TIDMCOM
RNS Number : 2666K
Comptoir Group PLC
21 April 2020
21 April 2020
Comptoir Group plc
("Comptoir", the "Group" or the "Company")
Full Year audited results for the financial year ended 31
December 2019
Financial highlights
For the year ended 31 December 2019
-- Group revenue reduced 2.7% to GBP33.4m (2018: GBP34.3m)
-- Gross profit increased 0.6% to GBP24.9m (2018: GBP24.7m)
-- IFRS loss after tax of GBP0.67m (2018: GBP0.76m loss)
-- Adjusted EBITDA* of GBP5.27m (2018: GBP4.97m)
-- Net cash and cash equivalents at the period end of GBP5.1m (2018: GBP4.6m)
-- Loss per share of 0.54p (2018: 0.62p loss per share)
Operational highlights
-- One 'owned' site opening and two franchised openings (2018:
two 'owned' restaurant openings and one franchised opened)
o Comptoir Westfield, Shepherd's Bush re-opened in May 2019
following a five-month closure, as a brand new repositioned site
following the extensive centre redevelopment
o Two franchised sites opened in the year
-- Three site exits
-- 30 restaurants (24 owned and 6 franchise) trading as at 31
December 2019 (2018: 31 restaurants; 27 owned and 4 franchise).
Chaker Hanna, Chief Executive Officer, commented:
"Despite the challenging economic climate, I am pleased to
report that trading for the full year has been in line with Board
expectations.
"It has been a year of consolidation witnessing continued
momentum on operational cost efficiency improvements, alongside a
cautious and selective approach to investment.
"A strong balance sheet and further growth in our cash position
will stand us in good stead to endure the challenges we are all now
facing from the COVID-19 virus. The directors believe that the
business is well positioned to deliver again once we emerge from
the other side of this crisis".
*Adjusted EBITDA is calculated excluding the impact of a
GBP0.05m share-based payment charge (2018 - GBP0.03m);
depreciation, amortisation and impairment of assets of GBP4.2m
(2018 - GBP4.1m); GBP0.02m restaurant pre and post opening costs
(2018 - GBP0.4m); losses on the disposal of fixed assets of GBP0.3m
(2018: GBPnil); and abandoned project costs of GBP0.16m (2018:
GBPnil). The Group has applied IFRS16 leases that results in the
restatement of the previous financial statements.
Enquiries:
Comptoir Group plc
Chaker Hanna, CEO Tel: +44 (0)20 7486 1111
M ark Carrick, CFO Tel: +44 (0)20 7317 0409
Canaccord Genuity (NOMAD and
Broker) Tel: +44 (0)20 7523 8150
Bobbie Hilliam
Georgina McCooke
Chairman's statement
COVID-19 Update
Since the financial year end the outlook for the UK and global
economy has become increasingly uncertain due to the spread of
COVID-19. The Group's key priority at these unprecedented times is
the health and safety of our employees, customers and business
partners.
Following guidance provided by the UK Government, the Board took
the decision to fully close all restaurants from 19 March 2020
until further notice. Since this closure, the situation has
continued to rapidly evolve, culminating in the UK Government
effecting complete lockdown measures, including enforced closure of
restaurants and leisure sites.
The Board's focus during this closure period has been on taking
all appropriate measures to reduce the financial impact on the
Group . Whilst the current impact is significant and the exact
longer-term effects of the situation are unknown, the Company is
presently in a reasonably healthy cash position with minimal bank
debt to service. The Directors, in their duty to shareholders,
continue to make every effort to protect this position. Key steps
which are being taken include:
-- deferral of all rent payments due for the March to June
quarter to assist with cashflow; negotiations with landlords
continue in this area;
-- postponement of all but essential capital expenditure (where
there is a legal or health and safety requirement to do so),
including postponement of a planned new site opening to the last
quarter of this year, in order to preserve the financial position
of the group;
-- implementation of additional cash management procedures to
ensure only essential framework of business support is in place,
limiting expenditure and helping ensure protection of the cash
position; and
-- a significant reduction in directors' remuneration packages.
The Board also warmly welcomes the Government support measures
for the hospitality industry, in particular the 12-month business
rates relief, which is expected to save the business c.GBP1.4m over
the next 12 months. The Company is also seeking to access funding
through the Government's Coronavirus Job Retention Scheme ("CJRS")
to contribute to salary costs of furloughed employees. Both of
these measures will have a positive impact on cashflow during the
year.
Current outlook
We find ourselves in a period of unprecedented uncertainty with
the impact from the low consumer confidence previously seen across
the sector now very much taking second place to the more immediate
unchartered territory coming from the societal impact of
COVID-19.
Despite this and up until the direct impact on trading from
COVID-19 in early March, t he Board is pleased to announce that the
Group has once again demonstrated its resilience to deliver during
a continued challenging and uncertain trading environment.
Overview of results
Group revenue in 2019 reduced by GBP0.93m on the previous year,
however, this is due to three sites affected by temporary extended
closures in 2019; Westfield Shepherd's Bush due to a five-month
closure for major redevelopment of the shopping complex and two
extended insurance-related refurbishments at Kingston and Chelsea.
The comparative income for these three temporary site closures in
2019 amounted to GBP1.4m of 'lost' revenue over the same periods in
2018.
Despite this, profit remained in line with expectations and the
Company ended the year with a relatively healthy cash balance. This
has been achieved despite the challenging trading environment
resulting from the well-publicised cost pressures within the
industry and increasing general uncertainty in the market.
In line with previous years, the Board does not recommend the
payment of any dividend at this time as it is anticipated that all
available funds will be required to ensure working capital
requirements are met over the foreseeable future.
In the current climate we do not intend to continue with our
internal investment plans. As we are not currently financially
committed to any intended projects, we will defer capital
expenditure until more stable conditions return.
Growth in operations
The Group maintained a cautious approach to new site openings in
2019 with only one owned site re-opening in May 2019, being the
repositioned Comptoir restaurant in Westfield, Shepherd's Bush. In
addition, two new franchised Comptoir restaurants were opened at
Ashford and Dubai Airport with our franchise partner HMS Host.
Three sites closed over the year; specifically, the successful
early exits from the unprofitable Shawa Oxford site in March 2019
and Comptoir John Lewis, Oxford Street in September 2019, one other
restaurant reaching the end of its lease; Shawa Westfield in June
2019. The Group now operates 30 restaurants, including six
franchised sites.
Although Heads of Terms have been agreed on one new owned site
to be opened in 2020, this has been delayed until the final quarter
of 2020 due to the current market climate.
People
We maintain strong governance standards through the Board, which
meets on a regular basis to ensure we fulfil our corporate
governance ambitions.
I am very proud of our operational and support teams who day-in
day-out aim to consistently deliver the best possible experience
for all of our guests, both in the restaurants and those serviced
by our delivery partners with our premium quality menu
offering.
Our team members are focussed on ensuring our guests experience
an exceptional service and consistent quality in our restaurants
and I am very proud to be a part of their journey.
We are facing an unprecedented worldwide situation, and
therefore we are now concentrating all our resources on tackling
the challenges facing our business. The Board are confident that
measures are in place to help ensure the health of the business in
order that it is well placed to deliver again once the immediate
COVID-19 impact has abated and we are able to start again on the
road to return to a degree of normality. This short-term
uncertainty does not change the Board's confidence in the Group and
its longer term prospects.
Richard Kleiner
Chairman
20 April 2020
Chief Executive's review
For the year ended 31 December 2019
I am pleased to present the Group's results for the year ended
31 December 2019, together with an update on the Group's progress
in respect of its growth strategy. We have maintained our cautious
approach and not added any brand new owned restaurants to the
estate but have opened one re-positioned, owned restaurant and have
added two additional franchise sites to the Group's portfolio.
During the year revenue reduced by 2.7% to GBP33.4m (2018:
GBP34.3m), with adjusted EBITDA (excluding one-off costs incurred
in opening new restaurants and other highlighted items) increasing
by 6.0% to GBP5.27m (2018: GBP4.97m).
Following the extensive redevelopment of Westfield, Shepherd's
Bush, a re-positioned Comptoir opened in May and has performed
exceptionally well, above management expectations, throughout the
period since re-opening. This resulted in an increase of 6% on the
2018 full year revenue position in Comptoir Westfield despite its
five month closure in 2019. The two 2018 restaurant openings in
Birmingham and London Bridge demonstrated accelerated growth during
their first full year of opening, contributing additional sales to
the Group on the prior year.
After adding back non-trading items, including opening costs
totalling GBP0.02m (2018 - GBP0.4m), the adjusted EBITDA for the
Group totalled GBP5.27m (2018: GBP4.97m). The Group recorded a
post-tax loss of GBP0.67m for the year (2018: GBP0.76m loss).
Our strong balance sheet remains de-levered with only GBP0.3m of
bank debt as at 31 December 2019. This gives us scope for assurance
and flexibility to sensibly use free cash to meet working capital
requirements and to help us to sustain our position during the
closure period due to COVID-19.
Review of operations
We continued to feel the industry-wide cost pressures in the
supply chain throughout the year, including the ongoing effect of
the National Living Wage and Apprenticeship Levy. Despite this, the
Group's cost control and operational efficiency across the estate
have been a key focus of management and new sites continue to
perform well financially once they have reached maturity of
trading.
Economic conditions remained challenging in 2019, with
confidence levels remaining subdued due to ongoing uncertainty
around the exact nature of the exit from the European Union and the
economic outlook as a whole. Notwithstanding the current lock-down
and site closures, the general retail sector continues to be
subject to challenges in both high street and shopping centre
footfall which has directly impacted the dining-out sector. Further
pressures include continued rising costs (particularly labour),
input food costs and property-related charges.
Despite these pressures, we have managed to attain EBITDA in
line with our full year expectations.
Momentum in the investment in our people continues to gather
pace with the further introduction of digital technology enabling
online, easy to access training for all our team members from their
first day in the business.
The Group introduced a portal, operated in partnership with
Flow, which accelerates the initial operational statutory
compliance training and further development modules ensuring our
team members operate and provide the safest possible environment to
our guests. Our first tranche of managers have completed their
first year of the internationally accredited external leadership
and management programme and access to other development training
has now been extended to the wider team, supported by funding from
the Apprenticeship Levy contributions.
The head office and operational support team have been based in
the one new office close to London Bridge since February 2019,
having been in three separate locations prior to this. In addition
to the efficiencies this consolidation brings, communication
channels have been enhanced and decision making has been expedited,
enabling further cost synergies across the Group.
Estate development
During the year, there were no additional brand new owned site
openings, however our franchise partner HMS Host opened their
second Comptoir site in the UK in Ashford (September 2019) and we
were delighted to open our first operation in the Middle East with
the Comptoir site in Dubai Airport (December 2019).
In 2019 we took the opportunity to invest in refurbishing some
of our existing restaurants to give a fresh look and innovation
with new designs. This included refurbishments of Chelsea and
Kingston which also involved extensive closures (six months in
total between the two sites) due to insurance-related issues. This
also presented an opportunity to refresh the format of these
restaurants bringing a more intimate dining experience. Our
Comptoir Wigmore Street restaurant also underwent a similar
mini-refurbishment in October 2019 which included a similar
enhanced reformat of the dining area, resulting in an immediate
upside trading benefit from the later evening dining session. This
has resulted in a significant improvement in trading since
re-opening following the completion of the refurbishment. In
addition, two mini-refurbishments have been completed in our two
top end casual dining restaurants, Kenza and Levant located in the
City and West End of London respectively, refreshing the décor with
a result being an enhanced guest experience.
