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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Tasty Plc | LSE:TAST | London | Ordinary Share | GB00B17MN067 | ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.20 | 1.00 | 1.40 | 1.20 | 1.20 | 1.20 | 135 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Eating Places | 44.03M | -6.43M | -0.0440 | -0.27 | 1.76M |
From Apr 2021 to Apr 2024
TIDMTAST
RNS Number : 6745F
Tasty PLC
23 March 2022
23 March 2022
Tasty plc
("Tasty" or the "Company")
Final results for the 52 weeks ended 26 December 2021
Tasty (AIM: TAST), the owner and operator of restaurants in the casual dining sector, announces its annual results for the 52 week period ended 26 December 2021.
Key Highlights
-- Revenue GBP34.9m (2020: GBP24.2m); an increase of 44% year-on-year with 33 weeks dine-in trading, driven by strong sales post re-opening despite weaker trading for the peak December period than anticipated, due to the onset of the Omicron variant
-- Adjusted EBITDA(1) (post IFRS 16) of GBP8.0m (2020: GBP2.7m) -- Adjusted EBITDA(1) (pre IFRS 16) of GBP3.9m (2020: loss GBP1.5m) -- Profit after tax for the period of GBP1.2m (2020: loss of GBP12.7m) -- Bank loan as at 26 December 2021 of GBP1.3m (27 December 2020: GBPnil)
-- Cash at the year-end was GBP11.0m. After allowing for deferred HMRC payments, creditors and bank loan the Group's net cash position was approximately GBP6.8m
-- Currently trading from 50 of 54 restaurants
([1]) Adjusted for depreciation, amortisation and highlighted items including share-based payments and impairments. Adjusted EBITDA figure includes GBP1.9m of exceptional Government grant income
The report and accounts for the 52 week period ended 26 December 2021 will be available on the Company's website at https://dimt.co.uk/investor-relations/ shortly.
For further information, please contact:
Tasty plc Tel: 020 7637 1166 Jonny Plant, Chief Executive Cenkos Securities plc (Nominated adviser and broker) Mark Connelly / Katy Birkin Tel: 020 7397 8900
Chairman's statement
I am pleased to be reporting on the Group's annual results for the 52 week period ended 26 December 2021 and the comparative 52 week period ended 27 December 2020. The Group currently comprises 54 restaurants: five dim t and 49 Wildwood restaurants.
We are currently trading from 50 of those restaurants out of a total estate of 54. The four restaurants that remain closed due to predicted poor trading conditions in their locality or labour shortages but are at different stages of re-opening planning. However, the Group will continue to consider selling two or three of those restaurants or re-gearing their leases to reflect current market conditions.
During the two years of the Covid-19 pandemic we have had to deal with and adapt to unexpected challenges. It has been a test of endurance, strength and resilience and our success has been testament to our dedicated teams and management, and our customers. The Board would like to thank our much valued loyal staff, suppliers, customers, landlords and other trade creditors who have assisted and supported us throughout this unprecedented period.
The support we have received from creditors, landlords, and the Government has seen us through the difficulties we have faced. In addition, the bank facility of GBP1.25m drawn in January 2021 and not yet utilised, has provided additional headroom and confidence to our creditors of sufficient liquidity. At year-end, our cash balance reflects our cash preservation strategy and a deferral of payments due to creditors and HMRC. When these outstanding payments and bank debt are deducted, our net cash at year-end was approximately GBP6.8m.
Trading was highly encouraging when dine-in was permitted from May 2021, but impacted in December 2021 as the Omicron variant took hold and spread amongst the UK population. Subsequent Government advice meant that Christmas trade, traditionally our most profitable period, and specifically December 2021, was much weaker than we had anticipated.
In response to the experience of the last two years we have strengthened our operating model. We have increased our delivery offering and avenues of delivery. Having survived the pandemic and, now that the restrictions have been lifted, we are cautiously optimistic that we will be able to expand the estate and are rebuilding our operational and head-office structure to support this anticipated growth and property pipeline. During 2022 we expect to facilitate a measured expansion plan for a pipeline of five to six new units, however, any expansion will be at a steady pace as 2022 will not be without its challenges with labour shortages, food inflation, the ending of Government support in terms of reduced VAT and business rates and utility price volatility, impacting profitability.
Dividend
The Board does not propose to recommend a dividend (2020: GBPnil).
Future Trading
Trading prior to Christmas was strong and the start of 2021 is encouraging, but this must be tempered by the challenges which the Group expects following the end of Government support including VAT and business rates, the risk of a reduction in pent-up demand, disposable income and staycations as well as a steep rise in inflation in relation to wages, utilities and input supplier costs as the UK adjusts to Brexit, the aftermath of the pandemic and the current war in Ukraine. Accordingly, the Board views the future with cautious optimism.
Keith Lassman
Chairman
22 March 2022
Strategic report for the 52 weeks ended 26 December 2021
Tasty operates two concepts in the casual dining market: Wildwood and dim t.
Wildwood
Aimed at a broad market, our 'Pizza, Pasta, Grill' restaurant remains the Group's main focus. Our sites are primarily based on the high street. However, our estate comprises a number of leisure, retail and tourist locations that have historically traded well, highlighting the broad appeal of the offering. Located nationally, mainly outside of London, Wildwood is currently open for business from 45 of the 49 Wildwood branded restaurants.
dim t
Our pan-Asian restaurant now trades from five sites, serving a wide range of dishes, including dim sum, noodles, soup and curry. This cuisine has fared particularly well over the last two years due to a rise in its popularity and increased demand for takeaway.
Introduction
The second half pre-Omicron was better than we anticipated. With staycation, pent-up demand, and increased disposable income, which was to be spent in the UK, the majority of our restaurants benefited from changing eating habits and working patterns. However, some of the sites, mainly those in city centres, that historically performed well and benefitted from work commuters, tourists and theatregoers have not performed as well. Fortunately, most of Tasty's estate is located in residential areas, and outside of the larger cities which has meant we have benefitted from this change in consumer habits.
We are conscious that performance was assisted by VAT and business rate support, staycations, pent-up demand and unusually high level of disposable income. We are expecting that most of the support and peaks in consumer trends will follow a more normalised path during 2022 and we have planned for rising costs and labour shortages. However, we are cautiously optimistic about 2022 and our ability to expand.
With an increased appetite for delivery and takeaway, we have seen strong sales growth. We plan to capitalise on this by expanding our virtual brands and different formats in new locations to optimise growth. Dim t has been rejuvenated through its successful takeaway and delivery sales growth.
Customers
It was great to welcome customers back in for dine-in, and our focus remains that we offer better value and an improved experience. We are constantly reviewing our menu and increasing the choice of vegetarian, vegan, gluten-free and lighter options. We use our guest feedback system to improve the menu and the offering. Our customer engagement has significantly improved due to the segmentation of our database into relevant and specific groups.
People
We are pleased to report that on 26 December 2021, we employed just under 1,000 people across the business: an increase of 330 from the previous year. Like many competitors and other industries, we have been impacted by labour shortages and are currently 5% short of the full employment levels required. Targeted wage increases have been applied, which should help us retain our teams in the long-run. Since Brexit and the pandemic, we found that flexible working has helped to attract a different demographic. This change provides us with new opportunities as we grow our talent pool. Whilst 2021 was challenging in retention levels due to the pandemic and Brexit, more recent data suggests our team is more stable, and there are encouraging signs that the length of service is growing.
Even though we are operating with a shortfall in staff numbers, overall we have managed to keep the "open" sites trading. Occasionally, positive Covid cases have resulted in short-term closures but overall those instances have been kept to a minimum. We understand that at times this has stretched the existing teams and we thank and appreciate all of them for their hard work.
With the increase in National Insurance of 1.25%, National Living Wage and wage increases, there will inevitably be wage inflation, which will be impossible to completely absorb.
We believe in rewarding our loyal staff and nurturing talent and we remain committed to training and this continued last year despite the challenging environment. Ten apprentices completed their training programme, six with distinction and 18 functional skill exams were passed.
In anticipation of expansion, we are strengthening our management structure and senior teams across all areas but our initial focus is on food, marketing, people and the learning and development team.
An in-depth review into the people aspects of Tasty has been completed and a two-year strategy developed with the focus on becoming a market-leading employer with a diverse and inclusive team, creating a learning culture, using data to support decision making and growing our apprenticeship programmes. New HR and recruitment systems have been established and proposed to provide consistent and swift support to all colleagues.
Government support
The Government initiatives, including the Job Retention Scheme ("CJRS"), business rates relief, deferral of HMRC payments, Eat Out To Help Out ("EOTHO") and VAT reduction, have proved invaluable in supporting the Group over the last two years. With business rates and VAT reductions ending at the end of March 2022 and an additional National Insurance contribution of 1.25% we expect greater pressure on business performance and cash generation, but with the planned improvements to operations and the structural changes proposed, we should be able to adapt our business model to these additional costs.
Suppliers
Our suppliers have suffered from rising fuel costs, lack of drivers, workers and general shortages. This inevitably has impacted our costs, and while there have been some shortages, on the whole, these have been manageable. We are thankful to our suppliers that continue to work through the challenges and support us.
Rent negotiations
The Group has successfully achieved consensual lease concessions and rent reductions for the lockdown period for most of the estate. There remain a few sites for which negotiations are ongoing. Through the pragmatic approach and support of our landlords we have managed to avoid a formal procedure such as a company voluntary arrangement ("CVA"). We are extremely grateful for all the assistance received.
Financial stability
Over the last few years, we have focussed on cost reduction and reduced outgoings, including salary reductions, reduced services, and ensuring only necessary expenditure was incurred. As we come out of the pandemic, we are gearing towards investment in our existing sites, new sites, people and development.
The Group drew down a bank loan of GBP1.25m in January 2021 which is unutilised and is currently reviewing options to refinance or repay this loan.
Board Changes
As previously announced, Sam Kaye stepped down from the Board on 14 May 2021 to allow him to focus on his other commercial interests. The Board would once again like to thank Sam for the enormous support and invaluable experience that he has provided to the Group from inception. Sam remains a supportive shareholder.
Harald Samúelsson was appointed as a Non-Executive Director in May 2021. Harald has over 20 years of experience in the UK restaurant industry, including as joint managing director of Côte Restaurants, and we are delighted to have him on our Board.
