TIDMVARE
RNS Number : 2179R
Various Eateries PLC
28 February 2023
VARIOUS EATERIES PLC
("Various Eateries" or "the Company"
and with its subsidiaries "the Group")
Final Results
52-week period ending 2 October 2022
Good strategic progress and continued commercial resilience
Various Eateries PLC, the owner, developer and operator of all
day club, restaurant and hotel sites in the United Kingdom,
announces its results for the 52 weeks ended 2 October 2022.
Financials
-- Revenue growth of 82% to GBP40.7m (2021: GBP22.3m)
-- Adjusted EBITDA* growth of 193% to GBP3.5m (2021: GBP1.2m)
-- Total loss before tax of GBP7.2m (2021: loss of GBP3.7m)
-- Cash at bank of GBP9.4m (2021: GBP19.7m)
-- Net debt of GBP3.3m (2021: net cash of GBP7.3m)
*see Financial Review
Highlights
-- Positive trading performance against a challenging backdrop
-- Coppa Club estate grew 1% LFL in H2 (a period of relatively normal trading) compared with
2019 (the most recent year with uninterrupted comparable trading)
-- Encouraging Tavolino performance (meaningful comparisons not yet available following July
2020 opening)
-- Sales of first Noci in Islington surpassed management expectations since March 2022 opening
-- Continued steady delivery against growth strategy
-- Opening of four new venues: Coppa Club Putney, Coppa Club Haslemere, Coppa Club Bath and Noci
Islington (2021: two new venues)
-- Coppa Club Cardiff, Coppa Club Guildford, Coppa Club Farnham and Noci Battersea Power Station
due to open in 2023
-- Appointment of Lyndsay Anderson as Marketing Director and, post-period, Sharon Badalek announced
as new CFO (starting 1 April 2023)
-- Ongoing mitigation of the inflationary environment
-- Energy costs hedged materially from a volume perspective through to summer 2025
-- Steps taken to manage margin pressures including comprehensive menu re-engineering exercise
at period end
-- Confident of delivering another year of continued progress in FY 2023
-- Uncertain outlook for inflationary pressures and ongoing threat of negative impact of train
strikes
-- Growing pipeline of high-quality sites; intention to pursue expansion plans at a measured
pace
-- Diverse mix of brands aligned to modern consumer needs and chosen pricing points leave us
well-positioned to navigate a recessionary environment
Andy Bassadone, Executive Chairman of Various Eateries,
said:
"To have made the progress we have despite the widespread
challenges we and many others in the sector have faced is testament
to the hard work of our teams and the enduring appeal of our
brands, even in times of economic uncertainty.
"There continues to be a complex picture of industry-wide
pressures that make it difficult to predict exactly how the coming
months will unfold. Nonetheless, we remain focused on executing our
strategy, and are confident that we will emerge strongly once
conditions improve."
Annual General Meeting and Posting of Results
The Company confirms that it intends to dispatch its Annual
Report and Accounts and notice of Annual General Meeting to
shareholders later this week. A further announcement will be made
at that time. A copy of the annual report and accounts will also be
available from the Company's website later this week (
www.variouseateries.co.uk ).
Enquiries
Various Eateries plc Via Alma PR
Andy Bassadone Executive Chairman
Yishay Malkov Chief Executive Officer
James Darwent Interim Chief Financial Officer
WH Ireland Limited Sole Broker and NOMAD Tel: +44 (0)20 7220 1666
Broking
Harry Ansell
Nominated Adviser
Katy Mitchell
Megan Liddell
Alma PR Financial PR Tel: +44 (0)20 3405 0205
David Ison variouseateries@almapr.co.uk
Pippa Crabtree
About Various Eateries
Various Eateries owns, develops and operates restaurant,
clubhouse and hotel sites in the United Kingdom. The Group's stated
mission is "great people delivering unique experiences through
continuous innovation".
The Group is led by a highly experienced senior team including
Andy Bassadone (Executive Chairman), Hugh Osmond (Founder), Yishay
Malkov (CEO) and Matt Fanthorpe (Chef Director, a non-board
position).
The Group operates three core brands across 15 locations:
-- Coppa Club, a multi-use, all day concept that combines restaurant, terrace, café, lounge,
bar and work spaces
-- Tavolino, a restaurant aiming to address a gap in the market for high-quality Italian food
at mid-market prices
-- Noci, a modern, neighbourhood pasta-only concept which serves very high-quality dishes at
reasonable prices
For more information visit www.variouseateries.co.uk
CHAIRMAN'S AND CHIEF EXECUTIVE'S STATEMENT
The 52 weeks ending 2 October 2022 was another period of good
strategic progress and commercial resilience against a backdrop
characterised by industry-wide challenges.
As previously announced, sales were slightly ahead of market
expectations, demonstrating the lasting appeal of our proposition
despite the well-publicised headwinds. While profitability was
impacted by our decision to resist passing price increases onto
customers in full until there was more certainty around the
trajectory of inflation, post-period end, we have taken action to
enhance margins.
We were delighted to open four new venues in the year - our
busiest in terms of site acquisition yet - including our first Noci
restaurant in Islington, which has been a success.
Looking ahead, while macroeconomic uncertainty is set to persist
in the short term, we believe Various Eateries continues to be in a
favourable position, relative to many. It is our view that we have
three strong brands aligned with modern consumer trends that are
set to endure for many years to come, a proven rollout strategy
with enough flexibility to ensure we keep moving forward, and a
motivated leadership team with complementary skills and experience
to deliver it.
There will no doubt be challenges to overcome in FY23, but we
are well-prepared and confident of another year of steady,
continued progress.
Ambition to create a significant player in UK leisure
Various Eateries is a modern, high-quality hospitality group
that is focused on creating concepts with a solid
value-proposition. The Group has several different but
complementary brands that are aligned to the needs of the modern
consumer, from single-product venues like Noci, that speak to the
consumers' desire for high-quality, artisan products delivered at
an excellent price, to the Coppa Club concept, with its all-day
ethos; that meets consumers' needs for a flexible out-of-home space
to work and socialise from. This variety of offer was consciously
designed to ensure resilience during difficult economic
conditions.
Various Eateries has a highly experienced management team, that
over several decades have together and independently played leading
roles in building some of the most successful brands in UK
hospitality. We have seen market conditions at both ends of the
spectrum and everything in between and, as a result, are well
versed in not only navigating adversity but recognising
opportunities within it.
Various Eateries was conceived as one such opportunity. Although
recent years have been characterised by continued uncertainty, and
the timings and severity of challenges have at times been difficult
to predict, the overall direction of travel of the industry remains
the same, and our confidence in and enthusiasm for our strategy is
as high as it has ever been.
In Coppa Club, we have a multi-use, all-day concept that
combines restaurant, terrace, café, lounge, bar and remote-working
spaces under one roof. We operate several formats but are extremely
selective in the sites we take. As a result, we have developed a
highly desirable estate of prime locations designed to capture the
growing demand for this kind of offering and, as an operator with
long-term growth ambitions, will continue in a similar vein.
Tavolino addresses the gap in the market for high-quality
Italian food at mid-market prices. Located on the river by London
Bridge, with year-on-year sales growth, the restaurant has shown
real promise and we continue to harbour plans to open new sites
when conditions are right.
The first restaurant of our newest brand, Noci, opened in
Islington, London, in March 2022. Noci, a modern, neighbourhood
pasta restaurant, has been received positively in the local
community and beyond and we are excited by the brand's potential.
Although early in its existence, we are confident it will go on to
form an important part of the Group.
While the pace of the rollout of our brands has been impacted by
Covid and the elevated industry-wide cost pressures that have
materialised subsequently, the rate at which we open new sites will
continue to be dictated by the number of opportunities we see that
meet our strict criteria rather than the need to grow at a
particular rate.
Solid trading performance
Prior year performance comparisons remain difficult given the
extended periods of Covid-related restrictions between March 2020
and January 2022. However, for the last six months of the financial
year (4 April to 2 October 2022), a period of relatively normal
trading, the Coppa estate achieved an LFL growth of 1% compared
with 2019 (2019 being the most recent year with uninterrupted
comparable trading).
New sites opened in the year have, overall, performed
encouragingly under the circumstances. The performance of our
Townhouse Coppa Club in central Bath since opening in August 2022
has been particularly noteworthy, attracting city centre workers
and residents through the day and night. In 2023, the Cardiff,
Farnham and Guildford sites will take similar formats, and enjoy
similarly healthy footfall, giving us a high degree of confidence
in their prospects.
Our hotels delivered a steady performance with high occupancy
and room rates. Against an exceptional prior year that benefitted
from high levels of pent-up demand post Covid and the rise in
popularity of the 'staycation', we are pleased with their
contribution.
The performance of Tavolino has also been in line with
expectation, with central London footfall increasing as workers
returned to the office. Opening in July 2020, meaningful
performance comparisons are particularly difficult given there have
been no reporting periods of uninterrupted trading. Nonetheless, we
have been satisfied with the steady improvement we have seen over
time and remain optimistic about the brand's prospects.
Since opening in March, Noci has surpassed expectations both in
terms of performance and profile across the capital.
Given challenges such as the impact of the Covid escalation on
our ability to trade and consumer sentiment in the winter, the
cost-of-living crisis in the months since and ongoing train
strikes, the Board believes the trading performance in the year to
be a positive result.
Ongoing mitigation of industry-wide challenges
We had considerable success in mitigating many of the
well-publicised challenges affecting the industry during the
year.
While we are not completely immune to energy price rises, we
have taken steps to hedge ourselves materially from a volume
perspective, which we expect to protect us for at least the next 18
months.
At the end of the period, and moving into the new financial
year, we carried out a comprehensive menu re-engineering exercise
across the Group. The exercise comprised both food and beverage,
enhancing margins with only modest price increases and without
sacrificing quality.
Continued delivery of our expansion strategy
During the period, we opened four new venues: Coppa Clubs in
Putney, Haslemere and Bath as well as the Group's first Noci in
Islington, taking the total number of sites in the group to 15.
In November 2021, Coppa Club Putney opened on the River Thames,
benefitting from a wraparound terrace looking onto the water. This
generous all-day space has been cleverly designed with different
corners for work, socialising and private dining.
In May 2022, Coppa Club Haslemere opened and brought fresh
energy and design to an old hotel property. A destination venue,
this site benefits from overnight stays, private dining, work and
socialising spaces and indoor and outdoor eating and drinking.
August 2022 saw the opening of Coppa Club Bath, the first of the
Townhouse venues. The Townhouse concept allows Coppa Club to
capitalise on former retail sites and create multi-floor venues
that are buzzy from day-to-night; these generous spaces offer both
informal and destination-led eating and drinking under one roof.
The Bath Townhouse, located on Old Bond Street in the centre of the
city's shopping district, was an innovative redesign of a former
Gap site. Busy from early to late, locals and tourists visit the
venue for morning coffees through to late night dinner and
drinks.
