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RTN Restaurant Group Plc

64.80
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Restaurant Group Plc LSE:RTN London Ordinary Share GB00B0YG1K06 ORD 28 1/8P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 64.80 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Restaurant Group PLC Final Results (7920Y)

08/03/2017 7:00am

UK Regulatory


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TIDMRTN

RNS Number : 7920Y

Restaurant Group PLC

08 March 2017

The Restaurant Group plc

Final results for the 53 weeks ended 1(st) January 2017

Strategic review complete

Trading in line with expectations

Strategic highlights

We have completed the strategic reviews of our brands. While there is much work to do, we are confident in our plan to turnaround the business which has four key elements:

   --      Re-establish the competitiveness of our Leisure brands. 
   --      Serve our customers better and more efficiently. 
   --      Grow our Pubs and Concessions businesses. 
   --      Build a leaner, faster and more focused organisation. 

Price investment and proposition changes are underway, roll out of Leisure sites has been slowed down and GBP10m of cost savings have been identified for delivery in 2019.

Financial highlights

-- Challenging trading year across the Leisure brands; good performance from Pubs and Concessions.

   --      Total revenue up 3.7% to GBP710.7m. 
   --      Like-for-like sales down 3.9%. 
   --      Adjusted profit before tax* down 11.2% to GBP77.1m. 

-- Exceptional charge of GBP116.7m (H1 2016: GBP59.1m, H2 2016: GBP57.6m) primarily reflecting site closures, asset value impairments and provision for onerous leases.

   --      Statutory loss before tax of GBP39.5m (2015: statutory profit before tax GBP86.8m). 
   --      Adjusted EBITDA* down 5.5% at GBP121.0m, adjusted operating profit* down 11.0% to GBP79.2m. 
   --      Adjusted EPS* down 11.2% to 30.0p per share. 
   --      Statutory loss per share of -20.1p (2015: statutory earnings per share 34.5p per share). 
   --      Strong free cash flow of GBP78.9m. 
   --      Full year dividend maintained at 17.4p per share. 
   --      Current trading in line with our expectations. 

* Pre-exceptional charge

Andy McCue, Chief Executive Officer, commented:

"Having completed the strategic reviews of our brands, we are now pursuing a new and focused plan to turnaround and grow the business. TRG has significant scale advantages, a diverse portfolio of brands with strong brand awareness and is highly cash generative. However, there is much to change in our Leisure businesses to provide customers with better value and an improved experience while, at the same time, ensuring we continue to grow our Pubs and Concessions businesses. It will take time to effect the scale of change required and for customers to respond but I'm proud of how our colleagues are rising to the challenge. "

Enquiries:

 
 The Restaurant Group 
  Andy McCue, Chief Executive 
  Officer 
  Barry Nightingale, Chief Financial 
  Officer                               020 3117 5001 
 Instinctif Partners 
  Matthew Smallwood 
  Guy Scarborough                       020 7457 2020 
 

Notes:

1. The Restaurant Group plc operates 488 restaurants and pub restaurants throughout the UK. Its principal trading brands are Frankie & Benny's, Chiquito, Coast to Coast and Brunning & Price. It also operates a multi-brand Concessions business which trades principally in UK airports.

2. Statements made in this announcement that look forward in time or that express management's beliefs, expectations or estimates regarding future occurrences are "forward-looking statements" within the meaning of the United States federal securities laws. These forward-looking statements reflect the Group's current expectations concerning future events and actual results may differ materially from current expectations or historical results.

3. Adjusted measures (*): This report primarily focuses on adjusted measures, denoted by an asterisk. Adjusted measures, unless otherwise stated (e.g. free cash flow) are defined as the equivalent statutory measure before exceptional charges. Adjusted measures are reconciled to the statutory measures on the income statement.

4. Like-for-like sales: This measure provides an indicator of the underlying performance of our existing restaurants. Group like-for-like is calculated by comparing the performance of all mature sites in the current period vs. the comparable period in the prior year

Chairman's statement

2016 was a challenging year for the Group with a consistently disappointing trading performance exposing fundamental issues across our three main Leisure brands, although we continued to benefit from a strong performance from Pubs and Concessions. Total revenues were up 3.7% to GBP710.7m with like-for-like sales for the year down 3.9%. Adjusted profit before tax* was down 11.2% to GBP77.1m and Adjusted EPS* was down 11.2% to 30.0p per share. Statutory loss before tax was GBP39.5m and the statutory loss per share was 20.1p.

We have taken decisive action by implementing a strategy review across all of our leisure brands. It is clear that we had added an unsustainable premium to pricing in our Leisure businesses and that changes to our menus had been insufficiently tested with our customers. Complex operational processes have added costs and the business operating model had become inefficient.

We have a rigorous plan in place to address these issues. 2017 will be a transitional year during which we will implement measures to restore profitability, growth and ultimately transform the business.

There has been substantial change to the Board and to the Executive leadership team to support this programme. I became Chairman in May 2016 and the Board was refreshed with the appointment of two new non-executive Directors, Mike Tye and Graham Clemett in April and June respectively.

Andy McCue joined us as Chief Executive of the business in September. Andy is the ex CEO of Paddy Power plc and brings substantial experience of managing a turnaround in a multi-site consumer business through a rigorous approach to customer insight, the development of the customer proposition and colleague engagement. Barry Nightingale joined us as Chief Finance Officer in June 2016. He has a broad commercial background and turnaround experience allowing him to make an important contribution to this critical phase in the Company's development.

As I highlighted in our Interim Report in August, the Board has taken measures to ensure that we have a more rigorous and disciplined approach to the allocation of capital. We have slowed down our site roll out plans until we can be sure that the Group's brand and location strategy is sufficiently robust. We continue to take action to close underperforming sites where we do not believe they are capable of generating adequate returns.

In spite of our trading challenges, the business continues to generate strong free cash flow, with GBP78.9m in 2016 and as a sign of confidence in our plan the Board is proposing the payment of a final dividend of 10.6 pence per share to be paid on 7 July 2017 to all shareholders on the register on 16 June 2017 (ex-dividend date 15 June 2017). The total dividend for the year is, therefore, maintained at 17.4 pence per share. During this transitional period the Board will assess the dividend based on progress against the plan. The Board will revisit the previous policy of two times EPS cover at the appropriate time.

