TIDMCOM
RNS Number : 9811B
Comptoir Group PLC
14 October 2020
14 October 2020
Comptoir Group Plc
("Comptoir", the "Group" or the "Company")
Interim Results
Comptoir Group Plc (AIM: COM), the owner and/or operator of
Lebanese and Eastern Mediterranean restaurants, announce its
results for the six months ended 30 June 2020.
Highlights:
-- Group revenue of GBP6.1m down by 61.4% (H1 2019: GBP 15.8m)
-- Gross profit of GBP4.5m down by 60.9% (H1 2019: GBP 11.5 m).
-- Adjusted EBITDA* before highlighted items of GBP0.45m down by 78.3% (H1 2019: GBP2.08m).
-- IFRS loss after tax of GBP4.97m (H1 2019: GBP0.6m loss).
-- Net cash and cash equivalents** at the period end of GBP5.0m
(H1 2019: GBP3.4m; 31 December 2019: GBP5.1m).
-- The basic loss per share for the period was 4.05 pence (H1
2019: basic loss per share 0.49 pence).
-- Currently own and operate 24 restaurants, with a further 4 franchise restaurants.
Note that these results are impacted by COVID-19 related
closures affecting all restaurants in the Group from 19th March
2020.
*Adjusted EBITDA was calculated from the profit/(loss) before
taxation adding back interest, depreciation, share-based payments
and non-recurring costs (note 12). The Group has applied IFRS 16
Leases that results in the restatement of the previous financial
statements (note 2).
**Net cash after deferral of COVID-19 direct related payments
and provisions amounting to GBP3.8m, the 'normalised' cash position
would be GBP1.2m.
Richard Kleiner, Non-Executive Chairman, said: "There is no
hiding from the fact that we are facing unprecedented times across
UK hospitality, and with that, market conditions will inevitably
continue to be challenging for our business. However, I am greatly
encouraged by the strength of the Comptoir brand with its excellent
quality, healthy food served in the safest possible environment,
whilst retaining the genuine feel of family and friendly
hospitality that forms the very heart and soul of our offering. Of
course, none of this would be remotely possible without the truly
immense dedication from every one of our team members who work
tirelessly, day in day out, to make all this happen. I am confident
that we will emerge all the stronger out of this crisis, working in
collaboration with all of our partners, as consumer confidence
lifts and normality once again resumes."
For further information:
Comptoir Group plc Tel: +44 (0)20 7486 1111
Chaker Hanna, Chief Executive
Officer
Canaccord Genuity Limited (NOMAD Tel: +44 (0)20 7523 8000
and Broker)
Bobbie Hilliam
Georgina McCooke
Chief executive's review
COVID-19 Update
Trading in the early weeks of 2020 had been in line with
management expectations and then the impact from COVID-19 dealt its
devastating blow with initial Government guidance for people to
avoid visiting bars and restaurants in early March, followed by the
enforced complete national lockdown including the closure of all UK
hospitality.
As a direct result of these lock down measures all the
restaurants within the Group were fully closed for trading on 19
March 2020. The Company had no choice but to enter an immediate
self-protection and cash preservation mode to try to minimise the
unprecedented detrimental impact that this would inevitably have on
the business.
Whilst the number one priority for the Group has always been,
and will certainly always continue to be, ensuring the safety of
all of our employees and guests, t he Board's focus was also to
take all appropriate measures to reduce the financial impact on the
Group, controlling our two most significant costs; labour and rent.
This was to help ensure the Company would do all it could to
survive the impact of the pandemic.
Labour costs
In the immediate aftermath of the closures, and following
announcement of the Government's furlough scheme to support
employees, the Group immediately placed all its employees, barring
a very small number of the central support team, into furlough. At
the same time a significant reduction in directors' remuneration
packages, including three directors receiving no remuneration at
all for a period of six months, ensured that operating costs were
reduced to the minimum to extend our survival for as long as
possible.
It is with deep regret and heavy heart that I report a number of
unavoidable casualties as a direct result of this pandemic, with a
reduction in the overall team by approximately 50% across our
restaurants and Head Office. I sincerely thank them all for being
an integral part of the Comptoir family and wish them all the very
best for their future journeys.
Landlords
The Group immediately entered into negotiations with all
landlords to agree on a sensible way forward which would help
ensure our survival and protect their investments in the long term.