Current trading and outlook for the coming year
As we are coming out of the pandemic we are optimistic about sales performance compared to 2019 though this is tempered by rising costs. In particular the end of the rates relief, reduced VAT rates and the introduction of 1.25% additional National Insurance will all impact profitability.
Having built strong foundations over lockdown we are quietly confident about our prudent expansion plans and we expect to take on another five to six units in the current year.
Financial review
Highlighted Items
The Group recognises a number of charges in the financial statements which arise under accounting rules and have no cash impact. These charges include share-based payments and impairments to fixed assets. The above items are included under 'highlighted items' in the statement of comprehensive income and further detailed in Note 5. These items, due to their nature, will fluctuate significantly year on year and are, therefore, highlighted to give more detail on the Group's trading performance.
Full year results and key performance indicators
The Directors continue to use a number of performance metrics to manage the business but, as with most businesses, the focus on the income statement at the top level is on sales, EBITDA before highlighted items and operating profit before highlighted items compared to the previous year. All key performance indicators that adjust for highlighted items do not constitute Statutory or GAAP measures.
The table below shows key performance indicators both before and after IFRS 16:
Hot Features
Premium
Post IFRS Pre IFRS Post IFRS
16 16 16
52 weeks 52 weeks 52 weeks
ended ended ended
26 December 26 December 27 December
2021 2021 2020
GBP'000 GBP'000 GBP'000
Sites at year end 54 54 54
Open sites 50 50 42
Sales 34,909 34,909 24,228
EBITDA before highlighted
items 7,991 3,943 2,702
Depreciation of PP&E
and amortisation (1,300) (1,351) (1,345)
Depreciation of right-of-use
assets (IFRS 16) (3,142) - (3,592)
------------------------------- ------------- ------------- -------------
Operating profit(loss)
before highlighted
items 3,549 2,592 (2,235)
------------------------------- ------------- ------------- -------------
Sales were up 44% on the corresponding period to GBP34.9m (2020: GBP24.2m). Since dine-in reopened in May 2021, trading until December 2021 sales were higher than management expectations and EBITDA was GBP8.0m (2020: GBP2.7m). The adjusted EBITDA profit before IFRS 16 adjustments was GBP3.9m (2020: loss GBP1.5m).
Operating profit before highlighted items was GBP3.5m (pre-IFRS 16 equivalent: profit GBP2.6m, 2020: loss GBP2.2m).
The impact of the implementation of IFRS 16 "Leases" in the prior year, has resulted in depreciation on Right-of-use (ROU) assets for leases and the interest charge on lease liabilities being greater than the charge for rent that would have been reported pre-IFRS 16; net impact on reported loss is GBP1.5m (2020: GBP1.8m). The interest charge on the lease liabilities is higher in the earlier years of a lease. We have reviewed the impairment provision across the ROU assets, fixed assets and goodwill and have made a net provision of GBPnil (2020: GBP8.1m).
After taking into account all non-trade adjustments, the Group reports a profit after tax for the period of GBP1.2m (2020: loss of GBP12.7m). Net cash inflow for the period before financing was GBP7.3m (2020 - inflow GBP9.4m). This is generated from operations and proceeds from the sale of property. Net cash flows generated from operations were GBP7.8m and impacted by IFRS 16 (2020 - GBP7.5m).
As at 26 December 2021, the Group had an outstanding bank loan of GBP1.25m (2020 - GBPnil). At 26 December 2021 cash at bank was GBP11.0m (2020: GBP8.0m). Net cash after outstanding bank loan at the balance sheet date was GBP9.8m (2020 - net cash GBP8.0m). The cash balance at year-end reflects our cash preservation strategy and deferring payments due to landlords, HMRC, and other trade creditors. After reflecting these outstanding payments, our net cash at year-end was approximately GBP6.8m. The Group drew down the GBP1.25m, four-year term loan from its existing bankers, Barclays Bank plc in January 2021.
Principal risks and uncertainties
The Directors have the primary responsibility for identifying the principal risks the business faces and for developing appropriate policies to manage those risks.
Risks and uncertainties Mitigation
Covid-19 Management have become adept at managing
Uncertainty and impact cost and revenue through lockdowns
of Covid-19 impacting and restrictions and flexible at localised
staff, restaurants and closures due to Covid outbreaks and/or
supply. shortages of staff.
Government guidelines have been followed
at all times and often to a higher
standard than required e.g. cleaning,
mask wearing, etc.
Outbreak protocols established for
staff, restaurants, and suppliers
and implemented where necessary.
Cash preservation has been a key focus
over the last few years. This has
been successfully achieved with the
help of our suppliers, creditors,
and landlords and Government assistance.
The Group has successfully achieved
consensual lease concessions, rent
reductions and lease amendments for
the lockdown period for most of the
estate. There remain a few sites for
which the negotiation is ongoing.
We have avoided a more formal procedure
such as a CVA as a result of the support
of our landlords.
The Government support for employees'
pay, VAT reduction, business rate
relief and grants has been invaluable
to the Group.
The bank facility of GBP1.25m secured
to strengthen the Group's balance
sheet and provide additional working
capital, was drawn down in full in
January 2021 but remains unutilised.
-----------------------------------------------
Market Conditions and Brexit has impacted food and drink
"Brexit" primarily in the form of inflation
Economic uncertainty and and shortages.
impact of the UK leaving We work closely with our suppliers
the European Union ("Brexit") on assured supply and regularly retender
could reduce customer prices. To minimise the impact of
confidence / spending. food cost increases we consider menu
engineering and review recipes.
-----------------------------------------------
Competition To mitigate this risk, we continue
The casual dining market to invest in and renew our offering
faces new competition whilst maintaining accessibility without
on a regular basis. compromising quality or the customer
experience.
We constantly review marketing initiatives
to ensure that we remain relevant
to our consumers and ahead of the
competition.
We review performance and success
whilst exploring new opportunities.
-----------------------------------------------
People We have continued to focus on selection,
Loss of key staff and induction, training and retention
inability to hire the of our employees. The Group has made
right people in competitive significant improvements in its selection
labour market. process, onboarding training programmes
and career development paths. New
HR and recruitment systems have been
established and proposed to provide
consistent and swift support to all
colleagues. We have also strengthened
our teams.
The Group offers competitive remuneration
and is reviewing its overall benefits
package.
-----------------------------------------------
Food standards and safety The Group engages in regular internal
Failing to meet safety and external compliance audits to
standards ensure all sites are complying with
regulations. Job-specific training
that covers relevant regulations is
provided to all staff on induction
and whenever else necessary. Online
reporting systems are utilised on
a daily basis to gather relevant information
on compliance.
Regular review of latest Government
guidelines and best practice regarding
allergens.
The Group's activities are subject
to a wide range of laws and regulations
and we seek to comply with legislation
and best practice at all times.
-----------------------------------------------
Supply Chain The Group monitors suppliers closely
A major failure of key and if there was a failure of a key
supplier or distributor supplier we have contingency plans
could cause significant in place to minimise disruption and
business interruption. where possible we maintain buffer
stock of high-risk products.
-----------------------------------------------
On behalf of the Board.
Daniel Jonathan Plant
Chief Executive Officer
22 March 2022
Report of the directors for the 52 weeks ended 26 December 2021
The Directors present their report together with the audited financial statements for the 52 week period ended 26 December 2021 (comparative period 52 weeks to 27 December 2020).
Throughout the year, in performance of its duties, and in compliance with Section 172 of the Companies Act, the Board has had regard to the interests of the Group's key stakeholders and taken account of the potential impact on these stakeholders of the decisions it has made. In order to comply with Section 172, the Board is required to include a statement setting out the way in which Directors have discharged these duties during the year. Details of how the Board had regard to the following S172 Matters are as follows:
S172 Matters Specific examples
1. The likely consequences of
any decision in the long term * Our corporate governance framework as described in
this annual report
* Communications with our shareholders through our
website, circulars, AGM and post results investor
meetings
------------------------------------------------------------------
2. The interests of the Group's
employees * Employee engagement through newsletters,
communication tools, surveys and career development
opportunities including apprenticeship
* Established whistleblowing and safeguarding
procedures
------------------------------------------------------------------
3. The need to foster the Group's
business relationships with * Building long-term relationships with suppliers
suppliers, customers and others
* Encouraging and responding to customer feedback
through websites, social media and our feedback
system
------------------------------------------------------------------
4. The impact of the Group's
operations on the community * Local community involvement with the NHS
and the environment
* Working with the local community
------------------------------------------------------------------
5. The desirability of the Group
maintaining a reputation for * Regular staff training and communication
high standards of business conduct
* Restaurant visits and audit processes
------------------------------------------------------------------
6. The need to act fairly between
members of the Group * Maintaining an open dialogue with our shareholders
* Stakeholder engagement
------------------------------------------------------------------
Results and dividends
The consolidated statement of comprehensive income is set out below and shows the profit for the period.
The Directors do not recommend the payment of a dividend (2020 - GBPnil).
Post balance sheet events
Post balance sheet events are set out in Note 31.
Future developments
The outlook and future developments are set out in the Chairman's statement and the Strategic Report.
Principal activities
The Group's principal activity is the operation of restaurants.
Directors
The Directors of the Group during the period were as follows:
Executive
Daniel Jonathan Plant
Mayuri Vachhani
Non-Executive
Keith Lassman
Samuel Kaye (resigned 14 May 2021)
Harald Samúelsson (appointed 19 May 2021)
Directors' interest in shares
As at 26 December As at 27 December
2021 2020
Ordinary % Ordinary
shares of shares of
Director 0.1p each 0.1p each %
Daniel Jonathan Plant 7,091,902 5.0% 7,091,902 5.0%
Samuel Kaye (resigned
14 May 2021) 20,882,197 14.8% 20,882,197 14.8%
Keith Lassman 1,421.983 1.0% 806,599 0.6%
Mayuri Vachhani - - - -
Harald Samúelsson - - - -
Share options
Exercise Grant Vesting
Director Number price date period Expiry date
Mayuri Vachhani 750,000 GBP0.03 17/10/2019 3 years 17/10/2029
B ordinary shares
Exercise Grant Vesting
Director Number price date period Expiry date
Daniel Jonathan 1,2 4 15/1/2026
Plant 15,676,640 GBP0.00 15/1/2021 years
In January 2021 Daniel Jonathan Plant was awarded 15,676,640 'B' shares in Tasty plc which can be converted to ordinary shares subject to achievement of hurdle rates relating to the Company's share price.
