RNS Number:3933X
Food & Drink Group (The) PLC
30 May 2007
The Food & Drink Group PLC
("FDG" or "the Group")
Interim results for the 29 weeks ended 14 April 2007
The Food & Drink Group PLC, the London focussed licensed retailer and operator
of 33 bars including Henry J Bean's and Jamies, announces results for the 29
weeks ended 14 April 2007.
HIGHLIGHTS
* Turnover up 5.2% to #10.5m (2006: #10.0m)
* Like-for-like sales up 6.1%
* EBITDA up to #1.2m (2006: #1.1m)
* Profit before tax up 98% to #0.6m (2006: #0.3m)
* Earnings per share up 102% to 11.5p (2006: 5.7p)
* Interim dividend of 0.5p payable 6 July 2007
* Gross margin increased to 75.1% (2006: 74.6%)
* Acquisition of seven leasehold sites from Puzzle Pub Company for #1.2m in
the second half
* Strong current trading with like-for-likes up 8.5% since the half year
Stephen Thomas, Chairman of The Food & Drink Group, commented:
"I am delighted to report another strong period of trading for the Group. This
has been driven by continued strong underlying sales growth across all three
trading divisions, together with an excellent performance from our private
function and party business. Trading in the second half has begun well with
like-for-like sales up 8.5% since the half year, with good early progress made
on our recent acquisition of seven sites. We remain confident of another
successful year for the Group."
30 May 2007
ENQUIRIES:
The Food & Drink Group PLC Tel: 020 7349 4440
Stephen Thomas, Chairman
James Kowszun, Chief Executive
College Hill Tel: 020 7457 2020
Justine Warren
Jamie Ramsay
The Food & Drink Group PLC
Interim Results for the 29 weeks ended 14 April 2007
Financials
The first half of the current financial year has seen a pleasing performance
with turnover increasing by 5.2% to #10.5m (2006: #10.0m). This sales increase
was driven by strong underlying like-for-like sales growth of 6.1%, off-set by
the impact of the previously-announced disposals of Canyon Restaurant and
Jamies, Philpot Lane, both of which completed in January. This good
like-for-like trading has been delivered across all three trading divisions -
Henry J Bean's, City Bars and Bars, with the growth at Henry J Bean's
particularly pleasing at +13.9%. The performance is the result of our
continuous focus on aiming to achieve operational excellence, coupled with a
strategy that has, at its core, a requirement to continually evolve in response
to the changing needs of our customer base.
Net interest paid has reduced to #0.3m (2006: #0.4m), primarily as a result of
the Group paying a lower margin above base rates on its debt. At the half year
end, net debt had marginally increased to #8.7m (2006: #8.6m), following #0.5m
of capital expenditure. Gearing is unchanged from the last year-end at 102% but
improved from this time last year (2006: 117%).
Profit before tax increased by 98% to #0.6m (2006: #0.3m), with earnings per
share for the period up by 102% to 11.5p (2006: 5.7p). Excluding amortisation
of goodwill, profit on disposal of fixed assets and reorganisation costs, the
underlying profit performance has improved by 31% to #0.4m (2006: #0.3m) with
earnings per share on an equivalent basis up 32% to 7.7p (2006: 5.9p)
Following the declaration of the Group's maiden dividend in last year's accounts
the payment is included in these interim accounts. The Board is pleased to
recommend an interim net dividend of 0.5p per share. This will be payable on 6
July 2007 to shareholders on the register on 8 June 2007.
Operations
Management focus during the second half will continue to concentrate on
delivering sustainable sales growth through those areas where the Group is best
positioned to add value, with specific attention paid to food development,
further improvement of our wine offer and the potential to maximise the use of
our trading locations for private functions and parties.
Following the recruitment of an Executive Chef last year, we have made tangible
progress in food development. A re-tender process for key suppliers, coupled
with new menus implemented throughout the business since Christmas, has enabled
us to improve the quality of our food offer, whilst maintaining gross margin.
