TIDMTAST
RNS Number : 4760B
Tasty PLC
21 September 2018
21 September 2018
Tasty plc
("Tasty" or the "Group")
Unaudited Interim Results for the 26 weeks ended 1 July 2018
Highlights:
-- Revenue down 5.7% to GBP23.0m on the comparative period (H1 2017 - GBP24.4m)
-- Impairment charge of GBP11.2m and onerous lease provision of GBP1.7m
-- Net cash inflow for the period was GBP1.1m (H1 2017 - outflow GBP3.4m)
-- Net debt as at 1 July 2018 of GBP4.1m (2 July 2017 - GBP5.4m)
Chairman's statement
Introduction
The Group is currently trading from 60 restaurants; 54 Wildwood
and 6 dim t restaurants.
As highlighted previously the market conditions in 2018 continue
to be challenging and have been exacerbated by unfavourable weather
conditions and the World Cup. This is not unique to Tasty and has
been evidenced by the well-documented closures across the casual
dining market and throughout the retail sector.
In February 2018 we implemented major operational structural
changes and are beginning to see early signs of improvements which
we expect to continue in the second half of the year.
Business review
In spite of the tough trading conditions the Directors, believe
the Group's brands remain attractive to consumers and are focused
on optimising the performance of the estate.
Rationalise the estate
In the light of the changes to the general trading environment,
we are continuously assessing our estate to identify where
improvements can be made. Our estate is made up of a growing number
of sites which are outperforming expectations and we will continue
to invest in those restaurants. Where sites are underperforming, we
are implementing turnaround strategies and in many instances, we
have witnessed significant improvements. Where such measures are
not successful or if we feel we can realise maximum value, we will
continue to seek to dispose of those properties. We have closed 3
sites during the period under review, two of which have been
sold.
The Board has no plans to open any new sites at the current time
and, in line with the change of strategy from accelerated to
suspended expansion, we continue to seek to optimise our capital
structure with a view to utilising the proceeds of property
disposals to reduce gearing. We are also continuing to review our
funding arrangements and as a result, we have decided to reduce our
funding costs by cancelling the unutilised GBP5 million Revolving
Credit Facility, that was previously earmarked for new restaurant
openings. This will reduce financing costs by circa GBP35,000 per
annum.
Food offering
Menu development and improvement is integral to our strategy to
keep the brand relevant. We continue to innovate and review and are
constantly looking at ways of making the offer more exciting
including vegan and gluten free menus.
Investing in our people
We have invested in our training infrastructure and launched
additional apprenticeship programmes, which will be expanded over
the next 6 months. For every level of the team, we will be
introducing a comprehensive career pathway to support their
development, enhance job satisfaction and increase staff
retention.
Investing in our Structure
We have restructured the operational team to improve efficiency
and reduce costs. This has resulted in annualised cost savings of
approximately GBP300,000 per annum and a more responsive and
motivated team with a greater focus on cost control and sales
growth.
Results
Sales are down 5.7% on the corresponding period to GBP22,977,000
(2017 - GBP24,375,000). Headline operating loss, before pre-opening
costs, non-trade items and interest, was GBP119,000 (2017 -
GBP544,000 profit) and pre-tax loss before pre-opening costs and
non-trade items was GBP309,000 (2017 - GBP210,000 profit).
In the light of current trading conditions and the retail
landscape, the Group has undertaken a further review of its estate
during the period and has recognised an impairment charge of
GBP11,185,000 and an onerous lease provision of GBP1,688,000. After
taking into account all non-trade adjustments the Group has a
stated loss after tax for the period of GBP10,694,000 (H1 2017 -
loss GBP9,302,000).
Cash flows and financing
During the period capital expenditure of GBP670,000 (H1 2017 -
GBP4,414,000) was incurred.
Overall, the net cash inflow for the period was GBP1,097,000 (H1
2017 - outflow GBP3,425,000). As at 1 July 2018, the Group had net
borrowings of GBP4,060,000 (2 July 2017 - GBP5,421,000). The Group
has an available banking facility of GBP7,000,000.
Outlook
Market conditions remain difficult, but we are starting to see
the benefits of the infrastructure changes that have been, and
continue to be, implemented. Our focus will continue to be growing
sales and maximising value. We have a dedicated team that is
leading the Group through the challenges we are facing and we would
like to thank all of them for their hard work. The Directors
believe that our restaurants are appealing to customers and, once
the economic climate has improved, the Group is well placed to
resume growth.
K Lassman
Chairman
Tasty plc
21 September 2018
Enquiries:
Tasty plc Tel: 020 7637 1166
Jonny Plant, Chief Executive
Cenkos Securities Tel: 020 7397 8900
Mark Connelly / Cameron MacRitchie
The information contained within the announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the
publication of this announcement via Regulatory Information Service
("RIS"), this inside information is now considered to be in the
public domain.