In March 2022, we opened the first Noci site overlooking
Islington Green, a perennially popular neighbourhood. A fresh pasta
and relaxed cocktail concept, the Noci site quickly settled into
its first location and became known for its quality and atmosphere,
the site has performed strongly since opening.
We remain on track to open Coppa Club sites in Cardiff,
Guildford and Farnham in 2023. A second site for Noci will also
open during the year at the iconic Battersea Power Station.
Coppa Club Guildford will be the second of the Townhouse variety
of Coppa Clubs. A three-storey, all-day venue on the busy High
Street, it will boast cafe-work space on the ground floor and a
bold mural leading the guests' eye up the stairwell to the
first-floor dining space and destinational bar on the top
floor.
Coppa Club Farnham opens in Brightwells Yard, a buzzy new
neighbourhood in central Farnham. Benefitting from a generous
outdoor terrace, this will be a unique, all-day offering for locals
in a Grade II Listed building.
Coppa Club Cardiff opens in the Welsh capital's prime shopping
district. With a prominent cafe-bar space on the ground floor and a
cosy outdoor terrace, guests will then journey up the first floor
to the centrepiece bar, private dining room and flexible spaces for
eating, drinking, and socialising.
Building on the popularity of the original Islington Green site,
the newest Noci will have the same laid- back, friendly vibe of the
original, set in the iconic Battersea Power Station. Benefitting
from both a strong corporate and tourist market on its doorstep,
the latest Noci site will maintain a focus on artisan pasta and
cocktails on tap to ensure we can deliver a high-quality product,
at high-volume.
While there is an increasing number of good sites available on
increasingly advantageous terms, build costs have increased
significantly and the economic picture remains uncertain. We will
therefore continue to exercise caution in our expansion plans as we
move through the new financial year, only proceeding with
prospective sites that meet our strict criteria for long-term,
sustainable success.
The backbone of our business: our people
Our venue and head office teams once again demonstrated an
exceptional commitment to providing outstanding customer service
and memorable experiences for customers. It was another year of
testing circumstances caused by challenging market conditions,
but our colleagues rose to the challenge. On behalf of the Board,
we would like to thank all our colleagues across the Group.
During the period, we continued to recruit and train large
numbers of often young and inexperienced staff. While one of the
biggest cost increases in the year, we continue to believe it to be
the right strategy to ensure we maintain our opening hours, that
our service remains to the high standards we expect, and to equip
people with skills that will benefit them and society for life.
Alongside significant investment in our venue teams, our senior
team has gone from strength to strength. In August 2022 we
appointed Lyndsay Anderson as Marketing Director. In the months
Lyndsay has been at the business, she has been instrumental in
taking our brand and marketing strategies to the next level and
asserted herself as a pivotal member of the senior leadership
team.
Post period end, on 9 February 2023, we announced the
appointment of Sharon Badelek as Chief Financial Officer and board
member with effect from 1 April 2023. Sharon has an established
track record of driving growth in businesses in our sector, with an
impressive CV that includes senior financial positions at RedCat
Pub Company, Vue Entertainment and Novus Leisure Limited. To have
attracted someone of Sharon's calibre demonstrates the strength of
our proposition and ambition and we look forward to benefitting
from her counsel.
Sharon replaces Oliver Williams, who left the Company on 11
November 2022. Oliver joined Various Eateries in 2018 and in the
years since played an integral role in the Company's successful
listing on AIM and was instrumental in navigating the pandemic
while strengthening the finance function of the business. We are
thankful for his contribution and wish him well.
James Darwent is currently interim CFO and will remain with the
Group and on the Board until Sharon's appointment in April
2023.
Market conditions present opportunity
In January 2023, in its coverage of the restructuring of a
well-known restaurant group, the BBC provided the results of its
analysis of corporate insolvency notices, finding that 320
businesses in the food service industry in the UK - restaurants,
pubs, cafés and catering firms - were forced to initiate insolvency
procedures in December 2022. This, according to the BBC, was an
increase of 41% compared to the same month in 2019, before the
pandemic. In total, the BBC said, 6,613 hospitality firms in the UK
have started insolvency proceedings since 2020.
Issue 37 of the AlixPartners/CGA HospitalityMarketMonitor
included some stark statistics regarding closures in the UK in the
fourth quarter of calendar year 2022, with a net decline of 1,611
licensed premises. The report states: This represents a 1.6%
contraction between September and December and is equivalent to
nearly 18 closures every day. It means the sector saw a net decline
of more than 4,800 premises, or 4.5% of its total, across the whole
of 2022. More than three quarters of these closures - 3,841
premises - occurred in the second half of the year as business
pressures intensified. This is an even worse performance than in
2021, when the COVID-19 pandemic was wrecking trade.
As we have maintained since IPO in September 2020, while it is
sad to see our industry peers fall by the wayside, the increasing
number of high-quality sites becoming available at extremely
attractive rates presents us with a growing opportunity.
Our three new publicly confirmed Coppa Club venues are a good
illustration of this. It is very unlikely they would have become
available had it not been for the pandemic, and certainly not with
the lease terms and at the rates we have been able to secure them
on. Similarly, we are seeing an influx of fully fitted restaurants
coming to the market that fit the criteria for Noci at no premium,
giving us excellent strategic flexibility over the rollout.
As hospitality businesses struggle to contend with food and
utility costs, we are observing that consumers are reducing
spending in response to the cost-of-living crisis, and with the
knowledge government support won't last forever, it is hard to
imagine a future where things don't get worse before they get
better. It is an unfortunate outlook for many, but an inevitable
one, and we believe we are ideally positioned to take on the best
of those empty sites and bring them back into the community as
thriving all-day hubs and restaurants.
Regarding reduced consumer spending, while obviously not immune
to economic downturn, we expect the Group to be a beneficiary of
the emerging premiumisation trend. As disposable income reduces, we
are seeing more and more people choosing quality over quantity and
memorable experiences over the everyday. Our brands and venues,
engineered around first-class food and destination venues at
affordable prices, should continue to prove a popular choice.
Current trading and outlook
Sales in the first quarter of FY23 were in line with management
expectations.
As we move through the second quarter, it remains difficult to
predict with any certainty how this financial year will pan out. A
mixed picture in October and November followed by a strong festive
period didn't offer a great deal in terms of themes and patterns,
and it is still too early to draw any meaningful conclusions.
Beyond Various Eateries, there doesn't yet seem to be any real
consensus in the industry about what to expect, with opinion
divided as to whether inflation and interest rates will continue to
rise, or whether the solid Christmas many retail businesses enjoyed
represented something of a turning point.
One thing that is certain is the negative impact of the ongoing
train strikes on trading, particularly at our London sites. We saw
evidence of this during the year under review and post-period end,
and expect them to be detrimental as long as they continue.
We shouldn't let the current economic climate and prospect of
further train strikes overshadow the progress we continue to make,
and the potential of the Group. Our focus for FY23 will be on
continued delivery of our strategy. Regardless of what happens to
inflation and demand in the short-term, we are building the Group
for the long-term, and will continue to make decisions, and take
actions we believe will ensure sustainable, profitable growth and
value creation for shareholders long into the future.
FINANCIAL REVIEW
Overview
The financial results for FY22 benefitted from all sites being
open to trade throughout the year compared to periods of closure in
the preceding two years due to the impact of Covid-19 restrictions,
albeit trade was impacted in December 2021 through to early 2022
from the Government's advice to stay at home.
The KPI's of the Group's performance are summarised in the table
below:
52 weeks 53 weeks
ended ended
2 October 3 October
2022 2021 Change
GBP 000 GBP 000 %
Revenue 40,667 22,348 82%
------------------------------------ ----------- ----------- -------
Adjusted EBITDA (before impact
of IFRS 16)* 437 (1,178) 137%
Adjusted EBITDA* 3,531 1,204 193%
Operating Loss (5,209) (2,098) 148%
Total loss for the year after
tax (7,215) (3,740) 93%
Basic and diluted earnings
per share (pence) (8.8) (4.6) 93%
Cashflow from operating activities 1,861 3,292 (43)%
Net debt/ (cash) excluding
lease liabilities 3,317 (7,278) 146%
------------------------------------ ----------- ----------- -------
Number of sites 15 12 25%
------------------------------------ ----------- ----------- -------
* not audited
Summary of financial performance for the 52 weeks ended 2
October 2022
52 weeks 53 weeks
ended ended
2 October 3 October
2022 2021
GBP 000 GBP 000
Reconciliation of loss before tax
to Adjusted EBITDA
------------------------------------------- ----------- -----------
Revenue 40,667 22,348
------------------------------------------- ----------- -----------
Loss before tax (7,215) (3,740)
Impairment 2,543 610
Net financing costs 2,006 1,642
Depreciation and amortisation 4,702 3,971
Insurance claim - (2,500)
Loss on disposal of property, plant
and equipment 54 335
Authorised Guarantee Agreements provision - (104)
------------------------------------------- ----------- -----------
EBITDA 2,090 214
------------------------------------------- ----------- -----------
Pre-opening costs 755 295
Share-based payments 830 844
Non-trading site costs (144) (149)
------------------------------------------- ----------- -----------
Adjusted EBITDA* 3,531 1,204
------------------------------------------- ----------- -----------
Adjustment for rent expense (3,094) (2,382)
Adjusted EBITDA (before impact of IFRS
16)* 437 (1,178)
------------------------------------------- ----------- -----------
* not audited
FINANCIAL PERFORMANCE
Overall Group revenue increased by 82% (FY22: GBP40.7m, FY21:
GBP22.3m), resulting in an increase in adjusted EBITDA of GBP2.3m,
from GBP1.2m in FY21 to GBP3.5m in FY22. The Group benefitted from
all sites being able to trade throughout the period compared to
FY21 in which there were significant restrictions to trade at
various times during the year.
The loss before tax has increased from GBP3.7m in FY21 to
GBP7.2m in FY22. In FY21 the Group benefitted from insurance claim
proceeds in the amount of GBP2.5m that related to the original
Covid-19 restrictions in FY20. In FY22 the Group incurred
impairments to goodwill and right-of-use assets of GBP2.5m (FY21:
GBP0.6m). Furthermore, the Group's depreciation charge has
increased by GBP0.7m (from GBP4.0m in FY21 to GBP4.7m in FY22) and
pre-opening costs have increased by GBP0.5m (from GBP0.3m in FY21
to GBP0.8m in FY22), as we have continued to invest in new
sites.
Like for like sales performance (v calendar year 2019)
Oct 21 Dec 21 to Feb 22 to Apr 22 to
to Nov 21 Jan 22 Mar 22 Sep 22
----------- ---------- ---------- ----------
London (3 sites)* 8% -19% -3% 0%
Regional (5 sites)* 18% -7% 2% 7%
Total (8 sites)* 12% -14% -1% 3%
*not audited
Prior year comparisons remain difficult due to the impact of
Covid-19 related restrictions during FY21. In addition the period
from December 2021 to January 2022 was impacted by the Government's
advice to stay at home.
