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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Loungers Plc | LSE:LGRS | London | Ordinary Share | GB00BH4JR002 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 4.00 | 1.53% | 266.00 | 264.00 | 270.00 | 267.00 | 262.00 | 262.00 | 124,503 | 16:35:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Eating Places | 283.51M | 6.93M | 0.0668 | 39.97 | 276.96M |
From May 2019 to May 2024
TIDMLGRS
RNS Number : 3205K
Loungers PLC
28 August 2019
28 August 2019
Loungers plc
("Loungers")
Another strong trading performance in a transformational year
Results for the 52 week period ended 21 April 2019
Loungers is pleased to announce the audited results for the Loungers Group of companies ("the Group") for the 52 weeks ended 21 April 2019 ("FY19") (1) . Loungers is an operator of 154 café/bar/restaurants across England and Wales under two distinct but complementary brands, Lounge and Cosy Club. The Group's sites offer something for everyone regardless of age, demographic or gender and the Group operates successfully in a diverse range of different sites and locations across England and Wales.
Financial Highlights (1)
- Revenue up 26.4% to GBP153.0m (2018: GBP121.1m) - Like for like sales growth of 6.9% (2018: 6.0%) - Adjusted EBITDA (2) up 23.7% to GBP20.6m (2018: GBP16.6m) - Adjusted EBITDA margin broadly maintained at 13.5% (2018: 13.7%) - Adjusted operating profit (3) up 23.3% to GBP12.4m (2018: GBP10.1m) - Cash generated from operations up 13.5% to GBP22.4m (2018: GBP19.8m)
Operational Highlights
- 25 new sites opened in the year (2018: 22 new sites), taking the total to 146 sites at FY19 year end
- Continued investment in and evolution of both brands in respect of menu, design and people
- Commenced "re-set investment programme" to improve kitchen efficiency and the working environment of our back of house teams
- Continued development of the Group's head office infrastructure to support our future growth
- Admission to trading on AIM of Loungers' ordinary shares post year end (the "IPO"), raising GBP83.3m
Outlook
- The new financial year has started well and we are trading in line with our expectations as we continue to outperform the wider hospitality market. We look forward to updating the market further when we next report on trading at our AGM in October
- Eight new sites have opened in the current financial year and the Group remains on track to deliver its target of 25 new openings in the full year
Nick Collins, Chief Executive Officer of Loungers said:
"These results represent a strong performance for the financial year ending 21 April 2019 and are in line with both our, and the market's, expectations. Our revenue and profit growth not only reflect the continued success of the roll-out, but also our unwavering focus on our customers, the evolution of our proposition and how we support and invest in our teams.
"Our admission to AIM post the FY19 year-end has meant almost 600 employees have had the opportunity to become shareholders in Loungers plc and it is fantastic that their hard work and commitment can be rewarded in this way.
"Our new financial year has started well and our roll-out strategy for both brands is on schedule. I remain confident about the outlook and future growth prospects for the Group."
(1) As at 21 April 2019, the Group consisted of Lion / Jenga Topco Limited ("Topco") and its direct subsidiaries, which included Loungers UK Limited, the Group's operating company. Loungers plc was newly established to effect the IPO. As a result of the IPO completing shortly after the Group's 21 April 2019 financial year end the Directors are required to present the consolidated financial statements of Topco to the shareholders of Loungers plc. The historical financial information for FY18 contained in Loungers' admission document also presents the consolidated financial statements of Topco. Had the IPO completed prior to the FY19 year-end then the Directors would have presented the consolidated financial statements of Loungers plc as if Loungers plc had owned the Group throughout FY19. The consolidated financial statements of Topco reflect the operating financial performance of the Group. Accordingly, the reported adjusted EBITDA for FY19 of GBP20.6m is consistent with the adjusted EBITDA that Loungers plc would have reported had the IPO completed prior to the FY19 year end. Further information is included in note 1 below.
(2) Adjusted EBITDA is calculated as operating profit before depreciation, pre-opening costs, exceptional costs and share-based payment charges.
(3) Adjusted operating profit is calculated as operating profit before pre-opening costs, exceptional costs and share-based payment charges.