I am pleased to report many of our landlords have been fully
engaging with us in understanding the difficulties that we are all
facing and we have come to mutually agreed positions involving rent
waivers, deferments and deductions from rent deposits and more
importantly turnover rents instead of base rents going forward. I
would like to sincerely thank all the landlords who have engaged
and worked with us so far.
Unfortunately, there are a number of landlords who have not been
as cooperative and we are still in discussions with them as this is
vital for our survival. The rent level post COVID-19 should reflect
the current trading conditions and take into consideration the
uncertainty of trading given future localised, and the potential
for national, Government imposed restrictions, as we need more
certainty on our outgoings at least until the end of 2021.
We took the decision to suspend all but essential capital
expenditure (unless health and safety or other legal obligations
required this) and this includes the postponement of the planned
new site opening. We are now extending this prudent approach to the
postponement of new site openings originally planned for 2021 as a
further precaution to help preserve the financial position of the
Company.
We do appreciate the Government support provided during this
pandemic; namely the business rates relief, the more recent
reduction in VAT to 5% and the August 'Eat Out To Help Out Scheme'.
Although the impact from the latter scheme was limited in the
majority of our restaurants, as they are London based and the
footfall was not present to drive material benefit.
The Board also took the decision to apply for the G
overnment-backed Coronavirus Business Interruption Loan Scheme
("CBILS") and has drawn down on this loan. This additional
borrowing will help protect the cash position particularly with the
requirement to pay the additional liabilities due to landlords,
HMRC and other creditors as a result of deferred payment plans put
in place during this pandemic period and also to give us headroom
for survival during the anticipated low revenue expected for the
second half of 2020 and continuing at least until the end of 2021.
Bank net cash position at the half year of GBP5.0m, however, this
presents a healthier position than usual with the deferral of
COVID-19 direct related payments and provisions amounting to
GBP3.8m, the 'normalised' cash position would be GBP1.2m.
I would like to take this opportunity to thank all of our
stakeholders who in these extraordinary times have worked
collaboratively with us to ensure the ongoing viability of our
business. None more so than our truly fantastic teams, both in the
restaurants and in central supporting roles. I thank you personally
from the very bottom of my heart for your continued patience and
exceptional commitment to our business. The underlying Comptoir
family ethos has never been so important than in times of
unprecedented crisis.
Revenue and Operating Profit
The business traded with all restaurants fully open up until 19
March when, f ollowing guidance by the UK Government, the Board
took the decision to close all restaurants within the Group. This
was closely followed by the Government implementation of complete
lockdown measures, including enforced closure of all restaurants
and leisure sites across the UK.
As a result, revenue for the period was down 61.4% on last year
to GBP6.1m (H1 2019: GBP15.8m). In the period leading up to
closure, revenue had been in line with management expectations.
The Board carried out a full impairment review at the half year
and as a result, impairment of GBP2.6m has been charged, based on
judgement of future cash flow generation from each restaurant. The
Board will revisit these assumptions at the year end and adjust the
impairment provision according to the forecast at that time.
This impairment charge contributed towards the reported IFRS
loss after tax of GBP4.97m (H1 2019: GBP0.6m loss).
The Group has also taken account of the amendment to IFRS16
COVID-19 related rent concessions. Where the rent concession is a
direct consequence of COVID-19 and the reduction does not involve
substantive changes to the lease then the concessions are able to
be credited to the profit and loss. This has resulted in a one-off
credit of GBP302k in the period.
We envisage exiting a small number of leases over the next 12
months, as we continue to discuss with our landlords and assess
trading conditions, we will make these final decisions at the
appropriate time and only if in the best interest of the Group.
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.
Current trading and outlook
The Group began a phased re-opening of its restaurants for full
dining, take away and delivery services from 4th July 2020. As at 1
October we have re-opened 19 of our own operated restaurants
leaving 5 still closed, pending the outcome of ongoing negotiations
with the landlords. Our franchise partners HMS Host have re-opened
three out of the four sites they operate leaving just Dubai Airport
still currently closed. The two franchise restaurants operated by
The Restaurant Group ("TRG") in Heathrow and Gatwick will not
re-open under the TRG franchise agreement, however, we are in early
discussions with airport authorities for the possibility of
reopening them as company owned, or with another franchise partner,
if and when the passenger numbers return to normality in the
future.
