m) are unchanged on the prior
year. Wet income at GBP2.9m (2008: GBP3.4m) was down 14% reflecting reduced
number of pubs as well as a general industry decline in wet sales. During the
period 18 pubs have moved across to the managed division which has avoided the
immediate closure of these pubs.
Adjusted EBITDA for the managed pubs at a loss of GBP99,000 (2008: GBP5,000)
reflects continuing difficult trading conditions generally across the sector as
well as the inclusion of certain loss-making units where the Group is the lessee
or tenant. A number of these agreements have been assigned during the course of
the year and others have been terminated at the end of the lease or tenancy. The
Group will continue to review all options with regard to these units. This
division also includes an increasing number of pubs managed for other pub owners
with income derived from a number of different arrangements including management
fees and profit shares. In the period since 28 December 2008 a further 120
managed pubs have joined this division of which 102 pubs were under management
for other pub owners. The growth of this third party business is expected to
continue.
Pub assets
Pub numbers:
The movements in pub numbers are as follows:
+-----------+----------+----------+----------+----------+
| | Leased | Managed | Held for | Total |
| | | | sale | |
+-----------+----------+----------+----------+----------+
| | | | | |
+-----------+----------+----------+----------+----------+
| At 28 | 176 | 124 | 14 | 314 |
| December | | | | |
| 2008 | | | | |
+-----------+----------+----------+----------+----------+
| Additions | - | 102 | - | 102 |
+-----------+----------+----------+----------+----------+
| Transfers | - | (3) | (6) | (9) |
+-----------+----------+----------+----------+----------+
| Disposals | (19) | 18 | 1 | - |
| | | | | |
+-----------+----------+----------+----------+----------+
| | | | | |
+-----------+----------+----------+----------+----------+
| | | | | |
+-----------+----------+----------+----------+----------+
| At 28 | 157 | 241 | 9 | 407 |
| June | | | | |
| 2009 | | | | |
+-----------+----------+----------+----------+----------+
Geographic location:
The regional distribution of the pubs at 28 June 2009 was as follows:
+--------------------------+-----------+-----------+-------------+----------+------------+
| Location | Leased | Managed | Properties | Total | Percentage |
| | Estate | Estate | held for | | |
| | | | sale | | |
+--------------------------+-----------+-----------+-------------+----------+------------+
| | | | | | |
+--------------------------+-----------+-----------+-------------+----------+------------+
| Scotland | 1 | 11 | - | 12 | 3% |
+--------------------------+-----------+-----------+-------------+----------+------------+
| North East | 2 | 15 | - | 17 | 4% |
+--------------------------+-----------+-----------+-------------+----------+------------+
| North West | 56 | 33 | 5 | 94 | 23% |
+--------------------------+-----------+-----------+-------------+----------+------------+
| York/Humber | 17 | 60 | 1 | 78 | 19% |
+--------------------------+-----------+-----------+-------------+----------+------------+
| East Midlands | 2 | 15 | - | 17 | 4% |
+--------------------------+-----------+-----------+-------------+----------+------------+
| West Midlands | 31 | 23 | 2 | 56 | 13% |
+--------------------------+-----------+-----------+-------------+----------+------------+
| Wales | 4 | 6 | - | 10 | 3% |
+--------------------------+-----------+-----------+-------------+----------+------------+
| East of England | 3 | 38 | 1 | 42 | 11% |
+--------------------------+-----------+-----------+-------------+----------+------------+
| South East | 11 | 22 | - | 33 | 8% |
+--------------------------+-----------+-----------+-------------+----------+------------+
| South West | 30 | 15 | - | 45 | 11% |
+--------------------------+-----------+-----------+-------------+----------+------------+
| London | 0 | 3 | - | 3 | 1% |
+--------------------------+-----------+-----------+-------------+----------+------------+
| | | | | | |
+--------------------------+-----------+-----------+-------------+----------+------------+
| Total | 157 | 241 | 9 | 407 | 100% |
+--------------------------+-----------+-----------+-------------+----------+------------+
Financing
The Group's pub assets are financed by a combination of bank debt, deep discount
bonds, short term loans and shareholders' equity.
Bank debt at 28 June 2009 amounted to GBP82.2 million (2008 - GBP85.6 million).
At 28 June 2009, 100% (2008 - 99%) of the interest rate risk of this debt was
hedged with derivative financial instruments.
The deep discount bonds amounted to GBP17.9 million at 28 June 2009 (2008 - GBP
16.3 million). The discount rate is 10% per annum which is accrued in the
consolidated income statement and not paid until the bond is redeemed. The Group
has the option to redeem these bonds with discount accrued to date at any time
and without penalty. The bonds are held by the three principal shareholders of
the Group.
The Directors are engaged in ongoing discussions relating to the terms and
covenants on the Group's bank loans. Further details relating to this are
included in notes 1 and 7.
Board and senior management
The following board changes have taken place:
On 18 February 2009 Richard Gundry resigned as Development director of the
Group.
On 30 July 2009 Kailayapillai Ranjan resigned as a Non-executive director of the
Group.
Principal risks and uncertainties
Going concern
During 2008 and 2009 the covenants on the Group's bank loans were breached and
have therefore been reclassified as current, despite their scheduled repayment
date being September 2011. The Directors' expectations are that negotiations
with the bank will be satisfactorily concluded and the facility will be
continued. The Group financial statements have been prepared on a going concern
basis to reflect this.
Economic climate
The current economic recession continues to impact consumers ability to spend
money on leisure activities generally including visiting pubs. However there are
many other factors involved in the ability of individual pubs to attract
customers and the Group continues to work with its managers and tenants to
enhance each pubs trading potential.
