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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Individual Rest | LSE:IRC | London | Ordinary Share | GB00B1J2C967 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 9.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:6733T
Individual Restaurant Company PLC
26 March 2007
Individual Restaurant Company Plc (formerly Bank Restaurant Group plc)
Unaudited Preliminary Results for the year ended 31 October 2006
Individual Restaurant Company Plc, the operator of 24 premium casual dining
restaurants throughout the UK which predominantly trade under the Piccolino and
Restaurant Bar and Grill format today announces results for the year ended 31
October 2006 which do not include any contribution from the acquisition of
Individual Restaurant Company on 22 December 2006. Therefore these results only
reflect the trading of Bank and Zinc.
Year ended 31 October 2006 Year ended 31 October 2005
Turnover (#m) 13.63 8.67
Pre-tax loss before exceptional items (#m) (0.62) (0.15)
Pre-tax loss (#m) (3.52) (0.15)
EPS (loss) (4.86p) (0.21p)
* Group's focus on Piccolino and Bar and Grill consistent with the declared
strategy
* Overall Bank and Zinc performances in 2006 were in line with the Board's
expectations
* Integration on schedule and some parts of the plan already completed ahead
of time
- Bar and Grill menu launched in Zinc Manchester has delivered encouraging
results
- Integration of London Head Office completed one month early
- Purchasing synergies are being achieved
* Minimum of six restaurant openings per year
- Liverpool Bar & Grill to open at the start of April 2007
- Sheffield and West Didsbury Piccolinos due to open before July 2007
* Current trading: pro forma sales for the first ten weeks of 2007 +25%
across the entire estate
Steven Walker, Chief Executive of Individual Restaurant Company Plc, said:
"These results reflect the period prior to the acquisition of Individual
Restaurant Company Limited, which is the Company's main focus since year end.
Integration of the businesses is on track and progressing well. Pro forma sales
are 25% ahead so far this year and our opening programme for 2007 for Piccolino
and Bar and Grill is largely in place. The Company is well set for further
progress and for the future."
26 March 2007
Enquiries:
Individual Restaurant Company Plc Tel: 0161 839 5511
Steven Walker, Chief Executive
Vernon Lord, Finance Director
College Hill Tel: 020 7457 2020
Matthew Smallwood
Chairman's Statement
Introduction
In my Chairman's statement for the year ended October 2005 we referred to the
need for the Bank business to consolidate the restaurant and bar sector and
expand its operations substantially.
I am pleased therefore to report that since that date we have delivered on that
commitment and the Company has made two acquisitions: Zinc Bar and Grill Limited
("Zinc") and Individual Restaurant Company Limited ("IRC"), with the latter
being the transformational acquisition which the Board had been seeking. Zinc
was acquired on 17 November 2005 for #1.5m in cash and shares. Zinc owned and
operated five Zinc Bar and Grills; Glasgow, Birmingham, Manchester and London
(2). On 22 December 2006 Bank acquired IRC for #31.5m in cash, shares and
settlement of debt, changing the group focus and extending its brand portfolio
to include the highly successful Piccolino and Bar and Grill brands. Following
the acquisitions, the Group is now significantly enlarged, incorporating 24
restaurants, and has a clear defined strategy primarily focused around the roll
out of the Piccolino format.
On completion of the IRC acquisition Bank Restaurant Group plc was renamed
Individual Restaurant Company Plc.
The results detailed below relate only to the Bank and Zinc businesses and do
not incorporate any financial information for IRC as the acquisition occurred
post the balance sheet date of 31 October 2006.
Results
Turnover for the year ended 31 October 2006 was up 57% to #13.63m (2005:
#8.67m). The three Bank restaurants grew turnover 1.4% to #8.79m (2005: #8.67m)
and the Zinc estate contributed #4.84m (2005: #nil).
Restaurant EBITDA for the year ended 31 October 2006 grew 24% to #1.56m (2005:
#1.26m). The three Bank Restaurants returned EBITDA of #1.37m (2005: #1.26m).