Trading in the early stages of re-opening has inevitably been
very challenging with the focus on the health and safety of our
restaurant teams and guests being of ever more increasing paramount
importance. Focus has continued on protecting the cash position,
particularly bearing in mind the large majority of our restaurants
are London based which are still very quiet in terms of footfall,
driven by very low number of tourists, offices still unoccupied and
theatres still closed. Also the need to service the increased
deferred liabilities of the business has placed even more pressure
on the available cash position. With the huge reduction in revenue,
the focus on the control of operational costs and the tightest
possible management of our cash is now absolutely key and continues
to be at the forefront of minds as we navigate through these
unprecedented times for us and the entire UK hospitality.
Cost saving measures introduced include redeployment of field
based Operational Support Managers into the restaurants and reduced
salaries across the central support and executive teams plus all of
our salaried site management teams.
The focus on the health and safety of our team members and
guests has been further enhanced by the implementation of a new
Comptoir app providing our guests with the option to order and pay
safely at the table. Alongside revised rota management protocols
and the introduction of safeguarding equipment and other related
measures, we have sought to optimise protection from the COVID-19
virus.
The introduction of the recent 10pm curfew across hospitality
has placed further pressure on our restaurants. The Company are
mindful of the increasing imposition of Government enforced
localised lock downs and the potential for future wider
restrictions and even national lock downs.
In August this year we announced that Mark Carrick had notified
the Board of his intention to resign from his role as Chief
Financial Officer and will be leaving the business on 10(th)
November 2020. I would like to take the opportunity to thank Mark
for all his commitment and contribution to driving change and
proactive challenge to the business. I am now pleased to advise
that we have sourced a replacement for Mark; Michael Toon joined
the Group as Finance Director on 1 October 2020. Michael brings
with him a wealth of hospitality experience from senior finance
roles with the Casual Dining Group and most recently as Finance
Director of Chopstix.
Chaker Hanna
Chief Executive
13 October 2020
Consolidated statement of comprehensive income
For the half-year ended 30 June 2020
Notes Half-year Half-year Year ended
ended 30 ended 30 31 December
June 2020 June 2019 2019
(Restated)
GBP GBP GBP
Revenue 6,090,758 15,773,983 33,403,402
Cost of sales (1,597,547) (4,257,068) (8,547,180)
Gross profit 4,493,211 11,516,915 24,856,222
Distribution expenses (1,785,442) (4,211,604) (8,605,186)
Administrative expenses (4,604,293) (7,511,374) (16,566,053)
Other income - 264,680 1,020,090
Rent concessions 302,413 - -
Impairment costs 8 (2,572,443) (54,163) (129,001)
Payroll provision 3 (353,012) - -
Operating (loss)/profit 3 (4,519,566) 4,454 576,072
Finance costs (482,589) (552,139) (1,096,462)
Loss before tax (5,002,155) (547,685) (520,390)
Taxation charge 30,695 (55,038) (146,573)
Loss for the year (4,971,460) (602,723) (666,963)
Other comprehensive income - - -
Total comprehensive loss for
the year (4,971,460) (602,723) (666,963)
---------------------------------- ------ ----------------------- ----------------------- -----------------------
Basic loss per share (pence) 6 (4.05) (0.49) (0.54)
Diluted loss per share (pence) 6 (4.05) (0.49) (0.54)
---------------------------------- ------ ----------------------- ----------------------- -----------------------
Adjusted EBITDA:
Loss before tax - as above (5,002,155) (547,685) (520,390)
Add back:
Depreciation 8 2,011,000 1,993,768 4,036,956
Finance costs 482,589 552,139 1,096,462
Impairment of assets 8 2,572,443 54,163 129,001
EBITDA 63,877 2,052,385 4,742,029
Share-based payments expense 3 26,394 19,441 53,963
Restaurant opening costs 3 7,032 8,370 18,075
Payroll provision 3 353,012 - -
Loss on disposal of fixed assets - - 298,022
Abandoned project costs - - 156,849
Adjusted EBITDA 450,315 2,080,196 5,268,938
---------------------------------- ------ ----------------------- -----------------------
All the above results are derived from continuing
operations.