Due to the current unprecedented and extraordinary
macro-economic conditions outside of our control, we have already
invoked exceptional processes within the operation in order to help
protect our employees and guests. Financially the focus is now on
protecting our cash position, even though this will inevitably
result in a restrictive approach to capital expenditure and then
only where there is a legal or health and safety requirement to do
so.
That said, in line with our continued confidence in our Shawa
operation, we are pleased to announce that we have exchanged Heads
of Terms on a new lease for a Shawa restaurant in the Stratford,
Westfield development, although this opening has been postponed
until the last quarter of 2020. The Shawa model involves a
significantly lower level of capital investment due to the smaller
footprint required for a Shawa operation and limited additional
investment as the unit was previously occupied by a food operator.
We still intend to open the new franchise site in Abu Dhabi with
our partner HMS Host, however this will be postponed until further
notice.
Cashflows and financing
Cash generated from operations was GBP5.5m (2018: GBP5.0m),
demonstrating the continued management focus and effectiveness of
tightened working capital management initiatives.
Capital expenditure for the year, which was principally incurred
on the fit-out for the re-opening of the repositioned Comptoir
Westfield, Shepherd's Bush, as well as selective investment in
refurbishment in a number of other sites, totalled GBP1.3m (2018:
GBP2.3m).
Loan and finance lease repayments continued as planned
throughout the year, resulting in total cash outflows of GBP3.8m
(2018: GBP3.7m). This includes GBP3.4m covering the payment of
lease liabilities under IFRS 16 in 2019, against GBP3.1m in 2018.
The Group realised an overall cash inflow of GBP0.5m (2018: GBP1.0m
cash outflow). At the end of the year, the Group had cash and cash
equivalents of GBP5.1m (2018: GBP4.6m).
The Group is currently able to fund the additional further owned
restaurant with its delayed opening in the latter part of 2020 and
to continue to further develop the Group's brand and identity,
whilst maintaining absolute focus on working capital management. We
remain cautious and committed to only invest in sites which fit
within the attributes associated with our most successful
restaurants and that would contribute positively from their first
full year of trading.
Outlook
Currently the Group's focus is on addressing the short and
medium term challenges we face associated with the COVID-19 virus.
This does not change the Board's confidence in the business and its
proposition over the long term. Our focus will continue to be on
ensuring the business is well-placed to continue to deliver once we
emerge from this crisis.
The Board believe the Group's current restaurant estate
continues to have potential for further organic growth through
selective new owned sites and opportunities with our franchise
partners when the right economic conditions return.
Setting the COVID-19 and the related current challenges aside, I
believe our business continues to be well-positioned in the
restaurant sector and can continue to provide our customers with a
unique experience, offering excellent quality, well-priced, healthy
food, with welcoming family hospitality, differentiated to many
other restaurant operations.
Chaker Hanna
Chief Executive Officer
20 April 2020
Strategic Report
For the year ended 31 December 2019
The Directors present their strategic report for the year ended
31 December 2019.
Business model
The Group's principal brand is Comptoir Libanais, which operates
Lebanese and Eastern Mediterranean focused restaurants. The
restaurants seek to offer an all-day dining experience based around
healthy and fresh food in a friendly, colourful and vibrant
environment, which presents value for money. Lebanese and Eastern
Mediterranean food is, in our opinion, a popular current food trend
due to its flavoursome, healthy, low fat, vegetarian and vegan
dishes, which comprise approximately 60% of our menu, as well as
the ability to easily share the food with friends.
We seek to design each Comptoir Libanais restaurant with a bold
and fresh design that is welcoming to all age groups and types of
consumer. Each Comptoir Libanais restaurant has posters and menus
showing an artist's impression of Sirine Jamal al Dine, an iconic
Arabian actress, providing a Middle Eastern café-culture feel.
Shawa is a Lebanese grill-serving lean, grilled meats,
rotisserie chicken, homemade falafel, halloumi and fresh salad,
through a service counter offering, located in high footfall
locations, such as shopping centres.
The average spend per head in 2019 at Comptoir Libanais was
c.GBP16 and the average spend at Shawa was lower c.GBP12, so our
offering is positioned in the affordable or 'value for money'
segment of the UK casual dining market. In addition, our offering
is well-differentiated and faces limited direct competition, in
marked contrast to other areas of the market.
Strategy for growth
Our strategy is to grow our owned-site operations under both the
Comptoir Libanais and Shawa brands. While Comptoir Libanais is
likely to remain the principal focus of our operations, Shawa
provides the opportunity to offer our Lebanese food from a smaller
footprint and therefore create greater flexibility to our roll-out
plans. We have agreed terms on a brand new Shawa site in Westfield,
Stratford and will be aiming to commence trading there by the end
of 2020, subject to ecomomic conditions, footfall and cashflow.
We also believe that there is still considerable potential to
grow the Group's franchised operations and we see this as a
complimentary and relatively low-risk route to extend the presence
of our brands, both within the UK and in overseas territories. 2019
saw the opening of two new franchise sites and this momentum will
continue into 2020 with another new site due to open with our
franchise partner HMS Host in Abu Dhabi Airport, although this will
be delayed as a result of the COVID-19 situation.
The UK food delivery market continues to grow at pace, aided by
increasing technology enabling ease of ordering and quick access to
a wide offering of menus through apps such as UberEats. Following
the one year anniversary of the partnership with UberEats, we
negotiated new multi-platform delivery agreements with both
Deliveroo and UberEats commencing in March 2020 and we feel
confident that this will drive significant further growth across
this channel through direct delivery to our customers, once trading
resumes.
Review of the business and key performance indicators (KPIs)
At this stage in the development of the business the Board
believes that it is more helpful to focus on adjusted EBITDA, which
excludes non-recurring items and costs incurred in connection with
the opening of new restaurants and on this measure, the underlying
earnings of the group in 2019 were GBP5.27m (2018: GBP4.97m).
The Board and management team use a range of performance
indicators to monitor and measure the performance of the business.
However, in common with most businesses, the critical KPIs are
focused on growth in sales and EBITDA and these are appraised
against budget, forecast and last year's achieved levels. Adjusted
EBITDA during the year was 6.0% higher than that of 2018; assisted
by the re-opening of the repositioned Comptoir Westfield restaurant
and the successful openings of the two franchised sites operated by
our partner HMS Host in Ashford and Dubai Airport. 2020 will also
see the upside benefit of having the full year of trading from the
three sites which had temporary but prolonged closures during 2019.
This equated to GBP1.4m comparative lost sales for these three
sites in 2019 based on the trading across the comparative period in
the prior year.
In terms of non-financial KPIs, the standard of service provided
to customers is monitored via the scores from a programme of
regular monthly "mystery diner" visits to our restaurants carried
out by HGem and we are pleased to report a further increase in
average visitor scores in 2019. This is a clear indication of our
very special family culture, which is focused on delivering
consistently great experiences for our customers. We also use
feedback from health and safety audits conducted by an
external-company (Food Alert) to ensure that critical operating
procedures are being adhered to.
Further explanation of the performance of the business over the
year is provided in the Chairman's Statement and the Chief
Executive's Review.
Principal risks and uncertainties
The Board of Directors ("the Board") has overall responsibility
for identifying the most significant risks faced by the business
and for developing appropriate policies to ensure that those risks
are adequately managed.
The following have been identified as the most significant risks
faced by the Group, however, it should be noted that this is not an
exhaustive list and the Company has policies and procedures to
address other risks facing the business.
Consumer demand
Any weakness in consumer confidence could have an adverse effect
on footfall and customer spend in our restaurants. The
well-publicised and very real threat from COVID-19 is clear
evidence of the serious impact on the hospitality sector and the
wider UK and global economy.
All appropriate measures are in place to reduce the impact of
the current restaurant closures and the subdued trading expected on
re-opening. This includes costs reduction wherever possible, tight
and daily focus on cashflow management, aided by delay of the new
site opening and capex only where required to ensure legal and
health and safety requirements are met. The Board is in discussions
with the Bank and is in the process of applying for additional
funding to maintain liquidity through this period of uncertainty
under the government-backed Coronavirus Business Interruption Loan
Scheme ("CBILS").
Frequent or regular participation in the dining-out market is
afforded by the consumer out of household disposable income.
Macroeconomic factors such as the Coronavirus, employment levels,
interest rates and inflation can impact disposable income and
consumer confidence will dictate their willingness to spend. There
is also an unknown factor as to how consumers' behaviour and
attitude to eating out may change in the immediate aftermath of the
coronavirus when social distancing rules begin to relax.
As indicated above, the core brands within the Group are
positioned in the affordable segment of the casual dining market. A
strong focus on superior and attentive service together with value
added marketing initiatives can help to drive sales when customer
footfall is more subdued. We will also expect additional sales
traction from the delivery channel with the partnerships now
extended across Deliveroo and Uber Eats. This, together with the
strategic location of each of our restaurants, helps to mitigate
the risk of consumer demand to the business.
Input cost inflation
The Group's key input variables are the cost of food and drink
and associated ingredients and staff costs. The continued
progressive increases in the UK National Living Wage and Minimum
Wage rates present a challenge we, alongside our peers and
competitors, must manage.
We aim to maintain an appropriate level of flexibility in our
supplier base so we can work to mitigate the impact of input cost
inflation. Our teams work hard on predictive and responsive labour
scheduling so that our costs are well controlled.
Economic conditions
Previous concerns due to uncertainty around the exact nature and
timing of the planned exit at the end of 2020 from the European
Union are superseded by the COVID-19 situation which, even
following re-opening of restaurants upon removal of lockdown
restrictions, will create a high level of uncertainty and impact
consumer spending. Deterioration in consumer confidence due to
future economic conditions could have a detrimental impact on the
Group in terms of footfall and sales. Continued focus on customer
relations and targeted and adaptable marketing initiatives help the
Group retain and drive sales where footfall declines.
Labour cost inflation
Labour cost pressures which are outside of the control of the
Group, such as auto enrolment pension costs, minimum wage /
National Living wage increases and the Apprenticeship Levy, are
suffered by the Group and its competitors. Labour costs continue to
be regularly monitored and on-going initiatives are used to reduce
the impact of such pressures.
Strategy and execution
The Group's central strategy is still to open additional new
outlets under its core Comptoir Libanais and Shawa brands but to
proceed on a cautious basis. In light of the COVID-19 situation,
the Group will instead be focussed on consolidation of the
operational and financial performance of the existing estate with
selective internal investment to ensure continual refresh and
evolution of the brands.
The Group utilises the services of external property consultants
and continues to develop stronger contacts and relationships with
potential landlords as well as their agents and advisers. However,
despite the additional availability of vacant sites, there will
always be competition for the best sites and the Board will
continue to approach any potential new site with caution and be
highly selective in its evaluation of new sites to ensure that
target levels of return on investment are achieved.
Companies Act s172 Statement
This section serves as our s172 statement and should be read in
conjunction with the whole Strategic Report. s172 of the Companies
Act 2006 requires Directors to take into consideration the
interests of stakeholders in their decision making. The Directors
continue to have regard to the interests of the Company's employees
and other stakeholders including the impact of its activities on
the community, the environment and the Company's reputation when
making decisions. Acting in good faith and fairly between members
the Directors consider what is most likely to promote the success
of the Company for its members long term.
Within the Chairman's Statement, Statement of Corporate
Governance and on our website we describe how the Board operates
and the culture of the business.
Our principle stakeholders are engaged with on a regular basis.
With regards to our shareholders this includes face to face
meetings at least once a year, and we engage in constant dialogue
with our workforce and our suppliers.
Future developments
The Group will continue to explore further opportunities to grow
the Comptoir Libanais brand via franchising with suitable partners,
widening the offer via multi-platform delivery partners and the
broadening of the external catering offering.