Employees
Applications from disabled persons are given full consideration providing the disability does not seriously affect the performance of their duties. Such persons, once employed, are given appropriate training and equal opportunities.
The Group takes a positive view toward employee communication and has established systems for ensuring employees are informed of developments and that they are consulted regularly.
Environment
We continue to maintain an average of 45% recycling across both brands with a negligible amount of waste going to landfill.
As part of our ongoing energy efficiency programme there has been a focus on energy saving. This includes a rigorous check list for branches which have been and may be required to close during the pandemic.
Our waste oil is collected and converted into Bio Diesel and Bio Gas to ensure that none is wasted.
The Group continues to work with its delivery partners in converting all our delivery packaging to biodegradable and recyclable materials.
We have stopped using plastic straws, committed to a policy recommended by the Humane League and currently looking at ways to reduce our carbon footprint.
The Group presents its greenhouse gases ("GHG") emissions and energy use data under Streamlined Energy and Carbon Reporting ("SECR") for the year ended 26 December 2021:
tCO2e tCO2e
52 weeks ended 52 weeks ended
------------------ ------------------
26 December 2021 27 December 2020
------------------ ------------------
Scope 1 - Natural
Gas 1,061 1,141
------------------ ------------------
Scope 2 - Electricity 1,431 1,328
------------------ ------------------
Scope 3 - Grey Fleet
Mileage 83 78
------------------ ------------------
Total 2,575 2,547
------------------ ------------------
Energy Intensity ratio of 0.142 (2020: 0.131) has been measured using the metric of Tonnes CO2e per m2 floor area ("tCO2e").
The Group's total energy consumption for the year ended 26 December 2021 was 12,872,041 kWh (2020 - 12,216,634 kWh).
Donations
The Group made no charitable or political donations in the period (2020 - none)
Financial Instruments
Details of the use of financial instruments and the principal risks faced by the Group are contained in Note 27 to the financial statements.
Going concern
At the time of approving the financial statements, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. In reaching this conclusion the Directors have considered the financial position of the Group, together with its forecasts for the next 12 months and taking into account possible changes in trading performance. The going concern basis of accounting has, therefore, been adopted in preparing the financial statements.
Auditors
All of the current Directors have taken all reasonable steps necessary to make themselves aware of any information needed by the Group's auditors for the purposes of their audit and to establish that the auditors are aware of that information. The Directors are not aware of any relevant audit information of which the auditors are unaware.
Haysmacintyre LLP were appointed as the auditors and have expressed their willingness to continue in office and a resolution to re-appoint them will be proposed at the annual general meeting.
On behalf of the Board.
Daniel Jonathan Plant
Chief Executive Officer
22 March 2022
Statement of directors' responsibilities
The Directors are responsible for preparing the strategic report, the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the Group and Company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. The Directors are also required to prepare financial statements in accordance with the AIM Rules for Companies issued by the London Stock Exchange.
In preparing these financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently; -- make judgements and accounting estimates that are reasonable and prudent;
-- state whether they have been prepared in accordance with IFRSs as adopted by the European Union, subject to any material departures disclosed and explained in the financial statements;
-- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's transactions and disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the financial statements comply with the requirements of the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial statements are published on the Company's website (www.dimt.co.uk) in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors. The Directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.
Consolidated statement of comprehensive income
for the 52 weeks ended 26 December 2021
52 weeks 52 weeks
ended 26 ended 27
December December
Note 2021 2020
GBP'000 GBP'000
Revenue 3 34,909 24,228
Cost of sales (34,130) (30,330)
----------------------------------------- ------ ----------- -----------
Gross profit(loss) 779 (6,102)
Other income 3 4,208 5,413
Operating expenses (1,305) (9,328)
Operating profit(loss) before
highlighted items 3,549 (2,235)
Highlighted items 5 133 (7,782)
----------------------------------------- ------ ----------- -----------
Operating profit(loss) 4 3,682 (10,017)
Finance income 6 - 4
Finance expense 6 (2,497) (2,548)
Profit(loss) before income
tax 1,185 (12,561)
Income tax 9 - (105)
----------------------------------------- ------ ----------- -----------
Profit(loss) and total comprehensive
income(loss) for the period 1,185 (12,666)
----------------------------------------- ------ ----------- -----------
Earnings per share for profit(loss)
attributable to the ordinary
equity holders of the company
Basic earnings per share 10 0.84p (8.98p)
Diluted earnings per share 10 0.74p (8.98p)
The notes below form part of these financial statements.
Consolidated statement of changes in equity
for the 52 weeks ended 26 December 2021
Share Share Merger Retained Total
capital premium reserve earnings
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 29 December 2019 6,061 24,251 992 (18,018) 13,286
Cost of placing of ordinary
shares - - - (68) (68)
Total comprehensive loss for
the period - - - (12,666) (12,666)
Share based payments - - - 44 44
Balance at 27 December 2020 6,061 24,251 992 (30,708) 596
Issue of ordinary shares - 3 - - 3
Total comprehensive income
for the period - - - 1,185 1,185
Share based payments - - - 120 120
Balance at 26 December 2021 6,061 24,254 992 (29,403) 1,904
------------------------------- ---------- ---------- ---------- ----------- ----------
The notes below form part of these financial statements.
Company statement of changes in equity
for the 52 weeks ended 26 December 2021
Share capital Share premium Retained Total
profit
GBP'000 GBP'000 GBP'000 GBP'000
Balance at 29 December 2019 6,061 24,251 (19,842) 10,470
Cost of placing of ordinary
shares - - (68) (68)
Total comprehensive loss for
the period - - (3,254) (3,254)
Share based payments - - 44 44
Balance at 27 December 2020 6,061 24,251 (23,120) 7,192
Issue of ordinary shares - 3 - 3
Total comprehensive loss for
the period - - (145) (145)
Share based payments - - 120 120
Balance at 26 December 2021 6,061 24,254 (23,145) 7,170
------------------------------- --------------- --------------- ---------- ---------
The notes below form part of these financial statements.
Consolidated balance sheet
At 26 December 2021
26 December 27 December
2021 2020
Note GBP'000 GBP'000
Non-current assets
Intangible assets 12 28 26
Property, plant and equipment 13 14,562 15,572
Right-of-use assets 13 37,047 39,811
Other non-current assets 17 105 129
51,742 55,538
-------------------------------- ------ ------------- -------------
Current assets
Inventories 16 2,103 1,822
Trade and other receivables 17 1,355 1,363
Cash and cash equivalents 11,005 8,028
14,463 11,213
-------------------------------- ------ ------------- -------------
Total assets 66,205 66,751
-------------------------------- ------ ------------- -------------
Current liabilities
Trade and other payables 18 (10,493) (10,617)
Lease liabilities 14 (2,024) (2,904)
Borrowings 21 (313) -
(12,830) (13,521)
-------------------------------- ------ ------------- -------------
Non-current liabilities
Provisions 19 (297) (335)
Lease liabilities 14 (50,157) (52,219)
Long-term borrowings 21 (937) -
Other Payables 18 (80) (80)
(51,471) (52,634)
-------------------------------- ------ ------------- -------------
Total liabilities (64,301) (66,155)
-------------------------------- ------ ------------- -------------
Total net assets 1,904 596
-------------------------------- ------ ------------- -------------
Equity
Share capital 22 6,061 6,061
Share premium 23 24,254 24,251
Merger reserve 23 992 992
Retained deficit 23 (29,403) (30,708)
-------------------------------- ------
Total equity 1,904 596
-------------------------------- ------ ------------- -------------
The financial statements were approved by the Board of Directors of the Company and authorised for issue on 22 March 2022 and signed on their behalf by Daniel Jonathan Plant.
The notes below form part of these financial statements.
Company balance sheet
At 26 December 2021
26 December 27 December
Note 2021 2020
GBP'000 GBP'000
Non-current assets
Investments 15 3,334 3,214
Other non-current assets 17 3,836 3,978
--------------------------- --------
Total net assets 7,170 7,192
--------------------------- -------- ------------- -------------
Equity
Share capital 22 6,061 6,061
Share premium 23 24,254 24,251
Retained deficit 23 (23,145) (23,120)
--------------------------- --------
Total equity 7,170 7,192
--------------------------- -------- ------------- -------------
The Parent Company, Tasty plc, has taken advantage of the exemption in s408 of the Companies Act 2006 not to publish its own income statement. The Parent Company made a loss of GBP0.14m (2020 - loss of GBP3.2m) for the period. The Parent Company has not recognised leases under IFRS 16 in its balance sheet as management have concluded that the substance of the leases is held by the subsidiary, Took Us A Long Time Ltd ("TUALT") and recognised within its Company accounts.
The financial statements were approved by the board of directors of the Company and authorised for issue on 22 March 2022 and signed on their behalf by Daniel Jonathan Plant.
The notes below form part of these financial statements.
Consolidated cash flow statement
For the 52 weeks ended 26 December 2021
52 weeks 52 weeks
Note ended 26 ended 27
December December
2021 2020
GBP'000 GBP'000
Operating activities
Cash generated from operations 29 7,826 7,575
Corporation tax received 9 - (105)
Net cash inflow from operating
activities 7,826 7,470
--------------------------------------- -------- ----------- -----------
Investing activities
Proceeds from sale of property,
plant and equipment 3 2,039
Purchase of property, plant and
equipment 13 (544) (120)
Interest received - 4
Net cash inflow from investing
activities (541) 1,923
--------------------------------------- -------- ----------- -----------
Financing activities
Net proceeds from issues of ordinary -
shares 3
Bank loan receipt 30 1,250 -
Bank loan repayment 30 - (1,652)
Finance expense 6 (59) (34)
Finance expense (IFRS 16) 6 (2,438) (2,514)
Principal paid on lease liabilities 30 (3,064) (1,735)
Net cash used in from financing
activities (4,308) (5,935)
--------------------------------------- -------- ----------- -----------
Net increase in cash and cash
equivalents 2,977 3,458
Cash and cash equivalents brought
forward 8,028 4,570
Cash and cash equivalents as at
the end of the period 11,005 8,028
--------------------------------------- -------- ----------- -----------
The notes below form part of these financial statements.