The Zinc estate contributed EBITDA of #0.19m in the year (2005: #nil).
Central costs for 2006 were #1.09m (2005: #0.74m) which included payments of
#0.27m to Conran Restaurants Limited for services provided under the restaurant
services agreement entered into at the time of the Zinc acquisition. This has
now been terminated.
The Group's loss before tax for the year to 31 October 2006 increased to #3.52m
(2005: #0.15m) due predominantly to exceptional costs in the year of #2.90m
(2005: #nil) arising from the discontinuation of the plans to expand the Zinc
brand (see note 3). This discontinuation was a key component in the Company's
strategy post the imminent reverse takeover of IRC of focusing on IRC's two
brands - Piccolino and Restaurant Bar and Grill. Accordingly the Zinc flagship
in Heddon Street, London is due to open as the first central London Piccolino in
May.The Zincs in Manchester and Glasgow are now operated by the Restaurant Bar
and Grill team. The implementation of the Restaurant Bar and Grill menu into
Zinc Manchester has had pleasing results so far. Solutions for the loss making
Zinc in Birmingham are being actively worked on including its possible sale
following the sale of the loss making Zinc in Fulham during the year for
proceeds of #0.35m. The development of a Zinc in the Trafford centre, Manchester
has been cancelled.
Loss per share was a loss of 4.86p compared with a loss of 0.21p in 2005.
Acquisition of Individual Restaurant Company Limited
On 22 December 2006 the Company announced that it had acquired the entire share
capital of IRC for an initial consideration of #31.5m made up of cash paid to
shareholders of #13.0m, shares issued to shareholders of #1.40m and the
settlement of #17.1m of existing debt. The acquisition was funded from the
placing of #32.0m of new equity at #1.05 per share. The shares issued to the
vendors are subject to a 12 month lock in from the date of acquisition.
Following the acquisition, the Company's accounting reference date will be
changed from 31 October to 31 December. The enlarged Group will report audited
interim results for the 8 months to 30 June 2007 and audited results for the 14
months ending 31 December 2007.
On acquisition IRC operated 17 restaurants under two key brands, regularly
serving over 23,000 customers per week. There are 13 restaurants operating under
the Piccolino brand and four restaurants operating under the Restaurant Bar and
Grill brand. Both brands operate within the premium casual dining market.
Piccolino
IRC created the Piccolino brand as an Italian restaurant concept serving both
modern and classic Italian food. Five of the current restaurants operating under
this brand are city centre based with the remaining eight restaurants based in
affluent suburban and town centre locations. IRC have opened 11 of the
restaurants since January 2004.
The average spend per head is #22 as a result of many customers choosing to
trade up from pizza and pasta dishes to dishes such as sea-bass, swordfish,
fillet steak and veal. The ability to operate in both the casual and premium
casual marketplace, due to a broad range of menu choice, is a key differentiator
for Piccolino and acts to widen the potential customer base significantly.
Restaurant Bar and Grill
The Restaurant Bar & Grill branded restaurants serve high quality cuisine
alongside wines and cocktails from around the world, in striking, contemporary
environments. There are four restaurants in the portfolio: two based in city
centre locations in Manchester and Leeds and two based in affluent suburban and
town centre locations. The restaurants are contemporary and informal, featuring
open kitchens which are designed to add atmosphere to the dining experience. The
restaurants have attracted great critical acclaim both locally and nationally.
The Board believe that the Piccolino and Restaurant Bar and Grill brands are
sufficiently different as to be able to trade well in close proximity. In both
Leeds and Manchester the two brands trade in close proximity and have
demonstrated that, despite competing for a share of the premium casual dining
market, they trade very profitably.