The Government's advice to stay at home in December 2021 had a
significant impact on all sites, particularly our three sites in
London which would traditionally benefit from significant Christmas
trade. From April 2022 onwards, a period of relatively normal
trading, our five regional sites benefitted from a 7% uplift in
like-for-like sales and this contributed to an overall growth of 3%
for the eight sites in that period. Trading in London saw a slower
recovery as tourism and office-based working had not yet recovered
to their pre-pandemic levels.
FINANCING COSTS
Financing costs of GBP2.0m (2021: GBP1.6m) have increased by
GBP0.4m in the year. This arises from increases in lease liability
interest as we have invested in new sites, together with slight
increases in costs on the renewal of the deep discounted bonds.
52 weeks 53 weeks
ended 2 ended 3
October October
2022 2021
GBP 000 GBP 000
----------------------------------- --------- ---------
Financing costs on bank overdraft
and borrowings 662 537
Lease liability interest 1,344 1,108
--------- ---------
Financing costs 2,006 1,645
IMPAIRMENTS
A detailed review of each individual site has resulted an
impairment charge of GBP1.6m against goodwill (2021: nil), and of
GBP1.0m (2021: GBP0.6m) against right-of-use assets. Detail of the
methodology is included in notes 13 and 14.
DIVIDS
The Directors do not recommend the payment of a dividend,
believing it more beneficial to use cash resources to invest in the
Group in line with our strategy.
CASHFLOW AND BALANCE SHEET
Net cashflow from operations declined from GBP3.3m in FY21 to
GBP1.9m in FY22. In FY21 the Group benefitted from GBP2.5m relating
to its Covid-19 Business Interruption claim and therefore the
underlying improvement in net cashflow from operations was
GBP1.1m.
During the period the Group invested GBP8.9m (2021: GBP5.1m) in
capital expenditure in support of future growth. New Coppa Club
sites were opened in Putney, Haslemere and Bath, and our first Noci
was opened in Islington. Furthermore some light refurbishment was
undertaken across other locations.
As a result of the investment undertaken during the year the
Group ended the period with cash at bank of GBP9.4m (2021:
GBP19.7m).
KEY PERFORMANCE INDICATORS ("KPIS")
The Group's indicators of performance are reviewed on a monthly
and annual basis. However with the prior period severely impacted
by the conditions faced by the Group arising from the Covid-19
pandemic, the total loss and EPS figures are hard to assess in
comparison to the prior year.
Consolidated Statement of Comprehensive Income
For the 52 weeks ended 2 October 2022
52 weeks 53 weeks
ended ended
2 October 3 October
2022 2021
Note GBP 000 GBP 000
Revenue 4 40,667 22,348
Cost of sales (36,992) (20,729)
Gross profit 3,675 1,619
Central staff costs (2,617) (2,076)
Share-based payments 26 (830) (844)
Insurance claim proceeds - 2,500
Impairment of goodwill 13 (1,563) -
Impairment of property, plant and
equipment 14 (980) (610)
Loss on disposal of property, plant
and equipment (54) (335)
Other expenses 11 (2,840) (2,352)
Operating loss (5,209) (2,098)
Finance income 6 - 3
Financing costs 6 (2,006) (1,645)
Loss before tax (7,215) (3,740)
Tax 10 - -
Loss for the period (7,215) (3,740)
=========== ========================
Earnings per share
Basic loss per share (pence) 12 (8.8) (4.6)
Diluted loss per share (pence) 12 (8.8) (4.6)
=========== ========================
The above results were derived from continuing operations.
There are no items of comprehensive income other than the loss
for the period and therefore, no statement of other comprehensive
income is presented.
Consolidated Statement of Financial Position
As at 2 October 2022
2 October 3 October
2022 2021
Note GBP 000 GBP 000
Non-current assets
Intangible assets 13 11,214 12,841
Right-of-use assets 14 26,109 20,724
Other property, plant and equipment 14 21,592 15,168
58,915 48,733
---------- ----------
Current assets
Inventories 16 808 546
Trade receivables 17 204 137
Other receivables 17 2,359 1,367
Cash and bank balances 18 9,390 19,716
12,761 21,766
---------- ----------
Total assets 71,676 70,499
---------- ----------
Current liabilities
Trade and other payables 19 (11,420) (11,243)
Borrowings 20 (12,707) (12,438)
Net current liabilities (11,366) (1,915)
---------- ----------
Total assets less current liabilities 47,549 46,818
---------- ----------
Non-current liabilities
Borrowings 21 (29,244) (22,128)
Provisions 22 (357) (357)
Total non-current liabilities (29,601) (22,485)
---------- ----------
Total liabilities (53,728) (46,166)
---------- ----------
Net assets 17,948 24,333
========== ==========
Equity
Share capital 23 890 890
Share premium 52,284 52,284
Merger reserve 64,736 64,736
Employee benefit trust shares reserve (5,012) (5,012)
Retained earnings (94,950) (88,565)
Total funds attributable to the
equity shareholders of the Company 17,948 24,333
========== ==========
Consolidated Statement of Changes in Equity
for the 52 weeks ended 2 October 2022
Employee
benefit
Called-up Share trust
share premium Merger shares Retained
capital account reserve reserve Earnings Total
Attributable
to
equity
shareholders GBP GBP GBP GBP
of the Company 000 000 000 000 GBP 000 GBP 000
---------------- ----------------
At 27
September
2020 890 52,284 64,736 (5,012) (85,669) 27,229
============== ============== ============== ============== ================ ================
Share-based
payments - - - - 844 844
Total
transactions
with owners - - - - 844 844
Loss for the
period - - - - (3,740) (3,740)
--------------
Total
comprehensive
loss - - - - (3,740) (3,740)
---------------- ----------------
At 3 October
2021 890 52,284 64,736 (5,012) (88,565) 24,333
============== ============== ============== ============== ================ ================
Share-based
payments - - - - 830 830
Total
transactions
with owners - - - - 830 830
Loss for the
period - - - - (7,215) (7,215)
--------------
Total
comprehensive
loss - - - - (7,215) (7,215)
---------------- ----------------
At 2 October
2022 890 52,284 64,736 (5,012) (94,950) 17,948
============== ============== ============== ============== ================ ================
Consolidated Statement of Cash Flows
for the 52 weeks ended 2 October 2022
52 weeks 53 weeks
ended ended
2 October 3 October
2022 2021
GBP
000 GBP 000
Cash flows from operating activities
Loss for the period (7,215) (3,740)
Adjustments to cash flows from non-cash
items:
Depreciation and amortisation 4,702 3,971
Impairment 2,543 610
Loss on disposal of assets and leases 54 335
Share-based payments 830 844
Finance income - (3)
Financing costs 2,006 1,645
2,920 3,662
Working capital adjustments:
Increase in inventories (262) (145)
(Increase) / decrease in trade and
other receivables (1,059) 54
Increase / (decrease) in accruals,
trade and other payables 262 (175)
Decrease in provisions - (104)
Net cash flow from operating activities 1,861 3,292
Cash flows from investing activities
Interest received - 3
Purchases of property plant and
equipment (8,852) (5,059)
Proceeds from disposal of property,
plant and equipment - 59
Costs on issue of shares - (46)
Net cash flows from investing activities (8,852) (5,043)
Cash flows from financing activities
Interest paid (1,345) (1,525)
Proceeds on issue of shares - 23,373
Repayment of borrowings (431) -
Principal elements of lease payments (1,559) (1,274)
Net cash flows from financing activities (3,335) 20,574
(Decrease) / increase in cash (10,326) 18,823
----------- -----------
Opening cash at bank and in hand 19,716 893
Closing cash at bank and in hand 9,390 19,716
=========== ===========
1 General information
Various Eateries PLC, 'the Company', and its subsidiaries
(together 'the Group') are engaged in the operation of restaurants
and hotels in London and the South East of England.
The Company is a public company limited by shares whose shares
are publicly traded on the AIM Market of the London Stock Exchange
and is incorporated and domiciled in the United Kingdom under the
Companies Act 2006 and are registered in England and Wales.
The address of the registered office is 20 St Thomas Street,
London, SE1 9RS.
2 Accounting policies
Basis of preparation
The principal accounting policies adopted in the preparation of
the financials statements of the Group which have been applied
consistently to all periods presented, are set out below.
The directors (the 'Directors') of Various Eateries PLC are
responsible for the financial statements. Judgements made by the
Directors, in the application of these accounting policies that
have a significant effect on the financial statements and estimates
with a significant risk of material adjustments in the next period
are disclosed in note 3.
The consolidated financial statements of the Group have been
prepared in accordance with UK adopted International Accounting
Standards. The Company has elected to prepare its parent company
financial statements in accordance with FRS 101.
The financial statements have been prepared on an historical
cost basis. Monetary amounts in these financial statements are
rounded to the nearest whole GBP1,000, except where otherwise
indicated.
As permitted under s408 of the Companies Act 2006, the Company
has taken advantage of the disclosure exemption in relation to the
presentation of a company statement of profit or loss. As permitted
by FRS 101, the Company has taken advantage of the disclosure
exemptions available under that standard in relation to
presentation of a cash flow statement, standards not yet effective,
impairment of assets, related party transactions and remuneration
of key management personnel.
Basis of consolidation
The consolidated financial statements incorporate those of
Various Eateries PLC and all of its subsidiaries (i.e. entities
that the Group controls through its power to govern the financial
and operating policies so as to obtain economic benefits). All
financial statements are made up to 2 October 2022.
All intra-group transactions, balances and unrealised gains on
transactions between group companies are eliminated on
consolidation. Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the asset
transferred.
Going concern
In adopting the going concern basis for preparing the financial
statements for the period ended 2 October 2022, the directors have
considered the business model, the Group's principal risks and
uncertainties as well as taking into account the current cash
position and potential facilities.
Based on the Group's cash flow forecasts and projections, the
Board is satisfied that the Group will be able to operate within
the level of its facilities for the foreseeable future. In making
this assessment, the Directors have made a specific analysis of the
impact of the economic uncertainty arising from the rise in
inflation, along with the continuing impact of both Covid-19 and
Brexit, together with the events in Ukraine. We have also taken
into account the renewal of the deep discounted bond post year end
(as detailed in note 29, post balance sheet events). For this
reason, the Board considers it appropriate for the Group to adopt
the going concern basis in preparing its financial statements.
Revenue
Restaurant revenue represents net invoiced sales of food and
beverage excluding value added tax. Hotel revenue represents net
invoiced sales of accommodation and room hire excluding value added
tax. Revenue is recognised when the goods or services have been
provided.