In addition, food sales during Christmas trading showed a 12% like-for-like
increase, with 34,000 meals served in December.
Wine expertise has continued to be one of our greatest strengths in the City
Bars business in particular. We are increasingly migrating this expertise
across the Group, with a particular focus on Henry J Bean's. Improvements in
staff knowledge and confidence levels, together with a higher-quality wine list,
have positively contributed to overall like-for-like sales growth of the brand.
In addition, private functions bookings have been a big success benefiting from
increased resources. Pre-booked functions over the crucial Christmas trading
period were significantly higher than the previous year, with extensive use of
both our own website and other function-booking sites combining to deliver a
result ahead of expectations. This increase in bookings has continued into 2007
and we are extremely encouraged by the results to date. Since recruiting a
party co-ordinator, the conversion of website enquiries into confirmed bookings
has increased from one-in-three to one-in-two. The only major capital project
in the first half was to open a bespoke function space above Hodgsons Wine Bar
in Chancery Lane, London. This space has been fitted out to maximise both the
visual impact and flexibility of function. Since opening in late 2006, bookings
have steadily increased and the outlook is promising.
These activities have successfully driven sales performance whilst ensuring that
gross profit continues to improve. Gross margin in the period under review has
increased by 0.5 percentage points to 75.1% (2006: 74.6%). It is anticipated
that the re-negotiation of drinks contracts following the acquisition of the
seven Puzzle sites in April will deliver further improvements in the second half
of the financial year.
Sound cost control within the Group continues, with wages, variable costs and
central overhead continuing to be kept within acceptable parameters. As a
result of these measures, EBITDA excluding exceptional items has increased to
#1.2m (2006: #1.1m) with the EBITDA margin improving to 11.0% (2006: 10.8%).
The disposal of Canyon restaurant generated sale proceeds of #1.2m and delivered
a profit on disposal of #0.5m. Whilst the site was significantly cash
generative, this was an excellent result, enabling us to exit from our last
remaining fine dining restaurant and focus entirely on our core business.
Acquisition
The Group announced the acquisition of seven leasehold sites from Puzzle Pub
Company Limited just after the half year-end for #1.2m on a multiple of four
times historic EBITDA. Integration of the sites has three clear phases;
firstly, the transition of back of house systems and operating controls which
has already been completed; secondly, achieving Group purchasing benefits and
the implementation of operational improvements, which is well underway; and
finally, following legal assignment of the leases, refurbishment and
repositioning of the sites. To achieve this final phase, these sites will
become part of a rolling refurbishment programme over the second half and into
the new financial year, with the aim of completing the works in time for
Christmas 2007. Financial justification for the acquisition was based on
delivering those areas we can control, namely phases I and II with the
refurbishment process enhancing the situation. The full financial benefit of
the acquisition will therefore be seen in the next financial year.
Current Trading and Outlook
Immediately after the half year, the Group refurbished Jamies, Bishopsgate,
evolving both the design elements of the brand and the details of the offer.
The new-look Bishopsgate site now benefits from a greater emphasis on high
quality, simply-prepared food and classic cocktails, to complement the existing
Jamies wine expertise. Early signs are encouraging, both for this specific site
and for the longer-term expansion potential for the Jamies brand. In addition,
with a new Henry J Bean's due to open in Wimbledon this summer and advanced
discussions on a new franchise opportunity, we look forward to reporting further
progress on both brands in the near future.
Trade has continued strongly at the start of the second half of the financial
year, with like-for-like sales up 8.5% in the first six weeks since the second
half. We are well prepared for the implementation of the Smoking ban in England
in July 2007 and the trading opportunity which this presents. With the highly
cash-generative summer trading period to come, the Board remains confident of
another successful year for the Group.