Growth Strategy
The core strategy of the Group is to:
* roll out the restaurant estate in a controlled fashion with prime focus on
the Piccolino brand, opening a minimum of six restaurants per year;
* extract purchasing and central cost synergies from combining the two
businesses;
* convert Zinc Heddon Street into a Piccolino opening before end of May
2007;
* implement the Restaurant Bar and Grill menu into the Zinc estate;
* implement and roll out IRC's "key drivers" across the Bank and Zinc estate
IRC Drivers
The Board believe the success of a restaurant is determined by the quality of
its people, food, customer service and cleanliness. These key drivers are being
implemented across the Bank and Zinc estate and sophisticated systems and
controls are being put in place to measure these four key performance indicators
alongside financial indicators on a site by site basis. Key financial and non
financial indicators for each restaurant will be summarised in a balance
scorecard and issued to all restaurant management on a monthly basis. All
results will be published in league tables to highlight the best and worst
performers which experience within the IRC estate has shown it encourages better
performance.
Branded Roll-out
The Board believe the company has significant growth potential within the UK and
plan to continue to grow the restaurant portfolio with particular emphasis on
the Piccolino brand and management have identified over 100 suitable city and
affluent suburban and town centre locations.
Looking ahead to 2007, the Group plans to open six new restaurants in the
current year. Three of these new sites have already been secured. The Liverpool
Bar and Grill will be open at the beginning of April with Piccolinos in
Sheffield and West Didsbury due to be open by July 2007. Further to this
strategy, Angus Gregory will join the operating board as property director on 1
April 2007. Angus brings to IRC a wealth of experience from The Restaurant
Group and latterly, Nando's. His principal role will be to identify future
sites to satisfy the Group's expansion plans going forward. The roll out of the
Piccolino and Restaurant Bar & Grill formats is a key focus for the business in
2007.
Board and Management
On 22 December 2006; Steven Walker, Vernon Lord, Iain Donald and Richard Simpson
were all appointed to the Board. On the same day Christian Delteil, Geoffrey
Smith, Leigh Collins and Paul Goodale resigned from the Board and I would like
to thank them for their loyal service over the years during the company's
existence as Bank Restaurant Group plc.
I would like to thank our staff for their dedication and good spirit, and our
shareholders for their patience during this period of change.
Current Trading
On 31 January 2007 the Company announced that it had experienced strong trading
for the five week Christmas trading period to 31 December 2006. On a pro-forma
basis compared to the same period last year, total sales were up by 30% across
the entire restaurant estate. Sales increased by 59% at the 17 Piccolinos and
Restaurant Bar & Grill formats, whilst the Bank and Zinc estate was down 2%.
The growth in sales was driven, in part, by six new openings completed during
the year. Five new Piccolino restaurants were opened in Nottingham, Newcastle,
Virginia Water, Wandsworth and Wimbledon as well as the Group's fourth
Restaurant Bar and Grill in Leeds. The Group also experienced a strong
performance from its like for like estate.
In the ten weeks of 2007 to date the key successes have been:
* introduction of the Restaurant Bar and Grill menu into Zinc Manchester
which has resulted in encouraging like for like sales in the first three
weeks since re-opening;
* integration of the entire London head office one month ahead of schedule;
* renegotiating new purchasing deals with four key suppliers;
* opening a centre for excellence in Manchester for food and beverage
development and training;
* closing Zinc Heddon St and starting its conversion to a Piccolino (to be
opened before the end of May)
Compared to the same period last year sales for the first 10 weeks of 2007 have
been 25% up on a pro-forma basis across the entire restaurant estate.
The acquisition of IRC was a transformational deal and it is pleasing to report
much has been achieved so soon after the transaction. The Board believes the
Company has excellent brands and good prospects for the future.
Robert Breare
Chairman
Consolidated Profit and Loss Account
For the year ended 31 October 2006
Continuing Acquisitions 2006 2005
Operations
#'000 #'000 #'000 #'000
TURNOVER 8,786 4,840 13,626 8,668
Cost of sales (6,917) (4,991) (11,908) (6,924)
GROSS PROFIT 1,869 (151) 1,718 1,744
Other operating income 41 50 91 -
Administrative expenses (1,958) (352) (2,310) (1,798)
Administrative expenses: (829) (2,071) (2,900) -
exceptional
OPERATING LOSS (877) (2,524) (3,401) (54)
Interest receivable __________ __________ 16 6
Interest payable and similar (131) (101)
charges
__________ __________
LOSS ON ORDINARY ACTIVITIES
BEFORE TAXATION
(3,516) (149)
Tax on loss on ordinary - -
activities
__________ __________
LOSS FOR THE FINANCIAL YEAR (3,516) (149)
__________ __________
Loss per share - basic and (4.86p) (0.21p)