Recruitment and retention of managers, lessees and tenants
The recruitment and retention of managers, lessees and tenants continues to be a
principal focus of the Group's management team since this is a key driver for
the overall quality and profitability of the business. The market for good
managers, lessees and tenants is a competitive one and the Group continues to
work closely with current and prospective managers, lessees and tenants to
ensure that the Group offers the right physical and business environment for all
parties to prosper.
Interest rate risk
The Group borrows at a floating rate of interest at a margin above LIBOR and
uses derivative financial instruments principally comprising interest rate caps
and swaps for 100% (2008 - 99%) of its outstanding borrowing to limit the
Group's exposure to increasing interest rates.
Current trading and outlook
The Group continues to trade in line with the Board's expectations in what
remains a challenging market place for the pub industry. Since the 28 June 2009
the number of pubs under management for other pub owners has continued to grow.
The Group will continue to focus on the growth of its managed pubs division as
well as continuing to review further opportunities for business growth possibly
through selective acquisitions where appropriate.
The Group will also benefit from a significantly lower and fixed interest cost
on its bank debt as a result of recent interest rate swap agreements.
Approved by the Board on 25 September 2009.
CONSOLIDATED INCOME STATEMENT
For the six months ended 28 June 2009
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
| | | | Unaudited | | Unaudited | | Audited | |
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
| | | Six months | Six months | | Period | |
| | | to | to | | to | |
+---------------------------------------+-------+-------------+--------------+---+----------+--+
| | | 28 June | | 30 June | 28 | |
| | | | | | December | |
+---------------------------------------+-------+-------------+--+-----------+--------------+--+
| |Notes | | 2009 | | 2008 | | 2008 | |
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
| | | | GBP'000 | | GBP'000 | | GBP'000 | |
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
| | | | | | | | | |
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
| Revenue | 2 | | 13,560 | | 13,360 | | 25,942 | |
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
| Cost of sales | | | (5,272) | | (5,809) | | (10,802) | |
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
| Gross profit | | | 8,288 | | 7,551 | | 15,140 | |
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
| | | | | | | | | |
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
| Operating expenses | | | (6,958) | | (9,569) | | (29,750) | |
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
| Operating profit/(loss) | | | 1,330 | | (2,018) | | (14,610) | |
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
| | | | | | | | | |
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
| Finance income | 3 | | 6 | | 1,276 | | 64 | |
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
| Finance expense | 3 | | (3,983) | | (4,417) | | (10,352) | |
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
| | | | | | | | | |
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
| Loss before tax | | | (2,647) | | (5,159) | | (24,898) | |
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
| | | | | | | | | |
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
| Tax credit | | | - | | - | | 230 | |
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
| | | | | | | | | |
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
| Loss for the period attributable to | | | | | | | | |
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
| Equity holders of the parent company | | | (2,647) | | (5,159) | | (24,668) | |
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
| | | | | | | | | |
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
| Loss per share: | | | | | | | | |
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
| Basic and diluted | 4 | | (9.01p) | | (17.55p) | | (83.96p) | |
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
| | | | | | | | | |
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
| | | | | | | | | |
+---------------------------------------+-------+-+-----------+--+-----------+---+----------+--+
There are no other items of recognised income and expense other than those shown
in the income statement.
CONSOLIDATED BALANCE SHEET
At 28 June 2009
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| Consolidated balance sheet | | | Unaudited | | Unaudited | | Audited | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| | | | 28 June | | 30 June | 28 December | |
+--------------------------------------+-------+--+-----------+---+-----------+--------------+--+
| |Notes | | 2009 | | 2008 | | 2008 | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| Assets | | | GBP'000 | | GBP'000 | | GBP'000 | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| Non-current assets | | | | | | | | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| Property, plant and equipment | 5 | | 93,655 | | 103,500 | | 94,304 | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| Goodwill | | | 2,928 | | 3,228 | | 2,928 | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| Intangible assets | | | 1,450 | | 2,309 | | 1,577 | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| Derivative financial assets | | | 148 | | 1,536 | | 126 | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| | | | 98,181 | | 110,573 | | 98,935 | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| | | | | | | | | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| Current assets | | | | | | | | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| Inventories | | | 437 | | 382 | | 425 | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| Trade and other receivables | | | 2,176 | | 1,872 | | 1,556 | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| Cash and cash equivalents | | | 2,210 | | 1,074 | | 5,011 | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| | | | 4,823 | | 3,328 | | 6,992 | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| | | | | | | | | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| Non-current assets classified as | 6 | | 3,213 | | 8,736 | | 3,185 | |
| held for sale | | | | | | | | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| | | | | | | | | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| Total assets | | | 106,217 | | 122,637 | | 109,112 | |
| | | | | | | | | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| | | | | | | | | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| Liabilities | | | | | | | | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| Current liabilities | | | | | | | | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| Trade and other payables | | | 6,211 | | 5.046 | | 6,769 | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| Corporation tax payable | | | - | | 14 | | - | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| Loans and borrowings | 7 | | 93,055 | | 5,569 | | 93,957 | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| Provisions | | | 541 | | 62 | | 545 | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| | | | 99,807 | | 10,691 | | 101,271 | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| | | | | | | | | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| Non-current liabilities | | | | | | | | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| Derivative financial liabilities | | | 1,641 | | - | | 1,258 | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| Loans and borrowings | 7 | | 17,866 | | 101,826 | | 17,033 | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| Deferred tax liabilities | | | 143 | | 373 | | 143 | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| | | | 19,650 | | 102,199 | | 18,434 | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| | | | | | | | | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| Total liabilities | | | 119,457 | | 112,890 | | 119,705 | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| | | | | | | | | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
| Total net (liabilities)/assets | | | (13,240) | | 9,747 | | (10,593) | |
+--------------------------------------+-------+--+-----------+---+-----------+---+----------+--+
+-------------------------------------+-----+---+----------+--+----------+--+-----------+--+
| Equity | | | | | | | | |
+-------------------------------------+-----+---+----------+--+----------+--+-----------+--+
| Called up share capital | | | 1,469 | | 1,469 | | 1,469 | |
+-------------------------------------+-----+---+----------+--+----------+--+-----------+--+
| Share premium reserve | | | 22,505 | | 22,505 | | 22,505 | |
+-------------------------------------+-----+---+----------+--+----------+--+-----------+--+
| Merger reserve | | | 2,282 | | 2,282 | | 2,282 | |
+-------------------------------------+-----+---+----------+--+----------+--+-----------+--+
| Shares to be issued | | | - | | 875 | | - | |
+-------------------------------------+-----+---+----------+--+----------+--+-----------+--+
| Retained earnings | | | (39,496) | | (17,384) | | (36,849) | |
+-------------------------------------+-----+---+----------+--+----------+--+-----------+--+
| | | | | | | | | |
+-------------------------------------+-----+---+----------+--+----------+--+-----------+--+
| Total equity attributable to equity | | | | | | | | |
| holders | | | | | | | | |
+-------------------------------------+-----+---+----------+--+----------+--+-----------+--+
| of the parent company | | | (13,240) | | 9,747 | | (10,593) | |
+-------------------------------------+-----+---+----------+--+----------+--+-----------+--+
| | | | | | | | | |
+-------------------------------------+-----+---+----------+--+----------+--+-----------+--+
CONSOLIDATED CASH FLOW
For the six months ended 28 June 2009
+---------------------+--------+--------+----+---------+--------+----+---------+--------+----------+--------+--------+--------+
| | | | Unaudited | | Unaudited | | Audited | |
+---------------------+--------+--------+--------------+--------+--------------+--------+----------+--------+
| | | Six months to Six | Six months to | | Period | |
| | | months to | | | to | |
+---------------------+--------+-----------------------+-----------------------+--------+----------+--------+
| | | | 28 | | 30 | 28 December | |
| | | | June | | June | | |
+---------------------+--------+-------------+---------+-------------+---------+-------------------+--------+
| | | | 2009 | | 2008 | | 2008 | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| | | | GBP'000 | | GBP'000 | | GBP'000 | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Operating | | | | | | | | |
| activities | | | | | | | | |
| | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Loss | | | (2,647) | | (5,159) | | (24,668) | |
| for | | | | | | | | |
| the | | | | | | | | |
| period | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Provision | | | | | | | | |
| for loss | | | | | | | | |
| on | | | | | | | | |
| disposal | | | | | | | | |
| of | | | | | | | | |
| properties | | | | | | | | |
| | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| held | | | - | | 2,458 | | 1,469 | |
| for | | | | | | | | |
| sale | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Impairment | | | - | | - | | 12,672 | |
| of | | | | | | | | |
| property, | | | | | | | | |
| plant and | | | | | | | | |
| equipment | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Depreciation | | | 425 | | 307 | | 918 | |
| and | | | | | | | | |
| amortisation | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| (Profit)/loss | | | | | | | | |
| on disposal | | | | | | | | |
| of property, | | | | | | | | |
| plant and | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| equipment | | | (61) | | (75) | | 704 | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Taxation | | | - | | - | | (230) | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Finance | | | (6) | | (1,276) | | (64) | |
| income | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Finance | | | 3,983 | | 4,417 | | 10,352 | |
| expense | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Share | | | - | | - | | 43 | |
| based | | | | | | | | |
| payment | | | | | | | | |
| charge | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Provision | | | - | | - | | 318 | |
| for | | | | | | | | |
| onerous | | | | | | | | |
| leases | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Cash | | | 1,694 | | 672 | | 1,514 | | | |
| inflow | | | | | | | | | | |
| before | | | | | | | | | | |
| changes | | | | | | | | | | |
| in | | | | | | | | | | |
| working | | | | | | | | | | |
| capital | | | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+--------+--------+
| | | | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+--------+--------+
| (Increase)/decrease | | | (274) | | (253) | | 177 | |
| in trade and other | | | | | | | | |
| receivables | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| (Decrease)/increase | | | (377) | | (621) | | 988 | |
| in trade and other | | | | | | | | |
| payables | | | | | | | | |
| | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| (Increase)/decrease | | | (12) | | 192 | | 149 | |
| in inventories | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Cash | | | 1,031 | | (10) | | 2,828 | |
| inflow/(outflow) | | | | | | | | |
| from operating | | | | | | | | |
| activities | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Investing | | | | | | | | |
| activities | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Purchase | | | (709) | | (607) | | (1,266) | |
| of | | | | | | | | |
| property, | | | | | | | | |
| plant and | | | | | | | | |
| equipment | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Purchase | | | - | | (22) | | - | |
| of | | | | | | | | |
| intangible | | | | | | | | |
| assets: | | | | | | | | |
| operating | | | | | | | | |
| leases | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Proceeds | | | | | | | | |
| from | | | | | | | | |
| sale of | | | | | | | | |
| property, | | | | | | | | |
| plant and | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| equipment | | | - - | | 73 | | 68 | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Proceeds | | | | | | | | |