Consolidated balance sheet
At 30 June 2020
Notes 30 June 2020 30 June 2019 31 December
2019
(Restated)
GBP GBP GBP
Assets
Non-current assets
Intangible assets 7 55,267 87,675 87,675
Property, plant and equipment 8 9,688,797 11,674,631 11,287,115
Right-of-use assets 8 19,558,261 25,378,583 23,951,079
Deferred tax asset 262,137 130,254 139,588
----------------------------------------------------------- ----------------------------------- ------------------------------------ ----------------------------------- -------------------------------------
29,564,462 37,271,143 35,465,457
Current asset
Inventories 494,878 633,335 594,409
Trade and other receivables 1,388,244 2,855,194 2,202,974
Cash and cash equivalents 5,009,864 3,369,783 5,076,610
----------------------------------------------------------- ----------------------------------- ------------------------------------ ----------------------------------- -------------------------------------
6,892,986 6,858,312 7,873,993
Total assets 36,457,448 44,129,455 43,339,450
----------------------------------------------------------- ----------------------------------- ------------------------------------ ----------------------------------- -------------------------------------
Liabilities
Current liabilities
Borrowings (181,490) (374,820) (261,611)
Trade and other payables (5,439,441) (4,703,111) (5,015,604)
Lease liabilities (2,113,151) (2,415,531) (2,481,471)
Current tax liabilities (183,518) (158,023) (184,125)
----------------------------------------------------------- ----------------------------------- ------------------------------------ ----------------------------------- -------------------------------------
(7,917,600) (7,651,485) (7,942,811)
Non-current liabilities
Borrowings (15,817) (140,727) (55,735)
Provisions for liabilities (808,452) (162,221) (438,570)
Lease liabilities (21,837,360) (25,394,660) (24,170,903)
Deferred tax liability (262,137) (189,496) (170,283)
----------------------------------------------------------- ----------------------------------- ------------------------------------ ----------------------------------- -------------------------------------
(22,923,766) (25,887,104) (24,835,491)
Total liabilities (30,841,366) (33,538,589) (32,778,302)
----------------------------------------------------------- ----------------------------------- ------------------------------------ ----------------------------------- -------------------------------------
Net assets 5,616,082 10,590,866 10,561,148
----------------------------------------------------------- ----------------------------------- ------------------------------------ ----------------------------------- -------------------------------------
Equity
Share capital 10 1,226,667 1,226,667 1,226,667
Share premium 10,050,313 10,050,313 10,050,313
Other reserves 109,102 48,186 82,708
Retained losses (5,770,000) (734,300) (798,540)
----------------------------------------------------------- ----------------------------------- ------------------------------------ ----------------------------------- -------------------------------------
Total equity - attributable
to equity shareholders
of the company 5,616,082 10,590,866 10,561,148
----------------------------------------------------------- ----------------------------------- ------------------------------------ ----------------------------------- -------------------------------------
Consolidated statement of changes in equity
For the half-year ended 30 June 2020
Notes Share Share Other Retained Total
capital premium reserves losses equity
GBP GBP GBP GBP GBP
At 1 January 2020 1,226,667 10,050,313 82,708 (798,540) 10,561,148
Total
comprehensive
loss
Loss for the period - - - (4,971,460) (4,971,460)
Transactions with
owners
Share-based payments - - 26,394 - 26,394
At 30 June 2020 1,226,667 10,050,313 109,102 (5,770,000) 5,616,082
---------------------------- ------------------ -------------------- ---------- -------------------- ------------
At 1 January 2019 1,226,667 10,050,313 28,745 635,252 11,940,977
Impact of restatement
of prior period error - - - (766,829) (766,829)
---------------------------- ------------------ -------------------- ---------- -------------------- ------------
At 1 January 2019
(Restated) 1,226,667 10,050,313 28,745 (131,577) 11,174,148
Total
comprehensive
loss
Loss for the period - - - (602,723) (602,723)
Transactions with
owners
Share-based payments - - 19,441 - 19,441
At 30 June 2019 1,226,667 10,050,313 48,186 (734,300) 10,590,866
---------------------------- ------------------ -------------------- ---------- -------------------- ------------
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 - - 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 half-year ended 30 June 2020
Notes Half-year Half-year Year ended
ended 30 ended 30 31 December
June 2020 June 2019 2019
(Restated)
GBP GBP GBP
Operating activities
Cash inflow from
operations 11 1,613,637 1,351,549 5,654,971
Interest paid (4,723) (13,048) (21,730)
Tax paid (606) - (93,981)
Net cash from
operating
activities 1,608,308 1,338,501 5,539,260
--------------------- --------------- ----------------------------- ------------------------------- --------------------------
Investing activities
Purchase of
property, plant
& equipment 8 (97,494) (685,470) (1,287,749)
Net cash used in
investing
activities (97,494) (685,470) (1,287,749)
--------------------- --------------- ----------------------------- ------------------------------- --------------------------
Financing activities
Payment of lease
liabilities (1,457,522) (1,680,332) (3,373,788)
