RNS Number:5421T
Coffee Republic PLC
22 December 2003
FOR IMMEDIATE RELEASE 22 December 2003
COFFEE REPUBLIC PLC
INTERIM RESULTS FOR THE SIX MONTHS TO 28 SEPTEMBER 2003
Chairman's Statement
Introduction
The first half has seen significantly narrower losses in comparison with the
same period last year as the impact of the restructuring takes effect. We are
pleased to announce that shareholders approved the placing and open offer at the
end of November raising, in aggregate, #2.03 million before expenses. The funds
raised ensure our financial stability for the foreseeable future, and provide
the platform to refurbish the estate and enhance the food offering in
association with the Deli roll-out.
Interim Results
Sales for the first half fell as expected by 26% to #11.4 million (2002: #15.4
million) following the planned closure of non-core bars. Despite testing market
conditions our continuing bars delivered a stable performance for the six months
experiencing a marginal decline in like-for-like sales of 0.9%.
The operating loss before exceptional items narrowed to #0.9 million (2002: #1.5
million) as a result of an improvement in gross margin percentage of 1.5
percentage points and tight cost control reducing central costs. The net loss
significantly narrowed to #1.0 million (2002: #3.9 million).
Current Trading
With regards to recent trading, subdued retail sales on the high street and the
uncertainty over Coffee Republic's future, which was only lifted following the
completion of the recent fundraising, had an adverse effect on trading resulting
in like-for-like sales from continuing bars 2.5% negative for the year to date.
Restructuring
Our estate rationalisation is moving ahead on plan. We disposed of 10 bars
during the period reaching 72 trading bars as at 30 September 2003 compared to
104 as at 30 September 2002. Subsequently, we have disposed of a further 5 and
currently have 67 bars. Based on our target of 50 core continuing bars, we have
17 disposal bars remaining, 10 of which are either under offer or have been
exchanged.
As stated before, the overhead and other cost savings derived from the
rationalisation programme are now taking effect and have assisted in reducing
the losses substantially from the previous period.
Cashflow and Financing
Cashflow from operating activities improved to #0.3 million (2002: #0.1 million)
as a result of the cost saving measures and active management of working
capital. Therefore, net debt decreased by #0.3 million to #3.2 million.
As part of the fundraising we renegotiated a new 5 year #3 million bank facility
with Barclays Bank plc.
Board
With the financial restructuring largely complete, Richard Bingham, will be
leaving the board at the end of the calendar year. I would like to thank
Richard for his support and invaluable contribution to the restructuring over
the past 18 months. The company will look to strengthen the board in the
future.
Outlook
With new equity and banking facilities, the financial stability of the business
has seen a substantial improvement. Considerable management time has been
invested in securing the refinancing and following its completion the renewed
stability will allow management and staff to focus on a number of key
imperatives for the business.
First and foremost efforts are being made to re-invigorate the continuing coffee
bar estate and improve sales performances. In addition, we will continue to
rationalise the estate and expect to approach our desired profitable core of 50
continuing bars within the next twelve to eighteen months.
The two trial delis in Baker Street and Exchange Square in the City of London
continue to produce encouraging results. We are now entering the final phase of
the deli offering's testing and evolution into a differentiated and profitable
food-led proposition. We expect to commence conversion of coffee bars to delis
in Spring 2004 and will initially roll-out the concept on a prudent and measured
basis.
The Company has now emerged from a period of uncertainty and can use the stable
platform created to execute its food-led strategy.
Bobby Hashemi
Chairman 22 December 2003
For further information:
Coffee Republic
Bobby Hashemi / Simon Drysdale 020 7033 0600
Buchanan Communications
Tim Thompson / Nicola Cronk 020 7466 5000
Unaudited consolidated profit and loss account
For the period ended 28 September 2003
Six months Six months Year to
to 28 Sept to 29 Sept
2003 2002 30 March
2003
#'000 #'000 #'000
Turnover 11,414 15,415 30,302
Cost of sales (11,894) (16,486) (32,736)
Gross Profit/(Loss) (480) (1,071) (2,434)
Administrative expenses (408) (861) (1,797)
Operating loss before exceptional items (888) (1,524) (3,854)
Exceptional items - (408) (377)
Operating loss (888) (1,932) (4,231)
Exceptional items
-loss on disposal of fixed assets - (1,898) (5,386)
Loss on ordinary activities (888) (3,830) (9,617)
Interest payable and similar charges (103) (99) (211)
Interest receivable 1 - 8
Loss on ordinary activities before and after taxation (990) (3,929) (9,820)
Loss per ordinary share
Basic and diluted (0.44)p (1.75)p (4.37)p
Unaudited consolidated balance sheet
as at 28 September 2003
Proforma 28 Sept 29 Sept 30 March