During 2017, the Group will face well documented external cost pressures from the increases in the National Living Wage, the National Minimum Wage, the Apprenticeship Levy, the revaluation of business rates, higher energy taxes and increased purchasing costs due to the combined effects of a devalued pound and commodity inflation. We expect the trading performance of the business in the first half of 2017 to remain difficult but anticipate momentum improving towards the end of this transitional year as our initiatives start to take effect.

TRG employs over 15,000 people and they are the life blood of our business. The Board would like to record our thanks and appreciation for their hard work, commitment and dedication.

The Board is confident that we have a robust plan and the team and resources in place to deliver.

Debbie Hewitt MBE

Chairman

8 March 2017

Business review

Strategy update

Despite the poor trading performance of the Group in 2016, TRG remains a highly cash generative business which benefits from significant scale and a diversified portfolio. While the Group's performance has suffered due to weakness in our Leisure businesses, it is clear that these performance issues can be addressed and we are confident in our turnaround plans.

Andy McCue joined TRG as CEO on 19th September 2016. In recent months we have made good progress in strengthening the team, completing the strategic review of our brands and conducting a comprehensive review of our cost base.

We have a clear plan to turnaround the business which has four key elements:

   1.   Re-establish competitiveness of our Leisure brands. 
   2.   Serve our customers better and more efficiently. 
   3.   Grow our Pubs and Concessions businesses. 
   4.   Build a leaner, faster and more focused organisation. 

We expect 2017 to be a transitional year. We plan to address the competitiveness of our Leisure businesses head-on, requiring investment in both price and proposition, as well as increased marketing spend to re-engage lapsed customers and attract new ones. We are focused on a volume-led turnaround which will take time as customers respond to the improvements we are making. Where initiatives prove successful, we will invest behind them in order to accelerate our progress.

1. Re-establish competitiveness of our Leisure brands

Frankie & Benny's

We identified last year the key root causes of our decline: loss of value credentials, poor menu changes and lack of operational discipline which impacted the consistency of our offering.

Initial trials of alternative value options indicate that, while a step in the right direction, simply correcting for past mistakes will be insufficient to recover our market share losses endured since 2013. Since then we have traded price over volume while competitors have improved their offer and consequently, we have lost customers who now need to be persuaded to revisit us and regain trust in an improved proposition.

Our initial responses include:

   --      re-focusing our efforts on the core customer base of 'families' and those 'out & about'; 

-- developing an improved customer proposition, more closely aligned to the requirements and preferences of these groups;

-- launching a new weekday value menu at GBP9.95, the lowest price for five years, to be competitive during non-peak times, whilst improving the choice and quality of offering;

   --      reinstating some previously popular dishes; 

-- re-engineering and testing a new core menu in readiness for launch this month, which will offer our customers substantially better value. This menu is also easier for the guest to navigate and less complex in its delivery, enabling us to improve our consistency; and

-- embarking on targeted promotional campaigns, over specific periods, to ensure we are competitive and delivering a compelling offer to the most value-conscious customer segments.

Our improvement focus will be on restoring our value credentials, deepening the distinctiveness of our offer and investing in marketing to attract back lapsed customers.

Chiquito

Chiquito's brand positioning in the market is relatively weak. Compared to competitors, a narrow reach of potential customers are attracted to the brand. Customer research indicates Mexican cuisine and particularly its association with spice, can alienate some potential customers. For the customers that do visit us, their frequency of visit is the lowest of our competitor set, due in part to our value positioning as well as a relatively high proportion of visits being oriented around infrequent, special occasions such as celebrations.

Separately Chiquito has, more recently, substantially underperformed the market. This decline has been driven by poor menu changes, a lack of value competitiveness, speed of service issues, as well as a softer market due to weaker cinema attendances.

Taking learnings from recent menu trials, we have made improvements to the offer, having introduced a weekday value menu offering two courses for GBP10.95 and three courses for GBP14.95, with encouraging early participation rates. We have also tested a variety of promotional mechanics as we build an understanding of the response rates by campaign type, customer segment and versus competitor activity.

We intend to broaden the appeal of the brand, making it accessible to a wider customer base. This will involve:

   --      a widened cuisine extending to, for example, Texan and Californian influences; 

-- providing customers with the option for greater customisation, including of fillings and spice levels;

   --      better value, delivered via an improved price architecture; 
   --      a menu that is easier to understand and navigate; and 

-- reducing unnecessary complexity of dishes, facilitating quicker service and improved consistency.

We will roll out the changes in a sample of restaurants to learn and optimise before implementing more widely. Later in the year, once the changes are widespread, we will invest in marketing behind the rejuvenated proposition.

Coast to Coast

Launched in 2011, Coast to Coast sites showed promising early trading, leading to an acceleration in the opening programme, peaking at 23 restaurants. However, since 2014 the business has suffered extreme declines in like-for-like sales.

The brand positioning has become progressively more premium, which has been at odds with the typical customer missions when visiting out-of-town locations. As with our other Leisure brands, poor price and menu decisions have been made, although the extent of the changes within Coast to Coast have been more pronounced, with a corresponding impact on performance.

We do, however, see an opportunity to re-position the brand towards a focus on steaks and burgers, both of which are growing market segments and yet remain relatively unpenetrated in our current locations. Our offer will be substantially more affordable, with a compelling range and quality ingredients. Inevitably this will result in lower gross margins, which we believe will be offset by increased volume of covers. The more focused offering will also facilitate a stronger brand identity and to maximise its potential, we expect to invest in marketing alongside some capital expenditure to make clear the proposition has changed.

We are developing a plan for how this new proposition will be delivered. In the meantime roll out of further Coast to Coast sites is suspended until we have clear evidence this new proposition is working.

2. Serve our customers better and more efficiently

The business lacks rigorous, streamlined processes and systems that would enable us to deliver the right service standards, with the optimal level of resources, on a consistent basis.

We see opportunities to improve our sales forecasting accuracy, to optimise our labour modelling and to deploy resources more accurately which, in turn, will increase our sales by ensuring the right service level is available at the right times, while removing costs from those parts of the day where we operate sub-optimally.

We have plans to reduce non-value adding or customer facing activities throughout the business, some of which are dependent on process, systems and supplier changes.

We are also focused on equipping our servers with the training and tools, tailored to each brand, to showcase our proposition fully, generating higher sales through cross-sell and up-sell.

3. Grow our Pubs and Concessions businesses

Our Pubs business is well positioned with a distinctive offering and defensible locations. Strong operational execution, along with locally sourced produce, has attracted a loyal and increasing customer base who rate the offering highly, relative to competitors. We see opportunities to further increase sales in existing sites by optimising our menus and pricing and investing in marketing.

