Share Name Share Symbol Market Type Share ISIN Share Description
Fulham Sho LSE:FUL London Ordinary Share GB00B9F8VG44 ORD GBP0.01
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.125p +0.95% 13.25p 13.00p 13.50p 13.25p 13.125p 13.125p 37,784 09:32:33
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Travel & Leisure 41.3 1.1 0.2 66.3 75.56

Fulham Shore PLC (The) Final Results

12/07/2017 7:00am

UK Regulatory (RNS & others)


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Fulham Shore PLC (The)

12 July 2017

The Fulham Shore plc

("Fulham Shore", the "Company" or "Group")

Final Results

The Directors of Fulham Shore are pleased to announce the Company's audited results for the year ended 26 March 2017.

Highlights

   --           Revenues for the year ended 26 March 2017 of GBP41,274,000 (2016: GBP29,251,000) 
   --           Headline EBITDA for the year ended 26 March 2017 of GBP7,118,000 (2016: GBP5,232,000) 

-- Headline Operating Profit for the year ended 26 March 2017 of GBP4,670,000 (2016: GBP3,280,000)

   --           Operating Profit for the year ended 26 March 2017 of GBP1,278,000 (2016: GBP507,000) 
   --           Profit after taxation for the year ended 26 March 2017 of GBP969,000 (2016: GBP76,000) 
   --           Net debt as at 26 March 2017 of GBP5,909,000 (27 March 2016: GBP3,283,000) 

-- Opened 13 new Franco Manca pizzeria and 3 new The Real Greek during the year ended 26 March 2017 (2016: 7 Franco Manca pizzeria and 1 The Real Greek)

   --           Launched click and collect takeaway service in both Franco Manca and The Real Greek 
   --           Since the year end: 

o the opening of a further 6 Franco Manca restaurants in the UK;

o the opening of the first franchised Franco Manca pizzeria in Salina; and

o the opening of a further 2 The Real Greek restaurants.

Contact:

 
 The Fulham Shore plc          Telephone: 07836 346 934 
 David Page                    www.fulhamshore.com 
 
 Allenby Capital Limited       Telephone: 020 3328 5656 
 Nick Naylor / Jeremy Porter 
  / James Reeve 
 
 Hudson Sandler - Financial    fulhamshore@hudsonsandler.com 
  PR 
 Alex Brennan / Lucy Wollam    Telephone: 020 7796 4133 
 

THE FULHAM SHORE PLC

CHAIRMAN'S STATEMENT

Introduction

Fulham Shore delivered a continued strong performance in the financial year ended 26 March 2017 with further growth across both of the Group's key brands. As a result, we are pleased to report a 41.1% increase in revenue to GBP41.3m, a 36.0% increase in Headline EBITDA to GBP7.1m and a 170.4% increase in profit before taxation to GBP1.1m.

We see the financial success of this year as a sound base upon which to build the expansion of Franco Manca, The Real Greek and the Group over the coming years.

Strategic vision and progress

Fulham Shore was established in 2012 to discover, develop and expand one or more restaurant concepts with significant growth potential in the dynamic UK dining out market.

To date we have identified and are developing two great restaurant brands. The first is Franco Manca, which was started in Brixton, London in 2009 by Giuseppe Mascoli. This brand has experienced strong growth since it was acquired by the Group in 2015 and we are now expanding outside London by opening and looking for new sites in cities such as Bristol, Oxford, Cambridge and Edinburgh.

The second brand that has great prospects is The Real Greek. As we expand outside London, these new The Real Greek restaurants are performing as well if not better than a number of their London siblings.

Both of these brands are very popular with customers and their food receives critical and social media acclaim. Both brands have scalable business models that combine great quality, high volumes and good value price points (typically GBP9 to GBP15 per head).

The Group's strategy is aimed at the long-term development of these brands and, by achieving their nationwide potential, we aim to deliver long term, sustainable returns for our shareholders.

The UK restaurant market

I have been in the restaurant industry since 1976 and, during that time, the UK 'eating out-of-home' market has grown and continues to grow significantly. Nabil Mankarious, our Managing Director, has been operating UK restaurants since 1986, so we have both witnessed the expansion of the 'eating out-of-home' market and the UK restaurant industry.

Recent years have seen unprecedented amounts of capital invested in the UK restaurant sector and, in recent months, more restaurant space has appeared on the market than for many a year. This is largely a function of larger businesses trying to sell poor performing locations, newly created developments and administrators selling sites for broken companies.

Restaurant supply and demand often have a fractious relationship and, however quickly demand for eating out grows, there will always be a risk that restaurant supply may sometimes grow faster, either nationally or locally. In addition, we are entering a difficult forecasting period due to Brexit. Against this backdrop, some restaurant businesses will make the grade and others will not. We believe that operators with "me-too" offerings, over-rented sites, tails of unprofitable sites, dated menus, too much debt, poor concepts and unincentivised staff (or all of the above) will struggle.

However, I am confident that Fulham Shore is well placed as a dynamic operator with strong brands and a good portfolio of sites. We believe that our businesses have significant growth potential across the UK underpinned, first and foremost, by the quality and value of their customer offerings. As a result, and despite the challenging backdrop, we are confident that the Group will continue to perform well in the fast-growing casual dining market.

Franco Manca - growth

Since acquiring Franco Manca in 2015, we have more than trebled the number of our pizzeria in the UK from 12 to 38 (32 at the year-end). This has resulted in growing to serving over 60,000 pizzas per week, up from 25,000 just over two years ago.

Core to the success and appeal of the Franco Manca brand is its continued emphasis on ingredients with proven provenance. We continue to source from the best UK and Italian producers and purchasing organic ingredients wherever possible. It is more important than ever to know your suppliers personally in these uncertain times and we pride ourselves on such relationships.

Franco Manca further strengthened its ties with Italy by joining its founder, Giuseppe Mascoli, in opening a seasonal Franco Manca pizzeria by the sea, located on the island of Salina, north of Sicily, since the year end.

Franco Manca's growth to date has primarily been in London where we have focused on establishing the positive reputation of this young brand's business. We have been building Franco Manca's awareness by expanding in London 'villages' (e.g. in Richmond, Hackney and Bermondsey) but we also opened new restaurants in close proximity to established Franco Manca pizzeria, thereby strengthening the brand and giving customers their own local Franco Manca. Whilst this can have a near term impact on sales in the original pizzeria, we are confident that the increased brand recognition and the business the new restaurants generate will benefit overall sales in the longer term.

We know from past experience that sales at the original pizzeria gravitate back to original levels after a period of time and this is demonstrated by the continued strong performances of the 12 Franco Manca pizzeria that the Group originally acquired in 2015.

In London, where the quality of our sourdough pizzas and great value prices are well known, our new pizzeria are busy straight away. However, as we open in other towns and cities throughout the UK, we expect that sales are more likely to build to capacity over the first three or four years of each restaurant's life as the Franco Manca brand becomes better known regionally.

We are encouraged by our expansion outside of London so far, in particular the openings in central Brighton and Reading, which are serving more customers per week than our average London pizzeria. This gives us confidence that the Franco Manca concept will continue to grow and flourish outside of the capital.

The Real Greek - growth

The Real Greek has delivered steady growth over recent years, generating good profits to support both its own expansion and that of the Group. The Real Greek presents an exciting opportunity for Fulham Shore as it shapes and defines the market for Greek food: it has little direct competition, serving delicious, good value sharing dishes and enjoying a very loyal customer base.

The brand's good performance and the availability of good sites encouraged us to open three new restaurants in the last year (including our first, smaller, Greek on the Street concept) which was more than we had originally planned. As a result, as at the year-end we operated 12 The Real Greek restaurants, with a further two opening since the year end, taking the total to 14.

During the year, we opened The Real Greek in three towns outside of London in Southampton, Bournemouth and Reading. We are encouraged by their performances so far. Our recent opening in Bournemouth, combining a great location, a beautiful restaurant with a large outside terrace and all a short walk from the sea, deserves special mention as it recorded an exceptional 3,000 customers in its first week.

On-line

We continue to see growth in the sales of take out, delivery and ordering on-line. Both The Real Greek and Franco Manca offer these services to our customers. 'Click and collect', where customers order on-line and then collect their order themselves from the restaurant, is proving particularly popular at the moment.

Investment

We continue to invest in our central functions, teams and infrastructure to support the long term growth potential of the Group. We will continue to add to the Franco Manca support team structure and, as we approach and pass 50 pizzeria, we are increasing the use of central commissaries to bring further efficiencies to the business and consistency.

We have seen excellent results from our new The Real Greek openings and we are looking to step up our opening programme from March 2019 onwards. We will, as we have at Franco Manca, bolster The Real Greek's central team over the next 18 months to support this increased pace of growth.

People and team

One of the Group's greatest attributes is our fantastic team of people across the business who bring amazing passion, skill and personality to our brands. I would like to thank each of my colleagues for their hard work during the year.

At every stage of the Group's development we have encouraged employees at all levels, from Directors to restaurant staff, to participate as shareholders by gifting shares and granting share options. We feel this employee ownership approach is crucial to supporting and developing a strong culture that is at the heart of a growing and successful restaurant business.

Current trading and outlook

Both Franco Manca and The Real Greek have performed well over the last year. We believe we will see this continuing, underpinned by great ambience, food quality and value of their customer offerings. We will be reviewing the progress of our third business, which is a single franchise of the Bukowski Grill brand in Soho, over the next few months.

We believe that both of our key brands have significant further growth potential. We have a pipeline of locations where we would like to open either or both The Real Greek and/or a Franco Manca. We anticipate opening approximately 15 new locations in the current financial year.

However, much of this will depend on our ability to secure sites that meet our return on capital criteria. This is critical to our success and we will not open new sites just to chase expansion numbers. We believe it is far better to wait for the right sites at the right rents than to chase short term targets.

Trading during the current financial year has so far remained in line with our expectations. However, there are many uncertainties out there: another General Election would be unhelpful, terrorist incidents have always reduced London public confidence (and therefore restaurant visits) and the long-term Brexit impact is unknown; it is, however, already affecting the availability of skilled European restaurant staff. In addition, food costs are currently on the increase and there is some evidence of reducing consumer expenditure.

Despite this, the UK dining out market continues to grow and as a nimble and agile operator with great restaurant brands we are confident of another year of good progress.

THE FULHAM SHORE PLC

FINANCIAL REVIEW

Fulham Shore performed strongly in the year ended 26 March 2017, summarised in the table below:

 
 
                                              Year         Year 
                                             ended        ended 
                                          26 March     27 March 
                                              2017         2016     Change 
                                              GBPm         GBPm          % 
 
 Revenue                                      41.3         29.2     +41.1% 
 
 Headline EBITDA                               7.1          5.2     +36.0% 
 
 Headline operating profit                     4.7          3.3     +42.4% 
 
 Operating profit                              1.3          0.5    +152.7% 
 
 Profit before taxation                        1.1          0.4    +170.4% 
 
 Profit for the year                           1.0          0.1 
 
 Diluted earnings per share                   0.2p         0.0p 
 Headline diluted earnings per share          0.7p         0.4p     +50.8% 
 
 Cash flow from operating activities          10.3          3.7     176.3% 
 
 Development capital expenditure              12.4          7.1     +75.5% 
 
 Net Debt                                      5.9          3.3     +80.0% 
 
 
 Number of restaurants operated                No.          No. 
  Franco Manca                                  32           19     +68.4% 
  The Real Greek                                12            9     +33.3% 
  Bukowski                                       1            1          - 
 
                                                45           29     +55.2% 
 
 
 

Total Group revenue grew by 41.1%, driven mainly by new openings within the UK during the year. We opened 3 The Real Greek and 13 Franco Manca pizzeria, taking the total restaurants operated by the Group to 45 (2016: 29) at year end.