Bank loan repayments (120,038) (227,585) (425,786)
Net cash used in
financing
activities (1,577,560) (1,907,917) (3,799,574)
--------------------- --------------- ----------------------------- ------------------------------- --------------------------
(Decrease)/Increase
in cash
and cash
equivalents (66,746) (1,254,886) 451,937
Cash and cash
equivalents
at beginning of
year 5,076,610 4,624,673 4,624,673
Cash and cash
equivalents
at end of year 5,009,864 3,369,785 5,076,610
--------------------- --------------- ----------------------------- ------------------------------- --------------------------
Notes to the financial information
For the half-year ended 30 June 2020
1. Basis of preparation
The consolidated financial information for the half-year ended
30 June 2020, has been prepared in accordance with the accounting
policies the Group applied in the Company's latest annual audited
financial statements and are expected to be applied in the annual
financial statements for the year ending 31 December 2020. These
accounting policies are based on the EU-adopted International
Financial Reporting Standards ("IFRS") and International Financial
Reporting Interpretation Committee ("IFRIC") interpretations. The
consolidated financial information for the half-year ended 30 June
2020 has been prepared in accordance with IAS 34: 'Interim
Financial Reporting', as adopted by the EU, and under the
historical cost convention.
The financial information relating to the half-year ended 30
June 2020 is unaudited and does not constitute statutory financial
statements as defined in section 434 of the Companies Act 2006. It
has, however, been reviewed by the Company's auditors and their
report is set out at the end of this document. The comparative
figures for the year ended 31 December 2019 have been extracted
from the consolidated financial statements, on which the auditors
gave an unqualified audit opinion and did not include a statement
under section 498 (2) or (3) of the Companies Act 2006. The annual
report and accounts for the year ended 31 December 2019 has been
filed with the Registrar of Companies.
The Group's financial risk management objectives and policies
are consistent with those disclosed in the 2019 annual report and
accounts.
The half-yearly report was approved by the board of directors on
13 October 2020. The half-yearly report is available on the
Comptoir Libanais website, www.comptoirlibanais.com , and at
Comptoir Group's registered office, Unit 2, Plantain Place, Crosby
Row, London Bridge, SE1 1YN.
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.
All appropriate measures have been put in place to reduce the
impact on the Group, including cost reduction and postponement of
all new site openings and other non-essential capital expenditure
projects. The Board's latest forecasts take into consideration the
three months closure up to 4 July 2020 followed by the subsequent
phased re-opening of 19 sites as at 1 October 2020. Revenue
forecasts have been significantly reduced for the following 18
months. The Board has factored in the agreements which have been
reached with landlords, however, there are still several ongoing
negotiations in this area.
The Board has also considered the severe but possible downside
scenario of another complete closure or further delays in
re-opening the remaining restaurants. This continues to be under
review given current market conditions associated with COVID-19.
The Group currently has sufficient cash reserves 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 this
half-yearly report.
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 half-yearly report 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 this
half-yearly report.
2. Changes in accounting policies
The accounting policies adopted in the preparation of the
consolidated financial information for the half-year ended 30 June
2020 are consistent with those followed in the preparation of the
Group's annual consolidated financial statements for the year ended
31 December 2019, except for the amendments disclosed below:
-- Amendments to References to the Conceptual Framework in IFRS Standards.
-- Amendments to IAS 1 and IAS 8: Definition of Material
-- Amendments to IFRS 16 COVID-19 Related Rent Concessions
Their adoption did not have a material effect on the accounts
except for the Amendments to IFRS 16 COVID-19 Related Rent
Concessions.
Amendments to IFRS 16 COVID-19 Related Rent Concessions
The practical expedient was applied whereby the lessee will
account for any changes to their lease payments as if the change
were not a lease modification.
In order to apply the practical expedient all of the following
criteria was met:
-- The revised consideration for the lease is substantially the
same as, or less than the original consideration immediately
preceding the change. Rent concessions which increase the total
consideration, but only for the time value of money, will be able
to apply the practical expedient;
-- Any reduction in payments only affects payments originally
due on or before 30 June 2021. This would include a situation where
there are reduced payments before 30 June 2021 followed by
increased payments that extend beyond 30 June 2021; and
-- There are no substantive changes to other terms and
conditions of the lease. This assessment would consider both
qualitative and quantitative factors. It has been specifically
noted by the IASB that a three-month rent holiday before 30 June
2021 followed by three additional months of substantially
equivalent payments at the end of the lease would not constitute a
substantive change to the lease.