| from | | | | | | | | |
| sale of | | | | | | | | |
| non | | | | | | | | |
| current | | | | | | | | |
| assets | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| classified | | | 1,171 | | 2,368 | | 4,739 | |
| as held | | | | | | | | |
| for sale | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Cash | | | 462 | | 1,812 | | 3,541 | |
| inflow | | | | | | | | |
| from | | | | | | | | |
| investing | | | | | | | | |
| activities | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Financing | | | | | | | | |
| activities | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Proceeds | | | - | | 2,500 | | 7,500 | |
| from | | | | | | | | |
| short | | | | | | | | |
| term | | | | | | | | |
| loan | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Repayment | | | (1,641) | | (2,360) | | (4,785) | |
| of bank | | | | | | | | |
| borrowings | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Interest | | | (2,659) | | (3,387) | | (6,626) | |
| paid | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Interest | | | 6 | | 30 | | 64 | |
| received | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Cash | | | (4,294) | | (3,217) | | (3,847) | |
| (outflow)/ | | | | | | | | |
| inflow | | | | | | | | |
| from | | | | | | | | |
| financing | | | | | | | | |
| activities | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Decrease)/increase | | | | | | | | |
| in cash and cash | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| equivalents | | | (2,801) | | (1,415) | | 2,522 | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Cash | | | 5,011 | | 2,489 | | 2,489 | |
| and | | | | | | | | |
| cash | | | | | | | | |
| equivalents | | | | | | | | |
| at | | | | | | | | |
| beginning | | | | | | | | |
| of period | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Cash | | | 2,210 | | 1,074 | | 5,011 | |
| and | | | | | | | | |
| cash | | | | | | | | |
| equivalents | | | | | | | | |
| at end of | | | | | | | | |
| period | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Cash | | | | | | | | |
| and | | | | | | | | |
| cash | | | | | | | | |
| equivalents | | | | | | | | |
| comprise: | | | | | | | | |
| | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Cash | | | 2,210 | | 1,074 | | 5,011 | |
| at | | | | | | | | |
| bank | | | | | | | | |
| and in | | | | | | | | |
| hand | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Bank | | | - | | - | | - | |
| overdrafts | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| Cash | | | 2,210 | | 1,074 | | 5,011 | |
| and | | | | | | | | |
| cash | | | | | | | | |
| equivalents | | | | | | | | |
| at end of | | | | | | | | |
| period | | | | | | | | |
+---------------------+--------+-------------+---------+-------------+---------+--------+----------+--------+
| | | | | | | | | |
+---------------------+--------+--------+----+---------+--------+----+---------+--------+----------+--------+--------+--------+
NOTES TO THE FINANCIAL STATEMENTS
For the six months ended 28 June 2009
1 Accounting policies
Basis of preparation
These interim financial statements have been prepared using, on a consistent
basis, the accounting policies set out in the Group's Annual Report and
Financial Statements for the period ended 28 December 2008, and which are
expected to apply at 27 December 2009 which is consistent with International
Financial Reporting Standards endorsed for use in the European Union and which
are expected to apply here. These interim financial statements were authorised
for issue by the Board of Directors on 25 September 2009.
In the period ending 27 December 2009, the Group will be adopting IFRS 7
"Financial instruments: disclosures". The impact of the new standard will be to
expand the disclosures provided in the financial statements for the period
ending 27 December 2009 regarding the Group's financial instruments.
These interim financial statements are unaudited. The figures for the period
ended 28 December 2008 have been extracted from the Annual Report and Financial
Statements for the period ended 28 December 2008, which have been reported on by
the Group's auditors and filed with the Registrar of Companies. The report of
the auditors was unqualified but did include an emphasis of matter in relation
to the going concern status of the Group because of its non-compliance with
financial covenants on borrowings of GBP82.2m. The auditors noted that this
resulted in the Group being reliant on its bankers for their continued support
and that although the Directors expected to be able to renegotiate the bank
facility on acceptable terms they had no agreement from the bank.
The financial information in this document does not constitute statutory
accounts within the meaning of section 240 of the Companies Act 1985. The
interim financial statements have neither been audited nor reviewed pursuant to
guidance issued by the Auditing Practices Board.
Going concern
The Group reported in its 28 December 2008 financial statements that its results
have been such that the financial covenants relating to bank loans were breached
during that year and this has continued in the period to 28 June 2009. As a
result of the loan covenant breach, under the terms of the bank loan agreement
the lender is entitled to seek repayment of the loan on demand and therefore the
bank loans have been classified in the balance sheet as a current liability even
though the loan would not otherwise be due for repayment until September 2011.
The Group is in regular discussion with its bankers who, whilst not waiving
their right or ability to seek a remedy for the breach of loan covenants, have
expressed a willingness to enter into negotiations on the Group's banking
facilities such that the loan covenants can be complied with in future periods.
The details of the revised facilities have not yet been discussed with the bank
and therefore the Group is currently reliant on the continued support of its
bankers. It cannot be guaranteed that an acceptable agreement will be reached
but the Directors are confident that a satisfactory agreement will be reached.
The Directors have prepared financial projections for the Group using current
expectations for trading and cash flows. The Directors have also considered the
likelihood of the continued availability of loans from related parties
(GBP10.87m which are due in July 2010) and are exploring all options with a view
to securing the long term financing of the Group. On the basis of these
projections and the expectation that bank facilities will continue to be
available in the same amount, the directors have concluded that the Group is a
going concern and will be able to meet its liabilities as they fall due for at
least the next twelve months. Accordingly these interim financial statements
have been prepared on a going concern basis. These conditions indicate the
existence of a material uncertainty which may cast doubt about the Group's
ability to continue as a going concern. The interim financial statements do not
include the adjustments that would result if the Group was unable to continue as
a going concern.