Group Headline EBITDA for the year was GBP7.1m, an increase of 36.0% on the prior year while operating profit grew 152.7% to GBP1.3m. During the year, the Group invested in a broader management team in Franco Manca to support the opening program. With our new openings, we have invested over GBP1.9m (2016: GBP0.9m) in pre-opening costs.

Group operating profit for the year was GBP1.3m, up from GBP0.5m. Finance costs have increased 53.4% to GBP0.1m as the Group drew down on its revolving credit facilities to support the increased opening program for both Franco Manca and The Real Greek.

The Group's tax rate has reduced significantly to 15.3% of profit before tax due to our work on capital allowances on the capital expenditure over the past two years. This is expected to return to normal levels in the coming year.

Our diluted earnings per share has increased from 0.0p to 0.2p while Headline diluted earnings per share has increased by 50.8% to 0.7p.

Cost Inflation

During the year, the weakness of Sterling against the Euro and the US Dollar following the Brexit vote, has put pressure on food cost inflation. Where possible we have benefited from additional volume discounts due to our significant opening program which has helped to mitigate some of the cost pressures.

We also saw the implementation of the government's National Living Wage for over 25 year old employees at the beginning of the financial year. However all our businesses have chosen to treat all staff members the same irrespective of age.

Our other two material cost items are rent and utility costs. Rental inflation continues to increase modestly. Utility cost inflation continues to be volatile as wholesale cost of energy has been impacted by the movement of sterling and global economic adjustments.

Cash flows and balance sheets

The Group's cash flow from operating activities has grown 176.3% to GBP10.3m (2016: GBP3.7m).

We invested GBP12.4m (2016: GBP7.1m) in development capital including investment in IT systems to deliver the online Click and Collect takeaway service in both Franco Manca and The Real Greek.

Resultant net debt from our activities at 26 March 2017 was GBP5.9m (2016: GBP3.3m).

At the year end, we took advantage of short term supplier trading credit facilities as we had several restaurants in build around year end. These are expected to reverse in the coming year.

Financing

Following our year end, the Group has secured an amended revolving credit facility with our bankers, HSBC Bank PLC, increasing the facilities to GBP14.25m and extending for a term of four years. At the same time our overdraft facilities were increased to GBP0.75m. The new facilities are on similar terms as our previous facilities and, alongside internally generated cash flow, will support our existing planned opening programme for the next three years.

People

During the year, the Group's operations were entirely within the UK. With our opening program, the Group created over 350 new jobs during the year. We continue to invest in our staff through training, incentives and personal development.

Principal risks and uncertainties

The Directors consider the following to be the principal risks faced by the Group:

Economic conditions

The Group's performance depends to a large degree on the economic conditions and consumer confidence in the UK. Over recent months, the UK economy has seen reducing levels of unemployment but weaker consumer spending. However, there continue to be rapid changes to the UK economy, with the result of the EU Referendum creating considerable political and economic uncertainty. The Group's existing restaurants offer an exceptional customer value experience which the Directors believe positions the business well in dealing with continued volatility in the UK economy.

Development programme

The Group's development programme is dependent on securing the requisite number of new properties. The UK restaurant property market is competitive. To mitigate these issues, the Group has an experienced property team concentrating on securing new sites for the Group.

Supply chain

The Group focuses on the freshness and quality of the produce used in its restaurants. It is exposed to potential supply chain disruptions due to the delay or losses of inventory in transit. The Group seeks to mitigate this risk through effective supplier selection and an appropriate back-up supply chain.

Employees

The Group's performance depends largely on its management team and its restaurant teams. The inability to recruit people with the right experience and skills could adversely affect the Group's results. The result of the EU Referendum has created considerable uncertainty of immigration status of EU nationals. To mitigate these issues the Group has invested in its human resources teams and has implemented a number of incentive schemes designed to retain key individuals.

Competition

The Group operates in a competitive and fragmented market which regularly sees new concepts come to the market. However, the Directors believe that the strength of the existing restaurant brands, value offer and constant strive towards delivering the best product and service will help the business to mitigate competitive risk.

Investment programme

The Group's investment programme is dependent on securing suitable acquisition targets.

Cyber security

The Group has introduced online click and collect service during the year which relies on online systems that may experience cyber security failure leading to loss of revenue or reputation loss. The Group utilises robust supplier selection processes and third party reviews and testing on a regular basis to identify weaknesses and improve on existing protection and processes.

Risks are formally reviewed by the Board and appropriate processes put in place to monitor and mitigate them.

Financial risk management

The Board regularly reviews the financial requirements of the Group and the risks associated therewith. The Group does not use complicated financial instruments, and where financial instruments are used it is for reducing interest rate risk. The Group does not trade in financial instruments. Group operations are primarily financed from equity funds raised, bank borrowings and retained earnings. In addition to the financial instruments described above, the Group also has other financial instruments such as receivables, trade payables and accruals that arise directly from the Group's operations. Further information is provided in note 15 to the financial statements.

Key performance indicators

The Board receives a range of management information delivered in a timely fashion. The principal measures of progress, both financial and non-financial, that are reviewed on a regular basis to monitor the development of the Company and the Group are shown in the table at the beginning of this section.

THE FULHAM SHORE PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 26 March 2017

 
 
                                                          Year         Year 
                                                         ended        ended 
                                                      26 March     27 March 
                                                          2017         2016 
                                            Notes      GBP'000      GBP'000 
 
 Revenue                                      1         41,274       29,251 
 
 Cost of sales                                        (23,182)     (15,970) 
 
 Gross profit                                           18,092       13,281 
 
 Administrative expenses                              (13,422)     (10,001) 
 
 Headline operating profit                               4,670        3,280 
 
 Share based payments                                    (631)        (639) 
 Pre-opening costs                                     (1,914)        (908) 
 Amortisation of brand                                   (821)        (821) 
 Exceptional costs - cost of acquisition     23           (26)        (405) 
 
 Operating profit                             2          1,278          507 
 Finance income                                              1            4 
 Finance costs                                4          (135)         (88) 
 
 Profit before taxation                                  1,144          423 
 
 Income tax expense                           5          (175)        (347) 
 
 Profit for the year                                       969           76 
 
 
 Profit for the period attributable to: 
  Owners of the company                                    947           56 
  Non-controlling interests                                 22           20 
 
                                                           969           76 
 
 
 Profit per share 
 
 Basic                                        6           0.2p         0.0p 
 Diluted                                      6           0.2p         0.0p 
 
 Headline Basic                               6           0.7p         0.5p 
 Headline Diluted                             6           0.7p         0.4p 
 

There were no other comprehensive income items.

All operating gains and losses relate to continuing activities.

THE FULHAM SHORE PLC

CONSOLIDATED AND COMPANY BALANCE SHEETS

26 March 2017

 
                                                         Group        Parent company 
                                   Notes   26 March   27 March   26 March   27 March 
                                               2017       2016       2017       2016 
                                            GBP'000    GBP'000    GBP'000    GBP'000 
 Non-current assets 
 Intangible assets                  7        27,374     28,135          -          - 
 Property, plant and equipment      8        27,306     16,733        227         11 
 Investments in subsidiaries        9             -          -     43,011     42,579 
 Trade and other receivables        11          947        934      7,974      4,324 
 Deferred tax assets                16        1,406        894      1,238        825 
 
                                             57,033     46,696     52,450     47,739 
 
 Current assets 
 Inventories                        10        1,052        687          -          - 
 Trade and other receivables        11        2,602      1,448        184        119 
 Cash and cash equivalents          12          271        197          -          - 
 
                                              3,925      2,332        184        119 
 
 Total assets                                60,958     49,028     52,634     47,858 
 
 Current liabilities 
 Trade and other payables           13     (13,332)    (6,165)    (1,011)      (732) 
 Income tax payable                           (533)      (630)          -          - 
 Borrowings                         14        (180)      (570)       (12)      (200) 
 
                                           (14,045)    (7,365)    (1,023)      (932) 
 
 Net current liabilities                   (10,120)    (5,033)      (839)      (813) 
 
 Non-current liabilities 
 Borrowings                         14      (6,000)    (2,910)    (8,190)    (4,003) 
 Deferred tax liabilities           16      (2,265)    (2,057)          -          - 
 
                                            (8,265)    (4,967)    (8,190)    (4,003) 
 
 Total liabilities                         (22,310)   (12,332)    (9,213)    (4,935) 
 
 Net assets                                  38,648     36,696     43,421     42,923 
 
 Equity 
 Share capital                      17        5,714      5,692      5,714      5,692 
 Share premium                                6,889      6,866      6,889      6,866 
 Merger relief reserve                       30,459     30,459     30,459     30,459 
 Reverse acquisition reserve                (9,469)    (9,469)          -          - 
 Retained earnings                            4,963      3,078        359       (94) 
 
 Equity attributable to owners 
  of the company                             38,556     36,626     43,421     42,923 
 Non-controlling interest                        92         70          -          - 
 
 Total Equity                                38,648     36,696     43,421     42,923 
 
 

The loss for the financial year dealt with in the financial statements of the Company is GBP436,000 (2016: GBP694,000).