On behalf of the Board
Chaker Hanna
Chief Executive Officer
20 April 2020
Statement of Corporate Governance
The Board have elected to adopt the Quoted Companies Alliance
(QCA) Corporate Governance Code in line with the changes under Rule
26 of the AIM Rules for Companies requiring all companies that are
traded on AIM to adopt and comply with a recognised corporate
governance code. Full details of our adoption to the code can be
found at
https://investors.comptoirlibanais.com/corporate-governance/.
Going concern
Uncertainty due to the recent COVID-19 outbreak has been
considered as part of the Group's adoption of the going concern
basis. Trading over recent weeks has been impacted by COVID-19.
Following guidance provided by the UK government, the Board has
taken the decision to close its restaurants until further notice.
The health of our staff and our customers is the Board's highest
priority.
All appropriate measures have been put in place to reduce the
impact on the Group, including cost reduction and refurbishments
and other capital expenditure projects. The Board's latest
forecasts are based on a scenario where the business is closed for
a period of three months to the end of June 2020 with reduced
revenue for the following 6 months with expected sales increasing
gradually until 2021. The Board has factored in a delay in all
non-committed capital expenditure, reduction in variable costs
including staffing and moving to monthly rent payments. In addition
the Government has announced a twelve month business rates holiday
for the hospitality sector.
The Board has also considered the severe but possible downside
scenario of complete closure for a longer period and delayed
re-opening. This continues to be under review given current market
conditions associated with COVID-19. The Group currently has cash
reserves of GBP5.7m and the Board believes that the business has
the ability to remain trading for a period of at least 12 months
from the date of signing of these financial statements. These
financial statements have therefore been prepared on the going
concern basis.
Consolidated statement of comprehensive income
For the year ended 31 December 2019
Notes Year ended Year ended
31 December 31 December
2019 2018
(Restated)
GBP GBP
Revenue 2 33,403,402 34,331,309
Cost of sales (8,547,180) (9,630,294)
Gross profit 24,856,222 24,701,015
Distribution expenses (8,605,186) (9,108,884)
Administrative expenses (16,695,054) (15,148,167)
Other income 2 1,020,090 -
Operating profit 3 576,072 443,964
Finance costs 6 (1,096,462) (1,094,177)
Loss before tax (520,390) (650,213)
Taxation charge 7 (146,573) (108,427)
Loss for the year (666,963) (758,640)
Other comprehensive income - -
Total comprehensive loss for the
year (666,963) (758,640)
---------------------------------- ------ ---------------------------- ----------------------------
Basic loss per share (pence) 8 (0.54) (0.62)
Diluted loss per share (pence) 8 (0.54) (0.62)
---------------------------------- ------ ---------------------------- ----------------------------
Adjusted EBITDA:
Loss before tax - as above (520,390) (650,213)
Add back:
Depreciation 11 4,036,957 3,806,212
Finance costs 6 1,096,462 1,094,177
Impairment of assets 11 129,001 259,205
EBITDA 4,742,030 4,509,381
Share-based payments expense 20 53,963 28,745
Restaurant opening costs 3 18,075 433,506
Loss on disposal of fixed assets 298,022 -
Abandoned project costs 156,849 -
---------------------------- ----------------------------
Adjusted EBITDA 5,268,939 4,971,632
---------------------------------- ------ ---------------------------- ----------------------------
All of the above results are derived from continuing operations.
Loss for the year and total comprehensive loss for the year is
entirely attributable to the equity shareholders of the
Company.
Consolidated balance sheet
At 31 December 2019
Notes 31 December 31 December 1 January
2019 2018 2018
(Restated) (Restated)
GBP GBP GBP
Assets
Non-current assets
Property, plant and equipment 11 11,287,115 11,747,036 11,104,026
Right-of-use assets 11 23,951,079 25,242,211 22,656,729
Intangible assets 10 87,675 87,675 89,961
Deferred tax asset 18 139,588 168,176 148,822
-------------------------------- ------ -------------------- -------------------- --------------------
35,465,457 37,245,098 33,999,538
Current asset
Inventories 13 594,409 706,741 606,652
Trade and other receivables 14 2,202,974 1,858,442 1,374,902
Cash and cash equivalents 5,076,610 4,624,673 5,627,341
-------------------------------- ------ -------------------- -------------------- --------------------
7,873,993 7,189,856 7,608,895
Total assets 43,339,450 44,434,954 41,608,433
-------------------------------- ------ -------------------- -------------------- --------------------
Liabilities
Current liabilities
Borrowings 16 (261,611) (427,179) (669,778)
Trade and other payables 15 (5,015,604) (4,601,376) (3,752,509)
Lease liabilities 27 (2,481,471) (2,173,730) (2,950,644)
Current tax liabilities (184,125) (158,024) (148,163)
-------------------------------- ------ -------------------- -------------------- --------------------
(7,942,811) (7,360,309) (7,521,094)
Non-current liabilities
Borrowings 16 (55,735) (315,953) (706,711)
Provisions for liabilities 17 (438,570) (60,892) (48,036)
Lease liabilities 27 (24,170,903) (25,351,272) (21,623,714)
Deferred tax liability 18 (170,283) (172,380) (118,772)
-------------------------------- ------ -------------------- -------------------- --------------------
(24,835,491) (25,900,497) (22,497,233)
Total liabilities (32,778,302) (33,260,806) (30,018,327)
-------------------------------- ------ -------------------- -------------------- --------------------
Net assets 10,561,148 11,174,148 11,590,106
-------------------------------- ------ -------------------- -------------------- --------------------
Equity
Share capital 19 1,226,667 1,226,667 1,226,667
Share premium 10,050,313 10,050,313 10,050,313
Other reserves 20 82,708 28,745 316,590
Retained losses (798,540) (131,577) (3,464)
-------------------------------- ------ -------------------- -------------------- --------------------
Total equity - attributable
to equity shareholders of the
company 10,561,148 11,174,148 11,590,106
-------------------------------- ------ -------------------- -------------------- --------------------
The financial statements of Comptoir Group PLC (company
registration number 07741283) were approved by the Board of
Directors and authorised for issue on 20 April 2020 and were signed
on its behalf by:
Chaker Hanna
Chief Executive Officer
Consolidated statement of changes in equity
For the year ended 31 December 2019
Notes Share Share Other Retained Total
capital premium reserves losses equity
GBP GBP GBP GBP GBP
At 1 January
2018 - as
previously
reported 1,226,667 10,050,313 316,590 2,539,124 14,132,694
Effect of IFRS
16 adoption - - - (2,228,651) (2,228,651)
Restated
balance at 1
January
2018 1,226,667 10,050,313 316,590 310,473 11,904,043
--------------- ------ ------------------- ------------------ ------------------ ------------------ --------------
Total
comprehensive
loss
Restated loss
for the year - - - (758,640) (758,640)
Transactions
with owners
Share-based
payments 20 - - 28,745 - 28,745
Cancellation
of existing
EMI share
option scheme 22 - - (316,590) 316,590 -
Restated at 31
December
2018 1,226,667 10,050,313 28,745 (131,577) 11,174,148
--------------- ------ ------------------- ------------------ ------------------ ------------------ --------------
Restated
balance at 1
January
2019 1,226,667 10,050,313 28,745 (131,577) 11,174,148
Total
comprehensive
loss
Loss for the
year - - - (666,963) (666,963)
Transactions
with owners
Share-based
payments 20 - - 53,963 - 53,963
At 31 December
2019 1,226,667 10,050,313 82,708 (798,540) 10,561,148
--------------- ------ ------------------- ------------------ ------------------ ------------------ --------------
Consolidated statement of cash flows
For the year ended 31 December 2019
Notes Year ended Year ended
31 December 31 December
2019 2018 (Restated)
GBP GBP
Operating activities
Cash inflow from operations 23 5,654,971 5,314,518
Interest paid (21,730) (41,758)
Tax paid (93,981) (64,312)
Net cash from operating activities 5,539,260 5,208,448
----------------------------------------- ------------- ---------------------- ----------------------
Investing activities
Purchase of property, plant & equipment 11 (1,287,749) (2,279,042)
Net cash used in investing activities (1,287,749) (2,279,042)
----------------------------------------- ------------- ---------------------- ----------------------
Financing activities
Payment of lease liabilities 27 (3,373,788) (3,114,355)
Bank loan repayments 24 (425,786) (633,357)
Net cash used in financing activities (3,799,574) (3,747,712)
----------------------------------------- ------------- ---------------------- ----------------------
Increase/(Decrease) in cash and cash
equivalents 451,937 (818,306)
Cash and cash equivalents at beginning
of year 4,624,673 5,442,979
Cash and cash equivalents at end of
year 5,076,610 4,624,673
----------------------------------------- ------------- ---------------------- ----------------------
Principal accounting policies for the consolidated financial
statements
For the year ended 31 December 2019
Reporting entity
Comptoir Group Plc (the "Company") is a company incorporated and
registered in England and Wales, with a company registration number
of 07741283. The address of the Company's registered office is Unit
2, Plantain Place, Crosby Row, London Bridge, SE1 1YN. The
consolidated financial statements of the Company for the year ended
31 December 2019 comprise of the Company and its subsidiaries
(together referred to as the "Group").
Statement of compliance
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards and its
interpretations adopted by the International Accounting Standards
Board (IASB), as adopted by the European Union (IFRSs). The parent
company financial statements have been prepared using United
Kingdom Accounting Standards including FRS 102 'The financial
reporting standard applicable in the UK and Republic of Ireland'
and are set out below.
Going concern basis
Uncertainty due to the recent COVID-19 outbreak has been
considered as part of the Group's adoption of the going concern
basis. Trading over recent weeks has been impacted by COVID-19.
Following guidance provided by the UK Government, the Board has
taken the decision to close all of its restaurants until further
notice. The health of our staff and our customers is the Board's
highest priority.
All appropriate measures have been put in place to reduce the
impact on the Group, including cost reduction and refurbishments
and other capital expenditure projects. The Board's latest
forecasts are based on a scenario where the business is closed for
a period of three months to the end of June 2020 with reduced
revenue for the following 6 months with expected sales increasing
gradually until 2021. The Board has factored in a delay in all
non-committed capital expenditure, reduction in variable costs
including staffing and moving to monthly rent payments. In addition
the Government has announced a twelve month business rates holiday
for the hospitality sector.
The Board has also considered the severe but possible downside
scenario of complete closure for a longer period and delayed
re-opening. This continues to be under review given current market
conditions associated with COVID-19. The Group currently has cash
reserves of GBP5.7m and the Board believes that the business has
the ability to remain trading for a period of at least 12 months
from the date of signing of these financial statements.
The events arising as a result of the COVID-19 outbreak has
meant that there are various inherent material uncertainties. Based
on these indications the directors believe that it remains
appropriate to prepare the financial statements on a going concern
basis. However, these circumstances represent a material
uncertainty that may cast significant doubt on the Group and
Company's ability to continue as a going concern and, therefore, to
continue realising their assets and discharging their liabilities
in the normal course of business for the foreseeable future, a
period of not less than 12 months from the date of approving these
financial statements.
Use of non-GAAP profit and loss measures
The Group believes that along with operating profit, the
'Adjusted EBITDA' provides additional guidance to the statutory
measures of the performance of the business during the financial
year. Adjusted profit from operations is calculated by adding back
depreciation, amortisa ti on, impairment of assets, finance costs,
preopening costs and certain non-recurring or non-cash items.
Adjusted EBITDA is an internal measure used by management as they
believe it better reflects the underlying performance of the Group
beyond generally accepted accounting principles.
New or revised Standards and Interpretations
At the date of authorisation of these financial statements, the
following new and revised IFRS Standards and Interpretations have
been adopted in the current year, where applicable to the
Group.