2 Segment information
The Group operates in two business segments: leased pubs and managed pubs. There
is only one geographic segment as all activities are conducted in the United
Kingdom.
+-----------------------------+---------+----------+-------------+-----------+
| | Six months to 28 June 2009 (Unaudited) |
+-----------------------------+----------------------------------------------+
| | Leased | Managed | Unallocated | Total |
+-----------------------------+---------+----------+-------------+-----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------+---------+----------+-------------+-----------+
| Revenue: | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Rent | 1,699 | - | - | 1,699 |
+-----------------------------+---------+----------+-------------+-----------+
| Sale of beer and other | 2,926 | 7,205 | - | 10,131 |
| drinks | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Sale of food | - | 380 | - | 380 |
+-----------------------------+---------+----------+-------------+-----------+
| Income from accommodation | - | 85 | - | 85 |
+-----------------------------+---------+----------+-------------+-----------+
| Income from leisure | 150 | 228 | - | 378 |
| machines | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Other income | 12 | 875 | - | 887 |
+-----------------------------+---------+----------+-------------+-----------+
| | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Total revenue | 4,787 | 8,773 | - | 13,560 |
+-----------------------------+---------+----------+-------------+-----------+
| Cost of sales | (1,854) | (3,418) | - | (5,272) |
+-----------------------------+---------+----------+-------------+-----------+
| | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Gross profit | 2,933 | 5,355 | - | 8,288 |
+-----------------------------+---------+----------+-------------+-----------+
| | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Operating expenses | (635) | (5,645) | (678) | (6,958) |
+-----------------------------+---------+----------+-------------+-----------+
| | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Segment result | 2,298 | (290) | (678) | 1,330 |
+-----------------------------+---------+----------+-------------+-----------+
| Finance income | - | - | 6 | 6 |
+-----------------------------+---------+----------+-------------+-----------+
| Finance expense | - | - | (3,983) | (3,983) |
+-----------------------------+---------+----------+-------------+-----------+
| | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Loss before taxation | 2,298 | (290) | (4,655) | (2,647) |
+-----------------------------+---------+----------+-------------+-----------+
| | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Taxation | - | - | - | - |
+-----------------------------+---------+----------+-------------+-----------+
| | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Loss for period | 2,298 | (290) | (4,655) | (2,647) |
+-----------------------------+---------+----------+-------------+-----------+
| | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Assets and liabilities | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Total assets | 96,803 | 5,250 | 4,164 | 106,217 |
+-----------------------------+---------+----------+-------------+-----------+
| Total liabilities | (3,056) | (3,287) | (113,114) | (119,457) |
+-----------------------------+---------+----------+-------------+-----------+
| | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Net assets/(liabilities) | 93,747 | 1,963 | (108,950) | (13,240) |
+-----------------------------+---------+----------+-------------+-----------+
| | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Other information | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Capital expenditure | 514 | 113 | 82 | 709 |
+-----------------------------+---------+----------+-------------+-----------+
+-----------------------------+---------+----------+-------------+-----------+
| | Six months to 28 June 2008 (Unaudited) |
+-----------------------------+----------------------------------------------+
| | Leased | Managed | Unallocated | Total |
+-----------------------------+---------+----------+-------------+-----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------+---------+----------+-------------+-----------+
| Revenue: | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Rent | 1,696 | - | - | 1,696 |
+-----------------------------+---------+----------+-------------+-----------+
| Sale of beer and other | 3,412 | 7,234 | - | 10,646 |
| drinks | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Income from leisure | 169 | 250 | - | 419 |
| machines | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Food income | - | 431 | - | 431 |
+-----------------------------+---------+----------+-------------+-----------+
| Accommodation income | - | 168 | - | 168 |
+-----------------------------+---------+----------+-------------+-----------+
| | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Total revenue | 5,277 | 8,083 | - | 13,360 |
+-----------------------------+---------+----------+-------------+-----------+
| Cost of sales | (2,157) | (3,652) | - | (5,809) |
+-----------------------------+---------+----------+-------------+-----------+
| | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Gross profit | 3,120 | 4,431 | - | 7,551 |
+-----------------------------+---------+----------+-------------+-----------+
| | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Operating expenses | (3,418) | (4,716) | (1,435) | (9,569) |
+-----------------------------+---------+----------+-------------+-----------+
| | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Segment result | (298) | (285) | (1,435) | (2,018) |
+-----------------------------+---------+----------+-------------+-----------+
| Finance income | - | - | 1,276 | 1,276 |
+-----------------------------+---------+----------+-------------+-----------+
| Finance expense | - | - | (4,417) | (4,417) |
+-----------------------------+---------+----------+-------------+-----------+
| | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Loss before taxation | (298) | (285) | (4,576) | (5,159) |
+-----------------------------+---------+----------+-------------+-----------+
| | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Taxation | - | - | - | - |
+-----------------------------+---------+----------+-------------+-----------+
| | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Loss for period | (298) | (285) | (4,576) | (5,159) |
+-----------------------------+---------+----------+-------------+-----------+
| | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Assets and liabilities | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Total assets | 111,905 | 4,351 | 6,591 | 122,847 |
+-----------------------------+---------+----------+-------------+-----------+
| Total liabilities | (1,841) | (2,387) | (108,872) | (113,100) |
+-----------------------------+---------+----------+-------------+-----------+
| | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Net assets | 110,064 | 1,964 | (102,281) | 9,747 |