diluted
There were no recognised gains and losses other than the loss for the year ended
31 October 2006 of #3.52m (2005: #0.15m).
Consolidated Balance Sheet
As at 31 October 2006
2006 2005
#'000 #'000
Fixed assets
Intangible assets 196 245
Tangible assets 6,151 4,350
6,347 4,595
Current assets
Stocks 167 85
Debtors 768 329
Cash at bank and in hand 19 6
Total current assets 954 420
Creditors: falling due within one year (3,628) (1,703)
Net current liabilities (2,674) (1,283)
Total assets less current liabilities 3,673 3,312
Creditors: amounts falling due after more than one year (4,208) (731)
(535) 2,581
Capital and reserves
Called up share capital 1,125 725
Share premium account 7,925 7,925
Profit and loss account (9,585) (6,069)
Equity shareholders' funds (535) 2,581
Consolidated Cash Flow Statement
For the year ended 31 October 2006
Notes 2006 2005
#'000 #'000
Net cash inflow from operating activities 8a 953 434
Returns on investments and servicing of finance
Interest received 16 6
Interest paid (129) (97)
Interest element of finance lease rental payments (2) (4)
(115) (95)
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (284) (53)
Proceed of fixed assets 349 -
Purchase of subsidiary undertakings including costs (750)
Net cash acquired with subsidiary (210)
Acquisition of Zinc Bar & Grill (895) (53)
Net cash (outflow)/inflow before financing (57) 286
Financing
New long term loans 750 -
Repayment of long terms loans (620) (360)
Repayment of capital element of finance lease and
hire purchase contracts (18) (39)
112 (399)
Increase/(Decrease) in cash 8b 55 (113)
Notes to the Accounts
For the year ended 31 October 2006
1. Going Concern
The consolidated Group balance sheet as at 31 October 2006 shows a net liability
position of #0.53m. On the 22 December 2006 the Company completed the
acquisition of the entire share capital of IRC. This transaction resulted in
significant improvement in the net asset position of the Group as a result of:
a). A #32.0m share placing and;
b). The conversion by CGL Restaurants Limited of the entire 41,666,667
convertible preference shares into ordinary shares resulting in the reversal of
the #0.85m debt valuation of these shares as shown in note 7.
Note 9 shows a pro-forma statement of net assets prepared on a similar basis as
the one reported in the placing document and clearly demonstrates the Group's
net liability position was only temporary therefore supports the Board's
decision to prepare the accounts on a going concern basis.
2. Financial information and comparatives
The results for the year ended 31 October 2006 are unaudited and do
not constitute accounts within the meaning of section 240 of the Companies Act
1985. The results have been drawn up using accounting policies and presentation
consistent with those applied in the audited accounts for the period ended 31
October 2005. The comparative information contained in this report for the year
ended 31 October 2005 does not constitute the statutory accounts for that
financial period. Those accounts have been reported on by the Company's
auditors, Ernst & Young LLP and delivered to the Registrar of Companies. The
report of the auditors was unqualified and did not contain a statement under
section 237(2) or (3) of the Companies Act 1985.
3. Exceptional charge
In the year there was an exceptional charge of #2.90m:
2006
#'000
Loss on disposal of Fulham 263
Impairment of Zinc goodwill 829
Impairment of Zinc fixed asset values 1,092
Provisions and write offs on new & existing sites 716
____________
2,900
____________
The impairment of Zinc goodwillhas been made as a result of the wind-down
generally of the Zinc brand and identity.
The impairment of Zinc fixed asset values relates primarily to Birmingham as the
restaurant made a loss in 2006 and is likely to make a loss in 2007.