For further information please contact:
Loungers plc Via Instinctif Partners Nick Collins, Chief Executive Officer Gregor Grant, Chief Financial Officer GCA Altium Limited (Financial Adviser and Tel: +44 (0) 20 NOMAD) 7484 4040 Sam Fuller / Katherine Hobbs / Tim Richardson Liberum Capital Limited (Joint Broker) Tel: +44 (0) 20 Clayton Bush / Andrew Godber / John Fishley 3100 2000 Peel Hunt LLP (Joint Broker) Tel: +44 (0)20 7418 Dan Webster / George Sellar 8900 Instinctif Partners (Financial Public Relations) Tel: +44 (0) 207 Justine Warren / Matthew Smallwood 457 2020
Notes to Editors
Loungers operates through its two complementary brands - Lounge and Cosy Club - in the UK hospitality sector. A Lounge is a neighbourhood café/bar combining elements of coffee shop culture, the British pub and dining. As at the FY19 year end, there were 122 Lounges nationwide. Lounges are principally located in secondary suburban high streets and small town centres. The sites are characterised by informal, unique interiors with an emphasis on a warm, comfortable atmosphere, often described as a "home from home". Cosy Clubs are more formal bars/restaurants offering reservations and table service but share many similarities with the Lounges in terms of their broad, all-day offering and their focus on hospitality and culture. Cosy Clubs are typically located in city centres and large market towns. Interiors tend to be larger and more theatrical than for a Lounge, and heritage buildings or first-floor spaces are often employed to create a sense of occasion. As at the FY19 year end, there were 24 Cosy Clubs nationwide.
Chief Executive's Statement
Introduction
The 52 weeks ended 21 April 2019 were another year of significant development for the Group, with highlights including:
- Revenue growth of 26.4% to GBP153.0m (2018: GBP121.1m) - Like for like sales growth of 6.9% (2018: 6.0%) - Adjusted EBITDA growth of 23.7% to GBP20.6m (2018: GBP16.6m)
- 25 site openings to take the Group to 146 sites at year end, comprising 122 Lounges and 24 Cosy Clubs (2018: 121 sites comprising 100 Lounges and 21 Cosy Clubs).
- Continued investment in and development of the Group's infrastructure to provide the platform for future growth.
The continuing and successful implementation of the Group's strategy, as exemplified by the FY19 highlights above, provided the platform for the Group's successful IPO just after the year end. The IPO is testament to the quality of the Loungers' business, its level of differentiation, the loyalty of our customer base, and the dedication of all our team members.
Brand development
Critical to delivering the sustained like for like sales growth in the mature estate has been our focus on evolving and developing the Lounge and Cosy Club brands and their customer proposition. Neither brand is wedded to a particular cuisine and this year has seen continued evolution and innovation in our broad all-day menus. The business has had a strong reputation for vegetarian, vegan and gluten free dining since inception and we continue to build on these foundations to respond to changing consumer dynamics. The roll-out of the "Beyond Meat" plant-based vegan burger during the year, initially trialled as a special but now a core menu item, is an example of our continual evolution.
A current focus is on our drinks ranges and we see significant opportunity to refresh and enhance our drinks offer in the coming months. Coffee has been another area of focus, with emphasis on training, equipment and consistency as we seek to stay ahead of other national brands.
We commenced our kitchen re-set programme during the year and to date have completed our work at 47 sites. The objective of the re-set is to improve the efficiency of our kitchens and the working environment of our back of house teams. The relatively modest capital investment at each site addresses kitchen lay-out and additional equipment, as well as the deployment of kitchen display screens which provide invaluable data in terms of ticket times, efficiency and guest experience.
Our focus on the look and feel of our sites has been maintained, in particular on ensuring each site is unique. Particular attention has been placed on our furniture styles, to allow us to maximise food covers whilst not impacting wet-led bar trade in the evenings, and on our external areas. During the year we undertook eight "splash and dash" refurbishments at a total cost of GBP0.9m (2018: eight at a cost of GBP0.8m).
Roll-Out
Core to our growth strategy is the roll-out of the Group's two brands. During FY19 we opened a further 25 sites, 22 Lounges and three Cosy Clubs (2018: 22 sites). In addition, we relocated one of our early Lounges - Ocho Lounge in Penarth, Wales - to a new site, making a total of 26 completed new sites in the year. The total investment in new site openings during the year, net of landlord contributions, was GBP18.5m (2018: GBP14.8m).