Company cash flow statement
For the 52 weeks ended 26 December 2021
52 weeks 52 weeks
Note ended 26 ended 27
December December
2021 2020
GBP'000 GBP'000
Operating activities
Cash generated from operations (3) 68
Corporation tax paid - -
-------------------------------------------- --------- ----------- --- -----------
Net cash outflow from operating
activities (3) 68
-------------------------------------------------------- ----------- --- -----------
Investing activities - -
Purchase of property, plant and
equipment - -
-------------------------------------------- --------- ----------- --- -----------
Net cash in flow / (used in) investing
activities - -
-------------------------------------------- --------- ----------- --- -----------
Financing activities
Net proceeds from issues of ordinary
shares 3 (68)
-------------------------------------------------------- ----------- --- -----------
Net cash flows used in financing
activities 3 (68)
-------------------------------------------------------- ----------- --- -----------
Net increase in cash and cash equivalents - -
Cash and cash equivalents brought
forward - -
Cash and cash equivalents as at
the end of the period - -
-------------------------------------------------------- ----------- --- -----------
The notes below form part of these financial statements
1 Accounting policies
Tasty plc is a public listed company incorporated and domiciled in England and Wales. The Company's ordinary shares are listed on AIM. Its registered address is 32 Charlotte Street, London, WC1T 2NQ.
(a) Statement of compliance
These financial statements of the Group and Company have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRS) issued by the International Accounting Standards Board (IASB) as adopted by the United Kingdom ("adopted IFRSs"). These financial statements have also been prepared in accordance with those parts of the Companies Act 2006 that are relevant to companies that prepare their financial statements in accordance with IFRS.
(b) Basis of preparation
The financial statements cover the 52-week period ended 26 December 2021, with a comparative period of the 52-week period ended 27 December 2020. The financial statements are presented in sterling, rounded to the nearest thousand and are prepared on the historical cost basis. The accounting policies of the Company are consistent with the policies adopted by the Group.
(c) Going concern
As at 26 December 2021, the Group had net assets of GBP1.9m (2020: GBP0.6m). The Group meets its day-to-day working capital requirements through the generation of operating cashflow, equity raise and bank finance. The Group's principal sources of funding are:
-- Issues of ordinary share capital in the Company on AIM.
-- a GBP1.25m, four-year term loan from its existing bankers, Barclays Bank plc (the "Facility"), in order to strengthen its balance sheet and provide additional working capital support. The Facility was drawn down in January 2021. The Facility has a capital repayment holiday of 12 months and carries interest at a rate of 4.5% per annum over the Bank of England Base Rate, following drawdown. The Group has also secured a GBP250,000 overdraft facility. The facility is currently unutilised.
The pandemic led to a high level of uncertainty and disruption in the economy and hospitality industry. During this period costs were minimised and cash outflows reduced.
Since dine-in reopened in May 2021, trading until December 2021 was highly encouraging. Following the Government's advice in December and the spread of the Omicron variant impacted Christmas sales, December was weaker than we anticipated. Trade for the start of 2022 is encouraging.
The Group monitors cash balances and prepares regular forecasts, which are reviewed by the Board. These forecasts include our best estimates and judgements based on currently available information and current environment. Judgement is particularly required as to the impact on trade of the restrictions being eased as this will also mean that many more people will be holidaying abroad.
Having reviewed the updated forecast and given the ability of the Group to manage costs, cash position and the untilised bank loan, the Directors believe that it remains appropriate to prepare the financial statements on a going concern basis.
(d) Leases
Group's accounting policies for leases are as follows:
Lessee accounting
Effective for periods starting on or after 1 January 2019, IFRS 16 has replaced IAS 17 and IFRIC4 (Determining whether an arrangement contains a lease).
The change in definition of a lease mainly relates to the concept of control. IFRS 16 distinguishes between leases and service contracts on the basis of whether the use of an identified asset is controlled by the customer. Control is considered to exist if the customer has:
-- The right to obtain substantially all of the economic benefits from the use of an identified asset; and
-- The right to direct the use of that asset in exchange for consideration.
The Group adopted IFRS 16 for its period starting 30 December 2019 using the modified retrospective approach on transition, recognising leases at the carried forward value had they been treated as such from inception, without restatement of comparative figures. On adoption of IFRS 16, the Group recognised right-of-use assets and lease liabilities in relation to the restaurant sites it leases for its
business.
All leases are accounted for by recognising a right-of-use asset and a lease liability except for:
-- Leases of low value assets, and -- Leases with a duration of 12 months or less.
Subsequent to initial measurement lease liabilities increase as a result of interest charged at a constant rate on the balance outstanding and are reduced for lease payments made. Right-of-use assets are amortised on a straight-line basis over the remaining term of the lease.
The Group's leases are held across Tasty plc or Took Us Long Time Ltd ("TUALT"). In determining where the assets and liabilities should be accounted for, we have reviewed which entity derives the benefit and rights to use the asset. In assessing this we have reviewed where the trade occurs, where staff are employed and where day to day activity is managed from. We have concluded that the substance of the lease is that it is held by TUALT and accordingly recognised the lease liabilities within the TUALT company financial statements.
The lease liabilities recognised in TUALT but in the name of Tasty plc totalled GBP43m at 26 December 2021 (GBP44m at 27 December 2020). Accordingly, this balance represents a contingent liability for the Company only.
Lessor accounting
Under IFRS 16, a lessor continues to classify leases as either finance leases or operating leases and account for those two types of leases differently.
Based on an analysis of the Group's operating leases as at 26 December 2021 on the basis of the facts and circumstances that exist at that date, the Directors of the Group have assessed that the impact of this change has not had any impact on the amounts recognised in the Group's consolidated financial statements.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low value assets. The Group recognises these payments as an expense on a straight-line basis over the lease term. Currently the Group has no low value assets or short term leases.
Covid-19 related rent concessions
IFRS 16 defines a lease modification as a change in the scope of a lease, or the consideration for a lease, that was not part of the original terms and conditions of the lease. The Group has considered the Covid-19 related rent concessions and applied the lease modifications accounting.
(e) Changes in accounting policies and disclosures
New standards, amendments to standards or interpretations adopted by the Group
Amendments to accounting standards applied in the year ended 26 December 2021 were as follows:
-- Definition of Material - amendments to IAS 1 and IAS 8; and -- Revised Conceptual Framework for Financial Reporting; and
The application of these did not have a material impact on the group's accounting treatment and has therefore not resulted in any material changes.
New standards, amendments to standards or interpretations not yet adopted by the Group
The following new standards, amendments to standards or interpretations are mandatory for the first time for the financial years beginning on or after 1 January 2021. No standards have been early adopted by the Group.
-- Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 - Interest Rate Benchmark Reform Phase 2
-- Amendment to IFRS 16 - Covid-19-Related Rent Concessions beyond 30 June 2021 -- Annual Improvements to IFRS Standards 2018-2020 Cycle -- Amendment to IAS 37 - Onerous Contracts: Cost of Fulfilling a Contract -- Amendment to IAS 1 - Classification of Liabilities as Current or Non-current -- Amendments to IAS 1 and IFRS Practice Statement 2 - Disclosure of Accounting Policies -- Amendments to IAS 8 - Definition of Accounting Estimates
We are currently assessing the impact of these new accounting standards and amendments. The amendments will not have any significant impact on the Group.
(f) Basis of consolidation
The consolidated financial statements incorporate the results of the Company and its subsidiary, Took Us A Long Time Limited. The accounting period of the subsidiary is co-terminous with that of the parent undertaking.
(g) Revenue
The Group's revenue is derived from goods and services provided to the customers from dine-in and delivery and takeaway. With revenue recognised at the point in time when control of the goods has transferred to the customer. Control passes to the customers at the point at which food and drinks are provided and the Group has a present right for payment.
(h) Other income
Included in Other income is the rental income from operating leases. Rental income is recognised in the period to which it relates, and rent free periods would be spread over the terms of the lease. The cost of these leases is included within the cost of sales. The Group has received Government grants in relation to the Coronavirus Job Retention Scheme ("CJRS") and "Retail and Hospitality Business Grants", provided by the Government in response to Covid-19's impact on the business. In accordance with the IAS 20 (Accounting for Government Grants and Disclosure of Government Assistance) guidelines, the Group has recognised the salary expense as normal and recognised the CJRS grant income in profit and loss as the Group becomes entitled to the grant. "Retail and Hospitality Business Grants" are recognised when there is reasonable assurance that the Group has met the conditions attaching to these grants.
(i) Retirement benefits: Defined contribution schemes
Contributions to defined contribution pension schemes are charged to the consolidated income statement in the period to which they relate.
(j) Share based payments
Certain employees (including Directors and senior executives) of the Group receive remuneration in the form of share-based payment transactions, whereby employees render services as consideration for equity instruments (e.g. options, shares etc).
The cost of this is measured by reference to the fair value at the date on which they are granted. The fair value is determined by using an appropriate pricing model (e.g. binomial or Monte Carlo model).
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (the vesting date). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group's best estimate of the number of equity instruments that will ultimately vest. The profit or loss charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vesting irrespective of whether or not the market condition is satisfied, provided that all other performance and/or service conditions are satisfied. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of earnings per share.
(k) Borrowing costs
Borrowing costs are recognised in the income statement in the period in which they are incurred.
(l) Externally acquired intangible assets
Externally acquired intangible assets are initially recognised at cost and subsequently amortised on a straight-line basis over their useful economic lives. The amortisation expense is included within the cost of sales line in the consolidated income statement.
The significant intangibles recognised by the Group and their useful economic lives are as follows:
Intangible asset Useful economic life
Trade marks 10 years
(m) Property, plant and equipment
Items of property, plant and equipment are stated at cost less accumulated depreciation (see below) and impairment losses.
Depreciation is provided to write off the cost or valuation, less estimated residual values, of all fixed assets, evenly over their expected useful lives and it is calculated at the following rates:
Leasehold improvements over the period of the lease
Fixtures, fittings and 10% per annum straight line
equipment
Computers 20% per annum straight line
Right-of-use assets over the period of the lease
Property, plant and equipment are reviewed for impairment in accordance with IAS 36 Impairment of Assets, when there are indications that the carrying value may not be recoverable. Impairment charges are recognised in the statement of comprehensive income. See note 2(d) for further details.
(n) Non-current assets held for sale
Non-current assets are classified as held for sale when the Board plans to sell the assets and no significant changes to this plan are expected. The assets must be available for immediate sale, an active programme to find a buyer must be underway and be expected to be concluded within 12 months with the asset being marketed at a reasonable price in relation to the fair value of the asset.