The Pubs deliver consistently good and growing returns, with a relatively modest refurbishment capital requirement compared to our other brands. Our Pubs are concentrated in the North West, North Wales and the Home Counties, presenting opportunities to organically extend our footprint. Over the medium-term we expect to increase the rate of openings as we build and convert a bigger pipeline of prospective sites.

Our Concessions business operates five different food and beverage formats, across 37 brands, within 12 UK airports. The business has grown sales and profits consistently driven by new space from contract wins, strong growth in passengers and continued improvement in sales per head and conversion of passengers.

With our unique capabilities enabling us to consistently deliver high operational standards at high volume and peak-load intensity, along with our format development and partnering skills, we are positioned well for further contract wins in the future.

4. Build a leaner, faster, more focused organisation

The business has excess cost driven by complexity and inefficiency. We have undergone a detailed review of the cost base and have identified opportunities to reduce costs by approximately GBP10m on an annual run-rate basis, delivered in 2019. Implementation has begun and the savings we capture in 2017 and 2018 will be re-invested in price, product and marketing to grow the business. The one-off cost to achieve these efficiencies is expected to be c. GBP6m.

These efficiencies will include streamlining our processes, reducing overheads, extracting further purchasing benefits from our scale and reducing the number of people we employ. This will involve some difficult decisions but we are confident our colleagues will embrace being part of a more efficient organisation.

We are effecting a culture change towards a more customer focused, insight-led organisation which can operate at pace. To that end, we are pleased to have made some important changes to the leadership team:

-- Murray McGowan has been appointed Managing Director, Leisure and will join us on 5(th) June 2017. Since 2015, Murray has been the Managing Director for Costa Express and prior to that, worked for Yum! Brands, Cadbury and McKinsey.

-- Lucinda Woods has joined us as Director of Strategy and Business Development and brings analytical and strategic skills from her experience at Paddy Power Betfair, Investec and KPMG.

-- Debbie Moore has joined us as Group HR Director and brings extensive multi-site and large employee company experience from Spirit Pub Company, Royal Mail and Dixons.

-- Keith Janes has been promoted to Property Director, having been at TRG for two years and previously rolled out formats for Costa and Nokia.

We are taking a more disciplined approach to capital investment. We have undertaken a comprehensive review of our property pipeline on a site-by-site basis and have refined our selection criteria, resulting in a reduction in the number of viable prospects.

Business review

Overview of the year

2016 was a disappointing year. Turnover was up 3.7%, benefitting from a 53(rd) week, with like-for-like sales down 3.9%. The underperformance was driven by each of our three major Leisure brands, Frankie & Benny's, Chiquito and Coast to Coast. Our Pubs and Concessions businesses performed well, benefiting from good operational execution.

Brands

Frankie & Benny's (258 units)

The brand had a difficult trading year, with declining like-for-like sales and operating margins, substantially underperforming the market. Operational leadership was changed in June and following the strategic review of the brands at the end of the summer, a series of price and menu trials were launched to test and learn the most effective way to arrest trading performance. 10 sites were opened and 15 sites closed during the year.

Chiquito (79 units)

Chiquito traded poorly in 2016, with declining like-for-like sales and operating margins. While a drop in cinema attendances contributed to some of this decline, the main drivers were poor proposition changes, and operational issues affecting speed of service. Five sites were opened and 12 sites closed during the year.

Coast to Coast (21 units)

Coast to Coast had a difficult year. The brand is relatively young and while lower sales are to be expected from new units after their opening year, sales have continued to decline thereafter. A radical change to the menu in January was received poorly and progressive price changes in recent years have also contributed to significant declines in like-for-like sales. Two sites were opened and two sites closed during the year.

Pub restaurants (57 units)

Our Pub business traded well during the year, growing like-for-like sales and profits. The strong and stable team continued to develop the business, improving the menus and successfully trialling new booking technology to accommodate more covers. Four sites were opened and one closed during the year.

Concessions (59 units)

Our Concessions business had another strong year. While benefitting from strong passenger growth across our UK airport sites, we added to this by successfully driving incremental covers and spend per head. We opened one site during the year, a new pub in Gatwick North terminal which has its own gin distillery and closed two due to airport configuration changes.

Current trading and outlook

Current trading is in line with our expectations.

2017 will be a transitional year for the business, given the significant change underway and the substantial investment in price and marketing. We anticipate momentum improving towards the end of the year as our initiatives start to take effect.

We expect to open between 16 to 20 units in 2017 with associated capital expenditure of between GBP16m-GBP20m. Refurbishment and maintenance capital expenditure will range from GBP20m-GBP25m.

Financial review

Results

TRG had a disappointing year: revenue was up 3.7% to GBP710.7m but, following the exceptional charges, the Group incurred a loss before tax of GBP39.5m (2015: profit before tax of GBP86.8m). The adjusted measures are summarised in the table below:

 
                        53 weeks ended   52 weeks ended 
                             1 January      27 December 
                                  2017             2015 
                                  GBPm             GBPm   % change 
---------------------  ---------------  ---------------  --------- 
 Revenue                         710.7            685.4      +3.7% 
 
 EBITDA *                        121.0            128.0     (5.5%) 
 
 Operating profit *               79.2             88.9    (11.0%) 
 Operating margin *              11.1%            13.0% 
 
 Profit before tax *              77.1             86.8    (11.2%) 
 Tax *                          (17.0)           (19.4) 
 
 Profit after tax *               60.1             67.4    (10.8%) 
 
 EPS (pence)*                    30.02            33.80    (11.2%) 
---------------------  ---------------  ---------------  --------- 
 

*Excludes the impact of the exceptional charge of GBP116.7m.

**Reflects the trading performance vs. the statutory 52 week period in 2015. In 2016, the full year comprised 53 weeks.

Total revenue increased by 3.7%, mainly due to the impact of the 53(rd) week. Total adjusted EBITDA* for the year was GBP121m, a decrease of 5.5% on the prior year and adjusted operating profit* decreased by 11.0% to GBP79.2m. Adjusted group operating margin* for the year was 11.1%, a decrease of 190 basis points on the prior year. Within this, our administration cost base decreased as percentage of turnover by 80 basis points, reflecting cost saving initiatives implemented in many of our central support functions during the latter half of 2016.