Our new site openings have covered a broad geography across England and Wales, albeit with a slight emphasis on the North East Midlands, in line with our expansion strategy. The performance of our new sites has been in line with expectations.
The Group's highly refined rollout model includes a dedicated property function which supports the senior management with site selection, evaluation and contract negotiation. The Group has four dedicated in-house build-teams which manage the entire fit out process for each new site. The familiarity, efficiency, cost-effectiveness and reliability of these in-house teams have been an important factor in the successful acceleration of the rollout in recent years, and the ongoing ability of the Group to manage circa 25 openings per year.
Property and pipeline
As we noted at the time of the IPO the roll-out strategy is dependent upon our ability to identify and secure suitable sites. Whilst the well-documented travails of the high street are undoubtedly throwing up opportunities, it is equally true that many of the regional high streets we have identified remain very well supported and consequently sites that become available are relatively highly valued. A pillar of the Group's success to date has been a refusal to overpay for new sites, reflected in our rent to revenue ratio of 5.2% (2018: 5.2%). This rental discipline remains a core focus.
As at 28 August 2019 the Group has opened eight new sites since the year end, comprising six Lounges and two Cosy Clubs, and is on-site on a further four sites. The Group expects to open 10 new sites in its first half (24 weeks ending 6 October 2019) and is on track to deliver 25 new site openings in the full year. The pipeline remains strong.
People
The success of the Group is in large part due to the commitment of our people. We believe a key differentiator of Loungers is our desire and ability to deliver genuine hospitality to the communities in which we operate. I would like to thank our teams for the great hospitality they provide. As the business has grown, maintaining the unique, independent culture inherent in the business has consistently been one of our top priorities and this will always be the case.
A key benefit of our IPO has been the opportunity it provides to broaden share ownership throughout the Group. On IPO, we were delighted to issue shares with a value of GBP1,000 to almost 600 team members. It is very much the Board's desire that this broader share ownership is built upon in the coming years.
We have recently held our seventh Loungefest, our one-day festival which was attended and very much enjoyed by some 2,300 members of the Loungers family. It is a truly amazing sight to see our teams, resplendent in their fancy dress, come together from all over the country, and to have the opportunity to thank them for their hard work and commitment over the year.
Systems and Infrastructure
We have continued to develop and enhance our infrastructure to ensure we are capable both of delivering our roll-out and extracting the benefits that come with increased scale. The past year has seen particular investment in our people, IT and property teams through senior hires. We have implemented new property maintenance software and we continue to work closely with our EPOS providers to enhance our systems and the way in which our teams use them. In addition, we commenced the implementation of new labour scheduling and HR software to deliver a seamless system from recruitment through to payroll, a project that was successfully completed post year end.
Current Trading and Outlook
The new financial year has started well and we are trading in line with our expectations as we continue to outperform the wider hospitality market. We look forward to updating the market further when we next report on trading at our AGM in October.
Eight new sites have opened in the current financial year and the Group remains on track to deliver its target of 25 new openings in the full year.
Financial Review
Financial position and performance
The financial results for FY19 reflect another year of significant revenue and adjusted EBITDA growth for the Group, with growth of 26.4% and 23.7% respectively.
Revenue growth from new site openings was underpinned by strong like for like sales growth of 6.9% in our mature sites (2018: 6.0%). Mature sites are defined as sites that have been trading for 18 months.
A key measure of Group performance is adjusted EBITDA. Adjusted EBITDA is calculated as follows:
Hot Features
Premium
Period ended Period ended
21 April 22 April
2019 2018
GBP'000 GBP'000
Operating profit 9,797 6,996
Exceptional items 462 542
Share-based payments (87) 533
Site pre-opening costs 2,251 2,001
Depreciation 8,147 6,567
Loss on disposal of 12 -
fixed assets
Adjusted EBITDA 20,582 16,639
Adjusted EBITDA margin
% 13.5% 13.7%
Against the well-documented cost base challenges of the sector in which the Group operates (not least the National Living Wage increase of 4.4% in April 2018) the Group has worked hard to drive cost efficiency without negatively impacting the quality of our product, our value for money credentials, or the guest experience. These efforts have enabled the Group to broadly maintain its adjusted EBITDA margin for the year at 13.5% (2018: 13.7%).