Non-current assets classified as held for sale are measured at the lower of their carrying amount immediately prior to being classified as held for sale and fair value less costs of disposal. Following their classification as held for sale, non-current assets are not depreciated.
(o) Provisions
In the period to 26 December 2021, the Group has recognised a provision for dilapidations for a number of sites, where the need to carry out the work has been identified but a full survey and commission has not been undertaken and therefore management has applied their judgment in determining the provision.
(p) Loans and receivables
These assets arise principally from the provision of goods and services to customers (e.g. trade receivables), but also incorporate other types of financial assets where the objective is to hold these assets in order to collect contractual cash flows and the contractual cash flows are solely payments of principal and interest. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.
Impairment provisions for trade receivables are recognised based on the simplified approach within IFRS 9 using a provision matrix in the determination of the lifetime expected credit losses. During this process the probability of the non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade receivables. For trade receivables, which are reported net, such provisions are recorded in a separate provision account with the loss being recognised in the consolidated statement of comprehensive income. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.
Impairment provisions for receivables from related parties and loans to related parties are recognised based on a forward-looking expected credit loss model. The methodology used to determine the amount of the provision is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset. For those where the credit risk has not increased significantly since initial recognition of the financial asset, twelve month expected credit losses along with gross interest income are recognised. For those for which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised.
The Group's loans and receivables comprise trade and other receivables and cash and cash equivalents in the balance sheet. The Company's loans and receivables comprise only inter-Company receivables. Cash and cash equivalents include cash in hand and deposits held with banks.
(q) Apprenticeship funding and levy
The payments made under the levy represent a prepayment for training services expected to be received and is recognised as an asset until the receipt of the service. When the training service is received, an appropriate expense is recognised. The apprenticeship grant income is deferred until apprentices receive training under the rule of the scheme and we are satisfied that we have fully complied with the scheme. We have applied an element of judgement until a full inspection is carried out.
(r) Financial liabilities
Financial liabilities include trade payables, and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost.
Bank borrowings are initially recognised at fair value and are subsequently measured at amortised costs using the effective interest method. Interest expense includes initial transaction costs and any premium payable on redemption as well as any interest payable while the liability is outstanding.
(s) Inventories
Raw materials and consumables
Inventories are stated at the lower of cost and net realisable value. Cost comprises all costs of purchase and other costs incurred in bringing the inventories to their present location and condition. Net realisable value is based on estimated selling price less costs incurred up to the point of sale.
Crockery and utensils (Smallwares)
Smallware inventories are held at cost which is determined by reference to the quantity in issue to each restaurant. Smallware inventory relates to small value items which have short life spans relating to kitchen and bar equipment. These items are recorded under inventory as they are utilised in providing food and beverage to customers.
(t) Taxation
Tax on the profit and loss for the year comprises current and deferred tax. Tax is recognised in the profit and loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the balance sheet differs from its tax base, except for differences arising on:
-- The initial recognition of goodwill
-- The initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profit.
Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised.
Deferred tax is provided using the balance sheet liability method, providing for all temporary differences between the carrying amounts of assets and liabilities recorded for reporting purposes and the amounts used for tax purposes.
The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting date and are expected to apply when the deferred tax liabilities or assets are settled or recovered. Deferred tax balances are not discounted.
(u) Goodwill
Goodwill represents the difference between the fair value of consideration paid and the carrying value of the assets and liabilities acquired. Goodwill arose on acquisition of a group of leases.
Goodwill is stated as originally calculated less any accumulated provision for impairment. Goodwill is allocated to individual CGUs, where each CGU is a restaurant, and is subject to an impairment review at each reporting date.
(v) Investments
Investments in subsidiaries are included in the Company's Statement of Financial Position at cost less provision for impairment.
(w) Share capital
The Company's ordinary shares are classified as equity instruments.
(x) Operating profit
Operating profit is stated after all expenses, but before financial income or expenses. Highlighted items are items of income or expense which because of their nature and the events giving rise to them, are not directly related to the delivery of the Group's restaurant service to its patrons and merit separate presentation to allow shareholders to understand better the elements of financial performance in the year, so as to facilitate comparison with prior periods and to assess better trends in financial performance.
(y) Earnings per share
Basic earnings per share values are calculated by dividing net profit/(loss) for the year attributable to Ordinary equity holders of the parent by the weighted average number of Ordinary shares outstanding during the year.
2 Critical accounting estimates and judgements
The preparation of the Group's financial statements requires management to make certain estimates, judgements and assumptions that affect the reported amount of assets and liabilities, and the disclosure of contingent liabilities at the statement of financial position date and amounts reported for revenues and expenses during the year. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the assets or liability affected in the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial period are discussed below.
(a) Share based payments (Note 26)
The Group operates equity share-based remuneration schemes for employees. Employee services received and the corresponding increase in equity are measured by reference to the fair value of the equity instruments at the date of grant, excluding the impact of any non-market vesting conditions. The fair value of share options is estimated by using valuation models, such as binomial or the Monte Carlo model on the date of grant based on certain assumptions. Those assumptions are described in note 26 and include, among others, the dividend growth rate, expected volatility, expected life of the options (for options with market conditions) and number of options expected to vest.
(b) Accruals (Note 18)
In order to provide for all valid liabilities which exist at the balance sheet date, the Group is required to accrue for certain costs or expenses which have not been invoiced and therefore the amount of which cannot be known with certainty. Such accruals are based on management's best estimate and past experience. Delayed billing in some significant expense categories such as utility costs can lead to sizeable levels of accruals. The total value of accruals as at the balance sheet date is set out in note 18.
(c) Useful lives of Right-of-use assets, property, plant and equipment (Note 13)
Property, plant and equipment are amortised or depreciated over their useful lives. Useful lives are based on management estimates of the period that the assets will generate revenue, which are periodically reviewed for continued appropriateness. Right-of-use assets are depreciated over the life of the lease. The life of the lease is the minimum committed lease period.
(d) Impairment reviews (Note 13)
In carrying out an impairment review in accordance with IAS 36 it has been necessary to make estimates and judgements regarding the future performance and cash flows generated by individual trading units which cannot be known with certainty. The Group views each restaurant as a separate cash generating unit ("CGU"). Past performance is often used as a guide in estimating future performance, or comparison with similar sites. Where the circumstances surrounding a particular trading unit have changed then forecasting future performance becomes extremely judgemental and for these reasons the actual impairment required in the future may differ from the charge made in the financial statements. When assessing a CGU recoverable amount, the value in use calculation uses a discounted cash flow model which is sensitive to the discount rate and the growth rate used after taking into account potential sale value. The cashflow projections are influenced by factors which are inherently uncertain such as footfall and non-controllable costs such as rates and license costs. The future cashflows are harder to predict due to the pandemic.
All assets (ROU, fixed assets and goodwill) are reviewed for impairment in accordance with IAS 36 Impairment of Assets, when there are indications that the carrying value may not be recoverable. Impairment charges are recognised in the statement of comprehensive income.
All assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the recoverable amount is higher than the carrying amount of the CGU, no further assessment is required. Where the carrying value of an asset or a CGU exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to dispose of the asset), the asset is written down accordingly. In the absence of any information about the fair value of a CGU, the recoverable amount is deemed to be its value in use. Value in use is calculated using cash flows over the remaining life of the lease for the CGU discounted at 6% (2020: 6%), being the rate considered to reflect the risks associated with the CGUs. The discount rate is based on the Group's weighted average cost of capital ("WACC") which is used across all CGUs due to their similar characteristics.
The Covid-19 pandemic has resulted in an increased uncertainty and greater difference in performance across CGUs depending on whether it is located in a residential, city centre, high street or tourist location. The location also impacts when site can resume normal trading. Due to lockdowns in 2021, the cashflow in 2021 is not always indicative of the future cashflows. The cashflow of each CGU has been determined based on management's judgement of future performance based on a combination of historical performance, impact of the pandemic and expected recovery in future years and therefore each CGU's cashflow has been selected on an individual criterion. Management's conservative judgement has been applied in selecting this criterion due to the uncertainty arising from amongst other conditions, cost of living increases and utility cost pressures and therefore a 0.5% growth rate (2020 - 0.5%) has been applied. Included within the cashflow is management's estimate of the capital expenditure required to maintain performance of the sites in the future years.
(e) Goodwill impairment reviews (Note 12)
The Group determines whether goodwill is impaired on an annual basis and this requires an estimation of the value in use of the cash-generating units to which the goodwill is allocated. This involves estimation of future cash flows and choosing a suitable discount rate. Full details are supplied in note 12, together with an analysis of the key assumptions.
(f) Intercompany provision (Note 17)
In carrying out a review of intercompany loan in accordance with IFRS 9 it has been necessary to make estimates and judgements regarding the repayment of the loan by its subsidiary to the Company. A sensitivity analysis has been performed on the repayment of loan value.
(g) Crockery and utensils (Smallwares) inventory
The cost of replenishing smallwares is expensed directly through the income statement. Smallwares is recognised at historic cost and tested for impairment on an annual basis.
(h) Lease liabilities (Note 1(d))
The calculation of lease liabilities requires the Group to determine an incremental borrowing rate ("IBR") to discount future minimum lease payments. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR rate of 4.6% therefore reflects what the Group 'would have to pay', which requires estimation when no observable rates are available or when they need to be adjusted to reflect the terms and conditions of the lease. As at 26 December 2021, a sensitivity analysis has been conducted on the lease liabilities which shows that increasing the IBR rate by 1% will decrease the lease liability by GBP3.3m and decrease the right-of-use asset pre-impairment by GBP3.3m.
(i) Provision
A dilapidation provision is made for a number of sites, where the need to carry out the work has been identified but a full survey and commission has not been undertaken and therefore management has applied their judgment in determining the provision. The Group has not made a provision for the costs of restoring the condition of sites at the end of the leases. This is based on management experience and judgement.
The apprenticeship grant income is deferred until apprentices receive training under the rule of the scheme and we are satisfied that we have fully complied with the scheme. We have applied an element of judgement until a full inspection is carried out.
(j) Lease recognition
The Group's leases are held across Tasty plc or Took Us Long Time Ltd ("TUALT"). In determining where the assets and liabilities should be accounted for, we have reviewed which entity derives the benefit and rights to use the asset. In assessing this we have reviewed where the trade occurs, where staff are employed and where day to day activity is managed from. We have adjudged that the substance of the lease is that it is held by TUALT and accordingly recognised the lease liabilities within the TUALT company accounts.