THE FULHAM SHORE PLC

CONSOLIDATED STATEMENT OF CHANGE IN EQUITY

for the year ended 26 March 2017

 
                                                        Attributable to owners of the Company 
                                                              Reverse                  Equity         Non- 
                                                   Merger        Acq-                  Share-     Control- 
                            Share       Share      Relief    uisition     Retained    holders         ling       Total 
                          Capital     Premium     Reserve     Reserve     Earnings          '    Interests      Equity 
                          GBP'000     GBP'000     GBP'000     GBP'000      GBP'000      Funds      GBP'000     GBP'000 
                                                                                      GBP'000 
 
 At 29 March 
  2015                      3,325       2,650      11,113     (9,469)        1,840      9,459           22       9,481 
 
 Profit for 
  the period                    -           -           -           -           56         56           20          76 
 
 
 Total comprehensive 
  income                        -           -           -           -           56         56           20          76 
 
 Transactions with 
  owners 
 Ordinary shares 
  issued (net 
  of expenses)              2,367       4,216      19,346           -            -     25,929            -      25,929 
 Share based 
  payments                      -           -           -           -          639        639            -         639 
 Deferred tax 
  on share based 
  payments                      -           -           -           -          543        543            -         543 
 Non-controlling 
  interests 
  adjustment                    -           -           -           -            -          -           28          28 
 
 Total transactions 
  with owners               2,367       4,216      19,346           -        1,182     27,111           28      27,139 
 
 
 At 27 March 
  2016                      5,692       6,866      30,459     (9,469)        3,078     36,626           70      36,696 
 
 Profit for 
  the period                    -           -           -           -          947        947           22         969 
 
 
 Total comprehensive 
  income                        -           -           -           -          947        947           22         969 
 
 Transactions with 
  owners 
 Ordinary shares 
  issued (net 
  of expenses)                 22          23           -           -            -         45            -          45 
 Share based 
  payments                      -           -           -           -          631        631            -         631 
 Deferred tax 
  on share based 
  payments                      -           -           -           -          307        307            -         307 
 
 Total transactions 
  with owners                  22          23           -           -          938        983            -         983 
 
 
 At 26 March 
  2017                      5,714       6,889      30,459     (9,469)        4,963     38,556           92      38,648 
 
 

THE FULHAM SHORE PLC

COMPANY STATEMENT OF CHANGE IN EQUITY

for the year ended 26 March 2017

 
                                                             Merger 
                                       Share       Share     Relief     Retained       Total 
                                     Capital     Premium    Reserve     Earnings      Equity 
                                     GBP'000     GBP'000    GBP'000      GBP'000     GBP'000 
 
 At 29 March 2015                      3,325       2,650     11,113        (556)      16,532 
 
   Loss for the year                       -           -          -        (694)       (694) 
 
 Total comprehensive income 
  for the year                             -           -          -        (694)       (694) 
 
 Transactions with owners 
   Ordinary shares issued (net 
    of expenses)                       2,367       4,216     19,346            -      25,929 
   Share based payments                    -           -          -          639         639 
   Deferred tax on share based 
    payments                               -           -          -          517         517 
 
 Total transactions with owners        2,367       4,216     19,346        1,156      27,085 
 
 
 At 27 March 2016                      5,692       6,866     30,459         (94)      42,923 
 
   Loss for the year                       -           -          -        (436)       (436) 
 
 Total comprehensive income 
  for the year                             -           -          -        (436)       (436) 
 
 Transactions with owners 
   Ordinary shares issued (net 
    of expenses)                          22          23          -            -          45 
   Share based payments                    -           -          -          631         631 
   Deferred tax on share based 
    payments                               -           -          -          258         258 
 
 Total transactions with owners           22          23          -          889         934 
 
 
 At 26 March 2017                      5,714       6,889     30,459          359      43,421 
 
 

THE FULHAM SHORE PLC

CONSOLIDATED AND COMPANY CASH FLOW STATEMENT

for the year ended 26 March 2017

 
                                                             Group                  Parent 
                                     Notes        Year        Year        Year        Year 
                                                 ended       ended       ended       ended 
                                              26 March    27 March    26 March    27 March 
                                                  2017        2016        2017        2016 
                                               GBP'000     GBP'000     GBP'000     GBP'000 
 
 Net cash flow from/(used in) 
  operating activities                  19      10,273       3,718       (209)          56 
 
 Investing activities 
 Acquisition of property, plant 
  and equipment                               (12,358)     (7,085)       (236)         (3) 
 Acquisition of intangible                        (76)           -           -           - 
  assets 
 Cash flow from acquisition 
  of subsidiaries                       19       (376)     (6,249)           -     (6,589) 
 Loan to subsidiary undertakings                     -           -     (2,553)     (1,244) 
 
 Net cash flow used in investing 
  activities                                  (12,810)    (13,334)     (2,789)     (7,836) 
 
 
 Financing activities 
 Proceeds from issuance of 
  new ordinary shares (net of 
  expenses)                                         45       4,648          45       4,648 
 Repayments of bank borrowings                       -     (2,120)           -           - 
 Capital received from bank 
  borrowings                                     3,090       2,910       3,090       2,910 
 Interest received                                   1           4         261           1 
 Interest paid                                   (135)        (88)       (210)        (77) 
 
 Net cash flow from financing 
  activities                                     3,001       5,354       3,186       7,482 
 
 Net increase/(decrease) in 
  cash and cash equivalents                        464     (4,262)         188       (298) 
 
 Cash and cash equivalents 
  at the beginning of the period        12       (373)       3,889       (200)          98 
 
 Cash and cash equivalents 
  at the end of the period              12          91       (373)        (12)       (200) 
 
 
 

THE FULHAM SHORE PLC

ACCOUNTING POLICIES

GENERAL INFORMATION

The Fulham Shore PLC is a public limited company incorporated and domiciled in England and Wales with registration number 07973930 and registered office at 1(st) Floor, 50-51 Berwick Street, London, W1F 8SJ, United Kindom. The Company's ordinary shares are traded on the AIM Market.

BASIS OF PREPARATION

The above audited financial information does not constitute statutory financial statements as defined in section 434 of the Companies Act 2006. The above figures for the period ended 26 March 2017 have been extracted from the Group's financial statements which have been reported on by the Group's auditors and received an audit opinion which was unqualified. The Group's statutory financial statements for the year ended 27 March 2016 have been lodged with the Registrar of Companies. These financial statements received an audit report which was unqualified and did not include any reference to matters to which the auditors drew attention by way of emphasis without qualifying their report or a statement under section 498(2) or section 498(3) of the Companies Act 2006. These financial statements will be dispatched to the shareholders and filed with the Registrar of Companies. The preliminary announcement was approved by the Board and authorised for issue on 11 July 2017.

The financial statements have been prepared under the historical cost convention and, as permitted by EU Law, the Financial Statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards as adopted by the EU ("IFRS").

The financial statements for the year ended 26 March 2017 are presented in Sterling because that is the primary currency of the primary economic environment in which the Group operates. All values are rounded to the nearest thousand pounds (GBP'000) except when otherwise indicated.

The parent company has not presented its own income statement, statement of total comprehensive income and related notes as permitted by section 408 of the Companies Act 2006.

At the date of authorisation of these financial statements, the following Standards and Interpretations relevant to the Group operations that have not been applied in these financial statements were in issue but not yet effective:

   IFRS 2 (Amendment)      Classification and Measurement of Share Based Payment Transactions 
   IFRS 9                          Financial instruments 
   IFRS 12 (Amendment)    Disclosure of interest in Other Entities 
   IFRS 15                        Revenue from contracts with customers 
   IFRS 16                        Leases 
   IFRIC 23                        Uncertainty over income tax treatments 

The Directors anticipate that the adoption of these Standards and Interpretations as appropriate in future years will have no material impact on the financial statements of the Group other than the new IFRS 16 Leases which will be mandatory for accounting periods beginning on or after 1 January 2019. This new standard, which is not currently EU endorsed will significantly change how restaurant leases will be accounted for. The Group is preparing its assessment project to identify the impact of the new lease accounting standard on the Group's existing and future restaurant leases.

GOING CONCERN

The consolidated financial statements have been prepared on a going concern basis. Given the risk analysis undertaken by the Directors and after reviewing the Group's net current liabilities position as at 26 March 2017, the budget for the next financial year, other longer term plans and financial resources including undrawn but available facilities described in note 14 and the extended facilities following the year end as described in note 24, the Board has a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Therefore the Board is satisfied that, at the time of approving the financial statements, it is appropriate to adopt the going concern basis in preparing the financial statements.

SIGNIFICANT ACCOUNTING POLICIES

BASIS OF CONSOLIDATION

The consolidated financial statements incorporate those of The Fulham Shore PLC and all of its subsidiary undertakings for the period. Subsidiaries acquired are consolidated from the date that the Group has the power to control, exposure or rights to variable returns, and the ability to use its power over the returns and will continue to be consolidated until the date that such control ceases.

Although the legal form of the transaction during the period ended 29 June 2015 was an acquisition of Kefi Limited by The Fulham Shore PLC, the substance is the reverse of this. Accordingly the business combination has been prepared using reverse acquisition accounting.

The acquisition of other subsidiaries is accounted for using the acquisition method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree's identifiable assets and liabilities are recognised at their fair values at the acquisition date.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation.

INTANGIBLE ASSETS

Goodwill

Goodwill arising on the acquisition of an entity represents the excess of the cost of an acquisition over the Group's interest in the fair value attributed to the net assets at acquisition. Goodwill is not subject to amortisation but is tested for impairment at least annually. After initial recognition, goodwill is stated at cost less any accumulated impairment losses. Any impairment is recognised immediately in the income statement and is not subsequently reversed. Goodwill is allocated to cash generating units for the purpose of impairment testing. Each of these cash generating units represents the Group's investment in a subsidiary. On disposal of a subsidiary the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

Trademarks and licenses

The fair value of the intangible assets acquired through the reverse acquisition was determined using discounted cash flow models. The key assumptions for the valuation method are those regarding future cash flows, tax rates and discount rates. The cash flow projections are based on management forecasts for the next four years period. The estimated useful lives range from 4 to 20 years on a straight-line basis.

Brand

The fair value of the brand intangible assets acquired through an acquisition of a subsidiary was determined using discounted royalty relief models. The key assumptions for the valuation method are those regarding future cash flows, tax rates and discount rates. The cash flow projections are based on management forecasts for the next ten year period.

Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of brand from the beginning of the financial year that they are available for use. The estimated useful lives are 10 years on a straight-line basis.

Computer Software

Computer software licences are capitalised on the basis of the costs incurred to acquire and bring into use the specific software. These costs are amortised over their estimated useful lives, being between 3 and 5 years. Costs that are directly associated with the production of identifiable and unique software products controlled by the Group, and that are expected to generate economic benefits exceeding costs beyond one year, are recognised as intangible assets. Direct costs include software development, employee costs and directly attributable overheads. Software integral to a related item of hardware equipment is accounted for as property, plant and equipment. Costs associated with maintaining computer software programmes are recognised as an expense when they are incurred.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at historical cost less depreciation and any recognised impairment loss. The cost of property, plant and equipment includes directly attributable incremental costs incurred in their acquisition and installation.

Depreciation is provided on property, plant and equipment at rates calculated to write each asset down to its estimated residual value evenly over its expected useful life, as follows:-

   Leasehold properties and improvements         over lease term or renewal term 
   Plant and equipment                                    20% to 33% straight line 
   Furniture, fixtures and fittings                        10% to 20% straight line 

Assets in the course of construction are carried at cost, less any recognised impairment loss. Depreciation of these assets commences when the assets are ready for their intended use.

Residual values, useful lives and methods of depreciation are reviewed and adjusted if appropriate on an annual basis. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the income statement.

IMPAIRMENT OF ASSETS

Goodwill is not subject to amortisation but is tested for impairment annually or whenever there is an indication that the asset may be impaired. For the purpose of impairment testing, assets are grouped at the lowest levels for which there are separately identifiable cash flows, known as cash generating units. If the recoverable amount of the cash generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. Impairment losses recognised for goodwill are not reversed in a subsequent period. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

At each balance sheet date, the Group reviews the carrying amounts of its property, plant and equipment and intangible assets with finite useful lives to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent, if any, of the impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount. An impairment loss is recognised immediately in the income statement. Where an impairment loss subsequently reverses, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, not to exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognised immediately in the income statement.

FINANCIAL INSTRUMENTS

Financial assets and financial liabilities, in respect of financial instruments, are recognised on the balance sheet when the Group becomes a party to the contractual provisions of the instrument.

INVENTORIES

Inventories are valued at the lower of cost and net realisable value. Cost is determined on a first in, first out basis. Net realisable value is based upon estimated selling price less further costs expected to be incurred to completion and disposal. Provision is made for obsolete and slow-moving items.