Consolidated statement of comprehensive income
for the 26 weeks ended 1 July 2018 (unaudited)
26 weeks 26 weeks 52 weeks
to to ended
1 July 2 July 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
Revenue 22,997 24,375 50,309
Cost of sales (22,684) (23,482) (48,402)
------------------------------------- --------- ------------- -----------------------
Gross profit 313 893 1,907
Total operating expenses (11,738) (10,056) (11,175)
Operating profit before highlighted
items (119) 544 1,235
Highlighted items (11,306) (9,707) (10,503)
------------------------------------- --------- ------------- -----------------------
Operating (loss)/profit (11,425) (9,163) (9,268)
Finance income 0 0 1
Finance expense (125) (119) (203)
Loss before tax (11,550) (9,282) (9,470)
Income tax 856 (20) 1,195
Loss and total comprehensive income
for period and attributable to
owners of the parent (10,694) (9,302) (8,275)
Loss per share attributable to
the ordinary
equity owners of the parent
Basic and diluted (17.88p) (15.56p) (13.84p)
Highlighted items - charged to
operating expenses
26 weeks 26 weeks 52 weeks
to to ended
1 July 2 July 31 December
2018 2017 2017
Profit on disposal of property
plant and equipment 1,942 - 1,237
Pre-openings costs - (165) (413)
Onerous lease provision (1,688) - (1,635)
Restructuring costs (311) - -
Impairment of lease premium (890) (172) (96)
Impairment of property, plant and
equipment (10,294) (9,320) (9,462)
Share based payments (65) (50) (134)
------------------------------------- --------- ------------- -----------------------
Total highlighted items (11,306) (9,707) (10,503)
Consolidated statement of changes in equity
for the 26 weeks ended 1 July 2018 (unaudited)
Share Share Merger Retained Total
Capital Premium reserve deficit equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 December 2017 5,980 21,376 992 (6,290) 22,058
Issue of ordinary shares - - - - -
Total comprehensive income
for the period - - - (10,694) (10,694)
Share based payments - credit
to equity - - - 65 65
Balance at 01 July 2018 5,980 21,376 992 (16,919) 11,429
Balance at 01 January 2017 5,975 21,348 992 1,851 30,166
Issue of ordinary shares 5 28 - - 33
Total comprehensive income
for the period - - - (9,302) (9,302)
Share based payments - credit
to equity - - - 50 50
Balance at 02 July 2017 5,980 21,376 992 (7,401) 20,947
Balance at 01 January 2017 5,975 21,348 992 1,851 30,166
Issue of ordinary shares 5 28 - - 33
Total comprehensive income
for the period - - - (8,275) (8,275)
Share based payments - credit
to equity - - - 134 134
Balance at 31 December 2017 5,980 21,376 992 (6,290) 22,058
Consolidated balance sheet
At 1 July 2018 (unaudited)
26 weeks 26 weeks 52 weeks
to to ended
1 July 2 July 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
Non-current assets
Intangible assets 469 444 470
Property, plant and equipment 17,289 27,844 28,331
Pre-paid operating lease
charges 467 1,833 1,428
Other non-current assets 278 278 278
Deferred Tax 604 - -
Total non-current assets 19,107 30,399 30,507
-------------------------------- --------- --------- -------------------
Current assets
Inventories 2,543 2,442 2,655
Trade and other receivables 5,006 4,195 6,257
Pre-paid operating lease
charges 143 114 143
Cash and cash equivalents 2,940 1,579 1,843
Total current assets 10,632 8,330 10,898
-------------------------------- --------- --------- -------------------
Total assets 29,739 38,729 41,405
-------------------------------- --------- --------- -------------------
Current liabilities
Trade and other payables (6,767) (8,191) (9,202)
Corporation Tax Liabilities - (407) -
Borrowings (2,332) (583)
Total liabilities (9,099) (8,598) (9,785)
-------------------------------- --------- --------- -------------------
Non-current liabilities
Provisions (3,348) (30) (1,660)
Lease incentives (1,195) (1,168) (1,233)
Deferred tax liability - (986) (252)
Long-term borrowings (4,668) (7,000) (6,417)
Total non-current liabilities (9,211) (9,184) (9,562)
-------------------------------- --------- --------- -------------------
Total liabilities (18,310) (17,782) (19,347)
-------------------------------- --------- --------- -------------------
Total net assets 11,429 20,947 22,058
-------------------------------- --------- --------- -------------------
Equity
Share capital 5,980 5,980 5,980
Share premium 21,376 21,376 21,376
Merger reserve 992 992 992
Retained deficit (16,919) (7,401) (6,290)
Total equity 11,429 20,947 22,058
-------------------------------- --------- --------- -------------------
Consolidated cash flow statement
for the 26 weeks ended 1 July 2018 (unaudited)
26 weeks 26 weeks 52 weeks
to to ended
1 July 2 July 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
Operating activities
Cash generated from operations (2,259) 1,075 2,785
Corporation tax paid - - -
Net cash inflow from operating activities (2,259) 1,075 2,785
------------------------------------------- --------- --------- ------------
Investing activities
Proceeds from sale of property,
plant and equipment 4,150 - 975
Purchase of property, plant and
equipment (670) (4,414) (6,752)
Interest received - - 1
Net cash flows used in investing