3 Revenue, other income and segmental analysis
The Group's activities, comprehensive income, assets and liabilities are wholly attributable to one operating segment (operating restaurants) and arises solely in one geographical segment (United Kingdom). All the Group's revenue is recognised at a point in time.
An analysis of the Group's total revenue is as follows:
52 weeks
ended 26 52 weeks ended
December 27 December
2021 2020
GBP'000 GBP'000
Sale of goods and services: dine-in 26,319 21,662
Sale of goods and services: delivery
and takeaway 8,590 2,566
34,909 24,228
--------------------------------------- ----------- ----------------
An analysis of the Group's other income is as follows:
52 weeks 52 weeks
ended 26 ended 27
December December
2021 2020
GBP'000 GBP'000
Sub-let site rental income 295 267
Coronavirus Job Retention Scheme (CJRS)
and Business Grants 3,913 5,146
4,208 5,413
------------------------------------------ ----------- -----------
The Group has received Government grants in relation to the Coronavirus Job Retention Scheme ("CJRS") and Covid-19 Business Grants, provided by the Government in response to Covid-19's impact on the business.
In accordance with IAS 20 (Accounting for Government Grants and Disclosure of Government Assistance) guidelines, the Group has recognised the salary expense as normal and recognised the grant income in profit and loss as the Group becomes entitled to the grant. The CJRS grant and business grants of GBP3.9m have been recognised within other income. "Retail and Hospitality Business Grants" are recognised when there is reasonable assurance that the Group has met the conditions attaching to these grants.
4 Operating loss
52 weeks 52 weeks
ended 26 ended 27
December December
2021 2020
This has been arrived at after
charging GBP'000 GBP'000
Staff costs 15,257 14,841
Share based payments 120 44
Amortisation of intangible assets 3 3
Depreciation of right-of-use assets
(IFRS16) 3,142 3,592
Depreciation property, plant and
equipment 1,297 1,342
Dilapidations provision charge - 335
Dilapidations provision utilisation (38) -
Restructure and consultancy 7 408
Impairment of smallware inventory
due to Covid-19 - 400
Impairment of Goodwill - 326
Impairment release of property,
plant and equipment - (2,255)
Impairment of right-of-use assets - 10,043
Profit on disposal of property,
plant and equipment (3) (1,184)
Auditor remuneration:
Audit fee - Parent Company 10 8
- Group financial statements 45 31
- Subsidiary undertaking 10 8
Audit related assurance services 3 5
Taxation advisory services 2 2
5 Highlighted items - charged to operating expenses
52 weeks 52 weeks
ended ended 27
26 December December
2021 2020
GBP'000 GBP'000
Profit on disposal of property, plant
and equipment 3 1,184
Restructure and consultancy (7) (408)
Impairment of Goodwill - (326)
Impairment release of tangible assets 6,171 2,255
Impairment of tangible assets (6,171) (10,043)
Share based payments (120) (44)
Impairment of smallware inventory
due to Covid-19 - (400)
Gain on lease modifications 257 -
133 (7,782)
---------------------------------------- -------------- -----------
The above items have been highlighted to give more detail on items that are included in the consolidated statement of comprehensive income and which when adjusted shows a profit or loss that reflects the ongoing trade of the business.
This net impairment movement is GBPnil, however for some sites there was an impairment charge of GBP6.2m and for other sites a release of GBP6.2m.
6 Finance income and expense
52 weeks 52 weeks
ended 26 ended 27
December December
2021 2020
GBP'000 GBP'000
Interest receivable - (4)
Interest payable 2,497 2,548
2,497 2,544
---------------------- ----------- -----------
7 Employees
52 weeks 52 weeks
ended 26 ended 27
December December
2021 2020
Staff costs (including Directors)
consist of: GBP'000 GBP'000
Wages and salaries 13,933 13,668
Social security costs 1,101 951
Other pension costs 223 222
Equity settled share based payment
expense 120 44
15,377 14,885
------------------------------------- ----------- -----------
The average number of persons, including Directors, employed by the Group during the period was 821 of which 805 were restaurant staff and 16 were head-office (2020 - 810 of which 796 were restaurant staff and 14 were head-office staff). The second-half of 2021 the average number of staff was 934.
No staff are employed by the Company (2020 - no staff).
Of the total staff costs GBP14.3m was classified as cost of sales (2020 - GBP13.8m) and GBP1.1m as operating expenses (2020 - GBP1.0m). Redundancy costs of GBP0.0m (2020 - GBP0.09m) have been included as a cost of Restructure and Consultancy in Note 5.
8 Directors and key management personnel remuneration
Key management personnel identified as the Directors are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, and represent the Directors of the Group. The remuneration of the Directors for the period ended 26 December 2021 is as follows:
Share Social 2021 2020
based security Total Total
Emoluments Bonus payments Pensions Benefits costs
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
J Plant 135 - 101 - - 17 253 143
S Kaye (resigned
14 May 2021) 12 - - - - 1 13 100
A Kaye (resigned
15 September
2020) - - - - - - - 24
K Lassman 36 - - - - 4 40 17
M Vachhani 135 - 4 5 2 17 163 156
Harald
Samúelsson
(appointed 19
May 2021) 33 - - 1 - 3 37 -
---------- --------- ---------
Total 351 - 105 6 2 42 506 440
------------------ ------------ --------- ---------- ---------- ---------- ---------- --------- ---------
Company
The Company paid no director emoluments during the year (2020 - none).
9 Income tax expense
52 weeks 52 weeks
ended 26 ended 27
December December
2021 2020
GBP'000 GBP'000
UK Corporation tax
Adjustment in respect to previous
years - 105
Total current tax - 105
------------------------------------------ ----------- -----------
Deferred tax
Origination and reversal of temporary -
differences -
Total deferred tax - -
------------------------------------------ ----------- -----------
Total income tax credit - -
------------------------------------------ ----------- -----------
The tax charge for the period is lower than the standard rate of (2020 - lower than) corporation tax in the UK. The differences are explained below:
52 weeks 52 weeks
ended 26 ended 27
December December
2021 2020
GBP'000 GBP'000
Profit (loss) before tax 1,185 (12,561)
---------------------------------------- ----------- -----------
Tax on loss at the ordinary
rate of corporation
tax in UK of 19% (2020 - 19%) 225 (2,387)
Effects of
Fixed assets differences 101 -
Expenses not deductible for
tax 22 283
Income not taxable for tax purposes - (448)
Remeasurement of deferred tax
for changes in tax rates (1,055) (98)
Movement in deferred tax not
recognised 713 2,462
Adjustment in respect of previous
years - 105
Other movements (6) 188
Total tax charge - 105
---------------------------------------- ----------- -----------
Factors affecting future tax charges
Deferred taxes at the balance sheet date have been measured using the enacted tax rates at each date. These rates are 19% at 26 December 2021 (19% at 27 December 2020).
In March 2021 it was announced the UK corporation tax rate would increase to 25% in April 2023. This announcement does not constitute substantive enactment, however, the disclosed but unrecognised deferred tax disclosed in Note 20 is calculated at the future tax rate of 25%.
10 Earnings per share
26 December 27 December
2021 2020
Pence Pence
Basic profit (loss) per ordinary
share 0.84 (8.98)
Diluted profit (loss) per ordinary
share 0.74 (8.98)
2021 2020
Number Number '000
'000
Profit (loss) per share has been
calculated using the numbers shown
below:
Weighted average number of ordinary
shares used as the denominator in
calculating basic earnings per share 141,090 141,090
Adjustments for calculation of diluted
earnings per share:
Ordinary B shares 14,815 141,090
Options 3,265 -
Weighted average number of ordinary
shares and potential ordinary shares
used as the denominator in calculating
diluted earnings per share 159,170 141,090
2021 2020
GBP'000 GBP'000
Profit (loss) for the financial
period 1,185 (12,666)
The weighted average number of ordinary shares outstanding is increased by the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. Due to the profit made in the year; all share options are considered dilutive.
11 Dividend
No final dividend has been proposed by the Directors (2020 - GBPnil).
12 Intangibles
Trademarks Goodwill Total
GBP'000 GBP'000 GBP'000
At 29 December 2019 26 326 352
Additions 3 - 3
Amortisation of trademarks (3) - (3)
Impairments - (326) (326)
At 27 December 2020 26 - 26
Additions 5 - 5
Amortisation of trademarks (3) - (3)
Impairments - - -
At 26 December 2021 28 - 28
------------------------------- -------------- ------------ ---------
The recoverable amount of goodwill has been determined on a value in use basis. This has been based on the performance of the units since they were acquired and management's forecasts, which assume the sites will perform at least as well as the market generally. The forecast cash flows cover a period of the committed lease length, assuming a growth rate of 0.5% (2020 - 0.5%) and are discounted at a rate of 6% (2020 - 6%). During the 52 weeks ended 26 December 2021, the Group recognised an impairment loss of GBPnil (2020 - GBP0.3m) in relation to previously acquired goodwill recognised on acquisition of the restaurants noted in the table below. The impairment charge reflects the forecast cashflow following the pandemic. Goodwill had been allocated to CGUs as follows;
Goodwill GBP'000
Shaftesbury Avenue 196
Cambridge 130
At 29 December 2019 326
Impairments (326)
At 27 December 2020 -
------------------------- ---------
13 Property, plant and equipment and right-of-use assets
Furniture
fixtures
Leasehold and computer Total fixed Right-of-use
improvements equipment assets assets Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 30 December
2019 38,661 10,107 48,768 55,119 103,887
Additions 2 118 120 - 120
Lease modifications - - - (814) (814)
Disposals (1,487) (333) (1,820) (859) (2,679)
At 27 December
2020 37,176 9,892 47,068 53,446 100,514
---------------------- --------------- --------------- ------------- ---------------- ---------
Additions 145 399 544 951 1,495
Lease modifications - - - (830) (830)
At 26 December
2021 37,321 10,291 47,612 53,567 101,179
---------------------- --------------- --------------- ------------- ---------------- ---------
Depreciation
At 29 December
2019 26,674 7,524 34,198 - 34,198
Provided
for the period 757 585 1,342 3,592 4,934
Impairment (2,133) (122) (2,255) 10,043 7,788
Disposals (1,464) (325) (1,789) - (1,789)
At 27 December
2020 23,834 7,662 31,496 13,635 45,131
---------------------- --------------- --------------- ------------- ---------------- ---------
Provided
for the period 743 554 1,297 3,142 4,439
Impairment 157 100 257 (257) -
At 26 December
2021 24,734 8,316 33,050 16,520 49,570
---------------------- --------------- --------------- ------------- ---------------- ---------
Net book
value
At 26 December
2021 12,587 1,975 14,562 37,047 51,609
---------------------- --------------- --------------- ------------- ---------------- ---------
At 27 December
2020 13,342 2,230 15,572 39,811 55,383
---------------------- --------------- --------------- ------------- ---------------- ---------
During the 52 weeks ended 26 December 2021, the Group recognised an impairment charge of GBPnil (2020: GBP7.8m) due to impairment of ROU assets GBP0.26m (2020: GBP10.0m) and release on fixed assets GBP0.26m (2020: GBP2.2m). The impairment movement is due to the reassessment by each individual CGU following a change in performance and/or change in assets. The impairment calculation is sensitive to changes in the assumptions and estimates used. For example a 1% decrease in the discount rate would result in a release of the net impairment by GBP1.2m, an increase of 1% would result in an impairment charge of GBP1.2m and a 1% growth rate would result in a release of the impairment charge by GBP0.5m.