TRADE AND OTHER RECEIVABLES

Receivables are classified as loans and receivables and are initially recognised at fair value. They are subsequently measured at their amortised cost using the effective interest method less any provision for impairment. A provision for impairment is made where there is objective evidence (including customers with financial difficulties or in default on payments), that amounts will not be recovered in accordance with original terms of the agreement. A provision for impairment is established when the carrying value of the receivable exceeds the present value of the future cash flow, discounted using the original effective interest rate. The carrying value of the receivable is reduced through the use of an allowance account and any impairment loss is recognised in the income statement.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash in hand and call deposits and other short term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

TRADE AND OTHER PAYABLES

Payables are initially recognised at fair value and subsequently at amortised cost using the effective interest method.

SHARE CAPITAL

Share capital represents the nominal value of ordinary shares issued.

SHARE PREMIUM

Share premium represents the amounts subscribed for share capital in excess of nominal value less the related costs of share issue.

MERGER RELIEF RESERVE

In accordance with Companies Act 2006 S.612 'Merger Relief', the company issuing shares as consideration for a business combination, accounted at fair value, is obliged, once the necessary conditions are satisfied, to record the share premium to the merger relief reserve.

REVERSE ACQUISITION RESERVE

Reverse accounting under IFRS 3 'Business Combinations' requires the difference between the equity of the legal parent and the issued equity instruments of the legal subsidiary pre-combination is to be recognised as a separate component of equity.

RETAINED EARNINGS

Retained earnings represents the cumulative profit and loss net of distributions.

FOREIGN CURRENCIES

Assets and liabilities denominated in foreign currencies are translated into sterling, the presentational and functional currency of the Group, at the rate of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to the income statement.

FINANCIAL LIABILITIES AND EQUITY INSTRUMENTS

Financial liabilities and equity instruments issued by the Group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities and includes no obligation to deliver cash or other financial assets. Interest bearing loans and overdrafts are initially measured at fair value (which is equal to cost at inception), and are subsequently measured at amortised cost, using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowing. Equity instruments issued by the Group are recorded at the proceeds received, net of direct issue costs.

TAXATION

Income tax expense represents the sum of the current tax payable and deferred tax.

Current tax payable or recoverable is based on taxable profit for the year. Taxable profit differs from profit as reported in the income statement because some items of income or expense are taxable or deductible in different years or may not be taxable or deductible. The Group's liability for current tax is calculated using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is the tax expected to be payable or recoverable in the future arising from temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. It is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit or the accounting profit.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the year when the liability is settled or the asset realised, based on tax rates that have been enacted or substantively enacted by the balance sheet date. Tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they either relate to income taxes levied by the same taxation authority on either the same taxable entity or on different taxable entities which intend to settle the current tax assets and liabilities on a net basis.

Tax is charged or credited to the income statement, except when it relates to items charged or credited directly to equity, in which case the tax is also recognised directly in equity.

LEASES

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership of the asset to the lessee. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments as determined at the inception of the lease. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in the income statement.

Rentals payable under operating leases are charged to the income statement on a straight line basis or other systematic basis if representative of the time pattern of the user's benefit over the term of the relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight line basis over the lease term.

PROVISIONS

Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable that the Group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the Directors' best estimate of the expenditure required to settle the obligation at the balance sheet date and are discounted to present value where the effect is material.

RETIREMENT BENEFITS

The amount charged to the income statement in respect of pension costs is the contributions payable to money purchase schemes in the year. Differences between contributions payable in the year and contributions actually paid are shown as either accruals or prepayments in the balance sheet.

REVENUE RECOGNITION

Revenue represents the fair value of the consideration received or receivable, net of Value Added Tax, for goods sold and services provided to customers outside the Group after deducting discounts. Revenue is recognised when the significant risks and rewards of ownership are transferred.

INTEREST INCOME

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount.

SHARE BASED PAYMENTS

The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value (excluding the effect of non market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company's estimate of the shares that will eventually vest and adjusted for the effect of non market-based vesting conditions.

Fair value is measured using a Black-Scholes valuation model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

ACCOUNTING PERIOD

The consolidated group accounts have been prepared for the year to 26 March 2017 with the comparative year to 27 March 2016.

The Company accounts have been prepared for the same periods as the Group.

ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of the Group's accounting policies, described above, with respect to the carrying amounts of assets and liabilities at the date of the financial statements, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting year. These judgements, estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, including current and expected economic conditions. Although these judgements, estimates and associated assumptions are based on management's best knowledge of current events and circumstances, the actual results may differ. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised and in any future years affected.

The judgements, estimates and assumptions which are of most significance to the Group are detailed below:

Valuation of acquired businesses - Acquisition and intangible assets

The Group applied the principles of IFRS 3's acquisition accounting in respect of the acquisition of Franco Manca Holdings Limited during the year ended 27 March 2016. The key judgements involved were the identification and valuation of intangible assets which required the estimation of future cash flows arising from a royal relief model and the selection of a suitable discount rate and the determination that the difference between the fair value of the consideration effectively given and the aggregate of the fair values of the separable net assets acquired effectively represents the cost of acquiring the cash generating units in Franco Manca.

Assessment of the recoverable amounts in respect of assets tested for impairment

The Group tests property, plant and equipment and intangible assets, including goodwill, for impairment on an annual basis or more frequently if there are indications that amounts may be impaired. The impairment analysis for such assets is principally based upon discounted estimated future cash flows from the use and eventual disposal of the assets. Such an analysis includes an estimation of the future anticipated results and cash flows, annual growth rates and the appropriate discount rates.

Valuation of share based payments

The charge for share based payments is calculated in accordance with the methodology described in note 18. The model requires highly subjective assumptions to be made including the future volatility of the Company's share price, expected dividend yield and risk-free interest rates.

OPERATING SEGMENTS

The Group considers itself to have two key operating segments, being the management and operation of The Real Greek restaurants and the management and operation of Franco Manca restaurants. The Group operates in only one geographical segment, being the United Kingdom.

DEFINITIONS

OPERATING PROFIT

Operating profit is defined as profit before taxation, finance income and finance costs.

HEADLINE OPERATING PROFIT

Headline operating profit is defined as operating profit before amortisation of brand, impairment of property, plant and equipment, impairment of goodwill and intangible assets, onerous lease costs, restructuring costs, costs of reverse acquisition, cost of acquisition, share based payments, loss on disposal of property, plant and equipment and pre-opening costs.

HEADLINE PROFIT BEFORE TAXATION

Headline profit before taxation is defined as profit/loss before taxation before amortisation of brand, impairment of property, plant and equipment, impairment of goodwill and intangible assets, onerous lease costs, restructuring costs, costs of reverse acquisition, costs of acquisition, share based payments, loss on disposal of property, plant and equipment and pre-opening costs.

PRE-OPENING COSTS

The restaurant pre-opening costs represent costs incurred up to the date of opening a new restaurant that are written off to the profit and loss account in the period in which they are incurred.

EBITDA

EBITDA is defined as operating profit before depreciation and amortisation.

HEADLINE EBITDA

Headline EBITDA is defined as EBITDA before amortisation of brand, impairment of property, plant and equipment, impairment of goodwill and intangible assets, onerous lease costs, restructuring costs, costs of reverse acquisition, cost of acquisition, share based payments, loss on disposal of property, plant and equipment and pre-opening costs.

HEADLINE EPS

Headline EPS is defined in note 6.

THE FULHAM SHORE PLC

NOTES TO THE FINANCIAL STATEMENTS

for the year ended 26 March 2017

 
 1   SEGMENT INFORMATION 
 

For management purposes, the Group was organised into two operating divisions during the year ended 26 March 2017. These divisions, The Real Greek and Franco Manca, are the basis on which the Group reports its primary segment information. All other segments include the Bukowski Grill franchise and the Fulham Shore head office

For the year ended 26 March 2017:

 
                                  The Real     Franco   All other      Total 
                                     Greek      Manca    Segments    GBP'000 
                                   GBP'000    GBP'000     GBP'000 
 
 External revenue                   13,675     26,766         833     41,274 
 
 Headline EBITDA                     2,284      5,415       (581)      7,118 
 Depreciation and amortisation       (649)    (1,707)        (92)    (2,448) 
 
 Headline operating profit           1,635      3,708       (673)      4,670 
 
 Operating profit                    1,049      1,100       (871)      1,278 
 Finance income                          1          -           -          1 
 Finance costs                           -        (1)       (134)      (135) 
 
 Segment profit/(loss) 
  before taxation                    1,050      1,099     (1,005)      1,144 
 Income tax expense                                                    (175) 
 
 Profit for the year                                                     969 
 
 
 Assets                              7,979     48,914       4,065     60,958 
 Liabilities                       (4,073)   (10,872)     (7,365)   (22,310) 
 
 Net assets                          3,906     38,042     (3,300)     38,648 
 
 
 Capital expenditure                 2,185     10,716         246     13,147 
 
 
 
 1   SEGMENT INFORMATION (continued) 
 

For the year ended 27 March 2016:

 
                                  The Real     Franco   All other      Total 
                                     Greek      Manca    Segments    GBP'000 
                                   GBP'000    GBP'000     GBP'000 
 
 External revenue                   11,699     17,494          58     29,251 
 
 Headline EBITDA                     1,892      4,014       (674)      5,232 
 Depreciation and amortisation       (521)    (1,414)        (17)    (1,952) 
 
 Headline operating profit           1,371      2,600       (691)      3,280 
 
 Operating profit                    1,082        477     (1,052)        507 
 Finance income                          3          -           1          4 
 Finance costs                         (2)        (8)        (78)       (88) 
 
 Segment profit/(loss) 
  before taxation                    1,083        469     (1,129)        423 
 Income tax expense                                                    (347) 
 
 Profit for the year                                                      76 
 
 
 Assets                              6,072     39,616       3,340     49,028 
 Liabilities                       (2,241)    (5,806)     (4,286)   (12,332) 
 
 Net assets                          3,831     33,810       (946)     36,696 
 
 
 Capital expenditure                   753      5,978         485      7,216 
 
 

The Group's two business segments primarily operate in one geographical area which is the United Kingdom.

 
 2    OPERATING PROFIT 
                                                            Year        Year 
                                                           ended       ended 
                                                        26 March    27 March 
                                                            2017        2016 
                                                         GBP'000     GBP'000 
 
      Operating profit is stated after charging: 
  Staff costs (note 3)                                    14,786      10,362 
  Depreciation of property, plant and equipment            2,432       1,516 
  Amortisation of intangible assets                          837       1,256 
      Operating lease rentals: 
   Land and buildings                                      3,936       1,313 
  Inventories - amounts charged as an expense              8,196       6,047 
      Auditor's remuneration: 
  - for statutory audit services                              75          77 
      - for other assurance services                           7           - 
  - for tax services                                          27          28 
  - for transactional services                                 5          85 
  Share based payments                                       631         639 
  Pre-opening costs                                        1,914         908 
  Exceptional costs -acquisition costs                        26         405 
 
 
 
 3    EMPLOYEES 
                                                                                                      Year        Year 
                                                                                                     ended       ended 
                                                                                                  26 March    27 March 
                                                                                                      2017        2016 
                                                                                                       No.         No. 
 