Goodwill
Goodwill relates to acquired sites and is initially measured at
cost (being the excess of the aggregate of the consideration
transferred and the amount recognised for non-controlling
interests) and any previous interest held over the net identifiable
assets acquired and liabilities assumed. If the fair value of the
net assets acquired is in excess of the aggregate consideration
transferred, the Group re-assesses whether it has correctly
identified all of the assets acquired and all of the liabilities
assumed and reviews the procedures used to measure the amounts to
be recognised at the acquisition date. If the reassessment still
results in an excess of the fair value of net assets acquired over
the aggregate consideration transferred, then the gain is
recognised in the income statement.
After initial recognition, goodwill is measured at cost less any
accumulated impairment losses. The goodwill is tested annually for
impairment irrespective of whether there is an indication of
impairment.
Intangible fixed assets (other than goodwill)
Intangible assets acquired separately from a business
combination are recognised at cost and are subsequently measured at
cost less accumulated amortisation and accumulated impairment
losses. Intangible assets acquired on business combinations are
recognised separately from goodwill at the acquisition date if the
fair value can be measured reliably.
Amortisation is recognised so as to write off the cost or
valuation of assets less their residual values over their useful
lives of 4 years on a straight-line basis.
Property, plant and equipment
Property, plant and equipment are stated at cost net of
accumulated depreciation and accumulated impairment losses. Cost
comprises purchase cost together with any incidental costs of
acquisition.
Depreciation is provided to write down the cost less the
estimated residual value of all tangible fixed assets by equal
instalments over their estimated useful economic lives on a
straight-line basis. The following rates are applied:
Asset class Depreciation method and rate
Right-of-use assets Life of lease
Freehold buildings 2% per annum
Freehold land Not depreciated
Leasehold improvements Life of lease
Furniture, fittings and equipment 14.29% - 33.33% per annum
Assets under construction Not depreciated
IT equipment 20% - 33.33% per annum
The estimated useful lives, residual values and depreciation
method are reviewed at the end of each reporting period, with the
effect of any changes in estimate accounted for on a prospective
basis. Property, plant and equipment are tested for impairment if
indications of impairment are present.
Assets under construction relates to capital expenditure on
sites that have not started trading.
Inventories
Raw materials and consumables are valued at the lower of cost
and net realisable value. Cost is based on latest contracted
purchase cost.
Financial instruments
The Group classifies financial instruments, or their component
parts, on initial recognition as a financial asset, a financial
liability or an equity instrument in accordance with the substance
of the contractual arrangement. Financial instruments are
recognised on the trade date when the Group becomes a party to the
contractual provisions of the instrument. Financial instruments are
recognised initially at fair value plus, in the case of a financial
instrument not at fair value through profit and loss, transaction
costs that are directly attributable to the acquisition or issue of
the financial instrument. Financial instruments are derecognised on
the trade date when the Group is no longer a party to the
contractual provisions of the instrument.
Non-derivative financial instruments
Non-derivative financial instruments comprise trade and other
receivables, cash and cash equivalents, loans and borrowings and
trade and other payables. All financial instruments held are
classified as subsequently measured at amortised cost.
Trade and other receivables and trade and other payables
Trade and other receivables are recognised initially at
transaction price less attributable transaction costs. Trade and
other payables are recognised initially at transaction price plus
attributable transaction costs. Subsequent to initial recognition
they are measured at amortised cost using the effective interest
method, less any expected credit losses in the case of trade
receivables. If the arrangement constitutes a financing
transaction, for example if payment is deferred beyond normal
business terms, then it is measured at the present value of future
payments discounted at a market rate of interest for a similar debt
instrument.
Interest bearing borrowings
Interest-bearing borrowings are recognised initially at the
present value of future payments discounted at a market rate of
interest. Subsequent to initial recognition, interest-bearing
borrowings are stated at amortised cost using the effective
interest method, less any impairment losses.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances held at bank,
call deposits, cash on hand and cash in transit.
Impairments of tangible and intangible fixed assets
At each reporting end date, the Group reviews the carrying
amounts of its tangible and intangible assets to determine whether
there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). Where it is not possible to
estimate the recoverable amount of an individual asset, the Group
estimates the recoverable amount of the cash-generating unit to
which the asset belongs.
Recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been
adjusted.
If the recoverable amount of an asset (or cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised immediately in
profit or loss.
Where an impairment loss subsequently reverses, the carrying
amount of the asset (or cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised
for the asset (or cash-generating unit) in prior periods. A
reversal of an impairment loss is recognised immediately in profit
or loss.
Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
Tax payable is based on taxable profit. Taxable profit differs
from net profit as reported in the statement of profit or loss
because it excludes items of income or expense that are taxable or
deductible in other years and it further excludes items that are
never taxable or deductible. Any liability for current tax is
calculated using tax rates that have been enacted at the balance
sheet date.
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit, and is accounted for using the
balance sheet liability method. Deferred tax liabilities are
generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised. Such assets and
liabilities are not recognised if the temporary difference arises
from the initial recognition of goodwill or from the initial
recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the taxable
profit nor the accounting profit. The carrying amount of deferred
tax assets is reviewed at each balance sheet date and reduced to
the extent that it is no longer probable that sufficient taxable
profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is
realised based on tax laws and rates that have been enacted or
substantively enacted at the balance sheet date. Deferred tax is
charged or credited in the consolidated profit and loss account,
except when it relates to items charged or credited in other
comprehensive income, in which case the deferred tax is also dealt
with in other comprehensive income.
The measurement of deferred tax liabilities and assets reflects
the tax consequences that would follow from the manner in which the
Company expects, at the end of the reporting period, to recover or
settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a
legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied
by the same taxation authority and the Company intends to settle
its current tax assets and liabilities on a net basis.
Current and deferred tax are recognised in the consolidated
profit or loss, except when they relate to items that are
recognised in other comprehensive income or directly in equity, in
which case, the current and deferred tax are also recognised in
other comprehensive income or directly in equity respectively.
Employee benefits
Post-retirement benefits
The Group operates defined contribution plans for its employees.
A defined contribution plan is a post-employment benefit plan under
which the Group pays fixed contributions into a separate entity and
will have no legal or constructive obligation to pay further
amounts. Obligations for contributions to defined contribution
pension plans are recognised as an expense in the periods during
which services are rendered by employees. Termination benefits
Termination benefits are recognised immediately as an expense
when the Group is demonstrably committed to terminate the
employment of an employee or to provide termination benefits.
Leases
The Group leases a number of properties in various locations
around the UK from which it operates.
All leases are accounted for by recognising a right-of-use asset
and a lease liability except for:
Leases of low value assets; and
Leases with a duration of twelve months or less.
Lease liabilities are measured at the present value of the
contractual payments due to the lessor over the lease term, with
the discount rate determined by reference to the rate inherent in
the lease unless (as is typically the case) this is not readily
determinable, in which case the Group's incremental borrowing rate
on commencement of the lease is used. This is 4.5% (2021: 4.5%).
Variable lease payments are only included in the measurement of the
lease liability if they depend on an index or rate. In such cases,
the initial measurement of the lease liability assumes the variable
element will remain unchanged throughout the lease term. Other
variable lease payments, such as those linked to revenue, are
expensed in the period to which they relate.
On initial recognition, the carrying value of the lease
liability also includes:
Amounts expected to be payable under any residual value
guarantee;
The exercise price of any purchase option granted in favour of
the Group if it is reasonably certain to exercise that option;
and
Any penalties payable for terminating the lease, if the term of
the lease has been estimated on the basis of termination option
being exercised.
Right-of-use assets are initially measured at the amount of the
lease liability, reduced for any lease incentives received, and
increased for:
Lease payments made at or before commencement of the lease.
Initial direct costs incurred; and
The amount of any provision recognised where the Group is
contractually required to dismantle, remove or restore the leased
asset (typically leasehold dilapidations).
Subsequent to initial measurement lease liabilities increase as
a result of interest charged at a constant rate on the balance
outstanding and are reduced for lease payments made. Right-of-use
assets are depreciated on a straight-line basis over the remaining
term of the lease or over the remaining economic life of the asset
if, rarely, this is judged to be shorter than the lease term.
Right-of-use assets are tested for impairment if indications of
impairment are present.
When the Group revises its estimate of the term of any lease
(because, for example, it re-assesses the probability of a lessee
extension or termination option being exercised), it adjusts the
carrying amount of the lease liability to reflect the payments to
be made over the revised term, which are discounted at the same
discount rate that applied on lease commencement. The carrying
value of lease liabilities is similarly revised when the variable
element of future lease payments dependent on a rate or index is
revised. In both cases an equivalent adjustment is made to the
carrying value of the right-of-use asset, with the revised carrying
amount being depreciated over the remaining (revised) lease
term.
Lease modifications change the scope of the lease or change the
consideration for the lease by comparison with that detailed in the
original terms and conditions of the contract. If the
modifications, in substance, mean that the original lease has been
terminated and a new lease created, then the revised terms are
accounted for as a new lease.
Where modifications do not need to be accounted for as a
separate lease, the amount recognised for the lease liability and
the right-of-use asset is revisited to reflect the updated terms
and conditions of the contract.
Finance income and Financing costs
Financing costs comprise interest payable, finance charges on
shares classified as liabilities and finance leases recognised in
profit or loss using the effective interest method, and net foreign
exchange losses that are recognised in the Statement of
Comprehensive Income.
Finance income includes interest receivable on funds
invested.
Interest income and interest payable are recognised in the
Statement of Comprehensive Income as they accrue, using the
effective interest method.
Investments
In the separate accounts of the Company, interests in
subsidiaries are initially measured at cost and subsequently
measured at cost less any accumulated impairment losses. Interests
in subsidiaries are assessed for impairment at each reporting date.
Any impairments losses or reversals of impairment losses are
recognised immediately in profit or loss.
Government grants
During the period, the Group has received business rates relief.
The income from this has been offset against the expense to which
it relates.
Standards issued but not yet effective:
The following standards relevant to the Group are in issue but
are not yet effective and have not been applied in the financial
statements. In some cases these standards and guidance have not
been endorsed for use in the United Kingdom.
IFRS 3 (Amendment) Reference to the conceptual framework
IAS 16 (Amendment) Property, plant and equipment: proceeds before
intended use
IAS 37 (Amendment) Cost of fulfilling a contract
IAS 1 (Amendment) Classification of liabilities as current
or non-current
IAS 1 (Amendment) Disclosure of accounting policies
IAS 8 (Amendment) Definition of accounting estimates
IAS 12 (Amendment) Deferred tax related to assets and liabilities
arising from a single transaction
IFRS 17 (Amendment) Insurance contracts
The Group has not yet assessed the impact of these amended
Accounting Standards.
3 Critical accounting judgements and key sources of estimation
uncertainty
The preparation of the financial statements requires the
Directors to make estimates and judgements that affect the reported
amounts of assets, liabilities, costs and revenue. Actual results
could differ from these estimates. Information about such
judgements and estimates is contained in individual accounting
policies. The judgements, estimates and associated assumptions are
based on historical experience and other factors that are
considered to be relevant.