The total carrying value of the CGUs that have been impaired in the period is GBP15.4m (2020: GBP21.8m). These have been impaired to their value in use of GBP9.2m (GBP2020: GBP10.9m). The total carrying value of the CGUs that have been released in the period is GBP11.3m (2020: GBPnil).
The key judgements and estimates in the inputs in calculating the impairments are outlined in note 2(d).
Assets held for sale accounted for a carrying value of GBPnil (2020 - GBPnil).
Company
The Company holds no property, plant and equipment.
14 Leases
26 December 27 December
2021 2020
GBP'000 GBP'000
Current
Lease liabilities 2,024 2,904
-------------------------- ------------- --- -------------
2,024 2,904
------------------------ ------------- --- -------------
Non-current
Lease liabilities 50,157 52,219
-------------------------- ------------- --- -------------
50,157 52,219
------------------------ ------------- --- -------------
52,181 55,123
------------------------ ------------- --- -------------
Due within one year 2,024 2,904
Due two to five years 12,371 11,908
Due over five years 37,786 40,311
-------------------------- ------------- --- -------------
52,181 55,123
------------------------ ------------- --- -------------
Lease liabilities are measured at present value of the remaining lease payments discounted using the Group's incremental borrowing rate of 4.5% associated with the lease plus the Bank of England base rate of 0.1% (2020: 4.6%). The lease liabilities as at 26 December 2021 were GBP52.1m (2020: GBP55.1m).
In the period to 27 December 2020, right-of-use assets were measured on transition at an amount equal to the minimum lease liability at the date of initial application and adjusted for an onerous lease provision of GBP2.8m and a lease incentive of GBP1.3m. In addition, GBP0.6m was reclassified from prepaid operating lease to ROU.
15 Investments
GBP'000
Company
At 29 December 2019 3,170
Share based payment in respect
of subsidiary 44
At 27 December 2020 3,214
------------------------------------- -----------
Share based payment in respect
of subsidiary 120
At 26 December 2021 3,334
------------------------------------- -----------
The Company's investments are wholly related to a 100% ordinary shareholding in Took Us a Long Time Limited (2020 - 100% holding), a company registered in England and Wales with registered offices at 32 Charlotte Street, London. Took Us a Long Time Limited is primarily engaged with the operation of restaurants.
16 Inventories
26 December 27 December
2021 2020
GBP'000 GBP'000
Raw materials and consumables 855 591
Smallware inventories 1,248 1,231
2,103 1,822
-------------------------------- ------------- --- -------------
In the Directors' opinion there is no material difference between the replacement cost of inventories and the amounts stated above. Raw material and consumable inventory purchased and recognised as an expense in the period was GBP8.6m (2020 - GBP6.1m).
17 Trade and other receivables
26 December 27 December
2021 2020
GBP'000 GBP'000
Trade receivables 211 245
Prepayments and other receivables 1,249 1,247
Total trade and other receivables 1,460 1,492
---------------------------------------- ------------- -------------
Less non-current portion (Deposits) (105) (129)
1,355 1,363
-------------------------------------- ------------- -------------
Company
Amounts due from subsidiary 3,836 3,978
Total trade and other receivables 3,836 3,978
---------------------------------------- ------------- -------------
Classified as non-current 3,836 3,978
---------------------------------------- ------------- -------------
There has been an increase in the credit risk of this loan since it was advanced due to the deterioration in the market and the resulting impact on the performance of the trading company. The Company has previously made loans to the trading subsidiary of GBP28.2m (2020 - GBP28.4m).
The Directors of the Company consider this loan to be classed as Stage 2 under the General Approach set out in IFRS 9. The Company has made provisions of GBP24.4m (2020 - GBP24.4m) which represents the lifetime expected credit losses. In assessing the lifetime expected credit losses consideration has been given to a number of factors including internal forecasts of EBITDA, cashflow and the consolidated net asset value of the Group at the balance sheet date.
18 Trade and other payables
26 December 27 December
2021 2020
GBP'000 GBP'000
Trade payables 3,952 3,865
Taxations and social security 1,506 3,154
Accruals and deferred income 3,314 2,451
Other payables 1,801 1,227
Total trade and other payables 10,573 10,697
---------------------------------------- ------------- --- -------------
Less non-current portion (Deposits) (80) (80)
---------------------------------------- ------------- --- -------------
10,493 10,617
-------------------------------------- ------------- --- -------------
Included within trade payables are GBP0.01m (2020 - GBP0.20m) due to related parties (note 28).
19 Provisions
26 December 27 December
2021 2020
GBP'000 GBP'000
At 29 December 2019 2,783
IFRS 16 adjustment - (2,783)
At 27 December 2020 335 -
Dilapidations provision utilisation (38) -
in the period
Dilapidations provision charge
in the period - 335
At 26 December 2021 297 335
---------------------------------------- ------------- --- -------------
On transition to IFRS 16, the right-of-use assets was adjusted for an onerous provision of GBP2.7m. This provision had been made against sites where projected future trading income was insufficient to cover the unavoidable costs under the lease. The provision was based on the expected cash out flows of these sites and the associated costs of exiting these leases and the time expected to sell.
In the period to 26 December 2021, the Group has recognised a provision of GBP0.3m for dilapidations for a number of sites, where the need to carry out the work has been identified but a full survey and commission has not been undertaken and therefore management has applied their judgment in determining the provision.
20 Deferred tax
26 December 27 December
2021 2020
GBP'000 GBP'000
At the beginning of the period - -
Profit and loss credit/(charge) - -
---------------------------------
- -
--------------------------------- ------------- ----- -------------
Accelerated capital allowances - -
Tax losses carried forward - -
At the end of the period - -
--------------------------------- ------------- ----- -------------
Due to the uncertainty of future profits, a deferred tax asset of GBP4.5m (2020 - GBP3.4m) is not recognised in these financial statements.
21 Borrowings
26 December 27 December
2021 2020
GBP'000 GBP'000
Current
Secured bank borrowings 313 -
------------------------- ------------- ----- -------------
313 -
------------------------- ------------- ----- -------------
Non-current
Secured bank borrowings 937 -
------------------------- ------------- ----- -------------
937 -
------------------------- ------------- ----- -------------
1,250 -
------------------------- ------------- ----- -------------
The bank loan attracts interest at a margin of 4.5% over the Bank of England base rate and repayable in 12 instalments with a final repayment on 15 January 2024.
Maturity of secured bank borrowings
Due within one year 369 -
Due In more than one year but less 455 -
than two years
Due In more than two years but less 542 -
than five years
------------------------------------- ------- ---
1,366 -
------------------------------------- ------- ---
Future interest payments (116) -
1,250 -
------------------------------------- ------- ---
The bank borrowings are secured by legal charges over assets of the group's subsidiary Took Us A Long Time Limited, and Tasty Plc, as an individual company, has provided a cross guarantee and debenture in favour of the lender.
22 Share capital
Number Number Number GBP'000
Ordinary
Ordinary B Deferred
Called up and fully paid:
Ordinary shares at 0.1
pence 59,795,496 - - 60
Deferred shares at 9.9
pence (as a result of
sub-division - - 59,795,496 5,920
Ordinary shares issued
at 0.1 pence 81,294,262 - - 81
At 27 December 2020 141,089,758 - 59,795,496 6,061
Ordinary B shares at 0.00001
pence - 15,676,640 - 0
At 26 December 2021 141,089,758 15,676,640 59,795,496 6,061
--------------------------------- ------------- ------------ ------------- ---------
Share Capital Reorganisation, placing and open offer
On 1 May 2019 the Group sub-divided each existing ordinary share into one ordinary share of 0.1 pence each and one deferred share of 9.9 pence each. Following this, the Group issued 81,294,262 Ordinary Shares through a placing and open offer at 4 pence, each at nominal value of 0.1 pence.
In January 2021 Daniel Jonathan Plant was awarded 15,676,640 'B' shares in Tasty plc which can be converted to 'A' shares subject to achievement of hurdle rates.
23 Reserves
Share capital comprises of the nominal value of the issued shares.
Share premium reserve is the amount subscribed in excess of the nominal value of shares net of issue costs.
Cumulative gains and losses recognised in the income statement are shown in the Retained deficit reserves, together with other items taken direct to equity.
The merger reserve arose in 2006 on the creation of the Group.
24 Leases
Operating leases where the Group is the lessor
The total future value of minimum operating lease receipts are shown below. The receipts are from sub-tenants on contractual sub-leases.
26 December 27 December
2021 2020
GBP'000 GBP'000
Within one year: receipts 290 253
--------------------------------------- ------------- -------------
Within two to five years: receipts 1,158 1,158
--------------------------------------- ------------- -------------
Over five years: receipts 1,845 2,135
3,293 3,546
------------------------------------- ------------- -------------
25 Pensions
The Group made contributions of GBP6,000 (2020 - GBP5,000) to the personal pension plan of the Directors. During the year the Group made contributions to employee pensions of GBP0.2m (2020 - GBP0.2m). As at 26 December 2021, contributions of GBP99,000 due in respect of the current reporting period had not been paid over to the schemes (2020 - GBP99,000).