      The average monthly number of persons (including Directors) employed by the group during 
      the 
      period was: 
    Administration and management                                                                       23          15 
    Restaurants                                                                                        800         555 
 
                                                                                                       823         570 
 
 
 
 3   EMPLOYEES (continued) 
 
 
                                               Year        Year 
                                              ended       ended 
                                           26 March    27 March 
                                               2017        2016 
                                            GBP'000     GBP'000 
 
  Staff costs for above persons 
    Salaries and fees                        13,808       9,612 
    Social security costs                       912         710 
    Share based payments                        631         639 
    Defined contribution pension costs           73          40 
 
                                             15,424      11,001 
 
 

DIRECTORS' REMUNERATION

The remuneration of Directors, who are the key management personnel of the company, is set out in aggregate below.

 
                                                                Year        Year 
                                                               ended       ended 
                                                            26 March    27 March 
                                                                2017        2016 
                                                             GBP'000     GBP'000 
 
  Salaries, fees and other short term employee benefits          899         659 
  Social security costs                                           59         157 
  Share based payments                                           473         452 
 
                                                               1,431       1,268 
 
 
 

NJ Donaldson exercised 1,115,972 share options in the period ended 26 March 2017 (2016: Nil) realising a gain of GBP184,000 (2016: GBPNil). No directors received any pension benefits (2016: GBPNil).

Included above are fees paid to related parties for the provision of directors' services which are further described in note 22.

The Directors are the only employees of the Company. The Directors' remuneration above is the only staff costs for the Company.

 
 4   FINANCE COSTS 
 
 
                                          Year        Year 
                                         ended       ended 
                                      26 March    27 March 
                                          2017        2016 
                                       GBP'000     GBP'000 
 
  Interest expenses on bank loans 
   and overdrafts                          135          88 
 
                                           135          88 
 
 
 
 5   INCOME TAX EXPENSE 
 
 
                                                  Year        Year 
                                                 ended       ended 
                                              26 March    27 March 
                                                  2017        2016 
                                               GBP'000     GBP'000 
  Based on the result for the period: 
  UK corporation tax at 20% (2016: 
   20%)                                            474         588 
  Adjustment in respect of prior periods         (302)        (51) 
 
  Total current taxation                           172         537 
 
  Deferred taxation: 
  Origination and reversal of temporary 
   timing differences                                3       (190) 
 
  Total deferred tax                                 3       (190) 
 
 
  Total tax expense on profit on ordinary 
   activities                                      175         347 
 
 
 
 
 5   INCOME TAX EXPENSE (continued) 
 
 
  Factors affecting tax charge for             Year        Year 
   year:                                      ended       ended 
                                           26 March    27 March 
                                               2017        2016 
                                            GBP'000     GBP'000 
 
  Profit before taxation                      1,144         423 
 
  Taxation at UK corporation tax rate 
   of 20% (2016: 20%)                           229          85 
  Expenses not deductible for tax 
   purposes                                      14          29 
  Depreciation on non-qualifying fixed 
   assets                                       345         237 
  Share based payments not previously 
   recognised                                  (87)          49 
  Tax losses utilised not previously 
   recognised                                     -         (2) 
  Adjustment to previously recognised          (23)           - 
   provision 
  Adjustment to tax charge in respect 
   of previous periods                        (303)        (51) 
 
  Total income tax expense in the 
   income statement                             175         347 
 
 

Factors that may affect tax charges are disclosed in note 16.

   6          EARNINGS PER SHARE 
 
                                                       Year        Year 
                                                      ended       ended 
                                                   26 March    27 March 
                                                       2017        2016 
                                                    GBP'000     GBP'000 
 
  Profit for the purposes of basic and 
   diluted earnings per share:                          947          56 
 
  Share based payments                                  631         639 
  Deferred tax on share based payments                (236)       (135) 
  Pre-opening costs                                   1,915         908 
  Amortisation of brand                                 821         821 
  Deferred tax on amortisation of brand               (137)       (137) 
  Exceptional costs - cost of acquisition                26         405 
 
  Headline profit for the period for the 
   purposes of headline basic and diluted 
   earnings per share:                                3,967       2,557 
 
 
                                                       Year        Year 
                                                      ended       ended 
                                                   26 March    27 March 
                                                       2017        2016 
                                                   No. '000    No. '000 
 
  Weighted average number of ordinary shares 
   in issue for the purposes of basic earnings 
   per share                                        570,371     554,811 
  Effect of dilutive potential ordinary 
   shares from share options                         30,855      29,553 
 
  Weighted average number of ordinary shares 
   in issue for the purposes of diluted 
   earnings per share                               601,226     584,364 
 
 

Further details of the share options that could potentially dilute basic earnings per share in the future are provided in note 18.

 
 
                               Year         Year 
                              ended        ended 
                           26 March     27 March 
                               2017         2016 
  Earnings per share: 
 
  Basic                        0.2p         0.0p 
  Diluted                      0.2p         0.0p 
 
  Headline Basic               0.7p         0.5p 
  Headline Diluted             0.7p         0.4p 
 
 
 7   INTANGIBLE ASSETS 
 
 
 Group                                     Trademarks, 
                                           License and 
                                            franchises     Software       Brand     Goodwill       Total 
                                               GBP'000      GBP'000     GBP'000      GBP'000     GBP'000 
 Cost 
 29 March 2015                                   1,709            -           -        1,774       3,483 
 
 
 Additions due to business combination              30            -       8,211       17,858      26,099 
 
 27 March 2016                                   1,739            -       8,211       19,632      29,582 
 
 Additions                                           -           76           -            -          76 
 Reclassification                              (1,681)            -           -        1,073       (608) 
 
 26 March 2017                                      58           76       8,211       20,705      29,050 
 
 
 Accumulated amortisation 
 29 March 2015                                     191            -           -            -         191 
 
 Charge in the year                                435            -         821            -       1,256 
 
 27 March 2016                                     626            -         821            -       1,447 
 
 Charge in the year                                  5           11         821            -         837 
 Reclassification                                (608)            -           -            -       (608) 
 
 26 March 2017                                      23           11       1,642            -       1,676 
 
 Net book value 
 26 March 2017                                      35           65       6,569       20,705      27,374 
 
 27 March 2016                                   1,113            -       7,390       19,632      28,135 
 
 

The amortisation charges for trademarks, license and franchises for the year are recognised within administrative expenses.

Goodwill of GBP107,000 relates to the original acquisition of The Real Greek Food Company Limited ("The Real Greek") by Kefi Limited.

Goodwill of GBP1,667,000 relates to the reverse acquisition of The Fulham Shore PLC by Kefi Limited. The goodwill is attributable to the value of the listing of The Fulham Shore PLC.

Goodwill of GBP18,931,000 relates to the acquisition of Franco Manca Holdings Limited ("Franco Manca Holdings"). The goodwill is attributable to the cash generating units held within Franco Manca 2 UK Limited. Included in this goodwill is GBP1,073,000 which was reclassified from franchise intangible following the reacquisition of the rights when Franco Manca Holdings was acquired. This should have been eliminated at the date of the acquisition in the prior year. The Directors do not consider the adjustment to be material and have therefore recognised it in the current year.

 
 7   INTANGIBLE ASSETS (continued) 
 

For the purposes of impairment testing the Directors consider each acquired business or operating segment as separate cash generating units (CGUs). The recoverable amount for each CGU was determined using a value in use calculation based upon management forecasts for the trading results for those entities. Value in use calculations are based on cash flow forecasts derived from the most recent financial budgets and then extrapolated over ten years. Ten years is believed to be reasonable due to the possibility of further investment in each CGU and the related brands. The discount rate applied to cash flow projections is 12% (2016: 12%) which is the rate believed by the Directors to reflect the risks associated with the CGU.

The Group has also conducted a sensitivity analysis on the impairment test of the CGU carrying value including reducing sales level and changing discount rates and there is no reasonably expected change would give rise to an impairment charge.

 
 8   PROPERTY, PLANT AND EQUIPMENT 
 
 
 Group                                                Furniture, 
                                                        fixtures           Assets 
                            Leasehold     Plant and          and            under 
                         improvements     equipment     fittings     construction       Total 
                              GBP'000       GBP'000      GBP'000          GBP'000     GBP'000 
 Cost 
 29 March 2015                  4,601           457          414              470       5,942 
 
 On acquisition                 4,635           476          154              900       6,165 
 Additions                      4,534           957          228            1,496       7,215 
 Reclassification               1,065           207           22          (1,294)           - 
 Disposals                          -             -            -             (29)        (29) 
 
 27 March 2016                 14,835         2,097          818            1,543      19,293 
 
 Additions                      9,020         2,111          768            1,248      13,147 
 Reclassification               1,452            24            5          (1,481)           - 
 Disposals                      (146)           (9)            -                -       (155) 
 
 26 March 2017                 25,161         4,223        1,591            1,310      32,285 
 
 
 Accumulated depreciation 
 29 March 2015                    738           190          116                -       1,044 
 
 Charge in the year             1,043           358          115                -       1,516 
 
 27 March 2016                  1,781           548          231                -       2,560 
 
 Charge in the year             1,587           649          196                -       2,432 
 Disposals                       (12)           (1)            -                -        (13) 
 
 26 March 2017                  3,356         1,196          427                -       4,979 
 
 Net book value 
 26 March 2017                 21,805         3,027        1,164            1,310      27,306 
 
 27 March 2016                 13,054         1,549          587            1,543      16,733 
 
 
 
 8   PROPERTY, PLANT AND EQUIPMENT (continued) 
 
 
 Parent Company                                        Furniture, 
                                                         fixtures 
                             Leasehold     Plant and          and 
                          improvements     equipment     fittings       Total 
                               GBP'000       GBP'000      GBP'000     GBP'000 
 Cost 
 29 March 2015                       3            28            8          39 
 
 Additions                           -             1            2           3 
 Reclassification 
 
 27 March 2016                       3            29           10          42 
 
 Additions                         202            19           15         236 
 
 
 26 March 2017                     205            48           25         278 
 
 
 Accumulated 
  depreciation 
 29 March 2015                       2            16            2          20 
 
 Charge in the year                  1             9            1          11 
 
 27 March 2016                       3            25            3          31 
 
 Charge in the year                 13             5            2          20 
 
 26 March 2017                      16            30            5          51 
 
 Net book value 
 26 March 2017                     189            18           20         227 
 
 27 March 2016                       -             4            7          11 
 
 

All depreciation charges have been recognised in administrative expenses in the income statement.

All non-current assets are located in the United Kingdom.