Exceptional items of GBP0.5m (2018: GBP0.5m) wholly relate to costs incurred in the planning and preparation for the IPO. Additional exceptional IPO costs were incurred by Loungers plc in FY20. The share-based payment credit / charge relates to a cash settled incentive scheme, the liability at year end was based upon the post year pay-out. Site pre-opening costs are essentially property and payroll costs incurred prior to a new site opening.
Our statutory operating profit margin improved to 6.4% in FY19 (2018: 5.8%). This improvement was largely a result of the share-based payment charge in FY18 reversing to a small credit in FY19. Excluding the impact of this, the operating profit margin improved to 6.3% (2018:6.2%).
The tax charge for the year of GBP0.8m (2018: GBP0.6m) resulted from the dis-allowance of the preference share dividend charge included in financing costs in the tax computation.
Finance costs and net debt
The reported finance costs of GBP14.8m (2018: GBP13.6m) reflect the pre-IPO capital structure of the Group under private equity ownership. This finance charge comprised:
Period ended
21 April
2019
GBP'000
Bank interest 4.3
Loan stock interest 2.1
Preference share
dividends 8.4
Total 14.8
As part of the IPO process, a share for share exchange saw the preference shares and accrued dividends in Topco exchanged for ordinary shares in Loungers plc. Net proceeds of GBP56.4m raised from the IPO and a new term loan facility of GBP32.5m were utilised to repay outstanding loan stock (GBP17.9m) and bank debt (GBP71.0m).
Accordingly, a pro-forma balance sheet of Loungers plc as at 21 April 2019, prepared on the basis that Admission to trading on AIM occurred on 21 April and not 29 April 2019, would have net debt of GBP26.7m (see notes 8 and 9).
The facilities entered into at the time of the IPO provide for a term loan of GBP32.5m and a revolving credit facility of GBP10.0m. The term loan is a five-year non-amortising facility with a margin of 2% above LIBOR. A three-year interest rate swap has been entered into that fixes LIBOR on this facility at 0.7%.
Cash flow
Cash generated from operations increased 13.5% to GBP22.4m (2018: GBP19.8m) and represented 109% of adjusted EBITDA (2018: 119%). The reduction in the cash conversion from FY18 largely arose from the timing of the payment of the monthly payroll taxes at the year end.
The Group's cash conversion continues to benefit from the negative working capital generated by the roll-out programme and strong underlying revenue growth. During FY19 cash generated from operations covered 99% of our capital expenditure (2018: 106%).
During FY19 a net drawdown of GBP4.0m was made under the Group's facilities (2018: GBP4.7m) and net bank interest of GBP4.1m was paid (2018: GBP4.8m).
Dividend Policy
As disclosed at the time of the IPO, in the short term, the Board intends to retain the Group's earnings for re-investment in the roll-out of new Lounge and Cosy Club sites. It is the Board's ultimate intention to pursue a progressive dividend policy, subject to the need to retain sufficient earnings for the future growth of the Group.
IFRS16
IFRS16 "Leases" establishes principles for the recognition, measurement, presentation and disclosure of leases. IFRS16 is effective for accounting periods starting on or after 1 January 2019. The Group will adopt this standard in the year ending 19 April 2020, implementing the fully retrospective method. The impact on the statement of financial position at 21 April 2019 and on the consolidated statement of comprehensive income in the 52 week period to 21 April 2019 is disclosed in note 10.
Key Performance Indicators ("KPI's")
The KPI's, both financial and non-financial, that the Board reviews on a regular basis in order to measure the progress of the Group are as follows:
FY19 FY18
New site openings (net) 25 22
Capital expenditure GBP23.2m GBP18.6m
Like for like sales
growth 6.9% 6.0%
Total revenue growth 26.4% 31.9%
Adjusted EBITDA margin 13.5% 13.7%
Going concern
In adopting the going concern basis for preparing the financial statements the Board has considered the business activities along with the principal risks and uncertainties of the Group. Based on its current financial projections to 1 November 2020 and having considered the facilities available, the Board is confident that the Group has adequate resources to continue in operational existence for the foreseeable future. For this reason, the Board considers it appropriate for the Group to adopt the going concern basis in preparing its financial statements.