The resulting accounting estimates will, by definition, seldom
equal the related actual results. The estimates and assumptions
that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next
financial year are addressed below:
Key estimate - determining the rate used to discount lease
payments
At the commencement date of property leases the lease liability
is calculated by discounting the lease payments. The discount rate
used should be the interest rate implicit in the lease. However, if
that rate cannot be readily determined, which is generally the case
for property leases, the lessee's incremental borrowing rate is
used, being the rate that the individual lessee would have to pay
to borrow the funds necessary to obtain an asset of similar value
to the right of use asset in a similar economic environment with
similar terms, security and conditions. The discount rate applied
to the Group's leases under the portfolio approach is 4.5%. A 0.5%
increase in the discount rate to 5% will result in a decrease in
net present value of the total lease liability of GBP1,012,000 in
2022 (2021: GBP648,000). A 0.5% decrease in discount rate to 4%
results in increase in the net present value of the total lease
liability of GBP1,067,000 in 2022 (2021: GBP683,000).
Key estimate - determining the AGA provision
The Group has historically entered into AGA provisions for 8
sites (2021: 9) which have been disposed of via assignment of
lease. Should the assignees default on their payments, the Group
would become liable. Judgement is required to determine the
probable outflow of resources that arise from these guarantees. A
provision of GBP357,000 (2021: GBP357,000) has been made for one
year of rent at 3 sites (2021: 3), with other sites considered a
contingent liability (as detailed in note 30). This reflects an
assessment of the trading status of the assignees, and the expected
cost to dispose of the lease should those assignees default.
Key estimate - assessment of recoverable amounts for assets
tested for impairment
The Group performs impairment assessments on goodwill, other
intangibles, and property plant and equipment as required by IAS 36
Impairment of assets. The Company also performs impairment
assessments on investments in subsidiaries under IAS 36 and
receivables from subsidiaries under IFRS 9 Financial
instruments.
Determining whether assets are impaired under IAS 36 requires an
estimation of the recoverable amount of the cash-generating units
('CGUs') to which those assets have been allocated. The
value-in-use calculation requires estimation of future cash flows
expected to arise from the cash generating unit and a suitable
discount rate in order to calculate present value. Details of cash
generating units, carrying values of goodwill, other intangibles
and property, plant and equipment as well as further information
about the assumptions made are disclosed in notes 13 and 14 to the
financial statements.
Determining whether assets are impaired under IFRS 9 requires
application of the 'expected credit loss' approach, which involves
estimation of how current and future economic conditions will
impact on the amount of any such loss. The carrying value of
receivables from subsidiaries is set out in note 17 to the
financial statements.
4 Revenue
An analysis of the Group's total revenue (including sublease
rental income shown within cost of sales) which all originates in
the UK is as follows:
52 weeks 53 weeks
ended ended
2 October 3 October
2022 2021
GBP 000 GBP 000
Sale of goods 36,523 20,212
Accommodation and room hire 4,086 2,111
Sub-let rental income 58 25
40,667 22,348
============================== =========================
5 Segmental Reporting
IFRS 8 'Operating Segments' requires operating segments to be
based on the Group's internal reporting to its Chief Operating
Decision Maker ('CODM'). The CODM is regarded as the Chief
Executive Officer together with other Board Members who receive
financial information at a site-by-site level.
52 weeks ended 2 Restaurant Hotel Other
October 2022 Segment Segment Unallocated Total
GBP 000 GBP 000 GBP 000 GBP 000
Revenue 36,523 4,086 58 40,667
Adjusted EBITDA
(before impact of
IFRS 16) 4,548 1,050 (5,161) 437
Pre-opening costs (734) - (21) (755)
Non-trading sites
income 144 - - 144
Impact of IFRS 16 1,819 1,275 - 3,094
Share based payments - - (830) (830)
EBITDA 5,777 2,325 (6,012) 2,090
Depreciation and
amortisation - - (4,702) (4,702)
Loss on disposal
of assets and leases - - (54) (54)
Impairments - - (2,543) (2,543)
Financing costs - - (2,006) (2,006)
Profit / (loss)
before tax 5,777 2,325 (15,317) (7,215)
Tax - - - -
Profit / (loss)
for the period 5,777 2,325 (15,317) (7,215)
=========== ================= ============== ======================
53 weeks ended 3 Restaurant Hotel Other
October 2021 Segment Segment Unallocated Total
GBP 000 GBP 000 GBP 000 GBP 000
Revenue 20,212 2,111 25 22,348
Adjusted EBITDA
(before impact of
IFRS 16) 2,748 (18) (3,908) (1,178)
Pre-opening costs (295) - - (295)
Non-trading sites
income 149 - - 149
Impact of IFRS 16 1,182 1,200 - 2,382
Share based payments - - (844) (844)
EBITDA 3,784 1,182 (4,752) 214
Depreciation and
amortisation - - (3,971) (3,971)
Loss on disposal
of assets and leases - - (335) (335)
Impairments - - (610) (610)
Financing costs - - (1,642) (1,642)
Movement in AGA provision - - 104 104
Insurance claim proceeds 2,500 - - 2,500
Profit / (loss)
before tax 6,284 1,182 (11,206) (3,740)
Tax - - - -
Profit / (loss)
for the period 6,284 1,182 (11,206) (3,740)
=========== ================= ============== ======================
6 Finance income / financing costs
52 weeks 53 weeks
ended ended
2 October 3 October
2022 2021
GBP 000 GBP 000
Interest income on bank deposits - 3
Total finance income - 3
----------- -----------
Interest on bank overdrafts and borrowings (661) (537)
Lease liability interest (1,344) (1,108)
Foreign exchange loss (1) -
Total financing costs (2,006) (1,645)
----------- -----------
Net financing costs (2,006) (1,642)
=========== ===========
7 Auditor's remuneration
52 weeks 53 weeks
ended ended
2 October 3 October
2022 2021
GBP 000 GBP 000
Audit of the financial statements 199 138
=========== ===========
Audit fees for the 52 weeks ended 2 October 2022 includes
GBP36,000 in respect of the 2021 audit. Audit fees for the 53 weeks
ended 3 October 2021 includes GBP13,000 in respect of the 2020
audit.
8 Staff numbers and costs
52 weeks 53 weeks
ended ended
2 October 3 October
2022 2021
GBP 000 GBP 000
Their aggregate remuneration comprised:
Wages and salaries 15,339 11,824
Social security costs 1,215 898
Other pension costs (see note 24) 220 179
Share-based payments 830 844
Other employee costs 91 94
Grant income - CJRS - (3,091)
----------------------------------------- ------------------- -----------
17,695 10,748
----------------------------------------- ------------------- -----------
52 weeks 53 weeks
ended ended
2 October 3 October
2022 2021
The average monthly number of employees
(including Directors) was:
Restaurants 759 521
Hotels 56 46
Management 43 32
----------------------------------------- ------------------- -----------
858 599
----------------------------------------- ------------------- -----------
The average monthly number of employees (being directors) of the
Company was 7 (2021:7)
9 Directors' remuneration
52 weeks 53 weeks
ended ended
2 October 3 October
2022 2021
The Directors' remuneration for the period GBP 000 GBP 000
in respect of services to the Group,
was as follows:
Remuneration 483 444
Employer pension contribution 9 8
492 452
=========== ===========
52 weeks 53 weeks
ended ended
2 October 3 October
2022 2021
In respect of the highest paid director: GBP 000 GBP 000
Remuneration 202 181
Employer pension contribution 5 5
207 186
=========== ===========
10 Tax
Tax charged in the statement of comprehensive income
52 weeks 53 weeks
ended ended
2 October 3 October
2022 2021
GBP 000 GBP 000
Tax expense
Corporation tax - -
Total current income tax - -
----------- -----------
Tax expense in the statement of comprehensive
income - -
=========== ===========
Corporation tax is calculated at 19% (2021: 19%) of the estimated
taxable loss for the period.
The charge for the period can be reconciled to the loss in
the consolidated statement of comprehensive income as follows:
52 weeks 53 weeks
ended ended
2 October 3 October
2022 2021
GBP 000 GBP 000
Loss before tax (7,215) (3,740)
=========== ===========
Corporation tax at standard rate 19.0%
(2021: 19.0%) (1,371) (711)
Fixed asset differences 527 236
Expenses not deductible 1,792 311
Income not taxable (1,409) -
Remeasurement of deferred tax for changes
in tax rates 1 (3,049)
Movement in deferred tax not recognised 529 3,213
Other movements (69) -
Total tax charge - -
=========== ===========
No account has been taken of the potential deferred tax asset of
GBP13,528,000 (2021: GBP12,705,000) calculated at 25% (2021: 25%)
and representing losses carried forward and short-term timing
differences, owing to the uncertainty over the utilisation of the
losses available.
11 Other expenses
52 weeks 53 weeks
ended ended
2 October 3 October
2022 2021
GBP 000 GBP 000
Depreciation and amortisation 244 389
AGA release of provision (note 22) - (104)
Other central costs 2,596 2,067
----------- -------------------
2,840 2,352
=========== ===================
12 Earnings per share
Basic loss per share is calculated by dividing the profit
attributable to equity shareholders by the weighted average number
of shares outstanding during the year. There were no potentially
dilutive ordinary shares outstanding as at the periods ended 2
October 2022 and 3 October 2021.
2 October 3 October
2022 2021
GBP 000 GBP 000
Loss for the year
after tax (7,215) (3,740)
Basic and diluted weighted average number
of shares 82,143,398 82,143,398
Basic loss per share
(pence) (8.8) (4.6)
Diluted loss per share (pence) (8.8) (4.6)
=========== ===========
13 Intangible assets
Group Trademarks,
patents
Brand Goodwill & licenses Total
GBP 000 GBP 000 GBP 000 GBP 000
Cost or valuation
At 3 October 2021 2,912 26,019 25 28,956
Additions - - - -
At 2 October 2022 2,912 26,019 25 28,956
-------- --------- -------------- --------
Amortisation
At 3 October 2021 2,724 13,391 - 16,115
Charge for the period 64 - - 64
Impairment - 1,563 - 1,563
At 2 October 2022 2,788 14,954 - 17,742
-------- --------- -------------- --------
Carrying amount 2 October
2022 124 11,065 25 11,214
======== ========= ============== ========
Trademarks,
patents
Brand Goodwill & licenses Total
GBP 000 GBP 000 GBP 000 GBP 000
Cost or valuation
At 27 September 2020 2,912 26,019 25 28,956
Additions - - - -
At 3 October 2021 2,912 26,019 25 28,956
-------- --------- -------------- --------
Amortisation
At 27 September 2020 2,662 13,391 - 16,053
Charge for the period 62 - - 62
At 3 October 2021 2,724 13,391 - 16,115
-------- --------- -------------- --------
Carrying amount 3 October
2021 188 12,628 25 12,841
======== ========= ============== ========
Brand relates to registered brand names and is amortised over an
estimated useful economic life of four years.