Interest costs were a little lower this year, partly due to a lower level of average net debt during the year and partly due to the annualisation of improved terms under the new financing arrangements, which were completed in June 2015. This was partially offset by an increase in non-cash interest as a result of increased onerous lease interest charges.

Overall, this resulted in adjusted total profit before tax* of GBP77.1m, an 11.2% decrease on the prior year. The average tax rate in the year was 22.1%, a little lower than the prior year, resulting in adjusted EPS* of 30.0p, a decrease of 11.2% on the prior year.

Restructuring and exceptional charge

A total exceptional charge of GBP116.7m has been made in the year, GBP59.1m in the first half and a further GBP57.6m in the second half. The total cash element of this charge is GBP43.2m.

We have closed 33 sites and intend to close a further eight underperforming units which we do not believe are capable of generating adequate returns. We have made an exceptional charge in respect of these closures of GBP58.4m in the period relating to impairment of fixed assets, provision for onerous leases and other associated costs as a result of these decisions.

We have impaired a total of 66 sites. The total charge of GBP51.4m in respect of these sites includes fixed asset write downs and contractual cost provisions.

The exceptional charge also includes further costs incurred in the year relating to the Board and management restructuring as well as redundancy and consultancy fees.

The first half 2016 exceptional charge results in 2017 incremental operating profit benefit of GBP7m; the second half charge results in an incremental operating profit benefit of GBP3m in 2017. The difference relates primarily to a lower number of loss-making sites closed in the second half of the year. The operating profit benefit comes from lower depreciation following the impairment charge, onerous leases having been provided for and other efficiencies offset by an increased onerous lease interest cost.

Cash flow

The Group continued to be strongly cash generative, generating GBP78.9m of free cash flow. After development capex of GBP28.8m, GBP34.9m of dividend payments and other non-trading items, net debt reduced by GBP0.1m in the year to GBP28.3m at the year end. Set out below is a summary cash flow for the year.

 
                                                   2016         2015 
                                                   GBPm         GBPm 
                                            -----------  ----------- 
 
 Adjusted operating profit*                        79.2         88.9 
 Working capital and non-cash adjustments           1.1          5.6 
 Depreciation                                      41.8         39.1 
 Operating cash flow                              122.1        133.6 
 Net interest paid                                (0.8)        (1.0) 
 Tax paid                                        (16.2)       (17.6) 
 Maintenance capital expenditure                 (26.2)       (19.7) 
------------------------------------------  -----------  ----------- 
 Free cash flow                                    78.9         95.3 
 Development capital expenditure                 (28.8)       (55.1) 
 Movement in capital creditors                   (10.3)          1.9 
 Dividends                                       (34.9)       (32.1) 
 Purchase of shares                                   -        (1.7) 
 Other items                                      (4.8)          1.9 
------------------------------------------  -----------  ----------- 
 Net cash flow                                      0.1         10.2 
 Net bank debt brought forward                   (28.4)       (38.6) 
------------------------------------------  -----------  ----------- 
 Net bank debt carried forward                   (28.3)       (28.4) 
------------------------------------------  -----------  ----------- 
 

Cost inflation

Food cost inflation pressures were managed well in 2016. This was due to the benefit of contracted supply agreements which shielded the Group from the immediate impact of cost rises observed in the second half of the year. However, the outlook for food and beverage inflation in 2017 is more difficult, with both direct purchase cost inflation and the impact of foreign exchange increasing our input costs. We will continue to take advantage of our highly effective buying function to minimise the impact of these headwinds.

During 2016 we experienced the first National Living Wage increase which resulted in many of our employees benefiting from above inflation wage rises. We expect this trend to continue given the Government's stated aim is to continue to increase the National Living Wage until at least 2020. 2017 also sees the introduction of the Apprentice Levy which will be 0.5% of our annual gross wage bill.

Our other two largest cost items are occupancy and utility costs. The revaluation of business rates, which comes into effect in April 2017, will add approximately GBP3m to the Group's rates bill. Rental inflation continues to increase at c.2% per annum. We expect that our utility costs will increase in 2017 as the Group's current fixed price contracts expire in the third quarter of the year.

Capital expenditure

During the year the Group invested a total of GBP55.0m in capital expenditure compared to GBP74.8m in the prior year. We invested GBP26.2m in maintenance and refurbishment expenditure which included GBP7.0m spent on a Frankie & Benny's bar reduction programme and GBP28.8m in new site development expenditure. During the year we opened a total of 24 new sites. In addition to the 33 closed sites highlighted above, four further sites closed in the year including two concessions which had reached the end of their contractual life and two leisure sites which we declined to renew at the end of their lease. The table below summarises openings and closures during the year.

 
                           Year end   Opened   Closed   Transfers   Year end 
                               2015                                     2016 
                          ---------  -------  -------  ----------  --------- 
 
 Frankie & Benny's              261       10     (15)           2        258 
 Coast to Coast/Filling 
  Station                        28        3      (3)           -         28 
 Chiquito                        86        5     (12)           -         79 
 Garfunkel's                     13        -      (2)         (3)          8 
 Joes Kitchen                     3        1      (2)           2          4 
 Pub restaurants                 54        4      (1)           -         57 
 Concessions                     61        1      (2)         (1)         59 
                          ---------  -------  -------  ----------  --------- 
 
 Total                          506       24     (37)           -        493 
                          ---------  -------  -------  ----------  --------- 
 

Financial and key financial ratios

The Group continues to maintain considerable headroom against the covenant tests of its GBP140m revolving credit facility, which is in place until June 2020.

 
 
                              Banking covenant     2016     2015 
 ---------------------------------------------  -------  ------- 
 Banking covenant ratios: 
 EBITDA / Interest cover                   >4x      60x      63x 
 Net debt / EBITDA                         <3x     0.2x     0.2x 
 Other ratios: 
 Fixed charge cover                        n/a     2.4x     2.7x 
 Balance sheet gearing                     n/a      14%      10% 
                            ------------------  -------  ------- 
 

Tax

The total trading tax charge for the year was GBP17.0m, summarised as follows;

 
                        2016    2015 
                        GBPm    GBPm 
                      ------  ------ 
 
 Corporation tax        16.9    19.1 
 Deferred tax            0.1     0.3 
                      ------  ------ 
 Total                  17.0    19.4 
                      ------  ------ 
 Effective tax rate    22.1%   22.4% 
 

The effective trading tax rate for the year was 22.1% compared to 22.4% in the prior year. The lower tax rate reflects the ongoing reduction in the corporation tax rate. As noted in previous reports the Group's effective tax rate will continue to be higher than the headline UK tax rate primarily due to our capital expenditure programme and the significant levels of disallowable capital expenditure therein.