Consolidated Statement of Comprehensive Income
For the 52 Week Period Ended 21 April 2019
Period Period ended
ended
Note 21 April 22 April
2019 2018
GBP000 GBP000
Revenue 152,999 121,067
Cost of sales (89,485) (70,479)
--------- -------------
Gross profit 63,514 50,588
Administrative expenses (53,717) (43,592)
--------- -------------
Operating profit 3 9,797 6,996
Finance costs 4 (14,786) (13,644)
--------- -------------
Loss before taxation (4,989) (6,648)
Tax on loss 6 (750) (601)
Loss for the period (5,739) (7,249)
========= =============
Other comprehensive (expense) / income:
Cash flow hedge - change in value
of hedging instrument (333) 323
Other comprehensive (expense) / income
for the period (333) 323
Total comprehensive expense for the
period (6,072) (6,926)
========= =============
Non GAAP alternative performance
measure
Period ended Period ended
Note 21 April 22 April
2019 2018
GBP000 GBP000
Operating profit 9,797 6,996
Exceptional items 5 462 542
Share based payment (credit) / charge (87) 533
Site pre-opening costs 2,251 2,001
------------- -------------
Adjusted operating profit 12,423 10,072
Depreciation 8,147 6,567
Loss on disposal of fixed assets 12 -
------------- -------------
Adjusted EBITDA 20,582 16,639
============= =============
Consolidated Statement of Financial Position
As at 21 April 2019
Note At 21 At 22
April April
2019 2018
GBP000 GBP000
Assets
Non-current
Intangible assets 113,227 113,227
Property, plant and equipment 7 74,073 59,006
---------- ----------
Total non-current assets 187,300 172,233
Current
Inventories 1,500 1,065
Trade and other receivables 6,289 5,182
Derivative financial instruments - 323
Cash and cash equivalents 9 6,500 7,669
---------- ----------
Total current assets 14,289 14,239
Total assets 201,589 186,472
========== ==========
Liabilities
Current liabilities
Trade and other payables (33,095) (27,723)
Derivative financial instruments (10) -
---------- ----------
Total current liabilities (33,105) (27,723)
Non-current liabilities
Borrowings 9 (172,112) (157,368)
Accruals and deferred income (9,312) (8,183)
Deferred tax liabilities (2,348) (2,465)
Provisions (118) (130)
Total liabilities (216,995) (195,869)
========== ==========
Net liabilities (15,406) (9,397)
========== ==========
Called up share capital 53 53
Share premium 4,184 4,172
Hedge reserve (10) 323
Capital contribution reserve 51 -
Accumulated losses (19,684) (13,945)
---------- ----------
Total equity (15,406) (9,397)
========== ==========
Consolidated Statement of Changes in Equity
For the 52 Week Period Ended 21 April 2019
Capital
Share Share Hedge Contribution Accumulated Total
Capital Premium Reserve Reserve Losses Equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 23 April 2017 52 4,151 - - (6,696) (2,493)
Shares issued during the
52 week period 1 21 - - - 22
Total transactions with
owners 1 21 - - - 22
Loss for the period - - - - (7,249) (7,249)
Other comprehensive income - - 323 - - 323
Total comprehensive expense
for the 52 week period - - 323 - (7,249) (6,926)
At 22 April 2018 53 4,172 323 - (13,945) (9,397)
========= ========= ========= ============== ============ =========
Share transactions during
the period - 12 - 51 - 63
Total transactions with
owners - 12 - 51 - 63
Loss for the period - - - - (5,739) (5,739)
Other comprehensive expense - - (333) - - (333)
Total comprehensive expense
for the 52 week period - - (333) - (5,739) (6,072)
At 21 April 2019 53 4,184 (10) 51 (19,684) (15,406)
========= ========= ========= ============== ============ =========
Consolidated Statement of Cash Flows
For the 52 Week Period Ended 21 April 2019
Period ended Period ended
Note 21 April 22 April
2019 2018
GBP000 GBP000
Cash flows from operating activities
Loss after tax (5,739) (7,249)
Adjustments for:
Depreciation of property, plant and equipment 8,147 6,567
Share based payment transactions (87) 533
Loss on disposal of tangible assets 12 -
Changes in inventories (435) (133)
Interest payable 14,786 13,644
Taxation expense 750 601
Changes in provisions (12) (86)
Changes in trade and other receivables (1,074) (876)
Changes in trade and other payables 6,089 6,771
------------- -------------
Cash generated from operations 22,437 19,772
Tax paid (1,018) (571)
------------- -------------
Net cash generated from operating
activities 21,419 19,201
============= =============
Cash flows from investing activities