 
 9    INVESTMENTS IN SUBSIDIARIES 
                                      26 March   27 March 
                                          2017       2016 
                                       GBP'000    GBP'000 
      Parent Company 
 
      Cost and net book value 
  Opening position                      42,579     14,261 
 
  Investment in subsidiaries               432     28,318 
 
  Closing position                      43,011     42,579 
 
 

As at 26 March 2017, the Company had the following subsidiary undertakings which are all registered at 1st Floor, 50-51 Berwick Street, London W1F 8SJ:

 
   Name of subsidiary                  Class      Proportion         Nature of business 
                                          of       of shares 
                                     Holding           held, 
                                                   ownership 
                                                interest and 
                                                voting power 
 
   Incorporated in England and 
    Wales 
   FM98 LTD Limited*                Ordinary            100%   Operation of restaurants 
   10DAS Limited                    Ordinary            100%   Operation of restaurants 
   Café Pitfield               Ordinary            100%                    Dormant 
    Limited 
   Kefi Limited                     Ordinary             99%                    Dormant 
   The Real Greek Food              Ordinary             99%   Operation of restaurants 
    Company Limited* 
   The Real Greek Wine              Ordinary             99%                    Dormant 
    Company Limited* 
   Souvlaki & Bar Limited*          Ordinary             99%                    Dormant 
   CHG Brands Limited*              Ordinary             99%                    Dormant 
   The Real Greek International 
    Limited*                        Ordinary             99%                    Dormant 
   Franco Manca Holdings 
    Limited                         Ordinary             99%                    Dormant 
   Franco Manca 2 UK                Ordinary             99%   Operation of restaurants 
    Limited* 
   FM6 Limited*                     Ordinary             99%        Restaurant property 
   FM111 Limited*                   Ordinary             99%        Restaurant property 
   Franco Manca International 
    Limited*                        Ordinary             99%                    Dormant 
 

* Held by subsidiary undertaking

 
 10    INVENTORIES 
                                                      Group        Parent company 
                                              26         27         26 
                                           March      March      March 
                                                       2016                    27 
                                            2017    GBP'000       2017      March 
                                         GBP'000                             2016 
                                                               GBP'000    GBP'000 
 
  Raw materials and consumables            1,052        687          -          - 
 
 

Inventories are charged to cost of sales in the consolidated comprehensive statement of income.

 
 11    TRADE AND OTHER RECEIVABLES 
                                                                 Group        Parent company 
                                                         26         27         26         27 
                                                      March      March      March      March 
                                                       2017       2016       2017       2016 
                                                    GBP'000    GBP'000    GBP'000    GBP'000 
 
       Included within non-current assets: 
  Amounts receivable from subsidiaries                    -          -      7,974      4,324 
  Other receivables                                     947        934          -          - 
 
                                                        947        934      7,974      4,324 
 
 
       Included within current assets: 
  Trade receivables                                     847        474         53          - 
  Other receivables                                     179        111          -          - 
 
  Other taxation and social security costs                -          -         11         21 
  Prepayments and accrued income                      1,576        863        120         98 
 
                                                      2,602      1,448        184        119 
 
                                                      3,549      2,382      8,158      4,443 
 
 

Other receivables due after more than one year relate to rent deposits.

Receivables are denominated in sterling. The Board believes that the balances are recoverable in full and therefore no impairments are required.

The Group and Company hold no collateral against these receivables at the balance sheet date. The Directors consider that the carrying amount of receivables approximates to their fair value.

 
 12    CASH AND CASH EQUIVALENTS 
                                                                                    Group        Parent company 
                                                                      26 March   27 March   26 March   27 March 
                                                                          2017       2016       2017       2016 
                                                                       GBP'000    GBP'000    GBP'000    GBP'000 
 
  Cash at bank and in hand                                                 271        197          -          - 
 
 
  Cash and cash equivalents as presented in the balance sheet              271        197          -          - 
  Bank overdraft                                                         (180)      (570)       (12)      (200) 
 
                                                                            91      (373)       (12)      (200) 
 
 

Bank balances comprise cash held by the company on a short term basis with maturity of three months or less. The carrying amount of these assets approximates to their fair value.

 
 
 
   13     TRADE AND OTHER PAYABLES 
                                                                      Group        Parent company 
                                                        26 March   27 March   26 March   27 March 
                                                            2017       2016       2017       2016 
                                                         GBP'000    GBP'000    GBP'000    GBP'000 
 
          Included in current liabilities: 
          Trade payables                                   7,375      2,555        266        115 
 
          Other taxation and social security payable       1,012        716         30         21 
          Other payables                                      95        155         28        150 
          Accruals and deferred income                     4,850      2,739        687        446 
 
                                                          13,332      6,165      1,011        732 
 
 
 

Trade payables were all denominated in sterling and comprise amounts outstanding for trade purchases and ongoing costs and are non-interest bearing.

The Directors consider that the carrying amount of trade payables approximate to their fair value.

 
 
 
   14     BORROWINGS 
                                                                   Group        Parent company 
                                                     26 March   27 March   26 March   27 March 
                                                         2017       2016       2017       2016 
                                                      GBP'000    GBP'000    GBP'000    GBP'000 
 
          Short term borrowings: 
          Bank overdraft                                  180        570         12        200 
 
 
          Long term borrowings: 
          Bank loans                                    6,000      2,910      6,000      2,910 
 
          Amounts owed to subsidiary undertakings           -          -      2,190      1,093 
 
                                                        6,000      2,910      8,190      4,003 
 
 
                                                        6,180      3,480      8,202      4,203 
 
 
 

As at 26 March 2017, the Group's committed Sterling borrowing facilities comprises a revolving credit facility of GBP6,000,000 (2016: GBP6,000,000) expiring between two and five years and a bank overdraft facility from HSBC Bank PLC which is secured by a mortgage debenture in favour of HSBC Bank PLC representing fixed or floating charges over all assets of the Group. The interest rate applicable on this bank loan is 2.50% above LIBOR.

The bank overdraft is repayable on demand with interest being charged at 2.5% over base rate and is secured by a debenture giving fixed and floating charges over all assets of the Group.

Amounts owed to subsidiary undertakings are amounts borrowed from The Real Greek Food Company Limited, a subsidiary of the Company and are repayable on 26 March 2019. The interest rate applicable on the amounts owed to subsidiary undertakings is 3.5%.

 
 15   FINANCIAL INSTRUMENTS 
 

The Group is exposed to the risks that arise from its use of financial instruments. The Group's finance function provides a centralised service to all Group businesses for funding, foreign exchange and interest rates management. Derivative instruments may be transacted solely for risk management purposes. The management consider that the key financial risk factors of the business are liquidity risks, market risk, foreign exchange risk and credit risk.

This note describes the objectives, policies and processes of the Group for managing those risks and the methods used to measure them.

Financial Assets and Liabilities

The Group and Company had the following financial assets and liabilities:

 
                                                                  Group        Parent company 
                                                    26 March   27 March   26 March   27 March 
                                                        2017       2016       2017       2016 
                                                     GBP'000    GBP'000    GBP'000    GBP'000 
 
         Non-current financial assets 
 
         Amounts owed by subsidiary undertakings           -          -      7,974      4,324 
         Other receivables                               947        934          -          - 
 
         Current financial assets 
         Cash at bank and in hand                        271        197          -          - 
         Trade and other receivables*                  1,026        585         53          - 
 
                                                       2,244      1,716      8,027      4,324 
 
 
         Current financial liabilities 
         At amortised cost - borrowings                  180        570         12        200 
         At amortised cost - payables**               12,268      5,346        981        711 
 
         Non-current financial liabilities 
         At amortised cost - borrowings                6,000      2,910      6,000      2,910 
         At amortised cost - payables                      -          -      2,190      1,093 
 
                                                      18,448      8,826      9,183      4,914 
 
 
 

* excludes other taxation and social security receivable and prepayments included in trade and other receivables in note 11.

** excludes other taxation and social security and deferred income included in trade and other payables in note 13.

 
 15   FINANCIAL INSTRUMENTS (continued) 
 

The maturity analysis table below analyses the Group's financial assets and liabilities into relevant maturity groupings based on the remaining period at the balance sheet to the contractual maturity date. The amounts disclosed in the table are contractual undiscounted cash flows.

 
  For the period ended 26 March 2017 
                                                        Between        More 
                                          Less than       1 and        than 
                                             1 year     5 years     5 years       Total 
                                            GBP'000     GBP'000     GBP'000     GBP'000 
 
  Cash at bank and in hand                      271           -           -         271 
  Trade and other receivables                 1,026          47         900       1,973 
  Bank loans and overdrafts                   (180)     (6,000)           -     (6,180) 
  Trade and other payables                 (12,268)           -           -    (12,268) 
 
                                           (11,151)     (5,953)         900    (16,204) 
 
 
 
  For the period ended 27 March 2016 
                                                        Between        More 
                                          Less than       1 and        than 
                                             1 year     5 years     5 years       Total 
                                            GBP'000     GBP'000     GBP'000     GBP'000 
 
  Cash at bank and in hand                      197           -           -         197 
  Trade and other receivables                   585         217         717       1,519 
  Bank loans                                  (570)     (2,910)           -     (3,480) 
  Trade and other payables                  (5,346)           -           -     (5,346) 
 
                                            (5,134)     (2,693)         717     (7,110) 
 
 

The financial instruments recognised on the balance sheets and shown above are all loans and receivables and financial liabilities at amortised cost.

 
 15   FINANCIAL INSTRUMENTS (continued) 
 

The maturity analysis table below analyses the Company's financial assets and liabilities into relevant maturity groupings based on the remaining period at the balance sheet to the contractual maturity date. The amounts disclosed in the table are contractual undiscounted cash flows.

 
  For the period ended 26 March 2017 
                                                        Between 
                                          Less than       1 and 
                                             1 year     5 years       Total 
                                            GBP'000     GBP'000     GBP'000 
 
  Trade and other receivables                    53       7,974       8,027 
  Bank loans and overdrafts                    (12)     (6,000)     (6,012) 
  Trade and other payables                    (983)     (2,190)     (3,173) 
 
                                              (942)       (216)     (1,158) 
 
 
 
  For the period ended 27 March 2016 
                                                        Between 
                                          Less than       1 and 
                                             1 year     5 years       Total 
                                            GBP'000     GBP'000     GBP'000 
 
  Trade and other receivables                     -       4,324       4,324 
  Bank loans and overdrafts                   (200)     (2,910)     (3,110) 
  Trade and other payables                    (711)     (1,093)     (1,804) 
 
                                              (911)         321       (590) 
 
 

The financial instruments recognised on the balance sheets and shown above are all loans and receivables and financial liabilities at amortised cost.

Liquidity Risks

The Group and Company had a committed long term revolving credit facility of GBP6,000,000 (2016: GBP6,000,000) and short term bank overdraft facilities available to manage its liquidity as at 26 March 2017 of GBP500,000 (2016: GBP500,000). Both facilities were extended following the year end as described in note 24.

 
 15   FINANCIAL INSTRUMENTS (continued) 
 

Market Risks

The Group's market risk exposure arises mainly from its floating interest rate interest bearing borrowings. Only the following financial assets and liabilities were interest bearing:

 
                                                            Group        Parent company 
                                              26 March   27 March   26 March   27 March 
                                                  2017       2016       2017       2016 
                                               GBP'000    GBP'000    GBP'000    GBP'000 
                Floating rate 
  Cash at bank and in hand                         271        197          -          - 
  Bank overdraft                                 (180)      (570)       (12)      (200) 
  Bank loans                                   (6,000)    (2,910)    (6,000)    (2,910) 
 
                                               (5,909)    (3,283)    (6,012)    (3,110) 
 
 
 
 

Trade and other receivables and trade and other payables are all non-interest bearing.

Weighted average interest rates paid for bank loans during the period ended 26 March 2017 were 1.9% and period ended 27 March 2016 were 2.0% and the weighted average interest rates paid for bank overdrafts during the period ended 26 March 2017 were 2.5% and period ended 27 March 2016 were 2.5%.