The practical expedient was applied consistently to all lease
contracts with similar characteristics and in similar
circumstances. This resulted in GBP302,413 being recognised as a
credit to income in the profit and loss for the reporting period
reflecting the changes in lease payments arising from the
application of this exemption.
Critical estimates, judgements and errors
Restatement of prior period error
It was identified in the half-yearly report for 30 June 2019
that two leases had been omitted in error during the application of
the IFRS 16 transition adjustments. The error resulted in a
material understatement of the right of use assets and lease
liabilities presented in the half-yearly report. These two leases
were subsequently included in 31 December 2019 financial statements
and therefore did not require a restatement for that period.
The error has been corrected by restating each of the affected
financial statement line items for the period as follows:
Statement of Comprehensive Income
(Extract)
30 June (Increase)/ 30 June
2019 Decrease 2019
(Restated)
GBP GBP GBP
Administrative expenses (7,596,184) 30,647 (7,565,537)
Operating profit (26,193) 30,647 4,454
Finance costs (501,566) (50,573) (552,139)
Loss before tax (527,759) (19,926) (547,685)
Statement of Financial Position (Extract)
30 June Increase/ 30 June
2019 (Decrease) 2019
(Restated)
GBP GBP GBP
Right-of-use assets 22,889,144 2,489,439 25,378,583
Trade and other receivables 3,546,975 (691,781) 2,855,194
Lease liabilities (25,225,778) (2,584,413) (27,810,191)
Net assets 11,377,621 (786,755) 10,590,866
Equity
Retained losses 52,455 (786,755) (734,300)
------------------------------------------- -------------------- ------------------ ---------------------
Statement of Changes in Equity (Extract)
30 June Increase/ 30 June
2019 (Decrease) 2019
(Restated)
GBP GBP GBP
Retained earnings at 1 January 2019 635,252 (766,829) (131,577)
Loss for the year (582,797) (19,926) (602,723)
Retained earnings at 30 June 2019 52,455 (786,755) (734,300)
Statement of Cashflow (Extract)
30 June Increase/ 30 June
2019 (Decrease) 2019
(Restated)
GBP GBP GBP
Operating activities
Cash inflow from operations 1,740,065 (388,518) 1,351,547
Interest paid (501,566) 488,518 (13,048)
Net cash from operating activities 1,238,499 100,000 1,338,499
------------------------------------------- -------------------- ------------------ ---------------------
Financing activities
Payment of lease liabilities (1,580,332) (100,000) (1,680,332)
Net cash used in financing activities (1,580,332) (100,000) (1,680,332)
------------------------------------------- -------------------- ------------------ ---------------------
Basic and diluted earnings per share for the prior year have
also been restated. The amount of the correction for basic and
diluted earnings per share was a decrease of GBP0.01 and GBP0.02
per share respectively.
Deferred tax assets
Historically, deferred tax assets had been recognised in respect
of the total unutilised tax losses within the Group. A condition of
recognising this amount depended on the extent that it was probable
that future taxable profits will be available.
Given the uncertainty of the current trading outlook, management
have decided to only recognise a deferred tax asset amount of
GBP262,137, being equal to the deferred tax liability amount and
therefore have an unprovided deferred tax asset amount of
GBP354,792.
3. Group operating loss
Half-year Half-year Year ended
ended 30 ended 30 31 December
June 2020 June 2019 2019
(Restated)
GBP GBP GBP
This is stated after
(crediting)/charging:
Operating lease
charges 101,634 441,674 787,222
Rent concessions (302,413) - -
Lease term
modifications 117,800 - -
Share-based payments
expense
(see note 5) 26,394 19,441 53,963
Restaurant opening
costs 7,032 8,370 18,075
Depreciation of
property,
plant and equipment
(see note
8) 2,011,000 1,993,768 4,036,957
Impairment of assets
(see
note 7 & 8) 2,572,443 54,163 129,001
Payroll provision 353,012 - -
Loss on disposal of
fixed
assets - - 298,022
Development of the
Grab &
Go concept
subsequently
cancelled - - 74,551
Costs in relation to
unopened
new sites - - 67,211
Reclassification of
legal
fees - - 15,087
Auditors' remuneration - - 51,750
----------------------- ------------------------------- ------------------------------- -------------------------------
Half-year Half-year Year ended
ended 30 ended 30 31 December
June 2020 June 2019 2019
GBP GBP GBP
Pre-opening costs 7,032 3,982 3,982
Post-opening costs - 4,388 14,093
7,032 8,370 18,075
----------------------- ------------------------------- ------------------------------- -------------------------------
The payroll provision relates to a one-off provision as a result
of a review of the current pension scheme in place as part of a
planned transition to Payroll Bureau services.