26 Share based payments
Weighted
average exercise
price Number
(pence) '000
At 29 December 2019 39.5 6,925
Lapsed 4.4 (745)
Cancelled 105.0 (2,400)
At 27 December 2020 4.1 3,780
Lapsed 4.4 (515)
Cancelled - -
Issued 0.0 15,677
At 26 December 2021 0.7 18,942
------------------------ ---------------------------- ---------
The exercise price of options outstanding at the end of the period ranged between 0p and 4p (2020 - 3p and 4p) and their weighted average remaining contractual life was 3.9 years (2020 - 9 years).
Of the total number of options outstanding at the end of period none (2020 - none) had vested and were exercisable at the end of the period.
The market price of the Company's ordinary shares as at 26 December 2021 was 4.9p and the range during the financial year was from 2.9p to 7.9p (as at 27 December 2020 was 3.3p and the range during the financial year was from 1.3p to 4.5p).
No option was exercised in 2021 (2020 GBPnil) and 15.7m shares granted in 2021 (2020 - nil).
On 29 July 2019 options of 3.5m were granted at a grant price of 4.4p reflecting the opening share price. The options vest over three years and expire in 10 years and no other conditions are attached. A charge of GBP61,000 will be recognised over the three years based on a volatility of 63.5% and risk rate of 0.5% using the Binomial method. The volatility is weighted on a four year basis and the risk free rate is based on risk free rate on the mid point between the vesting date and expiry.
On 17 October 2019 options of 1m were granted at a grant price of 3.3p reflecting the opening share price. The options vest over three years and expire in 10 years and no other conditions are attached. A charge of GBP12,000 will be recognised over the three years based on a volatility of 61.6% and risk rate of 0.5% using the Binomial method. The volatility is weighted on a four year basis and the risk free rate is based on risk free rate on the mid point between the vesting date and expiry.
In January 2021 Daniel Jonathan Plant was awarded 15,676,640 'B' shares in Tasty plc which can be converted to 'A' shares subject to achievement of certain hurdle rates. These 'B' shares were issued at nominal value of 0.00001 pence. The first hurdle has been achieved and 5,225,547 can be converted to 'A' shares from the first anniversary date. A charge of GBP181,000 will be recognised over the four years based on a volatility of 85% and risk rate of -0.05% using the Monte Carlo method. The volatility is weighted on a four year basis and the risk free rate is based on yield on a 4-year zero coupon government security at the grant date.
The 18.9m shares outstanding as at 26 December 2021 comprise of the options issued in July 2019, October 2019 and January 2021. There are no other outstanding options.
27 Financial instruments
In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note describes the Group's objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout these financial statements.
The Group is exposed through its operations to the following financial risks:
-- Credit risk -- Interest rate risk -- Liquidity risk
The Group does not have any material exposure to currency risk or other market price risk.
There have been no substantive changes in the Group's exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note.
Principal financial instruments
The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:
-- loans and borrowings -- trade receivables -- cash and cash equivalents -- trade and other payables
The Group's financial instruments apart from cash and cash equivalents are measured on an amortised cost basis. Due to the short-term nature of trade receivables and trade/ other payables, the carrying value approximates their fair value.
26 December 27 December
Financial assets 2021 2020
GBP'000 GBP'000
Cash and cash equivalents 11,005 8,028
Trade and other receivables 316 374
Total financial assets 11,321 8,402
------------------------------------- ------------- -------------
Financial liabilities (amortised
cost)
Trade and other payables 5,753 5,091
Loans and borrowings 1,250 -
Finance leases 52,181 55,123
Total financial liabilities 59,184 60,214
------------------------------------- ------------- -------------
Company - Financial assets (amortised 26 December 27 December
cost) 2021 2020
GBP'000 GBP'000
Intercompany loan 3,836 3,978
------------------------------------------ ------------- --- -------------
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group's risk management objectives and policies.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group's competitiveness and flexibility. Further details regarding these policies are set out below:
Credit risk
The Group's assets and liabilities are wholly attributable to one operating segment (operating restaurants) and arises solely in one geographical segment (United Kingdom).
Credit risk is the risk of the financial loss to the Group if a customer or a counterparty to a financial instrument fails to meet its contractual obligations. The Group is mainly exposed to credit risk from rebates from suppliers, sub-letting income and trade receivables.
Trade and other receivables are disclosed in note 17 and represent the maximum credit exposure for the Group.
The following table sets out the ageing of trade receivables:
26 December 27 December
2021 2020
Ageing of receivables GBP'000 GBP'000
<30 days 60 58
31-60 days 15 (7)
61-120 days 33 83
>120 days 194 111
Provision for doubtful debt (91) -
------------- -------------
211 245
------------------------------ ------------- -------------
The Group's principal financial assets are cash and trade receivables. There is minimal credit risk associated with the Group's cash balances. Cash balances are all held with recognised financial institutions. Trade receivables arise in respect of rebates from a major supplier and therefore they are largely offset by trade payables. As such the net amounts receivable form an insignificant part of the Group's business model and therefore the credit risk associated with them is also insignificant to the Group as a whole.
The Company's principal financial assets are intercompany receivables. These balances arise due to the funds flow from the listed Company to the trading subsidiary and are repayable on demand. The credit risk arising from these assets are linked to the underlying trading performance of the trading subsidiary. See note 17 for further details on intercompany debt.
Liquidity risk
Liquidity risk arises from the Group's management of working capital. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. The Group's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. To achieve this aim, the Group seeks to maintain cash balances to meet its expected cash requirements as determined by regular cash flow forecasts prepared by management.
The following table sets out the contractual maturities (representing undiscounted contractual cash-flows) of financial liabilities:
Up to 3 Between Between Between Over 5
months 3 and 1 and 2 and 5 years
12 months 2 years years
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Trade & other payables 5,673 24 - - 56
Loan and other borrowings 134 235 455 542 -
Finance leases 760 1,263 2,976 9,395 37,787
As at 26 December
2021 6,567 1,522 3,431 9,937 37,843
---------------------------- --------- ------------ ---------- ---------- ---------
Up to 3 Between Between Between Over 5
months 3 and 1 and 2 and 5 years
12 months 2 years years
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Trade & other payables 5,012 - 24 - 56
Loan and other borrowings - - - - -
Finance leases 689 2,215 2,952 8,955 40,312
As at 27 December
2020 5,701 2,215 2,976 8,955 40,368
---------------------------- --------- ------------ ---------- ---------- ---------
Non-current other payables are sub-let site rent deposits.
Interest rate risk
The Group seeks to minimise interest costs by regularly reviewing cash balances.
Interest rate risk arises from the Group's use of interest bearing loans linked to LIBOR. The Group is exposed to cash flow interest rate risk from long term borrowings at variable rate. The Board considers the exposure to the interest rate risk to be acceptable.
Surplus funds are invested in interest bearing, instant access bank accounts.
Loans and borrowings
During the year the Group had a loan facility with Barclays Bank Plc.
Capital disclosures
The Group's capital is made up of ordinary share capital, deferred share capital, share premium, merger reserve and retained deficit totalling GBP1.9m (2020 - GBP0.6m).
The Group's objective when maintaining capital is to safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders.
The Group manages its capital structure and makes adjustments to it in the light of strategic plans. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares.
28 Related party transactions
The Directors are considered to be the key management personnel. Details of directors' remuneration are shown in Note 8.
The Group pays fees, rent and associated insurance to a number of companies considered related parties by virtue of the interests held by the Directors in such companies. The Group also reimburses expenses incurred by such companies on behalf of the Group.
52 weeks 52 weeks
ended 26 ended 27
December December
2021 2020
GBP'000 GBP'000
Rent, insurance and legal services
charged to the group:
* Kropifko Properties Ltd (32) (78)
* KLP Partnership (28) (72)
* ECH Properties Ltd (25) (52)
* Proper Proper T Ltd (33) (80)
* Super Hero Properties - (68)
* Benja Properties Ltd - (76)
* Howard Kennedy LLP - (10)
Balance due to related parties: 11 198
The rent paid to related parties is considered to be a reasonable reflection of the market rate for the properties.
29 Reconciliation of profit / (loss) before tax to net cash inflow from operating activities
52 weeks 52 weeks
ended 26 ended 27
December December
2021 2020
GBP'000 GBP'000
Group
Profit (loss) before tax 1,185 (12,561)
Finance income - (4)
Finance expense 59 34
Finance expense (IFRS 16) 2,438 2,514
Share based payment charge 120 44
Share issue costs - (68)
Depreciation of right-of-use assets
(IFRS16) 3,142 3,592
Depreciation of property plant
and equipment 1,297 1,342
Impairment of goodwill - 326
Impairment of property, plant
and equipment - (2,255)
Impairment of Right-of-use assets - 10,043
Profit from sale of property plant
and equipment (3) (1,184)
Amortisation of intangible assets 3 3
Dilapidations provision charge - 335
Dilapidations provision utilisation (38) -
Other non cash - 1
Decrease / (increase) in inventories (282) 827
Decrease / (increase) in trade
and other receivables (59) 1,852
(Decrease)/ Increase in trade
and other payables (36) 2,734
7,826 7,575
--------------------------------------- ----------- -----------
52 weeks 52 weeks
ended 26 ended 27
December December
2021 2020
GBP'000 GBP'000
Company
Loss before tax (145) (3,254)
Decrease in trade and other receivables 142 3,322
(3) 68
------------------------------------------ ----------- -----------
30 Reconciliation of financing activity
Lease Lease Bank Loan Bank Loan Total
liabilities liabilities
Due within Due after Due within Due after
1 year 1 year 1 year 1 year
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Net debt as at 29
December 2019 - - 800 852 1,652
IFRS 16 transitional
adjustment 1,647 55,761 - - 57,408
Net debt as at 30
December 2019 1,647 55,761 800 852 59,060
Cashflow (1,735) - (800) (852) (3,387)
Addition / (decrease)
to lease liability 2,992 (3,542) - - (550)
Net debt as at 27
December 2020 2,904 52,219 - - 55,123
Cashflow (3,064) - 313 937 (1,814)
Addition / (decrease)
to lease liability 2,184 (2,062) - - 122
Net debt as at 26
December 2021 2,024 50,157 313 937 53,431
------------------------ -------------- -------------- ------------ ----------- ---------
31 Post Balance Sheet Events
There are none to report.
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(END) Dow Jones Newswires
March 23, 2022 03:00 ET (07:00 GMT)
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