Goodwill is not amortised, but an impairment test is performed
annually by comparing the carrying amount of the goodwill to its
recoverable amount. The recoverable amount is represented by the
greater of the individual cash generating units (CGU's) fair value
less costs of disposal and its value-in-use.
The goodwill balance relates to two sites in the restaurant
segment (GBP2,038,000) and two sites in the hotel segment
(GBP9,027,000).
Restaurant segment
The key assumptions for the value-in-use calculations are those
regarding the discount rate, trading forecasts and growth rates. A
pre-tax discount rate of 14.9% was used (2021: 12.0%), based on the
Group's WACC and comparable businesses in the sector. Cash flows in
line with forecasts were used. Cash flows beyond the forecast
period are extended out to the end of the lease terms at a 2%
growth rate.
Impairment testing at 2 October 2022 resulted in the impairment
of goodwill relating to Restaurant 1 for GBP1,563,000, leaving a
recoverable amount of GBP1,046,000. This is due to the recoverable
amount, being value-in-use, being lower than the goodwill
recognised.
Given the ongoing global economic uncertainty and its impact on
the UK hospitality sector there is particular sensitivity to the
forecasts prepared in connection with the impairment review as at 2
October 2022. The estimate of recoverable amount for the restaurant
segment is particularly sensitive to the discount rate and trading
forecast assumptions. If the discount rate used is increased by 2%,
the forecast future EBITDA is reduced by 10% and the terminal
growth rate reduced by 1%, a further impairment loss of GBP991,000
for the period ended 2 October 2022 would have to be recognised
against goodwill (2021: GBP220,000). Management is not currently
aware of any other reasonably possible changes to key assumptions
that would cause a unit's carrying amount to exceed its recoverable
amount.
Hotel segment
The key assumptions for the value-in-use calculations are those
regarding the discount rate, trading forecasts and growth rates. A
pre-tax discount rate of 14.9% was used (2021: 12.0%), based on the
Group's WACC and comparable businesses in the sector. Cash flows in
line with forecasts were used. Cash flows beyond the forecast
period are extended at a terminal growth rate of 2%.
Impairment testing at 2 October 2022 resulted in no requirement
to reduce the carrying value of goodwill at 2 October 2022, as the
recoverable amounts of the CGUs, based on value-in-use estimates,
were greater than the carrying values.
The estimate of recoverable amount for the hotel segment is
sensitive to the discount rate, trading forecast assumptions and
terminal growth rate. If the discount rate used is increased by 2%,
the forecast future EBITDA is reduced by 10% and the terminal
growth rate reduced by 1%, no impairment would be required (2021:
nil). Management is not currently aware of any other reasonably
possible changes to key assumptions that would cause a unit's
carrying amount to exceed its recoverable amount.
Company
The Company has no intangible assets.
14 Property, plant and equipment
Group
Furniture,
fittings Assets
Right-of-use Freehold Leasehold and under IT
assets property improvements equipment construction equipment Total
GBP GBP GBP
GBP 000 000 GBP 000 GBP 000 GBP 000 000 000
Cost or
valuation
At 3 October
2021 29,215 2,294 9,814 6,003 1,336 1,583 50,245
Additions 6,531 - 5,481 2,291 585 495 15,383
Lease
modifications 2,127 - - - - - 2,127
Disposals (285) - - (3) (74) (2) (364)
Transfers - - 998 244 (1,274) 32 -
At 2 October
2022 37,588 2,294 16,293 8,535 573 2,108 67,391
------------- --------- ------------- ----------- ------------- ---------- ---------
Depreciation
At 3 October
2021 8,491 - 1,756 3,091 - 1,015 14,353
Charge for
the period 2,286 - 733 1,351 - 268 4,638
Eliminated
on disposal (278) - - (2) - (1) (281)
Impairment
loss 980 - - - - - 980
At 2 October
2022 11,479 - 2,489 4,440 - 1,282 19,690
------------- --------- ------------- ----------- ------------- ---------- ---------
Carrying
amount
At 2 October
2022 26,109 2,294 13,804 4,095 573 826 47,701
============= ========= ============= =========== ============= ========== =========
Furniture,
fittings Assets
Right-of-use Freehold Leasehold and under IT
assets property improvements equipment construction equipment Total
GBP GBP GBP
GBP 000 000 GBP 000 GBP 000 GBP 000 000 000
Cost or
valuation
At 27
September
2020 26,907 1,795 7,860 5,942 1,171 1,432 45,107
Additions 2,308 17 2,088 1,404 1,336 215 7,368
Disposals - - (701) (1,404) (60) (65) (2,230)
Transfers - 482 567 61 (1,111) 1 -
At 3 October
2021 29,215 2,294 9,814 6,003 1,336 1,583 50,245
------------- --------- ------------- ----------- ------------- ---------- ---------
Depreciation
At 27
September
2020 5,858 - 1,436 3,551 - 823 11,668
Charge for
the period 2,023 - 374 1,267 - 244 3,908
Eliminated
on disposal - - (54) (1,727) - (52) (1,833)
Impairment
loss 610 - - - - - 610
At 3 October
2021 8,491 - 1,756 3,091 - 1,015 14,353
------------- --------- ------------- ----------- ------------- ---------- ---------
Carrying
amount
3 October
2021 20,724 2,294 8,058 2,912 1,336 568 35,892
============= ========= ============= =========== ============= ========== =========
The Group's leasehold premises and improvements are stated at
cost, being the fair value at the date of acquisition, plus any
additions at cost less any subsequent accumulated depreciation.
Assets under construction relates to capital expenditure on sites
that have not started trading.
Depreciation is charged to cost of sales in the Statement of
Comprehensive Income for property, plant and equipment in use at
the trading leasehold premises. Depreciation on property, plant and
equipment used by central functions is charged to other expenses in
the Statement of Comprehensive Income.
Rental income from subletting right-of-use assets is recognised
on a straight-line basis over the term of the relevant lease. It is
netted off against rental costs and is recognised within cost of
sales (2022: GBP42,000, 2021: GBP41,000).
The Group has determined that each site in the restaurant
operating segment, and each of the companies in the hotel operating
segment are separate CGUs for impairment testing purposes. Each CGU
is tested for impairment at the balance sheet date if there exists
at that date any indicators of impairment. Losses incurred by the
Group pre Covid-19 as well as the ongoing Covid-19 pandemic are
considered indicators of potential impairment, accordingly all CGUs
have been tested for impairment by comparing the carrying amount of
the assets to recoverable amount. The recoverable amount is
represented by the greater of the individual CGU's fair value less
costs of disposal and its value-in-use.
Restaurant segment
The key assumptions for the value-in-use calculations are those
regarding the discount rate, trading forecasts and growth rates. A
discount rate of 14.9% was used (2021: 12.0%), based on the Group's
WACC and comparable businesses in the sector. Cash flows in line
with forecasts were used. Cash flows beyond the forecast period are
extended out to the end of the lease terms at a 2% growth rate.
Impairment testing resulted in the reduction of carrying amount
to recoverable amount, being value-in-use, for three CGUs in 2022,
with the full charge recognised against the restaurant segment.
This charge was for the lease on restaurant 2 (impairment of
GBP495,000 leaving a recoverable amount in the CGU of
GBP1,970,000), restaurant 3 (impairment of GBP278,000 leaving a
recoverable amount in the CGU of GBP471,000) and restaurant 4
(impairment of GBP207,000 leaving a recoverable amount in the CGU
of GBPnil). The CGUs with the least headroom are Restaurant 5 with
GBP160,000, Restaurant 6 with GBP318,000 and Restaurant 7 with
GBP534,000. The charge in 2021 was for GBP610,000 against right of
use assets at restaurant 4.
The estimate of recoverable amount for the restaurant segment is
particularly sensitive to the trading forecast assumptions. If the
discount rate used is increased by 2%, the forecast EBITDA is
reduced by 10%, and the terminal growth rate reduced by 1%, a
further impairment loss of GBP569,000 for the period ended 2
October 2022 would have to be recognized against right of use
assets. Management is not currently aware of any other reasonably
possible changes to key assumptions that would cause a unit's
carrying amount to exceed its recoverable amount.
Hotel segment
As a result of the headroom identified during the goodwill
impairment testing of the hotel operating segment (see note 13), no
impairment charge is required in respect of the hotel segment.
Company
The Company has no property, plant and equipment.
15 Investments
Group subsidiaries
Country of incorporation Proportion of ownership
Principal and registered interest and voting rights
Name of subsidiary activity office held by the Group
------------------------ ------------------------ -------------------------- ------------------------------
2022 2021
-------------- --------------
United Kingdom
20 St Thomas
Various Eateries Street, London,
Holdings Limited* Holding company SE1 9RS 100% 100%
United Kingdom
20 St Thomas
Rare Bird Hotels Hotels and Street, London,
at Sonning Limited* similar accommodation SE1 9RS 100% 100%
United Kingdom
20 St Thomas
Rare Bird Hotels Hotels and Street, London,
at Streatley Limited* similar accommodation SE1 9RS 100% 100%
United Kingdom
Property 20 St Thomas
VEL Property Holdings management Street, London,
Limited services SE1 9RS 100% 100%
United Kingdom
20 St Thomas
Street, London,
SCP Sugar Limited Holding company SE1 9RS 100% 100%
United Kingdom
20 St Thomas
Various Eateries Licensed Street, London,
Trading Limited restaurants SE1 9RS 100% 100%
United Kingdom
Property 20 St Thomas
management Street, London,
Noci Islington Limited services SE1 9RS 100% 100%
United Kingdom
Property 20 St Thomas
Coppa Club (Haslemere) management Street, London,
Limited services SE1 9RS 100% 100%
United Kingdom
Property 20 St Thomas
management Street, London,
Coppa Club Limited services SE1 9RS 100% 100%
Coppa (Bath) Limited Property United Kingdom 100% -
management 20 St Thomas
services Street, London,
SE1 9RS
Coppa Club Cardiff Property United Kingdom 100% -
Limited management 20 St Thomas
services Street, London,
SE1 9RS
Tavolino Limited Dormant United Kingdom 100% -
20 St Thomas
Street, London,
SE1 9RS
United Kingdom
20 St Thomas
Street, London,
Coppa Limited Dormant SE1 9RS 100% 100%
------------------------ ------------------------ -------------------------- -------------- --------------
*Indicates direct investment of the Company, other companies are
held by direct subsidiaries
The two subsidiary companies set out above, Rare Bird Hotels at
Sonning Limited (Registered Company Number 12764418) and Rare Bird
Hotels at Streatley Limited (Registered Company Number 12764529)
are exempt from the requirement for an audit for the period ended 2
October 2022 under section 479A of the Companies Act 2006 in
respect of that period, as the ultimate parent company, Various
Eateries Plc, which has prepared audited consolidated financial
statements, is providing a guarantee under section 479C of the
Companies Act 2006 in respect of that period, and all members of
the companies above agree to the exemption of an audit for the
period ended 2 October 2022.