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 post-opening
costs for 3 months is shown above.
4. Operating segments
The Group has only one operating segment: the operation of
restaurants with Lebanese and Middle Eastern offering and one
geographical segment (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 revenue.
5. Share options and share-based payment charge
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. The 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.
The total share-based payment charge for the period was
GBP26,394 (half-year ended 30 June 2019: GBP19,441 and year ended
31 December 2019: GBP53,963).
6. Loss per share
The Company had 122,666,667 ordinary shares of GBP0.01 each in
issue at 30 June 2020. The basic and diluted loss per share
figures, is based on the weighted average number of shares in issue
during the periods. The basic and diluted loss per share figures
are set out below.
Half-year Half-year Year ended
ended 30 ended 30 31 December
June 2020 June 2019 2019
(Restated)
GBP GBP GBP
Loss attributable
to shareholders (4,971,460) (602,723) (666,963)
Number Number Number
Weighted average
number of shares
For basic
earnings per
share 122,666,667 122,666,667 122,666,667
Adjustment for
options
outstanding - 597,713 180,385
For diluted
earnings per
share 122,666,667 123,264,380 122,847,052
------------------ -------------------------------- ------------------------------- -------------------------------
Pence per Pence per Pence per
share share share
Loss per share:
Basic (pence)
From loss for the
year (4.05) (0.49) (0.54)
Diluted (pence)
From loss for the
year (4.05) (0.49) (0.54)
The loss per share and diluted loss 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 shares in the
open market in order to reduce the number of new shares that would
need to be issued. As the shares were not 'in the money' as at 30
June 2020 and consequently would be antidilutive, no adjustment was
made in respect of the share options outstanding to determine the
diluted number of options.
7. Intangible assets
Intangible fixed assets consist of goodwill from the acquisition
of Agushia Limited. During the period, the Group spent GBPnil on
intangible assets (half-year ended 30 June 2018: GBPnil and year
ended 31 December 2019: GBPnil).
Group Goodwill Total
GBP GBP
Cost
At 1 January 2020 89,961 89,961
Additions - -
-------------------------------- --------------------------------
At 30 June 2020 89,961 89,961
----------------------------------------- -------------------------------- --------------------------------
Accumulated amortisation and impairment
At 1 January 2020 (2,286) (2,286)
Amortised during the year - -
Impairment during the year (32,408) (32,408)
-------------------------------- --------------------------------
At 30 June 2020 (34,694) (34,694)
----------------------------------------- -------------------------------- --------------------------------
Net Book Value as at 30 June 2020 55,267 55,267
----------------------------------------- -------------------------------- --------------------------------
Net Book Value as at 30 June 2019 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. During the year,
100% of the goodwill allocated to Yalla Yalla Winsley, being
GBP32,408 was impaired based on the impairment test. The remaining
goodwill related to Yalla Yalla Soho. No impairment of goodwill was
considered necessary in relation to this site.
8. Property, plant and equipment
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
2020 29,095,737 11,514,602 5,151,883 3,116,519 53,430 48,932,171
Additions - 28,307 58,034 11,153 - 97,494
Disposals (1,537,594) - - - - (1,537,594)
At 30 June
2020 27,558,143 11,542,909 5,209,917 3,127,672 53,430 47,492,071
-------------- ------------------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------
Accumulated
depreciation
and
impairment
At 1 January
2020 (5,144,658) (4,647,857) (2,613,387) (1,280,703) (7,373) (13,693,978)
Depreciation
during
the year (1,336,027) (385,259) (194,613) (94,333) (768) (2,011,000)
Impairment
during
the year (1,519,197) (473,340) (365,161) (182,337) - (2,540,035)
At 30 June
2020 (7,999,882) (5,506,456) (3,173,161) (1,557,373) (8,141) (18,245,013)
-------------- ------------------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------
Net book
value
As at 30 June
2020 19,558,261 6,036,453 2,036,756 1,570,299 45,289 29,247,058
As at 30 June
2019 25,378,583 7,051,181 2,722,387 1,892,340 8,723 37,053,214
As at 31
December
2019 23,951,079 6,866,745 2,538,496 1,835,817 46,057 35,238,194
-------------- ------------------------- ------------------------- ------------------------- ------------------------- ------------------------- -------------------
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 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 of this
half-yearly report, the fair value of the Group's assets and
investments has declined as a result of the virus outbreak and the
resulting temporary closure of the Group's restaurants. These
factors have been incorporated into our review.