Purchase of property, plant and equipment (22,585) (18,595)
Net cash used in investing activities (22,585) (18,595)
============= =============
Cash flows from financing activities
Issue of ordinary shares 12 -
Capital contribution 51 -
Bank loans advanced 6,000 65,000
Bank loans repaid (2,000) (21,050)
Repayment of other loans - (39,272)
Interest paid (4,066) (4,786)
Net cash used in financing activities (3) (108)
============= =============
Net (decrease) / increase in cash
and cash equivalents (1,169) 498
Cash and cash equivalents at beginning
of the period 7,669 7,171
Cash and cash equivalents at end of
the period 6,500 7,669
============= =============
NOTES TO THE PRELIMINARY FINANCIAL INFORMATION
1. Lion / Jenga Topco Limited
As at 21 April 2019, the Loungers Group (the "Group") consisted of Lion / Jenga Topco Limited ("Topco") and its direct subsidiaries Lion / Jenga Midco Limited ("Midco"), Lion / Jenga Bidco Limited ("Bidco"), Loungers Holdings Limited and Loungers UK Limited, the main operating subsidiary of the Group. Topco, Midco and Bidco were incorporated in December 2016 to facilitate the acquisition of a majority stake in Loungers Holdings Limited by funds managed by Lion Capital LLP. Topco is the parent company for the Group as at 21 April 2019.
Loungers plc was newly incorporated to effect the IPO of the Group (the "IPO"). With effect from the admission to trading on AIM of its ordinary shares on 29 April 2019 Loungers plc became the parent company of the Group.
As a result of the IPO completing shortly after the Group's 21 April 2019 financial year end ("FY19") the Directors are required to present the consolidated financial statements of Topco to the shareholders of Loungers plc. Had the IPO completed prior to the FY19 year end then the Directors would have presented the consolidated financial statements of Loungers plc as if Loungers plc had owned the Group throughout FY19.
The consolidated financial statements of Topco reflect the operating financial performance of the Group. Accordingly, the reported adjusted EBITDA for FY19 of GBP20.6m is consistent with the adjusted EBITDA that Loungers plc would have reported had the IPO completed prior to the FY19 year end.
However, the consolidated statement of financial position as at 21 April 2019 reflects a typical private equity capital structure and differs significantly in terms of capital structure and financing costs to that in existence post the IPO. Reported borrowings at the year-end of GBP172.1m are a combination of third-party bank debt, shareholder loan notes and preference shares. The Group's IPO process included a capital re-organisation which saw Topco's preference shares exchanged for ordinary shares in Loungers plc, the shareholder loan notes repaid and the third-party bank debt repaid and replaced with a new GBP32.5m term facility and GBP10m revolving credit facility (undrawn at IPO).
A pro-forma consolidated statement of financial position for Loungers plc as at 21 April 2019, prepared on the basis that Admission to trading on AIM occurred on that day, is included in note 8.
Loungers plc will report half year financial results for the 24 weeks to 6 October 2019 in its own name.
2. Basis of preparation
The condensed consolidated financial information for the 52 week period ended 21 April 2019 has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRSs), as adopted by the European Union.
For all periods up to and including the period ended 22 April 2018, the Group prepared its financial statements in accordance with United Kingdom Generally Accepted Accounting Principles (UK GAAP) at the level of Midco. The financial statements of Topco for the period ended 21 April 2019 are the first the Group has prepared in accordance with IFRS.
The financial information contained within this preliminary announcement for the periods ended 21 April 2019 and 22 April 2018 does not comprise the statutory financial statements of Topco or Midco.
Topco is registered in Jersey and accordingly statutory accounts have not been delivered to the Registrar of Companies. However statutory accounts for the period ended 22 April 2018 for Midco have been filed with the Registrar of Companies.
The auditors' reports on the accounts for the 52 weeks ended 21 April 2019 of Topco, and for the 52 weeks ended 22 April 2018 of Midco were unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006 (or Jersey Law equivalent).