 
 The Restaurant Group plc 
  Consolidated income statement 
 
                                   53 weeks ended 01 January                 52 weeks ended 27 December 
                                              2017                                      2015 
                              Trading      Exceptional                   Trading       Exceptional 
                                            (see note                                   (see note 
                             business           4)            Total      business           4)           Total 
                    Note      GBP'000        GBP'000        GBP'000      GBP'000         GBP'000       GBP'000 
 
 Revenue              2         710,712               -     710,712          685,381             -     685,381 
 
 Cost of sales                (598,136)       (109,732)   (707,868)        (558,491)             -   (558,491) 
                           ------------  --------------  ----------  ---------------  ------------  ---------- 
 
 Gross 
  profit/(loss)                 112,576       (109,732)       2,844          126,890             -     126,890 
 
 Administration 
  costs                        (33,420)         (6,944)    (40,364)         (37,999)             -    (37,999) 
                           ------------  --------------  ---------- 
 
 Operating 
  profit/(loss)                  79,156       (116,676)    (37,520)           88,891             -      88,891 
 
 Interest payable     5         (2,073)               -     (2,073)          (2,128)             -     (2,128) 
 Interest 
  receivable          5              66               -          66               82             -          82 
                           ------------  --------------  ----------  ---------------  ------------  ---------- 
 
 Profit/(loss) on 
  ordinary 
  activities 
  before tax                     77,149       (116,676)    (39,527)           86,845             -      86,845 
 
 Tax on 
  profit/(loss) 
  from 
  ordinary 
  activities          6        (17,043)          16,405       (638)         (19,447)         1,488    (17,959) 
                                                                     ---------------  ------------  ---------- 
 
 Profit/(loss) 
  for the year                   60,106       (100,271)    (40,165)           67,398         1,488      68,886 
                           ------------  --------------  ----------  ---------------  ------------  ---------- 
 
 
 Earnings/(loss) 
 per share 
 (pence) 
 Basic                7           30.02                     (20.06)            33.80                     34.55 
 Diluted              7           29.84                     (20.06)            33.50                     34.24 
                           ------------                  ----------  ---------------                ---------- 
 
 
 The table below is provided to give additional information to shareholders 
  on a key performance indicator: 
 
 Earnings before 
  interest, 
  tax, 
  depreciation 
  and 
  amortisation                  120,965        (48,626)      72,339          127,991             -     127,991 
 Depreciation and 
  impairment                   (41,809)        (68,050)   (109,859)         (39,100)             -    (39,100) 
                           ------------  --------------  ----------  ---------------  ------------  ---------- 
 
 Operating profit                79,156       (116,676)    (37,520)           88,891             -      88,891 
                           ------------  --------------  ----------  ---------------  ------------  ---------- 
 
 
 
 
 
 The Restaurant Group plc 
 Consolidated statement of changes 
  in equity 
 
                                          Share     Share     Other     Retained    Total 
                                         capital   premium   reserves   earnings 
                                         GBP'000   GBP'000   GBP'000    GBP'000    GBP'000 
 
 Balance at 28 December 2015              56,518    25,255   (11,080)    212,867    283,560 
 
 Loss for the year                             -         -          -   (40,165)   (40,165) 
 Issue of new shares                          32       287          -          -        319 
 Dividends                                     -         -          -   (34,862)   (34,862) 
 Share-based payments - debit 
  to equity                                    -         -      1,323          -      1,323 
 Other reserve movements                       -         -      (230)          -      (230) 
 Current tax on share-based payments 
  taken directly to equity                     -         -          -         73         73 
 Deferred tax on share-based 
  payments taken directly to equity            -         -          -      (581)      (581) 
 
 
 Balance at 01 January 2017               56,550    25,542    (9,987)    137,332    209,437 
                                        --------  --------  ---------  ---------  --------- 
 
 
 Balance at 29 December 2014              56,433    24,495   (11,971)    175,567    244,524 
 
 Profit for the year                           -         -          -     68,886     68,886 
 Issue of new shares                          85       760          -          -        845 
 Dividends                                     -         -          -   (32,115)   (32,115) 
 Share-based payments - credit 
  to equity                                    -         -      2,900          -      2,900 
 Employee benefit trust - purchase 
  of shares                                    -         -    (1,746)          -    (1,746) 
 Other reserve movements                       -         -      (263)          -      (263) 
 Current tax on share-based payments 
  taken directly to equity                     -         -          -        818        818 
 Deferred tax on share-based 
  payments taken directly to equity            -         -          -      (289)      (289) 
 
 
 Balance at 27 December 2015              56,518    25,255   (11,080)    212,867    283,560 
                                        --------  --------  ---------  ---------  --------- 
 
 There is no comprehensive income other than the profit/loss for the 
  year in the year ended 1 January 2017 or the year ended 27 December 
  2015. 
 
 
 The Restaurant Group plc 
 Consolidated balance sheet 
 
                                           At 01 January   At 27 December 
                                                    2017             2015 
                                  Note           GBP'000          GBP'000 
 
 Non-current assets 
 Intangible assets                                26,433           26,433 
 Property, plant and equipment     9             345,952          403,640 
                                        ----------------  --------------- 
                                                 372,385          430,073 
                                        ----------------  --------------- 
 
 Current assets 
 Stock                                             5,632            6,389 
 Trade and other receivables                      18,782           13,366 
 Prepayments                                      15,824           15,267 
 Cash and cash equivalents                         9,568            2,983 
                                        ----------------  --------------- 
                                                  49,806           38,005 
                                        ----------------  --------------- 
 
 Total assets                                    422,191          468,078 
                                        ----------------  --------------- 
 
 Current liabilities 
 Overdraft                                             -            (838) 
 Corporation tax liabilities                     (1,275)          (8,692) 
 Trade and other payables                      (121,850)        (125,388) 
 Other payables - finance 
  lease obligations                                (393)            (355) 
 Provisions                        10           (16,391)          (1,130) 
                                        ----------------  --------------- 
                                               (139,909)        (136,403) 
                                        ----------------  --------------- 
 
 Net current liabilities                        (90,103)         (98,398) 
                                        ----------------  --------------- 
 