+-----------------------------+---------+----------+-------------+-----------+
| | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Other information | | | | |
+-----------------------------+---------+----------+-------------+-----------+
| Capital expenditure | 277 | 194 | 136 | 607 |
+-----------------------------+---------+----------+-------------+-----------+
+-----------------------------+----------+----------+-------------+-----------+
| | Period to 28 December 2009 (Audited) |
+-----------------------------+-----------------------------------------------+
| | Leased | Managed | Unallocated | Total |
+-----------------------------+----------+----------+-------------+-----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-----------------------------+----------+----------+-------------+-----------+
| Revenue: | | | | |
+-----------------------------+----------+----------+-------------+-----------+
| Rent | 3,335 | - | - | 3,335 |
+-----------------------------+----------+----------+-------------+-----------+
| Sale of beer and other | 6,352 | 14,049 | - | 20,401 |
| drinks | | | | |
+-----------------------------+----------+----------+-------------+-----------+
| Sale of food | - | 836 | - | 836 |
+-----------------------------+----------+----------+-------------+-----------+
| Income from accommodation | - | 267 | - | 267 |
+-----------------------------+----------+----------+-------------+-----------+
| Income from leisure | 371 | 440 | - | 811 |
| machines | | | | |
+-----------------------------+----------+----------+-------------+-----------+
| Other income | - | 292 | - | 292 |
+-----------------------------+----------+----------+-------------+-----------+
| | | | | |
+-----------------------------+----------+----------+-------------+-----------+
| Total revenue | 10,058 | 15,884 | - | 25,942 |
+-----------------------------+----------+----------+-------------+-----------+
| Cost of sales | (3,759) | (7,043) | - | (10,802) |
+-----------------------------+----------+----------+-------------+-----------+
| | | | | |
+-----------------------------+----------+----------+-------------+-----------+
| Gross profit | 6,299 | 8,841 | - | 15,140 |
+-----------------------------+----------+----------+-------------+-----------+
| | | | | |
+-----------------------------+----------+----------+-------------+-----------+
| Operating expenses | (17,605) | (10,153) | (1,992) | (29,750) |
+-----------------------------+----------+----------+-------------+-----------+
| | | | | |
+-----------------------------+----------+----------+-------------+-----------+
| Segment result | (11,306) | (1,312) | (1,992) | (14,610) |
+-----------------------------+----------+----------+-------------+-----------+
| Finance income | - | - | 64 | 64 |
+-----------------------------+----------+----------+-------------+-----------+
| Finance expense | - | - | (10,352) | (10,352) |
+-----------------------------+----------+----------+-------------+-----------+
| | | | | |
+-----------------------------+----------+----------+-------------+-----------+
| Loss before taxation | (11,306) | (1,312) | (12,280) | (24,898) |
+-----------------------------+----------+----------+-------------+-----------+
| | | | | |
+-----------------------------+----------+----------+-------------+-----------+
| Taxation | - | - | 230 | 230 |
+-----------------------------+----------+----------+-------------+-----------+
| | | | | |
+-----------------------------+----------+----------+-------------+-----------+
| Loss for period | (11,306) | (1,312) | (12,050) | (24,668) |
+-----------------------------+----------+----------+-------------+-----------+
| | | | | |
+-----------------------------+----------+----------+-------------+-----------+
| Assets and liabilities | | | | |
+-----------------------------+----------+----------+-------------+-----------+
| Total assets | 98,982 | 3,973 | 6,157 | 109,112 |
+-----------------------------+----------+----------+-------------+-----------+
| Total liabilities | (3,638) | (3,587) | (112,480) | (119,705) |
+-----------------------------+----------+----------+-------------+-----------+
| | | | | |
+-----------------------------+----------+----------+-------------+-----------+
| Net assets/(liabilities) | 95,344 | 386 | (106,323) | (10,593) |
+-----------------------------+----------+----------+-------------+-----------+
| | | | | |
+-----------------------------+----------+----------+-------------+-----------+
| Other information | | | | |
+-----------------------------+----------+----------+-------------+-----------+
| Capital expenditure | 711 | 378 | 177 | 1,266 |
+-----------------------------+----------+----------+-------------+-----------+
| Share based payment charge | 43 | - | - | 43 |
+-----------------------------+----------+----------+-------------+-----------+
+------------------------------------+----------+----------+-------------+----------+
| | Six months to 28 June 2009 (Unaudited) |
+------------------------------------+----------------------------------------------+
| | Leased | Managed |Unallocated | Total |
+------------------------------------+----------+----------+-------------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------+----------+----------+-------------+----------+
| | | | | |
+------------------------------------+----------+----------+-------------+----------+
| Segment result | 2,298 | (290) | (678) | 1,330 |
+------------------------------------+----------+----------+-------------+----------+
| Add back: | | | | |
+------------------------------------+----------+----------+-------------+----------+
| Depreciation and amortisation | 107 | 189 | 129 | 425 |
+------------------------------------+----------+----------+-------------+----------+
| (Profit)/loss on disposal of | | | | |
| property, plant | | | | |
+------------------------------------+----------+----------+-------------+----------+
| and equipment | (63) | (2) | - | 61 |
+------------------------------------+----------+----------+-------------+----------+
| | _______ | _______ | _______ | _______ |
+------------------------------------+----------+----------+-------------+----------+
| | | | | |
+------------------------------------+----------+----------+-------------+----------+
| Adjusted EBITDA | 2,342 | (99) | (549) | 1,694 |
+------------------------------------+----------+----------+-------------+----------+
| | _______ | _______ | _______ | _______ |
+------------------------------------+----------+----------+-------------+----------+
| | | | | |
+------------------------------------+----------+----------+-------------+----------+
+------------------------------------+----------+----------+-------------+----------+
| | Six months to 28 June 2008 (Unaudited) |
+------------------------------------+----------------------------------------------+
| | Leased | Managed |Unallocated | Total |
+------------------------------------+----------+----------+-------------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------+----------+----------+-------------+----------+
| | | | | |