2003
reflecting 2003 2002
Refinancing #'000 #'000 #'000
(See note 4)
Fixed assets
Intangible assets 193 193 217 205
Tangible assets 8,630 8,630 15,365 9,201
8,823 8,823 15,582 9,406
Current assets
Stocks 134 134 246 156
Debtors 1,210 1,210 1,324 1,672
Cash at bank and in hand 1,815 87 125 102
3,159 1,431 1,695 1,930
Creditors: amounts falling due
within one year (4,935) (4,935) (6,375) (4,621)
Net current assets/ (1,776) (3,504) (4,680) (2,691)
(liabilities)
Total assets less current 7,047 5,319 10,902 6,715
liabilities
Creditors: amounts falling due
after more than one year (2,898) (2,898) (1,750) (2,898)
Provision for liabilities and (794) (794) (644) (1,200)
charges
Net Assets 3,355 1,627 8,508 2,617
Capital and Reserves
Called-up share capital 11,431 11,228 11,228 11,228
Share premium 19,324 17,799 17,799 17,799
Profit and loss account (27,400) (27,400) (20,519) (26,410)
Shareholders' funds - equity 3,355 1,627 8,508 2,617
Unaudited consolidated cash flow statement
for the period ended 28 September 2003
Six months Six months Year to
to 28 Sept to 29 Sept 30 March
2003 2002 2003
Note #'000 #'000 #'000
Cash flow from operating activities 3 335 116 (2,337)
Returns on investments
and servicing of finance (102) (99) (203)
Capital expenditure
and financial investment 114 (507) 1,522
Cash outflow before the use of liquid
resources and financing
347 (490) (1,018)
Financing - (77) (154)
Increase/(Decrease) in cash
in the period 347 (567) (1,172)
Reconciliation of net cash flow to movement in net debts
Increase/(decrease) in cash in the period 347 (567) (1,172)
Cash from decreased/(increased) debt - 77 154
Changes in net funds
resulting from cash flows 347 (490) (1,018)
Movement in net funds 347 (490) (1,018)
Net funds at the beginning of the period (3,521) (2,503) (2,503)
Net (debt)/funds at the end of the period (3,174) (2,993) (3,521)
NOTES
1. Basis of preparation
The results for the six months ended 28 September 2003 have been prepared on the
basis of the accounting policies set out in the consolidated financial
statements at 30 March 2003. The comparatives for the year ended 30 March 2003
have been extracted from the audited consolidated financial statements for that
period.
2. Loss per ordinary share
The calculation of the loss per share for the six months ended 28 September 2003
is based upon a loss of #990,000 (2002: loss of #3,929,000) and the weighted
average number of shares of 224,565,304 (2002: 224,565,304).
3. Reconciliation of operating loss to net cash inflow from
operating activities
Six months Six months Year to
to 28 Sept to 29 Sept
2003 2002 30 March
2003
#'000 #'000 #'000
Operating loss (888) (1,932) (4,231)
Depreciation 712 1,576 2,858
Amortisation 12 12 24
Decrease in stocks 21 56 146
Decrease/in debtors 461 913 565
Increase/(Decrease) in creditors 676 (78) (1,107)
Utilisation of impairment provision (253) - -
Utilisation of provision
for liabilities and charges (406) (431) (592)
Net cash inflow/(outflow)
from operating activities 335 116 (2,337)
4. Proforma Balance Sheet
At the end of November 2003 the company raised #2,032,000 comprising #1,882,000
raised pursuant to a placing and open offer and #150,000 from a further placing,
raising net funds of #1,728,000 after expenses. A proforma unaudited balance
sheet to illustrate how the placings and open offer might have affected the net
assets of the Group had it occurred on 28 September 2003 is shown on page 5.
A reconciliation of the balance sheet as at 28 September 2003 to the proforma
balance sheet is show below:
28 Sept 2003 Issue of Proforma
Shares reflecting
#'000 refinancing
Fixed assets
Intangible assets 193 193
Tangible assets 8,630 8,630
8,823 8,823
Current assets
Stocks 134 134
Debtors 1,210 1,210
Cash at bank and in hand 87 1,728 1,815
1,431 1,728 3,159
Creditors: amounts falling
due within one year (4,935) (4,935)
Net current assets/(liabilities) (3,504) 1,728 (1,776)
Total assets less current liabilities 5,319 1,728 7,047
Creditors: amounts falling
due after more than one year (2,898) (2,898)
Provision for liabilities and charges (794) (794)
1,627 1,728 3,355
Financed by
Called-up share capital 11,228 203 11,431
Share premium 17,799 1,525 19,324
Profit and loss account (27,400) (27,400)
Shareholders' funds - equity 1,627 1,728 3,355
5. Financial Information
The financial information set out above does not constitute statutory accounts
within the meaning of section 240 of the Companies Act 1985. The financial
information for the year ended 30 March 2003 has been extracted from the audited
financial statements for that period, which have been filed with the Registrar
of Companies and contain an unqualified auditor's report.
Copies of the Annual Report and Accounts and Interim Report are available at the
group's head office at Ground Floor, 109-123 Clifton Street, London, EC2A 4LD
and the registered office at 50 Lothian Road, Festival Square, Edinburgh, EH3
9WJ. In addition, copies of the Interim Report can be downloaded from
www.coffeerepublic.co.uk/interim-report-2003.pdf .
This information is provided by RNS
The company news service from the London Stock Exchange
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