 Non-current liabilities 
 Long-term borrowings                           (37,882)         (30,527) 
 Other payables - finance 
  lease obligations                              (2,950)          (2,956) 
 Deferred tax liabilities                        (4,434)         (12,096) 
 Provisions                        10           (27,579)          (2,536) 
                                        ----------------  --------------- 
                                                (72,845)         (48,115) 
                                        ----------------  --------------- 
 
 Total liabilities                             (212,754)        (184,518) 
                                        ----------------  --------------- 
 
 Net assets                                      209,437          283,560 
                                        ----------------  --------------- 
 
 
 Equity 
 Share capital                                    56,550           56,518 
 Share premium                                    25,542           25,255 
 Other reserves                                  (9,987)         (11,080) 
 Retained earnings                               137,332          212,867 
                                        ----------------  --------------- 
 Total equity                                    209,437          283,560 
                                        ----------------  --------------- 
 
 
 The Restaurant Group plc 
 Consolidated cash flow statement 
                                               53 weeks ended   52 weeks ended 
                                                   01 January      27 December 
                                                         2017             2015 
                                        Note          GBP'000          GBP'000 
 
 
 Operating activities 
 Cash generated from operations          11           122,148          133,632 
 Interest received                                         41               82 
 Interest paid                                          (865)          (1,125) 
 Tax paid                                            (16,223)         (17,644) 
                                              ---------------  --------------- 
 Net cash flows from operating 
  activities                                          105,101          114,945 
                                              ---------------  --------------- 
 
 Investing activities 
 Purchase of property, plant and 
  equipment                                          (65,280)         (72,914) 
 Disposal of fixed assets                               2,219              250 
 Net cash flow on exceptional Items                   (7,074)                - 
                                              ---------------  --------------- 
 Net cash flows used in investing 
  activities                                         (70,135)         (72,664) 
                                              ---------------  --------------- 
 
 Financing activities 
 Net proceeds from issue of ordinary 
  share capital                                           319              845 
 Employee benefit trust - purchase 
  of shares                                                 -          (1,746) 
 Net withdrawals/(repayments) of 
  loan draw downs                                       7,000          (8,000) 
 Dividends paid to shareholders          8           (34,862)         (32,115) 
                                              ---------------  --------------- 
 Net cash flows used in financing 
  activities                                         (27,543)         (41,016) 
                                              ---------------  --------------- 
 
 Net increase in cash and cash 
  equivalents                                           7,423            1,265 
 
 Cash and cash equivalents at the 
  beginning of the year                                 2,145              880 
 
 Cash and cash equivalents at the 
  end of the year                                       9,568            2,145 
                                              ---------------  --------------- 
 

The Restaurant Group plc

Notes to the accounts

For the year ended 01 January 2017

 
 1 Segmental analysis 
 
 
 The Group trades in one business segment (that of operating 
  restaurants) and one geographical segment (being the United 
  Kingdom). The Group's brands meet the aggregation criteria set 
  out in paragraph 22 of IFRS 8 "Operating Segments" and as such 
  the Group report the business as one reportable segment. 
 
 
 2 Revenue                                            2016      2015 
                                                   GBP'000   GBP'000 
 Income for the year consists of the following: 
 
 Revenue from continuing operations                710,712   685,381 
 
 Other income not included within revenue 
  in the income statement: 
 Rental income                                       2,260     2,688 
 Interest income                                        66        82 
 
 Total income for the year                         713,038   688,151 
                                                  --------  -------- 
 
 
 3 Profit for the year                           2016      2015 
                                              GBP'000   GBP'000 
 Cost of sales consists of the following: 
 
 Continuing business excluding pre-opening 
  costs                                       594,756   553,106 
 Pre-opening costs                              3,380     5,385 
                                             --------  -------- 
 Trading cost of sales                        598,136   558,491 
 
 Exceptional charge                           109,732         - 
 
 Total cost of sales for the year             707,868   558,491 
                                             --------  -------- 
 
 
 
                                                 2016      2015 
 Profit for the year has been arrived at 
  after charging / (crediting):               GBP'000   GBP'000 
 
 Depreciation                                  41,809    39,100 
 Impairment                                    68,050         - 
 Purchases                                    144,467   142,325 
 Staff costs (see note 4)                     239,297   225,642 
 
 Minimum lease payments                        74,616    67,009 
 Contingent rents                              10,906     9,607 
                                             --------  -------- 
 Total operating lease rentals of land and 
  buildings                                    85,522    76,616 
 Rental income                                (2,260)   (2,688) 
                                             --------  -------- 
 Net rental costs                              83,262    73,928 
                                             --------  -------- 
 
 
 
 4 Exceptional items 
 
                                                   2016                           2015 
                                              Impaired 
                              Exit sites         sites     Other       Total     Total 
                                 GBP'000       GBP'000   GBP'000     GBP'000   GBP'000 
 Impairment of fixed 
  assets                          26,585        41,465         -      68,050         - 
 Void period costs and 
  onerous leases                  27,629         7,218         -      34,847         - 
 
 Other exceptional costs           4,173         2,662     6,944      13,779         - 
                             -----------  ------------  --------  ----------  -------- 
 
                                  58,387        51,345     6,944     116,676         - 
 
 Credit in respect of 
  tax rate change                      -             -     (261)       (261)   (1,488) 
 Tax effect of exceptional 
  Items                          (8,142)       (7,219)     (783)    (16,144)         - 
                             -----------  ------------  --------  ----------  -------- 
                                 (8,142)       (7,219)   (1,044)    (16,405)   (1,488) 
 
                                  50,245        44,126     5,900     100,271   (1,488) 
                             -----------  ------------  --------  ----------  -------- 
 
 
 
 The Group has recorded a charge of GBP58.4m for the exit costs 
  of 33 underperforming sites, and a further eight underperforming 
  units which we intend to exit in the short-term as we do not 
  believe that these sites are capable of generating adequate 
  returns. 
 
  The Group has also made an impairment charge of GBP51.3m against 
  66 sites, as required by IAS 36, which, owing to poor trading 
  performance, are unlikely to generate sufficient cash in the 
  future to justify their book value. 
 Furthermore, the Group has recorded a charge of GBP5.1m for 
  the Board and management restructuring and strategic review 
  costs, together with an accelerated charge of GBP1.8m in respect 
  of the cancellation by savers of options for the 2014 & 2015 
  Save as You Earn schemes. 
 The Group has recognised a GBP16.4m tax credit in relation to 
  these exceptional items (52 weeks ended 27 December 2015: GBP1.5m 
  tax credit in relation to revaluation of the deferred tax liability). 
 