2 October 3 October
2022 2021
GBP 000 GBP 000
----------------------------------------- ---------------- ----------
Summary of investments in subsidiaries
At start and end of financial period 9,325 9,325
There were no additions by the Company in the period.
16 Inventories
Group Company
--------------------------------- ------------------------------------------------
2 October 3 October 2 October 3 October
2022 2021 2022 2021
GBP 000 GBP 000 GBP 000 GBP 000
Food and beverage 285 234 - -
Consumables 523 312 - -
-------------------- --------------------- ---------- ----------------------- -----------------------
808 546 - -
-------------------- --------------------- ---------- ----------------------- -----------------------
Inventories recognised as an expense in the period totalled
GBP9,828,000 (2021: GBP5,078,000).
17 Trade and other receivables
Group Company
---------------------------------------------- ----------------------------------------------
2 October 3 October 2 October 3 October
2022 2021 2022 2021
GBP 000 GBP 000 GBP 000 GBP 000
Trade
receivables 204 137 - -
Receivables
from
subsidiaries - - 42,632 40,872
Prepayments 907 579 - -
Other
receivables 1,452 788 - -
---------------- ---------------------- ---------------------- ---------------------- ----------------------
2,563 1,504 42,632 40,872
---------------- ---------------------- ---------------------- ---------------------- ----------------------
All of the trade receivables were non-interest bearing,
receivable under normal commercial terms, and the Directors do not
consider there to be any material expected credit loss. The
Directors consider that the carrying value of trade and other
receivables approximates to their fair value.
18 Cash and bank balances
Group Company
----------------------------- -----------------------------------
2 October 3 October 2 October 3 October
2022 2021 2022 2021
GBP 000 GBP 000 GBP 000 GBP 000
Cash and bank balances 9,390 19,716 - -
------------------------- ---------- ----------------- ----------------------- ----------
19 Trade and other payables
Group Company
-------------------------------------------- ------------------------------------------------
2 October 3 October 2 October 3 October
2022 2021 2022 2021
GBP 000 GBP 000 GBP 000 GBP 000
---------------- --------------------- --------------------- ---------------------- ------------------------
Trade payables 2,232 1,544 - -
Payables to
subsidiaries - - 1,863 1,146
Accrued
expenses 3,805 5,028 - -
Social security
and other
taxes 1,363 923 - -
Other payables 1,194 906 - -
Lease
liabilities
due
in less than
one year 2,826 2,842 - -
---------------- --------------------- --------------------- ---------------------- ------------------------
11,420 11,243 1,863 1,146
---------------- --------------------- --------------------- ---------------------- ------------------------
20 Current borrowings
Group Company
----------------------------------------- ----------------------------------------------
2 October 3 October 2 October 3 October
2022 2021 2022 2021
GBP 000 GBP 000 GBP 000 GBP 000
Borrowings from
related
parties 12,707 12,438 - -
--------------------- ---------------------- ----------------- ---------------------- ----------------------
Borrowings from related parties classed as payable within 12
months includes two deep discounted bond instruments issued by VEL
Property Holdings Limited and by Various Eateries Trading
Limited.
The deep discounted bond instrument issued by VEL Property
Holdings Limited was issued in January 2022, the subscription
amount was GBP2,584,000, the nominal value GBP2,791,000, the final
redemption date being 14 January 2023. The discount is recognised
between subscription and redemption date, resulting in GBP147,000
of accrued financing costs as at the reporting date.
The deep discounted bond instrument issued by Various Eateries
Trading Limited was in April 2022, with a subscription price of
GBP9,515,000, a nominal value of GBP10,001,000, and a term of 12
months. The discount is recognised between subscription and
redemption date resulting in GBP226,000 of accrued financing costs
at the reporting date. The balance of GBP608,000 (2021:
GBP1,038,000) under the August 2019 loan agreement matures in April
2023, bears cash settled interest at 3.75% above SONIA (2021: cash
settled interest at 3.75% above LIBOR.
21 Non-current borrowings
Group Company
---------------------------- -----------------------------------
2 October 3 October 2 October 3 October
2022 2021 2022 2021
GBP 000 GBP 000 GBP 000 GBP 000
Lease liabilities due after
more than one year 29,244 22,128 - -
------------------------------ ---------- ---------------- ----------------------- ----------
The loans and borrowings classified as financial instruments are
disclosed in note 25.
The Group's exposure to market and liquidity risk in respect of
loans and borrowings is disclosed in the financial instruments
note.
22 Provisions for liabilities
Group 52 weeks
ended
2 October
2022
Authorised Guarantee Agreements ('AGAs') GBP 000
------------------------------------------ --------------------
At start and end of financial period 357
53 weeks
ended
3 October
2021
------------------------------------------------- -------------
Authorised Guarantee Agreements ("AGAs") GBP 000
------------------------------------------------- -----------
At start of previous financial period 461
Release of provision in the prior year (104)
------------------------------------------------- -----------
At end of previous and current financial period 357
------------------------------------------------- -----------
The provision relates to the annual rental cost of three (2021:
three) previously operated sites that have been disposed of via
assignment of lease and include Authorised Guarantee Agreements
('AGAs') as part of the assignment arrangement (see also note
30).
23 Share capital and share premium
Authorised, allotted, called-up
and fully paid shares
2 October 2022 3 October 2021
------------------------------ ------------------------------
No. 000 GBP 000 No. 000 GBP 000
----------------------------- ------------- --------------- ------------- ---------------
Ordinary shares of GBP0.01
each 89,008 890 89,008 890
----------------------------- ------------- --------------- ------------- ---------------
There were no movements in ordinary share capital in the period
ended 2 October 2022
Ordinary shares
Ordinary shares entitle the holder to participate in dividends
and the proceeds on the winding up of the Company in proportion to
the number of and amounts paid on the shares held. The fully paid
ordinary shares have a par value of GBP0.01 and the company does
not have a limited amount of authorised capital.
Employee benefit trust shares reserve
The Group presents these shares as an adjustment to own equity
at the period end date through the employee benefit trust shares
reserve, until the point that the shares are awarded, and cease to
be conditional awards of shares. The award of shares is conditional
upon certain vesting criteria, as outlined in note 26.
24 Retirement benefit schemes
Group personal pension scheme
The Group operates group personal pension schemes for all
qualifying employees. The assets of the schemes are held separately
from those of the Group.
The total cost charged to income of GBP220,000 (2021:
GBP179,000) represents contributions payable to these schemes by
the Group at rates specified in the rules of the schemes. As at 2
October 2022, contributions of GBP30,000 (2021: GBP26,000) due in
respect of the current reporting period had not been paid over to
the schemes.
25 Financial instruments
Group
Financial assets at amortised cost
2 October 3 October
2022 2021
GBP 000 GBP 000
----------------------------- ------------------ ------------------
Cash at bank and in hand 9,390 19,716
Trade and other receivables 1,656 925
------------------------------- ------------------ ------------------
11,046 20,641
----------------------------- ------------------ ------------------
Reconciliation of liabilities arising from financing
activities
Lease Liabilities Other Borrowings Total
GBP 000 GBP 000 GBP 000
----------------------- ------------------ ----------------- --------
At start of financial
period 24,970 12,438 37,408
New borrowings 7,315 7,315
DDB renewal - 700 700
Interest charge 1,344 - 1,344
Repayments during
the period (1,559) (431) (1,990)
----------------------- ------------------ ----------------- --------
At end of financial
period 32,070 12,707 44,777
----------------------- ------------------ ----------------- --------
Valuation methods and assumptions
Trade receivables are all due for settlement in less than one
year. The Directors consider that the carrying amount of trade and
other receivables is approximately equal to their fair value due to
their short-term nature.
Financial liabilities
at amortised cost
2 October 3 October
2022 2021
GBP 000 GBP 000
------------------------------- ------------- ----------------- ------------------
Trade and other payables 39,190 32,447
Borrowings from related parties 12,707 12,438
------------------------------------ ----------- ----------------- ------------------
51,897 44,885
------------------------------------ ----------- ----------------- ------------------
Valuation methods and assumptions
The Directors consider that the carrying amount of trade and
other payables is approximately equal to their fair value due to
their short-term nature. The fair value of financial liabilities is
estimated by discounting the remaining contractual maturities at
the current market interest rate that is available for similar
financial liabilities.
Fair value hierarchy
The tables above detail the Group's assets and liabilities
disclosed at fair value. Using a three-level hierarchy, based on
the lowest level of input that is significant to the entire fair
value measurement, all assets and liabilities shown above are
considered to be level 3: 'Unobservable inputs for the asset or
liability'. There were no transfers between levels during the
financial period.
Financial risk management and impairment of financial assets
The Group's activities expose it to a variety of financial
instrument risks. The risk management policies employed by the
Group to manage these risks are discussed below. The primary
objectives of the financial instrument risk management function are
to establish risk limits, and then ensure that exposure to risks
stay within these limits.
Capital risk management
The Group's objectives when managing capital is to safeguard its
ability to continue as a going concern, so that it can provide
returns for shareholders and benefits for other stakeholders and to
maintain an optimum capital structure to reduce the cost of
capital.
Capital is regarded as total equity, as recognised in the
statement of financial position, plus net debt. Net debt is
calculated as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the
Company may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to
reduce debt.
The Company is subject to certain financing arrangements
covenants and meeting these is given priority in all capital risk
management decisions. There have been no events of default on the
financing arrangements during the financial period.
Credit risk management
The Group's credit risk is attributable to trade and other
receivables and cash with the carrying amount best representing the
maximum exposure to credit risk. The Group places its cash with
banks with high quality credit standings. Trade and other
receivables relate to day-to-day activities which are entered into
with creditworthy counterparties.
Market risk management
The Group's activities expose it economic factors, the Directors
closely monitor market conditions and consider any impact on the
Group's existing strategy.
Interest rate risk management
The Group is exposed to interest rate risk as the Group's
borrowings have an interest rate of 3.75% above SONIA.
Liquidity risk management
Liquidity risk arises from the Group's management of working
capital and the finance charges and principal repayments on its
debt instruments. It is the risk that the Group will encounter
difficulty in meeting its financial obligations as they fall
due.
Management review cashflow forecasts on a regular basis to
determine whether the Group has sufficient cash reserves to meet
future working capital requirements and to take advantage of
business opportunities.
Remaining contractual maturities
The following tables detail the company's remaining contractual
maturity for its financial instrument liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial
liabilities based on the earliest date on which the financial
liabilities are required to be paid. The tables include both
interest and principal cash flows disclosed as remaining
contractual maturities and therefore these totals may differ from
their carrying amount in the statement of financial position.