Stephen Thomas
Chairman
30 May 2007
The Food & Drink Group PLC
Unaudited Consolidated Profit & Loss Account
for the 29 weeks ended 14 April 2007
29 Weeks 28 Weeks 52 weeks
to 14 April to 8 April to 23 Sept
2007 2006 2006
Unaudited Unaudited Audited
#'000 #'000 #'000
Turnover 10,490 9,975 20,313
Cost of Sales (2,610) (2,532) (5,032)
Gross Profit 7,880 7,443 15,281
Administrative expenses excluding exceptional (7,403) (7,063) (13,929)
expenses
Exceptional reorganisation costs 0 (150) (150)
Total administrative expenses (7,403) (7,213) (14,079)
Other Operating Income 0 60 60
Operating Profit on ordinary activities 477 290 1,262
Profit on sale of tangible fixed assets 450 403 373
Interest receivable and similar income 3 6 8
Interest payable and similar charges (345) (404) (715)
Profit on ordinary activities before taxation 585 295 928
Taxation on profit on ordinary activities (10) (10) (26)
Profit for the financial period 575 285 902
Dividend Paid (50) 0 0
Amounts transferred to reserves 525 285 902
Earnings per share
Basic 11.49 p 5.70 p 18.00 p
Fully diluted 10.73 p 5.48 p 17.30 p
The Food & Drink Group PLC
Unaudited Consolidated Balance Sheet
As at As at As at
14 April 8 April 23 Sept
2007 2006 2006
Unaudited Unaudited Audited
#'000 #'000 #'000
Fixed Assets
Intangible 8,697 7,679 8,959
Tangible 10,166 11,028 10,893
18,863 18,707 19,852
Current Assets
Stocks 320 313 335
Deferred Tax 684 234 684
Debtors & Prepayments 3,403 2,430 2,862
Cash 1,446 1,110 735
5,853 4,087 4,616
Creditors :amounts falling due within
one year (5,836) (7,882) (7,405)
Net current assets /(liabilities) 17 (3,795) (2,789)
Total assets less current liabilities 18,880 14,912 17,063
Creditors : amounts falling due after
more than one year (9,124) (7,500) (7,750)
Provisions for liabilities and charges (1,209) 0 (1,309)
8,547 7,412 8,004
Capital and reserves
Share capital 50 50 50
Share premium 6,022 8,104 6,022
Merger reserve 0 2,060 0
Capital redemption reserve 0 10,847 0
Other reserve 0 (54) 0
P&L account 2,475 (13,595) 1,932
Shareholders' funds 8,547 7,412 8,004
The Food & Drink Group PLC
Unaudited Consolidated Cash Flow Statement for the 29 weeks ended 14 April 2007
29 weeks 28 weeks 52 weeks
ended ended ended
14 April 2007 8 April 2006 23 Sept 2006
Unaudited Unaudited Audited
#'000 #'000 #'000
Net cash (outflow) / inflow from operating (961) 988 2,213
activities
Returns on investment & servicing of finance
Interest Received 3 6 8
Interest Paid (345) (404) (715)
Net cash outflow from returns on investments (342) (398) (707)
and servicing of finance
Taxation (10) 0 (26)
Capital expenditure and financial investment
Purchase of tangible fixed assets (478) (770) (1,104)
Net proceeds from sale of tangible fixed 1,253 750 719
assets
Net cash inflow/(outflow) from capital 775 (20) (385)
investment and financial investment
Net cash (outflow) / inflow before (538) 570 1,095
management of liquid resources
Financing
Cost of issue of new capital 0 0 (25)
New short term borrowing 0 750 0
Repayment of short term borrowing (1,125) (750) 0
New long term borrowing 2,374 0 0
Repayment of long term borrowing 0 0 (875)
Net cash inflow from financing 1,249 0 (900)
Increase in cash 711 570 195
Interim Results for the 29 weeks ended 14 April 2007
Notes to the Interim Results
1. Reconciliation of operating profit to net cash (outflow) / inflow
from operating activities
14 April 2007 8 April 2006 23 Sept 2006
Unaudited Unaudited Audited
#'000 #'000 #'000
Operating profit for the period 477 290 1,262
Amortisation of goodwill 262 262 549
Depreciation 419 435 759
Loss on sales of fixed asset 0 0 24
(Increase) / decrease in stock 15 (10) (32)
Decrease / (increase) in debtors (341) (108) (540)
(Decrease) / increase in creditors (1,811) 119 191
Share options charge 18 0 0
Net cash (outflow) / inflow from operating (961) 988 2,213
activities
2.