 
 5 Net finance charges                              2016      2015 
                                                 GBP'000   GBP'000 
 
 Bank interest payable                               834     1,075 
 Other interest payable                              465       334 
 Facility fees                                       387       338 
 Interest on obligations under finance leases        387       381 
                                                --------  -------- 
 Total borrowing costs                             2,073     2,128 
                                                --------  -------- 
 
 Bank interest receivable                            (5)       (9) 
 Other interest receivable                           (8)      (13) 
 Loan note interest receivable                      (53)      (60) 
                                                --------  -------- 
 Total interest receivable                          (66)      (82) 
                                                --------  -------- 
 
 Net finance charges                               2,007     2,046 
                                                --------  -------- 
 
 
 
   6 Tax 
                                              Trading   Exceptional     Total     Total 
                                                 2016          2016      2016      2015 
 a) The tax charge comprises:                 GBP'000       GBP'000   GBP'000   GBP'000 
 
 Current tax 
     UK corporation tax at 20.0% (2015: 
      20.25%)                                  17,011       (8,014)     8,997    19,624 
     Adjustments in respect of previous 
      years                                     (116)             -     (116)     (525) 
                                             --------  ------------  --------  -------- 
                                               16,895       (8,014)     8,881    19,099 
                                             --------  ------------  --------  -------- 
 
 
 Deferred tax 
     Origination and reversal of temporary 
      differences                                  27             -        27        24 
     Adjustments in respect of previous 
      years                                       121             -       121       324 
     Credit in respect of rate change 
      on deferred tax liability                     -         (261)     (261)   (1,488) 
     Credit in respect of fixed asset 
      write downs and disposals                     -       (8,130)   (8,130)         - 
                                             --------  ------------  --------  -------- 
                                                  148       (8,391)   (8,243)   (1,140) 
                                             --------  ------------  --------  -------- 
 
 Total tax charge for the year                 17,043      (16,405)       638    17,959 
                                             --------  ------------  --------  -------- 
 
 
 b) Factors affecting the tax charge 
  for the year 
 
 The tax charged for the year varies from the standard UK corporation 
  tax rate of 20.0% (2015: 20.25%) due to the following factors: 
 
                                              Trading   Exceptional 
                                                 2016          2016       2016      2015 
                                              GBP'000       GBP'000    GBP'000   GBP'000 
 
 Profit/(loss) on ordinary activities 
  before tax                                   77,149     (116,676)   (39,527)    86,845 
                                             --------  ------------  ---------  -------- 
 
 Profit/(loss) on ordinary activities 
  before tax multiplied 
 by the standard UK corporation 
  tax rate of 20.0% (2015: 20.25%)             15,430      (23,335)    (7,905)    17,586 
 
 Effects of: 
 Depreciation/impairment on non-qualifying 
  assets                                        1,868         4,765      6,633     1,960 
 Expenses / (income) not deductible 
  for tax purposes                                621         2,616      3,237       103 
 Credit in respect of rate change 
  on deferred tax liability                         -         (261)      (261)   (1,488) 
 Adjustment in respect of previous 
  years                                         (876)         (190)    (1,066)     (202) 
 
 Total tax charge for the year                 17,043      (16,405)        638    17,959 
                                             --------  ------------  ---------  -------- 
 
 
 The Finance Act 2012 introduced a reduction in the main rate 
  of corporation tax from April 2015 from 21% to 20% resulting 
  in a blended rate of 20.25% being used to calculate the tax liability 
  for the 52 weeks ended 27 December 2015 and 20% for the 53 weeks 
  to 01 January 2017. 
 
 The Finance (No.2) Act 2015 introduced a reduction in the main 
  rate of corporation tax from 20% to 19% from April 2017 and from 
  19% to 18% from April 2020. These reductions were substantively 
  enacted on 26 October 2015. 
 
 The Finance Act 2016 introduced a further reduction in the main 
  rate of corporation tax to 17% from April 2020. This was substantively 
  enacted on 06 September 2016. The deferred tax provision at the 
  balance sheet date has been calculated at this rate, resulting 
  in a GBP0.3m tax credit. 
 
 
 7 Earnings per share                                     2016          2015 
 
 
 a) Basic earnings per share: 
 Weighted average ordinary shares for the 
  purposes of basic earnings per share             200,230,299   199,408,183 
 
 Total (loss)/profit for the year (GBP'000)           (40,165)        68,886 
 
 Basic earnings per share for the year (pence)         (20.06)         34.55 
                                                  ------------  ------------ 
 
 Total (loss)/profit for the year (GBP'000)           (40,165)        68,886 
 Effect of exceptional items on earnings 
  for the year (GBP'000)                               100,271       (1,488) 
                                                  ------------  ------------ 
 Earnings excluding exceptional items (GBP'000)         60,106        67,398 
 
 Adjusted earnings per share (pence)                     30.02         33.80 
                                                  ------------  ------------ 
 
 
 b) Diluted earnings per share: 
 
 Weighted average ordinary shares for the 
  purposes of basic earnings per share             200,230,299   199,408,183 
 
 Effect of dilutive potential ordinary shares: 
 Dilutive shares to be issued in respect 
  of options granted under the share option 
  schemes                                              404,829       488,349 
 Shares held by employee benefit trust                 814,855     1,262,608 
 
                                                   201,449,983   201,159,140 
                                                  ------------  ------------ 
 
 Diluted earnings per share (pence)                    (20.06)         34.24 
 Adjusted diluted earnings per share (pence)             29.84         33.50 
 
 
 The additional non-statutory earnings per share information 
  (where exceptional items, described in note 5, have been 
  added back) has been provided as the Directors believe it 
  provides a useful indication as to the underlying performance 
  of the Group. 
 
 Diluted earnings per share information is based on adjusting 
  the weighted average number of shares for the purposes of 
  basic earnings per share in respect of notional share awards 
  made to employees in regards of share option schemes and 
  the shares held by the employee benefit trust. 
 