The Group has derived a sensitivity analysis based on a 0.5% variance in LIBOR element of floating interest rates. The annualised impact of an increase in LIBOR by 0.5% applied to the balance of floating rate bank loans at the period end would be GBP30,000 (2016: GBP14,000).

Foreign Exchange Risks

During the periods ended 26 March 2017 and 27 March 2016, the Group did not receive or pay significant amounts denominated in foreign currencies. As purchasing from foreign franchised territories that is not denominated or agreed in Sterling increase to a significant level, the Group will implement a foreign exchange management policy.

Credit Risks

The Group's exposure to credit risk arises mainly from as follows:

 
                                                                  Group        Parent company 
                                                    26 March   27 March   26 March   27 March 
                                                        2017       2016       2017       2016 
                                                     GBP'000    GBP'000    GBP'000    GBP'000 
 
         Cash at bank and in hand                        271        197          -          - 
 
         Trade receivables and other receivables       1,026        585      8,027      4,221 
 
                                                       1,297        782      8,027      4,221 
 
 
 
 
 15   FINANCIAL INSTRUMENTS (continued) 
 

The majority of the Group's cash balances have been held in current accounts at HSBC Bank PLC during the periods ended 26 March 2017 and 27 March 2016 and did not earn any significant interest.

The majority of the Group's trade receivables are due for maturity within 7 days and largely comprise amounts receivable from credit and debit card clearing houses.

Fair Values of Financial Assets and Financial Liabilities

The fair value amounts of the Group's financial assets and liabilities as at 26 March 2017 and 27 March 2016 did not materially vary from the carrying value amounts.

 
 16   DEFERRED TAXATION 
 

Analysis of movements in net deferred tax balance during the period:

 
                                                      Group        Parent company 
                                        26 March   27 March   26 March   27 March 
                                            2017       2016       2017       2016 
                                         GBP'000    GBP'000    GBP'000    GBP'000 
 
  Opening position                       (1,163)      (277)        825        193 
  Arising on acquisition                       -    (1,619)          -          - 
  Transfer to reserves                       307        543        258        517 
 
   Movement in accelerated capital 
    allowances                             (487)      (184)          -          - 
   Tax on share based payments               212        151        155        115 
   Tax on intangible assets                  271        223          -          - 
 
  Transfer (to)/from profit and loss         (3)        190        155        115 
 
  Net deferred tax (liability)/asset       (859)    (1,163)      1,238        825 
 
 

The Group's deferred taxation liability disclosed above relates to the following:

 
                                                             Group        Parent company 
                                          26 March        27 March   26 March   27 March 
                                              2017            2016       2017       2016 
                                           GBP'000         GBP'000    GBP'000    GBP'000 
 
        Deferred tax assets 
  Share options                              1,406             894      1,238        825 
 
  Deferred taxation assets                   1,406             894      1,238        825 
 
 
        Deferred tax liabilities 
  Accelerated capital allowances             1,178             691          -          - 
  Intangible assets                          1,087           1,366          -          - 
 
  Deferred taxation liabilities              2,265           2,057          -          - 
 
 
 
 
 16   DEFERRED TAXATION (continued) 
 

The Company has losses of GBP283,000 (2016: GBP283,000) which, subject to agreement with HM Revenue & Customs, are available to offset against the Company's future profits. A deferred taxation asset in respect of these losses of GBP57,000 (2016: GBP57,000) has not been recognised in the financial statements. Although the directors are confident that the Company will achieve future profitability in line with current expectations, the timing of such profits is uncertain and therefore the directors have not recognised the entire deferred tax asset. The Directors have recognised deferred tax assets in relation to the share based payment charge recognised in the year as such deferred tax asset may be used against future group tax relief.

 
 17    SHARE CAPITAL 
                                                                                   Group        Parent company 
                                                                     27 March   27 March   26 March   27 March 
                                                                         2017       2016       2017       2016 
                                                                      GBP'000    GBP'000    GBP'000    GBP'000 
 
       Allotted, issued called up and fully paid: 
 
  571,385,237 (2016: 569,153,293) ordinary shares of 1p each            5,714      5,692      5,714      5,692 
 
 

The Company has one class of ordinary share which carries no rights to fixed income.

On 21 April 2015, 43,181,818 Ordinary Shares of GBP0.01 were issued by the Company and were allotted for cash at GBP0.11 per Ordinary Share, credited as fully paid and a further 193,457,975 Ordinary Shares of GBP0.01 were issued by the Company at GBP0.11 per Ordinary Share as consideration to acquire 99% of the issued share capital of Franco Manca Holdings Limited.

On 5 August 2016, 1,115,972 Ordinary Shares of GBP0.01 were issued by the Company and were allotted for cash at GBP0.02 per Ordinary Share, credited as fully paid, on the exercise of share warrants in the Company.

On 14 October 2016, 1,115,972 Ordinary Shares of GBP0.01 were issued by the Company and were allotted for cash at GBP0.02 per Ordinary Share, credited as fully paid, on the exercise of unapproved share options in the Company.

 
 18   SHARE BASED PAYMENTS 
 

The Group currently uses a number of equity settled share plans to incentivise to its Directors and employees.

The Group operates four share plans:

   --      The Fulham Shore Enterprise Management Incentive ("EMI") Share Option Plan; 
   --      The Fulham Shore Unapproved Share Option Plan ("Unapproved Plan"); 
   --      The Fulham Shore Company Share Option Plan ("CSOP"); and 
   --      The Fulham Shore Share Incentive Plan ("SIP") 

The Group's Share Plans provide for a grant price equal to the market price of the Company shares on the date of grant. The vesting period on all Share Plans except the SIP is 3 years with an expiration date 7 years from the date of grant. Furthermore, share options are forfeited if the employee leaves the Group before the options vest unless forfeiture is waived at the discretion of the Remuneration Committee, if established, or the Board. For the SIP, the vesting period ranges from 1 day to 3 years with an expiration date 10 years from the date of grant.

The charge recorded in the financial statements of the Group in respect of share-based payments is GBP631,000 (2016: GBP639,000).

The Fulham Shore EMI, Unapproved Plan and CSOP

Outstanding share options under The Fulham Shore EMI, The Fulham Shore Unapproved Share Option Plan and The Fulham Shore CSOP to acquire ordinary shares of 1 pence each as at 26 March 2017 are as follows:

 
                                       Year        Year 
                                      ended       ended 
                                   26 March    27 March 
                                       2017        2016 
 
                                       '000        '000 
 
  At the beginning of the year       55,625      29,927 
 
  Granted during the year             7,200      25,698 
  Exercised during the year         (1,116)           - 
  Lapsed during the year            (1,101)           - 
 
  At the end of the year             60,608      55,625 
 
 
 
 18   SHARE BASED PAYMENTS (continued) 
 
 
  Weighted average exercise price 
                                           Year         Year 
                                          ended        ended 
                                       26 March     27 March 
                                           2017         2016 
 
                                            GBP          GBP 
 
  At the beginning of the year             0.08         0.05 
 
  Granted during the year                  0.18         0.11 
  Exercised during the year              (0.02)            - 
  Lapsed during the year                 (0.11)            - 
 
  At the end of the year                   0.09         0.08 
 
 

Outstanding and exercisable share options to acquire ordinary shares of 1 pence each as at 26 March 2017 under various Group share plans are as follows:

 
            For the year ended 26 March 2017 
                                 Options outstanding                    Options exercisable 
  Range of                                  Weighted                               Weighted 
   exercise                  Weighted        average                Weighted        average 
   prices         Number      average      remaining     Number      average      remaining 
                      of     exercise    contractual         of     exercise    contractual 
                  shares        price           life     shares        price           life 
                    '000          GBP         months       '000          GBP         months 
  EMI 
  GBP0.02          2,232       0.0200             35      2,232       0.0200             35 
  GBP0.05          2,779       0.0500             47      2,779       0.0500             47 
  GBP0.06          9,440       0.0600             55          -            -              - 
 
                  14,451       0.0519             50      5,011       0.0366             42 
 
 
  Unapproved 
  GBP0.05            554       0.0500             47        554       0.0500             47 
  GBP0.06         13,805       0.0600             55          -            -              - 
  GBP0.11         24,673       0.1100             61          -            -              - 
  GBP0.1775          293       0.1775            119          -            -              - 
  GBP0.1825        2,114       0.1825            111          -            -              - 
 
 
                  41,439       0.0967             62        554       0.0500             47 
 
 
  CSOP 
  GBP0.1775          907       0.1775            119          -            -              - 
  GBP0.1825        3,811       0.1825            111          -            -              - 
 
                   4,718       0.1815            113          -            -              - 
 
 
 
 
 18   SHARE BASED PAYMENTS (continued) 
 
 
            For the year ended 27 March 2016 
                                 Options outstanding                    Options exercisable 
  Range of                                  Weighted                               Weighted 
   exercise                  Weighted        average                Weighted        average 
   prices         Number      average      remaining     Number      average      remaining 
                      of     exercise    contractual         of     exercise    contractual 
                  shares        price           life     shares        price           life 
                    '000          GBP         months       '000          GBP         months 
  EMI 
  GBP0.02          2,232         0.02             47      2,232         0.02             47 
  GBP0.05          2,779         0.05             59          -            -              - 
  GBP0.06          9,440         0.06             67          -            -              - 
 
                  14,451         0.05             62      2,232         0.02             47 
 
 
  Unapproved 
  GBP0.02          1,116         0.02             47      1,116         0.02             47 
  GBP0.05            554         0.05             59          -            -              - 
  GBP0.06         13,805         0.06             67          -            -              - 
  GBP0.11         25,698         0.11             73          -            -              - 
 
                  41,173         0.09             70      1,116         0.02             47 
 
 
 

During the year ended 26 March 2017, the market price of ordinary shares in the Company ranged from GBP0.1525 (2016: GBP0.11) to GBP0.2235 (2016: GBP0.2275). The share price as at 26 March 2017 was GBP0.1788 (2016: GBP0.1743).

The fair value of the options is estimated at the date of grant using a Black-Scholes valuation model.