IFRS 16 Leases
IFRS 9 (Amended) Financial Instruments
IFRS 2015 -2018 Cycle Annual improvements
IFRIC 23 Uncertainty over Income Tax
IAS 28 (Amended) Investments in Joint Ventures
IAS 19 (Amended) Employee Benefits
The impact of the adoption of IFRS 16 is discussed in detail
below. The remaining new standards, amendments and interpretations
are effective for the first time for periods beginning on or after
1 January 2019 but have not had a material effect on the Group and
so have not been discussed in detail in the notes to the financial
statements. At the date of authorisation of these financial
statements, the following IFRS Standards and Interpretations, which
have not been applied in these financial statements, were in issue
but not yet effective:
IFRS 3 (Amended) Business combinations
IAS 1 (Amended) Presentation of Financial Statements
IFRS 17 (Revised) Insurance Contracts
It is not practicable to provide a reasonable estimate of the
effect of these standards until a detailed review has been
completed. However, we expect that the standards will not have a
material effect on the financial statements.
The impact of the adoption of the new IFRS Standard IFRS 16
'Leases' is detailed below.
IFRS 16 Leases
IFRS 16 supersedes IAS 17 Leases, IFRIC 4 Determining whether an
Arrangement contains a Lease, SIC-15 Operating Leases-Incentives
and SIC-27 Evaluating the Substance of Transactions Involving the
Legal Form of a Lease. IFRS 16 sets out the principles for the
recognition, measurement, presentation and disclosure of leases and
now requires lessees to account for most leases under a "single
on-balance sheet" model. The Group adopted IFRS 16 using the full
retrospective method of adoption with the date of initial
application of 1 January 2019. The Group elected to use the
transition practical expedient allowing the standard to be applied
only to contracts that were previously identified as leases
applying IAS 17 and IFRIC 4 at the date of initial application.
The Group has elected to not use the recognition exemptions for
lease contracts that, at the commencement date, have a lease term
of 12 months or less and do not contain a purchase option ('short
term leases'), and lease contracts for which the underlying asset
is of low value ('low-value assets'). Therefore, any short-term
leases and low-value assets have been included in the values.
The Group has lease contracts for various properties. Before the
adoption of IFRS 16, the Group classified each of its leases (as
lessee) at the inception date as an operating lease. The leased
property was not capitalised and the lease payments were recognised
as rent expense in the statement of profit or loss on a
straight-line basis over the lease term. Any prepaid rent and
accrued rent were recognised under Prepayments and Trade and other
payables, respectively.
Upon adoption of IFRS 16, the Group applied a single recognition
and measurement approach for all leases in which it is the lessee,
except for short-term leases and leases of low-value assets. The
Group recognised lease liabilities to make lease payments and
right-of-use assets representing the right to use the underlying
assets.
In accordance with the full retrospective method of adoption,
the Group applied IFRS 16 at the date of initial application as if
it had already been effective at the commencement date of existing
lease contracts.
Accordingly, the comparative information in the consolidated
financial statements for the year ended 31 December 2018 has been
restated. The effect of adoption IFRS 16 is as follows:
Impact on the statement of profit or loss for the year ended 31
December 2018:
Notes As previously IFRS 16 As Restated
reported adjustment
GBP GBP GBP
Revenue 2 34,331,309 - 34,331,309
Cost of sales (9,630,294) - (9,630,294)
Gross profit 24,701,015 - 24,701,015
Distribution expenses (9,108,884) - (9,108,884)
Administrative expenses (15,757,252) 609,085 (15,148,167)
Operating profit 3 (165,121) 609,085 443,964
Finance costs 6 (41,758) (1,052,419) (1,094,177)
Loss before tax (206,879) (443,334) (650,213)
Taxation charge 7 (108,427) - (108,427)
Loss for the year (315,306) (443,334) (758,640)
Other comprehensive income - - -
Total comprehensive loss
for the year (315,306) (443,334) (758,640)
---------------------------- ------ ----------------- ------------------- ---------------
Impact on the statement of financial position as at 3 1 December
2018 :
As previously IFRS 16 As Restated
reported adjustment
GBP GBP GBP
Assets
Non-current assets
Property, plant and equipment 11 11,747,036 - 11,747,036
Right-of-use assets 11 - 25,242,211 25,242,211
Intangible assets 10 889,828 (802,153) 87,675
Deferred tax asset 18 168,176 - 168,176
------------------------------- --- -------------- ------------------------ -----------------------
12,805,040 24,440,058 37,245,098
Current asset
Inventories 13 706,741 - 706,741
Trade and other receivables 14 2,550,223 (691,781) 1,858,442
Cash and cash equivalents 4,624,673 - 4,624,673
------------------------------- --- -------------- ------------------------ -----------------------
7,881,637 (691,781) 7,189,856
Total assets 20,686,677 23,748,277 44,434,954
------------------------------- --- -------------- ------------------------ -----------------------
Liabilities
Current liabilities
Borrowings 16 (427,179) - (427,179)
Trade and other payables 15 (5,706,116) 1,104,740 (4,601,376)
Lease liabilities 27 - (2,173,730) (2,173,730)
Current tax liabilities (158,024) - (158,024)
------------------------------- --- -------------- ------------------------ -----------------------
(6,291,319) (1,068,990) (7,360,309)
Non-current liabilities
Borrowings 16 (315,953) - (315,953)
Provisions for liabilities 17 (60,892) - (60,892)
Lease liabilities 27 - (25,351,272) (25,351,272)
Deferred tax liability 18 (172,380) - (172,380)
------------------------------- --- -------------- ------------------------ -----------------------
(549,225) (25,351,272) (25,900,497)
Total liabilities (6,840,544) (26,420,262) (33,260,806)
------------------------------- --- -------------- ------------------------ -----------------------
Net assets 13,846,133 (2,671,985) 11,174,148
------------------------------- --- -------------- ------------------------ -----------------------
Equity
Share capital 19 1,226,667 - 1,226,667
Share premium 10,050,313 - 10,050,313
Other reserves 20 28,745 - 28,745
Retained losses 2,540,408 (2,671,985) (131,577)
------------------------------- --- -------------- ------------------------ -----------------------
Total equity - attributable
to equity shareholders
of the company 13,846,133 (2,671,985) 11,174,148
------------------------------- --- -------------- ------------------------ -----------------------
Impact on the statement of cash flows for the year ended 31
December 2018 :
As previously IFRS 16 adjustment As Restated
reported
GBP GBP GBP
Operating activities
Cash inflow from operations 23 2,200,163 3,114,355 5,314,518
Interest paid (41,758) - (41,758)
Tax paid (64,312) - (64,312)
Net cash from operating activities 2,094,093 3,114,355 5,208,448
------------------------------------ --- -------------- ------------------- -------------
Investing activities
Purchase of property, plant
& equipment 11 (2,279,042) - (2,279,042)
---
Net cash used in investing
activities (2,279,042) (2,279,042) (2,279,042)
------------------------------------ --- -------------- ------------------- -------------
Financing activities
Payment of lease liabilities 27 - (3,114,355) (3,114,355)
Bank loan repayments 24 (633,357) - (633,357)
---
Net cash used in financing
activities (633,357) (3,114,355) (3,747,712)
------------------------------------ --- -------------- ------------------- -------------
Increase/(Decrease) in cash
and cash equivalents (818,306) - (818,306)
Cash and cash equivalents
at beginning of year 5,627,341 - 5,627,341
Cash and cash equivalents
at end of year 4,624,673 - 4,624,673
------------------------------------ --- -------------- ------------------- -------------
Significant judgements and estimates
The preparation of financial statements in conformity with IFRS
requires management to make judgments, estimates and assumptions
that affect the application of policies and reported amounts of
assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the
judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. The resulting accounting
estimates may differ from the related actual results.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future
periods if the revision affects both current and future
periods.
In the process of applying the Group's accounting policies,
management has made a number of judgments and estimations of which
the following are the most significant. The estimates and
assumptions that have a risk of causing material adjustment to the
carrying amounts of assets and liabilities within the future
financial years are as follows:
Depreciation, useful lives and residual values of property,
plant & equipment
The Directors estimate the useful lives and residual values of
property, plant & equipment in order to calculate the
depreciation charges. Changes in these estimates could result in
changes being required to the annual depreciation charges in the
statement of comprehensive incomes and the carrying values of the
property, plant & equipment in the balance sheet.
Impairment of assets
The Group assesses at each reporting date whether there is an
indication that an asset may be impaired. If any such indication
exists, or when annual impairment testing for an asset is required,
the Group makes an estimate of the asset's recoverable amount. An
asset's recoverable amount is the higher of an asset's or
cash-generating unit's fair value less costs to sell and its value
in use and is determined for an individual asset, unless the asset
does not generate cash inflows that are largely independent of
those from other assets or groups of assets.
Where the carrying amount of an asset exceeds its recoverable
amount, the asset is considered impaired and is written down to its
recoverable amount. In assessing value in use, the estimated future
cash flows are discounted to their present value of money and the
risks specific to the asset. Impairment losses of continuing
operations are recognised in the profit or loss in those expense
categories consistent with the function of the impaired asset.
An impairment of assets of GBP129,001 (2018 - GBP259,205) was
required for the year ended 31 December 2019.
Leases
The Group has estimated the lease term of certain lease
contracts in which they are a lessee, including whether they are
reasonably certain to exercise lessee options. The incremental
borrowing rate used to discount lease liabilities has also been
estimated at 4%. This is assessed as the rate of interest that
would be payable to borrow a similar about of money for a similar
length of time for a similar right-of-use asset.
Significant accounting policies
The accounting policies set out below have been applied
consistently to all periods presented in the historical
consolidated financial statements, unless otherwise indicated.
(a) Basis of preparation
These consolidated financial statements for the year ended 31
December 2019 are prepared in accordance with IFRS.
The financial statements are presented in Pound Sterling (GBP),
which is both the functional and presentational currency of the
Group and Company. All amounts are rounded to the nearest pound,
except where otherwise indicated.
The Group and Parent Company financial statements have been
prepared on the historical cost convention as modified for certain
financial instruments, which are stated at fair value. Non-current
assets are stated at the lower of carrying amount and fair value
less costs to sell.
(b) Basis of consolidation
These financial statements consolidate the financial statements
of the Company and all of its subsidiary undertakings drawn up to
31 December 2019.
Subsidiaries are entities controlled by the Company. Control
exists when the Company has the power, directly or indirectly, to
govern the financial and operating policies of an entity so as to
obtain benefits from its activities. In assessing control,
potential voting rights that presently are exercisable or
convertible are taken into account, regardless of management's
intention to exercise that option or warrant. The financial
statements of subsidiaries are included in the consolidated
financial statements from the date that control commences until the
date the control ceases.
The cost of an acquisition is measured as the fair value of the
assets given, equity instruments issued and liabilities incurred or
assumed at the date of exchange, plus costs directly attributable
to the acquisition. Identifiable assets acquired and liabilities
and contingent liabilities assumed are measured initially at their
fair values at the acquisition date, irrespective of the extent of
any minority interest. The excess of the cost of acquisition over
the fair value of the identifiable net assets acquired is recorded
as goodwill.
All intra-group balances, transactions, income and expenses and
profits and losses resulting from intra-group transactions are
eliminated fully on consolidation. The gain or loss on disposal of
a subsidiary company is the difference between net disposals
proceeds and the Group's share of its net assets together with any
goodwill and exchange differences.
(c) Foreign currency translation
Functional and presentational currency
Items included in the financial results of each of the Group
entities are measured using the currency of the primary economic
environment in which the entities operate (the functional
currency). The consolidated financial statements are presented in
Pounds Sterling ("GBP") which is the Company's functional and
operational currency.
Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year
end exchange rates of monetary assets and financial liabilities
denominated in foreign currencies are recognised in the statement
of comprehensive income.
(d) Financial instruments
Financial assets and financial liabilities are measured
initially at fair value plus transactions costs. Financial assets
and financial liabilities are measured subsequently as described
below.
Financial assets
The Group classifies its financial assets as 'loans and
receivables'. The Group assesses at each balance sheet date whether
there is objective evidence that a financial asset or a group of
financial assets is impaired.
Loans and receivables are non-derivative financial assets with
fixed and determinable payments that are not quoted in an active
market. They are included in current assets, except for maturities
greater than 12 months after the statement of financial position
date, which are classified as non-current assets. Receivables are
classified as 'trade and other receivables' and loans are
classified as 'borrowings' in the statement of financial
position.
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method, less provision for impairment. After initial
recognition loans and receivables are carried at amortised cost
using the effective interest rate method less any allowance for
impairment. Gains and losses are recognised in the income statement
when the loans and receivables are derecognised or impaired, as
well as through the amortisation process.
A provision for impairment of trade receivables is established
when there is objective evidence that the Group will not be able to
collect all amounts due according to the original terms of the
receivables. Significant financial difficulty, high probability of
bankruptcy or a financial reorganisation and default are considered
indicators that the trade receivable is impaired. The amount of the
provision is the difference between the asset's carrying amount and
the present value of the estimated future cash flows discounted at
the original effective interest rate.
The loss is recognised in the income statement. When a trade
receivable is uncollectable, it is written off against the
allowance account for trade receivables. Subsequent recoveries of
amounts previously written off are credited to the statement of
comprehensive income.
Financial assets are derecognised when the contractual rights to
the cash flows from the financial asset expire, or when the
financial asset and all substantial risks and rewards are
transferred.
Financial liabilities
The Group's financial liabilities include trade and other
payables.
Trade payables are recognised initially at fair value less
transaction costs and subsequently measured at amortised cost using
the effective interest method ("EIR" method).
Amortised cost is calculated by taking into account any discount
or premium on acquisition and fees or costs that are an integral
part of the EIR. The EIR amortisation is included in finance costs
in the statement of comprehensive Income.
A financial liability is derecognised when it is extinguished,
discharged, cancelled or expires.
(e) Property, plant and equipment
Items of property, plant and equipment are stated at cost less
accumulated depreciation and impairment losses.
Depreciation
Depreciation is charged to the income statement on a reducing
balance basis and on a straight-line basis over the estimated
useful lives of corresponding items of property, plant and
equipment:
Land and buildings Leasehold Over the length of the lease
Land and buildings Freehold 4% straight line basis
Plant and machinery 15% on reducing balance
Fixture, fittings and equipment 10% on reducing balance
The carrying values of plant and equipment are reviewed at each
reporting date to determine whether there are any indications of
impairment. If any such indication exists, the assets are tested
for impairment to estimate the assets' recoverable amounts. Any
impairment losses are recognized in the statement of comprehensive
income.
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at each statement of financial position
date. Gains and losses on disposals are determined by comparing the
proceeds with the carrying amount and are recognised within the
Statement of Comprehensive Income.
(f) Intangible assets - Goodwill
All business combinations are accounted for by applying the
acquisition method. Goodwill represents amounts arising on
acquisition of subsidiaries, associates and joint ventures.
Goodwill represents the difference between the cost of the
acquisition and the fair value of the net identifiable assets
acquired.
Goodwill is stated at cost less any accumulated impairment
losses. Goodwill is allocated to cash generating units and is
formally tested for impairment annually, thus is not amortised. Any
excess of fair value of net assets over consideration on
acquisition are recognised directly in the income statement.
(g) Inventories
Inventories are stated at the lower of costs and net realisable
value. Cost comprises direct materials, and those direct overheads
that have been incurred in bringing the inventories to their
present location and condition.
Net realisable value is the estimated selling price less all
estimated costs of completion and costs to be incurred in
marketing, selling and distribution.
(h) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, cash at bank,
deposits held at call with banks and other short-term highly liquid
investments with original maturities of three months or less. Bank
overdrafts that are repayable on demand are included within
borrowings in current liabilities on the balance sheet.
For the purpose of the statement of cash flows, cash and cash
equivalents consist of cash and cash equivalents as defined above,
net of outstanding bank overdrafts.
(i) Share-based payments
The Group's share option programme allows Group employees to
acquire shares of the Company and all options are equity-settled.
The fair value of options granted is recognised as an employee
expense with a corresponding increase in equity. The fair value is
measured at grant date and spread over the period during which the
employees become unconditionally entitled to the options. The fair
value of the options granted is measured using the Black-Scholes
model, taking into account the terms and conditions upon which the
options were granted. The amount recognised as an expense is
adjusted to reflect the actual number of share options that
vest.
(j) Provisions for liabilities
A provision is recognised in the balance sheet when the Group
has a present legal or constructive obligation as a result of a
past event, and it is probable that an outflow of economic benefits
will be required to settle the obligation.
The amount recognised as a provision is the best estimate of the
consideration required to settle the present obligation at the end
of the reporting period, taking into account the risks and
uncertainties surrounding the obligation. Where the effect of the
time value of money is material, the amount expected to be required
to settle the obligation is recognised at present value using a
pre-tax discount rate. The unwinding of the discount is recognised
as a finance cost in the income statement in the period it
arises.
Provisions for leasehold property dilapidation repairs are
recognised when the Group has a present obligation to carry out
dilapidation work on the leasehold premises before the property is
vacated. The amount recognised as a provision is the best estimate
of the costs required to carry out the dilapidations work and is
spread over the expected period of the tenancy.
(k) Deferred tax and current tax
Current income tax assets and liabilities for the current period
are measured at the amount expected to be recovered or paid to the
taxation authorities. A provision is made for corporation tax for
the reporting period using the tax rates that have been
substantially enacted for the company at the reporting date.
Current income tax relating to items recognised directly in
equity is recognised in equity and not in the Statement of
Comprehensive Income.
Deferred income tax is provided in full on a non-discounted
basis, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying
amounts in the consolidated financial statements. Deferred income
tax is determined using tax rates (and laws) that have been enacted
or substantially enacted by the statement of financial position
date and are expected to apply when the related deferred income tax
asset is realised or the deferred income tax liability is
settled.
Deferred income tax assets are recognised to the extent that it
is probable that future taxable profit will be available against
which the temporary differences can be utilised.
(l) Leases
Right-of-use assets
Right-of-use assets are recognised at the commencement date of
the lease (i.e., the date the underlying asset is available for
use). Initially, right-of-use assets are measured at cost, less any
accumulated depreciation and impairment losses and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use assets
includes the amount of lease liabilities recognised, initial direct
costs incurred, and lease payments made at or before the
commencement date less any lease incentives received. Subsequently,
right-of-use assets are depreciated on a straight-line basis over
the shorter of its estimated useful life and the lease term.
Lease liabilities
At the commencement date of the lease, the lease liabilities
recognised are measured at the present value of lease payments to
be made over the lease term. The lease payments include fixed
payments less any lease incentives receivable, variable lease
payments that depend on an index or a rate, and amounts expected to
be paid under residual value guarantees. The lease payments also
include the exercise price of a purchase option reasonably certain
to be exercised by the Group and payments of penalties for
terminating a lease, if the lease term reflects the Group
exercising the option to terminate. The variable lease payments
that do not depend on an index or a rate are recognised as an
expense in the period on which the event or condition that triggers
the payment occurs.
In calculating the present value of lease payments, the Group
used the incremental borrowing rate at the lease commencement.
After the commencement date, the amount of lease liabilities is
increased to account for interest and reduced for the lease
payments made. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification, a change in
the lease term, a change in the in-substance fixed lease payments
or a change in the assessment to purchase the underlying asset.
(m) Employee benefits
Short term employee benefits
Wages, salaries, paid annual leave, paid sick leave and bonuses
are recognised as an expense in the period in which the associated
services are rendered by employees.
The Group recognises an accrual for annual holiday pay accrued
by employees as a result of services rendered in the current
period, and which employees are entitled to carry forward and use
within 12 months. The accrual is measured at the salary cost
payable for the period of absence.
Pensions and other post-employment benefits
The Group pays monthly contributions to defined contribution
pension plans. The legal or constructive obligation of the Group is
limited to the amount that they agree to contribute to the plan.
The contributions to the plan are charged to the Statement of
Comprehensive Income in the period to which they relate.
Termination benefits are recognised immediately as an expense
when the Group is demonstrably committed to terminate the
employment of an employee or to provide termination benefits.
(n) Revenue
Revenue represents amounts received and receivable for services
and goods provided (excluding value added tax) and is recognised at
the point of sale. Revenue is recognised to the extent that it is
probable that the economic benefits will flow to the Group and the
reserve can be reliably measured.
(o) Expenses
Variable lease payments
Variable lease payments that do not depend on an index or rate
and are not in-substance fixed payments, such as rental expenses
payable based on the percentage of sales made in the period, are
not included in the initial measurement of the lease liability.
These payments are recognised in the income statement in the period
in which the event or condition that triggers those payments
occurs.
Opening expenses
Property rentals and related costs incurred up to the date of
opening of a new restaurant are written off to the income statement
in the period in which they are incurred. Promotional and training
costs are written off to the income statement in the period in
which they are incurred.
Financial expenses
Financial expenses comprise of interest payable on bank loans,
hire purchase liabilities and other financial costs and charges.
Interest payable is recognised on an accrual basis.
(p) Ordinary share capital
Ordinary shares are classified as equity. Costs directly
attributable to the increase of new shares or options are shown in
equity as a deduction from the proceeds.
(q) Dividend policy
In accordance with IAS 10 'Events after the Balance Sheet Date',
dividends declared after the balance sheet date are not recognised
as a liability at that balance sheet date and are recognised in the
financial statements when they have received approval by
shareholders. Unpaid dividends that are not approved are disclosed
in the notes to the consolidated financial statements.
(r) Commercial discount policy
Commercial discounts represent a reduction in cost of goods and
services in accordance with negotiated supplier contracts, the
majority of which are based on purchase volumes. Commercial
discounts are recognised in the period in which they are earned and
to the extent that any variable targets have been achieved in that
financial period. Costs associated with commercial discounts are
recognised in the period in which they are incurred.
(s) Operating segments
An operating segment is a component of an entity that engages in
business activities from which it may earn revenues and incur
expenses (including revenue and expenses related to transactions
with other components of the same entity), whose operating results
are regularly reviewed by the entity's Chief Operating Decision
Maker to make decisions about resources to be allocated to the
segment and assess its performance, and for which discrete
financial information is available. The Chief Operating Decision
Maker has been identified as the Board of Executive Directors, at
which level strategic decisions are made.
Notes to the consolidated financial statements
For the year ended 31 December 2019
1. Segmental analysis
The Group has only one operating segment being: the operation of
restaurants with Lebanese and Middle Eastern Offerings and one
geographical segment being the United Kingdom. The Group's brands
meet the aggregation criteria set out in paragraph 22 of IFRS 8
'Operating Segments' and as such the Group reports the business as
one reportable segment.
None of the Group's customers individually contribute over 10%
of the total revenues.
2. Revenue
Year ended 31 Year ended 31
December 2019 December 2018
GBP GBP
Income for the year consists of the following:
Revenue from continuing operations 33,403,402 34,331,309
Other income not included within revenue
in the income statement:
Other income 1,020,090 -
Total income for the year 34,423,492 34,331,309
------------------------------------------------ --------------- ---------------
Other income received related to UberEats compensation of
GBP643,739, insurance claims receivable GBP346,351 and landlord
compensation GBP30,000.