At the year end the acquisition of IRC was imminent and the Board decided they
would cease the roll out of the Zinc brand which meant provisions and write-offs
were required on new (Trafford Centre) and existing sites (Zinc Heddon St site)
to cover design fees, fit out costs, legal costs and a potential claim resulting
from a rescinded lease.
4. Tax on loss on ordinary activities
2006 2005
#'000 #'000
Current tax
Total current tax - -
Deferred tax
Origination and reversal of timing differences (107) 13
Deferred tax asset not recognised in respect of tax losses carried forward and 107 13
excess capital allowances
Total deferred tax - -
Tax on loss on ordinary activities - -
Factors affecting tax charge of future years
Tax losses available to be carried forward by the Company at 31
October 2006 against future profits are estimated at #0.33m (2005: #0.63). Tax
losses brought forward and losses for the current year have been reduced by the
disclaimer of capital allowances.
5. Dividends
There were no dividends paid or payable in the year.
6. Loss per ordinary share
The calculation of basic loss per ordinary share is based on loss of
#3.52m (2005: #0.15m) divided by weighted average number of ordinary shares
72,500,000 (2005: 72,500,000) ordinary shares. The convertible redeemable
preference shares converted on 22 December 2006 have not been included within
the weighted average number of ordinary shares. Where there is a loss per share
there are no dilutive effects of share options.
7. Reconciliation of shareholders' funds and movement on reserves
Share Total
Share Premium Profit and Shareholders'
Capital Account Loss account Funds
#'000 #'000 #'000 #'000
At 1 November 2005 725 7,925 (6,069) 2,581
Increase in share capital 417 833 - 1,250
Classified as debt (17) (833) - (850)
Loss for the year - - (3,516) (3,516)
At 31 October 2006 1,125 7,925 (9,585) (535)
Reconciliation of movements in shareholder's funds
2006 2005
#'000 #'000
Loss for the year (3,516) (149)
Issue of share capital 1,250 -
Classified as debt (850) -
Shareholders' funds at 1 November 2,581 2,730
Shareholders' funds at 31 October (535) 2,581
The Convertible Redeemable Preference shares were converted into
Ordinary shares on 22 December 2005 and the #0.85m allocation as debt in
accordance with FRS 25 will reverse in the 2007 accounts.
8. Notes to the statement of cash flows
a. Reconciliation of operating loss to net cash inflow from
operating activities
2006 2005
#'000 #'000
Operating loss (3,401) (54)
Depreciation charge 989 527
Amortisation charge 2,313 49
Adjustment in cost of intangible assets - 183
Decrease/(increase) in stocks 24 (24)
Decrease/(increase) in debtors 15 (108)
Increase/(decrease) in creditors 1,013 (139)
953 434
b. Analysis of net debt
At Other At
31 October Non-cash 31 October
2005 Cash flow Movements 2006
#'000 #'000 #'000 #'000
Cash 6 (5) 18 19
Bank overdrafts (192) 60 (228) (360)
Bank loans (due within one year) (360) 270 (270) (360)
Bank loans (due after one year) (728) (750) 270 (1,208)
Finance leases (21) 18 - (3)
Other loans - 350 (2,500) (2,150)
Convertible preference shares - - (850) (850)
Net debt (1,295) (57) (3,560) (4,912)
c. Reconciliation of net cash flow to movement in net debt
2006 2005
#'000 #'000
Increase/(Decrease) in cash 55 (113)
Cash inflow from new loans (750) -
Repayment of long-term loans 620 360
Repayments of capital element of finance lease and
hire of purchase contracts 18 39
Convertible preference shares debt value (850)
Net debt acquired with subsidiary undertaking (2,710) -
Movement in net debt at 31 October 2006 (3,617) 286
9. Post Balance Sheet Event
On 22 December 2006 the Company completed the acquisition of the whole of the
issued share capital of IRC.