14 April 2007 8 April 2006 23 Sept 2006
Unaudited Unaudited Audited
#'000 #'000 #'000
Increase in cash in the period 711 570 195
Cash outflow / (inflow) from repayment of (1,249) 0 875
loan
Change in net debt resulting from cash (538) 570 1,070
flows
Non cash changes in net funds - - -
Movement in net debt in the year (538) 570 1,070
Net debt at start of period (8,140) (9,210) (9,210)
Net debt at end of period (8,678) (8,640) (8,140)
3. Analysis of net funds / (debt)
At 23 Cash flow non-cash At 14
Sept #'000 movement April
2006 #'000 2007
#'000 #'000
Cash at bank and in hand 735 711 0 1,446
Loans due before one year (1,500) 500 (1,000)
Loans due after one year (7,375) (1,249) (500) (9,124)
Financing excluding share capital (8,875) (1,249) 0 (10,124)
Total (8,140) (538) 0 (8,678)
4. The interim statements have been prepared under the same accounting
policies as the statutory accounts for the period ending 23 September 2006.
The Group has adopted FRS20 'Share based payments' in respect of options
granted to directors and employees. Share options granted since 7 November
2002, excluding options that have lapsed, have been valued at the grant
date using an appropriate options pricing model and are charged to the
operating profit over the vesting period of the option. This has given rise
to a charge to profits of #18,000 in the current period. Comparative
amounts have not been restated as the amounts are not material.
5. Based upon the results of the Group there is no UK corporation tax charge /
(credit) for the period. The tax shown relates to withholding tax from
international franchise income.
6. The calculation of basic and diluted earnings per share is based upon a
profit after taxation for the period of #575,000 (2006: profit #285,000;
and a profit for the 52 weeks ended 23 September 2006: #902,000). The
number of ordinary shares in issue at the end of the period was 5,005,496,
and 5,356,456 on a fully diluted basis, (2006: 5,000,000 and 5,203,073: and
52 weeks ended 23 September 2006: 5,005,496 and 5,202,104).
7. The financial information is unaudited and does not amount to full
accounts, within the meaning of Section 240 of the Companies Act, 1985.
Accounts for The Food & Drink Group plc for the period to 23 September
2006, have been filed with the Registrar of Companies, and received an
unqualified audit report.
8. The Group's profit and loss account includes one exceptional item, relating
to profit on sale of tangible fixed assets of #450,000. This relates to the
disposal of the sites at Richmond and Camden, and the termination costs of
the short term occupancy at Jamies Philpot Lane.
9. Extract of Profit & Loss account showing margin and EBITDA
29 Weeks to 28 Weeks to 52 weeks to
14 April 8 April 23 Sept
2007 2006 2006
unaudited unaudited audited
#'000 #'000 #'000
Turnover 10,490 9,975 20,313
Cost of Sales (2,610) (2,532) (5,032)
Gross Profit 7,880 7,443 15,281
Gross profit percentage 75.1% 74.6% 75.2%
Administrative expenses
excluding Exceptional expenses,
depreciation and amortisation (6,722) (6,366) (12,621)
Earnings before interest, tax,
depreciation and amortisation 1,158 1,077 2,660
EBITDA Margin percentage to sales 11.0% 10.8% 13.1%
Depreciation (419) (435) (759)
Amortisatisation of Goodwill (262) (262) (549)
Exceptional reorganisation costs 0 (150) (150)
Total administrative expenses (7,403) (7,213) (14,079)
Other Operating Income 0 60 60
Operating Profit on ordinary activities 477 290 1,262
10. International Financial Reporting Standards
The Group is currently reviewing its implementation of IFRS, which includes
identifying the reporting difference between IFRS and UK GAAP.
This information is provided by RNS
The company news service from the London Stock Exchange
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