activities 3,481 (4,414) (5,776)
------------------------------------------- --------- --------- ------------
Financing activities
Net proceeds from issues of ordinary
shares - 33 33
Bank loan receipt - - -
Bank loan repayment - - -
Interest paid (125) (119) (203)
Net cash flows used in financing
activities (125) (86) (170)
------------------------------------------- --------- --------- ------------
Net increase in cash and cash equivalents 1,097 (3,425) (3,161)
Cash and cash equivalents as beginning
of the period 1,843 5,004 5,004
Cash and cash equivalents as at
1st July 2018 2,940 1,579 1,843
------------------------------------------- --------- --------- ------------
Notes to the condensed financial statements
for the 26 weeks ended 1 July 2018 (unaudited)
1 General information
Tasty plc ("Tasty") is a public limited company incorporated in
the United Kingdom under the Companies Act (registration number
5826464). The Company is domiciled in the United Kingdom and its
registered address is 32 Charlotte Street, London, W1T 2NQ. The
Company's ordinary shares are traded on the Alternative Investment
Market of the London Stock Exchange ("AIM"). Copies of this Interim
Report or the Annual Report and Financial Statements may be
obtained from the above address or on the investor relations
section of the Company's website at www.dimt.co.uk.
2 Basis of accounting
The condensed financial statements have been prepared using
accounting policies consistent with International Financial
Reporting Standards (IFRS) and International Financial Reporting
Interpretations Committee (IFRIC) interpretations as endorsed by
the European Union. The same accounting policies, presentation and
methods of computation have been followed in the preparation of
these results as were applied in the Company's latest annual
audited financial statements.
The financial information for the 26 weeks ended 1 July 2018 has
not been subject to an audit nor a review in accordance with
International Standard on Review Engagements 2410, Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity, issued by the Auditing Practices Board.
The financial information for the period ended 31 December 2017
does not constitute the full statutory accounts for that period.
The Annual Report and Financial Statements for 2017 have been filed
with the Registrar of Companies. The Independent Auditors' Report
on the Annual Report and Financial Statements for 2017 was
unqualified, did not draw attention to any matters by way of
emphasis, and did not contain a statement under 498(2) or 498(3) of
the Companies Act 2006.
The condensed financial statements are presented in sterling and
all values are rounded to the nearest thousand pounds
(GBP'000).
Except when otherwise indicated, the consolidated accounts
incorporate the financial statements of Tasty plc and its
subsidiary, Took Us A Long Time Limited, made up to the relevant
period end.
3 Income tax
The income tax charge has been calculated by reference to the
estimated effective corporation tax and deferred tax rates of 19%
(2017 - 20%).
4 Loss per share
26 weeks 26 weeks
to to 52 weeks
1 July 2 July 31 December
2018 2017 2017
Pence Pence Pence
Loss per ordinary share (17.88) (15.56) (13.84)
The basic and diluted loss per share figures are calculated by
dividing the net loss for the period attributable to shareholders
by the weighted average number of ordinary shares in issue during
the period. The diluted earnings per share figure allows for the
dilutive effect of the conversion into ordinary shares of the
weighted average number of options outstanding during the period.
Options are only taken into account when their effect is to reduce
basic earnings per share.
Loss per share have been calculated using the numbers shown
below:
26 weeks 26 weeks
to to 52 weeks
1 July 2 July 31 December
2018 2017 2017
number number number
'000 '000 '000
Weighted average ordinary
shares (basic) 59,795 59,763 59,787
26 weeks 26 weeks
to to 52 weeks
1 July 2 July 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
Loss for the financial period (10,694) (9,302) (8,275)
--------------------------------- --------- --------- ------------
5 Reconciliation of profit before tax to net cash inflow from operating activities
26 weeks 26 weeks 52 weeks
to to ended
1 July 2 July 31 December
2018 2017 2017
GBP'000 GBP'000 GBP'000
Loss before tax (11,550) (9,282) (9,470)
Finance income - - (1)
Finance expense 125 119 203
Share based payment charge 65 50 134
Depreciation and impairment 12,115 10,837 11,847
Profit from sale of property plant
and equipment (1,942) - (1,237)
Amortisation of intangible assets 1 1 3
Onerous lease provision movement 1,688 (5) 1,625
(Increase) / decrease in inventories 112 23 (190)
(Increase) / decrease in trade
and other receivables (199) 196 (392)
Increase / (decrease) in trade
and other payables (2,673) (864) 263
Net cash inflow from operating
activities (2,259) 1,075 2,785
-------------------------------------- --------- --------- ------------
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END
IR DBLFLVKFFBBE
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