Set out below is an unaudited pro forma statement of net assets of
the Enlarged Group which has been prepared on the basis set out in the notes
below. It has been prepared for illustrative purposes only to show the effect
on the net assets of the Company of the Placings, the allotment and issue of the
shares to CGL Restaurants Limited and the acquisition of IRC and because of its
nature may not give a true reflection of the financial position of the Enlarged
Group. It has been prepared on the basis that the Placings and the Acquisition
were undertaken on 31 October 2006.
Net assets
Of the Net assets Pro forma net
Company at of IRC at Assets of the
31 Oct 30 June Enlarged
2006 2006 Adjustment Adjustment Adjustment Group
Note 1 Note 2 Note 3 Note 4 Note Note 6, 7
#'000 #'000 #'000 #'000 #'000 #'000
Fixed assets
Intangible assets 196 3,568 - 23,005 - 26,401
Tangible assets 6,151 12,588 - - - 18,739
Investments - - - - - -
________ ________ ________ ________ ________ ___________
6,347 16,156 - 23,005 - 45,140
________ ________ ________ ________ ________ ___________
Current assets
Stocks 167 266 - - - 433
Debtors 768 2,858 - - - 3,626
Cash at bank and in hand 19 18 29,510 (11,814) (16,510) 1,223
________ ________ ________ ________ ________ ___________
Total current assets 954 3,142 29,510 (11,814) (16,510) 5,282
Creditors: falling due (3,628) (4,790) - (8,500) 1,122 (15,796)
within one year
________ ________ ________ ________ ________ ___________
Net current liabilities (2,674) (1,648) 29,510 (20,314) (15,388) (10,514)
________ ________ ________ ________ ________ ___________
Total assets less current 3,673 14,508 29,510 2,692 (15,388) 34,626
liabilities
Creditors: amounts
falling due after more
than one year (4,208) (13,846) 150 (1,213) 14,758 (4,359)
Provisions for - (325) - - - (325)
liabilities
________ ________ ________ ________ ________ ___________
(535) 337 29,660 1,478 (630) 29,942
Capital reserves
Called up share capital 1,125 1 11,167 481 - 12,774
Share premium account 7,925 1,149 18,493 184 - 27,383
Profit and loss account (9,585) (813) - (813) (630) (10,215)
________ ________ ________ ________ ________ ___________
Equity shareholders' (535) 337 29,660 1,478 (630) 29,942
funds
Notes:
The pro forma statement of net assets has been prepared on the following basis:
1. The net assets of the Company as at 31 October 2006 have been extracted
without adjustment from the unaudited Balance Sheet of the Group set out
above.
2. The net assets of IRC as at 30 June 2006 have been extracted without
adjustment from the historical financial information on IRC as set out in
Section B of Part V of the circular issued in relation to the acquisition of
IRC
3. The gross proceeds of the Placings of approximately #32.0m less #2.49m for
the estimated total expenses of the Proposals and other related costs payable
by the Company, including the capitalisation of bank arrangements fees
associated with the new bank facilities to the Enlarged Group.
4. The Acquisition for #23m comprising:
- #1.4m in respect of the maximum number of Shares to be issued by the
Company to the Vendors of IRC.
- #13m payable to the Vendors of IRC.
- the Directors assessment of #8.5m for the amount likely to be paid to
the Vendors of IRC under the earnout arrangement, together with the
allotment and issue of the shares to CGL Restaurants Limited.
5. Refinancing of debt within the Enlarged Group, Bank fees include the
write-off of bank arrangement fees previously capitalised by IRC in respect of
its existing bank facilities which are required to be written off under FRS 4 in
conjunction with the Enlarged Group's arrangements of new banking facilities.
6. The pro forma statement of net assets does not constitute statutory accounts
within the meaning of section 240 of the Act.
7. No adjustment has been made to take account of trading, capital expenditure
or other movements subsequent to the balance sheet dates.
10. Copies of Report and Accounts
Copies of the Report and Accounts are being sent to the shareholders
and will be available to the public at the registered office of Individual
Restaurant Company plc, 4th Floor, Ridgefield House, 14 Dalton Street,
Manchester, M2 6JR.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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