3. Group operating loss
Year ended Year ended
31 December 31 December
2019 2018
(Restated)
GBP GBP
This is stated after charging/(crediting):
Operating lease charges 787,222 937,549
Share-based payments expense (see note 22) 53,963 28,745
Restaurant opening costs 18,075 433,506
Depreciation of property, plant and equipment
(see note 11) 4,036,957 3,806,212
Impairment of assets (see note 11) 129,001 259,205
Loss on disposal of fixed assets 298,022 -
Development of the Grab & Go concept subsequently 74,551 -
cancelled
Costs in relation to unopened new sites 67,211 -
Reclassification of legal fees 15,087 -
Auditors' remuneration (see note 4) 51,750 50,000
--------------------------------------------------- ------------- -------------
Operating lease charges relate to additional rental expenses
payable based on selected sites achieving a certain level of
turnover for the year.
For the initial trading period following opening of a new
restaurant, the performance of that restaurant will be lower than
that achieved by other, similar mature restaurants. The difference
in this performance, which is calculated by reference to gross
profit margins amongst other key metrics is quantified and included
within opening costs. The breakdown of opening costs, between
pre-opening costs and certain post-opening costs for 3 months is
shown below:
Year ended Year ended
31 December 31 December
2019 2018 (Restated)
GBP GBP
Pre-opening costs 3,982 139,858
Post-opening costs 14,093 293,648
18,075 433,506
-------------------- ------------- -----------------
4. Auditors' remuneration
Year ended Year ended
31 December 31 December
2019 2018
(Restated)
GBP GBP
Auditors' remuneration :
Fees payable to Company's auditor for the
audit of its annual accounts 15,750 15,000
Other fees to the Company's auditors
The audit of the Company's subsidiaries 20,000 20,000
Total audit fees 35,750 35,000
------------------------------------------- ------------- -------------
Review of the half-year accounts 15,500 15,000
Total non-audit fees 15,500 15,000
------------------------------------------- ------------- -------------
Total auditors' remuneration 51,250 50,000
------------------------------------------- ------------- -------------
5. Staff costs and numbers
Year ended Year ended
31 December 31 December
2019 2018
GBP GBP
(a) Staff costs (including directors) :
Wages and salaries:
Kitchen, floor and management wages 11,416,977 11,288,001
Apprentice Levy 41,455 41,589
Other costs:
Social security costs 842,168 627,336
Share-based payments (note 22) 53,963 28,745
Pension costs 249,086 169,974
Total staff costs 12,603,649 12,155,645
-------------------------------------------------- ------------- -------------
(b) Staff numbers (including directors) Number Number
:
Kitchen and floor staff 538 591
Management staff 114 123
Total number of staff 652 714
-------------------------------------------------- ------------- -------------
(c) Directors' remuneration:
Emoluments 495,000 460,238
Money purchase (and other) pension contributions 101,457 4,423
Non-Executive directors' fees 30,000 43,901
Total directors' costs 626,457 508,562
-------------------------------------------------- ------------- -------------
Directors' remuneration disclosed above include the following amounts
paid to the highest paid director:
Emoluments 187,500 187,500
Money purchase (and other) pension contributions 50,134 1,708
-------------------------------------------------- ------------- -------------
Further details on Directors' emoluments and the executive
pension schemes are given in the Directors' report.
6. Finance costs
Year ended Year ended
31 December 31 December
2019 2018 (Restated)
GBP GBP
Interest payable and similar charges:
Interest on bank loans and overdraft 21,730 41,758
Interest on lease liabilties 1,074,732 1,052,419
Total finance costs for the year 1,096,462 1,094,177
--------------------------------------- ------------- -----------------
7. Taxation
The major components of income tax for the years ended 31
December 2019 and 2018 are:
(a) Analysis of charge in the year:
Year ended Year ended
31 December 31 December
2019 2018 (Restated)
GBP GBP
Current tax:
UK corporation tax on the profit/(loss)
for the year 119,645 93,543
Adjustments in respect of previous years 436 (19,370)
Deferred tax:
Origination and reversal of temporary differences 317 34,369
Tax losses carried forward 26,175 (115)
Total tax charge for the year 146,573 108,427
--------------------------------------------------- ------------- -----------------
b) Factors affecting the tax charge for the year:
The tax charged for the year varies from the standard rate of
corporation tax in the UK due to the following factors:
Year ended Year ended
31 December 31 December
2019 2018 (Restated)
GBP GBP
Loss before tax (520,390) (650,213)
Expected tax charge based on the standard
rate of corporation tax in the UK of 19%
(2018: 19%) (98,874) (123,540)
Effects of:
Depreciation on non-qualifying assets 122,499 162,073
Expenses not deductible for tax purposes 95,716 81,186
Adjustments in respect of previous tax years 436 (19,370)
Other miscellaneous items 26,492 -
Deferred tax 304 34,253
Losses utilised in the year - (26,174)
Total tax charge for the year 146,573 108,427
---------------------------------------------- ------------- -----------------
8. Loss per share
On 4 July 2018 the company granted 4,890,000 approved options to
key employees under a new Company Share Option Plan ("CSOP"). For
further details see note 22.
The basic and diluted loss per share figures, is based on the
weighted average number of shares in issue during the period.
The basic and diluted loss per share figures are set out
below:
Year ended Year ended
31 December 31 December
2019 2018
(Restated)
GBP GBP
Loss attributable to shareholders (666,963) (758,640)
2019 2018
Weighted average number of shares
For basic earnings per share 122,666,667 122,666,667
Adjustment for options outstanding 180,385 116,429
For diluted earnings per share 122,847,052 122,783,096
------------------------------------ ------------- -------------
2019 2018
Pence per Pence per
share share
(Loss)/earnings per share:
Basic (pence)
From (loss)/profit for the year (0.54) (0.62)
Diluted (pence)
From (loss)/profit for the year (0.54) (0.62)
Diluted (loss)/earnings per share is calculated by dividing the
profit or loss attributable to ordinary shareholders by the
weighted average number of shares and 'in the money' share options
in issue. Share options are classified as 'in the money' if their
exercise price is lower than the average share price for the
period. As required by IAS 33 'Earnings Per Share', this
calculation assumes that the proceeds receivable from the exercise
of 'in the money' options would be used to purchase share options
in the open market in order to reduce the number of new shares that
would need to be issued.
9. Dividends
No dividends were paid or declared in the year ended 31 December
2019 (2018: GBPnil).
10. Intangible assets
Group
Goodwill Total
GBP GBP
Cost
At 1 January 2018 89,961 89,961
Additions - -
--------- --------
At 31 December 2018 89,961 89,961
----------------------------------------- --------- --------
Accumulated amortisation and impairment
At 1 January 2018 - -
Amortised during the year - -
Impairments (2,286) (2,286)
--------- --------
At 31 December 2018 (2,286) (2,286)
----------------------------------------- --------- --------
Net Book Value as at 31 December 2017 89,961 89,961
----------------------------------------- --------- --------
Net Book Value as at 31 December 2018 87,675 87,675
----------------------------------------- --------- --------
Goodwill Total
GBP GBP
Cost
At 1 January 2019 89,961 89,961
Additions - -
--------- --------
At 31 December 2019 89,961 89,961
----------------------------------------- --------- --------
Accumulated amortisation and impairment
At 1 January 2019 (2,286) (2,286)
Amortised during the year - -
Impairments - -
--------- --------
At 31 December 2019 (2,286) (2,286)
----------------------------------------- --------- --------
Net Book Value as at 31 December 2018 87,675 87,675
----------------------------------------- --------- --------
Net Book Value as at 31 December 2019 87,675 87,675
----------------------------------------- --------- --------
Goodwill arising on business combinations is not amortised but
is subject to an impairment test annually which compares the
goodwill's 'value in use' to its carrying value. In 2018, 100% of
the goodwill allocated to Yalla Yalla Greenwich was impaired due to
the closing of the pop-up store. The remaining goodwill related to
Yalla Yalla Soho and Yalla Yalla Winsley Street. No impairment of
goodwill was considered necessary in relation to either of these
sites.
11. Property, plant and equipment
Group Right-of Leasehold Plant Fixture, Motor Total
use Assets Land and and machinery fittings Vehicles
buildings & equipment
GBP GBP GBP GBP GBP GBP
Cost
At 1 January 2018 22,656,729 9,962,461 4,644,190 2,650,155 15,120 39,928,655
Additions 5,012,580 1,527,866 305,327 445,849 - 7,291,622
Disposals - - - - - -
At 31 December 2018 27,669,309 11,490,327 4,949,517 3,096,004 15,120 47,220,277
-------------------------- ------------ ------------ --------------- ------------- ---------- -------------
Accumulated depreciation
and impairment
At 1 January 2018 - (3,492,423) (1,777,015) (895,438) (3,024) (6,167,900)
Depreciation during
the year (2,427,099) (702,274) (465,321) (209,099) (2,419) (3,806,212)
Impairment during the
year - (140,536) (15,563) (100,820) - (256,919)
At 31 December 2018 (2,427,099) (4,335,233) (2,257,899) (1,205,357) (5,443) (10,231,031)
-------------------------- ------------ ------------ --------------- ------------- ---------- -------------
Cost
At 1 January 2019 27,669,309 11,490,327 4,949,517 3,096,004 15,120 47,220,277
Additions 1,426,428 647,651 360,815 240,973 38,310 2,714,177
Disposals - (623,376) (158,449) (220,458) (1,002,283)
At 31 December 2019 29,095,737 11,514,602 5,151,883 3,116,519 53,430 48,932,171
-------------------------- ------------ ------------ --------------- ------------- ---------- -------------
Accumulated depreciation
and impairment
At 1 January 2019 (2,427,099) (4,335,233) (2,257,899) (1,205,357) (5,443) (10,231,031)
Depreciation during
the year (2,621,243) (760,432) (452,878) (200,473) (1,930) (4,036,957)
Disposals during the
year - 466,755 104,464 131,792 - 703,011
Impairment during the
year (96,316) (18,947) (7,074) (6,665) - (129,001)
At 31 December 2019 (5,144,658) (4,647,857) (2,613,387) (1,280,703) (7,373) (13,693,978)
-------------------------- ------------ ------------ --------------- ------------- ---------- -------------
Net Book Value as at
31 December 2018 25,242,211 7,155,094 2,691,618 1,890,647 9,677 36,989,247
-------------------------- ------------ ------------ --------------- ------------- ---------- -------------
Net Book Value as at
31 December 2019 23,951,079 6,866,745 2,538,496 1,835,816 46,057 35,238,194
-------------------------- ------------ ------------ --------------- ------------- ---------- -------------
The right of use assets relates to one class of underlying
assets, being the property leases entered into for various
restaurant sites. At each reporting date the Group considers any
indication of impairment to the carrying value of its property,
plant and equipment.
The assessment is based on expected future cash flows and
Value-in-Use calculations are performed annually and at each
reporting date and is carried out on each restaurant as these are
separate 'cash generating units' (CGU). Value-in-use was calculated
as the net present value of the projected risk-adjusted post-tax
cash flows plus a terminal value of the CGU. A pre-tax discount
rate was applied to calculate the net present value of pre-tax cash
flows. The discount rate was calculated using a market participant
weighted average cost of capital. A single rate has been used for
all sites as management believe the risks to be the same for all
sites.
The recoverable amount of each CGU has been calculated with
reference to its value-in-use. The key assumptions of this
calculation are shown below:
Sales and costs growth 3%
Discount rate 7%
Number of years projected over life of lease
The projected sales growth was based on the Group's latest
forecasts at the time of review. The key assumptions in the
cashflow pertain to revenue growth. Management have determined that
growth based on industry average growth rates and actuals achieved
historically are the best indication of growth going forward. The
Directors are confident that the Group is largely immune from the
effects of Brexit. Management has performed sensitivity analysis on
all inputs to the model and noted no material sensitivities in the
model.