Weighted
average Between Between Remaining
interest 1 year 1 and 2 and Over contractual
rate or less 2 years 5 years 5 years maturities
GBP GBP GBP GBP
2022 % 000 000 000 000 GBP 000
Non-derivatives
Trade payables - 2,232 - - - 2,232
Other payables - 4,999 - - - 4,999
Borrowings
- Deep Discount
Bond - 12,792 - - - 12,792
Borrowings 3.75%
- loan + SONIA 608 - - - 608
Lease liability 4.5% 3,157 3,669 11,178 26,451 44,455
23,788 3,669 11,178 26,451 65,086
========= ========= ========= ========= ===============
Weighted
average Between Between Remaining
interest 1 year 1 and 2 and Over contractual
rate or less 2 years 5 years 5 years maturities
GBP GBP GBP
2021 % GBP 000 000 000 000 GBP 000
Non-derivatives
Trade payables - 1,544 - - - 1,544
Other payables - 5,934 - - - 5,934
Borrowings
- Deep Discounted
Bond - 12,099 - - - 12,099
Borrowings 3.75%
- loan + LIBOR 1,038 - - - 1,038
Lease liability 4.5% 2,970 2,999 8,627 18,387 32,983
23,585 2,999 8,627 18,387 53,598
========= ========= ========= ========= =============
The cash flows in the maturity analysis above are not expected
to occur significantly earlier than contractually disclosed
above.
26 Share based payments
As at 2 October 2022, the Group maintained three separate share
based payment scheme for employee remuneration (2021: three):
Various Eateries Joint Share Ownership Scheme ("JSOP Scheme
1")
Various Eateries Joint Share Ownership Scheme ("JSOP Scheme
2")
Various Eateries Company Share Option Plan ("CSOP")
JSOP Scheme 1
In accordance with IFRS 2 "Share-based Payment", the value of
the awards is measured at fair value at the date of the grant. The
fair value is expensed on a straight-line basis over the vesting
period, based on management's estimate of the number of shares that
will eventually vest. A charge of GBP713,000 (2021: GBP818,000) has
been recognised in profit and loss by the Group in the period ended
2 October 2022.
The JSOP is part of the remuneration package of the Group's
senior management. Participants in this scheme have to be employed
until the end of the agreed vesting period. Upon vesting, the
holder is entitled to purchase ordinary shares at the market price
determined at grant date.
JSOP (Scheme 1)
Number of shares
Granted Exercisable Total
At 3 October 2021 5,809,523 - 5,809,523
Granted - - -
Vesting (5,809,523) 5,809,523 -
-------------------------------- ------------------------------ ----------------------
At 2 October 2022 - 5,809,523 5,809,523
================================ ============================== ======================
At 27 September 2020 5,809,523 - 5,809,523
Granted - - -
At 3 October 2021 5,809,523 - 5,809,523
================================ ============================== ======================
The fair value of these options granted was determined using a
Black-Scholes model. The following principal assumptions were
used in the valuation:
JSOP
Grant date 18 September 2020
Vesting period ends 31 August 2022
Share price at date of grant GBP0.73
Volatility 66.98%
Option life 1.95 years
Dividend yield 0.00%
Risk-free investment rate (0.13) %
Fair value per option at grant
date GBP0.26
Exercise price at date of grant GBP0.73
31 August 2022 / 31
Exercisable from / to August 2030
Remaining contractual life nil
The historical volatility has been calculated based on the share
returns of four comparators for a period preceding the valuation
date equal to the initial expected term of the options, i.e. a
period of 1.92 years. The total estimated fair value of the options
granted on 18 September 2020 that was recognised in expenses over
the vesting period is GBP1,513,000.
JSOP Scheme 2
A charge of GBP35,000 (2021: GBP20,000) has been recognised in
profit and loss by the Group in the period ended 2 October
2022.
The JSOP is part of the remuneration package of the Group's
senior management. Participants in this scheme have to be employed
until the end of the agreed vesting period. Upon vesting, the
holder is entitled to purchase ordinary shares at the market price
determined at grant date.
JSOP (Scheme 2)
Exercise
Number price per
of shares share (GBP)
At 3 October 2021 360,000 1.09
Granted - -
Lapsed 29 June 2022 (360,000) 1.09
------------------------------ ------------------
At 2 October 2022 - -
============================== ==================
At 27 September 2020 - -
Granted 11 May 2021 360,000 1.09
At 3 October 2021 360,000 1.09
============================== ==================
26 Share based payments
JSOP
Grant date 11 May 2021
Vesting period ends Various
Share price at date of grant GBP1.03
Volatility 64.17%
Option life 3.89
Dividend yield 0.00%
Risk-free investment rate 0.24%
Exercise price at date of grant GBP1.09
31 March 2025 / 31
Exercisable from / to March 2026
Remaining contractual life 2.50 years
The historical volatility has been calculated based on the share
returns of four comparators for a period preceding the valuation
date equal to the initial expected term of the options, i.e. a
period of 3.89 years. The total estimated fair value of the options
granted on 11 May 2021 to be recognised in expenses over the
vesting period was GBP193,000. All options under the scheme as at 2
October 2022 have lapsed.
CSOP
A charge of GBP82,000 (2021: GBP6,000) has been recognised in
profit and loss by the Group in the period ended 2 October
2022.
CSOP
Exercise
Number price per
of shares share (GBP)
At 3 October 2021 92,402 1.09
Granted 17 January 2022 990,441 0.69
Lapsed 11 May 2022 (92,402) 1.09
Granted 25 August 2022 250,000 0.42
--------------------------------- ----------------------------- ---------------
At 2 October 2022 1,240,441 various
============================= ===============
At 27 September 2020 - -
Granted 92,402 1.09
At 3 October 2021 92,402 1.09
============================= ===============
The fair value of the options is estimated at the date of grant
using a Black-Scholes valuation method. The total estimated fair
value of the options granted during the year to be recognised over
the vesting period is GBP340,000.
CSOP CSOP CSOP
17 January
Grant date 11 May 2021 2022 25 August 2022
Vesting period ends 11 May 2024 17 January 2025 25 August 2025
Share price at date
of grant GBP1.08 GBP0.69 GBP0.42
Volatility 65.66% 65.66% 65.66%
Option life at grant 3 years 3 years 3 years
Dividend yield 0.00% 0.00% 0.00%
Risk-free investment
rate 0.87 % 0.87 % 0.87 %
Fair value per option
at grant date GBP0.49 GBP0.30 GBP0.19
Exercise price at date
of grant GBP1.08 GBP0.69 GBP0.42
17 January 2025 25 August 2025
Exercisable from / 11 May 2024 / 17 January / 25 August
to / 11 May 2031 2032 2032
Remaining contractual
life 1.6 years 2.3 years 2.9 years
27 Related party transactions
Transactions with related parties include management charges for
services provided by Osmond Capital Limited, which has common
shareholders with controlling influence with the Company, of
GBP198,000 (2021: GBP200,000). In addition, H E M Osmond is the
principal lender of the GBP12,099,000 borrowings (2021:
GBP10,000,000) and a shareholder with controlling influence of
Xercise2 Ltd which is a significant shareholder of the Company.
As at 2 October 2022, there was GBP9,000 (2021: GBP20,275) of
accrued cash interest payable on borrowings from related
parties.
Remuneration of key management personnel
The remuneration of the Directors of the Company and its
subsidiaries and other key management, who are the key management
personnel of the Group, is set out below in aggregate for each of
the categories specified in IAS 24 "Related Party Disclosures".
52 weeks 53 weeks
ended ended 3
2 October October
2022 2021
GBP 000 GBP 000
-------------------------------------------- ----------- ---------
Salaries and other short term employee
benefits 641 716
Employers national insurance contributions 83 88
Post-employment benefits 11 15
-------------------------------------------- ----------- ---------
735 819
-------------------------------------------- ----------- ---------
During the period, the Company entered the following trading
transactions with related parties
52 weeks ended 53 weeks ended
2 October 2022 3 October 2021
Purchase Sale Purchase Sale
of Goods of Goods of Goods of Goods
/ Services / Services / Services / Services
GBP GBP GBP
GBP 000 000 000 000
SCP Newbury Manor Limited 15 - 15 -
Osmond Capital Limited 198 - 200 -
The Great House at Sonning
Limited 774 - 657 -
CCO Cygnet Limited 888 - 748 -
1,875 - 1,620 -
============ ============ ====================== ==============
The following amounts were outstanding at the statement of
financial position date:
2 October 2022 3 October 2021
Amounts Amounts Amounts Amounts
owed to owed by owed to owed
related related related by related
parties parties parties parties
GBP
GBP 000 GBP 000 GBP 000 000
The Great House at Sonning
Limited - - 1 53
Rare Bird Hotels Limited - - - 119
CCO Cygnet Limited 207 - - -
Mudlark Hotels Limited - 396 - -
207 396 1 172
SCP Newbury Manor Limited, Osmond Capital Limited, The Great
House at Sonning Limited, Rare Bird Hotels Limited, CCO Cygnet
Limited and Mudlark Hotels Limited are related parties of the
Company because they have common shareholders with controlling
influence with the Company.
Sales and purchases of goods and services between the related
parties were made at market prices discounted to reflect the
relationships between the parties.
The amounts outstanding are unsecured and will be settled in
cash. No guarantees have been given or received. No provisions have
been made for doubtful debts in respect of the amounts owed by
related parties.
28 Controlling party
The ultimate controlling party of the Company is H E M
Osmond.
29 Post balance sheet events
VEL Property Holdings Limited funding
Within current liabilities (note 20) is a deep discounted bond
instrument with a nominal value of GBP2,791,000 and a final
redemption date of 14 January 2023. In January 2023, this was
replaced by a new deep discounted bond instrument with a nominal
value of GBP2,902,000 and a final redemption date of 14 July
2023.
Various Eateries Trading Limited funding
Within current liabilities (note 20) is a deep discounted bond
instrument with a nominal value of GBP10,001,000 and a final
redemption date of 15 April 2023. In February 2023, this was
replaced by a new deep discounted bond instrument with a nominal
value of GBP10,802,000 and a final redemption date of 15 April
2024.
30 Contingent liabilities
Authorised Guarantee Agreements
There are 8 (2021: 9) previously operated sites that have been
disposed of via assignment of lease and include Authorised
Guarantee Agreements ('AGAs') as part of the assignment
arrangement. There is a risk that the sites would be returned if
the assigned leaseholders were to default on their contractual
obligations with their respective landlords, the risk of which was
heightened as a result of the coronavirus (Covid-19) outbreak. The
total annual rental cost for these sites is GBP559,000, of which
GBP357,000 (2021: GBP357,000) has been provided for (see note 22).
The average remaining lease length is 6 years.
CJRS claim
The Group made material claims under the CJRS schemes in order
to support the business through the pandemic. Given multiple
changes to the rules governing the schemes, as well as the degree
of complexity in the various rules, the Group undertook an external
review of past claims to confirm their validity. The directors are
of the opinion that claims made to date are valid and materially
correct and so do not consider the likelihood of material outflow
as a result of this review to be probable.
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END
FR SEUEFWEDSEIE
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February 28, 2023 02:00 ET (07:00 GMT)
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