3. Operating Profit
Operating profit is after charging / (crediting):
Period ended Period ended
21 April 22 April
2019 2018
GBP000 GBP000
Staff Costs (excluding share based payments) 57,377 47,033
Share based payments (87) 533
Depreciation of tangible fixed assets 8,147 6,567
Operating lease rentals:
Land and buildings 8,262 6,782
Inventories- amounts charged as an expense 38,968 30,987
4. Finance Costs
Period ended Period ended
21 April 22 April
2019 2018
GBP000 GBP000
Bank interest payable 4,327 4,096
Other loan interest payable 2,058 1,969
Preference share interest 8,401 7,579
------------- -------------
14,786 13,644
============= =============
5. Exceptional Items
Period ended Period ended
21 April 22 April
2019 2018
GBP000 GBP000
Change of ownership 462 203
Closed sites - 107
Other - 232
462 542
============= =============
The change of ownership costs in the 52 weeks ended 21 April 2019 relate to costs incurred in the preparation for the IPO of Loungers plc which completed on 29 April 2019. Additional IPO costs were incurred by Loungers plc. The costs incurred in the 52 weeks ended 22 April 2018 largely represent professional fees incurred in respect of the sale of the majority stake in the business to Lion Capital in December 2016.
The cost relating to closed sites represents one-off costs associated with closed sites in the 52 week period ending 22 April 2018.
The costs relating to the other category largely represent costs associated with the one-off strategic review of the supply chain and employee compensation costs.
6. Tax on loss
The income tax charge is applicable on the Group's operations in the UK. The Group is subject to tax at a rate of 0% in Jersey.
Period ended Period ended
21 April 22 April
2019 2018
GBP000 GBP000
Taxation charged to the income statement
Current income taxation 918 755
Amounts (under)/over provisioned in earlier
years (51) (15)
------------- -------------
Total current income taxation 867 740
============= =============
Deferred Taxation
Origination and reversal of temporary timing
differences
Current period (130) (119)
Prior period 8 (20)
Adjustment in respect of change of rate 5 -
of corporation tax
------------- -------------
Total deferred tax (117) (139)
============= =============
Total taxation expense in the consolidated
income statement 750 601
============= =============
The above is disclosed as:
Income tax expense - current period 801 636
Income tax expense - prior period (51) (35)
------------- -------------
750 601
============= =============
Factors affecting the tax charge for the
period
Period ended Period ended
21 April 22 April
2019 2018
GBP000 GBP000
Loss before tax (4,989) (6,648)
At UK standard rate of corporation taxation
of 19% (2018: 19%). (948) (1,263)
Expenses not deductible for tax purposes
- Preference share interest 1,596 1,440
- Other 369 488
Fixed asset differences (229) (29)
Adjustments to tax charge in respect of
prior periods (43) (35)
Adjustment in respect of change of rate 5 -
of corporation tax
------------- -------------
Total tax charge for the period 750 601
============= =============
7. Fixed assets
Leasehold Motor Vehicles Fixtures Total
Building and Fittings
Improvements
GBP000 GBP000 GBP000 GBP000
Cost
At 24 April 2017 30,266 33 18,790 49,089
Additions 9,147 71 9,377 18,595
At 22 April 2018 39,413 104 28,167 67,684
Depreciation
At 24 April 2017 841 4 1,266 2,111
Provided for the period 2,507 25 4,035 6,567
At 22 April 2018 3,348 29 5,301 8,678
Net book value
-------------- --------------- -------------- -------
At 22 April 2018 36,065 75 22,866 59,006
============== =============== ============== =======
Cost
At 23 April 2018 39,413 104 28,167 67,684
Additions 11,083 37 12,106 23,226
Disposals (287) (58) (312) (657)
At 21 April 2019 50,209 83 39,961 90,253
Depreciation
At 23 April 2018 3,348 29 5,301 8,678
Provided for the period 2,967 27 5,153 8,147
Disposals (286) (56) (303) (645)
At 21 April 2019 6,029 - 10,151 16,180
Net book value
-------------- --------------- -------------- -------
At 21 April 2019 44,180 83 29,810 74,073
============== =============== ============== =======
8. Pro-Forma Consolidated Statement of Financial Position of Loungers plc
As detailed in note 1 the IPO of Loungers plc completed shortly after the year end of the Group. Accordingly, the Directors are required to present the consolidated financial statements of Topco.