Based on the review, an impairment charge of GBP129,001 (2018:
259,205) was attributed to one site. The impairment review does not
take into consideration any current external factors arising from
COVID-19, as the effects of these factors are considered to be
'non-adjusting' events in accordance with IAS 10 'Events After the
Reporting Period' (note 31 and below).
Decline in fair value of assets resulting from COVID-19
outbreak
Since 31 December 2019, the outbreak of COVID-19 and related
global responses have caused material disruptions to businesses
around the world, leading to an economic slowdown. Global equity
markets have experienced significant volatility and weakness. As at
the date that these financial statements were authorised for issue,
the fair value of the Group's assets and investments had declined
as a result of the virus outbreak and the resulting closure of the
Group's restaurants. It is not yet possible to reliably estimate
the amount of the decline in asset values due to the number of
current uncertainties of timing and the rates of increases and
resumption of trading levels. While governments and central banks
have reacted with monetary interventions designed to stabilise
economic conditions, the duration and extent of the impact of the
COVID-19 outbreak, as well as the effectiveness of government and
central bank responses, remains unclear at this time.
The subsequent changes in the fair value of the Group's assets
and investments are not reflected in the financial statements as at
31 December 2019 as these are 'non-adjusting' subsequent events.
The Group's half-year accounts for the period ending 30 June 2020
will reflect changes in fair values of the Group's assets.
12. Subsidiaries
The subsidiaries of Comptoir Group Plc, all of which have been
included in these consolidated financial statements, are as
follows:
Name Country of Proportion of Non-Controlling
incorporation ownership interest interests Ownership/voting
and principal as at 31 December interest at 31
place of December
business
2019 2018 2019 2018
------------------------------ ---------------- ---------- ---------- -------------- --------------
England &
Timerest Limited Wales 100% 100% - -
England &
Chabane Limited* Wales 100% 100% - -
England &
Comptoir Franchise Limited Wales 100% 100% - -
England &
Shawa Group Limited* Wales 100% 100% - -
England &
Shawa Bluewater Limited* Wales 100% 100% - -
England &
Shawa Limited Wales 100% 100% - -
England &
Shawa Rupert Street Limited* Wales 100% 100% - -
England &
Comptoir Stratford Limited* Wales 100% 100% - -
England &
Comptoir South Ken Limited* Wales 100% 100% - -
England &
Comptoir Soho Limited* Wales 100% 100% - -
Comptoir Central Production England &
Limited* Wales 100% 100% - -
Comptoir Westfield London England &
Limited* Wales 100% 100% - -
Levant Restaurants Group England &
Limited* Wales 100% 100% - -
England &
Comptoir Chelsea Limited* Wales 100% 100% - -
England &
Comptoir Bluewater Limited* Wales 100% 100% - -
England &
Comptoir Wigmore Limited* Wales 100% 100% - -
England &
Comptoir Kingston Limited* Wales 100% 100% - -
England &
Comptoir Broadgate Limited* Wales 100% 100% - -
England &
Comptoir Manchester Limited* Wales 100% 100% - -
Comptoir Restaurants England &
Limited Wales 100% 100% - -
England &
Comptoir Leeds Limited* Wales 100% 100% - -
Comptoir Oxford Street England &
Limited* Wales 100% 100% - -
England &
Comptoir I.P. Limited* Wales 100% 100% - -
England &
Comptoir Reading Limited* Wales 100% 100% - -
England &
TKCH Limited* Wales 100% 100% - -
England &
Comptoir Bath Limited* Wales 100% 100% - -
England &
Comptoir Exeter Limited* Wales 100% 100% - -
Yalla Yalla Restaurants England &
Limited Wales 100% 100% - -
England &
Comptoir Haymarket Ltd* Wales 100% 100% - -
England &
Comptoir Oxford Limited* Wales 100% 100% - -
------------------------------ ---------------- ---------- ---------- -------------- --------------
*Dormant companies
13. Inventories
Group
31 December 31 December
2019 2018
GBP GBP
Finished goods and goods for resale 594,409 706,741
------------------------------------- ------------ ------------
14. Trade and other receivables
Group
31 December 31 December
2019 2018
(Restated)
GBP GBP
Trade receivables 736,179 884,130
Other receivables 796,923 426,162
Prepayments and accrued income 669,872 548,150
Total trade and other receivables 2,202,974 1,858,442
----------------------------------- ------------ -------------
15. Trade and other payables
Group
31 December 31 December
2019 2018
(Restated)
GBP GBP
Trade payables 2,399,243 1,864,398
Accruals 1,511,579 1,648,330
Other taxation and social security 974,453 1,045,439
Other payables 130,329 43,209
Total trade and other payables 5,015,604 4,601,376
------------------------------------ ------------ -------------
16. Borrowings
Group
31 December 31 December
2019 2018
GBP GBP
Bank loans (see below) 317,346 743,132
Total borrowings 317,346 743,132
------------------------- ------------ ------------
The long-term bank loans are secured by way of fixed charges
over the assets of various Group companies. Some of the bank loans
are secured by a personal guarantee given by A Kitous, director,
amounting to GBP6,925,000. Bank loans of GBP317,346 represent
amounts repayable within one year of GBP261,611 (2018 - GBP427,179)
and GBP55,735 (2018 - GBP315,953) repayable in more than one year.
All bank loans have a five-year term with maturity dates of between
2020 and 2021. All loans attract a rate of interest of 3.25% over
the Bank base rate.
17. Provisions for liabilities
Group
31 December 31 December
2019 2018
GBP GBP
Provisions for leasehold property dilapidations 65,538 60,892
Provisions for rent reviews per lease agreements 373,032 -
Total provisions 438,570 60,892
-------------------------------------------------- ------------ ------------
Movements on provisions: GBP GBP
At 1 January 2019 60,892 48,036
Provision in the year (net of releases) 377,678 12,856
Total at 31 December 2019 438,570 60,892
-------------------------------------------------- ------------ ------------
Provisions for leasehold property dilapidation repairs are
recognised when the Group has a present obligation to carry out
dilapidation repair work on the leasehold premises before the
property is vacated. The amount recognised as a provision is the
best estimate of the costs required to carry out the dilapidations
work and is spread over the expected period of the tenancy.
18. Deferred taxation
Deferred tax assets and liabilities are offset where the Group
or Company has a legally enforceable right to do so. The following
is the analysis of the deferred tax balances (after offset) for
financial reporting purposes:
Group Liabilities Liabilities Assets Assets
2019 2018 2019 2018
GBP GBP GBP GBP
Accelerated capital allowances 170,283 172,380 - -
Tax losses - - 139,588 162,714
Share-based payments - - - 5,462
170,283 172,380 139,588 168,176
------------ ------------ -------- --------
Movements in the year: Group
2019 2018
GBP GBP
Net (liability)/asset at 1 January (4,203) 30,050
Charge to Statement of Comprehensive
Income (note 7) (26,492) (34,253)
Net liability at year end (30,695) (4,203)
--------- ---------
The deferred tax liability set out above is related to
accelerated capital allowances and will reverse over the period
that the fixed assets to which it relates are depreciated.
19. Share capital
Authorised, issued and fully paid Number of 1p shares
Year ended Year ended
31 December 31 December
2019 2018
Brought forward 122,666,667 122,666,667
Issued in the period - -
At 31 December 122,666,667 122,666,667
----------------------------------- ------------- -------------
Nominal value
Year ended Year ended
31 December 31 December
2019 2018
GBP GBP
Brought forward 1,226,667 1,226,667
Issues in the period - -
At 31 December 1,226,667 1,226,667
----------------------------------- ------------- -------------
20. Other reserves
The other reserves amount of GBP82,708 (2018 - GBP 28,745) in
the balance sheet reflects the credit to equity made in respect of
the charge for share-based payments made through the income
statement and the purchase of shares in the market in order to
satisfy the vesting of existing and future share awards under the
Long-Term Incentive Plan.
21. Retirement benefit schemes
Defined contribution schemes 31 December 31 December
2019 2018
GBP GBP
Charge to profit and loss 249,086 169,974
------------------------------ ------------ ------------
A defined contribution scheme is operated for all qualifying
employees. The assets of the scheme are held separately from those
of the Group in an independently administered fund.
22. Share-based payments scheme
Equity-settled share-based payments
On 4 July 2018, the Group established a Company Share Option
Plan ("CSOP") under which 4,890,000 share options were granted to
key employees. On the same day, the options which had been granted
under the Group's existing EMI share option scheme were
cancelled.
The new CSOP scheme includes all subsidiary companies headed by
Comptoir Group PLC. The exercise price of all of the options is
GBP0.1025 and the term to expiration is 3 years from the date of
grant, being 4 July 2018. All of the options have the same vesting
conditions attached to them.
A share-based payment charge of GBP82,708 (2018 - GBP28,745) was
recognised during the year in relation to the new scheme and this
amount is included within administrative expenses and added back in
calculating adjusted EBITDA. In 2018, a credit of GBP316,590 was
recognised directly in equity in respect of the cancellation of the
old scheme.
Year ended Year ended
31 December 31 December
2019 2018
Average Average
Exercise Exercise
price price
No. of shares GBP No. of shares GBP
EMI options
Options outstanding, beginning
of year - - 1,830,000 0.50
Granted - - - -
Cancelled - - (1,830,000) 0.50
Options outstanding, end - - - -
of year
-------------------------------- -------------- ------------- -------------- -------------
Options exercisable, end - - - -
of year
-------------------------------- -------------- ------------- -------------- -------------
CSOP options
Options outstanding, beginning
of year 4,890,000 0.1025 - -
Granted - - 4,890,000 0.1025
Cancelled 200,000 0.1025 - -
Options outstanding, end
of year 4,690,000 0.1025 4,890,000 0.1025
-------------------------------- -------------- ------------- -------------- -------------
Options exercisable, end - - - -
of year
-------------------------------- -------------- ------------- -------------- -------------
The Black-Scholes option pricing model is used to estimate the
fair value of options granted under the Group's share-based
compensation plan. The range of assumptions used and the resulting
weighted average fair value of options granted at the date of grant
for the Group were as follows:
On grant
date
Risk free rate of return 0.1%
Expected term 3 years
Estimated volatility 51.3%
Expected dividend yield 0%
Weighted average fair value of options granted GBP0.03527
------------------------------------------------ -----------
Risk free interest rate
The risk-free interest rate is based on the UK 10-year Gilt
yield.
Expected term
The expected term represents the maximum term that the Group's
share options in relation to employees of the Group are expected to
be outstanding. The expected term is based on expectations using
information available.
Estimated volatility
The estimated volatility is the amount by which the price is
expected to fluctuate during the period. No share options were
granted during the current year, the estimated volatility for the
share options issued in the prior year was determined based on the
standard deviation of share price fluctuations of similar
businesses.
Expected dividends
Comptoir's board of directors may from time to time declare
dividends on its outstanding shares. Any determination to declare
and pay dividends will be made by Comptoir Group PLC's board of
directors and will depend upon the Group's results, earnings,
capital requirements, financial condition, business prospects,
contractual restrictions and other factors deemed relevant by the
board of directors. In the event that a dividend is declared, there
is no assurance with respect to the amount, timing or frequency of
any such dividends. Based on this uncertainty and unknown
frequency, no dividend rate was used in the assumptions to
calculate the share based compensation expense.