+------------------------------------+----------+----------+-------------+----------+
| Segment result | (298) | (285) | (1,435) | (2,018) |
+------------------------------------+----------+----------+-------------+----------+
| Add back: | | | | |
+------------------------------------+----------+----------+-------------+----------+
| Depreciation and amortisation | 36 | 271 | - | 307 |
+------------------------------------+----------+----------+-------------+----------+
| (Profit)/loss on disposal of | | | | |
| property, plant | | | | |
+------------------------------------+----------+----------+-------------+----------+
| and equipment | (84) | 9 | - | (75) |
+------------------------------------+----------+----------+-------------+----------+
| Provision for loss on disposal of | 2,458 | - | - | 2,458 |
| properties held for sale | | | | |
+------------------------------------+----------+----------+-------------+----------+
| | _______ | _______ | _______ | _______ |
+------------------------------------+----------+----------+-------------+----------+
| | | | | |
+------------------------------------+----------+----------+-------------+----------+
| Adjusted EBITDA | 2,112 | (5) | (1,435) | 672 |
+------------------------------------+----------+----------+-------------+----------+
| | _______ | _______ | _______ | _______ |
+------------------------------------+----------+----------+-------------+----------+
| | | | | |
+------------------------------------+----------+----------+-------------+----------+
+------------------------------------+----------+----------+-------------+----------+
| | Period to 28 December 2009 (Audited) |
+------------------------------------+----------------------------------------------+
| | Leased | Managed |Unallocated | Total |
+------------------------------------+----------+----------+-------------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------------------------+----------+----------+-------------+----------+
| | | | | |
+------------------------------------+----------+----------+-------------+----------+
| Segment result | (11,306) | (1,312) | (1,992) | (14,610) |
+------------------------------------+----------+----------+-------------+----------+
| Add back: | | | | |
+------------------------------------+----------+----------+-------------+----------+
| Share based payment | - | - | 43 | 43 |
+------------------------------------+----------+----------+-------------+----------+
| Depreciation and amortisation | 346 | 523 | 49 | 918 |
+------------------------------------+----------+----------+-------------+----------+
| Impairment of property, plant and | 12,672 | - | - | 12,672 |
| equipment | | | | |
+------------------------------------+----------+----------+-------------+----------+
| (Profit)/loss on disposal of | | | | |
| property, plant | | | | |
+------------------------------------+----------+----------+-------------+----------+
| and equipment | 707 | (3) | - | 704 |
+------------------------------------+----------+----------+-------------+----------+
| Provision for loss on disposal of | 1,469 | - | - | 1,469 |
| properties held for sale | | | | |
+------------------------------------+----------+----------+-------------+----------+
| Provision for onerous leases | - | 318 | - | 318 |
+------------------------------------+----------+----------+-------------+----------+
| | _______ | _______ | _______ | _______ |
+------------------------------------+----------+----------+-------------+----------+
| | | | | |
+------------------------------------+----------+----------+-------------+----------+
| Adjusted EBITDA | 3,888 | (474) | (1,900) | 1,514 |
+------------------------------------+----------+----------+-------------+----------+
| | _______ | _______ | _______ | _______ |
+------------------------------------+----------+----------+-------------+----------+
| | | | | |
+------------------------------------+----------+----------+-------------+----------+
3 Net finance income / (expense)
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
| | | | Unaudited | | Unaudited | | Audited | |
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
| | | | Six | | Six months | | Period to | |
| | | | months to | | to | | | |
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
| | | | 28 June | | 30 June | | 28 | |
| | | | | | | | December | |
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
| | | | 2009 | | 2008 | | 2008 | |
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
| | | | GBP'000 | | GBP'000 | | GBP'000 | |
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
| | | | | | | | | |
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
| Finance income | | | | | | | | |
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
| Interest receivable on bank deposits | | | 6 | | 24 | | 64 | |
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
| Other interest receivable | | | - | | 6 | | - | |
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
| Profit on derivatives used to manage | | | | | | | | |
| fair value interest | | | | | | | | |
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
| rate risk | | | - | | 1,246 | | - | |
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
| | | | 6 | | 1,276 | | 64 | |
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
| | | | | | | | | |
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
| Finance expense | | | | | | | | |
| Interest receivable | | | | | | | | |
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
| Interest payable on bank loans | | | 2,035 | | 3,343 | | 6,583 | |
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
| Amortisation of debt issue costs | | | 107 | | 107 | | 215 | |
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
| Interest payable on short term loans | | | 641 | | 190 | | 567 | |
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
| Discount on deep discount bonds | | | 833 | | 772 | | 1,553 | |
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
| Hire purchase interest | | | 7 | | 5 | | 12 | |
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
| | | | 3,623 | | 4,417 | | 8,930 | |
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
| | | | | | | | | |
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
| Loss on derivatives used to manage fair | | | | | | | | |
| value interest | | | | | | | | |
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
| rate risk | | | 360 | | - | | 1,422 | |
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
| | | | | | | | | |
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
| | | | 3,983 | | 4,417 | | 10,352 | |
+-----------------------------------------+--+--+-----------+--+------------+--+-----------+--+
4 Loss per share
The basic loss per share is calculated in accordance with International
Accounting Standard 33 on the loss for the period of GBP2,647,000 (December 2008
- GBP24,668,000; June 2008 - GBP5,159,000) and 29,383,368 being the weighted
average number of shares in issue. Share options in place during the period are
deemed to be anti-dilutive as the Group has reported a loss for the year.