 8 Dividend 
                                                      2016      2015 
                                                   GBP'000   GBP'000 
 Amounts recognised as distributions to equity 
  holders during the year: 
 
 Final dividend for the 52 weeks ended 27 
  December 2015 of 10.60p (2014: 9.30p) per 
  share                                             21,237    18,550 
 Interim dividend for the 53 weeks ended 
  01 January 2017 of 6.80p (2015: 6.80p) per 
  share                                             13,625    13,565 
                                                  --------  -------- 
 Total dividends paid in the year                   34,862    32,115 
                                                  --------  -------- 
 
 Proposed final dividend for the 53 weeks 
  ended 01 January 2017 of 10.60p (2015 actual 
  proposed and paid: 10.60p) per share              21,240    21,176 
                                                  --------  -------- 
 
 
 
 9 Property, plant and equipment 
                                                           Fixtures, 
                                             Land and      equipment 
                                            buildings   and vehicles      Total 
                                              GBP'000        GBP'000    GBP'000 
 Cost 
 At 29 December 2014                          447,403        162,940    610,343 
 Additions                                     50,842         23,975     74,817 
 Disposals                                    (8,360)        (5,079)   (13,439) 
 
 At 27 December 2015                          489,885        181,836    671,721 
                                           ----------  -------------  --------- 
 
 Accumulated depreciation and impairment 
 At 29 December 2014                          141,547        100,220    241,767 
 Provided during the year                      20,848         18,252     39,100 
 Impairment                                         -              -          - 
 Disposals                                    (7,869)        (4,917)   (12,786) 
 
 At 27 December 2015                          154,526        113,555    268,081 
                                           ----------  -------------  --------- 
 
 
 Cost 
 At 28 December 2015                          489,885        181,836    671,721 
 Additions                                     38,445         16,558     55,003 
 Disposals                                    (6,536)        (6,801)   (13,337) 
 
 At 01 January 2017                           521,794        191,593    713,387 
                                           ----------  -------------  --------- 
 
 Accumulated depreciation and impairment 
 At 28 December 2015                          154,526        113,555    268,081 
 Provided during the year                      22,533         19,276     41,809 
 Impairment                                    54,807         13,243     68,050 
 Disposals                                    (3,991)        (6,514)   (10,505) 
 
 At 01 January 2017                           227,875        139,560    367,435 
                                           ----------  -------------  --------- 
 
 
 Net book value as at 28 December 
  2015                                        335,360         68,281    403,640 
 
 Net book value as at 01 January 
  2017                                        293,919         52,033    345,952 
                                           ----------  -------------  --------- 
 
 
 10 Provisions                                        2016      2015 
                                                   GBP'000   GBP'000 
 
 Provision for onerous lease contracts              19,853     2,714 
 Provision for property exit costs                  24,117       952 
 
 Balance at the end of the year                     43,970     3,666 
                                                  --------  -------- 
 
 Analysed as: 
      Amount due for settlement within one year     16,391     1,130 
      Amount due for settlement after one year      27,579     2,536 
 
                                                    43,970     3,666 
                                                  --------  -------- 
 
 
                                               Onerous      Property 
                                       lease contracts    exit costs     Total 
                                               GBP'000       GBP'000   GBP'000 
 
 Balance at 28 December 2015                     2,714           952     3,666 
 Additional provisions made                     18,197        30,221    48,418 
 Amounts utilised                              (1,161)       (6,831)   (7,992) 
 Provisions released                               (5)         (225)     (230) 
 Adjustment for change in discount 
  rate                                           (337)             -     (337) 
 Unwinding of discount                             445             -       445 
 
 Balance at 1 January 2017                      19,853        24,117    43,970 
                                     -----------------  ------------  -------- 
 
 
 The provision for onerous contracts is in respect of lease agreements 
  and covers the element of expenditure over the life of those 
  contracts which are considered onerous, expiring in 1 to 30 
  years. 
 
 The provision for property exit costs includes the costs of 
  strip out and dilapidations and the costs expected to be incurred 
  over the void period until the property is sublet. In addition, 
  this includes a provision for other committed costs arising 
  from the strategic exit project. 
 
 
 
 11 Reconciliation of profit before tax to cash generated from 
  operations 
                                                      2016      2015 
                                                   GBP'000   GBP'000 
 
 (Loss)/profit before tax                         (39,527)    86,845 
 Net finance charges                                 2,007     2,046 
 Impairment (non cash)                              68,050         - 
 Provision for future lease and other costs         46,860         - 
 Share-based payments                                1,323     2,900 
 Depreciation                                       41,809    39,100 
 Decrease / (increase) in stocks                       757     (859) 
 Increase in debtors                               (5,973)   (5,633) 
 Increase in creditors                               6,842     9,233 
 
 Cash generated from operations                    122,148   133,632 
                                                 ---------  -------- 
 
 
 12 Reconciliation of changes in cash to the 
  movement in net debt                              2016       2015 
                                                 GBP'000    GBP'000 
 Net debt: 
 At the beginning of the year                   (28,382)   (38,578) 
 Movements in the year: 
   (Proceeds from) / repayments of loan draw 
    downs                                        (7,000)      8,000 
   Non-cash movements in the year                  (355)        931 
   Cash inflow / (outflow)                         7,423      1,265 
 
 At the end of the year                         (28,314)   (28,382) 
                                               ---------  --------- 
 
 
 Represented                                                    At 27 
  by:                  At 29   Cash flow    Non-cash             & 28   Cash flow    Non-cash      At 01 
                    December   movements   movements         December   movements   movements    January 
                                  in the      in the                       in the      in the       2017 
                        2014        year        year             2015        year        year 
                   ---------  ----------  ----------  ---------------  ----------  ----------  --------- 
                     GBP'000     GBP'000     GBP'000          GBP'000     GBP'000     GBP'000    GBP'000 
 Cash and cash 
  equivalents            880       2,103           -            2,983       6,585           -      9,568 
 Overdraft                 -       (838)           -            (838)         838           -          - 
 Bank loans 
  falling due 
  after one year    (39,458)       8,000         931         (30,527)     (7,000)       (355)   (37,882) 
 
 
                    (38,578)       9,265         931         (28,382)         423       (355)   (28,314) 
                   ---------  ----------  ----------  ---------------  ----------  ----------  --------- 
 

13 Basis of preparation

The Group's preliminary announcement and statutory accounts in respect of 2016 have been prepared on the going concern basis. The financial information set out above does not constitute the Group's statutory accounts for the years ended 1 January 2017 or 27 December 2015 but is derived from those accounts. Statutory accounts for 2015 have been delivered to the Registrar of Companies and those for 2016 will be delivered following the Company's Annual General Meeting. The 2016 statutory accounts are prepared on the basis of the accounting policies stated in the 2015 statutory accounts. The auditor has reported on those accounts; their reports were unqualified and unmodified and did not contain statements under s498 (2) or (3) of the Companies Act 2006.

This information is provided by RNS

The company news service from the London Stock Exchange

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