23. Reconciliation of (loss)/profit to cash generated from operations
Year ended Year ended
31 December 31 December
2019 2018
(Restated)
GBP GBP
Operating profit for the year 576,072 443,964
Depreciation 4,036,957 3,806,212
Loss on disposal of fixed assets 299,272 -
Impairment of assets 129,001 259,205
Share-based payment charge 53,963 28,745
Movements in working capital
Decrease/(increase) in inventories 112,332 (100,089)
Increase in trade and other receivables (344,532) (169,605)
Increase in payables and provisions 791,906 1,046,086
Cash from operations 5,654,971 5,314,518
----------------------------------------- ------------- -------------
24. Reconciliation of changes in cash to the movement in net
cash/(debt)
Net cash/(debt): Year ended Year ended
31 December 31 December
2019 2018
(Restated)
GBP GBP
At the beginning of the year 3,881,541 4,066,490
Movements in the year:
Repayment of loan borrowings 425,786 675,115
Non-cash movements in the year (21,730) (41,758)
Cash inflow/(outflow) 451,937 (818,306)
At the end of the year 4,737,534 3,881,541
-------------------------------- ------------- -------------
Represented by: At 1 January Cash flow Non- cash At 31 December
2018 movements flow movements 2018
in the year in the year
GBP GBP GBP
GBP
Cash and cash equivalents 5,627,341 (1,002,668) - 4,624,673
Overdraft (184,362) 184,362 - -
Bank loans (1,376,489) 675,115 (41,758) (743,132)
4,066,490 (143,191) (41,758) 3,881,541
--------------------------- ------------- ------------- ---------------- ---------------
At 1 January Cash flow Non- cash At 31 December
2019 movements flow movements 2019
in the year in the year
GBP GBP GBP GBP
Cash and cash equivalents 4,624,673 451,937 - 5,076,610
Overdraft - - - -
Bank loans (743,132) 425,786 (21,730) (339,076)
3,881,541 877,723 (21,730) 4,737,534
--------------------------- ------------- ------------- ---------------- ---------------
25. Financial instruments
The Group finances its operations through equity and borrowings,
with the borrowing interest typically subject to 3.25% per annum
over base rate.
Management pay rigorous attention to treasury management
requirements and continue to:
-- ensure sufficient committed loan facilities are in place to
support anticipated business requirements;
-- ensure the Group's debt service will be supported by
anticipated cash flows and that covenants will be complied with;
and
-- manage interest rate exposure with a combination of floating
rate debt and interest rate swaps when deemed appropriate.
The Board closely monitors the Group's treasury strategy and the
management of treasury risk. Further details of the Group's capital
risk management can be found in the report of the Directors.
Further details on the business risk factors that are considered
to affect the Group are included in the strategic report and more
specific financial risk management (including sensitivity to
increases in interest rates) are included in the Report of the
Directors. Further details on market and economic risk and headroom
against covenants are included in the Strategic Report.
Financial assets and liabilities
Group financial assets:
31 December 31 December
2019 2018
(Restated)
GBP GBP
Cash and cash equivalents 5,076,610 4,624,673
Trade and other receivables 2,202,974 1,858,442
Total financial assets 7,279,584 6,483,115
----------------------------------- ------------ -------------
Group financial liabilities: 31 December 31 December
2019 2018
(Restated)
GBP GBP
Trade and other payables excl.
corporation tax 5,015,604 4,601,376
Bank loan 261,611 427,179
Short-term financial liabilities 5,277,215 6,133,295
---------------------------------------- ------------ -------------
Bank loan 55,735 315,953
Long-term financial liabilities 55,735 315,953
---------------------------------------- ------------ -------------
Total financial liabilities 5,332,950 6,449,248
---------------------------------------- ------------ -------------
The loans held in the subsidiaries typically have the interest
rate of 3.25% per annum over base rate.
The maturity profile of anticipated gross future cash flows,
including interest, relating to the Group's non-derivative
financial liabilities, on an undiscounted basis, are set out
below:
Overdraft Trade and Bank loans
other payables
*
GBP GBP GBP
As at 31 December 2019
Within one year - 5,015,604 261,611
Within two to five years - - 55,735
Less future interest payments - - (7,151)
Total - 5,015,604 310,195
------------------------------- ----------- ---------------- -----------
As at 31 December 2018
Within one year - 4,601,376 447,400
Within two to five years - - 323,048
Less future interest payments - - (27,315)
Total - 4,601,376 743,133
------------------------------- ----------- ---------------- -----------
*excluding corporation tax
Fair value of financial assets and liabilities
All financial assets and liabilities are accounted for at cost
and the Directors consider the carrying value to approximate their
fair value.
26. Financial risk management
The Group's and Company's financial instruments comprise
investments, cash and liquid resources, and various items, such as
trade receivables and trade payables that arise directly from its
operations. The vast majority of the Group's and Company's
financial investments are denominated in sterling.
Neither the Group nor the Company enter into derivatives or
hedging transactions. It is, and has been throughout the period
under review, the Group's and Company's policy that no trading in
financial instruments shall be undertaken.
The main risks arising from the Group's and Company's financial
instruments are credit risk, liquidity risk, foreign currency risk,
interest rate risk and investment risk. The Group does not have a
material exposure to foreign currency risk. The board reviews
policies for managing each of these risks, and they are summarised
as follows:
Credit Risk
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial losses to the
Group. Counterparties for cash balances are with large established
financial institutions. The Group is exposed to credit related
losses in the event of non-performance by the financial
institutions but does not expect them to fail to meet their
obligations.
As a retail business with trading receipts settled either by
cash or credit and debit cards, there is very limited exposure from
customer transactions. The Group is exposed to credit risk in
respect of commercial discounts receivable from suppliers but the
Directors believe adequate provision has been made in respect of
doubtful debts and there are no material amounts past due that have
not been provided against.
The carrying amount of financial assets recorded in the
financial statements, net of any allowances for losses, represents
the Group's maximum exposure to credit risk
Liquidity risk
The Group has built an appropriate mechanism to manage liquidity
risk of the short, medium and long-term funding and liquidity
management requirements. Liquidity risk is managed through the
maintenance of adequate cash reserves and bank facilities by
monitoring forecast and actual cash flows and matching the maturity
profiles of financial assets and liabilities. The Group's loan
facilities (as set out in note 16), ensure continuity of funding,
provided the Group continues to meet its covenant requirements (as
detailed in the report of the Directors).
Foreign currency risk
The Group is not materially exposed to changes in foreign
currency rates and does not use foreign exchange forward
contracts.
Interest rate risk
Exposure to interest rate movements has been controlled
historically through the use of floating rate debt to achieve a
balanced interest rate profile. The Group does not currently have
any interest rate swaps in place as the continued reduction in the
level of debt combined with current market conditions results in a
low level of exposure. The Group's exposure will continue to be
monitored and the use of interest rate swaps may be considered in
the future.
Investment risk
Investment risk includes investing in companies that may not
perform as expected. The Group's investment criteria focus on the
quality of the business and the management team of the target
company, market potential and the ability of the investment to
attain the returns required within the time horizon set for the
investment. Due diligence is undertaken on each investment. The
Group regularly reviews the investments in order to monitor the
level of risk and mitigate exposure where appropriate.
27. Lease commitments
The Group has leases assets including 26 restaurants and one
head office location within the United Kingdom. The Group has
elected to not take the practical expedient for short term and low
values leases, therefore all leases have been included. The
remaining lease terms range from less than one year to 21 years
with an average remaining lease term of 8 years.
Information about leases for which the Group is a lessee is
presented below:
Net book value of right of use assets 2019 2018
(Restated)
GBP GBP
Balance at 1 January 25,242,211 22,656,729
Additions 1,426,428 5,012,580
Depreciation charge (2,621,243) (2,427,099)
Impairment charge (96,316) -
23,951,079 25,242,211
--------------------------------------- ------------ -------------
2019 2018
Maturity analysis - contractual undiscounted (Restated)
cash flows
GBP GBP
Within one year (3,474,376) (3,373,788)
More than one year (30,034,528) (32,958,656)
(33,508,904) (36,332,444)
---------------------------------------------- ------------- -------------
2019 2018
Lease liabilities included in the statement (Restated)
of financial position
GBP GBP
Current (2,481,471) (2,173,730)
Non-current (24,170,903) (25,351,272)
Balance at 31 December 2019 (26,652,374) (27,525,002)
--------------------------------------------- ------------- -------------
2019 2018
Amounts recognised in profit or loss (Restated)
GBP GBP
Interest on lease liabilities 1,074,732 1,052,419
Expenses relating to variable lease payments 787,222 937,549
1,861,954 1,989,968
---------------------------------------------- ---------- -------------
Some site leases contained clauses on variable lease payments
where additional lease payments may be required dependant on the
revenue being generated at that particular site. Variable lease
payments ranged from 9% -15% of revenue in excess of the existing
base rent per the respective lease agreements.
2019 2018
Amounts recognised in statement of cash flow (Restated)
GBP GBP
Total cash outflow for leases 3,373,788 3,114,355
3,373,788 3,114,355
---------------------------------------------- ---------- -------------
28. Contingent liabilities
The Group had no contingent liabilities at 31 December 2019 or
31 December 2018.
29. Capital commitments
The Group had capital commitments of GBP34,865 at 31 December
2019 (2018 - GBP600,000) in relation to refurbishment work at Yalla
Yalla Winsley Street and Comptoir Wigmore Street.
30. Related party transactions
Remuneration in respect of key management personnel, defined as
the Directors for this purpose, is disclosed in note 5. Further
information concerning the Directors' remuneration is provided in
the Directors' remuneration report. During the year, the Group paid
fees to the following related parties:
Remuneration Expenses Total
P Hanna 46,750 3,197 49,947
M Kitous 27,142 226 27,368
L Kitous 17,181 - 17,181
91,073 3,423 94,496
---------- ------------- --------- -------
During the year, the Group also paid fees of GBP30,000 (2018:
GBP30,000) to Messrs Gerald Edelman, a firm in which director R
Kleiner is a partner, in respect of part of his non-executive
director fees. In addition, the Group paid further amounts
totalling GBP5,640 (2018: GBP28,740) to Messrs Gerald Edelman, in
respect of accountancy and corporate finance services provided to
the Group. M Carrick, Finance Director, was granted 1,000,000 share
options as part of the new CSOP share scheme on 4(th) July 2018.
The share options have a vesting period of three years from the
grant date and can be exercised at 10.25p.
31. Subsequent events
Subsequent to the year end there has been a significant event
associated with the COVID-19 virus outbreak. The spread of COVID-19
has severely impacted many local economies around the globe. In
many countries, businesses are being forced to cease or limit
operations for long or indefinite periods of time. Measures taken
to contain the spread of the virus, including travel bans,
quarantines, social distancing, and closures of non-essential
services have triggered significant disruptions to businesses
worldwide, including in the UK, resulting in an economic slowdown.
Global stock markets have also experienced great volatility and a
significant weakening. Governments and central banks have responded
with monetary and fiscal interventions to stabilise economic
conditions. Following guidance provided by the UK government, the
Board of Directors has taken the decision to close its restaurants
until further notice.
The Company has determined that these events are 'non-adjusting'
subsequent events. Accordingly, the financial position and results
of operations as of and for the year ended 31 December 2019 have
not been adjusted to reflect their impact. The duration and impact
of the COVID-19 pandemic, as well as the effectiveness of
government and central bank responses, remains unclear at this
time. It is not yet possible to reliably estimate the duration and
severity of these consequences, as well as their financial impact
on the financial position and results of the Company for future
periods. Further details are provided in note 11 above and the
Going Concern section of the Principal Accounting Policies of the
Group financial statements.
32. Ultimate controlling party
The Company has a number of shareholders and is not under the
control of any one person or ultimate controlling party.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR KBLFLBZLZBBV
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