Expected life of options used in the model is based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

Expected volatility was determined by calculating the historical 90 days volatility of the Group's share price over the previous 180 days. The inputs to the Black Scholes model were as follows:

 
                                               Year        Year 
                                              ended       ended 
                                           26 March    27 March 
                                               2017        2016 
 
  Weighted average expected life            3 years     3 years 
  Weighted average exercise price    17.75 to 18.25          11 
                                              pence       pence 
  Risk free rate                              0.50%       0.50% 
  Expected volatility                32.1% to 40.0%       66.8% 
 
 
 
 18   SHARE BASED PAYMENTS (continued) 
 

The Fulham Shore SIP

The Fulham Shore SIP was introduced during the year ended 27 March 2015. Outstanding ordinary shares of 1 pence each granted under The Fulham Shore SIP as at 26 March 2017 are as follows:

 
                                                Year        Year 
                                               ended       ended 
                                            26 March    27 March 
                                                2017        2016 
 
                                                '000        '000 
 
  At the beginning of the year                   591           - 
 
  Granted during the year (Free Shares)            -         591 
 
  At the end of the year                         591         591 
 
 
 
            For the year ended 26 March 2017 
                              SIP shares outstanding                 SIP shares exercisable 
  Range of                                  Weighted                               Weighted 
   exercise                  Weighted        average                Weighted        average 
   prices         Number      average      remaining     Number      average      remaining 
                      of     exercise    contractual         of     exercise    contractual 
                  shares        price           life     shares        price           life 
                    '000          GBP         months       '000          GBP         months 
 
  Nil                591            -             97        591            -             97 
 
                     591            -             97        591            -             97 
 
 
 
 
 18   SHARE BASED PAYMENTS (continued) 
 
 
            For the year ended 27 March 2016 
                              SIP shares outstanding                 SIP shares exercisable 
  Range of                                  Weighted                               Weighted 
   exercise                  Weighted        average                Weighted        average 
   prices         Number      average      remaining     Number      average      remaining 
                      of     exercise    contractual         of     exercise    contractual 
                  shares        price           life     shares        price           life 
                    '000          GBP         months       '000          GBP         months 
 
  Nil                591            -            109        591            -            109 
 
                     591            -            109        591            -            109 
 
 
 

The fair value of the SIP shares is estimated at the date of grant using a Black-Scholes valuation model.

Expected life of SIP shares used in the model is based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

Expected volatility was determined by calculating the historical 90 days volatility of the Group's share price over the previous 180 days. The inputs to the Black Scholes model were as follows:

 
                                           Year        Year 
                                          ended       ended 
                                       26 March    27 March 
                                           2017        2016 
 
  Weighted average expected life              -     3 years 
  Weighted average exercise price             -   Nil pence 
  Risk free rate                              -       0.50% 
  Expected volatility                         -       68.8% 
 
 

Warrants

Outstanding share warrants in the Company to acquire ordinary shares of 1 pence each as at 26 March 2017 are as follows:

 
                                  26 March   27 March 
                                      2017       2016 
                                      '000       '000 
 
  At the beginning of the year       1,116      1,116 
 
  Exercised during the year        (1,116)          - 
 
  At the end of the year                 -      1,116 
 
 
 
 19   NOTE TO CASH FLOWS STATEMENTS 
 
 
                                                            Group                  Parent 
                                                 Year        Year        Year        Year 
                                                ended       ended       ended       ended 
                                             26 March    27 March    26 March    27 March 
                                                 2017        2016        2017        2016 
                                              GBP'000     GBP'000     GBP'000     GBP'000 
       Reconciliation of net cash 
        flows from operating activities 
 
  Profit/(loss) before taxation                 1,144         423       (583)       (899) 
 
       Adjustments 
  Finance income                                  (1)         (4)       (261)         (1) 
  Finance costs                                   135          88         209          77 
  Depreciation and amortisation                 3,269       2,772          20          11 
       Loss on disposal of fixed                    2           -           -           - 
        assets 
  Share based payments expense                    631         639         199         191 
  Cost of acquisition                              26         405           -           - 
 
  Operating cash flows before 
   movements in working capital                 5,206       4,323       (416)       (621) 
 
  Increase in inventories                       (365)       (213)           -           - 
  (Increase)/decrease in trade 
   and other receivables                      (1,166)         131          19         135 
  Increase in trade and other 
   payables                                     6,866          27         188         542 
 
  Cash generated from/(used 
   in) operations                              10,541       4,268       (209)          56 
 
  Income taxes paid                             (268)       (550)           -           - 
 
  Net cash flow from operating 
   activities                                  10,273       3,718       (209)          56 
 
 
 
 
 19   NOTE TO CASH FLOWS STATEMENTS (continued) 
 
 
                                                         Group                    Parent 
 
                                             Year         Year         Year         Year 
                                            ended        ended        ended        ended 
                                         26 March     27 March     26 March     27 March 
                                             2017         2016         2017         2016 
                                          GBP'000      GBP'000      GBP'000      GBP'000 
  Cash flow from acquisition 
   of subsidiaries 
 
  Consideration paid on acquisition         (350)      (6,184)            -      (6,184) 
  Cash and cash equivalents 
   acquired with subsidiaries                   -          340            -            - 
  Cost of acquisition of subsidiary          (26)        (405)            -        (405) 
 
  Net cash flow from acquisition 
   of subsidiaries                          (376)      (6,249)            -      (6,589) 
 
 
 
 20   COMMITMENTS UNDER OPERATING LEASES 
 
 

The Group had aggregate minimum lease payments under non-cancellable operating leases which fall due as follows:

 
                                          Group        Parent company 
                            26 March   27 March   26 March   27 March 
                                2017       2016       2017       2016 
                             GBP'000    GBP'000    GBP'000    GBP'000 
  Land and buildings 
    within one year            4,685      3,367        136          2 
    in two to five years      17,779     12,535        397          - 
    after five years          41,478     29,772          -          - 
 
                              63,942     45,674        533          2 
 
  Others 
    within one year               21         23          -          - 
 
                                  21         23          -          - 
 
                              63,963     45,697        533          2 
 
 

Included above are certain annual lease commitments relating to a subsidiary company that have been guaranteed by the parent company.

Operating lease payments for land and buildings represent rent payable by the Group for a restaurant property. Leases either negotiated as a new lease or acquired through lease assignment have an average term of 20 years and rentals are fixed for an average of 5 years.

 
 
 
   21   CAPITAL COMMITMENTS 
 
 

The Group capital expenditure contracted for but not provided in the financial statements as follows:

 
                                                   Group        Parent company 
                                     26 March   27 March   26 March   27 March 
                                         2017       2016       2017       2016 
                                      GBP'000    GBP'000    GBP'000    GBP'000 
 
  Committed new restaurant builds       3,692      1,928          -          - 
 
 
   22         RELATED PARTY DISCLOSURES 

Other related party transactions

During the period, the Group provided restaurant management or operation services to the following companies in which DM Page and NAG Mankarious are directors and shareholders:

 
  Amounts invoiced (including VAT)                    Group          Parent company 
                                           Year        Year        Year        Year 
                                          ended       ended       ended       ended 
                                       26 March    27 March    26 March    27 March 
                                           2017        2016        2017        2016 
                                        GBP'000     GBP'000     GBP'000     GBP'000 
 
  Bukowski Limited                          (3)          29           -           - 
  Wild Food Ideas Limited                    12          19           -           - 
 
                                              9          48           -           - 
 
 
 
  Amounts outstanding                      Group        Parent company 
   at year end 
                             26 March   27 March   26 March   27 March 
                                 2017       2016       2017       2016 
                              GBP'000    GBP'000    GBP'000    GBP'000 
 
  Bukowski Limited                  1         10          -          - 
  Wild Food Ideas Limited           1          3          -          - 
 
                                    2         13          -          - 
 
 
 
 22   RELATED PARTY DISCLOSURES (continued) 
 

During the period, the Group was invoiced GBP98,000 (2016: GBP73,000) for the services of NJ Donaldson and a further GBPNil (2016: GBP16,000) for corporate finance advisory services by London Bridge Capital Partners LLP, a company in which NJ Donaldson is a director, and the balance outstanding at 26 March 2017 was GBP33,000 (2016: GBPNil).

During the period, the Group was invoiced GBP161,000 (2016: GBP14,000) for franchise fees and products by Bukowski Limited, a company in which NAG Mankarious is a director and DM Page and NAG Mankarious are shareholders. The balance outstanding at 26 March 2017 was GBP21,000 (2016: GBP14,000).

During the period, the Group was invoiced GBP643,000 (2016: GBP480,000) for restaurant management services by Room 307 Limited, a company in which NAG Mankarious and NCW Wong are directors and DM Page, NAG Mankarious and NCW Wong are shareholders. The balance outstanding at 26 March 2017 was GBP299,000 (2016: GBP45,000).

During the period the Group was invoiced GBP128,000 (2016: GBP77,000) for information technology services by Restaurants IT Limited, a company in which NCW Wong is a director and DM Page, NAG Mankarious and NCW Wong are shareholders. The balance outstanding at 26 March 2017 was GBP63,000 (2016: GBP19,000).

Transactions between the Company and its subsidiaries

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation. During the year, the Company provided restaurant management services to the following subsidiaries:

 
  Amounts invoiced (including VAT) 
                                                       Parent company 
 
                                                    Year         Year 
                                                   ended        ended 
                                                26 March     27 March 
                                                    2017         2016 
                                                 GBP'000      GBP'000 
 
  FM98 LTD Limited                                     -           90 
  10DAS Limited                                       49            - 
 
  The Real Greek Food Company Limited                624          450 
  Franco Manca 2 UK Limited                          794          421 
 
                                                   1,467          961 
 
 
 
 22   RELATED PARTY DISCLOSURES (continued) 
 

During the year the Company also loaned amounts to the following subsidiaries:

 
  Amounts loaned/(repaid)                              Parent company 
 
                                                    Year         Year 
                                                   ended        ended 
                                                26 March     27 March 
                                                    2017         2016 
                                                 GBP'000      GBP'000 
 
  FM98 LTD Limited                                     -      (1,380) 
  10DAS Limited                                      324           86 
 
  The Real Greek Food Company Limited            (1,098)      (1,894) 
  Franco Manca 2 UK Limited                        3,326        4,605 
 
                                                   2,552        1,417 
 
 
 
  Amounts outstanding 
   at period end                       Parent company 
                                 26 March    27 March 
                                     2017        2016 
                                  GBP'000     GBP'000 
 
  FM98 LTD Limited                      -           - 
  10DAS Limited                       902          66 
  The Real Greek 
   Food Company Limited           (2,190)     (1,080) 
  Franco Manca 2 
   UK Limited                       7,072       4,155 
 
                                    5,784       3,141 
 
 

The Company is a legal guarantor and a party to an agreement in which 10DAS Limited, a subsidiary company, entered into a new lease to acquire a restaurant space. The total potential aggregate minimum lease payments under this guarantee at the end of the period were GBP1,587,000 (2016: GBP1,712,000). This commitment is included in the Group disclosure in note 20.

   23         ACQUISITION OF FM111 LIMITED 

On 25 July 2016, the Group acquired the entire issued share capital of FM111 Limited for a consideration of GBP350,000 in cash.

The fair values allocated to the assets and liabilities acquired as at the date of the acquisition are as follows:

 
                                    25 July 
                                       2016 
                                    GBP'000 
 
 Property, plant and equipment          350 
 
 Total identifiable net assets          350 
 
 Goodwill on acquisition                  - 
 
 Total consideration                    350 
 
 

Cost of acquisition

The costs of acquiring FM111 Limited, totalling GBP26,000, have been recognised in the consolidated statement of comprehensive income.

Results of the accounting acquiree

The results of the accounting acquiree have been included in the consolidated statement of comprehensive income since the acquisition date and has not generated any revenue or profit or loss for the period. If the accounting acquiree had been a member of the Group from the beginning of the period, it would not have generated any revenue or profit or loss for the period.

   24         SUBSEQUENT EVENTS 

On 31 March 2017, the Group amended and restated its revolving credit facility agreement of GBP6,000,000 with HSBC Bank PLC by increasing the facilities to GBP14,250,000 and extending for a term of four years. On the same date, the Group's overdraft facility was increase to GBP750,000 and renewed for a year.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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July 12, 2017 02:00 ET (06:00 GMT)

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