In order to enable users of this announcement to better understand the capital structure of Loungers plc the Directors have prepared a pro forma consolidated statement of financial position to reflect the position as at 21 April 2019 as if Admission to trading on AIM had occurred on that date. A reconciliation of net debt as at 21 April 2019 between Topco and the pro-forma Consolidated Statement of Financial Position of Loungers plc is included in note 9.
At the time of the IPO Loungers plc entered into a GBP32.5m term loan facility and a GBP10.0m revolving credit facility. Borrowings of GBP31.9m reflect the GBP32.5m term loan facility net of loan arrangement fees of GBP0.6m. The term loan is a five-year non-amortising facility with a margin of 2% over LIBOR. A three-year interest rate swap was entered into in July 2019 in order to fix LIBOR at 0.7%.
8. Pro-Forma Consolidated Statement of Financial Position of Loungers plc (continued)
Note At 21 April
2019
GBP000
Assets
Non-current
Intangible Assets 113,227
Property, plant and equipment 74,073
------------
Total non-current assets 187,300
Current
Inventories 1,500
Trade and Other receivables 6,292
Cash and Cash equivalents 9 5,833
------------
Total current assets 13,625
Total assets 200,925
============
Liabilities
Current liabilities
Trade and other payables (33,095)
Derivative financial instruments (10)
------------
Total current liabilities (33,105)
Non-current liabilities
Borrowings 9 (31,912)
Accruals and deferred income (9,312)
Deferred tax liabilities (2,348)
Provisions (118)
Total liabilities (76,795)
============
Net assets 124,130
============
9. Reconciliation of movement in net debt
Repay PLC
Topco Share Primary New term Repay loan Pro-forma
At 21 for share raise loan old bank stock At 21
April pre-IPO net of facility facility April
2019 costs 2019
GBP000 GBP000 GBP'000 GBP'000 GBP'000 GBP000 GBP000
Net debt
Cash in hand 6,500 - 56,353 31,912 (71,000) (17,932) 5,833
---------- ------------ ---------- ----------- ----------- --------- -----------
Bank Loans (71,000) - - (32,500) 71,000 - (32,500)
Arrangement fees 1,447 - - 588 (1,447) - 588
Unsecured loan
stock (17,932) - - - - 17,932 -
Preference shares (84,627) 84,627 - - - - -
---------- ------------ ---------- ----------- ----------- --------- -----------
Borrowings (172,112) 84,627 - (31,912) 69,553 17,932 (31,912)
---------- ------------ ---------- ----------- ----------- --------- -----------
Net debt (165,612) 84,627 56,353 - (1,447) - (26,079)
10. New standards, amendments and interpretations not yet adopted
IFRS 16 'Leases' establishes principles for the recognition, measurement, presentation and disclosure of leases and replaces IAS17. IFRS 16 will become effective for accounting periods starting on or after 1 January 2019, and the Group do not intend to early adopt. It will therefore become applicable to the Group for the 52 week period ending 19 April 2020. Management intend to apply the fully retrospective method of adoption. Management have performed a review to quantify the impact that this standard will have on the Group, which will result in the recognition of a lease liability and a corresponding asset on the Group's balance sheet for a majority of leases, which predominantly represent buildings, currently being treated as operating leases.
In applying IFRS 16 for the first time, the Group has used the following practical expedients permitted by the standard:
- the use of a single discount rate to a portfolio of leases with reasonably similar characteristics
- relying on previous assessment of whether a lease is onerous
- the exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application, and
- the use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
The estimated balance sheet impact is as follows:
21 April 22 April
2019 2018
GBP000 GBP000
Right of use asset 79,640 65,574
Lease liability (89,138) (73,164)
Fixed assets (4,452) (3,324)
Finance lease receivable 906 974
Deferred tax asset 754 464
Accruals and deferred
income 10,085 8,321
Prepayments (1,481) (1,110)
(3,686) (2,265)
========= =========
10. New standards, amendments and interpretations not yet adopted (continued)
The estimated impact on the income statement is as follows:
21 April 22 April
2019 2018
GBP000 GBP000
Reversal of rent charge 8,365 6,606
Depreciation on right
of use asset (5,459) (4,369)
--------- ---------
EBITDA 2,906 2,237
Interest expense (4,617) (3,760)
Profit before taxation (1,711) (1,523)
========= =========
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
FR CKODDABKDPFB
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August 28, 2019 02:00 ET (06:00 GMT)
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