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 4.3%
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 and forecasts have considered the impact of
COVID-19. Management has also 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 GBP2,572,443
(half-year ended 30 June 2019: GBP54,163 and year ended 31 December
2019: GBP129,001) was recorded for the period.
9. Dividends
No dividends were distributable to equity holders during the
half-year ending 30 June 2020 (half-year ended 30 June 2019: GBPnil
and year ended 31 December 2019: GBPnil).
10. Share capital
Authorised, issued Number of 1p shares
and fully paid
Half-year Half-year Year ended
ended 30 ended 30 31 December
June 2020 June 2019 2019
Brought forward 122,666,667 122,666,667 122,666,667
Issued in the period - - -
At 31 December 122,666,667 122,666,667 122,666,667
---------------------- ------------------------------ ------------------------------ ------------------------------
Nominal value
Half-year Half-year Year ended
ended 30 ended 30 31 December
June 2020 June 2019 2019
GBP GBP GBP
Brought forward 1,226,667 1,226,667 1,226,667
Issues in the period - - -
At 31 December 1,226,667 1,226,667 1,226,667
---------------------- ------------------------------ ------------------------------ ------------------------------
11. Cash flow from operations
Reconcilliation of (loss)/profit to cash generated from
operations
Half-year Half-year Year ended
ended 30 ended 30 31 December
June 2020 June 2019 2019
(Restated)
GBP GBP GBP
Operating
(loss)/profit for
the year (4,519,566) 4,454 576,072
Depreciation 2,011,000 1,993,768 4,036,957
Loss on disposal of
fixed
assets - - 299,272
Impairment of assets 2,572,443 54,163 129,001
Share-based payment
charge 26,394 19,441 53,963
Rent concessions (302,413) - -
Lease term 117,800 - -
adjustments
Payroll provision 353,012 - -
Movements in working
capital
Decrease in
inventories 99,532 73,406 112,332
Decrease/(Increase
)in trade
and other
receivables 814,731 (996,746) (344,532)
Increase in payables
and
provisions 440,704 203,063 791,906
Cash from operations 1,613,637 1,351,549 5,654,971
--------------------- -------------------------------- -------------------------------- ---------------------------
12. Adjusted EBITDA
Adjusted EBITDA was calculated from the profit/loss before
taxation adding back interest, depreciation, share-based payments
and non-recurring costs incurred in opening new sites, as
follows:
Half-year Half-year Year ended
ended 30 ended 30 31 December
June 2020 June 2019 2019
(Restated)
GBP GBP GBP
Operating
(loss)/profit (4,519,566) 4,454 576,072
Add back:
Depreciation 2,011,000 1,993,768 4,036,957
Impairment of
assets 2,572,443 54,163 129,001
Share-based
payments 26,394 19,441 53,963
Payroll
provision 353,012 - -
Loss on
disposal of
fixed assets - - 298,022
Abandoned
project costs - - 156,849
EBITDA 443,283 2,071,826 5,250,864
Non-recurring
costs incurred
in opening new
sites 7,032 8,370 18,075
Adjusted EBITDA 450,315 2,080,196 5,268,939
-------------------------------- -------------------------------- --------------------------------
13. Subsequent events
In August the Group drew down on an additional bank loan under
the Government's Coronavirus Business Interruption Loan Scheme
('CBILS'). As at 1 October, 19 of the owner operated restaurants
were open leaving 5 still closed, pending the outcome of ongoing
negotiations with the landlords. HMS Host have reopened three out
of the four sites they operate leaving just Dubai Airport still
currently closed. The two franchise restaurants operated by The
Restaurant Group ("TRG") in Heathrow and Gatwick will not
re-open.
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END
IR FFSFWDESSELS
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October 14, 2020 02:00 ET (06:00 GMT)
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