5 Property, plant and equipment
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | Unaudited | | Unaudited | | Audited | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | 28 June | | 30 June | | 28 | |
| | | | | | | | December | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | 2009 | | 2008 | | 2008 | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | GBP'000 | | GBP'000 | | GBP'000 | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | | | | | | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| Land and buildings | | | 91,726 | | 102,005 | | 92,624 | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| Public house fixtures and fittings | | | 1,708 | | 1,308 | | 1,494 | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| Motor vehicles | | | 57 | | 91 | | 68 | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| Office equipment | | | 164 | | 96 | | 118 | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | 93,655 | | 103,500 | | 94,304 | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
6 Non-current assets classified as held for sale
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | Unaudited | | Unaudited | | Audited | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | 28 June | | 30 June | | 28 | |
| | | | | | | | December | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | 2009 | | 2008 | | 2008 | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | GBP'000 | | GBP'000 | | GBP'000 | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | | | | | | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| Non-current assets classified as held | | | 5,493 | | 16,077 | | 7,360 | |
| for sale | | | | | | | | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| Provision for loss on properties held | | | (2,280) | | (7,341) | | (4,175) | |
| for sale | | | | | | | | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | | | | | | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | 3,213 | | 8,736 | | 3,185 | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
The movement in non-current assets held for sale in the 6 months ended 28 June
2009 represents net transfers from land and buildings of GBP1,134,000 less
disposals in the period of GBP1,106,000.
7Loans and borrowings - current
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | Unaudited | | Unaudited | | Audited | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | 28 June | | 30 June | | 28 | |
| | | | | | | | December | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | 2009 | | 2008 | | 2008 | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | GBP'000 | | GBP'000 | | GBP'000 | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | | | | | | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| Bank loan (secured) | | | 82,186 | | 569 | | 83,710 | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| Unsecured loans | | | 10,869 | | 5,000 | | 10,247 | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | | | | | | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | 93,055 | | 5,569 | | 93,957 | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
The following loans from related parties are included within unsecured loans:-
* GBP2,747,000 from Anne Street Partners Limited inclusive of compounded interest
of GBP247,000 which is repayable with interest at 10%, calculated at quarterly
rests, by 31 July 2010. There is no penalty for early repayment.
* GBP2,750,000 from Burac Trade and Invest Corp inclusive of compounded interest
of GBP250,000 which is repayable with interest at 10%, calculated at quarterly
rests, by 31 July 2010. There is no penalty for early repayment.
* GBP3,804,000 from Burac Trade and Invest Corp inclusive of compounded interest
of GBP264,000 which is repayable with interest at 15%, calculated at quarterly
rests, by 31 July 2010. There is no penalty for early repayment.
* GBP1,568,000 from Robar Limited inclusive of compounded interest of GBP108,000
which is repayable with interest at 15%, calculated at quarterly rests, by 31
July 2010. There is no penalty for early repayment.
The bank loans are secured by a fixed charge over the Group's freehold property
and bear interest at floating rates of three month LIBOR plus 1.65%. The bank
loans are for a 5 year term ending on 26 September 2011. The covenants on the
Group's bank loans were breached during 2008 and this has continued into 2009.
The Group's bank loans have been classified as current, despite their scheduled
repayment date being September 2011, because the breach of loan covenants
enables the bank to seek immediate repayment of the bank loan.
The Directors are engaged in continuing discussions relating to the terms and
covenants of the Group's bank loans and anticipate that new covenants can be
agreed that will reflect the current operations and business structure of the
Group.
7Loans and borrowings - non-current
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | Unaudited | | Unaudited | | Audited | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | 28 June | | 30 June | | 28 | |
| | | | | | | | December | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | 2009 | | 2008 | | 2008 | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | GBP'000 | | GBP'000 | | GBP'000 | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | | | | | | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| Secured bank loans | | | - | | 85,574 | | - | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| Deep discount bonds | | | 17,866 | | 16,252 | | 17,033 | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | | | | | | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
| | | | 17,866 | | 101,826 | | 17,033 | |
+-----------------------------------------+--+--+-----------+--+-----------+--+-----------+--+
The deep discount bonds are secured by a fixed and floating charge over the
assets and liabilities of the Company, subject to the priority of the secured
bank loans. The deep discount bonds are redeemable at the option of the Company
at any time subject to the priority and consent of the bank. The deep discount
bonds accrue discount at 10% per annum on a compound basis. Details of the bonds
issued are summarised below:
+---------------------------+----------------+---------------+------------+
| | | Subscription | Redemption |
+---------------------------+----------------+---------------+------------+
| Issue date | Redemption | price | price |
| | date | | |
+---------------------------+----------------+---------------+------------+
| | | GBP'000 | GBP'000 |
+---------------------------+----------------+---------------+------------+
| | | | |
+---------------------------+----------------+---------------+------------+
| 20 December 2006 | 20 December | 14,030 | 22,597 |
| | 2011 | | |
+---------------------------+----------------+---------------+------------+
| | | _______ | _______ |
+---------------------------+----------------+---------------+------------+
| | | | |
+---------------------------+----------------+---------------+------------+
| | | | |
+---------------------------+----------------+---------------+------------+
8 Dividends
The directors do not propose to pay an interim dividend.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LIMPTMMMTBIL
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